Full text of Commercial and Financial Chronicle : August 24, 1950, Vol. 172, No. 4936

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UNIVERSITY
OF MICH.GAN

ESTABLISHED 1S39

1950

SEP 8

Commercial w

BUSINESS MNINISIMMN
11IIMT

^Chronicle
Reg. U. S. Pat. Office

172

Volume

New

Number 4936

EDITORIAL

"Our chief

says

to

War

II,

and

This

is

approaching this subject, it is felt that a

In

indeed

problem, a problem which
would tax the best ability in the land.
It is a
problem, moreover, the nature of which is still
not understood by the powers that be, as is clearly
indicated by steps so far taken and so far proposed
by the Administration. The beginning of wisdom
in this matter is

a

been

ogy,

few high¬

1914

573,000

was

which had

wholesale value of about

a

$4-35 million.

realization that the difficulties

In 1941, just before we

World War II, output ex¬
4,300,000 units which had a
value of $3.6 billion.

entered
now

faced, inevitably great enough in any event,

immensely swollen by policies of the
past decade or two, particularly during World
War II. That this elementary fact is not under¬
stood in Washington may be clearly seen from*
the fact that we are proceeding with plans for
making the identical blunders again. And it
must be said that even those who appear to be
opposing the Administration from time to time
often reveal no more understanding.

Generally speaking, it is,

we

the Administration

that

intent

upon

as

heretofore,

It chooses

is,

Continued

on

page

are

Rockland Light

1949
new

a

all-time

point.

Last

about

614

million

built,

valued

at

high

year,
cars

choosing our executives and repre¬
sentatives in Congress, but we^ now?
know that these will be either So¬

estab¬

which

volume

up

there

to

were

cialists

trucks

and

'

One other reference to World War
I

and

then

we

can

that

leave

in
Art

Continued

*A

lecture

given
Analysis

July 28, 1950,
sponsored jointly

on

&

NOW

afforded

Bernstein

Democratic banner,

the

or

flying the Republican escutcheon. But if it
is to be the latter, and the type of Republican adminis¬
tration will be the democracy of a Wilson or a Cleve¬

on

page

the military, we may

influence of

the

well be on the

to duplicate either a Russian oligarchy or a German
dictatorship. It has never been simple to retain indi¬
vidual freedoms when the military have become a domi¬
way

20

the 9th in a series of 17 on
by the New York Securities
Department of Commerce

nant farce

in

a

nation.

And thus our coming Congres-

Continued

on

page

19

Economics.

a

IN

REGISTRATION—Underwriters and dealers in

corporate securi¬

with the SEC and potential
"Securities in Registration" Section, starting on page 30

complete picture of issu;s now registered

undertakings in

Preferred Stock,

our

State and

4.65%

Municipal

Custodian

Franklin

Funds,

600 Branches

inc.

^

A Mutual Fund

Price 100

yield 4.65%

COMMON STOCK FUND

across

on

request

UTILITIES FUND
INCOME

York 5

Chicago

THE NATIONAL CITY BANK

1,16

(BALANCED) FUND

Prospectus

Boston

upon request

Bond Department

BOND FUND

White,Weld&Co.
40 Wall Street, New

Bonds

Canada

Monthly Commercial Letter

PREFERRED STOCK FUND
Prospectus

under

M.

land, our liberties and freedoms may be retained without
too
much government interference.
If, however, we
shall have a socialistic form of government coupled with

Warde

In 1914, this country had
fewer than 1,800,000 vehicles regis¬
tered. At the end of 1941, there were 34% million cars
and trucks in registration.
past.

Securities

functioning

Allen

Democrats

billion.

about $8.2

shall, we hope, still—through
— have
the privilege of

ballot

Company

Series A,

to

that

20

SECURITIES

Cumulative

the

lished

compared

be

may

We

the

Industry and the University of Vermont's

ties

'

figures

believe, fair to

ignoring natural forces.

and Power

with

the

Natural Forces Ignored

assert

These

the restrictions.

come

ceeded

have been

standard of
happiness—

military, the less important become
the civilian
population.
The more
involved the international situation
becomes the more stringent will be¬

and* trucks,

cars

free nation en¬

Necessary and essential as such a
may be, we must realize
that the more important become the

Production in

World War.

the First

all its ramifications make it

longer are we to be a

condition

I'

small industry until after

a

been

Con¬
psychol¬
further inflation will be fully offset in stock market
by increased taxes and contracting profits.

gaged, without restraint, in improving our
living and unhampered in the pursuit of
but a nation that will more and more
be dominated by the military with
all the restrictions and complications
inherent in a military state.

period.
It was

never

stock prices, and instead they have

governed by actual and prospective earnings.

obvious that no

lights of the past 30 or 35 years should be emphasized,
in order to show how far the industry has come in that

a

on

The Korean situation and

with rising incomes.
Ascribes favorable auto earnings to postwar situation
and vulnerability of auto shares to fear of lower profits.

explosions.

Investment Counsel

inflation hrfs

cludes, in absence of complete change in mass

population, combined

increasing

economic

catastrophic

avoid

yet

bullish influence

production into fewer and stronger concerns. Looks for
continued growth of auto demand, due to shifting and

Deal and of World

inflation of the New

of the

Economist maintains historically

growth of automobile industry has been characterized by
fluctuations and instability, leading to concentration of

may be permitted to do so, we should
rephrase the President's statement to
read something like this: Our chief problem now
is how to increase defense production as required
in a situation which is already boiling as a result

like

Stock Exchange

Specialist in auto securities reviews growth of industry
and its progress through war and peace.
Points out

we

M. BERNSTEIN

President, Bernstein-Macaulay, Inc.,

Merrill Lynch, Pierce, Fenner & Beane,
Members of New York

ALLEN

By

By ARTHUR W. WARDE*

be to check inflation at its source."
If

Eainings Ratio oi Equities

Industry Securities

the President,
"is to increase defense production, in an economy
already
running
close to
capacity,
without
bringing on inflation." The Chief Executive then
added somewhat cryptically that "our aim should
problem now,"

Copy

a

Inflation—And the Price-

Aulo and Accessory

As We See It

Cents

30

Price

York, N. Y., Thursday, August 24, 1950

on

Gommme

OF NEW YORK

request

Head

FRANKLIN DISTRIBUTORS, Inc.
64 Wall

Street, New York 5

Bond

Dept. Teletype: NY 1-708

IS etc York
Seattle

Massachusetts

Canadian

Investors

Underwriters and
Distributors of

Second Fund

Canadian Bank

stocks

Municipal

and

Office: Toronto

THE CHASE

NATIONAL BANK
OF

THE

Los Angeles

CANADIAN

MILES

BONDS & STOCKS

SHOES

bonds

and

CITY OF NEW YORK

Agency: 20 Exchange PI.

Portland,Ore. San Francisco

COMMON

Corporate Securities
Prospectus from

authorized dealers

or

VANCE, SANDERS & CO.
Ill

OTIS & CO.

Goodbody & Co.

(Incorporated)

ESTABLISHED 1891

Devonshire Street

Established

BOSTON
Los

MEMBERS NEW YORK

Angeles




New

York

Cincinnati

Chicago

Columbus

Denver
Toledo

q> rp okati071

Dallas
Buffalo

40 Exchange

105 W.

115 BROADWAY
NEW

YORK

*

.

f./

IRA HAUPT & CO.
Members New
and

other

York Stock Exchange

Principal Exchanges

STOCK EXCH.

y>l'

CLEVELAND
Chicago

New York

1899

Dohwion Securities
Place, New York 5, N. Y.

ADAMS ST.

CHICAGO,

(

,

111 Broadway,
WOrth 4-6000

Teletype NY 1-702-3

WHitehall 4-8161

Boston

N. Y. 6

Teletype NY 1-270S

Telephone:

Enterprise 1820

2

The Commercial and Financial Chronicle

(710)

TRADING MARKETS

The

IN

Chase National Bank

Public National Bank

in the investment and

Manufacturers Trust Co.

which, each week,

Holding Corp.

nor

these

are

reasons

contained

articles

(The

lie

to

different

a

This
Forum

of experts

group

for favoring

this forum

in

regarded,

as

parlicuiar security.

a

intended

not

are

to

Blaw-Knox

Partner, Tobey & Kirk, N. Y. C.

Corporation
120 Broadway, New

York 5

Teletype NY 1-583

JiArclay 7-5660

is
one
of
my
favorite companies
which will
bear watching.
Its
stock is now selling at approxi¬
The

Blaw-Knox

l5Vz

mately

Specialists in

Company

The

Rights & Scrip

of

yield

$1,

the

to

the

an

flftpONNgLL&fO.
Members

120

paid

York Stock

Exchange

of

New

York

Curb

Exchange

two

p r o m

RAYMOND C. O'DONNELL

which is na¬
tionally known for its manufac¬
tures
of
a
variety of steel
fabricated equipment for use in
general
manufacturing
besides
special types of machinery and
steel
and
alloy castings for all
Here is

Common

Churchill-Downs Inc.
Capital Stock

Consider H. Willett
Common

types of purposes.
Blaw-Knox

BANKERS BOND

2°

Incorporated
1st

Floor, Kentucky Home Life Bldg.
LOUISVILLE 2,.

KENTUCKY
Bell Tele. LS 186

Long Distance 238-9

nine

V

J

steel,

the

serves

building, engi¬
neering
construction,
railroad,
utility, chemical, oil refinery, food
and general process industries in
its
fabricating,
machinery
and
alloy divisions.
Blaw-Knox
operates
through
nonferrous,

™

road

divisions,

Company;

Machine;

viz.:

Blaw-Knox

Lewis Foundry
and
Buflovak
Equipment;

National

U. S. THERMO

Alloy Steel; Pittsburgh
Union
Steel
Castings;

Rolls;

Chemical

on

★

cents

$1,024,872,

★

resulted

148 State St., Boston 9, Mass.
Eel, CA. 7-0425
N.

Y.

:

:

Teletype BS 259

Telephone WOrth 4-5000

^

30, 1950, the company
profit of $1,301,530,

net

a

92

which

of

share,

a

72 cents a share,
operations in the

or

from

the

in

half-year

in

257,060

the

first

uo

period
of $11.-

quarter

and

figures

be compared with earnings
$1,952,858, or $1.38 a share,

of
and

Northern Indiana Pub. Serv.

billings of $35,518,828 in the

first half of 1949.
Orders booked in the 1950 halfyear

Puget Sound Power & Light
Tidewater Power

amounted

to $33,210,000,

or

$6,759,000 in excess of shipments
and increased the company's un¬
filled

order

from

backlog

$20,-

970,000 at Jan. 1 to $27,729,000 at
June 30,

In

VOGELL & CO., Inc.
37 Wall

Street, New York 5

WHitehall 4-2530 Teletype NY 1-3568

Stix & Co.

1950.

ditions

of

the

Blaw-Knox

con¬

SECURITIES
STREET

\

MIDWEST STOCK EXCHANGE

TELEPHONE:

TELETYPE:

GARFIELD

0514

SL-80




several

new

Until recently, this

leading sup¬
automobile
industry
was
not
very
widely
known; its shares were closely
held. Last June, however, several
large stockholders sold a substan¬
tial part of their holdings.
As a
resUit. me company now has more
than 4.500 s' arehclders, located in
virtually every State in the Union.
plier

of

The

net

strong
qualifications.

capitalization;

there

is

no

debt.

example,

ably

managed—

field—occupy

position

to

importantly either

is

mis

to

should

be

a

contribute
our

wartime economy.

peace¬

Its

reached

se¬

reasonably

study of the relative

merits of many corporations leads
this writer to recommend Ameri¬
can

Metal

the

most

rently

Products Company for
favored

security. Cur¬
around
$16
per

selling

share

or

cated

minimum earnings for

improvement

thus

far

in

better

1950

tnan

12%,

American Metal Products has the
above named qualities that should

give it popular appeal.
During
the
past
decade,
its
management has clearly demon¬
strated

unusual

sourcefulness to

under
II

and

the
the

ability

and

$15,500,000

of

entire

the

or

contin¬

During the

shown

in

boom

about

or

1949

of 55%.

crease

sales,

75%

in¬

an

The

worth

the

creased

of

from

was

3.63-to-l

book value

capital
$21.05

or

stock

to

at
net

in¬

$21.47

a

Dividends

of

25

cents

a

share

paid in March and June and
of 25 cents
a
share, has been declared pay¬
able on Sept. 12 to stockholders of
record on Aug. 14.
rehabilitation

program

of

the company's principal foundries,
which has been underway for the

past

15 months and will

soon

be

completed, should be of material
benefit in the

expanding military

requirements indicated by current

and axle housings as well as other
equipment for the Ordnance de¬
partments of the armed services.

Because

of

similarity
between
products manufactured for civil¬
ian and military uses, only a min¬
imum of retooling would be nec¬
essary

for

a

change-over to either

type of production.

Management of American Metal
Products also is energetic and re¬
sourceful in pioneering products
for

the

automotive

industry. As
it is now one of the
largest independent manufacturers
3

result,

and

fabricators

of

tubular

seat

frames and welded steel parts for
the automobile

industry. The

com-

Bought

—

Sold

—

Quoted

I. B. Maguire & Co., Inc.

Members

Nat'l

Assn.

of

Dealers

Securities

Ina.

75 Federal St., Boston 10, Mass.
Tel.

HUbbard 2-5500

Tele. BS 142

Portland, Me.

Enterprise 2904

Hartford, Conn.

Enterprise 6800

same

period this

Pocono Hotel

Warner

Corp. Units

Company Common

West Penn Power Common

Philadelphia Electric Common
Equitable Gas Common
Allan Wood Steel Com. & Pfd.
Penna. Power &

Light Common

Philadelphia Transportation Co.
Purolator Products Common
Dan River Mills Common

Henry B. Warner & Co., Inc.
Members

Phila.-Balto.

Stock

Exchange

123 South Broad St., Phila. 9, Pa.
Phila. Telephone

Bell System Teletype

PEnnypacker 5-2857
New York

City Tel.:

PH 771

BOwIing Gr:en 9-4818

second

Results for
likely to ap¬
of the
record
Any shift as a

year.

are

quarter.

result

of

TRADING MARKETS

*Lea Fabrics

semi-mobilizaLon

the

situation

imposed by the Korean
action, it is believed, could be ac¬

complished with
interruption.

minimum

a

of

"Winters & Crampton

"Plywood Inc.

The company also is in a strong
financial

position.

At the end of

June, current assets amounted to
$9,700,000 as compared with cur¬
rent
liabilities
of
$4,072,000,
a
ratio of 2.4 to 1. Cash and equiv¬
all

exceeded

alents

liabilities

by

$1,700,000.
With

pir-erd"

n

uch

its

of

financed

out of

earnings,

dividend policy.

generous

quarterly

tractive

more

a

both

as

income

an

ings;

its

times

yield

indicated

request

aetna securities
Corporation
111

Broadway, New York 5

WOrth 4-6400

Tele. N. Y.

1-2494

is

highly

outlined

contribute

to

above,

further

Over-the-Counter

Quotation Services

earn¬

satis¬

factory;
and
its
management
enjoys the experience and ma¬
turity essential to meet rapidly
changing conditions. This writer
believes that all of these, plus the
factors

on

and

price of around $16 is less

four

*Information

or

capital appreciation issue.
On
Aug. 16, the stock was listed on the
New York Stock Exchange.
The
than

"Copeland Refriger'n

During

a

current

"Douglas & Lomason

expansion

the company has pursued

for 37 Years

National Quotation Bureau
Incorporated

should

growth

Established 1913

of
46 Front Street

American Metal Products.

CHICAGO

Continued

on

page

22

,

Open End Phone to New York Canal 6-1613

A similar gain was

rent

liabilities

branch offices

net

$2 annually.
Briefly stated, American Metal
Products
possesses
all
the
at¬
tributes necessary to make it at¬

that date.

our

profits, which rose
from $1.77 a share in the first half
of 1949 to $2.38 a share in the

re¬

operate success¬
strain of World
economic

has

1950.

imated

less than four times indi¬

yielding

$3,031,000

share.

per

widely enough held to. the third quarter
proximate
those
ready marketability.

A careful

ex¬

steadily

clearly indicated

valued and

permit

have

has

It

first half of the year, sales approx¬

Ray. C. O'Donnell

leader in its

or

Froducts

rapidly.

income

ued

growth poten¬

strategic

Metal

This

it should have

War

the

to

parts

859,920 shares of common
outstanding represent tne

$3.53

be

NY 1-1557

Spinning

customers of substan¬

respectively.
During
lb49, eaies rose to $20,188,000 and

addi¬

must

St., New York 4, N. Y.

tial proportions to the company.

$1,417,000,

powerful

nnge

Associates

weight and costs less. Devel¬
opment of this product brought

1946.
In that year, sales and net
profits amounted to $9,598,000 and

* It

have

tial—li

ange

Ft

Berkshire Fine

in

by the rapid climb in sales since

tional

and

of

ceptance in auton obile circles be¬
cause it has fewer parts, is lighter

iiiai'K.-1.

such

certain

York Cvrb

Direct wires to

ac¬

1950, the company raised its quar¬
terly dividend on two successive
occasions.
It now pays 50 cents

The

MEMBERS

than

minimum

a

Tne newer type
spring Las won wiue

£>pi\iug.

built-m

increased its share of the available

must do

Com¬

another dividend, also

St. Louis l.Ho.

con

funded

since then.
During the war, the
Mr. Witherow revealed that company was a
leading producer
working capital at mid-year of rocket tubes for the armed
amounted to $12.*39 a share and forces.
It also was an important
the ratio of current assets to cur¬
supplier of torque and axle tubes

were
503 OLIVE

com¬

how¬

must

York Stock A-

New

and

Since the end of World War II,

standards.

New

manufacture tubular
seat frames for automobiles, using
the
"Zig Zag" or flat sinuous
spring instead of the conventional
velop

operations and earnings of Amer¬

meet

1w~**herr

of the first to de¬

one

" The

more

Steiner, Rouse &Co
25 Broad

pany,

share in the half-year period.
INVESTMENT

Many

was

panded

fully

reporting the financial

pany

ican

be

Co.—

Orleans,

New

New Orleans, La. - Birmingham, Ala.

Best,"

For

Snowdrift

N.

Security I like
ever,

(Page 2)

&

require¬

curities

$26,450,933, made

standards

panies do meet
ments.

Bought—Sold—Quoted

Co.—

HAnover 2-0700

speculative attention.
such

(

Products

Ogden,
La. (Page 22)

total

time

were

minimum

Fred

stock

were

may

Central Maine Power

Certain

Oil

Wesson

must be met by any company tuai
merits favorable investment and

quarter.

billed

Detroit, Mich.

»

second

First quarter
affected by the coal
and steel strikes.
According to
W. P. Witherow, President of the
company,
products and services

Co.,

(American Metal Products Co.)

earnings

$15,193,873 in the second.
The
above
half-year

Arizona Edison

&

a

June

earned

Request

or

★

Blaw-Knox

Division.
To

Analysis

Plants;

Sprinkler, and the Power Piping

CONTROL

Senior Partner, R. C. O'Donnell

company

a

a

Blaw-

Benjamin Goodney

greater things to come.

American Air Filter Co.

is

effort

affect

growth.

ness

of

s e

war

will

fect Blaw-Knox Co.'s future busi¬

has

i

present

which

mind

in

by industry are additional im¬
portant factors which will also af¬

I

company's
stock

borne

favorably and further pre¬
paredness and future expansion

this

believe

REctor 2-7815

Tel.

be

Louisiana Securities

Mobile, Ala.
in

Knox

past

years.

the

factor

each

in

the

incorporated

should

that

25

of

cents

New

BROADWAY, NEW YORK 5

It

extra divi¬

dend

1949 level.

company,

its stock has, in my opinion,
interesting future speculative pos¬
sibilities for enhancement.

Moreover, the
company

below the

and

in¬

vestor is 6.5%.

Since 1917

and

1906, is capitalized with 1,411,468
no par shares and owned
by 11,757
stockholders, has no bonded debt

yearly

dividend

be far

Benjamin

(Page 2)

City.

Metal

Detroit, Mich.

engi¬

building,

special

—

Raymond C. O'Donnell, Senior
Partner, R. C. O'Donneil & Co.,

company's

design projects the
company seems to have a bright
prospect.
With output now run¬
ning at a higher rate than in the
first quarter, 1950 sales may not

,

and, based on
the

the

neering

(Blaw-Knox Company)

the

said
head executive.
In

1920

Established

American

conditions,

GOODNEY

BENJAMIN

Company

Ntw York

discussed.)

New York Hanseatic

Alabama &

and

Selections

Goodney, Partner, Tobey & Kirk,

be,

offer to soli the securities

an

Thursday, August 24, 1950

Week's

Participants

Their

advisory field from all sections oi the country

participate and give their

Bank of America N. T. & S. A.
Amerex

Security 1 Like Best

A continuous forum in

...

New York 4, N. Y.
SAN

FRANCISCO

Volume 172

Number 4936

.

.

The Commercial and Financial Chronicle

.

(711)

INDEX

Regulating the Sale of Investment
Company Shares
No

need

for

SEC'"S a'.ement

of

Policy"

advertis.ng used in sale of investment
existing
seen

as

Increased
result.

a

sion of

literature

and

shares.

Pre¬

company

of Commission adequate to prevent legal

powers

fractions.

on

costs

and

diminished

returns

to

i

In the "Chronicle" of

way

—Allen

Bond

public

We

it

was

—Robert

—B. S.

gether

an

minutes which will

to

his

name

was

he

not

*

It

was

Korean

Economy

Seen

Incapable

Each

be used and

one

that he

directed
was

not

be

used in

has been

the

shares that

and

Mutual

NSTA

Insurance

Joint Meeting.^

broad

Stocks

Quoted

—

Business

8

Recommendations

Activity.

IN.

Ely Pfd.

Kold Hold

29

Higgins

Wilfred

May

Security

*
14

33

Offerings.-

17
23

Corner

Securities Now in Registration—
The

Security I Like Best

The

State

Says)___

26

36

4

BUY

this week.

available

Exchange PL, N. Y.

5

—

(Walter Whyte

40

Teletype NY 1-1825 & NY 1-1820

2

—

Washington and You

HAnover 2-0270

30

and Industry

Tomorrow's Markets

Singer, Bean
& MACKIE, Inc.

28

1
—

of Trade

Manufacturing

5

•_

Securities

Salesman's

Bates

18

_

Report

Utility

*Not

MARKETS

Reeves

6

Railroad Securities

1

TRADING

8

17

12

Reporter's

Securities

S.

U.

SAVINGS

BONDS
"CHRONICLE" WILL BE THERE!

THE

Throughout the Annual Convention of the Na¬
tional

Security Traders Association, which will be

Pnampi faJi/ie. SeJutic.3

Sept. 26-30 at Virginia Beach, the "Chronicle"

photographer will be

"Chronicle's"

the

in

FOR BROKERS AND DEALERS

much in evidence. And

very

the results of his endeavors will be

new

of the many

one

To Western markets in

Special Convention

LOS

Issue.

ANGELES

DENVER

•

SPOKAK2

•

SALT

LAKE

CI77

given the Commission by the
Securities Act of 1933, particularly Section 17 thereof,
powers

Continued

on

page

27

Twice

Published

1

Weekly

Drapers'

land

COMMERCIAL

The
are

interested in

Reentered

U.

Reg.

High Grade Public Utility and Industrial

ATILLIAM

B.

Park

25

Spencer Trask & Co.
25

New

York Stock

Broad Street, New
HAnover

Exchange

York 4

Members New York Curb Exchange

50 Congress Street, Boston 8
Hubbard

2-4300

2-8200

Albany

-

Chicago




-

Glens Falls

-

ary

8,

Y.

-

Worcester

25,

York,

SEIBERT, President

Augus

24,

1950

Other

Chicago

bank

111.

135

Febru¬

at

of

New

March

of

Pan-American

Union,

lr

Dominion

Canada,

of

$35.00

Countries, $42.00

Other
Bank

and

per

$38.00
per

year;

per

S.

A. HOGLE & CO

,

year.

Members

clearings,

Ncte—On

and other Principal

Record

—

Monthly,

50

(Foreign postage extra.)

account

of

the

fluctuations

In

Salle

St.,

State 2-0613);

of

exchange,

remittances for for¬
eign subscriptions, and advertisements must
be

made

in

New

York

fundi

Exchanges

Broadway, New York 5

Telephone WHitehall 3-6700
Teletype NY 1-1856
'

La

1915

ESTABLISHED

year.

Publications

Quotation

$25.00 per year.

the rate

South

(Telephone:

office

Act

New York Stock Exchange

city news, etc.).

Offices:

3,

news,

the

t

Thursday (general news and ad'ertlsing issue)
and every Monday (com¬
plete statistical issue — market quotation
corporation

post

under

Subscriptions in
United
States,
U.
Possessions, Territories and
Members

Every

and

the

at

Y„

Subscription Rates

RIGGS, Business Manager

Thursday,

B. Dana

second-class matter

as

1942,
N.

9576

to

Eng¬

C.,

1879.

Other

state

Schenectady

2-9570

DANA

WILLIAM D.

'ecords,

1-5

Teletype—NY

Office

COMPANY, Publishers

HERBERT D. SEIBERT, Editor A Publisher
WILLIAM

Members

Patent

New York 8, N.

Place,

REctor

PREFERRED STOCKS

S.

DANA

E.

& Smith.

1950 by William
Company

CHRONICLE

FINANCIAL

offerings of

London,

Gardens,

Edwards

c/o

and
Copyright

We

\

15

16

Prospective

Teletype NY 1-3370

17

Funds

Public

Broadway, New York 6

BO 9-5133

10

Notes

features

The

Sold

Incorporated
61

Cover

—

Investment

of

the basis of the

Statement

—

25

Our Reporter on Governments

could take

of the SEC before its

Bought

19

Securities

held

powers

Modern

Bookshelf

Observations—A.

past to effect

one

(Editorial)—

Man's

exception to, but such literature, or most of it, no doubt
came about from eagerness rather than an attempt to mis¬
lead or deceive, and all of it could have been stopped on

existing
of Policy.

Producing

Toledo Edison

16

News About Banks and Bankers.:

all to be "off the record."

literature

Some

Waging

Savings Banks' Deposits Decline

Indications

that
to

of

Without Outside Help

] Einzig—"How Europe Views Dollar Situation"——
From Washington Ahead of the News-^-Carlisle Bargeron

get from issuers, underwriters,

sales of investment company

Public Service

Southwest

15

Everywhere,
there was apparent a fear complex, and one man of
standing said that, if he spoke openly, both he and his
company would be put out of business quickly.
quoted.

Southwestern

*

No Need for Direct Controls Now, Says Harry A. Bullis

Dealer-Broker

be made of conferences in

interviewed.
to

Light

14

Coming Events in the Investment Field

there is a wide divergence of opinion but
representative went one Thing was common

whom

Power &

15

Canadian

Of course,

those

Puget Sound

13

Organize to Expand Trade With Haiti

Business

shares, a cross-section
the need for this newest Statement of Policy,

our

Interstate Power

Tragic Mistakes

on

5

Bank

advisability of having issued it, and whether it will
prove helpful (a) to the public, and (b) to those selling
investment company shares.

to

Small Down Payment

4

As We See It

the

wherever

WHitehall 4-6551

11

Secretary Snyder Explains Debt Management Program

Our

on

Dept.

J.F.Reilly &Co;

representatives of the SEC and the NASD par¬

opinion

Securities

STREET, NEW YORK

Regular Features

and dealers in investment company

of

A

World Bank and Fund to Hold

ticipate.
We have endeavored to

WALL

Telephone:

10

Rodey, Jr., and Charles Wigand

New York

•

which the

W. Read

Joseph L. Collyer Urges U. S. to Buy More Crude Rubber

War

working together, therefore,
agreeable surprise and we hope that it pres¬
ages a practice which will be uniformly indulged in here¬
after by the Commission and that the public will have
access

means—

said when

bid.

a

Obsolete
99

13

*

occasions to invade the

many

This frank declaration of
as

it

guy

representatives of the SEC

public of the con¬
ferences held and what took place at tnem. We always felt
and still feel that rmnutes should be kept of those proceed¬
ings which would be open for public inspection. It will be
recalled that we took that attitude on the "5% yardstick
interpretation." We railed against the secrecy which char¬
acterized the internecine joint activities among repre¬
sentatives of the SEC and the NASD and urged that these
be made public; but to no avail.
comes

him

what

one

Gas

proceedings of these two bodies wor ng to
policemen out of the same precinct, and insisted

as

8

9

.

clear declaration be made to the

a

made

what

Regulating the Sale of Investment Company Shares (Editorial)—3

camera

that

Cleave

-

and the NASD.

in

Leason_

—Rep. Joseph W. Martin, Jr

North
on

Van

Korean War:

it, is the frank declaration that it resulted from coopera¬

have tried

idea

no

Prospective Tax Rises and the Utilities—

thing that pleases us about the Statement of
Policy and the other literature above referred to relating

we

that's

The Look Ahead for Government Securities

One

tion and conferences between

have

but

6

Financing Utility Expansion in Northwest—Joseph E. Muckley

communication, dated

a

We

7

Men, Money and Marketing—Eaton V.

literature

Aug. 14, 1950, which enclosed a copy of the SE J State¬
ment of Policy and,
among other things, agreed to review
all
advertising and sales literature used in the sale of in¬
vestment
company shares "as part of its practice of selfregulation."

How

4

Excess Profits Tax!—Peter Guy Evans

a

ties Dealers sent to its members

to

an

Company and Ocean Natural Gas—J. Walter

time, the National Association of Securi¬

same

"SUPERTRAZMAGLIFIC!"
4

___

Sky—Edward W. Stern

Why I Oppose Another OPA—Sen. Robert A. Taft

.

At the

Securities—Arthur M. Warde_Cover

Buying—Roger W. Babson

Pure Oil

Policy with
partial explanation of how
prepared and will be enforced.,
'

-■

__C»ver

we

used in the sale of investment
company shares.
The SEC accompanied this Statement of

its release No. 1503 which is

Don't Need

Scare

Aug. 17 (page 15) we published
Policy" of the Securities and
and

AND COMPANY

Bernstein

No Tower Reaches the

of life imperil d.

advertisements

licrasiti

B. S.

Page

Ratings—Edmund L. Vogelius___

in¬

,

of

M.

Auto and Accessory Industry

Exchange Commission, by the terms of which it seeks to
contents

-

■

Inflation—And the Price-Earnings Ratio of Equities

verbatim the "Statement of

regulate the

7

;■ '

Articles and News

Fear of reprisal prevents uncha ned expres¬

opinion. Our American

3

3f

4

The Commercial and Financial Chronicle

(712)

the

and

Bond

Ratings

What
caused

Moody's Investors Service

Though maintaining bond ratings should not be used as sole
determinant of investment policy, and should not be accepted

Mr. Vogelius defines such ratings as mere
"judgments of gradations of investment quality." Says ratings
are not indicators of pr.ce trends, but should express "protec¬
tive judgments" and aim to be constant, stable and unvarying,
and thus reflect long-term risks. Reveals procedures in setting
perfection,

years

in

their

use

in

g e n cies

Washington in

as

investment quality of se¬

of

curities.

That

not

other

some

which

tends

influence

to

the investment

of

oractices
the

banking

system.
1935

of

it

made

man¬

datory for the
Comptroller of
t h

e

to

issue

Currency

lations

Vogelius

prrirj<*

National

of

vestments

regu¬
g o v

-

in¬

the

Banks and

of State Banks which are members
of the Federal Reserve
other words,

it

was

System. In
for

necessary

what

was

and

investment

an

not

investment.

an

by

within

not

-

was

*

four

the

of

Deposit
of

Governors

Insurance

the

of

the Fed¬
Corpora¬

which

tiated
I

with

book.

Lhe first ruling, the second ruling
applied as to how it would be ap¬
plied
as
to
bank
examination
purposes.

for

bank

provides

examination

has

pur¬

neither appreciation nor de¬
preciation
will
be
taken
into

poses,

here

an

were

predominantly specula¬ ever, I wish to state that the rat¬
tive and went on to say that if the ing
organizations
had
no
part
purchaser was in any doubt as to whatsoever in setting the standard
tinctly

or

whether

not

or

a

bond

was

dis¬

of

a

suitable bank investment

that,

rather

you

indicators

not

are

that

purchases

curities

iimiiiiiiiiiiiimiiiiiimmiiiiuimiii'

Natural Gas Co.

Dan River Mills

of

on

a

on

rat¬

general

Scott, Horner &
Mason, Inc.
Lynchburg, Va.
LD

33

iiiiiiiiiiiiiiiiiiiiimmmimiiiitiiiiii

1856

H. Hentz & Co.

Also,

we

are

Moody's

edge

as

their

to

purpose

and the

procedure which is followed in de¬
Members

!.

termining them.

Attractiveness

far

which

it

intended

is

and

indicative

not

transient

of

risks

short-term

Such

symbols

are

risks.
often

for
investors this question:
What de¬
gree of risk exists in this bond as

that

seek

protective

a

to

answer

investment

instru¬

ment?
The

second

In

have
we

visualize

concerned,

Exchange

to

the perfections of ratings, or,
fact, the infallibility of any of
our
investment
judgments.
We

The

in

rating

know

ratings

York

New

Chicago

Cotton

Exchange,

Board

of

New Orleans Cotton

And

Y.

other

Cotton

Inc.
Trade

Exchange

Exchanges

Exchange Bldg.

NEW YORK 4, N. Y.

we

takes in

have

have

no

made

illusions

some

assigning ratings to

and

years

Exchange

we

is

it

the

over

situation

a

riods

of

at

mis¬
secu¬

rities in the past, but we also know
that
the
record
shows
that, if

guide

recognize

is

that

are

principle
that,
some

of

our

while

we

changes

necessary,

in

changes

should be effected only if certain

essential conditions exist.

DETROIT

GENEVA,

PITTSBURGH

SWITZERLAND




In

any

dex at

Edward

careful,
and

piecemeal

building

usually large cash
the

tom

208,

preceding
support
zone.
Rails
kept inching up throughout both

then,

reactions

have

small

been

and

shortlived.

At

the

Industrials

stand

this

writing;

at

Rails

list

and

219.23,

half the industrial

over

well

above

June

levels, the Industrials
derstate

the

level

23

closing
to

seem

of

the

un¬

entire

prime consideration, here,
investors.

Buy

overbought;

the

advances

and

consolidation

ing. There

have

may

seems

a

in many issues
been

has

be

abrupt

been

lack¬

faltering,

some

profit-taking, but
has not been completed.
some

the

rise

forever.
a

It is likely to top out
223-226 in the Indus¬

range

trials, and under 66 in
of

wave

to

the Rails.

enthusiasm

is

likely

the market much higher
than that, nor to sustain it long if
carry

higher

levels

objectives
the

are

think

to

reached.
far off;

not

are

time

of

The

is
cash

now

large

current

followed
and

by

upsurge

massive

be

may

distribution

strong downtrend.

a

enough

time

orderly

replacement

sired

move

be

be
an

of

close,

thinned

not

Even if

at

for

easy,

any

Far

East,

to

ites,

L.

Coll¬

Presi¬

yer,

dent

of

the

B.

F.

rich

Company,

Good¬

announced

Aug.

on

18.

"Crude rub¬

ber,

vital

a

strategic

ma¬

in

portfolios

down.

Stocks

issue-by-issue

done

on

in

tonnage
the

the

fears

war

continues,

States although this nation is the
world's largest consumer of rub¬
ber

all

of

types.

has

on

and

tial
quantities of crude rubber
since the close of World War II,"

Collyer declared.

"Principal supplier of rubber to
Russia has
be

been, and continues to

British

Malaya

tions contracts at

with

Indonesia

other

and

producing areas also
unquestionably supplying rubber
for stockpiling and consumption
behind the iron curtain.
"It

is

crude

significant

are

80%

rubber

ficiaries

of

nations

the

world's

either

are

the

that

of

Marshall

bene¬

Plan

or

today receiving American aid

through

that

governments

are

sponsored by the United States.
"These

nations

the United States

tion

of

Korea
and

the

United

have

and

to

some

assistance, to
forces

standing

are

with

in

extent,

our

in

the

Nations

pledged

this

ac¬

in

moral,

material

nation

"Recent statistics

tons

bursts

that

hagseem

As

to

the

compa¬

accepting muni¬
greatly reduced

profit margins. War — and the
threat of war—is not bullish. Gov¬
ernments have learned from

of

crude

shipped

this

and

present

our

war

the

on

rubber

distri¬

from

country.

show for

Malaya

came

Our

country,
which normally consumes 55% of
the

world's

55%

short rations for labor
or

Meanwhile,
buying substan¬

been

example, that in July of this year
only 27,000 tons of the 102,000

nies will be faced with the choice

materials,

Collyer

should

July, all

many

L.

bution

basis,

mobilization.

John

United

should

exceptional

rode the market in

going

diminish¬

ing

against communism.

strength.

and

t e 11

s a

John

armed

de¬
satisfactory

of

dumped; selling should be

Reviewing

of

rubber

Russia and its

With the objectives of the
so

on

only

allow

to

positions

prices.

have

or

the

of the

areas

rubber

controlling

reserves.

The

producing

in

should discontinue the sale of crude

Russia

However, ,'this is no time for
blind optimism.
The year is not
1929; this upsurge is not going
on

control,

influence

received

Right here, the market

in

that

Nations

great

terial, is being

market.

trifle

un¬

should

reserves

More Crude Rubber

or

the

of

liq¬

of

up

Wants U. S. to

points

above the bot¬

Stern

W.

will

exempt

no

stocks.

in¬

the

two

of

wave

these

are

re¬

the

of

of

new

rubber, received

Malayan

rubber in 1940
before World War II and 37% for
the first six months of the cur¬

rent

of

The July,

year.

only

27%

1950, figure
emphasizes the

urgency of our present rubber po¬

sition.
"Due

to

inability

our

to

in sufficient
sary
to

fill

the

and

rubber

for

neces¬

continue

to

legitimate

consumers,

mandatory
exercise

present

crude

quantities for

stockpiling

American

nation's

obtain

needs

of

may

be

it

government

controls

on

to

rubber

Hjal- usage.
Changes in Long-Term Risks
Diversion of rubber sup¬
properly used, ratings have a con¬
mar Schacht that inflation can be
siderable
plies from Russia to the United
degree of validity. ! I ''"Everyone' agrees that no one taxed out of the stock market.
stress.this, phrase, "properly used," can!»assess long-term risks per¬
States would be in the highest in¬
In selling to build up cash re¬
and
hence there - will.
because the misconceptions which fectly,
serves, price and market action terest of all free peoples at this
exist as to the purpose of ratings
Continued on page 18 should be the first considerations. critical
period."
5

..

CHICAGO

been

liquidation,

too—there

be

with

process

fourth

"war

down-thrust,

fuller

strain.

sink

of all

complete

of

have

come.

Quiet,

least

as

to

general

indicated. The

covery

as

long term

time

following
week brought
a

the

already

many

stocks

uidation

relating it forgotten, but not all were ground¬
less.
Increased
corporate
taxes
to a concept of the possible low
already promise to slice some¬
point in the business cycle.
Rat¬
of
the
thing
dividend-paying
ings must not be fair-weather
power of stocks, and excess profits
risks
or
even
average-weather
levies offer a graver threat.
Our
risks, but should be based on the
productive economy is inevitably
judgment of the ability of the
(even if falteringly) shifting to
company to stand up during pe¬

of

Curb

organization j is

mind

in

York

Commodity

lower-rated

the

New

i

but

example,

baby"

bid up to prices that reflect profits
that will not be earned for a long

nable

all effort is ex¬
the market is only going to react
pended in seeing that the higher
to a
support zone and be reacratings are unchanging. For in¬
cumulated for another upthrust,
stance, a bond rated Aaa should
practically
all stocks will react a
be so
rated only if there is no
question as to its maintaining such significant amount. A reaccumulation broad enough to result in a
quality for a considerable period
worthwhile
upmove
will take
of time.

attainable,

For

than

expectations

No

Exchange

our

r e a s o

com¬

a

well

Stock

as

points

about 2V2% below their close just
parison of prices, yields, etc., with
prior to the Korean invasion. With
other available issues. Ratings are

York

so

196,

de¬

pends upon the suitability of the
investment
for
the
purpose
for

New

r

N.

In

eight

s

trends.
Price
trends are of these weeks.
by monetary factors and
The shakeout and its immediate
developments.
Ratings
recovery put the market in a very
not designed to indicate at¬
strong
technical
position. Since

are

keenly

Service, be¬
cause,
in all truthfulness, I can
say that my knowledge of ratings
is confined to Moody's ratings and
that they are the only ratings of
which I have any intimate knowl¬

ia 1

r

economic

the

Investors

t

caused

bonds, such
increased demands
rating stability is not as impera¬
made upon us by those issuing and
tive, for, by their very definition,
selling securities as a result of this
the lower ratings represent issues
situation.
likely to experience changing de¬
Ratings are a subject with which
grees of risk.
I have been closely associated for
The next princple is that rat¬
about 20 years. In this discussion,
when I speak of ratings, I shall be ings must reflect long-term risks.
It is
natural
to
ask
just what
referring to Moody's ratings. This
means.
What
we
is not intended to be a "plug" for "long-term"
of

aware

—★—

Established

based

certain

authorities.

Rich., Fred. & Pot. D. 0.

83

be

We recognize that
degree of increased re¬
sponsibility has been placed on
the rating organizations
because
of rating
usage by the
banking
a

LY

should

ings alone, much less

se¬

rule of thumb.

Trading Markets

Alabama-T ennessee

Tele.

investment

of

In-

Dow
s

u

lower

in

principle which we
attempt to follow is that ratings
must aim to be
constant, stable
and unvarying. The reason for this
Many other factors need be con¬ is that as
*A lecture given on July 26, 1950, the
protective judgments
eighth in a series of seventeen on The sidered for the proper conduct of
ratings would be useless if they
New York Securities Markets and
their
a
bank's
investment
portfolio. measured merely transient risks.
Operation, sponsored jointly by the New While
ratings are of definite aid
York Securities Industry and the Univer¬
Naturally,
we
recognize
that
in this respect, we do not think
sity of Vermont's Department of Com¬
fact that complete stability is not
& Economics.

The
d

to go over

me

shakeout.

vicious

a

nego¬

here.

Ratings

un¬

tinctly or predominantly specula¬ der these regulations. We do not
tive, he could resolve such doubts believe that
ratings should
be
by reference to the recognized used as a sole determinant of in¬
vestment
rating manuals.
policy.

merce

in

mar¬

reached

expressed
by
the market
under¬
taking and the Comptroller nat¬ account in figuring the net sound price.
Over a period of years, we have
urally had no desire to set up an capital of banks of marketable ob¬
arbitrary yardstick to determine ligations in which investment developed a set of basic principles
the investment grade of securities. characteristics are not distinctly which we constantly refer to in all
Somebody
had
the
inspiration, or predominantly speculative, and our rating work. These principles
however, to light upon the ratings that, this group includes obliga¬ are, first, that ratings must ex¬
Inas¬
tions
in the four highest rating press protective judgments.
as a suitable aid in this dilemma.
much as bonds play a defensive
t
Subsequently, the Comptroller grades.
role in the battle to preserve capi¬
issued a ruling in which he said
Naturally,
this
situation
has
that banks were prohibited from caused a great deal of discussion tal, it follows that bond ratings
must
at
all times be protective
buying securities which
dis¬ and considerable criticism. How¬
Now, this was quite

down

we

would

I

tractiveness.

bank could buy a bond under

5

them than for

if

that

he

mention

price

agreement

ket

the

drove

those5 ffbm Whdrttfhfe

different from the legality of
buying. This second ruling cov¬
entirely the procedure in
bank examination. In other words,

joint

fears

unreasoned

term of years.

a

which

page

on

them

This

is

This

By

The days of panic lie behind us.
During the week ending July 14,

give our rat¬
ings.
They are nine in number,
running from
the highest Aaa
down to the lowest C.
We give
our definitions of those ratings in
that

ered

a

security.

a

maintains

the bond record that I have given

read

want to make that clear.

and

designate the intrinsic

over

might

you,

Stern, Members, N. Y. Stock Exchange

stock market now is overbought, and
against blind optimism. Advises careful piecemeal liqui¬
dation, and building up of cash reserves.

warns

statistical expres¬

We express ratings by sym¬

contracts

the Executive Commit¬

Supervisors of State Banks.
I

all

the National Association of

and

tion,

Currency,

Reserve System,

Federal

tee

regulation governing
procedure by

Board

the

judgments

Stern

Mr.

has borrowed money.

examination

Comptroller of the

&

Tersely stated, they represent a
view
as
to
the
ability of the
obligor to conform to the terms of

followed in July, 1938,

joint

a

bank

the

what

the Comptroller to rule as to
constituted

This

eral

The Banking

Act

are

is

risks," we mean the de¬
gree of security of principal and
the likelihood of prompt payment

highest rating classifications.

manner

a

L.

which

Herzfeld

inter¬

"intrinsic

event, the effect of the

any

and

years?
We define
judgments of grada¬

risks which exist in

rulings of the Comptroller's office

Sky

By EDWARD W. STERN

recent

ratings

bols

bond ratings has been has been that banks are practically
from
buying
bonds
by certain government prohibited
a

Edmund

In

the chief reason

know,

you

No Tower Reaches the

Ratings?

discussion

such

of interest

As

Are

are

tions

sion.

ratings.

for the increased interest in recent

they

ratings that they have

are

in

est

up

are

What

By EDMUND L. VOGELIUS*

as

in which
surprising.

way

misused

Thursday, August 24, 1950

..

.

,

Volume 172

Number 4936

The Commercial and Financial Chronicle

...

(713)

Steel Production

The

Debt

Electric Output

Carloodings

State of Trade
and

In

Commodity Price Index

Industry

Observations...

Mgl. Program

Retail Trade

'

issued

statement

a

Aug.

on

Food Price Index

21, Secretary of the Treasury John

Auto Production

W. Snyder

Business Failures

the

rates

est

fractional

A

•

increase

wide industrial

•

noted

the

in countrywith total output holding noticeably

was

production

past week

above the level for the comparable week of last year:

High points for the
and

year

recorded by the

were

V

eiectiric

light

than 100% of capacity.

more

i

; v

-

.

'

i

.

;to dip slightly.

*

On

Monday

unions set into

of

this

motion

a

*

week the Trainmens' and Conductors'
scheduled five-day strike at three rail

terminals, extending the strike on Tuesday to two smaller roads
in the dispute, in order to effect a speedy end to the 17-month-old
•wage and hour dispute between the rail unions and most of the

major rail carriers.
unions

threaten

nationwide

a

is not reached.

The strikes

strike

The unions demand

48 hours to 40 hours with

called for five days,

are

if

cut in the work week from

a

loss in pay for yard service workers

no

and changes in the pay scale for rail service
❖

Inflationary
prices upward
this week.

the

employees.

beginning to force steel product
national metalworking magazine,

are

"Steel,"

quotations and indicate no early change is contem¬
of the smaller steelmakers have taken the bull by

some

horns

and

increases.

effecting

are

undertone of the
and other raw material
The

entire steel market is buoyant with scrap

Snyder

—

chase limitations

on

G bonds

more

was

one

the

first

of

in

ments

the

the

market have
fan

out

which
since

Develop¬

year.

Government

bond

repercussions which

through the entire econ¬
the present size and

Both

omy.

the wide distribution of the Fed¬
eral

debt are unprecedented in
comparison with what faced us at
other

periods

crisis.

We

highest

an

order

in

the

security holders through¬
A stable and

fident situation

in

our

the last week

.or

is

so

not

readily determined and action by the

smaller interests could forecast

in

But

general advance in the making.

a

the financial

front.

circumstances, with government price control a
an assumption would seem unjustified espe¬
cially since the larger producers are likely to move slowly in
effecting upward revisions in published lists, this trade paper adds.
present

definite threat, such

Consumers, "Steel" magazine notes, increasingly indicate a
willingness to pay premium prices for tonnage, adding, demand
for

high-priced conversion steel is insistent and offerings in the

market

gray

Despite
continue

out to

attention from buyers.

more

production

record

near

mount.

to

will be so

receiving

are

Tonnage

large that at least

into

one

month's output may be blanked

for the overflow.

care

Consumer

for

quotas

the

last quarter

will

be

smaller,

this

trade

authority indicates, with the mills warning customers further
cuts in allotments may be necessary to care for military orders.
So far emergency demands have been relatively small, but they
are increasing steadily.
General market opinion, "Steel" observes,
that

is

sufficient

steel

will

available

be

for

all

civilian

normal

Due

to

mills

railroad strikes which began on Monday of
scheduled to spread, scheduled output of steel

current
are

has been

cut

to

90.6%

of capacity

for the week beginning

Aug. 21, 1950.
*

*

they will add

in the four years
survey

than 3,000,000

be real¬

house-heating customers

1950 to 1953, inclusive, according to a national
One-half the estimated

by the American Gas Association.
the Association

customers

new

more

from coal

or

states, will represent conversions
heat, with the remainder coming from new resi¬

oil

dences.
*

■■

Building

permit

volume

*

held

high level during July.
Although down from the record heights of May and June, the
total valuation of building permits in 215 cities for
July repre¬
sented a new high for that month at $525,578,358.
This was a
drop of 7.5% from the June sum of $568,023,104, but it was 66.7%
at

a

the $315,236,164 for July last year and it marked the
eleventh successive month to register an increase over the corre¬
more

,

than

sponding month of the previous

year,

according to Dun & Brad-

street, Inc.

Steel

"

war's

impact

before this year

weekly,

its

current

be

hit hard.

all

Some

Direct
.

By

war

talking stage

orders

are

are

is

going to

be

military orders
....-v




now
*

to

the

year,

trade.

steel

when

terrific

rolling,

as

Plates

programs

much

as

and

now

in

third of

a

will be ear-marked for

war

(hot

use.

shape

up,

the

the

pattern

magazine

include landing crafty tanks,
•

commercial

banking

Continued

system

increased $3.4 billion.
bank

for

by

a

The decline
holdings was accounted
$1.1 billion decline in

holdings of commercial banks and
decline of $553 million in the
holdings
of
Federal
Reserve

a

Banks.

From the data

avail¬

now

able, it is apparent that this trend
continued

was

of

in

July.

some
on

of

declares.
addi-

page

2b

wherein he frankly
be passed

banks declined by

writer

this

wisdom

the

denies

Federal

of

a

so-called

excess

time, the ideological followers of Senator
O'Mahoney et al., to be consistent, should believe it to be needed
now rather than later, to save the Republic.
profits

tax

at

any

(With

Priority of Democracy

a

Capital D)

Quite run-of-the-mill presumably was the action of Senator

Neely

in forcing

three-day postponement of the vote on the
conflicting party

a

crucial Economic Mobilization Bill, because of a

"The success of the Democratic Party
important to the United States and
to the world in general than any other consideration," was the.
decisive "statesmanlike" pronouncement of the Senator from West
rally in his home State.

in the coming elections is more

Virginia.

'

Intensified Santa Claus-ism
At the present time of the beginning of our all-out war on
inflation, the various vagaries of the Subsidy State become high¬
lighted with particular odium.
The Government's persistent and
continued price-raising activities through the Commodity Credit
Corporation, such as it operations in butter and cotton, are
ludicrously antithetical to our fundamental wartime aim of pre¬
serving some equilibrium on the economic front.
The increasing
evidences of success in vote-getting from assumption of the Santa
Claus role, make it quite certain that this subsidy technique will ;

during neither war nor peace.

be abandoned
More

of

special

Senate

^

with the traditional "bi-partisan" subsidization

in line

interests

political

Finance Committee of

last week's

was
a

rejection

by

Continued

on

Reserve

page

declined $362 million from

June 30 through July 31.

"The private non-bank investors
who have been the primary buy¬
ers of marketable Government se¬

principally in¬
commercial, and
mer¬
cantile
corporations,
State
and
foreign accounts. They have been
buying
short-term
securities
mainly. Another part of the in¬
crease
in the holdings of private
dustrial,

investors

is

due

to

the

T

ie

Our

Pure Oil

current

discusses

Research

Company

Department Study

the substantial

values added by

purchases of individuals—substan¬
tially in the form of savings bonds.
Lor

institutional

ger-term

tors, such
and
not

as

inves¬

insurance companies

savings banks, however, have
been
acquiring Government

securities

on

Instead

net balance.

continuing expansion and development and

by the recent oil and gas discoveries on the
Continental Shelf of the Culf of

Mexico.

they have been buying corporate
bonds and home mortgages.

They

have

funds

been

providing

necessary

for

struction

and

new

the

housing

con¬

plant

and

new

equipment for industry.

that institutional inves¬

tors

may

have

able

for

ment

son,

funds avail¬

some

securities

in

during

•savings

bonds

on

to

write

on your

letterhead.

Shields & Company
Member* ISetr York Stock

the

41

'last

Series F and G

absorb

these

WALL STREET, NEW
t pi men

For thjsi rea¬

funds as they accrue:"

copy,

Exchange-

Govern¬

the Treasury Department has

lifted the limits

a

It is now

expected

investment

For

CHICAGO
BOSTON

YORK 5, N. Y.

Office—HOT EL BILTMORE
HOUSTON

TITTLE ROCK.

thq;.

bill to suspend the import duty

the four weeks ended Aug. 2 and
Banks

legislation,

and cynically slated that the legislation would

only after the lawmakers' election-time jitters.

While

Holdings

reporting
member
$656 million in

weekly

Witness his recent

de¬

clined $1.7 billion, while the hold¬
ings of private non-bank investors

quarter of the year.

being placed and

now

is beginning

of

next

and essential civilian

product-mix

.

or

summary

flat-rolled steel production

and cold)

steel

ends, states the "Iron Age," national metalworking

in

planning

"civilian"

on

sheets will
the

'

Output Cut to 90.6% of Capacity by Rail Strikes

The

During the

iirst six months of this year, Gov¬
ernment
securities
held
by the

non-bank

"

'it

require¬

curities have been

Should the expectations of the gas utility companies
ized

meet 'the

holdings of the

consumption into the foreseeable future.

this week and

to

ments of the economy.

in

mill order backlogs
the fourth quarter

pace,

carryover

Treasury has followed

since the first of the year has been

fashioned

Surprising, but quite significant, in the present political traf¬

con¬

The debt management program

the

either to the parity price, or to the aver-price received by producers during the period May 24 to
June 24, whichever is higher.
age

first line

'

which

modifies shall be equal

the market for

tremendous volume.
over

majority party also has fulfilled its political "responsibili-.
legislation. In passing the Economic Mobilization,
Bill this week it saw to it that price ceilings set for farm com-^"
The

ties" in controls

possible

out the nation.

on

obviously insincere.

pronouncement on the prospects for excess profits tax

condition, but also to fulfill our
responsibilities to the millions of
Federal

A. Wilfred May

obligation of
not only
to

soundest

of defense

number of producers

Republicans, fastening on a war situation to
gain a fancied political advantage, outdoing
She planners in plumping for all-out controls.
In their attempt to embarrass Mr. Truman by
assuming the ludicrous position of claiming
his and Keyserling's timidity, the RepublicanCongressional spokesmen's demands fornll-out
controls at this time surely are against the
national interest, are wholly inconsistent, and

ficking is the utter frankness of the President.

maintain the finances of the Gov¬
ernment

otherwise

As is being again brought home to us, no
single party has a monopoly on the seeking of
selfish political advantage irrespective of its
nation's interest.
For Wte have just seen the

international

of

have

the

democratic system,
throughout the years,
particularly harmful at times of war and

is

pur¬

step in the

of

cancer

inflation.

Series F.and

debt management program
the Treasury has followed

disastrous

and
desirable
which has been growing

extension

the

of

:\

prices rising and consuming demand pouring into the market in

a

This

healthy

October

the

a

ours.

se¬

maturities and
John W.

Federal securities is

Significance of price advances by

for

as

of the
Septem ber

and.

the

*

-f

While the large producing interests are holding firmly

to established

plated,

pressures
says

but the

satisfactory settlement

a

excuse

ing

,,

.

valid

democracy such

of the rqfund-

'i

■"

•

In retail trade last week a noticeable increase in the purchase
of soft goods occurred, which aided the upswing in total con¬
sumer
spending for the period.
On the other hand, abnormal
! wholesale buying showed a gradual falling off in the .week, but
notwitstanding this, the high orders level was-sustained through
a sizable influx of advanced bookings in durables.
;

no

announcement

In keeping with the higher tempo of trade and industry^ pylerclaims for unemployment insurance, it is reported; continue

•all

of

sfatemen t,
Secretary
Snyder said:
"Friday's

freight carloadings.
In the steel industry, steel: ingot
production registered a rise of a fraction of a point to slightly
•

to

holders

flaws in the: operation of dictator¬
Stalin or a Hitler. But they constitute
de-emphasizing the politics-playing in a

ships, be they headed by

curities. In his

industry, automotive manufacturers, the oil predujc-

power

protection
F e d e ra 1

and

:ers

a

Of course there are great

.

*

:

as

A.WILFRED MAY

Democracy's Workings in Wartime

current

level of inter¬

.

by

announced the contin¬
uation of the policy to maintain

LOS ANGELES

BUFFALO

BEVERLY HILLS

11

(

(714)

The Commercial and Financial Chronicle
•

.

.

.

Thursday, August 24, 1950

.

'

•

i

.

actually present for only

We Don't Need

time

an

C

,l>!u.ary and economic life. Many
clamoring

;

y.-t

3

for

only
Iso for

i

.

0

cess

1

<

ing

T

ee

.<

?fits

j

.an

"V

3

15

taxes.

members

taxes

the

{

J

O

Peter

tax

still

we

Evans

15

1917

faint

a

to

recol-

1940 when the last

from that period

being closed,

e

hout

dozen

a

J.anonal

later, the
Recovery Act

years

Industrial

another excess profits tax
a ter .June
30, 1933. It

I ave us

l ective

e

\

.

(from

have

of the cases

,v
a

as

companion

a

ek

/'
c

jenamed

the

profits

<

i"

no

it

did

it

In

value

1940, however, the most re< L-nt
excess
profits
tax
was
<„-acted; it stayed with us six

through 1945.

1

and

w

1941

The rates for

were

cil

Internal

comparatively

ranged between 25% and

C0%

depending
on
the
ofit net income, with a

excess

wds

ings,

for

awarded

the claims.

with

started

to

processing

relief

To

and

hear¬

rejected

or

complete the work

by January, 1952, Council mem¬
bership was recently enlarged to
25.
Taxpayers dissatisfied
with
Council

Decisions

have

the

rig it

file

to

petitions and
be
heard
solely and finally before the Tax

Court.

profits

relief

tax

cases

must

not

prove

A

only

"prove"

what might have happened.
For
example, a corporation owned one
plant with a capacity of 1 million
units, on a one-shift operation and

year

1

or

1944

and

increased
years

(

to

1945,

95%.

the rate
For

these

two
was

39%

Congress
postwar

some

(1)

hard-

allowed

refund

the

first

credit

a

(the

rates of 90% and 95%
became
11% and 85.5% net,
respectively),
/'• id (2)
placed an 80% ceiling on
tiie overall corporation tax.

owned

Former Inequities

Congress knew that
■cul and
cess

automatic

profits

tax

it .equities and

a

ex¬

result

hardships.

in

It pro¬

vided several methods of
comput¬
ing the base for the excess profits

tax; the four
became
tax

the

1936 to

years,

1939,
period, and the

base

figured

was

after arriving at
i\ credit based (1) on the
average
income for the four
years
with
certain automatic
benefits, such
the "75% rule" and the

formula,"

or

(2)

as

"growth
the invested

on

capital.
,

la

tion

addition,

a

special relief

sec¬

was

enacted—the well known
Lection 722; it provided
ways and

means

of

securing relief from the

3 ayment of excessive and discrim¬

inatory
1*vy

taxes, resulting from the
the excess above so-called

on

"normal earnings."

The "normal"

theory sprung from the idea
fae years 1936 to 1939
were

that
nor¬

mal and that
they were the closest
fo the high tax years, 1940 to
1945.

Li time,
satisfied
ci
3

the

efunds

Lot

so

taxpayers

with

relief
were

bad

the

became dis¬

administration

section.
made.

that

Few

relief

The situation

Senator




George,

was acguired; it is
had the corporation
plants (instead of one
earn¬

ings would have been greater than
$100,000 a year. On an arithmeti¬
basis

cal

have

the

corporation

earned

$200,000.

would

But

since

there would have been

savings in
fixed, overhead, adminis¬
costs, and the like, the

certain

have

would

exceeded

of $200,000

average

would

levy of the
would

to

one,

plant) from 1936 to 1939 its

profits

mechani-

plant, similar

that

two

trative
,

Assume that late

second

a

obvious

0.000.

fhips,

of profits.

1939

was

the specific exemption

11 order to eliminate

in

be

a

undeniably

true

the

This

year.

if

we

did not have to give consideration
to the factor of demand and mar¬

ket for

the

added

production.

If

the market couldn't absorb
the
added production then there could
be

additional

no

second

this

lem

plant.

kind

boil

the

of

available
the

to

extra

where

we

profit

from

Therefore,
down

size

the

of

to

of

prob¬

market

corporation

production.
run

the

the

the

cases

This

for

administration

well-prepared

inadequate.

War

I

of the

and

tax

have

we

the

the

—

for

reminder

arisen

with

profits

tax.

excess

Only if current de¬
lead to an increased

velopments
war

the

to

new

tempo

the

or

war

economy

is stepped up, is there a possibility
that
another
excess
profits tax
will

be

not

enacted.

run

as

The

rates

will

high 90-95%; the

con¬

The

legal monstrosity of "nor¬
mal earnings" will appear again.
A
base period
will have to be
adopted.
The terms: standard of
normal

earnings,

normal

normal

times,

will

etc.,

Some want

opera¬

1947

be

1949

to

to be the base period while others
also

want to

include

1946.

and

stimulated

riod

credit

of

ditions
have

second
a

plant?

Most

an¬

half million units

or

three-quarter million units arcmerely opinions and have to be
carefully considered.

Complexity of Relief Cases
The

presentation of relief cases
involves not only tax talent but

economics, engineering and the
like; it involves the economics of
marketing and demand, engineer¬
ing, productivity and efficiency of
plants

and

equipment, market¬
ability of new products, and the
like, all or some of which were

1936

in

the

aiound

10-15

and

while

about

was

At

in

past

times

three

prices with greatly reduced
power.

profits

cess

base

tax

1936

of

To

levy

on

the

earnings
would

1939

to

ex¬

be

that

it

the

still

are

would

old

others

be

credit,

feel

to

use

proper

but

with certain
One way

corrective adjustments.

would

be

increase

to

it

ing factor.

Some would apply the

of

percentage

increase:

in

the

price level, in national income, in
the

particular industry level, etc.,

between

the

the

old

base

period

Another

current.

New

he

England,

had

But

the

with
it

another

which

my

that

the

settled

that there will not

profitstax

excess

would

in

or

require

the

cause

it

and get

accepted

wanted

to

merely

close

its

for

case

its refund. Correction fac¬
the

differences

between

leviate the situation.

Difficulties With the Concept
"Normal"
Bureau

plagued with
word

and

the

"normal."

taxpayers

war

as

is
on

being

was

Senator Tobey,

you,

home

a

financed

for

him¬

through
not

were

the

present

now

on,

help

so

goodness, if Tobey didn't

me

Foster

Stearns, the iso¬

Tobey has been embraced by the Leftist group of
Washington
as
a
Republican "liberal" and to the amazement of

columnists
his

colleagues, they

He

is

not

are always blowing him
up as an influence.
Mostly he is a source of perpetual amusement;

that.

he is looked upon as the

famous

prototype of Radio Comedian
Claghorn.

Senator

Fred Allen's

I heard him once on a Town Hall
radio program.
A sharp
question-was addressed to him from the audience. It
stumped him
momentarily, then he said:

"A most arresting idea
colleagues in Washington."

which

.

recently

he

has

been

shall

I

communicate

member

a

of

the

to

Senate

my

Com¬

mittee
as

Investigating Crime, generally looked upon in Washington
just about the best publicity junket any Senator has ever
because

not

upon,

there

isn't

lot

a

of

crime

and

it

is

with politicians in high places, but that the members of
committee, while spending at least $150,000, do not intend to
do anything about it but
get publicity. Although headed up by a
Democrat, Senator Kefauver of Tennessee, Tobey has stolen the
show.
He has done this, not
by questioning the gamblers who
appear before the committee, with a view to getting
information,
but btv delivering a sermon on the wickedness of
gambling which
up

the

for

some

reason, peculiar to newspaper

editors, gets the headlines.

He is
be

unquestionably a card, and in less serious times would
luxury we could afford, but young Wes Powell, we are told,

a

has his number.

