Full text of Commercial and Financial Chronicle : August 28, 1947, Vol. 166, No. 4624, Section 1

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AUG 2 9 194Z

pE!*tODt6AlUNIV.

ESTABLISHED IS39

OF

J

MICH.

in 2 Sections

%* Commercial

an

-

Section 1,

d

Financial Chronicle
Reg. U. S. Pat. Office

Volume 166

'

Number 4624

New York, N. Y.,

What Is the Future oi Air

Germany Revisited

.

By

S.

JAMES

KNOWLSON*

By

j

President and Chairman of Board, Stewart-Warner Corp.

i

Asserting, despite physical progress in re-establishing tools of industry,

i

no

advance has been made in solving basic problems of
Mr. Knowlson described present unsatisfactory

German economy,

food, coal, transport, and inflation. Concludes German

situation in

is running down bill, notwithstanding U. S. and British

!

economy

aid, and holds aim to reduce Germany to pastoral state is "biting

'

face." Sees need for new capital investment in
Germany and contends keeping Germany in chains will mean a

off

;
1

to spite

nose

Price 30 Cents

Thursday, August 28, 1947

Transportation?

J AN AS*

SIGMUND

President,

Airlines, Inc.

Colonial

Asserting air transportation has crossed threshhold of uncertainty and will have a development
seldom equaled in history of American enterprise, aviation executive points out adverse as well as
optimistic trends. Holds airlines have weathered critical point in transition from war period and are
on
upward surge. Sees opportunities in airlines' stocks.

My remarks to you today will be directed toward the much discussed current ques¬
transportation and financial circles: "What does the future hold for the air
transportation industry?" Volumes have been printed and spoken on this subject during

tion in both

6 the critical pe-

communistic Europe.
Published accounts of conditions in Germany today are apt to
one with the feeling that our occupation of the German terri¬
tory has been<^
badly han* side, and along both sides of these
died and that same roads a never-ending line of
the
accom¬
people moved on foot — men,
plishments' of women, children -7- whose every

-

,

EDITORIAL

riod war endsince the
late

•

leave

this

occupa¬

have

tion

been

practi¬

cally nil.
However,
who

anyone

t

r

a

led

v e

through
ruined

A
James

of

the

the

cities
Reich

in 1945 cannot

fail to be im-r

pressed with
the things that

Knowlson

S.

have been done in
at that time,

was

reviving what,
a wholly para¬

lyzed urban economy.
cities

the

in

Germany

were

so

that many
were entirely impassable for cars.
Telephone poles lay on the ground
rubble

with

clogged

telephone and power wires
looped themselves along the roadand

Knowlson

*An, address by Mr.
at

luncheon meeting of

a

the Chi¬

Association of Commerce &

cago

Industry,

Chicago,

possession was on their backs or
pushcarts. Aimless, homeless,

in

beaten.

When

approached
they drew back to give you room.
you

Fraternization of
Germans

troops with

our

forbidden.

was

Long lines of freight cars stood
idle on sidings because the over¬
passes had been dynamited. Noth¬
ing moved
on
the rivers, for
bridges blocked the streams.
There was no telephone—no mail
service.
out of

Water mains were

largely

commission.

You felt everywhere you turned,
that
except for
the occupation

troops all city life was in a state

1945, the streets in most of

In

Copy

a

111.,

Aug.

20,

of suspended

animation.

Today this is all changed.
Bridges still lie in the rivers, but
a section has been cut
away and a
channel
opened
through which
boats are moving.
The railroads
are
running.
Road bridges, in a
large part, have been replaced or
good
detours
made
available.
Telephone lines are up and carry¬

ing messages. The endless
homeless
wanderers
has

line of
disap¬

peared.

1947.

While very few

been

repaired,

and

there

buildings have

you

will see here

behind

ed, and I

We See It

As

■

"

only

-

can

hope

in

brief

my

re¬

marks to skin
the surface of

The Cost of Tinkering

with Prices

So accustomed has the American public become to the
underlying notion of direct or indirect price control that
many of us appear no longer to realize what is involved.
Certainly we do not seem to have even a suspicion of what
these policies are costing the world today. Many probably
have never dreamed that much of the difficulty about which
there is so much complaint at present stems inevitably from
some form of price tinkering.
Yet this is a fact well known
to thoughtful economists everywhere.
Take first the international field. We hear a great deal
of "dollar shortages" everywhere today.
We have been
informed rather dramatically that very large drafts by the
British upon the balance of their loaned dollars were neces¬
sary to make currently acquired sterling balances "con¬
vertible," and to avoid "discriminatory" purchases of goods

countries other than the United

in

sense

seen

all this may

States,

In

technical

a

well be true—although it remains to be

whether release from contract restrictions in respect

of these matters does very

a

subject, and to

highlight
some

intimate

observations

gleaned in

my

executive

ca¬

pacity

Pres¬

as

of

Co-

lonial

Air¬

ident

Sigmund

Janas

lines.

think,

I

Unfortunately,

has been written and

much

spoken on

both aviation and
transportation by many who
lack the qualifications to speak
with authority on those subjects.
Let
me
assure
that even
you
the subjects of

air

though I have been either directly
or

indirectly engaged in the busi¬
of air transportation almost

ness

since its

inception in this country,

(Continued

on

page

22)

much to relieve the situation.

few appears to understand is that
back to the dollar price set for the pound
sterling.
"Convertibility" of current sterling balances
means in this case convertibility at an arbitrarily fixed
dollar-pound rate, and it is this fact which is, of course,
responsible for the embarrassment of the British. It is
(Continued

on

page

address

*An

What very, very

by

Mr. Janas be¬

fore the New York Society of Se¬

all this goes

boarded-up

broad

so

curity Analysts, New York City,
Aug. 20, 1947.

30)

State and

(Continued on page 28)

Havana

Municipal

1111

Lithographing Co.

R. H. Johnson & Go.
Established

STATE

MUNICIPAL

AND

1927

Bonds

BONDS

INVESTMENT SECURITIES

Bond

Hirsch & Co.

64 Wall Street, New
/

'

'6

York 5

Members New York Stock Exchange

HAnover 2-0600

Chicago

York 4,N.Y.

Teletype NY 1-210

Cleveland

Geneva

London

>■

(Representative)

Troy

Members

PHILADELPHIA

BOSTON

and other Exchanges

25 Broad St., New

THE NATIONAL CITY BANK HART SMITH & CO.

Albany

Buffalo
Dallas

Baltimore

Williamsport

New York Security

OF NEW YORK

Harrisburg

52 WILLIAM

Springfield Woonsocket

Bond Dept. Teletype:

Raytheon Manufacturing Co.

SERVING SOUTHERN CALIFORNIA

Bond

Preferred

$2.40 Conv.

SINCE 1927

Solar Aircraft Company
90c

U&gensetlerSDurstJnc
Investment Securities

Distributors of

S.

SPRING

ST.

*

Corporate

Securities

ANGELES

OTIS & CO.

14

(Incorporated)
CLAREMONT

PASADENA

•

REDLANDS

MEMBER LOS ANGELES STOCK EXCHANGE

TELETYPE: LA 68




New York

Cincinnati

Chicago

Columbus

Denver

Toledo Buffalo

NEW YORK

Portland General

Brokerage

Electric Company
Common Stock

for Banks, Brokers
When

and Dealers

Distributed

ira haupt&co.

Hardy & Co.
Reynolds & Co.
120

CLEVELAND

THE CITY OF

Preferred & Common

Members New
rembers

Established 1899
•

OF

Toronto

*Prospectus on request

TRhtlly 5761
IOS

Montreal

Company

Universal Winding Company
90c Conv.

CHASE

1-395

Service

Preferred

$1.25 Conv. Preferred

Municipal

and
626

Conv.

*Twin Coach

Underwriters and

THE

NATIONAL BANK

HAnover 2-0980

Teletype NY

New York

NY 1.708

»

Dealers Assn.

ST., N. Y.

Bell

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Scranton

Pittsburgh

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Department

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Telephone:

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Bell Teletype:

NY

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York

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«-

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COMMERCIAL

THE

(810)

Arden Farms Co.

-

Rights*

D.NEWBURY*

'-By F.

"

Louisiana Securities

'

of management and of organised labor

Industrialist ascribes mental chasm in thinking

request

J

Westinghouse Electric Corp.

Director and Former Vice-President,

22nd

September
on

Alabama &

labor-Management"

Common

Memo

Thursday, August 28, 1947

Prices, Wages and Profits—A Plea for

Preferred

*Expire

FINANCIAL; CHRONICLE

&

das to differ-:

as

Bought—Sold—Quoted

principles, and holds probleta of correction is one of education to bring the two
together. Contends profits in relation to investment have been declining, and points out high profits,
high productivity, and skillful management ate essential to full employment and high wages.. Denies
monopoly is an increasing factor in industry.

ent sets of economic

New York Hanseatic

Corporation
7-5660

BArclay

Teletype NY 1-583

•

I have been asked to talk about

I

prices, wages, and profits as management

going to do this, but I have added a sub-title to this address: A Plea for Labor-Man¬
agement Understanding. I have one purpose only: to bring to your attention and to em-

p

Savoy Plaza
3/6s, 1956

h

a s

i

Class "A"

Vapor Car Healing
Common

York Curb Exchange

Members New

31 Nassau Street, New York 5
Telephone COrtlandt 7-4070

Teletype NY 1-1548

Bell System

that

I wish to

the

three

2%s, 1962
i

.•

•

Bought-—Sold-—Quoted
Prospectus

Request

on

New

of

how
views

(2) My second point is that
less labor

labor economists

un¬

and

management learn
to;talk the same economic lan¬
guage—to believe in and apply the

bring to your attention

points that result from this

economic

same

is

mental chasm:'

little

chance

that

labor

semblance
of argument or

any

F.

D.

Newbury

I

interested

hot

am

trying to convince

you

that

in

reached different
lems

man-

about

profits,
*An

by Mr. Newbury
Labor-Maftagement
Conference, New York School of
the

Industrial

years,

Relations,
Cornell University, Ithaca, N. Y.,
Aug. 21, 1947.

the

fundamental

and

economic

is

£

prob¬

depend

on

of

labor

Members Baltimore Stock

educating

120

of¬
to

Exchange

Broadway, N. Y.
WOrth

officials,

supervisors

and

11

Permanenl

management

executives,

5

2-4230

"

Bell

■

Teletype NY 1-1227

a

common

understanding of the fun¬
damentals of joint problems. For¬
get

what

both

lbok at

differently

so

direction

generation

and

forget

lationships

Sweets Steel

all hope

we

education.

new

ficials

and par¬

Labor and management

these

this

of

progress will

duction.

andr Labor

in

lem

ticularly during the past two years
of reconversion to peacetime pro¬

address

before

the

as

(3) My third point is that prog¬
ress

prob¬

prices,

wages,

over

to

answers

well

as

Printing

Wabash R. R. Com.

they will.

important.
They determine the
way
labor thinks and the way
management thinks. Consequently
labor
and
management
have

avoid

to

cooperate

Hosiery

National Dyeing &

derstand each other's position, and

wish

branch offices

our

Interstate

and

believes in one set of
economic principles; organized la¬
bor believes in a very different
set of principles.
Principles are
agement

sub¬

NY 1-1557

May, McEwen & Kaiser Co.

principles-—there

important eco¬

While
this, I

Exchange

Elk Horn Coal Com. & Pfds.

management will get together, un¬

jects.
doing

Stock

Orleans, La.-Birmingham, Ala.

Direct wires to

well be talking two dif¬
languages without benefit
interpreters.

(1) My first point is that man¬

nomic

York

St., New York 4, N. Y.

HAnover 2-0700

as

these

on

moment

Conv.

from

come

.

ferent

and from labor officials/;

debate. At the

Public Service of Indiana

demonstrate

to

different they are from the

thinking of
organized la¬
bor

Vanderhoef & Robinson

merely

are

separates the
thinking of
management
from

might

agement's views are right; I am
interested in telling you what they

Grand

New

25 Broad

the

z e

mental

Canyon—that

Savoy Plaza

Members

am

vast chasm—a

>

Steiner, Rouse & Co!

them.

sees

'

.

,

,

,

York 5

120 Broadway, New

t

i

\

too

change

re¬

they

Mr. -Reuther

what

I

set

believes;

believe.

in

them.

We

are

opinions

our

The

hope

of

on

page

to

Central States Elec. (Va.)
Common Stock

26)

(Continued

real

Detroit Int'l

Bridge

Reiter Foster Oil

McDonnell &fo.
Members
New
New

120

Stock

York

Curb

York

Exchange

By

BROADWAY, NEW YORK S
Tel.

REctor

.

2-7815

sound

Olctual "HVafkeX^ Qu

Virginia Electric Power Co,
Electric Bd. & Share Stubs
Eng. Electric System
& Film "A"
Title Guaranty & Trust
Northern New England

New

Gen'l Aniline

Wks.
United Artists Theatre
Dumont Laboratories
Boston & Maine R.R.

United

Dye

Piece

Aetna Standard

Eng.

Punta Alegre Sugar
Warner & Swasey

Newmarket Mfg.
Moxie Common

impair

Foundation Co.
Ilaytian Corp.

or

sees

problems

of •* world

Members N. Y.

Security Dealers Assn.

St., N. Y. 5
Hanover 2-4850
Bell Teletypes—NY 1-1120 & 1127

37 Wall

our

foreign

be large¬
ly solved. But

available

commerce

America's

may

success

or

1947

the

shown,
haps

American States Utilities
Preferred

&

New

York

1923
Curb

ST.

Exchange \

NEW YORK 5

Teletype NY 1-1140

first

HAnover 2-9470

year,

would,

Max

Winkler

commerce is

even

or

indicated

in

the

ac¬

companying table.
It is evident
first that Africa has been and re¬
mains the least important of the

Europe has been

throughout

most

prevent

taker of

worsening of

new

ditions.

con¬
/

'

the

why this question is
sheer

size to which

from

"Investment

Timing," Aug. 14, 1947, published
by the National Securities & Re¬

Corporation,

New

York

City.

the

important
exports, but has de¬
clined in importance as a source
of imports, this
year and last, oc¬
cupying fourth place among the
five

search

Securities

have

we

so

had

ex¬

our

regions.

Latin

America

has

grown

Record-breaking figures for

em¬

corporate profits,
even
those
recorded

of

$9,360

million

in

last

compared
favor

our

How

year.

will be able to meet

of

almost

Latin
care

a

a

can

deficit of

and the Far East

(Asia and

\

Mgr.

York

Stock

Curb

Exchange

Exchange

New York 6
Teletype NY

1-1610

Shepard Niles
Crane & Hoist

with

New

$5

par

(5

for

1

split)

Europe
3rd

or

quarter

dividend—-60c

how

Current Market

pbssibly take
close to $2,000

14-15

million, is hard to tell.

lion

ica)

Afgr-

Asst.

Broadway

$4,807

Canada

Amer¬

39

trade deficit

$5,000 million

America

of

of

Neio

Digby 4-3122

alarming: Our favor¬

million

balance

a

KANE,

Chicago

able balance of trade with the rest
of the world is at an annual rate

European dollar balances of all
categories and holdings of U. S.

North

Members

and

greatly in export impor¬
tance, and occupies first place in
imports; The relative positions of
(Northern

MICHAEL HEANEY,

WALTER

Joseph McManus & Co.

Exports and Employment

ployment

regions covered.

raised is

changed

ica and the Far East have
usually
shown import balances.

conclusions
Dr.

this

reason

While

not

exceeding
during the war, are due, to a very
Before
proceeding further,/it! large extent, to the unprecedented
might be interesting to discuss volume of foreign trade. In some
some
of the trends shown and
respects, the size of our foreign

export-

should,
the risk of impoverishing itself

One

have

1946, an annual average; of
$5,456 million for the period of
1936-38, $9,640 million in 1929—
a banner year in world
trade, and
$4,277 million in 1913.

than
anywhere else,

a

Curb and Unlisted

port balances with all five regions
recently, in the past Latin Amer-,

in

more

our

the

Oceania)
much.

actual turnover of $14,679 million

per¬

plainly
in

for

current

for

the basis of

on

statistics

the

has swelled.

commerce

at over
$20,000 million, compared with an

should be

ure

foreign
is estimated,

half of

degree of fail¬

*Reprin4;ed

Trading Markets in

WALL

<$>-

re¬

habilitation

run

SlreeTveTOdCompanvj

Established

Members
64

purely economic grounds and desirable for humanitarian reasons, holds existing barriers
destroy ability of foreign debtors to meet their obligations and should be removed.

in order to aid world recovery and

Argo Oil

Frank C. Masterson & Co.

Corp.

an

are
the needs for American
goods and for dollars to buy them with more
concentratedly reflected than in U. S. export and import figures. If needs are held within
reason, imports (a reason of payment) increased and ways of
financing the balance found,
the

country

Time, Inc.

Research

Nowhere

whether

Lea Fabrics

and

on

questions
raised 'is

Int'l Detrola

J. P. Stevens

Securities

export deficit of $5 billions for Europe and
Although asserting America's program to aid in world reconstruction

import pic¬
ture. Impor¬
tant among the

Ilood Chemical

WINKLER*

National

foreign trade figures and

$2 billions for Latin America.
is

MAX

DR.

Consulting Economist,

Dr. Winkler reviews

Taylor Wharton Iron & Steel
U. S. Finishing com. & pfd.

Tudor City Units

t

Exchange

securities, estimated
could

thus

(Continued

at

be
on

Troster, Currie & Summers
Members

$121/2 bil¬

used
page

up

in

,

•

.

New York Security Dealers Ass'n

j

21)

Common

Buda
*

Cleveland-Cliffs Iron
Preferred

&

Common

Detroit & Canada Tunnel

Ohio Water Service
Taca

Industrials

*Prospectus
and

available
banks

Rhodesian

NY

Department

i

COMPANY

Emery Air Freight Corp.
Common

Scophony, Ltd.
British

Common

Securities

Department

Memorandum

^Georgia Hardwood Lumber Co.
Common

on

request

i

„

.

1-609
WHitehall 4-4970 I!

Goodbody&Co.
Memberi N.

Y.

J-G-White 6 Company
„

Stock

US BROADWAY
Teleybon. BArclay 7-01OO

"A":

PUBLIC SERVICE

to

only




Securities

Selection

Air Products, Inc. Com. &

Detroit Harvester Co. Com.

Gaumont-British

Canadian

G.A.Saxton&Co.,Inc.
Teletype
} 70 PINE ST., N. Y. 5

SOUTHWESTERN

United Kingdom 4 % *90

Canadian Banks

_

Airways

,

Canadian Mines
Canadian Utilities

*West Virginia Water Service
dealers

We Maintain Active Markets in U. S. FUNDS
for

Canadian

Exchange and Other Principal Exchanges
NEW YORK 6, N. Y.
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INCORPORATED

37 WALL STREET

NEW YORK 5

;

Established

Tele. NY 1-1815

i

request

Reynolds & Co.
Broadway, New York 5, N. Y.
Telephone:

Tel. HAnover 2-9300

^

on

Members New York Stock Exchange
120

1890

.

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Bell

REctor

Teletype: NY

2-8600

1-635

Number 4624

166

Volume

THE

COMMERCIAL

INDEX
Articles and

&

FINANCIAL

(811)

pa*e

B. S.

Securities Acts

What Is the Future of Air Transportation?

—Sigmund Janas

Cover

^Germany Revisited—James S. Knowlson„

Cover

—

DON'T TELL ME

2

I

AND COMPANY

A Few Problems and Some Guesses

Labor-Management

Understanding—F. D. Newbury
Foreign Trade, Loans and Prosperity—Max Winkler

By FRANCIS ADAMS TRUSLOW*

Z

President, New York Curb Exchange

The Securities Business and Securities Acts

don't know what to do with

—you

Truslow

3

The Investor Looks Abroad—Col. Herbert G. King

4

Food Prices Not Out of Line—C. Chester Du Mond.

4

Outlining functions of Securities industry as: (1) raising capital;
(2) investing capital; and (3) providing a market, Mr. Truslow

5

says

World Crisis—A. W. Zelomek

The

1;

_______

We Must Help Europe, but Keep U. S. Economy Strong

—Harry A. Bullis

tion

7

U. S. Task in Promoting World Peace—W. Averell Harriman.

9

1

10

Why Upset the Apple Cart?—John Ellis

12

Conditions—Roger W. Babson
Why Stocks Are Not Discounting High Earnings

13

Labor

Collins

—Charles J.

15

Private Investment and the Secondary Market for
GI Home Loans—T. B.

King
V

*

,

Any glance back

and

8

its

American Society of Corpoi^te Secretaries Urge Revision of
Exchange Acts and SEC Rules

t

8

Ralph M. Smith, of U. S. Savings & Loan League, Reports
Increase in Home Building
1
Nat'l Industrial Conference Board Reports Rise in
-

Jarvis Slated to Head Customers' Brokers

12

14

SEC Reports

3, 1946 Market Crash

•"No Recession," Says Labor Department Statistical Head

18

even

-—J-

21

on

27

Regular Features
Page
We

(Editorial)-

It

Page
Observations—A.

---Cover
Bank and Insurance Stocks---.,—
10

Our Reporter on

'.Business Man's Bookshelf———

27

Our

20

Wilfred

Prospective

See

Securities 1—

Canadian

Coming Events in
.."Field

the Investment

Recommendations

i

About

NSTA Notes

and

12

Estate

;—-—

—

Securities——

Securities

Salesman's CornerNow

The State

of Trade and

Tomorrow's

,■7
38

18
34

Registration

Markets

Industry
' ~

;

5

„

,

.

(Walter Whyte Says)-!-;
Washington and You
-—

40

—

^Not

13

Bankers—

—

In

29
40

14

———

Banks

Railroad .Securities

Securities

Washington Ahead of the
News—Carlisle Bargeron
Indications of Business Activity

News

3

8

the

for

Crisis

Prom

Mutual Funds

Security OfferingsPublic Utility SecuHties
— ^—

13

—

Solution

"Dollar"

22

Reporter's Report--—-

Real

Investment

Einzig—What
British

8

.

—

Dealer-Broker

May—,
Governments—

•■^See

available this
article

on

week.

pagfe

9.

f

/,

,

on

is based partly
past record, and in part
guess

the hope and expectation that
offices will continue. to be

staffed by men who are energetic
and who
have
the capacity
to
.

understand

and

accept

change.

Energy and adaptability are youth¬
ful', virtues and we will always

desperately need those virtues and
the young men who own them.
Although its
roots
go
back
nearly a century, the New'York
Curb -Exchange,
in its present
form/ is relatively young in the
age scale of great financial insti¬
tutions.
Perhaps
this
relative

t

--

7

—

period of great change.

also

Dorsey. 12

Dominion

Weekly

Published Twice

of
Canada,
$38.00
per
Countries, $42.00 per year, ,

Other

and

COMMERCIAL

Other

FINANCIAL CHRONICLE

•

Bank

Reg.

IWLLIA&I

U. S. Patent Office

B.

DANA

$25.00

COMPANY, Publishers

25 Park Place, New York 8, N. Y.

,*

REctor

HERBERT

2-9570

to

and
per

A

have some claim

to youth

brokers

and

in

the

sur¬

You have asked me to refer, in

my

talk today, to the Securities

Act of 1933 and

to the Securities

I plan to

Exchange Act of 1934.

bidding by suggesting-to
you the size of the job that may
need to be done by the securities

Record—Monthly,
(Foreign postage extra.)

under

Record — Monthly,
(Foreign postage extra.)

Note—On account of the fluctutatlons in

9576

WILLIAM

DANA

SEIBERT,

RIGGS,

President

remittances for for¬

eign subscriptions and advertisements must
be

made

of those problems will be solved—

although I
are

in

New

York

assure you

my guesses

funds.

Thursday, Aug. 28, 1947

CERTIFICATES

issue

market

quotation

records, corporation news, bank
®tate and city news, etc.).

clearings,

—

fOther Offices: 135 S. La Salle
St.,
tyhicago 3, 111.
(Telephone: State 0613);
I Drapers'
Gardens, London,
land, c/o Edwards & Smith.
.

Coypright 1947 by William
Company
Reentered

ary

as

25, 1942,
York, N. Y.,
3, 1879.

E.

C.f

Eng¬

B. Dana

>

Bond & Mtge. Guar. Co.

Securities

1909

Security Deaten deem.

REctor 2-4500—120

Broadway

The securities

Industry

industry performs

three

broad functions.
It raises
capital for industry; it invests
capital for individuals and it pro¬
vides a market, for the purchase

Haytian Corporation
Punta Alegre Sugar

and sale of documents

evidencing
industry has

Lea Fabrics

the capital which
acquired and individuals have in¬

vested.

U. S. Sugar

.

Susquehanna Mills

Sitting here in 1947 and peering
into the
not be

next

few

altogether

it may
waste of time
size of the job
years,

a

If forced to select I would say
that the job of raising capital for
.

DUNNE&CO.
Members New York Security Dealer* Aim.

25 B*oad

St., New York 4, N. Y.

WHitehall 3-0272—Teletype NY 1-M4

industry, is the primary responsi¬
bility of the securities industry.
It is this function of our business

which will, I believe, be subjected
to the greatest demand during the

Le Roi

few years. In a recent speech
D. Edie, one of the most
competent economic analysts of

Company

next

Lionel

BOUGHT

—

SOLD

QUOTED

—

time, expressed the opinion
that during the next five years
our

will

business

American

require

about $105 billions of new capital
—or about $21
billion a year—to

dollar value of business
within 5-10% of the present level.
He estimated that of this huge

support

FIRST COLONY

a

CORPORATION
52 Wall St.

annual

requirement

to

$7

New York 5, N. Y.

Tel. HA 2-8080

loans

and

similar

sources.

If

Tele. NY 1-2425

we

in

the

the

next

few

years

conditions-established

by those Securities Acts, and by

national product with con¬
sequent economic depression.
or not
we fully
accept

gross

*Ap

address

Bankers

by

Mr.

Union

the

Truslow,

Investment

Brokers Association

and

of New York City, Aug.

'

Members

Edie's

estimates, we must, I be¬
lieve, recognize that the amount
of new capital which- industry

New

be

avoid

very

great if

we

are

the

these

which

we

years

;

are

attempting

ties

industry—the

Exchange

Chicago

Exchange

Exchange,

Board

of

Exchange

Exchanges

NEW YORK 4,
1

CHICAGO
v

Inc.

Trade

Y. Cotton Exchange

j*

.a guess,

investment of

Cotton

York

And other

about

the'second function of the securi¬

Exchange

New Orleans Cotton

fc.

ahead,

Curb

Commodity

major

securities industry.

Stock

York

New

to

depression.
We
must also expect that a large part
of those requirements can only
be supplied through the work of
a

York

New

*

must obtain in the next few years

will

1856

H. Hentz & Co.

Whether

In

before

Established

'*

-4

,

DETROIT

BIdg.

N. Y.
*

'

-

PITTSBURGH

GENEVA, SWITZERLAND

(Continued on page 33)

26, 1947.

post

the

office

Act ,ol

at




are

interested in offerings of

N. Y. Title & Mtge. Co.
Prudence Co.

New

PREFERRED STOCKS

Elec.

Central States

Spencer Trask & Co.

Newburger, Loeb & Co.
Members

15 Broad

New

York

St., NX 5

Bell

Teletype

New

York Stock Exchange

Members New York Curb Exchana0

New York 4

135 S. La Salle St., Chicago 3

25 Broad Street,
Tel.:

WHitehall 4-6330
NY

1-2033

-

Boston

Glens Falls

Schenectady

C. E.

Unterberg & Co.

Members N. Y, Security Dealers Ass'n

York 6, N. Y.

Telephone BOwling Green

Teletype—NY 1-5

Albany

Corp.

5>/as, 1954

61 Broadway, New

Tel.: Andover 4690

HAnover 2-4300

Stock Exchange

Corp.

5s, 1948

Elec.

Members

WANTED

Central States

High Grade Public Utility and Industrial

Lawyers Mortgage Co.

March

Subscription Rates
Subscriptions In United States, U. S.
Possessions, Territories and Members of
Pan-American Union, $35.00 per year; in

OFFERING

We

Lawyers Title & Guar. Co.

second-class matter Febru¬

the
under

at

Y.

Bell System Teletype N. Y. 1-714

of

TITLE COMPANY

statistical

Established

Members N.

Business Manager

Every Thursday (general news and ad¬
vertising Issue) and every Monday (com¬
plete

J.K.Rice,Jr.&Co,

better than yours.

no

Functions

Earnings

Monthly

$25.00 per year.

SEIBERT, Editor & Publisher

WILLIAM D.

.

business1

the rate of exchange,
D.

year
»

Publications

Quotation

year.

arise

may

time permits, I may also indulge
in some guessing as to how a few

therefore, am delighted to accept his analysis, the alternative
exaggerate, if that is possible, the to meeting this need "will be a
the
importance of meeting you young proportionate reduction in

do your

The

that

and,

roundings of the New York Curb
Exchange.
.*•.*/*■" \1 '
*,

Financing Public Sanitation Projects—Reid W. Dig-ges—— 13
What's Ahead for Utilities?—A. M. Sakolski-.^———— 14
Growing Responsibilities in Distribution—Don Francisco'—. 15
;

U. S. Trust Co.

of the problems
in the doing. If

some

capital markets and through bank

bankers

Security Prices and Inflation—Ivan Wright and Marmot Henn\ 8
How Things Look to a Yankee Banker—Robert Cutler—-1- 10
The Tax Battle on the Potomac—Harley L. Lutz„-1—11

t

%

billion must be raised in the new

I

6

Free Enterprise—A Challenge to Business

;

suggesting

may

My

our

Finishing Com. & Pfd.

,

—Edmond M. Hanrahan

A Call for Balanced Economic Thinking—Harold B.

capacity to

this recent

Investor Confidence in the Securities Market

—Laurence F. Whittemore—

TJ. S.

—

youth is the source of that energy
and adaptability which this Ex¬
change has exhibited so fully in

SECTION TWO
(NSTA Convention Issue)

though future points of view

view.

our

As

Hoving Corp.
Jack & Heintz

differ widely from to guess at the
today, our business will which we may be called on to
satisfy those demands and .will perform in carrying out each of
adapt itself to those new points of those three functions.

!— 23

Irving Reynolds Resumes Law Practice

STREET, NEW YORK

Aeronca Aircraft Com. & Pfd.

those held

No More World Bank Bonds to Be Sold This Year, Says John
> J. McCloy

,

operated

21

_•

our

on

to how the business should be

as

21

—

Denmark Gets $40 Million Loan From World Bank

.

.

20

R. C. Patch Sees Consumers Getting More Goods_L___

de¬

mands

•

NYSE Trading and Trend of Savings Deposits for 1910-1946^ 20
ITO Charter Drafted

though

v;
.
v.
' v
business may
be enormous in their volume, and

Record Individual Incomes

in 1946

'

future
Francis A. Truslow

FDIC Reports Increased 1946 Earnings of Commercial Banks 19
Commerce Department Reveals

even

17
18

Use of American Loan

on

hazard

the guess that

17.

Court Holds Firms Violated Margin Rule Unintentionally—

Hugh Dalton Reports

will

-.15

Russia

Sept.

on

view.

for¬
ward
is, of
course, merely
an attempt to
guess,
but
I

11

Arnold G. Dana, Former "Chronicle" Editor, Dies

you

darn good prices, too.

Telephone: WHitehall 4-6551

glance
111

Postwar

and

points

Any
attempt to

9

Releases Mid-Year Budget Estimate

of

new

of

Statement

View

increased

to

Senators Bridges and Taber Attack Truman's Budget

A

adjust

procedures

o

remarkable

a

changed

to

demands

9

Consumers Price Index

99 WALL

prospectuses;

the last 50 years of the securities business

over

accept

7

Secy. Snyder Denies Revision of British Loan Agreement—

Truman

and of

registration

will reveal that that business has exhibited

.

Chicago Transit Bond Issue All Sold___

bonds.

dogs

Haile Mines

16
*

of

and pay

and

and

cats

any

be impaired by provisions of the Securities Acts.

can

(1) simplifica¬
(2) giving investing
public advance information, and (3) reduction of mandatory
period for submitting prospectus with sales. Attacks margin
restrictions as "illogical" and scores limiting information
require¬
ments to listed securities. Advocates, when
security is registered,
pledge be given to furnish future data and comply with proxy
regulations.
' v

6

.

take

have

Sees revision of Acts required and recommends:

Ruhr Coal and European Recovery—M. S. Szymczak

Market in Delicate Balance—G. Y. Billard

these

I'll

stocks

obsolete

your

—Francis Adams

3

The Securities Business and

News

Prices, Wages and Profits—A Plea for

CHRONICLE

Worcester

Tplotvoe

NY

1-1666

9-3565
i

4

COMMERCIAL

THE

(812)

FINANCIAL

&

CHRONICLE

Thursday, August 28,1947

BUSINESS BUZZ

The Investor Looks Abroad
By

COL.

G. KING

HERBERT

Member, New York Stock Exchange

1ST. J926

Col. King contends investing public has

become too much alarmed

European conditions and there is too much pessimism

over

over

England's position. Looks for revival in Britain and says economic
conditions in Russia are so bad, she must have peace.
Of late, the investing public has allowed

influenced by fears of

Abitibi Power

what

become^

now

the

V,

Diebold*

General Dry Batteries
General Machinery
Hooker Electro Chem.
Hoover Co.

Col. Herbert G. King

many a

Moxie

Nu-Enamel

Philip Carey

in

the

banking
is bringing the country a profit
that rose to $150 millions in 1946.

makes

overseas

live to

to

seems

one

hundred

-

ago, Ralph Waldo Emerson
in England and he was in¬

States.

state.

in

a

speech at
Manchester.

and

the

The

British Isles.

war

and

it

vive.

will take

must

ditions arq

The speech he delivered is

Traits" and

Stand. Fruit & Steamship
Standard Ry. Equip.

Sterling Motors*
Stromberg Carlson

in his

us

we

keep

"English

If

cheerfully and confidently he told
the British to take

prophecies of

an

of the nation.

He reminded them

laca

to his

Taylor-Wharton*

y

Tokheim Oil Tank
U. S. Air Conditioning
United Artists*

There

1847

L" Vacuum Concrete*

been

and

1848

fort

prophets "of

away

soon

for

our

By C.

market

N. Y. State Commissioner of Agriculture

Mr. Du Mond points out higher prices of food are due
mainly to
higher production costs and more food is being consumed in U. S.
because of higher individual incomes and
rising standard of living.
Foresees no food shortage here,
despite relief contributions to
Europe, and denies farmer is profiting at the expense of the rest
of the population.

long

a' well

the

part

well informed

from

mote

future.

in
The

prob¬
The

more.

as

whole,

a

considered

of

the

ef¬

far-sighted
to

men

as

adjust

are

ex¬

There is

not-to-relooks

to

seem

ize

the

hind the

Cent. States Elec. Com.
Cumberland Gas

»•*

.

\

k

*

•

infinitely

original

itable

any

than

false

European affairs.

over

prof¬

pessimism

#

at

Net Prices

t*

>«

'

because

ducer

is

j Tide Water Pwr. Com.
Bulletin

or

the
pro¬

farmer

they unthink¬

lay

Circular upon

his

finding it

with

'

Corporation

ESTABLISHED 1927

Street* New York 16, N. Y.

Telephone: LExington 2-7300

Teletype: NY 1-2948

„

request

J ? * r

r -t

•

their

make

incomes

expenses.

for

of

us

few

a

ing. Most of

in

Ward & Co.
EST.

1926

our

the

situa¬
affect

everyday

liv¬

us are

today than

we were

could
of

Convertible Debentures due 1956

Analyses

Direct Wires

on

request

LuJbetltin

Philadelphia

hnd Dos Angeles"*

i

ENTERPRISE PHONES
IJartf'd C11J

Buff. €02i

Bos. 2100




Members New York Security

41 Broad Street

formerly enjoyed meat on
perhaps twice a week
expect it every day, and per¬

&)

Co.

hours

New York 4, N. Y.

of

work,

and

vacations than

more

Dealers Association

3y, 1£46

the ex¬

articles
which
our
standard

not

contribute to

we

should

expect

sacrifices

in

conveniences

to

be

our

of

making
and

diet

living,

to

make up for the time lost in un¬

productive effort.
-

It is quite true that our national

income, which

is a total of the
take-home pay or income of all of
haps at almost every meal.
Our us, has reached a point which is
people as a whole are better the highest in our nation's history.
dressed, are putting in shorter I understand that the national in¬
now

INCORPORATED

to

Families

their tables

,

BROADWAY, N. Y. 5
REctor 2-8700

before.

ever

which

Engineering Co.

Tennessee Products & Chemical

R Y. 1-1286-1287-1288

living

better than

„

We have
all, therefore, suffered a net loss
in wealth, since. wealth is only
produced by constructive effort.
It would seem logical that instead
of expecting to live better today

our

enjoying a standard
possibly
one-quarter

are

hUlipn.

living, but material to be used

great

of

entered World War II

in prosecuting the war.

ple today

Osgood Company "B"
Wellman

Members N.Y. Security Dealers Assn.

120

4%

of

tent of approximately $28 billion
with which to pay ourselves for

lieve it to be a fact that our peo¬

Graham-Paige Motors Corporation

millions

had issued currency to

we

producing,
consider

moments

taking in more
before
the war.
We have gauged our
mode of living accordingly. I be¬

money

we

qpprQximqtely

.

C. Chester Du Mond

facts underlying the* price
tion and how those facts
each

22 East 40th

<

I want you to

me

that

in the United States amounting to
-»-.H

increasingly

Today

and

had cash available in currency

we

at

match their

V

When

predica¬

to

ab¬

destroyed by war or made worth¬
less by its ending.

the
for

:Th,ey(r

are

were

so

man-hours have been spent pro¬
ducing materials which have been

door.,

EASTERN CORPORATION

Central National

concerned

of food

the

living to

far as their
contribution to human welfare is

ment

>•■»!/*

1

Standard Gas Elec.

of

look will be

and

difficult

Federal Water & Gas
1 New Eng. Elec. System
Puget S'nd P. & L. Com.

standard

when billions of dollars

Bought—Sold—Quoted
»•

a

be

seem¬

food,

their

*

maintained* If possible, yet we
have completely forgotten that we
have just been through a period

be¬

are

and

solutely destroyed

more

subject

able

facts*

basic

ingly

i

discuss the

many

blame

>_

or

of

very

great empire took

•<«.<.

the land today regarding the

over

who consider

ing high price

Wurlitzer
>#*

Few people

real¬

bright for us, indeed, and
optimism over our domestic out¬

forgotten.

the lead in the creation of wealth

Amer. Gas & Power

great hue and cry

a

high cost of food.

which

future

CHESTER DU MOND*

con¬

a

domestic

own

prices to such values

wealthy than in the days of
a

o,n

and

Great Britain became many times

Emerson and

occupied

The horrors of pected to exist

passed

Europe and were

more

United Drill & Tool "B"

have

to

represents

countrymen in his

doom in all ages.

Food Prices Not Out oi Line

come.

investment

beautiful "Areopagitica."

Textron-Pfd. & Wts.

Economic

lems, they will profit

that earlier, John Milton had said
same

"Stop sub-letting this roll top desk!"

investors will stop worrying

tion

approaching end

m

the

en¬

sur¬

about Europe and pay more atten¬

heed to the

no

just to

last

formidable enough to

them

time to

still read how

can

her

continue, Com¬

retain their power.

England.
Prophets
predicting the end of every¬

thing.

bad

increasing and Stalin has been
slipping ever since the war ended.
The present regime there will be
very
lucky indeed, if they can

But

impressed
Emerson
most
the gloom that was prevalent

preserved for

the

have peace.
Inter¬
and privation are

throughout

Rockwell Mfg.
A. E. Staley

very

all

manpower

dissention

nal

a

from

In order to

munism

or

long time be¬

a

were

Purolator Prod.*

next

endure

in

is

recovers

and

ergy

what
was

all

she

condition,
because
a
severe
European de¬
pression was taking place, aggra¬
vated by political uprisings and
crop failures throughout the con¬

could

Russia

fore

terrible

a

the

with anybody, and
with
the
United

It will be

city

a

she
war

a

of

years

was

within

Russia, the last thing in

world

wants is

was

City

a

throughout

the end of the British

see

As for

me

least

in

be¬

Empire.

Just

banquet

revival

Britain

Great

emphasized.

make

to

I person¬

two years and that none of us will

the

to

himself

ally believe that there will be
tremendous

forgotten.

begin with, it

vited

British

the

unduly alarmed.

come

that

scare

of

side

allow

not

should

Eng¬

a

needless

some

gloomy

that the pessimism over
England?s
condition has been greatly over

tinent

Polaroid

v

of

soon

To

Majestic Radio & Tel.
Michigan Chemical
Minn. & Ontario Paper

in

speech and
profitable position in the
has
been
sacrificed be¬

market

Lanova*

i Liberty Aircraft Prod.

cian

land,.. Russia,
Greece

or

cause

Lawrence Port. Cement*

.

that

world and

The

alarmed every
time a politi¬

was

-

market

reinsurance

picture is being over emphasized
and
probably for a very good
reason, but the American investor

know

better, become

Gt. Amer. Industries

'it

city of Lon¬
largest insurance

the

is still

People who

;

K

and

esting fact that the

should

Elk Horn Coal

e

don

dole

.

1;

.'

they hear

situation.

the

brought out the inter¬

London

every

prediction on
the
foreign

Cinecolor

r

in

der

some

throughout

A recent conference of bankers

security
shud-

civilization

science

of

advancement

the

world.

time

Buda Co.

,

and

holders

Brockway Motors
.

and

many

Aspinook Corp.

>

and

world

American Hardware
-

—

financial

capital of the

Alabama Mills

a

.itself to be too much
happen abroad. Wall Street has

may

are

taking

in the past.

We must admit that this is desir-

come this year, based on March
figures, will be $193 billion. We

must understand that the dollar is

only
*An

Du

address

Mond

by Commissioner

over

Radio

Station

WGY, Schenectady, N. Y., Aug. 21,
1947.

a

instead

medium of exchange, that
of

trading goods of real
goods, we
to make the exchange
(Continued on page 39)

value for other similar
use money

V.

Number 4624

Volume 166

THE

COMMERCIAL

FINANCIAL

&

The World Crisis

Steel

The

5

(813)

CHRONICLE

Production
Electric Output

By A. W. ZELOMEK*

j

Carloadings

State of Trade
and

Commodity

Price Index

After reporting

Food Price Index
Auto Production

Industry

Business

sible with

Failures

rise

in

over-all

industrial

] previous week took place the past week.

output

above

that

This improvement

of

occurred

notwithstanding the closing of some factories because of the exces¬
sive hot weather.
This condition is of a seasonal nature and plaved
a very
negligible part in cutting production during the war, and
with the pressure of demand so great the hot weather toll

now

continues to remain small. ~
*
In the matter of employment, the number of engaged

; production
:

at

remained

a

high

level

and

in Canadian

the

on

'

:ould not

workers
a

;few exceptions were generally tranquil.
operate at a -higher percentage rate of capacity the current week.
'Output of machine tools and gauges increased moderately along with
a continued rise in demand of heavy industrial equipment and sup-

/ to

ended just about two years ago, there was widespread hope through¬
Hemisphere that the United Nations would form a foundation for perma¬

and prosperity.

<$>———

with whom I talked. It annually into the deficit econo¬
This, however,
is not only the politicians that ex¬ mies of that area.
pect a great clash between the seems to me to be an unlikely
United States and Russia, but the possibility.
If I am correct in this
petty artisans, the waiters, the cab jading of political indications in
the United States, then the state¬
drivers and the businessmen.

were

v o r

fa-

as

able

as

many
people
assumed.
The

Automotive production

.

.

.

the past week again failed to reach its

objective of 100,000 units, held down
shortages and some labor disputes.

it is at present by material
It did, howeyer, exceed the

as
~

previous week's output by 1,238 units.

organi-

requires
to lay per¬

increased about
to 207,235,000 from 198,821,000 board feet, while lumber ship¬

^4%

ments were about 4%

of

sonal

aside

below production and new orders almost 8%

below production.

Clothing production increased moderately last week, though the
scarcity of certain fabrics persisted.
The production of shoes rose
slightly and manufacturers proceeded cautiously due to price un¬
certainties. The state of shoe order backlogs, however, was small.
Civil engineering construction totaled $109,382,000 for the week

/ended Aug. 21, an increase of 91% above the previous week, while
private construction was more than IVz times that of the previous

the

when

sole

that

who

there

nor

re¬

if there were no po¬
obstacles, to bring about

such

condition.

a

You
Great

predict

would

Neither France
has the economic

litical

occur in
Europe, but it
would be a brave student of mili¬

trends

European

cannot be based on

sources, even

very

tary

stable

a

divided Germany becomes more

England

might

job

that

apparent.

probable that Canada
would be in the middle.
Fighting

seems

future!

Our

a

it.

feelings

,

Western bloc

Should there be a war between
Russia and the United States, it

our

tion
us

ment

not un¬

are

you

this feeling and that you
cannot fail to be disturbed about

consi dering

Lumber production for the week ended Aug. 9

that

know

T

aware of

business

*

plies/Output of farm machinery was limited by the difficulty to
obtain steel and steel parts.
- i
V
«

—

——

—

—

everyone

that the pros¬

pects

But I

I hoped as much as anyone that this would be true.

con¬

myself

luite

Steel production while slightly lower the past week is scheduled

whole. |

as

decline in European purchases comes about, and ]
relations between Canada and U. S. with substantial investment of U. S. funds ,

war

out the Western

vince

labor-management relations with

..

for integrated economic plan for Europe

development.

When the

nent peace

\
1

impressions gained from European trip, Mr. Zelomek contends stable Europe is impos**
holds Western Europe will not fall under Russian control. Sees

looks for closer trade
slight

/ <

divided Germany, but

a

compromise with Russia still possible, and calls
Predicts economic difficulties in Canada if sharp

L
A

Inc., and Fairchild Publications

Economist, International Statistical Bureau,

Retail Trade

know

as

Britain's

well as I do that
crisis is not a

monetary one, but one that has
been developing for decades.
Be¬
fore the first world war Great Brit¬
dispassionately as possible and to from the air. The great concen¬ ain had a sufficient volume of in¬
present the conclusions and the tration of Russia's military con¬
visible income to more than bal¬
facts
whether
or
not
they are struction in the Far East including
ance her necessary import deficit.
Kamchatka and the eastern parts
what we would prefer to hear.
Consequently, she was in a posi¬
A few months ago I visited Eu¬ of Siberia, and our own prepara¬
tion to make new investments,
tions in the Arctic, make it clear
rope and made a personal study
both at home and abroad.
This
the possibility
Zelomek

W.

A.

is
to
weigh
possibilities as

fought

would

be

battles

no

this continent, at least

on

that air power and

of conditions in various countries.

period of her greatest eco¬
political power."
Wednesday of last week was a forecast great hardships and to come in
Between the last two wars her
by President Truman of a budget surplus for the Federal Govern¬ contact with vexing economic and geographical position.
invisible income would pay for
Yet I do not believe that such a
ment this fiscal year totaling $4,700,000,000, the largest in the history political problems before I left,
import surpluses in good years,
of the United States.
confess, however, that it was not war will be fought in the near but was inadequate in bad years.
I have taken particular
This big surplus is attributed by the Budget Bureau to a phe¬ many days after my arrival that I future.
(Continued on page 24)
nomenal rise Jn revenue from excise and corporate and individual became convinced that my earlier pains to guard against over-op¬
income taxes, the new estimates placing revenue at $41,700,000,000 pessimism had been, if anything, timism in this respect and I am
too mild.
convinced that this hope rests on
compared with $37,700,000,000 in January.
Its
Lest the taxpayer entertain any thoughts of a reduction in income
You may perhaps believe that more than wishful thinking.
I

week.

Included in the

news

had

been

atomic

of

observe

to

prepared

Canada

on

warfare

in

a

was

placed
exposed

have

somewhat

the

nomic and

.

taxes, the President in announcing his budget forecast cautioned,
by pointing out the foreign economic crisis along with the cost of

possible Marshall plan for further aid to Europe might alter future
expenditures, adding that the surplus should be continued as
reserve against contingencies.
,
...

a

[

On Monday of

■,

of

the

the current week,. Henry

Ford 2nd, President

Co., announced- price increases on most of its
T>assenger cars and truck models ranging from $20 to $97.
Seven
months ago the company cut the list prices on its passenger cars
from $15 to $50, which, said Mr. Ford, "had the effect of retarding
the upward movement of prices."
However, he added, that since
that

Ford

time

make

our

Motor

"slowly but steadily
product has risen."

origin, in fact, is the economic
and political condition of Europe
depressing sight of bombed-out- and Russia and the decisive role
that will be played by Germany
buildings in England, by the ob^
vious decline of moral fiber in whether its industries are revivec
or ravished.
It may seem like r
France; I assure you, however,
that this was not the case. ' A paradox that the very acuteness
return
to
the
comfortable
at¬ of current European problems is
mosphere of the Western Hemi¬ one of the reasons why I doubl
this

■ ■"/• >'
■ ;//
■'
everything it has to keep output
"at a high level.
But the steel shortage measured against consumer
demand is expected to continue for some months to come, states "The
Iron Age," national metalworking weekly, in its current outlook for
the steel trade.
The easing off in demand for some major steel prod¬
ucts, expected by a few steel officials, has failed to materialize.
'

THIS WEEK

/ -

:•

//;

the

Let

say

most

brought

,

vide

seemed to

With

a

Divided Germany

this

Theoretically,
may

bloc

:

could

probably

be

before the Kiwanis Club of Mont¬

supported if the United States war

real, Canada, Aug. 21, 1947.

willing

to

Sherritt Gordon Mines Ltd.

•Ventures Ltd.

statement

HUT SMITH & G&
52 WILLIAM ST., N.

$4 or $5 billion

pour

*

;

A Western Eu¬

not be true.

ropean

Zelomek

Mr.

by

Mining Corp. of Canada Ltd.
Noranda Mines Ltd.

from Europe in¬
great fear of war that
pervade the thinking of

address

will not pro¬

support for this conclusion:

Stable Europe Is Impossible

A

I

back

volves the

*An

impression

vivid

-

Mines Ltd.

us

present conditions

discuss many subjects
brief period of time. Let
right now, however, that

Anglo Huroniaq Ltd.
Giant Yellowknife Gold

probability of an early war.
see if a careful analysis of

the

least

very

a

the

The steel industry is straining

caused

I hope to

me

,

explained

be

can

change in these views.
in

STEEL OPERATIONS SCHEDULED AT HIGHER RATE

has.not

sphere

the cost of things we buy to

...

impression

by the poor food in Europe, by the

Y. 5

HAnover 2-0980

Bell Teletype NY

1-395

i.

-

The inability of the industry to get

the steel ingot rate above 95%
of capacity has resulted in an important increase in steel backlogs at
many steel firms.
Unshipped order tonnage the past week was in
greater volume than a few months ago with many producers.

Portland General Electric Com. WD

The long term scrap shortage, lack of pig iron and the neces¬
sity for mechanical repairs on steel mill equipment, is expected to
/

midst of this situation
territories where the

tomers in that

some

without

area

regular source of supply.

a

LAMBORN & CO.,Inc.

Portland Electric Power 6s, 1950

time, the magazine notes. In the
some producers continue to withdraw from
freight absorption is too high leaving cus¬

plague steelmakers for

Toronto

Montreal

New York

WALL

99

Tennessee Gas &

Transmission

STREET

,

NEW YORK 5, N. Y.

Some

involving the temporary elimination of some steel products
from the market have been due to enforced reduction in steel
cases

Bought—Sold—Quoted

SUGAR

toutput because of blast furnace repairs.

Pig iron requirements for steelmaking and for merchant use are
at an all-time
high.
Because of blast furnace rehabilitation this con¬
dition is expected to be serious for several months at least.
Some
steel firms, "The Iron Age" reports, have been receiving a better
supply of steel scrap but they have been unable to lay aside inven¬
tories for

use

this winter.

Other

(Continued

sources

FREDERIC H. HATCH 8 CO., INC.
Established
MEMBERS N.

feel that the steel industry

page

on

Raw—Refined—Liquid

63 Wall

Y. SECURITY DEALERS

Street, New York 5, N.

Exports—Imports—Futures

1888

ASSOCIATION

DIgby 4-2727

Bell Teletype NY 1-897

Y.

25)

REORGANIZATION & "WHEN-ISSUED" SECURITIES

Specialists in
Domestic, Canadian

Portland General Electric

RIGHTS & SCRIP

Bulolo Gold Dredging,
>
'

Kerr Addison

Big Wedge

Josephthal & Co.

Contracts

Members

New

120

Stryker & Brown
50 BROAD ST., NEW

19
-

YORK 4, N. Y.

r




*

•

••

.

Teletype NY 1-1582

•
-

;

NEW

CONGRESS

and other exchanges
N. Y.

BOSTON 9, MASS.

ST.,

Far East

NY 1-319

—

82 William

.

4-2422

113 Hudson St.,
•

■

Jersey

.

.

.

/.

V/:
/^

*
City.-N. ^.

Branch Office

;

1

Oil

St., New York, N.

Tsl. W Hit shall

i

Bell System Teletype BS 360
Telephone to Boston and Private Wire System
To Correspondents. in Principal Cities
|
'

Mines

MAHER & CO.

YORK 5,

Bell System Teletype

Lafayette 4620.'
Direct

Tel. HAnover 2-3970

York Stock Exchange

BROADWAY,

REctor 2-5000

Ltd.

■

(When Delivered)

Stock Exchange

and

Philippine Mining Issues

"

.

6

(814)

THE

Heim With Cohu & Torrey
Special

-

LOS
rison

to

Financial

The

With Fewel & Co«
(Special

Chronicle

LOS

ANGELES, CALIF.—Har¬

B.

ciated

Heim

with

has

Cohu

become
&

asso¬

Torrey, 634
He was for¬

COMMERCIAL

lene
to

to The financial

■*}$;

uhkowille)

ANGELES, CALIF. —Ar-

J.

the

Daniels
staff

been

Fewel

of

has

&

FINANCIAL

CHRONICLE

.!

President, General Mills, Inc.

•

i

the Los Angeles Stock

With Chas. A. Day & Co.

Spring Street, members of
Exchange.

®

By HARRY A. BULLIS*

I

Co.* 453

With Harris, Upham & Co.

Thursday, August 28, 1947

We Must Help Europe, but Keep U.S.Economy Strong

added

South Spring Street.
merly with First California Co.

South

&

•

•.

Industrial executive asserts it is in

*

.

interest to prevent

our

*

,,

t

further deterioration in

rest of

X

1

world

>•

but ^

foreign commitments should not be
Special

to

The Financial

DENVER,
Davis has

Harris,

Chronicle

.

,

COLO.—George

P.

become affiliated with

Upham

&

Co.,

740

Street.

17th
,

Special

to

The Financial

■~r

Chronicle

Walcott

ated

with

has

Chas.

become

associ¬

A.

Day & Co.,
Inc., Washington at Court Street,
Boston.

Davis

as-

& Coke

Eastern

Jacksonville Coach
Company

.

.

6

S.

/

and other

&

Baltimore Stock

leading exchanges

CALVERT

ST., BALTIMORE
Bell Teletype BA 393
New York Telephone BEctor
2-3327

2

New

YorJc,

Philadelphia
Los Angeles Stock Exchanges

STEIN BROS. & BOYCE
Members New York

also

Also

fur¬

the

'

New York Curb Exchange

1420 Walnut

"

It

world, and
help
to

hasten its

Los Angeles

Pittsburgh, Pa.
Hagerstown, Md.
N. Y. Telephone—WHitehall 3-7253
Private Wire System between

eign

How¬

Harry A. Bullis
•

Only

economy.

cripple our own
if
the
United

States remains strong can it suc-s

Botany Mills
Empire Steel Co.

Walter J. Connolly & Co., Inc.
10

Tele. BS 128

mainsprings of strength in

Innovation
In

the

United

over

Company
Teletype
PH

enterprises.

73

source

Initiative
our

is

"tired,

VA.

of

our

re¬

something
defense

the,

new}

against
the

becoming like

economy

regimented

Old

World

We need to

economies."

RICHMOND.

Each is the

sult of business initiative and

potential

Stock Exchange Bldg. Phila. 2
Telephone
RIttenhouse 6-3717

three million separate busiJ

ness

PHILADELPHIA OFFICE

CLEVELAND

have

we

Drackett
Harshaw Chemical

NORTH and SOUTH

strong

system is to survive.

Only
keep busy and prosper can
help other nations to win their
way back to prosperity. We must
as

we

we

realize that the United States cannot long continue
prosperous if
the rest of the world remains
de;'

.

Must

:

v

j

Get

Facts, About Our
Economy to Peoples of

workers- and

in-

resources

the

profitable

lines.

Here

flexibility

is

price-improving

the

and

origin

of

the

adaptability,

of

American business.
This

mechanism

is

threatened

distress
ment

in

markets,

ask

govern¬

intervention

to fix prices.
quarter, they may ask gov¬
ernment to buy for foreign relief.
In another, they may ask the crea¬
tion of government-protected mo¬
nopolies: These attacks on free
enterprise must be resisted. The
In'one

eneour^

flow of purchasing power is far
the initiative which is necesJ, above average, and prices should
sary to the health and growth of be permitted to seek their
proper
small businesses.
i relative levels.
In fact, to inter¬
age

larger enterprises, of which fere with the flexibility in our
General Mills is one, we need to1 price structure at the present time
keep open many sources of inno-: would be tantamount to sabotage

can

quality of products furnishepl

the American consumer. Generous

samples
been

these

of

products

have

going abroad.

We
should inform the world
about the wages of workers in our
free enterprise system. We should

tell, too, how the tax gatherer has
fared.

He

has

garnered in about

$50

billions, with the Federal
Treasury accounting for $43 bil¬
lions, in each of the two years
since the
We

ended.

war

should
of

secret

tell

how

j

the

world

rpsults

these

the
are

attained—that management has a
free hand to produce results,, with
invested capital per worker in an
amount

that

would

be

tence for retirement in

a

compe¬

practically

other quarter of the globe..'
we
sliould tell the

every
In

short,

world

and

.

show

the

world

how

the free enterprise system works.

Next, we
should
help
those
Only by new things can of the work which we are doing to
keep abreast of progress; and rebuild our free economic system.' countries that show evidence of a
only by steady growth can owners,!
This should not be construed to determination to help themselves.
vation.
we

CAROLINA

Richardson

.

MUNICIPAL BONDS

—*

management, and labor all receive; deny that, in a period of substan¬
satisfactory financial tial price declines and substantial

the benefit of
rewards.

..••

F. W.

Field, Richards
Union Com.

Bldg
CLEVELAND *

8c Co:

\

*; V.

'

i

Investment

CRAIGIE&CO.

Investment is
a

a

unemployment,
be

requirement of,

healthy, progressive

economy.

If;

taken

and

to

should

measures

investment

expand

employment. However, at the
time,
has
employment

present

RICHMOND, VIRGINIA

Union Cent.
Bldg.

CINCINNATI

Bell System Teletype:

Tele. CI 150

RH 83 A 84

Telephone 3-9137

LOUISVILLE

business is to grow, there must be
money to put innovation into prac¬
tice and

steadily.
concerns
,.

American Air Filter

Stix & Go.

Murphy Chair Company
Varnish

*From
Bullis

INVESTMENT SECURITIES

Co.

509 OLIVE

new

STREET

at

plants:

Investment!
increased,

all progressive

reached 60 million compared with
48 .million
in
1929. -The

about

adjustments should

steadily, and
lines

of

the

of

by

on

Nineteenth

Mr.

Annual

Stockholders' Meeting of General
Mills, Wilmington, Del., Aug. 19,
1947.

1st

Floor, Kentucky Home Life Bldg.
LOUISVILLE 2, KENTUCKY
Long Distance 238-9
Bell Tele. LS

that

■''.

'

Artkraft

,'

-

'

Lima, Ohio

LYNCHBURG

SPOKANE. WASH.

Jlllllllllllllllllllllllllllllllllllllimill
Trading Markets

American Furniture Co.

Bassett Furniture Ind.
Dan River Mills

NORTHWEST MINING
SECURITIES
For Immediate Execution
of Order®
or
Quotes call TWX Sp-43 on Floor
of

Exchange from 10:45 to 11:30
A.M., Pac. Std. Time: Sp-82 at
other hours.

Freezers,
Food

Lynchburg,
Tele. LY 83

LD 11

ikiiiiiiiiiiiiiiiiiitiiiiiiitiiiiiiiiiiiiiiuik




out

us.

Maytag

"...

.

-

to

future

make

real

from foreign countries as soon ai
they have them available for ex^i
port. '
•
1
In

the

past this country has
"export-minded." We havd

more

Doubtless

summer

I

spent six weeks

seven

countries of West¬

Europe. What I saw strength¬
conviction that we in the

dent

that

in

as

in

Machines

and

sales

Outdoor

establishing

new

and

continues to be

justify

functioning domestic
We must keep our econ¬
omy strong if we are to be in a

earnings

TRANE

records.

A

price 2%

illustrated

available to dealers

between

In

will

a

country

as

willingly accept
alone we

which

by
our

special report
Air

August

lending policy.

brochure

A

of

TRANE

on

cur

copy

...

a

leader in

industry

"Business

will be sent

...

and

on

Members Standard Stock
Exchange
of
-

Peyton
<■

Spokane

Dealers

-

Underwriters

Building, Spokane
Branches at

the

appears

Financial

Heating
in

the

Digest".

request!

only

Kellogg, Idaho

and

Yakima, Wn.

COMSTOCK & CO.
Members:

CHICAGO 4
231 S. La Salle St.

Teletype CG

225
Dearborn 1501
955

EAST

MASON

PHONES—Daly 5392

Chicago

Stock

ST.

Chicago: State 0933

,

fact, today we should no mord
(Continued on page 14)

COMPANY

Conditioning

issue

woll
there

shortage of work¬

more

COMMON STOCK

are

and

and

this

imports

vigorously

imported.

the rest of the world

can

a

we

relation

imports and exports will continue
a time, but as it becomes evi?

the

maintain

call c»

we

for

ers, we

must

than

this

United

States

what

"favorable balance of trade," ex¬

porting

?.

-

The United States and Europe

;

To promote such repayment, we
should be ready to buy more goods

Home

Beverage, &
Vending
Advertising

Liquid

Signs.
Current

*

■

Imports Important

CORPORATION
Brokers

Va.

of

Commercial

Refrigerators.

Approximate

STAND Ann SECURITIES

>

discernible

going

any

as

payment to

economy.

COMMON STOCK
Manufacturers

Descriptive

Scott, Horner &.
Mason, Inc.

the

are

make
the

of their predicament;
they do this, the terms of
the agreement should require re¬
and

ened my

Manufacturing Corp.

186

work

in

we

in

future,
we should
specify conditions which
will help the borrowing countries

been

progress.

ern

nation

a

tried to maintain

is

land and

Members St. Louis Stock
Exchange

.

forth

surveying the economies of Eng¬

Incorporated
'

more

pour

as

advances

self-sustaining - economy.
so
much "catching-up"

a

There
needed

address

an

half the

even

ST.LOUIS l.MOe
•

and

more

production

be made

increasing their inf supplies at lower prices, we will
Very few other coun^- move more easily in the direction

This

BANKERS BOND ^

as

now

are

tries have attained

Consider IL Willett

Reliance

In fact,

vestment.

American Turf Ass'n

we
or

reached twice the 1929 level. Price

new

supply the
equipment.

in General Mills is
being

ST. LOUIS

When

loans

amount of private investment has

and

Tele. CV 174

(

1

tell this in terms of the amount

and

In

VIRGINIA—WEST VIRGINIA

obvious.

'

•

Dealers in

are

our economy

on

j by those who, at the first sign of

States

keep

we may expect
bring more, not less,
Other Countries
:|
prices. The essential
We should let the rest of
mechanism of our price system is
thej
free markets, without price fixing. world know about the high pro*
As some prices go down, they dis¬ ductive levels attained under our
courage expansion and the use of private enterprise economy.
We

-

Warner Company

H. M. Byllesby &

prosperity and

]

•

free

Cement

our

pressed.

-

role of

new

enterprise system are
innovation, investment, and com-i
petition.
I

Pittsburgh Rys. Co.

Traded in Round Lots

Street, Boston

The
our

Sterling Motor Truck
Nazareth

out the

..

Empire Southern Gas

Preferred

entry into
and there¬

fields where prices are declining.
leadership which events of As other
prices go up, they rep¬
the past decade have forced
upory resent a
signal for expansion in
it.
'
.*
'
such

'

Boston & Maine RR.

market place.
of

world

American Box Board

BUI

carry

We must

of if

the future' to

to

as

reconstruction needs

part

is in the high tide

economy

pressure

nations

cessfully

24 Federal

of

for¬

large

of the

freedom

means

/• Our

should not be
so

York and Los Angeles

re¬

to

vital

a

any, line of business
fore freedom to compete.

commit¬

ments

position to make advances to other
countries, especially Europe, whera

enterprise.- The competitive
principle permits price? to be
freely determined by the supply
and demand

ever,

Street, Philadelphia 2

New York

1

we

States.

free

the rest of

covery.

BOSTON

Tel. Hubbard 3790

Competition is

deterioration

to

Member of

Philadelphia, New

Prior

.,

pre¬

the
and

United

Competition and Prices

to

selfish in¬

ther economic

Request

BUCKLEY BROTHERS

.

Members

Exchanges

on

Manufacturing
.

in the

of

Data

Preferred

is

vent

Southern Production Co.

investment per worker which

have

nation,

terest to

Common

Artkraft

States

humanU

a

our

Corporation

ouj:

the

of

tarian

Inc.

*1

costs.

Government decides it is necessary to ship the necessities'
key factor in the cost of living at home. The worldwide food
shortage is the inevitable aftermath of the war. Doing our utmost to alleviate it is the

It

Bird & Son,

J
i

of life abroad will be the.

duty

Terminal

Coal

Says challenge to American industry is to increase productivity and to lower unit

-The extent to which

United

PHILADELPHIA

so large as to cripple our economy.
Sees mainsprings of strength
free enterprise system in innovation, investment and
competition, and stresses importance of ex-

our

ports.

.

-

BALTIMORE

Bayway

-

SPRINGFIELD, MASS.—Theo¬
dore

of

Exchange

MILWAUKEE

(2)

1

Teletype MI 488

(815)

From

Ruhr Coal aiul

Washington

Ahead

By

European Recovery
M.

S.

SZYMCZAK*

Board of Governors, Federal Reserve

of the News

-

By CARLISLE BARGERON

i

System

Pointing out main bottleneck of European rehabilitation is coal scarcity, Federal Reserve official asserts
German coal is essential to surrounding countries, and thus European economic recovery is based oil
increased Ruhr coal production. Sees difficulty in restoring managerial efficiency in mines, but doubts
socialization, as advocated by British, will result and looks for compromise arrangement.
,

SAJvT FRANCISCO—One of this country's

perennial political is-t
that between the proponents of publicly owned
power
and the private enterprisers. This, issue ante-dated the
New Deal
In

1

'

projects

sues is

fact, the public power proponents;

"radicals" of those

were our

davs

■

J remember back in the 30's when Homer Bone was elected
to the
U. S. Senate from the State of Washington.
He was

loudly hailed

Just about the

pennies on the

J ever to

levied

is

We

come

the

of

.out

as

have

in

nickles

West. But be¬

taxes.

gested

ter

advanced

of

atten¬

cussions

the

subject of

t his wildness

„

i

that the suggestion got nowhere at
all. But now that we can have

another

the

ference,

by

wooliness

and

;in the Nation's
.came

right.

he

I

mannered and
Carlisle

.gentle in comiparison.
;
Anyway, we've

Bargeron

homage

of

lot

a

cause
on

sales

taxes.

He
as

■' '■

' "■

■,

>v ,'1

...

heard

way

officials

coffers

-

mighty

are

publicly

the,

•by

projects,,
'you can imagine my surprise toj
-find this State levying the highest
sales

taxes

in

the country.

What;

are

audacious.

as

,

of'

level

German industry. Thus the need
for, emphasizing
the urgency of

.j

a

of coal, caused

the

again emphasizes the initia-1

people. They utterly
refute the old adage that you can't
our

of

turnip. Our'
politicians have found ways to doi
•

a

so.^hey seemingly have made
great strides
made

in

the

plastics.

nice

a

no

the
developmentof

more

remarkable

than

the

way

'Which

the politicians have
to bite off
your dollar.
;

an

bottle

of

o^
whiskey.;

bonded

mainly by the de¬

miners raised

rations for

for the deteriora-*
economic
spring of 1947. ;
The drop in coal exports is not
European nations. The Ruhr alone
used to export more than 30 mil¬ the only adverse effect of the lag
German
coal
production.
lion tons of coal per year. In 1946, in
for reasons of justice and diplo¬ Equally disastrous for Europe is
macy
we forced the
export of the lack of exports of German ih(Continued on page 30)
coal at the expense of German
has

German

;

and

soft glows in

dining

ness

of

more

room;

view

as

elegant,

,

a

the living

certain

soft¬

find in

you

cocktail

the,

rooms.

