Full text of Commercial and Financial Chronicle : August 28, 1958, Vol. 188, No. 5772

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

ESTABLISHED

IS39

O

r4iVc.Koi i

Reg. U. S. Pat. Office

,

Volume

183

Number 5772

New York 7, N.

editorial

::

As
Congress has this

It has likewise raised the "debt

come.

indeed it had to do

a

as

result, of its.

Presumably members

now go

confidently for voter support
The

them.

President

has

on

had

as

administered price and wage controls is said to require
cautious money

extrav¬

and

the

people are about
resignation?—to it all

and,

Should

fail to

we

do

so

stability,

the

are

a

DEALERS

lem

level

to

incentives

defends
We have

our

mate

of

;

Prof.

Yale

Brozen

of

rather

in this

paper

the

on

either

of

the

market

i

and

Assn.

20

of

and

NOW IN
afforded

Dr.

Brozen

Canadian

Winnipeg,

Farm

SECURITIES

the

by

Canada,

before

the

Agricultural
which

will

American

on

page

Farm

voted

capital; and

changes.

out

vigorous

change,

of

existence.

competition
has
in
the
annual

expression

most

a

General

of

The

important

annual

industry

Motors.

model

change, while
greatly misunderstood, is what dis¬
tinguishes us from, the people of
other

countries.

desire

for

sidered
H.

Mariow

or

type

Continued
address

counsels there

investment

been

Such

model

(control of prices
and wages by competitive market forces), may be used
to
keep unemployment low.
Since we usually have

♦An

Praises

economy.

factor in the progress of our

prob¬

type

attract

found

than

7

administered

entire

economy;

automobile model

have

*A variety of means, ranging from
fiscal, monetary,, and tax structure
policies to price and wage controls
the

to

annual

stabilizing unemployment at
v

the

enjoyed the healthy, growth-conducive cli¬
free, competitive economy. In vying aggres¬
sively for success in the market
place, we have had to do an increas¬
ingly better job for the customer.
Companies that failed to do this

a

of

grow

chain reaction effect increased

on

free,, competitive

will, therefore, focus

low level.

a

securities
tial

expected

attention

1958,

are

the

remain stable. I

for that matter of the state arid local governpage

is

direct

we

be

must

stable quantity at any other level.)

are

no way renders harmless the
growth of the debt of the Federal Government

on

which

to

of

Secondarily, we may be interested
in
stabilizing price levels.
Other
variables, such as per capita income,
employment and national product

have often forsaken prudence in the con¬

Continued

variable

has

production

unemploy¬
ment. (We, of course, prefer a low
level of unemployment rather than

traction of debt in

or

auto

talk about maintaining ■ economic

we

centra*

attention

certainly; have good cause to regret our failure,
since it is only an aroused public opinion that can
call a halt to these economic sins of the politicians.
The fact that private business and individual con¬
sumers

motor industrialist reviews economic signs of business
revival, explains basis for postulating long-term growth,

climate

shall

we

also, the restraining of continued
after" employment has turned

supply growth and to rising wages as prices and
productivity level off and/or decline. Offers proposals
to bring about
synchronous real wage-productivity trend.

disheartening state of affairs. A situation
already serious will grow critical if much longer
neglected. It is time we—all of us—stood back
and took a long, long look at this debt situation,
particularly public debt—and most particularly
debt.

.

and points out important

a

Federal

occasion

In pointing this out, economist Brozen attributes
unemployment to lack of stability in and slowing off of

politicians.

It is

unemployment without

movement

wage

in¬

as

as

of

supply growth to avoid too abrupt mone-';

Generally, when

veloped within the past year. So far as can be
detected in public utterances or other indications,
it

levels

money

now

about the rising tide of govern¬
appear to be partic¬
ularly concerned about the trends that have de¬

the rank and file of the

low

down.

ready to ask

outlays, but does not

different—or is

recession

upward

then to say

and

ment

of General Motors 50th or "Golden;
Anniversary," Mr. Curtice forecasts for the
industry domestic new "passenger car sales reaching;/
approximately 5^2 million in 1959, as compared to)
4.3 million in 1958, on the assumption of present busi- i.
ness upturn's continuance
during last half of this yean
and increased upward momentum throughout 1959. The

tary change usually used to meet exigencies of inflation

the strength of

things

of

the

Milestone

limit,"

own

some

On
Economics, School of Business

Maintenance

home well pleased

with most of these enactments, and

By HARLOW H. CURTICE*

to

and the declining rate of tax collections.

agance

Copy

Retiring President, General Motors Corporation

years

but for several

a

The Piomise of the Futnie

The University of Chicago

ably larger Federal expenditures not only this
and the next fiscal year

Cents

By YALE BROZEN*

Professor of

consider¬

very

Price 50

Maintaining
Economic Stability

sent to the statute books

year

legislation which will necessitate

Y., Thursday, August 28, 1958

Means for

We

•

MICHIGAN

OF

Curtice

model

•

It

represents

'

our

is my con¬
the
annual

It

progress..

opinion
that
change has been

the

most

single factor responsible
for the growth and vitality of our industry. It has made
possible an annual volume of sales that could never have
important

achieved had

been

20

cars

remained in

the hands of their

Continued

Economic

on

page

23

Economic

Society, Aug. 21,
appear
in the "Journal

also

Economics."

♦An address by Mr. Curtice in response to "Salute to GM" celebra¬
tion of General Motors' 50th anniversary, Flint, Mich., Aug. 15,1958.

•

REGISTRATION—Underwriters, dealers and investors in corporate
a

complete picture of issues

undertakings in our "Securities in

now

registered With the SEC and poten¬

Registration"

Section, starting

on

State, Municipal

30.

page

in

U. S.

and

Government,

State and

MEMBERS

Municipal

STATE

Securities

MUNICIPAL

and

PACIFIC

COAST

HAnover 2-3700

BONDS

CHEMICAL

Invited

California

<■

E.D.T.

an

Bonds and Notes

/

"inuthern

,

Securities

Lester, Ryons

DEALERS

•

623

Burnham

ST.,N.Y.

MEMICK NEW

CABLE:

and

So.

014-1400

•

Co.

Hope Street, Los Angeles 17,

New

York

Stock

Exchange

Associate Member American Stock Exchange

ST.OCK EXCHANGES

NEW YORK 5, N.Y.

&

California
Members

OF NEW YORK

Company

YORK AND AMCKICAN

IS VROAO STREET,

Bond Dept.

Teletype: NY 1-708

New

York

Net
Te

T. LAVatson & Co.
7
/

m*
IV

'

'

ESTABLISHED

-W/-;
v/

''

'A /' '

/}

r

Active

Dealers,

Markets

Banks

Brokers

,

,

,

i/f/
4

vy

'W,

*

'

CANADIAN

SECURITIES

BONDS & STOCKS

York Stock Exchange

American

-

i

'*

Stock

-

.

25

"

BROAD

NEW
first




Canadian

CANADIAN

Exchange

STREET

YORK 4, N. Y.

direct

vires to

PERTH

AMBOY

NEW YORK

Municipals
Department

Poxuoox Securities

Montreal and Toronto

Goodbody
115 BR0A0WAY

California

Municipal Bond

&

1

6KPORATI07I

Co.

MEMBERS NEW YORK STOCK EXCHANGE
BRIDGEPORT

L

'

Exchanges
DEPARTMENT

Teletype NY 1-2270

V

SouthieeAt company
DALLAS

BANK

for

CANADIAN
Commission Orders Executed On All

/

Chase Manhattan

Maintained

and

1832

Members
New

v.

THE

Correspondent—Pershing & Co.

Dealer

♦

DEPARTMENT

TELETYrC NV 1-22*2

CO»WITNHAM

Distributor\

•

y

'HE FIRST NATIONAL CITY MNK

department

Underwriter

Inquiries

BOND
BROKERS

BANK
bond

Housing Agency

UNDERWRITERS

CORN EXCHANGE

30 BROAD

Public

Trading Hours
10:00 AM-5:30 PM

telephone:

EXCHANGE

NORTH LA SALLE ST.

CHICAGO

-

40

tSitnk of Antcrini

Exchange Place, New York 5, N. Y.

Teletype ny 1-702-3

300 MONTGOMERY STREET

WHitehall 4-8161
SAN FRANCISCO 20.

-•

CALT0RNIA

The Commercial and Financial Chronicle

.

.

Thursday, August 28, 1958

:

(802)

2

The Security

Brokers, Dealers Only

For Banks,

Over

of experts
In the investment and advisory field from all sections of the country
participate and give their reasons for favoring a particular security#

experience

years

Large Trading Department

geared for service
4

Investment Counsellor

Charlottesville, Ya.

Nationwide Private Wire
Di

System

Giorgio Fruit Corporation

which

Ready to serve you when you

values

Try "HANSEATIC"

flation
of

Di

For

tion of under¬

p o w e r, a n

Member

PHILADELPHIA
Private

at-

agri¬
oper¬

Derwood

S.

1920

as

fruit producer,

a

realized a high
degree of integration and opera¬
tions now include wine processing

SCRIP

Since 1917

and

has

distribution; fruit and vege¬

packing; lumber, crate and
box production; .and part owner¬
ship
of
several
major eastern
auction markets,
table

McpONNELL&fO.
Members

New

Exchang®
Exchange

Stock

York

Stock

American

The 1956 purchase of the Santa
Fe Vintage Co. means acquisition
.

NEW YORK 5

120 BROADWAY,

of well-known wine labels

TEL. RF.ctor 2-7615

confined

tofore

offering

good

here¬

California but

to

for

potential

As the

tional distribution.

na¬

second

distributor of wine, by
volume in California, this divi¬
sion
improves
profit
stability
largest

Since 1932

Specialists in

which

plus

at

include the

heretofore

subject to

was

are

19 Rector;

HJtnover 2-0700

CAROLINA

shares

CRAIGIE 8 CO.

Giorgio's net sales increased
$11,570,000 in 1948 to $20,690,000 in 1957. (About $28,000,000
consolidating TreeSweet).
1957
earnings were $722,548 (excluding
capital gain on Florida property
sale) or $1.27 per share, an in¬
from

crease

PENSION FUNDS
■

■

I

jvV".'t-";'

v

•

.

fifth

of 12%

1956 and the

over

annual

consecutive

increase

,

in

INVESTMENT TRUSTS

net

profits

operations.

from

Recent acquisitions and expansion
add

INSURANCE COMPANIES

considerably

earning

to

po¬

tentials.

Call

to

be

crop,

sibilities through the sale of
Put
i

and

Call

Options

are

worthy of investigation.

representative

of

'

A

firm

our

will be glad to explain the

subject

to

those

who

are

Interested.

Ash for Booklet

on

How

to

Use

Stock Options

17,333
"in

shares

itself

pany

the

1953,

the

Com¬

purchased

in

the

stock

interests

best

of

all

stockholders." In contrast with
cent

Filer, Schmidt & Co.
Members Put & Call Brokers dDealers Assn., Inc.




BArclay 7-6100

re¬

sales

by "insiders" of many
corporations, S.E.C. reports reveal
no
sale of Di Giorgio stock by
Officer-Directors for

prior
March

US Broadway, S. Y. 6

the

to

years.

pected

from

recently

were

highest

price

in

•

division

is

1959.v With

until

$1.27

Tokyo, Japan
Brokers

til

$3

the
exigencies of the weather and the
market place, Di Giorgio has con¬
sistently
operated
at
a
profit.

to

May

and

11,

April,

over

1958,
1958

a

year

while
two

in

di¬

torically

recognized

the fact that

y

price

market
of

40

is

Com. Sc Pfd.

BOUGHT

earnings from

18 it

opera¬

is currently avail¬

able at 14 times 1957 earnings and
8 to 9 times estimated

M0RELAND & CO.
-

The

common

optioned shares

worth

of

stock
at

believes

that

represents

least

$50

per

the

net
share

a

Xv ■:>,/; XV.

Members

•:

Midwest Stock Exchange
.

;

r

X,

Detf.oit Stock Exchange- '/■

1051 Penobscot Building

-

DETROIT 26, MICH.
WOodward 2*3855

:

,

'; '.Branch; Office-r-Bay

X
BE 75

C i t v, Mich.

,y..

LAMB0RN & CO., Inc.
.

99

WALL

STREET;

NEW YORK 5, N. T.

SUGAR
Raw

—

Refined

—

Liquid

Exports—Imports—Future*

DIgby 4-2727

$2.20 dividend
rate
provides
J.

Barr

a

Haines

current

yield

■/;/"of 5y2 %. In ad-

variety of measuring devices (gas,

industrial

(Delta)

and

well

several

uses, as.
of instru¬
ments and special products.
as

any

on
,

N. Q. B.
OVER-THE-COUNTER

analysis, the success
business depends largely

the quality and ability of its
Continued

on

page

25

|

INDUSTRIAL STOCK INDEX
19-Year Performance of
35 Industrial Stocks

types

In the last
of

author

"

than 10 times

earnings for

1958.

rectors bought a total of 600 non-

SOLD

XL; ♦"4

rl957; earnings,,
while
the

values are water, parking and taximeters);
not
reflected
by
net
earnings. pumps, valves (including the fa¬
Nordstrom
valves)
and
Since the beginning of 1954 the mous
stock has sold between 12Y2 and regulators; power tools for home
tions. At

—

_

less

cash earnings and asset

20 times net

X

EQUIPMENT

current

years.

While profits are subject to

The

ratios.

in" future

share

per

,,

MONROE AUTO

lengthening
price-earnings

conditions net earnings could ex¬
ceed

Bankers

'

most

1957, probably
Under favorable,;

$2.

Investment

values and

in

reported

&

Broadway,H.lf.SCOrflaatt 14M;

equity,

rising

operations should
substantially over
the

exceeding

■>•'*•

these times of

oper¬

from

increase

Ine.

Affiliate oh

*

margins generally improved, 1958

earnings

-

Com¬

"

ating ahead of last year, a major
contribution to earnings may be'deferred

'

*

Yamaichi Securities Co,, Ltd.

which -enjoys an

Heavy bidding ex¬ active over-the-counter
trading
raisin
and
wine- market, might well be termed a.
this
season's
6%'
"sleeper" in -

TreeSweet

X.

n

v

of New York,

HAINRS

Rockwell Manufacturing
pany, common,

write

or

Securities Company;

very

J. BARR

|

Yamaichi

considered

ditibri tb eash dividends, mo?e-;
were
544,115
common
outstanding on Dec. 31, Since land improvements are ex¬ over, the company has paid two
stock dividends of 4% each within
1957 including class A and non¬
pensed
annually,
net
earnings the
past two years.
voting B shares. Management has
may
be cushioned by,; deferring
considered listing the stock on a
Starting back in 1925 with a
expenditures
in difficult- years.
national exchange, but has not yet
For instance development costs of single plant located in Pittsburgh,
made a decision. Both classes are
new
plantings were $224,000 in Pennsylvania, producing gas and
traded on the Pacific Coast Ex¬
the company has
1957 against $39,000 in 1954. Even water meters,
change. While management and more
important is the stability grown until it now controls a farfamily own a substantial minority and financial stamina
provided by flung empire made up of 22 man¬
of the stock, the majority is in the
depreciation and amortization of ufacturing plants located in 15
hands of about 5,000 public stock¬
plantings
which
last year
ex¬ States, and serving 28 basic mar¬
holders., When
the
Joseph i Di ceeded
net
profits
aggregating kets with 19 basic product lines.
Giorgio estate wanted to liquidate
latter
include
a
wide
$897,000. Stock prices have his¬ These
There

shares

The additional income pos¬

eight

the

Di

Telephone Milton 3-2861

boosted

/

For current, information

-

The Di Giorgios are

for
centrate plant, finances have been makers
strengthened and Di Giorgio now slimmer grape crop should augur
has a good outlet for its Florida well for Di Giorgio profits. While

citrus crop.'

VIRGINIA J
RH 83 & 84

Bell System Teletype:

wines

issued for additional dessert

injMay '58). TheeSweet's

single strength canning capacity
was augmented by a frozen
con¬

F. W;

RICHMOND,

were

interests

MUNICIPAL BONDS

branch office®

STOCKS

preferred

current

-

NORTH and SOUTH

our

JAPANESE

and equipment after allow¬

stockholders.
At
price of $18 the in¬
vestor buys ownership at approxi¬
mately 65% discount from net
asset value, enj oys a liberal 5 h %
yield, and should over the longer
term benefit from substantial im¬
and

Giorgio's 21,-

grape

-

NY 1-1557

;

Mobile, Ala.
Direct wires to

ing for claims of long-term debts

adjacent to valuable

California

the

• •

New Orleans, La.-Birmingham, Ala.

its
Tree
Sweet
products
( 9 8 % largest single income producer. Steele, Haines & Co., Pittsburgh, Fa.
This year's crop is expected to be
owned) provides Di Giorgio with
Rockwell Manufacturing Co.
a well-known citrus label. (33,000 a good one. Wholesale prices on

VIRGINIA—WEST VIRGINIA

to

y

Exchange

St* New York li lLIt

and

$12

competent managers
residential and industrial real es¬ and
may be expected to give a
tate
there
will
undoubtedly be good account of their resources as
additional land sales as favorable attractive farming, business, and
opportunities arise. If the 1956- investment opportunities ...present
sale of Florida acreage is any in¬ themselves.
dication these holdings may be
This stock is a candidate for the
carried on the books at about 10
serious investment manager who
of their
potential value.
Book is unincumbered
by trusteeship or
value of the
1,500 acre Peters
an unimaginative policy commit¬
Farm was about 7% of the $4,tee, the manager who realizes that
400,000 sales price. The company
safety of principal in/dollars is
accepted a mortgage for part of
meaningless without maintenance
the sales price which is. due on or
of purchasing power. The "battle
before Pec. 27, 1962, arid will re¬
for
investment
survival,"
(in¬
sult in additional capital gains of
creasingly complicated by infla¬
$4 per share after taxes.
tion;
international
coriipetition,
The 1957 Florida tomato crop and
politics) may find little Di
was
severely damaged by frost, Giorgio with more effective afma-.
but their citrus groves located in
merits than many of the giants
the Fort Pierce area suffered very
that now comprise "The Favorite
little
dajnage.
Almost half Di Fifty."
Giorgio's farm acreage is devoted

volatile bulk wine prices.

York Stock Exchange

Members American Stock

another $26 in valuable property,

the

factors

of at least

shares.

000 acres

grape,

management

books

the

on

Since much of Di

includ¬

tion in

owned

Cnase

citrus, plum, pear,
asparagus,
tomato, cotton,
and
potato plantings. Since incorpora¬

Specialists in

45.5%

assets

other

tities.

Florida

ing

&

and

cultural

ations

RIGHTS

mm

versified

if ornia

carried

is

Other

ticipate in. di¬
Cal¬

Principal Cities

Steiner, Rouse* Co.

r

possibility
that
worthwhile oil
deposits
might
be
found.
The
company
has leased over 1,800
acres in Kern County to two oil
companies.
In
1957 four wells provement in earnings, apprecia¬
were drilled, two were dry holes, tion of assets, and higher invest¬
two produce oil in minor quan¬ ment stature accorded Di Giorgio

Investors par¬

SAN FRANCISCO

•

to

Wires

&

(page 2)

Members New

dividends last year.

tractive,

CHICAGO

•

Bought—Sold—Quoted,

J.

Partner, Steele,
Co., Pittsburgh, Pa.

:

;

yield

vestment

Teletype NY 1-40

4-2300

BOSTON

—

Haines,

Haines
■

$501 yet paid Di Giorgio $112,830

d

this in¬

make

York 5

120 Broadway, New
WOrth

liberal

Exchange

Stock

the

example,

tion

earning

Established 1920

Barr

$1

New York Fruit Auction Corpora-1 plant

assets,
improving

Corporation

Louisiana Securities

Derwood

sellor, Charlottesville, Va. (p. 2)

value real estate and other assets.

combina¬

A

—

Chase, Jr., Investment Coun¬

Rockwell Manufacturing Co.

share appreciably under¬

common

valued

American

S.

.

Fruit.

New York Hanseatic

Alabama &

companies
based on 544,000 shares outstand¬
the current ratio was 4.2 to
1
promise to increase their
with net working capital of $6,» ing on Dec. 31, 1957. This figure
fast enough to outpace in¬
568,000. Total assets of $26,252,332 includes net working capital alone
leads me to the selection
and
book
value of $32.28 per
equal to $12, investments and
Giorgio
for

search

The

Associate

Di Giorgio Fruit Corp.

dividend, paid
since 1954 was adequately sup¬
ported by 1957 cash flow of about
$3 per share. Some dividends were
paid
every
year
since
1945;
Finances are strong. At year end
current

The

DERWOOD S. CHASE, JR.

Participants and

Their Selections

'(The articles contained in this forum are not intended to he, nor
are tkey to be regarded, as an offer to sell the securities discussed.)

Over-the-Counter

in
•

35

This Week's

Forum

A continuous forum in which, each week, a different group

Try "HANSEATIC"
•

I Like Best

POLDER

ON REQUEST

'

/

National Quotation Bureau
Incorporated

#6 Front Street

^

New York 4, N,?.

Volume

Number

188

5772

.

.

The Commercial and Financial Chronicle

.

The Breakdown oi

(803)

INDEX

i

Keynesian Economics

The

Promise

of the

[ichttoh

-

Articles and News

:

t

i

Page

ymmmmmmtmmmmmm AKB oomiAHY

Future—Harlow H. Curtice

Cover

By HENRY 1IAZLITT
Means for

Maintaining Economic Stability—Yale Brozen. .Cover

BRUSSELS

Economist and publicist, stressing

lasting influence of Keynes
key volume, "The General Theory," notes dearth of

and his

needed critical comment about him.

■

self unable to find*
^ true

and

i

Mr.- Hazlitt reports him-

single important -doctrine that is both V

—Ira U.

,

I.

.

The

-~$iaurke H. Stans__^_

^influential economic

book

.

both

of the

theory

on

of
I

stand f

er e

ble

.' s e

e

v

and

i

r

that

Henry Hazlitt

scholarly

economic

iyou will find his

of

any

the

journals, and
and the

name

phrases that he coined or popu¬
larized
sprinkled generously
through its pages. Open the news-

.jjpaper, and
j pretations
.

j events,

you

of

the most hostile critics of

Even

Keynes's theories do not question
the extent of his influence. I cite
i but one: "'(Keynes's) influence in
,

4

J
,!

>

There has

credibly great.

arisen

-

should

I

tion

that

the

need

infinite
of the
of

Yet

,! there

is

General

the

about

strange

a

paradox.

to hundreds

thousands

of

of books

The

articles.

There

and
are

books wholly devoted to expound-

J ing the General Theory in simpler
I and more intelligible terms. But
the

on

side

critical

there

is

Bank

great dearth. The non-Keynesians
anti-Keynesians have con¬
either

themselves

short

articles,

•

pages,

or

few

a

with

parenthetic
on the

curt dismissal

a

theory that his work will crumble
from

will

its
soon

own

contradictions

be forgotten.

have
his

been

given

>

the

and

is

a

a

1

critical

I

of

these
reply

Public

Anderson,

Welfare.

Nostrand, 19491,

p.

Economics

tNew York, Van

391.

Yes

be

decent
on

7

■■

specialized in

12

17

Bank

and

evidence

new

We do not

but

was wrong, we
all the lessons

1

"b-l;.:

(Editorial).

'.-7

--

3c

City

-

■'

.

Pubco Pet.

V

Cover

Seismograph*

Stocks

12

Ling Electronics
40
8

Dealer-Broker Investment Recommendations

8

Einzig: "Trade With Communist Countries"
From Washington Ahead

Mines

14

...

of the News—Carlisle Bargeron

*Report

17

Indications of Current Business Activity.

38

Mutual

36

danger that it
in

Request

upon

.

Singer, Bean

as

a

have

sort

of

form.

often

or

News About Banks and Bankers

Observations—A.
Our Reporter
Our

18

Wilfred

May

Reporter's

Report..

i

27

in

New

Prospective
Securities

Registration

Security

30

Offerings

34

L.__

Salesman's Corner

Glens Falls

Electronic

The Market

18

.

.

and You—By Wallace Streete.

.

Ling Electronics

16

The

Security I Like Best

2

The

State of Trade

5

Washington

and

and Industry..

You

Weekly

Epsco, Inc.

Copyright 1958 by William B. Dana

B.

Park

25

U.

S.

Patent

DANA

*

Reentered as second-class

Subscription

Place, New York 7, N. Y.
2-9570

to

9576

Thursday, August 28,

Subscriptions
Possessions,

Rates

United

Territories

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Union,

of

Dominion

in

Canada,

Countries,

States,

and

$65.00

U.
Members

per

$68.00

$72.00 pgr

year,

per

8.
of

in

year.

year.

1958

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

Other

Chicago

city

Offices:

3,

111.

news,

news,

135

bank

clearing*,

$45.00

South

La

STate

Sa-lle

St.

2-0613)

per

rate

foreign
must

be

INCORPORATED

39 BROADWAY,

NEW YORK 6
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Teletype NY 1-4040

and

Quotation

year.

Note—On

the

etc.).

(Telephone

Bank

W? V. FRANKEl & CO
WHitehall

Publications

Every

and

♦

COMPANY, Publisher*

WILLIAM DANA SEIBERT, President

records,

Request

matter Febru¬

25, 1942, at theu;..post office at New
York-, N. Y., under the Act of March 8, 1879.
ary

Office

HERBERT D. SEIBERT, Editor & Publisher

state

Prospectus on

Company

FINANCIAL CHRONICLE
Reg.

Sulphur

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40

...

Corp.*

Witco Chemical

-Column not available this week.

Twice

Specialty

23

been

9.

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29

In

ST., NEW YORK 4, N. Y.

Chicago

Dallas

Chicago

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2 George
Santayana,
Character
and
Opinion in the United States. (New York,

TELETYPE NY 1-5

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*

...

Securities

Securities

originally intended to
merely refutations.
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by-product of

on

&

in

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may

another

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Denver

to

Pacific Uranium*

PREFERRED STOCKS

-

wires

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the

history of thought great

Continued

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27

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REctor

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Seen

Business Man's Bookshelf

burial,

academic

-

Albany

J.F.Reilly&Co.,Inc.

Savings Bankers to Attend ABA

011

-ir

WILLIAM

25 BROAD

:•

17

(Boxed)..

See It

Pnblished

have

Are

Ratios

some

change of feel¬

wrong,

Scribner's, 1920).

For many years we

Capital

Slow Recovery With No Near-Term Upsurge

More

and

As We

has to teach us, and there is

chapter-by-chapter,

M.

Benjamin

and the

any

contributions

*

Yet

by Purchasing Agents

mere,

abandoned

are

mere

a

appearance

what

1957

practical policy is

on

ideas

was

learned

the

in

-

why it

real

Sold

Convention

Siinply to bid our predecessors
good-bye does not further clarity
or
progress of thought. Unless we
know not only that some past doc¬

error

*

Direct

days refute our predecessors, we
pleasantly bid them good-bye."2

trine

REEVES SOUNDCRAFT

19

itself a

may

first

both

arguments.

I know of

single work that devotes itself

Readily

Stress Is Placed

"One of the peculiarities of

that

new

16

DIgby 4-4970
-

speculation,' especially in
America," once wrote Santayana,

made

to

Shares

Continued

that this is what may

assume

"is

Peril"—Joseph Holzka

Spokane Stock Exchange

further.,

no

truth

the

influence

thought and

we

FOOD FAIR

PROPERTIES

Steamship Lines Plan Large-Scale Financing

diminution of Keynes's influence,
and though several of his theories

and

no

Future—Rear Admiral Rawson Bennett

Down, According to ABA Study..

of

course

though there has been

a

and

tented

15

MINERALS

only

objections,

ing, without
Theory

>j Keynesian literature has perhaps
grown

Three Keys to the

'

that

13
15

error.

Concerning
possible

virture of

of Refutation

Growing Dimension of Management—W. A. Patterson

-f

have been

actual

require

we

are

CHEMICAL
n

like

present
true theories in a positive form;
that it is of little value to analyze
error because
the possibilities of
error

HYDROCARBON

Efd'gar W. Lliestand'.... fe

"Mail-Made Reserves"

The U. S., Khrushchev and Mao—Roger W. Babson.

The second is the conten¬

answer.

or

"Revival of the Inflation

an

recent

■

Uses

II.

/

and

occur.

that which has arisen around Karl
Marx."1

,

such

the Roosevelt Administration was still tremendous. It would in any
very
great.
His influence upon case be a poor service to clear
most of the economists in the em¬
thinking
simply
to
allow
his
ploy of the Government is in- theories to be
forgotten, even if

',1 a volume of theoretical literature
:j regarding Keynes almost equal to
•

events,

refutation

monetary policies, that owe,
if not their origin, at least their
ubiquity, to his writing.

■

by

statement

and

'

that

of Gold

10

The first is the claim

refuted

economic

proposals for economic

or

to,

Keynes*s theories

will find inter-

current

,

119 7v-

analysis

losing their influence in
recent years, that they have been

of* almost

"

Ethics in Modern Business—Robert E. Wilson

rapidly

Open

issue

any

,

t

s

objections

to consider.

but
by his

STREET, NEW YORK

Telephone: WHitehall.4-6551

ALASKA OILS
The

require- no
apology. But therefare two possi¬

.

".} idolaters,

99* WAtL

Whole

a

'—W. J. Busschau.i

7

undertkkiiig^ should

The fact is
recognized not
only by,-his
:;

.ferities.

Revaluation

;<is -sthis.-task that
undertaking here.
view of the laudatory writ*

ings I have referred

;j lished in 1936.

admirers

Higher Gold Price Refutations-^Bep.

the -book." It

am

In

'{Money, pub- '

'even

theorCm-by-theorem

or

,»Theory of Em¬
,lt

-

6

Higher Gold Price Contentions^—Merrill E. SIioup

cerj)ts .will follow.—EDITOR <

eco-

on

ployment, In-

i

Inflation—Sen. Wallace F. Bennett.:

Outlook for Real Estate Industry and the
Economy as

will be published'by the ZXVftii
Nostrand
Co.
Additional ex-

j nomic policy,
$ is his General

1

'-5

•

Dept.

;

from Mr. ,Mazlitt>s>forthcoming
vohimef"The Bre akdown af
Keynesian 1 Economics" w hieh

John)

present era,

"and

Obsolete Securities

'

Tite Problem of

Thi^pr&'fifstpb0dUment

7

economist of

jthe.. TwehtieMv Century;" is

'''

^

^

GUARDIAN CHEMICAL

Canonization%. I

„

most famous

.

4

__i

t&i —H. Walter- Graves.l,.^^^^......^.^......

f

;i

Cobleigh

Making the Nation's Budget and Budget Outlook for I960

.

exhibiting just about

everything but obsotetes."

original. ^Charges "the Master" with chronic bad

,

j.

"—is

3

,

;

j

Economics—Henry Hazlitt-___

Stepping Up the Supply of Stepped-Down Power

being involved and technical without being precise,
and replete with looseness of leading terms. Concludes Keynes'
-frame of reference is strangely provincial, with assumption
that whatever was not discovered by Marshall or Pigou, or his
'
"little circle at Cambridge" was never thought of at all.

-r

Breakdown of Keynesian

The
*

i writing, in
;

3

(Foreign

account

of

of

in

New

and

—

extra.)

fluctuations

remittances

advertisements

York

funds.

Direct

Wire

to

In

foi

i

& 4041

Monthly

Postage

the

exchange,

subscriptions
made

Record

PHILADELPHIA

The Commercial and Financial Chronicle
4

tric

By DR. IRA U

Wagner

of

the Importance

transformers in the electrical

to

been

pretty de¬

a

with

payer

made

distribution

in

since 1934. There have
been also a number of "extras" in

By A. WILFRED MAY

50% stock dividend in
1954, 4%
in 1956, 3% in 1957;
and
2%
each
in
1949,
1951-53.

A BREAK-DOWN OF STOCK DIVIDEND MYTHS

every year

stock;

and distribution type

industry; and citing three

expected

are

dividend

cash

some

COBLEIGII

power

has

pendable

Enterprise Economist

Stressing

sales

motor

a

covered
by current earnings which should
Present $2

com¬

panies gaining stature by research and production of conver¬
sion devices that distribute, control and modify the flow of

total

is amply

rate

around

$4.35

this

Under the

continuing high popof
the
stock
dividend,
enlightenment of the investing,
pUblic concerning the true nature
—a
and
implica-

yeai

1957).

plans for expansion of its transformer business with a new plant
of the custom tailored to the special
built
outside
St.
Louis.
needs
of
electric
furnaces, plating, to be
electric power industry
is now
pipe thawing, brazing Capitalization is 1,011,584 common
well known and appreciated by welding,
and motor starting. Nor is this a shares (listed NYSE) preceded by
every investor from the small odd
slight or minute industry. On the only $3,495,000 in long term debt.
lot
buyer to
Present price of WEC of 42V2 indicontrary, manufacture of these
the portfolio
cates a yield of 4.44% on current
larger scale heavy duty power and

supervisors of
the
biggest

distribution

in surance

business.

anies.

that $750

c o m

The

p

1957

rapid and
in

size,

kilowatt

output,
earnings,
and

dividends
common

e

e

1

n

e

o

wned
Ira

t r i

c

utilities

U.

Cobleiffh

c

as

million was expended in
transformer

such

Kuhlman

pur¬

Power and

Florida
Light, Texas Utilities,

Electric

Power,

etc.,

is

already legendary. Equally, such

companies

Co.

Electric

b

General

as

Electric,

Westinghouse, Babcock & Wilcox,
Combustibn
Engineering,
I n c\,
have grown great and famous by
their development and manufac¬
ture
of
those
huge generating
units responsible for tripling (our
national
production
of
electric
power in the decade 1946-56 alone.

require,
voltage

,,

The

voracious

the

for

name

electric

an

wherein

combination

power

voltage,

wf
^fver^to $1^5

carried
of

each

on

*TWs

reoJesCnhul
inVt

a

nut

the

actual cash

rate per share

remained

well-nigh completely

y

serves

the corporation's total cash.

When

new

dividend-shares

dron

fnd &M*Vthe, distinction fol- Sb by paying

were

Wagner Electric Corp.
broad

a

of

line

electric

distribution
hydraulic

power

makes

bank of elevators in

brakes

for

motor

vehicles

^ ^ HiSSS'rftok S "extra" cash dividend once a year,
Far from constituting a longless

stock dividend,
%

.

Corp. of Chicago. For a six year
£
period enueu
ended Sept
30
1957
net j
JL ♦ vi
i-++i
pel1UU
oepr.
OU, li)D
t, nei
demonstrates that, like splits, stock

H

sales had increased ten iold.
this

ther '

,

company

5

aggressively

aeeiybsiveiy

has

increased

Fur-

managed

its

net

and

i

1 000

LOOKING FOR THE UNUSUAL

•
-

'

/

.

V

Commercial & Financial

■

.

v

'

pounds

to

15

-

V

'

.

and

...'

specially

designed

custom

buUt transformers which function

Chronicles, 1920-1945

in electrical

furnaces, plating and
battery charging rectifiers, welding,
brazing and pipe thawing
equipment and motor starting. So

"FOR SALE"

assured

is

the company about the

top quality and workmanship built
into its products that it offers the

Available in New York City—Write
Phone REctor 2-9570




sha^es resulting from the cliy

-5

idends, to avoid the inconvenience

provide

11 handling themoi < to

the e^uivalent cash income*
Fiction

The

Benefits'

of Tax

Likewise in exposing the fallacv

exposing,me fallacy

,7??

0f the frequently ascribed benefit
of

alleged

tax

'advantage

the

to

device .compared

stock-dividend

only

or

five-year

guarantee

in

the

Its

customers list reads like a
"Who's Who" in industry including Westinghouse Electric Supply

c/o Chronicle, 25 Park Pl. N. Y. 7

Co., General Motors, Ford Motor
.

.

v.

-

.

Continued

'nvorv

price,

lasting

f pioduce only tempoiaij

,.

to

vpiative

market

sains in

issup dpnend-

an

must sell a portion ot his equity
Iho fnrm nf ctnnlr Hivwhethei in trie torm ol stock ciividends or original holdings; in
nf

n;th^r

\uhir-h

hP

pvpnt

mv«

a

eith.?r, ol ybicn event he pays a

nthp?faptnrs
capital gains tax. And since he
8 !?• %ci lactois, siuch^as eain- plso pays
same regular mnigs, dividends, and growth factors.
W

come

rate

^ax

dividends

cash

0n

The market price which institu- received from his stock dividend
and other professional in- 11eceivea Irum ms siock aiviaenu
lloJ]ai anci
ie,1. professional ^ln
s}iares as on cash dividends from
vestors
e

tionai

constituting the

demand"

aeman5

marginal

vflue of esthnated

future earnings

estimated future cash dividends
jn

relation

risk,

inherent

the

to

"Thus," as he says, "broadening
0j- ownership and the enhancement
0£

market

.irp

in

the

the

case

of

,

..

.

_

long
on

run

,.

stock

ftock dcan in no sense
be conslde'-ed a devlce
to avold
sonai income
tax

on

panitai
4

cash

dividends,

the

or

gains tax

\

Affirmative Drawbacks
In addition to such

Barker

most

"negativistic"

usefully

splits,
,

cites

some

,

e St°,C

dividend tends to produce a relam

tax

either case, the

fimda-

.

ai

?!r,.JBajkfr
inciease

with thp

hnlrlin^s

ftoidings, wltn tne tax

same, m

nualitvdepiction
of erroneous beliefs, Mr.
duality.

invpstmPnt
investment

in

As
__

value

nr;1Tnr;iv dpnpndpnt

4mental
pnfa.

orJoinni

are willirm to nav for an
!-? I S
are wimn^ to pay ior an pifect the

the number of

/This demonstration of the continuity

form^d.v.d.nd mvahdaws^ih.
Exchange

and

others,

some

in

yield

o£ this stock dividend study " he prev.ousiy Pa,d stock dw.dend.
concludes, have I been able to n
fmd a ,?ingle .measurement ap-

Proach.tkat will show any proof
£ka£ s1oc dividends, in and of
themselves, enhance the market
Price of the stock.
The
T

j

i_

'

on

page

13

t

•

it.

i

20

Years with Wall Street

In de-bunkmg the widely-adBarker

Syndicate

Institutional Man.

^

vanced specific arguments justif^in^ the" declaration of stock
Mr.

AVAILABLE
Experienced
and

Cash-Saving Illusions

dividends,

business'

Edwin L. Beck

(l .V1

L,

nniv

nvnH„pp

stockholder needs more cash, he

whpthpr in

Shareholders, but 110 ascertainable demonstrations, of reducing the indicated
engineered real price change "In no aspect
to the

units includes power and distribution dry and liquid transformers;
'

|erm buoy to market-price, the
stock dividend has always seemed
to this observer a. drag on market
valuation—by reason of the increasing market supply arising
from the recipient's liquidation of
fhp, shar(ie rpcnitin« fL
hiv

This

tons

broad line of precision

ri;.nVi«nnc

managea stimuli

-

Beautifully Bound Set of

equal

an amount

£** Tr°e
?
25S
with
iSthe
lU
cash
"lform,
llZ does .he
author make an important coni^Son SS f;ier than °ne piece 0f dpuble-X tributiom Actually,1 when the

Wagner Electric Corp. manufac¬
tures

.

iows the "rtile oi 1humb" regula- to 10% of the quarterly cash divitions ^4 down by the New York dend by way of a J^end or

?'

big aluminum plant
motors
and
for example, far higher
intake than the power transformers;
a

In

dividend.

cash

cases

R9^ u,hV

net

■ihlmmmnn fhnS

^ t anrh n

multiplied

de¬

a

for

cash dividend.

a

,,

.

earnings in each of the past seven
years
and now has its largest
an
apartment or office building. machinery; and turns out parts
backlog of orders in history.
And individual home demands for and replacement units for brake
Precision
Transformer
Corp.
lighting, appliances, TV or air systems trn passenger cars, buses
on
-ic
arid trucks of nearly every make pnrrips
cames on
a hnsinp^c
business hpsnn
begun as
a
conditioning require a substantial
or model. Because so substantial a
sole
proprietorship
in
1938
under
further step-down from the raw
name
of
Prppi«5inn
WpIHpv
30 to 100 thousand volts singing part of Wagner's business is in the thp
automotive trade, its gross earn¬ Manufacturing Co. Present manalong the high tension lines which
ings have followed less faithfully agement under the leadership of
lace our countryside.
the
upcurve
in
electric
power Melvin S.Adler as president, took
Now all of these variations in
sales
than
some
other
electric over in beptember 1J50, and has
the type, quantity and intensity of
equipment makers. For example, done a notable 30b not only in
voltage
delivered,
depend
on net
sales crossed the $100 million the expansion ot sales and profits
transformers. These are, in turn,
mark for the first time in 1956; but in building up the reputation
assembly-line
produced
by
the
they were $95 million for 1957 and of Precision Transformer Corp. for
thousands for the smaller juice
will probably be something less the quality of its products. It has
requirements of radio, television,
specialized in the research, de¬
electric stoves, street and
store in 1958.
Business with the util¬ velopment and production of
lighting; but they have to be ities will rise this year while elec¬
heavy duty transformers Which
may range in price from $100 to
$30,000 apiece; and in weight from

needs

reen-

or

. A u s t 1m
produce mingham, Michigan, provides the
| .issued in this majority of cases,
electric industry with a broad line: •
probably .95% of all American
the same per-share cash dividend
of transformers;;;for utility from-'
riS-PP rate also was paid on the addi¬
heavy duty transformers. General
,
Trip,.4r:f.
A
WHired May
Electric and Westinghouse are, of panies in the wholesale transport- T
tional
shares, beginning in the
and allocation of power, and in
T11
.
„
course, the leaders, but a number
following quarter*. A $1.00 cash
distribution of power in steppedof dynamic smaller companies, be¬
down dosages for industrial, comthe July-August dividend rate per share on 1,000,cause of Unique talents in research
mcrcial and domestic usage. There '9®8.U^°Lthl?
0
shares
00swhen
sen
Harvard
maintained
isuB
after
and in low cost manufacture and
is also an Electric Furnace Divica 10 ... stock dividend, must them
^dependable delivery, have grown
cinn whifh i« in'trnriurim? thfc voir
Some of the misunderstandings be paid on 1,100,000 shares. This
rapidly. In many instances, they
have
become
recognized
and an interesting new product line, surrounding this dividend gadget involves an actual 10% increase
,,
u
'.are similar to those concerning in the total corporate cash payIn the past year Kuhlman has
sought after specialists in custom"cousin," the "bull market- out. Mr. Barker points out that if
built
electric
converters.
The
PiaCff!-{tfhappy"
stock-split. (Basically, the cash saving lor expansion is necstandard measuring unit, in defin¬
difference between the two lies in essary,
the corporation actually
ing the magnitude of transformers,
•?0?7
i«54
h
accounting treatment; but simply could conserve three times as much
is the KVA; and 1 KVA simply is

Moreover,, this power has to be
finally delivered in the rightof

dividends

companies

24

devices,

mands

partial

invalidate the general assumption
that the device in general con¬

_

units.

the

These data

by amperage, equals
below
1,000. By itself, 1,000 Voltage is of 87c a share
a
drop accounted for by a price
distribution of stock totaling
usually referred to as (1) KV.
rise posted in
late
1956
which
2 or
to be a
Now obviously we haven't space
caused customers to buy, in that
payment
or m0re
in this column to talk about all of
year, considerably above and in d
1
^
the 24 companies that variously
advance of their nearby requireRe-Slicing the Same Pie
No
letup in
this
astounding produce the transformers that step ments.
T
..
.
' ,
.
growth rate is in sight. We used up voltage from generating levels
As tot-il sales
sales weie
were onlv $5 865
,
vuas.total
only $5,865,much
of *fi?C
the public
seems unable
643.9
billion kilowatt
hours in of 10,000-50,000 to the 150,000 to
644 in 19o0, a substantial growth
of its head
at least
1957; and according to a most 300,000 volt range, most efficient vifp is -innarpnt hprp nnri fhprp to get out
-i
A'.
...
late
is
apparent neie and tneie
temporarily—tne notion, it with■
respected estimate by "Electrical for transmission; or down to the
seems
to
be
considerable
long variations that the ®ize and value
World" the requirements for the 110-600 volt, the standard utiliza¬
tion ranges. We propose therefore term merit in Kuhlman common of
the
pie
(i e.,^
the
stockyear
1970
will advance
to
a
now Quoted around
14V2 with an holder's stake in the company) is
staggering 1700 billion kilowatt to limit our comments to three
indicated 60c dividend, and an 11
enhanced by increasing the numhours. Now all this vast volume of companies selected on the basis of
year record ot
continuous divi- ber of slices (shares) through revoltage would be function-less their technical, corporate and fi¬
dend navment
i
oei or slices vs.uues; inioufcn ie
payment.
nancial
progress. You may not be
and powerless without our amaz¬
ducmg
their size
(proportional
ing techniques for power trans¬ very familiar with them; but that
Precision Transformer Corp.
interest
ot tne new certmcates),
mission and distribution to every fact does not deny to them the
Another company in this field
of
being
substantially
user from the biggest
industrial quality
has demonstrated
a
nhenomenal
e valuable and
plant to a remote lakeside cabin. undervalued.

sized

in-

they

were

a

unchanged.

Divi¬

dend s,"

Bir-

of

dividend

of

;

15%

given in lieu of an

are

of the

72%

a n

uation

cash

in

increase

"Eval-

Stock

Kuhlman Electric Co.

T

American Eiectric Power,
Houston

is big dividend.
that, note

of

study

supplement

dividends

a(j-

b y

n G w

in only

dividends

Rather do the data show that stock

This

arucie

to

that

stock

the

tirely to replace

^e-

js

224
in
in

mjrably filled

transformers

proof

used

fondly

is

needed.
wani

the

eluded

t^is

of

yjce

of

?Pmpany in

stock

prices of such
r

In

on

chases.

continuous

rise

tions

filianciai

growth

fabulous

'But it is found

uiarity

company
mannffsmont is
.. well
management
well retarded
regarded and
and
(against $5.93 in

high voltage electric currents.

The

Thursday, August 28, 1958

be lower.

Stepping Up the Snpply
Of Stepped-Down Power

'

...

(804)

renders

usful„ serv'ic,e- No
doubt the most commonly ex!?resst;d Justification for their use
ln PJaceof or as a supplement
to, cash dividends,
is linked to

§ar u?ul.lrly

the conservation of cash resources.

member

firms

known

...

buyers in U. S.
Write
mercial

C

Box
and

Chronicle,

well-

institutional

to

•

'
723

Com¬

Financial

25

N. Y. 7, N. Y.

Park

Piace,

Volume

of

188

Number 5772

the affirmative

tailed

in

the

of

.

The Commercial and Financial Chronicle

.

drawbacks

en¬

various ele¬

are

nuisance.

Steel

Particularly

Retail

State of Trade

stock

held, particularly when
dividends
are
paid
fre¬
quently
in
small
amounts.
To
calculate

capital
he

fractional

going

dilution

to

four

assigning total
shares.
*

factors,

decimal

the

on

holder

by the

receiving
stock

share¬
in

payments

they

whether

produce,

/cash; with considerable
expense to the issuing company,
and -also: to the recipient in brok¬
erage fees,''" ~
'

But

pervading and .'transcending

remained at
.;

related to the company's and

investor's,

of

such ; paper-distribution
actually
constitutes
investment-wise.
In

as ! the

most

above

"

-

;

:

'

Commodity Exchange, Inc., New
York, in celebration of their 25th
Anniversary

Astor,

Francis

du

I.

&

•

National
Rubber
and

Exchange

the

H id

Y.

C

Exchange, the
Exchange,
the

Metal

of

National

New

Raw

York

Silk

Ex¬

change were merged into one in¬
stitution for futures trading in
crude rubber, silk,
hides, silver,
copper and tin. Trading in silver
discontinued

was

ing

the

metal

in

1934

nationalization

the

by

and

futures

zinc

were

U.

S.

of

this

Government

markets

added in

follow¬

in

lead

and

1934.

Commodity Exchange, Inc. is a
membership corporation, with
memberships owned by individ¬
uals who represent a cross section
of the rubber, burlap, hide
and

/metals
well

trades

known

mission

and

most

brokerage

house

firms

of

and

with

in

the U.

com¬

branch

correspondents in
every
important city

Mr.

S. ancl abroad.

Rousselot

said

guest

speaker

and

ment

of

25th

Dinner

the

the

appoint¬

Anniversary

Committee would

be

an¬

R.

business
Fulton

•the firm

Jr. Co.

ciated
.

from

of John

Avery,

at

W., under
R.

Mr. Wilson has

with

secu¬

a

offices

Street, N.

name

]

geiamMly

'The

weekly,

Wednesday last.

of

expected,
reported on

products

Iron

national metalworking
Orders for a wide range

running ahead of actual production at many
higher operating rates and lengthening delivery
promises as new orders come in.
This trade journal predicted that steel operating rates should
reach the high 70's, that is, per cent of capacity, within the

mills.

This

next 40

are now

means

days.

1

-a'

of

the

of

role

waging a "no contract" war of nerves with
the United Auto Workers, steel orders from the auto industry are
still following a conservative trend, it added.
Orders for peak
auto

production rates have not been placed and delivery requests
are not yet far in advance.
It further stated that steel people are beginning to share
Detroit's labor jitters from the standpoint that even a short auto
strike could block the orderly recovery of the steel market, and in
addition, if the labor troubles are settled peacefully, automotive
orders

will

flood

sales

steel

offices.

react

by allocating their ingots
tending deliveries.
In

the

special report

a

steel

labor

will

have

to

tighter schedule and by ex¬

history stepped
came in wearing No.
back, and look what
happened'to the budget!
13

Wilson,

been

asso¬

Bohannon

for

drag-out fight, the hardest

one

since the famous pension battle

back in the late 4G's.

The magazine disputes published reports that
USW

David McDonald,
President, will step down at the forthcoming

convention.

toward
te

know very much about either the

pri-<

t

Bureau of the

Budget or the mak¬
ing of the budget. Some of these

in di! /;.<

private

sector

H.

Maurice

•1

-

uwLiw,

n

Third, it. casts up the 'relationship of national to state and local
responsibility.

tT

in

dent

the

long

upward

march

of

and

wage

.u

.

dent

Securities

Corpora¬

At

and

.

...

need

-■ • • •;
President. Pi*ior to this, each dethe re- partmcnt and agency had made its
States own estimates and sent them to

^

And

fifth,

it measures

of the United

age

of danger.

..

,

.

Congress through the Treasury

Department, / with

no executive
see why the budget branch review.
The Budget and
important a device Accounting Act of 1921 was one of
in
the
management of govern- the major steps in governmental
ment. In preparing and enacting reform since the beginning of the
You

begin to

has become

so

it, the whole anatomy of public Republic. While it added substanpolicy is laid bare. Issues are tially to the work of the President,
forced

to

Costs

resources.

lation

decision.

a

to

past

Needs

priorities

against

are

arc

and

stated in re-

performance

and

future goals.
1

the

will

say

Federal

diffieult
so.

that the making of
Budget is a tough,
It has always been
trying times it

job.

these

in

But

particularly hard, when the
budget is caught between international instability on the one side
and economic readjustment on the
seems

Budgeting

the

for

persuaded

to come

me

by Mr. Stans

agement in the United States,
To

administer

the

Budget and

Accounting Act, the law provided
for a Bureau of the Budget to be
housed in the Treasury Department but to report

directly to the

first Director was

The

President.

General Charles G. Dawes, whose
fame

as a

fiscal disciplinarian still

posterity. Let me read to you
a
statement
by
General
Dawes on the relationship of the

awes

from

in

"We

the

of

Bureau

7

are

Continued

on

page

A

UNOtRWRITNRS • BROKERS *

from

offices

at

John Handforth,

Treasurer,

and

Handforth, Secretary.




70

Of¬

Presi-

Leigh

DGAtXIlS

*

DISTRIBUTORS

"

^

-

/

'

'

-

the

in

j;V —^

rate

second

of

$429,000,000,000,

the

Gross

x-

•

-

National

quarter of this year was up $1,000,000,000

Dean Witter.

the preliminary estimate of a montn ago and was $4,000,000,higher than the first quarter level, the United States Depart¬

&Co.

reported.

Members

-

Pacific Coast Stock Exchange
American Stock Exchange
Honolulu Stock Exchange • Chicago Board of Trade
and other leading commodity exchanges

Midwest Stock Exchange •

In

the

automotive

industry

passenger

car

production in the

United States last week declined to its lowest level in
10 months, "Ward's Automotive
.

.

^

l

j-

more

than

on

Friday last.

Model changeover closedowns, the statistical

ported, held

car

output to

an

Private leased
'

Reports" declared

publication re¬
estimated 25,925 units, smallest total
Continued

on

page

26

radiotelegraph

circuit to Honolulu

SAN

FRANCISCO

•

the

not concerned with
matters of policy. The President,
Budget

Complete InwstmetitJServicq

fM

for

Budget Bureau of his day to the
When my President and the. Congress;

before the
Federal
Hospital
Executive
Luncheon,
60th Annual Convention of the American
Hospital Association, Chicago, 111.
address

♦An

foundations

the

government

is full of surprises, jtoo;

predecessor

laid

also

it

responsible, effective public man-

to

annual

an

,

^he
as we know it today
began in 1921 with the Budget and

New York Stock Exchange •

conducting its invest -

Street, New York City.
are

v

today

the full

the

ment of Commerce

ficers

••

you

•

*

progress.

/

use in labor nego¬
impact of public opinion, the economic outlook
end wage spirals. They also want to take full
advantage of the supposedly "difficult" position of McDonald,
"The Iron Age" concludes.

and

Hand forth

Wall

.

to
of these things clearer.

some
,

with

■
i
Accounting Act. This law, for the
Fourth, it mirrors the changing
^ time in our history, provided
public policy for defense, for a
comprehensive
annual
Tor security, for economic stabilbudget to be prepared and preity, and for responsible social sented to the
Congress by the

/'

Many steel leaders feel this is the time to

tiations

000

business

make

time

needs of

increases

fringe

which have pushed up the price of steel.

Handforth Now in N. Y.

ment

little

Federal

So,'I'm going to take

Government.^
a

over

.

people^ are right in the

Stans

the

of

''

I'm continually surprised to find
that a great many people don't

viduals land ,'|
the

Bureau of the

a

Budget
"

majority of the convention.

Product

now

my

Nothing could be further from his thoughts, the metalworking
weekly declares, or from his backers, who will have a comfortable

&

Beatty.

tion is

on

Why We Need

other.

steel labor, "The Iron Age" notes that
next year suggests a knock-down,

on

outlook

on a

Steelmakers

where

aside, and I

.government
•

: v a

weighed

With automakers

Office,

tor in the Bureau's

Second,Kit ;
philosophy

sponsibility

Age,"

year

Post

Probably McDonald's greatest headache will be the solid front

Wilson, Jr. is engaging in

3714

^department further declared that 614,500

in 1959.

Coming from
there is
always a deficit, this looked pretty
Inviting. So then the 12th Direc¬
the

/Con-';

-expresses

the steel industry will put up against him and his ordinarily high
demands. This is the time, many in the industry feel, to make a

Wilson Opens

WASHINGTON, D. C.—John R.
rities

beginning to be offset by recalls!

..The. fall pickup in steel orders is moving ahead faster, than

-

"

nounced later.

J.

:-good

to the rest of the free world in an
«;

United Sleelworkers

that

the

are

made available earlier this year as an anti-recession step..

the

offices'and

practically

'

Commodity
Exchange, Inc.

N.

department noted that the decline in workers seeking
jobless benefits was largely seasonal. Food processors normally
stait hiring more workers about this time of year, it explained,

ussjfci!!'^ unemployed. -The

*

1933 when the
H. A. Rousselot

% of !

-

formed in

and. the

earlier filings of 191,000 workers.

industry layoffs

.

'gross.1
•

was

"pf vthese .workers; 31,600 more than in the -preceding: week; were;
^receiving additional benefits in the week ended Aug. 9. These
an¬
extra benefits were being paid by the states with Federal funds
r

nounced.

was

This

Co.,

/•'President,
-

Aug. 9.

.

ship between 1
:the President b

'

built -up and the prospects for a

r

the ^relation-'

,r>

into the Budget Bureau, he
pointed:to the nice surplus he had

It

'b^d.gCFMs;.a
ref le'ctroir
of/"-J

-

of workers needed for production of 1959 model cars.
:pViThe figures, however, fail to reflect the number of workers
who have exhausted: their jobless benefits even though they are

A.

-Housse 1 ot,

labor: force; in' the; week ended

while auto

the

Hotel

Pont'

:

Ball¬

-Ha rold

'■

The

Thursday,
Oct 9, in the
of

slight decline In activity :

a

a

major, test of perspective.
has many dimensions.
First, the

that overall retaft

' OfficiaLy'said workers'. gettihg joblesSz pay/ madeJup;

the

year

guests on

room

is

t

sation in the week ended Aug. 16. This was down 36,100 from the
week earlier total,- but was substantially above the comparable

will hold a gala
reception and dinner for members

Grand

...

discovered that budgeting
for the United States Government

down from
5.0% a week earlier and 8.1% in April, at the height, of the busi¬
ness slump, but
was Still far above the 2.9% of a year earlier,
k.-*The agency reported that only 288,800 workers, the fewest
since last November, filed new claims for unemployment compen¬

year,

and

retailers reported

preceding.,'N

-

:

I have

workers were* drawing- unemployment compensation
a
decline of 58,800 from a week earlier, but an increase of
J,090,600 from the like week in -1957.' !'!'.' !'.v. •vV"

'y,

Commodity Exchange
Anniversary Dinner

level close to that of the week

In retail trade,

„

-

^

2,283,300

assuredly are

constructive!;

grammar on the development of Federal
budget and budgetary
practices, explains the strictures utilized in screening competing
expenditure requests on behalf of the President, and makes
clear-that Mwe must put discipline into
practice in our
; Federal budget.

-

The employment situation for theweek'ended •Au§.'9,"accord-'
ing • to the United States Department of Labor, v;sIibws that

'affording' such basic clarification,
data's

a

-

what

:

> v

.

the past .week,- -but indicated/
that of the llk$ period; a

interest, is his funda¬

mental

:

,

\
%■;.! In keeping with the. current trend the wholesale Tood price;
index compiled .by Dun - & JBradstreet, Iftc., registc^ed further
declines the past week, While its wholesale, commodity
^rice index

the importance of all these nega¬
tive.elements of the device which
are

a
leap to a balanced budget in 1960 but that
continuing economic recovery there are hopeful prospects
of working our
way back. The former banker provides a brief

more than ten monthsvdue ^o model
changeover closedowns. It was the smallest total since the week
tended Qct;5,; 1957 when21*975, unitsWCTp assernbledlhapreviotisK

K changeover period.

fiscal year

Budget cautions

with

'

or

1960 the thirteenth Director of the

there will not be

.

drppped.tqits iowest pqiirt. in

via
•

scrip

1959 to

in the week and stood at its
highest level since mid-June and, :
according to "The Iron Age," in its release yesterday, "the fall!
pickup in steel orders is moving ahead faster than generally
expected."
-:-v!; /;!!;/%*•;'•••:!/!!'.•' ■?"!!:*■'%!!!■!!!•!!/K;!%
.In the. auto, industry, however, ■
passenger-car^ production ,

;

,

Looking beyond the $12 billion deficit estimated for

Last week steel production exceeded the rate forecast earlier

settling the fractional-share inter¬
est

Industry

Director of the Bureau of the Budget
Executive Office of President, Washington, D. C.

J)

in

•

By MAURICE II. STANS*

Index

Business Failures

often

places,

''bloody nuisance" is in¬

a

flicted

Price

Auto Production

and

average cost to old

>

Also

Trade

Commodity Price Index
Food

gains
for
tax
apply minute

must

V

Output

Carloadings;

stock

purposes,

Making the Nation's Budget
And Budget Outlook for 1960

Production

Electric

burdensome to the small investor
is the job of
determining the cost
of

5

(805)

stock-disbursement

procedure. There
ments

.

IOS ANGELES

•

NEW YORK

'

18 Officii Serving Investors

•

CHICAGO

24

The Commercial and Financial Chronicle

6

.

.

Thursday, August 28, 1958

.

(806)
eral Reserve Bank of Richmond.
Problems
Neither
of
these
presentatiions
general problem oL
attempted to attribute- the blame
inflation ran through all the hear¬
for inflation to one specific ele¬
ings, it has naturally become the
ment.
'As
Chairman
Martin
central theme of these reports. In
pointed out, "Inflation is a process
fact, I am convinced that it has
in which rising costs and prices
become our basic long-time eco¬
mutually interact upon each othdr
nomic problem and that until we
over
time
with
a
spiral effect.
as a people understand the danger
At the same time, demand must
it creates and take the necessary
always be sufficient to keep the
steps to stamp it out, we cannot
spiral moving."
7
count on a future of sound growth
Basic Long-Time

The Problem of Inflation
WALLACE F. BENNETT*

By HON.

Utah

U. S. Senator from

about vice has similar

Pope's lines

finds

Bennett

Senator

applicability to inflation which "we first endure, then pity,
then embrace." The Senator summarizes Senator Byrd's finan¬

single, unifying thread, infla¬
tion, which he declares is our basic, long-term problem now
complicated by the fact that it exists in an unprecedentedly
more dangerous setting than ever before.
Those who believe
inflation is needed to further economic growth are challenged
cial

and devines

hearings

a

and

period in

any

The

United
from

States.

June

through
'19

hearings

its

completed

.

Committee

Finance

Senate

the financial

on

condition of

The

the

sessions, held

phrey and Randolph Burgess, then
Treasury, were the

nesses;

Martin

year

the

of

year,

f

o

fiscal and

monetary pol¬
icies since the
one

conducted

by

the

Ald-

rich Monetary
in

As

1908.

of

a

the

Wallace F. Bennett
Committee I sat

the

nearly every session
hearings and heard most

the

testimony.

through

In the absence

of

formal

a

of
of
re¬

port, I want to present my own
impressions of the material pre¬
sented

the

to

ideas

Committee and the

the question¬

in

developed

ing. I do this in the belief that the
•material

these

covered' in

heaiv

be of interest * to
every member' of the Senate. The
hearings shed light on some of

;ings

the

should

most

basic

problems of

our

problems with which we
Congress are concerned every

economy,

in

day, and which affect every per¬
in

son

United

the

Rather

States.

summarize these hearings in

than

I shall make

long statement,

one

several, of which this is the first.
The purpose of the
outlined by Committee

Harry

F.

B.vrd

study was
Chairman
his introduc¬

in

V

tory comments last year:
"To
and

existing

the

study

situation

interest

credit

and,

more

important,
inflation
which
has
started
again with its ominous
threat to fiscal solvency, sound
money,
and
individual
welfare
..

This committee

.

stable currency.

"It

is

never

can

.

.

.

committee's

the

conduct

year

Federal

McChesney Martin again;
Sumner. Slichter and

an

purpose

objective

exami¬

utilization7 of the labor force

full

capital goods boom. Since
that time we have experienced a
business downturn, characterized
and

by

a

slump in private capital in¬

a

and

vestment

Detects

Single Unifying Thread

left the door open
sion

was

of

a

wide

encountered

in

Nevertheless,

discussed.

and

the

reviewing

printed record I have been im¬
pressed by the fact that there was
a

single unifying thread running
all
of the discussions;
was

the problem of

in¬

contingent liabilities;

ful?

procedures

employed

in the management of
public debt and the effect

thereof

credit,

on

the

interest

Nation's

which

the

and

availability

rates,

..

they

apply
private debt."
The
year
one.

*An

Senate

list

of

public

and

witnesses, both last
was

Last

year

George M.
Sen.

diminish

this

spring,

an

imposing

Bennett

FIooi*




inflation

did

during the hearings
despite the business
downturn and a slowing down of
the rate of the price rise. A scru¬

were,

first,

Hum¬
on

the

whether

anti-inflationary
was

or

policy

not

of

the

1957

primarily responsible for the

current

this,

by

not

over

will indicate that the major issues

distribution

and

address

Concern

influence

.

to

anti-inflationary action then
being taken necessary or harm¬

tiny of the testimony and ques¬
tioning during these later sessions

of credit and interest rates there¬
as

•

her

feed

and

costs

of

would' only

in a rising spiral
prices.
To accept

itself

on

it

jobs;

not7 create

of using

greatly

were

possible means to-combat it
would be to apply to our economy

con¬

members

spent

the

inflationary

all

of

greatest

pressures — the pressure of in¬
flation psychology. Expecting con¬

face.

,y77y:-7/

v

the

hearings it was the simplest.of
the definitions which gained

all

the most acceptance; namely,
inflation is simply a general
in

prices.
In looking

the

all of the defi¬

fact

suggested

in

Mr.

If .the

money.
For ex¬
in his testi¬
inflation
as
an
and.
disproportionate

Baruch

defined

abnormal
of

increase

business

downturn

and,

second, the extent to which anti¬
recession

action

should

take

into

account the danger of further in¬

flation.

tax,

impressed by*
flation
many 7 of
them

of

phenomenon
mony

knowing that,

had

sharing the burden.

am

that

of

only consequence of in¬

was

transfer

of

the slow but insidious
-resources

from

one

to another some of us might
possibly resign ourselves to the
process and provide for relief by

"too

few

goods."

it.

nesses

result

a

as

by some wit-'
of

pressure

for

those

inflation

But

has

affected
other

by

con¬

inflation in the business world are

by

Har¬

defi¬

rejected the monetary

nition

store of value inflation stimu¬

lates the

which

costs, particularly wage pressures."

Thus, Professor Slichter of

and gamblers.
Also,
destroying the use of money

speculators
as a

on

vard

their-

that

'

see

swallowed

up

rises

wage

are

by - rising prices.
price creep will

legislation

dollars chasing too
On the other hand,

described

was

tinuing rise in prices, will ask for
larger wage increases
(or-insist
011
escalator clauses) when they

gallop. This is simply an applica¬
tion
of
the. homely
truth that

it should also be noted that infla¬

tion

responsible for the con¬

is largely

Hence

money

many

ple become alarmed and take steps
to protect themselves.
The labor
unions themselves, whose policy

group

and credit in
It provides a-'misdi¬
relation to the production of goods,, sequences.
rected stimulus for business. Any¬
and services. At other times dur--,
one
who
has
been
in
business
ing the hearings,
inflation was
knows ! that
sound 'business
defined as "a flow of spendings
decisions
are
made
within
a
in excess of the flow of goods and
framework of price stability; and
services," or "too much money for/
that the principal beneficiaries of
the goods and services offered,"
or

and more peo¬

in succession, more

no

even

nor

been in the form
others would also be

if the levy
of,-a

over

output,

satisfaction

the
„

•

inflation

of

that
rise

future

to

them

leaving

themselves,

ing

claim

of

production of other items

can

Thus

tion.

the

serve

we

same

func¬

must devote

energies

our

articles which

"inaccurate," adding "the
helping the public see
more clearly than ever that rising
wages
are
a
principal cause of
as

we

a part
producing

to

would not have

needed in the absence of inflation.

recession is

and

economy

welfare; and
"(3)
Factors

on

centered around

questions; first, how could in¬
flation
be stopped and,
second,

was

and

fully utilized, much

were

of the discussion

two

and

cepted as a permanent feature of
American economic life, it would

very

ample,

sources

Policies

they

the 7 Comftiittee

seems

pects of the financial condition of
the United States, the Committee

"(1) The revenue, bonded in¬
debtedness, and interest rates on
public obligations, including

the

it

agreed that inflation is basically a

inflation, and to establish flation.
sound
fiscal
principles flexible .7 During the summer sessions in
enough to meet possible reces¬ 1957 when
prices were
rising
sions as well as increasing pros¬
fairly rapidly and most of our re¬

all

While

,

every

cerned with the causes of inflation

setting for itself the prob¬
lem of investigating so many as¬

In

further

"(2)

review

a

the hearings,-I

through

The study as announced was to

and Practice
Regarding Inflation-

tee devoted little or no time to

nitions

this thread

examine:

•

creeping inflation were ac¬

"If

•

unemploy¬

some

ment.

be

perity.

the Com¬

V

-

nation to clarify the situation and

helpful in the effort to avoid

mittee:

this 7 We first endure, then pity, then expanding the volume of producr
tion and improving the attractiver
Seymour Harris of Harvard Uni¬ aspect of the problem, probably 7 7
embrace.
ness
of their products, so as to
versity; and Dean Charles Abbott because most of its members are
It is .a simple fact that inflation maintain
high levels of employ¬
of the University of Virginia, in in agreement that inflation is an
results in. a transfer,of economic
ment,
would require
continued
evil whether it be judged on moral
that order.
resources.
Perhaps in theory we expansion of money and credit.
or 7economic
grounds.
Instead,
In addition to verbal testimony,
can imagine a situation
in which Thus the inflationary spiral ;and
most of the time was devoted to
the
Committee sent a list of 17
as
prices rise ;ail incomes rise at the profitless prosperity would be
the definition
and mechanics of
questions on basic economic ques¬
precisely
.'the
correct
rate
and all accelerated toward inevitable col¬
inflation.
tions
to
outstanding
economist
money
contracts change to just lapse."
In
its
search
for
information
in
businessmen, and public leaders.
the right degree, so that there is
Professor Haberler of Harvard
Replies have been received (and this field, the Committee literally no loss suffered by anyone/ But
University had this to say regard¬
began
at
the
beginning.
It
sought
published) from the presidents of
in real life, such a situation does
ing the dangerous creeping infla¬
the twelve Federal Reserve Banks,
throughout the entire course of not and could not exist. There is
tion: '■
"/•>"
-7*7
..''7 '
the hearings to find a workable •«
the presidents of 28 U. S. corpora¬
simply no way of avoiding the
"I
admit that the present
tions, 12 trade association leaders definition of inflation. Most of the fact that in an inflationary process
method
of
wage
fixing
and
the
and 17 economists. .The question¬ witnesses were asked for, or vol¬
some gain, on net balance, while
attitude
of the powerful trade
naire was also sent to veterans' unteered, a definition and likewise
others
lose; and
the losers are
organizations and to labor leaders a request for a definition was in¬ those least able to protect them¬ unions, which expect every year
a
large wage rise exceeding the
John L. Lewis and George Meany, cluded among the questions sent
selves 01: to make their Voices
average annual increase of labor
to business and
but they did not respond.
university econ¬ heard:
pensioners, savers, white
omists and to the presidents * .of'productivity, poses a serious diIt is interesting to note that the
collar workers, small businessmen,
; lemma.
But the problem qannoj;
the Federal Reserve banks. The
two sessions of the hearings, last
the
great body of unorganized
Committee
never
attempted to workers. And the thing that hurts be solved by acquiescing in a con-7
year and this, were held under
tinuous rise in prices.. The trouble
make a final selection from all of
is that the transfer is involuntary.
entirely different economic con¬
is that when prices rise by only
these answers, but I-think it is
ditions. The setting last year was
Resources are literally stolen from
2 or 3% per year for a few;years
probably true that by the end of those who have no way of protect¬
one of inflation, characterized by

for the discus¬
variety of issues.
Therefore, it is not surprising that
virtually every question or topic
lose bearing on the Nation's finances

sight of the fact that the Govern¬
ment's integrity depends upon a

to

such

.