New

Deal

bachelor,
he

Green

is

arourd

rides to his o'fice

paid

his

millionaire
ingly

the

a

never

the

two

same

most

ball

in

is

a

only the

multimillionaire

that he proudly tells how

so spry

the

morning and how he

had any attention

with all his millions,

politicians of his

in the New Deal.

in

He

bus.

to the

way

specimens that

rare

produce.

medicine

a

on

Apparently he
but

Senate early

those

could

in his eighties, but

now

bounces

of

one

revolution

State

to

the

to

come

Down here he met another multi¬

boat, Senator Murray of Montana seem¬
multimillionaires in the world, two

lonely

Orphan Annies.
The

Commies

predicament and
was

as

a

and

the
to

came

ever

radicals

fawn

baby receives

a

with

man

used

page

to

realize

their

them.

Commie but they

a

quick

were

upon

I am not suggesting
welcomed this crowd of

candy in his hand.

You

get the impression that these people were the only friends Murray
and Green ever had. These
people made them feel an importance

they had
how

enjoyed and,

never

much

these

two

as a

result, you.would be amazed at

financially well-endowed

men

have played

their game.

The

United

States

club

the

exclusive

in

Senate

has

This

world.

been

is

described

because

the

as

the

most

Senators,

not¬

withstanding the heatedness of their debates, will gather in the
cloakroom

or

frankly of

their

political

where

must

live

men

at

give

and

they

were

take,

dinner

day

and

exchange

problems.

together in

after day.

a

It

pleasantries

Presumably

it

and

must

tafk

be

so

lawmaking body and have to
would

be

to follow up their debates with

impossible

fisticuffs

or

living
duels

if
off

the floor.
But neither

are

meaning of the

Continued

for

was

the two periods would tend to al¬

The

rest

be¬

tors which would tend to compen¬

sate

paid $1,500 down for

the

and make the less
glib
lationist and he the internationalist.

of

use

the old credit which the taxpayer

reluctantly

and

around

fawners

Washington

paid

an

an

use

industry.

being closed

who

had just bought.

no match at all.
A highly conscientious
man,
internationalist before Pearl Harbor and
Tobey
"isolationist" as the term was
being loosely applied.

been

had been

each

in

know

Powell

Washington, knowing Tobey
is, and being tolerantly amused at his political success here¬
In 1944 he was
opposed by Foster Stearns, then a member
of the House, and a member of a
famous New England family.
Foster, always a gentleman of the type you hear a lot about in

that either

made

to

home which

tofore.

period profits
to current base period profits for

were

American

Hampshire,

and

would

the ratio of old base

Statements

of

New

This sort of stuff tickles
political

through

the application of some multiply¬

demanded

way,

Rights, "which

Senator

who

of

he

pur¬

an

Barnum

on."

vote

inequitable and unrealistic.
There

of

embarked

that. The inilationa' y effects have
resulted
in
increa~ed
costs
and

chasing

children

Bill

tied

was

old

Tobey

that

new

he h^d
self

This

years

of

interests, he asked, were giving
this money to Powell to defeat
him, Tobey,
long the friend of the common people.
Well, Powell got up in his turn and said

Bargeron

con¬

dramatically.

billion

$80

1939.

national income

our

it

years

to

economic

as

past

changed

that time

be

whether

Carlisle

More

would be unfair

disposed
its

the

shortages.

the hope

from

backlogs

Many fear that the government
might reinstate the old base pe¬

was

swers,

by

sense

American

What sinister

turn

is about 70-75%.

sensus

a

the

the two were speaking on the
platform, and Tobey in his usual dema¬

gogic

GI

regard
a

engaging
Senator

seems

same

as

of

at

Wesley Powell,
recently pulled on him.

During the past weeks queries
possibilities

to have

come

amazement

up in a primary election next month.
political Washington we have been laughing

It

of

Outlook

our

at what his younger
opponent,
hero of World War II,

the

at

as

increases.

comes

In

profits

blast

is here to observe the antics and
those who have been successful in

industry usually

That

to

have

of

politics,

and

wasting public funds.

Present

it

conduct

humor

liberally and

Couzens'

Bureau

business
this

a

pre¬

best

excess

somewhat

cases

Senator

hearings

corporation

whose

Council, I

properly

settle

to

case

the

us

of

most meritorious relief
claim, if
improperly
prepared
or
poorly
presented, will not be accorded its
justly entitled relief. From World

with

by

those

scene

Even

The $64 question is: How
many
units of product could have been

of

observers.

were adequate; but
many were poorly presented and

is

into trouble.

coming up in what used to be referred to as
England are attracting the attention of Washington
Politics is the industry of
Washington and

New

political

job.

normally

imponderables.

many

3

ecific exemption. For 1942 and
943, the rates were hiked to 90%.

just

what actually happened in 1936 to

the

taxpayer

staid

elections

relief

1939 but in addition must

of

because

4.

$5,000

with

tax

Many
object to these years because thtfy
are not normal due to high post¬
war production and spending ab¬

most difficult to prove

during the b;se period years, 193d
to
1939, it averaged $100,000 a

3

discussed

member

a

defined.

are

By CARLISLE BARGERON
Two

sented; others

tion,
Imponderables

Excess

certain

processed claims of hundreds and
hundreds of taxpayers. Some were

Revenue

The members held

making

the News

to

from

organized

Claims

members

review.

ex-

repealed

was

1945.

1940 and

of

(non¬

five

and

Ahead

common-

approach

executives

have

attempts

Council)
least ten

at

outside

Washirgton to the Coun¬

1940

In

> ,-ars

the

men)

members.

profits tax

now.

declared

tax,

capital

way

excess

conceive of it

we

the

to

in

the

to

mpare

i n

but

tax

with

from

Council

roll into

) "-Pon around

•j

Guy

ex-

profits

;St>

<

(later called
Tax

July, 1946, the Excess Profits

Tax

Gf

first

te

number,

Bureau

In

stiff-

I rates.

(

Experts
Profits

itself, to review and speed up the
disposition of the claims for relief.

Wars

ihe

in

on

government

previous

id

of

Excess

excess

fid

f

Board

a

mpanying
fx*

held

was

the

excess

3>: outs

heads

May 7, 1946. This
hearing called for the creation of

reveals

-y

association

business leaders. After study¬

ing this testimony another hear¬

profits

.

('ur tax hisi

missioner of Internal Revenue, tax
and

an

of

and

I

and

As

held

practitioners,

taxes

nor

<

1

sound

a

businessman's

most difficult

Inter.lal

on

Washington

keenly interested in its equit¬

able

Revenue
Taxation,
hearings in February, 1946.
Testimony was given by the Com¬

our

requires

whom

lopments of the Korean War

dominating

From

be

1941.

problem

are

Chairman of the Joint Committee

are

or

new

to

or

titioners

dynamic

A Stalinism

)

about

or

ing them through to just and logi¬
cal conclusions. Tax
officials, Sen¬
ators and
Congressmen, tax prac¬

excess

of relief cases involves wide
knowledge of economics,
larketing, and engineering. Maintains no matter how well Con¬
gress frames new law, the relief provisions will be inadequate,
oncludes under present
conditions, there is no fiscal or eco¬
nomic necessity for
any excess profits tax.

i

short

a

1939,

clean cut assumptions and follow¬

tion

and

of

until 1940
it

]

complicated

end

1939, but not completed

the

profits levies, citing their
fiequities, imponderables, and complexities. Asserts considera¬

'j 'ie

started

sense

Formerly Acting Chairman of the Excess Profits Tax Council

official traces past

tail

started in

By PETER GUY EVANS

Lawyer and Certified Public Accountant

tax

the

plants

Excess Profits Tax!

Former

in

those under commitment like

They

are

in;

lea<Tiios;

26

country.

Tobey, Green

nor

simply not understood
neither

has

any

of

Murray is

or

them

a

member of the club.

regarded highly by their col-

rendered

any

service

to

his

Volume 112

Number 4936

Scaie
By

Mr.

The Commercial and Financial Chronicle

.

.

.

Buying

ROGER

W.

flation,

shortages
items

there

says

and
in

are

coffee

supply.

excess

and

cocoa

ilems in

of

suffice

will

for

arrive

The

crop.

and

new

from

heavy.

A

cutback

great

and

years

is

now

moderate,

would

especially

entail

tion

hand

on

fa¬

and

we

June

in

Yet

25

when

Korea.

the

a

is

could

began
surplus

in

Rican

trols
not

the

is

output

to

and

cane

hardship.

suffice.

might

ing to past neglect of the coffee

anticipated

But

here

too

If

price

sugar

of

ture

what

is

and, perhaps, rationing; but
long as the war is confined,

so

Adds to Staff

con¬

year-ago

by a substantial margin.
Only destruction of shipping can

Co., 40 Exchange Place, New York
City, members of the New York

S.

exceeds

cause

Stock

shortage of sugar. Hoard¬

a

the situation does not justify fur¬

ing, whether by wholesalers,

ther hoarding.

tailers

or

could

consumers

Exchange,

Stephen

re¬

ciated

create

with

announce

Lieber

A.

is

now

the firm.

fesue

happening there.
But

recent

price

rises

in

:»*

>.

farm produces

foods
non

materials

raw

leave

what

where

here,

to

seems

of

The unconditional guaranty

day.

I

of The City of New York of the payment of both principal and interest will be
each bond. The full faith and credit of the City will, in the opinion of bond counsel, be pledged for
formance of such guaranty and the City has power and will be obligated to levy ad valorem taxes upon all

endorsed upon

suspect

that

much

this

so-called

linbson

the

of

"scare buy¬
hoarding,

...

114%, 5%, VA%, 2% and 214% Bonds

be

order

the

ing,, which is just plain
is being L one

pe

taxable property

Dated

September 1,

by businessmen who

Bonds

piling

maturing

March

1, 1958,

nuge

of

reserves

iten

s

scarce

curing World War II. Such
heavy
buying
has
already re¬
sulted

in

which

ight

n

occurred.
wave

ice

p.

advances

not

It

have

has

redeemed

of

some

before
or

a

started

of

their

a

hoarding which,
bad, will certain¬

if

on

after

or

1,

1,

1959

will

be

1968;

and

par

accrued

March

or

1,

1963;

premium of 3% of their

a

par

on

on

before March

or

a

par

3V2%

or

premium of 4%

a

par

or

March
a

or

on

1,

before March

1983;

or

of their

value if redeemed

value if redeemed thereafter but

before

1, 1988;

plus

of their

value if redeemed thereafter but

value if redeemed thereafter but

redeemed thereafter but

as

premium of

a

1, 1952-2000, incL

prior to maturity at the option of the Authority on
whole, or in part in the inverse order of their numbers, at

interest to date of redemption
or

March

redeemable

interest payment date thereafter,

of

before

or

March

premium of 2Vl% of their
par

for the performance of such guaranty.

rate or amount

Due

or any

price

on

March

otherwise

also

of consumer

if it become too

redemption

a

within the City without limitation of

1950

believe mey are
using f jresight in
up

City Housing Authority

hap¬

heavy
buying"

"scaie

W

to

as

is

pening

ihe

New York

littie

doubt

Rogei

$11,180,000

and

durante

-

a

on

premium of 1% of their

par

but

before March

or

1, 1978;

premium of

value

par

thereafter

or

on

if
or

1, 1973;

premium of 2%

a

1 1/2% of their

value

par

value if redeemed thereafter.

ly hasten price controls and ra¬
tioning
Such hoarding is foolish
and, at

he

becaus

it

does

no;

mean

ways- war

sonable

time

same

breed

or

no

supplies

Few

dangerous

inflation.

should

we

war—keep

al¬

Principal and semi-annual interest, March 1 and September 1, payable at the principal office of the Fiscal Agent of the Authority.
Coupon bonds in denomination of $1,000, registerable as to principal only or as to both principal and
interest, ,with the privilege of reconversion into coupon bonds at the expense of the holder.
,

..

_

rea¬

terrible

happen

time,

to

is

Shortages

In

the

opinion of bond counsel,

all taxation
Public

inflation.

invite

disaster

is

to

prrmit

ard

anti-social,

which

were

during

and

Holde

large

s

in

shortest

World
scarce

goods

supply
War

as

a

all taxation

unreasonably

over-

ocks of those items which

critically short will al¬
cer'ainly have to give uo the

surpluses they went to such
lengths to obtain.
Also note this:
Here a'

$117,000

l

or

Yields

Price

1952

1.00%

Amounts

farm

products.

issue

p

ice

Each

forecasts

buying

advice

for

commodities.

always

in

close

Approve.

Prices

1963

1.75%

118 000

5

1953

1.10

171,000

2

1964

1.80

5

1954

1.20

174 000

2

1965

1.85

130 000

5

1955

1.25

178,000

2

1966

1.90

137 000

5

1956

1.30

181,000

2

1967

1.95

144 000

5

1957

1.35

566 000

2

1968-70

100

151,000

5

1958

1.40

600 000

2

1971-73

2.05

159C00

IV*

1959

100

637 000

2

1974-76

161.000

IVz

1960

1.60

678,000

214

163.000

114

1961

1.65

725,000

166,000

114

1962

1.70

2,187,000

Amounts

Raxes

Due

214%

309,000

316,000
323,000

$302,000

Prices

Yields

1991

99/4

2.26%

214

1992

9914

2.27

214

1993

9914

2.28

2%.

1994

99

2.29

330,000

214

1995

98%

2.29

337,000

2 V.

1996

9814

2.30

2.10

345,000

214

1997

9814

2.31

1977-79

2.15

353,000

214

1998

98

2.32

2%

1980-82

2.20

361 000

2

k

1999

9794

2.33

214

1983-90

100

369,000

214

2000

9714

2 34

(Accrued interest to be added)

The above Bonds
for

we

are

delivery when,

Messrs.

as

offered subject

and

if

issued

to prior sale

before

and received

by

or

us

after

and

appearance

subject

to

of this advertisement,

approval

or

legality by

Caldwell, Marshall, Trimble and Mitchell, New York, N. Y., Bond Counsel for the Authority.

clear-

each

Thus

touch

114%

cr

near¬

month

and

Due

124.000

Park, ou
econo¬
continuaPy studying the

supply ~""i demand ratios in

Rates

$168,000

Babson

are

these

Due

14%

ly 100 basic commodities, includ¬
ing the nrincipal foodstuffs and

I

of
am

with

velopments in the important

de¬

The National

City Bank of New York

C. J. Devine & Co.

Halsey, Stuart & Co. Inc.

com¬

modity markets.
It is my opin¬
ion, bos^d on this carefully gath¬

The First National Bank

The

R. H. Moulton &

Philadelphia National Bank

'

•

ered

information, that

modities

w-p

supply

now

in

P°rhaps

weakne^
we

are

in

lie*

for the huge

need

keen

to

our

com¬

greatest

our

metals

dependent

<-o

most

g^od current

sources

on

tainly.

foreign

amounts

we

great industrial

foods

are

plentiful

Cocoa

and

Coffee

there

the

of

has

coffee,

Mercantile-Commerce Bank and Trust Company

centered

and

a: "

"scare

fiw

should

with

on

in tight

be

no

cocoa

W. H. Morton & Co.
Incorporated

Andrews &

Wells, Inc.

Laird &

F. S. Smithers & Cc.

Fidelity Union Trust Company

Company

Newark, N. J.

'

Robert Winthrop & Co.

Rand & Co.

Wheelock & Cummins

Courts & Co.

Incorporated

Gordon Graves &

Seasongood & Mayer

and

excuse.

supply, but
immediate




Hayden, Stone & Co.

C. F. Childs and Company

Co., Inc.

R. H. Johnson &

Company

Raffensperger, Hughes & Co.
Incorporated

buying" of

some

'

Incorporated^

Ellis & Co.

Much

Company
7

Portland, Oregon

gen¬

erally.

foods

of

because

machine rolling in high gear. Cer¬

Both

by th<s
supplemented,

or any

Yields
Rates

re¬

do become

cut

exempt from

AMOUNTS, COUPON RATES, MATURITIES AND YIELDS OR PRICES
^mnu-ts

II

present conflict.
of

s

the

after

become

not

of the

mists

are

exempt from
political subdivision thereof, under provisions of tko
Housing Law, Chapter 44-A of the Consolidated Laws of the State of Nevj York*

by the State of New York,

our¬

selves to be carried away
by fool¬
ish fea s.
Besides being unpatri¬

most

together with the interest thereon,

Legal Investment in the State of New York, in the opinion of bond counsel, for Savings Banks and ail othei
Banks, Trust Funds and Fiduciaries, Insurance Companies and all public bodies and public officers.

However, the quick¬
change all that and to

est way to

may

the bonds

items.

many

sult

.

Fortu¬

nately, few
civilian
items
are
really in short supply today. Ac¬
tually we have surplus supplies of

otic

.

United States by the existing provisions of the United States Housing Act of 1937, as amended and
and the Internal Revenue Code of the United States, as amended and supplemented, and are

things that could
in or out of war¬

us,

wild

•■£

•

<>

We have learned a lot as a re¬
sult of World War II and I
hope
we hav. learned
that one of tie
most

J

-

hand.

on

Real

This

not

August 23,1950

Sulzbacher, Granger & Co. 1

it

con¬

Korea.

The

cay-to-day news from the
fighting iront in Korea does not
alway
'•? us a very cicar pic¬

this

high,

running

production here in
U.

cur¬

again,

prices
in

1

Oppenheimer, Vanden Broeck Hk

tinental

supplies

shortage.

push
result

above 1949 levels, while both beet

totals
and

temporary

should

trouble

still

It

despite

Puerto

high

that

Sugar Panic

a

in surplus supply on

buying rush
of the past few weeks. Cuban and

consump¬

extent

For

was

supply,

not an

was

year.

Need

Sugar

and

very

year,

that/1949

an

excess

consumption.

compare

last

good

such

to

rent

any

The coffee situation is this: Ow¬

light supply.

in

prices could curb U. S.

very

voluntary

not

not

with

No

America,

much

stocks

admit

must

in

products

do

South

world

S.

vorably

consumption

cocoa

U.

afloat

sup¬

Brazil's

are

growing

Total

country has risen sharply in

recent

Lists

in the U. S. may
all needs between

now

and next fall when

cocoa

this

only food

as

Cocoa beans

of

important

many

not

mid-term

con¬

few real

are

in

plies

foolish and breeds in¬

is

sumers

plantations
supplies

now

Babson, pointing out hoard¬

ing by both businessmen and

stringency in either if abnormally
heavy buying is cut down at once.
not

BABSON

(715)

E. M. Newton & Company

Edw. Lowber Stokes Co.

that
asso¬

8

The Commercial and Financial Chronicle

(716)

Thursday, August 24> 1950

...

contemplates construction of 244.5

Pure Oil Company and
Ocean Natural Gas

miles of line,
of

Louisiana

Jackson,

Oil

Pure

of

d

new

line

and
of which is
Company. Says pend ng contracts for utilization
scovery indicate expectancy of about 5 trillion cubic
in region,

feet of na.ural gas in

reserves

addition to large amounts of oil.

medium
size in the giant petroleum indus¬
try, Pure Oil is one of the larger
considered

Texas,

has

in¬

in

those

of

an

owned

tial

include the

oil

natural

,

,

J.

Lea,on

t a

marketing.

tions

international

virtue of being
within the United

completely

by

States.
A brief discussion of the various

cate

departments will

indi¬

the

progressive nature and
of the company's business.

scope

Production

The

oil

business

underground

ship of

starts

with

Owner¬

resources.

proven reserves of oil and

gas are considered

hedge against

a

inflationary tendencies
tection against

finding

and

and

a

pro¬

While

oil.

official

no

estimates

have

recently been made by the

com¬

outside

pany,
mated

have

sources

crude

oil

substantially in

be

to

reserves

excess

esti¬

of 500 mil¬

lion barrels—over 125 barrels
per
common stock—and nat¬

share of

about

gas

2%

trillion

cubic

feet—about 625,000 cubic feet
share

of

stock—excluding

per

recent

discoveries in the Gulf of Mexico.
After deducting all debt
and pre¬
ferred stock, these
be valued

$70

share assuming 50
for crude oil and

barrel

a

cents

could

reserves

conservatively at about

common

a

cents

3

Mcf

per

Approximately

for

natural

250 000

gas.

acres

of

developed land is held in diversi¬
fied sections of the United
States
on which
about 6,000 oil wells
and

250

wells

gas

More than
acres

2

are

million

producing.
undeveloped

held for exploration and

are

possible later devionment.
of

the

is

acreage

held

Much

in

large

blocks.
Due
•

severe

restrictions

on

rates of nrbduction

im¬
posed by st°te regu'atorv
authori¬
ties.
the
25 070,852
barrels
of
crude oil produced in *949
was

16,8%

less

May,

1959.

than

rean

products

increasing,

situation

crease

1948.

Since

however, tbp demand

petroleum

steadily

in

has

has

been

the

and

ten 'pd

to

Ko¬

in¬

these demands further.
It
fairlv certain that

no1"

appears

ipee

production

will

exceed

that

of 1949.

Pure

Oil's

greatest

production

is derived from the State of
Texas.

Here, the

in

acreage
the best

(1)

comnanv

Scurry
largest
of

many

known

has

of

County,
years,

Texas, the
discovery

oil

where

wells

are

con¬

acreage

Over 20 producing
in
operation and




is

other

states

which,

Michigan and Wyoming.
000-acre Worland

ing is

in

The 25,-

field in Wyom¬

recent discovery in which

probable

that

these

to

the

a

construction

magnitude

of

tween

trillion

5

or

and

15

On

more.

proposed

trillion

the basis

contracts

gas

aggre¬

gating 440 million cubic feet
day,

25-to-30-year

a

trillion

5

strict

Federal

ably

would

feet

to

Natural

processing plant;

is

plant operated by the
Sulphur Company a
proportion of its production; and

Mcf

and

Texas

are

the clean

serves

Gulf

dry gas remaining after
operations is sold to the
Com¬

for resale.

Exploration in the Gulf of Mexico
Pure Oil is

panies

that

has

ploration for oil
coastal

Shelf
and

lands

off

the

set

the

Commission

United

not

Gas

plan

to

yield and

has

continued

rigs have
offshore over
itself.

crowned

the

success

efforts

of

the

of

$37.50

a

the

Eugene" Island area,
Block
32, off the coast of St. Mary's
Parish, Louisiana to a production
depth of 9,600 feet, have revealed
No.

extensive

densate

natural

operating

off

and

gas

con¬

Another

reserves.

tlm

coast

rig

of

Ver¬

million

Parish, Louisiana, Block
No. 39, has had a strike at a pro¬
duction dept^ of 8,200 feet
De¬
spite

the

limiting

effect of the
small size of the
drilling platform, diagonal drilling
will
permit operation of many

comparatively

will

be

piped ashore.
On
1950, a newly formed

the

gradually
June

16,

ocean

pipeline.

-

going

It

will

natural

gas

extend

nine

miles into the Gulf of Mexico to
the

Pure

Oil

drilling platform,
from
the Rollover Bayou
field,
and will have a capacity to de¬
liver
to

50

the

sion

million

cubic

Tennessee

Gas

Company .through

United

Gas has
Power

re¬

have

a

million
asset

an

or

basis.

distillate

American

Chain

Study

—

—

Cable

&

Stanley

Co.,

Heller

&

Co., 30 Pine Street, New York 5,

this

the

discovery to $50

a

Railroad

Bros.

&

Island

Memorandum

—

Pacific

&

Sutro

—

Co., 120 Broadway, New

York 5, N. Y.

Refinery

General

American

Transporta¬

tion

Corp.—Analysis—Dreyfus

&

Co.,

50

4,

Broadway,

New

York

Y.

Also

available

American

2%%

graph

is

bulletin

a

Telephone

while

1948,
of

1949

record

were

year

of

Tele¬

and

convertible

deben¬

year,

was attained.
During
38,857,732 barrels were

pany's
564

put through the com¬
refineries and 2,746,-

were

own

through

Lower
state
1949

facilities

production

regulatory
caused

James

alysis
ness

&

by

authorities

in

Manufacturing Co.—An¬

in

issue

current

and Financial

Co.,

225

East Mason
Milwaukee 2, Wis.
In the

Street,

Co.

decline to

a

production

probably purchase a smaller
proportion of crude during 1950.
Five

gate

refineries

crude

an

capacity

day

per

company,

of

Bluff,
Texas; Toledo and Newark, Ohio;
Charleston, West Virginia; and
Midland, Michigan. Until recently,
three

gasoline plants

ated.

Addition

larhide

of

were

the

Worland

and

oper¬

new

Dol¬

plants

very

limited scale.

Considerable

and

Inc.,

Cope-

Valley

ysis—Vilas

Hickey, 49
Street, New York 5, N. Y.

14, 1950
York

Tournament

(New York City)

Curb

Exchange Golf
Garden

the

at

City

Country Club, Garden City, L. I.
(Philadelphia, Pa.)

15, 1950

Sept.

Philadelphia Field
Day at the Manufacturers Coun¬
try Club.

National
sociation

Security

Traders

As¬

Convention

Annual

at

the Cavalier Hotel.

12, 1950

Oct.

Dallas

(Dallas, Tex.)
Club

Bond

Annual

Fall

Meeting.
26-Dec.

1,

(Hollywood,

1950

Fla.)
Investment Bankers Association

flexibility has

and modernization
Production
of the

lubricating
facilities

oil
the

at

and

convention

the

at

Holly¬

*

Pittsburgh Coke & Chemical Co.

-^-Analysis

Eastman, Dillon &
Co., 15 Broad Street, New York 5,

N. Y.

*

'

—

grease

Pure

study

Oil

Company

discussing

values

added

the

—

Current

substantial

by

continuing ex¬
pansion and development and by

a

copy

become

of

associated

with

Chapman

La

the

Car-

Salle

New

&

203

Co.,

Street, members

York

Midwest

and

Exchanges. Mr. Carrick has
recently been with Hugh T. Brothweick

past
and

&

he

Co.
was

of

Toronto.

with

In

the

Langill ,&

Co.

Baker, Walsh & Co.

Hicks & Price Add
(Special to The Financial

Chronicle)

Price, 231 South La Salle Street,
Purolator

Products, Inc.—Anal¬

percentage

on

South

write

feasible

Continued

has

Farwell,

•

A.

Stock

Stock

smaller

heavier

rick

111.—John

re¬

being manufactured,
the most important is
The company is now in a
the

Farwell, Chapman

(Special to The Financial Chronicle)

CHICAGO, 111.—Leo E. Murray

are

of

Hotel

Roof).

new

of |which

a

Joins

■

.

your letterhead to Shields &
Co., 44 Wall. Street, New York
plant 5, N. Y.
pro¬

Smiths Bluff

position to manufacture

the Waldorf Astoria

(Starlight

CHICAGO,

products
wax.

at

ner

Wall

estimated cost of $111,510,000.
Hearings are scheduled to begin
Sept. 11, and it appears that a
large part of t^is project is made

by proposed utilization
of offshore reserves.
This project

Gearhart-by-the-Sea, Ore.
Sept.

Railroad—Anal¬

&

will

substantially increase the sale of
liquid petroleum products hereto¬
fore produced by the company on
a

Lehigh

by

Smiths

at

& Lomason,
Refrigeration.:

ysis—H. M. Byllesby and Co., Inc.,

an

Association

Bankers

meeting at Gearhart Hotel,

aggre¬

111,100

operated

are

Plywood

Douglas
land

with

Crampton,

Si

will

finery has exceeded specifications.
Greater
quantities
of
specialty

by 1,005 miles at

>

the

wood Beach Hotel.

Fabric

Lea

level

refinery

authorization to extend its natural

Travers

s—Information—
only 65% of
refinery requirements—the lowest Aetna Securities Corporation, 111 Dec. 8, 1950 (New York City)
since
1937.
However, with al¬ Broadway, New York 6, N. Y.
New York Security Dealers As¬
Also available are data on Win¬
lowables increasing, the company
sociation Silver Anniversary Din¬
ters
to

gram.

for

annual

annual

on

the

outing at the

Sept. 8-9, 1950 (Portland, Ore.)

Paper

Gulf of Mexico—For

to

annual

York Athletic Club,

Island.

brief

a

pletion of the company's postwar

applied

York

New

Nov.

issue also is

same

study of Nekoosa-Edwards

been added to operations by com¬

Commission

(New York City)

Security Traders Association of

"Busi¬

of

8%-inch
com¬

Field

Investment

Sept. 8, 1950

Digest"—Loewi

Transmis¬

daily

In

Utilities—Mem¬

& Co., 120
Broadway, New York 5, N. Y.

others.

of

allowed
oil

crude

COMING
EVENTS

production

processed, of which 36,111,168 bar¬
rels

State

Sept. 26-30, 1950 (Virginia Beach.

Public

orandum—Josephthal

gasoline

the

&
Co.,
148
Street, Boston 9, Mass.

Va.)

record

a

U. S. Thermo Control—Analysis

—Raymond

Bond Club of

on

tures due 1961.

General

in

runs
of the

2%

&

Co.,
120
Broadway, New York 5, N'. Y.

New

N.

Theatres—

Paramount

Investment

Refining
within

United

Pacific Northwest Group of

Chicago, Rock

re¬

increase

reasonably

Co.

*

the recent oil and gas discoveries
on
the Continental Shelf of the

feet

pipe. Work is scheduled for
pletion by Sept. 15.
Federal

Oil's

.

company,

Gathering Company,
organized to build the world's

first

and

of

*

Stores—Bulletin—New-

share.

the

Marine

was

on

oil

Foundry

Analysis—Abraham

New

ground

would

$150

share

&

Quotation

prob¬

and additional gas reserves

serves

barrels

additional wells.
reserves

about

Probable

company.

Two wells drilled in the Gulf in

the

Pure

Mcf

pef

value

Louisiana

Mexico

of

cents

value

costly operation,

a

3

could

miles

up

Should

memorandum

a

Car

Stocks—

burger & Co., 1342 Walnut Street,
Philadelphia 7, Pa.

a

in

American

market performance

*

provp to be 5 trillion cubfic
feet, such reserves figured at only

ex¬

of

10

an

Allied

in the Gulf Coast
selling at 10 cents per

reserves

Mcf.

the submerged
the Continental

coasts

Bank

gas

now

Also available is

eleven-year period—Na¬
Bureau, Inc., 46
Front Street, New York 4, N. Y.
over

tional

of

considered to be worth 4 cents

per

Drilling

Gulf

Though

com¬

on

of

Texas.

been

of several

one

Orleans

showing an up-to-date com¬
parison between the thirty listed

would

satisfy the

Power

requirements.

per

reserve

cubic

be proven

to

area

pany

New

—

Co.,

&

Ryan Aeronautical Co.—Report
—Walston, Hoffman & Goodwin,
265 Montgomery Street, San Fran¬
cisco 4, Calif.

on

would
obviously
be
warranted
only by an exceptionally promis¬ industrial stocks used in the Dowing structure.
Only further drill¬ Jones Averages and the thirtying can disclose how extensive five
over-the-counter
industrial
reserves
may
be.
However, gas stocks used in the National Quo¬
reserves alone could
develop be¬ tation Bureau Averages, both as

traction

ex¬

G.

let

butane in its gas
it receives from

Utilities

Co.

Post
Office Square, Boston 9, Mass.
Also available is a brief review
of the Cement Industry.

Over-the-Counter Index—Book¬

contemplated

N. Y.

the surphur

State

and

Analytical
brochure—Scharff
&
Jones, Inc., 219 Carondelet Street,
New Orleans 12, La.

the

major
national re¬

proven

Pipeline

serves.

New

high

on

onable from present knowledge of
the structure of the field.

a

Montana-Dakota

Cement

analysis—Lerner

and Durez Plastics & Chemicals.

situated

reserves

addition

Federal

Original Issue and Transfer

of Mexico

Inc.

these two

Co., 1 Wall Street,

York 7, N. Y.

triple play: it
produces substantial quantities of
natural
gasoline,
propane,
and

has

"Gleanings"—Fran-

Rates—Booklet—Arthur

pipeline
unless this quantity seemed reas¬

a

cur-

Bisgood, Registrar and Transfer
Company. 50 Chuch Street, New

in the

Continental Shelf will be

importance, include about
Oklahoma, Illinois, Louisiana, have

gas transmission

siderable productive
is owned.

which

are:

proven

recent

producing

fields

It

pressure

of

order

These

to

allowable

for

eleven

also located

increasing costs of

developing

In
this respect, Pure Oil is fortunate.

ural

in

the company

operating

Gulf

of

are

in

5, N. Y.

Current

feet per day at the Kosciusko de¬
livery point.

cubic feet

opera¬

facilities

Tax

producing prolifically.

and

0 n

These

from

free

are

complications

t i

production, and

Producing fields

of

cis I. du Pont &

Stock

and

transpor-

,

Walter

plant

coming into ini¬

now

issue

capacity of about 390 million cubic

gas,

refining,

retail

New York

Corporation's

Riverside

Stocks for the Under-

Portfolio—List

mission

The Van field of East Texas,
discovered in
1929 and still

of

(3)

processing

gas

is

that

and

production
crude

brought into
In this field, the

been

participated in the
construction
of
a
jointly

oil

company

just

fourth

the

recently

are

integrated

Common
Invested
rent

West

of

company
plans to drill 50
additional wells in 1950, and

ac¬

tivities

which

of

production.

1949

$263 mil¬
Its

four

has'

operating
come

with

and

Kosciusk.o, Mississippi. These
pipelines would have a delivery

discovery,
producing

recent

a

which

horizons

lion.

of

proposed 30various producing

Importance of Discovery

lion and gross

was

miles

firms mentioned will be pleased
the following literature:

interested parties

near

Says

The Dollarhide field

(2)

mil¬

$290

about, 215

send

to

extending to a delivery
point with Texas Eastern Trans¬

ress.

Total assrtfs

are

It is understood that the

United's

additional drilling is in prog¬

of

American businesses.

line

areas

Company's expansion and modernization program,
with increased natural gas capacity, portends higher earnings.
Though

to

connecting the

inch

one

Oil

Pure

build

would

Gulf of Mexico

provide basis for development of additional
tor oil companies

Recommendations and Literature

north¬

a

Mississippi compressor
In addition, the company

station.

power

Louisiana in

the coast of

eastern

Statistician, Shields & Company
York Stock Exchange

Writer contends discoveries of natural gas in

earning

Deale r-B roke r Investment

Company's offshore

easterly direction through south¬

Members New

may

Oil

Pure

platform in the Qul£vof Mexico off

By J. WALTER LEASON
Research

including 211.9 miles
line," extending from

30-inch

the

low-

page

28

Exchange
phia 2, Pa.

Bldg.,

Co.,

Inc.,

70

York 5, N. Y.

Pine

members

the

of

staff

the

Midwest Stock

A.

Hicks

of

New

York

&

and

Exchanges.

With Harris,

Products,

Memorandum—G

joined

Philadel¬

,

Purolator

has

Inc.—

Saxton

Street,

&

New

UpVam

WINSTON-SALEM,
Albert

Snelling
staff of Harris,
Pepper Building.

N.

C.

has joined
Upham &

—

J.

the

Co.,

Volume 172

Number 4936

...

The Commercial and Financial Chronicle

control unless

were willing to
practically every
product purchased by consumers.

Why I Oppose

Then

Another OPA
ROBERT

By
U.

S.

fix

All

one

Republican party leader contends
if government pays its way by
balancing budget and preventing
expansion of credit, an all-out

control bill is not

Says

necessary.

another OPA will

renewal

cause

of black markets.
Should
President

establish

to

OPA, the

another

to fix all

power

all

and

authorize the

Congress

ration

and

wages,

prices

all

found that

we

prices
this

plex

Ohio

from

unless

in

to

billion

day,

it

do

OPA
a

com¬

there

world

is

no

who

knows

without

serious

There

one

also

nearly

are

a

transactions

and

wage

control

a

pay¬

undertakes

regulation applying to
of these transactions.

involves

a

tive

immediately if they

are to be
all, and so there is no
appeal from injustice or in¬
equality.
During the World War,

tremendous

de¬

sacrifice.

I

had

ings ruined patriotic citizens.

price

is

ply.

Under

times

meat,
no

there
no

white

Above
we

I

sup-

little

a

too

low,

it

in¬

demand and decreases sup¬

creases

OPA,

different

at

was

butter,

no

no

canned goods, no sheets,

shirts,

no

all

the

in

shoes.
United

face the danger of a

States

complete

hundred

continues, a national morale
develops which makes it possible

of

controls.

to enforce controls.

handled

the

orders

issued

have

to

be

the

effec¬

ended,

Korean

What

we

war

really

which

in

little inclination

the

c

to

had

we

another.

one

black market

Corn

bought at all.

of

the

meat

War

and

over

lumber

America at

prices, if they could

be

farms

World

black market

was

Eighty per cent
slaughtered on

face

brief.

be

is

a

long

Exchange
Weekly Firm Changes

or

one

has announced the

time there

The position I have taken is

in

Transfer of the Exchange mem¬
bership of H. Gates Lloyd to Clar¬

W. Bartow will be considered

ence

Aug. 31.

on

Transfer of the Exchange mem¬

bership
Morris

of

Control

at 1

On

Aug.

31

tire

from

and

& Sacken,

accord with that of the President's

son

economic advisers and also of the

S.

!

Federal Reserve Board.

become

a

v

in

'

/'

Ad-

^

ministration

V

d

i

u r

n

In

War.
out

all-:,

such

war;

controls

•

u

are

for

necessary,
reason

one

'«>€

2'.

the

g,

*/'" %

"

World

first

Robert A. Taft

be¬

the government cannot pos¬

cause

for the tremendous ex¬
penditures required out of current
taxes.
But I agree with President
Truman that the present situation
does not justify a completely con¬
trolled
economy.
The
Controls
sibly

pay

contains

Bill

necessary

many

which

among

powers,

most

the

those

essential and undisputed are

expansion of credit.
always found it
control credit, even in

to control the

has

Government

essential to
of

time

peace,
because
unre¬
expansion of credit has

strained

caused

economic de¬
days of John

dangerous

pressions since

the

Law.
In

opinion, if the Govern¬
its way as it goes by

my

ment

pays

balancing its budget and does not
permit credit to expand, there
will

be

With

a

trol

in

increase

no

prices.

vigorous use of credit con¬

policies,

most

the recent

of

price rise can be undone.
Bill also contains

Controls

The

relating to the production

powers

of materials for the Armed Forces

stimulation

the

and

increased

of

production.
There is no dispute
about the necessity of giving the
Government every power to get
the

materials required
Forces in Korea

necessary

our Armed
and
elsewhere

by

throughout

the

world.

general price and wage con¬
the economy are

But

trol powers over
a

different matter. They in¬
complete abandonment of

very

volve

the

a

economic

free

under

system

built

which this country has been

After a reasonable length of
time, they interfere seriously with
increases in production.
They are
much harder on the small busi¬
nessman
than on the large busi¬
up.

It

nessman.

seems

clear

that they should not be

to

adopted or

authorized until the time has

even

when

come

they

are

inflation.
In

my

tions

opinion, the appropria¬

requested

Truman

up

propose

a

this

to

doubling

by

President

time,
of

our

ex¬

increased taxes and

be handled by

Most

price
and

is

control

seem

is

an

to think that
easy

matter

all the Government has to do

to

step

prices.

But

lusion.

We

we

credit.

people

in

and

this

a

found

order

lower

complete de¬
in

1942

that

could not begin selective price




are

now

fifty-eight

per

cent more Bell tele¬

distant
on

in the last five years.

tomers

Billions of dollars have been

spent for new telephone equipment of every kind.
There are

nearly 150,000 more Bell System employees.

Your

telephone—every telephone —is

a

bigger

package of value because there have been great
gains in the reach of the service
and

as

well

as

in quality

quantity.

Bell
vision

dial direct to telephones in

faster, better service

means

day. In certain

themselves dial calls to

well

as

areas, cus¬

nearby places.

System networks, designed to
as

carry

Tele¬

Long Distance, have been extended

this year.
All of this
are

growth and the size of the Bell System

proving of particular value right

this country can

Operator Toll Dialing —which enables the Long
Distance operator to

cities—already

thousands of calls every

phones than in 1945. 12,500,000 have been added

which

penditures on military forces, can

restraint of

There

absolutely

prevent a runaway

to

necessary

Big Strides Forward

me

outproduce

it has the most and the best

any

now.

One

reason

other is because

telephone service in

the world.
BELL/TELEPHONE

Lewinson,

in

re¬

Lewin¬

and on Sept. 1 Joan

limited partner.

War

Food

to

Lewinson, general partner, will

of S

served

the

Doyle

considered

Exchange, will

partnership

second "

World

be

Sydney

member of the

the

beginning
the

will

Aug. 31.

,

Act.

Dorland

M.

David

ported: the y
Price

Exchange
following firm

changes:

in small

packing houses.
was practically
no
lumber in responsible lumber
yards. The American people don't
like to be regimented for long and
the system inevitably leads to law¬
lessness and profiteering.

At

We hope that
may

New York Stock

*

Second

and meat sold all

war

volunteers before the whole proj¬
ect is
completed.
It has to be

because

While

be

9

The New York Stock
After

after

The system tends to produce tre¬
mendous shortages
because if a

preparation

will

*

brought to

case

attention where arbitrary rul¬

commodi¬
ties?

after

case

breakdown

arbitrarily,

of

there

real

tailed operation with perhaps five

thousand employees and

period

effective at

my

and

individual

make

every

could not
were

infinitely

an

purchases

ments.

This

is

the

mistakes.

we

we

wages.

operation,

enough

to

we

to

willing to fix

TAFT

A.

Senator

it

extend

(717)

SYSTEM

10

The Commercial and Financial Chronicle

(718)

The top god of the Romans was
Jupiter and his senior ana legal

Men, Money and Marketing

wife's

Dean, College of Business Administration,
of Bridgeport, Bridgeport, Conn.

^

One

ti

Moneta,

was

viser, and
coined in

Juno.

was

name

titles

her

By EATON V. W. READ*

£

Bank and Insurance Stocks

ol

ad¬

e

(moneta) was
of her temples in

money
one

By H.

This Week—Bank Stocks

In the

keting in

modern

our

economy

'

marketing

various

in

history of money we find
shells, beaver pelts, cattle,
iron bars and even large stcnes

historically the function and interrelationships

sea

of marand describes facilities of banks

banking and marketing. Stresses importance

of money,
•'

used

marketing and other
and extols work done by the American

priests

economic processes

Rome,

misquo¬

One of the most famous

the statement

tations in history is

of all
Paul wrote

"Money is the
evil."
Actually, St.

root

that

years

ago:

"For the

took

as

the

to

Joachinsthal

Lombardy and the goldsmiths

of

Joachinsthaler

shop,

Rotlucnild.

and the house of

We

the First

that King Charles

of

name

little

evil."

We'll all agree

the Tower of London and that the

which

all

The

cavetousness

evil

and

that they

have

been

alto-

are

t h e

g e

assets

common

through
ages,
money

books
may

is

bread

no

evil

more

buttons

or

or

buildings for w-hich

or

that

—

it

is

generally

a

essential

as

life

nomic

as

keting—the
in

billion

such

economy

without

operating
could

not do

siders

talk.

visualize

to

that

mar¬

elements

two

this

of

impossible

eco¬

and

men

other

title

the

complex

to

are

It

is

a

$250

as

ours

It

money.

so.

When

one

con¬

bank

debits

to

indi¬

one

thou¬

vidual accounts exceed

of

1863,

and

services

—

the

the

Deposit

In¬

other

and

developments.

the

time of Christ and

venturing
they

be¬
even

into the Atlantic so
might trade with the

western

coasts

of

Spain

and

himself at

of

hands

and

through

brains

the

and

ma¬

of

process

marketing only if they use some
exchange.
The
approximately five hun¬

medium of

thousand

dred

of

you

and

men

the

The

Nile

chief

Greeks

the

of

one

which

sidered

trade

center

the

Later,

so

mouths
became

soon

commercial

world.

not

were

of

Romans

country

million

farms,

establishments,

two

and
retail and wholesale

million

con¬

in three major ways.

cerns

of

this

of

seven

One

these, of course, is the debiting
crediting of demand deposits.
other two principal services

and

The
are

the

extension

the

purchase

curities.

of

of

credit

investment

of

commercial

se¬

beneath the dignity

So far

by

current

the

wine

broad
eco¬

nomic

activity—banking and mar¬
keting—obviously did not develop
overnight,
and

over a

Let

briefly

me

the

spective.

In

terms—hundreds

year, or oveiva.
sketch broadly

thousands
commerce

find

ally

wine

merchant
the

ian

the

in

comes

towns

in

into

—a

nation

of

or

development

the

the

of

two

million wholesale

establishments that

that
.

,

and

now

retail

serve

about

money?

tory.

Through

comes

from

*A4dre«s by Dr. Read before tl?e. Npw
Phonal
-

r

Conference, American'
"Banking", Bridgeport, Conn.,

Aug. S, 1950.




Actu¬

tution,

Jenkins,

perform¬

and

in

of
their

little volume called

"Out¬

of

are

in

able and

various

Goods and
use

or

(D)

The
these

groups

in

who

market place

are

the

or

among

that has

albeit

a

no

There's

a

interesting his¬

or.

* woman- <

mortal,

recognized

the

functions

of

a

goddess.

Continued

on

of

widely{

23

the

Manhattan.

in

is evident that

1903,

as

a

a

major

"Bankers Bank"

commercial bank.

a

not

a

Savings deposits and consumer credit
factor until recently and up until now

been

recent

.its operations.

there

will take

within

the

prominently

are

further expansion along

indications

that

other

mergers

place among some of the New York

near

future.

which

Banks

have

been

as

current talk.

These mergers

i

offer the bank stockholders an opportunity to

■

Inasmuch as the low rate of earnings has
.resulted in most bank equities selling at substantial discounts
•'
from book value and because mergers or consolidations result in
the stockholders obtaining at least book value, we would expect
this withdrawal of bank capital in New York to continue.
;
withdraw

his capital.

;

NATIONAL BANK

BANK

ol INDIA/LIMITED

and

INSURANCE

Bankers

to

the

Government

in

Kenya Colony and Uganda

STOCKS

Head

Office:

26,

Bishopsgate,

London, E. C.

.

in India, Burma, Ceylon. Keny*
Colony, Kericho, Kenya, and Aden

Branches

Laird, Bissell & Meeds
Members New York

Stock Exchange

Members New York

Curb Exchange

120 BROADWAY, NEW YORK 5,

market¬

page

involved
with

on

of Bankers Trust, it

meantime

banks

for the
%

ing are buying and selling.
The:
money..And.
fbVrrieY incllides' fotiF steps! detbfin-* the • story,-

but

was

liabilities

and

addition to the staff of

the

disagreement

most

consideration.

candidates for such action have been
Brooklyn Trust, Commercial National and Public National. While
such rumors cannot be confirmed, the action of the stocks of some
of these institutions would indicate that there is some justification

differences of opinion among spe- i
(Halists in any field of science or"

.but

have

consolidations

authorities in the field of

business,

cash

premium

no

Cny, ana two

i-ung isiand

The

mentioned

marketing about the functions of
marketing, as there typically are;

the
French
it
the Latin, moneta.

meaning..mint:
there's

an

-

some

undisclosed

the action,

small premium

character of

marketing"—those major special- :
ized activities performed in the
whole process?
Let us look at the J\
relatiQnship
between
you
men

tions. There is

certain
an

fiduciary

activities

City

who

"functions

on July 6 Bankers Trust
banking and deposit and
of the banking premises,

policies have been designed, however, to service relatively

In
or

regulation and physi¬
cal, psychological and sociological
change.
What

203

made

However, it would not be surprising if
these line* was accomplished.

per¬

and
forecasting, under,
(F) Conditions involving gov¬

new

at

Recent changes in personnel in¬
a Vice President from Bank of
America, which has specialized in branch banking, would seem
to bear this out.
How far any future expansion will be carried
and its timing can only
be determined by subsequent events.

(to

research

Brooklyn

in

expected that Bankers Trust will operate 13 offices
boroughs of New York City.
these recent activities are considered against the his¬

cluding the

pur¬

tasks—individuals

the

is

designed for small or neighborhood
acquisition of approximately nine branch
offices in areas not formerly served and doing business of a kind
not heretofore handled would indicate that Bankers is expanding

use.

middlemen

for

approved

background

accounts.

services for

home

office

of the institution's assets

activities have not been

places

willing to

Building—and

State

Street, and represent

commercial

assets

large "dowtown" accounts.
its

the

People

at

Trust

it is
four

accept

Its

into six
say that
marketing com¬

of

14th

other

obtained

and

respond to more of

Marketing," break down

study

Lawyers

business and act as a depository for other
banks.
Changing conditions limited the need for a bank of such
a
restricted nature and Bankers changed its operations to cor¬
to

Drury

University

The

and

*

consumerProfessors

York

of

Street—Empire

change in policy has taken place.
Bankers Trust was organized in

services from pro¬

and

to

the

When

of business activities directed

the

Function of Money

How

principal
En* And

means

coasts into the interior,
trading posts with 1 the In- ;
and women in banking, and
thej
dians, the general store of the
money and credit in which you ]
small town and. eventually, the.
deal, and these marketing func¬

,we

Biblical

"the

as

office

Upon the completion of the merger with Lawyers Trust and
after the consolidation of some of the offices of the merged insti¬

ernmental

sea

word

from

it

a

lyn, tfdiiifcnwa,

serv¬

■(E) The available techniques of

line of the history

same

or

at¬

and
sales
management,
advertising and public relations,

Napoleon

keepers

As

selling

and

grandiose ideas, of conquest.
In

defined

Bankers

$50,000,000 of deposits and over 20,000 new customers. In addition
Bankers Trust obtained six banking offices in the Bronx, Brook¬

torical

use

of

the" Hanseatic

shop

To

in

word

the

certain furniture and fixtures.
part of this transaction Bankers acquired approximately

exception of

covers

of the printed

34th

Avenue

other

and

transfer

the

Marketing Association, composed
of
university and businessmen,

history

what

on

in

form

Europe

use

televised

or

main

the

Guarantee's

Title

functions

ally, marketing is a much more
complex process.
The American

that he
quantities.

too much fob Bonaparte's

proved

chaos of varied coinages—was the

activity

it

agency

(C) The functions involved
which I will soon return).

called "a nation of shop keepers"

the

money changing — a
made necessary
by the

family needs.

ices, to the salesman it
personal-contact selling.

(B)

the rise of Ital¬

northern

eventual

England

the

of

and

spoken

business

so

small

along

commerce

tapped

kegs

in

sell

that

service

her

with

follows

Guarantee which

chase.

people of this country.

In the history of banking

drink

advertising

Deposit Company,

According to comments made at the stockholders meeting of Title

store every few c'ays to
buy—for cash or credit—the food

who

business

better

of

the

To

and

Eighth

operation.

facilities

going to the

means

of

Under terms of the agreement

grocery

(A)

not

were

the

of

man.

#

Greeks

small

shops, from which eventu¬
get our word broker, since

are

young indeed, but the history of
banking
and
marketing
and
money
does
go
back
through
m*ny centuries of the history of

it

the
study
prises:

historical permarketing we find the1 Yankee
anthropological peddler carrying his wares from
of

marketing?

housewife

business

Averue

assumed

of marketing
major divisions.
They

of

years—finance and

is

Safe

be merged

7, 1950.

country.

our

of

Aug. 10, 1950.

Company.

The

of

trust

the

We also find the Roman

might

situation.

the

ethics

when

These tremendous phases of

century.

of

or

the

indus¬

the

Trust, will

figure

This

appraisal

an

b.y Bankers Trust to expand its banking facil¬
closely the acquisition of certain banking functions
and operations of Title Guarantee and Trust Company on Aug.
ities

What Is Marketing?
What

lines

the "kapelos"

bureaus.

league

the

of

cor sum er,

and

users

concerns

useful

in high esteem or governed

and government bonds.
So much
for
a
quick,
of

trial

New

as

retailers

held

Further

view"

institutional

Agnew,

subject peoples.

banks

billion,

ultimate

the

to

upon

This proposal

forests

and

toward, and incident to, the flow

nature and left
largely in the hands

commerce

of

loans were
$42 billion and investments were
$78 billion—including mortgages

$141.5

were

farms

mines and factories of Amer¬

and

ica

the

from

share.

a

based

Montague Street.

the distribution of goods and serv¬

ices

of Lawyers

other at

areas

contribute to marketing—

banks,

ducer

their military

of

broached

At the end of 1949,

deposits

and

thousand

fifteen

$68.09

of the merger, County

part

as

Fi'th

at

the

men

of goods

parently,

banks

our

in

women,

thousand

paid
value

Broadway will likely be absorbed by other offices of Bankers
Trust in the same area. Two branch offices of Lawyers are located

closely how

more

hundred

be

book

According to the letter to stockholders, the merger will bring
Trust approximately $75,000,000 in additional deposits,
banking personnel, 14,000 new customers and four new

Let

the

turing

serve

fifteen

and

ance

con¬

three hundred thousand manufac¬

thousand

the

in

examine

will

Company

Banker

111

five

be

additional

offices.

now

of two-.nirds

institutions, which are meeting for this
Also to consummate the final consolidation,
obtained from the New York State Superin¬

14.

the adjusted

Safe Deposit

and

has

of

Also

and

us

approval

Banks.

affiliate

an

men

the

Bankers Trust

of

name

assets and liabilities at the finish of business on

in

the

retailing is concerned,
the Greek's god Hermes was the
deity of "roads, commerce, in¬
vention, cunning and theft."
Ap¬

working

women

So far I have talked of

tempting to sell good's and

centuries

12

system.

chines

wars

Mediterranean

ambitious in commerce, but Alex¬
ander founded a city named for

quantities

great

largely the

Africa.

their

two

of

must
of

represents

the

stand

truly commercial people—
sailing their tiny vessels on the

high¬
physical standard of living in
the
world
through any
barter
exchange huge
the
products
of

to

Sept.

Trust

yers

money and marketing, today
down through the cen+uries.

the

first

unable

upon

Providing the merger receives the necessary approvals and
there appears to be little doubt that it will, stockholders of Law¬

which its country took more than
its share of death and disaster.

and

world's

est

can

onslaught

the history of marketing we

which give our country the

Men

was

Act

Reserve

tendent

ant,

the Phoenicians—the

In
find

Federal

Corporation

surance

recent

Banking

Federal

The

System,

the division of labor and

goods

National

the

came

that

of

"Bancomania"

and

speculative frenzy of starting in¬
dependent
state
banks.
Later

fore

change

we

later, the First Bank of the United

billions of dollars a year, it
is obvious that We could not have
ex¬

notes.

find the Governor and
Company of the Bank of England
established in 1694 and, a century

sand

the

bank

modern

as

States

recognized medium of exchange—
is

manner

Finally,

be exchanged.

Money

-

Eaton V. W. Read

the
but
in itself

the

than

for

earning assets in the
form
of
interest-bearing loans.
And
their receipts for deposits
circulated
in
nearly the same

too

r

latter

deposits far exceeded current de¬
mand
and exchanged
unearning

avarice

anj

de¬

business to the goldsmiths.
soon found that their

posit

greed,

ness,

monarch thus drove

ill-fated

sellisn-

that

sterling

pounds

of

root

approval

the

that local mer¬
chants had lodged for security in

the

is

thousand

hundred

two

Trust Company under the
The merger is subject to the

purpose on

the United States

now

focused

oeen

of the stockholders of both

coin first minted there

a

in 1519 and

Bankers

Company.

The

be

to

came

dollar, its etymological descend¬
is
the
leading
and
most
sought after medium of exchange,
having out-run the pound sterling

seized

love of money

and

of

town

Bohemia.

in

recently

The mcst recent development in this connection w'-is the pro¬
posal announced last week to merge the Lawyers Trust Company

finally the state as¬
privilege anj responsi¬
bility. Our word, "dollar," traces
its ancestry back through other

of

has

served.

in

and

century. spellings

12th

the

into

and

learn

minting,

over

We later find the famous men

London, the medieval pawn

Timothy

to

1800

through the Roman em¬

un

pire

Mer¬

sumed the

Banking.
times

silver.

and

gold

attention

Bankers Trust because of its activities in acquiring other banking
-institutions and expanding its operations into areas not formerly

chants first issued coins; later tne

employees to increase their knowledge of
Institute of

Considerable

mediums of exchange and

as

finally

Urges banking officers and

processes.

JOHNSON

E.

ancient Rome.

University

Dr. Read traces

Thursday, August 24, 1950

...

N. Y.

Telephone:' BArclat 7-3500
Bell
(L. A

■

Teletype—NY 1-1248-49
vqnaeer Trading

Specialists in

Dept.)

Bank Stocks

and

Subscribed

Paid-up

_£4,000,000
£2,000,000

Capital

Reserve Fund
The Bank

Zanzibar

Capital

£2J>00,000.

r_-

conducts every

banking

description of

and exchange business

Ti-usteeships and

Executorships

also undertaken

j

Volume 172

Number 4936

The Commercial and Financial Chronicle

...

(719)

has

Financing Utility Expansion in

per

as

investment

and

bankers,
and
institutional
and
private investors ready and will¬
ing to provide you with any of

ural gas to

your

You, of

that

there

reasonable needs for capital.

might

circumstances,
anticipate that

well

remarks would

know

course,

is

vice

and

be

my

est in this sub¬

gas.

con¬

However, with your permis¬
sion, I would like to turn to the
broader

hope

and belief that

and

more

fundamental

available from

important sub¬
ject
as
"Financing Utility Ex¬
pansions in the Northwest," or in
any other part of the country for

one

that matter.

natural
will

be

aspects of such

gas
made

or

source

an

Joseph

of

consumers

the

not

The

those
for

of

To

in

operations

gas

itancy

natural

of

have far

that

stating

in

advent

readier

gas

access

it

established

well

verted

properties

Yota

satisfactory.

utility

which

wonder if you

the
will
capital

in

,

other

yield

57th

the
cific

Annual

Coast

yielding

Convention

of

the

last

the

year

industry, '<

the

which

are

you

enjoys.

I

fully appreciate the

utility

bonds was

Prime utility bonds were

and

that

It is much

In

has

to

come

of

matter

bulk

for

be

it

but

more

accepted
in

is

tain

the differential

f rom

page

.

.

utility
appro¬

it.
takes

a

pound

on copper,

in the face of the prospective need

import about 50,000 tons per month; and in
current legislation avowing the purpose to keep
to

Politics
Bu.t it

vs.

the

International

the face of con¬
prices down.

Front

is outside the domestic economic field,

and even more

seriously in the sphere of actual waging of war, that sabotaging
from political bickering is being revealed.
The importance of
Senator Wherry's widely-publicized statement of last week that
"The blood of our boys in Korea is on his I Secretary Acheson'sl
shoulders, and no one else," lay not in any internal rift or interparty squabble which

it might imply.

that it elicited from Wherry's

speaking

as

Values
Common stock investors, as you
well know, taking as they do the
bulk of the risk in any venture,
properly expect to receive some

these much

in-

with the

you

reward

funds

needed

the

in

environment

funds

invested

are

quite nervous
at times, as
almost
complete

rapidly

a

bonds were selling on an
yield of 4.67%, New York
Central
Railroad
Refunding and
Improvement 4M>s of 2013 were
rated AAA and sold above par. In
the short space of three years the
bonds were selling in the thirties
and the rating had dropped to BA,
which rating incidentally persists
to this day.
There is an example
of credit deteriorating and many,
utility

easily be found.
of you who in the past five
have had the responsibility

Those
years

for raising well over $1
the

Pacific

billion

development

tion

confi¬

loss of
industry

such

any

in

bodies, that

your

the

from

Larger Bonded

period

five-year

1949

new

from

corporate issues

investors'
had

one

capital.
the

of

longer

range

aspects

utility credit that over $6+2 bil¬
lion of this $8 billion was raised

by the sale of debt securities and
only $1V2 billion by the sale of
equity securities, or a ratio of debt
to total of 80%.
You are suffi¬

50%

that

debt

it

the

with

familiar

structure of the
know

a

common

time

to

situation.

where

faces

In

the

capital

utility industry to
approximately

runs

equity,

50%

and

utilities

largest

siderably

those

ing

20

Company,
less

per

stock

in

tabulation

on

the

and

mind

investor

is

that

earnings

~

1949

Change

z.tto

2.06

—

28%

11.51

5.80

—

50%

al-

5.49

14.65

2.24

4.36

+167%
+ 95%

to install

1,386,000 new telephones,
patient It has likewise been in the public

a

long-suffering individual, he interest
not continue indefinitely to Electric
$100

business

that

if

$100

back

in

is

under

stances,

the

public utility
finally concludes
all he can ever get

he

and

favorable

that

sible

serious

value

of

his

circum-

under unfavor-

circumstances

able

he

faces

depreciation

pos-

in

the

capital.

that the Pacific Gas &
Company has been able
to raise over $500 million in this
same period to provide over one
million horse power of new generating capacity. On that day when
large amounts of capital are no
longer available to your industry
on
easy terms, the customers in
the areas you serve will be the

Any loss of credit in the utility
industry, serious as it might be

chief losers,

to those who have invested billions

have

in

develop to a very high degree, to
the point where after long and extensive hearings rates of return
are calculated to 1/100 of l%,and
the general trend of allowable

would nevertheless be far
public,
certainly been most important in the public interest that the
Pacific
Telephone Company enit,

more

serious to the general

It has

joyed sufficient access to the capity

markets

be

to

able to

raise

During the last several years we
seen
the regulatory process

rates of return has been down-

ward' During the Past year the
Continued

$500 million in the last five years

on page

The damaging factor was

Chairman of the Armed Services Committee, a hereto¬

(S495,700,000) which this country has spent to strengthen
militarily and economically; an itemization of the sums
spent for military equipment; and the number of the different
kinds of weapons furnished by us to the Koreans (49,000 carbines,
amounts

Korea

rifles, 43,000 rockets, 170,000 rifle grenades and 25-yard
sweepers).
Irrespective of whether the disclosure of such
information is harmful to us militarily, it most assuredly sabotages
43,000

mine

us

on

the

diplomatic

Mr.

front—giving

Malik

colleagues just the ammunition they most desire
ganda machine

representing

and his Soviet
for their propa¬

from other playing-of-politics within and against the
State Department, probably the reducio ad absurdum there is the
naming of New York's Mayor O'Dwyer to the important post of
Ambassador to Mexico, at the behest of Boss Flynn and the local
Apart

political exigencies.
"Politic-ing"
not limited

to

to you

running out at Virginia Beach.

right

very soon.

now,

part of the democratic process is of course
particular territory. Ironically, the very same

organ

Issue

your very

published

a

kind of special Beach

CHRONICLE.

last chance to take space in the Official

exclusively by The
Remember,

COMMERCIAL AND

this Issue acts

as

the official

of the convention and that means a dividend of extra and enthusi¬

astic

readership of

your

rate

information.

REctor 2-9570.

tions

That's

because it's where the N.S.T.A. Convention will be held

And this is

Convention

FINANCIAL

the mighty aggressors.

us as

THE TINE AND TIDE ARE RUNNING OUT!
The tide is

at

once

The

to

firm's ad!

S) phone

us

right now for complete

Or airmail your ad-ccpy and instruc¬

CHRONICLE'S

N.S.T.A.

CONVENTION

ISSUE

as

any

DEPARTMENT.

Only

a very

few choice ad-space locations remain!

day on which the above-cited Wherry-Tydings revelations took
place, in London Prime Minister Attlee was denying the request
by the Conservative and
the

world

crisis,

viously-scheduled

Liberal party leaders that, in view of

Parliament

be

re-convened

presumably harboring political motivation.
if

before

the

pre¬

12—both the demand and reply

date of Sept.

if

THE

"

COMMERCIAL AND

if

America'»

Under the democratic process the damaging results of subsidy25
statism
nated.

and

general

vote-grabbing

no

doubt

can

But it might be presumed that in "Hot

at least be somewhat reduced.




never

be elimi¬

Wartime" they

can

Park

Place

per

significant:

fore "top
of

they

The follow-

political opponent, Senator Tydings,

secret analysis" by the Department of Defense.
Reading
this document in the Senate revealed to all the world the exact

con-

their

Common Share

Electric
in

on

than

1949

share is interesting and

Pacific Telephone & Telegraph-_
General Motors

bear

earned

share

earlier.

years

1929

General

West

Company and Pacific Telephone &

Pacific Gas & Electric

Please

the

on

Pacific Gas & Electric

Telegraph

common

common

earnings,

in

matter of fact, two of

a

Coast, the

did

per

As

ous.

a

Earnings

will

of

ciently

additional
time

deteriorating
companies

invest
the

of

sale

stock

and

Indebtedness

to

The

major part of its requirements by

though

Trend Toward

In

credit.

which cannot finance

company

primarily m-

anc* ^1S ^as no* bee11 so conspicuthe

essential

an

prerequisite for good

taken

place.

