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AUG
A*1*
BOS.
LIBRARY
2 6 ;S49
ESTABLISHED 1S39
Reg", t?. S. Pat. Office
Volume
170
Number 4832
New York, N.
Arms Aid Abroad
The Outlook for Railroads
his
military aid program is essential
to
implementation of Atlantic
Pact
as
task
our
of
achieving
hopeless without
world peace is
Prominent
!
tary aid to Greece and Turkey.
short
a
prepared address
Fla., on Aug.
before the Convention of the
delivered at Miami,
22,
Veterans
defended
and
in last two decades.
progress
and
traffic.
Calls
tation.
On
several
Central
the
for
in
I
alert
I
have
these
in
America—solvent
by
to
of
n
i
z e
fit
expression
"We
must
strong
to
I
railroads
in
manned
by
railroads,
|
only be weighed against the barest outline
can
terprise, oper¬
ating under
sound
poli¬
of
cies
gov¬
ernment, and
commanding
the confidence
A.
Wayne
Johnston
of the Ameri-
'
"
people."
can
(Continued
26)
on page
*A lecture by Mr. Johnston at
the School of Banking of the Uni¬
versity
of
Wisconsin,
Wis., Aug. 25, 1949.
race
i t i
uricn
of Communist society may be described
as follows: it is a society in which (a) there will be no
pri¬
vate but only social, collective ownership of the means of
no
classes
or
■
state, but workers
in
industry and agriculture, managing their economic affairs
as a free association
of toilers; (c) national economy, organ¬
ized according to plan, will be based on the highest technique
in both industry and agriculture; (d) there will be no con¬
tradiction between town and country, between industry and
agriculture; (e) the produce [of labor] will be distributed
according to the principle of the old French Communists:
'from each according to his abilities, to each according to his
needs'; (f) science and art will enjoy conditions conducive to
their highest development; (g) the individual, free from wor¬
ries about daily bread and from the necessity of cringing to
the 'powerful of the earth/ will become really free, etc., etc'1
the
Funds,
nwic.e
o
unions in pursuit: of
an
even
greater
.
-what
for
there
be
\
if
fairners
Members New York Slock
to prevail in this case.
*
Thus the leaders of the United
Steelworkers
(Continued
.
on page
22)
.v.;
upon request
hees b^cre the Presidential Steel
Fact
Finding Board in the
,
,
Prospectus
-
64 Wall
August 25, 1949.
New York City, Aug. 22, 1949.
State and
:•
Municipal
Bonds
Government
on request
Office:
26,
Street, New York 5
Dept. Teletype: NY 1-708
Underwriters
Distributors of
•
in India, Burma, Ceylon, Kenya
Colony, Kerlcho, Kenya, and Aden
Branches
and
Zanzibar
and
Paid-Up
Reserve
The
Bank
;
Capital
conducts
every
description
Dean Witter
V
Established
also undertaken
1899
San
New York
Cincinnati
Chicago
Columbus
San
Denver
Toledo
Buffalo
York
Francisco
Public Service Co.
Stock
STREET,
7-4300
Exchange
Exchange
Dominion Securities
Exchange
Grporatiom
Exchange
NEW
YORK
Teletype NY
Francisco
Los
Seattle
1-579
Angeles
.
Wires
request
IRA
Members New Yorh Stock Exchange
and
40
Exchange Place, New York 5.N.Y.
other
111
Teletype NY 1 -702-3
WHitehadS *-»!«!
Boston
Principal Exchanges
Broadway, N. Y. #
WOrth 4-6000
Honolulu
Direct
upon
Co.,
a
Stock
Angeles Stock
WALL
BArclay
CLEVELAND
New
Honolulu' Stock
Los
14
(Incorporated)
of
banking and exchange business
Trusteeships and Executorships
New Orleans
bonds & stocks
SECURITIES
OTIS & CO.
£2,500,000
NEW YORK
\
Analysis
Corporate Securities
£4,000,000
£2,000,000
Fund
CITY OF
San Fnweieeo Lue Angeles
and
.J
THE
Agency: 20 Exchange PL
Portland, Ore.
Municipal
Members
Subscribed Capital
NATIONAL BANK
OF
Netc York
CANADIAN
COAST
Bishopsgate,
THE CHASE
Head Office: Toronto
Bond
in
London, E. C.
'
Bond Department
OF NEW YORK
,
DISTRIBUTORS, Inc.
PACIFIC
Kenya Colony and Uganda
Head
\ ■
OF COMMERCE
of INDIA. LIMITED
the
;
CANADIAN BANK
NATIONAL BANK
to
,
THE NATIONAL CITY BANK
Seattle
Bankers
wage
controversy in the steel industry,
THE
f
INCOME (BALANCED) FUND
FRANKLIN
v
22)
Monthly Commercial Letter
UTILITIES FUND
Exchange
Amsterdam
confronted with
on page
*Part of statement by Mr. Voor¬
Canada
across
mc.
Chicago Philadelphia Providence
London
are
(Continued
BOND FUND
40 Wall Street, New York 5
Boston
Voorhees
M.
is
journalist writing in the New York "Times" last
COMMON STOCK FUND
White,Weld&Co.
nderfc
fo'gotten
Joseph Stalin upwards of 20 years ago described
Communism and its works, according to Isaac Deutscher, a
Madison,
PREFERRED STOCK FUND
is
all, cannot
one
A Mutual Fund
request
on
cf
proportion
Price
Prospectus
-
leaders of
mat i
550 Branches
share
by
com¬
between
ry
"The anatomy
production; (b) there will be
for
o n
petitive rival¬
What Those Economic Paradises Are Like
British
in
leaders.
The
Franklin Custodian
subject to change daily with
change in Net Asset value
growth
insuffer¬
the
able
So
the
of
3>power of big
unionism ?nd
INC.
per
profits will end industrial expansion. I
p o s
en¬
>
appalled
EDITORIAL
of
American
,
Common Stock
$16.26
am
or
by the insatiable influences which are so con¬
stantly constricting the area within which productive efforts in
American business are possible.; The evidence I
propose to submit
Illinois
belief in
my
have
be provided
slender thread of prospective
systems.
the
of
:
cannot
the
needs
For 50 years
FUND
President
,
be met without increasing steel prices and
Says pensions
d
.
GAS INDUSTRIES
;
wage
leading to inflaprotected without heavy
accumulation of reserve funds, and attacks
making pensions a
retroactive charge on future consumers. Says constant
cutting of
tion.
re-<?>
Today I take this sstatement as
dis¬ my
text
for
discussing
with
tinguished guests, fellow-members you "The Outlook for Railroads."
of the Veterans of Foreign Wars:
We mus have railroads in and
I am happy to be in Miami to¬
for American because they now
day to help celebrate the Golden
Jubilee anniversary of our organ¬ are, and within the predictable
future will continue to be, our
ization.
one indispensable mode of trans¬
I am proud to be a member of
It has been well said
portation.
the oldest active veterans' organi¬
that America lives out of box cars.
_
•
agement,
full
20)
*
manage-
moder
,
on page
given
words:
directed
sive
House
(Continued
essential
as
progress
dent's address follows:
Mr. Commander in Chief,
,:
factor in railroad
as
rate increases
became
railroads,
and
men,
asked
by the State
Department,
zation in the nation.
States Steel Corp.
and pension demands by )
workers in steel industry is result of compelit've
rivalry between j
leaders of nationwide unions, gives reasons
why these demands ;
spected work¬
called for
despite the
of Represen¬
tatives has already passed a meas¬
ure cutting the amount demanded
by one-half.
:
The complete text of the Presi¬
fact that the
since
1945
business
purpose
Truman
Defends
universally strong individual railroad
occasions
Railroad
railroad
and
for
funds for that
President
Committee, United
''
Mr. Voorhees, contending higher
asks rails receive equal treatment with other forms_ of transpor¬
nations
the
of railroad
vast reduction
Denounces Federal subsidies to railroad competitors and
to
amount
Cites
solvency and denies ^higher rates lead to reduced rail
Appropriation
of
J
By ENDERS M. VOORHEES*
Chairman of the Finance
of sound
economy
cannot
to railroad
Western Euro¬
pean
Fight Between Rival Union Leaders
.
and problems of
progress
indebtedness and increased capital outlays
for
aid
reviews
financially strong railroads.
his
program
executive
,
of
Harry S. Tru¬
man
strongly
arms
Copy
a
Steel Workers' Demands—Power
.'
Foreign Wars,
President
railroad
railroads, and stresses importance to national
armed allies. Cites value of mili¬
In
President, Illinois Central Railroad
,
veterans
war
Price 30 Cents
By WAYNE A. JOHNSTON*
Vital: Truman
President tells
Y.j Thursday, August 25, 1949
Teletype NY_ 1-2708
Telephone: Enterprise
182$l:
"V<,>
>v
'
2
The Next Broad
Niagara Hudson
United
Corporation
"
SOLD
—
'
Hanseatic
War
I,
stock
market
the
British-Canadian
the
ton.
in
peak
months
sus
desperate
readjustt period
ensuing lasted
m e n
only
pONNELL & CO.
Members
New
York Stock Exchange
New
York
22
»
(ver-j36 months
Exchange
Harry D. Comer
aSm
Mi- 11).
2-781S
percentage declines in avr
prices in these two postwar
periods were not greatly different,
as shown in table I.
The
erage
An
Continental Radiant
The
feature of the
market
readjustment
outstanding
1946-1949
some
effort
to
get
speaking
SEC,
annual
Mutual
more
bonds
Government
is
wheels go
of
,
an
value to
serve
j Probably •
weakness -in
lesson for the would-be socializers
in
New York 5, N. Y.
Teletype NY 1-2813
much
a
midst.
our
object-
needed
socialists
The
offices
1856
H. Hentz & Go.
"
New. York
Stock
Exchange
York
Curb
Exchange
New
in
as
a
cushion.
York
New
Cotton
Exchange
our
ent is the
ulative
the
the
stock
Chicago
Board
N.
Y. Cotton Exchange
;
.
'
»
Bldg.
YORK 4, N.
i
Y.
PITTSBURGH
DETROIT
GENEVA, SWITZERLAND
market at pres¬
position of highly
issues.
Exchange
And lather Exchanges
CHICAGO
condi¬
Inc.
Trade
ol
New Orleans Cotton
NEW
glaring
most
internal
Exchange,
Commodity
-
(Note
There
is
spec¬
no
real
enthusiasm
yet for outright
speculations. The upswing in the
England had been proceeding on
!
a
premise now proven ,to be. market since mid-June has been
difference in intra-market trends, fatally false. That premise was featured
by. investment-type or
is the fact that in the War II ad¬ that, in government credit, they middle-grade stocks. Speculative
an r inexhaustible
resource, issues have
lagged far behind. - £•
justment the brunt of the decline had
in the market as a whole had been which could be .used without limit,,
As shown'in table II, stocks in
registered in about a year. Thus, in the socialization of industry, or the $50 price-class (D-J indus¬
the
May
1947x low
was
115.2 what-not. From Britain's experi¬ trials) advanced 9.7% between the
in
to all dates shown.
the
above series,
compared ence, it should be clear
Meanwhile, stocks
with a subsequent low of 112.0 in that (1) socialization is not the in the
$4 average class (Standard
answer
to " the
common' man's & Poor's 23
June, 1949. The last two years of
Low-Priced Stocks)
this
"bear market"
carried the prayer for security, and that (2) rose
only 15.3%. .The normal ad-,
there is an elastic limit beyond
average price down only 3%. On
the
explainable^ by
partly
branch
our
Established
British; Government bonds.)
tion of
trast,
MERCER HICKS CORPORATION
Mobile, Ala.
Direct wires to
:
haps even more than that—it may
provide
NY 1-1557
Members
cally all stock groups s.imultane7
ously.
Another noteworthy con¬
Bought—Sold—Quoted
St., New York 4, N. Y.
New Orleans, La. - Birmingham, Ala.
Technical Weakness-^;
Speculative Stocks Lagging
downswing, which affected practi¬
glass heating system.
first,
Conference,!
'rouncL?
various stock groups. That
contrasts
with
the
1919-1921
electrical radiant
Fund
the
e; r
.the
along
milepost
important
among
Stock
before
restraint, blue chips and new pro¬
motions. That is what makes the
collapse of the market for
British
"piecemeal" nature,
cross-currents
::.. t
?•:
Members New York Stock Exchange
discouraging.the investor from
ever buying individual securities.
Our economy demands all types
of people in the market. It re¬
quires amateurs as well as pro¬
fessionals, speculation as well as
route of worldwide inflation. Per¬
its
been
with
;'V:
25 Broad
"What must be avoided
declared:
ever-present
has
Corp.
;
Steiner, Rouse & Co!
Officialdom is undoubtedly right
may
include devaluation of the in trying to encourage "venture"
pound sterling as rwell as other capital—in trying ;to induce people
"soft" European currencies. Spec¬ to take, risks instead of, hiding in
ulators
looking
for
a
higher storm cellars. The storm cellars:
American
gold price, however, themselves lack security unless
seem doomed to disappointment.
the junior equities have sufficient
War
World
get
may
Uncle Sam's dollars. The outcome
following
BROADWAY, NEW YORK 5
Telephone Dlgby 4-5700.
talks
monetary
chills and
jolts from the head-lines emanat¬
ing
from
these
conferences.
Britain's plight is bad enough, to
be
sure, ; However,
it will be
painted as black as possible in a
ment
1919.
of
The
Since 1917
72 Wall Street,
S.¬
U.
get under way in Washing,
American investment senti¬
will
Fall
■
is
.
reached its
Rights & Scrip
new
Bought—S old—Quoted
■■' -'
Hflnover 24)703
swing will be upward.
In mid-September, the
After World
Specialists in
The
Louisiana Securities
„
'
proximity to this 50-year -pricepath, lending additional support
to the view that the next broad
than three
Common
.
,
was4>
years.
Glass Heating
,
their postwar high more than three years ago, in May 1946,
well as the whole, economy, has been undergoing readjust¬
elapsed time in this period exceeds that of the entire bear market 1929-1932,
The
ment.
Teletype NY 1-583
Tel. REctor
<
^
Since that time the market, as
York 5
somewhat less
J
;
probably completed last June.
was
which
120
Stock Exchange
Average stock prices saw
Corporation
Curb
Alabama &
r
following World Wars I and 11, concludes postwar readjust¬
Says technical weakness is lag in prices
speculative stocks, but contends attainment of a new high in stock market may prove a "flash point?
for upward trend.
stock market
ment in the
'
BArclay 7-5660
.
Stockmarket analyst, contrasting trends
QUOTED
120 Broadway, New
:
y.rManager, Statistical Department,"
Paine, Webber, Jackson & Curtis,
of
New York
Swing Will Be Upward!
Members of New York
Commonw'lth & Southern
—
Thursday, August 25, 1949
By HARRY D. COMER
Southern Company W.D.
BOUGHT
FINANCIAL CHRONICLE
COMMERCIAL &
THE
(742)
Royal Bank of Scotland
Incorporated by Royal Charter 1727
HEAD
I
OFFICE-—Edinburgh *
Branches throughout Scotland
LONDON OFFICES:
3 Bishopsgate, E, C. 2
.
.
.
American Air Filter Co.
Common
the
Black Star Coal Corp.
in
other' hand,
War
the
government credit cannot vance] in, .these' low-priced issues,,
to be in line with the move in the
stretched without breaking..
$50 stocks, would need to be 44%,.
Bureaucrats, money-managers, or
juSt about 3 times the rise ac¬
which
of
case
I, the downswing proceeded
its
voters-—take heed!
whole duration. These differences
have
Kentucky Stone Co.
<
5%
probably served to obscure
the fact
Preferred
™
recent readjustment
Incorporated
1st
ing War I.
BANKERS BOND E
'
Floor, Kentucky Home Life Bldg.
LOUISVILLE 2, KENTUCKY
Long Distance 238-9
-
Bell Tele. LS 186
the
market
stock
in
pleted
formance
official
is
ages. It
'
since
This
50-year
to
per¬
Dan River Mills
upward
tury
maybe
Scott, Horner &
Mason, Inc. ; •
Lynchburg, Va.
LD 33
Tele. LY 83
llllllllllllllllllllilllllllllllllllllllllll
The
and
1931-32
were
These
sions
were,
of
cases
of course, the occa¬
worst de¬
pression, .and
"Pearl
Harbor".
Stock prices in June this year,
£ 155,175,898
"Flash: Point" in Stocks
The
..
Associated Banks:.
■Clya .Mills & Co.
••
other)
these (or
forthcoming
v
,,
Ltd.
carry them back to the pre-elec¬
tion level of September 1, 1948.
,
Then
further
a
provide
slight lift
would
high for the past
years.
Such a new high
might well prove to be the "flash
point" in stocks,—the point at
which the real flight out of dol¬
lars and into stocks gets under
a
$35
new
three
way
Our
citizens
INVESTED in
hold
a
record-
these actions
resent
full year's
a
subscription to the Monday
and
in earnest.
breaking volume of dollar equiva¬
lents.
They are holding these in
gestures. have been the fol¬ the
apparent belief that they rep¬
among
Bank,
Deacon's
Williams
A rise of 4% or 5% would
cance.
good storers of value.
As
signs multiply that the value of
Board, (also Chairman of our
currency will be deliberately
the Board, McCabe,- personally);
reduced, a movement out of dol¬
Secretary of the Treasury Snyder, lars and into
equities could very
Department of Commerce, De-! well
begin almost any time. Only
partment • of
Agriculture, ~ and a
relatively small amount of new
others.
buying would carry the stock
Commissioner McDonald of the
close
a
TOTAL ASSETS
Thursday issues of the
"Chronicle"
ideas
will
galore and
dividends.
~
J.
,
give yon
pay
L
liberal
"J-
,
/
serve
this .country's
again turned upward from
since
agencies and individuals:
President Truman, Federal Re¬
1940-42.
and
actions
lowing
where stocks fell out of this price-
path
some
Prominent
this^cen-
only
sort
a
"shocks".
by 6 in 50
line, sloping
at this rate, touches all
except two.
and
the American public for
long-term
bear market bottoms _of
as
early summer point in the direc¬
tion of a definite plan to prepare
values
dollar
A
serve
Various official and un¬
talks
official
have
upward trend, rising at the
rate
of
3.64%
com¬
years.
been
has
about the condition of
appear
England.
composite aver¬
over-all
tiplies
t
of antidote for the sad news soon
an
pounded annually. That rate mul¬
Moore-Handley Hdwe. Co.
Washington
'
outlook to
mestic
fact that stock prices
pursued a long-
a
1900
term
the
64 New Bond Street, W. 1
been trying
doing its best, of late, to generate
sufficient optimism on the do¬
com¬
year.
Charing Cross, 5. W. X
Burlington Gardens, W. 1
-
Average stock prices! now stand
for years to discount the collapse,
near the 1949 top, a level which
of 'Britain. Yet it appears that
has rbut scant technical signifi¬
the
borne out by
the
of
of
probably
this
June
is further
inspection
American Furniture Co.
was
49
•
,
'
postwar readjustment in
view
Trading Marketa,
*
-
markets have
Our
This writer's conclusion is that
/
:
extent and
both
tually registered.
Campaign for Better Sentiment
parallel to that follow¬
near
was
in
that
duration the
West Smithfield, E. 'C. 1
be
almost without interruption for
Common
8
(Continued
on page
15)
Commercial & Financial
25 Park; Place
•
REctor
Chronicl I
New York 8, N. Y,
2-9570
A
3|5I5fSE15HSEfSI5I5I5l5jBE{5IB15EI5f5EIB
TABLE I
vs'W;::
•/.':v
/TCvv-'v -y-
>(
: v •/•
Composite Stock Prices*
Since 1932
Specialists in
VIRGINIA—WEST VIRGINIA
NORTH and SOUTH
CAROLINA
1
Post-World War I
October, 1919
August 1921
54.8'
Decline
♦Standard
&
Poor's,
monthly
r:'~'
of weekly indexes;
■F. W.-
'
table ii
■
SECURITIES
'
Dow-Jones
for 36 Years
Externals—internals
;
Sluggish Performance of Low-Priccd Stocks
•
Quotation Services
1935-39—100.)
MUNICIPAL BONDS
.
FOREIGN
—27.4%
(36Mos.)
-
r
average
Over-the-Counter
154.3
112.0
May, 1946
June, 1949
' '
—31.9%
(22 Mos.)
(Duration)
Specialists In
Post-World War II
V
80.5
National Quotation Bureau
Standard & Poor's
■
CRAIGIE&CO.
RICHMOND, VIRGINIA
Bell System Teletype: RH 83 & 84
•
30 Industrials
Aug. 10, 1949
June 15, 1949
180.60
:
W
-
164.58 Y V
r „
23 Low-Priced Stocks
118.1
102.4
208
South La Salle St., Chicago 4
Tele. RAndolph 6-4696
Telephone 3-9137
ZIPPIN & COMPANY
Advance
9.7%
15.3%
-
Tel. CG 451
Incorporated
Established
48 Front Street
CHICAGO
1913
New York 4, N.Y.
6AN
FRANCISCO
The Weakness in
Articles and News
Voorhees
M.
__
A.
By GAYLORD WOOD
*
,
.....Cover
v.1?'/ '/•%
-
Market analyst
3
postwar collapse m
The SEC Looks at Mutual
4
to
Funds—Harry A. McDonald...
Socialized Medicine—Thomas I. Parkinson^......^....,./
Open-End Funds
(see under
A Program to Encourage
W.
Haskell..^;.......
'
Investments Abroad
on
Chester DuMond
King.....
..
..
You
-,U<v* -.«■
•
...
..
.f>
10
—Earl L. Butz
-U-
"
Too Powerful Labor Unions—Threat to Our
ment
the
If,
is
as
the habi-
case,
tue
J.
:
'
...Cover
Aims Aid Abroad—President Truman,
$100,000,000 C anada Dollar Bonds Marketed....,
Iowa Banker to Attend Gold Standard
15
Parley
Board
Wage
l./. i6
-
Colombia
_____
Why Not the Facts? (Boxed)-_i—
Reveals
——
James E. Webb, Under
vestments Abroad
,
1
Solvency
...
U. S. Loan
Brazil Steel Concern Seeks New
Britain's July Trade Figures
A...'
vW-- '
"
.
vy'-t';**:
.
—
t<./ T;.
;
V.;_. ►j •;?V;
It (Editorial)
See
We
Bank
and
•/;.'/>
29
14
—
Field
Dealer-Broker—Investment Recommendations
Coming Events in Investment
13
—
8
17
From Washington Ahead of the News—Carlisle Bargeron.—
6
Indications of Business Activity
.^—. 32
Mutual Funds
1—u—■
12
NSTA Notes
—
13
News About Banks and Bankers.^
16
Observations—A. Wilfred May—
*
Einzig—"Britain and U. S. Criticism"
Co.
INCORPORATED 1923
seeing the cataract until
the bottom'-' is
30
FEDERAL STREET, BOSTON 10
HUbbard 2-3790
<■>
Tefctype-BS 128
LAMB0RN & CO., Inc.
WALI,
99
STREET
NEW YORK 5, N.
Y.
SUGAR
with
always
be
to
^
The Three Trends
The
stock
v
Exports—Imports—Futures
primary trend is down.
/The secondary trend
in the markets.
The casual
well aware that
Raw*~Refined—Liquid
! The minor trend is
is up.
up.
/
•
■
25
39
*• ♦» -;;/•■
...
Securities
Canadian
Walter J. Connolly &
the description
volume,
small panic oc¬ Y This week the Dow-Jones In¬
dustrial and ( Rail averages con
curs, and the general level of val¬
t-inued the rise 'that
started on
ues is knocked down perhaps two,
The volume of trading
three, or on serious occasions as June 13.
much as 4%. according to the in¬ remained moderately high.
flated state of particular stocks at
The underlying weakness in the
the time.
A speculator who has current
business situation is so
—
—
again
and
now
———-7—-——Cover v
_____
16
Shelf
Business Man's Book
that
he is half way to
observer must be
Stocks...
Insurance
think
published to¬ j there was no heed to sell stocks.
wards the end of the last century, The cataract of October and No¬
covered
the
matter
very
ade¬ vember, 1937, and of March, 1938
(all of which we avoided), lost
quately
(•:
"h ;■
more
money
for investors who
"There is scarcely a more inw
held on to their stocks, than they
portant point to which to draw
could make up in ten years.
attention, than that of being con¬
tented to watch for an opportunity.
open
21
Regular Features
As
.
j.ust about what happens to most
ulator
*9
Reported——
.:: v.;
Gaylord Wood
It is fatal to the success of a spec¬
High Taxes Menacing Na¬
First National Bank of Boston Sees
We
19
Mortgage Debt
never
of "rever
20
Substantial Drop in Farm
Institute of Life Insurance Reports
aftd
•
.
Secretary of State, Says American In¬
Could Reach $2*4 Billion Annually
NYSE Revises Floor Trading Rules
tional
;
18
Available.
!
;
,
18
—
New Financial Writers' Roster
18 *
*
-..
lock
a
little
A
in
England Manufacturers Expect 15% Decline
New
Sales
1949
17
---'18
Debentures
Banks Place
FIC
by Steel
,
BOSTON & MAINE R. R.
box, and forget speculators and investors sooner
them—which is also bad, as wit¬ or later.> Take 193,7 as an example.
ness those who
locked up utility Our notebook is. full of opinions
and railroad stocks in 1928 and
by all the leading "experts" (stock
1929.
' ■
market advisory services)
that
/'".A';
in
cates
12
___
George Putnam Says Investors' Case Should Be Heard
World Bank Grants $5 Million to
>
;
severe handling he gets
seeing the cataract until
he is half way to the bottom,".:..
by
place
certifi-
the
textiles
■
panic takes
a
henceAhe
it be to
./
new england
who starts
The haphazard
sure to have
system.
is, therefore, never contented
unless he is 'in the swim,' and
would
better
time, is among
faults when
and
point
17-/
Schlesinger......^...
same
place, because he is, as a rule,, in
a, fever lest he shall miss a ri^se,
in do¬
ing "anything
Dangers in Point IV Implementation—Max Winkler......... 15 / about the
Let's Have No Reckless Buying of Common Stocks
•
market. Much
—Edwin
Telephone* WHitehall 4-6551
excusable
speculator is almost
accounts open when
is
room
at the
least
upon any
the
of
always long of
14
Uf®-saYers.
as
us
WALL STREET, NEW YORK
99
committed by the man
/./•://;''/////* stock, / there
does not seem..--j.—
13^
to
be
much
Democracy - /
—John V. Van Sickle.
the
just
Support—Step Toward Nationalization
Farm Price
But
under
lator's money and upsets his judg¬
board
.;
dough.
obsolete securities
of
look to
by the itch to buy, "for fear he will miss something,"
overcome
frequently the
Babson..v.^IL.i i -11
Your Everyday Tax Burden—Roger W.
open-minded enough-to-retreat to the side-¬
in
sink
float
who
those
weight
time.
10
—A. L. Gitlow._^-.._._._,.-_.i.-____-
.
market all the
9
.....
Labor AgitationI
*
THE CHANNEL
-—others
;
can't be in the
«•
.
Consumer Purchasing Power and
•
8
...
Our Labor Unions Are Uncontrolled Monopolies
—Willford I.
7 •/
...
The Outlook for Agriculture—C.
always
-
Collective Bargaining—Ira Mosher.
■/'.
lines frorp time to time has a much greater chance for success than
has the operator who will get out for perhaps a few days, but wh.Q is
i/;, 6:/
;
? SOME FOLKS SWIM
accumulating that top in stock prices is forming.
are
The investor wha is
^
•:
commodity prices and looks for heavy selling
down below 1942 lows. Says numerous clews
drive stock prices
;
5<*
Snyder
The President's Attack
;
"Observations")!
______
"Is Bigness Badness?"—Harold C.
—Hon. John
4
:
-
foresees huge inyentory losses due to inevitahle
2
vs.
AND COMPANY
Fort Lauderdale, Fla.
;
______
—Harry D.
D. Popovic
TinsTtin
Current Stock Market'
The Weakness in Current Stock Market—Gaylord Wood^-^4
—M.
3
Cover
.
Johnston..
The Next Broad Market Swing Will Be Upward!
Closed-End
B. S.
Page
Steel Workers' Demands—Power Fight Between Rival Union
Leaders—Enders
(743)
CHRONICLE
r *
I NDE X
The Outlook for Railroads—Wayne
FINANCIAL
&
COMMERCIAL
THE
"Number 4832
Volume 170
..£30,000 nominal of
such a time, stands
in
a
moment to lose
£800 or
£1,200 at a blow.
With such a
contingency always hanging over
him, it must be evident to- the
prudent man that in order not to
expose himself more than he can
possibly help to such a catas-*
irophe, which may happen at any
moment, he should operate,
be
contented with a moderate profit,
£20,000
/ DIgby 4-2727
>
a
or
stock open at
uncomplicated, it "is amazing that
escapes
detection by 99% of
businessmen and business analysts.
it
Stix: & Co,
INVESTMENT SECURITIES
Briefly, in recent years we piled
up
staggering inventories, pur¬
chased for the most part
that
were
»
;
at prices
the highest since
Had these inventories been
509 OLIVE
STREET
1782.
St.LouisI.Mo,
owned
outright, with no money borrowed
them, possibly the coming chaos
could have been partially avoided.
But
businessmen
very
stupidly
on
Member* St. Louis Stock Exchange
...
ar.d close.
ing
f.:/.
'j.T- 29; ,
37
18
Reporter's Report...
Our
Governments..
Public
Offerings
Security
Prospective
Securities
Utility
Railroad Securities
Securities
Salesman's Corner...
—__
19
in Registration-
—
35
Securities Now
Industry..—^—_______^ 5 •
The State of Trade and
30
(Walter Whyte Says)
Tomorrow's Market
Washington and Yon
by Milan D. Popovic,
1
,
May is en route to
*Mr.
21
—
40
——
Paris. This week's column was written
Vice-President of the Blue Ridge Corporation.,
.
COMMERCIAL and
The
FINANCIAL
Drapers'
B. DANA
WILLIAM
25
Company
CHRONICLE
Patent Office
2-9570
REctor
HERBERT D. SEIBERT,
WILLIAM
WILLIAM
DANA
D.
to
RIGGS,
"To
•'
s
•
^■/
Editor Si Publisher
President
i
.
^
Every^ Thursday (general news and ad¬
vertising Issue) and every Monday (com¬
plete statistical issue — market quotation
records, corporation news, bank clearings,
Itate and city news, etc.).
* ,
.
Other
Chicago
Offices:
3,
HI.
138
5.
(Telephone:
La
Salle
State
of $54,800,000,000, an
all-time high.
(As' of June 39/ business inven¬
tories amounted to $51,579,000,000,
speculator
be
overtaken,- with
at
States
large
1948 totaled
the end of
the all-time record high of
for the rise,
about
PAYS DIVIDENDS
I because it works harder
■r.
(Continued on page 5)
engulfs a specu¬
of
St.,
06131:
Note—On
the rate
¥ r
are
interested in offerings of
^
cause
■
4 !
'
advertisingij^The New
dividends be¬
it works harder.,. reaches
second-class matter Febru¬
$38.00
Canada,
per
Spencer Trask & Co.
of exchange, remittances for for.
advertisements mus(
r
tio.nal.
security
institu-
buyers-,-and
individual investors. Are your
advertising dollars working hard
year.
account of the fluctuations In
funds
officials,, professional and
-
PREFERRED STOCKS
8,
of
in
Quotation
elgn subscriptions and
be made in New York
banking executives,; corporation
High Grade Public Utility and Industrial
Rates
Record—Monthly,
$25.00 per year.
(Foreign postage extra.),
Mbnthly Earnings Record
—
Monthly,
$25.00 per year.
(Foreign postage extra.)*
and
'
T
York Times pays
We
f
Other Countries, $42.00 per year.
Bank
'
Financial
.
Subscriptions in United States, TJ.
Possessions, Territories
and Members
Pan-American Union $35.00 per year:
Dominion
Business Manager
*
the
in
a
by a panic which
at the post office at New
under the Act of March
Subscription
Thursday, August 25, 1949
•
more
1949, business in¬
when a
heavy fall. He is down three .months in a row.)
then free to buy at prices which Commodity prices reached their
are sure to
be unduly depressed, postwar high in August, 1948, with
and instead of the dreary waiting the Bureau of Labor Statistics in¬
to recover from losses incurred, dex at 169.5/ This represented the
he makes in a very short time highest level since the year 1782—
probably a handsome profit, again the post-Revolutionary War price
retreating to avoid the reaction inflation. Bank loans to business
that follows a sharp recovery, to zoomed, to stratospheric propor¬
await a similar favorable oppor¬ tions in December, 1948. Loans of
all commercial banks in the United
tunity.
V
panic causes
Other Publications
#
that
much
be
the
favor, of
8, 1879.
N. Y.
9570
SEIBERT,
as
25, 1942,
York,
N.
Y.p
ary
COMPANY, Publishers
Park Place, New York 8,
will
chances
is
periods,
short
for
"•On March 31-,
ventories totaled the gigantic- sum
Copyright 1949 by William 3. Dana
Reentered
S.
Reg. U.
C., Eng-
Gardens, London, K.
and, c/o Edwards & Smith. 'v
I
Twice Weekly;'
Published
for comparatively long pe¬
having commitments
amounts of stock open
tNot available this week.
-
on
their in¬
;:/:////v
of look¬ ventories.
riods." and
—
Our Reporter on
borrowed huge sums on
"The obvious advantage
Members
New
HAnover
/'■',
\
Albany/
50 Congress Street, Boston 8
2-4300
--
.
-
New York 4'
Chicago
enough for you?
.Members New York Curb Exchange
Yqrk Stock Exchange
25 Broad Street,
»
>
-
*/
Hubbard 2-8200
~
'
Teletype—NY 1-5
Glen? Falls
-
_
'/'A,
Schenectady
-
•
She Keta Jfork Simea
*. "Alt
,
Worcester
th« News That's Fit
to
Print"
4
THE
(744)
COMMERCIAL
FINANCIAL
&
CHRONICLE
The SEC Looks at
/
Thursday, August 25, 1949
Socialized Medicine
By HON. HARRY A. MCDONALD*
By THOMAS I. PARKINSON*
Commissioner, Securities atnd Exchange Commission"
President, The Equitable Life Assurance Society of U. S.
Commissioner McDonald gives assurance SEC recognizes importance
V
of welt-managed inve;tment companies. in o/erall investment picture. Cites large savings available for mutual funds purchase. Cautions
mutual ruftd sellers against discouraging investor rom ever buying individual securities, against unwar¬
ranted sates arguments as comparison with government issues or insurance, and urges proper respon¬
sibility for corporate management.
v
•
s
Holding socialized medicine/while increasing number of those re- A,
ceiving medical care, is likely to lower its qtii»';ty, prominent life
insurance executive, though not
opposing compulso*;' medical aid,
contends, because of accomplishments of private health insurance
ought to think first before substituting cold hand of
gov/rnment ?
warm heart and skilled hand of
existing medical servict.*-
we
for
I am greatly encouraged by this conference.: Your presence4 here is the answer to
frequent criticism that the investment industry does not change With the times. Mutual
funds are, after all, a relatively new field.
Although they started- in Boston during
the early 20s,f
did
not
"come of
age"
they
until the pas¬
I
the
of
sage
vestment
n
Company
1940,
of
than
10
Act
less
years
In jus.
ago.
a
the
decade
open-end
in-
vestment
it
designated
company, as
i
s
in the
statute,
has assumed
a
signif i c
1 a r &
n
Harry A. McDonald
,'
p
financial
the
in
scene,
t
a n
°
this country of a new investor
class, a class which considers the
purchase of securities as a form
of
investment in
which
broader than the exercise of sales¬
manship or of competent day-to¬
day management of the portfolio.
but it will de-
the pres¬
ervation of
principal is a most im¬
portant consideration. This is the
great
middle-income
group — a
group which has only since the
depression become the reservoir
for most of the savings in this
country, and has thereby become
the
of
source
investment
most
funds.
through the efforts of
the investment fraternity.
I take
measure
the
with
millions
savings
depos¬
ciation
of the
of
the
Commissioners
National Asso¬
State
at
Securities
Richmond, Va.,
trading small talk in the lobby of
the John Marshall Hotel, Tasked
the
underwriter
of
dne
of
the
well-known
funds
how
things
going.
He replied,
"Oh,
pretty fair. Business for the first
were
six months
only 179% ahead
of the same period
last year."
That
certainly does not sound
like the reports from most indus¬
tries today.
was
the
great
savers
in
the
pooled,
and
investment
is
neled
who
chan¬
through professional
agers
policy.
-
determine
This
basic
man¬
investment
fact
has
sig¬
*
Those of us, in government and
out, w£o like to view the func¬
tioning. of our capital markets
with
some
perspective,
the
see
rules
of
and
the basis
on
formulas
markets.
its
to me that the
mutual funds have a definite ap¬
peal for that purpose. ;
/. *
'.
Unlike the
wealthy people who
formed the small investor class in
years
gone
by, these people with
their recently accumulated sav¬
ings usually have had little or no
experience in the buying and sell¬
of
few
a
Your
salesmen
of
the
mer¬
professional
management.
the < investor on
You try to sell
letting "experts"
nial.
To
~
them the market is not
pnly strange,
The
f
I
Commission's Point of View
want
talk
to
to
today
you
it is technical,
best
the
left
to
perts."
full-time
.
r-
and
"ex¬
from the point of view of the Se¬
curities and Exchange Commis¬
To
these
him.
sion, whose responsibility is not
to investment companies,
but
se¬
od of
the
larly well adapted.
It* solves one
of the biggest hurdles to initial
limited
extends
curities
mutual
the
over
market —of
funds
are
entire
which
are mdre^e'xperienced
investors; the mUtUhl fund meth¬
buying securities is particu¬
familiar
the
of
to
the
purchase
that
so-called
securities
-
be
secrets
markets.
of
un¬
mutual
But,
only the first step
It would seem
in
sales
popularity
funds.
there
in my own
It
are
reasons:
mind for the
of
occurred
two
market
the
to
rather
first—the
mutual
me
that
conclusive
investment
need which the mutual funds
fill,
and second — the active
program
you employ in selling them.
We happen to be
living in a
period when the search and de¬
sire for economic security has be¬
come one
of man's
primary mo¬
tivations.
At the same
are
their
wares.
Their
experience has
not been too dissimilar from
of
that
the insurance
surance
companies.
In¬
companies learned long
ago that insurance had to.be sold.
It did not jump "out the window"
like a hot issue. Their
biggest task
has been to educate the public to
but
can¬
they
some
T.
the
of
ecessity
attention
it
number
with
the
receive.
quarrel
ical
for
care
No
the
ment
program
of the average
in¬
And
page.
one
day, unless
you
have
completely discouraged him
from taking the initiative, he will
be
prepared to exercise his own
personal selection, and become a
direct
investor
stock.
His
in
corporate se¬
curities and, perchance, in equity
comes
a
individuality then be¬
factor
in the
market,
as
it should be.
de¬
not
medical
mutual fund- companies
the
economy
as
a
-
pose
whole
for
are
is
he
called
increased
would
one
better
the people
s
,.
this
- ~
who
it.
need
to pay
many
The
pos¬
such costs
accumula¬
tion of adyance funds has been
recognized and many organiza¬
tions now provide this service.
of
med¬
of
.
those
of that
upon
problem for
a
sibility of provision for
by insurance and the
Extraordinary progress has been
made in the organization of Blue
,
Cross plans providing hospitaliza¬
tion for members who contribute
want better health for
ourselves arid our neighbors. We
all want a continuation of pio¬
which
sums
form
insurance
an
neering medical research, and the fund from which benefits provid¬
ing hospital
provision of adequate hospital fa¬
sometimes refer to
as
million
preven¬
tive medicine and which has add¬
ed so much to the health and wel¬
people.
our
may
can we
than 6®
today
are
of, or enjoy, such hos¬
pitalization benefits.
More
recently similar insurance
provisions
get it.
to
sured
want,
we
be drawn.
more
Americans
members
The question
is, therefore, not what
but how
care
practicing skill which It is estimated that
cilities and
we
his
for
reimburse
the
in¬
expenditures
for
have
normal
medical
medical
and
profession, the effective¬
its
of
ness
services, and the de¬
in human
crease
dependents of their
suffering and
tension of human life* which
ex¬
have
dollars for
little
ing larger
company
now
has
contribution
by the Gov¬
Nevertheless, it must be
admitted
that
the
benefits
attention
of
and
ple
are
would
age
in
been
What must be avoided
as
far
as
in
Put
died
is
1900.
from
ever
curities.
buying
Orr
individual
economy
se¬
demands
-
by
in
and
medical
Dur¬
all types of people in the market.
It
requires amateurs as
professionals, speculation
as
restraint.,
blue
chins
well
well
a^d
new
*
(Continued
on page
as
as
21)
to
course,
more
case
we
operates
fever
of
have
been
diphtheria,
brought
pro¬
say
pending
has
been
accomplished
in
without government
assistance, we ought to think first
in¬
past
before substituting the cold hand
small
and
is not to
that
compulsory medical
aid proposal is undesirable, but
rather to suggest that in view of
the
mor¬
These
as
own
provide it;
and, of.
mean that the doctor
a free agent in per¬
All of which
what
point.
fever,
Is it
forming the obligations of his
the
scarlet
of it.
have done in
fession.
the
vanishing
we
attention selects his
doctor
infant
accompanying
diseases,
need
we mean one
under which tbe person in need of
con¬
reducing
mortality. In the
as
undoubtedly
thing compulsory?
By voluntary plan
present aver¬
its
will
in particular
tality has been reduced almost to
control
pre¬
so
many
other matters in this
country : to try out the further
possibilities of
such
voluntary
plans before proceeding to some¬
average
our
increased
The
the
and
not desirable
another way,
under
several well known
lives,
in
greatly expand the quantity and
quality of medical attention by
that part of our population which
made
typhoid
insured
benefits
years as against 49
Also, great strides have
maternal
400
practice
has
mortality
than
the
life is 67
1900.
more
and
third.
a
which offers these plans
of
prevailing in
same period
span
than
-
have
ing the
life
for the service of
life
insurance
One
This represents progress
one-quarter million peo¬
saved in this year who
ditions
sums
tention
the
1900.
one
px
doctor's visit, includ¬
payment of funds for medical at¬
.mortality in our
population
In the first place, the
death' rate of this country has
been reduced by more than 40%
since
for
or
research
of medical
terms
em¬
provides
to five
ees.
greater number of the popu¬
lation is desirable.
extension
up
covering nearly 500,000
employees and the wives and de¬
pendent children of such employ¬
the population and their extension
This
plan
groups
have
been confined to less than all- of
to ;a:
a
specialists.
very
ernment.
The
reimbursement
resulted.
These results
so
far
have been without Government
^adership and, indeed, with
the
ployees.
pox.
cessibility of insurance protection: possible is the type of selling of
Many other diseases, which used
time, we Similarly, the investment corns- investment shares which com¬
to take a great toll of
human
witnessing the emergence in panies have set out to convince pletely discourages the investor
City, Aug. 18, 1949.
benefit of modern
Nevertheless, the cost
of
all
clude
the need for insurance and the ac-:
the public it needs mutual funds,
*An address, by Commissioner to teach them wha't mutuaTfunds
McDonald before the First Annual are, and where
they fit" into an
Mutual Fard Conference
(spon¬ individual's investment program.
sored
by
"Investment
Dealers'
But the
problems v/hich the
r*"-est">
"tatler. New York
na¬
care
can
never
be paid
the individual who receives
which
desirability
and
more
country.
We
will
which
providing
it.
I. Parkinson
the quality of the
crease
of the
for involves
that
proof
In¬
States is
medical
for by
has been gradual but has already
me that mutual funds should
be
Some of the
sold with the aproach that they :accomplished much.
results to date may be stated in
represent a part of the invest¬
for
investment with intensive selling
methods designed to* merchandise
of
-
to
process.
not
account
Much
care,
not escape
sur¬
the most healthful
tions of the world."
in¬
tribution
It is not
Brookings
the
now among
the dis¬
medical
shares
part.
I am
dividual and
not
the
complete
going to discuss sales tech¬ investment, and that is—which program in itself.
The way to
nique with you—you have heard particular security or securities to buying other
types of securities
the real experts on that
subject- buy. it-coffers diversity of risk^t should also be left open.
As the
but I do think that what I have professional
management, and re** new fund-holder gathers experi¬
to say has a very close connection lief from the need for
detailed day ence, he will also gain courage.
to your day-to-day operations.
to day'supervision.
He will learn some of the termi¬
?
When
reflecting
on
what
I
The investment companies have nology of the stock market.
He
might say to you today, I tried to approached this mass
will learn to read the financial
a
that
i 1 1
w
1,445,000.
was
stitute says, 'The United
You
do much to introduce the
can
should
people,yas indeed to
others who
1947
prising .that
for
We must all be appreciative of
been developed and greatly ex¬
pick securities the
personal sacrifices, the profes¬
urge him to ab¬
panded.
These, of course, are for
sional competency and the
pub¬ medical attention outside
dicate his position in the
of hos¬
market, lic
spirited
endowments
which
and discourage him from exercis¬
pitals. Many employers now pro¬
have done so much for improve¬
vide group medical reimburse-*
ing his own judgment. With what
ment in the knowledge of the
ment benefits for their employees
result?
If this sales approach is
for
the
Y.
Fund Advantages
The
the
granted
fare of
stress
carried too far, the end result
In fact, not only may be quite deleterious to,-pur
•You have spent the past three ing of securities.
are
they unfamiliar with the mar¬ economy. Let me try to explain
days exchanging ideas and devel¬
why.
oping): your selling methods, so ket, but they are frequently fear¬
that this steady improvement will ful of it.
They have yague mem¬
Cautionary Note
continue; Personally, I can see no ories of the losses suffered by
Unless you take care, this sales
small
investors
in
the
market
reason why it should not.
Mutual
approach may eliminate from the
funds have something to offer in swings of the past.
They hesitate market thousands of
potential
to risk savings accumulated
today's market, and, as you know,
purchasers of corporate securities.
there
are
savings available for through long labor and self de¬ The mutual fund, as I have said,
their purchase.
by
take
may
it
Significance of Institutionalized
Savings
deaths would have been
1,712,000.
actual number of deaths in
pro¬
Gov ernmeni
crease
professional managers.
seems
care
the past few years
been
ment in
propo¬
vided
,
middle income group have' yet to
be
introduced to the securities
It
The
has
a
great improve¬
mortality in this country.
If the 1940
mortality rates had
prevailed in 1947, the number of
the
crease
cal
about, it is clear that lated into investment
body of
Even within
there
nents of medi¬
its.
like to talk
attention,
saving.
In other words, the
savings of many individuals are
Individually,
their savings continuous development of insti¬
this
as
an
illustration/ • of
the are not large; collectively, they tutionalized
savings as transform¬
adaptability of the investment in¬ form the great mass of reserve ing the investment market as we
dustry to the changing financial capital to which industry- must know it. Ours! has been tradition¬
desires of the American people.
turn for funds to replenish and ally a market
place based on the
"I You, who are associated with expand its productive plant. individual
judgments
of
many
mutual funds, are probably in one
We know that W'far thesd peo¬ thousands of investors.
The sum
of the fastest growing businesses
ple have not shown great interest total of their separate responses
in
this, country.
Today, while in securities markets. Estimates constitutes the market at a
given
some sections of the securities in¬
As investment becomes in¬
of the number of persons owning time.
dustry are hard put to make ends
am d
individuals
corporate securities vary greatly. stitutionalized
meet, mutual funds are continu¬ But whether one takes the low delegate their investment
deci¬
ing their unusual growth.
The
figure of 6 million pr the large? sions to institutions, more and
other
day while
attending the figure of 14 million some
people more of our savings become trans¬
convention
cal
quality.
large part of the 78 million in¬
policies
currently
in
force; they make up most of the
are
increases
ized
a
million individual investors in
it
companies, the investment com¬
panies are a form of institutional¬
surance
28
insurance
the people who hold
are
small government bonds;" arid they
no
Much like banks and
nificant consequences.
These
One of the
principal criticisms of Socialism has been that though
distribution of the things that men
want, it aecreas* s
their production. In like
vein, it is said by the critics of the pendingscheme for Socialized medicine that
it may increase the number who
xeceive
medi¬
the
of
the government
for the
warm
heart and the skilled hand of
existing medical services.
under
our
At
abolished by research, least we ought to try to build up
voluntary group insurance meth¬
practice, and nursing.
ods of providing in advance the
*A statement by Mr. Parkinson cost of medical attention until,
distributed
by the
Continental like the Blue Cross provision for
Press
Syndicate, Brightwaters hospitalization, it. has covered the
N. Y.
*
greater part of our population.
f
or
medical
-
,
,
Number 4832
Volume 170
COMMERCIAL
THE
1
The Weakness
.'?■
.v
J*
^
^
CHRONICLE
.
-
Electric Output
(
Trade
Retail
State of Trade
Commodity FVice•'Index-—-,..
Food Price
By A. WILFRED MAY
•tilde*"*" --i-W
-
Auto Production
(Continued from
and Industry
V'
'
3)
page
5
Carloadings
:
;"T' j,,r-\
~
,(745)
Steel Production
The
In Calient
FINANCIAL
&
r;
[The following article was written by Milan D: Popovic,
pinch-hitting fof A. Wilfred May who is en routo +o Paris.
MruPovovic is Vice-President of the Blue Ridge Corporation.—
Business Failures
-
$42.5 billion. (In 1929, commercial
bank loans totaled only about $36
billion.).
Editor,]
Vr Many of the accepted indicators • of 'iridustiial activitj^The past
again showed a slight advance in keeping with the.Arepd o
the inevitable post-World War II previous weeks, but notwithstanding this, total industrial production
collapse
in iv commodity 'prices for the, country as a whole-was. moderately under the level :Of. .the
would cause huge inventory losses. corresponding week a year ago. > v
I
' / ..... ...
'
,•
•;
•
...
„•
Closed-End Versus Open-End Fv^ds.r
-
,
;
;
It. has been,.our contention that
;
Bankers, faced with the problem
and duty of protecting their de¬
positors funds, will have no other
course open—they will be Obliged
.to call loans on a wholesale scale.
[Eventually this will result in*fur¬
ther panic declines in wholesale
;commodity prices.
'C >*••'•
week
The
'1949.
showed
report
of
; income
months
cents
36
of
net
a
common
a
against $9.92 for the first
six months of 1948. In addition to
share,
in sales, the flattened
earnings figure was due to the
company's decision to write down
the value of its inventories by $3,-
the
drop
management performance and relative
on
Open-End Funds vs. C^sed-fnl {Trusts
it is hardly pertinent to reduce the
a discussion just of statistical methods and
n' onsistencies
recent articles, including one in this
.....
i
investment attractiveness of
the
fact?-are measurable and
matter to
employment in the week, although under
•
observed
that there were
tion/Continued
claims,
,
six
first
the
for
;Vln»the controversy
the-figures ol as some
*
1948, held close to the peak level for 1949. Compared with the sim¬ publication, do.,
Referring to the well-compiled analysis in
ilar period a year ago/ unemployment was notieeably higher.
Wiesenberger's investment* company manual, it
:
Reporting that new unemployment among the 33,000,000 persons can
be said that statistics show that the closedcovered by government jobless benefits established a new 1949' low
end companies are slightly better managed than
in the week ended Aug. 13, the Bureau of Employment Security
.Total
291,000 new claims for jobless compensa¬
according to the Bureau, actually rose'4n
?
That inventory losses are no idle the week ended Aug. 13, to 2,154,400 from 2,119,000 filed in the
threat, was borne out last week in previous week, due, Director Robert Goodwin reports, primarily* to
the report of American Woolen the
filing of claims by veterans.
;
;
«
Co.
r
the open-end
operating
basis of investment results an 1
on
-
did
brisk last week with some
In the cotton textile mar¬
kets print cloth demand remained high, while orders for sheetings
and fine combed goods were moderate.
Cotton yarns sold well, but
buyers were selective regarding future commitments.
^Wholesale buyers of foods continued to purchase enough to fil1
day-to-day needs resulting in total wholesale food volume for the
past week being only slighly above the level of the previous week*
Activity in textiles continued to be
in short supply.
-Vi'
167 331.
-
a larger number of closed-ends
than the averages and, conversely, ?.
Consistently,
better
smaller
did
number
'
materials reported to be
This is revealed in the
ratios.
expense
accompanying table:
As to the expense
years,
worse
the
than
market.
ratios in each of the past five
the closed-ends managed to report a lower
ratio to assets.
:
average expense
The
Pitfalls of Taking Average Results
It must be
rooni+t;
Ac
emphasized that these are average^
table J clearly shows in-
Popovic
the
there are well-managed companies with better-than-average
results, so it is evident that even though open-ends cor e second best
groups
c'cse.'-cn 's. Thereprolonged boom in the motor industry, which has con¬
pessimists, reflects the continued high purchasing power fere,, it is a bit pointless to discuss the average results and project it
corporations have not as yet been' of
upon the whole group.
It is a matter of individual selection in either
the American people despite a moderate increase in unemploy¬
willing to call a spade a spade. 1
ment and curtailment to part-time operations in various industries,
type of issue since the performance is not necessarily tied up to the
We predict that eventually com¬
form of the fund.
"
states the National City Bank of New York in its "Monthly Letter,"
pany
after company will take
Results for the period in com¬
dated August, 1949. The latest Department of Commerce report on
huge inventory losses. In many
parison wit'-> t^e Standard &
total personal incomes for May, the article notes, was at an annual
cases
this will turn profits into
Poor's. 90
Stocks
Average—
rate of $212,000,000,000 (seasonally adjusted) or only 2% less than
losses. In a few cases bankruptcy
;i. 1
Number of companies with
the all-time peak last December.
June sales of all retail establish¬
!
will occur. On the whole, we think
! 1
assets of over $10,000,000
ments were estimated by the Commerce Department at barely 2%
that current corporation earnings j
-Better
-W orse
under a year ago which, with allowance for lower prices, means
are
grossly overstated, particu¬
Period ClosedClosed-:■'»
actually a larger volume of goods and services.
larly with regard to potential in¬
'
Including End^ Open-End End Open-End
This high and sustained rate of people's income and consumption,
ventory losses which have not as
1 year
while overall production as measured by the Federal Reserve index
1948 •
4
v
__
14
20
yet been taken.
5 years
has gone off some 13% from last year's peak, continues the "Monthly
——1944-1948 •
11 *
9
-8
9
:
We think that stock prices are
1939-1948
15
10
—
• •
3
Letter," is the kind of thing that can set the stage, for recovery, 10 years
currently very high.
We expect provided new developments of an unfavorable nature ape avoided.
The second point always brought up is the fact that currently
panic selling to drive stock prices
In this situation, the article concludes, the most disturbing do¬
open-ends are available to the buyer at a 7-9% pre-j'u . over assets
■down below the 1942 lows, with at
mestic element is the demand for further wage increases, carrying while the closed-ends sell at a 25-35% discount.
This is used both
least an approach to the 1932 stock
the threat of higher costs and a reversal of the decline in prices which
ways, to condemn and recommend either as investment vehicle.
price lows. Those who think that
consumers generally have been hoping for.
j • r!.
>
• '
' ■ Analysis shows that it is not all in favor of either group and the
the Dow-Jones Industrial and Rail
conclusion really depends upon specific needs of the respective
averages made their bear market THE ASTOUNDING GROWTH OF NATURAL GAS LINES IN U. Si
investor.
\vr,
'
"
•lows at 161.60 and 41.03 are due
" The great network of. gas pipe lines in this country is now more
Assuming no market fluctuation, the relative position is simple
for a rude shock of" awakening.
extensive than all of our railway systems, writes J. D. Ratcliff in to calculate:
^-•
We predict a drop on the part of
Open-End Closed-End H.
^
"Steelways." Up to date, the pipe lines total 231,000 miles, including
the Dow-Jones averages-far below
the spider-like net of small .lines that gather gas from individual
Invested funds
$100
1,
•; $100
-161.60 and 41.03.,
v V) ■;
wells *and those that distribute it to homes. Pipe lines now serve the Working funds (assets)—';
03
Y
133
(25% discount)
*We advise immediate stock sales nation with a iuel that once was largely wasted.
Annual return (at 4% net)—
*1
- 3.72r.'j5.32
^
u . ;
•
The
majority
of the country's
•it does not mean that all of them are worse than
The
founded the
I
•
••••-'
'
.
.
•
■
■
■
.
——-—.—.
•
-
'
—a
100% cash position is the
only
-logical and safe course to follow.
Definite evidence is lacking that
the June-August stock rise has
'culminated.
But numerous clues
impor-
accumulating that an
are
is
•tant top
now
in the process of
In
sharp
a
not-too-distant
in stock
the
forming.
future
break
prices should make its appearance.
We regard the June-August rally
as a
definite- error of optimism.
•
After Labor
Day, the rosy glow of
natural gas doubled between 1923 and 1935
1935 to 1945 and is expected to repeat its
doubling performance in the coming decade.
•
l •
<
\
The consumption of
and doubled
more
utility industry.'f
used
it
realization
the
by
statistics
is
v
be
likely to
both
a
For
position.
cash
100%
a
the mar¬
In 1921, 1932 and 1942, stock
Sell all stocks at once, at
-
ket.
purchases rewarded holders with
several hundred percent profit in
of years. We advise
that cash be held in anticipation
a
short period
buying juncture as favorable
of
a
as
1921, 1932 and 1942.:
•
,>•
activated
picture
of
the
investors
Intermediate-term
all-cash posi¬
tion.
The
trend is down,
having turned down on the Dow
theory bear market signal of Sept.
27, 1948. That signal advised stock¬
holders of a drastic reduction in
■
.
primary
stock earnings, and a severe
market in stock prices.
-advised
proach
businessmen
ol
a
business
•that will prove to
the
panic of 1932.
bear
The signal
of
the
ap¬
depression
be as severe as
Current Dow
theory " indications
"bearish.
are
highly
gas
day
soon,
t:
93
•
'•
^
(less 1% comm.)
100
x
%
market and discount
remain fixed the advantage lies with the closed-end issues both in
terms of dividend return and realization upon sale.
r;
. ;
T>
If the market alone fluctuates the advantage continues with
the closed-end because the assets would go up and down at equal
pace.
However, the open-end stockholder is always assured of its
exact asset value, whatever it may be, while the closed-end holder
may have the leverage of flexibility of the discount to contend with
which may emphasize market losses, but also may increase gains by
:
"
'
(Continued on page 33)
- , v
■
-tt
It
is
obvious that if we assume that the
•
v
industry, this
Some
populated
millions of city
lines from rural sections to the
other pipe
centers may convey milk from the creameries to
.
consumers,
yVv--
,
'
;
STEEL OUTPUT FOR THE CURRENT PERIOD
LEVEL SINCE WEEK OF JUNE 13, 1949
86.7%
SET AT HIGHEST
The better tone in the steel iharket is still here this week and
it looks
as
Interested, Too!
We're
That's
why we've just prepared a
Niagara Hudson Power
COMMON STOCK
though it would last for many more weeks to come, barring
strikes, according to "The Iron Age," national metalworking weekly,
in its current summary of the steel trade.
Steel salesmen who a few months ago were offering customers
In the past
few weeks this has been getting harder to do because new business
has been heavy enough to stretch many delivery dates into October
or November, says the trade magazine.
Some segments of the metalworking industry have experienced
a revival of confidence.
Purchasing agents are back to normal for¬
ward buying in most lines.
In Chicago, which for the past several
months has been the nation's largest steel producing area, mill sched¬
ules are generally filled through September, some products are
booked solidly through October and one large mill has no cold-rolled
sheet space open until December.
For the time being, states this
trade authority, purchasing agents are not going to take any more
chances on letting inventories run as low as they were a month ago.
Not all segments of the metalworking industry are sure of the
future.
The Administration's policy of not letting the right hand
know what the left is doing—of simultaneously attacking inflation
(Continued
their promises.
on page
31)
special report
on
WHEN IT REACHED
OF CAPACITY
prompt shipment must now deliver on
•should continue an
natural
leading executives in the "Oil and Natural Gas" Industry.
for
should
investors
Long-term
maintain
one
investors.
and
an
powerful
:
—
Advantages to the Open-End Holder
department would like to refer our readers to the June 21 issue
of "The Chronicle" which featured the comments of the country's
not favor¬
critical
businessmen
gas was
diameter, became available, making it possible to operate
centrifugal compressors.
/
.y
The coming autumn period
able.
1891
in
current
that
are
The Chinese piped gas through bamboo rods and
before the Christian era.
In 1821,
heat salt evaporators
piped to a hotel and several stores in Fredonia, N. Y.,
piped for the first time from northern Indiana
to Chicago—a distance of 120 miles. The great gas lines in use today
came into existence when stronger and bigger pipe, up to 24 inches
and in
'
'business
to
natural gas was
vacations will be replaced
summer
pipe lines now supply the; country
than five times the energy produced by the entire electric
•Mr. Ratcliff writes lhat "Gas
with
Realizable in market
again from
This
report
thoroughly
tions*; earnings, dividends
Hudson
.
.
should give you a
.
company as
Dealers
No
V
J
clear picture of th^ /
examines
an
are
charge, of
the
opera#
a"d outlook for Niagara
investment prospect.
invited to writ?
or
call for
a
copy/'
course.
Trading Depart mpnt
Merrill LynCh, Pierce, Fenner
70 PINE STREET, NL w
-
-
Offices in
^
^ oRK 5, N. Y.
Cities
,
«
THE
(746)
"Is Bigness
C
^
.
COMMERCIAL
FINANCIAL CHRONICLE
&
Badness?"
|
from Washington
By HAROLD C. HASKELL*
Defending large corporations as promoters of prosperity and economic expansion, Mr. Haskell attacks
shifting interpretations of Federal anti-trust laws a? handicapping nation's business. ^ Holds business ^
today is on much higher plane than quarter-century ago, and public's ideas of what business executive
is and does is out of date. Says no business has dificulty in finding competitors and denies there., if /
essential opposition between big and smaM businesses or that small* businesses are being eliminated.
Urges joint selling job by big and small business to keep public informed of our economic system.
I feel I must
warn you gentlemen that von
*re in bad company; that you are con¬
representative of that repiehensible, s'inful section of the American people
Big Business. Were this a country in which the government were less broad-
sorting with
known
as
mi
all
to
the
for
they contribute to make it
tle
American
ap¬
that
parts of
some
our
govern¬
the
for
that
I
there
has
that ones:
a
question
to
good.
whether
Clarion
as
raised to say that they
are bad for the country, that they
threaten
our
economic
system.
voices
large
organizations,
Harold
anti-social
C.
are
These voices
Haskell
raised not alone
are
that
against du Pont, but against many,
bad for the country.
even
; j
most, large and successful
is a fair question to ask what companies.
V
that we are accused of doing,
Question ef Bigness Must Be
we have come to be so attrac¬
tive
a
7
It
it is
_
*
free and the
an easy, uncomplicated thing
straight-forwardness and fair deal¬
ing the most profitable assets. No longer can a
-.7/
..
cited
have
Aluminum
the
and
to do today
is to discuss with
who
Answered
target. I must report to you
my conviction that at the base of
it all is the single fact that we
*
'
The
time
;
is
coming when the
American
people -X must
answer
have been successful. The du Pont that question, and it is no idle
Company has proved itself very statement to say that upon that
able indeed at supplying things answer will depend the future of
the American economy wants, and our country.
>
,
!
at
prices within the economy's
It may be that this comes as
ability to pay.
something of a shock to you, un¬
In the course of doing this, it
less it happens that some of
you,
bas contributed much to the ever-
like me, work for large companies,
rising American standard of liv¬ *nd arp aware of current trends
ing.
From its research labora¬ in the United States.
.
tories
have
first
come
general
neoprene,-
purpose
the
synthetic
;X I
you
who
are
issue
business
small*
and
business
—
sometimes finds that it is violating
the anti-trust laws. This can hap¬
pen in one of two ways. , Sometimes-^not
very
often—there is
willful and knowing violation of
the law by men who are willing to
take a chance that they will > get
away
with it, or by men who feel
by the time the government
catches
with them they will
not in that position
if you feel
^rubber, nylon, moistureproof .cel¬
have made enough money to make
that my words are over-drawn,
lophane, the lacquer that broke
the gamble well worth while. and that I am exaggerating an is¬
the bottleneck slow-drying paint
It would be foolish to deny that
sue
for
whatever
motive
your
had imposed on the automobile
there are people like that in big
minds might supply.
I can only
industry. These are only a hand¬
business. After all, the law of av¬
ful of illustrations from a list that say that I devoutly wish this were
the case, for the issue .has been erages applies to businessmen as
would cover many pages.
well
as
;7777!
everybody
else.
This
drawn, and drawn in unmistaka¬
In the course of doing
means that you are going to find
this, it ble
terms, both by the Department
has created many thousands of
a certain
percentage of business¬
of Justice and the courts.
jobs that never existed' before,
men who are crooked, or.
stupid,
The broad question is whether
both within its own organization
just as there are lawyers and gov¬
or not bigness is
and in other companies.
helping or nurt- ernment
Pqt that
employees who give the
way, it sounds rather impersonal. ing the country. It was put with majority
a
bad
name
through
Let me put it another way: thou¬ considerable clarity in the Alumi¬
their ill-considered acts.
num
sands
of
Company case, in which the
American -men.
and
In cases like that, no represen¬
basic issue was that through the
women today have
jobs—and good
tative of business, big or
small,
jobs, too—today who would not great efficiency of its organiza¬ should have
any sympathy for the
have them were it not for du Pont tion, it had reached a point where
offender, for such people do more
it dominated the aluminum indus¬
research and du Pont
production.
than the Communists could ever
/
Iri the course of doing this, du try. The court specifically stated hope to do to tear- down this
'
-
•
up
•
*
Pont created opportunities for the
existence
of
hundreds, perhaps
that it did not matter whether or
not the monopoly had been ob¬
thousands, of small businesses. tained by legal or illegal means,
Certainly it is true that thousands that the retention of the monopoly
of small organizations
ness
today
because
are
they
in busi¬
sell
to
-du
Pont, or buy its products and
either incorporate them into fin¬
ished products, or market such
finished products to the ultimate
consumers.
7
/
itself
If
in violation of the law.
was
this doctrine
holds—and the
evidence
is that it will—then I
that under the law of th^
take it
land
you
can,
by
perfectly
find that you are
automatically in
violation of those laws. There
thus
Comfortable, to enjoy,
as
you
and
things
this,
possi¬
commbhplace,
would
have
known
even
oirs of the
•
to
s
everyday
that
luxuries
kings and
un¬
emper-
past.
It has been possible for duPont
to do these
la
been
things because
du Pont
has
done
contrary, it
honest
i$
applied an automatic check
to growth.
At the present time it
that 6o% is about
seems
as
far
as
can safely go, but" the per¬
centage is less important than the
establishment' of
the
principle.
Once that is done, the percentage
can
be changed to whatever the
so
much for
all.
us
to
seems
should
that
system
businessmen
trialists
me
and
wish
the
On
that
indus¬
govern¬
ment all
success in convicting and
punishing such law violators.-..
•
.
Shifting Interpretation of Anti-
means, obtain a certain percentage
of the business in an
industry and
And in the course of
doing
du Pont has helped make it
economic
the
legal
ble tor American men- and women
Id have more and better posses¬
sions, to find life easier and more
'
American
Trust Laws
'
It
far
to me,
seems
the
who
themselves
difficulties
with
the
believe
number
that
of
of
people
involved
in
Anti-Trust
civil
and
cause
by far the largest
anti-trust
suits
come
businessmen
government thinks it ought to be.
indictments
about
enter
be¬
upon
a
course of action in all good
faith,
qualification.
If only to discover that the
Depart¬
have the protection of a pat¬ ment of Justice and the
courts
There
is
one
large and successful company you
can take
big risks. By long ent position, then you can be the view as a serious offense this year
steady growth and a policy of re- sale producer until the patents ex- something that was
accepted in
a
that
mass
of
of government
of cutting sharp corners
regulatory agencies.
He
has
vast
politicians.
finds
that
-
.
the
government, aside from
rigamorale of red tape with which he
that
ner, grocery or drug store stage, he must get iri
goverhment buying lopprogress, if not to survive/ This is not
simple as just marking up your prices on the show window from
day to day. It takes what a few years ago would' have been deas sharp
business practices but which in our evolution to
scribed
the better
life, have
come
to be quite acceptable, certainly expected.
A builder seldom goes these
days to his local banker and bor¬
the money with which to build an office
rows
apartment.
building,
home
a
government puts up the money and acquires a knowledge of how
to write in costs for the trouble he will have with this government.
An enterpriser- with a money making idea should have a way of
Investing part of the earnings in pire,; After that, if you don't see dustrial practice last year.
business, this company has fi¬ to it that there are competitors in
I confess I do not know
tures
small
enced
resources
to invest in
ven¬
far
beyond the scope of
organizations. It has experi¬
and
skilled
experts in re¬
search and production to
put the
money to Work.
\
I believe,
as do my fellow work¬
ers in the du Pont
the field, and that these
competi¬
tors have a percentage of the busi¬
ness
satisfactory
ment,
you
risk
to
the
violation
govern¬
the
of
law.
a
lations
that
tive
act
way as
to avoid law vio¬
come
than
by
from posi¬
changes in the
less
interpretations of the law.
Nor does it matter whether your
are good or bad for the
operations
pre¬
cisely how this could be handled
in such
are
There
great practical difficulties ly¬
way of any solution. I
nilhlif
public.
*An address by Mr. Haskell be¬
fore the Rockland
County Rotary
minum
imagine any business these days that doesn't
either directly or through its trade association or its
to deal
Washington representative with some government agency and more
likely several agencies. A fellow launching a new business, and
going ahead in ignorance of the day to day happenings in the
Washington bureaucracy would probably find in less than a month
that he was in\ violation of regulations all the way from PXYV
that
whether
Club, Rockland, Me., Aug. 19,1949. benefited
from
or
Congressmen voted them-' \
the scores of requests that
come
daily from their constituents begging that agency X, for
Heaven's sakes, be made to take action on their application for a
permit, that a cease and desist order that had been hanging over
their heads for months be removed, that agency Z say what it
intends to do about their bid to furnish the government-1 DO tons
of barley seed or 1,000 gallons of varnish for swivel chairs.
•
'
>
ago the Senators and
clerical help to deal with
extra
All
town
over
this is written
as
small minded Bureaucrats
are
Business Mail's importunity before them, grinning per¬
versely and showing it to their fellow Bureaucrats with the observa¬
tion: "It'll do this bird good to squirm for awhile," or conjuring up
something bad about the Business Man that he can pass out to a
gossip columnist.
holding
a
The
Senators
and
Congressmen, even with their extra clerical
up trying to get any light or action
of the Bureaucratic maze. They gladly switch their constituents
help, have pretty much given
out
to a five percenter or somebody who is working at the business
getting action in Washington.
f
over
of
The
investigation of the five percenters has
that General Vaughan could get action.
revealed pretty
Either through
wheedling or browbeating he seems to have moved many a Bureau¬
crat who had been sitting on a case for months. I understand he was
quite persistent in getting action for Truman's constituents when the
latter.was Senator and Vaughan his secretary.