Commission

member

This

Professors

ex¬

amination
our

appeared.

Bernard Baruch; MarEccles, former Chairman
Reserve
Board;

S.

the

William

intended

be the first

full-dress

also

statesman

riner

this

to

and Federal Reserve Board
William
McChesney

Committee heard from elder-

d
d u ring April of

.a n

were

main wit¬

Chairman

18

Aug.,

last

of

and Undersecretary

Secretary
the

Electric, in his reply to

.

growth and prosperity.

recently

the inevitable devel¬

see

tinued price increases, businesses
little -time on questions .hav¬
and
individuals y would " have 7
pointless to consider the separate ing -to, do with its consequences.
basic issues developed in the hear- It is. precisely here that its great¬ continuing i n c e n t i v e to spend
ings., '
;
7 ■ 7-": Rf
V est danger lies. We are all against their money before its value de-j
To me, the most serious aspect
it in theory, as we are against predated further, and would thus
be
tempted into a flight from
of inflation is the
m<j)ral one. In¬ sin; but in practice some of us
flation is essentially a proces_s by
think we can, profit. by /it. - Too money. The inadequate volume of
characteristic of the
which someone attempts to get often Pope's lines on ..vice can also purchasing
something
for
nothing—a
di$-, be used as an accurate description -current recession .would be reiguised form of theft—in which the of our attitude toward inflation: placed by an increasingly excesr
sive rate of /spending,
with far
poor and helpless are the first vic¬
; Vice is a-monster of so frightful
more destructive effects.
The voir
tims, but which can eventually en¬
■,;> 7 mien/ '7 7:7 /
ume of savings would continually
gulf a whole economy. It is a nar¬
74s to be hated needs but to be
diminish, cutting off the only real
cotic which produces the illusion
seen:
;;7/:'/77777v7source
of investment funds.. The
of prosperity and growth; conceal,
$tet seen too oft, familiar with .efforts of businesses to continue
ing the real damage. The Commit¬

Without

bring America back to economic reality—the path to sound

to

The /Theory

7

gathered a great
variety of material on the' general
nature of the problem of inflation,
and
I shall
begin by reviewing
this background'i n f or m a t i-o n.

our

will

we

opment of a completely destruc¬
tive wage-price spiral. Said Ralph
J. Cordiner, President of General

creeping inflation instead

prosperity.

The Committee

history when we had price stability
which was not accompanied by substantial economic growths
Calls for courageous confrontation of this problem in order
find

to

-

Because the

A

current

good

concentration

of

example

is

investment

the
in

partly filled office and apartment

Similarly, Dr. Ab¬
bott, Dean of the Graduate School

rising prices."

buildings in some Latin American

countries—which capital is with¬
of Business Administration of the '
held from productive industry.
University of Virginia, emphasized
that
our
current
Finally,
a
creeping inflation
problem is a,
must, in the absence of specific
"wage-push inflation."
Personally, I believe it is possi¬ controls or other unwarranted in¬
ble to oversimplify any specific terference
by
Government, be¬
cause of inflation.
For that reason
come a run-a-way inflation.
Even

the

soon

become

trot

a

while

you

some

of

the

and

fool

may

the

time

trot

a

people

all
and

some

(though not the same): people all
the

time,

4

"It

been

has

all

fool

cannot

you

people all the time..

•

».

objected

to

7

•

.

that

that a galloping infla¬
impossible in the United
I am
inclined to accept

argument
is

tion

States.

proposition, but I submit that
the point. Why is gal¬

this
it

misses

inflation impossible?

loping

Federal

the

cause

Reserve

Be¬
will

keep money sufficiently tight to
prevent inflation from galloping
away.
But what the advocates of

creeping inflation overlook is that
after a while the mere attempt to
keep inflation at a •reeping pace
(to prevent the creep from becom¬
ing a trot or a canter) will be
suffering
[sic.]
to bring about
This

all

after

is

depression.

and

unemployment

what

happened

'

I

impressed with the discus¬

was

sion

of

the

inflationary process
in the opening statement of Chair¬
man

Martin of the Board of Gov¬
in

his

the

inflationists

the

time

of

the

hands

comes

fear

that

this.
a

When

majority

people
throw up their
resignation and accept

in

the Committee in 1957, which was

inevitability of rising prices,
inflation will immediately cease

supplemented by

to creep.

ernors

count

of

given

by

First

appearance

an

excellent

inflationary

Mr.

Edward

Vice-President

"before

of

ac¬

processes

Wayne,
the

Fed¬

the

For just as soon as those
who have a stake in inflation can
be
has

absolutely certain that society

becomeresigned to the process,

last year.

The advocates of creep¬

ing inflation themselves blame the
tight-money policy for the present
depression.
I personally would
say

tor

that it was
but let

—

sake,

a

the

contributing fac¬
for argument's
proposition that

me,

accept the
main

it

was

is

indeniable

that

cause.
a

Then it

policy which

held the inflation at a creep
did

not

do

more

than

—

that

it
—

on
unemployment and
depression. If money had been less

brought

Cnntimiprl

nn

none

22

<illl)llllllllllli

=

New Issues

3

%%Serial Bonds

Doted

September 15,. 1958. Principal and semi-annual interest (March 15 and September 15) payable to New York City at the Office of the City Comptroller
Coupon Bonds in denomination of $1,000, convertible into fully registered Bonds in denomination of $1,000 or multiples thereof, but not interchangeable^ > /
,

iiill
-

Interest

Exempt from federal and New York State Income Taxes under

Existing Statutes and Decisions

;

Legal Investment for Savings Banks and Life Insurance Companies in the State of
New York and for

Executors, Administrators, Guardians and others holding

Trust Funds for Investment under the Laws of the State of New York

%
AMOUNTS, MATURITIES AND YIELDS OR PRICES
Yields

Prices

V

Amount

to Yield

Amount

$3,600,000

1959

1.60%

3,600,000

I960

2.00

3,600,000

1961

1,800,000

1962

1,800,000

1963

2.25
2.50
2.70

1,800,000

1964

2.85

Prices

or

$1,800,000

1965

3.00%

1,800,000

1966

3.10

1,800,000

1967

3.20

1,800,000

1968

100

9,000,000

1969-73

99

(Accrued interest to be added)

The above Bonds

are

offered, subject to prior sale before or after appearance of this

issued and received by us,

The First National City
Bankers Trust Company
Harriman

,

Incorporated

.

Lazard Freres & Co.

Kidder, Peobody & Co.

'

'■

*

.

'

.

■"

'

"

v

*

'

*

*

The Marine Trust Company

''.

i

*

W. H. Morton & Co.

Federation Bank and Trust Company

W. H. Morton & Co.
Incorporated

'

Incorporated

The First National Bank

Dean Witter & Ca.

L. F. Rothschild & Co.

Bache & Co.

Dominrck & Dominick

' Braun, Boswortb & Co.
Incorporated

-

:

.

Pollock & Co., Inc.

Ernst & Company

?
-

•

First National Bank

Fitzpotrick, Sullivan & Co.

August 27, 1958.

B. J. Van Ingen & Co. Inc.

J. A. Hogle & Co.

Ira Haupf & Co.

R. S. Dkkson & Company
Incorporated

E. F. Hutton & Company

in Dallas

Rauscher, Fierce & Co., Inc. Trust Company of Georgia -Weeden & Co.
Incorporated




F. S. Moseley & Co.

Gregory & Sons

of Oregon

Incorporated

'

•

.

Swiss American Corporation

Incorporated

Roosevelt & Cross

•

<

Blair & Co.

Schoellkopf, Hutton & Pomeroy, Inc.

A. G. Becker & Co.

Company

Ladenburg, Thalmann & Co.

Hornblower & Weeks
*

Blair & Co.

of Western New York

Paine, Webber, Jackson & Curtis

Merrill lynch. Pierce, Fenner & Smith

"

.

Carl M. Loeb, Rhoades & Co.

and Trust Company of Chicago

.

I

...

Bear, Stearns & Co.

^

Continental Illinois National Bank

• - •

White, Weld S Co.

R. W. Pressprich & Co.

...

.

j,

•

f

Equitable Securities Corporation
*

Wm. E.

Salomon Bros. & Kutzler
'

Karris Trust and Savings Bank

The Northern Trust Company
'

Drexel & Co. : ;:

Baxter &

J. P. Morgan & Co.

Manufacturers Trust Company

C. J. Devine & Co.

Smith, Barney & Co.

Chicago

Barr Brothers & Co.
;

s
i

of New York

,

The first National Bank
of

Guaranty Trust Company

Chemical Corn fxchange Bank

New York City.

Tire Chase Manhattan Bank

Bank of New York

Lehman Brothers

Ripley & Co.

Incorporated

advertisement, for delivery when, as and if

and subject to the approval of legality by Messrs. Wood, \King & Dawson, Attorneys,

Chas. E.Incorporated
Weigold & Co. Robert Winthrop & Co.

3

The Commercial and Financial

(80S)

Chronicle

Thursday, August 28, 1958

.

.

.

COMING

Dealer-Broker] Investment

EVENTS

Notes

NSTA

Recommendations & Literature
It

«

understood that the firms mentioned will be

Association

send interested parties the following literature:

to

effective advertising is not an
insurance against the loss

40—Including number of radioistope users

advertisement

Inc., 1033 30th Street, N. W., Washington 7, D. C.

tional

120

Burnham and
Company, 15 Broad Street, New York 5, N. Y. Also avail¬
View

Monthly investment letter

—

*

for Japan

Outlook

Economic

week

This

[/

Analysis in current issue of
Securities Co., Ltd.,

—

Sept. 18, 1958

nament'and

one

Tisch

F.

Alfred

Ohio)

Municipal Bond Dealers Group
annual outing — cocktail and
dinner party Thursday at Queen

P. Fred Fox

City Club; field day Friday at

NSTA Year-Book.

York 6, N. Y. Also in the same issue is
analysis of Japanese Food Industries and Chemical Fibers

61 Broadway, New
an

ALFRED F. TISCH,

and Non Ferrous Metals.

Finance

in

Perspective

—

Review

Scotia, Toronto, Ontario. Canada.

-

,

-

.

on

Government of Canada and the Provinces—Comparative
as

con¬

Japanese Stocks—Current information

Co.,

Options

Schmidt &

—

Booklet

on

how

to

use

them

—

—

Vilas &

Comparison

Samuel

&

Co.,

115

Filer,

Foundries

Dominion

Wall

Broadway, New

Fischer

&

annual

Steamship

Should Know

Living—Booklet—National

& Research

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

Rising

About the

Securities

the Professional

Connect¬

dinner

Also available is

Man

Afford

&

a

Gillette

to Work

Company

—

*

•

•

Broadcasting-Paramount

Theatres,

Anniversary Dinnerat the Hotel

........

Astor.

Oct. 25, 1958

Industrial

dum—Woodcock, Hess, Moyer & Co., 123 South Broad Street,
Philadelphia 9, Pa.
American Investors

Hardware

Markell

Pierre.

Report

—

—

(Chicago, 111.)

Nov. 7-8, 1958

..

Manufacturing Co.

York City)

(New

Security Traders Association of
New York annual cocktail party
and dinner dance at the Hotel

Chemical—Analysis—Halle & Stieglitz, 52 Wall Street.
5, N. Y.
/
.

Silver

Commodity Exchange

Corp.—Analysis—Ira Haupt

.

.

(New York City)

Oct. 9, 1958

Report r—Thomson & McKinnon, 11 Wall

New York

Inc.—Memoran¬

etc.,

Governors

of

Board

Firms

Street, New York 5, N. Y.

-

American

<>>■, :v

■

meeting at Somerset Hotel.

Amateur.
Hooker

-r

(Boston, Mass.)
Association of Stock Exchange

York 6, N. Y.

Co., Ill Broadway, New

r

Oct. 6-7, 1958

13, Ohio.

Street, Chicago 4, 111.

golf,

evening;

that

Friday.

*

American Transportation

General

Cost of

Corpora¬

outing at Oakwood Golf

Country Club: cocktails and
lunch at Eddys Thursday and

Co.—Memorandum—The Illinois Company, 231

La Salle

South

of the In¬
Association

&

,

Terminal Tower, Cleveland

Bankers

vestment

Co.:—Memorandum—Saunders, Stiver & Co.,

Porter

(Kansas City, Mo.)

2-3, 1958

Southwestern Group

Corp.—Memorandum—Oppenheimer Sc
Co., 25 Broad Street, New York 4, N. Y. '
^ ,

Foote Mineral

Lines, .1000
icut Avenue, N. W., Washington 6, D. C.

an

Co. Incorporated, 39

Eastern Stainless Steel

American

Broadmoor.

the

— Analysis —
McLeod,
Limited, 50 King Street, West,,

Street, New York 5, N. Y.

U. S. Government Insured Merchant Marine Bonds—Discussion

booklet entitled

Chicago 3, 111.

Schweickhardt & Co., 29

Industries—Memorandum—R. W. Pressprich & Co., 48

Dresser

'

Every Woman

—

Steel, Ltd.

and

Young, Weir & Company
Toronto, Ont., Canada.

Hickey, 26

Stocks—Analysis—du Pont, Homsey & Company, 31 Milk
Street, Boston 9, Mass. Also in the same circular are analy¬
ses of Jaeger Machine and Union Pacific Railroad.
of

Report

Craig System, Inc. —Report — Leason &
South La Salle Street, Chicago 3, 111.

Steel

—Committee

try Club.

Sept. 29-Oct. 3, 1958 (Colorado
Springs, Colo.)
National Security Traders Asso¬
ciation Annual
Convention at

Oct.

York 6,

as

f

Broadway, New York 6, N. Y.

Special Reason List—14 stocks and reasons they are considered

E.

-—

As-

"Fling - Ding*'
at the Mauh-Nah-Tee-See Coun¬
annual

sociation

-

Company—Analysis—William Blair &

Cosden Petroleum Corp.

Broadway, New York 4, N. Y.

interesting—Ralph
N. Y.

Rockford Securities Dealers
'

<

Street, New York 5, N. Y.

Company, 335 South La Salle Street,

Allegheny

the

at

Sept. 26, 1958 (Rockford, 111.)

&

Also i

6, Calif.

Outing

Country Club, Sewickley, Pa.

Gladding, McBean & Co.

on

Continental Assurance

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

Railroad Income Bonds

What

report

a

San Francisco

Street,

Loeb, Rhoades & Co., 42 Wall

up-to-date com¬
parison between the listed industrial stocks used in the DowJones Averages and the 35 over-the-counter industrial stocks
used in the National Quotation Bureau Averages, both as to
yield and market performance over a 19-year period —
National Quotation Bureau, Inc., 46 Front Street, New York
4, N. Y.

Over-the-Counter Index—Folder showing an

Call

Fall

American Potash & Chemical Corp.—-Mem ora n dum—-C ar 1 M-

New York.

&

Construction Co.—Reports—Dean Witter

&

Montgomery

45

available is

Company of New *York, Inc., Ill Broadway, New York 7,

Put

Pipe

American

Yamaichi Securities

—

Bond Club of

Peoples Gas Light and Coke.

Incorporated, 2 Wall Street, New York 5, N. Y.

(Pittsburgh, Pa.)
Pittsburgh annual

Sept. 26, 1958

in current "Investment Letter"

—Hayden, Stone & Co., 25 Broad Street, New York 4, N. Y.
Also in the same issue are discussions of Speigel, Inc. and

1957—A. E. Ames & Co.

of March 31,

Motors—Discussion

American

Country

outing at the Cleveland
Club. ■ '

-

46 is¬

.

densed statements

•

...

sues—Kidder, Peabody & Co., .17 Wall Street, New York 5,
N. Y.

-

>

New York 5, N. Y.

40 Wall Street,

Stocks—Semi-annual results

Fire Casualty Insurance

Sept. 26, 1958 (Cleveland, Ohio)
Bond
Club of
Cleveland fall

Committee

c/o Fitzgerald & Company

Bank of Nova

—

Maketewah Country Club.

Chairman

National Advertising
•

Federal

Colcnia, N. J.

Sept.18-19, 1958 (Cincinnati,

P. Fred Fox, of P. F. Fox
& Co., Inc., who has again
placed a hall-page adver¬
tisement for his firm in the

Nomura's 'Investors Beacon"—Nomura

Colonia

outing :at

Country Club,

salute

we

Tork City)

(New

Corporate Transfer Agents' As¬
sociation 12th annual golf tour¬

the next.

36 Wall Street, New

Co.,

Industry—Bulletin—Bache &
York 5,IN. Y.

Drug

Uni¬

by dinner Sept. 11 at the
versity Club.
;

from coast
issue to

tables

coast from

to

Inc., 465

Slocumb & Co.
California Street, San Francisco 4, Calif.
.
Stocks—Analysis—Brush,

Chi¬

of

annual field day at Elmhurst Country
Club; preceded
cago

Year-Book

trading

able is current Foreign Letter.
Chemical

Whyte's

at

Club

Bond

Municipal

Na¬

issue
of
the "Commercial and
Fi¬
nancial
Chronicle" pays
dividends for it remains on

—

and installa¬

s

Sept. 12, 1958 (Chicago, III.)

other

the

in

office r

of

Restaurant

Security Traders As¬
Official Conven-

tion

Broadway, New York 5, N. Y.

Burnham

expense

is

sociation

Corporation,

Hanseatic

York

Market—Discussion—New

Bond

tion

it

fighting for., An

is

fellow

the

that

business

of

3953; discussion of acceleration of atomic power con¬
struction in Europe —Atomic Development Securities Co.

since

of

kers annual dinner

TRADERS ASSOCIATION

NATIONAL SECURITY

Intelligent,
Atomic Letter No.

(New York City)
Customers Bro¬

11, 1958

Sept.

pleased

Field

Investment

In

National

Manly

Association

Associates, 11 West 42nd Street, New York 36, N. Y. '

Invest¬

of

annual

ment Clubs 8th

conven¬

tion at the Hotel Sherman.

Kellogg Company—Report—The Milwaukee Company, 207 East

Corporation—Bulletin—Searight, Ahalt &

O'Connor, Inc., 115 Broadway, New York 6, N. Y.

v

-

.

.

^

36-Dec.

Nov.

Michigan Street, Milwaukee 2, Wis. Also available is a report
on Stepan Chemical Company.
1

<

(Mbm!

1958

5,

Beach, FIa.K

_

Investment Bankers Association

Car Corporation

North American
For

Going

financial institutions

—

Report—- Reynolds & Co.,

to jtress-

Riley Stoker Corp.

—

Memorandum

Sano & Co., 35 William

—

For the

Sophisticated Investor

Ryder
.

.

—

dorf-Astoria.

Shearson, Hammill & Co., 14

Street, New York 5, N. Y.

Scudder

CANADA LTD.

OF

Report

—

Association of New

York annual dinner at the Wal¬

.

Wall

SCUDDER FUND

System, Inc.

'•

r

*

(New York City)

10, 1958

Investment

•>

Street, New York 5, N. Y.

the Americana Hotel.

at
Dec

convention

annual

America

of

Broadway, New York 5, N. Y. Also available is a tab¬
ulation of leading retail trade stocks with high yield.
320

74

Fund

of Canada

-

,

Nov. 2-5, 1959

;

Ltd.—Study—Troster, Singer & Co.,

(Boca Raton, Fla^,

National Security Traders Asso-

Trinity Place, New York 6, N. Y.

Convention

Annual

ciation

:

at

Club.

the Boca Raton

Spiegel, Inc.—Data—Herbert E. Stern & Co., 52 Wall Street,
New*

Designed for capital gain in 1954
:

Increased 44%

by 1958

l

York

.

'

.

•

on

request.

&

Troster, Singer & Co.
Members New York Security Dealers Association

74

Trinity Place, New York 6, N. Y.

&




Teletype NY 1-376-377-378

New

Wainwright Branch

*

BOURNE, Mass.
—

Bertner Bros., Inc., 67

;< V

.

-

r

..

Co.—Analysis—Cruttenden, Podesta

Union

—

H. C. Wain¬

wright & Co. has opened a branch
office on County Road under the
of

direction

Raymond

C.

Swan-

berg.

Telegraph Company—Analysis—Laird, Bissell

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

World

Wide

able is

Helicopters Limited—Bulletin—Blair

a

discussion of the pending

taxes of Life Insurance

tabulation of operating results for Insurance
months ended

June 30,

1958.

&

Co., In¬

Also avail¬

legislation to raise the in¬

Companies, and

Form Denschor
:

corporated, 20 Broad Street, New York 5, N. Y.

come

HAiiover 2-2400

V

Co., 209 South La Salle Street, Chicago 4, 111.

Western
.

-

Wall Street, New York 5, N. Y.

Texas National Petroleum

Copy of Study

.

Engineering Inc.— Analysis

Tenney

;

Also in the same bulletin are data oil*

5, N. Y.

-E. W. Bliss.

a

comparative

Stocks for six

ASTORIA,

N.

Y.

Realty

—

Denschor

Realty & Trading Corp. is engag¬
ing in a securities business from
offices at 36-20 Thirtieth Avenue.
Officers

dent;

are

Morris Schor, Presi¬

Robert

Schor,

Vice-Presi¬

dent; and Edna Schor, SecretaryTreasurer.

.

Volume

188

Number 3772

.

.

The Commercial and Financial Chronicle

.

(809)

prevalent interest rate

Outlook lor Real Estate Industry

homes

And the

Economy

a

economic

as

recovery

people"

without

"emergency"

really good

and hails the current

year,

massive

aid

government

in-the

of the old pump-priming type.

Graves who also heads his

borne

and the housing industry has reacted
vigorously and favor¬
ably in concert with factors making up the recovery picture.

currency at

million units and approv-

to

seerris

fuL

-phrase

that

me

the

eolor-

rolling

—

punch,-r- might

with
the
applied with

ue

perfect justice to the behavior of
our

■

economy

*

■inyrecent

YY,

"

'

.

ings

'

ployment
of

the

"

re-

cession

was

spotted,

and

•

e

x

e

the

of

free

1

en-

.up

it

make

Walter

Graves

the canvas.

knocked

being

to

In fact, according to
indicators, the econ¬

most of the

is hitting the comeback trail.

omy

Hails

Before

Recovery

I

those proofs

give

you

J of returning vitality, I think 1 we
pause to note one thing:
resilience
demonstrated
by

this

free/

ri se , economy
-stems from-'two things—the safe,

.

our

have built into
our economic system and the resou reef ulness of American s in all

r

walks

,J

cisions

•

ente rp

that

guards

we

life

of

in

making

that'have

the

de-

bene¬
ficial.
On
the* whole.
Congress
has shown commendable restraint
proved

in
■

rejecting some of the more extreme
"emergency" measures of
the

old

.

.

pump-priming type.

in

even

the

button"

have yet reached the
In other words, the re-

1 economy.
,

<

that is now going forward
indigenous thing—a victory

covery

is

an

of and

by the American people.

Now for
•

that

measures

But
"panic
it
did

adopt, according to the record,
relatively few of the dollars they

provided

.

the

of

case

look at

a

of these

some

key business indicators reflecting
the condition of the economy

r

on

.

as

whole:

a

'

of

time

in

tional

stood at

v

•

•

•

•

■

v

index

pre-slump

(October,

of

126

and
are

few

of industrial

to

130

in

1957)

April

peak
this

of

June.

m

year.

this

As

-

progress

laid

previously
'

in

dines

•'
'

•

week

Real

Joe W.
J.

Ruth

L.

on

*

,

1957.

In

the

economy—the
mand

ard

punch—this lessened de¬
be expected to en¬
Industry will again

has

become

of
:

'

Freiberger to Be
V.-P. of Murch Co.

111.

—

CLEVELAND, Ohio

William

J.

La

Salle

Street.

He

—

come

&

was

a

Co.,

Vice-President

Inc.,

Hanna

members of the New

the April through June
figures of the Census
Bureau which placed the national
vacaney rate at 2.9% of all dwell¬
ing units.
-

•

Million

^he
acted

this

Housing

added

Rogers & Tracy, Inc.,

South

La Salle Street, mem¬

bers

the

of

change.

Midwest

-

offer to sell

.

Y-

Stock

'(;>/( YY'

or a

Ex¬

;

(Special to The Financial Chronicle)

i

staff Y

to the

CHICAGO,

Weiss

111.

has joined

B. Vick & Co.,

Street.

,/,Y

—

housing

First and

industry

has

solicitation of an offer to buy these securitcs,

;

YYYYY4^%
Dated

Due

September 1, 1958

Company
1

September 1, 1983

vate houses in June were at a sea¬

of over a
than com¬
parable starts in June of 1957'.
The Federal Housing Adminis¬
tration has
been
setting or ap-*
adjusted

sonably
million

preaching
in

ords

rate

units—higher

all-time
insurance

the

and

strong de¬
activity to

The

To round out the favorable
ture

Prospectus may he obtained m any state in vchich this announcement is circulatedfrom only
of the undersigned and other dealers as may lawfully offer these securities in such state.

such

it.

realtors

for

cans

Pt 'ice 101.113% and accrued interest

monthly rec¬
application,

related

interested

need

but

ment

that

note

has

availability
funds

at

all

and

HALSEY, STUART & CO. INC.

housing, we
the vast improve¬

taken

BEAR, STEARNS &. CO.

place in the

mortgage

of

more

pic¬

Ameri¬

in

L. F. ROTHSCHILD & CO.,

SALOMON BROS. L HUTZLER

loan
DICK & MERLE-SMITH

reasonable rates.

>

.

FRANCIS I. duPONT & CO.

"

Market

NAREB's
its

continues and

second

the

workers

back

mortgage

off,

further

number

of

de-

unem¬

ported

exists for

Division, in

Research

quarterly study of the

in
1958,
re¬
brisk competition
mortgage loans between
market

that

national

—

a

local

and

lenders result¬

are

expected.

ended

address

The

South

Esta'e

Beach,

S.

C.

by Mr. Graves made be¬
Carolina Association of

Boards

Convention,




Myrtle

loans

on

new

communities
survey

for

46% of the

in the
reported in June that the
taking

?

BACHE &, CO.

BAXTER &. COMPANY

part

GREGORY & SONS

SHEARSON, HAMMILL &. CO.

BURNHAM AND COMPANY

NEW YORK HANSEATIC CORPORATION

STROUD &. COMPANY

HIRSCH&CO.

WM. E. POLLOCK L CO., INC.
stern brothers &. co.

BAKER, WEEKS & CO.

incorporated

FAHNESTOCK &. CO.
courts & co.
h. hentz a co.

conventional

houses,

R. W. PRESSPRICH &. CO.

PAINE, WEBBER, JACKSON &. CURTIS

Buyers Favorable Mortgage

August 26, 1958

cooley a company

J. C. BRADFORD & CO.

shelby cullom davis &, co.

McDonnell & co.

M.

121) South La Salle

•

Refunding Mortgage Bonds, Series K, Due 1983

re¬

vigorously and favorable to
demand—the starts of pri¬

Ronald

the staff of M,

The offering if made only by the Prospectus.

Southern California Edison

Starts

Building,

Joins M. B. Vick & Co.
;

$50,000,000

vacancy

of Murch

York Stock

durable

in

found

On Sept.

15th, Lloyd S. Freiberger will be¬

has become affiliated

Taylor,

105

'

r

associ¬

Hough, Inc., 350

Wulbern, Inc.

•

Hemphill, Noyes

has been

man

announcement is not an
,

Jones

has

(Special to Tin: Financial Chronicle)

'

•

K.

ated with Beil &

First

I

CHICAGO, 111.—Walter S.Lieb-

This
,

Y

PETERSBURG, Fla.—Rich¬

Exchange.

that rolls

cannot

dure forever.

;

Taylor, Rogers Adds

billion in
American

economy

interesting

of Hayden, Stone's ledger for
in 1892, is a notation,

ST.

Corp.

Exchange

$37
dynamic

most

Boil & Hough, Inc.

"(

formerly with McCormick & Co.

plant and equip¬
ment will total about $32 billion

with

a

Richard K. Jones With

Hemphill, Noyes & Co., 231

South

new

compared

us

And

Pilancl, Secretary.

with

as

To

reproduction of the first

"Financial Chronicle."

Newcomer, President; John
Vice-President,
and

CHICAGO,

loan capital* for
equipment expansion.
and

a

(Special to The Financial Chronicle)

more

Securities

on

Desch,

expansion of

demand

bro¬

expenses

Colo.—Financial

Corporation

Now With

diminished

and

the

forme:! with offices in the Farm¬

from

the

now.

page

and

individual.

illustrated,

Avenue, North, members of
Se¬
been ..•■the Midwest Stock Exchange. Mr.
Jones was formerly in. the Mu¬
ers Union
Building to ergage in a nicipal Sales Department of the
securities
business.
Officers are Tampa office of Pierce, Carrison,
DENVER,

curities

Commission reports that this year

public is well able to,,

Specifically,
♦An
C

and

•item

in

(Special to Tafe Financial Chronicle)

Brinkworth

with the

.

fore

Lavishly

(Special to The Financial Chronicle)

by the FRB, persons seek¬
ing mortgage loans have benefited

purchase for

that time

For
the ing in the offering of a variety of
loan
terms,
conditions, and in¬
July 19. the Labor
Department
reported
that
the terest rates. The study called the
number of persons drawing
state
of the
mortgage
un-* present
employment compensation claims market "most favorable to home
was
buyers."
2,555,300—the second lowest
ployed

-

calls

industry

as

the

continuous

* describes
the'services of
.the firm, established in 1892, then

the

or

ultimately

of

years

chure

market purchase

goods, homes,
additions or repairs to homes,
today almost as frequent as a
years ago."

•

'

success

is

66

Another indication of demand is

Most economists ap-

parently expect the index to keep
on
inching up in the balance of
the

firm's

service to investors.

in¬

as

most

a

the index rallied to stand at

year,
i

Board's

production which measures the
ouiput of the nation's factories
and mines. After dropping from a
146

for

the

in 1929,

Form Fin. Sees.

Treasury bills.

The

by the highly respected Univer¬
sity of Michigan Survey Research
Center,, the
"desires
and
felt
needs

as

for

behalfs and that of the public:

expanding the lend

open

.

than $268 billion.

more

cal

Realtor.

automatic

no

success

to

up

of the banking system

plant

demands.
And, ac¬
a survey of consumer
attitudes made in May and June

mand

Indicators

One of these is the Federal Re-

serve

at

power

industry for

gratify its
cording to

fill
r f

total

re¬

the

contrary, the Federal Re¬

was

April than at any other
recent history.
The na¬

savings

of

credit

The total of such

which also reflect the

Economic

Key

first

to

because

In addition to this

According to the Federal Home
Bank
Board, the public's
ability to buy was greater by the

Thus the

Indigenous

i should

:

of

fifth

the

of

Exchange,
leading Exchanges, have
interesting histori¬
brochure commemorating the

and other

issued

they
will not be found
wanting in the
exercise of
diligent, hard work
and professional skill in their own

means

Board is

Lnrough the

Loan

witYout

blow

•Y

H.

the

take

their installment indebt¬
in

'

k

resilience

the
to

ing

have

edness

for

lenders

the

improved

( Realtors know this.

policy

the

serve

And

reduced

June

rightly

that the tight
that slowed our
business and the gratification; of
the housing aspirations Of the pub¬
lic does not seem poised to return.

On

consumers

market

All of this

money

has

obligations at the end of June
about $33 billion. Y Y -Y

.

showed'

—

time,

straight month.

J. trepreneurs-

who

;

American
from - the

large, the
emerging

is

at the same

of /

thousands

and

far

<,

cor¬

personal income has rallied.

re-

s

By

consumer

national

every

contains

Today,
individual

to accept applica¬
(for such loans) than they

this

to

up

economy has

dividual.

Credit Expansion

personal income.

on

it

guarantee

yield and the uncertainty regard¬
ing its legislative future.

hardship
cushion
its

and

of

willing

most

enter

is

our

sion,

associations

has

,

recession in good shape. As noted,

by,,

the. keen
f 1

joblessness

shock

economy

of

V

being

.

of the New York Stock

from the days of 1929 to the ex¬
tent that it has built in stabilizers
against the extremes of depres¬

six months ago." The study
reported, however, the reluctance

that

—

done much to soften the

'—geared

i

insurance

The

that

the

,

built-in

the

loan

Hayden, Stone & Co.,^25 Broad
Street, New York City, members

really good
but the development of that

While

af¬

or

loans

a

of

potential

were

economy—unem -

punch

"

■:

of

one

months.

was

■

point to

for

1958

potential

with "veterans in some 1776,
finding local banks and savY lack thereof

and

more

tions

total of the year. Personal income
has been rising for the last four
months. In this connection, let me

rectives of the

areas

two'observations:

moreover,
areas

;

ihgly refers to favorable mortgage market terms for home
buyers which, he adds, cannot be expected to endure forever;
It

some

market

Good Year

a

us

year,

sec¬

gains were recorded with
to VA-guaranteed loans,

respect

seasonably

are
one

a

the

con¬

finds, in view of paucity of Federal dollars reaching the (Y,
economy, that the economic upturn is an indigenous thing,

He notes that housing starts
adjusted annual rate of over

FHA—insured

although it ob¬
that these gains have not

fected

Historical Booklet

in the real estate business,
think the situation adds
up to

I

loans,

reached

yet

cern

■

1958 Looks Like

To,

maximum maturity.

Mr.

Philadelphia real estate

own

for

203

served

of

form

funds

tion

victory "of and by the American

a

measures

of

1958 has the

Hayden, Stone Issues

.

.

The study noted also "general
improvement" in the availability

President, National Association of Real Estate Boards

Spokesman for real estate industry believes

new

ample for

as

those buyers acquiring an exist¬
ing home in a good location.

By II. WALTER GRAVES*
President. Albert H. Greenfield & Co., Inc., Philadelphia, Pa.

potentials of being

financing of

classified

was

four out of five market areas, and
in
three out of four areas for

Whole

as a

be in the capital market
seeking
funds for expansion and probably
in the near future.
Y

was

The supply of mortgage funds for
'the conventional

9

irahauptaco.

van alstyne, noel a co.

Y

-

10

(7) A
ounce

Higher Gold Price Contentions
Colorado

The head of several

to

a

proposes

taxes

for

many

Higher Gold Price Refutations

a

than

it

treat

nation

the United States dollar

Questions U.

'

\

^

S.

Dollar's

passed
through,
and
the

misgivings

The

'

has

United

States

is

to strength in inter¬
monetary circles. Many

national

no

people

xception.
Steps are:

e

Swiss

the

both

franc and the West German mark

currencies

sounder

as

(1) Currency

the

than

United States dollar, and the pre¬
that persists on the Cana¬

debasement.

mium

(2) The

is¬

of

ir¬

suance

is

redeemable
paper

money

which

is

Merrill

E.

in

held

that

indicates

esteem

more

Shoup

overnment

the

expansion, well
as other parts of the
world
prices, higher
thqreby encouraging at least a
costs, spiraling' inflation and a mild
"flight from
the
(United
steady decline in the purchasing
States)
dollar"
into
currencies
power of money.
deemed stronger.
and

<

credit

consumer

leading

higher

to

inflationary
forces
be controlled,
a collapse of the economic struc¬
ture built upon inflated prosper¬
(3) When

time

same

be

(4) Depression.
(5) The return to sound cur¬
which
brings
a
drastic
shakeout with attendant misery

the

dollar

States

promptly

accomplished?

Sets Forth 11 Accomplishments

rency

and suffering.

Today

step

United

States

not

—

confronted

is

now

with a depression but
inflation
and further

only
spiraling
dollar

well into the
depression.
The

are

we

fourth

depreciation.

Hundreds
of
closed
and
marginal gold mines in the United
(1)

To

add

and

ing

of

our

informed

is

preparing
with gold

her ruble

back

problems,

get the jump on us by launch¬
a
"Golden satellite."
Our

Nation cannot ignore the possi¬
bility of a gold-backed ruble and
must immediately take all steps
necessary to cushion and prevent

shock

any

would

which

result

frpm Russian initiative, since, if
the ruble is established as
currency

a

basic

with the dollar and the

pound, it will have far-reaching
effects not only in our Nation but
all the world. Our position abroad
would

quickly

prestige

our

undermined,

be

delivered

shatter¬

a

ing blow, and our Nation caught
without gold as Russia caught our
military and airplanes without
missiles.
Such

This

not

must

thousands

patriotic and thinking citi¬

welfare

have

the

proposed

following program, which has al¬
ready been sent to outstanding
Members of

our

Congress.

Reiterating again, the Russians
are planning to
get the jump on
us again by
launching a "Golden
satellite." "Persistent reports from

informed sources," state Russia is

preparing to get back her ruble
This would be a blow
devastating to our economic
and

financial

sputnik, and

leadership

we

than

cannot brush this

threat off lightly.

While

we

have;

been

(2)
the

An

herculean

effort

If the ruble

backed

rency

tirely

♦An

by

possible,

that it will be
1

address

to

becomes

gold,

if

on

increase
a

a

not

hard

it

is

it.

cur¬

en¬

probable,

parity

or

bet¬




it

do

Why

now?

vertibility,

of full
internally

both

con¬

and

dollar

States

with

ruble

the

as

the foremost world currency.

(11) The hysterical grasping for
straws

to

downward

the

arrest

plunge in our economy suggests
a
repetition of ineffectual cures
tried in the early 1930"s. The one
move that was ultimately success¬
ful in the last depression again
holds more promise than all other
economic nostrums put together—

long overdue price increase in
gold.
a

Fears Foreign Run on Fort Knox
threat

The

of

forced

like the
Damocles, and the thread
holding it is getting thinner by
the
moment.
Foreigners have
sword of

claims

which

be

could

converted

into

reserves.

If, for

of

some

ob¬

ligations into cash and demand $1
in gold, a run of cata¬
strophic proportions might be im¬
mediately started. Now that the
bill rate is down from around Vfc
to 1 Va %, the inducement to for¬

million

eigners to keep dollar balances in
short-term

bills is much

im¬

less

pelling.

program

the

ton,

dollar

would

quickly restore our com¬
petitive position in world mar¬
kets, clear out our astronomical
surplus of farm products,
and
stimulate

manufacturing,
con¬
ceivably to boom proportions."
(4)

Corporations
inflexible

are

costs

struggling

and

dimin¬

down

side,

quickly

A

appar¬

cause

a

the

on

devaluation

would

ex¬

emissions from

either

we

in

are

a

the

of

downward.
stimulate
newed

Frantic
the

profligacy
the

arrest

may

porarily, but

in

Washington

downtrend
revival

a

E.

Shoup,

President of

sians,

the

the

Golden

Cycle Corp. of

about it.
our

of

stature,

be

and

Edgar W. Hiestand

ey" and "t o
inflation
further

but

advocates

depreciation"

the

speech calls for

ent

price of $35

(5)
by

Buying in the United States

foreign

countries

has

been

alarmingly reduced. A devaluation
of

the

eign

dollar

would

countries,

up

•

permit

for¬

particularly

the

backward

purchase

in

nations,
the

United

States, which in turn would
mit

a

lions
we

to

per¬

sharp reduction in the bil¬
of

giveaway

have

been

money

which

capriciously

squandering.

Tile intolerable burden of

g'«antic national debt (and

taxes) WOuld become bearable.

to

this

do

all

program

with

us,

necessary

to

in

If

effect.

you

can

help

per

or

ounce

price.

That,

any

judgment,

my

hint

be

(1)

Furnishing

newspapers

(2)

and

press

releases to

periodicals.

Working with radio and TV

stations

to

carry

this

message

to

millions of listeners and viewers.

(3) Writing
gressmen,

your

Senators. Con¬

friends, their Senators,

Congressmen, friends,
holders

this

urging

them

to

pass

on

message.

(4)

Initiating

a

broad

writing campaign to
can

and stock¬

help

the

letter-

anyone

campaign

to

momentum.

who

gain

Here

smaller-valued

would be the

rose

nation

at

cycle which
has

stage

some

Terms

Canadian

Perhaps

passed

than the U.

people

"Currency debasement.
"The issuance of irredeem¬
paper

lowed

by

which

is

fol¬

government

and

money

great
credit

expansion, lead¬
ing to higher prices, higher costs,
consumer

spiraling
decline

inflation

in

the

steady

a

power

r

money.

*/

and

purchasing

"When inflationary forces
become too great to be controlled,
a
collapse of the economic struc¬
(3)

ture

built

inflated

prosperity.

which

rency
and

brings

with

shakeout

misery

suffering."
he

If

is

in his

correct

why does he want
that tragic path?

analysis,

to follow in

us

The very move

he advocates is exactly the No. 1—
Debasement of the Currency.
Doubts

USSR

He
of

even

alleges

all

making

ible?

The

the

whole

posite.

They

Valued

it

what

aware

not

many

does

he

ruble convert¬
history of the

is

masters

the

exact

only
times,

than

highly

regarded

countries
and

by convert¬
ible?
Surely he doesn't imagine
they would make the ruble con¬

curren¬

currencies is

because

balance

refrain

their
wild

from

these

budgets

and

unre¬

strained spending projects beyond
means.
The "premium"; he

their

refers

to

is

misnomer.

a

for

dollar is

the

Canadian
The

dollar

Canadian

,,

entirely different and

an

independent

currency
andhas
nothing to do with the U. S. dollar.

"pound"

a

"ruble" it would have

ent relation

than

at

And what does he
crack

about

"our

without

goid?"

possibly

happen

now

mean

by that

nation

caught

How
at

refuse

can

or

differ¬

no

present.

could

that

present?

We

to

Of

convert.

under his plan of gold at
$100 per ounce the pressure for
our gold
might be three times as
course,

ible"

as

at present.
were

wouldn't it

And, if, as he
"freely convert¬

rush

out

of this

country faster than ever?
And

he

claims

that

devaluing

the dollar would not only "thwart
Russia" but "at the same time ar¬
rest the

the

depression," and he states

results

would

ber:

(1)
of

be

11

in

num¬

\

Answers

And

mean

a very few
large flight

a

these

of

or
sound

dollar, but if these

more

op¬

have debut even

bonds.

own

as more

'

that the Russians have

rumors

sider

are

Deutschmark,

witness

advocates, it

Russian threat

a

S.

Each

great

Ruble

convertibility. We

are

would

cies.

drastic

a

attendant

people regard the

If it had been called
cur¬

Premium

from the dollar into those

a

to sound

return

some

the Canadian dollar

we

(2)

Dollar

Swiss franc, the

every

through, and the United States is
exception." They are:

able

prices

same.

A Misnomer

no

(1)

dollars.

commodity

as

his pre-

of

his "five distinct steps

are

in the economic

states

ratio

desirability of all the rest of them.

Shoup's Eleven Points

The

immediate

"closed

mines"

and

putting

reopening

marginal
back

to

gold
work

thousands of miners.

I agree,

million

the

that
would be a bonanza to the 3,000
internally: Wouldn't the
people
in
the
gold
mining
indus¬
Russian peasant hoard every gold
disaster to 170
ruble he could earn or steal? Can try, but what a
vertible

imagine the Kremlin masters

you

Or, what meaning
convertibility have
are

no

♦An

rubles

address

H-use

of

to

devalue

sional

outside
Ren.

Mr.
f,-e

Record.

Merr:'l

E.

external

when
of

there

Russia?

Hiec*and

Representatives,

reply
sal

to

by

can

May

Sh-uin's

people

of

United

States!!

letting Russians have gold?

irspr*oJ

Action is necessary now.

c

are

and

The

dicted results and certainly on the

repudiated their

*

this?
more

one

several

on

How

other

in > fact
in

indeed,

would,

Kremlin

by—

-

that our gold
"wholly inadequate,"
would
devaluation
change
We'd
simply have vastly

reserves

to $100

per ounce

He

rency.

pres¬

of

and

Britain

-

complete debasement of the "cur¬

ing the price of gold from its

developed large gold reserves, but
why indeed should they even con¬

agree

us.

his advocacy of the cause of rais¬

$190,

gold,

then

and

follow

soon

emphatic issue with

I must take

...

the $35

place

Belgium,

would

However, the gentleman advo¬
cates the direct opposite, almost

We

you

land,

his

opposite,

reply:

a

re¬

would swell back to former levels
and could even exceed them.

sound cur¬
in the world.
only West Ger¬
a

Canada, Switzerland
nations, such as Hol¬

and

dollar

Convertibility

statutory price of gold to
permit Americans to own

establish
the finest

many, ' but
other

stop

making

in strengthening

step

great

rency,
And. I believe not

mon¬

and

am

>

mistake

no
in favor of

national economy. That would

indeed,

pealsfor
"sound

I

make

dollar convertible. That would
a

our

because he ap-

pacity

be

Speaker, make

Springs)

considerable

in

would

even if they should
ruble convertible?

Mr4.

ca¬

operations

in

made

book entries or gold
$35 per ounce.
And

at

Colorado

buying, with the result that

sumed, improving uprofit margins.
As a
corollary, the diminishing
flow
of
taxes
to
the
Treasury

be

cannot

are

bullion

spree.

expect to have introduced
the Congress a bill to increase

They

lastly, is there any reason at all
why we should imitate the Rus¬

engaged in

irresponsible spending

the

settlements, and at the U. S. price
$35 per ouncq.
International

currency.

generated

with the Government
an

tem¬

of lasting

be

cannot

re¬

bullion,

international

(Mr. Merrill

to

by

is

other

all

businessman

"Depression.

economy

balances

as

settlements

"The

efforts

her

coin.

(5)

or a depression, depend¬
the school of
economists
consulted, which can easily spiral

tles
same

successful

(4)

upon

result .from

of

drastic

a

would

The gold with which Russia set¬

*

Washing¬

recession

ing

of

resurgence

it

from

of

seem

revolutionary

confidence

ishing volume, which are
ently gaining momentum

may

and
will
controversy. Despite
"prosperity just around the

corner"

the

time—eco¬

much

cause

kets.

of

crucial

nomically and politically.

extent our
farm products, out of world mar¬
Devaluation

the

is

Now

ucts,

large

Because

example,

its United States Government

tremely

a

the

eloquent appeal

very

devaluation

came

in

was

the ; "Congressional

of

a

with

This

to

there

May' 5

Record"

foreign countries have with re¬
gard to our ability to redeem in
gold may start a run on our Fort
Germany should convert

claims

of the greatest disasters that
\
' V

one

of the
greatest disasters that could hit
this
country.
I also take issue

Knox

the eleven accomplishments

one,

alumnus

gold to the extent of an es¬
timated $14 million to $16 million.
Any day the apprehension which

..

and

On

Appendix

devalua¬

tion hangs over our head

by

one

Dartmouth

fellow

could hit this country."

lor

externally, would block the Rus¬
sians in what apparently is their
scheme
to
replace
the United

(3) The high cost of labor has
priced our manufactured prod¬

with

inevita¬

as

Restoration

(10)

metals.

rous

by Mr. Shoup before the

J. Edgar Chenoveth of Colorado,

of

dollar,| fixing

price of gold at $100 an ounce
strengthen
the
sagging
price of all commodities, particu¬
larly farm products and nonfer¬

PhT^pVMndnil"«fC^^^cCc^;^li„":;ffecdo;3 the
by Re
p.

'

•

devaluation

States

the

would

step

a

possibility that un¬

official

United

Russia

putting fourth

out

men

'

so-called

been

work

thrown

ture.

foolishly discouraging gold
production in the United States,
has

to

formerly engaged
in nonferrous mining will other¬
wise get off the mounting unem¬
ployment rolls in the visible fu¬

with gold.
more

miners

of

reasonable

zens

tion's

back

by the closing of the lead,
zinc, and copper mines or, cur¬
tailing their operations. There is

happen.

as B. F.
Pitman, of San An¬
tonio, Tex., interested in our Na¬

quickly reopened,

of work

employed

from

Russia

that

sources

get

all

persist

reports
to

to

be

putting

thereby

no

Wliat to Do

will

States

is

night following day.

as

not

should

devalued and re¬
convertibility.- What

stored to full

will be

and at the
depression,

Russia,

arrest

United

the

'

ity.

thwart

To

become too great to

ble

it, too,

than

almighty
United
States
dollar.
Moreover, gold denied the United
States citizen is readily obtainable
in unlimited quantities in Switz¬
erland, Germany, and Canada, as

fol¬

lowed by great
g

dollar

dian

devaluation

*

price "wouldr indeed, be

can

timate

as

consider

United

the

measurably reduce its
national debt," let alone pay it of!
in full, unless and until the dollar
is devalued in terms of gold. Ul¬

wholly inadequate gold re¬
serves backing the United
States
dollar have already created grave

stage

some

believes

who

world

succintly refute,

his

devaluing the U. S. dollar. Disagreeing with Mr. Shoup, whose
views are found on this page, the Congressman explains why
fixity, of existing Treasury gold-price is a necessary con¬
comittant of convertibility but that redeemability at a higher

There

States

Soundness

at

(Calif.; Rep.)

Rep. Hiestand utilizes his Banking and Currency knowledge
to
'

is probably not a
single informed economist in' the

through all the world.

Member of House of Representatives

.

nonrecur¬

as

ring income.
(9)

ter with

HON. EDGAR W. HIESTAND*

By

years

'

Since
the
dawn
of
mankind,
history has always repeated itself.
There are five distinct steps in
the economic cycle which every

Thursday, August 28, 1958

.

come.

rather

a

.

per

create

could be used, at least 'in
part, to reduce our national debt

and politically."

\:v.:

$100

price

Treasury gold-price
of $100 and asserts f'now is the crucial time — economically
Mr. Shoup

of

would

(8) If deemed advisable, the in¬
crement created by the new gold

banker, outlines eleven beneficial accomplishments which he
claims will result from devaluation of U. S. dollar and, then,
full convertibility.

gold

in

duction

Springs, Colo.

gold mining companies, other firms and

price

new

on

surplus of around $41,000,000,000,
which would permit a sharp re¬

By MERRILL E. SHOUP*

.

Chronicle*.

The Commercial and Financial

(810)

to

21,

the

in

(2)

He

valuation

dollar"

claims "an official
of

the

United

"would strengthen the
sagging price of all commodities,
particularly farm
products and
—

nonferrous metals."

n-o"--

the U. S. dollar which

was

Appendix of the Congres~

de¬

States

I agree, pos¬

sibly prices of lead, zinc, and cop-

Continued

on

page

25

'

'

■

'

•

•

,

Volume

188

Number

5772

1

•

.

.

'

;

•■../•

The Commercial

.

and

'

-1

Financial Chronicle

(811)
necessary

Revaluation of Gold
Bv

General

W. J.

Finance

'/(;?;/,;-p,

Johannesburg

;

•

V

Author

•;

BUSSCHAU

Minister of

South Africa x
-V' •/•
New. Consolidated Goldfields; Ltd.,
•

Manager of

of "Measure

;

J

•

-

'j/ >/_

of Gold"

-

•

-

j

.

Internationally known writer
alternatives for countries

on

gold discusses three solutional

suffering from

■

-

created.

Gold

The

source

vrZ

gold shortage;; Mr.
Busschau finds that the first, reduction of bank credit, requires
deflation but under today's conditions would be impractical;

counterpart

the debt goods in common markets. If
"the
other asset rest"
deliberately set out to re¬
acquired in international banking plenish their
reserves
and they
is a net addition to assets
only if succeeded,
they
and
not
the
its acquisition does not lead to an
United States
would,
when the ul¬
increase in debt. Those who ac¬ timate
revaluation comes, secure
Joseph R. Mayer and Francis X.
cept the case for a revaluation of the benefit of
the
premium on* Guadino have been named Vicebank
credit
in ;terms
of
gold the additional reserves
they so- President-Treasurer and Assistant
should therefore,, not regard the
acquired. If "the rest" could act Treasurer
respectively
of
the
prpposal
for
"made-;made"
re¬
so
sensibly, it. might be to their
serves as in §my sense an
aqcept- current interest not to
worry too
able. alternative. ^. .
much if the American
authorities

or

"Man-Made Reserves^
Former

of

Am. S. E.

any

of

- -

Appoints
Mayer & Gandirio

the

wish

to remain stubborn
for the
present. After, all, history is full of
revaluations which were strenu¬

present

trouble is; mainly4n the ihcrease

a

*

i

•in", bank

Credit.

substitute

second, the creation of "man-made reserves,"; merely en¬
larges international debt and offers no fundamental correction;

in-

the

member

back

j

the 'system,

international

•

which /can

and

cause

tir

until

versal of

_

the

logic of
enough to;
complete re¬
/ Z ,/...

strong

sudden

a

-

,

himself

be

and

policy.

„

-the

proposals

pfeteht

With Morton, Hall

con¬

cerned' about the /total of what
oWes;

opposed

events- proved

s

borrower, should

responding increase in the amount of external debt. The author
advises that if gold revaluation is not adopted, the rest of the
West should strive to make their goods more Competitive than
those of the U. S. A. in common markets and, in time, by
replenishing their reserves can benefit from, and bring about,
eventual gold price rise.
./•.>•/

ously

to

credit,

obviously be " related,
to.,?; national debts, / is the
as. bgf org." Indeed - the

"mixture

but the third, revaluing bank credit downward in terms of gold,
is most meritorious because it provides reserves without a Cor¬

-

„

countries ;of

the

he

(Special to The Financial
Chronicle)

context'.the

for

adding -"man-made
reserves." simply envisage the en¬
larging of international debt and
I he expansion of the total of na¬

•

-

LEWISTON, Me.—Samuel Perry

is

now

Hall &

connected

with

Morton,

Rounds, Inc., 226 Main

Joseph B. Mayer

St.

F. E. Siemens & Asso*

tional bank credit of members of
the system. The essential differ¬
between

ence

countries 5of;; the

West

through their participation in var¬
international

ious

arrangements

may be said to constitute
of

11

system

a

currencies.

i s•?

• '

now

'•

widely recog-

(Special to The Financial
Chronicle)

present

at

•

essential

:

facts
r

World
fold

-

W. J. Busschau

Dr.

f,

/''

/

the-

system
have
found
themselves short of gold, the "in¬
ternationally usable money"; Con¬

exchange

and

amount of

trade, the existence of
which might put pressure on the
national treasuries.

argument

exchange

should
;

values

the

of

national

rencies of the West
ternational
now!

balances

encountered "in

of

cur¬

that in¬

mean

the

size

practice

are

(as a result of the overall expan¬
sion of bank credit) so great that
the5 resultant settlement becomes
too

heavy

treasuries.

the

on
•

.

national

•

As

low

result

a

the

Choices

countries

with

b ably

p r o

credit.

pedients
leastdrain

designed

to

temporarily,
the

on

too

prevent, at
great a
of

reserves

realized

that

for

debtor

which

bank

sense
liquidity
improved if the total of

credit

bank credit

Wards

in

in

were

were

terms

intent
tem

is

it

lent

has

clear

like *a

is

f

within

reduced

revalued

before

enough.

less

to

family

The

alter the

wages

and

reactions

,

gold,

is

or

the

clangers

of

that

the

tice

of

chain

effective demand great enough to
cause a

world-wide slump.

context, the revaluation of
.money so

In the
paper

that it will, through in¬

ternational

exchanges,

relate

to

f

'/ /

is

/

..

Parker, Connaway &

Now With

Southwest' Morrison

;

Collin, Norton

TOLEDO, Ohio

Paine, Webber

Hawkins

(Special to Tiie Financial Chronicle) " '

"

ley Meyerson has become affili¬
ated 'with Paine, Webber, Jackson

is

Raymond L.

—

now

connected

nance

,

_

ISSUE'

•

>

-

i

-•

j

J

•

-

.

;/"

Avenue,,
York

members

and

of

Midwest

;/*

•

i

.

\

any

o] these securities.

•

/

/

;

-

.

*■'

August 28,1958

'-//■;

!

Arnold Altex Aluminum

and

Company

(A Florida Corporation)

35(5 Cumulative Convertible Preferred Stock

sys¬

Vo
Convertible

(Par Value $4.00)

into

Common Stock

the

the

balance

Redeemable

.

..

loan

from

to an

$5.50

annual

per

1*4 shares of Common Stock' for each

sinking fund

as set

forth in Prospectus;

.

share plus accrued dividends

Price $5.00 per Share

from

so

of

the

at

basic

Copies of the Prospectus inay be obtained from such of the undersigned
as may
lawfully offer the securities in this Slate.

pay¬

favorable

so

the initial'rate of

at

share of Preferred Stock; Entitled

over¬

United
'

consistent

with

the

prac¬

;

*

Cruttendcn, Podesta & Co.

The Johnson, Lane, Space Corporation

post-war international fi¬
that the structure could be

propped

>-

up

Powell and
*

credit

will

/

temporarily

allow the continuance of unsound

nationalJ financial

policies,

countries

of

the

■

,

First Securities Corporation
'

,

Durham, N. C.

Plymouth Bond & Share Corporation

Company

'

Incorporated

R. F. Campeau Company
.

Baker, Simonds & Co.

i

T. C. Henderson & Co., Inc.

but

while these may alter the pattern
of the financial worries of
the
member

.

Fulton, Reid & Co., Inc.

in this

way for some
pending its later and more
complete
collapse.
More
inter¬

Howard, Weil, Labouisse, Friedrichs and Company )

Morgan & Co.

system,

the basic weakness will remain.

.

Erwin & Co., Inc.'

V7arnedoe, Chisholm & Company, Inc.

"Reserves" by their very nature
cannot
sense

/ v'

•

•

'

'

be

"made-made"

that -they-can

through

remedy for stabilizing the volume

acquired

borrowing,
by

be

in

the

A. M. Law &

Company, Inc.

Livingston Williams & Co. Inc.

created

as,the

borrowing has

asset
as

a

Mann and Gould

with

Collin, Norton & Co., 506 Madison

Curtis, 626 South Spring Street. changes.

° \

;

R.

Inc^,

(Special to The Financial
Chronicle)

nj itherfan offer to stlf not a solicitation oj Offers'to buy,
/ /
The offering is made only by the Prospectus.
\

'

'

Co.,

connected

LOS ANGELES, Calif.^-O. Mor-

&

/ I

Ruben

with Aim &

Kingdom?

less gold remains the one sensible




become

430

With

the

now

—

302 Main Street.

300,000 Shares

they to draw

are

become

to

ments

if

leading to decreases in

Holden,
Street.

system.

gold, and if

countries

down-

rigidity of

Reed is

Wis.

r

has

loans

and

temporarily
within-the

in

repay

national

the

/

PORTLAND, Oreg.—William L.
Warner

with Hunter

What is not explained is how the
loans are to be repaid.
Are, for

time

of

,

illiquidity of the family or the
system. In other words, the opera¬
tion of this "remedy" is simply to

indicate that the way of deflation
is not practical in this present
because

;

/

all

gold. The at¬
tempts, which so far have been
made to use the former remedy

world

OSHKOSH,

the

cannot in any way

is

or

'

'

family as between the
illiquid to the more illiquid

It

of

,

•

is not likely to come. The
alternative is a way of "wrapping
up" the transaction, but its real

United

that

R. R. Reed With Aim &
Co.

Parker, Connaway

(Special to The Financial Chronicle)

which

the. .international,

obvious

Co., Cascade

(Special to The Financial
Chronicle)

With

the

could be

is

Thisannou ticem ent

Congress- will be
averse to giving- large "stabiliza¬
tion, loans" for a "stabilization"

States will be offset against debts
which
will
be
payable to " the

countries. ? It

of Donald C. Sloan &

Building.

States

which

ex¬

nance Department.
The appoint¬
ments will be effective on
Sept. 1.

PORTLAND, Oreg.—Chester I.
Ferguson, Jr. has joined the staff

It

example, the borrowing countries

introduce

Block.

(Special to The Financial Chronicle)

If the

continues: for

NEW

States have

to

alternative.

an

by the

troduce restrictive measures, while
creditor countries like the United

had

is

States

simply the remedy proposed

further international

is

illiquidity

liquidity have perforce to in¬

There

with F. E. Siemens

of

reserves

reallocate

Depicts But Two

-

United

now

Associates, 584 Pittock

Joins Donald C. Sloan Co.

acknowledged that ?, come inevitable./

participants in I.M.F., etc.
Put

uniform

a

require the
smaller
physical
gold than the present
arrangements provide. The present
gold

It is

which means indirect loans

••

'for

amount of
"

&

Mr.
Mayer, with 34
service, will be head of the
market's Division of Administra¬
tion. Mr. Guadino, with 32
years
service, will be director of the Fi¬
years

'

is

a

Swauger is

former

a

further credits from inter¬

(2)

United

of

the

X. Gaudino

President.

Edwin R.

reserves of each

national institutions like the I.M.F;

the system amounts to
saying that
the payment of a debt owed in¬
transfer

that

—

(1/
a
large stabilization/loan
from the United States, or
<

change in the price of gold within

ternationally

fact

foreign ex-; present to refuse to
budge in its
change, and that the total so held, opposition, the "rest of the West"
has increased from about $2.5 bil¬
should so: order their monetary
lion in 1937 to over $23 billion at ;
affairs as to make their '.goods
present. The remedy proposed is/ more
competitive with American
either
/•/. /.
,' •/ ? • i;:- ,7r'

other

restrictions continue to exist with
the object of preventing a certain

The

argue that

national

gold reserves have
increased by only two-fifths. The
result
has
been
that
countries

sequently,

the

give to the

of

kept in being by the inclusion in

in¬

while

within

in

would

the system of currencies has been

in bank

crease

credit

lies

/^'man-made/re-' The new proposals can, therefore,
is certainly mot a' hardly ? be described
as
respon¬
Supporters of the new sible thinking on the subject at a

reserves.

War II been a*
four

em¬

PORTLAND, Oreg.

general rise in ' time when it is clear that the ag¬
the price,of gold would be a good gregate of bank credit in the West
thing' but, as the United States- is insupportably high in relation
remains adamant in its opposition,Z to gold reserves (at their present
an
alternative to follow is
the currency values) and, hence, "bal¬
further creation of "man-made", ance of payment" problems be¬

system there
has since be¬
fore

of

of

reserves"

public discussion in EngA without a corresponding increase
dbeen linked with * another j in the amount of its external debt.

corollary.

^

that in the

are

volume

"revaluation

"man-made

and

While the desirability of Feyalu*/ national member of the system a
ing. gold is now widely admitted greater potential command over
in the United
Kingdom, it has1 in the currencies of other members

idea

international

moneyt gold"

serves"—which

insufficient

liquidity. The

the

and

idea—-that.

-

is

income

credit, aggregate

ployment in the West.

land

there Z

-

bank

recent

<

nized > that:
within
this

system

of

Francis

American Stock
Exchange accord¬
ing to an announcement by Ed¬
ward
T.
McCormick,

'

The

11

Odess, Martin & Herzhcrg, Inc.-

the
Stock

New

Ex¬

The Commercial and Financial Chronicle
12

.

.

Thursday, August 28, 1958

.

(812)

Great American has

Statistical

Ten-Year
Liq.

Invest.

t'nd.

Income

Taxes

Earn.

$0.98

$0.23

$2.15

1.13

0.62

2.49

$27.52

49

32.85

1.98

American Insurance Company

Great

51

The company heads a fleet of

value of the shares being $5.
other carriers, as follows:
par

.

52

of writings for 1957 gave the.

1.45

0.38

2.38

1.51

0.17

1.96

43.45

1.32

1.61

0.68

2.25

Straight Fire

9.0

15.0

Liability

Auto

company is
22,000 agents.

except life.
stocks

a re

27%

431/2

32%

55

64.20

0.09

2.42

0.41

2.10

1.50

46

36

56

65.23

—0.82

2.70

vO.31

2.19

1.50

41%

31%

57

57.59

—1.67

2.63

y0.37

1.33

1.50

39%

24%

stock dividends: 28%
Federal income taxes.

for

on

tabulation is a five-year showing of the com¬
pany's income account, in thousands of dollars:
j
Premiums written.
Ratio

losses

of

1957

$120,939 $124,138 $125,782 $135,106

earned.

Premiums

1956

1955

1 !).">+

$146,513
143,362

130,765

125,304

123,340

117,253

Readily Sold in 1957
Yet Capital Ratios

American Bankers Assn.'s

67.8%

63.3%

59.0%

58.5%

written

40.0%

40.2%

40.9%

40.7%

40.4%

Und. profit or loss

$2,468
7,830

$735

$574

-$6,972

8,421
$2.94

9,396
$3.28

10,250
$3.57

$7,664

$8,200

$2.67

$2.86

$5,073
$1.77

-$13,043
10,240
$3.57
-$1,586
—$0.55

-

to prem.
Investment

income

Per share

$2.73

.

Net after1 Fed.

tax.

$7,689
$2.68

Per share

The

shows
For

a

ratio

of

losses

loss

and

to

expenses

earned

premiums

rising trend which is reflected in the industry results.
American, the five-year average combined loss and

Great

ratio through 1957 was 101.4%. However, there has been
quite steady improvement in investment income.

expense
a

Great

American

has in

the

portfolio distribution somewhat.

changed

as

past few years been shifting its

On

a

consolidated basis it has

follows:

Even

commission

selling
their

larger

loans

Other

reasons

were:

needed

increase

stock

mon

banks.

54

25.4

12.7

11.7

42.1

8.1

73%

55

19.9

14.6

10.7

56

17.7

14.7

9.0

48.3

10.3

The

17.6

15.3

.9.5

45.2

11.9

sues

9.4

46.0

$94,450,000; stock dividends $4,500,000. The yield at the present
price, on the annual rate of $1.50, is approximately 4.20%, at 35%.
The pay-out is conservative and represents 57% of investment
income for 1957.

Dividend payments of insurance companies are

income

in

practically

all

derived solely

companies.

Under¬

writing profits, where they occur, are ordinarily retained in the
business to help finance growing volume of writings. In periods
such as the present, when underwriting is unprofitable, there is

to increase dividend pay-out.

TITLE GUARANTEE

CO.,

NEW YORK

GRINDLAYS

Request

Laird, Bissell & Me*ds
Exchange

Stock Exchange

NEW YORK 5, N. Y.

Telephone: BArclay 7-3500

Teletype—NY 1-1248-49

Specialists in Bank Stocks




AND

LIMITED

BANK

Amalgamating National Bank of India Ltd,
and Grindlays Bank Ltd,
Head Office:

16 BISHOPSGATE, LONDON.

Members New York Stock

individual

to

E.CJ

for

cash

selected

a

Answers

than 90%

bor¬

during 1957
of state

group

were

returned by

of the shares sold.

covered stock is¬
ranging in size from $40,000

$120,000,000.
commission notes in

The A.B.A.

its

report

"have

that

been

the

retained
main

profits

source

of

bank

capital funds since the
end of World War II.
However,
among
national banks, sales of

new

have

stock

become

ous.

During

sales

of

the

more

the

About

ness.

complied
The

sale

25%

of

suggestions

with

commission
the

sale

of

of

new

that

has

stock

shares

bank

can

be

of the

total

amount

the

banks

has

not

retention

provided

suf¬

ficient capital in the postwar pe¬
riod to keep up with the growth
risk

of

assets.

By

selling new
stock, however, some banks have
greatly improved their capital
ratios. It

was

however,

were

a

or

bank to attract

business and

new

to shift more assets to

higher-yield
thus offsetting much of
any
reduction
in
earnings per
share resulting from the sale of

credits,

Small Banks Sold More Stock
Than
The

Large

for this reason, more

showed that even
though small banks do not have
survey

to

access

a

affecting the ability of
sell its shares

While

on

sales

stock

a

bank to

favorable terms.

less

banks

were

frequent

in

propor¬

sell

HDTA, PAKISTAN, CEYLON, BURMA, KENYA.
TANGANYIKA, ZANZIBAR. UGANDA,
ADEN, SOMALILAND PROTECTORATE,
NORTHERN AND SOUTHERN RHODESIA,

their capital accounts than did

larger institutions.

The banks at¬

substantial

amounts from

tracted
;

Reasons for Selling Shares

About 34%

Branches in:

banks

of the participating
indicated that one of the

reasons

they sold stock

was

to put

existing
new

holders

as

well

as

from

share buyers. On the average,

have

itive advantages/from a

public

pos¬

re¬

lations viewpoint.

New York

Gily Issue

Of $32.4 Million Bonds

Offered fo Investors
The First National City Bank of

and

York

New

The

hattan Bank are

Chase

Man¬

joint managers of

underwriting group which was

an

awarded Aug. 26 an

issue of $32,-

400,000 City of New York various

bonds, due Sept. 15, 1959
1973, inclusive. The group bid
3%s, representing a net
interest
cost of 3.2471%
to the
purpose
to

,

100.02 for

city.
Public

reoffering of the bonds
to yield from 1.60%
in 1959, out to a dollar price of
99Vz in 1969 through 1973.
is being made

members

Other

of the

offering

include:
Bankers
Trust
Company;
Chemical
Corn
Ex¬
change
Bank;
Guaranty
Trust
group

Company of New York; Manufac¬
turers

Co.

Trust

Co.; J. P. Morgan &

Inc.; Harriman Ripley & Co.

Inc.; Lehman Brothers.