1945

broad and

a

equity base is

might

situa¬

had

sound

heen steady and consistent. However the investor is
terested in growth

on

well pause to consider your
dence

ulatory

finance post¬

Coast to

utility

war

to investors and most reg-

as

can

more

business,

successful

a

become

can

move

well

many

in

should come to them in the
of some increase in earnings
dividends over a period of
and concurrently some appreciation in the value of their
holdings.
Investment trusts and

indus-

your

much

a

such

build

viewing the
of two cents

Importance of Increasing Equity

investment counselors, who play
an
important part in directing
witness
their
capital into industry,
regard
withdrawal from the field of rail- growth as almost a fetish.
Your
road financing in the late twenties industry has been properly popuand the fact that they have never
lar in such circles. The record of
subsequently reentered it in any growth in number of customers,
substantial fashion.
output, and gross revenues has

greatest demands for such capital,
taking some
$8
billion of this
total.
It is most noteworthy in

.

,

con-

I hap-

It is a matter of general knowllonger time to
edge to those of you in the utility
reputation than it
industry charged with the respondoes to lose it.
Let us not forget
sibility for arranging financing, as
that
in
1929
when AAA public
It

billion of
Your
industry

Observations

reac-

institutional

provide

their

They

caution you to exercise
effort to continue to main¬

$20

5

a

banks,'- insurance

interest

and

in the United States absorbed over

Continued

will

you

capital structure,

expansion of

which

priate to
every

of

the

keen

a

as

the

most

such as preferred stocks
and bonds automatically qualify
as prime investments.
It is therefore most important to maintain
the attractiveness of your common
stocks as mediums of investment,

This
try. I assure you that this group, form
practically all of whom operate in and
a
fiduciary capacity, watch with time

recent

course

a

vestors who

the

credit is your
years it

Gentlemen, good

curities

member of the group

of

greatest asset.

above United
Government
obligations,
20 years

to be

consisting

apparent

does

point this loss of

companies

States Government

is

your

not to try to find

you

the United

it

on

nor

fidence starts to take place.

likel.y that the risk factor in the
industry will be appraised less
favorably in the future.

15%

only

your

out at what

pen

tically negligible.

contrasted with 36% in 1930. Over

Pa¬

Association.

Gas

is

members

industry,

AAA

on

2. 67%.

has been most
will therefore

by Mr. Muckley made at

address

in

As

industry

your

States
♦An

the

exceptionally
high
regard
in
which utility securities are cur¬
rently held by investors.
Last
year the average yield on United
States Treasury long-term bonds
was
2.31%,
while the
average

country, and
the
investors on con¬

the
experience of
of

the

invested.

you

The pattern of growth in
revenues and earnings has already
parts

to be

with
to

venture

any

in

indeed fortunate in the fine credit

history.
been

is

of

than at any time in your

markets

of

tractiveness of the field

the
hes¬

Pacific Northwest, I have no

fundamental

availability of capital and the at¬

to finance manu¬

years

factured

in

future.

who have struggled

you

many

Standing of Utilities

basic

financing

Columbia

distant

too

Credit

Muckley

E.

know,
whether

else,

anyone

of capital... or 65% of
the added but I urge

any

adversely
not

tion when debt becomes 55%, 60%,

average

another to the

Oregon, Wash¬
ington and British

in

do

first start to witness such

dif¬

per

I

and its future prospects,
opposed to the relative stability

industry,

nection with conversion to natural

It is the

$3.60

con¬

cerning possible financing in

general

you

devoted to ad¬

recommendations

widespr e a d
public
inter¬
ject.

only

to a

a

react

credit.

utility industry enjoys a phenom¬
enal credit rating.
The prospects
of further improvement are prac¬

ings has been spent in exploring
the
various problems connected
with the possible advent of nat¬

the

$26.70,

for

inherent

itself,

capital structures, and calls for higher returns for stockholders.

Under

will loan $1,000

of

mately

of

return

ground
of

more

of

loan

regardless of its record and back¬

lib¬

the

annual

an

thousand dollars
you
consider

risks

eral rates to increase values of their equity securities. Warns
of utilities' trend toward larger ratio of indebtedness in their

west.

will

When

West Coast banker, noting possible advent of natural gas to
that area, points out though credit standing of utilities is rela¬

commercial

today

utility

prime

By JOSEPH E. MUCKLEY*

Pacific North¬

He

$23.10.

Vice-President, Seattle-First National Bank

find

for

ernment

ferential

tively high it will tend to deteriorate unless allowed

that any continuation of the trend stocks are of high quality and well
the last five years must ulti- regarded by investors, senior se-

consistently narrowing.

investor

$1,000 to the United States Gov¬

Northwest

Most of the time at these meet¬

been

The

11

FINANCIAL CHRONICLE

Leading Publication in the Stock and Bond

Field

New York 8, N. Y.

26

12

(720)

The Commercial and Financial Chronicle

M. Jfc Meehan

commission

Admit

to

1%

George S. McNamee will ac•quire the New York Stock Ex¬
Harris

31 and be ad¬
mitted to partnership in M. J.
Meehan & Co., 30 Broad Street,
New

York

Funds Losses

members of the

City,

Heavy

Wellington Fund Releases

on

"Obsolete" Sales Material

changes.

certain

A

hundred

loss

osolete

Exchange

nearly

one

in

mu¬

dollars

sales

by

a

funds'

leased

and

Securities

"The

Policy

tributors.

high

.

Prospectus

from

request

upon

investment dealer,

or

from

.

ment.

terial have been reported

ployees are now covered, Well¬
ington reports, and five million
are expected to be covered in the

SECURITIES

&

CORPORATION

RESEARCH

m BROADWAY, NEW YORK 5. N. Y.

by sponsors and dis¬
tributors smarting under what is
considered an unreasonably short

next three years.

time

now

in

which

"obsolete"

distribute

to

material

sales

in

ventory and in which to
sales pieces.
some

changes

INVESTORS

SELECTIVE

Board

Selective

of

Directors

ot

Fund

has

Investors

declared

a

quar¬

terly dividend of nine cents per share

pavabe

September

on

shareholders

3i,

record

on

1950

21,
of

as

destroying

ti

Dividend Notice
The

funds

about

to

August

the

spirit

but

only

■

the

BRADFORD,

President

Principal Underwriter and
Investment Manager

Established 1894

as

Investors Syndicate

Minneapolis, Minnesota

the

the

mention

Securities

specific

no

enforcement,

and

the

key

date

phrase

by

of

Securities and Ex¬
Commission was carried
Chronicle"

of

Aug.

17,

15.]

the

of

letter

a

to

sent

advertising and sales liter¬
does

not

should be discontinued

practicable and in

no

conform

as

soon

The

later

event

t

Sponsors

and distributors with
inventories in! sales pieces
not seriously affected
by the
early date of enforcement, but
are

those

which

three-

to

normally

four-month

ventory

will

stantial

loss.

pare,

K, :yston<

in

They

new

particu¬

are

distribute

new

refilled,

Certificates of Participation in

INVESTMENT FUNDS
investing tlieir capital

achieve

will

cost

loss

figured

the

loss,
On

in order
quo,

one

basis,

the

industry may be
adequately at two hun¬

dred thousand dollars.

Report Anticipated SEC
National Securities and Research

Corp., which, in its
PREFERRED STOCKS
(Series K.1-K2)

(Series SI-S2-S3-S4)

may

be obtained from

of Boston"
50

Congress Street

Boston 9, .Massachusetts




registra¬

a

tion statement with the Securities
and

Exchange

Commission

main

has

of

Fund,

Fund

B,

features of these

investment

plans

are

flexibility, and
mechanics
tered

by

the fact that the
entirely adminis¬
banks at no additional
are

Accun.uiative

Fund

shares,

There is
itial

minimum for the in¬

a

investment

United

Science

520,000

United Accumulative

cipal

amount

at market

Waddell

Funm Shares

ceeds

for

for

&

the

Reed,

will

pi

of

$200.

be

Inc.

for

used

For du Pont Stock
Registration of the Quinby Plan

less

investments

may

be made

monthly, bi-monthly or quarterly.
Any plan may be terminated at
ainy time without penalty to the
investor.
A special point of the
Axe investment plans is the "investomatic" feature. By using this
feature, an investor who so desires
may instruct his own bank to send
the stipulated monthly or quarter¬
ly investments for the purchase of
shares and merely charge the in¬
The

for

account

National

City

the payment.

Bank

of New

York, principal transfer agent for

Ave-TIoughton
of

and

Funds,

National

America

Trust

for accumulation of

of

E.

Co.

it

I.

du

Pont

became

Nemours

effective

on

announced

was

This Plan
tical

with

will
the

accumulation
Eastman

and
2 000

age

of

has
and

men

mulate

almost

and

actuary

an

in setting

up

to

to

which

income

more

enabled
women

j

every
accu¬

than 40,000 shares of

KODAK.

s ond ffund, (0nc.

local investment

to

Hugh W. Long

Company, Inc., 48 Wall

St., New York 5, for the offi¬
A

cial

prospectus and other de¬

scriptive material about

INVESTMENT

REGISTERED

COMPANY

—

INVESTING

IN

ONLY

BONDS

wasn't

profit-

a

qualify it with the Treasury
Department. A typical small com¬
it was noted, will have av¬
contributions of about $50,year to a retirement fund
which
will
provide benefits of

Affiliated

a

Fund, Inc.

month to employees at the

a

Prosper! us

of 65.

age

Putnam

Fund

Dealers

Fund, in

Oct.

deadline

1

sales material

which

lative under the

icy

to

Fund

nam

the

on

current

may

be vio¬

and
the

Lord. Abbett
New

York

—

Pol¬

then

Chicago

—

Atlanta

Co
—

Los Angrte

com¬

that you can

assume

use

SEC

recent

Statement,

mented: "We

continue

Investment Managers

letter to its

a

underscored

group,

request

Advises
Sales Material

on

upon

ABBETT & CO.

LORD

Put¬

present

material

until

Oct.

risk,

although

wish

to

tion in

avoid

some
any

contemplated

the

in

dealers

1

may

possible ques¬

this connection by confin¬

ing themselves for the time being
to the official Prospectus."
Putnam
was

Fund

proceeding

sible with

reported

as

that

quickly

as

has notified

dealers

that

it

is

re¬

it

pos¬

the preparation of new

sales material.

Axe

Securities

with

necessary
no

revisions

later

than

to

be

Oct.

National's Industry Groups, par¬

and
are

Axe

1,

Automobile,

Railroad

Aviation

Equipment

Shares

reported to have outlooks well

worth

considering in view of the

by

the

Korean

crisis.

cre¬

three

Changes

Corp.

major

has

changes

A

an¬

Diversified Investment Company

in

the distribtuion of the investment

Prospectus

companies managed by E. W. Axe
& Co.. Inc., in order to make mu¬

investment dealer

tual

funds

tractive

to

more

both

useful

large

and

and

at¬

200

may

be obtained from
or

your

local

The Parker Corporation,

Berkeley St., Boston 16, Mass.

small

investors.
...

"special industry situations"
ated

Securities

nounced

ticularly

Makes

Distribution

To

meet

investors;
funds

and

the

problem of larger

institutions,

pension

fiduciaries, the selling

WERT Y -FIFTH

AN Hi VERSA R Y

nearly

to

group

(M anltaiian

your

of

was

cf

v

or

for

stock

common

Co.

iden¬

Plan

by Mr. Quinby in 1938

which

and

be

Quinby

Kodak

originated

Bond

'

&

Aug. 17,
H.
Dean

by
Quinby, Jr., President cf Quinby
& Co., Inc., of Rochester, N. Y.

ATTENTION,
Investors/

stock

common

de

could

$100

invest¬

Quinby Plan Effective

Subse¬

investments must not be
than $50,
but these subse¬

dealer

remarked

and

tnrough
The pro¬

sharing pl^n, but that it could be
drawn
up
by an attorney who

000

ns,

the shares,

ment.

quent

in¬

valuable

400,-

000
and

cost to the investor.

are,

taxes,

cov¬

$5,000,000 of periodic in¬
vestment plans to acquire United

Aug. 11 SEC Statement of Policy,

1950.

Keystone Company

Fund

that

dealers

annual report

the fiscal year ending
April,
1950, anticipated much of the full

completed

Tke

The two

systematic

; iWrite

Federal

"

Fund shares to be offereu at prin¬

are

* "

more

even

Wellington

viewing all of its sales literature,
Prospectu*

Plan

purchase

Axe-Houghton

par¬

balanced portfolio,

for

disclosure

COMMON STOCKS

Mo., on Aug. 15 filed

without running any unreasonable

National Securities Annual

IN

Mu¬

as

capital gain

a

funds

makes

stocks

this

the

Axe-Houghton

in retirement plan use.

NASD

BONDS
(Series B1-B2-B3-B4)

yield from

selling

about

File3

mutual

flexibility.

from

and

tax

to

be

status

noted.

to

have

dealers'

and

the

executive

the

of

underscored

which, with the conseauent boost

SEC pol¬

will

double the original
to

em¬

for

Funds

Funds, Inc., Kansas City,

ering

Investment

of

and

among

funds.

started

shares

divided

more

An. Axe
been

aggregating

United

pro¬

fixed benefits

no

free

course,

Putnam

inventories

an

to

sales pieces which

will conform to the

replaced,

Funds

an

Qualified" retirement plans
of

pany.

the mere s'x
they must pre¬

and

process

Since

help

described

were

plans where

erage

sub¬

a

Axe

apply

now

sales

United

for

ticularly suitable in profit-sharing

a

by

which

dealers the

be

is

supply

individual

an

of their

because

icy.

Custodian

that

confident

can

strongly

were

tual Funds

in¬

carry

normal

experience

larly disturbed
weeks

it

up

necessary

light

PA

or

various

vestor's

advantages

funds

as

than Oct. 1, 1950."

$25,000

fund

one

will

more,

appointed custodian
Axe-Houghton Funds.

for his retirement fund.

gram

in

ature- which

or

re¬

or

concurrent

Bank

come

Aug. 14, which states, "The

$25,000

has been

the

that the lower

single orders for

dealers who wish to

ployer set

members
by the National Asso¬
ciation of Securities Dealers, Inc.,
of

request, out¬

on

feels

Fund

a

will

basic principles of

material

dated
use

investment dealer

prepared

specified for the worker.

basis

to

the

However, the industry is acting
on

formerly applied

entirely sufficient background for

.

the

"The

The

.

the

"It

be
materially
misleading
hereafter
occurs
in
the
Policy Statement.
[Editor's note:
The full Statement of Policy is¬

page

PHILADELPHIA 2,

actuary.

an

has

be sent to dealers

will

in

your

Fund

lining the

Exchange Commission's Statement
of Policy and its Release Number

change

from

costs,

aging."

sued

"prospectus

of

competency

Wellington

An

plan

computed in detail, require

tirement plans.

.

C.

Pension

manu¬

special memorandum, which

1053

DIVERSIFIED SERVICES

INVESTORS

when

Statement,

new

present their program to

facturers.

or

literal adherence.

a

Although
K.

to

a

example of this is the necessity by
one
fund
for
changing "dollar
averaging" to "dollar cost aver¬

1950.
H

and

"two

that

working knowl¬
edge of retirement plans in order

disgruntled
thousands
of

so

quent

informed

were

they need only

were

of

dol¬

contributions

current

Dealers

necessary

because' of

billion

lion dollars annually.

words" which didn't violate

ree

five

being made at the rate of $1.2 bil¬

prepare

insignificant

these

pamphlets

FUND

the

cases,

were

em¬

Retirement plans

about

with

lars,

in¬

new

In

total

million

seven

having several Axefunds, arrangements

discounts which

Inc.

13,000 companies today
qualified retirement
with the Treasury Depart¬
have

dollars in.lunds' promotional ma¬

to "The

capital who
objectives would be

have been made

possibilities for dealers, notes that
are

problem of inves¬

Co.

there

Over

the

Thursday, August 24, 1950

..

&
Savings Association, of San
Francisco,
West
Coast
transfer
agent
for
the
Axe-Hougnton
Funds,' will be agents under the
plans. City Bank FarmexS Trust

of

Inc.

plans

Chronicle"

NATIONAL

Retirement

to

better met by

re¬

booklet,

new

reduced

managed

on

just

Wellington, pointing out
a rapidly growing field
"new and repeat business"

which

inventory losses of
twenty-eight thousand

as

dealers its

to

Mutual Fund in

with

Individual
as

has

that this is

dis¬

and

sponsors

Fund

Plans."

computed by "The
spot check of mu¬

was

Chronicle" in

Wellington

made

material,

the

Commission's

Statement,
tual

of

thousand

funds'

tual

Retirement Plan Booklet;
Dealer Opportunity Stressed

been

moderate

feel that their

By ROBERT R. RICH

New York and Midwest Stock Ex¬

meet

with

tors

Aug.

on

your

To

Mutual Funds

change membership of Samuel K.

has

sales of $250,000 or more.

on

.

Y EAR

l2

Volurr.e 172

Number 4936

.

.

Financial Chronicle

The Commercial and

.

(721)

curities

and

are

Prospective Tax Rises

mainly "special"

issues, which may be owned only
by the account to which they are
specifically issued. They are about
12.6% of the gross public debt at

CLEAVE*

ROBERT VAN

By

Vice*•!: resident, C.

trust

the

by

These

counts.

Government Securities
A sistant

held

other government investment ac¬

The Look Ahead foi

And the Utilities
By B. S. RODEY, Jr.*

present, and aie almost completerly insulated from the influence of

F. Childs and Company

af¬

After

by Korean crisis and consequent rearmament program,

laneous

forecasting trends in Federal Ga/ernment finance,

fect J

research

effarts

Edison

effects of go/ernment borrowing ,
economy.
Expresses doubt govern-,

control in.iaiunary,
shifts

me

the

m

be increased suffi¬
ciently to avoid borrowing and holds "pegged price" policy for
government securities has harmful tendencies. Reviews antiiink. t.^n proposals, ana concludes it is impossible lo escape
mem*

in

re/enues,

all-out

o:

case

inilation
i

if

Even
does not

scale

the

the

witn
11

w

arman tn.
•econo..

and

deficits)

at

toward

Government

wiil

larger

shifted,

be

a

expendi¬
mount,

will

become

progressively
in

components

the

*

Om_
be

acceleration

an

in

socialism.

toward

the

We

trend

shall

not

to

socialism.

of

It

is enough

the

will

talk

Much

to

enues

very

"pay-as-we-go" war.1
Unless the
is held to quite small propor¬
tions and lasts quite a short time,
this is not a real probability.
war

whole, it is more likely

On the

large part of war-connected

a

expenditures will be covered by
bono wing—or by the creation of
new
■

:

money.

Federal

The

Reserve

those

to

economists

anonymous

and technicians in the government
service

splendid opportunity to

a

advance their schemes. That these
schemes
ist

is

their

and

they

anonymous,

pointed

If

defaced

by

tunnels

it

are

we

perfectly justified in asserting the
them

see

At

moles,

of

presence
can

present,

whether

we

not.

or

for

probably

time to come, current popu¬
will
be
concerned

some

cebates

lar

this

individuals, or issue a
market security to in¬

companies,

surance

issues

ditional

of

create

or

Treasury

banks. The

for sale to commercial

familiar arguments

ad¬
bills

about the in¬

flationary effects of the latter, and

effects of the

the non-;nflationary

rehearsed. Com¬
mercial.
industrial
and
agricul¬
tural lea is of banks probably will
recede, as will mortgage and other
loans with the possible exceotion
will

forme",

of loans

government spcrit5^.
credit loans will fall

on

Consumer
more

in

less

<r

with

reduction

a-aRability of consumer
This naturally will be
to
the
length
and
in¬

goods.
related

tensity

the conversion

f

similar

For

war.

ferings

of

t: ns
municipalities

will

materials

duction

of¬

is interested in

going

tails—such

maturity of the first nonmarketable bonds offered; whether

date and

long-term bond should be for a

whether
when a bond should be offered
commercial banks, and should
be for 81/2 or 9 years, at 1%%
1%% — one must give some
of

term
or

to

18

22

or

years;

houg t to the work of technicians
theorists referred to above.

and

They have advanced several new
:deas in recent years, and
they

exhausted their
ngenuity. Innovat'ons in financ'ng methods of the last war now
have been accepted as orthodox

'-ave

by

tend

to

de¬

the

and

civilian

of

output

falls off. By means of

per¬

goods

ome

that still

proposed and
Assuming al¬

be

not

will

others

not mean

does

that

but

of them tiied.

ways/of course, that we do not
rather quickly to the ways

return

of

peace.

of

these

Let

consider some

us

innovations.

gua

antees

"compartmentalization of the debt."
An official
phraase
ties

to

the

is

T^ere

"tailoring the securi¬
"it the needs of the in¬
is

but

vestor

rrsuits in dividing

it

after

will

be

large.

not

only because of increase earn¬

higher

at

ings

hours

but

for

rates

because

the

morer

supply of-

*Se'tion
Van

C

before

eavc

the

of

a

and
1950

prepared by Mr.
by Mr. F. N. Childs

paper

read

Class

of

Graduate

Savings and Loan, convened at'
U-ivrr'*tr o( Indiana, Bloomington,

School

the

the

Ind., Aug. 18, 1950.




in¬

—

second-class

of

sort

-

facilities.

-

new

Maintains last

ex-

far
legal

the face of the bond, and so
is

as

known

specific

no

this discrimination
has been cited, nor has the

authority
ever

point

for

tested.
No doubt it
that vast body of "in¬

been

rests

upon

herent,"/ "implied,"

World

I

War

had

of issue

be

of

that

papers

has

it

raised

been

government securi¬

Taxation of
made

rapid

they

War

tax-exempt; during

were

issues

bond

new

war

during

progress

Before World

War II.

World

were

while
retaining their exemption from
normal; tax, and by the Public
made

subject

emption

1941

of

Act

surtaxes

to

this

even

ex¬

ties

the

of

novation

last

war,

in¬

since

they were introduced first in 1935,
but their material growth was a
oroduct

of

the

war

yea^s.

Sav¬

and

some

of

savings deposit car¬

a

rying, variable

rates

of interest.

This nomarketable debt now con¬

stitutes

of the total gross
In all our prior his¬

26.2%

oublic debt.

their

needs,

considered,

and maturity
thus which they

yield
and

Pegged

the

Probably
innovation
tion
and

buy, if any.
Another
large
debt

ment contains

compart¬

the guvernment se¬

the

on

market.

open

other

In

words,
t

you

the

want

best

S.

short-term
most

significant

most
.was

the

adop¬

or

both

this

of

effects

pronounced

for

Rodey, Jr.

gazing
into
the crystal
ball for future earnings per share,
which will thus enable you to ad¬
vise others.

over

credit

{.

As to whether such

policy is wise and beneficial, or
and dissen¬
for many years to
come. It scarcely will be disputed
the reverse, argument

tendencies

harmful

the

escaped
evils
more

or that
potential

present,

which

reversed

curities

we

the Federal

into

of

flow

the

1949

of

recession

minor

the

wrs

are

se¬

Reserve

Banks and started it back into

hands of the
It

is

a

the

public.
puzzling to reflect

little

1 i

i-

also

e

nates

the pos¬

m

sibility of

any

profiteering

as

mentioned

in

PresidentTrurecent

man's

to

message

Charles

Wigand

Con g r e s s.

know that it is a rap¬

You also

idly expanding industry, not alone
as a matter of choice, but one oil

compulsion. To provide service to
the constantly growing number of
customers in ever increasing vol¬
large amounts of new capital
required to construct new fadilitids;
\
are

Under

previous

excess

profits

45%

rate.

The important point to con¬

taxes, not because they had exces¬

sider

is

sult of

such

the

as

going from 38% to

a

re¬

the

question of whether
decrease in earnings under

a

noimal

conditions

recoverable

is

tax

sive

but

profits,

law.'

'•

1

•..C
.,

The

probably

answer

is

in

inertia,

inasmuch as
growth and decreased unit costs
may offset part of the increased
tax cost. However, the impact of
profits

excess

an

the

of

pattern

along

tax

last

the

quite

is

one

another matter.

there

are

a

lot

of variables and

First

"ifs," "ands," and
particular field.

this

buts" in
of

all,

the

excess

profits

tax is not what its name connotes;

people confuse

many

with

tax

its

earnings.
at

least

used

it

excess

follows

other

two

income
word

profits tax,
the pattern
war,

is

one

steps in our Federal cor¬

income

porate

prof¬
excessive

excess
01)

during the last

of three

the

The
if

tax

a

tax

steps

tax

and

are

the

setup.
The
the normal
surtax.

The

has no place in
The adjective really

"profits"

name.

modifies

the

noun

"tax" and

of

law

credit and

thereof

the earnings in excess

subjected

were

the

fluctuating government securities

really

markets.

elimination of excessive earnings,

to

excess

profits tax, namely, the Invested
Capital and the Average Earningsmethods.
The Invested
Capital
method was not used extensively
by utilities because the Averse?
Earnings method generally vkvi
somewhat less harsh.
Undei <h ?

method the mon

¬

property paid in for stovk
the accumulated earnings ai t

or

ey

and

profits had to be calculated on a a
income tax cost basis, which, or* y
in the most unusual circumstance?,'
the

represented

real cost of tt» ?

taxpayer, due to the fact

that ui-

systems were usually devel¬
oped through merger ands oth i*
tax free transactions in which lbr
ity

the

to

cost

through
vested

in

predecessor

determining

capital

Furthermore,

for
only

cam It

the

in

capital

as

appreciate, all utint*
high proportion of debt.

you

have

a

was

¬

tax purpo , J.
50% of
included an«V

rowed

not

that, pegged

;

.

provided two methods
determining the excess profits

The

Invested Capital

Imponderables

Unfortunately,

the

prescribed by¬

'

.

of

because

of calculation

basis

through the utility rates and how

a

sion will go on

from

dustry

having exces¬
sive profits. It

laws, utilities have paid sub¬
stantial so-called
excess
profits

share,

per

were

the volume of

preclude

regulated in¬

tell them what the immediate im¬

pact will be

when the rate is to be maintained,

is abandoned.

j

'

may

ume,

Now, 1 am not going to insult
anyone's intelligence by trying to

not felt
until 1947-1948. Its epoch-marking
character lies in the principle that
war-time expedient

tions
a

echnique

available
B.

regulatory

"pegged" prices
long-term and
securities, although the

fixed

of

Price Policy

all

of

rates for

;

"profits."
We
often
prices for long-term
The Average Earnings MetWfi
government
bonds were
never speak of a three-part rate in the
Under
the
Average
Earnings
utility business; namely, the de¬
considered
either
essential
or
method the excess profits credit
feasible
in
Great
Britain, even mand component, the energy com¬
consisted of 95% of the average
under
a
socialist
government. ponent and the customer compo-~
nent.
The excess profits tax is base period excess profits net in¬
Fluctuations there -were of such
merely one component of a three- come with a growth factor, plu%
scope as to make movements in
part tax rate, that is again, of 8% of net capital additions, andl
our own securities almost invisible
minus 6% of net capital reduc¬
by
comparison.
Yet
none
of course, if it follows previous pat¬
tions.
The base period, 1936 to
Earlier statutes, I believe,
Britain's troubles,
so
far as we terns.
1939, included years when indus¬
excess
profits
tax,
know,
have been
attributed to concerning

These

all

of

shall

the

are

innovations.

past

but

expect that
be
employed

not

principal

We may

them

hereafter.

wished to

being

are

the affirmative subject to expected
The

worst

an

securi¬

sold

fast.

removed.

was

earnings
particular

whose

It was

again.

on

companies

type

billion,
billion in
April, 1S45.
It was reduced to
$275 billion in June, 1946, but we
shall shortly learn from the news¬

Debt

the

as

$300

to

and

taxes,

to an
Early in 1941

$65 billion.

was

finally

that

'

:

especially
an
excess
profits

$210 billion, $260

billion,

I

—r;.

by successive steps to $125

raised

ties

.the
-

subject

Department,

over-all limitation.

industry

man
charge for its
time, what services.
Ef¬
impact of additional Federal fective regula¬

lodged in the Treas-

was

limit

to

as-

know, the utility indus¬
regulated industry in that

a

financial

new

direction

As you

try is

wants to know at this

loan is¬
authorized by

every

to

late

.

•

municipal
agencies fix the price which the

tax, will be

As

popular

Federal, State and/or
know,

to

want

utility

every

.

...»

Through various meas¬

more

and

as

•

. ►

course,

limit is com¬

recent.

Congress.
ures

'

'

You, of

1

"residual"

or

over-a:i debt

paratively
sued

\'*4

lation..

.

.

of government.

powers

The

profit law reduced earnings
as set by regu-

cess

only with
I below fair return
By fiat, the

eligible owners exclude commer¬
cial. banks.
This fiat is expressed
on

"

marketable

restrictions.

certain

se¬

the
by
good fortune than by planning. It

are

buy

to

so-

which

with
the extra< tory the government had issued
money w:,l be smaller.
In some* its securities with an eye on con¬
manner
these profits
and these ditions in the market; investors
savings w;ll be channeled into the decided which of them best suited

things

The
now

that

segments/ several of
thus removed from the

the

taxes,

all.
debt

not

the debt into

direct loans

Savings of individuals will grow,

profits. Concludes
pressure probably
makes war profits levy inevitable,,
it should be enacted only afterfullest consideration of specified'
fundamental principles.

overly severe excess profits
seriously jeopardize their
ability to raise money needed for

'

doubt will resume the

even

is

curity

control

ings notes were first devised after
government1 the war started.
Together they
practices;
compose (with a few other insig¬
of the 1*mt war in financing war
nificant items) the segment called
production.
nonmarketable debt.
They are a
At the same time, savings will!
peculiar hybrid
having some of
increase.
Profits of corporations,, the characteristics of a security
and

no

this

while

Rodey

warns

mar¬

pos¬

revenues
according to
formula in lieu of siphoning oif

true excessive

Mr.

as

to raise tax

national

interest,

well

as

Warns against law- framed!

ing.

tax will

a

no means

securities by influence of the market.
and by states aid.
Savings bonds were not

supplies of civilian pro¬

as

mitted

reasons

to

substantially.

cost

one

new

corpor

crease

line

in

sharply,

progressive

the

the

be

besides increasing

gap,

the merely technical de¬
as
what will be the

beyond

or

to

wide

But if

camnaigi
bonds

a

interest

the

it

restricted

other kind but

was no

of flat corporate tax

reg¬

possibility of

wartime profiteer¬

any

expansion whicb is demanded by

100%.

purposes,

cludes

this

with whether the Treasury

should
the sale of savings

and

marketable

.ury

a

and

total,

the

of

profits

sibility of

Citing impossibility of utili¬
accumulating earnings for

ties

War I it was, to

called

quite considerable extent
this has been done.
To raise the
and to

gested, would be simply to restore

be

intents

the last war.
It has ad¬
vocated the closing of this gap,

long-term rate, as some have sug¬

arched

of

pattern

a

structure

the

into

frozen

during

our

criss-crossing

^nd long-term

ex¬

hardly
lawn

is

see

we

agement created by the wide gap

Being

cannot

this

but

out,

necessary.

promoters

question.

beyond

rate*

ketable securities.

System

times has pointed to the
difficult problems of debt man¬

rates

will give

•

many

thing.

war

about

heard

be

raising tax rev¬
high levels—of a

between short-term

The present

Depart¬

72.1%

was

after World

all*

Come?

Borrowing to

growing tendency in
recent
years
toward
increasing
governmental direction of every¬
no.e

,

the possibility of

here take time to debate the defi¬
nition

it

194f,
and

But

More

that

oj-proauct of the war will

Treasury

than raising

eliminates

excessive

profits tax

excess

Wigand declares effective

ulation

'

gross

national procuct.

total.

y-

ment.

re-

whole

The

speed

lesser

/and

tures

continuing

a

will
.r

sis.

b

war

be

the

pany

investors.

There

of

hands

beyond

wnat

program.

y

greaier

of

ruli-

a

which

leading utility com¬
emphasizes, greater impor¬

tance of future

certificates,
notes,
bonds,
may be dealt in between
It is only 60.3% of the
As recently as November,

bills,

war, can

wartime.

it is only

Russia,

bec.nnjL g

doubt

situation

Korean

explode into

mw

wae

in

;

Co.

Tax expert of

items,

CHARLES WIGAND*

Commonwealth Services Inc.

Mr.

deducting several miscel¬

rather small in
total, there remains a part of the
debt called marketable—that
is,

specialist in government securities* sees renewal of

to

wart

ana

as

By

Manager Tax Dep't, Consolidated

the market.

In

13

For

confine

will
the

new

ourselves

Continued

on

ones,

to

-

recovering from the worst
we ever had, and base
unfortunately such a tax did period earnings did not represent
produce enough revenue; thus a fair measure of credit for appli-i
Continued on page 24?
Continued on page 24
had

as

an

objective

the

27

try was

depression

)

———

we

those

page

noun

♦An

address

New

York

New

York

by Mr. Rodey before the
of Security Analysts,

Society

City, Aug. 16,

1950.

*

the

An

address

New

York

by

Mr.

Society

alysts, New York

Wigand before*
Security An¬

of

City, Aug. 16, 1950.

SI

14

(722)

The Commercial and Financial Chronicle

N. Y.

Korean War: A Small Down

Payment
By

Our

JOSEPH

istration for

interest cost) is good.

national life, condemns Admin¬

our

by

unpreparedness and waste in defense expenditure.
are ted up with such incredible bungling, and

Says people

to

speak

briefly
the problems which

come

some

of

front

our

nation.

That

most precarious

a

we

who

no

of grow even

in

But

o ie

knows

the

facts

pushed

oppor¬

may

Korea

be

ican

people

are

bewil¬

Since the end of the

few

can

we

with many

They feel they

of

I have spoken

who

make

can

plans for the future

businessmen

know

to

little

tneir

to

many

unable

are

to

The

be

almost

by

sea

uncertain

are

Some

whether

to

to

as

industries
not

or

snuffed out.

The

a

job

We

are

—

their

they will be
men

whether

are

they

I repeat

—

factor

this

have"

come?"

a

—to

go

of

a

the

over

to

ask,

Arid'

solemn

events

we

war—I

Now,

beg

we'

which

engaged in
your

lit¬

a

pardon,

pet

nation

No,

our

po¬

fear

do

nation

all

the

the

United

this little pup¬

not
of

k.ow

our

we

when

outskirts

are

government
17

years

so

ago;

marched

Moscow;

the

to

the

appear

Balkans
the

and

Soviet

the

week;

the

of

rescuer

the

Berlin, thus making
Union

the

dominant

of

power

favored
ter

as

Europe; the nation
by allowing them to

Asiatic

the

the

war

nation

we

Mongolia, the Kuriles

in

the

we

final

Man¬

gave

and

North¬

Our National Life Threatened

whole

na

io

<u

threatened by the nation

nfe

we

is

per¬

through stupidity to be¬
come the huge colossus of
today.
We
are
now
making a small
down-payment on the tragic mis¬

"Partial

Martin

at

Tehran, Yalta, and Potstext

Oak

of

the

North

an

address

by

Rep.

Bluff, Mass., Aug. 19, 1950.




like

so

many

Very properly, they
Where were the 88,000 tanks

had

we

when

World

War

II

was

over?

Let

our

When

truck,
eral

give

me

ment of

you some measure¬

Korean

had oMy 6 tanks (Gen¬
model)
in Japan

consi

were

ered

an

equal

to

Instead,
350

we had approximately
light and medium tanks, none

of

which

T-34
of

on

matched

the

Russian

tank-for-tank basis, and

a

these,

70% were immobilized
shops and were not

We had
the

only

Far

ore aircraft carrier

Eastern

theater—the

We did not have

mere

We

had

troops

in

onlv at

a

single Marine

theater, except
doing patrol

handful

We

only
Japan,

60%

had

of

4

divisions

.

they were
fighting strength.

only approximately 30

plane>

which

can

give

ground troops tactical air support,
so
necessary pi the type of war-.

v*

along
than

more

13-month

or

there

but

is

notes.

still

higher yield than

a

Another refunding

only

one

eligible

issue

the smaller institutions because

2%.

Commercial

banks

they must have

which

have

a

savings

114%, 5%,

114%, 2%, and 214% bonds was
on Aug. 22 by The National
City Bank of New York and asso¬

ciates.

The

bonds

March

due

are

1, 1952 to 2000 and

scaled from

are

a yield of
1% to a dollar price of
9714, according to maturity. Bonds

due

and

on

after

March

callable March

Other

group

of the

members

Halsey,

are

1,

1959

1, 1958.

offering

Stuart

&

Co.

Inc.; C. J. Devine & Co.; The First
National

of Portland, Ore.;
Philadelphia National Bank;

The
R.

Bank

H.

Moulton & Company; Mer¬
cantile-Commerce Bank and Trust

Company; C. F. Childs and Com¬
pany, Incorporated; Hayden, Stone
& Co.; W. H. Morton &

Co., In¬
corporated; Fidelity Union Trust
Company, Newark; F. S. Smithers
& Co.; Laird & Company; Andrews

2%.

return of at least

deposits

have

no

other alternative but to put idle funds into the September 1967/72s.
The floating supply has not been large at

anytime recently, but
enough bonds seem to come into the market at intervals,
yto take
care of the demand which does not mind
waiting until the ^needed
amounts are available.
Switches by non-bank owners of the most
distant eligible obligation have also helped in more
ways than one
to keep market quotations of this bond from
getting too far out

&

Wells, Inc.; Robert Winthrop &
Co.; Rand & Co.; Wheelock &

Cummins, Incorporated; Courts &
Co.;
&

Ellis & Co.; Gordon Graves
Co., Inc.; R. H. Johnson & Com¬

Raffensperger. Hughes
Incorporated; Seasongood

pany;

Co.,

Mayer;
Co.; E.

Sulzbacher,
M.

Edw.

and

Newton

Granger
&

Continued

on page

28

&

&
&

Company,

Lowber Stokes

Co.

John E. Miller i Go.

of line.

Profit-taking has likewise had a stabilizing influence upon
the price trend of this security.
Federal, under unusual condi¬
tions, has sold bonds to keep the market on an even keel.

To Be Formed inN.Y.
John

E.

Miller

&

Co.

will

be

formed

Country Banks Principal Buyers

shortly with offices at 30
Broad Street, New York City. The

Although the larger banks enter the market from time to time
pick up the 2V2S of September 1967/72, the real buying almost
invariably comes from the smaller out-of-town institutions. Coun¬
try banks have been the largest takers recently and there is no

in the New York Stock Exchange.
Partners will be George R. Cook-

to

doubt
as

about these

bonds going into

permanent homes.

It

seems

though the real estate

picture is not quite as promising as it
has been fo> some of these institutions, and as a result
they are
putting funds into the most distant eligible obligation. Banks in
cities

reserve

also in

are

there competing for the September 2Vzs

and not a few of the 2s, which
they will lose next month, have
already been refunded by way of the longest taxable bank issue.
From the quick turn side of the
situation, traders have not done too

badly either with some of them being able to pickup quite
thirty-seconds by moving in and out of the 2l/zs of 1967/72s.
there

a

few

Until

issues which will directly affect this bond, it seems as
though demand will be sufficient to keep it pretty much in the
upper reaches of the trading area.

firm

new

Jr.,

sey,

Good Markets for Restricteds
The

berg.

Mr.

Mr.

Miller

maturities

obligations
results

in

in

which

the

yield

buyers

considerable

Nonetheless,

group.

are

volume

in

the Vies are the
most interested in, and this
the longest restricted issues.

Pension

funds, according to reports, have again stepped up their
buying and this has taken a considerable amount of securities out

membership

Exchange

individual floor broker;
was
with Newburger,

an

Loeb & Co.

Stewart, Scanlon Adds
(Special

SAN

to

The

Financial

Chronicle)

FRANCISCO,

Calif.—

Charles N. James has become af¬
filiated

with

Stewart, Scanlon

mem¬

bers

Stock

of

the

San

Francisco

He

was

previously

Henry F. Swift & Co.

Irving Gersten
Irving Gersten, partner in Ger¬
sten & Frenkel, New York City,
died suddenly Aug. 20 at the age
of 43.

of the market.

Savings banks have been small buyers on balance
although they have been doing quite a bit of selling and switching.
These institutions along with pension funds have been
moving
into the highest yielding issues. Fire insurance
companies seem

to have assumed

a

more

cautious attitude in their investment poli¬

instances), and this has meant somewhat larger

u. s.

pur¬

chases of the most distant ineligible
obligations.

TREASURY

Most Active "Tap" Issues
The

next

1959/62s

bonds.
case

a

issues

in

the

tap

with opinions somewhat divided

of these

quite

active

most

Those that

for

them

to

as

seem

the

to

be

attractiveness

the

1952

eligibility being one of the
strongest points in the argument. On the other hand, where yield
Is of greater importance, there is no
hesitancy to sway from the
2V4s into the longest 2VzS.
The
where

1962/67s

near

some

to

be

of

involved
the

giving

are

one

when

of

not

the

compared

without

with

the

2Y4S
The

the

on

volume

1962/67s

greater competition

has

detracted

1963/68s

with

swops

seem

being

latter into

the time

of the eligibility of the
tap issues is becoming
portant to many buyers of the restricted issues.

With Mitchum, Tully
(Special

NOTES

the former.
The 1964/69s which have
the select list appear to have lost some of their
glamour,
and activity declining in the past week.
Evidently

been

with

LOS

BILLS
CERTIFICATES

followers, especially
However, the larger

items.

eligibility buying from the 2V2S.
the

★

BONDS

likewise

eligibility is

★

the

buyers of the restricted 2V4S make

are

with

★

list

more

im¬

The

to

Financial

With First California

•

Chronicle)

(Special

to The

Financial Chronicle)

Aubrey G. Lanston
6c Co.
INCORPORATED

ANGELES,

Calif.—Harry

L. Lee has become associated with

PASADENA, Calif.—Edward G.
w. Bruce-Kingsmill is now affili¬

15 Broad Street

Mitchum,

ated

NEW YORK 5

BOSTON 9

Whitehall 3-1200

HAncock 6-6463

Tully

Spring Street.
merly

with

California.

&

Co.,

Mr., Lee

Pacific

650
was

,

for¬

Company
1

So.

with

First

California

Com¬

pany, 112 So. Los Robles Avenue.
was
of He
formerly
with
E.
D.
Baring-Gould.

&

Co., 216 Montgomery Street,

Central Banks, which means they are being well
bought by nonbank investors.
Also there is some spread trading between the

various

hold

member,
Joseph Wein¬
Cooksey has been ac¬

as

Exchange.

good tone, despite selling by the

a

the

tive

with

restricted bonds have

will

John E. Miller and

are

of

and

propellate-type combat aircraft—
is,

a

longest bank obligation, the 2!/2% due 9/15/67-72, con¬
tinues to be the favorite issue in the eligible list.' Despite the siz¬
able premium, which many banks do not like to
pay, this bond is
being bought in fairly large amounts (when grouped together) by

made from

Valley Forge.

a

of

self-refunding being done in the market

certificates

comes

yields

premium

available.

that

which

-

the repair

in

operation

Communists

the Russian T-34.

in

is available in

Pershing

that

talk

even

New

Authority

Houses

unpreparedness.

the

we

was

by these institutions, because there is need for

cies (in some

duty in front of embassies.

mitted

takes of

aghast

matchsticks.

for

our

forces

There

There is considerable

it.

stood mil¬

the combined South Korean-

ask:

balance.

$11,180,000

Housing

Park

made

1*4% certifi¬

or 1%%
issue
1%% obligation being
used.
They got the 114 % alright, but for 13 months, and nothing
else.
The deposit banks, the largest holders of the
maturing issues,
again have "Hobsons Choice," and they can either take it or leave

for the

people

Communist forces,
em¬
ploying Russian-Made T-34 tanks,
rolled across Sou h
Korea, bowling

in the Far Eastern

Korea.

Yes,

we

with which

ease

a

of

City

Colonial

are

community had been looking for
for part of the refunding, with either a 1V2%

few plain facts—

The American public was

en¬

churia, Port Arthur, Darien, Outer
ern

woefully

American
a

appraisal of how

at

nation

we appeased at
Tehran, Yalta and
Potsdam; the nation we permitted

to

the

eye to eye on

arms.

Asia.

Russia—

saved from destruc¬

Hitler
of

wnat

Soviet

embraced

the nation
tion

of

imperialist Russia.
future is impeiiled be¬

we

think

entitled to

over

of

intentions

warmly

with

might

States cannot

I

an

sad

a

when

error

conflict

a

proper

American

nation

a

such

ques¬

follow

to

Korean

are

and

power

the

enter

lacking in

the

en¬

that inevi¬

but is is

war,

of

is

those

to

answers

line of appeasement

duty

lice action—in Southern Korea.

the

It is bad enough

a

the

get to' itarily on June 27 with respect to

we

peril?

right—yes;

Today

cause

to

tne'

have transpired.

tle

titled

are

right

a

on

June

what

American

tions.

multiplication

winning

How did

position

h&ve

in

know

to

every

bewil¬

war.

orders

our

has been spent for.

think

tably leads to

after being

years

greatest

People
"How

1

want

the

by the Central Banks shows the mone¬
the trend of interest rates
the importance of the inflationary forces.

could

poorly equipped and without
tactical air support?

They

However,

de¬

are
we

proper

we

This, just five
decisive

a

Korea?

people

Truman's

a

must carry

or

dered.

a

suffer

in

pushed, back into the
little puppet nation of

a

President

not

are

young

foresee

have

world's

could

only 10,000,000 people?
They want to know why
troops went into the conflict

money

gun.

aid

demanding

are

we

Harbor"

American

Colleges

can

military

manding to know how

27,

unable

and

people
how

Pearl

determine
whether
they should
expand their business and provide
more employment for tue
people.

sure

This figure does not in¬

American

boys and girls.
plan a college

I have talked

future.

armed

The 64-dollar question today
is,
did
the money go?
The

this

with many

children.

the

on

where

country plan in¬
telligently for the future? 1 Aiave

parents.

billion

which has since gone to many na¬
tions of the world.

who

government.

our

in 1945,
has ex-

war

concession.

Long Bank 2!/2S in Demand

unneces¬

Government

$95

economic

clude

uck-

so

ded

ervices.

insecure;
mexi

Federal

.he
pei

to

•

in

ask,

cost

enormous

see

of the F&Gs to larger purchase

minor

The

South

loss in human casualties.

sary

Never

average
American felt

before has he been

career?

at

in

pocket

a

military prestige and at
Amer¬

I ask you, can any
man, woman

They

into

rate

tary authorities do not

up

a

small,

a

of

ing in confidence in the

talked

how

out

and

so

child

find

to

empt

before has the

or

pre¬

Russian-trained army could strike
m such strength that we would be

America

dered.

our

our

freedom

e

The

dominate

understand

dicament thoroughly, we must at-

a

lost.

never

To

of

tunity

Hon. J.W. Martin, Jr.

appease¬

our

policy

world.

danger that
t h

diminish instead
of

was

raising of the discount

cate

that

greater.

folly

Opening

investors

The financial

offers only one ex¬
planation of the perplexing situa¬
tion which we face today in the

can

with

the

ment

deny. Frank¬
ly,
we
are
faced

only pray

can

we

tr.e payments will

con¬

are

position

dam, and

upon

non-bank

or

pledges Republican party support to our forces in Korea and
Formosa. Says present Administration can't achieve peace.
I

Offering
York

Refunding of the September and October maturities with
13-month, iy4s was unexpected and this keeps intact the Treas¬
ury's record of having some kind of a surprise for the
money mar¬
kets.
It seems as though
tl^e old policy of what is cheap (in

Republican House Leader, scoring tragic mistakes of Tehran,

City Housing

Bond Issue Marketed

By JOHN T. CHIPPENDALE, JR.

Yalta and Potsdam, winch have permitted, through stupidity,

huge colossus to threaten

Governments

on

W. MARTIN, Jr.*

U. S. Congressman from Massachusetts

a

Reporter

Tragic Mistakes

on

HON.

Thursday, August 24, 1950

...

45

Milk Street

Volume 172

Number 4936

.

.

The Commercial and Financial
Chronicle

.

(723)

Canadian Securities
By
It
at

is

possible that

the

of

threshold

foreign

For
to

this

be

we

of

a

reached

phase

meeting in Paris of
International Monetary Fund

According
there

the

devaluations.

-On

this

as

oc¬

there
the

possible

will

be.

previous

fixed

new

the past

and

almost

renewed

which

places
responsibility

authorities
the

has
of

exchange

this

in

cur¬

that,

order

permitted
it

will

be

depletion

at

has

made

along

the

lines:

and

banks

the

are

latitude

authorized

in

inter-bank

both in spot and future

Canadian

decision

the

and

(1)

position

is
as

change

freedom.
Dominion

the

situation

dition;

been in

the

vestment
a

Never

a

influx

funds

gency
than

estabiisned

trend; the war
throws into sharper
Canada's

ever

position
basic

as

raw

a

con¬

foreign

steady

in¬
as

emer¬

relief

pre-eminent

world

retention

supplier

of

materials; the Canadian

potential for industrial expansion

of

economic

determine

exchange
to

cease

bear

vulnerable

rigid

change.
(3)

brunt of

caused

parity

by

of

influx

of

a

ex¬

foreign

in¬

of

exchange
restrictions,
existing foreign capital in

and
the

Dominion would be
encouraged to
remain.

t

During the week there was a
steady demand for external bonds
but activity was limited
by the
scarcity of supply.
Volume
of

Mass.




con¬

make

can

a

Haitian

to

producing

large quantities

Inc., at Wilmington, Del., on Aug.
22, Harry A. Builis, Chairman of

automobiles

the

crisis

Board, de¬

making

internal bonds

the

on

p r e se n t

all-out

price

controls.

"The impact
ot' the Korean
crisis
our

economy

has

already

resulted

the

a

swap

basis led to

a

future

on

narrower

deliveries.

little

was

the
and

rate

with

course

the

papers,

metals and

Western oils

were

also

strong but the golds continued
remain in the doldrums.

to

to

The

BEVERLY

Financial

HILLS,

Thomas

Kemp

sociated

with

has

Taylor

Calif.
and

Curtis.

conducted

business
name

pany.

of

in

his

Prior

—

own

Pasadena

Thomas

he

investment
under

percentage of production
from civilian needs.

and

upward

lines

some

Harry

A.

Bulli*

product,"

is

Mr.

stockholders.

Price controls and

them

suppress

Builis

told

the

"Apparently

If

there

that

diverted

be,

to

pay

purchasing power
as it should
for the military re¬

at

the

Kemp & Com¬

and

chase

inventories

quirements,

the

will

pressure

relieved without the need for

by many

trols

sult

businesses with

that certain

added

to

sonable

the

items have

inventories

prospective

been

beyond
needs.

re¬

rea¬

As

a

result, the cost of living has risen
moderately and wholesale prices
are up close to their all-time
high.
There

to

seems

be

some

evidence

cilities.
iness

where

and

powers

basis

for

have

to

available

an

the

rationing
'standby'

President.

them

put

into

Will

he

effect

at

once?

"When

the

consumer

"The
several

available

money

will

channels.

-government

should

take

steps to halt inflation be¬

penditures.

our

examine the facts of

economy,

it does

not

appear

er

base

and

all

cially if

tional

We

added

purchasing
all

income

income

brackets

taxes
will

which

aid

terially in inflation control,

effective

present time.

the

and not be confined pri¬
marily to high incomes and cor¬
porations. Excise taxes on a broad¬

not

the

The

take

from

away

for

pay

armament.

should'

power

to

increase

groups

that such controls need to be made
at

should

It

sufficiently

increased

reach
we

production

curtailed

in

order

to

light to expansion

green

facilities, inventories, and
needed for military

pro¬

duction

pur¬

poses.

"Since

the

needed

to

conflict

is

tion

our

to

these

additional

amount

carry
on the
present
not excessive in rela¬

national

production,

indirect

controls should be
effective in stopping the inflation
which has already started.
De¬
mands for
increased
wages • are

beginning so that labor
purchase out of higher wages

the

standard

has

been

get

of

liying which it
The spiral of

enjoying.
must

under

,

not

be

way.

permitted
.

great advantage in.
adequate supplies of food and
productive power to increase

food

a

Therefore

supplies.

prices

need

rise

not

Inasmuch

as

the

important

most

ponent

in

should

be

demands
not

the

the

if

of

food

single

cost

food

materially.'

cost

possible

down

of

living,
hold

to

is

com--

it

wage

food

prices

may

be necesr

an

increase.

"Even

though it

to have

sary

priorities, I

allocations

some

am

do

ancjl,

convinced that in¬

direct controls will

do

the

job if
delay in making theni

not

controls

if

will

be

much

larger
part of our national product must
go for military purposes and ci¬
vilian consumption
needs to be
curtailed drastically."
1

J. F.

be

purchase the product available in

taxes

on

civilian

be

a

Sehoellkopf, Jr.
Elected by Firm.
:

BUFFALO, N. Y.—The election-

"These price increases have led
an
effective demand for price

powers

to

pur¬

of J. F.
Sehoellkopf, Jr., as a di-;
rector and Chairman of the Board

taxes

control

the

or

rationing.
Consumer
purchasing will decline and so
will'prices until a balance is found

analysis of the
situation, Mr. Builis remarked;
to

for

credit

for

plant fa¬
Expansion of private bus¬

give the
of

others

for

should

already

con¬

and

consumer

his

of

once,

have been similar hoarding drives

of

business

only

'and

has

agencies

restraint

necessary

up

larger

effort.

banking

effective

Direct

away.

of

defense

government
its

effective.

unless the purchasing power which
causes
the
pressures is drained

accompanying
shortages in

the

"The
asked

we

pressure will continue to
unless effective steps are

them

consumer

with

and other consumer

cars

tinary

tle

of

with

for

credit,

"Rising prices are inducing peo¬
ple .to buyr People are willing to
buy." if they have money. Infla-

rationing do not relieve infla¬
tionary pressures but merely bot¬

F.

as¬

Com¬

thereto

diversion

hoarding
an

Continuing

Beverly Drive.
formerly with
Barth-& Co., Jones,
Cosgrove
Co., and Paine, Webber, Jack¬
&

hoarding which

hoarding is slack¬ fore resorting to controlled prices
ening, although retail sales are and" rationing.
It should make
drastic cuts in all unessential ex¬
still at a high level."

pany,
170 South
Mr.
Kemp
was
J.

the

military materiel is taking only

mount

that

.

of

ance

our

taken quickly.

that

Chronicle)

become

in

when

The

terms

"We have

place has not changed
product.

it

amount

collect

"Credit for housing can be cut
substantially and the labor and
material diverted to the further¬

to

consumer

movement

on-

poses.

small

away

upon

prices

also firm but readiness
part of U. S. banks to ex¬

were

to
a

-

-

.

The

assess

durables, thus releasing steel and
other materials for
military pur¬

increases

extraordinarily
goods. Steel,
housing
were

records

new

came.

the

and

as

to

alternate wage increases and price

of

andr

-

fast

up

by taxation.

mand for

our
are

and

go

already

"bottle up" inflation
temporarily. Says cost of Korean crisis
could be offset by government economies.

Addressing the annual stock¬
holder's meeting of General
Mills,

wages,

interest,

fairer

for

pay,

peo¬

those

are

down payments and shorter
terms,
would discourage some of the de¬

may

present situation, general and direct price controls would
simply

funds

&

Boston

permanent

a

in

and

Harry A. Builis, Chairman of General Mills, Tells stockholders,
although some allocations and priorities may be. needed in

other hand continued on a
large
scale and especially in the case of
the Dominion 3s of 1954-57. Free

son

Fifty Congress Street

here

*

►

taken

A. E. Ames & Co.

1-1045

*

total

(Special

NY

Ex-

Associa¬

American relations," Mr. Bradford
•
said.

the

Kemp With Taylor Co.

WORTH 4-2400

Steel

interests

structive body which
valuable contribution

are

has

liquors, and heavy industrials still
leading the advance. The base-

Wall Street

States

American

insure

for

ward

Two

Haiti to

cried the need

following the removal

remained unchanged at
101/2 %-9%%.
Stocks
on
the
Toronto board continued their
up¬

New York 5, N. Y.

industrial

vestment capital would be further

the

incorporated

Luc

Gen¬

stimulated

activity in
corporate-arbitrage
market

CANADIAN STOCKS

in the Haitian

tion comprises a sufficient number
of representative commercial and

York, Honorary Vice-

'

valua¬

:'

The

premium

Corporation

and

Wall

Street,
telephone
HAnover
2-5878, with
Douglas
Bradford, Executive Secretary, in
charge.
"The initial membership

States,

Consul'

association has offices

new

60

is

group

instalment

Haitian

No Need for Direct Price Controls Now!

reserves

the

exchange movements

There

Municipal

The
at

President

association,

Haitian

,

-

The

would

on

Provincial

United

the

.

ex¬

change U. S. for Canadian dollars
Government

new

Meckes, United

forces

truer

a

.

turnover in

CANADIAN BONDS

the

Honorary

of

its

.

trade

Healthier
of

is

before

foreign

to

Chairman

Sugar Co., which has
large interests in the West Indian
republic.

Corp.,

George A.

arbitrary revalu¬

the

Natural

(2)

however,

find

Radio

further.

from

never

It

"Tighter

American

rep¬

Directors of the association
above officers and

permitting
to

&

the

change restrictions if.-only for the
following reasons:
*

controlled

country*

has

a

more

favorable

of

Hermann,

E.

is

.

flexible rate for sterling.

a

the

Grimard,

particular

free market would

tion.

in- such

favor

in

level in

ation

trading,
exchange.

Canada to take the plunge of ex¬

of

of

dollar

establishment

other

in

be preferable to

dealer

Haiti
elected

was

Society of the United States.

He

were

elected Treasurer.
Gustave Laraque. Ambassador

ex¬

Canadian

own

would

No

dollar

&

Cable

President.

of

Co.,

was

from

case

Texas

oil

Past

a

President of the Pan Ameri¬

orary
can

Vice-Presidents. David

American

the

period.

war

the
proponents
freedom. In the

to

reports suggest that Brit¬
ain is likewise contemplating the
a

The

port

Recent

of

of

eral in New

a

mul¬

permitted

now

World
in

Small,

Monetary Fund de¬
liberations will give strong
sup¬

the

tiple rates have been largely elim¬
inated

of

emergency is comparable
this country aurmg tne

change

considerable

these

which

role

B.

resenting Pan American World
Airways System, was elected Sec¬
retary, and Robert D. Merrill, of

of the

course

meeting to the question of
controlled free exchange markets.
progress

situation

is

There is every reason to believe
therefore
that
Canada
in
the

Paris

France

the

belief

Frederick E. Hasler

O.

prices.

each

most

are

pensions,

rents, which

the Board of Directors of

on

incomes

salaries,

International

President of the New York State
Chamber of Commerce and Hon¬

Grant, of Grant

The

amount

Electric

the latter institution. He is

and

elected

im¬

should

inghouse

now

bybe¬

once

dollar, and the

ple who will suffer

J before it was merged into
the Chemical Bank & Trust
Co., is

&

h i p

m s

a

Charles E. Ranee, Chemical Bank
& Trust
Co.; J. R.

of the

whose

Mr. Hasler, who was Chairman
of the Continental Bank & Trust
Co.

Ker-

Fruit

as

value

Co.; Kenneth Schmolze, Funch,
Edye & Co., Inc., and J. T. Wil¬
son, IBM World Trade Corp.

Co.; Chandler
S. Mackey, of
C. A. Mackey
&
Co.,
Inc.,

unsettled

this

Canada's

pievious

aban¬

devoted

Ste

to that of

of

attention

toward

strengthened.
behind

II,

present

exchange restrictions
probable that considerable

is

leans

been

A.

get

war

Action

to fi¬
because it reduces the

war

Co.; Gerald T. McCarthy,
Knappen Tippetts Abbett Engineeding Co.; Louis Naetzker, Na¬
tional City
Bank; Elias A. Noustas,
of
the
Haitian
American
Development
&
Trade
Corp.;

Rinehart, West-

.

win of Stand¬
ard

has

E.

been

M.

cautious

of

with

made.

be¬

now

more

existed at the outbreak

In place of
methoa of cur¬

simultaneous

a

has

Korean incident the

position

unhke

War

rency valuation that so far has not

donment

an

longer justifi¬

a

view

me

reasoning

reserves.

hit-or-miss

in

measurably

undue

no

opinion

result of

a

con¬

in

perhaps

conditions, there is appar¬
ently a majority viewpoint that as4

stability has
avoidable delay that

to

of

country

placed

is

Although

Canadian

a

is

busi¬

New
York
banker,
as
President,

world

maximum

led

there

direction

difficulty of assessing

resulted

There

leading

resources.

way

port

of

should

we

need for

we

taxes should be taken at
fore inflation progresses
Inflation is an unfair

to

of

markets, and
employment of

time

diversion of

nance

American

composed

of

formed

This

be¬

we

conditions

in

complete

labor.

most of what

Haitian-American relations.

in

and

Frederick

national

more

the monetary

on

be

Hasler,

body

undue degree

an

the

should

assure

often

adjust¬

level at which

proper

rency

to

of

The

revised

of

detrimentally

postponement of what could prove
to
be
precipitate action in this

times

the

method

ment also

cerned.

at

pressure

here

the

Haitian

Inc.,

interests

because

under

war

tightness

almost

presidency

assumes

industrial

interests

ness

a

Haiti

on

the

representatives

eco¬

created

of

ieeling that the Ca¬
dollar on a discount basis
vis-a-vis the U. S. dollar reflects

lieved

immediately induced

This

tion

Association,

nadian

cation.

in

com¬

at

recent

s

has

controls, for which it is

from

which

Dominon

and

Announcement of the organiza¬

support

powerful
popular
sentiment in favor of the removal
of
bureaucratic restrictions
and

arbitrarily

have produced fresh

parity.
of

of

valuations,

plications,
have

departure

a

form

of commercial

group

reports

popular

upsurge

even

that-

moreover

of

widespread

prestige.

the direction of the
appreciation
of certain currencies vis-a-vis
the
U. S. dollar.
is<

Crown

recent

boom,

Hasler, New York banker*
promote

to

now

the

nomic

casion, however, it is likely that
any adjustments decided will be in

It

is

that

those of last year that
put toe seal
of approval on the ser.es of cur¬
rency

II

north of the border for bold
action
of
this
kind.
It would
appear

are

momentous

as

War

E.

plants is unrivalled elsewhere.

forthcoming

annual

World

on

Frederick

quickly

the

gan

Trade With Haiti

McKAY

based

now

conclusions

the

likely to be just

J.

procedure.

the

at

are

new

exchange

reason

WIJXIAM

taxation

Oiganize to Expand

15

ma¬

espe¬

of

Sehoellkopf, Hutton & Pome-.
Inc., 70 Niagara Street, was-

roy,

announced

following
a
specialJ
meeting of the board of directors.:
The

office of Chairman has
for

vacant

Sehoellkopf

debt.

pay as we go and

increase

We

need

the

na¬

increased

is

agara Share

At the

been

Mr.

years.

President

of

-

Ni¬

Corporation.

same

meeting, George K. I

Coggeshall, formerly a Vice-President, was elected Executive Vice-

,

.

President and J. Fred Sehoellkopf
IV was elected a Vice-President
of the investment firm.
Mr. Coggeshall is
Shoellkopf, Hutton

a

director of

&

tificates, Inc.
Mr.

Sehoellkopf IV, also

rector of the investment

dent

of

tion.

He

Midland

as

is

a

di¬

iirm, will

Executive Vice-Presi¬

Niagara
a

Share

director

Corporation.

•

Pomeroy,
Cer-j

Inc. and of Insurance Shares

continue
we can

materially

some

Corpora¬
of

Marine

16

(724)

The Commercial and Financial
Chronicle

SECURITY
All

Notes

record

tribute

to

planned

an

John

OF

NEW

Summer

YORK

turn-out

the

is

expected

hard-working

Mayer,

reservations

as

The Nominating Committee

of the National Security Traders
Association, Inc., has selected the following members as new offi¬

in,

pour

committee

members, who
with fun and frolic, as well

elaborate day filled

Merrill

Beane,

a

have
to

as

popular

The Annual Golf Tournament between

the Philadelphia gang
Yorkers, for the coveted STANY TROPHY,
by D. Raymond Kenney, D. Raymond Kenney
& Co., and his committee, is in the capable hands of
J. Addison Donnelly, Reynolds &
Co., and Lawrence Wren, Allen
& Co., and promises to be a
hard-fought match.
and

1951:

our

New

own

inaugurated last

Horse-shoe

the

supervision

year

F.

Egan

Hastings

H. Russell

by W. D. O'Connor,

usual,

by Rickie Goodman, Shields & Company,
Singer, Bean & Mackie, and last year's winner, A1
Marcusson (if he is back from Floyd Bennet).

Harry L. Arnold

beautiful

A

assortment

of

prizes has

been corralled

professional shopper, Les Barbier, G. A.

by that

than

plentiful meal served last
Reservations

should

year.

plied.

to

Charles O'B.

Murphy, III,

Chairman, Suite 801, 41 Broad Street, New York 4, N.Y.
Eight dollars, and time payments can be arranged.

of

more

American

actually

sup¬

And it is still well short of

its

own

peacetime

needs, much less military require¬
ments."

