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Me
111111illerrial
Volume 137
finantial
iiromde
New York, Saturday, August 5 1933.
Number 3554
The Financial Situation
HE authorities at Washington may well congratulate themselves upon the success which
has attended their August program of financing as
announced on Monday of the present week. It unquestionably is a financial achievement of a high
order. The plan involved the offering of $500,000,000,"or thereabouts," of eight-year 31/
4% Treasury bonds and $350,000,000 of two-year Treasury
notes bearing only 15
/
8% interest. There was
nothing very remarkable about the offering of the
Treasury notes. There have been many such offerings in the immediate past, and they have proved
an invariable success, even at very low rates of
interest. The offering, however, of $500,000,000 of
Treasury bonds running for eight years marks a
departure, and the enormous oversubscription for
this first long-term piece of financing in years is to
be hailed with great satisfaction, the only occasion
for misgiving being whether many of the subscriptions were not made under a misapprehension, in a
failure to observe a radical point of distinction between these Treasury bonds, which have been
taken up with such avidity, and the Treasury notes,
to which the financial world has long been
accustomed.
And the distinction does not lie in the mere fact
that the Treasury bonds constitute the first longterm piece of financing undertaken for quite some
time, nor in the fact that special appeal was madt.
to the small investor by offering the bonds in low
denominations, namely, $50 and $100. The point
of difference is that the tax exemption features in
the case of the bond issue are radically different
from those in the case of the note issue. A much
narrower degree of tax exemption exists in the case
of the Treasury bonds than in the case of the Treasury notes. It is a distinction, too, which the law
makes, and not a difference due to a change of policy
inaugurated by the Treasury Department. The latter had no choice in the matter, if it was to indulge
in long-term financing. It could not offer the same
degree of tax exemption to the bonds as to the notes.
It appears that the subscriptions for the $500,000,000 Treasury bonds reached $3,000,000,000, or
over six times the amount offered, and that subscriptions for $1,500,000,000 were received in addition for
the $350,000,000 two-year Treasury notes, making
the total subscriptions for the two issues combined
in excess of $4,500,000,000. Naturally President
Roosevelt feels greatly elated over the result, his
satisfaction being especially keen in that an opportunity was given to the small investor by offering
T
bonds in denominations as small as $50. Dispatches
from Hyde Park on Wednesday, the home of Mr.
Roosevelt, stated that the response to the Federal
financing program was more enthusiastic than even
the most optimistic members of the Administration,
including the President, had dared to hope. The
result, it was stated, turns financing problems for
the remainder of 1933 into mere routine instead of
problems to vex the Treasury. The large subscription, we are told, was taken as "extraordinary evidence of the confidence of the country in Administration policies, possibly the strongest manifestation
of support yet received by Mr. Roosevelt since he
assumed office." The President is represented as
having added, "with a smile," that the Treasury
would have on hand on Aug. 15 more cash than at
any other time in history, even during the World
War. "On that date, its bank balance, figuratively speaking, will be in excess of $1,500,000,000."
There is no exaggeration in this latter statement.
With subscriptions of the immense aggregate as now
announced, there can be no question as to the accuracy of the statement. The Treasury will be for
some time to come in an impregnable position of
strength, for it must be remembered that the offering of the Treasury bonds is not limited to the nominal sum of $500,000,000, for the Secretary of the
Treasury has expressly reserved the right "to increase the offering by an amount sufficient to accept
all subscriptions for which 11/
4% Treasury certificates of indebtedness due Sept. 15 1933 may be
tendered in payment, and there are $451,447,000 of
these certificates outstanding, and it is significant
that these certificates were immediately quoted at
a premium in the market on the strength of this
privilege. The Treasury circular also stated that
subscriptions for which payment may be tendered in
Treasury certificates of indebtedness due Aug. 15
1933, and bearing 4% interest, would be given preferred allotment. These latter are outstanding in
amount of $469,089,000. Accordingly, expectation
is that the allotments for these eight-year Treasury
bonds may reach and even exceed $1,000,000,000 instead of the nominal amount of $500,000,000, thereby
placing the Treasury on Easy Street financially for
some time to come.
This makes it all the more important to examine
the provisions with reference to tax exemption, for
the failure to comprehend that the Treasury bonds
stand on a totally different footing in that respect
may invalidate conclusions as to the ease of conducting the Government's future financing. And this
910
Financial Chronicle
is the more true since the distinction between the
bonds and the notes in their tax-exempt features
appears to have been entirely overlooked, for we
have seen no reference to the same in the columns
of the leading daily papers, and there is only too
much reason to fear that many subscriptions were
handed in without a knowledge of the fact. We are
not permitted to assume that there was a studied
purpose to withhold knowledge on the point referred
to, and the only explanation is that it was taken for
granted by the financial community that inasmuch
as Treasury notes and Treasury certificates of indebtedness,the only form in which Treasury borrowing has been done during recent years, and all of
which enjoys full tax exemption, the provisions regarding tax exemption for the Treasury bonds must
be equally broad, and, accordingly, made no further
inquiry into the subject. But the distinction, nevertheless, exists, and since it does exist it cannot be
ignored.
The distinction appears clearly enough when the
provisions for tax exemption are separately examined. As it happens, while of course there is no
intention to mislead or to deceive, the distinction
is hidden away in the language itself, and rather
cleverly, too, so that it was certain to escape notice
except where attention was specifically directed to
it. In the case of the present offering of $350,000,000
Treasury notes the tax exemption is couched in the
same general and all-embracing way as in all other
recent offerings of the same kind. The language used
simply says: "The notes shall be exempt, both as
to principal and interest, from all taxation (except
estate or inheritance taxes) now or hereafter imposed by the United States, any State, or any of the
possessions of the United States, or by any local
taxing authority."
On the other hand, though the provision regarding
tax exemption in the case of the Treasury bonds
begins with the same identical language, it ends in
quite a different way. On casual inspection it appears simply to be drawn out a little longer, in order
to make it a bit more descriptive perhaps, and that
is where it is calculated to mislead, since it conveys
the impression that there is no necessity for going
any further or to bother about the rest of the exemption provision. But let the unwary subscriber beware. The tax provision in full in the new Treasury
bonds is as follows:
"The bonds shall be exempt, both as to principal
and interest, from all taxation now or hereafter imposed by the United States, any State, or any of the
possessions of the United States, or by any local
taxing authority, except (a) estate or inheritance
taxes, and (b) graduated additional income taxes,
commonly known as surtaxes, and excess profits and
war profits taxes, now or hereafter imposed by the
United States, upon the income or profits of individuals, partnerships, associations, or corporations."
The distinction from the provisions of the Treasury notes is in the exceptions. One of the exceptions
is that the bonds, like the notes, are not exempt from
estate or inheritance taxes, and then as we proceed
we find that there is still (mother exception not existing in the case of the Treasury notes, namely, (b)
graduated additional income taxes, commonly
known as surtaxes and excess profits and war profits
taxes. In other words, the distinction in the tax
exemption provision of the bonds appears in the fact
that there is a further exception to the tax exemp-
Aug. 5 1933
tion provisions. In brief, the Treasury bonds are not
exempt from the surtaxes, whereas the Treasury
notes are so exempt. Obviously the exception is a
most important one. Stated in another way, the
Treasury bonds are exempt from the ordinary normal taxes, but not from the surtaxes. Yet exemption from the surtaxes is precisely the privilege of
highest value, especially now that the surtaxes have
been raised to such high figures, they running up to
a maximum of 55%.
The absence of exemption from the surtaxes is
presumably a consideration of little consequence in
the case of the subscribers for bonds of small denomination, such as $50 or $100, and as a matter of
fact under the Liberty Loan Acts surtax exemption
is permitted even in the case of the bonds on amounts
of bonds the principal of which does not exceed
$5,000, but unfortunately such small subscriptions
cannot be depended upon to reach a very large aggregate. On the other hand, in the case of men of
means who can subscribe for huge issues of United
States obligations on every occasion of new financing by the Treasury, the absence of surtax exemption is a feature of the highest importance.
Now it is very much to be feared that since no
stress was laid on the fact that these Treasury bonds
are not exempt from the surtaxes, and the absence
of such provision passed almost entirely unnoticed,
many subscriptions were tendered for the Treasury
bonds on the idea that they did enjoy full tax exemption as do the Treasury notes, also certificates of
indebtedness and Treasury bills. In this must be
included the subscriptions by large financial institutions. The practice of many of the banks and financial institutions generally is to subscribe very liberally for fully tax exempt securities, and then to resell these securities to men of large means who avail
of them to escape the large surtax payments. If
these acted on the assumption that the Treasury
bonds are exempt from the surtaxes, the same as the
Treasury notes, they will now suffer disappointment
in finding that their usual body of clients, for repurchase, are missing.
The Treasury circular, in offering the bonds,
directed particular attention to the fact that thip
is the first issue of Treasury bonds since Sept. 15
1931. That, however, is an unfortunate reference.
The Treasury Department at that time did put out
$800,000,000 24-year 3% Treasury bonds. The experience, as it happened, was attended by ill results.
Almost immediately there came that dreadful episode in which Great Britain was forced to suspend
gold payments and all the financial markets became
utterly demoralized. These 3% Treasury bonds of
1931 were of course disposed of at par, the same as
all Government issues, but in the resulting financial
collapse they sold down in December 1931 to
82 24/32, and they have never got back to par since
then. The quotation on the New York Stock Exchange yesterday was 98 10/32. There are still
$759,494,700 of these Treasury bonds of 1931 outstanding, and they can of course be purchased at
the discount noted in the market, and if anyone has
a desire to acquire bonds not exempt from the surtaxes here is his opportunity.
To be sure, the Treasury bonds now offered bear
4
/
1
3 % interest instead of 3%, the rate having evidently been raised to that figure, in view of the fact
that the 3% bonds still outstanding do not com4% rate would
1
mand par. But whether even this 3/
Volume 137
Financial Chronicle
be sufficiently attractive to induce subscriptions for
the bonds aggregating over $3,000,000,000 may well
be doubted, that is if the subscribers had been aware
of the fact that the bonds are not free from the
surtaxes.
The fact of the matter is that neither Secretary
Mellon nor Secretary Ogden L. Mills could ever be
prevailed upon to issue Treasury obligations except
such as were exempt from the surtaxes, as well as
from the normal taxes, and their experience with
the 1931 issue of Treasury bonds indicates one of
the main reasons for this attitude, and of course the
reason is tenfold stronger now since the surtax rates
in the higher brackets have been so enormously increased. We often urged upon both Mr. Mellon and
Mr. Mills the discontinuance of the practice of putting out Government obligations that were free from
the high surtaxes, and it is not to be forgotten that
the Treasury Department tried very hard to secure
full tax exemption for the Treasury bonds, the same
as for Treasury bills, certificates of indebtedness,
and Treasury notes, but failed in the attempt, Congress having refused to authorize the creation of a
new body of tax-exempt securities which would run
for a long term of years and might reach indefinite
amounts.
To us there has always seemed something
anomalous in the imposing of surtax rates at ever
increasing figures, and at the same time providing
a series of Government obligations that permitted
those who are subject to the surtax rates to avoid
liability to the same. Secretary Mellon sought to
inaugurate a change in the Government policy regarding surtax exemption. It will be remembered
that of the different Liberty Loan issues put out
during the war only the first Liberty Loan 3/
1
2s were
given full tax exemption, that is were exempt from
the surtaxes as well as the normal Federal income
taxes. It was quickly recognized that this was a
mistaken policy and subsequent Liberty Loan issues
were put out at higher rates of interest, but were
exempt only from the normal taxes.
As subsequent Liberty Loans were issued at
higher rates of interest the holders of the 31/
2s were
given the privilege of conversion into these higher
rate issues, but the surtax exemption privilege was
deemed so valuable that relatively few of the holders of the First Liberty Loan 3/
1
2s consented to the
conversion, and to-day there are still $1,392,227,350
of these First Liberty Loan 3/
1
2s still outstanding.
These First Liberty 31/2s are selling in the market
now at a premium of 2 23/32. Now comes this
week's experience of getting subscriptions for over
4% bonds without sur$3,000,000,000 of eight-year 31/
exemption.
Secretary Mellon, as just stated,
tax
sought to reverse completely this policy of not putting United States obligations afloat carrying surtax exemption and to make all further issues of
Government obligations free from the surtaxes the
same as the normal taxes, and he was largely successful in getting authority from Congress for surtax exemption for the various other forms of Government obligations, but Congress balked when he
sought to extend the same surtax exemption to longterm issues of Treasury bonds. That is the reason
why no long-term financing has been done since that
of Sept. 15 1931.
We deem it a mistake to cut off such a large source
of revenue as is involved in the surtax levies, and
entertain the belief that while the Federal budget
911
was still in balance Government obligations in large
amount could have been put out subject to the surtaxes with only a slight increase in interest rates.
President Roosevelt is to be commended for having
sanctioned a large issue of Treasury bonds. Only
we fear that the test was not a fair one, since the
subscribers were not aware of the fact that the new
31/
4% bonds do not carry exemption from the surtaxes, the exemption of highest value, no emphasis
having been laid upon that feature. It therefore
may be said not to have played any part in affecting
the volume of subscriptions, thereby encouraging
a spirit of optimism which may not prove fully warranted when further steps in long-term financing
are undertaken.
NQUALIFIED approval must be given to the
action of the New York Stock Exchange in
taking steps to curb reckless speculation for the
future, and the action of the Exchange in that particular indicates how ready the authorities of that
body are to inaugurate reforms of one kind or another, when the need for them appears. The regulations now imposed are drastic in the extreme, but
no more so than recent experience has demonstrated
that there is need and warrant for the same. The
collapse during July of the series of speculative excesses in the commodity markets as on the Stock
Exchange demonstrated very plainly that there had
been laxness in supervision of trading methods and
also laxness in the establishing of devices for putting a sharp curb upon operations of a very pernicious character in both the security markets and
commodity exchanges. The result was that shoestring traders who keep pyramiding their accounts
until they reach such magnitude that they fall of
their own weight were allowed to flourish as never
before. The'Chicago Board of Trade responded last
week, as related in these columns at the time, by
agreeing with representatives of other grain exchanges in a report to the Agricultural Adjustment
Administration with which they had been conferring
for two days,for the regular exchange of confidential
information between the Business Conduct Committee of the New York Stock Exchange and the Chicago
Board of Trade and other security and commodity
markets regarding commitments of traders. Among
other things, they agreed (1) upon limitations of
open lines of speculative commitments; (2) adequate margin requirements, particularly as applied
to increased or larger speculative commitments, and
(3) the permanent elimination of trading in indemnities, inasmuch as options to buy at a future
date, as permitted under the indemnity trading
practice, cannot be traced until the options have
been exercised. Regarding the exchange of confidential information,it was well said that that would
be particularly important "regarding lines which
are reasonable if confined to either securities or to
one commodity, but which may be excessive if large
commitments prevailed concurrently in several
markets."
The New York Stock Exchange has now announced its own restrictions and regulations, and
they are, as already stated, such as befit the occasion, and they ought to put an end to such speculative excesses as were disclosed in the speculative
collapse of last month. Margin requirements are
put at definite figures, and increased information
is to be required weekly as to pools, syndicates,joint
912
Financial Chronicle
Aug. 5 1933
accounts and options. The increase in the margin Reserve institutions continue to add to their holdrequirements will attract particular attention as ings of United States Government securities at the
they appear calculated to eliminate traders without rate of about $10,000,000 a week, and this action is
substance or means, and who act from purely gam- now finding reflection in the volume of Reserve
bling instincts. In a specially prepared summary, credit outstanding, which at length is increasing
outlining the important new regulations, Richard from week to week, even if only in a moderate way.
Whitney, President of the New York Stock Ex- The past week the total of the holdings of United
change, said that the Exchange has for many years States securities has been increased from $2,027,required all members accepting or carrying accounts 574,000 to $2,037,928,000. At the same time member
for customers to secure proper and adequate margin. bank borrowing, as reflected in the discount holdIn order to strengthen this rule and to make clear ings of the 12 Reserve institutions, has also increased
what the Exchange considers proper and adequate slightly this time, rising from $161,363,000 July 26
margin, the Committee on Business Conduct has to $163,542,000 Aug. 2, though on the other hand
been given power to fix minimum marginal require- the holdings of acceptances have been further rements from time to time. Acting under this new duced from $9,616,000 to $8,213,000. The result altopower, the Committee, we are told, will require a gether is that the total of the bill and security holdminimum margin of 30% of the debit balance in ings, which constitute a measure of the amount of
each account having a debit balance of more than Reserve credit outstanding, has increased during the
$5,000 and a minimum margin of 50% of the debit week from $2,200,415,000 to $2,211,529,000.
balance in each account having a debit balance of
There has also been this time a slight increase in
$5,000 or less. Additional margin requirements will the amount of Federal Reserve notes in circulation,
be imposed on short positions and also on securities the total having risen from $3,003,685,000 to $3,004,selling at very low prices, and on securities which 605,000, while at the same time the amount of Feddo not have an active market on a recognized ex- eral Reserve bank notes in actual circulation (and
change.
against which no cash reserves are required) has
The offering of securities for sale to people in their increased from $123,011,000 to $126,632,000. The
homes, and also the solicitation of new margin ac- Reserve banks keep adding to their gold holdings,
counts from people in their homes, has been pro- the amount of the same having increased during the
hibited, and customers' men have likewise been pro- week from $3,548;659,000 to $3,559,510,000. In this
hibited from communicating with customers in their way the ratio of cash reserves is maintained unimhomes in regard to marginal transactions unless the paired. However, the liability on account of decustomers have given express permission in writing posits has at the same time diminished during the
for such communications. The Exchange has also week, these deposits having fallen from $2,573,fixed substantial minimum salaries for customers' 709,000 to $2,563,918,000, though member bank remen. It is felt that this step will tend to attract -serves, which constitute the largest item in the demen of responsibility to this important branch of posits, have increased from $2,306,366,000 to $2,319,the business. Furthermore,the payment of expenses 239,000. The decrease in the grand total of the deincurred by customers' men for the entertainment posits was entirely in the Government deposits,
of customers has been prohibited.
which dropped during the week from $81,786,000 to
Mr. Whitney also says that in order to secure $56,229,000. The ratio of total gold reserves and
prompt information in regard to the existence of other cash to deposit and Federal Reserve note liaany pools, syndicates and joint accounts, trading bilities combined is reported at 68.4% this week as
in listed securities, and also of the existence of any against 68.5% last week. The amount of United
options relating to listed securities, the Committee States Government securities pledged as part colon Business Conduct has been directed to require lateral for Federal Reserve notes outstanding
all members of the Exchange, and firms registered decreased during the week from $489,200,000 to
thereon, to file weekly reports of all such activities $477,200,000.
in which such members are interested, or of which
they have knowledge, by reason of transactions exeHE course of prices on the New York Stock Excuted by or through them. The Committee on Busichange during the current week has been someness Conduct has also been given authority to dis- what irregular, though without any pronounced
approve the connection of members with any such weakness. The Stock Exchange was closed on Saturactivities whenever in the judgment of,the Com- day last in accordance with previous announcement.
mittee such activities may be unsound or likely to On Monday, July 31, prices suffered a sharp break,
create prices which will not fairly reflect market the losses running as high as 10 points in some invalues. Any such disapproval will be reported to stances, though there was somewhat of a rally tothe Governing Committee for such action as it may wards the close of the day. The grain markets also
deem appropriate under the Constitution and Rules slumped badly, and low-priced bond issues suffered
a bad break in numerous cases. The break in the
of the Exchange.
These changes are all along the right lines, and it grain market was in face of the fact that extremely
is pleasing to have Mr. Whitney say that the action hot weather was being experienced here in New
taken represents a development of the policy of the York, where the thermometer rose to 100, also in
Exchange and that "all of these various steps have the West, where great damage was being inflicted
been under consideration for many months and have by hot, dry weather upon the growing spring wheat
been adopted because we have become convinced that crop, both in the United States and in the Western
they are sound and in the public interest."
Provinces of the Dominion of Canada. All deliveries of wheat except the cash grain closed within
HANGES in the condition statements of the the limit of loss permitted under the Board of Trade
Federal Reserve banks the present week are restrictions, namely, 5c. a bushel. Oats, rye, corn
in accord with those of all other recent weeks. The and barley all dropped the full amount allowed
T
C
Volume 137
Financial Chronicle
under the limits fixed. Cotton fell $2.55 a bale, but
recovered part of the loss in the later.dealings. It
was then that the Board of Trade adopted resolutions pegging all the different commodities dealt in
at the closing prices of the day for the first half of
August. This caused a return of strength in the commodity market on Tuesday, which in turn led to an
improvement in the stock markets. Farm implement shares were particularly strong in view of the
recovery in wheat, and the alcohol stocks also developed strength. Uncertainty as to what extent
the blanket code and the several industrial codes
would affect corporate 'profits in the immediate
future caused some hesitancy in the share list.
Bonds also, after renewed weakness, showed an improving tendency. Announcement that interest on
the Colorado Fuel & Iron 5s would not be met
brought a break in this issue, and a slump in the
stock. The foreign exchanges, which on Monday had
been sharply lower,indicating a recovery in the value
of the American dollar, showed a rising tendency,
but with the fluctuations extremely erratic, indicating depreciation of the dollar again on Wednesday.
Inflation rumors from Washington were given
wide prominence on Wednesday and had the effect
of sending stock prices higher all around. These
rumors apparently had no better foundation than
other previous similar rumors, but as they caused a
rise in the foreign exchanges again, with corresponding depreciation again in the American dollar, they
received wide credence. The grain markets, operating under the severe restrictions already mentioned,
showed some improvement for the day within the
limits allowed, and cotton prices were also higher.
On Thursday there appeared to be no special developments except the letting of the naval building contracts, which served to strengthen the shipbuilding
company shares, in particular Bethlehem Steel, but
declines and losses for the day were about evenly
distributed, and even Bethlehem Steel did not maintain the whole of its early rise. Foreign exchange
rates opened at a sharp rise, but moved lower again
as the day proceeded. The alcohol stocks were
again special features.
On Friday the Stock Exchange was the victim of
an unusual incident, which resulted in the termination of business soon after the noon hour because
of the action of some miscreant. According to a
statement issued by Allen L. Lindley, Vice-President of the Exchange, investigation disclosed that
unknown persons had placed cylinders containing
tear gas at one of the intakes of the Stock Exchange
ventilating system. The gas permeated the trading
floor and the offices of the Exchange and rendered
it necessary to close the Exchange. No injuries were
reported.
As far as the general underlying conditions are
concerned, these have been of the same favorable
character as before. Loading of revenue freight continues to run well ahead of last year, and the consumption of electricity continues greatly in excess
of a year ago, the production of electricity by the
electric light and power industry of the United
States for the week ended Saturday, July 29, being
reported at 1,661,504,000 kilowatt hours as against
only 1,440,386,000 kilowatt hours in the corresponding week in 1932 and comparing with 1,644,089,000
kilowatt hours in the same week of 1931. The "Iron
Age," at the same time, reported that steel demand
was showing unexpected staying powers and ingot
913
production remained unchanged from the previous
week at 57% of capacity. The great success attending the Government's August financing was also,
of course, a favorable feature. The new regulations
for trading on the Stock Exchange so as to check
unsound practices appeared to have no effect on
trading one way or the other, though trading became more and more inactive as the week progressed.
The Chrysler Corp. declared a special dividend of
50c. a share on the common stock, payable Sept. 15.
Quarterly distributions of 25c. a share were made
on this issue from Jan. 2 1931 to and including
Dec. 31 1932, but none since. Penick & Ford declared a quarterly dividend of 50c. a share, and a
special dividend of like amount on the common stock,
both payable Sept. 15. As a sort of summary of
events for the week,it may be noted that the September option for wheat in Chicago under the restrictions imposed closed yesterday at 9734c. against
$1.02% on Friday of last week, and the September
option for corn closed at 541/
4c. against 57%c the
close the previous Friday. The September option
for rye closed at 721/
4c. against 78c., and the September option for barley at 53%c. against 63c. Spot
cotton here in New York yesterday was 10.15c. as
against 10.50c. the previous Friday. The spot price
of rubber was 7.50c as against 7.38c. the previous
Friday. Domestic copper sold yesterday at 9c. as
against 9c. the previous Friday. Silver continued
weak, and the price in London yesterday was 177
/
8
pence per ounce against 18% pence the previous
Friday, while the New York quotation was 36.20c.
against 36.60c. In the foreign exchanges, cable
transfers on London yesterday closed at $4.52
against $449y2 the previous Friday, while cable
transfers on Paris closed yesterday at 5.361/
2c. as
against 5.29c. on Friday of last week. The range of
prices in the stock market for the calendar year to
date is now so wide that further new highs or new
lows are very rare. On the New York Stock Exchange the record for the week is 18 new highs and
two new lows, and for the New York Curb Exchange
16 new highs and 16 new lows. Call loans on the
Stock Exchange have again remained unaltered
at 1%.
Dealings have dwindled as the week moved along.
On Saturday last the New York Stock Exchange was
closed. On Monday the sales were 3,085,063 shares;
on Tuesday, 1,784,420 shares;'on Wednesday,
1,727,420 shares; on Thursday, 1,509,240 shares, and
on Friday approximately 500,000 shares. On the
New York Curb Exchange the sales on Monday were
437,795 shares; on Tuesday, 262,455 shares; on
Wednesday, 272,965 shares; on Thursday, 294,323
shares, and on Friday, 185,860 shares.
As compared with Friday of last week,the changes
are quite irregular, with the losses predominating,
but mostly of small extent. General Electric closed
yesterday at 22% against 233
/
4 on Friday of last
week; North American at 24% against 261/
8; Standard Gas & Electric at 14 against 14%; Consolidated
Gas of N. Y. at 51% against 53%; Pacific Gas &
Elec. at 26% against 27%;Columbia Gas & Elec. at
191/
4 against 201/
4; Electric Power & Light at 9
against 9/8; Public Service of N. J. at 46 against
46%; International Harvester at 33% against 34%;
J.I. Case Threshing Machine at 65 against 70; Sears,
Roebuck & Co. at 353
4 against 35%; Montgomery
Ward & Co.at 203
/
4; Woolworth at 41%
4 against 213
against 45; Western Union Telegraph at 597/8
914
Financial Chronicle
against 60½; Safeway Stores at 505
/ against 5234;
American Tel. & Tel. at 1231/
8 against 123%; American Can at 84/
1
2 against 85; Commercial Solvents
at 317
/
8 against 32½; Shattuck & Co. at 87
/
8
against 9, and Corn Products at 80 against 78.