Smith,
Stuart &

Co.;

Barney

&

Co.;

Halsey,

Co., Inc.; C. J. Devine &
& Co.; Salo¬
Hutzler; The First
Harris
Savings
Bank; The
Freres

Lazard

&

Bros.

Trust

and

tinental
and

Trust

Company;

Con¬

Illinois

National

Bank

Trust

Barr

Company of Chicago.

Brothers

&

Co.;

Kidder,

Peabody & Co.; R. W. Pressprich
&

Co.; White, Weld & Co.; Merrill
Pierce, Fenner & Smith;

Lynch,

Drexel & Co.; Equitable Securities

Two Join Sincere & Co.
(Special to The Financial Chronicle)

CHICAGO, 111.—Anne K. Sher¬
man
and
Harry Zielinski have
joined the staff of Sincere and
Company, 231 South La Salle St.,

the small banks appeared to

members

sold

Midwest

Stock

Sherman

was

have
their shares at lower prices

them ..in a better position

in relation to book values of

a

isting shares than did larger in¬

to meet
future increase in loan volume.

shares

of bank

in the local market may

1957, 15%

54 PARLIAMENT STREET, S.W. I

UGANDA, ZANZIBAR A SOMALILAND PROTECTORAI1

number of banks

a

sale

that

among

to

stocks."

Replies from
indicate

Corporation; Bear, Stearns & Co.;
of the •Hornblower & Weeks: Ladenburg,
participating banks had less than Thalmann & Co.
$5
million in deposits and 42%
less than $10 million. In fact, small
tionately

small

banks sold more stock in relation

Bankers to the Government In: ADEN, KENTA,

the

Aside

writing procedures.

wide market for their

cluded

other, that the banks in¬
in- the survey decided to

were
located in

communities.

distributed without formal under¬

Northern

Banks

13 ST. JAMES'S SQUARE, S.W.I

:

in¬

the banks

by

investors

own

National Bank of Chicago;

than any

London Branches

,

large banks, the. issues were

from

mon

stock.

new

stock, size is not the chief factor

1946-51.
most

results,

banks'

of the banks sold shares

value

higher. The re¬
maining 66% apparently felt that
the advantages of a better capital
position
outweighed
the
disad¬
vantages. A stronger capital posi¬
tion, the study notes, may enable

bank ^shares

new capital, including retained
profits, compared with 19% in the

profits

book

numer¬

of

of

Survey
that 34%
at

,

made

notes
new

shares to

banks

the

distributed.

1952-57,

years

national

yielded 32%

"For

OVERSEAS

share

opening of new
branches, and the growth of busi¬
holders,

that

observes

responses

years

NATIONAL

shares

of

number

About 70%

some

stockholders ranging
percentages to 90%
■,//;'■ " ■

new

small

acquired

by supervisory authorities.

of the banks, accounting for

more

to

paid uninterruptedly since 1873 shortly
since the start cash payments have totaled

to

and

Dividends have been
after organization; and

the

to

dividual

customers.

selling

the

Primarily the new stockholders

improvements in
quarters, the desire to

bank's

the

for

purchase

holders, with proportions go¬

more.

or

accomplished only at prices that
As a part of a broad study of reflect discounts from book values
capital and earnings problems of and that such sales result in a re¬
of
the
book
values
of
commercial banks, the Economic duction
Policy Commission sought infor¬ existing shares. Also, acquisition
mation
from
a
representative of new capital makes only a small
contribution
to
a
bank's
group of banks to examine some direct
of the problems in connection with earning
assets, while increasing
the
number
of
shares
among which
issuing of common stock. Accord¬
ingly, questionnaires were sent to earnings and dividends must be

8.9%

Bell

stock to increase

common

ing

cent increased cap¬

individual

to

k-

c

some

cases,

not ;

sold

oanks

from

ital to enable them to make larger

loans

to

s

pro-rata rights and

full

tne

new

rowers.

35.3%

120 BROADWAY,

a

per

the

existing stockholders.
oi

"Expanding loan demand in the
years ahead is likely to put further important advantages as a means
pressure
on
bank capital posi¬ of improving capital structures,
tions."
Banks' capital positions some people hold that such action
not
feasible
for
most
banks.
control their capacity to increase is
total loan volume and to make They argue that in many eases the

12.9%

Members American

just completed

commission

12.3%

on

The

capital funds.

30.6%

Bulletin

has

study of problems facing banks in

Oiht'i

& TRUST

Association.

Bankers

can

Assets

less disposition

to

to the Economic
Policy Commission of the Ameri¬

Stocks

investment

26

from

according

15%,

Common

from

World

of

end

declined

has

Stocks

57.f--.__

the

II, the ratio of capital to risk

Preferred

'

though commercial banks
their
capital ac¬

since

Thirty-one

of

15%

shareholders i did

their

sold

banks

existing

to

exercising pre - emptive
on
a
pro-rata basis.
In

1 alance of shares was sold to other

a

doubled

have

Bonds

1953

Down

the

of

15%

shares

rights

are

waiting lists of "will¬

Some have

another

to increase capital funds show:
(1) 1957
ready market with smaller banks selling more
stock in relationship to their capital accounts than did larger
banks; (2) earnings and dividends were an important influ¬
encingfactor on price; and (3) despite doubling of capital
accounts since World War II, the ratio of capital to risk assets
has declined from 26 to 15% in 12-year period ending 1957.

Gov'ts

Other

program.

"However," the commission's
report says, "40% of the banks,
both large and small, experienced
no
difficulty in selling shares."

About.

shares

227 national banks that sold com¬

Cash &

sion

ing investors."

study of problems facing banks in

while

Ratio und. exp. inc.

A

1957.
management ranks high in the insurance industry.

Bank Shares

en¬

present holders to as¬
sign their rights to the new issue.
Frequently such measures, to¬
gether with the sale of new shares,
constituted a single capital expan¬

year's shrinkage in the assets, the longer term showing
satisfactory, being about 122% in the decade ended De¬

The

56.6%

earned

":

dividend

stock

A

rate.

their

&

Joss exp. to prem.

dend

1950,

in

stock

splits, and raising the cash divi¬

holders

War

The following

1958; 25%

such

dividends,

stock

as

courages

the

counts

$143,835,000; bonds at $90,000,000, and preferreds at $30,000,000.

in

These included

marketing.

Despite the fact that Great American's 1957 liquidating value
down about 13% from a year earlier, due primarily, of course,

assets
at

tractive to investors and facilitate

means

34%

selling

at the end of 1957

stock holdings were carried

common

26

1.17

The

,

The

32%

1.50

provided

/

1.17

1.82

9.0
7.0

,

24

2.01

6.0%

27,000 Caterpillar Tractor
188,000 Standard Oil, N. J.
75,000 Texas Co.; etc.

Many of the banks took special
to make their shares at¬

measures

cember 31,

44,400 Chem. Corn Exch. Bank
12,900 First Nat'l Bank, Boston
18,000 First National City Bank,,. 22,0.Qpy,American Can
18.000 Hanover Bank
48,000 American Cyanamid
18,750 Chase Manhattan Bank
12,000 Manufacturers Trust
4,000 First Nat'l Bank, Chicago

21%

0.58

high grade common

Large holdings of a number of
reported:

25%

281'z

0.37

licensed nationwide and is represented by
About every form of coverage is written,

The
about

1.17
1.17

2.21

the difference.

Miscellaneous smaller lines make up

j

.

11.80

following major

Auto Property Damage.Auto Physical
Workmen's Compensation

27.5%

-----

19%

0.79

line distributions:

Extended Coverage

24%

—0.02

was

also

A break-down

0.81

44.04

to

include One Liberty Street Realty and
Securities Corp.
American Alliance Insurance Co. was merged
with Great American in December 1953. In November 1952 Great
American Corp., a beneficial trust, was then dissolved and this re¬
sulted in a stock dividend of 0.28 share lor each share held.

16%

57.50

was

Rochester American Insurance Co.

holdings

1.31
0.63

-Adjusted

Co.

and dividends.

Low

20%

54

Detroit Fire & Marine Insurance Co.

The

38.23

41.73

H'redU

Massachusetts Fire & Marine Insurance

Range

High

$0.75

53

American National Fire Insurance Co.
Great American Indemnity Co.

Dividend

"

50

Organization of this company was in 1872 under the laws ot
New York, and capital was $1,000,000.
There were several in¬
creases up to 1911
when capital went to $2,000,000 at the time of
the merger of Rochester German Insurance Co.
A number of
other increases took place over the years, several of them con¬
nected with mergers; and the capital row stands at $14,343,500,

substantial

prices at which banks sold shares
was their past record of earnings
Price

Net

$1.39

1948

small

some

at

premiums over book value.
An improtant factor influencing

Share *

Per

—

Adjust.

Value,

Insurance Stocks

Record
Federal

However,

sold .shares

banks

%/Vt

approximately 44%.

of

By ARTHUR B. WALLACE

—

stitutions.

substantial increase in volume
In 1952 this total was $101,-

a

934,000; by the close of 1957 it had grown to $146,513,000, a gain

Bank and Insurance Stocks
This Week

enjoyed

in recent years.

of business written

ex¬

of

Rothschild

&

the

New

York

Exchanges.

and

Miss

formerly with L. F.
Co.

Volume

188

Number

5772

.

.

The Commercial and

.

Financial Chronicle

(813)

Be that

The

as it may, I am sure you
will agree that more is being done

Growing Dimension
Of Management

today

than

what

out

tailor

products

leaning

By W. A. PATTERSON*

research
tomer

dimensions

fulfilled

are

managerial

new

gerial responsibilities

Mr. Patterson

such

covers

the

recent months

perienced
cession

in

this

in.

called

country

business.

forth

public

ex¬

the

has

variety

of

the

of

disturb¬

most

ing

things

about many
of these pro¬

posals

is

ernment

Let it

e

s

our

p

o .11-

sibility."

;

There is always the temptation

,

should do to encourage

oppose

it

longer

term

have

in

the

interest

believe

I

.

tax

our

structure should be reviewed

overhauled;
should

but

be

made

careful

.most

their

longer

penalize
lored

effect

of

the

on

In this

con¬

which

success,

re¬

adoption

encourage

enterprise

courage

the

Management's

structure

a

after

consideration

whole.

economy as a

revisions

only

range

nection, it is
sponsibility to
of

such

and

will

rather

en¬

than

structure tai¬
of the next

a

to the economy

decade

rather

from

the

than

a

of

preserve

in

balance

and

ensure a

a
our

favor¬

point out

that, more
what happens

before,

ever

have

can

serious

immediate

an

effect

on

your

own

what

of

in¬

Then, too, we do not have a
monopoly of management skills,
and a free interplay of ideas with
business
tions

mutual
has

be,

and

benefit.

by in

gone

what

of other nar
has been, of
Hardly a month

managers

can

in air

we

change

recent

but

years

transportation, for

have

example,

been

experiences

able

to

and

"know

ex¬

how" with management represen¬
tatives of other nations' airlines.
This

mutual

taken

has

exchange

in

place

many,

in¬

many

Primary

the

level

business

of

re¬

and

Managements to "run scared"
thereby precipitate a down¬

ward

spiral.
danger that

This is

it

once

that

reason

function

longer the

no

the

Management
planning has
present dimensions.

of business

achieved

its

Managements

have

today

their planning far

tended

the

for

was

ex¬

beyond

month-to-month

a

range.
They
laying plans for periods one

are

five

to

much

as

sometimes

and

years

as

10 years ahead.

Further,
they
are
implementing
those
plans by capital commitments and
financial
not

are

vision
blow

arrangements
which
subject to frivolous re¬

whenever
hot

economic

cold.

or

responsibility

a

which

But

when

sponsibility
let.

us

agement

of

is

in

as

this

power

as a

speak of

the

of

business

in

benefits

forget that Man¬
hobbled by such a

has

power

never

for

wage

which

are

achieved.
*Fiom
the

17th

in

few

before existed

increases
out

are

with the increases in

-

this

not

of

a

being

It
talk

Annua]

of

is too much

can

for

by Mr. Patterson
Stanford

ference, Stanford University.




to people who are our
customers, stockholders, and em¬
ployees — I recall an incident
which occurred
invited

was

the

on

said

I

ness.

Con¬

of

directors

to

the

of

I
go

two

of your company
and
to

President

"Before I become

one,

understand

determine

work

as

consider

a

of

director

I want to know

philosophy,

your

whether

team.

a

What

we

can

do

you

primary
respon¬
And he said, "My

your

sibility to be?"
primary responsibility

is to the
stockholders of this
great com¬
pany." I posed the identical ques¬

tion

to

the

other

President, who
replied, "My primary responsibil¬
ity is to the policyholders of this
company.

I cannot successfully
the stockholder unless

I represent

the customer well and

honestly."

I went with the latter

company.
Let

us

hope

ment in this
to

say

sibility
cause

It

that

no

manage¬

primary

respon¬

stockholder,

cannot

unless

represent
it

be¬
the

represents

employee and the customer.
is

evident

to

me, in the past
sluggish demand
for goods, that perhaps in some
cases Management has
misjudged
few months of

a

what the customer wants and how
much he is willing to pay for it.

while

the

of

stockholders

I

ago

observed

a

that

they were also customers and em¬
ployees. Now I would like to re¬
mind

that

you

Management
clusive

employees
either.,

groups

ment personnel of

a

customer feels
and your product.

about you
As

your

result,

the
researchers
have come
up
with the phrase,
"Motivation
Research," and re¬
cently the Psychologist has been
brought into the picture to help
determine
what feelings
people
a

toward

complex

so

or

obscure

themselves

people

product

your

feelings which

may

expensive

machine,
place on it,

we

with which
it

we

high

the

care

and

use

and

the

before

retire

it

machine

and

along

there

tached
want

it

to

to

with

is

other

which

we

It

preserve.

nate that there isn't
that

of the

we

tell

you

tentions,
know

designed
about

more

We

help

to
our

businessmen may be

talking

too

guilty
other

with

much

us

consumer

an
expensive machine - in
office or plant, find out how
Management looks upon that ma¬

what

and

businessmen, and not enough with

resolve

these people who are our custom¬

for the employee.

But

ers.

we are

expanding in this

direction; and, to my mind, learn¬
ing more about our customers and
our prospective customers in one
of the most important tasks con¬
fronting Management today.
In the case of the people who
are
our
stockholders, the scene
has changed considerably in the

to

it.

we

be

board

only

members

armed

officers

proxies. Those
stamp" meetings.

"rubber

Improved

the

by

d

a n

with

were

Management has
stockholder
participation not only in person
at annual meetings (with or with¬
out
a
free
lunch)
but also by
opening up lines of communica¬
tion with Management.
This has
to

been

encourage

the

result

of

action

part of corporations
stockholder

well

annual

as

the

on

in providing

information

better

and

more

the

in

quarterly

for
as

reports; but more

than that by carrying major prob¬
lems of the management to the
stockholders

as

they arise.

I

recently had occasion, for ex¬
ample, to inform our 22,000 stock¬
holders of the national problem
of

effective

more

of

control

air

and of air traffic, and what

space

they

could

obtaining
Washington.
And the response was most en¬
couraging. Your stockholder list
immediate

is

do

toward

action

ready-made

in

inter¬
ested people who can provide a
sounding
board
on
questions
which affect the company and its
profits. Management here has an
opportunity, which has not yet
been fully grasped, of encourag¬
ing a two-way flow of informa¬
a

panel

of

tion and ideas.
It

is

secret

no

that

at

times

stockholders
or

question the actions
policies of their management.

This is
it

a

gives

healthful condition, and

Management

tunity

to

holder

the

share

with

reasoning

an

the

oppor¬

stock¬

behind

de¬

cisions and to explain the possible
future
implications
of
current
actions.
An
honest
and
sincere

response.to

such

questions is

obligation of Management,

who

as

an

well

still

has

concerned

more

than

has

more

value

we

with

with

that

individual

an

suffered

inca¬

some

pacity?
When

machine

isn't

turning
expected of it we set
our engineers to work to improve
it so it can
meet
our
require¬
a

out what

Stockholders' ' Meetings

or

spoken.

of

What

re¬

is

now

will further expand the
of Management—not

holders

and

nation and the free world.

Continued

*

employees, but also
our communities,

they embrace

from

4

page

Stepping Up the Supply
Of Stepped Down
Power: Gobteigh

Do that and I'll

repair it and
back into service. Should

machine

not attended by

much

as

it

Because

ers'

but

do

ask ourselves how to

it

was

the

responsibilities

have

Co., United States Steel Corp., du
Pont, U. S. Atomic Energy Com¬
mission, Cleveland Electric Illu¬
We set aside funds to amortize minating Co., P. R. Mallory & Co.,
our machines.
What's the differ¬ Inc., Federal Pacific Electric Co.,
Indiana Bell Telephone Company
ence between that and a pension
and many others.
plan?
When a machine breaks
A widely acclaimed new Pre¬
down temporarily we don't junk

get

meeting

for

does

Manage¬
discharge

wager you are going to have ex¬
cellent employee relations.

past few decades.
There was a
time when the typical stockhold¬
stockholders

it

inanimate thing; then

an

and

only as those dimensions embrace
people who are customers, stock¬

Formula

Take

chine

I

our

your

machine,

many

which

as

problem, but here is a simple for¬
mula for good employee relations:

that

assume

accept

dimensions

more

economy we now

does

from

million,"

also have national surveys of cus¬
tomer
attitudes
and buying in¬

ef¬

and
We
in a

In my opinion,
imperative for Management
successfully to replace itself, to
replace itself with men who as
managers five or 10 or 20 years

conscious of their value.

Employee-Relation

proposed action,
avoid costly errors.

these

it

on

This may be an oversimplifica¬
tion of the complexities of the

We

future

mains to be done?

If we could just
put down something about "20,000
$80

can

making.

the

measure

manpower.

ment

with every day.

value

we

New Managerial Blood

work

we

employees,

why they react as they do.
Be¬
of
the importance
of the
our

our

indicate the

employees

as

business systems

our

effect, experiment
corporate laboratory in order to
a more productive use of

unfortu¬

something

balance sheet to

value

know

is

soon

achieve

assets,
at¬

systems is

or

As

of
and

a

thereby
can, in

we

value

maybe we'd be considerably

the

of

from

or

cause

customer in

fect

in the

up

dollar

a

for.

Now let's

shows

organization

in decision

then

service.

That

sci¬

develop models which

used

can

maintain

preparations

we

called

can

be

shift it to another part of the

or

plant,
make

physical

understanding

quantify

we

(in¬

the

be

that

can't

also
can

management
people), 1
think of how we in business treat

an

the

production processes

cluding

value

better

management

are

month,

how

A

employees, too.
(It's . just that
Management's dimensions are dif¬
ferent.)
When I think of
employees

in

ences.

Manage¬

company

.

research

as

and

not mutually ex¬

are

research and devel¬

on

of

People than we are
spending today. A better under¬
standing of the employee might
very well pay off as handsomely

must

top of that, you've got to

on

the future

opment

But

know

country will continue

that its
is to a
it

the

the

years ago.

by coincidence to

board

line

be

some

companies in the insurance busi¬

stockholder

before

Business

sibility

and

productivity

and

dimensions—our growing respon¬

represent

re¬

country.
I refer to the
of labor union leaders and

demands

which

whole.

we

concentration

hands

This, too, is
Management

is in the interest of stabil¬

ity of the economy

area

winds

internal

the

speaking

little

build

to

company.

balance sheet at the end of
every

come

to

Customers

to

it

how

and

prod¬

your

Fortunately,

Responsibility

now

what

opportunity

look, and what service features it
must have before he will buy it.

also

dustries in recent years.

Turning
When

do,

of

not

need

World

cedes there is also the temptation

must

uct

I

War II.

for

determine

goods markets.

carry-over

conditions

economic

business, regardless
dustry you are- in.

the

of

growth
Don't misunder¬

we

best.

very

able
position in, our economic
dealings with other free nations.

and

to

and

unless

economy

than

,

me.

proper

and

abroad

Manage¬
vision

the

health

of the economy.
stand

a

will

have

own

economic

inflation,

more

should

time

one

thought

as

an

In

pro¬

realize that it's the customer who

service—-

proper

stability. Tax reduction, for ex¬
ample, may be welcomed by the
individual or the corporation as
a
near-term benefit, but if it is
clear that such action is likely to
ment

at

were

Until

the

tained

to take a narrow, selfish, or short¬
sighted view of what government

mean

government

bringing us closer to
the people and problems of other
nations, this position is no longer
tenable.
America's
leadership
among nations cannot
be main¬

W. A. Patterson
r

of

manufacturer

concern

world

less;

not

matter

only of politicians.
As
airplane has succeeded, how¬
ever, in shrinking the size of our

more,

tax

the

Businessmen

re¬

ity.

it's

-

may
have felt that these

prosper-

or

by

policies, both at home and abroad,

gov¬

store

spend

In

of

the

or

Labor.

the

attitude
"let

hold

to

organized
labor.
When we speak of Management's
increased
responsibilities let us
also be mindful of the pressing
need for an equal acceptance of
responsibilities by the leaders of

remedies.
One

price line,

imposed

d

p r o p o s e

Business

ask

to

were

recently the
same
thing was true of a tele¬
phone set. Today's merchandisers

to reduce prices,
in the face of unreasonable terms

re¬

a

This

wide

a

have

past, products

in such sizes and colors

black.

nation and the free world.

we

to

Management is

Many years ago you could choose
any color car as long as it was

Government, improved dealings with customers, stockholders
employees, and expanded relations with our communities,

In

services

and

and

In the

and

our

to

needs, to search out buying

duced

mana¬

business planning, unselfish view of

as

and

services.

blood should be recruited to cope with tomorrow's expanding
dimensions of Management.

want

find

intentions, and to
gauge
attitudes toward existing
arid
prospective
products
and

s

managerial

to

more heavily on market
to help determine cus¬

motives

responsibilities confronting Management are covered
by prominent airline official who concludes that after present
day

customers

customer demand.

President, United Air Lines, Inc., Chicago, 111.

Today

before

ever

as

stature of the

13

ments.

the

we

Perhaps an employee is in
position and has not

wrong

done

because

well

much

as

we

attention

didn't
to

give

proper

placement as we did when we
put the machine in place.
This
situation

calls

for

counseling and
training of the employee.
Sometimes
it. is
necessary
to

convert

machine

to

do

cision transformer model is called

the

"Hush-Flush"—so
of

cause

be¬

named

noiseless

its

operation
in schools,

(especially desirable
hospitals, churches, theatres, etc.);
and its compact design permitting
it to be installed "flush" with the

wall.

Precision has developed a
uniquely efficient automation-type
U-shape assembly line. The only
trouble is it's

bulging at the

in its present

seams

leased plant of only

square feet, and reportedly
has its eye on a splendid new
plant in the Chicago area to pro¬

27,000

vide for expanding needs

ing

of

com¬

years.

For

the

securities

investor there
to

choose

are

two

in

the

from

more

Precision Transformer Corp.

job.
Certainly our su¬
pervisory-training programs are
pointed in the direction of up¬
grading the employee to enable
him to carry more responsibility.

structure, the 6% bonds now sell¬
ing at a premium of 125, convert¬

a

a

complex

And

in

the

of

matter

retirement

are
finding that in the em¬
ployee's and the community's in¬
terest, it is desirable to condition
we

an

employee for his retirement

well

as

to provide

as

adequately for

his

replacement.
The analogy could be carried
further, of course, and somewhere
along the line it would break
down, because we are not talking
about machines but

about

people.

The

motives,
desires, reactions,
loyalties, and aspirations of peo¬
ple are not as readily measured
as

are

the attributes of machines.

ible

500

into

(and

subject

shares

of

call at

to

common,

105)

and

the 694,900 shares of common now

trading in the Over-the-Counter
Market at around txk.
cision

show
for

Transformer

20% increase in

a

fiscal

crease

new

to

sales

and a 100% in¬
profits over 1957 (in
year)
shareholders

1958,

in net

recession

a

With Pre¬

scheduled

should find the next annual report

pleasant reading; and quite

a

few

bondholders might decide to con¬
vert.

With

.

the

demand

transformers

parallel

with

industry,

electric

rising so rapidly, in
the electric power
American

total

former sales

for

are

trans¬

expected to reach

Perhaps that leads to the observa¬

$1% billion by 1968.

tion

well for the companies we
touched upon. Everyone
is enthusiastic these days about
electronic stocks. Well, the one's

that

here

search which

is
has

area

an

not

for

been

at

re¬

all

thoroughly explored.
Last year

lion

to

$10

something like $9 bil¬
billion

the United States

on

was

spent

in

All of which

augurs

have just

we've mentioned qualified as

such.

research and

development,

and we are .justifi¬
ably confident that such expend¬
itures will pay off handsomely in
the future.

This money was spent

mainly for the research and de¬
velopment
of
Things.
Perhaps
more
money
should-be spent ih

W. D. Faubion
RICHLAND,

Opens

Wash.—Walter D.

Faubion, Jr. is engaging in a se¬
curities
finn

business

Newcomer

from

StreeL

offices

at

The Commercial and Financial Chronicle
14

.

.

Thursday, August 28, 1958

.

(814)

deficits resulting from

payments

Trade With Communist Countries
By PAUL EINZIG

Observer

of trade with the

that current liberalization

notes

generally welcome to Britishers, and will

Communist bloc is

sterling both through increased exports and diversion
of purchases from hard currency countries. At the same time,
Dr. Einzig depicts
offsetting economic disadvantages, as

benefit

There is

Eng.

LONDON,

drastic
list for

The

—

embargo

Communist countries,

to

exports

which

for

the

of

agreement was recent-

reached
among the al¬
ly

mcnts,

this

n

JL
!

has

It

Press.

>

been for some

British

Trade

has

ernment
been

pressing

for

liberal i-

a

of

tioii

za

principles it is to the ad¬
vantage of a country to specialize
in
the
production of goods in
which
it has experience
rather

Coratnuni

the removal of a large
number of important items nom
the embargo list is consideied a
British diplomatic victory.
-*-^e
Left Wing Press and Socialist pub?
lie opinion is gratified by the conciliatory gesture, and Conservabloc, and

circles are

tive

countries can
produce at a lower cost.
There
cjm
be no doubt that, had that
principle been followed in the
a}jSence of embargoes, the Soviet
Union would have been able to
import the goods concerned at a

nw»rf»n«ntf

long

way

intpnaifi-

an

pi^eventing an intensuir

cation of the business recession.

at heait Free

Most Britons are

alone

Traders, and on that ground

sale

The

will

first

The

purchases

British

ol

diversion

to the
Communist bloc. For years it has
been argued that as a result of
the embargo, Britain and other
Western European countries have
hard

from

areas

currency

markets

natural

lost

their

they

had to spend
goods.

and

much

too

oil

dollar

idle

be

would

It

deny

to

that

the change is likely to entail con¬
siderable
economic
advantages.
One

thai;

main

the

of

favor

has

been

embargo

the

to

owing

in

arguments

liberalization

of

the

Soviet Union and other Communist

Pu' Lf

built

have

countries

im-

up

suc'1 M the

"ldust"es

i

shipbuilding industry and machine
and that as a lesult
the total capacity of such indus-

fool industry
tries all

ovei

yiable

institutions

ernments

very

Gov¬

to

the world is

in.

now

jng on covering the entire amount

in°olved

by means of confirmed
prprJiic
nv
nthpv
similar
credits,
or
other
similar
means.
Since the delivery of cap-

agree

l\/l

at*aattap

iu

,c

stronger position than

it would have been if it had

of

to

such

depend

aspect

not received

tion.

on

the

con¬

import

essential goods.

Another

has

of

the

idle

been

the

result

net

a

gain

would

of

Com-

munist

productive capacity. The
fact is, however, that industries in
the U. S. S. R., as in other Communist

countries, were working
capacity. Industrial

all the time to

expansion was only limited by the

and

.manpower

This

siderable

for

materials

means

that

proportion

had

sources

building

not
up

if

a

con-

such

of

been

availre-

employed

industries which

produced

°
goods

list,

other industries would

.

,

may
u

to

.

some

,

..

on

the




.

to such terms.

-

>.

And owing

the

competition between ex¬
porting firms there is a strong
temptation to abstain from in¬
sisting on full guarantees.
Unwarranted Credit Demands

pounds.

Sales Manager,

has

the

,

embargo

What is more, even the possibility of strong pressure in favor
of granting long-term
credit to
the Communist purchasers must
be envisaged. This was done on
a
large scale before
the
war.

There

was

some

economic justifi-

cation for it, but there would be
none
in
the
changed
circumstances.
ment is

that

in

of the

poration,

'

Karl D.

Jr',

had

full

not

■■

'X

natural

.

new

.v

government special
commercial banks,( in¬

CHitU

a

mixture of

natural gas.

and

The

.

transaction

current

in

long-term

position to grant
credits for exports it

should- be

in

a

a

casil for imports.

position

to

pay

It is supposed

is

A/.'.

:|s

Bank

dollar

gold

if

balance

of

with

cover

as

United States.

the

outside

bonds

a

•'?

.•

;

s;<

the

Clinton

work

of

expe-i
in

the

industry. He

formerly

a

plan for the accumulation of mu¬
tual fund shares.

M. K.
i

;

-

Grant Oppns

Special to The Financial Chronicle)

SACRAMENTO, Calif.
colm

Grant

K.

is

;
,

Mal¬
engaging in a
—

securities business from offices in
I he

Crocker-Anglo Bank Building.

Chapin With Kidder

(

(Special to Tce Financial Chronicle)

ST.

PETERSBURG, Fla. — Roy
Chapin has become associated
with A.M. Kidder & Co., Inc., 400
F.

3each
was

for

Drive, North: Mr. Chapin
formerly Clearwater Manager
and Company.

Sincere

force

result of the consolidation.

is

$600

Joins A. ML Kidder Staff

Inc.
12

of

The total

will

debt

of

not

sale of the

the

be

new

•

Bank's funded

affected

by the

issue. Outstanding

tfi

(Special to The Financial Ciilonicie)

outstanding.

«

%

Laboratories

CBS

Columbia

retired when the new 31/is become
'

:£

-

,

of these

The total

million,
of
which $115 million will have been
placements

has

purchased

new

Stamford."
research

•in

an

research
The

and

military

FT.

R.

additional

will

development

East

in
do

vacuum

office

at

resolution data recording systems,

under

the

and related fields.

D. Johnson.

outside

the

United

States.

Included in these holdings

the

side

United

States

are

—

1513

branch

Jefferson

Street,

management of Robert

out¬

1

$575

'

million of the Bank's dollar bonds

qnd

notes;

this

is

fifths of the $1,500
Bank's

obligations

nominated

in

almost

lars.

The

two-

million of the
that

United

remainder

States
of

de¬

are

dol¬

holdings

outside the United States amounts
to

some

lent,

$200

million

denominated

equiva¬

variously

in

ling and Swiss francs.

5

j

-

•/

'

"

A

Primary Markets in

'

CHAS. W. SCRANTON & CO.
Members New York Stock

Exchange

'CONNECTICUT
New Haven

S

SECURITIES^

New

-

Goldman,

Sachs & Co. has opened a

acoustics, solid state and
physics,
magnets,' high

tems,

held

Ohio

TOLEDO,

sys¬

bonds and notes of the Bank will

$1,700 million,
which, it is estimated, 47% are

Olas Boulevard.

Las

Joldman, Sachs Branch

work

reconnaissance

LAUDERDALE, Fla.—Doris
has
joined the
M. Kidder & Co., Inc;,

Culverhouse

staff of A.

site

acre

center

center

of

Systems,

adjoining the 11

acres

its

Division

Broadcasting

still stand at about

Netherlands guilders, pounds ster¬

part

rience

'

position

to

in

crease

the

Canadian dollars, Deutsche marks,

to

v

was

The directors of Plume and At-

eighth private placement of World

}° P°ssess the world's second
largest gold reserve and is in a
necessary

over
ades

leading mutual
fund underwriter, from which post
he resigned recently after more
than 20 years of service, and he"
has also pioneered in the develop¬
ment of the systematic investment

manu¬
;

two dec¬

/

HUdtllS

Vice-President of

Oct. 1959. Prior to
company supplied its cus¬

with

tomers

to his
position
,

mutual fund

natural gas by

where

Adams

Mr.

The Company's

gas.

Pettit,

Future

brings

its customers to

of

by

Planning Pres.

program calls for complete con¬
version of all customers to straight

not

factured

had

I.

k,

an¬

;

thrust for take off.

of 40%

ances

Purchasers of the issue included

bonds

•

o r

nounced

itial rating of 2,900 pounds of dry

'

Y

been

has

rating test for missiles and is also
suitable;? for both military and
commercial planes. It has an in¬
(test stand)

350

Avenue,

New

15-hour

a

Future

of

Fifth

designed
firm. The

EastHartford
completed

has

member of

a

Planning Cor¬

institu¬ / The Hartford Gas Company has
completed
conversion of appli¬

countries

Since the Soviet Governnow

and

directors

of

board

turbojet weighing
This engine is

new

/

Executive Vice-President, National

Aircraft

development

Planning

the fifth and smallest jet

been-held

of

Expected

If the Soviet Union in build¬

resources

able.

gO0ds

°

change

sufficient atten¬

ing up its machine tool and shipbuilding industries had employed
have

JT-12, a
only 430

V- $.•«». -•••.'•}

i

The election of Caleb Adams as

.

f!P!!
.7v
is now in a

itanmvomontc

of requirements.

tinued

Future

suddenly, or even 1958.
"
firms which
The
countries
where
buyers
have come to depend on such or¬
Chesebrougli-Ponds, Inc. is un¬
purchased the new bonds are:
ders
are
exposed to unpleasant .Australia, Austria,
Belgium, Can¬ dertaking a $2,500,000 expansion
surprises. If they expand or ad¬ ada, Denmark, El Salvador, Ecua¬ program at Clinton which will en¬
able the firm
to consolidate all
just their capacity to meet Com¬
dor, Ethiopia, Finland. Germany,
munist requirements, or if they
domestic manufacturing. The pro¬
Greece.
Honduras,
Iran, Israel.
neglect other markets, they will Italy, Japan, Mexico.
Netherlands, gram will allow the elimination of
be at the merey of Soviet polities.
Morocco,
Nicaragua,
N orway, duplicated production facilities in
The only
way in which
they South
Africa, Sweden, Switzer¬ Pennsylvania, New Jersey and
could
safeguard
themselves
to land, Thailand and United King¬ New York plants. The cosmetics
some degree would be by insist.
firm
expects a considerable in¬
dom.

have to be spread
over a period of years the Soviet
trading
organizations
may
not

at

and

accounts,

xheir purchases

Moreover,
it is argued that from a strategic

ovnncc

excess

the

1.

the pre¬

over

Caleb Adams Joins

companies
and
private wood Manufacturing Company of
corporations. The issue was sold Thomaston recently voted to split
chiefly to investors who made the stock four-for-one and to ap¬
purchases from the $75 million ply for listing on the American
issue ol 3%% dollar bonds,- also Stock
Exchange.
This action is
placed entirely outside the United subject to approval of the metal
States, which matures on Oct. 1, firm's stockholders.
'

terminate

unni.
bank

increase

an

vious quarterly rate, of $0.25-

surance

the

are

Communist
liable

are

in

markets

countries

Communist

1,

Oct.

central hanks,

the'Western
industries concerned. Judging by

undefendable.

resents

Aircraft

Whitney

disclosed

1957 the

Bank

a|3]e disadvantages to

past -experience,

dated

the selected

among

from

consider-

entail

to

ap¬

cancel orders, so that

Advantages

Economic

js

June

United

of

.previously bought the Bank's obli 4

js

bjoc

April

on

is

issue

approached, orders being re¬
ceived for $127 million of bonds.
Requests for bonds were received

before.

the

On

&

Pratt

the

a

quarterly dividend of $0.27^2 pay4
able Oct. 1, 1958 to stockholders
of record Sept. 2, 1958. This rep-?

of 1 ty; shares of Hartford

Division

JT-12

Light

declared

Company

.

embargo

of

the

1958, and matures Oct. l; 1960.
..
There was keen interest in the

n^eiy to speed up Cornmunist industrial expansion,,
Increased trade with the Soviet

revision

doe

payment

1959.

quarters that sterling
by the change not
only through an increase of British
exports but also through a
benefit

known

be

interest of 3V'i%,

carry

The

Connecticut

of

Power

the plan calls for ex¬

National.

ton

by

will

semi-annually, with

payable

gat ions

many

Bank.
bonds

new

the "Two-Year Bonds of 1958,"

as

have

industrial

broadening of the already

a

bonds of the

and

must

in

wide international maiket for the

^

1958

private

by

40 institutional
26
countries,
and

with

investors
marks

made

was

placement

tions

overall

and

National for each share of Torring¬

States dollar bonds.

of United

The

issue

down

been

were

w
goviet
u
(hereforei that on balance
die maintenance of the embargoes

August

has

World Bank has arranged assets of Torrington National
sale,
entirely
outside
the $28,194,592.
United States, of a $75 million is¬

'the production of the embargoed

s]0Wed

Co.

Trust

&

The

sue

as

devices.

the

than that required for

manpower

j

reproduction

fidelity

well
as
military
electronic and electro-mechanical

'• rington into the Hartford National

"

1958

expanSj0n in the Communist i^loc
to no slight exlent.
This means

in

;

in

a

Hartford

of

Directors

30,

they welcome the removal of artificial obstacles to _the flow ■■ of
international trade. .It is expected
will

rejoicing.'

re¬

one-sixth stock
Gray Manufacturing

ment, high
equipment

; 'The merger of Torrington Na¬
tional Bank and Trust Co. of Tor-

change

production at home,

ulrtil

for

Outside the U. S.

cljr,i,

imymAe
towards

matter

to

is really

Company

1957.

Nov.

World Bank Arranges f.
Sale of Dollar Bonds : Currency,

« > In olher words, the Soviet ex,
P«-S?f,c
Pinne« areenter" i>°rts needed
in order to pay for
official ciicles hopes are enter
imnnrtc
wnniri
hive
heeii
^
tained that orders to be received.
produced with the aid
of less
Communist

two

Western

fields,

Telegraph

through an ex¬
change of 20,000 shares of Western
Union for 60,000 shares of Gray.
Gray manufactures dictating in¬
struments, television studio equip¬

proved byedirectors of both banks.
Subject to the approval of stock¬
holders and the Comptroller of

^

by British firms by
countries
will go
a

for

Co.

air-

turboprop

allied

other

interest

is

inevitable
there
opinions
as

was

>

off

take

step in its program

cently acquired

first flown by the British firm in

relaxation of the em¬

a

Bank

in

that involved

than

COgt

j0,ver

^heir

De¬

liijierF It weighs 18 tons and was

a

experienced

more

s I

and

Union

are

whether its achievement

which

try to produce goods

than
fc-mzig

Caul

Ui.

trade with the

helicopter.

vertical

room

new
industries in
which they had to learn through
trial and error? Free Traders who

an open
secret that the

British

new

a

to manufac¬

distribute the Rotodyne,

and

another

of diversification in the electronics

advantages

of

lishment

jubilant about the removal of
artificial barriers to trade should
realize that on the basis of Free

Gov¬

For

As

obtained

and this will enable them to com¬

bargo

ex¬

are

.time

the American license
ture

Corpora¬

has

exports of engineer¬

products

Even if

which

in

industries

of

the

on

Bloomfield

of

pete with/B^
in foreign markets.

advantageous for

concentrate

pansion

British

the

■

Communists if they had been
to

increased

ing

much
v

the

alone

reason

Aircraft

Kaman

The

tion

signed
by the Fairey Aviation
Company Ltd. of Hayes, England,
likely to be the revolutionary Rotodyne is a
purely temporary.
Before very cross between a helicopter and a
long the Communists would be conventional winged airship. Ca¬
in a position to exploit British in?
pable of carrying as many as 48
ventions to their own advantage
passengers, it is the world's first
of

it not

would

is,

question

no

they purchase from Britain.

they already had some experience
rather than embark on the estab-

.unanimously
i

The

have been more

able

was

welcomed

more

the

Govern-

lied

been expanded to a
considerable extent.

have

Connecticut Brevities

protection for Brit¬
ish firms exporting to the Soviet
Union
against the
violation of
their
patent rights.
There is
nothing to prevent Soviet indus¬
tries from copying any equipment

speeding-up of Russians' industrial expansion, undependability
of their orders, and violation of patent rights. Foresees un justified demands for Icng-term credits by Soviet buyers.
>'

revision

of the embargo.

the relaxation

York

Hartford

—

—

REctor 2-9377

JAckson

7-2669

Teletype NH 194

Volume

188

Number 5772

.

.

.

The Commercial and Financial
Chronicle

(815)
not

Ethics in Modem
By ROBERT E. WILSON*

forthrightly pointing

out and

ethical standards of business
it appears

'The

(Indiana)

though this

as

to say

an

not

were

at

so

and

In

nation.

spite of
and

radio

d * accusations

against

politicians

ual

many

companies

our

o r

six

whole

even

industries, I
am

from

sure

my

about

own

business

erally

Why

of

at

are

1%.

Think

to

the

cost

and

Increasing

Government

Business?

on

But if what I
say about ethics
in modern business is
true, why is
it that our government has

before and

t h

e s

es¬

Robert E. Wilson

e r e

said

that

so

many

...

—

curities and Exchange Act has
kept the climate rather
unhealthy

for

crooks

we

deserve

since.

ever

Of

give serious concern to everyone
who takes pride
i,n the high stand¬
ards of modern, business. How can

course,

laurels for merely such actions be accounted for if
obeying the law. However, the eth¬ businessmen are really honest.
ical standard
One reason is, of
presently acceptable
course, that
to the business
community sub¬ our Federal bureaucracy has for
no

stantially transcend those set
by our newer laws. As the

been

many years

even

called

result,

the SEC has had
very little occasion
to prosecute
any substantial com¬

bright

100%

for

overrun

young

the

men

with

so-

who

are

planned

economy.

As

individuals

even on technicali¬

prise they try to discredit private

ties. I believe you could
count on
the fingers of one hand the
num¬
ber
of prosecutions
or
scandals

business management if they can.
They use their positions to create
dissension between government

you

and business, to spread fallacies
regarding business, and to harass

important

or

under that

act,

recall

can

involving the

sponsible officials

re¬

the corporate

or

acts of any of the 1,100
companies
on the New
York Stock Ex¬

business with complicated regula¬

listed

previous

business

some

four years ago, business
got rid

1,600 orders using
8,000,000 words.

generations.

every case of bribery of
public official there is always a
briber as well as a
a

The

total of

a

Manufacturers'

Ceiling

of

over

General

Price

how many
uals or companies

Regulation, known
22, including its 33 sup¬
plementary regulations, covered a

hot

total of 206 pages, or about 221,000
words.

bribed; but
of the bribing individ¬

inferring that big business is
inherently more honest than little

Crook

merely

seldom attain

can

of power
ness

is

it

that

Typical

a

position

a

in any substantial busi¬

though

he

readily

can

ganize or gain control of
corporation and use it as

or¬

of

two

fidence

mere

in

have

another.

one

many

of

the

duced

to

writing

deals

matter

by people in the wholesale
to

Let's read just one

just

prepare

kind

one

of

one

cut

meat.
rib:

Oven-pre¬

that

means

re¬

t's,

of

the

carried

High moral standards exist
must

exist

efficient

to

make

possible

production

and

dis¬

tribution of $400 billion worth

of

goods

in

this
cial

and

services

country.

bribery,

countries

annually

Fraud and
so

are

in

billions

goods and property

by

a

true

word

or

among

a

are

dollars

exchanged

sign. The

bankers.

in

same

Our

is

talk

by

own

Mr. Wilson before
the Executive Development
Program, Col¬
lege of Commerce and Business Admin¬
istration,

a

University

of

Illinois.




saw

a

•

good

The valuG en2inGpr etariAo inni,

arp

ment.

In that field

equiptoday the

even

is

The

yalue engineer must know;
engineering, and must be right up-;
to
date
always on better materials and processes,

It

his job to ask

sensible questions.

questions_;

"Why machine

that part? In the model
in

shop—yes; /
production—why not stamp it?"*

"Why

not use that new plasticgasket?" "Why use bronze?" And
so

In

on.

the

ready saved

Navy 'we have al~

a

respectable number

0f millions.
Yes

I

—

"•

s

familiar with the:

am

a

part of the
inflexibility of our current labor
making base. There may even high coSts. But
through imaginaadvantages in having it rela- tion
and judgment, through retively high. So there was estabIt may be of interest to
search in new
appraise
products,
in sensible
lished unwittingly
the company automation we
the
factors
which
have
been'
can still lower our
steadily improving business ethics philosophy that the quality of the final cost to the customer.
;
'
product based on sound engineer- '.
at a time when moral
^

•

in

'

High

Standards

in Business

/

standards
other parts of our econ¬

some

have apparently been deteri¬
orating.
I
do
not
think
that

omy

businessmen

take entire credit

can

for the

they

development, even though
justifiably proud of it. To
mind, the principal effective
are

factors

rate

be

.

have

been

these:

(1) The depression exposed and
eliminated many whose standards

Today>

o£ operatlon
were

paramount.

Spoiled by Cost Plus Contracts
Then
this
company
ventured
into the consumer
appliance field.

Its first product line
It

reasonably
attractive
times/ If was also all
,

lish

the

structible,

the

Russian*

our

compla-

Research and Development

inde-

,

roc9ntiv

was

for

but

,.

M

®^ny
3abbed us ln

In

....
,

sciJ

everyone talks about

World War II demonstrated some
of the things scientists and
the
scientific method
could
accom-

superb.

was

functioned; beautifully, it

.

-

and it was high priced.

general, however,

there

are

many things about research and
active and sue- development that are
not well unmany
conspicuous warnings for
cessful competition appeared. The
derstood. One of these is the time
the present business generation.
products were cheaper. At the
factor; for it takes time to ac: '(2)
Public sentiment, demand¬ same time they were functionally
complish research and time to
ing the highest standards of con- effective
enough
and
reliable

had

been

inadequate, and posted

Very

shortly,

apply it.
duet for those
handling or ad¬ within reason. They were based
For
examDle
the
basic
reministering other people's money, on a design philosophy which was
Search that laid' the
groundwork
made itself felt not
only by legis¬ better balanced with cost to the
for our latest solid fueled
lation but also by insistence that customer.
missile;
the Polaris, was started in 1947.
only men of proven integrity be
It
has taken that corporation
And other examples could be cited
placed in responsible business or years to
modify the original de- which show that
many times ten
financial positions.
sign philosophy to become more
years will elapse from
ideas to
(3) Business can be carried on nearly cost competitive.
mass
production.

far

removed.

bodies

of

effectively and promptly
men are
dealing

more

The

the

chine

thoracic

Today,

:

all

with

without exception is faced with a
version of that lavish
design phi-

another. Life is just too

one

short

to

maintain an
adequate
against
a
person
whose
integrity
is
doubtful,
so
one
simply avoids dealing with him.
business

a

is

prosper, it must
in fair dealing.

ship

of.

men

to

and

grow

be firmly rooted
...

.

attain the leader¬

large corporations
today by a long process of stepby-step promotion in competition
our

others.

As

Dr.

Copeland

of

process,

losophy.
Why? Because we have a large
of this generation of man-

part

and

engineers who have
grown up and lived their working
years on the cost plus government
agers

contract. Their work habits, their
responses
to
a
problem
place
cost

distinctly

as

of

short

ribs

shall

would

of

be

conduct."

foolish

if

cutting
in
a
straight line perpendicular to the

regard their honor

outside

able

from

skin

surface

the

of

rib

point
measured ' eight
inches along the 12th rib from the
protruding edge of the 12th tho¬
eight
6th

inches
the

point
along the
a

6th

protruding edge

rib

of the

thoracic vertebra."

And

if your ruler slipped,
breaking the law!

Some

laws

B.

men

of far

more

dishonor¬

any

to

proper

and

vagueness, so that no one
what is legal. As Lowell

tell

Mason, Federal Trade Commis¬
sioner, has said, the legality of
illegality of any price now "rests

essentially professional

make

employees,

success

more

military we have more
unconsciously abetted this
design philosophy. Now we

pricing ourselves out of the
market. But that is another
story

namely, stockholders,
and

customers.

large

concerned

for another time.
It may

Such

earnings

about

Continued

on

can

and

factors

page

Value

con-

technique
.

as

T

far

as

I

widely applied.

0f

Right

is

what

the

Navy

address

by

Admiral

tive

SS
Planning,
111.

cago,

University

of

Chicago,

Ch.-

the

war

Navy

research

was

in

the

upper

twenty
miles
up.
we got thin plasties,
in nine-foot wide strips. From
these the Stratolab and Strathballoons were built. Men's
reactions at altitude were studied:
Pictures of the sun were secured,
unobtainable through our atmosphere. From these we may uaderstand weather and communications phenomena better. An Air
scope

Force

officer

set

a'titude

an

record.
And

down

at

the

corner

store

find countless articles packaged in these same plastic films,
a rake-off from a very basic re-

you

search project.
Imagination and
off

here

Navy
firms

too.

In

needed

for

judgment
the

better

submarines.

competed,

pay

193b's

the

diesd

in

but

spects General Motors

en-

Several

most

can

re-

be cob-

sidered the real winner. For their
design was slanted tow£rd raU.

we

be-

the

spin-off

unexpected,

atmosphere
Eventually,

calls

Bennett

the

a
strong, very light material for large balloons. The mo-

engines

rines.

va*he engineering. And we claim
*An

after

is

often

wanted

built
This

factor

quite

uses,

road

Engineering

of

29

Another

gines

be worth while to

learn not

of any

managers are less concerned about

immediate

lush

,

continuous
—

the

less

or

.......

claims of the three groups
be joined as a team to

business

de-

customer

delivering reasonable

They are sider a cost reduction
objectively the that is
fairly new, and

balance

a

satisfy

owners.

must

you

In

to

are

rather than

able

product

they did not

as

(5) Most of today's managers of
our
larger industries and busi¬

who

regulations go
to the opposite extreme of inten¬
tional

than

men

profit.

nesses are
measure

"

were

importance

Such

a

vertebra to

to

this

mand while

by

secondary

performance
of
material.
Even
when shifted to commercial operations they have difficulty in be-

profit.

a

area,

in his recent book,
continual sifting ing really
cost conscious. They
it*is rare that a man have difficulty in designing and
high executive position producing the simplest, cheapest
says

"Because

manufacturing

standard

The

industry,
almost

in the

attains

cut.

American

when honorable

in a well-established company who
does not measure up to a high

can

*From

originality—we

fhreele^<f tanSfhfpSfry t0Thing ing over the shoulder of design;
imncHnJ+i ke3fs. These an(j production at the critical peg
3udgment riod of readying for production/

kevs

which they join the feather

from
many

non-existent

of

in

getting

moved

here. On the much maligned stock

exchange,

principal
industrial

we're

/

Reasons for the

Harvard

racic

commer¬

common

almost

the

rapid

now

Equipment cost

or

removed

the

of

one
our

no

•

idea and adopted it.

automation, it

In view of all these

been

rib

crossing

To discuss with
meaning on the
three keys to the
future, of cost,
of research, and of

enterprise

you

bone,

be

the

petition.

have

the

and

,

with

the

and

of

laws and commis-, and integrity.
inWr v
'
sioh orders that
sharply limit the '
Let us first consider
the cost of
ways in which we can compete/ the
product in a somewhat philThe idea seems to be that we must
osophical vein rather than
by excompete, but that no one must be animation, of
precise methods.
hurt or lose any business in the*
One of our
larger corporations
process! The public interest can-'
established its reputation
not be served by such "soft" com-:
years
ago in electrical
generating

after the chine bone and short ribs

bones,
exposing the lean meat, but leav¬
ing the feather bones attached to

i's

Act,'

more

(4) Most

corporate record, but by the time
the lawyers get
through dotting
agreement has often been
out in full.

is

But

contracts" have

as

not well
understood, Admiral Bennett explains
why intelligently used
automation, science and cost-cutting
are the three
keys for new products and new sales.
Says three
less tangible
keys to the future are
imagination, judgment
and integrity.

law.

part

necessary

competitive

for

and

more

If

vertebrae, shall be entirely re¬
by cutting to the point at

True,

later

a

unreasonable

part of the
regular seven-bone rib remaining

con¬

are

as

a

cartels

reasons

served

pared rib

verbal agree¬

who

men

the

of

"Oven-prepared

of business that is done
every day
—often involving
huge sums of
money—on the

as

progress.

guard

from

sur¬

prised me in my management ex¬
perience is the tremendous amount

ment

of

placed on businessmen
by the OPA were the complicated
requirements which had to be ob¬

—how

cloak.

One of the things that has

old

an

Sherman

conscious

that fcfe

ment

a

agreements in restraint of
competition. The resulting absence

burdens

meat business.

small

a

a

CPR

as

did you ever
hear of before the
exposure? I'm

—

the

—

merely

cost

as

,

litigations.

With the death of the OPA

?

True, for

business

law

—

unhesitatingly observing that "cost plus

many not

,

tions and

change. This represents a substan¬
tial improvement on the
record
or

anti¬
10 years was
evidence of wrong¬

no

American

my

part of a studied campaign to
substitute socialism for free enter¬

pany

on

N.*

they should be, that we
should not plunge
blindly or be stampeded into automation,
and that there are
many things about research and
develop¬

in

England they knight
were some freebooters in
business! their leading businessmen
over
Who were taking the
public for a here they indict them! And that
ride, but the depression weeded is really not funny. These attacks
them out pretty fast and the
Se¬ and their effect on public opinion
.

left;

facts, I trust basic criteria of purchase do not
will agree that governmental, really include cost.
The things
hundred suits of one sort or an¬ attacks or suits by no means dis¬ that count are
reliability and low
other against large,
corporations1 prove the existence of high ethicaL operating cost based on the finest
or
even
whole industries?
It is standards in business.
engineering.
the past two decades filed

pecially dur¬
ing the 'Twen-

After

outstanding

<

BENNETT, U. S.

Chief of Nayal Research

—bars

over

Admittedly

ti

of

nut¬

a

^

means

Attacks

high.
■

the

gen¬

11-time

an a

over

efficiency of doing business in this
country.
'

perience that
the ethical

standards

total

1%,-but actually

one-fortieth

what that

ex¬

of

of the past

case

come

corporate accounts, yet
bad-debt losses over the past
years have averaged not
>1%,

not one-tenth

By REAR ADMIRAL RAWSON

which most industrial leaders wel¬

and

s

The

trust

One

per
year
to
well
million different individ¬

over one

moment.

are

$1,700,000,000

commentators

by

we

of the right kind.

even

in

case,

Three Keys to the Future

the

dissent,

quantity discount

doing— no new facts
new interpretation of

have become

may

company's credit sales

charges by left-wing col¬

umnists
a n

enemies,

any

continuous barrage

a

we

desirability of making friends that

unwilling to make

of wild

this
no

of

a

it is not." Businessmen must

decided

The retired oil industrialist wants
courage

leadership from business. He fears

obsessed with

;

of

in

guess, at their peril, what the law
is supposed to be at
any given

times, Mr. Wilson

one area of valid
criticism—i.e., failure to lead
fight against both dishonesty and
demagoguery in city,

state

of
Mason ought to

is valid if the Commission
chooses

singles out

so

law

15

whim

Jackson

Supreme Court said

explaining why American
all-time high, and why

at

are

the

on

Justice

shell, is that

After

and

but

bureaucracy." Mr.
know.

Retired Chairman of the Board, Standard Oil

the

law,

on

as

Hundreds
for

all

many

know

of

well
of

navy

the

subma¬

as

engines

were

ships.

And

dieselization

raRroa(js> improving
jCe, economically. But do

scrv-

yOll

c.lSO

know that many parts were inter-

Continued

OU

pCAe

r

28

Financial Chronicle

The Commercial and
16

,

Thursday, August 28. 1958

.

.

f816Y

THE MARKET

...

By WALLACE

companies that sell at high
price*earnings ratios and
small yields, Diamond Alkali
at recent prices offered a re¬
turn that came close to 5%

AND YOU

STREETE

and its

stock. The issue

of the

quality steels, selected duced
based
drugs.

aircrafts and

❖

*

U.

❖

turn,

higher to the best prices
history, which made an

in

ironic note in that it

cording a better price when
industry was operating at

the

around two-thirds of

capacity
previous peak when
operations were above theo¬
retical capacity a couple of
years ago, Moreover, the ex¬
than its

cursion into

historically high

territory was pretty much of
a
solo feat, the other steel
leaders being disinclined to
set any records at the mo¬
ment.

Laggard Utilities
The

quality
definitely

Mr. Holzka notes favorable

sectipn

that

laggard

was

tbe

of

insurance

1957;
vides

sees
a

weathering of recession by bis in¬

believes home mortgage loans in 1958 will exceed

dustry;

other

With stocks

re¬

was

"efforts

and

timid"

too

are

Fearful that the
cost of living will continue to inch upward painfully, the
S. & L. Assn. leader suggests the challenge presented be
accepted and adds "nothing else we could do would do more to
enhance our prestige and standing with the American people."

than twice the reliance on any

industry. Counting in
generally high, the stock dividends, an indi¬
there was
something of a cated return of above 7% is
trend toward culling out of definitely
abnormal in this
special groups the issues that, section of the nation's in¬
on traditional yardsticks, are
dustry.
selling lower than the others
Pennsalt Chemicals, in part
more in the limelight.
because it is a leading re¬
Cosmetics Arouse Interest
searcher in the use of fluorine
Revlon, for instance, was as a rocket propulsion source,
the prominent item in the was able to share in the en¬
cosmetic group, helped along thusiasm over Bell Aircraft's
by a financial service recom¬ success in the same field. In
mendation. But where Rev- addition, Pennsalt can match
Ion's price-earnings ratio had the
giants around it in its area
jumped above 10-times in the in growth capability as well
process, H e l e n a Rubinstein as in diversification since it

banks

cial

superior rocket fuel linked closely with the chem¬
fluorine. That, in ical companies since they take
spurred Equity Corp. to about 25% of its output, more

Equity con¬

and loan industry to fill the void
a mast since "commer¬

leadership is said to be

companies have lost much of their impact"

on

trols Bell.

work

in anti-inflation

a

to high activity since

continued

Steel

S.

States Savings and Loan League

Mobilization of the savings

Aircrafts

approaching Labor Day

Savings and Loan Assn.

Staten Island, N. 1T.

President, United

snapped out of has become a bit prominent
shutdown threw a bit of cau¬ their lethargy a bit when Bell lately, nudging to new highs
tion over the stock market Aircraft emerged as a fast- for the year but is still well
from its peaks of
this week, but none of it inter¬ stepping item following the deflated
revelation that it had pro¬ 1955-57. Diamond is still
fering with progress by some
The

HOLZKA *

JOSEPH

By

President, Northfield

payments are usually

larded with

If

"Revival of the Inflation

savings declining with business upturn; and pro¬
resume of the legislative situation affect¬

brief rundown

ing the savings and loan business.
the

He finds most astonishing

opposition to the Home Loan Guarantee Plan.

First, let's take a quick look at
current developments in the

the

July the home lending volume of
savings and loan associations was

savings and loan business. Dur¬ 19% ahead of July 1957—in terms
ing most of the first half of 1958, of percentages it was the biggest
increase for any 1958 month over
the nation's
"'K'?'"* ''"''a
the corresponding 1957 month.
economy was
If the recovery from the reces¬
in
the throes
sion proceeds as rapidly as some
of
a
reces¬
economists expect, it is altogether
sion, although
possible that the demand for
there
now
home loans will
expand rather
seem
to
be
rapidly in the final half of 1958.

indica¬

clear

recession
been

on

of the

bottom

with its possible impact
lending, an early re¬

Along

that the

tions

home

covery

ha3

some

passed.
imp o r-

flow

could very easily have
important effects on the'
savings into... pur institu¬
It has traditionally been

of

still at a conservative six- serves other chemical com¬ The
tions.
times-earnings level although panies as well as iron, paper, tant economic
true that because of the uncer¬
indexes which
utility group where, ex¬ it is
expected to show better textile, food processing, agri¬ are watched
tainties created in a peyiod of re¬
cept for an occasional favorite
Joseph Holzka
cession, savings tend to increase
per-share earnings than others culture, metals, and glass oper¬ by
leading
such as Florida Power Corp.
over their normal level; and, con¬
in the group. Other indices ations. Its yield was a satis¬ economists
•
"• •; •:■:;
which was hailing a stock
versely, that in a time of pros¬
are
similarly favorable, in¬ factory 3 % until its push to a seem to be showing steady im¬
split proposal, the continuing
provements over the last month perity, consumers tend to buy
cluding book value, which is new high for the year dropped or two. The figure on gross na¬ more confidently thus reducing
story was one of retreat. The
som.e three times that of Rev¬ the indicated return under the
tional product is up, steel mill their allocations of funds for sav¬
utility average has been run¬ lon. Yet Revlon commands a
line.
Operations are improving, civilian ings.
ning strings of small minus far
fc
#
H
employment is rising, and per¬
higher market price. k
Savings May Taper Off
signs in a row, relieved occa¬
*
*
*
&
The static item in the build¬ sonal incomes are continuing to
If this tradition holds, then for
increase.
sionally by a minor and tem¬
the next six months to a year, it
Among t h e groups that ing materials section is Arm¬
porary respite.
is quite natural to expect that the
Entering: Recovery Period
turned in results relatively strong Cork which, w h i 1 e
All in all, there seems to be volume of savings may taper off
holding
in
a
10
point
range
For the general list, no par¬ better than industry generally
rather rapidly—-certainly below
all this year, has still not rather general agreement that we
ticular records
were
being were the heavy truck makers,
have passed the bottom of the re¬ the rate of the first six months of
reached the peaks posted in
cession and entered upon a period 1958.
threatened, although the in¬ which continued to get busi¬
Prospects, then, seem to be for
dustrials were hovering just ness from the highway pro¬ 1955 and 1956. Earnings were of recovery.;
an
increased demand
for home
While the recession had some
under their year's high with¬ gram and from the larger off early this year but the de¬
loans as compared to the first six
serious
repercussions
in
other
out showing any inclination to transportation fleets while the cline was held to 4% under
months of 1958 and, on the sav¬
sectors of the economy, it was
test the peak. Sentiment light truck demand dried up last year's results which is
ings side, a somewhat lower vol¬
sugar-coated so far as the savings
stability than has and loan business was concerned. ume of savings than was the ease
wasn't overly conducive to markedly. Then, too, must be greater
for the first half of 1958.
As far
such a test since the possibili¬ added the prospects of a good been general in the current
Certainly there was little ad¬ as interest rates are concerned,
ties of a post-Labor Day set¬ fall recovery for heavy trucks crop of earnings reports. verse financial reaction either to the start of the recovery suggests
Some 60 % of its sales are con¬ our institutions, or to ourselves as that the bulk of the decline in in¬
back
were
being bandied in line with the economic
On terest rates has taken place.
savings and loan executives.
about rather widely.
revival generally. Since this is centrated in building mate¬
the contrary, savings have poured
Encouraging as the news of the
A bothersome note was the a cyclical field, the issues are rials and building activity is into our institutions at a rate well economic
recovery is
to every¬
one of the
brighter
spots
in
beyond
the
levels
of
last
year,
al¬
selling
at
low
indicated
values
big play in the low-priced is¬
one, there
is considerable con¬
the economy at the moment. though
in
recent
months
the cern
and
on
that
the
lustre
of
the
sues, some of it in the com¬
good yields running up
It has helped hold up Arm¬ amount of increase over 1957 has recovery from the recession may
plete absence of any concrete to 6% in White Motor, largest
been tapering off rather sharply.
be tarnished by a dangerous in¬
reasons for the fanfare, which of the
independents in the big- strong's sales, and the pros¬ In July, as a matter of fact, our flationary surge.
in Wall Street spells out as unit field.
pects are that results finally latest League survey shows that
was

was

the

...

.

.

.

■

.

,t

.

"poor leadership." On the fa¬

Although White's 1958 re¬
vorable side was the ability sults are
expected to drop a
of the industrial average to dollar a share or
so, it still
hold above the 500 line even leaves its
$3 dividend well
on recent setbacks. Then,
too, sheltered and, if business re¬
technical

studies

indicated

a

support level around 480-485
in the event of

a

market

cor¬

rection which, if it works out
in line

would

with the

be

far

chart

short

of

work,

being

anything drastic.

Rails
sonable

Rails

Brighten

were

able to show

rea¬

buoyancy most of the

time with little fanfare. Their

the

At recent levels the

slightly for the nation

well into the
New

yield was
4% bracket.

"High-Risk" Favorite

The lack of any yield, or of
single black ink report for
derpayment side so an in¬
any
year
since Studefyaker
crease could follow
any good
and
Packard
were
merged
improvement in White's re¬ failed to chill the
speculative
sults.
Divco-Wayne, with a
play i n Studebaker-Packard
yield of around 514%, is also which made it lead turnover
something of a candidate for more times than not. Some of
eventual dividend largesse
the play stemmed from the
since its present rate would
fact that its financial prob¬
seem to be
less than half of
lems are being straightened
anticipated 1958 earnings and out
by converting debt to
if
good business continues notes and convertible
pre¬
into 1959,
a
higher payout ferred stock which

covers as

expected,

on

the un¬

a

.

July earnings reports were
brighter reading than had would be almost assured.
been expected for the summer
lull month and hopes were
Interesting Chemical Issues
that the better operations
Like the chemical industry,
would also show up for Au¬ Diamond Alkali has gone
gust to bridge the gap before through a trying period and
the normal fall pickup gets now seems to be on a recovery
trail. But unlike the chemical
underway.




will exceed those of last year.

might in¬

dicate

a

new

lease

on

life. As

service rates it succinctly:
high-risk situation."

one

"a

[The

views

expi'essed in this
article do not necessarily at any
time coincide w':th those of the
"Chronicle." They are presented,
as

those of

the author only.]

business

—the

"in

ran

the

red''

whole
successive July this

second

as

has

happened, incidentally.
Breaking down the survey by
sections
of
the
country,
every
section
and

but

Pacific

one

—

the

Mountain

States—was

"in

the

red."

Clearly, the July transfer pe¬
riod is getting to be a pretty vol¬
atile month so far as the turn¬
in savings is

over

concerned.

On

the mortgage loan side of
business, our institutionscontrary to the expectations of
many — experienced little
diffi¬
culty in keeping their funds in¬

the

In the first

vested.
of

1958,

ume was

our

$6

billion for the first
1957. Projecting

seven

months of

these

figures

tire year,

lion—

ahead

it looks

will be

ume

months

lo^n vol¬

nearly $6V2 billion, com¬

to

pared

seven

mortgage

in

as

for

the

en¬

if 1958 vol¬

excess

of $11

bil¬

substantially ahead of
the $10.4 billion loaned in 1957.
It

is

*An

or

important

address

to note that in

by Mr. Holzka before the
Midwest Savings and
Loan Conference,
Fort Collins, Colorado, Aug. 11, 1958.

r

Prospects

a

for Inflation

Certainly all of

us

in the

sav¬

ings and loan business had hoped
the

that

enable

recent
to

us

distortions

price

into

built

the

some

would
pf the

had

that

economy

been

in recent

Unfortunately, however, it

years.

doesn't

look

will

realized.

be

On

recession

correct

the

as

now

contrary,

if

this

our

hope

news¬

full of headlines which
suggest that—rather than a period
papers are

of

stabilized

quickly

prices—we

reenter
will

inflation

a

period

again

may

where
the

become

predominant
problem
people.

of

the

American

Until very

recently, it had been

that the cost of living,
Which has iisen 4% in the past

expected

would stabilize—or perhaps
—
during the second
Now, however, such
developments as (1) the Middle

year,
even

decline

half of 1958.

East crisis

with its accompanying

possibility of still more spending
for defense, (2) the ominous pos¬
sibility of a $10 to $12 billion
Federal
budget deficit,
(3) the

Continued

on

page

28

Volume

Number 5772

188

.

.

.

The Commercial and Financial Chronicle

\

(817)

17

and domestic

to

up

mestic

From

Washington
Ahead of the News

shipbuilding costs—
maximum of 50% of do¬

a

costs; the bulletin

Most ships in the combined fleet
of; the contract operators will soon

approaching the end of their
20-year statutory life and
must normally be replaced in the
10

next

to

15

Government

The

Congress which

adjourned

raising the na¬

produced by Sputnik. It is signifi¬
nothing
but bark when we sent troops into
Lebanon. When the British, French
and Israelis moved against Suez,
Russia

$12 billion, it
might classify.

atomic retaliation.
does

It

China

is

said

have given
P'r

e s

i d

to

nothing
to

act

t

practi c a 11 y
everything he
asked for, thus

;

issues

one

party

and a
President of

Carlisle

Bargeron

another.';
But it also gave the President a
lot'of stuff he didn't ask for and
didn't want.
In the face of its

great concern

for

inflation, Congress increased
postal rates and also increased the
salaries of postal employes and

the-salaries of

2,000,000 clas¬
sified government employes as
well. By way of keeping skills in
some

the

military service, it generally
boosted the military pay.
It is
erecting: unneeded
buildings
to

provide further

space

offices

for

of the Congressmen and Senators.

The
in

Congress met last January
of panic caused by the

state

a

Russians

Sputnik,

having
a

centuated
ened;

launched

the

mood that became
the

as

recession

ac¬

deep¬

have all sorts of space explo¬

ration and, in the matter of pump

priming, it took the heroic efforts
o£the Administration to keep the
lid?on.

■■

Both

;

crises

and

have

cleared

up—

the recession and the state of mind

V'

"

>

.

fleet

in

national

of

tation

North

under

ibe'

a
declaring we
woefully behind Russia but

were

seemed

certain

shoved

out.

take

delight

a

down.

He

he

that

Congress
in

didn't

insured

would be

seemed

slapping
have

a

"In

to

the

him

1103

Title

There

were

legislation he wanted by
fusing to take anything else.

from

obligations assumed by the United
States under

;

of

securities

—

bulk of $1

of prime investment

will

account

for

the

billion in debt financ¬

ing to be sought by major Ameri¬
can-steamship lines over the next
10 to
15 years, a steamship as¬
sociation bulletin reports.

tration

Government

The

mittee

Government

is

that

-behind these bonds—and the in¬

v

be

Of the

<

member

Secretary of

Commerce, the
points out, must approve
the ability, experience and finan¬
cial
resources
of the steamship
lines issuing the bopds.
bulletin

Securities

V

<

.