North

Korea, the analysis

con¬

tinues, with large supplies
droelectric

coal,

of hy¬
anthracite

and

power

sterner government and

a

inflation, had

a

basis

some

making a
faster
industrial
comeback, and probably has. "Yet,
back in 1947, planned coal
output
was' only about one-half
of the
1944 total; steel and
pig-iron pro¬

duction

goals

fraction

a

likewise

were

of

the

cement

tonnage

prewar

capacity."

only
peak; and
only 17% of

war

was

What further
recovery has been
made, the Board points out, is un¬

known, "but even
tonnages for coal
country,
and

large

as

on

the

a

little

as

its

than

in

this

and

basis;

steel

per¬

one-twentieth

as

(per capita)."

North Korea
out

peak

less

as

capita

per

as

here

as

1914

were

those for iron

large

The

price?

despite

million

assistance

lurnishing

haps

*

mailed

be

levels,

$300

postwar

one-fourth

Saxton & Co.

Free beer will be plentiful as of yore and a promise from the
committee that the dinner will even excel the wonderful and

HiwjP'

midwar

or

for

'

John

problems, has
large strides toward recov¬
in the past few years. But its
production, in almost all cases ex¬
cept food, remains below prewar
ery

Harry

reliable

the

made

of

that old

during

faced with identical

checked

UAhother pbpular event, the Annual Soft Ball
Game, which
is, for the most part, participated in by practically everyone in
attendance who can walk or
trot, will be in the hands of the
competent Harry Arnold, Paine, Webber, Jackson & Curtis, as
Umpire Par Excellence, and our bet is that they are going to have
to tie him down to keep him from
taking his cut at the ball.
as

requirements"

1950

South Korea, "in
many ways

war.

under

year, is again
Iioosier Horse Shoer,

Thursday, August 24,

.

pitching, the surprise of last

Casper, John J. O'Kane, Jr. & Co., assisted
Fitzgerald & Co.

Tennis,
Julie Bean,

.

nese

Outing and Dinner

Lynch, Pierce, Fenner &
president of the Security Traders Association.

NATIONAL SECURITY TRADERS ASSOCIATION, INC.

for

Gala

a

Arrangements Committee, under the capable guid¬
ance of Charles O'Brien
Murphy III, Merrill Lynch, Pierce, Fenner
& Beane, hit the stretch in their
preparations for the Annual Party
to be held at Travers Island on
Friday, Sept. 8, 1950.
A

cers

point to

the STANY

as

NSTA

TRADERS ASSOCIATION

indications

.

"has had

facilities

by

to round

developing

capacity for the fabrication of its
semimanufactures
into
finished

North Korean

Economy Seen incapable of
Waging Modern War Without Outside Help

ir

heavy goods products. It has also
had

to
start
making consumer
goods formerly produced in Japan

South Korea.

or

without

so

Morton A. Cayne

President: John
First

F.

John

M.

Hudson

Egan, First California Co., San Francisco.

Vice-President:

H.

Russell

Hastings,

Second Vice-President: Harry L.
son & Curtis, New York.

Secretary:

Crouse

&

Co.,

Arnold, Paine, Webber, Jack¬

They will be voted on at the National Convention to be held
Sept. 26-30 at the Cavalier Hotel, Virginia Beach, Va.
The Association reports that about 70% of available
space at
the Cavalier Hotel has been reserved, but there is still some
space
at the Cavalier and arrangements have been made to take care of

the overflow at the Gay Manor.
AD

LIBBING
And

now

we

the

to

come

last

two members of

National

our

Advertising Committee, Henry J. Blackford, A. M. Law and Com;
pany, Spartanburg, S. C., and Early F. Mitchell
of the First National Bank, Memphis, Tenn.
Chairman Blackford, representing the
Security
Dealers of the Carolinas, one of our
youngest
affiliates, has contracts already to his credit,
even though he was at first rather dubious as
,

the

to

results of

his

local

efforts.

few

advertising.

At this writing he is but a
below his quota.
Our Memphis

dollars

affiliate is also
the

NSTA

one

but

it

of the latest groups to join
has made known its mar¬

velous cooperative spirit and still has the op¬

portunity of

adding to the
tising in hand.

Early

Mitchell

F.

It

indeed

was

committee

most

observe

to

volume

Burkholder, asking for the
also made
Jack

mention

Egan,

names

of

the

adver¬

to
of

response

your
mem¬

President, Frank

advertising prospects.

this support in his

of

President, has

our next

of

gratifying

bers to the recent letter sent out by our national

letter of Aug. 18,

sure

gone

more

with

me.

Jack,

thanks.

many

I

am

York,

Oliver

of

one

outstanding

Troster,

our

local

supporters

largest ad to date

on

of

Troster,

members
of

perhaps

Unlisted

the

the

and

inside

&

cover,

Summers,

Dealer,
which

of

one

has

their

all

we

now

make

a

double

New
most
our

wire

My thanks Oily

last

our

four

can

all

pass

our

quotas.

*■

To date—$13,692.
HAROLD

'

*

every

NSTA

B.

day and hope

we

SMITH, Chairman




Co.,

if

this

may, therefore, "be of
large proportions indeed."

It

is

knowledge, the
Board points out, that the tanks
and
planes in use are Russian
produced.
"Self-propelled
artil¬
common

laborers

were

In

the

the numbers

fol¬

1,20,000, respectively. Even

rate

erated,

less.

even

has

since

were

been

it is difficult to
state

new

have

of

accel¬

how

see

North

Korea

filled, out of its

resources, both
civilian
needs

its

military

for

skilled

own

and

Because it possesses the bulk of
the hydroelectric supply and
heavy industry, North Korea has
been described

to

trial sector of the divided nation."

dispatches

some

less

also

And

as

from

the

doubt¬

are

same

source.

estimates of North Korean

strength

troop

100,000

increased

double

to

or

United Nations became
Soviet

Chinese

or

trained

Korean

from

better,

the

aware

that

communist-

divisions,

com¬

posed of escapees from the Japa¬

occupation,

Behind

the Board

such

sees

action."

in

were

these

apparent

if

gathering United States

in

Korea

of

what

is

be

to

kinds?

power

matched?

Men

And

well

as

as

chief

Shorn

Moreover,
that

out

dustry

were

of 100,000-200,000, or
large numbers of

army

requires

staff

the

Moreover,
numbers

of

noncombat

in

an

is

a

the

network, of

analysis

country where
still at

so

low

only 410%
a

of

notes,

a

analysis

points
and

in¬

left in truncated and
the

ration of Korea from the Japanese

with which it

viously .integrated.

was

"More

on

with

•

'

■

*

•'

Broadway, New York 5, N. Y.

the

nation, and

minor

civil

even

service

50%

back"

than

few

past

These Japanese, numbering nearly

has

South

have

shown

partly because

of

able

to

strong and

a

central

government

out

carry

autarchy

greater

and

improve¬

greater

a

the

is thought to

It

years.

come¬

in

Korea

ment

was

"possibly

production

program

a

capital

and

investment. "It has not had

a

refu¬

gee

problem with which

to

On

the

outward

other

flow

of

cope.

people testifies to politi¬

dissatisfaction

cal

the

hand,

as

well

as

to

agricultural deficits."
South Korea, on the other hand,
had
"a
severe
inflation, 9

has

loss

of

and

the

people, and
minerals, fer¬

of

power,

heavy

North."

goods
Food

supply
supplies,

the analysis notes, have improved

somewhat,

jor capital equipment in finished
product form, and some consumer

ones

variety of new indus¬
developed, and old
or
expanded.
Production has increased greatly

from

supplies, were in turn imported
Japan.
Hence, even North

levels have in most

Korean

reached.

heavy industry, limited as
it was, never had been integrated
or self-sustaining enough to pro¬
vide

a

ware

a

tries has been

rehabilitated

in the past few years, but prewar

As for

tion

light industry, it

was

Korea.

concentrated

has

no

troleum

And

Korean
moreover,
as

a

Korea,

domestic
or

was

"al¬

in

South

as

a

resources

whole,
of

pe¬

rubber."

plants
were

result

cases

not been

Frank M. Dunn

base."
Frank M.

of the

positions.

domestic /re¬

goods, which were
exported to the Japanese. All ma¬

"Textile, clothing, footwear, food
processing and other light produc¬

in

Korea
better

a

the

semimanufac¬

Korean

consump¬

1

super-abundance

Korea

posts

re¬

South Korea

vs.

North

point in 1944

administrative

from

That

chemicals,

North

current

'

North
made

metals,

formal education. "Fur¬

met

North

heavy

ther, until 1945, the Japanese oc¬
cupied more than 80% of all top
technical

be

of

population

its

armored

tion, let alone original equipment,

was

Japan.

most nonexistent" in North Korea.

the

the

machine's

pre¬

than

of Korean foreign trade

carried

for

necessary
war

sepa¬

education

mass

of

modern

priority. An amaz¬
ing expansion since then, as well
as stock piling,
would have been

tures

supply."

for

In 1948, the restoration of facili¬

other

producers behind the

all

warfare."

rela¬

soldiers

overcome

fraction

a

quirements

more,

equally technical and

complicated

than

more

from

involved.

could

of separation from
Japan, of recovery, and of indus¬
trial expansion, to be now in a
position where it could supply

tilizer,

it calls for both large

and civilian

lines

work

readily

very

produced

tively skilled technicians—drivers,
repairmen, gunners, communica¬
tions personnel, etc., not to men¬
tion

Industry

the

sion of the country and

80%

North

problems

formerly

armored

an

have
the

commerce,
especially
for
Korea, has long since been
virtually
ended.
North
Korea

Army

with,

seems

that

determined

distored form after both the divi¬

formerly

begin

the

both agriculture

Chinese military and economic re¬

an

of

source

staple
food, rice; North Korean agricul¬
ture
is
in
wheat, millet, corn
and vegetables."

economy,

is entailed?

orig¬

hardly
Korea

"Industry is important in North
Korea, but the area is nonetheless
heavily agricultural. South Korea

weapons?
And
further, if the
munitioning on the current or
even
larger scale is to continue,
how large a drain on Soviet or
sources

Korea's

likely

sources."

sup¬

basis

inal development. It

to

only half-truth, according
analysis.

longer-range issues

How much outside

as;

"the key indus¬

as

facts,

port will have to be forthcoming

Japa¬

for

to the

the

of

machinery, which

the

This is

is

benefit

ties "still had

lery and anti-tank rifles alluded
in

was

And it had to do

the

industrial

nese

per¬

sonnel."

,

v

120

(apart from original

equipment)

had had

Advertising Committee

Pershing &

The

ing rendered

that

gross

Board.

or

year

500 and

could

was

our

Conference

skilled

by the North Koreans for

year

the

Chronicle." We

improving

3,000

amount of sustaining assistance be-,

weeks and mail in contracts direct to the "Commercial & Financial
are

and

trained
a

economic

an

have been repatri¬
1946, only 500 experts

In

lowing

waging,
profile
of
Korea
which
has
just been
completed by the National Indus-

Yet,

effort during

and

ated.

thrust it is reported to be

"To

for your continued support.

May

essentials

power

million,

one

according to

cor¬

placed

covers

system and group of out-of-town correspondents.

the

the

of

1950.

all out for

positive results will

Currie

warfare

Behind

than compensate for your efforts.

Col.

lacks

Korea

the

for

sketchy
evidence
would appear that

He

porate ads and in the past few weeks has been in daily communi¬
cation

it

nese

Early F. Mitchell, of our Memphis Security
Club, informed us early in our cam¬
paign he would make a real effort to develop
Dealers

local

available,

trial

Morton A. Cayne, Cayne & Co., Cleveland.
John M. Hudson, Thayer, Baker &
Co., Phila.

Treasurer:

1

the

North

Detroit.

i

From

of

and

"badly

equipment,
run

supplying

down

Japa¬

of

the firm

Naillen &

and

a

cisco
died

had

Dunn, Vice-President
Douglass, Van der

of

Co., Inc., San Francisco,

member

Stock

of

the

suddenly Aug. 15.
been

San

Exchange since

associated

Fran¬

1935,

Mr. Dunn

with

the

se¬

curities business since his gradua¬
tion
from Stanford in 1928. ex¬

cept during the years 1942 to 1945
when

he

served

as

a

Lieutenant

Commander in the U. S. Navy.

\;

Number 4936

Volume 172

.

.

.

The Commercial and Financial Chronicle

VV

fl

HOW

LUTODe

(725)

*»■

_

II

ft

ff"t

_

'

*■'

Views Doll&f Slin&tlOll
By PAUL EINZIG

Commenting

in prices.

but holds this will not lead to policy of devaluation, and,
thus, a possibility of devaluation is extremely unlikely.

1950.

II.

1—Columbia

G.

University Press, 2960 Broadway,
New York 27, N. Y.—Paper—$1.25.
Eating the

Seed Corn

F. H.

—

Harper—Foundation for Economic
E d u c a t i o n, Inc., Irvington-onHudson, N. Y. — Paper — Single

copies

of charge—10

eopies free
$1.

Catalogue of Economic and So¬
cial Projects 1950—United

Nations
Publication—Columbia University

Economic Development of Latin
America

Its

and

Principal

Prob¬

lems—United' Nations Publication

1950

II.

Univer¬

2—Columbia

G.

sity Press, 2960 ^Broadway,
York 27, N. Y.—Paper 40c.
Economic

(Volume
United National Publication

—

II.

1950.

sity
York

devaluation. Last year the talk originated from the moderate trade
recession in the United States, which, together with the devalua¬

Press, 2960 Broadway,
27, N. Y.—Paper—$2.

II.

York

27, N. Y.—Paper—$3.
and

nomic

revival in

acute form is due to a

214
Michigan Avenue, Chicago
1, 111.—Paper $3 (lower price on
quantity orders).
House,

Inc.,

of Human Beings,
Wiener—Houghton

Use

The—Norbert

Mifflin Co., 2 Park

Street, Boston,

dollar devaluation.

a

In

Dakins—Credit

Management

Di¬

vision, National Retail Dry Goods
Association, 100 West 31st Street,
New York 1, N. Y.—$4.50 ($3.50
with order of 10 or more).

on

has risen considerably. Even though the
is still regarded as the strongest cur¬

pear,

its

rency,

Dr.

Paul

Einzig

relative

strength

compared

Chicago & North Western

with

currencies within and outside Europe is no longer assessed
be as high as it was two months ago.

many

to

The

for this

reasons

wave

of distrust, are as

Expenditure of many billions of dollars on rearma¬
military assistance to foreign countries is expected
to result in a certain degree of inflation; prices and costs in the
United States are expected to rise considerably.

large scale.
and

on

It is assumed that Britain and other countries will not
military expenditure to an extent comparable to the

(2)

Clem¬
of the
will
retire from partnership in New¬
man, Baum & Hollander, 59th St.
and Fifth Ave.. New York City,
Stuart,

members

Stock

Exchange,

member firm, on Aug.
31 and on Sept. 1, the firm's name
will be changed to Baum, Hol-

Exchange

lander & Co.
On

Sept.

member

.

of

1 Alfred M. Morris,
the New York Stock

^Exchange, will become a general
partner in the firm and Etta L.
Baum and Florence A. Mansbach,

Mr. Morris was

limited partners.

active as

formerly
floor

increase their

the United States arid that in any case

other countries.

in

broker.

F.

Chicago
been

S. Yantis

Vice-Presi¬
& Co., Inc.,

investment bankers, has

elected

a

director

Radio Laboratories, Inc.,

nounced Aug. 18 by

of Scott

it was an¬

John S. Meek,

Scott President. A director
eral other

the

of

sev¬

companies, Conover has

been active for a
in

pronounced
Strong de¬
until the Great

on iron ore, which does not begin to move
Lakes open in the spring, and on late grain crops,
normally means
low traffic in the opening half. On the other
nand, severe winter
weather in the Northwest is
apt to impose unusual operating bur¬
dens during part of the low traffic
period, with a consequent rise
in expenses. With this combination it is common to
see substantial
deficits for the first half of the year.
This

tion.

Results

year has been no excep¬
far, however, are not to be taken as any criterion
do in the way of earnings for the full

so

of what the
company may.
year 1950.

number of years

underwriting of securities

of firms in the electronics

try and other fields.




indus¬

Last year the road

was particularly hard hit during the winter
by unprecedentedly heavy weather. This year the weather

exception

balance of payments.

been off to

balance of payments would

The American

(4)

be affected

adversely also by the engagement of American industries in re-"
armament as the result of which their capacity to export will

suffer, and there will be more scope for European industries to
expand their sales in the American domestic market.
Since in addition to supplying European countries with

(5)
arms,
ance

the United States is expected to grant also military assist¬
this, together with increased American

in the form of dollars,

imports, will tend to mitigate the present dollar scarcity abroad,

feeling that notwithstanding the assistance

a

given and promises by various members of the United Nations,
the Korean war is primarily an American war. The psychological
effect of this consideration also gravitates against the dollar.
It is argued

that the United States Government might decide
disequilibrium that is

to devalue the dollar in order to correct the

expected to be caused by rearmament, and thus to safeguard the

deterioration. The alternative
be, it is suggested, the using up of the large gold reserve in
of

the

adverse

trade

balances

that

expected

are

to

develop.

however, that the United States
will proceed according 10 the above suggestions. Admittedly it is
conceivable and even probable that as a result of the factors enu¬
merated above the large American export surplus might decline
and even disappear altogether.
It is even conceivable that the
United States might develop a trade deficit. Even so, the situation
one

which would call for

United States
a

can

well afford

deficit could be covered to

a

a

a

The

devaluation of the dollar.

deficit

on

her trade balance.

Such

large degree without having to use

the gold reserve, by collecting some of the American
other countries. The amount of dollars that could

claims against
be mobilized

through calling in foreign credits granted either direct or through
the International Monetary Fund, and through liquidating Ameri¬
can investments, is very considerable.
Many countries which are
expected to develop an export surplus in relation to the United
States

as

a

result

of

American

rearmament

are

debtors

of

the

United States and the
sume

one

which

adversely affected iron
a

interim.
a

payment of their export surpluses can as¬
the form of the collection of American claims against them.

Moreover

in

some

instances

the

trade

balance

of

countries

receiving Marshall Aid or military aid from
the United States may turn favorable, in which case Marshall Aid
or military aid
could be reduced to the countries concerned, or
terminated altogether. This assumes of course that other countries
will not follow the American example to an extent comparable to
the American rearmament drive. If this assumption is not accepted,
are

at present

the other hand, there is no reason to suppose that the relative
position of the dollar will weaken in relation to European and
sterling currencies, even though it may weaken in relation to

on

South American currencies.

was

This

was

just nominally higher than for the like 1949
a
better showing than that, of the industry
^

.

.

More important than the revenue showing was the

ability of

the company to get its operating expenses under better control.
Transportation costs are traditionally hign for North Western, par¬
ticularly during the seasonally poor traffic months.
They have
still been relatively high in the current year but at least the ratio
was cut by
approximately three points in the half year. The over¬
all operating ratio was reduced by more than six points, from
98.2% to 92.1%.
The magnitude of this cut is apparent when it
is considered that each point droo in the operating ratio at the
1949 level of revenues is equivalent to more than 50% of a full
year's fixed charges.
With the high leverage in the company's
capitalization each point in the operating ratio is equivalent to
more than $2.00 a share of common, before Federal income taxes/
The

deficit

amounted

before

fixed

charges

in

the

first

half

of

1950

to

only $638,000, off sharply from the deficit, before
charges, of $4,247,000 sustained a year earlier.
The management,
has estimated that July results will at least equal those of June,
and may well be better.
Thus, the cumulative pre-charge loss of
the first six months will give way to at least a modest balance
available for charges for the seven months.
Last year the state¬
ment showed a net loss of $3,581,240 before fixed charges for the
first seven months.
Profits during the subsequent five months
were sufficient to leave the company at the year-end with income,
of $7,224,836 available for charges, or close to $11 million earned
in the August-December period.

Taking the long view it seems highly probable that the West¬
European countries at any rate will follow the American
At present they are reluctant
to do so because they do not want to cause a deterioration of their
standard of living. Before very long, however, it will be realized

The management also stated that it expected that all

but world not predict full coverage of
Actually, such a statement at this time
appears just as overly conservative as previous years' management
estimates have proven overly optimistic.
The general feeling
among railroad analysts is that not onlv will the preferred divi¬
dend be covered by a good margin, but, also, that there will be
fairly good share earnings reported on the common stock.
Before
sinking and other reserve funds such earnings could well run to
as much as $4.00 a share, keeping in mind the substantial leverage
inherent in the small amount of stock outstanding.
Fundamentally, North Western is still a high cost operation,
reflecting the heavy terminal costs, the short average haul on
freight, the large amount of branch line mileage of low density,
and the large passenger business.
On a long-term basis, therefore/
considerable risk attaches to its securities.
Nevertheless, under

prospective conditions, including indications of a substantial allrail movement of iron ore this year to meet the demands of the
steel mills, the

management

there has been

spect.

As

a

stocks have considerable speculative appeal.

has always
no

been

indication of any important change in this re¬

Payment of the full $5.00

likely to catch up with the pace of American rearmament,

therefore

conservative debt structure and its strong finances;

looked

expectations

The

quite liberal with dividends and

matter of fact, liberal policies are fully justified by

the company's

by everybody that sacrifices have to be made in the interests of
national defense.
Even though the Western European countries

charges

will be covered this year,
the 5% preferred dividend.

example in respect of rearmament.

not

major

movement, the road has
Gross for the six months

whole.

ern

are

ore

far better start than in 1949.

through June
as

one

,

There is no reason to suppose,

is not

cap,

The

that ice conditions postponed opening of the Great
of the latest dates on record.
Even with this handi¬

was

Lakes to

which

Conover Director

of

one
of the most
seasonal patterns to be found in the railroad
industry.

(3) The disequilibrium between prices within and outside the
United States is expected to affect unfavorably the American

individual

an

Hubert S. Conover,
dent

Chicago & North Western has

pendence

follows:

(1) The United States had to embark on rearmament on a very

settlement

Charles M. Newman and

is

dollar, which until recently tended to disap¬

would

Baum, Hollander & Co.

step
The

a

gold against the

American balance of payments from

Firm Name to Be

such

in the volume of the exports.
Allowing for this consideration, it
safe to disregard the possibility of a devaluation of the. dollar.

totally

the free markets

the continent the premium on

(6) There is also

Retal Credit Manual—J. Gordon

.

that

Since the beginning of the conflict in Ko¬

Mass—Cloth—S3.

York

by any means

rea, many quarters in Britain and Europe have
been inclined to speculate on the possibility of

Relations

Labor

to

Clearing

M.

certain

has generally been much more kind to the road.

North

ent

even

different set of circuhistances.

.

New

It is not

materially affect the American balance of payments.

price level in the United States would rise to a higher degree than

Research,

Law—Employer Union Relations
under Federal Regulation—Com¬

Human

more

would

countries, will be determined,
by their relative price levels, but by the volume of goods
available, for export. In such circumstances a devaluation wdiild
simply mean giving away part of the proceeds of the exports .with¬
out necessarily being able to make
up for the loss by an increase

Its present

the end of last year.
a

tionary.

not

recovery in the United States, this wave of
distrust, which was never very strong, disap¬

peared by

It would be a fatal mistake, however, to devalue
the dollar at the present stage when the trend is
already infla¬

months

Paper.

merce

It

suggested in many quarters that, to avoid
this the United States might conceivably de¬
value the dollar. As a result of the business

increases decided upon by
on

University of Illinois, 358 Admin¬
istration Building, Urbana, 111.-—
Guidebook

develop into "a deflationary spiral.

tionary trend.

of Eco¬

Business

and

rising trend of American

part of the burden of their rearmament would be borne by the
United States.
On that assumption it appears possible that the

size

Osborn—Bureau

C.

ards

.

Ef¬
Profitability—Rich¬

Effects of Corporate

ficiency

.

the

international rearmament drive is bound to result in a universal
return of a sellers' market. Once more the volume of
exports of
the United States, and of all other

was

Univer¬

Broadway, New

2960

Press,

sterling and other currencies, threat¬

ened to

ment

Nations Publication

1—Columbia

B.

New

of Europe in

Survey

1949—United
1950.

of

tion

1—Columbia Univer¬

B.

Economic

sity

Agencies

and

grammes

II)

SePro¬

Plans,

unwise if

dangerous defla¬

LONDON, Eng.—For the second time within a little over 12
in Europe about the possibility of a dollar

dollar

in

Development

Countries:

lected

New

indeed be

prices were to be accentuated through a devaluation of the dollar.
There appeared to be a strong case for such devaluation in 1949
for the sake of preventing the
development of a

months there is talk

Press, 2960 Broadway, New York
27, N. Y.—Paper—$3.75.

,

It would

gram

cation

In any case such is the impor¬
American economy in the world that any inflationary
United States is bound to stimulate a world-wide rise

of

trend in the

conflict and resulting rise in gold premium. Foresees change
in U. S. balance of payments arising out of rearmament pro¬

Agricultural Requisites in Latin
National Publi¬

margins and ample reserves as the United States. This means that
even though the relative extent of their rearmament
may remain
smaller, its effect on their price levels is likely to be more pro¬
tance

sible devaluation of dollar, Dr. Einzig

America—United

the increase of military expenditure is likely to affect their economies t0 a relatively higher degree. They have not the same safety

nounced than in the United States.

renewed speculation in Europe regarding pos¬
ascribes it to Korean

on

17

a

also expected.

for

preferred

dividend late this year is *

by most analysts.

If earnings come up to £

relatively large distribution on the junior equity is
On earnings,

dend of $2.00 was

paid.

before funds, of $4.26 in 1948

a

f

divi- \
.

18

(726)

The Commercial and Financial
Chronicle

$4,000,000 to $5,000,000 by
of $1,000,000.

"Journal of Commerce" of
Aug. 15

stock

a

dividend

#

News About Banks

The

Bank

Minn.,

LEW BRANCHES

to

Bankers

and

LEW OFFICERS, ETC.
REVISED

The

Sauk

First

W.

In

joint

a

S.

Bankers

and

statement, on Aug.
Colt, President of

Sloan
Trust

Orie

R.

Co., of New

Kelly,

York,

President

of

Lawyers Trust Co., cf New York,
announced that both

submit

their

to

proposal for

stockholders

merger of

a

Tiust Co. with

a

1941.

of

John

Mr.

Dean

merger

Tassell

Auditor.

as

He

since 1948.

Both

ates of the

men

T. Arthur

of

The

*

Institute

Banks. The

election of Wilford W. Cuddeback

made

was

following meet¬

ings of the directors of both insti¬
tutions.
ord

The stockholders of

rec¬

meet

the

Sept.

on

proposed

it

proved.

operative

14,

act

and

merger,

is

to

planned

to

if

on

ap¬

become

single institution on
Sept. 18. Stockholders of Lawyers
Trust
will
be
paid
$68.09
per
share, which is the adjusted book
as a

value based

appraisal of

an

liabilities at

sets and

business

time,

on

Aug.

it

is

County

Safe

operates

10

At

the

same

planned

to

merge

Deposit

Co.,

which

vaults

at three

Lawyers

will

join

of

Kelly is to become Vice-President
in charge of New York City busi¬
and a member of the Board

ness

is

anticipated

that

Inc., both of whom
will

be

of

James

C.

are

Lawyers

named

presently
Trust Co.;

directors

its

$100

of

the

Aug. 18, of Frank E.
President
and
Chair¬

on

Board

of

*

the

trust

Jersey City

Savings Bank of

died

Aug.

on

of

years

18. He
Born in

age.

Edinburgh, Scotland, Mr. Rendall
this country

serving

in 1888. Af¬

President

as

for

two

.

customers,

and

The offices

of

located

at

new

offices.

Lawyers Trust

111

at

Avenue

four

are

Broadway; Eighth
Street; Empire

14th

State

Building, Fifth Avenue at
Street, and 203 Montague
Street. Brooklyn.
It is expected
34th

that
of

the

Brooklyn office
Trust,
recently
ac¬

from

Title

Trust Co., will
the

quarters

Guarantee

&

be consolidated

in

occupied

now

by

Lawyers Trust Co. Within the past
month

the

quired

Bankers Trust

the

certain
vision

deposit

assets

of

the

of

the

Title

Co.

ac¬

liability and
banking di¬
Guarantee

?!

&

*

9

of

Arthur

International

Asso¬

Dry Goods Importers
World War I he became

during

President of the Hudson City Sav¬
ings Bank in 1.918, having been a
member

since

its

of

1901.

President

board

He

of

of

was

the

Hudson

*

increase

of

norted

Kleeman,
Trust

President

Co.

of

New

bv the

Currency

in

HEAD

OFFICE—Edinburgh

Branches

throughout Scotland

LONDON

OFFICES:

8
49

Bishopsgate, E. C. 2

West

Smithfield, E. C. 1

Charing Cross, S. W. 1

Burlington Gardens, W. 1
64 New Bond

Street, W. 1

*

*

ASSETS

£156,628,838
Associated Banks:

Glyn,

Mills

&

Co.

Williams Deacon's Bank, Ltd.




as

other

to

in

or

losing

or

relation

parts

to

whole.

a

security
takes place

often

as

of

amount

stantially

the

reduced

debt

or

is

sub¬

senior

se¬

final

follow

is

should

be

side

We

which

changes

made

down

reducing

principle

that

more

than

have

readily

on

the

on

up

hesitation

no

ratings,

we

in ratings

because

in

the

is

re-

dividend,

by

we

such

usual

Another

lieve

a

we

in

recovery.

which

particular

but

of

mean

statistical

intimate

motivating

tant.

corporation.

not

view

management.

a

more

to

as

the

practices
Quite

of

often,

in

property account analysis is illu¬
minating in this regard and, also,

raised

matters of dividend

assumption that it
improved position.

business.

However,

we

cautious

are

Hence,

an

absolutely

which

I

status
on

these

raising
obligation.

an

have

before

related

in

the

principles because they in¬

dicate

the

which

approach

take

in

also

because

we

rating determination, and
believe

I

that

the

try.

nonstatistical

the

factor

examine with consider¬
interest
is
the
degree in
we

the

business

the

of

par¬

loss

ratings.

nies

which

ratings

that

supply

some

do

a

smaller

a

during depressions

companies

articles of

the

consumers'

ordinarily suF'er

in volume

than

It is natural for
you to wonder,
this time, just how

realize

bus'nrsses experience wider fluc¬
tuations of sales and profits than
do others.
For example, compa¬

pose and function of

Ratings Are Determined

all

more

fluctuations

which

suoplv

permanent type,
in
demand
for

the

are

determined.

Savings & Loan Co. of
Cleveland, Ohio, has been made

for

which
are
often
wide, tobacco
companies, for exa^nle, and s^Ips

me

of

sistant

Vice-Presidents

as

of

Union

tive
the

by A. C. Findlay, Execu¬

Vice-President, according to
Cleveland

"Plain

Dealer"

of

It is
unnecessary
to attempt to explain or to
enumerate
the
usual
statistical

tests, with which
well

acquainted.

tests

as

and

are

perhaps

refer

I

ordinary income

such

to

account

balance sheet analysis.

We go

beyond this, however, in
testing the statistical position of
bonds by
the study of certain
ratios

V

you

ordinarly
of

utilized

credit

for

the

The Ottoville Bank Co., of Ottoville, Ohio, has become a member

purpose

of the Federal Reserve

count, the

was

worth, per cent earned on total
assets, margins of profit, and fig¬
ures of like import.

announced

President
Federal

System, it
Aug. 16 by

on

Ray M.

Reserve

Gidney of the

Bank

of

Cleve¬

land. Member banks in the Cleve¬
land Reserve District now total

They hold

than

more

of the total bank assets and

86%
about

85% of the total bank deoosits in
the district.
The Ottoville Bank

Co.,

organized

talized

with

stock, has

a

1903, is capi¬
$35,000 common

surplus of $45,000 and

totaling
The

approximately

President

Bank

Co.

is

of

the

Leo

E.

*

*

Effective Aug.

City

The

re

pends

on

National

Co. of Chicago

was

capital of

determination,
to

property

cent earned

a s o n

why

a

pany
own

and, conversely, the
steel, railroad or utility
would be low because
large fixed assets.

Therefore, I

cannot exolain with

brevity

than

anyone

or

&

Trust

increased from

clarity

process

can

any

the

more

enumerate

all

mental processes involved in
the determination of
judgment or

opinion

on

any

subject.

du

all

an

honest

and

recognize

some

that

some

characterized

are

operators

as

as

and

as

Pont

with

dynasty

the

which

in

comparison

speculative
erected

was

Hopsons

and

empire

by the Insulls,
during the

others

1920s.
A

in

study of competitive factors

within

industry
frequently
interesting
industry

an

brings out
information.
quainted
the

AH

with

South

of

the

of

you

are

ac¬

migrations
textile

many

businesses

paper

this

to

and

movement

being caused by certain operation
advantages with resoect to raw
material

to

and

such

labor

costs.

companies did

Now,

not

move

the

South, and those still
maining
in the old
areas

quently

re¬

fre¬

competitively at a
conducting their

are

disadvantage

in

operations.
Another example of competition

between

different

industry is the
thracite
riod

coal

of

phases

record

of

business
and

years

of
the

over

the

an
an¬

a

pe¬

inroads

made

into this business
by com¬
petitive fuels, such as oil natural
gas, et cetera.
I might add an¬

other one, which hasn't really had
the

opportunity to be very effec¬
tive. and that is the steel
industry.
With the doing away of the

basing

points,

the

relation
is

location

to the

going

to

of

steel

in

size of the market

be

future

some

in

the

heavy

industries.
Not
only
do
such
businesses experience varying de¬
of fluctuation, but the am¬
plitude of such swings in activity

important at

very

time

often

brings financial problems of
important character, as
for ex¬
arise

from

ventories and

some¬

expanded

in¬

receivables may be

quite detrimental to the status of
individual corporations.

Intangibles, such
of

franchises,

cannot

but,

knowledge

as

leases

and

patents

fuHy

examined.
that,

reason

pany

may

even

be

It

stanJs

though

reporting

a

to

com¬

adeauate

earnings protection for its indebt¬
edness, such historical experience
is
valueless
unless
there
is
its continuance.
Cer¬
tainly. in the ease where a
patent

assurance of

might be expiring
about

to

earning
Leases

be

lost,

power

of

can

or

a

franchise

permanency

of

be questioned.

various kinds

are

quite

vital.

when

get

we

become

important.

Bond Indentures

left to the last

investment

analysis

a

feature

which

a

reorganization

plan

not

our

organization, at least, considers
important and essential for

most

the

determination

vestment

of

proper
in¬
I refer to the

judgments.

indentures of bonds.
We

most

are

meticulous in

ex¬

amining
such
documents,
for,
after all, this represents the actual
contract

into

which

between

is

being entered
borrower of the

the

money and

the loaner thereof.

addition

an

usual

to

factual

sinkmg

we

of

examine

other

material,

fund,

descrintion

call

such

such

as

features,

the

the

security,

the

items,

In

examination of the

etc.,

indenture
as

for

whether

or

not

the comoany can create addi¬
tional
indebtedness
and
under
which
conditions,
whether
such

indebtedness

can

subsidiaries,

whether

ment

has

clause

an

and

a

be created by its

equal

the

and

instru¬

ratable

hereafter-acquired

property clause, whether there

In this connection. I recaH look¬

ing at

of

have

be

numerically expressed
nevertheless, must be care-

really

The
I

grees

times

they

re¬

factors

others

or

ample, the problems which

com¬

good

railroads

ac¬

ratio

between

By

makes

compared with, say, the steels and

net

example, a chain store business
large sales per dollar of prop¬
erty because they own little fixr"i

often

into peacetime, where competitive

arbitrary

assets,

Even

depressions, the amplitude in the
swing of sales is very small, as

has

the
Bank

on

type of business. For

complete rating

*

8 the

sales

per

the

desirable

Romer.

the

the

as

standards cannot be set
up in this
regard is that, in the case of sales
to property, the proper ratio de¬

of

$1,376 000.
Ottoville

in

such

various commodities.

un¬

manipulators.
Examples
readily come to mind are the

that

all

You

wants

about

of

corporation is subject to
vicissitudes of general indus¬

they
help to allay misconceptions
which may exist as to the pur¬
will

appointment of Richard R.

needs

ticular

detail

some

policy in rela¬

the financial

to

Another
be

must

we

occupies

tion

an

By.

calculations,

financial

to

results to have

poor

builders,
some

casual

a

attempt to obtain

an

less

or

do

we

study

the

raising
ratings,
because
a
rating' may induce an in¬
vestor to buy a security on the

You

be¬

we

it

conscientious

managements

ordinary
short pe¬

that

difference

mean

a

was

management.

particu¬

the

import

no

investments.

of

mean

able,

factors,

a

of

was

as
the continu¬
of profitable operation.

sults and

to

important in deter¬
mining ratings is a study of the
financial practices and policies of
the

to

no

where historical

was a case

I

the

care¬

process

was

to the invest¬

as

Management is vital

is

most

this

being
obligations

justifiable doubt

for

business

factor

were

their

the investor because there

ance

industry trends.

not

de¬

a

lease.

record of income
to

statis¬

quite

are

occurs

as

extend

assurance

This

we

such

nonstatistical

industry,

was

expiration date, there

of the

too

are

device

"industry trends,"
long-term cycle of

lar

harm due to delay may be impor¬

How

As¬

the

for example,

By
the

in

occur

such
the

side.

means

that

rating

investigate
as,

tne

our

bonds

bondholders

derstanding

to

analysis,
in

riod

*

Findlay and Paul F. Smith

deposits
TOTAL

relation

became operative Aug. 4.

697.
3

gaining

mechanistic

addition

known and

period of ten years, but the
of importance was that the

a

this
In

a

ment
position of the obligation
beyond the date of the expiration

we

Therefore,

believing

cvc'e which

the

are

unrealistic.

able

$180,000

stock

a

most

which

First

*!•

Incorporated by Royal Charter 1727

in

evidences that the

the

mental

Comptroller of the
the capital of the

tal, effected by

shun

ratings,

kind

certain of improvement in funda¬

National Bank
of Mercer,
Pa., raising the capital from $120,000 to $300,000. The
enlarged capi¬

The

this

not

County

the appointment
Aug. 17.
Mr. Findlay has been
Bailey to the newly- with
the
Union
Savings
since
post of Comptroller.
Mr,
March, 1949. and Mr. Smith since
previously Auditor, has
October, 1949.

loyal Bank of Scotland

is

of the

to

certain

judgment

There

rating.

provements

itself,

the

nonstatistical
factors
in¬
volved to permit of a worthwhile

Moreover, there may be reasons
to change a
rating if definite im¬

f

announces

Bailey,

is

economy

of Charles F.

created

always decreases

It

are

industry

when

mechanistic

no

well

a

up

emphasize

true investment

a

on

warehouses

lease with this well-known chain
store organization expires in 1951.
Therefore, while the position of
the bonds was well assured

be determined.

can

former

*

of

know of
which

tical

rating

*

An

The

our ratings
ratings, for

mechanical

ful

directors

a

Safety Council.

■known

S.

Colonial

York,

the

of

&

Trust Co., references thereto hav¬
ing appeared in our issues of Aug.
3, page 448; Aug. 10, page 544 and
Aug. 17, page 641.

•

ciation

not

is the type of change which occurs

ground

to

ten

were

lease.

asked

fact, however, that

when there

present

Bankers

quired

of

years

position

Currency.

like

Now, these

termination of the duration of the

from

the

would

mechanical

always increases in

*

Rendall, President of

the Hudson City

learned

many

bad times.

The
J.

to

itself

curities eliminated.
*

ter

By this merger Bankers Trust
Co^ will gain approximately $75,€00,000
in deposits,
14,000 new

stock.

new

•

came

Bankers Trust Co.

investment

*

the

82

the

company

result of

company.

was

a

times and

good
in

?!

Chittenden
County Trust
Co., of Burlington, Vt., announces

Robert

made

change which makes rating
readjustments necessary; rather, it

The

of

new

further

the Aug. 14 Bulletin of the
Comp¬

I

convincing evi¬
change in the protec¬

of

The capital of the Port Washington-Manhasset National Bank,
of Port
Washington, N. Y., was
increased, effective Aug. 15. from

Mcintosh,

of

of

be

is

tion of bonds

4.

a

should

there

Generally speaking, the protec¬

capital

new

became effective Aug.

the death

is

ex¬

for

financially strong chain store or¬
ganization.
However, the impor¬
tant thing about the investment

amount,

the

issue

These

leased to

were

a

Ratings

reasons.

Shore, N. Y., to

The

?!

possible

troller of the

How¬

outside of ordinary business cycle

The stock is in shares

each.

from

that

country.

fact

changes.

some

changes

if

tion

York

capital from $150,000

to $200,000.

Bankers Trust Co.

Brady, President of Brady Secur¬
ity & Realty Corp., and Howard S.
Cullman, of
Cullman
Brothers,
directors

increase

man

of Directors of
It

Side Bank of Bay

of

New

be

ever,

only

Banking Department has
given to plans of the South

been

V

Lawyers Trust Co.
Bankers Trust Co.
Mr.

always

dence

the

$413,100 to $620,000 as
the sale of $206,900 of

Trust Co. offices, with the Bank¬
ers Safe Deposit Co.
Officers and

employees

State

resulted
of

it

bond

a

1945.

throughout

the

4

Bond

❖

by

made

enlargement,

of

the

Auditor.

%

Approval

as¬

the close of

announced

as

Or-

Aug. 16 of the two institutions

will

has

Schelle

stock

Chicago

Continued from page

Assistant Comptroller and Wal¬

as

ter H.

of

raised

for

Nosworthy, President
Savings Bank of

tendent
ment

increase

dividend

has

Bank

the

in

Bank
was

while the sale of
$150,000 of

Na¬

Neb.,

National

advices

Bronx

New

York

Omaha,

States

Omaha,

of

by the State Superin¬
announce¬

of

Stock

Live

C.,

*

agreement
of

the

S.

$300,000 to $600,000; $150,000

the

stock

Vogel, formerly Vice-

Bank

United

has

Banking.
#

from
of

of

first mortgage bonds secured
number of warehouses

gradu¬

are

American

of

if

of

National

1950

which involved the

ago

#

Aug. 9 the capital of the

Spartanburg,

been elected Vice-President of the

succeeds

member of Colonial's staff

a

Lawyers

the

tional

banking house since

Van

Bailey

been

Bankers Trust Co.,

approval

upon

banks wouid

been with the

Bank

of

Commercial

9

n

years from

As

Centre,

of Aug.

as

National

■f

President

16,

Sauk

Thursday, August 24,

.

tension

£

Centre.

CAPITALIZATIONS

:

of

changed

was

long

stated.

#

of the Merchants Na¬

name

tional

CONSOLIDATIONS
<

#

..

.suitable
ment

of

restrictions

dividends,

on

+he

whether

are

pay¬

the

Volume 172

Number 4936

The Commercial and Financial Chronicle

(727)
indenture
lair

be

may

modified

in

Another

a

and

reasonable manner, and
whether the company can sell and
lease back its property.

Just

how

study is
few

vital

this

examples which I shall

sued

bond

a

long ago, a company is¬
large amount of debenture

intrinsic

state

However,

as

Now, this indenture contained
provision

that

neither

the

com¬

nor

need

amendment to this registration
statement was filed, the amend¬

pledge

mortgage
its
assets
without equally securing the de¬
It

is

that

be

to

in

this

is

of

case

was

The

these

numer¬

prospective

debentures

was,

therefore, vitally interested in this
modification
the

of

the

indenture

that there

reason

mental

change

in

was

the

issue, for, if
privileged to mortgage or
pledge their assets without equal
security for the debentures of the
parent, then the purchaser of the
debenture bonds would have

pied

position

a

future

some

initely

where

respect

to

he

def¬

a

position with
mortgage
or

such

pledge.
A few days later, the
company
again amended its indenture, this
time canceling the clause which

thought objectionable and
reverting to the original wording,
that

was

neither

the

its subsidiaries

nor

com¬

al¬

were

lowed to mortgage or
assets

pledge their
giving equal se¬

without

curity to holders of the debenture
bonds.

Now, this is rather an involved
case, but it nevertheless illustrates
a point which I want to
empnasize,
and
in

that

is that

is

care

necessary

studying indentures of
of

sues

know

thus

all

of

in

one

provisions

to

and

position to appraise
their actual investment

properly
positions.
In

their

is¬

new

bonds in order for

be

little

existence

a

similar

a

novel

that

made

praise

was

multitude

a

that

investment

an

to

ap¬

today

one

tician, lawyer and economist, and,
truthfully, this statement is not

While

of

the

hope

remarks

my

primarily

usual

statistical

do

you

data

vital,

but

the

careful
which

analysis
important is the

searching
quite

the

actual

are

most

for

knowledge
exists behind

often

statistics.

illusive
but

uncover

is most

financial

think

we

or

their impor¬

Financial analysis

which

not

I
that

infer

not

in any way overlook
tance.

been

are

type,

subordinate statistical

we

Data

have

faciors which

on

j;hat

Statistical

Such

difficult

and

vital

are

facts

to

to

proper

I

have

like

that

reiterate

to

single

formula

for

With

vestments.

such

back¬

a

ground we have a right to
investment judgments.

ex¬

press

An aspect

rating
which

and

bond

re¬

so

ting,

issued

first

mortgage bonds for the purpose of
raising several millions of dollars
of

capital.

new

certain

perform

nonpublicized

acts

caused

having
a

was,

to

the

by

not

was

profitable enterprise and whose
had consumed consid¬

expansion

of

the

improvements to the funda¬
achieve such

to

as

by

means

indenture,

ing

bonds,

of
by

good rat¬

a

strengthening
reducing the

what

for

riod

parent

company's

li¬

The desire of the

to borrow money to re¬
plenish its treasury was, of course,
perfectly natural, but how could

company

the

bondholder

feel

that

sure

the

which he was loaning the
corporation would not be dissi¬
pated in the manner of the previ¬
money

ous

cash

—that

resources

is,

by

to

vances

more

they give today

pleting

the

a

investor

de¬

and,

things to remember about securi¬
ties is that they are bought not
what they

resources.

the

for

one

of the company

of

risks

but

the

is

there

which

risks

that

no

no

such

thing
for

can

one

clearly.
If
realized, successful
future

is

lie

in

risks
the

Everyone will admit that

investment

less

pe¬

Similarly,

imminent

not

are

but for

over a

ahead.

years

the

future.

will return

as

a

the

risk-

reason

into

see

the

is fully
of ratings

this
use

possible.

continued large ad¬
unprofitable sub¬

Some

"Don'ts"

sidiary?
This doubt

cluding
bond

in

of

was

the

the

resolved by

indenture

issuing

than

contribution

$600,000

was

in¬
the

company

covenant which said that

tional

of

of

to be

an
no

a

addi¬
more

made by

the

issuing company to this sub¬
sidiary. In this way, the purchaser
of the first mortgage bonds of the

Therefore, I should like to sug¬
gest

a

few "don'ts":

Don't assume that the high¬
ratings represent r i s k 1 e s s

(1)

investments.

There

is

no

such

(2)

Don't

fail
A

to

check

ratings




results

stocks

are

we

selling

1

price-earnings ratio.

seems

every

to

reason

believe that a reasonable amount
of further inflation is in the
offing.

financing

and

loans

increasing

will

increase

already swollen currency and
On the other hand, the
demands of the military will tend
to
cause
shortages
in
civilian

is, of course, a
profits after taxes,

there

is

much

that

than

more

con¬

may

taxes

will

be

finitely higher than at present for
indefinite

an

period.

It

is

the

at

moment
impossible to say how
these additional taxes will be
ap¬

plied

and

administered.

Every¬

thing is guesswork and the
work

the

becomes

uncertainty

of

the

ticular

tary

civilian

and

chases
been

by

par¬

for mili¬

go

how

much

for

the

profits

that

its

on

corporations

accustomed

to

pur¬

have

from

expect

normal operations.

there

always

has

will

been

be—as

there

among

substantial

during

the

But

next

18

though
be substantial they may be

they

from 40-50%
after

taxes.

show

some

even

below present levels

Dividends,

too,

may

shrinkage—but possi¬

bly less in

relation

but should

to

profits

—

be large in relation

interest returns

bonds of

on

to

com¬

stock

prices is

even

difficult

more

to determine at this moment than

ings

1946

less

or

all

of

groups

fixed

When

the

higher;

declined.

But

norm.

chemicals

sold

steels

in

lower
the

20

spite

was

For

at

and

was

prospect

these variations there
constant

earnings

ratio

when

in

were

price-earn¬

better

anticipated

somewhat

ings,

at

Steel

should

example,

times

metals

of

rather

a

earn¬

about

10

times, motors of the better grade
10 to 12 times, oils
approximately
15 times, etc. But since 1946 these
ratios have just about halved, and
in some cases are even less than

$6.00

in

United

1950.

It

credit

we

it

with

$3.00

after

We

due

to

bad—that

may

ternational

in

occur

situation.

the

post-war basis? Disregarding

a

all

other

the

factors

answer

forecast the

to

for

that

course

the moment,
question will

of stock

prices.

ratings-

Typical Examples

change

We

mention

a

few

typical

amples; General Motors will

earn

from

hazard

a

that,

guess,

if

we

at

200

or

over.

tal

statement.

'realize

full

have

heard

divi¬

loss in accounts dur¬

accounts

was

at

only 3,500. To¬

the

end of July
7,551,000, and*total deposits,
$11,476,000,000.

The drop in deposits in
July,
1948, when there was no crisis of

well

kind,

any

for

that, due to the les¬

The

were

totally unorthodox

We

years

vaca¬

which,

purposes

place following July 1

ing the month

say

tional inflation that appears in the
economy.
We
that this is' *5

other

and

take

earnings will be (?apital'zed
inversely to the amount of addi¬

the

gain

was

in

sening of the purchasing power cf
the
dollar,
it
is
much
better

433,000.

to

000 in the

"Total

$11,108,000

July,

1949

and

$32,-

was

deposits of $337,000,savings banks were just
it is noteworthy that in
spite of all about the same as for July a year
the inflation since the
Armistice, ago. However, withdrawals in¬
earnings have been capitalized at creased from $305,000,000 to $374,a
continuing lower ratio.
000,000, a trend which was in evi¬
dence in May and
June," the re¬
Small Inflation Influence
port states. "Spot checks indicate
have

As

equities

matter

a

or

of

cash.

fact,

But

there

is

evidence that inflation

no

has

than

been

ever

stock

on

bullish in¬

a

ings. Early in
the

as

That
in

was

stocks

1939

to

for

was

the

power of the dollar

it

Stocks

1949 they declined

outlook

earnings.

prices.

lower

purchasing
half what

was

did

not

cause

sell

at
a
materially
June, 1949, than
they did in September 1939. Also,
in
1920,
while
suffering
from

higher level

World
we

War

in

I

post-war

equity

saw

inflation,

prices

decline

sharply. Moreover, in spite of
present

inflation

might almost
able

scramble

we

have

be termed
for

what
verit¬

a

fixed

our

income

if

a

would

man

refuse

6%-7%

high grade equity, solely be¬
cause
he could obtain a slightly
better net yield on a high grade
municipal if he believed that the
on

a

exempt security would decline

advance

price, and

due

to

the

the

equity

that

shrinkage in the purchasing
may

coincidental,

of

our

withdrawals

were

in

economy and to

consumer

ond

high level
buying during the sec¬

quarter.

tion had

The

Korean

situa¬

effect in accelerat¬

some

ing withdrawals but certainly not
to the extent that might have been
expected.
banks'

drop

1V2

In terms of the savings
million depositors, the

amounts

depositor

to

and

only

about

$4.90

0.3%

of

per

the

$11 Vz billion total deposits."
The Association further
reports
that while withdrawals continued
to exceed

deposits during the first
of
August in many
savings banks, the gap is narrow¬
ing substantially.
two

weeks

"Just

as

many people are saving
as
they did prior to
Korea, but it is only natural that

much

as

a

certain percentage of
depositors

would draw

on

their accumulated

balances for accelerated purchases.
Based

on

past experience, the lat¬
temporary situation which
will rapidly be overcome. For ex¬
ample, heavy withdrawals in Jan¬
ter is

uary,

bor,
in

a

1942, following

Pearl

Har¬

were supplanted by net

gains

deposits

same

power

it

may

be

investors rather

these

large part the effect of the general
optimism regarding the prosperity

as

early

as

May of the

year."

George O. MuIIer

of the dollar.
It

new

constant

enced

selling
Considering the

tions

that

would

the stock

the normal withdrawals for

may

should

we

in

July

of the Korean
situation,
sharp rise in retail sales, and

dends.
Aside

in

view

the

tors.

factual, but apparently a cer¬
tain type of reasoning has influ¬

seen

in

Obviously,

approximately $20 per share this
year.
Its high of the year was
slightly under 100—or five times
earnings. Pre-war $20 earnings
have

banks

expected, according to the
Savings Banks Association,

State

might cause a complete
metamorphosis in any calculations
based solely upon statistical fac¬

sharply in
ex¬

savings

the

been

or

in¬

either

many

in

July, 1948,
$36,704,000 drop was con¬
siderably less than might have

but

mar¬

change—good

any

bonds
and
tax
exempt
bonds.
True, the fear of higher taxes has
given an additional fillip to tax
exempt securities, but we doub';

Below we shall en¬
large upon this subject. But now
we raise the question: Will stocks
capitalize earnings on a prewar or

Savings Bank Association

Deposits

of course, disregarding
or
favorable in¬

are,

fluences that may affect the
ket

prices.

for the first time since

depressing

any

stock

seems

a

New York State declined

times?

argued time and again that stocks

cheap.

higher

contends, however, $36.7 million
drop in July was less than ex¬
pected in view of Korean crisis.

taxes next year, will the
earnings
be capitalized at 6 times or
12

bearing securities of the highest
grade—preferred stocks, corporate

an

State

over

selling at 38.
During the last war its average
earnings were slightly under $1.50.
If

that

Savings Banks'
Deposits Decline

States

somewhat

does

unlikely,
complete change
psychology.

mass

N. Y.

is

they normally were. On
historical
basis, it has been

half what

cause

if at 20 times

50?
earn

have gone up during the past
year
and a half on the basis of earn¬

earnings
ratio

45.

sell at 30 or,

past

is

to

ratio.

were

It

year.

fluence

stocks had capitalized earnings on
more

at

in

approximately

this

If, due to causes
above, its earnings
only be $2.50 in 1951 will the

per se

a

earn

share

per

Pre-1946 Ratios

Prior

The

and

contrac¬

a

compensate,

and

enumerated

little

be imposed.

should

$3.75

the type of additional taxes to

is

earnings.

unless there be

deviation

a

—

face

not
encourage us to believe
further inflation will

earnings be mul¬
by 10? Union Car¬

or

taxes

we

Historically, this

much

any

The government will

use.

allow

not

of

industry will

purposes

how

to

as

production

guess¬

involved

more

war

the present

on

increased

tiplied by 5

earnings,

in¬

share

a

to

stock. Will these

stock

a

Due

lower profits,
tion of

of

go
for
work, and that taxes will be

may

There

question of net
as

high level of

will

coming 12

months. The combination is bound
to result in
higher prices.

siderably higher, its earnings

tax

should be a signal to investigate.
received some assurance
(3) Don't assume that similarly
that the large additions to the cap¬ rated bonds are identical. There
ital of the company would not be are only nine rat'ng symbols and
devoted
entirely to finance the there are thoucands of bonds.
operations of an unprofitable sub¬
(4) Don't misuse the lower rat¬
sidiary enterprise.
ings.
By their very definition
company

unemployment; there

thing.
frequently.

production

selling

on

est

its

of important

were

an

the

probability that at least 25%

bide

ket

by methods which

or

instrument

the

make

sirable

erable amounts of capital, thus de¬

quid

mar¬

However, the extent that lower
profits and dividends will affect

Because

good rating, quite

a

company

subsidiary which

a

stock

buyer.

incidentally, one which is more
large easily saleable by the underwriter.
One
of
the
most
important

a

obviously to

on

parable grades.

Now, the necessity

for such financing

extent,

influence

often most beneficial to

are

importance of
often

business which

our

services

valuable

the

of

generally recognized is that

not

m

securities,

drop to $10

months at least.

and

amount of the proposed outstand¬

back,

Effects

ability which devotes all its time
attention to the study of in¬

no

normal

a

There

commercial

industries, in view of high
production and in spite of onerous
taxes, over-all profits should be

we

at

the

as

page

rating bonds.
What we do have is
an
oiganization with specialized

the

while

its

While

should

well

as

should be beneficial to all.

prices. Of this we may be
confident—there is little prospect

judgment.

instruments.
a

have

prospect

sometimes necessary in investment

quite

Market

All of the above is

fac¬

overdrawn.

are

company,

Stock

production.

of

buyer

Earnings Ratio oi Equities

of

combination of statis¬

Importance

the
of

that

goods, at least for the

pected of

a

by

seller

Inflation—And the Price-

en¬

of

properly

ly

as

not

find

deposits.

is every prospect of

other

Another

is

from first

had to employ the judgments ex¬

nature

manner,

of

utilized

present-day profits

proper¬

our

it would otherwise
occupy.
can
be seen from the above

remarks

desired, for, if used

Deficit

Continued

to

mental security of bond are made

strictions

be

purpose

definite

a

One

provision

a

shall

They have

per¬

imagination

of

to be

to

to
how to make
money. We

one

time in the future.

some

Therefore, I believe that an un¬
derstanding of ratings is greatly

like

properly.

protective

are

to

are

Their

show

of

strain

value to the true investor.

kind

It

many

pany

or

busi¬

long-

would

ratings

devices and

securities,
unsecured, rank¬

financial

occu¬

might,

time, be in

subordinate

which

indenture

or

which

funda¬

a

the security of
the subsidiaries

that

I

know, however, that they will
help to preserve capital if used

are

sional
elections, and our Presi¬
naturally places the in-'
dential election two years
vestment instrument in a position
hence,
assume
particular significance.
distinctly
subordinate
to
that

for

were

at

The
this

was

a holding
com¬
things which it

only

subsidiaries.

buyer

tne

e

They

conclusion,

such.

the

entering into the lating of a
security. Not long ago tne remark

covenant.

new

being the stocks of

owns
ous

this

"subsidiaries"

company

the

in

noted

word

eliminated

pany,

of

tors

the

This

of

countered

or

bentures.

of

much

a

impression

issuance

have

riod

an

was one to the
effect that the company would not

study

in

realize the importance of such
a
provision in the event that a pe¬

without equally securing the
debenture bonds. A few days later,
sets

ture, among which

ea

the

posi¬

ing ahead of the debentures.

any

ment, among other things, contain¬
ing certain changes of the inden¬

careful

In

contract itself.

either secuied

of its subsidiaries
would mortgage or pledge its as¬
pany

favorable

mitted

a

strong

indenture-resulted

in tuis

exhibit.

an

a

ness

do

ratings

indicate short-term risks

a

sub¬

19

seem
that they are
transmuting •
present earnings and
enlarged as¬
sets
of
corporations
into
1939
dollars, and capitalizing them on'
that
basis.
If
we
apply
that *
formula to

that

assume

indicated

less

filed

position of

Don't

analysis

It

strength of the

was

(5)

the

investments

terprise

bonds.

the

.

or<|e| to ascertain

of

indenture

they represent
ject to change.

was

cycle swings.
term judgments.

the

At the time of the filing
registration statement with
SEC, a copy oi the proposed

it

that^f a certain oil com¬
is a Srcttig petroleum en¬
and 3Jie§ usual statistical

tion.

its

where

examine the in¬

was

pany.

men¬

so

a

in

fundamental

tion.

Not

carefiiSiy

denture

indenture

be ascertained from

can

vital to

instance

more

than

the fear of inflation. For, it would

George
with
and

Peter

O.

Muller,

P.

formerly

a

associated

McDermott

&

Co.,

partner in the New

York Stock Exchange firm of Tate
& Hays, died at his home

Aug. 17.

.

20

The Commercial and Financial Chronicle

(728)

Continued from first page

reached,

now

Now apart

As We See It

situation

the

fiat to thwart the forces it itself
sets free as well as those which emerge from the situation
fcself. This basic idea is implicit in the President's request
for limited powers, it is clearly to be seen in the insistence

of the

of Congress upon the
ident's acceptance of

could

rather

the

to

depend

upon

situation it is not
he has

ever

suggestions

obliged to disguise their exactions in the form of pensions
They are now beginning to go back to their
favorite pastime, and are, one by one, asking for more
cash on the barrel head. Obviously, if one defines inflation
as
having anything at all to do with higher prices, then
the disease is also approaching from the farms.
first the

How

consumers.

does it

happen that
they can so steadily and so persistently demand such a
variety of goods? How does it come to"pa$s that they
have been—in such

trouble?

It is

foolish, and

rush to

get goods ahead of
practice to say that the housewife
is the head of the house, when he rushes
a

common

so

into the market for

and the like.

But such expla¬
The enlargement of
the volume of mortgage and consumer credit is likewise

nation

car

a

explains nothing, of

course.

Now, of course, no one in his right
senses would
deny that with the situation developing the
threat that is now obvious, it is rather natural for
many
people (whether wisely or not is another question) to
a

common

scapegoat.

rush into the market and make

The

,

But there

overlooked.

are

Why and the How

two essential facts

The first

is

that

which must not be

the controls,

actually existing during World War II, are
responsible for no small part of the hoarding now going
even

It is true, too, that there has for

on..

been

a

good while past

growing volume of loans both to consumers and to
buyers on mortgage. It is certain that an appreciable
part, a material part of the demand for these things, is
an
outgrowth of this fact. Yet, when one stops to think
of it, he realizes that
except where the funds loaned orig¬
inate with the commercial banks, the
lending is in essence
a

home

from

one

consumer

to

another.

One

man

borrows what

another has saved when he obtains

a
mortgage loan from
insurance company; the same is
true even when he
buys on credit, or on "the instalment
plan" with a finance company supplying the funds—pro¬

a

savings bank,

vided of

course

the funds from

or

an

that the lender in turn has not obtained
a

commerical bank.

the ordinary
"liquid assets"

of

ernment

man or woman,

built up

a huge supply
deposits and gov¬
obligations) during the inflation days of World

(currency,

bank

War

II, and while he has been spending freely for the
past three years or more, his supply of cash or assets
instantly convertible into cash at fixed values has been

increasing. There is little room for doubt that the con¬
sumer of
today could stage, and is in fact in large degree
staging, an overwhelming demand for many, many types
of

goods without borrowing

dollar. Loans as between
inflationary only in that they tend to
increase the speed of turnover of
deposits, and they are
possible on an inflationary scale only if the volume of
"liquid assets" has been inordinately enlarged by infla¬

consumers

a

are

from first

the

years' growth has taken place in
the

A

big

of

aggressive, grasping union of today is in

Accessory
Industry Securities

more
history.
In the
industry had its really
growth.
That
is
the
time

few interruptions,

a

there

was a sharply rising under¬
lying trend for most of the decade

ended

in
1929.
After
that,
of
the country went into the
depression and the automo¬

course,

big
bile

industry

than

more

shared

history

very

con¬

siderable part a creation of the New Deal
and a darling
of the Fair Deal?
Whether the situation has reached a

stage where the government is unable to do very much
directly and at once with these labor leaders, we are
unable to say, but we are
quite certain that the difficulties,
whatever they are and whatever
magnitude




they have

big

bled

in

and

cars

than

ords by 10-year periods will bring

interesting points.
In
10-year period 1920-1929 in¬
clusive, the United States built
nearly 36 million cars and trucks.
some

the

counted in
in our his¬

just short of

industry, then, is

the

In

in

than

either

Of

decades.

the

of

following

senger

and, to

cars;

Those

ing

feasible

be

and

truck

four

years

output

was

curtailed.
We

down

break

can

riods further

those

pe¬

follows: The

as

big¬

gest single 5-year period was the

automobile

little

a

was

was

the

real¬
1945

small.

the year 1929—which estab¬
lished a record that prevailed un¬
last

year—United

duction

totalled

5,400,000

cars

less

lion).

The

1949

volume

in the

was,, as

truck

Basic

ing the present 12 months. There
been
other
estimates
by

have

leaders, and these average
Attain¬

in the 7-7% million range.

these

needs may

forecasts

how

much

will

de¬

military

interfere with civilian

production.
For the immediate
future, the demand side of the au¬
tomobile

picture should certainly

hold up.

measur¬

basic

the

there

13 persons.

about

long-range

to about
Back in 1920,
car there were

By 1940, regis¬

increased

had

the

to

where the ratio was about
people for each car. Last year

established

fluctuations

that

have

of

a

ratio

the

1949

record

new

in

den¬

4.1

was

Here

registration
The

mind.

100,000

should

that

data

the

with

reviewed

be

foregoing

in

only

8,-

country had

passenger

basic

the

cars

registered

in

1920, and in 1930 the total had
climbed to practically 23 million
In

units.

nearly 27.400,000
registered,
while
in

1940,

were

million

36

over

try

stability is not

—

of

one

the

ments over

fre¬

in

of the

motor

were

car

than

is,
one

family

tween 1929 and 1932. there was an

even

drop

in

unit

volume

approximately

75%.