Ohicago Transit Bond

the

and

have

devised

celluloid

hues

—

the

Washington

pale
State

appealing, make

lect

of

uncertainties

of

bluish

issue Ail Sold
The selling syndicate headed by

Hall

First

Boston

Inc.,

(Aug.

&

Co.

Corp.

(Inc.),

and

announced
that the

27)

000,000issue

The

Blyth &

yesterday

entire

$105,-

of Chicago. Transit

The surprise completion
conditional

underwriting

of the

was

well

in advance of the Sept. 12 dead¬
line for selling
issue.

The

agreed
after

to

$84,000,000 of the

underwriters /

take

minimum

the

had

entire, issue

the

mark

was

reached.

of

downright

are

you

ones

want to col¬

a

in

California,

Special

to

European

the

NEEDS SKILL IN DOING. TOO!

The

Financial

responding to the depression level
Actually because of the
lack of;coal the Ruhr district, to

-of 1932.

bulk of -total
production was al¬
located, did !not even produce
half of the permitted amount. As
the. result of the'lack of steel,
heavy industrial production in the
-combined US-UK zones - of Ger¬
many also has remained well be¬
low the limits of, the level-of-in*
dustry plan. Moreover, the pro¬
duction of building materials (ce¬
ment) urgently: needed for re¬
building.; the shattered German
cities, and of textiles (artificial
fibers) also was decisively affect¬
ed by the lack of coal. Total in¬
dustrial production in the com¬
which

the

-German

great

steel

of 1936 in

39%

May and June 1947, the
period of occu¬

best months of the

pation, as against a planned level

Chronicle

''

"

«

'

'

1

'

'

t

WATCHING business and world news for touch
market (rends
keeping in indi¬
cations of

every

as

they change

business.

part of our
>

''

Putting this composite

our

.

.

day with the actual markets

security values

.

.

•

. , .

.

'

.

knowledge to the test in

trading activities completes the' task of serving

dealers

efficiently,

That this

no

they

matter where

are

been abundantly
the

demonstrated in countless instances over

.♦If you

located.

approach to the many problems of dealers

—large and small—is successful has

have not had the opportunity to

Just wire* teletype or phone us

. *.

years.

make

do

of this market-wise service, we urge you to

to

assessing

.

.

these tasks are just

we'll do

CHARLESTON, S. C.—J. Hey¬
ward

Silcox.has formed J. Hey¬

apparently

36 Broad

securities

viously

Street to engage

a

Townsend.

business.

partner

He

in

in the

was

pre¬

Silcox

&

*An

address

by Mr. Szymczak

before the Rotary

Club, Washing¬

ton, D. C., Aug. 20, 1947.
Mr.
Szymczak recently returned from
Germany where he served as Di¬
rector of Economics Division in
the
American Military Govern¬
ment.

use

so now.

our

best

cooperate.

R.W.
Telephone HAnover 2-1700

68 William Street

'

Teletype NY 1-993

NEW YORK 5

201-Devonshire Street, BOSTON 10

Members New York Stock

Exchange

~

hold-over ruggedness of its




the

situation in

SKIM IN KNOWING

steel

bined US-UK zones stood at

ward Silcox & Co. with offices at

pioneer days, they pay no attend
tion to little
chips. Their sales

reasons

in.

tion

indus¬

tries of most Central and Western

international;

production, which is the
heavy industry,
was
to be limited to 5.8 million
metric tons annually, a figure cor¬
man

metallic; J. Heyward Silcox
various Forms
Company

more of them.

But
With

little

chips

always portant

political

basis of Germany's

These higher natured tax collec-;
-tors

coal

essential for the

been

The food situation deterior¬

Ruhr.

plan
adopted in the
spring of 1946, agreed that Ger¬

comei

Woman uses in the decorating of
;her home;., the way in which she

arranges

previous

that in February, 1947t

it

industry

Authority bonds had been sold.

in

Y You find a certain refinement
about -some of them such as the

,

so

exports dropped below half of the
1496 average, and in the first five

We might say that this dilemma
is the consequence of German ag¬

racket has

Co.,

as1

development of

•achievement

months

gradually to 238,000 tons in March!
1947. Unfortunately, at that time
growing unrest appeared in the

Harris,

chemists have

our

The

is

-rayon

as

compelled

low the level reached in

Countries

scarcity1 aggression?

food

A

ingenuity of our politicians in'
levying taxes. The new ways they
have
found, their cunningness,'

out

economy

to curtail coal exports far be¬

,

is

rehabilitation

an

tax

grand and glorious country by the;

blood,

us

German Coal Essential to Other

*

get

goods, however, of the German

coal must be mined.

*

of

Netherlands

may

developments made the;
bourbon, for
tax
and ' inoutlook even more gloomy.. Output
example,
costs
around
$10
as
.municipalities
h a v e
additional
compared with a price of $5.50: dropped to an average of 212,000'
sales taxes.
Politicians used to
charged by private dealers in the- tons. Only in recent weeks did
make a great play about not ap i
production again approach the
East.
::
plying the sales tax to1 foodstuffs
March figures, after the food situ¬
You can't help but wonder what;
or the necessities of life.
Such po¬
ation had improved because of in¬
a State does with all this money—
litical timidity has disappeared in
creased imports from the U. S. and
from the sale .of whiskey, from
Washington and California. Inso-after added incentives in the form
sales taxes, from the sale of elec-;
far as public
eating places are
of other consumer goods had been
trie power. One explanation is, of
concerned, the sales tax is levied'
promised to the miners.
course, that the West Coast is a
.with seeming abandon.
:
What did the.drop in coal out¬
'■v
haven for people seeking to ljve
One
is, indeed, tremendously
put mean to Germany?' The four
impressed as he travels about our without working.
occupying powers in the level-of-

tive

coal

of

months of 1497 had reached an
lessened, but it1
be helpful to point out gression, and that it is historic annual rate of only 8 million tons
less than one-fourth of the prewar
the essential questions involved in' justice that the German
people;
those discussions. v
suffer. But what are the conse¬ level. This decline in Ruhr coal
'
The main bottleneck of Europe-1 quences for the victims of German exports was one of the most im¬
these subjects has

still

of -

their

about 60% on the cost of

heavy sales
addition,
many:

once

lack

Italian, and Austrian industries
from utilizing their full produc¬
tive capacities. In the winter of
1946-47, the catastrophic situation

of

the

consumer

de¬

production
Thus
also prevented

the

housing facilities, more cloth¬
ing, and other consumer goods. In
order to improve food production,

more

a

coal

in British coal exports.

the French, Belgian,

ter

been' de-( ated because of the unprecedented
veloped. • ' :
■
;
; \
! severity of the winter of 1946-47
But in Washington, in addition^ that hampered transportation and;
production in all of Europe, and
to. this tax there is a mark- up

if those peoples

V California, too, has

officials

shown

a

what

'

power,

-

can buy so much
pint. With the thousands of
tourists
pouring
into
the
two
States, some of them for only a
day or two, it can be qpprepiatedi

to speak, and the;
*State "to make" (even if it's true,;
Which many question) the-profit
from the. manufacture
and dis^i
still taxed in other ways?

problem

Szymczak

as

power, so

fribution of

S.

all

have before he

good does it do the people to gef

cheap

M.

-

own

and

food, bet¬

more

from

suffered

cline in their

housing conditions and the Supply

over

Washington' cline in British and German coal'
levying production. In the Ruhr, where
ability in many other ways than' the most important 'German coal
the sales tax. Both, this state
and; mines are located, daily output
Oregon have a monopoly on the' averaged some 430,000 metric tons:
sale of whiskey, and both
St§tes: before the war. In 1946, it stayed
get a handsome take from the sale! at less than 200,000 tons until late!
of permits .which everyone .must* in the fall when ah increase in;

public

•

enriched
owned power

treasury

The

have

about

the

of

cour¬

in which our State
levying them now

should be described

;

much

so

described

was

a

they don't receive

of other

the

than one-third

.

The

not our foremost public
power State. The private utilities
have almost been crowded off the;

♦are

years ago. Be-;
he who broke the ice

was

if

Having
how the

*

it

ageous man at the time.

to the private "exploiters."
The State of Washington is one

-map.

of

with
participa¬

a

won't

more

And this smaller quan¬

tries which

goods
vicious circle; the min¬
produce more coal if

delegates, is

named

Governor

was

by the editors

go

-

fellow-

a

.

who

con¬

were
than 11

we

so,

fertilizer, and this tity had to be sufficient for coun¬

going to tackle

in

year

Mississippi several

publicly owned power, how the,
!people not only get cheap power'
■but the community gets all sorts
.of revenue which would otherwise

r

to

O'Connor

had

every

convention they pay some sort of

'propaganda about the merits of

of,

meet

ers

and

tion of French

imagine that when the State

Governors

tons—less

export

of prewar.

The scarcity of consumer

leads to

the

taxes together apparently it

is all

million

prewar.

to

in turn to the lack of coal.

mining,

in-'

come

seemed mild

:

taxes and the high

in

Deal, and

'

sales

lack of artificial

German coal

bleeding heart politicians

our

the New

■iCapital,
-

are

taking place on

raised

was

culture,

Even

unable

production has

Anglo-; declined to about 60% of

taxes and such

howl

domestic

ent,

pres¬

consumption.

American dis-i This decline is due largely to the

sales

Years ago they were
sug¬
in lieu of higher income
a

\

—»—-

—

In the field of agri¬

55-60%.-

At

opportunity to
show any of

.

of

tion.

mightily
on

'

the cen-<$———-——r

come

and

smallest objects.

against the old prejudice

fore he had an

/

-

•

wooliest thing

*

tax

,

<

When I came back from Germany, about 3M> months ago, I felt that the American
public needed to b£ more fully informed of the crucial role to be played by the German
economy in the reconstruction of Europe. In the meantime, the German question has be-

<$>-

wildest and

7

GOVERNMENT,
PUBLIC

MUNICIPAL,

UTILITY,

AND

RAILROAD,

INDUSTRIAL

BONDS

INVESTMENT STOCKS

THE

(816)

8

&

COMMERCIAL

FINANCIAL

CHRONICLE

Thursday, August 28, 1947

Denies Revision of
Loan

Recommendations and Literature

Secretary Snyder says only tem¬
and partial suspension of
sterling convertibility was made

porary

.United Light & Railways
'

United

Dealer-Broker Investment

Agreement

Light & Power was dissolved after the U. S. Supreme

It is understood that the
to

send

interested

conference with British

at recent

firms mentioned will be pleased

parties the following literature:

v

-

Court

approved the SEC plan.
Since that time, little progress has
been made with the integration program of the United Light & Rail¬
Ohio Electric and

Southern

used

the proceeds to

reduce its senior

securities, which now consist of only about $9,000,000 bank debt.
several

For

Milwaukee Gas Light.

tion

equity

interest

this

in

com¬

(estimated at $17,000,000, but
possibly much larger) American
has
about
$9,000,000
cash and
afyout $30,000,000 worth of Detroit
Edison stock, held as an invest¬

pany

ment.

These

would be

resources

ample both to

pay off its own pre¬
ferred stock and finance the pipe¬

line.

But the

is

preferred

callable and there has been

fight

with

an

long
important holder,

Aijied Chemical & Dye,
prjice

non-

a

over

the

to be paid in retirement. Al¬
$40 per share, the

lied demanded

/company wanted to
(the

pay only $25
value) and the SF.C! com¬

par

promised by suggesting $33. The
company apparently is now will¬
ing to pay the latter figure, if Al¬
lied Chemical will accept it.
a

United Light filed
(ew weeks ago and

|0,000 shares of
.also filed

new

a

common stock has

plan.

a

plan
holder of

a

Allied Chemical

tried to prevent consideration of

thp official plan but without suc¬
and hearings are currently
fcelng held. The plan would per¬
mit Amercian Light & Traction to

cess,

continue in existence. Cash would

scares,

and United Light divi¬
dends with American shares. The

plan is
but

a

little vague

after

the

new

as

to

timing,

pipeline

has

been

completed American Light
would
eventually be separated
from the parent
company, through
sale or distribution.
This would
leave United Light in control of

the electric portion of the system,
copsisting of its own mediumsized operating
subsidiary, IowaIllinois

Gas

&

Electric, and the

subsidiaries of Continental Gas

Electric

—

Kansas City Power &

I4ght, Iowa Power
several

&

smaller

&

Light and

electric

compa¬

nies. United would
eventually
tire its $25,000,000 bank

re¬

of

Secretary

27,

The

has

Anglo-Ameri

retired.

or

plan would sim¬
plify the picture somewhat by
combining the three holding com¬
panies
(United, American
and
Continental).
Each publicly-held
share of American Light & Trac¬
United

receive

Light

8/10 share

the

and

than

other

a

tempo rary

suspension

of

provision in

a

the

Mr.

Snyder
this
was

made to

American

permit

breathing

a

(the official plan has the right-ofway
at present hearings).
The
major question at stake seems to
be whether United

remain in

can

of both the

control

gas and elec¬

ish had prom¬
ised to restore

in dollars as quick¬
ly as possible. He added that he
expects the British to initiate re¬
full payments

tric systems until the

newal of the talks sometime after

completed.

When the British
representatives left for London to
talk over the meetings held in

pipe line is
The major difficulty

is that American is rich in assets
and

borrowing
power,
while
United Light has a rather topheavy structure.
One step which

seemingly should be taken as soon
as possible is to retire the
7%,
6.36% and 6% preferred stocks of
United Light.
This could prob¬
ably be worked out through ap¬
plication of present net current
assets of the top company together
with some $6,000,000 cash to be
realized from retirement of Amer¬

ican Light preferred
holds
some
202,000

(of which it
shares) to¬
slight increase in

gether with a
the $25,000,000 bank loan.
tinental

Gas

should

also

Con¬

be

able

to retire its bank loan from

cash

Dn

hand

ing

perhaps during the com¬
which would permit
with the top company and

year,

merger

strengthen

the

would

position.

United

is

American

advisable

seem

to

retain

and

control

if
of

supervise the lat-

ter's big venture into the pipeline
field.
more

Otherwise, it. would

seem

logical for United to dispose

of its investment in American

tirely,
offer
to

possibly

by

Mr.

Snyder said the head of the

British mission, Sir

Wilfrid Eady,
"positively no" when

him

told

British

the

whether

asked

holders

of

its

en¬

stock

preferred

the British

Manufacturing Co.

Established 1879

which

British

the

usually

proach their problems

they will find

a

ap¬

and I feel

solution to the

one," Sec. Snyder com¬
mented in reply to a question.
present

Seek

England Public Service

Cor¬

*

American

available

Lipe Rollway Corporation—De¬

scriptive

brochure

—

Morris

York

Hanseatic

,

Mullins

Manufacturing Corpora¬

&

York

Co.,

Wall

1

5, N. Y.

M.

.

.

Corpora¬

tion, 120 Broadway, New York 5,
N. Y.

National Terminal Corp.—Mem¬
orandum for dealers only—Adams
& Co., 105 West Adams Street-

Artkraft

Manufacturing Corp

-

Chicago 3, 111.

Descriptive

and illustrated bro¬
chure—Comstock & Co., 231 South
La Salle

Street, Chicago 4, 111.

New Haven Allocations Revised

—Memorandum

plans—Vilas
Bird

Son

&

Co.—Memorandum

—Buckley
Bros.,
1420
Walnut
Street, Philadelphia 2, Pa.
Also

available

Eastern

on

memoranda

are

Corporation

Southern Production Co.

reorganization

on

&

Hickey,

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

available

is

circular

a

Week.

Prentiss-Wabers Products Co.—

Analysis—Adams

Chicago Transit Authority Rev¬
Bonds

enue

Discussion

&
Co.,
231
Street, Chicago 4,

South La Salle

Illinois.
Public

National

Bank

&

*

Trust

Co.—Analysis—C. E. Unterberg &
Co., 61 Broadway, New York 6,

Esta-

N. Y.

Co., 15 State Street, Bos¬
ton, Mass.

Stern

—

—

brook &

Christiana Securities Company
—Analysis—Francis I. du Pont &

Also available

on

Textile, Inc., and
Rome Cable Corp.
Southwestern

Co., 1 Wall Street, New York 5,

Company
White

Y.

analyses

are

Stern

&

Public

Memorandum

—

Service
—

J.

G.

&

Company, Inc., 37 Wall
Street, New York 5, N. Y.

Street, New York 4, N. Y.

Trane Co.—analysis—Loewi &
Co., 225 East Mason Street, Mil¬
waukee 2, Wis..

A.

Purcell

&

Co.,

50

Broadway, New York 4, N. Y.

members of

advises

Continental

Casualty

—Report—Geyer

&

Company

Co.,

Utica & Mohawk
Inc.

Inc.,

Circular

—

—

Cotton 11111%

Mohawk Val¬

ley Investing Co., Inc., 238 Gen¬
esee Street, Utica 2, N. Y,

67

Wall Street, New York 5, N. Y.
Also available is a detailed re¬

lar

tion, and President of the Amer¬

port

Street, New York 4, N. Y.

surance

Reed

Hartel,

the

and

Secretary

Rules

tions of the SEC.

tion,

he

points

invitation

o

f

of

and

In this

out

that

Regula¬
connec¬

at

Corporation; B. H.
E.
Gill,
Secretary-Treasurer of
Deere & Company; A. D. Marsh¬
all, Assistant Secretary of Gen¬
eral
Electric 'Company;
Irving
Reynolds, Vice President of The
Chase
National
Bank,
and
J.
Taney Willcox, Secretary of The
Pennsylvania Railroad Company,

some

held

of the
of

members

conference

a

Commissioners
the

SEC

staff

interchange

an

Union

Fire

In¬

Deere

&

Company—Study—H.
Co., 60 Beaver Street,
New York 4, N. Y.
&

Also available is
on

memorandum

a

Speculative Suggestions Among

Leveraged Rail Issues.
Diebold

Incorporated

Recent

—

basis

on

of

shipments—
Ward & Company, 120
Broadway,
New York 5, N. Y.
Fairbanks

Co.—Circular—Ward
Co., 120 Broadway,"New York
5, N. Y.
Also
on

available

are

and

Chicle
any

Canada,
on

these

asked

to

com¬

proposals and make

additional

recommendations

believed necessary.

■

-

30

Broad

Herrick,

Waddell & Co., Inc.
Special to

ST.

The Financial

LOUIS,

Herrod

has

Chronicle

MO.—Charles

been

added

to

A.
the

of

Herrick, Waddell & Co.,
Inc., 418 Locust Street; ' '

Louis C. Rogers Co. Adds
Special

to

The Financial

Chronicle

CHARLOTTE, N. C. —William
H.
Lockhart, Jr., is now with
Louis C. Rogers & Co., Johnston
Building.

COMING

Steel;
Purolator Products; Upson Corp.;

EVENTS

United Artists; Vacuum Concrete;
Fleetwood
Air
Flow;
Lanova

Corp.;
ment;

Lawrence

Sterling

Lamson &

Portland

Motors;

Sessions Co.

—

In

Memorandum—Horn-

blower & Weeks, 40 Wall Street,
New York 5, N. Y.

Sept. 19, 1947

Graham-Paige

Motors

Corp.—

Lubetkin

&

Co., 41 Broad Street, New York 4,
New York.

Also

available

Field

(Chicago, 111.)

Municipal Bond Club of Chi*
cago Outing at Knollwood Coun¬
try Club.
Sept. 19,1947 (St. Paul, Minn.)
Twin
Annual
view

Analysis—Seligman,

Investment

Ce¬

Diebold;

Giddings & Lewis Machine Tool

are

With

memoranda

corporations of the United States

ment

Plohn,

Taylor Wharton Iron &

Company

secretaries of the larger

Charles

&

regarding these proposed

Society, which

—

staff

bulletin—Giving earnings for first
six months and indicating annual
return

Woodall Industries, Inc.—Circu¬

Company.

the

Cement

already

National

on

Hentz

the

SEC, a Special
Committee of the Society com¬
posed of John H. Mathis, Chair¬
man, who is Secretary of the Lone

includes

YORK 6, N. Y.

on

the Railroad Developments of the

National Dairy Products Corpora¬

and

Co.

Wall

and
;

Celanese Corporation of Amer¬

Broad

suggested revisions.

which resulted in

&

Kid¬

Street, New

Colonial Mills—Memorandum—•

Members of the

Gilbert J. Postley

T.

Sitkoff, 40 Exchange Place, New
York 5, N. Y.

C. I. T. Financial Corporation—

Society of Corporate

Secretaries

Street, St. Louis

2, Mo.

der

Analysis—Hayden, Stone & Co., 25

modifications.




300 North Fourth

tion—Memorandum—A.
*

Arden Farms Co.—Memorandum

Edward

of views

to

Southern

&

*

—New

SEC Rules

with

$6 & $7 Prior Pfds.

Wire

Commonwealth

Changes in

Securities Acts and

has

Direct

stocks

poration.

great

all
members
of
the Society
calling their attention to various
changes that this organization in¬
tends to propose in the Securities

U. S. Potash Co.

BROADWAY, NEW

suggested

a

common

situ¬

with

Wellman

Professional

of

—Newburger, Loeb & Co.,
15
Broad Street, New York 5, N. Y.
Also available is an analysis of

con¬

Society of Corporate Secre¬
taries, Inc., has addressed a letter

Paine,Web»h, Jam & Cuius

29

the

for

—

ation is. serious, but I have
confidence
in
the
energy

Star

New

Portfolio

a

"I think

States.

Acts

Crowell-Collier Publishing Co.

New

"B,"

John Irving Shoe CorporationAnalysis—Edward D. Jones & Co.,

Also

275

revision of the agree¬ ica — analytical memorandum
ment clause prohibiting trade dis¬ Laird, Bissell & Meeds, 120 Broad¬
crimination
against the United way, New York 5, N. Y.
templated

exchange

an

common

Liberty Products Corp.
Rockwell

—

state¬

Company

ican

of American

the

Washington, there was a general
understanding for discussions later
should the British request them.

debt

Osgood

Engineering Co., Tennessee Prod¬
ucts & Chemical.

N.

overall

Clarification of the financial pic¬
ture

September 19.

Circu¬

are
Jersey
analysis of
municipalities—Ira H5upt & Co., National Alfalfa Dehydrating &
Ill Broadway, New York 6, N. Y. Milling Company and Puget Sound
Power & Light Company.

Brit¬

that the
John W. Snyder

—

Municipalities

revised

over

spell and said

The SEC staff has not yet indi¬
cated its findings on either plan

to

Buckeye Steel Castings

of

_

Trading Markets in Common Stocks

Manufacturing Co.

ments

of

$15,000 portfolio of

change

debt, and stocks.

Bates

Jersey

requirement.

dividend

asserted

on

New

Analysis

sterling

thus being equalized to the

$1.20 rate long paid
Light.

Stocks

Man—Tabulation

on

come

Insurance

discussing depressed values
in a rapidly expanding industry
—Laird, Bissell & Meeds,
120
Broadway, New York 5, N. Y.

convertibility

oi

the latter (now $1) would
be raised to $1.50, the share in¬

rate

Fire

lar

Loan

c a n

Ag reement,

Fierman

would

Treasury

Snyder denied that any
been made in the

W.

preferred stocks would doubtless
be refunded

August

on

the

$18,900,000 high-dividend-rate •

.

be conserved by paying American
dividends
with
Detroit
Edison

conference

a news

revision

the

To finance

At

John

American $>—

years

Light & Traction, the other subholding company, has been trying
to obtain SEC approval for the
financing of an $80,000,000 natural
gas pipeline system which would
supply the gas
(now ' obtained
through Panhandle Eastern Pipe
Line) for its big subsidiary, Mich¬
igan Consolidated Gas and also for
the

representatives.

Continental Gas & Electrical disposed of Columbus &

system.

ways

City Bond Traders Club
Golf

Party at the SouthCountry Club.

Nov. 30-Dec. 5, 1947

(Hollywood,

Fla.)

Investment Bankers Association
Annual Convention at the Holly¬

are

analyses of

wood

Beach

Hotel.

Number 4624

Volume 166

THE

COMMERCIAL

&

FINANCIAL

U.S. Task in Promoting World

CHRONICLE

Peace|Reports More Rapid Home Building

By W. AVERELL HARRIMAN*

U. S.

Savings and Loan League holds it is one of the most hopeful
signs in building picture.

Secretary of Commerce

-

reviews economic and political developments in Europe and Asia since World War I
although the old imperialism has declined, a new and more threatening imperialism—
the Police State
must be dealt with.
Says task of U. S. is to assume leadership in upholding demo¬
cratic concept of government and to afford support to democratic nations. Holds Russian vetoes should
not block our pledge to maintain world peace, and lauds Marshall Plan.

Secretary Harriman

Most of the homes tor which ground is being

and notes, that

The first World War'with its vast cWrnnti™

ut

development of what we call western civilization

be

can

broken this month
the scene of Christmas house-warmings. This
prospect
f o r®
more
rapid it in the speed with which both
completion of conventionally built and manu¬

planned as

.

has

y affected the

*

exchange

regulati

T

P °uUppassports, immigration
by t0 1914 men'ideas and

astations

seriously

age

far

perfect
there

and

but
had

been

direc¬
toward

so

•

had

"

:

/

y

he

World

following the first
World War were literally a period
of crashing empires and breaking
of nations. The great czarist em¬
pire of Russia, occupying a sixth
of the surface of the globe, fell
and there arose m its
place^ tn
revolutionary Union of Soviet So¬
cialist
Republics.
The. Austro-

dismem¬

Hungarian Empire was
New states came

into be¬

ing, such as Poland,
vakia, Yugoslavia, Finland,
tonia, Latvia and Lithuania.

^ze^hos1J,®"
Es¬
*

Germany's attempt to establish
a
democracy failed to
pve eco¬
nomic stability, and Hitler seized
power.
The Italians to escape
their misery turned to Mussolini.
The Ottoman Empire lost its hold

Pal®s*to

peoples of Iraq,

the

J ap an

Lebanon.

and

Svria

'

emerged from the war richer and
thirsting for more spoils of vic-

Britain

was.

.attain

years

that

fight. Fortunately for
world, how wrong he

period
War

of

bered.

thrown into

was

thought

not

and the

us

•The

C

on

rope

following the first

varying degrees
chaos and revolution
saw

a

and

The

that

of

part

large

the

of

^earth. But it was in Russia where
a
group

of

most aggressive

the

revolutionists

of

time

all

seized

power and by their programs have
profoundly altered the course of

human events.

No

one

no

doubt it will affect

out

can

us

lives and beyond.

our

fore¬

Yet there is

tell its ultimate, end.

through¬
It is the

great issue of our times. It exer¬
cises so
powerful an influence
that it has split the world rough¬
ly into two groups.

At the risk of

great oversimplification I should
say that in one group are those
who believe in or aspire to

are

Rights with all of its hu¬
implications.
In the other
those who neither believe in

nor

aspire to a Bill of Rights.

Bill of
man

World

second

The

man's first real
continents
losses

of

were

the

War

was

World War. A1
involved.
The

war

in

men

and

property stagger the imagination
The effect upon the economies o
attempt to estab
lish order under a republic failed most of the world has been shat¬
from forces both within and
tering.
This war—like the firs
World War, but to an infinitely
greater degree—has been followed
by unrest, chaos and revolution
p«-W«■ ->« varying in degree and intensity
from country to country.
there were tremendous changes li
Colon¬
ial peoples, for centuries under
political
systems
and
tutelage or domination
o"
ments.
There were such s^fUngs the
of people, boundaries and trade as western powers, are being given

China's

tory.

had
so

before been known in

never

brief

their freedom.

We ourselves have

Philippines.
India
Burma and Ceylon are becoming
free dominions within the British
Commonwealth of Nations.

DesP'te alM

period.

a

mental

We

as

a

the

freed

of

mittee

fundaj-

two basic

human

there

is

by the people in

learned

or

guise of
fascism, there is a

n

-

statistics

home
Col. Ralph M.

Smith

the

back

trend

front to¬
ri ica ting
a

the

to

build¬

ing

that wherever there's dictatorship,

under the

Savings and
League

from

country we

have

States

Loan
i

decision

free

any

We

friends.

■

the

of

United

organization.
people have learned that
of

wherever

have

the

of these

nature

concepts

communism

unrest,
individual freedom and a
more secure physical throughout

greater
better

effects

re¬

misunderstanding

whether it be

Renaissa nee
to

•

not

heavily in her domestic and
strength that when Hit¬
planned his conquest of Eu¬

would

gling
ever
since
the
.»■

the

wealth

had

ing and Home
Owning Com¬

:

Let there be no

three-to-five

period for completion of homes.
security and prog¬
Col.
Ralph
M.
Smith,
West
ress of free men.
Somerville, Massachusetts, chair¬
The seizure of power can come man of the committee, cites the
by the use of military force but fact that more than 2M> times as
more insidiuosly through the use
many homes were completed in

threat

the

to

-

.

weapon—that of infil¬ the first seven months of this
tration by seductive propaganda year
as
during .the same '1946
and false promises. We must rec¬ period.
He said that the experi¬
ence of the savings and loan as¬
ognize that this has had a meas¬
ure
of success in all
countries sociations and co-operative banks,
of

a

new

including our - own.
Citizens in which are now placing 22.2% of
loans fo r construction
of
every country, some of them well- their
new
intentioned people, have become
homes, is bearing out the
consciously or unwittingly, the good news of the approach * to
normal in the time required for
agents of a foreign power agains
their own country.
building homes.
•

The United States now finds* it¬
self

overwhelmingly the strong¬
power to meet this threat to

est

pleasanter

outlook

could close

our eyes

has

that

bearer

made

us

Fortunately,

that

learned

be

completed
new
places to live as the fruit of the
January-July ' building
period,"
428,700

for us if we said Col. Smith. "The carry-over
to the destiny from 1946 was 275,000 to 300,000
the standard- incompleted
houses.
When we

freedom.

of

have

we

would

It

institutions.

free

"The Bureau of Labor Statistics

counts

we

cannot

subtract
we

realize

the

428,000,
somewhere be¬

from

these

that

again turn our backs to the world; tween 130,000 and 155,000 units
that we must for the preservation started the early months of this
of ourselves and our own way of year have been readied for oc¬
life do our full part in re-estab¬ cupancy by July. This would have
lishing economic and political or¬
der. We understand that we must

peoples to help
preserve their free

free

other

help

themselves to

We

institutions.

also

should

not

sight of the great and prof¬
opportunities we have to

lose

to include some started as late as

March

and

April

since

two months of this year

"This is

the first
accounted

starts.

for only 84,000 new

of the most hope¬

one

signs we can discern in the
building picture. Not only did the
help
the
backward
peoples delays in completing home during
through financial and technical the first year and a half after the
aid to raise their production es¬ war
contribute to
the
cost
of
sential
for
the development of homes, but they also meant that
ful

itable

institutions.

free

Task
In

progress

U.

of

undertaking this

slowed

was

in

down

overcoming the shortage.

S.

great task
have in

"Experience of the savings and
loan and

co-operative bank man¬
agers,
whose institutions furn¬
principal factors. First ished
approximately $386,165,000
and foremost, we must preserve
for new home construction the
and strengthen our own life in
first half of the year—an increase
this country.
Our American sys¬ of
42%
over
new
construction
tem is far from
perfect.
It is,
I

feel

that

we

factured

homes

for

living.
techniques
many way."

made

are

ready

war-developed
be
utilized
in

The
can

Build¬

Home

—
people their

of the

ler

strug¬

been

•

their

France

~~

interests

decisions may be.