15

tell of decreases.

'

are some

is nearing

program

Banks

'

"

Act

in

the

an

Middle

end, Purchasing Executives are still reluc¬

East

,

Even the

increases

have

not

secu¬

Employment

and

.

The continuation of the upward trend in

employment, which

April, is again evident this month. While the majority*
60%, still say their situation remains unchanged, there are 26%
reporting improvement in August, against 23% in July. Only 14% •
say their employment position has worsened, compared with 22%
in this category last month.
started last

all

Buying Policy

\

,

"

System."

time

in

shortening of
commitments for capital expenditures, as some

noticeable change this month is the

most

The

forward

contract

lines, 14 are
of the Com¬
American
Steamship

Lines.- They

price

recent

and

brought about any widespread inventory accumulation program*
The majority of our members, 57%, report no change from last
month. Thirty per cent still tell of reduction^ and only 13% say *
they have added to their stocks on hand.
; ;

companies
of

,

indications that the inventory liquidation

tant to abandon their tight inventory control policy.
crisis

Status
the

price situation. The Middle

Inventories

Cent Reporting

Per

6 Mob.

Hand

are:

August

Mouth

*

Production

Materials.

MRO

Supplies
Capital Expenditures

_

—.
■

Days

to

(50

90

Days

Days

30

to

American Ex¬
port Lines, American Mail Line,
American President Lines, Bloomfield' Steamship Company, Farrell
Gpvernment—makes this prospec¬
Lines, Grace Line Inc., Gulf and
Public's
First
Opportunity
tive volume of financing an im¬
South American
Steamship Co.,
portant development to the finan¬ ; "This is the first opportunity Lykes Bros* Steamship Co., Mis¬
cial, community and the investing the public has had to participate sissippi Shipping Co;, Moore-Mcpqblic, including, municipal, col-, in, financing its Merchant Marine Cormack. Lines, Pacific Far East
lege and industrial pension funds, under Title XT," according to Line, States Steamship Company,
and other institutional investors." "Shipping Outlook"., Shipowners The Oceanic Steamship Company;
The new. securities, will finance themselves pay the Government and: United States Lines ^Company.
in" part a $3.6 billion shipbuild¬ for the cost of its insurance at an
1
*.' "" •/"" r ; • *•
'1 1
ing; program to replace 294 ships annual premium which may vary
herent strength of that segment of
the
maritime
industry which
operates under contract with the

the

an

legal

National

Reserve

faith'

U.

to determine if

in any major

a year ago.

While there

State Member Banks of The Fed¬
eral

the

will

all

for

authorized

100% of the principal of

unpaid interest on mortgages
S. ships under Title XI of
the Merchant Marine Act of 1936.
on

resulted

..

mortgage bonds
exempt from regis¬

"It is understood that

and

of

2%

government

r,
Legal Investments

rities

is

special question this month sought

ending of the over-all downward trend that
This month, 44% of our reporting members say
prices have increased, as compared to only 4% so reporting last
month. Fifty-four per cent say there has been no change and only

investments,
subject to certain conditions, for
in- Government--insured bonds to
savings banks, commercial banks,
finance part of the cost of four
life, fire and casualty insurance
new passenger ships.
Other lines companies and fiduciaries in sub¬
are expected to follow suit as their
stantially every state on the coun¬
own vessel replacement programs
try. It is also understood that the
progress, the bulletin says. /
/:
bonds will be legal investments
The

industries, committee members report that, over-all
having to pay more for the materials they are buying.

are

began

the Trust Indentures

and

1939.

of
:

"Shipping Outlook', published
the Committee of American
Steamship Lines, says: "The 'full
by

this

.

the

under

1933

Act

\

to insure

an

has resulted in

guarantee,, ship
; are considered

■

order

East crisis has been instrumental in raising some commodity prices.
The impact of these changes added to the recent increase in steel

contract of insur¬

a

re¬

of

new

Commodity Prices

.

tional investors.

metal

A marked shift has occurred in the

farm

meantime,

and

on

ance
pursuant to Title XI on a
In
parity with the obligation which
prices have
it
assumes
with
respect to its
righted and the farmer is enjoying
interest-bearing obligations.
prosperity. Benson who was hated
Any insurance obligations validly
by practically every Congressman
incurred under Title XI will be a
is now being importuned by them
general obligation of the United
to make speeches in their behalf.

the

to

...

He got

production

change in forward
buying or inventory policies. As a result of the foreign situation,
only 7% of our members say they have extended their forward
coverage, while 93% have made no change. Similarly, Middle East
developments have had little effect on inventory levels. Caution
still prevails, and 92% are continuing their tight inventory policy,
with only 8% reporting increases.
:
^ "

the

to

came

basic

Our

guarantee,

excerpted

better

developments in this month's report is
change in commodity prices. The downward trend
abrupt halt and, largely as a result of increases in the

Middle East crisis had

title.'

this

report

dramatic

they

Secretary of Com¬
May 20, 1958:
'It is
appropriate to conclude that
Congress intended to place the

demands

the

is

merce

resignation.

But he stuck to his guns.

following

States

Representative Bill Hill

of Colorado.
for his

to

public

One of the startling
the

XI

an

among either Democrats or Re¬
publicans except one or two hardy

souls like

under this

respect

industry labor
strike,, added to
acceptance of new raodelis,
a

In fact, not since the Summer of 1955
have so many told of improvements in these
areas.
This month, 45% state their production
is up, 40% the same and only 15% worse.
Higher new order bookings are reported by
Chester F. Ogden
48%, while 41% say there is no change and
only 11% have had reductions. Employment
continues to make slight gains, to keep pace with the
improving
production and new order positions:

follows:

as

of

cloud which

auto

figures.

opinion submitted by the At¬
torney
General
Of
the
United

friend

U. S. Merchant Marine Bonds, a new investment medium,
hacked'by "full faith" of the Government, to account for bulk
of their $1 billion debt financing over next 1(M 5 years* Will
be important to financial public, including various institu¬

a new source

to

country's

"Section

offset by the

current

The threat of

But, with all this, conditions are improv¬
ing and committee members, whose Chairman
is Chester F. Ogden, Vice-President, The De¬
troit Edison Company, Detroit, Mich., continue

same

American

bulletin observes

J

arouse

Steamship Lines Plan Large-Scale Financing

U. S. Merchant Marine Bonds—

uncertain

pro¬
anybody.
vides:
'The faith of the United
The
man
who
came
through
States
is
solemnly
pledged
to
the
the session of Congress with the
greatest increased stature was Sec¬ payment of interest on and the
retary of Agriculture Benson. In unpaid balance of the principal
amount of each mortgage and loan
the early part of the session it

he wasn't able to

the

has tempered some business enthusiasm.

transpor¬

ocean

the

largely

negotiations.

has become apparent, when,

superiority in nuclear lacking adequate

the

been

surrounds

emer¬

The other is that this

gency.
need

times

"Because

V

has

the years, and

States.'

;

August reports of Business Survey Committee of the National
of Purchasing
Executives, issued recently indicate
that the business recovery is
proceeding slowly, with, no great
upward surge anticipated in the immediate period ahead.
The
impetus supplied by the Middle East crisis

pointing out two

over

j

Association

100%

flag,
foreign commerce
has
time
and
again been con¬
Sputniks which have no military strained to move, if at all, only at
advantage at all.
V'" the pleasure of foreign nations
Senator Symington, who has whose merchant
ships dominated
been the great crepe hanger in the
the world's trade routes."
matter of our air force defense,
With reference to the govern¬
has been extremely quiet recently.
ment-guarantee of the bonds and
Senator Kennedy moved into new
their legal investment status, the
fields with
speech

It

immediately went off the
deep end in expenditures until we
now

aid

\'

"One is that

Nautilus' passage
Pole completely
dwarfs- the accomplishment of the
under

to

Con¬

of

*

reasons.

—

Russia's

gress

the bulletin says,

get

hopefully have lost two of
unemployment and

year so

weapons." The

a

Governmental

insurance of ship mortgage bonds,

The Democrats who started the

their

perfectly

have

of

I
i

'

thoughts regarding employment stability in the auto industry.

pro¬

up

itr is

right

to

industry's replacement

of sufficient economic im¬
portance to justify the extension

she

our case

than

more

showing that
ail

In

S.

mari¬

gram

threatened

have

U.

the

against Quemoy, freguently through grim experi¬
which is annoying but otherwise
ence, the Nation has seen the need
doesn't amount to anything.
^ t for a
strong, up-to-date merchant

the

e n

is said to

The

years.

considers

-

time

cant that the Russians did

tional debt by ::mmm

Purchasing agent's survey group notes business recovery is
continuing slowly and that there has been a startling change
in commodity prices. The
purchasing executives find also that
\the impetus provided by Mideast crisis hue been* offset*
by mixed

be

usual

By CARLISLE BARGERON

Sunday is being described gener¬
ally as a highly constructive one.
If you want to call such a thing as

Continued Slow Recovery Willi No
Near Term Upsurge Seen

says.

lYf,

2

10

361

10

42

29

48

19

•

3

1

16

9

23

26

26

10-

41

36

10

3

32

46

17

3

2

:

July
Production

Materials—

MRO

Supplies
Capital Expenditures

:

..

v

"

-*

13-

.

5

•

20 :

.

37

25

'

Specific Commoclity Changes
'

-

A reversal, of the

•

"

?

noted this month

downward price trend is

'

'

owned-by 15 American-flag lines.
These lines, which operate solely

between one-half and
of- the

average

of: the mortgage

one

With-

per cent

principal: amount
outstanding. * * .. <

,

led

Marache, Dofflemyre

(Special to The Financial Chronicle).

in* foreign, tracje ,under operating,
LOS ANGELES, Calif .—Michael
differential subsidy contracts with
The total program will call for Caldarello,
Edward A. ' Forster,
the
Government, are "the hard an expenditure most recently esti¬ William J.-Gallagher and Arthur
strong core oi America's Merchant mated at $3.6 billion. In addition E.. Smith have become associated
Marine," the bulletin declares. • to'funds raised by debt financing, With Marache, Dofflemyre & Coj,
some $2.6 billion will come from
210 West Seventh Street, members

principally by steel, aluminum and copper.
i
Aluminum, copper, brass, steel, iron ana
...

steel scrap,

pipe* fuel oil, rubber, electrical

burlap.' ''

'

•':

,

-

•:

:

.

-On the up side are:

u

j

"
•
'
T
On the down side is: Lead.

In short supply

With

•:

-

"

'

Dempsey-Tegeler

:

r

/

'

is: Helium.

.

-;

.

•' •

..

; •.

.

-.

-

■

Lester* Ryons Adds

,

.
.

(Special to The Financial Chronicle) :

equipment, cotton and
*

(Special to The Financial

Chronicle^

'

Current

Public Offerings

Calif .—John C.
Grace Line- Inc. and, MoorePanos has been added to the staff
from Government construction—change. All were formerly with P.: Matthews is- now' with DempMcCormack Linesr Inc., two-mem¬
of Lester, Ryons & Co., 623 South
differential
payments to U. S. J. Logan & Co., of which Mr, Smith- sey-Tegeler~& Co;, 210 "West Sev¬
ber companies, of the Committee*
Hope. Street, members of ,the New
are already undertaking public of¬ shipyards designed to compensate was Manager of the Statistical De¬ enth Street. He was formerly with York and Pacific Coast Stock Ex¬
ferings of

a

total

-

of $42 million




reserves

or

equity financing,, and

for the difference between

foreign

of

the

Pacific "Coast- Stock" Ex¬

partment in Pasadena.

LOS: ANGELES, Calif:—Cooper

J. Logan &

Co.

LOS ANGELES,

changes.

18

The Commercial and Financial Chronicle

(818)

Peoples National Bank of Jones-

f

boro,

new officers,

International

The

new branches

Bankers

and

etc.

revised

title

Bank

O'Loughlin

M.

was

elected Trust Officer of the Fed¬
and Trust Co., New

Bank

eration

First Trenton National Bank.

:•!

Horace

the

of

A.

has

Sawyer

Dry

been

of Trustees

Board

the

to

elected

*

sji

Bank,

Savings

Dock

New York
#

President

#

%

Eli

Reynolds,

former

and

Chairman

of

Jackson

the

First National Bank of New York,

died Aug. 18, at the age of 85. Mr.
Reynolds had been a Director of
the
bank
since 1917,
and was
President from

retired

as

£

Howard
the

of

New

to

1922

He

1937.

Director in 1946.

a

Bayne,

79,

Bank,

24.

Aug.

Mr.

Bayne started his career with the
Columbia Trust Co., as Treasurer
He

1905.

in

President

elected

was

two

Vice-

and

later

years

was

made

absorbed

was

by

ber

of

Bank, Mr. Bayne
Director and a mem¬

a

Two

bank

Director when the

a

Chase

the

renamed

was

Manhattan Bank.
t

National

City

the

announced

New York

Bank
ap¬

pointment of Robert M. Goodwin
and Coleman B. McGovern, Jr. as
Assistant

Vice-Presidents.

result

with

in

Goodwin and McGovern

both

are

assigned to the bank's Bond Ad¬
ministration

Department.
❖

Raymond1 C.
elected

Trustee

a

of

has

been

Union

Dime

Savings Bank, New York, it
announced

by

President.
Mr.

was

Lewis,

•

Daly

is

member

a

committee

Manufacturers

Trust

of

the

of

the

Company,

New York.
•

•'

'•

the state and

'

At

separate special meetings of

the shareholders of Fidelity Trust

Company,

Director

tan

the

of

Chase

Manhat¬

Bank, New York, it

nounced

George

by

was

an¬

Champion,

President.

Mr.

First

Prior

in

voted

were

is

director

a

Bank

$

of

ernors

of

Sept. 12.
Upon the merger becoming ef¬
fective, Fidelity will have (on the
total

surplus
and
undivided
profits of more
than
$38,000,000, and total Re¬
sources in
excess of $342,000,000.

of

the

ffi

of

First

Bank

have

the

the

absorbed

The

known

new

Raymond

*

Pierce,

President

Cooperative
Bank, Boston, Mass., died Aug. 22.
ff

%

ford, Conn., and
Company, Essex,

Bankers

Conn.,

and title

Company.

Trust

*U

merged

ijS

v

of

of

Shelbyville,

effective

Aug.

11.

par

outstanding—
value S10.)

*

permit to organize the Sidney
Community Bank in Sidney, 111.,
issued

was

Aug.

21

by

State

Auditor Elbert S. Smith.

Proposed capitalization consists
$50,000 in capital stock, $15,000
surplus and $15,000 in operating
reserve.

Prior

merger

posal is subject to ratification by
stockholders of both banks, and
the Comptroller of the
Currency.
$

community has been with¬
banking facilities since 1944
the

The stockholders of two Tren¬

After

—

overwhelm¬




his

Head

Mr.

Wynne had officiated for the past
10 years in a like capacity with
Southern

a

His
1940

Pa.,

California bank.

banking

career
began in
Accounting Clerk with the

as

Trust

Co.,

he

V

Frank

King,

has

bank's

Directors,

of

of

President

and

First

of

Angeles,

Los

that

announced

The

his

1948.

'»*

Bank,

Calif.,
tors

in

V

L.

California

until

held

California

to

Pittsburgh,

the

the

Direc¬

National

Bank

ridge,

Calif.,

agreement

have

of the latter two

and

approved

an

whereby
California
purchase the business

will

purchase

approval

of

The sale

banks.

is

subject

bank

the

to

supervisory

authorities and of the sharehold¬
It

is

expected,

subject

the

to

shareholders' approval, that actual
transfer of the business will take

place

Oct.

of

as

thereafter

the

as

formalities

3,

or

as

soon

necessary legal
been concluded.

have

$50,000,000 Southern
Calif. Edison Bonds

a

meet¬

ing of the subscribers is held to
elect

a

Board of Directors.

Com¬

pletion of these steps leads to the
issuance of

a

charter

to

operate

the bank.
i'f

State

Iowa,

absorbed

A

established in the former lo¬

cation

of the

absorbed,

bank.

became

Exam¬

than

any of the writings
philosopher he attacked.

of

dissect

to
an

even

exam¬

Master,

by not
again,

them

vulner¬

more

able form, in the disciples.
In the preface to the General
some

gizes for the "highly abstract
argument" that is to follow, by
declaring that his book "is chiefly

hope I shall not be regarded
enough to be
comparing the present modest
work with

troubling

the

time

Theory. Keynes tries to anticipate
general criticisms. He apolo¬

the

presumptuous

as

in

economize

can

inconsisten¬

thoroughly

fallacies

usually in

famous

more

have

we

the

fallacies,

addressed

to

fellow-econo¬

my

mists"

of the great books
just mentioned. I cite them merely

(p, v), and that "at this
stage of the argument the general

to show that refutation of

any

public,

though

It is

debate,

are

important method, not only of
defending, expounding and clari¬
fying known truths, but of ad¬

(p. vi).

vancing to

General

far from

error

futile occupation.

a

is

insight.

truths and greater

new

the

prove,

more

we

not

bad

think

writing

the

at

eavesdroppers"
we

can

excuse

in

see,

most of the
Theory on this grounds.
Keynes succeeds, as we shall
in being involved and techni¬

cal

without

For

As logic and mathematics

sufficiently

do

I

the

welcome

only

understand the implications of
any
theorem the better we understand

of the most

the theorem itself.

of

Nor, in examining the views put
forward by a single man (or his
con¬
views.

leading terms, and
constantly shifting senses in
which they are used.
Attempting
to
anticipate an¬

analysis becomes a way of
gaining a clearer and wider grasp

other criticism, Keynes remarks:
"Those, who are strongly wedded

disciples), do
fine

to

those

Their

the

of

problems

writer

dealt.

with

In

which

to

that

of Sir William

tions

our

in

own

time,

own

on

those

reference,

express

treatment

of them."

or

we

lems

at

It

in

call

'the

classical

ques¬

attempts to discredit

advance

converted

to

Actually,

as

the

for

not

shall

we

being

revelation.

new

find,

it

is

not

necessary to "fluctuate" be¬
tween these two beliefs.
Keynes's

incessant

tacit, to his

main

"contributions"

demon¬

are

strably wrong, and in those
in

which

that

he

cases

is

saying something
true he is indeed saying

is

nothing

cannot discuss these prob¬
the present day without

A

shall

I

hominum.

new.

Finally. Keynes presents himself
to the reader, not
very modestly,
as
a
great intellectual pioneer

discussing his treatment of them.
III.

what

critics

country and in

without

of

and a belief that I am say¬
ing nothing new." (p. v). This
insinuates an argumentum ad

the questions which Sir W. Hamil¬
ton discussed. It is,
however, im¬

write

looseness

wrong

Philosophy, (1874),
"My subject, there¬
fore, is not Sir W. Hamilton, but

to

the

will fluctuate, I expect,
between a belief tftat T'am
quite

wrote:

possible

is

the

theory,'

^the first chapter

Hamilton's
Mill

book

of

the

necessarily

we

ourselves

the

many

beging precise. One
striking characteristics

Path-Breaking Pioneer?

"treading along unfamiliar paths"

though I have analyzed
Keynes's General Theory in the

(p. vii).
What is strange about
this, however, is that toward the

terest.

following pages theorem by theo¬

end of his book, in

Award

of

the

bonds

was

won

by the group at competitive

sale

on

its

the bonds

Net

these

bid

of

100.2299%

for

proceeds
bonds

from

will

be

the

sale
in

used

short-term

bank

of

part
loans

incurred to finance the company's

continuing

construction

which

estimated

are

program
to

not

ex¬

ceed $20,000,000. The balance will
become treasury funds. The com¬
pany

at

to

proposes

use

an

least equal to such

its

continuing
It

gram.

amount

balance in

construction

pro¬

is

rang i n g from

to par.

The company is a public

in

the

business

utility

of

gen¬

erating,

purchasing, transmitting,
distributing and selling electric
energy

in portions of central and

sentence

what

appear

must

reveal

chapter,

to

some

by sen¬

the

readers

tury!

been unable to find in it

"The

important doctrine that is both
original. What is original

in the book is not true; and what
is true is not original. In fact, as
shall find,

even

much that is

who

doctrines
wished

one

But

brief and readable form.

certain
Estimated population

ence

was

Stuart Mill describes

strangly

like

12

months

ended June

1953,

income

the

of

company

$36,704,000.

had net
Its total

academic

and

30,1958, was
long-term debt,

credible multitude of inconsisten¬
cies which showed themselves

comparing different
one

Herman Schwartz
Herman
New

Schwartz,
York

Stock

passed away Aug. 20.

member

I

General

Exchange,

3

p.

on

with

another."3

So

of

passages

have

(oxford,

234.

found

Theory
world's

in
an

Keynes's
incredible

classics

edition).

The

on

the

of

prefix

such

a

general.

title

is

to

which I

was

brought

up

classes

"I

shall

of
a

argue,"

this

genera¬

hundred years

Keynes

con¬

tinues,

in his
second
sentence,
"that the postulates of. the classical

1 advanced in my task, the damage
to
Sir W. Hamilton's reputation,

greater than I at first
expected, through the almost in¬

states:

Theory of Employment,
Money, placing the

tion, as it has for
past." (p 3).

in-his

became

he

book

and

upon

theory
case

■

stated capital at June

this

thought, both practical and theo¬
retical,
of
the
governing
and

experi¬
the one

John

'

sentence

called

object

ject,

when i actually embarked upon a
my

same

Mer¬

and which dominates the economic

critical

in

the

the

contrast the character of
my argu¬
ments and conclusions with those
of the classical
theory of the sub¬

that

so

a

analysis would be able to find
a

have

The

sweeping a conclusion. My first
thought was that I might do a
quite short work, analyzing
chief

"I

first

emphasis

thing I would arrive at

reader

its

Interest

so

the

In

General

Frankly, when I began this task

Keynes's

of

by

call for comment.

fallacious in the book is not orig¬
inal, but can be found in a score

did not

most

held

Fortunately Keynes's Chapter 1,
General Theory," is
only a
single paragraph long. But that
paragraph raises three points that

single

true and

we

path-breaking ideas,

that

were

cantilists of the Seventeenth Cen¬

that, in spite of the enormous
reputation of the book, I have
a

Chapter 23, he

confirmation of the truth

fact

ideas

length, I
conclusion here

my

as

of these new

territory served as of April Autobiograph regarding his analy¬
sis of Sir William Hamilton: "As
was
approximately 4,332,000.

For the

the

cites,

and

tedious

a

California, excluding the line-by-line analysis,

other cities.

30,

to

by

even

may

I

bonds will be redeem¬

new

able at prices

1957

sometimes

1958-59 will total approxi¬

mately $271,462,000.

105.74%

chapter

rem,

presently expected
of previous writers.
plant additions for the

that gross
years

Now

tence,

4%s.

as

retire

State

branch

two-volume

re¬

John

of

Co.
first
and
refunding
mortgage bonds, series K, due
1983 at 101.113% and accrued in¬

$492,572,000.

Farmers

Mill's

Philosophy

Edison

Bank, Elkader,

Olaf, Iowa.

effort to

an

ination of Sir William Hamilton's

And

Stuart & Co. Inc. and
associates on Aug. 26 offered $50,000,000
of
Southern
California

$374,141,000

•■'fi

Central

as

theories of Hume.

Once
ined
we

subject of this book, like¬
wise, is not John Maynard Keynes
but
the
problems he discussed.

Halsey,

of the

has been fully subscribed

Stuart

Critique of Pure

The

Offered at 101.113%

the

this

began

the

our

southern

and when

Kant's

of his Examination

of each bank.

ers

tions

stock

Godwin.

out of an attempt to
optimistic doctrines of

Palmdale, Palmdale, Calif., and

of the Bank of Northridge, North-

City of Los Angeles and

to

the

an

position

a

move

Mercantilists.

I

appointment,

permit has been is¬
organizers take subscrip¬

was

Trenton

Bank

the

National

the

as

serve

the

sued the

Bank,. St.

and

State

voluntarily liquidated.

ton, N. J. banks—First Mechanics
Banking Company

Winston

*

.

will

He

Officer for

to

engaged

The

when

Peoples Bank & Trust Co., Westfield, N. J., has been approved by
directors of both banks. The pro¬

Bank

com¬

shares

40,000 shares,

A branch

whereby
National
State
Bank, Elizabeth,
N. J., would acquire the stock of

if.

the

grew

Office Trust section.

to

;!•

dividend

Bank

$400,000,

tjt

a

'

increased from $250,000

was

out

established in the former lo¬
cation of Bankers Trust Company.
for

.*!»

capital stock of The Farmers

National

to

•

stock

a

of River¬

was

Plans

City

Bank.

of

Riverside Trust Company, Hart¬

under charter

Calif.

Operations

The

His age was 79.

side Trust

National

A

VVellesley

t'.i

plans
for
a
institution would

First

as

❖

*

Bank,

announced

merger.

mon

in

National

Ohio, and City Savings
& Trust Co., Alliance, Ohio,

bank.

the

t*s

Alliance,

(Number

T.

capital,

lation

refute

Reason

The Bank of California, San Fran¬

refutation of

a

the

Malthus's famous Essay on Popu¬

-f

basis ol: the June 30, statements of

Chicago,

established

*.

Reserve

merger will become
the close of business

at

branch

of

Federal

the

the

Ind.,

location

pro¬

Pennsylvania Department of
Banking and the Board of Gov¬

Depositors Trust Company, Au¬
gusta, Me., absorbed Knox County
Trust Company, Ilockland, Me. A
was

the

of

favor

Subject to the approval of the

By
fjl

Company,

posed merger of the two banks.

111.

former

and Trust

Pittsburgh, Pa., held Aug. 26, ap¬
proximately 90% of the outstand¬
ing
shares
of
each
institution

be

National

and

Pittsburgh,; Pa.,

Bank

!ft

Frank O. Prior has been elected

Pico

Rivera,

of

errors

fute

Bank

Alliance
a

161st among the na¬

14,000 banks. Previous ar¬
ticle appeared in this column on
.July 10, page 118.

•

•-<

in

ranking sixth largest

condition)

business

new

Wilbur

J.

the

it

make

largest
bank in Trenton and central New

effective

Daly

$170

will

System,

Kt

Pico

#

It will

banking institution
million in assets

a

over

which

For¬

merly Assistant Cashiers, Messrs.

largest and
brought together

are

through the consolidation.

Potter

Hi

First

The

its title and address

Rivera, Calif.

Colonial

Trenton's

of

oldest banks

committee.

executive

the

He remained

11

proposed to make the consoli¬
dation legally effective on Aug.
29 with the opening of business
for the consolidated bank being

tion's

Bank

Cashier.

and

is

cies, vaguenesses, shifting defini¬
tions and usages of words,
and
plain errors of fact.

#

i',i

of

number

large part out of
the

Citizens Bank, Pico, Calif.

Bank

to

Smith's Wealth of Nations grew in

Colo.

cisco,

merger with Irving Trust Co., N.
Y.
When
Mr.
Bayne's father's
National

Denver, Denver,

Officer; Sydney G. Stevens, Pres¬
ident; Harold Ray and Richard
G. Magill, Executive Vice-Presi¬
dents; and Stephen W. Wright,

Jersey,

Seaboard

which n o w only
approval
by
the

Vice-President

Keynesian Economy

charter

National

James E. Wynne has been ap¬
pointed Assistant Trust Officer of

stayed with the company until its

Chase

Pico

First

Comptroller of the Currency, will
be Harvey C. Emery, Chairman
of the Board and Chief Executive

Director

a.

Manhattan

died

York,

bank,
final

scheduled for Sept. 2.

*

Chase

formed

awaits

The

has changed

newly-

the

in

officers

New

of

of

t;,

ingly approved of the consolida¬
tion of the two banks into the

York.

Com¬

National Bank of Denver. Denver,

Colo., consolidated under
and

Joseph

The Breakdown of

Trust

Denver, Colo., and The First

pany,

capitalizations

'C'

Thursday, August 28, 1958

.

Continued from page 3

to

Ark., effective Aug. 16.

consolidations

*

title

its

.

First National Bank of Jonesboro,

News About Banks

of

changed

Ark.,

.

case,

are applicable to a special
only and not to the general
the situation which it as¬

sumes

being

a limiting point of
positions of equili¬
(p. 3).
Good economics
prior to 1936, however, like good
economics since then, did not de¬
pend on postulates that fitted spe¬

the

possible

brium"

cial

cases

only.

It dealt with the

business

cycle, with periods of
prosperity and depression, as well
as

with simplified "static"

theory.

Volume

188

Number 5772

.

.

The Commercial and Financial Chronicle

.

(819)
It

is

Keynes's

economics,

we

as

shall find, that applies to a special

only; and it does not give a
analysis of that special

case

Our

correct

Reporter

case.

"The characteristics of
cial

assumed by

case

theory," Keynes
not

society in which

the

of

spe¬

the classical

The market for fixed income

economic

actually live,
teaching is
disastrous if we
we

misleading and
to apply

of experience"
This

is

not

assertion.
content

it to

facts

the

(p 3).

-

argument
the

For

but

mere

I

present

will

myself with the contrary

assertion

that

sound

"orthodox"

will depend upon the amount of inflation or inflation
that is developed, as well as the course of business.

was
always flexible
analyze actual condi¬
tions, and that it is Keynes's as¬

to

sumptions that "happen not to be
those

of

which

the

economic

society in

actually live."
Our criticisms of Chapter I must
apply to every sentence in it. They
must apply, also, to his curious
use of the term
"classical," which
defends

he

points

in

economists"

by

was

to

Marx

footnote.

a

that

out

a

There

"the

classical

name

invented

Rieardo

cover

writes, "perhaps perpetrating a
solecism, to include in 'the classi¬
cal school' the followers of Ri¬
eardo, those, that is to say, who
adopted and perfected the theory
of

the

This

extended

"classical" is

the

of

use

term

merely confusing. It

gives the reader

quite false pic¬

a

He is

ture.

being asked, in effect,
to
consider
practically all eco¬
nomics prior to the appearance of
the General Theory in
1936, no
matter by whom written, as both a
unified theory and
theory. But there

agreed upon

an

was

enormous

diversity in the views of particu¬
lar

issues

writers, and

between

the

economists. There

which

some

tend

controveries

many

so-called

"classical"
also points

were

of them did not pre¬
settled.
Keynes

have

to

writes

as

before

him

if

all

the

had

economists

slid

into

sort

a

of dogmatic

slumber, thoughtlessly
incanting after each other some

unexamined

cliches of

school

respect.

in

He

more

includes

the classical economists the
pioneers and, continuers of the
or

marginal util¬

ity theories that represent
with

"classical"

the

a

break

economics.

And when he writes about ortho¬

dox economics he

seems

to confine

himself most of the time to Mar¬

shall and Pigou.

He talks

as

vances

if he

of the great ad¬
beyond these writers that

made, particularly in capital

were

interest

and

theory,

by BohmBawerk, John Bates Clark, Knut

Wicksell,
von

Irving

Fisher,

covered

either

by

was

not dis¬

Marshall

discussed in his
circle at Cambridge, was
thought of at all.
Pigou,

are

or

I

Reserve Banks

from 1«4%

Francisco

of Dallas

and

a

Atlanta increased the

the

very

very

that

drop

say

leaders—

has

world

to 2%, thus joining the Federal Reserve Bank of San
the effort to make money and credit cost more.

as

goal; but

this

is

true

of the

not

Russian peo¬

rate

in

of

the

satellite

na¬

ple
W. Babson

Roger

or

tions. Further¬

Credit
The

of credit by the Federal Reserve Banks is
Even though this move toward re¬
and credit is gradual, it has been persistent and

that be

powers

taking action

it

will

not going

are

enough

soon

continue that way.
to

It is evident that

to be accused this time of not

halt the forces of inflation

when the last inflation spiral was

getting under

they

as

way.

There

China

are

hospitals

leaders

of

reserves

the

banks

member

of

the

Federal

Reserve

System, may have a retarding influence on the forces that are
again asserting themselves in the stock market and in the lack
of attraction in the market for fixed income bearing obligations.
In the past, changes in monetary policy have been signalled by
the

trend of the discount rate and the

in the future.
be

Even though this money

and

slow

gradual

tightening

there is not likely to be

the business recovery

unless

continue

may
any

turnabout

falters.

New Treasury

Most of the Chinese
educated

were

time of the

year

because of the

this probably means that the
tightening operation of the monetary authorities will not be quite
as vigorous as would be the case at other times of the year.
Also,
there is another new money raising operation about to be under¬
taken

by the Treasury in the very near future and there will
have to be funds available to the deposit banks in order for them

to subscribe to the

new

securities which

in the bonk maturity range. In
be largely in the near term or

is

It
been
rule

evident

that

the

are

expected to be mainly

other words, obligations that will
intermediate term range.

rather chaotic

conditions which

have

the long-term Government market seems to
security being offered for new money raising
by the Treasury.

prevailing
such

out

purposes

in

a

Other Central Banks to

Up Discount Rate

y

or

little
never

fact

that discounts at the

have shown

Federal Reserve Banks

are

small

and

Chris¬

in

Eppler, Guerin & Turner
DALLAS,
Texas — Eppler,
& Turner, Inc., Fidelity
Union Life Building, members of
the New York Stock Exchange,
have announced the re-association
Guerin

of Haden T.

Brashier, Jr. with the

firm.

associated with Ep¬
pler, Guerin & Turner, first as a<
registered representative in the
Formerly

Fort

Worth

office

and

later

as

Corp. Transfer Agents
To Hold Outing
,

The

Corporate Transfer Agents

Association

12th

Tournament

Annual

Golf

and

Outing will be
held at Colonia Country Club, Co-

Thursday, Sept. 18,
1958, for members and guests.

lonia, N. J.,

and

The event will consist of golf, a
dinner in the

evening and enter¬

tainment.

t,p,the United States. My Grand¬
parents formerly sailed ships,bPr
Chinese

and

Boston

ports.

including

—

beautiful

which

pieces

my

own—-are

of

chinaware
in China

purchased

were

by the captains of these ships. It
is within the last 15 years that
these ties with America have been
It is

broken.

only common sense
that they will again be renewed.

think

I

intimate

friends

that

he

accepting

tell

made

the

a

report

China. Of

on

the General was in China
only a short time and was de¬
pendent upon the reports which
received from

he

met.

To

make

report

on

months

or

whom

he

comprehensive

a

China
years.

Marshall

eral

those

would
Besides,

take
Gen¬

West

Point

was

a

graduate, with Army experience.
He should not have accepted the
which

task,
gave

President

Truman

Marshall

was

very

much influenced by Chiang Kaishek and his charming wife. She

graduated from our college here
Wellesley and made friends
with all of us people whom she
in

She also
Truman

Mr.

won

the hearts of

and

other

prom¬

It is expected that about 50
of the firm's Houston of-?
widely known members and a like number of
respected among West Texas guests will attend the affair.

Guerin

will

represent

Eppler,

& Turner throughout

the

Members
Committee

Angelo, area.
Mr.
Brashier returns to West Texas on

Chairman,

his

Transfer

Abilene,

San

request.




of

the

are

Entertainment

R.

Transfer

bash Railroad

L.

Mulkeen,

Agent,

Wa-

Co.; George Wasko,
Agent, Santa Fe Ry.;

rill

become associated

Lynch,

Board

will

now

and

Hence, I repeat,
be
no
shooting

the

United

Russia.

States

:IX

N. Y. Cotton

Exchange

Honors W. L. Johnson

William
of

cited in

Walter

K.

the

L.

Love,

New York

a

Jr.,

Exchange.

pre¬

Johnson

by

President

Mr.

Johnson

honored for his contributions

was

to

of membership and

years

the

development of many of
the practices which guide the Ex¬
change today. Mr. Johnson, a
special partner of Shearson, Hammill & Co., joined the firm when
it was founded in 1902 and was

managing partner for
He

many years.

elected to the Cotton Ex¬

was

change in 1908.
the

start

of

of

World

War

I,

several

major cotton
firms spurred Walter Johnson to
develop a plan under which the
New

York

Cotton

Clearing Association
in 1915.

cotton

Exchange
formed

was

The Association requires

firms to

deposit sufficient

funds with the Clearing House to

fulfillment of all

guarantee

This

tracts.

ended

the

failures of cotton firms.
Mr. Johnson

In

1915,

elected the first

was

President of the Cotton

Clearing

con¬

recurrent

Association

Exchange
and

con¬

tinued in that office for 30 years.
From 1918 to 1920 he also served
President

Cotton

the

of

New

In 1928 Mr. Johnson

delivery."

instru¬

was

mental in the adoption of
ern

"South¬

Contracts

that time had been settled

basis

York

Exchange.

of

delivery

in

until
on

New

the

York.

Speculative practices often caused
the New York price to be out of
line with

that in cotton's natural

markets.

After

men.
It was largely due to
character, courage, and wealth
of the Sun family that the rail¬
roads, public utilities, and fac¬

tories of China were

From

observations

the

when

ered

visited

I

would

hesitate

munist

China

tions.

to

to

gath¬
China, I
Com¬

United

however,

It,

may

have been

Na¬

has

face";
to

sense

but

a

it

means

does

resultant

re¬

markets.

•

•

Customers Brokers to

I

admit

the

the

forms, contracts were settled on
the basis of delivery at key south¬
ern

built.

of

not

me.

If

„

be admitted to the United Nations,

Fenner
& On the surface, we continue to be
Building,
unfriendly to Communist China;
Mr. Riley has recently been with
ivr™
Channer Securities Company and
Premier Mao
in the past was an officer of Stern is receiving some sympathy and
Brothers & Co.
moral support from certain facSmith

Countries.
between

the

make

with Mer-

she would receive the help of
England, America, and the other

inent

Chiang Kai-shek should die
today, I am sure that Communist
CHICAGO, 111.—Robert A. Riley China, under Premier Mao, would

has

the

so,

as

him.

General

"saving

Riley Now
With Merrill Lynch

China

and

If
Khrushchev
should attack Western Europe and
America, China would at once at¬
tack Russia on the East. In
doing

failure

will

Truman

Mr.

in

mistake

This

Robert A.

and

Russia

States.

At
Marshall's Big Mistake

mainlanders in the United Nations.

(Special to The Financial Chronicle)

Mr. Brashier,

investors,

solidated Edison Co.

Russia

between

United

to

China, by( tradition, is friendly

always
Co . Theodore Stone, Assistant seemed
inconsistent
to
permit
Secretary, Cities Service Co.; Cort Formosa and Chiang Kai-shek to
p0hle, Assistant Treasurer, Co'n- represent the 600 million Chinese

on

manager

lice.

Steiner, Assistant Secretary, RCA;
L. T. Hindelang,
Secretary and
Treasurer, American Bank Note

than

last

probability of

sented

of

Nationalist China and the

McDermott, Manager, Stock
Transfers, U. S. Steel Corp.; L. C.

between

war

column

my

more

Exchange resolution

only minor increases.

W. J.

in

Cotton

colleges

United Nations

H. T. Brashier Jr. Rejoins

said

were

met.

uptrend in short-term rates, led by the Treasury bill
rate, will in time bring about higher Central Bank rates by many
of the other Federal Reserve Banks, because the discount rate
does not generally remain for long below the rate for the shortest
and most liquid Government obligation.
This is in spite of the

I

June, there is

Fifty

The

of General Marshall

Financing Impends

Loans usually pick up at this
seasonal demand for funds and

As

service

present move from 1%%
by the Federal Reserve Banks is to be taken as indicative
that there will be higher interest rates and less credit available

now

knock it

and

to 2%

to

and

China were largely
financed by American dollars.

today

warning flags that are being posted along the way in the
form of higher discount rates, and the gradual cutting down of
free

why
Russia in

reasons

join

In the homes of their descendants

Measures Designed to Curb Stock Market

the

not

schools.

tian

tween

The

it

on

existence.

Khrushchev Fears Mao
-

war

war
against the West. China is
largely Buddhist in religion; but
China is not atheistic, as Russia

do not want'to stop the recovery, which is just
getting underway, by the use of the money toois, which, me.ans,,

credit. Yet at the- same time they are not.
see the forces of inflation gain in strength to
the extent that they will have a disastrous, gffqgjt on the
economy.

Carefully

many

would

However, it must be remembered that the present upturn in
business has not been going on too long and in not a few sectors
of the economy it is still not too vigorous. It is evident that the

tighter money and
going to sit by and

bomb

a

of

there

claims to be.

money managers

out

visited; it is very busy and
rich. Yet, Premier Mao could

Free

Watch China

slow pace.

a

straint of money
indications are that

were

fears Premier

tightening

being done at

the

more, Khrushchev
Mao of China.

Tightening Continues

of the most beautiful cities I have

further

sian

a

Federal f"

discount

interesting to see how
England has kept friendly with
Communist China, which has not
disturbed Hong Kong. This is one
ever

K hrushchev

our State Department. It

very

war.

domination

Also,

row.

an

tions in
is

—like all Rus¬

,

,

go

and

we

in

now

economic
*

-:

.

and

war;

The

Keynes's frame of reference is
strangely provincial. He seems to
that whatever

operation.

system declined for the fifth week in

Ludwig

Mises and F. A. Hayek.

assume

chemical-weather

a

The monetary authorities continue to tighten the money market since the volume of free reserves of the member banks of the

unaware

were

have

course,

among

subjective value

We may

thought.

misleading

are

one

.

columns, we will not
shooting war with Russia.

a

On the other hand, the long-term
out some kind of a bottom, but the!

work

far in this

so

His references to the "classical"
than

A?u
1 have continually stated
these

obligations.

trying to

are

helpful

Ricardian

economics, in¬
cluding (for example) J. S. Mill,
Marshall, Edgeworth a n d Prof.
Pigou." (p. 3).

,

tightening efforts of the monetary authorities has not been

and

James Mill and their predecessors.
"I have become accustomed," he

*

in

have

The increase in yield in Treasury bills is
moving up the rates \

of all short-term

we

he

psychology

denies

possibility of shooting war with Russia,
citing basic differences and dissension between the Kremlin
and Communist China.

bearing obligations, and this is

especially applicable to Government securities, continues to be on
the defensive, with new lows
being registered in many of these
issues from time to time. The action of the
monetary authorities
in gradually tightening money and credit is
keeping the pressure
on the Government market.
The upping of the discount rate from
1%% to 2% by the Federal Reserve Banks of Dallas and Atlanta
is being taken as another step in the process of
changing the
money picture from ease to one of restraint, the extent of which

economics

enough

By ROGER W. BABSON

Mr. Babson

,

with the result that its

attempt

The U.S., Khrushchev and Mao

Governments

on

By JOHN T. CHIPPENDALE, JR.

"happen

goes on.

those

be

to

the

19

Hold Annual Dinner
Association

The

Brokers

will

of

hold

Customers

their

annual

dinner and installation of officers

Sept. 11th at Whyte's Restau¬
Business meeting
will be

on

rant.
held

at

4:15

p.m.

to be followed

by cocktails at 5:15 p.m. and din¬
ner

at 6

p.m.

Tickets

are

and include dinner and all

ties

plus

two

$8 each
gratui¬

cocktails

before

6 p.m.

Reservations
with

Sam

should

be

made

Minsky, Hardy & Co.,

before Sept.

8th.

Pierce,
of

Trade

....

,

Leon C. Sunstein

...

Leon

C.

Sunstein,

partner

hi

Gerstley, Sunstein & Co., Phila¬
delphia, passed aWay Aug. IT.

The Commercial and Financial Chronicle

(820)

20

ties could not

i

ments. In truth, it increases
of

very

for

the need of a greater measure

Private debt of all sorts has had

look at the record. For many years it was

a

the

similar

a

course

policy of the nation to avoid any national debt.
Even when we entered World War I the debt of the Fed¬
eral Government was less than $2 billion. In fact it was
not much more than one billion. By the end of 1920—we

debtedness of

fought a war "on inflation" as Secretary McAdoo
used to say—net Federal debt stood at the then staggering
sum of nearly $24 billion. After the Coolidge-Mellon re¬
trenchment of the 'Twenties had run its course the net
debt of the Federal Government at the end of 1929 stood

public debt all the

considered

stood at

at $16.5 billion. This at the time was regarded as a figure
much too high and due to be reduced substantially during
the next decade. Some had even hoped that the time would

when

come

brought a rise of more than a third

figure of some $56 billion, an amount
more than double anything that we had known even during
World War I. But no one in places of power or influence
seemdd to worry about it at all. Computations were made
again and again to show that the country could
much greater debt.
It

at about this time that Mr.

was

"stand"

a

coining his much quoted phrase about
"spending and spending, taxing and taxing, and electing
and electing." Whether he ever said, anything of the sort
we have no way of knov/ing, but the phrase quite accu¬
rately reflected what was going on, and had been for years
previous.
^
to

report)

was

World War II, when again we
thought to any really sound financing of our

course, came

gave hardly a
effort. The net

national

debt

to

rose

the

astronomical

produce
such

quences

unwanted

conse-

misallocation of

as

and

velocity.

decreased

rates
which

cohtrAs

administered

with
cause

unemployment rather

than prevent it.
■

the

'

We

look

can

the

for

in

held

a

dozen years

However, we

is.

it

The President

at

one

horror-stricken

of his
to

recent

think of

a

news

longer continued rise in such figures as these, but neither
be nor any one else seems to be in a mood to do anything
really effective to prevent it.
-

But

as

large

to tell the whole

this figure is, it fails by a wide margin
story. The figures we have been quoting

"duplicate debt," but do include "agency debt."
they include formal debt obligations of agencies
in the hands of the public. They fail, however, by a dis¬
tressing margin to include all the debt of the Federal Gov¬
ernment. Leaving out of account altogether the various
contingent liabilities of the Federal Government stemming
from guarantees, insurance and the like, the real debt of
the Federal Government is now probably twice as great
as the formal
figures indicate. This enormous discrepancy
grows out of the fact that no account is taken of the future
liabilities of the Old Age and Survivors Insurance scheme

At least

j

—that is

no

account is taken of them in statements of the

debt of the national

government. The "present worth" of
those commitments have been
competently Calculated at
a
figure of the order of magnitude of the published na¬
tional debt figure. The so-called reserves of the fund are
hardly a drop in the bucket.
;
Such
were

a

state of affairs could be much better tolerated

it not for the fact that state and local

governments

and the

private economic system have been following the
Washington. This, of course, is in part a result of
tax laws which place a
premium on debt as over against
equity capital, but it is likewise part and parcel of the
thinking of the age which clearly reveals the imprint of
lead of

'the number of jobless but for these

The

lessness of states and

municipalities was one of President
Cdolidge's nightmares. The New Deal did not object to
such a program, but, of course, the states and
municipali¬




factors

acting

on

include such -forces
monetary policy, technological
'change, and weather. AmOng these,
it

is

quately
In the

economy

the

a

i ciatk

at

the

to

the

1920

matter

.

by

rate of

of ' the

ply

turning points in the

change in the

precede

business

turning

reduced in June.

were

operations, would have meant a
less rapid growth in the money

to

SUPPL' in 1954 and 1955. With a
moderate growth rate in

un-

more

this period, the inflation which
alarmed
the
Federal
Reserve

-

work

has

also

Board

re-

in

and *1957

1956

would

points

in

activity and in velocity

Without

of

Money

and

this

slowing,
*

.

-

'

'

Unemployment 3

(.Tunc 30)

(Billions) 1
________

____

(June >
Per Capita 2

$23.7
.

26.2

1930

(Millions)

192

.

.

4.8

204

0.3

189

4.9

162

10.3

153

11.1

30.7

238

4.5

29.7

229

9.0

108.3

739

1.8

1949

107.1

.718

3.3

1953

124.3

____

__

_

________

1948

________

1954

1958
*

________

.

1 Federal

2

23.5,

Reserve

;

20.2

19.2
____

.

.

:
.

,

779

.

1.6

125.2

771

3.3

132.6 (March)

779

2.9

(March)

132.0

763

5.2

(March)

(March)

Bulletin,

various

issues.

using population data from Historical Statistics of the
(Washington: U. S. GPO, 1949) and Current Population
Reports, Series P-25 ('Washington: Bureau of the Census, June 1958).
Computed

United States

data-prior to World War 31, Economic Almanac, 1953-54 (NewThomas Y. Crowell Co., 1953) p. 423.
Data for 1920 and 1921
average'unemployment'during those years.
For data after World
War II, Survey of Current Business, various issues (Washington, De¬
partment of Commerce).

York:
are

J

.

215

25.1

-

\

0.6'

$223

20.8

ihe

and

Unemployment

Money in Circulation

1938

.

in money supply would

for the high rateuf growtn earlier,

TABLE I

'/
Volume

3 For

money sup¬

growth

"The-Misplaced Em-

&S
S/"?^"u6bec°me.
jrrei? necefary Jbut
?ot:ihaY<r

1937

"

the University of Chicago has

found that

of minimizing

1957

Workshop in Money and Banking
at

This

year.

contribution

193.3

and

members

The

year.

one-

'

1932

,

Research

no

Wa> burton's

1'931

.

Monetary Changes
-Unemployment

was

1929

•

r

approximately

Tear

unemployment

problem.

in the first

of the University of Chicago, Vol.

"«««

ade-;

Both tend to act together

compound

in the preceding

in «»»"«* of money per capita,

The steps

XIX> No-4, October i946

monetary forces also behave ad¬
versely.

,

rates **f Change.

time that

very

2%

mniU

denionstratedthis point, aithoughhe

of fact, wage rates seem to mdve

adversely

aua^ter^of

hardly necessary. A much smaller
oeiovv the levor moderate ,.opm market

f...

I

and, particu¬

As

credit furnished

problem

larly, wage rates, lag changes "in.
monetary sphere.

have

thp

tn

employment*

changes in monetary
policy, however, we find that ad¬

the

192

third

was less than 3/4 of 1% as-cdjnpared to a &Q*th rate of over

Fed

Reseiy^Bol-d tould

certainly

of

aptations in prices,

the

1954. However, the .ate of growth

els *°f -the < previous

with the other forces.

cope

case

and

As may be noted in Table I, the
Quantity of money did not de-

seasonally

a

that-the

s.Iffopst

running

only monetary policy which
the major problem.
Adaptive
the

1952

?l_Iyoz ana tne third quarter of

Quirements

is

in

of

less

Bank

economy

reactions

j

aj'
0 ' Thls Jecesslon> howeYe£ was as much a consequence
°f the rapid increase in real wage
rnf„c

^'frSmSSerZ e'LmEg not have occurred. Slowing of the

?

as

Franklin Roosevelt and the other New Dealers. Take state
and local debt, for
example. In

pre-World War I days it
ran around $4.5 billion or less. It
emerged from that war
not very materially
higher. By the end of the 'Twenties
it had reached a figure more than three times its
early
postwar amount. It will be recalled that this fiscal reck¬

external

..

f °'lgehst ln

al-

of

'

hair billion dollar* below the lev-

'other factors would have decreased

the

Tt,np

The current recession stems;in
Part fr0)11 the policies used to cure
1953-54 decline. Reserve re¬

.

.of 1933 increased wage rates and
'prices and consequently increased
unemployment at a time when

^

ton

better than it has done.

Recovery Act and
Adjustment Act

—>

in

taken prior to March of this year
Were
nominal.
Federal
Reserve

.

otherwise favor increased employment.
Measures such as the Na-

^offsetting actions.

aPain

f,f cAnti" w
September.

1953-54 recession was prec?ded by a PeFlod of monetary

js

nnntrihnW

flexibility 4n prices
and wage rates can prevent unempayment in the face of adverse

Agricultural

The drop in

uppan

,

per year.

level

of morie-

^
Februarv

basis>

]ri

eral

Sufficient

the

annual

preceded

part

^

supply has been

money

an

been

the

emn]ovmpn/whfJPh

(hat

be

period, each of

has

crease between mid-.1953 and mid-

f.nLn?ovmen?ed
38 " eause o£
unemployment.

tional Industrial

on

ffig,

as

exclude

postwar

econ-

affer

much

the

recessions

actually declined

of

for

nitely to exceed it shortly. The fact is almost incredible,
fact

turning point did not
reserve
requirements
in April, 1938.
'
;

areas,

causes

great war ended, the, national debt still is but some
$5 billion short of that 1946 figure—and promises defi¬

conferences seemed

until

195a3 as of monetary

the

but

come

1%, and it grew more rapjc|iy than 3% prior to this. After
July, 1957, the quantity of money

which may tend to
in employment.
must also recognize

ways

to

than

declines

cause

iWWevS-

growth in

means

preventing it, in two main
Exogenous factors act on the

should

throughout

the monetarv supply

hac

thumb

of

in¬

ratios

thI^raJp^ofr!?rnwth^ nrrlirMwJ

in the
thp last
last two
twn vpars
In
years, th<i
the

SPruprf
served.

;;

The Causes of Unemployment

unemployment, and the

rule

supply

money

lowed to grow about 3%

de¬

by

the first four months of

The

by actions

the

Board

Reserve

into

reserve

continuously

mu

anunofficial

Also, the political process being what it is, we are likely
to have changes in prices and wage

descent

preceded

in required

and

The

The Federal

of choice.

1937

was

1938.

economy.

freedom

with

contribut-

.

the

of change of money supply
would lead to greater stability in

correspondingly reduced, the figure stood at just short of
$230 billion at the end of 1946. Now

Stability
in

causes

of

were reduced

,

Stability

; )
came

.

■v

circulation.!

of

activity

decline

August, 1936, and in March
and again in May, 1937. As a resuit, the quantity of money de¬
1937

latter

omy

figure of almost $253 billion by the end of 1945. After war
swollen cash holdings had been drawn down and the debt

addition

in

1933

in

-

combined stability
of these two items, which determine the rate of spending, would
lead to greater stability in the

-

Then, of

view

The

creases

rate

resources

Hopkins (according

in

ends

to

authorities

pression

to

minimizing unemployment, we
generally prefer other means
rather than administered price and
wage controls as a method of holding
down
unemployment.
The

Re¬

a full measure to the defla¬
of the quantity of money by

27%.

In

other

Federal

economic

mixture

a

clined

Economic

the New Deal with its

ment had reached a

tion

Means fox Maintaining

before President Roosevelt took over. And then came

glorification of debt. By the time we
entered World War II the net debt of the Federal Govern¬

; ing

V.

'

page

1929

monetary

.

from first

should be back to pre-World War I status.

New Deal thinking

from

-

Continued

of

1920
to
squeeze
the
in spite of the fact that

downturn in
The

more burdensome. Much of these in¬
have been "monetized"- through- bank

debt

in

result

was

began in January, 1920.

ownership. This is a process which must not be indefi¬
nitely continued.
; ' "
"
r
We simply must not continue the current neglect of
this explosive situation.

certain infiltration of what later was to be known as

even

approximately $140 billion; at the end of last year
$455 billion. A people thus loaded with

creases

de¬

the quan¬

of

economy
;a

,

private debt will inevitably find the carrying of a huge

however, not to be. Depression conditions and

It was,
a

we

middle

.

corporations and individuals in this country

it stood at about

had

employment

policy beginning with the
actions of November, 1919.
Further steps were taken up to the

sincb

1945 the net in¬

the end of World War II. At the end of

past

by 16% in 1920

money

direct

the

been

serve

.

Take

has

The decrease in

tity of

what it

prudence in the conduct of our fiscal affairs.

initiated

clines.

the

action

of the deflations of the

which

good many years. It is now more than three times
was a dozen years ago!.

a

Thursday, August 28, 1958

.

cause

to raise their debt very

We See It

As

except in

.

Monetary

few cases borrow sufficiently
much. Roughly the same was true
of World War II years. In fact they found themselves at
the end of that war with less debt than they had carried

Continued from first page

.

*•

Volume

188

Number

5772

.

.

The Commercial and Financial Chronicle

.

(821)
actual

fall

in

be concerned

not

of the present

Real

labor

the
quantity
of
July, 1957. we would

money after

Wage

about the

depth

rates

Some of

by
others

governmental

authorities;
by private authorities.

set

are

.

enterprises in
and

of

interstate

those

negotiations

Rates

Wage

than

more,

productivity, and

employment

by

rose

1.5

In

months.

un¬

the

study,

During

^

-

#

The period after a downturn

million.

in

warn

a

rates

that average
of

you

and

downturn

a

vyith full employment.

factor.

We should

marginal

productivity of the
If average out¬
highly correlated with

were

productivity,

a destabilizing
downturn would be

The

damped if money wage rates were
to
fall, or at least cease rising
A

sooner.

could

we

in

rates.) The movement
of real wage rates acts in this
pe-

riod, therefore, as

put

prices
any,

money wage

proper measure

the level of wage rates
compatible
use

in

preceding the downturn, if

reduction

lag would be

in

steel

and

The

relationship between wage
unemployment is such
1958 changes work in
destabilizing direction. They

rates

a

and

these

will add to the number of

ployed, at least in the
people
ployed than

more

will remain
would have

.

rate

wage
cur.

unem¬

increases

that

sense

unem¬

were

if

.no

to

oc¬

They

partially
offset the
employment increasing effects of
present fiscal and monetary pol¬
icies, some of which have auto¬
matically ? come into operation
and others of which
of

the result

are

discretionary actions.
This is not the time to attempt,

Changes

proof

of the proposition that
things being
equal,
the
number of jobs is inversely re¬

a

the

to the wage rate.
I would
like to point to data which illus¬

real

point

that

increases

rates which

wage

output

average
are

a

of

im¬

important

an

change

Why Real Wage -Rate Increases

fre¬
in¬

are
an

Outrun Productivity
It would

seem

that

method of

a

creased volume of unemployment.
-Purchasing power is determined stabilizing unemployment at a low
level would be one which prevents
by other factors than wage rates.

real

Between

1929

and

1933,

real

relative

to

output

average

us,

real

rates

wage

than

more

lion

in

averaged

10.4

2 M.

of

some

the

in

for

means

\

'

.»

>"

«

%

,

Year

:

.

\v/V,

(Ii)i;-H!S)

1929

1,933

0.799

nine

occurred

the

in wage

peak

The peak in product
prices

This

lag in the turn

II

1.04

_

4-10.7

1.313

;

*'

-V-.

■

■'

Relative

Per Cent

Per Cent-

Change

Change

■■

Vnempioy-

•

ment 3

—2.9%

—6.5%

4~ 2.8

—7.9

31.8
7.4

1.68
2.06

•

,

.

.

.

1949

1949

1950
1952

_____

_

1.376

'

4.8

4-

3.6

4-

7.5

;

1.376

_____

1.425

_____

1.58

>1956

1.70

2.25

.

;

1

2.51

2.67

2.3

.

frequently

Whatever

blamed

merit

the

there

fact

less

are |

as these

on

unions.

to

this

remains

that

is

resistant

in

riods

history

Economic Almanac,

1958

;

current
meii

2 J.

-j- 6.0

—1.5

3.2
2.6

.

—0.5

2.9

(New York: Thomas Y. Crowell Co., 1958),

National Productivity and Its Long-Term Projection
1951) and Economic Report of the President (Washing¬
ton:
U. S. Government Printing Office, 1958).
Data from the latter used to
compute the measures of productivity from 1949 through 1957.
for

data

Report

of

May

Statistics

of

the United States

through 1938.
Data for
the President (op. cit.J.




in

,

the

(Washington: U. S. GPO, 1949)
postwar
period are from Economic

in

Both of these devices still leave

untouched

the

reluctance

of

em-

ployers to cut wage rates after a
downturn, or their willingness'to
grant increases at times *of low

employment and

sales.

Here "We

more
information.
Economists have engaged in speculation
on this point.
Rather than

suggest

based

measures

on

such

specttla-

tion, however, it would be Wiser
to find out

rate of growth in the quantity of
money at, let us say, 2% per year,

de-

Gre'gg

Positive

need

June, 1954.

H.

Labor-Monopoly
Program."
(Journal of Political Economy,
August, 1951, Vol. LIX, No. 4.)
A

prevent

Rather than
attempting to meet
exigencies as they arise

required

Professor

"The

Problem:

for the

about the reasons

more

occurrence of the

Whether

is

it

fear of effects

phefiOfti-

social

on

presmorale and

productivity, inability to diagnose
the current situation, or the Tfui
man -failing
expressed ift *the
phrase that "generals always <prepare to fight the last war," we elo
not know.

Perhaps business men should be
taught to pay attention to *qtiit
rates and qualified applicant rates

before determining whether

or not
Voluntary
have always sunk to
very low levels months "before the
community became aware that a

to raise a
Quit- rates

recession

because

rate.

wage

was

under way.
increase

a wage

Simply
war re-

quired last year, and each year
before, to hold employees is Hot
an indication that another is CUrrently required.
>
t

Perhaps the community and femployees must be taught that'an
employer who cuts wage rates, or

fails to give

a

wage

increase

in

times of declining business, is-perizin£ the economy is the lag in forming a social service and mainturnarounds of wage movements taming employment by doing so.
behind turnarounds in business It may be that recurrent wage inactivity and employment. We can- creases are granted as a means of

they

formwer]y

did

whlen

unioniza-

^Qn wag jegg widespread. This
tends to slow the recovery process.
purthermore,

the

lag

has

been

mucb longer in the railroad indus¬

try

which

was

highly

unionized

Pittsburgh Bond Blub
Annual Fall Bitting

PITTSBURGH, Pa —The Bond
of Pittsburgh will hold -tits
Fall Outifig Friday, Sept.
Checking Upward Wage Rate
26, 1958, at the Allegheny Coun¬
Movement
try Club in Sewickley, Pa.
Guests, of course, are welcome
The paramount
problem here

long before unions

grew strong in

Club

most other industries.

Annual

seems

to be

one

continuanCe

can

be

obtained

°nly

of

of restraining the

on

an

upward

and

they should contact G. Harton

escape

wage

clauses in

iong_term agreements which

pro-

Goldman, Sachs Branch

vide for future wage rate increases.

production

in the two months

MIAMI, Fla.—Goldman, Sadhs &

Less aggressiveness on

for

of

Part

1.7

-Kendrick,

3 Historical

amount made

sboidd insist

rates, and addi-

wage

BERKELEY,

production is down 20 to 40%

Maintaining

Economic

Stability
the

reason

for

the

rise

in real wage rates relative to pro-

ductivity in periods such as 1920,
1930-33, 1937, and 1949 lies in the
prices. We should,
therefore, direct our attention first

to

W.

Lewis

changes

by

the part prior to a time when a wage in- Co. has opened a branch office in
of unions, or less power in their
crease is due is down 10% below
the Ainsley Building, under the
hands, might lessen the problem, the level of the similar
period in management of Hagood Clarke, Jr.
The pattern, however, seems to
the preceding year, then an escape
stem largely from mistaken anticiclause should provide that cost-ofpation concerning the future worth living or improvement factor inSkaife Adds to Staff
of labor and the worth of product
creases
would not go into effect.
(Special to The Financial Chronicle)
from present labor which will
Just last month, industries whose
■

Means

3.4

253.

(unpublished.

lineated

attempt
means

bargaining

Singer, III, Chairman Publicity &
rate movement after employment Reservations
Co mm i tt e e, at
usually good rates in the interval
bag turned down. I might suggest Sin ger, Deane & Scribner, -1B45
preceding a turn in activity lead
^wo devices that would provide a Union Trust Building, Pittsburgh
to over-bidding for labor at a time
solulion,
0ne is that employers 19,
1Q Pa.
when few idle men are available

fall of product
1 The
p.

to

moderate

to remedy recessions of the 1953
variety, for example, than the cuts
in reserve requirements of the

behave

to

seem

Anticipation of contin-

3.4

3.1

4-1.8

in

similarly.

reach the market in the future.

2.1

4-1.6

2.62

4-

9.8

4-5.2

2.36

1.74

._

—0.8

4-4.0

2.14
V,

1.47

_____

1954

1957

4-

2.14

-

(Millions)

0.4

'

'

The rise in periods such

by out-bidding other employers.
•

u.a.46

-

v. 't '

is

tional

.X

1.63

"

1948

.

,,

at

Sector)

3.6%

+

.

ucd increases in productivity and
price which usually occui at un-

activity
before

(Private

"

.

business

Non-Farm

Change

.

employers

$1.51

0.94

_J___

-

S0.772

_

.1936
1938

Per Cent

+5 million, level ^before midy *2 million by early

argument,

stability.

tivity.
*

£

1Q38

concern¬

Produc-

(Manufac.)

wiser

collective

Mav7 not attribute the lag simply to the simplifying the decision-making

industries and in nonunionized pe¬

Average 2

Hourly 1

Earnings

.

a^id

1936

May, 1919 to Oct., 1920,
money wage rates in manufactur¬
ing rose, by 25%.
The peak in

''

Real
'

^
ll

their bargaining in the late stages
of a boom. Rates in nonunionized

rates.

■

.

is

more

be. to

isdb, and May, presence 0f lahor uni0nS. Wage life and providing administrative
1937, money wage rates in manurates lagged when the union move- ease.
Other rules of thimrfo for
facturing were pushed from 62
ment wag un jmportant in the granting wage increases may have
cents to 70.1 cents per hour despite
United states, as well as in the to be devised to conserve deciSiOnthe still sizable volume of unemperiod since it has bec0me a much making capacity and avoid aditfinployment. This 13
j rise in wage
rates in the face of a slowing in stronger force in the economy. It istrative unease, and at the same
is significant> however, that wage time function to
produce fhe
the growth of the money supply
rateg begin moving upward much adaptations required for a stable
m
unemployment from a less socmer periods 0f exPansion than economy.

From this

Movement of Productivity, Wage Rates, and
Unemployment
.

It

of

of

legislative

sure,

maintaining

TABLE

!..

Vnoi

;

inferences

five months.

_

use

would

action has been explored and the

monetary
authorities
would
be
better advised to maintain a stable

,

fhi
Octol^r
(Jctooei,

Between

real

productivity
incompatible with a low

preceded the labor price peak by

automatic, stabil¬

here.

to

the

months

Friedman, '*Why the
American
Economy is' Depression-Proof," N'ationalnkonomisha Foreningens, 28 April
1954,
referred

inflation.

the

size

means

L vi

.

?

x

From

1938

describes

by

far out of

movements

draw

economic

un¬

mil¬

(among those who
would normally be a part of the

izers

are

can

ing

3%

productivity, and

employment

moving

too

level of unemployment.
we

1938,

almost

rose

caused

which

people Who "would normally be
employed from 0.4 million to 11.8
and

from

are

wage rates relative to

ment in the United States of those

1936

rates

which

productivity changes. Let
then look at the factors which

have

.

Between

money

the

enon.

tho

'i«

line with

per

*mari*ho'ur by 6.5 %,% This was asrsociated with a rise in unemploy¬

million.

wage

amounts

rates in manufacturing rose

wage

in

device

units, and make collusion among
them unlawful. The case for such

by discretionary monetary action,

ThP

rn

in

-

m
productivity
quently "^associat ed with

Snmnt
?Q'i7
^'ppiTnp vfT

over

short periods.

in

outrun in¬

creases

com-

thus

guide to

poor

amount

proper

been

wage rates,
but may serve well
for determination of changes over

lated

the

ih

has

This

long periods

•other

trate

not

following periods if the

or,
perhaps, 3%.
In any event,
activity, there should be no shifting in
leading to the fall-off, as well monetary policy from time to time
plicitly assumed as true over short I as in the period following the turn in order to
accelerate or slow the
periods in the preceding discussion. in activity when the
continuing rate of growth.
Over long periods, we would rise serves to further
the descent
Although greater consistency in
expect that increases in average and worsen the slump. From the
output per man caused by a rising third quarter of 1952 to the third monetary policy would do the major part 0f the job required to stasupply of capital would be less quarter of 1953, for
example, real bilize
unemployment at low levels,
than changes in marginal
output. wage rates rose by 5%, while prowe must face
the fact that there
We would, therefore, expect
wage ductivity rose less than 4%.
In
may
be monetary instability at
rates to rise by a larger
propor¬ 1957,
straight-time money wage various
times as long as politics
tion than average output over
long rates rose by 4.5% while the and human
beings influence the
periods of an increased supply of wholesale price index lor nonfood
devising and execution of monocapital and capital saving techno¬ items rose less than
1%, and pro- tary policy. In order to minimize
logical change were the dominant ductivity rose less than
1%. The ,^he harm that
may be done by unforces at work. In fact, we do find
greater severity of the current wise
policy, the adaptive mechathat real wage rates have risen
by contracuon may be attributed to
nism of our economy must be made
120% between 1929 and 1956, while the fact that
greater increases in more
responsive.
average output rose by only 74%-.
productivity moderated the effect
The second factor to be consid_
Yet 1956 was as good a
year in
ered in devising means for stabilthe employment sense as 1929.

employment.

railroads.

that

are

patible with full employment
the

second

time

the

negotiated expect that changes in the average iof maintaining economic stability,
years when 1958 eco¬ .would. be a guide to changes in We will return to this point.
nomic circumstances and markets marginal output
Real wage rates rise relative to
and, therefore, a
-were but imperfectly known. Most guide
to changes in wage rates productivity in the period precedof these increases are occurring consonant with the maintenance of
ing downturns in business
un¬

supply

money

grow-

a

A

bring labor monopoly within the
range of the Sherman Act, limit

various

under contracts

severe

adjustments made to

activity before wage rates supply does not continue to grow
usually a period of less as rapidly.
rapidly rising, or declining, proThis suggests that
monetary auductivity,; Real wage rates con- thorities must use caution in altinue
to
rise, however, in such lowing high rates of growth at
any
periods.
(This is the result of a time if they will have to slow the
continuing rise in money wage growth later in order to

prior

suffering
employment, such as

Any decrease in the rate

is

turn

the other hand, real
rates rose less than output

marginal

in industries

from

together

growth of the money supply
sets the stage for a decline. The
lags in our economy are such that

business

On

ceived,
in

stemming

occurrence

,

total labor.force.

creases

of

of

ing

Cycles.

rates

wage

type

clining.

industry the lag averaged nineteen

wage

I should

will receive, wage in¬

of

the

months

real

employers and unions. This year,
for example, 4.5 million workers
in the United
States have re¬
or

in

eleven

the

output is not

between

months

and

this

with continued increases in
money
wage rates while activity is de-

railroad

wage

under contract with
the
United States Government. Others
are
set for long periods in ad¬

by

Behavior

From 1952 to 1954,
rates rose about 1.5%

per manhour from 1949 to 1950
and 1951.
Unemployment declined
in-these years,'

com¬

an

Business

million.

producing

nine

States

in the United Kingdom in its

rose

the^average output rise, and
unemployment rose by nearly 0.5

.as

found

real

by 1.3 million.

goods

vance

1.%,. and unemployment

of

United

Research

lag behind manufacturing

activity

average output
1948
and
1949
by

between

about

Economic

average

the

than

by

.

governmental authorities, such

merce

post-World War

of

greater

the minimum rates for employees
of

in

money wage rates is a typical
phenomenon. The National Bureau

Between 1956. and 1957, the rise in
real wage rates was 0.5%

administered

rates

was

,

outran

rise

stances described above.