From his White
House position he has acted with more authority, of course. So far
as I can tell he has considered he was still getting things done for
Truman's constituents and they now embrace the American people. 7
clearly
who
me
that
a
monument of some kind should be built to a
It is utter
it is an outrage that a citizen has to
be acquainted with "men in high places" to get his just dues.
It is
an
outrage that he should be dependent upon the whim of the
Washington bureaucracy for his daily bread.
man
nonsense
can
get things done in Washington these days.
for
critics
The American
/
like
government
know
what
larged and
ington.
;
to
say
people have docilely permitted a big, Tammany-'
straddle them. New York City business men
to
living
more
under a Tammany government is. Greatly en¬
powerful, its counterpart now rules from Wash¬
a
>
-
<
-
General Vaughan
doing favors for people is relatively one of the
brightest spots I have seen in the picture. It may be that I am
just perverse.
But certainly the General Vaughans are not the
disease.
It is something far deeper that needs treatment. 7
7/7
New York Stock
Exchange
Weekly Firm Changes
A. W. Graham Joins
Central
f^necial
The New York Stock Exchange
has announced the following firm
changes:
7
-
-
Herbert F. Boynton and Elwood
to
Siegel
as
of
&
Silver
Aug. 12.
was
dissolved
Republic Co.
to
T-m
OMAHA,
Graham
with
Financial
NEB.
has
Central
with
Cruttenden
he
Ch
onicle)
Arthur
I
W.
associated
Republic Co., FarHe was formerly
Building.
Douglas
—
become
nam
Boynton will retire from part¬
J
be
attributed
either
the public cannot
operations of
(Continued on page 29) "
not
the
t;nil
/
"A' few years
selves
which is to say, the I mention the point because it is imTil <-)
Unn/j
i'n
nnvfonf
Judge Hand, in the Alu¬ portant that you understand that nership iri Laird, Bissell & Meeds
on Aug. 31.
7
decision, argued in effect the majority of anti-trust actions
A
;;
42356 to ZLOV 56421.
D.
CtC\
.
711 is hard for me to
have
ing in the
Company, and customers,
,•
!
getting to the RFC,* arid; you just/don't-walk- into the RFC and say
"here are my credit cards," If you want to raise money by. .public;
subscription you've got to deal with the SEC.
-\
the
nancial
X
or an
He becomes conversant with the various torms^ in which
the
.
Division, or the Federal Trade
Commission, do so because of
shifting interpretations of the law.
I
the knack
that
on
however, that by' 7 7 It strikes
larger number
find
knowledge
thorough
must cope, is in the market for fairly everything
is sold, so if he has gotten beyond the cor-
Carlisle Bargeron
you
involved, and to
present to you my thinking on
that issue.
7
X X'
I should be the last to deny4hat
big business—like medium-sized
that
could not blame
broad
the
are
He
the
•
the
fair
got to be a politician or to have friends or agents
as
only to show you that what I
talking *about is no mirage. I
am
interested in it only as con¬
firmatory evidence. What I want
a
have
to
with
case
am
on a
a
■■
have
to
.
,
I
to his customers at
7-.":'...■' ■. • •
77 .7More than likely he has got to be a schemer,
profit.
If this sounds
law-violator.
and selling them
them
,
a
just go about selling his wares
man
system of paying so much to the manufacturer for
baa
confusing to you, think how conr
fusing it must be to me, .whose
business it is, among other things,
to advise my associates on anti¬
trust matters.*
*
brave
with honesty,
And so, under contemporary le-
be
which
from
business
trusts" and condemn
it forbade all.
7/r
"good
possi-|
in all seriousness
arisen
country
things are
these
and
other
and
him
,
this
in
company
those of many
as
for
United
the
for.
Yet I tell you
of
which
work,
people, that they bolster
,
ment view the
activities
defense
States to1 gal interpretations, you can reach
shoulder
the
burden
of
world' a certain position through perfect
""""
i,L"
1
£
A
leadership that events have thrust ly legal means, a position from
which the public benefits, and still
upon it.
.
ble
be lit¬
doubt
General
Vaughan's attorney I could make a ringing
he might emerge as a National hero
instead of being the subject of criticism and jibes. *
*
This defense would be based on the fact that no longer is the
business of making a living in our lend of the
were
that these things the company was irrelevant, uonadvantage of the gress, he said, did not condone
the strength of our economy,
there
I
——
are
of the News
By CARLISLE BARGERON
If
I hope you do,
as
for you to lis¬
ten to me talk,
pears to
Ahead
a
nded,
it
might actually
be
dangerous
I
Pont de Nemours & Company
General Counsel, E. L du
„
25/1949/-
Thursday," August
i
&
Co. and
& 'Co., Inc.
conducted his
own
business in Omaha.
John
In the past
investment
*
(747).
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4832
170
Volume
%■
lead to problems of eliminating the ob¬
development. There stacles which stand in the way of
is need for investments in other the investment of American capi¬
countries and in other industries. tal abroad. It is essential that the
The United States and the for¬ task of removing such obstacles
vestments do not therefore
A
well-rounded
Program to Encourage Investments Abroad
By HON. JOHN W. SNYDER*
Secretary of the Treasury
V I
I
*
j
/
t
Speaking as Chairman of National Advisory Council, Secretary Snyder tells House Banking Commit¬
tee proposed bill to permit Export-Import Bank to guarantee U. S. private investments abroad is im*
plementation of President's Point Four Program and is essential to overcome obstacles to existing for¬
eign investment situation. Cites principle obstacles as: (1) anti-foreign sentiment created by unfavor¬
able American experience with foreign investments; (2) growth of nationalization ideology abroad; V
(3) foreign political instability; and (4) prevalence of exchange controls.
should
attacked
be
both by
for¬
eign countries seeking economic
development are thus concerned
with two related questions:
eign countries and by the United
States.
Foreign countries must,
Why were not these investments
greater in volume and better dis¬
however, accept the major respon¬
sibility for clearing the existing
obstruction to a broad and bene¬
geographically?
and
ficial flow of private capitals
to increase
It is a commonplace that Amer¬
investments and
ican
private capital
will flow
broaden their distribution?
abroad more freely and produce
The answer to the first question
I am happy to appear before your Committee today, as Chairman of the National
better results if it is encouraged
relates to our own as well as to
Advisory Council, to testify on H. R. 5594 which would amend the Export-Import Bank Act foreign'conditions. An important than it will if it is coerced. Ac¬
of 1945 to vest in the Export-Import Bank the power to guaranty United States investments point is; the rather small differ¬ cordingly, although we recognize
abroad.
At
ence" between
domestic and for¬ the right of any country to insti¬
servation projects,'on the other ihrough public flotations.
These eign yieldsion equity investments. tute necessary security measures*
the
outset
I
should like to
2>andv are , predominantly - public defaults, some of which have still Hence, there is little incentive to foreign governments must recog¬
nize that the right to do business;
rather than private.
state
that
in
In some in¬ not been cleared, led to a wide¬ invest abroad particularly so long
distrust
of. the
credit¬ as formidable obstacles to foreign in their countries on reasonable
stances," "public ~ investments
in spread
my
opinion
these fields are desirable to facili- worthiness of
foreign countries, investments continue to exist. In¬ terms, including the right to co»the objectives
trol and manage one's investment,
of
the ; pro¬
! ta*e
private investments m the even ."ofJ those whose record of vestments that have been made in
is very important to our potential '
other fields.:
These facilitating payment continued good. For this recent years were made largely
posed legisla¬
investors.
Legislation in- foreign
I investments' in. the public sphere
and other reasons, there have been in: countries and in industries re¬
tion •; are
of
countries requiring that loeal citi¬
since. 1930 only a few offerings of latively free of such obstacles.
are of the type normally expected
the h i g h e s t
zens shall hold a majority of the
..Obstacles to the investment of
to be financed through the public foreign ^'securities in the United
imp ortance
common stock will, in general* be
sale of local government ^obliga¬ States?" The foreign lending that private capital abroad.1 are most
and I urge its *
a significant deterrent to prospec¬
tions or through such institutions has taken place has' been princi¬ common in underdeveloped coun¬
enactment;" :\v
tive investors.
At the same time
tries; and spring from four chief
As you know,
as the International Bank for Re¬
pally intergovernmental,
it is recognized that our investors,
construction and Development and i; Direct investments continued to causes, which influence .the action
this
legisla¬
must afford reasonable opportuni¬
be made although the net out¬ of
foreign governments.;
These
tive
the Export-Import Bank;1"'
proposalties for foreigners to participate in
•
:,.y
t,
flow of United States capital for are: j
is
designed
the management and control of
| Investing abro'ad is' not; a new
John W. Snyder
(1) -The anti-foreign sentiment
to
■the'that purpose was also greatly re¬
implement
activity
for
investors
iii the
their enterprises abroad.
Y
"
duced
in v part
during " the '30s. ; During generated by the regrettable ex¬
the
country? It attained' some tprbihiAnother very important consid¬
Point IV Program the President nence as
EWorld War 11/.withdrawals of perience .of some foreign.countries eration to
early as 1900, especially
persons making foreign
with investments from abroad;
proposed in his -inaugural ad¬ in mining enterprises in Latin capitalfrom
such investments
investments is the right to convert
(2) The growth of ideologies fa¬
dress. f This program is intended America and
Canada, but also in. abroad exceeded new capital put
the income from their investments
voring state ownership and con¬
to
aid the efforts of undermanufacturing plants in Canada ' in. In 1945, however, new direct trol of
into dollars and to transfer an.apindustry;
"
developed
^areas^of ^the world to an(j Europe. During , and after investments againto $100 million.
became impor(3)- The existence of political priate share of the dollar proceeds
increase
their
productivity and Wo^d war I, American invest¬ tant, amounting
to their own country. This prob¬
Since that time these investments instability and extreme national¬
living standards-, •
ments abroad assumed large pro¬
lem arises from the existence of
"YI'-,
have ..increased rapidly, reaching ism; and
; The
economic development is portions, particularly in the form
exchange
stringencies and ex¬
(4)' The prevalence of exchange
$660 million in 1947 and $800 mil¬
closely tied to the process of cap¬ of the public flotation of foreign
controls stemming from economic change controls under conditions
lion in 1948.
These latter totals
ital investment, for it is essential bonds in this country.
which make it difficult for coun¬
Through¬
Y. <'7ll .
exceeded the highest, figures difficulties.Y'".Y •
that the means of production be out this period direct investments
tries to obtain all of the dollar
An additional; deterrent to the
available
before
a
country's —that is, investments which in¬ reached in the previous high years
exchange required for their needs, of the late 1920s, but the invest¬ investment
of ; private; capital
standard
of living can
be im¬ volve a measure of control of
ments
were
concentrated
geo¬ abroad is the fear or threat of war. But, while recognizing the seri¬
abroad — were
also
proved. In the past few years in¬ enterprises
ousness of this problem in many
vestment has been proceeding at a made in substantial volume.
The graphically in Venezuela, the Near ; ,As to the question of what can
very slow rate in many foreign depression of the early '30s and East and Canada and, to a sig¬ be done to increase the volume of countries, private investors .need
countries
because
of
numerous
the assurance that only the essen¬
the
defaults
on
foreign
bonds nificant extent, in only one indus¬ investments Y and ; to Y distribute
obstacles.
Some of these obstacles
Although sub¬ them more broadly, we must ad¬ tial needs of a country will re-.
which occurred at that time put try—petroleum.
can be removed only through ac¬
dress ourselves primarily to the
v
(Continued on page 37) \
tion
of
the
particular
country a sudden stop to foreign lending stantial in amount, these new in¬
concerned.
Others, however, can
tributed
can
be
volume
done
of
What
the
*
.
.
.
•
t
„
.
,
'
1
'
be
by action of the
This legislation is
abrogated
United States.
designed to carry out this action
by the United States and I would
This announcement is neither an offer to
like, therefore, to address myself
to
the particular financial -con¬
siderations that make this legis¬
The
sell
solicitation of an offer to buy any of these Bonds,
nor a
offer is made only by the Prospectus.
- Y
;
,
lation necessary.
Financial Aspects
The
developed
lasting
their
of
development
areas can
only
own
these
if
resources
areas
major
the
.
••-vl
;/IV'
-
-I'V.4IV; V:"''
I
-*•"
Bonds
local sources by the
countries themselves.
even
••
Twenty-Five Year
development
from
II
-
but it cannot assume
role in financing the
Most of the capital for
must be
provided
foreign
program.
I III
Government of Canada
On the financial side,
outside capital can help to speed
process,
"
use
advantage.
the
Ia
yI•
the fullest
to
II;:|I||I;1;|Y:
$100,000,000
under¬
be sound and
This is true
underdeveloped countries
in
Dated
Due September 1, 1974
September 1, 191,9
only because the larger part of
the cost of any development pro¬
not
is for the purchase of local
labor,
but also because capital obtained
gram
materials and the wages of
by
in
Price 100Vi% and Accrued
Interest
borrowing abroad may result
unduly heavy demands on the
fqggign exchange resources of the
dentor countries.
( I It is the policy of this govern¬
ment that foreign investment for
desirable purposes should be
undertaken through private chan¬
nels in so far as possible.
This
Copies of the Prospectus may be obtained from only such of
offer these'Bonds in compliance with the secu rities laws
policy has particular merit in con¬
with
nection
because
ment
economic
technical
own
of
in the
know-how.
assistance
industrial
This is notably true
with
private enterprise also hav¬
many
fields,; such as highway
construction, irrigation and con-
Secretary Snyder
before House Committee on Bank¬
and
Currency,
D. C., Aug. 17, 1949.
SMITH, BARNEY &
HARRIMAN RIPLEY & CO.
Incorporated
'
.
;
f"
■1 : •,; > Y;;-;
WOOD, GUNDY & CO., INC.
.
DOMINION SECURITIES CORPORATION
developments.
Other
ing
Y.
endeavor
important place in
*Statement by
CORPORATION
y
extractive
and in the
service
fields of
utility
THE FIRST BOSTON
in the manu¬
and
facturing,
ing an
public
MORGAN STANLEY & CO.
develop¬
investment by pri-
t:yate enterprise carries some of its
form
the undersigned as may legally
of the respective States.
Washington,
A. E. AMES & CO.
•
August 25,. 1949
lncor[n>ra t ed
McLEOD, YOUNG, WEIR
Incorporated
8
(748)
THE
»
COMMERCIAL
&
FINANCIAL
CHRONICLE
I
The President's Attack
Collective Bargaining
on
Dealer-Broker Investment
By IRA MOSHER*
Chairman of Finance Committee and former
■L<
President,
National Association of Manufacturers
Industrialist maintains government-directed arbitration of
ing, surely undermines collective bargaining which is
steel union's tactics in
1946, he
it of
accuses
Recommendation# and Literature
;
from statism. Recalling the
the Presidential panel as tools to
trying to
no#
use
Scores steel company managements for sub¬
mitting to unwarranted Presidential pressure.
Airline
alysis
panies
our
tion
to
the
denied.
was
The
bers
mem¬
of
the
NAM
are
dividual
n
union
he
15,000
some
late date is for the board
^et
me
ing companies
As
located
most
hrotighout
the
nation
all
in
sist
of
ivi usner
Me
of
companies
70%
of
all
not
nies
all, of the steel
involved
here
the NAM. '
of
bership
world's
fore¬
that
we
are
deeply;: conabout the preservation of
institution of collective bar¬
lur
are
or
gaining.
,1
Among our
are
of these
stone
a
,
in
cast
a
is
bound
to
widening
effects
and;
water,
affect
every
NAM
wide
man,
is
ing.
It
when
nation¬
the
.
.
,
We adopted that policy not be¬
we
wanted to make life
cause
bargain¬ easy for labor organizers nor be¬
ing. NAM does not negotiate for cause we thought that
every plant
any
of its members and would should be organized.
We adopted
not do so even if requested.
Our that policy because we came to
appearance here is motivated by the conclusion that if the
major¬
the vital influence wh'ch the out¬
ity of the employees of any em¬
come of these
hearings will have ployer wanted to be
represented
upon
the
entire
economy
and by a
union for purposes of col¬
upon the institution and practice lective
bargaining, it was up to
bargaining.
management to do its part toward
making collective bargaining
Not Representing Steel Companies work.
Otherwise, that aspect oi
I want to make it c'car that
not
are
speaking
tives
of
fact,
in the
the
cou
companies.
tf
se
the
we
is
not
that
of
the parties to the di pute.
about
this
mailed
of
to
We
feel
rra'ter
each
members
of
p
that
The choice
we
have
nation
of
the
the
convinced
pointment of
p
in
was
this
case
wrong.
We
do
that will be the
not
believe
But
case.
convinced that if such
mise
wreak
economy
ous
We
a
recommendation
would
with
convinced
a
favor
are
the
1 See, for example,
of June
in
i
our
fore
the
United
York
Steel
States
Mosher
Industry
Court
of
of
genuine
'oluntary
because
onl>
the
NAM
collective
collective
it
is
a
in
bar-
bargaining
reasonable
and
settling problems
differences.
believe
The
that-the
American
proceed¬
ings before this panel are part and
^rcel of collective
bargaining. On
be¬
the
Board.
contrary,
it
is
our
profound
conviction that these
are
1
the
Bay "Street,
at
the
of
root
When
proceed'ngs
antithesis,^ of collective
bargaining.
are
1,
Mining &
Hudson >Ba£
Mining
Smelting
*
S.':
Cafl^^^nthly
'
-.y
,
commercial
«.
-
MimikF'nf
collective
208
^Companies—
edition
of
of sugar and
reference
manual
sugar, companies-
contains special section giving de¬
tails
pertaining to the new do¬
contract, trading in which
and
to
be
repre¬
by his association for col¬
bargaining purposes, he
delegate to his association
started
the
on
Sugar
manual
York
New
Exchange
sent
Coffee
July
postpaid
on
lective
of price of $2.00—Farr &
must
Wall
the
of
18—
employees, similarly,
of
Y.
—|
Industry
—
instead
sonal
consider only
the imper¬
applicable to
generalities
entire industry.
an
Box
Co.
Stoddard
&
—.
Wil¬
'••••;
New Orleans Public Service Co.
Northern
ice
Indiana Public
Detailed
—
Serv¬
memorandum
—
Geyer & Co., Inc., 63 Wall Street,
New York 5, N. Y.
Also available is
tabulation'of
a
preliminary operating results for
insurance
companies
of
as
June
30.
Oregon Portland Cement—Late
data—Lerner & Co., 10 Post Office
Square, Boston 9, Mass.
1949-50
Winter
Outlook—Eastman, Dillon & Co.,
15
Broad
N. Y.
Street,
New
■•h::
.
York
5,
Security First National Bank of
Los Angeles
Over
Stock
-
the
-
Index
Counter
—
Jackson
—
&
Industrial
Booklet recording
10-year performance of 35 indus¬
trial
Circular
Paine,
Curtis, 25
Broad Street, New York 4, N. Y.
Webber,
are
particular employer and must
a
Folding
receipt
Co., 120
Street, New York 5, N.
Oil
no
longer concerned with the spe¬
cific problems of the employees
National
Circular—Day,
Chicago —analysis—Ira Haupt & Co., Ill
Broadway, New York 6, N. Y.
if
is
Railroad Co.—
study
ompany,
26th
employer
Missouri Pacific
Conn.
-New
mestic
an
Missouri Pacific
Analysis —
Dreyfus & Co., 50 Broadway, New
York 4, N. Y.
ical develop-
country, it
loses
its
fundamental characteristics.
For
sented
Broad¬
liams, 95 Elm Street, New Haven,
;
Colombia-Bolivia
;or
entire
an
•
letter— The.. Canadian Bank of
Corrtfn^^TojmtQ, Ont., Canada.
idJ...
& Co.,
120
New York 5, N. Y.
way,
Analysis—Vilas & Hickey, 49 Wall
Street, New York 5, N. Y.
;
,
.
'
ori
Smelting,
&
Co., .Noiand* Mines.
' >»•
14,
Co.,
Ont.,
brief data
Consolidated
I
Angeles
—
Also avafldBle
bargain¬
collective
&
Toronto
Canada.V^^
«•»»■%•■
Los
—
stocks—National
Quotation
Bureau, Inc., 46 Front Street, New
York 4, N. Y,
Southern
Co.—Circular—Bate-
Eichler
man',
Spring
&
Street,
Co.,
Los
South
453
Angeles
13,
Calif.
Perils of Industry-Wide
Systematic
Bargaining
Instead of
employees
their
common
wide
of
employer and his
sitting down to solve
an
problems, industry¬
bargaining becomes
oolitical
*
which
level
then
responsi¬
they
not
are
*
American
negotiat¬
longer have the
no
Detailed
implementing
Bros.
1-'.
*
Cyanamid
Company
memorandum
—
Stein
Boyce, Starks Building
Arcade, Louisville 2, Ky.
available
General
on
are
Cable
memoranda
have
to
and,
for
consideration,
of
essence
It
f°r
is
in
NAM
ated its
lieves
to
resort
is
the
bargaining,
dissipated.
that
that
reason
the
that
where
conducted in
A.
Co.,
115
N.
Y.
leaflet
on
6,
E. Staley Manufacturing Co.
—Revised
Co.,
1342
analysis—Newburger &
Walnut
Street,
Phila¬
delphia 7, Pa.
United Light & Railways Co.—
Booth Fisheries Corp.—Circular
—Swift, Henke & Co., 135 South
La Salle Street, Chicago 3, 111.
appraisal—Gerstley, Sun&
Co., 213 South Broad
Street, Philadelphia 7, Pa.
stein
United
Clinton
Industries—Circular—
DeHaven & Townsend, Crouter &
Bodine, Packard Bldg., Philadel¬
phia 2, Pa.
curities
States
&
Foreign
Se¬
Corp.—Analysis—Bacon,
& Co., 39 Broadway,
Stevenson
New York
collect've
bar¬
6, N. Y.
a manner
mutual
which pro¬
understanding and
Diversified Investment Fund
—
Descriptive material
—
Hugh W.
Long and Company, Inc., 48 Wall
Street, New York 5, N. Y.
DIVIDENDS
cooperation between management
and workers and which
fully pro¬
tects
the
public
interest.
The
NAM believes that
industry-wide
bargaining
tends
a
May of this year reiter¬
oolicy that "the NAM be¬
gaining is in ef"ect, it should be
motes
is
Revised
disc^ssmn
which
collective
becomes, largely
one
Both
help and the
face-to-face
of
but
them.
encouraged
are
government
value
made*
uoon
available
Company, and
Laclede Gas Light Company.
voluntary agreement which they
that is imnosed
Company—Memoran¬
Goodbody
&
Broadway, New York
—
Texas Eastern Transmission.
*
&
Also
Southern
dum
Also
semi-
a
the agree¬
negotiate. The
people who carry out the agree¬
ment at the plant and
company
a
waukee 2, Wis.
—
ing
Savings—Discussion
planned
program—Loewi &
Co., 225 East Mason Street, Mil¬
jockeying for advantage.
The parties who do the
a
to
on
defeat
a
rat'onal
basr
these objectives."
GALORE
Douglas Oil Co. of California—
Analytical
report
—
William
R.
Staats
Co.,
640
South
Spring
Street, Los Angeles 14, Calif.
I raise this fundamental mat+er
ersibie way of
ind
House, New
City, Aug. 18, 1949.
strikes
general.
New York "Times"
Mr.
ra¬
The American
people believe in
seri¬
14, 1949.
♦Statement of
Unfortunately, the
position
Metal-Shares—Analysis of
outlook—^Milner, Ross
•
Avenue,
Calif.
Long Island Lighting Co.—Cir¬
330
•
Grand
cular—Ernst
That is
Ahy-iattempt to delegate
H.
Street, New
impose upon a third party the
responsibility for such consider¬
ation,
discussion
and
decision
our
naming is in conformity with the
of the American public
way the situation can be saved at
article
not
position
bargaining
that
sound
col¬
The
that
results,
havoc
is
selfishness,
history of hampering
be
we
It
or
our
opinion, it is attempting to
utilize tbis panel as an instrument
of :ts grand
strategy.
compro¬
and would strike
blow at collective
are
will
statism.
bar¬
embark
we
lective bargaining and is
nullify¬
ing collective bargaining now. In
News¬
issued.1
of collective
essence
parties
either this
make collective
or
or
case
a
freely,
recommendation
gov¬
tional union involved in this
both beror« and after the
appoint¬
ment of this
panel, that a com¬
promise
to
clear:
enlightened
position.
ap¬
speculated
control
altruism, that has motivated
'act finding board
lave
papers
that the
road
and
that letter is attached to copies o'.
my remarks to this panel.
are
must
is
gaining work
issues involvd and notice of our
decision to in erv^ne. A copy of
We
the
ing.
themselves
strongly
atement
s
agreements thus reached.
ment
and
Either Collective Bargaining
Statism
thousands
our
then
bility for living with
regulation
regulation and eventual
nationalization of all industry.
It is the
so
under
ernment
statement
of
a
responsible na¬
tional organization which regards
these
proceedings
with
grave
misgivings.
increasingly
ing will inevitably result in
of
one
come
in the field of collective
bargain¬
Our position and thr statement I
here
agree
ernment
ment I shall criticize the action of
the steel companies in this case.
make
together, consider and dis¬
problems, voluntarily
upon
their solutions, and
live
up
to the voluntary
Traffic—An¬
trend—John
the
ma¬
their
the regulation and control of
gov¬
ernment.
And we know that gov¬
In
state¬
my
employment relationship
would
renresenta-
as
steel
meet
Passenger
growth
,
industry-wide
of collective
Base
collective
-
home to its members tha. ..dangers
to a private enterprise system in¬
herent in
the
bargaining the authority to make binding
relationship has been established, agreements for him.
Thereby,
both employers and employees, the
employer deprives himself of
quite aside from their legal obli¬ the right and
opportunity to dis¬
gations and rights, should work cuss and become
intimately fa¬
sincerely to make such bargain¬ miliar with the problems of the
ing effective."
•
1
employees.
The
representatives
bargain¬
bringing
;
.
.
;
to
"the right of employ-
-ies to join or not to join a union
should be protected by law
of
well
and
may
,
opposed
| policy that
ever-
woman
industry-wide
is engaged in
or
pool
have
child in this country.
bargaining?
that
bargaining is
We faced the issue squarely in extended beyond the individual
mem---946 when the NAM formulated employer to an entire
industry or
proceedings.,: •
In fact, the action of this panel,
like
is
representative of the employ¬
must be willing and able to
cuss
^
other steel producers :; ts present policy.
At that time
and other consumers of steel who
he overwhelming majority of the
have a vital interest in the out- Board of Directors affirmed the
eome
collective
is
perequisite
collective
of genuine collective bar- bargaining.
avor
compa- j
members ;•
Regardless
of misconmisrepresentation of
position, the NAM stands in
jeption
destroy
by a union for this purpose. Sec¬
ondly, the employer and the cho¬
ees
position clear.
the
to
jority of the employees must vol¬
untarily elect to be represented
government,
the
our
of
What
One
sen
proponents and defenders of
gaining.
sizes.
member¬
our
ship consists of companies having
less than 500 employees. Some,
but
make
only serve
bargaining.
the
jerned
con¬
than
of
with
case
tree
near
Id
•
More
this
competitive enterprise
,ystem, the NAM wants to make it
indus¬
tries and
in
one
lie
manufac¬
turing
case
,-ooperation
manufactur¬
t
to
to the
parties for
lenuine collective bargaining.
It may
seem
strange to this
panel that the NAM appears here
is a staunch
champion of collec¬
tive
bargaining which we believe
.0 be threatened
by the action of
itself
panel
i
this
remand the
of
ihu'v"
<£-
since
applica¬
firms mentioned will be pleased
the following literature'.
interested parties
Lewis & Co., 63 Wall
York 5, N.-Yt
My appearance here today is not to be construed as a statement in behalf of the steel
companies involved in this case. I am appearing solely as a spokesman for the National
Association of Manufacturers. The time to mike this presentation was granted to us
by the
com¬
send
to
-
effectuate similar straiegy to lead to government cantrol.
steel
It is understood that the
.
agreements, like industry-wide bargain¬
new
necessary to save us
Such proceedings can
of
industrv-wide
bargaining
by the appointment of
cause
oanpi
been
in
the
steel- companies
maneuvered
which
something
try-wide
they
very
into
be¬
thir
have
Dresser Industries
Ira
Haupt &
engaging in
similar to indus¬
bargaining
with
all
o'
Halliburton
ing Company
way,
recommendation
this panel may make,
not
technically
(Continued
;
«
which
though
binding on
Oil
Well
than
more
the
Analysis
Corporation, 100
—
New York 5, N. Y.
25)
the
helpful
Monday Issue,
'•••»"
—
First
for
"Chronicle"
"
Cement¬
dividends
..."
*
i
declared
and
Broad¬
;
even
on page
Nothing
of
Boston
be
—
positior
a
it.
it
Circular
are
the adverse results that How f"om
The
—
Co., Ill Broadway,
New York 6, N. Y.
Knudsen Creamery—Circular
Floyd A. Allen & Co., 650 South
when
payable
coverage
By C. CHESTER
Commissioner, New York
-
.
\
A'
,i>.
i
•
*
w.
,
•» •
•
•
,
•••'•
t ;
Some
DU MOND *
State Department of
Agriculture & Markets
\: . J. • .
r :•
I
-
•
SELLING IT TO SWEENEY ;
weeks ago, the New York City stock brokerage
house of Ira Haupt & Co. inserted an advertisement in The
Agriculture
The Outlook for
(749)
*TNANCTAL CHRONICLE
ft
COMMERCIAL
THE
Number 4832
Volume 170
.
K
'
The notice was
News.
agricultural situation, Commissioner Du Mond criticizes Brannan Plan as "a very great
ideology of an all powerful government." Points out fallacies of regulated price support,
urges more agricultural efficiency and more education and information be given to farmers so they
help themselves. Says farmers must consider their farms as permanent and going businesses, and
proper ways must be devised to prevent wide fluctuation in agricultural prices.
,
concession to
and
can
Outlook for Agriculture. In so doing, I want to con¬
topic in perhaps a broader way than most of us have been accustomed to think¬
in that I want to have you think with me for a while on the outlook for agricul¬
I want to talk to you
sider the
ing of it,
in
here
ture
_
®—
'
<
worth¬
while
profes¬
sion.
It
is
a
well-known
fact of history
in
that
prac¬
all
o1d
the
e r
raise
our
-
which
lems
in
more
face
we
can
legislators.
our
do to help peo¬
of
world
farming has
degenerated
into a condi¬
tion approach¬
C. Chester Du Mond
ing peasantry.
mind this need not be so if
thought and attention are given
to the problem of food production
in a long-time program.
In my
consider the impor¬
First let us
more
ana
ness
contentment.
Our
the United States to
standard of living to a form of government, which is that
representative republic rather
a
democracy, must depend
years ago.
I
for existence on the intelligence,
( It
is a .well-known fact that
when a man is "relieved of the good sense and amount of educa¬
tion of the average citizen.
I be¬
necessity of providing his own
therefore that anything
food he has the time to devote to lieve
which can stimulate sound think¬
the production of the other things
arid services which make possible ing on the part of the electorate
height
countries
the
increase
in
here
us
of
tically
tremendous
productivity has come about be¬
ple realize the trends that are
cause of the development of ma¬
taking place in our government
chinery, and this to a great extent
is seen only in the western hemi¬ today the more opportunity there
will be for our people to decide
sphere.
The abundant food thus
for
themselves
whether
such
produced from a virgin soil—and
later from a soil kept fertile by changes in government will, in the
animal husbandry — has enabled long run, give them more happi¬
honored
and
This
The
continue to be
an
unbelievable only
a
of
few
-
are going into a period when
will be most essential for agri¬
culture to match up the amount
of foodstuffs and fibre produced
on
our
farms with the amount
needed
for human
consumption
nation in the
our
i
t
*yv*
..
depression are all
Whether we will
have a depression again depends,
in my mind, on the mental attitude of our businessmen and bankto a
up
present today.
haven't become
convinced that the present recesSo
ers.
far they
sion must end in a
depression; ana
dominant
possibility
will level off
until that fear becomes
there
tiiat
remains
still
our
economy
without too sevprp
severe
Increased
«
a
rii<?lncn+inn
dislocation.
Agricultural
Productivity
I*
tive form of government where
the government is expected to perishable foodstuffs. Then, in
order that the farmer need not go
support the people—and usually
out of business for lack of income,
from less and less national production. Lest you think that we the government is to decide just
how much he should be paid for
in America have not progressed
down that same road, may I state output of his farm. This method
that the present tax on an aver- of course is a direct and very
age family of four people is now great concession to the ideology
$1,450.
Not too long ago that in government of an all-powerful
would have seemed a quite sub- government under which the peo¬
stantial income for such a family. ple exist only to serve.
It pur¬
We are expecting the government posely under-emphasizes the fact
that during this process our rep¬
to do many things for us which
.
we
the
In
past
we
have seen an
Amersoil of
continent and developed
this
It
new
to
feed
a
great nation.
They
the
and
wonderful display of inven-"*
brought
this
to
continent
primitive methods of Europe,
by
A
a
-.1
-
* '
I*
.
VIUAKW
OWW
'
picture, as I have drawn
YAV-t.ulc' 415 A nave arawn
^ emphasizes some problems
whneh agriculture must face under such circumstances. It is not
enough to say that we condemn
changes. We should not, because
Perhaps a change is necessary as
em* nation develops from an agricultural nation to one where more
.
.
,
.v
.
„
A
ingenuity and hard work than four-fifths of its people are
they have developed the produc¬ industrial.
tiveness,
of government
undoubtedly continue for a
will
of years.
number
tatives
more
than
the
are
20, 1949.
We were
through Ira Haupt
the ad,
naturally glad to run
reputable adfor, but we
this piece of
we're glad to take any
vertising we can find space
can't recall that the receipt of
just as
——,—
The News office.
the current (August)
that the ad's appear¬
made any great stir around
learn, however, from
copy
Now we
Nation's Business magazine,
ance made quite a stir in the financial
known as Wall Street
issue of
long and interesting
that "Wall Street reaction . . .
There were snorts from the pompous and sneers
Nation's Business
article by
reports, in a
Arthur Bartlett,
mixed.
the superior
was
community, popularly
from
. . .
But many
thought it a stroke
of
Wall Street—particularly its
becoming increasingly convinced
that Mr. Doakes is the capitalist to whom industry must
look for the funds it needs to finance itself."
Mr. Doakes is the well known but never seen Joe
Doakes, a name for the average U. S. citizen. In this news¬
business, indeed.
realistic element—is
shrewd
more
paper's early years,
we
which we
"Tell it to
slogan
famous
advertisers:
understand."
•
called him Mr. Sweeney, in a
potential News,
Sweeney—the Stuyvesants will
. '' \
<
, ■>
used to shout at
Bartlooks
if the Messrs. Haupt & Co. were foolish like
foxes when they inserted that ad in The News.
Doakes-Sweeney, it appears, is the capitalist who has
really big and important purchasing power these days.
We
will now borrow
some more
facts from'Mr.
lett's article.
as
It
many
so
Mr.
the
citizens have life insurance
60,000,000 have savings accounts. U. S.
bonds are held by some 55% of all our people. The money
deposited in all forms of savings accumulations
amounts to a good deal more than twice the 1929 total.
ti/£
u »j
How many of us own stocks—
Who Holds
shares in going U. S. industries? NoThe Mnnev7
body knows exactly; but the Federal
- Reserve Board recently offered the edu¬
About
78,000,000 of these
policies, and almost
now
,
cated guess
a
is not more than 9,000,000. Quite
60,000,000 owners of savings accounts
that the total
contrast to the
and
policyholders.
78,000,000 life insurance
The owners of huge individual fortunes,
hand, ate being winnowed out by
murderous gift and inheritance levies,
which got into high gear during the
Let's skip the question, in this
for better or for worse, and confine our
the
on the other
crushing income taxes,
and other processes
reign of Roosevelt.
editorial, whether that is
nificance
for Wall
remarks to its sig¬
Street.
Street is to
investment in job-making
enterprises or business expansion, it will have to get
most of the dough, for as long a time as can now be fore¬
from the Doakes-Sweeneys.
Further, Wall Street has a worth-while line of goods
sell, only provided it can get its message to the mass of
Americans. A recent University of Chicago study showed,
illustration, that if a man had bought a typical block of
15 better-quality stocks in 1923 and had hung onto them
through 1948, he would have averaged about 9% a year on
moneyA
This assumes that he bought for investment,
Year
not for speculation, and that he studied the stocks
got solid advice on them before he bought.
If Wall Street doesn't stimulate average citizens to put
into industry and enterprise, the Government will do
and more of that sort of thing—meaning we'll get
State Socialism here after a while. State Socialism is a
nice-Nellie term for Fascism or Nazism.
Emil Schram, president of the New York Stock Ex¬
change, recognizes these facts and possibilities of presentday financial life in the United States, and is strongly back¬
ing
Stock Exchange advertising campaign to sell the
American people on the big market's prime value and use¬
fulness to our profit-and-loss system.
It's all
most interesting trend, we think, and we hope
Its chief
go
on
significance is
rounding up
this: That if Wall
funds for
new
seen,
to
for
A
orrr
or
money
more
a
a
to
report on it in this
space from
time to time.
Our represen¬
of necessity more
industrially
and
minded rather
agriculturally minded,
and
might soon arrive when
representatives would not
day
these
appropriate out of the public treas¬
ury the money to compensate the
farmer
for his
full production.
Most of our farm
organizations
individual farm from
feel that such a possibility is too
One problem which I believe
a point where it required all of a
real to be disregarded.
These or¬
paramount is that we have a bet¬
man's time and effort to feed him¬
ter understanding of the problems ganizations, including the Grange,
self and his family to a
point
believe that if some way could be
and aspirations of each segment
where a man on a farm today can
devised so that a farmer could be
of our population by the other
feed himself and five others who
kept reasonably acquainted with
segments. When we consider how
are not food producers.
the need for food production he
this understanding can best be
could gauge his own business bet¬
accomplished, it would seem that
♦An address by Commissioner
ter than the government could.
we must not neglect to stress all
Du Mond at the Chautauqua In¬
What he would desire would be
types of education, particularly
stitute, Chautauqua, N. Y., Aug.
(Continued on page 30)
education as to the public probtivity of the
& Co.
resentative-type
formerly did as individuals.
This
epic accomplishment as the
lean farmers took over the
J
'
i-i
leadirg
preferably, of course,
We
it
^
•n
end
is most essential.
high standard of living. Should
we go back again to our primitive
methods, it would be impossible
for America to continue to be the
a
greatest industrial
a
than
agriculture here in
world, because most of the people
the
northeastern States — with now
engaged in industry would
which we are most directly con¬
Some day this
be obliged to spend their lives and for export.
cerned.
We have here less than
country will reach the point in its
producing food.
5% of the farm land of the United
This economy as it has devel¬ population numbers when every
States. Yet on that 5% of land we
oped has made almost a perfect bit of food which can be raised
produce about 12% of our total setting lor a representative form will be needed to support its pop¬
national farm production. We have
of government to flourish.
We ulation. We have not as yet
had the added advantage of being have had abundant food; we have reached that point.
We still can
very close to the great metropoli¬ had the money and the desire to proauce by our mechanized meth¬
tan centers of the Northeast so educate our
ods and our agricultural knowpeople. We have had
that our agriculture has received —above all—the willingness to how more food—particularly food
a
reasonably fair share of the work to better our individual of a higher type—than we can af¬
consumer's dollar.
family fortunes and to provide our ford to eat under the present set¬
In the agricultural subsidy pro¬ independence in old age. This has up of our economy. It is therefore
been the ideology of America.
It most essential that the four-fifths
grams of the last 20
years the
of our people engaged in industry
Northeast has received only 2V2% is endangered now by a too rap¬
Don't and in our service groups, such as
—
iuij
juicjleasing
of the moneys expended by the idly increasing population.
educators, storekeepers,
Federal Government. This would forget that the United States today doctors,
indicate that as yet we here in is a great magnet which is draw- etc., are all profitably engaged in
their various
lines of business.
the Northeast have not needed ing population to it from pracAgriculture today is dependent as
government assistance so badly tically every nation on the globe,
never before on the general pros¬
and that there has been more re- By fair means or foul, they intend
perity of the nation.
luctance on the part of the north¬ to get in.
We must consider whether a
eastern farmers to accept
gov¬
Brannan Plan Criticized
ernment assistance than has been different approach is necessary.
In matching the supply of agri¬
We have seen the governments ot
of
novc ijccn
tut:
true in other areas. We can there¬
cultural products with the de¬
fore assume that our farm econ- Europe start out as feudal governomy in the Northeast was not as
ments run by all-powerful nobles mand, we are faced with what
seems to be some new ideologies.
severely affected by the last de- on through the period in England,
This is evidenced, it seems to me,
pression as were other areas of the France and the United States
by such plans as the Brannan
country and that should we have where the people supported the
Plan where the consumer is sup¬
another depression this area would government. Now we are coming
not be in as vulnerable a position, to a theory of government which posed to profit by the low prices
So far as we can see, the factors is encroaching on the representa- arising from unlimited competi¬
tion as farmers try to sell their
of
tance
for him to do that, the ad
to buy some stock in an openinvestment trust, out of his savings—
The way
went on, was
today on the
to
America
aimed at the so-called average read¬
non-technical,
in some of
and it invited him in
simple language to buy "a share
America's largest industries."
er,
Ill reviewing
Through
New
reprinting their
which appeared
in the issue of July 31,1949. We think the viewpoint the editorial expresses is important to all
the courtesy of the Daily News,
York's
picture newspaper, we are
editorial,feSelling it to Sweeney",
Americans—whether they are investors or not.
Respectfully,
\
IRA HAUPT &
Members New
CO.
York Stock Exchange
Exchanges
and other Principal
111
Broadway, New York,
N. Y.
9
(750)
10
COMMERCIAL &
THE
'
.
Oat Laboi Unions Are Uncontrolled
Economics Professor Emeritus, New York
whole is
And Laboi Agitation
"
By DR. A. L. GITLOW
are a
School of Commerce, New York
dangers
reviewing
type
Prof. Gitlow
:
scores
Nathan Report
does not
Republic the idea of uncontrolled monopoly was anathema.
disciples, they had learned how despotic sovereigns in England
monopolies to "line their own pockets" at the expense of their
our
depend
on money wage
The
the
public welfare. But the actions of
authors such monopolies are usually regu-
same
they had also
the
learned
of
advantages
and
free
un-
trammeled
competition.
Today,
have
we
^become
"more
much
| lated in detail by governmentallyThere¬
commissions.
sponsored
danger to the public
from monopolies of this type ap¬
pears to be negligible.
fore,
any
Radical writers
that
sert
illegal
industrialists
are
are prone to as¬
combinations of
continually
the public" unmerci¬
tolerant
fully. Since such combinations, in
of monopolies.
so
far as they exist, must be se¬
We
have
cret, it is manifestly impossible to
passed
laws
Willford I. King
such
the
as
N orris
La
-
Guardia
Act
and the Wagner Act to encourage
monopolization in the field of
Does such legislation rep¬
labor.
resent
progress
or
retrogression?
An analysis
of the
basic goals
sought by uncontrolled monopo¬
lies
may
help
us
to
give
a
reasoned answer to this
As
previously
noted,
question.
monopo¬
lies are, of course organized for
the purpose of maximizing the
incomes of the monopolists. Very
commonly, it will appear that the
monopoly's net income can be
increased by raising the price of
what it isells.
This will, of course,
be, at
the expense of the cus¬
tomers, but will probably benefit
the owners of the monopoly.
If
the latter gain as much as the
former lose, no loss will result for
society as a whole, r
"fleecing
collect statistical
concerning
data
their prevalence. Our
in this connection then
nine
creased
the
From
which
caused
upon incidental evidences of
monopoly.
In just what fields of
industry do we find prices un¬
the
It
this
was
value
gross
of
cause
the
of
is to safeguard the gen¬
the duty of government to prevent
anti-social" monopolization.
such
Doubtless
your
Committee
is
anxious to discover and eliminate
all
the
monopolies that are injuring
public to any appreciable de¬
gree.
Dangers from Different Types of
Monopolies Compared
By far the most
numerous
mo¬
nopolies are patents and copy¬
rights.
The
extent
of
a
mo¬
nopoly's power depends mainly
uponi the
difficulty of finding
substitutes for the goods which it
offers for sale.
Americans
are
and
patented
producing
needed in
a
various
ways
of
almost
everything
every-day life. Hence,
patent gives to its
owner
sur¬
prisingly little opportunity to ad¬
the
vance
prices of his products.
subject of inter¬
On almost every
est,
that
so
a
many
nopoly
present.
are
With
the
"
workingman's
are
written
appears,
over
the market.
therefore, that the
weal
is
menaced
It
com¬
very
evidence
as
it
ment; namely,
Working Class Injured by
*Part
of
a
statement
unbiased
investigator will be forced to con¬
clude >that,
at present, in the
United States, uncontrolled mo¬
nopolies having any considerable
degree of power are confined al¬
most entirely to the field of labor.
Here
they -flourish under the
aegis of government and openly
hoast of their strength. They collect
their
from
year
more
members
than half
each
a
Labor
truth
is
have
far
prospered
been
never
and H
1949
had
more
States.
Charts
As
be
3
in "What Raises Wages—
Unions or Better Tools?'
Labor
shows,
the
Dr.
income, and
wage
pol¬
increases originated with
rank-and-file workers, local un¬
ion leaders or national officers.
-
"The upturn
the
increase in wages will result in
an
more consumer spending by those
medium.
Statistics show who get the raises. Of necessity,
aggregate demand for wage earners spend most of their
goods in the nation as a whole income "2 /,
depends upon the amount of new
Purchasing Power and Ability
spending power available.1
to Pay
The principal constituent in the
Ths would seem to indicate a
nation's aggregate new spending
power is the national income. It, general wage increase throughout
in turn, is governed mainly by the economy, for the purpose of
consumer
spending
production. It follows that all stimulating
featherbedding and restrictions on and, as a consequence, production
and
employment. However, the
output imposed by labor unions
Nathan report contains a qualifi¬
cut, in like proportion, the in¬
lating
the
that
ex¬
for wage
/
percentage
national
the
.
-
.
for
has been nearly
ers'
real
halved, the work¬
earnings have
annual
more
than
what
labor
doubled..
If
this
monopolies have
is
ac¬
complished, their beneficence
scarcely be questioned.
cation. It states £
".
.
Nonetheless,
.
uniform
a
round of identical wage increases
is not justified, because there is
uniform
"Tne
answers
both' parties
received
reveal
a
from
strong im¬
print of the particular conditions
of the postwar wage rounds. Both
placed the heaviest emphasis on
recent
changes
in cost of living.
Both groups ranked wages in
other industries and in other areas
close
together in the second and
third places.
Half the union offi¬
nearly one-third of the
and
cers
businessmen named comparison
with other unions as a factor in
determining wage increases. Con¬
sideration of the profits of the
mentioned less fre¬
quently by both parties "
Can
anyone
imagine a labor,
leader willingly accepting less for
one group of his members than for
another group, just because the'
former worked in a marginal
company was
plant?
sumes
The- Nathan report as¬
willingness.
I would
such
dislike being a local labor leader
faced with the necessity for ex*
ability to grant in¬
instance. Some plaining varying collective bar¬
companies and industries can af¬ gaining results to the rank and
No labor leader
ford much more than others, and file membership.
would willingly accept the threat
some few cannot afford
any raise
to his leadership tenure implied
and remain in business."
no
creases
in
every
This brings out one of the anach¬
in the report.
It justi¬
ronisms
related
gree! And
ing
tables
Reference
in
the
Better 'Tools?"
growth
folder
"What
Unions
shows
of
to
the support¬
Wages—Labor
that
labor
or
in the report's ability to pay
sis.
the*
Therefore, the true result of
the
share of wages and
the
the
sal¬
answer
is
income
Still
em¬
given by Chart
pamphlet—
"Raising the Workingman's Scale
King before the Senate Banking of
Living."
These show that, in
Currency Committee, Wash¬ the 90
years from 1849 to 1939,
ington, D. C., Aug. 16, 1946.
capital investment
per worker in-
should be increased when business
of labor
more
is
declining, despite the fact that
declining business is accompanied
monopoliza¬
reduces
inimical
to
the
by
profit shrinkage and
tion of ability to pay.
of
the
business
thing
market
recession
which
periencing
whenever
As
have
we
a
been
ex¬
past
few
the
months.
Charts
entitled
I
and
"Would
II
a
in
study
my
Fourth
Round
of
Wage Increases Benefit Fac¬
tory Workers?" prove conclusively
that the actual
factory
depends primarily
tion's
aggregate
spending
this
power.
item
Reference
is
to
wage total
upon
of
the
gross
The
the
the
in
na¬
new
figures
1 See
Table
XV
in
to
the
present writer's
Prosperity.
and
emphasis
1 Robert
nomic
presented reveals that this latter
book—The Keys
doubtful, particu-*
labor
traditional
"equal pay for
and "the living
slogans
as
equal work"
wage."
-
'
,
Wage Increases and
Purchasing '
Power
elimina¬
factors they had considered
preparing their recent wage
was
counteroffers.
on
their
I.
there
quantity is. in turn, dominated by
(Continued on page 33)
The wisdom of such
seems
in view of such
a
demands
composition
shown in Table
course
matter of fact, the ability
to
pay doctrine is not
popular
with labor leaders.
They have
occurs—some¬
during
a
Assuming that consumer pur¬
chasing power could influence
production and employment,
would wage increases raise con¬
sumer
purchasing power? There
excellent reason to dislike
it, for is a glib identity between wages
it violates basic common sense in¬
and total purchasing power, which
sofar as practical union admini¬ is
invariably assumed by the labor
stration is concerned.
Thus, in a proponents
of
the purchasing
survey of the opinions of busi¬ power theory. The Nathan report
nessmen and labor
leaders, W. S. makes such an identification. It
Woytinsky stated:4
■
is incorrect. Wages are only a part
"Both union leaders and busi¬ of total income, and total spend¬
ness executives were asked about
ing for consumers' goods.
The
pros¬
perity of the average workingman
is the practice of pricing labor
out
larly
wherever
profits are disap¬
pearing. Yet, under the consumer
purchasing power theory, wages
mean
of
ity to pay?
and
Logically,
sharply the
total income of the laboring class.
of
past century?
The
inevitably
"aggressive"5
the part of labor, that
in the Nathan report,
profits are good.
this must mean that
wages should go down whenever
is
de¬
featherbedding is not the
which
unions
since 1933 has had not the
slight¬
est tendency to increase the
per¬
centage
nth
whole.
as a
tion
But one should carefully avoid
succumbing to the hoary fallacy
that because two
things occur to¬
gether, one is necessarily the
Raises
Here
the
resulting cut in
real
only result
Labor's Advancement
of the other.
will
total
ployees
Forces Really Responsible for
Charts I and II and
to
every
production
lower
But
cause
purposes."
featherbedding
fies wage increases on the basis of
the consumer purchasing power
can
and
;
they
whether they thought the pressure
be¬
cause:1
leaders
icies in the next five years; busi¬
ness
executives were asked
raise
to
Union
termining their union's
"Nation¬
wages
attitudes:
asked what factors
pected to take into account in de¬
Policy" should
labor union in
a
cause
before
or
Additional questions
put to both parties to clarify
were
Economic
al
negotiation table
their
presented
by Nathan, the
pleading their
public.
were
As
that, during the
last two decades,
the average
American factory worker would
there
consumer
the arguments they
on
in
bargaining, on
is called for
it would be
have been con¬
am
told that union
leaders are theory, but tempers the recom¬
vinced that the labor monopolies
mendation by calling attention to general wage increases coincident
urging the Senate to pass Section
with the area of collective bar-,
deserve primary credit for the
630 of the Armed Services Ap¬ ability to pay, as a basis for actual
gaining,
regardless
of
specific
amazing improvement in the con¬
In fact, the
propriation Bill, providing that wage adjustments.
dition of labor which has taken
purchasing power and ability to ability or inability to pay. This
"no
part
of
the
appropriation
place during the last century. In
would, of course, eliminate mar-*
shall be made available for any pay approaches are in direct con¬
the manufacturing
field, real
tradiction to each other.
Under ginal plants and increase unem¬
person, firm or corporation which
ployment.
There is the further
wage rates have been multiplied
the ability to pay approach,
wages
uses stop-watches or
time-meas¬
Should labor
leaders
by: .five.
Though
the
average
should be pushed up whenever question:
base collective bargaining on abil*
number of hours worked per week uring devices for time studies and and wherever
II and Table I in the
by
the
purchasing
power theory.
Monopolies
used
at the
CHANGE in the volume of circu¬
exists,
slightly indeed by patent or copy¬ aries in the output of
industry.
right monopolies.
What then is the real explanation
Railways and public utilities of the wonderful advance in la¬
frequently are in a position to bor's well-being
occurring during
monopolize effectively in certain
localities services essential to the
argu¬
the
of
'■
'
it seems certain that any
copyright usually has but marked
slight control
mon
books
rather than
had
its
analyze
basic
increase in real income.
The
Robert Nathan to analyze
His report is called "A National
this
share of in investment
Abraham L. Gitlow
the nation's new spending power must await
yielding and profits maintained in
time of recession?
It is difficult going to wages remains nearly rising consumption, which is cer¬
constant year
after year.
The tainly not now an immediate pros¬
if not impossible to discover any
term "new spending power" -is
pect," and,
major industry in
which such
used to cover the algebraic sum r "There
is no doubt but that
manifestations of control by mo¬
so
ingenious that they have devised
called upon
economy.
it may be well
,
welfare, it follows that it is
agarn
'
;
,
to
billion dol¬
But now we come to a diffi¬ lars in dues, and' much of this
come
of employees, for they too
culty
which
monopolists
have money is used to strengthen their are
buyers of goods. As you all
control over industry.
They go
never
been
able
to
overcome.
know, new houses have been sell¬
When prices are raised, sales vol¬ into politics with the avowed pur¬
ing at outrageously high prices
ume declines,
and this results in pose of defeating all candidates
largely because building workers
for Congress who dare to oppose
less production.
And when pro¬
have been restricting output. The
duction shrinks, the volume of their demands. - How does it come
railway unions are striving
goods available for use by the that : the people of the United
vigorously to force the railroads
public in general is inevitably States and their representatives
to carry useless workers on every
reduced.
Clearly, therefore, mo¬ tolerate such arrogance?
Diesel engine. This would raise
nopolization accompanied by price
freight charges. John L. Lewis is
Why Anti-Social Acts of Labor
raising is injurious to society as a
limiting coal workers to three
Monopolies Are Tolerated
whole.
days' production a week. This re^
Since the prime function of gov¬
The answer is, of course, that
suits in high-priced fuel. And I
ernment
most Americans
eral
once
size and distribution
on
income.
Policy for 1949," and it recommends wage increases
as a
for the country's economic ills. In view of
the use being made
report,
cure
product to be multi¬
plied by seven, and his hourly
real wage rate to be more than
Here you have the
quadrupled.
basic
CIO has
state of the nation's
Economic
of
the worker's
conclusions
the United
necessarily
rest
fold.
level, but
of national
From Adam Smith and his
and elsewhere had used
University
anachronistic and self-con¬
as
tradictory. Points out fallacies in labor leaders' purchasing-powerand-employment theories. Maintains real income of working class
_
To the founders of
Purchasing Power
University
of uncontrolled monopoly, points out that under present laws, labor
of monopoly which is dangerous to social welfare. Holds working class as
injured by labor monopolies and says labor leaders tend to price labor out of market. Urges
■'
monopoly laws be applied to labor unions.
King,
organizations
Thursday, August 25, 1949
Consume!
Monopolies
Chairman, Committee for Constitutional Government
Dr.
CHRONICLE
WILLFORD I. KINO*
By
!
FINANCIAL
Nathan,
Policy
for
Associates, Wash.,
2 Ibid.,
p. 3S
3
Ibid.,
4 W.
>
S.
p.
"A
1949."
D.
C.,
thinking
National
R.
The
Eco¬
Nathan
1949,
p.
&
23.
source
dends,
71.
merely
they
redistribution
purchasing
an
increase
are,
constitute
of spending
(Continued
5 R.
a
power,
in the aggregate.
therefore, self-defeating.
Manage-
j ment Look at Collective Bargaining,"
j 20th Century Fund, mimeographed, 1949,
p.
consumer
To the extent that higher
wages
represent a reduction in
other forms of income, like divi¬
They
&
of
power.
not
37.
Woytinski, "Labor
income also are a
other forms of
Nathan,
op.
on page
cit.,
p.
40.
33)
Volume 170
(751)
Number 4832
•
born in
count
and
200
,
"There
Mr. Babson
of
points out high cost
housewife. Says in-
at
\
*
.
■
taxes,ryou have very lit¬
tle to show for it.
4
health program, for
A national
of every year
many
entirely for the gov¬
government; and that ordinary v ernment, not keeping a cent from
your labors during that period for
people are paying for "security living expenses. These taxes are
experiments."
enough to support one govern¬
ment employee for about every
GLOUCESTER, MASS. — A
seven
friend of mine arrived home
night to find his wife on
the warpath. She had kept account,
for the first time, of every cent
she had spent that day on taxes.
First she. went,shopping for some
young
be
grams"
Federal
as
MO.
is
now
Rogers
&
affiliated
Co.,
458
with
South-
^
• •
Marache, Sims
_-/■ (Special to The Financial Chronicle)
I
1
•
"
McDowell With
a*.
& Reed,
Inc., 1012 Baltimore Avenue.
Chronicle)
Spring Street, members of the Lbs
Robert
—
E. Moore is with Waddell
■LOS ANGELES,
B.
pro¬
"social
these
McDowell
mean
higher taxes for
you,
(Special to The Financial Chronicle)
directly and also
ST.
buy. It is well said
that "Government has nothing ex¬
cept, what the working
ated
With Fusz-Schmelzle & Co.
what you
on
employee -increase
Financial Chronicle).,
KANSAS CITY,
em¬
All
both oa, income
the population of the
United States has increased 21%.
The
government
more
Financial
has
CALIF.—Harry
become
associ¬
less; but your taxes would be
more.
families in the U. S. In the
last 20 years
the other
(Special to The
ployees to operate ^ it, and keep
the records, as it would require
doctors.
Your doctor's bill might
figure
Ashun
Gross,
The
ANGELES, CALIF.—John
Angeles Stock Exchange.
]
>
■ ■:
immmu
With Waddell & Reed
>
instance, would call for almost
can
H.
.
it. But when you
dollar to the govern¬
a
that you are
working for at least three months
can
w.LOS
vidual in this country.
over
-(Special to
-
,
fit qr? turn nearly
ment in
Institute.
Petroleum
Where Is It Going?
,
You
figure he is working
least three months a year for
dividual
hand
pump," according to the
;With Gross, Rogers & Co.
one-third of it
over, each year, to the governfment to spend?
Upon your choice
depends the freedom of the indi¬
-
everyday taxes to consumer
and ordinary
;
American
gives it."
You are the working
taxpayer.
What is your desire, to
spend your own money as you see
when you need
are
separate taxes in the price of
to the gas
It is your money
is
being spent on all "se¬
curity experiments." If you save
a dollar for the future you have
that dollar, plus the, interest .it
earns ready and
waiting for you
gasoline levied at different stages
of processing from the oil well
BABSON
By ROGER W.
,
which
spending several thous¬
dollars' in
gasoline
taxes
alone before he dies.
Tax Burden
has been 250%.
the United States he, can
on
11
LOUIS, MO.
458 So.
Sims &
Co.,
Spring Street, members of
the Los Angeles Stock Exchange.
Edward C.
—
Mr. McDowell was formerly
Fusz-Schmelzle &
Kreutz is with
with Marache,
with
First California Company.
taxpayer. Co.; Boatmen's Bank Building.
.
of
the
'■
V
most
in
used
/-articles
homes
as
-regular necesi t i
s
She
e s.
bought a
small conof
tainer
T
H
U
F
E
T
U
S /
D
L
O
H
E
R
G
P ;R O M I S E
A T
E
R
de-
oderant (Fedr
e
1;
a
tax
$.08), and one
larger c o ntainer ; (Fed¬
eral Tax
b
g'h
u
o
one
,
$.12).
also
She
can
t
of
/
baby powder
(Federal
tax
Roger W. Babson
$.10),
of
(Federal
(Federal
1
'1
1
**
'
1
'r'
'
THE
INVEST IN
PEOPLE
oil
' ^
(•
£
5
>
-
'•
'
,
»
-,
'
' '
BELL SYSTEM
4 ^
,
A
v;
h
\.. ; }•'/>}
$
*
$.20), and one me¬
jar of • hand
lotion
tax
all
does
work
bottle
tax
dium-sized
who
a
baby
$.09).
tell
will
Any
of her
you
mentioned item is
woman
THE
house¬
own
IN PEOPLE
BELL SYSTEM INVESTS
that the last
no
luxury.
Everyone Pays the Same Federal
•t
- Sales Taxes
.":v
Next,
friend's wife paid two
my
for her husband's gafe
deposit
box
(Federal' tax - $1)
where
a
very
few government
bonds repose.
At the telephone
bills,
one
1
where she paid her sec¬
bill, there was a Federal tax
of $.56
for "local service and
equipment," another $.38 on "mes¬
sage units," and another $.13 on a
nearby toll call. The bill was $7.82.
$1.07 of this amount went to the
government. That same morning
she had the family car filled with
company
ond
This tax amounted to $.45 on
gallons, as the Massachusetts
tax is $.03 on each gallon
and the Federal tax is $.01 %. All
these taxes are in addition to the
gas.
10
state
corporations (which are
taxes the
already taxed to the hilt) pay.
;:
/
At noon, this young housewife-,
sick and tired of Federal and State
taxes, went to a restaurant for
lunch—one where she could get a
"99c.
to
A choice of bev¬
included. She decided
tea—"iced."
When the
special."
erage
was
have
bill
was
she found
came
added
been
for the
that
ice!
5c had
The bill
She figured that hav¬
$1.10.
ing her tea iced had cost her 11c
extra, 6c of that amount going
Straight to the State Government
for the "old age" tax.
A:
ll
ten
the assets of the Bell
in its balance sheet
money
Multiplication
_
The
above little story
explains
this housewife came home
.angry
and resentful.
She had
turned over in that one morning
greater
or
System
are not
Both top management
writ¬
represented by the
invested in its plant and equipment. Of
importance are its assets in people.
men
and
women
gerial positions
on
in
and the thousands of
supervisory and
come up
mana¬
the ladder step by step,
character, industry and competence.
why
$2.81 in taxes to the Federal Gov¬
the State—a
The Bell
the
They represent literally millions of years
System gives constant attention to
development of
new
leadership along with
training and experience and are a decisive
ernment and $.36 to
total of $3.17.
seemed
what
She had not bought
to her, or to any
thinking person, a single luxury.
Small
potatoes?
Multiply that
amount by all other housewives
in the United States out on a nor¬
mal
will
cial
new
facilities. Its
long-standing policy of making
promotions from the ranks assures the continu¬
ing vigor of the organization.
reason
;
for the
•
success
of the business. They are
v
-
the solid foundation for
; i -
;
even
greater progress
in the years to come.
morning's activities and you
see where the money for so¬
experiments is coming from
your own pockets.
—out of
(Ohio Tax Com¬
of the Na¬
tional Association of-Tax Admin¬
-
C.
E.
Glander
missioner and Pesident
istrators)
years
says
that in the past 30
annual taxes in the U. S. A.
1,500%.
Someone has
have risen
•estimated
that
when
a
baby
is
of
BELL
TELEPHONE
SYSTEM
-'
12
(752)
THE
Ernst I. Cahn
Opels
COMMERCIAL
FINANCIAL". CHRONICLE
&
high taxes.
'""
ness—the
Ernest I. Cahn will engage in a
securities business from offices at
29
v
the bank—have
(Special
The
to
Financial
Wellington Fastest Growing Fund
Chronicle)
HILLS,
CALIF.—
Philip P. Walter has become asso¬
ciated
with
North
Robertson
Walter
Douglass
&
Co.,
133
Boulevard.
Mr.
previously
with
Dempsey-Tegeler & Co. and Bing¬
ham, Walter & Hurry.
was
&"Reed
Waddell
(Special
<
The
to
Helen
F.
the
to
staff
of
has
Affiliated Fund with an increase of 17% was in second positio:
percentage basis while Investors Mutual was .fifth on a percent¬
age gain basis but second on a dollar gain basis as will be noted from
the following tabulation:
Fund
Waddell
added
&
Reed,
Investors Mutual
&
Howard
Bal—
*Excluding bank loans.
NATIONAL
As
a
result of the rise in the market since June 30 and continued
high volume of sales of
INVESIMENT PROGRAM
Open Inve^mM^Arcount
An
of
prospectus
NATIONAL
request
upon
shares, Wellington's present net assets
are in excess of $83 million.
It won't be long before you're above
the $100 million mark, Al. Congratulations.
new
It will be noted that among the six leading funds
tabulated, four
balanced funds while the other two, Affiliated and
Fidelity, are
are
equity type funds.
SECURITIES
RESEARCH
120
and
program
&
CORPORATION
BROADWAY, NEW YORK 5, N. Y.
Among the
smaller
mutual
funds, the Commonwealth Invest¬
showing rapid growth. Since the first
of the year its assets have increased some 30% to more than
$7
ment Co. of San Francisco is
million.
Mr. Weir Looks at
Diversified
of
Investment
international
Seemed
Stocks, Inc.
material available
descriptive
from
dealer,
Hucil W. Long
or
from
and
local
your
-
Company
>/'
INCORPORATED
,
Wall
commerce."
From
—
"These
Things
.
.
Street, New York 5?
citizens to take another look at it.
wnether stocks will go higher or
LOS
'Life' does not pretend
lower
after
while.
a
Nazism.'.
or
.
spare
ponder the
.
This
magazine.
one
"Chlorine
is
sometimes
in
the
next
few
to know
months.
would not think of urging anybody to try to get rich
speculating in the market. We do know, however, that
by
most
people who have put their spare
gambling for a fast profit
pull—have made a handsome return.
money
into stocks
over
the
but
investing for the long
Certainly more than they
would have made by investing in race-track
tickets, which seems to
have become a popular American
way of being financially optimistic.
"The most important thing about the stock market
right now
is that it is going begging for customers—which means that U. S.
industry is going begging for funds and for partners. The old mil¬
investors
have
ANCELES
the
from
called
disappeared
or
have
been
discouraged
Affiliated
Fund,
WA
Urn
Keystone
Prospectus
THE
useful.
Common
upon request
New York
Chicago
—
—
Los Angeles
the
'Green
"
.
"
IN
A
Diversified Investment Company
chemicals, and it is also useful in the preliminary
making other chemicals.
"
'Tide.'
or
Goddess' helps create
Famous
such
$100,000,000 Canada Dollar Bonds Marketed
Bulk of proceeds to
be used for refunding
A
groups of
United
at
States
Canadian
and
by
The
to
which
will
matured
Canada, with principal and inter¬
payable in United States dol¬
common
lars.
your
advanced
tional
500
of
to
the
issue
the
will
Canadian
be
Na¬
Railway to redeem $57,728,-
of
5%
bonds
have
5%
bonds
be
to
due
in
1969
called
been
for
pay¬
next Oct. 1 and
on
in
due
called
1, 1950.
..
for
$17,338,000
1970
which
payment
on
local investment dealer,
or
THE
«fy
PARKER
200 BERKELEY
-mm
CORPORATION
ST., BOSTON 16, MASS.
'/:
■
they
receive
from
shares of Canadian
tax-
the necessary funds
redemption of $19,000,000
the
be
to
called
next Nov.
for payment
on
'
of
of the
the
proceeds
bonds slated for
payable
are
and
will
prospectus
states
that
Canada depends heavily on for¬
eign trade, and has now developed
to the point where with less than.
1%
the
of
ranked
be
in
re¬
U.
S.
redeemed at
world's
third
in
ports
The
U.
and
S.
A.
it
im¬
has
principal customer of
and
also
the
principal
imports into Canada.
of
source
population
in exports
1948.
become the
Canada's
official
holdings of
gold and U. S. dollars have fluc¬
tuated since the
war from the
high
point of $1,508 million at Dec. 31,
1945 to $502 million at Dec.
31,
1947
1.
balance
The
The
Canaida
.
The Canadian Government will
also advance
and, following the adoption
November, 1947 to
of measures in
halt the drain
on
reserves
of for¬
eign exchange, together with
sistance
pean
derived
from
the
as¬
Euro¬
Recovery Program, re¬
to $977 million at June
covered
30, 1949.
an
in
U.
in
new
annual
bonds will
saving of $1,charges pay¬
interest
S. dollars.
during
each
of
the
past
r
Atlas Investing Corp.
The Atlas
|
Investing Corporation
is being formed with offices at 25
Broad St., New York
City, to en¬
gage
in
the
Officers
securities
business.
President,
tions
three
in
substantial
personal
reduc¬
income
taxes
since the end of World War II. A
further general reduction
sonal
-,V
dividends
despite
be obtained from
Boston 9, Massachusetts
,
the
three fiscal years ended March 31
may
"
credit against their per¬
sonal income tax equal to 10% of
a
paying corporations.
Proceeds
for
2$-
—-—
viduals
Canada has enjoyed a budgetary
Prospectus
bankers
yield 2.736%.
bonds
surplus
Keystone Company
\
investment
prield
100y4%
able
1
interest
headed by Morgan Stanley & Co. on Aug. 25 offered
$100,000,000
year 2%% bonds of the Government of Canada. The bonds are
The sale of the
or
at
purposes
saving to Dominion of $1,953,325 annually.
953,325
V,
re¬
4D which helps the
country stone walls."—»
From Chemical Fund's "Test Tube.''
result in
Congress Street
soapless soaps as
DDT; killer of all sorts of insect pests,
105%.
(Series S1-S2-S3-S4)
■
of
*
^
new
quires large amounts of chlorine. So does 2,
farmer kill weeds and blears
poison ivy off
demption
COMMON STOCKS
of Boston
'
>
.
"The 'Green
'Vel'
dollars
(Series K1-K2)
50
processes
Every house¬
vinyl shower curtains, raincoats, upholstery or floor
has
now
All
PREFERRED STOCKS
The
the
Vinyl plastics such as Carbide's Vinylite,
Goodrich's Koroseal contain chlorine.
or
r<.p
CSeriei B1-B2-B5-B4)
dealer
Like
it doesn't contain chlorine.
Dow's Saran
will be added to the general funds
of the government.
BONDS
investment
/ v
;
Goddess.'
is
salt
Commissioners of Mon¬
treal 5% bonds due in 1965 which
investing their capital
local
-.•*
things that are used in every day life. Chlorine has the faculty
combining with other elements to make a tremendous variety of
are
ur
a
"Life"
of
source
Harbour
.....