overseas

man

course

W. Averell Harriman

reduced
from

however

war,

?m0rJ? destructive second
World War. Britain, too, had lost

by
zigzag

a

~~~
real

w

the

which

the

conflict when she

progress

tion

of

vigor.

covered

enlight¬

ened

on earth.

buman and material dev¬

,.

was

from

The

in

p?ople per caPita

Th*

o n s.

the

been

post-war pace
is read by the

goods were moving freely about the earth lareelv »nhal"pered
*
restrictions*-argely ,,nw
and

than

homes

„

j

In

9

(817)

should

mind four

Reports 0.5% Rise in
Consumers Price Index
National

Industrial

Conference

Board finds purchasing power of
dollar at mid-year dropped 12.7
cents

compared with

(

previ¬

year

Variation not uniform in all

ous.

localities.

*

~

'

■'

The

June,
for

consumers'

1947,

'

'

L

^

^

^

price index for
above that

0.5%

rose

March, 1947, according to fig-*
just released by the National

ures

Industrial Conference Board.

The

index for June 1947 stood at 125.4.
Previous

highs recorded were in
(123.1) and March 1947
(124.8 revised). Base date of the

June 1920

series

is

Over

1923

the

100.

as

•

previous

:

(June
1946-June
1947)
the
weighted
average of all items in the index
climbed 15.9%.
*
year

.

in

Expressed

purchasing
at

stood
This

represents

from
12.7

the
dollar

dollars,

1923

power

of

the

1947.

79.7 cents in June

March
cents

drop of 0.4 cents

a

1947

from

and

June

drop

a

of

1946.

City-by-City Changes
In

of

21

in the

the

66 cities

included

the index was un¬
changed
or
lower.
The
cities
which showed the greatest decline
are:
Macon, Ga. (down 2.0%);
Birmingham, Ala. (down 1.7%);
Chattanooga, Tenn. (down 1.6%);
and Dallas, Texas (down 1.3%);
Cities showing
the greatest in¬
crease are:
Erie, Pa. (up 4.2%);
New Orleans, La. (up 3.5%); and
New Haven, Conn, (up 3.3%). The
index
remained
unchanged
in
Cincinnati,
Ohio,
and
Lansing,
survey,

Mich.

Changes

by

Component

Index

During the second quarter of
1947, sundries showed the great¬
est increase, up 0.9%. During the
same
period, clothing was down
0.9, which is the greatest decline
noted among the major compo¬
nents of the index.
During the
second

quarter, fuel and light was
the losses or
down 0.3%.
*
made
Then the world, as n°w looking
Food, which was up 0.7% from
March 1947 to
June
to the United States saw that it
1947, rose
But a new and more threaten¬
loan volume for the first half of
had emerged from the war rei
our
virtue
and our 1946—is in line with the statistical 31.9% during the 12 months (June
ing imperialism—that of the po¬ however,
atively unscathed and stronger lice state—has come into
the strength that we are constantly analysis of new homes begun and 1946-June 1947).
searching for its
imperfections
than any other nation
Over the year (June 1946-June
Tinniir world. This imperialism has sub¬ even though our political parties completed. Many of these man¬
But we were so engaged in our
1947) the following changes were
merged not colonial peoples but
agers tell us that homes can be
do not always agree on what they
own problems of
expansion
completed in their localities today noted: clothing, up 11.2%; fuel and
ary nearly all of those who live in
readjustment that we paid little eastern Europe, and it threatens are and how to remedy them. in about the same time
light, up 3.9%; and sundries, up
required
struggles to regain

the

war

little progress was

attention

what

to

going

was

elsewhere.

to

engulf western Europe.

•

Divergent Concepts of Human

Future
first World

Important Factors in
The aftermath of the

War

was

factors

marked by three

of transcendent importance

future of mankind.

First,

the

enormous

dama£e

and eco

done to the manpower

-

Organization
Now I want to

repeat that there

today two widely diverg¬
ent concepts of human organiza¬
tion—one that has or aspires to a
exist

rights, and one that neither
aspires to it. Expressing
it another way, there is one con¬
bill of

has

nor

Nonetheless,

the need for

decades

the

vances.

ready ta face

change and through
make salutary ad¬

We have afforded greater

happiness
men

we are

have

and
ever

prosperity
known.

Of

than
first

liberties and second is the

pansion of our productivity.

and France

situation
some

progress

with

varies

having

(Continued

on page

37)

and

more

will

soon

west

before

Trade

Seattle

the

Pacific

Northr

Association

Chamber

of

t

and tne
Commerce,

Seattle, Wash:, Aug. 18, 1947.




education must con¬
Information is rationed to

controlled

form.

infallibility of those
however adverse to the

support the
in power,

Special to The Financial Chronicle

Holt,

Lewis &

Jr.,

is

with

—

Corrie

McDaniel

Co., Jefferson Building.

INCORPORATED

Wholesaler and Retailer
Investment Securities
Our

Trading

of
•

Department

REAL ESTATE

SECURITIES
★

★

★

specializes in real estate bonds
and

stocks, title company and

bank participation

certificates.

SHASKAN & CO.
Mombort Now York
Mombori Now

DIgby 4-2370

Boston
Teletype NT 1-1948

V.

Amott, Baker & Co.

150 BROADWAY
39 Broadway, N. T. 6

GREENSBORO, N. C.

surpass

;

riman

With McDaniel Lewis Co,

than others in combat¬

probably

un¬

,

locali¬

made

ex¬
nitely on our way to the old
The timing in the building of homes,

the
two great democracies of the west cept where governments are es¬ ACTIVE MARKETS
who had supported a huge part tablished to serve the individual,
and the other, where the individ¬
of the structure of the world, sec
50 BROADWAY
ual must serve the state. The first
ond, the rise of the Union o:£
Bonds and New Common
viet; Socialist Republics, its sys¬ is the concept that the people are
tem totalitarian Commun^m ami to be trusted and on them, after
its concept of worldwide revolu¬ free and open
discussion, must
rest the ultimate decisions. Gov¬
tionary Marxism; third, tne ac
80 JOHN ST.
ernments must respond to their
celeration of the desires of co
4-5s 1950
ial peoples to gain their freedom. wishes. The other concept funda¬
mentally distrusts the people as
As for the French, prior to 1914
an
Bought—Sold—Quoted
ignorant mass. It is the few
they were in some ways the ric
who have seized power who know
*An address by Secretary Har¬ best; the people through force and
SIEGEL & CO.
omies of Britain

the

ties,

in 1940. Of course

importance is the preservation of ting the delays, but we are defi¬
our

remained

Housing
changed.
8.9%.

for that process

NEW YORK 7,

N. Y.

Philadelphia

40 EXCHANGE

Stack Exchang*

v

York Curb. Excbongo

PI., N.Y.

BoO Tolotypo

Dlgby 4-4950

NY I-9S3

FINANCIAL CHRONICLE

&

COMMERCIAL

THE

(818)

10

losses of the three groups

in 1946.

aggregated $33,132,032
against premium receipts of $62,325,982, which gives a ratio of

Their losses

Bank and Insurance Stocks

53%.

By E. A. VAN

Mutual

DEIISEN

companies favor bonds

ip their investment portfolios to

This Week

119943040—

insurance

1

ance

Insur-

according to figures tabulated in "Jhe Spectator

Lloyds and Reciprocal
included, the annual total exceeded $2 billion, viz.;
If the volume written by

Year Book."

Underwriters is

greater extent than do the stock
companies. Their respective allo¬
cations of aggregate admitted and
invested assets on Dec. 31, 1946,

' "

'

:

;

'•

-

Spectator,"

reported by "The
follows:

as

compare as

ASSETS,

'

TOTAL

OF

81,

DEC.

aggregate

accompanying tabulation shows the year-^by-year

The

arid mutual companies,

written by stock companies

*

988,334

.1927

128,330

980,105

89.0%

-

1,108,435

bonds

stocks

11.0%

990,605

141,351

1,131,956

1,179,632

87.1

918,039

153,495

1,071,534

787,019

142,233

680,521

12.9

85.7

14.3

84.7

97,391

777,912

87.5'

112,190

84.7

802,870

83.8

83.9

1936

759,429

131,426

890,855

85.2

831,622

140,506

972,128

85.5

782,204

139,469

921,673

84.9

;

142,128

956,642

85.1

156,298

1,088,372

85.6

14.4

1,258,823

85.4

o:

Investors

100.0%

in

insur¬

fire

sound

stocks

have nothing to fear
competition of the mu¬

from the

tuals.

f

'

"

I

.

.

t

*

183,206

14.9

83.5

16.5

1944—

1,154,056

217,764

1,371,820

84.2

15.8;

tant

1945—

1,252,253

251,769

1,504,022

83.3

16.7

a

1946

1,658,308

321,801

1,980,109

83.7

16.3

*Average.

■

,

'

'

.

ring

14.6%

*.

The average

1926

ther

would
in

recent

In 1946 their share was
compared with 16.7% in

Receipts

(Based

on

the

the

stock

companies,
who serve the public more widely.
In consequence, the underwriting
experience of the former is gen¬
profitable.

Fo? ex¬
ample: In 1946, total losses paid
by the stock companies aggregated
$731,337,992, which represented
44.1% of premium receipts for the
year; losses paid by the mutuals

Year—

Companies

1937i___

1938-

34.6%

48.3

—

1940

37.7

45.0

__

1939--

1942__»i.

37.6

' 43.8

38.4

55.0

__

36.4

.

„

1943—-

—

1944-—-

47.2

J-

1945—n_

—,

1946—

j

•

33.1
37.7

1

•

34.1

;

40.9

50.0

:

'

48.1

i

;

44.1

—

,

totaled

$131,683,291 or 40.9% of
premium receipts. In recent years

10-yr.

tbe respective ratios have been
follows:
,
.

36.9%

NATIONAL BANK

and

of INDIA, LIMITED
Bankers

INSURANCE

Head

STOCKS

to

the

Government in

;

Kenya Colony and Uganda

>

Office:

26,

Gordon

Y.

position to
respond more vigorously to favor¬
able than, to unfavorable news.
This is merely another way of
.

saying that the stock market is in
a
relatively strong rather than
weak technical position. In
our
opinion, higher* prices for selected
equities, particularly- those qual¬
ifying for' investment purpose^,
are in prospect whenever the in¬
outlook clarifies.

in India, Burma,
Oeylon, Kenya
Colony and Aden and Zanzibar

Members New

York

Stock

Subscribed
Reserve

120 BROADWAY, NEW YORK 5, N. Y.

The

Telephone: BArclay 7-3500

.

.

conducts'every description
banking and exchange business

V

Trusteeships and Executorships

(L. A. Gibbs, Manager Trading Dept.)

■*

also undertaken

World War II. What has happened
since then is history and is Pnly

by

ob¬

pursued

by

serious

the

and

conducted

fashion

,

but

in

haphazard

any

rather

and with reasoned

deliberately

consideration*

Here is a outstanding manage¬
ment-type investment trust which

the

i

prospective

earn¬

i

.INSURANCE STOCKS

indefinitely." Basic

be

the

overlooked

business

industrial

in

outlook, is that the

plants

of

two

list

Another

mainly in

large

a

diversi¬

common

of

*

stocks.

management-type

trust

ance,

in

common

is another

had

2%

of

its

stocks, And here

large trust with 9% in

cash, about 16% in U. S. Govern¬
ment

bonds and most

of

the

re¬

mainder in equities. The manage¬
ments of these three trusts are
not

interrelated. They are repre¬
sentative of independent impor¬
tant banking
groups controlling
nearly
$200
million
of
stock¬
holders' funds. This hardly can

-

-

i

-

'

-

scared—and

longer-term fundamental

the

leading industrial nations
—Germany and Japan—have been
Virtually destroyed in the most
devastating war in history. The

of

goods

is

far

more

today than the shortage nf
What

less,

is

needed

production

electrical,

is

more,
automo,

of

industrial

the

reflected

and

equip,

defeatist

in

the

attitude

stock

market

During the past week

the

came

announcement of the intention of

Telephone to raise an
additional $354 million for further
plant

modernization

and

expan¬

sion. Such financing would repre¬
sent

the

largest

single piece of
in history.
"Despite the vast expansion of the
past two years," the company said,
"the Bell
System still is faced
corporate

a

financing

large

very

program

to

meet

unprecedented

construction

the

continuing

demand

for

tele¬

phone service and to improve the
service. The new plant will be
composed of the best types of fa¬
cilities that telephone scientists
and

engineers

means

people,

more

devise.

This

service to

more

can

dial

more

dialing of toll calls,

extension of the coaxial cable and
radio relay system with their ca¬

he

spell
the

wants

for

future.

ment

it."

lack

This

of

There

is

astute

more

for

obvious

reasons.

not

does

confidence
no

in

manage¬

than

that

of

American Telephone.
Now consider the estimates col¬

lected

some time ago
by the SEC
indicating that American business
expects to spend $3,770 million in
the current quarter—a new high
mark, if attained. This is equal to

annual indicated rate of about

an

$15

billion

billion
1939.

of

in

with $12
billion in

compared
and $5

1946

With

the subsequent

lifting

building restrictions, even this
estimate might prove con¬

latest

the

recent

revival of optimism on the

part of

servative

in

view

of

business executives and the corre¬

sponding
with

tft proceed

willingness

expansion

d

plans

it©

e s p

present high costs.
Rate

of

the life blood of

omy.

It

>

capital expenditures is

is

a

vigorous econ¬

forerunpe^ pf

the

things to come—and is
market

factor of

far

a

potential

greater; im¬

port than export trade.

v'■

.

the

of

world's

as

balance

fied

servatively stated; As a point of of the investing public. Despite
illustration, note the Goodrich re*** the SEC and its noble objectives
port released during the past week in attempting to iron out price
showing earnings \ for ' fhe
six fluctuations through r.ules. and

ofcaltfqania

fact not

appraising

the

1947, had less than

has hardly ever been be construed ps a defeatist atti¬
conservatively capitalized— tude toward common stocks, which
earnings never . more con? characterizes a very large segment

\

BANK STOCKS

re¬

3% of its funds in cash, about 11%
in U, S. Government bonds and

of June 30,

period ended June 30- of regulations designed to restrict the
$7.82 on the common stock,>fter market
to a
purely investment
setting aside contingency reserves
affair, investors today as a class
equal to about $1.53 a<share; of are
more gun shy than ever. The
common, or almost as much as .the
truth probably is that the
public
amount paid in dividends to stock,
is not so bearish as it is
just plain
holders for the period. Moreover

Comprehensive Dealer Service

a

pacity to carry television pro¬
grams, extension of mobile tele¬
phone service, more telephones on
farms and achieving the goal of
giving everyone service when and

as

months

We offer

poned

power

and
of

appraising

present situation.

more

£2,000,000
£2,300,000

Bank

*■»

Teletype—NY 1-1248-49

Fund-.

period

.

for

not

investment

present, when there was
flagrant subnormal capitalization
of earnings
power, - Was
in , the
period
immediately
precedihg

Current

"Big

funds in cash, 2% in U. S. Govern¬
ment bonds and most of the bal¬

the

ings

Capital!—'-£4,000,000

Paid-Up Capital

Exchange

T

Fears

background

'

Branches

Laird, Bissell & Meeds

•

be

business slump which
had been
freely predicted in some quarters
the reply was "It
has been post-!

with

of

seen

ment-type investment trust. The
administration of such funds is

Billard

of interest in that it affords sortie

Bishopsgate,

London, E. C.

to¬

business of investing sizable pub¬
lic funds entrusted to the manage¬

ap¬

ternational

be

may

serving the policies
those charged with

Most recent comparable

BANK

view

attitude

present

Investors"

to be in

pears

to

stock market.

constructive

Big Investors

the

Comparatively, Lloyds and the
Reeiprocals suffered the heaviest

as

.

46.8%

aver.

a

The

a

38.1

43.5

1941—_

that

confidence

of

measure

problem,

stability in the purely
outlook, is the corner¬

seem

market

Companies

42.8%

is

some

major

ward the

could be made

VMutual

Stock

mutuals is

restricted and selected than

annual aggregate

figures)

this

of

nts

observa-

still

domestic demand to
fill
the gap.
Furthermore, when asked
what happened
to
the summer

With that of "Big Business."

stone for

prospect. Fur¬

there would

surgent

Big Business

domestic

tiorf which

1945.

The business of

plus

nearby

,

in

ally,

Contrast

of relative

sentiment,'
continuing
narrow
price

that

American

solution

•

week

machinery, railway
ment, steel, building, etc.

framework has been set for early

t ment

nve s

m ove m e

16 %

stated during the
past

farm

<$>-

to

of

eyep if exports dropped "drastic-

as

of

news

nature

Director

Statistics of
Department of Labor

biles,

are

impor-

proportion written by the mutuals over this 21-year
period is 14.6%, and by the stock companies, 85.4%.
The mutuals'
share of the total business has.*g>_—1
r
—:
■
■
' '.
gradually increased from 11% in Ratio of Losses Paid to Premium
around

observe that the
the Bureau of Labor
the U. S..

not

analyst reviews market situation and contends market
than weak technical condition. Points out lead¬

Influence
i

85.4%

to

dollars.

a delicate
balance, which usually characterizes pre-Labor Day markets.
Bar-

85.1

*23,259,486

the

policies of the World Bank.
How,
ever, on this score it is
pertinent

shortage

The present stalemate in the stock market
represents

1,286,767

3,411,238

will de
cline is beyond the realm
of pre"
diction. Much depends
upon the
action of Congress in
implement,
ing the Marshall Plan and *

acute

domestic demand.

1,344,287

19,848,248

eventually decline
undeniable. Just when
and bv
how/much foreign trade
is

U. S. alone has
available resources
for : world >
rehabilitation.
The

14.6

199,826

Bell

$870,000,000

purchasing common stocks, and proposed
large increase in capitalization of American Telephone and Tele¬
graph Co. does not reflect a defeatist attitude of big investors.
Holds any sharp decline in exports will be offset
by resurged

212,042

more

-

ing investment trusts

1,144,461

erally

approximately

78.5%,

is in rather strong

14.9

1,075,617

of

'

Stock market

1,074,725

that

in¬

combined

By G. Y. BILLARD

1943—

is

is

ance

'

1942—

more

14.6

The

of the two groups over 1921

Market in Delicate Balance

15.1

814,514

932,074

16.3%

63.5

million.

_

14.8

years.

thi

50.1

__$3,887,057,566 $602,400,024

*

14.5

to

of

41.Q

assets

16.1

/

that

Partner, J. R. Williston & Co.

16.2

837,035

Totals

while

40.3

15.3

134,415

,

annual

33.0

12.5

734,467

130,433

1941—i.-

million

crease

■Total adm,

15.3

672,437

1939—

mutual's

$670

100.0%

|

929,252

702,620

-

.the

1.3

_

!

'

1935____

1937—

stock

4.2

Total investment income of the

622,277

1938_

the

1.8

—

'

1932-—

in;

1926, while
companies has
risen by only 67.8%.
Dollarwise,
of

12.5

87.5

152,604

.

written

total

1.7

Total

11.6

1,027,028

1928

1929-

share* of

11%

high and win

to

88.4

1,110,895

business,

mu¬

from

stock companies has increased bj

mtges.

Boncis

u.

C3.

Mutual

Stock

122,561

small

by the

162.6%

4.2. !

assets-

All

-Per Cent of Total

($000)

1926_—.

their

expanded

$200

tT

5.0

u.

Total

has

Companies
12.2%
"

10.2

—

balances

All

Companies

tuals

business has increased by less than

'lis^ell.

Mutual

..

Companies

•

nual business written

an¬

160 Mutual

Agents'

Real est. &

Premium Receipts

Stock

{

,

Percentwise, the volume of

Companies

Item—
Cash

respec-j-

tively, from 1926 to 1946 inclusive.

■

was

a

364 Stock

'

volume

$110,7
return, pf
approximately 34% on 4 invested
assets at the year-end; this com¬
pares with $14,041,000 for the mu¬
tuals and a return of approxi¬
mately 2.8%.
■;

however,

1846

in 1946

336,000, equivalent to

that

ALLOCATION

PERCENT

ADMITTF.D

$2,042,435,000.

stock companies

a.

mutual fire and marine
companies reached the unprecedented figure of $1,980,109,-,

000 in 1946,

-

Insurance Stocks

premium volume of all stock and

Total

*

—

Thursday, August 28,1947

'
r,

.J

f'

re¬

.

210

Primary Trading
t.

wEST^tnjmJTIEET

IDS AN6ELES 14, CALIFORKIA

teletype: la jtp, la 2m

Sbiticl A*/

Analytical and

iojton

•

chicago

Sales Service




N

dallas

.

large

CfiiHitlinf lUitll

new york

•

philadelphia
•

st. louis

san hancisco

♦

yields has. never been more dis¬
torted.

telephone tkinity wi

Markets—

lationship between stock and bpnd

•

*

If
detroit
"

seattle

Explanation lies to
extent

in fears

a

very

concerning

ultimate repercussions on the do¬
mestic

to

economy

bring

Europe.

from the failure

recovery

Recognition

in

Western

that

R. D. French & Co.* Formed

Export Trade

Principal bugaboo

raised

cerning the domestic business
look

is

sudden
upon

the fear

of

the

collapse

of

export

HOUSTON, TEX.—R. D. French

con¬

out¬

effect

of

trade

the domestic economy. Thqt

the volume of business transacted

the for foreign account is abnormally

is

.

engaging

in

the

business under the
R.

D.

in the

French

&

investment

firm

name

of

Cp, from office3

City National Bank Build¬

ing. He

was

previously with Har¬

ris, Upham & Co.

;

Number 4624

166

Volume

THE

Scores President Tinman's

COMMERCIAL & FINANCIAL

Budget

year at $41.7 billions and expenditures at
$37 billions, with budget
surplus at $4.7 billion, instead of only $200 million as estimated- in
January. Shows net reduction
of estimated
expenditures by Congress was only one-half billion dollars, and
points to possibility of increased outlays for foreign aid. Surplus to be applied to debt reduction.

Sen.

taxing."

.

■

^

On Aug. 19/President
Harry S. Truman released .a revised estimate of the Federal
Budget for the fiscal year ended June 30, 1948.
According to the figures of the new
estimate, the net reduction made by Congress of proposed
expenditures by the President

•;

v,

''

The

following statement

was

issued jointly on Aug. 21
by Sen.
of the Senate Appropriations

criticism

President

of

Truman's

jnid-year Budget Statement.
."

Truman's

"President

political

In this

a

the

"Let

us

dollars,

(b

owing

j

i

u

to

a

estimated

how

rev¬

its

transmitted

to make

the
by

the urgent
tures.

tab

look back

the

fiscal

situation

the

for

guidance when the second session
of the Congress begins. In his in¬

;

der-estimates what the American

surplus for
t h e
present

lions

as

In

John

of

but

$200 mil¬
originally estimated.

following explanatory statement:

"His
for

statement
ment's

the Federal Govern¬

on

situation

fiscal

must

be

disturbing to the

country. It is
perpetuate his spend

•designed to

^nd spend policy, and to deny to
the

American

people

the

low

present fiscal year is too

and

he

does

consideration

not

that

take

the

into

Congress

during its next session will
tinue

hammer

to

ficiency

tax

in

con¬

for

greater ef¬
administrative

the

branch
efficiency that should
they demand and so well isave the
taxpayers' dollars. No¬
Reserve;; the tax relief they are body can have faith in Mr.
—

relief

•entitled

Tru¬

to

Truman's

the

on

basis

figures,

own

reveals himself

1

r

"Confidence in his estimates and

statements

fiscal

on

man's

affairs

is

Scattered by his shocking, admis¬

by
predicts
That the Treasury on June 30,1948,
barring contingencies, will have a
Surplus of $4,667,000,000 of which
he attributes $2,100,000,000 to in¬
creased

revenue

now

Note

vember and elected a Republican
Congress their purpose was to get
£oing,; freed of New Deal-Demo¬
crat shackles that were strangling

relief

went

that they

the

from

up

had

now

a

aid

to Europe

world.

sponsive to their will.

5>f

long-deferred;

re¬

Production

without

goods,

unnecessary government meddling
into, their affairs,, so essential, to
the full enjoyment of life is up¬
permost in the public's mind. That
fs why employment now is at an

^11-time high
sent

from

and goods long ab¬

the

appearing

in

market

are

increasing

now

volume.

That is why the Federal treasury

-:

other parts of

and
;

<*

"He talks about public debt

tirement
the

the

as

effect

The

re¬

though it would have
of

arresting inflation.

economic

fact

government

is

that

when

retires its

bonds

it pays the holders' cash and that

the effects of war,

efforts to prevent a future

our

iwar.

Thus, as finally approved by
the Congress, 28% of our
expen¬
ditures for

1948

for

are

national

defense, 20% for our veteransservice and benefits, 14% for in¬
on our

largely

a

national debt

result

of

(which

war)/and

to support our inter¬

national programs and activities
for world peace. This leaves 26%
for
all
other
Government pro¬

grams, of which the share of "gen¬
eral Government" is only 4%. ■'
*

From

another

point of view,
40% of the civilian employees of
the

Government

national
in

the

defense
conduct

programs,

service.

and

are

our

22%

in

in
10%

engaged

activities,
of

veterans'

the postal

This leaves

only 28% to
carry out all other Federal acti¬
vities.^
:

if

We cannot disregard; these facts

to reduce our expendi¬
intelligently " and without
crippling those public services to
we

time tax rates, insisted that with
the

Republican

Congress on the
job the country could expect solid
foundations
for
prosperity and
happiness, and a reversal of New
Deal tax squandering. When we

Republicans

,

cut

expendi¬

are

tures

the

can

uncer¬

future, and
could

on new

then

not

Nevertheless, the
fiscal

policy

which the Budget was

proved

we

events which
in

which

fundamental

on

based has

sound.

Furthermore, the
searching review of the Budget by
the
Congress and the
country
must

convince everyone / willing
to look squarely at the facts that
it was a tight Budget.- It was, in

fact,

hard-boiled

pre¬

on

a

dicated

eco¬

nomical

an

Budget
efficient and

administration

programs established

gress.

'y/.-.

•

of

.

.

the

by the Con¬

://•"'-

528

the fiscal

year

1948, as indicate^
Budget review, reflects thi,
balancing of needs against costs'
by the Senators and Representa¬
in the

tives

in

came

to

the

Congress,

during its session just ended.
indicated

surplus

of

$4.7

for

credit

are

expansion/

basis

a

Everybody

The

Budget

included

in

detail

for the first time all Government

corporations and war
This- enabled both the
and the

people to get

spective

'

and

agencies,

Congress
better per¬

a

clearer

a

under¬

reducing the national
be an important bul¬
wark against the severe inflation¬

debt,

will

ary

to

pressures

country is

which

ternational

it imperative that we plan
surplus, both in view of the
problem of promoting world re¬

for

a

and of the need for

covery

at home

er

would

debt reduced, because that
further buttress our Gov¬

ernment's

fiscal

is now sound. '

"Under

the

which the

situation

^

'

^

plex

ramifications

com¬

the

of

pro¬

grams of the Federal Government.

abroad.

or

Elementary'

well

as
we

are

as

the

foreseeable.

in

now

stronger

to

than

do

summary
portion of the
revised budget statement follows:'
t

Continuing

my annual

the

practice

ve¬

Mr. Truman be¬

latedly concedes that the treasury
surplus will far exceed his origi¬
nal

estimate.

est, T

presenting this year a
analysis
of
how
the
changes in it came about.

am
detailed

The

1948

the.

needs

or

demands

of

the

various

democracy. They
are carried out only so long as the
Congress continues its authoriza¬
tion

and

our

supports

them

through

appropriations./Hence, it is

essen¬

tial that all citizens and the Con¬

continuously weigh the need
for these services against the costs
gress

jf

we are

to strike

between the two.

-

a
,

just balance
\

The actual reduction

.

•*

which

take

transmitted

were

Congress
account

ments

in

January.

of

Budget

submitted

to

and

developments

numerous

which

have

affected

the

battling for tax
Telief there were cries from among
the Democrats that the fiscal situ¬

Summary: Budget Totals and
Major Revisions
'. The

Jr"

expenditures of

Government

(Continued

the

the

fis-'

page

32)

>

on

August 26,-1947

$15,000,000

Libby, McNeill & Libby
(A Maine Corporation)

Twenty-Year 2%% Sinking Fund Debentures
Due August

sary

too

was

cloudy;,

that

we

might run into the red if we cut
the intolerable wartime tax rates.
Row Mr. Truman resorts to more

1, 1967

Price 100.50% and accrued interest

bug-a-boos
tax
/

relief.
*

to

deny

people

Glore, Forgan & Co.

to that fact.

"Running through Mr. Truman's
political statement is the custom-

continued

•

RECEIPTS AND
;

the

bureaucrats who have been
from the payroll attest

dropped

EXPENDITURES:

OFFICIAL

on

Harriman Ripley & Co.

BIyth & Co., Inc.

Incorporated

pagS 19)

ESTIMATES

AND

The First Boston Corporation

Goldman, Sachs & Co.

ACTUAL EXPERIENCE IN THE FISCAL YEAR 1947
/

*

*

(In Billions of Dollars)

Hayden, Stone & Co.

v

Original

Budget

Budget

Revised

Estimate

Review of

Estimate

Jan., 1946

Aug., 1946

Jan., 1947

Apr., 1947

Actual

$31.5

$39.6

$40.2

$42.5

$43.3

35.1

41.0

42.5

41.3

42.5

—3.6

—1.4

—2.3

+ 1.2

Receipts cLi
Expenditures

Surplus

T_,-

and deficit

HornbIower&Weeks

LeeHigginsonCorporation

Estimate

:

.




+

.8

White, Weld & Co.

'

Dean Witter & Co.

Fed¬

during

cut it and the squeals of unneces¬

ation

were

outlook

for Government programs.

The offering is made only by the Prospectus,

Dated August 1, 1947

amend-v

the Congress,

be obtained from such of the undersigned as are registered dealers in this State,

NEW ISSUE

to

They'1

the action of the Congress on ap-*
propriations and other legislation,

eral

in expen¬

revisions in this statement'

bring up to date the initial Bud¬
get estimates for the fiscal year

by the Congress in response to the
segments of

midyear review of the

"The

country knows that Mr.
Truman fought the economy ef¬
forts of the Congress so recently
elected by the people. He said his
budget-could not be cut and that
it must not be cut. But Congress

f

Budget. Since the 1948 Budget
has aroused unusual public inter¬

to apply a substantial amount on

the public debt.

o

I submit at this time

bills

and which President Truman

we

The

passed

toed there would have been ample

This,

much

a

financial position
were last year.

*

reduction

tax

Congress twice

re¬

prudence requires that we be pre¬
pared to face the unforeseeable

These programs are all authorized

which

-

a

•

against emergencies, wheth¬

serve

with the good interest of our gov¬
ernment at heart wants the na¬
tional

the

subjected. The in-^
situation
has
also

now

made

•

standing of the necessarily

This advertisement does not constitute an offering.
which may

The

billion

applied to

-

"Government bonds

they

as

grips with the problem

former years,

•

million dollars tec;

'

a

I "Repeatedly,: Republican Con¬
gressional leaders, in pressing for
relief from the intolerable war¬

to

many

anticipated.

tidy surplus and revenue is surplus in the treasury to cover
the tax relief provided and also
mounting tremendously.

has

that in

ditures of

cash goes into the banks and into
circulation by those who hold the

people

Congress-

accompany¬

would all go toward reduction of
the
national
debt, except such
funds as he deems
necessary for

fr$e, competitive enterprise. Nor
occur to him that a
sigh of bonds,

•did it

be

"His estimated treasury surplus
of $4,700,000,000 for the
present
fiscal year, if he has his way,

I

"Obviously, it did not occur to
him that when the people repudi¬
ated his administration last No¬

the
,v

the

revenue.

to

sprung upon the people.* Last year
he was so consistently
wrong that
his various estimates now appear

ridiculous.

He

or

expenditures relate

war,

almost 12%

later

and

ing table.

Congress last January—less
than eight months ago—he under¬
Federal

our

is

the

$3,937,000,000.

fourths of

.directly to

terest

sion that in his budget message to

estimated

we must always keep in
the fact that about three-

from time to time to protect some

mind

budget

new

analysis of the Federal

any

mind

budget estimates, because
they are political estimates, issued
in

the

Budget,

policy

He again

high-spending,

as

Ibigh-taxing Harry.
(:

Mr.

of

releasing

In

treasury surplus estimated

the

added

hidden

conditions
be

estimates the President issued the

Taber

on

tainties of the
President Truman

by the Congress.
Sea. Styles Bridges

I

need

then

were

do and what they are
doing • under the freedom voted
can

it.

Now after eight months

estimated

sistence upon
continuing in peace¬ j fiscal year is
time the
back-breaking wartime placed at $4.7
tax burden, Mr. Truman again un- billion, instead

people

1948

preparation

in contrast to Mr.
o f
Truman's purely Congress
political interpretation of the fig¬ |the war exures, so that the people can
keep | cise taxes),
on

the

we
had
been
forced to make drastic reductions
in the requests for a number of
worthwhile programs because of

enues, (due in

to
Treasury Depart¬ | part
as honestly | retention

by law committed.

are

I

Budget to the Congress last Jan¬
uary, I said that it was a realistic
Budget and as complete as I knew

the

s e

we

When

t

in

r

being kept

are

which

scarcely a
billion

Republican Congress.
hope and expect that

the books of the
ment

<$>-

to

half

treasury

surplus of nearly $5,000,000,000 is
given to the country only 24
days
after adjournment of the first ses¬
of

January

.

connection, it is signifi¬

cant that his forecast of

sion

r

in

amounts

——,•■•-.
^

<R-N. Y.), Chairman of the House
Appropriations
Committee,
in

11

President Releases Mid-Year Budget Estimate

Bridges, Chairman of Senate Appropriations Committee, and
Rep. Taber, Chairman of House Appropriations Committee, issue
joint statement attacking President for "high spending" and "high

Styles Bridges (R.-N. H.), Chairman
Committee, and Rep. John Tabei.3>—

(819)

Places receipts for 1948 fiscal

Statement
t

CHRONICLE

THE

(820)

12

M

COMMERCIAL

FINANCIAL

&

CHRONICLE

Customers Brokers

•

Railroad Securities

Why Upset the Apple Cart?

Ass'n Gets Slate
The slate

of

Officers

By JOHN ELLIS*

and

Exe¬

Mr. Ellis points out both wage
in last half century and are

cutive Committee Members of the

Association

Customers'

of

the

in prices for railroad stocks ana specu- I Brokers, to be voted upon at its
and has been followed by a annual election, Sept. 24, has been
desultory period of backing and filling with the general trend slightly announced
by
the
Nominating
lower
Partly this recent action may be attributed to the usual sum- Committee. The nominees are:
mer dbMtums which have affected all sections of the securities mar¬
ine

lative

auvance

spring

ictc

momentum

its

lost

has

bonds

ing the raiiroads which have ap-<§>

parently contributed to the tendency to postpone new purchases,

~

arbitration.

in

agreed
the

/d June

Both

arbitration

board

clining

towards

trend

a

earnings .there

valid

some

attitude;

reason

Most

de¬

_might be

for this hesitant

rail

affecting

July results
nature. In
June, many of the western roads
were
severely
handicapped
by
floods. Maintenance outlays were
inflated by the necessary repair
of

were

June

and

temporary

a

work

(probably carrying over in
many instances into July) while
transportation costs were affected
by the necessity for extensive de¬
vouring and rerouting.
The

June

report

of

ber

As

hearings

the

on

start until September 9,

even
,

.

.

.„

,

decision will

„

,

any

.

,

beyond the date of decision
the wage increases. Also, if the
1946 experience is to be accepted

as

criterion,' it

any

pected

that

ds

earnings

filed

long this

so

a

lag

of

substantial

Even with

that

p

h

(1951)

exper¬

iences of other roads in the flood

must

area,

be

considered

merely
temporary interruption of the

earlier

1947, trend towards
efficient operation.
at

ences

It
the

m

r>

r»

i

in

work

July generally

different group of roads
than those influenced by the June

&

Co

floods.

The

early July earnings
sharp year-to-year

results indicate

declines

for

number

a

Eastern industrial roads.

thing, there

was

of

For

the
one

the coal stoppage

the

early days of the month.
Secondly, there were a number
of important manufacturing plants
that closed up for periods
ranging
from one to two weeks for vaca¬
tions.

More

and

plants are
finding it more profitable to close
lip completely for a short period
more

than to scatter vacations and
op¬
at" a restricted level for a

erate

longer period. For the railroad in¬
dustry as a whole the loss of
traffic due to the coal and indus¬

trial

stoppages was obscured by
the heavy grain movement and
large shipments of iron ore down
the Lakes, but for the individual
roads largely dependent on coal
and heavy industrial
activity the
results

only
too
evident in July earnings.
Aside

were

from

plainly

the

temporary in¬
fluences affecting June and July
traffic and earnings, it is obvious
rail

securities

are

currently
by the impend¬

(1951f;

(1951) Milton Leed
(1948)

Lhi
„

1

Pef_

& Co
.

Mr.

.

.

Jarvis,
of

the

1945-1946.

.

.

Presi¬

Association,
was
Security Analysts

He started

as

for the New York Stock

twenty-four

„

lor

nominee

President of the

t

years

a

runner

Exchange
and

ago,

is

a

cor

i

5%

i

r

j

with detachable

stock

mon

Walker & Co

graduate of N.Y.U. He is a mem•'
^C" 1Sr
ber of
Economic Club, Unisinking fund
Versity Club and Governor of the

o

.

fenng $500,000

Beane

Donald j. Watrous, A. M. Kidder

Plywood Inc. Deb.
j.

H

>Merill

&

M. Ross, Dean
(1951)
Anthony

Co

G

dency

more

a

&

Smith

Brooks & Go. Offers

^ '.The temporary adverse influ¬ debentures,
affected

Richard

witter

Jr.,

Fenner

com-

purchase warrants

street Forum

at-

accrued interest from

?

+?
c5!mm
made the nominations

are:

company's common
stock at $3 per share on or
aefore July 31, 1948, $4 per share
thereafter until July 31, 1949, and
$5 per share thereafter until July

Anthony
Smith,
Chairman;
John
S.
MacLean,
Secretary,
Shearson, Hammill Co.; H.
E.
Broadfoot, Hayden, Stone & Co.;
William Cogswell, Fahnestock &
Co.; Arthur J. Hansen, ^Francis L
du Pont & Co.;.-falter E. Hoskins, Eastman Dillon & Co.; Ralph
A. Rotnem, Harris, Upham &
Co.; Frank A. Saline, James N.

31, 1952.

Leopold

Aug. 1. The
attached warrants will entitle the
lolders to

;he

purchase 100 shares in

of

case

$1,000 debentures and
50 .shares in the case, of $500 debentures

of

Proceeds

of

proceeds of
shares

of

the

an

this

offering plus
offering of 200,000

the company's

1

common.

&

Co.;

John

J.

Tuffy,

War^De^aHeld^ MaUdd™6^
' ^eiaiieia & ueiaiieid.
_

m

Permits

stock of Kalpine Ply :
wood Co. The balance of the cro-

standing

SAN

ceeds will be used £or the retirement of bank and mortgage in-

Plywood Inc. is en'gaged in the
manufacture and sale of plywood
and related
items, and is continuing the business formerly conducted by its predecessor
tions

and

CALIF

—

amendments to the Constitution
Providing for Permissive Incor
^oration of member firms,

The amendments adopted by
^an Francisco Stock Exchange
con^orm closely to those which
have been under consideration by

corpora-

being influenced
ing wage and rate decisions. The

Approximately 95% of the company's

request

dollar

volume

sented

which

by the sale of plywood, of
approximately 25% is pro-

Stock Exchange,

duced

by

applications

of

the

non-operating

unions for increased wages is

now

Guaranteed Stocks

business

is

of all plywood sold by the
will be produced in
plants.

Special

ST.

to

GUARANTEED RAILROAD STOCKS-BONDS

Broad Street

New York 4, N. Y.

Telephone BOwlinv; Green
9-6400

have

1-1063




*

and

MO.—Frank

George

H.

A 41

,

i

no

mem-

members

of

the

Exchange,

Ichange under the plan'

C.

Mr. Gee
T

;j

;!

*

.

SAN

ANTONIO, TEX.—J. Wil-

i!BT!

will

in

a

securities business from offices

at

106 Broadway.
Pn

He

engage

was

formerlv

associate of the Texas National

Corporation.

flow¬

not

make

mentally

palat¬
et praeterea nihil.

vox

been

the

case,

and

does

unable

to

economic

taken

place

years;

revolution

some

men,

have

appraise properly

within
of

that has

the

past 50
older
men

the

eemingly have forgotten what
happened from 1897 to 1947.

has

When

quite

have

percentage of our
all walks of life

a

population,

in

such

child-like

a

psychol¬

ogy that hardheaded businessmen
are

compelled, when building sky¬
costing many millions,
13th floor, it becomes
a serious matter to
give voice to
any thought that may influence
scrapers

to omit the

to

have

we

fear.

(?)
to

fear

Our dean of
pont

As

be

fear

said:

short."

interpretation
would

is

la¬

said:

"All

itself."

financiers, John Pier-

Morgan,

America

late

our

President

"Don't

.A broad,

of

that

that

if

sell

logical

statement

United ' States,

don't

""

To

say

say

harmless

in

friends,

among

•

print,

radio

in

or

an

people

these

or

hear

dire prophecies,

A

case

an

even

read

or

it becomes

in point was

radio

a

,was coiping to an end,

announcement that

broke

t?y

into

the program,
which, while part of
the play, led thousands to believe
that it was an actual news an¬
nouncement.
not

so

If

this subject

terribly

serious

it

quite properly be titled:
sertation

on

"A

Dis¬

Worry." But the busi¬

world is not interested in ab¬
stract philosophy, but must needs
deal with
realities;

however, when
psychology and philosophy have a
bearing on business and finance
businessman

both

in

coming

render

his

must

to

use

A

is

to

for

judgment profit¬

discussion
when

journal
a

is

hardly

purely 'academic

of

philosophy,
but
philosophy has an essential

""Editor's Note

—

sarily
views

Mr. Ellis is

an

represent
the
policy or
this publication.
It is

of

published

with

the

thought that
it
might be interesting to our
readers
as
showing a layman'^
viewpoint.
.»
1
,

-

,

of

"

this

ar¬

nullify

as far as pos¬
destructive
economic

the

held

by so many. So
seemingly discussing the
subject in a "pollyanna" vein, it is
but to bring
home, simply, to the

while

of

men

the

business

world,

the

history of the past and apply It
to the present.
Worry is com¬
pounded with

gredients,
the

some

patients

nation

(the

and

foolish

which

make

individual, the

the

world)
all the
Half of the worry is

sickly.

more

dangerous in¬

of

some

and

the

other

half

<

necessary.
The world
move in its
regular

un¬

will

still

orbit, and will

and

progress

tiny.

The

little

move

little

its des¬

to

on

we

do

can

will

long delay what is to be.

or

With

dividends

for

the

first

quarter of 1947 up 21% over the
first
quarter of
1946
("Chron¬
icle," June 12, page 3159), the
May sales of a big shoe chain up
54.2%
over
last
year
("Chron¬

icle," June 16, page 3162), the
employment figures the ; highest
if* | the country's history and the
market making
in many

highs for the year
issues, all in the face of
Summer
doldrums,
surely

leaves

no

for

room

pessimism.

the picture can not be

So

black

as

as

would paint it.

some

As

the

chief

of

source

worry

to be the relations between

seems

capital and labor, let us take this
subject first, with something con¬
crete.

In the words of

country's
'let's

picturesque

of the

one

politicians,

look at the record."

follow

Let us

capital

and

libor

they make a
Progress" and

sort

of

hurt in

while

"Pilgrim
who really got

see

arriving at where

are

we

today.
to

Up

$9

1906

weekly wage of

a

considered fairiv good for

was

the
a

to

average worker this was for
60-hour week.
This brings us
the

start

of this

of labor relations

Scales

review

for

the

(1897)
past 59

approximately
(10-hour
day), for the higher paid worker.

years.

$12 for
The

employer

about

and

hour

an

hours
and

three

earned

agitation

•

the

for

abo^t

In

men.

day but

to

came

before

work
mein

•

sometimes ' two br
after the men went

stayed

home
as

were

60-hour week

a

three

financial

place

snare.

objective

viewpoint

them

decisions that

able.
the

sole

sible

were

could

ness

will

ticle

in

skit, when thousands thought the
world

The

address,

thousands

many
of

when

publicized

are

a

Objective of This Article

the

be

may

discussion

a

but

thoughts

same

any¬

'

view-with-alarm

quite

throughout
phrase

catch

a

,

can't

you

something. constructive about the
thing.

where

Hitler!"
We may,

r e c e s-

in

employee, in
the
"Chronicle's'
proof reading department, but the
views expressed by him
are, of
course, his own and .do not neces¬

Chapman Opens Offices

An-1bur Chapman

formerly with Atlas Invest- I
N

corporate

still

more

cases

caught millions in

Many
distinguished
through being too young,

the
are

there
may
be other nonmember corporations who
may be
interested
in
joining
the
Ex-

Gee

become affiliated with

ment Co,

for

York

Chronicle

chor Investment
Co., Inc.
xxro.

Teletype NY

Financial

JOSEPH,

Dressman
25

The

torn

its

Two With Anchor Inv. Co.

New

berships
presently
before
the
Board of Governors, but that it is
quite likely some may be received

approximately

company
own

the

Mr. Kaehler stated there

the

Company,

70%

Special Securities

Governors of

repre-

company's present
manufacturing- facilities.
After
acquisition of the Kalpine Plywood

Bonds

co-partnerships.

able;

ous.

nounced August 19,
1947, that a
majority of the members of the
Exchange
had
approved
the

2apita1,

the

numberless

history

extremely unfitting if not danger¬

Incorporalfon

FRANCISCO,

John Ellis

grammar

rhetoric

any

these

Ronald E, Kaehler,
President, San
Francisco
Stock
Exchange, an-

debtedness of approximately
$280,000 and for additional
working

headed

of
re¬

not

third term. "Heil
the peer of them all.

was

The fact that it is written in

ery

one

mil¬

on

be sent to
foreign
fight"; leading to Roose¬

shores to

straight for a
depression
(pardon, a
sion), unless,, provided,

millions

mi£i£,,J2JZXSm Fmcisco Exch.

iteration

"I promise

will

sons

cite

impeccable

be

you mothers
fathers again and again
your

and

theory that

where
0

election.

and

mented

.

by

psychologically

velt's

people

tached, of Plywood Inc. The debentures are priced at 100% plus w

well

may

lions... Lit.:. "He xept us out
war";* resulting in Wilson's

the

etc.

McKeag,

pi

act

can

world,
through their
lip-service to

it

Walter
L

in the company's operating

similar

Co.

Hutton & Co.

p

sharp and sudden turn for the
and

&

Glinert,

Ljicated).

show

eventually

losophy is that

the

we are

Maurice

—

Members of the Executive Cornmittee (term expires in year in¬

great

this year

Fen-

Secretary—Frank P. Rinckhoff,

sound
to

Pierce,

Beane

jjirsch

between

reasonably

earnings

expected

is

1946

in

as

few-months

a

are

year

Lynch,

Treasurer

by many of the
during the proceedings will make
pretty sorry reading. On the other
hand, the Commission should not
take

Merrill

ner

be exestimates
railroads

market will give greater
recogmtion to the good 1947
earnings.

that

Vice-President—Archie F. Har-

may

no

in

Hayden, Stone & Co.

well
on

of

as a

President —N. Leonard Jarvis,

,i

.

it

clarify the flow of
A first principle of
phi¬

thought.

dis-

country

—

bearing in depicting some of the
highlights and- shadows of the fi¬
picture
introduced to

analysts,

serious

an alarmingly large num¬
finance, industry, banking
IZ

nancial

attained

service, to
business,
the

N. Leonard Jarvis

naturally be delayed

almost certain

This,

who

a

request of

roads

status.

vmrnmrnrnrnrnMiMm

have rendered

the railroads for rate relief do not

majority

Worse

•

and

others

and

transportation ratio of 41.8% was
4.6 points above a year earlier and
almost
eight points
above
the
showing for May, 1947. Obviously
indicative of

field,
have

more,
of

*■

educational'

for a considerable period.
meantime, the headings are
characterized
by ominous fore¬
casts by railroad management.

wage and rate increases the

are

or

the

active

to the individual carrier. The June

seriously consider that

in

months

prominent in the world

men,

In the

to grant the rate relief

one can

of

and

wih

which

Chicago,
Burlington & Quincy gives a good
picture of what the floods meant

the June results

shortening

■

importance as
statisticians

analysts, how¬

consider that the influences

ever,

any

rency,

During the last six

have
of

decision

and July earnings have
be handed down some time around
spotty, and in a number of
the middle of next month. There
cases resu.t3 in those two periods
is naturally considerable concern
•have compared unfavorably with
as to the possibility that any
in¬
the
earnings of the like
1946
creases will again be made retro¬
periods. Were the results of the
indicative of

wages and proposes gradual amortization
of
debt, increasing pay of workers in South, a universal cur¬
uniformity of wages in individual industries and a

national

of hours.

been

last two months to be accepted as

applecart is upset.

~~

sides

accept the

to

earners and employers have
gained
likely to continue to do so unless
Urges a "stop worrying" attitude over
rising

prices and higher

Additionally, theie have been two factors particularly affect¬

kets.

Thursday, August 28,1947

1898

as

much

there was

nine-hour' {woi4c-

a

settled for 9% hours

was

generally and in lieu of the addi¬
xk hour the wages went uo

tional
to

$15

now

four

of

per

week,

earning

about

the
as

employer
much

as

Then in

men.

prosperity,

1899, a period
hours were short¬

ened to nine per day, wages
uo
to
$18 per week.
The

went

ployer

hour

came

before the
hour

in

men

after

about

Vz

em¬

and quit about

the Jmert-i and

ceiving in; earnings: about

as

xk
re¬

much

Volume

166

Number 4624

THE

COMMERCIAL

What Solution for the British
"Dollar" Crisis?

Monetary Fund. Criticizes
Egypt, India and Iraq.

tion of the

British "dollar

crisis"

under

are

nature

of .the

known

that

United

solution

is likely to be
chosen. A
tain

of

of

unsolicited

in

d-

of

columns

ence

'

but not nearly
...

as
-

Paul

Dr.

was

Einzif

pension of

the
,

„

need

sterling

the

and :*■

a

sus¬

don

V.H.W.V

import from countries
on

controversial

And

the

the

Reserve

~

would take

ton? X*.

advantage of

4lilere .ls

or

credits

to

tide

„

the

at

)

Residency

ol
at

the

the

opposition,

even

obvious

be

of

cost

government

it

would

much sentimen¬

overcome

to

losing

though
all

that

it
at

the

material'y

'

so

This, of course, resulted only in
enabling the station employees to
lie

abed

little

a

morning.v
The
7:30

station

were

.

improve

vived.
_

Many of those
pending

,

port

-

;

..

<:/

;

;;

in favor of

sus-

non-discriminatory

arrangements

im-

curiously
enough, opposed to the suspension
of the sterling area exchange arrangements.
Yet, they ought to
know that,
if sterling remains
convertible, Britain would stand

,

:

t

.

.

to

?

derive

but

little

discrimination

.

►

ently

in

the

even

not realized this

judging by the
vegetables

Italy
there

are

Plies.

benefit

trade.

from

Apparhas

government

elementary truth,

fact that fruit and

are

during

are,

imported

the

from
when

season

ample home-grown

Food

sup-

Minister

Strachey
seems to be unaware that
Italy was
jn a. position to convert the ster-

Jing
that

proceeds of these exports

the amount OJUVill) 4.
spent rather
UWV

*

;

benefit

of India

between

of this year. The
agreement concluded
are
said to be even
w
_

how and the end

.

Now let

although

the

Indian

the

us

j

Shall

Shall

we

we

gaining?

No!

destroy unions?

abolish

No!

collective

Shall

we

bar¬

enact

anti-labor legislation?

more

.

j

possible. But both employ¬

and wage-earners must coop¬
erate to increase production and

ers

wv-

doubts entertained

chances
with

of

the, aid

supposed

the
of

to; be

.

was

for

Summer vacation.
Dalton

answer

By

and

that he failed to

in

sembles

things
the

will

dollars

a"d "other

^11

i!.

had

Parliament

time

have

October

average"

ful that I

a

is worth

and

bonus for good work

of it.

then

pay

and more

Some sort of piecework or

incentive

is

pay

the

consumer's

which

the

Plan

they; are

repaid./Little^ is




own

no

railroad stocks!

and lack of interest

Indifference

by both employees and stockhold¬
ers

is the

curse

of the railroads.

tram;

•

AIm 1A NOt6S

BOND CLUB OF DENVER

dub.

ienced.

Of

course,

ness can'1
wages,

inconven¬

this foolish-

on forever. More
shorter working

collapse

blame
say

any

balloon—^are bound

a

some

time.• I

don't

special group; but do

The Bond Club of Denver has announced the prize winners in the

reason

for high prices.

1

The

hope of every reader lies
more

What
means

more

production,
work

we: get
nothing

in

by
oy

an
all

money

which

Aug. 22 at the Park Hill Country

•

/

J",

'

'

.

"

&

Co.,

was

so

Cup, low net was a three-way fie and Emmett

Kullgren of the Colorado State Bank was the lucky

matcher. The

three all had

>

net of 60..

a

•.<

■>y h

,

;,

<

"

Chairman of the

for one of the most

Committee1 and his helpers

were

congratulated

successful parties held in Denver.

Twin City Bond Traders

Club will hold its annual .golf party at

wages

cordial invitation extended to all members of the investment fra-

it

ternity to attend.

were placed privately
ojjered to the public.

oj record. These securities

many

$116,500,000

convertibility crisis, that Britain'.'

United Gas

financial affairs are handled with
gross

Uam h.

First Mortgage

Corporation

and Collateral Trust Bonds

2%% Series due 1967

Dillon, Read & Co. Inc.

Hopkins has become asso-

ciated with E. F.
He was formerly

u

on
^

o*

with'Dean. Wit-

ter & Co. in San Francisco.

August 26,1947.

: ';

the Scuthview Country Club, St. Paul, on Friday, Sept. 19, 1947. ; A

through the undersigned, and have not been and are not being

- There ls a growlnS feeling of
uneasiness, resulting from the

,

TWIN CITY BOND TRADERS CLUB

This announcement appears Jor purposes

forgotten.

,.

Twenty-five out-of-town guests attended and Don Brown, who

us.

oi
of

until we turn

fo?Ltt!n

;

second and Bob Mitton, Robert Mitton Investments, third.

For the Jim Newton

to

reas¬

<

,

A1 Peterson of the Securities and Ex¬
change Commission in Denver. Don Brown, Boettcher & Co., won
low gross with a 74 golf score. Glen Clark of Sidlo, Simons, Roberts

was

the true

on
..

Grand prize winner was

that the present system is a

losing game to all concerned and

Club—IBA Frolic held

agreement*

navment

up

quality of the product.
This
be brought about by the
union and the employer agreeing
on
a
wage that the "below the

the

have happened thai
given away in these

been

take

ticket, although I had it out
in sight.: After leaving the train
at Boston, I hunted him up and
gave it to him.
He did not even
thank me; but I surely am thank¬
my

Otherwise

have

few awkward questions.

a

the

would

,

train conductor
gossiping with*a

busy

so

woman

-.

part of my rail¬

j P.S.—I forgot a
road story.
The

v,^.

about

Marshall

*

*

*

No!

Consumers want happy and satisLIrtRoof
ronli
fied labor with 4Wo, highest real
the;
wages

officials can get any
while a strike is on! This sim¬
ple clause would do more: to help
out us consumers than any other
one thing.
»

pay

forget, for

„

1 the

the company

What Is the Remedy?
•

our

nec¬

cuts

a

iraq agreement has been deferred
till Parliament was safely away
Mr.

Well,

first step would be to insert
clause in every labar contract

that neither the labor officials nor

and the public is much

amount involved is much smaller.

of

this be brought about?

leaders and politicians.

Bond

means

publication

my

and real profits would go
the more efficient. How

the

home; the railroad loses cus¬
tomers; the newspapers lose sales

Wllll
with

unfavorable,

can

tors and laboratories—not to labor

take

with

more

.

a moment
sympathies are with
the railroad or its employees. The
fact is that only the bus company
wins by such nonsense! The em¬
ployees have no more money to

whether

terms of the
AlcU1
Iraq

tele¬
stood
,

for

up

vital

touuuv

.

•

the

tickets

...

.

incompetence. The public it
food imports from the beginning to lose its hitherto im¬
United States a few months hence. plicit faith in the skill of the
Even the traditionai
But perhaps he cannot be ex- Treasury.
—"c
belief
.belief
in
"muddling
mupuimg
through
imuugu
pecfed to know, seeing that even
[
tuallv» has weakened matehis learned
colleague Chancellor«
«
rially lately. Everybody is asking
Dalton is unaware of it.
everybody else what will happen
j»Nobody is very enthusiastic when there will be no more dol¬
about using the facilities with the
lars left, and nobody can give the
International Monetary Fund—for
answer.
one
thing, the interest charged is
considered to be practically usuri¬
ous/ In
Joins Hutton Staff
any case, short-term facilities of any sort are not looked
Special to The Financial Chronicle
upon with much favor, owing to
SACRAMENTO, CALIF.—Wilin

.

use-

tUllVWU V

lessly in that direction will
essarily result in additional

so

$200,000,000 -r just to keep - Egypt
guiet for six months, tie has jus
signed away another $260,000,OOp
for

no

wages

goods today is due to inven¬

more

would then

costs

down, causing lower prices to
benefit consumers; while both real

have

^hy Diving Costs Are High

Hemi-

i

fact, the real

finished

The
go

bus lnto Boston.

to

sphere should
be
sold
to .the
United States has also been re-

unti1

open

its hours, higher retail-prices—all ex-

■

Meanwhile, Mr. Dalton contin¬
least, the ues to
give away dollars with both
^suggestion that some of the Brithands.
Having given away over
ish colonies on the Western
.

not

then

mist awaiting

m

panding like

.

did

bought, no newspapers
available, no baggage could

.

.

the

be

be checked and the public
phone could not be used. I

-

In

wage-workers

could

Until

a.m.

could

longer1 in

,

shall Plan." Last but not

•

j

have to pay out any more money.

pending the adoption of the Mar-

'

station
j{j
—U
the railroad did nbt
-Jt

employees

itself hourly

mother-country

chances of survival.

_

of -the

minor

some

territories the rest of the Empire

ancj

the

own

working hours

Babson

Roger

why

only hope; and the wage-workers
60% of these consumers.

make up

gnats!

who

suggestion,

a,

a aeighbor who was also shakthe door said: Okay, I m goshrug 'n§ down to the Square and get a

the

uncomfortable

-feel

Should

should

«al,S would
over

-Britain

,

talist

some

....

at

those

even

the

have to

conver-

!

strain

time

adopt

which
wiuch

a.lso

not

Crown.

authorities

Iiumauu-Mwmig countries,
non-sterling wuuuim,

wartime

the thought of parting
deliberately, as a result of cold bargain¬
ing, with any territory under the

the

from

of

Lucknow

possibility of inducing

Federal

Indian
Empire,
WH/lJLVHb
Burma, without tVCll
even

JUUHllCl,

inventions.

reason

recent

wages,
the
railroad
cut

.

vast

and
CU1U.

yet,

last

the

United States Treasury to
accumulate, for the time being,
the sterling received in
payment
or

>

Britain aban¬

seen

new

forced raise ih

looking at the picture of the Union
Jack being hauled down for the

solution of the present
crisis, ow¬
ing to the delay it involves.
On
the other hand, there is some talk
about

away

their shoulders fatalistically when

dis¬

for

the

should

American
is

bartering

sterling balances.
Having swallowed several
camels, surely the British public

approval for making
full use of its facilities with
the
International Monetary Fund. The

inter-government
loan
missed as impracticable

have

we

release

American

direct

have

view

in

of 'v a *

d

provoked
indignation in the Clubs
-

Boston

that,

Mr. /Wint

ago

receiving dollars in compensation;
on the
contrary, it is Britain who
is paying them heavily through

payment in

concerning sterling area
exchange arrangements. The gov¬
ernment is also urged to secure

another

would

liigy jj I,
Egypt

7

of

two

or

in

er

to

of

while

question is the suspension of Ar¬

idea

I was told lat¬

the

part of the Empire is looked
upon as high treason.' But mean¬

convertibility,

wbMi'do not insist
dollars.
A
more
ticle

idea

on

any

non-discrimination

v\y

to

the

it

short-term

more

where any idea of

for

clauses, or at any rate their drastic
SO
reinterpretation so as to enable
Britain

against

suggestion
in
"The
sell.out Honduras and
British- -Guiana- to
the
United
Times'-'

wave

almost unani¬
about

year

States

'

,T

consider

are

Upon inquir¬
ing the reason,

.

ringham's.

ex-

pect in such a
"situation.

mous

who

contracting

A

*

Opinion

have

debts in the United
States, all for
the benefit of other countries,
i

: of the "Press,"
; as ; much
one would

whether the

authorities

increased comfor more work,

their companies.

agent, no bag- £
master into "goods." What we can get for
and no news- our weekly pay in food, clothing
papers. The and shelter is our real wages. This
can be increased only through in¬
doors
were
locked
and creased production which requires
bolted.
longer and better work and more

ground that it would merely pro¬
long convertibility at the
expense

the

corres p o n

those

practicable

*

'

States

~

gage

solu¬

legal power to accumulate
sterling balances, but even manjy

amount

given

side

ROGER W. BABSON

i'1'

Last night, I spent in Wellesley. Desirous to
get to Boston early, I went to the Wellesley Hills railroad station to take the 7:16 a.m. train. This is a very fine stone station of the
Boston & Albany (New York Central
System) Railroad. To my surprise, I found no ticket

the

cer¬

advice is also

T
-

this

on

By

Scores lack of interest of railroad employees in

Dalton

a

i

\

there is specula-

way

tion about the

;

Mr. Babson cites instance in which higher railroad
wages brought about less work and
petition of other carriers. Says remedy is a lower wage system, with bonus as incentive

to

LONDON, ENGLAND—Now that official negotiations for

13

(821)

CHRONICLE

Labor Conditions

Correspondent reports almost unanimous opinion in Britain of
need
for suspending sterling
convertibility and non-discrimination clauses
of Anglo-American Loan
Agreement, but little enthusiasm for use
policy of "giving away" dollars

FINANCIAL

^

By PAUL EINZIQ

of facilities of the international

&

-

(822)

14

THE COMMERCIAL & FINANCIAL

CHRONICLE

ing group whose studies led them

person.

to

the colored

the

final action."

same

Scudder, Stevens
It is

ment

Up

articles

"Investment

on

monthly

magazine,

Estates."

In

Stevenson

his final

sums

advantages

of

up

some

of

funds

the
as

follows:
"The investment
company

investors

ary

for

use

share

and fiduci¬

enough

interesting
in

appeared

the

conveni-

permanent investment.

of

had

investments

mere

often

can

be

supervision
plete than is the

are

more

RAILROAD

individually

vised.

BOND

-

"(3) The
of

amount and

information

exercise

SHARES

of

likely to
case

of

available

for

the

judgment

be

greater than in
individual securities.

of

"CU There is
of

frequency

investment

are

the

Group Securities, inc.

super¬

a

distinct margin

and convenience
the mechanical details of
economy

in

trading,

bookkeeping, and investment

\i

t

su¬

pervision, as compared with an
equivalent measure of investment
diversification acquired in
separ¬

ate
a

prospectus

on

request

from your investment dealer

or

Distributors Group, Incorporated
-63 Wall

Street, New York 5, N. Y.

The

fund,

fund itself.
The

1

Scudder,

Fund,

which

variety,

has

Stevens

is

of

been

the

&

Clark

balanced

known

in

the

past for the conservative

quality
of its portfolio and the
relatively
narrow
price movements of its
shares.

own

June 30,

lows:

Its

1947

8.5%

was

in

portfolio
divided

cash

and

as
as

of

fol¬

govern¬

ments, 23.9% in investment grade
bonds and preferred stocks
and
67.6%
in
common
stocks
and
lower grade bonds and preferred
stocks.

Common

stock

to
net

$22,637,000.

Fire Insurance Stocks

investment;

-

grade

common
share
provides in one
convenient package a level of in¬
vestment
performance, both as to
principal and income, which is

not

insurance companies in which In¬

vestment

average,
their

or

of

professional

in¬

"The

investment, companies

growing

and

grow because
of

TRUST FUNDS
upon request from,
Investment dealer, or from

RESEARCH
120

SECURITIES

investors.

The

making
to

the

of

CORPORATION

broadway, new york 5, n. y.

be

the

wiser for

it.

If

after

such

study they buy the shares,
they will have joined an increas¬

other

ratio

has

always

proven

to

profitable level at which to
invest,"
v

from

coon

Hugh

W.

Long

has

Fund

Co.

&

reports

been

sold

Keystone

lock's

"perspective"

rubber

Paging Mr. Morgan

Custodian

of the

"Chronicle," of which his uncle, William B. Dana,

publisher and editor.
Mr.

Arnold

tired

from

G.

who

re-)

"Chronicle"-

in

bull Dana of

for

as

35

he

during which time

years,

Editor

was

of

its

department

news

Managing

his withdrawal
"Chronicle" Mr. A. G.

on

other subjects for

the

paper.
In the New Haven
"Evening Register" of Aug. 24, it
was

noted

pared
San

that

Juan

social

of

Puerto

and

he

ago

a

Co.,

gave a sealed

partner

of

Some years

Kuhn, Loeb &
envelope to his

under

American

articles later formed

Haven Mr. Dana became

direc¬

a

Com¬

of

colored valet with instructions to
deliver it to Mr. J. P.
Morgan in

He continued active in this
until

retire

ill

in

health

1943.

pertaining

area

are

than

preserved

the

New

history.
300

in

He

volumes
the

Yale

"The award of the
Advertising
Club's Gold Medal was for an ex¬

Colony Historical Society.

haustive

| IJMNjfESIMEN^^
^i
'|J

£

'I

Los Angeles

INVESTMENT FUNDS

IN

member

a

of

graduates

a

who

dating from 172t

Help Europe,

But

Keep U. S. Economy
Strong, Says Bullis ■■•/}
(Continued from

6)

page

not reduce the number of

jobs for

American working men. If we cut
down our imports, thereby reduc¬

ing our exports, we would lose
jobs making goods for export, and
gain jobs making substitutes for
imports.
The
chief
difference
would

be

that

the jobs making
imports would be
paying jobs.

substitutes
poorer

Marshall

for

Plan

Will

Increase

Our

Exports
American

Mr.

years

Shares, Inc.
upon request

We Must

New

University Library and the New
Haven

classes

forced

The

to

and Yale

more

in

were

was

Yale

to 1933.

Haven "Register" also said:

"During the past 10

of

imports than with the price mech¬
anism. Enlarging our imports will

problems

Shortly after returning to New

to

well

as

Progress"

Rico

the basis for his pamphlet "Porto

him

Haven,

interfere with the enlargement of

Rico's Case."

business

Dana

family

pre¬

rope.

the writer.

New

the

financial

Rico

These

1925

articles for

"Porto

on

rule.

in

series of

a

•

from

Prosperity," later also hav¬
on

1

Dana

returned to his native city of New
Haven and in 1923 wrote a series

ing written

'

.

several grandchildren.

Mr.

investment

and

Editor of the Railway and Indus¬
trial section
of the publication.
the

'

Albro Newton Dana of Providence, and a sister, Maria Trum?
son,

1922, had been associated with it

vorite of

Lord, Abbett & Co.
INCORPORATED

investing tlieir capital

s

founder,

was

1

1

.

Dana,

the

1

——

American Business

Participation in

Shares.

death, on Aug. 23, of Arnold
Guyot Dana, the last of a trio of individuals who figured in the devel¬
opment of the "Commercial & Financial Chronicle." Mr. Dana, who
was 85 years of age, died at his home in New
Haven, Conn., where he
was born In 1862.
In 1887 he joined the editorial and statistical
staff

following story, probably
apocryphal, is old but still a fa¬

—

issued

Petroleum

Formerly Identified i
"Chronicle"
Vj

With the

pany

The

Chicago

has

its

on

It is with regret that we record the

which

—

recent bulletins

Death of Arnold 8. Dana,

Haven

New York

Certificates of

S'

underlying issues,'

Group

Shares and Building

General

companies

Mills

such

interested

are

as

in

maintaining large export markets,
and large export markets will be
to the benefit of
omy.

It is

my

national

our

belief that

econ¬

if the

Marshall Plan is put into effect, it
result in larger export mar¬
kets for the products of American
will

agriculture.
It
seems
likely that Western
Europe will become increasingly

study
made
of
New
Haven's general economic
position

industrialized and less involved in

made at the
request of the Cham¬
ber of Commerce.
He published
his findings under the
title 'New

its

Haven's Problems'."

Fund;

af¬

approxi¬

:

investor with
$5,*

an

obtain

can

Distributors

the

covers

Providence,
a
textile
manufacturing firm with mills in
New England, the South and Eu¬

Prospectus

now

of

-

a well
rounded in¬
vestment program represented
by
more than 250

industry.

compiled

THE LIMBLTT GROUP

000

The current issue of Cavlin Bul¬

a

a
-

return

scribes how

since' the

Dana collected nictorial and other

mm

dividends,

net

a

published by ths
Keystone Company of
Boston, de¬

brought out last April.

was

material

I.

fords

pay

en¬

stocks that botli

mately 7%.

that nearly a million dollars worth
of
Diversified
Preferred
Stock
fund

common

and

earn

Kuhn,

tor of the Franklin Process

valu¬
art

and individual investors
who seri¬

will

be

investment

ously study investment companies

&

able

to

investment management. Trustees

Prospectus

NATIONAL

are

continue

In

words, $10 of net assets or liquid¬
ating value may be purchased for
$7.50. Historically such a favor¬

they meet the needs

company today is
able contributions

V
your

will

for about 25% less than

liquidating value.

to trustees in
general.

de

Na¬

tional Stock Series,
comprised

tirely of

"Keynotes,"

"False

Undervalued?

According to Hare's Ltd., "Cur¬
rently, stocks of the leading fire
surance
Group, Shares provides
ownership, can be purchased, on

management less easily
available either to the
public or

"Is

the rejoinder.

of Articles for the "Chronicle"

readily
duplicated
except
through other forms of group in¬

vestment

I's
was

holdings Following

alone at mid-year amounted
$14,037,000 equal to 62% rof
assets of

sanctum,

follows:

as

"National

Notes No. 421,"
issued
by National Securities &
Research
Corporation, points out that

day and sell out the

one

The costs of buying and
selling the underlying stocks are
expected to be absorbed by the

purchases.

"

(5)

the

to

inner

greeted

portfolio.

com¬

case With
respect
to equivalent selections of individ¬
ual securities,

W

credited

are

considerable wait,
was ushered into

Notes:

next
at
no
loss,
assuming
no
change in the market value of the

way.

and

same

he

"Well,
Loeb,"

will shortly eliminate the

purchase

company shares tharnin any other

"(2) The safeguards, afforded
by government statute, regulation

the

However, under the anticipated
new
set-up, an investor could

cheaply and more con¬
through
investment

veniently

of

but, of course, the purchaser pays
them under the present set-up.

advantages to justify its

"(1) Informed, selective, con¬
tinuously supervised diversifica¬
tion

offers both individual

which

and

firm

1%
premium
on
pur¬
chases and 1% discount on liqui¬
dations. These premiums and dis¬
counts

ences

off¬

an

present

and'^

article, Mr.

mutual

series of five

a

Company Shares"

"Trusts

Fund,

a

you de Mo'gan of J. P. Mo'gan?"
"I am," replied the
great man.

rumored that the Scudder,

counsel

name,

Mr. Alec B. Stevenson, Vice-President of the
American National

(Tenn.), has concluded

(

shoot designed for the smaller ac¬
counts of the prominent invest-'

Mr. Stevenson Sums
Bank of Nashville

whom

Charges?

Stevens and Clark

After

boy
Morgan's

Mr.

to Eliminate

"In and Out"

By HENRY HUNT

Thursday, August 28,1947

Mr.

Dana

is

New

Denison

Haven
Hewitt

and
of

As

imports

markets

of

for

Europe increases
foods, our export
will be corre-^

food

spondingly enlarged.

survived

by two
daughters, Mrs. Philip H. English

of

agriculture.

Mrs

Thomas

Greenwich;

a

The agricul¬
Europe will find
advantageous to shift from the
production of non-perishable sta¬
ples like grains to the production
ture of Western

it

of perishable and protective foods
like meats and dairy products.

...

SHARES OF CAPITAL
STOCK OF

BONDS

Challenge to Industry
The problem and the challenge
to American industry is to
in¬
crease

productivity and to reduce
only in the fac¬
tory, but all the way from the
factory to the consumer.
» %

(Scries B1-B2-B3-B4)

costs per unit not

PREFERRED STOCKS
(Series K.1-K.2)

We

in

General

Mills

not

are

fearful of competition. We always
had it in prewar years and we

COMMON STOCKS
(Series S1-S2-S3-S4)

consider it to be normal.

We shall

continue to
Prospectus from
your local investment dealer

with

ahead

move

the

.

production

or

and

distribution

high quality products and

TLeK eystone
50

to

Company

ol Boston
Congress Street

Prospectus
your

THE




the

needs

of

the

of

services
public.

We shall continue to strive for im¬

Boston 9, JSlassacliusetts

I

meet

>

may be obtained from
local investment
dealer, or

provement and greater efficiency.
•

I have confidence that every mem¬

ber of

PARKER

CORPORATION

ONE COURT
STREET, BOSTON 8, MASS.

her

our

part

company

to

meet

will do his or

the

challenges

and opportunities of the future.

look forward to

our

20th year

enthusiasm and optimism.

I

with
j

[Volume 166

•n

Number 4624

THE

COMMERCIAL

Why Stocks Are Not Discounting
High Earnings
1

Finnish

the surface.
in
agreement

Possibly

With
vi

some

our

is

There

nation

peace

the

the
Collins

J.

going

to

year

of

cause

movement

high hope. Over
it has collapsed.
the collapse has

the
diametrically opposed
ideologies of our government and

the

Russian

Government.

Each

government has become a nucleus
toward
which
the
rest
of
the

Main Street, America, and that,
far ahead as we can reasonably

is

The

with

been

will continuously arise in any ac¬
tive business period, all is well

Well.

past

Root
Charles

off

evolved for

were

purpose.

started

the

all

the

part,

Monetary Fund,

and

reckon,

last

United Nations
through
to the International Bank
and the

problems that

so

the

from the

temporary

on

situation,

at

might be

ex¬

minor

new

kept and world
promoted.
Institutions, at
financial sacrifice on
our

the

that,
for

cept

this

objective,

World, in the

one direction
other is being drawn.

remain

the

or

past

liize,

refused

year,

to

good

Jones

as

this

of

average

of

year

leading in¬
earnings

overthrow of the present Russian
Government by the people of Rus¬
sia, that could change this out¬
look. But, on any past or

$19.

evidence, developments

the

appears,

dustrials should

30

turn

$18

Dow-

in

to

present

Under

similar earnings in 1928 and 1929
it sold at over 300 and
during the
active years 1936-37, even
though
earnings were not as high as in
J928-29, it discounted each dollar
of earnings at the 1928-29 rate.
!Vet the average is now at 180.
Art

immediate

paradox

is

that

to

answer

Capitalism
but

pubic

is

to

of

In

psychology

of

on

this

above

drying

those

of

interna¬

of

up

ternal

example,

crises,

indication
Worse.

the

that

Thus, at

facing

are

with

improve

can

clear-cut

no

their

in¬

Conditions

before.- they
a time when

get

are

daily, weekly, and monthly
witnessing the atrophying of the

infection

culties

strength

underlying
diffi¬
the
body
economic.

in

What,

then,

can' have

influence at
that

year

work

has

been
the

over

affected

of

the

If, as posited in
paragraph, we are to
domestic

public

Earnings, and the ability of in¬
share in them through
corporate ownership, are one of
the important fruits of capitalism.
Any major threat to capitalism is,
therefore, a threat to earnings.

the

opening

look outside

business

for

the

While few

ventories,

the

contracting

working
capital, dangerously high break¬
even
points, or prices beyond the
This

consumers.

leaves

contains.

International relationships—polit¬
ical, financial, and economic or

outlook

Here

America,

is

room

until

for

thought.

recent

years,

little attention to the world

learge.

half

we

®ur

own

For

century

and

immersed

to

leave

alone and

to

problems

and

The

did

British, so far as
Concerned, could have

we

its

policy

of resistance to
Moscow's plans. Moscow's scienti¬

propagandist, Professor Varga,
has already written scores of arti¬

prophesying

crisis within the next months.
Another hope of the Soviets was
to build up Russia
by means of
war

booty

from

pountries which

the

occupied

being stripped

are

iterally to the bone in the inter¬