In the

1930s,

severe

decline

another

curred.

volume

of

late
oc¬

Thus, in 1937 automobile
was

the second largest in

the years, an increase

"two-

families" has been in evidence

vehicle division. For instance, be¬
extreme

develop¬

number of so-called

—that

families
car

units
more

(a

owning more
relatively few

have three, four
cars

but

these

or

mnro

the

traffic

daily

use

cars.

large

number

of

super¬

vehicles still rolling has

frequently

mentioned

in

further—especially if the country
enters upon another shortage pe¬
riod caused by military demands.
While
the
industry
for
many
months now has been setting up
new high records
both in respect
to

sales and in the total

car

ber

of

vehicles

nificant
a

that

in

there

automobiles

war

still

num¬

is sig¬

it

use,

remains

substantial number of pre¬

very

ancient

The

the road.

on

still

cars

for

account

abnormal ratio of total

an

regis¬

cars

tered.
A few

figures will help to point
An estimate made at the

that up.
end

of

1949

senger

indicated

cars

pas¬

old

years

14 million units

some

of the total in

39%

or

that

ten

over

amounted to

That

use.

be compared with 1941, when
million

five

were

similar

of

cars

that was 17% of to¬
tal registration at that time.
Since pre-war days, a substan¬
age;

tial redistribution of age brackets
has

taken

sents

lation

place

this

and

repre¬

important aspect of the

an

The

outlook.

demand

has

a

car

popu¬

of

proportion

large

"young" cars—that is, four years
of

age

less.

or

this category,

In

about 14 million at the

were

there

1941,

about

or

million

12

were

all

of

41%

cars

then

those

registered, in the "young" bracket.
The
great
deficiency,
then,
comes in the middle-age brackets.

condition stems
of production
1942-1945
period.
This

Naturally,
the

from

the

in

this

cessation

factor

same

is

mand prospects
and should

directed

is

inter-relationship of used
and

mand

Still

high

car

Potential

average age

potential

satisfied

for

to

the

car

de¬

sales trends.

Market

of vehicles

suggests that there

use

large

a

new

Large

a

The

de¬

the

into

tied

for good used cars,

be kept in mind when

consideration

market

passenger

is still
to be
For

cars.

example, in 1941, the average age
of

passenger

for

trucks, it

At

the

end

8.4 years

in the

was

5V2

years;

about 5.6 years.

case

for trucks

and

cars,

cars
was

of

1949, on the other
the average age was about

hand,

mated at 7.4 years.

of passenger

it

was

esti¬

In other words,

in the United States had

than

nnp

rar

in

1946.

vehicle now in use is
roughly two to three years older

Dur-

the

than
of

unit at the end
itself implies a

typical
That

1941.

in

large

replacement

with

allowance

life

of

span

demand, even
the
greater

for

cars

today

than

in

earlier periods.

are

in the "two-car" cate¬
gory).
According to the CrowellCollier studies, 3% of the urban
grouped

families

jammed

limit

the average

other

among

vio¬

the

and
to

indications, this factor will prob¬
ably be with us for quite a time

in

of

some

are

centers.

connection with prospects for au¬
tomobile sales, and from present

persons

passenger car.

per

counted.

quently taken place in this indus¬
characteristics

The

annuated

ownership—at the end

car

1949.

Characterized by

passenger

some

beginning of this year, or 39% of
whole
care
population.
In

amounted

5.4 persons per car.

same

the

were

for each

The

Texas and

metropolitan

tend

private

there

Factors

Long-Range

of

One

cars

Growth

was

factors, naturally, is the growth of
the domestic population.
In 1930,

sity of

upon

S. output,

ably higher—around 11%.

vehicles

of

hand,

produc¬

The ratio

exports to U.

other

the

on

4.8

dur¬

of

may

for example,
declining trend

a

abroad.

sent

was

Wilson, President of General Mo¬
tors, estimated that some 8 million

pend

to

Cali¬

which do not have the

space

there

year,

of the passenger car

point

completed

ing

in

registrations

Just before Korea, Mr.

ment

helps

cars.

the
latter, dependence upon
local transit systems, lack of park¬

or

foreign division, only about

trations

trade

one

the postwar period,

in

which witnessed

lion units.

be

approached

Except for

Last

output.

previously stated, around 6V4 mil¬

may

seldom

been

pro¬

(which

trucks

and

shipments

than

wholesale value of $3.4 bil¬

a

1920s

something like 122
million people in this country and
at that time, total passenger car

States

little

a

the

exports recently have not been a
substantial factor in the total U. S.

prac¬

In

til

import.

20 mil¬

over

built, but

very

factors,

fairly big years
but these

some

years

of

tically all of this volume
ized after Jan. 1, 1946;
contribution

two

million

were

were

in

back

that

export

19

through 1949,

true

for

tion

lion vehicles

it

more

point to be kept in mind is

there

3%

In the half decade

on,

into

of shorter term

the

is

almost

units turned out in the five years

Later
go

other

mestic market for its sales volume.

assem¬

ended in 1939.

main
touch¬

do¬

with

were

the

of

pends almost entirely on the

then

There

bled.

pas¬

degree,

de¬

1929

in

million

22

of

business

that

vehicles

ending

one

still

fundamental significance

of

some

the meantime.

to

are

a

worth

to

certain

on

have

close

few

a

at the outset.

on

will

are

production

for
and civilian
substantially

you

some

that seemed

factors

World War II, when passenger car

suspended

psy¬

for trucks too.

It

was

the

consumers,

the ex¬
planation for the poor comparison
of the most recent ten years is
course,

in

or

likely
to
witness
sharper change in sales

One

1920s, therefore, the in¬

a

very

million vehicles.

dustry produced more automobiles

single

a

highly
"sensitive"
one.
If
a
mgrked
change takes place in the general

some

32

this

for

residents.

areas

been

The

lion units.

was

in

units

year.

detail

In the latest ten years,

million

48%

of

of

is noted in

other

lanes

completed—in other words,

decrease

tory, production was about 31 mil¬

1940-1949, output

market

trend

a

were
a

of

rec¬

assem¬

During 1938,

2Vz

chology

1930-1939, which
the worst depression

All

In

less

omy.

In

simul¬

expansion

in contrast to

areas,

tremendous

little

situation

Comparing the production

trucks

that year.

business

out

the

has

vast

a

cities.

number

to that time, with about

up

4,800,000

the troubles of the over-all econ¬

It is desirable to stress the

deny that

suburban

the

there

in use of any state in the Union,
though it is not the first in total

the

when, despite

and

been

fornia, for example, now has the
largest number of passenger cars

little

1920s

lent

Who could

West

taneously

Instability

the Unions

years.

lation, the shift of population has
been important in the automobile
picture.
A large part of recent

page

Now

And

coming

In addition to the rise in
popu¬

"rich," not at those who buy most
goods being hoarded at present. And late

Auto and

tionary tactics in the past.

Then take the labor situation.

will continue to expand in

swell

Continued

hold

owners

seem

Treasury announced financing plans which
hardly have been more inflationary if that had been
object.
We learn slowly—if we learn at all.

the

had

The fact of the matter is that the
consumer, that is
to say

Its ideas about taxes

last week the

two

sure.

the rationing
and all the shortages, sometimes
quite needless and some¬
times not

all costs.

at the

consumer

put forward on the subject of taxation.

and the like.

are—or

and

conditions

the proportion of multiple car

up,

a

carefully noted from what direction the
threat of "inflation" approaches. It comes, perhaps, first
of all from consumers who have been living high of late,
and who at the first outbreak of trouble in Korea, began
to lay in stores of many kinds of goods. But it approaches
also from the side of the labor unions, which have never
been bashful about demanding all sorts of things for their
membership, but which had for a time been more or less

Now

Korea

business

perous

be

it

Let

hinted at in any of the

in

be directed

to

If the President has any other basic

even

any of these areas,
preparing to finance
related developments, has

in

realization that the blunders of World War II

no

must be avoided at

Treasury in its first major move to finance itself since

concept of the management of public affairs in such

is

shown

grant of other powers, and the Pres¬
them. It is evident in the action of

the Korean outbreak.

from direct action in

the tactics of the Administration

Thursday, August 24,1950

.

ing the last year or so, however,
this percentage has risen to more
than 6% and it seems that if pros¬

in large part the product of New Deal
policies.

are

and Fair Deal

..

it

Considering long-term changes,
is worth emphasizing at this

point that
crease

a

very

substantial in¬
life has been

in average car

shown.

In

sender

cars

the: mid-1920s.
were

pas-

estimated

to

Volume 172

Number 4936

.

.

The Commercial and Financial Chronicle

.

(729)
have

life

a

of

The average

around

mileage

ometer when the

6V2

years,

the speed-

on

car was

scrapped

estimated at aiound 25-26,000

was

feet

the

upon

trend

ot

sales.

ments
and
merchandising practices, particularly with regard to

fication

48%, Ford

price.

ler—due

new

ml^S,
ag°' ,?/ uth! in used cal'.Prices is likaly
middlealug,eneratl0n
1930s, average car life had
distinct
a

risen.to

than

more

and the

mileage

"junking

eight years
58,000 at the

was

stage

maiea thatcars
mated
xnai cars lasi
last somethinghke
sometning iiKe

11

to

11V2

and the average

years

impact

for

new

glut

in

used

and

the

on

For

cars.

the

velops

.

prices

Effects of Higher Price Level

market

slide

because most

new

cars

comes

Horn
tiom

the
tne

price

level

th™se
£akes pla^
During the entire

prevailing. The gain in unit terms
such

factors

larger

as

?he
th?
'

wartime

two^-car

rise in

it'fhdpM

production

families

to review the trend

wholesale

of

in

eaD

oower

value

car^rof ctioi?

of

to

purchase

the

to

the

upward

of

2,000

and

demand,

in

as

S

Ztttt&JgSk

at

are

present

H

thp impfl

par

earlier years.

car.

car

prices

recent

PearS;

only

$82 billion and passenger
production
was
valued
at
about
3.5% of that Tigure.
To

show
is

volatile

how

when things get

that
car

1932, the

in

this

industry

really bad, note

relationship

the

^tor

vehicle division

Kaiser-Frazer

pe-

mJkPt

1""™

formed
War

is
the

since

although
newcomer
World

a

Second

ended

war ^

'

,,

n

,has "ot met ^eari h"
automotive re-

nation s

laments.

pparl

Today,

good

pre-war

concjition is taken
index

m,

thlPniM,ire°
picture tnam^lntafn
to maintain

the

^

offered

jndustrv

tive.

By 1937,

hV

wnme

2

t

mar-

motor

cars

car

be-

slme.

cars

sold

In

1949

sale

that

i% used
car

were

used

car

estimated

aboat

the

to

new

each new

?ook
took

they

Harbor, they

there

were

marketed^fOT

individual

Company

A"d

should

it

be

noted

Motors

Ford

about 85% or 90% of all the unit

for

past.

estimated

number

a

For

that

of

it

example

is

latinn<shin

fnr

lationsnip

months

that

riont

dent

tne

thp

that

initial

tbp

tor

1950.

of

is

naccpnupr

the

civ
six

initial

Thus, it

evi-

nar

passenger

car

in

in-

dustry has enjoyed a very substantial uptrend over the last few

both in absolute terms and

years,

relative

other

to

economic

mea-

y-.

The

,

listed

2.0 to

„

-

,

Department

of Commerce
sensitivity ratio
of

a

represent the rate at which

purchases

of

new

(plus net

cars

purchases ot used cars)
income

fluctuations.

durable

goods

has

ment

that

The

the

to

found

vary wi

only

have

greater

sensitivity,

interestingly enough,
pleasure aircraft,
radios, pianos and other musical
boats

are

and

instruments.

show

less

All

in effect,

pas-

mean,.

down) in the
buying.

or

car

that

while

radically

»ales

in

this

industry

from time to time

product?once ™?s

of the

out

into

one

of;the most stable elements in

consumer

In the

scene.

1930s, despite

market, is

tremendous drop

a

in .most lines of business

usage

production

again
there

(includvehicles)
in

For example, 1930

greater than

was

of

actually increased

years.;.

in

1931,

was

early

in

1929, it rose
even
in 1932

and

onlv

a

verv

slight

de-

cline in motor vehicle usage. That
same

trend has

been

re'en/yean^with

true

in most

the notable

ex-'

ception of World War II when, as
we all remember, gasoline rationing, tire rationing and other re-

S^mpo^rlly1 inrK:
card
Used Car Market
At
say
car

a

this point,

few

market

it is in order to

words
and

about

its

the used

important ef-




divf-

ha

inductrv

ihn

J

thn

HiSrnnttin

man

»

is-

mK

rt

LtomobilelndusTry"? aether b>|
"

er

International

w'i^'ofan?

profit

the contribution profit wise of any
^Hed
°" "
"
y

Th»

lbnormaI
ADnormai

-

Situation

and

Situation and

High Earnings

Jt

emohasized

should

+u

that

oe emp asized

tnai

J e abnormal conditions of recent
year?: especially in the case of a

number of the independent car
.

even

other

at

times

th

£ S£.2™on
„*

Before

they

Phtrysler;s sha^e beginnjng ^

do™-

£*

average

Ford

General

wiriaiv

widely

Motors

^g in popularity.

Concentration in the "Big Three"

have

rinnnntraiiypH

decentralized

is

quite

anH

rnrH
*ord

and

also operates many factories

To

comMv

u"vf

thic
own

ia

during
these

•

in

of

way, it may

be

fu

lIie.

u

seven

/Bn.

have

c '

■

■

^ In fact the industry has not had

b

.

«»'"

has refused

■

.

General Motors is the biggest
£act°r in the truck end ot the
business. Chevrolet, for example,
&ets something like 35% of unit
business and another General
Motors Division, GMC, sells about
&% of all trucks. Ford averages
between 20% and 25% in this
market.

jevei

business

come up
the truck end of the

in

in

late

is

years

Stude-

«*»»«

to

the

regard

earning

of

recent
for

power

most 0f the passenger car companjes as one likely to be indefinitely maintained. Price-earnings
ratios of three
a

four to

or

are

I

prospects.
Another financial

measurement

considering is the percentincome realized

of net

age

a

commentary
on
the
evaluation of future

market's

WOrth

for

one

number of these equities

sufficient

A company that has
pretty well

torth

31%

over

net

on

General

In the year 1949,

Motors earned

on

worth

position;

Chrysler,

Motor

reflecting

difficult

its net

28%.

two

were

four

made

of

the

of

Chryslerthe first

among

leaders and Ford accounted

seven

(0^

other

one

7

plants in
numerous plants
in foreign
foreign coun
coun-

h"h ^ rhP°?/iarpiPriC
^ course
ls
erup
"p?itUmL!!i
of
Chevrolet
Ford

tries

Plymouth have normally realized

.

J

It

lsofpr^babJac\^

sion ot manufacturing taciiities
provides the big organizations
with a definite edge competitively,
Economies and other advantages
accrue from a network of plants
which are situated to obtain max-

11

t?™ ? £

,

and

During the early post-war period,
with a shortage of materials a
chronic factor, some of the companies favored their higher-priced

country, and this

condi-

adjunct to their passen- UonTW the independent Duck
®erA"CTatlons'
makers, earned only 2%% Mack
a

h.

h

h

Ano her c0ncern which has Trucks sustained a sizable loss
benefited from its World War II last year.
experience is Willys-Overland,
Industry-wide comparisons on

^

There
in

cars

the heaviest volume

GM

1949,

cars:

built makes

Michigan.
GM
only have many asdikewise

concentration

pointed out that of the

both

thrniiuhnnt

the

reveai
tne concenirauun oi
in another

which sold

in

niQnt«

P

reveal

^

demand

assembly plants and parts plants,
in
sections
removed
from
its
headquarters

gdn-

andcf/s have been galn

an average year,

than rnnct nf thn nnmnanipc in thic
tnan
most ot tne companies in tnis

field.

&

and
on

velljcles- esting.
^be sameInbasis
also prove lntergood years, the auto-

P

independents

are numerous
4.rll«ir

fh.

onri

nf

hncinocc

mntiuo

hrannh

nf th^

ic

nnnnnmv

a

?: truck end ot the businep. motive branch ot the economy ts a
generally concentrate definitely more profitable field
thp larp.p
i
L trnpUc3
fhnn
thp
mannfar-tirrinp
these

(%

aUpra«fP

feev^also

In
l92^ auto^
fo?^nubile transDorta^fcn^n
track
manufacturers
?erests
Mack Tra^k^d White
a?oun tamed 22%
net worth
?

b"

s^eral

cases

oroduce

enterprise

and

as

a

on

r?u
^ 5 and White group earned 227o on net wortn,
M?t0r' ,alth°u«h tIeade«
thf the automobile equ.pmentI'div,independent
part of
the
truck sion in the same year accounted
u

business, have averaged only for 23%, while the total for manuabout 1% or 2% each of all unit facturing companies as a whole
saleg

trucR

Qver

f

a

j

of

the j

f

_

tion of truck output is centered in
iiehter-weight vehicles where
th

k:0

pmir

uavp

,7;rt,ini

a

less than 13%.

Was

automobiles

ratio

of

ta

1949

reflectine

Kmlm

all

vs

comnanies

Finalh

.

automobile

20%

about

nv^nnfartnrinff

'?reanEB,Iegho^°U1 haV£ d Virtual ^

18%,

about

eauipment

Again in 1941,
bad
a

trucks

and

with

the

ve-

heavv

the

The financial news currently
6
and
the
most any product on wheels. That
features the spectacular earnings »eight pi ovided Dy om ana ine
™um benefits from their proxwas the case
back in 1948 when of General Motors tor the first «««
°ig passenger ranter.&imity to major marketing areas.
the "Little Three" accounted for half of this year and also Chrys- showed 31
net income on Dei
The degree of integration dif- only about 44% of the total unit ler's showing, which-cpnsxdering worth^ automooue equipment wa¬
makes because they could sell al-

came

year

But Chevrolet and

Ford

competitive going beharder for some makes a
and one-half ago and these
the

£eed the assemb'y Plants» 15 three leaders took 49% of the
worth keeping in mind, too, that a market for 1949 as a whole.
company's policy in regard to
it is interesting to observe some
P"»s production or purchases other aspects of recent competif™m vendors will m°d'fy 'he ra- t,ve trends as individual compatl0 o£ payroll to sales figures.
mes have been affected.
In 1948,

'.f.f J® ofi%
Kaiser-Frazer
'
Ch?5ler ""I8 ^

Jor
ftraltn¥a°.to^,

lts £°taI sales
which buys a much larger propor-

..

a

largest

the

was

ents, with about 4%% of all cars
soid bearing the K-F label,

the labor troubles of

earning

that

da

up

power

gins.
On this latter topic, it
dwelling for

a

is

As

a

I

Ford

{se*a BXti

°*.a,o

"

j

a

1V2%

of

itflfffTe Position

nnnrpntratinn

of

few corporate hands,

During 1950, there has been

a

lurlher drift toward the products

autcmob^
field is keenly of the Big Three, if allowance is
While the Big Three made for the temporary distor-

competitive.

h^pCTden^rreaT/ha^e

to worry

taxes.

earn-

Studebaker in 1949 showed

alone

sales

in

year,

the

with

= %££

accounting for almost 24%

to

this

merous

manufacturers of vehicles

af£ord

should

arts

and

ainst

a

Some

automotive

activities

of

some

but the most

the

in

companies ■
branch

all

however

-

might find it preferable to use an'
invested
capitai base, if their
operating results in late years
have been

on

the low side,
,

,

"e r e a s,0 n

stocks proved so vu

r_,

e

b e n
on

selling virtually at their all-time

86%

car

P

^(1a new exee^ss^roi.ts^levy.

ahfu?t'herfn°in'marfffns to*some

period

of

position

fear °{^U^fuke General

tions o£ the strike at Chrysler, (and that
June

inter-

earnings.
On the latest showing, GM in

tained

improve-

some

ings
year
for
Nash-Kelvinator,
with 12% margin before deducting

jn

product

their

1

extreme forms of taxation.

roughly twice the margin

The three major corporations ob- substantial

to

fl,'

1* a

bya
£a,r the abefst marg,ns, !n £hls
industry and frequently has
shown

constantly about just what GM or
Ford or Chrysler may be planning
regard

mu"h

sheU

of slightly better than 4% 9V2% carried down as pre-tax

during 1949'

crrentlv

a rule, General Motors has made

only

££>e

worth

few moments.

each skowecl up with about 22%
Payr°H to salesComparable
Ford Hgures are not available; as

garnered

k

hi ,VJraee earnings e»cein_the average earnings e-pe

the automobile field and reveal
their continued good profit mar-

ln

the domestic car market.
Studeoaker, on the other hand, held its

.v

TI

sources of the major concerns in

the Kaiser- around 20%, Chryslers was
year when the 10%. 1949 was a very good

company

|J h and tne _nanu a-

the tremendous
and financial re-

' ' cal shl£t £o.ok Place
Studebaker and Nash-Kelvinator, Frazer position last
,

b

com-

,

comparatively excel- in general was unoer it/o.
These latest figures
i*he Taxation Outlook

°<f nnberT1^6^ n^^aUo Studeba,k,e.r. JameH next in ^at that Chrysler realizes. In 1949
of the leading indeoendents
year w'th 4.1% However, a radi- GM had a pre-tax margin of
o£ ,the

most

car use

ntl

showi^g-

fM^.S&TST

in

lent report.
again point

shift

infi.the

business.

the

nf

of

the agricultural equipas well as an important
producer of commercial highway
vehicles.
At times, International
power

mir

Drofit

sions and the greatest unit volume

number

a

ment field

when

It has been frequently remarked

the economic

of

division

pany—was a

change (up

for

it di vision is international
Harvester which, of course, is a

and Plymouth began to come back

of passenger

dav"

™ ^Ts of the pLsen
car

Mntnrc

integration

this

to

market The To:t
beeTtoward the f°ve di^

af iL «r,T pL.

knnwn

of

the

wisecontr^buted

14%

to

Harvester has stood in third posiand' tores'
about tl0n in terms 0f un]d truck sales, Sns
f ?
' J
^

obtaining

was

in

un

tWs"division there1*'!**whaTTs the'emtribution

volume.

rate

the

"field

a

General Motors is usually regarded as the most highly integrated,
w'fh the production of many of
its own parts requirements that

20%

use

after

degree

Lh nthiJ- foinrc

<hn

BigThreegot

it

Quarter

car

has

fers with the individual concern,

a

shown

the

10%

is

the

you

of

trend, then

country's over-all
are likely to see
a

that if there

in

income,

durables

These indices

senger cars.

change

other

volatility than do

the

General Motors and

h

Depart-

a e

somewhat different plant set up

a

and Ford not

sures.

has

factors

sales during

car

like

something

3%%-4% would represent the re-

has

the strike drastically reduced business in the

Chrvsler

and

maintained
months

84%

raise

FoTdTa?' &?£%£%%£% a~es a'bouAT of'alfS
These ^mpanie
nant
and

new

passenger
In the corresnondinp

Previous to World War II,
had been selling over 20% of the that company was of very little
tptaI cars marketed in the U. S. consequence in the commercial

around $191 bil-

was

higher

hi

to
1950

tht rat'p !f r!!Iprii

the

the recent costly strike. Chrysler baker.

that

wholesa'leSva^ue'of"car output and
^
peak has probably been

the

22%-24%

'o°k a» individual

a

First

Situations

situations:

company

'

which

business

car

the

able

was

Tn

time

monthsofl949

passenger car volume in 1929, but

sold.

1949; 3.2% of disposable in-

come,

shutdown—limited for
being to only 1/10 of

but

for the June

factorv

about

-took it

by the ear]y 1930s,

re-

5

h.

to

»

In

|

potential

tliere

waf

13/'

a^n'hilnw

sank
in

,

tL

volume had

car

it

,

chin."
In the early days, Ford had
been the biggest factor in the
Held. In the late 1920s, GM came
ahead and captured first place and
that corporation has maintained a
commanding lead until now they
are ^ar bigger than Ford or any
other company in the field. Chrysler Corporation had 9% of the

vears

this connection

jn

fQre

was a

p^rspec-

,

9?% and in some years an

used

still another

as

of the wide

of

grossly subnormal interval but it

100-dav

fodan ^member Suwtte thre?

is sti11 a strong demand for sec**ack
1929, 1the !Big Three had
ond-hand vehicles with many 75% of the entire industry's unit
miles still left in them, as produc- business. During the depression

everv

Obviously, that

new

companies have been launched in

™3d'1mut
!
P abnormal condition. There

sales to disposable income was

only 1.3%.

fifty-

Relatively few

interval,

post-war

•

L.,r

j

for about
27% and Chrys-

the

an

there

'

car

accounting
some

to

or

S ■ ST"T.S
g»
.Joe
ngure was normal in the
This
the
around

different

bought

new

fn periods of high used

oasseneer

related

as

with

alone

WW?
^^^unif he'lTlwftaf 'lgSOs'^i'kewfs^ in th' 19fStan,d also a substantial wStration

general

reflects

badly,

are

higher

population and purchasing

cenabout

it is estimated that
1,500 companies have entered the
competitive
lists.
As
compared

is

pan'sion "comes"

now

started

was

tury,

a

de-

car

clined

much
mucn

industry

GM

new6car saleft^dron^That*'k
sales to drop.
SttemntedVefhlclest-that
^en products of'these
major manufacThat
attempted at one time have
another, turers for
extended time nast

new

Although the industry has been
reporting astronomically high revenue figures for some while
past,
pansion

if

the

around the end of the last

demand

example,

car

Since

to have

^ by

before^tSjs"cramped.

car

Although subject to qualidepending
upon
other
surrounding factors, a big change

21

was after allowing for

Chrysler had

bonus
a

»

had

been

appraisal" of Things
But

9V2% pre-tax ratio

would

year,

Chrvsler

began, prices ot t

provisions).

in the first six months of the

,

motor

be

to come.
vehicle producers

quite

vulnerable

Continued

on page

on

22

22

(730)

The Commercial and Financial Chronicle

Continued

jrom

21

page

parts

market

likewise

a

(spark

plugs

which generally are understood to
provide wider gross margins than
original equipment items.
Thus,

are

contributor

good

in

this

division).
On balance, nev¬
ertheless, Auto-Lite is chiefly in¬
fluenced
by original equipment
demand which provided over 70%

Auto and Accessory

of

Industry Securities
other counts.

margins
in

a

7% in the same period.
Truck
equities thus have benefited from

business

government

on

war

that they have

economy

enjoyed during recent prosperous

the

periods.

babies,"

World

General
II

War

lower

during

Motors

showed

margins

The

the

of

have

mid-year
headlines.

financial

close

working

underscored

statements
GM

to

$1.7

three

of

few

ments

$400 million of working cap¬
spite of sizable outlays for
divicends.
Chrysler
has
also

Chrysler
adequate

also

has

millions in

improved plant facilities.

the

automobile

business

business

battery

normal

a

condition.

Concentrating
uses, this
company also has large revenues
batteries

on

for

the

for

com¬

branch

question

large

number

eral

Motors

Some

or

but
of Gen¬

scope

or Chrysler.
equipment pro¬

the

ducers have sales volumes

and

very

Ford

or

of

a

companies,

of

is of the size

none

in

takes

ranging

in the $200 million or $300 million

Never¬

well

for

aircraft

equipment

important

as

time past has derived close
50% of its aggregate revenues
aviation

activities.

automotive
market

original

has

thus

paratively
these

equipment

become

less

The

of

com¬

significance
than

concerns

for

years ago.

It

is

said
of

times that the

at

po¬

independent parts
producer is inherently uncertain,
owing to the heavy concentration
an

business

of

in

Big

Three
changes in

hands

builders

car

trade

occasionally

the

and

the

place

branch.
is

of

position

take

equipment
alization

the

That
in

true

the

instances,

much under $340 million.

small.

underlying strength of certain
specialists.

Several

the

the

of

independent car
that
matter,
have

of

makers, for
substantially bettered their finan¬
cial

positions both during the

war

As

proportion

broad generalization,
element that most

a

principal
these

is that

one

or

but

it

obscures

the

com¬

Many of the leading parts and

they manufacture for

accessory manufacturers have been
in
business for
several
decades

companies have in

mon

another

automotive

in the post-war period.
Companies like Studebaker, Nashyears and

the

branch

business,

original equipment

of

the

either for
for replace¬

or

and

they

this

divi¬
cur¬

By

and

1944.

to

sales

than

more

there

was

decline

a

further recession occurred,

billion

followed

more

untrend.

The

of vehicles in

in

and

recently by

a

increasing number

points to a con¬
tinued active replacement demand
the

over

Because of
ences

tion

the

in company

extreme

differ¬

size, diversifica¬

basic position, securities

and

The
Fred

have

prospered in the
face of the concentration of motor

vehicle business in the hands of

N.

N.

OGDEN

New

Investments,
Orleans, La.

field in itself provides certain ad¬

When I state that the
security I
like the best is listed on the New

independent producers have a se¬
vere
competitive struggle ahead

companies.

vantages.

The supplier is able to

York Stock

center his

research activities

of them in any reasonably normal

tagged

more

While

years ago.

both

to compete with—

more

to plant resources,

as

dealer
organizations and working capital
they had back in the 1930s.

—than

As
are

far

the

as

truck

concerned, the

units

in

this

companies

important

more

division

have

sub¬

stantial

working capital holdings
relatively large invested cap¬

and

ital bases.
These extensive asset
positions
could
help
to
shield
truck

producers from too drastic

taxation in
With

military

a

the

present

wartime records,

early
1940s
General
Motors'

$4.45

emphasis

on

few items from

a

the

pertinent.

are

earnings

were

share during 1941
(when higher taxes already were
a common

beginning to bite).
to about $3V2

spite

the

of

volume

a

fact

that

business

of

the

for

In

gross

this

cor¬

poration headed strongly upward
through the war peak of 1944—
when

lion

sales

were

$2.4

vs.

about

billion

bil¬

$4*4

in

the

year

1941—earnings leveled off to
Average of roughly $3V2-$33/4
share for

the

entire

wartime

an

a

in¬

terval.
GM was hit both
by the
reduced operating profit ratio and
by heavy taxation.

On the other

hand,

many

ducers

were

money

during wartime than they

had

in

the

independent
able

to

pro¬

make

previous

few

more

years.

The much heavier volume of busi¬
and the lack of normal

ness

petitive

pressures

rate

taxes

of

government

offset

and

com¬

the

high

limitations

contracts.

In

on

other

words,

war is not an unmitigated
evil from the standpoint of finan¬
cial results of some companies.

Turning to recent
here

are

group

a

few

market

in

the

of

first

month

of the Korean hostilities:
Since'June 23, the truck group has
shown a price advance of 5%.
went

passenger

down

71/2%.

car

issues

GM

and

Chrysler dropped about 14%
the

automobile

accessories




ani

group

in

far

numerous

than

more

manufacturers

cases

that.

also

equipment

they

Certain

make aircraft

still

and

ucts, which

other

prod¬

in addition to the

are

engines, bodies, wheels, brakes,
batteries, frames or other lines

ined

in

is

detail

exam¬

whether

to

as

the motor vehicle assembly divi¬
is

mainly governed by the

replacement parts market.
As suggested
several

previously, any of

nonautomotive

on

activities

may likewise be a vital factor for
the
particular
organization.
A

This

suppliers

able

are

to service

automobile

more

that

assembler

car

could

of its business from

companies and the auto¬
replacement field in late

Briggs Manufacturing has
probably obtained about 9/10 of

years.

needed for many components
of the motor vehicle and even the
are

Fred

N.

of parts

and

flexibility at

change time is also avail¬
vehicle company utiliz¬

specialist
In

suppliers.

practice,

portion

needs, but at the
lean

upon

list of supply sources.

specific

variations

a

parts

time they

same

quite heavily

leading

their

of

seasoned

a

broad

Except for

that

tend

to

and

vegetable

agement

stockholders.

accounting

whereas

for

two-

of its total volume

supplies
builder in the
United States and besides that, it
has a
very large volume in house¬
Borg

virtually

-

Warner

every car

hold

appliances, agricultural
equipment, steel products, aircraft

equipment.
a

Electric Auto-Lite Company has
wide range
of products
and

reasonable

tomers.

diversification

although

of

Chrysler-

cus¬

Cor¬

Among
Motors

of the

leading bat¬

tery producers, Electric Auto-Lite
also has

an

important replacement

earlier,

structure

provision of

the

calls

As

corpora¬

the

for

Good

will

peanut
of

ment

GM

parts

makes

even

other

and

accessories
a

equipment

vehicle
Ford

few

the

and

items

for

builders.

and

replace¬
of

certain

Chrysler

independent

vehicle

and

to

Co.

where

man¬

win

Blue

for
Plate

The

the

augment

Oil

&

management
successful

sales

Snowdrift.

in

is

long

modest

divi¬

and

toward dis¬

way

counting the eventual adjustment
to

reduced rate of automotive
demand that most people
expect.
a

aggressive

of

of

ones

aborning days

been scrapped

and many
newest and finest financed

the
of

earnings.

The book value of the stocks has
and

grown

it

is

to

grown

greatly in

mitted
a

where
of

excess

now

the

cur¬

a

dividend

generous

and

huge plough back into plant

or

reserves.

Two years ago a fat five dollars

plus

paid

was

with

the common; last

on

plummeting vegetable

a

market, reserve were unused
earnings exceeded the dollar
forty paid; this fiscal year just

and

as

to

the

final

net

even

just
isn't
appreciated
by
enough hard headed investors.

Years ago I made my rule of
thumb in selecting investments for

myself

and

"Never buy

my
clients,
anything you

willing to be stuck with."
Oil

&

the

stock

Snowdrift
I

like

Co.

this—
not

are

Wesson

common

best,

even

is

to be

Hunter Goodrich Is

With Merrill Lynch
Hunter

pointed
table

Goodrich

specialist

oils

and

has

in

meals

been

cash
in

ap¬

vege¬

the

com¬

modity division of Merrill Lyncn,
Pierce, Fenner & Beane, 70 Pine
Street, New York City, members
of the New York Stock

Exchange,

Daniels-Midland Co., most recent¬
ly as Manager of their plant in
Edgewater, New Jersey.

competitive position and growing
President, whom I
like

to

refer

to

as

"The

Dane," and his able
quite adroitly handle

associates
a

delicate

inventory-of-r'aw-materials prob¬
lem.

of

modernity and efficiency,

Percy R. Pyne, II
Percy

Great

by

parts,

having

maintaining

Plant and equipment have been
maintained at the highest
degree

replacement

that, this

profits

The stuck with.
Co.,

producers also follow up
the original sale of their
products

offering

of

dends goes a

outfit

good

always
The

butter,

Wesson

unit sales. The

of

probable

Foods, which include mayonnaise, it was announced by A. C. Beane,
one of the best quality coffees on
commodity division director.
the market, wet packed shrimps
Before
coming
with
Merrill
and sea foods and a large line of
Lynch, Mr. Goodrich was asso¬
jellies and jams and a new smooth ciated for 25 years with Archer-

substantial

quantity

business

products

and

a

Snowdrift

nationally advertized products
widely accepted.

large portion of its
component
requirements
from
parts divisions of GM itself.
In
addition, the corporation sells a

and

one

things. General
largest single pro¬

the

mentioned
tion's

original

As

the

other

is

poration
is by far the bieerest
single outlet, averaging two-fifths
years.

accessories

ducer of parts and accessories.

of

this supplier's business in late

has

years—you

shortening

packaged food

in¬

more

seems

this company has expanded in the

car

or

com¬

munity over a long cotinuation of
earnings at recent peak rates.
It

was adopted by a
group
daring investors and nursed to
strength and maturity over the
years.
From a simple salad oil

makers.

with

doubts on'

this child

customer

relations

the

this

investment

of

general

dustry's

20

ailing parents,
Carolina Chemical

are

thirds

it

listed

its

From

is little evidence of a radical shift
in policy that would affect the
and

to

developments,

and

are

even

common.

industry, practically all of which
business is dependent upon the
prevailing rate of car assemblies.
Briggs, moreover, has one major

parts

for

it is Wesson Oil &

develop from time to time, there

from

case
com--

tributed

the haid?"

Virginia

therefore,

addition

cur¬

notwidely dis¬

Well, the long and shortening of

ing, in part at least, the services
of

In

war

guesses

in

a

issues.

pany

go as

that

needed for the full range

to

leading automobile

condition has reflected
the part of the

"crowd";

might rightly ask, "Am I taitched

able

sell¬

low ratio of price to
earnings, just as is the

recent

in

largest of the assemblers would
hesitate to duplicate the facilities

model

accessories group are
a

ported by any

been

the automobile

revenues

not

portfolio

though

Ogden

its

its

is

the shares

Large-scale plant investments

Added

particular

high as nine dollars a share.
Selling under thirty, I- feel that
this orphan has
been neglected

real¬

ize.

manufacture.

in

By and large, equities

that the mar¬
ending a total of two dollars and
ket is not sup¬ forty cents have been declared
and

degree greater than the indi¬

a

it

it;

pany, to my
k n o wledge;

the resultant large volume
reduce the unit costs of en¬

vidual

comparatively

place, although'
change toward a mili¬

changes

the

of any investyear,
m e n t
com¬
oil

ers and

may

from

included
the

two

sizable

vehicle

profit

plugging

manufactur¬

50%

motive

a

pro¬

automobile companies fabricate

60%

not

am

that
only
costly experience can
Moreover,
numerous

few examples should
bring out
contrasting situations.
Borg-Warner has received some
to

a

con¬

comprising the

vehicle.

peace,

equipment

Exchange, of which I rent market quotation. Earnings,
member, hence cannot while erratic at times, have per¬

thousands

or

for

(Wesson Oil & Snowdrift Co.)

"know-how"

a

and

produce.
or

parts

motor

vides

long

this

number of items, in

different

entire

and

major marketing
also,
whether
it
is
chiefly affected by conditions in
or

of

products,

divisions;

sion

characterizing

trast to the hundreds

to

must be
learn

to

diversified

customers

limited

a

The intensive

gineering, tooling and production

made for motor vehicles.
A parts company

specialization

are

equipment, household appliances;
building
and
farm
equipment,
radios,
television
sets,
railroad

trends,

comparisons

performance

Independent

are

They dropped

share in 1942.

are

automotive parts fabri¬

as

cators,

it

economy.

there

While suppliers in this field

economic situation, they certainly
have far

than

few big companies.

the

ing at

out

similarities between particular

or more

that

frequently

portant
in

of the older

Ogden,

since 20

From

are

do

Security I Like Best

FRED

there
differences

both.

little

as

Continued from page 2

needs

or

of

tary economy would produce im-*

evaluation

period ahead.

end

in

or

well in the market

new

use

war

should

any drastic

early

point

cn,

issues

to

551.9

in

of the automotive

some

rent

ment

Packard

and

now

Whether

much greater volumes and in 1948.
the peak of all time, more than
$2.5 billion was sold in this field.

a

lower

than price speculations.

more

situations.

1949,

the

not well secured rank

are

mil¬

1950

At

more stable

scale, stocks of smaller parts
companies whose trade positions

reflecting
the
mounting
needs of the aging vehicle
popu¬
lation.
Following years brought

enjoy about the best working
capital positions they have had

Kelvinator, Hudson

industries.

lion,

about

con¬

the

had

$800

is

none

equities

replacement

accessories

although

gener¬

numerous

cf companies of this size is rather

although

1942-1943.

parts

that

in

in

wartime

issues,

found in certain other

assembly lines, the
replacement division continued on
relatively active scale even in

In

true

was

quality

similarly well situated
are
relatively good

rated fully on a par with the
servative investment

of

jumped

automotive industry.
In
fact, each of these companies for

replacement

sold

the

and

enterprises

a

manufacturers

the

competitors

as

the

wis

During

tailment

as

theless, working capital has gained
almost steadily and now is not

bracket,

sion.

Bendix Aviation and Thompson
Products
are
leading factors in

sition

branch

equipment

varied

outside the automotive field.

specialized

in

Warner,
Eaton

cus¬

right.
In
1941, which was the
peak pre-war year, over $700 mil¬
lion worth (at wholesale
value) of

the
as

business

as

At the top
scale, stocks like BorgLibbey - Owens - Ford,

end of the

have

may

both

Thursday, August 24, 1950

.

in the motor equipment field dif¬

The replacement parts and ac¬
cessories market is big in its own

the

in

also

and

.

fer widely in caliber.

field.

of its auto¬

replacement
field
than
in
original equipment market

nec¬

period.
Meanwhile,
phases of the automobile

This

in¬

new

more

to

additional

for

suppliers

companies

tomers

Another

motive

from

reviewed.

paying
has

the

sales.

obtain somewhat

accessories division may be briefly

million.

and

poorer

than

answer

certain

Thus, in
working

been

dividends

vested many

nd

.

shown vast growth in its financial

1941, this concern had a
capital
status
of
$127

the market

reserve

on

the

of

ital in

years.

to

essary

1941

over

the

in

Time requirements make it

During the first six months

over

truck

Automobile Accessories

of this year alone, GM added well

Strength

The fact

the

been making a

weeks.

net

the

products

time,

long

a

de¬
has

dollar

some

considerably

times

civilian

had

"war

ieading passenger car stocks has
naturally contributed to their bet¬
ter price performance of the past

in

makes

billion

for

showing

by

now

again

capital,

than

level.

re¬

history with its June
That corporation now

figures.

more

that

issues

big auto manufac¬

been

the

the

has

financial

tremendous

in

improving

also aided this division.

by about 50% compared
previous peacetime level.

turers

although

for

mand

with its

sources

interest

recent

1949

vehicle

large battery company, Electric
Storage Battery, is understood to

fell nearly 9%.
Our index of 540
stocks of all descriptions was off

They could not be

expected to make the wide profit

its

individual

.

many

tired

Rivington

investment

Pyne

II,

re¬

broker, and

one

of

the founders of Pyne,

&

Hollister,

Sepulveda,

died

Calif.,

at

his

where

Kendall
home

he

in

had

resided for the past two
years. Mr.

Pyne

was

68 years old.

Volume 172

Number 4936

Continued

from

.

.

The Commercial and Financial Chronicle

.

term is used in your

10

page

credit house has

mining needs, finding sources of
supply,
negotiating prices
and
terms, and transferring title. And,
of course, the other side of buying
is

selling,

which

involves)

the

of

selling

-

extended

banks,

it

but

and

men

banks

transactions,

tial

to

This credit may

the

mine,

manufacturers

by

wholesalers

and

well

as

certain

is

of

money

that

the

as

commercial

must

remember

the

whole

that

marketing

original

materials

farms

and

mines

the

and

utilization

or

time,

the

of

example,

of

end

raw

much

period

a

product.

of
For

physical
and

done

through the gin to the
spinner.
The spinner completes
one production process and again

through

garment
en's

factory.

and

weaver.

Finally,

ready-to-wear

accessories

furnishing
retail

the ultimate

to

The

and

men

whole

chapter

with

bank

the

or summer

To

be

sure,

find

we

increas¬

ingly in American industry what
is

called

which

vertical

several

integration in
the pro¬

have

sumer's

that the

so

processes

which

have

I

other

hand,

example
have

ing

number

be

may

of

marketing

less

than

indicated.

in

some

more

that
the

On

for

cases,

automobiles,

our

even

single firm,

we may

separate market¬

than in the case I
have cited, all at the same level of
processes

production.
Motors

Chrysler

literally

buy

may

dreds of parts and

from

them

hun¬

sub-assemblies

sub-converters

bining

General

or

into

before

De

com¬

Sotos

or

Another

Marketing

function

which involves the

of
use

for

compete
dollar

not

but

American

of

savings

also

banks

the

con¬

only with

with

the

one

whole

industries.

of the

men

prospective customer is in
a
selling transaction.

The

In

in which the officer's

opens a new

account, the way the

loan

handles

officer

holder

box

attendant

into

the

lets

the

secret

pre¬

cincts, all of these are selling—or
unselling—contacts.
The

marketing connection of
those of you who are behind the
scenes in the clearing department,
auditing,
bookkeeping,
invest¬
ments, etc.,

reaction"

"market

bank's

services.

The

to

with which you perform your du¬

ties

has

the

customer's

direct

a

relationship

attitude

institution—and

your

before

including

banks,

idea

thrift

of

security, the postponement of
pleasure from now until some

it

has

relatively
few
are not trained,

customer contacts

trained

not

in the cheerful and

also

It

telephone.

themselves

courteous

use

A gruff or slug¬

ing

certain

event

is

the

likely

sold mainly dur¬
In

either

the

goods

seasons.

producer

to

of

bank

use

credit

in

scheme of things.

This phase of

activity is usually

put under the

heading of public relations, but it
is, in the broad sense, a marketing

carrying unusually heavy inven¬

job

tories

the

during

peak

So

seasons.

will middlemen in many cases.

closely connected func¬
tions of marketing that are rec¬
ognized by practically all writers
field

the

and

grading,
and

grades
into

those

tion

and

standardization

are

the

setting

of
commodities

sorting

grading

up

Standardiza¬

grades.

make

possible

the saving of much time and
fort

in

buying and selling,

the goods may be

considered,
actual

of

case

all

ef¬

since

offered for sale,
without

bought,

physical inspection;/ In the
agricultural goods, we are

familiar with

terms
No.

and

as

U. S. No.

hard

2

ingly

the

such

1 potatoes, and

wheat,

rapid

of

use

and

progress

increas¬

is

being

made

in

ing

host of manufactured items

a

standardizing and

grad¬

bought by industry and household
consumers.

tions of

While these two func¬

marketing do not directly

involve credit, they definitely fa¬
cilitate borrowing on stored

goods.

The banker or.commercial




banker is

human

Two

in

persuade

to

effect

have
the

most

a

people
whose deposits the bank needs for
its

upon

earning assets and

its profits.

When you pick up the telephone,
no matter where you
are, you can
be

never

but

sure

carrying

in

your

hap£

I should

the

reputation

say

that

you

are

hands, or perin yobr voice,

of

bank.

your

Therefore, I would make

an earn¬

est

plea for the acquisition of
good
the
telephone
habits for
utilitarian

with

of

I

motive
would

of

dollars

also

manners

whom

for

deal,

we

a

courtesy

but

and

good

urge

higher
to
all

the broadly

widely

forgotten

within the limits

time, I have tried to give

my

brief historical
spective and to analyze with

per¬

the

men

you

a

very

not

not

a

but

usurer,

being, and that banks

parasites,

but

a

are

social

useful

and economic institutions.
Another

money

major

of banking with an¬
economic activity—

distribution

of

Banking in
marketing
and
marketing
in
banking—two of the many over¬
lapping circles of business in the
consumer

or

user.

modern world.

it's

Perhaps

scended from

a

because I'm
de¬
line of clergymen,

but whenever I have the privilege

of

giving

business

talk before a
or
professional
a

group—

people,

banks have used
marketing principles is by devel¬
oping products to help them sell

club women, faculty members, or
students—I almost always add a

their

main body of analysis or
tation in my remarks.

way

product

American

—

thrift

people.

—

In

the

to

this

cate¬

fall parking facilities, drivebanking or "sidewalk tellers,"
monthly billing of savings, spe¬

few

words

of

exhortation

interpre¬

use

of

machines

to

speed up customer lines, and even
left-handed
nursery
mothers.

check

service

books

for

and

banking

opinion, perhaps the most
important aspect of marketing by
banks is the job done by each one
of you who has any contact with
the bank's customers.

partment
I

am

store

more

In

the de¬

field, with

familiar

than

which
I

am

with the ins-and-outs of banking,
we

Let

adjuration
by saying that I think' it is a
splendid thing, educationally and
economically, that nearly 100,000
of the 500,000—more than one in
everv

me

preface

my

five—bank officers and

em¬

ployees of this country belong to

In my

refer to customer-contact

partments. '

Perhaps

that

de¬

same

would

before

to

Christ,
and

remembered

and

as

repeated

devil

the

alone.

By JOHN DUTTON

for many years.
There are many points of view and
entirely with the way each individual dealer conducts
Although merchandising of securities can success¬

industry

vary

business.

fully be carried out ir* a number of ways and by various methods
of procedure as to pricing, commissions, etc., it may be helpful to
review here some of the most generally accepted methods of

briefly outline certain of the ad¬

business, and

listed

handling

They also rely on mutual funds to a certain extent
they will always have acceptable merchandise for
their sales force by making some funds available.
They do not
soecialize in any particular group of securities.
They try and
pick values and do some research work but carry relatively light
positions. They may, or may not, have an active trading depart¬
ment.
Usually they do not have a busy trading department, but
if they do, they try, when possible, to coordinate the activities of
that

feel

and

difficult procedure but if timing 4s good,
wholesale and vice-versa. The advantage of
this set-up is that salesmen can a3ways have something to sell
upon which they can make a profit.
The disadvantage is that
it is impossible to give a complete investment service to clients

the American Institute of

Banking

half

members

and

that

of

your

actively studying professional
subjects at any given time.
I
very much doubt that the prac¬
titioners in any other segment of
our
economy
can
come close to
matching that record—I wish that
are

others would make
so.

.

.

.

an

is

This

both.

retail

very

securities

listed

unless
manv

a

augment

can

made

are

available

to

other considerations which cannot be gone

them.

There are

into in this space

at this time.

There

sion

are

of all

firms that now handle Mutual Funds to the exclu¬

outs

and

on

Securities

straight Stock

a

brings about a high
only handled as trade-

Specialization in this field

else.

concentration of sales effort.

are

Exchange commission basis.

advantages here are that salesmen can learn one story and
The disadvantage of

well.

The
tell it

this type of business is that in the next

clients (in fact a complete clientele) may be
This could happen, however, to any firm unless care
used in building up sufficient stable assets in every account

depression

many

wiped out.
was

prior

the

to

debacle,

no

if they sold funds or general

matter

securities.
there

Then

double

with

is

the

Sometimes

securities.

firm

that

listeds

commissions

are

added

sells
sold

or

both
as

special

listed

and unlisted
sometimes

agents and

service charges.

An

attempt is made to build up accounts on the basis of controlling
all the business in that account.
All securities are evaluated from

standpoint of what is best for the individual investor or client.
are studied with an eye to proper distribution of funds,

geographically, of com¬
The main disadvantage of this ap¬
proach is that it takes a little longer to educate clients along sound
investment lines.
The advantage is that once salesmen start to
sell programs that fit the client they begin to build a clientele. The
choice of securities and the skill with which these portfolios are
diversification of industries, of locations

panies within industries, etc.

arranged, however, will determine whether or not this clientele
live.
A plan for quarterly or semi-annual review of cus¬

will

tomer's

holdings is helpful in

making this plan continually ac¬

A bad

market break means that clients

ceptable to customers.
have to

be resold—this is true of

there

Then

are

firms

that

They work mostly In finding

the business in general.
"special situation" minded.

are

undervalued sleepers—bonds, pre¬

ferred, common stocks, here, there and yonder.
When they think
: a dollar can be made by buying and holding they advise purchase

Value of Banking Education

in

increased

must have bread to live.
Moses told his people 14

position of the unlisted dealer who cannot make a profit
selling listed securities unless he charges an extra commission has
been the subject of much argument throughout the
securities

the

to

gory

cialization of teller's windows and

as

The

you

interrelationships of the

marketing—the

that

public

the

Man

centuries

Securities Salesman's Corner

Portfolios

economic

,

But,

pro¬

bread

the

the

importance of the intellectual and

spiritual aspects of life.

Third, complex economic activ¬
ity is only a relatively recent de¬

to

in

per¬

velopment in man's history and is

importance

out the year and

of

sense

tempting him in the1
wilderness: Man shall not live by

goods and services from producer

better

a

our

Christ

idea of their general services and

public

better job.

principals.

information may

adverse

and

the

a

lose

for

other

to

to

do

eco¬

about
But let

spective—our feeling for relative
values.
Let us not forget the vital

but
its
serve, ,not to

complements

to

not

our

and

vantages and disadvantages of so doing.
There are firms that sell only unlisted issues and act solely as

time in the future, but they have

bringing

is

works

system

Let us

be useless without themi

Many goods are produced season¬
ally and used throughout the year.
manufactured through¬

us

process,

only

Others

are

highly useful
but its function
a

how

about

more

nomic

proper-

a

callings.

our

gish "HELL-O" or "Bookkeeping"
and a grudging assent to a request

made substantial progress

in

rule.

his

with

This afternoon,

the

learn

propo¬

duction and marketing and

they

consumer.

market

function

for

respect

Second, banking is a highly use¬

employees

otherwise go

to

engaged

is to serve, not to rule.

economic

means let us who are
in banking and market¬

all

By

life of

the

to

literature, science

art,
religion.

how

First, money is

than

ing and production have

sitions:

been found that behind-the-scenes

of the

three

these

I

point I wish to put in a
plug for telephone courtesy.
In a good many business enter¬

have

and

ac¬

to the material
demand, but it is

essential

to

Golden Rule. As G. K. Chesterton

only have banks been try¬

mind

toward

leave this

and

educational

man

now

we

your

efficiency

of the

would

in

necessary

not be so clear,
indirectly involved in

but you are
the

home
daily

I urge you to augment
your technical studies by develop¬
ing, through general reading and
thinking, your sense of perspec¬
tive, your sense of values. Please
bear

is

more

may

fighting for
purchasing power that said, "Christianity has not been
into tangible tried and found wanting; it has
and intangible goods and services been
found
difficult
and
not
for immediate enjoyment by the tried."
some

and to your

Our intricate economic sys¬

comfort
not

exist¬

aspect of man's

one

tem

com¬

tivities,

ful

vault

as

only
ence.

speakers call it.

When you go back to your
communities and to
your

savings

tising

radio, billboards, etc.

mencement

invention of man,

advertised

magazines,

applica¬
trust officer
an

my

the way the
treats a client, the way the teller
takes care of deposits, the way the

tion,

motive—general

newspapers,

secre¬

tary answers a question of the
stranger across the marble rail,
the
way
the
assistant
cashier

present pleasure for future gain—
banks have for years been adver¬

in

guard

directs the uncertain old lady, the

telephone

idea of foregoing

the

preface,
adjuration,
my
"charge"

you

work

which

in

way

cents.

the

In

imselling transaction.

amounts

to

one

cases, unfortunately, it is an

selling thrift and security—which

and

marketing

of banking is storage.

money

is

de¬

accounts

th^t

know

I

host

ing

hnd

to

Not

and

study

increased

position,

another

Buicks.

Siorage

this

of

1948,
sig¬

,

and

ductive and marketing process are

in
most

Checking

first

second.

under the control of

Rela¬

section deals

"the

of

a

the top objective of 1948

in

You

stages of
a

that

advertising."
were

American
devotes

"Public

one

finding

as

were

1948-49

advertising

emergence

posits

suit.

the

to

tions," of which

of

print

a

of

book

nificant

short

portation,

employee and customer

or

prises,
men

mar¬

use

The

Association

times before my wife buys
I buy a

Marketing

customers.

pointing out

or

are

basis.
Aid

of banking

banks may have been used several

dress

they

look at how the

us

money

Bankers

con¬

money

when

cash

a

reference

and

and
through

marketed

are

stores

sumer.

hand,

dividing, plus buy¬

Banks

vidual

men's clothing

or

other

keting in selling their services to
business, institutional, and indi¬

wom¬

clothes

on

Now let

converter and to the

a

the

selling

How

The weaver's product in turn may
go

man,

of

ing

marketed

markets his product to the

On

and

cotton is grown on
and
farms
and
is

raw

plantations

bankers
let us

are

marketing does not in¬
volve banking—the
functions of
transportation, physical assembly

consumption,

over

you

marketing

marketing.

factories

and

Since
a

am

phase

size.
We would see that
they overlap considerably, but by
no
means
entirely.
On the one
hand, much of banking is for pur¬
poses of
production rather than

process—

production

in

this

forest.

equal

the

times between

several

occur

the

the

or

be tactful and make the circles of

buying and selling functions of
marketing—as a matter of fact
may

in market¬

of the
us think of banking
circle and marketing as

one

and I

out of these two functions.

We

me

ex¬

way

the

the farm, in

on

factory,

another.

essential to the carrying

are

examining

production

Summing up
discussion, let

by

as

stand¬

ing because that is my topic and
marketing is my field.
However,
I must point out that the men and
money of banking are also essen¬

negotiating price and
the transferring of
In a very large proportion

buying

be

let
my

some

commodities.

of men and money

use

and

credit is utilized.

of

consists

been

have

We

buyers,
title.

collateral

ardized and graded

stimulation of demand, the finding
of buyers, the giving of advice to

terms,

complimentary
give

evaluating its security for loans if
the

At any

officer

sense

better basis for

a

field.

rate, every contact between bank
or

Men, Money and Marketing

23

(731)

effort to do

Now, after that sincerely

This type of business can be very profitable at cer¬
when things are in the doldrums it can also be

by clients.
tain

times

very

slow.

but

commission earnings)

gains yourself if you
such operations.
The

to tide
today (on.

You have to make enough in the good years

the dull ones—but with taxes where they are

you over

had better make some of those capital
expect to keep much of your profit from

you

I have written this is

reason

just to point out

a

few of the

variations of the investment securities business as it is con¬
ducted at the retail level.
There is enough here for a good sized

many

outline that a
if a success is to be made
of this highly complicated business we call retailing of securities.
Some firms have made a success out of just going ahead and sell¬
ing whatever they came across, sort of going along with the times
and the tides, as the styles changed in public acceptance-and de¬
mand
for securities.
These cases though seem to be in the
book.

However, it seems apparent from this short

plan and

minority.

a

set procedure are necessary,

-

•

24

The Commercial and Financial Chronicte

(732)

rnvtinupj

irnm

^er

sumption as to Ue possible formula to be enacted, he applies tne
formula to the published statements and then submits his results
to the particular corporation lor

(

DvAfVlQllllvrA
lUSPCvIlVv

T^V

K1CAC

1 €IA

XllilCil

•

*«•«■■

f

A

nf|

IltlllllPC

f)|Q

fill 11

vllllllVil

HftC

its

adjustments

Frankly, it

Consolidated

—the pattern
enacted

and

basis of

beneficial, the 1947 to 1949
..verage
earnings could be used
a.

-

The Analyst's Third Difficulty
The third variable is the matter

income tax should be at the cor- ings of the corporation will be,
porate rate applicable to the ex- either in the form of book net

„

Analysts F.rst D.ff.culty

The

*2.22 a Si.are would be cut to the company was
earning less
approximately $1.82'a share, after than an allowed rate o. return.

want to recourse to reliable tax iigures.

d adjusted tor income tax at tne
rate applicable in the excess prof- of gazing into the crystal ball and
its tax year. The adjustment for determining what the future earn-

for what was later
which is now the

concern.

our

you

eral excess profits tax. Attnougn
sucn taxes were created by me
formula of calculation and were
not true excess profits, sucn rcfunds were ordered eve.i tnougn

be tne picture t~e analysts woui^
ooiain b> t..e u_»e oi publisueu figures. On the ocner'hand, you will
aiso note that the realities of hie
situation wiil probably be that the '

Regulation Creates Different
Conditions

Conclusion

more

rn

FHisnn

correction.
plan common

ana

just

is

those corporations which would sense to do this if
"ns the average earnings method be right.

S. RODEY, Jr.

By B

IVUnager Tax Dept.,

Thursday, August 24, 1950

.

be hurdled by the ana- $2.22 per share might be reduced made to customers when utilities
makmg j-Aja first as- to $1.09 per snare. i\ow this couia were found to be subject to Feu-

come, may

1 ?

nnrtP

j / uiiL puye

.

.

jnriustrv

keerilv

is

Because

the Dublic utility

oDinion

stantial

that all

-aware

the

of

sub-

for

need

increased

ail

reverues

segmenUofMus^musthn- texpayU^t^be S
,rfbute the?r shareShe ftaancSl bear their rTasonaUe share ol
'»e I1"3"".3* „eLed Lxes

t"b"t«'

^^of thfs cSy

in

any

hnr

w

exlh

V,,

excess

"he S

profits do not
for determining wnat
subject t0 excess
f

na-

to

in-

taxable net income Of tlonal emergency.: -'
income is
course, this should not be too dif'
13
excess
nrofits tax is the lack of
ficult in the utility field, because
jne private tax-paying utility
.
fm-mni 1
t
.
a
Secificknowledge
0
of the long-term steadiness of industry, howeve^s not a static J£ated aLt^v i
olace
in Te
specuic
xnowie gt
o fwMU
i
i
their revenue trends
at least in
or declining industry. It is pres- lated
placcu 111 l..p
exact formula, to be exacted, will
tneir revenue irenas, at least in
.
PXDPriPnrjn« ■
trempndeus position where the excess profits
be. An assumption, however, may 45% For corporations electing the the larger companies.
However, emly expenencing a tremendou tax .g Jevied Qn .
Ule
possibly be made provided a look invested capital method the base
here are some hazards in placing ^ wUT s1 ^owth is not alone
should be
^
is taken at what kind of a tux
would include equity capital ac- too mucn emphasis on pasi earncnoice bntisoneof lor j securitynclders.Tne result!
formula may be necessary to pro- cumulated earnings and 100% of ,ngs and trends in view of tne
owLate utmUes to as you will appreciate, is a dimiduce
the
needed
governmental borrowed capital. From this base, potential
economic
dangers
of Quirerncnts Obligate utilities to
^
^
revenues and if one listens care1 would compute the excess profits complete mobilization and further P^oviue seivice to the constantly
imt)air<. the value nf unlrv
fuUy to the more reliable of the credit by
or some national complications.
Washington! grapevine news- For
Incidentally
the
Possible Degrees of Error
amounts.
Further, utilities are sale of equity stocks at a reasonThe

cess pronts tax year
If the income tax rate were 45%, taxable
income in the base period years
1947-49 would be adjusted downincome tax comouted at
ward
income tax compuiea ai

analyst's first difficulty in

impact

the

determining

of

an

mcome or

.

.

,

a

^ucT^ IfSS

^ar1^s

svsssa artss su&ss&a

ssra? aw&rs tst

uuring a national emergency when
be
further
infeTre^
such earnings are repugnant to
higher income trends already evi- the public interest. Consequently,
denced in 1950, that the re-imposuch a tax should not be the sole
sition of the wartime tax mignt cr perhaps even a principal source

profits tax impact, I would
like 1o demonstrate how far ofx
we might be from the answer if
we were to apply an arbitrary,
although possible, formula to tne
produce in excess of $10 biLion, o. wartime revenues.
actual figures of five of our utility
obviously perhaps much more aciBased upon Treasury statistics companies for the year 1949. For
ditional revenue than Washington
for the year 1947 and projecting this purpose I have prepared simmight care to legislate at this time, them by the net income of leading ulated figures-of five utility camMost analysts, I
believe, app.e- corporations reported by-the Na- panies-designated as A, B, C, D
ciate this situation and are reaiistional City Bank,, it appears that anc*
^ am confident tnat you
tically
looking toward a
more tae total taxable income in the may
view the results as being
liberal formula,
vears
1947, 1948, and 1949 aver- reasonably significant of the pos•'
It is impossible to overstate here . ged about $34 billion. Based upon si^hties for serious error
from which it may
from
ue

billion

$8

as

cess

.

the

the most recent report of The
National City Bank, the indications are that taxable income for
the year 1950 will be somewhere
in the neighborhood of $43 billion. By using 90% of the 19471949 earnings, the base period
earnings would be, after a 45%
income tax, approximately $17
billion.
The $43 billion in 1950
reduced by income tax at 45% is

of

importance

far-reaching

the formula which any future excess profits tax law may include,
Certainly, the financial community
is completely informed as to t-.e
efficiency-discouraging effect of
excessively high and inequitable
taxing rates. We haven't yet forgotten the demoralizing effect of
the 15 cent dollar days. Under the

guise

yield,

the

increasing

of

s=r bp. szg a««-y-4

uency a.;d linancial stability must

for nlant

be adequately maintained.

excess

According to a recent forecast
of capital expenditures through

•

en

framed t0 raise tax
h

1953 prepared by the Edison Elec-

t

trie Institute, the electric utilities

jt

fornula

f

vh-nmion

p^l"law
revenues as
rat,ier

tnan

s\Dhon off tiue excessive orof-

rpeulated utilities

are

vaiious-

alone neea $6% billion for new iv' affected depending iar-miv on
construction, i The new money 1 ■ .
CQst
° • | (
needed to be financed through the ^uies an aiy0
adeauacv or
security market is nearly $3*/2 inadeauacv of earnings incluaed
billion. Since the debt ratio bus -n a ^
perjJd
°
increasei from 46.5% in 1945 to
Obviouslv
it'is difficult to ina
49.8%, practically b'3'%, at the corpora e in'^ny tax bill sufficient

present time it appears obvious alt£rnaiives to protect all comThe fgures :show n<ane case the that a substantial amount, per- panies against payment ofexcesl aps as muc,h as hal.f °f t.'?e
sive taxes. The pu.port of statepubhshed income would in- money must be raised througn me, t. whieh Senator George ana
dicate that the actual earnings of equity f.nancing.
Treasury Secretary Snyder recently made concerning a,i excess prof-

Qn mjUjons)

its tax indicates that past experi.