INVESTMENT FUNDS
1
.'■V'.'Vv..
-'v
useful
of
COMPANIES
Lord, Abbett &. Co.
i
•
Prospectus from
issue
of the
of
which
LORD-ABBETT
INVESTMENT
Certificates of Participation in
!
15
industry.
large
specially designed cells producing chlorine gas and caustic soda.
"Although the average man never sees any chlorine and doesn't
want to, there is probably no
single chemical that enters into more
Feb.
,
Aug.
a combination
of sodium and chlorine and
of most of the chlorine made
by the chemical
An electric current is run through brine contained in
salt brine is the
ment
Custodian
%
broker
"Like many chemicals, however,/that are
dangerous in pure
form, it forms combinations that are entirely harmless and extremely-
are
,t
necessary
local
lady in the famous old play it is evil but very powerful. It is green¬
ish in color and poisonous
enough to have been used in the combat
gases of World War I.
est
Funds
what the
to vote for freedom and make
way
1, 1974, will be direct ob¬
ligations of the Government of
/
nlee-
a
savings, might do well to
see
Sept.
!
such
Chlorine—The "Green Goddess"
—
is
by statisticians
above
v:: V/rV--;'-
/
rv
be
can
said
are
and
over
emergency
too."—An editorial
money
-
and
Socialism
.
'Daily News' words and then
to offer.
ittle
around,,
money
insurance
as
thing—meaning well
State
we
years—not
lionaire
CHICAGO
some
covering.
.
warning, we would like to point out that the
U. S. still has a stock
market, that the market plays a useful part
in the U. S. scheme of things—and that
perhaps it is time for all
quick
48
competition in
Important," issued by Selected Investment Co. of Chicago.
Moreover
.investment
have
hold
A Series of
New *York>
other
of that sort of
more
here
for Fascism
"Any of the millions of Americans who
"After that fair
and
and
more
Socialism
term
"Its first
This May Cost You Money
Fund
•
State
Europe
big uses were in purifying water and in bleaching tex¬
tiles and paper, but in recent years its field has widened
National Steel's President, Ernest
Weir, returning from West
enormously.
In the last 15
Europe: "Except in England, the trend of government leadership
years alone demand has increased
700%, and there is
no
reason
toward socialism has halted and, in
to think that the limit of its growth has been reached.
fact, reversed. The countries in
which the trend away from socialism is most
pronounced have Newly created chemicals every year add to the need.
made the greatest relative progress.
"Chlorine is essential in making the most
The fear of war in the near
important plastics.
term has greatly
diminished, not only among leaders, but among Phenol,, used in making phenolic plastics such as Union Carbide's
the rank and file of people. We are
entering history's greatest period 'Bakelite,' needs huge amounts of chlorine in the making although
Inquire about=
\ Prospectus
et
.Vellie
las
31
17
67,042,000*
:',;:13
37,418,000
nvz
21,350,000
ny4
138,217,000
ii
40,774,000
33,035,000 1
19,041,000 124,273,000
36,845,000
Fidelity'
% Inc.
$75,807,000
57,343,000*
Boston
Eaton
6/30/49
$57,756,000
Affiliated
New York
investments
6/30/48
Wellington
The
ernment will do
;o
NET ASSETS
CALIF.—
been
Inc., 8943 Wilshire Boulevard.
Details
depend for its funds on the little
advertising campaigns/however, seem to be taking
'Daily News,' the newspaper of the common
man, has never bothered to run a page of stock quotations.
Yet
ast week it was moved to editorialize on the stock market's
campaign
o attract small
investors, and to express itself heartily in favor. As
.he 'Daily News' pointed
out,
'If Wall Street doesn't stimulate
Average citizens to put money into industry and enterprise, the gov¬
a
Adds
HILLS,
Cowan
lion.
Chronicle)
Financial
BEVERLY
;
Despite the fact that net assets of 80 odd leading mutual fund?:
declined 3%% to $1,536 million during the 12 months ended Jun '
30, Wellington Fund was able to add 31% to its assets during-thit
period, the largest gain of any mutual fund with assets over $20 mil;
i;
on
notv yet learned that a stock certificate
of promoting and sharing in progress.
exchange and the brokers have only lately begun
stock
Their recent
man.
effect.
BEVERLY
Many of the hew potential investors in American busi¬
farmer and the laboring or salaried men with
to realize that business must now
By HENRY HUNT
Douglass & Co.
Thursday, August 25, 1949
•
.
be a profitable way
can
"The
Walter With
•
prosperous
in
money
Broadway, New York City,
•
income
stituted
this
taxes
has
year.
The
ment has made
a
in per¬
been
govern¬
start toward the
removal of double taxation of
porate
profits
by
in¬
allowing
cor¬
indi¬
urer;
John
De
are
De
Pasquale,
Secretary and Treas¬
Carlyle
Detjen
and
Ferlaino, Trustees.
Mr.
and
C.
Pasquale in the past
Amos Treat
and
Ralph
Clark
&
Kohl
&
dealer
with
Eyman.
Detjen has been active
dividual
was
Co., Hirsch & Co.,
as
an
in. Brooklyn.
Mr.
in¬
170
Volume
THE
Number 4832
COMMERCIAL
&
FINANCIAL
CHRONICLE
NSTANotes
SECURITY TRADERS ASSOCIATION OF NEW YORK,
,
INC.
^
\ The Security Traders Association of New York is reminding
members of the annual summer outing and dinner to be held Sept. 9
Island.-
Travers
at
Tickets for the
outing, which will feature golf,
ball,< tennis, and horseshoes, are $8. Reservations may be ob¬
tained from D. Raymond Kenney, Kenney & Powell, or Arnold J.
soft
Wechsler, Ogden, Wechsler & Co.
\ l.
.
V.
/,
"
'••-''
.
J
SECURITY TRADERS CLUB OF ST. LOUIS
/i
;
;
\
v
Nominating Committee of the Security Traders Association
of St. Louis consisting of John F. Matye, Dempsey-Tegeler & Co.,
•
The
.
Earl
John Bunn
Edward Oldendorph
•
irv
,■
Edward
Hagensieker
David S. Matthew
Kenneth Kerr
-V
V
i
.■
;■
Senturia
:•
•: *.
■'
•
u
-r
Richter Co., and Jarr\es O'Brien,
Mississippi Valley Trust Co., has submitted the following for officers
of the Security Traders Club of St. Louis for the year 1949-50:
Chairman: Robert A. Pauli, Scherck,
President—John W. Bunn, Stifel, Nicolaus & Co.
1st Vice-President—Earl Hagensieker, Reinholdt & Gardner.
2nd Vice-President—Edward Senturia, Newhard, Cook & Co. >
;:
4
3rd Vice-President—Edward Oldendorph, Smith, Moore
Secretary—Kenneth Kerr, A. G. Edwards & Sons. >'■
Treasurer—David S. Matthew, Scherck, Richter Co.
•
& Co.
,
Any five members of the Association may in writing nominate
candidate or candidates for office.
Notice of such
nominations must be in the hands of the Secretary at least three
additional
an
weeks
for
If
on
Oct.
20,
be received on or
must
The annual meeting has been set
therefore any additional nominations
before Sept. 29, 1949.
/
,
«
•
>;
before the annual meeting.
Thursday,
election by
an
1949;
ballot is necessary the voting will take place
319 North 4th Street,
the floor of the St. Louis Stock Exchange,
at 4:00 p.m. on
otherwise advised.
Thursday Oct. 20, 1949 unless
Sept. 23,1949 (Chicago, 111.)
Municipal Bond Club of Chicago
Field Day at Knollwood
Annual
RESERVE SPACE NOW IN
Country Club, Lake Forest, 111.
In
Sept. 30, 1949
Field
Investment
Club
Bond
THE
(Pittsburgh, Pa.)
Pittsburgh Fall
of
Outing at Chartiers Country Club.
26, 1949
Aug.
Bond
Club
(Denver, Colo.)
of
Mountain
Oct. 5-9,
(Colorado Spring*
1949
Colo.)
Denver-Rocky
IBA
summer
Group
National Security Traders As¬
golf tournament, Park' sociation Annual Convention at
Hill Country Club.
'
The Broadmoor Hotel.
frolic
Sept 9, 1949 (New York, N. Y,)
Oct.
11-13,
1949
Security Traders Association of
New York annual summer outing
and dinner at New York Athletic
Governors
Club, Travers Island.
Stock Exchange
(Atlantic
Fall
Pacific Northwest Group of the
Bankers
Associatior.
Opportunity—the chance to reap a real "Bonanza"—*
the many thousands of dealers, brokers, traders,
bankers and businessmen who will see and read the forthcoming Special NSTA
CONVENTION ISSUE, Official Organ of that Association.
Further, these people
are
regular readers of this publication!
So, send in your advertising space
This is your Annual Golden
meeting
of
of the
the
Board
of
Association
of
Firms at Haddon
Oct. 20, 1949
(St. Louis, Mo.)
by making your firm known to
reservation
TODAY.
Investment
1949
meeting
at
the
Gearhar
Hotel, Gearhart, Oregon.
*
Sept. 16, 1949 (Cleveland, Ohio)
Bond
Club
of
Cleveland
fall
party at
Sleepy Hollow Country
'
[
and election of
officers of Security Traders Club
In addition to
of St. Louis.
^
y
place at Colorado Springs
Annual meeting
giving Complete News and Pictorial Coverage
officers and members
Dec. 4-9,
1949 (Hollywood, Fla.)
Investment Bankers Associatior
Annual Convention at
Club.
Exclusively by The Financial Chroniclq
City,
N. J.)
Hail.
Sept. 9-11, 1949 (Oregon)
i
Published
and
the Holly¬
advertising in the Convention Issue are
associations by
of the Convention
taking
this October 5th-9th, this issue will contain a roster of
of each affiliate. Further, the bulk of the profits received from
turned over to the NSTA and its
advertising does double-duty.
affiliated
"The Chronicle"! Thus your
wood Beach Hotel.
THE COMMERCIAL &
Sept. 20, 1919 (New York, N. Y.)
,
New York Seciiritv Dealers As¬
sociation
ner
quarterly business din¬
meeting
at 5
p.m.
at the
Downtown
Athletic
Club.
Dec. 9,
1949 (New York City)
New York
sociation
Security Dealers As¬
24th Annual Dinner at
the Hotel Pierre Grand Ballroom.
FINANCIAL CHRONICLE * 25 Park Place * New York 8,
N. Y.
,14
(754)
THE
COMMERCIAL
&
FINANCIAL
its present parity even in the event of a sterling
devaluation.: Regardless of the correctness of such a course recent
experience
at
has
demon-^
clearly
strated the disastrous results that" present restrictions that encumber
from arbitrary decisions of the free movement of trade and
.*
: 7;
■
exchange.
The
monetary authorities of the
United Kingdom committed themselves
unequivocally
to
maintenance of
the
and left
no
in
advance
case
as
dollar
result
a
suffered
,
Wabash College, Crawfordsville, Ind.
economist, asserting today organized labor threatens American democracy, cites as objections
/ to industry-wide collective bargaining: (1) it establishes uniform wage rate regardless of varying local
conditions and thus destroys regional competition; (2) it gives union leaders excessive power; (3) it
centralization and cartelization; (4) it permits collusive labor-management monoply; and
(5) it destroys workers' incentive and morale. Refers to British experience as case in point, and con¬
cludes if wages continue to rise we will have serious unemployment or inflation.
promotes
the
-
tem-
a
decline, this would not be
disastrous but beneficial.
is
the
Canadian
logical
an
woulduserve
there
as a
This
deterrent to
un¬
single-minded aim to be essential U.S.
imports, and the ex¬
regardless of its effect change premium would serve the
British foreign trade or finan¬ same
purpose as the present im¬
cial prestige.
The lesson of the port restrictions.
Apart from the
previous disastrous attempt fol- incentive
provided for increased
lowing World War I to hold the ( exports ■? and the; stimulation oi
a
anywhere
or
in
world,
de¬
pends
which
totally disregarded.
te
policy,' history
Canadian gold production, a lower
When politi-
exchange level is
econom-
provides
table
coital
only
try at
Ish
a coun¬
traction
Canadian
insist
not
commitments
to
also
embarrassing
E.C.A. dollars to pay for Canadian
that
should
provided from U.S.
a
logically
be
sources.
'
large degree the rigidities
of the British system are
dictated
by the current economic situation.
Canada, however, is in an entirely
different
try has
a
position. No other coun¬
better opportunity at the
present time to take the initiative
in
effort to break
art
the World¬
wide currency impasse.
i
Although under " existing cir¬
cumstances Canada is faced with
difficult economic problems,
many
the
capital and the
restrictions that
such
a
terms
long
situation
is
un¬
questionably fundamentally
During the week the external
section
<
of
the
bond
market
Canada therefore
af¬
can
her
from
economy
was
*n sympathy with the tr®nd
of domestic securities. For the
same reason
assured of a very
The
also
following the
higher
internals
were
recent
.MUNICIPAL
'
■
-
-
r
-.
,
7
no
no
in-,
-
and
sociation
V.
Van
Sickle
challenge
the
over¬
riding authority of the State.
dividuals
have
this
and
enough
associations
to
that
means
Almost overnight
.
become
can
successfully
In¬
must
act effectively;
they must have
,
"laboristic
a
Harvard Graduate School pf Busi¬
ness
7 I
may
Administration.-.
7
:
'
I
reasonable
favor
re¬
the / exclusive
mo¬
of the power of V com¬
pulsion. The extent of its power
obviously depends on how much
pdwer
individuals and associa¬
tions
are '
permitted
to
exer¬
cise.
The greater the permitted
concentration of power in private
hands the greater must be the
power concentrated in the hands
in the productivity of the Amer¬
ican economy.
I believe that we
have
individuals.
ocratic
•
in
some
Anti-Trust
use'
reduction
far
more
vigorously than
date
we have done to
restrictive business
Anti-Trust plus further
against
practices.
tariff reductions can, in my judg¬
ment,
keep business competitive.
should
I
like
make
to
two
points here, before coming to the
issue at hand.. .The first point. is
that business has riever possessed
crippling
ized
j
bigness/even if they
on
result
shculd
the
the
Hence
successful maintenance of a deifi-
should
But
labor
owners
power
now
which organ¬
The
possesses.
would never dare expose the pub¬
lic to hardships as the controllers
of
the
workers s in
these
same
FRANCISCO, CALIF.—
Edward H. Guyon, Jr. has become
affiliated with Wulff, Hansen &
Co., Russ Building. 7~r>
ulation.
power
The
delicate
or
the
has been destroyed.
From a
material point of
competitive
reg¬
balance
of
enterprise rs
guarantor of abun¬
Su¬
eral
enjoin
practices
business
which
might restrain trade, even though,
fact
in
they have not been so
it is surely time to recon¬
used/
sider
the
immunities accorded to
Since
organized labor.
the rank
file of American workers are
and
genuinely devoted to the demo¬
cratic way of life it is in their
interests that we explore the pos¬
sibility
of
powers
11 i
unions
of
where
c u
unionism
down the
the point,
n g
to
and
capitalism
both operate effectively.
can
"7/-■?
Many limitat'ons have been pro¬
posed.-— Personally, I attach chief
importance
to
the
issue
of
industry-wide-collective bargain¬
done repeatedly.
ing and to it I propose to devote
point is that the
most of my attention.
granting of excessive power to
Organized labor on the ground Industry-Wide Bargaining Gives
businesses
The
have
second
•
that it is necessary to offset undue
corporate power is not the answer
to mistakes we may be making in
the field of business control. Two
wrongs
do
not
make
a
right.
of
organized labor in the United
States
are
for the most part gen¬
uinely unaware of the fact that
view1 they have become a threat to our
private
the
When
Court holds that the Fed¬
Trade
Commission
may
preme
•
They force upon us a third evil—
large the all-powerful. State that
a
segment of private' enterprise threatens to destroy all our liber¬
or
regulates it too minutely lib¬ ties. 77 1 •>'■/■'
I am satisfied that the leaders
erty ends, regardless of how hon-'
est the administration
unionism.
trade
of vital private businesses
power.
With Wulff, Hansen Co. 4
correct- and
prove
shall be forced to choose
we
recognize that Big Business between the destruction of private
also have more power than is enterprise and the destruction of
desirable.
strictions
nopoly
will
analysis
that
enough power to persuade but not
enough
to
compel//The 7 State
must
the Uni¬
ours has able
capitalism. ,. Unless restric¬
economy," tions are imposed it is my
to quote Sumner Slichter of the conviction that Professor Simons'
power.
John
private as-*
,
C. W. Leonard Co. Adds
GOVERNMENT
PROVINCIAL *j;'.
that,
dividual
If the State takes over too
the
CANADIAN BONDS
7
to
society depends upon a
advance of the bond market in
people's ability1 to keep power;
Canada.
Free
f u nds
likewise widely diffused among individ-:
were
strong but the corporate-1 uals, voluntary associations and
arbitrage rate was slightly easier, the organs of central and local
around 14%.
Stocks in the initial government.
Federalism is a vi¬
sessions were generally firm with tal
part of the American solution.
the golds advancing to their high¬
Humerous ."competitive 'private
est
level!; since December, 1947.;
enterprises are indispensable to
Following the setback in New the successful operation of a demYork however, there was a gen¬
ocratic society for the very sim¬
eral reaction that extended
ple reason that they make pos¬
throughout the list, f f ; . I
sible a wide diffusion of
(Special to Tiie Financial Chronicle)
s;
enough
favorable; private
reception.
SAN
j
must
possess
the new $100 million of
public officials. Unfortunately
25-year 2%% refunding loan, al¬ power can corrupt public Officials
though a little highly priced,j at.-least as>easily as it corrupts
ford to take the risks involved in
freeing
will
'
resources.
,
sound.
Fail¬
course
only result in the perpetuation
seems
To
all
at¬
development of Canada's
unparalleled wealth •; of natural
from'"the
point, of view of this country as
it raises the question of providing
goods
of
the
proper
provide
U.S. dollars in payment of certain
Canadian exports.
This,, in'turn,
!s
U.S.
of
be
necessary to protect the of artificial
controls and restric¬
dollar
at
its
present) tions but will also
prevent the
the fulfillment of current
on
Do¬
mature
more
should
follow
to
ure
level, the Dominion is obliged'to
British
a
prevent its free movement.
Mother Country..7For instance, in^
Order to maintain the exchange
reserves
policy
removal
the]
to
nor
com¬
Until; the
stage of development, it is clear¬
ly
indicated
that
the
primary
objective of Canadian finan¬
is help¬
moreover
Canada
U.S./Canadian
attains
economies of Europe.
Slav-; cial
to the present
course
Gov¬
ernment
dantly clear
on
account.
minion
adherence
British
group-
make it abun*
mercial
a
ful neither to
three
in order to offset the chronic im-
youthful stage of devel¬
opment, there would appear to be
little reason to follow the policies
which are adaptable to the ma¬
ture
indV/nsabfe
Zt /s
funds
these
among
fessor Henry Simons of
.
divided
in g s.
consid¬
versity of Chicago in his muchdiscussed
article
entitled, Some
v
Organized Labor Threatens
Reflections on Syndicalism.
/
American Democracy
(1941.)
This has always seemed
Extended observations of de¬ to me too extreme a position.
In any event it is perfectly ob¬
velopments here and abroad have
brought me slowly and reluctantly vious tha.t a Congressional ma¬
co
tne conclusion that the chief
jority can not be rallied in support
threat to private enterprise and of so drastic a solution of the
,hence.to political democracy problem.
More important is the
comes today from the side of or¬
question whether a majority can
ganized labor.
This threat is due be had 1 for imposing reasonable
purely and simply to the fact restraints which may give us a
that organized labor has too much workable unionism and a work¬
power
balance
consequences.
the case of Canada,
In
the
sure
too many examples of the mevit-
necessary to ensteadv
influx
of > tt <=;
is
these
by
erations.
in
way
influenced
are
upon
the
at its old parity, has been
' ; /'•
the
else
achieved
cal considerations dictate
.
were
presume that
initial decline.
to
would be
dollar
on
pound
Chairman, Department of Economics
-
Veteran
porary
If
easy way
rency level instead of the protec¬
tion of the national economy be¬
came
5
In any society, power is divided
among individuals, voluntary associations, such as
corporations, churches, lodges, trade unions, etc., and the compulsory association known as
permitted to find its natural level
the State, and its political subdivisions. The maintenance of democratic institutions, here
in relation to the U.S.
dollar, it
the pound
of retreat in
of unexpected developments.
defense of an artificial cur¬
The
If,-
Canadian
;
.
stem
this kind.
1949
By JOHN V. VAN SICKLE*
J
V
Reports from north of the border, seemingly authoritatively in¬
spired, indicate that Canada will do everythnig possible to maintain
;
Thursday, August 25,
'
..
—Threat to Our Democracy
By WILLIAM J. McKAY
currency
.
Too Powerful Labor Unions
Canadian Securities
her
CHRONICLE
American democracy.
7
Organized Labor Too Much
•./7,
discussed
I
this issue of
try-wide collective
a
•
Power7 // :••/:/
indus¬
bargaining in
statement which I made on June
10, 1948, before the- Joint Com¬
mittee/of
Congress on
Labor-
Management
propose
Relations.
Here
I
to restate the case against
industry-wide collective bargain¬
ing on somewhat different lines
and
to illustrate the consequences
more
from
f
o r
ei g n
than I did last year.
77
experience
/;
judgment- there are at
least seven objectionable features
(Special to The Financial Chronicle)
dance. This is due to the fact that; clusion slowly and reluctantly.
It
of
industry-wide collective bar¬
PORTLAND, MAINE—Philip, K'. it permits and encourages liter-' was not easy to emancipate myself
gaining which inevitably grow out
Leonard has been added to the ally millions of enterprisers, ?big from earlier emotional loyalties,
of the methods and the objectives
and little, to try out new ideas. It particularly in view of my aware¬
staff of C. W. Leonard
&
Co.,
involved in this sort of bargain¬
keeps the door wide open to tal¬ ness of the important contribu¬
Masonic Building.
*"/■/ ents with the result "that it turns tions organized labor has made to ing.- ; -V"' / !\;l / '7777/ 7 7
——wMWBW——*
1
'
Methods and Objectives
out goods and services on a scale1 our American democracy/ These;
an
essential
I myself have come
In
to this con¬
my
.
CORPORATION
>
centrally planned econ-! contributions were made when
Industry - wide collective bar¬
hope to rival. And in unions were comparatively weak. gaining is a-substitute for indi¬
77
addition it guarantees our
They depended for their accept-, vidual
per¬
plant, or local bargaining.
ance
HARTFORD, CONN.—Kenneth sonal liberties. Yet its
upon their inherent reason¬ The
men
very pro¬
representing manage¬
H. Roberts has been added to the
ductivity constitutes its greatest ableness; they were the fruits of ment
at
the
bargaining
table
persuasion. As unionism has grown,
weakness. 7 This is because
staff of
past
speak for all or most of the firms
Kennedy-Peterson, Inc./
its beneficial effects have declined
performances have created great
in the industry; the labor repre¬
75 Pearl Street.
'
*
'
and its harmful effects have in¬
expectations. In a mass democ¬
sentatives speak
for all of the
creased. It appeals more and more
racy private enterprise must sat¬
local unions.
These plenipoten¬
to force, less and less to persuasion.
Budd G. Moore Now With isfy these expectations.- If it fails
tiaries are empowered to commit
Like all other social institutions,
demagogues
will • persuade
the
their constituents with resoect to
Paul A. Davis & Co.
J disappointed masses to destroy;it; it has shown that it is subject to all of the issues on which they
(Special to The Financial Chronicle)
what may be called the law of
even
though its failures are 'due
have
agreed to bargain collecMIAMI, FLA.—Budd G. Moore to crippling restrictions placed diminishing social utility. Organ¬
(Continued on page 38)
/
ized labor has become too power¬
has become associated with Paul upon it by the government.
? i ;-j
ful for its own good and the good
^Supreme Court of the United States,
A. Davis &
My views on labor organization
Co., Ingraham Build¬
October Term,
of the country.
1945, American Tobacco
Kennedy-Peterson Adds
>
CANADIAN STOCKS
!
.
A. E. AMES & CO.
INCORPORATED
!
TWO
WALL STREET
NEW YORK 5,
(
N. Y.
(Special to The Financial Chronicle)
4-2400
NY
1-1045
that
no
amy
can
.
ing. He
•
WORTH
i
of
was
formerly
New
Miami
York
in
office for
charge
many
Does
officer
an
Gordon Graves & Co.,
Inc., of
of
their
years.
"'Statement
before
the
by Dr.
Senate
Van
Sickle
Committee
on
Banking and Currency, Washing¬
ton, D. C., Aug. 17, 1949.
this
unionism -and
Co.
mean
that
trade
private capitalism
are incompatible, that one or the
other
must
go?
This was the
conclusion reached by the late Pro¬
is
v.
not
United States.
necessary
The Court
that the
power
held, "It
(to con¬
the prices of a commodity moving in
interstate commerce) should be exercised.
trol
Its
existence
Harold G.-
Economic
is sufficient."
Quoted from
Moulton, Controlling Factors in
Development. 1949. p. 199.
Volume 170
THE
Number 4832
COMMERCIAL
FINANCIAL
&
15
(755)
CHRONICLE
Reynolds & Co. Exhibits at Morris County Fair
Dangers in Point IV
By MAX WINKLER
Bernard, Winkler & Co.
Members, New York Stock Exchange
Winkler points
Dr.
out heavy
risk involved in Administration's
proposal to guarantee private investments in undeveloped
Inasmuch
areas.
political difficulties invariably stem from economic
as
financial
and
complications, one welcomes the (efforts of the U. S.
directly and through various agencies, to aid world
recovery and rehabilitation.^ Laudable though America's efforts may
be, there is a
<£1
certain degree
well as the settlement of Greek
and Bulgarian D.Ps., making at
of danger for
the same time arrangements for
a
government
Government,
devoted to the
these refugees to become econom¬
capital istic
ically self-supporting. The League
also responsible for the res¬
toration of Estonia and Danzig.
Although the United States was
not a member of the League, the
country; through American in¬
vestors, : participated
generously
and
free
was
en¬
terprise
sys¬
'
tem to engage
in
activities
which the
in¬
dividual
in¬
or
stitutional
virtually all transactions spon¬
by the League, which di¬
rectly and indirectly aggregated
more
almost
t i
vely
profit¬
e c
and
ably.
in
sored
can
pursue
f f
is no
Regard¬
less
.
in¬
vestor
e
Vt-
Dr.
tions
Winkler
Max
how
of
impartial
wish to
the
Government
may
vorce itself from politics, and the
granting of credits or the exten¬
sion of loans or outright gifts is
bound to be influenced
cal considerations.
cipient in
re¬
position than
better
a
by politi¬
Nor is the
Testifying before the U.S. Con¬
*
gress' on ways and means to im¬
plement Point IV of the Presi¬
dent's Inaugural Ad<Jress, Secre¬
recommended
the League did not. tackle the
problem of world recovery as a
as
whole at once,
the United Nations
might proceed from area to area
and region to region.
The United Nations should, be;
requested
evolve"a plan
to
an
government
guar¬
..
.
(a) Conversion
native
of
most
urgently. The plan should be suf¬
ficiently sound and realistic to
it
individual
the
to
cur¬
institu¬
and
;
1.
Expropriation of property
adequate compensation;
(b)
without
and
(c) destruction of property in¬
cident to
is
war.
not
difficult
would
what
America's
have
to
imagine
to
happened
economy
recommendations
the above
if
in
been
had
force after the securities and com¬
modities
the
in
debacle
when
1929,
of
Fall
investors
American
abroad were unable to collect in
dollars,
interest
dividends on
of their hold¬
or
two-thirds
about
ings; because the debtors were un¬
able to obtain the requisite for¬
exchange;
eign
when Bolivia
or
in
the
Mexico
and
30's,
assist
expro¬
however,
motivating force in the
market, overshadowing such fac¬
the
War.
resources,
could
States
make
United
the
even
with
not
its
Despite
impunity
provid¬
ing further strength in prices dur¬
As of Au¬
gust 15 the short interest on the
New York Stock Exchange was
about 17 years.
tial
buying
by
the- largest in
The total poten¬
shorts may be
somewhat smaller than is indicat¬
ed
ings.
sumably includes some technical
shorts "against the box" for in¬
;
If world recovery is to be suc¬
cessful.
ii the
entrusted to
it should be
United
difficulties
which
with
the
despite
Nations,
this
Agency will be called upon to
cope while engaged in such task.
•
Conditions today are not much
different from those which ob¬
i
tained
after World War I, except
century ago in the world, espe¬
cially in Central and Southeastern
a
;■
Eurone. would have spread and
engulfed the whole world, if it
had
notv been
arrested * by
the
While unsuc¬
cessful in the field of politics, it
accomplished
veritable miracles
League of Nations.
in the realm of economics. It
instrumental
habilitation
birth
ery
in
of
Bulgaria
tax purposes
net
and
Greece,
as
the
mar¬
hibit
under
tent.'
a
exhibit will be
duration
which
of
the
-
visitors
The unusual
are
More than
expected to
attend.
on
the
various
companies
whose
tie-in
a
of
are
/
on
LOS ANGELES,
P.
Masterson
ciated with
has
CALIF.—John
become
asso¬
Floyd A. Allen & Co.,
650 South Grand Avenue.
He
was
the New York
and
New
with the
Exchange
quotations carried in the
the stock
daily newspapers throughout the
country.
of
Part
exhibit consists
the
of
reproduction of a financial page
from a daily newspaper, showing
the tables of daily quotations on
stocks on the "Big Board" and the
Curb markets.
Superimposed on
a
America."
Carrying
.\
-
motif
the
out
of
knowing what a particular stock
is doing is a Trans-Lux ticker,
which shows at a glance the cur¬
quotation
"tape"
the
to
drawn
is
the
i&C
vistor
Reynolds exhibition are
to a large board on which
eyes
of
a
.
listed
stocks
a
on
Exchange
years
on
*■;
roster of
the
New
that
to 13%.
196
LOS ANGELES. CALIF.—Frank
is
with
King
Merritt
&
Inc., Chamber of Commerce
Building. He was previously with
Herrick, Waddell & Reed, Inc.
Gold
International
the
by
sponsored
Committee
National
the
Coin
.
in
make
the replacement of deficits
surpluses, this can be done. "
"The
necessary
retrenchment
would involve some sacrifice on
with
deal, I believe
duty of bankers to
is the
.
leads the viewer's eyes to some
of
products which are nationally
advertised and sold by that par¬
the
ticular company.
individuals and
who have become
the part of many
study of this subject and
a
pressure groups
his
Yet
financing," Mr. Stuhl¬
miller continued, "provides such
an easy
way for the government
to obtain additional money, it is
that
.
the
savings—a small price to pay fo^
sound
monetary
system that
alone can save us from the down**
path to socialism and totalif
to
which
America'^
ward
tarianism
present irredeemable currency
taking us."/
•
*
.
i
of their prized lib¬
nation holds
that can support a
sound monetary system.
It is still
not too late for your government
to reinstate
its promise
to ex¬
"Fortunately* our
DETROIT,
gold stock
Moore &
as
change,
large
Americans
up
to 1933.
as
could
gold
be
announce
EbCr
the association
Spaukl^
ing, who recently was
the
irom
graduated
Babson Institute where
majored in economics and fijf
nance.
Prior,to his college work,
he
than
Mr.
the $20 gold coin
legally possess
for
Spaulding~was in the Army
about four years.
,
could
We recognize that if
taken prematurely
Geo. J. Martin Co. in N. Y.
George J. Martin has formed
George J. Martin Company with:
this step were
it
Building,
Co., Penobscot
them of Richard C.
with
at
still be slightly more
|
MICH.—McDonald-
members of the Detroit Stock
gold coin for its paper
the 1934 official de¬
valued rate of $35 per fine ounce.
At
this
rate
a
$20 gold piece
would
ip
I
It
1.2 '■in
With McDonald-Moore
erties.
a
Stuhif
a
American
are
many
money}.
Mr.
price to pay in order to stop longt
run
depreciation of the people's
themselves so rapidly
victim to the European
type of Socialism, the very system
that has already weakened those
nations
and
taken
from
their
people
easy
sacrifice,"
concludes, "is but a smaM.
miller
"Deficit
wonder
this
this
to
accustomed
reason.
no
being
by
acquaint their depositors with the
facts,'!1 Mr. Stuhlmiller gave as
half
sample stock certificates of some
of these leading companies, and
from each certificate a red ribbon
on
deserving of the public's full con¬
fidence.
By strict economy and
banks
which
that it
money
'
Committee
which is
Conference
Standard
Monetary
change
and are yielding from 3%
Sept. 8, sponsored /
Economists:<^on
Policy with foreign trade associa¬
on Sept. 8.
"Since money is a commodity
Stock
have paid cash
year for 25 to 101
on
Economists' National
tions
common
York
Around this roster are displayed
Chronicle)
by
falling
Pierce, Fenner & Beane.
to The Financial
announced
was
people
dividends every
(Special
It
v
reproduction is the
formerly with Walston, Hoffman
& Goodwin and
Merrill Lynch,
With King Merritt & Co.
in meeting
Parley
Monetary Policy that H. J. Stuhlmiller, former Vice-President of the
Iowa Bankers Association and a bank president, will participate in
admonition, "This is your stake in
this blown-up
From there the
"
-
;;by Economists' National Committee on Monetary Policy.
the
The theme of the exhibit cen¬
ters
H. J. Stuhlmiller wilt participate
display for the
five-day fair,
on
opened today.
100,000
Floyd Allen
x
Nation."
Iowa Banker (o Attend Gold Standard
atmosphere in setting up their ex¬
stock.
(Speeial- to The Financial Chronicle)
our
page
rent
Masterson With
Co.,
and the recov¬
into
ket when the shorts are covered.
Searle
re¬
(capital gains).
buying-power
effecting the re¬
the
people, borrowing
part
our
manager of
from the life of the late
Phineas T. Barnum, have followed
all
the
traditional
"side-show"
a
Such transactions would not bring
Austria,
of Hungary,
of
was
by this figure, because it pre¬
come
that
they are much more aggra¬
vated and urgent. The
economic
chaos which existed a quarter of
great industries."
The Reynolds
Stock
all of the losses sus¬
tained through the above happen¬
good
becoming "part owners in Amer¬
ica's
such at
this, we hope to do
in helping supply the
equity capital needed for the fu¬
ture of American industry and of
moves
Howell,
B.
of the 'mystery' out of
business. Through
some
the brokerage
the
the Morristown office
of Reynolds & Co., who said:
"We are attempting to person¬
alize investments and to acquaint
York
Curb
Exchange
stock
certificates of the companies and
shares,
in
Lawrence
trend of dividends.
position
ing
exchange
described
——
—■*
general public with its stake
by tak¬
in the future of America
Wall
of
and means of
ways;
of
2,006,119
,;
words
the
in
listed
business,
the
of this
of
Fair
products
of
trend
objective
move
by one
Street's
leading stock
best
stocks
the
as
over-all
novel
is
profits,, employment, and even the
ing the early future.
of
office
Morristown
their
to
houses
the prime
compensation: or in the 40's when
billions of dollars'vworth of Amer¬
result
for
when investor-preference
stocks rather than dollars becomes
The very large "short"
in stocks may be a factor
Europe and the Far East as a
will
be postponed until later on. The
time seems bound to come, how¬
priated American oil investments
without arranging for any kind of
ican owned assets were destroyed
this
h e t h er
w
York
New
in opening an exhibit de¬
signed to interest visitors to the
(Continued from page 2)
movement will occur soon, or
from
here
manager
market up to the flash point re¬
ferred to above.
It remains to be
tors
r
The
•
Swing
Will Be Upward!
ever
by participants in a Western^
arrived
Market
seen,
in America "out to the grass
member firm
Fair here today in an effort to carry the story of investment
roots."- Amid the mooing of cows and flying sawdust kicked
rodeo, officials of Reynolds & Co.
The Next Broad
*
HILLS, N. J.—Representatives of a New York Stock Exchange
TROY
"invaded" the Morris County
up
into dollars and their trans¬
rency
fer abroad;
vast
region
or
area
which needs such assistance
American
for
stem from—
in
for
re-!
and ^financial
economic
the
foreign in¬ tional investor.
vestments, especially insofar. as
they relate to difficulties which
antees
It
or
appeal to the private banker and
the Treasury Snyder financier who in turn will present
tary of
-
similar
achieve
impressive results. Just
habitation of
the donor.
v
X
dollars. There
why the United Na¬
cannot
even more
be, it cannot entirely di¬
billion
one
reason
at
the
risk of heavy
withdrawals.
offices
"Time would be needed for the
York
at
79
Wall
to act
stocks and bonds.
government to restore* its true
credit standing so that it would be
a,
City,
New
dealers in
Street,
as
THE
(756)
16
COMMERCIAL &
FINANCIAL
CHRONICLE
Thursday, August 25, 1949
L_
the
consolidated
the
union
referred
were
News About Banks
July 14,
In
CONSOLIDATIONS
NEW BRANCHES
NEW
REVISED
in
to
Plans for
institutions
issue
our
of
page 172.
stating that Ben C. Peticolas
Dale
Lewis
M.
Assistant
the board Mr.
in various
ceeding
the
Senior
capacities, advancing to
position of Manager of the
Relations
Department
in
Trust
1947.
Vice-President
as
and
worked
He
with
the
Aug.
would take
Manufacturers
New
York,
Trust
is
Mr.
retiring
Gill,
has
Mass.,
the
for
Je
Mr. Gill
Philip M. Burkard is President.
lercial Bank
Mr. Gill went with Raymond
Whitcomb Co., for which he
pany
tour director.
as
of the
most
has
Gill
time
since
in
acted
Mr.
.•ruiser.
8
capacity in Mr. Gibson's office.
*
*
York,
.han
Trust
Co.
of
New
that Raymond C.
announces
with
50
the
for
bank
more
Deering, formerly Comptroller of
bank,
has
been
appointed
years,
to continue with the bank
tors
He
Chairman.
and
Comptroller.
Mr. Deering is a past President of
the New York Bank Comptrollers'
of
dent
as
formerly Pres-
was
the
New
York
State
iankers' Association.
and Auditors' Conference and past
of the Bank Manage¬
It
Chairman
Marhlon
G.
Aug.
on
has
Snell
19
been
ment Conference of the New York
elected
Clearing House.
Trust Co. of Schenectady, N. Y.
Secretary
ciation
He
currently
National Asso¬
of the
of
is
Bank
Auditors
American
the
tion and
Life
Bankers
Associa¬
member of the
a
Insurance
Citizens
*
of
pany,
been
Security
Rochester, N. Y., it
by Bernard E. Fin-
announced
acane,
has
Dennis
director of the
a
Trust Co.
is
of
the
President of the trust com¬
according to the Rochester
New York State Bankers Associa¬
•'Times-Union" of Aug. 18.
Mr.
Dennis, who is President of Sib¬
*
*
tt
.•; >•
-i.. *
ley, Lindsay & Curr Co., entered
The election to the board of di¬ the employ of the latter as a part
tion.
'
-
rectors of
the
Commerce,
■'
,
Industrial
at
56
East
Bank
42nd
of
St.,
New York, of Samuel Barbour was
announced
E.
Aug. 18 by Walter
President of the bank.
Kolb,
Mr.
on
Barbour
is
Vice-President
and director of The Linen Thread
Co., Inc., and
formerly Presi¬
dent
and
General
Manager of
John Leckie, Ltd.,
Toronto, Can¬
He
ada.
United
time worker while
attending high
During his 45 years asso¬
ciation
with
Sibley's,
says
the
"Times-Union," promotions have
carried him through all phases of
school.
business
the
also
Shoe
direc
a
Machinery
or
"of
Corp.,
Boston, Mass.
bundle
boy to
the Presidency.
Pell,
of
Chairman
United
States
Co. of New York, died
of
Trust
Rokahr
was
elected
President
of
Bank and Trust Co. of
succeeding
Francis
Bar
law in
when
in
1904
New York
he
to
trmffNew
and
Co.
came
President
of New
He
be¬
that
company
in 1938 and Chairman of the board
Mr. Pell was also a trus¬
in 1947.
of
tee
Bank
tion
the
of
and
of
Greenwich
New
Governor
of
the
Savings
kahr
York;
the
an Honorary
Society of the
Paper Co., Atlantic Mutual Insur¬
ance
Co., The British General In¬
surance
Co.,
Ltd.,
Commercial
Union
Assurance
Co.,
Ltd.,
The
Co.
Ltd.; The Union AsMaurance Society Ltd.; The Ocean
W Accident
and
Guarantee
Corp.;
Casualty Co.; Centen¬
Insurance
Co.;
Manhattan
Columbia
nial
Fire
and
Mr. Pell
Marine
was
Insurance
born in
Co.
Gosnen, N.
Y., in 1881.
*
«
had
Frank
J.
Mooney,
Vice-presi¬
on
Aug.
He
was
resided
15
after
brief
a
62 years old.
in'
illness
Mr. Mooney
Bogota, N. J.
Ee
was
born in New York and started his
business
career
in
1G06
wita
th.
Mercantile Safe Deposit Co., which
three
the
members
Bank
of
Vir¬
ginia, Richmond, Va., as new As¬
sistant Vice-Presidents and a new
Assistant
proved
Cashier
by
have
been
directors
the
of
ap¬
dent.
The
assignments
new
Utica, N. Y.
McGinty
G.
5.
therefore
and
Mr. Ro¬
been
L. Ralston
Mr. Bates joined the
staff of the bank in 1929.
he
reported
for
In 1940
active
:
1946
Assistant
an
as
Cashier
in
the
adjustment department.
In
July that year he was granted a
year's leave of absence to enter
the service
of
the
State with the
Department of
Office of the For¬
eign Liquidation Commissioner in
Paris.
He
took
charge
South Richmond office in
this
of
his
Mr.
year.
banking
of
the
January
Perkins began
with the Rich¬
career
and
Trust
He
made
was
Cashier in
ant
Co., and joined
Bank of Virginia
1942.
Assist¬
an
Mr. Thomas
*
of
of
New
Executive
the
Union
Na-
tated
that Mr. Kenney had been
National Bank Examiner, atthe
Third
District
Federal
with
Philadelphia.
He
in
made
was
1945
after
his
return
from the service.
Manager
for
a
time
in
the
Re-
headquarters
It
likewise
*
*
appointment
Chisholm,
of
.
Effective
Aug.
Bank
22
&
the
Passaic
Trust
Co.
Manager
National
of
of
the
Detroit,
of
at
Detroit, Mich., has
been
announced
by
Charles
The
office
new
Seven-Mile-
—
bank's other offices,
*
*
e■■■
*
Clifton
named
Bank
and
Trust
Co.
The union of these two banks
vhich have long served the inter-
communities
of
Passaic
Clifton, was dictated, it is
stated, by a belief that the best
of
these
communities
vould be better served
by a larger
)£
the
organization.
Passaic-Clifton
Resources
National
and Trust Co.
approximate,
said, $100,000,000 and it has
apital funds of over $3,700,000.
t
employee
,
Ceorge Young Jr. of the Passaic
as
President of
Chairman
directors
&
of
the
of
the
board of
Covington
Banking Co., it
was
Trust
announced
July 30, according to the Cin¬
cinnati
"Enquirer"
of July 30,
on
which also
said:
"Mr.
Kays succeeds Dr. J. D.
Northcutt,
Covington
surgeon,
who resigned as Chairman after
five years.
Dr. Northcutt still is
a
has
faculty
post
ers'
After hav¬
he
important
many
Chairman
became
offices
of
in
the
associations
states
and
attle
the
in
would
University of
ing held
Banking
curriculum.
"Oregonian" noted that the
school is sponsored by the bank¬
for
six
western
held
be
at
weeks
the
in
Washington
two
Se¬
beginning
Aug. 22.
Bank and Insurance Stocks
By
H. E. JOHNSON
This Week—Insurance Stocks
As most of the
semi-annual
major fire insurance companies have issued their
statements
of operations, it is now possible to make
comparison between results for 1949 and 1948.
Geyer & Co., Inc., 63 Wall Street, New York 5, one of the larger
investment houses specializing in bank, utility and insurance stocks,
has done this in a tabulation of the preliminary operating results of
31 fire and casualty insurance companies.
some
In
addition
to
the
approximate
price,
current
the
tabulation
shows the capital stock equity at the end of June compared with the
similar figure for December 31, 1948.
Also shown are the invested
and total assets per share and
half of 1949
as
well
as
the net premiums written in the first
the percentage gain
in volume over 1948.
The
earnings fo£ the period are - shown in these various com¬
ponents and adjusted for the expenses estimated to have been pre¬
paid as a result of a higher volume of premium underwritings.
To
complete the table, earnings for the 12 month period ended
30, 1949 are shown where available and a five-year average,
1944-1948, of adjusted earnings is also shown. As a final column the
indicated current annual dividend rates are included.
June
The tabulation by Geyer & Co. is very helpful in making com¬
parisons of current results between the various companies. It saves
considerable time
when
other
information
convenient
per
share figures
in
an
desired and provides
are
accessible
form.
The earnings estimates for the period have been taken from the
table for some of the more prominent fire insurance companies and
are
below.
presented
Per Share
Fire Assoc.
Earnings Before Taxes:
Fireman's
Fund
Ins. (New'k)
St. Paul Fire
Ins. Co.
& Mar. Ins.
of N.A.
$
Underwriting Earnings
Est.
Operating Earnings
Fireman's
of Phila.
$
$
$
7.40
_
$
2.30
2.40
3.90
5.22
1.43
Income Taxes
1.29
6.38
6 51
2.08
1.00
3.99
2.59
7.52
3.99
10.37
9.10
3.08
Total
2.48
2.99
11.21
Income
0.59
5.44
2.38
Prepaid
Under. Earns
3.14
8.83
Exp.
1.49
1.24
2.04
2.19
6.91
*
The
directors
*
*
of
the
Federal
Reserve Bank of St. Louis at their
regular monthly meeting
Six
Mos.
ended
6-30-49
8.13
6.03
2.75
8.33
Six
Mos.
ended
6-30-48
4.11
3.29
1.18
4.65
4.78
Div
2.50
2.60
0.50
3.50
2.25
Indicated
With
Annual
the
return
of
profitable period of underwriting all of
able to show substantial improvement in
Premium volume during the period continued
the above
companies
underwriting results.
to
a
were
increase although at a slower rate than formerly.
prepaid
on
the
larger volume
Investment
able
and
at record levels.
were
and
some
income
•".CiV
^iVv\
reflected
increase in
a
larger
elected
Expenses were
underwriting earnings
adjusted
volume
■
of funds
^•^•"■'-3
avail¬
yields.
Federal taxes showed large increases reflecting primarily the
improvement in underwriting earnings. Last year taxes were lower
because in a number of cases statutory underwriting losses were
shown while in others profits were of minor importance.
A
large part of the gain in underwriting and investment income,
was
carried through to net operating earnings.
In all
results for the first six months of the current period
however,
cases
were
the
substantially above those of last
With the fundamental
remaining months of
year.
factors in the industry continuing favorable, the
the
current
the
year
dustry.
year
should
should show comparable results, and earnings for
be
at
the
highest level in the history of the in¬
"y•
Although
.
a
number of the companies have increased their div¬
within the past year, current payments con¬
idends to stockholders
tinue
conservative.
In
the
first
six
months'
period,
income for three of the companies covered the full
member of the board."
is
National continues
Oregon,
The
em¬
A. P. Giannini in 1906.
T.
Fisher, Jr., President of the bank.
C. Lisle
Kays, of Covington,
Ky., a member of the Kenton
County Airport Board, has been
National
a
Coast
analysis, which has
included
been
by the late
Bank
ional Bank of Clifton, N. J., were
consolidated to form the Passaic-
3ank
oldest
credit
vanced
is
in
as a messenger
a
office
new
of
'assaic, N. J., and the Clifton Na-
ranking
ployed
Ronald
as
1933, and in recent years
has been Manager of one of the
'
*
Portland,
Pacific
Adjusted Operating Earns.:
The
M.
tion in
merest
activities,
point of service, having been
Federal
ernment service in 1934.
private
of
appointed to
the
-;w
Winthrop Office—was opened on
Aug. 15.
Mr. Chisholm, the De¬
in
that
Vice-Presi¬
a
Aug. 10, from which this is
learned, said Mr. Watson would in¬
struct a third-year class in ad¬
over-all
with
loan
of
bank's
bank's
troit "Free Press" states, has been
with the bank since its organiza¬
was
"News"
Watson,
School. The Portland "Oregonian"
Ferroggiaro, who is Execu¬
Vice-President
Net Invest.
Mr.
the
was
National
"Mr.
tive
department in 1944.
He became
supervisor of the department, then
worked
been
said:
Adj.
South Richmond office.
Co-ordi-
*
of
adjustment, de¬
the
Bank
Aug. 10. The Los Angeles "Times"
of
Aug. 11, reporting this also
Mr. Curry, now
of
Russell F.
at
Assistant
banking
business before entering the gov¬
in
•Cenney
bank
*
dent of the United States National
Senior
of
the
except for three years in military
ional Bank of Newark, N. J., at a
tated
of
and
Administration."
of
member
on
partment of the bank joined that
named
was
issue
neeting of the directors on Aug.
6, it was reported in the Newark
Evening
News."
That
paper
n
office
the
to
Vice-Chairman
military
duty and returned to the bank in
Cashier
President, Mr.
Kenney
/"ice-President
to
elected
are
Richmond, has been named Assist¬
The
Treasurer.
*
R.
3runswick
erve
Ferroggiaro,
the
Curry, Manager of the adjustment
service.
■'V'-'
ached
A.
ica, National Trust & Savings As¬
of San Francisco, was
G. Perkins, of the Peters¬
burg office and Lewis P. Thomas,
Vice-
*
Thomas
i
Fred
Beise, Execu¬
Vice-President
v
of the board of the Bank of Amer¬
Frank
ant Cashier.
tive
nator
effective Sept. 1. The three named
as
Assistant Vice-Presidents are
of the Roanoke office.
Bankers
of
Co.,
the election of S. C.
fi:
bank, according to an announce¬
ment Aug.
22
by
W. W. McEachern,
Executive
Vice-Presi¬
the staff of The
md
dent of the Chase Safe Deposit Co
of New
York, in char?e of its
branch at 11 Broad Street, died
for
of
in 1933.
our
ocking
*
staff
Aug.
cGinty, was noted in
16, page 2600.
Commercial Union Fire Insurance
Co. of New York; the Palatine In¬
surance
the
director
board has been filled by
has been with the bank since then,
President
James Founda¬
New York Hospital and a director
of the following: Great Northern
Promotions
of
Senior Vice-Presi¬
a
Sept. 15.
the
*
joined the staff of the bank after
nis graduation from college and
practiced
York.
of
*
has
who
America
supervision
old.
*
First
President and Treasurer.
Ci'y until 1912
joined the United States
Trust
67 years
was
on
>f June
admitted
he
Harold
Pell
was
the
post of Assistant Secre¬
the
P.
June
on
was
death of the former
York
with
Philadelphia
elected Executive Vice-
died
Aug. 22
at-the Presbyterian Hospita
York City, at the age o
on
of
mond Trust Co. and the American
Theodore
22
who
Williamson
the
Bank
Stark
the board
from
was
is
Co.
department at the bank's office in
Willard
E.
dected
Group
Committee
the
of
if.
*
and
Comptrollers, a member of the
Bank Management Commission of
President
Trust
former
Baer,
ington, D. C., on two occasions,
serving in an administrative ca¬
pacity.
J'
■
Richard F. Bates, in charge of the
bank's
South
Richmond
office;
announced
was
hat
*
tary when he retired. At his death
on
and became Presi¬
dent in 1931; he retired as head
>£ the institution eight years later,
Dut was persuaded by the direc¬
the
Vice-President
years
iated
*
Harvey D. Gibson, President of
Manufacturers
a
Lake
his
cabin
Mr. Gillespie, who was
of age, had been asso-
*
Williams, who for 40
S.
New York, effective
His seat on the Bank of
took
Harbor.
Francis
System in Wash¬
Reserve
sociation,
associated
was
heart attack
a
m
Aug.
18 while
Jhamplain
trip
in
During
1933
held
Co. of Al¬
Trust
&
the
until his retirement two years ago,
died on Aug.
17.
Mr. Williams
*
N. Y., died of
bany,
secretarial
a
H
William M. Gillespie, Chairman
>f the board of the National Com-
the office stenographer.
From the American Express Com¬
&
*
Girard
4c
Peticolas
alter Pearl
William H.
chartered in 1935.
was
Mr.
soon
to
years
that time
travelled
Y.,
Association
at
was
ernment
58-22 Myr-
N.
that
in
New York
modern building at Forest
new
indicated
was
all Japanese banking in the
area for the U. S. Gov¬
over
Aug.
on
Avenue, near Myrtle Avenue. The
College, went to work
Express Com¬
Boston.
moved
Brooklyn,
Avenue,
its
American
in
pany
Association
It
"News"
i5 from its quarters at
tion with Mr. Gibson goes back to
1902 when Mr. Gibson, just out
of Bowdoin
*
Federal Savings and
The Home
Loan
been with the bank
However, his associa¬
1933.
since
native
a
*
*
of Aug. 31.
of
Hudson,
as
banks.
that James
F, Gill, Assistant Secretary of the
bank,
vising the consolidation of the two
in
.930.
Company of
announces
Chase
the
witn
rneiged
12 added that he
the duty of super¬
over
Trust
y
of
Ferroggiaro is suc¬
Vice-Chairman
and
dent
of the Board of Governors of the
Federal
of
^
Vice-Chairman
Senior
been elected
staff
Controller, the Newark "Evening
Harvey D. Gibson, President of
"As
Bank
Co.
General Finance Commit¬
1944.
in
Aug. 15. Mr.
Lewis entered the employ of the
bank on June 9, 1926 and served
News"
CAPITALIZATIONS
,
bank's
tee
Vice-
effective
President
of West Orange, N. J., has joined
the
Passaic
National
Bank
&
Bankers
and
OFFICERS, ETC.
bank.
the two
of
investment
indicated annual
payment. In all cases net operating earnings for the period covered
annual disbursements by a considerable margin.
These favorable
results indicate the likelihood of more liberal payments for these
as well as other companies in the
period ahead.
COMMERCIAL
THE
Number 4832
170
Volume
&
FINANCIAL
CHRONICLE
Says Investors' Case
Let's Have No Reckless
I
Counsel
Investment
-
f
.
George Putnam Fund of Boston,
more than IS,000 sharehold¬
\
wires
ers,
<
Chairman
r
of
shareholders
in it
|
ing conference in Washington.
|
dependence
Steel
have not fared
' I
'
handicap to agreement between two countries
a
as
•
forthcom-
at
Defends British bilateralism and
holds to force multilateral trading on Britain would
Wage' Fact Finding Board steel
p risks with their savings, cautions against any actions to encourage
reckless buying of common stocks by public.
By PAUL EINZIG
v
I
with
-
Schlesinger, though applauding statement of Chairman McCabe
of Federal Reserve Board in urging investors to take reasonable
/ *
,
Pointing out growing concern in Britain regarding adverse Ameri+»can opinion on British Socialist Government
policies, Dr. Einzig sees
,
Mr.
■
f
V/vV'
EDWIN J. SCHLESINGER
II
and U. S. Criticism
Should Be Beard
Buying of Common Stocks!
'.By
(757),
continued
mean
American aid and demoralizing effect
on
\
British
on
worker...
-
-
.
The statement made by Mr. Thomas B. McCabe, Chairman of the
of Governors of the Federal Reserve System, before the sub¬
committee of the Committee on Banking and Currency of the United
Senate
Aug. 5, 1949 is worthy of great consideration. In
fact, ft would^
—
—-r—; ' v '
"
Mr. McCabe goes on to say: ,
be a splendid
on
,
.
t h i
n
i f
g,
everybody
with
■<"
for
investment
1
V'
dollar
a
available
■%
"-
c
)
o
mm
stocks
in
o
n
were
-
equipped to
thoroughly
understand
the / various
oposaIs
p r
made
by
Mr.
i;
-The
:;y
state¬
ment
starts
with
the fol¬
Vv'/-
lowing sentence:
;
;
■.
,
general
marketing securities to
extraordinary consideration
ways and means of informing
the public more fully about the
investment opportunities
ownership."
;
However, what is far more im¬
portant is that the dangers'in¬
In saying: "We do not want the
;
small incomes that character¬
of
ized
the / years
of
the - late
twenties," Mr. McCabe is asking
for
something rather Utopian.
*
Somewhat
with assuring a steady
appears:-
"The
safety
the
on
fol¬
desire
in
"
of
individuals
investments
in
revealed
postwar
been
Surveys of
the
Con¬
Governors
conducted
for
years
for
has
Finances
sumer
the
of
'
in
Board
the
of
Federal
Re¬
System by the Survey Re¬
serve
search Center of the University of
Michigan. These surveys suggest
that an -overwhelming
majority
of the population as a whole save
primarily
such
and
adequate flow of savings into
security * reasons,
for
/
for
as
a
day, old age,
raAny
will
cases
where
is
problem
a
itself
of
care
business
in
enterprises
honest
sold at
managed,
merchandise produced and
fair prices,";
v'V
The- Twenty-Sixth
Annual Re¬
port of the Board of Governors of
the Federal Reserve System for
the year 1939 carries a paragraph
which.it may still be time to act
on. Reference is to the following:
Advisory
Federal
"The
i;.
Coun¬
fundamental
effects
the
of
tinuing cheap money policy have
not been fully appreciated, recom¬
that
the
of
Board
Gov¬
ernors
of the
Federal* Reserve
only will the country's un¬
System conduct a study of the
derlying economy be
strength¬
long-range consequences of the
ened, but investors will be well
continuing policy of cheap money
advised if they look out for a
upon the accumulation and in¬
rainy day, old age or an emer¬
vestment of the savings* of the
gency.
However, ' to accomplish
people, and upon the financial
this, they will have to be very structure of the
country, with es¬
careful as to the proportion of
pecial reference to its
effects
their- total assets they place in'
upon
the
maintenance
of
a
common - stocks.
Before
buying
sound banking system." -;: / * ; i *
common stocks, an investor should
The
thing
that: should
be
(1) have a fair amount of life
insurance,- (2) be in a position avoided, under all circumstances,
to own his home, (3) have suffi¬ is to get the American people so
cient cash in the bank tcr take steamed up that they buy stocks
care
of emergency expenses and in reckless fashion, regardless of
value. The economic situation to¬
block of E bonds. If,
after these provisions are made,
he feels- that he wants to buy
a
own
a
risks
involved
should
he
istocks,
common
make
day is such that no steps should
be taken which might bring about
first
that
form
1929-1932 period.
of
Let the
investment.
Since- life- insurance
have
be
to
proven
for* millions of
the dark days of
the 1930's so clearly demonstrated,
it does not seem that they should
citizens,
be
equity financing.
or
encouraged
considerable /; attention
from many of the large life in¬
surance
companies are likely to
ment
Loewi & Co.
Finance Forum
7,
much
of
is
Milwaukee
of
friends.
Assuming for: the moment that
purchasing
sponsoring
the
common
will
Should
be
/
Speaker
of
1
stock¬
the' Women's
the
of other American busi¬
to
Dr.
agree
Pavl
Einzif
'/y
icisms has
years
income and that during
no
T
'
•
been
unfair.
'■;
it is
such critiFor the
Gerald
U. S. National Bank Building.
policy resulting in
high social service
a
wages,
stances
inevitable.
was
Government
the
prevailing circum¬
in
this
was
working
short
The,
unable to induce
work
standard
is once
position to pay its way.
classes
to
harder and accept lower
of
living until Britain
in
more
a
The reason for this
was
that there
feeling that the deficit of
foreign trade could always be
covered by means of American
was
a
our
financial
assistance.
But
for
that
praise on account of the progress
of her recovery. Mr. Hoffman, Mr.
States continues to insist
Finletter
the
to
and others were paying
highest possible compliments
the British Government, and
the
later .-.was
I
the last twelve months, except
employment and gen¬
prosperity depend heavily on
recognition of the- investors? in¬
to
do
his
output.
taining
long
huge
a
increase
to
utmost
So
as
on
export
the
United
the
main¬
surplus,
if it has to be financed at the
even
of
expense
American
the
tax¬
payer,
any
British Government
will have a very difficult task in•,
-
Yet nothing has
changed during
the
Britain
on
the
ground of the bi-
lateralist trend of her trade
policy
which has deterio¬ need careful re-examination. To
rated quite considerably—though a large degree they are inconsist¬
terest.",:,
no
particular fault of Britain. ent with the criticism of the un-».
'(Signed), > George / Putnam
Charles M.
Werly and Richard That is to say, the fundamental duly favorable treatment of the
British worker. The reason why
Osborn, Trustees of the George faults, which are at the bottom of
dollar position
,
Britain's unsatisfactory
Putnam Fund of Boston."":
balance of
$5 Million lo Colombia
construction and Development on
payments position were in exist¬
ence twelve months ago
fully as
with,
Articles -of
to its
cated
Semi-annual
ments
and
the
Bank's
Agreement, • is:: allo¬
special reserve fund.
amortization / pay¬
will
are.
loan by
begin May 15, 1952,
designed to retire- the
maturity
on
Nov. 15, 1956.
Price & Co. in Baltimore
BALTIMORE,
MD.—W.
James
Price has formed Price & Co..
in
Mercantile
the
act
as
with
Trust
distributor of
which were in op¬
when American
newspapers
and politicians had
nothing but praise for the prog¬
mental causes,
eration at a time
ress
of British
main
P.
*
to
The
Financial
of
Chronicle)
Lincoln
E.
lize
the British
that
he
must
worker
work
rea¬
out
his
progress was
the-adverse trade
balance.< What the American
newspapers
and politicians show¬
ering compliments on the British
Government did not know at the
time was that during the second
bilateralism
to
make
one
realize
that,
in order to consume, one
must
produce. Had the United
States adopted a bilateralist pol¬
icy in relation to Britain after the
war,
the British worker would
undoubtedly
make
all
felt forced to
sacrifices
have
the
necessary
and exertions to increase his out¬
put
help.
his consumption
relying on American
Britain were to " accept
curtail
and
instead
of
If
American criticism of her bilater¬
alist
policy,
and
trading methods
troduced
only
at
mean
this
multi-lateral
to be in¬
stage, it would
if
were
that she would come
to be dependent on American as¬
sistance to an even larger degree
equilibrium of the Brit* than
hitherto, which again would
balance was achieved
produce a demoralizing effect on
largely by giving away British the British worker.
r: *.
goods for'nothing, through exces¬
sive repayments of war debts rep¬
half the
ish
trade
war-time sterling bal¬
it should have been
obvious .already
then that the.
achievement for which the Brit¬
Also
Ingalls & Snyder Admit 2
Ingalls & Snyder, 100 Broadway,
York City, members of the
New
New
York
Stock
Exchange,
on.
ish Government claimed, and was
Sept. 15 will admit John -T. Sny¬
joined the staff given credit, - was bound to be
der,. Jr., and Roscoe C. Ingalls, Jr.,
McRae, 449 Main purely temporary, and was bound to
partnership.
to be nullified by the appearance
ROCKLAND. MAINE —Donald
G. Cummings has
Street.
index of that
resented by
With Lincoln E. McRae
reconstruction/ The
the reduction of
ances.
(Special
Government finds it difficult
make
As for the own salvation lies in the concep¬
immediate cause of the widening tion that the United States are so
of the dollar gap, it is the trade very keen on maintaining a large
recession in the United States, as export surplus that they are' pre-'
pared to finance such a surplus
a result of which less is imported
from the Sterling Area and lower indefinitely. There is nothing like
-
accordance
to
much as they are now.
Aug. 19 granted a loan of $5,000,-.
prices are paid for the diminished
000
to
the
Caja
de
Credito
imports.
Neither the British na¬
Agrario, Industrial y Minero of tion nor the Socialist Government
Colombia to finance the purchase can be criticized for this immedi¬
of agricultural machinery.
<
.
ate cause.
The loan is for a term of seven
*
There are of course the funda¬
in
the
.
World Bank Grants /
Building to
Peters, Writer & Christensen, Inc.,
a
British
feeling the British worker could
have, been induced once more, as
he was in 1931 and again in 1940,
tinued high
;
t
at
almost
an
for
charges brought -against Britain
were equally valid, or equally in¬
valid twelve months ago, and yet
American newspapers and politi¬
cians were then singing Britain's
eral
(Special to The Financial Chronicle)
—
was
year
-With Peters, Writer Firm
DENVER, COLO.
of
.
.
Peters, Jr. has joined the staff of
pursue
Possibly
quarters on this side of
felt that the timing of
mutual funds.
i)
capacity,
there
demand
charges, high taxation, and
working hours.
.
be reluc¬
British Socialist Government,
interested
vitally
prosperous
offices
uUKKKm—*
advantage
in a position to
British worker'
1948 they quote such compliments against persuading the
the British experts or Opposition that he has to rely on his own
received, 30% less than in 1930
effort instead of depending on
and 40% less than in 1929?
This politicians; criticising its policies.
in spite of the
fact that IJ. S. And now the pendulum of Amer¬ getting something for nothing
from the United States.
Steel produced more tons of steel ican opinion has swung into the
While there is undoubtedly a
in
1948 than
in 1929, provided opposite direction, and spokesmen
Of American opinion compete with great deal of truth in American
employment for more people, and
each other in-condemning British criticisms that the British worker
paid
two-and-a-half times
as
is pampered, the attacks against
:..
: much in wages and salaries. Con¬ economic policy. r( : :
ceived
the
Finance
country's
when
high
the Atlantic, which share some of
the
American
criticisms of the
the owners of the
great U. S. Steel Corporation re¬
of America.
Forum
the
millions
speak for all investors but on be¬
half of the 13,000 shareholders of
this Fund we do speak. Do! you
realize that
in six of the past
holder be
government in respect to the.
prices for his crops.
States
Even in
Know
Blair, founder and executive di¬
democratic- form rector/of
permitted to rpn to the
government and cash in his stocks
for what he paid for them or a
figure close thereto? If' not, he
will ask why the farmer receives
a
more
favored treatment from
the
Congress.
these
that
porations including National Steel,
U. S. Steel and Youngstown Sheet
and Tube. We do not presume to
evening will be Mrs. Lorraine L.
of life if the market takes a nose
Will
submit
and women and the
twenty
full
to
tant
We
J are
the
unlimited
George Putnam
story.
years and! is guaranteed by the
Republic of Colombia. Interest is
at the.rate of 2V2%, plus a com¬
mission of 1% per.annum, which,
/
subject
Finance."
About
com¬
stocks, it may be asked what
will the result be to our national
and
The
Women
"What
mon
economy
of
Gov ernment
heard
nesses
take
goods, the Government preferred
Will
parties .to this controversy. The
George Putnam Fund owns shares
in many leading American cor¬
for its women customers and their
into
time
United
Fact
owners
to
Opinion,
166,000 owners of U. S. Steel Cor¬
more
stocks.
influenced
of
at¬
to; a solution
which, however useful and neces¬
Y ou-ha v e
^/
heard Management's/What about sary it may appear, is likely to
the
investors'?
There are over have an unfriendly' reception in
men
to
lAmerlcan
*
poration.
open
reserve for rainy days
by exporting to the utmost limit;
the
titude
Fact
Labor's
was
already then for having
substantial
of
hostile
n,
esident's
Finding Board
MILWAUKEE, WIS.—Loewi &
Co.
the rank and file of our citizens is
dive?
result
has
but
case,
Daugherty,
Your
in
now fear¬
thatfr: as a.
ed
:
Government
criticism
the sellers' market while in oper¬
ation. Instead of building up a
any
York.':
British
were
failed
jit is
am open
forum on Sept. 20 at
stable invest-1 7:30 p.m. in the Elizabethan Room
than the. purchase of com¬ of the Milwaukee Athletic Club
prove a
Those
assessed
R.
Steel
4
—
of the buyers' market. Indeed the'
high
to
m a
<$>
•
very
Carroll
r
'■»
•never
the
telegram
P
' ~
-
to
ceiving,-
18
*
.
,
buy common stocks. The housing
developments which are now re¬
mon
v/t
'
as
permitted
sions.
Aug.
'The International Bank Tor Re¬
government balance the
budget, reduce the national debt,
unpeg interest rates and it will
not have occasion to worry about
companies
fi¬
the 'last
nancial T.refuge
our
unhappy consequences of the
the
point of finding out the
in
discus¬
chances
;
of criticism directed against Britain
press
Washing-
ton
shareholders,
con¬
Not
(4).
ing
;
on
cil, considering that many of the
mends
emergencies."
take
soundly
are
lowing
-
further
*
-
The- statement: "We need to be
concerned
that
'
more
with
volved be clearly and exhaustive¬ Finding
ly enunciated. ;v'/r
' Board, New
their
>
Boston, a mutual
organization, with assets of
$35 million and
than13,000
over
wave
and American politicians is causing growing
;coneern in London.
Official circles fear that it tends to weaken
further the chances of a satisfactory solution
resulting from the com¬
Chair
!
•
.
equity ownership"
/;
in stock
LONDON, ENG.—The
by the American
following
and
<
fund
sent
to
try to take reasonable risks with
savings."
•
George Put¬
of
Fund
give
unwillingness on
the part of investors in this coun¬
a
en¬
nam
gaged: in
"Until recently there has never
been
those
wage-earners.
The Trustees of the
over-selling of stocks to receivers
McCabe.
Edwin J. Scblesinger
"I would like to urge
as
:
/
Board
States
well
■
18
THE
(758)
Public
COMMERCIAL
&
FINANCIAL
CHRONICLE
Utility Securities
"The
is
equity, and the fact that the company does nearly 8% of the
utility business in the country, the stock might naturally be ex¬
pected to sell on a better yield basis.
>
of
millions
the
(1) Due in part to
large
the
steam
air-conditioning load.
The company is developing the use
for air-conditioning, and machinery has been developed
this
purpose,
so
there
summer,
take the
to
as
been
has
steam
red"
a
department out of 'the
believes there is a
and investments.
during summer months.
The company
large future potential in this development.
and
(2) The company has also benefited by the television load.
phenomenal sale of television instruments in New York City
lagged in the last two months, but is reviving due to the fact
The
has
that instruments
the Federal
be sold with little
now
can
Reserve credit rules
or
no
a
its
on
lines.
television set,
of which
This
No
down payments,
revealed that
was
upon
increased 15 kwh
during the evening hours.
This
an
average
installation of
month, most
■>> (3); the
interests
has benefited this
(4)
Operating
expenses
another
deal of
This
substantial wage increase this year.
There was a great
deferred maintenance work to be done the past year or so.
has
apparently been largely completed.
In the 12 months
ended June 30th, despite an increase of over $12 million in rev¬
enues, maintenance expenses decreased slightly.