ests

of Russia's
economy.
Great
reparations were ekpected from

he

Allied

Zones

he

belief

that

of

the

Germany in
Allies

would

not refuse

delivery, being anxious
friendly relations with
he USSR. These'hopes have now
come to
nothing. The pace of re¬
maintain

o

construction-

has-

considerably

since

slowed

down

America

sending relief

to

has

the

a

So¬

the

rest.

World wars, the exhaustion of

our

own

well

finally, the globular implica¬
nuclear energy, have re¬
changed the American dis¬

Willy-nilly,

drawn

as

Want of food entails

decrease of

a

productivity in every industry.
Rusfcia is really in a very difficult
position and actually undergoing
economic

an

crisis similar

to

the

predicted by Professor Varga
for the U. S. A. In a state capital¬
istic country, Such as the USSR,
this crisis is, of course, bound to
>e of a different nature.
For the

one

irst,.: there is

People

are

no

more

unemployment.

ruthlessly

pelled to work than

ever

com¬

before

the fullest
and
possible use is
made of the labor of War.prisoners
and convicts, whose total num¬
ber

is

at

present

evaluated

20 millions.

:

The

at

.

crisis mainly expresses it¬

goods and in the disorgani¬
of transport.
Millions of
in their best working age
fallen

been

dis

have

either

abled

by the war and the people

or

longer work at the prewar
Productivity is decreasing
in every field.
The government,
however, wants to increase it by

from

Behind

from

the

"Newsletter

Iron

Curtain,"

compiled by "The Baltic Review,"
Post

Box

724,

Stockhblm

1,

Sweden.

soldiers but at prices Which
to the ordinary

inaccessible

are

up

the Soviet country are Communist

to 25% and hopes to attain this
by lengthening the working day
by increasing the workers' in¬
dividual quota. The more infor¬
about

the

Soviet

crisis

The only well-dressed people in

party members, officers, high offi¬
cials and members of their fami¬
lies.

the iron curtain

which

denser than

even

it already is. That the productive
apparatus of the country is at
least partly in a chaotic condition
is borne out
ures

by the punitive meas¬
repeatedly applied by the au¬

thorities.

The

purges

erto been "directed

have

hith¬

mainly against

the agricultural population.

Moscow, the capital, with its
population of six million people,

This

tocracy
even

an

privileged Soviet arisshops in special stores
ordinary mortal may not

enter.

Frederic A. Adams Is

Resuming Inv, Business
DENVER, COLO.—Frederic A.
Adams is resuming the investment
business
from
offices
at
745

makes

an impression of utter mis¬
The majority of the inhabi¬

ery.

tants are literally dressed in
rags,
pood prices have been raised by

200% within the last nine months.
The life of the people is indescrib¬

ably

hard

but

levertheless,

the

government,

has not abandoned

ts plans to industrialize the

ing;
of

even

a

age.
bne

small

have to do

rooms

family of five

the aver¬
That several families live in

flat

and

kitchen has
he

coun-

The housing crisis is appal-

;ry.

Soviet

cook

ever

on

in

a

common

been the rule in

Union.

The

has

war

further reduced the available liv¬

ing space. On paper the FiveYear Plan provides for considera¬
ble building activity. In Moscow
Mone
it
is
proposed to build

Apartments to the tune of three
million square metres of floor
ijipace. This giant plan has hitherto
hot been carried out to any

extent

worth mentioning: during the last

year building activities confined
themselves to less than 100,000
square metres

of floor

space.

Frederic A. Adams
5"

'

,

cently

been

into

we

world

have

affairs,

the world's mokt
powerful




Is

it

not

possible

assumed

modification

John B. Dunbar Staff

! A worker's average wages are
500 rubles per month. Half of this
he has to spend on his food, about

one-sixth is deducted in taxes and

LOS
ton

ANGELES, CALIF.—Mil¬

C. Brittain

dated

with

loans

and

on

the

rest he

has to

Brittain

was

Special

tenden & Co. and

their clothes, pay the rent, etc. A
suit of clothes of shoddy material

The

Financial

a

purchasing

permit,

issued

as

which
bonuses

are

to

(Special to The Financial Chronicle)

contributions toward various state

exemplary
market

workers;

on

the free

its

price is 3,000 rubles.
pair of rough women's shoes
costs 280 rubles when bought with
A

COLUMBUS, O.—John B. Joyce,
Jr.,

and

Arthur

&

.

>

'V

r

Chronicle
*

of

Boston, with which he had
been associated for many years.

August 21, 1947,

Duffy

have

Co., Huntington Bank Bldg.

Common Stock

Van

J.

joined the staff of John B. Joyce

PINEHURST, N. C.—Herbert J
McAlister, Smith & Pate
of Greenville, South Caro¬
lina. He was formerly Pinehurst
Manager for J. H. Goddard & Co

Bateman, Eich- *
1

100,000 Shares

Inc.,

t

;

With John B. Joyce & Co.

the Ameri¬

with

'

&

costs 900 rubles when bought with

that,

Dietenhofer has become associated

asso-

Dunbar

ler & Co.

McAlister,
to

B.

formerly with Crut- ]

keep his family, buy his own and

Smith & Pate
*

has become

John

Co., 634 South Spring Street. Mr.

Price $11.50 per share

,

;

Special to ThU Financial Chronicl*

v

discounted?

With

In the

M. G. Britiain Joins

as

on

re*

engaged

service.

though the domestic business
be

Mr. Adams has

in govern¬
past he waa
partner in Engle, Adams & Co.

ment
a

>

'

.

Marion Street.

NOT A NEW ISSUE

the

population

sometimes be obtained from these
same

doubt

of

"the

Soviet citizen.

sometimes
Abstracted

up to
market.

con¬

zation
men

rags

and

free

wear. Shopping for clothes
mainly done at second hand,
soldiers occasionally selling cheap¬
ly things they have robbed abroad.
Even
European
luxuries
can

exchange of the rate at which
earnings
have
been
habitually

being,

tions of

position.

robbing of the occupied

were

foreign economy and another,
plus the
impact of these develop¬

cently

The

the

is

penetrates abroad the greater are
the government's efforts to make

American

an

permit
on

have to

no

mation

fic

cles

the

can

©ne

on

outcome

15

and

European

abandon

favorable,
&nd even though the implications
bf the cycle theory be ruled out,
the international situation, as jus ;
dutlined, is sufficiently grave as to

in

magnificent job of solving them.

ments

even

cause
a

remained

Americans will

eventual

not yet con¬
sidered. This is the whole field of

®rtd

affairs

rubles

ideological struggle now marching
to
its denouement,
neither can
they overlook the threat that it

important factor

POen

anticipated that the re¬
sulting chaos will compel the U. S.

purchasing

1,500

Hence,

clash intensifies.

past

answer, we cannot bring forth the
possibilities of over-extended in¬

trade.

a

vestors to

>

of

world

outside

as we might hope would
be of assistance as the
ideological

{sentiment?

purses

such

in

pace.

our

should be husbanded We

resources

sinews

and

can

its

sumer

chief

a

general
lowered

ah

as

Wars

frenzy

the

accompanying

•I wo

in

nations, of which Great Britain is

Dr.

in

regard

loot,

territory is at stake;

idea.
a

Not

pillage.

Question. It is like saying that a
died because he had a
high
fever.*
Fever is an infection ac¬

consensus

or

an

attain

optimism, it begs the

companying
disease
human, body and the

or

plunder,

man

at

millibns

pessi¬

natural

cycles

on

itself.

conditions

the<§>

unem¬

self in the lack of food and

current

gave

an

re¬

Dewey,

an

6-8

tional commerce that is
being Wit¬
nessed out of the current trend
of world events, other
capitalistic

few who,
with
make allowance for

and

spells
thing—an onslaught, not

put one
between capitalistic groups or
capitalistic
but •
group,

psy¬

those

mism

under

are

concatenation

h

this

investment

whose

way

chology is low. This answer, how¬
ever, is not satisfactory, Except

©f

of

that

shaken by

countries has proved less gainful
than was hoped.
Two bad har¬

between two systems. There are
things that could happen, such as

in

their
price level,
the
earnings that are being
reported? If the business picture

for

be

soon

short, we are witnessing the
approach, between a world vests in succession
also
make
divided, of what most Americans themselves
painfully felt. There
Sense will .be a death
s
a
struggle, a
shortage of grain and sugar
war
of unconditional
Surrender, is a still rarer commodity. The

brilliant
as

'

In

recog-;

economic

goods and disorganization

consumer

It is

viets.

Divided

felow

Why have individual stocks, over

is

train.

ceased

>

A World

of

picture

and

.

^ Having made the above assump¬
tion, we are still faced with the
Question;
What
is
wrong - with
Wall
Street?
Stated
otherwise,
the

will

Government
a

trade

assump¬

tion

appears

whereby

present argu¬
ment, make
the

as

war's end, was the
organization of
a
world federation

position. Let
lis
all, how¬
ever, in order

A.

present

with

first

our

opposite

limit

hoping

S.

economic crisis with

ployment

have been
plunged into

Faced

body of opin¬

to

robust

so

(823)

Says Russians hope for economic collapse in U. S.

U.

pivotal position.

a

ion that takes
an

being

dark

paints

an

others who read these
words may be

point.

ew

as

CHRONICLE

A Finnish
subject who has recently visited Moscow has told us
the following about life and
conditions in the Soviet capital: Russia
is waiting and

Investment analyst ascribes failure of
stocks to rise
along with
;; increased corporate earnings to unsatisfactory international situaj; tion and crises in foreign countries.

On

visitor

Russia, with lack of food
of transport.

President, Investment Letters, Inc.,
Detroit, Mich.

We do not regard current business

FINANCIAL

A View of Postwar Russia'

By CHARLES J. COLLINS

\

&

Alstyne Noel Corporation

1

16

THE

(824)

COMMERCIAL

greatly expanded
example, a re¬
article in the "Harvard EBusi¬
Review" on the subject of
insurance investment outlets
through

them

Private Investment and the Secondary Market
CI Home Loans

for

VA official
take up

cent

case

of default.

profitably

accumulation

an

not

or

this

trend

expanding

preparatory to
riding out the

with

of available credit with the elim¬

sails of credit

tors

recession then

ination of the RFC market is

thought to

pendent largely

be

orientation

imminent, and
posedly

sup

heralded
the

b y

in

mar¬
which

T.

the

of

general

B.

King

ina¬

then in effect to curtail excessive
the

on

sale

homes

of

to

veterans, and;

million of this an¬
may not
find a
productive investment outlet.
It is to be hoped and expected
increment

that GI home loans will absorb

such

have

is

the

that

a

activity in the less

pop¬

ulous sections of the Nation. These
institutional

same

groups

are

al¬

additional

or

plan for inclusion in their port¬
of the unprecedented vol¬

With

the

being

month.

continuance

prosperity,

of

eco¬

the checks

and

outlet

plying of credit

investment

the

GI

sec¬

tendency toward

loan

capital

the

fluctuat¬

meet

agricultural

some

of

areas

industrialized

less

scarcity

a

in

resources

or

is

those

for

lending institutions who
sell GI home loans.

local

wish

to

If this type of

activity

taking

were

loans

from

private

lenders

were

Jacksonville, Atlanta, Houston and
City. In contrast, the
purchase in the larger
such as New York,
and Chicago lagged be¬

ing institutions have in particular
developed and expanded conduits
through which many millions of

tant from the large urban capital

hind,

centers, the problem of affording
a
secondary market for GI loans
would largely evaporate.

centers.

steadiness

the

of

into

This

rate

of

private absorption of these loans
evidenced by the fact that up
until the final flurry to market
is

loans

to

RFC

in

anticipation of
the June
30
cut-off, the RFC
Mortgage Co. had purchased only
about $50 million
about

only

nine

a

little

aggregate

of

months
more

dollar

GI

of

loans

in

operation,

than 1% of the
volume

GI

of

home loans made since the
incep¬
tion of the Program.

-♦Reprinted from "The Mortgage
Banker," organ of the Mortgage
Bankers

Association

of

America,

August, 1947.

for

concentration

secondary

a

the need

of

market

for

GI

home loans in the semi-rural and
more

sparsely industrialized

areas

of the nation results from the fact
that local

to

lending institutions tend

have

sources

relatively
for

limited

investment

real estate loans,

term

in

or

re¬

long-

are

ac¬

Detroit

indicating a plentitude of
private investment capital in these
It is

significant to point out that
of the less urbanized sections
of the country are
experiencing a

offer

appears

be construed

to
to

buy,

or

securities.

as

The

as
as

a

tistics

as

considered

those

capital

in

the

attractive

urban

by

industrial

areas.

industrialization

South

employ such resources
In
they have at yields far above

had

1880

3%

the

the

of

in

the

proceeded at a faster
the national average.

than

South

had

U.

total

S.

17%.

The

less

than

report also shows that

potential rate

of

labor

force

Community lending institutions growth
in the non-metropolitan areas find
difficult

it

to

to

sufficient

extend

veteran

home

buyers

in the South is the na¬
tion's greatest. Expansion in other
areas
of the U.
S. which have
been generally regarded as pre¬

dominantly
rural
and
sparsely
populated has also been rapid.
It
seems probable in these areas
with

matter

a
an

of record

only and is under

circum«

brightening economic future
mortgage investment possi¬
bilities will develop With* increas¬
ing tempo. The GI loan is a fore¬

offering of these securities for sale, or as
of an offer to buy,
any of such
is made only by the Prospectus.

an

solicitation

offering

The

problem of providing ade¬

inyestment capital for GI

home

mortgages

solved

PLYWOOD INC.

if

and

August 1, 1947

Price: 100%
of

the

Prospectus

other

Stock)

already located on the scene
will step up their investment ac¬
tivity in their home territory.
There
in

hv

regularly distribute

be

obtained

persons

the

to

companies

ance

are

the

any

the

State
under_

Prospectus in such State.

ESTABLISHED
115
August

BROADWAY

26,

1947.




1907

NEW YORK 6, N. Y.

factors

situation

which

extension

of

an

activity

into

in¬

regions

where there is a lack of
adequate
investment capital would work to

benefit

but

INCOIfOIAlU

number of

present

the

•EWBrwks 8^7.

a

that

suggest

vestment
within
whom

if smaller insur¬
and other inves¬

tors

plus accrued interest
may

be

compa¬
investment pools

expand their mortgage origi¬
nation and purchase programs into

Due August 1, 1967

oni„

signed may

well

can

5% Sinking Fund Debentures
Purchase 50,000 Shares of Common

could

large insurance

these areas, and

r-

GI

of

the

GI

home

loans

as

an

of

of

attractions

them

needed

program,

home loans

offer

which

additions

as

portfolios.

also

vestors

not

of

institutional

themselves.

these factors
serve

the

only of veterans,

to

in

in¬

Discussion of

some

detail

may

good purpose.

It is

widely known that insur¬
companies and other large
investors are currently faced with
a very real
problem of finding at¬
ance

tractive investment outlets for the
excess
funds now available to

number

a

recommend

investment

to

,

;

could

changes in VA's ap¬
praisal policies have enhanced the
soundness

of

GI

loans

invest¬

as

ments.

Early in 1947 the VA sys¬
tem of apprasing reasonable value

tightened
previously lenders

Whereas

was

empowered to select any one
appraiser from a designated panel
were

within the

locality, under the re¬
desig¬
appraiser for
each
property and
appoints
a
selected group of appraisers to act
vised system the VA itself

in

occur

where five

case

houses

the

or

more

be involved.

may

increased

over

VA

supervision

appraisal procedure has

been generally welcomed and ob¬
served to afford additional pro¬

tection

for

lenders,
GI

veteran

borrowers,
purchasers of

investor

home

loans, and the

govern¬

de¬

a

pression of tragic magnitude. And
in that event, it is quite
probable
other

on

an

even

precarious footing.

more

The

fact that the

cash

in

presumably gilt-edged

bonds

and

not

claim

in

the

debentures with

or

is paid

form

of

varying

maturities

should also appeal to
the investor in GI home loans.

Taking all of the factors into
consideration, it may be expected
the
larger insurance com¬
panies and other investment pools

will

themselves

concern

reexamination

with

a

the

of

geographic
locations in which they invest in
urban

view

home

mortgages

toward

with

a

possibly

expanding
their GI home mortgage purchase
program in previously neglected
regions and less-populated areas.
Similarly, smaller insurance com¬
panies and other investors already
located in these
sider

of

a

home

GI

should

areas

including

block

loans

con¬

sizable

more

in

their

portfolios for the present year and
If this can be done, the
problem facing lenders with in¬
adequate secondary market facil¬
for 1948.

for

GI

home

greatly minimized.

loans

Such

opment, moreover, by
dence of the ability of
vestors

flow

of

capital
to

as

giving evi¬
private in¬

the

into

be

devel¬

necessary

the GI loan

would indicate the

program,
swer

furnish

to

will
a

is need for

whether

not

or

an¬

there

government-provided
market by the, time
Congress returns in January 1948.
a

secondary

important is the fact that

GI home loans offer

an

H. E. Scott to

Open

.>

Own Firm in New York
Herbert E. Scott will

in

gage

ties

a

shortly

en¬

general market securi¬
from offices at 25

business

Broad

Street,

New

York

City

1541).

Mr.

Scott

was

(Room

formerly with A. E. Ames & Co.,
Inc.

ment alike.

Also

unless

individual

an

each

prin¬

experiences

economy

ities

Recent

attractive

and

ness

under the firm name of H. E.

Scott

thereto

prior

did

Co.

busi¬

f

yield to institutional investors. As
a

general rule, the yield to insti¬
which purchase GI home

tutions

loans

for

investment is higher
than alternative investments, such
as

government or corporate bond
issues. This is true even if they

purchased at

are

moderate pre¬

a

mium.

Thomson & McKinnon
Branch in Atlanta Under
L. P. Crouch
ATLANTA,
York

The

investor-appeal

of

these

GA. —Thomson

Stock

Exchange

and

Exchanges, have opened

excellent

in the Healey

Of

record

in

veterans

have

repaying their GI loans

790,000

home

&

McKinnon, members of the New

loans has been augmented
by,the
made

of those possibilities.

runner

values

possible

that

capital
particularly
with reference to those parts of
the country where such a flow is
lacking.
into

that
no

nies

Copies

principal

a

$4.5 billions.

steady flow

a

manufac¬

turing population; by 1939 it had
the

#500,000

Dated

with

over

discussing the attractive

features

similar

quate

to

Before

This

NEW ISSUE

(With Warrants

loans

amount of

than the

a

stances

total

a

cumulative total to almost 790,000

home

more

rapid economic development
older, more settled areas.
The South is an example of this
trend. According to a recent re¬
port of the Bureau of Labor Sta¬

our

exceed

will

principal
amount of well over $3 billions.
GI home loan approvals during
June exceeded 51,000 bringing the

nates

some

rate

customed to

credit

This advertisement

loans

with

550,000

up.

of

place in all sections of the coun¬
try, especially those sections dis¬

The

home

sured

volume

program has steadily expanded.
The larger insurance and invest¬

dollars in such loans flow
their portfolios each week.

every

for GI home loans

areas

estate

face

investments would be

is

Oklahoma
urban

would

that

12 months
expectation that
the number of guaranteed or in¬

out

agencies
purchase from correspon¬
Generally
speaking,
throughout those areas adjacent to
the metropolitan centers, there is end of May 1947 four of the five
a satisfactory participation of
in¬ RFC offices which had bought the
vestment capital in providing a largest dollar volume of GI home

by

market

on

to

to

by the record of GI
home mortgage • purchases made
by the RFC Mortgage Company
prior to June 30, 1947.
At the

or

dents.

the VA appraisal system in
January, 1947, the participation of
the secondary investor in the sup¬

put

to

cash

demands for
business credit.
The

the

there

problem.

the form of

ing

ready investing millions of dollars

se¬

need to
below the amount of
original loan before the in¬

funds. During the next

insurance

to

folios

nomic

the

to

answer

borne

each

resources

Outside

capital to aug¬
ment the deficient capital supply

through local offices

(3) Failure of private secondary

processed

financial

the

a

insurance companies

as

provide.

market investors to anticipate and

were

are

secondary
market which institutional inves¬

of

of such loans that

strain on their
the groups

a

real need for

a

in GI home loans either by orig¬
inating the loans themselves

ume

putting
They

Outside capital in

belief

my

vestment

bility of the VA appraisal system
prices

reserves.

mar¬

property

would

cipal loss.
It is difficult to see
how, within the foreseeable fu¬
ture, such a drastic decline in real

ondary market outlets would en¬ investment outlet, it should be
companies and other investment courage the smaller lenders to emphasized that the interest of the
groups
with substantial capital supply needed credit to the vet¬ VA in broadening the secondary
eran
resources can go far toward pro¬
by providing a means for market is not motivated by a de¬
viding
an
adequate
secondary converting GI loans to cash when sire to expand the current volume
their credit exhaustion point
market for GI home loans if they
is of GI home loans to higher levels.
will expand and extend their in¬ approached, or when they require Rather our interest is to assure
is

It

then occurred;
(2)
Obser¬
vation

followed

grams.

the

security
kets

de¬

the geographic

on

by investors
their mortgage purchase pro¬

in

abrupt

break

without

participation
will serve measurably to bridge
the gaps which opened in the wall

loan

vestor

nual

<$>-

Whether

the

that about $700

insurance companies and investment pools,

substantial amount of these excess

toward

of the loan, the

year

ketable value of the
sink to 53%

$3.5 billions of new assets each
year. The article further estimates

Early in the Fall of 1946, the open market that had previously existed for GI home loans
practically vanished. Post-analysis of that development traces it to three primary in
(1) A short¬
of
the

would

At the end of
the

of

secondary market for G1 Home Loans, since Congress ended operations of
on June 30.
Says secondary market is badly needed for GI Loans in
and small communities and taking up this slack would prove private investment is capable of
providing credit without government aid.

ening

sixth

curing

vest

as

fluences:

investor

prospective principal loss in

estimates that life insurance com¬

Mortgage Corporation

areas

a

panies are now struggling to in¬

as

the

face

ness

Service, Veterans Administration

private investment institutions, such

function of RFC

the RFC

rural

urges

before

loan

asset holdings. For

life

By T. B. KING*
Director of Loan Guaranty

Thursday, August 28, 1947>

CHRONICLE

FINANCIAL

&

an

other

office

Building Arcade

un¬

der the direction of Leo P. Crouch,

loans

approved
1947, less than
5,000 have been reported in de¬
fault, while more than
12,000

through June 25,

have been paid in full. This
rep¬
a default ratio of
only 6%

resents
or

barely

over

V2

of

1%.

More¬

over, about 1,800 of these reported
defaults have already been cured.

Emphasis should also be placed
the protective character of

upon

the

VA

guaranty

which

greatly

reduces the element of investment

risk in GI loans.

Under the guar¬

anty the values of residential real
estate

which

represents

are

se¬

curity for GI home loans would
to plummet drastically be¬

have

fore the investor would face pos¬
sible loss on his investment in the
event of

default.

take

case

the

tized

home

of

As
a

example,
$10,000 amor¬
an

loan

•

Leo P. Crouch

Crouch

Mr.
ager

was

formerly

Man¬

of the firm's St. Petersburg

branch.

running for 20
which is guaranteed for the
maximum of $4,000. The market
years

value

of

the

home

which

is

underlying security for the
would

have to decline to

a

Joins Clark Davis Staff

the

loan

point

Special

is

42% below the amount of the loan

ter

at the end of the first year

Davis

of the

to

The

Financial

Chronicle

MIAMI, FLA.—Eugene V. Wal¬
now.

connected

with

Clark

Company, Lanfdrd Bldg.

"

I

Number 4624

Volume 166

" "

THE COMMERCIAL

&

SEC Reports on Maiket Break of Sept.
A. Tre?nor, Jr., Director of the

James

Trading and Exchange Divi¬

12:45.

*

study extending almost

Says study will

a

-

released its

port
'

'

trading

the

on

•"New

York

Stock

:Ex

-

••change
on we " find no evidence that market
Sept.' 3-N46; prices depended at any moment
^wheri s toe k on manipulative .activities. -No¬
prices under¬ where r does it .appear that the
'

went

a

overall

severe

•decline.

The

by

sued

of

by'

.

market

action

resulted

from planned or concerted action

statementis¬

the

any group; nor

'group'

any

f

foi-

do the activities
seem
to
have

"On.Sept. 3, 1946, the average
share
price of the 945 issues
Stock

York

lots

share

100

in

traded
New

group for

the

sarily

de¬

tained

on

Exchange

to

than .the .free

more

of different

opinions

as

the day do not

neces¬

that Ihe group main¬
consistent /purchase or

mean
-a

clined from $39.35 to $36.95; Some

sale policy throughout the day

time thereafter we

all stocks

began

a

day's stock trading on the
Exchange. The Trading and Ex¬

balance'

change Division of the Commis¬
sion has recently completed a re¬

,

„

.

periods .when

were buying, others were
selling. There are two 15-minute

periods

different
1;8

periods
active

all

Except in

ac¬

turn sub-divided into transactions
in

balances

.

in

the

other

15-minute periods of' the day.

firms (for firm and individual

in

member

position
in! the 945 stocks traded.They hac

banks, investment trusts, odd lot
dealers, member and non-member

are

which" all

in

groups had a sale balance

given

specialists. These activities

groups

composed of members of the Ex¬

times by public buyers, foreigners,

counts, and for wives and depen¬
dents), and by floor traders and

.some

change

sifications of these stoqks.Il shows

at

of the '15-minute

..one

in

the

case

of

the

most

stocks

(as distinguished
from all stocks)' and '.without- ex¬

ception in other classifications of
stocks, the pattern of their posi¬
tions

was

different throughout the

stocks, in stocks graded
according to activity, according to
their use in standard indices, in

day-

stocks with different rates of de¬

issues traded, and in all classifica¬
tions of stocks except the five

,

>

.

.

cline throughout the day, and in
stocks of various industrial clas¬

sifications.
<

"In

;

,

gathering material

study,

staff had

our

records

of

for the
to the

access

the

Exchange and of
Its
.members; their facilities were
made
freely, available, and the
study has been greatly facilitated
by their cooperation. The same is
"true

of

the

public

many

traders

.

*'For
were

the

entire

oh balance

of the

50

most

declines

1

data

day specialists

buyers in Ihe 945

active; stocks,1 and

sellers in other categories. In the
215 stocks with the largest price

floor-traders,

: s ta t i s tic

of

markets

special
are

advantage.

likely tc

never

be

precisely predictable,

or

to go

or

static

only up."

•

heavy

Holds Firms Violated

sellers;

concentrated in the
first few minutes of the
day. Pub¬
ic ^traders were also on
balance
sellers in the
opening half hour.

of

During the first part of each of
the two periods of
sharp decline,
most member
groups were sellers
on

balance, while odd-lot dealers,
public, traders, ,and
investment
companies /were' on
balance
buyers, in the latter parts of those
declines,1 the

positions

were

re¬

—

the

day.

remainder

However,

non-member

member

brokers

and

times buying for
controlled accounts while

and

some

during
periods they were sell¬

same

ing for others.

For

most

periods
day member groups did not

of the

have

of

dealers

were. at
the

the

District Court

same

,

balance

on

posi¬

tions.

Cleveland enters Anal injunction for violation.

at

of Rule T of Federal Reserve Board.

.

Judge Rbbert N. Wilkin, of the U. S. District Court of Cleveland,
Aug. 21 upheld the Injunction Against.several securities
brokerage
concerns, three of them member.
r

on

of the New York Stock
accused of

Exchange,
Violating Regulation T

governing extension\.of credit by
members of natiohal securities ex¬
changes and other brokers - and
dealers
York

to

customers.

Stock

involved

The

"Exchange

-New

members
& Co. in

HirSch

were

tional

violation

had

been

made

by the Securities and Exchange
Commission in its complaint.

With Southeastern Secure.
epeclftl <to The Financial

chronicle

'

WASHINGTON, N. C.—Harvey
C. rElliott

has become associated
Southeastern -Securities of
Charlotte.
In
the
past he was

Cleveland, Butler, Wick & Coi,
•with
Youngstown, / Ohio, ; and 'A:
E.
Masten & Co. of

Pittsburgh. The

selling continuing over-the-counter

balance for the

on

Jackson

&

house

of S.

T.

Co., Inc., of Youngs¬
also 'included in die'

"Washington,. N. C., representative
for, the Carolina Securities Corp.

town, was
injunction against A. E./Masten «&
Co.

Each of

judgments
by Judge Wilkin upholding the
injunctions.contained a .statement
to I the

effect

that

the

violations

had been committed unintention-

ally,

and

.no

charge

of .inten-

Special- to The Financial Ohronicl*

RALEIGH,

N.

Moorman, Jr.,
iated

with

has

C.

—

Louis.

become

and

"

George I. Griffin, In-

jsurahce Building.

coincided

with'the-first parts of the
major
price -declines; their reversal to

buying
parts

balance in

/on

of \the

the

declines

latter

preceded

periods df relative levelling.
"Concentrated selling by
group, public

Exchange
market.
many

ing

Its

any

members of the
pressure

effect

factors. It

on

varies

the
with

in ris¬

may occur

well

as

refined
in

or

puts

as falling markets. As
the study is it does
not,

as

view, afford

our

assured

a

basis for any

generalization about

the
effect of the trading by
any group
on ^either. the whole character of
the

Sept.

'acter

in

3

market

its

or

char-

given period of the
day. Indeed, it seems clear from
the

any

Report that it would be fal¬

lacious

to

think

of

any

of

the

day, specialists,
member and

and

non-member

on

the

his own initiative and from his
.motives.
Some
acted
con¬

own

.

trary, To the -average of the groups.
"This does not/however, imply
a-composite view of group
activities may not aid the formu¬
;

that

lation and evaluation of standards

?'The largest group of fellers on
graphs..< I VWe have afforded to the Ex¬ balance for the clay consisted of

orderly markets. The challenge In
working out such standards is to

change

preserve

in
70

over

a

the

study consisting
tables,
charts and
.

ment

an

opportunity for

com¬

the Report. It has made

on

certain suggestions. We have not
felt it
necessary .to reflect any of

these suggestions .save those which
were
helpful in clarifying and

members

of

>

.

"The

Report

■description
■does

not

-

.

is

;

.

limited

with

the

a

general

international

and

background of

market.

to

of market activity and

deal

■domestic
nomic

.'

Based

on

the

eco¬

day's

voluminous

a

collection of detailed information,
rt gives the most
coinprehensive
picture of a day's market yet
Presented.

It

reaches

no

sions.

-

.

"This limitation

While

conclu¬

was

-"

inevitable.

the study may be

opinion

other institutional purchasers.

restraints

group

"Short

sales

;./,

appear

as

exclusively

or

that

ing

was higher than the preced¬
different sale price.
These

limitations

act

as

a

brake

on

the

depressing effect of short selling.
Consequently the net effect of
short selling may be less than that
of

similar

a

volume

of

sales

against inventory.
."The

primarily




for

the

a

maintain

maximum

fair

and

of freedom

interplay of individual
.while
minimizing .-such
on a

free market

as

arise from the unwarranted

may

exer¬

cise of advantage derived through
special position. A purely factual
analysis, of this one day's market,
amounted to no more than 1.5% considered alone, does show what
of all sales. Under our rules short further controls, if any, may be
sales cannot be made below the necessary or desirable to achieve
last
sale
price and .cannot.'be that .objective. It adds to our pre¬
made at the last sale price unless vious knowledge a wealth of fac¬

suscepti¬
graph of ;average prices
ble to a
variety of interpretations for the day shows a moderate de¬
based on differing outlooks and cline
from
the .opening
until:
standards, no group or individual, shortly after 11 a.m. Thenceforth,
professional or public, nor any and until about npon, there was
single market factor, plainly ap¬ a sharp decline followed by a
pears

to

the public and the
of buyers on balance
consisted of investment trusts and

largest

from the
study to have been an insignifi¬
malting more concise the state¬ cant factor in the day's market
ment of the facts contained in the According
to the
Report-/they

Report.

designed

more

gradual decline until about

tual

detail

that

spective: to

should

further

give

per¬

analysis

of

broader scope. But more needs to
be known, and we propose to find
out more,

than this highly inten¬

sive but limited study tells us. We
shall
continue
also. to
consider

whether, with this -and other ad¬
ditional information, it may not
be possible to reach a more pre¬
cise definition than .anyone has
yet been able to achieve, of what
constitutes a fair and orderly mar¬
ket

within

markets.

In

our

tradition

so

doing it is

of

free

neces¬

Speed L

a

to you

fast

as

creed with newsmen. They flash the news

The Bell
It

as

it happens.

System helps make that speed possible.

provides the local, long distance and radio-tele¬

phone, telegraph, teletypewriter and wire-photo
facilities
and

over

which the

microphones.

news

is channeled to presses

,

Keeping these facilities in top condition is the

job of skilled telephone company technicians.
They work 'round the clock and the
with the newsmen in order

calendar

that you may
for the

have

a

"front-row seat"

passing parade of world events.

BELL

TELEPHONE

L.

affil¬

; member
groups
trading the .study shows what is

groups h preceded

.

With Geo. I. Griffin

the" three

"^'Respecting

firms,.'(trading lor
firm, individual, and dependents'
accounts) were en balance buyers;

-are

gathered
of

.

Margin Rule

groupsTrading on that day as a
traders were on balance buyers single responsive body. The buy¬
for the day in value of -stocks ing: and. selling of all groups on
Sept. 3 (as is probably true of
traded, were on balance share
buyers for Ihe day in the Dow- othpr/days) is a statistical com¬
posite of the separate trading of
Jones stocks, high-priced, medium
different individuals, each acting
priced, all inactive stocks, .in. 45

•own

Report

abuse

most active and 50 utilities. Floor

who gave information about their
transactions. Attached to the

and

Free

,

cations of stocks. For example, an

most

selling,in all. stocks traded in
10Q share lots and in various clas¬
done

regulation and from the restraint*
imposed by manipulation, fraud

-

and

being

that

~

„

was

administer:

we

typically with the group
throughout the day.:"
' , : :
V already, known: that it is an In¬
tegral part of the whole market.
"The Report shows that the con-'
Selling on balance by specialists
duct of groups varied
with ;in
as a
group and by other member
tervals of time:and with. classifi¬

trapes prices for each minute of
ihe day and describes the buying

what

".group

any

haved

,

,

position ;of

necessarily signify that all or most
of the individuals in; the group
shared the group's position or be¬

entitled ,'Stock Trading on
the" Now York Stock Exchange on
Sept. 3, 1946.' We, have this day
released the Report. ;
' •■:' 1
(
"The Report analyses the buying and selling of various types
of buyers .and sellers, in 15 minute
; (and
in
some\ cases,
shorter)
periods throughout the
day.'; .It
port

.

iri

or in any given classifi¬
cation of stocks. Nor does the 'on

study

of that

;

to

buy and when to sell. As
Report, makes clear the 'on
balance' purchases or sales of any

,

H

balance

on

public. traders'

play

lows:

:

-

when to

con-

nection with

the report

-

were

the

in

SEC

Jr.

J,"A. Treanor,

laws

theii1. sales

versed, member groups being, 4n
general, buyers and public traders
being, sellers on balance
'the

amounted

the

For. the

With Ihe, exception of
specialists,
"The study was not undertaken
who/were large on balance buyers
because of evidence that:
anyone in the first
half hour, all member
had manipulated the market ingroups were on balance sellers
violation .of our statutes or rules.
during that period.
In surveying the .collected data

re¬

t he

on

of

,

full year, the Trading and Ex¬
change Division of the Securities and Exchange Commission, headed
by James A.#t
———■——
Treanor,
Jr., f accountable for the character of
on
Aug.
22, the trading throughout the, day.
a

what we

next hour prices fair; and orderly markets are in¬
sharply again, then be- tended also to be free markets-jan levelling .off until near clos- frCe alike from the restraints of
'
ng when,' in the last lew minutes, arbitrary or
capriciously contrived
they had a short decline. From the
opening
uhtil
11:45
foreigners

"

After

to keep constantly in mind
regard as a basic premise

sary

3,1946

(825) .17

declined

sion, finds no concerted action by any group and reports largest
tellers on balance were individual investors, and largest group of

buyers were investment trusts .and institutions.
be continued.
;
;
r
—1
*
;

FINANCIAL CHRONICLE

SYSTEM

.

I

COMMERCIAL

THE

(826)

18

•

'

■

_

British

-

Securities Salesman's Corner

but up to this point I have never

Treasury Reports

with

Dr.

with direct sales solicita-

you

going to be successful in obtaining new accounts from a
If any one of the following are missing you are

are

mail

factors which must be present if

several important

are

campaign.

very likely to

waste ydur money and your time.

Choice of list. It is vital that you send your first message
fb;;a group of qualified people. After experiencing quite a number
(l)

bf; tests with various mailings the writer has found no absolute
constitutes a good prospect

is

method of determining in advance what

our

is above average. A reorganization situation seems to be the
best producer of replies especially if you make an offer of informa¬
tion without obligation. Often the lists that you least expect to protiifce do the best. Another good list is a company that has been

experiencing difficult times (such as the passing of a dividend or
"ail interest payment) and you can make an offer of information.

^

(2) After you send out your first replies to inquiries received
keep a record of what you have done. Follow up this mailing with
.another offer of information.
Suggest a free offer of statistical
Or offer a particular security but
always MAKE YOUR PROSPECT WRITE TO YOU. The following
letter is an example of what we mean and if used properly it will
reports, enclose a list form, etc.

pull replies.

We have just completed a study of the common stock
of

of

very

$

This company is engaged in the steel

v.-

of the major producers
in the country.

m

In

case

industry and is

alleged that the
squandered.
The
following figures, in millions of
dollars, will show how the loan
has been drawn and spent.
been

has

"It

has

loan

been

"Regarding the July figure, we
postponed until July 1, at the re¬
quest of the United States Gov¬
ernment, a drawing of $150,000,we

had desired to make

will

notice

the

&

Co.

line

at

the

of the

bottom

letter

for your

more

rthe number of times he
future business.

(3) Always make it easy for your prospect to reply. This is such
obvious necessity for obtaining replies but many times it is over¬
looked. Always enclose self addressed, postage paid reply envelope.
■Use double cards.
;

-ap;

(4) After you have received a few replies start to write a more
^personal letter. At the beginning of ybUr-correspondence it is natural
that you ~ should be1 formal (but never stiff). But after the second
or third letter try and elicitra response along more direct lines." If
you are good at writing a chatty letter about the outlook for securi¬
ties

or

any

4© do it.

general subject of interest to investors this is the time

From here on you must

play the law of averages. Remem¬
ber if you obtain one or two good accounts that run into the six
jor seven figures you've got something worthwhile.
The nice part of
selling anything is that you never know when you are going to hit
-something big and once in a while it happens.

months
is

in

Good

at

an

exceptional

pace.

There

"Further, there is

distinction to
be drawn between drawings and
spendings in a month.
For in¬
stance, of the $700,000,000 drawn
in July some were carried over
into August. Therefore, in looking
at

the

rate

credit

look

it

at

of

is

a

exhaustion

more

spendings

drawings.

At

the
no

news

a

of

conference

on

Statistics

Labor

important to
rather than

predicted
has

business slump
postponed indefinitely.

summer

been

-"From my vantage,

viewing em¬
ployment and construction, I don't
see

any

weakness

yet," said Di¬

rector Clague.
"Nothing looks
startling and I don't see anything
.that will
topple us over," he
.added.

of

exports

kept

up

over

adverse balance

of

$1,200,000,000.
These direct purchases were di¬
vided up as follows:

States

of

Fleetwood Inv. Co.
DENVER, COLO.—G. D. Fleetwood and Wm. McCullough Fleet¬
wood have formed the Fleetwood

: Referring to the effects of dras¬
tic decline in exports, Mr.
Clague
.remarked that even if this oc¬
*

curred "we have

a

very

Investment

Co.

with

offices

1080 Sherman Street to
engage

at

in

the securities business.

resurgent

sorb

.

a

large part of it."

Asked if he expected the Mar¬
shall Plan for European * aid to

Patrick

Buckley Dead

t

Patrick

E.

Buckley, partner in

.

.keep

exports, Mr. Clague re¬
plied: "Exports are now,,exceeding imports by a very large vol¬
up




Harris, Upham & Co., with head-.
quarters

in

Chicago, died at his

home at the age of
fifty-nine.

14%
7%

-

12%
' 4%'

slow

go

They have
in

credit, and of

drawing

course

we

their request.

It
has been agreed between
the two
Governments that we should meet
cur
Canadian dollar expenditure

—payment

for

in

the

purchase

particular

of

and

first

six

months

of

whole—that

area as a

$50,000,000 for South Africa,
$60,000,000
for
Australia,
and
$235,000,000 for the major part of
the area, including all the Colonies
and India; while on the other side
of the account Malaya had earned
$140,000,000 by the sale of her
was

natural

in

the

last

six months

of

the previous year,

instead of our
having to pay out to the rest of
the sterling area, the rest of the
sterling area paid in to us, in the
aggregate, $155,000,000. Therefore,
taking the year as a whole our
total payment out was

$50,000,000.

"Our sterling balances stand at
nominal figures which can not be

regarded as figures which can be
finally taken for granted for com¬
mercial
The

and

totals

trading transactions.

of

ances arose

those

in the

sterling bal¬
ordinary way of

_________

11%

and

resemble

assets

at

debts

war

as

we

all, except victory,
figure of the total
.

.

.

During the same
spent 615,000,000 United
dollars, divided thus: In

Canada, $220,000,000 practically all
food,
predominantly
wheat; in
Central
America,
$260,000,000
principally oil and sugar; and in
Argentina and other South Ameri¬
can

countries, $135,000,000, principally meat and some cereals. The

includes balances representing
turnover of trade since the

the

of

the

war,

larger part
lated

are

but

by far

balances

during the

the

other

Our

war.

.

.

"In

the

gold

members

third

and

stand at

have

varied

past

place

dollar

now

ably be in the month of October
number

of

measures

are

we

going to take will have effects—
of them

immediate, such as
stopping the buying of foodstuffs

hard-currency countries, < and
immediate, such as the
foreign travel allowances.

The

effect

will

be

period

of

these

somewhat

before

United

the

States

cuts, I hope,

to

extend

the

exhaustion

of

credit.

Canadian Loan

"Beyond the United States cred¬
it stands three elements:
There is
the remains of the Canadian loan
—at the present time there is out¬

standing
Canadians

$500,000,000.
have

But

the

themselves

run

storm and have frankly told

that

they are finding great dif¬
ficulty in paying for imports from

lhe^itedSta(e%withthrexport
Drawn

Cumulative

Balance

Total

Left

(In Millions of Dollars)
$400
$400

should be explained in the United
States because some people think
have

we

been

States

using the United
pile up gold and

credit to

dollar

reserves.

case.

Such

200

137

200

800

224

2,950

100

900

2,850

200

1,100
1,550
1,750
2,050

March

323

307

450

May

334

200

June

308

300

July

538

700

is

not

the

...

"Our trouble is this wide
yawn¬

ing gap between exports and im¬
ports, and no less or more than
that.

Therefore, all

must

be

our

measures

aimed at narrowing the
both ends, and to operating
both sides of the gap to nar¬

gap at
on

it.

row

when

We shall only get straight

we can

pay with our current
exports, visible and invisible, for
our
necessary imports. That is the
goal at which we must aim, and

must

we

accomplish this in any
whatever temporary allevi¬
ation may be got, whether through
case,

international discussions in Paris,

ing the part the United States can
play.
We must
close
this
gap
within, at the outside, a short span
of years, and all the other devices
must

be

no

devices for

J,"This

year

imports,

and

dollars by
are

Our

case.

600

2,750

-

must

we
our

the

fewer

Government

oversea

on

and these
the

bridging
two.

9?

mean^'that wqYnusI^ spend

expenditure,
more

than

more

a

fewei;', dollars On
dollars

own

earn

efforts,

only factors in

imports, in¬
invisible, and our own
expenditure must be so

oversea

own

adjusted that, within a few years
at the most, we can close this gap.
We are confronted, as to the size
of the gap, in terms of dollars,
with $2,400,000,000 worth in this
year, so far as the western hemis¬
phere as a whole is concerned,

United

States

Latin

the

and
as

well

as

the

States.

"With

a view to
closing this gap
proposing these measures.
proposing to reduce our
foreign exchange expenditure on
imports of food from hard cur¬

we

are

We

are

sources at the rate of $48,a month, and with regard
large number of other items
of expenditure, giving a total, ad¬
ditional to food, of over $200,000,000 a year. The result of this
will be, in round figures, that if

rency

000,000
to

a

we were

to continue the reduction

in

imports

food

from

hard

cur¬

while hoping to
supplement these in considerable
rency

sources,

amount from soft currency sources,
there would be a total saving at

the

$3,350
3,150

369

April

our

these

$2,400,000,000. They

American

in

from Loan

$210

all.

very

including Canada

us

the

stand

reserves;

others less

a

of

little over the
It is important that this

year.

.

"When the United States credit
has been exhausted—it will
prob¬

into

.

drawing rights under

years—$1,280,000,000 in

cluding

Net

_

for

accumu¬

Spent

1946—3rd Quarter....

February

United States and Canada.

South¬

we

Quarter.

of the

the

.

regarding Europe, or international

war

have known them in the past and
to which correspond no tangible

in

.

emergency is very
than
a
temporary

more

discussions in Washington regard¬

These

some

which

special war-time conditions.

under

end

from

suffering.

and

trade since the end of the

It

now

present

four

products.

"But

famine

is

the constitution of the Fund are
limited to $320,000,000 a year for

this calendar

asked to find $205,000,000 for the current trading of

sterling

The
much

but

year we were

the

dollar

world

Fund.

Sterling Area

We, in this country, are
of the sterling area
we hold the gold reserves for
whole sterling area.
In the

the

the

emergency, not only for ourselves

...

....

and

wide

cut

Kingdom

4th

domestic demand which could ab-

and

goods

bankers

—a

27%

America.

imports can't be
form

pe¬

purchases with
dollars in the rest of the Western

ern

some

25%

____

Hemisphere—Canada
period

without

The

...

30, 1947,
we spent
$1,540,000,000, as against
earnings in the United States of
exports,
visible
and
invisible,
amounting to $340,000,000 — an

excess

loans abroad."

could export

we

own

"On direct United Kingdom pur¬ Of'these balances at- the end of
chases in the' United States in the tJund stood at $14,236,00$,000. This
excludes all liabilities in respect
12 months ended" June

United

—

our

"The nominal

"But this is only the first item
in the account.
There are also

Aug. 20, Ewan Clague, Director of the
the Department of
Labor, expressed

Obviously this great

the

Germany (food and other
supplies)

of

opinion that there would be ♦>
serious recession, and that the' ume.

of

Films

Clague, Director of Bureau of Labor Statistics, holds that
will not cause business slump.

Bureau

*

was

additional payment of $40,000,000 in respect of Canadian grain.

Tobacco

sharp decline in exports

even

these

an

Ships

"No Recession," Says Labor Department
Statistical Head
Ewan

St.

the

During

open.

few

the

when

stationery—neat typing—short concise phrases—no Food
-overstating or overselling—these things are very important. In mail Raw materials (including
selling you are judged by the quality of your approach.
troleum)
Machinery
(5)

we

months the Canadian wheatilowed

likely he is of doing business with you. It isn't only
sees your name and literature that counts,
it is bringing him into action that paves the way for confidence and
the

concentrated

Lawrence

prospect to sign. The objective of a successful mail campaign is to
Imake him do something too. The more often your prospect writes
£to you

1947—Janury
always

Please send i above information
will

Thirdly, in July

grain shipments under
the four-year contract, which are

summer

Blank

You

behalf of the Ger¬
keep them alive.
In

on

that purpose.

Yours very truly,

>"

Secondly, July included
of the large periodic dollar

if

over

of

inability to do that.

our

Services,

began to make payments for the

we

produce.

to

acceded to

wheat

services to pay. for the imports we
need. Pur difficulties all rise from

the

mans—to

one

have

of

be almost

enough

July $50,000,000 were drawn for

send it to you.

i

*.

Information

British

Canadian

^7"

;*

the

question

b y

follow:

payments

and

of

would like to have the latest report

you

be pleased to
*

furnished

one

excellent company which is now available under
per share. The common dividend is at the current rate
a share per annum.

a

•$

•vV

Hugh Dalton

in June.

j'Tf"
A

Sir

000 which

Dear Mr.

..

exhausted

by October of
this year, Ex-r
cerpts of his
remarks,
a s

Jercentage of replies in lists have never in most casesa the quality
he insurance stockholders experience but brought in very large
bfTeads

of

expected to

be

Some lists will pull replies and others will do very poorly.

11$.

own

us

this

other
convertibility is not
things—only as to 50% by draw¬
Great Britain, principally what is written in the
ing on the Canadian credit and
explained to Anglo-American loan agreement.
as
to the other 50% by
Parliament on These countries are running very
drawing
on United States credit.
August 7 the short of dollars and are increas¬
"In the second place, there is
use
made
of ingly demanding from us sterling
the possibility of
drawing on the
the $3,750,000,- convertible at once into dollars.
If we had not agreed to that they International Monetary Fund. This
000 U. S. loan
Fund was never intended to
make
granted Brit¬ would have invoiced the bill to us
long-term loans or to correct any¬
ain and
the in dollars straight away.
thing as fundamental as a world¬
"Our grave difficulties would
reasons why it
Cabinet

-

<->:». There

asked
on

Labors

the

in

heard of anyone doing it to the

tion.

of their

Hugh Dalton, formerly Professor of Public Finance at the
now Chancellor of the Exchequer

Some have had success
occasional mail idea but the main benefit from sales corre¬

an

Use of American Loan

on

London School of Economics and

exclusion of all other methods of solicitation.

spondence has been its use in conjunction

Thursday, August 28, 1947

Hugh Dalton, Chancellor of the Exchequer, tells Parliament
how loan was spent and plans to overcome export deficit Fore¬
sees exhaustion of U. S. credit by October and estimates sterling
blocked balances above $14 billions.

r

k* Many dealers have wished that there was a short cut method of
doing business by mail. It would be an ideal set-up if securities
could be sold in large volume through the use of mail campaigns

CHRONICLE

Dr.

By JOHN DUTTON
£

& FINANCIAL

annual

year—a

rate of

$800,000,000 a

fair contribution towards

2,000 '

reducing the size of the gap.
In
addition, there will be savings in
respect of Germany, savings which
we cannot yet estimate with
pre¬
cision. But this still leaves, a wide
gap which can only be reduced by

1,700
1,000

exports. ..."

2,650
2,200

the

rapid expansion

of

our

own

Number 4624

Volume 166

THE

FDIC Reports Increased 1946
of Commercial Banks

COMMERCIAL
gories

FINANCIAL

shared

in

CHRONICLE

the

expense

increase.

•

been continuous since 1938 and larger earnings in
1946 attributed both to higher rates and increased volume of
loans,

by higher operating expenses. Net profits average
about 10% on capital accounts of which about one-third was paid

offset in part

dividends.

a

.

j'

.

rise from 1945 and

20%

rise

in each of these years.

since

The

1943.

on

43%

a

increase

in

The 1946 Annual Report of the Federal Deposit Insurance
Corpo¬
he number of employees was a
ration, just released, furnishes some interesting data regarding the
ess
important
influence
than
earnings and dividend payments#
8
8
higher
salaries
in
causing the
of insured commercial banks. Ac¬ attained such favorable
results.
arger payrolls.
Furthermore, almost 25% of the
cording to the report.

Both total

net current op¬

and

of insured com¬

erating earnings

From

smallest

banks,

with

deposits

of

less than

year

reflected

15%,

case

chiefly

the

higher average rate of return se¬
cured on loans and the
larger
volume of lbans. Net profits after

slightly below the level
attained in 1945 because char^etaxes were

offs and income taxes were higher,

and recoveries and profits on as¬
sold

sets

lower.

were

The- 1946

profits represented a rate of
10% of total capital accounts.
Dividends paid to stockholders,
though higher than in any previ¬
ous year of deposit insurance, ab¬

net

one-third

about

sorbed

after

profits

of

net

Continuance

taxes.

conservative dividend pol¬

of the

1945

5

of

1946, the average

and

In

1946, increases over 1945
reported in all major cate¬
gories of current earnings.
In¬

13%.

employees

9%, respectively.

salary of officers in¬
10%; that of employees,

From

1946

each

24%; that of

from

loans

total

of

accounted

Federal

million,

earnings in 1946,
with 29% in 1945.
in

the

rived

for

The increase since 1943 accounted
for one-fifth of the increase in all

proportion of income de¬
from

reversal

of

loans
the

represented

downward

a

trenc

Income from loans hac

since 1942.

accounted for from

42 to 49%

of

operating expenses in the

current

last three years. The passage of
the Banking Act of 1933 provided
for elimination of interest on de¬

total

capital accounts to total as¬

The

about

improvement in the

itability
which

been

has

recent

prof¬
operations,

banking

of

characteristic

throughout

has been
the banking

In

the

years,
of

each

practically

banks

no

general
system.

three

last

of

years,

have

sus¬

tained net losses after taxes.
The

improvement in rates of
profit in 1946 over the preced¬
ing year was also widespread; it

net

occurred among banks throughout
the

country,

the

except

larger

interest

on

deposits combined had been the
largest single item of current op¬

in

posits has been the second largest
single item of expense, after sala¬

1945, and the rate of in¬
loans was about one-

ries and wages. From 1934 through
1943 the amount of interest paid

in

on

tenth

For the first time

higher.

since 1939, there was an increase
in 1946 in the rate of income from

This reflected some firm¬

loans.

higher proportion of high-income
producing loans, such as consumer
instalment loans, and

lower pro¬

a

portion of

ligation.

chiefly United States Gov¬
ernment obligations, and to a large

curities

expansion in security holdings. It
was these banks \vhich were most
affected

by the Treasury retire¬
program
and by the less

ment

favorable market for United State
Government
In

obligations.

1946, as in each year for a

amount of income on se
increased in 1946, * as il;

The

.

since 1940. From
1945, the relative

has in every year
1940

through

importance
of

source

security

of

income

had

as
a
increased

steadily. However, in 1946 income
from securities provided 49% of
total current operating earnings

compared with 52% in the prior
there have been year. Interest on United States
more banks with satisfactory and
Government obligations increased
high rates of net profit, and fewer from $1,133 million to $1,219 mil
banks with losses or unsatisfactory lion
in 1946. Interest and dividend
rates of net profit.
income from other securities also
as

number of years,

In

$167

65% of all insured increased, from
banks reported a rate of net profit $177 million.
1946,

after

over

taxes

of

more

than

10%

of

total

capital accounts, as com¬
pared with 55% in 1945, 37% in

1943,
the

and 23%

earliest

In 1938,
for which com¬

in

year

1938.

parable figures are available, 16%
of the banks sustained a net loss,
whereas in each of the last three
years

less

reported
There

than

1%

of the

banks

net loss.

a

was

little relationship be¬

tween size of bank and the ratio
of net

profits to total capital ac¬
This is shown by
of banks accord¬

counts in 1946.

the distribution

ing

to

amount

of

deposits.

The

results

largest banks
somewhat less favorable
than
the
intermediate

groups.

About 30% of all insured

smallest

showed

the

and

commercial banks had net

in

excess

accounts.

of

15%

of total

profits
capital

This proportion was ex¬

ceeded by banks with deposits of
from $1 million to $10 million

each; the next smaller and next
larger size groups showed a some¬
what

smaller

proportion. • How¬
ever,
only 14% of the smaller
banks, with deposits of less than

$1

million

each, and only 13%
<of the largest banks, with depos¬
its of $50' million or more each,




sive
such

lowering of the rate paid on
deposits. The significant in¬
since

1943

in

the

amount

increase

in

the

amount

ing of interest rates, but primarily
a
change in the composition of paid, in the face of continued de¬
the loan portfolio. Banks held a cline in the rate, is attributable to

1945, due in considerable ex¬
tent to large profits on securities
sold,

time and savings deposits de¬
clined as a result of the progres¬

on

crease

low-income-producing
loans, such as those made for the
purpose of purchasing and carry
profit
ing United States Government ob

banks in the large centers. It was
the latter which had shown the
most favorable rates of net

than
come

The

average

had

rate of income on

1.56% in 1946
,1.46%
in ,1945; the .rate
declined in every previous

securities
from

million to

rose

to

since 1937 when the rate was
2.68%. The average rate of return
on United States Government ob
year

the

81%

of such

deposits outstanding.

other

Taxes,
upon or

than

those

based

measured by net income

Four-fifths

of

the

increase

in

operating
expenses
oJ:
since 1934 occurred in the

bank®

last three years.

All major cate

deposit insurance,

ing

crisis

of

the

of

income

9%

1945,

and

times

the

were

than 4%

taxes, at $301
larger than in
than

more

amount,paid

four

1942.

in

1933. In 1933 and
succeeding 13 years*
amounted to less

have

of total capital accounts.

This represents a

lower level than

irr any

of the preceding 65 years
which adequate bank records

or

available.

are

As

a

result of this

State income taxes at $22 million

conservative

were

virtually unchanged from
the preceding year. Federal and

proportion of net profits retained

State income taxes absorbed 26%
of net profits before taxes in 1946,

higher during recent years than
during any previous period. In
1946, such additions to net wotth

compared with 25%
15% in 1942.

in 1945

and

after taxes, at $902
million, were fractionally below
the
unprecedented
amount
re¬
ported

in

1945.

The

dividend: policy

the

for addition to net worth has beep

amounted to 67 % of net profits,

Net profits

rate

of

net

br

$603 million. In recent years re¬
tained profits have constituted the

total

major source of growth in
capital accounts.

"

■

Scores Tinman's Budget Statement
(Continued from page 11)
ary
more

New Deal propaganda for
huge appropriations.
Yes,

the Presidential

race is under way,
but the people will not stand for

any
cial

juggling of the Federal finan¬
That

operations.

hits

the

pocketbook.
"Mr.

in

Truman,

his

the

of

budget,

tries

.

"In,
on

securities, at $60

were less than one-half
1945 figure.
Recoveries on

million,
the

loans, and recoveries and
on
other
assets
did not

profits
differ

to one-fourth of 1% in

eries

1946. As in

preceding years, recov¬
exceeded charge-offs, thus

the three

didn't

a

padded budget.

represent all the

padding.
President

"The
nor

fair

neither

is

frank with the American peo¬

ple. He bases his whole statement
on
the premise that his $37,500,-

to

.

Recoveries

that

But

000,000 budget submitted last Jan¬
uary was the maximum amount
leave with the country an impres¬ sought.
sion that the Congress effected
"He insists that it represents the
savings of only about $1,500,000,- maximum expenditures for the
000 in the expenses of the Gov¬ fiscal year and, on that basis, gives
ernment.
He
goes
further and the Republican Congress credit for
attempts to prove that when Con¬ no more than a cut of $500,000,gress makes the deficit appropria¬ 000, a figure arrived at by setting
tions he is certain will be made, up a billion in supplemental ap¬
the saving will be cut to $500,- propriations he says will be nec¬
review

recurring

profits.

turned out to be

political

fluctuated

was

current

characteristic of insured

commercial banks since the bank¬

depreciation have 000,000.
"Mr. Truman again refuses to
slightly from year to
year, without significant change accept Congressional responsibil¬
in level.
Other expenses at $526 ity for raising revenue and ap¬
million in 1946 absorbed 18% oJ: propriating
public funds.
Last
total earnings and have increased January, he said his budget was
in recent years at about the same the final word, a rock-bottom,
hard-boiled budget, which Con¬
rate as total operating expenses
gress should accept without ques-,
In
1946
insured
commercia
banks -reported profits'on securi¬ tion^
.vit5
ties! sold, chiefly' United
States b "Now, in his August statement,
Government obligations, of $209 he again insists that he is the
million. Although this was 22% budget-making power of the gov¬
less than the 1945 figure, it was ernment.
He simply refuses to
significantly
higher
than
the accept Congress' cuts, as is evi¬
amount reported for the other war denced by his open declaration
years.
Profits in 1946 were ex¬ that so soon as the second session
ceeded in only three other years of the 80th Congress convenes he
of the 13 since establishment of will ask for supplemental appro¬
Federal
insurance
of
deposits. priations that will wipe out most
These
profits on security sales of the savings made. Again he
contributed materially in 1946, as places himself above the consti¬
in 1945, to the high level of net tutional powers of Congress.
and

higher, 1.49% as greatly from the amounts reported
compared with 1.37% in 1945, re¬ in recent years.
flecting smaller holdings of bills
In
1946,
insured
commercial
certificates and notes, and larger
banks made provision for losses
bond holdings. The average rate
on
assets by charge-offs or by
of income on securities of other
additions to valuation allowances
obligors declined further in 1946
at the rate of about one-fifth of
to 2.34%, from 2.52% in 1945.
1% of total assets or $283 million.
The remaining portion of cur
Recoveries in 1946 on losses pre¬
rent operating earnings — some
viously charged off, and reduc¬
what
less
than one-fifth — was
tions
in
valuation
allowances,
derived from various sources. In
amounted to almost three-quarters
come from
trust department and
of charge-offs.
As a result, the
service
charges on deposit ac
rate of net charge-offs in
1946
counts each accounted for slightly
was only one-twentieth of 1% of
under 5% of total current earn
total assets. In the preceding ten
ings. These, as well as commis
years,
net charge-offs averaged
sions, fees, safe deposit and rea
about one-fourth of 1%, and dur¬
estate rentals, and other income
ing the first two years of deposit
grew at a rate commensurate with
insurance were much higher.
the growth in total current earn
Charge-offs on loans amounted
ings.
ligations

has been

since

Prior to that date
demand and on time

loan holdings were
one-fifth higher in
1946

loans. Average

practically unchanged. The
million of dividends paid;
including interest on capital notes
and debentures, in 1946 was 3.3%
of
total
capital accounts.
This
conservative dividend policy is a
continuance of the practice which
$299

deposits.

mand

icy followed by the banks during total current earnings in each year
the war years resulted in substan¬ from 1934 through 1941.
erating expense in most banks,
tial net additions to total capital
The gain in income from loans and
consistently
amounted
to
accounts. These additions, coupled
resulted both from a growth in about one-third of total current
with
a
decline
in total assets,
Since 1933,
the volume of loans and an in¬ operating earnings.
brought about a rise in the ratio of crease in the rate of income from interest on time and savings de¬
sets—the first rise since 1937.

mained

each

were

q$

declared by rlnU
banks has re¬

commercial

sured

Income Taxes

em¬

operating
as
compared
This increase

current

ovejj

dividends

cash

for

rate

years

higher

dented growth in net profits
the last four years, the rate

dividends

1943 to

increased

prewar

total

of

was

the

double

and

19

capital ac¬
than in any?
year, except 1945, since the begiq-t
ning of deposit insurance,
u\
Notwithstanding the unprece-f^

except 1936.

gain, increasing 31% to $951 ployees 25%.
«.•
million, the highest amount in any.
Interest on time and savings de¬
year since
the establishment of posits, $269 million in ,1946, rose
Federal insurance of deposits. In¬ 16% from 1945 and
64% from 1943.
come

the

of

than

more

amount

the inception of

est

33%

were

10%

profit,

counts,

no

commercial

estimated

respectively.
During the, same
period the average salary of offi¬
cers

insured

were

3oth the amount and the rate for

1946, the av¬
erage number of officers and em¬
ployees increased 11 and 17%,

from loans showed the larg¬

securities

banks, at
$1,226 million, were 2% larger
ihan in 1945, and amounted to
13.6% of total capital accounts.

average

creased

were

come

to

number of officers and

$500,000, but only 6% of
increased
all insured commercial banks, re¬
The

have increased in
since 1938, and in 1946 ported net losses or net profits of
attained the highest levels on rec¬ less than 5% of total capital ac¬
ord.
The 1946 increases, in each counts.

mercial banks
each

(827)

Charge-offs
higher than
Salaries and wages, the most in the preceding year, but recov¬
important item of bank expense eries were much lower, so that
in recent years, accounted for one- net charge-offs were
significantly
lalf of the increase in all current higher than in the
preceding war
operating expenses over the three- years.
year period.
The largest increase
occurred during 1946.
The 1946 Net Profits Before Income Taxes
Net profits before income taxes
figure of $831 million represented

Earnings

Process has

out in

of

&

first

sufwaix,

session

gress

did

on

tws is what tjh?

These addi¬
he says, will
wipe out a billion of the savirigs
effected by Congress.
essary early in 1948.
tional appropriations,

"Now this is all fallacious.
truth

the

of

matter

The

the

that

is

$37,500,000,000 Mr. Truman asked
for did not constitute the sum to¬

tal

of

his

budget proposals.

Not

by more than $2,000,0011,000 does
it constitute the total.-

•

-

*

the budget was submit¬

"After

ted, the President made

a

num¬

ber of requests

for additional ap¬
propriations which totaled $2,023,252,21-6.
Thus, his total budget
requests went far above $39,000,000,000 instead of the $37,500,000,he

000

tries

now

American

to

the

make

people believe

his

was

top figure.
"Thus

on

the basis of his

recapitulation
nues

own

reve¬

apd expenditjuros, the savings

of the Eightieth Con¬

made

government expendi¬

than

tures:

of estimated

by the Congress
$4,000,000,000.

is

more

"The solid fact that no amount
cut

"We

estimates

President's

the

by

1948

We

$2,766,000,000.

of

bombarding

and

rescinded funds that would other¬

amounting to

his

men

by Mr. Truman
change, is that

can

the

the

wise have been spent

Eightieth Congress has made
best economy record of any
in a quarter of a cen¬
tury. The reductions we made in
the
Presidential
budget
were

$442,500,000. We made recoveries
for the Treasury that the Presi¬
dent did not recommend amount¬

Congress

ing over all to $911,700,000,

greater

"This
the

1948

makes
fiscal

the President's

a

,

total cut below

year

estimates of

budget of $4,120,-

were

to

any

a

has

Congress

budget
es¬

was
■

' .t:

"We shall insist that the admin¬

800,000.
"In

than

Presidential
since the budget system
tablished in 1923.

done

come
forward
spirit of coopera¬
tion for economy and not stub¬
born opposition as they did dur¬
ing the first session of the Eighti¬

addition, we made cuts that

istrative

effective in making savings

next year

last fiscal
amounting to $359,740,568.
figures add up to a total
savings to the Federal treasury of
$4,480,664,303 that the Republican
Congress accomplished.
in the operations of the
year

These

branch

in

a

eth Congress.

the Congress last Jan¬
uary, recommended expenditures
for the fiscal year 1948 amount¬

High Tax Harry do¬
quarterbacking we have
little hope of getting that cooper¬
ation. The moral of it all is that
when the people, in 1948, elect a
Republican President, who will

ing to $37,500,000,000.
That was
"hard-boiled" budget, which

gress, we

"Mr.

Truman,

in

his

budget

message to

resulting in net recoveries on loans his

"But with

ing

the

cooperate with a

Republican Con¬
1

will finish the job.v

~>

THE

(828)

COMMERCIAL

&

FINANCIAL

CHRONICLE

Roy B. SundeH With
Special

to

The Financial

dell

has

become

Greenebaum

With the

probable consummation of the quarter-century old St.
Lawrence Seaway scheme, U. S.-Canadian joint economic planning:
will have attained new heights. This grandiose project which will
mstitute a New World "Danube" will bring into being the' world's
potentially greatest commercial water-route.
Reaching from" the

•

Sun-

associated

Investment

with

Co.,

39

1

dantic Ocean into the heart of the richest industrial

of this

areas

Commerce Department estimates for 1946
per capita income
for
was
$l,2O0y or more than double 1940./ Western farm stalP«
show greatest increase."
nation

Chronicle :

CHICAGO, ILL.—Roy B.

Thursday, August 28, 1947

Reports Record Individual Incomesin: 1946

i

Greenebaum Inv. Co.
By WILLIAM J. McKAY

•

i
'

*

In

almost every

state total

income

payments to individuals in
j946 were at a- record high, the Department
of Commerce
reported
on Aug. 25.
The per capita income
—■■■■
■■■'■/■
—:
£
for the country as a whole in 1946
gains in trade,, service, and
agri
reached $1,200; more than double
cultural incomes, in
payrolls of
the $575 average for. 1940.
nondurable goods
manufacturing
For - the
continental
United industries,- and in veterans'
bene¬
States, the total income received fits and pensions more than
off¬
by individuals last year was more set sharp decreases, in
-

>untry and of Canada this vast^
—
1
~
sufficed to make the Dominion the
oep-water sea-lane will forge a
world's leading exporter of base
ill
stronger link between the
and precious metals. Hitherto the
:onomies of the two countries.'

;

The

importance of this project
solely orr its

not be measured

an

/aiue

sea-lane.

new

as a

the

Included

overall

additional

plan ' are
aljso
development of
hydro-electrie power,

which will

still further stimulate

.1

.chemes

for

industrial
the

the

growth

especially

on

Canadian side of the border.

In

this

that

connection

it

is

believed

the

discovery of the vast
high-grade iron-deposits in North¬
ern
Quebec and Labrador might
turn the tide in favor of the projest

as

this
the

whole.

a

country

Steel interests

are

eventual

now

envisaging

exhaustion

of

the

great Mesabi ore-bodies* and

looking to

new

in

are

fields for future

It

reserves.

prove

now appears that the
deposits will ultimately
to be the world's major

source

of iron-ore and

Labrador

tfce mate¬

rialization

of
the' Seaway
plan
greatly assist its exploita¬

would

tion.
.

is

There

-

that

of.

every likelihood
will eventually be¬

leading exporter instead
importer of iron and steel.
however, is not the only
a

an

This,

field in which the Canadian

econ¬

stands to gain as a result of
this far-reaching project.
It has
long been recognized that Can¬
ada's greatest potential asset is

omy

the tremendous mineral-rich
of the Laurentian Shield,
So
of

far

this

area

only the outer surfaces
two

million

obstacles

in, the

than

of
fuller development have been the
lack of adequate man-power and

freak

of

vious record high of
1945.- '
' .:

with

.commendable

with the

hitherto

Laurentian Shield- will be

opened

to civilization. The problem of
transportation and communica¬
up

tions still remains, but just as the
construction of the Canadian Pa¬

cific
of

Railway created
economic

*

a

new

era

development,,

similar

a

South
dell

La

Mr.

Sun-

ing department of Thomas E. King
& Co. Prior thereto he was with

Cayne, Robbins & Co. and Hicks
& Price/

would not only

ielp to solve the problem, which
faces this country of assuring fu¬
ture reserves of essential indus¬

requirements but it would
also tend to produce "a better bal¬
ance of U. S.-Canadian trade.
It
would also constitute

direct

of

consequence

ability to create fresh

Canadian

reserves

•

F.

Hutton

Company, member of the New
York Stock Exchange and one of
the

pioneer

wire

houses

serving
the west, is
expanding its facili¬
ties to serve Dallas, Texas.
Quar¬
ters

have

ground

wire

been

floor

leased

of

'

1935, with

office.
will

The

office.

the

rehabilitation" of
-

world

Dallas
of

will open with approxi¬

the

firm's

in

It will rep¬

22nd

New offices

opened

branch

feet

square

mately 15 employees.

were

-Fresno

branch

recently

and. Bakers-

field', California.

,

mar¬

■

again dis¬

a

general trend/

economy

now

Speculative, inter¬

apparently based

on

in¬

dividual prospects and not on ex¬
pectations of any change in the
price level of gold. Labrador Min¬
ing & Exploration also displayed
isolated strength following,
reports
of imminent, favorable

develop¬

ments.

long time,

of

years

and; the

and

development

expanding
promising- futtire

<■

of

Dallas

southwest

made

Dallas

logical

a

Dallas

a

Texas for

on

time."

and

the

-

location

our

at

move

in