^

Expenditures

LOMtructwn Expenditures
treasurr t.asn —
ew Money
.

$2100

*1 «W(V

900

$2,100 ^$1-900
1,378

$l,2o0
904
346

$1,500
°o5.
b45

1,107

the difficulties of

Proved

ence

$1250

writing an excess profits tax that
willnot be full of injustices. Those
whQ 0pp0Se sucb a ieVy urge that it

standaids

is inflationary encouraging spe. d-

utility earnings by Federal, set by regulation as constituting
effect, were ini,robillion
^7 billion statc and local commissions is to a fair return on the value of their
duced which proved to be merely
$
^.bihrt to
' limtt them to a stated return after property devoted to the public
penalties on sheer corporate size, would1 *> income subject to ex- normal t^xes 0n the value of prop- service. While the power of the
Certainly, every effort should be (*ss
tax. Were an ex- erty devoted to public
gover. ment to do this and set any
?
3 mPr®
"O
P
raispd would
tbese earnings the utility standard tney wish auring a nasetup for all corporate industry
annrnximatplv
hillion
companies must provide for in- tional emergency can .ot be chalwell as
for
the
utilities
which be approximately $5 billion.

inS a"d waste, is diJicult to administer and is not as big a revenue producer as appears on ti e

modifications
tax

small

relatively

or

revenue

.J

thp

hptwpen

<R24

billion

The

effect

of

prjce reguiatioris

below the point of tKe

uP°n

or

-

p

n

ture

meeting their heavy fu-

in

financing

to

the

for

care

present rate of expansion as well
the

as

any

prospective increases
new defense effort.

Need

Distinguish

to

for

It

fair

consideration

°tax Ts
is

is

revenue

this estiextremely

rough because it neglects the alternative invested capital method
and
because
it
averages
many

to be

ana

stock.

Because price regulation is

continuous, public utilities
even in normal times,

not)

muiate

that

the

rec0gnizes the

principle

can be no excess pro/its
until income tax is first deducted

levle^mull ^
ea

obvious that there

can

e n«e s

that

that

or

sources

other than the

excess

which

will

sition

of

of

result from

an

overly

the

severe

imooexcess

profits tax will seriously jeopard-

^

The

higher

rate

tax, the

the

income

rate

For

corpo-

this reason, the

which

on

of

important does

more

this become.

tax.

mcome

an

excessive

earnings tax is to be

Jcvied should
tSbie mcome, reduce^d at least
\ncorn® J?*,',

with

Wn I
principle; embodied
if
™ a" ?j*,CtSS Pratltf
law a
siari wouia oe maae toward making

an

nrofits

excess

tav

mnrp

The question naturally arises
to whether

its tax

law

or

not an

excess

as

pro»-

embracing the de.uc-

tion of income tax

in

real excess profits tax could be
devised 1° raise at least $5 billion

a

of additional

revenue.

Such

a

law

would include the computation of
excess

the

profits tax either through
earnings method of

average

the invested capital

and

rates,, personal

corporate

income in lower

ex-

brackets, and the

method.




For

in

surtax

amount subject

arriving
to

excess

at

label

^

profits

excess

a'

Ry CHARLE&JVIGAND

Commonwealth Services Inc.
-

*l

Continued from page 13
cation

to

years

No

the

W*ss

nrofits

matterw" at

group

vear

the

tax

of

werTmade for SSt and

when thp f

^
,

.

u

should
be applied on a formula
which corresponds to the pubuc

ilitips <*tarip i parnin^

1r?
der cither the Invested Capi,

■£

a

Pr ^ ously in

*

utility's commission base for com-

^armngs

piJ[^ng rate of return under such
a formula, if utilities earned an

J^

excessive return because of in-?
creased earnings and economies

^^cpailed to a 1 w

a dedu?tl0rl tPJ-an

which might result from a belter
load factor under war production
conditions, any such excess woulcl
be subjected to Federal excess
pr0'its taxation,

f

local public utility commissions, b^Xf\n airlvin°jS:Vl e amoun
The Second Difficulty
seeing that companies were pay^Jcct to excess profits tax.
Second, having hurdled the firstling so-called excess profits taxes,
While taxes ^ra^n element of
assumption; that is, the question caused refunds to be made to cus- cost and as such should be passed
of what the formula may be; our tomers:
As the result, the very °n to' the consumer, regulatory
_

Ti

*

A

iT_

I have had a-short tabulation prepared which describes some of the

important

more

variations

be-

gifts of extra sensory
it is beyond most of
us "bookkeepers" how an analyst
can possibly ge a correct answer,

even

'

n

your

perception,

except by way of coincidence, out
of the published corporate finanThis

second

income

difficulty,
versus

i.e.,

taxable

of
in-

(2)
...

.

Under any method
•

_

.

of de-

p..

•

produce one dollar of earnings This was the situation with excess
profits taxes in the neighborhood
85%%; -Therefore, any diminution in e rni gs, resulting from an
excess profits tax, would fall on
the investor.

in ascertaining the income whicft
will
subjected to excess profits
tax. This treatment was accorded
under the seconf revenue act of
obtaining the large amounts of
1940' but discontinued thereafter,
new capital necessary for current
(3) Under the Invested Capital
expansion.
method
of determining excess
The last excess profits tax law
Under the previous excess prof- profits net income, borrowed capiwas
imnrooerlv named because it its tax law, the very purpose of tal should be included
at 100%
mnf.
,o
collecting additional revenues for thereof instead of the 50% limitaof this-, condition
place the utilities
precarious position because
adequate earnings are essential in
A

repetition

would

in

tend

to

a

p

cial statements available to them.
book

;

nf top lae
anY
tax
tin?#-expenditures law ^PPlied to regulated utilities

the

profits

tax. In certain instances, state and

present tax exempt categories.

most careful consideration
^ subcommittee oi tne E. E. I.
and A- G- A- j°int Taxation Accounting Committee has been
studying the matter of excess
profits taxes and we can get as
many differences of opinion as
there, are repre entatives present,
because practically no two situations are affected alike. Nevertheless> there are certain fundamental principles on wr.ich agree-

if

tax,

'

between

surtax

the

the

and

ceauent

profits

cises, the broader base normal and

attention
would
be
hroader
base manufacturing

the

'~dearfis
it ment is general and these are:
reasonable earnfe^oTan^sub- U)Fundamental
Principles
Tbat
excess profits

of calculation prescribed by law,
among other things, failed to allow the deduction of normal tax

viting

arriving ai tween these two net incomes. With

earnings

would raise tne
necessary revenue. I believe that
excess

tax

tax abandoned

substantial so-called

excess

of

name

is

Under previous excess profits
tax law, utilities have paid very

p

corporation

the

Recognizing that popu-

profits levy inevitable, tney urge
that it be enacted only aiter the

done, should be correctly
designateu as a war or defense

substantial
earning
power

provision
hafbSnUZf
for" the fully
pr,°,fits ta,X £leld ™ght 1e fruit" taxes-"°' bfaa« they had exM,
1 a
^r.
e U1
explored. Among those m- cess profits—but because the basis
normal

this

any

are

peded later
for the national dewar effort, it would seem

jense

can-

accu-

lenged,

any

might be therefore,

}^e reyenue
tax

of

excessive

teregt) ginking fund requirements
on
debt and dividends on capital

substantial 'excess
Yet it does give some earnings for expansion, it is clear

that there

earnings

ings.

of

rai?ed throuSh an excess Proflts impairment

excessive

malEarnings1 and'^rcesrfue^aramai

recognized that

is

companies.

.

earnings

it
irate

Between

and^FvPPsfivV

Normal
i>ormaiaiiu

Any

surface.

lar pressure probably makes a war

t

otherwise might be seiiously ham-

pered

px

sive earnings.

exce-sIn fact, with many

utilities it reduced their earnings

tbe pederaj Government

was

de-

feated by some regulatory commissions causing1*1 refunds to be

tion provided in the prior law.

(4) Under either the
Capital method or the

Invested
Average

Volume 172

Number 4936

.

.

The Commercial and Financial
Chronicle

.

(733)
Earnings

method

profits

excess

should

be

credit

of

determining
income, there

net

allowed

i

an

Continued from
page 5

substantially 8% on all
additions, whether equity/

capital

borrowed

The State of Trade and

or

earnings and profits
during the excess profits

made

tax year and

subsequent

tional
trucks, aircraft
lockers, etc.—all heavy

years.

credit should

freight

additions created within two years
prior to the effective date of an

(6)

Under

method

borrowed

included

should

be

in

capital, which

Invested

added

Adequate

(7)

is

back

in

true

that

total

Capital,

relief

any

^essential

obtain

to

larger share t)f
shortest

provisions

should be incorporated in
any law
to take care of hardship cases.

some

mills.

t®

But

of

from

Convention

Governors

institutions

be

to

held

September 6

Fifth

Boards

Annual

both

in

Paris

International

these

the

programs

will

steel

really

require

a
which

products

is

of joy

ay

the

is

in

on

a

r

the

of

for

or

a

attribu ed
became

Re-

in

the

effective

This

steel

by

Grain prices

rampage

week's

the

on

into bottlenecks.

The cash

rolling

mand

of

to

steel
the

fjr

the

entire

industry,

year

at

a^o

Cotton

mated

at

kwh.,

according

Edison

the

to

a

Eugene

and

will convene

R.

Black

the Annex

at

Bank of France, Paris, Wednes¬
day, Sept. 6, 1950, and will last
through Thursday, Sept. 14.

The

President

the

of

Loadings of
totaled

freight for the week ended Aug. 12, 1950,
according to the Association of American

cars,

This

was

increase of 10,247 cars,

an

or

1.2% above the

preceding week.
The

French

week's

Republic will address members of

16.4%

the Boards and the public on Sept.
at 3:00 p.m., following which a

43,811 cars,

total

aboverthe

represented

an

increase of

corresponding week in

119,436

1949, but

cars,

or

decrease of

a

4.9% below the comparable period in

or

1948.

6

formal joint session of the Boards
will

be

held

ference's

to

begin

business.

the

Chintaman D.

Deshmukh,. Chairman
Boards

of Governors

M nister of In,

of

t

e

Finance

and

ia, will preside.

will
of

Board
on

be

presented

Governors

of

the

Fund

Thursday, Sept. 7, at 10:00

in

address

an

by Camille
Managing Director.
•

Eugene

R.

Black,

the

to

a.m.,

Gutt,

President

of

the International Bank, will speak
at the same hour on
Friday morn¬

ing, Sept. 8.
Bank's

wi^en

Fifth

he presents the

Annual

Report

During

the

meeting,
in

meet

remaining
the

closed

days

Governors

session

to

to

creased

the

on

schedule
clude

agenda.

this

three

year

ago.

mained

and

The

operations, policies

the present time.

Total

output for the current week

ard

cars

closing session at 3:00
Thursday,
Sept.
14,
wl en
Boards

31.300

of

of

to

p.m.

for

conduct

of

the

the

Boards

ensuing

to
of

year

Gov¬

elect

Gover¬

and

closing arrangements.




the

United

States

and

States and

and

to

The

of
a

153,477
total

overall

of

trucks

built

6,696 units in Canada in the like week

Regional
percentages:
Coast

the

of

succumbed.
Continuing below the
24% less than the 1939 total of 253 in

similar week.
Retail

week's

and

dip;

commercial

manufac uring

wholesaling

remained

service

and

casualties

construction

unchanged.
but

More
a

decline.

Middle

In

ago.

than

all

Atlantic

and

Pacific

other

retail

and

for

rose,

the

while

construction

decline from last year's level

appeared in other industry and trade
mortality off most noticeably.
The

accounted

failures

groups,

reported
increased or

a

weekly

where

the

East

North

Central,

Mountain

and

last

week,

housefurnishings continued

estimates

and

be

varied

period ended

from

from

6%
last

to

on

10%

year's

Wednesday

above

level

a

by

year

these

Northwest

+5 to +9; East and Pacific
+6 to -f 1ft and Midwest and Southwest

+8; South

abnormal

wholesale

buying gradually declined in the
was sustained through a large influx
bookings in durables.
The total dollar volume of
slightly above the level for the corresponding week

advanced

year

Pacific

States.

Marked declines prevailed in New
England and the East and West

The number of buyers attending various wholesale
moderately last week,' although it was slightly below

rose

the level for the similar

Department
the

Aug.

12,

1950,

increase

as

on

a

country-wide

Board's

index

for

basis,
the

as

week

taken
ended

26% from the like period of last year.
An
(revised) was recorded in the previous tveek
year ago.
For the four weeks ended Aug. 12, 1950,

a

rise of 36% from the corresponding period a year
year to date register an advance of 4%.

trade

it

Reserve

rose

a

for the

Retail

1949 week.

sales

30%

of

sales showed

ago, but

store

Federal

from that of

lated

regions, casualties
remained
The only market rise occurred in the South Atlantic.,
16 businesses succumbed as
against seven a week
Five of the nine maior regions reported mbre casualties
last year.
These included the Middle and South Atlantic

States,

sales of

estimated to

England

+ 4 to

from

with manufacturing

States

somewhat

rose

+8 to +12.

businesses
were

was

ago.

ago.

94

food

Total retail dollar volume in the

centers

when

dollar volume in

week, the high order level

preceding week, Dun & Bradstreet,
Altbcugh casualties were slightly lower than a year*
193 occurred, they were almost twice as numerous as

level, failures

buyers

large appliances in many communities.
A sustained demand for
floor-coverings was also noticed in scattered sections.
Furniture
buying was aided by nation-wide promotions of foam-rubber
novelty pieces and modern bedroom suites.

was

1948

both

the past week, but at a more moderate pace than
formerly.
Con¬
interest was heavily concentrated upon television sets and

orders

in

with

sumer

a

prewar

and

commitments.

new

by Heavy Buying of Soft Goods

increase in the retail

Inc., reports.
when

minimum

a

making

following price-rises in certain items.

of last week

Commercial and industrial failures dipped to 186 in the week

ago

trading at

offered storm coats, pajamas and shirts.

New
cars

a
reduction of 5,820,000
16,128 000 bales produced last season,
10-year average.
Cotton textile prices re¬

line, coats and suits
increasingly requested by shoppers
Promoted women's ar¬
jersey skirts and sweaters; men's promotions

ended Aug. 17 from 194 in the

unchanged.

nors

in

the

with

This represented

the

ticles included wool

While

States

officers

in¬

Business Failures Turn Downward

the

will meet in joint session
choose the site and date of the

meeting,

bu;P

up

below

firm

Boar4

the Crop Reporting

children's clothing was noticeable in
many sections of the country;
boys' corduroy suits and girls' plaid dresses were among the items
promoted in children's wear.
In the adults'

1949.

to

annual

trucks

and 2,174 trucks built in Canada.
The week's total compared with 142,663

ernors

next

week,

present models.

made

was

an¬

substantial

There was a substantial increase in the retail
purchasing of
apparel the past week.
A pre-seasonal interest in back-to-school

cars

businesses failed than in 1949,

Conference is scheduled

fmld its

Fund

past

Canada

were established months
before the Korean situation developed.
Key suppliers switched to
new model requirements
long ago, it added, and are currently

on

following

for

buying of soft goods during the period
ended on Wednesday of last week
helped to raise total consumer
spending for that period.
Aggregate retail dollar volume was
moderately above the level for the comparable week in 1949,
Dun & Bradstreet, Inc., reveals in its latest
summary of trade.

An

shipping components which could not be used

close

market

were

Trade Volume Lifted

the

Bank's

year

by the Governors of
exchange,
monetary
and
fiscal
problems faced by the member

and

the
and

postpone their changeovers since the dates

discussions

Bank

States

The agency said the week's
showing was creditable in view of
labor troubles and mrdel changeovers
by firms including Packard,
Nash and Hudson.
Although their respective dealers were short
of cars, it declared that manufacturers were
powerless to delay or

of

activities, to be conducted by

The

Reports"

United

discuss

the principal officers of the Bank.
The Fund's schedule will include

countries at

the

the

sharply

and sellers hesitant in

.

in the United

will also in¬
informal panel dis¬

cussions of its

Automotive

in

at

the

this

of

11%

and

were

estimated total of 192,511 units, compared with the
previous week's total of 182,965 (revised) units and 149,359 units

the annual reports and other mat¬
ters

"Ward's

production

prices

was
10,308,000 bales.
bales, or 36% below

an

5,560

will

Output Improved the Past Week

to

vehicle

to

the Bank's Board of Governors.

the

According
motor

a

The Fifth Annual Report of the

Fund

Auto

Con¬

in

was

A noticeable rise in the

revenue

847,4-^5

Railroads.

Army

The 1950 cotton yield as forecast
by

fresh historical high record

Carloadings Advance in Latest Week

of the

coffee improved

.

Electric

20, 1949, and 979,042,000 kwh. in excess
of the output,reported for the corresponding period two
years ago.

Development

in

the

good volume, totaling 354,000 bales
360,900 the week previous, and
69,900 in the corresponding week a year ago.

for the week ended Aug.

construction

firmness,

a

in the latest week, compared with

It was 116,689,000 kwh. higher than the figure reported for the
previous week, 791,030.000 kwh.. or 14.2% above the total output
Gutt

by lagging de¬
scarcity of storage
aided by buying against

and

ten spot markets remained in

for the

Camille

influenced

interests

dealings as the result of heavy hedge selling against
CCC pooled stocks of cotton, and the movement of the new
crop.
Final quotations were up about 30 points over a week
ago. Active
mill buying helped to support the market at times.
Sales in the

Institute.

Output for this period attained
industry.

also

was

export
relative

what in late

of electrical energy distributed by the electric
industry for the week ended Aug. 19 was esti¬

6,3§9,830,000

that

rose

forecast

•*

power

States

irregular last week.
After a weak start,
following publication of the first official
year's crop, indicating a much lower yield than
that shown by previous private forecasts.
Prices receded some¬
values

to

Electric Output Attains Further New High Record
amount

largely

in the United

quantities.

84.8% and 1,563,300 tons.

The

of grain

crops

last week.

be downward,

the

by

The undertone

a week agi.
A month ago, based on new capacity,
w5& 98.9% a-d production amounted to 1,894 800 tons; a
v
—aller capacity then prevailing, it stood

light and

market

and

showed

nouncement

1,930 600 tofts
the rate

range

is indi¬
Aug. 1 report of the Department of Agriculture.
Although below last year's yield of 1,146,000,000 bushels, the de¬
cline is more than offset by a larger
carryover from last year's
production.
The 1950 corn crop is estimated at 3,1-38,000,000
bushels, comparing with 3,378,000,000 bushels last year, and well
above the 10-year average of 2,901,009,000 bushels.

which

compared

wheat

mill

Corn

cated

ing ra'e is equivalent to 1,747,400 tons of

castings

in a fairly narrow
i>f prices continued to

moved

A total wheat crop of 996,000,000 bushels for this
year

price $1.33

strike

a

fair.

with price increases

terminal

corresponding date

export sales and a good demand from industrial users.
Oats
prices worked lower in light trading; shipping demand was only

capacity the current week is

railroad

from

space.

Monday.

opera

ingots- and

rate

the

on

and Canada.

the entire industry will be

Institute

and wtih 236.41

years,

The general trend

90.6% of capacity
Aug. 21, 1950, compared to 100.1% a week
drop of 9.5 points.

This decline

of

two

over

proportionately
are
already in

.

still

ago.

reflecting prospects for large

.•

scrap- market

year

year ago.

blooming-slabbing mill. The
obtaining a supply of ingots

over

a

The daily wholesale commdity price
index, compiled by Dun &
Bradstreet, Inc., moved lower the past week to close at 278.80 on
Aug. 15.
This compared with 284.17 on Aug. 8, the highest level

get rolling.

space on

This

Commodity Price Index Depressed by Prospects of
Large Grain Crops

requirements

for the week beginning

Meeting

Bank

corded at this time

when he can't find anyone to break them down

making capacity f

International Monetary Fund and
the

$6.53.

represents the highest level in almost two years, or since Sept.
28, 1948, when it stood at $6.70.
It is 10.9% above the $5.89 re¬

tons

The American Iron and Steel Institute announced
this week
that the operating rale cf steel companies
having 94% of the steel-

14.

to

Governors

of

civilian

boosting the "Iron Age" steel scrap composite
ton to $41.58 a gross ton, the
magazine concludes.

a

of

of

million

a

this week

ago,

The

•

the

essential

programs

of

.'

The

Annual

when

chief obstacle

turns to angweh

for him.

To Hold Joint Meel'g

Boards

and

Conversion- business is booming, but running
becomin^more and rr.ore difficult to obtain

It's

World Bank and Fund

."Fifth

quarter of

supjtfy, this trade authority asserts.

purchasing "Kent's

:

defense

15% ^proportion
Plainly, the

profits net income.

excess

a

many

Third Week

building is contemplated and

take

as

The Dun & Bradstreet wholesale food price index for
Aug. 15
continued unchanged for the third
straight week at

ranges,

probably take only 15% of next year's steel production on a
tonnage basifiL However, notes the "Iron Age," this does not include
expansion in* pipeline construction which could boost
the total
considerably.!But the way steel users will be affected will not be

Capital

determining
excess
income, interest on

net

of

will

soon

will

the Invested

of

profits
100%
is

It

profits tax law.

excess

production

car

field

cans,

less than one-half

were

in 1949.

as

Food Price Index Holds at Two-Year Peak Level for

Industry

(mosdy plates and structural shapes) every month. Over
20,000 grain bins, costing $20
million, and requiring aluminum and
galvanized $tpel sheets must be completed within 45
days.
The picture is one of
mounting pressure for flat-rolled steel.

additional

an

mats, blitz
flat-rolled steel.

of steel

given for capital

be

landing
on

A sharp increase in oil
pipe lme

(5) Due to the time lag in plac¬
substantial amounts of con¬

ing

struction into service

South Central States where there

failures

creased

of

25

was,

in

New

York

by increased

last

week

purchase

remained

of

active, stimu¬

back-to-school

and

fall

merchandise.

According to the Federal Reserve Board's index, department
store

sales

1950,

advanced

in

New

preceding week
similar week
an

increase

showed

a

of

York

30%
a

City for the weekly period to Aug. 12,
the like period of last yean
In the

from

rise of 20%

1949.

of 30%

(revised)

For the four

was

noted and

decrease of 1%.

was

weeks

for the

registered from the
Aug. 12, 1950,

ended
year

to date volume

26

The Commercial and Financial Chronicle

(734)

ther to go

Tomorrow's

#

Markets

retreat Continued from

any

*

*

Whyte

clear

a

of the

picture

immediate future.

By WALTER WHYTE=
[The

point, I wish I could
sound off about things mil¬
At this

other reason
than to impress readers with
my ability in fields other than
if for

itary

no

Besides, to

the stock market.

views

article
time

do

coincide

Chronicle.

at

under the

previous

I
expressed the view that the
market was going up. I pur¬
posely
avoided mentioning
specific stocks because I felt

those

of

the

with

They

are

Richardson is conducting

business

investment

the

of

resumption

the

an

would/ be preceded
another reaction, or at
best
a
backing and selling
advance

by

The

for

this view

itself.

market

the

in

Some weeks ago

stocks broke

sharply after a rally and in
doing so caught a lot of buy¬
ers who came in just before
the
break.
Stocks
bought
just before such a break are
usually disposed, of as they
back

come

the

to

original

purchase level. Approaching
stocks either hur¬

such levels,

back

riedly

through
various

offerings

■nibbled at until

less

or

If

cently been with Lamson Bros. &
Co. and in the past was President
of

Richardson,

they

the

absorption

and

the

is resumed.

advance
*

*

good

completed

is
*

continued

obstacles to this advance.

example,
to

threatening

war

a

David

absorbing

with

Yet,

stocks

offerings,

most

the

seems

formerly

advance

Shearson,

with

associated

come

Hammill

&

Co., members of the
New York Stock Exchange, in the
Wall

New York office,

dealer

he

his
in

was

institutional

and

At

ness.

new

ca¬

will specialize

pacity, Mr. Cowan
in

his

In

Street.

has

it

fur¬

Warren & Garter To
Be Formed in Boston
BOSTON,
Carter

will

engage

in

&
to

Mass. —Warren
formed shortly

be

securities

business.

Members
New

York

Stock

Exchange
New York Curb Exchange (Associate)
San

Francisco

Chicago
14

Wall Street

COrtlandt

Stock

Board

7-4150

Exchange

of Trade

New York 5, N. Y.

Fresno—Santa Rosa




good

and

the

1930

In

depression

us;
hard times and foreclosures
followed; plants were shut down,
bonds in default, gold was ster¬

is

spent
for
However,

Any

should contain

this time the alpha¬
betical
agencies such as WPA,
PWA, NRA and the like were

in

witnessed

1936

and

so-called

chan¬

enacting
will

law,

normal

years

for

Sears,

Inc.

A

of

Shearson, Hammill Co.
(Special

PASADENA,

Calif. —Paul
Young has become associated with
Shearson, Hammill & Co., 348 East
Green Street.
He was formerly
Merrill

with

&

ner

Prior

and

Reagan

thereto

Leo

G.

he

to The

is

from

page

Midwest Stock Exchanges.

ment

does, and how well, the relief
to be complicated and

bound

The

Co., 39

Financial Chronicle)

111.

—

Charles

L.

South

La

Salle

St.

Plus Tax

....

Richfield

5.9%.

6Y4%

tends to weaken confidence in

can

do

hand,

no

and

it

The

readily be found.

can

Capital

be

Wheel'g Steel @
Mo-K-Tex Pfd @
Schenley Ind. @
Montff. Ward @
Studebaker
@
NYC Omnibus @

225.00

continue

275.00

take.

>4% Oct.

Put

I respectfully

to

every

tions

of

200.00

Assn.,

&

Inc.

Broadway, N. Y. 4, Tel. BO 9-8470

on

and

do

so

is

these

pe¬

rates

and
attempting to
under,

too

great to

which

reflect the cost of capital fluctuate

14% Oct. 14

Calls Brokers

6%

The security markets

more

price change

indefinite

the risk involved in

262.50

or

industry cannot

an

future

of

237.50

&

Dealers

50

the

2

THOMAS, HAAB & BOTTS
Members

in

return

31% Oct. 26

Subject to prior sale

for

financed

1%

regulatory
selves.
rate

of

day than these
about which

bodies

The

concern

setting

return

for

of

a

frac¬

them¬
proper

is

a

matter

requiring considerable ar¬
tistry, and I question that it can
be
fully
resolved
by
detailed

mathematical formulas. If

a

base.

On

very

a

to

give the fine degree of service

which they have in the past.
There is no better example

of

the point I am

seeking to develop
the experience of the manu¬

than

factured

industry of the Pa¬

gas

cific Northwest in the last twenty

You know what an un¬
satisfactory medium it has been

years.

You likewise know

for investors.

that

inability to readily raise new

capital has seriously restricted the
ability of these utilities to render
the best

public service at the low¬
has

situation

This

cost.

est

re¬

to this

from facts peculiar

sulted

and shows promise of being

area,

remedied with the advent of nat¬
ural

the

if

unfortunate

utility

at

generally

such plight as

any

Northwest

the

time

any

industry

found itself in
have

it would be

However,

gas.

most

pro¬

'gas

ducers.
In

conclusion, the most impor¬

tant

which the
industry and the
regulatory com¬
the public is to

responsibility

members of your
members

tinue

the

of

have

financed

be

to

to

the industry can con¬

insure that

the

on

very

attractive terms which have been

possible

in

that this
vestors

the

can

suggest

I

past.

done, if in¬

best be

permitted

are

some

slightly greater degree of partici¬
pation
in
the
results of your

steadily increasing business. It is
your responsibility to lose no op¬
portunity to convey this message
to

colleagues,

your

your

cus¬

regulatory au¬
thorities, not primarily for the
purpose of permitting investors to
make
modest
profits in utility
tomers,

you

the

and

render

to

ability

your

assure

to con¬
public

proper

to

serves

a
desirable
around
your

put

safety

moral

here

will

which

that

is

in

continue

an

to

dustry and the regulatory author¬
ities are engaged in learned dis¬
cussion

should
may
as a

proper

to

whether

receive

6%

or

investors

6y4%, you

well discover that investors
group begin to concern them¬

selves

should
not

as

as

as

to

be

10%

fantastic

whether

of American

returns

This

is

or

15%.

as

it may sound.

The cost of capital to

Metal

which

are

Products

of

Company

election

Kenna's

company's

board

the

increases

to

seven

mem¬

bers.

Mr. McKenna
of Affiliated
of

is also

director

a

Gas Equipment, Inc.,

Cleveland; Michael Brothers of

Brooklyn,
Cameron

Waco,

of

Universal Windings Com¬

Texas;

of

pany

William

York;

New

Company

fornia

York,

Providence,

Eastern

and

I.;

R.

Airways

Roddis

Cali¬

of; New

Plywood Cor¬

poration of Marshfield, Wisconsin.

Parrish Co. Adds
PHILADELPHIA, Pa. —Parrish
&

Co., 1421 Chestnut Street, mem¬
Exchange,

bers of New York Stock
announce

is

now

that Richard

Bearasley

associated with them as

a

registered representative in their
Philadelphia office.

L. Stoweil Clark

the majority

industries today, in¬

cluding the banking and insurance
businesses

Norbert A.

—

a

Detroit, it was announced by Mr.
F. C. Matthaei, President of Amer¬
ican
Metal
Products.
Mr.
Mc-

the

return of 6%% can
harm to anybody,

service, it is far safer to err on
the high side than on the low
side.
Otherwise, while your in¬

many

utilities

a

serious

the

require billions of new capital in
order
to
render
proper
public

on

Required

submit that your
riod

..

equity

important

margin
of
operations.

amples

given property

Electric

Telephone & Telegraph Company,
and a wide variety of similar ex¬

of

250.00

higher might
excellent

slightly
be

to

prove

can

an

other

525.00

31% Oct. 27

these

partner of Reynolds
&
Company in New York, has
been elected a director of Ameri¬

allowed return of
be very serious, as it

6V2%,

tory authorities of the State of
Washington have determined that
6%
is adequate for the Pacific

325.00

34% Oct. 25
33
Oct. 27

been

rates

McKenna,

of

return for the
Company
Likewise, the regula¬

proper rate
Pacific Gas &
a

Oil. @ 49% Nov. 24
Cities Service @ 77% Oct. 26
CM&St.P.Pfd. @ 40% Nov. 20

312.50

of

Norbert McKenna Director

is

Now, gentlemen,

Oct. 25 $475.00
@ 68% Oct. 13 387.50-

either

of

tinue

rate of return on a

•

Y'gst'n Sheet @ 96

customer

to administer.

of California have determined that

SPECIAL CALL OFFERINGS

Chrysler

the

utilities might have paid had tneir

securities, but because in so doing

industry

100 Shares

50%.

by

deserving case.
As in
the past it will be most difficult
and

11

Satisfactory Rate of Return

Per

hard¬

will not take care of every

ship

fold.

But

what Congress intends,

matter

regulatory authorities of the State

was

Barclay Investment
to

greater

In Northwest

&

With

a

cases.

Financing Utility Expansion

Financial Chronicle)

Co., 10 South La Salle
Street, members of the New York
and

is

of

care

hardship

of

stock

common

DETROIT, Mich.

an

was

the

Perhaps the $4.81 per year which

service.

Continued

McLaughlin Co.

affiliated with Paul H.

now

increased earnings available

& Co.,

CHICAGO, 111.—John H. Geddis,
Davis

or

special formula would have to

Joins Paul Davis Staff
(Special

no

take

to

number

industries

have multiplied many, many
A

vision

period.

Then there

and

questrdhs
involved
in the
disposition of relief cases.

I am confident that
will give us a more
practical and workable relief pro¬

industries like television;

corporations

excess

an

Lynch, Pierce, Fen-

Beane

officer of

organized.

Congress
profits tax

Congress

corporations

new

per

have

missions

profits tax.

Therefore,

products like nylon, etc. Cer¬

new

tain

Financial Chronicle)

to The

new

base

desirable.

more

current

other

happened

has

deal

be

an excess

enact

and

backlogs

half century
indeed been

1936-1939

the

have been
are

past
have

relief provision, they

with
accompanying
relief
provisions. Congress is familiar
with the administrative problems

postwar

and

autos,

the

great

the

with

housing,

since

the

are

success

When the time comes,

The war years 1941 to 1945
by no means "normal" un¬
wars
can
be
regarded
as
neither

relief
feel that

past

Congress will bear this in mind in

defense

were

normal,

no

would

feel

poses.

less

and

rate

in

the

without

telephone, yet it would

year

tive difficulties involved. A lower

other

business and in¬
For years prior to 1941,

was

more

Those

Congress should not enact a relief
section because of the administra¬

up.

1935

adjustments

with

connection

claims

better and

provision.

large sums for legal,
and economic advice

spent

accounting

at

ex¬

be enacted.
profits tax law

a

relief

realistic

an

will

tax

excess

new

then

acute,

more

profits

cess

who

set

neces¬

profits tax.

an excess

become

helped create a new political eco¬
nomic theory—the pump priming
theory;

prevail, there

economic

or

However, should war conditions

unemployment and hardships

the

an

normal

above

conditions

fiscal

no

sity for

capital

savings
were
household
appliances.

might justify

tax

excess

present

unemployment was high,
prohibition ended boot¬
some

tax.

profits; its purpose is to take the
profit out of war.
So long as

on

was

profits

the

of

profits

excess

conditions

War

business.

Thousands

Monterey—Oakland—Sacramento
,

prices

high

ulation,

very scarce.

San Francisco—Santa Barbara

,

which is sup¬
posed to capture the greater part

principal of the new firm.
He
was formerly an officer of Chace,
&

but a plan to saddle
economy
with a permanent

excess

equivalent to $4.81 per

panies would be able to continue

excess

war

tax

(peacetime)

would

Pacific Telephone Company
have been

5%

a

of the

revenues

form of insurance that these com¬

amendment was not a

profits

Likewise,

in gross

increase

O'Mahoney

the

that

stated

40%.

by

plainly but bold¬

stocks, industrial boom, land spec¬

years

Warren

Recently,

economy.

our

In

Teletype NY 1-928

Private Wires to Principal Offices

today's

good year and a bad year and
so on.
Nor were the late 20's nor¬
mal
with
the
bull
market
in

normal

♦

Schwabacher & Co.

in

ly

instrument

wartime

a

Senator George

a

goods.

Whiteside,

Needed

policy and has no place

wit¬

not normal either.
In
a
big shakeout and

Bentley W. Warren, Jr., will be a

a

is

next

price declines followed by

severe

tax

we

nelled into defense and war pur¬

Securities

«

I.

War

saw

we

there

Turner has joined Barclay Invest¬

Orders Executed on

The

arm¬

year,

it would have increased

yet

for

The

1918

through

Not

Tax

Presently there is absolutely no
for an Excess Profits Tax.

of fiscal

World

was

1920

was

taxpayers

need

war.

1914

year

Europe

boom with money and men

CHICAGO,

Pacific Coast Exchanges

when

1913,

firm's dustry.

the

of

public utilities department.

(Special

Pacific Coast

1907, followed by trust

busting, realignments of business
operations, we come up

units and

busi¬

association,

former

charge

The

went into
breweries and the liquor business;

a Viceof Geyer & Co., has be¬

Cowan,

President

Jr.

deterrent.

failures in

all

treat

alike.

since
bank

After the panics and

1905.

some

For

spread is always a major

years"

"normal

few

very

to

the

cost
per

earnings available for the common

Though desirable it would not be

etc. When

9

of

presence

possible

legging,

Inc.

There is much to be said for
the

tions, normal period, and the like.
A review of our history reveals

ilized,

David Gowan Joins

are more

continues

news

of

Co.

&

Lane

Davenport.

being

are

completely absorbed.

the

re¬

period, Paul Young Joins

this

During

cess.

go

or

away

long tiring-out pro¬

a

Richard¬

Mr. Richardson has

& Co.

14

%

i-

reasons

were

own

offices

Building,

of

name

firm's principal

process.
*

his

from

Bank

Davenport
firm

N.

feel, however,

did

I

unit.

that

be

In

Iowa—David

DAVENPORT,

the market would advance as
a

and

developed for such taxpayers.

normal conditions, normal opera¬

ing for

Davenport, Iowa

son

columns, it will be recalled,

any

note

to

increase in total oper¬

Company would have
average customer $4.81

stock

nessed

goes.
*

at

Richards & Co. in

perfectly frank, writing a
while vacationing in
New Hampshire does present
something of a chore. Never¬
theless, duty calls, so here

Last week and in

an

Excess Profit Tax!

to

column

*

necessarily

presented as
those of the author only.]

be

*

this

in

expressed

not

interesting

most
5%

a

ating revenues in 1949 in the case
of
the
Pacific
Gas
&
Electric

next column and should then

have

is

that

long positions. I'll be back
my desk in time for the

at

Says—
is

It

6

page

We Don't Need

So, for the time being, hold
all

Walter

before

gets under way.

Thursday, August 24, 1950

...

regarded as

relatively riskless, is at least 10%.

L.

Stoweil

Clark,

tive in the securities

formerly

at his home at the age
to

of 77. Prior

his retirement 20 years ago

was

ac¬

business, died

with Parker & Co.

he

Volume 172

Number 4936

..

.

The Commercial and Financial Chronicle
*

(735)
Continued

from

page

3

us
away from that American system of free
enterprise
which was responsible for our
emergence as a free and

powerful nation. Unfortunately,

Regulating the Sale of Investment
Company Shares

income.7
and

this; practical

tending more and
more toward
government participation in business, toward
government interference with business, and toward driv¬
ing the individual from the ability to thrive in and survive
in

we are

their

the

whom

men

we

interviewed

given the sale of investment

trust

that

this

shares

a

would

1

eye."
much better then, if at
all, will the public fare as
result of the recent Statement of
Policy?

even

due

are

for

awakening.

wi.i

-

destroyed and the cost superimposed upon the price or absorbed by the distributor.
The delay in
getting clearance of new literature will make
for additional
burdens, thus hampering issuers, under-

borrowing

writers and dealers.

.

sales

literature that

Policy is aimed at advertising and

"may violate the Securities Act of

1933 and the Investment

Company Act of 1940."

Issuers, underwriters, and dealers who
.

no

mere

new

should
at

understanding

be recognized
that in the

it

clearly and

once

present-day
no

difficulty whatever in supplying
the Treasury with all the
funds it
nutshell

which

when he declared

that

a

modern

central

is

intended for
or

Counsel may differ with the
the NASD or both. If a test is
made, this
use.

cost,

lawyers' fees and litigation, will again
public and probably in the end reduce
investment company shares.

increase costs to the
on

frightful

a

all of this is turning out to be.

mess

"protection" to
the issuer and underwriter and to the
public is one thing;
but when it comes to
treating all sales literature as if it
were, in fact, a prospectus or a part of one, then we think
it is
definitely time to rebel.
as

a

This paternalistic attitude in
attempting eternally to
take the public by the hand is
becoming obnoxious. The
trouble with

bureaucracy is that it extends beyond the

Bureau

the

to

individual

being dealt with and there is

telling how far the government will go in support of
the individual
representing it.
no

Investment company shares are intended
make available to all
people an interest in our
free enterprise
system which can

vestor would not otherwise be able to
afford.

should

to

and

do

capital and

have that diversity in

portfolio and managment supervision which

a

small

in¬

Government

encourage rather than hobble the purchase of such

securities.

The

:

basic

a

Customary prospectus requirements

;

For

it in

What

-

of entirely

scope

be the
ideas yet to

may

Mr.

returns

,

what

say

despairing feature is that while the SEC and the
NASD dictate what the spreads in certain
security sales
shall be, and do not consider the
profit motif in
at

arriving

such

spreads, these bodies make doing business
expensive all the time.
All

more

advertising and sales literature prepared after

August 14, 1950 must conform with this Statement of
Policy. The use of advertising and sales literature which
does not conform must be discontinued

cable and in
are

no

as

event later than October

soon

as

1, 1950.

joint requirements of the SEC and the NASD.

practi¬
These
Even

if the

Statement of Policy were
necessary at all, can it
possibly be said that the time element is fair? Is it fair to
give Tittle more than a month in which to

revamp all
advertising and promotional material and do all the sta¬
tistical work incidental thereto when the time is
Summer
and many
:!,

of those in the industry

Instead of

making

an

are on vacation?

example of

a

few violators of

the

law, the Commission has again reverted to an un¬
necessary and far-reaching enlargement of its
powers
by the terms of which it and the NASD will
review, as
part of;the latter's practice of
self-regulation, all adver¬
tising and sales literature dealing with sale of investment
company shares.
We

visualize trials

now

on

this

subject by the Busi¬
ness
Conduct Committee of the
NASD, appeals to the
Board of Governors of the
NASD, appeals to the SEC and,
finally, appeals to the United States District Court. Of
course,

this will only take place in those instances where

defendants

are

financially able

to "stand the gaff" and
buck the regulatory bodies besides.
These, unfortunately, are few in number.
have the courage to

Administrative bodies via the medium of
enlargement

of their

own

powers,

statements of

policy,

by rules, by interpretations and by
are gradually and rapidly
leading




Ruml

put

bank

from the market
place for money. 2
For practical
purposes there is no
limit
to the
number
of
dollars

the

be

can

made

available

to

Treasury by the Federal Re¬

directly,

as

tax

under the recently re¬

authorities

will

The justification for
paying in¬
terest to commercial banks even

or

Department,

to

Since

could

the

finance

rate

its

on

merely

increase

by

issuing
since
the

greenbacks
directly;
banks merely
supply

in

funds

a

direct and less cumbersome

manner, why should not a small
fee for this service suffice? 4
If banks will not hold sufficient

quantities of short-term
nominal

yields

could

means

at

willingly, other
employed. One

be

of doing

paper

this

suggested

was

by
Reserve
Board
Governor
Eccles.5 His method would, in ad¬
dition
to
holding down banks'
profits

ties,

from

result

another

government

in

establishing

compartment

government

securi¬

debt

in

would

still

which
be

"special reserves" of low-yielding
short-term
paper;
they
would,
however, be permitted to raise
their rates to private borrowers.
To short-circuit the commercial

banks completely has been
mended

by

weiser,6
Patman

of

borrowing
Reserve
could

Dr.

E.

A.

Representative

Wright

Texas, and others. By
directly from Federal

Banks

be

recom¬

Golden-

the

cut

interest

down

cost

^almost

to

nothing, and the whble' problem
of debt management
greatly sim¬
in Reserve

nullified
reserve

by

credit

imposing

requirements

new

deposits

in

could be

high

very

on

commer¬

commercial

banks.

'
.

•

tried.

"They

on

Voluntary

Bond

Purchases
In the

of

action

first

the

public

next

resort.

that

there

instance, by

new

tax

of

the

govern¬

should

refund

be

ac¬

as

for

bonds

of

does

lending

necessarily
saving.
The
assets, and

decrease in to¬

no

spending for goods and
Since

of

one

the

serv¬

principal
from the

for

borrowing
public
is
to
curtail
spending in wartime, compulsory
non-bank

lending by itself will not be
sidered wholly satisfactory.

con¬

to

Escape

Inflation

central

fact .ia. that

inflation in

possible,
trols"

and

are

wartime

all

es¬

is

proposed

im¬

"con¬

efforts to

inhibit, or at
minimize, the symptoms.
Hence Treasury borrowing is in¬
least

to

linked

with

taxation

and

money-creation; Treasury
spending with considerations of
how

much

taxing

its

In the

interest

shall

be

paid

borrowing, and to whom.
new

and

economics government

spending,

borrowing

curities will be relied upon. These and repayment, are not permitted
would
be of non-marketable on the meanings they used to have.
restricted market types, offered to They are solely methods by which

individuals

and

to

institutions* the

holding saved accumulations.
Later, as inflation grows, means

the

government
and

the

influence

may

re-distribution

wealth

flow

of

of

pos¬

Raise

by

nominal

a

method

one

(3)

the

rate

Reserve

of

com¬

the

rest

sale

of

of

of
se¬

interest

Banks."'To

to

prevent

inflationary effects of this method
providing money, impose high reserve
requirements on bank
deposits created
a'ter

given

a

time."

lor.g-time head
eral

of

existing
current

E.

Board,
ment, Mc-Graw-Hill)
7 "In

A.

Goldenweiser,
for

research

Reserve

the

Monetary

Fed¬

Manage•

94-95.

pp.

order

to secure this
large a pro¬
(40%) of the community's in¬
by taxation it must be taken where
can
be found—that
is, largely from

portion
come

classes.

therefore, that wartime
less
To

the

be

that
this is

that

extent

It

is'inevitable,

taxation

than

progressive

of

must

be

peacetime.

considered

to

invasion

of equity — which is a
opinion—it can be reduced by
issuing
borrowing
instruments
in
ex¬
change for part of the money taken from
an

of

matter

the

lower

income classes during the wai
repaying (or servicing) these instru¬

and

after

ments

large

the

Just

in

case

question

a

the

how

the

System
Treasury, let
The

limit

Re.-erve

ratio

total

to

At

actual

June,

the

the

of

actual

legal

and

to learn
sideration
had
to

which
this

the

funds

the

ratio

ratio

that

Until

40%
deposits.

was

of

close

gold,
the

to

surprise

some

official

con¬

given as early as
total elimination

the

requirements
*,.».»•

Federal

25%;

loss

serious

been

is

55%.

against

may

and

notes

are

rather

It

requesting
..

of

above

legal
35%

fell

ratio

minimum.

reserve

is

funds
to

facts.

some

war-time

our

pecple

of

available

amount

present
ratio
is

notes

Because

doubt
there

of

provide is the legal
gold certificate reserves'

of

1945,

against

that

amount

can

liabilities,

deposits.
the

the

up

Banks

throwing

the

note

us

to

bring

Government

Reserve

make

can

Banks

reserve

should

statement
to

income

63.

many

thus

earlier

our

practical limit

no

raised in

higher
p.

Fedeial

purchase,

upon

taxes

the

op.cit.,

someone

to

as

with

war

from

part

classefc." Murphy,

"The

The

at

brnk.

in Wartime

cape

is

money

the" Federal

1944

Impossible

as

the

could

not

other

or

thus results in

reasons

needed

curities

be done from exist¬

may

small

as

compulsory, making the bonds
only after the emergency has

securities

example.

compulsory

ices.

be

distinction.

a

compulsory lending to the

ing balances
tal

It

is

war are an

government
mean

tlie

the

refundable tax. Ex¬

a

profits

But

deficit

as
much as possible by
Offer non-marketable bonds
public. If necessary, make their

(2)

redeemable

The

by

lending can
very
simply,

complished

the last

the

Reserve

emergency

of

possibilities

to

financing

raising

purchase

ab¬

are

Compulsory

cess

Make

by

saving.)

exhausted, com¬
pulsory lending or saving may be
noted

"(1)

pulsory

subscriptions

issues

the

for

the lower income

voluntary
ment

plan

taxation.

it

if

or

nonbank

25,
1947.
Federal
Dec. 1947 p. 1461.

deficits, briefly:
sible

adopted,

them.

costs

Harris, The National
Economics, (McGraw-

Nov.

policy. From the

spokesman.
When

E.

New

(This

been suggested recenth
Federal
Reserve
Board

a

the

passed.

sell

than

more

40-41.

6 His

to

con¬

be paid

not

oi

was

"Disturb¬

severe:

the

Seymour

Bui etin,

oA

has

by

purchases of

se-.

to

not

more

task

port,

characterized

money."
The only visible
escape is to in¬
duce, by persuasion or by co¬
ercion, nolders of government se¬
curities

is

at

5 Marriner S.
Eccles, Statement before
the Joint Committee on the
Economic Re¬

regain their freedom

money

carried

small profit for the
relatively riskof buying government
securi¬

a

ties."

England "The

that policy

held

acquired

effort,

no

be

banks should

less

while

expense

■

the view

to

should

maintain

and

would

the
authorities
in
effect
dicated from the position of
trollers of the volume of

on

government

In
1945

ex¬

that public securi¬
kept outstanding in order
earning power of banks.
There is the need of
keeping the rate of
interest down; for that reason and
others,
to

operations

only at the

cheap

beginning of a new pro¬
gram of war borrowing there can
be
little
doubt
that
voluntary
new

in

can

separably
Reliance

subscribe

ties

pp.

been

of

"risk

the money market is the
main
against recourse to greenbacks.
Though
the writer does not
favor the
substitution of greenbacks he does not

and

market

bonds

banks—assets

virtually

Harris

Hill)

open

of

concept

of

Debt

by

in¬

end

examining

reason

Decisions will have to be taken
with respect to methods of main¬

plified. The effect of the huge in¬
crease

Dr.

ance

expected

cost

the

government

risk, and

accomplishing nothing.

in¬

sulated from market influence. It
would require banks to maintain

the

on

with

little

that the

borrowings

the

bank

by
by
held at
negligible ex¬
pense?"
Charles C. Abbott,
Management
of the Federal
Debt, (McGraw-Hill) p. 80.
them

restrictions

any

minor

after

several

developed

commercial

its borrowing ac¬
tivities; hence to raise the interest

the

government

itself

be

*

return

check

a

another

shortly

or

Chron-

6.

p.

recalls

the

(McGraw-

Financial

4 So moderate an
economist as Dr. Abbo't asked: "What shall be a
fair rate of

whatever upon

moment

holding these gov¬
securities, it was pointed
why should banks
be permitted large
earnings from
them?

attempt

cannot

submit

expense

therefore

way

At

war

cor-

liquid
National

assets," defined to mean everything
cept Government securities and cash.

principal borrower, the Treasury

brought

ernment

such

thus the cheap
money dilemma
the British authorities:

immaterial.

was

controls

It has been argued often

Economist"

war

find

through interest rates sufficiently
higher, if at all, to be effective.

has

into question. No risk3
is involved in

we

and money and interest rate con¬
trols. It is quite inconceivable that

rate

authority for direct se¬
purchases,
or
indirectly,
through the market, is relatively

more

the

pur¬

of

The

Transition,
66.
and

p.

the
and

reserves

C. Murphy,

and

point

novation.

as
Regulation W and rationing
considered side by side with credit

newed

during the last

Here

upon.

collections and

curity

out;

War

for

individuals

postwar

Henry

in

3 This

taining the rate, particularly the
long-term rate. The pegging of the

Banks. Whether this is done

serve

With

the

greater

taxation.

of wartime

amount

be desirable

Commercial
icle, Jan. 19, 1950,

decided

by

greater

postwar

certain

a

may

2 In

controlling its symptoms must

be

to

and

an

cial
r

Beardsley

irredeemable currency have
given the Treasury (i.e., any na¬
tion's
treasury)
final
freedom

which

of

discussion. No

some

needs.

Commission

•

can

puppets, will find it necessary to call in counsel at times
concerning SEC and NASD opinions on the literature

additional
-

already have been proposed

received

expenses

"The

of

providing

agencies

which

one

fof

reasons

war

were

borrowing the

load

Hill, New York)

Government Securities

practice of economics there is

are

Debt

The Look Ahead for

be produced.

The Statement of

of

pose

assets."

and

that

surprising.

the

poia.ions

these shares will have to be

*

retrogres¬

some

all

cover

if

of wartime

ue

Despite this,

place, the statement is so rigid that a large
percentage of the existing literature used in the sale of

have

to

even

more

amount

rude

a

Continued from page 13

In the first

whether it

or

possible. One '
is
to
provide an immediate increase in
the money
supply, and another may be

How
a

wishing

taxation,

far-reaching.
We

Technicians

not

sight. Administrative autocracy
gradual and piecemeal destruction of our
liberty is

a

it, and form
on

progress
NOTES

The end is not yet in
as

know

private fi¬

sion.

have

"black

opinions

represents

economics

in

know

business.

are

of

own

of

finance

men

should

nance

and

by the Investment Company Act of 1940, were and
wholly adequate to stamp out all illegal sales literature
at which this statement of
policy is aimed. A few prose¬
cutions as a
warning would certainly have had the desired
effect of
cleaning house. The objection is raised by one

Students

government

27

* *

Reserve

for

the

central

• *

ratio

had, of
course, lost its real economic significance
*
*
*
Nevertheless, it was agreed by
both the Treasury and
the Federal Re¬
serve

that

Congress

it

for

quirements

would

the

total

be

unwise

not

the

new

and

ask

to

elimination

long embedded in
banking custom." Actually,
needed; the ratio never fell
so

of

re¬

statute

it

was

even

to

25% limit. "But the passage of
legislation at that time seems par¬
ticularly fortunate in retrospect. Had it
been
delayed
until
after
V-J
Day, it
might very likely have become mired in
controversy and this controversy might
have seriously embarrassed the monetary
authorities
in
carrying
through
their
ncstwar
policies." Murphy, op.cit., pp.
the

214-215.

Mr.

Murphy's book is written from the
point of one who was_ on, the
of
Treasury
war-time
financing
and planning. Some of its revelations may
be surprising to those who do not cus¬
tomarily follow such subjects closely. It
is
recommended as fascinating reading.
vantage
inside

The Commercial and Financial Chronicle
28

Continued

Public

Utility Securities

of some interest.
continue to attract most interest
are
American & Foreign Power and Standard Gas & Electric.
For some months American & Foreign Power's management has
been at work on a new plan, which may be filed in the near
future.
According to estimates prepared some time ago, and
reduced in number—may be

now

The

which

situations

two

assuming the old plan as a working basis, the new common stock
might have estimated earnings around $3.40 a share on the present
income tax basis. Capitalizing the stock at four times earnings,
which would seem conservative since the Company seems pretty

would work out at 13. Again

protected against EPT, the price

well

using the old plan (which may be materially
values for the present stocks would compare

prices

changed) resulting
with recent market

follows:

as

Shs.

Face

New

Value

Com.

Recent

Est.

L.

Price

Value*

2Vs

$138

80

100

1V2

120

70

$4 Second Preferred

%

5

18

Common

1/50

1

3

♦Debentures

Gas

Standard

Electric

&

still

is

working

on

complicated

a

million, would leave $63 million for the $4 preferred and
stocks.
If the so-called discount theory should be ap¬

common

plied to the senior claim this might be increased to perhaps $77
million. If these amounts were allocated between the $4 preferred
the

stocks

common

on

basis

80-20

assumed

an

the results

follows:

as

Estimated Break-up with
$(!!( million

$4

5.80

Common
The

of

case

attracted

Recent

$77 million

Price

$81.00

60 xk

7.10

7%

$66.50

Preferred

,

Public Service (NEPSCO') has
While the earnings have been improving,

less interest.

Central Maine
Power, Public Service of New Hampshire, and Central Vermont
the

of

stocks

three

the

Public Service—have

subsidiary companies

not shown

much

—

net approciation over the

past year or more. The management has long delayed the sale
200,000 or more shares of Central Maine despite pressure from

of

An allocation plan would seem

the SEC.

to be still some distance

off.

slow.

The

in

holdings in Gatineau Power, and with the help of a $10 million
bank loan has retired the debentures.
Based on the past record,
the

long struggle between the preferred stock and the class A
stock seems likely to continue for some time before an allocation
plan can be developed and consummated.
Central

Public

Utility debentures declined from this year's
23 V2, 'and recovered to 26.
The break-up
value has been estimated by Wertheim & Co. to approximate 35
($349.50). Because of the mixed character of the portfolio, how¬
ever, accurate appraisal is quite difficult.
While the SEC has
been pressing for adoption of an all-common stock capitalization,
there is a big tax advantage
(now doubly desirable with the
threatened EPT) obtainable as long as the debentures remain

high

around

30

to

outstanding, since the Treasury Department permits deduction of
accrued but unpaid interest from system earnings.
Middle

West

recently made

closed the transfer books.

Wall

a

distribution of $2.50 cash and

Street

analysts estimate that the

final

distribution, to be made around the end of 1951, might
approximate 50c a share. The stock was dropped from the Curb,
but is quoted over-counter around 2% bid, or about one-quarter
the cash payment.

the "First to

as

The

75,000,

and they

(rejection

time ago).

of

which

was

States —three

from the

the

of

disclose

bare

of

lack

our

far

and

without

much

If neither claim
is allowed, Federal would
seem
to have
potential profit possibilities of about 2V4 points, based on the pres¬
ent price of Scranton-Spring Brook and
disregarding brokerage.

For
tinue

those

who

have

faith

that

the

Federal

courts

will

con¬

to

uphold the SEC, the holding company preferred stock
"stubs" may be of interest. For
example, the Electric Bond and
Share

$4.20 stubs

the SEC

can

has decided

be

that

purchased

around

10

or

10y8

whereas

they should receive $10 plus interest
At present the interest approximates $1.82 and will continue to
increase, it is understood, until the courts say the final word




Spring

He

Street.

632
for¬

was

merly with C. E. Abbett & Co.

Continued

from

page

Pure Oil

8

Company and
Ocean Natnial Gas

value

not

from

products

ernizatioq; of stations is continu-

;

.

ing.
Products are sold under the
"Pure" name and also the "Pure-

development

and

retail outlets,

12,500

Marketing is concentrated in the
most profitable areas, and mod-

product

the market for com-

research

than

of more

value

finished

of

barrel

New

the

increase

only

line and other petroleum products
are made to the public through

barrel

each

These developments

of crude oil.

Illi-

laboratories at Crystal Lake,

^Puritan,". "Purol"

and

"Guardian" .trademarks. The cornpany has recently started an in¬
tensive /sales campaign, particularly for its new lubricating oil

the

payrolls with paper-pushers
brass, and to tie the whole
operation up in red tape like a

leum

products.

sold

and

ribbon

on

of

box

a

phony choco¬

lates.

truth

The

is

that

for

every

$7

spent on the military, only $1

we

equipment. The
for housekeeping,

went into combat

other

went

$6

bureaucratic

red

and pyra¬

tape,

Transportation

and

An

extensive

system

connects

retail

mar-

keting operations which are conducted in 26 states

entire
the
has

South

Middle

crude

a

and

small

West.

The

oil

pipeline

constant development.

had

system

pletion, and depreciation accruals,
and
have greatly increased the

company's earning power.
Refleeting
conservative
dividends,
more than $100 million of earnings have been reinvested in the
last ten years, and book value per
share has increased from $22.75

and nine

tankers; 46 barges;

ocean

that
12
tugboats;
and
49
terminals
"Saturday
with storage capacity exceeding
night to Saturday night" basis.
200 million gallons, most of which
And
if
anybody in Washington
are located on or adjacent to deep
can tell you today what our policy
or inland waters. Three of the rewill
be
next
Saturday night, I
fineries are directly connected to
don't know who that person is.
We

the

that

ment

on

policy of appease¬
in Asia for five

practiced

long

finally

has

years

versed,

though

even

been

we

ing
and

economy

our

threatening

Better

us

our

reversal

than

today

Net
Income

$12,516
26,977
41,672
21,197
17,107
13,582
16,392
13,874
13,761
15,285
8.718
8,290

1949

263,388

1948

281,319

25.0

1947

late though the hour is.
of bankrupt foreign and
domestic policies must be brought
to an end. We face an implacable

244,412

16.9

1946

178,888

19.5

1945

165,309

20.9

1944

166,061

24.4

ruthless bunch of political
gangsters indoctrinated with be¬

1943

136,248

23.8

1942

123,301

25.7

1941

112,863

1940

95,675

25.8
20.2

1939

94,286

18.4

at all,
The

foe,

era

a

liefs

that deny

human rights and

They are deter¬
the world, and
they have already subjugated al¬
deny God.

even

mined

to

conquer

most one-half of it.

In five

years'
time, we have seen the Soviet
Union expand its domination from
170,000,000 people to more than
800,000,000 people. And we must
face

the

that

fact

own

our

errors

(Dec. 31, 1949)

at

Yalta, at Potsdam, and in the
Orient have been largely respon¬
sible

for

the

success

of

Serial Notes

might.

the

is

that

new

blood

is

Department,

in

and

could use a few,
new faces in Con-

we

few,

now

by

exceeds total

$24,750,000
$3,616,321

$3,439,333

Subsidiaries

The

company

completion

from

modernization
increased

$44,243,400

3,982,031 shares

($10 par)

sense

know

to

is

that

essential

Spain,
to

lve

sales

Outlook

should benefit
of its refinery

program,

addition

gasoline plant capacity,
demand
and
higher

for

prices

with enough com¬

men

example,

petroleum

recenuy

average

daily

our

its

Formosa, which Pres¬

is vital to

our

short,

the

been

railed

beginning

relatively warm weather. Present
industrial activity assures a strong
market for heavy oil, and m°r
normal weather would stimu at
sales of heating 011. Therefore,

oil

sales

easily

earned

in 1949, and dividends later in the
be more fenerous sxnee
increase of financial position is strong a a
low. Since the peak of capital expenditures

production

to an

of 2,- «

of

declined

bas passed.
the

Over the longer term,

an(J

discoveries

on

the

submerged coastal lands of the
Gulf of Mexico suggest the possubstantially higher
and more stable plateau of earn-

substan- sibility of a

people tially with lower industrial activand
household heating
oil
to realize there is itv.
American

restricted because of

products. earnl'igL L,
should
1950
exceed the $6.22 per share

production

position

fuel

in Asia.

were

allowables for August

in the State of
Texas, it will be particularly benident Truman only six months ago
efited
Profits in 1949 were addeclared to be of no military im¬
versely
affected because heavy
imum: that

are

30,915
24,719
22,700
23,187

Securities now outstanding:

Obligations

580,000 "barrels — an
security in Europe; that the hand
32% from the March
of General MacArthur in Japan
Pure Oil has a large proportion
must be strengthened to the max¬

In

lion.

Cum. ($100 par)——

Current

TWas

portance,

$58,233
57,696
48,702
52,039
55,487
40,061
32,090

long-term debt by about S30 mil-

Minority Interests in

of natural

Europe

mon

$1.00
2.00
2.00
1.50
1.25
0.75
1.00
0.75
0.50
0.50
0.25
0.25

period, net working

Preferred Stock—5%

all

branches of the Executive Depart¬

a

Capital
(oods)

Washington—needed at

State

quite

$2.87
6.22
9.91
4.77
3.74
2.64
3.13
2.50
2.47
2.86
1.21
1.11

1.50% to 2.95%, 1951-1965——

Common Stock

Working

Per Common Share
Dividends

well $35 million and

variation,

Purchase

Deferred

Soviet
t

truth

of

^rar^un^rr se"
curities has shown little

each

capital has actually increased

expenditures

Despite

of

Earnings

In the same

Capitalization

Consolidated

end

(duo's)

17.9%
18.2

none

the

Net

Profit
Margin

(000*5)

Year

at

follows:

Income

$138,243

future peace.

capital

year,

Operating

6Mos. 1950

of

record

Gross

Gross

re¬

lives, turn¬
upside-down,

costing

ing

900 bulk plants, and sales of gaso-

must re¬

historical

The

stock.

earnings, dividends, and net work-

through

Distribution is achieved

the

end of 1949. Since only the end
of World War II, capital expenditures have been equal to approximately $40 a share of common

facilities.

terminal

water

gret and deplore the fact that the
is

at the end of 1939 to $46.17 at

a

only thank our good for¬

can

tune

policies and

no

operating

was

ex-

tirely from retained earnings, de-

company

American people are fed up

tration

Capital

penditures have been financed en-

the

that

wonder

"Purelube."

name

The record of Pure Oil is one of

throughout the
large parts of

trunk
and
gathering lines;
45
with pumping stations; divided interests
in
nearly
4,000
miles of
such incredible bungling and such
products pipelines; a modernized
disastrous policies.
I said in 1948 that this Adminis¬ tanker fleet consisting of one lake

is

It

the

Income, Dividends and Net
Working Capital

transportation

the

under

Marketing

consisting of about 1,400 miles of

miding brass.

for

success.

become associ¬

lube,"

We need

back

with

men

They are symbolic nois, were put into operation in
governmental policy which the second quarter of 1950 and
deems it necessary to spend
$4 should enable the company to prowhere $1 would do the job, to load duce a greater variety of petro-

awards to the

These claims have been travelling
forth through the Federal courts for some time, thus

So.

Calif. —John

ANGELES,
Morrill has

with Dean Witter & Co.,

ated

a

Spain Essential to Security in

'

that

ing

W.

preparedness.

Remaining hold¬

group.