1
2
Allied Chemical & Dye closed yesterday at 112/
bid against 117 on Friday of last week; Associated
Dry Goods at 13 bid against 141/
2; E. I. du Pont de
Nemours at 69/
1
4 against 701/
2; National Cash Register "A" at 17 against 173
%; International Nickel at
18/
1
4 against 18; Timken Roller Bearing at 25
against 27/
1
4; Johns-Manville at 44 against 45; Gil/
8; National
lette Safety Razor at 13/
1
2 against 135
Dairy Products at 20 against 20%; Texas Gulf Sulphur at 263
% against 267
/
8; American & Foreign
Power at 11/
1
2 against 12/
1
4; Freeport-Texas at 38
against 37½; United Gas Improvement at 20 against
1
4; Coca20/
1
4; National Biscuit at 54 against 54/
%; Continental Can at
Cola at 94/
1
2 bid against 953
1
4;
1
2against 77/
60 against 60; Eastman Kodak at 74/
Gold Dust Corp. at 21/
1
4 against 22½; Standard
Brands at 26/
1
4 against 25%; Paramount Publix
/
8; Westinghouse Elec. &
Corp. ctfs. at 2 against 15
8
1
4 against 43/
1
2; Drug, Inc., at 451/
Mfg. at 40/
against 48%; Columbian Carbon at 50 bid against
52; Reynolds Tobacco class B at 47 against 48%;
/
2; Liggett & Myers
Lorillard at 21/
1
2 against 211
class B at 91% against 88%, and Yellow Truck &
Coach at 5 against 5%.
Stocks allied to or connected with the alcohol or
brewing group have been firm as a .rule. Canada
Dry closed yesterday at 29 against 29 on Friday of
last week; Crown Cork & Seal at 46 against 46;
8; Mengel &
1
4 against 321/
Liquid Carbonic at 32/
Co. at 141/
8 bid against 14%; National Distillers at
1
4 against 78/
1
4,
86 against 76½; Owens Glass at 78/
and United States Industrial Alcohol at 62
against 561/
2.
The steel shares have moved lower on doubts regarding the acceptance of the Industrial Recovery
1
2
Code. United States Steel closed yesterday at 51/
against 54% on Friday of last week; United States
8; Bethlehem Steel at
Steel pref. at 96 against 991/
1
4 against 25.
1
2,and Vanadium at 23/
38% against 40/
In the auto group, Auburn Auto closed yesterday at
/
2 on Friday of last week; General
/
2 against 551
531
8; Chrysler at 32% against
Motors at 29 against 301/
1
4; Packard
33%; Nash Motors at 191A3 against 20/
1
4; Hupp Motors at 51/4
Motors at 478 against 5/
against 5%, and Hudson Motor Car at 10% against
111/
2. In the rubber group, Goodyear Tire & Rubber
closed yesterday at 35% against 36% on Friday of
/
8,and
last week; B. F. Goodrich at 14% against 157
1
4.
1
2against 18/
United States Rubber at 17/
The railroad shares have followed an irregular
/
8
course. Pennsylvania RR. closed yesterday at 345
% on Friday of last week; Atchison Toagainst 343
peka & Santa Fe at 58 against 62; Atlantic Coast
Line at 43 bid against 46%; Chicago Rock Island &
Pacific at 6% against 67
/8; New York Central at 42
Baltimore
& Ohio at 27 against 28%;
;
43
/
1
4
against
8 against 26; Union Pacific at
New Haven at 251/
115/
1
4 against 114; Missouri Pacific at 61/4 against
/8; Mis2 against 267
6%; Southern Pacific at 251/
8; Southern
1
2 against 121/
souri-Kansas-Texas at 11/
Railway at 25 against 27%; Chesapeake & Ohio at
42% against 43%; Northern Pacific at 24 against
1
4.
1
4 against 27/
26, and Great Northern at 25/
fluctuations.
great
no
The oil stocks have shown
Standard Oil of N. J. closed yesterday at 35 against
Aug. 5 1933
/
s on Friday of last week; Standard Oil of Calif.
353
at 34/
1
4 against 35/
1
4; Atlantic Refining at 24
against 241/
8, and Texas Gulf Sulphur at 26%
against 267
/8. In the copper group, An'aconda Copper closed yesterday at 16/
1
4 against 16% on Friday
of last week; Kennecott Copper at 191/
8 against
20%; American Smelting & Refining at 33 against
33%; Phelps-Dodge at 15 against 14%; Cerro de
Pasco Copper at 31 against 31%, and Calumet &
1
4 against 67
/8.
Hecla at 6/
RICE trends were generally favorable this week
on stock exchanges in the foremost European
financial centers. There was a little irregularity at
London, Paris and Berlin, but cheerful sessions outnumbered the opposite kind. Trading was dull in
all markets, however, as the August holiday season
is now in full swing. Events in the United States
were again noted with the greatest care, but with
less anxiety, as the European markets have been
somewhat reassured by the reaction here last month
and the relatively calm subsequent trading on the
New York Stock Exchange. The London market
was influenced more specifically by the outstanding
success of a £15,000,000 Canadian Government loan,
on which books were opened Wednesday. This borrowing was the first done in the London market by
the Ottawa Government in 20 years. The 4% 25-year
bonds, offered at par, were oversubscribed three to
four times immediately after books were opened
Wednesday. Financial and economic trends in all
the leading industrial countries of Europe remain
favorable, and the hope that the end of the depression
is signalized by such tendencies now is growing into
a conviction. Especially impressive is a steady
week-by-week decline in French unemployment figures, indicating that monetary management or mismanagement is not necessarily a factor. Although
optimism is increasing in Europe, it is held all too
obvious that the climb upward out of the depression
will be long and hard, and there is no present tendency on the stock exchanges to outstrip the actual
progress.
Business on the London Stock Exchange was very
quiet in the initial session of the week. British
funds were a little easier in anticipation of the new
Canadian Government loan, while industrial stocks
moved uncertainly under modest profit-taking.
South African gold mining stocks were a good feature, with substantial buying reported from Johannesburg. International securities were quiet and
unchanged. Tuesday's session on the London exchange was again dull. There was further moderate
selling of British funds for the purpose of subscribing to the Canadian loan. Industrial stocks
were a bit irregular, but changes were quite unimportant. Anglo-American trading favorites tended
to improve. Prompt success of the Canadian loan
early Wednesday caused a good general session on
that day. British funds rallied, while home rails
also improved on better traffic returns. Activity
did not increase greatly in the industrial section,
but the trend was good. International securities
also advanced. The cheerful tone was maintained,
Thursday, despite preparations for the extended
August bank holiday closing. British funds made
further gains, while the industrial section was stimulated by sharp advances in tobacco shares. Favor.
able tendencies were maintained in the international
group. Prices again improved yesterday, in very
P
Volume 137
Financial Chronicle
quiet trading. Gilt-edged issues were in best demand, but industrial stocks also advanced. Due to
the bank holiday, trading will not be resumed until
Tuesday.
The Paris Bourse was weak at the opening, Monday, but the trend improved later in the day, and
some of the more volatile securities showed net
gains. Among the less active issues losses predominated. The month-end settlement was easily effected
/
4%, officially,
with money for the carry-over at 1
with some funds reported available at 1/
8%. Business Tuesday was almost at a standstill, and prices
drifted lower in most departments of the market.
Rentes gained and a little improvement also was
reported in shares of steel companies, but otherwise
losses were registered for the session. A better
trend was noted Wednesday, although trading remained on a small scale. Speculative issues regained
their losses of the previous day, while rentes main.
tamed their strength. Improvement was more pronounced in Thursday's dealings on the Bourse.
Trading did not increase much, but good reports
from other markets resulted in better quotations in
all departments. The trend yesterday again was
favorable, despite quiet trading.
The Berlin Boerse was firm in the initial session
of the week. Trading volume was small, but the
modest buying sufficed to lift quotations for utility
and mining stocks. Fixed-interest obligations also
were better. At the opening, Tuesday, prices receded sharply on the Boerse, but a recovery toward
the end diminished the losses. Potash shares showed
the largest net losses for the day. Turnover was
unusually small owing to the midsummer holiday
season. Trends were slightly irregular in Wednesday's session, but the changes were small. Advances
were noted in I. G. Farbenindustrie and in many
utility stocks, but other sections reflected modest
liquidation. Although business again was small,
Thursday, prices turned upward rather emphatically
in this session, largely because of improved reports
from London and New York. Mining issues were in
good demand, and some of the bank stocks also
moved upward readily. The utility issues maintained their strength. Prices drifted lower in most
sections of the Boerse yesterday. Mining stocks
moved contrary to the general trend.
915
London Conference. Dr. Schacht declared, in a
radio address which was broadcast in this country
over a N. B. C. network,that Germany hereafter will
conduct her economic and political negotiations exclusively with the nations directly concerned. If
there must be economic conferences, Dr. Schacht
said, "let us have conferences devoted to specific
problems and attended only by those immediately
interested in those problems." Premier Benito Mussolini stated emphatically several weeks ago that
Italy hereafter will confer only with specific countries on definite economic questions.
In Paris there was much talk over the last weekend of the formation of a "defensive" Continental
economic bloc, with the gold standard countries as a
nucleus. An agreement already has been made, it
will be recalled, for consultation among the central
banking authorities of France, Belgium, Holland,
Switzerland, Italy, Poland and Czechoslovakia, with
the aim of defending the respective currencies
against speculative attacks. Georges Bonnet, the
French Finance Minister, declared in interviews last
week that monetary agreements are insufficient.
"They must be complemented by economic agreements among the seven nations attached to the gold
standard," he added. It was widely assumed in the
French capital that these gold standard countries
will grant tariff concessions to each other and in
other ways attempt to stimulate mutual trade relations. There was increasing evidence in London
of economic solidarity among the units of the British
Empire, this tendency having been made manifest
not only in the Ottawa agreements last year, but
also in the declaration of July 27 that the United
Kingdom and the Dominions will make the Empire
a single monetary unit based on sterling. A Canadian Government loan of £15,000,000, for 25 years,
at 4%, was announced in London, last Sunday, and
the issue was oversubscribed with the greatest speed
when the lists were opened Wednesday morning.
This was the first Canadian Government loan in the
London market for 20 years, and it was accepted as
a reflection of the Empire policy announced last
week. Every expectation was entertained in London, dispatches said, of further evidence that the
Empire pact is a concrete and lively policy. An
American economic bloc also is considered more
than a possibility. Discussions regarding bilateral
ERMINATION of the World Monetary and Eco- trade agreements with a number of Latin American
nomic Conference on July 27, without a single and several European countries already have been
worth-while achievement to its credit, has been started in Washington. Secretary of State Cordell
accepted with remarkable calm and equanimity Hull indicated, during his return journey from Lonthroughout the world, not one lament being heard day this week, that all possibilities for such accords
this week from any important quarter. As the Con- will be explored through diplomatic channels.
ference receded into the background, discussion
turned in leading capitals to the probable formation iNTENSE diplomatic activity is in progress in some
of "economic blocs" in various trade and currency 1 of the countries of Central and Southeastern
areas. In one summary of the London Conference, Europe, with the understood aim of arranging a
made by a correspondent of the New York "Times," political and economic treaty which is variously
it was estimated that the gathering entailed expendi- referred to as the Central European pact, the Danutures of $5,000,000 by the 66 delegations and the bian pact and the Adriatic pact. The Italian GovBritish hosts of the several thousand delegates and ernment has taken the initiative in these negotiaexperts. Since the expenditure of energy and money tions, clearly with the approval of Paris, as the
was so completely unproductive, the hope seems proposed pact would include the Little Entente
warranted that there will be an embargo for a long countries in which French influence is enormous.
time to come on similar international enterprises. Heretofore France has jealously guarded the Little
That some important countries, at least, will decline Entente States from any encroachments by other
to be inveigled into further meetings of this sort Eurpean Powers, and a profound change in Eurowas indicated last Saturday by Dr. Hjalmar pean alignments thus is reflected in the current conSchacht, the chief of the German delegation to the versations. The main factor in back of the whole
T
916
Financial Chronicle
movement is, of course, the advent of a Fascist Government in Germany. Chancellor Hitler's frequently avowed nationalism has deepened the distrust of Germany, which is always prevalent to
some degree in France, and the Paris Government
now appears willing to make concessions to Rome,
partly in order to prevent an understanding between
the two Fascist Governments and partly to increase
the difficulty of German economic and political
penetration in Southeastern Europe. It is hardly
to be supposed that the German Government will
view these developments without attempts at counter moves, and the whole situation therefore is
fraught with menace.
The proposed agreement already has been discussed in visits to Rome by Chancellor Engelbert
Dollfuss of Austria, and Premier Julius Goemboes
of Hungary. M. Goemboes went to Berlin before
conferring with Premier Mussolini, but the significance of his visit to the German capital is not yet
clear. Foreign Minister Titulescu, of Rumania, is
to continue the discussions in Rome, where he will
be the spokesman for the Little Entente countries.
M.Titulescu was in London recently. Austrian and
Hungarian officials started conversations in Budapest, this week, also with the understood aim of furthering the international agreement. In a Rome
report to the New York "Times" it is remarked that
all this diplomatic activity is considered preparatory to the conclusion of an economic and political
accord between Italy, Czechoslovakia, Yugoslavia,
Rumania, Austria and Hungary. "Though France
is not directly a party to the pact, she is understood
to have given her consent," the dispatch continued.
"French influence over the Little Entente is so
strong that the negotiations could not reach a satisfactory conclusion except in harmony with France.
The proposed pact represents the first step toward a
true rapprochement between Italy and France, since
the signing of the four-Power treaty. As the Little
Entente would participate, it would also lead to
improvement in the relations between Italy and
Yugoslavia, which have not been friendly. Italy is
expected to dominate the negotiations because Hungary and Austria are the mainstays of the Italian
political system in Central Europe. It is understood Italy will receive considerable economic advantages, notably the concentration of Central
European trade in the ports of Trieste and Fiume."
ASCIST activities both within Germany and outside its borders are causing renewed strains
in the relations of the Reich with other countries.
The anti-Semitic campaign resulted in a brutal attack on Philip Zuckerman, a naturalized American
Jew, by National-Socialists at Leipzig, in mid-July,
on the occasion of a review of the "storm troops" of
the Nazis. Mr. Zuckerman was seriously injured,
and a sharp protest promptly was filed with the
German authorities by the American Consul-General, George S. Messersmith. Nearly a dozen similar
incidents occurred in March and April, immediately
after the elections which swept the Nazis into power,
and protests then made resulted in assurances by
the German officials against any recurrences. Mr.
Messersmith also found it necessary to intervene
with the Berlin authorities in behalf of Walter Orloff, of Brooklyn, N. Y., who was imprisoned for
alleged Communist activities. It was indicated
F
Aug. 5 1933
Thursday that Mr. Orloff would be released and
probably allowed to return to the United States.
Diplomatic representations by Great Britain,
France and Italy are reported to be under consideration, in order to discourage German Nazi aerial demonstrations over the Austrian frontier. Airplanes
from Munich are said to have staged "raids" on a
number of Austrian towns on July 21 and again on
July 30. Large quantities of leaflets were dropped
inciting the populace to revolt against the Government of Chancellor Engelbert Dollfuss, and to engage in strikes and wholesale withdrawals of bank
deposits, Vienna dispatches said. Detailed information regarding these alleged infringements of Austrian sovereignty was requested at Vienna by the
accredited diplomatic representatives of England,
France and Italy, and the desired data were furnished on Monday. In disclosing these developments
a spokesman of the Austrian Foreign Office stated
that no request for intervention had been made to
the three Powers. The three Powers consulted subsequently, a London dispatch of Wednesday to the
New York "Times" states, with a view to possible
joint action. Reports that German officials recently
made an unsuccessful attempt to purchase 40 police
airplanes in Great Britain also are said to be causing disquietude in London and Paris. A London
report of Thursday to the New York "Evening Post"
states that the British Government, through diplomatic channels, has politely requested the German
Government to explain the meaning of the "more or
less disquieting statements put out from German
official sources regarding air rearmament."
LTHOUGH Chancellor Adolf Hitler and his Nazi
followers have adopted measures of the most
extreme severity to stamp out opposition to their
regime in Germany, recent reports from Berlin indicate they have been far from successful in their aims.
The discovery was reported late last week of a
secret Communist organization, with ramifications
extending all over the industrial section of the Ruhr.
These foes of the Nazis had large stores of arms in
various depots, a Berlin dispatch to the New York
"Herald Tribune" said. It was admitted officially
that the secret Communist organization had been
unearthed, but "little knowledge percolates to the
general public concerning the extent of the Red
movement," the report added. One large Communist
arms depot was found in Darmstadt, while a second
was discovered in Recklinghausen, Westphalia.
That the Communist movement in the Reich is very
much alive is indicated also by continued printing
and surreptitious circulation in Berlin of the Communist newspaper, "Die Rote Fahne." Surprise
raids were made in various German cities, last
Saturday, in a further endeavor to stamp out this
opposition, and 250 persons were taken into custody.
The grimness of the struggle was attested Tuesday,
when four Communists were beheaded,in Hamburg,
for attacking Nazis on July 17 1932. The Fascist
authorities in Germany continue to demand, incessantly, that all Germans devote themselves to the
National-Socialist State. "In the future there is to
be only one authority, namely, that of the State,"
Captain Hermann Goering, the Nazi Premier of
Prussia, declared recently. Capital punishment was
decreed, late last month, for any subversive
activity.
A
917
Financial Chronicle
Volume 137
HARP increases in Japanese army and navy expenditures for the fiscal year 1934-35 are indicated in estimates submitted to the Finance Ministry at Tokio, Tuesday, by the chiefs of the Japanese defense services. Naval appropriations requested total 680,000,000 yen, while the army estimates are said to call for expenditures of 560,000,000
yen. The combined requests of 1,240,000,000 yen
($347,000,000 at the current rate of exchange) are
45% larger than the current appropriation, a Tokio
dispatch to the Associated Press said. The naval
appropriations requested are said to indicate Japanese intentions to start on a building program designed to provide the entire tonnage authorized
under the London Treaty when that accord expires
in 1936. "The naval building program of the Roosevelt Administration was believed by Japanese and
foreign authorities here to be the primary cause of
Japan's projected increase in sea fighting power,"
the Associated Press report stated. "The diplomatic isolation of Japan and friction with several
Western Powers as a result of the Manchurian'
trouble and of Japan leaving the League of Nations
were given as a second potent reason. A third important motive was said to be the determination of
the Japanese Government to go to the naval conference in 1935 with a fleet in commission or under
construction up to the limits of the London Treaty,
upon which would be based the demand for naval
parity with the United States and Great Britain."
It was also mentioned in the report that defense
expenditures on this scale would entail an even
larger Japanese national budget than the present
record one of 2,300,000,000 yen, with its deficit of
1,000,000,000 yen.
S
other accounts. The reserve ratio is at 42.07% as
compared with 43.54% the previous week and 29.88%
a year ago. Loans on government securities fell off
£575,000 and those on other securities £105,738.
The latter consists of discounts and advances and
securities which decreased £71,367 and £34,371 respectively. The rate of discount remains at 2%.
Below we show a comparison of the different items
for five years:
BANK OF ENGLAND'S COMPARATIVE STATEMENT.
Aug. 2
1933.
Circulation_a
Public deposits
Other deposits
Bankers'accounts_
Other accounts__ _
Gov't securities
Other securities
Disct.& advances_
Securities
Reserve notes & coin
Coin and bullion
Proportion of reserve
to liabilities
Bank rate
Aug. 3
1932.
Aug. 5
1931.
Aug.6
1930.
Aug. 7
1929.
£
£
£
.
£
£
382,185,000 374,727,992 365,251,566 372,978,274 376,202,888
21,518,000 11,491,339 11,438,012 8,865,662 8,269,890
143,267,249 121,252,018 96,612,240 98,339,647 104,255,749
89,457,395 84,951,848 63,436,883 61,552,286 67,127.342
53,809,854 36,300,170 33.175,357 36,787,361 37.128,407
90,020,963 75,979,220 49,310,906 53,145,547 74,266,855
23,557,274 35,231,342 32,301,752 31,574.416 31,163,431
11,171,929 14,314,101 9,018,855 7,960,057 6,834,541
12,385,345 20,917,241 23,282,897 23,614,359 24,328,890
69,337,000 39,671,682 44,576,189 40.616,565 25,228,695
191,521,188 139,399,674 134,827,755 153,594,839 141,431,583
42.07%
2%
29.88%
2%
41.25%
4Si%
37.88%
3%
22.41%
536%
a On Nov. 29 1928 the fiduciary currency was amalgamated with Bank of England
note issues, adding at that time £234,199,000 to the amount of Bank of England
notes outstanding.
HE Bank of France in its statement for the week
ended July 28 shows an increase in gold holdings of 247,235,316 francs. Total gold holdings are
now 81,976,107,582 francs, in comparison with 82,167,515,132 francs a year ago and.58,407,489,492
francs two years ago. Credit balances abroad and
advances against securities register decreases of 1,000,
000 francs and 23,000,000 francs while French commercial discounted and creditor current accounts
show increases of 496,000,000 francs and 165,000,000
francs respectively. Notes in circulation reveal a
gain of 599,000,000 francs raising the total of notes
outstanding to 82,853,659,275 francs. Total circulation last year stood at 82,117,772,110 francs and
HERE have been no changes during the week in the previous year at 79,861,537,655 francs. The
the discount rates of any of the foreign central proportion of gold on hand to sight liabilities stands
banks. Present rates at the leading centers are at 78.17%; a year ago it was 76.16%. Below we
furnish a comparison of the various items for three
shown in the table which follows:
DISCOUNT RATES OF FOREIGN CENTRAL BANKS.
years:
STATEMENT.
T
T
BANK OF FRANCE'S COMPARATIVE
Country.
Rate in
Effect
Date
Aug. 4 Established.
Austria— __
Belgium......
Bulgaria__
Chile
Colombia.. _
Czechoslovakia---Danzig_ _ _ _
Denmark _ _
England_ _ _
Estonia_ _ _ _
Finland_ _ _.
._ _
France.
Germany .._
Greece
Holland _ _ _
Previous
Rate.
5
334
834
434
4
Mar. 23 1933
Jan. 13 1932
May 17 1932
Aug. 23 1932
July 18 1933
6
234
93.4
534
5
334
4
3
2
534
534
23.4
4
73.4
334
Jan. 25 1933
July 12 1932
June 1 1933
June 30 1932
Jan. 29 1932
May 27 1933
Oct. 9 1931
Sept. 31 1932
May 29 1933
Jute 28 1933
434
5
334
23.4
634
6
2
5
9
4
Country.
Rate in
Date
Effect
Aug. 4 Established.
PreMous
Rate.
Hungary.._ 434 Oct. 17 1932 5
India
334 Feb. 16 1933 4
June 30 1932 334
Ireland.... 3
Jan, 9 1933 5
4
Italy
3.65 July 3 1933 4.38
Japan
5
July 1 1933 434
Java
7
May 5 1932 7Si
Lithuania
Norway- - - 334 May 23 1933 4
Oct. 20 1932 734
Poland.. _ _ _ 6
Mar. 14 1933 63.4
6
Portugal.
Apr. 7 1933 7
6
Rumania
SouthAfrica 4
Feb. 21 1933 5
6
Oct. 22 1932 634
Spain
June 1 1933 33.4
3
Sweden..._
Jan. 22 1931 234
Switzerland 2
In London open market discounts for short bills
on Friday were /@7-16%, as against 7-16% on
Friday of last week and 7-16@3/2% for three months'
bills, as against 7-16@3/
2% on Friday of last week.
Money on call in London yesterday was 31%. At
Paris the open market rate remains at 23/2% and in
Switzerland at 2%.
HE Bank of England statement for the week
ended Aug. 2 again shows a sizeable increase in
gold holdings, which amounts this time to £141,054,
and again the total establishes a new high record.
The bank now holds £191,521,188 gold in comparison
with £139,399,674 a year ago. The gain in gold
was attended by an expansion of £4,964,000 in circulation and so reserves fell off £4,823,000. Public
deposits rose £7,381,000 while other deposits decreased £12,902,712. Of the latter amount, £9,053,347 was from bankers accounts and £3,849,365 from
T
Changes
for Week.
Gold holdings
Credit bals. abroad
a French commer'l
bills discounted_
b Bills bought abr'd
Advs. agst. secure..
Note circulation
Cred.curr. acc'ts
Proportion of gold
on hand to sight
liabilities
July 28 1933. July 29 1932. July 31 1931.
Francs.
Francs.
Francs,
Francs.
+247,235,316 81,976,107,582 82,167,515,132 58,407.489,492
—1,000,000 2,572,759,060 3,384,489,391 11,217,826,070
+496,000,000 3,461,939,042 3,904,828,003 4,563,856,536
1,404,168,232 2,097,323,167 15,025,258,004
No change.
—23,000,000 2,660,847,382 2,747,067,243 2,859,780.191
+599,000,000 82,853,659,275 82,117,772,110 79,861,537,655
+165,000,000 22,019,965,183 25,773,523,064 24,039,502,357
56.21%
76.16%
78.17%
—0.33%
a Includes bills purchased in France. b Includes bills discounted abroad.
HE Bank of Germany in its statement for the
last quarter of July records an increase in gold
of 16,573,000 marks. Total bullion
bullion
and
stands now at 244,960,000 marks, as compared with
766,216,000 marks last year and 1,363,298,000 marks
the previous year. A decrease appears in reserve in
foreign currency of 6,428,000 marks, in silver and
other cain of 97,764,000 marks and in notes on other
German banks of 8,370,000 marks. Notes in circulation expanded 230,963,000 marks, raising the total
of the item to 3,492,125,000 marks. A year ago
circulation aggregated 3,966,868,000 marks and two
years ago 4,453,732,000 marks. Bills of exchange
and checks, advances, investments, other assets,
other daily maturing obligations and other liabilities
reveal increases of 208,355,000 marks, 104,967,000
marks, 346,000 marks, 46,617,000 marks, 16,489,000
marks and 16,844,000 marks respectively. The
proportion of gold and foreign currency to note
T
Financial Chronicle
918
circulation is now at 9.2% as compared with 22.5%
the same period a year ago. Below we furnish a
comparison of the various items for three years:
REICHSBANK'S COMPARATIVE STATEMENT.
Changes
for Week.
Assets—
Gold and bullion
Of which depos. abr'd
Res've in for'n currency
Bills of exch. &checks_
Silver and other coin_ _ _
Notes on oth. Ger. bks_
Advances
Investments
Other assets
Liabilities—
Notes in circulation_
0th.daily matur. oblig_
Other liabilities
Propor'n of gold 49, for'n
cur. to note circtlla'n_
July 31
1933.
July 30
1932.
July 31
1931.
Reichsmarks. Reichsmarks. Reichsmarks. Reichentarks.
+16,573,000 244,960,000 766,216,000 1,363,298,000
99,553,000
62,722,000
17,647,000
No change.