this

•

The

office

has been

;'

will

by Mr. Harold

D.

New England,
re¬

be

manager

exceeded

as

a

state, income expansion
period

fell

short

of

national
;

Total

income' payments in
Southern and Western

gions

rose

while

in

New

England
states

and
the

are

acceleration

an.

of

trends

at least double the 1940 level.
number of agricultural states

largest
in

creases

percentage
income

total

in

In

In

a

1946

in

the

important agricultural
sharp expansion of farm
income during 1946 was
primarily
responsible for the large advances
a

in total income payments.

Florida/ Louisiana, and Mis¬

sissippi, where income payments
in 1946* failed to

states

where

rise, and in most

the

less

rise

than

was

the

average, the lag is attributable to
the curtailment of some

important
shipbuild¬

war

activity—such

ing,

aircraft. production

concentration

of

.

as

a

major

the

military ..and

establishments

Both

or

—

that

source of

nationally and

on

had

income.
a

state

basis the rise in income
payments
last year over the
preceding year
was

due

economy
sition

to
as

from

sharp changes: in the
a

result of the tran¬

war

to

peace/ Large

three-fourths

It

>

/

"5

t •

Van Alstyne Noel
Corp.

Aug.

orr

21 announced the
offering of-100,000 shares of common
stock of

Fedders
per

NY-1-1045

Quigan- Corp. at $11.50
share.. The issue does not rep¬

resent

of

the

new

financing

behalf

on

company. - The company,
to
a*
business
estab¬

successor

lished
known

Taylor, deale
-

-

■&company

64 Wall

;
.

range

in

1896,. is

WHitehall 3-1874

a

nationally

manufacturer. of a .wide
of heat transfer equipment

with about

15%

of all

ators and 30% of

car

installed

Street, New York 5

Northwest

By

states,

capita

;per

varied from $555 in

$1,703 in Nevada.
in

order

from

in

Fedders.

Net profit

new

auto

Nevada

$1,633; District of
Columbia, ,$1/569; California; $1,-

531;

New

Jersey, $1,494;: Dela¬
$1,493; Illinois, $1,486, and
Connecticut, $1,465.
ware,

Most strikingly revealed in the
1946 per capita figures is the con¬
centration
of
low-income
states
in

the

South.

Southern

states

16

in

states

lowest

In

1946,

Provincial

Municipal
Corporate




all

were

the

among
nation with

averages.

Although

,

15
the
the

the

difference in" the average income
levels between the South and the
rest

of

duced
come

the

country has been

since

1929,

capita in¬

Southern

of the

year was

re¬

per

States last

nearly two-fifths below

the average for all states outside

the South.

/

;

/ *

"

NYSE

/

Trading; and Savings Deposits for 1910-46

ard

in

made

1946

by
was

$902,511.

RIVERSIDE, PA. —Edward
Johnson is engaging in
ties- business

Avenue D.

The

K.

Financial

Chronicle)

Hexter. has become

dated with

Carter

,

».

a

Corbrey &

Co., 650 South Spring Street.
Hexter

was

formerly

Mr.

President

and Treasurer of
Investment Fund

Distributors.

-

;

Stock

a

from offices

In the past he

securi¬
at

403

was

a

Trading Corp.

Stock

Trading Corporation
formed with offices at
Avenue, New

engage

F.

partner in Ray, Johnson & Co. of

Sunbury.

to

ANGELES, CALIF.—Rich¬

cores

cars

Edward Johnson Opens

SECURITIES

were

New York with

radi¬

heater

(Special

LOS

Fifth

Government

income

Mississippi to
Ranking next

Richard K. Hexter With
Garter H. Corbrey & Go.

been

CANADIAN

of

capita income

per

and South, the
income
of
individuals
was two-and-a-half to three
times
as large as the 1940
average., /

con¬

national

In

average

.

these

In

highs.

in¬

were-registered by' Iowa with a
27%. rise, Montana, ,20%; Minne¬
sota, 18%; Wyoming,. 17%; North

states

time

Stock Offered at

INCORPORATED

RECTOR 2-7231

in

to

resident of Dallas since

a

Co-manager will be Mr. W.
Taylor, now manager of E. F;
Hutton & Company's Santa
Mom.

N. Y.

the

gain

was
only 97%.
These regional
income shifts over the war
period

ica, California branch.

NEW YORK 5,

re¬

159% from 1940 to 1946

Eastern

Middle

c

the

was

The

McEwen, who

A.

TWO WALL STREET

this

over

the

~

average.

1937.

CANADIAN STOCKS

"

whole.

hand/in every Mid¬
apd New England

Eastern

recently- four

Northwest

country

states, the

become

junior golds

and

dle

new

Income

the

and
income

of

the

have had their
eyes

the

data

its

for

Wyoming,

that

On the other

ex¬

provided the largest in¬
expansion; the gains in 1946

naval

with

the

National

Central,

East

siderably

Allan H.

playing the most resistance to the

the

to

that

in

al{

Western states

of "smaller proportions.

planning. The company's partners

earlier display of strength

not

fort had

after

est is

•

1

12%'higher than in evidence from 1929 to 1940:
[
1945. In the Far
West, Southeast
In almost all states
per capita
and Southwest, where the war ef¬
income last year exceeded war¬

office: "Decision to
open
offiee is the fruition of

an

De¬

has

Carolina, 16%, and Missouri; 15%
in Texas

Paso

office in

3,000

space and

resent

plans

El

an

new

have

project of the St. Lawrence
Seaway could constitute a valua¬
current

main¬

,

The firm first opened
in

Series

Income"

in;

10

come

be

it

gions, individual incomes in 1946
were

were

tained with the firm's New York

offices.

to sustain

to

Income

Middle

Magnolia

will

that

dis¬

possible: to. adjust

the

the

on

the

connections

position to supplement once
more the efforts of this
country

contribution

noted:

been

In

TEX.—E.

insur¬

Supplement, to the "Survey of
Current Business" of
July, 1947.)

&

U. S. dollars, Canada would be in

Europe, and thus

partment

issued-

in
DALLAS,

social

as

tering-out
payments,
to
charged
servicemen.
(The

"Personal

E. F. Hutton Go. to

items;

benefits,
relief,
veterans'
and; benefits, and mus-

,

of

the economies of Brit¬

period

ance

of

pensions

yet

an important
Building in which will be estab¬
step towards the solution of the
lished a modern, air-conditioned
greater world problem which has
brokerage office. Private leased
arisen as a result of the

universal
imbalance of foreign trade: As a

rate

growth

other

State

expanded program of
exploitation of Canada's enormous
natural resources

Street.

formerly with the trad¬

was

greatly

A

Salle

the

construction, of the St. Lawrence

Seaway would have
stimulating effect.

Roy B. Suitdell

cept
Montana,
Oklahoma, the

such

and

energy,

expansion, of population
virgin
areas/ .of
the

income-

sections with prices again on the
downside.
Stocks
also declined

A. E. AMES & CO.

and

'

1940

salaries, the
-unincorporated
including farms, div¬
idends;^ interest, net rents,, and

Crary, western partner
ket continued dull and inactive in of the firm;
stated, in announcing
both
the
external and internal the opening of the, new Dallas

■

From

Southern and

During the week the bond

CORPORATION

Federal civilian payrolls.

businesses

former impediment

trade.

MUNICIPAL

goods manufacturing in¬

net-

for

PROVINCIAL

$155 billion

payrolls of

durable

dustries, military payments,

tackling, the immigration problem

transportation.

the

GOVERNMENT

pre¬

is concerned the Dominion is ndw

As far as the

of

nature

CANADIAN BONDS

the

to 1'946 the
largest
relative income gains
occurred iii
the
South
and
West.
In

difficulties

ain and Western

has

approximately
than

Income payments to individuals
include wages and

the

square-mile

but this alone has

or

higher

in

ble

geological

been scratched

$169 billion

one-tenth

path

trial

thus

Canada

come

,

,

main

Officers

in

a

are

ident and

York

securities

Max L.

Treasurer,

Mr. Lipsky

associated
& Co. of

business

and Herbert

was

and Becre

previously

with Joseph L.

Chicago.

551

City, to

Lipsky, Pres¬

Silton, Vibe-President
tary.

has

Dixon
1744

'

'

Number 4624

166

Volume

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

(829)

21

of the constructive type,

lead

ITO Charter Drafted
So-CalM Bill of Rights for International Trade, completed at
Geneva, Switzerland* by representatives of 17 nations, will be sub¬
mitted to a World Conference at Havana in November for approval.
Winding up a conference on Aug. 20, which began in October of

"

the representatives of 17 nations, which met in
Switzerland, to draw up a charter
last year,

International Trade Organ¬
ization, sponsored by the United
States, Great Britain and other na¬
tions; have completed a tentative
draft'comprising 13; chapters to be
submitted to a World Conference
at Havana,, Cubar scheduled
to
convene on Nov.- 21,
1947. The
draft is the result of plans, con¬
ference^
and negotiations that
have been taking place in New
York, London- and Geneva for a
period extending over more than
one year. Notably absent from the
negotiations was Russia, which

for the

delegates to Geneva and
which has given no
indication
that it will be represented at the
Havana Conference next Novemsent no

'

ber.

i\

•

4000 word document, con¬

The

operation
for

of

(Continued from page 2)
two
years,
while Latin
American
balances, reduced to
probably not more than $2 billion
about

Geneva

would

a

stabilizing farm prices.

country in balance-of-payments

quantitative
fined.

In

decision

extreme

are

de¬

analysis

last

to

measures,
their

cases

in

use

a

tional

dis¬

(which already had
$250 million) has
recently granted the Netherlands
$195 million on generally similar

Fund.

use

of subsidies in interna¬

trade

is

authorized,,

pro¬

countries, including Britain,, can
help themselves and each other,

vided such subsidies do not result

and how much

in the

sale for export at a price
lower than the
domestic
price.
This is the only section on which

need from

the United States

would

was

defeated.

If

by Dr. H. C. Coombs of Australia
as merely "a skeleton."
He added
"it remains for the governments

tural

to
in

Practices";
Commodity

Business

"Restrictive

"Inter-Governmental

Agreements"; -"Settlement of In¬
ternational Commercial Disputes,"
well

as

as

other special or general

provisions, relating to interna¬
tional commercial relations^ There
is

a

clause

which provides for a

compulsory review of the charter
every

trading enterprises under
the proposed rules are committed

put flesh upon its

of the proposed
charter
cover
subjects such as
"FU11 Employment and Economic
Activity";,
"Economic
Develop¬
ment";
"Commercial
Policy";

10 years.

-

export subsidies.

State

breath into its nostrils."

chapters

follow

a

posed on the use of-quantitative
restrictions
on
imports.
Excep¬
tions during the post-war

transi¬
tion period are allowed, as well as
exceptions - necessitated by the

principles

buying and selling and to avoid
A

new

clause

tunity

to

chases

and

the

compete for
sales

of

state

us

has

been

recommending

ed

they feel they will

to proceed with re¬

of the

that the assistance which the gov¬

might render inadvisable

Congres¬

ernment

any

sional-action under the Marshall

rectly or

Plan is doubtless still

will not take the form of

away.

be

important.

some

Premier Attlee's

months

new

What is far

di¬
through various agencies,
proposes

to

render,

a

trans¬

fer of American wealth to foreign

pro¬

aims

the part

on

to

'

:'w!

faster
deliveries,"
continues Mr. Patch, "which prob¬
ably also mean r more consistent
deliveries of some of the critical

"Generally

items, apparently

hold

sev¬

dollars, and

States

will, provided they

UNITED

STATES

EXPORTS

AND

IMPORTS

or

Europe

1946

1913

1929

(Average)

America-

Canada

—

4,098
2,222
1,460

1,243

2,341

1,499

545

973

339

590

835

206

1,475

462

961

409

310

Latin

5,730
4,290
2,270
1,970

Far East.

488

128

131

29

Africa

prevent

Total

15,070

2,968

9,743

2,484

5,241

U. S. Imports from
—

Latin America
Far East

Canada
Africa

ing customers, fixing production
quotas and suppressing technol¬

increases again when we see
in just one month

they have; gone

up for % of those
the survey."

Regarding
Patch

stated

that

responding to

that

Mr.

trends,

price

"100%

members report they

more

Total

796

709

1,825
1,090

573

788

918

352
66

109

24

this figure of 64%, is the highest
since last March when the pre¬
vious price spiral was

i

at its peak.

"People formerly buying for
periods,
i. e.,
hand to

shorter

mouth to 60 days; are coming into
the 90-day bracket. This perhaps
means

that

confidence

has

turned and that the present
structure will not topple at

for the next few months.




re¬

price
least

The

method.

should

nations

shipment

of

take

into

account

manner as

not to

2,364

4,047
2,550

2,080
2,171

524

gration

2,393

814

1,475

552

ban

6,600
3,640

2,970

„—

—.

784

53

240)

194

795

1,100

Africa

cident upon

20,780

Total

9,640

5,456

14,679

up

Far East—,
•

Canada

4,277

Total

products continue to
move at higher prices.
However,
let us not forget, as buyers, that
too
much price inflation must
eventually place many products
out of reach and bring on the
as

sharp downward reaction all
iness is anxious to avoid."

bus¬

f28

900
970
520

——

370

——

and

York

New

nounce

office

the

Stock

Members

Exchange,

an¬

opening of a branch

in Wilkes-Barre under the

direction
The

Company,

new

of

Charles

D.

Wesley.

office will be located in

the Second National Bank Build¬

ing.

447

266

62

22

•5

842

480

4,807

691

dollars

of

sources

were

most
—

deprived

important

remittances

by emigrants to their countries of
origin. It is of interest that prior
to the war; remittances to Italy
by> Italian residents in the United
States

or

Americans of Italian de¬

scent, totaled between $50 and $60
million—an amount

equivalent to
$1.0 or $1.2 billion;
The
existing statutes have greatly im¬
paired this source of dollar ex¬
change to which debtors might
on

have

recourse.
•>

Conclusion

America's

No More World Bank Bonds This Year
President, tells
Fears
England.

John J. McCloy, its

news

billion dollars for lending*

no

make loan to
At

President of

one

indication that such loan is

any

more

d6sir6(i'f'

y

ities this year

explained the British are "a
sturdy people with good business
sense
and their internal budget

"unless

situation is good." "History $hows

issu¬

through
ance

He

of secur¬

un¬

it

de¬

occur."

is

unwise

write

to

off Britain

T. J.

about

$500,000,000 in
dollars

for

in
on

sirable1 for humanitarian" reasons.

However, in order to achieve con¬

results, steps should be taken

to eliminate or revise

such exist¬

ing legislation
(tariffs, for in¬
stance) as may tend to impair or

destroy the ability of the debtor
to meet his engagements, and topass

aid

legislation required to

new

international

reconstruction.

With intelligence and good will, the

to aid world reconstruc¬

program

tion should achieve success. While
Russian

cooperation would be of

without

Russia, as they have often had to

Kilkenny Is

do in the

past.

Now With R. Showers

States
alone

available

aid

sound*

to

the nations have to go on

now

United

is

great help, success is attainable if

quickly," he stated.

T h e

has

program

construction

purely economic grounds and de¬

crete

reconstruction type loan to Britain
but added Britain has not given

intend to bor-

m

conference Bank has half

British collapse and would

conference in Washington on Aug. 26,

ment, said the
bank does not
row

world

John J. McCloy,
the International Bank for Reconstruction and Develop¬

news

a

Bank

Rice

110

181

9,360

velopments

WILKES-BARRE, PA. —Daniel

|198

557

v

fl06
|108

their

of

one

balance.

foreseen

New Dan'l Rice Branch

634

1,008
fl34
t501

Department of Commerce.
^Estimated on basis of fig¬
available for the first half of 1947.
fDenotes unfavorable

ures

periods, the recent fear of reces¬
sion seems to have been pushed in

long

534

397

Source:

again and suffi¬

Our July report
indicates business will be good at
least for the near term, probably

3,302<

laws and the continued
immigration, a large

upon

number of debtors

5%

confidence

background.

—

Africa

returned
to
somewhat lengthen future buying

the

—

4,990
1,980

Europe
Latin America

concludes that "with

Mr. Patch

Through the enactment of immi¬

of

U. S. Favorable Balance with

meeting his interna¬

tional commitments.

3,674

4,894

Canada

-jjp j f

1,952
1,118
1,378

0.470

1948."

F.

world's

1,793 policies in such

4,399

2,488

4,936

Far East

garding a possible recession this
due to consumer resistance at
higher price levels, the majority
opinion is voiced by one member
who says;
'No, not until later.
The fools want to spend
their
money.'
Several members said
they, thought the downturn would
come next year with special em¬
phasis laid on the first quarter of

and

owns or

major portion of the
gold, it is obvious that

goods is rendered difficult through
445 prohibitive levies on merchandise
316 produced or manufactured advan¬
143 tageously by the debtor. Creditor

514

307

Latin America

paid higher

ported in the month of June,

Since the United States

865

1,333
1,107
1,336

5,710

Europe

year

prices last month than those re¬

by

(a) the shipment of gold
(b) the shipment of goods
(c) the rendering of services.

impede the debtor's problems in¬

as

highest ever at¬
tained. Prices are certainly on the
the

met

be

can

this factor and revise their tariff

ogy.

at

near

debts

the debtor through

this

740
2,310
1,370
1,000
290

Europe

practices in¬
price fixing, exclusion of
enterprises from markets, allocat¬

cient

or

generally agreed that in¬

ternational

debtors cannot avail themselves of

of private

condemned

keeping in¬ prices going

are

the peoples of

new

It is

1936-38

*1947

a

duced to a minimum.

(By selected periods and regions—in million dollars)
U. S. Exports to

of

the world
cataclysm is imminent
inevitable, is eliminated or re¬

that

clude

evenly balanced at the
current levels. .Also, better deliv¬
eries are, no doubt; made possible
by consistently high employment
and production neither of which
showed any tendency to decline
from levels which we know to be

ventories

issuance, on a large scale, of
international loans until the exist¬

United

eral hundred million

by

loans

controls the

Summarizing a report of the Business Survey Committee of the
Purchasing Agents Association of Chicago, R.. C. Patch, its Chair¬
man, states that inquiry among<5>"As to the special question re¬
members show that im July 40%

-

the

ing friction is removed, and the

us

"Foreign"

•

;

it
delay

be wise to

fear which appears to have taken

Patelr, Chairman of a business survey by Chicago Purchasing
Agents Association, reports faster deliveries but with upward trend
of prices..'
\
..;

ford them are,"'

re¬

consequence,

"foreign" credits extended by the

R. C.

higher prices.* This,. Mr. Patch
concludes, "should mean that con¬
sumers are getting more and more
of the things they are waiting for
—at least those that still can af¬

In

perhaps

futile

Britain's imports from

Getting More Goods

reported lower backlog of orders,
57%, faster deliveries and 64%

construction.

crises

or

effect world

attempt to

would

disquieting is

or

monopoly.

The

more

international

the

countries.

pur¬

business that restrict trade or fos¬
a

fear

gram indicates an intention to cut

outside the Soviet Union.

charter

will

never

the

dropped, since no such case exists
The

and

Test

never had
lead to im¬

se

world could bankrupt the
nation, it should be remembered

prises has been added to the Lon¬
don draft.
The article governing
the
conduct
of
complete
state
monopolies
of
trade
has
been

practices

the

Loans

Sound

Foreign loans per

in the realm of eco¬ poverishment of lenders, unless
;he proceeds are squandered or
nomics and politics are admittedly
hazardous.
Too many factors employed
non-productively.
On
which cannot possibly be com¬
he contrary, refusal to assist in
puted
mathematically, must be ;he rebuilding of other nations or
studied. Opinions expressed, plans to participate in the economic and
evolved or remedies proposed may financial activities of the world,
be basically sound at one time, but may and will cause difficulties,
may be wholly unsound at a later A comparison between conditions
date, because of the speed with which obtained in the '20s, when
we were lenders, and those which
which events are moving.
were experienced in the '30s, when
Although the former President
in general we were not, should
warns that extensive financial aid
by the United States to the rest prove illuminating.

Total U.S.Trade with

Sees Consumers

a

re¬

enter¬

economic status.

own

variety of remedies against po¬
litical and economic collapse which
is freely and generously predicted.

covery. Increases in their produc¬
tion enabling greater exports to us

quiring that state enterprises offer
private enterprise a fair oppor¬

ter

general ban im¬

commercial

discrimination.

Among the important items in
the document is

France

how much the Western European

The

tional

finally adopted it would require a
change in the system of agricul¬

The

Bank

loaned

sorrowing country to improve its

Former President Herbert Hoo¬
ver

and

business activity

Prophecies

terms.
The
Marshall
Plan,
of
criminatory manner, will be made
course, is being shaped so that it
by the
International
Monetary is hoped that it will be determined

the complete tentative
draft jot a charter, is characterized

bones and

Monetary

In this connection, it is inter¬
esting to note that the Interna¬

country's right to
including in

a

International

greater;

greater employment in the United
States, at the same time aiding the

Proposed Remedies Vary

one

Steps Being Taken

the

the

as

such

use

restrictions

within,

Fund, the Export-Import Bank or
private capital come to the rescue?

difficulties may be
exempt from
the general ban on the use of

stituting

of the world to

the

programs

The circumstances under which

exhausted

are

to

Britain.

Will the International Bank

year.
or

domestic

be

also to try to ease certain onerous
conditions
under
our
loan
to

With Calvin Bullock

Special to The Financial Chronicle

John

J. McCloy

and
this sum is "adequate for imme¬ with Robert Showers, 10 South La
diate purposes."
,
Salle Street
Mr. Kilkenny was
lending,

Special

J.
Kilkenny has become associated
ILL. —Thomas

CHICAGO,

to The Financial Chronicle

DENVER,

COLO. —Clyde

Smith has been added to the

E.

staff

-

McCloy told reporters that the
bank would consider making a

formerly

for

many

Rogers & Tracy.

years

with

of

Calvin

Bullock, Colorado Na¬

tional Bank Building.

22

THE

(830)

COMMERCIAL

FINANCIAL

&

CHRONICLE

Thursday, August 28,
l947

What Is the Future of Air

Our

Reporter

Governments

on

Transportation?

'

(Continued from first page)
make no claim as an expert

I

analyst of this rapidly changing
and developing industry.
It has

By JOHN T. CHIPPENDALE, JR.

nancial interests and

handful of

a

philanthropists and industrialists
participated in the financing of
he industry in the
early stages of
its
development.
Most airlines,

available,
which

in

the

sufficient number,

air

transportation in
government securities markets are still adjusting themselves been most appropriately said by
dustry could acquire for
the Mr
to the September financing, although the rate of the uptrend has sub¬ someone in the industry that the up to the beginning of World War
pose of
supplementing their fleet®
sided somewhat after the initial rush to get into securities before only monotonous thing about the
I, had found it consistently nec¬ to meet the
vastly expanded re
prices went higher. .
There is nevertheless a good demand around air transportation business is the essary to plow back every cent quirements of an
air-minded nniT
for all issues despite the fact that a part of the funds that were
continuous changes taking place of earnings into the
development lie.
These were the
DC-3 the
in it.
and acquisition of
waiting the' terms of the refunding have now been put to work.
.
.
new, improved DC-4 and the
The taxable bank-eligibles were again led by the longest 21/2s and
Constellation,'none
and more economical aircraft of a of
Any new industry, I suppose,
which were
economical at pre*
2V4S, along with the intermediate-term 2s.
The longest partially but
ype having higher payload ca¬
particularly aviation with all
vailing cost levels, unless
exempts are still the pace-makers in this group with the 23/4S due the
they
glamour of its early stages, pacity. Then came our entry into could be operated at
19H0/65 the best acting issue.
Switching of holdings in the eligexceptionally
has attracted ambitious youths, as the war and every certificated high load factors.
The market
ibles is by far the most important factor in these securities.
.
for
well as many who are not too airline,
including Colonial, was the military version of
these air¬
The ineligible issues have had a better tone with a tend¬
ambitious and not very young. required to turn over a very sub¬ planes was
controlled by the
War
ency to advance somewhat since the authorities have not been
Too often I think, for the good of stantial portion of its equipment
Surplus
Administration of the
doing as much selling as in the past.
The longest
have
aviation, these newcomers—who to our military services. Colonial Government and were
available at
shown the way on the upside followed closely by the shorter
are most certainly welcomed by contributed the highest percentage
what seemed
The

.

.

.

.

.

.

.

.

.

.

.

r

.

,

maturities in the group.

.

.

.

.

Those that believe the outstanding

restricted bonds will be helped by the new issue have been large

buyers of the longest

...

there
.

.

is appearing now a feeling of caution among some investors.
There is nothing too tangible yet to tie this attitude to, and the

.

numbers

following it are not of sizable proportions
Also there is
denying that some very important sizable portfolio rearrange¬
ments still have to be made.
This should have a favorable effect
.

.

.

no

.

upon

ities.

.

.

prices and activity in the longer-term higher yielding

guard—have

overnight,
of

dustry

practically,

mastered

and

the

experi¬
in the in¬

20 years

some

unwisely

undertaken

consideration

to the general level of government
It is being pointed out that the market has had

of

all

airlines in the United States

6 of its DC-3's out of a total

8

and

at

time when there

a

of

was

transportation service.

past,

what its present ailments are, and
p r e c i se 1 y
what the infallible
is.

cure

greatest public demand ever
before
experienced for
its air

True, all airlines

ments
and

the

of
and

analytical

comments

state¬

prepared

circulated by financial insti¬

compen¬

To further

program, most of them took
diversified war activities for

on

the

Government such

aircraft

as

modification, pilot and mechanics
training programs and military
transportation services.
These activities were akin to the

cargo

fairly tutions, investment counsel organ¬ business of air transportation but
substantial rise in the past fortnight, sufficient in some cases to take izations, brokerage houses, finan¬
they were nevertheless, consider¬
prices of certain of the long-term obligations to new highs for the cial publishers, etc., concerning
ably different in technique. Most
year.
At the moment there are ample reasons for the upward the air transportation industry,
of the airlines found it
necessary
trend in prices of Treasury obligations but at the same time there are just so much bunk. Either
they to increase
substantially the num¬
do not take the pains to find out
are many uncertainties that cannot be resolved
immediately.
The
ber of their employees and to take
Treasury, since last April, has sold about $1,400,000,000 of marketable the real story from the very in¬
on personnel with a
higher degree
securities in order to keep prices within limits that were considered side or they are
incapable of un¬ of
technical skill at a much higher
desirable to the money markets.
The last two weeks have wiped derstanding
the
various
issues
wage scale. Also, their expanded
out practically all that was accomplished during this
period in which confront the industry or to
prices of the eligible issues.
'
consider the good points inherent activities necessitated greater de¬
.

.

.

a

...

.

.

.

.

.

...

centralization

within it. Very often this type

analysis does

however,

to

no

feeling around that the authorities have lost control

the market action of the eligible issues.

over

devices that

many

these securities.

can

.

There

.

still

are

quotations of

on

heavy commitments especially when it is noted that not

ago certain of these bonds made

INTEREST RATES

new

lows for the year.

,,

.

#

STUDIED

.

rising, .
While it is believed this will be a slow gradual
process, an
element of uncertainty has nevertheless been
injected into the money
markets because the money managers could be more
aggressive in
their policies and
bring about changes faster than might be expected
if there be! need for such action.
,*•
/
kf
.

.

iSven

place
issue.

now

Oct.

on

1

},

...

there is plenty of gtiessing as to what
might take
1, whether there be a nine-months %s or a 1%

The extent of the rise in short-term rates as well as the
rapidity with which it takes place are coming in for more dis¬
cussion because these will have an important
influence upon the
level of government
security prices.
While
..,

stability in the

...

rttt)

market for Treasury issues is essential to the government as well
as investors,
rising quotations for bank issues would be a definite
threat to such a condition. ,
,
,

There

seems

to be little doubt that further
spurts on the up side

by the bank issues will

meet

opposition from the

powers

that be.,,.

sound

new

,

.

.

vigorous
they feel that the forthcoming
management policy that will
attempt to

action by the
monetary authorities and
issue is the start of a debt
the uptrend in

prices and consumers' loans.
This could be
brought about by curtailing bank credit.
The previous action of
the powers that be was to
retire bills and certificates in
order to
tighten the credit base.
.

.

.

...

approach

to the problems
they expound.- .We
forget that there are

upon

which

must

not

those

groups

not

so

whose

motives

pure and who

expression

for

the

seek

are

public

avowed

pur¬

of

pose

retarding Or obstructing
the development of air
transpor¬
tation for purely selfish
motives.
Despite all of this, aviation and
air transportation have
threshold

of

tainty and they are here to stay
to develop under
conditions

and

investors would

provide funds that could be used to retire
bank-held issues and
in that way cut down the
loaning ability of the deposit institu¬
tions.
...

American

enterprise.

advice, is that the public

my

choose

counsel

spects

in

now

of

ment

wise

>

air

and

and

unbiased

forming its judg¬

transportation

that

it

will

pro¬

become

neither

fanatically optimistic
adversely disillusioned by

nor

un¬

qualified and insincere informers
It

is my belief that the market

has

too

long

oversold

While it is

being pointed out by some money market
specialists
that the
outstanding restricted bonds are more attractive than the
proposed non-marketable issues,
there is
will be sizable for the
new

reports,

will

be

very

obligation.

heavy

.

.

no
.

doubt that the demand

Trust

buyers, since

funds, according to
they like this type of

Commercial banks with savings
deposits, particularly smaller
institutions, will also be important
buyers, despite the fact that
mortgages are being taken in
larger amounts by these banks.
Insurance companies and
savings banks will also buy it.
..

.

.

1

.The

absorption of

demand by this
the

authorities

new
in

a

fair

amount

offering could
controlling prices




tain

airline

now

Obviously there are cer¬
airlines whose situations are
very critical and they
may

not survive the

closing months of
period with which

the

transition

the

industry has been faced

the close of the

STRONG DEMAND SEEN

of

the

.

non-bank institutional

war.

certificated airlines,

since

Most of the

however, have

already passed the doubtful
stages
of survival, if
they ever had one
These

have

many

ways

are

better

future

profited in a great
from adversity anc
prepared

than

ever

to

face

On

the

lines

whole, however, the air¬

were

quately

reasonably

and

compensated

military contracts

ade¬

under

the

their

and

rev¬

enues

per-unit-of-equipment-remaining-in - commercial airline-

services

reached

unbeliable

an

all-time peak.

Nevertheless, at the
time the costs, labor, parts

same

and

material

while

their

mounted

rapidly

tax

bills reached an
all-time high. The plain and un¬
adulterated truth is that the in¬

dustry,

the

at

think,

enced

for

the

undertook,

war-time

much

tasks

less

it

the

for

transition back to normal airlinb
operations
which
followed
the
and

war

the

cancellation

of

war

contracts.

country

developed,
before

up

was

until

a

few

World War II,
largely by
were trained in World

pilots who
War I.

Only

a.

few far-sighted fi¬

some

economically
suited ' for
shorthaul operations or for the
traffic
requirements of some
routes

which

these .air

carriers

had in operation. The
really dam¬

aging factor, however, came about
by reason of the excessively
high
modification costs of these
types
of aircraft for commercial
opera¬
The trend of the times
was

tions.

toward higher

levels

wage

prices

and

and

most

higher
airlines

found that when they
finally got
what appeared to be a
cheap mili¬

tary

airplane, modified for

mercial
on

com¬

operations, it stood them

their books at

price equal to

a

or
greater than the amount for
which the aircraft could have been

acquired new, and they still had
an obsolete
plane on hand. It has
been

only during recent months
that any modern,
economical, com¬

mercial aircraft has become avail¬
able for replacement of this obso¬

lete equipment.
that
the

I think you will

find

dismal-appearing

earnings statements of most air¬
lines during the past eight months
are

traceable, in part, to the book
incurred by the various
through the sale of these
airplanes in a thoroughly sat¬
losses

airlines

urated

market.

modified
were

DC-3

carried

companies

on

For
example,
airplanes which

the books of some

from

at

$100,000

to

$150,000 each, are now going beg¬
ging at $20,000 and $35,000 when
for sale. Much of this
type

of loss has

by

most

already been absorbed

airlines

and they now
face the future of expansion with
new

and

more

ment which is

economical equip¬
becoming available

before

in the next three
years.
There is another factor—greatly

travagances

overpublicized—which has been
given as the principal ill of the
airlines during the past two years

lush
had

period

always

tories
ment

excessive

as

both

of

probably

parts

and

of

an

inven¬

equip¬

responsible for
Jhe, .financial .difficulties
with
which two or three of our
airlines
are

faced today. Never before had
the airlines been
concerned with

and

—Accidents!
dents

cuse

The

effect

of

acci¬

is

usually seized upon by
seeking a ready-made ex¬

those

for diminishing airline rev¬

are

enue.

any problem of

with which the air

transportation

industry

and

high earning tax

brackets, etc., and when
contracts

were

the

cancelled,

war

new

Obviously

weather

are

ever

is

now,

accidents

and

present factors

will

for

years, be plagued. All transporta¬
tion mediums will

problems faced a new
inevitably suf¬
industry
with, new experiences and ob¬ fer accidents and their resultant
effects.
The
viously some of them reacted too
thing
which
has
slowly, perhaps, to the realities of accentuated the effect of accidents
the situation.

stances it
would
air

was

be

Under the circum¬
inevitable that there

some

casualties

transportation business

aftermath of

there

were

in

the

as

an

activities just as
bound to be in other
war

businesses.
Optimistic Trends Outweigh
Adverse
am
a

sure,

Factors

however, that if

you,

group of analysts, will pause

now

years

induced

had to scramble—so to
speak—to
meet next week's
payroll, it is not

I

industry

Undoubtedly

fact

daily and, by
large, the airlines will have,
replaced all obsolete models with¬

the

industry that

as

concived and

this

in larger numbers

During

before.

The air transportation
of this

values.

airlines to overequip with
certain
types of planes which were
not

time, simply was
sufficiently experi¬ offered

not geared nor

the

Airline Development

,

do much to ease the
problem of
of the restricted issues.

different

seldom,
history of astounding that there were some
My hope, extravagant indulgences. Such ex¬

stocks.

Although the gold and currency factors make
credit limiting
difficult, the sale of issues to non-bank

the

types of military activities at con¬
siderably greater overhead costs.

uncer¬

which offer opportuntiies
if ever, equaled in the

...

more

for

long since

the

crossed

will

issue of non-marketable bonds is another
factor that is
being viewed with importance by money market followers.
Some
believe that the inflation forces must be
offset by more

curb

in various pub¬
gratuitous offerings of

appear
as

heart, too frequently defeat their
purpose by an inexpert and un¬

and

COMBATING INFLATION
The

per¬

not-too-well-informed public of¬
long ficials and self-styled experts
who,
even
though they have the best
interests of air transportation at

so

Another element that is being considered is the trend of interest
rates.
Short-term rates have been
unpegged and the level is
.

larly

not prone to make

are

great deal of harm

a

Many articles and statements
lications

investors

some

of

industry and it is particu¬
true of air transportation.

an

sistently

...

Accordingly, at these levels
too

.

be used to put a ceiling

I

.

While it is believed that the powers that be are not too heavy
in bank securities that can be sold in the open market, there
is,

to be moderate
and

economical

marginal

were

sated for this aircraft.

the

-

Many

than
security

more

the

made the business tick in the

CAUTIOUS

however, giving

total-equipment-owned

the

Erroneous Analytical Statements

Some of the portfolio managers are,

of

to
inform the public, With- un¬
erring assuredness, exactly what

secur¬

...

passing
prices.

old

ence

Despite the strength in the government securities markets, which
brought about mainly by the low coupon short-term refunding,

was

the

to take stock of the

you

will agree with

me

situation,
that the

optimistic trends in the air trans¬
portation industry today far out¬
number and outweigh the adverse
factors.
Let me review for you

briefly the basis

for my

judgment.

in

the air transportation industry
recently has not been so much the

accidents themselves but the over¬

emphasized
lowed.

publicity

What

which

parallel

^can

fol¬
you

find in ground transportation that
can
compare with the crash of a

single plane carrying commercial
passengers? For example, a recent
airplane crash at LaGuardia Field
followed immediately with
Congressional investigations
and
CAB hearings
which held
the headlines of our nation's pub¬
lications for months and all the
was

two

gruesome

details, including front
were displayed to
the public iil the worst
possible
light.
By contrast, consider 3
page

pictures,

I Volume 166 Number 4624

THE

COMMERCIAL

made up in commercial travel as
there is the slightest break

locomotive
■which causes the death of a numIber of persons. Generally speaklin£ it would be unusual if you
■were able to find an account of
■ that accident unless you examined
■ carefully the fine print obituary

■boiler explosion • on a

the

high priced trend of

modities.

There

tion

dream

We

have reached

future

with

the

Should

Inical delepoment of ground-aid
■ systems for landing and takeoff
■ procedures designed to minimize
I

airline

possibilities of accidents. The
industry has never been
I financed for the purpose of bearI ing the load of all such developI mental costs and it should not be
I expected to do so. We happen to
I be going through a pre-election
I period of an economy-minded
I Congressional trend, but I am
I sure that there is no dispostiion
lupon the part of Congressional
I and Governmental authorities to
I diminish the aid necessary for the
I air transportation industry to surI vive this critical period. The FedI eral Government must continue to
I support the development of new
I aircraft and expand, rather than
I retard, its investment in airway| aids and navigation-controls in
( the interest of the National De| fense, if for no other reason.
I
Now, let us look further at the
I general situation more objectively
I for a minute and appraise a few
I of the facts on the credit side of
.

I
I

to

18 now,

on

it has built

is

justly proud.

lines in

1938

a

with

United

and

hodge-podge

treal and

States

Govern¬
to

Mon¬

did not extend, on into
When I took over

York.

New

Colonial

Airlines, it had

one em¬

It had no
airplanes, no pilots, no steward¬
esses, no mechanics and no sales

ployee—a bookkeeper.

force.

All

hired

these

of

things

American

from

the

Airlines

that meager line extend¬

distance of

is today

a

335, miles—Colonial

system with a total of

2,989 miles* This growth has been
achieved through sweat from the
brows of the employees of this
We

line.

airlines

only

are

now

ciency of
a

us

yet a little

go
up

lines

If

which

we are

have

granted the

been

recom¬

by the Examiner in the

itself, for the first

time in its history, a well estab¬
lished airline and with the utili¬
zation of
be able

be

is
going

to

get, it is bound to be

company.

Opportunities in Air Line Stocks

improvements

men

be

must

analysts and you

are

good

companies

the

or

who hire you would not have you
in

their

to

be

analyst but I have had
deal

great

a

I do not claim

employ.

an

experience

of

not

only in air transportation but also
in finance. I believe some of the
best

opportunities in the present
stock market are to be found in
airline

that they are

from the maps,
of Colonial are

in

a

I do

I

stocks.

do

not

is

transportation

There may

the

in

art

of

industry

isn't it a

sort,

that

of

of
that

whatever may come,

know
man is going

fly.

Gentlemen,

your

money?,
to

continue

to

You

already

have

incident

losses

to

absorbed book
this necessary

transition from the old to the new
and

preparing to replace
wis¬

now

are

their fleets but with greater

than has been

dom and prudence
exercised

in

the

past.

thought with

May I leave a final

to

pretty good place to put some

regarding Colonial Airlines?

you

In

the past Colonial

has had no

winter flying

routes; no place to
make money
during the winter
months. Now we have Bermuda—
from New York to Bermuda and

Washington to Bermuda. The

from

heaviest

seasonal

travel

Ber¬

to

muda is in the winter time, so we
have

now

and

a

a

place to give service

chance to make money dur¬

flying is here to stay! Whether
or not that is a generally recog¬

ing months which heretofore have
been our heavy losing period. In

nized

past years, we came up to

man

with

fact, I question whether any
acquainted with transporta¬
tion world,, for a jpoment, argue
that

summarize, I would say that

thq airlines of this country, some
months past, weathered the criti¬
cal point of the transition period
and they are now definitely upon

March,

heavy handicap in the shape

of, deficits.

last,

the; Bermuda

With

the
industry needs most is now, mod¬
ern, economical airplanes.
Such
aircraft, I am sure, is to be found
DC-6s, Constellations,
Convair 240's, Martin 202's and in
the
new
Boeing designs. As I
in the new

pointed out, most airlines, and I
can speak authoritatively for Co¬

to

opportunity

an

equalize

income over the year; we

our

have

no

will

great losses to overcome

traffic

heavy domestic

when the

begins again.
hope I have instilled in you,
small measure, the faith

I

upward surge which the public

has been slow to realize. What

lonial, have already

a

route, this will no longer be the
case. We will go into the year 1948
with assurance that we have, at

point.
Summary

To

an

You

of

form

is

that

no

flying but it still will be air
transportation. When you find an

equipment which it will

substantial profit-making

very

a

equipment which we own.

'As you may see

operations by giving

lonial will find

from

maximum of utilization

All of them

Middle Atlantic States Case, Co¬

get

the

our

mended

farther to connect

the

to

the

well-balanced air transporta¬

tion system.

consolidat¬

the lines so that we can

as

by

designed to increase the effi¬

are

ing our positions and praying that
the Civil Aeronautics Board will

of the United
States
had
scheduled
revenue
miles equal to 28.76% of the total
Pullman passenger miles and, in
December of 1946, reached a peak

over

There

ultimate.

about which to dream.

to

us

opinions
action

of

Federal Government.

ing from New York to Montreal—
a

likelihood

new

no

other appli¬

the

invention

new

tre¬

a

enough for

far

voice any hopes or

were

when, and if, needed.
From

thoughts

any

beyond the art of flying. For
the first time in any industry, we

They have not

pending.

progressed

up an un¬

Albany

from

ran

this, in itself, will be

cations

The air mail contract held
the

ment

permit Colonial Airlines to

Colonial has many

extending from New York to Mon¬
treal.

has

and

mendous source of revenue.

Colonial Air¬

was

Washington,

who

take the place of flying; there

surpassed safety record of which
it

ual

and

toughest

aviation

be¬

have

It operates

the

of

known

that dream to¬

fly from New York to Philadel¬
phia to Washington to Bermuda

yet over the last 17 years, going

dustry, the airlines

in

some

and

the

with which I
anal¬

optimism

filled

am

and

that in your

of the future of air trans¬
portation you will be able to de¬
tect and
publicize some of the

yses

pertinent factors which I have en¬
deavored

to direct to

your

atten¬

tion here today.

disposed of

Gentlemen,

I thank you.

believe

going to skyrocket
weeks but,

few days of a few

firmly believe that for specu¬

On Aug. 22, it was announced that the loan of $40 million, under
capital seeking a place to
contemplation for Denmark, was granted. This is the third loan
rest and increase over a period of
much like an inverted U,
granted by the International Bank, France and the Netherlands al¬
miles. That, I submit, indicates a one leg of which rests on New time, there is no surer place than
in air transportation companies, ready having received $250 million and $195 million, respectively.
very commendable penetration of
York, the other on Washington,
The Denmark loan is for the purpose of hastening economic recovery
carefully selected. Airlines can¬
the luxury travel field. With re¬ D. C. In the north, one end of
in that country by enabling the importation of farm and textile
not be judged from the outside.
spect to air express and air cargo, the U is at Ottawa, the other at
machinery,
machine
tools and<$>
They must be studied from with¬
the industry has barely scratched Montreal.
due payments of principal, which
Obviously, we
must
trucks. The loan will earn an in¬
the surface.
Last year, air ex¬ have a connection between Wash¬ in. I say this only because I re¬
terest rate of 3%% with an addi¬ are in dollars.
member
buying American Air¬
press equaled only 3.2%
of the ington and New York. If you will
"The Danish loan is in accord
tional 1% annual commission, and
lines at $1
a share.
Very fine
railway express volume so in that look at the map, you will see that
with the Bank's mandate to foster
will mature over a 25-year period.
brokers told me I was crazy. That
field alone there exists a tre¬ we have also applied for a route
economic recovery of member na¬
In announcing the Denmark loan
stock has since sold up to $200
mendous potential of new busi¬ from New York connecting with
the
Bank issued the
following tions in the interests of world
for each share for which I paid $1.
ness.
In 1946, airline passenger Route 71, either at Binghamton or
trade.
This external financial as¬
statement:
I
remember, also, taking over
revenue amounted to $275,000,000,
"The loan is designed to hasten sistance is justified by the record
Syracuse, on to Rochester and Buf¬
Central Airlines just 24 hours be¬
while
air
express
revenue
economic
recovery
by of the Danish people in their en¬
falo, New York. If this route is fore it was to stop operations. The Danish
amounted to $13,500,000.. The rail¬
granted to us, it will make that
making possible imports of .agri¬ deavor to regain economic: stabil¬
stock cost me nothing. Everybody
way express volume was $416,- portion
cultural
and
textile machinery, ity and in-having attained their
of Route 71, extending
said I was crazy—perhaps I was
000,000 with' a per jshipitfbnt aver¬ from Syracuse to Ottawa, a jpost
machine tools, trucks, steel prod¬ present, rate, of production and ex¬
—but the fact is that; I kept it for
age of only! 56 podnds. Certairily
profitable one. The people in th,is 15 months and it paid several ucts,1 textiles and chemicals. With ports.
no one could ignore the potential
section of the country do their
Its
national budget in balance,
"Previous loans made by the
hundred thousand dollars profit
field in air express which the air¬ business with New York City. They
production increasing and wage Bank were the $250,000,000 loan to
to me for, the labors put forth.
lines have to exploit just as soon are not interested in going into
levels under control, a degree of France, for which an agreement
In 1938, I took over Colonial Air¬
as equipment can be designed for
economic stability appears to have was signed on May 9th of this
Pennsylvania or into Washington.
lines. It was selling for much less
that purpose than can be operated They want to come into New York.
been reached and Denmark is in a
year, and a $195,000,000 loan to
than
$1
a
share and nobody
on an economical basis.
When we originally made applica¬
position where the assistance af¬ The Netherlands, signed Aug. 7th."
wanted the stock. Since that time
forded by the Bank's loan can be¬
Among
the
adverse
factors tion for this route, we asked to be it has sold up to, I believe, some
Turkey Seeks Loan
come quickly effective.
The loan
Which our industry is today facing connected with New York but the
$43 a share. I think this is giving constitutes approximately 8% of
It is reported from Washington
is one, in particular, which is by Civil Aeronautics Board did not
the stockholder a very nice run
the contemplated capital expendi¬ that Turkey, unable to get a larger
no
means
peculiar to the air see fit, at that time, to grant our
for his money. And yet in 1938,
transportation business alone. It application for the leg from Syra¬ and for some time thereafter, no¬ tures to be made by Denmark credit than that already allotted
during 1947-48, the great bulk of from the U. S. Treasury, is pre¬
is well known that the trend of cuse or Binghamton to New York.
body wanted to buy Colonial Air¬ the reconstruction effort depend¬
the last year toward ever-increas- The result is that the route from
paring. a detailed application to
lines. -1 will tell you why I be¬
ing upon private eritbfprise and the International Bank for Recon¬
,ing living costs has had its psycho¬ Syracuse to' Ottawa' has been of
lieve the airlines are a good spec¬
struction and Development for a
logical
effect
upon
a
travel- little use and has been a source ulation and, what is more, for financing. Under the Loan Agree¬
ment, the Bank will be furnished $400 million loan, the funds to be
minded public. Higher rents and of considerable loss to the com¬
money which is not immediately with full rnformatioin concerning
used to modernize and reconstruct
grocery bills leave an indelible pany itself.
needed, I think it can even be all goods to be purchased with the Turkish industry, transportation
The status of the cases men

of

[

world.

some

weather

ledger.
Last year,
which admittedly was*not a good
one for the air transportation in¬
the

the

through

the

■

airline in

t will

:

in

day and I have found no individ¬

connected

be

we

tween New York and

greatest

which

to

have made application.

we

in a local newspaper. optimism.
I There will always be accidents in
■ transportation systems.
In air
Colonial Airlines
■ transportation there will always
Now let us look at Colonial
■ be a never-ending need for techAirlines, the oldest international
■ column

those places

to meet the conditions of

the minds of men., and

the

in

That was

of their obsolete aircraft
the times

enough

by the ultimate in

succeeded

transportation—flying!

service

pent-up demand for
everything including air

the

be

the

Besides,

traffic demand requires additional

a

transportation and I look forward
to

equipment.

com¬

tremendous

almost

of

be

to

seems

CHRONICLE

FINANCIAL

operation through the utiliza¬

soon as
in

&

44%

Pullman

of

the domestic lines

passenger

lative

very

.

*

;

impression on people, generally.
Naturally, Colonial's business has tioned is simply this: The hear¬
been affected by this factor be¬ ings have been held before the
cause of the
high percentage of Examiner; all of the briefs have
been submitted; the Examiner has
r services which it performs to such
resort

lands

areas

in

as

Is¬
York

the Thousand

Northern

New

State, the Canadian Laurentians,
tLake Champlain in Vermont, and
fto Bermuda. It has been a per¬

nave

with

become

the

economy

exorbitant

-

recommendations

among

them is a recommen¬

dation that

Colonial be extended
York to Washington

and

from

New

connected between
either at
patrons Wilkes-Barre-Scranton or Syra¬
minded cuse. The case has been arguec

fectly natural thing, but certainly
only temporary, that our

his

rendered

increase

in

and that we be

and Route 71

New York

before the

Civil Aeronautics

Board

awaiting a deci¬
their vacation periods as well as sion. What this decision will be,
the length of the journey to rec¬ we do not know but we are mosn
reation
areas.
However, I find hopeful because we firmly believe
no indication
that any great num¬ that the CAB is seriously and
ber of our resort travelers are fi- courageously seeking to solve the
nancially unable to continue their problems of the airlines of the
living

.

costs

and

have

shortened

itself and we are

called

an

investment.

Since the dawning
has had a dream.
ference

proceeds

of time, man

It made no dif¬

whether he was

utilization
about

the

the loan and their
will satisfy itself
end-use to which all

of

and

walking purchases are put.

-

"Before the war, Denmark had
the seashore; whether he
was
climbing over the rugged never defaulted on any external
rocks of mountain passes; whether debt. During the German occupa¬

along

^creation habits. They have sim¬
ply slowed

temporarily to
of the situation and
down

„




United States.

that

these

Turkey during

agriculture.

has been trying
to get a credit of $500 million
from the Export-Import Bank, but
the last two years

without success.

John J. O'Brien to

Admit

camel across the tion, with most of its foreign as¬
CHICAGO,
ILL. — Alvin
H.
he was in sets blocked, Denmark continued
full
interest
payments in
the Hayward will be admitted to
a rowboat trying to get from one
limited
partnership in John J.
place to another or in a canoe United States, Switzerland, and
O'Brien & Co., 209 South La Salle
trying to paddle his way up or Sweden, but was compelled to
down primitive streams, he had a
suspend payments of principal. In Street, members of the New York
and Chicago Stock Exchanges, on
dream—just
one
really
great England and certain other creditor
dream.
Later when there were countries, interest as well as sink¬ Sept. 4th.
sailboats, he still had this dream; ing fund payments had to be sus¬
and later still when steam had pended, again as a result of the
Abbott, Proctor & Paine
been harnessed and there were blocking of assets, but payments
Lloyd
Dabot Briggs, general
were resumed in 1945.
There are
railroads he continued to dream.
What
was
that
dream?
That now no arrears of interest due in partner in Abbott, Proctor &
dream, gentlemen, was for the any country and the Danish Gov¬ Paine, 14 Wall Street, New York
ability to fly. That was the acme ernment has advised the Bank City, members of the New York

he

was

desert

riding

a

wastes whether

It is self-apparent
connections are re¬
of transportation.
From the be¬ that, as soon as the public mar¬
take stock
quired in order to make it possi¬
kets permit, Denmark intends to
ble for the management of Co¬ ginning, every mode of- transpor¬
I what we have lost in resort travel,
tation knew that one day it would refund the only remaining over¬
I
lonial Airlines to obtain efficiency
firmly believe will be more thaa
;

and

Stock
limited

Exchange,

partner

will

become

a

effective Sept. 1st.

Um,

24

(832)

THE COMMERCIAL .& FINANCIAL
mv

'V

wwv

■

■«

CHRONICLE

■

I

The world Crisis

am

not

5)
slow

convinced, that develop¬ purchase

ments, of the next

10

15

or

still prevent "another

may

(Continued from

Thursday, August
28,1947

gest it.

at

is

upon exports for
Part'of her
national

She would occupy it, no ance of the State as a
controlling some later date. Meanwhile, at~
doubt, if that occupation were factor in the
economy has in¬ ternps to settle immediate
prob¬
part of an immediate preparation creased
greatly in Great Britain, lems and to create a
long range
,
Since the last war, however, the for war against the United States.
France, Sweden and other coun- stability will affect
every country
tempo has increased. Great Brit-1 Otherwise, however, it seems to tries. It is the function
<of the in the world.
Canada and Ca¬
ain has no chance of covering
im-| me that no greater burden could State to plan. Since the individual nadian trade will be no
exception.
port surpluses by her current in-! fall on Russia than to gain control States do not lie
within a single
visible income. You know as well of Western
.Europe at this mo¬ customs unioiv the plans are made
Monetary Problems Far From
as
I do how badly the gap has ment.
individually and not for the States!
Settled
page

This was a period of
trenchment and retreat.

deteriorated
months.

in

Some

re¬

the

past
fewi
This is not at all inconsistent
observers believe with her course of
political action.

that this gap can never he closed

As

long

the

as

Western

They

believe

that

threaten to do

a

to

World

group.

Each country

develop its

attempts)

reference to other countries,

I

Monetary Fund

of years, will be

France, I believe, is even

Will United States and Russia

worse

Britain and -prob¬
ably much, closer < to a political
crisis of great magnitude.
The
.

government
must

rely

is

weak

because

i.t

to

Fight Over Europe?

a

on

the .moment neither
to

seize

Those who fear».that there will
oe a war within the next two
or
three years in effect believe that
the United States and Russia will

but

either

could

probably seize

power if the

sia

other

precipitated

crisis.

hey fear, however, that some
spark ignited by the struggle for
control of Europe will set off a

a

Both

camps have hidden arms.

;,, Under
pan

such

see

no

-

circumstances,

J

solution

easy

for

prance's economic problems.

as

a

practical

The

.1 cannot, of course,
completely
eliminate this possibility.
I beieve strongly that Russia would
not
want
the responsibility
of

its seizure if there

without

tures

undermining its

be

own

position.

early attack

an

French economic experts
appeared utterly fatalistic in many

States.

personal conversations that I had
>vith them.
De
Gaullists
and

create crises and

most

on

Nevertheless,

certainly

Russia

al¬

continue

to

occur

will

commerce

non-existent

Secretary
of
State
Marshall
hoped to get around this
difficulty
by making United States aid de¬
pendent

tinue to exist.
Other

agencies

States

are

studies,

of

the

working

from

United

which

•modify

various

on

some

that

plan

be

more

less

regard^

re¬

h^Phraad implications
tbp development.of industrial

indicate that conditions

for-the Communists to
control.

Another

Inflation, deflation and
human misery provide acclimate
in which the Communist
flourishes.
to

munists

trol in

Indeed,

I
that

predict
may

some

not

into

areas

or,

at the

very

considerable
it

of

keep close track

informa¬

We have

utmost

Russia's

nomic position.

It is not good.
I
well-informed person
who believes that Russia has
any¬

have met

no

made

be

like

to

stable Western

a

There

are

great

heavy

to

revival

of

industry.

fluence
^

modifications

some

The

Bank

be expected
in the

may

interest

New York.

to

of
take

sterling

a

-in
...

the

in

the

wait and see how

European recovery. As

the next year or two.

It

is

impossible to guess
what will happen in the next
or

two.

We do have

a

Furthermore, there
the chief
and

states

bound to

motivating. force
of

more

have

of

you know

the

been

TinuL 1 fte Pining. In the
united States,"

year

ence

does

trade problems.

however, depend¬

as

is still placed

the main

was
a
substantial import
surlus, however, in trade with
the
United States.
.

on

competition

economic

not want to

take too much

factor in shaping

.an

economy,

of

pense

its

has

population.

had

to

be

Police

tightened

frequently, and emergency
ures

taken

sources of

to

exploit

satellite

meas¬

the

areas.

re¬

Russian

soldiers

who
came
into contact
with
the
meager,
living
standards of South-Eastern Eu¬
even

rope have been difficult to
trol and there have been

con¬

many

purges.

This

the

United

take

will have to ask
for a dollar loan
the
next six
to
twelve
or

imports

impose restrictions

from

the

However, it is
these

not

measures

Canada

is

an

United

on

States.

impossible tiiat
»be

can

avoided.

attractive

area

open

deal

of course
that Russia will not continue
to
precipitate political crises. Russia
mean,

with

States

is

willing

to

responsibility but must
an.

uncertain

opinion at home.

I

public

can see a

dis¬

tinct

possibility that both coun¬
tries may want to withdraw from
Western Europe within the next
year or two and that some com¬
promise
on

be
I

may

still be worked out

the future of

Germany. I don't
that this compromise would

say

does not

some

a

am

permanent solution.

In fact,
afraid that it would be mere¬

ly the

precursor to

is

a

lengthy

po¬

gambling for high stakes and litical struggle that might go on
accordingly. Each for a decade or two. Nevertheless,
such a
crisis, moreover, has a distinc
compromise, if it came

must take risks

value for home

consumption, the after a period of acute crises and
being keyed up to war scares, might be hailed with
ever-greater
sacrifices
by
the great enthusiasm and might in

population
threat of

a

capitalistic attack.

Russia, I have

no

fact lead to undue

doubt, would

very much like to control Western

Europe if this
cally sound.

area were

economi¬

Under present

ditions, however, she

cod

could not di¬




optimism about

the future.

to

Most of the

countries in West-

ern

Europe already have plans of

one

sort

another.

The

a

loss, if

spending

neces¬

heavily

on

necessary, in order

supporj the working popula¬

tion. The that
United States believes,
however,
order

eliminate
were

ada's import
surplus. Relative To
rates of
activity, in fact,
this surplus is not
much greater
th^n prewar. '
/
1 V
current

Canada will,
however, be af¬
something on the fected
by any sharp decline of
European customs
European purchases, perhaps even
which would ultimately
more
than
the

of

union,
even

a

United

States.
.boundaries
though political boundaries Moreover, this trade to a certain
extent depends on the ability to
Unchanged, would force each
economic

government to follow
tional policy of

convert

a

more ra¬

investment

The

competitive factor would be
present, and vast sums of
would not be spent in
new

Canada

money

so

far

J believe, be
the

Neither, however,

war
future

will there be

a

I lasting solution to
world economic
import- 1 and political
problems. I hope, but

On

whole, it seems likely that
there will be a shift in
Canadian

with*greater emphasis on
exports to the United States or to
the hard

bP. I feel perhaps
apoll«ke for not
with
aPPear before you
timktln ^"prepa/ed «rie« ®f opbetag

ahfe

,

il

o

opttpfsm ta^

o^a

chaS nfS;»» ^0uld have stability
a better
reaching .world
more

At

S? Peace if there were

ft.

ewer optimists.
e first United

t

Nations

San Francisco
.my f"ends concluded
tion
rnational Organizatiop wotiid succeed because it had
a

thatathe

t

a

States.
The
an

the

of

to

Great

products
Britain

formerly

would

not

ready market in the United
"London

relies in

ceeds
for

of

Statist"

suggests

the

"Canada, for instance,

the main

her

Srs4bacaase th-F
Ly
.^uer-v day

Deonfe

tba.t the United

upon

exports

exchange

she

"to

the pro¬
Britain

needs

to

had to
I hear
States,

jSsum?

resources,
feadeS k an "itelligent world
leadership because it has to.
•
will

look. hack in history
nations and peoples
thing simnieSSKrjIy do the fi&ht
fI because the consewoidd hn°f
nE- the wrong thing
the strp^ t°o serious. ■ The man in
do

not

influenced greatly by

th»

Jof ,his pay envelope
ne?t week, and not

thks

15

M

or

bustae^m/trVrT

now-~ The
works in

,'2? by tradition
LS
sponsible to?. market
his
,

and is re-

stockholders.

The

V' C"

a democracy, unless
beinff t J^y.exucepti0nal human
is ite'Sibl„ ,n 0- ^ re-eiected.
It
nite 'thiv •'
piPk °ut an indefl"
ment

m
or

:such or the
as

K

govern-.
labor, or the

business,

CPhavrbeinmmadeforrmitStak,eS
SerenSarf
ue.end

of

the

Renpai

war

Un1tedXStata,Pfr0fitS T«

easy solution for Canadian trade

problems.

currln.Wo EtablUzjng international

This im¬

currency areas.

plies basic changes, however, since

find

another

immediate

dollars.

trade,

sent

deals

sterling into

the

many

general framework. There

w!1"ot>
withm

eco¬

an

^Vitally Affected

What I have said
a

ever

developing

capacity, except on
nomically sound basis.

with

European Plans Non-Integrated

or

capacity at

and

sary,

public works if

Conclusions

;

have

.

control

in

dcvelpf^ejQt^

SJ^^that the

for
Europe, in short, has United States
investments. There
problems.
The regime is again
*kat each state will plan are invisible
responsibility in Europe under within
factors in the trade
its own
building war industries at the ex¬ present
boundaries, devel¬ balance that tend to
circumstances, and where oping
offset Can¬

thing but the greatest of

■

Uanadian

of

sav
'
heard people
Some financial
leaders in the
InternaUnited States believe that
froMl Fund and
Bank would sucCanada

European within
following the months,

now

basic situa¬

tion, however, where Russia

are

disagreements about what will

be

more

Compromise Still Possible

important

Canada's foreign trade has
not yet
readjusted itself to the
post-war

being There

K

be

in

of '

process

junked.

avatt ^1 mieve>
*2• lor Rwsstment

gund for

that Canada has

me

period of the railroad strike
changes in the world
but it revived
economy. In
sharply when new 1946 Canada had
a
heavy export
occupational directives made it
surplus with the United
Kingdom
plain that the Morgenthau
plan and with other
"Sterling countries.
was

in Europe would tend to
discredit us, we may assume that
Russia is not too

unwilling to
things turn out

Problems Acute
to

substantial volume

UnitpH

be

that

great

rate

the

UanadiSS

are

England

.

Trade
seems

future financial

wTn of ^da and in

center for the
purchase and sale of
sterling funds outside of Great

Britain.

fi-

seem to have great

convertible,

these

meantime. It seems
New York will become
kind
of
an
international

several

Communist in¬
in France waned < during

"S1 circles

in the

It

German

American

re¬

and

likely that

if it goes too far in

power

agreeing

policy

to

eco¬

sort of

would

as well as to anyone else
Since any failure of United States

consid¬

importance

of

a

also

Russia,

not

curtain

amount of

tion leaks out.
ered

iron

some

States

Europe develop.

not
believe that Western
Europe will
fall under Russian
control.

Despite Russia's

must

difficulties in the way,
however, a
fact which is certainly known 'to

con¬

least, that their influence will
increase.
Nevertheless, I do

United

see

would not
the Com¬

come

factor

considered. As Marshall proposed,
the

usually

want

hold

han lead to battles.

into

come

if

than

past
certain. doubts about • thp
immediate future,

or
later, however, sterling
again become-

even

a

°f Ca-

S" mineral resources
teW* been in the
Despite

provisions

in

ideal

are

be

Sangrmtar^fVel0pn5ent

convertibility-- "clauses. Cupfrftewee in %e

*

Sooner
will

wants safeguards
against future
plainer in drawing certain lines
revival of German
militarism. No
Europe, but I believe that this
government in France can
will clear the atmosphere rather
hope to

loan

and

EEFdnSr reso"rcea- will
Over
* helieve. there

-Causing Great Britain the

sterling

and

will be firmer and

two

year w two

position and their
interests.
Both of these

common

including

or

most trouble at the-moment. I
fer to the
non-discrimination

may

ing bold and aggressive actions ther ;United States loans will
be
preparing which, although there might be made. Again,
however, I feel pes¬
economic eveiy intention to withdraw from simistic about
the evolution of a
stability is much more likely to them short of
war, might through real European plan.
come after a
great crisis than it is political oversight and
blundering
before.
Politicians and economic
^First of all, there is the problem
actually lead to war.
of Germany. The
cost of
experts alike recognize the fact
reviving
From
the
viewpoint of the and
that France is in the
stabilizing Europe wouldv be
process of United States,, it would be
very heavy
enough if German industry
going through the wringer, but difficult to
gear public opinion to
were
rehabilitated, and it would
^an see no way to stop it.
another war unless there were a
be even heavier
if it were not.
direct attack. I do believe that the
Nevertheless, Western Europe Will
However^ France quite naturally
United States

the

,

are

clash,

What I have said so far, particu¬
larly about France,.would seem-.to

ciirrcnt

and the United State
teri1reti€d together through
their strategic

'

*

countries,

Canada, will

on more

mark time,

Not Fall Under Russian Control

British production
has

Canada

con¬

...

(3)

for

final

.

^
in*

market,k^t,feastrniUi

as

solve within the
next

be

or

minor..
(2) The sterling area will

Marshall Program

Communists
a

believe n,
he - that
«aSy

levels! a ®"reat <*ea^ above

practical

viewpoint, Rdwever, I believe" we

ultimately be evolved. I am
difficulties, tak¬ practically certain that some fur¬

will

to

not

}

to

were

the United

-States'* t®«!*

fee difficult to
switch
chases
of
manufactured ennrf"
frOm the ^United cfa+0„ • »80od5h
British
tone

integrated plan¬ lated to both
is unbalanced and un¬
the sterling and dol¬
ning than would otherwise result.
The strength of labor
lar
groups, while retaining ^inde¬
You realize, of
impossible to stop the in¬
course, that there pendent policies to a
great extent.
is no
flationary spiral at Jts expense complete control of
Marshall plan as
yet Eu¬
.Europe at this
There is not much doubt in
and the government cannot dras¬
my
point, although strategy would ropean countries and many gov¬ mind
"that the United States will
tically cut its own public expendi¬ dictate
ernment
^conomy

stable .

makes it

United

ST8* ^^"pictare01-^^

impossibility,

conflagration.

a

time

market.™

Frankly,.J.,*

'

recognize. that an unprovoked atackby the United States on Rus¬

attempt

can

first,

power

the

British

International

From

same

in the meantime. <
should expect that
many
sov¬
Furthermore, it might be much ereign units
Canadian-®. &y Relations ■
will form themselves
worse if all the
plans succeeded into the three
C.V; " Favorable
'
-'..-v folio wing
groupsi-; v
I do believe.
than if they failed.
jipwever tha* o.
Since they, are
(1) A dollar area,
consisting
non-integrated, each country., at
mainly of the Western Hemisphere
the end of a successful
develop¬ with some exceptions.
Canada
ment period, would
probably find and a few Latin American
coun¬
its new capacities and
resources tries will
probably not "be mem¬ Canada and the
duplicated in other areas, and far
United -Statw
bers of the
group, although re¬ have some domestic
greater than the market
problems tn
potential. strictions .on

hostile

two

from

such

Fund and Bank.

oftl %-

chases' V' aspos?bl"

conditions, minor fluc¬
tuations. could be
tempered by the
activities
of
the

long that unpredictable

so

crises will

balanced power
forces—the fight over Europe.They do mot
Communists on the one side and expect a direct attack
by Russia
pie de Gaullists on the other. At on the United States, and they
between

be

J!!?6

iricom
high as ?r J

to; maintain her
exports to

and, at the

to

was

as'!

haustion of British
dollar reser**"
presumably :be to ennf
8

Currency stability .requires a high
degree of world equilibrium. Un¬

der

outside unless the period of development is

necessary.

off 4hat Great

and Bank

is

would

<

the countries possesses resources
believe, how¬
Complete rehabilitation and mod¬ ever, that it would be a great that provide any assurance .that:
ernization of industry, involving shock to Russian leaders if
they these plans can be carried out.
billions of investment in new ma¬ were told
bluntly that they could Most of them '.mil
.requfe:;,<suj),^r:
chinery over a substantial period have Europe.
stantial help from, the
so.

proportion

The purpose of the
international

without

resources

good^hTTT
tt"^e
su^fV? she^

her policy in
the event

' | produce an
over-all exchange sta¬
into con¬
This type of planning, it seems'J
bility. Again I am forced to be
to me, is not very effective. None'
certainly1
pessimistic about this
of
possibility;

through export drives based on fears that she will come
preat Britain's present industrial trol, she will most
structure.

as a

-consumer

United ' States.^ DepenfVn+

years

war

open

The

»

f^i

everv

i

one

ronton

thought

the
e

>

m
™

Uniten
united

t
•

example,

nf

^ thl

was an
pnce advances,

h»wever, that
these mistakes was
traditional types of
,

ctln.ess Practice.

States,

at

least,

In
it

Number 4624

166

Volume

THE

to me that the great major¬
the people have simply been

seems

ity of

(Continued from

i

enough
•

political statesmanship. Implica¬
tions of the atom are perhaps too
huge for the human mind to com¬
prehend, or at any rate to com¬

severe

Continuing

at a high level although movements were
week. Corn continued to lead in activity.
Responding to renewed reports of unfavorable weather conditions
over the
Midwest prices recovered most of their earlier losses
and closed strong. Wheat trading increased in volume, aided by
substantial government buying. After early weakness, prices rose
to new seasonal highs, influenced by the boost in government

wil1 have made UP their minds as to
^,ch American steel companies must furnish,
JL/ .p°ints out- At that time a committee of experts
f industry will attempt to screen down these rei wlJ A
°,btam a minimum tonnage which will carry out
art™ents Program. Although the British had in-/
sisted L
that semi-finished steel be

buying price for the cash

tho

in world trade within the
future and that there
will be further economic and po¬
litical
crises in Europe and
throughout the world.

drop

steel

tbe

products

shortage have

scraP

be

ducers

as

well

by October,

as

insisted

that

shipped.

Shortages and distribution difficulties

near

steelonly

American

supplied,

because

are

expected

As of Aug. 1 stocks of lard in cold storage in the United
aggregated 193,000,000 pounds.
This was an increase of
17,000,000 over a month previous, and compared with only 44,000,000

a

,,

year ago.

Cotton

lowing

™

in visualizing a situation in

funds amounting to $4 or $5

billion

four

for

year

a

for use in European rehabil¬
itation.
The sums will be much

will in¬
qualifications
that
some
countries may not choose to meet;

volve

and

that; they

than

amount

probably be ear¬
projects.

will

they

it

Canada,

seems

to

must

me,

still look forward to some serious

particularly

readjustment,

in

markets will have their impact