Many .wage

unemployment

various

recessions, .we find similar ex¬
periences. The rise in real wage

We can plausibly argue that the
unemployment we now suffer, and
have suffered, is a consequence,
of administered prices and
wage
rates, given the monetary circum¬

are

the

II

decline.

Rates, Productivity,

prices

In

-

And Employment

these

force,
million),

9.8

21

the

problem of preventing this

decline.

Changes in the rate of growth
supply are primarily

of the money

responsible for the fall of
and,

secondarily,

for

the

prices
rise

in

putting higher

were

wage rates into

ef-

feet., The steel /industry, for example, was required by its contracts

to

institute

improvement

L.

Calif.—Alexander

Pappas has been added to the

staff

of

Skaife &

Company, 3099

Telegraph Avenue,

9-cent-an-hour

increases

plus 4cost-of-living increases, plus fringe benefits which
increased wage costs by a total of

cent-an-hour

Joins

Taylor & Co.

(Special to The Financial Chronicle)

BEVERLY HILLS,

Cal.—Harry

A. Cottingham has become associ¬
Yet, polls of
workers in the Flint, Mich., area ated with Taylor and Company,
indicate that production workers 439 North Bedford Drive. Mr. Cotthere would prefer jobs, or the
tingham was formerly with Dempgreater assurance that jobs would
-pv_Tppplpr
o
20

cents

an

hour.

r

continue, to

any increase
rates at this time.

in wage
Co., Inc.

and

Blvth

&

The Commercial and Financial Chronicle

22

Continued

limits,

from page 6

ject

immediately sub¬

not

are

competitive

traditional

to

forces.

right, prices would obviously have
risen even faster. Sooner or later

price rise had to be stopped
or slowed down.
It should be ob¬
served that if it had been stopped
the

by fiscal measures (tax increases
or
lower Government
expendi¬
tures)

nomic

fiscal policies are
different in their operation.
and

not

If demand is controlled

either by

and

monetary of fiscal measures

continue to be pushed up,
the consequence must be unem¬

wages

ployment."

eco¬

hap¬

depression

economic distress always fol¬

and

lowed

and

which

the

Offers

is

Challenge

on

to

I

that

inflation

is

a

situation which must be avoided,
do

not

saying

as

to be

mean,

understood

that there was total
the degree to which

should

it

that

noteworthy

during

periods prior to 1930 when
we had price stability—and there
were a number of such periods—
well

as

as

during

some

of

the

periods in which the price level
drifted

downwards

—

this

Nation

about the neces¬

lot of loose talk
sary

tion

relationship
and growth;

between infla¬
as if we needed

avoided.

For

ex¬

the first in order to have the sec¬

the

In

first

place there is the
a factor
tion of the general nature of in¬
not present to any important de¬
flation as it was developed during
the hearings, I must say that one gree before the 1930's and which
has only become really significant
of the most significant cohtilusince World War II.
Because of
sions I drew from the testimony
the growth in size and power of
is that inflation today as a prob¬
labor unions we are now faced
lem is
'great''and increasing
with continuous utowarcl pressure
threat to our economy, with sev¬
on
wage
costs and thus prices,
eral new aspects.
regardless
of
productivity
in¬
I do not mean that the present
creases,
This
unknown

hitherto

variety but, rather, that

conditions

the

some

which

under

we

combat inflation today are
different than anything we
have faced before in this country.
The conclusion that our present
inflation is dangerous was rein¬
forced, in my opinion, by the
testimony of Bernard Baruch. In
the midst of a business downturn,
when he could easily have been
expected to direct his attention

must
very

towards other

made

the

matters, Mr. Baruch

flat

statement:

"Infla¬

of

organized labor,

development

was

cited by most of the Committee's
witnesses.
For example, Dean
Abbott noted that wage

increases

in excess of productivity "push up
prices when, as is the case in this
country, there is a flexible money
supply."
Professor Slichter also
took note of this situation, as did
former Chairman of the Board

of

Governors of the Federal Reserve

Marriner
the

Eccles, who said, ".
.
maip cause of rising prices

has been the
ion

their

.

use

monopolies
power

to

which labor
are

force

making
up

un¬

of

wages

tion, Gentlemen, is the most im¬ and numerous
costly fringe ben¬
portant
economic fact
of
our efits far in excess
of increased
time—the single greatest peril to
productivity."
our
economic
development."
I
There are several other aspects
think it is important that we look
of this problem which I believe,
behind this statement to see why
warrant notice. For example, it is
inflation remains our number one
important to note that if organ¬
problem.
ized labor were required to de¬
If
there
is
one
thing which
pend only on its bargaining power
stands out above all
else with to
force wage increases in excess
respect to our recent history, it of
productivity the program would
is the persistency of inflation and
eventually fail.
That is to say,
inflationary pressures.
This de¬ costs and
prices can be pushed
velopment must reflect the fact
up only so far before the public
that we are now facing new eco¬
would become1 unable to purchase
nomic problems, for, contrary to
all of the output and there would
some
opinions, this country has be
resulting unemployment. Rec¬
not had
a
continuing and per¬
ognizing this, much of organized
sistent inflationary condition un¬
labor has placed itself squarely
til recently. I was happy to see
in the camp of the new inflation¬
this point developed by Chairman
ists, supporting monetary pro¬
Martin during his questioning by
grams which will validate higher
Senator Kerr. Mr. Martin placed
wages.
Thus we have a twofn

the

record

information

on
the

pronged attack on price stability
on
the part of organized labor;
the and I think that we have
perhaps
trend
of
prices was generally
paid less attention to labor's de¬
downward. In other words, dur¬
votion to inflation than we should
ing the major portion of the life have
done.
#

prices which reveal that
period

from

of this nation

or

1800

we

to

over

1930,

have had stable

declining prices.

I

refer

my

of

This

is

significant

most

a

development.

new

Thursday. August 28, 1958

..

Second among the factors con¬
tributing to our new inflationary
problem is the changed role of
Government.
In many quarters

Employment Act of 1946 is
interpreted as a virtual commit¬
ment on the part of the Federal
the

Government to

I

do not want to leave this
topic
by giving the impression that all

undertake expan¬

sionary programs at the first sign
of a downturn. The act quite nat¬

sion

reflected
the
fears of
people that the long depres¬
the

of

1930

the

to the

many of
minimum levels.

cial

of

in¬
them already at
I

reminded

am

remark

a

made recently
by
Bryan, President of the

Malcolm

Federal Reserve Bank of Atlanta:
"If

policy of active

a

missive
then

inflation is

we

to

per¬

a

fact,

the shreds of

secure

can

or

be

self-respect only by announc¬
ing the policy. This is the least of
the canons of decency that should
prevail. We should have the de¬
cency to say to the money saver,
'Hold
still, Little Fish!
All we
intend to do is gut you'!"
our

would

s

be

re¬

importance of this chang¬
ing attitude towards inflation was
reflected
in many ways during
the

of the hearings.

course

I

am

that I do injustice to no one

sure

when

I

that the Federal Re¬
quite severely criticized
Senators during
the questioning in the summer of
1957.
Many of these criticisms
reflected legitimate differences of
say

serve was

by

of the

some

opinion, but it was nevertheless
quite apparent that in the eyes of
members

some

1he

major

of

fault

committee

the

Federal

the

of

Reserve was that it

at¬

even

was

period.
tempting to fight the inflationary
Unfortunately the goal of price'
price rise which was then occur¬
stability was not included in the
ring, using the only means at its
objectives of the Act, and because
disposal.
It is significant, also,
this was not done, the Act seems
that during the most recent Com¬
to have had the effect of requir¬
mittee sessions the only criticism
in

sumed

post-war

ing the Government to act more

vigorously when prices need to be
raised, and less vigorously, if at
all, when prices need to be low¬
ered. As Dean. Abbott put it: "It
clear

seems

both

that

these

ob¬

jectives (maximum employment
and
price stability) will not be
achieved so long as one has the
blessing of the Federal Govern¬
and the other does not."

ment

facet

Another
role

of

the

of

is

Government

changed
the large

place which Government expendi¬
tures occupy in the stream of our
total national expenditure.
Be¬
cause so

ing is of

easily

which

a

nature which cannot

changed, a
business
always results in dis¬
proportionately
lower
tax
re¬
be

downturn

heard from these same

we

people with respect to the present
policy of monetary

now

ease

be¬

by the Federal Re¬
is that it had not gone far

fast enough.

to

determine what could

to

stop

Thus, we had the
ironic situation of hearings held
be done

inflation, devoting

a

responsible agency which was at¬
tempting to do just that.
Compatibility

The

Stability

Price

of

and Maximum

Employment

—

any

anti-inflationary

was

also

illustrated

program —
by the fre¬

is difficult for the Government to

two

substantial Government deficit.

On the other

of

have

much

there

still

for

of

larger

penditures

or

since

surplus

a

always strong

are

pressures

Government

ex¬

goals are not only compatible
go
hand-in-hand; that we

but

think

"1

important

new

our

the

without

one

other. 1 would agree, for

said:

The third factor in

have

cannot

example,

with former Chairman Eccles who

tax reductions.

Public's Acceptance
in¬

to

...

maintain

they

equally

are

I would undertake
a

stable

economy

is in many
ways the most important, for it
relates
to
the
public attitudes

rather than having run-a-way

which, in

got to

flationary

determine

problem

a

democracy, ultimately
of action. To

our course

put it plainly, inflation seems to
be

We had

becoming acceptable.

several
ture

illustrations

of

this

atti-

during the hearings held by
Committee

the

example,

on

Finance.

For

Slichter ar¬
gued that inflation—as long as it
proceeded at a slow rate—was not
a
particularly worrisome prob¬
lem. As he put it: "I do not think
it is very dangerous. I think we
are likely to have it and I think
it is an important problem, but I
would not
use
that
expression
'very dangerous.' I would describe
it

as

ris

Professor

unfortunate."

went

appeared

even

Professor Har¬

further

before

when

he

the

Committee,
indicating that he would be more
or

less content with

tion

a

slow infla¬

long as there was
proportional increase in
so

a

larger
output.

.

.

of

the

found

huge

in¬

flation which will wreck employ¬
ment and production

have
have
through monetary and fiscal, pol¬
icy to prevent inflation
.
in the
long run (this) will create more
production and employment than
if you do not do it."
I believe
that this viewpoint is shared by
such tools

use

.

you

.

.

you

as

.

most

of

the

witnesses

and

most

submitting answers
to the written questions prepared
by the Committee. Nevertheless,
it was quite evident that there
members of the Com¬

some

mittee—and

perhaps one or two
witnesses—who assign a second¬
ary role to the goal of price sta¬
bility and who believe that any
attempt to achieve price stability
will result in frequent or contin¬
uous
unemployment.
I merely
observe that if you believe that
price stability can only be achieved
at the cost of unemployment and
also

believe

that

maximum

em¬

a

be

permanent fact of our

economic life.
As I

come

near

responsibility
policy,, the effects
policies of or¬
ganized labor, and the impact of
the present recession on the con¬
monetary

inflation of the

on.

tinuing inflation.
As

conclude

I

statement,
that

the

all

above

me

which

witnesses

was

raised

this,

is

others

the

belief on the part
many
Americans
that
money" which encourages

ap¬

of so
"easy
"easy

parent

debt" is

first

the

want to say again,
thing that concerns

I

one

sound and constructive

a

policy. Those who are attracted
by this idea denounce any at¬
tempt
to
control
inflation
by
restraining the too rapid growth
of the money supply, particularly
if it coincides with the heady ex¬
uberance of an inflationary boom.
The resulting
recession is then
the

on

damage, rather than
which had

which

restraint,

dulled its potential

had

the boom,

on

made recession inevi¬

table.
The sad fact is that inflation is

economic

fairy
godmother.
magic in money to
something for nothing,
and
when
government
creates
money
faster than its citizens
no

There

is

no

produce

it does

value,

not

create

wealth, it only creates inflation,
which

is

the

illusion

wealth.

of

While inflation may seem at first
to

provide some people some¬
thing for nothing, it is only trans¬
ferring value from one group to
another, and if continued, even¬
tually robs everyone — even the
"smart"

boys.

When the American people can

courageously face

up

that

such

there

is

to the fact

thing as
something for nothing; that there
is no real security without risk;
that money cannot be manipu¬
lated
to
produce
wealth;
that
there is

no

substitute for human

no

endeavor

individual wisdom

and

and

responsibility; then, and only
then, can we bring America back
to economic reality, which in turn
will put our feet on the path to
sound growth and true prosperity.

With L. A. Huey Co.
(Special to The Financial Chronicle)

DENVER,
Beaton

is

by

some

—
arid partially devel¬
oped in limited question referred

Colo.

—

with

Harold

L.

F.

A.

Huey
Co., U. S. National Bank Building.
now

Laurence Mandeville Marks
Mandeville

Laurence
senior

Marks,

and founder in
brokerage and
investment banking firm of Lau¬
rence
M. Marks & Co., passed
away Aug. 25 at St. Luke's Hos¬
1932

partner

of

pital

stock

the

after

months.

an

He

illness

of

several

66.

was

After his graduation from Yale

University,
the

Mr.

Marks

investment

own

Mr. Marks

with

was

banking firm of

Higginson

&

Co.

until

he

firm.

was a

member of the

New York Stock

member

erning
the end of this

opening statement, I realize that
I have not given a complete list of
all the factors that have appeared
in recent years to give the old
problem of inflation a new face.
One

the

inflation through its
for

formed his

as

this, I

role of the
Federal Reserve in dealing with
discuss

to

Lee,

should

striving, it must follow that you
also are willing to accept Infla¬
tion

has

banking

other statements like

In

plan

towards

we

debt

the

in

system.

ployment should be the only goal
which

a

,

of the persons

were

our

created
large segment

Federal

lodgment

create

increasing acceptability of
or the opposition to

inflation

the

the problem

to

by the fact that

large

part of the time to criticism oLa

outside

Abbott also called

Dr.

attention

blamed

hand, during periods
prosperity in which inflation¬
ary pressures may be strong, it

ceipts, and automatically produces

tem."

actually

or

finan¬

modern

the

banking system—savings and loan
associations—insurance companies
and finance companies.
Dr. Ab¬
bott described these generally as
"important financing institutions
often governmentally sponsored,
not subject to the credit policies
or influence of the Reserve Sys¬

serve

quent discussion during the hear¬
ings of the question of the com¬
patibility of a policy of price
stability and a policy of maximum
employment. For my own part,
I am of the firm opinion that the.

a

role of

intermediaries

ing followed

much Government spend¬

colleagues to p. 1938 of Part 6 of the
blame
for
the
wage-price His words were: "I would be very
the Hearings.
spiral must rest with organized happy with a 1% rise of prices
Although we did not have a labor.
Industry pricing policies and a 5% rise in output
On
persistent
inflationary problem and attitudes must also
carry their another occasion he made it clear
during the most of' our history, I
part of the responsibility. As Mr. that he was unconcerned over the
do not mean to imply that we had
Eccles pointed out: "Business gen¬ loss which will be suffered
by
ho problems at all. The basic dif¬
erally has been willing to grant savers in inflation when he said:
ficulty was that the price level excessive
demands of labor rather "I wouldn't be unhappy about a
changed too suddenly and swiftly than face a
strike, so long as it 1% inflation, even if it does, say
•—first in one direction and then
was able to pass on to the
public over 40 years, wipe out 50% of
in another. The erratic movement
the increased costs."
your savings, as it would."
of prices was terribly serious. On
I might remark that
Also, we must recognize that
although
•come
occasions
price increases some business
firms, because of such a development might not
and consequent declines were so
their dominant positions, have the make Professor Harris
unhappy,
sharp as to stimulate the wildest
power to set prices which, Within the same cannot be said for those




millions who depend on fixed
comes,

The

Blames Government

many

role

inflation itself is of

the rise in the economic power

urally

Singles Out Labor

considera¬

major

a

is

any

Unprecedented Conditions
To return now to the

which

factors

new

factor

ond.

on

be

relatively

those

I challenge any one to find
period in the history of this
country when we had price sta¬
ample, the testimony of Profes¬
sors
Harris and SJichter quite bility which was not accompanied
by substantial economic growth.
clearly indicated only slight con¬
If it is true—as I believe it to
cern over inflation so long as the
be—that we are today facing the
s ate was slow.
In addition, ques¬
old problem of inflation in a new
tioning bv some of the members
and more dangerous setting, let us
of
the
Committee
suggested a
see what this setting consists of.
similar attitude.

agreement

of

ness.

say

proposition

today.
I am here con¬
only with the development

it

organized labor, unchecked by the
traditional rules applied to busi¬

Price

enjoyed a remarkable rate of eco¬
that there seemed
nomic growth.
Today we hear a
be general agreement over the

When

give

cerned

made
inflation
of have
'93 are problem and one such

'73 and

Stability
It

the relationship
between
wages
and prices de¬
serves more attention than I can

"panics"

had

we

years

tragic examples.

mended, the reaction would have
been the same.
In that respect
monetary

of

this

when

activity,

pened long periods of

experts had recom¬

as some

kind

reckless

most

and

saying that the

It goes without
entire question of

The Problem of Inflation

3

.

(822;

was

Exchange and a
exchange's gov¬
committee, 1934-38.
He
of

the

president of the

Investment

Banker's

Association of

1950-51,

President

America,
the

Bank
Club of New York, 1932-33, a for¬

mer

governor

Association

of

of

the

National

of

Security Dealers
,and from 1945-49 a governor., of

the'Association x>£ Stock Exchange
firms.

*

-

;

.

"

,

Volume

188

Number 5772

.

.

.

The Commercial and Financial Chronicle

(823)
Continued

jrom jirst

23

but will require additional
capac¬

page

ity. Beyond this, rapidly growing
expenditures by private
business, by the universities and
by other scientific institutions will
require
additional
facilities
for
research

The Promise of the Future
initial

during

owners

mind

Under the forced, draft of these
model

competition

changes,

speeded up. Efficiency
increased, and the level

progress

of

has

technological

been stimulated and

has

been

The

period

the

of their useful life.

has

The in¬
employment

grown;

by

inquiring
unique

means

Motors.

veloped it to

the

of

no

pride' ourselves
an

to

substantially to
On

it

is

progress.

our

occasion

an

while

useful

past, it is of

ficient number of used

for

rep¬

to

values,

transportation

individual

bring

cars,

substantial

resenting

within the reach of everyone.
model

change

would

life

annual

not been for the

Had it

whole

our

way

New in¬

far-flung suburbs.

dustries and businesses would hot

provide new
jobs for hundreds of thousands of
have

sprung

and

men

to

up

farms

Our

women.

would remain isolated. Our stand¬

living undoubtedly would

of

ard

substantially lower.
Our annual model change

be

and

additional

are

aided

have

General

abled

General

have

Motors to

en¬

prosper

famous

other

of

progress

They

automobile

the

but
too,

grow,

factors,

the

Motors.

while

even

to

names

industry

were

by" the' wayside!H

falling

.Vision

and

Organization
the vision to

Our founders had

comprehend the vast potentialities
automobile

the

time

when

business

at

a

were

persons

many

thinking only in terms of a lux¬
ury product for a limited market.
The progress of General Motors
can
be directly attributed to the
realization

of

its

that

founders

their

product would come to be
desired
by
millions of people.
This

their

underlay

thought
vision

tion

enough.

required, and it was
a great contribu¬
the growth and develop¬

Capital
in this

not

was

was

that

area

to

ment of General Motors was made

by-local citizens of Flint.

They

had the faith to furnish the capi¬
tal

the

enabled

that

founders

to

bring their vision to reality.
An

important

growth

was

factor

in

our

the development of a

type of organizational structure
which
provides for
centralized

policy-making

decentralized

and

administration.

Centralization, properly estab¬
lished, makes possible directional
control, coordination, specializa¬
tion and resulting economies. De¬
centralization, properly e s t a blished,
develops
initiative
and
responsibility and makes possible
a
proper distribution of decisions
at

all

levels

results in

operative

of

management.

It

flexibility and that co¬
effort so necessary to

large-scale enterprise.
Under the General Motors

agement

concept
flow

continuous

of

that

the

the recession and that

has

trend
modest

already

upward

an

in

begun

a

way.

Industrial
covered

production

from

the

low

has

re¬

reached

in

April. Manufacturing employment
in June and July rose
slightly for
first

the

time

average
a

in

18

months, and
factory
workweek

substantial

employment

is

increase.
than

more

6*5

million, while the unemploy¬
ment picture has improved.
The annual rate of

man¬

is

there
ideas

a

and

information

upward and down¬
ward
through
the
manage¬
ment organization. This results in

76,000,-

Under

conditions

of

full,

it is reasonable

ployment

em¬

to

as¬

that gross national product
will rise from $428,000,000,000 cur¬
sume

February

and

rising

reached

an

all-time

high in > July.
Finally,
gross national product, after de¬
clining for two successive quar¬

a

total dis¬

income

of

$420,000,000,000.
Of great significance will be the
increased income of many house¬
holds.
Whereas
total
consumer
income

will have

risen one-third

these

other

indices,
improvement

business

have

factors,
are

in

as

evidence of
consumer

confidence/This
effect

well

the

as

an

and

should

fourth

on

automobile

quarter and that this

im¬

These

significant figures
from the standpoint of the auto¬
mobile industry. As a number of
are

households

in¬

the market for new
expands. Also significant is

cars

the

household

and

rise,

comes

continuing

tion

trend of popula¬
from the cities and

away

that

passenger

of

area

One
vance

We may expect

the

cars

demand

will

million

8

word

that

I

of

for

the

annually.

caution.

foresee

t

new

in

be

units

1 I t

The

is not

ad¬

auto¬

all

elements

of

our

society

for the common good.
The free enterprise system must
be kept strong and virile.
There

must

be

incentives

to

attract

in¬

vestment

the

market
than

would

that

not

absorb

unfamiliar

and

unex¬

plored territory.




productive capacity developed
by industry in the postwar period

the

no

one

to

comes

salesman, stays with

se¬

them

see

their place has been
frontiers of science and
industry whose horizons are lim¬

firm that

a

going no where; he slowly
dehydrates and
fossilizes
along
with

his

associates.

rationalize

It is easy to
atmosphere of ste¬

an

rility and call it stability. Life
without growth and progress be¬
comes

state

a

of

wherein

barren entomb¬

salesman

no

can

develop ideas that will

enrich either his

life

own

that

or

of others.

I

ago

progressive

for about

wished

a

to

in

small

the

firm

Funds.

idea

that

itless.

I

for

do

know

that

opportu¬
have never
been greater than they are today
and that bold planning can pro¬
vide the impetus that will keep
our economy on the march toward
progress

General Motors
our

are

dedicated

second half century begins.

as

your

told

had

suburb

stairs

to

become

selling them.

expert, Jp

an,

But he

handi¬

was

present firm, because they did not
place very much emphasis upon
sale

of

Mutual

Funds

since

their

interests were primarily in
handling local issues, underwritings, and
participating in new
issues of young, growing compa¬
nies. Although my friend was not
discouraged in his desire to con¬

centrate

the

on

Funds,

he

was

nevertheless under constant pres¬
sure
to develop business in the

where his firm had its main

interests (which was

There

also

was

only proper).
another

basis

for

disagreement inasmuch as this
had many years of business
experience behind him before he
man

position of

a

invest¬

an

ment securities salesman.

invested his

He had

funds

carefully
and well.
He had lived through
1929
and
he
knew
something
about taxes, the problems of small
business, the long, hard road be¬
tion

struggling

mature

a

terprise,
much

own

small

a

and

he

and

confidence

securities

that

promo¬

successful

send,

He

him

did
in

he

have

not

of

some

at

was

the

times

He

many

an

up¬

building

has

been

sev¬
now

business.

running

his

own

small business for three
years and
each year he is busier and more
active.

He has

only

few sales¬

a

men, a small office force, and he
does most of the firm's business

his

over

Mutual

grade

desk.

own

Funds,

He

few

is

selling

highstocks, and invest¬
a

common

very

own money.
He is happy
doing what he believes is the way

he

should live his life

is

even

more

allow

not

and, what

important, he

himself

to

I like the

little

town

of Stony
Point, New
only got on the ballot

York,' He
because

itjyjas almost impossible
enough Democrats to, fill

find

to

story about Jim Farley
try for political of¬
staunchly Republican

first
the

out the ticket.

No

thought he
daily job
bookkeeper and, at night and
on
weekends, he went from house
to house
ringing doorbells. As he
said it, politics like
selling, is a

had
as

chance.

a

one

He had

a

a

field where idlers don't last

Things
have
this

long.
happen, you
them happen and

don't
make

to

work.

means

There
around

just

was

and

chance."

no question of
sitting
thinking "I haven't a

Night after

work he plugged

trary
he

to

was

small
So

night

everyone's

elected Town Clerk by the

majority

started

of

the

20-odd

career

of

community there

to

Farley that led him to the very
in the political life of this
country.
As he said, "I had to
give myself the benefit of the

doubt, and keep
You

the

are

on

working."

know what is around

never

and

corner

forces

what

working in

tion—but the

unexpected
direc¬

your

who

stays in a
rut, who never tries to better
himself, and to grow, never knows
man

were

no

hard-

over

his greatest ad¬

versary—his

own

doubts.

Inman With Walston
("Special to Thj? Financial Chronicle)

his

FRESNO,

oppor¬

tunities

a

victory

worse

In

go.

votes.
James

top

did not fit in with his surround¬

ings and to make matters

after

and, con¬
expectations,

away

the thrill that comes with

he
was
financially
successful he began to worry. He

nowhere

did
into a

get

rut—even at the age of 60.

won

Although

had

were

took

bank

a

considerable

en¬

asked to offer.

he

evening

prosperous

where he made friends with
eral of the officers and who

He

capped in, his association with his

tween

He

in

the

mind.

a

there

people.

office

in

up

not

could do it

his

up

where

retired

his

took

had

office in

an

fice

areas

made

opened

people had a need for the services
performed by the Funds and he

the

I

slightest doubt that he
he

Fie

think I could?"

you

that

and before I left him that

and

desired

business?"

own

him

many

Calif. —Kenneth

G.

for
connecting with a
sound, small firm that would let
him specialize in the sale of Mu¬

Inman has become associated with

tual

Fresno

Funds.

become

his

where

New

a

firm

desk

did

not

customer's

a

tive for

He

could

make

Walston

to

sat down

ers

how

he

investment

should

business,

fit

into

and too

young to
go

&

with Aim, Kane, Rog¬
Co., 39 South La Salle St.

now

evening in

one

mentally to quit, too
strong to do something that he
did not find compatible .with his
of

I.

especial to The Financial Chronicle)

Julien Collins & Co. Adds

young

the

1115 Van
he was

Francis

CHICAGO, 111.—Frank O. Wid-

his home, this man of 60 who was

ideas

for

With Aim, Kane, Rogers

bin is

we

Inc.,

In the past

Manager

du Pont & Co.

another

Why Not Try It?
So

Co.,

Nuess Avenue.

connection.

too

&

Ex¬

went

wondering

day

every

he

Stock

he

so

to

representa¬

York

and

wish

appeared,

nities

1

specialized

a

Mutual

.

good

a

He very much

develop

in

believed

a

investment

year.

business

called

was

to

give advice to
friend who had been with
and

open

replied, "Do

ing his

Several years
upon

taken by

—

into

to

is

change

number.

mind is never great confidence in the future of
satisfied with things as they are. our country, as well as in the these new horizons.
It is always seeking ways to make future of the automobile industry.
I do know that, given a world
at peace, sound national policies
things better and do things better.
It is estimated that our nation's
and a people willing to work for
It assumes that everything and
population will exceed 190,000,000
the
things they want, we can
anything can be improved.
by 1965, which compares with
to
an
ever
more
In General Motors
whatever 174,000,000 currently. Number of look forward
the problem—we try to get the households is expected to increase dynamic and prospering national
facts, analyze them and follow, the from
50,000,000
to
56,000,000. economy.
That is the goal to which we in
direction
indicated, even, if it These increases will not only tax
leads

costly

a

on

of

because

working

more

inquiring

Holding

ago

create and

provement will gather momentum
I do know that while the old
throughout 1959. If this appraisal
of the near-term picture is "cor¬ frontiers of geography have dis¬

rect; it is not unreasonable to
expect that the automobile indus¬
ing and in maximum initiative at try will produce and sell in the
every managerial level. I believe, area of 5% million passenger cars
too,
that it has encouraged a in the domestic market dur¬
special attitude of mind in Gen¬ ing 1959.
This compares with an
eral
Motors which we call the estimated 4,300,000 for 1958.
attitude of the inquiring mind.
As for the longer term, I have

the invest¬

companies that have
lost their "go" and their
"drive" is an expensive
pastime,
yet many investors do this just

long

ment

capital and stimulate a
industry, which has been one of continuation of the steady for¬
the
hardest hit of any in
this ward march of technology. Man¬
recession.
agement must be alert to its re¬
sponsibilities, and all who work
Predicts Bigger Auto Year in 1959 must
recognize that the only way
I anticipate a marked increase to have more is to produce more.
in the level of automobile pro¬
It is my hope and belief that all
duction with the start of the 1959 of these things will come to pass
model year. And because so many within
these
next
few
years.
other industries are dependent on Looking to the more distant fu¬
our industry, the result should be
ture, as I stand in a figurative
a
chain reaction throughout the sense beside our milestone of 50
whole economy. Employment will years of General Motors progress.
increase and unemployment will I see ahead a second half century
decrease. As a matter of fact, our of further progress—for General
plans in General Motors provide Motors, for all of us in Flint and
for recalling one hundred thou¬ for the nation as a whole.
sand
As to the specifics of that prog¬
hourly rate employees to
their jobs by mid-October, and by ress, I will not attempt to enu¬
Nov. 1 hourly rate employment in merate them.
I am too mindful
the United States will reach of the experts who in 1903 were
convinced that production in the
325,000.
I expect a further increase in automobile industry could never
the gross national product in the exceed 20,000 cars a year because
an

curities

do.

increase by two-thirds.

with
of

to

by 1965, households with incomes
of $7,500 and up are expected to

rose

AH

In

ment business this is often

thing

men

a

in

result

personal

matic. There is no such thing as
slightly in the second guaranteed'annual progress.
quarter to $428 billion dollars on a
To achieve these gains by 1965
seasonally adjusted annual rate will require a cooperative effort,

ters,

some

they become

That should

sume

since

that

and suggests a better move.
Many

<«!

Personal income has been

reasons

rut is

a

rently to $600,000,000,000 by 1965.

housing
many new customers among the
starts rose in July to the highest
13 million households which do
level since February, 1956. Retail
not now own cars.
And we may
sales remain above the low point
also expect a substantial increase
reached in February and March.
in multicar households from 7^2
Total
expenditures by Federal,
million currently to more than 11
state and local governments, now
million by 1965.
the highest in history, are still
t
increasing.
Many
new
defense Predicts 8 Million Cars in 1965
contracts have been let, and their
By 1965 it is reasonable to as¬
effect has yet to be felt.

mutual education and understand¬

The

total of about

a

into the suburbs.

new

basis.

planning for the future.
But

indications

are

country has passed the bottom of

Total

there

r

There

showed

that

of

Detects Upturn Trend

the industry

and

the

the

comfortable there.

posable

to serve the

well

into

look

■

it possible for

customer

..in

first.

General Motors

made

to

Motors, for the City
industry and for
our great country?
Let us consider the near-term

the

has

even

try

General

of

Our cities would not have spread
out to

to

of Flint, for our

today.

different

be

tance

of

stay in

as
this, 000 persons by 1965 and that 73,analyze the 000,000
will
be
gainfully
em¬
greater impor¬ ployed.

future. What does the future hold

Don't Be Afraid to Venture Into New
Fields
One

will reach

such

annual
model
change has made available a suf¬
the

By JOHN DUTTON

mated that the civilian labor force

to

has mounted.

Finally,

many new products.
Technology
will continue to advance.

However,
we
Many new jobs should material¬
on
having de¬ ize— both in existing industries
unusual degree. and in new industries. It is esti¬

We believe that it has contributed

buying power raised.

dustry

attitude
is

General

get into a "rut" and just
through the motions every day

(Special to The Financial Chronicle)

CHICAGO, 111.—Wilfred A. De
Cook has been added to the staff
of Julien Collins &

Company, 105
Street, members
the Midwest Stock Exchange.

South
of

La

Salle

which he could well afford to do.
We

explored

There

was

no

the
way

possibilities.
in which he
ideas in his

could
develop his
present connection. That

tain.

There

were

that offered such
I
and

no
an

opportunity.

looked at him for
I

was cer¬

other firms

a

moment

suggested, "Why don't you

With Paine, Webber
(Special to The Financial Chronicle)

Leroy B. Murdock has become
with
Paine, Webber,
& Curtis, -209 South La
Salle Street.
He was formerly
with Walston & Co., Inc. and Rod¬
associated

Jackson

man

& Renhaw.

The Commercial and Financial Chronicle

.

.

.

Thursday, August 28, 1958

(824)

24

ultimate cost against the expected rise of new

^

rnYttinnprl imrr) none
continued jrum puytl

J

results.

When

the

Bureau

presents the

Presi-

new

proposa.l has been carefully
examined
from
every
relevant

if

dent,

a

aspect. The

challenges.

close of the .session;; and your
people complain about the high
ancj
resources
needed
to
meet cost of living, do not pass the
decision is the Presi- tomorrow's tests, we must see to it buck.• v Tell ' them
the
facts.

results of its review to the

Making the Nation's Budget
And Budget Outlook for 1960

nations in Asia, Africa, eluded with this advice to his

and the East will change and fellow legislators:
widen trade patterns and provide \ "So when you go home at the
we

are

;

^

to have the strength

dent's, and I think you should now. The times call for imagina-

~
_

.

know that he doesn't always agree

point to the Bureau and complain with the recommendations of the
gress determine the great ques- that it isn't cutting expenses to the Bureau. That's all right with us.
tions of policy. As for us, we are bone.
We aren't out to make a record.
men down in the stokehole of the
when the Bureau cuts the re- We're advising the President, and
ship of state, and we are con- quests of the government agencies, his
judgment is the one that
cerned simply with the economical the agency heads are not pleased, counts. The important thing is that
handling of fuel. The President
when the agency heads take ac- the President has to have an imadvised by the Cabinet, and Con-

.

Tell them that the more money

we took in, the more you spent,
cipline. The fact that we are Tell them the national debt is
strong and still growing doesn't higher because you voted to make
eXcuse us from conserving our it. higher. Tell them the dollar
strength and our resources for the has ;• gone down and the cost
greater efforts still to come. Just of groceries has gone up because
tion, for confidence, and for dis-

as society must be responsible, so
voted to depreciate the dollar
must be the government which and voted to raise prices. Tell
and
Congress
determine which ti
f their own to tighten up partial staff to search out all sides represents and serves it. Govern- them you thought you were camway the ship sails, for that is a on sPending
they sometimes find of the story, because the President ment must be able to judge.the paigning out of the public treasmatter of policy, but we in the
conveniept to let the Bureau of hasn't the time to do it himself, climate and the timing of its acurY and making votes by voting
hold of the ship have something th
Budget take the responsibility
And if that staff undertook to tions in relation. to its total re- % practically everything everyto do with how far she can sail
*
r.rll<=.,Hine
*lant its work on a self-serving Sponsibility, and adjust quickly in body and anybody wanted. Then
through the way in which, in our
J? many,
basis, no President would put up response to change.
they ought to reelect you and send
humbler place, we apply common P^sure group thrnks its troiiMes with
for very teg.
•
^
'•
you' back because you told the
sense business principles.
would disappear it only the
Facing Deficit Budgets
'
truth — and then come back and
,

_

"Much

love the President,

as we

f0" gAnd
}here

,

there

mmrv

might

be"aPpo?nt

,

Persp*ctiv® ,s Essent,al

In search'ngTor a word to describe the budget Process, I come
back to the term ''perspective..
And this is the important thing to
wher- understand. Some are dedicated
to caring for the sick and unfortunate. In their eyes this quite

Last January, the President sent ?■"."? more before it is too late;
« is not already too late."
Well, you can judge how effec-

to (he Congress a budget for the
fiscal year which began July 1,
six weeks ago, that estimated an
approximate balance of revenues
and expenditures at a total of
about $74 billion. You know what
bas happened since then. .The
understandably may be the most ba]ance quickly changed into a
urgent goal of public policy. But cjeficit that may be as much as $12
gress as to how the largest amount approve every spending proposal if some were physical scientists, billion by the time the year ends,
of garbage could be spread in the that is brought up.
with only a million-pound e"SJjie One reason for this deficit is a
most expeditious and economical
it is true that the Bureau tries thrust between themselves and the siowdowll jn the business sector,
manner."
to eliminate public services that moon, they might feel that other wbjcb caused a major loss of exBut
things were destined
to no longer appear justified.
things should be put to one side pected tax receipts,. At the same
in its omnipotence
untn vou ston
and tlbnk
over
appropriations and in ac- J.u^frTt
cordance with its authority over t!
*
..
_
.
policy, passed d law that garbage
H ,s lrue
*"e Bureau of the
should be put on the White House Budget works tor economy,
steps, it would be our regrettable ever and when ever it finds the
duty, as a bureau, in an impartial, opportunity.
nonpolitical and nonpartisan way
It is true that the Bureau does
to advise the Executive and Con- not recommend that the President
if

Congress,

..

.

happen to these relationships that
General Dawes could not foresee,

.

true
that • the Bureau
for more efficient methods
As the years went by, more and Gf conducting government.
more people turned to Washington
Tf
.
+T.11Q
ihci Rlir<Iail llc:o<,
as the source of leadership, money,
its w,iauthority to
hold back
and political responsibility. Government was to become big and
nthpr
it

is

presses

.tim* e*Knd"u.r?- will-be four
nV-L.miViAtcr to six billion higher than we anthwe. A political economist inter- ticipated in January. Why did ex-

J™*-®*
A

.ef\

,

.

complex and powerful, and its ex-

penditures were to assume much
greater importance to the economy. By 1939 the workload of the
Presidency and our governmental
machinery had become so altered
that new methods of management
were needed desperately.
Out of
this situation came the Reorganization Act of 1939, which took the
Bureau of the Budget out of the

made it
staff arm of the
President for public management,
a position it still occupies after alTreasury Department and

the

principal

most 20 years.

provides

this system

Basically,

for a direct working relationship
between
the
Bureau
and
the

President. All budgetary decisions
made by

the President with

the advice of

the Director of the

are

legis-

Bureau of the Budget. The

la^ive program

of

the

executive

branch is rcvicwcfi bv the Bureau

o^he Budget^determine

its re-

lationship to the policies of the
President.
Projects for governmental reorganization are initiated
the

in

Bureau

of

the Budget for

the consideration of the President,
The statistical collection programs

the

coordinated by the Bureau of the Budget,
The government-wide program of
aceounting and financial management improvement is directed by
the Bureau. And, as some of you
may have heard, the Bureau has
something to do with coordinating
of

the

government

overall

hospital

are

administration of the

programs

Government.

of the Federal
-

no

er

a

Target

are

-

a

When the budget shows

plus,

J*™*™
dop wouldn't'coordinated through the Council
everytmngj We wouldn t need the 0n Foreign Economic Policy. I cite

it isn
isn't
lareer
it
t. Larger.

When
favorite

the

Against this background, he must
^lect tb? 11?eans through which

nf"ȣ
serves

him

hv

tectino-

each

new

denies

project,

or

some

holds

60 years of age

of $2 bmion

at

yearfknd

with a cost of $58. billion ovei
ilve Years'
'
national administration is a highly
The pressure for more spending
organized: matter, It is in the reached such proportions that the
framework of these broad plan- Democratic
Chairman- . of the
ning operations that the Bureau of House Appropriations Committee
the Budget tests' and examines took the floor to admonish the
specific plans and proposals.
membership in an unprecedented
Strength for Tomorrow's Tests
w« are ent«ri"g into a-period of
great economic growth-and vital-

serves
him by testing each new jty. Our population is increasing
proposal, questioning its assumptions, judging its probable effectiveness, matching it on its merits

over

siderations, and in part to emphasjze ibai; program planning in the

very

Bureau

local

ment spending to accelerate recovery will not be necessary. So,
we believe we can narrow the gap

represented by this year's deficit,
Qur standards for the budget
'sMct, of sheer
^
nQ tj'me for ,he Feder^

necessity!

• _grant $100 monthly pension to hospital

veterans

SSffi these Ulustrations in part to show

w"e

sur-

denounced because

are

we

a

defi-

should improve considerably. By
the same token, further govern-

.

broad administration goals,

concerned.

budget shows
cit, the public protests.

Now we are getting ready to
send up the budget for 1960, as
soon as Congress returns in January. We don't expect to leap from
a $12 billion deficit this year to
a balanced budget next year. It
takes time to work our way back,
But there are hopeful signs.
The recovery in the economy is
real and it : will- continue. If
present tax rates are held firm,
receipts in 1960 from individuals,
corporations, and excise taxes

nevertlSc

—

we

;

Budget Policies for 1960

.

usct° the Pi esident.
The Presidents job is to make
ager, the controller, or the budget decisions, to choose carefully
officer
whatever the keeper of among
the flood of alternative
thQ. purse is called—is going to proposals that-, come to his office,
take last place in a
popularity Basically, he has a set of objeccontest;
This
is
certainly
true tives, expressed in laws, or in
When the

.

ti y. And so on.
These unforseen increases in the Government
to
expand
going
These legitimate, but often com- costs Qf government have come at services or begin new ones, unpeting, demands have to be a tjme wben the Nation also wants less they meet the most stringent
weighed and fitted into a balanced
Spend money for better educa- tests of need. We will again search
governmental effort which the tion jn the sciences, for the de- for ways to reduce current costs.
taxpayers are able and willing to vei0pment of atomic reactors to We will again request the necessupport. The budget is a plan an produCg electric power, for safer sary legislation to turn over to
instrument for expressing a work air transportation,- and fon ex- State and local governments those
program for a given period of ploration in outer. space. All of Federal services that can be pertime, in terms of priorities and these expenditures add to what formed equally well or better by
s
available resources. In this sense, government is already doing; they other levels of government. We
Now my experience is that al- it is obviously much more than a d0 not substitute for going pro- will press again for user charges
mos^ every agency proposal in- bookkeepers set ot accounts. It is gTams And their cost is high.
to, make special Federal services
volving an increase in the budget a dynamic program, summing up
- „ -;i
-s.r-- ■
?*
pay their own way. We will seek
is usually backed up with a good the collective leadership of a
Pressures for Higher Spending . the cooperation of every Federal
case. There is always some need President and his administration,
jn ibe face 0f what has hap- agency in adopting more efficient
that
would be nice to meet, if and subject4 from first to last to pened to the budget that we methods of doing business. }ye could. I suppose that 75% of the power of the Congress to ap- thought was going to be balanced, . ~
„ '
the ideas lor increased expendi— prove, revise, or reject it,
oven
Greater exoenditures * are
our ResponsiDility and IVIine
tures that originate down the line
1 will not leave you with the
o
rrtly betag > All that I have stated reflects
IP ^be agencies never rcach the impression that the Bureau of the urged upon us. This year in Con- my conviction that we must go
Bureau of the Budget. They are Budget contains all the wisdom gress there were bills before com- through a period of serious soulscreened^ out before they get to needed to work out these priori- mittees that would
J;;./
- searching, if we are to put our
us, because the agency heads know ties< you know that the basic oblaunch new nublic works at financial affairs in order for the
the budget-problems that face us. jectives of our national security 0 ro t of Si4 billion over five tests our country faces in the
And we realize that the proposals system are worked out in the Na- v«nro,
coming decades. Once we take
ibat do ge* thr°ugh to us are the tional Security Council, with thej
c '■ , ~ >
.
our foot off the brake and start
result of close review by top President as chairman, and with | ""77t?P ■ money for community rolling, we will find it very diffiagency management.
die Budget Director as a partici- facilities, at a cost or $2^pillion,
cun i0 siop_ Responsible governThe budget review process is pant Tbe economic assumptions
—improve farm income at a cost ment is disciplined government,
really a procedure for making underlying the budget are formu- of $36 billion over five years;
We must put this discipline into
choices. In spite of what you ]ated with the President's Council
—provide for food allotments practice in our Federal budget,
mjght thmk, it is not a process 0f Economic Advisers. Our inter- and livestock payments, at a cost
May I appeal, therefore, to each
with a built-in negative bias. It all national economic policies are of $3 billion each year;
•
of "you Federal and voluntary

In every organization, in or out
of.government, the business man-

Where

-

erops

s'ght *0 pay lor tnem.
It is true, in summary, that the
Bureau of the Budget works every
day of every week of every year
at budget and management, at
trying to maintain the government's fiscal integrity. I think that
is what the Bureau is supposed to
be doing.

bStt

lire Budget Bureau as

international a 11 a i is penditures rise/ In part, they are
higher because of greater defense
needs. in part, they reflect antirecession measures to accelerate
public works, extend unemployment benefits> and increase housing starts. And in part they are
due to higher costs of farm price
supports, as a result of bumper

behevej. if^^^^ward
I
anirnnHn/S
importance of. helping backward
T
nablon^ through all-out economic
alld cultural assistance. An educasound
r*" TI irifi
nH TTtW mfd
longer soun^
tional facilities and better paid
H is true that the Bureau ques- teachers were paramount. A mill«ons new expenditure programs tary man might put all these
when there are no revenues in second to the defense of the coun-

live that was.
v

rapidly, and in 20

years

should

exceed

230

million.

people

are

the*

move

on

to

It

Our

the

back money

people to share
in this
ask yourself

soul-searching and

how you can contribute toward
for. Federal spending and
through
getting the maximum
value out of the Federal dollars
whose spending you influence.
You are citizens and taxpayers
fir5t> and tbe Bureau needs your
SUpp0rt if it is to be effective in
su^es

serving

the

President

and

-

the

dressing-down. He said, to quote COuntry . .
. a .
him in part, "We are confronted . A
look forward to our
with an alarming dtuataon. And nation.s future growth and to the
the most claiming featu^e^f it
great blessings that can be ours—
that nobody is. alarmed. Then he ioKS ileanh leisure and above
added, "We have spent money J°?s' "eaitn, leisure and above
that we did not have and which all, peace and security — let us
will have to be • paid by our remember that tomorrow's profile
children, our grandchildren, .and is. being etched today in the

for^savings, members against alternatives, appraising its great urban centers. Research will
bhls
"0t °"ly extend li£e expectancy our great grandchildren for things judgment we Americans, employ,
its authority.
sidering it in the context of its but} on the industrial front, will we could do without." And, after ir* the decisions that we make,

too^^erfulf^nd'lntroduce
to

restrict
When

economy,

the

country

members

clamors for

of




Congress

free enterprise econo-

create new products and markets

blaming ■ the

and balancing its initial and

to sustain high employment. The

well

place in
my,

a.

as

the

administration
Congress,

he

as

con-

and in the responsibility that we
' ' "

accept.

Volume

Number

188

Continued

from

5772

.

.

.

The Commercial and Financial Chronicle

10

page

Devaluation of

1930's

As for his comparison with

1930's, who

Higher Gold Price Refutations
may

he

talks

where

"sagging,"

be

per

about

is

the

all

but

when

prices, just
Consumer

"sag?"

prices now above 123.3 in the ag¬
gregate are at an all-time high.
Food

prices

all-time

high,
120.8. Housing, 127.5, rents, 137.1,
transportation, 138.7, medical care,
142.3, personal care, 128.3, all at
record highs, and wholesale prices
in the aggregate, all commodities
at

an

in

March, 119.7, an all-time high.
Farm products, 100.5, highest since
1952. Processed foods, 110.7. And
farmers are doing all right. The
April 15 figures, 260, for the con¬
solidated Farm Price Index, high¬
er than any time since 1952 in the
middle

of

But

food

farm

on

do

prices.

want

we

and

Truman-Brannan

the

downslide

prices for

our

everything

jumped?

Is

that the way to cure

the claimed
savings of the
American people who
The

recession?
millions
have

of

in

accounts

savings

banks

and savings and loan associations
at

are

all-time high.

an

The

tion

uation

of

the

other

would put them

tive

position.

tion

in

the

currencies

in the

And

for "reduc¬

as

billions

rela¬

same

of

give-away

money," that surely we would like
to do, but how would this infam¬
ous

help? Wouldn't the
triple to
offset
the

measure

demand

shrunken dollar?

(6)

J

burden

of

The

debt

value

we

pay

the

on

national

would

be less in purchasing
but how about the disaster

power,

to
the millions
of
widows, or¬
phans, investment company stock¬
insurance
holders,
companies,

whose

stockholders

and

policy¬
holders run into the millions, and
who are owners of U. S. bonds,
also devalued automatically. Had
he thought of that? Imagine the
millions

of

thrown

people

suddenly

public welfare!

on

(7) Marking

For Many

up

of

ing

gold, marking down the buy¬
power of our present dollar to

34

would

cents

mark

our

down to 16 cents. What folly!!

way

don't

defend

subsidies, any of
them, but if we subsidize one
commodity, we simply put up its
price in relation to the dollar or
the

basis

the

of

commodities.
ent.

If

all

gold

is

dollar

in

relation

thousands

of

other

the

the

But

other

of

differ¬
subsidize gold, we de¬

we

bauch

value

We

modities.

to

No Way

the whole
standard of all values. Why create

this

for

bonanza

disaster of the

few

a

the

to

170 million?

He

(8)

national

of

labor

has

priced

some

manu¬

tent

farm

our

world

out of
emphatic¬

products,

markets."

I

But

Debt

that

suggests

the

"in¬

debt."

Yes, indeed, that

done, but again, what of
to the many millions
of people holding U. S. bonds who
put their savings into them at
disaster

hundred-cent-dollars, only to have
them

diating

Russia's

than

worse

the

interest

tional debt.

If

(9)

confis¬

savers?

"not

single

a

informed

economist in the world"
lieves the United States

urably

na¬

It's confiscation. And

what is devaluation except

the

repu¬

her

on

reduce

its

.

.

"be¬

.

debt"

"until the dollar is devalued,"
that devaluation of
God help our country!
I've heard
restore
that before, and perhaps you have.
our
competitive position."
Don't
But I suggest that is a sad com¬
you think that all of these nations
with
pegged
currencies
would mentary on the integrity of the
American people. Only crooks dis¬
very
quickly follow us and de¬
avow
their
honest
obligations.
value
their currencies
by twothirds?
Of course.
They did in Surely we haven't sunk that low!
1934!
(10) "Restoration of full con¬
Thus, would it "clear out
our astronomical surplus of farm
vertibility,
both
internally
and
products (at a loss of over $2 bil¬ externally" I agree is desirable
lion to Uncle Sam) and stimulate and practicable. But how would it
manufacturing,
conceivably
to "block the Russians?" I see no
boom proportions?" Is that what possible connection. Furthermore,
.

ally disagree

.

.

the dollar "would quickly

we

want? It's tantamount to turn¬

the dollar printing presses,

ing

on

as

was

with

done

the

French

I

don't believe the

any

idea of establishing

benefit

that have been devalued

the

sult of inflation.

re¬

a

It's another step

toward horrible disaster. And who

Those in

for it?

pays

income group,
fixed incomes,

lower

the

especially those

on

pensions,

etc. To
them it is real and stark disaster.

"Corporations

(4)
with

inflexible

ishing

struggling
and

costs

volume,"

he

dimin¬

"would
quickly have a resurgence of buy¬
ing" and "improving profit mar¬
gins." That I deny emphatically
Anyone who has traveled around
says,

in these countries where the beau¬

tiful
50

money

paper

cruzeiros

runs

thousand

100

and

or

disaster that

the

into

francs,

lira,

pesos, "knows
the
those business firms

have faced and struggled against.
What
he
claims
would
happen
didn't
1933

happen

until

poured in.

ply

didn't

1940

all

way
war

do

it!!

And

it

"

Exports,

step-up

from
orders

Devaluation itself sim¬

will!!

(5)

the

when

as a

he

claims,

never

9

would

result of devaluation.




convert¬

a

have

sufficient

repeat

the

50-plus

Administration

But

fective

they

from

dollar

with

large

holdings,
Russia!

the

in

gold

One

valuation

gold?

of

In

production

the

hundred

and

largest,

dollars

per

nearly triple
the
gold holdings in

of her

international
one

of

especially

would

ounce

devaluation

terms

to the
gold mining in¬
obviously the countries!

dustry,

trade!

Ponder

that

moment!

a

of

those

a

real

A

that

be

can

level¬

begin to match private enterprise in providing, the
good things of life.
^

material

ruinous?

Apparently,

Mr.

Continued from page

Speaker,

gentleman has given

the
thought to

no

the financial chaos that would
sult

from

such

devaluation.

The

management. In fact, one leading
New York advisory organization

immediately and they would have
put up more reserves with the

prints the motto, "Management Is
Everything," on the margin of all
capital its letters and reports to clients,
now totaling some $18 billion and
Behind
the
amazing .. record * of
insured for roughly
$1.8 billion growth and development of Rockwould
present
problems.
They well Manufacturing Company has
would have to put up enough to been an alert and dynamic mankeep their ratios in line and im¬ agement
group,
headed by its
Chairman
and
founder,
mediately, and from where could Board
to

Reserve.

the money come?
Fund

the

of

power

would

what it

be only
is.

now

in

tutions

The purchasing
Insurance

the
of

Col. Willarcl F.

Deposit

Fancy V the
chaos

Their

.

financial

vast

became President of the company

in

consternation

edness

insti¬

depression.

The

and

the

gloom

solid

vicious

and

great

must

economy

sound

into

to

be
have

attack

doom

of

howlers

is

we

are

disaster,
getting

and
more

and

signs of the leveling off.
at

a

little

lower

day

every

level

more

Perhaps
than

the

extreme peak of 1957, but a sound
and

stable American

economy.

fact

that

the

com-

operates 15 research
development laboratories,

and
em-

285 research and engimortgage companies, holders of
personnel. In 1957, this
fixed-price guaranteed bonds, de¬
bentures, and especially land con¬ program cost the company some
tracts and mortgages!
$3,300,000, of which some $2,000,-

ploying
neering

I don't know where this

side

"persistent

by

formed

(Russian)

Services

of

out

don't

it

Could

he

from

Intelligence
have

to

seem

Kremlin

in¬

Who

sources?"

purposely

it.

pipelined

to

get

us

to

currency? Maybe we

our

haven't
fast

be

the

destroy
as

reports

these sources? The

are

gentle¬

gets his information from in¬
Russia. What does he mean

man

debauched

our

currency

Lenin

predicted when
outlined the way to conquer a
as

nation!
I

Mr.
Speaker, that
about the worst thing we could do
suggest,

this time would be

at

to

devalue

the currency.

000

Pfd. Stock Offered
A group

of underwriters, headed

Cruttenden, Podesta & Co.,
Chicago, 111., today (Aug. 28) are
offering publicly 300,000 shares of
by

35-cent convertible

preferred stock

(par $4)

of Arnold Altex Alum¬
inum Co. at $5 per share.
issue

new

of

is

stock

common

1 %

shares

each

convertible

at

share

sinking fund.
able

at

$5.50

It is

the

of

their

an

of

James

signment

From

be

funds

used

and
for

accounts

warehouse

ratio

the

purchase

equipment

and

general corporate

of

of

standing
issue

the

only

were

sold

$18,000,000

owns

more

of

than 81%

Automatic

Company

our

confidence

support the company's dividend.*'
It is a fact, moreover, that Rockwell

Manufacturing

characteristically

a

Company is.
"fourth quar-

ter company," having reported its
best earnings in the fourth quar-

ter almost every year.

Conclusion
In

a

nutshell, here are the main

why Rockwell ManufacCompany common stock
attractive to me:

reasons

(a) Its management
progressive.

is

proven

i(fe)

duct aQ(J

It has
Hi versification

customei dueiSltica„on;

„

(c) It is m excellent financial

condition.
(d) Its near-term earnings outlook is bright, and the dividend
secure.
At 40, the stock
appears
reasonably priced, provides a good return, and possesses
growth potential,

seems

of the stock

Machine
of Jamestown, N. Y.),
Voting

c

.

,

«

n

With Zillka, omither oc
(special to thk financial chronic",)

and

Statistics
Per Share

,

ac¬

Net

Net

S«les

Income

Income5

1956
1955

82,947

1954

76,470
83,301
85,855
99,333
71,542
60,678
70,540

1952

1949

1948

$40,000

Net

$122,388
114,753

1953

for

for

"indicated

leave a cash balance of apPORTLAND, Oreg. — Jack P.
proximately
$9 000,000
in
the Reverman
is
now
with
Zilka,
treasury. Part of the surplus cash
o~,.+u
will go to finance construction of Smither & Co., Inc., 813 Southa
new
plant in Germany, which west Alder.

1950

balance

is

20-year

privately last June 22.
As a result of this financing, the
company was able to retire all of
its bank debt, pay for its most
recent acquisition (Rockwell now

receivable

$4.37
4.36
3.47
2.92
2.90
2.98
3.43
4.09
3.03
2.99

$9,648
9,358
6,794
5,724
5,673
5,838
6,700
7,949
5,891
' 5,819
o

$2.20
2.20
2.00
2.00
2.00
2.00
2.00
1.70
1.15
0.75

/-Market Data-*

\

Dividends

.

High

48

46%
37%
35%
28%
29%
30%
24%
19%
10'j*

share are stated on the basis of average number of
standing, and are restated to give effect to the 4% stock dividend paid in
1956.
These figures, as reported in the company* IH.j. Annual Repoit,
♦Earnings

.

purposes.

the continuance of the established
rate

that earnings for the year would

out-

capitalization

senior
of

The

1.

to

6.9

1957

additional

dividend at the*
regular 55<£ per share rate through
the first three quarters of thist
year. In commenting on dividend
policy in his June report, Willard
F. Rockwell, Jr. pointed out that

quarterly

ailQ

4% sinking fund debentures which

as¬

receipts;

a

maintained

have

directors

their

the

reassure

nnanoiaUtondpoint the
company
is
in
excellent shape,
with
a
current working capital

borrowed
on

the

a

redeem¬

Talcott, Inc.,

of

should

which

"outside" investor.

annual

jplus

a

the

was

seems

This is certainly

company.

fact

Of the net proceeds of the stock

repayment

have

.

first two quarters of 1958
considerably lower than thatreported
for the corresponding:
periods of last year. Nevertheless,

0f

luring

crued dividends.

from

families

,

,

With regard to recent earnings,
it is true that net income for each

the

of preferred

also

sale, $1,150,000 is to

immediate

in time will give Rockwell Manufacturing Company a nucleus tomanufacture and sell its domestic
lines
to
continental
Europearr
markets.

substantial stake in the future of

common

share,

per

initial

so-called

to

At 1.6% of net
sales, this amount is well above
average for a metal-working company like Rockwell.
Owning some 40% of the 2,305,938 shares outstanding, the management group and members of

an

Arnold Altex Aluminum

devoted

was

"pure research."

1951

without

progressive-mind-

the

pany

land,
insurance
companies, investment trusts,

for

us

Further evidence of the

1945.

management's

and

our

and is entitled to

spin

Rockwell, and his

Willard F. Rockwell, Jr., who

son,

one-third of

stock

would

2

The Security I Like Best

re¬

banks would have to recapitalize

stock

as

'

Banks Would Have to Recapitalize

far

who

withstood

these

economy," is,

!

true

indictment, but it must be added that
despite all these "short-cuts" communism can not

or

only in the shoutings

our

see,

American

mighty

Jawaharlal Nehru.

recession, if you wish
it, a sound working our
way out by sane methods, rather
than by wild, frantic panic ges¬
tures

one.

are

call

so

rate

can

and

howlers

Isn't the way out of this
to

into

I

frantic

doom

and

ing off,

grasping

as

to

becoming ef¬

the

of

needs

a

definitely allied itself to an ap¬
proach of violence. Even if it does not indulge
normally in physical violence, its thought is violent,
and it does not seek to change by persuasion or
peaceful, democratic pressures, but by coercion and,
indeed, destruction and extermination."—

screaming.

for straws to arrest the downward

plunge in

taken

essential

.

"Communism has

wild spending orgies for which the

This

"hysterical

This

(11)

tainted

of

measures

has

are

without

gloom

ignores certain

associated with the

to
Does he

type

kind

some

"Unfortunately, communism becomes too closely (
necessity for violence and thus
the idea which it placed before the world became a

on

step up the economy and combat
unemployment are now having ef¬
fect.

it

-f

money

that

i

disillusion¬

kind of faith and

some

human nature.

suddenly

price of food.
to

because

so

kincis,
right into the

who

of

discipline. But in spite of its apparent success it
fails, partly because of its rigidity, but even more

I.-

Speaking of Russia, who would

addition

ment and offers

the wake

of

were

great many families

a

incomes,

ible ruble.

franc, the German mark, under
Hitler, and all other currencies
as

Russians have

there

in

comes

bonds of all

disaster

Actually, the

can meas¬

national

"Communism

■

disaster?

paid back in 34-cent-dollars.

That's

I agree that "the high cost

factured products and to some ex¬

to Reduce

could be

the

cating

(3)

fixed

Federal

crement created by the new gold
price could be used to reduce our

com¬

upset

dollars

many

government, and tax
people three times as much?

the

down

as

the

run

value of the prewar dollar all the
I

three times

need

to

.

can

of

would very

ounce

store sales and consumer

With 186% increase in the price

threw

teeth of

dollar's

the

of

we

policy-holder's
the savings

value

of investors in
and

a

how?

when

insurance

would

Just

1940

the

us

peo¬

department

money,

the

of

assets,

want

interest

as

approximately 10 million still un¬
It destroyed the value

gigantic national debt (and taxes)
bearable."

far

employed.

the

gold to $100 per
possibly "create
demand, a Treasury surplus of around $41,except, of course, for automobiles 000,000,000," as he
says, but how
and durable goods, are excellent.
would it "permit a sharp reduc¬
tion in taxes for many years to
Bonanza for a Few and Disaster come?"
Don't you think we would

ple have the

until

sion

cover

become

As

all it did was to raise prices
drastically, stretch out the depres¬

didn't

"The intolerable

Yes and More

the.

call that devalua¬

can

success?

a

see,

There again the immediate deval¬

25

(825)

i.

_

j

rrf

Lew

35
34%
31%

22%
20%
24%
22%
18

10%

per

roirl

in

hnnarf

lift#.

Dec ember,

(826)

Continued from

Simonds, partner of G.
H.
Walker
&
Co., Providence,
R. I. has been elected a director

The State of Trade and

of the Worth Fund, Inc.

while the

Richard

The

pany,

First National Bank Bldg.

Hay

(Special to The Financial Chronicle)

PORTLAND, Oreg. — Sidney C.
Leo has become affiliated with

Bldg.

With E. I. Hagen Co.
PORTLAND, Oreg.

Level

production

downs.

Aug.

ended

week

22,

1958,

'

Last week's

output totaled 25,925 units and compared with

car

Dodge factories

88,052

units,
Inactivity at Chevrolet and
primarily responsible for the large cut the

was

cut

reported

that

United

States

manufacturers

week's

Last

have

week by 33,752

estimated

an

j

tons, "Steel"
Monday of the current week. Output will
be a third higher than the 82,000,000 expected this
year and only
slightly under 1957's 112,700,000.

Aug.

to

strike

auto

an

to be the style.

seems

is

already

putting

on

the

last

the UAW contracts are signed, steel producers can
rash of orders—and not, only from automakers.
Other

gamble

cut

inventories

the

to

bone.

big orders, it will be unsafe
quick deliveries.

on

When

for

the

other

If steelmen are to turn out 82,000,000 tons this
year,

Last
half

7,750,000 tons

week, furnaces

point.

a

District

are

as

"

involving liabilities under

dipped to 25 from 35
week of 1957. Liabilities

$5,000,

in the corresponding

and 42

week

excess

compared with 29 in the preceding week.

$100,000

incurred by 28 of the failing businesses

were

casualties

rose

to

from

41

32, wholesaling

to

from

The South Atlantic States,

reporting 30

as

against 10 last week

Central States,, up to 14 from 5, accounted
for most of the week-to-week upturn. Tne tolls in New England

they will

and

the

West North

and

the

Mountain

States

also

edgea^

slightly.

up

On

the

other

hand, four regions had fewer casualties during the week; Middle
Atlantic failures dipped to 91 from 93 and Pacific to 63 from 73.
In the East North Central States,
the toll held steady at 39.

They

at 61% ot capacity, up
1,647,000 net tons of steel.
Wheeling at 80% of capacity, up

operated

Regional trends from 1957 were mijxed with four regions reporting
higher casualties, four reported lower totals and one had no
change.

6

points; St, Louis at 77, up 2.5 points; Chicago at 73, up 4 points:
71, up 1 point; Cincinnati at 72.5, up 0.5 point;
Detroit at 69.5, up 1 point; Eastern district at
61, up 1 point;
Cleveland at 53.5, up 0.5 point; Pittsburgh at
52.5, no change;
Birmingham at 52, down 1.5 points; Youngstown at 49, down 4
points; Buffalo at 47, down 4.5 points.

.

.

the

aoout

was

follows:

&

previous week and among manufacturers to 49 from 59. Neither
retailing nor manufacturing groups had as many failures as a
year ago, but in other lines mortality exceeded the 1957 level,
with the most noticeable rise in wholesaling.

to

month, operating at 66% of capacity.

were

Production

rates

a

preceding week, Dun

the

21, wnile commercial service edged to 28 from 25. In
contrast, the toll among retailers dipped to 121 from 125 in the

During the first eight months, United States steelmakers pro¬
about 51,000,000 net tons of steel for ingots and
castings.
June's output was the
highest at 7,130,000 tons, with operations at
61.7% of capacity.
have to make 31,000,000 tons during the next four months.

in

262

as

33

auto¬

users

Slightly Upward in Latest Week

in

duced

must average

21, from

Aug.

Construction

When

have

ended

failures

delivery from the mills.

release

Unfilled orders amounted
above; shipments 1.8%
the previous week and

above

Jplace among casualties with
liabilities of $5,000 or more. They climbed to 247 from 227 in the
previous week and 218 a year ago.' On the other hand, small

are in the market, they are not releasing
as rapidly as usual.
Ordinarily, they would consider cur¬
inventories of 20 to 3Q days grossly inadequate. Instead of
adding to their supplies now, they are depending on three to

consumers

new

All of the week's increase took

rent

makers

the

to

period

tinuing above the prewar level, failures were 3% higher than the

to a jarring halt.

a

above the like week in 1957.

3.9%

were

according
same

3.7%

was

31.0%

orders

new

the

In

production.

Production

and

1939 total of 264. '

orders

expect

above

of stocks.

below

week

Although automakers

weeks'

15.9%

were

44%

production,

Barometer."

Trade

Bradstreet, Inc., reports. Casualties exceeded the 260 occurring
in the comparable week of last year and the 215 in 1956.
Con¬

recovery. It is holding up some orders for steel from
automakers and delaying purchases of steel and other material
from those who supply the industry. A walkout would
bring the

five

reporting mills in the week ended

above

Commercial and industrial failures "rose mildly to 272 in the

business

recovery

Lumber

1.7%

Business Failures Edged

However, the

the brakes

were

steel

October
a better month than
September, probably the best of the
Shipments will remain at a high level during November
and decline only slightly at year-end.
improvement

1958,

16,

orders

year.

of

Shipments Rose 1.7% Above Production in the

"National

will be

threat

Lumber

,

year ago.

a

Week Ended Aug. 16, 1958

sharply improved performance will result from rockbottom steel inventories,
an
anticipated upturn in consumer
spending, rising Federal spending and world unrest, the metalworking weekly commented. The improvement is starting now
and will accelerate in September and October.

Gradual

and 20,491

Lumber shipments of 472

The

in

reported there were 8,676 trucks made
This compared with 12,976 in the previous

Last week the agency

week

on

Leading producers forecast a gain of at least 20%
shipments in September. Barring an automotive strike,

below that of the previous

output declined

car

units, while truck output dropped by 4,300 vehicles

during the week. In the corresponding week last year 123,130 cars
and 20,491 trucks were assembled.
'

Steel production next year will reach 110,000,000

magazine predicted

of; the previous week's output, states

units under that1-

"Ward's."

Steel Output Expected to Rise Further This Week

"

the

for

according to "Ward's Automotive Reports," declined to its lowest
level in the more than 10 months, due to model changeover close¬

in the United States.

<

10-Month Low
1958 Model

Output and Geared for 1959 Cars
Automotive

was

2,726,820 cars to date, down 36% from 1
the like period a year ago when output stood at
4,272,635 units.
Output of 553,249 trucks this year represents a 25% fall from
last year's figure of 740,084 units.

V* feeling very

a

Most Manufacturers Ended

as

below the

18.7%

143,653 cars, or

59,677 (revised) in the previous week. The past week's production
total of cars and trucks amounted to 34,601 units, or a decrease of

turned

American Bank Building.

625.991

Truck production the
past week was estimated at 8,676
down from 12,976 the week before.

"Ward's"

Jack R.

—

Bratlie is with E. I. Hagen & Co.,

1953 totaled

16,

Aug.

Automotive Production Last Week Hit

past week.

(Special»to The Financial Chronicle)

ended

1957 week, and a decrease of
corresponding week in 1956.

provided by six
producers, Buick, Plymouth, Ford, Edsel, Mercury and Lincoln.
Plymouth concluded 1958 model operations Tuesday in Detroit.
Ford Motor Co.'s car lines will stop for model
changeover in
September.