77,612,000 127,870,000 246,322,000
—6,428,000
+208,355,000 3,181,003,000 3,155,143,000 3,521,605,000
45,034,000
—97,764,000 206,848,000 180,040,000
3,757,000
2,430,000
4,731,000
—8,370,000
+104,967,000 186,594,000 224,032,000 347,044,000
+346,000 320,176,000 365,218,000 102,874,000
+46,617,000 526,339,000 792,661,000 908,794,000
+230,963,000 3,492,125,000 3,966,868,000 4,453,732,000
+16,489,000 411,792,000 379,591,000 833,788,000
+16,844,000 196,599,000 699,725,000 763,877,000
—0.4%
9.2%
22.5%
they are %7
1
asked; for four months,
0 bid and 4%
%% bid and Y
i% asked; for five and six months,
13'g% bid and 1% asked. The bill buying rate of
the New York Reserve Bank is 1% for bills running
from 1 to 90 days, and proportionately higher for
longer maturities. The Federal Reserve banks'
holdings of acceptances decreased during the week
from $9,616,000 to $8,213,000. Their holdings of
acceptances for foreign correspondents, however,
increased during the week from $36,021,000 to
$37,123,000. Open market rates for acceptances
are as follows:
36.1%
Prime eligible bills
HE New York money market has been dull all
week, with rates unchanged in every department. Other factors were overshadowed by the
money market significance of the new offering of
$850,000,000 or thereabouts of new bonds and notes
by the United States Treasury, early Monday, in
connection with Aug. 15 requirements. The offering consisted of $500,000,000 in 3%.% 8-year bonds,
and $350,000,000 in 134% notes due Aug. 1 1935.
Subscriptions were attracted in huge volume by this
offering, President Roosevelt indicating Wednesday
that more than '$4,500,000,000 had been offered by
prospective investors. Certificates of indebtedness
aggregating $920,000,000 due Aug. 15 and Sept. 15,
are exchangeable for the new securities, but even
with this factor taken into consideration it is apparent that cash subscriptions have been immense.
Also indicative of money market conditions was an
award of $60,000,000 in 91-day Treasury discount
bills, Monday, at an average discount of only 0.35%.
Call loans on the New York Stock Exchange have
been 1% for all transactions of the week, whether
renewals or new loans. No transactions have been
reported at any time in the unofficial street market
at concessions from the official rate. Time loan
rates were unchanged. Both the usual compilations
of brokers' loans against stock and bond collateral
have been made available this week. The comprehensive New York Stock Exchange report for the
full month of July reflected an advance of $136,857,814 in the total of such loans outstanding. The
Federal Reserve Bank of New York report for the
week to Wednesday night showed a decrease of
$18,000,000 in the week covered.
T
EALING in detail with call loan rates on the
Stock Exchange from day to day, 1% has
been the ruling quotation all through the week for
both new loans and renewals. Practically no business
has been transacted in time money this week. Rates
are nominal at 1@114% for 30 and 60 days, 1%®
1%% for three and four months and M@2% for
five and six months. The market for commercial
paper has been active during most of the week,
though transactions are still restricted because of
shortage of paper. Rates are 1%% for extra choice
names running from four to six months and 1.(%
for names less known.
D
--4--
HE demand for prime bankers' acceptances has
been good during the present week, but there
is still a shortage of high class paper. Rates are
unchanged. The quotations of the American Acceptance Council for bills up to and including 45
bid, and 4
days are
8% asked; for 46 to 90 days
T
Aug. 5 1933
SPOT DELIVERY.
—180 Days— —150 Days— —120 Days—
Bid.
Asked.
Bid.
Asked.
Bid.
Asked.
1
1
131
131
31
31
—90Days— -46 to 60 Days- —Ito 45 Days—
Bid.
Asked.
Bid.
Asked.
Bid.
Asked.
Prime eligible bills
31
FOR DELIVERY WITHIN THIRTY DAYS.
Eligible member banks
Eligible non-member banks
1 Va % bid
131% bid
HERE have been no changes this week in the
rediscount rates of the Federal Reserve banks.
The following is the schedule of rates now in effect
for the various classes of paper at the different Reserve banks:
T
DISCOUNT RATES OF FEDERAL RESERVE BANKS.
Federal Reserve Bank.
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Rate in
Effect on
Aug. 4.
3
2;,6
3
3
334
331
3
334
331
3
Date
Established.
Previous
Rate.
June 1 1933
May 26 1933
June 81933
June 10 1933
Jan. 25 1932
Nov. 14 1931
May 27 1933
June 8 1933
Sept. 12 1930
Oct. 23 1931
Jan. 28 1932
June 2 1933
331
3
331
331
3
3%
331
3
4
331
exchange and the entire foreign
STERLING
exchange market continue quite demoralized as
a result of the uncertainties in monetary and economic
matters which have developed on this side since
March. There are no essentially new developments
in the foreign exchange situation this week. The
range for sterling has been between 4.403/i and 4.60
for bankers' sight bills, compared with a range of
between 4.68% and 4.43 last week. The range for
cable transfers has been between 4.403/ and 4.60%,
compared with a range of between 4.69% and
4.433/ a week ago. Current rates with respect to
the dollar are, of course, noticeably easier in comparison with the peak of Wednesday, July 19, when
sterling cable transfers in New York were quoted
at 4.863/
2. Current quotations do not indicate that
sterling is easier with respect to gold, but that the
dollar has appreciated in terms of gold. In relation
to French francs, or gold, sterling continues relatively
steady, as it has been for months, ranging between
84.65 and 86 francs to the pound, the desirable
mean appearing to be 85 francs to the pound, which
represents a depreciation of 31% in terms of gold.
On July 19 and for several days thereafter the
United States dollar was quoted in Paris at 68.8
gold cents. On Saturday last the dollar had moved
up to 73.8 gold cents. On Monday it was quoted
at 73.7; on Tuesday, at 74.7; on Wednesday, 74.5;
On Thursday, 73.1, and yesterday, at 73.6 gold cents
to the dollar. From this it would seem that the
United States dollar is gradually creeping up toward
firmness. It is thought that were it not for frequent
outbursts of inflationary talk on this side the rate
might climb steadily in terms of gold and the sterling
rate drop with respect to the dollar. For instance,
Volume 137
Financial Chronicle
rehewed inflationary utterances apparently originating from inspired sources in Washington were
responsible for the setback in the dollar on Wednesday and Thursday of this week.
The text of the British Commonwealths' declaration in regard to co-operative economic and monetary
measures which was made public in London on Friday
of last week will be found in another column. As
stated here on Saturday last, the British Empire bloc
in this declaration asserted that the United Kingdom
"has no commitments to other countries as regards
the future management of sterling." It was also
pointed out at the time that British Treasury officials
had stated before the House of Commons that sterling
was not "tied" to the franc or to gold, but that the
stpady quotation around 85 francs to the pound for
Lbndon checks on Paris which has prevailed for
months was merely a coincidence. It might be said
with some emphasis that the foreign exchange market
both here and abroad is strongly disinclined to accept
the interpretation of coincidence. In some quarters
it is thought that the British authorities will allow
sterling to depreciate further in relation to gold, but
the probabilities point in another direction. Beginning in August under normal conditions seasonal
pressure sets in against sterling and the Continental
exchanges, reaching maximum force in favor of the
dollar around mid-October and lasting until the turn
of the year, when exchange turns seasonally in favor
of Europe and against New York. In normal times
this seasonal pressure is lessened in favor of sterling
and the European countries by reason of the vacation
season with tourist requirements reaching their maximum. This favoring influence will be less important
this year. Seasonal pressure on sterling may now be
favoring the dollar and may well be an offsetting
influence against the considerable export of American
capital which has been in progress for some weeks.
There can be no doubt that the agreements reached
by the British Commonwealths have greatly strengthened the sterling group of currencies, which include
the Scandinavian units and may yet embrace other
currencies including, it is thought highly probable,
some of the leading South American units.
At the same time it is well to consider that London
recognizes the essentially strong position of the gold
bloc countries. They are now better equipped than
ever to defend the gold value of their currencies and
it would seem improbable that London would do
anything to impair their position. It is more likely
that the pound will follow the gold bloc than the
dollar. It is recognized in London that were the
gold block defense to crumble, as it doubtless would
if sterling were to follow any deliberate decline in
the dollar, the ensuing debacle in the entire foreign
exchange market would be complete. Some indication of co-operation on the part of the London authorities with the plans of the gold bloc is to be found
in the heavy exports of gold from New York to France
during the past few weeks. This week the Federal
Reserve Bank reports a shipment of $41,401,200
gold from earmarked stock to France and a shipment of $6,504,000 of earmarked gold to Czechoslovakia (one of the gold bloc countries). Gold
shipments to France in the course of the past several
weeks total approximately $108,000,000. France
has had no such amount of gold earmarked here.
Practically all its gold stock was removed in 1932.
There is no way of discovering exactly the precise
919
meaning of earmarked gold operations, as they are
never officially disclosed, but it is only reasonable
to believe that most of the gold recently shipped to
France has been sold to the Bank of France by the
British authorities whose earmarkings here have been
quite large since the establishment of the Exchange
Equalization Fund. It is somewhat puzzling to
the market to determine how Czechoslovakia has
been able to set up a claim for $6,504,000 of gold at
New York. The market is likewise mystified as to
what becomes of this gold when it reaches Paris.
It is fairly questioned whether the Bank of France
statements at present are fully revealing. The above
mentioned gold shipments from New York in recent
weeks amount to more than fr. 2,550,000,000 at
gold parity, and no such increase in gold holdings is
disclosed by the Bank of France statement. Because
of the great strength in the gold bloc units during the
past few weeks there have been heavy withdrawals
of foreign funds from the London market, but London is not disturbed by the occurrence in view of the
long continued plethora of unloanable short-term
funds. The restrictions against foreign loans appear
to have been withdrawn, however, by the London
authorities and the abundance of funds in the London
market will soon be more readily available. This
week the Canadian loan floated in London, amounting to £15,000,000, of which further details will be
found on another page, was oversubscribed 300%.
Open market rates are little changed and give evidence of the great abundance of funds. Call money
against bills has long been in supply at W4%. Twomonths' bills are quoted 5-16% to 7-16%, threefour-months' bills at
months' bills at %% to
5 %, and six-months' bills at 11-16% to
9-16% to 4
4
3 %. These rates have shown only the slightest
variation for many months.
Gold continues to flow to the London open market
from all quarters of the world and is taken largely
for Continental account, though for several weeks
the Bank of England and the Exchange Equalization
Fund have been moderately in the market despite
the high cost of the metal in shillings and pence and
the premium in terms of gold. On Saturday last
the Bank of England bought £2,339 in gold bars.
The bars were quoted in the open market at 123s.
8d. On Monday £180,000 of bar gold was available
in the open market and was taken for an undisclosed
2d. Bars were
destination at a premium of 63/
quoted at 124s. The Bank of England bought
£99 in jewelers bars. On Tuesday £300,000 bar
gold was taken for an unknown destination at a
premium of 5d. The bars were quoted at 124s.
On Wednesday of £450,000 available, half was taken
for an unknown destination (probably the Exchange
Equalization Fund) and the balance went for Continental account at a premium of 4d. Bars were
quoted at 124s. 2d. On Thursday the Bank of
England bought £1,868 in gold bars. In the open
market £150,000 was available and was taken for
Continental account at a premium of 3Md. Bars
were quoted 124s. 7d. On Friday £350,000 in bars
was available and taken for Continental account at a
2d.
premium of 4d. Bars were quoted 124s. 63/
The Bank of England statement for the week ended
Aug.I,2 shows an increase in gold holdings of £141,054,
the total standing at £191,521,188, which compares
with £139,399,674 a year ago and with £150,000,000
recommended by the Cunliffe committee.
Financial Chronicle
920
At the Port of New York the gold movement for
the, week ended Aug. 2, as reported by the Federal
Reserve Bank of New York, consisted of exports
of $41,656,000, of which $35,152,000 was shipped to
France and $6,504,000 to Czechoslovakia. There
were no gold imports. The Reserve Bank reported
a decrease of $41,309,000 in gold earmarked for
foreign account. In tabular form the gold movement at New York for the week ended Aug. 2, as
reported by the Federal Reserve Bank of New York,
was as follows:
GOLD MOVEMENT AT NEW YORK, JULY 27-AUG. 2, INCL.
Exports.
Imports.
$35,152,000 to France.
6,504,000 to Czechoslovakia.
None.
$41,656,000 total.
Net Change in Gold Earmarked for Foreign Account.
Decrease: $41,309,000.
The above figures are for the week ended Wednesday evening. On Thursday there were no imports
or exports of gold or change in gold held earmarked
for foreign account. On Friday there were no
imports of the metal, but $6,249,200 of gold was
exported to France and gold held earmarked for
foreign account decreased $6,249,200. No reports
have come during the week of gold having been
received at any of the Pacific ports.
Canadian exchange continues at a discount. On
Saturday last Montreal funds were at a discount of
7%; on Monday, at 7%; on Tuesday, at 7%%; on
4%; on Thursday, at 6%, and
Wednesday, at 57
on Friday, at 6%%.
Referring to day-to-day rates, sterling exchange on
Saturday last was inclined towards ease in a dull
2@4.533/
2;
half-day session. Bankers'sight was 4.503/
cable transfers, 4.50%@4.54. On Monday the rate
developed further weakness. The range was 4.45%
@4.60 for bankers' sight and 4.45M@4.6034. for
cable transfers. On Tuesday the market was dull,
sterling easier in terms of the dollar. Bankers'
2@
sight was 4.403/
8@4.46%; cable transfers 4.403/
4.473'. On Wednesday sterling fluctuated widely,
with a firmer tendency. The range was 4.44@
4.53% for bankers' sight and 4.44%@4.53% for
cable transfers. On Thursday, owing to renewed
inflation talk here, the pound looked firmer. The
range was 4.5134.@4.583i for bankers' sight and
4.51%@4.58% for cable transfers. On Friday,
sterling showed weakness, the range was 4.48@
4.5234 for bankers' sight and 4.4834@4.523/2 for
cable transfers. Closing quotations on Friday were
4.517
4 for demand and 4.52 for cable trnasfers.
Commercial sight bills finished at 4.51; 60-day bills
at 4.51; 90-day bills at 4.5032; documents for payment (60 days) at 4.5032, and seven-day grain bills
at 4.513/2. Cotton and grain for payment closed
at 4.51.
XCHANGE on the Continental countries is
firm in terms of the dollar, led by Paris, the
chief gold-bloc center. The French Treasury on
Tuesday paid off half its credit obtained in London
from a British banking syndicate. The loan was
made a few months ago to tide the French Treasury
over a period of slack tax returns. According to the
"Wall Street Journal" "This repayment will enable
the Bank of France to get rid of a part of the troublesome London balances which have been hanging over
its head since the British gold suspension. At the
end of 1931 the Bank of France had a loss in its
sterling balances exceeding its entire capital and
E
Aug. 5 1933
surplus, and it was necessary for the Government to
give the Bank a virtual present of the amount of the
depreciation to prevent any difficulties. The Bank's
foreign balances still amount to some 3,700,000,000
francs, most of which is in sterling. Now the Bank
will give the Treasury some of its sterling in exchange
for the Treasury's franc balances, wiping out some
1,250,000,000 francs of these foreign exchange
holdings. Repayment of the entire credit in this
manner will use up another third, leaving only
something more than 1,000,000,000 francs, or about
$40,000,000 of foreign balances. This compares
with more than $1,000,000,000 held abroad by the
Bank of France in 1928 and 1929." In our comments above concerning sterling exchange some
important remarks were made in regard to French
balances and earmarked gold takings from New York,
the intimation being that these gold holdings were
sold to the Bank of France by the British authorities
and indicating a disposition on the part of London
to support the gold bloc countries in their endeavor
to maintain the gold standard. This week the
Federal Reserve Bank of New York reports a shipment of $41,401,200 to France, which brings the
total gold withdrawals by France from New York
during the past few weeks to approximately $108,000,000. For some unexplained reason no such
great increase in gold holdings is disclosed by the
weekly statements of the Bank of France. The
Bank of France statement for the week ended July 28
shows an increase in gold holdings of 247,235,316
francs, the total standing at 81,976,107,582 francs,
which compares with 82,167,515,132 francs a year
ago and with 28,935,000,000 francs when the unit
was stabilized in June 1928. The Bank's ratio
stands at 78.17%, compared with 76.16% a year ago
and with legal requirement of 35%.
The Other Continental exchanges are generally
exceedingly firm in terms of the dollar, all moving
more or less in sympathetic relation to the French
franc. All these foreign exchanges are extremely
dull and wide fluctuations are registered on very
small transactions. A United Press dispatch on
Saturday lastfrom London stated that the "Exchange
Telegraph" reported that Rumania had forbidden
exports of gold or silver. As noted in the resume
of sterling exchange, Czechoslovakia withdrew $6,504,000 of earmarked gold from New York this
week. The market is puzzled to explain the significance of this withdrawal and seems to see in it a
transfer of gold from France to Prague to support
the gold standard, as Czechoslovakia is a member
of the gold bloc.
The London check rate on Paris closed on Friday
at 84.55, against 85.31 on Friday of last week. In
New York sight bills on the French centre finished
2 on Friday of last
on Friday at 5.36, against 5.283/
week; cable transfers at 5.363/2, against 5.29, and
commercial sight bills ,at 5.3532, against 5.30. Antwerp belgas finished at 19.11 for bankers' sight bills
and at 19.12 for cable transfers, against 18.89 and
18.90. Final quotations for Berlin marks were 32.69
for bankers' sight bills and 32.70 for cable transfers.
in comparison with 32.34 and 32.35. Italian lire
closed at 7.18), for bankers' sight bills and at 7.19
2 and 7.13. Ausfor cable transfers, against 7.123/
trian schillings closed at 15.50, against 15.40; exchange on Czechoslovakia at 4.08, against 4.03;
on Bucharest at 0.85, against 0.83; on Poland at
15.45, against 15.28, and on Finland at 2.05, against
Volume 137
Financial Chronicle
921
1.88. Greek exchange closed at 0.773/
2 for bankers' Friday of last week; cable transfers at 353', against
sight bills and at 0.78 for cable transfers, against 35.00. Brazilian milreis are nominally quoted at
7.81 for bankers' sight bills and 83/2 for cable trans0.753/ and 0.76.
fers, against 7.81 and 83/2. Chilean exchange is
XCHANGE on the countries neutral during the nominally quoted at 83/2, against 83/2. Peru is
war displays no new features of importance. nominal at 20.00, against 21.50.
The Scandinavian units fluctuate, of course, with
sterling exchange, to which they are attached, and
XCHANGE on the Far Eastern countries prewhile no official announcements have come from the
sents no new features of importance The
capitals of these countries it is generally taken for Chinese units are firm and fairly steady, bearing a
granted that they will adhere to the sterling group. close relation to international silver prices. Silver
Holland and Switzerland are aligned with the French was quoted in New York this week at from 353/i to
5 cents per fine ounce, compared with an average
franc, being next to France the most important 35%
members of the gold bloc. Both these currencies are rate of around 26 cents a few months ago. The
exceptionally firm in terms of dollars and of sterling. Japanese yen is quoted firm in terms of the dollar,
During the past few weeks there appears to have in view of the fact that prior to the abandonment
been a noticeable return of foreign funds from of the gold standard by the United States the JapanLondon to both Switzerland and Holland, especially ese authorities declared themselves well content to
to the Amsterdam market. Funds are in con- hold the yen around 25.00. The Indian rupee
siderable volume in Amsterdam, and this circum- fluctuates with the pound sterling, to which it is
stance has resulted in reducing open market discount attached at the rate of is. 6d. per rupee.
rates to about 23/2% from around 35
4% in the middle
Closing quotations for yen checks yesterday were
of July, thus removing all strain from the guilder. 273/
2, against 28 on Friday of last week. Hong
Owing to the return flow of funds to Amsterdam Kong closed at 32%
1@32 11-16, against 32%@
and the renewed confidence in the guilder, the 32 13-16; Shanghai at 283
%@28%, against 29@293/8;
Netherlands Bank was able to reduce its discount Manila at 50, against 50; Singapore at 52 8, against
rate on Friday, July 28, to 332% from 4%. A 53%;
3 Bombay at 3438, against 343'I, and Calcutta
further reduction is expected. Spanish pesetas are at 3438, against 343j.
firm and steady. The peseta has been practically
anchored to the French franc since the abandonment
URSUANT to the requirements of Section 522
of gold by Great Britain. Spain is not considered
of the Tariff Act of 1922, the Federal Reserve
a member of the gold bloc as the peseta has never Bank is now certifying daily
to the Secretary of the
been stabilized officially. The sympathy of Madrid, Treasury the buying rate
for cable transfers in the
however, is with the bloc.
different countries of the world. We give below a
Bankers' sight on Amsterdam finished on Friday record for the week just passed:
at 55.20, against 54.65 on Friday of last week; cable
FOREIGN EXCHANGE RATES CERTIFIED BY FEDERAL RESERVE
transfers at 55.25, against 54.70, and commercial
BANKS TO TREASURY UNDER TARIFF ACT OF 1922,
JULY 29 1933 TO AUG. 4 1933. INCLUSIVE.
sight bills at 55.05, against 54.55. Swiss francs
closed at 26.47 for checks and at 26.48 for cable
Noon Buying Rate for Cable Transfers in New York,
Monetary
Value in United States Money.
transfers, against 26.24 and 26.25. Copenhagen Country and
Unit.
Just/ 29. .itay 31. Aug. 1. Aug. 2. Aug. 3. Aug. 4.
checks finished at 20.18 and cable transfers at 20.19,
EUROPE$
$
$
$
$
$
against 20.19 and 20.20. Checks on Sweden closed Austria,schilling
.154500 .155250 .152750 .152000 .155000 .154333
.189318 .190040 .186260 .187800 .191109 .189558
Belgium, belga
Bulgaria, lev
.009750* .010400* .009350* .009900* .009800* .010000*
at 23.31 and cable transfers at 23.32, against 23.34 Czechoslovakia,
krone .040457 .040516 .039857 .040000 .040837 .040483
krone
.201981 .202522 .198416 .198907 .202141 .200669
and 23.35; while checks on Norway finished at 22.72 Denmark,
England. pound
4.529038 4.528125 4.441153 4.458666 4.532692 4.497416
sterling
and cable transfers at 22.73, against 22.74 and 22.75. Finland,
markka
.020066 .020160 .019766 .019766 .020183 .020000
franc
.053159 .053291 .052375 .052626 .053550 .053178
Spanish pesetas closed at 11.41 for bankers' sight France,
Germany, reichsmark .323636 .325250 .318470 .320384 .326881 .323914
drachma
.007658 .007752 .007572 .007627 .007766 .007675
bills and at 11.42 for cable transfers, against 11.30 Greece,
.547618 .549045 .538927 .542458 .552250 .547983
Holland, guilder
.242250 .244000 .240000 .241000 .244250 .239000*
pengo
Hungary,
and 11.31.
.071408 .071787 .070300 .070607 .071746 .071256
Italy, lira
E
E
P
XCHANGE on the South American countries is
E
entirely nominal and all foreign trade and
foreign exchange
operations are under the control of
government boards. It is thought highly probable
that Argentina and Brazil may throw their sympathies with the sterling group. According to a
cable dispatch from Buenos Aires to the First
National Bank of Boston there was a favorable
trade balance of 39,000,000 paper pesos in Argentina
in June and one of 150,000,000 paper pesos for the
first half of 1933. The prospects are for a continued favorable balance because only 50% of the
grain surplus was exported in the first half of the
year and prices are now improved. The Central
Bank of Chile reports business conditions unfavorable, affected by the external revaluation of the
Chilean peso following the drop in the quotation of
foreign exchange rates, particularly of the dollar.
Argentine paper pesos closed on Friday nominally
at 35.00 for bankers' sight bills, against 343/i on
.227409 .227722 .222937 .224341 .227725 .225900
Norway, krone
.153875 .155375 .152400 .152375 .154000 .152900
Poland, zloty
.041150 .041466 .040425 .040550 .041780 .041108
Portugal, escudo
.008300 .008500 .008262 .008387 .008566 .008550
Rumania,leu
112953 .113700 .111691 .112100 .114376 .113492
Spain, peseta
.233300 .233900 .228937 .230233 .233541 .231975
Sweden,krona
Switzerland, franc. _ _ .262583 .263125 .258583 .259950 .265038 .262230
Yugoslavia, dinar_
.018466 .018587 .018600 .018512 .019025 .018660
ASIAChinaChefoo (yuan) dol'r .282916 .279916 .274791 .280208 .283125 .281666
Hankow (yuan)dol'r .282916 .279916 .274791 .280208 .283125 .281666
Shanghai(yuan)dol'r .282968 .280625 .275781 .279843 .283906 .282187
Tientsin (yuan) dol'r .282916 .279916 .274791 .280208 .283125 .281666
Hong Kong dollar
.320312 .320625 .315625 .313750 .323437 .320312
India, rupee
.338600 .340000 .334100 .335100 .341875 .337950
Japan, yen
.279062 .277562 .269050 i .269200 .274600 .273075
Singapore (S.S.) dollar .523750 .531250 .521250 .523750 .532500 .528750
NORTH AMER.Canada, dollar
.928645 .931458 .923631 .931770 .941718 .935312
Cuba, peso
.999225 .999350 .999275 .999275 .999275 .999275
Mexico, peso (silver). .281000 .280950 .281120 .281120 .281040 .281600
Newfoundland, dollar, .926500 .928500 .921862 .928250 .939125 .932750
SOUTH AMER.-1
Argentina, peso (gold)' .781175* .790141* .771241* .779937 .791552* .787677
Brazil, murals
080400* .080400* .080400* .080406* .080400* .080400
Chile, peso
.081250 .081875* .080000* .080000* .081500* .081250
Uruguay, peso
.635833 .644166* .625833 .630833* .645833* .641666
Colombia, peso
.862100 .862100* .862100 .862100* .862100* .862100
OTHERAustralia, pound
3.591666 3.592500 3.532500 3.547083 .618750 3,576666
New Zealand, pound_ 3.600416 3.600833 3.541250 3.555833 .631250 3.595000
South Africa. Bound 4 4eR2511 4450000 4.3711OIR 4 404375 .47/1751) 4 44R19.5
• Nominal rates: firm rates not available.
HE following table indicates the amount of gold
T
bullion in the principal European banks as of
Aug. 3
1933, together with comparisons as of the
corresponding dates in the previous four years:
Financial Chronicle
922
Banks of—
1933.
£
191,521,188
655,808,860
11,365,650
90,386,000
73,184,000
63,615,000
76,757,000
61,461,000
12,636,000
7,397,000
6,569,000
1932.
1931.
1930.
f
134,827,755
467,259,916
64,082,300
91,003,000
58,057,000
49,002,000
42,649,000
30,504,000
13,214,000
9,546,000
8,131,000
£
153,594,839
368,488,469
124,956,100
98,891,000
56,323,000
32,555,000
34,347,000
23,780,000
13,482,000
9,567,000
8,142,000
Total week 1,250,700,698 1,258,592,145
968,275,971
924,126,408
Pre, week 1 244 Q74 882 1 2.811 482 082
083 308 082
91.8.020.266
England___
France a__
Germany b
Spain
Italy
Neth'Iands_
Nat. Belg.