of the belt,

and 1,575,600 tons one year ago.

AND YEAR AGO

Loadings of revenue freight for the week ended Aug.

Canada and the
United States have been neighbors
for

a

that

you.

16, 1947,

Association of American Railroads announced.
This was an increase of 1,061 cars, or 0.1% above the preceding
week.
This represented an increase of 18,752 cars, or 2.1% above the
corresponding week in 1946, and an increase of 255,473 cars, or

38.8%

above the same week in 1945,

will

lead

relationship
of mutual

to

and

a

still

a

industry the past week was confronted by a

Car and truck

dependence.

SAN

to

The

strike in the

—

Street. Mr.
Taylor in
the
past
was
with
Dickey & Co., Howell Douglass
& Co. and Manheim, Baker & ver

pany, 300 Montgomery

Sidney

The

Financial

BARBARA,

John

Perkins

For the same

added to the staff of E. D. Baring-

Could,

19

East

Canon

Perdido

Street.

Special

to

The

Financial

Chronicle

Withs Russell, Hoppe Firm
to

The

Financial

is

Stewart &

With Merrill, Lynch Co.
Special

to

The

Financial

Chronicle

OAKLAND, CAL.—Charles W.
Kruck is

now

with Merrill

Fenner

Franklin Street.

&

Lynch,

Beane,
.jm.-




Known brands of canned foods
apparel clearance sales decreased

but mark-downs

The

continued

on

somewhat,
cloth¬

men's and women's summer

of shoes. Lingerie, blouses and bathing suits
Promotional sales increased as efforts to attract con¬

ing and some types
sold well.

interest to fall merchandise were

sumer

Back-to-school items were
devoted to furs,
and

intensified.

popular, though scant

millinery and jewelry.

topcoats was large and men's

attention was

The demand for men's suits

white shirts sold well.

advertised major appliances remained in limited
supply, but the demand for electric fans and room coolers increased
substantially. Lawn and porch furniture sold well, but high quality
dining and bedroom furniture continued to be scarce.
The volume of household supplies and bedding was large.
Builder's hardware, paints and carpenter tools were eagerly
sought. Increased vacation travel contributed to a rise in the
demand for tires and automobile supplies.

drop for the week.

Although to date, weekly
sistently' higher than the same
industrial failures in the week
July 10, and the second lowest

failures this year have been con¬
week a year ago, commercial and
of Aug. 21, were the lowest since

i

weather conditions in some areas

moderately higher than that of the corresponding
week a year ago.
Increased costs and slow deliveries in some lines
agitated retailers and buying continued to be cautious.
Some
of merchandise remained difficult to obtain.
week

and

was

8%, South 2 to 6%.

3

7%, Southwest 6 to

1319

INDEX DROPS IN

were

flour, lard, butter,

cottonseed oil, peanuts, steers, hogs and
of the price per pound

represents the sum total
1 of 31 foods in general use.
lambs.

The index

Board's index for the week

6% below, the same period of
decrease of 2% (revised figure)

with

a

ended Aug.
to date increased by

the four weeks
the year

8%.

thermometer bringing cooler tempera¬
tures retail trade here in New York the past week made some
progress.
Notwithstanding the failure of consumer buying in
fall ready-to-wear and fur coats to come up to expectation, de¬
partment store sales on the other hand, closely approximated
With the drop in

rising

;

country-wide basis as taken from
ended Aug. 16, 1947,
last year. This compared
the preceding week. For
16, 1947, sales decreased by 1% and for

Department store sales on a
the Federal Reserve

LATEST WEEK

steadily for three weeks, the Dun & Bradstreet
wholesale food price index declined 2 cents to stand at $6.57 on
Aug. 19, as compared with $6.59 recorded a week earlier.
The cur¬
rent figure represents an increase of 23.0% over the corresponding
week a year ago when the index stood at $5.34.
,
Advances for the week included wheat, corn, rye, oats, beef,
hams, bellies, coffee, cocoa, peas and potatoes. On the down side
After

to

decreased

types

WHOLESALE FOOD PRICE

Increases were: East 1 to 5%,. Northwest
10%, and Pacific Coast 7 to 11%.
Wholesale volume in the week rose slightly above the level
of the previous week and was moderately higher than that of the
corresponding week of 1946. Buying was generally brisk as many
retailers sought to replenish diminished stocks. Caution continued
to key-note purchasing and buyers in some lines evidenced un¬
easiness over increased costs and slow deliveries.

4 to

week

sales
merchandise

'ewer than

in the week ended on Wednes¬

estimated to be from 1% below to 3% above
year ago.
Regional estimates varied from those of a year ago
by the following percentages: New England and Middle West declined

helped to prevent

of the corresponding week of 1946.
Clearance
were
in previous weeks, but promotions of Fall
increased.
Consumer quality-price discrimination continued.
Wholesale volume lose slightly above the level of the previous
than that

Retail volume for the country

day of last week was
a

since April 10.

Chronicle

ORE. —Paul B.
with Russell, Hoppe,
Balfour, Wilcox Bldg.

PORTLAND,

Pierce,

and small failures showed a

liabilities of $5,000 or more were down from
61 to 52 but exceeded by a wider margin the 15 reported last year.
Small failures declined to 7 from 17 in the previous week.

Improved

ANGELES, CAL. —Harry

Special

purchased

The number of

further decline in consumer buying.
Retail volume in the
remained at the level of the previous week and was slightly higher

South Spring Street, members of
the Los Angeles Stock Exchange.

Young

however,
year ago.

week in 1946 failures stood at 17.

a

L. Hanson has been added to the
staff of William R. Staats Co., 640

,

areas

The con¬
consider¬
continued to be popular.

ably.

SUMMARY OF TRADE

Wm. R. Staats Adds
LOS

turned slightly downward in
19 from the pre¬

21, declining to 59, a drop of

Failures involving

Chronicle

CALIF.—
has been

SLIGHTLY DOWNWARD IN

ceding week, Dun & Bradstreet, Inc., reports.
They were,
almost four times as numerous as in the comparable week a

Baring-Gould Adds
to

foods were readily available.

vegetables was large and housewives
large stock of home canning.
Frozen

for fresh fruits and

some

foods, canned meats and cold cuts were in steady call.
sumption of dairy products, soft drinks and beer increased

comparable week totaled only

Commercial and industrial failures
the week ending Aug.

;

SANTA

in

for the

LATEST WEEK

Both large

D.

the

FAILURES TURN

BUSINESS

Mehr.

Special

for

of trade.

Nationally

CALIF.

FRANCISCO,

remained

previous week and was fractionally higher
that of the corresponding week a year ago, Dun & Bradstreet,

demand

against

factories were in the midst of a model
change-over period. Last week's output, Ward's said, included
60,288 cars and 19,163 commercial units assembled in United
States plants and 3,550 cars and 1,738 trucks produced in Canada.

John J. Taylor has become associ¬
ated with First California Com¬

E.

Canada the

Chronicle

Financial

country and arrested the

Consumer buying the past week

Substantial quantities of most

45,525 units as the car

Taylor With First California
Special

output in the United States and

production

1941

In

unfavorable conditions in

change in the weather alleviated
the heat-stricken areas of the

of

decline in retail volume.

like week a year ago.

-

-

A
some

Inc., reports in its current survey

according to Ward's Automotive

past week as estimated by Ward's, totaled 84,739 units as
last week's revised total of 83,501 units and 91,360 units

sense

TRADE MODERATELY ABOVE

YEAR AGO

than

SHORTAGES AND

LABOR DISPUTES

closer

greater

RETAIL AND WHOLESALE

about at the level of the

AUTO PRODUCTION HELD DOWN BY

long time. It seems to me
conditions in this post-war

world

strong demand but very little business was reported done due to a
difference of about 5 cents between the offered and th$ bid price.

totaled 906,305 cars, the

Reports, constitutes a major threat to future manufacturing programs
throughout the industry, since this company supplies most of the
car makers excepting Ford and Packard.

speak before

print cloths.

Buying of domestic wools in the Boston market was slower last
week following recent substantial purchases.
Wool tops were in

wools continued in demand but finer grades were very
Purchasing of new clip wool in Montevideo continued active,
with prices up about 2 cents since the first of the month.

States.

great pleasure to

ing prices developed for spot and nearby

scarce.

Carter Carburetor Co. plants, which

a

irregular and spotty.

Foreign

Canada, as well as in the United
It has been

with boll weevil doing some damage.

Trading in cotton textile markets was

of electric energy

RAILROAD FREIGHT LOADINGS ABOVE LAST WEEK

The

reports
sections

Buyers were hesitant in making extensive commitments due te
the easiness in raw cotton markets. Some resistance to top ask¬

of last year.

in

cotton to Japan.

the completion of the

only 870 bales during the previous two weeks.
Late crop
indicated poor to average progress in central and eastern

trade. Manufacturing capacity was

expanded greatly during the war,
and of course changes in foreign

expected government

larger than

purchase of over 92,000 bales of cotton for shipment by the Army
to Japan and Korea.
Sales registered under the export program
were about 37,000 bales during the week ending Aug. 9, as against

•

marked for specific

the first two days of last week fol¬

The Department of Commerce announced

600

years

smaller

ago,

on

buying and trade price-fixing against sales of

and power industry

five

or

month

depressed

estimate of 11,844,000 bales. Thereafter prices moved irreg¬
ularly higher with final quotations slightly above a week ago.
The market strengthened on reports of mill and commission house

distributed by the electric light
for the week ended Aug. 23, 1947 was 4,952,876,kwh., according to the Edison Electric Institute.
This compares
with 4,923,000,000 kwh in the preceding week and was 11.4% in ex¬
cess of the 4,444,040,000 kwh produced in the corresponding period
The

which the United States will grant
new

one

was

announcement of the

crop

ELECTRIC OUTPUT 11.4% AHEAD OF A YEAR AGO

Consequently, I believe we are
wrong

1,651,900 tons

Vis¬

States

Although the steel industry is furnishing steel at a rate above
that promised for a 10,000 car month to
carbuilders, authoritative
much doubt in mv
car output in October will hardly reach
mind that the United States will o°nnnCeS
3,000 units
2,000 below the goal set some months ago. The distrib¬
make some further loans. But it ution and
production of component parts plus the lack of skilled labor
does not seem likely to me that an
is responsible for this situation at
carbuilding plants.
over-all program for Europe will
The American Iron and Steel Institute announced on Monday
be worked out in the near future
of this week the operating rate of steel companies having 94% of
on a sound basis.
These countries
the steel capacity of the industry will be 93.4% of capacity for the
themselves would have to give up week
beginning Aug. 25, 1947, as compared with 92.8% one week
too much in the way of traditional
ago, 94.4% one month ago and 89.4% one year ago.
This represents
policies, state planning, and their an increase of 0.6% from the preceding week.
own sovereignty.
Maybe this will
The week's operating rate is equivalent to 1,633,700 tons of
happen over a period of years, but
steel ingots and castings compared to 1,623,900 tons one week
it is
most unlikely
to happen
ago,

way.

supplies.

There is not

quickly.

well under

supplies of wheat last week showed an increase of 12,040,000
bushels; corn supplies reflected a moderate decline.
Flour prices
were easier.
Except for a fair volume in family flour, demand was
dull with most users well stocked up for 60 to 90 days.
The lard
market was unsettled last week due to the rapid accumulation of

ible

affecting major pro¬

Another freight car crisis is
when demand for cars will reach a peak.
consumers.

grain.

Harvesting of Spring wheat was reported

nnirpm^in

finished

wholesale commodity

daily

Grain prices ruled

fhi wii

sharp

the

trend,

upward

its

irregular during the

the exact

from

COMMODITY PRICE INDEX ATTAINS

price index, compiled by Dun & Bradstreet, Inc., rose to a new post¬
war peak this week.
The index closed at 274.17 on Aug. 19, compared
with 271.91 a week earlier, and with 224.82 a year ago.

°fi Curre"t steel tightness Americans will soon feel
rnvp^
0f the Marshall Plan when the United
finfehe?
4<brects the shipment of about 120,000 tons of
habHitatiin If Iur ^eune5 six-™nth Period to Europe for reWar and KiJl A
R*Uhr ?lStr.ict* Within the next 30 days the

not much doubt in my

that there will be a

mo"thf w>th a slimwinter conditions. and not
reservoir of scrap

to withstand

25

NEW POSTWAR PEAK

Statps

perhaps a matter of life and death.
It is no time to cherish illusions.
There is

5)

DAILY WHOLESALE

the

prehend quickly.
I say, then, that it is damaging
to be too optimistic. Let us recog¬
nize the problems for what they
are—very difficult, very serious,

very

Malm6 hand

page

(833)

CHRONICLE

& FINANCIAL

The State of Trade and Industry

naturally since tne war
ended, getting a higher price or
wage wherever
it was possible,
with little thought to the longrange demands of economic and

acting

mind

COMMERCIAL

last year's

the

level.

,

mark-ups on dresses after orders were
consummated, continued to be a source of much controversy.
In

wholesale markets,

index, department
to Aug. 16, 1947,
decreased 13% below the same period last year. This compared with
decrease of 3% in the preceding week.
For the four weeks ended
Aug. 16, 1947, sales declined 4% and for the year to date rose by*8%.
According to the Federal Reserve Board's
New York City for the weekly period

store sales in

a

26

(834)

Thursday, August 28,1947

Prices, Wages and Profits—A Plea for

isfactorily

for

price

manufactured goods

changes

(Continued from

Labor-Management Understanding
two

2)

page

Let

years.

me

remind

lies
in
the
work
of
schools like this New York State

my present purpose is to
the vast differences
that

School

labor

progress

of

Industrial

where the future

tions

men

Relations,

on

industrial rela¬

ganized

industry and of or¬
labor are being trained

without

bias

and

without

Sunday Schools,
all

of

areas

I won't go

there

as

human

My subject

is broad enough if I stick to

Suppose

eco¬

Labor's

Because

this

is

problem, this conference is a good
place to bring it.
I hope this
conference—in
cussions

that

the

informal
to

are

meeting—can take it

are

I

am

spending a good part of my
time this year in
developing
a practical course in
the Econom¬
ics of American

ranks.

But

I

realize that

progress is to be made in
labor and management

if

real

bringing
together,

I propose

to

made

I

questions
concerning
wages, prices, and profits that have

dispute

during

the

our

the

am

iar.

see¬

not
.

CIO

sure, most of you are famil¬
It is hot
my
intention to

analyze the Nathan Report,

past

comment

on

it.

That

nor

has

"Industry's
for

profits

ARE

ACTUAL 8 CALCULATED

•EXCLUDING

ABOUT

BLS

FARM

IN

to

been

PRODUCTS

INDEX

AND FOODS

and

prices

To do

>

..

n
-■

CALCULATED—-/

'

/*"

/

-

*

>40

•-

120

:A

pmr
.*•

A

.

■

100

"^ACTUAL

80

X-PARTLY ESTIMATED
'

1

'

1

1

1

1

1

1

III

holds

1

1

•

tied together.
I wish to direct your

some

were

that I think
that presents

March

las

existing price level

expectation of

culated

gether;

BLS

index

index

since

the

tion

level.

high

of

one

of

nor

A

total

the

wage

and

as

salary

undesirable,
would

as

av¬

further in¬

be

a

in

the

average price
level,
I am tempted to
add, any'
drastic reduction in total
national
income.
I
group these, because
price and income are two

the

sides

of the

same coin.
They have
together, and they will

up

down together.
i, It will be

cal¬

interesting to

statistical

gone

con^e

use

this

study of prices to calcu-;
late how much
incomes and unit
labor costs would have
to change
in order that
average prices would,

drop

hot

an

appreciable amount.

have

I do
time to go
through tl
with you, but

calculation

average rise of 10 points per
v.

is

hor,

again
came
to¬
last March prices

.(.

in¬

higher

further increase in
the
highest
prices.
The situation is not
one
that requires
any drastic reduc¬

The real price
picture of indus¬
trial products sincC 1940
is a total
rise of about 60
points in six years
an

bringing

group

new

problem

not

juncture,

have been in line with
the natural
forces of supply and
demand.

year.

of

is

rates would be
just
at this

1947, the

and

differences'

The

power

price

crease

correspondingly
sharp price decline.
official

problem

erage

a

In the first
quarter of

levels.

purchasing

over

and

extreme

bringing up low incomes
bringing down high prices.

The

rer

1947.

caused the great concern

the

coming

orderly adjustments
to

of

one

extremely steep price
during the 12 months
to

the

in line with the

postwar

impression created
this double jump in prices that

oy

any

comes

market"
created the il-

was

differences

The impor¬

over

orderly adjustment; of
individual prices and

an

inflation

statistical work

Westinghouse

There

from March 1946
It is the false

which

are

give

you

We

jl Wi

the result.
that changes

found

in the
To place this World
War II price actual price level of
industrial
proper perspective, products can be accounted for
by:
it should be
fashion that I believe
is new.
compared with a rise changes in these four factors:
It
of 135 points
supports our position that
(on the same 1939
(1) National income
prices
payments
of
manufactured goods aire the ire- base) from late 1915 to the middle to individuals.
suit of natural
of 1920,
(2) Average prices of raw ma^
during and after World
law, despite the
fact that
prices of differentiated War I. The World War I
terials.
*
;
•
'
■
average
rise of industrial
products are also set
(3) Average hourly
prices was nearly
by their pro¬
wage rates
30 points
ducers.
in
Prices of manufacturec
per year, or three times
manufacturing.
the rate of the
goods are determined
(4) Production per man-hour.
past six years.
by their cost
of
OPA is given much
I propose to
production, and by what con¬
more credit
show that a sizable
sumers are
than it
willing to pay.
really deserves for the drop in the average price level
It is possible to
smaller increase in the
can occur
calculate a price
only if and when sizable
price level
index for manufactured
between 1942 and the
goods tha;
present, as changes occur in all of these re-j
has agreed
lated economic factors.
compared with the much
very closely with the
larger
Specifical—'
actual BLS
Wholesale Price Index price rise between 1915 and 1920 ly, a sizable reduction in the price
since 1932, and until
Prices
level of manufactured
now
are
OPA came
where

interesting

this

-?

'•

'

effectively

attention to
is

{

1

in

one

manufactured

this,

controls

danger to

among incomes and
among prices.
Our
price problem is one
of

prices and., "free

usion of

is

reduce

BLS

prices.

rigid¬

Despite much opinion
contrary, the American
remains

the

of

averages.

months

axed and

trolled

flexibility.

of

OPA

the

watchword

and

unemploy¬

are too small
factor to provide
any appreciable

economy

within
tant

OPA,

purchasing

mass

ity—and that profits

the

When

the

continued
prosperity for all lies
in the extremes of
prices and ofincomes—in abnormal

finally removed in 1946,
index jumped
nearly 40
points. But half of this
jump was
i;o
close
the gap
between con¬

,

done at
,.:

appetite
about a

The management
position—if I
may be so bold as to assume
there
is a single
management opinionis that prices and
wages are tied
together with considerable

to

with

this

insufficient
income

has been disturbed.
The chief source

ated index.

our

power and cause

a

occurred

be

can

In

power,
because
usual distribution of
real

prices woul$ have been at the
higher level shown by the calcu-

Presi¬

goods
closely in line with costs of
pro¬
duction. I will discuss the
relative
size of wages and
profits later on.
Now I wish to show
how wages

160
..

the

than

there

sense

purchasing

natu¬

out

incomes have

average.

tendency for prices to rise, and

years

of

national in¬
come
which, if permitted to con¬
tinue,
will
reduce

1939 • 100

.

to

brought

redistribution in

prices

LINE

WHOLESALE PRlOE

Council

insatiable

has

competition

PRICES

the

ment."

report

for

to

Economic Advisors

consumers—

by the econ¬
omist, Robert Nathan, with
which,

practical
in

as

.

the rest of my
time to present
management's way
of thinking about
some
of the

been

organize

January

by

the workers whose
exceeded
the

of

years
no

a re¬

lagged behind the
average
cannot buy the
goods produced

OPA had an
easy
job.
There
would have been no
greater price
rise without OPA
during these two

our ex¬

dent, made this statement:

organized
to
raise
wages, but this is not enough. We

Another opinion of labor is that
presented at length in the

use

last

are

to

cause

Philip Murray, in his report of

long maintained while rising
prices cut off buying power?"
(2) The second statement:

need

later

depression.

a

AFL "Labor's

be

"We

sooner or

Then, during the two
194!5j, there was

1944 and
ral

isting prosperity to disappear into

given in

was

of the

buying power by
ing that wage increases are
wiped out by rising prices.

Cornell.

will

too low.

to raise

the lead must be taken
by neutral
agencies, such as this school at

very

from which I
quote two pertinent statements:
(1) "How can 'full employment'

own

Industry for Westinghouse employees — mainly in
the professional and
supervisory

profits unduly (this is a
very mild way of
saying it); and
that high prices and
high profits

Monthly Survey,"

at it.
.

position—stating it

recent issue

this

and look

up

that such price
increases have in¬

creased

One labor view

dis¬

follow

look at prices and

we

simply—is that prices are too
high; profits are too high; wages

educational

an

have

inl

prices

incomes

have

manufactured goods.
What OPA did was to
postpone
:or four
years the natural price
increase that would have
occurred,
without
OPA, during 1942 and
1943.
4

been
arbitrarily and unnec¬
essarily increased by
management;

necessary things. As
the workers whose

sult,

picture
of
what
OPA
really did to wholesale prices of

that labor's
position is that prices

wages first.

nomics.

creased much more
than the
of less

highly sig¬

nificant

Throughout the c o n t rov e r s y
raising wages without raising
prices, I think it is fair to say

Prices and Wages

relations, but

into that.

the

ovet

mad at

am

of

arge increase in profits.

nobody.

in

are

increasing prices because

looking at them
but, at the mo¬

will be evident that I

also problems for the

are

these

clothing have

and

lave happened to industrial
prices
without OPA controls
during the
j'our years 1942-46.
This chart gives a

i;o point to its
underlying thesis:
i;hat wages can be raised
without

management thinking
questions.
Naturally, I

is the right
way;
ment, I am not trying to convince
you of anything—and I
hope it

preju¬

dice.

There

separate

worse, the prices of such
necessi¬
ties as food and

10-

Therefore, it is a reasonable de¬
duction that the calculated index
continues to show what
would

pe by able economists on the
management side.
I merely wish

illustrate

and

think my way of

of

you

of

this

over

period of 4 depression
partial recovery.

year

and

matter

in

a

quantitative

.

•

history in its

■

'

■

into-the picture in 1942.

(

,

would be if OPA had

This series of
calculated prices
is based on three
factors that

j.;

assumption: If

are

most

important in

measures
'

••■-

natural
mand
*

we
have found of the
forces of
supply and de

that

determine

the

level.

%

The three
factors

(1)
to

National income

individuals,

measure of the
of what

which

willing to pay
prevailing condi

goods, under
tions—and which acts
•«
'

}

level

is

in

much

does total

(2)

The

the

money

on

the price

same

way

(3)

price

of

raw

cost

is increased

by

>

4

)

y

tO

8(

1< >0

Annual £ alee

100

a

Value

c

u

f

Output
Capacity C utput

6

increase

wage

>

rates, and is decreased
by
increase in production

any

The
cost

'
•

'




average

hourly
per

man-hour.
two

latter factors
factors
that

forces of
1

in

are

measure

the
the

supply.

This calculated
price index fol
lowed the actual BLS
index close
IV for the 10
years from 1932 unti
the middle of
1942, when OPA
price controls started to
hold back
the official BLS
price index.
As nearly as
en"

anything is "prov

by statistics,

these

factors

we

used

can

in

say that
the calcu

lated price index
do account sat

only if there is a sizable
decline in national
income, in em¬

oper¬

necessary
assume that to¬

ployment, and in

wage rates—that

national income
(and money
supply) and unit labor costs
hac
followed the same course

one
wants; labor least of all.
Suppose we assume, for our ex¬
periment, that we wish to produce

March

without
OPA that
they actually did follow
OPA. What I am
saying is
that if wages had
been controller
as
they were, OPA
merely delayed
the price rise
that has now
curred.

Wage controls, money

ply, and production
the factors that

sup¬

per man-hour
are

responsi¬
level of

ble for the
present price

manufactured goods.
But I have been
erage prices, and

averages

av¬

never

dangers
lurking in high prices, if all
prices
together, and if all in¬
No

a

increased by the

same

ratio.

matter

how high
average
prices rose, under these
uniform
conditions, everybody would be in
exactly the same position as
they
were before.

Prices and incomes
would match
The
difficulty is that prices and

incomes do not increase
in the
ratio for all
commodities and
for all
groups of workers.
The incomes of
some

and

"of

some

large

have

increased

the incomes of

teachers,

and

ers, generally.

the

the

level

of

last

relatively

of

full

employment, it would be

unrealistic to assume
any decline
at all in unit labor
costs of manu¬

factured products.
gain in production
will

be

offset

Probably

by

any

man-hour

per

further

in¬

in average
wage rates.
Unit labor costs will be
assumed
to remain constant.

Suppose also that we assume a
decline in the raw material aver¬
„

age of

wage

much

able
the

(which would be

value

of

na¬

25%.
of

We know from the
past behavior
national income statistics that
wages

matters

we can calculate

corresponding

in

white-collar work¬

reason¬

a

tional income
payments to indi¬
viduals.
The
calculation shows
that under the assumed
values, a
10% drop in prices could occur
only if income payments declined

total

than

drop in

apparently

drop

earners

on

10%

assumptions,

of

more

make

15%

the high side for
wholesale prices).
With these

farmers

groups

annuitants, school
To

form

by

small
amount of 10%.
Under current labor conditions

same

strongly organized

drop

can

disparities, great dis¬
and possible troubles
would
be
no

moved up
comes

no

creases

discussing

conceal wide

There

any

T

tal

never

one

satisfactions,

Unit Labor Cost.

Unit labor

V

we

tell the whole
story. Averages

materials.

4

as

supply.

average

make

are

are

for

we

oc¬

payments
is a gooc

effective demand

people

'

price

are:

if

products,

can occur

with

determining the
price level of
manufactured goods.
These three factors
are the bes;

'

ated,

they

and

step

payments.

salaries

with

If

total

income

would
income

payments

dropped 25%, wages and salaries
also drop about the same

would

25%.
labor

But

we

costs

assumed

would

that unit

remain

un-

Number 4624

Volume 166

THE

Without burdening you
figures, a drop of
25% in tota* wages at the same
unit
labor
cost would mean,
roughly, 25% decline in number
of
workers employed or more
workers
employed at reduced

changed.

with any more

hours.

actual case, there would
be
some
reduction in average
wage rates and less reduction in

ample

employment, income, and
wages. But, in any event, no one
would be very happy over the
consequences if the price level of
manufactured goods dropped even
10%, .when the other related con¬
ditions of income, employment,
and total wages were again in
equilibrium.
It follows

FINANCIAL CHRONICLE

profits.
Profits
enable
management to attract
capital and
o reinvest
profits to provide more

Small—Total payments of wages
and
salaries
to
individuals
are

SoI

years

about 65% of national income.

inIo7der.take u^?hese four P°^ts

Suppose

(1) Many Comparisons Are Mis-

have>
simple diagram
salaries and

the

on

in

cut

were

ration payrolls.

k

important consideration

more

(1917)

for

wages

output.
increase

one-third of all American
corporations reported losses.
In

with

,

1941—the best prewar year—only

an

appreciable outlay
and salaries for zero

56% of active corporations made a

Then salaries and
wages
directly in proportion to

profit; 44% reported losses.
(3)

output.
At

from this analysis that

Profits Measured

Cent

capacity

output,

the

of

Investment

Declining-—The

ratios

as

Per

a

Been

Have

diagram

on

now

who recommends a siz¬
the average prices
of manufactured products, under
today's conditions, is in reality
recommending a considerable de¬
cline in national income, in total
wages, and in employment or in
wage rates. A recommendation or
prediction of a sizable drop in

may show a

monopoly is be¬
coming a stronger and stronger
factor in American industry.
If monopoly is an increasingly
strong factor in American indus¬

prices is a recommendation
prediction of real depression.

or

ratio of payroll to income of
only
10%; an integrated steel corpora-

try, we must conclude that the
American monopolists are either

discussion

of

one

any

close

will

I

my

prices and wages with this obser¬
vation: We are living in a com¬

come

vary

and wages to total in¬

widely for different

the

shows

screen

in profits since

declining trend

a

different firms
depending on how completely the

I commend
this picture of a declining profittrend to those economists who are

industry

convinced

dustries

and

or

firm

in¬

for

is

mechanized

and to what extent the
individual
firm works up raw
materials or

assembles purchased
parts.

refinery, for example,

5°on the other hand,
60% of its total income

An oil

afraid

may spend
on

to

exercise

vary with output in a
different fashion.
At zero
output there is a dollar loss equal

the

that

powers

they

do

of
not

the powers they are sup¬

possess

Profits

1915.

that

monopoly-^or

payroll.

posed to have.

My

belief Is

own

petitive economy in which man¬
agement has two masters in this
field of price policy (among other
masters in other fields) : the first
of these masters is' cost of produc¬

very

tion; the second is effective

loss is wiped out—the break-even

taining Ample

Profits—A profit¬

point—varies

able

and

cus¬

tomer demand.

surface of

On the

things,

man¬

agements in manufacturing indus¬
tries are free to establish prices
they

as

has

that

led

the

President of the United States, la¬
bor

union

many public
Newburyport
merchants, to urge manufacturers
to reduce their prices.

leaders,

leaders,
the

and

It would

be

more

logical

(but

not

nearly so attractive political¬
ly) if all of these advocates of
lower prices were to urge man¬
agement and labor, together, to
reduce unit labor costs (say, by

withholding demands for still fur¬
ther wage increases until increases
in productivity can operate to re¬
duce unit labor costs), and to urge
the
government to reduce
the
money supply by debt reduction,
and to reduce costs of production
by reducing corporation taxes.

overhead

gradually
creases.

insistent that profits are too high.
thesis

of

the

This
as

loss

the

40%

say,

With

these

different

est

profit (or loss) over the same
output. An industry that
subject to wide fluctuations,

age

over a

There

why

some

parisons

other

many

misleading.

Nathan

Re¬

Main¬

the

on

man-hour
with

has

Before

the

of

amount

used

power

each

for

employed

good measure of capital in¬
vestment per worker for mechani¬

com¬

equipment.

The

Report, for example, compares de¬
clining payrolls from, the war peak

Jersey

in step

shows

Philip Murray, in his report to
the Council of Economic Advisors,

previously mentioned, cites vari¬
ous figures
to show that profits
more

1944 to

increasing profits'dur¬
same
abnormal period.

ing

the
base

to

Vernon, where he served
Board
and

as

ernment

over

ciated power-driven tools require

£

capital;
profits.
new

the size of

comparisons

of profits were
period, 1936-

from the subnormal

are

on

incorrect

an

basic

some

of which I have reviewed.

as

a

desirable

(1) Ample profits to attract
capital and for reinvestment.
(2)

Increased

of

(J) Labor has

with

lower

man-hour.

past

an equal interest




to

wages,

POWER IN MANUFACTURING

1899-100

400

V
/

/

/
/

01943
•350

/

/

/
/

1939^
300

/

/ /
/'

//

...

//
V
250

/>

—

1932°

I929W/

,

1927

labor

leaders

.

1

200

1925

//
//
/

/l923

//
150

■

>

Ms
'

>

/y

/O*l909
>JrT904
riass..

to
HORSE POWER PER

profits?

REAL HOURLY WAGES vs.

EMPLOYED WAGE EARNER

OUTPUT PER MAN HOUR IN

*

MANUFACTURING

1939-100

150

7

150

/

/

/
Ji.44

.v.'

/

125

f7

•,■'

■

4^/

•

-

■

/I40

15

I\

0)

SELECTED

(2) LEADING

CORPORATIONS

100

IONS

CORPORA'

39

100
37

V

10

y,A\
y
—✓

A
!
1

10

/

i

-

//
y

zJi

/

i

/

iI
1

75

rf33

mP*31

201

/

t/n

/

\l

50

/

+5
50

14#/

p'

i

//

/

s

75

/

if \

V

!

£'
....

/

i

+5

34*^36

'•

—

/

\'

>

/

/

A

'
vV'

/

/

\7

3

25

/

V

/
/
•

U\

/

•

/
/

30

management in maintaining

three—higher

costs, and lower prices.

RELATION OF PRODUCTIVITY TO HORSE

investment, have
the

other

essential

man-hour—are

the

per

125

being excessive,

declining for
years—and longer;

per

production

/

cent of sales and

keen

profits and increased production

new

CAPITAL

v

per cent of

dealing will bring them
the first two—ample

And

about.

industry:

cooperation

intelligent

and fair

conditions in American

AVERAGE PROFITS IN WANUFACTURING

and

per

as a

(5) Lower prices.
Only

/

purpose;

(3) Instead

profits,

York—paper—

New

(3) Increased wages.

1919

for

smart

demand high

thereby misleading;

that

Eco¬

(4) Lowered cost of production.

Labor and management have a
common interest in securing these

more

15

(2) Total corporation profits are
so small in
comparison with total
wage and salary payments, that
they offer no possibility of any
material increase in per cent of
Wage and salary payments, ev</i
if
they could be used, with safety,
tor

of
principles—

economic

profits by

basis

on-Hudson,

through better understanding
the

jobs
out of

analysis,

1939, to the fourth quarter of 1946
In closing, I wish to repeat my
—a period of peak production.
*plea for better understanding be¬
tween
labor
and
management:
(2) Total Profits Are Relatively

po¬

(1) Many of the profit compari¬
sons used by labor economists are

in

expired

term

for

75c.

capital requires

new

In the final

1945
(a high base), with
October, 1946, when hours ;per

ary,

making these four points:

made

his

Foundation

—

nomic Education, Inc., Irvington-

May.

payrolls was high; these two charts, you can see that
profits was low, due real hourly wages have increased
profits tax and the gov¬ in step with installed horsepower.
renegotiation of war bonf Installed horsepower and its asso¬

tracts.

sition concerning present contro¬
versies

Rogers

..

Combining the results shown by

AS PER CENT OF INVESTED

profit increases.

15th

Why Kill the Goose?—Sherman

years

President during the past

until

year

the

on

of Education for six

excess

than wages

I would state management's

New

—

resides in Mount

for

ing, because of their choice of
periods for comparing wage in¬

_

Bonds

—paper.

Mr. Reynolds

have increased
with output per man-hour.

As a statistical study, both the
Nathan Report and Mr. Murray's
Report are defective and mislead¬

creases with

for

Handbook

Municipal

Annual Edition—Ira Haupt & Co.,
Ill Broadway, New York 6, N. Y.

School.

vard Law

how

be

lapse caused by lack of purchas¬
ing power; i. e., by low wages.

Statistical

real hourly wages

of

The

—

6, D. C.—cloth—$3.50.

y/
chart

second

His

industrial

Kaplan

Williams and Tucker and
had specialized in banking mat¬
ters. He is a graduate of the Uni¬
versity of Delaware and the Har¬

a

cal

Nathan's

H.

Brookings Institution, Washington

wage earner.

is

Wages,

Annual

of

D.

in 1942, Mr. Reynolds had been a
member of the firm of Mudge,

and higher wages
come
profits. Don't you think it would

have increased
have increased.

the Chase staff

joining

A.

—

step
mechanical

week had been reduced 10 to 15%.

an

The

in

increased

col¬

for

are

Guarantee

1

screen

Many of Nathan's earnings fig¬
ures
were
comparisons of Janu¬

sponsible

Wright, 20 Ex¬

change Place, New York City.

/

now

excessive;
that high profits are the result of
high prices and that directly and
indirectly high profits will be re¬

port is that profits

Bookshelf*

Shear¬

Mechanical horsepower installed

reasons

labor economists'

are

chart

firm of

& Sterling &

man

firm is to main¬

a

the

of

member

shows how closely production per

;

are

industry

The

wide range

output.

in

cepted statements:

steel, should average its

profit and loss

Equal Inter¬

an

Management

in its
industry, to grow with its industry
and provide more jobs and better
wages for its employees.
I wish to show you two charts
that support these generally ac¬

range of

of

here.

tain its competitive position

payroll, over the range of output
typical of the industry, with aver¬

as

With

is necessary if

relation

comparisons for years of similar
output.
The only fair basis of
comparison is to compare average

is

other

and

firm attracts
additional
capital.
New capital
and the reinvestment
of profits

to

ships to output, it becomes im
portant to make profit and wage

such

this

that I cannot go into

(4) Labor Has

output in¬

output, at which this

from,

sfecond—for

reasons

is

a

Secretary of the bank's board
in recent years, is

directors

the base for

Labor officials have been most

The

reduced

The

The
Profits

costs.

70% of capacity. Above the. break
even
point, profits increase rapid
ly with increase in output.c-^r:;1*

fit; it is this view of

see

situation

the

to

of

Stern,

of salaries

able "decline in

Man's

resigning his post as of August 81
to return to the practice of law as

A

one

mechanized
plant
average overhead costs.
There is

Vice-Presi¬

Reynolds,

Irving

dent of the Chase National Bank

In the best year, this would
amount to less than 10% of corpo¬

is that profits are very unequally
distributed.
In
the
best
year

typical

Business

and

hand, and profits, on the other
change with output or
sales, in a

27

Irving Reynolds
Resumes Law Practice

half.

011 the screen, a
that shows how

wages,

profits

(835)

In

of full employment, profits
of corporations have varied from
8.6% to 11.4% (1915).

e C0sts' and to increase

In the

total

&

COMMERCIAL

OK

-5

-5

25

50
OUTPUT

PER MAN HOUR

1*

28

(836)

THE

COMMERCIAL & FINANCIAL CHRONICLE
factors

Germany
(Continued from first page)
fronts, little shops, and you know
the trade is

malnutrition

the

dewalks.

It" is

as

quite

cite you

is, I
In

can

figure:

ore

remember that

maximum

even

production

it

decided

was

to

Before

When

coal,

they could

on

idea

an

problem is.

So

of

Essen

get the impression that
has been
accomplished.

deserve

should

and

receive

would

not

been

but, having

able

some

self with the

to

do

more,

experience my¬

comparatively simple

took

You

over.

be

impressed by the ex¬
of
skill
and
ingenuity

amples
which

evidenced in the

are

recon¬

the 1 surface

work

of

the mines, carried out by
the managers and their men.
Coal production was brought uc
>

tons '

fall.

day ' last

a

the

came

terrible

Winter

it

the

reduction

in

ra¬

tioning allowance.
Coal produc¬
tion dropped to 150,000 tons. From
that

low

and is

going,

and

knowing

ton mark.

about

the

difference

planning

and

question whether under the most
perfect conditions they could have
accomplished more and I take off
my hat to them for a

truly

nificent job.

mag¬

zone

point it started to rise
just over the 200,000-

now

These

between

producing, I rather

mines

and

men

are

Of

criticisms, I
to judge.

am

somewhere

and

9/10s of

material

the

you cannot

he does

tion is found for
the four
problems which the German

basic

as

econ¬

economic

the

position

a

almost

are

as

To

be

sure,

these

a

on

8/10s

man.

However,

miners

do,

in

crowded

and

louses

traveling long dis¬
work, does not make for

efficiency.

T

Mine maintenance is
poor.
Stocks of spare parts and supplies

plenty

course,

secondary problems

of

as

you

know.
have

population

a

000.000
about
the

ably know,

about

40,-

population
than

more

is

before

our

as

prob¬
country and Great
you

providing $600,000,000
cereals, fertilizers and

of

seeds,

but

even

with

this

assuming that the

Germany this
pectations,

year

help,

crops

are

to

up

in
ex¬

the

maximum hoped
f°r is a ration
of 1,500 calories
per
day.
The 1,500 calory ration was
in effect a year
ago, but today it
is
only about 1,000 calories per

1

low ebb and rapidly dis¬

a

the younger men went into
the
armed forces. ; Many of them are
or

zones,

day.

So you see
they are in des¬
perate straits for food.
I haven't
any definte idea what

dead;:

many are still prisoners of
in other lands, so the work¬

war

ing force is made up of old
untrained youth.

.ordinary vitality and

as

one

Ger¬

man

said, "Hitler fed us
vitamins;
Democracies are
feeding us
calories.
When do we

you

get

some¬

thing to eat?"
;

Of

course,

Some

20%

population

;

portion

living

pretty good shape.

e

starve

1.

a

farmer,

farms

on

i

of

It

is

is

the
in

hard to

even in the most

regulated economy.
through the land
harvest

But

traveling
during the

season, we saw gleaners
; In the Lelds
picking up the indii vidua 1 kernels of
grain after the
harvesters passed.
It is

as

always, the city worker,
the industrial
worker, who is up
aga.nst
it.
For, while in the
heavy industries, such as coa

,

mining,

additional

rations

provided
;

he is

mg
;

for the worker
himself
forced to see his

on

this

family liv

very

meager

subsis

*£nce ration.

cial
,

are

How much the offi
raticn is
augmented by black

market
and

but

operations
the estimates

our

medics

no

differ

say




one

can

say

widely,

that TB and

pretty well opened
reasonable amount of

a lack of tugs.

The roads and
bahn

the great Auto¬

pretty

are

well

back

every phase of the economy
was rated as to how
much it could produce and how
much it must contribute to the

The number of
animals,
of
grain
which
a

economy.

the

amount

farmer

could keep for his home
consumption were extremely lim¬
ited and, of
course, all prices were

set by law and
wages were frozen.
This rigid control has been
main¬
tained by the
Quadripartite Gov¬
ernment. '
•
"

That

controls

have

worked

ner sources

There

was

of outside revenue.
no coal at all
n Ger¬

many last year for domestic heat
people realize they cannot

the

population

other Winter such

certain

amount

production

domestic

is

population
also

more

more

through

supply and demand is a hard law
to legislate out of existence and
$
with

man
on

wife and four children
diet of 1,000 calories a
day is

a

in

an¬

present
for

only must keen the
it is not only

income,

means

the

should

we

next

making capacity of the country is
in operating or in
near-operating
condition, steel production has so
far

more

come

bottleneck

all

fertil

So,

coa

agains
which

up

—

war years

Europe

of

power.

Germany
cars

Today, those
stolen from
France, Belgium
Holland, have been returned
the number available
in

greatly reduced.
ing
tell

of

and
cars
anc

and

supply, the transport people
they are losing about 1,000
a

cars

bad

order in

excess

of

those in good order.

Repair

work is

of steel and

of
I

labor,

less

situation

modern

is

Essen the percentage is

Of

worse.

we

told

were

live

in

Here

70%

of

were

de¬

damaged. I
people living

small

rooms,

one

of

which probably had been a coal
cellar and the other some place to
store preserves, you will find six

people living.
The roof
when it rains.
One

seven

above

leaks
told

woman

she

me

had

close

to

window because the rats

one

in

at

night.
is

Yet

everyone

some

hanging

clean', and ir

household
keepsake
the wall. And so it is

on

all over.

has

been

little

repair

work done due to lack of
materials

Multitudes

are

tens

three

of

rubble

The average space
of people is

persons

in

a

room

cept at

parts and
inefficiency
due to the same

causes

have outlined in the
coal situa
tion.

are

is

seldom

some

available

ex¬

central point blocks

away and, of course,
no soap/
is

course,

a

difficult

efforts

are

there is little

after

life, but, of
being made to

food, coal and

transport.
and

price

the

LEGAI

MARKET

PRICES

list which I picked

a

Black

.

Legal

Market

Price
Marks

1

lb. of butter._

1 8/10

220

1

lb.

of bacon__

14/10

180,'

1 loaf of bread._

4/10

25!

pair of shoes.. 70

1Tb. of coffee..

800 I

3V2

480 '

look

these prices

at

keep in mind that*wages are alsc
frozen. The standard rate of pay
machine

a

shop

lower,

wage

rates

Hitler

for

from
hour.
In

ranges

8/10 to 13/10 marks
the building trade
little

at

an

wages

are

the. time

a

■

Speaking of his labor problem
manufacturer

said,

"Our

noon

and save

in
lie

men

bread

Dusseldorf
in

bed

meal.

a

until

They

saved

so

black market for
the

on

than

more

can

the

legal rate. It
then

the

sounds

whole

at

cockeyed,
picture is

To get around the
situation, the

manufacturer himself has to
to

barter

a

he

set-up.

In

resor

the

mills

pays

home

some

of

the

ends

cloth—some

of

the

seconds.

the

brickyard he

bricks
as

pay.

will

couple

week

a

regular

a

in

In

of

allow

of

the
In
the

to

his

the

shops, such
locomotive repair, he will allow

the workmen
to make hoes

for

workman

a

few hours

or

their

spades

own

use

pitch¬

and

takes whatever

he

the

has

on all the other
problems
is that of bad
money.
We here at home have

out somewhere to a farmer
where
he barters what he has for food.

ap¬

or

converted at
a
discount. On the other
plant and its

contents

rehabil-

his plant.

If

he

is

able to
to hide
that production
away in
condition where it needs

a

one

he

is

inclined

of

some

two

or

only

hours

work

to

it, in the hope that when

finish
a

cur¬

reform does arrive, he will
tangibles that he can sell.
It has been pointed but that
the

rency
lave

currency reform may produce

un¬

employment, for the

reason that
;he manufacturer; will dispose
of
bis surplus help and
go back to

making

money. >

?..:s

i ;

Germans everywhere
for

/

are

a

}; ;

crying

currency reform.V The ter¬
inflation I of the last war is
fresh in their minds. Qur
people
rible

are

drawing plans, but as in so
things, nothing can be done

many

at present without the
unanimous
consent
of
the
four

occupying

.

powers. •

Increasing German Exports
There
that

are

there

many people who feel
be

can

no

permanent

reform so long as all
goods continue to be in such short

currency

supply.
vital

All

To

that

agree

necessity

German

is

an

the

one

increase in

exports.

work

this

on

tremendously

important and heartbreaking job,
our people have
developed a con¬
siderable staff under Major Gen¬
eral Draper, who is a
mighty good

They

man.

seeking personnel
here have an
idea
would like to help
in this challenging work. Draper
are

if

any of
that you

you

would like to know about it.
many of
know as a former President
Sears, Roebuck, recently has
joined the staff as one of Draper's

you

of

principal assistants and he is going
to be a tower of strength in this
It is a heartbreaking busi¬
ness, for if they figure to put Ger¬
work.

many on an even keel, this export
business must amount to at least

billion

year,

port

and a quarter dollars a
Last year they hoped to ex¬
300 million, but the result,

due to the

conditions I have out¬

lined,

and
the terrible winter,
brought the figure nearer to 100
£113

OArt

million

million than 300 million.

r

4. r\'

products of the land.
One of

This practice is sternly frowned

preciation of the dislocation which on in our
zone, but it goes
pven
a
mild inflation produces
the same.
•
Of course,.in
Germany, all the kFrom a business,

on

just

/

government agencies
supplying raw cotton for tex¬

is

tiles.

our

portion of these textiles

A

has been sold by the same agency
to other

governments and the bal¬

will

ance

into

flow

the

Deals for exchange of
ties

German

to pay them for fabrica¬

economy
tion.

commodi¬

made with other
perhaps noticed
in the papers, but these are not
as
simple as they sound.
They
take a lot of negotiation and- they
are not the overall answer.
In the
being

are

countries,

long
the

as

you

the

run

answer'

reestablishment

transactions

as

must

be

of individual

differentiated from

government deals and these must
form the backbone of the export
trade.

-1'

But remember: Germany

.is s

enemy country. All the limi
tions of trade with the enemy ap¬

an

ply.

week

a

or

made, gets on his bicycle and goes

some

re-

mav

frozen

produce,

hundred

addition

exerting

across

itate

they

make for four hours work

but

be

set in 1938, Mr,
Germany
today
is exporting
lumber, - flax,
discouraging building coal,
etc.—direct

happens:

the

k

se¬

the

trying to force the population
into the machine shops.
Here is an
example of what

sell

reform. It

were

was

and

a

currency

later there

very probably escape
and so
instead of trying to
pile up money
he hires all the labor
he can
get
at the legal rate of
pay to

a

When you

an

manufacturer
or

Arthur Barrows, whom

"■

Price,

1

,

will

and

*-

Marks

forks

Bad Money

Cutting

three

in Dusseldorf:

up

workman

these conditions.
The
job is gigantic and has a
priority
ranks

in Ger¬

you

PRICE, the

few o*

a

BLACK

taken from

or

which

LEGAL

his operators the lega
rate, but he allows them to take

pressure

hindered by lac.,

Here
and

of

millions

four

or

the

12x12.

It

The

living in conditions cockeyed."

these—in

as

the basements.
for

Today they will tell
that there are

can

There

such

trade.

many

spotlessly clean

are

one of these little dark
places
will find flowers on the table

and

of

in

war.

two

each

conditions
such
as
these, until barter takes the place

the

means

found

we

market prices

under

houses

under the rubble in the cellars of
their old houses and in the windowless
bomb
shelters
erected

came

rise

..

company

houses, -33%

"damaged," he

the

Gradually the black

property

stroyed,
27 %
were
practically
destroyed and the balance dam
aged—and when a German says

or

wheat, he hides a
The baker keeps a few

„

these

In

some

few eggs.
loaves of bread under the
counter.

percent

ogne and

workers

farmer

BLACK MARKET PRICE and the

housing has been de¬
such places as Col¬

mine

The

BARTER PRICE.

In

one

price.

the

stroyed.

visited

of

has

civilization

Twenty-Lve

of the urban

where

spiral

holds out

than

year, or about 3%

housing

We

ing

a

very steep
hand, his

a

markets ourselves and the result¬

levels.

seen.

month—that is the number
in

a

Germany improve

Of this remain¬

us

cars

somewhat

own.

Water

During the
raped

our

ever

transport.

motive

been

,000,000 tons
o.f

steel

more

industry.

a

but

production is the topic
on
the lips
of everyone.
With
coal production
increased, how
ever,

Islocation. For while I am told a
considerable portion of the steel-

and the children

electric power,
more

coal,

vicious spiral of

a

the

of

export

It is

of these places

coal

and

of

and rubber

coal.

you

coal

movement

the last, so a

being set aside

warm,

for

means

as

use.

But coal not

the

'he steel

of

Our

put

in

own

well

as

have been regimented so
long they
have the habit.
But the old law of

be

The

sooner

probable that if he has
curities, they are likely to be
pudiated. - His bank balance

well

as
they are working at pres¬
ent, is because the German people

that

very

control

not going to let them, starve
long
service.. Of course, there are occa/
if, by slipping a few extra marks
lonal detours to escape
destroyed
to a farmer, he can
get a little
bridges, but'on the whole they
more bread and a
piece of meat;
are in
pretty good shape.
Truck
The manufacturer is not
going to
ires, however, are in short sup¬
let his plant shut down if he can
ply and a considerable percentage
find an extra motor or some
of the available trucks are laid
pack¬
up.
The transport picture is not a ing somewhere, even at an absurdpleasant one.
Without increased edly high price.
We know
steel and rubber they are held
something about blsmk

during the

Germany's coal
production is exported, for Ger¬
many
has always been a coal
exporting nation and it is one of

izer and

that

men

and

a

calory is, but nutrition experts
believe that a minimum of
2,500
calories is necessary to
preserve

Rivers

r

are

a

handicapped by

much

appearing.
Hefe, too, you note, as in all
phases of German life today, the
absence of the middle-age
group,

are

worth

and

zones

'

these

Britain

of

this

and

7,GOO,000

war.

For

v

at

are

The combined U.
S.-U. K.

additional

railroads.

rigid

a

Every farm

of

reight is being handled on them,
in this / operation they-..are

worst

Living

tances to

of

the

in

now

movement

lut

reduced ration

a

These are food,
transport and inflation, and
are,

the

going to put

on

and

up

is

season

and

is

The

man

omy faces today.

there

harvest

and canals

to work

a

full ration.

on

and

coal,
other

The

progress

out

expect

efficiently

an

until

ders.

not in

between

as

made

men

validity of these

war.

ton

a

as

be

of

production
per
man
has
dropped from 1 7/10 tons a day to

solu¬

in

progress

can

critical

the

a

sense

coal

own

employed in the mines

before

as

the British

our

there

sure,

German Economy
while, from the base line of
July
and
August of 1945, the
physical progress in

cleaning up
re-establishing the tools of
industry is impressive, no real

These

people can¬
not increase their
operations with¬

the

To be

But

of

little

a

results.

in

are

some

many men

No Progress in

sent out.

one

exercised

,

and. with

job of trying to get new plants in
operation
and
production
lines

something

same

will

The German Government under
over

the

after that they shrug their Shoul¬

around

to" 230,000

have

standstill

a

sing

say we probably can handle up to
250,000 tons of coal a day, but

strain

Then

They, like the rest
disappointed that they

good

le

crops

Allies

great credit.
are

1

which
blasted

was

almost at

was

the

of

us,

be¬

prewar

of

area,

center,-

at

its

standstill.

a

men

story there as our railroad men
mg here.
They say the cars they
send out of the country for ex¬
porting coal never come back, or
ley get a bad order returned for

duction

struction

General Clay and his men who
have directed the work in our
zone

the

of

almost to

Transport

night and day by aircraft and pro¬

what

nothing

,

operating

60%

This

is

when

must not

we

and

50

capacity.

ings, they carted out 70,000 tons of
rubble.
Multiply that by a mil¬
lion and then by 10 and
you will
start

Valley is

tween

this, and remember they were
moderate-size
one-story
build¬

a

we

Ruhr

for loco¬

do

have

turn to the problem of

we

find that the great pro¬
ducing center of Germany in the

these

put

buildings back in service
motive repair.

Problem of Coal

so

came

ca¬

the

and

.

her

to

pacity, Germany was never able
to produce more than 80% of her
own food requirements.

Krupp Works at Essen,
they succeeded in finding two
buildings that were not destroyed
s—just damaged, as they term it—

our

Hitler

Germany's

sure,

well

been

situation produces

result.

knows

done in the open.
In the sub-zero
weather of last winter car repairs

at

example of what

-n

other

food

the increase.

on

be

it is

impossible to give you any picture
the magnitude
of that task

it

bad money

production is below normal, due
tq lack of fertilizer and tools, but

of

alone, but

inflatior

bank deposits and debt have
been

The fact that shop facilities have

are

produce

Money in circulation

tremendously expanded.
Every
necessity is in short supply. Every
luxury has disappeared.

To

struggling to survive.

s

diseases

and

which

present.

are

largely destroyed means
practically all the work must be

steadily

The rubble has
been
cleared
from the streets and pushed back
over

Revisited

Thursday, August
28,1947

German

styling has beeii. out of

touch with the world markets

All

years.

mail

censored and the

of

hecessity

is

problem of John

Smith in the United States trying
to

buy from Hans Schmidt in Ger¬

many

is

one.

Little

an
-

by

extremely complicated
•

little

our

people

are

.

_

_.

ironing out these problems as best
standpoint;'this;
sJthey can,/but It is a slow, labor 1.

|

THE

Number 4624

166

Volume

COMMERCIAL

FINANCIAL

&

CHRONICLE

frustrating business and the
so far are disappointing.

began to suspect that perhaps our Certainly such funds must be conEastern Ally, with his stark real- sidered not as a humanitarian
1was
content to see dole, but as risk capital, which we
Economy Ru
| Europe go to the dogs and was, have a good chance of reclaiming
On the overall, I am atraid my therefore, unwilling to change or if we succeed; and that brings us

ous

results

that the economy cooperate with any changes in to the Sixty-Four Dollar question:
present running down hill, policy. The overall result was an "Is it worthwhile?"
fatocks of spare partsand supplies agreement with the British: the |
Many persons feel Europe is
are diminishing
People are wear U. K. and U. S. zones were com- done and instead of trying to hol¬
ing out the clothes they had. You bined and the general instructions ster the crumbling structure of a
this
particularly
were changed from those aiming complex economy, we should let
clothes, work_
.^hoes. to reduce Germany to a pastoral Europe" sink'to a self-sustaining
The continuing depreciation of
^tnietHms to get her on level from which she could build
the currency is bad.
C?Iirse' Jypicaf
our whatever structure she had the
method, we did not rescind the
While it is hard for an outsider
ability and fortitude to develop.
to judge, I am afraid public harH
moUno " t+
1^ructl0ns or rules, we They feel at the same time we
rale is on the dec
.
just added new ones. As a re- would benefit through the readto expect anything «^ when you | suit, as nearly as I can make out, I justment
of our own economywhen I was there the instructions which
realize what these people have
r
- would result from the abanunder
which
our
people were donment of our role of worldgone through in the last two years,
during which they have seen the seeking to bring Germany back saver.
value of their currency grow less ^""•nnoniicaily ran sometnmg like
These same persons feel thai
this:
the fears of Russia as a military
and less; they have been on short

a

Walter

Says—

iu

=

badly housed; without
the bitter weather.
have seen many ot their

Get

rations;

heat through
They

but

the

back

carried

and

dismantled

plants

Communist spreads dis¬
couragement and dissension.
not an ex¬
pert, but I believe we can save
the situation if we wish to do so
and are willing to pay the price.
I
believe
every
businessman
would agree with me
that the
said, I am

■

Germany

not

to

Bring

use

any

industrial

competitor
exaggerated.

em¬

men

There is

that

off

the

job.

erties

ized,

going

are

to

be

the

good deal of validity

make

so

today is not Russia
as
a
military power, but as the
absolute master of Communism

It

is

public morale, go

a

As

matter

You

all

list

into, the

came

stories coming in
the

over

I

world.

won't try to

point out which
they are. It will take too
much space and besides it's

to

too hot to discuss internation¬

al economics

and

*

at

all

What

this

diplomacy.

*

*

adds

to

up

83, broke its stop of 87. True,

market-wise is that the bend-

the

over

whether

fact,

of

which

deeper
daily

Bethlehem Steel,

corner.

*

course

for

reasons

from

During this inactivity one
thing happened to readers of
this

*

of

are

newspaper

*

sje

*

to

up

find those buried in

can

a

weapon

a

bother

even

that

this.

basic

yawn.

great mistake if you
i;hink of Communism as a party,

You make

doesn't

*.

market

a

a
feeling of
The fact re¬

however,

There

can't

the second

con¬
care¬

including last Tuesday,
long threatened turn¬

the

such

under

meet

profit in

any

that

The danger

which Russia ab¬
Encourage new products, but let
solutely controls. It is a faith,
all the inventors know they must
militant faith, which thrives or
license their inventions to anyone
misery
and
discontent;
which
who is interested. Make them get
areeds in its converts a hope for
to
work
to
build
freight cars, the future and an undying hatred
automobiles and household goods,
of those who oppose it.
but to promote

ends

see

they won't have any false
illusions
about
making money.

occupation of Germany in 1945, it
was on a concept which generally
is referred to as the Morganthau

a

is

any¬

down seemed to be averted.

esting in passing but hardly
cheery news for either the
greatly brokers or the majority of
traders. The first group can't
conditions;

the prop¬
national¬

and

the

condition that is inter¬

year, a

this:

Allow the British to

for

ebb

into

security.

mains,

Trading

thing.

one

lowest

at

to this viewpoint, but there is an
answer and it goes something like

be pulled

tell the mine managers

least

was

trader

false

groundless and that ex¬
ability as an

are

perience shows her

said "Heil

ever

and tell the

sure

threat

coal production,

up

Nazis and they will

as

'

started to share in

When we

of

efficient operation,

if
they don't like their bosses,
they have only to denounce them

any

is a
wish to do.

progress
we

but be

material
clear concept of what
to

requisite

first

sure'

Hitler."

levels the

As I have

be

railroads

full,

ployees who have

levels there is the
constant fear we and the British
will get tired of our job and leave
Germany
to Russia and at all
At all

awav.

in

at

less

the

means.

dition aimed to lull the

notable for

was

haven't

I

Maybe it doesn't mean
thing. It may even be a

points to

now

in sight.

Last week

For

I can't and won't

remotest idea what it

up-trend. Support

range now

opportunities for

firm.

mained

Market dullness

ig

in

explain, the market has re¬

By WALTER WHYTE=

renewal of

has

it

start. sliding.

some reason

,

_

number of

prices to

Whyte

than

There have been

time.

some

Markets

at

better

acted

conclusion was
is

29

point in the single remaining
stock in the list, the market

Tomorrow's

Hill

n«wn

(837)

anything to

wasn't

dip

raise

anybody's

blood

pres¬

of

last

the

weeks

few

to have reached

seems

that

not

level

a

only

promises to
you think it or not, you are iri a
just a fraction. withstand
ing plants and the machine tool
any further reac¬
war with Communism right, row
Plan.
But it was a violation of a
plants and remember: "They are
tion, but, what is more impor¬
-The Allies
agreed that never not to be allowed to make alu¬ To them, at least, it is a "Holy
War" in which quarter is neither
pre-conceived support point tant, indicates a reversal of
again should Germany be in a minum or any material ,that might
asked nor given-and you are fight¬
and so dropped from the list. trend with prices headed up.
position to hold the world in jeo¬ be used in modern warfare."
ing an enemy who feels about you
pardy. Plants having war poten¬
*
>t«
*
What to buy in such a case
It does not take an expert to
and about me as our grandfathers
tials

dismantled and

be

to

were

Ger¬

country.

shipped out of the

not to be allowed to
produce materials, such as alu¬
minum and ball-bearings, used in
modern warfare. The Nazis were
was

many

They were to be
to
executed. Others would be im¬

to be destroyed.

The most notorious were

tried.

be

prisoned and still others would be
allowed to do only manual work.
The cancer of the world was to be
cauterized.

ahead tearing down the ball-bear¬

how

see

this

cock-eyed

don't have

to be

realize that you

sustaining

can't make

It has to be

state.

You

a

self-

a

at the
pastoral

or

another.

and

Germay

time reduce it to

same

is.

economist to

an

one

the Indians:

about

felt
no

good Indian

but

a

Keep Germany in

"There is

told

am

that

the dullness,

chains, keep
will have

the

Europe in rags, and you
communistic Europe.

very

was

Oddly enough and despite

dead Indian."

Further, don't cherish the illu¬
recently a
sion that once Communism attains
new general instruction has been
political power in a country the
issued, but I venture to guess it
people of that country can shake
still requires some Philadelphia
it off with ease. For, as the Chi¬
lawyer to interpret it.
cago "Tribune" pointed out in an
Parenthetically,
I would also excellent editorial last week, dic¬
venture to guess that if we follow ta tors, provide themselves with an
I

It

sure.

not to mention

breaking

of

support

a

should

get almost a blanket
Paradoxically enough

reply.

the steels which

will

motors

well

Glore-Forgan Offers

if

Libby, McNeill Debs.
Glore, Forgan & Co. headed a
banking

group

made

which

e

as

the

than

better

about

during

that
off
reaction

says

have

which

least

the

•

the

A rule of thumb you

think

stocks

just sold
like

probably do

not

market.
can

we

leaders

the

and

gone

a

will go up

the most during a
Powers agreed, and in Quebec and our national pattern,,, some day, apparatus of spies and a course of public offering August 26
of a rally. If you take a list of
Potsdam
they implemented the sooner or later, someone will1 be punishment
for dissenters' that new issue of $15,000,000 20-year stocks you can probably make
idea,: with decisions a§ to policies made the "goat" for the lack of prevents organized opposition.
2%% sinking fund debentures of
your own conclusions.
and plans, t
■'
■ ■■
progress in Germany to date. And
To

this

the

concept,

Four

Germany

stered

as

to

was

good

the

that

assumed

and

and
a

It

great

four

to be

continue

all policies
laws affecting the country as
agreement

whole

made

or

and

on

law

no

Physically
divided

was

to

be

changed except by unan¬

imous consent.

|

unit.

which had lib¬

powers

erated her would
in full

admini¬

be

economic

an

was

-

,

four

zones

—

was
each

accepting the responsibility
administering the laws agreed
upon in its particular zone.

power
of

itself

sections in the

was
same

divided

healthy

Europe

to

a

were

finally crystallized and pre¬
sented in the clear reports of Her¬
bert Hoover. In these reports he
lists what he terms

illusions."
can

One

our

"economic

is, that Germany
a pastoral state,

be reduced to

unless

top-flight

men

of our coun¬

Of course, he suffers from the
occupational
disease
of
the
He

soldier.

trained

believes

willing to remove
°r
exterminate 25 millions of her
^Population./: Another is, that
■Europe as a whole can recover
Withoqt. the economic recovery of
we,, are

Uerrnany!, And he says: "We can
hdep Qerhaany in these economic
chains if we wish, but.we will
ulso
keep Europe in rags."

in

obeying orders.
opinion, any civilian
the
vacillating and

my

with

faced

conflicting instructions of the past
two. years, would have walked out
On the job long ago and I doubt
if in so doing he would have im¬
'

.

cost of the last war.

So,
few

,

Investment
But to

—while

back to our subject

come
a

clear, concise statement

of

policy is the first requisite—we
must also face the necessity of a

capital

increased

largply

invest¬

ment.

Everyone knows you ^on't sgve

people's

lives

on

you

do

All

d et.

parkin?
from

the

on

"Anemia."

,

It is just as true
nut

industrv

living it
vru

of

a

1000 calory
is change the

a

back

certificate

to

"TB"

it dry up instead

seeing it bust.
How

much

erected

on

the Atlantic.

I am

Of its va¬
not in a position to

have

succeeded in getting

Such is my answer.)

lidity
If

I

thoroughly confused, then I
reduced you to the same
state in which I find myself.

you

have

caoiM

will

While I was in Germany,

several Americans who came

be

thing only I am sure and
that is ,that most of the people
with whom I came in contact are
Of one

not

today

actively interested in

slightest the
academic
consideration of
•dea.
Perhaps after the Marshall some way of life. They are about
Biting Off Our Nose to Spite
falks are crystallized. - it will be in the same position you and I
Our Face
'
easier to obtain an estimate. Per¬ would be in under similar circum¬
f<-It appeared that perhaps in the haps if we follow Mr. Hoover's stances. Their interest and their
for an eye" and a "tooth for a suggestion and conclude a sepa¬ every effort is in the struggle for
tooth'
policy, we;wer^bitihg off rate. peace, private capital may
existence and it is a grim struggle.
°ur nose to
spite our face, and we W611
supplement
public funds

,




needed?

I

haven't

the

will

ance

capital.

added

be

After

completion of the

Libby's

financing,

working

to

capitalization

*

are

now

*

Stocks

familiar

the

in

Somewhere
lower

or so

about

and

177

averages.

within a
point
they give signs of

If they

turning around.

form according to rote a

per¬

rally

to about 183-185 would be

in¬

dicated.
More next

[The
article

views
do

not

coincide

time

Chronicle.

Thursday.
expressed in this
veressarily at any
with those of the

They

are

presented as
i

of the author nr»iy

those

—Walter

will consist of this issue of deben¬
tures

Whyte

3,627,985 shares of out¬

standing common stock. <,
Libby is understood

judge.

The bal¬

efficiency of operation.

to pack a

Pacific Coast

greater variety of foods under one
label

than any other

in the canning

ates 44 plants
Hawaii and

or

ton of steel a year. All

do is watch

the

keep

I saw
for
a day or two and had all the an¬
swers pat, but I think I stayed too
that you don't long and saw too much to be ab¬
on its feet b"«r
solutely sure of anything.

death

"Starvation"

might better spend a
billions now in the attempt
you

frontier of western
civilization
on
the River Elbe,
than allow the iron curtain to be

Capital

*

weapon once

to
for Increased

Need

by, we at

with
Germany
pastoral state was
impossible and those conclusions
;

reduced

General

be

try.

into

to the realization that a

came

of the

way.

As the months passed

last

will

it

Clay. So for the record I would
say, that in my humble opinion,
in or out of uniform, Clay is one

proved the results.

Our Economic Illusions

Berlin

•>

is,

guess

my

In

country

the

into

the use of this
Libby, McNeill & Libby, priced at
dominates the skills
100.50 and accrued interest.
Pro¬
of Germany, France and Italy, and
particularly the technical skills ceeds from the financing will be
and the productive capacity of the used for redeeming the company's
German people, she will control
outstanding $6,450,000 serial de¬
the mightiest aggregation of power
the world has ever seen.
Allow bentures, with another $6,000,000
this to happen and the menace of
tentatively allocated for additions
Russia as a power will be so real
to, and improvements and bet¬
that you and America will find
terments
of,
capital assets re¬
yourselves living in an armed
quired
for
the . company's
in¬
camp and if you don't think that
will cost you money, .look at the creased volume of business and
If Russia through

,

'

ary

and

its

organization

industry.

Orders

Alaska, with subsidi¬

operations in Canada,
Belgium.
wholly

Securities

It oper¬

in the United States.
Pacific

England

Executed

Coast

on

.

Exchanges

The company and

owned

domestic

Canadian subsidiaries

and

for the year

Schwabacher & Co.
Member*

ended March

1, 1947, show consol¬
of

$127,110,575

and consolidated net

New
New York

profit before

idated

net

sales

interest and income taxes

of $8,-

567,418;. the corresponding

figures

York Stock Exchange

Curb E*"-ancie >A*f>oc.iate)

San Francisco

Stock Exchange

Chicago Board of
14

the

preceding fiscal year are

$100,710,240 and $4,086,505 respec¬
tively.

Y.

Teletype NY 1-928
Principal Offices ,
San Francisco — eanta Barbara
Mpnterey — Oaklard — Saoramentp

COrtlandt 3-4150

for

Trade

New York 5, N.

Wall Street

.

private Wires to

T.

.

fwiflO

30

(838)

THE

COMMERCIAL

What is actually happen¬
ing is that the authorities of the United States and of

not

sus*-

a rate can ever
sustain its.elf is a
opinion, of course, but the future should be
required to bear at least the carrying charges upon the
funds now expended to maintain the rate in
question.

of

ington

v

return to that

type of chaos.

What

fixed in any two countries, it
may

well

of the other.

It will

certainly

impossible if the rate is
different from that which.the market itself would
fix,
such adjustments in the internal
economy of either or

one

and

both of the countries
market into line

What

are

we are

prove

would be

as

necessary to
forbidden in the premises.

bring the

saying is, second, that attempts to fix both

the currency rates and domestic
prices and wages in such

of

half

instruments.

of

For

instance,

The

same

general principles apply, of

course,

in the

sider in cold

blood, quite removed from the passion and
the heat of political or even humanitarian
arguments,
this apparently everywhere
prevalent notion that retail
prices too high to permit

in the nation to buy
all he wants of
everything are always a sort of calamity.
Of course, prices of the real necessaries too
high to per¬

-

mit

large segment of the population reasonable

any

access

to them would be

extreme

case,

this line of

items

every one

even

unfortunate, and in the

calamitous.

But

how

far

thought be extended into the field

or even

semi-necessaries?
will not increase
supply.

more

should

of

luxury
Obviously, lower prices

had

European

hoped

that

the

countries

dustry

cannot

opportunity

make

of

use

because

it

that
to

reason

would

furnish

at

more

someone

Broad

of any

us

Principles

view the situation in the broad.

commodity

If the

price

or

upon

the

degree

allies

our

U.

K.

in

and

burden

a

upon

lesser

a

our

own

economy. To a certain extent, the
present exchange difficulties of

rather constructive
process—much more likely to
enlarge
and enrich human existence than
are the
nostrums of the

Of course, in some instances
nature
the maximum
production of a
some

that of uni¬

lateral contributions.
•

instance,

or

less fixes

or

substitute material. The net
result in this
one of them, is that the
or

rial is conserved

sider the
so

more

case

and the

relatively

more

scarce mate¬

abundant consumed.

of

Con¬

petroleum products today. We find that
tremendously enlarged has consumption of these
products

become that
even

refining capacity, transportation
capacity, and
available raw materials are
being strained to meet the

demand—but without
success, at least in

country. Why?
There

are

some

parts of the

reasons, of course, but we shall
confine ourselves here to
only one general aspect of the




i

'

•

•

How Can Coal Production
Be

*

^ J

Thus the problem of
the coal production of

us

TVer' U is such a
to pay for hardly

In

increasing

taxpayer.

fact,

points

it

the world
ment.

is

one

which

on

are

The

all

of

the

few

nations

of
in complete
agree¬
question
is
only,

how increased
production
be attained. The

of

fall

1947

the

ing

of

1946

have

and

shown

the

that

in

summer

in¬
in goods made
available to

ha^.g
S aand,British idea* of mfnage-

3
Thfp h10' uportthe British
its execu¬
Ruhr

tXoif" The
tion.

ment

is

and

in

ownership

are

some

ouTownmietWhat- different