Field & Co. Adds

Field & Co., Inc., Cascade

total

car

week

decrease of 124,649 cars, or 16.6% below-the corresponning

a

cars,

car figure two weeks
ago was placed at 59,677 units,
corresponding week in 1957 showed 123,130 completions.

"Ward's" noted that last week's

the

Loadings for

noted.

Investment Com¬

7,411 cars or 1.2% above the preceding week.

were

Assembly of 1959 models began last week at Buick, ''Ward's"
Scheduled to join in 1959 production this week are Dodge,
Be Soto, Chrysler and
Imperial factories in Detroit and Rambler
in Kenosha, Wis.

A. Gordon has become associated
with

Industry

The total

(Special to The Financial Chronicle)

Week

Loadings of revenue freight in the week ended Aug. 16, 1958

since the week ending Oct.
5, 1957, when 21,975 units were assem¬
bled in a previous
changeover period.

Joins Hay investment Co.
—

Thursday, August 28, 1958

.

Previous Period but Were 16.6% Below Like 1957

Clarke

ZANESVILLE, Ohio

,.

Loadings in Week Ended Aug. 16 Rose 1.2% Above

Car

5

page

■.

Chronicle

The Commercial and Financial

Simonds Named Director

C

.

.

26

Western district at

?9 String you wamt

"Steel's"

composite

on

held at $41.33

scrap

a

gross

ton last

week.

Current price levels are meeting resistance and steel mills
have not made any big purchases.
The

American

operating

rate

of

Iron

steel

and

Steel

Institute

companies

will

announced

that

the

*106.9%

average

of steel
equivalent to

capacity

Wholesale Food Price Index Registered Further

I

Declines in Latest Week
wholesale

The

than the $6.29 of the

cocoa,

similar date

is to show the

The index

represents the

checkup yearty)

duction
was

1,561,000 tons.

month

ago

A year ago,

placed at 2,103,000

tons,

or

the rate

*97.2% and

was

pro¬

the actual weekly production

total of the price per pound of
use and its chief function

general trend of food prices at the wholesale level.

Held Close to Level

Of Prior Week

creases

decreases

in

some

the general
The

130.9%.

sum

Wholesale Commodity Price Index

Price
a

ago.

foodstuffs and meats in general

raw

week before.

For the like week

yeat

Lower in wholesale price were flour,
hams, bellies, lard, cottonseed oil, eggs

140,742,570 net tons compared with actual production of 62.6% the

a

a

higher the past week were sugar, coffee,

oats,

rye,

*105.2% of capacity, and 1,690,000 tons

week ago.

Brad-

potatoes and steers.

wheat, corn,
and hogs.
31

a

price index, compiled by Dun &

Commodities quoted

for the week beginning Aug. 25, 1958,
1,717,000 tons of ingot and steel castings (based on average weekly
production for 1947-49)
as
compared with an actual rate of

Output for the week beginning Aug. 25, 1958 is equal to about
63.6% of the utilization of the Jan. 1, 1958 annual capacity of

food

street, Inc., fell again last week. It stood at $6.49 on Aug. 19,
down 1.2% from the $6.57 of the prior week, but was 3,2% higher

in

cotton,

coffee

and

steel

scrap

offset

in¬

livestock, rubber and sugar the past week, leaving

commodity price level close to that of

week earlier.

a

daily wholesale commodity price index, compiled by Dun &

Bradstreet, Inc., stood at 278.36 on Aug. 18, compared with 278.69
be cured If

cancers can

'■Index of
for

In time. That's why

important for

you

to have

a

t

well

you may

feeL

and power
was




prior week and 293.00 on the comparable date a year ago.
big harvests and the anticipation of a noticeable
in commercial supplies discouraged grain trading last
Prices were close to those of a week earlier. Purchases of

Electric
•

as

Output

last

distributed by the electric light

kwh.

463,000.000
registered

below

kwh.
an

week ended

week

declined

from

its

all-time

cooler weather set in.

For the week ended Aug.

that

above

increase

of

that
of

Aug. 25, 1956.

23, 1958 output decreased by 365,previous week, but increased

in

corn

the

comparable

1,146,000,000

kwh,

1957

above

week

that

of

and

the

buying, causing prices to slip fractionally.

oats and soybeans

Prices on rye,

remained at previous week levels.

Reports of record wheat supplies held trading in flour

below

prior week and prices fell moderately. Rice supplies were
again limited and buying was unchanged, leaving prices close to

the

those of

the
of

flour mills lagged and wheat prices held steady. Reports
growing areas resulted in a dip

of favorable weather conditions in

industry for the week ended Saturday, Aug. 16, 1958,
at 12,851,000,000 kwh.,
according to the Edison

Institute.

high level

week.

wheat by

estimated

000,000

AMERICAN CANCER SOCIETY

in the

Forecasts of

The amount of electric
energy

each and every
matter how

weekly production

Ail-Time High Level As Cooler Weather Set In

pelvic examination for

year... no

average

Electric Output Receded Somewhat From Last Week's

chest x-ray for men and

women,

on

increase

thorough checkup, including
a

production is based

1947-1949.

a

week

Although
can

nations

an

earlier.

the Latin Ameri¬
stabilization -scheme, coffee
The expectation of an
transactions the past week.

agreement was reached among

regarding

an

expanded

trading lagged and prices fell somewhat.
increase

in

supplies curtailed

cocoa

Volume

188

Number

5772




,

..

The Commercial and Financial Chronicle

Stress Is Placed

on

Savings Bankers

To Attend ABA Fall Convention

28

The Commercial and Financial Chronicle

(828)

Continued

Financial Institutions Act

from page 16

Another

legislative

"Revival of the Inflation Peril77
declin¬

instead of levelling off or

the cost of living will con¬
tinue to inch upward painfully,
to the distress of tens of millions

ing,

of American consumers.

inflation

further

about

dependent upon the attitude
American consumer.
Will
the American consumer be will¬
the

ing to buy at higher prices?
Or,
even if: he is willing to buy, will
he be able to buy at the higher
prices?
don't pretend to be a

Gallup
pollster, but if I had to make a
wager, 1
would say the average
American family today is more
concerned about rising prices than
it is about anything else. If this
I

higher prices
is
into a buyer rebel¬

over

concern

.transformed

lion, then the recovery from the
recession may prove very short¬
lived, indeed.
suggestion of a buyers' re¬
original with me. It
by President Eisen¬

The

bellion is not
made

was

hower last week at his press con¬

the same

ference.

At

ference,

the

news

con¬

President also held

out the

possibility of Federal con¬
trols if prices and wages continue
to go up.
Drastic as these steps
.appear to be, no responsible per¬
son should rule out the possibility
•of the eventual imposition of con¬
should

trols

prices

and

wages

candidate for pub¬

lic office over another.

that it is wrong for a

cannot see
savings and

loan association to provide

its

sav¬

with information, guidance and
on matters that

ers

recommendations

affect the value of the
that have been placed in

savings

its hands for

tion

for example, to cau¬
be careful and

to

savers

our

prudent in their purchases and to
on receiving as much value

insist

possible for each dollar spent?

as

it

Is

wrong to suggest
have a balanced

should

budget since

that we
Federal

Federal deficit ul¬

a

timately breeds further inflation?
Is it wrong to suggest in a time
of inflation that credit terms may

made

to

acquire status and

pres¬

tige.

We ha\ve had to fight every
the way for what recog¬

inch

of

nition

have received.

we

It

seems

to me,

achieve

to

greater prestige and public recog¬
have

we

before

ever

•achieved.

identify

can

in

nothing
do

the

else

the

of

fight

could

we

standing

with

the

as

American

on

enhance

to

more

and

themselves

allies

principal
people

loan institutions

and

inflation,
do would

our

the

prestige

American

people.

the

inflationary tide.

banks
banks

for

look

cannot

leadership

from

because

the

this

effective
of

blows.

the insurance

only

the

efforts

companies have

remote

long-dis¬
tance relationship with its policy¬
a

or

and

in Anti-Inflation Fight

Thus, a vacuum of leadership
exists in this important
area, and
the savings and loan business has
the tremendous

opportunity to. fill

Of

vacuum.

ple

savings and
that combat¬

some

loan people will say

ting inflation sometimes can get
pretty controversial because the
procedures

necessary

to

effec¬

tively battle inflation often border
"on politics.
Certainly I agree that
it would be extremely poor busi¬
ness
judgment and in bad taste
/or any savings and

tion

to

support

advise
one

its

loan institu¬
customers

political




inflation

Christmas

of

is

yet

to

series of prolonged

a

peo¬

to expect — and even
important—to act upon the

come

more

expectation of higher prices.
that

When

tions

Some of the pro¬
Financial

the

in

mostly
to
administrative
the Federal
Board

Bank

Loan

Home

Institu¬

referring

Act,

procedural
and
improvements in

the

and

Federal Home Loan Bank System
were

desirable and

liked

have

to

this year.

we

would have
enacted

them

seen

However, we were not

party

to

over

sarcasm

do

believe

result

of

the

and

optimistic

its

about

be accepted

ing

Bill.

loan

the

after

even

passage of all these,

Eisenhower Administration.

people
they
that rising prices will not

can

so

the

purchasing

their income.

as

of
happens,

power

When this

"creeping inflation" has' become
"galloping inflation" and the
threat

to

the

existence
institutions

very

loan

and

Reviews Legislative
I would like

status

of

now

a

bill

that

was

Here

essentially a

proposal to bring a private enter¬
prise flavor into high percentage
home lending — a bill supposedly
in accord with the alleged private

sympathies of the current Repub¬
lican Administration. And yet, this
Administration
particularly its
housing agency officials with the

good chance
contributions

of

that
of

of

the

White

House

—

used

every tool in the book to beat us.
I cannot understand
it, and I
have

told

gressman

it.

my
Republican Con¬
that I cannot understand

There is

mo

an

nature, something of
optimist, and perhaps it is my

bad

12%

debts

of

total
have

dends

before

savings

to

permitted

and

5%
for

this

on

and

it

of the

One

true

be

fort

League
scious

tention

officials
of

of

these
our

in products
war.

why this can

large research ef¬

Radio

is

this

proposal

status, and
are

to

be

continually

are

we

to

improve the

should be improved and if
to

do

a

better

job

of

we

is

certain

a

be

to

factor

amount

of ignorance. In going

around the
country,
the
managements
of
some
fairly sizable companies
complain of their inability to have
research and really forward-look¬
ing development done. What they
do
not realize
is
the
post-war
growth of facilities to serve them.
the Mellon Institute, Armour

To

Institute

Memorial

Battelle

and

have been added many others. To
a
few, the Midwest^ the
Southwest, and Stanford Research

name

Institutes
son nel

visit

diversified

with

facilities.

and

On

a

per¬

recent

financing

American housing.

Research

Stanford

to

they

working on some rather
fundamental things for electronic

were

special airplane an¬
tennas and a computer to handle
components,

Research is

of

one

the

future, and industry
\to science and
to

sponsored
so

keys to
Owes

a

science

the armed services
one could talk

by

many

ways

night about them.

There is

pending in

which should make it

feasible for business to carry

somewhat
search

of

more

burden.

in

our

basic

the

Let

us

re¬

hope it

common

is

national

interest.

Let

It is

us now

one

Considered

consider automation.

of the keys to the future,

For all the

properly regarded.
As I see automation, I am both¬
ered by the lack of imagination
it should be noted that a couple and
judgment
frequently
dis¬
of positive goods have been ac¬
played as decisions are made in
automation.

Accomplishments

building

con¬

Second, these same members of
Congress also realize
as
they
tended to forget in the past—that

The

re¬

present tax status
is the first and paramount legisla¬
tive objective of the U. S. League.

to seize the GI home

agency

To to be sure, a
not form

straws in

a

better America.

important

lending is the most

single

s e g m e n

tr ot

Often

then it is a

the wind,

friendly wind than

more

felt for

some

we

the'Future
there

since
times.

large

were

fasten

down
■'

■

entirely different field,
the country's leading li¬

an

of

brarians

speaking in

Washington

noted the lack of imagination

of

job for a large
which thought it needed
punched card reference system

consulting

a

company

the

in

Analysis

library.

that despite

showed

the glamor of the

results.

faster

Further,

since the

librarians could browse just a bit
in

references, they
sometimes catch errors in

pulling

could

the

codification, which the machines
lacking judgment could not de¬
tect.
I hasten to say

I am not an op¬

ponent of automation. But let us
think about it. Let us not plunge
blindly

or

be stampeded.

Sometimes it is efficient to re¬
strict judgment

in the interest of

cost, if

retain flexibility.

we

three

The

can

axis numerical control

systems for profile, contour and
skin milling is a case in point.
Here we have eliminated costly

the

At the same time we
one
judgment,

substituted

have

design engineers, for multiple

judgments, those of machinists on
the
line.
The
objective
digital
codes
trol

of

the

tapes precisely con¬
duplicate
operations.

truly

not un¬

duly costly or delaying.
Second-Thoughts

Automation

the other side of
fenced a recent FORTUNE ar¬
ticle pointed out that management,
the "front office," was guilty of
Jumping

on

the

not

tolerable

on

the floor.

the article cites com¬

puters bought because the compe¬
them, with no thought

tition had
to the

programming to make com¬

puters pay off. The article is in¬
teresting and worthwhile reading.
Another

reason

for giving much

deeper thought to automation
in the

new

product

area.

eral

Motors, pointed

that

radically

dom

originated

example

of

this

furnish

pitfall.

An

an

in¬

teresting radio production line ap¬
peared around 1947-48. Three men
duced

a

table

machine

which

pro¬

radios

ready to ship
incoming raw
material parts. But when changes
in the model were needed, the
directly

costs

from

were

the

nrohibitive

lies

Dr. Haf-

stad, Director of Research,

hour, compute the amor¬
capital investment,
and forget flexibility.
friends

ma¬

two
good
reference
li¬
brarians could
actually. produce

chine,

our

the pounds of hardware

British

and

judgment in information handling.
He cited one case, for example,

tization of the

Our

have

we

timp.

per man

handled

—

conventional

on

few threads do

pattern, but if they are

a

For instance,

frustrations in

complished.

Housing

loan program.

waste
Automation

be

between

the

of

And changes in set-up are

legislation

area

some

may

resemblance

opposition

templates.

bank accounts.

are

your

fully

threats.

Congress

Agency to our loan guarantee plan
and the continual efforts of the

a

Corporation.

another

which

noted

passed,

have

First, a number of key members
the Curtis Bill will
inevitably be \ of Congress now understand, as
thrown into the hopper next
they
have never quite understood
year
and years following.
Actually, we before, that the savings and loan
face the continuing
task, year in business constitutes a great pool
and year out, of
warding off at¬ of energy, ability and money for
tax

reasons

the

of the

There

fences

us

our

is

their

of

of the

listed at the end

not

eyes

on

80%

that

business last year was

debt

should bear in
mind,
however, that proposals similar to

tacks

revealed

RCA

more

now

the

noted
the

one

of

statement

annual

recent

that

true

be

of

15

page

Cites RCA Example
A

the

intervention,

year.

of

from

pro-

think

to finance

up

the House hinted at this when he

In

I say that because it is impor¬
tant for everyone in this business
to understand
that our political

certain that there will be

action

housing

a
at

changeable throughout the whole
of this engine family?

the tax

and

taking
look"

didn't

he

set

getting tired of the empire-build¬
ing and grabbing tactics of the
Housing Agency. Chairman Rains
of the Housing Subcommittee of

Three Keys to

the White House stepped in.

pur¬

the

disappointments and
the fight over the
all-out effort to' Joan guarantee program, however,

defeat the Curtis Bill
appears

Continued

to

me

"second

government

some

in

from

leads

long last, Congress

much-needed

all

of deduction only those divi¬
of 3% or less.
We made a

determined

no

taxes

that

be on the verge of

may

for the White House

conventional loan to the extent it

for

also

may

same

by

am,

the proposal would have been ap¬

reserve

but at

It

members

.

I

incidentally, that had it not been

mended if

our

the

was

This may be only a start,
least it is a start.

doubt in my mind,

would

reduced

potential
institu¬

been

—

the defeat of the Curtis Bill which

have

our

previously.

case

Committee and then passed by the
Senate.
We had the votes—until

to review the

the

private

housing problems than

proved by the full Senate Banking

legislative program
in Washington. Our Number One
legislative objective in 1958 was

to

that

—

had

luxury homes.

discussion

given

tions will be given greater weight
in the Congressional consideration

is

our

end.

direct

a

guarantee plan, there is, for
first time in two decades, a

of

Program

an

as

extended

the Hous¬

on

Howevei,

by

that

consideration

for insuring the top

program

the Senate conferees

aid

happens,

spend their money hs fast

All

course,

information

recurring price increases,

poses

this

vig¬

day when people lose their
natural tendency to expect con¬
stant prices."
The article points

would

holders.

Vacuum

visions

happen, it would
sav¬

insur¬

are

lost much of their impact—in part
.because
an
insurance
company
has

League
down the drain.

was

obvious.

But

that

sure

inflation

-

"ghost

commercial
The

not

am

characteristic of

sive

savings

willing to
make the fight and, through their
Institute of Life Insurance, the in¬
surance industry has struck some
ance

S.

on

obstacles, the"
plan in the future still faces the
and
education programs among
possibility
of
a Presidential veto.
their customers and for the bene¬
Frankly, I have been astonished
fit of the public. An article in the
and shocked oy the all-out, nocurrent issue of Business Horizons,
holds-barred, opposition to the
published by Indiana University,
plan that was displayed by the
points out that the most apprehen¬
anti

orous

commercial

too timid.

are

companies

They

receive

or

the

U.

unfortunately, a
the part of the
has been washed

Act,

effort

on
the floor.
We were
optimistic that if the plan
passed the House, which did not

alternative but to undertake

reduce

Certainly the American people
crave
leadership in the fight to
stem

of

also

Inflation's

of

out that after

If savings

lot

guardedly

ings and loan institutions have any

come, a

than

the death of the Financial

With

$30,000, Senator Clark of Penn¬
sylvania observed—with a trace of
FHA

I

to uoost the

came up

maximum FHA loan from $20,000

Federal Government is at
But

purposes.

into

proposal

housing and home finance by the

such

on

it has placed its savings.

where

and

nition

this legis¬

the

the

opportunity

this year—which means

lation is dead for all intents and

intrusion

hearings, when

the recent Senate

to

of
subjects appraised value. The proposaFwas
past two years land their included in the Omnibus Housing
growth lias been among the most Bill approved by the House Bank¬
rapid of any institution in the ing and Currency Committee. Be¬
country. Apparently it is true that cause, of the strong Republican
the public likes forthright financial support we received in the House
counseling from those institutions Banking
Committee,
we
were
ads

ing attitude is coming from liberal
minded members of Congress. In

encroachment

and

purpose.

encouraging, this question¬

Most

gest that the steady year-by-year

going to report this Act out

tee

newspaper

of

any

and wondering if some
have not wandered from

their original

is not

now,

20% of home loans up to 90%

after considerable thought
reflection, that the tremen¬
public concern over inflation
presents
the savings and loan
business with a great challenge
land

dous

buying than

Thursday, August 28, 1958

.

grams,

Banking and Currency Committee

into

cago—has been

Actually, I
have

our

building and

.

programs

the House

involved to go

mind—the Talman Federal of Chi¬

Institutionalization

institutions

efforts

be made toward private home

can

optimism

S. & Lr. Assn's Acceptance

the

only a short
step to the further recognition
that by modernizing the conven¬
tional loan, a greater contribution

belief that, at

for

is

the

reasons

entirely satisfied with the provi¬
liberalized, and that "tight sions the Act included relative to
money" may very often be good branches for Federal associations,
for everyone?
and we may have a chance to im¬
It may well be that your institu¬ prove this language next year.
tion will decide that matters such
The legislative item which re¬
as these are loo controversial and
ceived the greatest attention this
should be avoided. On the other year is, of course, the proposal for
hand, one institution I have in establishment ol' the loan guaran¬
running full page

From

finance.

it

the government housing programs.
I do not mean to imply or sug¬

For

passage

is familiar with

realization

of

Evils

With the Public

this

often have to be tightened instead

continue to spiral upward.

Most everyone

Committee
this
that arc too

Currency

Institutions

safekeeping.

Is it wrong,

before the House Banking

was

and
year.

On the other hand, I

are

of

or one

directly

all calculations and

To be sure,

forecasts

another,

Act

which passed the Senate last year
and

price increase, and (4) the
frenzied speculation in the stock
market—all tend to suggest that

steel

Institutions

Financial

the

of

home

American

important 1958
objective was passage
major

.

esneciallv

new

Gen¬

out last fall

products

where

one

sel¬

might

expect them. One easy to see ex¬

ample
razor

may

be

interesting—the

business. Straight razor man¬

ufacturers

safety

did

not

razor—The

devise

safety

the
razor

people did not automate the product

into the electric

shaver. New

•

Volume

Number 5772

188

.

.

The Commercial and Financial Chronicle

.

companies had to make the break¬
throughs.
considerations

Basic

.

dealing
thus

in

ourselves

in

provements
Will

then

we

stacles

the

im¬

products?

magnify

the

in

the ob¬
the intro¬

of

way

duction of truly new products?
One radically different type

munications

laboratories

problem

of

means

cramming

more

information

given

overall

while

retaining

has

and
into

more

circuits

circuit

parameters

transmission

fi¬

delity.
perimental

builds

one

equipment

ex¬

and

tries

circuit theories—but not this

sample

A

group.
corded

its

as

form

wave

speech

is

re¬

wave

form.

The

is

sliced

into

curve

suitable

units, and each unit coded
digitally. The coded message is
then
put into a 704 computer.
When

circuit

new

a

gested,

it

is

theory is

broken

which

rameters
704

are

into

sug¬

its

also

programming.

pa-

fed

into

The

output
from the computer are
as
magnitudes in the

numbers
recorded

proper sequence on magnetic

tape.
tape may then be played to
listen to the speech output or to

The

its

measure

characteristics.

The

suggested system is thus tried out,
least

at

in

overall

without

time

spent

apparatus.

on

and

performance,
being

money

speaking briefly

hoping to

through
through

pass

pastures. The arch
it, preserving the opening,

greener

above

has three critical

stones. There

is

science to generate new products.
There are costs which are the de¬
terminants of success in the

ketplace.

mar¬

Above

all, there is the
keystone, automation. For intelli¬
gently used, automation is the key¬
stone of the arch of
and

products

new

sales.

new

What is it all of

in the

want

us

future? We want to work
able

reason¬

hours

support
We

a

want

for enough money to
high standard of living.
enough profit in our

businesses

to

insure

these

things

into the future.

on

If

wisely plan and use auto¬
mation, we will succeed in reach¬
we

ing

our

goal.
'

•

Three

o

Less

Provided

•"

■-

,

'

we

Y

;•

Tangible

Keys

the

preserve

in¬

tangible arch which supports the
materialistic
we

wisely

humans
cannot

And

and

law-abiding

In

of

relations

em¬

still
sharp
differences
of
opinion between management and

structure.

use,

as

best

Provided
as

fallible

can, those powers which
be
built "into
machines.

these

unions regarding the

merits

featherbedding

practices, the
closed > shop,
or
of
wages for favored groups

compulsory
runaway

which

ruthless

are

their

economic

the

public.
to

comes

in

exerting
against
when
it

pressure

However,

the

ethical

questions of

honor and fair dealing, industry's
record is at an historic high. In
the fulfillment of contracts, writ¬
ten

and

tal

and

in

the

unwritten, between capi¬
labor

keeps

one

there

is

public's mind

from

is

labor

ever.

This

leaders

is

not

such

are

doubt

to

which

faith.

Yet

publications
vilification

much

as

no

as

better

the

some

there

because

as

times

labor

because

them

often

so

and

well

so

be

made

in
■

management have been too

or

great

to

require

the public
earnest

board
the

health

in

and

N.A.M.

meetings

solution

problems

of

some

industrial

of

safety,

our

the

hiring of
minority groups and handicapped
persons, benefit plans, steady em¬
ployment, etc. It would certainly
open their eyes as to the serious¬
with

ness

which

individual

seen

business

or

other economic

refusing

or

groups

to

take

against futile

or

a

polifirm

damag-

legislation foi fear of political
or

in®s,v;:•
In

a

<•

recent

quently
before

transient head-

(-'oro'•'•••
years, we have

seen

the

.few

industry

fre-

caving

combined pressures

in
of

view

airline executive not long ago.

an

business

their

The question was "Can you make
the DC-8 as quiet as the Boeing
707

is stated to be?" Douglas re¬

plied, "No, but we're working on
it." The airline man
responded,
"You've just sold $80 million of
airplanes. But we're not buying
airplanes. We're buying integrity."

confidence

of

the

Business

leaders

of

past genera-

ethics in America would be sadly

incomplete
paid
in

to

the

if

the

tribute

two

whole

America

were

greatest

moral

not

factors

climate

of

namely, the influence,
throughout our history, of our
churches and colleges. They are
—

The future lies wide open to au¬
tomation
based
on
imagination,

the

judgment and integrity.

the fires of idealism in

institutions

which

have
a

fed

material

world, and have guided and edu¬

Form Mannfield Co,
RAH WAY,

Company
offices
gage

at

in

Partners

has
635
a

are

cated

N. J.—Mannfield &
been

formed

Cora

Place

securities

with

to

en¬

business.

Morton N. Mann and

Jerry Fields.

With Christopher Corp.
CSpecial to The Financial Chronicle)

Fla.—Joseph G. Foley
is with Christopher Corporation,
Alfred I. du Pont Building.
MIAMI,




the consciences of all of

us.

In these days when new organiza¬
tions to "save" the American way
of

life

izations

•

Businessmen,

educators,

pthirnl
that, have
ethical rnnrbirt
conduct that
have nrovided
provided

the moral

tion.

background of

Only if all the
principles and
join together in

our

na-

above

of

2.55

3,474

the

n a

cents,

is
t. i

subo n

a

1

requirefrom

in-

revenues

from the textile

are

dustry; While these
shown

a

lor the 12 months ended June

revenues

in-

have

steady growth, the textile

proportion of total sales
lower than 10 years ago.
while

the

areas

is

much

a

dime in

by

each

later year,

It

might be mentioned however
that part of the current earnings
gain is due to an increase in tha
"interest: to
which

in

construction

the

latest

amounted to 10c

served

Southern

30.)

The dividend rate, which remained
at 80c during 1950-54, has been
raised

About one-quarter of industrial

dustrial

of the South,
industrial plants
costing $250 million were installed
In

resurgence

1956, 164

new

in the system areas; and

last year
plants with an investment of $28
million were built, plus expansion
0f facilities by
120 other plants
costing $86 million. During the
decade ending 1957, electric output increased from 7 billion kwh
to 18 billion, and over 2 million lew
new generating capacity was

added to bring the total to about
3.3 million kw. This capacity will
be increased some 44% by the end
of
1960,
according
to
present
plans, when installed capacity will
be 4,744,000 kw.
Southern

Company is fortunate
having
both
undeveloped

credit"

12

months

share compared

a

with 7c in the previous period. On
the
pany

other hand Southern Com¬
is still charging about 13c a

share for the amortization of plant
acquisition adjustments—purely a
bookkeeping charge, which should

disappear around the end of 1961.
in recent months Southern Com-

pany

jn

forces

for

in
bond
prices the advance in
utility stocks was checked a few
weeks ago,

and Southern declined
At the recent
price around 30, with the dividencl rate of $1.20, the stock yields
about

4%

four points.

and sells at 16.7 times the

timated

1958

earnings.

es-

This

is

slightly above the general average,
well
below
the
prevailing
multiples for the rapid growth

but

utilities,

Form Suffolk

Group

AMITYVILLE, N. Y.—The Suffolk Group, Inc., has been formed
with

offices at

190 Merrick Road

to engage in a securities business,
Officers are Burton E. Mason,

hydro-electric facilities, and President; Thomas Hennessey,
cheap, well-located coal deposits Secretary, and Anne C. Mason,
for boiler fuel. Some 627,000 kw Treasurer.
Mr. Mason and Mr.
hydro projects on the Coosa and Hennessey
were
formerly with
Warrior Rivers were begun early
Randolph Scott & Co., Inc.
this

year>
A joint subsidiary
(Southern E1 e c t r i c,Generating
Company) of Alabama Power and

fardnrs*

half of this rnnaritv will
factors; half
of this capacity will
be completed by 1960. Other new

E. A. Runyan

Opens

CHEYENNE, Wyo. —Elbert A.
Runyan is conducting an invest¬
ment business from offices at 1716
,

Capitol Aven"e unc!er

,

c

Of " Runyan
Investments.
Runyan has been an officer
Atlas Securities Company.

1VI>
*

of

righteous-

a

R. W. Selwood

supreme

lars

Form Fir«it American

R.

Investment

formed

with

McDowell

Corp.

offices

Road

to

at

has
533

engage

been
East

in

new

construction

to

be

in

Opens

J
ILION, N. Y.—Richard
W. Selwood^iV'engaging^in a securities
iXJJLVA,

)jUSjness from offices at 9 Reming|Qn

piace.

"

"

about $161

spent this

1958-

(com-

pared with $125 million last year),
During earlier
war

vears

JaCKSOn ixeynoia

million

year

of the post-

decfS Southendused

to

do

Jackson
away

E.

Aug. 18th

Reynolds

biennial

'basis.

Prior to his retirement in 1946,
Mr. Reynolds was President ot

The company sold merged

1,507,000 shares in April 1957, and
offering is expected in

Wood, Secretary and Treasurer, another

passed

at the age of 86.

T New'Yorlf^ "to

a

rUnwSJ3UrC'SaS?ttlCTlare
Wood, President, and Marie

June

on

60, of which
was

PHOENIX, Ariz.—First Ameri-

sonal

individual

cash

'

and the
colleges and universities
which
they founded. They have done
more than all the others put to¬
gether to create and preserve our
great American traditions of per¬

the churches,

and

of

capacity is being built at the Gorand Yates steam plants, etc.
gas
While the system formerly burned
effort shall we be able to win the
large amounts of gas as fuel, the
vital battle for the restoration of
increasing cost is diverting some
high ethical standards throughout plants to use of coal. Early this
our nation.
year system companies expected
to spend about half a billion dolsound

ness

to

integrity

average
usage

and
must work to- Georgia Power is constructing a
gether to solve the problem of huge one-million kw. steam plant
corruption in American life and in Alabama taking advantage of
to restore the high standards of low cost coal plus other favorable

can

—

S.

citizens generally

spring up and
solicit support almost every day,
we businessmen are in
danger of
forgetting America's oldest organ¬
seem

freedom.

our

(6) But the story of the reasons
for the high standards of business

the

obtained

has shared in the popularity
0f the growth utilities, advancing
policy of avoiding, as if jections for 1958-60 are substan- from last year's low of 20% and
the plague, close contact with
tially above this trend figure. This this year's low of 24%, to a high
local, state, or national "politics." growth is due mainly to the in- of 33%. With the sudden decline

social

public.

of
be

lished

I think

the

U.

Company's subsidiaries
and big government, have not
grown
as
fast as the
though by so doing manage- gtates of Florida and
Texas, neverment was causing inflation and in
fheless
they
have
enjoyed
a
effect was selling out the
cusgrowth trend better than that of
tomer, the shareholder, the pen- |jie u g as a wh0iei
System sales
sioner, and the frequently un- 0f
electricity have increased over
lepiesented employee.
the past 30 years at the average
Many companies have an estab- rate of 8% compounded, and pro-

imagination, judg¬
ment and integrity.
outpromise businessmen, but when ardized. Even business cannot long
maintain its integrity in a sea of
comes
to
I have said little about integrity. it
performances,
the
It is high time we
But success quickly deserts those businessman is the one to count corruption.
businessmen
took
more
part in
without
integrity, personal in¬ on. They know that if business is
this
battle, as did the merchants
tegrity, engineering integrity and to retain the freedom essential to
its success, it must conduct itself and artisans of Boston when they
product integrity.
started
the struggle which won
Donald Douglas was talking to so that it both deserves and wins
are

the

labor

ing

tionsmay have had their faults, but
they, with their rugged inresponsibilities.
dividualism, showed more courage
Another
place where we can
on
vital issues than do many of
judge the ethics and principles of
our
present generation of manmodern business is in its relations
agement. Maybe we have become
to
the community. There
again, so obsessed with
the desirability
the
critic
of
business
may
be
of making
friends that we are
invited to look reality in the face.
unwilling to make any enemies,
It is on the business people that
even of the right kind!
almost
every
community today
These are times that demand
relies
largely for leadership in
civic
affairs,
including
moral courage and leadership from busibacking and financial sponsorship. nessmen. If the corruption which
has been exposed is not vigorously
The
responsibility that business
attacked on every front, the pubassumes toward the community is
lie will be justified in becoming
exemplified every time there is a
and
all
our
cherished
local disaster or a really worth¬ cynical,
American traditions will be jeopwhile
project.
Politicians
often
executives

At present, with large tax
savings generated by accelerated
depreciation
and
amortization,

reported

we

and

even

of

one

committee

toward

at

busi¬

some

discussions
and

looking
of

apology

any

bar. I wish

critics could sit in

ness

Company

1959.

tem>
controls
Alabama
Power, about half
Georgia Power, Gulf Power and ments can

average.

ing

our

more

sound tax

attacks

to

American busifar

the southern part of the old
& Southern Sys-

Commonwealth

fearing to give public support to

position

for

plants, but
the strides of the present genera¬

tion

Southern Company, which took

Domestic
stantially

cies,

in the past.

human relations in

Criticism

deserve

have

businesses

immoral

fellows,
they
follow
the
philosophy
that
"the
squeaky
wheel gets the grease," which has
but

The Southern

for

con¬

they Mississippi Power. The System ternal sources. Bank loans will bo
have been receiving, I feel there serves a population of about used
this year to meet 1958 reis one point on which we business- 6,550,000
with
electricity,
plus quirements in part, plus the usual
men
can
properly be criticized, small amounts of steam heating senior financing by subsidiaries,
and that is with respect to lack of and transit. Industries in the area
Since Southern Company's com
courage
in V leading
the
fight include textiles steel, paper, coal, mon stock was
distributed to the
against both dishonesty and chemicals, lumber, glass products,
holders
of
Commonwealth
&
demagoguery in city, state and food processing
metal and ma- Southern in
1949, it has gradually
nation.
We
have
sometimes chmery. Agriculture includes cotacquired the characteristics of a
sneered at the "do-gooders" and
Jon, corn fruit, livestock and £emi-growth issue. It is true thai
then vainly called for the police tungnuts. Revenues are about. 35%
the company got
off to a slow
when the "do-gooders" took over, residential, 26%
commercial, 30% start because of its
heavy'equity
This is an area in which I hope industrial and 8% miscellaneous,
financing
earnings of $1.29 in
some
of the
younger
men
will
The System is noted for its low 1954 were
only
1c more than tho
better our record.
... /
rates, partly due perhaps to early $1.28 reported for 1949 (intervenBusiness and industry leaders, competition with TVA and Wening years being lower). Beginning
knowing right from wrong and dell Willkie's aggressive program in 1955,.
however, the company
educated regarding the forces of of selling appliances. The fact that hit
its stride with earnings of $1.35
economic
law,
have
a
moral roughly one-quarter of capacity is and there have been substantial
responsibility to take the lead in in hydro is also a factor in the low gains in the three following
years,
fighting for sound principles and residential rates, which average with about $1.80 estimated for this
opposing the bad. But how many about 2.07 cents compared with calendar year. ($1.72 was

progress has been
made in the last generation. There

of

guide

acclaim and less attack than

ployees, great

some

of

am sure

ethics

ness

business
with

Point

While I

comprise all

course,

aspects

Progress is still

been

door opening into the fu¬

door

to

conduct.

One

^

■

ture of business. We look

it

imagi¬

judgment.

have

of the
this

honest

not, of
ethical

worked

This is automation with
nation and
We

Being
does

the best

business ethics and personal
duct.

over

YYY?'YYY'v: Public

the

is still

years,

are

Conventionally,
new

freedom. The Golden Rule, taught
by the Church for nearly 2,000

Relations With Employees and the

a

devise

to

—

importance for the long pull, such
as
employee morale,
consumer
confidence and public opinion.

of

automation you may not be aware
of.
One
of our major telecom¬

continuing

15

page

Ethics in Modern Business

we

into

old

from

29

those

for

automation—will

freeze

Continued

(829)

«

with the NaUonMCity

Bank to form the First National
City Bank.

30

The Commercial and Financial Chronicle

(830)

.

.

Thursday, August 28, 1958

.

* INDICATES

Securities
•

Acme United Life

Insurance

Co., Atlanta, Ga.
stock (par $1)
be offered for subscription by common stockholders

June 30 filed
to

315,000 shares of

at the rate of three
of record June 30,

holders, and $7.50

common

shares for each two shares held

new

Price—$6.25 per share to share¬
for any unsubscribed shares. Pro¬

1958.

ceeds—For working capital and

general corporate pur¬
St., Atlanta, Ga. Under¬
Statement effective Aug. 18.

Office—1112 Peachtree

poses.

writer—None.

Aircraft Armaments, lnc.y Cockeysville,
Md.
July 16 (letter of notification) 70,000 shares of common
stock (par $1) being offered for subscription by minor¬
ity stockholders of record July 10, 1958 at rate of
seven new shares for each eight shares held
(with an
oversubscription privilege); rights to expire on Sept. 5.
An additional 280,000 shares will be subscribed for by
parent, United Industrial Corp., at the same price. Price
—$2.50 per share. Proceeds—To reduce its present short

indebtedness

term

and

to

production

procure

and

Registration

Houston, Texas. Underwriter
Co., Inc., New York.

•

writer—None.

Bankers Southern, Inc.
April 14 filed 8,934 shares of common stock. Price—At
par ($100 per share).
Proceeds—For general corporate

of record

Oil Co.

(N.

Y.)

discharge current liabilities and to drill ten wells.

Un¬

Underwriter

purposes.

Bankers

—

Co.,

Bond

Louis¬

ville, Ky.

ing

it Borg-Warner Corp., Chicago, III.
Aug. 26 filed 600,000 shares of common stock to be of¬
fered under and pursuant to the corporation's restricted
stock option plan lor key employees.

American Mutual Investment Co., Inc.
Dec. 17 filed 490,000 shares of capital stock. Price—$10.20
per

share. Proceeds—For investment in first trust notes,

second trust notes and construction loans. Company may

develop shopping centers and

build

purchase office
buildings. Office — 900 Woodward Bldg., Washington,
D. C.
Underwriter
None.
Sheldon Magazine, 1201
Highland Drive, Silver Spring, Md., is President.
or

—

^American-South African

Investment Co.,

•

Cohu

(9/18)

Aug. 27 filed 1,000,000 shares of common stock (par £ 1—
South African). Price — Proposed maximum offering
price is $28 per share.
under the

laws

organized

to

provide

shares

common

Business—The trust, incorporated

of the Union

of

a

of

South

medium

companies

for

Africa, has been

investment

in

engaged

in

business

the

in

South
.

in

Africa, with particular emphasis on those engaged
mining gold. The trust may also invest to a certain

extent in gold bullion.

Underwriter—Dillon, Read & Co.

Inc., New York.
Ampal-American Israel Corp., New York
Aug. 8 filed $3,289,100 of 10-year discount convertible
debentures, series E. Price—61.027% of principal amount,
payable in cash or in State of Israel Independence Issue
or Development
Issue bonds.
Proceeds—For develop¬
ment and

expansion of agricultural, industrial and
enterprises in Israel. Underwriter—None.

mercial

Anderson Electric Corp.
(letter of notification)

properties and the class B shares to be issued

Underwriter—None.

Campbell Chibougamau Mines Ltd.
10 filed 606,667 shares of capital stock (par $1)
506,667 were issued in connection with the ac¬
quisition of all the assets of Yorcan Exploration Ltd
(latter proposes to distribute said shares ratably to it*
stockholders of record Dec. 16, 1957).
The remaining
100,000 shares are to be sold for the account of the Estate
of A. M. Collings Henderson on the American and To¬
ronto Stock Exchanges.
Price—At market. Proceeds—
To selling stockholders.
Office—Toronto, Canada. Un
March

of which

new

on

Proceeds—For

on Aug.
15,
Sept. 4. Price—$8.75 per share.
capital.
Underwriter
Piper,

working
;Jaffray & Hopwood, Minneapolis, Minn.
'

—

4

Co., Los Angeles, Calif.
172,162 shares of common stock

filed

Peabody & Co.)

(Kidder,

Plan

Finance

Brothers)

Lehman

association.

Proceeds

writer—None.
'

—

For

working

capital.

fered pursuant to the company's

plan.

'

(Hornblower

and

Bankers

Feb.

10

other

corporate purposes.

Office —At¬

Underwriter—None.

Management Corp.

.

Columbia & Rensselaer Telephone Corp.
stock

"

•

holders at the rate of

Price—$60

one

share for each 2.572 shares

new

share.

per

Proceeds—For construction

8271400

R.

Staats

shares-

(Bids

11

a.m.

Dickson

S.

Read

(Dillon,

Washington Natural
(Dean

&

&

Inc.)

Co.,

Co.

C.

,

-

.

Management

Florida

Steel

—Common

(Offering

to

$3,500,000

(Kuhn,

Loeb

&

(Monday)
.Common

__

Co".>

74,925

shares

October

Co.

Financial
(Rassco

and

by

Israel

:

.

.

i_.*____;_Debentures

EDT)

7

$25,000,000

(Tuesday)

'

jBids

to

be

invited*

October 21

Common

$300,000

$11,000,000

)

(Tuesday)

„

Cincinnati & Suburban Bell Telephone Co,
(Bids to be

Debs.

received) $25,000,000

:____*__*_Bonds
Brothers)

;

$1,000,GOO

November

$24,000,000 ■'

.^Debentures

Corp.)

Co.*_*__Debentures *

(Wednesday)

a.m.

'

•

Madison Gas & Electric Co.__*_.*.Bonds

(Monday)

Lehman

Corp

Bids. 11:30

October

Preferred

—

Lines, Inc._

1

-'

Common

underwriting); $70,096,100

Telephone

National Fuel Gas Co..—

Forgan

& Co.)

Bell

Telegraph-

,

stockholders—underwritten
& Co.) $2,554,400

to

Moore-McCormack

Rassco

September 16
Suburban

Gas

(Kiddef,

•

$400,000

(Bids to be Invited) $110,000,000

,

.

Co.—'—Debentures

Langley & Co.)

(Watson

;

29

stockholders—no

Southwestern

Productions, Inc
.

.——Common

Mountain States Telephone &
Co.
_L

(Thursday)

September 15
II

(Friday)

Co,*.,

Peabody &

:

;

V. September 30 (Tuesday)

$35,000,000.

100,000 shares

Co.)

Tropical Gas Co., Inc..

Cinemark

$15,000 000 1'

Corp

"Kidder,

(

(Offering

../Preferred

__

Co.)

(McDonald, Holman & Co., Inc.)

-

.

,

(Wednesday

(Morgan Stanley

$l,166,05Cf.

September 12 ,(Friday)
,

335,000.000

Co..

September
Bonds

Gas Co

Witter «fe

Development
(W.

24

).

Bonds

EDT►

a.m.

—

,

(Tuesday)

Co._—

11

Power

shares

Corp.-**—-.-Bonds

Inc.)

September 11
Western

(Bids

September

Bankers

%

Common

Inc.) ,$28,000,000

Inc.——Preferred

Markets
(R.

Power

Consumers

•"

..Common

S10.000.000

EDT)

Co.

&

September 26

Inc
125,000

Read

September 23
V,

'

Co.,

__i_—

(Dillon,

$20,000,000

Co.)

&

$24,282,600

ii_;

—.

.

.Preferred.

(Thursday)

American-South African investment

Ltd.

(Wednesday) f

Automation Products

Pacific

(Wednesday*.

Indiana, Inc..-.

(Blyth &-Co.T Inc.*

—Bonds

(Bids noon EDT)

September 10

17

Public Service Co. of

•

..

Indiana &
_

-

6

(Thursday)-.

Michigan Electric Co
,

(Bids

11

a.m.

Bonds

EST)' $20,000,000

'

:

*

(9/26)

400,000 shares of common stock (par 25
cents.) Price—$1 per share.
Proceeds—To reduce out¬
standing indebtedness and for working capital. Office-

•

(letter of notification) 2,800 shares of common
(no par) to be offered for subscription.by stock¬

_.Common

Smith)

&

Fenner

Utah Power & Light Co.—.

filed




of-

Aug. 4

Bankers

expansion
lanta. G8

be

to

employee* stock option

Harlari Lowell, 2200 Kenton, Aurora, Colo. Underwriter
—Lowell, Murphy & Co., Inc., Denver, Colo. •

Merrill Lynch,

Glore, Forgan & Co.;

Weeks;

&

Pierce,

Glore,

133,740 shares to employees pursuant to stock
purchase
options. Price—To public, $6 per share. ^Proceeds—For

.

it Clute Corp. .
"X;. XX:
;
Aug. 21 (letter of notification) 300,000 shares of common
stock (par one cent). Price—$1 per share. Proceeds—To
pay additional costs of construction; and for retirement
of obligations and working capital.
Office — c/o Jolin

.

Champion Spark Plug Co

Under¬

Fidelity Life Insurance Co.
Feb. 28 filed 258,740 shares of common
stock (par $1),
of which 125,000 shares are to
be offered publicly and

•

■

Consumers

'

the

.

'

.

September 18

$350,000,000

Texas Eastern Transmission

Associated Grocers, Inc.,
Seattle, Wash.
June 30 filed 4,788 shares of common
capital stock (par
$50) and $1,500,000 of 5% subordinated
registered deben¬
ture notes, second
series, and $606,000 of 5% coupon
bearer debentures.
To be offered to members of

-

.

,

(Tuesday),

September 9

share for each

which, at May 15, 1958, amounted to
$8,450,000.
Underwriter—None. Statement effective
July 7.

'

it Cleveland Electric Illuminating Co.
Aug. 27 filed 200,000 shares of common stock

Halsey, Stuart & Co., Inc. and

ing common stock at the rate of
five shares held on
July 7,

.loans

(9/15)

Rd.,
Underwriter-^Watson & Co., Santa: Fe,

Fe, N. M.

Debentures

Co

&

Roebuck

(Goldman, Sachs & Co.;

(par $1)

Sept. 22, 1958. Price—$14 per share. Proceeds—To
pay
off an equivalent
portion of the company's current bank

Productions, Inc.

•

$1,320,000

Co.)

&

Stevens

new

Santa

J

_____-——Preferred

Hammill

(Sliearson,

$8,580,000

(Monday)

September 8

being offered for subscription by holders of outstand¬
one

II

September

Corp.__Debs. & Com.

South Carolina Electric & Gas Co

1958; rights to expire about

(par

by amendment. Pro¬
Underwriters — Horn-

N. M.

(Thursday)

Carolina Natural Gas

(William

Arden Farms

June

stock

supplied

NEW ISSUE CALENDAR

share for each four shares held

Rights to expire

be*

selling stockholders.

Cinemark

held.

derwriter—None.

Sears

one

•

Dec. 31, 1957.
The notes are convertible at
time after July 1, 1958, until the maturity or prior
redemption of the notes at a conversion price of $4 pei

Pfice-r-To

June 30 (letter of notification) 300,000 shares of common
stock (par 10 cents),
Price—$1 per share. Proceeds—
For working capital. Office937 AcequiaXMadre

company

Anita Cobre U. S. A., Inc.,
Phoenix, Ariz.
Sept. 30 filed 85,000 shares of common stook. Price—At
par ($3.75 per share). Proceeds—For investment in sub¬
sidiary and working capital. Underwriter—Selected Se¬
curities, Inc., Phoenix, Ariz.

1958,

,

blower & Weeks; Glore, Forgan & Co.. and Merrill
Lynch,
Pierce, Fenner & Smith, all of New York.

vertible subordinated income notes of the Calidyne Co.,
limited partnership, which notes were assumed by the

Budget

of

$1.66%).

a

Co., Chicago, 111.; and Odess, Martin & Herzberg, Inc., Birmingham, Ala.

being offered for subscription by stockholders at the rate

L

:

it Champion Spark Plug Co. (9/9-10)
Aug., 21
filed 827,400 shares of common
ceeds—To

-

September 4

Apache Oil Corp., Minneapolis, Minn.
July 28 filed 94,766 shares of common stock (par
$2.50)

'

Oils

-

as com¬

Calidyne Co., Inc., Winchester, Mass./
June 4 filed 230,875 shares of common stock (par $1)
These shares are issuable upon conversion- of an ag¬
gregate principal amount of $923,500 of 10-year 3% con¬

North

•

;

v7.

-

Underwriter—J. A. Hogle & Co., Salt Lake

stock (par

Podesta &

\

.

Cal Ray Bakeries Inc.
"
Aug. 12 (fetter of notification) 42,800 shares of common
stock (par $1).
Price —$7 per share.
Proceeds—Tor
working capital. Office—239 North Howard St., Glen-

share.

Se¬

Winslow,

Inc., Seattle, Wash.
July 30 filed 1,000,000 shares of common stock. Price—
At par (10 cents per share).
Proceeds — For drilling
/ costs. Underwriter—None. Offering to be made through
A. R. Morris and II. C. Evans, President and Vice-Presi¬
dent, respectively, on a best-efforts basis. Office—4112
Arcade Building, Seattle, Wash.

Underwriter—Cador, Inc., Far Hills, N. J.

City, Utah.

Union

and

<

Central

Corp., Far Hills, N.
1,003,794 shares of class A stock (par $1)
156,569 shares of class B stock (par 60 cents), the
class A shares to be issued in exchange for oil and/or

missions.

Billon,

Co.; Hornblower & Weeks,
Stetson, all of New York.

(par 10
Price—$5 per share. Proceeds—For expansion,
working capital and other corporate purposes. Under¬
writer—None. VMXX'■'*&«• X'"Ar.'>

Aug. 7 filed

gas

Underwriters—Eastman

&

&

.cents).

and

14,700 shares of class B
$1). Price—$12 per share. Proceeds
—To go to selling stockholders.
Office — 700 N. 44th
Street, Birmingham, Ala. Underwriters — Cruttenden,
common

share for

one new

Laboratories, Inc., Metairie
(New Orleans), La.
July 2 filed 600,000 shares of common stock

(9/8-12)
132,000 shares of 6% serial preferred stock
($10 par). Price—To be supplied by amendment. Pro¬
ceeds—To be used in conjunction with proposed merger
of company and Signature Loan Co., Inc. Underwriter—
Shearson, Hammill & Co., New York.

com¬

'Dec. 23

the basis of

on

Carrtone

Budget Finance Plan

any

Ltd.

Aug. 26, 1958

capital.

curities

June 10 filed

dale, Calif.

derwriters—To be named by amendment.

ISSUE

each five shares held; rights to expire on Sept. 11.-PriCe
$16 per share.
Proceeds —For repayment of bank
loans, to purchase and install1 machinery, and for work¬

^

Feb. 28 filed 500,000 shares of common stock (par 200).
Price—To be supplied by amendment. Proceeds — To

REVISED

—

•

American-Caribbean

ITEMS

Canada Dry Corp.
v /V vv
'
Aug. 6 filed 392,611 shares of common stock (par $1.662&)
being offered for subscription by common stockholders

Cador Production

^-Alaska Nickel Co., Inc., Fairbanks, Alaska
Aug. 7 (letter of notification) 250,000 shares of common
stock. Price — At par
($1 per share). Proceeds — For
working capital and general corporate purposes. Under¬

PREVIOUS

•

McDonald, Holman &

—

test

Underwriter—None.

equipment.

in

Now

ADDITIONS

SINCE

Service
Peabody

(Tuesday)

Inc.
&

Co.)

.

Common
100.000

shares

November 18.

(Tuesday)

Pacific Telephone & Telegraph Co..*
(Bids

to

be

invited)

$80,000,000

,

,

Debentures

■

188

Volume

Number

5772

.

L

The Commercial and Financial Chronicle

,

(831)
of

telephone

new

plant.

Office—19

Railroad

Ghatham^N. Y. Underwriter—None.
Commerce Oil

Dec.

16

.»

Avenue,

>

;

Refining Corp.

filed

$25,000,000 of first mortgage bonds due
Sept. 1, 1963, $20,000,00 of subordinated debentures due
Oct. 1, 1968 and 3,000,000 shares
common stock to be
offered in units

as

follows: $l,00u of bonds and 48 sharei

of stock an«fc$100 of debentures ^*"1 nine shares of stock

Price—To be supplied

by amendment. Proceeds — Tc
Underwriter—Lehman Brothers, New

construct

refinery.
Offering—Indefinite.

York.

p. *

-

price

on

the American

Stock Exchange. Proceeds—To
Underwriter—None.

-

Cooperative Grange League Federation
Exchange, Inc.
■
June 20 filed $400,000 of 4% subordinated
debentures,
10,000 shares- of 4% cumulative preferred stock (par
$100) and* 200,000 shares of common stock (par $5).
•

Price—At par.- Proceeds—To be added to
working cap¬
ital. Office—Ithaca, n. y. Underwriter—None.
7-

Counselors

Feb.

Research Fund, Inc., St.
Louis, Mo
100,000 shares of capital stock, (par one
Price—At market.
Proceeds—For investment

5

filed

cent).

Underwriter

—

Counselors

Research

Sales

Corp.,

St

Louis.-/Robert H. Green is President.
Cuban-Venezuelan Oil
'
-

Havana, Cuba

of

stock

common

one-half cent) in each of 24
— To
be supplied by amend¬
ment.
Proceeds—For capital expenditures, exploration
costs and other corporate purposes^ Underwriter—None
(par

companies.

Price

Daybreak Uranium, Inc., Opportunity, Wash.
filed 1,156,774 shares of common stock (par It
cents), of which 630,000 shares are to be offered for ac¬
count of company and 526,774 shares for selling stock¬
holders. ' Price—At market.
Proceeds—For exploration
and drilling costs and other corporate purposes. Under¬
writer—Herrin Co., Seattle, Wash.
V
Jan. 29

.

•
Delhi-Taylor Oil Corp., Dallas, Texas
July 15 filed 575,869 depositary units for the class A
.stock of the Houston Corp., being offered for subscrip¬
tion by the holders of common stock of Delhi-Taylor of
record May 23, 1958 on a l-for-10 basis (with an over-subscriptipn.-privilege). Subscription warrants will ex¬
pire on Sept. 3.
Each depositary unit will represent
-(a) < the beneficial ownership of one share of class A
stock of the Houston Corp. and (b) an irrevocable option
to purchase 8,945/10,OOOths of one additional share of
class A stock of Houston during a two-year period com¬
mencing on Aug. 15, 1959, or such earlier date as may
,be determined. Price—$10.38 per unit. Underwriters—
Lehman Brothers and Allen & Co., both of New York.
-*

Dersoti

Mines Ltd.

.June 5 filed 350,000 shares of

share.

per

Proceeds—For

stock. Price—$1
equipment, repayment of

common

new

loan, acquisition of properties under option, and other
-corporate purposes. Office—Toronto, Canada, and Em¬

porium, Pa, Underwriter—None.
; •
•

-

•

Dixon Chemical & Research,

165,625 shares of common stock (par $1) to
be offered for subscription by common stockholders at
the rate of one new share for each four shares held.
Price—To be supplied by amendment.
Proceeds—Foi

expansion and general corporate purposes.
Office —
Clifton, N. J
Underwriter—P. W. Brooks & Co.. Tnc..
New York.

.

Inc.

l/ec. 24 filed

Offering—Indefinitely postponed. Statement
Other financing may be arranged.

withdrawn Aug. 25.

,July 28 (letter of notification) 200,000 shares of common
stock, (par five cents). Price—$1.50 per share. Proceeds
working capital and reducing current indebted-

v—For

Office—136 East 38th Street, New York

ness.

.

r

16, N. Y.
Underwriter
Capital Reserve Corp., 1346 Connecticut
Avenue, Washington 6, D. C.
—

:

•

Electric Power Door

(letter of notification)

common

stock

Lake

St., Minneapolis, Minn.
lum, Inc., also of Minneapolis.
•

30,000 shares of class A

(par $5). Price—$6.60 per share. Proceeds
general corporate purposes.
Office — 2127 East

—For

Underwriter—Craig-Hal-

Electronic Supply Co., Los

Aug.

8

(letter of notification)

aggregate value

of

common

Angeles, Calif.
in

not

stock

State of California only.
timated at about $12.25 per share).

Los

excess

of

Proceeds—To sell¬

Underwriter—Bateman, Eichler & Co.,

Angeles, Calif.

Ethodont
Feb.

20

Laboratories, Berkeley, Calif.
300,000 shares of common stock.
Price—
per share).
Proceeds—To cover operating

filed

,

At

par

expense

tion.

($5
during the development period of the

corpora¬

Underwriter—None.

Exploration Service Co., Ltd., Far Hills, N. J.
Aug. 11 this company and Amkirk Petroleum Corp.
(latter of Fort Worth, Texas) filed $400,000 of working
'interests (non-producing in Sinu Valley Project), to be
offered for sale in $12,500 units (of which $8,000 is
pay¬
able in cash and $4,500 is to be represented by
promis¬
sory notes).
Proceeds—Exploration Service Co. to ac¬
quire 80% interest in a certain concession from Amkirk
and for

Far

6%

debenture

ceeds—To
mont

take

exploration program.

stock

and

contract to

a

purchase the Belle-

in Baton Rouge; for
equipment; and
Underwriter—None.

First Backers Co.,

Inc., Clitton, N. J.
April 7 filed $1,000,000 of 12% notes, payable nine
months after date of issue in units of
$100 or in mul¬
tiples thereof. Price—100% of principal amount. Pro¬
ceeds—To be used solely for purchase of notes and other
indebtedness

in

issued

for

payment

improvements on
homes and secured by mortgages or other liens
upon the
improved properties. Underwriter—None.
Florida

National

Development Corp.
Aug. 7 (letter of notification) 300,000 shares of common
stock (par one cent).
Price—$1 per share. Proceeds—
For development of land, promotion and sale of
existing
properties, payment of mortgage and working capital.
Office—438

Mercantile

Underwriters

York;

and

—

Bank

Bldg., Miami Beach, Fla.
Anthony Securities Corp., New
Stone & Co., Great Neck, L. I.,

James

Schwerin,

n. y.

filed

150,000 shares of capital stock (par lit
cents). Price—$2.50 per share. Proceeds—For sales pro
motion of company's
products, working capital, addi¬
tional inventory and accounts
receivable, for research
and development and for other
general corporate pur

Office—Brooklyn, N. Y. Underwriters—Statement

poses.

to be

amended.

Fort

Pierce

Port

&

Terminal

Co.

May 23 iiled 2,138,500 shares of common stock (par $1).
Price—To be supplied by amendment.
Proceeds—To
pay some $174,000 of outstanding indebtedness and to
complete phase one of the port development plan, at a
cost of $1,425,248,
and the balance will
working capital. Office—Fort Pierce, Fla.

—Atwill
efforts

Co..

&

Inc.,

basis.

Stop
stituted by SEC.
Fred

Astaire

York),

of

Beach,
proceedings

Dance Studios

added

to

Underwriter
Fla., on a best

Miami

order

be

have

been

in¬

(Metropolitan New

Inc.

Park

Ave., New York, N. Y. Underwriter—Willis
Co., Inc., New York., N. Y.

Underwriter—Cador, Inc.,

Commercial

Corp.

(par 10 cents).

Price-50 cents




per

share.

Pro¬

ercise of warrants which
warrant
to
organizers,

General Aniline

*

turn

Corp., New York
Jan. 14, 1957 filed 426,988 shares of common A stock
(no
par) and 1,537,500 shares of common B stock (par $1)
Proceeds—To the Attorney General of the United States
Underwriter—To be determined by competitive
bidding
Probable bidders: Blyth & Co., Inc., and The First Bos¬
ton
Corp.
(jointly); Kuhn, Loeb & Co.; Lehman
Brothers, and Glore, Forgan & Co. (jointly). Bids—Had

been scheduled to be received up to 3:45
p.m.

(EDT)

on

May 13 at Room 654, 101 Indiana Ave., N. W., Washing¬
ton 25. D. C., but bidding has been postponed.
General

Devices, Inc., Princeton, N. J.
(letter of notification) 40,000 shares of com¬
mon
stock (par $1) to be offered for
subscription by
stockholders at the rate of approximately 18.5 shares
100

shares

held about April 15; unsubscribed
Price—$3.50 per share. Proceeds—Foi
expansion, equipment and working capital. Underwriter

shares to public.
—None.

purchase warrants to and including Sept. 2, 1958. Price—
To be supplied by amendment.
Proceeds — To repay
bank loans and for working
capital. v Underwriter—G. H.

Georgia Casualty A Surety Co., Atlanta, Ga.

Iftay 6 filed 450,000 shares

of

common

stock

(par

Price—$6

per

purposes.

Underwriter—Buckley Enterprises, Inc.

Glassheat

share.

Proceeds

—

$1)

For general corporate

•

Gulf

(letter of notification) 150,000 shares of class A
stock (par 10 cents). Price—$2 per share
Pro
seeds—For
general corporate purposes.
Office—1
I
35th

Street, New York 16, N Y
Underwriter—James
Anthony Securities C~»r> 37 w«n st New York 5. N V
Great American

filed
Of

Realty Corp., N. Y.

484,000

shares

of

class

A

(par

10

Price—To

be supplied by amendment.
Proceeds—For
working capital and other corporate purposes. Under¬
writers—Joseph Mandell Co. and Louis L. Rogers Co.,
both of New

12

York,

Northern

on

a

Life

best efforts basis.

Insurance Co.

(letter of notification) 31,011 shares of com¬
(par $1) to be offered to stockholders on the

stock

basis of

Utilities Co.

V

one

new

,

Aug. 14 filed $17,000,000 of first mortgage bonds, series
A, due 1988. Proceeds—Together with cash, on hand, to
redeem and retire $17,000,000 principal amount of
4% %
first mortgage bonds due 1987. Underwriter—To
be de¬
termined
by competitive bidding.
Probable bidders:

Halsey, Stuart & Co. Inc.; Lehman Brothers; Merrill
Lynch, Pierce, Fenner & Smith and White, Weld & Co.
(jointly); Stone & Webster Securities Corp.; and Salo¬
Bros. & Hutzler and Eastman
Dillon, Union Se¬
(jointly). Bids—Had been expected to be
received on Sept. 15, but will be
indefinitely postponed,
mon

curities & Co.

^

V

June 12 filed 27,000 shares of
capital stock. Price—$10
per share.
Proceeds—To be used in part for the ex¬
ploration of mines and development and operation of
mines and in payment of indebtedness.
Ariz.

Office—Tucson,

Underwriter—None.

Houston

Corp.
July 3 filed 818,333 shares of

/

common stock (par $1) and
575,869 shares of class A stock (par $1) being offered to
holders of outstanding
common, on the basis of LSI

times for each share of

common stock held and approxi¬
mately 1.5 shares of class A stock for each 381,273 class A
share held as of Aug. 19.
(The right to subscribe with
respect to 133,850 outstanding class A shares has been

waived.

The

offer to common stockholders
expired on
Aug. 26, and to class A stockholders will expire on
Sept. 2. Price—$10 per share. Proceeds—For expansion
and working capital. Underwriter—None.

if Idaho Manufacturing Co., Inc.
(letter of notification) 2,000 shares of class A

Aug. 22

2,000 shares of class B stock to be offered first to
Price—$15 per share for class A and $100
per share for class B stock. Proceeds—For expenses of
stockholders.

setting
and

up production and distribution; manufacturing
operating expenses and for operating capital. Office
30th, P. O. Box 5070, Boise, Ida. Underwriter

share for each

seven

Corp., Boise, Ida.

-

:

if Imperial Packing Corp., Anaheim, Calif.
Aug. 21 (letter of notification) 290,000 shares of
stock.

common

Price—At par ($1 per share).

Proceeds—For ex¬
in the production of citrus juices and by-products
and working capital. Underwriter—Simmons &
Co., New
penses

York, N. Y.
Industrial Minerals Corp.,
Washington, D. C. '
July 24 filed 600,000 shares of common stock (par one
cent). Price—$1 per share. Proceeds—To develop and
operate graphite and mica properties in Alabama. Un¬
derwriters—Dearborn & Co. and Carr-Rigdom &
Co.,
both of Washington, D. C., on a best efforts basis.

Industro Transistor Corp. (N. Y.)
28 filed 150,000 shares of common

Feb.

stock

(par 10

cents). Price—To be related to the market price. Pro¬
ceeds—For working capital and to enlarge research and
levelopment department. Underwriter — S. D. Fuller &

Co., New York

Offering—Being held in abeyance.

/

if Institutional Income Fund, Inc., New York
Aug. 19 filed (by amendment) an additional 3,000,000
shares of common stock (par one cent). Price—At mar¬
ket.

Proceeds—For investment.

Insured

'

Accounts

Fund, Inc., Boston, Mass.
May 12 filed 5,000 shares of common stock. Price—$5,060
per share. Proceeds—For investment.
Buqfciess—To In¬

primarily in share accounts insured by the Federal
Savings and Loan Insurance Corp., in savings and loan
issociations throughout the country. Underwriter—None.
Ben H. Hazen is President.
International

Opportunity Life Insurance Co.
(par $1).
share. Proceeds—For working capital and
other corporate purposes. Office—Denver, Colo. Under¬
writer—Columbine Securities Corp., Denver, Colo.
June 2 filed 5,000,000 shares of common stock

Price—$5

shares

held;

war¬

per

Investors

July 24

various
class

Realty Mortgage & Financial Corp.

filed

$250,000

of

investors

income

certificates

10-year maturities)
stock.

and 125,000 shares of class A
Price—The certificates will be offered in

denominations at

100%

per

certificate, and the

A

common
stock at $2 per share.
Proceeds—For
the purpose of owning, buying and selling, and other¬
wise dealing in real estate, or matters pertaining to real
estate and the improvement thereof, in the areas in

which

stock

this

stock, the company proposes to offer
400,000 shares and certain selling stockholders '40,000
shares, the remaining 44,000 shares being subject to
option to be offered for the account of the underwriters.

mon

management,

%

States

common

12

18

to be sold at 25 cents per

incorporators,

writer—None.

(6%

Corp.

common

cents).

*

vest

Aug. 27 filed 164,000 shares of common stock, the amount
of the offering to be reduced by the number of shares
issued since May 31, 1958 through the exercise of stock

Aug.

are

and/or directors.
Price—$10 per share. Proceeds—For
working capital and general corporate purposes. Under¬

—First Idaho

Aug.

/Tetter of notification) 300,000 shares of common

Guardian

Fremont Valley Inn *
Aug. 6 (letter of notification) 300,000 shares of
common
stock. Price—At par ($1 per share). Proceeds—To erect
and operate an activities
building, comprising a restau¬
rant, cocktail lounge and coffee shop. Office—3938 Wilshire Blvd., Los Angeles, Calif. Underwrite^—Oscar G.
Werner & Co., Pasadena, Calif.

Feb.

expansion.

Insurance Corp.,
Baltimore, Md.
Aug. 16, 1957, filed 300,000 shares of common
stock, oi
which 200,000 shares are to be
publicly offered and the
remaining 100,000 shares reserved for issuance upon ex¬

—210 North

each

1958,' then to pub¬

Proceeds—For general funds
Office—119 W. Rudisill Blvd.,

Wayne, Ind. -Underwriter—Northwestern, Invest¬
Inc., 502 Gettle Bldg., Fort Wayne, Ind.

E. Burnside &

for

share.

and

Aug. 7 (letter of notification) 299,940 shares of common
stock (par 10 cents). Price—$1
per share. Proceeds—For
constructing and furnishing new dance studios. Office—
487

Fort

per

Hoagland & Dodge Drilling Co., Inc.

Laboratories, Inc.

26

Great

Federal

over

Motor Hotel

Hills, N. J.

Mav 21

bonds

Walker & Co., New York.

$50,000

(par

50 cents) to be
Price—At market (es¬

sold in

ing stockholders.

ment

$500,$50,000 of promissory
notes to be offered in units of four shares of
stock, $5,000
of bonds and $500 of notes.
Price—$7,500 per unit. Pro¬
of

if Genung's, Inc., Mount Vernon, N. Y.

Co., Inc.

Aug. 11

Price—$3

000

March 31

Drinks, Inc.

expire Sept. 20, 1958. Unsubscribed shares to- be

offered to stockholders until Oct.
20;
to be used for

March

.

rants to

lic.

Fields7 Louisiana Corp., Baton
Rouge, La.
July 31 filed 400 shares of common stock (no par)

Forest

Voting Trusts,

March 31 filed 767,838 units of voting trust certificates
•each certificate representing the ownership of one share

Cuban

loans, etc. Office — 80 Wall St., New
York, N. Y. Underwriter—Dumont Securities Corp.. New
York, N. Y.

working capital.

,

Consolidated Cuban Petroleum Corp.
July 1 filed; 419,000 outstanding shares of common stock
,(par 20 cents). Price—Related tol the current market

Belling stockholders.

ceeds—To make

31,

the

company

will operate.

Office—Aiken, S. C.

Underwriter—None.

if J. E. Plastics Manufacturing Corp.
July 28 (letter of notification) 39,852 shares of common
stock (par 10 cents) of which 38,750 shares will be sold
publicly. Price—$2.12V2 per share. Proceeds—To selling
stockholder. Underwriter—John R. Boland & Co., Inc.,
30 Broad St., New York, N. Y.
Jacksonville

Capri Associates Ltd.,
Jacksonville, Fla.
July 23 filed $325,000 of limited partnership interests.
Price—$5,000 per unit. Proceeds—For the purpose of

Continued

on

page

32

The Commercial and Financial Chronicle

22

Continued from page

'

held. Price—To yield a maxi¬
mum not to exceed $300,000.
Proceeds — To discharge
short term loans and for working capital. Office — 416

Share fot each I2I2 shares

Motel in Jacksonville,

Underwriter—None.

«Fla.

Johnston

Aug.