Tne
lost
demand¬
vision, with

is today.
have not

it

people

Expenditure pany products.

few

ings of Scranton, nearly one-third of a share for each share of
Federal or over $4 value, is held to meet the possible increase in

Chenery

LOS
D.

of

gress.-

claim

than

justified
American

each

a

which

York

some

the

all in

were

Military

are

ment,

Service

was

mere

a

action.

of

scene

selling around 8V2 or about 1% additional points. The
is held up pending a final SEC decision regarding
Water

to

weeks by transport away

Federal is

New

Fight"?

decimated

been

had

needed in

the

Dean Witter Adds
(Special to The Financial Chronicle)

people to give voice
judgments
every
two
never more strikingly

their

to

years

it.

sue

the American

Corps, which at the end of World
War II had a strength of 486,000,

Federal Water & Gas proposes to distribute a half share of
Scranton-Spring Brook Water to each share of Federal. Scranton
is currently around 13V2 and half a share would be worth 6%.

distribution

For¬

support. But the wisdom
forefathers in permitting

that the Marine

is

answer

The

recommended by the SEC staff

been

world

the

famous

were

reversal

International Hydro-Electric also continue
management finally sold about a third of the share

Developments

ex

over

it

England

New

which

facts

forthcoming for the top company, although rate questions affect¬
ing Duquesne Light, as well as the new tax problems, will probably delay matters until 1951. Using the recent price of 21 Vi for
Philadelphia Company stock the parent company's 95% equity
interest would amount to $107 million.
Holdings in Oklahoma
Gas are worth about $22 million, Louisville G. & E. $4 million,
and Wisconsin Public Service may be estimated at $24 million.
This makes a total figure of $157 million.
Deducting the entire
claim of the prior preference stocks for par and dividend arrears

would be

public has

the
Marines,
our
traditionally
highly-mobilized
fighting
units

Those

to streamline Philadelphia Company and place it on an
all-common stock basis.
When this is completed a plan may be

and

American

'

program

of $94

our

and

is their main hope

given wisdom, they intend to pur¬

to the support

Korea

course

future, and in their God-

demanding to know: Where were

Misdirected

priced at face value, common stock at 13.

in

the

for

their voice, and they are

tary operation.
The

that

of

but broaden

$110,
Preferred

$6

had

we

in

with

and

purpose,

We shall not waver

today.

mosa

approximately 100 F-80 jet fight¬
ers which fly too fast to give tac¬
tical air support and which were
not designed for that type of mili¬

continental United

—See. Reed, in Old Plan—

Deb.,

Instead,

fare we now face.

that this

certainly its
membership, is com¬

forces

our

of

leadership, take over. They know

The Congress, and

Republican
of

Tragic Mistakes

holding
company securities "on the bargain counter" again?
It is of course
impossible in this column to give any definite appraisals, but a
brief sketch covering a few of the holding company securities—

•

Thursday, August 24, 1950

.

stability

under this

peace

Administration.

pletely committed

decline in utility securities put

the recent severe

hope for the

no

14

page

Down Payment on

Holding Company Securities
Did

from

Korean War: A Small

By OWEN ELY

-

.

.

(736)

ing power.

•\;>

Volume 172

Number 4936

The Commercial and Financial Chronicle

.

..

Indications of Current
Business
AMERICAN

AND

IRON

Indicated

steel

operations

Activity

(percent

capacity)

of

Equivalent to—
Bteel

statistical tabulations

latest week

month available.

or

or

month ended

on

Latest

Previous

Month

Year

Week

Week

Ago

Ago

Aug. 27

90.6

100.1

98.2

84.8

Aug. 27

1,747,400

1,930,600

1,894,800

1,563,300

Dates shown in first column

COPPER

production

Crude

oil

Crude

output

condensate

and

—

daily

(bbls.

average

of

In

42

gallons each)
Crude

stills

to

runs

daily

—

Gasoline

output

Kerosene

output (bbls.)
and distillate fuel

oil.

Gas.

fuel

Residual

(bbls.)

average

Aug. 12

5,674,750

-Aug. l?

Aug!
Aug!
Aug!
Aug!

(bbls.)

oil

oil

output

(bbls.)

(bbls.)
Stocks at refineries, at bulk terminals, in transit and in pipe lines
Finished and unfinished gasoline (bbls.) at
output

(bbls.)

Kerosene

Residual

oil

fuel

(bbls.)

(bbls.) at

at

;

S.

116,044,000

5,944.000

5,806,000

5,227,000

12

20,305,000

19,783,000

19.311.000

18,383.000

12

2,121,000

2,055,000

2,147,000

1,383.000

12

7,687,000

7,419,000

7,179,000

5,724,000

12

7,787,000

8,079,000

8,026,000

7,282,000

Aug. 12

108,518,000

108,895,000

111,739,000

108,174,000

COTTON

I—.Aug!
I_Aug!

12

63,053,000

"■62,235,000

58,658,000

73,815,000

In

12

41,810,000

41,791,000

42,708,000

67,818,000

In

Revenue

freight

Revenue

freight received

loaded

LINTERS

AND

(number

of

cars)

connections

from

CONSTRUCTION

ENGINEERING

Total

(number

of

cars)

Aug. 12

847,465

837,218

789,268

728.029

Aug. 12

704,085

702,259

570,886

564,710

—

ENGINEERING

public

CROP

and

1

storage

S.

li.

Corn,

all

$164,618,000

$343,307,000

16^,697,000

87,469,000

217,786,000

55,657,000

Aug. 17

80.448,000

76,549,000

125,521.000

81,516.000

Durum

Aug. 17

77,655,000

67,061,000

91,187,000

69,140,000

Other

Aug. 17

2,793,000

9,488,000

34,334,000

12,3/6,000

All

spring

Oats

Bituminous

and

coal

9.115,000

7,968,000

962.000

935.000

786,000

697,000

147,000

"137,200

117,800

9,100

10,830,000

Aug. 12
-Aug. 12

(tons)

(tons)

TEM— 1935-39

OF

thousands)

RESERVE

Rice,

lb,

(in

output

6,185,702

6,253,141

6,369,830

Aug. 19

ibu.)——

5,578,800

Hops

DUN

&

BRAD—Aug. 17

'!"!'

194

186

—

170"

Finished

steel (per lb.)

(bu.)

(lb.)

Pig

(per gross

iron

884,730

4,146,398

112,358

137,968

103,663

207,170

236,516

237,101

163,701

166,150

77,620

20,525,000

20,221,000

19,007.000

3,167,607

3,175,602

3,377,790

996,490

956,586

1,146,463

740,537

720,545

901,668

255,953
35,518
220,435
1,456,130
285,402
22,509

236,041

244,794
38,863

——_

for sugar & seed

toi )

Scrap steel (per gross ton)

3.837c

3.837c

3.837c

3.705c

Aug. 15
Aug. 15

$46.61

$46.61

$46.38

$45.91

$40.25

$39.17

$37.17

$21.17

(ton)

ibu.)

—-—

(3

EMPLOYMENT

43,664

35,201

40,113

103,498

99,305
21,554

17,186
2,817

3,267
401,962

390,431
57.892

54,232

1,932,146

1,970,378
6,796

7,597
12,526

10,197

56,112

50,730

119,180

133,742
74,818
36,404

2,662

(ton)

235

225

250

(ton)

198

203

198

11,837,000
6,450,000
5,387,000

*11,596,000
•6,196,000

11,324.000

———__

"5,400,000

5,267,000

144.5

"141.6

138.2

——_—

349.0

"357.2

312.8

14,416,000

♦14,167,000

13,877,000

7,811,000
6,605,000

♦7,554,000

7,441,000

♦6,613,000

6,436,000

DEPT.

S.

PAYROLLS—U.

AND

18,697

29,338

2,748

of

SERIES—Month

LABOR—REVISED

OF

238,104

21.891

28,607
2,534

States)

States)

1,322,' 24

55,512

.

(12

205,931

1,394,772
264,726

28,488

(ton)

Apricots

205,408

51,996

(bu.)

Cherries

30,633

13,033
57,765
118,227

(ton)

(bu.)

Grapes

Aug. 15

;

(bu.)

beets
(lb.)

Pears

193

COMPOSITE PRICES:

AGE

IRON

—

INC.

STREET

1,429,178
5,268,258

36,237
104,991
16,733
;\
2,920
407,342
"
59,322
1,932,611
7,597

——

—

dry edible (100 lb. bag)
dry field (100 lb. bag)

Peaches

INDUSTRIAL)

-

—

Apples, commercial crop

AND

(COMMERCIAL

FAILURES

454,426

841,227

1,307,560

30,695

(ton)—

all

Sugar

kwh.)

000

:

bag—

Sweetpotatoes

218

265

296

(bu.)
(bu.)

Beans,

INSTITUTE:

ELECTRIC

212,817

4,847,009

(bu.)

Potatoes

275

—

1

—:

Sugarcane
Electric

50,327

AGRI¬

__

100

Hay,

SYS¬
Aug. 12

(in

1

Aug.

(bu.)

Tobacco

EDISON

45,316

48,266

REPORTING

CROP

—

of

(bu.)

Peas,

SALES INDEX—FEDERAL
AVERAGE—100

STORE

DEPARTMENT

as

29

July 29
of July 31

DEPARTMENT

spring

Flaxseed

10.560,000

Aug. 12

(tons)

lignite

anthracite

Pennsylvania
Beehive coke

of

as

(bu.)

Rye

BUREAU OF MINES):

S.

July-

lbu.)_

$250,145,000

Barley
(U.

of

(bu.)

Aug. 17

municipal

OUTPUT

126,047

610,555

29

July 29

ibu.)

all

Winter

;_Aug. 17

Federal

COAL

85,638

95,983

COM¬

OF

of July

month

PRODUCTION

$137,173,000

construction

State

DEPT.

of

spindles active

BOARD

NEWS-

construction

construction

Public

62,449

113,961

period

consuming establishments as of July

Wheat,

S.

U.

of

at. end

—

as

Linters—Consumed

RECORD:

Private

•96,754

96,734

BALES:

month

storage

CULTURE—As
CIVIL

85,315

RAILROADS:

AMERICAN

OF

Year

lbs.)

2,000

public

25,329,000

Ago

Previous

lbs.)

consuming establishments as of July

22,532,000

Month

Latest

—

In

23,560.000

Month

July.

In

23,628,000

of that date:

A.—•

2,000

stocks

copper

of

of

1 tons

Lint—Consumed

12

either for the

are as

lbs.)—

2,000

MERCE—RUNNING

Cotton
ASSOCIATION

A.

(tons

Aug!

at

oil, and distillate fuel oil

Gas,

U.

4,774,600

S.

of

are

customers—

to

Refined

5,495,450

5,640,350

month

in U.

of

(tons

Deliveries

INSTITUTE:

PETROLEUM

of quotations,

cases

(tons of 2,000 lbs.)

Refined

AMERICAN

in

or,

INSTITUTE—For

Copper

tons)

(net

production and other figures for the

cover

that date,

.

castings

and

ingots

The following

week

INSTITUTE:

STEEL

2$

(737)

May:

(production workeis)——

All manufacturing
METAL

PRICES

(E.

QUOTATIONS):

J.

M.

&

Electrolytic copper—
Domestic refinery at
refinery

Export
Straits
Lead

tin

(New

Lead

(St.

Zinc

at

Louis)

St.

Aug.
Aug.
Aug.
Aug.

at

at

Louis)

(East

Durable

>

at

22.200c

22.425c

22.425c

22.425c

17.550c

107.000c

101.500c

97.000c

103.000c

16
16

12.000c

12.000c

15.125c

11.800c

11.800c

««15.000c

15.000c

13.000c

12.800c

16

15.000c

-

Payroll indexes—
All
manufacturing

14.800c
*

—

goods

Employment indexes—
All
manufacturing

"

16

goods

Nondurable

17.325c

22.200c

22.2C0c

Aug. 16
Aug. 16

at
York)

York)

(New

.

in manufac¬

of employees

number

Estimated

10.000c

turing industries—
manufacturing

All

MOODY'S
D.

S.

PRICES DAILY

BOND

Durable

AVERAGES:

Aug. 22

Bonds—

Government

Aug. 22

corporate

Average

Aug. 22

Aaa

A8."—"I—1——~——I"——

Aug. 22
Aug. 22

Baa
Railroad

Utilities

Public

Aug. 22
— Aug. 22

Group
Group

Industrials Group

102.02

102.15

103.69

116.02

116.02

115.04

114.85

120.84

120.84

120.02

120.84

119.61

119.61

118.60

119.00

115.63

115.43

114.66

114.08

INDEX

U.

YIELD DAILY

BOND

108.70

107.62

106.04

111.62

109.97

10^.42

Composite

117.00

117.00

116.41

116.02

Piece

119.00

119.20

Men's

Government

S.

corporate

Average
Aaa
Aa

Aug. 22

2.85

Aug. 22

2.61
2.67

Aug. 22

2.87

Aug. 22

Baa

Railroad

Group

Utilities

Public

——Aug. 22
Aufe. zi
Aug. 22

———;

—

Group

'

Industrials Group

2.35

2.34

2.24

index

goods

2.85

2.90

2.91

2.61

2.65

2.6]

2.67

2.72

apparel

3.24
3.08

3.17

3.20

2.80

2.80

2.83

2.85

2.66

2.66

2.70

2.69

INDEX

COMMODITY

Orders

PAPERBOARD

received

—

Sheets

comfortables

and

apparel—'

Women's

activity

Percentage of
Unfilled

(tons)

orders

at—

12
12

12

237,995

334,123

188.355

169,424

224,414

219,000

186,959

181,138

99

.88

82

84

637,177

489,490

311,124

646,656

12

brassieres

and

Corsets

Hosiery

REPORTER PRICE INDEX—1926-36

DRUG

AND

PAINT

:

-

neckwear
caps'

and

overalls

including

Sll06S

Socks

of

orders

Number

of

shares—Customers'

Dollar, value

11

Odd-lot

orders—Customers'

of

Customers'. short

*

Customers'

,

-

Customers'

■

864,172
$36,852,830

1,096,323

722,305

473,645

$44,778,927

$30,976,066

$18,090,645

Aug.

5

25,366

31,685

Aug.

5

191

256

152

Aug.

5

25,175

31,429

19,159

15,916

Aug.

5

727,097

942,885

555.812

446,864

other

sales

Aug.

5

sales

Aug.

5

Aug.

5

.

—

Round-lot sales by

19,311

16,061
145

7,395

10,001

6,302

5,456

719,702

932,884

549,510

441,408

$27,193/488

$34,540,019

$22,532,535

$14,571,925

Si'--

«

Radios

shares

PRICES

NEW

SERIES

—

U.

S.

242,830

135,810

5

Aug.

5

201,610

242,830

135,810

1661940

Aug.

5

341,650

424,110

279,150

203,460

5

-

Livestock
Foods

:

Meats

All

commodities

Textile

than

and

Building

metal products

*.
—

materials

Chemicals
♦Revised

materials

and

figure.

allied

products

131.9

135.2

134.0

139.2

133.2

133.2

134.4

141.1

140.8

140.5

140.9

139.7

152.2

152.2

153.9

129.5

129.5

129.6

127.2

127.2

127.9

131.5

131.3

131/8

168.7

167.7

168.5

130.4

130.4

131.1

11K.9

r°*

147.8

147.1

167.9

162.7

117.9

117.9

128.6

128.3

v

-

132.9

154,1
118.7
130.1

139.9

138.4

138.8

132.9

144.4

143.5

-

-

134.9

-

Aug. 15
—.....Aug. 15
Aug. 15
Aug. 15
Aug. 15

>

,

165.0
175.4
167.4
239.1
174.2
255.1
154.2
148.5
.134.0
174.2
214.3
121.7

'
•

"

"165.6

163.3

177.5

176.9

168.6
241.6
174.7
255.3
"154.5

172.0
244.2
175.4
,269.2
150.6

1

"147.9
134.1
173.9
212.7

139.6
133.5
/.<« 173.3
204.1

120.8

117.7

CLEANER MANU¬
ASSN..)—rMonth of July.

$1,255,660

$689,611

75.328

.76,619

U. S
balances—

348,058

312.927

712,050

676,827

shares...—
—
listed; bonds.
U. S. Govt, issues—
borrowings on ether collateral.

82,000,115
125.209,399

80,651,507
124,632,841

EXCHANGE—As of July

STOCK

customers'

of

extended

Credit

hand and

on

Market

value

of

Market

value

of

RECT
OF

204.6

e.counts—

in tank's In

listed

borrowings on

MARKET

TREASURY

146.6

margin

net debt; balances—.
customers——

customers' free credit

Total of
'

to

152.7
161.0

U.

AND

S.

v

Net purchases

145:0
138.0

129; 6

ZING

of

OXIDE

115,752

713,650

"846,413

of July:

a,.——■

(BUREAU OF

June.

—

—

170,383
;

371,332

MINES)—Month

$1,925 ,750

$60,700

19,338

19,688

18,955

19,589

16,126

15.743

NotavaH.
Not avail.
Not avail.

$8,170,800
-

>;

Production

(short

tons).;.,———

188.7

Shipments

(short

tons)

Stocks ai

222,849

67,279,033
132,812,944

TRANSACTIONS IN DI¬
SECURITIES

168.2

119.5

281 P41

530,254
"

GUARANTEED

A.—Month

160.5
224.4

161.928

$1,208,326
103,143

ft

units)—

firms 'Carrying

Total

Member

^Includes 507,000 barrels df foreign crude runs.'




142.4

250,190

Member

Member

Aug. 15
Aug. 15

farm and foods
*

lighting

Fuel .and
Metals

other

products

103.3

141.9
130.8

(OOO's omitted):

Cash

Aug. 15
Aug. 15
Aug. 15
Aug. 15
Aug. 15

products
-

102.1

142.0

130.8

279,967

YORK

NEW

DEPT. OF LABOR—

All commodities
Grains

1*5.7
141.4

(VACUUM

sales (number* of

Factory

1926=100:

Farm

1*7.3

143.1

CLEANERS—STAND¬

VACUUM

SIZE

ARD

FACTURERS

166,940

201,610

Aug.

purchases by dealers—

Number of

—

household appliances

HOUSEHOLD

*

WHOLESALE

.

....

Electrical

31

dealers—
Aug.

Round-lot

171.0

145.2

,u

/

value

Dollar

5
5

sales)—

sales

short

16,382

5

total sales

sales—^—

other

Customers'

:

-

25,093

36.956

Aug.
Aug.
———Aug.

;

coverings

Floor

total sales

—

purchases by dealers (customers'

Number

>

Furniture

■

1-17.4

144.4

Shoes

(customers' purchases)—

Number

140.2

146.6

118.9

i

Underwear

TRANSACTIONS FOR THE ODD-LOT

Odd-lot sales by dealers

117.3

138.3

147,2

—

children's wear-

and

Infants'

ACCOUNT OF ODDLOT
DEALERS AND
SPECIALISTS ON THE N. Y. STOCK
EXCHANGE—SECURITIES EXCHANGE COMMISSION:

ETOCK

113.0

131.2

!

138.5

—

and

Shirts

129.2

123.5

128.1

129.2

—Aug. 18

—

——

115.5

140.9
-

Underwear

Hats

AVERAGE=100

130.1

147.0

■

apparel—

Men's

Clothing,
OIL,

129.3

102.4

housed: esses

and

Shoes

Aug.
.-Aug.
Aug.
Aug.

——

——.——

130.1

129.7

—■——,———————^

Blankets

Furs

ASSOCIATION:

(tons)

(tons)

Production

130.4

148.9

113.0
-—

Underwear
NATIONAL

139.4

Domestics—

339.9

441.3

130.5

138.9

——

goods

Hosiery

450.5

463.0

—Aug. 22

—

137.7

127.6

139.1

—

.

Aprons
MOODY'S

wear

—

and silks
wash

Cotton

3.39

3.30

3.23
3.08

137.6

128.0

goods—

Rayons
Woolens

2.95

2.92

2.88

138.4

——

——

children's

and

furnishings

Piece

2.70

—T

apparel

Home

'

.Aug. 22
—

A

Aug. 22

2.32

RETAIL
PRICE
(COPYRIGHTED

100

=

I):

AUG.

Women's

AVERAGES:

1935-3!)

—

OF

AS

Infants'
MOODY'S

...

PUBLICATION

FAIRCHILD

108.88

119.82

—

goods
goods

Nondurable

111.62

119.82

Aug. 22

...

102.37

6,057,000'

end

"Revised.

of month

' ■4

(short tons)——
' «• '

SO

(738)

The Commercial and Financial Chronicle

Securities Now in Registration

•

.

.

.

Thursday, August 24, 1950

INDICATES

ADDITIONS

SINCE PREVIOUS ISSUE

„*W;

•

Ace Finance Co., Inc.,
Albuquerque, N. M.
Aug. 14 (letter of notification) $<o,000 of 6% five-year
bonds, to be issued in denominations of $100 each.

Underwriter—None. Proceeds—To make small loans
der

the

New

Mexico

Small

Loan

Act.

W.

share.

Price—At

common

Underwriter—None.

par.

products.

pre¬

stock

Pro¬

plant and development of other
Office—8th and Pittston Streets,

Allentown, Pa.
American Fire & Casualty Co., Orlando, Fla.
July 21 (letter of notification) 11,100 shares of common
stock

(par $10).
Price—$27 per share. Underwriter—
Guardian Credit Corp., Orlando. Proceeds—For
working

capital.
this

Office—American Bldg., Orlando, Fla.

Expected

week.

American

Motorists

Insurance

Co., Chicago

June 28 filed 100,000 shares of capital stock (par
$5) be¬
ing offered to stockholders of record July 25 at rate of
one new share for each three
held; rights will expire on

Sept. 25. Price—At

Proceeds—For general corporate
purposes.
Business—Casualty insurance. Statement ef¬
fective July 26.
American

par.

Natural

Gas

Co., New York

(8/24)

Aug. 4 filed 334,934 shares of common stock (no par), of
which 304,486 shares are to be offered to common stock¬
holders of record Aug. 24 on basis of one new share for
each 10 shares held; rights to expire Sept. 14. Price—To
be filed by amendment
(proposed maximum offering

price $24.25
To

per

increase

share.

Underwriter—None.

investments

dated Gas Co. and

stock

in

of

Proceeds—

Micnigan

consoli¬

Milwaukee Gas Light Co.

American Oil Producers, Inc. (8/28-29)
Aug. 8 (letter of notification) 290,000 shares of common
stock (par one cent).
Price—$1 per share. Underwriter
—S. W. Gordon Co., Brooklyn, N. Y.
Proceeds—For
drilling well, equipment and working capital.
Office—
5 Beekman

Inc., North Little"

Rock, Ark.
June

16

(letter of notification) 301,686 shares of com¬
(par 10 cents).
Price—75 cents per share.

stock

mon

by amendment.

stock

G.

Blair

First

Business—Supermarket.

Dealer-

18.

York.

Statement

16.

Underwriter—To

Probable

Boston

be

determined

bidders:

Corp.;

Halsey,

Blyth

&

Co.,

by competitive
Stuart & Co. Inc.;

White,

Inc.;

Weld

(jointly); Dillon, Read & Co. Inc. Proceeds—To
$8,000,000

&

Brewery Enterprises, Inc., Detroit, Mich.
Aug 10 (letter of notification) 150,000 shares of
Price—At par ($1 per share).
Proceeds—For
working capital.

stock.

bank

loans

for

and

construction

repay

program.

Expected this fall.
Coca-Cola Bottling Co. of St. Louis.

Julj| 27 (letter of notification) 4,000 shares
stocks; (par $1), to be offered to employees

stockholder.

Guardian

Sept.

on

New

Coy Glore, Forgan & Co. and W. C. Langlcy & Co.

Holdings Corp.

—None.

1985.

bidding.

8 (letter of notification) 15,000 shares of capital
stock. Price—At market
(approximately $2.75 per share).
Underwriter—First California Corp., San Francisco, Cal.
Proceeds—To Virgil D.
Da.di, President, the selling

mon

Co.,

Cleveland

1

Co., Inc., New York. Proceeds—To three selling
who own approximately 69% of the out¬

standing shares.

&

Electric Illuminating Co.
(9/19)
Aug. 22 filed $25,000,000 first mortgage bonds due Sept.

(par $1).

Underwriter—J.

expires

Hutton

Offjjje—2930

com¬

common

—S?5
Proceeds—To benefit employees for services.

per-share.

Underwriter

of

N. Market St., St. Louia,

ivio.

Columbian
Auk

Office—2343

Building, Detroit 26, Mich.

Enameling & Stamping Co.
(letter of notification) 2,385 shares of

3

Underwriter—Cohu & Co., New York.

stoq#.

•

common

Proceeds

Bristol Silver Mines Co., Salt Lake City, Utah
Aug. 14 (letter of notification) 1,000,000 shares of com¬
mon capital stock.
Price—At par (10 cents per share).

—t|| selling

Underwriter

working capital.
Office—218 Felt Bldg., Salt Lake City 1, Utah.

Au§, 10 filed 4,000,000 shares of common stock (par $1).
Underwriter—North American Securities Co. Proceeds—

•

Forfin vestment.

—

None.

Proceeds

California Convalescent Hospitals, Inc.
Aug. 17 (letter of notification) 17,000 shares of common
stock, of which 12,000 shares are to be publicly offered.
Price—$10 per share. Underwriter—Jack C. Miller, 95

Consolidated
11

F.

San

Francisco,

be issued

1,000 shares
exercise

upon

Colvin, Treasurer.
working capital.

Price—$5

ui

common

of option

per

by

Pro-

snare.

-For

Consumers

Power Co., Jackson, Mich.
499,903 shares of common stock (no par)
W offered present holders at the rate of one new

•
Canada
(Dominion of)
(8/30)
Aug. 22 filed $50,000,000 of 25-year 2%% bonds due Sept.
15, 1975. Underwriter—Morgan Stanley & Co. Proceeds
—To redeem a portion of $100,000,000
outstanding 4%
external bonds due Oct. 1, 1960, which have been called
for redemption on Oct. 1, 1950.

Superior Oil of California,

Co.,

Engineering Corp., Pasadena, Cal.

(letter of notification)

(par $1), to

Coronado, Ventura, Calif. Proceeds—For land, building,
equipment, and operating capital. Office—309 South "A"
St., Oxnard, Calif.

Canadian

Investment

California

For

—

stockholders.

rommonweafth

23

filed

jre for each 10 held, with
Underwriter—To
g with offering
457 shares of

ol

be

price.

an oversubscription privinamed
in
an
amendment,

Five months

ago

an

ersgwas underwritten by a group headed

Ltd.

Stanley & Co.

June 27 filed 2,150,000 shares of

common stock (par $1).
Price—To be filed by amendment. Underwriter—Dillon.
Read & Co. Inc.
Proceeds—For geological and drilling
operations in Canada. Temporarily postponed.

pe||share.
poned.

offering

stock to common stockhoki-

common

by

Morgan

Price—Expected to be not less than $33

Proceeds—For construction.

(Continental

Offering—Post¬

Refrigeration Corp., N.

Y.

•

Street, New York 7, N. Y.

American Radio & Television,

.

common

Aug.

ceeds—For expansion of

electronic

filed

of

Offer

E.

eflective Aug.

Inc., Detroit,

•

100,000 shares

be

Simon.

Manager—W.

stockholders

Proceeds—For general funds.

(par $100) and 750 shares of

$100).

Franklin

(8/29)

Aug. 3 filed
White &

(par 50
Underwriter—Thomas

Allen Organ Co., Allentown, Pa. (9-1)
July 19 (letter of notification) 1,500 shares of 6%

(par

Mich.

State¬

Aug. 8.

Big Bear Markets of Michigan,

Price—To

Alberta-Canada Oils, Inc.
(Del.)
(9/1)
July 18 filed 1,000,000 snares of common stock

ferred stock

ment effective

un¬

Office—113

Central Ave., Albuquerque, N. M.

cents).
Price—$2.50 per
G. Wylie Co., New York.

Emanuel, Deetjen & Co. and Lehman Brothers.

Canyon Lode Mining Co., Missoula, Mont.
Ju|| 28 (letter of notification) $250,000 of 6% 5-year
income notes dated June 1, 1950 in multiples of $1,000.
Aug. 10 (letter of notification) 500,000 shares of common
stock (par 10 cents). Price—25 cents
per share. Under^' ' Pr«^--At 100 and interest.
Underwriter National Inors Service, New York.
writer—None. Proceeds—For working capital. Office—
Proceeds—To pay expenses
3Y
rred in prosecuting infringement actions under pa425 Edith St., Missoula, Mont.
'
*n
and
for commercialization
of patent.
Office—50
Capital Transit Co., Washington, D. C.
*. .Jf •
dway, New York, N. Y.
Aug. 10 (letter of notification) 2,900 shares of common !,
stock (par $100).
Price—At the market (from $34.5ft
f l Cordillera Corp., Seattle, Wash.
to $35 per share).
11 (letter of notification) 100,000 shares of common
Underwriters—A. M. Kidder & Co.-.
,

Underwriters—Gearhart,

Kinnard & Otis, New York
Proceeds—For additional working capital. Office
—Fifth and Cornish Streets, No. Little
Rock, Ark.
City.
•

Animas Minerals, Inc., New York
Aug. 18 (letter of notification) 3,000 shares of common
stock (no par).
Price—$10 per share.
Underwriter—
None.

Purpose—For

working capital for exploration,
development and operation of mines. Office—115 Broad¬
way, New York 6, N. Y.
Arkansas

Power

&

ferred

and 45,891
shares of outstanding $6 preferred;
(b) the carrying forward of the company's construc¬
tion program.
Bids—Received by company up to noon
(EDT) on June 19, but rejected. Only one bid was made
of $100,003 per share, with a
$4.95 dividend from Lehman
Brothers, Equitable Securities Corp. and White, Weld &
Co. (jointly).
Statement effective June 12. No further

and

•

(Va.)

Loans, Inc.
Aug. 17 (letter of notification) $100,000 of 6% cumula¬
tive

preferred

Underwriter

capital

for

stock.

—

None.

loan

Price—At
Proceeds

balances.

par

—

To

($25

per

increase

Office—2002

No.

share).
working

Moore

St.,

Arlington, Va.
Associated Natural
March 14
stock

at

build

a

Co., Tulsa, Okla.
(letter of notification) 2,500 shares of common

$100

share.

per

natural

gas

No

underwriter.

transmission

line.

Proceeds

Office—105

to

N.

Boulder, Tulsa, Okla.
Avco

share.

1965

and

stock.

32,000 shares of

in

units

of

Price—$150

$100
per

stock

common

debentures

unit.

(par $5)

and

10

Underwriter—None.

expires

erties

payment

dernier—None. Proceeds—For working capital. Office
—South Main Street, Akron, Or
fCristina Mines, Inc., N. Y. City

use

pro"-

Telephone Co., Lincoln, Neb. (8/25)
Aug. 2 filed 97,000 shares of common stock (par $10)
be
&

offered

to

| 'and)$1,000) to

"k

stockholders of Central Electric
Co., the parent, of record about Aug. 25, at tfre.

Gas

rate of

one

Price—To

common

new

common

be

/Aujfc

held; rights expire

filed

by

about Sept. 20.
Dealer-Managers—

amendment.

Private Wires




to

all

offices

Chicago

Price—At

par.

4 (letter of notification)

100,000 shares of

common

(par $1).
Price—$3 per share.
Underwriter—
;C^M: MacDonald & Co., Detroit. Proceeds—To expand

2

Credit Corp., Washington, D. C.
(letter of notification) 3,000 shares of class

common

shares of

Mt.

"Ipiesel

^

Citizens

June

Un-

stoqk

Paine, Webber, Jackson & Curtis and Stone & Webster
/faculties and for working capital. Office—1320
Securities Corp., New York.
Proceeds—To pay unse^ ( Ell&tt Avenue, Detroit, Mich,
cured note held by International
Telephone & Tele- j
Power, Inc., Pittsburgh, Pa.

^ f July 28 (letter of notification) 25,000 shares of

common

i stodK to be offered only to common stockholders during
A i a
jid-day period, up to 100 shares each. Price—At par
stock (par $12.50) and 1,000 shares of class Bi
C$f|per share). Underwriter—Graham & Co., Pittsburgh,
stock (par 25 cents), to be sold in units of
Proceeds—To expand production and for working
three"! PaJtProceedsclass A

stock

and

one

share of class B

stock.

\

al.

ca

4M>%

par

($1#0

per

Proceeds—For

operations.

able

Pr

plant"

h

Office—

share

for

each

common

and

Wood

(8/28)

&

&

Co.

Co.,

shares

bonds:

Union

(jointly);

Halsey, Stuart & Co. Inc.:
Securities Corp. and A. C.

Harriman

Ripley & Co., Inc.',
Equitable SecurCorp.; Glore. Forgan
company up to noon

rte, Weld & Co.; Drexel & Co. and

(jointly); First Boston
Bids—To be received by
T) on Aug. 28. Proceeds—To

common

two

Bldg., 6th Ave.

mortgage bonds due 1980.
be determined by competitive bidding,

for

;Corp.

following
ratios: IVz shares for each
Oppenheim, Collins common
share; two shares for each Franklin Simon preferred
one

bidders

Loeb

stock (par $5)
1
(par $10) of Op-" !
penheim, Collins & Co., Inc., and for the 4V2% convert•
ible preferred stock (par $50) and common stock
(pari!/. '
$1) of Franklin Simon & Co., Inc., at the

and

Granite

Light Co.

uquesne

llrwriters—To
of

Price—At

stock, non-convertible.
share). Underwriter—None.

Office—601

ittsburgh 22, Pa.

'JujSf; 25 filed $12,000,000 first

preferred

share

!

stockholders.

'/Detroit Hardware Manufacturing Co.

share for each 13 shares of Central Elec-

stock

common

^defWriters
Roger W. Babson, Wellesley Hills, Mass.:
1
Witschner, Kansas City, Mo.; and Statistics OrganInc., Babson Park, Mass. Proceeds — To retire
%sh9P term banking debt and for working capital.
—

Central

offered in exchange for common stock

Cleveland

cer-

unit. Un^

Hibl^debenture notes (in denominations of $6J, $100, $500

Co., the selling stockholder, who will
outstanding notes.

ceeds to pay its

City Stores Co.
July 17 filed 149,317 shares of

Pittsburgh

up per

Ma|-

and conversion to dial
240 W. Monroe St., Decatur, Ind.

San Francisco

Sea-

,

tifijates of investment. Price—$50 and

Pro^

•

additions

Boston

mining

of

O/fice—902

Central Maine Power Co.,
Augusta, Me.
24 filed 400,000 shares of common stock (par 50
Aug. 23 filed 260,000 shares of common stock (par $10^
Underwriter—Max Wolberg, a director of cornUnderwriter—To be determined by competitive
bidding, npaify. Price—$1 per share. Proceeds—For development
Probable bidders: Blyth &
Co., Inc., and Kidder, Peabody |
Jonnage and mining and shipment of ore
& Co. (jointly); Coffin &
Burr, Inc.; First Boston Corpj; £
JJCrown Drug Co., Kansas City, Mo.
Harriman Ripley & Co., Inc. and
Goldman, Sachs & Co."i July 31 (letter of notification) $300,000 of 412% convert(jointly).
Proceeds—To go to New England PubliS

Citizens Telephone Co., Decatur, Ind.
April 27 (letter of notification) 3,000 shares

Philadelphia

operation

and

royalties.

of

Bldg., Seattle 1, Wash.

.

Price—$44.50 per unit. Underwriter—Emory S. WarrffT r
& Co., Washington, D. C.
Proceeds—For general funasL /
Office—1707 Eye St., N. W., Washington, D. C.

NewYork.

and

share. Und rwriter—None,

jCredit Finance Services, Inc., Akron, O.
Au£. 4 (letter of notification) $300,000 of 2% to 4%

of

unpaid construction costs and to repay 6%^
90-day notes given to directors; the balance for working
capital. Business—Operating horse racing plant.

common

Aug.. 28.. Dealer-Managers—

development

d

ceeds—For

graph Co.

Offer

!

p

to be

shares

Price—At 50 cents per

.

eeds—For

To be placed privately.

Littleton, Colo.
Aug. 14 filed $320,000 of 6% sinking fund debentures due

Manufacturing Corp., N. Y. City

July 14 filed 1,500,000 shares of common stock (par $3)
offered in exchange for shares of Bendix Home
Appli¬
ances, Inc., at the rate of two Avco shares for each Ben¬
dix

Proceeds.. /

Centennial Turf Club Inc.,

trie

Gas

Pierce, Fenner & Beane.

—To two selling stockholders.

Service

reached.

Arlington

Merrill Lynch,

offered

Light Co.

May 23 filed 155,000 shares of cumulative preferred stock
(par $100). Proceeds—To be applitd to (a) redemption
on
Aug. 1, 1950, at $110 per share plus dividend ac¬
cruals, of all the 47,609 shares of outstanding $7 pre¬

decision

.

and

uquesne
5 17

U

Pr

I

&

J

repay

bank loans and

construction.

ce

Light Co., Pittsburgh,

Pa.

filed 150,080 shares of preferred stock (par $50).

erwriters—To be determined by competitive bidding,
table bidders: Kuhn, Loeb & Co. and Smith, Barney
u,

(jointly); First Boston Corp.; Kidder Peabody &

of__jC^^errill

Lynch, Pierce, Fenner & Beane and White,

j

Volume 172

Number 4936

Weld & Co.

..

andffinancial

The Commercial

.

Eastern
7

Stainless

—For

(par $5) to

August 24, 1950

be offered to stockholders of record
Aug. 10 at the rate of
one

new

lor each

snare

privilege; rights
J.

Arthur

three held, with

expire

to

are

American Natural Gas Co

oversubscription

Aug. 25.

August 25,

Yvarner

& Co. Inc., New York.
Price-^J^.2
Proceeds—To pay bank loans and for work¬
capital. Statement effective Aug. 10.
'

ing

stockholders

12 shares held.

along
&

basis

on

pay

(par 50 cents).

Price—At market.

Howard

O'Connor, 302 Cliff Avenue,
Proceeds—To selling stockholder.

•

(Dominion

Alberta-Canada

which

75,807

will be

for

shares for selling stockholders.

company

Price—$1.25

iff

Y.

Vulcan

and

2%000

per

s£re.

will be used for working capital

comnany
reduce debt.
Florala

11:30

.lative preferred

Telephone Co.
notification) 1,200 shares of 4%

stock.

.Underwriter—None.
ize

Price—At par

($25

11:30

New

(EDT)

a.m.

..Bonds

19,

Bonds

'

Hampshire Electric Co

Bonds

OFFERINGS TEMPORARILY"
Canadian Superior Oil of

.Bonds

(EST).

POSTPONED

California, Ltd..Common

Consumers Power Co

Common

Fedders-Quigan Corp.

Common

•

<

General Radiant Heater

General

Plywood Corp., Louisville, Ky.
4;;
July 17 (letter of notification) 101,500 shares of conjjfnon
stock (par 5u cents). Price—$2.11 per share. Underwriter
—None. Proceeds—For

Middlesex Water

working capital. Office—334%ast

Broadway, Louisville, Ky.

Co., Inc.

Common
Common

...

Northwestern Public Service Co

Common

Rochester

Common

Telephone Corp..

Pfd. & Com.

Southern Co.

Common

Standard Coil Products

Transvision,

30

stock
in

to be offered

(par $1)

exchange

Common

Inc.

Common

United States Plywood Corp.—

Preferred

Douglas

comjhou

share-for-share

a

on

July 25.
•

Stores

Co., Inc., Oklahoma City, Okla.
Aug. 15 (letter of notification) 27,000 shares of class A

common
common

issues.

City.

•

stock

Proceed^—To expand chain stores.

City

(III.)

of

common

■MZ*.
W*<

Steel Co.

July 31 filed 99,446 shs. of
offered

stock (no par), b£ing
stockholders of record Aug. 22 on basis
common

share for each four shares held; rights Hvill
Sept. 5. Price—$35 per share. UnderwriterMerrill Lynch,. Pierce, Fenner & Beane, New York. Pro¬
one

expire

new

on

ceeds—For general corporate purposes.
Mines

Granville

Corp.,

Columbia.

-Feb.

16

filed

100,000

shares of

common

non-asses&blt

•

50c).

Graybar Electric Co., Inc., New York

Aug. 23 filed 72,000 shares of

common

fered for subscription by employees.
per

share).

mg

capital.

•

Underwriter—None.

stock, to

Price—At

of¬

paf^$20

Proceeds—For vrorkM )Z

Aug.

(letter

14

common

stock

of

notification)

(no par).

writer—Akin-Lambert

140

Price—$130

Qo.,

Inc.,

shares
per

of

share.

clafs A
Under¬

Los

Angeles,
Proceeds—To holders of outstanding scrip.
•

Hooper Telephone Co., Hooper, Neb.
18 (letter of notification) $30,000 of 3%%

Aug.
due

1970.

Aug. 8
stock.

To

Price—In

Wachob Bender Corp.,

excess

of

102%.

Omaha, Neb.

temporary loans.




'5^;

b^h<||

Underwriter^-

Proceeds—To

retire

accruals,

redeem, at $110 per shart plus
the 59,422 shares of outstanding $6

by company up to noon (EDT) on June
rejected.
Three bids were made as followsj
Union Securities Corp., $100.40 per share with a $4.65
dividend; Blyth & Co., Inc., and Equitable Securities
Corp. (jointly), $100.10 with a $4.65 dividend; and W. C.
Langley & Co. and First Boston Corp. (jointly), $100.30
with a $5.80 dividend. Statement effective June 12. No
further decision reached.

California, Newhall, Calif.

(letter of notification) 282,250 shares of capital

May 31
stock.

Price—At par ($1 per share).
A. Allen & Co., Inc., Los Angeles,

Underwriter—Floyd
Calif. Proceeds—To
buy land, build a plant and equip it to produce so-called
"impact" plastics. Office—244 S. Pine St., Newhall, Calif.
Merry Brothers Brick & Tile Co., Augusta, Ga.

June 15 (letter of notification) 1,250 shares of 5% cumu¬
lative preferred stock. Price—At par ($100 per share).

Underwriter—Johnson, Lane, Space & Co., Inc. Proceeds
Ernest B. Merry, Jr., Vice-President and General
Manager, the selling stockholder.
Inc.

June 1 filed 400,000 shares of common stock (no par) to
be offered to preferred stockholders of three subsidiaries

—Arkansas Power & Light Co., Louisiana Power & Light
Co. and Mississippi Power & Light Co.
Underwriter-

Equitable Securities Corp will serve as "dealer-man*
ager." (See also listings of Arkansas, ; Louisiana and
Mississippi companies elsewhere in these columns.)
Middlesex Water Co., Newark, N. J.
9 (letter of notification) 5,200 shares of common
stock offered to common stockholders at $50 per share
Feb.

on

one-for-five

a

basis.

Underwriter—Clark, Dodge &
working
Indefinitely postponed.

Proceeds—To pay notes and for additional

capital.

Miles

Laboratories,

Elkhart,

Inc.,

Ind.

June 23

(letter of notification) 2,500 shares of common
(no par). Price—$16.50 per share. Underwriter—

stock

Cohu &

Co., New York City. Proceeds—To two selling
Offering date indefinite.

•
Miles Laboratories, Inc. Elkhart, Indiana
Aug. 14 (letter of identification) 5,000 shares of common

stock

(par $2).

Co.,

Inc.,

(letter of notification) 10,000 shares of common
Price—At market (about $1.40 per share). Under¬
F. Hutton & Co., San Francisco.
Proceeds—

Miller
March

Underwriter—Albert McGann Securi¬
Bend, Ind.
Proceeds—To selling

South

^

Gas &

Water Co.,

(8/29)
July 28 filed $9,500,000 of first mortgage bonds, series
A, due Sept. 1, 1980. Underwriter—To be determined by
comoetitive bidding.
Probable bidders: Halsey, Stuart
&

Inc.; First Boston Corp.; Kidder, Peabody & Co.;
White, Weld & Co. and Shields & Co. (jointly); Lehman
Brothers and Bear, Stearns & Co. (jointly). Proceeds—
To redeem $9,440,000 outstanding bonds.

Inc.

Co.,

Mineral Mountain Mining & Milling Co.,
Arizona

Inc.

Co.

R.)

company's common stock.

•

Indiana

(Walter

6

(letter of notification) 1,000 shares of 6%
cumulative preferred stock at par ($100 per share). Un¬
derwriter—George D. B. Bonbright & Co., Binghamton,
N. Y. Proceeds—To assist in acquisition of 1216 shares

selling stockholder.

a

Tempe*

Aug. 17 (letter of notification) 50,000 shares of common
stock

(no par).

Price—$1

share.

per

Underwriters—

Albert A.

Tormohlen, 601 Tyler St., Tempe, and Fred C.
Boyse, 411 Mill Ave., Tempe.
Proceeds—For mining
and milling equipment and operating capital.
Office—
330 E.

14th

Street, Tempe, Ariz.

Mission

•

Indiana

14

Telephone Corp.,
(letter of notification)

cumulative preferred stock,

share).

per

Ind.

Indianapolis,
3,000

shares

of

4.80%

1950 series.
Price—At par
Securities Corp.,

Underwriter—City

Appliance Corp., Hawthorne, Calif.
July 24 filed 50,000 shares of 6% cumulative convertible
preferred stock. Price—At par ($20 per share). Under¬
writer—Lester & Co., Los Angeles, Calif. Proceeds—To
retire bank loans and install machinery and equipment

Indianapolis, Ind. Proceeds—For renewals, replacements
and improvements to property and for working capital.

in

•

water and space

International Vangorr Corp., Palmer Lake, Colo.

(letter of notification) 6,000 shares of capital
stock (par $50), of which 1,520 shares will be issued to
incorporators, 1,000 shares to holders of certificates of
indebtedness, 3,000 shares to be offered publicly and 480
shares in treasury.
Price—$50 per share.
Underwriter
Aug.

and

Proceeds—To
to

market

14

cloth

and

blanket

product.

Finance

Interstate
June

buy Angora

Corp.,

Dubuque,

Iowa

(letter of notification)

4,000 shares of common
stock (par $5) and 2,000 shares of B common stock (par
$5)
Price—$25 per share. Underwriter—None. Proceeds
—To

increase

working

capital.

Office

—

1157

Central

Kauai

mon

23

Engineering

(letter

stock

(par

of

heaters.

i

Mississippi Power & Light Co.
May 23 filed 85,000 shares of cumulative preferred stock
(par 100). Proceeds—To be used to redeem at $110 per
share plus dividends, the outstanding 44,476 shares of $6

preferred stock and for construction and other corpo¬
purposes.
Bids—Received by company up to noon
(EDT) on June 19 but rejected. Four bids were made
as
follows:
Union Securities Corp., $100.10 per share

rate

with

a

$4.80 dividend; Lehman Brothers, $100,551 with

$4.85 div.; W. C. Langley & Co. and First Boston Corp.
(jointly), $100.30 with a $4.90 dividend; and Blyth & Co.,

a

Inc.,

Securities Corp , Shields & Co., White,
Kidder, Peabody & Co. (jointly), $100.19
$4.90 dividend. Statement effective June 12. No

Equitable

Weld & Co. and

Ave.. Dubuque, la.

June

proposed new plant to be located east of the Rocky
Business—Manufacturer of gas and electric

a

Mountains.

17

—None.

mill

Hancock Oil Co. of California

San Francisco,

writer—E.

($100

Price—35c per share. UnderwritfcriNone.
Proceeds—To buy mining
machinery and $foi
working capital
Statement effective May 10.
M~
(par

Maryland Mines Corp.,

California

Aug.

British

Ltd.,

Canada

-stock

Idaho

and

220,000 shares of class B
stock (par $1).
Price—$1.10 per share for both
Underwriter—R. J. Edwards, Inc., Oklahoma

Granite

.

(psr $1)

Light Co.

be used to

but

19,

basis

£-

Gosselin

&

stockholders.

for

Shoe

dividend

ties

outstanding preferred stock of M&.iL
Co. No underwriter. Statement effective

Power

May 23 filed 90,000 shares of preferred stock (par $100).

stockholders.

Co., Inc

General
June

New York.

Co.

Co.

Safeway Stores, Inc

General Radiant Heater Co., Inc.
y
.May 3 filed I7u,000 shares ol common stock (par
■
Price—$3 per share. Proceeds—For plant and warehpuse:
advertising research, working capital, etc. Temporarily
postponed
Amendment may be filed.

Shoe Corp., Nashville, Tenn.
filed a maximum of 32,885 shares of

Leigh Foods, Inc. (N. Y.)
(letter of notification) 300,000 shares of capital
(par 10 cents). Price—$1 per share. Underwriter
—None. Proceeds—For working capital and general cor¬
porate purposes. Office—630 Fifth Avenue, New York 20,
June 30

Middle South Utilities,

.Notes

1950

Utah Power & Light Co. noon

Co., Washington, D. C.
Proceeds-^For
Office—2 East End Avenue, New Ybrk
Issue subsequently cancelled and will fffflr be

and develop
Fredriksen, R.F.D. 3,

property
H.

—To

Bonds

Light Co

October 9,

m.

mining
Harold

stock

September 27, 1950
New Bedford Gas & Edison

acquire

Address—c/o

1950

Illuminating Co....

September 26, 1950

shares.

\

mines.

Loven Chemical of

Delaware Power & Light Co

Kahn

21, N. Y.

Common

-m-

working capi.al.
distributed.

(EDT)

noon

Equip. Trust Ctfs,

Cleveland Electric

General Aviation Equipment Corp., N. Y.
Aug. 9 f letter of notification) 60,000 scares' of conffaotf
stock (par SI).
Price—$1.25 per share.
Underwrite—
C.

Co.

..Bonds

Light Co.

September

Price—$101 perTOnit.
Underwriter—George Patton & Co., Portland, Ore. Pro¬
ceeds—To pay off mortgages and for
additions, ptant

John

Common

*r

Co., Sherwood, Ore.
M
July 8 (letter of notification) 1,000 shares of 6% curtiila.tive preferred stock (par $100) and
10,000 shares of com¬
mon stock a par 20 cents)
to be offered in units of^tane

facilities and equipment.

Proceeds—To

Bids—Received

Debentures

Virginia Electric & Power Co.

Proceeds—To extend and modern¬

common

7, 1950

ler

Pennsylvania RR.

Leather

preferred and ten

(par 25 cents), of which 500,000 shares will be
exchanged for lease on mining claims and the remainder
offered to public.
Price—At par.
Underwriter—None.

preferred stock, and for construction and other purposes.

(EDT)

ctBriu-

plant, lines and other telephone facilities.
Frontier

Pfd. & Common

September 12, 1950

share)

per

•
Lead Zone Mining Co., Boise, Idaho
Aug. 14 (letter of notification) 900,000 shares of capital

Proceeds—To

Gas Transmission

a.m.

Utah Power &

aq$ to

(Ala.)

Common

Detinning Co

Tennessee

^

June 29 (letter of

Kaye-Halbert Corp., Culver City, Calif.
July 28 filed 100,000 shares of class A common stock
(par $1). Price—$5 per share. Underwriter—Sills, Fairman &
Harris, Inc., Chicago, 111. Proceeds—For working
capital.'

Louisiana

Oil^fcc

September 11, 1950

Underwriter—Jacquin, Stanley & Co., New York^for
93,807 shares; and J. Howard O'Connor, 302 Cliff v&ve.,
.Pelham, N. Y., to the extent of 10,000 shares.
Proceeds

;—To

Bonds

Pipe LinSlijfco

Plantation

Airflow, Inc., Wilkes-Barre, Pa.^
Aug. 15 (letter of notification) 103,807 shares of common
of

1950

i||

Sept

common

Underwriter—

Fleetwood

stock

—Bonds

Allen Organ Co.__

Pa^f

Pelham,

Common

Inc

30,

H.

SeptMber 1, 1950

plant at El Monte, CMif.!
for additional working capital.
Offering postp<5|ed

stock

oipffichigan, Inc

it
Canada

Honolulu, T. H. Proceeds
Co.'s Address—Box 1589, Lihue.

Boise, Ida.

29, 1950

Indiana Gas & Water jCo.,

promissory

Fleetwood-Airflow, Inc., Wilkes-Barre,
July 19 (letter of notification) 8,965 shares of

Common

Augff|t
Big Bear Markets

to complete purchase of a new
and

Bonds

Petroleums, Ltd

Underwriter—Smith,

Proceeds—To

Common

(EDT)

noon

working capital.

stock

1950

Producers, Inc

shari=

preferred

one

Oil

Duquesne Light Co.
Pacific

Price—To be filed by amendr

with dividend rate.

Co., New York.

of

Common

August 28,
American

Fedders-Quigan Corp.
June 21 filed 103,402 shares of series A cumulative
vertible preferred stock (par $50) to be offered to
mon

1950

Central Telephone Co

Equipment Finance Corp., Chicago, III.
Aug. 7 tiled 10,000 shares of 4% cumulative preferred
stock, to be offered to officers and employees of~$^is
corporation and of Curtis Candy Co., parent. Price—At
par
($100 per share). Underwriter—None. Proceei|$—
To acquire equipment and real estate for its
parent?

each

Common

Underwriter—

share.

per

T.

NEW ISSUE CALENDAR

Steel

Corp.
100,000 shares of capital stock

filed

31

writer—Ross & Co., Box 2665,

ant

bank loans. Expected late in September.

repay

(739)

(jointly); Lehman Brothers, W. C. L«,

& Co. Proceeds—To finance contruction
program

June

Chronicle

with

Works,

notification)

$1).

Ltd.,
98,000

Price—$1.10

per

Lihue,

Hawaii

shares of com¬
share.
Under¬

a

further decision reached.

Continued

on

page

32

32

The Commercial and Financial Chronicle

(740)

Continued

from

Mt. Carmel

'

*

July 24 (letter of notification) 3,000 shares of 4% pre¬
stock being offered to common stockholders of
record July 31 in ratio of one preferred for each six
held; rights to expire Aug. 30. Price

town

Underwriter—None. Proceeds—To re¬
tire short-term notes and expand facilities. Office — 316
Market St., Mt. Carmel, Illinois.
Hampshire

non-profit Kentucky corporation.
Cleveland, O.

a

Colorado

Co. of

Service

$7,000,000 of convertible debentures, due
and 100,000 shares of cumulative preferred stock
$100). Debenture financing reported abandoned,
with Colorado P. U. Commission approving private place¬
ment of $10,000,000 4.20% preferred stock.
Proceeds—•
June

Aug: 2 filed $3,600,000 of first mortgage sinking fund
bonds, series A, due 1975.
Underwriter—To be deter¬
mined by competitive bidding.
Probable bidders: Halsey,
Stuart & Co.

26 filed

1960,

For construction.
•

Dec. 31,

expiring

Dec.

writer

Unsubscribed

1952; and the balance for construction purposes.

Bids—Expected to be invited around Sept. 7 and opened
on
Sept. 19.
New

York Observer Corp.,

New York

18 (letter of notification) 10,000 shares of class A
stock.
Price—At par ($10 per share).
Underwriter—
None.
Officers and directors will' supervise distribution.
Aug.

Purpose—For working capital.
New

Office—440 Fourth Ave.,

York, N. Y.

Norlina Oil

Development Co., Washington, D. C.
stock (no par.) To
offer only sufficient shares to raise $1,000,000 at $5,000
March 28 filed 600 shares of capital

share. No underwriter. Proceeds to be used to

per

plore and develop oil and mineral leases.
fective May 22.
®

ex¬

Statement ef¬

Inc., Huntington Park, Calif.
Aug. 16 (letter of notification) $33,700 of 5% notes in
denominations
of $100
each
(convertible at holder's
option, par-for-par, for common stock, par $100). Under¬
writer—None.

Proceeds—For

Fe

Northern

May

stock

a

the

of

company.

Public

Service

of

Underwriter—Faroll

Huron, S. D.
stock (par $3) to
of

one

share

each 10 held.

New York.

Underwriter—A. C. Allyn and Co., Inc.,
Price—To be filed by amendment. Proceeds

—For construction

expenditures.

Postponed temporarily.

(letter of notification) 1,100 shares of common
held in treasury.
Price—50 cents per share

5

stock

now

Underwriter—None.

To

Watt

Proceeds—Toward

bank

and

Schoyer.

be

offered

through

Preston,

repayment

of

loans.

Orchards
stock.

Telephone Co., Orchards, Wash.
16 (letter of notification) 500 shares of common
Price—At par ($100 per share).
Underwriter—

None.

Proceeds—To modernize

March

plant.

•

Oxygen Products Co., Atlanta, Georgia
Aug. 16 (letter of notification) 2,500 shares of capital
stock (par $10), of which 1,234 shares are to be offered
for subscription by present stockholders and 1,266 shares
are

to

be offered

to

public.

Price—To stockholders at

and to public at $12.50 per share.
Proceeds—For
operating capital.
Underwriter—none.
Office—83 Cain
Street, N.E., Atlanta, Ga.

par

Pacific

June

30

Petroleums

Ltd.

900,000 shares of common stock (par
$1-Canadian). Price—To be filed by amendment. Under¬

writer—Eastman, Dillon & Co.

Pan

American

Proceeds—To

purposes,

bank

pay

including development

Ltd., Toronto, Canada
July 20, 1948 filed 1,983,295 shares of common stock (par
$1). Underwriters may be brokers.
•hare.

Proceeds

—

Price—45 cents pei

Mainly for development. Statement

effective April 10, 1950
Parks Air Lines, Inc., East St. Louis, III.
July 26 (letter of nqtification) 100,000 shares of common
stock (par $2). Price—$3 per share. Underwriter—None.
Proceeds—For

operating purposes. Office—Parks Met¬
ropolitan Airport, East St. Louis, 111.
Perlite

Aug.

10

benture certificates due

each)

and

30,000

1955

shares

certificates,

of

$400

share-. Underwriter—Robert
Proceeds—For
•

Pheoll

stock

common

each;
D.

for

(no

par).

stock, $1 per
& Co., Denver.

Bowers

working capital.*

used

of of shareholders to company.

'

to
'

pay

debt of

\

Plantation

Pipe Line Co. (9/7)
Aug. 10 filed $40,000,000 of 20-year sinking fund deben¬
due

1970.

Underwriter—Morgan Stanley

&

Price—To be filed by amendment.
Proceeds—For
struction of pipe line and other corporate

Co.
con¬

purposes.

Power

Inc., Boston, Mass.
(letter of notification) 85 shares of 5% noncumulative preferred stock (par $1,000) and 85 shares of
Repertory,
14

stock

common

Price

—

Petroleum

Ltd.,

Toronto Canada

April 25, 1949, filed 1,150,000 shares ($1 par) common
Of which 1,000,000 on behalf of company and 150,000
by
New York Co., Ltd.
Price—50 cents per share.
Under¬
writers—S. G. Cranwell & Co., New York. Proceeds—
For administration expenses and

drilling.

effective June 27, 1949.




For

(no par), the latter to be issued to pur¬
a consideration.
Underwriter — None.
purchase of equipment and operating
touring Shakespearean Repertory Co."

for

caoital

by

"a

Office—53 State

without

owner

preferred, at

Proceeds—For

par.

19

Street, Boston, Mass.

Airlines,

Inc., Pinehurst, N. C.
13,547 shares of

($1 per share).
Proceeds—For working capital.

—None.
•

Rhinelander

to

par

Underwriter

Statement

Probable

bidders are: Morgan Stanley & Co., Kidder,
Peabody & Co. and Merrill Lynch, Pierce, Fenner &
Beane (jointly); Blyth & Co., Inc. and Bear, Stearns &
Co. (jointly); Lehman Brothers; Union Securities Corp.
and Equitable Securities Corp. (jointly); Harriman Rip¬
ley & Co., Inc. Proceeds—To purchase shares of subsid¬
iaries in order to assist them in financing new construc¬
tion. Temporarily postponed.

be offered first to stockholders and then to
Price—At par ($1 per share).
Underwriter—
plant

for

pay

improvements

Standard Coil Products

Price—$15.25

share.

per

Y.)

one new

Price—To be filed by amend¬
Underwriter—The First Boston Corp., New York.

Sudors Gold Minos Ltd.;

Toronto, Canada
6, 1949, filed 375,000 shares of common stock. Price
share (U. S. funds). Underwriter—None.-Pro¬
ceeds—Funds will be applied to the purchase of equip¬
ment, road construction, exploration and development

—$1

per

•
Sylvan Products, Inc., Centralia, Wash.
Aug. 17 (letter of notification) 6,000 shares of 6% cumu¬
lative preferred stock.
Price—At par ($25 per share).

Underwriter

mill.
•

None.

—

Address—Box

—To
•

a

Price—Separately, at par, and in units, at $2,000 each.
Underwriters—Boettcher & Co. and Peters, Writer &
Christensen, Inc., Denver, Col.
Proceeds—For new ma¬
chinery, equipment and working capital. May be placed

semi-privately.

stock

writer—None.

Proceeds—To

stockholder.

Royal Television & Electronics, Inc.,
Washington, D. C.
June 22 (letter of notification) 600,000 shares of
stock (par 10 cents). Price—50 cents per share.

Tennessee

filed

10

bonds

Gas

bidding.

will

common

the

rate

of

be

one

to

share

common

for

each

.

preferred

not

common

needed

shares

for

well

as

the

as

new

preferred stock.

will

be

redeemed

amendment,

on

shares

along with

the

1.

Price—To

85,114 shares
and

dividend rate

be
on

30,225

filed

tho

by
now

preferred. Proceeds—To redeem the unexchanged 5%
stock, make cash payments on exchange, and toward the
prepayment of $20,000,000 in bank loans.
Offering—
Temporarily postponed until after Labor Day.

Offering—Postponed until

Syndicate, Inc.

after

Labor

Day.
Unexcelled

Chemical Corp.
(letter of notification) 52,097 shares of capital

Aug. 14
on

offered

be

to

basis of

one

new

to

stockholders

of

record

Aug.

21

for each five shares held; rights to

Unsubscribed shares to be offered to
others.
Price—At par ($5 per share).
Underwriter—None. Proceeds—For expansion and work¬

expire in 30 days.
and

employees

Office—350 Fifth Avenue, New York, N. Y.

ing capital.
United

Funds,

Inc.,

Kansas City,

Mo.

shares

at

Co., Oklahoma City, Okla.
April 27 (letter of notification) 225,782 shares of class A
stock (par 500).
Price—$1.25 per share. Underwriter—
Genesee Valley Securities Co., Rochester, N. Y.
Proceed*
—To acquire properties and for working capital.

Productions,

Underwriter—Waddell

&

Reed,

Proceeds—For investment.

United States Plywood Corp.
June

19

filed 60,000

shares of series B cumulative con¬

stock (par $100). Underwriter—East¬
man, Dillon & Co., New York.
Price—To be filed by
amendment along with dividend rate. Proceeds—To in¬
crease working capital and for other corporate purposes,
including the erection of a new plant at Anderson, Calif.
Temporarily postponed.
■
• •
,

,

Utah

&

Power

Light Co.

(10/9)

first mortgage bonds due 1980.
competitive bidding.
Probable bidders: Halsey, Stuart & Co. Inc.; Lehman
Brothers and Bear, Stearns & Co. (jointly); Union Secur¬
ities Corp. and Smith, Barney & Co. (jointly); First Bos¬
ton Corp. and Blyth & Co., Inc.; Harriman Ripley & Co.,
Inc.; Kidder, Peabody & Co.; White, Weld & Co.; Salo¬

Aug. 2 filed $8,000,000

Underwriters—To be determined by

mon

Bros.

gram.
on

Oct.

&

Hutzler.

Proceeds—For

Bids—Expected to be received

construction
up

to noon

9.

Utah

f <

Power

&

Light Co. (9/11)
Aug. 2 filed 166,604 shares of common stock
i

be offered to common stockholders of record

basis of

pro¬

(EST)

one new

(no par) to
Sept. 12 on

share for each eight shares held. Under¬

writers—To be determined by competitive bidding. Prob¬

Seneca Oil

Simmel-Meservey Television

stock (par $1).
Underwriter—Blair F. Clay-

share.

per

baugh & Co., New York.
Proceeds—To increase work¬
ing capital and repay loans from RFC and Croydon

held.

Any old preferred not exchanged
Oct.

Sept. 11,

on

Price—For plans, at principal amount, and

stockholders

exchange

(EDT)

market.

Lynch, Pierce, Fenner & Beane will offer

the unsubscribed

of

a.m.

for

the
preferred 205,661 shares will be offered in
exchange for 186,965 shares of outstanding 5% preferred
stock, along with an unspecified cash payment. Under¬
writer—Merrill

11:30

Fund Shares.

stockholders.

10

Proceeds—To pay off $35,000,000
for expansion.
Bids—Expected

compo¬

Street, Jackson, Mich.

offered

new

by

Stuart

acquire United Accumulative Fund Shares, 400,000 United
Science Fund Shares and 520,000 United Accumulative

Safeway Stores, Inc.
June 8 filed 321,000 shares of cumulative preferred stock
(par $100) and 257,064 shares of common stock (par $5).
The

bidders—Halsey,

Probable

line

pipe

determined

be

filed 300,000 shares of common

13

Price—2.75

vertible preferred

Ganson

(9/11)

Inc.

Transvision,

—None.

East

Co.

mortgage

notes and

Inc.

Office—2307

first

Under¬

common

Washington, D. C.

selling

Under¬
Presi¬

Inc.; Stone & Webster Securiites Corp. and White,
& Co. (jointly); Kuhn, Loeb & Co. and A. C.

Ryerson & Haynes, Inc., Jackson, Mich.
Aug. 15 (letter of notification) 5,000 shares of common
stock (par $1). Price—$13.87
per share.
Underwriter
two

Milliken,

Aug. 15 filed $5,000,000 of periodic investment plans to

buy television set

to

of

common

Office—238 William St.,

Underwriters—To

Allyn & Co. (jointly).