other

sideration.

o^nC-e
coal

is

mains

.

consumer

are

Z

con¬

V.

V

■

(3ues^ion of allocating *

solved,

what

reserved

the

to

to

do

the

problem

with

the

Germany

re¬

coal,

econ¬

The German council
pro¬
to allocate only
10% of the
German quota to
omy.

poses

household

sumption
which

despite

such

?up

of

con-

hardship

cause.
The resumption
industrial production

German

indeed more

is

the

small allocation is

a

comfort

of

important than the

the

although

German
too

fort may force

^^ Brmsr^U So3ny

spend
of

popula¬

much discom¬

the population to

disproportionate

a

time

the

on

search

amount

for

other

hafg the Ruhr mi"", or to fuel (woodcutting), and'
nnsei ? We a,re absolutely op- pilferage and black marketinduce
opertrue fhat f?clallzation, but it is
atu10?us- to
n?
CTe are some differ- whether Still, the problem remains
Hon
i.
°KP1S!°n- The fi"t ques- of the German the remaining 90%
quota mainly for
Mpect the
?r or,not we ean the. production of. export
sav

■

-

enres

use

L"Ji,BeS to be better

manaeed

occupation au-

y

tla

selves'* °r biT the Germans them-

German manageZ
more efficient,
question arises,, who
managing. The old
were
1 Ruhr coal cartel
war
rZZi he "aajor German
think nZ f :
a
we ' cannot
i ;
."ng the crucial Euamon.

ronean

for the

tined,
Ihe

goods, or
production of goods des¬
to. German
consumption.

diversion of too much coal to

production for the

German

ket

will

and

indirectly force

leave

the

mar¬

the
victims of Germany unsatisfied—

further

aid

to

,

needs:

us

those

.

of

to

grant

victims—

while

a diversion of too
much coal
to the. production of
export goods
will hurt German labor
morale
and.

efficiency, and in addition
make necessary further relief
iqi-

ports- into Germany, thus again in
the last resort

burdening the U. S.

economy.

.

;

aroZ n" COOperat'on. but also
Wester^ *TSt faithful friends
wheTeS eornfiRr,Pe against us. But

So you see how
closely related
the coal problem is with that of

not

and with

in

tainteA"d.Germau

the

managers

wftkla y ,°,° elose collaboraBriA nA6 thatNazi Sang? The
ritish argue
only socialiVasolve that dilemma whit

tion

our own

industry,

contributions to

Europe.
We can
only hope that the participants in
the

conferences will contribute to

the

ZnTnLZt;7TSt' th™heGher!
themselves
not
ton
mappyhabout ^at idea—the GerKed bTfi, economic council,
r-ori
the legislatures of the
aG» anti-socialist directorate
strictly a^ iust has appointed
ans

leyel of the German

the recovery of

n can

solution

ropean

are

of

the,, over-all

problem

mind',, the

by

broad

their decisions.

so

Eu¬

keeping

in

implications of
Their main goal

should be not just

a

an

increase of

much per cent in the

tion index of

produc¬

such
such
pSence^Cler"ma'n' demo'"?
bureaucracy0 would be'
"its try^ but-the reintegration of the
entire European
economy.
That
BrittshVbai? .the experienced alone will bring about not ,only
^ritish administration. The pres¬

coun¬

or

ven

ent discussions

to some

certainly will lead
compromise, but only the

economic progress but
also, more

importantly, the prospects of

per¬

manent peace.

an

.

Where to Allot the Coal

Joins L. M.
Greany Co.

Another problem is, what to do
with
once

miners, especially food, hous¬
pect
and

that, their
-import
quirements will receive due

should

experiences

the

„

satisfied

STin«ith°Ut

<

the Ruhr
is of the greatest interest
not only
to the
Germans, but also to all
European countries and to the
British and American

crease

many

'

■

Increased?

given good or service. In such
higher prices have the tendency to divert demand to

other

fi;

Possible
possible for

Moreover,

politicians and economic quacks?

case

«

allocate

m?.n authorities, unless they

Production lessens

r

the British people are due to
the
exports to Germany.

really these exports must be financed
"necessary" an article is the less consumption is reduced
by temporarily at least out of budg¬
etary receipts, which means out
increasing prices—and accordingly the more likely that
pro¬ of the taxes
duction of it will be increased as a result
paid by the British
of the
higher price. and American public. We don't
The more easily the rank and file can
do without an
article, consider them to be gifts to the
the more
German people, and we
likely that consumption of it will be reduced
hope' toupon
the appearance of
higher prices, and the more labor and be repaid in future years. For the
time being,
however, the economic
capital will be freed for the production of those items
which effect of these
expenditures is not
are
really necessary to a normal existence. Is this not a much different from

Ger-1

as

the coal

to the execution
of the coal
pro¬
to be turned
over to Ger-

"in

during the last merit u™ u™
war, also; are in great'; need of Then
tthese goods, and
although such should rfn
exports are a tremenddus burden masters Of ta

services is high or rises in such a man¬
ner as to afford a
large profit—as is now so often alleged of
current prices—either there isra
diversion of capital and
labor to the production of it so that
supply is enlarged, or
consumption of the article is; reduced. The more

a

even

0UI own economy by
hahnneTndS,.of other European
grants or credits
scarce ron]1
purchase our own

Finally,

of them

urgently

gram

tion

be

as

output.
Obvi¬
ously, the French will not
agree

the

urgently needed parts.
the lack of German
coal production has made it
nec¬
essary for the U. S. and U.- K,
Governments to come to the help

incrL™

to
exports
the
present quota plus
about one-fifth
of the increase in

Wevery A

"in doP?rs'

crease

with

vival, these commodities'tniist

U

But let

worthwhile,

population could have imported from the U. K. although
mihtary gOTernmentUaintedaWitb
else's expense-—provided
they got to the other European countries, many will agree thatA
Procedures

market first.

*

be

the strain

most

them

^

spurred

in

would

an

would

stagnation, today are among those
loudly for the re¬
vival of German
heavy industry
to

Vefea^peopi™

b™1hemuW0SldThaVe '? be borne

see

has

bd

n

acceptable to"
neighbors that need

German coal

of
pense°nof burdehns' and so-the exsuch
incentive

that ask most

which

of

pense

that

have

will

knowledge

51any ifseif. In contrast

over

German heavy in¬
condemned to fperpetual

dustry

rest

cannot

fact that what is
starvation,
complained of is not an disease, and unrest.
Since ,Ger¬
oversupply, but inability to buy at current prices goods which many,
largely because of the lack
can
hardly be super-abundant in view of the fact high prices of coal, cannot produce, the food
are
easily maintained in the face of the alleged disability and other subsistence goods which
the German
to buy. Lower
people need for sur¬
prices could in such an eventuality only mean
at most that certain elements in the

miners

thn+

2"

Pat;°? Powers. The to take obBritish
viously are unable

work efficiently without
German
equipment and especially without
German spare parts. Thus some
countries, like the Low Countries,
the Scandinavian
countries, and

Austria

5,

than

be argued

can

Germany's

™

limitations

of the German
people in order ta
avoid
wholesale

Note well the

it

that all
will accrue to the
German eeon
omy.
But such a
solution
ously would not be

7oomf^ageu rati0ns d0 not leave
haw tnhf? measures, or again,
oatL
by the °ecu-

the

Some

t<!

Peon

representatives

it

the

Netherlands industry
is equipped with German
machine
tools.

economy are closer
the German

of

fhp

countries, the domestic in¬

domestic economy,, and the same defiance of these
prin¬
ciples—or, perhaps, lack of awareness of their existence
—are found on all sides.
In the first place, let us con¬

heart

TTQUtTT0r? Plan a£reed' between
o^to„?ri Rg .ab0Utu an increase in
fhp FYench -ZOnal autb°rities and
?
either to be'take^awlv
the
the spring of 1947'

great bulk
European machinery and pre¬

cision

! y

ov1r0Acarrt0fEu^mofe!

(Continued from page 7)

inconsistent—as indeed it imposed upon German industry
would
enable
them
to
capture
only foredoomed to failure
German markets. But in
many of
"bring but grief and pain for promised joy." these

but certain to

noTA

end-its

European Recovery

way that the whole is internally
is all but certain to be—are not
a

the

Coal and
dustrial products. Before the
war,
the
German
industry was the
source of
supply for the

he
£*■

the

the German

the

impossible to

prove

Z
A®

entire tocrease tn
German
consumption - This ic,
derstandable because the
need,^

man

hold constant the value of dhe of these currencies in terms

A

however, wishes,
substantially helm,?

also

over,

saying is, first,
prices more or less

'rY01

level, and to devote
larger part of the present

but

^

we are

that with domestic costs and domestic

council,

a

the

'

economic

lfc1

1946

may

upon international trade prior to the outbreak of World War
II. We hope no one will
suppose that we are advocating a

a=»n

upon the
of 70 million
tons of hard
against 54 million

exports

were
being permitted to fix prices!
This whole question is in need of
careful reconsider¬
ation by the rank and file.

naturally, well aware of the disadvantages of
fluctuating rates of exchange. We have not forgotten the
competitive devaluation procedures which bore so heavily

h77~"
.!y

will

days

in
At the present
rate of output
figure appears
reasonable

a

astronomic demand

We are,

few

28,1947

1947-48, based
as

howl, the oil companies have been "public
spirited."
But a relatively limited
supply of crude oil
is not being
conserved, as it would be if current almost

Arbitrary Rates

demand
A

German bizonal
submitted an

somewhat higher price, they preferred not to be
depend¬
ent upon coal.
Again, the oil companies, enjoying ex¬
cellent profits, Jiave felt it wise not to take full
advan¬
tage of existing conditions. Whatever the pack at Wash¬

tain. Whether such
matter

even at

export

satisfied;

monopoly,

that,

price for

sterling which current market conditions will

the

monopolistic practices, along with" the utterly irrespon¬

sible and unpredictable behavior of the labor
have made many, many consumers feel

other than the United States.

a

Thursday, August

In the first

place non-competitive conditions
both producers and wage earners in the coal

among

(Continued from first page)

undertaking to maintain

CHRONICLE

fields have raised and maintained coal
prices at figures
a good deal
higher than otherwise would obtain.
These

the network of fiat currency rates which sometimes
gets
in the way of more profitable British purchases in areas

are

FINANCIAL

situation.

As We See It

Great Britain

&

the

increased

it is mined.

production

coal

We cannot

to

as

well

low

sd
as

to

The

Financial

Chronicle

CLEVELAND, O.—Roy C. Har¬

ex.

increase

goods, much that the domestic

Special

output

L.
i

has
M.

become

Greany

Building.

associated

$
-

Co.,

with

Fidelity

Number 4624

Volume 166

5,1947

THE

COMMERCIAL

FINANCIAL

&

CHRONICLE

pendent

Apple Carl?

he

each other that it be¬

on

31

uniformity of wage rates be¬

to approach our
problems with that fact in mind.

tween a plant that has contractu¬
al relations and so-called open

Owing

shops. Plants in the same indusry
and region should maintain
the same wage rates for the fol-

comes

rose by leaps and
bounds; thou-lvious that prices, notwithstand(Continued from page 12)
as five men.
.In 1902 workers on sands of new businesses owing | ing higher wage rates, would come
heir inception to - the- ihtroduc- down with imperceptible drops in
public work had their hours cut
ion
of the internal combustion
earnings. The reasons are: that
;to eight daily; this was really the
yyith an manufacturers striving to
starting point of the eight-hour engine.
day. Wages now went up to $19
ah
a«n
Set to the market as fast as pos1 Ahead Socially,
Morally
sible with their products, that it
per week with an annual increase
and financially
I was inevitable that overtime, with
of 50 cents and two increases of
From
the foregoing it would its
$1 for the next three years. The
unavoidable time-and-a-half
employers now keeping about the seem that'we are all ahead so- and double-time pay added to the
same hours as the men and tak¬
daily, morally and financially; payroll, would necessarily reflect
ing from earnings about as much thus, confounding that school of itself in the higher cost of the
as six or seven men.
Along about "disastermongers" who were un- product; the higher cost of mate"this time was the beginning on a able to
predict the most ele- rials, as the material fabricators
"large scale of so-called manage¬ mentary economic changes of the had the same problem; the inabilment in industry; small businesses past, but can, with almost astro- ity to get these materials as fast
"either enlarging or disappearing. nomical precision, predict the fu- as necessary to have the plants

necessary

to

our

national

our

colossal
and

debt

and

international

commitments, it becomes a must
agenda to keep up the pur¬
chasing power of all. It is abso¬
lutely vital that the wage rates

on our

»,

'

(839)

maintained

be

and

brought
especially in the lower
groups.
Tackling
some

higher,
income

even

problems of a constructive nature
a step in the elimination

would be

of worry by members of the NAM.
A
few proposals
are
submitted

herewith

that

could

be

brought
up at the next Convention of the
NAM.
Our economy
has never
been

static, but, for the past 50
years, has been moving at a pro¬
gressively faster pace, with a re¬
sultant benefit to all except those

owing reasons:
(a) Using arbitrary figures, if
plant pays its employees $15
day and the other plant pays

one
a

$12, the
ing

receiving $12 is

man

pay¬

the

government $3 less
in income taxes than

week
man

per

the

receiving $15, and some of
bright boys in the taxing

the

agencies

of

the

government

will

realize this fact and will institute

legislation to remedy this discrep¬
ancy.
Voluntary action by mem¬
bers

of

the

NAM

will

obviate

more
function at their top levels; and
legislation, with its "ifs,"
period from 1903 to ture.
"ands" and "buts."
1905 wages had risen to $21 with
There is no argument about the
Roger Babson so
hours still at nine.
In 1906 the seriousness of strikes and the loss
(b) The employer by paying $3
many research laboratories who have fixed incomes or pen¬
less a day is curtailing the buying
movement for eight hours began and suffering that they
entail, but fre working on r}ew pr?£
sions. The status quo has fallen
throughout the country and by who is there to sa^ that they had I te™pt.
power of his employees by $15 a
0^ housewives, rather than into disrepute,
1910 it was almost universal, for no
week,
just
about
the
margin
redeeming features?
Without I re?uS15?
d>stof existing prod
ucts." Taking just one item as an
above the necessities, which could
; the
more
skilled
craftsmen. strikes we would certainly
Some Proposals
be,
,
certain
nlant
let us
be used for purchasing workers'
Wages again started upward with much further along the road to
* £aJ J x n00 units per week
In view of our necessities half¬
capital goods.
'yearly increases of $1 per week catchine up with the pent up de- ? yV ^
s '
■
V A P
catching up with the pent up de
way measures no longer suffice,
so that by 1913 they stood at; $24.
(c) By having a lower produc¬
we
must get drastic in our pro¬
The employer at that time taking
tion cost through payroll saving,
m
sides): the engineers discovered posals. Some of the suggestions the lower-paying employer takes
from earnings as much as eight ?rnm
} men and coming in about V2 an business
\ Tf1
by making the bolts 1/32 may seem radical if viewed by an unfair competitive position.
good
3nd
the
whol61
larger thev would need but
other-day standards but today it
hour after
the men and going world
crying for the products we ~
(d) The unrest caused.
The
side
saving four is essential that these or similar
home about V2 an hour before the

the

During

:

rvn|-t°h?2st^ fSrStk'Sffir
ilthat

wfritf

^ILl

,

'

men.

guess

Now
!

then

From
1

at

War

whole

our

on

period

the

World

preceding

just

'

arrive

we

I.

system was thrown into a
disordered state. When we

the war many
different government bodies were
set up, chiefly, from the business¬
man's point of view, the War
actually

like

if

chne

had

not

eco-

nomic
very

what the drop would

been

entered

v?
bolts; this
have I

industrial

our

ma-

down

a

^ight

.ing

Already the|four

fnS

ic

held

been

more than offset the
s^gh^y higher cost of the heavier
bolts;the saving in time in hav-

£oles

less

The administration

the war set up a
cost-plus system. Wage increases
during
this period
(1916-1920)
were
so
many and so varied in
the different industries that it is

,in
•

'

'

;

carrying

on

'

difficult

to put them in chrono¬
order; however, at the
end of the war they stood at be¬

logical
V

tween $40
to $50.
The cost of
living had risen to such heights
that it was imperative
to raise

•

successfully carry
During this pecoming to
work an hour after the employees
and quitting an hour before them
His share was now up to as much
wage

•

rates

the

on

to

conflict.

drill and

less to tap^ with four fewer

(1) National Debt—Discuss the
it

numbers

vate

in

the

retail

I

outlets.

•-

management of the higher-pay¬
ing plant becomes discontented

matter of the public debt to see if

is
filled
with
radios, I
assembly operations, saved the
washing machines and refnger- concern
1,000 hours per week, a
ators, and other so-called heavy I sizable
saving on this one operagoods are appearing in sizable Uion
market

is

in

advisable

to

amortize

same

period of 20 years.
The
amortizing of the debt being ac¬
complished very much as a pri¬

*

a

individual

would

amortize

Politics

riod the employer was

,

can

we

be

confident

be

no

excessive

will

otRce ln New

there

that

recession."If*p?u^s
to seat them*

S+.' bu,t thP
rptlwnp^wp

fact

purchasing

have

J^ ab0^
^Ugh
\fof

were

for

while today
we see increases granted to work
ers of $10 and more
(with holi
days and vacations),
amicably
"through conferences between em¬
gains,

ployers and labor groups.
'

period employers
plow black into their
businesses sizable amounts; work
ers constantly going to
a higher
standard
of
living
through
higheh purchasing power; going
jfrom the oil lamp to gas light to
electricity. The universal use of
electricity .was responsible
for

During

•

fcaitti^"s aAddreeCssesnareGre-

produced verbatim, by

this

prominent
financial

and

hanVinff

in

domain, that bristle with
amusing anecdotes
Going
Harrv

were able to

sults to

Study the

...

_

„

Tn

•

pitiable

tinue with the most disastrous

re¬

buying-power.

our

dis-1

"

such

would reduce its workers

to $9, and this process could con¬

handful

there

,

the most violent strikes

concern

.

'

"

pay differential of his
lower-paying plant and
would like to pay its employees
$12, whereupon the lower-paying

the

„

„

•

;

the

and

I.

a

subject of raising the
power of the South
Oh'
hrother
is
In retr0SPect> we
Oh
brother, is we is, or is we
we is" or is we
;
lw knQW they were a very through raising the workers' wage
"
rates.
The foreign market at this
;
harmless and innocuous part of time is
abnormal,' standing at
The foregoing paragraph, with
our citizenry.
Now, the whippingas 10 men.
around
$20 billion, normally it
its little touch of George
Ade-| b0y 0f
^me js ^he communist;
;
stands at around $5 billion. Must
Wages during the period from ism, brings to mind the serioussame 0ld story, beard and
bomb,
'1921-1947 have risen to a range
we risk the danger of war to hold
ness with which the banker of 50
Qne statistician figured that there
of between $60 to $90; of course
years regarded himself.
Quite a is y8 of a COmmunist per 1,000; this $5 billion market when right
in many industries and in differat our own doorstep is a $20 bil¬
change has taken place in the where he got his figures is a mysent sections of the country, they
lion
potential market, that but
"business dignity' within the petery as many states do not even
were lower
and in some few in¬
Then there is
riod under
review, which may allow them a piace on the ballot, needs exploiting.
stances
the selfish added interest of hav¬
higher.
The employers also properly come under the
If half of the time and one-tenth
and management during this pe
head
of
economic
revolution. 0£ the newspaper space now be- ing the South pay its just share
riod
also
benefited in
various
of
running
the
government,
Fifty years ago when one went hng used jn belaboring them and
ways.
The reason for this long
through the higher payrolls.
The
into a bank it was pretty much
bewailing their growing imporwinded
North and West now pay a dis¬
exposition of the wage like entering a church; the emtance should be used in advocating
and hour history of the last 50
ployees from the President down, I something constructive, we would proportionate share to make up
the shortage of South's per capita.
years, will, through this methoc
wore a sombre expression, and a
ajj do jess -worrying. A businessshow more clearly, how the trend
The
people who would benefit
smile, mirth or a cheery word, man wb0 has something on the
has been ever upward and onward
most through a higher minimum
was not within its portals. The fiball will make a go of it under
than
a
table
of
dry statistics; nancial
journals were likewise any political system. The impor- pay are our Southern citizens;
which fail to show how better
nevertheless • the
opposition < to
very staid and conservative; the
j.ard. thing is to keep an eye on
ment was achieved by
such
legislation seems to come
all. The text dry, the statistics even dryer,
politician that is in,
mostly from the South.
.present-day
standard
was
But, praise the Lord, the present
wbat about the cost of living?
achieved by great suffering anc
day shows many changes.
The
verv
higher
(3) Universal Currency—With
financial loss to both capital anc
news is presented more colorfully
the dol- the United Nations now in session
labor; the pitiable part ^eing that and
the
time
is
appropriate for a
•

with

his mortgage to a building and
Many of the analysts are doingI
....
.
(e) Shortening of Hours—This
loan association.
This would re¬
good and necessary job; where
now
subject is extremely controversial
nninW."
turn to the bondholders so many
and the pros and cons are myriad.
they really have something to say,
that ls a mat^er
opinion.
billions a year;
this huge sum
they are distinctly an asset, but S5y years 3g°' pr°b?
At the present time business in
would be used differently by the
where they deal in generalities or llttle
more,^
1were a
general has huge backlogs of or¬
recipients, some spending it to
do a daily stint just to earn their of
p°l; ic.aL °nintnrprf
ders, consequently most business¬
purchase goods, some to build
salaries, they are doing a
men
are
inclined
to
treat
this
homes, others to start a business
service.
The inventories in piffle
matter lightly.
As soon as this
look and a bomb in one hand. and purchase securities. No mat¬
are piling up; there is so much oflAV"*
the
socialists; they ter how it is spent it will assure backlog of orders diminishes and
it around.
Get a load of this: "If'Then
came
inventories start to pile up, busi¬
were
also variously described as prosperity for 20 years, besides
no serious international crisis de¬
ness should be ready with a plan
undesirable, dangerous, un-Amer- lowering the tax burden
each
velops, if strikes are held to a
to prevent any layoffs, with their
successive year.
.
minimum and "earnings stay
at
inevitable
curtailment
of
Tocai
pur¬
their present levels or go higher, ag!r.dt? ®
(2)
Our Southern
Market
chasing power, also owing to the
Y
k st .
b t th
....

C Labor Board.

to

topics be taken up and discussed,
rejected, or acted upon:

tener

'Howdy

thai?

Tom

Mr "

The

J1,0",^ye t10P'[onger

into™"eto

etc

personnel I
have

that

Cer-

in their customers.

o^this imba^ance. A
study the cost of liv-

months ago. Newspapers all over

ex-1 the. country

tainly the vast majority of men
in the financial world no longer

?o
10

Why? One need but take a

of-r1^

look: You do not
pect to see top officials with side¬
burns or beards, to instill con¬

is only

us nave so many more aoiiars

very

morgue-y

fidence

lar has shrunk s0 that

food

there
be

is

no

toward

a

universal

coinage system. The United King¬

Canada

dom,
tions

and

the

United

holding conversa¬
toward that end, why not go

States

are

layoffs

the

still

fear

on

effect

bad

a

those

of

large scale

a

on

the

morale

through

employed,

engendered

to

as

their

status.
A

depression probably demon¬
more forcibly the working

strates

the

of

circle

vicious

than

any

other calamity that can befall any
nation.
When any sizable num¬
ber of

men

are

laid off in

they immediately

a

plant

to be con¬
sumers; the men who still retain
cease

their

jobs, are so fearful that they
be the next to be laid off, buy
only what is absolutely necessary,
making them
"half-consumers."

may

is also followed b,y
times like that, ail
businesses
immediately
cease
their
purchasing.
The
proper
procedure
in .periods j..of slack
would be for business to replace
obsolete machinery, do the ex¬
panding that has been planned,
take care of needed repairs and
modernize
the
plant
generally.
But, no, fear has already taken
such a hold, that it seems fool¬
hardy to spend when the future

This

routine

business;

is

so

in

uncertain.

now

hog" and take in
the
world? The inauguration of inter¬
national coinage would do much
to
better
business
relations
"whole

The overhead of very large cor¬

porations
strikes
every

ment

them

is such

should

by

nowadays

be

that

eliminated

possible;

means

should

be

negotiating

by

manage¬

alert to

prevent

new

con¬

have advertising, so
been carrying

throughout the world. Inasmuch
as many countries are on a metric

that has to
long-winded in-

system and the money system of
the United States is on a metric

this would certainly be the wise-

system it may be possible to put
this proposal before the UN with
a
recommendation "to adopt the
dollar as a standard."
With the

tracts

chain-store

solved

movement

that

mystery

by a

vestigation.

tracts before the old ones expire;

est

procedure,
can

be

as

the

new

con¬

negotiated without

the heat brought about by an ul¬
One of the most powerful busi:
timatum by either side.
How a
seriously; ness organizations is the Nationa
have -their
part in the Association of Manufacturers.
It minting of a "mill" coin for the strike works out for a large cor¬
ing born;
electrically
operatec thev
world's affairs and they are play- also does more worrying than any benefit of the nations with a very
machinery making for more eco
poration can be seen by looking
nomical production of all kinds ing that
part: without makeup, body of its size and influence. low exchange rate, and by stamp¬
at the earnings and balance sheets
of consumer goods.
The worker We «till have some "John Ap- The probable cause that induces ing their coins with both values,

thousands

of

businesses

new

be

was

no

in

cold water flat with his heat

a

longer compelled to

live

take

themselves

<V:-*-

leys"

.

The

;

standard

rose

hot

to

and

cold

water and a central heating plant
With the advent of the automo
_

...

bile

the

standards


http://fraser.stlouisfed.org/
Federal Reserve Bank of i Louis
St.

v_

of

all

groups

_

.

"

„

Matter of Prices

supplied by the kitchen stove, his
.

too

that "worry complex" is that the
NAM has always been notoriously

negative in its outlook; changing

with our "stop to a positive outlook will be an
worrying" thesis, let us take up innovation that will be beneficial
the matter of prices. Even with a to all. Our economy has become
"seller's market," it must be ob-'so complex and we are all so deStill keeping on

stand¬ of the telephone company.
with
There
are
billions of apples
a
minimum of confusion.
Busi¬
around. They are not rotting, and
ness should find this constructive.
millions of us like apples!
So
(4) Wages—A very important
item for consideration should be Why Upset the Apple Cart?

the

ard

turnover to the dollar

could

be brought about

32

THE

(840)

■fl

&

FINANCIAL

CHRONICLE

President Releases Mid-Year

i

i

I'

{■

Congressional action. On the other

cal year ended June 30, 1948, are
now estimated at $37.0 billion and

budget surplus of $4.7
indicated.

I

and

have

amendments

found

to

with

$638 million. Changes
other headings
have added $354 million.
later under

maintain

balanced

a

sufficient

budget

to

surplus

meet

the

plus

was

long

run

would

the emergency situation overseas.
enable

bear

its

the

United

cannot

recovery

States

be

of the international situation
under

of

'

later stage

a

The

way.;

to

in world
determined

share

proper

to reduce the total. A reduction of

the

excise

Table

CHANGES

IN

tax

mended

in

in the studies
present

But

now

the

crease

uncer-

\

continuation

of

war

debt.

I

long

as

long

as

total

our
are

still

inflationary
be reckless

rates, which I
the

January

greater part

of

recom¬

budget.

post¬

this

in¬

is due to the rise in prices

stored.

billion
is

for

the

essential

to

fiscal

$848

(Millions)

,

New

Esti¬

Contract

Type of Change—

*

'

Appropria¬

mated

Authoriza¬

Expend¬

tions

V '

be

The

tions

itures

the

further

prudent policy of
for a surplus and for
debt retirement will be

1949.

sideration.

$31,292

—

A. Revisions due to changes in recommendations—
1. Amendments to the Budget through
July

(net)

2.

The

strictest

economy

1

'

Anticipated supplemental recommendations
next session of Congress.
*

•

:

'

J

-

to

B. Revisions

due

—

to

be

and

outlook— '
1.

1947

appropriations delayed to 1948

317
418

(a)
(b)

3.

programs

'

48

and
13

347

as

Reductions in authorization which will require
deficiency appropriations
^
Estimated offsets by deficiency appropriations

final..

.

Subtotal

—1,843

—3

offsets by

Reductions in Government
corporation expenditures

by Congress

354

<

be regarded

the

—1,275

YEAR

1948

848

832

w

—345
—153

346

149

327

309

—1,520

2,287

37,000

number

a

established

limitations.

January

I

to

the

Contract

budget
Congress last

recommended

con¬

during the
Subsequent

current

amendments

raised

July,

the

for

to

1948

thus

appropriations
au¬

and

session

year

the

final

total

of

about $750

$4.1

auction

fiscal

in

expenditures

1948

million.

is

estimated

during
at

$153

♦

Major Changes Since Januaryus now review
the three prin*

Let

cipal

in which the
Januaryestimates have been aU

ways

budget

tered/Necessary amendments and

1948

enacted

for

the

appropriations

reappropriations of $29.8 bil¬

of

than

2%

to expenditures.
Revi*
sions due to
delays and transfers
between fiscal years add 1% to
to

less

than

1%

Congressional

action—following

vigorous and

a

searching review
has

of the budget-^

reduced

appropriations 5%^
contract authorizations

increased
and

4%.

In

have

reduced

total,

all

reduced

*

side

V

and

expenditures.

21%,

Changes in Expenditure Estimates (by Function )

appropriations, 27% to
authorizations, and less

contract

appropriations

thorizations. The 80th Congress at
fiscal

and

authorizations,

billion.
Most of this would
not
have been spent. The
resulting re*

total

far

the Congress to

$1.6 billion for contract

first

con*

indica*

of my original recom*
mendations have added 3% to the

1947

totals

to

and

to

and

delayed

the

recommended

billion

year.

deferred
present

revisions

through

appropriations
have

fiscal

which

Rescissions—'The Congress also
rescinded wartime
appropriations
other authorizations
of

appro¬

tract authorizations of $1.5 billion
to finance Government operations

has

Thus,

on

and

certain

the

re*

for

items

million higher.

of

\

:

and

In

■—

$32.3

181

—1,578

•

In

priations of $31.3 billion and

—888

'

31,109

SUMMARY

total.

have

transmitted

budget

—929

♦Includes appropriations to
liquidate contract authorizations and reappropriations.

FISCAL

I

Authorizations

its

1».

1948

cases

such

that

are

contract

their 1949 budget requests below

January,
—15

4. Rescissions in authorizations of earlier
years.
5. Substitution of contract
authorizations for appropriations......
6. Increases initiated

V'

638

293

Subtotal

2.

338

Appropriations
362

V'

may

.

definite

revisions of related permanent appropriations

C. Revisions due to Congressional action—
1. Reductions in authorizations which

.

in program
;'

*

2. Transfers of expenditures between fiscal
years.
3. Changes in estimates of outlook for Government

already instructed the executive
departments and agencies to hold

I

;

1,048 ;
years

consistent with the Government's
obligation is imperative. I have

considered at

i

—

changes between fiscal

;

101

403

<
.

Subtotal

645

$37,528
300

$1,542 :

include

restore

the final total
of
appropriations and
reappropria*
tions will be about
$200 million
lower than I
recommended last

i.

January Budget

Congress

-

tions

followed in preparing the
budget
for

to

made

most part to

the

same

planning

appropriations

million

by the Congress
remaining $403 million of
appropriations and $317
million of
contract authorizations
relate

the present cash balance,
devoted to retirement of
the public debt.
will

BUDGET

re"

Energy

The

part of

1948

some

to be re*
The estimates for
supple*

ductions

fiscal

S

itself

Commission, will have

of

year

sound

Congress

as

and

mental

1948

fnl

of its
reduc
those for tax
the
Atomic

such

lions,
funds

tions,
$4.7

second

Mm

The

recognized that

pressures,
it
to include

surplus

its

necessary

saZ

million.

under

not

estimated

at

be

Congress to provide
plemental appropriations
and $1 ^
billion
and
additional contract
authorizations of more than

reasonable surplus in the
budg¬
et. In the light of
present condi¬

the

will

it

the 80th

uncer¬

as we are

anticipate that

session

the
sur¬

achieved—which in the
is the only way to retire

As

strong

a

authorization* a#
dll°ns of

$2.0 billion.

for

and

years

commitments

tain and

-Authorizations-

t

17

lion and contract

1947

year

balanced

was

the

a

I

THE

above

January,

policy. The surplus, together with

January-August, 1947

}

budget

first time in

from

budget of

income

Surplus—In the fiscal

to

the

on

$1,520

;<

national

levels anticipated in

The amount that may be required

effect

Thursday, August
28,1947

Budget Estimate
and

war

ultimate

Some

result

con¬

Receipts—The new estimate of
budget receipts is $4.0 billion
above the estimate of $37.7 billion
included in the budget in January.
Of this increase $1.1 billion results

until

the

into

net

not

have tended to increase and others

is

taken

emergencies.

In preparing this
review, it has
been possible to estimate the

*

million

be

deciding our budget
They emphasize the need

policy.

necessary

have added

billion is

the result of many changes.

revisions

listed

Expenditures—When
I
trans¬
mitted the budget last January,
expenditures
during this
fiscal
year were estimated at $37.5 bil¬
lion. The present budget estimate
is $37.0 billion. The difference is

i

sideration in

which

receipts at $41.7 billion.
On
basis
of these
estimates, a

net

tainties must

hand,

(Continued from page 11)

the

i,

COMMERCIAL

of

the

expenditures
these changes

the

expenditures

January

budget

by

1.4%.
On
1

an

i *»■,

''

the

receipts

side,

there is

increase of 10.4%.

Table 1 shows the dollar changes
since January in totals of

t1

appro*

priations, contract authorizations,
,

and estimated
expenditures.

w
I t
it

Martin & Jobe Now Withi

X.




Hopkins, Harbach & Co.
Special

LOS

to

The

Financial

Chronicle

ANGELES, CAL.—Theroix

A. Martin and Edward W. Job®
have become associated with
Hop*

kins, Harbach

&

Grand

Martin

was

Co.,

609

South

Avenue,

members of the
Los Angeles Stock
Exchange. Mr.

formerly with Fewel

& Co. and R. D.
Bayly & Co. Ill
the past Mr. Martin was an offi¬
of C. H. Hatch & Co. and R. C.
& Co.
Mr. Jobe was with
Lester & Co.

cer

Wade

With Fairman & Co.
Special

LOS

to

The

Financial

ANGELES,

Clifford

Tanaka

)

Chronicle

CALIF.

—

Y*

has

joined the
Co., 210 West
Seventh Street, members of the
Los Angeles Stock
Exchange. He
was
previously with Edgertoz*
Wykoff & Co.
V "
staff of Fairman

&

t1

——

With E. F. Hutton & Co.
Special

to

The

Financial

!
*

Chronicle

FRESNO, CALIF.—Kenneth G.
Inman
E.

F.

is

now

Hutton

connected

with

&

Co., 2044 Tulare
formerly with
Merrill Lynch,
Pierce, Fenner &
Street.

He

was

Beane in San Francisco.

Joins Staff of Hope Co,
(Special

to

The

Financial

BUREAU OF THE BUDGET

J.
of

Hope & Co., San Diego Trust &
Savings Bdilding.

T wsiwwwwii

!

Chronicle)

SAN DIEGO, CAL.—William
Smith
has joined the
staff

Number 4624

166

Volume

THE

Reserve

The Securities Business and Secmities Acts
fidence

(Continued from page 3)

private capital—will be subjected
to demands equal to those im¬

to

from

appear

the uranium curtain.
But

tjiat

assuming

dented demands

behind

to

authority

re¬

extended on securities
exchanges. It does not
this authority over other

be

may

aeyond the interest or capacity of
customer.
Also the time table

unprece¬

Board

strict the amount of credit which

against liability) is often

surance

(841)

CHRONICLE

& FINANCIAL

COMMERCIAL

dealt in

grant

on

securities.

Some

must

tell buyers and sellers of a
security to buy and sell elsewhere,
unless

the

longer

owns

corporation which

those

securities

no

de¬

cides to register.

question exists
which this

to the purposes for

as

33

This is
I

and

most difficult problem

a

quite ready to admit
posed on the function of raising
business to raise
power may
be exercised. Also, that so far a solution has not bee»
capital, to invest
capital. The two functions walk
;here is considerable doubt as to found and that
any solution max
hand in hand.
If industry is to and aid others to invest funds and
the, soundness
of
limiting the be hard to find.
One
solution
receive the capital it needs, one to provide securities markets, will offering, forces firms to choose
collateral value of exchange se¬ which has been under
we be prevented from
discussion
accomplish¬ )etween giving no information to
part of our industry must seek it
curities
without
corresponding for many years is the so-called
and another part provide it. The ing our job by the Securities Acts? their customers, or running the
limitations on non-exchange se¬ "General
m
my opinion and from my ex¬
Registration" solution.
risk
of
having the 'information
underwriters and sellers of securi¬
curities. It might well be that both In its essence General
Registration
ties will be successful in their perience, the answer is unquali¬ they give construed to be an il¬
problems could be solved in a would liquidate the problem by
fiedly "No!"
work only if brokers and finan¬
legal offering. In such cases, the
statutory revision establishing a making the "public" character of
customer must often choose be¬
cial advisers to those with capital
The Effect of the Securities Acts
uniform and fixed limitation on a
corporation (i.e. its size and the
tween buying blind or not having
to
invest can advise purchase.
the collateral value of any secur¬ number of its
All three functions of our busi¬ a chance to
owners) the condi¬
Willingness to invest depends on
buy at all.
Both
of
these
situations also ity where the loan js to be made tion which would make it subject
investor
confidence — confidence ness are to some extent con¬
are

placed

their advisers—confidence in ditioned and limited by
intelligence and good faith of visions of the Securities
the Securities Exchange
our industry in selecting the se¬
curities to be offered — and, of I would like to explain
in

the

course,

confidence in the multi¬

our

on

the

of

registration and public offer¬
ing which results from the statute,
in the case of an eagerly awaited

pro¬

Act and

tend to surround the act of selling
new

securities

with

Act, and

phere

why

atmos¬

an

It is unrealistic to

my

is nevertheless "No!"
There are three reasons:

answer

of

formation

doubt

and uncertainty.
expect that in¬

about

new

a

security,

which everyone knows is about
factors which we catch up
First: There is no provision of to be
phrase "general conditions."
offered, will not be made
either Act which in practice today available
to
customers
even
I think that industry will during
the next |ive year? place heavy prohibits or prevents an honest though
the registration process
and informed man in our business has
demands on our function of rais¬
not
reached
its
"effective
from negotiating out, offering and date." It is also unrealistic to as¬
ing new capital and consequently
selling a new issue of securities sume that prospective customers
on our function of investing, and
whatever others may think of its
advising on the investment of,
invariably act, or want to act,

tude of

in the

be merits,

I hope that we will

capital.

or

from investing his

own

assistance in raising

capital or advising his clients how
to invest theirs, and there is no

capital and that we will provide
within our own ranks a healthy
restraint on our own industry by

provision of the Exchange Act as
now administered (with the pos¬
sible exception of the margin reg¬

being equally selective in our di¬
capital investment. With
so much capital needed, and with
our own welfare and the welfare

ulations and the statutory

selective in the purposes for which
we

sell

our

rection of

of

whether
would

dependent
upon
not it is raised,
it

world

the

be

or

an

economic crime

provi¬

relating to what securities
may be dealt in on
exchanges)
which prohibits or prevents the

sions

existence of a free

market

only after studying the prospectus
and registration data.
I believe that the first of these

problems is being, and will con¬
tinue to be, gradually corrected in

practice. The S-l and other forms,

allowing the Prospectus to be Part
I
of the registration
statement,
help to make a better prospectus.
Development in practice of what

on ex¬

changes.
Second:

to

Our

industry has

be¬

is

what

corporate

familiar with the provisions
the Acts and has raised and

come

capital and confidence on
of
irresponsible ventures.
The
third function—providing dealt in billions of dollars worth
markets for the owners of capital of securities in the 13 years since
which has been invested—is in a their adoption.
sense the thermostat which con¬
Third: The present attitude of
trols the operation of the other the Securities and Exchange Com¬
two functions of our industry. This mission, which administers these
thermostat is itself operated by Acts, reflects the knowledge and
forces beyond the reach of our understanding which
it has ac¬
industry—far beyond our control quired in 13 years of practice and
—and, I am inclined to believe, is constructive and helpful in car¬
beyond our ability to predict or rying out the duties entrusted to
understand.
The
overwhelming it by law.
\

waste

and

and

not

"material"

information,

where

stated

is

such

data

and

in

how

should

be

in

the prospectus, is
al¬
well advanced.
Original,
wholly
logical
and
legal,
but
nevertheless
exaggerated,
fears

ready

for

the purpose of purchasing or
to the filing of corporate infor¬
carrying securities by a bank, ex¬ mation and compliance with proxy
change
member
or
registered rules and officer, director and

dealer.
A

der

stockholder

important problem un¬
Exchange Act relates to

more

the

another distinction which

between

securities

is made

listed

exchange and those which
Under

an

not.

are

disclosure
rest

on

an

means

Act the privilege of
issue of securities listed

exchange is employed as a
of obtaining corporate in¬

formation

and

the

conformity of

officers, directftrs and substantial
stockholders

to

Section

These

16.

the

standards

quite

provisions have created

of

logical
il¬

some

logical results.

which

The

logic of the Act rests

on

the

corporations have
years
acquired their
from ever more wide¬
individual
sources
and

capital
spread

today

are owned

lions of

moved

tice.

It may be some

time before

the attitude of "when in doubt put
it

in"

alters to

the

more

reason¬

on

un¬

listing

would

subject

to

not

place

&

new

"registration" burden
on
many
hundreds or possibly
thousands of companies not now
form.

into

in

"registration"

This

would

alternative

to adopt a plan

which would

in

effect

more

a

than General

,

,

disruptive

or

some

any
be

come

gradual

Registration

and which would not be

of

burden*

business

affairs.

by literally mil¬

A

Proposed Solution

Today, under the Securities Act
a
company
which seeks capital
publicly must file with the SEC

companies and should be
given the right to some minimum
information.

would
is

bef avoided.

sudden

their

of

can

which

tion

owners, who are far re¬
from
the
operations of

standard

requirements
condition which

a

manner

the

under

However, there is another solu¬

sound base that
over

on

avoidable, rather than

that

having

an

on

responsibility

Section 16. Under this solution the

information

basic

fairs

.

concerning liability for "omis¬
sions" are being modified in prac¬

am

A

and

thereafter

must

the

about

agree
same

to

its

af¬

furnish

annual

and

periodic information which is re¬
quired under the Exchange Act
of companies
listed on an ex¬
porate
securities,
persons
buy
change.
If
the
Securities Act
such
securities
from
private

parallel consideration is that due
to

the

wide

owners

in

distribution

transactions

of

in

cor¬

which

were

amended

which

so

that all compan¬

the public for
in the. future would be
up the prospectus";
minimum information which only subject to the proxy provisions
but I
feel sure that time will
and officer, director and stock¬
the corporation can supply.
make the alteration.
It is my
holder requirements of the Ex¬
guess that practice and not fur¬
The Information Requirements
change Act, most companies would
majority of orders to purchase and
legislation will
cure
this
I do not wish you to believe ther
become
"registered"
The illogical results spring from ultimately
sell securities on our exchanges
that there are not provisions of problem.
under the Securities Act to the
the equally obvious fact that the
are issued by persons outside our
these Securities Acts and the reg¬
same
extent as companies now
The second problem of recon¬
conditions justifying the
estab¬
business. Those orders determine
ulations issued under them which ciling the objective that customers
listed on exchanges are
"regis¬
lishment of minimum standards of
the size of our markets and the
do not require revision.
tered" under the Exchange Act or
There have the prospectus information information
and
responsibility
direction of prices. In our nation
as
are.
But the total effect of any before they buy, with the statut¬
companies which would be
exist, whether or not an issue of
of stocknolders—where stockhold¬
"registered" under the proposed
practical and desirable revisions ory obstacles to their receiving securities is
bought
and
sold
ers
often
outnumber
employees
"General Registration" statute. If
on the ability of our
business to it before registration is "effec¬
through the mechanics of an ex¬
even
in the largest companies—
the securities
of all companies,
discharge its functions would in tive" and the issue is sold, is
change, or through the mechanics
the opinions of stockholders and
under
such
an
somewhat more formidable. Sug¬ of a member or non-member of¬ "registered"
my opinion be slight.
It seems to
those who are seeking to become
Securities
Act.
were
me of the utmost importance that
gestions now being discussed for fice. Since registration informa¬ amended
stockholders control the market—
admission to ex¬
you
new
bankers and brokers statutory revision would seek to tion must be supplied by a cor¬ eligible for
not the opinions of the securities
realize that, despite what may be cure it by giving customers a time
changes without further SEC re¬
poration and responsibilities
industry.
quirements, a considerable, part ot
said in partial and sometimes per¬ period after receipt of the pros¬ assumed
by its officers, directors
If—to press the analogy—this sonal dispute, the Securities Acts
the problem would ultimately be
pectus within which to withdraw and principal stockholders, before
thermostat records public willing¬ are not an impossible barrier to from a
purchase. The complexity an issue of its securities may be solved. Such a solution has several
ness
to buy securities, it auto¬ the conduct of your business. In
merits. It would not be sudden
of these proposals creates con¬
listed on an exchange, the cor¬
and widespread in its application
matically signals to the rest of my opinion, our business cannot siderable doubt as to whether in
porate issuer is placed in the
our
and it would not introduce any
industry that the capital needs with sound reason use the Secur¬ practice the cure would be of any decisive
position.
As
the Act
of business will be given favorable
new factors
or requirements not
ities Acts as an excuse for not substantial advantage.
stands today, it is the corporation
consideration and that there exists
now
thoroughly understood by
being able to do the job that may
Some
further difficulties
are which must decide whether or not
an inclination to invest.
industry and the financial com¬
be before us.
Nor should we, in created
by the Securities Act re¬ it will submit to the standards of
I believe that the factors which my opinion,
blame the present quirement that prospectuses be information and responsibility re¬ munity. Also it seems eminently
fair to require that if a company
support the view that the capital stagnation
in our business on delivered by all dealers on sales quired by the Act, and thus
seeks permanent capital publicly,
needs of American business will these statutes.
Our attention is of a
"registered" security for a whether or not its security holders it should submit permanently to
be great
during the next five better directed to the need for tax full
will have an exchange
market.
year after the public offering.
those minimum standards of dis¬
years,
will
also influence the revision, to the need for better This
requirement is subject to an This is true, although the same closure and practice now applic¬
thousands who are the investors public understanding of our busi¬
for
establishing
those
extremely limited exemption reasons
able
to
a
large percentage
of
®nd owners of capital in this coun¬ ness, to the need for
study .of making it unnecessary to deliver standards
exist,
regardless
of
American business. It would alsn
try to activate the thermostat. The business situations "Which will re¬
prospectuses in some cases where whether the corporation decides eliminate all duplication of "regis¬
demand for things destroyed or quire capital, and to the need for
the sale occurs as the result of a to become subject to the Act and
tration" between the two Acts.
deferred by .war and for things creating the widest possible circle
customer's unsolicited order. This give its stockholders an exchange
to replace those which have worn of customers who have confidence
These are a few of the problems
requirement imposes a heavy and market or to stand clear of the
nut or become obsolete during the in us.
and some guesses at some of the
quite unnecessary burden and the Act, even though that will prevent
years of war is both a reason for
solutions.
These
problems
are
exception is both ambiguous and its stockholders from having a
Acts Created Some Unsolved
needing more capital: and an in¬
yours and the final solutions can
impossible to observe fully in public as well as a private market.
Problems
fluence which will bring owners
reflect your thoughts and
sug¬
transactions which take place on
The peculiar and illogical re¬
<of capital into the search for in¬
While I do not think that the
gestions. Don't fear to tread where
the floors of exchanges.
sult is that, although a large part
vestment.
Whether the recogni¬ Securities Acts will prevent our
others have rushed in.
the
Exchange
Act and its
Revisions of the Securities Act of
tion that there is work for capital doing the work which I believe
I have the greatest confidence
regulations are devoted to the
to reduce the period during which
to do, and
gather profit in the we will be called upon to do,
that all branches of our business
prospectuses must be delivered by objective of making the public
execution, will outweigh the fear those Acts have created some as
face
an
enormous
demand for
market on exchanges the best pos¬
of atomic
doom, vetoes and the yet unsolved problems which it dealers^ from one year to a few
their services. I am equally con¬
months, and to correct the present sible place to buy and sell securi¬
boasts and falsehoods of the veto¬
fident
that the Securities Acts
might be appropriate to consider.
uncertainties with regard to de¬ ties, the other provisions with
Under the Securities Act the
es, j d0 not know. The market
furnish no excuse for non-per¬
respect to what securities may be
will
record
which
weighs the primary objective is to insure that livery of prospectuses in connec¬
formance of those services. Final¬
tion with transactions
made on bought and sold on exchanges
heavier.
customers have reliable informa¬
ly,
it
is reassuring to
know
brokerage orders, are clearly de¬ tend to reduce severely the avail¬
that
there
is at least a large
Assuming only the now hidden tion upon which to base their de¬
sirable and are now under dis¬ ability of such markets to buyers
element of confidence, a peek into cisions whether or not to buy
roomful of young, energetic and
and
sellers.
Under the present
cussion.
the
| future
indicates to me that securities which are being pub¬
situation, any registered
dealer open-minded men, hard at work
our
The Margin Trading Restrictions
industry will be called upon licly offered. However, the Act
in our business, who will be ready
The
Securities Exchange Act may set himself up as the market
during the next few years to per¬ tends in two ways to insulate
form all three of its functions
has
created
a
few substantial place in any security; but an ex¬ to take over when those now in
upon customers from information prior
a

greater scale

Unly time

can

than

ever

tell whether

World affairs will

before.
or

permit that




not

con¬

to

making a purchase. The vol¬
of information supplied by

ume

the

registration

process

(as

in¬

able

don't

one

of "if it is not important

clutter

the

corporation has

such

buyers

change,

no

should

part and

have

some

which is the most

problems requiring solution which
and therefore the
should be mentioned.
That Act grants to the Federal regulated market

most

easily

heavily

in the world,

ies

go

to

money

charge run
to be

out of energy or cease

adaptable.

(842)

THE

COMMERCIAL & FINANCIAL CHRONICLE

Securities
•

A.

B.

C.

Vending Corp., New York

(9/11-15)

Now

Registration

INDICATES ADDITIONS SINCE PREVIOUS ISSUE

lative preferred stock

June 30 filed 145,000 shares ($1 par) common.
Under¬
writer—Reynolds & Co., New York. Price by amend¬
ment.
Proceeds—Of the total, 120,000 shares are being

in

and div.

(par $25).

Price—$25

per

share

Underwriters—Glore,, Forgan & Co.,

and William
Blair
Co., both of Chicago. Offering—Shares
initially will
offered for subscription to stockholders
of
record
Sept. 3 on basis of one

&

Underwriter—Grubbs, Scott &.Co;, Pittsburgh.

Working capital, expansion and rehabilitation of facili¬

be

ties.

sold

by stockholders and the balance by the company.
The company will use proceeds for
organizational pur¬
poses, which includes the merger of Berlo
Vending Co.,
Philadelphia, and Sanitary Automatic Candy Corp., New

York.

Name

formerly American Vending Machine Corp.

Acme Electric Corp.,
Cuba, N. Y.
June 26 filed 123,246 shares
($1

par)

(9/10)
common

stock.

Underwriters—Herrick, Waddell
Colony Corp.
t

share.

& Co., Inc., and First
Offering—To be offered publicly at $5

Proceeds—Company will

receive proceeds from
the sale of 58,880 shares and four
selling stockholders
the proceeds from the sale of
64,366 shares. Company
also will receive proceeds from the sale
of

20,000 war¬
stock to underwriters at an aggregate

rants for common

price of $2,000. Net proceeds will be used to
pay current
bank loans and for
working capital.
•

Alaska

Gold

&

Metals

Co., Ketchikan, Alaska
Aug. 20 (letter of notification) 150,000 shares of
$1 par
common.
To be sold to a
group of individuals to whom
the company has leased its
mining property. The shares

will be issued in consideration
for the expenditure
Jby
the group of
$100,000 in exploration and development of
the company's
property. No underwriting. For
explora¬
tion and development of

mining property.

American

Telephone & Telegraph Co., New York
Aug. 15 filed 2,800,000 shares
($100 par) capital stock.
Underwriting—No underwriting.
Offering—Shares will
be offered to
employees of A. T. & T. and those of 38
subsidiaries, with the exception of officers, at approxi¬
mately $20 below the market price.

Payments are to be
made in instalments at
rate of $5 per share
per month,
beginning December, 1947. Proceeds—To finance
con¬

Brayton

Co. (jointly), and W. C.
Langley & Co. and The
First Boston Corp.
(jointly). Offering—Price to public
by amendment. Bids are
expected to be advertised some
time in September.

Atlantic City
March 19 filed

(N. J.,) Electric Co.
522,416 shares ($10 par)
common, being
offered by American Gas
& Electric Co.
Underwriters—
To be determined
by competitive bidding. ProceedsOffering is part of American's
plan to dispose of its
holdings of 1,150,000
outstanding shares of Atlantic City.
The shares
remaining after the public offering will be
distributed as dividends on
American's common stock.
Bids-—Bids for the
purchase of the stock submitted
July
22 were rejected. A
joint bid by The First Boston
Corp.;
Shields & Co.; Drexel &
Co., and White, Weld & Co. of
$17.68 per share and a
joint bid by Dillon, Read & Co.

Inc., and Smith, Barney & Co. of
$16.30

submitted.

per share were

•

Atlantic Gas Co.,
Aug. 22 (letter of

Savannah, Ga.
notification) 22,400 shares ($5

held.

jl*

■

Underwriters —Clement A. Evans &
Co., Inc.;
Courts & Co.; The
Robinson-Humphrey Co.; Milhous,
Martin &
Co., and J. H. Hilsman &
Co., all of Atlanta,
Ga.; Johnson, Lane, Space &
Co. and Varnadoe-Chisholm &
Co., both of Savannah, and Putnam &
Co., of
Hartford, Conn. Underwriting Discount
50 cents
—

share. For
payment of indebtedness and
to
of the cost of its
expansion and
•

per

defray part

improvement

Atlas

program.

Educational Film Co., Oak
Park, III.
(letter of notification)
50,000 shares ($1 par)
Price, $1 a share. No
underwriting. To be
offered to stockholders
of the
company. For working
capital.
Aug. 18

common.

f

»

Barium Steel

Price—$5

None.

^iL^^P'000'?00
due 1962, with

15-year sinking fund debentures,
non-detachable subscription
warrants for
purchase of cornmon
stock.
Underwriter
Name by
amendment.
Price by
amendment. Proceeds—For
*

*—

ment of loans
•

and for other
corporate purposes.

Barrett

Machine Tool
Aug. 19 (letter of

Co.,

Meadville,

notification) 6,000 shares

pay¬

Pa.

of 6% cumu-

Financing

*

mined

additions.

.

Ont.

Bids—Bids
up

to

noon

both

of

Shares

FIRST BOSTON
•CORPORATION
Boston

New York
Chicago and other

Pittsburgh

^




cities

The

property

for

purchase

of

bonds

will be

Sept. 9 at company's office, Room

New

York. Price—By amendment. Proceedsbeing sold by a stockholder. Twin Coach Co.,

are

Kent, O., which will receive all proceeds.
Drackett Co., Cincinnati

.

'

April 28 filed 14,300 ($1 par) common shares. Under¬
writer—Van Alstyne, Noel & Co.
Proceeds—Stock ii
being sold by Harry R. Drackett, President (6,929
shares)

and

Charles

M.

Drackett, .7,371

amendment.

shares). Price

*

•

•

,

,

.

—

By
■

Duquesne Light Co., Pittsburgh, Pa. (9/9)
yAug, 1 filed $75,000,000 30-year first mortgage bonds.

Underwriting—To be determined by competitive - bid¬
ding. Probable bidders include: Kuhn, Loeb & Co. and
Smith, Barney & Co. (jointly); Halsey, Stuart & Co. Inc.;

Aug. 18 filed 700,000 shares
($1 par) common. Under¬
& Co., Detroit.
Price— $1
share. Proceeds—To
purchase mining equipment and
for working capital.
Business—Mining.
'

The First Boston
Corp.
Proceedsn-To redeem $70,000,000 of first
mortgage 3V2% bonds at 103%. The balance
will be added to
general fuhds to pay part of the cost
of new construction. Bids—It is

Central Soya Co.,
Inc., Fort Wayne. ML..'
Aug. 21, 1946, filed 90,000: shares
(no' par)' common.
Underwriter—None. Offering—Shares

be opened

writer—Davis, Hunter, Scott
a

initially will be
subscription to common stockholders at
share for each 7%
shares held. Unsubscribed
shares will be sold to
underwriters.
Price by amend¬
ment.
offered
rate of

for

one

Proceeds—Working capital,

itely postponed.

etc. Offering indefin¬

•

expected that bids will

Sept. 9.

»•

..

.

>■>

>■,

Duraloy Co., Scottdale, Pa,
a*,.
March 12 (letter of
notification) 25,000 shares ($1 par)
-

common

on

common

for

behalf of the issuer,- 12,500 shares ($1 par)
the account of Thomas R.
Heyward, Jr.,
12,500 shares ($1 par) common for the account of
Mrs. Thomas R. Hay
Ward, Jr. ? Price—At market (ap¬
proximately $3.25 per share).
Underwriter—Johnson
and

Century Food Markets Co.,
Youngstown, O.
Aug. 20 (letter of notification) 26,800 shares

8c Johson,
-Pittsburgh, Pa., and The
Corp., Cleveland. The company will

common and

for

($2.50 par)

8,400 shares ($20 par) 5% cumulative
sink¬
ing fund preferred stock.
Price, $25 per unit
Of

one

the

share of preferred and
total common to be

offered

officers
retail

to

key employees at

and

licensed

consisting

two

shares of

offered, $25,000

dealers.

par.

To

To

be

capital,

are

sold

establish

outlets, to purchase equipment

Claude

common.

and

to

be

through

additional

for

working

Neon, Inc., New York

writing—-None.
subscription to

share

for

each

Under¬
Offering—Shares will be offered for
common stockholders
on
basis of one
10 shares held.
Price by amendment.

Proceeds—Towards

cost

of

leases.

additional

interests

in

oil

Under¬

writers—Harriman Ripley &
Co., and Lazard Freres &
Price by amendment.
Proceeds
sold by Corning Glass

—The shares are
being
Works,
New York, and
represent 88.8% of the total
outstanding
common of the
company.
Offering indefinitely post¬
poned.
W

Commonwealth Investment Co., San
Francisco

stock.

an

unspecified amount of

common

capital

Underwriter—North American Securities
Co., San
Francisco, is the general distributor.
Price—Based
on

Proceeds—For investment.

at par to customers, officers and
employees of
pany. Proceeds — For corporated
purposes

modernization

Company expects
Sept. 22.

to

—

advertise

Public
for

utility.

bids

to

be

the com¬
including

and improvement of the manufacturing
plant and machinery and eauiDment.

Empire Projector Corp., New York (9/2-5)
j
21 (letter of notification) 80,000 shares ($1 par)
behalf of the
company, and 15,000 shares ($1

Aug.

common on

par) common on behalf of officers and stockholders. The
80.000 shares will be sold at
$3 a share. The 15,000 shares
will be sold to L. D.
Sherman & Co., New York, the

share.

The

Bids

—

opened

Continental Casualty
Co., Chicago (9/18)
Aug. 15 filed 100,000 shares
($10 par) capital stock.

will

company

working capital.
Federal

use

its proceeds to

increase

(

Electric Productg Co., Newark, N. JFeb. 26, filed 150,000 shares
($1 par) eommori class A.
Underwriter—E. F. Gillespie & Co., Inc., New York.
Price—$7.25 a share.
The registration states princi¬
pal stockholder has granted the underwriters an option
to purchase 45,000 shares of
class B C$1 par) common
at $7.25 a share, exercisable for
a period of three years.
Proceeds—Proceeds of approximately $870,000, together
with $755,000 of other
bonds, will be used to repay tha

;

•
Consumers Power Co.,
Jackson, Mich. (9/22)
Aug. 22 filed $25,000,000
30-year first mortgage bonds.
Underwriting—To be determined
by competitive bid¬
ding. Probable bidders include:
Morgan Stanley & Co.;
Halsey, Stuart & Co. Inc.; Lehman
Brothers; White, Weld
& Co.; W. C.
Langley & Co. Proceeds—To finance ex¬

Business

proceeds

Edelbrew Brewery, Inc.,
Brooklyn, N. Y.
31,1946, filed 5,000 shares ($100 par) 5% non-cumul
preferred. Underwriters—None.
Offering—To be offered

—

program.

Cleveland

capital. •'

Conlon-Moore Corp.,
Chicago (10/1)
July 25 filed $800,000 10-year first
mortgage 4%% sink¬
ing fund bonds.
Underwriters
Illinois Securities
Co.,
Joliet, 111., and Mullaney, Ross &
Co., Chicago. PricePar.
Proceeds—To pay off indebtedness
and to finance

pansion

its

principal underwriter, at 60 cents a share. The under¬
writing discount for 80,000 shares will be 50 cents a

Cohart Refractories
Co., Louisville, Ky.
Mar. 28 filed
182,520 shares ($5 par) common.

Aug. 11 filed

First
use

Dec.

©

March 28 filed 226,454 shares
($1 par) common.

working

expansion of business.

The

Probable bidders:

Divco Corp., Detroit
April 30 filed 34,963 shares ($1 par) common. Under¬
writers—Reynolds & Co. and Laurence M, Marks & Co.,

a

.

refunding mortgage

1702, 60 Broadway, New York.

Under¬

Carshaw Porcupine Gold
Mines, Ltd., Windsor,

(9/9)

Underwriting—To be deter¬

by competitive bidding.

received

writer—No underwriters.
Offering — To the public at
$1 a share in Canadian funds.

;

Detroit

Corp.; Halsey, Stuart & Co. Inc.; Coffip &
Burr; Spencer Trask & Co.; Dillon, Read & Co. Inc.
Proceeds—To redeem outstanding
mortgage bonds, seriea
"F," due 1965, to repay bank loans, and for

Porcuplna Gold Minos, Ltd., of
Toronto,

variety
connection with
exploration, sinking of
shafts, diamond drilling and
working capital.

Co.,

First Boston

proceeds to redeem $2,-

Proceeds—For

Edison

bonds, series "I," due 1982.

Ontario

of purposes in

Detroit

;

Proceeds

common.

/

9,

June 27 filed $60,000,000 of general

65,000 shares of common, will receive
warrants to pur¬
chase 90,394 shares of the
offering. It also will purchase
any shares not acquired by other
stockholders.

1946, filed 400,000 shares of

expenses.

Inc., L. I. City, N. Y.
1946, filed 300,000 shares ($5 par)
common.
Underwriters—First Boston Corp., New Xork.
Puce m
amendment.
Proceeds—Go to Joseph Levy,
Presidtai
selling stockholders. Offering date indefinite.
Aug.

Co.,
Washington Railway's outstanding

use

& Associates, Inc.,
Wash., D. C,
250 shares ($100
par)
No
underwriting. For
*

Crawford Clothes,

two shares for each share held.
The North American
of 50,197 of

—Washington Railway will
800,000 of bank loan notes.

(H. J.)

19

^

Offering — The shares are
being offered by Washington
Railway & Electric Co. to
its common stockholders
at $20 a share in the ratio
of
holder

Proceeds

(letter of notification)
preferred.
Price, $100 a share.

(N. Y.) Union Gas Co.
May 3, 1946 filed 70,000 shares of cumu.
preferred stock
($100 par). Underwriters—To be filed
by amendment.
Bids Rejected—Company
July 23, 1946, rejected two
bids received for the stock.
Blyth & Co., Inc., and F. S.
Moseley & Co. and associates submitted a bid of 100.06
for a 4.30% dividend.
Harriman Ripley & Co. bid 100.779
for a 4.40% dividend.
Indefinitely postponed.
Capital Transit Co., Washington
Aug. 11 filed 120,000 shares ($100
par) common. Under¬
writing — No underwriting.

June 24,

Corson

Aug.

Brooklyn

market price.

Corporate and Public

~©

operating

Proceeds—For additional
working capital.

public.

Rights expire Sept. 17. Price by amendment.
capital stock and surplus accounts. -

—For its

unit, consisting

per

new share for each
five
shares
Unsubscribed shares will be offered to the

held.

Mo.

Brockway (Pa.) Glass Co., Inc.
Aug. U (letter of notification) 5,000 shares of 5% cumu¬
lative preferred (par
$50). Price—$50. Underwriters—

Co., both of New York.

Corp., New York

Robertson,

Louis, Mo.
working capital.

of

par)
To be offered to
common stockholders at
$8.50
per unit on the basis of
one share for each
five shares

common.

Inc.,

Underwriter—White and Co., St.
For expansion of operating facilities and for

Carscor

&

Service,

share of each.

one

struction programs.

American Water Works
Co., Inc., N. Y.
March 30, 1946 filed
2,343,105 shs. of common (par $5)
plus an additional number determinable
only after the
results of competitive
bidding are known. Underwriters
—To be filed by amendment.
Probable bidders include
Dillon, Read & Co. Inc., White, Weld &
Co., and Shields

Flying

March 24 (letter of notification)
50,000 shares ($1 par)
27% cent cumulative, convertible preferred and
50,006
shares (10c par) common.
of

Thursday, August
28,1947

BROKERS

DEALERS

I

I

34

^

UNDERWRITERS

35

(843)
^

COMMERCIAL &

THE

-

Number 4624

166

Volume

NEW ISSUE CALENDAR
August 29, 1947

Common
September 2, 1947

'

Common
-Income Notes

Projector Corp
Woodmore-Drake Oil Corp

Empire

Noon

& Omaha
Equip. Trust Ctfs.
Chlorine Products Corp.__
Preferred

'

copters and equipment and

Co. Inc., Buffalo
Debentures
Pacific.Finance Corp
—Common
September 8, 1947
Illinois-Rockford Corp. —.«!
-.Common
McPhail Candy Corp.—
Pref. and Common
September 9, 1947
Detroit Edison Co. (noon)—
Bonds Duquesne Light Co
Bonds
General Telephone Corp.— _______—..—Preferred
September 10, 1947
"

Liberty Loan

4

Electric Corp.
—:„.ii;„Common
Gas Transmission Co.__Bonds and Pref.
September 11, 1947

Acme

Tennessee

•

Public Service Co._—- ..Bonds

Gas &

San Diego

Electric Co

Hooker

;

England Telephone & Telegraph
October 1, 1947

New

Coulon-Moore Corp.
October 21,
Pacific Telegraph &

balance of $34,000 of

Bonds

—

a

Aug. 1
class A

*

Debentures

Miami, Fla.

N. Y.

(letter of notification) 100,000 shares ($1 par)
Price—$3 a share. Underwriter—Bat-

kin, Jacobs & Co., New York. To purchase new machines
and equipment, to pay off some current liabilities and
to add to working capital.

Corp., New York

(9/9)

($50 par) cumulative pre¬
unspecified amount of common also was
registered for conversion privilege of preferred. Under¬
writers—Paine, Webber, Jackson & Curtis, and Stone &
Webster Securities Corp., both of New York, and Mitchum, Tully & Co., San Francisco. Price by amendment.
Proceeds—To finance construction programs of its 30subsidiary telephone companies operating in 17 states.

Aug. 19 filed ,200,000 shares
ferred.

An

Qfonsdor Taxtll* Corp.,

Now York

Aug. 28, 1946, filed 355,000 shs. ($1 par) common, of
which 55,000 shs. are reserved for issuance upon the
exercise of stock

purchase warrants.

Underwriter—Van

Alatyne, Noel & Co.
Offering—The 300.000 shares arc
IcsUed and outstanding and being sold for the account
of certain stockholders.

Company has also

Issued 55,000

at
1,
1040, common stock of the company at $11 a share. Price
by amendment Offering temporarily postponed.
stock purchase warrants to the selling stockholders
10 cents a share entitling them to purchase up to Aug.

Angeles
Aug. U filed 249,972 shares ($1 par) capital stock.
Underwriter
Fewel & Co., Los Angeles. Offering —
Shares will be offered to stockholders at $2 a share in
the ratio of one new share for each two now held. Un¬
subscribed shares will be offered publicity at $2 a share.
The underwriters will receive a commission of 25 cents
a share. Proceeds-^-For business expansion and to reduce
Great Western Biscuit Co., Los

—

short term indebtedness.
•

Griffith-Consumers

Aug. 25

(letter

Co.,

Washington, D. C.
5,000 shares ($50 par)

of notification)

series A 5% cumulative preferred.

To be offered to stockholders.

Price—$50 a share.

No underwriting.

For

expansion.

Grolier Society, Inc., New York
April 2, 1947 (by amendment) 170,000 shares of $1 par
common stock. Underwriters—Riter & Co. and Hemphill,
Noyes & Co. Offering—Underwriters will purchase from
.,

the

company 70,000 shares and from Fred P.
J. C. Graham, Jr., 100,000 shares of issued

standing

common.

Proceeds—For

Murphy

and out¬
reduction of bank

loans.

Illinois-Rockford Corp., Chicago

1947.

Proceeds for construction program.




Falco

LI

being
stock

holdings
regis¬
Manufacturing

Stickley Bros. Institu¬
corporations.

rations, and the Luce Corp. and
tional Furniture Co., both Michigan

Inglewood Gasoline Co., Beverly Hills
(letter of notification) 100,414.8 shares ($1
capital stock. Price—$1 a share. To be offered to
holders. ^ Unsubscribed shares to be offered publicly
through Bennett & Co., Hollywood. To purchase equip¬
ment, liquidate indebtedness, and for working
An amended application may be filed in near future.

par)
stock¬

capital.

Dubuque, Iowa
first mortgage bonds, due
($3.50 par) capital stock.
Underwriters—To be determined by competitive bid¬
ding.
Probable bidders:
Lehman Brothers, Goldman,
Sachs & Co. and The First Boston Corp.
(jointly);
Halsey, Stuart & Co. Inc. (bond only); Harriman Ripley
& Co., and Dillon, Read & Co. Inc. (stock only).
Pro¬
Interstate

Power Co.,

May 13 filed $19,400,000 of
1977, and 3,000,000 shares

debt retirement,
working capital.

ceeds—For
and for

Iowa

Public Service

finance new

construction

Co. (9/16)

bonds, due 1977, and
Underwriters — To be
sale of the
Co. Inc.; Kid¬
der, Peabody & Co. and Blyth & Co., Inc. (jointly); The
First Boston Corp.; A. C. Allyn & Co.; Harriman Ripley

Aug. 6 filed

$3,500,000 of 1st mtge.

109,866 shs. ($15 par) common.
determined by competitive bidding for the
bonds. Probable bidders: Halsey, Stuart &

(jointly). The
stockholders
at the rate of one new share for each five held.
Unsub¬
scribed to Sioux City Gas & Electric Co. Proceeds—For
construction and expansion of system. Bids—Bids for
purchase of securities expected about Sept. 16.
and Equitable Securities Corp.
common will be offered to the company's

&

Co.,

(Pa.) Glass Co.
of notification) 420 shares of 7% cumula¬
tive preferred stock.
Price—$105. Underwriter—Mc¬
Laughlin, MacAfee & Co., Pittsburgh. Working
Kentucky Utilities Co., Lexington, Ky.
May 9 filed 130,000 shares ($100 par) cumulative pre¬
Jeannette

Aug. 4 (letter

capital.

ferred.

Underwriters—To be

determined by competitive
that the company has
First Boston Corp.,

bidding. It was announced July 25
instituted conversations with The
Lehman

Brothers and

Lazard Freres Co.

(jointly) toward

Offering—Preferred stock ini¬
tially will be offered in exchange for outstanding ($100
par) 6% preferred and ($50 par) junior preferred. The
basis of exchange will be one share of new preferred
for each share of 6% preferred and one share of new
preferred for each two shares of junior preferred. Shares

underwriting the

stock.

preferred not
competitive bidding.
of

new

will be sold at
Proceeds—Proceeds from the sale

issued in exchange

preferred will be used

to redeem

unexchanged
stock

preferred. Bids—Bids for purchase of
advertised for July 14 postponed.
Koch Chemical Co., Winona, Minn.
July 22 (letter of notification) 60,000 shares ($1
shares of old

shares ($2 par)
Underwriter—Birnsold on behalf of

Shares being

New York.
two stockholders.

Under¬

Manhattan Coil Corp.,

Atlanta, Ga.

$500,000 5% serial debentures, due 19491957; 12,000 shares ($25 par) 5^% cumulative converti¬
ble preferred and 85,000 shares ($1 par) common.
Un¬
derwriter—Kirchofer & Arnold, Inc., Raleigh, N. C. Price
—The debentures at 102.507, while the preferred shares
will be offered at par and the common shares at $4
each.
Proceeds—To retire bank indebtedness and to
finance purchase of machinery and other plant equip¬

May 20 filed

ment.

Manontqueb

Explorations, Ltd.,

Toronto, Can*

April 10 filed 300,000 shares ($1 par) common.
writer—F. H. Winter & Co. Price—40
Proceeds—For exploration and

Under¬

cents a share.
development of mining

Business—Mining.
(J. W.) Inc., Brooklyn, N. Y.
Feb. 28 filed 150,000 shares ($1 par) common. Under¬
writer—Burr & Co., Inc., New York. Price by amend¬
ment. Proceeds—Of the total, 100,000 shares are being
claims.

Mays

sold by seven stockholders. The
are being sold by the company,

remaining 50,000 shares
which will use its pro¬

general corporate purposes.
McCormick & Co., Inc., Baltimore, Md.
Aug. 13 (letter of notification) 1,400 shares
5% cumulative preferred. Price—$100 a share.

ceeds for

($100 par)
No un¬

capital.
(9/8-12)
July 25 filed 100,000 shares ($10 par) 5V2% cumulative
convertible preferred and 200,000 shares ($1 par) com¬
Underwriters—Brailsford & Co., and Shillinglaw,

derwriting.

additional working

For

McPhail

Bolger & Co., Chicago.
and $6 a common share.
ceive
use

proceeds from the

it to pay