Switeland_
Sweden
Denmark
Norway
f
139,399,674
657,340,121
35,957,350
90,237,000
61,256,000
84,206,000
74,244,000
89,156,000
11,445,000
7,440,000
7,911,000
,
1929.
.
E
141,431,583
304,877,154
100.271,550
102,533,000
55,792,000
37,451,000
28,925,000
19,873,000
12,978,000
9,588,000
8,154,000
821,874,287
816.194.353
a These are the gold ho dings of the Bank of France as reported in the new form
of statement. g Gold holdings of the Bank of Germany are exclusive of gold held
abroad, the amount of which the present year is £882,350.
Foreign Problems of the Roosevelt
Administration.
Now that most of the leading American diplomatic posts have been quietly filled by new appointments, it is timely to examine the procedure which
the Roosevelt Administration seems likely to follow
in its diplomatic dealings, and the problems with
which it is at the moment chiefly concerned. With
the exception of the transfer of a few career diplomats from one country to another, most of the appointments have been bestowed upon men wholly or
virtually without diplomatic training or experience.
To a considerable extent the appointees have been
persons unknown to the country at large, and in
only one or two instances have the selections, when
announced, attracted particular attention or aroused
general comment. Most of the new appointees,
naturally, have been Democrats or recognized supporters of the Administration, although it does not
appear that the diplomatic service has been used
with special regard to rewarding conspicuous party
loyalty. The notoriously inadequate salaries attached to most foreign posts have doubtless limited
the President's choice in some eases, and geographical considerations, of course, have had to be taken
into the account. On the other hand, since all new
appointees customarily spend several weeks at
Washington in order to familiarize themselves with
the duties of their positions, and the embassy and
legation staffs are in the main permanent, it is only
fair to assume that the diplomatic service, although
in process of more or less complete reconstitution in
its higher personnel, will prove to be as adequate as
it has commonly been.
If one may judge from the character of Mr. Roosevelt's appointments, there is no reason to expect
any change in the policy which for some years has
taken important diplomatic negotiations very largely out of the hands of ambassadors and ministers
and centered them at Washington. The days when
a foreign representative was not only charged with
the conduct of important international business,
but was also given much discretion about what
should be said or done, passed with the establishment of communication by cable and telegraph, and
the end of the old era was sealed by the spread of
the wireless and the transatlantic telephone. Mr.
Roosevelt, for example, invited foreign representatives to come to Washington to discuss the preparations for the World Economic Conference, and the
American delegates were in constant touch with
Washington or with the President on shipboard
while the Conference was in session. It was announced some time ago that as soon as the London
Conference was over the question of the war debts
would be taken up, with the cases of the debtor
countries presented at Washington by delegates appointed for that purpose. Mr. Roosevelt, much more
Aug. 5 1933
than Mr. Hoover, seems likely to be essentially his
own Secretary of State as far as policies are concerned, the Department of State acting mainly as
an executive organization in formulating notes, conducting interviews on minor matters, and holding
communications with foreign *Governments, the activities of American diplomats, meantime, being restricted by precise instructions, and with most important matters, perhaps, taken out of their hands
entirely.
Fortunately for the United States, the country is
not at the moment disturbed b'y an acute diplomatic
controversy with any nation. What the rumblings
of discontent and rumors of impending war in
Europe and Asia may produce in the near future no
one can foretell, but as yet no situation has developed which points clearly to a serious international rupture on a large scale or a dangerous national catastrophe. A considerable number of
lesser questions, however, some of them hang-overs
from previous Administratioas and others of more
recent development, are now before Mr. Roosevelt
for attention or may at any time become of special
importance.
The disaffection which has flared out intermittently in Cuba ever since the re-election of General
Gerardo Machado as President, in 1928, and which
for some months past has been characterized by riots
and mob violence, occasional open fighting between
revolutionary forces and Government troops, strikes
in Havana and elsewhere, and violent demonstrations by university students, has apparently been
viewed with indifference by the American Government notwithstanding the demoralizing effects of
the outbreaks upon the agriculture and trade of the
island. The exact truth about the situation is
difficult to learn in view of contradictory partisan
statements, but there seems no reason to doubt that
President Machado is not only widely unpopular,
but that his rule has been for some time that of an
arbitrary dictator. Under the Platt Amendment of
March 2 1901, shortly incorporated in the Cuban
Constitution, the United States is guaranteed a right
of intervention "to maintain a Government capable
of protecting life, property and individual liberty,"
but there has been as yet no indication that intervention was contemplated notwithstanding that
violence appears to have increased rather than
diminished.
With the appointment of Sumner Welles by Mr.
Roosevelt as American Ambassador,evidences shortly appeared that the United States was using its
good offices to bring about peace. On July 26 President Machado issued a decree restoring the constitutional guarantees that had been suspended, and at
the same time signed a bill granting amnesty to all
political prisoners. Some confusion was created by
President Machado's statement that Mr. Welles was
"acting entirely on his own" in attempting to
mediate the Cuban difficulties, and that "if it were
not thus either he wouldn't be doing it or I wouldn't
be President of the Republic." On July 28, however, Acting Secretary of State Phillips stated that
while Mr. Welles's tender of good offices "has been
made spontaneously . . . it could not have been
made without the full authorization and approval of
this Government." The immediate fruit of Mr.
Welles's action has been a flood of protests that military government was continuing notwithstanding
the formal restoration of constitutional rights, fur.
Volume 137
Financial Chronicle
ther serious outbreaks at Havana on Tuesday, and
the possibility of a general strike. The Washington
correspondent of the New York "Times" wrote on
Thursday that the State Department "regards the
Cuban situation as the most delicate problem on its
hands."
No apparent efforts have been made by the American Government to bring an end to the war between
Bolivia and Paraguay which has been going on, with
heavy loss of life, for more than a year. No objection, however, has been made to the interposition of
the League of Nations, but the attempt at mediation.
for which a League commission had been appointed,
was frustrated late in July by the withdrawal by
the two belligerents of what had been understood as
their assent to the League action, and the countersuggestion of mediation by Argentina, Brazil, Chile
and Peru. New York "Times" dispatches from
Buenos Aires on July 27 and 30 represented the situation as greatly confused, with contradictory statements issuing from spokesmen for the four Powers,
and evidences of reluctance on the part of the four
to co-operate either with or without the assistance
of the League. On Thursday it was reported that
Chile and Argentina were unwilling to act under
any mandate from the League. It is an interesting
commentatory on the change in public opinion that
there has been no jingo demand for American intervention to stop the war, and no appeal to the Monroe
Doctrine to prevent the League from acting as a
mediator if its good offices would be accepted.
The most serious diplomatic issues that call for
consideration at Washington appear to be those relating to Japan and international relations in the
Pacific. The Roosevelt Administration has apparently been disposed to allow the Stimson doctrine
of non-recognition of territorial or political changes
accomplished by force to rest in abeyance, pending
some specific occasion for reverting to it. In the
meantime Japan has continued its development of
Manchukuo, and was reported on July 27 to be pushing the construction of a railway which would enable it, in case of war with Russia, to cut the TransSiberian Railway at Blagoveshchensk, on the Amur
River, and debar Russia from access to the port of
Vladivostok. Warlike operations, as yet of a minor
character, have been resumed in or near the demilitarized zone between Manchukuo and northern
China, while reports of renewed dissensions between
Nanking and Canton serve as reminders that political unity in China is still far from a reality, and that
what passes for national politics is largely a matter
of the rivalries and ambitions of provinces and war
lords.
The immediate challenge to American interests,
however, is found in the prospect of keen naval
rivalry. On July 9 a special correspondent of the
New York "Herald Tribune," writing from Shanghai, reported that the Japanese naval manoeuvres
near the Caroline and other Japanese mandated
islands were arousing wide interest. "One of the
largest aggregations of war vessels ever assembled
under the Japanese flag," it was said,"is participating in the manoeuvres, which will continue until
late in August." On Tuesday "the largest naval
estimates in Japan's history," according to the Associated Press, were presented to the Finance Ministry for inclusion in the 1934-35 budget. The estimates include 180,000,000 yen (currently $50,400,000) for new construction, and 75,000,000 yen
923
($21,000,000) for modernizing capital ships, while
the total for the fiscal year aggregates 680,000,000
yen ($190,400,000), this total "exceeding by 30% the
largest previous estimates, those of 1921-22 prior to
the Washington Conference, when Japan strained
her resources to compete with the United States and
Great Britain in the capital ships race." These enlarged estimates, it is generally understood, are in
response to the new American naval program which
proposes to build up to the limits set by the London
Naval Conference, and are undoubtedly to be viewed
as evidence of a purpose on the part of Japan to
have a navy of treaty-limit size by 1935, when the
London naval treaty comes up for revision. If, in
addition, Japan, as the dominant Power in Eastern
Asia, demands in 1935, as it has been intimated that
it will, naval equality with the United States and
Great Britain, the whole question of the balance of
naval power in the Pacific will have been raised.
With the exception of the war debts, American
diplomacy in Europe presents at the moment no
more serious problems than those occasioned by the
indiscretions of a few American citizens in Majorca,
now, apparently, in the way of satisfactory settlement through the discreet intervention of Ambassador Bowers, or the comparatively few instances
of harsh treatment of Americans in Nazi Germany.
The announcement on Wednesday that Professor
Raymond Moley, to whom the war debts negotiations were reported to have been intrusted, had been
detached temporarily from the Department of State
to conduct a crime-prevention survey for the Department of Justice, may mean that the debt negotiations are to be postponed. On the other hand, the
statement of the London "Daily Express," on Tuesday, that Mr. Roosevelt intended to put off revision
until 1934, pending the completion of the national
recovery plan and stabilization of domestic'prices,
but that in the meantime he would "demand another
debt instalment in December considerably larger
than that paid in June," seems a mixed prophecy to
be taken with many grains of salt. With the hands
of the Administration more than full with the inauguration of its domestic program, Mr. Roosevelt
may well be grateful that his diplomatic difficulties
are not acute, that there is no necessity whatever for
considering at this time a revision of the debt agreements, and that the question of naval strength in
the Pacific and American interests in the Far East
generally, while one to be carefully watched, need
not be pressed until the policy of Japan and the
course of events in China have become clearer.
Versatility Valuable Aid During Periods
of Depression.
In industry man has become too much merely a
part of a machine. Before generations of inventive
genius gave to the world machinery of such marvelous perfection, not only of speed but of accuracy,
production depended either upon man power, horse
power or water power. The dam to form a mill
pond, the forebay to feed and control the pent up
power and the water wheel turned by the flow of
water through the forebay were ancient and simple
devices to make use of a natural force so as to relieve man from the drudgery of toil.
One thing more was needed to perfect this instrumentality and that was transmission of power
so that it might be applied a short distance from
the seat of generation. This link was afforded by
924
Financial Chronicle
the use of belts connecting the water wheel with
other wheels and later, when metals came more frequently into use, cogwheels and revolving shafts
were brought into use to widen the scope of the
generating apparatus.
Then came rapid developments following the discovery and practical application of the expansive
power of steam, leading to the use of coal to generate steam, the new method being far more reliable
than the use of water from streams which would
become scarce during droughts and in too great
supply and at times very destructive on account of
floods and freshets.
But to electricity and such men as Edison who
developed its use man owes a great debt in the
process of liberation from exhausting toil and
drudgery.
Unlimited sources of power, coupled with a constantly broadening field for its use brought mankind to a point where a tremendous increase in
production capacity exceeded human needs and then
came the break in the links of the chain from production not only of electric power made more plentifully and cheaply by water generation but at a low
price to consumers considering costs of generation,
transmission, and customary overhead charges for
use of invested capital, taxes, upkeep and efficient
management.
The effect of such mighty progress during little
more than a century has been to sharpen men's wits
in one direction and to dull them in another.
Reward for practical discoveries and inventions
is so great, because they may be utilized by invested
capital to earn large returns, that research work of
scientists and specialists is heightened to the Nth
degree.
On the other hand the worker who labors with
his hands is required to use his intellect less than
when labor was deprived of modern facilities. Mass
production in greater or less degree is the aim of
almost every manufacturing company and to this
end the best and most modern machinery is used to
equip factories.
When a manufacturer puts such wonderful implements at the service of an employee the employer
practically says to the worker: "I have given you
the best tools available for your occupation;go to it."
It occurs that many operators are paid by piece
work; that is their compensation is based upon
quantity of production and under such circumstances large production adds to the contents of the
pay envelope of the employee and to the return to
the proprietors upon their investment in costly machinery.
The operator applies himself to production of a
large quantity in order to swell his earnings and
the almost undivided attention which he gives to
the expert operation of his machine in order to make
a big output narrows his sphere of usefulness. He
enhances his earning ability in one direction alone,
neglecting all others.
Thus it occurs that when a period of intensive
production establishes a new peak there inevitably
follows a crash and a business slump such as has
been experienced during the past few years.
When such an operator as is referred to above,
and there are millions of them, finds his place of
employment closed he realizes that he has been
sacrificing broadness of ability to narrow specialization to obtain rapidity of operation of a single ma-
Aug. 5 1933
chine. It suddenly dawns upon him that deprived
of his accustomed machine he is helpless, for he
knows no other occupation.
He has no broad knowledge of mechanics such
as the old-fashioned apprentice used to acquire in
thoroughly learning a trade, and during depression
he finds himself lined up with the unemployed,
possibly dependent upon appropriations of public
funds for sustenance of himself and family.
Capital can far more easily readjust itself. A
corporation having millions of dollars of capital
and still other millions of borrowed money represented by bonds has not only stockholders but investors interested in its welfare and anxious to put
it back upon its feet if it may be temporarily in
financial trouble. It also at times occurs that in
lean years when dividends are not forthcoming
market values of shares decline and many of them
pass to new owners at bargain prices, so low possibly that new owners will willingly subscribe for
new stock in order to put the corporation once more
upon its feet that it may make a new start when
conditions improve.
Or a corporation needing financial help may
create a bond issue giving stockholders a right to
subscribe on advantageous terms. There are numerous ways in which a corporation may gain new and
prolonged life. A well managed corporation is resourceful while an employee may not be so fortunate,
all of which should constitute the strongest kind of
inducement for an employee to break through his
narrow shell, broaden his knowledge and his sphere
for work so that when calamity again befalls he may
be resourceful enough to take care of himself and
dependents in a moderate way until the storm
abates as all storms do.
There is another class of workers who are more
independent, because the machine which they are
permitted to operate is located in the cranium.
Brains are an implement of the professional man.
The scope and height to which the machinery in the
human head may be educated depend largely upon
the vision and will power of the individual. A professional man is usually so versatile that he may
apply himself to cultivation of a new field if for
any reason he may be unable to till the older one.
Sometimes the professional man has a hobby or an
accomplishment,such as music, which may be turned
to good account in time of stress. If the present
Secretary of the Treasury, for instance, should lose
his fortune he would still be sufficiently resourceful to earn a good livelihood.
Probably the depression from which this country
is now emerging has been the means of putting many
intelligent men in a way not only to enhance their
incomes but to do so in a way which will make of
the work a pleasure and will also add to their self
respect and independence because of their demonstrated self reliance. The most sorrowful subject
one meets nowadays is the man who has lost all
hope and is indifferent about helping himself.
Chicago "Daily News" Calls Blanket Code a
Failure --Urges Each Industry to Adopt Own
Reform.
The following editorial was published in the
Chicagol"DailyiNews" of Aug. 1:
Despite the fact that the Chicago "Daily News" advocated the re-election of President Hoover throughout the
recent campaign, from:the moment Franklin Delano Roosevelt entered the White House this newspaper has supported
Volume 137
Financial Chronicle
him in all of his efforts to bring about the restoration of
prosperity. It felt that this course was dictated by the most
obvious patriotism which should always take precedence,
particularly in a time of emergency, over partisan or personal considerations. Its course since the 4th of March
warrants frankness in dealing with the present economic
situation which touches so intimately and vitally the lives of
120,000,000 people.
We tried to make people temperate by Government enactment and prohibition ignominiously failed. We cannot
make people prosperous by Government enactment. If we
rely wholly for our prosperity upon political action our
efforts will fail just as prohibition failed. All that the
Government can or properly should do is to create conditions under which confidence can be restored and private
initiative and enterprise given a chance to function. If we
rely upon the Government for more than this we are certain
to be disappointed. In achieving a business recovery
nothing can take the place of economy and efficiency in
business management, confidence and faith in the future
of the country and the functioning of private individuals
along the lines of sanity and well-established economic
principles in their own businesses or professions.
It has already become alarmingly evident that the attempt by means of a blanket code to run all businesses into
a single mold is a failure. Exceptions, exemptions and qualifications of the code have already multiplied in confusing
fashion. Resort to the blanket code is understandable because of the keen and commendable desire of the Administration to get the maximum number of people back to work
in the minimum of time, but as in the case of the prohibition
code, this ignores human nature and is blind to the facts of
the situation. We believe that the adoption of individual
codes for separate businesses by means of which such crying
evils as child labor, sweat shop conditions and cut-throat
competition can be eliminated through trade agreements, is
feasible. To attempt to hasten this desirable result by a
universal code applicable to all business is to attempt the
impossible.
It is much better to make haste slowly in this as in most
economic matters. Elimination of child labor, the exorcising
of the sweat shop evil, the shortening of the work week and
the establishment of a minimum living wage are all subjects
of social concern in the accomplishment of which Government may lend aid and encouragement. But it is much better to achieve these reforms within each separate industry
and business by an acceptable code adaptable to the business
concerned than to try the impossible, the production of a
code which will achieve all of these reforms in all businesses
overnight.
It is imperatively required of the leaders in every separate industry in the present crisis that while supporting the
President in his commendable desire to restore prosperous
conditions they shall not be carried off their feet by unwise
and unsound proposals which disclose upon the slightest
study their impracticability. We cannot go far nor hold our
gains if we close our eyes to every rule of sound business
management and ignore the effects of unwise procedur
e
upon the costs of living. Ultimately balance must be
achieved between production and consumption costs. We
must think of both sides of our economic problem.
Deal Presupposes U. S. Can Insulate Perfectly Against World Interference—Hasn't
BeeniDone Before.
New
(Thomas F. Woodlock in "Wall Street Journal" for July 24
1933.)
The nature and the magnitude of the wager to which the
"New Deal" has apparently committed us is becoming apparent only by degrees. So rapidly have events—and statements—followed each other that it has been extremely difficult to see the whole in perspective, and appraise its implications. That its nature is essentially "autarchic" now admits
of little doubt.
The United States has virtually served notice on the nations that it intends to take its own course,"manage" its own
currency, make its own prices and, generally, "control" its
own economy regardless of what the others may elect
to do.
If the others arrange their affairs in accordance with our
views so much the better, but if not, no matter. We propose
to "go it alone" and we think we can do it—or some
of us do.
This means that we believe we can so insulate
ourselves
from the rest of the world as to maintain our living
standard,
which is the highest in the world. So far as our
internal arrangements are concerned we believe that we can
so regulate
925
and control our industry and commerce as to pay good wages
to labor while not burdening the consumer, and ease the
debtor's burden by raising prices of "things" without permitting inordinate profits to capital. So we believe—or some
of us do.
This means, of course, a high degree of "insulation." We
cannot permit foreign-made goods to threaten our wage
scale. So much is clear. We need certain things we cannot
produce ourselves and those we shall import; we produce
some materials that other countries need and those we shall
export. But there can be little import or export of manufactured articles on a competitive basis, for that brings living standards into direct competition and that is inadmissible.
"World trade" in such things can have no place in our
economy.
Autarchy means tariffs ever higher and higher—"trade
barriers" will have to be impassable where "labor" bulks
perceptibly in product unit cost. No half-way measures will
do. The bulkheads must have no leaks.
Can we hold our living standards by these means against
the other nations? That is the ultimate question—or one of
the ultimate questions. Another is—what about the socalled "neutral" markets? The "Far East" for instance or,
to come nearer home, South America? Can we compete in
these as an "autarchic" entity?
Other nations have the same access to "science," organization, technique and machines as we have. Japan is giving
us an impressive demonstration of that fact at this very
moment. There is still "free trade" in ideas, imagination
and invention, and the tendency of "neutral" markets is to
become anything but neutral, and that with astonishing
rapidity. Even China with all her troubles shows how
quickly she can learn the game. Are we going to assert claim
to economic "spheres of influence" for our own exclusion or
preferred cultivation? Is there to be an economic "Monroe
Doctrine"?
If these seem to be far-fetched apprehensions, it is only
because the logic of events does not often lie upon the surface.
These questions are implicit in our "New Deal." The wager
that we are apparently making in that "deal" is that the
answers to them will be favorable—that is, that we can insulate ourselves so as to preserve our living standards both
from attack outside and from deterioration at home. We
believe we can—or some of us do, and all of us are committed to the wager, whether we believe in it or not.
Whether we can do these things or whether we cannot is
something that only actual trial can finally settle. It cannot be said, however, that history holds out a very glittering
prospect for permanent success. To suppose that in a world
of which all parts are in direct touch with each other to such
an extent that neither space nor time count for much
hindrance in the movement of men, things or thoughts, one
part can insulate itself from the rest so as to enjoy undisturbed a level of material comforts far superior to the
levels all around it is to make an act of faith for which experience at least furnishes no supporting reason. Where in
history can we find record of a people who had grown fat
and yet could "keep their castle" against the lean, hard and
hungry enemy? Has war been banished from the earth?
We have a "New Deal" and we have in some respects a
really "new era," but there are some things which remain
true and are always "new" because they are as "old" as man
himself, and these are the things that raise these questions
.
Outlook for National Business and Basic Industries, According to "Silberling Reports."
Writing under date of July 22, the "Silberling Reports,
"
Issued at San Francisco, summarized the situation in
the following interesting fashion:
Having now enjoyed the first taste of inflation stimulus.
the country is now faced with the great problem of
all inflations: How can the momentum generated by artificial
means be continued? And this is indeed a serious
problem.
since the machinery for actual (as distinct from
promised
or implied) inflation has not been definitely set
in motion,
although it is available for use.
Speaking quite frankly, we believe that the methods
now
being mainly relied upon to build up general
buying power
will not be successful within a short space of
time without
financial assistance from outside the business
system. The
formulation of industrial codes is not the work of
a few days,
or even weeks, and while industries are
endeavoring to cooperate with the Federal Administration in
an admirable
spirit, the physical complexities and difficulti
es make it un-
Financial Chronicle
926
reasonable to expect the instantaneous results which now
appear to be demanded. In this particular drive we are
attempting to speed up enormously the circulation of a fund
of money and credit the volume of which available for active
use has been cut down materially. It has been cut down
because of debt and because reinvestment is not following
close upon the discharge of long-term obligations; because
some banks are still closed; and because lingering disparities
in the price system are preventing the distribution of goods
from operating smoothly or continuously. We are in a situation in which it is not so mucra a problem of arbitrarily boosting wage rates but of providing new demands for basic products and thereby increasing the vainne of work and the total
volume of labor income. There is too much emphasis upon
wage rates, while the volume of employment, which cannot
be dictated by laws, is considered merely a phase of price
manipulation.
In another respect the program now under way will almost
certainly fall wide of the mark,and this is the "public works"
campaign. Apart from the fact that many of these projects
are wasteful forms of social capital, creating no new demands for labor after they are completed, there is the consideration that the plans move slowly and, even if they did
not, the volume of employment directly and indirectly provided is relatively small. It the same sums were to be expended by the Government to aid exports to countries needing our machinery and raw materials the situation of employment would be rapid and essentially sound in principle,
even though the money never came back. It is the omission
of these obvious and natural dhannels of business stimulation
whidh is most unfortunate at the present juncture.
It is our belief that in the absence of some such release of
our goods to foreign markets through provision of public
credit it will be necessary in the very near future to make
grants to our industries, or doles to their labor, to supplement wage income. Otherwise the inflation boom threatens
to collapse for lack of a healthy circulation. This is due to
the raising of prices to get one group out of debt while another equally important group is immediately thrown into
debt and new poverty by the very same higher prices. Open
trade channels and you create prosperity; tinker with currency as a means of promoting prosperity and you create
chaos. It is remarkable that our leaders cannot understand
the clear lessons of history.
BOOK NOTICES.
EMPLOYEE STOCK OWNERSHIP AND THE DEPRESSION—STUDY
BY INDUSTRIAL RELATIONS SECTION OF PRINCETON UNIVERSITY FINDS THAT RESULTS, IN GENERAL, WERE DISTINCTLY UNFAVORABLE.
One of the few comprehensive studies of employee stockownership plans and their results during the course of the
present depression has recently been published by the Industrial Relations Section of Princeton University, under the
title of "Employee Stock Ownership and the Depression."
The survey was prepared by Eleanor Davis, assistant
director, and is based on a detailed investigation of stockownerShip projects sponsored by fifty companies.
The names of the companies included in the list are not
given, although many can be easily identified by significant
details. The forword to the survey states, however, that the
companies chosen are believed to provide a fair cross-section
of those active in the movement. The conclusions reached—
which are what will be considered of chief importance by
most readers—are that few of the stock-ownership plans
have been successful, and that "both employers and employees have lost more from the movement as a whole than
has been gained in improved morale and dollars saved."
A group of 17 common stocks used in the analysis showed
an average drop in market quotations of almost 80% from
July 1926, to the end of 1932. For 18 preferred issues the
decline was, as might have been expected, less severe, but
even in this classification the average price change over the
period mentioned was almost 60%. Since most of these stocks
were purcroased by employees at only a few points under
market levels, the possibilities for loss are obvious, the report points out.
A summary of the conclusions arrived at, after a thorough
study of the several plans and their results. and after receiving confidential reports from executives of many of the companies surveyed. Includes the following:
1. Purchase of stock in their employing companies represents a questionable form of investment for lower-paid groups of wage earners, unless under
exceptionally favorable circumstances. Because of small incomes and lack
Aug. 5 1933
of reserves it is difficult for them to invest on a long-term basis, and investment in industrial stocks cannot always be liquidated at once to advantage.
What this group needs, in the words of the report, "is not a chance at a
speculative gain, but security of principal."
2. For many employees, buying company stock means "putting all their
eggs in one basket," and consequently involves too high a degree of risk.
3. "Employee losses through company-sponsored plans may prove to be
a boomerang, as far as industrial relations are concerned. Increased morale
and loyalty cannot be brought about if the plan is responsible for losses to
any considerable number or to any great degree. What was meant to be a
help to employment relations may then become a setback."
4. Various features have been devised to protect employees under these
plans and to act as a safeguard. These include the use of preferred stocks
or bonds rather than common stock, particularly favorable selling prices to
employees, privilege of cancellation of the subscription with return of payments, and a company guarantee of repurchase at the price originally paid.