June

B.

Transmission

$40,000,000

1970.

due

Weld

•

•

go

Co., Mansfield. Proceeds

John

dent, the selling stockholder.
New York, N. Y.

stock

Roper (George D.) Corp., Rockford, III.
Aug. 3 (letter of notification) 4,500 shares of common
stock (par $5).
Price—$22 per share.
Underwriter—
Merrill Lynch, Pierce, Fenner & Beane, Chicago, 111.

Proceeds—To

plywood

Equipment Corp., New York
76,500 shares of
(par 5 cents).
Price—25 cents per share.

to be received up to

Rocky Mountain Textile Mills, Inc.
July 11 (letter of notification) $150,000 of 5% convert¬
ible sinking fund debentures, due 1960, and 15,000 shares
of common stock (par $10), to be sold separately or in
units of one $1,000 debenture and 100 shares of stock.

Proceeds—To

To establish

Television

struction

including con¬
Offering postponed.

Office—714 Fifth St., N. W..

—

selling stockholder.

of short-term

writer—None.

Proceeds

449, Centralia, Wash.

Tappan Stove Co., Mansfield, Ohio
(letter of identification) 1,000 shares of capital
(par $5).
Price—$22.50 per share. Underwriter—

Proceeds—For general corporate purposes,

loan.

&

Offer¬

June

& Co.

stockholders at rate of

a

(par $1).

Eberstadt

selling stockholders.
ing—Postponed until after Labor Day.
-

to be offered to present

repayment of

stock

common

Underwriter—F.

Proceeds—To three

competitive

and

Co., Inc.

Aug. 11 filed 367,500 shares of

Telephone Corp.
June 29 filed 125,000 shares of common stock (par $10)

ment.

Co., Shreveport, La.

Co., New York City.

Aug.
(N.

Gas

(letter of notification) 13,500 shares of common
stock to be sold by Ronald M. Craigmyle, at market
(about $7.37V2 per share) through Craigmyle, Pinney &

and

expansion.
Rochester

Natural

June 26

Aug. 16 (letter of notification)

(Wis.)

Proceeds—To

None.

Co., Atlanta, Ga.

Citizens National Bank & Trust
common

Telephone Co.
Aug. 16 (letter of notification) 100,000 shares of common
public.

Hills,

stock

(letter of notification)

capital stock. Price—At

Beverly

Drive,

Aug. 14

shares which will be created by converting that many of
the old 5% shares brought in under the exchange into

Manufacturing Co., Chicago, III.

stockholders, part of which will be

tures

•

Aug.

Of

of 5V2% de¬
(in denominations of $500

Aug. 23 filed 112,500 shares of common stock (par $4).
Price—To be filed by amendment.
Underwriter—Blunt,
Ellis & Simmons, Chicago.
Proceeds—To four selling
some

Underwriter—Bonds, Inc., Kansas City, Kansas.

at

Mines

Co., Denver, Colo.
(letter of notification) $150,000

Price—For

Distribution Shares, Inc.,
City, Kansas
Aug. 23 filed 100,000 shares of common stock (no par).
Price—83 cents in excess of the net asset value per share.

nents.

Gold

Southern

Co. Inc.

Proceeds—For benefit of Grace Y. Roper, a

(8/29/30)

filed

loan and for corporate
of oil and gas lands.

Philadelphia 6, Pa.

share for each four held.

Ohio Oil & Gas Co.

May

Under¬
publicly

Kansas

stock,

Co.,

Juc.e 9 filed 49,200 shares of common
be offered to present stockholders at rate

per share.
be offered

Quarterly

Resort

& Tracy and Shields & Co., Chicago.

Northwestern

or

•

(no par)

Vice-President

& Co., Rogers

Walnut I Street,

226

June
Coal

Corp., Chicago
notification), up to 2,000 shares

of

to

Office

to be sold at the market price
(between $20 and $22 per share) by T. Howard Green,

common

shares

through Burton, Cluett and Dana, 120 Broadway, New
York, N. !Y.
Proceeds—For working capital.
Office—

Ave., Huntington Park, Calif.

Illinois

(letter

10

working capital.

Price—$25

1950.

4,

chasers of preferred

Normac,

—7339 Santa

—

Beverly

June 23 filed 1,000,000 shares of common stock (par $5).
Underwriters—To be determined by competitive bidding.

Southwest

(letter of notification) 10,000 shares of capital
stock (par $20) to be offered on a one-for-four basis to
stockholders of record Oct. 20, 1950, with the rights
2

So.

Thursday, August 24, 1950

Calif.

Quaker City Fire & Marine Insurance Co.

Inc.; The First Boston Corp.; Kidder, Peabody & Co., and White, Weld & Co. (jointly). Proceeds
—To retire (a) $1,880,000 first mortgage bonds, series A
and B, due 1963, and (b) $1,250,000 of bank loans due

Aug.

Office—321

poses. ^

(par

(9/19)

Electric Co.

Industries, Inc.,

Public

($100 per share).

New

Ohio

Office—1974 East 61st Street,

At par

—

Cleveland,

Co.,

(letter of notification) $100,000 of 3% first
mortgage bonds in denominations of $500 each. Under¬
writer—None.
Proceeds—To build factory for Bards16

Aug.

Public Utility Co.

ferred

common

Printr-Biederman

e

31

page

(III.)

...

Inc.

June 29 (letter of notification) 150,000 shares of common
stock
(par $1).
Price—$2 per share.
Underwriter—

Koellmer & Gunther, Newark, N. J. Proceeds—To com¬
plete films in progress and-for general corporate pur^

able bidders:

Blyth & Co., Inc.; Union

Securities Corp.

Smith, Barney & Co. (jointly); Lehman Brothers;
W. C. Langley & Co. and Glore, Forgan & Co. (jointly);
Kidder, Peabody & Co. and Merrill Lynch, Pierce, Fen¬
ner & Beane (jointly).
Proceeds—For construction pro¬
gram.
Bids—Expected to be received up to noon (EDT)
on Sept.
11.
'
and

.

Vieh Co.,

Columbus, Ohio
May 8 (letter of notification) 19,500 shares of common
stock at $10 per share. Underwriter—The Ohio Co. Pro-

Number 4936

Volume 172

.

.

The Commercial and Financial Chronicle

.

buy the assets of Brodhead-Garrett Co. and
capital.

eeeds—To

for working

filed $20,000,000 first and refunding mortgage
bonds, series H, due Sept. 1,1980. Underwriter—To be de¬
termined by competitive bidding. Probable bidders: Hal9

Co. Inc.; Union Securities Corp.; Kuhn,
& Webster Secu¬

Stuart &

sey,

Loeb & Co.: White. Weld & Co.; Stone

rities Corp.; Salomon Bros. & Hutzler; First
Proceeds—To pay $8,000,000 of bank loans

Boston Corp.

and for con¬
struction program.
Bids—Expected to be received up to
11:30 a.m. (EDT) on Sept. 12.
Vulcan

(9/7)
Aug. 15 filed 120,000 shares of common stock (par $10).
Price—To be filed by amendment.
Underwriter—Gold¬
Detinning Co.

Sachs & Co. and Lehman Brothers.
Proceeds—To
Can Co., Inc., the selling stockholder.
.

man,

Continental
•

Watts Seed Co., Parma,

Disinfecting Co.

(letter of notification) 3,000 shares of common

July 25

Price—At market (about $10 per
share). Underwriter—Coffin & Burr, Inc., New York.
Proceeds—To selling stockholder.
Office—42-16 West
stock

(par 50 cents).

Street, Long Island City, N. Y.

1,406 shares of capital
of one share
for each two shares held. Price—At par ($50 per share)
Underwriter—None. Proceeds—To pay bank loans.
June

22

(letter of

$

notification)

be offered to stockholders at rate

stock to

.

Uranium

Western

Cobalt Mines,

Ltd.,

B. C., Canada
800,000 shares of common

filed

28

capital stock

June 3 it

this

Sachs

&

•

Co.

underwriter:

Traditional

year.

Goldman

Co.

Alabama

Aug. 22 it

Co.

Power

announced company has filed with Ala¬

was

S. Commission an application covering a pro¬
posed issue of $10,000,000 preferred stock.
Underwriter
—To be determined by competitive bidding.
Probable
bama

Cleveland

Aug. 1 it

holders

of preferred stock, of which 495,011
value are presently available, stock¬
April 25 having increased the authorized

no

on

amount to

Illuminating Co.

issue

an

of

Electric

par

750,000 shares from 500,000 shares.

The pro¬
ceeds are to be used for construction program. Probable
underwriter: Dillon, Read & Co. Inc. if negotiated sale.
Edison

of

Co.

New

York,

Inc.

May 15, Ralph H. Tapscott, Chairman, said the company
will require approximately $90,000,000 of "new money'

through the sale of securities. No permanent financing is
contemplated before this fall, however, and current ex¬
financed by short-term loans, oi
outstanding. It is anticipated

penditures are being
which $16,000,000 are

will be needed for the construction pro¬
the next four years. Probable bidders: Hal¬

over

Stuart &
Corp.

Co.

Inc.;

Stanley

Morgan

&

Co.; First

Consolidated

Lobster

Inc.
plans to offer addi¬
tional capital stock (no par) for subscription by stock¬
holders. At April 30, 1950 there were outstanding 34,393 shares out of 47,000 shares authorized.
Aug. 11 it

stated that

was

Co.,

company

& Light Co.

Power

(9/26)
Aug. 1 it was reported that company plans to issue this
fall
approximately $12,000,000 to $14,000,000 of new
bonds to complete its 1950 financing program. Probable
bidders: Halsey, Stuart & Co. Inc.; Kuhn, Loeb & Co.
and
Salomon Bros. & Hutzler (jointly); First Boston

Utilities

Associates

May 23 it was announced that under a plan filed witn
the SEC a new company will be formed to acquire the
assets of Eastern, and of the Brockton Edison Co., Fall
River Electric Light

Co. and Montaup Electric Co. and

will

$22,000,000

issue

sell

and

collateral trust bonds

Paso

El

and

Electric

Co.,

of

first

mortgage and

$8,500,000 of preferred stock

El Paso, Tex.

bidders: Morgan Stanley & Co.;

July 19 it was announced company plans to refund $3,500,000 bank loans (authority for which is sought from
FPC) with permanent financing prior to March 31, 1951,

struction

The last issue ^of debentures was
placed privately last September with the John Hancock
Mutual Life Insurance Co. Previous financing underwrit¬

Blyth & Co., Inc.; Union
Securities Corp. and Equitable Securities Corp. (jointly);
First Boston Corp.; Drexel & Co.
Proceeds—For con¬
program.

Investment Co. of

ten

Illinois

May 24 announced company is planning to file shortly
a registration statement covering 160,000 shares of prior
preferred stock (par $50). Price—To be filed by amend¬
ment. Underwriters—Glore, Forgan & Co.; Kidder, Peabody & Co., and Alex. Brown & Sons, and others.
ceeds—For additional working capital.
Anton

their

Pro¬

maturity

Elliott Co.

May 26 it was reported that between 47,000
shares of this company's common stock may
time

some

Co.

May

stock.

needed.

Ltd.

Telephone Co.,

the

:,v.;

:

Corp., Fort Worth, Tex.
July 31 it was rumored that a registration statement will
be filed covering $10,500,000 of preferred and common
Associated

in

near
■

•

Radio

futuer

F.

!

v

:

&

through

and 48,000
be offered

Eberstadt

&

.y":

announced that
company may use unissued 1,240,390 shares of capital
stock (par $5) to acquire additional plant facilities if
Traditional underwriter: F. Eberstadt & Co.

•

tional funds

Empire District Electric Co.
Aug. 21 it was reported that early registration is ex¬
pected of $7,000,000 bonds and 50,000 shares of com¬
mon
stock.
Underwriter—Probably The First Boston

50,000

Corp.

June

15

intention

it

announced

was

is

to

raise

that

the

company's

present

approximately $10,000,000 of addi¬

by selling, in the fall of the current year,
additional shares of cumulative preferred stock
(par $20), a like amount of common stock (par $20) and
$8,000,000 of first mortgage bonds, series G.
Under¬
writers—For preferred stock, probably Paine, Webber,
Jackson & Curtis, Stone & Webster Securities Corp. and
Mitchum, Tully & Co. For the bonds, to be determined
by competitive bidding.
Probable bidders for bonds:
Halsey, Stuart & Co. Inc.; Kuhn, Loeb & Co. and Salo¬
mon Bros. & Hutzler (jointly); Lehman Brothers; Paine,

Webber, Jackson & Curtis and Stone & Webster Secur¬
ities Corp. (jointly); White, Weld & Co. and Kidder,
Peabody
& Co. (jointly); Equitable Securities Corp.
and Harris, Hall & Co. (Inc.) (jointly).
Proceeds—For
construction

program.

Investment

Associates

29

Co.,

South

Bend,

Ind.

announced stockholders will vote Aug.
authorizing an issue of 200,000 shares of preferred

July 26, it
on

May

Merrill Lynch, Pierce, Fenner
•

California

Electric

& Beane.

Power Co.

Aug. 8, Albert Cage, President, announced that company
is studying plans for financing and constructing a steam
plant of substantial size at the earliest possible date. The
following bid on $2,000,000 bonds last June: Halsey,
Stuart & Co. Inc. and Kidder, Peabody & Co.
Common

by William R.
Co., Pacific Co. of California and Walston, Hoff¬

sKtock financing in May was underwritten
Staats
man

& Goodwin.

Central
March

1

it

States

was

Electric

Corp.

announced that under an amended plan

reorganization it is proposed to issue to holders of all
classes of 6% preferred stock for each old share the right
to buy a unit consisting of eight shares of new common
stock and $14 principal amount of new 41/2% income de¬
bentures for a package price of $18. The common stock,
except for approximately 4,600,000 shares held by Harri¬
son Williams and associates, would be offered the right
of

to

buy a unit of one new common
fncome debentures for a package




Power Corp.

•

Florida

was

company

Power Corp.

Aug. 21 it was announced

Telephone Co.

of long-term bonds and not less

than $600,000 additional
$1,300,000

Proceeds will be used to repay

stock.

common

bank

loans, due in September, 1951, and the remaining
$300,000 will go to Central Telephone Co., parent, to re¬
pay temporary advances for construction.
Probable un¬
derwriter: Paine, Webber Jackson & Curtis.
Long Island Lighting Co.
was reported company's construction program
will cost $20,000,000 which is currently being

May 18 it
in

1950

financed
manent

by up, to, $12,000,000 bank loans^ pending per*
financing which may be. done following effec¬

tiveness of consolidation plan.

Probable bidders for

my

securities include Smith, Barney & Co.

new

Lorillard

(P.)

Co.

4, Herbert A. Kent, President, said: "It mar bt
necessary to do some financing" before Aug. 1, 1951 tc
redeem $6,195,450 of 5% bonds due on that date and

April

for

additional

volume.

He

working

added

that

capital to meet expanded saler
company plans to pay off
its

bank loans in full by July, 1950. These loans now amount
to $12,000,000.
Traditional underwriters: Lehman Bro#
and

Smith, Barney & Co.

Loyal

Automobile

Insurance Co., Los AngePes
applied to California State Insurance
Department for authority to issue a total of 100,000 shares
of capital stock (par $1), of which 50,000 shares are to

Aug.

14

company

be offered

less

a

days.

to California stockholders at $2.50 per

share,
rights are exercised within 60
The remaining 50,000 shares are to be offered to
10%

discount

if

bona fide California residents at $3 per share.

Macy (R. H.) & Co.
May 8 it was reported that

company is considering issu¬
$10,000,000 of new securities, either debentures
or preferred stock.
Traditional underwriters — Lehman
Brothers: Goldman, Sachs & Co.

of

ance

Market

Basket, Los Angeles, Calif.
announced it plans sale of 4,452 sharet
of authorized but unissued, preferred stock, series C,
(par $15) and an additional 30,000 shares of preferred
stock, (par $15) to be authorized. Further details mot

May 25

company

available.
Meek

July 29 it

Industries,

Inc., Plymouth,

Ind.

reported company plans sale of approxi¬

was

mately

250,000

market

conditions.

shares of common stock, subject to
Underwriter—Otis & Co. Proceed!*

working

capital.

,

*

Michigan Bumper Corp., Grand Rapids, Mich.
July 20 stockholders voted to increase authorized com¬
mon stock (par $1) from 250,000 shares to 500,000 shire*,
with holders of present outstanding stock to have no pre¬
emptive rights.
*
y
Michigan Consolidated Gas Co.
7 it was announced company contemplates

Aug.

per¬

manent

financing will be consummated before maturity
(Feb. 20, 1951) of proposed $25,000,000 bank loans which
will include, during 1950, $20,000,000 of first mortgagebonds and $6,000,000 of common stock, and the sale, in
1951, of about $10,000,000 of preferred stock. Under¬
writers for Bonds—To be determined by competitive
bidding. Probable bidders: Halsey, Stuart & Co. Inc.;
White, Weld & Co. and Lehman Brothers (jointly);

stockholders will vote Oct. 2

approving a new series of 40,000 authorized shares
of preferred stock (par $100).
Underwriter—To be de¬
termined
by competitive bidding.
Probable bidders:
Kidder, Peabody & Co. and Merrill Lynch, Pierce, Fen¬
ner & Beane (jointly).
Proceeds—For construction pro¬
gram and to repay bank loans.
Florida
9

Power &

stockholders

Pro¬
off short-term bank loans and for new
The additional common stock will he

pay

construction costs.
sold to American

Natural Gas Co.,

parent.

Expected this

Fall.

Michigan-Wisconsin Pipe Line Co.
company received SEC authority to borrow r.d
than $20,000,000 from banks. A permanent financ¬
ing program provides for the elimination of these bank
loans prior to their maturity, July 1, 1951, and such pro¬
gram will include the issuance and sale of $12,000,(M
additional bonds and $3,000,000 of additional common
stock.
Previous debt financing was placed privately.

July 25
more

on

June

Crosse

ceeds—To

said to be considering new
financing in the form of bonds, preferred stock and
common stock, the proceeds to be
used to continue its
construction program.
Previous financing handled by
Kidder, Peabody & Co.
the

31

was

be placed privately.
Traditional under¬
writers: F. S. Moseley & Co.; Glore, Forgan & Co.; and
stock.

La

June 6, company announced that it has advised the Wis¬
consin P. S. Commission that it expects to sell $1,000,000

Smith, Barney & Co. and Blyth & Co., Inc. (jointly).

Florida

July

to

Corp.

V

Phonograph Corp.

Benjamin Abrams, President,

29,

plan sale of first mortgage
$3,200,000 construction pro¬
Probable underwriter: The First Boston
said

company

for 1950.

gram

—For

by White, Weld & Co.

Emerson

Oil

date.

26

bonds to finance part of its

now

Boston

P.

American

Iowa Southern Utilities Co.

that $257,000,000
gram

33

financing will be necessary, he added.
This may be
done
through additional common or preferred stock
financing.
April

reported that company this fall may issue

was

sell

and

shares

Eastern

reported company may do some financing

was

later

stock and

Corp.; Union Securities Corp.; Lehman Brothers; Morgan
Stanley & Co.; White, Weld & Co. and Shields & Co.
(jointly); W. C. Langley & Co. Expected Sept. 26.

Prospective Offerings
Finance

new

•

(par $1). Price—35 cents per share. Underwriter- None
Proceeds—Exploration and development work. State¬
ment effective May 23.

Aetna

of

group headed by Hemphill Noyes, Graham,
Co., Shields & Co., Blair, Rollins & Co., Drexel

Delaware

Vancouver,
Feb.

issue

Chenango & Unadilla Telephone Co.
July 17 company applied to New York P. S. Commission
for authority to issue $1,000,000 of mortgage bonds, $357,000 of preferred stock and $300,000 of common stock.

sey,

Co., Franklin, N. C.

Western Carolina Telephone

The

& Co. and Sterling Grace Co.

Consolidated

14

West

banking

Parsons &

Idaho

(letter of notification) 500 shares of 5% pre¬
ferred stock.
Price—At par ($100 per share).
.Under¬
writer—None.
Proceeds—For working caDital.
Aug.

shares held.

common

debentures would be underwritten by Darien Corp. and
a

(9/12)

Virginia Electric & Power Co.
Aug.

five

(741)

Light Co.

MidSouth

July

31

it

company may

approved creation of 50,000 shares

$4.50 cumulative preferred stock (par $100). These
shares are soon expected to be offered to finance part of

mon

Gas

Co.

announced that this newly organised
issue and sell publicly $2,800,000 of com¬
place privately with institutional investors

was

stock and

mortgage

bonds, .the

of

$6,900,000

construction

proceeds to be used in connection with the acquisition
of the gas distribution properties of Arkansas Power &

program

which is expected to require ap¬

proximately $25,000,000 new capital through

1952.

of

20-year

3%%

first

Aug. 2 filed

new

Light Co. Initially it is planned to sell $800,000 stock and
$1,500,000 of bonds. Underwriter for Stock—Equitable
Securities Corp., T. J. Raney & Sons and Womeldorif &

construct

335-mile

Lindsay.

* *

Georgia Natural Gas Co., Albany, Ga.

application with FPC for authority to
pipeline system in Georgia and
Florida to cost about $5,100,000, which would be fi¬
nanced
through issuance of first mortgage pipe-line
bonds and the sale of common stock.
Previous appli¬
cation
•

a

was

withdrawn.

Hollingsworth & Whitney Co., Boston, Mass.

plans to issue

$5,800,000 of new bonds and use the proceeds
for its expansion program. Probable underwriters: Paine,
Webber, Jackson & Burtis and Harriman Ripley & Co.,
sell

Inc., and associates
Houston Lighting & Power

Co. '

share and $1.75 of new

April 14, S. R. Bertron, President, estimated construction
expenditures for 1950 between $19,000,000 and $20,000,000.
This estimate may be raised to accommodate increased

price of $2.25 for each

power

demands

on

the system.

Gas

Light Co.
that the company's perma7*eiit

financing program, expected to be consummated prior
October, 1950, will involve refinancing of $13,334,000
of first mortgage 4J/2% bonds due 1967, $2,000,000 of 7%
preferred stock and bank loans (about $8,500,000) through
the issuance of new senior securities and common stock

to

Aug. 15, it was reported that the company
and

Milwaukee

June 21 it was announced

If this is the case, more

(American Natural Gas Co. now owns 97.7% of

presently

Probable bidders for bonds:
Halsey, Stuart & Co. Inc.; Glore, Forgan & Co., and Leh¬
man
Brothers (jointly); Kidder, Peabody & Co.; Harri¬
man Ripley & Co.; Smith, Barney & Co.. Kuhn, Loeb *
Co. and Blyth & Co., Inc."(jointly).
Some $27,000,000
of new bonds may be issued.
- 1
•
f
;
Continued on page 34
outstanding common stock).

34

The

(742)

Continued

from

Mountain

page

Fuel

to

33

Supply Co. of Utah

firm
to take over its exploration ana development of natura;
gas and oil
operations. It will be financed, in part
through public sale by the new unit of 1,000,000 shares oi
capital stock (par $8). Financing plan submitted by Fir^
June 6

announced plans to create a new

company

additional
Cruttenden

New Bedford Gas & Edison

(9/27)

Light Co.

Aug. 9 company applied to SEC for authority to issue
and sell 10,631 additional shares of common stock (par
$25) and $3,750,000 of 25-year notes, series B, due 1975,
the latter at competitive bidding, with probable bidders

including Halsey, Stuart & Co. Inc.; Coffin & Burr and
F. S. Moseley & Co. (jointly); Kidder, Peabody & Co.;
Harriman Ripley & Co.,

subscription by

Inc.; First Boston Corp.; Whiting,

The commbn stock is to be offered for

Weeks & Stubbs.

stockholders at $67.50 per share,

common

with New England Gas and Electric

Association, parent,

unsubscribed shares. Proceeds from stock sale
will reimburse Plant Replacement Fund Assets for con¬
struction expenditures, while proceeds from sale of notes

New

like amount of bank loans.

England Power Co.
$37,000,000 nev
construction costi
$40,000,000 for 1950 to 1952. Present plani

estimated at

in

issue

to

and

bidders:

late

For

(1)

of

early

or

summer

shares

50,000

about

pay

preferred

fall
stock.

$10,000,00*
Probabl»

bonds and

New

Orleans

Public

Service,

Inc.

Aug. 2 company applied to SEC for authority to issue
and sell 160,074 additional shares of common stock (no
par) to be offered to common stockholders at rate of
0.168 share for each share held.

parent,

and

owner

of

Middle South Utilities,

906,671.823

shares

New

of

Orleans stock, proposes to purchase 152,320 of the 160,074 shares to be offered.
Price—$25 per share. Pro¬
ceeds—For construction program.
New York State

Electric

&

Gas

Corp.

May 24 it was reported company expects to sell $14,
000,000 of bonds and $6,000,000 of new preferred stoc*
June, 1951, with an additional $10,000,000 of nev

securities to be sold in

1952, the proceeds to be used ti

pay, in part, cost of new construction estimated to tota.
$55,800,000 in the next three years.
Probable bidden
for bonds and preferred: Blyth & Co.,
Inc., and Smith
Barney & Co. (jointly); First Boston Corp. and Glort
Forgan & Co. (jointly); Harriman Ripley & Co. Inc

Probable bidders

for bonds

only Halsey, Stuart & Co

Inc.

Niagara

Mohawk

Power

Corp.

Jan. 19 announced that construction program will
sitate in 1950 not more than

neces¬

$25,000,000 of additional debi
equity financing, including short-term bank loane

Probable bidders

for

bonds:

Halsey, Stuart & Co. Inc.

Morgan Stanley & Co.; The First Boston Corp.; Kuhn
Loeb & Co.
•

unuer-

was

Electric

would

be

eithei

6, it

was

Standard

Oil

Underwriter—May be Morgan Stanley & Co. Proceeds—
new pippe
line, with construction to
begin early next year and completion scheduled for

To be used to build

early

1952.

Aug. 15 it was reported that the company is to issue and
sell publicly not
exceeding 40,000 shares of common
stock (par $10).
Probable underwriter: Glore, Forgan
& Co., New York. The proceeds are to be used for car
rebuilding program.
Northern

July 29 it

States

Power

Co.

(Minn.)

$15,000,000

3%

bonds

due

1970

and $15,000,000
Halsey Stuart & Co.
Inc.: Morgan Stanley & Co. and Drexel & Co. (jointly):
Kuhn, Loeb & Co. and Lehman Brothers (jointly); First
Boston Corp.

bonds due 1972.

Probable bidders:

future

it
sell

series

T.

issue

an

of

company

and

in

the

authorized

common

Inc.,

Manchester, Conn.

was

$150,000 of additional capital stock at $1 or $2
share. There are presently outstanding 1,381 shares
of stock, which are closely held.
per

San

Diego Gas & Electric Co.

July 31 it
to

issue

late

was

reported that the company's original plan
$8,000,000 and $10,000,000 of bonds

between

in September or early

October may be changed to
preferred stock, depending upon market conditions. If
negotiated, Blyth & Co., Inc. may handle financing. If
competitive, probable bidders are: Blyth & Co., Inc.;
Lehman

Brothers

and

Bear, Stearns & Co. (jointly);
First Boston Corp.; White, Weld & Co. and Shields &
Co. (jointly); Merrill Lynch, Pierce, Fenner & Beane;
Union Securities Corp.; Salomon Bros. & Hutzler. Pro¬
ceeds would go toward construction program.

announced that the company's entire

com¬

stock issue
(440,000 shares) was expected to be
registered with the SEC in the near future and offered
mon

to

sale

the

highest bidder by the Office of Alien
Probable bidders: A. G. Becker & Co. (Inc.),

Property.

Union Securities Corp. and

Ladenburg, Thalmann & Co.
(jointly); Merrill Lynch, Pierce, Fenner & Beane; Kid¬
der, Peabody & Co.; F. Eberstadt & Co.; Allen & Co.;
new
company to be formed by United States & Inter¬
national Securities Corp.; Dillon, Read & Co.; F. S. Mose¬
ley & Co.; Riter & Co.
Sierra

Riter

&

Pacific

Co.

be

(jointly);

used

Northwest

for

Smith,

new

Pipeline

Barney

&

Co.

construction.

Pacific Power Co.

being

Power &

Light Co.
April 13, Paul McKee, Presdient, disclosed that
of 16 purchasers who
acquired
of common stock from

a

group

company's 500,000 shares

common

for

Aug.

prior

Oct.

to

31,

1950.

Halsey, Stuart & Co. Inc.;
Corp.

Electric

&

S. C. McMeekin, President, said the company
issue and sell later this year $3,000,000 of
new bonds
(in addition to private placement of $3,000,000
of 4.60% cumulative preferred stock, par
$50), the pro¬
ders

to

finance

to

construction

program.

Probable

bid¬

for

bonds: Halsey, Stuart & Co. Inc.; The First
Corp. and Lehman Brothers (jointly); Kidder,
Peabody & Co.; Union Securities Corp.

Boston

South

Jersey Gas Co.

on

South Jersey Gas Co. common stock as to which
exemption from competitive bidding is requested.

publicly
Company also expects to raise $3,000,000 in new

offered.
money

later

this

Registration of

Packard-Bell

Aug. 2 it
of

an

was

and a similar amount in 1951.
1,750,000 expected next month.

Co.

stated that

increase

500,000 shares,

in
par

15 United Corp. proposed, under its amended plan
filed with SEC, to sell its holdings of 154,231.8 shares of

the

following approval

authorized

common

$1, to 1,200,000 shares,




4

on

Aug. 25

stock

par

from

50 cents,

.

stockholders

orized
It

have approved an increase in the
stock to 1,000,000 shares from 500,000
understood that 125,000 shares

common
was

may

Union

March 3

it

California

Edison

an

Co.

reported that company expects to issue
$55,000,000 of bonds.
Probable bidders:

was

this

summer

The

First

Boston

Corp. and Harris, Hall & Co. (Inc.)
(jointly); Halsey, Stuart & Co. Inc.; Blyth & Co., Inc.;

Shields

&

Co.

Proceeds would

be

Securities Corp.;

Langley & Co.

.

[Tobin Packing Co.
Aufe. 21

it

was

announced

company

plans to

issue

and

self 34,000 additional shares of common stock through
underwriters. Proceeds—Estimated at about $260,000 for
wolking capital.

fToronto

(Ont.), Canada

Ju4y 25 the Board of Control authorized

the sale in the
United States of $15,000,000 debentures to
provide funds
for construction of Toronto's
subway. The proposal proviCfcfls for borrowing at an
average interest rate of 2.84%.
The new debentures were
placed privately last week
wifh institutional investors

through

headed

by Dominion
Ripley & Co., Inc.

Securities

be used

to

refund

000,000 3%% bonds and for construction costs.

$30,-

banking

a

Corp.

and

group

Harriman

United Gas Pipe Line Co.
July 25 filed with FPC for authority to build 1,130 miles
of new lines in
Texas, Louisiana and Mississippi at a
cost of about
$110,000,000, including new facilities. It is
probable that the bulk of this new capital will be raised
through the public sale of new securities.

Utah Natural Gas Co.
June

it

o

r

announced company plans to

was

build

a

325-

n>i^ 22-inch pipe line in Utah to cost approximately
$25,000,000.
Hearings will be held before the Utah
P. S. Commission in

ofJthe

project.

-

August

or

September, after

a

a

study

'

-

Valley Gas Pipe Line Co., Inc., Houston, Tex*

June 27 company sought FPC authorization

;«

to construct

$144,500,000 pipeline project to carry natural

gas

from

the»*Gulf Coast

and off-shore fields in Louisiana and
Texas to markets in Indiana, Ohio and
Michigan. Com¬
pany is now in process of completing negotiations for
its major financing requirements.

•-Vanadium Corp. of America
21 company announced plans

Aug.

to offer publicly
$5,000,000 of convertible debentures. Underwriting nego¬
tiations are being carried on with
Kidder, Peabody & Co.
1

electric

it

Chemical
was

Works

announced

company will build a new
phosphate plant at Silver Bow, Mont.,
$5,000,000. Financing may be placed privately.

furnace

& Co., New York.

Warner-Hudnut, Inc.
20

change
&

Co.,

in

company's

name

from

William

R.

Inc.

was approved, but no
action was
proposed recapitalization plan, due to market
conditions. It is planned to file a registration with the
SEf/covering the sale of approximately 325,000 shares
of the proposed new common stock
(par $1) to the pub¬

tak}en

on

lic through a nation-wide
group of underwriters headed
by F. Eberstadt & Co., Inc.

.Western

Pacific

RR.

July 17 it was reported company plans issuance and sale
of $22,000,000
mortgage bonds. Probable bidders: Hal& Co. Inc.; Blyth

& Co., Inc.; Lehman

Bro¬

thers and Bear, Stearns & Co.

CoM

(jointly); Union Securities
Glore, Forgan & Co. (jointly). Proceeds—To
first mortgage 4% bonds and convertible income

and

retire

4%$ bonds due
flHj" '

Southern

year

new

announced company plans to raise
new'money through sale of additional
proceeds to finance in part 1950 con¬

Tide Water Power Co.

sey? Stuart

June

500,000 shares of common stock are
being split-up
S^-for-l basis, all or part of which will be

.V

struction expenditures.

Wither

Co.

17,

expects

public distribution of

a

the

July

Gas

these shares at earliest
practical
date, which may be sometime in October. A. C.
Allyn
& Co., Inc. and
Bear, Stearns & Co. headed this group.

The

in

Aug.

stock

bonds:

Securities

South Carolina

ceeds

American Power & Light Co. on
*Feb. 6, last, had informed him of
their intention to make
a

•

and

bidders
Webster

;

was

00,000

jrities,

Tr|Klitional underwriter: F. Eberstadt

Corp.

completed.
Pacific

Ap|il 25 it
sec

debentures

&

a

pay for construction costs.

t° .cost

Probable

June 30 company sought FPC
Authority to build a 2,175
mile pipeline system—from southern Texas to
Washing¬
ton—at a cost of
$174,186,602. Negotiations for major
financing requirements are now in process of

Public Service Co.

June 2 company announced it plans to finance and
per¬
manently refund $2,200,000 of bank loans by the sale of

Stone

than

Tampa Electric Co.

*

was

less

-V

by Herbert L. Nichols, Chairthat the company expects to raise between $17,50li000 and -$18,000,000
through the sale of securities
du i"ng the fiscal year
beginning Sept. 1, 1950. This may
in c tide
bonds to be placed privately and the balance
to i>e offered publicly as
preferred and common stock
wifh Dillon, Read & Co. Inc.
underwriting. The proceeds

Schering Corp.
May 4, it

not

i,

additional shares

reported to be negotiating with a
underwriters for a public stock offering of

of

group
about

Mills,

company

Co.:

The corporation

Traditional underwriters: Lehman Brothers

Roosevelt

21

m an,

near

Reynolds & Co.

July 20

Power

it was announced

''"Victor

reported that the company will be in the
probably this fall with an offering of $17,500,000
preferred stock. Probable bidders: Lehman Broth¬

and

1

-

equipment

stock from 1,500,000 to 2,500,000 shares.
has no intention of issuing any of the

was

Proceeds would

A

bidders:

Reynolds Metals Co.
Aug. 9 stockholders increased

at this time.

may

trust certificates,
Halsey, Stuart & Co., Inc.;
Hutzler; Harris, Hall & Co. (Inc.).

Probable

Salomon Bros. &

that

June

authorized

Traditional underwriters:
reported

was

Utah

SEC

es.

31

On

on.

shares) in Southern Utah Power Co. for
$550,000 base price, plus adjustments

Reading Co.
July

market

ers

8

are|to

April 17 stockholders approved the issuance of $90,000,000 new bonds for the purpose of refunding $50,000000 31//8% bonds due 1965; $10,000,000 3V4% bonds due

bonds, although company may
pieces, viz: $10,0JO.000 to $12,-

trustee of Washington Gas
&
Electric Co. to undertake negotiations with "all
interested
parties" for the sale of its common stock interest (62.910

Public Service Electric & Gas Co.

for

North American Car Corp.

new

Southern
Jtine

outhwestern

reported that this company, an affiliate
Co.
(New Jersey), is contemplating
financing of about $50,000,000, part of which is expected
to be placed privately and the balance sold to the
public.
of

mortgage

to take this in two

$32,520,000/ for 1950-1951.
Probable
bidders:
Halsey,
Sfuart & Co. Inc.; Blyth & Co., Inc. and Kidder, Peabody
&jwCo. (jointly); First Boston Corp.

Plantation Pipe Line Co.

July

first

perma-

a

000 to $24,-

temporary bank borrowings of up to $20,OOQ^OOO to mature July 1, 1951, the proceeds to be used
for^vconstruction program which is estimated to cost

Co.

stock

Co.

proposed financing on

OOQjGOO initially and the balance later

said that there will be additional financing

be
competitive, and preferred
negotiated or competitive.

Thursday, August 24, 1950

.

SEC approved

certificates, series Z, to mature annually April 1,
April 1, 1965. Probable bidders:
Halsey^Stuart
Inc.; Harriman Ripley & Co., Inc. and Lehman
Brothers (jointly); Salomon Bros. & Hutzler.

Philadelphia

Gas

it was reported

00B000

(9/12)

to

May 5 it

Natural

. .

n^P basis has been increased from $10,000

Co.

in

or

July ol

July 12 company reporteu planning issuance ana sale
early in September of $10,005,000 additional equipment

bonds—Halsey,

Stuart & Co., Inc
preferred: Harriman Ripley & Co
Inc.; Lehman Brothers; Kidder, Peabody & Co.; Firsi
Boston Corp.; Merrill Lynch, Pierce, Fenner & Beane
(3) for preferred:—W. C. Langley & Co.

for

Inc.,

southern

of

dellde

1968;

April 24 it was estimated that
financing will be required to

(2)

Traditional

capital.

working
& Co.

company

purpose

any

will repay a

are

stock for the

common

later this year, with probably some common stock to be
underwritten by Drexel & Co.
Bond financing woulo

Beane.

bonds

two-for-one split-up. the

Pennsylvania RR.

&

May 17 the stockholders voted to increase the author
ized preferred stock (par $50) from 75,000 to 150,00C
There are presently outstanding 72,993 share*
Probable underwriter: Merrill Lynch, Pierce, Fenner &

taking

a

writer:

shares.

•

by

raising

1951

Power Co.

Mountain States

followed

issue additional

trust

Expected this Fall.

Boston Corp.

be

may

Commercic^gnd Financial Chronicle

'

2014, and over $5,000,000 "new money."
about middle of November.

Wilcox-Gay Corp.
July 14 it was announced that in
posed

acquisition

of

Garod

Radio

connection with

Corp.

and

pro¬

Majestic

Ra<Jio & Television, Inc., Wilcox-Gay-Majestic Corp., the
ne^- company plans public offering of 500,000 shares of
ne# stock.

Traditional Underwriter—Gearhart, Kinnard

&iJtis. Proceeds—For working capital.

Number 4936

Volume 172

The Commercial

*,

.•

Rector

Two

(

l'OWER

CAPITAL

Stock

October

2,

Light
Company
1950, for payment

&

23,

to stockholders of
record
business September 5, 1950.

J.-iCK, Secretary

W.

D.

,

Power

August

on

Dohjjpare,

Wilmington,

treasurer

ana

and

J. I. Case Company

$1.75

of business

of

dividend

$25

75c

share upon

per

Stock

of.

September

d

reeo

12,

c'ose

the

at

a

share

on

PETERS,

at the close

valuo Common

par

interim

dividend

holders of record aUhe close of

declared

the com'
mon
stock of the Company, payable
September 30, 1950, to stockholders of
record at the close of business September

10,1950; also $1.50

$5.00

third

the

share

per

was

H. B. Pierce, Secretary

business

August 28, 195Q„

on

The Board of Directors of

COPELAND, Secreia: /

Secretary.

PITTSBURGH

8, 1950,

SOUTHERN

to holders of record

ner

NO.

DIVIDEND

C. W. Turner in Boise

131

QUARTERLY DIVIDEND of One Dollar and
Twenty-five Cents
($1.25)
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,
1950,
to stockholders
of record at three o'clock P. M., On Monday
August 28, 1950. The stock transfer books will
not be closed for the payment of this dividend.
York,

August

Y.,

N.

SIMPSON,

A.

17,

shortly open offices here to en¬
in the securities business.

gage

1950.

INTERNATIONAL

Corporation

HARVESTER

DIVIDEND

At

meeting

a

of The

held

August,

in

cue-half

its

the

1950

to

1950.

September 8,
c.

d.

-

:

r.

Secretary.

McGREW,

Company hav» declared quarterly
No. 141
fifty cents (50<i)
per share on the common stock payable
October 16, 1950, to stockholders of

-•

record

E.

the

at

of

close

GERARD

August

business

declared

KENNECOTT COPPER

J. EGER, Secretary

CORPORATION

of

Board

The

on

a

per

share

of

the

Directors

ELEVATOR

COMPANY

the Common Stock

on

payable

Company,

October 2,1950 to

Broadway, New York 5, N.Y.

OTIS

today

dividend of 32 cents

stockholders

NOTICE OF REDEMPTION

of busi¬

of

August 18, 1950

August 31, 1950.

ness

COMMERCIAL SOLVENTS

International Salt

Corporation

company

clared
stock
on

the

on

of

of

and

twenty-five

this

outstanding

of

business

on

record

the

at

Copper

DOLLAR

of ONE

dividenr1

A

Dollar

share has

a

Corporation,

payable

a

declared

share has been

on

September 11, 1950.

close of business

its

adopted

7,1950. The stock transfer

Secretary.

of

August 22, 1 950.

the

will

Company

closed.

A. S.

CHEROUNY, Secretary

not

as

SHREVEPDRT,

No.

15

a divi¬
shillings per share on the Ordi¬
Shares of the Company payable August
28, 1950 to the holders of Ordinary Shares of
nary

at the
close of business August 21,
subject to the withholding of the Union

record
iilliiltijiuuiilil

1950

of South Africa non-resident shareholders
in

the

t

of

amount

seven

and

one-half

COMPANY
DUBUQUE, IOWA

A dividend of twenty cents

(20c)

on

the Com¬

Stock of this

Corpora¬

per

tion

share

declared

was

Sept.

15,

1950

payable

to

holders of record

Stock

stock¬

able

Aug. 31,

($50 Par Value), pay¬
October^l, 1950, to stock¬

holders of record

1950. Checks will be mailed.

of business

at

on

Corporation, payable October 2,

tribution

after

Africa

amount

deduction

of

non-resident
38.625

to

close

of

business

,95°-

per¬

on

Secretary

August 23, 1950

the

Union

shareholders

cents

share,

per

official

the

of

H. E. DODGE, Secretary.
New

41 year of

York, N. Y., August 21, 1950.

consecutive

September 20,1950.

dividend

mon

20,

PHILLIES

on

share

at

the "close of business

fer books will

Americas N-f ciqar

^1

Stock, payable September
1950, to stockholders of

record

:

not

be closed.

Oscar soiberg,

August 16, 1950

Treasurer

SOUTHERN CALIFORNIA

<f

PLASTICS

EDISON COMPANY

CELANESE

preferred dividends

CORPORATION OF AMERICA

ORIGINAL

PREFERRED STOCK

180 Madison

DIVIDEND

NO. 165

Avenue, New York 16, N.Y.

CUMULATIVE

THE
Boardthe
of Directors
this day
declared
following has
dividends:
FIRST

SERIES

$4.75

holders of record

The

7*

of

Cities

Service

Coriipany

on

August 11, 1950, declared a regular quarterly dividend of
dollar ($1.00) per share on its

$10

par

valuejCommon

stock, payable September 11, 1950, to stockholders; of rec¬
ord

of the close

as

To

assure

should

old

1950]

dividend,

notify the Company, at its office, 60

New York

the

of business August 25,

prompt receipt of the

5, N. Y., of

and

new

any

stockholders
Wajff'Street,

the

record




tor

quarter

at

September 5

close

the

of

STOCK

close of business

SOViES^resident

holders of record

ber 5,

to

on

stock¬

Septem¬

1950.

R. 0

August 22, 1950.

October

after

and

1,

the sole right to receive
therefor at the said re¬
demption price without interest.
Certificate(s) for the Preferred
Stock of Otis Elevator Company
should be forwarded by registered
mail to Bankers Trust Company,
16 Wall Street, Borough of Man¬
hattan, New York City, New
York, the Redemption Agent, ac¬
companied by a letter of trans¬
mittal in the form being mailed

27 cents per

all holders of record.
No

assignment of the stock
certificate(s) is required where
payment is requested to be made
to
the order of the registered
owner.
If however payment is to
be made to an assignee of the

registered owner, then the stock
certificate(s) must be endorsed
with signature(s) guaranteed or
accompanied by properly executed
instruments

of

gether with

any

mail

on

for

the

the

redemption date checks
redemption price of all

Checks

sented

by

for

shares

Certificates

repre¬

received

later will be mailed when the

Series, payable September 30,

tificates

on

stockholders of record

September 5, 1950.

to¬

shares, ^certificates for which are.
received by it on or before said
date.

share on Cumu¬
Stock, 4.32%

assignment

supporting docu¬
ments
where required including
payment of relative transfer taxes.
Arrangements have been made
for Bankers Trust Company to

lative Preferred

are

cer¬

received.

By order of the Board of Di¬
rectors.

OTIS ELEVATOR COMPANY

September 5, 1950
I

GILBERT

Secretary
ALTON

September 30, 1950,

T. J. GAMBLE, Secretary

change of address, giving both

W.

Preferred

1950, to
60 cents pet snare, paya . e September
25
1950 to holders of record at the

of the

share on Origr
Stock, payable

50 cents per

business

1950

COMMON

authorized the payment

inal

of $1.75 per share,
payable October 1, 1950 to holders
of

SERIES

NO. 14

following quarterly dividends:

the close of busi¬

regular quarterly dividend
current

addresses.

,

at

September 5 195Q

7% SECOND PREFERRED STOCK

Dividend Notice
Directors

DIVIDEND

The Board of Directors has

regu'ar quarterly dividend for
the current quarter of S1.18J4 per
share, payable October 1, 1950 to
ness

PREFERRED

STOCK 4.32%

PREFERRED STOCK

The

CITIES SERVICE

share for the quarter ending
September 30, 1950, will be
mailed on the 20th day of Sep¬
tember, 1950, to stockholders of
record Septcmbei 7, 1950.
per

to

the Com¬

September 11, 1950. The trans¬

one

payments

DIVIDEND

has been declared

re¬

demption date. Checks covering
the dividend of One dollar ($1.)

payment

the close

A dividend of 15 cents per

upon

paid by

except

St

§=

TREASURES

Philadelphia, Pa,
Aug. 18, 1950

accruing

or

holders of the redeemed
shares will have no right or in¬
terest therein, or in the company,

tax

of

a

share. All divi¬

check prior to the

separate

From

sub¬

any

rate

par

1950, at

1950,

>CH£MICALS\k

COMMON

of

11,

September

The transfer books will not be

Board

September

on

J. H. Miracle,

tax

change which may occur
exchange for South
Africa funds prior to August 28, 1950.
By order of the Board of Directors,
in

closed.

The

on

$62.50

1,

per

accrued

September 1,

ject, however, to

quarterly dividend of 58.75
cents
per sh%e has been de¬
clared on the 4.70% Preferred

the Common Stock

per

1950, to stockholders of record at the

1950 of American
Shares issued under the terms of the Deposit
Agreement dated June 24, 1946. The net dis¬

will

A

share

(250
of the

dends

of

October

said stock will have been

8, 1950 to the holders of record at the close of
business

South

PREFERRED DIVIDEND

Directors has this date

dividend of twenty-five cents

he dt.ectors authorized the distribution of

the net amount of said dividend

POWER

a

on

redeem all of its

to

Stock

price of $107.

(7 */£%).

cent

INTERSTATE

IP0UIER)

Board of

declared

dend of three

Sec'y.

Dividend Notice
The

Dividend

amended,

Preferred

Limited

be

J. OSBORN

Exec. Vice Pres. &

LOUISIANA

value

O'okiep Copper Company

Tlie floard of Directors today declared

HERVEY

GAS

UNITED

CORPORATION

books

"

meeting held Au-

ct

at

23, 1950, has exercised the
option granted it by Article Fourth
of its Certificate of Incorporation,
gust

the

September

on

of New

on

payable September 27, 1950, to
stockholders of record
at the

A. R. BERGEN,

mon

Elevator

^J

September 1, 1950.

capital stock of this Company,

of

hereby given that Otis
Company, a corporation
Jersey, by a resolution of
Board
of
Directors
duly

Notice is

Secretary

August 18, 1950

on

Stock

$62.50 Par Value

of

BULLWINKLE

declared by Kennecott

of record at the close of business

CENTS

AND TWENTY-FIVE

stock¬

close

One

Fifty Cents ($1.50)

today been

common

1950, to

September 29,

holders

of

Preferred

September 23, 1950 to stockholders

cents

payable

Corporation,

distribufion

RICHARD

No. 63

share has today been de¬

per

cash

A

DIVIDEND NO. 145
dividend

NOTICE

NOTICE

of record at the close

A

the

to

ROBERTS,

1950.

18,

REDEMPTION

COMPANY

Beachley,

DIVIDEND

120

(25c)

I.

August 21,1950.

September 15, 1950?

DIVIDEND

payment

Bank.

said

at

UTILITIES

dividend

'

v

for

claims

Secretary-Treasurer
ter

per

stock,

on

creditors of the
therefore
hereby notified

Liquidating Agent.
Dated

1950, to shareholders of rec¬
close of business on September 1,

Charles

The Directors of International Harves¬

share was declared on
payable September 28,
stockholders of record at close of
cents

common

business

1950, the regular divi¬
of thirty-seven and

23,

located

All

F.

1950. Checks will be mailed.

amount

Bank,

the State of Connecticut,

in

affairs.

are

present

undersigned

meeting held today, declared a quarterly
of 50 cents per share on the Com¬
Stock of
the
Company, payable on

ord at the

Colorado Fuel and Iron Corporation,

on

dend

its

Association

COMPANY

September 12,

COMPANY

Board of Directors

the

of

a

closing

National

dividend
mon

STOCK

COMMON

ON

at

Thomaston

at Thomaston,

is

Treasurer.

NOTICE

LIQUIDATION
The

to

The Colorado Fuel & Iron

formerly

were

BOISE, Ida.—C. W. Turner will

COMPANY

PACIFIC

A

New

CONSOLIDATION

Both

Merrill Lynch, Pierce, Fen& Beane for many years.

with

pay¬

ROGER HACKNEY. Treasurer

J.

COAL

J.
are

August 28, 1950.

on

15. 1950.

for

business

of

1950.
B.

25

the Preferred Stock

October

the

on

as

C. du P.

WM.

a

Stock—$4.50 Series

on

able September

Building.

dividend

a

Edward

—

with McDonnell & Co., Buhl

DIVIDEND

Common Stock

Financial Chronicle)

Mich.

Diedrich and Arthur I. Rossier
now

The Board of Directors declared

297

a

1950, payable Sepfemtfer 14,1950, to stock¬

the outstanding
Company
1950, to

per value Common Stock of this
been declared
payable October 1,

holders

shore

a

per

Standing Preferred Stock of this Company has
b en declared payable October
1, 1950, and a

has

87%^

$1.12 Vl

No.

meeting of the Board of Directors,
held this day, a quarterly dividend of

-$3.50 Series, both payable October 25,

August 22, 1950
share upon the out-

Wis.,

of

the Preferred

1950, to stockholders of record

(Incorporated)

Racine,
dividend

At

The Boord of Directors has declared this day

on

COMMON DIVIDEND

to The

DETROIT,

Corporation

of 6W per share on the

August 21,1950

regular quarterly dividends of

A

1
.Tfr!
ki

August 16. 1950

J

at

share

j

Two With McDonnell Co.

Johns-Manville

«.

Packing Company

Capital

the

on

1950,

of

close

share

per

The Garlock

LI.DO POUT DE NEMOURS & COMPANY

DIVIDEND

STOCK

24c

American

of

declared

was

the

of

dividend

A

DIVIDEND NOTICES

(Special

N. Y.

York 6,

Street, New

DIVIDEND NOTICES

COMPANY

LIGHT

&

35

(743)

OIVIDENBlNOTICES

DIVIDEND NOTICES
AMERICAN

and-Financial Chronicle

August 18, 1950

By Thomas M. Logan
Secretary
August 25, 1950

36

The Commercial and Financial Chronicle

(744)

..

Thursday, August 24, 1950

.

Louisiana

Washington...
A

Behind-the-Scene Interpretations
from the Nation's

Capital

trol under the guise of an interim

a

The

JL U H

Senator several

more

clear is

that

is

now

not

the

time

to set the

war

the

rates,

an

issue

or

door

on

always "on tap" bond
any
other conjectured

phase of long-range war financing.
What the Treasury would appear
to

indicate

is

later.

come

time

will

That later time

will

that

the

deficit

when

be

financing
in
heavy volume as a result of the
expanding war effort actually ma¬
terializes.

Congress

dear

GI

utterly leveled.

gesturing
where
but

will

the

Under

out

actual

into

time
lag the Defense Department will
have to go through many stages
of procurement planning before it
lets contracts. Then industry will
have to retool.
tion

will

likely

Then

be

to

well

produc¬

war

get under way.

into

That is
the new

year.

When

production gets go¬
ing in volume then it will have to
war

be financed in volume.

time

When that

the time to cast the
maturities, types of issues,
and interest rates, is reached.
It

die

fronts
*

light of the
prevailing at that

time.

These circumstances may or

for higher interest
rates; if higher interest rates, they
may be at a different level than
call

not

may

other officials

projecting this
far ahead, perhaps as long as six
This viewpoint is believed made
clear by the combination of the

Treasury's

for September
refinancing — the
usual pre-Korean war pattern—
and the statement Monday by the
Treasury
Secretary
which
fol¬
lowed the unprecedented action
and

of

plans

October

the

Federal

Reserve

Board

raising the discount rate from

in

of
the
Reserve
Board's widely-known advice for
quent

gesture

rise

a

*

*

of which

story.

is to credit the Federal Re¬
with

Board

serve

sincerity

deep
entire

Likewise

there

arsenal

is

Fair

thesis that

even

will

duction

be

though
slow

war

of

the

in

starting,

country now is teetering on
inflation, which just a little bit

of

a

war

ing.

effort could send spiral-

And

the

Board's

recom¬

mendations stepped on just about

everybody's toes indiscriminately
in

the

Administration

in

and

Congress.

the

As

of

a

Commandments
be

memo

is

desirable

to

which

it

would

adhere

to

if

Government Man
Animal

or

the

the Political

is

Congress

the

not
on

the

case,

brink

however.
of

a

war

of unknown

duration and magni¬

tude, passed

a

gram

which

social security
raises by 77%

immediately-payable
and

hastens

the

day

pro¬

the

pensions

when




pen¬

this

to

nil.

own

views.)

Financial

Chronicle)

65

East

with

H. Rand

Grimm

Robinson

&

Avenue.

Courts & Co. Add

cost

'A

with

the

the

to

activity
loans

to

itself

de¬

world.

is

link

your

It's

necessity

a

Business, For
Better Living.'

For
The spectator's activity is invited
to a battery of dial telephones on
counter.

is

Beside

When

the

spectator picks

up the receiver it starts an elec¬
trically operated phonograph that

delivers this message:
"

'Hello, there!
This
is your
rural
telephone
operator
with
some interesting news about how
get good telephone serv¬

you can

ice for your farm.
'The Rural Electrification Ad¬
"

ministration

can

make loans

now

expansion

and improvement
telephone service. These

rural

of

loans

available

to

existing

companies

or

coopera¬

are

telephone

tives to expand their facilities, or
if necessary, REA will finance a

"

to

cooperative.
If
phone service, or if you
improve
your
present

to

to

neighbors,

your

committee.

a

'For further

information, help

leaflet to the left of

a

Thanks.' "

This little direct sales campaign
"come and get it" the Depart¬

ment

observed, "relies in part on
the psychologically
tested prin¬
ciple that an exhibit is likely to
become

more

effective

if

the

one

addressed takes some active part."
The

long-delayed report of the

House

Expenditures

tee

the

on

spite

of
its

thing of
For

subcommit¬

as

at

book

a

other

in

loss

1949."

At

an¬

point: "In the 2-year period

instance,

the

report

with

to

that

borrowers

deficits

the

with

accrual

an

on

of the

almost

subcommittee
REA

accounting

50%,

book

and

loss per

doubled."

said

report

recognized

The

that

sciiuU8Uoi,s

tne

the situation and has "intensi¬

its

fied

efforts

improve

to

man¬

subcommittee

found

one

the

perpetuated
directors
had

board

same

constantly,

had

of

never

Administration"

the

final

did

mention

not

project

rate

rise

even

without

"members"

to

the

course,

answerable to
in

no

project

are

by

it

and,

projects.

the

among

REA

projects

into

cut

*

rean

In

as if the
never broken

countries, just
war

had

Ko¬
out.

however, informed
privately sanguine
achieving any great round of
tariff
cutting accomplishments,
are

not

with

the

of

-

since
terest

is

in

war

the

promoting

coal, and

to

Stephens

the

U. S.

staff

On

Video

Corp.

Corp. of America

Norwalk Tire & Rubber

Cinema Television B

the

Scophony-Baird Ltd.

broad list

a

and

m.s.wien&co.
ESTABLISHED
40

*

Exchange PI., N. Y. 5

1919

HA. 2-8780

Teletype N. Y. 1-1397

Preliminary secret negotiations
have

begun
Great

and

between

Britain

problems incident

oil

to

the

It is believed that

war.

the

foundation
world
under

similar to

those

World

War

of

case

When

an

for

broad

Korean

later

or¬

and

al¬

schemes

operating during

II, for

planning

war.

stage

is

reached in the negotiations, repre¬
sentatives of other oil supplying
and

consuming nations friendly to
stand, will be called
in to participate.

the

US-UN

%

*

"stopgap" or interim scheme for
handling the matter of off-shore

in¬

leases

the

ex¬

Court

following
decision

in

WE SUGGEST

RIVERSIDE CEMENT GO.
CLASS B (mmmoo) STOCK

the
the

A
in

leading producer of cement
fast-growing Southern

California.

Analysis of this Company and
a

review of the Cement Indus¬

try available

on

request.

Selling about $8.25

*

Senator Joseph C. O'Mahoney's

main

For

Large Appreciation Fotential

application in

expansion of the

this

S.

supply

these will

supply

locations

U.

the

on

Supreme
Texas

a

a

energized

(cooperatives
or

delinquent

as

actually

HAnover 2-0050

is

FOREIGN SECURITIES

LERNER & CO.
Investment Securities

10 Post Office Square, Boston i
Tsl.

Mass.

HUbbard 2-1990

and

Foundation

Company

Jack Cr Heintz

for

Placer

Development

Susquehanna Mills

All Issues

Tracerlab, Inc.

r.ABL marks 4 r.o. »q

bor¬
FOREIGN SECURITIES

removed

SPECIALISTS

delinquent.

borrowers
in

Teletype—NY 1-971
Firm Trading Markets

REA

time

opera¬

almost 25% operated

Hill, Thompson & Co., Inc.
Trading Department

50 Broad Street

of

Finishing

Television Equipment
Trad Television

Com¬

metals

*

*

reality,

circles

if

per¬

law.

ganizing

those

business.

miscellaneous

lay

Officially the State Department
is going ahead with the 39-nation
conference Sept. 28 at Torquay,
England, to consider tariff conces¬
sions upon thousands of additional
U. S commodities, in alleged ex¬
change for concessions to facili¬
tate the export of U. S. goods into

it looks like

this

of

highest
in the

up

law

the

minerals, when, as, and if these
controlled, if possible under
the

U. S.
<<

a

the

state commission

added

Com¬

set

other hand, Interior will naturally

are

are

been

merce will hold jurisdiction
over
steel, copper, tin, and most of the
metals, despite the eagerness of
Agriculture and Interior to get

a

The rates of this

rate-fixing.

charged

asking

ratify

REA

this

that

announced

has

mits it.

of

port

the

will

version of

handle oil,

same

approves

which

Department

merce

cooperative. The subcommittee

re¬

Chronicle)

111.—John

Bill, the Interior De¬ Ames, Emerich & Co., Inc., 105
partment hopes to set up a big South La Salle Street, members of
controls
bureaucracy paralleling the Midwest
Stock Exchange.
the projected "Defense Production

quorum for an annual meet¬
ing, and never bothered to tell its
membership anything about the
a

to The,Financial

CHICAGO,

President

Tentatively

cooperative in Maryland that had

(Special

the Controls

agement."
The

the

When

Stock

war.

si:

*

operating

almost

increased

average

borrower

of

yearly

for

York

Ames, Emerich Adds

commodities

those

necessary

either

when
of

borrower

991

tion) 247,

of

are

ended Dec. 31, 1949, the number of

delinquent

or

Thus,

from the statistics

of

to

respect

extension

an

repayment
rower,

which

the New

'

said

that, not that REA statistics lied,
but that they are "not fully in¬

grants

change

of

Exchange.

agency and

an

packed some¬
wallop if read carefully.

formative

explain

in
sympathy

announced

REA

program,
a

Co., 11 Marietta Street, N. W.,

operations of REA,

an

both with

"Out

"While we're going up in the elevator, you can
the Stock Exchange to me!"

telephone

service,, talk
form

&

members

each

telephone
inviting sign, 'A Message for

an

has become affiliated with Courts

CF-

basis

farm—For

YOU.'

ATLANTA, Ga.—Elise A. Davis

P0D

The ex¬

new

of the exhibit

telephone

Emergency,

a

(Special to The Financial Chronicle)

03G«R

the State

making

"The main panel
says,

cooperatives."
This

the

deficit cooperatives

perfect.

were

Co.,

a

Department

taken

seriously buf as a sort
Monetary Ten or Twenty

to The

affiliated

now

which

and

scribes its exhibit:

with

However, the Board's
not

is

seri¬

takes

cooperatives for establishing rural
telephone service.

this phone.

the

next

With Grimm & Co.

Electrifi¬

year on

in

REA

of

pro¬

passage

as

ORLANDO, Fla.—Lenox

programs

is

with

deals

yourself to

private
disposition to dispute the Board's

"Chronicle's"

(Special

circuit, its exhibit, "A Tele¬

hibit

an

little

con¬

phone for Your Farm."

inflation—now.

fight

to

boiled

Rural

on

ing around this

customary

advocating

balanced

and

weapons

its

in

the

part, tells the
Department is send¬

The

want

town

other

materials

REA

*

in this

of

regarded

banks

on

in wartime, is being dem¬
officially.
The Department of Agriculture,

now.

disposition

general

chances

and may or
may not coincide with

while

Administration

you want

The

are

more

the

money

new

interest rates,

in

year

Ad¬

etc.,

onstrated

a

operated at, for years, to a % of
1% penalty. This was a most elo¬

people in public hearings

its

*

the

scarce

for

nominal penalty rate which it has

oil

ously the supposed "order" of the

are

months ahead.

O'Mahoney bill was given
drubbing by state officials

a

that

President that peacetime agencies

occurs,

circumstances

little

cation

heat

customers

inflationary
tentedly on.
How

year

legislation

(This column is intended to re¬
flect the "behind the scene" inter¬

housing,
hurt

the

put

their

and

on

will be decided in the

and

bank credit—now

curb

to

power

—would

During that

payments.

Congress,

permanent

pretation from the nation's Capital

use

translated

hurt

circumstances

the

shall cut back

become

economies

would

However, there is

longtime lag
swollen appropriations

such

ministration.

Congress will appropriate in the
neighborhood
of
$57
billion.
Even with the interim tax bill,
maximum
receipts are not ex¬
pected
to
exceed
$42
billion.
a

The

pro¬

for

public

which

be

draft

status

next

lated" by the Supreme Court.

The President is

loudly

they

not

etc.,

will

mortgage

the

preserve

Congress

providing for Federal handling of
the enlarged jurisdiction
"legis¬

GALLERy

Adminis¬

and

tration have made it clear that the

*

before the

si*.

reconstruction.

tected until the fort of inflation is

later.

come-

the

or

will

has neither
the possi¬
bility of higher official short-term

«*£

the

nance

could

VISITORS

fi¬

to

money

Both

Hence the Treasury

:

with

compete

pattern of interest rates
and
maturities to guide
the fi¬
nancing of this war. That time

slammed

<a

will

less

or

until

quo

sions for nearly all elderly people

weeks ago

had promised to get out legislation
on
an
interim basis that would

N.Y STOCK EXCHANGE

WASHINGTON,
D.
C.—What
John Snyder in effect has made

considered

was

arrangement.

gA

l\A/

xJL f

cases,

by State officials, the oil industry,
and
oil
state
Congressmen
as
nothing but a bare-faced effort to
"sew up" dominant Federal con¬

BUSINESS BUZZ

New York 4, N. Y.

70 WALL STREET, N. Y. 5
Tel. WHitehall 4-4540