Chicago

Candy Corp.,

mon.

— $10 a preferred share
Proceeds — Company will re¬
sale of preferred only and will

Price

off bank loans,

working capital.
Russell McPhail,

buy new

equipment and for

stock is being sold

The common

by

President.
Messenger Corp., Auburn, Ind.
Aug. 12 (letter of notification) $200,000 3*/2%
debentures,
due 1948-1961.
Underwriters—The First
Trust Co., Lincoln, Neb.; Cruttenden & Co., Chicago.

serial

Proceeds—For
machinery

Morris

additions and

improvements, purchase of

equipment.
Plan Corp. of America, N.

and

Y.

Underwriter—East¬
Price by amendment.

filed $3,000,000 debentures.
man, Dillon & Co., New York.
Proceeds—To retire outstanding bank

Mar. 31

Musicraft
Aug. 15

Records, Inc., New

filed 317,259

derwriter—To be

shares ($1

sold through

loans.
York

par) capital stock.

brokers and

Un¬

other agents.

total will be offered publicly
at $2.50 per share; 165,259 shares are reserved for issu¬
ance when, as and if stock purchase warrants issued and
to be issued are exercised, and 52,000 shares are re¬
served for issuance if certain loans having conversion
features shall be converted into shares of capital stock.
The reserved shares will not be underwritten. Proceeds
Offering—100,000 of the

—For

general corporate

purposes.

Pittsburgh,
Aug. 5 fiied 180,000 shares ($5 par) capital stock.
Un¬
derwriter—The First Boston Corp., New York. Offer¬
ing—Stockholders of record Aug. 25 are given the right
subscribe at rate of nine shares for each 11 shares
Rights expire at 10 a.m. Sept. 29.
Unsubscribed
will be offered publicly through the underwriters.
National Union
Pa.
(9/29)

Fire Insurance

Co. of

to

held.

shares

par)

Inc.,.Little Falls,

(letter of notification) 5,000
To be sold at market.

baum & Co.,

Chicago.

notes
being regis¬
expansion of

Y■

N.

(9/8-12)

July 7

Underwriting—None.
Manufacturing Co.,

business.

Price—$9.25 a share.
Proceeds—The shares are
sold by four stockholders and represent part of the
the seUers will receive in exchange for their
of four furniture companies to be merged with the
trant. The merging companies are Toccoa
Co. and Stickley Brothers, Inc., both Illinois corpo¬

of new

Hajoca Corp., Philadelphia (8/29)
6,987 shares of common
stock (par $1).
Price—$35 per share. Underwriting—
None, Holders of common stock of record Aug. 29 will
be given the
right to subscribe for the stock in the ratio
?L°-ne new for each 10 shares held. Rights expire Oet. 1,

Aug. 4 (letter of notification)

tered and being

common.

July 24 filed 120,000 shares ($1 par) common.
writers—Brailsford & Co., and Straus & Blosser,

notes issued without
reoffered). Operation and

(inclusive of $63,700

July 31

common.

General Telephone

Probable bid¬

Inc.; The

Inc., Buffalo (9/4)
of notification) $250,000 debenture

Liberty Loan Co.,

Aug. 26 (letter

construction expenditures. Net pro¬
of common will be applied for re¬
demption of 5% cumulative convertible preferred stock
not converted into common prior to the redemption
date. .The balance will be added to treasury funds.
Company has asked the SEC to defer action on its fi¬
nancing program because of present market conditions.

shares of $100 par cumulative pre¬
ferred. Underwriters—Names to be filed by amendment.
Bids—No bids submitted for purchase of stock which was
advertised for sale on July 29. Company is negotiating
with underwriters for sale of the stock.

Inc.,

•

pany's treasury for

property mortgage, to pay off

Products,

bidding.

Business—Mining.

properties.

ceeds from the sale

June 24 filed 150,000

Rami

300,000 shares ($1 par) common treasury
stock.
Underwriting — To be supplied by amendment.
Price—50 cents a share. Proceeds—To develop mining

First Boston Corp.;
W. E. Hutton & Co.
Proceeds—Net proceeds from the
sale of preferred will be used to reimburse the com¬

ders include Blyth & Co.,

Canada

Ltd., Toronto,

Legend Gold Mines,
June 27 filed

III.

Illinois Power Co., Decatur,

Underwriters—By competitive

of $1,295,000 to Bankers Commericial Corp., New York, and for additional working capital.

Florida

will be used

current bank loans.

filed 200,000 shares ($50 par) cumu. pre¬
ferred stock and 966,870 shares (no par) common stock.

loans in the amount

Florida Power & Light Co.,

working capital and

to

June 17, 1946

1947

Telephone Co.-

par)

Hoppi-Copters,

^

Debs.

Co

(9/18)

—

Bonds

...

cumul. con¬
Co.,
added
in part to reduce

April 30 filed 60,000 shares ($25 par) 5%
vertible preferred. Underwriter—Paul H. Davis &
Chicago. Price—$25 per share. Proceeds—To be

Inc., Seattle, Wash.
notification) 16,800 shares ($1 par)
-common.
Price
$5 per share.
Underwriters — The
^Crawford Goodwin Co., Seattle, Wash. For working
^capital and general corporation expenses.
•

Stock

Co._
September 30, 1947

working capital.

Manufacturing Co., Inc.,
Iowa

Cedar Rapids,

heli¬

capital.

•>Aug. 22 (Lettei^,of

Common

Consumers Power

transaction. Proceeds for

Plant-Choate

La

Lay'(H. W.) & Co., Inc., Atlanta
Underwriter — Smith, Barney & Co.
April 18 filed 16,000 shares ($50 par) 5% cumulative
underwriter for purchase of common
convertible preferred and 15,000 shares ($1 par) com¬
npJTsubscribed for by the company's common stockhold- , mon.
Underwriter—Clement A. Evans & Co., Inc.,
ers.
Offering — The shares will be offered to common
Atlanta.
Offering—All but 3,000 shares of, the common
"stockholders of record Sept. 2 on the basis of one share
will be sold publicly at $6.50 a share. The preferred will
for.$ach five shares held. Rights expire Sept. 17. Price
be offered to the public at $50 a share.
The 3,000 shares
--By amendment. Proceeds—For general corporate pur¬
of common not sold publicly will be offered to company
poses including the financing of a portion of the com¬
officers and employees at $5 each.
Proceeds—For con¬
pany's .plant expansion program.
Business—Manufac¬ struction of new plants at Atlanta and Memphis, Tenn.
ture of chemical products.
v
Offering indefinitely postponed.

and Common
Common

Electrochemical Co
September 22, 1947

sold in private

will be principal

Common

September 18, 1947
Continental Casualty Co
Capital

and

preferred stock.

September 16, 1947
Iowa

of notification) 75,000 shares (33par)
warrants to purchase 75,000 shares of
common. Price, $2.75 per common share. The warrants
will be soli at 75 cents per warrant of which the under¬
writing discount will amount to 74 cents, netting the
company one cent per warrant. There will be no under¬
writing for the sale of common. The warrants will be

(by amendment) filed 134,034 shares ($5
replacing original program (filed June 26) to
110,000 shares of cumulative, Series A (no par)

sell

Preferred

Monongahela Power Co..
Bonds and
Revere Racing Association Inc
—

Electrochemical Co.

Hooker

Kropp

common,

common

Common

Vending Corp.—
September 15, 1947

obligations, purchase

for working

Aug. 20

i

A. B. C.

•

Aug. 20 (letter

printing plant.

proceeds will be used to pay

September 4, 1947

To retire debt and
Forge Co., Chicago

Corp., Boston.

Helicopter Air Transport, Inc., Camden, N. J.
March 14 filed 270,000 shares of capital stock. Under¬
writer—Strauss Bros., Inc., New York. Underwriters may
withdraw as such. Price—$3.50 a share. Proceeds—Net

St. Paul Minneapolis
(CDT)——

Westvaco

acquire lithographing and

to

September 3, 1947
Chicago

Hall

Underwriter—H. P. Carver
for working capital.

Price—$5 a share.

common.

Lithographing Co., Topeka, Kansas
Aug. 22 (letter of notification) 2,000 shares of 5% cumu¬
lative
preferred ($100 par).
Price —$102 per unit.
Underwriters—Beecroft-Cole & Co. and The Columbian
Securities Corp., both of Topeka; and Prescott, Wright,
Snider Co., Kansas City, Mo. The underwriting discount
will amount to $4 per share. For working capital and
•

Haj oca Corp.

FINANCIAL CHRONICLE

(Continued on page

36)

,36

(844)

THE
(Continued from page 35)

Price

$25

Proceeds—To

share.

per

funds for investment

Old

Mar.

iiiea

31

amount

added

be

to

cumulative preferred and an unspecified number of

par)

shares into which the preferred is

common

Underwriters—F.

tiDie.

S.

Yantis

&

Co.,

($1

conver-

and

H.

M.

Byllesby & Co., both of Chicago. Price—At par. Proceeds
working capital.
Offering indefinitely
postponed.
—To be added to

Pacific

Finance

Corp.

of

California

Aug. 11 filed 150,000 shares ($10 par) common. Under¬
First Boston Corp., New York.
Price—By
•

Pac's

Enterprises,

Silver

Aug. 13

shares of preferred.

warrants

to be

are

warrant.

fund

New York.

sold to

the

underwriter at

Underwriter—Henry

P.

one

Pasco

Mining

Corp.

Gold

Montreal,

company.

a

tion

and

Price—500
development

Raleigh' Red

Soaen,
share.

Montreal,

Ltd.,

Toronto,

(letter of notification)
of

common

each

Red

which

exercise

upon

39,140
of

149,700 shares

shares

will

be

are

will be used tor

working capital.

Feb. 3 filed 25,000 shares
($100 par) 6% cumulative pre¬
ferred and 25,000 shares (no
par) common.

Underwriter

Martin

Rolph,

Price—The

company.
unit

consisting of

of

common.

Vice-President

and

director

stocks will be sold at
share of preferred and

one

Proceeds—To be used in

$105
one

of
per

share

organization of

business

Republic Pictures Corp.. New York

Registration originally filed July
31, 1946, covered 184,823
of
$1 cumulative
convertible preferred

end 277,231 shares
(50c
Grace & Co. as

($10 par)

par) common stock, with Sterling,
underwriters. Company decided to issue

454,465 shares of

common stock
only, which were to be
offered for
subscription to stockholders of record Sept.
5, 1946, to the extent of one share for each
five held.
Issue not to be

underwritten.

Reserve Insurance
Co., Chicago
Aug. 6 (letter of notification)
30,000 shares ($5 par)
common.
Price—$10 a share. Underwriting—Ray T. Haas,
Chicago. To augment existing capital and
surplus of
company.

Racing Association, Inc. (9/15)
July 29 filed 140,000 shares (no par) common.
Under¬
writer—Bonner & Bonner,
Inc., New York.
Price—$5.75
a share.
,
Proceeds—The shares are being sold by stock¬
holders who will receive all net
proceeds.
Russell
(F. C.)

Co., Cleveland
113,678 shares ($1 par) common. Under¬
writer—McDonald & Co.
Price—By amendment. Pro¬
ceeds—Shares are being sold
by stockholders who will

receive proceeds.

Salant
March

28

&

Salant, Inc., New York

filed

240,000

Underwriter—Eastman,
by amendment.

shares

($2

par) capital
Dillon & Co., New York.

Proceeds—Shares

are

stock
Price

being sold by 13

stockholders who will receive
nroceeds.

stock

mon

The

San Diego, Calif.

Aug

21 filed 300,000 shares
($10 par) common. Under¬
writing—To be determined
by competitive bidding.
Probable bidders included
Blyth & Co., Inc.;
White,
,Weld & Co. and
Shields & Co.
reimburse
to) ore

net

made.

proceeos

program

jointly.

treasury funds
It

Proceeds—To

for capital
expenditures here¬
use an amount
equal to such
in part, its 1947 construction

plans to

to

finance,
Business—Public utility.
Bids-Expected

opened Sept. 16.

Santa

Maria

Mines, Ltd., Toronto, Canada
Sh^eS ($1 Par) Capital St0ck-

^
,Damel>
^arm<*lan
funds).

po^cs,

Toronto.

Price—50

to be

Vn"

cents

Proceeds—For corporate
'

a

pur-1

Co-' Los Angeles
s

e

preferred.




arei5 ($5° stated value>

Company

also registered

an

convert-

unspecified

of

$i,

\ •

Inc., Los Angeles

\\

Underwriters

International

Inc., Detroit

/

Aug. 18 (letter of notification) 4,450 shares of preferred
and 11,125 shares of common.
Price,$10.a preferred
share and $1 a common share. To be sold
For working capital..

•

;

United

National

United

-

through sales¬

^

.

Insurance Co., Atlanta,

Aug. 25 (letter of notification)
common.
Price—$20 a share.
capitalize the company.

15,000 shares
No

Ga.

($10 par)

underwriting.

To
(1

Utilities

& Specialty Corp., Boston
75,000 shares ($10 par) 5% cumulative
convertible preferred.
Underwriter—Herrick, Waddell
l& Co., Inc., New York.
Price—$10 a share. The under¬

July

10

filed

writers will receive

For

commission of $1.50 per share.

a

In

addition, they will be granted warrants to purchase 50,000 shares of the

issuer's

at

common

$5

a

share.

Pro¬

ceeds—For additional working capital.
Utah Chemical & Carbon Co.
Dec. 20 filed $700,000 5%
15-year convertible debentures
,

due 1962, and 225,000 shares ($1 par) common. The state¬
ment also covers
112,000 shares of common reserved for
conversion

O.

of

the

debentures.

Underwriter—Carver &

Co., Inc., Boston.

Business—Manufacturer of aircraft and auUpon completion of financing com¬
pany will merge its wholly-owned
subsidiary, Clifford
Mfg. Co., Boston.
•
•

equipment

and for .working capital.
statement became effective June 28.

Registration

Vauze Dufault Mines, Ltd.,
Toronto, Canada
Mar. 31 filed 500,000 shares
($1 par) common.
Under¬

attached will be offered publicly.
shares will be reserved for conversion of

debentures.

Price—Debentures 98; common $3.75
Proceeds—For plant construction, purchase

share.

per
of

warrants

common

0|

sub«

-

men.

1967, and 272,500 shares of common (par $1). Underwriters—Lee Higginson Corp., and P. W. Brooks &
Co.,
Inc., New York. Offering—The debentures with com¬

writer—Name to be filed by amendment. Price—50 cents
share.
Proceeds—For general operating expenses.

"

a

•

Weber Showcase & Fixture Co., Inc.
Mar. 31 filed 108,763 shares
($5 par) common.

State Bond and

Mortgage Co., New Ulm, Minn.
Aug. 26 filed $1,000,000 of Series 1305
certificates; $1,-

through officers
sales

ing—Shares will be offered for .subscription to Weber's

subscription rights.

employees of the company and its
organization, headed by its sales manager,

and

selling face

Business—Issuing

amount certificates.

Strauss Fasteners Inc., New York
March 25 filed 25,000 shares of 60
cents cumulative
vertible preferred.
Underwriter—Floyd D. Cerf Co.

Chicago.

of

common

Inc.,

stockholders of Segal Lock
a share in the ratio

Inc., parent, at $9

one

share

of preferred

for

each 30 shares of Seeal
Unsubscribed shares of preferred will be
offered publicly at
$10 a share. Proceeds—For

held.

additional

working capital.
•

Talisman Mining and Leasing
Co., Spokane,
Wash.

mon.

and

(letter of notification) 500,000 shares of com¬
Price, 15 cents a share. To be sold
through officers
directors of the company. To retire current

liabili¬

ties and for general
mining expenses.

Tennessee

Gas

par)

new

construction and

Texas Co., New York
Aug. 14 filed an unspecified number of
$25) shares (maximum number, 2,248,932

common

shares).

(par
Un¬

Offering—Shares will be
offered at below the market
price for subscription to
stockholders.
Price by Amendment.
Proceeds—To be
added lo general funds for
corporate purposes.
•

Texas

Aug.

Electric Service
Co.,

loans.

Reported July 16 that the

^

:

Wisconsin Power & Light Co., Madison, Wis.
July 30 (by amendment) 10,000 shares of common stock
(par $10) to be sold by Middle West Corp. The original
statement filed May 21, 1946 covered 550,000 common
;

shares.
•

Woodmore-Drake Oil Corp., New York (9/2)
Aug. 22 (letter of notification) $150,000 series A income
participation 5% notes and 7,500 shares common stock
(no par).

Price—$100 per unit, consisting of five shares
$100 of notes. Underwriter—E. J. Drake,
Avenue, New York. Organization expenses,
liquidation of mortgages, purchase of properties ana
of

stock

535

and

Fifth

working capital.
-

Fort Worth

27 filed $7,000,000
30-year first mortgage bonds.
Underwriting—To be determined
by competitive bid¬
ding.
Probable bidders include:
Blyth & Co., Inc.;
Smith, Barney & Co., and
Kidder, Peabody & Co. (joint¬
ly); The First Boston Corp.;
Halsey, Stuart & Co. Inc.;
Hemphill, Noyes & Co., and Drexel & Co.
(jointly);
Glore, Forgan & Co., and W.
C.'Langley & Co. (jointly);
Harriman, Ripley & Co., and Stone & Webster Securities

Corp. (jointly); White, Weld &
Co., and Lazard Freres
& Co. (jointly).
Proceeds—To finance construction ex¬
penditures.
Business—Public utility. -/.L...
y.
,

Prospective Offerings

line

$7,500,000 of outstanding notes.

derwriters—No underwriting.

Proceeds—To retire preferred stock

Westvaco Chlorine Products
Corp. (9/3)
Aug. 18 filed 30,000 shares of $3.75 cumulative preferred
and 30,000 shares of
common, both without par value.
Underwriter—F. Eberstadt & Co., Inc., New York. Price
by amendment. Proceeds—Complete soda ash mining
facilites in Wyoming and construction of a soda ash
plant. *

cumula¬

Underwriters—Stone & Webster Secur¬
ities Corp., and
White, Weld & Co., New York. Price by
Proceeds—To finance

bank

_____

preferred.

amendment.

,

Transmission

Co.
(9/10)
Aug. 18 filed $40,000,000 of first
mortgage pipe
bonds, due 1967, and 100,000 shares ($100
tive

reduce

con¬

Offering—The shares initially will be offered

for subscription to
& Hardware Co.

to

present plans will be entirely changed.

Hermann T. Tucker.

and

stockholders. Certain shareholders have waived

common

and

Price—Series 1305 certificates,
$1,4)00 per $1,000 face amount
certificate; Series 1207-A cer¬
tificates, $957.60 per $1,000 face amount
certificate, and
Series 1217-A
certificates, $856.80 per $1,000 face amount
certificate. Proceeds for investment.

Under-

writers—Blair & Co., Inc. and Wm. R. Staats Co. Offer¬

,

915,200 of Series 1207-A certificates; and
$19,706,400 of
Series
1217-A
certificates. 4 Underwriting to be sold

repay

*

^a(9^U5)° *"aS ^ Electric Co.,

•
:

kaslo,

Aug. 18

filed

20

No

debentures, due

.

common

Revere

Aug.

to

Columbia

•
Standard-Thomson Corp., Dayton,
Aug. 27 filed $1,750,000 5% sinking fund

own

•hares

Ltd.,

a

Offering date

-

tomobile equipment.

Refrigerated Cargoes, Inc., New York

—John

Co.,

$3,950,000

amount

Underwriter—No

For additional working capital.

Mining

of

July 9 filed 1,000,000 shares ($o par) class A common.
underwriting.
Priee—$10 a share.
Proceeds—To purchase production facilities and
for
working capital.

de¬

contemplated that after Sept. 2 they

Charleston

payment

purchase of two notes issued by

Thomascolor

Any shares not purchased by stockholders
will be bought by Imperial Trust
Co., Ltd., of Montreal,
Can. To restore working
capital.

being

39,140 shares

of

offered

be

Proceeds—For

sidiary, Textron Southern Inc. in the
000,000 each, and for working capital.

stockholders.

$1.50

merged into the registrant. The
remaining 110,560 shares
are to be issued in
exchange for the outstanding com¬
mon of the two
companies being merged with the issuer.
No underwriting. Proceeds
from the sale of

to

filed

bank loan notes;

Southwest Lumber Mills, Inc.,
McNary, Ariz.
Aug., 11 (letter of notification) 40,000 shares ($1
par)
capital stock. Price—$7.50 a share. To be offered to

originally offered byPittsburgh and Red Rock

Bottling Co. of
Bottling Co. of Youngstown, both of which

debenture

per

28

amendment.

66,666

writer—Southeastern Securities Corp., Jacksonville.
working capital.

Can.

at

Providence, R. I.
300,000 shares ($25 par) 5%
convertible
preferred. Underwriters—Blair & Co., Inc., New
York
and Maxwell, Marshall & Co., Los
Angeles. Price
by

July 29 (letter of notification) 8,000 units consisting of
one share
($10 par) 6% cumulative preferred and one
share ($1 par) common.
Price—$12.50 per unit. Under¬

ol

($1 par)

sold

Textron Inc.,

Feb.

sinking

conversion

a

purchased. No un¬
derwriting. For organization of business and for
working
capital.

Fla.

warrants

Rock

for

par

cents

Of the common, 26,000 shares will
be sold
to
four officers and the balance will be
offered to
pur,
chasers of preferred on the basis of three
shares of
common for one share of preferred

indefinite.

maximum of

Dar\

preferred and 50,000 shares
(no
a preferred share and 60

Price—$25

common.

Southeastern Development Corp.,
Jacksonville,

June 9 filed 460,000 shares of
stock.
Underwriter—Mark
Daniels & Co., Toronto.
Price—25 cents a share.
Pro¬
ceeds—To finance diamond
drilling and land surveys.
•
Red Rock
Bottling Co. of Cleveland

Aug. 22

It is

common

cumulative

common.

Corp.

$300,000 of 5%
a

Texon, Inc., Russell, Mass.
(letter of notification) 8,000 shares
($25

5%

—

Proceeds—For explora¬
property.

Mines,

•

Aug. 25

Aug. 13 filed 200,000 shares ($1 par) common. Under¬
writers—Elmer J. Edwards and Van Tine, both of Seat¬
tle, Wash. Price — 50 cents a share. Proceeds
For
mining equipment, development work and for working
capital.

of mining

Lake

par

Price—$95

Slocan

Quebec,

director

Precision

debentures and

cents

underwriting.

Exploration Ltd., Montreal
Nov. 13, 1946, filed
100,000 shs. (500 par) capital stock.
B.

Y.)

will be offered to the public at not more than
$100.

Rocks

Underwriter—Robert

40

bentures.

Aug. 8 filed 333,333 shares of common, nominal value of
$1Underwriter—Mercer Hicks & Co., New York.
Price—30 cents a
share, Canadian funds. The under¬
writer receives a discount of
7% cents a share, Canadian
funds.
Proceeds—For exploration of
mining property.
Quebec

of

British

Ltd.,

Canada

(N.

Thursday, August
28,1947

issued

be

new

(letter of notification)

stockholders.

Co.,

For expansion.

Creek

convertible

shares

cent

Rosenfeld

common

privilege of

share.
Proceeds—Pro¬
ceeds, together with funds to be provided by a term bank
loan, will be used to discharge indebtedness to Domestic
Credit Corp.

Pan-American Export Corp.,
Newark, N. J.
Aug. 14 (letter of notification) 93,000 shares ($1
par)
Class A common and
23,250 warrants for purchase of
Class A common. Trice—$2,625
per common share and
(lper

CHRONICLE

ferred share and $10 a common

Proceeds—For working capital.

Inc., Seattle, Wash.
Aug. 20 (letter of notification) 3,860 shares ($1 par)
common and
19,300 shares of ($10 par) preferred. Price
—$51 per unit, consisting of one share of common and
five

to

FINANCIAL

Service Caster & Truck Corp., Albion, Mich.
April 10 filed 32,000 shares ($25 par) $1.40 convertible
preferred and 53,962 shares ($1 par) common.
Under¬
writer—Smith, Burris & Co., Chicago. Price—$25 a pre¬

(9/4)

writer—The

amendment.

&

upon exercise of the
preferred.
It also will sell
$1,250,000 of 4% subordinated notes, due 1951, to Mutual
Life Insurance Co., New York,
Underwriter—The First
Boston Corp., New York.
Offering—New preferred will
be issued in exchange for outstanding class A and B
Shares of new preferred not issued
preferred stocks.
in exchange will be offered publicly.
Price—For pub¬
lic offering to be supplied by amendment.
Proceeds—
To redeem old preferred and for working capital,

Distillery, Inc., Louisville, Ky.
shares ($20 par) 5% convertible

oU,000

of

conversion

cash

in securities.

Poindexter

COMMERCIAL

.

.

.

•

Alabama

Power

Co.
,

Aug. 26 reported company has under consideration the
issuance of $10,000,000 new
.mortgage bonds, to be sold
at competitive
bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; Morgan
Stanley & Co.; Drexel & Co.; Leh¬
man
Brothers, and Blyth & Co. Inc. (jointly); Harriman,
Ripley & Co.; Goldman, Sachs & Co.; Lazard Freres
& Co., and Equitable Securities
Corp. (jointly).
Ex¬
pected in October.

.

Chicago, St. Paul, Minn. & Omaha

(9/3)

Bids for the purchase of
$1,560,000 equipment trust cer¬
tificates to be dated Oct. 1, 1947 and due
$15,600 annually
Oct. 1, 1948-57 will be received
up to noon

(CDT) Sept.

3, at office of R. L. Williams, President, 400 West Madi¬
son
St., Chicago.
Probable bidders include Halsey*
Stuart
Bros.
•

&

&

Co.

Colorado

Bids

Inc.; Harris, Hall & Co.

(Inc.); Salomon

Hutzler.

will

be

&

Southern

received

Ry.

until

noon
(CDT) Sept. 4 W
205, 547 W. Jackson Boulevard, CnL
$244,858\from time to time
before Dec. 31, 1947 for
financing acquisition of thre®
diesel-electric switching
locomotives.^

company at Room

cago, for loan not to exceed

26 reported company
000 000 mortgage bonds

Aug

<10

and Equitable

contemplates issuance of
to be sold competitively.

•

plans sale of $3,000,000 bonds
Probable bidders include: Blyth &
Co., Inc.; Smith, Barney & Co., and Kidder, Peabody &
Co. (jointly); W. C. Langley & Co., and Glore, Forgan
& Co, (jointly): Halsey, Stuart & Co, Inc.; The First
Boston Corp.; Hemphill, Noyes & Co., and Drexel & Co.
(jointly); White, Weld & Co.; Lazard Freres & Co.,
and Harriman Ripley & Co.
(jointly).,

due Oct. 21.

•

•

Peabody Coal Co.

Aug.

22

stockholders
arrearages on

voted

initial issue of $20,000,000 first mortgage

an

A bonds to be dated Oct. 1,
to

be issued

1947

or

will not exceed $16,000,000.

Public

Wisconsin

Service

Corp.

$6,000,000 of bonds and $5,000,000 of common stock this
and next.

series
Initial amount
Proceeds will

later.

company

Aug. 26 company discussing a permanent financing pro¬
gram with the SEC which
contemplates the sale of

approved recapitalization plan
preferred will be eliminated and

whereby

asked the SEC for authority to issue
and sell competitively $7,000,000 30-year first mortgage
bonds and 40,000 shares ($100 par) cumulative preferred
stock
Probable bidders include W. C. Langley & Co.
and The First Boston Corp. (jointly); Lehman Brothers;
Harriman Ripley & Co. and Lazard Freres & Co. (jointly)
/bonds only); Glore, Forgan & Co. (bonds only); Halsey
Stuart & Co Inc. (bonds only). Blyth & Co. and Gold¬
man, Sachs & Co. (jointly); Merrill Lynch, Pierce, Fenner & Beane (bonds only); Kidder, Peabody & Co., and
White, Wdld & CcU (jointly). -Bids e!xp6cted about
Sept. 15.
•
■'«. .
• New England Telephone & Teleg. Co.
(9/30)

year

be used to .finance construction of three additional mines.
•

Potomac

Edison

United States Government,

Co.

Aug. 26 reported company contemplates sale of $2,500,000

State, Municipal

bonds and 30,000 shares (par $100) preferred.
Probable
bidders include The
First Boston
Corp., and W. C.

•

Southern

Aug,

Co.

the

21

directors

Commonwealth

of

Southern

&

stocks of Alabama Power

inc.

Co., Georgia Power

NEW

Co., Mississippi Power Co., Gulf Power Co. and Common¬

permission to issue
the proceeds would
be used to repay advances to company's parent, Amer¬
ican Telephone & Telegraph Co., which amounted to
I $32 100 000 on June 30. The borrowed money was used
application by the company for
$40 000,000 of debentures.
Most of
an

wealth's

in

Southern

Co.

intends

for the sale of

common

to be invested in the

make

River

Savannah

to

investments

Electric

Co.

our economy.
Certainly a healthy
foreign Trade based on a two-way
energies and initi¬
exchange of goods can contribute
ative of the individual has re¬
to our own prosperity and stabil¬
sulted in our unrivaled produc¬
ity. Today one man out of every
tivity. It is only by ever expand¬ 12
employed in this country makes
ing our productivity that we can
his living by producing things for
remain strong and free.

efforts to bring about
We have said

that

still

are

The fact that
solemn

below

•

YORK

•

CHICAGO

PITTSBURGH

whole, which

abundance,

is
in¬

and

pre-war

to

CLEVELAND

•

ST. LOUIS

•

FRANCISCO

SAN

•

keep

we

have

a

we

must

be

of
capacity.

to

will produce the results that

rope

the wheels

running

Coal from

one

purpose

far

a

in

industry

deter¬

tributions

the United States and

I

with

Increased coal from Germany
an

We have

essential factor.

is

now

un¬

the

con¬

our

be safely and wise¬

the

of

personally

and

expect,

that

sure

can

the health

is still urgently needed.

of the charter is

not and should not deter us from

right to

given from

ly

machinery to increase production

nation through

of its veto is blocking the

use

as

adequate

these things.

we

Europe

formerly

was

mined to do that.

the

BUFFALO

PHILADELPHIA

$10,000,000

U.S. Task in Promoting World Peace
(Continued from page 9)

•

stocks of its subsidiaries

coal in

release of the

BOSTON

.

application to the SEC

stock in order to raise

common

Co.

Blair

Corp. authorized the transfer to the Southern Co. of the
common

and

Corporate Securities

Langley & Co. (jointly).

Hampshire P. S. Commission announced

July 30 the New

Texas Power & Light Co.

early in October.

Telephone & Tele¬
graph Co. and help meet plant construction expenditures.
Registration with SEC expected about Sept. 20 with bids

11 company

Aug

•

to repay advances from the American

plans to
first of¬

Probable bidders: The
Harriman, Ripley & Co.; Morgan

Corp.;

Aug. 26 reported

com¬

The proceeds will'be used

Halsey, Stuart & Co. Inc.

Boston

Stanley & Co.
(10/21)

Commission authorized

P. U.

First

of

to sell $100,000,000 40-year debentures on a com¬
petitive basis. Probable bidders: Morgan Stanley & Co.;

Securities Corp. (jointly).

Directors are presently considering
40,000 shares convertible preferred to be
fered for subscription to stockholders.
Monongahela Power Co. (9/15)

Telephone & Telegraph Co.

26 California

for their construction programs.

Morgan Stanley &

purchase

n

(845).

CHRONICLE

pany

Manufacturing Co.
Nov
5 stockholders will vote on increasing authorized
canital from 1,000,000 shares common to 3,100,000 shares,
to consist of 100,000 shares preferred and 3,000,000 shares
issue

Pacific

Aug.

joy

common.

Probable bidders:

plant.

new

FINANCIAL

Halsey, Stuart & Co. Inc.
Bids for
debentures expected about Sept. 30.

include: Halsey, Stuart & Co.; Morgan
Stanley & Co.; Blyth & Co.; Lehman Brothers; Harri¬
dan Ripley & Co.; Goldman, Sachs & Co.; Lazard Freres
Co.,

a

&

Co.;

Probable bidders

&

COMMERCIAL

for

Co-

Georgia Power

•

THE

Number 4624

166

1947 HVolume

own

economy.

confident

am

of

standpoint

our

cooperative

that

spirit

that

exists among the 16 countries

conferring in Paris

a program can

increasing im¬ our pledge. I quote from the re¬ dertaken to encourage the devel¬ be worked out in which we can
the struggle ahead we
If
ports of basic materials to main¬ cent words of our representative opment of a peaceful Germany safely and wisely cooperate.
should
not
underestimate
our tain our
present level of produc¬ on the Security Council regarding under democratic institutions. We we are successful in working to¬
strength.
Our nation, with less tion.
the threat to peace from the ac¬ have offered our Allies a 40-year gether with these nations, it will
than 6%
of the people of the
not
be
long
before a healthy
Must Be Armed
tions of. three Balkan countries treaty to insure this objective.
world, has greater industrial pro¬
Western Europe will begin to re"The continued Recovery in Germany has lagged
And this lead^meno my second against Greece:
duction than the combined pro¬
failure of the Security Council to far behind the neighboring west¬ emerge. With expanding produc¬
duction of the rest of the world. factor. We mifst maintain a strong,
tion and
ern countries.
In
We need

export.

In facing

We

developed

have

system

a

well balanced

military establish¬

which
an
American ment to protect ourselves in co¬
worker can produce many times operation with other peaceful na¬
tions against military aggression.
more than in any other country.
For instance less than half a mil¬ The last war developed the over¬
through

produced powering strength of air power. A
last year 50% more coal than did strong air force is not only a
two million miners in Europe. means of defense, but it is the
Twenty per cent of our people only means of quick retaliation.
are engaged in agriculture.
This If powerful enough it can be a
small number has fed our people compelling restraint upon
those
here far better than anywhere with aggressive motivations.
In
else and yet there remained for this atomic age; there is no protec¬
export last yeai; more food ; than tion '; against retaliation ; • by air.
the exports of all the rest of the Our ability; to launch aii immedi¬
World put together. We must un¬ ate strong retaliation by air is
derstand the factors that have re¬ the
greatest possible deterrent
sulted in this remarkable achieve¬
against the use of military force
ment Jn productivity, cherish and
by others. Our peaceful intentions
expand them and let nothing in¬ are so clearly
understood the
terfere with
their
preservation world over that no man who has
lion

miners

American

opinion of the United States Gov¬
ernment preclude individual or
collective action by states willing
to act so long as they act in ac¬
cordance with the general pur¬

And yet we know peaceful purposes fears the mili¬
system all groups
tary strength of the United States.
within our country have not fared
His only fear is that the United
equitably in the fruits of our pro¬ States will not maintain a strong
ductivity and in the security of
enough military power to discour¬
their lives.
Greater security for
age aggressive intentions.
those who have the will to work

and

growth.

that under

our

important as, economic and
strength at home may
be to our own survival, in the
all we long run our hopes must rest on

.handicapped,,,,and more
equitable
'distribution
of
the
fruits of labor must be our con¬

or,.are

stant

goal.

must

retain

Yet
the

with

it

in¬

individual

But

military

development of

the

an

in the

take effective action cannot

effective

poses

spite of the food
shipped, the Ger¬
mans are living on a semi-starva¬
tion diet. Industrial production in
that

and principles of the United
'

'

-

,

1 ?

even

greater achieve¬

«

Relief

Must Afford Foreign

me
areas
of
their
domination.
With our increased understanding

of

economic

creased

forces

and

the

in¬

willingness of all groups

to work
together, there is no reason to
lack

y to

confidence in

our

abil-

achieve greater stability in




r

.

.

for the

economic and
of all

peoples."

Language
clearer
say

international
promotion of
social advancement

and to employ

machinery

or

/

-

could

stronger.

that we would

-

«

scarcely be
We did not

merely use our

Coal

production

38% -of

only

pre-war.

Ruhr

the

in

is

increasing world trade, a
prosperous economic

stable

and

order

west

be established.

can

You

men

interested

especially

are

the East.

It is

in

direct respon¬

our

sibility to help develop

a

peaceful
assist

stable life in Japan to

and
in

-

.

of the Pacific North¬

the

have

of the East.

recovery

similar

a

responsibility

We

in

democratic Ger¬
Korea.
The problems of China
taking steps
are
grave.
General -Wedemeyer
to
increase
production in Ger¬
of principles, which brings me to
and a group of experts are now
my fourth factor.
If we are to many to * establish a* decent life in China to report on the situamake it possible for other coun¬ fbr the 40 million Germans under
tries to join with us in the organi¬ oUr joint responsibility and to tion.^ There is no easy solution
but if we have clarity of under¬
zation of peace, we must counter permit them to produce the much
needed goods to aid in general re¬ standing with determination we
wherever possible those forces of
have

We

we

thus

cannot stop

recognized that

with a statement

hunger, cold, disease and despair
which
work to undermine the
foundations of freedom and peace.
It is

a

grim fact that there

is

a

world working to
create
chaos for its own ends
whereas we and other free peo¬
in

force

the

velopment of
we

many

a

are

now

order

Hopes of the Marshall Plan

Marshall with

Secretary

to European countries
that they work out together plans
for
mutual
assistance
and the

proposed

.

are

production

goods needed to pay
the

currently for

urgently needed

food.

Re¬

was

in Europe

hailed by everyone

except the Communists as a

real

nations

now

are

ferring in Paris to develop
a

con¬

unlimited resources.

has

meantime

have not

effect of the bad

winter on

Production of

our own

for

struggle

appointed two groups within
and another group

that

we

have

gled

received

proposals from Europe to pro¬

pose

to the Congress

In

our

considerations

and to the

certain that the

we

and

that

I have every confidence

with

prevail

centuries ' for

the

through

freedom.

peoples

these

against

we

can

totalitarian

the

forces which thrive on chaos and
threaten human liberty.

As order

develops, the threat will diminish
and the maintenance of peace

and

more

I

confidence

have

can

we

will

assured.

more

that working

grave

must be

plans from Eu¬

of

the

upon

tion

believe
to face

It

said there is

responsibility of our gen¬
of Americans.
It is not
future

of

that the destiny

mankind hangs

the wisdom and
of

our

actions.

that we

determina¬
I

sincerely

have the

and deal with these

requires more than

else faith
fidence

and

the world.

In all that I have
a

order

bring

maintain peace in

eration

the

strength

order

side the peo¬

on our

too much to say

prepared when we have

the

ples of the world who have strug¬

private citi¬
zens working with me as
Secre¬
tary of Commerce to study our ca¬
pabilities in order that we may be
distinguished

19

of

must understand the
strength of those allied with us.
It is not an exaggeration to say

Government
of

bringing

out

we

peace,

Therefore, in

peoples of the United States what
quirements are greater this year
positive steps we then should take.
because of the ad¬
verse

appraising

the

President Truman

than normal

home grown crops.

In
in

over

Strong as we are we

in

step

such together with people the world

program.

the

by

become

basis for hope.
Sixteen

assistaxice

step

present chaos.

wide

approval in the United States has

of

be

can

construction.

striving to reestablish maximum use of their own re¬
and economic order. sources and then present to us a
We have already contributed gen¬
prpposal of what is needed from
erously to relief in Europe and: the United States to make this
we should not underestimate the
cooperative program of recon¬
progress that has already been struction effective.
made by the free people of Eu¬
I was in Europe shortly after
rope to restore their own produc¬
Secretary Marshall made his pro¬
tion.
Britain is back to prewar
rates
of
industrial
production. posal and I can assure you that it

ples

...

ity to push forward and expand

is

bi-zonal

British-American

area

50%. To assist in the re¬
covery of Western Europe and to
attain our objectives in the de¬

•

organization among nations, which
is the third factor which I want
ment.
:
*
to
emphasize.
We have taken
It is a fact that the leaders of
France, Belgium and Holland have
Soviet Russia, although they rec¬ leadership in the development of almost regained that level. Some
the United Nations.
With all of of the Scandinavian countries are
ognize our accomplishments, are
the setbacks we must not lose
ahead of prewar. But the fact re¬
convinced from the teachings of
their Marxian dogma that a free faith in this institution and the mains that due to the vast destruc¬
capitalist country cannot maintain principles on which it is founded. tion or dislocations of the war,
In the language of the Charter of
stability, that thus we will within
production does not yet meet the
the
United
Nations
we
have needs. We are the only source of
a few
years find ourselves in a
severe depression which will pull agreed that we are, and I quote, many of the things which are still
the world down with us and so "Determined to save succeeding required and without aid from us
Weaken us that we can no longer generations from the scourge of the efforts of the people of West¬
war
to reaffirm our faith in
Continue our leadership,
ern Europe
cannot be successful
fundamental rights ... to unite
It is their conviction that when
in
reconstruction.
Europe has
our strength and maintain inter¬
We go
into a decline economic
imported food from
national security ... to promote always
chaos will again develop in the
social progress and better stand¬ abroad.
They have not yet at¬
World, giving them an opportun¬
ards of life in larger freedoms tained the production of industrial

centive for

the

only

Nations."
i.

have

we

in our

ability

issues.

anything

institutions, con¬
and calm de¬

in ourselves

termination to persevere.

38

THE

(846)

COMMERCIAL

&

FINANCIAL

CHRONICLE

Thursday, August

Indications of Current Business

28

1947

Activity

The following statistical tabulations cover production and other figures for the latest week or
month available
(dates
shown in first column are either for the week or month ended on that date, or, in cases of
quotations, are as of that date) :
Latest

AMERICAN

IRON

Indicated

STEEL

AND

operations (percent
Equivalent to—
Steel ingots and castings produced
AMERICAN PETROLEUM
Crude

oil

of

capacity).

Latest

(net tons)—

93.4

-Aug. 31

1,633,700

OF

-Aug.
-Aug.
-Aug.
-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 and unfinished gasoline (bbls.) at
—Aug.
Kerosine (bbls.) at
—Aug.
Gas oil and distillate fuel oil (bbls.) at
Aug.
(bbls.)

of

Freight

AMERICAN

traffic

handled

16

at

5,159,150

5,104,500

16

—

5,202,000
16,056,000

5,184,000

16,163,000

16

2,093,000

1,964,000

6,061,000

5,932,000

16

8,831,000

8,757,000

16

84,983,000
18,808,000
51,685,000
54,000,000

84,898,000

BUILDING

16,672,000

46,505,000

53,531,000

Month

1,775,000
5,115,000
8,193,000

87,145,000

18,562,000
49,545,000

15,640,000

8,969,000

51,317,000

of

16

AREAS
All

87,015,000
17,710,000

U.
of

Aug. 16
(number of oars)

906,305
686,019

Aug. 16

ENGINEERING

CONSTRUCTION,

ENGINEERING

New

Total

U.

51.913,000

Additions, alterations,

Public

construction

919,734

887,553

Additions,

651,744

691,869

Federal—all

alterations,
building

State

municipal.

COAL

OUTPUT

(U.

BUREAU

S.

OF

coke

non-residential

41,274,000

27,030,000

59,297,000
49,179,000

37^433,000

2,117,000

5,946,000

-10,118,000

3^61,000

32,976,000

COAL

IIZI

U. S.

40,794.000

SALES—FEDERAL

1,060,000

129,600

♦11,810,000
1,179,000
♦129,800

•12,100,000
110,700

AVERAGE—100

.Aug. 16

224

•223

217

Asia

COKE

(i\et

(net

FAILURES

(COMMERCIAL

STREET,

; «>

(in 000 kwh.)

.Aug. 23

—

AND

INDUSTRIAL)—DUN

A

4,952,876

4,730,000

Oven

(net

coke

Beehive

—Aug. 21

59

78

70

.

tons)
(net

V

—I——

coke stocks at end of month

In

IRON AGE COMPOSITE PRICES:
■

J

Finished

steel (per lb.)
(per gross ton)—
Scrap steel (per gross ton)——

METAL PRICES

(E.

A

M.

Electrolytic copper—
Domestic
refinery
Export refinery at

Aug. 19
Aug. 19
Aug. 19

at

Straits

tin

(New

(New York)

Lead

(St.

Zinc

Louis)

3.19141c

2.88239c

$36.52

$36.18

$40.42

$40.00

$19.17

of

U.

S.

Govt.

at

20

21.225C

21.225c

t

20

21.425c

21.425c

21.425c

20

at

.

80.000c

80.000c

(tons

(tons

of

2,000

15.000c

14.800c

10.500c

10.500c

10.500c

.

Aug.
Aug,
Aug.
Aug.
Aug.

8.250c

'

26

122.49

122.55

121.86

26

117.00

117.20

117.20

26

121.88

121.88

122.09

26

120.22

120.22

'•£1 22.02

120.22

26

-120.63

116.80

r,

123.27
118.40

,

Z '

664

r?

'

.

116.80

116.80

118.20

OF

677,489
1,400,077

Railroad
Public

110.15

109.97

112.56

i,Crude Oil—

112.56

112.37

v115.04
119.-00

118.40

118.00

118.60

120.43

120.43

:

120.63

r*

*i' Stocks

I.L.

*

July 31—

31

«-

-

*

"

21,415,434

\f '

'**

«

...

12i;46

,,

PRODUCTS—DEPT.

1.51

1.55

2.80

2.79

•.

...

'

.

-

26

2.56

2.56

,

2.64

2.64

2.81

2.81

NATIONAL

BY

Fats

and

26

ASSOCIATION—WHOLESALE

3.16

3.17

3.05

3.03

3.04

2.73

2.72

2.72

26

2.7011:

2.63

2.63

2.62

2.58

417.2

-Aug. 23
Aug.
Aug.
Aug.
Aug.
Aug.
Aug.
—Aug.

——

Livestock
Fuels
commodities

Textiles
■

421.8

materials

Chemical

and

Aug.
Aug.
.Aug.
—Aug.
—Aug.
Aug.
—Aug.

—

drugs

Fertilizer materials

Fertilizers
Farm

machinery
All groups combined

NATIONAL

PAPERBOARD

Orders leceived
Production

223.9

2.90

338.9

221.3

23

176.4

23

256.4

23

323.3

'-■J

14,907,000
972,617,000

4'

180.0

*198.6
259.4
352.5

260.8

246.7

249.7

182.4

182.4

178.6

23

163.6

164.8

164.4

227.8

.

218.0

221.9

204.7

159.1

150.1

159.2
225.8

221.9

194.7

23

149.7

177.4

149.7

152.0

23

127.5

130.8

129.7

129.5

23

135.5

135.0

127.1

127.1

127.1

206.8

115.1

206.8

203.6

Sales
"

121.4

23

AGE—1(H)—Month

121.4

•135.3

23

176.4

AVERAGE=100

"

"

182,090

470,581

100

169,653
174,180
*

'

145,613
173,699

>

sv'

158,304

,
-

-!

97

488,283

.Aug. 22

S. DEPT. LABORr—1926=100:

'

139.7

7*.

'

»t

"

C*

141.2

!

-

'

•'*

'

,

152.7

152.2

150.3

181.4

128.3

181.2

172.3

163.3

171.1

182.4
168;0

176.5

172.7

139.7

—

Manufactured products

138.4

I

.174
170
"

•

-

v

43,635

I

7

-

227

•;

*

*

254

:

^

*

°£er than farin produTts—

I
1X1 vrouucis
kJZFZ— ot.h"th,n.,a™proiuat8

6'




-

*

*

-

-

236

254

194

206

'

.

*

205 -

215

161
158

231

;■

'

107.1

_•

:

-vi.,-.

1

f'.

(DEPT.

■

r.

OF

146,851.600

74,198,120

_

*

■

.

*197

208

60,201,057

1 *

;

1,038,356

of

1,097,307

757,268

633,013

464,294

442,473
314,795

2,710,854

end

111.0

110.7

146.7

146.7

16

178.9

178.0

174.8

117.2

132.7

July:

116.9

117.9

132.0

131.8

98.3

1935-39

131.4

115.5

114.0

116.0

115.7

101.0

;

142.9

"

96.5
*

•

113.7

INTERSTATE
.

Index of

•***

<

-

,

•

COMMERCE

2,782,706

2,640,438

tl32.7

1133.0

/ 129.5

£45,715,000

£12,303,000

-

596,874

—441,.482

at

Average=100
'

*.

.

middle

>

of

1__
^

_

,

.

month

COMMISSION-—

Railway Employment

-

37,824,952

,

~Z
tons)_IIIII

.(abort tons)

16

$611,998,248
94,635,204
49,970,512

of June:

.

16

$724,432,208
167,113,916
89,768,603
75,728,895

COM-

114.9

Aug. 16
—Aug. 16
—Aug. 16

__

•w-pvicorf
,

.

.4

'

1,730
42,914

..

,

*.

I*"'

NEW CAPITAL
ISSUES IN GREAT BRITAIN—
Midland Bank, Ltd.—Month of
July
,

Semi-manufactured articles"

„

t

:__

Shipments '(short' ton's)—!—

138.4

139.5

Raw materials

;

11,656

I

;-503

17,208
17,028

38,219
28,293

.

*

$696,908,689

operations——!

For sale (short tons)—
■_
For producers' own
use
(short
Unfilled orders for sale at

140.9

177.8

16

Special groups—

•

.

(

.

t<*-

»

revenues—

railway

CASTINGS

Aug. 16

products—

goods

from

''

\.

16
Aug. 16

products

Miscellaneous commodities

•

136.3

Aug. 16
Aug. 16
—Aug. 16

.

Building materials

operating

revenue

MERCE)—Month

Aug.
—Aug.
-Aug.
Aug.
Aug.

Fuel and lighting materials

fi

—-

'Railway operating income—
Net railway
operating income

~

140.4

Aug. 16

_

allied

v,
-

1935-39 AVER-

July:

313

18,821

.

OfifU. S. CLASS I STEAM
RYS.
(INTERSTATE COMMERCE
COMMISSION)
—Month of June:
.r
r
^

Net

98

600,674

ar

""

Hides and leather
products
Textile products

and

of

972,322

18,631 '
;

30,619

ninthly),'unadjusted

Railway

166,363
-

97^ ;
474,8.70 v

"■.#*

Housefurnishing

'

;

35,054
988,800

■

EARNINGS
■■

7

Chemicals

••

v

149

10,248
39,137

(average
Shies (average
daily), unadjusted-——
Sales (average
laily), seasonally adjusted!—
Stocks, unadjusted as of July
31——J——
Stocks, seasonally adjusted as of July 31—

fcjjk.
165,092

—Aug. 16

(tons) at

metal

968,054

DEPARTMENT STORE SALES—SECOND FED¬
ERAL
RESERVE '
DISTRICTS FEDERAL
RESERVE BANK.* OF N. Y.

819,252

;

912,213

19,118
19.472

,

783,480
"

90,895

'.

—

25,925

39,955
708,927

991,195

'

1,434,320

694,897

946,818

—

124.5

23
23

31,628
1,454,956

79,431

212.9

;-ft 154.2
"146.5

-•

217.0

—Aug. 16
Aug. 16

Farm products
Foods

and

T

—

.VT224.1

249.7

23

'

87,614

35,484

•

263,154,000
952,491,000

1,328,020
1,272,034

726,594
717,035 ;

Z

....

211.4

270.2

23

All commodities

Metal

;

bales—

'•

•

46,916
1,361,668
1,346,380

-

July 31
Aug. 1 to July 31-1—IIIIIIIIII
Shipped Aug. l to July 31—
Hull fiber (500-lb.
bales)—
Stocks July 31
1-——
' ~
Produced Aug. l to
July 31——-IIIII—
Shipped Aug. 1 to July 31—
.:
Motes, gabbots, etc. (500-lb. bales)—
u t
Stocks 0uly 31—L..—_—
Produced Aug. 1 to July 31—
Shipped Aug. l to July 31

338.3

254.8

23

Aug. 16

WHOLESALE PRICES—U.

-

203,856,000
885,620,000

Produced

DEL, FAINT AND DRUG REPORTER PRICE

i

Shipped

20,144,000
23,333,000
948|582;000 1,017,546,000
951,422,000 1,018,480,000

171,342,000
911,907,000

_

to July 31

l

July 31
(tons) Aug. l to July' 31—
(tons) Aug. l to July 31-

Linters—running

,

-.188.4

329.4

I

(tons)

INDEX—1086-36

117,806

975,966,000

-

(tons)

Produced

■

257.4
,

ASSOCIATION:

(tons)

u

3,261,913

107,334

.

i

Percentage of activity
Unfilled orders

3,162,939

3.014,943

3,068,968
3,088,335
98,339

July 31
iii
(tons) Aug. 1 to July 31—"I""
(tons) Aug. 1 to July 31

-

Stocks
*•*"1

418.2

224.2

.Aug. 23

Metals

Building

-•HullS—

3.18

26
26

COMMOD

Grains

r

Shipped

2^74,

v-

July 31

(tons)

Produced
r V 2.62

■

~K'

Cotton

Miscellaneous

Stocks

2.81

.Aug. 20

oils

Farm products

3,004,571

/

—

-jCake and Meal—

GROUP—1935-80=100:

r

56,347

,

Stocks

INDEX

FERTILIZER

ITY INDEX

L52

2.64

26

(*'■
f.

94,295

255,221

68,887

.

,

(pounds) Aug.

-

2.55

26

(pounds)

Produced

,2.79

.Aug.
Aug.
Aug.
Aug.
.-Aug.
Aug.
Aug.

Group

COMMODITY

21,578,390

72,549

221,999

■

OF COM-

(pounds)

Stocks

:

1.51

.-Aug. 26

—

Utilities

MOODY'S

.'

.64,989

.

4,463,577
*

81,923
200,583

„

,

729,603
2,282,384

•

900,510

■„»

July 31
Produced
(pounds) Aug. 1 to July 31_»„
Shipped (pounds) Aug. 1 to
July 31——

7

Group—
Industrials Group

V

728,251
1,677,014
1,229,817
21,324,316

101,183

•r

COM¬

*.

MERCE—

109.79

.Aug. 26

—

—

•81,339

(tons

July 31

COTTON SEED

112.19

Aug. 26

Average corporate

224

—

period

BALES—

'

(tons)

Aug. 26

.—

Aug. 26

Bonds—_

97,527

76,570

of

LINTERS—DEPT.

+

,

Stock

MOODY'S BOND YIELD DAILY AVERAGES:
Govt.

43,606

116,652

___

Refined Oil—
S.

•82,308

•103,448

109,817

SEED—DEPT. OF COMMERCE—
Received at mills (tons)
Aug. l to July 31—
.Crushed (tons) Aug. 1, to July 31-;

Aug. 26

—

Group

Industrials Group

U.

56.907

79,389

COTTON

Group

Utilities

616,261

94,605

—

f

jL

Bonds

377,900

-

July-31^
52:000*: r Consumed Linters—Month of July_i_i___L_:
In
8.250c
consuming establishments as of July 31J8.100c J.; In public storage as of
July 31—

15.000c

14.800c

4,444,400

670,500

July:

2,000 lbs.)
2,000 lbs.)—

public storage as of
July
Cotton spindles active as of

16.175c

4,822,300

668,461

of

lbs.)

AND

6,116,910
5,530,350 t

.

In

14.1506

80.000c

15.000c
14.800c

.Aug. 20

—

20'

.Aug.20

at

Baa
Public

of

Lint—Month of July—
consuming establishments as of

In

.Aug.
.Aug.
.Aug.
.Aug.

corporate

Railroad

A.

MERCE—RUNNING

MOODY'S BOND PRICES DAILY AVERAGES:

Average

S.

COTTON

j.

——

101416

10,746

586,560

$28.13

$37.92

'

Refined copper
stockist end

2.70711c

$37.35

QUOTATIONS):

at

(East St. Louis)

3.19141c

434^222

449,100

(net tons)

Consumed

York)

Lead

J.

U.

Export

Pig iron

365,914
261,498

5,774,151
5,325,051

I_

>_

tons)—

Crude
(tons of 2,000 lbs.)
Refined (tons of 2,000
lbs.)„
Deliveries to customers—
-

17

831,239
386,271

.J,

(net tons)—

coke

Copper production—

BRAD-

INC

365,452

(BUREAU OF MINES)—Month
of June:

Production

4,44f,040

4,000,000

286

tons)—

COPPER INSTITUTE—For
month

4,923,000

1,000,000

(net
tons)

tons)-

(net

EDISON ELECTRIC INSTITUTE:
output

56,000,000
56,000,000
52,000,000

8,000,000

714,249

and

Africa

Oven

Electric

90.000,000
60,000,000

360,000,000
214,000,000
90,000,000

•

North

To

239

266,000,000

3,940
344,571

exports of Pennsylvania anthracite

Central America
To South
Amerltia^'Pnet tons)_
To Europe
(net tons)—

"'Wr-'

RESERVE

etc.

tons)
To

12,613,000
1,089,000
130,100

1,116,000

6,000,000 >
2,000,000

S416,000,000

(BUREAU OF MINES)—Month
of June:

To

11,750,000

—Aug. 16

-Aug. 16

STORE

SYSTEM—1935-39

56,185,000

—Aug. 16

(tons)

DEPARTMENT

$96,979,000

75,468,000

MINES):

Bituminous coal and lignite (tons)
Pennsylvania anthracite (tons)
Beehive

$134,765,000

24,425,000

Aug. 21

and

Federal

$57,401,000

Aug. 21

construction

$109,382,000
65,991,000
43,391,000

-II—IL.

etc

construction

residential

New

Aug. 21
Aug. 21
Aug. 21

construction

non-residential

905,244

Additions, alterations,

S.

242,000,000
124,000,000
74,000,000
429,000,000
240,000,000
116,000,000
73,000,000
11,000,000
2,000,000

_I

etc

residential

692,757

NEWS

construction

$440,000,000

228,000,000
126,000,000
72,000,000
418,000,000
228,000,000
120,000,000
70,000,000
8,000,000

$91,358,000

OF

non-reSidential

RECORD:

Private

DEPT.

May:

New

CIVIL

$426,000,000

S.

construction—*
residential

New

(number of cars)

from connections

51,926 465

$87,833,000

,

,.

*52,900,000

•

URBAN

building

New

freight loaded

152,000,000

IN

S.—U.

New

ASSOCIATION OF AMERICAN RAILROAJDS:
Revenue

RRs.

$93,733,000

OF--THE

49,843,000

"*

I

July

Non-Federal—alft-building
Revenue freight rec'd

Class
omitted

CONSTRUCTION

LABORS—MTdnth
16

Year
Ago

DEBITS—BOARD OF GOVERNORS OF
FEDERAL RESERVE
SYSTEM—
~

,

5,912,000

16

.

THE

4,891,000

2,091,000

16

4,842,750
-

5,126,000
15,747,000

Aug. 16

——

5,049,850"'

BANK

RAILROADS—

by

(revenue ton-miles)—000's

average

Month

July:

1,575,600

1,651,900

1,623,900

ASSOCIATION

89.4

94.4

92.8

Previous

Month

Ago

Ago

Month

-

fuel oil

Year

Month

INSTITUTE:

output—daily

Residual

Week

-Aug. 31

(bbls. of 42 gallons each)
Crude runs to stills—daily average (bbls.)
Gasoline output (bbls.)
Kerosine output (bbls.)

X,»

Previous

Week

INSTITUTE:

steel

market—previous

and foods

quotation

21.225c,

166.8

,

165.2

147.1

146.3

144.4

110.5

147.8

>

i~ S"

147.2

145.1

146.5

145.9

122.9

143.3

135.4

Aug. 16
Aug.
,Aug. 16
,

166.4#

147.2

135.2

120.6

132.9

110.8

TREASURY

TRANSACTIONS
IN
DIRECT AND
GUARANTEED SECURITIES
OF U. S.
A.—Month of July—

Net
Net

£31,461,000

MARKET

sales

.

purchases

•Revised figure,

tPreliminary figure.

*

,

*

'

$609,139,700

—

$359,163,200

$157,80

competitive market where there
is more demand for it, in most

Food Prices Not Out of Line
dollar had not bernme
cheap or depreciated in
value, that $193 billions of income
would mean unprecedented prosnpritv for the country.
Measured
in the
practical things of life,
however, such as food, clothing,
If our

easier

before
show

we

with

indexes

For these

greater

a

kinds and

same

quantities of food the general con¬
suming public was paying, in the
year

As
duce

income...

will

average

Most people feel
is over, we
increase the
higher standard of living which
the war brought us without mak¬
ing the sacrifices which are the
inescapable result of conflict. They

that, now the war
should continue to

the

ness

D.

wealth.
undoubtedly
follow its usual custom of helping
other countries which are in want.

'

destruction of real

good of everyone
Should undertake to feed and

help

value.
We

realize

that

too

is

land
in

production, because
drought will cause the
Into
also

consideration

our

we

can

to

our

be

justify

our

laws
enough enforced

thinking that a con¬

who want to

'States
hse

come

Europeans

to the United

Preferred Dividend No. 157
Common Dividend No. 89

Dividends

of them to advantage

ers

we

immigration
to

our

the type of

of

one

dollar

seventy

($1.75) per share on the Preferred

five cents

Stock and

thirty five cents (35tf) per share on the
Common Stock of this Company have been
declared payable

problem

of

feeding

check

In spite of the foregoing,

can

our

our

produce enough food

tribute

to

own

the

cannot do

people and con¬

relief

of

Europe.

it, however, unless

Pur own
economy

is kept in rea¬

sonable balance.

We find that the

indexes

prices and costs

of farm




the

2,

1947,

close

stockholders

to

business

of

ending

quarter

the

August

UNITED GAS

of
20,

1947.

31,

August

LOUISIANA

SHREVEPORT,

N. H. BUCKSTAFF, Treasurer.

which

dividend
QUARTERLY

1947. Transfer

bulk o

into our
conspiracy

DIVIDEND

119
of

One

Dollar

per

York,

New

N.

declared

Directors has this date

dividend

a

twenty-five

of

share on the Common
Stock
of the
Corporation, payable
October 1, 1947, to stockholders of
record at the close of business on
(25(f)

cents

per

September 10, 1947.

J, H. Miracle,

1947.

August 21,

Y.,

Dividend Notice
The Beard of

Secretary

August 27, 1947

October 1, 1947 to holders of
September 11,

books will not be closed.
CARL A. SUNDBERG

August 14, 1947

Secretary

>

The

declared a quarterly dividend of Twenty-five
cents ($.25) per share on its
capital stock, payable Sep¬

Company

holders of record at the close
business

quarterly dividend of 75<f per share
(1 y3%) on the Preferred Stock for the
quarter ending September 30, 1947, and a
dividend of 40tf per share on the Common
Stock have been declared. Both dividends

Preferred Stock

of the fol¬

thorized the payment

lowing quarterly dividends:
37 Vl tents per share on Orig¬
inal Preferred Stock, payable

of

September 30, 1947, to stock¬
holders of record on September

September 10, 1947.

M. C. Roop,

Dividends

of Directors has au¬

The Board

30, 1947, to stock¬

tember

No. 166
No. 153

A

are

COMPANY

poration has

Bank Note

Common Dividend

CALIFORNIA

SOUTHERN

Chemical Cor¬

EDISON

American

Preferred Dividend

of

Board of Directors

The Davison

I

comes

no.

share on the Common Stoat of
this
Company has
been declared payable at
the Treasurer's Office, No. 165 Broadway, New
York 6, N. Y., on Monday, September 22, 1947
to stockholders of record at three o'clock F. M.,
on
Tuesday,
September 2,
1947.
The stock,
transfer books will not be closed for the pay
ment of this dividend.
J. A. SIMPSON, Treasurer
($1.00)

Secretary

5,1947.
Baltimore 3,

Md.

27

cents

lative

21,1947

August

payable October 1, 1947, to holders of
September 4, 1947. The stock trans¬
will remain open.

per

share on Cumu¬

Preferred Stock, payable

September 30, 1947, to

on

presently our food is

that

record

stockholders of record on Sep¬

fer books

The fact is

food.

tember '5,

in a

CHfllWl. CORPORATION

Secretary

At

WANTEDS
.

v

\

(

A

meeting of

a

Directors held

.

,

syndicate department, or

Power & Light

work—but

tical

mainly

a

statis¬

job.

Corporation

Ma¬

representative New
member
disabled veteran; wishes a

registered

ture;

STANY;

Coupon No. 88 must
has this day
declared a dividend of $1.50 per
share on the $6 Preferred Stock and
a dividend of $1.75 per share on the

"Commercial & Financial
Chronicle," 25 Park Place, New York
B,

814,

of this Corpora'
payable October 1, 1947, to
the close of
business September 10, 1947.

dividend

and Coupon

tion,

stockholders of record at

No. 200 must be used
Ordinary Stock.

received in London
29th will be
for payment of dividends

before August

or

in

time

to

transferees.

Stockholders

Trcasurer.

August 2 7, 194 7.

tween

experi¬
accounts. Well

four

Has

ence.

known

to

L I. du Pont de

ary

M

years

New

Out-of-Town

York

Traders.

Commission. Box
Commercial & Finan¬
Chronicle, 25 Park PL,
and

813,

cial
New

and

Sal¬

York 8, N. Y.

may

be

of Article XIII(1)
Double Taxation Treaty be¬
the

United

Nemours

Wilmington,

Delaware: August

18, 1947

of Directors, has declared this day
regular quarterly dividends of $1.12j£ a share on
the outstanding Preferred Stock — $4.50 Series

The Board

and

a

share on the

outstanding Preferred

both payable October 25,
1947, to stockholders of record at the close of
business on October 10, 1947; also $2.00 &
share, as the third interim dividend for 1947,
on
the outstanding Common Stock, payable
September 13, 1947, to stockholders of record
Stock—$3.50 Series,

at the

close of business on
L. duP.

August 25, 1947.

COPELAND, Secretary

the

of United King¬
Income Tax appropriate to
dividend payable September

30th

on

tion

to

dom

of the rates

of New

Ordinary Stock
Guaranty

by applica¬

Trust Company

York.

the

Company

Gas

Union

TOBACCO COMPANY,

1947*

dividend of

quarterly

regular

$1.06'A

Southern
has declared

of Directors of

The Board

per

Cumulative

share on the
Preferred Stock of the

payable September 15,
stockholders of record

Company,

to

Checks will be

September 1, 1947.
mailed.

of Directors

The Board
Union

the
15c

regular
per

Stock

of

quarterly

dividend of

share
on
the
the
Company,

September 15, 1947, to
of record at the close

Common

payable

stockholders
of business

Checks will be

September 1, 1947.
mailed.

H. V.

McCONKEY,

Secretary

LIMITED

of Southern

has declared

Company

Gas

BRITISH-AMERICAN
August 20,

Preferred
Stocks

States and the

Kingdom, to a tax credit
under Section 131 of the United
States Internal Revenue Code can
obtain certificates giving particu¬
lars

on

and Common

1947,

en¬

United

Trader Available
-

who

titled by virtue
of the

Twenty

be used for

All transfer?
on

CAS COMPANY

5% Preference Stock

for dividend on

$7 Preferred Stock

N. Y.

on

UNION

SOUTHERN

Dividends

income tax.

The Board of Director!

JOB—ANYTHING! ! ! !
M

NOTICE

DIVIDEND

Exchange;

Stock

York

it was

September 30th
half
yearly
dividend of 2,/2%
(less tax) on issued 5% Prefer¬
ence
Stock and Interim Dividend
of
One
Shilling
for each One
Pound of Ordinary Stock free of
decided to pay on

Electric

Job—ANYTHING, but prefer trad¬

ing,

O. V. SHOWERS

August 15, 1947

August 19, 1947, in London
„

1947.

Secretary

July 23, 1947

SITUATIONS WANTED

THE DAVISON

Jr.

W. F. Colclouoh,

& Company

which

here in the United States to take
care of

of

as

for

1947,

add

indicate high food prices, we

Probably

September

record

if

People.

nil

States

Company (Wisconsin), at a meeting held
August 19, 1947, declared a dividend of one
one-quarter per cent (1V4%) on the Preferred
Stock
of
the
Company, payable
bv

record at the close of business on

work¬

will

certainly

Northern

of

and

readily absorb, but

could

(WISCONSIN)

Directors

of

Power

H. F. Sanders,
We could choose

MORSE G. DIAL,

Secretary and Treasurer

on

of

We could

be excluded.

can

some

of

number

Board

in the

situation.

who furnish the

raise the cost of

Box

siderable

September 5, 1947.

business

power

states

northern

of

COMPANY

are

present immigration

strictly

New York 8. N. Y.,

<

fact that money

markets could by any

to

increasing in population very rap¬
idly in the United States. In the
last 20 years we have added about
27 million people to the number
which must be fed. This addition
is almost as large as the popula¬
tion of England.. I do not think
that

to

will not be closed.

Company

must

we

that

fact

the

take

office

we gauge

approximately 3 million

food

the

blow away.
*

the

of

The

A
30 Church Street

reasonably be considered

farmers

periodic
soil

books

KING, Secretary

find that there is

we

that the

remain permanently

cannot

if

little net improvement

cannot

This

bowl.

dust

the

called

1947,

o|f record at the close of business
15,
1947.
The stock transfer

on

SOUTHERN PACIFIC COMPANY

consider costs

we

farmer's- financial

our

planted wheat on a great acreage
of land which a few years ago
was

When

cheap,

very

have

we

incomes
their face

at

readily agree that the

however, and the

indicate a lesser produc¬
than we had hoped for.
We

must

taken

can

hands.

reports
tion

payable October 1,

Company,

share

September

AMERICAN LOCOMOTIVE COMPANY

prosperity
by
the amount of
money which passes through our

year's

of

Practically all

this

17, N. Y.

SEVENTY-FIVE
CENTS
a
declared on the capital stock

been

has

HERVEY J. OSBORN, Secretary.

Fifty Cents ($1.50)
per share on the Common Stock of the
Company, payable September 20, 1947,
to common stockholders of record at the
close of business September 5, 1947.

the tremen¬
taxes.
These

farmer is prosperous

yet the
of the production of
foodstuffs in the United States is
considerably less than that of last
year, due largely to unfavorable
.weather.

dollar ($1.00)
the outstanding capital
stock of this Corporation has been
declared, payable October 1, 1947, to
stockholders of record at the close of

per

COMPANY

of

dividend

A

Broadway, New York

:

production,

high
great bulk

very

and Treasurer.

of One Dollar and

must realize that our
be

largely harvested.
We
few other crops which are

comparable to those of last

SALT

INTERNATIONAL

August 26, 1947

person

average

cannot

is

a

EDS

Secretary.

WHITE,

A cash dividend of One

Allied Chemical & Dye Corporation
has declared quarterly dividend No. 106

great many cases

a

we

the war. We must

realize, however, that our capa¬
city to produce food in the United
States is not unlimited.
We have
a
tremendous
crop
of wheat,
have

SANFORD B.

on

hidden, so
does not
realize they are being paid. When
we
stop to figure that our taxes
today are 20 times the taxes we
paid in the years before the war,

in

providential in that
enabled us to provide the

Which

in

increase

that the

were

food which won

CORPORATION

15C°1947at the Cl06e °* business on September

stockholders

with the exception of the
income and real estate taxes, are

those unfortunate
countries which stood the worst
of the destruction.
Our phenom¬
enal crop yields during the war
they

its expenses is

dous

in other ways

years

quarterly

a

CARBON

AND

($1.00) per share on the common stock
payable October
15, 1947, to all holders of

of

taxes,

we

ultimate

CARBIDE

UNION

Harvester
dividend of one

dollar

income

making its

in

finds

ily

meet

relief of those who were
enemies,
Probably for the

ing to the
our

HARVESTER

International

difficulty which the average fam¬

hardly escape even com¬

We can

declared

Company

CO.

of

Directors

475 Fifth Avenue, New York

W. C.

DIVIDEND NOTICES

COMPANY

1947.

for the

One of the great causes

materi¬

That ratio hasn't

ally changed.

We do not

supply and demand.

not on farms to be

and for those

$1,259.

hard

by

Allied Chemical 8L Dye Corporation
61

com^

farms to be $743,

on

persons

DIVIDEND NOTICES

profiting

tion is coming true.

country will

This

of

N. Y.
DIVIDENDS

W. JACK, Secretary

in

saying,

occur

petitive and responsive to the laws

share

1941, that any food
shortages which might result from
cannot visualize
the destruction our war effort, or any increase
that has been wrought, and they
in the cost of living, would prob¬
cannot realize the sacrifices which
ably be laid at the farmer's door.
must still be made to overcome
We are finding that this predic¬
the

September 8,

of

capita income

the per

1945 show

behind

LIGHT

A

will
prices

overproduction

ocal

bystanders

blamed for the

Authentic figures for

whole thing.

occasional,

which will keep our

$1.50 per share on the Pre¬
ferred Stock ($6) and a dividend of $1.25 per
share on the $5 Preferred Stock of American
Power
&
Light
Company
were
declared on
August 27, 1947, for payment October 1, 1947,
to stockholders of record at the Close ox busi¬

I well remember

population.

our

We

New York,

STOCK

of

us

needed.

of

dividend

A

of the balance of

expense

POWER

Street,

PREFERRED

widespread

the

for

belief that the farmer is
at

AMERICAN

Two Rector

who eventually get

which seem to be most
expect

themselves, we

income for

should be the innocent

the crops

The

.

larger percentage of the na¬

a

the

and

land

our

INTERNATIONAL

therefore, to be no

There seems,

justification

that

all

NOTICES

DIVIDEND

are

actually hungry.

only

get

farmers, we expect to pro¬

the quicker we

that

mad scramble

material welfare.

and

hazards of weather will let

citizens realizes

our

realize

store or meat market, an
of 52c of each $1 was

most fortunate in this paid to the farmer in 1946. This
country in that we did not suffer would not seem to be an exorbi¬
the destruction from war which tant rate, but would indicate that
was the lot of most of the coun¬
approximately
the
same
ratio
tries engaged in the recent con¬ which has existed over a period
flict. While we suffered shortages of years is paid to the original
ol many things, we were never producer.
We

:

of

high prices,

our

con¬

The sooner that

and understands the facts

was

in

are

our

for them also through

cost of living.

every one

paying but 17% of its income for
Of the money paid at the
grocery

by

tremendously
taxes, and we must ex¬

pect to pay

food.

war.

which

pay

through

increased

In 1946, however,

American family

the average

will

We

tributions

our

and

nations

other

to

want.

to 30% of

1920, frpm 29%

their

conditions before the

our*

increased at

have

ratio.

must divide that
half, and if we divide
individual incomes today by
.we will find roughly where
really stand in comparison

two

These

war.

since

that, while farm prices have

food

almost in
our

the

considerably

increased, the costs of producing

shelter, we

and

changed

paying,

are

in what seems to us a
between groups to

feel that,

repair

we

tional

tinue to pay, for this war and for
;he charity which we must offer

(Continued from page 4)
have

inancial

will con¬

We

can

the loss and begin to increase our

than there is food produced.

cases,

work

productive

39

(847)

CHRONICLE

COMMERCIAL & FINANCIAL

THE

Number 4624

166

Volume

August 8, 1947

and

Treasurer

THE

COMMERCIAL
the

risks

&

FINANCIAL

involved.

New

CHRONICLE

Thursday, August

28,1947

capital

stock should be sold to the public
to
hasten
the
accumulation
of

capital
added

commensurate
with
the
which banks are as¬

risks

suming in meeting the loan needs
of

BeViml-lhe-Scene Interpretations

business

and

individuals."

from the Nation's Capital

N

During

1946,

first

full

year

after the war's cessation, FDIC
member bank loans on real es¬
tate increased

and

48%, and

At

34%. Commercial

industrial

loans

consumer

a

meeting of the Board

of

Directors

of Fulton Trust
Com¬
New York held on
Aug.
21, John A. Mack,
Secretary of
the Bank was
appointed Treasurer
and John
Brooks, Assistant

increased

pany

loans 71%.

The aggregate amount of such
loans held by the banks mount¬
ed from less than $20 billion at
the
beginning
to
more
than

of

Trust

Officer,

his first term in

office. Prior
to
appointment
he
served
as
Cashier of the branch
of the
Dela¬
ware
his

Trust Co. at

where he resides."

appointed Secretary
continues as Assistant Trust
Officer.

The National Bank
of

and

$28 billion at the close of 1946.

Frederica,

Del

was

Dover,

at

Dover, Ohio, created
through the
merger of the
Exchange National
Bank, First National and
State
Savings Bank, all of that
city, began operating on
Aug. 18, it is

I

learned from Dover
advices in the

Cleveland "Plain Dealer"
of
Aug.
19, which further reported:
"The

bank has resources
of

new

than

more

$8,500,000. Officers are
Baker, Board Chairman; G.

D. C.

Tyler Brister,
President; Alvin V,
Lind and
Ray H. Adkins, the lat¬

ter of
A.

E.

Cleveland, Vice-Presidents;

W.
Wagner, Cashier,
Frary, Comptroller."
*

*

and Don

*

The Greeley
National Bank of
Greeleyi Colo,> has increased its
capital from $100,000 to
$200,000,
effective Aug. 5,
through the sale
of $100,000 of
new
stock.
This
was

reported in the Aug. 11 bul¬
letin of the Office of the
Comp¬
troller of the

Currency.

*

„

*
.

Walter
L.Rehfeld,
dent of the

%

Vice-Presi¬

Mercantile-Commerce

Bank

and Trust Co.,
St. Louis,
Mo., has been elected First VicePresident of the Robert Morris

Associates,
Details of

a

new

program

on

small

Don't be surprised if that 1946
GOP slogan—"Had
Enough?"—
becomes
next
year — "Had

Congressional action in re¬
voking RFC authority to make
direct real estate loans
and to
provide a
secondary market for
GI mortgages
insured

Enough Meat?"

Keep

an

the three joint
committees which

eye on

congressional
out

move

of

Washington next
"investigate" high prices.
They're after headlines, not facts.
Don't be surprised if
they degen¬

month to

erate

into

propaganda

publicly—and

clinics

officially—urging

to

consumers

strike against high
to buy only necessities.
That might be
important, might
be
dangerous
and
destructive.
Ohio's Senator Taft is
nominally
chairman of the three but he'll
lose control when

prices,

they disperse
into regional
hearings.
Real

fact

is

that

Connecticut's

estimated
cans

that

would

under
out

pockets

mate

to

$21,195

million.

To

state

it

more

government

billion
than

is

more

$4 billion

mended by

Treasury

*

(1)
a

banks

some

relatively

have

ratio

as

not

large
assets;

ac¬

grown

nearly
assets and deposits.

of

total

capital ac¬
total assets of all in¬
declined
from
the close of 1934
to

sured

13.2% at
6.5% at the close

the

the

new

construction

suitability

onial

of

E.

the

supply

existence
the credit

economy.

corporations from
million in

large

to

dividend

Overseas)

of

African
a

that

announce

Jackson, Chairman

elected

Board,

of

has

Vice-Chairman

the

been

of

the

Reorganization
Rails

The
Bank

Corn
and

Exchange
Trust

Philadelphia
A new Justice

is

an
or

shape

Department fad

"exploratory" investiga¬
complaint calculated to
public
opinion.
It's
a

National

Company,

announces

of

Personnel
Sept. 1..

Director,

streamlined version of the
old

witch

hunt.

The
Department
conducting such an
"exploratory" inquiry into in¬

has

been

vestment

banker

practices for
the past year,
hasn't caught the
witch yet. Now
the Department

concedes its probe into
the fix¬
ing of real estate
commission
rates is likewise

"exploratory"

—an

effort

to

a little
pay
dirt and then
pan somebody.

pan

Gov. Walter W. Bacon
of Dela¬
ware

announced

on

Aug.

20

the

reappointment of John C.
as
State Bank

Darby
Commissioner for

a

four-year term effective on
Aug.
The appointment is
subject to
confirmation by the State
Senate,
said advices
Aug. 21 from Dover,
Del.,
to the
Philadelphia "In¬
quirer,"
from
which
we
25.

quote:
"Mr.

ESTABLISHED
Members
40

N.

7.

1919

Security Dealers Ass'n

Exchange PI., N. Y. 5

HA. 2-8780

Teletype N. Y. 1-1397

also

Darby is

now

completing

HAnover 2-0050

Trading Markets

Seaboard Fruit Co., Inc
General Products Corp.

Susquehanna Mills

Empire Steel Corp.
All Issues

is

in

<".ARL MMES

to

the

sufficiently

assumption

of

& CO. INC.

FOREIGN SECURITIES

To do this, banks must

warrant

New Issues

effective

.

banks

needed

Domestic & Foreign
Securities

title

of

Teletype—NY 1-971

.

of

the

elec¬
tion of J. Mark
Kirchgasser as an
officer of the
Bank, with the

of 1946.

have capital accounts
i

stock

bank.

reasons

for

on

&

L.

South

banks

.

have

a

Barclays Bank (Dominion, Col¬

place
sound

Says FDIC Chairman Maple T.

*

to

and

for

by

$300,000.

location directly in the
hands of
the lending
institution and the
builder.

Harl of this situation
"By
far the most
unfavorable situation
which has
developed among banks
is a decline in
ratio of capital to
assets.
One of the chief

rather

January

regulations

responsibility

Firm

recom¬

economists




«

■

of

rapidly

The

revised upward
their estimate
of
direct taxes

*8,270

ly,

tion

counts to

as

*

defalcation; (3) capital

counts
as

the

$400,000

modest

homes in rural
and smaller
communities.
Maximum loan is $3,000.
Brief¬

ses¬

Deposit Insur¬
Corporation holds
that

esti¬

us

by last

Federal

have

from

Republicans.
*

The

*

1948.

bluntly,

less

made requisite
sion's
legislation

substandard
(2) some banks provide inade¬
quate protection against
losses

taking about $1
from

tion

amount

compares with actual
payments
of $20,408
million in fiscal 1947.

Newport, Ky., increased its
capital,
effective Aug. 11, from
$100,000 to

Old

still

tax

The Newport
National Bank of

be

RFC, by the way, is about to
undergo a functional
reorganiza¬

This

Now, they've upped that

of

national organization

*

weaknesses:

their
in di¬

$19,120 million
rect Federal
taxes in fiscal

such paper.

poration officials fret over
what
they
regard
as
three
prime

existing
of

that

banking industry conditions are
favorable in general, but cor¬

individual Ameri¬
pay

noteworthy

predictions to the
contrary, the flow of funds into
GI insured loans
continues at a
rapid rate since elimination of
RFC's
secondary market for

ance

reducing legislation, his experts
revenue laws

is

shortly

areas

.

higher.

denouncing

It

despite dire

The

We're to pay
more—instead of
fewer—taxes under the Truman
rule.
Last January when
the
was

mates.

,

chairman and
thereby pro¬
mote his ambition for
national of¬

President

that

ing

•

to be

or

of

$325 million this fiscal
period, the Budget Bureau esti¬

agency

*

price probe because he hoped

fice—Vice-President

expenditures

will

forwarded to FHA field
offices,
banks, and other lenders. Ob¬
ject is to encourage the build¬

curtailing the
corporation's activities. Some
top
as well as
bottom people are to
be fired.
'-

Republican Senator Baldwin au¬
thored the legislation
authorizing
the

by the
Administration is to

Veterans
reduce

homes

a

of bank loan
officials.

of

Federal Housing
Administration
insurance of private loans

50 Broad Street
==£—

Hill, Thompson & Co., Inc.

...

SPECIALISTS

New York 4, N. Y,

AFFILIATE: CARL MARKS &
CO. Inc. CHICAGO

——

Markets and Situations for Dealers

120

Broadway, New Y.ork 5

Tel. REctor 2-2020'

Tele. NY l-266<

!