Almost all of these so-called safeguards have very definite drawbacks, the
survey reveals. Some offer protection only for a limited period, while in
others the protective features are effective only in the event of moderate
price declines.
5. Only two of the many special features were stressed as adequate protective measures, or "adequate under most circumstances." The first was
the company guarantee to repurchase at the price paid. The second was a
company contribution toward the purchase price of the stock, and in order
to provide a wide margin of safety this should be from 25% to 88 1/8% of
the cost of the stock.
Final comments contained in the study are particularly
pertinent. They read as follows:
"One danger is that eligible employees will, out of loyalty or enthusiasm,
load up too heavily with subscriptions to company stock. This is especially
the case with younger executives. A second danger is that, in times of a
slackened sense of responsibility and with the protection of lack of publicity
of the details of the plan, executives in a position to do so may arrange too
favorable terms for themselves. Neither of these dangers is issential, or
spoils the plan as a medium for honest and profitable investment for those
in a position to take risks, or as an incentive to greater interest in the company's welfare on the part of those best able to advance it.
"Perhaps there is no form of personnel activity by means of which the
company can perform a greater service for its employees than through sound
advice on their financial problems. Encouragement to build savings accumulations wherever possible and help in their wise investment are needed
by all classes of employees. They will be needed particularly in the next
few years, whether we reach anything resembling pre-depression prosperity
or gain ground only slowly. To provide such encouragement and advice is
both a responsibility and a challenge to management."
It is difficult to resist quoting from a few of the comments
received from employers who communicated their experience
with stock-ownership plans and the outlook for similar
projects in the future. Several extracts from such letters
follow:
"We believe that managements in the main will confine their offerings of
common stocks to those (employees) in the higher earnings classification.
Separate agencies will be provided wherein wage earners will have an opportunity to place their savings with a greater degree of safety and more
assurance of a regular income."
"If this depression brings about any fundamental changes-in stock plans,
these are more likely to restrict the individual's opportunities of participation rather than to enlarge them."
"If we ever adopt another such plan, it will be much more limited as to
the employees to be included thereunder. My own personal recommendation
is against a common stock purchase plan for rank and file employees insofar
as we now understand It."
"It is my personal belief that we are 'washed up' for a number of years
on common stock plans for the rank and file of our employees."
AVERAGE RATES OF DUTY ON IMPORTS INTO THE UNITED STATES
FROM THE PRINCIPAL COUNTRIES, 1931—REP0RT BY U. S.
TARIFF COMMISSION.
The U. S. Tariff Commission announces the publication of
a statistical report entitled "Computed Duties and Equivalent
Ad Valorem Rates on Imports Into the United States from
Principal Countries, 1931." The purpose of the report is to
show how the American tariff affects the imports from each
leading country. It covers each country from which the
imports in 1931 amounted to $10,000.000 or more in value.
and in addition New Zealand, Egypt, and the Union of South
Africa. The number of countries included is 34 and the imports from them represent about 93% of the total from all
countries. An announcement issued by the Commission, with
regard to the report continued:
The report contains two summary tables for each of the 34 countries. The
first of these tables is a comparison of the data for 1931 with those for
1929 presented in a previous report of the Commission. It shows, for 11
commodity groups, the total value of free and dutiable Imports, the percentage dutiable, and the average rate of duty on free and dutiable articles
combined, and also the average rate computed on dutiable articles only.
The second table shows, for the same commodity groups, the total value of
dutiable imports in 1931, the computed total amount of duties on them, and
the average rate of duty. This second summary table is followed by detailed tables which show statistics not only for the 11 major commodity
groups, but for numerous subgroups and for the most important individual
articles of importation ; these detailed tables relate to both free and dutiable articles. The report is divided into four parts: Part I relating to
Northwestern Europe, Part II to Central, Eastern, and Southern Europe,
Part III to North and South America, and Part IV to Asia, Oceania, and
Africa. A limited number of these mimeographed reports are available for
distribution. There is in preparation a printed report containing the summary tables.
The introduction to th report also contains summary tables in
which
the data for the principal individual countries are brought together for
Financial Chronicle
Volume 137
927
The lowest grade speculative issues lost from one to two
points, Chicago Milwaukee St. Paul & Pacific 5s, 2,000,
declining from 26% to 24,Chicago & North Western 4s,
1949,from 37% to 36% and New York Chicago & St. Louis
6s, 1935, from 613/ to 57.
On the whole, the industrial bond list moved in a narrow
range, with a slightly reactionary tendency. Non-payment
of interest on Aug. 1 on its bonds and subsequent receivership action brought wide breaks in Colorado Fuel & Iron:5s,
1943, and Colorado Industrial 5s of 1934, which dropped
The Course of the Bond Market.
Movements in the bond market have been narrow the more than 20 points each. High grade steel issues have been
present week, with a slightly sagging tendency toward the firm to fractionally lower, second line issues, like Vanadium
week-end. The most important news in the bond market 5s, 1941, off 2% points to 71, being weaker. Oils have been
was the new Treasury financing which took the form of 8-year firm and rubbers have done little. Old Ben Coal 6s, 1944,
bonds and 2-year notes. The yield offered was fairly liberal, paid no Aug. 1 interest and lost 5 points to 20, though this
3Yt% in the case of the bonds and 1%% in the case of the development was less unexpected than that in Colorado Fuel
notes, and both issues were heavily over-subscribed. Over & Iron.
High grade utilities in the past week have been well maina billion dollars in new Government securities was expected
and steady. Considerable irregularity has taken
tained
to be issued. Federal Reserve purchases of Government
second grade, speculative issues, with prices shifting
place
in
bonds have again been limited to $10,000,000, although
there were rumors of possible inflationary measures to take back and forth. The question of utility rates has again
the form of larger bond purchases by the Reserve banks. become the focus of attention and the NRA has proposed to
put utilities under the blanket code.
Government bonds have been very slightly weaker. Money
Foreign bonds have been lower on the average, although
rates have remained easy.
the movement has been mixed. In the higher grade section
High grade railroad bonds have again been firm, changes of the list the French 73's, 1941, rose to 1363's on Friday
for the most part being limited to fractions. In the medium from 1323
/
1 the week before, Belgian 6s, 1955, to 96 from 95.
and second grade. classifications losses predominated, Chi- On the other hand, the Swiss 53/2s, 1946, fell to 135 from
cago Milwaukee St. Paul & Pacific 5s, 1975, declined from 136% the week before. Among lower grades, the Finland
53's, 1958, fell from 75 to 733/s, Italy 7s, 1951, from 97 to
53% to 51, New York Central 4%s, 2013, from 71 to 69
953' and Japan 53's, 1965, from 75 to 743' on Friday.
Southern Pacific 43's, 1981,from 66 to 643; Canadian PaciMoody's computed bond prices and bond yield averages
fic 4s have been an exception, advancing from 64% to 67. are given in the tables below:
comparison. The first of these tables deals with total value of imports, with
no distinction of commodity groups. It presents for 1929 and 1931 the
total value of imports from each country, the value of free imports, the
value of dutiable imports, the percentage dutiable, and the average rate of
duty on dutiable imports alone and on free and dutiable imports combined;
it also shows what percentage each of the countries supplies of the total
imports, the free imports, and the dutiable imports, respectively.
The second summary table in the introduction takes up each of the 11
major commodity groups separately and shows for it the principal statistical facts regarding the imports from each of the 34 countries. The statistics
include the total value of imports, the value of dutiable imports, the percent
dutiable and the average rate of duty computed on dutiable imports.
MOODY'S BOND PRICES..
(Based on Average Yields.)
1933
Daily
Averages.
Aug. 4
3
2
1
July 31
29
28
27
26
25
24
22
21
20
19
18
17
15
14
13
12
11
10
8
7
6
5
4
3
1
IreeklyJune 30
23
16
9
2
May 26
19
12
5
Apr. 28
21
14
13
7
1
Mar. 24
17
10
3
Feb. 24
17
10
3
an. 27
20
13
6
High 1933
Low 1933
High 1932
Low 1932
Year AgoAug. 4 1932
Two Years AgoAug. s 1931
All
120
Domes
tic.
91.67
91.81
91.53
91.67
91.53
91.67
91.67
91.39
90.97
90.83
90.83
90.97
91.96
92.39
92.39
91.96
91.81
91.67
91.25
90.69
90.55
90.55
90.55
90.41
90.00
89.59
89.45
89.17
88.90
87.96
86.77
86.64
85.87
85.10
84.10
82.74
79.68
77.11
74.67
120 Domestics by Ratings.
Aaa.
Aa.
107.67 100.00
107.67 100.00
107.67 99.68
107.49 99.68
107.49 99.68
Stock
107.14 99.52
107.14 99.52
106.96 99.68
106.78 99.36
106.78 99.20
106.78 99.20
106.96 99.36
106.96 100.00
106.96 100.00
106.96 99.52
106.78 99.52
106.78 99.44
106.96 99.04
106.78 98.73
106.42 98.25
106.60 98.09
106.42 98.09
106.25 98.09
106.25 97.62
106.07 97.31
105.89 97.16
Stock
106.07 97.16
105.89 96.85
105.72
105.54
105.20
104.16
103.82
103.99
103.32
102.30
99.36
99.68
97.78
75.61 100.00
74.46 99.84
74.77 99.52
77.88 101.64
79.11 102.30
96.54
95.33
93.85
94.43
93.99
93.26
92.25
90.55
87.30
85.35
83.35
Stock
85.87
85.10
84.48
87.83
89.17
Stock
85.48
89.31
90.83
92.68
92.53
92.39
91.81
92.25
90.69
100.00
82.99
89.72
71.38
A.
Baa.
MOODY'S BOND YIELD AVERAGES.t
(Based on Individual Closing Prices.)
120 Domestics
by Groups.
RR.
P. U. Indus.
89.17 75.19 92.25
89.31 75.29 92.25
88.90 75.29 92.10
89.04 75.40 92.10
88.77 75.40 91.96
Excha nge Clo sed.
89.17 75.71 92.25
89.04 75.52 92.25
88.90 75.29 92.10
88.63 74.46 91.67
88.23 74.25 91.53
88.23 74.25 91.53
88.23 74.67 91.96
89.17 76.35 92.82
89.31 77.44 93.26
89.31 77.66 92.97
88.63 77.33 92.68
88.63 77.11 92.53
88.23 76.67 92.39
87.69 76.35 91.96
87.43 75.50 19.53
87.17 75.19 91.39
86.91 75.50 91.11
86.77 75.61 91.11
86.91 75.40 90.97
86.12 75.19 90.55
85.61 74.57 89.59
Excha nge Clo sed.
85.74 74.05 89.31
85.61 73.65 89.04
85.23
85.35
85.23
85.35
85.35
98.41
98.41
98.09
98.09
98.09
85.48
85.48
85.23
84.85
84.60
84.47
84.72
85.99
86.64
86.77
86.38
86.12
85.87
85.48
84.97
84.85
85.10
84.97
84.72
84.35
84.47
97.94
97.78
97.62
97.16
97.06
97.16
97.16
97.7E
97.7E
97.94
97.62
97.11
97.31
97.06
96.21
96.0S
95.91
95.91
95.9:
95.6:
95.11
84.47
84.22
95.1
95.0:
73.35 88.90
72.06 87.17
70.43 85.61
70.15 86.12
68.94 85.61
68.04 84.47
66.98 83.35
65.62 81.66
62.56 78.55
58.32 74.36
55.73 71.38
nge Clo sed
54.80 71.09
53.28 70.62
53.88 71.38
57.24 73.65
58.52 74.57
nge Clo sed
54.18 69.59
57.98 73.15
60.60 75.50
62.48 77.77
61.34 76.25
62.95 76.25
63.11 75.09
64.31 75.71
61.56 71.96
77.66 93.26
53.16 69.59
67.86 78.99
37.94 47.58
83.85
83.23
82.50
81.90
81.18
80.84
80.14
79.11
75.92
74.05
72.06
94.72
94.1,
92.61
92.21
91.1
90.2'
89.3
87.61
84.81
83.3.
81.31
74.67
73.25
73.35
78.10
80.49
81.91
79.0
80.1.
82.1,
82.7.
76.35
80.60
83.85
85.99
85.99
87.56
88.23
89.17
88.23
89.31
71.96
87.69
65.71
78.4.
83.1
84.9'
86.2.
85.4'
86.3'
86.6.
87.51
86.3'
98.4
78.4.
85.6
62.01
85.35
84.60
83.60
83.48
82.87
81.78
80.72
79.34
76.67
74.46
72.16
Excha
73.95
72.65
72.85
75.82
77.33
Excha
72.06
76.25
79.45
81.54
80.49
81.18
81.07
81.90
79.34
89.31
71.87
78.55
54.43
74.67
78.77
81.30
83.23
82.38
83.11
82.99
83.85
81.66
92.39
74.15
82.62
57.57
99.04
102.98
104.51
105.89
105.37
105.54
105.03
105.54
104.85
107.67
97.47
103.99
85.61
72.06
95.18
80.60
68.58
53.94
65.71
76.89
74.2,
88.10 106.60
95.88
85.23
68.94
84.60
90.04
54• 2
All
120
1933
Daily
DomesAverages. tic.
Aug. 4__
3..
2__
1_ _
July 31..
29..
July 28__
27__
26...
25..
24_
22_ _
21._
20._
19...
18..
17._
15._
14._
13__
12__
II__
10..
8_ _
7__
6_
5_ _
4.3..
1._
Weekly
June 30...
23..
16._
9__
2..
May 26_,
19._
12._
5_
Apr. 28__
21._
11._
IL..
7._
1__
Mar.24__
17._
10_ _
3_ _
Feb. 24..
17._
10._
3._
Jan. 27.._
20__
13..
6....
Low 1933
Nigh 1933
Low 1932
High 1932
Yr AgoAug.4'32
2 Yrs.Ago
Au.r, 0'31
120 Domestics by Ratings.
Aaa.
Aa.
5.30
5.29
5.31
5.30
5.31
4.30
4.30
4.30
4.31
4.31
4.75
4.75
4.77
4.77
4.77
5.30
5.30
5.32
5.35
5.36
5.36
5.35
5.28
5.25
5.25
5.28
5.29
5.30
5.33
5.37
5.38
5.38
5.38
5.39
5.42
5.45
4.33
4.33
4.34
4.35
4.35
4.35
4.34
4.34
4.34
4.34
4.35
4.55
4.34
4.35
4.37
4.36
4.37
4.38
4.38
4.39
4.40
4.78
4.78
4.77
4.79
4.80
4.80
4.79
4.75
4.75
4.78
4.78
4.81
4.81
4.83
4.86
4.87
4.87
4.87
4.90
4.92
4.93
5.46
5.48
4.39
4.40
4.93
4.95
5.50
5.57
5.66
5.67
5.73
5.79
5.87
5.98
6.24
6.47
6.70
4.41
4.42
4.44
4.50
4.52
4.51
4.55
4.61
4.79
4.77
4.89
4.97
5.05
5.15
5.11
5.14
5.19
5.26
5.38
5.62
5.77
5.93
6.61
6.72
6.69
6.40
6.29
4.75
4.76
4.78
4.65
4.61
5.73
5.79
5.76
5.58
5.48
6.70
6.32
6.10
5.94
6 81
5.95
5.96
5.89
6.07
5.25
6.75
5.99
8.74
4.81
4.57
4.48
4.40
4 43
4.42
4.45
4.42
4.46
4.30
4.91
4.51
5.75
5.76
5.47
5.36
5.23
5 24
5.25
5.29
5.26
5.37
4.75
5.96
5.44
7.03
A.
Baa.
120 Domestics
by Groups.
RR.
40
ForP. ti. Indus. eigns.
5.26
5.43
6.65
5.78
5.77
6.64
5.26
5.47
6.64
5.27
5.50
5.78
6.63
5.27
5.49
5.77
5.28
5.77
6.63
5.51
Excha nge Clo sed.
Stock
6.60
5.26
5.48
5.76
5.26
5.49
5.76
6.59
5.27
5.50
5.78
6.64
5.81
6.72
5.30
5.52
6.74
5.31
5.55
5.83
6.74
5.31
5.55
5.84
5.28
5.82
6.70
5.55
5.22
5.72
6.54
5.44
6.44
5.19
5.47
5.67
5.66
6.42
5.21
5.47
5.23
5.69
6.45
5.52
5.24
5.71
6.47
5.54
5.25
5.73
6.51
5.55
6.54
5.28
5.59
5.76
5.31
5.61
5.80
6.62
5.32
5.81
6.65
5.63
5.34
6.62
5.65
5.79
6.61
5.34
5.66
5.80
6.63
5.35
5.65
5.82
6.65
5.38
5.71
5.85
6.71
5.45
5.75
5.84
Stock Excha nge Clo sed
5.74
6.76
5.47
5.84
5.75
6.80
5.49
5.86
4.85
4.85
4.87
4.87
4.87
9.03
9.01
9.01
9.01
8.97
4.88
4.89
4.90
4.93
4.94
4.93
4.93
4.89
4.89
4.88
4.90
4.93
4.92
4.94
4.99
5.00
5.01
5.01
5.01
5.03
5.06
8.91
8.85
8.83
8.85
8.89
8.89
8.84
8.68
8.63
8.65
8.72
8.79
8.89
9.04
9.11
9.24
9.36
9.32
9.32
9.44
9.4c
5.06
5.07
9.51
9.51
5.77
6.83
5.50
4.89
5.83
6.96
5.63
5.94
7.13
5.91
5.75
6.00
5.92
7.16
5.71
5.06
5.97
7.29
5.75
6.11
6.06
7.39
5.84
6.14
6.15
7.51
5.93
6.20
6.27
7.67
6.07
6.29
6.51
8.05
6.34
6.58
6.72
8.63
6.73
6.76
6.95
9.02
7.03
6.96
Stock Excha nge Clo sed
6.77
9.17
7.06
6.70
6.90
9.42
7.11
6.84
6.88
9.32
7.03
6.83
6.59
8.79
6.80
6.38
6.45
6.17
8.60
6.71
Stock Excha nge Clo sed
6.96
9.27
7.22
6.54
8.68
6.85
6.55
6.16
6.26
8.31
6.62
5.89
8.06
6.41
6.08
5 72
6 17
8 21
6 55
5.72
5.60
8.00
6.55
6.11
6.12
7.98
6.66
5.55
5.48
7.83
6.60
6.05
8.18
6.97
6.27
5.55
5.19
6.42
5.47
5.47
7.22
6.97
9.44
6.98
7.41
6.30
6.34
5.59
10.49
9.23 12.96
7.66
5.09
5.13
5.23
5.26
5.34
5.40
5.47
6.59
5.81
5.93
6.10
9.62
9.51
9.61
9.71
9.62
9.61
10.01
10.01
9.81
10.21
10.51
6.05
6.22
6.20
6.03
5.9S
10.823
11.01
10.81
10.713
10.7:3
6.35
5.95
5.80
5 70
5.76
5.69
5.67
5.60
5.69
4.85
6.35
5.75
8.11
11.11
11.0,
10.41
10.0.
10.21
9.81
9.8.
9.6'2
9.98
8.63
11.19
9.86
15.83
11.53
6.96
5.06
6.16
7.33
9.31
7.66
6.49
6.74
5.56
4.35
4.52
5.78
7.29
5.53
5.00
5.56
8.62
• Note.-These prices are computed from average yield on the basis of one "ideal- bond (4q% coupon, maturing In 31 years) and do not
the average level or the average movement of actual price quotations. They merely serve to illustrate in a more comprehensive way the relative purport to show either
levels and the relative
movement of yield averages, the latter being the truer picture of the bond market.
t The last complete list of bonds used In computing these Indexes was published In the "Chronicle" of Jan. 14 1933. page 222. For Moody's index of bond prices
by my nths back to 1928, refer to the "Chron'cle" of Feb. 6 1932, page 907.
Financial Chronicle
928
BOOK NOTICE.
WHOLESALE DISTRIBUTION OF BREAKFAST CEREALS IN SOUTHERN MICHIGAN. By Edgar H. Gault and Raymond F.
Smith. University of Michigan. $1.
This pamphlet, one of a series prepared by the Bureau of
Business Research of the University of Michigan, is devoted
primarily to a consideration of the marketing problems of
wholesale grocers in handling branded breakfast cereals, and
is based on the marketing of approximately 27,000,000 pounds
of such cereals by 35 wholesalers and 5 grocery chains in
Aug. 5 1933
1931. The study is of interest principally to those doing a
business in this product in Southern Michigan, particularly
in its analysis of such trade practices as premiums, price
cutting and margins of profit. Among the conclusions
reached by the authors is the belief that wholesale grocers
may secure a greater profit than at present through trade
association activities that are strengthened by the power of
Federal control. "Otherwise," the survey remarks,"the most
likely solution of the wholesaler's problem of earning a profit
is through lessening competition by increasing the size and
decreasing the number of grocery wholesalers."
Indications of Business Activity
THE STATE OF TRADE—COMMERCIAL EPITOME.
Friday Night, Aug. 4 1933.
General business continues to increase despite the recent
hot weather. Here and there there has been the usual
slackening of trade, but it is restrained to some extent.
Gains are now widespread and this makes for greater stability. The usual declines at this time of the year are
absent. Consumer buying still trails the big gains made in
wholesale commitments, and industrial production. Buying
power is increasing however, and the general belief is that it
will not be very long before it catches up, what with more
employment and higher wages. The increase in the number
of corporations reporting profits was encouraging. There
have been additional reports of wage increases. Retail
business although somewhat less than in the previous week
was still better than that of a year ago.
The recent intense heat resulted in good clearance sales
of summer goods. In some cases orders were not filled
because of the smallness of stocks. There is a general disposition among retailers to withhold repricing of merchandise
as long as their stocks purchased earlier in the year holds
out. They are now, however, nearly down to the vanishing
point and some qualities of goods have been advanced
10 to 30% and further advances are expected on Sept. 1
when the shorter week and increased wages will have become
more general. Men's and women's summer apparel and
vacation necessities have been in good demand owing to the
very hot weather of late. Sales in many instances exceeded
the peaks made in July. There was still an excellent demand
for electrical appliances and electric refrigerators. There
was a good demand for furniture.
The gains in wholesale business were maintained despite
the uncertainty of the price situation and deliveries. Wholesalers were refusing orders for delivery earlier than September.
Shoes were in better demand from wholesalers and big
buyers and prices showed an upward tendency. Jewelry
orders were larger. Rubber goods, chemical products and
woodenware sales were larger. The demand for machine
tools was better. Paper was also in better demand owing to
the activity of the printing and publishing trades and prices
were higher. Lime, cement and brick have all risen in price,
but sales are small. A substantial increase in fall orders
for men's clothing was reported. The demand for shirts
and neckwear shows some improvement with prices higher
owing to the increased production costs under the code.
Cotton textiles were in less demand owing to the higher levels
prevalent because of the new cotton processing tax. Wide
sheetings and pillow cases were advanced as a result of the
additional labor costs and processing tax.
There was also a falling off in orders for bedspreads of
both rayon and cotton while there was some evidence of a
slackening of industrial activity. Steel operations increased
slightly after two weeks of minor recessions, the rate now
being at about the same level as in 1930. Loadings of revenue
freight show an increase over the previous week ar d exceed
last year's total by 29.2%. Lumber output was the heaviest
since June 1931. Electricity output although it shows no
change from the previous week,it is larger than the comparative totals for a year ago. Mine output of bituminous coal
was 7% above that for the same week of 1931. Shoe manufacturers did a good business but they are not willing to book
orders any further ahead than for two or three months,owing
to the uncertainty of future operating costs. Prices of shoes
were higher. Leather was more active with manufacturers
good buyers in anticipation of higher prices. Steel operations
in the Pittsburgh district were maintaired at close to recent
levels, averaging about 55% of capacity. In the Chicago
district operations fell off to 56%. Commodity markets
were generally lower with the exception of rubber which
shows a net rise for the week 23 to 32 points. Wheat shows
a decline of 4% to 44
3 0. Corn and oats were a little over
3c.lower while rye shows a decline of 53 to 69'c.for the week.
Cotton was less active and shows a decline for the week of
32 to 36 points, owing to rather heavy pre-bureau liquidation. Rallying power was absent. The weather, too, has
recently been more favorable. Coffee was higher on the
Santos contract but was 3 to 4 points off on the Rio. Sugar
was down 4 to 6 points. Cocoa declined 17 points and
silk was down 7 points. Silver was off 40 to 50 points and
lard futures 30 points.
The weather over the last week-end and during the greater
part of the week has been extremely hot, with only little
relief the past day or so. Many lives were taken, crops
destroyed by the record-breaking temperatures, which
covered most of the country. In addition, further loss of
lives and damage to crops were caused by heavy rainfalls
and cloudbursts that brought relief. On Aug. 3 an Associated Press dispatch from Denver said that crumpling under
the pressure, a mountain cloudburst, added to the three
square miles of water behind its walls, Castlewood Dam
sent a billion-gallon deluge roaring through Denver, leaving
two dead and damage estimated at $1,000,000 in its 35-mile
path of destruction. Many reports from all parts of the
country told of destruction and damage to crops caused by
the weather conditions.
Canada fared little, if any, better than the United States.
While the outlook in Alberta is slightly improved by recent
rains, heat and continued drouth have caused further
deterioration in Saskatchewan and Manitoba, where crops
are maturing too rapidly. Fair to good yields are indicated
in northern areas of Alberta and Manitoba and in northeastern Saskatchewan. Other areas generally are poor,
with total failure and feed shortage indicated in many districts. Ravage by grasshoppers continues over southern
areas. In Ontario the continued drouth is taking a serious
toll of crops. In northern sections and provinces rain is
needed.
To-day it was 65 to 74 degrees here and clear. The forecast was for fair and continued cool weather. Overnight at
Boston it was 56 to 76 degrees; Baltimore, 71 to 92; Pittsburgh, 62 to 86; Portland, Me., 58 to 74; Chicago, 62 to 86;
Cincinnati, 62 to 88; Cleveland, 62 to 80: Detroit, 56 to 68;
Charleston, 78 to 88; Milwaukee, 58 to 70; Dallas, 76 to 94;
Savannah, 74 to 88; Kansas City, 64 to 68; Springfield, Mo.,
64 to 78; St. Louis,62 to 76; Oklahoma City,70 to 88; Denver,
60 to 80; Salt Lake City, 68 to 90; Los Angeles, 58 to 74;
San Francisco, 54 to 66; Seattle, 58 to 72; Montreal, 54 to
66; Calgary, 52 to 78; and Winnipeg, 48 to 92.
Guaranty Trust Co. Finds Business Trend Distinctly
Upward—While Natural Recuperative Forces Are
in Operation, Belief Exists That Recovery Has
Been Accelerated by Speculative Tendencies Growing Out of Government's Economic Policies—
Sound and Unsound Elements.