Because of the rather sharp fluctuation in
earnings referred to
any particular 12 months' period are
However, President Searing has mapped out an
above, Edison's showings for
hard
to
forecast.
ambitious
program
efficiency, which
to
improve
labor
morale
and
administrative
already be bearing some fruit.
Savings from
the use of natural gas in 1951 have been estimated at $6,000,000
per annum, although this was based on coal and oil prices of some
months ago; this figure, if valid in 1951, would amount to 33c a
•share.
may
If the company
porary
of
receives
a
"break" from the courts
tem¬
on
electric rates, and from the Commission in eventual fixing
earnings might regain the
probable dilution through
permanent electric and gas rates,
levels of some
earlier
years
despite
gradual conversion of the debenture 3s.
v
A
sue
DALLAS, TEX.—Effective Sept.
1. the firm
name
will be changed to
of
Bailey & Co.
Bailey, Scott &
Co. and the offices will be located
in the Mercantile Bank
Building.
C. Alfred Bailey will be proprie¬
tor and Walter R. Scott and James
S. Cleaver will be associates.
Scott
Mr.
formerly in
successful offering of an is¬
debentures of the Federal
of
e
Intermediate
Credit
Banks
.Abbett
&
Co.
Mr.
Cleaver
was
with Dittmar & Co. in Dallas.
was
to
retire
northern
is that small business
do not
cerns
poorly
firms
seem
to be
in relation
had
as
to
con¬
faring
as
the
larger
by
Companies with
been
observers.
many
expected
less than 20 workers expect small¬
sales
er
larger
decreases
than
do
the
companies,
according to
responses
to
the
survey.
This
would indicate that, contrary to
popular belief, the small com¬
panies may not have suffered
relatively from the recent decline
more than the larger con¬
Moreover, they may be
less severely affected by falling
sales during the rest of the year
cerns.
Secretary
poor
1949.
-
/
v
v-v;.
New Financial Writers'
hear
we
hokum, the
inhabitants and all
much, but
so
Rosier Off Press
of
set
a
the SEC would demand of
as
A
private
new
roster
which
g
lists
the
titles and newspaper con¬
nections of 102 working newspa¬
seeking capital.
names,
per
members of the New York Fi¬
Writers'
nancial
just off the
press.
is
Association
The book
con¬
tains biographies on each of these
their
on
as
to
were
to
forecasting reveals that the typical manu¬
facturer expects his 1949 sales to fall behind last
year's by 15%. The
survey, which was
sponsored by the New England Council and
pates. A list of officers and direc¬
tors of the Association, since in¬
ception, is also included.
The book is being sold
copy.
analyzed by the Federal Reserved
Bank of Boston, is summarized in sales
article in the bank's
Review."
average
enced
decline
in
the
of
first
the
9%
experi¬
quarter
same
com¬
period
last
The expectation of a larger
decline for the full year indicates
that the manufacturers felt that
year.
business
worse
conditions
would
before they got better.
Cooperating
with
manufacturers'
in the region.
the
get
-
Federal
associations
A total of 605 firms,
representing about 20% of the re¬
gion's
manufacturing
employ¬
ment, responded to a mail ques¬
tionnaire.
Several
a
for
It
at $1
a
be had, by written
may
request, from the Executive Sec¬
in textiles were
typically retary, P. O. Box 483,
Times
"Monthly down 20% during the first quar¬ Square Station, New York 18.
The expected 15% decline in
sales for the full year exceeds the
pared with
as well as a page devoted
history of the Association,
the many functions which it
initiates and in which it partici¬
most
asked
the
and
economic
an
and business connections of
cluded,
in
outlook.
in which New England manufacturers
own
addition, the book lists the
names
its 62 associate members. The ByLaws of the Association are 'in¬
shoes, with durable goods producers reported
A survey
do
In
England Manufacturers Expect
pessimistic
$64,085,000 de¬ sales
As of
the
any
Exception to trend is noted by Federal Reserve Bank of Boston
$32,530,000 cash in treasury, will industries
used
of
An unexpected disclosure of the
date—not the political
ter, but manufacturers expected
a
decline for the year of only 15%.
Shoe sales were down 5% during
the first quarter, but producers
felt there would be no decline for
the full
of
views
These
year.
regarded
were
significant in the light
widely-publicized decline
the
as
in the two industries.
Durable
turers
who
of
initially
downturn
the
were
had
in
manufac¬
"hard"
goods,
withstood
the
business
activity,
pessimistic of all
most
CHICAGO, ILL.—Myron F. Ratcliffe will be admitted to partner¬
ship in the New York Stock Ex¬
Goods—The
so-called
Myron Ralcliffe to
Be Bache Partner
change firm
Sept. 1.
South
much
Brothers
in the first quarter.
Salle Street.
La
cliffe
larger declines for the full
than they had experienced
Co.
&
on
quarters at the Chicago office, 135
concerning sales for the current
year. By and large they expected
year
of Bache
He will make his head¬
was
Rat-
Mr.
formerly with Lehman
for many
New York and
years
both in
Chicago.
For example,
,
trends
were
disclosed
by the survey. Two of the most
banks. The financing consisted of
important,are the prospective
$31,555,000 1.35% consol. deben¬ sales improvement in textiles and
tures dated Sept. 1,
1949, due June shoes and the anticipated further
1, 1950. The issue was placed at
decKne in durable goods sales.
par.
The proceeds, together with
Textiles and
be
England have
pessimism concern¬
more
survey
15% Decline in 1949 Sales
•
textiles and
made Aug. 17 by M. G.
Newcomb,
New York fiscal agent for the
charge of bentures maturing Sept. 1.
tie New Orleans office of Lord, the close of business
Sept.
was
to
a
Reserve Bank and the New
Eng¬
land Council in the survey were
FIG Banks Place Debs.
England
manufacturers
New
assets
Reveals New
nine
Bailey, Scott & Go.
Forming in Dallas
However,
southern
first quarter
New
men.
increased only about $4 million in the
12 months ended June 30th and in the June quarter were down
nearly $6 million, although $1,257,000 of the later reduction was ac¬
counted for by retroactive wage adjustments in June last year.
This showing seems remarkable since it was accomplished despite
areas
three
states who sustained the greatest
losses in the first quarter.
Why does he not do something of the sort? We
wonder whether it would
support the world TVA
idea the Secretary is
proposing here.
$3,-
year
the
The
smaller down¬
a
in the
northern
manufacturers
be broken."
position than
read¬
ing the months ahead than have
per
from lower costs of
coal and oil, with respect to the gas business (the electric service
largely returns savings to consumers).
company
the
in
capital
no
in
state¬
accounts such
new
kwh, this would increase the company's, earnings by almost
000,000'or 17c a share after allowing for 'ihcortie taxes/''
better
a
up
that about which
a
profit of 3c
in
pious mouthings about the
most of its territory.
Assuming
the installation of an additional 500,000 sets, which is believed to
be a conservative estimate, consumption of electricity would be
kwh. At
can
thoroughly business-like
of the TVA
in
increased by about 100,000,000
in sales
than
Federal
outlays, the profits and the actual
ment of the
appliance,
which is especially adaptable to the company's service area, should
be of particular benefit to the company which has had difficulty
in stimulating residential consumption because of the small dwell¬
ing units which predominate
is
one
Krug to draw
having expired June 30th.
survey
consumption
occurred
The vicious circle of
recession
of
reflected
turn
—Secretary of Interior Julius A. Krug.
The following was
recently published by Truslow Hyde of
Josephthal & Company: "The company has just completed a survey
on
the consumption of television sets, of which about 300,000 are
now
is
shown
development must and
no
for the year.
same
duction, reported
check
under-developed regions of the world are
not alone to blame for the
predicament. Yes, they
are poor because
they have no industry and only
primitive agriculture.
And yes, they have no in¬
dustry and only primitive agriculture because they
are
poor.
We know all that. But nobody can ask
them to lift themselves
by their bootstraps. They
need help from
outside—understanding/technology
increase
in
of
for
heat
non-elec¬
states, with their higher
proportion of durable goods pro¬
"The
aggressive expansion policy and partly
an
this
record
of
southern
the successful results have been the focus of atten¬
tion of
thinking people the world over.
is
the
to
ables
states.
The
antici¬
were
within New England.
devastating floods, supply
soil.
declines
producers
spread
low-cost electric power, or
pro¬
duce fertilizers to revitalize the
Krug
comparable
justments from soft goods to dur¬
With this help, the
people of the region made an all-out effort to re¬
establish their
prosperity on a firm foundation and
company
decision
final
The
Government had to do that.
appealed the electric rate cut to the courts, and
expected next fall (a lower court favored the
company).
In the meantime, however, despite inclusion of the
lower rates for most of 1949 to date, the company's report for the
twelve months ended June 30, showing earnings of $2.37 against
$2.06 for the previous corresponding period, proved very favor¬
able.
The June quarter showed "31c against 34c last year.
These
remarkable gains may perhaps be explained as follows:
The
a
A.
the
lumber and basic timber, expected
their first quarter decline of 15%
were
to
by
to remain the
of
that
for
trical machinery and of furniture
and finished lumber. Producers of
living.
the region could
dollars
25%
pated
exhausted
J.
this,
of
of
to
Similar
find
to
needed to build dams
the question of proper depreciation
Chairman Maltbie as almost his
last official act before retiring in January, forced a 10% cut in
"temporary" electric rates on the company, although he allowed
a
partially offsetting increase in gas rates.
result
a
15
period.
not have raised the hundreds of
years over
many
decent standard
a
"On its own,
The explanation seems to be that: (1) The company has been
bringing down only about 7% of revenues to earnings for, common
stock, with the result that share earnings have been somewhat
erratic in recent years.
On at least two occasions the interim or
calendar year figures have dropped dangerously close to the divi¬
dend level; at other times the company has surprised stockholders
by making an unexpectedly favorable showing. (2)
The company
has carried on a running fight with the Public Service Commission
As
ed their decline would move from
opportunties and the people of
the valley could not get
enough
money from further exploita¬
tion of their depleted resources
to purchase even the essentials
stock
Albany for
elsewhere
went
men
at
(for example, iron and
steel, non-ferrous metals) expect¬
Tennessee
currently around 25, this year's range
being 211/2-25%.
With the $1.60 dividend rate, the yield is still
relatively high—6.4%—as compared with yields on the common
stocks of some
other large
utility companies.
Considering the
company's unbroken dividend record since 1885, the high common
accounting.
primary metal products manufac¬
turers
Valley in this country, for ex¬
ample, had seen fairly good times for many decades,
but the time came when, after years of exporting
its coal, lumber and raw materials, its smart young
Consolidated Edison
Edison
reach 20% for the full year, and
Why Not the Facts?
By OWEN ELY
Consolidated
Thursday, August 25, 1949
Shoes—While most
expected
the
that
their
would register
greater decline than was expe¬
year
stone,
who
clay
had
and
no
glass
decline
producers,
in
the
first
quarter,
thought their sales for
the year would be off by 10%.
Manufacturers of electrical equip¬
ment, who likewise had no de¬
cline
pected
cline
in
the
their
first
annual
quarter,
sales
to
ex¬
de¬
by 15%. Fabricated metal
products manufacturers (for ex¬
Rice to Be Partner
In Francis I. du Ponf
MINNEAPOLIS, MINN.—Robert
A. Rice will be admitted to part¬
nership
in the New York
Exchange firm
of
Francis
Stock
I.
du
ample, hardware, heating equip- Pont & Co. on Sept. 1. Mr. Rice
rienced in the first quarter, tex¬ m e n t, metal containers, nails,
1, 1949,
was
formerly Resident Manager
tiles and shoes were the leading screw-machine
products, stamp¬
the total
amount of debentures
in Minneapolis and St. Paul for
exceptions, indicating renewed vi¬ ings) anticipated that their first
outstanding will be $598,775,000.
tality in these industries. 1 Dollar quarter decline
r?
•
of
8%
would Harris, Upham & Co.
Volume
COMMERCIAL
THE
Number 4832
170
to work
Holds American Investments Abroad Could
Reach $2V2 Billion
James E. Webb, Under
stacles
of
number
a
have
United
capital in recent
a
of funds would have an all
stacles
of
Appearing before the House Banking and Currency Committee
of the powers of the
Export-Import Bank to the guarantee of American investments
abroad, James E. Webb, Under Secretary of State, stressed both the
Aug. 19, in behalf of the proposed extension
most
years,
in
private
as
significant obstacles
ance
of
<♦>-
advantage and
guaranties.
It
can
be
19
expected to make to eco-f
is important to keep
in mind that nomic development. Furthermore,'
the legislation does not permit we do not intend to impose our
guaranties covering ordinary busi¬ own plans of economic develop-f
the result of abnormal
to be unstable
(759)
Bank to make such
as
are
in many
ob¬
prevented an
States
conditions following the war.
on
CHRONICLE
great
might have been an¬
In large part these ob¬
volume
ticipated.
advantage and would curb spread of communism.
round
are
which
outflow
Secretary of State, tells House Banking and
Currency Committee such placement
FINANCIAL
through private channels.
"There
Annually
&
The
appear
political conditions
parts of the world, bal¬
payments problems lead¬
ness
risks.
of
It does not
ment
assure any¬
profit, it does not insure
anyone against loss.
It is also im¬
portant to keep in mind that the
purpose of the legislation is not
simply to provide an outlet for
surplus capital but it is intended
1,0 stimulate investment which will
one
a
foreign countries and
on
would
not,
investments
themselves
tnerefore,
if
those
did
not
we
guarantee
countries
consider
the investment would make
that
con¬
a
tribution to their economic devel¬
opment.
'
"This
legislation is a part of a
be productive and will contribute program which involves coopera¬
to economic development abroad. tive action on our part and on the
In issuing
guaranties the Bank part of other countries for our
on the ability to
transfer earnings and capital, and
will give full consideration to the mutual advantage.
I urge you to
well.
The political various
types of governmental re¬
contribution that the investment give it your approval."
i
instability and tensions which ex¬ strictions
vate capital to
imposed on foreign in¬
ist in many areas of the world vestments.
undertake
If these obstacles are
grow out of extreme poverty and to be
foreign in¬
removed, a cooperative ac¬
frustration of hopes for economic
vestments,
tion on the part of capital import¬
betterment. The secure growth of
which, he con¬
ing and capital exporting countries
democracy in these areas is de¬ is
tended, on the
necessary.
We are trying in a
pendent upon a realization by number of ways to exert our in¬
basis of ex¬
their people that they can better
perience dur¬
fluence to alleviate the conditions
By JOHN DUTTON
their economic conditions and still
ing the '20's,
which are deterring the flow of
maintain their democratic insti¬
could
attain
A small advertisement can sometimes do a big job. E. L. Kencapital.
We are exerting our in¬
tutions and their freedom and dig¬
an annual sum
fluence
toward
more
stabilized drick, Manager of the Orlando, Fla., office of Allen & Co. of Lakeland,
nity as individuals.
of $2V2 billion.
political conditions and more sat¬ Fla., had an idea that there would be many investors in his terri¬
"In the last year, we have seen
"Private
isfactory economic
relationships tory that would not only be interested in the coming break-up of
the march of Soviet Communism
American in¬
through our participation in the Commonwealth and Southern and the distribution of the stocks of
James E. Webb
halted in Europe. In the last year,
vestors con¬
United Nations and its Specialized the various operating subsidiaries, but who might also be confused
however, we also have seen the
stitute the
Agencies, through the European as to the proper procedure necessary for their participation in the
greater part of China fall under
largest potential source of invest¬
Recovery Program, through recip¬ plan. So he decided to offer a service. Their advertisement which
a
Communism which appears to
ment capital in the world," Mr.
rocal
trade
agreements
and now appears daily in the Orlando "Evening Star" tells it own story.
in large
measure Soviet-in¬
Webb pointed out in his statement. be
through other cooperative efforts
"If this program," he continued, spired and directed.
with individual foreign countries.
"We know that Communism and
"succeeds in stimulating the flow
"We feel it is particularly im¬
other
anti-democratic ideologies
of investments abroad up to the
portant to secure a basic under¬
levels attained during the 1920's make little or no appeal to peo¬
standing _,with countries needing
relative to our national income, ples which are prosperous and
which have a high degree of mod¬ foreign investment as to the treat¬
we will be making net annual pri¬
ment which will be accorded to
vate
investments abroad
of at ern material civilization. We know
foreign capital by those countries.
least $2.5 billion.
These invest¬ that they appeal with peculiar
in
those
regions
where To this end we are actively en¬
ments will be of mutual advantage force
poverty and hunger gaged in the negotiation of bilat¬
to investors as well as to the peo¬ ignorance,
eral treaties with foreign govern¬
The final liquidation of this Holding Company
ple of the countries in which the prevail, and where most of the
ments. These treaties provide that
and exchange of its stock for underlying stocks
investments are made, and ulti¬ things that we regard as necessi¬
ties are either* unknown or are the property of investors will not
mately to the United States. We
has been ordered
and will be
consummated
luxuries beyond the reach of all be expropriated without prompt,
hope all of this will be without
over next few weeks.
but a favored few.
Those regions, adequate and effective compen¬
burden to the American taxpayer."
sation, that investors will be given
Continuing his argument, Mr. however, comprise a large part of
Details of this exchange and quotations on un¬
reasonable opportunity to remit
the surface of the world.
Webb stated:
their earnings and withdraw their
derlying stocks to be received are now available.
"Our desires for an expanding
"The bill which is before you is
capital, that they will have rea¬
Call, wire or write for any desired data.
intended to stimulate this flow world economy are also to a con¬
the
the
of
American pri¬
ability
the
of
rest
ourselves,
world,
including
ing to limitations
as
Securities Salesman's Corner
COMMONWEALTH
SOUTHERN
constitutes an important ele¬
and
comprehensive program
to
aid the people of underde¬
veloped areas in their efforts to
utilize
more
effectively
their
human and natural resources. This
ment in
a
general program was proposed by
in his Inaugural Ad¬
dress last January as the fourth
the President
extent1 dependent
siderable
the
success
the
means
areas.
in
sult
of efforts to
sonable freedom to manage, oper¬
ate
control their
and
enterprises,
that they will enjoy security in
production in these
the protection of their persons and
Their development will re¬
property and non-discriminatory
an
increase
and
particular
of
a
better
which will
significance
for
Europe and for
economy.
At the same
the
recovery
our
own
major course of action which he time by assisting in this effort we
believed we should take in our can increase our security by as¬
international relations. The other sociating stronger nations with us
three points were (1) continued in the cause of human freedom
treatment in the
&
Co.
*
INVESTMENTS
.
'
conduct of their
Tel. 2-2772
511 Metcalf Bldg.
business affairs.
that we do
to be a
one-sided arrangement. Although
advertising
fully recognize the need for
giving an investor assurances as
to the protection of his property
we
also believe that the under¬
accounts
"I want to point out
not consider this
program
we
Nations and and by the strengthening of the
(2) continu¬ United Nations which will occur developed areas are entitled on
ance
of our programs for world through its participation in con¬ their part to expect that private
investments will make a genuine
recovery and (3) the strengthen¬ structive action for economic de¬
support to the United
related agencies,
.its
Allen
of
balance in world trade
have
upon
increase
results of this constant use of small space
Mr. Kendrick, was that results did not
begin to come in until after the first seven or eight insertions. Then
leads and inquiries started and quite a number of investors called
at the firm's office.
The advertising is now paying in actual new
One of the interesting
opened
further
for
according
and
to
in
cultivation.
good
It
prospects that have been obtained
not only a good idea, plus good
takes
results.
telling
this important fact for years yet many Security Dealers
or two advertisements to more than pay for themselves
and display, but also constant repetition to bring in the
Advertising experts and newspaper publishers have been
copy
contribution to their national wel¬
advertisers
ing
of
freedom-loving nations velopment.
fare. This is not a program of ex¬ expect one
"We recognize that the principal
against the dangers of aggression."
ploitation for foreign profit. It is a and stop there.
'
■
'■
:
■
• it
In proposing the fourth point the effort for economic development
President
made
the following must come from the underdevel¬ program for mutual benefits. We
Mr. Kendrick also stated that the firm recently tried a similar
consider that the private investor ad in a small town
comments:
■?<- -1 -Q. ■ %'y
paper that only had a circulation of about 2,500
oped countries themselves.
We
"'We must embark on a bold cannot and should not assume this has an obligation to give due re¬ people which was located about 30 miles from the firm's office in
gard to the welfare of the persons Orlando. This advertisement too pulled surprisingly well after sev¬
new program for making the bene¬
responsibility ourselves. We can,
It is quite possible that many security dealers are
fits of our scientific advances and however, assist in various ways. dependent upon his enterprises, to eral insertions.
•
.
.
..
.
.
.
our
for
of
available Although the bulk of the financ¬
and growth ing of development projects must
underdeveloped areas . . . we come from local sources, foreign
industrial
progress
the. improvement
contribute his fair share of taxes
to
the
serve
local
as
well
community,
as
to
to con¬
develop local
available to peace- capital is an essential element. resources, to observe local laws
and so to conduct his enterprise
benefits of our The International Bank and in ap¬
that the local economy will derive
store of technical knowledge in propriate cases the Export-Import
full benefit from the enterprise.
order to help them realize their Bank can be expected to continue
aspirations for a better life. And, their activities in loaning funds
"Treaties alone, however, can¬
should
make
loving peoples the
cooperation with other nations, for certain types of development not give an investor the assur¬
should foster capital invest¬ projects for which private financ¬ ances which he may legitimately
ment in areas needing develop¬ ing is not available.
These loans require in order to risk his capi¬
ment.
Our aim should be to help will
assist
the
underdeveloped tal abroad.
With the best faith
in
we
the
peoples
free
of
the
world,
through their own efforts, to pro¬
duce more food, more clothing,
more
more
materials for housing, and
mechanical power to lighten
their burdens.'
"You will note
that the program
has two broad aspects
both leading toward the goal of
economic development. One aspect
involves the interchange among
proposed
'
nations
.
of
technical
overlooking
a
good bet when they fail to use the smaller town news¬
in their trading area.'Today the farmer has a surplus of cash,
also retired people in many sections of the country who
interested in investments, and they too live in rural vicinities.
papers
there
are
are
you analyze the copy used in this advertisement it is clear
just why it brought in a good response. There is investor in¬
terest in Commonwealth and Southern in this territory. The pending
If
as
to
break-up of the holding company brings a sense of urgency to the
If he owns any stock he knows he should get busy. Then
reader.
there
is the. offer of
service regarding details of the exchange and
quotations on the underlying stocks. Last but not least, comes the
definite opportunity for discussing the merits of Southern Company
countries to expand
such basic in the world a foreign government
(one of the operating holding companies) which will be one of the
facilities as transportation, com¬ cannot guarantee that it will have
securities received in exchange for C and S. For the present time this
munications and power which in sufficient dollars actually avail¬
good utility common stock is actively traded over-the-counter op
many cases are needed before pri¬ able to permit investors to remit a when-issued basis and therefore offers opportunity for retail pur¬
vate
enterprises can be estab¬ their profits. It cannot guarantee
poses.
'
■. ' ■
^
lished;
;
that dollars will be available to
When a smaller city can produce the type of up-to-the-minute,
"Particular
emphasis
on
the pay promptly for property should and soundly conceived advertising such as Allen & Co. are now using,
Point IV program is placed upon it become necessary in the public the retail end of the securities business is still very much alive.
the need for increasing the flow interest for it to be expropriated. It takes
good ideas like this to lift the recession out of the securities
of private investment.
Not only It cannot guarantee against the business.
'
•
is private capital in this country possibility of confiscation or de¬
knowledge potentially the greatest external
,
struction in the event of
internal
We believe,
source
of investment funds for disturbance or war.
Dow With Cliff. J. Murphy Evans With A. M. Kidder
(Special to The Financial Chronicle)
expanded program for development abroad, but in addi¬ therefore, that guaranties by the
(Special to The Financial Chronicle)
tion a private investment carries United States Government against
such exchanges is now pending
ST. PETERSBURG, FLA.—Jack
PORTLAND, MAINE —George
with it the technical skills, man¬ certain risks peculiar to invest¬
before the Foreign Affairs Com¬
H. Evans has become associated
countries will C. Dow has become associated
mittee.
The other aspect of the agerial experience, organizational ment in * foreign
with Clifford J. Murphy Co., 443 with A. M. Kidder &
Co., 400
talents and incentive which are have an important effect on the
program involves the fostering of
essential to put capital to effective decisions of potential investors to Congress Street. He was formerly Beach Drive, North. He was pre¬
capital investment.
with A. C. Allyn & Co., Bond &
use.
Our industrial technology is send their money abroad. The bill
viously
with
Merrill
Lynch,
"The Point IV program is de¬
Goodwin, Inc. and Townsend, Dablargely in the hands of private which you are now considering
signed to benefit both the peoples
Pierce, Fenner & Beane. i •
ney & Tyson.
organizations and can best be put authorizes the Export-Import
of the underdeveloped areas and
and skill.
thorize
A bill designed ,to au¬
an
20
THE.. COMMERCIAL
(760)
Second,
Aims Aid Abroad Vital: Truman
them
&
FINANCIAL
should
we
CHRONICLE
transfer,
to
The
production - of the Western
nations of Europe has been rising
essential items of mil¬
some
Thursday, August 25, 1949
learned—learned
the
hard
way—
that, in the world of today, isola¬
should steadily. To continue the momen¬ tionism is a futile and vulnerable
send some of our experts abroad tum of
this economic advance it is shield. We have learned that the
(Continued from first page)
to help train and equip their mili¬
necessary now to remove the ob¬ defense of the United States and
the VFW has been, serving not, upon voluntary associations among
tary forces.
stacles created by the fear of mil¬ the defense of other
freedom-lov¬
only the interests of the men whofree nations, mutual adjustment of
Some people who do not under¬
itary agression.
have fought for our country in our common problems and com¬
ing nations are indivisible.
We
U1
J
foreign lands, but also the inter¬ bined
■
ests of
I
the
watched
have
economic
convinced
whole nation.
our
splendid
humanitarian work which
effort.
that
the world
means
stand
We
through
ticularly in the field of interna¬
tional policy. I recall the United
Nations rally in 1942, at our 43rd
national encampment in Cincin¬
nati, to which 14 Allied nations
sent representatives.
I remember.
the victory conference in 1945 at
our
Chicago encampment, where
representatives from 21 Allied nations
•
to discuss the value
met
of
cooperation in war and the im¬
portance of continuing interna¬
tional
cooperation
in
time
of
peace.
The VFW has continued
this fine record by its strong sup¬
.
difficult
con¬
pre¬
tion
has
We
nations
democratic
tions
out
war
called
been
which
values
share
working with
are
these
allies
in
our
With¬
us.
the
torn
-
is
that
the
this
with
treaty have learned the tragic cost
All
war.
how
of
us
have
learned
end,
other
have
nations
in
organization
outlaw aggression and
means
of
;
settling
joined
establish
will
for
to
,
be
limited
to
nations
aggression;
be
able
to
have
they
Board of
It
no
vised
of
assistance
our
other
We
must
Greece
nations
continue
and
under
Whose
high
support to
may persevere
in
the ways of peace
vigor
which
wars.
with the same
determination
with
and
.
fought~~bur
we
;i;>r>
country's
r
:•
our
Turkey.
We
peace.
aid
Governors,
on
Aug. 18,
Trading Rules
vote to permit traders to initiate ;
long accounts above previous price. I
own
Rule
price was
above
the. previous
The rule
close.
reads
now
as
to
V
should
This
prohibition is
now
within
removed
follow
NEW YORK
-
.
s:
:
STOCK EXCHANGE
Office of the Secretary
,
'
"Rule'374 (A) (1). No member, while on the Floor of the Ex¬
change, shall after the opening, initiate a 'long' stock purchase for
the Far East, two young republics
—the
Philippines
and
Korea—
need
military assistance if
account in which he has
an
price:.
■
(1)
'
'
-
.
:
:
1
-
interest above the previous closing
an
f;
■
at
price higher than the last sale (i.e., a 'plus' tick) If
preceding purchases which in each case was at
sSl' price higher than the last sale
(i.e., the two preceding
'plus' ticks) were initiated by members on their bids while
on the Floor for accounts in which
their have art interest,
unless there intervened either (a) 15 minutes from the
a
the
;
-
two
first
of
such
purchases
(b)
or
transaction
a
(ii)
;
,
V-
J
r
,
;
a
*
price
on
an
•
■
1
at
higher than the last sale (i.e., a 'plus' tick) effected
order originated off the Floor.
-
-
far-reaching
easy
we
your
certain limitations.
se¬
help Iran maintain its firm stand
against Soviet pressures And, in
ago,
I enlist
the end that
buying stock for their own long accounts. Under this rule floor
traders had been prohibited from
initiating the purchase of stocks
for their own long accounts above
the price of the previous close
or the price of the
immediate preceding transaction, if that
their
the United States
help Greece and
to permit
Blocked by Soviet Union "
adjustment. The de¬ Turkey resist Communist pres¬
We have been working for that.
Our
struction had been too great to sures.
prompt action pre¬
allow a quick recovery. The accu¬ served the integrity of both coun¬ But the Soviet Union has blocked
'(':■>'v:1
^/:v' Q -'"v
every effort to establish an effec¬
mulated wealth of generations had tries. •
tive international police force and
been poured out and lost in the
By an equally overwhelming
too
an
In the fulfillment of those
purposes,
Exchange on Aug. 19,
meeting on the previous day, the Board of Governors re¬
374 (A)? (l) to permit floor traders
more
freedom ih
a
.
such
of the Veterans
Our organiza¬
announced by the New York Stock
was
that at
the war, however, it became
ap¬
they
when the war parent that the United Nations
are to maintain their national
se¬
ended, the world entered a new! could not live up to all our hopes
phase of human history.
There j for it until all nations were united curity.
were many who believed that the'in the desire for
If it were possible, we would
peace. It became
world would r quickly return to | necessary,
therefore, for the free! prefer that these bulwarks against
its old ways. Many believed that countries to take action to defend aggression be established
by the
the countries of the world would the principles of that
organization United States. We hope the peace
work their way, peacefully and and to preserve it.
of the world will some
day be en¬
in cooperation, back to conditions
By an overwhelming bi-partisan forced by security forces under
of stability and prosperity.
the control and direction of the
vote, Congress approved my rec¬
But the effects of this last war ommendation early in-1947 that United Nations.
'
were
i
:
United
justice
"To maintain true allegiance to
cheaply.
No
bring it about, the Government of the United
purchase of shares for their
only
defend
curity is important to world
conflict.
-
Foreign Wars.
tion is pledged:
NYSE Revises Floor
the
program
certain
.
years
:
the
won't have to
we
will go to Atlantic
treaty countries, but will also help
aggression
;
United Nations Principles
countries, un¬
j
less they stand together, can be
'... *
Our Goal' '•?;'v-']
taken over one by one. And now,
The
principles, of the United
all of us are determined that, by
Nations are still our goal.
We
joint efforts and a common de- have undertaken to
'defend and
tense, we shall become
strong
preserve them. We will keep that
enough to prevent another terrific
pledge. Shortly after the end of
Four
can
of
purposes
of
bought
V
\
Congress
certain
r
::
Most
this
':j
democratic
—how
the
their children to live in.
the
;y
democratic
want
a
■
be
serve
States in noble words has set out
many
of
part
peace.
single program
can
of
homes.
international
order.
worth
is
can
and
cornerstone
that
so
aid
desire
a
would
invited
weakness
The
creating
which
It
we
nor can any
single nation. It can States of America, and fidelity to
only be assured by the combined its Constitution and
laws; to fos¬
necessary to equip mo¬
defense forces. These forces
most
we
be
cost.
The
secu¬
Peace with freedom and
material
;v
world
•of
the
will
its
cannot
v
To
Effects of War Tragic
!
of
We
investment in
an
that
times
important
bile
aspects
of
our
foreign policy*
will constitute no threat to the
therefore, is our effort to establish
independence of
other
nations.
international order.
world.
All the countries that signed the
Our
the advancement of mankind will
One
rity
price of
that
The cost of such
is considerable, but it all mankind?
We must face the fact that we
European Recovery Program and
have forever put behind us the
treaty.
We
are
not arming ourselves false
security of isolationism. We
and our friends to start a
fight have done so because we have
with anybody.
We are building
To achieve a better world we
the VFW is honoring dis¬
tinguished representatives from must prevent international vio¬
defenses
Unless protection, against
other countries which have joined lence.
fight;,:
in the North Atlantic treaty. The War can be secured, all efforts for
fail.
economics.
delay.
program
represents
Atlantic
the North Atlantic
the day
of veterans from most of
the treaty countries, meeting with
our own veterans, is deeply sym¬
bolic of the spirit that binds to¬
gether the free nations of the
a
learned
country best by joining in the
common defense of the
rights of
our
military assistance
is based on the same princi¬ friends if the world is to be a de¬
of self-help and mutual aid cent place for our children and
ple
peace, our task would be hopeless.
We can win a permanent peace
port of the North Atlantic treaty only through the joint efforts of
I am particularly pleased that free nations striving toward the
same objectives.
you have asked me to be here on
presence
without
On
have
therefore undertake
of
gram
of
cause
issue.
should
program
efforts of the multitudes of people ter true
ourselves,
patriotism; to -maintain
the
institutions
some
of
military throughout the world who want a and extend
means
to them, and by jointing secure peace. They are our friends
American
freedom, to preserve
with them in a common defense and they are friends worth hav¬ and
defend
the
United
States
We
must
keep them our from all her enemies."
plan. The military assistance pro¬ ing.
our.tradi¬
and
North
strengthen them,
by
transferring
not alone in this effort.
are
Many
before
ever
do.
upon to
confused
treaty are
not strong enough today to de¬
fend themselves effectively. Since
the end of the war they have been
concentrating on rebuilding their
na-
any
the
in
In four short years they have done
more in the cause of world peace
than
We
a
seem
contrary, it is very simple.
The purpose of the military as¬
sistance program is to prevent ag¬
gression. Our European partners
The people of the United States
have been meeting this challenge.
recovery
and
program
the
vail
and world
assistance
tary
eco¬
ganization carries on. I have also
We
are
been gratified by the record of cratic. freedoms.
the VFW in other fields, and par¬ vinced that our answer will
we
well have tried to make the mili¬
nomic progress and at the same
time maintain and expand demo¬
our or¬
Third,
the state of the world very
are
these
achieve
can
itary equipment.
of more than 300 shares or 50% of the amount
offered,
whichever is greater, at a price higher than the last sale
(i.e., a 'plus' tick) and then only if the offer quotation
conflict. Conditions of world trade
to free the world from the fear of
remains unchanged. ?
Z .
r ;
more than 500 shares or 75% of the amount
offered,
whichever is greater, at the same
price as the last sale if
•,- such
priceds above the next
had
aggression.
,',/•*
vote
in
1948,1 the Congress ap¬
fundamentally altered. proved our joint enterprise with
As a result of the upheaval, many 16 European nations to/achieve
peoples demanded new rights and economic recovery. The European
new responsibilities. Men who had
recovery program has prevented
been
lived
for
centuries
in
economic
servitude asked for independence
and a fair share of the good things
of life.
;
The
against tyranny was
by belief in the Four
Freedoms.
Men refused to yield
to dictatorship because they de¬
sired
and
believed
they could
conditions of material and
secure
spiritual freedom. When the war
•ended; they demanded to be treat¬
ed
free
They demanded
could at¬
tain security and liberty.
a
as
world
This
men.
in
which they
demand
cannot
be
sup¬
had
For
that
reason,
we
we
in
are
working with
Europe,
we
are
which
•" i
'"<■
■v.;♦.
,
of
North
and
gether in
a
South America
with
to¬
defensive alliance.
Rio
Atlantic, treaty.
pact, this is
members may again make
Like
the
.
(1)
on
all.
the
Communism Leads to Tyranny
One
pretended
answer'
to
this
demand of mankind is offered by
-organized Communism.
But that
'Must Back Up Atlantic Pact
The next task is to back
up this
one
will
military defense.
hand, economic
if
lag
; On
recovery
the
haunting fear of
military aggression is widespread.
Such
fear
will
prevent
new
in¬
principle with military assistance vestments from
being made and
answer is a false one. Communism
to European
nations," and to cer¬ new industries from being estab¬
claims to satisfy the universal de¬
tain other
lished. On the other
nations, which *are un¬
hand, if pro¬
sire for a better life. But, in fact,
able
it
lures
men
by
false
promises
back to tyranny and slavery—and
more
and
more
people,
all
over
the world, are learning that fact.
The
offer
free
a
•demand
and
nations
different
of
liberty.
the
for
answer
world
to
answer
mankind
Our
of
the
build
up
their
defenses
without outside help.
I
have
tection
against
sured,
recommended
to
the
move
aggression
is
as¬
economic
recovery
forward more
will
rapidly. Sound
economic
Congress that the United States
recovery and adequate
supply three kinds of military as¬ military defense must be carried
sistance to friendly democratic na¬ forward together in balance. That
tions in need of our
is exactly what we propose to do.
help. First,
we
should
help them increase
Great progress has been made
security
is based their
to
own
military
production.
in
economic
recovery
in Europe.
by
specialist in
a
a
'''* /
stock in which
specialist to maintain
; :
a
with Rule 365;
.ance
■"".V(2) b,y
he is registered as a
fair and orderly market in accord-
a
v
•
;
.
y
- '■..•y/yy-V; - \yV >*: Vv
V.',S)]'...■*'■&
distribution of securities, if such
a
transaction is made pursuant to Regulation X-9A6-1
such transaction and such distribution are made
...
jf
to the approval of the Exchange;
(4)
to offset
for bona fide arbitrage;
(6)
V
•
or
pursuant
(5)
v:
V
stock in which he is registered as
'•;
:
-
:
::
^
odd-lot dealer in
an
;<yvyy' an odd-lot dealer;"<y
\
;(3) to effect or facilitate
,
and
'' "■
The limitations set forth in this Rule shall not
apply to
purchases made
4. -y-'i v;">■
'.vi'
a
covery
purchases of the remaining stock
set forth in paragraph
(B)
Close
•
such
(1) above.
cooperate more effective by in¬
creasing the collective as well as
the ^individual
ability
of "free
;: ;
countries to resist
aggression.
J
pledge of mu. y. The
military assistance program
pressed. It must not be frustrated. tual assistance by nations which
and the European
Recovery Pro¬
It presents a challenge to us and are determined to
protect their gram are
part and parcel of the
to the values of our civilization independence.
It is based on the
same policy.
There is the closest
which will require all our ener¬ principle that an armed attack
on
relationship between economic re-^
one
gies and wisdom to satisfy.
member nation is an attack
a
offered, subject, however, to the limitations
.
North
(ii)
as
purchased, no further 'long' purchases may be made of the re¬
maining stock offered until 15 minutes have elapsed, when such
the
Relationship Between Eco¬
nomic Recovery and Armed
^
•
Strength
;
'
been
.
The United States and 11 other
have now joined in the
Vyy yy:;y
group, may purchase the amount of stock offered at the time of
the first such purchase shall
govern. After the limited amount has
,
great
nations
preceding different price (i.e.,
only if the offer quotation re-
a 'zero plus' tick) and then
mains unchanged.
/yy
(2) In applying the above limitations in sub-paragraphs
(iii) on the amount of stock members, individually or
and
principles of the charter.
The
military assistant program
and
will help the United Nations to
working with our friends
neighbors in this hemisphere. The
pact of Rio de Janeiro, signed in
September, 1947, binds the nations
„
consistent
are
our
also
^
join other friendly
forming regional de¬
nations dn
fense pacts.
The United Nations Charter was
collapse in Europe and
given; hope to all countries wisely drawn to permit these re¬
who want to see the world resume gional
defense pacts and other
the course of economic
collective
security arrangements
progress.
While
•
to
general
friends
•
(iii) of
has
war
sustained;
have
.
with the prior approval of
,v
V
the member to contribute under
the
a
transaction
maintenance
where
the
of
made
in
error; *
;:V'VV
fair
a
Floor Official
for not less than two business
days."
The Board
(i) to permit
unusual circumstances to
and
orderly market, or (ii)
purchasing member intends to hold the stock
a
of Governors
also
adopted
bered 375, effective Aug.
24, 1949, to read:
a
new
'
*
Rule, to be
num¬
"Rule 375.
Members, while on the Floor of the Exchange, who
desire to purchase stock to establish or increase a
position for ac¬
counts in which they have an interest
(1) shall not congregate in
a
particular stock, and individually
or as
a
group, intentionally
the market in that stock;
or
unintentionally, dominate
'
(2) shall not effect such purchases except in a reasonable and
orderly manner and they shall not be conspicuous in the
.general market or in the market in a particular stock."
THE
Number 4832
Volume 170
COMMERCIAL
Reports Substantial Drop in Farm Mortgage Debt
Institute of Life Insurance points out non-real estate
However,
matter
CHRONICLE
commitment to pay
a
certain
sum
on
how
dressed up,
indebtedness of farmers has risen, due to crop loans under price
support
contract,
FINANCIAL
&
fixed
a
mutual
they
date.
statute
a
No
funds
been
jointly by
industry
was
similarly
misleading
presented to
the Congress with the "distinction
of having the virtually unanimous
•
1926
under
nonreal
estate agricultural
beginning of this year
"Figures compiled by the U. S.
'Department of Agriculture" the
gate
'Institute
represented
■i.
said,
"show
that
farm
debt at the
loans
crop
under
-mortgage debt went down consist¬
price support legislation. Further¬
ently during the entire period of
the past war, dropping from $6,-
more,
the over-all financial
liquidity of farmers as a whole is
high. ? According - to preliminary
Department of Agriculture fig¬
ures, farmers in the aggregate had
about $2 in cash or its equivalent
at the beginning of this year for
every dollar they owed.
At the
end
of 1939 they had only 50
cents in cash or its equivalent for
every dollar of aggregate debt."
The following table compares
million
586
•
at the end of
1939 to
'$4,682 million at the end of 1945,
a
decline of 29%.• The 1945 farm
mortgage
33
*three
;
*
was
the
In the last
trend has been
figure;
debt
lowest
i
in
years.
the
years
upward, but the gain for this
period has only been $426 million,
; or 9.1%.
Thus in the last
and
post war period, from
war
1940
"
through 1948, farm mortgage debt
showed a net reduction of $1,478
million,
'
the
the
'■V
22%.'
or
"The
■<
period in
the First World War, covering the
war itself and the three postwar
corresponding
from 1915 to 1921, in¬
debt rose
years, runs
clusive.
Farm mortgage
sharply» throughout this period.
The
aggregate debt was $4,991
-
.'■< million
the
at
-the end of
'to
{three
a
gain of $2,146
In the following
43%.
or
1914./By
the total was up
1918
$7,137 million,
'million
of
end
the total farm mort¬
years
trends of overall farm mort¬
debt
gage
two
(000,000
and
war
omitted)
in
corresponding
postwar periods:
First World War
4,991
$
-_
1915
1939
5,256
5,826
1941
6,537
7,137
1943
8,449 '
$6,586
1942
1944
______
1918
1919
Amount
______
1940
_^_
______
1917
___—
10,221
1920
Net
Second World War
Year-End
Amount
Year-End
1914
6,491
6,372
___
5,951
try
4,777
4,882
1943
5,108
'
Net
Source:
of
Bureau
S.
U.
Decline
$1,478
Agricultural Economics,
of Agriculture
Department
the wheels go
;v
'round.
Few of you present are
sively dealers in mutual
[Either you yourselves, or
firms, also do
,
; business.
a
For
your
general brokerage
the
economy
as
a
whole, and for the sake of main¬
,
balance in your own
•business, you should not ignore
.the fact that many of your mu¬
tual fund customers are potenti¬
taining
a
You and I know that the mutual
"funds, like other institutional
portfolios, are growing—in part—
at the expense of young and un; seasoned
securities. The mutual
-
•
purchasers of
^equity securities, but generally
»Ihese aa*e limited to outstanding isfunds
of
sues
i
,
With
large
are
businesses.
well-known
exceptions,
few
some
mu-
tual funds do not invest the large
-
f
at their command in new en-
sums
terprises.
•
-new
•
'
Rarely
they
buy
Yet the lifeblood of
issues.
nation
this
do
is
the
creation
and
growth of new business enterprise.
enter-
'Only by encouraging new
prise
avoid stagnation and
can we
-deterioration.
I
am
funds
investment.
individual
As
more
and
succumb
investors
sales
approach,
there
•fewer and fewer around
in
acquiring sizable posi¬
the
voting
stock
of
corporations. What respon¬
are
tions
in
many
sibility do they have • for the
management of those companies?
tual
charters
the
the new,
to
-the widely
to invest
In due time,
recognized problem of
-'risk capital will be put up to
investment
are
struggling outfit just
.getting on its feet.
companies
as
the
it is in¬
creasingly being put up to the in¬
surance
companies.
This is
of
most
mu¬
funds
prohibit them from
owning stock control of portfolio
companies, they frequently are
among the largest stockholders of
those companies. I
know there
least
at
are
two
schools
of
how-fund managers
should exercise their responsibil¬
thought
ity
on
to their own
situation.
this
shareholders in
Some
feel
that
if
-dissatisfied with
the
their
duty - is
to
dispose of the stock: others be¬
lieve their duty is to take steps
to
improve the management. I
express no opinion
as to either
course. I want to point this up as
another problem to which the mu¬
tual funds must give increasing
they
are
management,
At
this
stage
a re¬
fore
the
customer
sales
the
expense.
figures for 1948 if
of mutual funds,
one
of
main selling tasks is to build
public
acceptance
of
mutual
shares
as
mode of investment which
mode
own
of
characteristics,
which should and
what
it
is.
investment.
Some
and
be sold for
can
salesmen
seem
find it expedient to emphasize
the "security" aspect by likening
to
investment
shares
to
found
basic
ingredient
of
an
annuity
continued
it
time
per¬
have
restrain
necessary
veloping
de¬
were
along
lines. We
friction
can
we
to
certain practices which
unsatisfactory
shall undoubtedly have
in
the
future.
But
these
only incidental to the larger
harmony which this joint effort in
regulation presents.
In closing, I want to assure you
are
that we at the SEC recognize the
importance of well-managed invest¬
ment
companies in the overall in¬
picture.
They
have
become a permanent part of our
national economy. We are sym¬
pathetic to your problems. While
we may not always agree on their
solution, we want to be told about
vestment
growth.
them
have
there
period
freedom
believe the Act
we
work
and
them
out
with
you.
and
has
There has been unusual activity
field in the past week or so.
absorbed
are the
would like
sales, just
Here
you
Total
banking business
elimination
dividends
their
the
of
have
be
to
were
Washington
divided
be
in varying amounts
"
outstanding preferred on which accrued unpaid
their
reached
offered
shares. ' The
present
Holders
maximum.
part income bonds and part
recommended
examiner
stock
the
of
common
stock for
turning
down
proposal on the grounds that it would .increase the company's
debt and that control, which now is vested with the preferred
time .establishes quite defi¬
stockholders, would be transferred to holders of the common stock.
the company has an ambitious rehabilitation program, and fi¬
nances have been sapped by extensive debt retirement, disapproval
of the plan appears to eliminate any likelihood of income return
to preferred holders over the visible future.
then
have
them
back
the
As
of
existing
selling
Normal
turnover,
formula-plan operations, and
those who by nature cannot stay
adequacy
technique.
in
situation,
a
produce
By far the most important report was that of the Commission
presenting a reorganization plan for the combined Missouri Pacific,
New Orleans, Texas & Mexico and International—Great Northern.
This'is the most important unresolved reorganization proceedings
under Section 77 of the Bankruptcy Act.
Presentation of a plan
by the Commission does not by any means mean speedy consum¬
mation of a plan and discharge of the properties from the courts.
There will obviously be further arguments and appeals by security
an
expected amount of turnover. But
suspect that
a
large amount
comes from misdirected salesman¬
I
ship and from deliberate "switch-
ing.*1'
••
■
I
could, discuss at length the
evils
of
"switching" from one
fund to another in order to
filing of
commissions, for* this in¬
practice strikes at the
very heart and integrity of the
mutual funds. However, I know
that fund managers are aware of
problem and are making ef¬
forts to meet it.
the
insurance
com¬
furnish still another
Perhaps
panies
can
this connection. As you
lesson in
lapsed policies create
aware,
problem for them just as switch¬
ing does for you, for it is detri¬
mental to the public and adds to
the overall cost of insurance. One
Nevertheless, the mere
long step forward in this case that has been
a
argued back and forth some 15 years already.
earn
vidious
plan is
a
their treatment.
with
dissatisfied
groups
By and large the Commission's plan followed closely along the
sales
are
would
common
of
stock recapitalization
In another proceeding an examiner for the Commission recom¬
mended that the recapitalization plan of the Chicago Great Western
be disapproved.
A similar recommendation was made last year
but the company was granted a rehearing.
This plan contemplated
nitely that the investor was not
properly sold in the first instance.
The high redemption rate is a
reflection
on
the
quality
and
the
new
all stockholders.
among
out
come
that the
recommended
the
and
itself—have
ICC
the cus¬
within a
and
turn
shares,
put
the
by
examiner
stock
sell
that to
—
in the railroad reorganization'
Three reports—two by examiners and
recently.
plan of
Boston & Maine be approved.
This stock plan is designed to elimi¬
nate dividend arrears on the various classes of preferred stocks and
to simplfy the capital structure.
The prior preference stock, the
many various classes of junior preferred, and the common would
be replaced by one class of preferred and one class of common.
All of the new preferred would go to the present prior preference
one
An
High Redemption Rate
lines
recommended
zation
was
plan of a number of years ago.
substantial
and
would be
in
equipment.
new
on
spent
sums
It provides for
examiner.
by the
appreciably larger than
This was in recognition of the
interim
the
Proposed
fixed and contingent charges would be
to
on
property
debt of
improvements
roundly $398
$46 million greater than in the old
some
capitali¬
a
its own earlier
called for in
million
plan and total
increased nearly $2 million
$17,723,883.
'
The
amount
preferred
of
stock
is
almost double
that
of the
a
has a directive to com¬
personal and clients which,
company
pany
in part, says:-
"Do
lapse
not
us
to take
line
your
one
in any other
You
company.
in
lose
either case."
suggest that with appropriate
changes in language, this might
become
too.
one
watchword
a
Perhaps
way
to
it
may
reduce
with
also
you,
prove
distribution
expense.
Investment
Company
Act
unique piece of legis¬
lation. It is perhaps one of the
rare
instances where an entire
of 1940 is a
industry was able to agree
but the amount of common stock would be less than
In all,
originally proposed.
stated capitalization would
931,000, taking both classes of common at $100 a share.
this
had
capitalization
larger
sioners
advocated
been
common
on
a
comprehensive code of regulation.
Many of you will recall that the
be $611,-
Even with
there were dissents among the Commis¬
grounds that the plan was not liberal enough.
the
on
would
by
the
examiner,
be eliminated.,
Holders
the
are
old
Missouri
As
Pacific
expected to fight this
provision which is only one reason why consummation within the
next two years
Although
appear
the
does not appear likely.
the
proposed capitalization is
out of line with the recent and
properties.
increased it does not
prospective earning power of
The proposed fixed charges would have been earned
in full in each of the past 10 years
and for the full period average
coverage
would have been better than four times.
but
of
two
the
10
years
(the earliest two years)
contingent charges would have been earned
Legislation
The
earlier plan,
...
I
insurance
policies, to government bonds, or
to savings accounts. Such com¬
parisons, of course, are most im¬
proper.
A mutal fund share is
not an annuity. It is not like an
annuity. There is missing that
be
this
industry do
more
some
May I point out to you—and I
speak as one who was for many
years engaged in the investment
old
a
for
over 35
million shares; redemp¬
tions, about 17V2 million shares;
net growth, the balance of about
17V2 million shares.,
•;
with
its
them:
have
to
ment
has
that
redemptions have run at
just about 50% of sales. I am told
that for the first-quarter of 1949
the rate has dropped to one-third.
This is still something you in mu¬
tual funds must consider seriously.
Redemptions most frequently oc¬
cur during the first two years, be¬
your
a
surprised
was
learn
policy in
any old line company to take one
in the develop-* with us. Do not lapse your policy
It is
more
"
your
they
mutual
business of
the
[underwriting new business,- I am
suggesting that the maintenance
of a vital economy requires the
maintenance of private, individual
<
growth of the investment
companies
poses • < another
eco¬
nomic problem.
As [they grow,
attention.
into
-
Management Responsibility
not suggesting that
go
should
The
While
ally direct investors.
-
sponsibility fund managers
take cognizance of.
exclu¬
funds.
I
to
will
During
mar
time
short
(Continued from page 4)
That is what makes
companies,
distressed
tomer
The SEC Looks at Mutual Funds
"promotions.
there
sales
like
mit. From time to
are
technique also
raises another difficulty. In look¬
ing over the figures regularly
published by the SEC on the
growth and size of investment
4,933
1947
Gain__ $ 5,711
Current
circumstances
4,682
.
1946
„
impossible.
the
and
would
than
to
5,389
—
1945
10,702
such
next to
SEC
have frictions. Some in the indus¬
'
*
major casualties to
no
The
,
support of the persons for whose
regulation it provides, as well as
An important indication of the current financial strength of the
suggest
that an
investment in of the regulatory agency by which
nation's farmers as a whole and the prudence with which they have
mutual shares is as safe as gov¬ it is to be administered" (quoting
handled their record incomes of recent years is found in the trend of
ernment bonds or a savings ac¬ from
Representative
Cole
of
farm mortgage debt in the past war and postwar period, the Institute
count.
Maryland who introduced the bill
of
Life
Insurance
reported on<^
This type of selling is not only into the House). It was unani¬
gage debt jumped to $10,702 mil¬
'Aug. 8.
wrong,
it is also most unsound mously approved in Committee by
The current position takes on
lion, a gain of $3,565 million or from a
sheer
selling point of both houses, and passed without a
'added importance sihce it is in
50%.
Thus in the First World
view. The ultimate success of in¬ dissenting vote.
such marked
contrast
with the War and the three postwar years,
The industry has prospered un¬
vestment companies as investment
corresponding trend during the total farm mortgage debt rose media will
the
legislation. Public ac¬
depend as much on der
First World War period and the
$5,711 million or 114%. continued public confidence as on ceptance of investment company
"Non-real estate debt rose sub¬
three ensuing years, the Institute
performance. Over-selling is self- shares" was never so high. Last
-pointed out.
A financially strong stantially in both war and post¬
defeating. If you lead the pur¬ year, mutual funds added over
agriculture is of the utmost sig¬ war periods but the gain this time chaser
to
think
he
is
getting $145,000,000 to their assets
nificance to the nation's economy has not been as rapid nor as large
additional
sales.
They
something he is not buying, you through
since
As a matter will be the loser when he dis¬
agricultural
distress
has as during 1915-21.
have tripled in size since the Act
of fact, about one-sixth of the ap¬
[played a major role in past decovers his mistake. Further sales
was
passed. Indications are that
proximately $6 billion of aggre¬
pressions.
'■.
; J;
is
It
21
the record.
the
of
and the SEC. It
Misleading Sales Arguments
legislation.
drafted
was
representatives
are
annuities.
are no
(761)
margins.
In this connection
constituent roads did not have
expenditures in those years.
the
system
securities
are
Moreover, in all
total fixed and
by highly satisfactory
it should be borne in mind that the
the operating benefits of the property
While many analysts think most of
attractively priced on the basis of the
reorganization, the potential long delay detracts
appeal of the junior securities.
from the speculative
COMMERCIAL
THE
(762)
22
FINANCIAL CHRONICLE
&
before us) and
another sharp
the later 1930s, again led by the United States, and
others (all of the others
As We See It
rise in
(Continued from first page)
Mr. Deutscher then examines present day Russia
with an evidently expert eye to determine the degree, if
any, that Communism thus defined exists in that vast and
troubled land.
His findings are of interest, the more so
Sunday.
they
subject matter,
better record in
the past, or that we could make a better record in the
future, by emulating the countries whose progress does
not even compare with ours. After all, one can scarcely
call Russian resources niggardly. Nor is France without
Communism,
Socialism, Statism or some of the other variants of these
"isms" of the day in order to prosper at the expense of
alternative but that of turning to
no
the
Clark
are
at large has approached a level at which it should be able to
supply the barest essentials to the entire population" (italics
ours).
As to the distribution of what is produced, Mr.
Deutscher makes it plain enough that "to each according to
his needs" is no more than a hollow mockery.
a
And
now
to Mr. Clark's
testimony.
His effort—and
been noted throughout the world
work in this field—is to compare the quantity of the
good things of life produced in
one
hour by
the various countries of the world.
Such
one man
a
in
can
is
each
claimed to be inade¬
the great cost of
benefits
welfare
The
it
,,•
.
,
On the basis of elaborate
analysis and prolonged study,
in Russia has
uncertain and slow (for the past half-century) and the
recent figures indicate that productivity now is only at
Mr. Clark concludes that "economic progress
about the 1900 level."
on
by the public
But where does this leave the Soviets
presently being paid.
immediately relevant fact is
that
;
coal
remainder
accomplished
week
is
dictate
the
even
United
the
the
of
by
Not
one man.
of coal by
three-day week.
production for
of
the President
States
the
has
under the Constitution or
power,
whole
personal
law, to close down
industry on his
a
basic
whim.
is
it
Yet
now
being
ac¬
complished
by 'the ruler of this
private empire existing within our
Republic.
b
It is
against this background
that I wish to place before you
the facts. " And it is against this
background that I will show that
insatiable appetites of labor
bosses in their competitive race
the
superiority cannot be satisfied.
momentary gains—and they
would have to be momentary if
for
Their
they come into being—would have
come
from other segments of
to
need
more
First, people who
mentioning.
do
can
so
are
the
public, for there is no other
way.
;;
■
rV
un-
cover
extensive
which
;
Uncertain Progress
production
succeeded
already
the
of various nations.
its
and
the
quate to
designed as a sort of "common
denominator" enabling him to compare the productivity
most
and
tional tribute of 20 cents
Suffice it to say that it is
been
complete
a
ton of coal now paid
here.
us
unionism
big
on
in wringing natural gas and electric power— because of the express agreement
public, in terms of has about tripled in that period.1 which the union made with us a
higher coal prices, a series of spe¬ Even the government has consid¬ year ago.
Pensions deal with
cial benefits and pensions for the ered bringing in natural gas from people's whole life spans.
They
members of his union.
The na¬ distant places as power for atomic involve the voluntary or com¬
be taken
meaning of which need not detain
of
has
from
any
cise technical
of
fleeing from the further use of
Responsibility for Pensions ;•
monopoly power—a con¬ coal, although it is the nation's
Let us look at pensions for a
centration of power heretofore greatest energy resource. The use
unknown
in
American
life—is of coal has scarcely increased in moment, even though we strongly
able to turn'on or turn off at will 20 years, while the use of other contend
that pensions have no
the nation's production of coal, energy resources—like petroleum, proper-place in these discussions,
and
figure, ob¬
as a rough measure of the economic
nation, or at least a practical basis for
comparing potentialities.
For the purpose Mr. Clark
uses what he calls "international units," a term the pre¬
viously,
position of
itself, in the bitter
giant labor mo¬
trolled
he has for many years
for
fait accompli of the head of the
big
of
the in¬
for power of
the
(Continued from first page)
exercise
virus
the
The company,
Paralysis of
by
United Mine Workers, who by the
prime instance of
a
of
the device of the
.
Fight Between Rival Union Leaders
a
effect
straint
of
ever
It is
upon us.
The most recent instance of the
Play "the Sedulous Ape"
and
or
the origin
Hence
unconscionable exercise is the re¬
Steel Workers' Demands—Power
history, Russian industry
goals.
greater
and
equal
seek
to
arouses
envy
of the pension demand here made*
power
Deutscher finds actually servations
exists in this paradise behind the iron curtain.
Passing over gins of error, but even when allowance is made for all this,
aspects of the situation which are hardly germane to wholly we can scarcely justify any feeling that we should benefit
practical affairs, we observe, first, that Russia is anything but by aping any other nation.
a classless society.
Instead of any such state of affairs—
whatever it may mean—Mr. Deutscher tells us that "we have
witnessed a progressive, visible and all too striking growth of
the police state."
As to economic abundance, Mr. Deutscher
finds that "for the first time in its
them
public,
leaders'
nopolies.
fully realized that the estimates of Mr.
hardly more than informed guesses, and the ob¬
of Mr. Deutscher are subject to substantial mar¬
First, let us note what Mr.
goads
race
Of course, it is
Like
Is
Russia
the
of
union
government
of making good progress.
means
Let's Not
freedom.
What
should have made
we
segments
other
dustry and, therefore, too, thfc
public, our employees, our cus
tomers, our suppliers, and our
stockholders are caught, with the
real understanding of the subject for a
that the type of social and economic
that
happening in other indus¬
establishing new labor
patterns at the expense of other
tries—in
unionism.
believe
to suppose
what is
the
one
organization has nothing to do with such progress.
Certainly, one must search in vain for any good reason
so
have
with any
moment
believe, that
"capitalism" has somehow "failed," or is in danger of
failing, or must he "saved" from failing by something
more than homeopathic doses of Communism or Social¬
ism.
These arguments are usually accompanied by a
statement that unless some such course is taken we shall
no
dozen other factors enter, but neither would any
a
one
that we are
particular interest were it not for the fact
often told, and apparently all too many
course,
and
of
of course, would not be
was
in his right senses would
assert that such attainments as these are wholly a matter
of the structure of the economy or society.
The charac¬
teristics of the citizenry, the abundance of raw materials,
Now, of
are
The
are
There
again with Russia at or near the tail end. All this is ob¬
viously quite apart from the rebound since the end of World
War II which, as one might expect, was greater here than in
some of the other countries where war damage was great.
presented on the same day that another cor¬
respondent of the "Times" quotes new findings of Colin
Clark on the degree of productivity reached by Russia in
comparison with that attained by various other lands.
since
for which figures
least marked in Soviet Russia.
was
1949
Thursday, August 25
leaders
are
other (unions
of
competitively compelled
to
are
seek
although such plants
plants,
located close to
are
great coal fields.
Employment in coal mines has, in
same 20 years, gone down by
one-fourth, while factory employ¬
ment in general has advanced by
one-half.2
Coal prices more than
doubled during this period, while
those of natural gas and electric¬
the
better results for their
ity have gone down, and those of
members, regardless of what other
part of the public must be drained
petroleum products are up about
two-thirds.3
The great mechan¬
to make this
in the coal
industry in this period are well
similar
All
or
of
us
ical
possible.
familiar with the
are
mushroom
improvements
should
and
known
resulted
have
growth in recent years
of these giant labor monopolies.
Even in wartime, when all were
pulsory shifting away from'
people's immediate reach of sub¬
stantial parts of the values they
that those
sustain
consumption by them when
own production has ceased.
produce
currently
so
values will be available to
later
their
Pensions
take
can
from
people
jurisdiction over their own thrift
and savings and subject them to
unwanted mass disciplines.
Pro¬
policies and other prob¬
also involved, as the
and medical care of the
duction
lems
are
health
people has
American
lengthened
in lower prices so as to give wider the span of productive years be¬
of the other countries which also
use of this great energy resource
yond that formerly dreamed pos¬
have been through two devastating wars within the past
and to create confidence in rely¬ sible. a
three or four decades?
Have they been able to make desperately striving to stem the
For
these
reasons
pension
ing on its use as an energy re¬
tide then flowing against us, our
source.
Contrariwise, the union's arrangements are not lightly or
progress, or is this uncertainty and sloth peculiar to Russia? common
extremity was used to selfishness has done
away with
hastily to be entered into.
They
Among those countries for which the "Times" correspondent exact appeasement after appease¬
in
comparison with
some
quotes Clark's figures, there is none except Russia which is
not now far and away ahead of their position two or three
decades ago, and those which have made the greatest progress
and which today stand out from all others—Canada, New
ment from other
Zealand and the United States—are not socialistic countries.
Memories
The record in
In
some
detail is worthy
1947, the United States
was
"international units" per man per
ure
given by Mr. Clark for Russia in that
now
socialistic Britain, where dollars
figure for that
the best
war
of inspection.
producing about 1.19
hour worked; the fig¬
is .14.
In
scarce,
the
year
are
so
.59, which is appreciably below
level, but ahead of her best prewar record.
year was
France stands at .35, a little below its best prewar
record.
Only New Zealand with 1.07 and Canada with .96
are*
within hailing distance of the United States of America
which is
eternally flirting with the notion that it ought
adopt some of the plans, programs and procedures of
to
these other countries in order to abolish poverty
Let
here!
that this favorable position of the United
States is a result of its great distance from the site of war
and thus its escape from damage so
heavily weighing upon
no one
say
of the other countries with which it is
compared.
United States has always been far ahead of
some
the countries many
The
virtually all of
would have
us
emulate.
What is more,
public.
segments of the
Even the government has
been forced to bow to the striking
force
of
of
these
great aggregations
monopolistic
labor
power.
progress
most of them.
miners.
It has
undependable
to
this, its
many
narrowed and made
nation's
the
access
greatest energy resource.
I feel certain that the success
of
undertaken with the ut¬
must be
prudence, with the highest
most
regard for their moral and finan¬
cial integrity and based on the
lessons
Such ar¬
experience.
of
cooperation
and
good faith on both sides.
the devices of appeasement have —and he is
merely a symbol of
They are difficult, if not impos¬
been forgotten,
or that the
in¬
sible, of proper solution in an
1 U. S.
Bureau of Mines—Production
numerable occasions upon which
in
millions.
Bituminous Coal
Tons
atmosphere of conflict and dis¬
government was forced' to ap¬
are
not
so
short
that
the
United Mine Workers' leader
require
rangements
—
pease
On
one
coal
industry, which was then
particularly serious to the nation,
the government stepped in and
the appeasement took the form of
a
5 cent tax per ton of coal, a
tax to be paid by everybody using
coal, and the creation of a private
welfare fund—or perhaps I should
say,
welfare
state—for
miners
supported by this private tax.
The camel's welfare nose was then
definitely
inserted
in
the
cus¬
Since then his head
and his neck have
1929—1.74;
1948—1.91.
of those occasions in the
tomer's tent.
Year
average)
(daily
cannot be recalled.,
moved in, and
private tax is now 20 cents per
ton—$90 million for the year end¬
the
ing June 30, 1949.
Consequences
between the two world wars far outstripped
Progress in all countries was marked in the
Certain consequences of appeas¬
1920S, though it was far greater here than in most of the ing this union's demands for more
our
for
jobs
Crude 'Petroleum
average)
year
-r
Year
—
(monthly
Gallons
1929—83.94;
year
1948
—168.0
cubic
Billion
feet
tion
kwh.
7.99;
Power
Million
in
average)
S.
in
Gas—Cubic
Year
1929
—
—
Electric
average)
Year
1948—23.55.
Bureau
of
Labor
Produc¬
Power
1929
—
—
Statistics.
Bituminous Coal Mining—Index of
Em¬
ployment—(1929—100)
(monthly aver¬
age) Year 1929—100; year 1948—75.3.
Manufacturing Industries — Index of
Employment
(1923-25=100)
(monthly
average)
Year 1929—106.0; year 1948
—159.9.
3 U.
S.
Bureau
Wholesale
Price
Statistics—
Labor
of
Commodity
Indexes
(1926=100).
Coal
Bituminous
Year
Gas
93.1;
1929—91.3;
(monthly
year
(monthly
average)
year
1948—187.0.
average) Year 1929—
1948—89.2.
Electricity
1929—94.5;
Petroleum
—
(monthly
year
average)
Year
1948—66.3.
Products
age) Year 1929—71.3;
—
(monthly
year
present.
they
problems
To my
mind, the big problem is how
the
reasonable
security without losing his free¬
individual may achieve
■
regret that the union leaders
case have chosen to repre¬
sent U. S. Steel as being "against
I
in this
The
pensions."
that to be false.
CIO
came
Steel
are
was
often
record
displays
Long before the
into existence, U. S.
well aware that people
improvident and so face
problems in later life after theiir
productive days are over.
U. S£*
Steel did something about it.
U.
S.
Steel
was
a
pioneer
irt
pensions a quarter of a century
ahead of the social security legis¬
lation, and then established a pen¬
sion
aver¬
had long expe¬
pensions
and the
have
with
dom;
Commission
Kwh.
(monthly
year
2 U.
Sales
1948—227.36.
year
Federal
—
Natural
feet.
(monthly
82.75;
Association
Gas
American
We
trust.
rience
plan
1948—122.0. r for retiring
to provide something
employees to supple-
Volume 170
COMMERCIAL
THE
Number 4832
FINANCIAL
&
CHRONICLE
uct.
And then it buys some more
quences of the general assump¬
There is no significant
tion by employers of responsibil¬ machines.
made for their
difference between a material and
old
age.
Let the facts speak: ity for paying money to people
not producing. Some few concerns a machine, except the latter lasts
Over the years U. S. Steel has
a little longer.
A coke oven and
provided over $300 million for may be able to find room for
modest
pensions
not
deducted the coal that goes into it are both
employee pensions, aside from $90
from wages and still escape too materials that are used up in pro¬
million in taxes paid by it for
duction and replenished as re¬
Federal old age benefits.
U. S. great competitive deterioration or
provisions they them¬
the
ment
selves might have
Steel
over
currently pays pensions to
15,000 retired employees; the
whether
old
then
is
not
income,
need
folks
social
whatever
security benefit
receive. Every
the employee may
retiring employee who has con¬
tinuously worked 25 years for
U. S. Steel receives a Federal so¬
cial
security pension, or a steel
pension, or both. No one receives
in total
standard
in
its
an
amount less than the
established by Congress
social
security legislation.
U. S. Steel's pension plan further
provides for additional pensions,
paid for jointly by employees and
employer, on earnings not covered
by social security, for all who
elect to join with U. S. Steel in
so providing for their old age.
Let
it be clearly understood,
then, that my comments on the
union's pension demands are not
to be construed as evidencing hos¬
from that of
is
There
more
no
terminologies
ing
basis
tions.
America.
that
same
accountants
venience.
both
the question
is
conven¬
short-term
coal
of
of
to
over
what
forfeit
to
savings, or
acknowledging
spendthriftness,
they
extent,
incurable
are
own
those
savings
a
matter
of
con¬
purchased,
and
to
nation's labor force
both are replen¬
to
leaders
will find
union
job, and
presently •
contend
that
if
of
But when
the "wear and exhaustion
pile of coal," just as they now
a
tag "wear and exhaustion
coke oven."
S.
Steel
of
care
of
and
a
retires
from
U.
S.
Steel the day
in
general will rise, cutting back the
buying power of the wage dollar
to accommodate in terms of real
things the pension cost imposed.
These are the inescapable conse¬
merit.
uses
business
them
up
buys materials and
in turning out its
manufactured product.
And then
it buys some more.
A business
similarly buys machines and uses
them up
own
experi¬
insurance
com¬
is
a
pension
sad
plans
misfortune
have to
when
aban-"
be
in turning out its prod¬
is
plan like that pro¬
a
billion
a
dollar
pension
fund
when there isn't one.