<1

Kalvar

Corp., New Orleans,

July 14 filed 725,000 shares of common stock (par SI).
Price—$2 per share. Proceeds—For construction of plant
ind for working capital. Underwriter—Investment Sales,
Inc., 532 E. Alameda Ave., Denver 9, Colo.

La.

Keystone Custodian Funds,

Inc.

(by amendment) 1,250,000 shares of Key¬
Exempt Bond Fund. Price — $20 per share.
—
For investment.
Underwriter — Lehman

tax

^Proceeds

Offering—Has been cancelled.

brothers." New York.
T

Co.

Laclede Gas
June

filed

18

$10,000,000

Proceeds—To

first

of

4%%

refund

1932.

tive

bidding.

bidders;

Probable

tfne.: The First Boston

by competi¬

Film

—584

July

*€o

Y.

& Co.,

F- i

••••,

■

"young, aggressive and expanding life and other in-;
iuran.ce
companies and related companies and then to
operate such companies as subsidiaries."
Underwriter—
"Sirs: Maine Corp., Portland, Me.

second liens upon

shares of common
frtoek (par $1). Price—From 80 cents to $1.40 per share
iProc-eeds—To go to selling stockholders. Office—24751
Crenshaw Blvd., Torrance, Calif.
Underwriter—Daniel
♦fteeves & Co., Beverly Hills, Calif.

Nov. 18,1957 (letter

Picture

Fund, Inc., St. Paul, Minn.

40.000 shares of

stock. Price—At

common

Office—1002

investment.

Proceeds—For

June
stock.

First

Co.,

Baltimore.

Proceeds

Md.

(ssue to

on July 2. has been postponed
registration

in

ing

An.g;

20

filed

$6,000,000

;
•

to

principally to Polders of whole mortgage notes and

re

fated" warranty

re

serves

the

agreements,

right

to

although

offer such

(Fcr preferred stock, at

stock

the
to

companv

others.

Price

($200 per share). Proceeds To be used principally for the
purchase of additional
mortgage notes for resale to others, Underwriter—None.
par

Vft.rch

24

(letter

of

nrnulative-preferred
(

notification)

stock

(par

5.000

$50)

shares

and

5,000

of

6%

one

♦fcare of preferred and

one share of common stock
Price
—$60 per unit.- Proceeds—For working capital. Office—
1383 Bandini Blvd.. Los Angeles. Calif
Underwriter—
.

ifone.

• -

•

•

•

it Middle States Telephone Co. of Illinois
A*'j.

i letter of notification)

12.906* shares of

common

common

stock

May 5 (letter of notification)
stock

June

&

(par

one

cent).

Price—$2

per

share.

''rsr

to

be offered for




subscription by stock¬

Any unsubscribed shares will

nance.

51, 111.

Price—$4.25 per share.

be pur¬

Ui dcrwriter—None.
Investors,

Inc.,

Aug.

11

(letter of notification)

to

be rffered at

pu

Proceeds

Office—800 N. Ked/.ie Ave., Chi¬

stock
who

par

Pendleton,

Ore.

1,600 shares of

($100 per share)

common

to investors

chase a > equal number of shares of common
($50 per share) in Golden Hilb Motor Hotel.
an affiliate.
Proceeds—To be u cri to purchase

slock at par

Inc., and

land,
mo

make

mm ovemenls

hlJress—P.

hotel.

or

and
O.

for

Box

construction

775,

of

a

Pendleton, Ore.

Underwriter—None,
Penrsy.vama Power Co.

Aug. 1

common

Co..

is'

it Perdle'on

tiled $8,000,000 of first mortgage bonds due 1988.

Proceeds—To

Proceeds—To

Underwriter—T. J. Campbell Investment

(par $1) to be offered to minor¬
the basis of one new share for each

—For working capital.

loan; to acquire fishing tools for leasing: and for
working capital. Office—931 San Jacinto Bldg.. Houston
Houston. Tex.

stock

on

by Rock-Ola Mfg. Corp. Warrants expire 20 days

from date of

being

Under¬

Corp., Pasadena, f alif.1

Weighing & Vending Machine Corp.
of notification) a maximum of
25,000

four shares held.

oay

Tex.

Proceeds-—For investment.

Investment*

(letter

common

ity stockholder*

gage

Inc.

bonds

redeem

due

1987.

a

like

amount

of

Underwriter—To

5%
be

first

mort¬

determined

by competitive bidding. Probable bidders: Halsey, Stuart
,9Turner. Peabody & Co.; White Weld & Co.;
Equitable Securities Corp., and Shields & Co. (jointly);
•

*
-

27

shares of

•

150.000 shares of

market..

Peerless

Nedow Oil Tool Co.
•-

effec¬

Fund, Inc., Pasadena, CaliL
20.000 shares of common slock (par $1).

writer—Investors

of the
outstanding shares of common stock of American Eneciustic Tiling Co. Inc., in the ratio'of one share of
National Gypsum common for each 2-4/10ths of Amer¬
ican Encaustic common.
The acquisition was declared
effective on Aug. 21.

shares

of common stock (par $1) to be offered in units of

of

Utah. Statement

Plan

filed

19

Price—At

offered in exchange for all but not less than 90%

Mayfair Markets

Inc., Salt Lake City,

May

(10 1)

shares

Corp., Salt Lake City, Utah
common stock (par $1),

Securities,

Peckman

Co.

298.000

Production

tive Ji'^c 5.

Corp.

Gyprum

filed

re¬

shares are to be offered to
Price—To be supplied by amendment
Pro¬
selling stockholders.
Underwriter—Market'

cago

25

$1).

(par

the remaining 664,818

Expected to be received up to 11:30 a.m. (EDT) on Oct.
I at Room 2033, Two Rector St.. New York 6, N. Y.
National

(9/10)
Proceeds—To

ceeds—To

chased

June

supplied by amendment.

loans and for

the public.

(jointly); White. Weld & Co.;
Harriman Ripley & Co. Inc.: Kuhn, Loeb & Co. and Wertheira & Co. (jointly): The F'rst Boston Corp.
Bids—

•

inc.

of which 100,000 shares are to be offered by the company
in exchange for oil and gas properties and 3,000 for serv¬

operation
Underwriter-

Stone

Products

filed 125,000 shares of capital stock

19

Paradox

and

and

Automation

Pacific

ices;

Co.

Price—$3 per share. Pro¬
capital and surplus accounts. Office—
Ave., Phoenix, Ariz. Underwriter—None.

April 18 filed 767,818 shares of

Colo.

Probable bidders:
Dillon. Union Securities &

a

working capital. Office—Glendale, Calif. Underwriter—William R. Staats & Co., Los
Angeles/Calif.
;
b

and to repay bank
competitive
Halsey, Stuart & Co. Inc.;

Webster Securities

be offered

Securities Co., En¬

tire bank

Underwriters-—To be determined by

Eastman

of

and 5,000
dividend series, the latter shares

Fuel Gas Co.

*

Price—'

stock.

operations. Business

Price—To be

sinking fund debentures

V'i

bidding.

warranty and repurchase
shares of cumulative preferred

agreements

"Stock,' 6%

o

loans.

-ik Mason Mortgage & investment Corp.,
Washington, D. C.
•

Boulder.

Co..

common

reserve for future

•

Aug. 22 filed $25,000,000 of sinking fund debentures due
Oct. 1, 1983.
Proceed:—To refund $15,000,000 outstand¬

expected

was

remain

plan of development
Pearl
St.. Boulder. Colo.

Securities

4r National

purposes.
Price—To be supplied by amend¬
Underwriter—Smith. Barney & Co.. N. Y. Offer¬

procure

Inc., Tulsa, Okla*

properties. Underwriter—Universal
terprise Building. Tulsa, Okla.

Aug.

50,000 shares of common

projected

Western

corporate

ing, which

and

Office^—1406

Working capital and general

—

the

nit

June 11 filed $25,000,000 of sinking fund debentures, due

ment.

Y.

(50 cents per share). Proceeds—
persons to implement and carry

Price—At par

train

To

.-National Bank Bldg., St. Paul. Minn.

(letter of notification)

4

shares

new

City, Utah.

filed 200,000 shares of'

14

4415 North 27th

Underwriter

share. Proceeds—For mining expenses.
—Birkenmayer & Co., Denver, Colo.

11/4

may

ceeds—To increase

National Beryl & Mining Corp., Estes Park, Colo.
May 16 (letter of notification) 2,916,000 shares of non¬
assessable common stock (par one cent). Price—10 cents
per

Employees

Pacemaker Life Insurance Co.

National Educators Finance Corp.

Mairs <&<rf>ower

July 1. 1978.

Of¬
Un¬

& Co., New York.

An September.

Martin

(N

1958 at the rate of
held.

it Pacemaker Life Insurance Co.,- Phoenix, Ariz.
Aug. 22 (letter of notification) 73,185 shares of capital
stock (par $1) to be offered for subscription by holders
of life insurance issued by Pacemaker Insurance Co. and

)

Investment Trust Fund. Inc.

Municipal

Co.,

$2.50 per share. Proceeds—For payment of loans,, various
—To acquire and operate mining claims and oil and gas'

May 9. 1957 filed 5,000 units of undivided interests in
Municipal Investment Trust Fund, Series A. Price—At
market. Proceeds—For investment.1 Sponsor—Ira Haupt

—

filet?

April

July 11 filed 200,000 shares of common stock (par $1).

Magna Investment & Development Corp.
♦May 26 filed 56,000 shares of common stock and $500,000
of 6% convertible debentures. Price—For debentures, at
-spar (in $1:000 units); and for common stock, $4.50 per
*hare. Proceeds—For contractual obligations, for workring capital, and other general corporate purposes. Busi¬
ness
To engage primarily in the development and
^operation of various properties, including shopping cen¬
ters.
Office—Salt Lake City, Utah. Underwriter—,J. A
Uiogle & Co., Salt Lake City. Utah. Offering—Expected

&

Utah

& Mineral Operations,

Oil

Inc.

derwriter—None.

Calvert

writers—Harrison S. Brothers & Co., and Whitney & Co.,

equipment, and

'York.

24.

March

share then

both of Salt Lake

Va.

Price—$10.75 per share. Proceeds—For investment.
fice—1000 Power & Light Bldg., Kansas City, Mo.

6

-

of notification) 60,000 shares of com¬

Investors

of com¬

share. Pro¬
land; construc¬

purchase 50,stockholders,
SI.75 per share; and to public, $2 per share. Proceeds—
For mining, development and exploration costs, and for
working capital and other corporate purposes. Under¬

stock (par

Motion

of

Inc., Salt Lake City,

for each

40 cents). Price—$5 per share. Proceeds—
For purchase of land, construction and working capital
Underwriter—Southeastern Securities Corp., New York

mon

completion

shares
per

4 filed 597,640 shares of common stock (par $1)
be offered for subscription by common stockholders

of record

|

Motel Co. of Roanoke, Inc., Roanoke,

23,200
Price—$5
plant plans;

(par $1).

•)00 shares of unsubscribed stock. Price—To

and

Lord Elgin Hotel Corp., N.Y. C.
July 29 filed $1,655,000 limited partnership interests in
4his company. Price—$5,000 per unit. Proceeds—To pur¬
chase hotel. Underwriter—Tenney Associates, Inc., New

♦market.

to

properties to be selected by the man¬

Springs, Colo.

& Co.. Colorado

Inc.

•June 18 (letter of notification) 34,00.0

stock

operating expenses.
Office—25)2bN.
Baltimore 18. Md. (Underwriter—Burnett

Oil

agement of tne company.
Office—223A Independence
Building, Colorado Springs, Colo. Underwriter—Copley
.

'

296,750 shares of comPro¬

(letter of notification)

B

April

/•;

stock) (par 25 cents).
Price—$1 per share.
ceeds—To be* invested in notes secured by first

Enterprises Inc.
notification)

(letter, of

Sparks, Md.

program

mon

■*3f

*

(no par)
only to bona fide residents
Price—To be related to the current market

v

Underwriter—

and

St.,

Inc.

28

July

•March 28 filed 1,000.000 shares of capital stock (par $1)
sprice—$5 per share. Proceeds—To acquire stock control

Aug

tion

Mortgages, Inc.

Life Insurance Securities Corp.

6

class

ceeds—For

offered

be

Me.

Exchange St., Portland,

T. C.

mon

through 1959.
Manager-Dealers —
Smith, Barney & Co., Kidder, Peabody & Co. and Blyth
struction

'Underwriter—None,

Longren Aircraft Co.,

Of

March

price 011 the New York Stock Exchange. Proceeds—To¬
gether with other funds, to carry on the company's con¬

Building in Cleveland, Ohio

purchase the Leader

Office—98

pending improvement in market conditions.

will

share).

None.

filed 100.000 shares of common stock

1

stock

The

of Montana.

Leader-Cleveland Realty Associates, N.

Halsey, Stuart & Co. Inc.; Lehman Bros.:

Power Co.

Montana

July 16 filed $1,280,000 of participations in partnership
interests.
Price—$10,000 per participation.1 Proceeds—

share for each six shares held. Price—At par ($1

it Norton Portland Corp.
19 (lettei of notification) 29,265 shares of class P*
stock (par $1)
Price—$10 per share. Proceeds—To pay
off outstanding trade obligations and loans by stock¬
holders and officers; and for additional working capital.

to defer sale

Ave.. N. W., Cleveland.

Bldg., 2108 Payne

common

stockholders at the ratio

common

Aug.

oody & Co., Smith, Barney & Co. and Blyth & Co., Inc.
(jointly). Bids—Had been expected to be received up
(EDT) on Aug. 26 at Room 2033, Two Rector St..
New York, N. Y.. but company on Aug. 22 again decided

Underwriter—None.

Ohio.

be offered to

$15,500,000 in bank loans and to carry on the
;ompany's construction program through 1959. Under¬

to noon

Office

for working capital, etc.

—

Telephone Co.

(letter of notification) 207,143 shares„of

to

one

per

Lynch. Pierce, Fenner & Smith, and Stone ft
Webster Securities Corp. (jointly); White, Weld & Co.;
Eastman Dillon, Union Securities & Co.; Kidder Pea-

Inc.

supplied by
Proceeds

Proceeds—To pay off obligations and for
telephone plant construction. Underwriter—None..

able bidders:

of common
connection
uith an amended plant of reorganization approved by
the Federal District Court of the Northern District of
Ohio, Eastern District. Price—$12.50 per share. Proceeds
off creditors and

of

Co.

Merrill

14 (letter of notification) 24,000 shares
rtock (no par). These shares are offered in

be

unit).

per

July 1 filed $20,000,000 of first mortgage bonds due 1988.1
Proceeds — Together with other funds, to be used to

writer—To be determined by competitive bidding. Prob¬

Aug.

oav

North Carolina

repay

Halsey, Stuart & Co

Lynch. Pierce, Fenner & Smith and
(jointly); Eastman Dillon, Union
Securities & Co.; Stone & Webster Securities Corp. Bid*
Had been expected to be received up to 11 a.m. (EDT)
ion July 8, but offering has been oostponed indefinitely

—-To

Power

Montana

•

Corp.: Blytli & Co., Inc.; Lehman

Industries,

to general

stock

Brothers, Merrill

Shore

stockholders; $16

to

derwriter—None.

Beinholdt & Gardner

it Lake

share

Price—To

(a maximum of $33

Together with funds from private placement of $13,750,000 of 5%% first mortgage pipeline bonds due June
1, 1979, to be used for construction program and working
capital. Office—Fayetteville, N. C. Underwriter—Kid¬
der, Feabody & Co., New York.
\1 <1
June 19

bonds

mortgage

per

postpone refunding program.

Carolina

tures and two shares of stock.

public.. Proceeds—For test equipment and working cap¬
ital. Office—76(11 N. W. 37th Avenue, Miami, Fla.
Un¬

bonds dut

mortgage
first

Underwriter—To be determined

due

Price—$24

to

amendment

Aug. fc (letter of notification) 10.000 shares of common
stock (par $1) to be offered for subscription by present
stockholders on the.basis of one share for each 8.8 shares
owned
of
record date.
Rights expire in September.

;Aug. 7 filed

2315, 195 Broadway, New York, N. Y.,
(EDT) on Aug. 26', but company on Aug.

a.m.

stock (par $2.50) to be offered in units of $20 of deben¬

Milgo Electronic Corp.

Triedrichs & Co., New Orleans, La.

to 11

decided

Natural Gas Corp.
(9/4)
July 31 filed $5,200,000 of subordinated income deben¬
tures due Aug. 15, 1983, and 520,000 shares of common

ing capital, Address—P. O. Box 550, Rocky Ford, Colo.
Underwriter—IAI Securities Corp., Englewood, Colo.

Cor working capital. Office—909 South Broad St., New
Orleans 25. La. Underwriter—Howard, Weil, Labouisse,

up

20

North

Aug. 22 (letter of notification) 60,000 shares of common
stock (par SI). Price—$5 per share. Proceeds—For work¬

f^asis of one new share for each five shares held; rights
to expire on Sept. 3. 1958.
Price—S20 per share. Pro¬
invest in fixed assets and

stone

received at Room

No-Joint Concrete Pipe Co.

ic Midwest

ceeds—To retire bank loans, to

<1

Proceeds — To refund a like amount of 44^%
bonds, series B, due May 1, 1961, which
are intended
to be redeemed on Nov. 1, 1958.
Under¬
writer—To be determined by competitive bidding. Prob¬
able bidders: Halsey, Stuart & Co. Inc.; The First Boston
Corp.; Morgan Stanley & Co.
Bids—Were to have been
first mortgage

City, Mo.

Mid-West Durex Co., Kansas

July 28 (letter of notification) 15.000 shares of common
stock (par two cents.) being offered for subscription by
common
stockholders of record Aug. 8, 1958 on the

.

Thursday, August 28, 1958

.

1, 1992.

Underwriter—None.

Margaret St., Pekin. 111.

York

amendment) an additional 200,000
SI). Price—At market. Pro-

(bv

filed

20

New

Inc.,

Fund,

Mutual

shares of capital stock (par
«ecds-—For investment.

.)

.

New England Telephone & Telegraph Co.
July 31 filed $40,000,000 of 34-year debentures due Septi

holders Of record Aug. 25. 1958 on the basis of one new

31

♦acquiring and operating the Capri

•

.

(83?)

Volume

188

Number 5772

.

,

The Commercial and Financial Chronicle

.

(833)

Lehman

Brothers, Eastman Dillon, Union Securities &
Co., Salomon Bros. & Hutzler and Ladenburg, Thalmann

& Co.

(jointly); Merrill Lynch, Pierce, Fenner & Smith
Dean Witter & Co.-(jointly).
Bids — Tentatively

and

had been

expected to be received up to 11 a.m. (EDT)
on
Aug. 27 but company on Aug. 22 decided to defer
sale pending improvement in market conditions.

Policy Advancing Corp.
March 25 (letter of notification) 30,250 shares of
stock

mon

$5)

share

debenture

be

to

stockholders

common

each

(par

at

offered

the rate

for

of

held; unsubscribed shares
holders

and

to

others.

com¬

b>

new

share

foi

be

offered

to

Price—$8

per

Proceeds—For working capital.
Office—27
St., Binghamton, N. Y. Underwriter—None.

to

share

Chenango

Ponce de Leon
Trotting Association, inc.
Aug. 7 filed 400,000 shares of common siock (par

capital.

Fla.
Co., Inc., Miami, Fla.

Underwriter—Robert

/

'

-

L.

Fennan

•

Potomac Plastic Co.

March 31

(letter of notifiCatioft) $57,500 of 6% subordi¬

nated convertible debentures and
57,500 shares of class A
stock (par one cent) to be offered in units of

common

500 shares of stock and $500 of debentures.
Pfice—$1,000
per unit.
Proceeds — For equipment and working cap¬
ital. Office—1550 Rockville

Pike, Rockville, Md. Under¬
writer—Whitney & Co., Inc.. Washington, D. C.
Prairie Fibreboard Ltd.
stock

common

(par $1.50)

to be offered for sale to residents of Canada in the Prov¬
inces of Manitoba, Saskatchewan and Alberta and to

residents of the United States
"only in the State of North
Dakota."
Price
$3 per share.
Proceeds — For con¬
—

struction

Office—Saskatoon,

purpose.

Saskatchewan,
Canada. Underwriter—Allied Securities
Ltd., and United
Securities, Ltd., both of Saskatoon, Canada.

Private Enterpriser inc.,
Wichita, Kansas
May 5 filed 125,000 shares of common stock. Price—$10
per share.
Proceeds — To be used to organize, or re¬
organize and then operate companies in foreign nations,
principally, but not exclusively, in the Far East, Near
,East and Africa.

Underwriter—None.

^Public Service Co. of Indiana, Inc. (9/17)
Aug. 27 filed 242,826 shares of cumulative convertible
preferred stock (par $100) to be offered for subscription
by common stockholders of record Sept. 16, 1958 on the
basis of one preferred share for each 20 common
shares
held; rights to expire on Oct. 6, 1958. Price—To be sup¬
plied by amendment. Proceeds—To reduce bank loans.
Underwriter

—

Blyth

& Co.,

Inc., New York and

San

Francisco.
Pure' Oil Co.

Aug. 25 filed 250,000 shares of
fered

to

officers

and

key

common

employees

stock

of

the

to

be

of¬

company

■and/or its subsidiaries pursuant to the
company's incen¬
tive stock ownership

plan.

"

Rapid-American Corp., New York
June 19 filed $1,504,000 of 7%
sinking fund debentures,
due Nov. 15, 1967, together with
105,000 shares of com¬
mon

stock

{par $1). Proceeds—The debentures are al¬
outstanding having been issued in payment of
47,000 shares of common stock of Butler Brothers which
were acquired
by Rapid American from 19 persons, in¬
cluding three directors of the corporation. The deben>ready

tures

being registered against the
be sold by present owners.

are

possibility that
they may
Of the 105,000
common
shares, 75,000 are issuable under the company's
Restricted Stock Option Plan for officers and
key em¬
ployees, and 30,000 under the Employees' Stock Pur¬
chase Plan. Underwriter-f-None.
Rassco Financial Corp.

(9/15-19)

June 26 filed $1,000,000 of 15-year 6% series A
sinking
fund debentures due 1973, to be offered in
denominations
of $500 and $1,000. Price—At par. Proceeds—For work¬

ing capital and general
—Rassco
,

basis.

Israel

corporate purposes. Underwriter
New York, on a "best efforts"

Corp.,

'• ''

.

"

V '

'

.y

Richweil Petroleum Ltd.,
Alberta, Canada
June 26 filed 1,998,716 shares of common stock
(par $1).
Of this stock, 1,174,716 shares are to be
sold on behalf of
the company and 824,000 shares for the account of
cer¬
tain selling stockholders. The
company proposes to offer

the 1,174,716 shares for subscription
by its shareholders
at the rate of

one

new

share for each three shares held

(with an oversubscription privilege). The subscription
period will be lor 30 days following issuance of sub¬
scription rights. Price—To be supplied by amendment.
Proceeds—To pay off demand note, to pay other indebt¬

edness, and the balance if any will be added to working
capital. Underwriter
Pacific Securities Ltd., Van¬
couver, Canada.
—

y

Riddle Airlines, Inc., Miami, Fla.
May 15 filed 750,000 shares of common

cents).

(par

10
Price—To be supplied by amendment. Proceeds

—For working capital.

Underwriter—.lames H. Price &
Co., Inc., of Coral Gables, Fla., for 250,000 shares; balance
on
-

"best efforts" basis.

Robosonic
June

12

National

filed 500,000

Price—$3

per

share.

Industries Corp., N. Y.
shares of common stock, class B.
Proceeds—To manufacture on a

contract basis an automatic telephone
answering instru¬
ment; the enlargement of the research and development

facilities of the company; patent and
patent applications:
public relations, and for working capital. Underwriter—
None.

Rocky Mountain Quarter Racing Association
31, 1957 (letter of notification) 300,000 shares ol
stock. Price—At par ($1 per share). Proceeds
—To
repay outstanding indebtedness. Office—Littleton,

^.Oct.

common




tal

,

of Growers

stock

the basis of

Co.,

Windover

Road

rants.

Container

Corp., Salinas, Calif.,

Suburban

the

York.'

due

1983.

All

State

of

sinking fund

Insurance

Maplewood, N. J.

share.
able

price within

a

(par

$1).

range

not

Proceeds—To repay bank loans and for
expansion pro¬
Underwriters—Stone & Webster Securities Corpi,
White, Weld & Co., and Halsey, Stuart & Co. Inc., all of
New York. Offering —
Expected

October.

Canada only.

it Texas Eastern Transmission Corp. (9/10)
Aug. 21 filed $35,000,000 of first mortgage pipe
bonds

(9/10)
$10,000,000 ffrst and refunding mortgage
1938. Proceeds—To repay bank loans and for

Inc.;

Underwriter—To be determined

share.

Proceeds—To expand

the

of

Co.

of

market

Oil

California

(New Jersey)
July 31 filed 11,406,078 shares of capital stock (par $7)
being offered in exchange for Humble Oil & Refining
Co. capital stock at rate of five Standard Oil shares for
each four Humble

Oil shares.

The

offer is expected

stock.

Price—At par

($1

per

stocks

and

bonds

and

to

acquire other life
insurance companies. Address—P. 0;lBox 678, Gulfport,
Mis3. Underwriter—Gates, Carter & Co.,
Gulfport, Miss.
Stevens Markets

Aug.

14

filed

46,642

of

common

of

one

Inc., Miami, Fla. C9/10)
shares of cumulative preferred

stock (par $25). Price—To be supplied by amendment.
Business—Operates three large supermarkets. Proceeds
—For expansion, working capital and other
corporate
purposes.
Underwriter—R. S. Dickson & Co., Charlotte,

N. C.

I

Price—To he-

stock

(par 10 cents) to be offered in unit*

share to each class of stock.

Price—$11 per unit
working capital. Office — 111 E. Mali
.St., Morristown, Tenn. Underwriter—Valley Securitiei
.Corp., Morristown, Tenn.
—

For

•-

-

Tip Top Oil & Gas Co., Salt Lake City, Utah
April 15 filed 220,000 shares of common stock, of whict
200,000 shares are to be publicly offered. Price—$5 pei

&

Proceeds—To drill two

new

Underwriter

purposes.

wells and for general

—

Andersen-Randolpt

Co., Inc., Salt Lake City, Utah.
Trans-America

Uranium

/

.

Mining Corp.

Nov. 6, 1957 filed 3,000,000 shares of common stock
3ne

State Life, Health & Accident Insurance Co.
July 9 (letter of notification) 50,000 shares of common
stock (par $1).
Priee—$5 per share. Proceeds—To be

share for each 12 shares held.

'■/».

share.

Corporation Co., Jersey City, N. J.

in

new

.corporate

share). Proceeds—For de¬
velopment and operation of an oil well. Office — 9151
Sunset Blvd., Los Angeles 46, Calif. Underwriter—U. S.

invested

one

Proceeds

•

common

mill). Price—25 cents

per

(paj

share. Proceeds—For land-

acquisition, exploratory work, working capital, reserve!
and other corporate purposes. Underwriter—None. Al¬
fred

E.

Owens

of

Waterloo, la.,

is President.

Trans-Eastern Petroleum Inc.
Feb.

27

(letter of notification) 7,500 shares of commot
(par $1) to be offered pro-rata to stockholders o»

stock

the basis

—$4

per

of

one

share.

Offiee—203

N.

new

share for 10 shares owned.

Prict

Proceeds—For drilling for oil and gaa
Street, Coudersport, Pa.
Under¬

Main

writer—None.
Treasure Hunters, Inc., Washington, D. C.
Aug. 14 filed 1,946,499 shares of common stock (par one
cent). Price—$1 per share. Proceeds—For research pro¬

exploration, and it is hoped, recovery of buried
sunken treasure and exploitation *of lost mines and

gram,

Strategic Minerals Corp. of America, Dallas, Tex
March 31 filed $2,000,000 of first lien mortgage 6% bondi
and 975,000 shares of common stock (par 10
cents). Pric*
—For bonds, 95% of princmal
amount; and for stock $'
per

share.

Proceeds—To erect and operate one

or mor«

chemical

processing plants using the Bruce - William#
Process to beneficiate manganese ores.
UnderwriterSouthwest Shares, Inc..
Austin, Texas.

Strouse, Inc.

July 29 (letter of notification) 26,850 shares of
stock

(par 10 cents) to be issued

upon

and

other mineral

deposits.

Underwriter—None.

Tricon, Inc..
Aug. 8 (letter of notification) 150,000 shares of common
stock (par SI).
Price—$2 per share. Proceeds—To pay
expenses and cost of plant option; for first year's pay¬
ment on instalment purchase contract for land and im¬
provements; for construction of plant, tools and equip¬
ment; advertising and working capital.
Office — 540

common

exercise of

war¬

.

Eastern

Timeplan Finance Corp.(letter of notification) 27,272 shares of 70-cent
cumulative preferred stock (par $5) and 27,272 share

to

Stanley & Co., New York.

Stanway Oil Corp.
Aug. 14 (letter of notification) 300,000 shares of

by

with

March 25

remain open until Oct. 14/ 1953.1 Exchange Agent—Mor¬
gan

line

supplied

None.

conditions.*
Co.

be

connection

Thomas Paint Products Co.

July 1, 1983. Price—To be supplied by amendment. Pro¬
a bank obligation of $50,000,000 dur
this year and to provide additional capital for the com¬
pany's overall program.
Underwriters — Blyth & Co.,
Inc., and Dean Witter & Co., both of San Francisco,
Calif., and New York, N. Y. Offering—Postponed be¬
of

in

May 26 (letter of notification) 1,250 shares of common
stock (par $10) and $37,500 of 6% serial subordinated,
debentures series 1958, to be offered in units of one
share of stock and $50 principal amount of debenture!
to be offered to stockholders on the basis of one unit for
each two shares of stock owned (500 of the shares are
being offered to the President of the company). Prices
:$60 per unit. Proceeds—For working capital.. Office-*
;543 Whitehall St, S.
W., Atlanta, Ga. Underwriter—

operations of

ceeds—To refinance

Standard

To

—

June 4 filed $150,000,000 of sinking fund debentures duf

cause

—

used

corporate purposes, including expansion of facilities'
principally at its Utah Division. Underwriter
To be
supplied by amendment (probably Kidder, Peabody &
Co.).

Underwriter—None.
Oil

be

supplied by amendment. Proceeds—To be added to the*
company's general funds and be available for general

the company and to meet the
statutory requirements to
enter other States and eventually to add other lines of
insurance. Offiee—197 Auburn Ave., N. E.,
Atlanta, Ga.
Standard

Price

^ArThiokol Chemical Corp., Trenton, N. J.
Aug. 22 filed 113,500 shares of capital stock (par $1) to
be offered for subscription by stockholders at the rate

Kidder,

Securities

per

1978.

Penn-Jersey Transmission Corp.
Underwriter—Dillon, Read & Co. Inc., New York.

Southeastern Fidelity Fire Insurance Co.
Aug. 12 (letter of notification) 8,981 shares of common
stock (par $10), of which 2,000 shares are to be offered
to stockholders (rights to expire on
Sept. 1), and 6,981
shares to the public (plus any unsubscribed shares).
Price—To stockholders, $20 per share; to the
public,

$26

1,

Proceeds—To

sidiary Texas

Probable bidders: Halsey, Stuart
Peabody & Co.; Eastman Dillon,
& Co.; The First Boston Corp., and
Lehman Brothers (jointly).
Bids—Expected to be re¬
ceived up to 11 a.m. (EDT) on Sept. 10.
Co.

Sept.

the construction programs of Texas Eastern and
its sub-

by competitive bidding.

Union

due

amendment.

Co.

12 filed

program.

or

selling stockholder. Underwriter—Thomson Kernaghan & Co., Ltd., Toronto, Canada. To be offered in

property, remodeling and redecorat¬
ing and for working capital. Office—1.020-16th St., N. W.,
Washington, D. C. Underwriter—None.

&

during September
v-V.,/';:■ ■/y/ '/

,

—To

—To obtain title to

construction

V'".-.

Calgary Co., Abilene, Texas
April 30 filed 2,000,000 shares of capital stock (par 25>
cents). Price—To be supplied by amendment. Proceeds*

ic 16th St. Corp., Washington, D. C.
Aug. 19 (letter of notification) 600 shares of class A
common stock (no
par). Price—$500 per share. Proceeds

bonds due

)

Texas

—

Aug.

Price—S25 per

Underwriter—Equit¬

gram.

time to time on such Exchange at a
price within the
foregoing range. Proceeds—To go to Joseph M. Shapiro,
the selling stockholder.
Underwriter
Lee Higginson
Corp., New York.

Gas

planned).

Aug. 20 filed $50,000,000 of first mortgage pipe line bonds
due Jan. 1, 1979. Price—To be
supplied by amendment.

less than the

Electric &

now

investment.

Corp., Nashville, Tenn. Offering—Held
pending passing of necessary legislation by Congress.

up

bid price and not higher than the
asking
price quoted on the New York Stock Exchange at the
time of offering. The shares will also be offered from

/ South Carolina

Proceeds—For

Securities

/^Tennessee Gas Transmission Co.

•

Simplicity Pattern Co. Inc., N. Y.
Aug. 15 filed 42,500 shares of common stock

D. C.
(public

offering of 500,000 shares

At par. Proceeds—For working capital. Office — 3172
North Sheridan Rd., Chicago 14, 111. Underwriter—None.

a

'

Tax Exempt Bond Fund, Inc.,
Washington,
June 20, 1957 filed 40,000 shares of common stock

• Sheridan-Belmont Hotel Co.

at

Ave.*

Underwriter—None.

/ ;

Aug. 19 (lerter of notification) $250,000 of 6% convertible
debentures due Sept, 15, 1963 to be offered for
subscrip¬
tion by common stockholders on a
pro rata basis. Price—

or

—

ate rental income real estate. Office—740
Irvington

Brothers, all of New York.

Price—At the market

for

*"

stock

for

or

(par SI),.

* Success,.. Inc.
Aug. 21 (letter of notification) 690 shares of common,
(no par). Price — $55 per share. Proceeds
For
working capital. Business—To purchase, own and oper¬

debentures

Proceeds—To add $50,000,000 to the capital of

Co., its subsidiary; to retire bank
working capital for expansion.
Under¬
writers—Goldman, Sachs & Co.J Halsey, Stuart & Co.
loans

..

stock

general corporate purposes.
Office—Up¬
land, Calif. Underwriter—Kidder, Peabody & Co., New

(9/8-12)

$350,000,000

common

v.

-

purchase of fixed assets of Redi-Gas Co.; the bal¬
if any, will be added to working
capital to be

available

Roebuck & Co.

16)

ance,

ing—Postponed indefinitely.
filed

100,000 shares of

(9

of

Proceeds—To retire $550,000 of promissory notes. Under
writer—J. A. Hogle & Co., Salt Lake City, Utah. Offer¬

20

;

Inc.

Sts.,.

Co.,

which 50,000 shares are to be offered
by the company
and-50,000 shares by..selling stockholders. Price—To b.e
supplied, by amendment. Proceeds—Together with other
funds, for retirement of bank loan and of
obligations
incurred in connection with minor
acquisitions and for

on

one

Diego Imperial Corp., San Diego, Calif.
filed 70,000 shares of 5!'2% cumulative convert¬
preferred stock. Price — At par ($10 per share;

Sears

Service

& Astor

A. Riecke &

:

•*

Gas

Aug. 18 filed

San

Aug.

share.* Office—Main

per

Philadelphia, Pa.

June 2

ible

Price—SI.

Norristown, Pa. Underwriter—H.

..

St. Regis share for 18 shares of stock of
The offer expires on Aug. 30. Un¬
derwriter—None.

•

stock

Ford

Regis Paper Co., New York
; /.
July 8 filed .118,746 shares of common stock (par
S5)
being offered in exchange"for*outstanding shares of capi¬

Inc. and Lehman

Aug. 18 filed 209,993 shares of

B.

V

St.

•

one

cent). Price—$1.50 per share. Proceeds—To pay current
liabilities, for new construction and working

Offiee—Bayard,

Underwriter—R.

Memphis, Tenn.

Growers Container.

subscription

one

Colo.

33

Continued

on

page

34

The Commercial and Financial

34

Chronicle

.

.

Thursday, August 28, 1958

.

(834)

properties, and the balance for other corporate

ment of

33

Continued from page

Inc., Dickson, Tenn.

Boats of Tennessee,

Wizard

(letter of notification) 150,000 shares of com¬
mon stock
(par one cent) and 75,000 shares of common
stock purchase warrants to be offered in units of one
share of stock arid one-half warrant due Aug. 31, 1962.
Aug.

Underwriter—None.

purposes.

11

,

Underwriter—Sano &

Steamboat Rd., Greenwich, Conn.

Co., New York, N. Y.

Newark, N. J.

Triton Corp.,

Aug. 1 filed $1,600,000 of 5% debentures due 1973, 4,000
of 6% preferred stock (par $100) and 48,000
shares of common stock (par $1) to be offered in units

shares

of $8,000

stock and
Price—$10,240 per unit,

of

stock.

common

operate interests in pro¬

Proceeds—^To acquire, own and

ducing oil and gas properties. Underwriter—None. Of¬
fice—11 Commerce Street, Newark, N. J.
Timothy H.
Dunn is President.

Tropical Gas Co., Inc., Miami, Fla. (9/12)
Aug. 22 filed 25,544 shares of convertible preferred

stock

to be offered for subscription by common
stockholders of record about Sept. 12, 1958, at the rate
of one preferred share for each 27 shares held; rights to
expire about Sept. 25. Price—To be supplied by amend¬
ment. Proceeds—To acquire the capital stock of South¬
eastern Natural Gas Corp., for payment of the company's
outstanding short-term bank loans and short-term notes
payable to suppliers, to the repurchase of notes receiv¬
able currently discounted, and the balance for general

Underwriter—Glore, Forgan & Co.,

New York.

Tungsten Mountain Mining Co.
Aug. :11 (letter of notification) 100,000 shares of com¬
mon stock (par $1).
Price—$1.50 per share. Proceeds—
Tb extinguish present indebtedness, increase reserve for
contingencies and working capital. Office—511 Securi¬
ties Bldg., Seattle 1, Wash.
Underwriter—H. P. Pratt
& Co., 807 Iioge Bldg., Seattle 4, Wash.
Investors, Inc., Kansas City,

Twentieth Century
Mo.

June 20 filed 2 000,000 shares of common stock (par $1).
Price—At maiuet.
Proceeds—For investment. Under¬
writer—Stowers & Co., Kansas

City, Mo.

Investors Plan, Kansas City,
\/%v
■;

Twentieth Century
Mo.

June 20 filed $10,000,000 of plans for

the accumulation
Inc. Price—A1
Underwriter—

of shares of Twentieth Century Investors,

Proceeds

market.

Stowers ■&

investment.

For

—

Co., Kansas City, Mo.

•

of America, Portland, Ore.

Corp.

Uranium

of common stock (par
by amendment (ex¬
pected to be $1 per share). Proceeds—For exploration
purposes.
Underwriter—To be named by amendment.
Graham Albert Griswold of Portland, Ore., is Pres¬
April 30,1957 filed 1,250,000 shares
16 cents).
Price—To be supplied

(letter of notification) 900,000 shares of com
mon stock. Price—At par (10 cents per share).
Proceed#
—JTor mining expenses. Office—305 Main St., Park City
Utah.
Underwriter—Walter Sondrup & Co., Salt Lak#

(letter of notification) 300,000 shares of capital
— At
par ($1 per share). Proceeds — For
development of oil and gas lands. Office—574 Jefferson
Ave., Rochester 11, N. Y. Underwriter—Frank P. Hunt
& Co., Inc., Rochester, N. Y.
Price

Utah Power & Light
June

filed

26

borrowings under a bank agreement and cash generated
in the business will be used to carry forward the con¬

of the company and its subsidiaries
amounting to approximately $43,000,000 for the period
1958-1960. Underwriter—To be determined by competi¬

struction program

Halsey, Stuart & Co.
Inc.; First Boston Corp. and Blyth & Co. Inc. (jointly);
White, Weld & Co. and Stone & Webster Securities Corp.
(jointly); Salomon Brothers & Hutzler; Kidder, Peabody
& Co.; Eastman Dillon, Union Securities & Co., and
Smith, Barney & Co. (jointly). Bids—Expected to be re¬
ceived in Room 2033, 2 Rector Street, New York, N. Y.,
up to noon (EDT) on Sept. 9.
tive

bidders:

Probable

bidding.

(9/10)
Aug. 18 filed 100,000 shares of common stock (par $10).

Underwriter—Dean

r

United Asbestos Corp., Ltd., Montreal, Canada
July 29 filed 225,000 shares of capital stock (par $1) to
be issued upon exercise of options exercisable at $4 per
share. Proceeds—To pay outstanding liabilities, to in¬
crease working capital
and for general corporate pur¬
poses. Underwriter—None.
United

Employees Insurance Co.
April 16 filed 2,000,000 shares of common stock (par $5)
Price —$10 per share. Proceeds — For acquisition oi
operating properties, real and/or personal, including
office furniture, fixtures, equipment and office space, by
lease or purchase. Office — Wilmington, Del.
Under¬

of

McKee

Ore.,

Portland,

Prospective Offerings

li

President.

supplied by amendment. Proceeds—To re¬
incurred for construction purposes.
Witter & Co., San Francisco and

loans

bank

duce

New York.

Carolina Telephone Co.,

Western

Weaverville,

N. Car.
6

fered

for

mon

89,391 shares of common stock to be of¬
subscription by holders bf outstanding com¬
one new share for each three

filed

June

stock at the rate of

The record date is to be supplied by amend¬

shares held.

Price—At

ment.

par

($5 per share).

Western

Underwriter—None

Addressograph-Multigraph Corp.
it :-W&s reported that the company plans to offer
stockholders the* right to subscribe for additional com¬
mon
stock on < the basis of one new share for each 20
shares held; Offering would follow approval by stock¬
holders on Sept. 9 of a three-for-one stock split and an
increase in-the authorized common stock "to 5,000,000
shares (par.-$S) from 1,000,000 shares. (par $10). Underwriter—Smith,-[barney & cCo., New York. .
•

(9/11)

Development Co. of Delaware

projects and other improvements.- Under¬
writer—May be Kuhn, Loeb & Co., New York. Offer¬

electric power

ing—Expected" in October or early November,.

vote

$3^,OPO

improvements under way

California

not

Central
The

a

jEdmond M. Smith, is President.
U. S. Land Development
Fla.

Corp., Fort Lauderdale,

Palm

Beach

Road,

Palm Beach, Fla.

Investment

Co.,

Inc.,

308

South

County

(par om
cent). Price—$1 per share. Proceeds—For plant rental
etc.; to retire corporate notes; for core drilling; for
working capital; and for other exploration and develop¬
ment

None.

work

Office

Statement

—

Houston.

effective June

Texas.

Underwriter-

23.

United States Telemail Service, Inc.
^ fBed 375,000 shares of common stock

(par $1)

Office—Salt Lake City, Utah.
Inc., of New York.

Underwriter-

Amos Treat & Co.,

Sept.

1,

1978.

Price—To

be

supplied

by

amendment.

Proceeds—To repay $10,300,000 of bank loans and for
construction program. Underwriter—A. G. Becker & Co.,

Inc., Chicago, 111., and New York, N. Y.

Offering —
Temporarily deferred due to present market conditions.
Universal Oil

Recovery Corp., Chicago,

III.

June 4 filed 37,500 shares of class A common stock.

—$4

per

share.

Price
Proceeds—For exploration and develop¬




Phoenix,

Western

Pacific Mining Co.,

Inc.

May 26 filed 564,000 shares of common stock. Price—At
par ($1 per share). Proceeds—For capital expenditures
and exploration costs.
Office—Santa Paula, Calif.
Un¬
derwriter—None.
Statement effective Aug. 14.
Westland Oil Co.,

Minot, N. Dak.
April 17 filed 7,799 shares of capital stock to be offered
for subscription by stockholders of record March 24 ai
additional
excess

to

be

new

one

of

share

share for each four shares held and
for

the

balance

of

such

holdings in
by four; also

the number

of

shares

holders

of

outstanding 5%

offered

one

divisible

subordinated

debentures of record March 24 at rate of five shares foi

$1,000

share.

of debentures then held.

Proceeds—For

working

Price

capital.

—

$60 pei

Underwriter—

None.

Wilier Color Television

System, Inc.

April 2 (letter of notification) 72,035 shares of

commoD

stock

(par $1) of which 10,000 are to be offered to stock¬
holders at $2 per share and the remaining 62,035 sharej
are to be publicly offered at $3 each.
Proceeds — Foi
general corporate purposes. Office—151 Adell Avenue,

Yonkers, N. Y.
Underwriter
Broadway, New York 6, N. Y.

—

Edwin

Jefferson,

3S

early

or

September.

loans.

bank

Hadley Corp.
company

at a

special meeting

of

5%

-

cumulative

convertible

the certi¬
of 200.000
stock

preferred

Convertible Jnto common stock at the rate
share. Proceeds—To retire outstanding notes
subsidiary in the amount of $768,000.
$10).

Electric

Louisiana

Co., Inc.
company's financing

March 28 it was announced that the

for the year 1958 anticipates the sale of both
equity securities (probably; preferred stock)
aggregating approximately $5,000,000. Both issues may
program

and

placed privately. V-

-

Cincinnati & Suburban Bell Telephone
Co.

(10/21)

"

announced'that the directors have author¬
ized the sale of1 not exceeding $25,000,000 debentures
having a maturity-of not more than 35 years. Proceeds
—To repay advances received from American Telephone
& Telegraph Co.' which owns 29% of the outstanding
common
stock of the company.
Underwriter -<— To be
determined by competitive bidding.
Probable bidders:
Halsey, Stuart & Co. Inc.; Morgan Stanley & Co.; Glore,
Forgan & Co. and Eastman Dillon Union Securities &
Co. (jointly).- Bids—Expected to b* r®*^ived on or about
July 7 it

Oct.

—

each

Universal-Cyclops Steel Corp.
Aug. 5 filed $22,500,000 of sinking fund debentures due

Rd.,

Western Industrial Shares, Inc., Denver, Colo.

rate of

Price—-$4 per share. Proceeds—To purchase equipment
#nd supplies and for working capital and other corporatt
purposes.

.

McDowell

East

Underwriter—First American Investment Corp.

July 16 filed 1,000,000 shares of common stock (par 25
cents). Price—$5 per share. Proceeds—For investment.
Underwriter
Andersen, Randolph & Co., Inc., 65 So
Main St., Salt Lake City, Utah.
•

United States Sulphur Corp.

Oct. U filed 1,500,000 shares of common stock

Office—533

company.

Ariz.

Aug. 15 filed 1,200,000 shares of common stock (par $1).
Price*—To be supplied by amendment. Proceeds—To be
added to the company's general funds and used to de¬
velop Pineda Island near Mobile, Ala. Underwriter-

Heritage Life Insurance Co.

repay

these two points will probably

June 25, approved an amendment to
of incorporation authorizing an issue

Central

be

Western

the

■

on

ficate

* Western Factors, Inc.
Aug. 19 (letter of notification) 191,110 shares of common

Aug. 8 (letter of notification) 150,000 shares of common
capital stock (par 50 cents). Price—$2 per share.
Pro¬
ceeds—For expense incidental to operating an insurance

'

mid-August

shareholders of the

held

of

on

until

be reached

Proceeds—To

York.

common stock.
Price—$3 per share. Proceeds—To provide the reserves
required to be held in life and accident insurance poli¬
cies, and to pay the necessary expenses in producing
.insurance. Office—Louisville, Ky. Underwriter—None.

made to finance

Electric Power Co.

Decision

determined.

Proceeds—For operating

Price—$1.50 per share. Proceeds—For
working capital.
Office—212 Beason Bldg'., Salt Lake
City, Utah. Underwriter—None.

since early this year,

been

July 14 if was announced company contemplates mar¬
keting between $5,000,000 and $7,000,000 securities in
October, 1958.-" Neither the exact date of the offering
nor the nature of the securities'to be offered has been

company,

(par $1).

had

that

preferred'stock financing.

(par

stock

of new money with; which to complete

loans

improvements, and provide additional working capital.
Underwriter—Hallgarten & Co., New York, -handled last

debt

Aug. 22 filed 420,000 shares of class A

bank

retire

quisition and development of additional oil and gas
properties.
Underwriter—W. C. Langley & Co., New

United Security Life & Accident Insurance Co.

a

plant

oversubscription privilege);
rights to expire Sept. 30, 1958. Price — $375 per snare.
a life insurance and a sickness
company.
Office—2 White St.,
Underwriter—None.

upon

about

each 10 shares held (with an

insurance

■

on Aug. 28 will
refinancing program intended to replace
present mortgage debt and preferred stock with a new
note and two ne.w isfeues of preferred stock, "to provide

Aug. 2

of $2.86 per

$3,500,000 of convertible debentures due
supplied by amendment. Proceeds—
all existing term and current debt of the

^

Inc.," Cleveland, O.
'
'it was announced stockholders

Basic,

Price—To be

and the balance will be added to the general
funds of the company and will be made available lor
the development of its present properties and the ac¬

accident

(Republic of) '

Austria

July 15 it was announced that the country contemplates
the issuance" and' sale of $30,000,000 bonds. Proceeds—FOt

15 filed

To

Concord, N. H

Co.,

Aug. 25

1970.

^ United Life & Accident Insurance Co.

and

of common stock,

,

Aug.

refund

announced that the company plans addi¬

tional financing this year, in the form

shares

Aug. 8 '(letter of notification) 410 shares of capital stock
(par $20) to be offered for subscription by stockholders
of record Aug. 29, 1958 on the basis of one new share lor

was

preferred stock, o;*. a combination of the two, including
bank loans.
Proceeds—For expansion program, work¬

Proceeds—To be

applied to the payment of $700,000 of short-term bank
loans incurred in carrying forward the company's con¬
struction and conversion program.

Co.

Steel

March 21 it

bank borrowings,

Price—To be

L.

(9/9)

bonds, 5V4% series due 1987, to repay $4,000,000 of
and the balance together with further

gage

vestment.

Myrl

Co.

$20,000,000 of first mortgage bonds due
redeem $15,000,000 of first mort¬

Proceeds—To

1988.

of Nashville, Tcrin.

both

Inc.,

Inc.

Inc.

May 6

stock.

and sup¬

ing capital and inventories., Underwriters—Blyth &
and Merrill Lynch. Pierce. Fenner & Smith.

City, Utah.
Utah Oil Co. of New York,

overhead,

plies and for working capital, etc. Underwriters—Clark,
Landstreet & Kirkpatrick, Inc. and W. »N. Estes & Co.,

Acme

April 11

Inc., Indianapolis, Ind.
Aug. 22 filed $10,000,000 of series "C" certificates and
$12,000,000 of series "D" certificates. Proceeds—For in¬

writer—None.

of subsidiary, to repay open note,
research, salaries, purchase of raw materials
opment

Utah Minerals Co.

Washington Natural Gas Co.

Unified Funds,

.

vestment.

Proceeds—For research and devel¬

Price—$2 per unit.

ident.

(par $100)

corporate purposes.

Proceeds—For in¬

Single Payment Investing Programs.

of debentures, 20 shares of preferred

shares

240

Programs, Inc., New York
(by amendment) an additional $5,000,000
in Systematic Investing Programs with Insurance, Sys¬
tematic
Investing
Programs
without Insurance and
ir Universal

Aug. 21 filed

was

2U<

'

•

v

Edison Co.
Aug. 25 it was reported that the company may issue and
sell $25,000,000 of; preferred stock.
Underwriters—May
be The First Boston Corp. and Glore Forgan & Co., both
of New York;- Offering—Expected late in 1958 or during
it Commonwealth

the first three
•

Consumers

months'of 1959.
Power Co.

•.<?

r

(9 23)

Aug. 19 it was announced that the company plans to is¬
sue
and sell* $35-060,000 of first mortgage bonds due
1988.
Proceeds —' For expansion and improvement of
service

faiflities. ;

Underwriter—To be determined by

competitive.bidding. Probable bidders: Halsey, Stuart &
Co. Inc.; Morgan Stanley & Co.;. White, Weld & Co. and
Shields & Coj (jointly); The First Boston Corp. and
Harriman Ripley & Co. Inc. (jointly).
Bids*^—To be re¬
ceived up to 11 a.m. (EDT) on Sept. 23. RegistrationExpected Aug. 29.
•

Consumers

Power

Co.

(9/24)

Aug 19 it was announced that the company plans to issue
and sell 150,000 shares of preferred stock (no par). Proties.
Underwriter—Morgan Stanley & Co,, New-York.
Registration—Expected Aug. 29
Cosden

it

Aug.

18

vote

Sept.

Petroleum
was

15

...

Co.

reported that the stockholders are
approving a proposed offering

on

to
of

$10,000,000 20-year convertible subordinated debentures.
Underwriter—Dillon, Read & Co., Inc., New York.

Volume

188

Number, 5772

The Commercial and Financial Chronicle

...

Equitable Gas Co.
July 18 it was announced that the company expects later
in the year to issue and sell additional securities, prob
ably preferred stock, to secure approximately $5,000,001
of additional funds.
Proceeds—Together with $7,000,00(
from private sale of 4 V2 % bonds, to repay short-tern
bank

loans and for construction

Underwriter*

program.

—May be The First Boston Corp.; Kidder, Peabody &
Co.;, Merrill Lynch, Pierce, Fenner & Smith; and White
Weld & Co., all of New York
* Florida Power & Light Co.
Aug: 20. McGregor Smith, Chairman* announced that the
company plans the sale of 300,000 shares of hew common
stock. Preceeds—-To finance construction program. Un¬

derwriters—May be MerrilL Lynch, Pierce,

Fenner &
Kidder, Peabody & Co., both of New York.
Offer in?—Expected in October.

Smith

and

^- Florida

Steel Corp.

(9/29-10/3)

Aug. 25 it

was reported that the company plans regis¬
tration about Sept. 9 of 74,925 shares of'comnricin stock.

Proceeds—To

selling stockholders.e
der, Peabodv & Co., New York.
.-■\;v;Gas Service Co.

UnderwYifer4-Kid-

^

March 24 it was reported that company plans to issue
$11,000,000 of first mortgage bonds later this year. No de¬
cision as yet has been made as to the procedure the com¬
pany will follow.
Proceeds—For repayment of shortnotes

term

loans

and

Underwriter

If

for

and

construction

program

determined

by competitive bidding
probable bidders may be Halsey, Stuart: & Co. Inc.;
Merrill Lynch, Pierce,
Fenner\& Smith, and White
Weld & Co. (jointly); Blyth & Co., Inc.; The First BostOD
Corp.; Lehman Brothers.
•

General!

April

7

—

Public

Utilities

stockholders

stockholders

to

Corp.

approved

directors in connection with

(possibly

plan authorizing the
offering of common stock
a l-for-20 basis); also to
a

an

on

offer certain shares

on the same terms to
employees, in¬
cluding officers, of System companies. Clearing Agent—
Merrill Lynch, Pierce, Fenner & Smith, New York. Of¬
fering—Expected late in November.

V

Grace

Line

:i Company

plaiis

government

Y>hip

Inc.

The

-

issue

to

insured

mortgages

Paula."

■

approximately

bonds

the

on

7

.

secured

"Santa

new

$18,000,000

by

first

Rosa"

of

preferred

and

and Smith:

Paine, Webber, Jackson & Curtis; Smith,
Barney & Co.; White, Weld & Co.; and F. Eberstadt &
Co., all of New York. Offerings—"Santa Rosa" offering
.expected early in September and "Santa Paula" offer¬
ing later in. year.
ner

.Great Atlantic & Pacific Tea Co.

.

Underwriter—To

program.

be

by competitive bidding. Probable bidders
Halsey, Stuart & Co. Inc.; The First Boston Corp.; Glore,
Forgan & Co.; Harriman Ripley & Co. Inc.; White, Weld
Co.; Blyth & Co., Inc.; Equitable Securities Corp.

June

16

.'-"'VI -2

in

the

last

quarter of

Blyth & Co., Inc. and J. J. B. Hilliard & Son.

Laboratory for Electronics, Inc.
July 3, Henry W. Harding, President, announced that
the diiectors are currently considering
refinancing $790,000 of outstanding notes ($658,750 held
by a principal
stockholder and

basis.

nent

vertible

$131,250 by

This

be

may

debenture

a

bank) on a more perma¬
through equity or con¬
Office—75 Pitts St., Bos¬

done

financing.

Gulf Interstate Co.
Gulf
of

Oil

82,000,000 and

ing of

August

or

a

stock

Proceeds

plans

to

For

Of $11,000,000 first mortgage bonds due 1988.
Under¬
writer—To be determined by competitive
bidding. Prob¬
able bidders: Halsey, Stuart & Co. Inc.; The'Milwaukee

Co., and Harris, Hall & Co. (jointly); The First Boston
Corp.; Equitable Securities Corp.; Merrill Lynch, Pierce,
Smith; Otis & Co:, Inc.; Smith, Barney & Co.

Fenner &

be received

Oct. 7.

on

(jointly). Bids—Expected to

,

Master

Fund, Inc., Fairfield, Calif.
Jan. 27 it was announced this newly organized invest¬
ment company *-Jans to offer to bona fide residents ol
California

10,OH shares of capital stock (par $1). Price
—$10 per shar,, less an underwriting discount of 8Vfe%.

• Michigan Bell Telephone Co.
Aug. 12 directors approved plans to sell $40,000,000 of
34-year debentures. Proceeds—To redeem a like amount
of

4%%

debentures

due

determined

by

November, 1992. Underwriter
competitive bidding. Probable
bidders: Halsey, Stuart & Co. Inc.; Morgan Stanley &
Co.
Bids—Had been tentatively scheduled to be re¬
ceived on Sept. 16, but on Aug. 26 it was voted to post¬

—To

be

pone this refunding program because of present market
conditions.

issue

a

Midland Enterprises,
March

company announced it plans to issue
Dec. 31, 1958 $3,200,000 of first preferred

before

gage bonds.

May be placed privately. Proceeds
bank loans and for working capital.

repay

or

on

mort¬

To

—

March

it

24

announced

was

that

$25) to be offered first to

common

stockholders

on

this

subsidiary

vote Oct.

6

on

1-

the

proposal and "if approved, the
company will seek authorization of the Connecticut P. U.
Commission.
Underwriter
Putnam &

of

common

Montana-Dakota
it

sell

and

stock.

$111,'

the

company

plans to issue

undetermined

amount
of first mortgage
(about $10,600,000) in the latter part of this year

bonds
or

Moore-McCormack
March 24 it
sell
a

r

was

Lines,

Inc.

(9/15-19)

announced company

plans to issue and

$24,000,000 of government insured bonds secured by
preferred ship mortgage on the liners S. S. Brasil
S. S. Argentina. Underwriters—Kuhn, Loeb & Co.
Lehman Brothers, both of New York.

first

and
and

Mountain States Tel. & Tel. Co.

July 29 it

(9/30)

for each

are

18 it

to

be

Co.,

sold

New

for the

account

expansion.
York..

:

Michigan Electric Co.

of selling

Underwriter—

(11/6)-

if
v

was

program.; Underwriter—To

be

determined

by. competitive bidding. Probable bidder: Halsey-, Stuart & Co.
Inc.;
Eastman Dillon, Union Securities &
Co.; The First Bos¬
ton

Corp.; Harriman Ripley & Co. Inc;: Bids—Expected
11 a.m. (EST) on Nov. 6. Registra¬
tion—Planned for around Sept. 24.

and

an

issue of between $30,000,000
.

American

projects, etc.

market.

,

be

publicly offered

Proceeds—For

public

works

Underwriter—The First Boston Corp., New

York.
.

Northern
June

Chairman, announced that com¬
pany plans to sell some bonds originally scheduled for
'mid-year, but which sale may now be deferred until
late 19p8 or early 1959. Proceeds—About
$8,000,000 for
construction

program.

Underwriter—To

be

determined

competitive

bidding.
Probable
bidders:
Halsey,
Co. Inc.; Kidder, Peabody & Co., and Merrill
Lynch, Pierce, Fenner & Smith
(jointly);. Lehman
Brothers; Eastman Dillon, Union Securities & Co. and
Stone & Webster Securities Corp.
(jointly); Glore, For¬
gan & Co., and Goldman Sachs & Co. (jointly).
Stuart &

Kansas
Feb.
sell

Power

&

Illinois Gas Co.

announced company will sell late this
$10,000,000 mortgage bonds. Underwriter—To be
by competitive bidding. Probable bidders:
Halsey, Stuart & Co Inc.; First Boston Corp.; Glore,
Forgan & Co.; Blyth & Co., Inc.
was

year

determined

Pacific Gas & Electric Co.
March

it

20

Light Co.

•

14 it was announced company plans to issue and
$10,000,000 of first mortgage bonds due 1988. Pro¬




was

reported

company plans sale of an
bonds and/or preferred stock

of

amount

—(1) For bonds to be determined by competitive bid¬
ding. Probable bidlers: The First Boston Corp.; Halsey,
Stuart &

Co. Inc.;

Blyth & Co., Inc.;

(2)

For preferred

Blyth & Co., Inc.

Pacific

Telephone & Telegraph Co. (11/18)
Aug. 22 it was announced company plans to issue and
sell $80,000,000 of 32-year debentures due Nov.
1, 1990.
Proceeds—For construction program.
Underwriter—To
be determined by competitive bidding.
Probable bid¬
ders:

Halsey, Stuart & Co. Inc.; Morgan Stanley & Co.
Eids—Expected to be received on Nov. 18.
•

shares
for

of

each

—At par
and

to

Telephone & Telegraph Co.
was reported company plans to offer to its
and preferred stockholders
1,594,604 additional

it

common

common

eight
($100

stock

on

common

per

reimburse

previously made.

the

basis

of

one

new

preferred shares held.

share

Price

share).
the

the compa.ij plana to
preferred stock, "sometime

or

short-term

bank

loans

for

and

construction

program.

Underwriter—For bonds to be determined

by competi¬
bidding. Probable bidders: Halsey, Stuart & Co. Inc4
Smith, Barney & Co., Glore, Forgan & Co. and Blair
& Co. Inc. (jointly); White, Weld &
Co.; Equitable Secu¬
rities Corp. Last preferred financing was done
privately.
tive

Sanborn

Scientific

Instrument Co.
(Mass.)
1
reported company plans to issue and sell
100,000 additional shares of common stock, of which it is
intended to offer 17,000 shares in exchange for out¬
standing preferred stock. Underwriter—Paine, Webber,

Aug. 4 it

was

.

Jackson &

Curtis, Boston, Mass.

Offering—Expected in

October, 1958.
Southwestern Bell Telephone Co.

(9/30)

July 10 it

was announced Missouri Public Service Com¬
mission authorized the company to issue
$110,000*000 ol

35-year debentures.
issue.

Underwriter

Proceeds
—

Standard

Aug. 28 it

Oil Co.

was

—

To refund

To be determined

bidding. Probable bidders:
Morgan Stanley & Co.

Halsey,

outstanding

by competitive

Stuart

&

Co.

Inc.;

(Indiana)

announced

company

plans

to issue

and

sell

$200,000,000 of debentures due Oct. 1, 1983. Proceeds
—To retire short-term bank loans and for
capital expen¬
ditures. Underwriter—Morgan Stanley &
Union Electric Co., St. Louis, Mo.
March 28 it was announced company plans to market
about $30,000,000 of common stock in the latter
part ol
this year or in the first quarter of 1959. Proceeds—For
construction program.

Universal Oil Products Co.

Aug. 13 it

Proceeds—To repay advances
treasury for capital expenditures

Underwriter—None., Control—Of

the

soon

was

reported that

an

issue of

common

stock

be offered to the

public, the proceeds of which
may run between $50,000,000 and $60,000,000. Approval
of the transaction rests with the New York State
Su¬
preme Court (expected within two months)> Proceeds—
To

the

Petroleum

Research

Fund

of

the

American

Chemical

Society. Underwriters—Expected to be Leh¬
Brothers, Smith, Barney & Co. and Merrill Lynch,
Pierce, Fenner & Smith, all of New York. Offering—
Expected in mid-autumn, probably late in October.
.?
man

Venezuela (Government of)
July 1 the Government announced that Kuhn, Loeb &
Co. and Kidder, Peabody &
Co., both of New York, have
been selected as financial advisors to
develop a financial
program for the country.
As a first step in the pro¬
gram a short-term credit is being negotiated between the
government in cooperation with the two investment
banking firms and a syndicate of commercial banks in
the

United

States,

Canada

and

the

United

Kingdom.

The three institutions which

are to head this syndicate
The Chase Manhattan Bank, The First National City
Bank of New York, and Bank of America National Trust
are

& Savings Association. The Chase Manhattan Bank will
be the fiscal agent for the credit.
The amount of the
new financing involved is in the
neighborhood of $250,000,000. The purpose is to restore government balances
which have been reduced by the repayment of excessive
short term obligations previously incurred.

ic Virginian Ry.
Aug. 26 the directors approved a proposal to exchange
2,795,500 shares of 6% cumulative preferred stock (par
$10) for $32,148,250 new 6% subordinated income sink¬
ing fund debentures to mature Aug. 1, 2008 on the basis
of $11.50 principal amount of debentures for each pre¬
ferred share. Dealer-Manager—Harriman Ripley & Co.
Inc., New York.
Wisconsin
March 17 it

Power

was

&

Light Co.

announced that company

plans to issue

and sell

$10,000,000 of first mortgage bonds. Proceeds—
To retire bank loans and for construction program. Un¬
derwriter

—

Probable

bidders:

determined by competitive bidding.
Halsey, Stuart & Co. Inc.; Smith,
Barney & Co. and Robert W. Baird & Co., Inc. (jointly);
Equitable Securities Corp. and Eastman Dillon, Union
Securities & Co. (jointly); White, Weld & Co., Kidder,
Peabody & Co. and Salomon Bros. & Hutzler (jointly);
The First Boston Corp.
Offering—Not expected until
late in 1958 or early in 1959.

Pacific

Aug. 22

that

announced

was

$6,500,000 in bonds

this summer."
The stockholders on May 21 voted on
authorizing an increase in bonded indebtedness of $6,500,000, and an increase in preferred stock from 25,000
shares to 50,000 shares. Proceeds — For repayment ol

in the latter part of this year or early 1959. Underwriter

•

March 31, G. W. Evans,

by

it

10

stock:

Kansas Gas & Electric Co.

American Telephone & Tele¬

owns

shares.

undetermined

850,000,000 of bonds may soon
the

on

five shares held.

over 80% of the 3,504,809
Price — At par ($100 per share).
Proceeds—To repay temporary loans made to finance the
company's expansion program. Underwriter—None.

be received up to

Japan (Empire of)
Aug. 20 it was stated that

01

graph Co., the parent,

outstanding

reported that the company plans early
registration of $20,000,000 first mortgage bonds due 1988.
Proceeds—To retire bank loans used for construction

to

was

stockholders

Proceeds—For

Indiana &

Aug.

V;;\

Underwriters—Glore,

Joseph Light & Power Co.

market

will

Utilities Co.

announced

was

an

St.

Securities

Webster

100,000 shares

Glore, Forgan &

:

and

&

Aug, 25 it was reported that the company plans early
registration of 400,000 shares of common stock,;* of Which

Inc.

stockholders.

.

notes

Stone

—

announced company plans to offer to its
record Sept. 26, 1958 the rights to sub¬
scribe on or before Oct. 24, 1958 for 700,961 additional
shares of capital stock on the basis of one new share

★ Heublein.

-

unsecured

Underwriters

Corp. and White Weld & Co., both of New York.

Co., Hartford,

—

Corn., for any preferred stock,

bonds,

Proceeds—To build pipe line system to cost about

(par
a

for-10 basis; 100,000 shares of preferred stock
(par $50);
and $18,000,000 of first mortgage bonds. " Stockholders
will

mortgage

October.

Co., New York.

Tennessee Gas Transmission Co. has applied to the Fed¬
Power Commission for permission to issue first

000,000.

in

Registration—Expected today (Aug. 28).

Midwestern Gas Transmission Co.

Inc.; Merrill Lynch, Pierce, Fenner & Smith and Kidder,
Peabody & Co., Inc., (jointly); and Blair & Co., Inc.

stock

common

stockholders

Forgan & Co. and The First Boston Corp., both of New

Inc.

28,

which

under

program

149,633 shares of

stock to

•

working capital.

Electric Co.

Aug. 27 the directors approved
it

—

Peoples Gas Light & Coke Co.
Aug. 1 the directors approved a program for the offer¬
ing 01 approximately $17,000,000 of additional capital

April 15 it

in early 1959.
Proceeds — To repay bank loans.
Underwriter—To be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co. Inc.; Blyth & Co.,

stockholders in

to

New York.

W Madison Gas & Electric Co., Madison, Wis.
(10/7)
■;
Aug. 25 it was reported that the company plans the sale

'vc

March 24

company

common

September.

^-Hartford

j

(formerly known as
Co.) intends to obtain a minimum
maximum of $5,000,000 via an offer¬

shares of

new

•"

announced

was

Interstate

was announced a public offering is expected
approximately $26,000,000 external bonds. Proceeds—
redeem certain outstanding debt and for Panama's
feeder road program.
Underwriter—Lehman Brothers,

of

York.

<

June 5 it

July 14 it

ton, Mass.f

and Robert W. Baird & Co.

(Republic of)

To

eral

Feb. 19 it was reported a secondary
offering of cbmmoc
voting stock is expected in near future. UnderwritersMay include: Blyth & Co., Inc.; Carl M. Loeb, Rhoadea
Co.; Hemphill, Noyes & Co.; Smith, Barney & Co.
•and Merrill Lynch. Pierce, Fenner & Smith
vrw

.

Panama

it will sell bonds and/or com¬
1958.
Underwriters—

stated

company

stock

mon

35

832,000 shares of 6%-preferred stock (par 8100) and 11,936,835 shares ot' common stock (par $100) outstanding
as of Dec. 31,
1957, there were owned by the American
Telephone & Telegraph Co. 640,957 preferred shares and
10,790,943 common shares.
;

Kentucky Utilities Co.