Swift expansion in 'business activity has continued in recent weeks, together with further advances in commodity and
security prices, states the Guaranty Trust Co. of New York in
the current issue of "The Guaranty Survey," its monthly review of business and financial conditions in the United
States and abroad, published July 31. It is pointed out, however that a sharp setback "was experienced in speculative
markets during the third week of July. The recession," says
Volume 137
the 'Survey," "was greeted with relief by certain 'public
authorities who had become somewhat alarmed at the
rapidity of the speculative advance. But nothing has yet
occurred to alter the view that the general business trend is
distinctly upward, while the Government continues to press
forward vigorously in its recovery campaign." The "Survey"
continues:
Further Business Expencion.
The upward movement apparently covers almost every important field of
American business. The steel industry, always a sensitive indicator of the
general trend, has expanded its operations rapidly and continuously since
last March, with only a slight seasonal recession in recent weeks. The automobile industry is producing and selling many more cars than it was at this
time last year. Coal output has felt the stimulating influence of the general
advance. Railway freight loadings have regularly surpassed the 1932 totals
since last May. Electric power production has risen sharply since the middle
of March and, with adjustment for seasonal variation, is now at the highest
level since the early part of 1931. Factory employment and foreign trade
continued to increase last month.
As for the advance in commodity prices, the relative unimportance of the
recession in speculative markets in the third week of July is indicated by
the wholesale price index of the Department of Labor, which, for the week
ended July 22, shows an increase in every price group, including farm
products.
Superficially, at least, the revival has many of the aspects of a true
economic recovery. It has included most of the country's leading industries;
it has apparently come about in response to a genuine improvement in business sentiment and a sharp increase in demand, and it has resulted in an
advance in purchasing power released through wage payments. It is evident
that substantial increases in employment and numerous advances in wage
rates have been made possible by the expansion in industrial operations, and
that these, in turn, have broadened the market for consumers' goods.
Sound and Unsound Elements.
Nevertheless, the question arises as to how much of the recovery may be
dun to the prospect of currency debasement and other drastic experiments
in governmental control, and, in particular, how much of the active buying
of commodities and securities may be due to a "flight from the dollar" in
domestic trade similar to the flight that has clearly taken place in international transactions. The fact that no appreciable inflation of currency or
credit has yet taken place does not answer the question. An increase in the
velocity of circulation of money and bank deposits has the same effect on
prices as an increase in their amount, and it is obviously such an increase
in velocity that has been going on in this country in the last few months.
Whether or not there has been "inflation" depends on the definition that
Is given to the term. Certainly there is nothing necessarily unsound in an
increase in velocity of circulation, and the fact that the amount of currency
and credit in use has not yet been artificially expanded is encouraging as far
as it goes. But it is difficult to escape the conclusion that the increase in
velocity and the accompanying price advance have been prompted by doubts
concerning the future value of the dollar.
Those who maintain that the business recovery is sound and genuine are
not without arguments to support their contention. The fact that signs of
Improvement have appeared in many foreign countries where governmental
interference has played no part, or only a minor one, in the situation is an
encouraging sign, as is the fact that some indications of revival became
apparent, here and abroad, in the latter part of 1932. There is undoubtedly
considerable ground for the view that the depression, at least in some of its
more severe phases, has approximately run its course and that natural recuperative forces have begun to operate.
There are, at the same time, several reasons for believing that the recovery,
however sound it may have been in its inception, has been greatly accelerated
by speculative tendencies growing out of the Government's economic policies.
First, and most important, is the rapid depreciation of the dollar in terms
of foreign currencies. This depreciation has been somewhat less swift than
the advance in prices of many basic raw materials that enter into international trade on a large scale, but it has been much swifter than the upward
movement of the general level of commodity prices in this country. The
result is that domestic commodity prices, if converted into gold prices on
the basis of dollar depreciation, show an accelerated decline since the abandonment of the gold standard by the United States.
The depreciation of the dollar and the upward price movement have shown
a fairly close parallel from day to day. Every intimation from Washington
pointing to a disinclination to stabilize the currency and an apparent adherence to a policy of eventual inflation or devaluation has given fresh
Impetus to the price advance on the one hand and the depreciation of the
dollar on the other.
Significance of Price Recession.
The speculative nature of the price advance was emphasized anew by the
severe reaction in security markets and some commodity markets shortly
after the middle of July. On the stock exchanges, the volume of transactions
had risen to a point where it rivaled the records of the "bull market" of
1928 and 1929. Grain prices had shot upward at a rate that was generally
considered far out of line with the improvement in the statistical positions
and prospects for the various commodities. Such an abrupt reversal of trend
after the consistent weakness of the last three years was difficult to explain
on any ground other than uncertainty regarding the value of the dollar.
In part, the industrial recovery seems to be traceable to similar causes.
In some industries, operations have advanced with a swiftness that can hardly
be attributed to any actual or prospective increase in the consumption of
commodities. A conspicuous example is the cotton-textile industry, where
output has reached new high records, despite the fact that operating schedules for some time had been above the extremely depressed levels that characterized most industries. The swiftness of the advance in numerous other
Industries, while less glaring than in cotton textiles, suggests the operation
of other than normal constructive forces.
Further doubt arises from the lack of any definite evidence to show that
consumer demand, or consumer purchasing power is increasing sufficiently
to keep pace with the greater industrial output and the higher prices. Employment and wage payments have unquestionably increased; moreover, the
cost of living appears thus far to have risen only fractionally. Nevertheless,
a higher level of raw-material prices almost necessarily implies a higher cost
of living later on; and a sharp rise in industrial output can be maintained
only by a corresponding expansion in final consumption. Neither industrial
929
Financial Chronicle
wage payments nor sales of goods at retail have yet been shown to have
increased nearly enough to give permanent support to the higher level of
industrial operations.
Need of Increased Buying Power.
The Government's recovery administration is fully aware of this situation,
as is shown by the emphasis that official statements have placed on the
necessity for immediate increases in employment and wages and the efforts
that have been made to prevent unwarranted advances in prices of finished
goods. Even in a normal recovery after a depression, the total volume of
purchasing power released through wage payments tends to rise more slowly
than output and prices. This lag continues throughout the upward movement and eventually becomes one of the major factors operating to end the
expansion.
But when inflation plays a part in stimulating the recovery, the danger
of lagging purchasing power is increased many-fold, partly because the very
rapidity of the price advance makes it difficult for wages to keep pace, but
even more because the increase in output is stimulated by a speculative
process of manufacturing and purchasing "for stock" in anticipation of
higher prices and higher costs. In such a process, the level of present and
prospective demand plays a comparatively minor part, even at the risk of
having to carry large inventories over a considerable period, producers and
distributors will expand their output and their buying as long as they feel
reasonably sure that prices and costs of production will be higher in the
future.
Such a process, of course, can go on only for a limited time. When the
expectation of inflation ceases, the buying comes to an abrupt halt. Unless
consumer purchasing power has expanded very rapidly in the meantime, the
inevitable result is a recurrence of industrial stagnation. It is for this
reason that the appearance of prosperity arising from currency inflation has
invariably proved to have been fictitious and evanescent, lasting only as long
as the inflation itself and collapsing immediately with a prospect of
stabilization.
The soundness of the recovery witnessed so far, the amount of speculative
activity involved in the upward movement, and the relationship of possible
monetary inflation to any weaknesses that might develop in the national
recovery program are questions for the future. For the present, encouragement is to be found in the fact that business levels are considerably higher,
business sentiment is more optimistic, and unemployment is materially lower
than a few months ago.
Revenue Freight Car Loadings Below Previous Weeks,
But Continue Ahead of Last Year's Figures.
The first 14 major railroads to report car loadings of revenue freight originated on their own lines for the seven days
ended July 29 1933 loaded 264,465 cars, as compared with
273,880 cars in the preceding week and 216,796 cars in the
corresponding pariod last year. With the exception of the
Atchison Topeka & Santa Fe Ry. and the Wabash Ry., all
of these carriars continued to show substantial increases over
the 1932 week. Comparative statistics follow:
REVENUE FREIGHT LOADED AND RECEIVED FROM CONNECTIONS.
(Number of Cars.)
Loaded an Lines.
Weeks Ended.
Atch.Top.& Santa Fe Ry
Chesapeake & Ohio Ry
Chic. Burl.& Quincy RR
Chic. Milw.St. Paul dr Pac Ry_
Chicago & North Western Ry_ _ _ _
Chic. Rotk Island & Pacific Ry_ _
Gulf Coast Lines dr subsidiaries_ _
International Great Northern RR.
Missouri-Kansas-Texas Lines_ _
Missouri Pacific RR
xNew York Central Lines
Norfolk & Western Ry
Pennsylvania System
Wabash Ry
Reed from Connections.
July 29 July 22 July 30 July 29 July 22 July 30
1933. 1933. 1932. 1933. 1933. 1932.
16,977
24,368
16,259
17,999
15,172
12,418
2,254
2,403
4,479
13,574
46,822
21,738
64,760
5,242
18,761
22,953
18,167
19,022
17,133
14,009
2,126
2,510
4,564
15,245
48,070
21,186
64,291
4,906
20,687 4,459 4,630 3,442
17,378 9,439 9,349 5,397
13,171 6,205 6,183 4,653
14,867 6,610 7,010 5,401
13,604 9,055 8,927 6,728
13,729 8,538 9,008 7,691
1,736
988
976
902
1,607 1,349 1,275 1,325
4,369 2,408 2,266 2,004
12,693 6,729 7,123 5,762
34,310 62,081 60,947 42,291
13,091 3,751 4,073 2,580
50,166 40,328 40,436 26,703
5,308 6,849 7,260 5,439
264,465 273,880 216,796 168,790 169,463 120,318
Total
x The New York Central Lines on Aug. 3 revised the figures for the week ended
July 29 1933 so that the revenue freight loaded and received from connections
amounted to 109,635 cars.
TOTAL LOADINGS AND RECEIPTS FROM CONNECTIONS.
(Number of Cars.)
Week Ended.
Illinois Central System
St. Louis-San Francisco Ry
Total
July 29
1933.
July 22
1933.
July 30
1932.
25,788
11,401
26,870
11,897
24,318
10,542
37,189
38,767
34,860
Loading of revenue freight for the latest full week-that is,
for the week ended on July 22-totaled 648,914 cars, the
American Railway Association announced on July 29. This
was an increase of 708 cars above the preceding week this
year, and 147,002 cars above the corresponding week in
1932, but a reduction of 93,567 cars below the corresponding
week in 1931. Details for the latest full week follow:
Loading of all commodities for the week of July 22showed increases
over the preceding week this year except grain and grain products and
miscellaneous freight. All commodities showed increases over the corresponding week last year.
Miscellaneous freight loading for the week of July 22 totaled 235,074
cars, a decrease of 4,091 cars below the preceding week, but an increase of
57,489 cars above the corresponding week in 1932. It was, however, a
decrease of 43,932 cars under the same week in 1931.
Loading of merchandise less than carload lot freight totaled 171,468
cars, an increase of 802 cars above the preceding week, and 3,972 cars above
930
Financial Chronicle
the corresponding week last year, but 40,647 cars under the same week two
years ago.
Grain and grain products loading for the week totaled 48,904 cars, a
decrease of 2,485 cars below the preceding week. It was, however, an
Increase of 7,718 cars above the corresponding week last year but a decrease
of 3,912 cars below the same week in 1931. In the western districts alone,
grain and grain products loading for the week ended July 22 totaled 33,239
cars, an increase of 6,813 cars above the same week last year.
Forest products loading totaled 28,704 cars, 629 cars above the preceding
week, 13,055 cars above the same week in 1932, and 1,571 cars above the
same week in 1931.
Ore loading amounted to 26,248 cars, an increase of 2,628 cars above the
week before, and 19,626 cars above the corresponding week in 1932, but
9,600 cars below the same week in 1931.
Coal loading amounted to 116,399 cars, an increase of 2,961 cars above
the preceding week, 39,691 cars above the corresponding week in 1932, and
4,231 cars above the same week in 1931.
Coke loading amounted to 6,464 cars, 118 cars above the preceding week,
3,993 cars above the same week last year, and 1,409 cars above the same week
two years ago.
Live stock loading amounted to 15,653 cars, an increase of 116 cars
above the preceding week, 1,458 cars above the same week last year, but a
decrease of 2,657 cars below the same week two years ago. In the western
districts alone, loading of live stock for the week ended on July 22 totaled
11,671 cars, an increase of 621 cars compared with the same week last year.
All districts reported increases in the total loading of all commodities
Compared with the same week in 1932. All districts reported decreases,
compared with the corresponding week in 1931, except the Pocahontas,
which showed an increase.
Loading of revenue freight in 1933 compared with the two previous
years follows:
Aug. 5 1933
Four weeks In January
Four weeks in February
Four weeks in March
Five weeks in April
Four weeks in May
Four weeks in June
Week ended July 1
Week ended July 8
Week ended July 15
Week ended July 22
q,.....,
1933.
1932.
1,910,496
1,957,981
1,841,202
2,504,745
2,127,841
2,265,379
634,074
539,223
648,206
648,914
2,266,771
2,243,221
2,280,837
2,774,134
2,088,088
1,966,488
488,281
415,928
503,761
501,912
1M A70
Agi
im Kon
A01
1931.
2,873,211
2,834,119
2,936,928
3,757,863
2,958,784
2,991,950
667,630
762,444
757,989
742,481
01
noo onn
The foregoing, as noted, covers total loadings by the railroads of the United States for the week ended July 22. In
the table below we undertake to show also the loadings for
the separate roads and systems. It should be understood,
however, that in this case the figures are a week behind
those of the general totals-that is, aro for the week ended
July 15. During the latter period a total of only 21 roads
showed decreases as compared with the corresponding week
last year. Among the most important carriers continuing
to show increases over a year ago were the Pennsylvania
System, the Baltimore & Ohio RR., the Chesapeake & Ohio
Ry., the New York Central RR., the Southern By. System,
the Norfolk & Western Ry., the Chicago Milwaukee St.
Paul & Pacific By., the Chicago & North Western By.,
the Louisville & Nashville RR. and Illinois Central System.
REVENUE FREIGHT LOADED AND RECEIVED FROM CONNECTIONS(NUMBER OF CARS)-WEEK ENDED JULY 15.
1933.
Eastern DistrictGroup A:
Bangor & Aroostook
Boston & Albany
Boston & Maine
Central Vermont
Maine Central
New York N. H.& Hartford_ - _
Rutland
Total
Group B:
Delaware & Hudson
Delaware Lackawanna & West_
Erie
Lehigh & Hudson River
Lehigh St New England
Lehigh Valley
Montour
New York Central
New York Ontario & Western
Pittsburgh & Shawmut
Pitts. Shawmut & Northern_ _ _ _
Total
Group C:
Ann Arbor
Chicago Ind. & Louisville
Cleve. Ctn. Chic. & St. Louis_ _
Central Indiana
Detroit & Mackinac
Detroit & Toledo Shore Line_ _ _
Detroit Toledo & Ironton
Grand Trunk Western
Michigan Central
Monongahela
New York Chicago & St. Louis_
Pere Marquette
Pittsburgh & Lake Erie
Pittsburgh & West Virginia _ _ _
Wabash
Wheeling & Lake Erie
Total
Grand total Eastern District_
Allegheny DistrictBaltimore & Ohio
Bessemer dv Lake Erie
Buffalo Creek & Gauley
Central RR. of New JerseyCornwall
Cumberland & Pennsylvania
Ligonier Valley
Long Island
Pennsylvania System
Reading Co
Union (Pittsburgh)
West Virginia Northern
Western Maryland
zPenn-Read Seashore Lines- - - Total
Pocahontas DistrictChesapeake & Ohio
Norfolk & Western
Norfolk & Portsmouth Belt Line
Virginian
Total
Southern DistrictCroup A:
Atlantic Coast Line
Clinchfield
Charleston dr Western Carolina_
Durham & Southern
Gainesville & Midland
Norfolk Southern
Piedmont & Northern
Richmond Frederick. dr Potorn.
Seaboard Air Line
Southern System
Winston-Salem Southbound.._ _
Total Loads Received
from Connections.
Total Revenue
Freight Loaded.
Rat/roads.
1932.
1931.
1933.
1932.
879
2,987
8,230
1,065
3,082
11,450
648
690
2,655
6,860
609
2,388
9,313
605
721
3,650
9,961
805
3,642
13,703
603
286
4.873
9,693
2,626
1,583
12,019
940
249
4,027
8,166
2,186
1,458
9,988
1,114
28,321
23,120
33,085
32,020
27,188
4,689
9,107
12,786
178
1,507
7,624
2,301
23,553
1,495
574
333
3,982
6,695
9,826
193
1,451
6,139
874
16,373
1,398
369
202
5,415
9,908
13,892161
1,706
8,497
2,735
26,503
2,274
626
536
6,618
5,465
13,992
1,874
928
6,799
60
28,258
2,002
29
220
5,507
4,384
10,890
1,401.
740
5,474
26
20,510
1,914
77
196
64,150
47,502
72,253
66,245
51,120
472
1,430
8,631
33
179
341
1,610
3,501
6,792
4,377
4,863
4,629
6,027
1,598
6,091
3.927
405
1,362
7,039
30
306
149
1,564
2,244
4,686
2,631
3,878
3,592
3,128
909
5,752
2,573
528
1,968
9,908
64
296
221
1,709
3,839
7,739
4,815
5,385
5,337
5,129
1,356
7,362
4,173
959
1,655
12,259
83
115
2,056
824
5,100
7,918
260
8,537
4,032
6,377
994
7,032
2,982
853
1,358
8,374
37
102
1,045
79/
3,642
5,750
126
6,045
2,965
2,814
426
6,554
2,034
51,531
40,248
59,834
61,183
42,922
147,002
110,870
165,172
159,448
121,230
31,438
2,745
305
5,605
49
308
66
1,033
63,763
12,175
10,391
58
3,403
1,234
21,987
1,243
140
5,119
2
145
96
1,013
49,998
9,916
2,737
33
2,076
1,100
33,116
4,252
137
7,470
416
340
114
1,363
76,112
14,172
6,401
39
3,200
14,665
2,302
9,640
33
17
23
2,211
38,349
15,077
2,618
9,584
701
2
8,303
36
17
9
2,147
26,740
11,249
862
4,248
1,183
2,469
1,004
132,573
95,605
147,132
90,373
63,123
14,953
11,898
713
2,331
22,736
19,581
1,266
3,419
9,221
4,041
1,071
521
5,140
3,196
889
275
29,895
49,057
----
47,002
14,854
9,500
6,088
637
444
141
45
1,451
354
279
5.611
15,874
146
8,546
1,236
561
181
45
1,724
519
402
8,281
22,823
197
4,554
1,603
809
291
67
882
834
3,757
3,289
11,984
699
3,317
915
543
261
51
647
523
2,691
2,247
7,530
572
24,667
20,188
777
3,425
6,728
1,093
582
181
60
1,373
591
411
6,457
20,610
172
Total Revenue
Freight Loaded.
Rat/roads.
Group B:
Alabama Tenn.& Northern_ _
Atlanta BirmIngton & Coast-Ati. & W.P.-West. RR.of Ala
Central of Georgia
Columbus & Greenville
Florida East Coast
Georgia
Georgia & Florida
Gulf Mobile & Northern
Illinois Central System
Louisville & Nashville
Macon Dublin & Savannah
Mississippi Central
Mobile & Ohio
Nashville Chatt. & St. Louis...
New Orleans-Great Northern..
Tennessee Central
Total Loads Received
from Connections.
1933.
1932.
1931.
212
1,015
691
4,457
224
309
812
445
735
17,712
18,680
171
155
1,908
2,727
511
318
226
633
552
2,845
154
294
163
308
592
15,581
13,125
123
146
1,593
2,370
401
267
273
939
650
4,831
179
435
1,134
506
729
22,408
19,963
145
130
2,119
3,191
686
580
1933.
150
499
953
2,754
142
291
1,574
334
728
9,207
4,050
350
239
1,326
2,863
311
536
1932.
141
342
629
1,875
113
363
964
305
499
6,023
2,587
345
208
739
1,702
216
377
51,082
39,973
58,898
26,247
17,428
Grand total Southern District..
89,340
71,043
103,413
55.016
36,725
NorthwesternDistrictBelt Ry. of Chicago
Chicago & North Western
Chicago Great Western
Chic. Mllw. St. Paul & Pacific
Chic. St. Paul Minn. & Omaha_
Duluth Mlasabe & Northern_ _ _
Duluth South Shore & Atlantic.
Elgin Joliet & Eastern
Ft. Dodge Des M. & Southern_
Great Northern
Green Bay SE Western
Minneapolis & St. Louts
Minn. St. Paul & S. S. Marie- Northern Pacific
Spokane Portland & Seattle....
889
19,080
2,901
19,446
3,881
6,599
953
5,361
369
10,920
510
2,253
5,827
9,117
1,046
1,077
13,229
2,221
14,396
3,462
2,433
404
2,742
294
7,102
490
1,832
4,016
6,608
975
1,556
21,462
3,983
22,102
3,925
13,076
1,063
4,367
394
14,722
584
3,051
6,276
9,435
1,108
2,283
8,383
2,118
5,989
2,966
77
316
4,480
152
1,978
497
1,275
1,854
2,222
1,210
1,282
6,342
1,672
5,477
2,270
73
318
2,574
106
1,887
324
886
1,738
1,944
745
89,152
61,281
107,104
35,800
27,638
20,256
3,259
178
16,335
12,921
2,565
620
1,255
175
1,124
625
286
16,173
381
445
12,056
169
1.146
25,046
3,317
109
13,130
13,381
2,247
613
1,287
199
1,476
630
266
15,269
218
292
11,063
163
1,279
33,864
4,111
186
20,103
19,161
2,737
1,014
2,013
282
1,971
771
151
20,717
370
331
14,352
129
1,567
4,226
1,647
22
5,756
6,986
2,037
798
1,769
19
69(1
264
47
2,891
283
1,037
6,000
5
1,290
3,379
1,69/
17
4,303
6,279
1,270
676
1,770
23
743
600
38
2,508
296
746
5,615
3
1,182
89,969
89,985
123,830
35,767
31,145
213
149
120
2,128
121
130
89
1,704
238
126
145
1,653
3,364
338
145
938
2,134
220
155
1,101
4,523
122
1,498
943
332
512
132
4,434
14,668
51
65
7,398
2,624
1,691
150
1,274
1,185
82
492
44
5,082
12,905
37
116
7,835
1,849
4,872
391
1,953
2,062
171
946
57
6,045
20,082
35
117
9,601
2,439
1,292
775
1,229
730
716
218
306
2,282
7,526
7
72
3,342
1,579
1,275
447
1,236
887
311
162
194
2,025
5,759
12
56
2,674
1,326
5,029
4,139
2,016
17
4,757
3,335
2,178
26
6,479
4,899
1,987
38
2,728
3,474
2,619
33
2,580
2,920
1,674
39
Total
Total
Central Western DistrictAtch. Top. & Santa Fe System_
Alton
Bingham & Garfield
Chicago Burlington & Quincy
Chicago Rock Island de Pacific_
Chicago dr Eastern Illinois - - - Colorado clz Southern
Denver & Rio Grande Western_
Denver & Salt Lake
Fort Worth & Denver City-Northwestern Pacific
Peoria tie Pekin Union
Southern Pacific (Pacific)
St. Joseph & Grand Island__
Toledo Peoria & Western
Union Pacific System
Utah
Western Pacific
Total
Southwestern DistrictAlton & Southern
Burlington-Rock Island
Fort Smith & Western
Gulf Coast Lines
y Ilouston & Brazos ValleyInternational Great Northern..
Kansas Oklahoma & Gulf
Kansas City Southern
Louisiana & Arkansas .
Litchfield & Madison
Midland Valley
Missouri & North ArkansasMissouri-Kansas-Texas Lines..
Missouri Pacific
Natchez & Southern
Quanah Acme & Pacific
St. Louis-San Francisco
St. Louis Southwestern
y San Antonio Uvalde & Gulf
Southern Pacific in Texas & La_
Texas & Pacific
Terminal RR. Assn. of St. louts
Weatherford Min.Wells & N.W.
51,113
45,082
19,297
64,336
Total
44.515
33,713
28,769
Total
31,070
38.258
27,187
x Estimated. y included In Gulf Coast Lines. z Pennsylvania-Reading Seashore Lines include the new consolidated lines of the West Jersey & Seas tore RR,
formerly part of Pennsylvania RE. and Atlantic City ER. formerly part of Reading Co.; 1931 and 1932 figures Included in Pennsylvania System and Reading Co.
Moody's Daily Index of Staple Commodity Prices
Irregular and Slightly Lower.
Commodity prices have again been irregular and finished
the week in review at slightly lower levels. Moody's Daily
Index of Staple Commodity Prices declined sharply during
the first two days of the week, going below the recent low
point of July 22, then recovered for three days and finally
eased off on Friday to close at 135.1, for a net loss of 2.3
points. The present level is only 9.3% below the high point
of 148.9 reached on July 18 and is 41.7% above the low
reached early in February.
Rubber, which has been especially erratic in price movement of late, has been the only one of the fifteen commodities
to advance during the week. Wool, coffee, hides, copper
and lead are unchanged, while the remaining nine staples
have declined,• but the losses have been in every case
moderate. Wheat, cotton, silk and corn contributed most
to the decline in the weighted Index, while sugar, hogs,
cocoa, scrap steel and silver are also slightly easier. The movement of the Index number during the week,
with comparisons, is as follows:
July 28
Fri.
Sat.
July 29
Mon. July 31
Tues. Aug. 1
Wed. Aug. 2
Thurs, Aug. 3
Fri.
Aug. 4
137.4
135.3
132.1
134.8
136.1
136.2
135.1
2 wks ago, July 21
Month ago, July 3
Year ago. Aug. 6
1932 High, Sept. 6
Low, Dec 31
1933 High, July 18
1 Low, Feb 4
134.1
132.4
89.7
10.3.9
79.3
148.9
78.7
National City Bank of New York on Trade and Industrial Conditions-Indexes of Percentage Rise Makes
Best Showing Since Early in 1931.
According to the National City Bank of New York "there
is no ground for ascribing to the market break any important
influence on the business situation." In its Aug. 1 "Monthly
Letter" the bank adds that "the vertical rise of the business
indexes continued uniformly during the forepart of July,
but in a few lines gave signs of pausing toward the end of
the month. This was to be expected after four months of
continuous advance, at the greatest rate attained in any
business recovery of record, and the general view as to the
• probability of a fall upawing is not disturbed by it. On the
contrary, the speed of the rise had already roused apprehensions that production was running ahead of the prospective retail distribution."
A table which the bank presents "gives a record of some
of the recognized business indexes, showing the percentage
of rise from one year ago to the latest figures available."