Under the union's pension con¬
cept its leaders blow hot and cold.
for the Bill Joneses who immedi¬
to
or soon
pensions,
They are hot on the notion that
will become entitled the past service of present em¬
or for others who ployees creates an obligation, but
have been in the service for vary¬
they
but have not
reached retirement age. The mon¬
that such
ing periods of
years
are
cold to the possibility
obligation might have to
be paid. In their presentation be¬
The aggregate fore this Board they have very
not
paid current wages which amount, with interest, that would loudly claimed that industry con¬
they can freely elect to spend or have been paid in, if the plan had ceals profits; but in the same pres¬
to save.
U. S. Steel does not own been
operating, but which hasn't entation they have very quietly
its employees; they are free men, been
paid in at the time it is proposed that industry create and
each entitled to the respect of the
started, is customarily called past then conceal huge liabilities.
other as such.
U. S. Steel "cares service cost.
Any company that undertakes a
provides for the
ment of a machine, it
fairness provide for the
of its employees.
This
A
It
a
posed by the union is first started
there has been no accumulation
ately
takes
business
ing press money to take care
the unemployed.
Then prices
effect
in
been
government.
the using up
tag
replace¬ after the plan becomes effective.
must in The insurance company would tell
the
old age him that in order for him to have
employed will diminish.
analogy the $125 pension he would have
With
pronounced unem¬
may superficially seem plausible to put up the whole $19,870.5
ployment and men looking for
to some.
But this likening of men
The point is that to have money
jobs, then either wage rates will to machines is not complimentary
to spend in a non-productive pe¬
go down to make room for the
to men, and the analogy, upon in¬ riod someone must first have ac¬
pension costs or the government
spection, proves to be without cumulated the money. This makes
will issue what amounts to print¬
in locating a
number of those
difficulty
had
accountants wanted
^
the
its
that of
constitute what is custom¬ union leaders or the company?
How can pension promises be
called future service cost.
This
cost
is
recognized by the surely kept?
There is only one
union; and for all our employees way. It is to provide such annual
as
a
group it amounts to $42.5 amounts as will provide upon re¬
million per year, according to a tirement a fund sufficient to af¬
skilled public actuary who does ford the expected pension.
It is
work
for
unions, industry and certainly not to pretend that there
the responsibility of their man¬
provisions for old age
that are proper, workable, finan¬ agement to employers, union, or
with—its
em¬
government while submitting to for"—cooperates
cially sound, and within the
the mass disciplines and standard¬ ployees by paying money to them
framework of accepted American
representing the full value of
ized compensations that result.
principles.
If the responsibility
for em¬ services rendered, as judged by
If a business is to pay pensions
the public as customers.
U. S.
to people who are not working, as ployees' security is transferred to
Steel's wage policy is and has
well as wages to people who are employers, union or government,
been
to
pay
as high wages
as
working, then it must pay less to employees are denied jurisdiction those of other similar manufac¬
those working in order to find over their own savings unless the
and wages
which are
transfer
provides that pensions turers,
funds to pay those who are not.
shall be directly financed for the consistent with the rules of fair
This
is
true
in everyday life:
most part by contributions out of play underlying our competitive
The man who would spend on
Such wages of U. S. Steel
wages as voluntarily elected by system.
Sundays when he is not produc¬
are
among the very highest in
each participating employee. Any
ing must spend less than he earns
American
industry;
and
hence
other plan would deny to the em¬
on weekdays when he
is produc¬
steel workers are privileged be¬
ployee his individual freedom to
ing.
Everybody cannot consume
use
his own savings, say, to set yond most people with oppor¬
during the week all that is then
his
son
up
in business if he tunity to provide for their own
produced and still do any con¬
thought that a preferable use of Sunday periods if they so choose.
suming on Sunday—for there is
nothing left to consume.
Pen¬ such savings. It would do it by : ;
Cost of Pensions
every
employee's
sioners as non-producers cannot conscripting
I have reviewed the matter of
savings margin.
If the employer
consume
except as they share
seemingly
assumed
the whole responsibility for pensions. Now
what producers turn out.
Jet us turn to the cost of pensions.
In the final analysis no signifi¬ cost, the wage rate, would rela¬
At the outset I wish to say that
tively have to go down or else
cant
source
other than current
from my observation most people
the conscription
would be
payments for employee services
do not realize how much it costs
through cutting everybody's wage
performed is generally available
to provide pensions.
>
dollar by
inflation.
There are
to the nation to be tapped for
The union wants a. pension of
some very grave matters involved
$125 a month upon retirement at
Wage earners' pensions. No busi¬
ness ''can
force
government to in the union's pension demand to or after age 65 for all its mem¬
which the union leaders seem ob¬
reduce total taxes, or can force
bers, regardless of the respective
livious.
suppliers of tools and materials to
ages of those
employees at the
May I point out further that if
charge less.
In fact, if such sup¬
time the pension plan
is made
the decision or desire is to trans¬
pliers be also loaded with fixed
effective, and regardless of length
fer the employee's savings mar¬
pension payments to non-produc¬
of service before retirement.
It
gin
and its control to the
ing
people their prices would
wants this in addition to old age
employer, the union, or the
advance, even as taxes do to cover
benefits provided under present or
government, the transfer cannot
payments to non-producers. Other
future Federal social security acts.
be
readily
effected unless the
than payments to wage earners,
This may well be, of course, only
employees of a given concern di¬
there then remain only dividends
the beginning of additional pen¬
rectly contribute to the cost via
and
income reinvested.
But a
sion "wants."
i
;
payroll deductions.
The transfer
corporation without dividends or
Let me cite some examples of
via inflation, in order to work,
prospects thereof will either die
what pensions cost.
must move gradually across the
or never be born in the first place.
Take John Smith. He is 40 years
whole corporate front.
Any one
As
for income reinvested, that,
old the day the plan becomes ef¬
in most cases, and certainly
in corporation or segment of indus¬ fective on which day he also starts
try cannot boost its prices without
ours, is as much already spent for
to work for U. S. Steel.
If he
pricing itself out of business and
wages, tools and materials as the
its workers out of jobs as has hap¬ goes to an insurance company as
cost items so labeled on the in¬
an individual, he will be told that
The
come statement.
These items are, pened in the coal industry.
in order to get the $125 pension
steel union has, however, asked
moreover,
small in comparison
at the age 65 he must pay an
for just that.
With wages and pension demands.
annual premium of $597.25 in each
The
union
leaders
argue
Corporations continue to exist
of the following 25 years.* These
only because of the dividend and strongly that employers should amounts,
with
interest, would
income
reinvested
possibilities. take over the responsibility for build
up to $19,870 by the time
compensation
and,
Eliminate those possibilities and retirement
John Smith is 65 years old. This
new
businesses will remain un¬ seemingly, the cost thereof, and in
sum
would provide for and be
born, while expansion by existing a manner which would sacrifice drawn
upon to pay his pension.
every employee's jurisdiction over
concerns will be replaced by con¬
Take Bill Jones. He is 65 and
The
traction.
Those newly entering his own savings margin.
tility
of both
and
ture,
arily
replenishes its materials and ma¬
chinery because it owns them,
just as you and I care for our
homes and clothes.
Machines are
retain their indi¬
and juris¬
their
a
U.
vidual responsibility for
diction
a
as
used up,
If
as
have
productive periods.
The question is solely to what
degree
individuals
and
family
to
of
But both are
could
they
people—only those pro¬
are
are
ished.
to
ducing can provide, through vol¬
untary or enforced thrift, for their
own
or
each
other's
non¬
groups
ence
sense
and inventories of longerterm goods are so segregated by
provide
It will always be
who
income.
that
the
Nor is
of
a
plan
the face
long time, amounts for all the em¬
ployees, like the $597 for John
goods
even
for
sion
and
Inventories
and
self reliance to
in
pension system
a
Would this be protection
keeping it going after panies?
operating on a sound of employees?
Or would this be
long time. If a pen¬ deception of employees?
it has been
themselves mixed up in account¬
provide for their
final years of consecutive Sun¬
days.
There
is no significant
class of both destitute and aged
productivity
thrift,
sight,
starting of
quite different financial matter
in
of such pensions is $44 a
for no one questions that.
For a
month.
Social security benefits
couple of centuries the old folks
are considered in calculating steel
in America have pretty well been
pensions and such average amount
able out of their own prior fore¬
of $44 a month is in addition to
average
a
23
doned because of lack of funds, or
Smith, would have been paid an¬ when expected pension benefits
likening a man to a coke oven nually into a. fund beginning on can only be partly made good.
than in likening him to a lump the day each employee first en¬ The union's plan definitely runs
of coal, or a freight bill.
The tered the service. Such annual that risk. At such a time whom
union
people have simply got amounts, continued into the fu¬ would the workers blame—the
quired.
insolvency.
The
question
the
(763)
4 Travelers
Insurance
Company—The
non-participating annual premium for an
annuity of $125.00 a month commencing
at age 65 which was purchased at age 40.
5 Travelers
Insurance
Company—The
non-participating rate for an annuity of
$125.00 a month commencing at age 65
and purchased at age 65.
isn't
ey
there.
cost for U. S.
The past service
according
Steel,
amounts
to
the
to
actuary,
dollars.
billion
one
pension
plan
cannot fail to
such as proposed
recognize in its bal¬
contractual liabil¬
sheet the
ance
This
large amount is approxi¬ ity for past service cost. Is it dif¬
mately equal to the present mar¬ ferent from any other liability
ket value of all the outstanding that is incurred in one period and
stock
U.
of
ferred and
S.
union
The
Steel,
both
pre¬
recognizes the past
service cost but holds there is
need to put up the one billion
lars.
Instead it would have
in
collected
sums
paid in
pensions
rather
behalf
no
dol¬
the
of
for
em¬
retiring,
those
to
accumulated
than
employed
But
wh^n
future
the
they
retire.
amounts
Service
in¬
amounts
currently collected would be
those
are calculated on
the assumption
of actuarial soundness, which, in
adequate
because
turn, relies partly on the interest
earned
accumulated
on
funds
to
for
is
concern
it
conceivable
that
a
purchaser would not consider all
of its liabilities in determining the
of his purchase?
value
If the union's proposed
pro¬
tect the pensions of those current¬
ly
succeeding period, as
paid in Janu¬
work performed in the
previous December? In the case
of a sale of a business as a going
ary
ployees in service used directly to
pay
some
for example wages
common.
pension
effective, on that
clay U. S. Steel's liability for past
plan
is
made
service cost,is one billion dollars.
If the same union
to
all
plan is extended
corporations other than
and
banks
insurance
companies,
in¬
the liability of such corporate
is more than its entire
working capital of $65 billion.®
Consider the enormity of this im¬
dustry
payment of pensions.
For the
less financially
deficiency the pact.
union would increase the $42.5 strong companies it spells insol¬
million annual payment for future vency immediately, with attendant
defray the
To meet the current
a
$25 million bankruptcy as the money mar¬
the interest which kets close to them. For the more
strong,
those which
the one billion dollars would have financially
earned had it been accumulated. may weather the storm, it means a
material weakening of their abil¬
This additional annual payment
service
cost
by
amount equal to
the ity to maintain their productive
service cost tools and the jobs of operating
v
from growing; it would not pay them.
But that is not the end of the
off or even reduce the liability.
story of liability. Because of in¬
To put it bluntly, that which
flation the pension of $125 per
the union leaders propose is that
month now proposed has only the
this year's crop of pensioners get
buying power of about 75 prewar
theirs in cash, while yesterday's
dollars. Who knows when it will
get nothing and tomorrow's re¬
take $200 or more to equal 75
ceive an unsecured promise.
prewar
dollars with a further
Out of its own experience, U. S. added liability for past service
Steel has learned that no pension
cost? Who will pay for that? Bal¬
plan, should be undertaken unless ance sheets of the future even
it can be financed on an actu¬
though they give recognition to
arially sound basis, and is a plar. the then known liability, still will
to which the employee contributes be under a cloud if retroactively
substantially.
Indeed,
no
one created
past service costs for pen¬
should have greater interest in or sions are to be
bargainable.
insistence upon actuarial sound¬
Should a past service liability
ness of a
pension plan than the amounting to one billion dollars
employee who looks to it for old be
imposed, sound financial pol¬
age benefits; and no one unwilling
icy would demand, as would seto contribute towards his own old
curity of the pensions themselves,
age
requirements has a moral that the liability be met by creat¬
right to demand that others make ing an equivalent fund. The best
that provision for him. It was be¬
any company could do would be
cause of its experience that U. S.
to set aside an amount annually
Steel revised its pension plan fol¬ which would ultimately be suf¬
lowing
Federal
social security ficient for this purpose. The ac¬
legislation and coordinated it with tuary advises us that if U. S. Steel
the provisions of such legislation.
annually sets aside in respect of
For U. S. Steel to adopt the union's
past service the same amount as
pension plan, which is not in ac¬ the $42.5 million required on accord with well-tested practice de¬
would
one
merely
serve
to keep
billion dollar past
veloped from the long
of
insurance
experience
companies
in
the
pension field, would be basically
unsound and unsafe for employees
retired under such plan. We can¬
not
urge
fair
to
this too strongly. Is it
U. S. Steel to fly in,
ask
Commission
No. 876—
S. Corporations
insurance com¬
panies) March 31, 1949.
Page 2. Net
Working Capital at March 31, 1949 re¬
ported as $65.8 billion.
.
6 Securities
■Statistical
and Exchange
Release
Series,
Working Capital of U.
(exclusive of banks and
(Continued on page 24)
-
_j
-
THE
(764)
24
COMMERCIAL
&
FINANCIAL
by the union's consultant
Steel Woikeis' Demands—Power
CHRONICLE
stance.
eco¬
on
nomics.8
made
Cost of Living
One
Fight Between Rival Union Leaders
cost
of
Thursday, August 25, 1949
Whenever
to appear
profit
resentation, insinuation
those arguments
statistical
is the
leged
of
be
can
that it is desirable to raid
profits
wage increases is really fancy.
It is an effort to play
up and ex¬
large by misrep¬ for
comparisons,
clever
or
' the
presence
of
is
sufficient
al¬
ploit for these leaders'
own
pur¬
such
profit is poses a public fear of imminent
living.
Whenever con¬
prices advance, such ad¬ advanced as the occasion for an business recession. The otherwise
(Continued from page .23)
vance
is proffered as reason for increase in wages or benefits re¬ threatened
unemployment
will,
count of future service it would away from them in the hope that higher pay to shelter those union gardless of whether the demanded however, be
averted, they promise,
has
been
or
will
be if they can
take U. S. Steel about 35 years to a generalized leaning upon each members who are working from increase
only get a good fourth
catch
The round of wage increases
participation in any hardship or earned by the employees.
up
with the liability for other will give better results?
really
sacrifice which the
rest
of the appeal is emotional rather than rolling. The
past service cost.
reasoning of a public
"Needs"
country may experience as a re¬ reasonable. Because the so-called already fooled by three previous
The union's pension plan to be
sult of rising living costs.
The argument, when stripped to the rounds cannot be trusted, it
Let me now turn to the general
financially sound—and
an
un¬
seems,
union does not emphasize that ar¬ bone,
is revealed as envy and and so the public must this time
sound plan is intolerable—would arguments which the union has
gument this time. Changes in the greed, the union has confessed, be frightened into
cost U. S. Steel $85 million each advanced in
endorsing the
support of its several
cost of living since the last wage perhaps
necessarily, that profit union leaders' demands. •,
•
year for the next 35 years.
This demands for
in the form of
more
is
with
billion dollars
three
of
total
a
wage rate
subsequently continuing
annual cost of $42.5 million, sup¬
a
the matter
vant to
the same
was
hence as it is now. These
staggering amounts. Moreover
are
—and this is
fect
to
too many
multiplying ef¬
costs, as I will explain in
later, that approximately
people—there is
on
detail
doubles
even
What
that cost.
this
does
union is
a
mean?
The
asking U. S. Steel retro¬
actively to squeeze out of future
receipts from customers—the pub¬
lic—past pension costs originating
when
each
of
present
our
ployees began work
one,
em¬
five, ten,
twenty-five, and in some
forty or more years ago.
cases,
part, the rather well-worn
for
steelworkers.
a
Something
ence
I say
reason
■
-
than the pres¬
of profit must be advanced
Productivity
argu¬
not
increasing wages.9
more
it
this is quite fancy, because
flies
in
the
What
sense.
face
of
common-
under the
reason
suiv
is there to. suppose that if present
as a reason for wage increase lest
employers are unwilling or un¬
of the demand be exposed as a bare¬ able to hire
people at, say $1.70,
productivity. faced application of the he's-got- an hour, they will.. nevertheless!
union need an increase.
In the Whenever it can be shown that
hire more people if the cost is
it-let's-grab-it
notion.
This
is
distorted
sense
that
the
union fewer manhours have been used
readily understandable,
because boosted to, say $2.00, while si¬
leaders use the word "need," this
per unit of output, regardless of the basic
absurdity and immoral¬ multaneously the profit from hir^
is undoubtedly true because the whether
this is due to increase
ity of the ability-to-pay argument ing them is reduced or turned into
union has taken the official posi¬ of
volume or improved tools, the is
apparent when applied to the a loss? The union turns its own.
tion that workers "needs remain
gain is claimed as labor's in¬ simple interchanges between peo¬ reasoning upside down with ra-.
virtually limitless.'"? In short, no creased
performance for which ple in their daily lives, where the pidity when talking about
other,
wage increase or enlargement of higher pay is demanded. The sim¬
It argues, for example,principles involved can stand out things.
pensions or other benefits, how¬ ple facts
are, as everybody knows, unobscured by the panoply and more
goods
will
be
bought if,
ever
great, could in the union that virtually all the true gain in
propaganda of bargaining confer¬ prices are reduced; and, indeed,,
leaders' eyes dissipate the force
output per manhour is attributable ences. What would one
think, for everybody knows that more can
of the argument for still more and over
the years not to greater £rpexample, of the baker who re¬ be purchased if the price is less,,
more.
For that which the union
ployee performance but to provi¬ quired the buyer of a loaf of although the amounts by which.
leaders describe as "need" most sion
by the owners out of their bread to open his wallet and also yolume is actually affected by.
people would use the word "want" savings of ever more
powerful, reveal his bank account and who price changes widely vary among,
or
"desire," which describes an productive and efficient
tools, and then boosted the price of his loaf items according to their nature.
understandably
human
attitude to the organization of production
as
This is not to say that the work-,
against
the
previous
buyer
and is all square with the theory and
distribution by the managers whose wallet and
account indi¬ er is a commodity.
We are all.
of indefinite extensibility of hu¬ hired
by the owners. The effort cated lesser ability to pay?
man wants.
J . workers; and we are all free men.
and burden on the employees has
So far as I know there is no
per¬
ments.
tion
important because it
is too often obscure
alone
have
advantaged
disadvantaged
the
than
The arguments are, for the most
posing that everything else rele¬
35 years
determination
increase, health and in¬ rather
benefits and pensions.
surance
sumer
First, there is the
that
the
members
asser¬
of the
Another
union
stock
leaders
argument
is
.
In America a bargain is a bar¬
gain. It is unfair to make a bar¬
gain for the exchange of ones
goods or services and then much
later
,
■
along and demand that
We in U. S. Steel cannot sub¬ been decreased, not increased. The
A Profit "Squeeze"
v
more be paid for those past goods
scribe to the notion that people man hired to run a truck moves
Accordingly, the union leaders
and services.
It is unfair to ask should be paid in accordance with more dirt
per hour than he hired
have
on
this
occasion
devoted
the public now to pay more for their needs or wants or desires to run a wheelbarrow—but it is
their greatest effort to converting
things it had fully paid for when instead of in terms of the relative the truck which moves more dirt
the presence of profit into a plaus¬
they were purchased years ago— worth of their services to each while it is the man who works
ible argument for higher pay and
goods and services perhaps long other, as measured by what they less hard.
benefits.
I suppose they thought
since used up or discarded. This and all other consumers are com¬
Nevertheless, workers and their
proposed retroactive bill for pen¬ petitively willing to pay for such families are the principal bene¬ they could not gain public ap¬
proval for their demands, in view
sions must mean a higher price
services, either directly or indi¬ ficiaries. It works out like this:
of the price inflation that has in
for everything everyone buys in rectly, through
purchase of the When someone finds a better way
recent
years
regularly resulted
the future.
goods produced. If a man's pay is to produce things and spends his
from previous rounds of wagq in¬
The effect of the union's de¬ to pe pinned to his need or want savings to buy the machinery re¬
come
flation, if they exhibited indiffer¬
rather than to his skill and effort, quired to do it. that someone has
ence to the probability of an in¬
why should he ever become skilled as a compensation for his initia¬
crease in steel prices following an
or experienced?
Or, carrying it a tive and for the use of his savings
increase in steel wages. They have,
little
farther,
why
should
he the presence or prospect of profit.
accordingly, first assumed to dic¬
chased in 1928; or for the baby exert himself at all?
If this is to That,
in turn, provokes others
tate that wage increases must not
carriage you bought in 1935; or be the criterion, there is no doubt similarly to spend their savings
be matched by price increases but
for the television set you have as to what will happen to our for tools which increases the out¬
must, instead, come out of profits
just bought. The prices you paid country. In this particular case it put of the given product. The re¬
and so-called liquid reserves. The
for those things should have in¬ has been established that steel- sulting competition brings its price
union demand is thus presented to
cluded an amount to take care of workers are among the highest down for the benefit of every¬
the public as a squeeze on profits
the cost of higher pensions for paid
of all industrial
workers. body.
Labor is especially bene¬
rather than a squeeze on the pub¬
union members. Not having been Adherence
to
the
doctrine
of fited because the process involves
lic.
I would guess .that in this
so included,
this retroactive cost needs or wants would dictate that not only the jobs of building the
connection the union leaders have
will have to be tacked on to the steelworkers now paid more than new plants, machinery and equip¬
the idea that anyone guilty of re¬
price of everything you buy in others should have their pay lev¬ ment, but it also creates the new
ceiving a dividend cannot be re¬
the future. If the union is success¬ eled down so that those now paid continuing jobs of operating such
garded as part of the public. ,' As
ful in its pension
demand, the less than others might have their new machinery and equipment. for
profits over and aboye divi¬
prices of all the bicycles, automo¬ pay leveled up.
Indeed, it is by this means, and
dends, they are mostly spent to
biles, radios, baby carriages, tele¬
The American productive power by this means alone, that a new
mand
is
this:
You
did
not
pay
enough for the bicycle you bought
in 1911; or for your first automo¬
bile in 1920; or for the radio pur¬
vision
sets—as well as refrigera¬
tors, stoves, heaters, and the thou¬
things you buy in
sands of other
the future—will include
to
you
World
amount
such past service liability.
cover
If
an
were
War
I
doughboy
a
or
a
GI
in
in
World
War II you will be among those
asked in the future to pay an
added
dost
tanks and
for the ships, shells,
planes used up in the
That is what the union leaders
But how would
if tried?
a
it work out
It would boomerang into
substantial
workers'
notion
to
that
buy,
conscription
real
savings
already explained.
as
I
of
have
As I suggested at the outset the
union demand contemplates many
the welfare state
on
what
a
person
else
have, is
a
proper
measure
oblivious.
Yet
these
are
matters
of the
worth of the services he seeks to
It was built instead on the
sell.
principle that anyone and every¬
is freely entitled to seek out
the highest voluntary bidder in
one
all
the
land
but that
erce
no
another
his
use
one
his efforts.
tion
for
the
or
services, his
of his savings,
is entitled to
co¬
steal the fruits of
or
Through that protec¬
each man's wants
verted into his own
were
centive; everyone
operatively* encouraged
and produce for
con¬
productive in¬
has been co¬
to
build
himself; that
the American power
So much then for the argument
of "need." Aside from that
argu¬
charged not only with
high public interest but also with ment, the union has three stand¬
or
stock
vital significance to the whole ard
arguments
from
lifeplan, individual freedom and which it picks for emphasis to
suit any given occasion! This
security of employees.
was
As I see it the first grave policy recently admitted in a moment of
frankess
matter to be
tional
resolved
interest is to
where
the
in the
in
Should it
primarily rest with individual and
family groups as it has historically
in
America;
or
televised program
determine
responsibility for old
age income should rest.
a
na¬
should it be taken
self-sustaining productive job
into existence:
come
ductive
7 Official text of the
CIO's Full Em¬
Committee—Section III. Pro¬
ployment
duction and
the
Failure
of
Purchasing
Power.
"Any real familiarity with the
American workers and farmers and
their
needs.
Their needs remain
.
limitless,
these
the
.
.
virtually
but
needs
their
has
wherewithal
been
whittled
grinding inflation."
can
By the pro¬
investment of savings
to
away
fill
by
in
America
that
is.
a.
commodity except the leaders of.
organized labor, who, while pre-,
tending the opposite, seem never¬
theless
determined
standardize
the
limit
to
worker's
for their convenience in
ing of it by the head
across
the
tation
of
or
and
output
mass
sell¬
the hour
board.
Simultaneously
they would enforce such regimen¬
job
workers
by compelling
promotion to be
such things as dues
and
tenure
based ...upon
paying and seniority instead of
upon individual ability and effort.
But
though
the
worker
is
not
a
commodity, the service he renders
cannot
escape economic
law.
If
its price is boosted while demand
for it is diminishing, the only re¬
sult
acceptable
to
common
sense
is that still less of it will be pur¬
chased.
The services of workers
well
as
as
commodities
can
readily
be priced out of their markets.
Perhaps because of this conflict
of their
contention
with
common1
the
sense,
union
leaders, have
with the even fancier no-"
come
up
tion
that
increasing wages, will
something they call "pur¬
chasing power." This notion in¬
deed, seems to be the heart of the
increase
union's bid for public approval in
Exaggeration of Profits
in
force
or
rationalizing resorting to strike threat enforce-"
ment of a big inflationary fourth
production are provided so that the proposed squeeze on profits is,
round
of
increased
I
wages
and
suppose, habitual and routine
men may
go to work and produce
benefits. I am not quite sure
just
the marketable values which will with the union leaders in such in¬
what
the
so-called
"purchasingstances. It is to try to arouse sus¬
cover their
continuing wage.
picion and enmity in the rank and power theory" behind the union's
May 1 point out, however, that
contention is.
I have never been
file towards employers by widely
this whole process of expanding
able, to get anyone to define it
spreading
the
insinuation
that
production, of providing new jobs,
profits are greater than they are precisely and in detail as some¬
of increasing productivity, of low¬
thing sensible.
It may be that
reported to be by the companies.
ering prices, and indeed of prog¬
these
are
but ."appealing wordss
This same tactic was employed by
ress itself, all hangs on the slen¬
to cloak a give-me-the-other-felthe union leaders before the Steel
der thread of prospective profit
Panel of the War Labor Board in low's-money-to-spend idea. - But
to the thrifty person who invests
there are certain plain business
1944.
After
investigation,
the
his savings
facts
the
hope
of
profit,
the
tools
A second phase, of
of
4
in tools of production.
Without such thread, why should
anyone ever invest or spend his
Panel found
the
tization
directly
conscripting
itself the whole fruits of
tion
and
thus
that
sever
thread, on that day
America will stop.
for
costs
innova¬
union
for
of
third
stock
leaders
take
justification
the
off
of
is the presence
employer's
the argument upon
the
further
17,
1949,
Television
on
Forum
war
contingencies as 'con¬
profits'
is
unwarranted.
reserves
are
sound and necessary
as
Increasing "Purchasing Power"
de¬
The third aspect of the union
prospect
profit. This is leaders' effort to persuade people
which they are
or
the
WNBW-TV—Washington,
"American
Air"
D.
C.
over
of which I
*
9
Wages—Prices—Profits
in
the
Steel
Industry—page 3. "The Union does not
pretend that ability-to-pay as measured
from
of
and
which
tled."
financial statements
is,
by itself, the one ground on
wage
demand should be set¬
company
a
-
am
very sure in¬
can
find: them
in the accounts of
company. *' One of those facts
deed,
because
my
is that
wage
I *
daily
proven
increasing at this time the
rates
or
other
employment
costs of U. S. Steel would
not and
could ; not
increase
the
commu¬
nity's net power to buy goods by
iota; instead, it would, in due
course, diminish the community's
one
power
I
do
but let
shelf
:
program
of
additional
by industry, and appear to be in
with good accounting
practice."
that
by Robert R. Nathan, July
the
for
amor¬
accordance
bearing down heavily in this in¬
8 Statement
for
and
regarded
argument
allowances
depreciation and
Such allowances and
in
Ability to Pay—Profits
The
I quote:
and
cealed
slender
progress
follows.
and
reserves
depletion
in
as
"The Union's characterization of
money
for more efficient tools?
If organized labor should ever suc¬
mand
f
'UU.jv;'l-yf
wages.
ceed
way
Times
arose.
things, moral, economic, and po¬
change, but truth remains.
litical, to which the union leaders
appear
wants
feels he must buy, or
thinks he ought to
or
someone
products,
fighting.
ask.
not built
was
pay
son
trying to turn the worker into
to buy goods.
not
wish
me
repeat:
raising steel
the
to
wages
country's
-
be
too
harsh,
The idea that
will
over-all
increase
power
to
buy goods is the purest balderdash.
With G.
(Special
to
H.~Walker
The
HARTFORD,
Financial
& Co.
Chrontcle)
CONN.—Edward
P. Piatek is with G. H.
Walker &
Co., 50 State Street.
25
(765)
companies,
The President's Attack
nevertheless bound
either party, is
profound influence upon
each of these companies and many
others.
I believe the steel com¬
to have a
panies have done a disservice to
industry and to the people of this
country in agreeing to appear be¬
fore this panel, even though such
agreement resulted from unprece¬
exerted both by
the union here involved and by
the national Administration.
> ■
dented
pressure
it is time that we drew
I think
Either
clearly.
issue
the
are
we
going to have collective bargain¬
ing and a private competitive en¬
terprise system or we are going
to
have
industry-wide bargain¬
compulsory arbitration
(through fact finding boards or
otherwise) and statism. The ac¬
tion which this panel takes will,
ing,
to
a
large extent, determine
very
the road the country will take at
critical juncture.
this
members a state¬
ment
concerning
this
dispute.
That statement required no re¬
all of its
sent
hundreds
ply. V Nevertheless
of
already
all strongly en¬
dorsing
our
position.
As
one
member company, a New England
manufacturer, puts it:
"I
think
industry-wide
bar¬
letters and telegrams have
received,
been
is one of the shortest
routes to overall government di¬
gaining
it
in
control,
and
rection
feel
I
and
companies that indulge
pursuing a dangerous
that those
are
of expediency*"
course
Long Island chemical manu¬
A
facturer writes:
".
.
is
tern
realize that if the pat¬
we
.
taken it will cover
while we
once
the
entire country
are
only a small manufacturer,
do appreciate the efforts be¬
we
.
.
.
small
not the
is
the
the
way
don't
into
of
of free enterprise.
want to drift further
American
We
steel industry
crossroads
the
but
alone
socialized
need
further
not
the importance
emphasize
of this proceeding,
effect of the panel's ac¬
the
and
granted
dentially
shall
them
to
appointed
not
see
only
automobiles,
and
some
determined
this.
I
this
the
do
not
want to have all matters of work¬
ing relations determined by pan¬
Collective Bargaining
,
industry-wide bargaining,
Like
arbitration of the terms of a new
collective
takes the
agreement undermines
because it
bargaining
decision
final
from
away
the
parties who should be responsible
for it and puts it in the hands of
a third party who has no respon¬
sibility for living with the de¬
cision
makes.
it
"'O
full
confidence
and
integrity
good
terms
are
imposed
upon
management and workers by such
third
less it
is not
the
Neverthe¬
of
accident that
an
a
hear
this case. There is good evidence
indicating that it was planned
panel
has
been
set
to
up
that way.
This panel
workers
nor
gree
have
the
same
formula
the
terms
imposed
by
a
third
party lack the element of volun¬
tary agreement which is the very
essence
of collective bargaining.
It
said
be
well
may
that
the
proceeding before this panel,
however, is not arbitration. It is
merely
fact
finding
and
the
recommendations
of
this
panel
are not binding upon either party.
perfectly frank. The
entire country awaits the action
to be taken by this panel.
All of
the parties
involved know that
your recommendation is bound to
have
a
profound influence on
public opinion.:; Furthermore, if
your
recommendation
favors
granting some or all of the union's
demands, the national union and
us
be
Administration
exercise
ence
to
can
their
the full to insist that that
recommendation
Therefore,
very
be relied upon
extensive influ¬
these
be
accepted.
proceedings are
much akin to compulsory ar¬
or
industries.
evidence
As
it
that
had
that
from
the
to
from substantial negotiations
negotiations which have hardly
been
begun. Is it not strange that
all of these companies have now
reached the point where their
negotiations are before you for
finding and recommendation?
A
review
the
win
not
the
of
union
from
employers
could
it
knows
majority 6f the
genuine collective
a
by
bargaining.
:
The result is that government
believe
tivity into
threaten
strike.
a
will
man
President
fact
a
name
Tru¬
finding
board.
have
I
of pointing out the dam¬
age which may result to the econ¬
omy and to the institution of col¬
purpose
Sees
"Mr.
Murray then is expected to
satisfaction
with
this
and to lift the strike threat
course
earnest of his sincerity until
as an
makes its
the board
obviate
will
the
report. That
of an in¬
need
junction."
•
,
The setting up of this
predicted
panel was
than a month in
the
negotiations
more
advance,
and
in
conducted
were
accordance
with schedule. One would have to
union which
in 1946 called a paralyzing strike
in
the
steel
industry affecting
exactly the
same
with which it had
bargaining relations re¬
gardless of the status of its nego¬
tiations with each company. In
this
production was stopped
simultaneously in some eleven or
twelve
hundred
companies.
In
way
negotiations had been
going forward satisfactorily at the
cases
some
time
strike
the
other
called.
was
local
the
cases
union
In
had
presented any demands
management when it went
not even
to the
strike
on
that
of
too, the President
States intervened,
case
United
the
personal recommendation
made
a
and
appointed
fact-finding
a
board.
result
The
tern
was
was
which
increase
18VzC wage
an
became
throughout the
the
pat¬
tionary spiral that followed. The
union
that
proceeded
it
much
is
on
theory
the
easier
to
get
a
friendly Administration to impose
solution in this fashion than
is to go
cess
it
through the arduous pro¬
bargaining.
of true collective
three
Today,
union
same
tactics.
It
years
pursues
threatened
later,
the
the
same
a
nation¬
although its negotia¬
tions had not reached an impasse
wide
in
all
strike
cases.
Mr.
Randall
applied
to
get
Inland
Steel.
He
Administration
the
sure
the
hope that it can
in
friends
its
which
would then pres¬
New
York "Times" ar-
the same "New York Times"
ticle
it
national
the
companies to accept. As
same
ar¬
refuse to
outside aid
"In the
whose taxes
regards
Murray
confident that the mem¬
not lend
will
board
tools
to effectuate such strategy. Such
strategy, if successful, will replace
collective bargaining with coer¬
cive
bargaining.
That kind of
solution to labor disputes can only
themselves to being used as
in
result
eventual
control and
aid
stantial
despite the
has been
that
government
worse.
as the union
of referring
sult
will
board
be
<
pro¬
by the United States since
the close of the war. In the event
country should find itself in
a
position, there would be
similar
outside
no
a
forthcoming.
i d
the United
Should
States
go
be¬
cost
of
of
the
ucts
hopes, the re¬
this case to, a
compromise
some
labor, then the prod¬
industry will neces¬
sarily be priced out of the market,
there will be a reduced effective
products of the
industry and unemployment will
increase.
Raising the labor costs
demand
this
at
grease
for
the
juncture
can
and
may
the skids for a depression.
Pressure
Administration
initially opposed
submission of this negotia¬
to a fact finding board. They
The companies
the
tion
The process of collec¬
tive bargaining had not been fol¬
the
finally
view
of
consented
the
reluctantly
in
exerted
by
pressure
Administration.
considered
state
individual free¬
neither
provide
dom
another long step
control, which can
collective bar¬
genuine
nor
gaining.
rapidly catching up with
of her national
around 40%
twice
ceed
that
has
wealth
estimated
the
accumulating since
been
the
Pilgrim Fathers landed here
than 300 years ago. In the
meantime, we are told that in
spite of a bloated national income,
more
than three times
more
decade
high
as
as
the country cannot
pay
its way but must resort to
heavy deficits and thus add to the
We would then likely have 'one burden of the more than $250 bil¬
world'—dominated by the com¬ lion .debt upder which we are
staggering.
It
is a
sad
com¬
munists.
yfV.; ■ V'y."
mentary on a country with such
"But those who are concerned
a record for outstanding contribu¬
with the preservation of Federal
tion to material welfare that our
fiscal integrity and want to de¬
officials can come forward with
flate '< the
bloated
budget
are
Federal spending as the only pan¬
branded as 'anti-social,' 'econom¬
the danger point, then this
country would go down and drag
the rest of the free world with it.
yond
a
ago,
,
who
to
mustering their strength
a huge spending pro¬
are
launch
for
acea
domestic
our
economic
ills and for world salvation.
and to block the economies
by
the
Hoover
Commission. This group is unwit¬
opinion
It
that
is
my
these
President
"The
deficit
advocated
means
of
;
that
with
forces
joining
the
basic strategy
is to force this country to spend
communists whose
stakes
"The
are
and
high
the
Unless there is a fun¬
late.
hour
change in our financial
damental
policies and national philosophy,
we
are
headed for a crisis in a
After
time.
of
thorough study of
situation, Senator
a
financial
our
period
short
comparatively
Byrd warns: '. . . I am convinced
that in the coming year we shall
extend
our
fiscal
where
extremes
to
stability
economic
and
be unable to withstand
ditional
pressures
avoidable
When
our
it
ad¬
which are un¬
in
fiscal
year
1951.
fiscal and economic sta¬
bility weakens there is certain to
be a demoralizing domestic crisis
be dis¬
private enterprise
would
probably
which
to
astrous
our
therefore, to our form
government.'
V "s,;» ,
/
system and,
of
"Despite
never
in
our
the
perilous position,
history
of
this
or
country have there
been so many promises made for
providing 'benefits for the peo¬
ple' of this country as well as for
other
any
the backward
world. The ulti¬
costs of these projects stag¬
rehabilitation
sections
mate
of
of
the
they run
beyond the trillion dollar range
ger
—an
the imagination
as
amount that might well ex¬
strongly
financing
our
as
a
economic
But the facts
ills at this time.
recommended
tingly
has
correcting
gram
;
recommendation which will raise
the
toward
or
collective
and
freedom
bargaining,
sub-<®>-
vided
may
If,
a
Continuing, the bank says, "Great Britain now faces
crisis
budge, the strike threat
this
of
dividual
absorb
.
of
tion
The First National Bank of Boston in its current "New
says
acute
an
now
thus be
softened for easy conquest.
The
bald
facts
are
that the
battle
brought out of the back¬
ground."
'
am
gentlemen, that the is¬
you
is the preserva¬
free competitive enter¬
before
sue
toward bankruptcy we are
race
Britain
Great
will be
I
gain by it.
I repeat,
"New England Letter/'
Britain, no
would he forthcoming.
the
board's report as upholding his
against communism will likely be
viewpoint and the steel companies won or lost on the financial front.
Mr.
at¬
that if this country gets into same position as
warns
itself into bankruptcy and
(dated June 14) states:
"If
pointed out that the wage demand
presented to this panel had never
been made by the union to his
company.
the
recommendation
a
and
graphi¬
cally described the situation as it
in
indulged
in
board
the
from
High Taxes Menacing National Solvency
ic illiterates,' and 'ruthless men.'
the Arraigned against them is a pow¬
erful lobby of Federal employees
grand
strategy to bring this case before
a
to
bargaining
bargaining,
of
has
union
country and
major factor in the infla¬
a
a comparable case
undermining of real
bargaining.
place
bers
union officers.
In
In
national
the
from
instructions
with
accordance
in
brazen
collective
lective
First National Bank of Boston, in current
our
express
The union involved in this case
is
I am not here to
merits of the dispute.
come here solely for
the
the
England Letter."
inevitable and that the union will
of
1946
in
for
prise system characterized by in¬
However,
argue
income,"
is
look far to find
Intervention
President's
The
parties
the institution of col¬
saved
wise
steel indus¬
serious depression.
a
of¬
talks
contract
dis¬
try, it may well convert the cur¬
rent uncertainty in industrial ac¬
the
in
stalemate
a
union-company
in
increasing
in
cost in the
labor
the steel
and
ficers
the
all
varies
the
to
quote
me
government circles.
soundings in
results
mendation
dispatch dated June 13:
union
recom¬
a
issues
basic
14, 1949, a full
month before this panel was ap¬
pointed. I read from a Washington
the
makes
the
on
sory
article in the New York
an
let
way,
board
this
pute
"Times" for June
"Both
companies
back
case
genuine
been
planned
these
way
a
Let
appointed
V i/
'
•
If
employers have made preliminary
de¬
of responsibility for making
work.
Accordingly,
the
Presidentially
a
bring
has before it some
63 companies. The conditions and
status
of
negotiations
among
neither management
party,
could
intervention,
otherwise, it might ob¬
tain a compromise recommenda¬
tion which would give the union,
if not what it asked, at least as
much as it expected to get and in
any event, more than it could gain
by negotiating directly with the
companies. That had been its pre¬
the
in
faith
members of this panel.
out
Where
it
if
expected to be applied in all other
collective
Undermines
Arbitration
that
self.
a
vious experience. And if it works
in the steel industry, it can be
have
I
extract
not
deter¬
bargaining.
the
tacks of those who have the most
a
could
a
through genuine collective
mined
will
board
politics, above com¬
promise and above such pressures
as may be exerted upon you.
The
only sound course is to remand
arbitration upon the most
industry of our industrial
economy.
If this panel's recom¬
declining
period of falling
Presidential
board
that
panel
it¬
House
White
the
from
came
this
that
above
it will have contributed to
imposing nation-wide bargaining
and something akin to compul¬
by
board
such
to
rise
mendation
it
about
electrical,,
confident
am
of
members
Presiboard,
we
steel,
but
a
coal,
other
by
have their
decided
it
because
that with
increase through collective
bargaining. It remembered a pre¬
vious experience which led it to
industries
working relations also
petroleum
as
by
and prices which may re¬
Management's responsibil¬
case required resistance
pressure, even if that pressure
ity in this
confidence
believe
given
are
and because they will have
contributed to any increase in
ing
integrity
collective
bargaining.
Should this panel decide to take
this road, it will go down in his¬
tory as a group of*men whose
sense of social responsibility not
only prevented the danger of a
serious depression but who like¬
prices,
every com pany
tion.
to
unions
of the
members of this board gives me
sult.
apparently
procedure
market and in
in good faith they can arrange to
have part or all of their demands
that has
mess
this
•
known
wage
this
in
hope that by refusing to negotiate
bogged down Australia, New Zea¬
land and Great Britain."
I
other
If
try.
which
telegraphed:
"This
action
agreement but with the aim of
seeking an imposed
settlement
•
representative."
facturer
the
be limited to the steel indus¬
thoroughly
are
you
union
felt certain
midwestern. manu¬
which
A
would
serious blow to
The
wages
Union Tactics
The
upon
Nor
collective
true
in any case.
Wide Implications
case
whether
recom¬
any
the issues before
to
as
this board.
thereby dealt a
collective bargain¬
have
they
cause
bargaining by
mendation
consenting to this hearing be¬
in
there is serious
and
lective
of which are
NAM, were wrong
some
members of the
bargaining had been undertaken
effects.
ered from the
all
at
question
negotiations
seems
to show that they were
conducted from the beginning not
with
the
aim
of
reaching
an
ing made by industry as a whole,
of
which was
used extensively during the war
by the National War Labor Board
and which has so hampered and
harmed free collective
bargain¬
ing that we have not yet recov¬
els rather than have them
the NAM
As I mentioned above,
lowed
bitration—a procedure
(Continued from page 8)
!
Collective Bargaining
on
are
spent by the govern¬
much
less
productive
money
is
ment
by individuals and
according to their dis¬
This has been demon¬
than that spent
business
cretion.
the Tool Owners Union,
recently made a study of
the fluctuations in employment in
strated by
which
to
1929
country for the period
this
1948,
and found that the pri¬
is 14 times
vate investment dollar
jobs
creating
in
effective
more
public spending dollai.
"Instead of being a remedy, def¬
icit financing will aggravate our
the
than
basic
problems, undermine our
security, and, unless checked, in¬
vite disaster.
The government is
taking
an
increasing proportion of
income.
national
our
1929,
In
Federal, state, and local govern¬
ment
come.
took
In
and in 1948
it
was
over
21%
nearly 27%, while for
the fiscal year
1950 it will likely
be still higher.
"There
of in¬
13%
than
less
1939
are
,
,
,
/
signs that the peo¬
ple are at last being aroused.
A
nation-wide,
non-partisan
tax¬
payers' association is being formed
to demand action on the Hoover
Commission's
recommendations
for
elimination of waste in the
Federal
Everyone
fiscal affairs
Government.-±
concerned about
our
should join in this campaign.
be victorious this group must
prepared
a
crucial
solvency
the
battle
upon
destiny
Western
be
to match the zeal and
determination of the spenders.
is
To
of
for
which
this
may
country
civilization."
It
American
hang
and
26
THE
(766)
COMMERCIAL
&
FINANCIAL
CHRONICLE
Another promising development
The Outlook for Railroads
(Continued from first page)
Railroads reach every pan ot the
quate level. The ability of the rail.udus to maintain adequate earn¬
country and handle every article ing power will depend in large part
commerce
every
day in the upon (1) their being allowed to
Considering all costs, rail¬ cnarge compensatory rates and
roads furnish the cheapest form fares for their
services; and (2)
of transportation. Their service is auoption
of
a
sound
national
dependable.
By i n t e r c h ange ..asportation
policy
providing
among themselves they constitute
equal treatment for all forms of
an
integrated
and
coordinated transportation.
'
system of transportation wnich
Capital Requirements
has no parallel elsewhere. They
Adequate earnings also are nec¬
represent a .net investment after
depreciation* of some
bil¬ essary to meet the capital require¬
lion, supplied by private inves¬ ments of the railroads. One basis,
There is not the slightest doubt
of
roads
investment year in
tors.
_nd
purchases in 1948 amounted to
approximately $3 billion.
Their
ments
They employ more than a
million well-paid workers.
Their
accruals
tax
1948
for
$10 billion. Truly
exceeded
must have
railroads in and for America, and
outlook
the
we
them—for
for
their
strength—is
importance
to
solvency
of
the
and
paramount
American people.
the
At
nize
outset
must
we
recog¬
prospects
de¬
pend first of all upon the general
economic situation of the country.
people, and the volume of traffic
is, therefore, directly tied to the
volume of production and con¬
for
It is not
here
us
and serious
many
problems that are involved in the
maintenance
and
expansion
of
-
consumption
and
We
the
for
such
ex¬
the
in
1920
railroads
after
their
to
government
operation during World War I, an
verage of more than $500 million
ach
has been spent
year
.he
im¬
on
must
in
for
assume
the purpose
of this discussion that
these problems can and will be
solved
by
the
genius
of the
American people. With that as¬
sumption, what
here want to
we
find out is how the
railroads
be expected to fare in the
can
future.
in
iiillion
reach
1948
and
is
expected
million
1949. Such expenditures should
n
continued at
to
years
am
the
sure
all
you
aware
are
the railroads have
of
in
made
their
and fixed
debt
charges from the
peak in the thirties.■ Let us look
the
at
figures.
reached
a
in
and
1932
Class
of
matured
Funded
debt
un¬
railroads
I
peak of $10,769 million
from
that
high level for
a
economies
The
mately
In
fact,
,
year
com¬
loco¬
motives. New passenger cars on
order totaled 1,780 as of that date.
The
40-hour week
two-thirds
reduction that
funded
debt
made
of
has
been
since
voluntarily,
about
one-third
in
has been
while
has been
only
due
reductions in funded debt of
to
com¬
panies undergoing reorganization.
Annual charges also have been
substantially reduced since 1932.
Total charges amounted to $654
million
in
in
1948,
lion
1932
and
$425 million
reduction of $229 mil¬
35%. Decreases have been
or
a
brought
about
payments and
in
both
also
will
in¬
in
Keep
railroad equipment owner¬
ship
at
levels
of
the
rentals.
reduction
funded
debt
in
Of
to
the
total
refinancing
rates, accounted
for $204 million.
and
war
vious
annual
charges were decreasing
steadily, total investment in road
and
equipment increased some
debt
to
investment
of
was
funded
reduced
from 41% in 1932 to 23% in 1948.
It is significant that the
great¬
in debt reduction has
est progress
been made
good
in
times of
earnings.
reduction
in
rate
Of the
$4 billion
in
the
17-year
period
two-thirds
was
the
war
1932-48, about
accomplished in
and
tively
want
post-war years of rela¬
though still inade¬
earnings.
The
railroads
and
reduce
so
seven
high,
quate,
intend
their
if their
debt.
earning
to
continue
to
They will do
power
raised and maintained at
example,
have
before
the
now
freight
must
for
should
at
in
high
a
Funds
years.
equipment
come
replace¬
car
continue
many
financing
for
purchases
substantial
meas¬
from
ure
earnings, but whether
they come from' earnings or are
borrowed
from
investors
repaid out of income,
level
less
is
be
adequate
railroad earnings, at no
of
than
the
to
6%
only
on
an
net
means
investment,
of
assuring
a
railway plant capable of meeting
the needs of the future.
can
an
the
be
ade¬
of its realization is
indifference.
We
must
way
public
have that degree of public accept¬
ance
which will put pressure on
government to allow the railroads
to
charge compensatory rates and
fares
their
for
services
and
to
give the railroads equal treatment
with all other forms of transpor¬
tation.
-
be one of the
bols
Deficient Postwar Earnings
The
postwar
earnings of the
railroads have not measured up to
this 6 per cent mark.
operating income
for
return
a
per
In 1947 net
$780.million
was
net investment of
on
cent.
In
1948
roundly $1 billion for
net
investment
The
best
it
was
return
4.24
of
estimate
made at this
a
cent.
per
that
on
can
be
time, taking into
ac¬
count the increased cost of the 40-
hour
week
that
1949
due
net
will be around
would be
a
September
1, is
income
operating
$700 million, which
little
more
than 3 per
cent on net investment.
With
this
record
of
adequate earnings in
peak
peacetime
tinent
roads
to
can
ask
a
than
period of
the
oilin
of diesel locomotives
a
to
to
question is
the health and
or
the
ed
There is no in¬
shortage in diesel
either in the
use
over
dining car cars, togeth¬
pleasing interiors and ac-
accommodations, have provided,
greater comfort. Improved design
age
of
quire
trucks
has
and
provided
a
brake
apparatus
greater
safety
for
the long run.
that if
performed
railroads
the
all
American
on
performed
were
by
diesel locomotives, the total con¬
sumption of diesel fuel would be
less than 5 per cent of the total
consumption" of petroleum prod¬
ucts in all fields and would actu¬
ally be less 4han the quantity of
fuel consumed by the oil-burning
steam
locomotives
now
in t use.
That
is
burn
fuel
because
more
oil-burning
diesel
engines
than
efficiently
steam
locomotives.
The thermal
engine
cent
for
efficiency of
approximately
is
diesel
35 per
a
against about 8 per cent
oil-fired steam locomotive.
as
an
intensive;
of
betterment
stable
A
structure.
essential
the
to
prer\
trafiic
interruption
Such a roadbed
train delay.
that is not subject to dam-;
by floods and has a minimum
one
number
of
soft
the
spots, which re¬
of
slow
orders
use
Substantial; expenditures
been
roadbed
made
to
have
provide
such
a;
effort
the
that
ment
other
outdo
almost
was
20 years ago.
to
unheard of
This type of equip¬
specialty or one-way cars. That
is, they are' ordinarily used only
for the commodity for which they
are designed and for the most part
must be handled back to the load¬
The early 1930's
the beginning of this type of
saw
with
devices which made
sible
for four
loaded in
it pos
automobiles
to
40-foot box car.
is the railroads' method of
be
This
a
com¬
peting with the auto highway
transport which hauls a like num¬
ber of cars per unit.
Within the last few years the
automotive industry has set up
many assembly plants throughout
the
country.
Parts are shipped
from the manufacturing centers to
these assembly plants many hun¬
dreds of miles away.
cessitated
ne¬
installations
new
This has
of
the largest
for
pense
material.
are
Such
terms
as
and skidless racks
cars
used to describe these various
types of
In
cars.
1937
the
conceived
the
in
cement
cement
idea
bulk
to
industry
shipping
of
facilitate
the
increas-i
ing shortage of suitable tie time
has made it imperative that
measures
be
taken to
lengthen
their
service
life.
fective methods
consist
sote
of
The
most
developed
treatment
other
or
so
with
ef?
far
creo¬
preservatives
to
R-ent ^cay and the use of large
tie
plates
reduce
to
mechanical
Fifty .years ago the ties
used in replacements on Ameri¬
can railroads averaged about 300
per
mile
annually.
Renewals
now average about
115 per mile
annually,
notwithstanding
that
wear.
traffic
is
greater and speeds are
years ago. No sat¬
isfactory substitute for wood ties
has yet been found, and it appears
higher than 50
that
will have to continue to
we
depend
on
forests
our
for
important element of track.
Many
facture
automobile.
item of ex-|
The
ber
ous
ished
years
With the exception of fuel, ties
constitute
safety and
stanchion
recent
only capable of support-j
ing heavier equipment than those;
of early days, but, in many in¬
stances,
through
truss
bridges?, j
have been replaced using girder j
construction,
thereby
providing;
greater clearance.
equipment in box cars to provide
for loading a car of axles, wheels,
engines, fenders, and other vari¬
component parts of the fin¬
in
constructed
not
are
ment is known to the industry as
ing point empty.
the driving of piling, and
grouting.
Bridges that have
been
On the freight side the develop¬
of new
shipping methods
ment
by improving the drain r-
a.ge, by
by
Rolling Stock Improvements
this
,
; ;
practices have been
new
put into Effect in the
of
interest of
in the
economy
and
manu¬
rail.
Length¬
ening the cooling time of rail
after rolling has been effective in.
preventing the subsequent devel¬
use
opment of transverse fissures, one
the principal causes of rail
of
failures.
A process for
hardening
extensively
prevent rail-end batter,
by wheels passing over
the ends of rail is
Some of you may have the idea
that diesel
locomotives in road
loading and unloading and reduce
the cost of distribution. The rail¬
caused
service
roads
now
the joints.
preferred
on
produce
runs
exceptionally good operating
sults
re¬
therefore
and
give a some¬
what exaggerated picture of sav¬
ings, and there is some basis for
that belief.
However, the best
re¬
from
complete dieselization through the elimination of
expense of operation and mainte¬
come
of such facilities
nance
as
coaling
experimented with
dinary hopper car, putting
on
it with four hatches
loading.
cessful
The results
that in
the
on
were
last
an
or¬
roof
top for
a
so suc¬
10
rock
and
starch
even
railroads
from
diesel op¬
eration. where this type of loco¬
motive has assumed a considerable
are
now
During the
gerator
war
have
improved
ities.
Frozen
believe these savings are exagger¬
'
quite
popular
lives,
and
been
locomotives
continued
there
has
progress
also
in
the
development
few refri¬
out and retired. The
of the traffic moved,
quite substantial, and I do not
Along with the improvement in
power through the use of
very
private
car
lines have been building re¬
frigerator cars to replace those
worn
in
it
have
our
was
means
them. "Another
refrigerator
the
is
late
that
necessary
in
provement
struction
qual¬
become
every-day
the railroads devise the
transporting
new cars
insulation
foods
made
Central
we
have
practically our entire
steam locomotives, and we
over
fleet of
are
Railroad
of
im¬
con¬
installation
of
producing results in the main¬
tenance
of
a
with
the
railroads
best
favorable
costs that
results
have
dieselization.
ratio
of
compare
that
other
produced
with
are run by pulley con¬
tact with the car wheels to circu¬
form
car.
the
air
maintain
and
a
uni¬
temperature throughout the
The
Illinois
operation
with
Central
the
in
co¬
shippers
of
perishable traffic has produced an
experimental refrigerator car
built of aluminum with fiber glass
insulation,
bunkers
recessed
and
exact
modernization
and
receive
built. Since that
cars were
are
motive
conditions
are
Likewise,
structure
in covered hoppers.
percentage
ated.
where
ment
time the railroads and the
various
extended
favorable.
track
ings
being reported by
The practice of weld¬
ing together the ends of rail, elim¬
inating the joint bars, is being
human
for
consumption
are
to
transported
stations, water stations, treating
plants,
enginehouses and other
servicing facilities that are neces¬
sary to steam operation.
The sav¬
that
used
improver
railroad
ownership
of
covered ment has been made in the design
hoppers has risen to 18,500 cars. and manufacture of joint bars,
In addition to cement, such com¬ bolts, spikes, switches, frogs and
modities as soda ash, phosphate other track material.
Improve¬
years
fans, which
key
is
roadbed
the higher speeds at which diesel
linois
an impor¬
bearing upon the health and
security of our national economy.
tant
conclusion
work
security of rail transportation
transportation and has
lunch and
per¬
be expected to establish
that
of
'
supply and cost.
future
the
is
and
/ equipment.
First of the specialty cars were
question of fuel
in various classes of service.
raises
treatment
received
is
with
subject!
important
has
roadbed
and
That
Another
which
Structure!
Railroad
of
vention
er
weight of
1
Betterment
the
and
of these
use
tremendous strides
use
ex¬
car.
ing, restful seats, adequate illumi¬
nation, easy riding, new designs of
forms of transportation have pro¬
duced some load-carrying equip¬
creased
on
now
tio of lading to empty
efforts of the railroads to provide
the best. Improved air condition¬
and
refinement of
the steam locomotive. On the Il¬
their earning power at a level of
6 per cent on net investment.
The
answer
informed of the
deed
made
is
car
car
building
have
permitted
lighter cars of adequate strength
being produced, increasing the ra¬
speed of rail travel has kept
the traveler well
rail¬
traffic, it is
whether
and
fueled mobile power units has in¬
diesel
less
,
sym¬
progress
The
pulverized coal as fuel,
project is likewise fast
reaching the decisive stage in its
development.
\
Turning
from
locomotives to
cars, the publicity that has been
given to advances in the design of
passenger cars for comfort, safety
this
and
come
recognized
railroad
of
economy.
burning
locomotives and high-speed steam
locomotives operate these trains.
The diesel locomotive has
to
This
oil-burning hibit at the Chicago Railroad Fair.
gas
turbine locomotive, one of
The modern freight car of all
which is now actually operating
types has been greatly improved
on American
rails.
For the past
in structural strength with trucks
several years various railroad and
designed for safer operation at
coal companies have been work¬
higher speeds with less damage to
ing on a gas-turbine locomotive
lading. Newer methods of freight
<
Diesel Motive Power
sults
relatively
debt
are
due
war
materials.
since
cost
that
ments
3.41
significant also that in this
period while funded debt and
billion. The ratio
for
of
being replaced
at the rate of
approximately 75
thousand per year. With nearly
one
and
three-quarter
million
freight cars averaging approxi¬
mately 20 years of age, it is ob¬
It is
$3.5
cost
present
considerably
run
increased
the
and
at lower interest
than
more
interest
reduction, interest payments
funded debt, resulting both
from
no
would
higher than before the
total
on
in
In fact, a study which was made
Even if the present improve¬
ment program were to be discon¬ and published during the past year
tinued, expenditures necessary to by the leading manufacturer of
railroad diesel locomotives reach¬
in
made
1932
which the country wants and must
have.
The only thing that stands
crease
expenditures for laborfuel for railroad
saving machines to reduce labor
doubled
re¬
is
It
vitally needed to insure the everprogressing rail transportation
dication of any
the
approxi¬
the entire
industries.
current
steam
with only 30
pared
cars,
written off in
was
organization.
essential
from
come
investment.
Freight
beginning of 1949, a reduction of
approximately $4 billion or more
than 36%, in that period of 17
years. Much more of that reduc¬
tion was paid off by solvent rail¬
roads than
other
the last few years.
This has natu¬
rally been due to their dependable
performance and the savings ef¬
.rend from steam to diesel loco¬
fected through economies in train
motives and the continued
re¬
operation, both freight and pas¬
placement of passenger equipment
senger.
In switching and transfer
with modern light-weight equip¬
service the diesel locomotive has
ment will require large outlays of
been well-established for years.
new
capital.
More
than
1,000
There is no question that further
diesel locomotives were on or¬
savings can be developed by in¬
der on June
1
this
Most
added
was
peak
reduced to $6,850 million at
the floor and not the average of
railroad earnings.
It is a modest
figure compared with earnings in
near
great reductions which
very
1
come.
Railroad Debt Reductions
I
and year out.
fact, I go further than some
associates in the industry in
believing that -3 per cent should be
of my
,
record of $1,342
a
make 6 per cent on net
In
current
improvement
pro¬
gram, which was begun during
World War II, amounted to $1,273
be
America.
of
record
of
owners
ly to railroads because their sole
function is to transport goods and
production
the
railroads
penditures in the past. Since the
return
to
sumption.
the
is
uture
Although that is true of all lines
of business, it applies particular¬
to consider the
of
provements and additions. Cost of
railroad
that
.or
perhaps the best available,
estimating the capital require¬
to
control.
in motive power is tne
in my mind that the country can
afford and should allow the rail¬
year.
Thursday, August 25, 1949
fans
and
ice
temperature
will
make it safer and
of
the
continue
in
attention
to
effort
to
an
more
economi¬
cal to maintain.
Unprofitable
It
is
Passenger
service
profitable
on
to
the
breakdown
that
the whole is
the
The best evidence
is
Service
knowledge
common
passenger
not
:
on
of
railroads.
the
net
subject
railway
between,
operating
income
as
freight and passenger operations
which
the -Interstate
Commission
annual
the
has
Commerce
reported
in
its
"Statistics of Railways in
States"
since
1936.
United
These reports show deficits in net
railway
operating income from
service averaging $245
million annually for the six years
passenger
1936-41.
There
averaging
for
the
flecting
the
movements
travel
a plus figure
million annually
years
1942-45, re¬
concentrated
troop
was
$208
four
and
during the
other
military
war years.
With
Volume 170
Number 4832
the disappearance
of troop trains
travel, the def¬
and other wartime
icits
have
creasing
returned
with
cline in total
the
and
in¬
are
continued
travel
and
con¬
operation. The 1946 deficit was
$140 million. The 1947 deficit was
$426 million. The 1948 deficit was
$560 million.
These calculations
be
taken
with
vations, but they
a
very
"
t
not
ao
that
in
with
my
subscribe
the
any
to
railroads
can¬
com¬
of thinking^
way
the
theory
warranted
are
incurring such distressing def¬
icits
to
advertise
their
Passenger
service.
fares
low, but I have
be
can
freight
too
are
idea that they
no
increased very materially
without
traffic.
from $1,623 in 1922 to $3,590 in 1948.
curtailing the volume of
machines.
of
use
up
:
.
;
<
Labor unions have represented
railroad employees for approxi¬
mately seventy-five years.
The
first legislation dealing with labor
relations
industry
in 1888, the year af¬
enacted
was
ter
in the railroad
the
Interstate Commerce
This law of 1888 has
passed.
been amended
and
is
from time to time
known
now
Labor Act.
way
time
when
conditions
There
Rail¬
long
working
employees
was a
railroad
working conditions of indus¬
trial
workers
the
came
generally.
National
Then
Labor
for
Rela¬
tions Act (the Wagner Act) which
was enacted in 1935. This
legisla¬
accomplishment of the
guarantee
employed
ments
eral
before
time
modern
no
all
way
able passenger operation and
centrate
which
those
on
be
can
profit.
out
unprofit¬
con¬
operations
made
to
show
a
.The
passenger
service
must be made to stand on its own
feet and pay its own way.
The
local
the
period from 1929 through
1932
the average hourly earnings
of railroad nonoperating employeets
and
industrial
the
workers
level
same
were
56
at
of
of
example is the
Board on
Emer¬
dispute involving
a
Brotherhood of
Engineers for
two
request of the
a
Locomotive
men
each
on
do
to
after
for
similar
demand
by the
Brotherhood of Locomotive Fire¬
and
men
Enginemen for
fireman.
aver¬
second
a
;
road
pay
for the same industrial
employee was $1.47.
Instead of
great, if not greater, extent in
is a thing of the past.
On the setting the pace in": wages, we
Illinois 'Central j Railroad we no are. novr having to meet the pace other industries, such as printing,
construction, building trades, en¬
longer
operate
any
passenger set by other industries'.
'
;
tertainment, to mention only a
service
whatever
on
passenger train on
lines and main lines
both branch
average
approxi¬
mately half of our road mileage,
including routes which once sup¬
ported three
or four or more pas¬
trains /aday in --each^ di¬
rection. The only passenger trains
senger
on
railroad
our
suspicion
that
above
are
high-speed stream¬
are
liners
operating
between
large
of population 300
miles
more
apart
I believe such
centers
and
trains
are our
from
passenger
ford to
service.
Unfor¬
ment
As
to
able
can
af¬
necessary equip¬
handle
result
a
railroad
no
the
own
all
there
reaction- due
loads.
peak
is
unfavor¬
an
to
inadequate
inferior service at these times.
Another problem to be met is the
or
handling
traffic.
mail
of
Both
of
and
these
express
want
high
speed, but at the same time there
must be provision for local stops.
The
railroads
with
also confronted
are
-Interstate
an
Commission
•
Commerce
order
restricting
high-speed train operation unless
they spend enormous sums for ad¬
ditional signal protection.
:
AH
high-speed passenger trains
placed in service on the Illinois
Central
the
have
start
The
coach
made
and
City
of
from
money
continue
Miami,
streamliner,
consistent
increase
and
of
an
President
mending
hour
and
to
our
has
do
Florida
been
producer
revenue
so.
a
ever
With the recent addition of
sleep¬
Limited
between
and New Orleans is
best-paying trains
Chi¬
one
in
of
Amer¬
Our
popular dayliner, the
City of New Orleans,, has been an
outstanding example of profitable
high-speed operation and excel¬
service.
The
Chicago-St.
high - speed■/;' streamline
trains, the Daylight and the Green
Diamond, have likewise demon¬
Louis
strated
that
this
type
of
service
will
bring ^increases in revenue.
Speaking from
our
experience
and
similar
experiences on other
roads, high-speed passenger trains
permit "railroads
to
make
-Will
money
"<■"
on
Another
-for
business.
factor
the
railroads
creased
age
ccst
straight
railroad
an
passenger
is
in
the
outlook
greatly
of labor.
The
time
of
rate
employees
hour in 1922.
was
in¬
aver¬
pay
of
60 .cents
From that point it
went up to
$1.39 in January, 1949,
and with the adoption of the 40hour week it is estimated that it
will
be $1.54 in
September, 1949.
Using another yardstick, the aver¬
This
case
is
typical of hbw labor costs on rail¬
roads are affected by the prevail¬
ing practice in American industry.
The
Emergency Board said in its
decision: "Forty basic work hours
per
week with time and.a half for.
overtime
the
is
prevailing
tice in American
been
those
industry.
prac¬
It has
put into force not only in
industries on which it was
imposed by the Fair Labor Stand¬
Act of
ards
1938
but to
steadily
a
enlarging extent in industries
cluded
that act.
from
stantly
being
is
It
accepted
ex¬
con¬
through
collective bargaining in retail es¬
tablishments and in local service
industries.
numerable
It
is
in
effect
continuous
industries.
in
in¬
production
industries
which employ craftsmen included
in the nonoperating railroad
Many
groups almost uniformly have the
40-hour week, and
frequently the
employees live and work in the
same
communities and
as
1940, not
during the winter season,
throughout the entire year.
ing cars, it promises to increase in
earning power.
The
streamline
t
an
October
out reduction in pay.
in
lent
to
1,
forty-hour week to be
a
is
the
recom-;
increase of 7 cents
an
1948, and
by the
report
a
retroactive
pattern
cago
The dis¬
wages.
Emergency Board
bers
ica.
in
pute resulted in the appointment
only
Panama
the basis for
forty-hour week, changes in rules
since its introduction in
but
was
few.
demand, from
nonoperating
railroad employees last year for a
only hope of profit effective September'. 1,
1949, with¬
tunately, -the demand for such
service is subject to extreme fluc¬
tuations, and
This pressure
:
the
the
of
itself
mem¬
unions.
same
are
This
impressive
extremely
basis for in¬
sound
a
cluding the railroad industry
within
its
stand
now
out
a
as
ception."
I
The
scope.
believe
striking
"
'
railroads
ex¬
\
*
.
,
As you
all doubtless know, the
authorizing
replace the interim increase of
5.2%
allowed effective Jan. 11,
1949.
Petitions as finally amend¬
12, 1948, requested 13%
certain exceptions.
with
increase
To meet the emergency
in
increases
the
wages
Oct.
retroactively to
railroads asked for
5.2%
only
ing.
caused by
effective
1948, the
1,
interim in¬
an
and
8%
of
crease
allowed
were
pending
full hear¬
a
.
1939
Since
railroad
of
wages
employees have been increased
86% not including the increases
that will be caused by
the 40-hour
creased
Sept. 1..Prices of
supplies have in¬
117%.» Taxes
have in¬
creased
189%.
week beginning
materials
and
To
in
increases
totaling 57%.
/While
been
tical
have
increases
rate
railroads,
with
a
to
forward
one
how
as
necessary
no
prac¬
the
to meet the in¬
creased costs mentioned could
be
obtained other than by increasing
Obviously there is no
the rates.
other
way
necessary
ices
to obtain the money
to maintain the serv¬
public. In¬
the public and the railroads
by the
required
deed
will be most fortunate if the rail¬
future
wage
trends roads can successfully meet the
stability and unK situation without further addi¬
formity, rather than diversity, but tional increases.
the factors affecting wages can¬
will be toward
not
be
avoided
nullified, and
changes .in any industry cannot
be confined to that industry but
will invariably spread to others.
Many of the demands of the
railroad labor unions
to their
are
inimical
interests, to the rail¬
industry and to our free
economy.
Specific examples
of
own
road
this
laws
are
the
which
so-called
in
full
crew
Central
the
West
in
Increases
or
of
needs
creased
in
the
as
of
practical
there
are
or
increases
matter.
In
be used in the
locomotives
and
self-propelled
machines of varying
characteris¬
going
cerned
these
operations
as
be
used
a
in
safety
irrespective of the work
performed by the equipment or
measure
all
on
number
to
adjustments in specific
the
meet
These
continue
tics operated on railroad tracks is
fixed by law. These laws set the
men
are
made, it is then necessary to make
tention
of
to cover
in stated amounts.
traffic.
operation of trains,
some
certain deviations
increases
Some
the
people
will result in
thereby
That is not
and will
joint at¬
carriers.
increases
and
be
anew
are
and
seem
rates
the
the
time
shippers
that
of
adjustments
receive
to
of
needs
the
upward
continued
for the
the
with
case
The
volume
is
is
ume
rates.
to
not
As
due
last
to
volume
increases
that
much
a
large
it
has
and
certain amount of traffic needed
for their successful
operation, the
losses have not yet reached the
point where it may be said that
they are seriously crippling the
railroads.