"Santa

financing will comprise two issues of $9,Underwriters—Merrill Lynch, Pierce, Fen¬

000,000 each.

construction

determined

Proceeds—For investment.

.

.

ceeds—For

(835)

To be

Worcester Gas

of

Light Co.

reported that the company plans the sale
$5,000,000 first mortgage bonds. Underwriter—To be

Aug. 18 it

was

determined by competitive bidding.
Probable bidders:
Halsey, Stuart & Co. Inc.; Estabrook & Co. and Coffin
&
Burr, Inc. (jointly); Kidder, Peabody & Co. and
White, Weld & Co. (jointly). Offering—Expected this
Fall.

,

Chronicle

The Commercial and Financial

36

.

1958

Thursday, August 28,

.

.

(836)

SEC

Appeals to
Supreme Court on

Mutual Funds

Variable Annuities
requested that the
Court
review as
to
insurance

an

company

thus subject to
securities registration require¬
regulation.

ments and

Previously the SEC sought a
favorable ruling in U. S. District

Appeals
both requests for rulings were

but

the Court of

and

Court

down

turned

on

officials

SEC

prepare

they intend

to be argued
SEC Chair¬

during the fall term.
man

Edward N. Gadsby has
the

if

that

the

if

that

said

case

a

exempt

are

court grants a review
to

in¬

ground

the

companies
from securities laws.

surance

stated

Court also

Supreme

rules

against the Commission,

will

probably

making
which
tracts

it

legislation
insurance companies
seek

sell variable annuity con¬

subject to SEC regulation.

Nation -Wide Gains

Business
"While there is
is

growing evidence that the American economy

the recovery path, there is even stronger

on

stock

needs

market

a

period

further

of

evidence that the

fund.

rities, Inc., $125,000,000 mutual
In
an
address before the
of

(

Session
at Beloit

1958

Financial Analysts Seminar'

the

adjustment,"
York economist

healthy

according to Harold X. Schreder, a leading New
and Executive Vice-President of Group Secu¬

It

announced

was

by

Nation¬

wide Securities that total

on

Aug.

date, and by broadly rising to historically high
relation to earnings, dividends,, and

vulnerable to disappointments
generally antici¬
pated business recovery."
y ,?. * .
,
\
Mr. Schreder said, "the security, analyst
today has a most challenging task of recon¬
ciling historically high prices in terms of
available values and an 'overbought' inter¬
rates,

arc

market

indicators which

X. Schreder

Harold

position with numerous longer-term technical
are gradually developing their most favorable
of

market's

the

1958

as

net as¬

against $25,619,347 on Dec.

31,1957. Net asset value per share
July 31, 1958 was $19.60, com¬

on

pared with $17.32 on

Dec. 31,1957,

position,"

juxtaposed

continued, "probably lies in the intermediate period of in¬
irregularity in the stock market as its generally extended
position adjusts to the pace of actual business recovery develop¬
ments, and to the anti-inflationary salvos fired recently by the
Federal Reserve Board when it increased stock margin require¬
ments and the rediscount rate,

therefore," Mr. Schreder stated, "our general

between

...

,

stock

purchases in this adjustment period," Mr.
emphasized, "should be selectively slanted in the direc¬
the long-depressed dynamic stocks and away from the

Schreder
of

tion
1928
more

115

the

th

conservative

types

Take

past two years.

he warned his fellow

character in

consecutive

a

with

association

of issues which have been favored for

time and select carefully though,"

your

analysts, "markets don't change their whole

day."

by

■"Organized
in

National Federation of Financial Analysts Societies
The University
of Chicago School of Business.

The

quarterly dividend
1 1

c

share

a

investment

from

OCSF

L.

MORGAN

President

I

EITHER PROSPECTUS

Reports Gain

was

announced

by Ralph P.

Jr., President, that the
Fund has continued to implement

assets in

total

its

securities convertible
of companies
conducting, as the major portion
of their business gold mining and
shares,

or

into common shares,

in

The balance

will be, invested

the

shares, or securities

common

into

convertible
of

companies

shares,

common

in

engaged

be

lion

of

certificates

or

be

rectly

indirectly, with South
The securities in
company invests will

or

be

the

of securities

listed

Common

in

of any

will

be

retained

the

by

of

the

Engelhard is Chair¬
board

African

of

American-

Investment

Com¬

Mr. Engelhard is also
Chairman of the board of Engel¬

FRANKLIN

pany,

Ltd.

Industries, Inc. and affiliated
companies. Chairman of the board
of Rand Mines, Ltd., Chairman of

CUSTODIAN

a

list of securities selected for

the

possible long-term growth of

board

of

Rand

American In¬

vestments, (Pty.), Ltd. and a Di¬

FUNDS

capital and income.

rector

of

Transvaal

and

Orange

Find out

I

list

investing in

of securities for

about this scries of Mutual Funds

ican

Fluid

Enlarges Its
Equity Position
A

economic

favorable

more

atmosphere, influenced by a re¬
duction in inventories, a lowering
the

of

and

volume

of

FRANKLIN CUSTODIAN FUNDS, INC.

easing of the

situation, has made the
of Television-Elec¬
tronics Fund, Inc. "decidedly more
optimistic about the economy of
the country," according to Presi¬
banking

management

dent Chester D. Tripp.

A prospectus on each

Please send me, without

I

J(in (I is mailable from

mation

electronics

86.9%

an

fiscal

in

convertible

and

end

the

field,

with

position

nine

equity

"It

is

our

opinion,"

Mr.

NAME.

last

spring's low point and, as a
of this feeling on the part

result

management,

your

we

invests
bonds

in
and

a

portfolio bal¬
stocks

preferred

stability,

Prospectus

I

Berkeley Street

Boston, Mass.

-I

|

ADDRESS.

I

CITY-

.zone.

.state.

J

upon

request

Loud, Abbiot & Co.

I
New York

—-

Chicago

—

Tripp

"that business and employ¬
ment
will slowly improve from

I

investment dealer.

The Parker Corporation

the

compared

and common stocks
selected for growth possibilities.
for

in

said,

between

selected

stocks

common

securities

months earlier.

Company

anced

obligation, the Prospectus and other infor-

of

quarter,

July 31, 95.2% of its assets
invested

were

at

third

Fund's

the

ended

that

A Balanced Investment Fund

concerning the Franklin Custodian Funds.

told

The mutual fund executive

shareholders

Street, New York 5, N. Y.
The

debt

consumer

considerable

a

Business Shares

1

current




Coal.

American

industry.

64 Wall

200

Trucks, Niagara Mohawk, Sinclair
Oil,
Spiegel,, Sunray Mid-Con¬
tinent
Oil, and United" Electric

a

income.

your

Bethlehem -Steel, Consoli¬
Edison, Dresser Industries,
Gimbel Eres.,
Harsco
Corp., Hilton Hotels, Island Creek
Coal, KLM Royal Dutch, Louis¬
ville
&
Nashville
RR., - Mack

seeking

possible growth and income through investment in Amer¬

Income Fund
A mutual fund

now

were

Chem¬

Gillette,

of

Free State Chamber of Mines.

Incorporated

to

Agricultural

TV- Electronics

hard

in

American

the

on

capital gains which may be

realized

man

1925

:

stocks added

ical*

anticipated that a compar¬
atively
minor
portion
of
the
company's net income will be
used for the payment of dividends
and that the greater portion of

South

Investors

Union

and
Rio
Foremost

It is

Charles W.

on

months

commitments

dated

Stock Exchange.

Johannesburg

three

Brooklyn

F. W. Wool worth.

contemplated that the major por¬
tion of the company's assets will
consist

million

Grande
Dairies,
Kansas City Southern Ry., Singer
Manufacturing, Southern Natural
Gas. Standard Oil of Ohio, Union
Electric, Union Pacific RR. and

It is

kept in the United States.

stock

in

made

Denver
Western RR.,

African pounds.

which

11.2

to

last

the

common

Gas,

deposit
di¬

to

million

1.4

new

purchased,

therefore

new high of $92,541,534.
outstanding have increased

were

other

25% of total assets may
in the form of gold bul¬

held

net

a

During

the value

the common

to

from

in mining gold, and in
other businesses, in South Africa.

liicorporat etl

A mutual fund invested

be to invest over 50% of

of

total

have grown from $10,249,-

during this period.

gaged

Get the facts

I

policy of the company will

The

040

existence

in

been

Shares

its

FREE ON REQUEST

ESTABLISHED

on

listing of the common shares
the New York Stock Exchange.

company and invested.
It is the
policy of investing in selected
company's intention that share¬
equities
for
long-term
growth.
holders will receive dividends in
On June 30, 1958 the net asset
Positions were taken recently in
United States dollars.
value of Over-the-Countcr Secu¬
Fisher-Governor; Foxboro Co.;
rities Fund was $3.63 a share com¬
The company has entered into
and William H. Rorer. Eliminated
pared to $3.17 a share on Dec. 31,
from the portfolio were holdings contracts providing for purchases
1957.
This represents a gain of
directly from present holders of
14.5% during the period under in Airborne Instruments Labora¬ substantial
blocks
of
common
consideration.
tory.
i
.*
shares of certain companies en¬

September 5,1958.
WALTER

It

Coleman,

In Net Asset Value

September 30, 1958 to stock
of record

plans to apply for

The company

net income and the entire amount

net

payable

income,

assets

that up to

meantime," he said, "major emphasis should continue
placed on stocks of well-established companies which operate
in clearly growing fields, and whose profits and dividends are
most likely to grow during the extended period of general market
adjustment.
;
T;j""
: \
\
'.
"In the

to lie

FOUNDED

has

businesses in South Africa, except

.

From $7.61 to $8.24

mission under the Securities Act.

earnings,

"Future

to their share¬

on

An underwrit¬

related activities in South Africa.

•

exemption

Incorp. Income Ftl.
Share Value Up r.:;;

Union of

a

position is a cautious one—neither highly pessimistic nor
optimistic—with an alert open-minded willingness to jnove quickly
in the directions that daily facts indicate. This seems to us to be
the only realistic market attitude until there is more clarity in
our unbalanced economy, more light than heat in the international
market

picture, and a better relationship generally
dividends; money rates, and stock prices.

bonds to pass the

holders.

incorporated
the

of

is

; Africa,

in

investments

their
local

and

the Securities and Exchange Com¬

he

"At the moment,

laws

tax

Investment

African

the

state

The Fifteenth1 Quarterly Report
ing group headed by Dillon, Read of Incorporated Income Fund. re¬
& Co., Inc. is expected to offer veals an ln<^ake^ih;th£:j*er! share 1
the common shares to investors, net asset value of the Fund frorti
in the United States and Europe
$7.64 to $8.24 during the quarter
during the latter part of Septem¬ ended July 31, 1958. In the three
ber, subject1 to registration with and three-quarter years the Fund

the

reconciliation

confining

Commission covering 1,009,000
common
shares,
£ 1
(South African) par value. Amer¬
change

companies

investment

lated

.

basic tone since 1955.
"The

which would have

Aug. 27 a registration state¬
ment with the Securities and Ex¬

Limited,

(Mills Bill) the proposal
allowed regu¬

bill

sion

elimi¬

conferees

technical tax revi¬

nated from the

In¬

Limited filed

vestment Company,

tration statement.

in the extent and vigor of the

mediate

African

set-back when the

a severe

Senate-House

diversified
management
company
of the
closed-end type.
The proposed
maximum offering price
is $28
per share, as stated in the regis¬

levels in
money

ceived

on

South

substantially, reflected this recovery to

have

market issues here

American-South

banking

investment

which had plans for offering

and abroad at $28 maximum price

under

sequence

recovery

organizations
firms
taxexempt bond funds this year re¬
fund

mutual

The

and

Inc. and

& Co.,

Read

associates to

Company,

22, Mr. Schreder said, "the
of rising new orders,, pro¬
duction, employment, personal income, and
retail sales is most encouraging. Stock prices

College

$30,211,281 on July 31,

sets were

Plans Shattered

ican-South

creased

In Net Asset Value

African Fund Files

Dillon,

Expects Irregular Market to Accompany Improving

selling variable annuity contracts
should be considered an invest¬
ment company and

Tax-Exempt Fund

1,090,9(19 Shares

By ROBERT R. RICH

SEC

The

Supreme
whether

American-South

Atlanta

—

Los Angeles

have

Volume

Number 5772

188

.

.

The Commercial and Financial Chronicle

.

substantially increased our equity
positions
and
accordingly
de¬

Investment Company Assets Now $11.98 Billion

•

creased

defensive

our

positions

which, for months, involved the
holding of substantial amounts of
short-term paper and cash."
Net
and

of the

assets

largest

mutual fund

concen¬

electronics and nucleonics, totaled

its

July

on

record and at

of

resources

31,

above

$135,100,234

on

investment

24

reached

$11,983,705,000,

week-end.

The number of shareholder accounts

ment

companies totaled 3,671,285
the industry.

for

also

recorded

shares

the

in

from

were

number

which

outstanding,

18.5%

highs

New

year.

13,038,227

of

rose

Oct. 31,

on

1957 to 15,444,896 on July 31; arid
the number of shareholders,

in

whiqh

from 65,312 to 75,171
during the same riine-morith
1

"

Net asset value per share of the

adjusted for

capital

a

tribution of 55.1 cents

gain dis¬

$8,714,143,000 at year-end 1957.
were

1957, reflected a capital value gain
16.9% during the period, Mr.
Tripp said.
^
of

■

While

there

addition
stock

was

one

Fund's

the

to

only

new

common

third
quarter of
its fiscal: year, Mr.
Tripp told shareholders, "signifi¬
position

cant additions

during

were

the

;

004,000

the

for

second

May figure
to

portfolio
purchases
included:
Aerojet-General
Corp.,
A 11 i sChalmers Manufacturing Co.,
Columbia Broadcasting System
Principal

during

the

Martin Co., National Cash

Register
Co., Otis Elevator Co., and Para¬
Eliminated
during
mond

miral

Johnson

and

Reductions

Co.

in

fected

ef¬

were

equity holdings of Ad¬
Ampex Corp., Gen¬
& Rubber Co., Varian

Corp.,
Tire

eral

Co.

Organ

Service

stocks of Ham¬

common

Associates, and Walt Disney Pro¬
ductions.

A

IlvllCoctlCi

It
oss

C

by Jack W.
of Putnam Fund Distributors
York

New

ley

they

that

believe

William M.

representative.
Plying my own plane," says Mr.
bail, "permits me to service the
ban, regional

dealers

lvestment

by automobile."
Kean

Mr.

I was

Southeast with his Piper Tri-

le

acer.

He has his headquarters

associated with L. F. Roths-

tiild

&

ork

City,

'ork

nt

120 Broadway, New
members of the New
Stock Exchange, as AssistCo.,

Manager of the

Special Sales

lepartment.

.

\

Forms Allied Securities
("Special to The Financial

TALLAHASSEE,

Chronicle)

Fla.—Wendell

in a secuoffices at 222
J.
Pensacola Street under the
iron
name
of Allied Securities
.

Heaton is engaging

ities business from

Inv.

PHILLIPSBURG, N. J.—Paul O.
oether has

formed Princeton In-

estment Co., -with
uderson

Street,

offices at 465

to engage in a

scurities business.




Institutional

of

Investors

revealed
fund's port¬
34,300 shares
Telephone & Tele¬

American

graph

Co.

Vance

report

the

to

block

a

of

stock.

common

pointed

out

that

Mr.

had

this

the

effect of increasing the per¬
centage of total assets invested in
stocks

common

the

fund's

but

did not affect

fundamental

balance.

The

invest¬

Boston

Fund

management, he explained,
re¬
gards this holding as being more
in

the

nature

quality

of

an

preferred

investment

stock

of its characteristics of

Other

new

common

because

stability.
stock

com¬

Tucson

.

for the regular

$110,564,000

of

securities for their portfolios

by open-end

com¬

the comparable period of 1957.

slightly higher,

745,000

for

the

Sales of portfolio securities

totaling $449,778,000,

first

quarter

of

1958

and

were

with

compared

$347,104,000

$362,for the

'•

investment income dividends, to shareholders
$90,034,000 during the second quarter, compared with

Payment' Of
to

come

.$110,074,000 for the previous quarter.
last year they totaled $75,861,000.

In the

second quarter

a

which, in part, reflected year-end distributions—and $22,842,000
for the second quarter of 1957.

Holdings

of

cash, U. S. Government Bonds and short term

corporate obligations

amounted

30,

.nine

by open-end investment companies, as of
to $767,443,000.
On March 30, they were

A year ago they totaled $544,246,000.

Total

net
of

up

assets

the

the

of

24

Association

closed-end

company

with 26 companies

Holders of
received

stock of closed-end investment companies
investment income during the second

common

dividends

up

from $7,365,000 for the first quarter

of 1958 and $8,453,000 for the second quarter of 1957.

°°°- In the Previous quarter, such distributions cameJo $5,014,000;
during the second quarter of 1957, they amounted to $5,386,000.
Preferred
total

for

stock
the

dividends

previous

to

stockholders

quarter

totaled

Closed-end
ernment

Bonds

Both

1953.

lated

yields

calcu¬

are

the then current indicated

on

dividend rates.

Little
funds
New

change

has

been

investment company holdings of cash, U. S. Gov¬
and short term bonds rose to $88,239,000 at the

close of the second quarter. This compares with $84,608,000
March 31 and $78,817,000 on June 30, 1957.

as

of

during the last quarter.
purchases of common stocks

have been concentrated largely in
those
equities which have the

growth

factor and only moder¬
ately in stocks with cyclical char¬
acteristics.

One

American

was

Cyanamid

Co.,

eliminated.

were

none

stock

new

certain

Con¬

made in

were

issues

already held, the
largest purchases being made in
Beneficial Finance; B. F. Good¬
rich; Owens-Illinois Glass; and
U. S.. Gypsum.

Per Share Value of

Boston

High

achieved

Fund

highs in net asset value
total

net

Affiliated

Reports

Rise in Net Assets
In

the

past nine months

increase

an

value

the

of

of

of

$1.14

or

Affiliated

the

of July, 1958, net
Company were $431,-

including the rise of two
points in both the May and June
omy

Board

Index

of

Industrial
area

of

Production; and in the
new
housing starts and

off

in

cautious

be

of

assets

record

share,

per

number

and

of

shareholders
during the second
quarter of the present fiscal year
to July 31.

of

the

is

a

them.
short

inter¬

our

The

one

period

and

some

In

addition, he reported that unem¬
ployment, on
basis,

a

seasonally adjusted

several

has

risen

months;

has made

a

good

in

steel

the

last

production

recovery

period.

2-for-l

stock

9.5%

for

the

Adjusted

six-

Atlas

was

Powder

Views
And
T h

for

the

oil

which .dimin¬

index

at any quarterend in the fund's 26-year history.
Total net assets

increased

mere

to

$164,954,447
from
$152,760,645 three months earlier.

has

recession

weekly
shown

a

from

the

second-quarter

recovery, largely
a
July downturn in
industry and continued

because
the

of

steel

slackness

in

the

dustry.

automobile

in¬

Y'":

Steel
scrap
prices
advanced
throughout the July downturn in
steel output, and, like the
business,
index, have recovered about one-

the

entire

decline

from

December, 1956 to March, 1958.
Copper scrap prices have receded
slightly, but not enough to offset
the advance in steel scrap, so that
the
able

Axe-Houghton index of dur¬
goods raw material prices

has

reached

the

highest

since October 1957.

point
of

The index

semidurable

goods raw material
prices has also shown an upward
trend

although

the

advance

has

been milder than that of the dur¬

able

goods price index.

The
ness

principal

favorable

influence has been

expansion

in

reached

share

Business

Axe-Houghton

business
moderate

value

3%

were

Money Market

e

The value of

than

issues

Axe-Houghtdn's

split of 1955 and
gains
distributions,
this
represents the highest net asset

capital

per

bond

awarded,

as

new

basis

of

busi¬

further

construction.

engineering contracts
compiled by the En-

gineering

News-Record, has
high record on the

new

a

a

the July

average of the
weekly figures.
The number of
housing units started, seasonally
adjusted, has reached the highest
level
since
early
1956, and is
27%% higher than the number

reported

sharp advance since the Fourth of
July, contrary to the usual sea¬

stock

issues

added

to

the

portfolio include: A.T. & T.;
Chrysler; Fibreboard Paper Prod¬

number

T.'Vance, President of
large
balanced
fund,
told

Gulf

dividend

Oil; H. J. Heinz; I. T. & T. and

Publishing.

Elimi¬

nations include American Natural

Consolidated

Natural

Gas;

P.

Foods; International Shoe;

Lorillard,

Marathon

Corp.;

merged with American Can);

State

Electric

Natural

in the Electric.

Gas

&
and

Gas;

Northern

Westinghouse

shareholders

Henry
the

shareholders

McGraw-Hill

of

climbed to 30,924 from 30,057, and

ucts; Ford Motor; General Motors;

declined in June; personal New England Electric; New York

income

A number of

eliminated from the portfolio and
one preferred issue.
Only decrease
in
the
common
stock
portfolio

105,275.

General

1958.

Steel.

to decline.

weeks

26,

of

month

&

the number of shares outstanding
increased to 10,332,755 from 10,-

Gas;

July

increase

Light

The

department store sales in the four
ended

shares, which amounted to $14.51
on Jan. 31 and
$15.12 on April 30,
lose to $15.89 at the
quarter-end,
an

Electric

indicators, notably expenditures
for plant and equipment, continue

Common

Prankard, 2nd, President,
noted recent upturns in the econ¬

might well

leveling

decline, or even the be¬
of a new upswing, we

pretation
covered

advances

the

ginning

31, 1957 level of $5.49.

Reserve

these

business

must

end

both May and June.

President Prankard forsees that

indicate

H. I.

Federal

in

while

641,418, the increase of $85,194,072
being equivalent to an increase
per share $6.63 as compared with
the Oct.

crease

Fund

capital stock after ad¬
for
the capital
gains

assets of the

panies

there
21%

distribution.
At

months, and new orders
by manufacturing com¬
showed a worthwhile in¬

received

Gas

Power; U. S. Rubber; and U. S.

third

Boston Fund Rises

The net asset value of the fund's
last three

Southern.

&

made

conservative! disposition of

To Record

was

Iowa

McKesson

ished by 10%.

$717,000.

$699,000. Last year, in
second quarter, preferred stock dividends amounted to $812,000.

the

31,

was

on

from

quarter totaling $9,263,000,

The

compared

1958

siderable increases

investment

to

various

the

June 30,
4.93%
based on
cost,
with 5.05% on March

and

$1,373,866,000 on June 30,
from $1,281,372,000 at the close of March. On June 30, 1957,
reporting, net assets amounted to $1,420,544,000.
rose

include

held in the portfolio

added,

Closed-End Companies

members

to

in the

Distributions of net realized capital gains totaled
$14,491,000,
decline from the first quarter's distribution of
$89,540,000—

Corp.;

made in American

were

Utilities;
Robbins; Northern
Natural Gas; Savannah Electric &
three
months
Was
the "gain
in Power; Socony Mobil; Standard
Oil
Co.
of California;
Standard
periodic
dollar
cost
averaging
Oil Co. of New Jersey; Texas
programs.
Many of these
Co.;
pro¬
grams have a sufficient time in¬ Transcontinental Gas Pipe Line;

of

o.

Forms Princeton

net asset value of $163.31

Today,

of

quarterly

addition

folio

ment

Als° °h June. 3Q, 1958 the

a

The

the

phases of the business cycle. *
The
yield on common stocks

~

during the second quarter totaled $740,534,000—up from
previous quarter purchases of $525,857,000 and $576,972,000 for

justment

Jr. has be-

M. Heine,

Leonard

pe¬

April

terval

Purchase

shares

[)me

demptions of shares for this

the

panies

in

With L. F. Rothschild

about

for the previous year.

the second,

lor

was

I

to

in

the

by investors

with $91,795,000 for the previous quarter and
quarter of 1957.

pared

in

rlando, Fla.

largely

re¬

against

-

I

services six states in

period is at¬

net asset value per share reached
a new all-time
high of $174.77ras

in the South-

ast three times faster than

oing

assets

no

riod.

Repurchases of shares—redemptions—by open-end companies
were slightly higher during the second
quarter, the Association
reported. They were valued at $111,366,000 for the period, com¬

have the first Flying Whole-

iler in the person of

month

achieved

comprising 82 savings banks and
nine life insurance departments.
A year ago the total was 71 sav¬
ings banks, and in comparison on
March 31, 1958 there were 77. A
noteworthy feature of the
last

announced

was

net

1958

$34,808,137. The gain

three

appreciation
of
$2.4 million. There were

Capital gains distribution for the quarter amounted to $1,775,-

Wlirwlocolof*

31,

earlier.

year

realized

monthly or quarterly acquisition of mutual fund shares—totaled
57,102 during the second quarter,; compared with 56,184 for the
previous three months and 53,604 for the like period of 1957.

portfolio
three-month period

the

the

were

March

a

levels

quarter.

June

on

mitments

the

from

\

of

Mutual

high

new

existing:

as

Hospital Supply; Cluett, Peabody
& Co.; and Loblaw.
Additions to
portfolio were made in Beneficial

$619,087,000.

Pictures Corp.

mount

;

a

well

as

Mutual Fund has 91 shareholders

quarter

"A," Foxboro Corp., General Elec¬
tric
Co., General Motors
Corp.,

!

"

Accumulation plans opened

second quarter of 1957.-

testing of aircraft and guided

*

'

value

market

sales
of
shares of the fund's capital stock
of about $2.8 million and to un¬

'

■

Mr. Vance noted that purchases
Boston
Fund
shares by new

shareholders during the past threemonths have exceeded the record

$40,036,301, compared

tributable

1958, was $131,974,000 (the
In June 1957, purchases amounted

$109,483,000).

was

$104,661,000..

low tempera¬

missile components."

at

for the

The total for the month of June

television and electronic tubes and

for

at

Investors

$30,219,849

On

quarter of, 1957.

also

ture

high

new

a

1958

with

On June 30, 1957, total net assets

$9,687,015,000.

pointed out was "an important
supplier of gaseous products for
carbon dioxide

date,

same

assets

Fund reached

30,

companies totaled $363,663,000 during the second quarter, com¬
pared with $333,713,000 for the first; quarter bf 1958 and $334,-

made to exist¬

ing holdings in your Fund's equity
position." The new addition was
Air
Reduction
Co.,
which
he

iv

,

Purchases by investors of new; shares in open-end investment

Nov. 30,

on

Net

Institutional

in both types of invest¬

the

on

5-';/

of

Substantial Gains

the

over

corresponding period last

investors

Total net assets of the 145 open-end company (mutual
fund)
members of N. A. I. C. rose to $10,609,839,000'at the end of the
second quarter, up from, $9,462,830,000 at the end of March and

Fund increased to $11.56 from the

Oct. 31 level of $10.36 which, when

Fund Achieves

amounted to

grew

period.

announced

the

year.
'

Open-End Companies

.

fiscal

Association

%'f■■

Oct. 31, 1957, the end of the Fund's
last

the

for

Savings Banks'

companies

On June 30, the combined net assets of the 145
open-end and
closed-end investment company members of the N. A. I. C.

new

a

level 32.1%

a

nation's

reported gains in net
assets, sales and shareholder accounts, during the second quarter
of 1958, according to the National Association of Investment Com¬
panies.
1 '■
' ' :;; %
;'

Fund, pioneer

trating investments in the field of
$178,531,343

The

37

(837)

paid

of

that
12

Aug.

"the

cents

income

share

per

27

represents, for
those shareholders who accepted
the February distribution of capi¬
tal gains in additional shares, an
on

increase
the

of

amount

more

paid

than

at

over

time

a

ago."

year

On

the

same

basis,

dividends paid from
the

6%

this

six

months

he

added,

earnings for

just ended

were

about 11% above the amount paid

ders

only last February.

for

lumber

sonal

movement,

prices

halve

orders

have

and
advanced.

have

Or¬

shown

a

lumber
Lumber

been

higher
than
eight consecutive
weeks, and with a few exceptions

production
have

for

been

continuously higher
beginning of March.
applications, sea¬
sonally adjusted, have reached a
new
high record.
Cement ship¬
ments have shown a sharp recov¬
since
FHA

the

insurance

ery
from
early-this

The

the

Recline

reported

year.

principal influence tending

Continued

on

page

39

Chronicle

The Commercial and Financial

38

.

.

Thursday, August 28. 1953

.

(838)

statistical tabulations

The following

Indications of Current

latest week

week

Business Activity
AMERICAN IRON AND STfcEL INSTITUTE:
Indicated Steel operations (per cent capacity)
Equivalent to—
Steel ingots and castings (net tons)

bulk terminals, to transit, in
unfinished gasoline (bbls.) at

Finished and

Aug. 31

§1,717,000

pipe lines—

Revenue

AMERICAN

OF

Aug. 15

CONSTRUCTION

—

-—Aug. 16

(no. of cars)—Aug. 16

U.

Electric output

INC.

IRON

(per

"a

York)

Government Bonds
corporate—

Aaa

581,817

750,640

518,061

521,832

451,056

605,314

77,863,000

32,292,000

A.

Railroad
Public

Group

—

Utilities

Industrials

Group—:

Group,

—

POND YIELD DAILY
Government Bonds

MOODY'S
U. 8.

—

-

AVERAGES:

*

)v

*7,965,000

7,510,000

404,000

411,000

466,000

468,000

12,486,000
272

on

••■120

Baa"zi~~I—I—
Public

Industrials

J"B- 26

Aug. -6
Au«- £
Au6- 26

—

—,

Group

AuS- 26

MOODY'S COMMODITY INDEXNATIONAL PAPERBOARD
Orders received (tons)
Production (tons)

—

of activity
Unfilled orders (tons) at end of period
Percentage

12,851,000

12,319,000

12,023.000

262

260

264

6.188c

5.967c

5.907c'1

$66.49

$66.49

$66.40

*$41.83

$38.17

$53.00

ACCOUNT

OF

Total

sales

Other transactions initiated on

Total purchases
8hort sales

Other

sales

Other sales———,
Total

Total

Total

sales

—

DEALERS

EXCHANGE

Odd-lot

—

SECURITIES

sales by dealers

Number

of

SPECIALISTS

,

v

Customers'
value

..

bagsrir:—:_2_2_2±2222
Sorghum grain (bushels )__„2__2_____—____
Cotton (bales) __-l~——2__
(100-pound

Hay,

all

FOR

-

ACCOUNT OF MEMBERS

round-lot

Short

sales

Other

sales

Total

WHOLESALE
LABOR

—

=

All

U.

S. DEFT.

18,369

18,269

2,450

2,360

87.33

95.32

90.20

94.26

95.32

96.07

98.09

92.64

92.50

93.23

95.32

90.48

85.85

85.98

87.99

84.04

Sweetpotatoes

89.51

89.64

91.05

88.40

Toijacco- < pounds)

Sugarcane for sugar and seed
Sugar beets (tons
2

Early

3.42

3.31

4.24

4.20

3.93

3.88

3.11
4.05

3.71

4.12

4.05,

4.00

3.87

4.23

4.19

4.05

4.38

4.72

4.71

4.56

4.86

4.45

4.44

4.34

4.53

4.25

4.-19

3.97

4.36

4.01

3.96

3.83

4.30

391.5

395.8

403.1

421.1

261,628

298,376

262,002

260,018

294,259

288,874

255,448

286,966

93

92

83

94

477,075

Aug. 22

110.31

110.39

commodities other than

farm

and

foods

FACTORY EARNINGS

Weekly earnings—
All manufacturing
Durable

goods

2
2

2,442,080
590,890

2,425.130

11,322,770
277,720

210,600
1.039,990

Aug.

2

503,330

526,810

278,770

145,720

Aug.

2

537,630

595,510

299,070

158,020

goods
2-22

'

Durable

Durable

goods

Nondurable

Unadjusted

47,190
367,770

Net

414,960

Other income

Month of

2

3,833.320

3,897,210

2.007,364

1,689.010

-Aug.

2

833.420

843,810

430,450

270,090

-Aug.

2

3,231.812

3,122,679

1,758.986

1,553,480

Aug.

2

4,065,232

3,966.489

2,189,436

1.823,570

—1

2

1,520,845

1,478,058

2

$68,972,997

$68,517,401

$45,019,661

2
2

1,596,284
12,556

1,521,088
19,974

902,816
6,599

1,200,138

890,848

2

1,583,728

1,501,114

896,217

882,770

Aug.

2

$70,358,060

$66,151,566

$38,883,018

$43,945,336

Aug.

2

555,590

506,670

294,410

229,350

Aug.

2

294,410

229~350

331,080

501,190

Aug.

2

555,590

Aug.

2

450.250

489,470

Other

2

1,094,050

1,203,580

617,440

366,710

2

18,458,120

18,527,810

10,237,690

8,840,780

2

19,552,170

19,731,390

10.855,130

9,207,490

OF

■

,

$82.39

»

88.00

89.89

75.08

39.2

39.2

,39.8

39.6

40.0

74.47 "

'

,

.

39.4

'

-

$2.07

$2.12

2.20

2.27

V

,

'

1.89

;

1-94

RESERVE
133

*131

145

125

*132

135

————

$36,900,976

$44,004,297

—

19,408,443

20,876,603

18,926,390

56,309,419

64,880,900

109,213,275

4,141,189

4,753,563

—

——

——

._

S. CLASS I

U.

income
—2
—

i

income—__2_

from

for. fixed charges--——

fixed

$31.^86,885

.

4,588,165

52,168,230

60,127,337

95,625,110 '

20.761,402

28,519,448

fc5.222.863
4,231,553

3,983,499

4,033,976

■

2—,

—

'

50,180.879

.——_—1—

13,057,669

income

On

taxes—

appropriations:

stock

TREASURY
RECT
OF

MARKET

2—

charges

,

TRANSACTIONS

S. A.—Month

48,256,178

15,102,391'

"29,896,376

24,537,760

29,808,065

591,114

1,818,626

604,931

1.66

1.90

IN

3.15'

DI¬

SECURITIES

GUARANTEED

AND

U.

50,181,644

17,930,487

-

"

——-.

to fixed

income

of

£

stock——2_7.—2—_■-.

preferred

Ratio

60,991.310y

24,535,949

16,727,426

—_

Depreciation (\vay& structure & equipment)

of June:

$73,296,450
Net

S.

purchases

STATUTORY DEPT LIMITATION

GOVT.

—As of

at

face

July 31 (OOO's omitted): .
amount that may be outstanding

time
Outstanding—
any

.

public debt
obligations not

gross

Total gross

owned

by

$280,000,000

$280,000,000

$275,000,000

275,466,164

276,343,213

272,468,742

102,094

101,220

106.672

$275,568,258

$276,444,438

$272,575,414

429,147

430,998

$275,139,111

$276,013,439

$272>,130,975

4,860.888

3,98G,560

2,869,024

$275,568,258

$276,444,438

$272;575.414

>

the

public debt and guaranteed

—.—\

obligations

gations

$182,398,500

$58,167,000

—

Guaranteed

Aug.
Aug.

$85.10

89.83

2.28

charges-——
deductions ——(_,2_2_—:__2_'

Total

Aug.

190

141,350

75.27

1.94

FEDERAL

deductions

after

Income

U.

506~670

$83.50

$2; 13"

—'

:

available

Income

8,078

Aug

240

v

•L-'-

—.2

2.

—

—_—

On common

$60,584,735

117

38.8

-

operating

Miscellaneous

Dividend

Aug.

118

~

,

THE

income

Federal

Aug.

2,599

177

39.4

-1

1__—2—

—

^

Net income

979,005

31,676

2,704

186

April:

railway

Total

—Aug.

28,068

2,698

(Interstate Commerce Commission)*-*

RYS.

340,870

132,430

611,006

28,204

:
2

•
^

INCOME ITEMS OF

419,094

757,269

——

:.<■

___—2————2

146,760

904,029

62.335

J
,

-

OF

818,340

789.742

74,889

SYSTEM—1947-49—ioo—Month of July: '

208,230

997,972

75,510

•

Seasonally adjusted 2;

822,620

2

118.548

INDUSTRIAL PRODUCTION—BOARD OF GOV¬

2
2

123,920

—

.22_——

goods

2

Aug.

"125,999

179,200

——1—

-

goods
goods

Aug.
Aug.

43

i.

40.135

_

1
.

15,497
■

52,218

^ •

manufacturing

Aug.

478.576

14.549

51,918

—

\

,

Nondurable

1,195,170

628,350

6.750

.

2

—

.

Aug.

7,332

LABOR—Month of July:

Nondurable

—Aug.

18.053

7,332

HOURS—WEEKLY
U.
S.
DEPT. OF

AND

ESTIMATE

AVERAGE

239,539

1.660.553

14,631

Apricotes (3 States) (tons)^_—
Pecans (pounds) -2_2——2-—

Hours-*.,

19

118.8

119.0

119.3

118.0

Balance

—Aug. 19

93;0

*93:2

94.1

92.1

under

.Aug. 19

110.7

*111.2

112.4

106.8

Aug. 19

108.2

109.9

112.9

97.5

Aug. 19

125.9

126.0

126.0

UNITED

outstanding

subject

not

debt obli¬
limitation.

public

to debt

total

face

outstanding^

444.439'

amount

above

STATES

of

obligations, issuable

authority—
GROSS

DEBT

DIRECT

AND

GUARANTEED—(OOO's omitted):

125.7
As

foreign crude runs. §Based on new annual capacity of 140,742.570 tons
as of Jan. 1, 1958, as against Jan. 1, 1957 basis of 133,459,150
tons, fNumber of orders not reported since introduction of
Monthly Investment Plan. fPrime Western Zinc sold on delivered basis at centers where freight from East St. Louis exceeds
one-half cent a pound.
.
filnciudes 985,000 barrels of




2—

2_,
(tons)——_2.

States)

(12

9.047 :>

32,209

17,542

2

-

156.981

33

—

(tons)

10,459

35.449

1,688,559

—2_—i

(pounds);———,
2-22—.
-2—2
commercial crops (bushels)—r—2—_
Peaches (bushels) 2—22_2-^_____2_22—
Grapes

11,042
35,811

17,807

——22--,

Apples,

Pears < bushels)

4,408
30.104

1,728,292

(tons)—2„I._

Hops

Cherries

3\904
26,901

256.344

—

—.2.

Hourly earnings—
All manufacturing

Aug

foods.

figure,

2

(hundredweight)

(tons)

3,904

'26;901

173,906

_2222

Total

4.40

4.24

:22l_„

6,790

4:,780

4,780

-

2/2_2

—22_

summer

Fall

3.58
'

1,445,110

:

1

2

summer

Late

Hroomcorn

7

1,657,410
.

93.04

.

-

3,270 .'y
479.841

_2_t_l_2

100.65

91.62

.

'

15,771 '<

535,887

—-2_2.

97.94

90.77

^2,

;2

.

)

10.964
121.402

114,246

115,936

4.852

93.08

98.73

561.977

2496,132

.2

43.139

22.087

Grand

products

"Revised

46,977

100):

Meats

All

!47,989

25.754
••

5.001

Deduct—other

commodity

Processed

31,804

22,160

Commodity Group—
Farm

,

36,682

/

5,237

90.92

a

(1947-4#

.

26,528

Treasury

—

'•

435,695

31,386

(tons i___

97.16

(SHARES):

NEW SERIES

200,221
1,308,360

22,611

sales—

PRICES,

198,778

11.313

(hundredweight!—

.f.'
>

1,255.244

69.092

Early spring
Late
spring. 2—

v.

39,680

14,985

.18,753

10,607

92.50

96.54

239.901

63,339

89.74

96.69

213.763

10,604

Potatoes

93.23

947.102

707,201

63,941

94.375c

95.92

3.402,822

1,343,490
1,129,727

Hay,

26.000c

92.35

3,311,249

'

Hay,

Total

.

2,405

11,583

96.500c

12,300

-,

2.498

423.175

,

j

24.000c

152,970

sales—

3,956

2,474

34,093

(tons>2^.^_2.---.2_.—_w2____2_l2_—.•

94.750c

TOTAL ROUND-LOT STOCK SALES ON THE N. Y. STOCK
EXCHANGE AND ROUND-LOT STOCK TRANSACTIONS
Total

,

231,204

-

24.700c

20.300

.

3,949

3,530
3.948

452,592

(bushels i

Rice

(customers' purchases)—t

Round-lot purchases by dealers—
Number of shares

"7.411

1,345,157
£;

'

94.500c

265,500

__

*

•.

24.700c

68,700

Other sales

-,

;

10.000c

451,865

Aug.

3,616

-i-v

--__2__.._

10.000c

653,740

Round-lot sales by dealers—•
Number of shares—Total sales

Short sales

(bushels)

Durum

10.000c

34,300

,

3,645

-^249,957 r.if

(bushels)

spring

,.v,.Other spring (bushels)—,_—2—_
Oats (bushels)
—11—tr—2rr---2ll-2
Barley (bushels) •_2—l-■—lli'22212-222
2 Rye (bushels

ON

„

-

1,170,768

„

10.000c

568,620

other sales
—

9,883

3,487,159
'1,420.725

all
(bushels)_ 1L.;—21212illlllClX _ (bushels)
—21'i2—lit——

Wheat,

10.500c

2

Customers' short sales

Dollar

DEPT.

S.

1 (in thousands): '
(bushels)——X—— 221——.SI

all

13.800c

109.30

Aug.

10,070

8,135

-

CROP
REPORTING
OF AGRICULTURE—

14.000c

2

total sales-

—

10.800c

Aug.

—

.

U.

BOARD

N. Y. STOCK
EXCHANGE COMMISSION:

Number of orders—Customers'

PRODUCTION

11.000c

1——Aug.

Dollar value—,—
Odd-lot purchases by dealers (customers' sales)—

>

10,068

—-

_

8,165
1.905

•-

.

10.500c

1,250(590

shares—

.

10.800c

11.000c

471,682

,

AND

accounts
credit

15.127

<- 1,933 :
•

.1——

:

2

1,942 2 '
"8,218

loans———_—2_2—

payment

Charge

Corn,

■TOCK TRANSACTIONS FOR ODD-LOT ACCOUNT OF ODD-

LQT

credit

10.500c

1,279,360

-

-

32,608 y'

;

V:

;

1
——

10.550c

1,838,600

.

I'-' 2:

10.500c

2,466,950

sales

Other sales

loans

Service
CROP

for account of members—

purchases

Short

8,176.

221—2__i__-_
Beans, dry edible (cleaned) (100-pound bags)
Peas, dry field (cleaned) (100-pound bags)22
Soybeans lor beans (bushelsV—_2_2.— 2—
Peanuts (pounds)
2l__l—'*•

108.73

—

transactions

8,203

Hay, lespedeza

439,249

-

round-lot

goods.—2222——2—-

modernization loans———.

and

Personal

SELECTED

sales

Total

Repairs

14,713-

26.075c

1,938,740

—

32,957

*

14,691

28.000c

transactions initiated off the floor—

Total purchasesShort sales—

$42,491

$43,027

;

—1

—.

24.875c

2,529,630

—

,——

2,2']'.

$43,122
3S.054

•v

—.

26.100c

2

Other salesTotal

2.;

<

.

25.175c

Aug.

;

..

———

_

consumer

ERNORS

*

"

;■

-

credit

26.100c

1.001,640

1
the floor-

274,445

credit

term

25.300c

MEM¬

,

-

2*

'

All

—

credit

*

677,410

y

26.100c

SPECIALISTS:
specialists in stocks in which registered—

Short sales

441,705

-2

"•

951.855

RE¬

wild <tons)
*
—
*—
'
alfalfa (tons >___
—22
Hay, clover and timothy (tons )21—22—__i;._

BERS, EXCEPT ODD-LOT DEALERS AND

Transactions of
Total purchases

628,582

—

Aug. 16

PRICE INDEX—

FOR

TRANSACTIONS

ROUND-LOT

———Aug. 16
-Aug. 16
-Aug. 16

.——

30:

June

of

as

consumer

Instalment

-

ASSOCIATION:

OIL* FAINT AND DRUG REPORTER
1949 AVERAGE —100—

1

122

110

$41.83

10.750c

Au6- 2(>

GroupUtilities Group—

Total

Winter

$66.49

6.188c

Auf

~

Railroad

millions

in

.

.

Flaxseed

Aug. £

Average corporate
Aaa

Aa

824.402

'■(•

* * 637,218

.

SERIES—Esti¬

intermediate

and

633,782

1,031,506
•:

Sl.589.073

$1,899,389
1,266,107

-

Au8- 26

*——

FEDERAL

THE

,

>'--2

1,660,088

153,493,000

8,110,000

Aug. 26
.*ug. 26
£
—Aug. 26
,-Aug. 26
Aug. 26

A»

OF

Ago
-i

prop as of Aug.

26
Au8- 26

•

•

9,570,000

„

...

-

mated short

$257,744,000
104,251,000

$455,420,000

-

Baa

GOVERNORS

Automobile

618.580

941,666

———2 -.n

I.--.

—:

_

SERVE SYSTEM—REVISED

50,923,000

G25.991

124

AVERAGES:

I

Average

'C OF

146,703,000
•

$2,601,754
-

—

CONSUMER CREDIT OUTSTANDING-1—BOARD

33,021,000

25,631,000

36,109,000

AuB- £
Auig. 20
Aug. 20

at

at

MOODY'S BOND PRICES DAILY
U. S-

113,483,000
67,199,000

45,261,000

Au®' 2^
Aug.

at——
(primary pig. 99%)
(New

67,251,000

121,201,000

£

(East St. Louis)
tin

124,838,000

67,165,000

224,914.000

vug. ij
Ul8- iy

—

Export refinery at
at
(St. Louis) at
tZinc (delivered) at

Straits

128,767,000

148,749,000

QUOTATIONS);
1

J.

Lead

Aluminum

172,136,000

184,858,000

_

Lead (New York)

Zinc

179,556,000

DUN &

—

——

at__——

refinery

177,297,000
26,306,000

Aug 21

Electrolytic copper—
Domestic

176,487,000
27,018,000

166,401,000

io

(E. & M.

lg,425,000
7,843,000

211,662,000

Aug. ~2

INDUSTRIAL)

ton)

Scrap steel (per gross
METAL PRICES

6,891,000

Aug.

lb.)

steel

(per gross ton)

6,641,000

INDEX—FEDERAL RESERVE

COMPOSITE PRICES:

AGE

Pig iron

Federal

■■

:;£\>,J..

municipal

and

State

Year

Month

■

of

'i—"2—i:

...

construction

All

-

Finished

6,897,000

1.304,000

152,643,000

10

(in 000 kwh.)

BRAD STREET,

11,266,000

302,777,000

}!•

AVERAGE =

(COMMERCIAL AND

FAILURES

27,509,000

1,545,000
11,730,000

152,018,000

INSTITUTE:

ELECTRIC

construction

Public

27,261,000
1,852,000

27,589.000

11,628,000

$336,876,000

AuB- 21

BUREAU OF MINES):
lignite (tons)
Pennsylvania anthracite (tons)
SYSTEM—1947-49

7,969,000

161,376,000

vug. 21

—

—

-

COAL OUTPUT (U. S.
Bituminous coal and

EDISON

7,456,000

$373,038,000

'

1

DEPARTMENT STORE SALES

6,836,915

Month

—

a.

U.

Single

—a«g- f i
Aug. 21

construction
Public construction
State and municipal.
Private

Federal

6,528,385

ENGINEERING

construction

S.

6,836,185
7,597,000

NEWS-RECORD

(OOO's omittedi:
S. construction.

July

2,103,000

1.561,000

Previous

:

EN-

—

of that date 7

are as

Month

CONSTRUCTION

ENGINEERING

CIVIL

Noninstalment

NEWS-RECORD:
Total

Ago
82.2

57.8

Other

RAILROADS:

(number of cars)
freight received from connections

ENGINEERING

CIVIL

—

freight loaded

Revenue

(7,713,000
27,577,000
1,950,000

-—Aug. 15
-Aug. 15

Distillate fuel

ASSOCIATION

6,838,935

of quotations,

cases

either for th*

are

Latest

Total

J1jj- J®

oil (bbls.) at—
Residual fuel oil (bbls.) at

"1,690,000

in

or,

Year

Month
Ago

*62.6

that date,

on

Private

(bbls.) at—-

Kerosene

Wfeek

Dates shown in first column

month available.

or

month ended

GINEERING

Aug. 15
-Aug. 15
Aug. 15

Stocks at refineries,

Week

$63.6

(bbls. of
—•—-——Aug. 15
——Aug. 15
—
-Aug. 15

gallons eacfa).
—
Crude runs to stills—daily average (bbls.)
Gasoline output (bbls.)————-—
Kerosene output (bbls.)
Distillate fuel oil output (bbls.)
Residual fuel oil output (bbls.)

Previous

Aug. 31

AMERICAN PETROLEUM INSTITUTE:
Crude oil and condensate output—dally average
42

Latest

or

production and other figures for tht

cover

of

July

General

Net

;

3

funds

balance

debt

Computed

annual rate-

—

.

1

4,475,128

5,118,714

9,749,102

$270,449,544

$266,695,336

$268,100,286

2.638%

2.741%

2.632%

-

Number 5772

188

Volume

.

.

.

The Commercial and Financial Chronicle

(839)

Continued'from

37 ':-:

page

more-than half the entire decline

'

the

in

money-easing

October, 1957

MnfnalFunds

to

'

to retard business recovery is con-

-

tinued

=

reached-

the

■

adjusted,

lowest

level

to

follow

.

.

.

the

trend

of

yields
to reflect

on

governments

unusuat-.and abnormal situation in
the money market.
Another un¬

1952,. although the decline
been quite so severe as
-iridieatediliyi unofficial retail sales
figures. Use4 car prices have held
not

cline

unusually well, however^ and
new

high

so

car

as

in

year

should

good

start.

common

previous
the new-model

lower

off

get

to

a

appear

stocks to

than

the

level

a

yield

slightly
on
high-

grade corporation bonds,

fairly

Market

loans, to encourage an expansion
in security loans, to
bring about
a
marked expansion in member
bank holdings of government and
other bonds, and to
prolong the
gold export movement. These de¬
explained

enough

on

these

bonds

to

an

9

company

.

cause

than

more

DIVIDEND NO. 177
j.

increase

in
interest rates and to bring about
the most confused money market
an

actly how

the

present

abnormal

straighten

or

itself

probable

States is in for

but

out,
the

that

HELME

P.

J:

NEUMANN,.. Beereter^-

the

holders of record at the close of

business

ROBERTSHAW-EUUON

September 15, 1958;.

on

1

The stock transfer books of the

CONTROLS; COMPANY

Company will not be closed;

it

United

RichmonA,

HERVEY J. OSBORN,
A-

commercial

of»

per. share has been de¬

clared
par

INTERNATIONAL

September. 20, 1958

COMMERCIAL SOLVENTS

The Directors

DIVIDEND No. 95

v

A dividend of
has

five

cents

cents

outstanding

this

Corporation, payable

the close of

at

of

A.

share

on

business

regular quarterly dividend .of 37HC per
Common

share has been declared on the

Stock
«'

September;

payable

stockholders

record; at

of

1958 to
close of

22,
the

business

September 10,1958. The transfer
books will not be closed..

GERARD J- EGER, Secretary

Sep¬

on

A

JAMES A. WITT.

Secretary

August 20,1958

on

September 5, 1958.

Preferred Dividend No. 79

BERGEN

R.

Secretary.

August 25, 1958.
a

COMMON STOCK

per

stockholders of record at the close
of business on. September 15, 1958.

on

stock

common

(50$)

ember,10,1958,

MR. CONTROLS

of International

share on the common
stock, payable October 15, 1958, to

(5c) per

today been declared

the

of business Sept-

Harvester Company have declared
quarterly dividend No. 174 of fifty

Corporation

COMPANY

.has declared this day

stockholders
of
record at the close

to

COMPANY

record

Th"e Board-©f Directors

Stock, payab1e

HARVESTER

tember 30, 1958, to stockholders of

BAKING

$2§.00

percent

vertible- Preferred

DIVIDEND NOTICES

DIVIDEND NOTICES

CONTINENTAL

the

on

value

Cumulative- Con¬

industrial

and

regular quarterly

dividend of;. $034375

of

.

recovered

Vs.)

PREFERRED; STOCK

Exec. Vice Pres* & Sec'y.

market

has

COMPART

Plaza,:. New York.2L. N. Y,

payable October 1,1958, to stock¬

period of higher

a

a

W.

Rockefeller

On. August 2?;, 1958, a quarterly dividend; of
43%,. cents per share; on the Preferred Sf
and a dividend" of 40 cents per sharer
Common Stock were declared, payable
1, 1958, to stockholders of reoorckafc. f
ot business September- 12, 1958V

capital stock of this Company,

_

situation will be straightened
out,
seems

A dividend of ONE DOLLAR
share has been, declared op

situation in many years. It is im¬
possible of course to foresee ex¬

share

of $ 1.37 V2 per

GEORGE

International Sait

in

Department of E. W. Axe & Co.,
Incorporated.

easing

DIVIDEND NOTICES

un¬

money

averages.

vigorous

and

in

circulation, have been

the money
long-term's
by the Federal Reserve
interest rates have advanced. The' Banks earlier in the year.
The
yield on Treasury bills has crossed combined effects of reducing re¬
the Reserve Bank discount ra'te,- serve requirements, reducing the
and the San Francisco rate 'has discount. rate, and open market
been advanced. Long-term Treas¬
operations
(any
one
of which
ury : bond
prices have declined might have been sufficient for
sharply despite heavy purchases the purpose at hand) was to cause
by the Reserve Banks and the a marked advance in stock prices,
Treasury itself, so that the yield to prevent any further liquidation
short-term

increase

.The upturn in interest rates is
attributable largely to the too-

accord¬

DIVIDEND NOTICES

<

velopments, together with

interest rates which may last for
some little time.—From Research

ing to Standard & Poor's

"v'V/.;-,

an

development has been a de¬
in
yields on
high-grade

inventories-are
some

summers,- so* that

usual

-

.

but
the
the reversal in the

has

Money

*

governments

on

bonds;

since

Both

-

yields

?

•arid- corporate

sharpness of

dealers'

'

between

abnormal spread

an

gbVerhrhent bond market and the
failure of corporation bond yields

not

'

In

! registrations,, seasonally

up

,

aiitomo-

the

1958.

^bile industry.. New passenger car

have

.

slackness in

April

of

part,, this advance represents the
correction:, of

<

episode

quarterly dividend

the outstanding $5.50 dividend Preferred

Stock, payable October 1, 1958, to„ stockholders of record at the
close of business

September 12,' 1958.

V;

.

1

Common Dividend No. 54

regular quarterly
dividend; for the third quarter of the year 1958, of 55(ft per share
on th& outstanding. Common lStock,: payable October; 1,
1958, to
holders'of record of such' stock

The
to

at

a

Diamond
Chemicals

the close of business September
.

v-

•

•

Dividend

on

Common Stock

1958.

Company has increased the regular quarterly dividend from 50$

55^

per

share

on




of the

year

1958.

Company have

\

on

DIVIDENJD NOTICE
The Board of

.payable Sept. 15, 1958 to hold¬
ers of common capital stock of

be closed.

record
WILLIAM FISHER

clared

the

S, CARMICIIAEL, Secretary

Cleveland, Ohio

-

Directprsde-

regular quarterly

a

dividend of 2 H per share-on,

Sept. 5, 1958.

/ DONALD

TREASURER

'

#■

Aug. 21,1958
declared a regular quarterly
dividend of 45 cents per share,

The stock transfer books will
not

Senior Vice President

The Directors of Diamond Alkali

<

SUNDSTRAND
MACHINE TOOL CO.

PAUL E. Shroads

the outstanding Common Stock effective with
the dividend payable Octo
bcr 1, 1958, for the third
quarter

Dividend,

*The Board of Directors, at a
meeting on, August. 21, 1968,
declared a quarterly dividend of
seventy-five cents per share on
the capital stock-, which will, be
payable September 11,195$, to
stockholders of record Augviat 28,

Regular. Quarterly

1958.

12,

,ts,b

/■
/ i

national
stjSiEL

The. Board of Directors has declared this day

3f

common

stock, payable

September 20, 1958,

Aug. 22, 1958

shareholders

August 27, 1958

DIAMOND ALKALI COMPANY

of

September 10,1958.
G. J.

CBfumMihtjini lite

te

record

/

L ANDSTROM

Vice Pre$ident*Secretary
Rockford, Illinois
August 19,1958

EARNINGS

STATEMENT

Southern California

FEDERAL INSURANCE

Edison

Company

^COMPANY
•

Notice .of Availability

-1
.••/

^

DIVIDENDS

of Earnings Statement

authorized

Twelve Months

the

Ended June 30, 1958

TA;KE NOTICE that Federal
Company has made gener¬
ally available to its security holders an
earnings statement of the Company

the payment

of

twelve

month

period

ended June 30,1958. This period began
of the Regis¬

after the effective date

tration Statement of the Company re¬

lating to 400,000 shares of capital stock
offered in exchange for shares of

of The Colonial Life
Insurance Company of America, filed
under the Securities Act of 1933, as
amended. This earnings statement has
capital

been

available

accordance

in

with the provisions of Section 11
of

the

Securities

amended.
statement
any

IHREVEPORT,

A

Act

of

of

the

copy

will be mailed

on

193,3,

(a)
as

earnings

1

The
CUMULATIVE PREFERRED STOCK,

4.32% SERIES
27 cents

per

Bjy: Joseph J. Magrath
Secretary
90 John Street

Few York, N. Y.
-*

August 28* 1958

has

per
The above dividends

able

5.

of record

Checks

mailed from

pay¬
to

Sep¬

will

be

the Company's

share on the Common

payable October 1,1958, tQ
stockholders of
the

close

of

hale,

Treasurer

record at

business

on

September 10,1958.
B. M. BYRD

August 27,1958

August 21, 1958

a

of

office in Los Angeles, Sep¬
tember 30.
p. c.

Directors

declared

Stock of the Corporation,
are

September 30, 1958,

tember

of

date

thirty-seven
and one-half cents (87.

share.

stockholders

Board
this

dividend

Dividend No. 46

FEDERAL INSURANCE COMPANY

;/:■

Dividend Notice

Dividend No. 197
60 cents per share;

request to

security JJiolder.

LOUISIANA

ORIGINAL PREFERRED STOCK

stock

made

f

CORPORATION

following quarterly divi¬

Insurance

the

1

dends:

PLEASE

covering

UNITED CAS

The Board of Directors has

for the

Secretary

UNITED CAS
SERVING

THE

/

The Commercial and Financial

Chronicle

.

Thursday, August 28, 1958

.

.

(840)

40

BUSINESS BUZZ
on...
Behind-the-Seen* Interpretations
from the Nation's

that many
for money
bills on the theory that it is
much more popular to spend
than to reduce taxes. Many New
Dealers and Fair Dealers in and

of Congress are
;pointing with pride to
out

,

.

,

was

whole story.

'

already
the 1958

being

ning

dollar

multi-billion

a

^deficit each year?

The
that

with
Certainly one
big issues in this country
is Big Unionism.
The

people was sidestepped

anything to

growing un¬
ionism, despite the disclosure
after disclosure of
corruption
and racketeering in some of the
big unions. - ■\j-<-'/••.* —"
The Senate and House leader¬
ship is only partially responsi¬
ble for letting the people down
in their hour
of need.
Manythe

restrain

both parties were
passing anything
that might be regarded as anti! Labor in 1958, a national elec¬
;

members

of

Apposed

to

In his swan song

ever

the

In

voted

not

state¬

in

If a legitimate one does
up, the politicians in

phony

one.

Some

good.

all

whether

is

it

of

pieces

major

raising the debt

program,

ceiling jto
providing

S288.000.000.000, and
some

tax

small-business.

relief
v-

He

Alaska

statehood

bill,

emer¬

space

quiring labor and management
disclose

publicly their

ing

a

new

Economy

in

"

.

i

.

in

"Easy Money"

have

this

able

to

been

conflict

single copies on request.

New

brings to his new post

turn

realize,
is

fight

is

away

won

again

if

5

<

"If . I had

to

jj.

it

E.

until

Shine

Walston

...

up

.

'

had

too

Wurlitzer Co. Com.
;

Fashion Park

j

FOREIGN

Dealers had
much money, they

SECURITIES

20 BROAD STREET

•

Cormac Photocopy

TELETYPE NY 1-971

.

lerner k go.
-

Investment

10 Post Office
sy.yfg^S

'

V*-

V!

V

.

.:

.

Corp.

SPECIALISTS

NEW YORK 5, N. Y,.

TEL: HANOVER 2-0050

United States Envelope

Morgan Engineering
National Co.

j Carl Marks & Co Inc.

*

pen¬

not

—

Indian Head Mills

reduce every¬

If the New

Austrailia

TRADING MARKETS

"

.

creativeness.
.

Industries Divi¬

paper.

Calif.—William
has joined the staff of
& Co., tine., 550 South

Spring Street.

—

tralia, Melbourne,

(Special to Thv Financial Chronicle)

j

of po¬
litical corruption. Rigid control
of public money is the root of
political morality and political
;

242,

j American Cement
Botany. Mills
j

Easy money is the root

.

products on low-budget—

sion, Department of Trade, Com¬
monwealth Government of Aus¬

confusion.

! really simple.'

on

of experience in

look carefully, there is
The problems are

you

no

Report

Document House, P. O. Box

LOS ANGELES,

I leave
the Senate with regret. I return
the

—

programs used to launch 47 diversified consumer and indus¬

Joins Walston Staff

he

never

Cinderella

Project

in Australia

is

once

will

The W. E.

the
Greenwich, Conn.—$10.
having started
his Wall Street career in 1936 in* Survey of Equipment and Services
in Reproduction by duplicating
a research capacity.
processes — Offset
Duplicator
Ted Siff will serve as assistant
Review, Inc., 101 West 31st St.,
manager of the new office, and
New York 1, N/'Y.
Arthur Brooks will be associate
Survey of Manufacturing Activity
manager.

fight. Those
involved

not to abandon the

—

securities industry,

- seeking
hidden Com¬

To leave the Senate

in the

of Kalamazoo County

Michigan in 1954

munists.
*,»

Stanford,

Upjohn Institute for Community
Research, 709 South Westnedge
Avenue,
Kalamazoo, Mich. —

*

provid¬

mutual security pro¬




firm

University,

Position of Paper Industry

trial

years

many

power

and

the

and the

Editor

of Business,

School

Calif.—cloth—$4.75.

kept in a state of perpetual con¬
fusion. goaded to .such speed
the members can hot think. But

"

welfare funds,

people are going to
primrose path of in¬

intellectuals,

sentence, I could
in
these
words,
'Please do not gtve your gov¬
ernment so much money'

providing increased un¬
employment
benefits, and re¬

to

American

demogogues

the

agency,

sion and

"I have not said the

of

the first

City.

Mr. Moes

ad¬

monished:

Stanford

*

flation., I say they are being
pushed
in
that
direction bv
wild-eyed socialists, ambitious

thing J have learned in the last

defense
a

office

York

who

.

reorganization, creating

"wild¬

Indianian

olas A. Glaskowsky, Jr.,
—Graduate

announced today.
ground floor at
the corner of 38th

Street, the new office is

gaged in by any Congress," and
"I have chosen these words de¬

the

the

Bache branch in that area

sixth

travel the

pointed out what lew peo¬

sum

passed

program,

firm,
on

1407 Broadway,

spending debauch ever en¬

liberately,"

for

•,

Congress

housing

vestment

that the 1958

Congress engaged in the

bor, Albany, N. Y.
Management for Tomorrow—-Nich¬

New
York garment district, Harold L.
Bache, senior partner of the in¬

Ship"

Employer

ployment Insurance Law—New
York State Department of La-

ap¬

opened on

to

Guide

A

Rights and Responsibilities un¬
der the New York State Unem¬

Tuesday, Sept. 2, in the busy

its advantage."

Alter declaring

been

14 years to one

Also

gency

which is expected to be

Located

printed all over

ple in the United States

branch

leaves, a

it

money

Don't "Abandon the

the

when he declared: "Congress

the

preserve

perhaps made

Forms:

manager of the new
office of
Bache & Co.

pointed

government
spending volun-f
If it is threatened with
up

has

Moes

Maurice

spending government will fight
everything that it has, to

85th Congress. It

Against

people can find

with

•

Handbook for Employers with Key

;

Manager i
Of New Bache Branch

spending

gave

tarily.
less of

country.

Warns

the

nor

"No
ever

inflation, will

bad that the text of

too

the

of

plan for the highway construc¬

the

of the

Bldg., Charlotte, N. C.—paper.

.

Moes to Be

the

neither Congress,

that

press,

est

in Indiana with
."

huge, that Con-

so

out what is going on.

overall

address was not

was

legislation enacted were exten¬
sion of reciprocal trade, extend¬
ing the corporate excise taxes,
raising social security payments,
increasing postal rates, increas¬
ing the pay of more than 1,000,000 government workers, ;abandoning the pay-as-you-go; Byrti
tion

in

Senate

Approved

the

If

not control it, so se¬

gress can
cret

thought-pro¬
voking speech that has been
delivered in the United States
most

the,

Certainly Congress passed a
lot of legislation, but it is ques¬
tionable

|

political, eco¬
intellectual that

moral,

Endowment Year Book, in¬

Hospital and Orphan Sections—
The Duke Endowment, Power

unable to make our exec¬

been

utive branch

for the destruc¬

Senator Jenner

crop

Measures

in the Sen¬

America strong."

made

Federal

line

old

the
...

home

tny

[This column is intended to re¬
flect the "behind the scene" inter¬
pretation from the nation's Capital
and may or may not coincide with
the "Chronicle's" owns views.)

postwar
agencies had not had far too
much money, they would have

tion of everything

nomic,

488 Mad¬

York 22, N.Y.

—paper.

hope and joy.

which

bureaucracy

sprawling
agencies.

the spending spree

have to answer

to

have set up 'emer¬

never

devoured

not

was

bility to runaway

Washington will" try and create
a

j-

this," said Senator
Jenner in his farewell speech,
"The
American
people,
like
other people, can not stand the
moral deterioration, the intel¬
lectual
decadence,
that the
flight to inflation brings.
The
men
in Congress avIio pushed
the American economy over the
brink, from financial responsi¬

appropriated more
peacetime than any
Congress in history. Sure there
"was a crisis this year, and as it
has been pointed out here be¬
fore, there will be a crisis every
i;year.

could

gency' agencies and created the

"My l'ear is

and

hood,

money

ison Avenue, New

cluding Annual Reports

1958.

of

point
tl}e year Congress

to admit Alaska to

as

rageous

ahead, perhaps

years

as

tute of Life Insurance,

other words,

Duke

nothing in the
New
Deal, nothing' in World
War II, nothing in postwar years
of Korea, anything like as out¬
there

that

youngsters of today will
1958

in

in the
1940-1957—Insti¬

Insurance

Life

of

State of Texas

says

certain corporate contingencies—in
he doesn't know eitner!"

and

William E. Jenner,
Republican of Indiana, who is
retiring
voluntarily,
declared

tion year.

to

Growth

the present economic condition is due to
international uncertainties, conservative consolidation

"He

22,

K

N. Y.—paper.

ate, Senator

'

of Life Insurance, 488

Madison Avenue, New York

say

independent Democrat was
alone among his colleagues.

in the

Insurance

Life

of

Institute

ginia said that not in his mem¬
ory had an American Congress
been so reckless. The Virginia

today
Democratic controlled Congress

j>adly refused to do

observers

America, Inc., Wash¬

State of New Jersey 1940-1957—

time neu¬
they never
witnessed such a spending hayride as the Congress of 1958.
Senator Harry F. Byrd< of Vir¬

premeditation.
of the

Growth

nomi¬

Congress

watching

After

tral

Construction

of

ington, D. C.—paper.

action for years, old

great opportunity
Congress
had
of doing
truly

something really
constructive
for the good of all the Ameri¬
can

tractors of

Spending Attacked

of Labor

Fearful

S.

345)—U.

Safeguards Public Funds—Broc»tarc—Associated General Con¬

White House must
by the
Senate.;
President Eisenhower has shown
that he will nominate
Demo¬
crats for judicial positions.

can

Method

Contract

confirmed

be

(CTR

Department of Commerce, Wash¬
ington 25, D. C.—10c each.

nated by the

But
left

Government continue run¬

the

ings (CTR 348); and Greases and
Lubricants

of

judgeships

All

(CTR 346); Zirco¬

(CTR 344); Anodic Coat¬

nium

Avant a Republican
President of the United States
to get the credit of naming the

of major accom¬

year

a

plishment on Capitol Ilill.
the
big question Congress
unanswered is: How long

Polystyrene

They did not

judges.

(No. CTR 347);

Molded Plastics

the Judiciary
Committee approved bills. Why?

about 1958

Reports:

Technical

of

Catalogs

facts are the
leadership snuffed

life

the

out

17,

^

.

ADVISOR

areas.

Democratic

then

in,

take

will

N. Y.—paper.

hard, cold

The

York

New

Avenue,

ington

FINANCIAL

out

came

several

in

■

-

there is no argument

T.J. Twits

of committee.
For instance, there was the omnibus judgeship bill that would
have created 46 additional Fed¬
eral judges. The Judicial Con¬
ference of the United States and
the Justice Department wanted
the bill, because of congested
dockets and overworked jurists
they

a

tising Agencies, Inc., 420 Lex¬

important bills got side¬
tracked
along
the way after
Some

If
appropriating more than
$72,000,000,000 of money, bil¬
lions and billions more than the
Treasury

Sidetracked

Judgeship Bill

^

session of
tremendous
accomplishment,
they declare, without giving the
Here

session.

—

American Association of Adver¬

It is pretty obvious

ol the members vote

Advertis¬

Roster

1958

Agencies

ing

merous

spending law-making body ever
to represent the American peo¬
ple.
There has never been a
legislative session like it.
,

American Association of

slaughter bill.

1958 can now be
as the most reckless

of

chalked up

and enacting a hnmane
There were nu¬
other bills passed.

gram,

WASHINGTON, D. C. —The
Congress

And You

Capital

Securities

!

Square, Boston 9, Mass.

Telephone

Teletype

HUbbard 2-1990

BS 69