In part the bank goes on to say:
The showing of these indexes is in general the best since early in 1931.
and the productive activity of all the industries, as measured by the composite indexes making adjustment for normal seasonal variations, has been
in July approximately equal to the peak of the spring rise in 1931. The
. index of the Standard Statistics Co., given at 94.3 in the table, was 93.9
in April 1931 (Jan. 1 1923=100),and that figure had not since been equalled
until the past month. As compared with the 1929 peak, this index shows
that half of the decline has been recovered.
Month of June
or Latest Week.
Year
Ago.
Per Cent
Increase.
71.4
55.0
94.3x
Industrial activity (Standard Statistics)
Checks cashed. 262 centres
28.9
$8,082,000,000* $6,266,000,000
Freight car loadings
504,000
28.6
648,000*
Electric power produced, kwh
16.4
1,648,000,000* 1,416,000,000
Steel operations, per cent of capital
16
58*
262.5
Bituminous coal produced, tons
6,965.000*
67.6
4,155,000
Automobile production, number
183,000
253,000
38.2
Cotton consumption, bales
322,700
696,000
115.7
Silk deliveries to mills, bales
37,470
53,627
43.1
Lumber orders, feet
55.8
120,000,000
187,000,000
92 7
41 47.6
61 326
Rubber consumption, long tons
* Weekly figures. x Month of July, estimated.
With industry going at this rate, and the rising prices influencing manufacturers and distributors to increase their inventories, the question of
retail demand assumes great importance. Department store sales during
June, as reported by the Federal Reserve Board, showed only the seasonal
change from May, and wore 4% below a year ago, in dollars. However,
these figures indicated a slightly larger movement of merchandise, as
prices at the beginning of the month were 8.3% lower, and at the end 3.8%
lower, according to the Fairchild index. The dollar sales of chain stores
and mail order houses during the month were 7% larger, this figure representing a larger volume of merchandise. Reports from New York City
department stores for the first half of\July show little change, sales having
been 4% smaller than in the same period of 1932. Elsewhere, however,
the showing has been better, according to preliminary reports, with chains
and mail order stores serving factory centres and agricultural districts
generally well ahead of a year ago.
The Question of Purchasing Power.
It Is usual for retail sales to lag somewhat in a business recovery. Looking to the fall, consumers' income will be the largest in several years. In
Juno employment in the manufacturing industries increased 7% and payroll
disbursements 11% over the preceding month, according to the Department
of Labor. This is against the usual seasonal decline, and the record for
July will be similar. The advance in security prices from the low represents an enormous increase in buying power.
Moreover, the increase in corporation profits and the better showing in
dividend disbursements, as reported in a subsequent article in this letter,
is highly favorable. The turn from a loss to a profit in corporation earnings
is a very necessary development in advancing business recovery. Not only
does it give the incentive to produce and to increase employment, but it
Provides the means for repairing the ravages of the depression upon equipment. for making replacements and improvements, and in this manner
931
Financial Chronicle
Volume 137
extending the recovery to the'industries making capital goods as well as
those turning out articles of personal use. No recovery could progress far
unless this important group of industries, including construction and machinery of all kinds, participated in it, and this is a reason why consideration should be given to the profits of industry in the operation of the Recovery Act.
Conversely, the lack of a capital market, out of which industry could
finance its capital needs, is one of the unsatisfactory elements in the present
situation. It is common testimony that difficulty in fulfilling the requirements of the new Securities Act is one of the obstacles holding up new public
borrowing.
There is no ready method other than observation for determining whether
general production and consumption are out of line, but the view of General
Johnson and other good judges is that the situation is threatening. Hence
the efforts during the past month to speed up the operation of the Industrial
Recovery Act, the rapidity with which the major industries have prepared
their codes, and finally the appeal to all employers of labor to agree voluntarily to fix the maximum work week at 35 hours and minimum pay at
40 cents an hour for factory workers, and 40 hours and $14 to $15 Per week
(depending upon location) for clerical workers, effective until Dec. 31.
exes of Business Activity of Federal Reserve Bank
-d-----In
of New York-Increase Noted in Activity During
June and First Half of July.
In its indexes of business activity presented in its "Monthly
Review" of Aug. 1, the New York Federal Reserve Bank
stated that "in the first half of July general business activity
appears to have shown some further increase. The movement
of freight over the railroads advanced more than seasonally,"
the Bank continued, "and production of electric power rose
in contrast to the usual seasonal tendency." The Bank
further noted:
During June, general business activity and the distribution of goods to
merchants and manufacturers showed a substantial expansion. After
allowance for the usual seasonal changes, sizable increases occurred in
railroad freight traffic, imports of basic raw materials, the volume of check
payments, sales of life insurance, and production of electric power. The
distribution of goods to consumers,on the other hand, appears in the aggregate to have shown no marked change from May to June. This bank's
seasonally adjusted indexes of sales of chain stores other than grocery
chains and advertising increased moderately and retail sales of automobiles
increased rather sharply, but sales of department stores, grocery chain
stores, and mail order houses showed little change.
(Adjusted for seasonal variations, for usual year to year growth, and
where necessary for price changes.)
June
1933.
June
1932.
April
1933.
May
1933.
Primary DistributionCar loadings, merchandise and miscellaneous____
Car loadings, other
Exports
Imports
Waterways traffic
Wholesale trade
55
38
45
65
32
79
52
51
42
49
42
85
55
48
55
53
46
99
59
55
48p
64p
Distribution to ConsumerDepartment store sales, Second District
Chain grocery sales
Other chain store sales
Mail order house sales
Advertising
Gasoline consumption
Passenger automobile registrations
76
74
76
73
59
91
41
73
60
75
72
50
68
28
72
60
71
66
51
72
3415
71
60
75
65
54
64
62
76
61
59
76
68
61
129
22
94
48
55
53
72
52
125
67
64
59
85
11
71
37
57
53
73
52
231
64
66p
62
84
15
85
62
62p
78
62
310
67
70V
66
76
19
85
129
182
136
124
170
127
127
172p
128
128
173,
129
General Business ActivityBank debits, outside of New York City
Bank debits, New York City
Velocity of bank deposits, outside of N.Y.City
Velocity of bank deposits, New York City
Shares sold on New York Stock Exchange
Life insurance paid for
Electric power
Employment in the United States
Business failures
Building contracts
New corporations formed in New York State
Real Estate transfers
General price level*
Composite index of wages*
Cost of living*
•1913 average=100.
p Prellminary.
89
i5p
Improvement in Business Activity More Rapid During
June and First Half of July, According to Conference of Statisticians in Industry.
"Business activity quickened its rate of improvement during June and the first half of July," notes the Conference
Board "Business Survey," dated July 20, prepared by the
Conference of Statisticians in Industry under the auspices of
the National Industrial Conference Board. "Since the beginning of the upturn roughly 40% of the ground lost between
June 1929 and March 1933 has been regained," the "Survey"
continued. "Advances in production and shipments in the
last six weeks have come at a time when recession is seasonal." The "Survey" further noted:
Production in the basic industries was stepped up again. Automobile output in June and the first half of July exceeded the relatively high record of
May and passed the levels of production in the industry for the same time
last year. Building and engineering construction advanced sharply during
the month wiien slackness is seasonal. Steel and iron production continued
to broaden out in June and the first half of July. Bituminous coal output
showed more than seasonal gains in the last six weeks. Anthracite shipments increased in June and fell off slietitly in the opening days of this
month. Textile production reached a new peace-time level of activity in
June, which was further increased in the first two weeks of July. Electric
power production in the last six weeks kept pace with the gains in manufacturing activity, and in many sections of the country exceeded 1929 levels.
Distribution of raw materials and processed commodities showed advances
in June as compared with May, contrary to seasonal tendencies. Retail sales,
Financial Chronicle
932
however, fell off during the month in both volume and value to an extent
greater than is to be expected at this time of year.
Prices of commodities at wholesale continued their rapid advance in June
and the first half of July: Prices of all commodities taken together passed
the average of June last year.
Security prices continued their upward surge in June and the first half
of July. Money rates tapered downward to lower levels in the last six
weeks. Federal Reserve credit outstanding eased off in June and the first
half of July.
Commercial failures fell off in both number and extent of liabilities in
June. The declines were measurably more than is seasonal at this time
of year.
Employment in manufacturing industry increased sharply between May
and June, as did payrolls, weekly earnings and hours worked. Hourly earnings remained steady, while hours worked per week advanced. The cost of
living advanced again in June by roughly 1% over May, which in turn
increased by 0.8% over April.
The extension of improvement in business activity into June and July
was at a rate unprecedented in the history of recoveries from depression levels.
A major part of the force behind the upward drive comes from the need of
producers and distributors to replenish their inventories of raw and processed
items at relatively low costs. Capital construction has barely begun to get
under way.
The delay in the rise of retail prices is due to the inertness of costs of
distribution which operates on the upswing as well as on the downswing.
Demand for consumers' goods in recent weeks has been of a replacement
nature. The revival of retail trade awaits the spur of additional general
employment and a change in season.
United States Department of Labor Reports Increase
in Wholesale Prices for Week Ended July 29.
The Bureau of Labor Statistics of the United States Department of Labor announces that its index number of wholesale prices for last week-the week ended July 29-stands at
69.2 as compared with 69.7 for the week ended July 22 showing a decrease of approximately Yi of 1%. The Bureau
further announced:
This decrease is due in the main to the decline In farm products, the
Index dropping from 62.7 to 59.6 or approximately 5%. These index
numbers are derived from price quotations of 784 commodities, weighted
according to the importance of each commodity and based on average
prices for the year 1926 as 100.0.
The accompanying statement shows the index numbers of groups of commodities for the weeks ending July 1, 8, 15, 22 and 29 1933:
INDEX NUMBERS OF WHOLESALE PRICES FOR WEEKS OF JULY 1, 8,
15, 22 AND 29 1933.
(1926=100.0)
Week EndingJuly 1.
Farm products
Foods
Hides and leather products
Textile products
Fuel and lighting
Metals and metal products
Building materials
Chemicals and drugs
Housefurnishing goods
Miscellaneous
All commodities
July 8. July 15. July 22. July 29.
56.9
62.6
83.3
62.2
64.3
79.2
75.9
73.5
73.2
62.1
58.5
62.9
83.7
64.1
65.7
79.9
77.0
73.0
73.6
62.9
61.1
65.9
85.4
66.5
66.7
80.6
78.8
72.9
74.0
63.5
62.7
66.5
87.8
68.3
66.8
80.7
79.1
73.2
74.3
64.6
59.6
66.1
88.3
68.4
67.0
80.8
80.1
73.4
74.6
65.1
66.3
67.2
68.9
69.7
69.2
Moderate Advance of "Annalist" Weekly Wholesale
Price Index During Week of Aug. 1 Reflects Cotton
Goods Tax.
A net rise of 0.6 point for the week carried the "Annalist"
Weekly rndex of Wholesale Commodity Prices to 103.1 on
Aug. 1 from 102.5 (revised) July 25.'or In noting this the
"Annalist 'said that the advance, small by comparison with
the recent gains and losses, concealed sharp fluctuations of
prices during the week under the leadership of the grains,
a rally in commoctity prices on July 26 and 27 being succeeded
gir a secondary reaction on the three following days, and
by partial recovery on Aug. 1. The "Annalist" further said:
The rise of the index was due primarily to sharp advances in cotton goods
prices as a result of the new tax effective Aug. 1, although net gains in wheat
and flour, and in the petroleum group also contributed. The movement of
the Index was largely independent of the course of the dollar, reflecting the
decreased emphasis by the Government on currency inflation; the index
on a gold basis advanced sharply to 77.0 from 73.3 (revised), the dollar
going in tbe meantime to 74.7 gold cents from 71.5.
THE ANNALIST WEEKLY INDEX OF WHOLESALE COMMODITY PRICES
Unadjusted for Seasonal Variation (1913=100).
Aug. 1 1933. July 25 1933. Aug. 2 1932.
91.7
103.9
*128.9
118.7
104.2
107.3
96.9
86.5
Farm products
Food products
Textile products
Fuels
Metals
Building materials
Chemicals
Miscellaneous
All commodities
All CoMmndittlixt nn
a91.3
105.1
2119.3
117.5
104.3
107.2
96.9
85.3
71.4
97.4
66.4
143.9
95.8
106.7
95.2
79.4
a102.5
92.5
a73.3
*Preliminary. a Revised. b Based on exchange quotations for France, Switzerland, Holland and Belgium.
h on1.1 hnoia
103.1
77_n
The "Annalist" also said:
The relapse of prices after the recovery early last week was due immediately to liquidation caused both by the clearing out of weakened long
Aug. 5 1933
accounts and by continued reports from Washington purporting to indicate
the abandonment of currency inflation in favor of reliance on the NRA.
The absence of a strong short interest in the grains. the leaders in the movement, prevented the cushioning of the decline. just as two weeks ago.
The whole recent price movement is an admirable example of what
happens when the speculative markets cease to be free. For months the
administration has been asserting its determination to raise prices by any
means. The consequence has been as complete domination of the grain
markets by the Government as when the Farm Board was actually buying
and selling futures.
Under such conditions a strong short interest to ease declines has become
Impossible. No one is going to "buck the Government." or to take the
opposite side of a "sure thing." With the markets no longer free to respond
to and measure the normal interplay of supply and demand, speculation has
become the attempt simply to guess what the Government will do next.
That grain prices have again collapsed, and that minima have had again to
be set by the Chicago Board of Trade (presumbaly under pressure from the
Administration) is due fundamentally to the fact that the Government bas
without warning reversed its inflation policy (or has allowed it so to appearit remains to be seen whetter it will again be reversed when the completion
of the financing program renders the threat of a depreciating currency no
longer a hindrance). So long as the policies of the Government continue
thus predictable, just so long will such wild price fluctuations persist and
make restrains on the markets necessary. But it is with the Government in the first place rather than with the trade that the responsibility for
the situation rests.
The prospect appears at the present rate to be the progressive elimination
of the grain exchanges as active and responsible instruments of price determination, tte gradual restriction of hedging facilities, the passing of price
change risks back to the mills and other holders of actual grains, and eventually the enlargement in the spread between the price paid by the consumer
and that received by the farmer in order to cover the increased risk. Indeed,
many mills, because of the virtual elimination of hedging, are already reported to be refusing to do business at all, except at prices enough higher to
give them some assurance of protection. In the end we are likely to find
ourselves with the same sort of far-flung price control from farmer through
to consumer that was exercised by the Government during the war. Regardless of the wisdom of such a system, it will be most unfortinate merely
to drift into it unawares as a consequence of the absence of a stable currency
policy.
National Fertilizer Association Reports Commodity
Prices Up Slightly During Week of July 29.
Wholesale commodity prices showed a small advance
during the latest week according to the index of the National
Fertilizer Association. During the week ended July 29 this
index gained two points, advancing from 67.3 to 67.5. (The
three year average 1926-1928 equals 100.) A month ago
the index stood at 63.8 and a year ago at 61.5. The Association continued on July 31:
Six of the major groups in the index advanced during the latest week,
three declined and five showed no change. The advancing groups were
grains, feeds and livestock, textiles, fuel, which includes petroleum and its
products, chemicals and drugs, fertilizer materials and miscellaneous commodities. None of the gains were very large. The declining groups were
foods, metals and fats and oils. These declines were comparatively small.
During the latest week 31 commodities showed price advances. This is
the smallest number of weekly advances in several months. Twenty-six
commodities showed lower prices. During the preceding week there were
42 price advances and 24 declines, two weeks ago there were 76 advances
and only nine declines. Important commodities that advanced during the
latest week were cotton, wheat, lumber, hides, leather, wool, lard, petroleum. flour, peanuts, cottonseed meal, tankage and feedstuffs. Among the
declining commodities were butter, eggs, pork, potatoes, corn, hogs,lambs,
copper and silver.
The index number and comparative weights for each of the 14 major
groups listed in the index are shown in the table below:
WEEKLY WHOLESALE PRICE INDEX-BASED ON 476
COMMODITY PRICES.
(1926-1928=100).
Per Cent
Each Group
Bears to the
Total Index.
Group.
Latest
Week
July 29
1933.
Preceding
Week.
Month
Ago.
Year
Ago.
23.2
16.0
12.8
10.1
8.5
6.7
6.6
6.2
4.0
3.8
1.0
.4
.4
.3
Foods
Fuel
Grains, feeds and livestock_ _
Textiles
Miscellaneous commodities _ _
Automobiles
Building materials
Metals
House-furnishing goods
Fats and oils
Chemicals and drugs
Fertilizer materials
Mixed fertilizer
Agricultural implements
69.4
58.0
56.9
67.1
68.0
84.4
74.1
78.2
77.2
54.0
87.0
66.7
65.9
90.1
70.0
57.7
55.3
66.5
67.0
84.4
74.1
78.6
77.2
55.9
86.6
65.8
65.9
90.1
65.7
53.9
51.2
61.3
62.9
84.4
72.2
74.5
75.4
54.5
87.9
64.9
65.7
90.1
62.0
67.6
45.7
40.3
59.6
87.7
71.6
68.0
78.2
40.5
87.4
67.7
71.8
92.1
11,
,c
APT .2
WS •4
111.5
11111 ft
Lii
•
•
Weekly Electric Output Continues at the Same Rate.
According to the Edison Electric Institute, the production
of electricity by the electric light and power industry of the
United States for the week ended July 29 1933 amounted to
1,661,504,000 kwh.,an increase of 15.4% ov3r the same week
last year, when output totaled 1,440,386,000 kwh. A similar gain was registered for the preceding week over the corresponding period in 1932.
This was the 13th consecutive week that production exceeded that for the 1932 weak,and also compares with 1,654,424,000 kwh. produced during the week ended July 22 1933,
and 1,648,339,000 kwh-.-for the 'week ended July- 15 and
1,538,500,000 kwh.for the week ended July 8 1933.
Electric output in the New England region during the
week ended July 29 1933 was 24.0% over that for a year ago,
the Middle Atlantic region showed a gain of 13.6%, the Central Industrial region an increase of 21.1%, the Southern
States region an advance of 14.0%, and the Pacific Coast
region a gain of 8.0%. The Institute's statement follows:
PER CENT CHANGES.
Week Ended
Week Ended
Week Ended
Week Ended
July 29 1933. July 22 1933. July 15 1933. July 8 1933.
Major Geographic
Divisions.
New England
Middle Atlantic
Central Industrial
Southern States
Pacific Coast
Total United States..
+24.0
+13.6
+21.1
+14.0
+8.0
+27.1
+11.7
+19.2
+18.6
+8.0
+26.0
+12.2
+19.2
+25.8
+5.3
+22.2
+13.3
+16.2
+29.1
+0.2
+15.4
+15.4
+16.4
+14.7
Note.-Speelfle infor.liation on the trend of eIeettic power produotion Is now
available for the Southern States, the addition of another geogr iphic region in
the weekly reports of electric power output. This major economic division includes
the territory south of the Potomac and Ohio rivers and the States of Arkansas.
Oklahoma, Louisiana and Texas.
The region for nerly described as the Atlantic Seaboard has been changed to the
"Middle Atlantic" area and includes the States of Maryland, Delaware. New
Jersey and the central and eastern portion of New York and Pennsylvania.
No changes have been made in New England, the Pacific Coast, or the Central
Industrial region, which, as before, is outlined by Buffalo, Pittsburgh, Cincinnati.
St. Louis and Milwaukee.
Arranged in tabular form, the output in kilowatt hours of
the light and power companies of recent weeks and by
months since and including January 1930, is as follows:
TVeek of-
Week of-
1933.
Slay 6 1,435,707,000 May 7
May 13 1,468,035,000 May 14
May 20 1,483,090,000 May 21
May 27 1,493,923,000 May 28
June 3 1.461,438,000 June 4
June 10 1,541,713,000 June 11
June 17 1,578,101,000 June 18
June 24 1,598,136,000 June 25
July 1 1,655,843.000 July 2
July 8 1,538,500,000 July 9
July 15 1,648,339,000 July 16
July 22 1,654,424.000 July 23
July 29 1,661,504,000 July 30
Aug. 5
Aug. 6
Aug. 12
Aug. 13
1932.
1931.
Week of-
1,429,032,000 May 9
1,436,928,000 May 16
1,435,731,000 May 23
1,425,151,000 May 30
1,381,452,000 June 6
1,435,471,000 June 13
1,441,532,000 June 20
1,440,541,000 June 27
1,456,961,000 July 4
1,341,730,000 July 11
1,415,704,000 July 18
1,433,993,000 July 25
1,440,386,000 Aug. 1
1,426,986,000 Aug. 8
1,415,122,000 Aug. 15
1,637.296.000
1,654,303.000
1,644,783,000
1,601,833,000
1,5(13,662,000
1,621,451,000
1,609,931.000
1,634,935.000
1,607,238.000
1,603,713,000
1,644,638.000
1,650,545,000
1,644.089.000
1,642,858,000
1,629,011,000
1933
Over
1932.
0.5%
2.2%
3.3%
4.8%
5.8%
7.4%
9.5%
10.9%
13.7%
14.7%
16.4%
15.4%
15.4%
DATA FOR RECENT MONTHS.
1933.
Month of-
1933.
1932.
1931.
January _ _ _ _
February _ _ _
March
April
May
June
July
August
September
October _
November _
Decentber_
6,480,897.000
5,335,263,000
6.182,281,000
6,024,855,000
6,532,686,000
7,011,736,000
6,494,091,000
6,771,684,000
6,294,302,000
6,219,554,000
6,130,077.000
6,112,175,000
6,310,667,000
6,317,733,000
6,633.865,000
6,507.804,000
6,638,424,000
7,435,782,000
6,678,915,000
7,370,687,000
7,1E4,514,000
7,180,210.000
7,070,729,000
7,286,576,000
7,166,036,000
7,099,421.000
7,331,330,000
6,971,644,000
7,288,025,000
1930.
Under
1932.
8,021,749,000 7.6%
7.066,788.000 10.1%
7,580,335,000 8.7%
7,416,191,000 4.3%
7.494.307,000 a5.0%
7,239,697,000
7,363,730,000
7,391,196,000
7,337,106,000
7,718,787,000
7,270,112,000
7,566,601,000
Total _
77,442,112,000 86,063,969,000 89.467,099,000
a Increase over 1932.
Note.-The monthly figures shown above are based on reports covering approximately 92% of the electric light and power industry and the weekly figures are based
on about 70%.
Electric Output in June 1933 Increased 10% Over the
Same Month Last Year.
According to the Department of the Interior, Geological
Survey, production of electricity for public use in the United
States amounted in June 1933 to 7,207,436,000 kwh., as
against 6,996,126,000 kwh. in the previous month and
6,562,547,000 kwh. in the same month in 1932. Of the
figure for June 4,189,460,000 kwh. were produced by fuels
and 3,017,976,000 kwh. by water power. The Survey's
report follows:
PRODUCTION OF ELECTRICITY FOR PUBLIC USE IN THE UNITED
STATES (IN KILOWATT-HOURS).
Division.
Total by Fuels and Water Power.
April.
May.
June.
443,011,000 485,335,000 499,398,000
New England
Middle Atlantic__ _ _ 1,707,068,000 1,817,820,000 1,886,499,000
East North Central_ 1,424,518,000 1,522,103,04)0 1,577,574,000
West North Central_ 408,662,000 458,583.000 481,195.000
814,461,000 910,424,000 833,248,000
South Atlantic
East South Central_ 249,069,000 288,370,000 341,271,000
West South Central_ 314,917,000 355,964,000 381,551,000
200,231,000 214,664,000 221,520,000
Mountain
899,720,000 942,863,000 985,130,000
Pacific
Total for U. S_
933
Financial Chronicle
Volume 137
6,461,657,000 6,996,126,000 7,207,436,000
Change in Output
from Previous Year.
May.
June.
+12%
+5%
-4%
+19%
+7%
+11%
+6%
+24%
+22%
+7%
+11%
-1%
+5%
+10%
+4%
+4%
+16%
+3%
+9%
+3%
Tho average dal y production of electricity for public use in Juno was
240,200,000 kwh., nearly 6.5% greater than in May. This is tho greatest
percentage increase in tho average daily production of electricity from
one month to another over recorded. The normal change from May to
Juno is an Increase of about 1.5%.
The daily production of electricity by the use of water power decreased in
Juno, owing to tho usual seasonal decrease in the flow of streams utilized
for power. The increased demand for electricity during June was supplied
by fuel-burning plants.
The marked increase in the demand for electricity over that for the same
months in 1932, which started in May, continued, the production of
electricity in June being 10% greater than for June a year ago.
TOTAL MONTHLY PRODUCTION OF ELECTRICITY FOR PUBLIC USE.
1932.a
1933.
1933
Under
1932.
Kilowatt Hours Kilowatt Hours
8%
January.. _ _ _ 7,567,081.000 6,932,499,000
February _ _ _ 7,023,473.000 6.285,704.000 b8%
7,323,020,000 6.673,536,000
March
5%
April
6,790,119.000 6,461,657,000
May
6,659,750.000 6,990,126,000 c5%
June
6,562,547.000 7,207,436,000 c10%
July
6,546.995,000
6,764.166,000
August
Septcm ber _ _ 6,752,091.000
October _ _ _ _ 7,073,149,000
November _ _ 6,952,085,000
December._ _ 7,148,606.000
Total
a Revised.
Cst:v production.
Produced by
Wetter Power.
1932.
1933.
5%
b5%
7%
11%
41%
42%
42%
13%
13%
16%
11%
10%
9%
6%
8%
45%
41%
43%
42%
45%
48%
49%
9.4%
83,153,082,000
b Based on Ewen
1932
Under
1931.
46%
42%
41%
38%
36%
41%
39%
41%
c Increase over 1932.
sharply in
Consumption of coal by the ei_ctric power utilities increased
June. Bituminous consumption rose ..rom 2.092.928 tons in May to 2.361,635 tons in June. On a daily basis this represents an increase of 16.6%•
tons, as
Consumption of anthracite during the month amounted to 116,874
compared with 100.981 tons in the month preceding.
stood
Stocks of bituminous coal advanced slightly in June and on July 1
beginning
at 4,405,142 tons. In comparispn with the tonnage on hand at the
on the
of the previous month, this is a gain of 0.3%. Anthracite stocks,
tons, as
other hand, declined and on July 1 were reported at 1,063,046
against 1,122,985 tons on June 1.
At the rate of consumption prevailing in June the stocks of bituminous
coal N\ ere
coal were sufficient
last 56 days, while the reserves of hard
to
equivalent to 273 days' requirements.
all power
The quantities given in the tables are based on the operation of
in generating
plants producing 10.000 kwh. or more per month, engaged
commercial and
electricity for public use, including central stations, both
railroads genmunicipal, electric railway plants, plants operated by steam
public works
plants,
erating electricity for traction, Bureau of Reclamation
is sold.
plants, and that part of the output of manufacturing plants which
works plants
The output or central stations, electric railway and public
The output as
represents about 98% of the total of all types of plants.