1949,
Of
far
revenue
handled
was
10.5%
last
year
10.1%,
ton on the
the railroads
the
over
and
On
mile
lines
the
on
smaller
10%
volume
of
greater than
which
spending
be con¬
in freight
to
loss of traffic
self-defeating.
idea. It has been
not
are
parallel
Ohio
and
more
than
situated.
so
ing
■
enormous sums
money
charge for their use, it
belong before the rail¬
any
not
may
roads will be
it was last year. This would in¬
dicate that while the railroads are
of
these waterways without mak¬
on
to say that the revenue of the rail
traffic is about
Railroad
,,
safe
is
some
others.
It must be very obvious, however,
if
the
government
persists
in
was
it
Central
others
period
same
ton
per
either basis
than
Missisippi, Illinois
rivers, and we feel it
per
by
it hurts
more
the
effect, the
traffic
course
example, the lines of the Illi-
noise
when all of the^increases allowed
as of Jan.
11 were in
average
contract¬
or
the railroads and takes from them
a
railroads
March,
common
the
serve
While
this ' highly
subsidized
competition is decidedly unfair to
origin terri¬
freight rates.
February
which
owning
ing companies.
For
In
Missisisppi River
The best informa¬
benefit of the
not
tory; inventories generally in all
the level of
the
the total tonnage, and the re¬
maining 80% is handled by con¬
tract or private carriers for the
of cotton stored
carryover
other craft oper¬
or
of
mills; there will be
in warehouses in the
specific
public
generally handle only about 20%
this year as
of
by
car¬
specified
tion to be had is that the
carriers
conditions.
less;
cotton has not been spun, with the
moved to the
only
between
illustrative.
as
last and the demand for it is
result
handle
Take
ness.
in
example, there has not been
mined
contract
by individuals or firms in
the handling of their own busi¬
fact, the
largely due
is
themselves
substantially
(this includes
ated
of
,
economic
much coal
as
which
is meant boats
the
as
matter
a
general
For
on
large
However, this smaller vol¬
year.
inland
points on contract or agreed prices
or rates; private carriers by which
traffic
as
or
of traffic
commodities
of
not
railroads
these
hold
all
government);
riers
Rates and Traffic
railroads
the
on
which
kinds
the
cause
expressed.
so
railroads
the Federal Barge Line owned
change in the views and opin¬
ions
of
craft
handle
to
all
Notning
happened since that time to
a
water
carriers
out
participat¬
testified before
so
the
con¬
stabil¬
more
waterways divides itself into three
parts; competition with common
revenue
Some, if not all,
Commission.
as
Waterway Competition
without them,
in rates
of the railroad officers
ing in the
normal
Competition
increases
carriers.
and
until
height of
a
handled 64.3%.
seriously crippled.
Coastal shipping was greatly re¬
duced during the war.
Some of
handling a smaller 'volume of the service was discontinued en¬
traffic, they are receiving more tirely and has not been restored.
money for what they handle than /The tonnage handled by the coast¬
they would have received without al shipping has not as yet reached
the increase. To repeat, there has the
prewar volume. - The tonnage
been nothing happen so far to of the
coastal
vessels
was
not,
cause
to
me
that
creases
thorized
feel
that
have
will
the
in¬
been
au¬
that
any
just
ap¬
one
in
result
preciable loss of traffic
will be
or
'
prior
Federal Spending on Waterways
spending
on
inland
waterways is another factor in
On the
Mississippi, Missouri, Ohio and
Illinois rivers, and similar streams
in other parts of
the country, the
since 1921
million to make
for
today's com¬
government
has spent $1,249
them
suitable
merce.
'
•,
.
"..
•
Some 30 years ago the govern¬
ment also went into an experi¬
ment
on
the
Mississippi River and
certain tributaries to demonstrate
the
possibilities of river transpor¬
all
There
this
invested
was
period.
$24
than
were
therefore
are
competition
the
tween
in the
will be
ous
of
V
the
principal
for these large
'
7
reasons
be¬
future
seri¬
a
Intercity Trucking
trucking has in¬
rapidly since the war, the
this is plain to see.
were
One
intense
While intercity
products
profitable.
available.
not
was
near
and
un¬
Many
leased
or
the railroads.
threat to
gasoline
proven
sold
operators, and
their operations were not profit¬
able.
With
increased
operating
expenses, wartime shifts in indus¬
trial production, as well as the
postwar shifts, the outlook does
not appear as bright for the suc¬
cessful operation of coastal fleets
as it did prewar.
However, there
may be adequate traffic for suc¬
cessful
operation
of a
limited
number
of
vessels at profitable
rates. All things considered, I do
not think coastal shipping is or
which
have
other.
many
creased
far
the
exists.
destroyed during World War II
this," Congress is now being asked
appropriate $18 million more
to the Federal Barge Line so that
it may continue in experiments
so
in
in
in
still
condition
The
Notwithstanding
to
balance
tonnage
more
and
Federal
in
war,
had
direction
This
or
Federal
the
of the vessels
v".'
the outlook for railroads.
to
they
million in the Federal Barge Line.
It has not made any money during
have to be made
After these blanket
to
the
tation.
blanket
exist
in the
states
of
Indiana,
Wisconsin, Missouri, Arkansas and
Mississippi.
Under
these
state
regulations the number of men to-
numerous
that
in¬
commodities
or
geo¬
graphical areas, but on the whole
the
increases
are
applied per¬
centagewise
increases than
and
the
specific
rates
the
for
from the over-all pattern
and
-
rails
concluded
was
meet
to
railroads
revenue
form
a
cases
rates
the
1940,
on
ized
that the diversions, if any, would
not be appreciably greater with
self-defeating. VY-v; ■,?/,
to
suggestion
money
to
rates
objections
many
expressed
come
allowed
freight
*
sought by the
has
meet
these
in costs, the
been
have
railroads
date
,
increases
enormous
It
before
filed with the
were
Commission.
this
case,
have caused reductions in volume
which have no connection with
freight rates of approximately 9%,
on the average, to supersede and
ed to Oct.
rate
its de¬
increase in
an
in
1943, when it reached
generally been off; and ther have
been many other conditions that
announced
II
Aug.
on
cision
hand, handled 62.3% of the
trend
would
Commission
Commerce
Interstate
was only 3%. In 1948
4.4%. The railroads, on the
total
lines
lines have been reduced through¬
out the year;
retail sales have
Freight Rate Increases
.
they
considered
was
petitions
reduced
for nonproductive time,
or time not worked, constitute a
major obstacle to full production.
They are not confined to the rail¬
road
industry,
but exist to as
ing
than
latest
question
the
At
a
the
second
a
this moment this
Emergency Board has be¬
it
rail
1945 it
was
other
far made
so
the
for
it
hearings
lengthy
need
no
was
same
fore
locomotive
diesel
man's work. The board
one
decided
Conditions of this kind involv¬
per
hourly wage of the same rail¬
employee was $1.21 and the
age
use
Presidential
a
on
cents
hour, but in July, 1948, the
the
produced
would result in increased
Another recent
In
see
enacted, % it
progress s and
power.
report
gency
Fed¬
bills
by
has
and
by
ditions have become
from
the
general increase
every
in¬
that
are
with
limit
effected
general
proposed
the railroads. The results
72.7% of the total. In 1948
were
would; vitiate
economy
partial solution.
I
been
been
have had without it. In connection
advanced
train
state
time
to
If
time
have
more 1 revenue
improve¬
the
every
creases
or¬
in
men
raised
for
time
developed.
have
which
bor organizations and upward
wage
adjustments in the industrial field.
bandon
additional
were
and
engineer.
to
than
more
der to preserve the force that was
there
except
nothing
compensated
unnecessary
tion facilitated and accelerated la¬
be attracted by
can
ade¬
are
movement
proper
does
improved service and better pro¬
motion, but that too is only a
Travel
than
men
the
work
machine
and
wages
of
the
as
well in advance of the wages
were
and
Act
In these instances the
more
quate
and
The Labor Problem
-
was
which
one
viewed
placency in
indicative of
are
subject is
be
reser¬
situation.
grave
The
not
some
employees went
way
de¬
the
tinued increase in all the costs of
must
rail-!
annual compensation of
age
for
reason
During the
had
be
war
onlv
new
to
a
trucks could
limited
extent,
other petroleum
rationed, and there
shortages of labor, with the
were
substan¬
expen¬
result
that
ditures is that such inland water¬
tial
shrinkage in the volume of
advanced
ways
war.
are
This
exploded
necessary
notion
in
was
World
in time of
completely
War
II.
The
percentage of intercity traffic in¬
cluding
government
traffic
handled
canals
on
went
interior
down
rivers
from
and
3.7%
in
1940
constantly every year until
1943, which was at the height of
the war, when it was only 2.6%
of the nation's
commerce.
In 1944
traffic
had
thpre
trucked
to
take
was
and
over
a
the
the
centage
proportion
railroads
traffic
trucks could not handle.
of
the
The per¬
intercity
traffic for the trucks, as measured
in
ton
miles,
went
down
8.4% in 19^0 to 4.6% in 1944.
railroad
other
in
The
intercitv tonnage, on the
hand,
1940
from
to
a
went up from 62.3%
maximum of 72.7%
(Continued on page 28)
COMMERCIAL
THE
(763)
28
FINANCIAL
&
CHRONICLE
Thursday, August 25, 1949
unprofitable
in
and in
1943,
In
19*8,
wnen
1944 it
was
70%.
trucks
new
all
and
were
restrictions
war
abandoned will be at
supplies, there¬
increasing their costs of op¬
This is common
with
eration. ■/,
removed, when other users of similar materials
there were snoitages of railroad and supplies.
This decision is de¬
cars, and
all the rate increases cidedly unfair to all consumers in
trucks
on
were
rails except tne
Jan.
11
and
it
that
virtual monopoly
producing point
those authorized Aug. 11, 1949, the with the cheapest transportation
In the second place,; this
intercity truck proportion of the cost.
tonnage came up to 9% of tne decision has caused the railroads
some losses in traffic due to
the
total, or approximately the same
relative position as in 1940.
The fact that the nearest producing or
proportion for the railroads, on manufacturing point needs less
the otner hand, was 64.3% in 1948
transportation
and
has a
mo¬
compared with 62.3% in 1940.
nopoly under the FOB mill basis,
While the monthly reports made and the mills at a freight disad¬
by the American Trucking Asso¬ vantage cannot compete by ab¬
eifective
were
increases
ciations
do
all
include
not
traffic
city
on
effective
handled
by
inter¬
trucks,
gives
a
mill
sorbing the difference with result
that
the
producer or manufac¬
a, disadvantage usually
sufficient to measure the turer at
figures through loses the sale and the rails lose
April, and they show that the the traffic or are short-hauled,
trucks handled 11,768,498 tons in
thereby reducing their revenues.
the first four months of 1949 as Due
to
the
shortage of many
compared with 11,772,437 tons in goods, particularly steel, and the
the corresponding four months of desire to
get the goods quickly,
1948.
This slight decrease indi¬ the
losses, while important, have
cates that truck traffic is leveling not
as yet been of serious con¬
off, and I see no reason to believe sequence to the railroads as they
that it will increase greatly.
might otherwise have been. How¬
The reports to
the Interstate ever, with the catching up with
Commerce Commission covering
production and the urge to econ¬
common
carrier and contract omize
by effecting all savings
trucks show that the average
possible, unless something is done
charge per ton paid by the ship¬
promptly there may be serious
ping public was $10.05 in 1948. damage generally to the public
The corresponding figure for the
and diversions from the railroads.
railroads was $2.79 per ton. It will
There is pending in Congress a
be seen that
notwithstanding the bill known as the
O'Mahoney Bill
subsidies to the trucks in the way
which was designed to clarify the
of
providing
and
maintaining law
to the extent of making it
highways, the railroads are doing
clear that shippers may sell de¬
a cheaper all-around
job of trans¬
livered or absorb freight differ¬
portation.
r,
ences
to
equalize
competitors'
The trucks have not come for¬
prices.
This would certainly be
ward with a complete
transpor¬ in
the interest of all business in¬
tation service for the
public, and
cluding the railroads.
It would
their charges are higher.
In view
not in any way weaken the anti¬
of this, I cannot see now that
they trust
laws; it would simply make
can supplant the
they
are
I have the
trend.
-
railroads. How¬
volume of traffic is impor¬
tant to the successful operation
of the railrods, and any diversion
ever,
%of
traffic
roads
is harmful
and
to
those
to
the rail¬
who
look
to
them for transportation. How
long
-the railroads can continue to com¬
pete
under
with
private
management
trucks
that are
- subsidized
take the most profitable
and that
traffic, leaving the less profitable
for the
railroads, I cannot say. It
is hoped, however, that the un¬
fairness to the railroads will
be
soon
recognized by the law-makers
and
corrected
cheaper,
in
complete,
transportation
vate
order
served.
;".
■
the
all-around
system
management
that
under
be
may
-v
pri¬
pre¬
:yyyy
it
clear that
sell
antitrust laws. A free
competitive
railroads
tuted
tice
is the
cases
repressive
measures
against other
forms of transportation.
ask and want is
equal
of
all
j forms
Railroads are
the
is
other
used
of
advocate
All they
treatment
transportation.
self-supporting. On
hand, the public
purse
to
provide almost all the
fixed investment required to
carry
most other forms of
transpor¬
tation
the improved
would
thus
series of repara¬
which have been insti¬
the theory
that the gov¬
ernment was greatly overcharged
by the railroads for the transpor¬
on
tation
materials.
war
An
ad¬
decision in these suits would
verse
be
of
disastrous to
believe
we
the
have the
railroads.
I
ability to de¬
burselyest but1 itills' deplor¬
,
ports,
the
airways
the roads
and
and
air-
streets—and
to
provide
many
services
for
.them. And these things are done
without,
an
in
most
cases,
making
adequate charge for the
use
of
such
facilities in carrying on the
.business
of
commercial
trans¬
portation. ; The result is that the
rates
for
do
charged
their
not
by
these
service
reflect
need
the
full
carriers
not
cost
and
of
providing
the service. This dis¬
crimination should and must be
removed.
competition
confronting
railroads nowadays is not all
from
other
forms
of
transportation.
Part of it comes from
government
.P^licm* that affect the
railroads.
The basing point
pricing system
decision
a-
of the
examole.
affp^ted
two
Supreme Court is
The
ways
railroads
are
by the results
of this decision. In the
first
the use of FOB mill
place,
eliminated, it mignt
well be that the rate of abandon¬
ment will not be so
been,
.;■«;rjjr-
great
it has
as
•
The railroads now own
1,771,000
and the private own¬
ership is 270,000, making a total
,
freight
of
cars
2,041,000 freight
for
in
use
of the
been
used
flect
the
handling the commerce
The average turn¬
admixture
formances
and
for
accounts
much
ex¬
have :;to:^ be usbd for this
Talent and money that
we
are
required to dissipate in
protecting us from these assaults
could with
fit
the
to
much greater bene¬
so
public
further
ward
be
directed
progress
to¬
in rail
time
around
contrasts
fact which the
a
ket
an
of
freight
a
car
average
freight
a
loaded
two
trips
road
question,
mileage
of
all
roads
bad
lines:
254
thousand
of
The present mileage is 225
In
other
words, an
thousand.
of
average
miles
ed.
a
nearly
one
thousand
have been abandon¬
year
Railroad
mileage which the
public will not support should of
course
be abandoned in the inter¬
est of the
public as well as in the
interest of the railroads, because
in the end the
public must pay for
unprofitable
The
railroads
are
month
Our
or
will
take
loads per year.
ing attained
in
was
loaded
recent
any
when
year
there
were
the American railroads
on
There is nothing
cars.
near
foresee in any year in
future to cause me to feel
that the
loading will exceed that
the
of
can
1947.
°A
shortage of freight
cars
does not now exist; indeed
there is now a substantial surplus
of
avoid
To
surpluses
ages it is necessary that
of the character or kind
the
By JOHN T. CHIPPENDALE, JK.
the Treasury of the fall and year-end refunding operation/ very much
in stride, with only minor price changes being registered through¬
the list.
The long eligibles displayed some firmness on not
activity.
The l!/8% certificate for the September 2s was
expected, and although no rate has been set for the October matur¬
ity, it is believed a iy8% coupon will also be used in taking care
out
mensions be where there is
As for the December maturities, it
predictions because there is a longer time
observe economic developments, which will determine
maturity of the note which will be used to refund
coupon obligations.
•
'
low
cars
a
de¬
view
the
commerce
the
-of
whole to avoid
a
Association
American
of
Rail¬
Whether shortages of cars
disappeared temporarily or
have
permanently
conditions:
sufficient
depends on several
1) Will the public
the
enable
to
There
cars
do
so.
has
.
to
back
hold
However,
.
was
FINANCING
in
result
purchases
easy
the
of
a
...
,
f
larger
,
continued
and
money
FAVORED
element of surprise-in the
an
September financing
.
.
tainty
was created. .. . There is however, only a short period of time
before the coupon will have to be set for the October operation and
the action of the short-term market will determine what the rate
will be.,
'
,
pay
Long-term high coupon obligations
financing program of the monetary
the
continued
which
it is hoped the
outlets
for the pur¬
of short-term
use
funds.
other,
than
definitely
authorities.
.
,
is still the
.
in
way
banks will be forced to seek
commercial
government
of •,
The f;
out
are
low yields,
with
obligations,
for
ys
y,
surplus
their
j
To be sure, the cost of carrying the debt will be sub¬
...
HOW LOW CAN THE RATE GO?
prompt loading, unloading
lease of the cars supplied?
ber
an
stantially
financing.
among
volume of busines
some¬
or
thing to do with the improved car
supply, the principal causes have
of
been
has had
the improved
and more ex¬
peditions
handling
roads; the
new cars
the
a
war,
new
the rail¬
received since
by
car
has
much
capacities
of
cars
sup¬
plied and in prompt loading and
unloading of the cars.
I think
the railroads will do their part if
accorded the necessary funds to
ther offering
through
near-term
of
obliga-
>
The market action will set the rate for the October and Decem¬
re¬
While
reduced
tions.
the lessening of demand for cars
due to general reduction in the
.
Nonetheless, there is considerable disagreement
...
market followers
as to whether there is likely to be
much lower rates, for government obligations.
"Very easy
extremely easy" credit is held by some to be less likely because
money
very
.
the
favorable trend
more
in
.
conditions.
economic
.
.
.
is be¬
It
.
lieved that
yields of Treasury obligations will tend to stabilize around
present levels.
A lVs% certificate rate is the lowest expected by,
.
this
group.
On
.
.
the
conditions
.
.
.
other
will
bring
about
1%
these
hand,
lower
certificate
easy"
even
in
business
contend
who
the
this will
for all government securities.
lower would not be unexpected by
on
is
.
long-term
for
by
Treasury
.
.
easy
or
they
and
group,
bonds,
will sell at much higher levels.
"Very
.
.
.
this
;
.
[
believe the deficit /;
because they
possible.
as
looked
j
and
year,
will be enlarged and the increased debt will be
cheaply
as
credit
.opinion
yields
or
those
are
later
market followers,
money
financed
there
deteriorate
the
especially
J
extremely •;
of the j
are
issues
bank
j
J
.
provide the
equipment and ser¬
I am equally confident that
shippers will cooperate.
In
conclusion,
a
problems
The
the
of
;
final point de¬
mention.
serves
MARKET ACTIVITY
Considerable
financial
switching and swopping has been going on, with
1956/59 being let out by some non-bank investors, and
railoads
have
the proceeds
again going into the 1952 eligible taps. . . . Also the 2s
1952/54 have been sold by both the deposit banks and non-bank
due
the
industry
tistics
basis.
ever,
have
been
cited
this
on
Accurately speaking, how¬
there is no such thing, from
the standpoint of
ment
whole, and sta¬
as a
finances, invest¬
and
credit, as "the railroad
industry." Supplies of capital have
to be obtained
panies,
own
each
by individual
on
the
finances and
basis
com¬
of
its
situations
credit, and in¬
vary
widely.
enjoyed
latter
relatively high degree
the
Savings
on
the sell side
and
small
tions.
.
The
rates
.
matter of
fact, the railroad
be
the
on
side
buy
with
pur-
.
.
.
the
j
with some of the eligibles
t
these institu-
j
let out by
being
taps
,
Life insurance companies, are
(in not large volume)
of
j
j
will
curve
no
doubt
have
influence
an
on
the future
Treasury obligations and in some instances there are in¬
dications of a seasonal upturn in borrowings.
The Kansas City
district has been on the upside five weeks in a row, with other areas,
showing an irregular advance.
Philadelphia and New York City
have also been on the favorable side.
Although the increase in
.
.
.
been
.
.
.
.
loans has not
.
.
sizable yet,
too
there could be a more vigorous
trend, according to some, because of needs to rebuild inventories. . ...
commercial
a
the
'•
loan
handicapped, failed to share pro¬
portionately in wartime improve¬
As
to
and
yc,
for
are
earnings.
continue
amounts
from
in
y
.....
'
.
On the other end of the scale, cer¬
tain •' other
railroads,
ment
banks
in shorts,
reinvesting the funds
amounts than the other issues.
prosperity and credit all
through the worst of the thirties.
variously
former
largely in the Vic's.
chases pretty well spread over the entire restricted list, although
it is reported the 2V2s due 1967/62 were taken in slightly larger
of
a
with
owners
been considered herein in terms of
can
How much railroad mileage
may oe abandoned in the future
.
which they were intend¬
ed, namely, transportation and not
for storage? 3) Will the shippers
continue to cooperate in the
are
should and will continue.
tended
.
railroads
Certain railroads, for example, by
Such
ordinarily
announcement, when the Treasury stated an intermediate term note
would be used in the December operation.
Also, by leaving the
rate open for the October certificates* a minor amount of uncer¬
replenish their supply of cars
as
needed and keep those they
have in repair? 2) Will the public
use
would
which
.
obligations.
SHORT-TERMED
to
continue to
buyers
car
shortages. This need is supplied
by the Car Service Division of the
,
offerings of shorts, will eventually push up prices of the longs..,**'
roads do
country as
.
.
the individual rail¬
an excellent job on their
rails, but it is also necessary
higher
>
greater demand for the longer-term issues especially among the
bank obligations.
High prices and a cautious attitude among
coupon
on
these
increase in the amount of short-term
an
obligations,
coupon
is too early
in which to
the rate and
.
.
Again there will be
bank
roads.
...
make
to
mand for them when needed. Car
to i
..
.
of this issue,
distributors
own
...
too much
and di¬
constantly
or
to
^
The government market took the combination announcement by
/
short¬
and
dividual
studies
made
phys¬
;
Reporter on\Governments
.
cars.
operation.
be
progress.,;
'
are
being operated profitably
ical
that
car
The highest load¬
in
1947
44 million
that I
million
49
of
care
rail
needed and
is
makes
car
per
studying their lines, particularly reason of exceptionally favorable
their branches, to determine
conditions of one kind or another,
whether they
record of both financial and
is
erly utilized, the existing supply
rail¬
miles
earnings, the railroads can
continue their
beyond
One
however.
the 2V4S due
this country reached its
maximum in 1916 when the rail¬
better
be counted upon to
Two statements are true
trips per year.
On
this basis, if freight cars are prop¬
Conclusion
in
mar¬
fully recognizes and takes in¬
twenty-four
Railroad Abandonments
The
can
.be. enjoyed
vigorous, progressive
railroads; which means railroads
with adequate earnings and good
credit. ? With growing apprecia¬
tion by regulatory autnorities and
the public of the railway case for
with
only
to account.
'
that-
transportation
fact
which
investment
by
The other is
whole.
a
fifteen days, which means that on
the
roads
This
as
that sound economic conditions in
per¬
country
vice.
transportation.
dustry
might be noted in setting figures
for a particular railroad against
the industry averages, and it is
of the Treasury
so
re¬
the
groups.
carrying
and
of
individ¬
much to tne betterment of the in¬
experiences of all
various
these
available
cars
nancial .situation of any
ual railroad ^contributes
in becween.
discussion
this
in
purpose.
talent
depends on whether such mileage
prices has is needed and will be
supported
caused the railroads to
pay more by the public.
While I think all
been
now
years.
whatever helps to improve the fi¬
a
strong ; ana
industry figures which have
pense
much of the time of
any
The
and
essary
has
thirty
much unnec¬
unprofitable mileage
as
The
A
best
waterway
.channels,
last
groups,
greater utility than an old one;
the cooperation of shippers in the
proper use and full utilization of
so
„on
—
the
over
rapiu
of
:
weak and all the way
pose for
by the Department of Jus¬
our
not
lawful
Government Reparation Suits
Another serious threat to the
The
do
market
and
be preserved for all.
able that
railroads
freight
equalize with competitors so
long as he does not violate the
Railroads Ask Fair Treatment
'
absorb
or
to
fend
;
manufacturer may
a
delivered
tions
been
a more
future than it has
near
On the contrary,
or
the
to
in the
rate
for materials and
by
number
rail mileage should
abandoned, I have no reason
anticipate that.' the mileage
to
(Continued from page 27)
available
industry could be classified into
be
The Outlook for Railroads
Demand
for
the
corporations
ported
being
among
demand
released
put
"D"
tax
notes
although
state
into
security.
this
is
still
in
funds
.
.
.
substantial,
some
cases
World
Bank
the favored issues with the longs, apparently
now
than the
banks
reserves
are
nearer-term
currently
obligations.
putting
in short Treasuries.
they would be mainly
some
...
mainly
are
re-
,
;
bonds :;
in
;,
Out-of-town
;
of their recently
.
.
.
.
more
It had been expected
buyers of the longs.
j
170
Volume
THE
Number 4832
'
COMMERCIAL
FINANCIAL
&
CHRONICLE
(769)
29
strong
financial rresources, 'and be confronted with this
dangerous
with resorvoirs of trained techni¬ problem.:.
',
cians upon whom to call.
It is not a matter that can
There
.
be
for
(Continued from page 6)
violations
willful
business
the
on
the
of
law
hand,
one
by
or pros¬
me
to point out to you the
descrepancy between the symbol
the actual individual, who is
and
most
likely to be slender, alert,
quietly dressed, and very much
the other. Most
aware of the
sociological respon¬
of them come about through mis¬
sibilities involved in his job.
understanding or changed inter¬
Let's look at another conven¬
pretation.
V•' 1 •;f*,'f"W:-'
I should like, however, to make tional figure, the cartoon charac¬
ter who stands for organized la¬
one comment about this point.
I
He is a meek looking man
believe it is true that industrial bor.
ethics
and morality
move
to a in overalls and wearing a square
higher plane as time goes by. In¬ paper cap. Well, again it may be
dustrial practices which were the that 50 years ago this fellow rep¬
accepted thing at the beginning of resented labor. But today? Sup¬
the century would
seem
like a pose you found yourself in a hotel
ecution for political advantage by
the government on
are
operations which : are only settled by the operation of lobbies
There economical when performed by a in Washington or state capitols,
are
1,200 producers in this field, "arge company. Just as an exam¬ for the attitudes of government,
and one of them,
Sherwiri-Wil- ple, I might point out that if a at its various levels, are reac¬
liams, is larger in this field than modern day automobile were put tions to popular thinking. Only
is du Pont.
Du Pont makes vis¬ together on an individual basis, rarely do they create opinion. This
few examples:
tures
Du Pont manufac¬
paints and lacquers.
rather than by mass production,
viscose the completed vehicle would cost
field and Celanese in the acetate about
$50,000, instead of some¬
field. Du Pont makes photographic thing less than 5% of that amount.
leave it to you to imagine how
films.- But Eastman makes more.
cose
and acetate rayon.
is
Viscose
And
line.
as
larger
in
American
the
it goes, right on down the
There are some fields, such
so
nylon,
where
du
Pont
is
the
many
of you would
automo¬
own
biles at any such price.
On
the
other
hand,
there
are
not
be
operations
that
economical
on
was
scale of production. These opera¬
tions
are
performed
by
small
Civil
hotel—to
argue
that du Pont has a real
monopoly. The fact is that nylon
must compete with wool, cotton,
manufacturers.*
to your attention that
taking place. The delegates
would be well-dressed, upstanding
men.
They probably drove to the
has patent protection for 17 years.
Even here it would be wrong to
savagery to the
industrial leader today.
alone
true not
War
it
toughest
This is
in industry
I call
during the
possible for a
was
to hire for $300 another man
man
to substitute for him when he
was
drafted
was
into
the
This
army.
accepted practice and a man with
$300 to spend for this purpose
not
seems
incurred
have
to
any
shame for paying someone else to
to war in
go
his place. You can
what would have hap¬
imagine
pened to
in
that
a
who tried to do
II—or World
man
World
War
War I, for that matter.
Business
on
-
«
,
Higher Plane
a
The point I am making is
that-
business today - exists on a much
higher plane than it did a quarter
of a century ago. I grant that there
is
still
the
going percentage of
knaves, as in other
fields. £ Despite them, the whole
fools
and
in
which
in
CIO
state
a
best
own
their
the
cars,
convention
in
one
town—
and not all of
them
Fords, Plymouths, or Chevrolets, either. Their wives would
be beautifully dressed and good
looking.
In fact, if you couldn't
what
about,
you
Theodore
they were
talking
might easily have mis¬
Roosevelt
H. Taft served
as
and
William
Presidents of the
United States.
lifted, and continues to be lifted.
service could be done for business
I have
and
shall look back
marvel
think
did
doubt that 10 years
no
we
that
as
that
business
the
of
some
matter of
a
from
1.94S
on
coulc
things it
common
prac¬
tice could possibly be justified
It is a healthy thing, this fact
than by
of
dealing
have
with
been
fellowmen
our
raised.
I
Certainly,
no
greater
convincing the public that
its ideas about business
are
obso¬
lete, and, even more important,
by substituting today's actuality
for yesterday's recollection.
In
a
•
that every year enables us to look
back and see that our standards
I
that
sure
you
are
like Gen¬
silk, \ rayon, and other synthetic eral Motors buys parts for its au¬
fibers. It has done very well in¬ tomobiles from literally thousands
deed, for the reason that it has of small producers. In the chemi¬
proved very useful in many fields, cal field, the du Pont Company
and can be produced at a price would find it extremely difficult
aware
a
company
that makes it attractive to the ul¬
to exist at
thousands
seem
In
a
sense, I suppose, this may
rather lengthy digression.
reality it is not, for it is woven
the warp and woof of our
into
structure
economic
that
business
hope
There
are
no
h§s made a place for itself against
every other type of wrapping ma¬
terial in the open market. It has
had to compete with paper, glassine, metal foils,
and plastics
Here again, the appearance on the
market of a new wrapping mate¬
rial, better than cellophane or just
as
good and costing less, coulc
change the situation rapidly. Short
of being able to reduce costs or
improve quality, or both, to the
point where
cellophane woulc
again be competitive with the
new
material, nothing du Pont
This
dead, and it is our belief that in
coming years it will become even
more intense, rather than less so.
Nor do I think that our situation
that
the
have
a
We
traced
one
such
must
to
tions
are
This
cone,
to
appear for sale for $8.95 in a
shope in the same town in which
yarn
days,
five
made.
was
different
10
states
had
In those 47
businesses
combined
in
their
creative, productive, and sales ef
fort, to produce the garment. Two
of the
firms,
one of them du Pont
large.
The
other
eight,
ranging in number of employees
from one to
220, were typica
were
■j At the same time, this situation
its
disadvantages
far
as
want
to
in trouble with the
they want not to.
one is that public awareness of But alas for their
good intentions,
what
business is doing seldom somebody else will decide.
catches
up
with
contemporary
In any event, it seems to me
•events. I believe that if you will
that we now have a new element
business
is
look
at
ness
and
a
current
little,
so
The
concerned.
attacks
main
busi¬
on
industry, and study them
will be struck by the
you
fact that in most
cases
the things
complained
of
happened
some
and again in most cases
they not only have become ex¬
ceptions in
American
business
practice but are condemned just
years ago,
much
as
by
businessmen
by
as
•anybody else.
Let's
think
for
just
moment
a
about the conventional cartoon of
•a
president of
du
Pont.
I
an
am
how he would
be
fat.
His
marked
organization like
sure
you
appear.
face
can
would
resemblance
to
that of
pig, with selfish little eyes,
gressive wedge of a nose,
mouth
-of
a
bear
a
a
an ag¬
and
a
that could double for that
steam
shovel.
He would
in¬
evitably be wearing a silk hat, a
cutaway coat, and a white vest
with dollar signs written all over
it.
This fellow is the conventional
figure
to
ject to punishment, he must first
its top
represent
levels, and I
agement in terms of this horrible
monstrosity.
there
was
portant
Now, it
may
time when
a
generally been thought that
sky was the limit as long as
did
not
way
industrialist
might
have
gested
by
these
to
As I have suggested,
of
affairs
lies
labored
so
shortsightedness and
the
artists
hard to put into
have
small
and
business
broad
du
Pont.
It
and
small
;
j
business
are
other
du
any
difficulty in finding competitors.
It is an interesting and significant
their fact that in
Manufacturers
has
pointed out that calculations made
by
the Department of Commerce
a net addition of more than
show
seems
to
new
business
were
that these
me
exam¬
especially
since
true
I
am
...
of the fields in
that most of you could tell similar
one
point of vantage
the
being elimi¬
objectives
we
But
we
must also be concerned with what
must do to
we
dustry
promote the public
When
interest.
have
business
and
these
done
in¬
things,
then
they must do everything in
power
to make sure that
those with whom they are asso¬
their
understand that this is the
ciated
case,
increasing
an
American
in
awareness
and
-7
•
believe there is
I
business
industry of the importance of
this phase
lieve that
of
operations. I be¬
our
and
more
is
more
be¬
ing done in the way of selling our
economic system. But not enough
is
being done, and the time at our
disposal is not unlimited., If we
can promote pooular realization of
the fact that all of us, the public,
big
business,
little
and
not
to
mention labor and the farmer, are
on the same street car, all
heading for a common ob¬
riding
of
us
jective, then J can assure you that
there
is 'some
mighty -pretty
country ahead of us.
•
on
Big Business
Reasonable?
Now if I
am
thing,
right, and this is a
why is it that
then
the operations of
under
attack?
big business are
Mainly. I believe,
it
is because the public does not
understand how our economic sys¬
to
tion
me
of
that what is need¬
ed here is a
Sugar
Companies—
special sec¬
details pertaining to
the new domestic contract, trading
in which started on the New York
giving
Coffee
and
18—manual
Sugar Exchange July
sent postpaid on re¬
ceipt of price of $2—Farr & Co.,
120 Wall Street, New York 5, N. Y.
-
Are Attacks
good
Manual
26th edition—contains
Retail Credit Management—The-
official
selling job on the part
of both big and little business,
say both, because both have much
appearance"
of
small
business to
gain by a successful selling ef¬
rests upon an erroneous base. This
fort, and everything .to lose by
idea that big and small business
one
that
is
unsuccessful,,
Our
are rivals just will not hold water.
American way of life is a good !
The truth is that there exists be¬
product to sell, but we are not
tween big and small business a
fundamental partnership aimed at selling it. I am certain that if the
furthering
offend the public interest.
sure
of the American people had a clear com¬
drawings.
which the du Pont Company has American economy. It is obvious,
prehension of how our economy
But
I suppose that most of a position of importance, it is con¬ I think, that there are. jobs to be
works, and knew how they benefit
you here know presidents of com- fronted with the most rugged sort done that can only be tackled by
panies, and it is hardly necessary of competition. Let me give you a large companies, bulwarked by from its operation, we should not
most
do lest
not
that
ples make my point, and it would
be idle to labor it further. This is
seems
small
the law tells
you see,
must
we
success
me
firms in approximate¬
ly the same period. Figures cal¬ tem works. The public does not
culated
by the
Department of realize that this
partnership ex¬
Commerce show that in the fields
ists, nor what would happen were
of
mining
and
manufacturing either small or
large business
there were 235,600 firms in these
liquidated, or subjected to controls
two major fields in 1939, while in
so
rigorous ; that they seriously
December, 1948, there were 351,- limited freedom of
decision.
400 such firms, an increase of 49%.
To put it in salesmen's terms,
This does not look as though
it
100,000
Mostly,
to
than
more
means
companies
Anyway, it seems to me
that the whole thesis of the "dis¬
the first point, it has not
our
experience in the
Company that there is
of
nated.
Competitors
As to
It seems to
are
It cited this figure as stories from
evidence
of
the
weakening of or anbther.
competition and the "disappear¬
ciation
it
it is the way
behind this Department of the National Asso¬
the
opera¬
interest.
system
isn't ance" of small business.
On the other hand, the Research
No Difficulty in Finding
Pont
that
It
opposed to each other.
been
selfishness
you
question as to whether bigness in
industry is a good or bad thing.
Perhaps for purposes of more ex¬
act definition, we should say that
the question is whether big busi¬
ness
as
it exists today is a bad
thing. Those who argue, that it is,
hold that it is concentrating indus¬
try in a few hands, with the con¬
sequent elimination of competi¬
tion.
They also argue that big
business is swallowing up small
business, and that the aims of big
and
lessness and
that lofty estate.
state
when most of them had the ruth-
cartoons,
business
public
operating legally,
but
what
their
this is the way that our economic
the mergers.
violate any laws on your
that way anymore.
im¬
had the physical appearance sug¬
of
wrong.
be that
some
any
We do not, for exam¬ opposed to each other, the Federal
Trade
Commission
has
asserted
ple, try a man for murder where
the death he caused was clearly that from 1940 through 1947 2,400
accidental. And in business, it has companies "disappeared" through
do
management
am afraid
that the average American tends
much too easily to think of man¬
business
-on
very much from that
other large company.
differs
of
nine
like interest in the
ought to operate, just as
in which it does, in
fact, operate. It is a partnership
in the situation. I am sure that it
Big Business and Small Business based
on
the
intelligent selfhas been the average man's un¬
Not Opposed to Each Other
interest of the various organiza¬
derstanding of our legal system
tions involved.
As to the second point, that big
that in order to make himself sub¬
see
He would
get
government;
the
continuing
a
sure
,
that must have
popular understanding could do could maintain the pres
small businesses.
there will never be an end to this
and support if it is to survive.
ent situation. The obvious reason
process, which goes on by such
The story wouldn't be much dif¬
is that it is not du Pont, but the ferent if it were
imperceptible degrees that it is
Laws Violated Inadvertently
nylon, or some
hard to put your finger on any
consumer,
who decides whether other du Pont product. You can
You will recall that I said that
cellophane or nylon shall succeed see, I am sure,, that du Pont has
spot and say "here was the great men
got into trouble with the
or fail.
a very real interest in the success
-change."
anti-trust laws in most cases in¬
No, competition is far from of those nine other companies, and
advertently. Not only do they not
has
in
means
that.
on
make
sure,
us
that
is,
themselves
with
and
care
basis
be
"industry
and
inspect
great
and found that it took 47 days for
a
dress made of that very yarn
the
of life,
selling job has two aspects.
Business
winding machine to the finished
dress.
fears
no
way
The first is to make very sure that
the product is up to specifications.
of
consumer.
our
f they cannot, I am afraid we are
going to be in serious difficulties.
ay.
timate
successfully, then I have
imposing
an
To get back to the
am
lave
were it not for the
companies, most of
other reasons for its success, and them very definitely in the cate¬
taken it for a meeting of the
I assure you that should there be gory
of
small
business,
from
Chamber of Commerce.
developed some other fiber that which it buys its raw, materials
What I am trying to say is that
does a better job, or that does as and other supplies. It would be in
one of the greatest handicaps bus¬
good a job at less cost, then it will a bad way were it not for the
iness has is that the public's ideas
of
small
pass nylon, as it should under our thousands
companies
of what it does and how it does it
economic system.
which buy its products and turn
are
hopelessly out-of-date. This
\
Or take the case of moisture- them into finished articles.
might not be so serious except for
Let me give you a concrete ex¬
the obvious fact that the public proof cellophane, which is pro¬
Du Pont makes viscose
doesn't realize that the ideas are duced by du Pont and American ample:
Viscose.
Cellophane is successfu" rayon yarn. It is possible, to trace
out-of-date.
They think business
still runs the way it did when as a wrapping material because it a cone of rayon yarn from the
hear
level of industrial ethics has been
today
automobile,
would
such
and
for the future of
sole producer because it invented
and developed the substance, and
dismal
as I see it, that business
industry, small and large,^
the inescapable duty of sell¬
ing the American people on what
they are doing. If they can do this
means,
textbook
Credit
Retail
National
the
of
Association
Dr.
—
Clyde William Phelps—McGrawHill
Book
Company, 330 West
42nd Street, New
cloth—$5.00
York 18. N. Y.—
>
j Security
—completely
North
of
Dealer-*
Editioa
1949
America—Mid-Year
edition
revised
of
directory of stock and hond houses
in the United States and Canada—
Herbert D. Seibert &
Park
Co., Inc., 25
Place, New York 7, N. Y.—
fabrikoid—$10.00
>
7
...
Trade
Union
Library,
i
,
i
,
A—1949
—Industrial Relations Section, De¬
partment of Economics and Social
Institutions. Princeton University,
Princeton, N. J.—paper—75c
,
With Garrett-
Bromfield & Co.
(Special to The Financial Chronicle)
DENVER, COLO.
Pringle
is
now
Bromfield & Co.,
Street.
—
with
Robert J.
Garrett-
650 Seventeenth
j
THE
(770)
30
be nice to know
It would
I know the classic in¬
means.
terpretation, so do thousands
Whyte
miss the
market.
I'm merely pointing
out that long accepted signals
frequently lose their meaning
firmation,
Says—
By WALTER WHYTEi
Sharply increased short posi¬
tion gives bulls new hopes.
one
can
for both the bull and the bear.
A
postcard from a reader
who signs himself "Bozo" in¬
tempting, to step up
order clerk's window and buy terests me. Ordinarily I don't
bother with such correspond¬
some stocks; or phone the bro
ker to buy you 100 shares of ence, But inasmuch as "Bozo"
of
his
XYZ. Everything seems to be boasts
yield—"over
in favor of higher prices. Busi¬ 11% on my money . .
—I'd
like to repeat what I've said
ness reports show an upturn
and
easy,
very
FINANCIAL
CHRONICLE
Thursday, August 25, 1949
We
(Continued from page 9)
also
must
Agriculture
realize
that
any
which would program of price support or price
of others. I also know that if protect him from, first, the ex¬ aid cannot apply equally to an
one waits
for the final con¬ ceptional hazards of the weather efficient, businesslike farmer who
Markets
It's
&
The Outlook for
what this lack of confirmation
Tomorrow's
IT alter
COMMERCIAL
quite
to the
<
earnings estimates are becom¬
ing brighter and last but not
least, the Administration and
here
often before: I'm not
so
interested in
yields.
type of support
some
—over
is
which he has no control—
doing
real
a
foodstuffs
and
;
job
to
producing
another
one
and, second, from that dismaying
whose slipshod methods and lack
spectacle which the farmer has so
of
efficient
planning make his
often seen where the combination
costs too great to show a profit at
of good luck, good weather and
any time except while a war is in
hard work has produced a crop
progress.
I would say, therefore,
which is so abundant that it is
that
perhaps
the
part-;: that
a
worthless on the market, and his
farmer
good fortune has ruined him.
seerns
quite probable that
very
It
can
do for himself is about
important
as
as
any
part
of
a
to meet his problems.
program
safeguards could be devised under
We have been greatly encour¬
the
of support prices
program
which would eliminate such haz¬ aged here in the State of New
York
by the fact that a great
ards and help adjust overproduc¬
tion.
The
fallacy of regulated many of our farmers have now
price support has been and is be¬
had
the
benefit of
college
or
a
farm-school
education.
This
is
a
ing illustrated by our govenrment
potato programs. These programs tremendous change from the old
resulted from the need for pro¬ days when book-learning was so
duction during the wartime. ; The despised by many of our farm
people.
Farmers have come to
support prices were worked out
so
that
their
our
farmers could readjust
realize
which
that
a
the
man
greatest
can
benefit
receive from
an
planning back to a
I recommend certain stocks peacetime level.
Yet we have agricultural education is the abil¬
seen
no readjustment.
We have ity to sense the changes in agri¬
because I
think
they'll go
culture as they take place and the
VV
seen counties in the United States
higher. When I think their where
almost no potatoes were ability to adapt his farm-program
Everything, therefore, seems advance potentials have tem¬
to meet these changes.
This is
grown increase their production
made to order.
All you have
the
definition
given
by
Dean
porarily been used up, I ad¬ so that many thousands of acres
Myers of Cornell as the real aim
to do is buy them and sit back vise
selling. An 11% yield at are now under cultivation, the of a
college education in agricul¬
waiting for what seems to be this stage of the inflated dol¬ potatoes from which must depend ture. *
'
(;
on government support to return
the inevitable rise. To add fuel lar is
nothing to boast of. In a profit. The great bulk of these
In this matter of keeping down
to the bullish feeling is the itself it
may well be a danger potatoes, as in many of our major farm costs, and of adult education
on
the farm, I cannot neglect to
improved technical position of signal.
potato-producing areas, are not
the market.
tribute to our Granges, to
grown by farmers as we ordinarily pay
More next Thursday.
#
SH
*
our
Farm
Bureaus and
to our
think of them.
They are grown
—Walter Whyte.
work with our young people for
by men in other lines- of business
Ever since there's been a
who are speculating in producing the wonderful results they have
[The views expressed in this
market, the starting impetus
There is no ques¬
a
potato crop.
This could un¬ accomplished.
irticle do not necessarily at any
tion today but that the areas of
for an advance came from a
doubtedly be corrected by reduc¬
ime coincide with those of the
our
state where farm organiza¬
heavy short position. Accord¬ Chronicle. They are presented as ing the support price to a point
tions are not active are the same
where the production of potatoes
ing to NYSE figures, the short hose of the author only.]
areas
where
our
agriculture is
would not be attractive as a spec¬
weakest.
Our farm people often
position is now the heaviest
ulation but would yield enough
do not realize that the contribu¬
it has been since September,
return to make the production of
With Bache & Co.
tions
of
time
and
effort
and
potatoes a profitable farm enter¬
1932, amounting to about 2,(Special to The Financial Chronicle)
money which they have made in
prise.
000,000 shares.
CHICAGO, ILL. —Emil Prescarrying on their part of these
*
*
*
Another problem which should
burg
has
joined
the staff of
organizations have been one of
Bache & Co., 135 South La Salle be considered is the handling of
the reasons why our agriculture
Theoretically, such a heavy Street.
our present surplus of grain and
in
\ "
America 'j has
reached its
short position in a market as
other crops. We do know that any
present state of efficiency. *
thin as this one, has explosive
agricultural area which can main¬
tain
animal
With First Boston Corp.
husbandry• usually
Agriculture in Transition
potentials. Once it starts cov¬
can
maintain its prosperity and
(Special to The Financial Chronicle)
/,
Period
ering it can start a rally that
its soil fertility.
We do know also
BOSTON, MASS. — Lowell A.
As to the future, it. seems to
can
pale most recent rallies Warren, Jr. is now with the First that the types of food which peo¬ me
that, our contentment and
into insignificance. All these Boston Corporation, 75 Federal ple most desire to eat are milk,
prosperity will depend to a large
butter and eggs, fruits and vege¬
are conditions that many peo¬ Street.
extent
on
how * we
solve ; our
tables and meat—which are main¬
problems.
As a nation in agri¬
ple are aware of. But because
ly the products of animal hus¬ culture
we are passing over into
they are aware of them, the Goldman, Sachs Co. Adds bandry.
We really would have an
industrial
era
here
in
the
chances are the blueprints for
no
(Special tQ The Financial Chronicle)
surplus-grain problem in the United States in which the
pro¬
the "next" advance will be
BOSTON, MASS. — Albert C. United States if the grain we pro¬ ducers
of
foodstuffs
are
its
spokesmen are on record as
forestalling any depression.
crop
■
v'
,
»
.
,
found
■
#
*
-v
*
Vr't-.y-.f ;i
Against the large short po¬
sition there is the Dow theory
and its lack of
e.g.,
been
McKenna has
faulty.
confirmation;
added
to
staff of Goldman, Sachs &
the
Co., 75
some
importance given that failure,
though most of it is limited to
the theoretical discussions in
the statistical
departments of
brokerage houses.
,
resulting products used in
our
much in the minority.
Population
under the efficient administration
of
our
medical
profession
in¬
is
A movement to
acquaint people creasing. I understand that the
with the tremendous advantages world's population is increasing
With Prugh, Combest
to
be
acquired from
vitamin-bearing
KANSAS V CITY,
has
beer,
Ed
(Special to The '.Financial Chronicle)
There is
the
be fed to animals and
diet.
Federal Street.
rails have not followed & Land
the industrials.
duce could
very
Babeock
using these
by
60,000
protective foods United
given great impulse by
Cornell
from
and
not
persons
per
day. ^ The
States will have/ whether
it
desires, its part
this population increase. \ w
or
so
MO.—Patrick
others.
Yet we find ourselves to¬
It would seem that we could
Tobin, Jr. has been added to
day with a human-animal ratio of take either of two roads as we go
the staff of Prugh, Combest &
1.4
animals per
person
in the into this era. First, we could con¬
Land, Inc., 1016 Baltimore Ave¬
United States.
Whereas in 1942, duct our
agricultural production
nue.
■'j ■''■ -^f^y^y
just as the war came upon us, we so that we will eventually be re¬
had almost two animals per person duced to a
cereal-soybean-coco¬
With Standard Investment throughout the land. This, it seems nut-oil diet, with T our farmers
to me, is a significant change. And
(Special to The Financial Chronicle)
largely producing for their own
PASADENA, CALIF.—John C. if agriculture is to prosper, the sustenance, and our cereals pro¬
Harvey has become affiliated with
must
be
reversed
so
that
reach
production.
the
will
We
not
position in ag¬
riculture, it seems to me, so long
as it is the ultimate
goal of many
of our farmers to lay aside enough
money from their farms so that
they can retire to live in townl
Our farm people must consider
proper
their farms
which
going businesses in
as
they
afford to invest
surplus funds with the sure
knowledge that if for any reason
can
their
their
farm
be
cannot
carried
on
by their heirs it will at all times
have
a
value in the market-place
should
they wish to dispose of it;
This
is going to bring us
a
type of agriculture which will get
the most from
State and gov¬
our
ernment services for
helping farm
production.
It will give us a type
agriculture which can make its
of
contribution
proper
toward
the
on
of a representative
government under a re¬
carrying
form
of
public.
Such
government
a
been the ideal toward which
has
men
have worked for centuries. It has
been realized here in
Still
I
;;
believe it pos-:
cannot
sible that
fice
going to sacri¬
ideals "J which
are
we
those
stimulated
fect
Ameri¬
our
republic.
can
high
our
forefathers to per¬
this type
so-called
of government for
a
"security," ; which
many people seem to have for¬
gotten depends for its stability on
the willingness to produce by hard
work the things which make our
type of living possible.
Summary
|
To summarize
briefly the points
I have attempted to make, I would
say that our future
as fanners
will be determined by the manner
in which
solve the
we
problems:
.
find
must
We
First.
following
.
.
some
by developing a better
understanding between the varH
ous segments of our
population,
of overcoming a purely selfish ap~
mesans,
approach
to
national
our
prob¬
This understanding can be
lems.
out only
worked
by better
con¬
tacts between the various groups
—and I understand that our great
farm" organizations
are
much in-?
terested in this approach,
r;
I have heard
of
one
y^y^.
our
most
influential
/ representatives •; in
Congress state that until farmers
voted iogeth^r I as; farmers .they
never receive
just recog->
would
I do not approve of this
nition.
pressure organization. I
would not wish to see it any more
type, of
than I like to see the representa¬
tives
of
labor
our
organizations
solidly together
representing labor. ; America was.
to
attempt
vote
not built on such a
distinction.
Second.
of
J.
trend
tinued
for
is
It
■,
*
basis, of class
\
*
/
We must all work hard
a more
tion.
;
comprehensive educaJ
only through an en-f
lightened
citizenry, which main¬
tains
active
an
in
interest
the
of government that
hope to carry on a gov-^
functioning
we
can
ernment
Third.
to
in
such
as
ours.
y ..,y^
-
We must find some way
prevent the wide fluctuations
prices which now bring us
or famine in our food pro¬
feast
duced by the
CALIF.—
Philip B. Taylor has rejoined the
Pacific Coast
government on comcontrolled,- collectivized duction. This is. a hard problem,
farms. Or, we can foster and de¬ but it should not be unsolvable.
grains to feed it and improve the velop our habits of diet so that We must find some way to ap¬
diet of our human population from we can
up-grade our cereals and proximately match our agricultu-]
its consumption.
V roughage, by feeding them to ani-ipral production with our demand.
mals, to a supply of protective To do this it should not be neces¬
Farmer Must Promote Increased foods
high in vitamins and en¬ sary that farmers be encouraged
Efficiency '
ergy.
This can be done under a to produce crops for the express
The next problem I shall men¬ system where the producer con¬ purpose of selling them to the
.
.
I
tion, it would seem to me, is one tinues to produce under private government.
Fourth. The best place to store
which, in a way, goes back to enterprise on land constantly get¬
staff
education
Standard Investment Co. of Cali¬
Securities
Orders Executed
fornia,
117 East Colorado
Street.
In
past he was with
Harris,
the
Upham
&
Co.
and
Pacific
Com¬
of California.
pany
on
Joins Hannaford & Talbot
Paelfie Coast Exchanges
(Special to The
SAN
Schwabacher & Co.
M embers
Hero York Stock Exchange
Financial
Chronicle)
FRANCISCO,
of Hannaford
California Street.
&
He
Talbot, 519
was
recent¬
ly with King & Merritt &
Co.
Son Francisco Stock
14 Wall Street
OOrtlandt 7-4150
New York 5, N. Y.
Teletype NY 1-928
Private Wires to Principal Offices
San
Francisco—Santa
Barbara
Rosa
volume
up
to
this
in
Maloney & Wells Add
(Special to The Financial
Chronicle)
LOS
bert
ANGELES, CALIF. — Al¬
G.
Schaefer, Jr. has been
added
Monterey—'Oakland—Sacramento
Fresno—Santa
in
Wells,
Street.
to
the staff
Inc.,
650
of
Maloney &
South
Spring
that
the
food
farmer
and
use
is
himself.
to
in
production
this
nation
in
has
the
This efficiency is related to
almost synonymous with
keeping down of farm costs.
all know that
can
and
efficiency
which
some
of
our
produce their crops at
cheaper cost than others.
the
We
farmers
a
oletely
our
And
promote
increase
characterized
past.
can
we
but is, in the long run,
the
problem
foster
Hew York Curb Exchange (Associate)
Exchange
Chicago Board of Trade
animal population so increases
our
much
ting better
instead
of
and more
becoming
productive
worn
out.
We know how to produce on our
lands
and
maintain
and
increase
their
fertility. Such agriculture is
only possible where an efficient
producer is receiving a reasonable
return
for his efforts.
:
It should be our aim, therefore,
to
see
that
products of the farm
bring enough in the market
to furnish an incentive for
place
con-
grain is in the form of meat and
animal
products.
We • should,
therefore make every effort to
increase the ratio of animals to
man
in
this
country
fertility of our land
creased while at the
so
that the
can
same
be intime a
great reservoir of food of the
highest energy-producing type is
created, which would be a tre¬
mendous assets in case of war. To
do
this,
our
people must not only
educated
be
and need for a
As
I
must
such
fifth, I
keep
a
diet.
:
would say that we
overall farm or¬
our
agriculture from being
keep
completely lost in our economic
picture.
Many of us can serve
only in the ranks of these great
organizations; but we should have
increasing confidence in the lead¬
ers as they are developed to carry
on
the work.
The programs of
these
CHRONICLE
<771)
On the optimistic side
are the appliance makers.
Exactly opposite to them are the railroads.
Between the two there is still some uncertainty, "The Iron Age" notes.
and
deflation—
The daily
big refrigerator manufacturers are now coming back to capacity
production. This has not only helped sales of slow steel items like
electrical sheets, but it has put a little life into demand for electric
motors, copper tubing and all the other items that go into this product.
The railroads generally don't share the optimism of the automo¬
bile and appliance people. Last week several roads held up orders
for substantial tonnages of rails and track supplies scheduled for
shipment.
For
one
the
ton to
year
1947
*
ago.
Other
lower under
pres¬
induced by lessened demand from the East,
of liquidation
sure
room'.
expanding receipts and lack of storage
grains declined in sympathy with corn. Easiness in wheat
a falling off in export demand for both wheat and four.
also reflected
Sept. 1.
The Department of
Agriculture report
this year's corn crop at 3,538,000,000
as
of Aug. 1, estimated
bushels.
"
This
with
was
slightly higher than the July 1 forecast, and compared
3,650,000,000 bushels harvested last year.
The total wheat crop was es imated
1,132,000,000 bushels,x
at
under last year's yield.
of 156,000,000 bushels
decline
a
or
rate
a
a
nounced weakness last week, moving snaiply
standpoint of steel traffic they have cause to worry, too,
increase to take effect Sept. 1 will add an average
From the
since
JANUARY,
leadership of corn, grain markets developed pro¬
Under the
thing they are worried about the
cost of the shorter work week beginning
NEW LOW
TOUCHES
LATE
wholesale commodity price index, compiled by Dun &
with 280.41 at this time
the
fourth quarter
SINCE
AND
31
Bradstreet, Inc., moved downward last week to reach the lowest level
of the year and a new low since la.e January, 1947. The index closed
at 236.41 on Aug. 16, comparing witn 238.99 a week previous, and
Although appliance production is better in every item from hot
water heaters to gas stoves, the boom is in refrigerators./ Many of
organizations will be, in the
main, sound and practical.
disturbing industrialists.
is
YEAR
CURRENT
FOR
Industry
(Continued from page 5)
\
;
.
|
v
ganizations strong and virile. Over
the past fifty ;yearsthey have
done more than any of us realize
I to
FINANCIAL
The State oi Trade and
afford to
guarded so that they can
I purchase
&
WHOLESALE COMMODITY PRICE INDEX
to the ^desirability
better diet, but our
prosperity must be safe¬
national
COMMERCIAL
THE
170^Number 4832
Volume
Rail
Although dressed pork prices at New York con inued to advance,
building, through the
intelligent
cooperation
of
our
farm people and our urban people,
a
civilization in which both the
freight increases during the past three years have added about $3.50
to the cost of making a ton of finished steel. About $2.50 of this has
hog values at Chicago declined sharply at the week-end as the result
of heavier than normal marketings which met with slow demand.
agricultural part and the indus¬
higher than it was in June, 1946.
in this
I hope that we can go on
_
this country
of 25c
been
part * are prosperous
and
contented, each having an incen¬
tive to work for the good of all.
they recognize
their interde¬
there can develop a
under which it will not
be possible for history to repeat
itself. Remember that we have not
pendence
program
yet proven that we can keep the
power and wealth from entirely
gravitating to the cities, as it has
in every past civilization. Unless
we can
do this, we must expect
that
agriculture Will decline until
can no longer be pro¬
food
our
free men. The vision of
of a great, free
United :States of
America will
duced by
forefathers
our
then
have
perished.
■1
t
.
r
-
on
that
v
freight bill
/
the
operating
rate
SAN
FRANCISCO,
CALIF.
tV/■'/.//'//
>
Steel Institute announced this
of steel companies having
prices fluctuated irregularly over a fairly narrow range
quotations up slightly from a week ago. Prices
early part of the week following the first official
forecast of the new domestic cotton crop, which was below general
trade expectations. In subsquent dealings, the market was stimulated
by mill price-fixing and reports of continued improvement in the
cotton gray goods market.
Also lending support were the growing
prospects of a 90% of parity loan on next year's crop and reports of
weevil infestation in eastern and central parts of the belt.
Reported
sales in the ten spot markets during the latest week declined to
/
ENDED AUG.
13
fice.
This
13, 1949,
according to the Association of American Rail¬
totaled 728,029 cars,
This
roads.
increase of
an
was
11,205 cars, or 1.6%
above the pre¬
It represents a decrease of 163,247 cars, or 18 3% be¬
low the corresponding week in 1948, and a decrease of 178,276 cars,
or 19.7%
under -the similar period in 1947.
t,
ceding week.
,
PERIOD AT HIGHEST LEVEL
SINCE WEEK ENDED FEB. 19, 1949
The amount
m
electrical energy distributed by the electric
light
Calif., of¬
MONTHLY HIGH RECORD IN
(Special to . The Financial Chronicle)
DENVER, COLO. — Mark D.
Wright has been added to the staff
of Investment Service Corpora¬
^
L
With Aikm-Lambert Co.
(Special to The Financial Chronicle)
LOS
ANGELES, CALIF.—Mil¬
B.
Sheftall has become con¬
with Akin-Lambert Co.,
ton
nected
Inc., 639 South Spring Street.
The total output fdr~the current week was made up
and 21,919 trucks 'built in , the U. S. and 4,417 cars
trucks in Canada
of 117,881
and 2,328
-
Output a year ago'was ii3,324 units and, in the like week of
1941, it was held down to 45^545 units due to model! changeovers.
A new monthly high of 643,000 units for United States car and
this month, barring a
disputes. The existing record
production is predicted by Ward's for
truck
continuation of heat walkouts and labor
of 537,564
units was established in April, 1929.
1949
the
the
year.
Business in foreign wools was
States for the year
difficult to obtain.
of
shorn
at
wool
the United
in
213,635,000 pounds, according to the U. Sr
This was 8% less than the 1948 clip,
Despite
ever
recorded.
WHOLESALE
AND
UNDER LIKE
ATELY
continuation of
a
TRADE
very
when
failures declined, to 85 from 92,
as a year ago.
Both wholesale
mercial service failures, at 14, rose, while
weather in
warm
of shoppers
interest
The
;
below last year's
in
apparel
increased fractionally-
level.
and household appliances attracted more
Home furnishings
consumer
a
demand for such items remained moderately under
year ago.
Television
sets,
■//;'■■■
and air conditioning
'"
refrigerators,
sold well.
*•
Total retail volume in the period ended on .Wednesday of
was estimated to be from 3 to 7%
below a year ago.
to —5; East —3 to
—7; South —0 to —4; Midwest and Pacific Coast —5 to 9; North-
Southwest —4 to —8.
west —2 to —6 and
With
Labor
Day/
filling
week
near
their
retailers
hand
at
with
shelves
were
the
the
volume
during the week
was
previous week.
.
16% from the like period of last year and compared
12% (revised) in the preceding week. For the
four weeks ended Aug. 13, 1949, sales registered a decrease of 13%
from the corresponding period a year ago and for the year to date
decreased
with
a
by
decrease of
a
decline of 5%.
in New York last week had
Cool weather here
effect
on
retail
trade
and
decline
like period of 1948, the
immediately preceding.
while
'
sales
was
volume
held
a
favorable
under the
much less than in the week
■'
|
-
Board's index, department
period to Aug. 13, 1949,
declined by 21% from the same period last year. In the preceding
week a decrease of 14% was registered below the similar week of
1948.
For the four weeks ended Aug. 13, 1S49, a decrease of 15%
According
to
the
Federal
Reserve
store sales in New York City for the weekly
Following five consecutive weekly advances, the Dun &
wholesale food price index for Aug. 16 leveled off at
street
The
current
Brad-
$5.89,
figure compares with
$7.07 for the corresponding date a year ago, or a decline of 16.7%.
Individual commodities showing advances in the week included
bellies, sugar, ' cottonseed oil, potatoes, steers and lambs.
Against these were declines in flour, wheat, corn, rye, oats, cocoa
and hogs.
•
— *
....
. . ■
The index represents the sum total of the price per pound of 31
was
reported under that of last year.
by 8%.
decreased
hams,
foods in general use.
busy
Fall merchandise.
Total
moderately above that of
In some lines volume compared favorably with
that of a year ago although total volume was slightly below the
1948 level. %
/.,/
-|
•
Department store sales on a country-wide basis, as taken from
the Federal Reserve Board's index for the week ended Aug. 13, 1949,
wholesale
PRICE INDEX 5-WEEK ADVANCE
ago.
i
t
reaching a total
25 were reported. In re-i
but were about twice as
failures, at 23, and com¬
construction casualties, at
LAST WEEK
week
last
Regional estimates varied from the levels of a year ago by
the following percentages: New England —1
•
a
equipment
week
'
from
purchased,
though interest in women's coats was substantially below that of
the comparable week a year ago.
Consumer purchases of food compared favorably with that of a
week ago with dollar volume remaining slightly below the 1948
level. Fresh produce sold well in most parts of the nation. There
was
an
increased demand for fish, poultry and cold meat cuts.
Purchases of dairy products and canned foods were slightly larger
than in the preceding week.
:•
South Atlantic and West South Central. All
areas except the Mountain States had more failures than in the same
week of last year. Noticeable increases from the 1948 level appeared
in the New England, Middle Atlantic, and East North Central areas.
unchanged
parts of
volume remained moderately
Wool jersey and velveteen dresses were frequently
;
Pacific states,
ARRESTED
many
past
10, were down moderately from a week ago.
The New England region accounted for the sharpest relative
weekly increase, reaching the highest level in the last seven years.
Failures in the Middle Atlantic area held steady, while East North
Central casualties fell off almost a half. Slight increases occurred
WHOLESALE FOOD
MODER¬
LATEST WEEK
level.
Manufacturing failures increased to 61 from 46,
numerous
HOLDS
1948 IN
OF
country, the volume of retail trade rose slightly the past week.
Dollar volume, however, according to Dan & Bradstreet, Inc. in
its current review of trade, was moderately below that of the corre¬
sponding week a year ago.
that of
Involved casualties with liabilities
of $5,000 or more which rose to 164 from 132 and were more
than twice as numerous as the 77 reported a year ago. Concerns
failing with liabilities under $5,000 declined to 29 from 44,; but
tailing,
VOLUME
PERIOD
the
All of the week's increase
the
lowest
RETAIL
in the week ended
Aug. 18 from 176 in the previous week, according to Dun & Bradstreet; Inc. More than twice as 'many casualties occurred as in the
comparable week of 1948 and 1947 when they totaled 94 and 78
respectively. However, failures continued below the pre-war total
of 253 in the similar week Of 1939.
in
;
;
somewhat
estimated
was
and
CONTINUE UPWARD TREND
than twice that of a year ago
•„
$ shoppers the past week than in the preceding period, although
Commercial and industrial failures rose to 193
continued to exceed noticeably the 1948
was
pounds.
Department of Agriculture.
the
BUSINESS FAILURES
more
average.
last week, although retail apparel
increased Canadian output, as labor
caused U. S. production to drop to
139,800 units from 140,147 last week.
year
274.4
at
week
the desired types
slow. Production
previous period.
cars
a
was
last
market
AUGUST
The gain was due to
trouble at Chrysler -plants
this
acre
Agriculture
of
better feeling in the Boston raw wool
although trading continued to be rather quiet.
Woolen wools and noils continued in steady demand with many of
There
According to' "Ward's Automotive Reports" for the past week
prodSfetion for the United States and Canada was held
down to an estimated 146,545 units from 144,317 units (revised) in the
tion, Security Building.-
harvested
per
38.7 pounds below the record 1948 yield, but 20.4 pounds
was
the fourth quarter of
*
With Investment Service
yield
Department
the
by
Trading in the cotton gray cloth market continued active. Prices
were firm with spot print cloths
showing a further slight advance
for the week. Commitments from converters were reported well into
motor vehicle
f
lint
indicated
The
above the 10-year
—
1
79,400 bales in the like week a year ago.
<
Building, and power industry lot:? the week ended Aug. 20, was estimated at
York and 5,578,800,000 kwh.- according to the Edison Electric Institute.
This
San Francisco Stock Exchanges, reprsented an increase48,710,000 kwh. above the preceding week
will admit Wilson M. Dodd to 118,012,000 kwh. or 3.5% higher than the figure reported for the week
general partnership and Gifford ended Aug. 21, 1^40, "Shd, 625,924,000 kwh. in excess of the output
L. Troyer to limited partnership
reported for the corresponding 'period two years ago.
on Sept. l.<Mr. Dodd is in charge
AUTOMOTIVE OUTPUT EXPECTED TO REACH A NEW
firm's Berkeley,
69,900 bales, from 82,500 bales the previous week, and compared with
estimated
Davies & Mejia, Russ
members bf the New
of the
in the
advanced
Loadings of revenue freight for the week ended Aug.
ELECTRIC OUTPUT. IN LATEST
r
Cotton
last week with final
CARLOADINGS SHOW SLIGHT UPTURN FOR WEEK
Admit
Davies & Mejia to
on
week
94% of the
steel-making capacity of the industry will be 84.8% of capacity
for the week beginning Aug. 22, 1949, as against 83.5% in the
preceding week, or an increase of 1.8%, or 1.3 points.
This week's operating rate is equivalent to 1,563,300 tons of
steel ingots and castings for the entire industry, compared to
1,539,300 tons a week ago, 1,502,500 tons, or 81.5% a month ago,
and 1,728,600 tons, or 95.9% of the old capacity-one year ago and
1,281,210 tons for the average week in 1940, highest prewar year.
The American Iron and
,
steel prices. On
steel is about $4 a ton
to the consumer in the form of higher
top of this the average railroad
trial
As
passed
steel bill if he gets it by rail.
the consumer's
NOTE—On another page of this issue
For the year to date volume
J
the reader will find the most comprehensive
of business and industrial statistics showing the latest
previous year, etc., comparisons for determining the
conditions by referring to "Indications of Current Business
coverage
latest month,
of
feature in every
Thursday's issue of the "Cnronicle."
week, previous week,
week-to-week trends
Activity," a regular
THE
(772)
32
COMMERCIAL
FINANCIAL
&
CHRONICLE
Thursday, August 25, 1949
Indications of Current Business
The following
statistical tabulations
shown in first column
are
either for the week
or
month ended
on
Latest
AMERICAN
(percent of capacity)
Indicated steel operations
Crude
oil
runs
(bbls. of 42 gallons each)
(bbls,)—
———
unfinished
and
1,502,500
1,728,600
(bbls.)
gasoline
at-..
(bbls.) at
Gas, oil, and distillate fuel oil
(bbls.)
at
4,671,350
5.507.050
Aug. 13
4,722,900
115,227,000
5,188,000
5,130,000
ALUMINUM
shipments
18,383,000
1,383,000
5,724,000
7,282,000
17,900,000
1,663,000
6,259,000
7,220,000
18,117,000
17,489,000
1,531,000
5,699,000
2,050,000
7,440,000
7,785,000
9,310,000
Aug. 13
Aug. 13
108,174,000
25,329,000
108,444,000
24,885,000
111,464,000
96,634,000
23,791,000
Aug. 13
73,815,000
72,222,000
68,622,000
—-—Aug. 13
67,818,000
67,281,000
67,799,000
51,368,000
Aug. 13
728,029
566,163
716,824
567,143
724,100
———
531,788
692,141
(number of cars)
Revenue
freight loaded
Revenue
freight received ifom connections (number of cars)
,
CONSTRUCTION
ENGINEERING
CIVIL
ENGINEERING
—
ingots
U.
,_Aug. 13
'
and
stainless
COMMERCIAL
Shipments
Public
$158,751,000
$117,146,000
65,229,000
and
Aug. 18
municipal
81,516,000
61,726,000
69,140,000
121,569,000
106,697,000
93,522,000
Aug. 18
77,984,000
51,521,000
,
&
COPPER
Aug. 18
BUREAU
coke
15,538,000
14,872,000
12,376,000
8,000,000
696,000
7,200
Aug. 13
Aug. 13
Aug. 13
(tons)
STORE
INDEX—FEDERAL
SALES
RESERVE
SYS-
AVERAGE=100
TEM—1935-39
of
of
In
U.
of
12,561,000
1,034,000
1,201,000
6,600
143,900
S.
A.
258
FAILURES
(COMMERCIAL
STREET,
AND
INDUSTRIAL)—DUN
&
5,461,665
5,390,788
Aug. 18
OF
Production
233.9
193
176
182
Finished
Pig
3teel
iron
lbs.)
13.705c
3.705c
3.705c
3.720c
Aug. 16
$45.91
$45.91
$45.91
$21.17
$20.00
$19.33
$43.16
2,000 lbs.)_
PRICES
Electrolytic
Export
M. J. QUOTATIONS):
&
AND
refinery
refinery
tin
(New
Lead
(New
Lead
(St.
Zinc
(East St.
at
Louis)
(average
OF
U.
S.
BOND
Government
DAILY
of
A
Deliveries
(number
IRON
103.000c
103.000c
For
15.125c
producers'
14.000c
19.500c
Aug. 23
"...
•
t
103.70
103.76
103.22
100.71
114.85
114.66
113.89
111.25
120.84
120.63
Aug. 23
119.00
119.00
120.02
114.27
Aug. 23
'
MOODY'S
113.89
112.75
110.34
106.04
105.17
105.00
109.60
109.42
107.93
*
•
.
'
.
YIELD
Aug. 23
115.82
115.82
115.43
111.81
DAILY
?'• '•
V.v
».
.
-•
••:. .•
119.20
118.40
115.43
119.20
W
,
v.
Shipments
Unfilled
INTERSTATE
T'.,
*
'
•
•'
.
Index
of
July
Railway
(1935-39
MAGNESIUM
2.24
2.23
2.27
2.45
OF
(in
MALLEABLE
2.62
2.65
2.84
2.70
2.74
2.94
For
sale
2.95
2.96
3.02
3.15
For
producers'
3.38
3.39
3.44
3.45
3.20
2.92
3.19
2.96
3.10
3.23
3.32
2.86
2.86
2.83
3.07
2.69
2.69
2.73
2.88
Aug. 23
338.9
337.4
339.3
422.1
INDEX
ASSOCIATION:
Shipments
Orders
Aug. 13
169,424
229,455
145,799
Aug. 13
(tons)
181,138
171,094
137,034
AND
METAL
REPORTER
PRICE
1
TRANSACTIONS
DEALERS
FOR
AND
THE
Odd-lot sales
by dealers
Number
of
of
ON
EXCHANGE
(customers'
shares
of
ACCOUNT
THE
N.
OF
Y.
;
total
Copper
Gold
(in
fine
Lead
(in
short
129.2
123.7
128.4
Zinc
Aug
Other
16,061
15,699
456,490
368,853
526.559
$17,155,684
$13,549,189
"
18,438
V
15,997
■
,V
12,101
16,774
136
94
145
141
15,856
11.965
16,680
446,864
436,867
318,652
457,136
I",
•
I Aug
V.
5,456
5,462
5,844
3,428
441,408
~~Auk
431,405
312,808
453,708
$14,571,925
$14,092,163
$10,251,259
$16,904,433
Autr
166,940
159,990
100,700
126,040
166,940
159,990
lOOJOO
126~,040
203,460
167,310
147,790
202.560
Al,;'
~~~
'
Aua
sales
Au|"
Round-lot purchases by dealers—
Number of shares
_
_
Aug
_
tons)
Foods
g
S. DEPT. OF LABOR—
—IIIII"*!
VEHICLE
16
151.9
Au<*
,
16
160.1
163.8
168.4
192.3
161.4
164.2
191.0
152.7
154.3
169:9
and
Building
All
All
metal
products
materials
_
_
...
_
nlhor
other
145.0
145.2
ic
152.9
139.0
138.9
139.0
Aug
I~~~
144.9
16
148.9
130.0
130.3
130.6
An»
IIIII
161.0
16
16
167.9
167.9
167.8
170.0
190.1
189.9
190.4
203.4
124.1
124.3
125.0
134.7
g.
—
IN
U.
S.
146.6
Meats
1—
number
(AUTOMOBILE
ASSOC.)—Month
.IIHIIHIIIIIIH "I
150.6
155.5
181.9
204.6
~
Aug'
skins
yearsTh^wefahtt5 use°d°
1948
inclusive.
A^g,
6
°J f°rfi?n crudA
tIle
3,112,527
*54,791
51,755
FROM
MANU¬
of
June:
vehicles
of
593,640
of
of
motor
Number
of
motor
312,406
86,200
117,572
632
coaches
431,046
394,703
99,126
cars-I
passenger
481,467
493,882
trucks
ESTATE
AREAS
AND
FINANCING
OF
Savings
and
Insurance
Banks
564
1.068
NON-FARM
INSURANCE
Loan
Trust
Savings
i
associations
$313,643
$296,617
$334,343
83,399
80.986
196,865
234,804
61,913
banks
79,713
202,634
companies
59,396
70,985
170,973
lending
institutions
Total
SOFTWOOD
PLYWOOD
(DEPT.
(M sq.
and
%-in.
ft.
OF
187,400
141,232
141,061
$942,749
$1,043,591
COM¬
May:'
%-in.
equivalent)
sq.
ft.
%-in.
151,364
150,924
♦76,148
40,778
74,733
216,394
*75,384
•207,989
131,920
106,178
feet,
sq.
equivalent)
♦153,516
•158,279
77,811
(M
154,677
152,137
consumption
equivalent)
(M
168,926
158,358
$1,000,920
Miscellaneous
Stocks
I
SAVINGS
CORPORATION
(000's omitted):
companies
and
Mutual
IN
S.—FEDERAL
U.
LOAN
—Month of June
of
at
end
month
Consumption of logs (M ft. log scale)
Stocks (M ft., log scale) at end of month
STEEL
CASTINGS
Month
of
Shipments
sale
211.2
213.9
(DEPT.
OF
224.8
231.1
281.5
184.8
180.5
208.6
runs.
64,890
COMERCE)—
May:
(short
tons)
(short
tons)
1
143,337
83,277
111,616
36,676
31,721
191,473
of
119,953
75,537
30,641
_
tons)
250,506
482,531
month
tons)
275.0
224.4
189.5
Is
(short
TRUCK TRAILERS
tThe weighted finished steel
composite
avera5e product shipments for the 7 years
1937
to
was revised for the
1940 inclusive and
(DEPT. OF COMMERCE)—
Month of May:
Production
1946 to
SALES
producers' own use (short
Unfilled orders for sale at end
_
Hides and
*3,530,839
53,173
For
__
Livestock
34,521
3,174,687
_
Number
For
Special indexes—
Grains
75,596
159,440
*36,807
136.6
«Ug.
lighting materials
16
Aua
Aut'
*"
foods.
products
and
Metals
farm and
I Aug!
Aug. 16
Textile
Fuel
other than
*67,354
•153,349
35,523
FACTORY
Production
Aug
IIIIIIIIIIH
—
All commodities
60,625
tons)
Shipments
;
35,377
178,760
158,218
—
fine ounces)
short
—
__
11,629
78,944
MINES)—
tons)
MERCE)—Month of
WHOLESALE^ PRICES NEW SERIES—U.
commodities
Farm products
OF
Individuals
;
All
sale
$21,572,393
13,160
15,916
■
Aug
_
sales
473,645
$18,090,645
:
Aug
~
I
Round-lot sales by dealers—
Number of shares—Total sales.
Short
16,382
Aug
II
for
month,
J
Al,|'
II
j
(in
(in
PLANTS
REAL
_
value
of
ounces)
FACTURERS'
IIZZZ~——-~Aug
.
Dollar
33,577
sale
143.9
Total
.
for
I*
short
93
375,515
ODD-
Customers'other sales-
-
(in
64
IIIII—IIIIIIAug.
sales
cancellation,
Number
I
.
shares—Customers'
Customers' short sales
i
48,170
26,929
United States:
282,174
STOCK
~~™
Customers' other sales—
•
81,747
27,643
26,958
production of recoverable metals in the
82
purchases)—
Odd-lot purchases by dealers (customers'
sales).
Number of orders—Customers'
total sales
Customers' short sales
Number of
54,472
32.639
______
(short tons)
(BUREAU
323,864
COMMISSION:
!
value
526,000
OF
June:
Aug. 19
_
_
Dollar
756,000
59,597
(DEPT.
69,865
84
orders
Number
*»!
23,560
311,124
INDEX —1926-30
_________
ODD-LOT
SPECIALISTS
EXCHANGE—SECURITIES
130.6
752,000
use
end
OUTPUT
MOTOR
LOT
U18.9
(DEPT.
(short tons)
Aug. 13
AVERAGE—100
STOCK
222,478
of
tons)
less
Aug. 13
at
DRUG
middle
PRODUCTS
tons)—
own
v orders,
(short tons)
165,194
184,342
(short
(short
booked,
Silver
PAINT
at
CASTINGS
Unfilled
Mine
Percentage of activity
OIL,
.
COMMISSION—
Employment
IRON
2.70
(tons)
(tons)
207,354
MANU¬
COMMERCE)—Month of June:
Month
orders
2,601,62&
July:
pounds)
2.61
-Aug. 23
Unfilled
1,445,532
COMMERCE)—Month of June:
2.91
-Aug. 23
Production
of
units)
average=100)
WROUGHT
Shipments
-Aug. 23
received
of
COMMERCE
-Aug. 26
Baa
Orders
436,964
month
CLEANER
ASSN.)—Month
-Aug. 23
PAPERBOARD
of
CLEANERS—STAND¬
(number
-Aug. 23
COMMODITY
555,728
461,874
U15.9
end
at
(VACUUM
-Aug. 23
NATIONAL
sale
;
sales
992,692
467,433
161,920
(short tons)—
use
own
VACUUM
SIZE
92^,307
427,211
COM¬
of May:
for
FACTURERS
Factory
125,093
439,420
OF
tons)_
(short tons)
Not Avail,
(number
tons)
(short
orders
9,121
42,813
866,631
(DEPT.
(short
-Aug. 23
—
MOODY'S
6,434
36,564
.
AVERAGES:
-Aug. 23
Aaa
cars)
107.27
Aug. 23
,'„j
.
BOND
114.08
106.21
Aug. 23
Group
•
.
of
116.22
118.20
4
Aug. 23
Industrials
•
♦216
*243
(AMER-
15.000c
—
206
*•'-# 218
•
1,243,266
103.000c
15.125c
Aug. 23
——
189
INSTITUTE—Month
CASTINGS
103.000c
AVERAGES:
Group
_
.'
sale
19.300c
Group
Utilities
CAR
cars)
For
9.500c
—
Public
of June 30
OUTPUT—DOMESTIC
RAILWAY
23.425c
13.800c
-
Baa
184
July:
23.200c
10.000c
;
228
213
17.550c
14.800c
,'
:
181
17.325c
10.000c
——
Railroad
152
259
17.575c
Aug. 23
—
unadjusted
224
17.325c
14.800c
Aaa
Aa
1935-39
—
July:
238
ARD
Bonds
Average corporate
of
155
17.550c
—Aug. 17
i
at
PRICES
FEDERAL
Y.
N.
23,003,000
14,868,000
FED¬
222
HOUSEHOLD
MOODY'S
26,330,000
14,305,000
__
17.325c
Aug. 17
Louis)
79,277
1:
bales
monthly),
Aug. 17
at
103,277
daily), unadjusted
(average dally), seasonally adjustedStocks, unadjusted as of June 30
:_
Aug. 17
at
45,653
166,925
S.
(average
Aug. 17
at
U.
Aug.
of
DISTRICT,
BANK
Aug. 17
at
York)
_r_
SALES—SECOND
RESERVE
MERCE—Month
York)
45,316
212,817
(tons
PRODUCTION
gross
STORE
Sales
GRAY
copper—
Domestic
Straits
(E.
107,014
V
-je.—■».
—
Sales
of
METAL
81,473
92,118
-
Backlog of orders at end of month
ton)
gross
♦72,051
.
$44.52
Aug. 16
ton)
gross
(per
311.3
62,635
July:
____.
AGRICULTURE—As
RESERVE
ICAN
lb.)
(per
(per
steel
Scrap
of
94
Aug. 16
,
294.5
85,638
month
*
stocks at end of period
500-lb.
FREIGHT CAR
IRON AGE COMPOSITE PRICES:
623,620
Stocks seasonally adjusted as
5,530,030
BRAD-
INC.
108,546
464,732
(1935-1939=
Acreage
Sales
'
5,578,800
Aug. 20
-
104,305
412,303
(short tons)
2,000 lbs.)
(tons of
ACREAGE
ERAL
213
*223
217
,,
,
(in 000 kwh.)
May:
INC.
2,000 lbs.)
10,205,000
6,640,000
7,550,000
689,000
7,500
of
(tons
Refined copper
V
Aug. 13
INSTITUTE:
ELECTRIC
Electric output
5,476,774
OF
July
AVERAGE=109—Month
EDISON
(DEPT.
91,835
BRADSTREET,
DEPARTMENT
DEPARTMENT
7,075,517
5,234,862
tons)
(tons of 2,000
DEPT.
lignite (tons)
anthracite (tons)
*6,498,201
5,177,259
alloy
Deliveries to customers—
MINES):
OF
coal and
Pennsylvania
Beehive
S.
(U.
OUTPUT
Bituminous
FORCINGS
INSTITUTE—For
COTTON
COAL
including
CONSUMER PURCHASES OF COMMODITIES-
55,420,000
Federal
141,799
castings produced
tons)—Month of June—
STEEL
89,029
-
INSTITUTE:
July
products,
(net
(short
Refined
$252,314,000
135,745,000
construction
State
for
of
80,674
5,780,777
STEEL
steel
«
of June:
Unfilled orders at end of month
Crude
$137,173,000
55,657,000
Aug. 18
-
Ago
Copper production in U. S. A.—
NEWS-
.
construction
Private
and
J 90)—Month
—Aug. 18
construction
8.
AND
tons)—Month
(net
RECORD:
Total
IRON
Shipments of steel
RAILROADS:
AMERICAN
OF
Year
Month
(DEPT.
(thousands of pounds)
891,276
(bbls.) at
PRODUCTS
COMMERCE)—Month
21,564,000
57,039,000
—
.——
Steel
DUN
ASSOCIATION
WROUGHT
COMMERCE)—Month
Total
5,592,000
13
13
13
13
,
Kerosene
Residual fuel oil
---
4,769,700
Previous
Month
95.9
—Aug. 13
average
(bbls.)
——
Aug.
Kerosene output
(bbls.)
——Aug.
Gas, oil, and distillate fuel oil output (bbls.)
Aug.
Residual fuel oil output
(bbls.)
—
—
Aug.
Stocks at refineries, at bulk terminals, in transit and in pipe lines—
Finished
Latest
Ago
AMERICAN
output
month available (dates
are as of that date):
or
of quotations,
cases
Year
INSTITUTE:
stills—daily
to
„
1,539,300
in
or,
OF
output—daily average
Gasoline
..
that date,
81.5
83.5
1,563,300
-
„
PETROLEUM
Crude
Ago
84.8
Aug. 28
ingots and castings (net tons)
AMERICAN
Month
Week
Aug. 28
'Equivalent to—
Steel
Previous
Week
INSTITUTE:
STEEL
AND
IRON
Activity
production and other figures for the latest week
cover
Shipments
Shipments
(number
♦Revised figure.
in
of
units)
of
(number
(value
units)
2,752
:
dollars)—
tPreliminary figure.
•2,760
3,688
2,541
—
*2.869
3,985
$8,992,275
*$9,936,183
•11,544,790
Volume 170
THE
Number 4832
■
COMMERCIAL
&
FINANCIAL
CHRONICLE
(773)
Observations
Consumer PurchasingjPower and Labor Agitation
makes the
report
Nathan
The
the wage
earners most likely to obtain wage
increases will increase their spend¬
ing for consumers' goods. The ap¬
propriate quotation has already
been cited.
This is one of those
generalizations which obscure the
truth. The lower the income, the
greater the proportion spent on
consumption. That is statistically
further assumption that
It does not follow,
verified fact.
arbitrarily raised.
are
(Continued from page 10)
This is a
difficult administrative task
most
and
which
one.
disrupt
can
com¬
petitive forces, with unfortunate
consequences.
Rather than expect
from
businessmen
benevolence
a
which is
incompatible with vigor¬
competition or impose arbi¬
■
X v
that the wage earners spend it."
likely to obtain wage in¬
Historical Cases
creases
are
in
the low income
The most important historical
groups.
For example, the steel
$3,000-$3,999 instance is the substantial wage
income group. This group, accord¬ increase which occurred in most
ing to the Nathan report (p. 23), industries during 1933 as a result
the
accounted for 9% of the total net
the
rate
same
One should not
try to use sudden changes in the
general wage level as a means of
checking recession or accel¬
erating recovery. Nor should one
look
increases
to
in
the
money
chasing Power Theory? >
of
That
be
may
understanding
gathered
of
from
this
"Labor's
Monthly Survey," publication of
the
AFL.
ary,
1947 stated:16
if
issue
Its
"Prices must
the National Industrial Recov¬
we
Janu¬
of
one's
as
quickening production hours of work were reduced about
employment through invest¬ 10 percent, so that weekly earn¬
concerned.
ings
only about 10%.
rose
Dur¬
ing this same period the cost of
Purchasing Power and
i
living rose by roughly 10%, so
Employment ■ ■/:.! f!
that the real incomes of workers
The above observations point up under the codes remained about
the
necessity for
clearer defini¬
tion of the term "purchasing pow¬
the
er.''
under NRA codes and of salaried
In
the
a
popular form
of the
same
in
come
the
as
economy,
the
or,
more
quantity
of
as
The real in¬
before.
been
have
to
seem
not
workers
manual
of
come
theory, purchasing power is often people
regarded either as total money in¬ duced.
narrowly,
Industrial
output
re¬
during
1934
was
1933
level, and this increase can
only slightly above the
down in 1947
come
received by wage and sal¬ be
entirely explained by the great
earners.6 Actually, purchasing increase in federal
spending for
power is the
quantity of goods relief. There is no evidence that
and services which can be bought I
the wage increases themselves had
with the money income distrib¬
an
nomic system.
relation
the
the
eco¬
It thus depends
of
on]
aggregate)
between
personal
There is
stance
income and the price
L,
Personal income includes
level.
appreciable effect on the level
output and employment.
ownership, and so
wage
and salary
well as j
income.
The
amount df wage income, more¬
over, depends on the volume of
employment as well as the level
of
wage
rates.
Even
a
little
thought, then, reveals at least four
determinants of purchasing pow¬
er: money wage rates, the volume
of employment, the size of nonwage incomes,
and the level of
retail prices. Raising one of these
factors, such as money wage rates,
will not necessarily increase pur¬
chasing power, for there may be
offsetting changes in the other
factors. To take a simple case, if
the income of everyone
in the
economy rises by 10% while the
retail price level also rises by
10%, there has been no change
in purchasing power.
Therefore,
as a matter of practical judgment,
it is difficult
to
feel optimistic
about the possibility of producing
an
increase in employment by a
general increase in money wage
rates. The main reason is that, in
an
uncontrolled economy, prices
on,
as
pertinence.
titled,"Wage
an
article en¬
in
Policy
Reces¬
have
already
once
lived
through a period in which wages
shlould have been lowered but
expected
remain
to
that
result of
serious
if
the
if prices
ever,
that
cut
forced
are
up
unemployment was the
a too rapid rise in wages
Therefore, not all labor leaders,
agreed that wage increases
alone would serve to increase con¬
are
purchasing
sumer
produc¬
power,
tion and employment.
Conclusion
deed the reasons advanced at that
of
views
presenting
dailies
labor
were
the
identical
so
ing class does not depend to
extent
the
on
level,
wage
money
what it does depend?11 Speak¬
on
in¬
incomes
Workers'
produced.
be raised either by
can
increasing
the size of the national income
altering
by
of
favor
distribution
its
"As is well known, wage
were
of
fact, Robert
Nathan recognized this in a book
in
opposed
written
some
years
ago
when he
said:7
"Many are in favor of increas¬
ing the relative share of the lower
income
groups
through
higher
wages.
Anything that can be ac¬
complished in this direction
through ever increasing minimum
wage
requ'rements is desirable,
but history reveals that prices in¬
crease
when
labor
costs
increase.
It is then suggested that
prices be
arbitrarily held down while wages
6 L
and
Y.,
G.
Labor
Reynolds,
"Labor
Relations,"
Prentice-Hall,
1949, pp. 426 et seq.
Nathan, "Mobilizing
7 R.
ance
p.
"
Whittlesey
Economics
House,
Dr. Hahn
goes
.
.
to point out
on
warned
sterility and dangers of the
leading
trade
German
economists
unionist
policy.
They were ignored. Dr. Hahn be¬
lieves that this materially con¬
tributed to the growth of the fasc;st
philosophy and its acceptance
in Germany. ~The- only other al¬
ternative. in his mind, is contin¬
uous inflation through
deficit fi¬
nancing, ending in
a
socialization
The most desirable behavior of
level, then, would prob¬
ably be stability during recession
a
moderate rate of increase
and
during recovery, so that over the
long run the wage level would
cit.,
8 L.
66.
G.
9 L.
Albert Hahn, "Wage Policv in Re¬
Reynolds,
op.
p.
than
the
latter.
sake
the
For
of
it
social
intense
involve
would
conflict, and that it would have to
made
be
than
other
wage rates.
by
means
money
141
118
149
19
127
157
17
137
165
15
147
173
and disadvantages of the
This example illustrates the advantages
It can be said that open-end issues are particu¬
larly suitable to investor who wants absolute marketability.
On the
the permanent investor who wants a good return without
potential appreciation in rising markets the closed-ends at a
discount are definitely more attractive. This assumes that choice ©f
issue can be made of equal quality of management.
r
other hand,
loss of
Unions Are Uncontrolled
There
able
are
which
national product. Ob¬
workers are idle,
gross
when
attain.
to
employment for which they were
Factors
Volume
of
the
econ¬
shown
Employment
Strangely enough, the whole
relationship of employment vol¬
is
to gross new
capable, of
that
is
%2Vz
is
subtract
our
from
the
All
to
nation's
spending
the month. Take
for
ultra-simple
an
necessary
new
power
"demonstration.
billion
gross
spending
power
14.4% of the
for
re¬
gives the total wage
month
in
all
of
the
factories of the United States. The
last
column
how
close
to
comes
of
Table
this
VI
simple
giving
the
rising real
be accompanied by ris¬
incomes for other eco¬
wages can
ing
real
nomic groups.
This development
makes for a large measure of po¬
litical
and
social
harmony.
as the attention
economic groups can
long
So
of different
be kept fo¬
on
a
general enlargement
everybody's income, one need
not have major political disagree¬
ment in the community.
Discord
enters when economic expansion
ceases and
each group struggles
cused
desperately to enlarge its share of
a stationary or falling national in¬
10 Labor's
Monthly
1947, p. 4.
11 L. G. Reynolds, op.
Survey,
cit.,
p.
January
431.
of
have
book
an¬
the presence of a
multitude of interfering factors.'
Obviously,
total
if
factory
one!; divides
the
bill
the
wage
by
hourly wage rate for all
factories, the quotient will be the
average
total number of hours of
ment.
the
follows
It
that,
employ¬
the
lower
rate, the more will be
hours of work performed—
wage
the
glance at Chart IV shows that,
was
the
above
the
the
people of our nation one-sixth
total potential income.
was
the result of pricing
their
of
This
rate
excess
which
of the
would
actual
overpricing, prime responsi¬
this
bility rests upon the great labor
In
rate
over
May,
1949,
actual
average
hourly earnings of factory workers
stood
at $1.38.
reduced
Had the rate been
to $1.31
the effect would
have been to restore full
ment
rather
promptly.
employ¬
But
the
leaders of the great labor monop¬
olies
did
not
then, and still do
not, show the slightest interest in
keeping wage rates at a level
will
which
keep
everyone
em¬
;Vi-■ '
Sooner
-
'
•
Policy?
later, we are all too
or
be faced with another
great shrinkage in demand like
that characterizing the 1930's. If
and when this occurs, do you feel
likely
to
that it is sound
policy to leave in.
leaders
labor
the
of
hands
the
to paralyze the nation's in¬
dustries? Would it not be wiser to
power
leaders
are
more
no
virtue than
are
treated
of
paragons
of
captains of indus¬
hence both should
that
and
be
that-* labor
fact
the
recognize
When
alike?
powerful
a
the
pressure
persistently advocate poli¬
only to the pub¬
group
cies inimical not
but to their own fol¬
lic at large
lowers, and when they attempt by
threats to dictate the actions of
elected
our
representatives
and
indeed, time
for Congress to clip the wings of
these would-be dictators? Ought
officials,
is
it
Congress
not,
to
pass
legislation
combinations or or¬
ganizations of any kind to push
prices of either commodities or
forbidding
above
labor
the
levels
which
competition .would determine? Is
it
not
desirable
to
prevent
any
from interfering with free¬
feel that
group
dom of contract? Do you
Congress should continue to al¬
low any class the special privilege
American
they
please, when they please, and on
what terms they please? In brief,
is it not high time to reestablish
of
preventing
honest
citizens from working where
in
Instead, they have been pressing
with utmost vigor for a wholly
unwarranted
fourth
round
of
a"d
increases.
\
What Is Now Sound
ployed.
wage
controlled
which
monopolies
rates.
wage
not
the rate which
would give full employment, and
there seems to be a tendency for
unemployment to diminish.
wage
And for
labor out of the market.
leaders
1949
Ronald
by
(published
try,
Why Unemployment Has Risen in
A
tions"
Press), on the average, during that
whole decade, unemployment cost
formula
correct
despite
swer,
lessened
about
Moreover,
past century has come
VI
Table
"The Causes of Economic Fluctua¬
shows
the
mainly in this way.
under these conditions,
I
my
1930's.As
the
in
.
workers in the United States over
the
in
The great in¬
real
incomes
of
of
decade
^
Determining the
give full employment, hence un¬
employment-, rose
sharply.
Re¬
cently, however, an improvement
in gross new spending power has
a
the
that
will justify.
power
continuing
poss'ble
certain
almost
monopoly leaders would prevent
the ! necessary
downward wage
adjustments, ; and
thus
would
cause a
repetition of the chronic
during the early part of 1949, the
actual average factory wage rate
make
spending power
to
decline,
it
new
continue
seems
workers
do
of a country is expanding
however, national income can be
doubled and redoubled, and this
omy
will
gross
become idle?
Simply because the labor monop¬
olies set wage rates higher than
the existing volume of new spend¬
why
country will be
While
If
should
the national product will fall. But
historical
doubtless
any
Monopolies: King
(Continued from page 10)
and vice-versa.
428
Commercial
and
Financial
Chronicle, June 16, 1949, p. 11.
cessions,"
109
two types of stocks.
bill
come.
N.
for Abund¬
N. Y., 1944,
23
T
of those who are
wary of being caught in the scissors of declining markets and rising
discount.
A decline of only 12% in the assets and a rise in discount'!
spread by 4 percentage points is sufficient to wipe out the loading:!
charge costs and place the closed-end owner at a disadvantage
insofar as realization of assets is concerned.
On the other hand, in
the rising market the closed-end stockholder has, of course, consider¬
able leverage* in his favor, 7 Also to a permanent stockholder the
advantage of larger working assets and dividend returns in closedends continues and is even slightly enhanced in declining markets.
mainder. That
of
of the economy.
the wage
133
clearly shows the reason for the fears
in
The former pos¬
labor.
of the
matter
100
121
or
sibility clearly offers more scope
come
.
125
-
115
mathematical
and
is
much
limits to the level of national in¬
again.
117
91
■
21
'
104
'
any time depends on the .size
distribution of the national
come—how
try, that I sometimes have the
feeling of living this period of my
tions
27
110
"
.
,
ume
raising
over
109
25
99
6
any
with those of today in this coun¬
life
101
•
primarily responsible during the
If the real income of the work¬
that
a
:
93
••
4-12
4-18
4-24
-i-G0
ing
•
replacement of argument, let us assume that all
labor by capital. Labor leaders re¬ property
incomes were distrib¬
jected wage reduction in the face uted to wage and salary earners.
of steadily mounting unemploy¬ The income of the latter would be
ment.
Their argument was, just increased probably less than oneas
it is today, that high wages quarter.
Of course, it is under¬
stood also that such a distribu¬
are necessary to maintain a high
tion could be made only once, that
level of purchasing power.
In¬
in
4-
viously,
and a Subsequent
time
-■.-•'•!
the
have had.
As
87
29
is
declines that would
millions out of work."
expansionary tendency which the
wage
increase would otherwise
depression,
-'Oi
75
83
'
production
crease
deep
82
—12
$93
.
31
'
Value
68
33
76
throw
ready clearly noticeable.
of
$60
expect serious
we may
rise in real wages.
state
a
of Stock
35%
—is:
y.j-.w
Asset
% Discount
71
6
.4-uj., j
"
$65
i
<
—24
so
power
buying
consumer
down,
is
many at a time when demand was
still
holding up.
Entrepreneurs
held
be
not
time when the denression was al¬
in
—30%
—
■
Market
price ^adjustment is made now;
and prices go no higher.
How¬
because
rot
of
will
ment
and this rise would cancel out any
is
-Closed End
-
Price
Changes
every¬
Price de¬
the
of the argu¬
purchasing power
theory.
From 1927 on employ¬
ment began to decrease in Ger¬
lt
ments
were
raise
produced
and how much labor gets of what
reduc¬
Germav.y
stable while the wage increase is for years
by the trade unions.
going on. Prices may rise consid¬ They even suceeded in obtaining
erably, even though the economy substantial wage increases at a
be
cannot
Market
ing broadly, labor's real income at
sions",9 states:
"I
will
standard.
cause problems for industry
however, and will be accompaniec
by temporary production cuts and
unemployment.
Such unemploy¬
Dr.
Hahn, writing of Ger¬
experience in
man
income from interest, profit, farm
;•
Open-End
Redemption
second historical in¬
a
of; sortie
Albert
declines
living
clines
money
ary
uted to all individuals in
the record would be:
This
to
are
Price
and
was
decline in the market and correspondingly narrows on the rise,
6%
Present
labor leaders do have
some
certain
a
insofar
ment
Assuming that discount widens 2% with each
reduction of discount.
either
avoid a serious de¬
Administration.8
The an¬
spending units in ery
pression. Consumer buying power
the
United
States during
1947. nounced intent of these increases
There is no guarantee that an in¬ was to raise the leyel of employ¬ must be restored, and this cannot
be done by wage increases alone.
crease in the wages of this income ment
by
increasing purchasing
one - fourth
of
American
group would result in an increase power.
Between June, 1933 and Only
workers are organized, and 1946
in consumer spending.
It could June, 1934, the hourly wage rates
shows that millions
result in an increase in savings. To of workers under NRA codes rose experience
fall behind the union wage rises.
that extent it would be abortive, by about 20%.
At the same time
bye all
savings
(Continued from page 5)
as
man-hour output.
■
in
about
>
flow of income to those who will
most
are
at
ous
wage level as a means of increas¬
trary controls by government on ing labor's share of national in¬
prices, it would seem better to come and reducing the share of
rely on tax and social security "capital." .■ <v'v'
measures
in
directing a larger
Is Labor
Agreed on the Pur¬
however,
workers
rise
33
our
These
nation
economic
freedom
before
the
law?
the questions which I
equality
are
Jepve with you for your
ful consideration.
thought¬
34
Farm Price
& FINANCIAL CHRONICLE
COMMERCIAL
THE
(774)
You
know
in
goods
always
we
ration
society.
We ration
today. We use this kind of ration
ticket today (holding up a dollar
bill).
You have a few of them—'
not
our
too many..
thing
We ration
have
we
like to ride in
today.
every-
but, as a
college profressor, I am rationed
out
that market,
of
I drive a
Chevrolet.
We
always have used this kind
of ration
ticket, except during the
we said we were
going
to keep prices below their com¬
petitive level, and then we de¬
when
war
vised
It
kind of ration ticket.
new
a
little red fibre ticket that
was a
the government
housewife went
issued.
to
When the
the
store, she
asked how many cents per
never
pound or how many cents per can;
she
always asked, "How
points per pound?"
The
incidental,
were
many
cents
you see.
Artificial Prices and Controls Are
low,
must control
we
here the pressure
will be to shift into livestock and
dairy production.
' '
'
,
even
second
The
thing
Aiken-
the
Hope farm bill does is to provide
for
flexible system
a
of price
sup¬
I
think
we
should strive to maintain.
It pro¬
vides that if we have a large sup¬
ports— something
ply of any particular commodity,
the price support will drop some¬
For basic commodities the
what.
price
support
can
60% of parity.
raised
to
90%
have
go
low
as
as
we have a small
support will be
of parity—but if
It
price
the
crop,v
small
prices
always go up anyway and price
jupports won't be operative.
The
plan basically recognizes that if
we have
a lot,
we must set the
unit price a little lower which
will do two things—it will encour¬
we
a
crop,
added consumption and it will
the de¬
on
discourage the further aggrava¬
tion of the supply situation.
That
is
a
mand side of the market.
sound provision.
By the
Powerful forces, are struggling
get price too
Mn Congress now, trying to get a
high, we must control on the
Oat 90% of parity price support
supply side of the market.
It is
across ,V the * board, - regardless
of
inevitable. These are the Siamese
size of crop, except, of course, we
twins of
token, when
same
we
agriculture—artificially
high
prices
rigid
and
controls.
They cannot be separated.
This
principle is so fundamental it is
almost axiomatic.
in
Farmers
for
If this is what
America
want,
I
am
them, but I want them to be
understand
to
sure
take
that
if
they
the one
they must also take
They go together.'
same principle holds in the
the other.
,
The
agricultural
and dis¬
In England those
processing
tributing fields.
functions
completely
and
absorbed
are
the
by
almost
government,
think they ultimately will
be here if we choose to follow the
I
pattern outlined
All
I
the
Brannan
then,
is that
vital and
a
neces¬
function, sometimes unsatis¬
factorily
and
sometimes
in
ade¬
quate, but nevertheless, if we are
going to throw it overboard, the
alternative
vision
of
bution
is
government
production
and
super¬
distri¬
with
somebody in Wash¬
deciding who gets what
ington
and who produces what.
Conflicts
in
Present
Agricultural
few words about the con¬
flict in the philosophy of agricul¬
a
tural
programs
time.
A year ago this month the
the
at
present
United States Congress adopted a
so-called
long-range farm pro¬
gram which was to replace the
wartime system of price supports
that expired last Dec. 31.
The
new
farm
program
effect
taken
Jan,
was
1.
to
have
1950—next
Jan. 1—but the day after the elec¬
tion
last Fall the sharpshooters
began
getting out
their
guns
saying, "We are going to amend
this long-range farm program."
That
was
before it
main
a
effort
and two months
year
was
to take effect.
The
directed
put¬
was
at
ting back into t'~e farm program
of the high price supports
some
and various other
things that
vailed during the
What is in the
war.
gram?
new
farm
pre¬
pro¬
I want to touch briefly on
Just two things.
First, it provides
that without also
ulti¬
mately having production
and
marketing controls. Opposing this
drive are the two top farm organi¬
zations
in
America
today, the
American
Farm
tion
the
and
Bureau
National
Federa¬
Grange.
They have taken positive stands
to retain the flexible price sup¬
port provision which is to go into
effect
Jan.
1, 1950, if
change the law.
1\
V
mentioning in his plan.
Price Supports Lead to Production
Controls
and
You
going to do about
I
are
influential
education in
adult
is repeated
we
my
job
this
of
level
the
of
market.
Let
us
In the 1930's we decided we
going to raise the price and
were
is make those foreigners
great de¬
We must raise
economic literacy of
the electorate. Only as we can in¬
the
out
crop.
appre¬
of ours.
mocracy
itself
i
get close to Virginia and illustrate
the think¬ with cotton. Before the war we
The chance exported about half of our cotton
Then
someone
cotton
pay
for it.;
grew
discovered.,
that
pretty well in Brazil
Egypt. As a result, we have
permanently lost our export mar¬
and
fluence the sound
thinking of the ket for cotton, except as we give
people-around us are we going to it away under the Marshall Plan—.
have sound government and sound and we'll stop that some of these
governmental
programs
in this days. Then we decided to keep
country
This process ^involves the price of cotton high for do-:
.
as
well as the mestic consumers, with the result;
youth. Education that it was the greatest thing that
-never-ending process.
We ever happened to the rayon and
must apply our best talents con¬ nylon industries in this country.
tinuously. Let us recognize that. We are that kind of people.
Let us do a rational job of it. ,
Let us not price ourselves out
! You bankers were in the dog¬
of the market It is so easy to da
house 15 years ago. You are not
in every industry, in agriculture,;
completely out of it yet, as some and even in banking. Let us keep
of you told yourselves this morn¬
America iV working together,- pro¬
ings You are business people; you ducing together, consuming to-'
are
financial people; you are a
gether. Let us recognize that we:
group that has not been in politi¬ are a
growing nation, not a ma¬
cal favor, and it will continue to
ture country. We are a young na¬
be
politically popular to perse¬ tion as nations
go.' Let us worry
cute you. You simply must recog¬
more
about expanding our mar¬
nize this, and must be subtle and
kets than curtailing our output."
tactful in your attempts at adult
Do you know that in the last HI'
education
in your communities;
years the population of America
nevertheless, you can do it and has increased
19,000,000 people,5
you must work at it.
-- one and one-half times the entire
education
adult
education of
is
our
a
.
Some
people say we can have
these
high
price supports
and
don't have to worry about con¬
trols, but let us not deceive our4
selves.
First, we will have acre¬
age allotments; but the American
farmer is a rather ingenious per ¬
son.
We had acreage allotments
before the war too. I might illus¬
trate in Indiana, where the corn
acreage was reduced to some 75%
as much as farmers grew in the
last five years, or whatever it was.
So
farmers
their
cut
corn
acres
We then called the County
down.
„
Agents and farm leaders to a con¬
ference at Purdue University and
,
population of Canada? We have a
tremendous potential market for
said in effect, "We have developed
:-|v.
Program;1;
food right in our own back yard.'
a new strain of hybrid corn that
Let us press for a flexible farm And if the signs I see in our vet-1
out-produces anything we
now price support program, free from eran's village at Purdue Univer-"
individual
controls.
Let
us
be
grow. If you will fertilize it right,
sity mean anything, our popula¬
and plant it this way and cultivate careful
in .agriculture,
and
in tion is going to increase 19,000,000it correctly, we believe we can other "industries, too, that we don't more in the next 10
years. -H';
«'
outsmart
this
control
business." pfl'ce ourselves out of the market.
; Let
us
get
that philosophy*
Do you know what our farmers If we put the price too high, we
across- in our. communities.
It is;
did?
They did produce more on can price bur product out of the
going to take some work. It is go¬
fewer acres than ever before, and market.
Let me illustrate in the
We
so
did you farmers in Virginia. case of potatoes. In 1948, with the ing to take some education.
And I take my hat off to them for government
spending over $200 must return somehow to the phil-r
Urges Flexible Price
Support
don't
we
,
doing it.
Then
that
We
have
so much
money," and Con¬
gress saying, "Doggone you, I am
going to give it to you anyway."
It is a
very unique situation in
American history.
It is one I
never expected to see. Ordinarily,
the pressure group says, "Give me
more," and Congress says, "I wijl
you
less," but now we have
top pressure groups in
agriculture
saying essentially,
"Give me less," and Congress say¬
ing, > "I am going to give you
more."
What
It is hard to understand.
are
our
alternatives?
Why
do the Farm Bureau and the Na¬
tional
Grange take that stand?
They take that stand not because
they want the farmers of Virginia
to get lower prices for things they
sell, not because they want the
farmers of
Virginia to have a
lower
standard
of
living; they
take that stand because they want
to
for
preserve
Virginia,
and
freedom
the
farmers
of
to
of
47
other
states,
manage their farms
way
they want to manage
them, freedom to grow what they
want to, where they want to and
when they want to, freedom to
sell
what
they want to, where
they want to and when they want
to. They want to preserve for the
farmers of this country freedom
from the necessity of selling like I
saw
in England, where the only
the
place
you
can
government
farmers
new grasses
sell
wheat
U.
the
S.
capita potato con¬
dropped 15 pounds in
Why? We are pricing
per
sumption
.one .wear.
wheat is to
a
collecting sta¬
osophy in this country of * an hon-v
est
day's work for an-honest dol¬
We must induce every group,
lar.
put on those acres taken out of ourselves out of the market. Con¬ whether it be agriculture, Indus-,
grain production and that if they sumers have learned to eat some¬ try, management, finance, labor,'
got the right kind of livestock thing-else.
That's the way the or
what-not, to recognize that
they could produce about as much American buying public reacts to
prosperity does not consist of[
as before on the acres that used
that kind of tomfoolery.
to
in
be
to
Our
corn.
just that, and
in Virginia.
I
did
farmers
did you farmers
congratulate them
so
for
it, because we want to live in
growing, expanding America
we do produce more effi¬
ciently all the time.
a
where
I
think you know what I mean
when
I
selves
talk
out
about
of
the
All I
saying is that under a
system of high price supports and
am
restricted
have
output,
they fail
quotas
will
first
will have marketing
have marketing
tobacco in this state.
we
You
quotas.
we
controls, and when
acreage
on
now
They work fairly well with tobac¬
co
since
we
have
a
limited
area
pricing
market.
our¬
Have
what
we
other.
Wealth
can
out of each,
gouge
consists
wealth.
is
Production
of
goods— not
any
of
you
people
hired
a
gold, of services—not silver. Only
plumber recently? I needed one
couple of years ago. He came as. we have a full flow of goods,
a
out to the house to fix
stool
a
will—going to Congress
saying essentially, "Don't give us
two
our
in the bathroom.
you
give
told
had developed some new
The. Effect of Brannan Plan
unique situation in
America today.
We have the two
top farm organizations—pressure
groups, if you will, selfish groups,
quite
million to Keep potato prices high,
'
'
•
someone
we
pasture mixtures and
A Unique Situation
the
Program
Just
cannot do
if
saying,
am
price performs
sary
in
::
Plan.
it?
people. We influence
ing of a lot of people.
remark we may make
by more people than
ciate.
Your job and
It is not
agriculture to price'1,
.
get the price too
we
and
areas;
age
Siamese Twins
Whenever
not worry about crop surpluses, except in certain areas
such
as
the
cotton - producing
need
would
I
Cadillac
a
tion
*or
hard for
too
-
What are we
the
and
only place you can
modernization of the parity
sell eggs is to a government col¬
in its operation, ana
there are concept.
You people in rural
things about it that we would like
ommunities know about parity, lecting station, and so on down the
line. They want no part or parcel
to correct.
Yet it is the mechan- The
farmers' Bible now reads,
of that.
It takes courage on the
ism that guides the flow of re- "Thou shalt cherish faith, hope,
part of the leaders of our farm or¬
sources, and when we
get far and parity, and of these the greatganizations to take that stand
away from it we leave a free so- est is parity."
It will lower some- when
not every member of their
ciety.
I
think that
is almost what the parity price on ieed
organization understands why they
axiomatic.
It we ir,y to set the grains and certain fibres and it
take such a position. I think they
price too low, as we did during will raise somewhat the parity
deserve your support as they fight
the war when
we
said
to the price on livestock, on dairy prod-:
this battle in the days ahead—
grocer in our home town, "It is
ucts, on poultry, on certain fresh even with our
Secretary of Agri¬
going to be a crime to sell ham for fruits and vegetables. It will en- culture
coming out with a plan
more than 50 cents a pound," then
courage the conversion of feeding- that
promises all things to all
we have to devise some other way
stuffs into meat, milk and poultry,
people except the taxpayer, whom,
of deciding who gets the ham. We If we encourage expanded liver
of course, he has very studiously
devise a new type of ration ticket, stock and dairy production, we
avoided
,
selves out of the market.
However, it is one of those things
we must be realistic about.
Support-Step Toward Nationalization
(Continued from page 13)
Thursday, August 25, 1949-
a
little leak
He loosened the
took it
and
up—he and the
apprentice.
The apprentice had
only been an apprentice for two
years. He had learned how to hand
the
plumber a wrench but he
didn't know which way to turn it
yet. He only got a dollar and a
quarter an hour. The plumber, of
course,
was
better paid.
They
loosened
the stool
and
took it
up
and services from farm and fac¬
tory, from management and
we
are
wealthy country.
a
crying need today
labor,;
Our;
is to get that,
basic concept across to
-150,000,000*
Americans. We must strive for ex¬
panded consumption and not for.
curtailed output.
the. illusion
don
chasing that
we
We must aban~
we
can
have
beeit
get more by-
where it
can be produced.
If we and said, "We will be back to¬
producing less. We can only get
adopt the Brannan Plan, we will morrow and get a carpenter to
more by producing more.
In that"
also have them on corn, on wheat, take up the floor." I said, "What?"
I really said more than that.
on cotton, clear across the board,
I way and in that way alone, will,
on
be
livestock, too. They will told them to sit down while I took we
inevitable, I think. Farmers up a little floor myself. It didn't nation.
will get a little card to be punched tak^ long.
They made a couple
when they market their produce, of trips back and forth to the shop,
and when the card is punched out and finally got this little job done.
they will quit selling, except as In a few days I got my bill—$49—
they find an outlet on the black $7 for material and $42 for labor.
and
a
healthy,
prosperous:
be
'
Buy U.S. Savings Bonds
market.
We have had some expe¬
rience with that, too.
.
Hurrying
discussion
about
it.
tinue
the
on,
that brings
me
of
what
can,,
we
to
a
do
I
turned
to
Mrs.
Butz
"Well, the clerk made
in making out the bill."
the
office
and
said
to
and
said,
going to con¬ "You must have made an error in
silly things we making out this bill." She said,
have been doing? We spent, to get "No, I didn't.
I am ashamed to
rid of the 1948 potato crop in this send out those bills. I charged you
country, over $200 million buying exactly what we paid the plumber
U. S. No. 1 potatoes off the mar¬ and
his
apprentice.; We made
ket and destroying them so you nothing on it. The rate per hour
and
I could
pay
more
for the wasn't so bad but they took too
No. 2 potatoes that showed up in long to do the job."
o:
the retail stores; and today, in this
That was my error, so I paid the
last week of June, we are spend¬ bill. However, on the way home I
ing a million dollars a day buy¬ stopped at the hardware store and
ing low quality eggs out in my bought myself two pipe wrenches
state and further west and putting and
a
hacksaw;
I am now a
them through dehydrating plants,1 plumber.
I
make
my
highest
even
though we have so many wages when I plumb. Those men
dried
eggs
now
that we don't have priced themselves out of litknow what to do with them.
It tie jobs around my house, as they
just doesn't make sense. I could have taught me how to plumb,
go on and quote illustration after
By the same token, It is not too
illustration.
I
don't
have
time, hard for others to price them¬
Are
REGULARLY
mistake
I went to
the clerk,
a
we
kind of
m
'
'
C
si;\
Ask where you
WORK
Ask where you
BANK
:
Volume 170
THE
Number; 4832
.'
COMMERCIAL
Securities
f
Ajax Mining; & Oil Co., Grand Junction, Colo.
Aug. id (letter of notification) 315 shares of common
stock.
Price—At par ($100 per share).
Underwriter—
None.
Proceeds—To acquire mining and oil prope.ties.
Office—828 Grand Avenue, Grand Junction, Colo.-
'
•
Anchor
Steel
&
Conveyor Co., Dearborn,
Mich.
Aug.
Price—At
stock.
par
($50
share).
per
Proceeds—For working capital.
writer—None.
n
-Aug.
value.
Under¬
Office—
purchase
vending machines,
Office—1947 North Howard
'
J V Bont'siock Corp., Tacoma, Wash.
5 filed
Aug.
300,000
Underwriter—Frank.
shares
($1
Russell
&
par)
'Price will vary as market price varies.
diversified closed-end management
,
,
common
Tacoma,
Co.,
/
Price—20 cents per share.
stock.
Edgewood Junior College, Barrington, R. I.
(letter of notification) $182,800 6% first mort¬
gage serial bonds.
Underwriters—Pilgrim Land Devel¬
opers, Inc., Cranston, R. I., and A. C. Beals Co., Inc.,
Providence, R. I.
To pay off mortgages.
Underwriter
and
and
move
erect
'property and for working capital.
.
w
;
'Buzzards
Bay Gas Co., Hyannis, Mass.
July 26 (letter of notification) $220,000 3%%
Series A
25-year bonds, due* 1971. Underwriters—To be offered
under competitive bidding andi sold for not less than
par*
For payment of outstanding notes.
Carnegie Mines Ltd., Montreal, Canada
April 27 filed 500,000 shares of common. Price—60 cents
per share.
Underwriters — Name by amendment. Pro¬
ceeds — For working capital, exploration, develdpmeht
and Other purposes.
/
'
•
Power &
Carolina
Light Co., Raleigh, N. C.
; /
7
Detroit Warehouse
Co.,
Detroit,
Underwriter—Tom G. Taylor & Co., Mis¬
Proceeds—To erect and operate a bleached
sulphate pulp mill with a 200-ton per day capacity.
gage bonds.
soula, Mont.
t
Illinois Wyoming Oil Co., Chicago, III.
;•
>
Radio
&
Aug, 15 (letter of notification) 300,000 shares of class A
Phonograph
working
York
New
Service
Gas
Aug.
Mich.
due
Office—11
capital.
17, N. Y.
East
,
Co.,
44th
Street,
(9/13)
7
12 filed $18,000,000 25-year first mortgage bonds
1974.
Underwriters—Comoetitive bidding.
Prob¬
Corp.
$75,000 mortgage owing to
the Michigan Central RR. Co. and the New York Central
-RR. Co. and a $30,000 note owing to Warehouse and
-Terminals Corp. Office—1627 W. Fort St., Detroit, Mich.
and
Motors
Keller
Huntsville,
Corp.,
Ala.
May 10 filed 5,000,000 shares (30 par) common.
writer—Greenfield, Lax & Co., Inc.. New Vork.
Stuart & Co. Inc.; Union Securities
Harriman Ripley & Co. (jointly); Merrill
able bidders: Halsey,
Proceeds—To pay a
Calif.
Aircraft
Corp., Windsor, Locks, Conn.
May 23 filed 170,456 shares of class A non-voting com¬
mon stock (10c per share non-cumulative dividend) and
11,362 shares of class B voting common stock. Price,
$5.50 per share. Underwriter—None.
Purpose—To ac¬
quire machinery, tools and equipment; to buy land and
buildings; to produce 30 helicopters and accessories; to
complete engineering changes; to setup sales and serv¬
ice departments; and to train service personnel.
Kaman
:7/^y7.;;
Kansas City, Mo.
Wilshire Boulevard, Los Angeles,
—1540
FralleyIndustries, Inc., N» Y. City / V
7 crease
Aug. 16 (letter of notification) 115,839 shares of common
capital stock. Price—At par ($1 per share). Underwriter
.—None.
Mont.
(by amendment) 180,000 shares ($10 par) com•mon stock to
be offered at $10 per share and 20,020
i shares to be issued in exchange for
$170,20p first mort¬
/stockypar $1) and 5,000 shares of B capital stock (par
10c) to be offered in units of two shares of A stock and
one
share of B. stock.
Price—$10 per unit.
Under¬
writers—None.
Proceeds—To expand sales and to in-
'
Central
Idaho-Montana Pulp & Paper Co., Poison,
Nov. 23
Aug. 15 (letter of notification) 10,000 shares of A capital
,
Aug. 23: filed 30,000 shares of $5 preferred stock (no
7 .par value) and 200,000 shares of common stock (no par
value). Offering — Terms to be filed by amendment.
"Underwriters—Merrill Lynch, Pierce, Fenner & Beane,
of New York, and R. S. Dickson & Co., Inc., Charlotte,
5
N/C* Proceeds—For construction. ;
,,
i
June 7 filed 235.000 shares of capital stock.
company's
such mill on the
*
common stock (par 10 cents).
Price—$1 per share. UnCorp. :
/ derwriter—Lea'son & Co., Chicago. Proceeds—To lease
Underwriter
oil and gas properties from the State of Wyoming. Office
—F. Eberstadt & Co., Inc. The terms and price of the
—39 So. La Salle Street, Chicago, 111.
offering have not yet been determined, but the stock
•
International Petroleum Corp., Spokane, Wash.
will not be sold below the market price on the New York
Aug. 9 (letter of notification) 500,000 shares of common
Stock Exchange at the time of the offering. Proceeds—
stock at 10 cents each.;-. Underwriter—None. Proceeds—
The shares to be sold are from holdings of Mrs. Benjamin
To drill for oil and gas and to secure equipment. Office
Abrams, Mrs. Max Abrams and Mrs. Louis Abrams, wives
—223 Rookery Bldg., Spokane 8, Wash.
of principal officers and directors of the company, and
• ;
Interstate Indemnity Co., Los Angeles, Calif.
do not involve new financing by the company. Following
Aug. 18 (letter of notification) 15,000 shares of capital
sale of the shares, the Abrams family will own approxi¬
stock (par $10). Price—At $20 per share. Underwriter
mately 25% of the company's 800,000 shares of common
—None.
Proceeds—To start insurance business. Office
stock.
Emerson
—Bat'kin & Co., New York. To repair and renovate mine
company and to exercise option to purchase processing
7-of
mill
Heliogen Corp., New York
Aug. 4 (letter of notification) 2,000 shares of capital
stock (par $5). To be offered present stockholders only,
Price, par. Underwriting, none. Corporate purposes, in¬
cluding advances, maintenance of laboratory, etc. Office,
17 West 60th Street, New York.
Proceeds—To be added to working
Aug. 3
construction.
balance for related purposes.
Under¬
Krieger, President (selling stockholder).
writer—Shearson, Hammill & Co., Los Angeles.
Business—Non-
fcftlance would be used for other corporate
or
Heidelberg Sports Enterprises, Inc.,
Pittsburgh, Pa.
June 25 filed 5,000 shares of class B common stock (par
$100). Price—$100 per share.
Underwriter—None. Pro¬
ceeds—$600,000 to be used for spectator grandstand and
G.
investment company.
The
purposes
•
'
common,
funds.
Douglas Oil Co. of California
Aug. 12 (letter of notification) 10,000 shares of common
stock.
Price—$3.30 per share. Proceeds—To Woodrow
Bradshaw Mining Co., Tonopah, Nev.
/Oct. 8 (letter of notification) 1,500,000 shares (5c par)
*
>
capital and used for general corporate purposes, includ¬
ing payment of $12,693,000 in loans to an affiliate, Co¬
operative G. L. F. Holding Corp. Price—At par.
stock.
common
Underwriters—Dillon, Read
& Co. Inc. and Dean Witter & Co. will buy unsubscribed
preferred; unsubscribed common will be sold either at
public auction or to the underwriters. Proceeds—To pay
off short-term promissory notes and to carry merchan¬
dise inventories and receivables or to replenish treasury
Cooperative Grange League Federation
Exchange, Inc., Ithaca, N. Y.
29 filed 1,200,000 shares ($5 par) common stock.
Offering—To be sold to members and farmer patrons.
Wash.
will be offered to
common
stockholders at l-for-9 rate.
working capital.
Underwriter—None.
coin-operated
equipment, real estate, etc.
Street, Philadelphia.
:
*
Phila, Pa.
Inc.,
;/• /V
(8/29)
at l-for-3 rate and
June
19 (leuer of notification) 2,000 shares of no par
Price—$100 per share. Underwriter—None. Pro¬
ceeds— To
,
Coffee Service,
Automatic
ISSUE
(8/26)
Cooperative G. L. F. Holding Corp., Ithaca, N. Y.
29 filed 44,088 shares 4%
cumulative preferred
Offering—To be offered at $100 to farmer and
non-farmer patrons of the G. L. F. Exchange and its
affiliates. Underwriting—None. Proceeds—To replenish
,1916 Occidental Avenue, Seattle, Wash.
•
PREVIOUS
stock.
19 (letter of notification) 2,000 shares of common
capital
SINCE
Television, Inc., N. Y. City
June
stock.
Associated Grocers Co-op, Seattle, Wash.
.•
ADDITIONS
Convertible
35
(775)
Registration
—George J. Martin Co., New York City. Proceeds—To
pay debt, for additional equipment, etc. and for working
capital. Office—630 Fifth Avenue, New York 20, N. Y.
(letter of notification) 10,000 shares ($1 par)
To be sold by Francis I. LeVeque, Dear¬
Underwriter—Bradley Higbie & Co., Detroit.
born.
in
CHRONICLE
Aug. 19 (letter of notification) 300,000 share of common
stock (par 10 cents). Price—$1 per share.
Underwriter
July 21
common
Now
INDICATES
+
•
FINANCIAL
&
Under¬
Price—
$1 per share. Proceeds — To purchase additional plant
Lynch, Pierce, Fenner & Beane and White, Weld & Co.
7 (jointly); Blyth & Co., Inc. and Kidder, Peabod.y & Co. ■facilities, tools, dies, jigs, etc.; the balance for working
capital.
■
;
:
•,:
(jointly); Lehman Brothers and Stone & Webster Se¬
curities Corp. (jointly); First Boston Corp. Proceeds—To
Kenilind Oil & Gas Co., Inc., New York
'•
Colonial Acceptance Corp.
be used to repay $13,800,000 of 2V2% to 3% notes, due
Aug. 3 (letter of notification) 600,000 shares of common
stock (par 100).
Aug. 15 (letter of notification) 60,000 shares of convert¬
1950-56, and $1,000,000 of 2% notes due 1950, and the
Price—500 per share.
Drill test well,
balance for the company's construction program.
ible cumulative class A common stock (convertible into
etc.
No underwriter at present.
Names to be furnished
common
writers
share-for-share).
—
Sills,
Price—$5 per share.
Under¬
Straus & Blosser;
Fairman & Harris;
Proceeds—
The Marshall Co.
-To increase net worth and working capital.
Mason, Moran & Co.; and
Consolidated Caribou Silver Mines,
York.
—Gazette
filed
Proceeds—To develop
mining properties.
porarily postponed.
W
.
,
,
Florida
'
,,
stock and 270,000 shares (25c par) common stock.
Offering—135,000 shares of common will be offered for
subscription by holders on the basis of one-for-two
.
16 (letter of notification) 200 shares of common
stock (par $1), at $13.871/2 per share, to be sold to Armand F. Dufresne, Pasadena, who will sell them to Hop¬
&
unsubscribed shares of the new common.
Offering price of class A $5. Proceeds—To complete
an ocean
ferry, to finance dock and terminal facilities,
to pay current obligations,
and to provide working
shares
kins, Harbach & Co., Los Angeles, for public offering at
the market price. Proceeds—For working capital. Office
Calif. -
I
Consolidated Gas Utilities Corp.,
/
??■' Oklahoma City, Okla.
7 Aug. 11 (letter of notification) 1,600 shares of common
stock to be offered at $11.75 per share for account of
the owner, Norman Hirschfield, President.
Underwriter
—P. F. Fox & Co., New York, N. Y.
Co.
7
Gulf Public Service Co.,
(par $4).
Price—$11 per share.
Underwriter—
Rauscher, Pierce & Co., Inc., Dallas, Texas. Proceeds—
stock
-
To improve
Litho
Aug.
-
3
(letter
class
A
Hancock
Aug.
15
common
Philadelphia
San Francisco
Private Wires to all
offices
Chicago
Cleveland
&
.
Co., New 'York, N. Y.
for working capital.
and
Denver,
Proceeds—For drilling wells
Office—229 Cooper Building,
Colo.
Louisville Gas &
(Ky.)
Electric Co.
Beane, Union Securities Corp. and
White, Weld & Co.
(jointly); Lehman Brothers and Blyth & Co., Inc.
(jointly); Otis & Co.; Glore, Forgan & Co. and W. C.
(Continued on page 36)
Laboratories,
Co.
of California
(letter of notification) 160 shares of class A
stock.
Underwriter — Akin-Lambert Co., Los
Proceeds—To pay off fractional stock¬
holders in cash for stock
dividend issued.
otrt
te|p||f!7l!l||i||
X
New
/
—
BROKERS
„d
rflbcrS
oj
thr
$10(1
nieS
o^
go
C«icK'
JWAtlRS
Ltd., Honolulu
filed 150,000 shares of series E cumulative ($20
par) preferred and 50:00C shares of ($20 par) common.
Offering—Preferred will be offered to preferred holders
%
hU
Hawaiian Electric Co.,
June 21
(9/12)
Aug. 4 filed 250,000 shares (no par) common stock, to be
sold by Standard Gas & Electric Co.
UnderwritersNames to be determined through competitive bidding.
Probable bidders:
Merrill Lynch, Pierce, Fenner &
of
Oil
Angeles, Calif.
Pittsburgh
•
Denver, Colo.
common
•
Boston
7 7'7,.
Corp.,
properties, etc.
Inc., Wash., D. C.
notification) 2,950 shares ($5 par)
stock; 6,950 shares ($5 par) class B
non-convertible
(preferred at 5% accumulative) and
1,749 shares of class A "voting stock."
The latter is to
be offered by Sidney S. Haimes, President and Treas¬
urer,
Price, all classes, $5 a share.
Underwriter—Ed¬
ward A. Jacobs, Washington, D. C. For additional equip¬
ment and working capital.
Haimes
New York
Inc., Lafayette, La.
Aug. 12 (letter of notification) 27,000 shares of common
Paupac
Lexa Oil Corp.,
plus
capital.
.
Lake
•
at
share. Underwriters—Names by amendment,
include John J. Bergen & Co. and A. M. Kidder
Underwriters will buy the remaining 135,000
and may
Office, 400 Madison
engaged.
Aug. 19 (letter of notification) 1,200,000 shares (par onecent). Price—25 cents per share. Underwriter—Tellier
25 cents per
,.*Aug.
/—620 N. Lake Ave., Pasadena,
Co., JacksonviHe,
•■;.■/:
par)
Tem¬
are
Philadelphia, Pa.
Aug. 16 (letter of notification) 500 shares of capital stock
(no par value). Price—$100 per share. Underwriter—
None.
Proceeds—For working capital, payment of indebtedness and development of Lake Paupac property.
Office—1035 Land Little Bldg., Philadelphia 10, Pa.
•
May 31 filed 620,000 shares of class A participating ($1
■
underwriters
Avenue, New York.
Building, Reno, Nev.
Gulf Atlantic Transportation
Engineering Corp., Pasadena
Consolidated
when
Mining Corp., Reno, Nev.
Gold Crown
—
Inc.
376,250 shares (no par) common stock.
Price—$2.50 per share. An additional 50,000 shares will
be sold to the underwriter at $1 per share for invest¬
ment.
Underwriter—William L. Burton & Co., New
March 30
•
Aug. 19 (letter of notification) 150,000 shares of common
stock.
Price
At par ($1 per share).
Underwriter —
None. Proceeds—For developing gold properties. Office
UNDERWRITERS
I
,to*
Bos'
7>
I ■
COMMERCIAL
THE
(776)
36
notes
and
make
additional
Trion, Inc.
June
ferred
1943
Preferred
—
Chicago Rock Island & Pacific RR.,
Noon (CDT)
—Equip.
Trust Ctfs.
>
Co.__
Service
Gas
Harbor Belt RR.——Equip.
Indiana
Oklahoma
*-•
Corp..:_A——Bonds
September 21, 1949
New
/AAAAyAAA
October
4,
1949
Palestine
October 10,
1949
June
October
11, 1949
Arkansas Power & Light Co._
October
Texas & Pacific Ry
Bonds
—_
29
Cotton
filed
•
Mills, Ltd., Tel Aviv,
13, 1949
Equip. Trust Ctfs.
Price
Proceeds—To
—
At
par
share.
$500 per
12
construct
tanks and fixtures at
Co.
be-
(jointly).
Proceed-—To
toward Standard's corporate indebtedness.
MacFarlane's
July
(letter
18
common
of
stock.
Candies,
applied
9,545 shares ($1 par)
share. Underwriter—Ste¬
•
Corp.,
Toledo,
8,000 shares
(no
McBee
12
Ohio
par) common, of which
Co., Athens, Ohio
of notification)
(letter
series first preferred stock.
2,000 'shares
Price—At
par
of
5Y2%
($100 each).
Underwriter—Roy E. Hawk & Co., Athens.
working capital.
/'S' '
Proceeds—
Meliin's Food Co. of North America, Boston *
Aug. 1 (letter of notification) 10,000 shares of 5% cumu¬
lative preferred stock ($10 par). Price,
par, with a mini¬
mum purchase of five shares.
For working capital. No
Office, 41 Central Wharf, Boston, Mass.
,
Memorial Community Hospital, Upland, Calif.
V
(letter of notification) $150,000 of 4% 25-year
sinking fund debentures.
To construct a new hospital.
Aug.. 4
No
N.
Midway Enterpriser., Inc., San Francisco, Calif.
Aug. 17 (letter of notification) 168,500 shares of capital
stock, at $1 per share. Underwriter—None. Proceeds—
Office—1064
Mills
cisco, Calif;'
Tucker's
Nov. 26 filed 200,000 shqres of
'A.'
/
'...
lic Utilities
19
filed
Texas
Sherman,
common
-
stock (par $2.50)
Film Corp., N. Y. City
shares of no par value common
Price—at $100 per share.
Underwriter—None.
Proceeds—To finance production of motion pictures by
others and to provide materials and talent services.
Business—To boost the supply of films available for
the exhibitors who are expected to
•
($8
holders
at
common
Offering—To
rate
of
one
new
shares of beneficial inter¬
be
offered
share
present
for
each
Offering price to be filed by amendment.
None.
Proceeds—To
pay
$1,125,000
10
stock¬
held.
Underwriter
of
short-term
&
Electric Co.
Corp. to GPU common
Rochester
one
stock
Price
•
held
-
Proceeds—To qualify
in any state.
:
—
By
10
on
Regis Paper Co., New York
filed
860,000 shares ($5 par) common stock.
Offered—Offered by Eastern States Corp., Baltimore,
owner
of 1,000,000 shares, in exchange for outstanding
securities of Eastern States. For each of the 40,000 shares
of Eastern States series A $7 dividend preferred stock,
''A A A -A;
\
Telephone Co.,
Ark.
16
A
.
;
Western Oil Fields,
indebtedness for equipA
Inc., Denver, Colo.
May 19 (letter of notification) 800,000 shares of common
capital. 1 Price, 250 per share.
Underwriter—John G.
Perry & Co., Denver, Colo.
For working capital
drilling of wells.
-" :/a;
and
,
•
Wisconsin
Public
Service
Corp.
(9/20)
■;/
bonds, series due
Sept. 1, 1979. Underwriters—Names to be determined
by
competitive
bidding.
Probable bidders: Halsey,
Stuart & Co. Inc.; The First Boston Corp.; Blyth & Co.,
Inc.; Goldman, Sachs & Co. and Salomon EVos. &
Hutzler (jointly); Glore, Forgan & Co. and Central Re¬
public Co. (jointly); Shields & Co.; Kidder,. Peabody
& Co.; Harris, Hall & Co. (Inc.); Harriman Ripley &
Co., Inc. and White, Weld & Co. (jointly); Merrill
Lynch, Pierce, Fenner & Beane.
Proceeds—To repay
Aug. 19 filed $4,000,000 first mortgage
bank
loans
and
the
for
bonds
Regis and $4.79 is offered; for each of the
chase
of
60,000 shares of Eastern States series B $6 dividend pre¬
ferred, 8% shares and $4.43 is offered.
Room
1100, 231
9 shares of St.
the company to sell life in¬
Rock, Ark. Proceeds—To pay
ment and supplies.
1
Rocky Mountain Kennel Club, Colorado Springs
Aug. 15 (letter of notification.) 966 shares of preferred
stock (par $100) and 2,950 shares of common stock (no
par value).
Price—Preferred at par and common at $1
per
share.
Underwriter—None.
Proceeds—For
club
house, grand stand, kennels, race track, equipment and
working capital.
.!
8
Reno
(letter of notification) 1,000 shares of 6% cu-mulative non-participating preferred stock
(par $100
per share).
Underwriter—Lewis W. Cherry Co., Little
shares of
Sept. 8. Rights to expire on Sept.
amendment.
Dealer Managers — First
Arkansas
Russellville
stockholders at the
Gas share for each
.
filed
Western
Aug.
Corp., Wertheim & Co., Lehman Brothers, and
Merrill Lynch, Pierce, Fenner & Beane.
Proceeds—Ex¬
St.
England Gas & Electric Association,
par).
Gas
30
surance
Boston
Aug.
Cambridge, Mass.
est
ment.
*
-
buy this stock.
Aug. 10 filed 124 601
Middle
and
11,975 shares ($10 par) common stock.
Price—$40 each. Underwriter—To be named by amend¬
March
•
stock.
New
Y.)
pected to be used by GPU to retire about $32,000,000 of
5% bonds of Associated Electric Co., a GPU subsidiary.
Exhibitors
100,000
of
rate
GPU
corporate purposes..
National
Co.
Western American Life Insurance Co.,
835,000 shares of no par value common
Offering—To be offered by parent, General Pub¬
stock.
80,000 will be sold by the company and 120,000
shares by certain stockholders
Underwriter—Rauscher,
Pierce & Co., Inc., Dallas. Texas. Proceeds—For
genera)
•
Gas
investment.
Proceeds—For
15 filed
Aug.
30.
lno,f
(N.
Rochester
••
of which
Aug.
Pittsburgh
.
diversified open-end man¬
a
Foods,
&
Utah Power & Light Co.
July 28 filed 148,155 shares of common stock (no par).
Offering—To be offered for subscription by stockholders
of record Sept. 13 at rate of one new for each eight
shares held. Unsubscribed shares will be sold at compe¬
To be used for equipment and additional
working capital in connection with the company's air
cruise service. Expected in September.
/
agement investment company.
Mrs.
100,000 shares of capital
cents).
Proceeds—For additional
stock, of which 50,000 shares offered by com¬
and 4,000 shares by George B. Wilkinson, Charlotte,
C.
Underwriter—Marx & Co., New York.
Price—
Building, San Fran¬
AAA
Business—Company is
Electric
Consolidated
Corp. will sell 120,000 shares and 34,000 shares, re¬
spectively.
;
.v A
$5 per share.
•
Minnesota Fu^d,
Inc., Minneapolis, Minn.
'
Aug. 22 filed 1.000,000 shares of common stock (one-cent
par value each).
Underwriter—Minneapolis Associates,
Inc.
A<
West
common
underwriter.
expansion.
Co., Boston. For development of mining properties.
pany
©
For
vA
Reserve
-
For
underwriter.
J.
&
titive bidding, Probable bidders: Harriman, Ripley &
Co.; W. C. Langley & Co. and Glore, Forgan & Co. (joint¬
employees and those closely affiliated with
ly); Kidder, Peabody & Co. and Merrill Lynch, Pierce,
the business affairs of company and Pittsburgh-Des
Fenner & Beane (jointly); Blyth & Co., Inc. Proceeds
Moines Steel Co., a unit consisting of one share of Pitts¬
,
burgh-Des Moines Co. common stock, without par value, ;—For construction purposes.
and one share of- beneficial interest in the steel firm's
'Utah Power & Light Co.
(10/10) '
' ;
Employees' Trust Fund.
Price —Will probably range ; July 28 filed $3,000,000 first mortgage bonds, due 1979.
from $70 to $80 per unit. Underwriter—None. . Proceeds
Underwriters—Competitive bidding. Probable bidders:
—For working capital and plant expansion. Offering—•;
Halsey, Stuart & Co. Inc.; The First Boston Corp.; SaloExpected Sept. 1, 1949 and continuously thereafter, but y mon Bros. & Hutzler; Lehman Brothers and Bear,
not to
exceed 3,000 units annually.
Stearns & Co. (jointly); Kidder, Peabody & Co.; Equi¬
Office—Neville
table Securities Corp.; Union Securities Corp. and Smith,
Island, Pittsburgh 25, Pa.
Barney & Co. (jointly).' Proceeds—For construction
Power Petroleum Ltd., Toronto Canada
purposes.
»■>.
AAA;•
-A i
April 25 filed 1,150,000 shares ($1 par) common of which
;
Van Camp Sea Food Co., Inc., Los Angeles
A ;
1,000,000 on behalf of company and 150,000 by New York
Aug. 22 filed 125,000 shares of common stock (par $2).
Co., Ltd..
Price—50 cents per share.
Underwriters—
Offering—Of the total, 25,000 shares are to be sold by
S. G. Cranwell & Co., New York. Proceeds—For admin¬
the company to stockholders at the rate of one new share
istration
expenses
and drilling.
Statement ; effective
a for
each 16 now held, and 100,000 shares are to be of¬
June 27.
AA?AvA
fered by five stockholders. Expected in September. .Un¬
Renaissance Films Distribution, Inc.,
derwriters—White, Weld & Co., New York, and Wil¬
Montreal, Que.
liam R. Staats Co., Los Angeles.
Proceeds—From sale
Oct. 29 filed 40,000 shares (par $25) 5% cumulative
by company to be added to general funds,
AA /v;,;
convertible class B preferred stock and 10,000 shares of
Victor Valley Housing Corp., Victorville, Calif.
C stock (no par). Underwriting—None. Offering—Class
1 Aug. 1 (letter of notification) 100,000 shares ;($1 par)
B preferred will be offered at $25 per share with one
common stock.
Price, par. No underwriter. For organi¬
share of class C given as a bonus with each 4 shares of
zational work, architects and engineers' fees on new
class B purchased.; Proceeds—To pay balance of current
housing project.
liabilities and working capital.
•
Wellington Fund, Inc.
Resort Airlines, Inc., Southern Pines, N. C.
Aug. 15 filed 2.000,000 shares of common stock (par $1).
Price—At market.
Underwriter—W. L. Morgan & Co.
July 27 (letter of notification) 54,000 shares ($1 par)
only about 2,614 shares will be offered publicly at $100
per share.
No underwriter. For general working cap¬
ital.
SEC held hearing June 6 to determine whether;
a
stop order should be issued suspending the effective¬
ness of the registration statement.
>
Aug.
Samuel
Draper
of stock to
common stock (no par value).
Price—At
unit of five shares of preferred stock and one
12 filed
give the Paris Bath
Hoge Building, Seat¬
Pittsburgh-Des Moines Co.,
—
Underwriters—SEC has granted exemption from com¬
petitive bidding.
An investment banking group man¬
aged by Kidder, Peabody & Co.; Merrill Lynch, Pierce,
Fenner & Beane, and Paine, Webber, Jackson & Curtis,
may be underwriters. Proceeds—Will go to selling stock¬
—
bath
Underwriter—Newman
working capital. Of¬
W. Cucharras Street, Colorado Springs, Colo.
(50
and
Underwriter
Upper Peninsula Power Co.
?,
Sept. 28 filed 154,000 shares of common stock (par $9).
Inc., Colorado Springs,
(letter of notification)
Greenberg
Aug. 22 (letter of notification) from 1.000 to 3,COO units
shares of
Maumee Oil
&
'
Price—Par
fice—5
share of common stock.
Underwriters—Mohawk Valley
Investing Co., Inc., Utica, N. Y., and Security & Bond Co.,
Lexington, Ky. Proceeds—To erect a chemical plant and
for general corporate purposes. Office — 337 Paterion
Plank Road, East Rutherford, N. J.
.
Plastics,
'
Corp., Chicago
July 27 (letter of notification) 270,000 shares of common
stock. Price—$1 each. Underwriter—Edward W. Ackley
holders.
Peak
stock.
and Co.
•
Matheson Co., Inc., East Rutherford, N. J.
Aug. 16 (letter of notification) 3,000 shares of non-con¬
vertible 6% cumulative preferred stock (par $20) and
May
United Minerals
tracks to
Aug. 4
Slayton & Co., Inc., St. Louis.
per
horses.
Colorado
•
Managed Funds, Inc., Ct. Louis, Mo.
Aug. 17 filed 1,COO,OCO shares of one-cent par value capi¬
tal stock.
Price—At market.
Principal Underwriter—
$100
to
Pikes
phenson, Leydecker & Co., Oakland, Canf.
600
Office—802
Calif.
Oakland,
per
Hoffman, President; David
Hoffman,
Vice-Presidents.
Kramer, Inc., Chicago.
tle, Wash.
notification)
Price—$9
race
treatment
(Continued from page 35)
steel
AA*'"A
Aug. 5 (letter of notification) 630 shares ($5 par) com¬
mon
stock.
Price—$100 each. .To be sold by Sol A.
Israel
Underwriter
stainless
per
A: 2413 Farragut Avenue Building Corp., Chicago
Baths, Inc., Seattle, Wash.
(letter of notification) 246 shares of common
11
Aug.
($5
par
loans, etc., and for additional working capital.
Paris
None.
&
—At
300,000
stock.
Langley
-
ordinary (common) shares, one
(Israeli) pound par value. Underwriter—The First Guar¬
dian Securities Corp., New York. Price—$5 each. Pro¬
ceeds—To expand weaving facilities.
Bonds
Utah Power & Light Co.—
on or befdre Aug. 1, 1959). Price
share). Underwriter—Graham & Co.,
Pittsburgh, Pa., and New York. Purpose—To pay bank
stock, share for share,
(9/12)
corporate indebtedness.
Chicago & St. Louis RR._Equip. Tr. Ctfs.
New York,
No underwriting.
Electric Co.
Brothers and Blyth & Co., Inc.; Otis & Co.; Smith, Barnew & Co.
Proceeds—To be applied toward Standard's
Equip. Trust Ctfs.
Central RR
York
&
.
Mines
•
Trion, Inc., McKees Rocks, Pa. (8/26) <
Aug. 19 (letter of notification) 40,000 shares of 5% cu-'
mulative
preferred
stock
(convertible into common
Aug. 4 filed 200,000 shares ($20 par) common stock, to
be sold by Standard Gas & Electric Co. Underwriters—
Names to be determined through competitive bidding.
Probable
bidders:
Merrill Lynch,
Pierce, Fenner
Beane and The First Boston Corp. (jointly); Lehman
Trust Ctfs.
September 20, 1949
Wisconsin Public Service
Gas
,■
Ltd., Toronto, Canada ■>A.A
June 7 filed 375,000 shares of common stock.; Price—fi t
per share (U. S. funds). Underwriting—None. Proceeds;
—Funds will be applied to the purchase of equipment,
road construction, exploration and development. A'A'A
.
ferred plus $25 in cash.
Bonds
,
September 14, 1949
r
.
Sudore Gold
AA-AAA'A"'A.: A '■A'A:- ">■
one
September 13, 1949
".'A"
Mines
Bell
Co., Denver, Coio.
July 27 (letter of notification) 20,000 shares of capital
stock to be offered by Edward G. O'Brien and 20,000 by
Eugene J. Nord. Price—$1.10 each. Underwriter—E. W.
& R. C. Miller & Co., Philadelphia.. f
v A/i
Steamship Lines is offering in exchange for its own
preferred (5% non-cumulative $100 par) at the rate of
Atlantic share for three shares of Cuba Mail pre¬
Co.._———Common
v.•
.
V; A'A' AAvA
New York & Cuba Mail Steamship, New York A;
June 17 filed 190,125 shares of 5.6% cumulative preferred
($25 par) stock, which Atlantic Gulf and West Indies
September 12, 1949;: ;
Louisville Gas & Electric Co. (Ky.)___A-Common
To develop and oper711 Hutton Building,
Office,
mining
Silver
for, construction of additions and betterments sub¬
Sale deferred until later this
year.
shares.
properties.
Spokane, Wash.
sequent to April 30, 1949,
September 8, 1949
Oklahoma Gas & Electric
ate
,
payment of the cost of, or in
made
common
Alvin William Mackey, Spokane.
Proceeds—Will be applied to the
reimbursement of payments
Co.; Lehman Brothers.
A/vA
Common
August 29, 1949
Automatic Coffee Service, Inc
assessable
through competitive bidding. Probable bidders: Kidder,
Peabody & Co.; Smith, Barney & Co.; W. C. Langley &
—...Common
Spokane, Wash.
<
400,000 (250 par) non¬
Price, par.
Underwriter—
Mining Co.,
(letter of notification)
Aug. 2
Jersey Power & Light Co.
20,000 shares ($100 par) cumulative pre¬
stock.
Underwriters—Names to be determined
Madre
Sierra
investments
stock
"
filed
9
Thursday, August 25, 1949
CHRONICLE
New
NEW ISSUE CALENDAR
August 26,
Inc
common
A A'
in subsidiaries.
Convertible Television,
FINANCIAL
&
construction. Bids—Bids for pur¬
will be received by company at
So. La Salle Street, Chicago, 111., some
time in September.
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4832 ;
170
Volume
(777)
37
"
•
.
T-.
Gull
States
•Aug. 23 reported
Utilities
Co.
company may
Missouri
issue within the next few
$10,000,000 "new money" first mortgage bonds
(instead of between $6,000,000 and $7,000,000 previously
Co.
Power
Alabama
July 28 reported company may sell $80,000,000 of bonds
to refund its first mortgage 3^s, due 1972.
Investment
reported as preparing to compete for a
possible new issue include: Blyth & Co., Inc.; The First
Boston Corp.; Halsey, Stuart & Co. Inc.; Morgan Stanley
banking
& Co.
groups
V,.'.,//.
v
;
American
Gas
& Electric Co.
Oct.
by company's stockholders, in
1, for subscription
share for each nine held.
new
one
Appalachian Electric Power Co.
July 23 reported company expects to sell, probably
after
$30,000,000 in new first mortgage
bonds.
Probable bidders include: Kuhn, Loeb & Co. and
Union Securities Corp. (jointly); Harriman JRipley &
the turn of the year;
Co.
Inc.; The First Boston Corp.; Halsey Stuart &
Co.
Inc.
V-:"
;■
&
Power
Arkansas
■
Light
•
■
Co.
(10/11)
•
i
/
plans sale of $8,700,000 bonds.;
Probable bidders: Halsey, Stuart & Co. Inc.; The First
Boston Corp.; White, Weld & Co.; Lehman Brothers and
Stone & Webster Securities Corp. (jointly); Equitable
•
Central
Hudson Gas &
Electric Corp.
SEC authorization to issue and sell
$6,000,000 of convertible debentures. Probable bidders:
Union Securities Corp, Salomon Bros. & Hutzler and
Aug.
11 requested
(jointly);
First Boston Corp.;
Drexel & Co.; White Weld & Co.;
W. C. Langley & Co.;
Spencer
Trask
&
Co.
Harriman, Ripley & Co.; Shields & Co. Expected early
in November.
Proceeds—For retirement of short-term
loans incurred for plant
Aug.
construction.
Power Co.
Central Maine
9 reported company expects to raise construction
sale of additional common stock.
funds this Fall through
Expectations are that the number of shares to be in¬
volved in the offering will range between 150,000 and
300,000. Probable underwriters: The First Boston Corp.;
Blyth & Co. Inc. and Kidder, Peabody & Co. (jointly);
Harriman, Ripley & Co.
Rock Island & Pacific RR. (9/8)
will receive bids up to noon (CDT) on
Sept. 8, in Room 1136, La Salle Street Station, Chicago,
111., for its proposed offering of $3,552,000 equipment
trust certificates, series F, to be dated Oct. 1, 1949, and
mature in 24 equal semi-annual instalments of $148,000
each, beginning April 1, 1950, and ending Oct. 1, 1961.
Probable bidders—Halsey, Stuart & Co. Inc.; Salomon
Bros. & Hutzler; Harris, Hall & Co. (Inc.); Harriman
Hipley & Co. and Lehman Brothers (jointly).
No bid
e
The
Chicago,
company
for less than 99 will be
Cuba,
considered.
Republic of
,
Aug. 4 Havana official circles confirmed reports that the
Cuban Government is negotiating for the sale of approx¬
vyas
of bonds in the United States to
comprehensive program of public works. It
stated that $40,000,000 of the loan will be obtained
•this
year,
imately $100,000,000
finance
a
$30,000,000 in 1950 and $30 000,000
in 1951.
government bond issue of
with option to subscribe to $32,500,000 in
•each of two succeeding years.
^re
willing to underwrite a
$35,000,000
El Paso
Natural Gas Co.
Sept. 12 stockholders will vote on authorizing a new
issue of 200,000 shares of second preferred stock (no par)
issuable in series. It is understood that 65,000 shares of
the stock will be issued in the first series.
Of these,
$0,000 will be offered to holders of $5,000,000 of the
•company's convertible debentures. The remaining 15,000
shares would be sold for about $100 a share. Traditional
underwriters: White,
Securities Corp.
Weld & Co. and Stone & Webster
//V.J v,..-
^V-,;v:
Utilities
States
27
Co.
&
.
r
•
.
firms.
Proceeds
will
be
used
t,
to
finance
Hartford
New
Electric
The
000
Harbor
Indiana
Belt
RR.
RR.
(9/21)
York, Chicago & St.
Louis RR.
(10/4)
J
Co.
Inc.; Salomon Bros. & Hutzler; Harris, Hall & Co.
Harriman Ripley,& Co., and Lehman Brothers
(jointly)..
,
•
•
(Inc.):
.
(9/14)
®
North
Stock
Sept. 15 from 1950 to 1964, inclusive. Probable bidders:
Halsey, Stuart & Co. Inc.; Salomon Bros. & Hutzler;
Harris, Hall & Co. (Inc.); Harriman, Ripley & Co., and
Lerman Brothers (jointly).
'
r;
>•,,
Indianapolis Power & Light Co.
Central
Aug. 23 reported the company expects to sell at comi
petitive bidding $3,360,000 equipment trust certificates
early in October. Probable bidders—Halsey, Stuart &
company will receive bids on Sept. 14 for $2,970,equipment trust certificates, to mature annually on
•
„
Butte
Mining Co.
unsubscribed
for
J
.
stockholders
by
under
stock
purchase warrants which company plans to issue, will
be publicly offered at a price not below
$1 per share;
Stockholders are to receive rights to
purchase two new
shares for each share held at par.
On Aug. 29 stockholders will also vote
on granting the
authority to mortgage any or all4* of the
of the company for not less than $1,000,000,
than $3,000,000.
management
v.:',,
property
be in market in Sep¬
nor more
issue, the proceeds to
refund
outstanding 3V4S.
Probable bidders include:
•
Northern Indiana Public Service Co.
Halsey, Stuart & Co. Inc.; Lehman Brothers; Goldman.
Sachs & Co. and The First Boston Corp. (jointly); Blyth | Aug. 15 it was announced that part of the $12,237,914
still needed to complete the company's construction
pro¬
& Co., Inc.; W. C. Langley & Co. and White, Weld & Co.
gram will be obtained through the sale of $12,000,000 of
(jointly).1 j
V
•
' ''V
f'
' additional securities.
Company believes that a substan-*
Iowa-Illinois Gas & Electric Co.
Y tial part if not all of such funds will be raised
by the
Aug. 8 reported company may be in market in Septem¬
issuance and sale of bonds, notes, or other securities hav¬
ber-October with $10,000,000 bonds.
Probable bidders:
ing priority over the common stock.
Halsey, Stuart & Co. Inc.; Blyth & Co., Inc.; Glore, ForPacific Power & Light Co.
gan & Co.; Harris, Hall & Co. (Inc.); Lehman Brothers;
Harriman Ripley & Co., Union Securities Corp.; and
June 28 company contemplates the issuance
by Nov. 15,
White,. Weld & Co. (jointly); Equitable Securities Corp.;
next, of approximately $7,000,000 additional first mort¬
The First Boston Corp.
gage bonds to retire outstanding notes and to finance
July 23
tember
reported
with
a
company
may
$32,000,000 bond
.
Iowa
Aug. 4
Power
reported
&
its
Light Co.
company
with $7,500,000 first mortgage bonds and $3,000,000
stock, the latter to be sold to United Light &
Rys. Co. (parent).
Bidders for bonds may include
Halsey, Stuart & Co. Inc.; Salomon Bros. & Hutzler;
Kidder, Peabody & Co,f Lehman Brothers; Blyth & Co.,
Inc.; W. C. Langley & Co., and Union Securities Corp.
(jointly); The First Boston Corp.; Glore, Forgan & Co.,
and A. G. Becker & Co. (jointly); Harriman Ripley &
common
Co.
•
& Johnson
Johnson
.
.
- •
<
construction
program.Probable bidders:
Halsey,
Inc.; Blyth & Co., Inc.; Kidder, Peabody &
Co.; W. C. Langley & Co.; and The First Boston Corp.
(jointly); Union Securities Corp., Equitable Securities
Corp. and Salomon Bros. & Hutzler (jointly).
v'
Stuart & Co.
be in the market this
may
year
f
■■V
•
Texas
&
,
"y 1
v.
Pacific
•
■'
Ry.
(10/13-14)
v
•
■
Aug. 23 reported that company is planning issuance and
sale of $2,130,000 equipment trust
certificates, series G.
Probable
bidders: Halsey, Stuart & Co. Inc.; R. W.
Pressprich & Co.; Kidder, Peabody & Co.; Harriman
Ripley & Co., Inc. and Lehman Brothers (jointly); Salo¬
mon
Sept. 7 stockholders will vote on increasing the author¬
ized
common
stock by an additional 200,000 shares,
&
Bros.
Union
Hutzler; Harris, Hall & Co.
Electric
Co.
(Inc.).
of Missouri
Aug. 8 reported company will be in market before year's
$12.50 par value.
with a bond issue of $15,000,000. Probable bidders:
Halsey, Stuart & Co. Inc.; The First Boston Corp.; Kuhn,
Loeb & Co. and Harriman Ripley & Co.
(jointly); Blyth
& Co., Inc.; Lehman Brothers,
Dillon, Read & Co. Inc.;
White, Weld & Co. and Shields & Co. (jointly).
end
Kansas
City Power & Light Co.
Aug. 8 reported company probably will be in market later
this year or early in 1950 with $12,000,000 bonds. Prob¬
able bidders: Halsey, Stuart & Co. Inc.; The First Boston
Glore,'Forgan? & Co. and W. C. Langley & Co.
(jointly); Lehman Brothers and Bear, Stearns & Co.
(jointly); Equitable Securities Corp.; Kuhn, Loeb & Co.;
Salomon Bros. & Hutzler and Union Securities Corp.
Corp.;
(jointly); Shields & Co. and
(jointly); Smith, Barney & Co.
Power
Kansas
&
White,
Weld
&
•
Washington Water Power Co.
"
Company contemplates permanent financing in the year
1950. Net proceeds are to be used to
repay bank loans.
:
Co.
West
bidders:
The
First
Light Co.
Boston
Corp.; Halsey,' Stuart & Co.
Inc.; Union Securities Corp. and Merrill Lynch, Pierce,
Fenner & Beane
(jointly); Harriman Ripley & Co.;
White, Weld & Co.; Blyth & Co., Inc.; Glore, Forgan &
Co.; Equitable Securities Corp.
Milwaukee
Gas
Light Co.
Aug. 9 reported contemplating financing, late this year
or early in 1950, may amount to approximately $23,000,000.
Proceeds to be used to refund $13,000,000 first
mortgage 4y2% bonds due 1967 and balance for working
capital.
Probable bidders—Halsey, Stuart & Co. Inc.;
Dillon, Read & Co. Inc.; Glore, Forgan & Co., and Leh¬
man Brothers
(jointly): Kidder, Peabody & Co.; Harri¬
man
Ripley & Co.; Smith, Barney & Co. and Blyth & Co.,
Inc.
(jointly); Kuhn, Loeb & Co.
agreed
on
Nothing definite has
at present.
Encourage Investments Abroad
very
great importance to the stim¬
of the flow
of private
ulation
capital.
This
,'
:'/
;'w
government can also help
,
Penn
Electric
..•"-"•■'■i
Co.
Aug. 9 directors authorized filing with SEC a refinancing
plan, which will provide for issuance of $31,000,000 sink-
Aug. 8 reported company possibly will raise additional
funds this Fall through sale of $5,000,000 bonds. Probable
Foreign capital is not going to be
(Continued from page 7)
ceive higher priority than the re¬ invested freely and productively
mittance of the income from their in countries where it will be in
Investments.
jeopardy. Accordingly, some ac¬
Still another deterrent to the ceptable means of compensating
flow of American capital abroad those whose property is expropri¬
must
be
provided if the
Is the tendency of some countries ated
to nationalize some of their indus¬ underdeveloped countries are to
tries, including those belonging to obtain the capital which is re¬
foreign
investors.
The
United
states Government considers that
the right to nationalize property
within any country's borders is in¬
herent in sovereignty but that the
country resorting to the exercise
Of that right becomes subject to
an
equally stroqg obligation to
make
satisfactory
compensation.
York
Brothers.
a
Light Co.
Aug. 31 stockholders will vote on creating an authorized
issue of 300,000 preferred shares
(par $50). Company
proposes to register with the SEC 160,000 shares. Pro¬
ceeds will be used to finance company's construction
program.
Probable underwriter: Putnam & Co.
•
small
July 30 stated that company is expected to sell at conw
petitive bidding about Sept. 21 an issue of $9,120 000
equipment trust certificates. Probable bidders: Halsey,
Stuart & Co. Inc.; Salomon Bros. &
Hutzler; The First
Boston
Corp.; Harriman Ripley & Co. and Lehman
,
Cd/K^-iV-v-./
''
*
'
rencies,
A Program to
New
(jointly); Stone
/
stockholders
insurance
been
..
Weld
portion of the 1949 construction program.
Cut of the first instalment of the loan, Cuba would repay
$6,000,000 of the $25,000,000 loam obtained from the Ex.port-Import Bank in 1941. The First Boston Corp. was
mentioned in reports as a principal in the negotiations.
Press dispatches from Havana, Aug. 9, however, stated
that Cuban banks have notified the government that they
White
and
will vote on issuance of 60,000
shares of a new series of preferred stock (par $100).
It is planned to place this issue privately with several
June 29 reported company
Securities Corp.
Beane
Gulf
Sept.
July 27 reported four investment banking groups are
forming syndicates to submit competitive proposals for
the underwriting of company's proposed
offering of
500,000 additional common shares.
The groups are:
Union Securities Corp.; The First Boston Corp.; Dillon,
Head & Co. Inc.; Blyth & Co., Inc. and Goldman, Sachs
& Co. (jointly).
The shares will first be offered, about
the ratio of
Probable bidders: Halsey, Stuart & Co. Inc.;
Bros. & Hutzler and Union Securities Corp.
(jointly); Lehman Brothers; Merrill Lynch, Pierce, Fen&
a
Probable bidders—Halsey
Stuart & Co. Inc.; First Boston Corp.; Blyth & Co. Inc;
Glore, Forgan & Co.; White, Weld & Co., and Shields
& Co. (jointly).
•
v.
Salomon
& Webster Securities Corp.
Light Co.
issue of bonds later this year.
;
reported).
ner
Power &
Aug. 9 reported the company will probably sell
months
written..
Probable bidders for bonds: Halsey, Stuart
Inc.; The First Boston Corp. and W. C. Langley 8c Co.,
(jointly); Lehman Brothers and Goldman, Sachs & Co.
■(jointly)..
v ■
v.
•
-...vv:.:_ >
Co.
Westchester
Aug. 15 it
$25,000,000
Lighting Co. ' vy{:-Vv';'/'v/reported that company may refund its;
general mortgage 3V2s, due July 1, 1967.r
was
Probable
Bidders—Morgan Stanley & Co.; Halsey, Stuart
Co., Inc.; Merrill Lynch, Pierce, Fenner & Beane and
White, Weld & Co. (jointly); Stone & Webster Securities
Corp. and Lehman Brothers (jointly); First Boston Corp.
/Refunding operation, however, not being considered by
&
company
other
at the nresent time.
amounts
at, this
time
the
risks
ef¬
eign
investment, " into
United fectiveness of guaranties in stimu¬
States dollars; (2) the expropria¬ lating investments, or the possi-;
tion of the investors' property by bility of loss to the United States
a
foreign
government
without under the program. It is, there¬
prompt and adequate compensa¬ fore, essential that the authority
or
„
ing fund collateral trust bonds, to be sold competitively,
and 856,895 additional common shares, 468,621 shares to
be offered to common stockholders at rate
one-for-five,
the balance, 388,274 shares to be offered in exchange for
preferred stocks. - Unsubscribed shares will be under¬
re¬
ceived in connection with the for¬
supplementing these
assur¬ tion, and (3) physical destruction
to investors through the is¬ of property incident to interna¬
tional war. Guaranties may per¬
suance of guaranties with respect
to private United States invest¬ haps be issued against the nonments abroad. This is the particu¬ convertibility of local currencies
lar point to which H.R. 5594 is ad¬ to begin with and later be ex¬
quired for their development.
tended to cover other risks if the
The United States Government dressed. This proposed legislation
situation seems to warrant it.
can
contribute to the removal of would authorize the Export-Im¬
Before concluding I should like
these obstacles by making a spe¬ port
Bank to guaranty United
emphasize the
experimental
private
capital invested to
cial
effort
to negotiate treaties States
nature of this guaranty urogram.
designed to provide the assurances abroad against the risks peculiar
Since there has been almost no
necessary to induce our investors to foreign investment. These risks
to send their capital abroad.
The might include (1) the inability to experience with urograms of this
negotiation of such treaties is of convert earnings in foreign cur¬ kind, it. is impossible to anticipate
which
should
by
of
ances
flexible
the
type
of
be covered, the
Export-Import
and
broad
Bank
.
for
be
only
through careful study and experi¬
ence
can
the full potentialities of
guaranties be realized.
Questions
arising out of the actual adminis¬
tration of the program
to be worked out
will have
gradually by the
Export-Import Bank in consulta¬
tion
with
Council.
the
National
,
.
Advisory
j
38
COMMERCIAL
THE
(778)
FINANCIAL
&
CHRONICLE
Too Powerful Labor Unions
—Threat to Our
(Continued from page 14)
tively.
Of these
significant is the
cartelization
the most
issues
Democracy
of
American
pete with one another on the basis
the
plant or plants singled out for
The latter
attack.
at
are
small
seri-
a
communities
:,
;■ ;
•
where
S'
the
dearth of employment opportuni
ties permits them to attract the
of the local labor supply at
ability of rates
appreciably below those
the national to provide generous which old, well-established firms
disadvantage.
ous
They stand to
lose business to their competitors
cream
and they know that the
benefits
strike
for
indefinite
an
are
ment
terms that
or
gard
they would re-
victory is
won
puts
the
Once
reasonable.
as
squeeze
the
plants
the
in
the national union
on
the other
industry.
Foreign
experience shows that this type
of. "pattern" -bargaining
finally
induces
the independent compajoin forces and to enter
industry-wide bargaining in
nies
to
into
the
not
defined above,
sense
We
in
the
United
common
sense
will indicate
that depend on collusive labor-
may expect. As I remarked a
moment ago, there are at least
objections
seven
this
to
of
type
bargaining
.
1. Excessive
management monopoly.
(
;
Digression: British Experience
what;
we
Concentration
of
Power-Industry-wide collective
bargaining puts a degree of power
in the hands of union leaders such
I
The causes for Britain's Rresent
plight are many and complicated,
What I want to say here is ad|mittedly an oversimplification, a
i
Partj?' explanation
During the 1920s industry-wide
bargaining developed rapidly in
giant corporation possesses
Britain
mation
no
I do not believe that
men can
pos¬
The
be
wiselv.
used
In
1945, the
Supreme Court held in the case of
the
American
that the
mere
Tobacco
existence
substantially less than
great national union warrant¬
ed Federal action to check
even
not
effect been
in
though tve
possible
nower has
used.
In this
case, however, t^e power not o^ly
exists; it has been
in
jwas^ met by the for-
industrial
sumer
upon
the
and
terms.
associations
These
were
favorable to the workers,
Employed union workers enjoyed
used repeatedly
the last 15 years at great cost
to the community.
wage
in
international
British.
British
The
trade
to
be
my
mind,
This
could
pressure
brought against the
to
re¬
we
shall
move steadily and probably
quite rapidly into the kind of
leaves its own monopolistic monopolistic capitalism which de.industries so exposed to foreign veloped in Britain
during the two
competition as to necessitate far decades preceding World War II.
reaching governmental interfer¬
Industry-wide
collective
bar¬
with international trade.
ences
The
-
British
gaining threatens to break up the
Paper
of greatest free trade market;in the
bit of masterly world and to assign to the various
White
March, 1949, in
a
understatement refers to these de
parts
velopments as "the habit of seek¬
ing stability and security rather
than - progress
(which)
has re
tarded the study and adoption of
the
best
methods."
The
report
goes on to say that British "recov¬
ery will never be complete unless
we can develop a keen and adven
turous spirit in management and
pened
a
readiness to
welcome
improved
methods
(Parag. 125.)
;
new
of
the
tasks
which they hap¬
carrying out at tne
organized
labor
took
be
to
moment
over.
It
is
an
attempt to freeze
It is a denial of
opportunity to the poorer areas. It
the
status
quo.
is not, however, an invitation to
the people of these areas to come
unto the great cities and* knock at
the
and
and
labor.
gates of the great companies
jobs will be their's—unless
their
coming in no wise threatens
existing wage rates. Ipstead orr
I
the
out
be
not
ferentials.,
They have the further
advantage of forcing management
and central states, and the Pacific
Coast states on a still higher level
governments because
of their rich natural
..
,
to
re¬
consider
carefully where
very
to
locate every time there
^
and their relatively sparse question of establishing a new en¬
lad a favorable balance of trade.
populations.
' '
>
'
terprise or of expanding or reno¬
Their
people could continue to
These differences in wage rates
vating an existing one. The adr
buy in the cheapest markets. This
are due to the fact that labor is
vantages of the big: city as-a
meant that they very often
in-,
of
countries
which
with
Britain
sources:
„
.
,
not completely mobile. Men sim¬
the
ply will not move in sufficient
businesses that had been hurt by
numbers in response to differ¬
seriously
impoverished
by
the the
British
policy
and
hence
struggle. This gain was in part at obliged to offer their products at ences in wage rates to bring about
complete uniformity.
And it is
the expense of the unorganized
lower prices, To be specific, Po¬
good that this is so. Nomads do
workers who continued to keep lish coal
that was forced out of
not make good
citizens.
Fortu¬
their jobs and in part at the ex¬ Baltic
and Scandinavian. markets
nately this relative immobility of
pense of those who were unable
b.y
Britain's
superior
political "abor can be
offset
by greatei
to tlnd an^ jobs. Britain experi- power began to find its way to
fluidity of capital. Capital tends
enced
unprecedented unemploy
areas
creased
.
market for end
products, as a laZ
bor pool, from which workers of
various skills can be easily' re¬
cruited, have to be weighed care-,
fully against the costs associate^
their purchases from
.
with location in the
big city. JDifforce J*
ferences
in
constant
re-examination
wage
rates
of
this
.
problem of location and introduce
a constant bias
in favor of decen¬
.
around
accept
standards for their most
organizations
manage
labor excused from this
quirement I am convinced that
and
level than the industrial northern
ted line,
the
Adriatic which
is the first
Once thev have to
labor
get
.
—
common
by devising
new and better
ways of producing
(2) tliat this development prices
a
country out of world markets
Government
■
ment.
con¬
than
placed , upon; it by a strong and
In brief my fourth objection is
could do this in the case of any militant trade union
movement.
that collective bargaining threat¬
country from which it customarily
4. Destroys
Area
bought more than it sold. As an
Competition ens to destroy area competition
old creditor country it naturally Within the Country — Industry¬ and in the process to bring into
had an "unfavorable" balance with wide bargaining attacks the his¬ existence internal barriers to the
quite a few countries. To them it toric pattern of wages that has ex¬ movements of capital and of labor
said in effect:
"In the past you isted from colonial days down to from one part of the country to
bought quite a lot of our coal, our the present and undertakes to al¬ another that may do as much
textiles, pottery, machinery, etc. ter it drastically and industry by harm to the unity and prosperity
Recently you have been buying in industry without regard for the of our country as high tariffs, ex¬
other
quarters
simply ' because reasons for these differentials and change controls; quotas, etc., have
prices are lower. This won't do. with entirely inadequate under¬ done to the nations.
You can't expect to continue to standing of the effects of sudden
5. It Promotes Centralization-—
sell to us unless you continue to and marked changes in old estab¬ In a dynamic
economy competiZ
buy from us. We'll agree to take lished relationships.
tive forces tend to maintain difr
The historic pattern of wages in ferences in
so much of such and such of your
money wages that vary
products if you will see to it your the United States showed a close roughly
with
community
size.
people continue to get as large a relationship of wage rates to com¬ These differentials are in part off¬
proportion of their coal, textiles, munity size, rising by fairly pre¬ sets to differences in costs of liv¬
progression
from
the ing and in part the means of re1
etc,, from us as they did in a rep¬ dictable
resentative period in the recent small rural town to the great met¬
plenishing the labor supply of the
past." The British market was so ropolitan center. There were and big cities whose adults do not rer
still are regional variations in. this
important that country after coun¬
produce themselves. A free people
try was forced to sign on the dot¬ pattern; the South on a lower, can not dispense with these dif¬
ment throughout this period. This
lad
formerly used only British
unemployment/represented an coal.
Britain thus regained her
and greatest obiection to indus¬
enormous waste. What might have
northern European markets only
try-wide^ collective bargaining.
been produced may well have ap¬
to
lose
her
southern
European
2. Promotes
Cartelization
I proximated
what was wantonly markets. The end result was that
have already indicated why comdestroyed in the late war. At the
he consumers in the Baltic and
petitive firms in an industry are, end of the "twenties" Britain was
Scandinavian countries were the
not likely to be satisfied with the
staggering under two body blows poorer because they had to pay
type of "pattern" bargaining that —a war and almost a decade of more
for
their coal, the Polish
is now widely practiced.
When a high unemployment.
mine owners and mine workers
single union gets control of all or
Yet life was easier than before were poorer because they got less
most of the workers in an indusfor the
firms and the workers for their coal at the minehead, intry the independent,.firms really V/ithin the
errtational trade was cut down
protective picket fence
have no choice but to form an 0f
industry-wide collective bar- and distorted and Britain sold no
association and
authorized mdi- gaining. Domestic consumers had more coal on balance than before.
Viduals chosen by them to nego- to foot the
bill. The really serious International trpde. however, had
tiate for all of
t^ern on matters of drawback was that foreign con- become the football of politics and
wages and conditions of employ- j sumers could not be
source of international friction
brought into
This, to
rather
phould like to add that when ganized labor supports an unbe¬
British people voted to try lievably costly farm aid
program
the Labor party's - promises one
purpose of which Is to keep
able to devalue without provoking
they did pot register a vote of no more people on our farms than we
counter-devaluations.
Hence this confidence in
competitive capital
really need, and to pay them for
device proved of little avail. The ism but rather a
vote of jiq cop
not producing as much as they
next step was to use the bargain¬
fidence in a qnprogressive monop¬ would like to
produce. Needless to
ing power of the British market to
oly capitalism which had been say the taxes to
pay for this farm
impose upon Britain's customary
brought .into existence in part subsidy are not to come from the
suppliers the obligation to buy
through the. excessive burdens pockets of the worker.
role
associations.
real wages appreciably higher
Company than those of the decade preceding
of powers World War I, despite the fact that
those of the country as a whole had been
any
abuses
of
unions
without using it. I do agreed
not believe that power such as this highly
sess power
can
But it is
worth pausing to make the point
would dare to exercise if it did.
as
or
tain*nf attractive wage standards
yet had much experience with
this type of bargaining.
A study
of foreign experience plus a little
If the growth
pay.
theorists criticize firms for main-
i
have
States
obliged to
of these troublesome smaller firms
can be checked, still better; if
they can be forced to liquidate,
life for the survivors will be a lot
easier. They can afford to accept
a fairly high wage standard, if it
forces
out
this
troublesome
fringe, because they can then pass
on the costs to
the consumers,
This is the line of least resistance,
Public opinion approves it. Only
period precludes any early settle-
by raising prices to the
wages
of
indus¬
differentials such as had
3. Promotes
Collusive
Labor- previously existed between north¬
is usually the most important ele¬
ern and southern England and be¬
ment of cost for all of the firms Management Monopoly — Firms
tween
the
large cities and the
involved.
The objective, as far agreeing to negotiate through an
smaller communities. If that kind
association
expect
to
increase
as labor is concerned, is to equal¬
of competition were contrary to
ize this cost as rapidly as possible their bargaining power and get a
the public interest then surely it
throughout
the
industry,
thus better deal from the national
was even more against the public
exempting the workers from the 1 union than they can get by bar- interest to ask British workers to
requirement to compete which is gaining separately.
Full fledged
compete against Belgian workers
expected of management and the industry-wide bargaining would
or Czech workers or Polish work¬
suppliers of capital.
| thus appear to be in the con- ers or Indian workers, who were
Industry-wide bargaining is just sumers' interests. European expe- getting much less than the lowest
beginning in the United States. In 9ence> however, shows that this paid workers in Britain.
most of our mass production in- Js not so, and a little reflection
So
in
1932
the
Conservative
dustries we have reached a half- reveals the reasons,
Party returned to protection. This
way
position.
National unions
Business firms don't like corncompleted the delivery of British
bargain with the individual em- petition any better than the workconsumers
to the tender mercies
ployers on a plant-by-plant basis, ers like it.
The majority of the
of
Britain's
labor - management
or on a company-wide basis,
and firms at the labor management
monopolies but was of less than
occasionally on a local area basis, bargaining table can be easily
nq
help in protecting Britain's
as in San Francisco.
This method persuaded to accept common labor
customary foreign markets.
De¬
Of bargaining permits the national standards that are admittedly too
valuation represented an attempt
union to tap the wages of the high for an important minority of
to regain these markets. Unfortu¬
workers in all the unstruck plants the firms.
These may be young
nately Britain played too big a
for the sinews of its war against and
growing firms located in
try.
rate which
wage
The points I am trying to make
this digression are that indus¬
standing threat to plants in big
cities. There is always the danger
try-wide collective bargaining (1/ that a plant or a whole industry
is almost certain to lead to tight may migrate in search for
cheaper
labor - management
monopolies labor. It imposes moderation on
that prefer to make so-called fair
management and labor alike.
It
profits and to pay so-called fair forces them both to compete. If
in
expect workers in Britain to com¬
ing is almost certain to promote
•
Thursday, August 25, 1949
line.
Britain
losing the for-
was
eign markets on which her very
important single element of cost
(existence depended,
the
temptation
to
agree
upon
During the "thirties" the Brit-
instead
it
of
tends
owed
international
to
to
be
when
move
on
amity
trade
the
is
as
al-
basis
of
comparative advantage.
to
into
areas
where wage
tralization,
If, as many believe,
relatively low, thereby there are great sociological values
increasing the ratio of capital to associated with life in small Comr
manpower, making this manpower
munities/government should not
more
effective and hence bring¬
deliberately support measures that
ing about a rise in wages that is f&vor the forces of
concentration.
justified and supported by the rise If, as
military men assure us, big
in
productivity. If the migration cities are extraordinarily vulner¬
of capital to low wage areas is
able targets in the event of an
very fast, money wages may fall atomic
war,
again - government
in the high wage areas where most
should avoid supporting measures
of the
investment capital origi¬ that,
needlessly increase the prof¬
nates.
In an expanding economy
itability of carrying on our eco¬
such as we have had in the United
nomic life in big cities.
/
r
States geographical wage differ¬
Industry-wide bargaining aims
move
rates
are
entials
have
not
had
this
effect.
at. the
They have, however, enabled
a re¬
the
gion like the South to attract
more
entials
capital than would otherwise have
been possible and thus to expand
nonfarm jobs at a somewhat faster
rate than other parts of the coun¬
eventual
size
as
of
well
elimination of
differ^
community
as
the
north-south
differential which is now so much
in the public mind.
Hence, it
favors centralization.
r
-
v
>
•
This is my fifth objection to this
"
/v.- '
/
I shall come back in a moment new form of bargaining: It favors
only of¬
a
degree of centralization that is
rl
seems to me quite method of bringing foreign con- fender during this period. Our own to the way in which geographical
economically wasteful, sociologi¬
or
even
tolera ion of industry-,t sumers into line. But first Britain Hawley Smoot Tariff of 1930 may differentials in wages exercise a
ha(j to abandon the "free trade" well have
started the stampede socially wholesome decentralizing cally objectionable and militarily
wide collective bargaining is
nosition which she had defended back to the
'
; '
insensate protection¬ effect. Here I wish to stress the dangerous.
going to defeat the government s for go
years.
This radical change ism which set in during the 1930s way in which they vitalize compe¬
6. It Weakens Morale—I find it
efforts to enforce Anti-Trust.
in policy was not difficult to sell and
hard to believe that men can get
which contributed so much to tition.
^rv%?rodnfe'WiU £
ish^ Government^^
discovered
a
Britain
was
not
-
try/
the
.
.
,
■«*
nl Ixrin
.
This
is
mv
f^ond
obiection:
to
a
public which had
Industry-wide collective bargain- lieve that it
was
come
to be-
unreasonable to
the
r^e
War II.
of
Hitler
and
to
World
Regional and size of community
wage
differentials
.
constitute
.»
a,
any real satisfaction out of work.
however good the pay, unless they
.*
prospects is at all pleasing-
industryr-wide collec¬
r I do not see
low/J'.'-V.;. • -;:V
7; It Forces a Choice Between
Inflation and Regimentation — In
the absence of any common loyal-,
ties trade union pressures are all
directed at increasing wage rates,
reducing hours and otherwise im¬
proving conditions from the point
the
nder
expressed
conclusion
all
bargaining?
tive
become
States
so
as
threaten
to
cratic way
demo¬
our
of life.
24,
Act
Taft-Hartley
The
about it?
has done
done
be
to
differentials
Consequently y
the
narrow
pay
them.
between
workers
to
come
across-the-board
of getting ahead
means
a
This
.
new
If
general
advances
year
after year will
they be 'content-tot keep them
within .the modest limits set by
tech
a o
1
o g
i
c a
coordination of wage
demands by unions in different
areas should be as resolutely re¬
pressed as any efforts of com¬
petitive plants within a single
industry to agree upon and to en¬
force
1 improvements?;
.Three per cent a year would ap¬
pear to be an optimistic outside
limit to what the American econ-j
a
common price
irregularly,
now in this industry and now in
that, and usually starting in one
be remembered, occur
in^^n; industry; and then
itkl "economies,
record
12,
business
of
D.
McGREW,
C.
gains
of
Ret
tfuced prices;to consumers are the
5 y jst .way of getting these gains
ely. and quickly .distributed,
ing unions .show little disposit
f.
to, share with, .the. general
>
lie the economies of the tech1
progress that happens
to
entitled to share in the
technological '-progress.,
<
1
5
-in'the? /plants
un^
They take all that the
'traffic will bear.
Then other
-unions" insist
upon
comparable
coutroh
I ad vance's
*vances
though no technical ad-
have
occurred
Gaston,_Chairman of
of Directors of the Ex¬
Herbert E.
made at Volta
advance
without a price advance.
Under these circumstances,
steins
almost
it
i n e v i t ab le that
control the labor
in entire .industries will not be
that unions that
;e^teht-;with the advances that
could absorb with a
price level.
Is this not
has been Jtappening since
the i economy
stable
what
V-J Day?
continues, we shall
(a) seri¬
ous unemployment; (b) an infla¬
tionary expansion of credit that
will inject enough new purchasing
power into the system to support
the higher level of prices needed
to
restore
profitable cost/price
ratios to the firms that have not
beeii able to develop any technical
or
administrative economies; or
If the trend
have to choose between
to
A.
sult
in
misdirected
investment,
Treasurer.
expansion of the
plant to supply the Brazilian mar¬
ket more adequately."
The Volte-Redonda plant was
the first large-scale,
integrated,
modern steel plant to be financed
by
Export-Import Bank funds.
Situated in the valley of the Paraiba River and 90 miles from
American
Bank Note
Plainfield National Bank of Moosup,
located at Moosup, in the State of Con¬
necticut,
is
closing
its affairs.
All credi¬
therefore hereby
notified to present claims for payment to
the undersigned at said bank.
of the association are
BENJAMIN
Dated June 24.
1949
DAW80N,
Liquidating Agent
F.
close of business on
September 9, 1949.
J. H. Mihacle,
1949
August 23,
Secretary
,
stockholders of rec¬
r
of business on
will not be
closed.
J. Osborn, Secretary
Hervey
UNITED FRUIT COMPANY
NO. 201
DIVIDEND
Preferred Dividend No.
*
CONTROLS COMPANY
the Preferred Stock for the
quarter ending September 30, 1949, and a
dividend of 40? per share on the Common
Stock have been declared. Both dividends
(1/4%)
are
on
Green tburg,
holders of
1949. The stock trans¬
September 1,
remain
fer books will
Regular
dividend
quarterly divi
of
and
an
extra dividend
dollar per share on
one
the
capital stock of this Company
been declared payable
have
October 14,
1949.
1949 to stockhold¬
September 8,
record
of
ers
■fci'-v
'
share on
and
EMERY
LEONARD
N.
Treasurer
V& ( per share on the
4% % Cumulative Con¬
vertible Preferred Stock
have been declared, both
291
Ja.
payable October 1, 1949
to
at
stockholders of record
the
The
COMPANY
not
_
August 18, 1949
Notice of Dividend
clared
share
a
on
transfer books will
be closed.
WALTER H. STEFFLER
.
Secretory fir Treasurer
DUBUQUE, IOWA
The Board of Directors
close of business
September 12, 1949.
INTERSTATE POWER
has de¬
dividend of 15(j: per
the outstanding Com¬
YEAR OF
September
20, 1949, to stockholders of rec¬
ord on September 10, 1949. The
Stock, payable
mon
transfer
books
CONSECUTIVE
will not be
DIVIDEND
closed.
/ PAYMENTS
Oscar Solbebc, Treasurer
August 19,
TWENTIETH CENTURY-
1949
SOUTHERN CALIFORNIA
FOX FILM CORPORATION
EDISON COMPANY
•
REYNOLDS
(
.
METALS
$1.12% per
(or the equivalent in sterling at
rate of exchange on date of payment
of record residing in the United
share
the
to holders
Reynolds Metals Building
Richmond 19, Virginia
PREFERRED DIVIDEND
COMMON DIVIDEND
The
regular
dividend of one
and
thirty-seven
one-half
dollar
cents
($1,375) a share on the outstanding
51/2% cumulative convertible pre¬
ferred stock has been declared for
the
ending
quarter
September 30,
payable October 1, 1949, to
record at the close of busi¬
September 21, 1949.
Kingdom) on the outstanding Prior Pre¬
ferred Stock of this Corporation has bsen
declared payable September
15, 1949 to
the stockholders of record at the close -of
business
of
share on
twenty-five cents
(25?)
the outstanding common
declared payable Oc¬
1949, to holders of record at
stock has been
tober 1,
the
close of business
September 21,
1949.'
transfer books will not be closed.
Checks will be mailed by Bank of
the Manhattan Company.
The
ALLYN DILLARD,
Dated, August
18, 1949
Secretary
of payment to
record residing in the United
Kingdom) on the outstanding Convertible
Preferred Stock of this Corporation has
been declared payable September 23, 1949
to the
dividend of
of
holders
stockholders of record at the close
business
on
September
1, 1949.
quarterly cash dividend of $.50 per
(or the equivalent in sterling at
exchange on date of payment
to
of record
residing in
the
United
Kingdom)
on
the
outstanding
Common
Stock of this Corporation has
been declared payable September 23, 1949
to stockholders of record at the close of
A
share
the
rate of
holders
business
on
September 1,
1949.
DONALD A. HENDERSON.
has
The Board of Directors
authorized the payment
the
idends::
'■?
of
following quarterly div¬
50
''"•■■i-j."
V'v,V./ ,-■■■
cents
per
share on
Original Preferred Stock,
$.37% per
sterling at the
quarterly cash dividend of
A
share (or the equivalent in
rate of exchange on date
1949,
a
September 1, 1949.
on
PREFERRED DIVIDENDS
August 18, 1049
quarterly cash dividend of
A
company
'
•payable September 30,1949,
to
on
stockholders of record
September 5, 1949.
27 cents per share
Cumulative Preferred
Treasurer.
on
Stock,
4.32% Series, payable on
September 30, 1949, to
stockholders of record
September 5, 1949.
T. J. GAMBLE
Secretary
„
:
,
of fifty cents per
Common Stock
the
Secretary
July 27, 1949
'
STOCK
dends of 20^ per
open.
W. F. COLCLOUGH,
Po.
COMMON STOCK
PREFERRED
payable October I, 1949, to
record
A
share
75d per share
of
dividend
quarterly
A
ROBERTSHAW- FULTON
174
Dividend No. 163
Common
A
The
stockholders of record at the
1949, to
Company
ness
Liquidation Notice
Directors has this date
dividend of twenty-five cents
per
of the
share has been
a
a
share on the Common-Stock
Corporation, payable October 3,
(25?)
141
SEVENTY-FIVE
de¬
clared on the capital stock of
this Company, payable October
CENTS
holders of
t
.
declared
September 15, 1949. The stock
transfer books of the Company
the Volta Redonda
ernment.
The Board of
of
A dividend
1, 1949, to
ideas for the
tors
DIVIDEND NO.
ord at the close
consulting with the
Bank and steel industry experts
(c)
comprehensive controls
prices and wages. > Any of these
surrounding industrial city with
developments could have very
modern homes for workers and
serious political
and economic
consequences. / We
have devel¬ supervisory employees.
The total physical investment of
oped such a pathological fear of
the company in the steel plant and
unemployment as a result of our
its associated enterprises is ap¬
1029-1933 experience that really
serious unemployment now will proximately $175,000,000, of which
the equivalent of $130,000,000 has
almost certainly give rise to a
been supplied by Brazilian private
widespread
demand
for: lavish
investors and the Brazilian Gov¬
experience and our own brief
•experience after the war, will re¬
SIMPSON,
Dividend Notice
International Salt
and
the
August 18, 1949.
N. Y.,
York,
this country for sev¬
enterprise is conveniently located
with respect to the supplies of
iron ore which are transported by
railroad from the State of Minas
Gerais and to the principal mar^
kets for steel in the metropolitan
centers of southeastern Brazil., ;
on
The company has financed
a
public works to be supported by
short-term
borrowing from the
commercial
banks.
Alternative
(b) may be preferable to this, but
it will certainly cause unrest, re¬
crimination and serious hardships
for the unorganized middle classes
who constitute the backbone of a
democratic society.
Alternative
(c), if we may judge by foreign
louisiana
shrevepdrt,
Redonda as report¬
Rio de Janeiro,
GAS
UNITED
Secretary
CORPORATION
127
at
eral, weeks
on
of record at
15,1949.
GERARD J. EGER,
us
has been in
payable Octo¬
the close of business on September
this
of
Stock
payable
J.
New
by General Sylvio Raulino de Oliveira, Director General
of the Siderurgica Nacional, who
ed
the common stock
1949, to stockholders
company
Company has been de¬
the Treasurer's Office, No.
165 Broadway, New York 6, N. Y., on Monday,
September 19, 1949, to stockholders of record
at three o'clock P. M., on Monday, August 29.
1949.
The stock
transfer books will not be
closed
for
the payment of
this dividend.
Steel Company) of
Brazil for an additional loan for
an enlargement of the steel com¬
pany's plant ■, at Volta Redonda,
completed in 1946. The plant's de¬
sign is in accordance with the
most advanced United States prac¬
tice and is entirely equipped with
United States machinery, largely
supplied from the proceeds of Ex¬
port-Import Bank loans totaling
approximately $45,000,000. Ameri¬
can consultants have
been active
from
the start in advising and
training Brazilian employees.
"We have been greatly pleased,"
said Mr. Gaston, "by the progress
which
on
ber 15,
Secretary.
QUARTERLY DIVIDEND of One Dollar
Cents
($1.25) per share on
clared
(the National
"
wpuld permit of .a wage
NO.
DIVIDEND
Seeks New U. S. Loan
but;decades
MORSE G. DIAL,
Vice-President and Treasurer
September
the SOUTHERN PACIFIC COMPANY
and
Brazil Steel Concern
pother industries.. Yet all workers
are
on
share
of
stockholders
to
1949,
30,
close
at
declared quarterly divi¬
of thirty-five cents (35c) per
1949,
Common
«>m-jr. go by without any saving in
?
dend No. 136
the Board of Directors
Iron Corporation
held on August 23, 1949, the regular divi¬
dend in the amount of 25c per share was
declared
on
its
common
stock, payable
September
;
r
Stock
Fuel &
Colorado
&in£sub4 Companhia ;Siderurgica Nacional
'
"
(50^) per share on the outstanding
capital stock of this Corporation
has been declared, payable Oct. 1,
1949 to stockholders of record at
the close of business Sept. 2, 1949.
of International Harvester
The Directors
meeting of
a
The
Pii wading, to .the others.as rapidly port-Import Bank, has announced
patents and secret know-how that the Bank is giving active con¬
{ permit.
In, the industries sideration to a request from the
*
INTERNATIONAL
Company have
Common
on
CONDONATION
dividend of Fifty cents
A cash
HARVESTER
Corporation
Dividend
At
CANNON
AND
UCC
Secretary.
PETERS,
Twenty-five
the Board
Union Carbide
H. B. Pierce, Secretary
COMPANY
A
'
of
1949.
B.
SCHALL, Treasurer.
M.
policy;
order
and
(4) Law
level.
stock
ber 16, 1949.
The Colorado Fuel & Iron
right to work should be enforced
at all times and in all cases.
*bmy, cs^lprpyide^t^'^table^ricej
fltm
of unions
(3) The
get these
12,
v;
local areas;
>F.
quarterly dividend of
declared on the com'
the Company, payable
was
share
per
WM.
of
method of getting
costs -a Jot of money.
ahead
the unions are to
be limited to
September 28. 1940 to stockholders
of business on September
at the close
1949
Preferred Stock of
September
work¬
on
record
8
September 30, 1949, to stockholders of
record at the close of business Septem¬
upon the out¬
this Company has
been declared payable October 1,
1949, and a
dividend of 40c per share upon the outstanding
$25 par value Common Stock of this Company
has been declared payable October
1, 1949, to
holders
of
record
at the
close of business
A
standing
,
should
classification. ;
share
1949.
18,
August
1949.
this day, a
per
mon
(Incorporated)
reason¬
all qualified
(2) The jurisdiction
i
sibility of numerous advances
wiihm each job
on
open
ers;
advancement
to
closed—and
able terms to
and
within the
firm from one job classification
to another with the further pos¬
as
less
25^
meeting of the Board of Directors,
must be open—
(1) The union
not
a
held
Secretary and Treasurer
Racine, Wis.,
dividend of $1.75
payable
of
At
I. Case Company
J.
a
on
the $25.00
par
value 8% Preferred Stock
outstanding; and a dividend of One Dollar per
share on
cne
outstanding Common Stock; all
COMMON DIVIDEND No. 293
*
SUGAR COMPANY
RICO
Directors has this day de¬
quarterly dividend of 50c per share
of
Board
clared
1949
August 18,
-J
capitalism:
vate
more to
increases
look
wage
the close of busi¬
at
record
of
The
Packing Company
Pre¬
were
declared on
payment October 1, 1949,
JACK,
W.
D.
is
the
on
September 6, 1949,
Recommendations
What
share
per
PORTO
August 23,
"The Garlock
Y.
Company
for
1949,
stockholders
to
ness
individual worker something to redress the balance
of power, but not enough.
The
without any thought of a quid
following principles, as I see it,
pry
quo
in terms of increased
should guide the lawmakers in
performance.
Most, national their efforts to establish the basis
unions also endeavor to reduce the
for a workable unionism that will
number of job classifications and
be consistent with a dynamic pri¬
to
$5
Light
&
August
N.
and a dividend of $1.25 per
Preferred Stock of American
($6)
the
Power
view of the
of
Stock
on
$1.50
of
dividend
A
ferred
share
6,
STOCK DIVIDENDS
PREFERRED
the
at
organized labor has
strong in the United
that
outset
York
New
SOUTH
COMPANY
LIGHT
&
Street,
Rector
Two
that led me to the over¬
reasons
POWER
AMERICAN
gentlemen, are the
These,
39
DIVIDEND NOTICES
DIVIDEND NOTICES
DIVIDEND NOTICES
No one of these
living.
levels of
must be loyalty to the em¬
ployer and the plant.
Can genune esprit de corps be developed
and lowered
production
lowered
part of a team;
eel that they are
.There
(779)
CHRONICLE
FINANCIAL
&
COMMERCIAL
THE
Number 4832
olume 170
V
August 19, 1949
r
on
•
40
(780)
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
Thursday, August 25, 194|
their
BUSINESS BUZZ
ing
on...
ideas and convictions,
own
without
apparent
in
even
public
back¬
constituencies that
are
normally hostile to the in¬
ternationalist line.
''
v ♦
A
BeVind-the-Scene Interpretations
from the Nation's
gJ
V^||»
tI/IA/
jTjL
Capital
*
A.
"
«
It may now be
reported that i
the Economic Expanders wh(
Mr. Truman on the idea o:
was
sold
removing maturity limits
business
loan
WASHINGTON, D. C.—So loused
up is the situation with respect
looks like Congress won't quit until the
to adjournment that it now
first part of October at the earliest unless one of three
let
will
hope
be persuaded
royalties
sign
advice
will
the
Truman
any
his'boys
go
program
1950.
The second
contingency is some
God, like the
air conditioning going off before
the hot weather finishes up in the
latter part of September, or any¬
thing else one can imagine.
A third contingency is that Mr.
unforeseeable act of
will
Truman
those
make
political
lias
another
blunders
that
mad
they will do is
the
up
the
it
President
is
to
Texas
which
who
sentative
to
elect
Democratic
first
thing
and walk off
thus
and
elected
be
him
„
by
majority
not
does
man
the CIO.
There is still quite a sizable
menu
before
the
Congress, es¬
pecially the Senate. First order of
elect
ing
concessions to the states
any
tidelands
on
This
oil.
also important to Senators from
the
vacation.
;
Theoretically,
J
\
until
■
schedules
Reciprocal Trade Agreements act
to be taken up. It is hard
is due
to
a
see this running for less than
couple of weeks of Senate de-
hate, especially inasmuch as the
fight will be hot and close, and
the
Administration
the
for
votes
the
instead
will
to
have
talking out
of action
that
save
the
cut
sake
doesn't
and
prolonged
talking
the chances of the
that bill finally being
of in
the
and
week
two
Senate
it
weeks.
in
could
a id
bill in
be
another
actual
aid.
appropriation
There
with
go-around
is
regard
for
another
to
arms
tioned
for
a
be
This
altogether
enough to
is
October, If the word
comes
date
into
down
them, then the Senate his¬
torically can wind up a session
terrific burst of speed and
get out of the way, in
a
day
or
so,
propositions
might
normally
which
it
over
debate
for
♦
■!
Already there is a possibility of
an important Truman
blunder in
sight, of the kind that can influ¬
ence
the
Congress to tell the
President to go jump.
Speaker
Sam
most
Rayburn is by all odds the
faithful
of
the
President's
chore boys at the Capitol. The
President, listening to the officials
at
Interior
who
want
to
control
the development of tidelands
oil,
will
consent
to
no
practicable
compromise with the states
this issue. Tidelands oil is
that would be
way,
under the tent
nose
nothing.
.
5%
nor
by not less
10%,
sums
than
more
limiting the cut of anyone agency
or activity to not more than 20%.
McClellan
has
informal
63
signatures to
Democratic
petition to the Senate
leadership to make
10
an
5
and
cut
"order
it
can
one
be
of
taken
the
and with
so
in
tip
a great deal of discomfort
for the
Administration forces.
defense
getting
a
override
succeeded
House.
It
thirds
would
vote
to
Senate conferees
their
,
a
bill,
bill
getting
approved,
conferees, but with
vote, they
are
a
two-thirds
"bound" to
ognize
the
Senate.
Finally,
sentiment
rec¬
of
under
aegis.
000
(R.
making
has
served
notice
bill
the
would
provide $1
billion fbr
direct government loans at 3%
less for 60 years for
housing, at
a
or
cooperative
ratio of 100%
*
.
One
of
the
members
almost
of
features,
and
!
scrap.
the
;:
'
*
,
"
things that piques
both
Houses
is
the
complete lack of voter in¬
terest
in
the
aid
arms
most ardent opponents
bill.
of
The
aid
arms
admit only a few letters in op¬
position to this proposition. One
reported that in the last
couple of weeks he has received
not
might
be
a
one
out for
week's
bitter
commitment that it will be
letter
a
the
con¬
written
latter
to
Lucas
asking
Senator
single letter either for
one
against
arms
piqued
because
This
makes
more
a
chance,/but there are two
other propositions for which the
not
trickled
file
of
ment
money.
The
other
is
the
beautiful
and
subtly-worded
language " whereby
eventually
most
if
not all
temporary and
of
some
450,000
permanent units
the
there
is
decrease
due
was
in
imports
£ 15,280,000
to
were
slightly
£141,668,-
less
still about
level.
Britain's
first
ga£
the
ac¬
The
half
exports
of
above the
1949
1938
ing
the
the
British
target
than
45%
in
above
during
the
50%
averaged
level, thus attain¬
set, for them by
Government.
.
' "
But the
tory
as
above
position is not satisfac¬
while exports were 56%.
1938, in the first quarter of
the
year,
they were only 46 %
above in the second quarter.
The
or
are
public
apparently, neither for
are fighting for it nor
for those who are fighting against
it. The public seems to be com¬
pletely apathetic.
'
One of them is direct
mortgage
loans to veterans, with govern¬
Members
1938
June,
reexports
£4,289,00$
together
£145,957,000.
was
but
of
advises.
target for the end of the
is that exports should be
running at 55% above the pre¬
year
war
level.
>/■•■
the amendment
and
will
it
of
over
House
"cut"
arms
the
the
to
House
reported
rank
and
membership,
a
week
ago,
actually $500 to $600 mil¬
lion is all the State department
expects it could spend on arms
aid in one year. So the members
who
voted
thought
making
to
"cut"
they
a
cut
arms
actually
and
doing it strictly
they
free
aid
were
were
lance,
Ralston Steel Car
aid
remarkable. The word has
herein
that
the
$500 million in
Trading Markets:
*Oregon Portland Cement
Riverside Cement A & B
Spokane Portland Cement
•Latest
Figures Available
LERNER & CO.
Investment
10 Post Office
is out of order,
all
in
all
more
efficacious
thing
as
it
a
is
to
rider
v
Teletype BS 09
on
will
attempt
see
if
and
the
the
FOREIGN SECURITIES
All Issues
and be
counted."
As
a
separate
joint
resolution, rather than as a rider
"stand
are
impor¬
are
not
predicting
predicting
a
a
victory. They
long debate and
Executive
A Underwriting Offices
WALL
STREET
Tel. WHitehall 4-4540
f?ARL MARKS & HO- INC.
FOREIGN SECURITIES
t,an
on
NEW YORK 5
70
up
appropriation,., it. simply
would be buried by the House.
Sponsors of the 5 and 10 cut
iO
Hiii, Thompson & Co., Inc.
Trading Markets
SPECIALISTS
50 Broad Street
——
Trading Department
120
New York 4, N. Y.
AFFILIATE: CARL MARKS & CO. Inc. CHICAGO
Tel.
j
Square, Boston 9, Mass.
Telephone HUbbard 2-1990
considered
Senators who have been shouting
economy
Teletype—NY 1-971
Firm
vote to overrule him.
So
HAnover 2-0050
<>
two-thirds
a
j
Securities
Vice-President
take
i
those who
about it.
"liberals? will hold out and junk
only
if ^absolutely
necessary.
aid.
support,
Actually the $1 billion for
cooperative housing doesn't have
:
and
Harry knows how to
contingent commit¬
Treasury for home
financing. Among other things the
of
financing
of
a
fell
against
this, and Senator Harry P. Cain
Wash.)
month
London
by
£186,429,000. '
Exports in July
The
is
the direct and
_
in before the House
which
This
ments
the
to
narrowing
wholly to
for "low
housing
Committee
for
cording
go
government
House
lion
June,
sidered, and Johnny had to have
two-
are
can
public
or
for
gap
£40 mil¬
£54 mil¬
compared with
as
that he will scrap about all the
a
the
the
housing
war
rent"
trade
lion,
funny
So he has ducked
giving
Senator John Sparkman (D.
Ala.)
sponsor and engineer of the bill,
must
who
with
particular
cave
•
visible
the month of July was
covertly-sponsored bill,
reported out by the Senate Bank¬
ing Committee, vastly extending
debate.
(2)
that
tration's
what
a
the defense
on
concerned
do not
,
not anxious to let this
tried
by
take
ensure
appropriation
more
worrying him—
pen in the pencil
though Mr. Truman may
willing to have Congress meet¬
ing indefinitely, Senator Lucas is
thing miraculously
ingetting
Scott Lucas is
unhappy about the Adminis¬
most
of
local
•
Even
Presidential
a
Uv. 'r;
%
be
chance
it
where,
any
*
Leader
to value.
appropria¬
it is always
(1)
'
*
Senate
rental
two other
or
indicating they favored
the
have
Barkley is expected to rule that
'■■■
*
appropriated
a
week.
*
require the President
expenditures be¬
vote, if the
than
wants
a
low
than
vote to
passed just the way Mr. Truman
with
would
the Senate by a two-thirds
vote. It would take a two-thirds
quit by a cer¬
if hills. are not
even
cut
of
that the boys can
tain
10
pass
wage.
the Senate
carry
;,,
to reduce actual
if the amendment has
men¬
more
and
5
and force consideration, and
below, and the prospect
long argument on
in¬
creasing the minimum
Woolworth
cut onto the appropria¬
economy
must
may
little difficult to persuade Sena¬
tors to overrule the leadership
prospect
will
of
have been
before publication, to
tion because
the
prolongation of
which
.J.',
McClellan
The proposition will be
the fight on the defense appro¬
priation,
,
boss
something important
there he goes
trying to sharpen his fountain
;v-:.sharpener again!"
tion for the Armed Services. This
out
arms
on
!
r
L.
which
the
Senators
form, there will
some
hang
pas¬
an
Britain's
this proposition even though they
didn't sign it.
V .•••••',
a
take
Following the
by the Senate of
sage
to
"The
John
announced
soon,
disposed
less than
easily
Senator
business"
Senate, the foreign arms aid
hill, and it is hard to imagine
to
rela¬
a
11
this
bill.
in
Figures Reported
Arkansas has reached the definite
hopes
Then there is still to clear the
position
a
is
Mississippi
!'■■■•.'
decision,
changed, the extension of the
are
from
.
have got the word that
a
South
oil,
California.
.
have
tidelands
and
gas
.boys
if they get
certain date they can
in
business
Britain's July Trade
double
was slated to be the defense
appropriation bill. This is good
for from three days to a week's
ation,
a
Ex¬
pretation from the nation's Capital
and may or
may not coincide with
the "Chronicle's" own views.)
will
issue,
through by
corner.
Economic
veto the Kerr bill and is fight¬
business, after Interior's appropri¬
debate unless in advance the
con¬
(This column is intended to re¬
flect the "behind the scene" inter-
Ray
burn, he has indicated he
RFC
getting the
the
Mr.
the
tively small
House. Although President Tru¬
the job, just like
the
and better than
the
of
put
capitalize
permit him
Speaker
the;
a
to
come
through
with
their
schemes, and if they could just
Repre¬
a
several
be expected
not
right
Actually,
the
of
business
of
panders reasoned that it would
be impossible for a
long time to
get Congress and the President
is
learn
voters
the
of
scale
a
cross
govern¬
RFC to get there first
with
cession at just the
Fourth Congressional district of
of
marked* his
darn
from
paid
What Speaker Rayburn would
dealings
with
Congress, and everybody will get
so
price
on
their
they would want a compara¬
tively little hot dog stand like
Texas, and the Senate is likely to
it.
like
capitalization
peddle
that
approve
that
and
expansion
to in¬
dependent producers of natural
gas who sell to pipelines which
subsequently deliver this natural
gas in interstate commerce. This,
too,
is an
important
issue to
until
over
the
big shop at the
very
billions. It would
the Fed¬
Power " Commission
regulating
on
a
,
Kerr bill to prevent
eral
private
Capitol
they should leave some
major elements of the
from
the
take
up
roads
ment
Then, too, the House has passed
yet, however, that the
as
Hill that
t£
a depress
climate when they could set
sion
tide-
state-granted
on
lands oil concessions.
next
President
of
finally to
of his program go over
year. There has been
part
until
revolving fund available
would prefer to wait for
that Congress-^
time soon after tant to Texas, which derives large
Labor Day is that President Tru¬ funds to finance education from
no
RFC
on
doubling the
they
first
will get away any
man
and
RFC. Actually the Economic
ExJ,
panders have much broader ideas
It would be
presumed that
contingencies
develops.
The
loans
BROADWAY
REctor
2-2020
@FedFRASER