"Electrical World"
published by the Edison Electric Institute and the
received from
includes the output of central stations only. Reports are
output of those
plants representing over 95% of the total capacity. The
the figures of
Plants which do not submit reports is estimated; therefore,
tables are
output and fuel consumption as reported in the accompanying
on a 100% basis.
Commerce, co[ The Coal Division, Bureau of Mines, Department of
operates in the preparation of these reports.]
Farm Price Index of United States Department of
Agriculture at New Peak July 15.
of
Prior to the recent commodity price break, the index
prices of farm products showed the largest monthly gain in
16 years, the Bureau of Agricultural Economics of the United
index
States Department of Labor reported on July 27. The
the
figure,
15
June
the
above
points
12
or
15,
July
was 76 on
sharp advance being induced by further depreciation of the
mill
dollar, generally poor crop prospects, increased cotton
consumption, and expectations of a substantial reduction in
cotton acreage, according to the Bureau, which on July 27
added:
registered
Grain prices gained most during the month ended July 15, and
price index for fruits
an advance of 31 points above prices on June 15. The
points, chickens and
and vegetables rose 29 points, cotton and cottonseed 13
for meat animals
eggs 12 points, and dairy products 6 points. The index
showed no change.
points higher
At 76, the July 15 index for all farm commodities was 19
July 15 with
than the index on the same date a year ago. Comparing this
43 points,
last, the index for grains was up 52 points, cotton and cottonseed
chickens and
fruits and vegetables 20 points, dairy products 8 points, and
6 points from a
eggs 2 points. The index of meat animal prices was down
year ago.
June 15 to
Hog prices failed to make their usual seasonal advance from
Heavy
July 15 on account of poor crop prospects and advancing feed prices.
of
storage accumulations of pork products have also favored the retention
local market prices of hogs at their June level. Corn prices made a substantial gain, and the hog-corn ratio for the United States dropped sharply
to 7.2 as of mid-July compared with 9.9 in mid-June. It was the smallest
hog-corn ratio recorded since July 1924. Farmers sold their corn readily
at the higher prices, and these heavy receipts have resulted in material
additions to stocks at primary markets.
Wheat was yielding farmers 86.9c. a bushel in local markets on July 15,
2 times as much as
/
or nearly 50% more than on June 15, and almost 21
prices on July 15 a year ago. The advance during the month was influenced
by unfavorable prospects for the 1933 spring wheat crop, certainly of an
extremely short winter wheat harvest, dollar depreciation in terms of foreign
currencies, and the program to reduce the 1934 wheat acreage.
Cotton prices advanced 22% during the month ended July 15, the local
market price on the latter date being 10.6c. a pound, and the highest price
paid to farmers since August 1930. Factors in the advance were a high
rate of domestic mill activity, heavy exports, prospects for a material reduction in the cultivated acreage of the current crop, and the marked depreciation of the American dollar.
Potato prices more than doubled in local farm markets from June 15 to
July 15, averaging 97.9c. a bushel in mid-July compared with 49.4c. in voidJune. The advance was the most rapid recorded for farm products during
the month. The United States average farm price of eggs was 13.1c. a
dozen on July 15, up 30% from June 15.
Index of Farm Exports Higher, According to United
States Department of Agriculture.
Increased exports of cotton, fruit, lard and animal products in May carried the index for 47 farm products to 71
against 59 in April and 74 in May a year ago, according to
the Bureau of Agricultural Economics, United States Depart-
934
Financial Chronicle
ment of Agriculture. The Bureau, under date of July 3, further said:
Cotton exports in May totaled more than 627,000 bales, an unusually large
volume for that month. Substantial increases in exports to continental
European countries more than offset a slight decrease in exports to Great
Britain and a material reduction in exports to Oriental countries.
Wheat and flour exports reached a record low level in May, only 14,000
bushels of wheat being exported as grain, against more than 7,000,000
bushels in May of 1932. Flour exports were about the same as those a
year ago.
Bacon exports in May were the smallest for that month in 20 years, but
lard exports, although small for post-war months, were larger than in May
last year. Leaf tobacco exports also reached new low levels for May in the
post-war period, as did exports of dairy products. Fruit exports were in
line with the May volume in recent years.
Only fruit and lard were sent out in creater than pre-war volume in May,
the exports of most other farm products being substantially below pre-war
figures.
Farm-Mortgage Financing During 1932 at Lowest
Point Since 1929.
Volume of farm-mortgage financing during the year ended
Jan.1 1933 was the smallest of any year since 1929, according
to reports of mortgage bankers to the Bureau of Agricultural
Economics. United States Department of Agriculture. Reports from 16 Western and Southern States, representing
$13,000,000 in loan contracts, an announcement issued by the
Bureau, July 3, said, showed 9% new loans and 91% renewals of old loans. Twenty-five per cent. of reporting firms
made no new advances during the year. The announcement
continued:
record.
The average size of loans was smaller than in any previous year of
averaged
New loans averaged 34% of the value of the property and renewals
of
57%, the renewals of two-thirds of the firms ranging from 60 to 80%
insurance
farm value. About 61% of the new loans made were taken by life
13%
companies, 15% by savings banks, 11% by private investors, while
were retained by the mortgage bankers who handled the loans.
Ninety per cent. of all loans made or renewed during the year carried probeing
vision for reducing the principal during the life of the loan, only 10%
for
made for straight terms. Eighty-six per cent. of the loans were made
the
at
5.5%
were
terms of five years. Interest rates to owners of funds
avarloans
mortgage
first
close of the year, while rates to borrowers on
aged 6.3%.
Substantial amounts of loans held by reporting concerns in all States were
delinquent in payment, averaging 55% for the Dakotas and 36% for all
States reporting.
Industrial •Activity in Philadelobia Federal Reserve
District Shnwed Additional Gains During June
and First Part of July—Wholesale and Retail
Trade Improved Somewhat in June.
Large additional gains occurred in the industrial activity
In the Third (Philadelphia) District during June, and, according to the Federal Reserve Bank of that place, were well
maintained in the first part of July. "Output of manufacturers has continued to expand sharply since March." the
Bank continued, "although in July there has been some interruption largely through labor difficulties." In its "Business
Review" of Aug. 1 the Philadelphia Reserve Bank added:
Production and shipments of bituminous coal naturally have followed the
upward trend of manufacturing, as has the consumption of other industrial
June, after
fuels and power; output of anthracite increased exceptionally in
declines in recent months. The June level of manufacturing and coal mining
registerwhile
activity,
was considerably higher than a year ago. Building
years,
ing seasonal gains since early spring, continues below that of recent
small
although recently there has been some improvement in demand for
dwellings and industrial buildings in addition to public works.
Retail and wholesale trade showed some imnrovernent in June. and decreases in July sales do not appear to be larger than usual. Mercantile trade
as a whole, while above the record low in March, has not equaled the exceptional rise that has occurred in the industrial output. Stocks of merchandise at mercantile establishments have been on the increase during July.
Collections have improved considerably, which is also true in the case of
manufacturing. Commodity prices have advanced further, barring a decline
that occurred in the third week of July.
Industrial employment and payrolls in this District showed additional
large increases in June. According to indexes compiled by this Bank for 12
manufacturing and non-manufacturing occupations in Pennsylvania, which
In 1930 afforded jobs to about 2.278,000 workers, or over 61% of all persons
gainfully employed in the State, employment increased 4% and payrolls
rose over 9% as compared with May, continuing an upward trend since
March.
Manufacturing.
Demand for factory products has continued unusually active and prices
quoted by local manufacturers have advanced further. Sales of finished
goods have shown additional large increas.s during the month and have been
considerably in excess of last year's volume. This improvement has been
sufficiently broad to extend to most of the important industries in this
District.
Unfilled orders for manufactured. goods have been steadily on the increase
since March and the total volume about the middle of July was substantially
larger than a year ago in the maiority of reporting lines. Advance orders
from distributors have been especially heavy in the past two months, reflecting a strong upward tendency in commodity prices.
stocks of finished goods at representative manufacturing plants have been
comparatively low. Reports indicate that manufactured goods have been
moved to the distributing establishments as soon as they were produced.
Contrary to the usual time for shipments, deliveries of merchandise for fall
requirements have become active in July instead of August. Buying of raw
materials by manufacturers has been increasing in anticipation of higher
Aug. 5 1933
prices. As a result, stocks of these commodities have been increased additionally in recent weeks and as compared with last year.
Collections have risen in most lines as compared with the amount of settlements in the preceding month and a year ago. It is reported that purchasers are taking advantage of all discounts that are to be had in the present
market.
Factory employment and payrolls in this District showed additional large
increases from May to June. In Pennsylvania, for instance, employment rose
5% and payrolls 12%, and they were 7% and 13%, respectively, larger
than in June 1932, according to revised indexes computed by this Bank from
about 1,750 reports of concerns which in June employed 331,420 wage
earners whose payroll averaged over $5,393,760 a week. In the preparation
of these indexes 68 manufacturing industries were combined, each according
to its relative importance to the whole; the indexes are published in a
supplement to this bulletin.
About three-fourths of the reporting concerns showed that their working
time was expanded further by about 17% from May to June, evidencing
a continuance of the rising rate of factory operations. Incoming reports
for July indicate that there has been a leb-down in the rate of the increase
but the gains made in the previous three months appear to be well maintained.
The volume of production by factories in this District continued sharply
upward during June. This Bank's index number, which is adjusted for the
number of working days and seasonal variation, rose for the third successive
month, reaching about 69% of the 1923-1925 average as compared with a
record low level of 52% in March; this is an advance of about 33% in
three months, so that the present level of factory production is the highest
since early 1932, when the trend was downward.
The sharpest increase during June occurred in the output of fabricated
metal products, transportation equipment, building materials and chemical
products. Activity in groups comprising tobacco and leather products, and
radio and musical instruments alone showed either actual decreases or increases which were smaller than usual. Especially large gains over a year
ago took place in the production of metal, textile and leather products, while
the transportation equipment group was the only one whose rate of production was lower than in June 1932.
The majority of important lines of manufacture reported exceptional
gains in the output of their products during the month and virtually all
lines included in this Bank's index have had large increases since March,
gains ranging from 6% in printing and publishing to about 90% in steel and
some of the leading textile industries. Comparison of June figures with a
year ago offers a striking example of the unevenness of recent Increases;
for instance, the output of printing and publishing establishments was about
1% larger, while that of woolen and worsted mills was 126% greater. Increases between these two extremes vary, with the shoe, silk, coke, iron and
steel industries showing the largest gains.
The total output of electric power increased 2% from May to June, which
was a somewhat smaller rate of gain than was to be expected, but it was 8%
larger than a year ago. Industrial consumption of electrical energy, however, showed an unusual gain of 12% when adjustment is made for the
number of working days and seasonal changes; industries also used 15% more
energy in June this year than last, but for the year to date consumption was
still about 6% smaller. Consumption of such fuels as coal, oil and coke
likewise increased more than the usual seasonal rate estimated for June.
Distribution.
Mercantile trade continues 'well sustained, although the rate of improvement has been lagging considerably behind that in the field of manufacturing.
Freight car loadings in this section increased steadily for three months, and
In June were about 20% larger than a year ago. Sharp increases as compared with a year ago occurred in the loadings of all classes of commodities,
except livestock and its products. Additional gains during June and July
were also reported in the deliveries of merchandise by motor truck.
More than seasonal increases again took place during June in the sales of
five out of eight wholesale lines covered by our indexes. The most pronounced improvement was noted in drygoods, jewelry, and paper. Compared
with a year ago, sales were appreciably larger in all lines except drugs,
hardware, and jewelry. In the first half of this year business in electrical
supplies and groceries alone exceeded that In the same period last year.
There was some further improvement in several lines during the first half
of July. Prices quoted by the reporting wholesalers and jobbers have continued to advance.
Retail business in June held somewhat more than its usual level, and the
decreases in July appear to have been smaller than seasonal. Men's apparel
and shoe stores reported the most active business during June, although sales
of department stores in Philadelphia and women's apparel stores outside
of this city showed some improvement. Compared with a year ago, dollar
sales of department, apparel, shoe and credit stores combined were 6%
smaller, this adverse comparison being due to smaller sales of department,
shoe and credit stores. The spread in the difference between the sales of
this year and last has been growing narrower for the past three months.
Retail business for the first six months of this year was 17% smaller than
last year. Retail prices of general merchandise have advanced locally, and
as measured by the Fairchild index for the country, they were almost 3%
higher on July 1 than a month ago, but nearly 4% lower than on July 1 1932.
Retail food prices also showed additional increases during June.
Stocks of merchandise at mercantile establishments did not show much
change between May and June, although the decline in the case of retail
stores was smaller than usual. Preliminary inquiries, however, indicate that
there has been an appreciable increase in deliveries of merchandise for fall
requirements during July, a rather unusual development, as it is taking
place at least one month earlier than is to be normally expected. The rate
of stock turnover was over 4% higher in retail and 9% higher in wholesale
In the first half of this year as compared with the same period last year.
Mercantile collections show further improvement. Payments on accounts
at retail stores were 6% and at wholesale 3% more rapid in June than in
May. The rate of collections was also higher than a year ago by 3% in
retail and 4% in wholesale trade.
Sales of new passenger automobiles, as indicated by registrations in this
district, showed an exceptional gain in June from May, continuing the
upward trend since the low point in March, when this Bank's index number
reached 38% of the 1923-25 average, after allowance is made for the number
of business days and seasonal changes. The June index was 61 as compared
with 64 a year ago. The upward trend for May and June was contrary to
the usual tendency, as indicated by experience since 1923.
The amount of premiums paid for new life insurance showed little change
in the month, nor has there been much variation in the last three months,
our index number moving around 90% of the 1923-25 average. Insurance
sales were 15% smaller in the first half of this year than last, reflecting
general business conditions.
Financial Chronicle
Volume 137
Level or General Business in New England During June
Increased Materially Over May—Boston Reserve
Bank Reports Industrial Activity in Second
Quarter of 1933 Larger Than in First Quarter.
"During June," reports the Federal Reserve Bank of
Boston, "a material increase was recorded in the aggregate
level of general business in New England over May. Since
the May level was substartially higher than in April," the
Bank continued in its "Monthly Review" of Aug. 1, "industrial activity during the second quarter of 1933 exceedcd
that of the first quarter, and also was higher than during any
of the final three quai ters of 1932." The Bank went on to
say:
Nearly all industry in this District reflected the improvement in June
over May, even the building industry, which had been unusually slow,
was more active.
The volume of boot and shoe production in New England during June
exceeded that of the corresponding month a year ago by about 30%. and
during the first half of 1933 was approximately 7% greater than in the
first six months of last year.
Increased activity in the textile industry during June in this District
resulted in a rise of about 200% in cotton consumption over the June 1932,
volume, and a gain of about 40% during the first half of the current year
as compared with the corresponding period a year ago. Wool consumption
in New England mills during June and also during the first half year increased over the corresponding periods of 1932 even more than the percentage changes in cotton consumption. The increase in June amounted
to more than 231%, and for the first half year was over 65%.
Although the cumulative volume of new residential building contracts
awarded in this District during the first six months of 1933 was nearly 20%
lower than in the similar period last year, nevertheless, during May and June
a distinct improvement took place with the June 1933 volume approximately
50% higher than a year ago. The volume of commercial and industrial
contracts awarded during June increased nearly 8% over the amount a
year ago.
According to the Massachusetts Department of Labor and Industries,
the number of wage-earners employed in Massachusetts manufacturing
establishments increased 7.5% between May and June, aggregate weekly
payrolls increased 11.3%. and average weekly earnings per person employed rose 3.6%.
The amount of new ordinary life insurance written in New England
during June was 4% larger than in June 1932, although total amount during
the first six months of 1933 was about 10% less than in the correspon( ing
period last year. Registrations of new automobiles in this District during
June were nearly 8% higher than in that month a year ago.
Sales of reporting New England retail establishments during June were
5.4% less than in June 1932, while during the first quarter of the current
year the volume was nearly 30% less than in the corresponding period a
year ago and for the first half of 1933 was 18% less than in the similar
period of last year.
Lumber Orders Below Output for Third Consecutive
Week.
For the third consecutive week softwood lumber orders
booked at the sawmills during the week ended July 29 1933
were below production and for the first time in a year hardwood orders also fell below output, according to telegraphic
reports to the National Lumber Manufacturers Association
from regional associations covering the operations of 633
leading softwood and hardwood mills. Production during
the week at 210,541,000 feet was 14% heavier than the
average of the preceding eight weeks and orders at 159,646,000 feet were 30% below the average new business of
the same previous period. Shipments during the week
totaled 205,220,000 feet. The Association further states:
Not before in more than three years have softwood orders fallen so far
below production as in the last two weeks, during which these orders were
respectively 75 and 73% of output. All regions but Southern Pine and
Northern Hemlock shared in the decline during the week ended July 29.
Southern pine orders held up to 9% above production. The West Coast
regions showed the most unfavorable relationship, orders being 38% below
output; Western and Northern pine mills reporting respectively 25 and
29% below their production. The hardwood mills, while reporting orders
below output, showed only 4% decline.
MI regions but West Coast reported orders above last year, total softwood orders being 10% above the corresponding week of 1932 and hardwood
orders being over twice those of last year. Production was 85% above
that of the corresponding week of 1932 and shipments were 46% above
1932 shipments.
Unfilled orders declined about 3% from those of the previous week.
but were still 78% above those of a year ago.
Forest products carloadings at 28,704 cars during the week ended July 22
were the highest since June 1931, bringing the year's total 3% above similar
period of 1932. They were 13,055 cars above the same week in 1932 and
1,571 cars above corresponding week of 1931.
Lumber orders reported for the week ended July 29 1933 by 420 softwood mills totaled 137,025,000 feet, or 27% below the production of the
saint mills. Shipments as reported for. the same week were 177,056.000
feet, or 5% below production. Production was 186,987.000 feet.
Reports from 229 hardwood mills give new business as 22.621,000 feet.
or 4% below production. Shipments as reported for the same week were
28,164,000 feet, or 20% above production. Production was 23,554,000 feet.
Unfilled Orders.
Reports from 372 softwood mills give unfilled orders of 612,349,000 feet
on July 29 1933, or the equivalent of 23 days' production. The 516 idenorders as 674.300.000
tical mills (softwood and hardwood) report unfilled,
feet on July 29 1933, or the equivalent of 24 days' average production, as
equivalent
the
of 13 days' average
or
feet,
378.286.000
compared with
Production on similar date a year ago.
Last week's production of 401 identical softwood mills was 179,335,000
feet, and a year ago it was 100.219.000 feet; shipments were respectively
168,152,000 feet and 123.189,000; and orders received 132,790.000 feet
and 120.936.000. In the case of hardwoods, 173 identical mills reported
production last week and a year ago 19,000,000 feet and 6,760,000; ship-
935
ments 23,244,000 feet and 8,289,000; and orders 18,199,000 feet and
8,675,000 feet.
West Coast Movement.
The West Coast Lumbermen's Association wired from Seattle the following new business, shipments and unfilled orders for 185 mills reporting
for the week ended July 29:
Unshipped Orders.
Shipments.
New Business.
Feet.
Feet.
Feet.
Coastwise and
Domestic cargo
Domestic cargo
delivery _ _ _ _254,567,000
delivery_ _ _ _ 22.569,000
intercoastal_ 35,084,000
92,836,000 Export
Export
10,155,000 Foreign
19,358,000
83,769,000 Rail
33,895,000
Rail
23,741,000 Rail
Local
Local
7,392,000
7,392,000
431,172,000
Total
Total
63,857,000
Production for the week was 103.762.000 feet.
Total
95,729,000
Southern Pine.
The Southern Pine Association reported from New Orleans that for
103 mills reporting shipments were 5% above production and orders 9%
above production and 4% above shipments. New business taken during
the week amounted to 30,485,000 feet (previous week 24.853.000 at 101
mills); shipments 29.189,000 feet (previous week 29,713,000); and production 27.901,000 feet (previous week 30,591,000). Production was 48%
and orders 52% of capacity, compared with 54% and 44% for the previous
week. Orders on hand at the end of the week at 101 mills were 80,454.000
feet. The 101 identical mills reported an increase in production of 45%,
and in new business an increase of 30%, as compared with the same week
a year ago.
Western Pine.
The Western Pine Association reported from Portland. Ore., that for
109 mills reporting shipments were 10% below production, and orders 25%
below production and 16% below shipments. New business taken during
the week amounted to 38,964,000 feet (previous week 40,211,000 at 123
mills); shipments 46,429,000 feet (previous week 55,250,000); and production 51,713,000 feet (previous week 56,324,000). Production was 41%
and orders 31% of capacity, compared with 39% and 28% for the previous
week. Orders on hand at the end of the week at 108 mills were 141,825.000
feet. The 106 identical mills reported a gain in production of 51%, and in
new business a gain of 37%, as compared with the same week a year ago.
Northern Pine.
The Northern Pine Manufacturers of Minneapolis, Minn., reported production from 7 mills as 3,038.000 feet, shipments 4.058,000 feet and new
business 2,158.000 feet. The same mills reported production 282% greater
and new business 60% greater than for the same week last year.
Northe7n Hemlock.
The Northern Hemlock & Hardwood Manufacturers Association of
Oshkosh, Wis., reported softwood production from 16 mills as 573.000 feet.
shipments 1.651,000 and orders 1,561.000 feet. Orders were 19% of
capacity compared with 24% the previous week. The 15 identical mills
reported a gain of 664% in production and a gain of 52% in new business,
compared with the same week a year ago
Hardwood Reports.
The Hardwood Manufacturers Institute of Memphis. Tenn., reported
production from 213 mills as 22.393,000 feet. shipments 25,694.000 and
new business 21,579,000. Production was 49% and orders 47% of capacity.
compared with 46% and 54% the previous week. The 158 identical mills
reported production 181% greater and new business 110% greater than
for the same week last year.
The Northern Hemlock & Hardwood Manufacturers Association of
Oshkosh, Wis., reported hardwood production from 16 mills as 1,161.000
feet, shipments 2,470,000 and orders 1,042,000 feet. Orders were 18%
of capacity, compared with 26% the previous week. The 15 identical
mills reported a gain of 191% in production and a gain of 106% in orders,
compared with the same week last year.
Grain Prices on Chicago Board of Trade Again Pegged
Until Aug. 15 Following Temporary Discontinuance
of Minimum Prices.
During the past week the Chicago Board of Trade has
several times changed its course in the matter of minimum
grain prices. Under the latest action, taken July 31 by the
directors of the Board of Trade, no grain for future delivery
may ba traded in on the Board below the closing prices of
July 31, these minimum prices to be effective until and
including Aug. 15, and if any change is to be made effective
after that date at least three days' notice will be given. The
same ruling applies to hog products. The Chicago "Journal
of Commerce," Aug. 1, noting as above, the action of the
directors, went on to say:,
Directors of the Board of Trade ordered this following a long session
last night. It also was ruled that maximum advances in prices for to-day
shall be five cents on wheat, rye and barley, four cents on corn and three
cents on oats. Price limit on lard and bellies is 50 cents per hundred pounds.
Action Left to Grain Exchanges.
It is understood that Exchange officials were in close touch with Department of Agriculture Heads, and that the latter left it to the grain
exchanges to take whatever steps deemed necessary to stabilize the market.
Minimum prices placed in force at the beginning of last week were
rescinded later in the week, after the markets had rallied sharply from the
low points following the crash. At the same time the daily price fluctuations were narrowed and the restrictions undermined confidence to such
extent that many longs sold out for three successive days the markets broke
to the full extent of the price limitations.
Action of the grain markets since trading restrictions were imposed are
said to show plainly the difficulty of controlling a market. It demonstrates
that all interests are being hurt, most important of which is the hedger, and
the real purpose of a futures market is to provide hedging facilities.
Hedging orders for several millions of bushels of wheat, corn and oats
could not be executed in the markets yesterday because of price restrictions.
This means that country elevator operators will not be able to offer full
market prices, minus transportation costs and a small handling charge, for
grain that. farmers bring in to them. Without assurance that they can get
hedging protection on the grain they buy, they will be obliged to work on a
wider margin.
Fluctuations Limited.
Under present rules sanctioned by the Government, market fluctuations
in grain prices are limited to 5 cents per day, above or below previous close,
936
Financial Chronicle
on wheat, rye and barley, 4 cents on corn and 3 cents on oats. For three
successive days, including yesterday, prices have broken to the minimum
limits.
The difficulty is that once prices reach the minimum figures the buying
practically ceases and selling orders cannot be executed. A similar condition
would prevail if market trend were upward, in which case sellers would
disappear when maximums were reached.
Market trend of late has been downward because confidence has been
shaken by the enforced restrictions. Many longs are anxious to get out of
the market and few people want to buy for investment while such conditions exist. Volume of trade has fallen off sharply.
Price Decline Continues.
cent below the
esterday's decline in the market carried May wheat
minimum levels imposed when trading was resumed last week, and the other
deliveries within a fraction of that level. These minimum prices were
removed tha latter part of last week. Corn prices are now some 3 cents
below that level, while oats are still several cents above.
At the conference last week between Department of Agriculture officials
and grain exchange representatives, plans were proposed that aimed to keep
speculative activity under control. One feature of the plan was to limit price
movements.
In our issue of July 29, page 763, we referred to the
resumption under DOW restrictions of trading in grain and
provision futures on the Chicago Board of Trade following
two days' suspension. Incident to the resumption, Peter
B. Carey, President of the Exchange in a statement issued
July 22 said in part:
"Under the provisions of Rule 81, the Directors to-day ordered that beginning Monday, July 24 1933, and effective until further notice, there
shall be no trading during any day at prices more than 8 cents per bushel
above the average closing price of the preceding business day in wheat and
rye,5 cents in corn, and 4 cents in oats.
"It is further ordered that there shall be no trading in barley at prices
more than 5 cents above or below the average closing price of the preceding
business day, and that there shall be no trading during any day in provisions at prices more than 75 cents per hundred pounds above or below the
average closing prices of the preceding business day."
On July 28 minimum prices were abolished and a new
schedule covering maximum price changes was made effective; from a Chicago account, July 28, to the New York
•
"Times" we quote:
Commencing to-day, wheat, rye and barley may advance or decline only
5 cents a bushel from the close of the previous day, while corn may fluctuate
only 4 cents either way and oats 3 cents. These limits are in line with
recommendations made at the conference early this week in Washington
between representatives of the leading grain exchanges and the government.
Other American markets have issued similar limitations.
Effective also with to-morrow's trading and until further notice, price
changes in provisions will be limited to 50 cents a hundred pounds advance
or decline from the finish of the previous day.
Regular hours for trading in grain, provisions, stocks and cotton will
be resumed on the Board of Trade on Monday, but there will be no trading
In stocks on Saturdays until further notice and trading in cotton on Saturdays will be shortened one hour. Hitherto the cotton market hero has been
open one hour after those in New York and New Orleans closed.
With reference to the action of th? directors of the Chicago
Board in again making effective minimum prices, the "Wall
Street Journal" had the following to say in part in its Aug. 1
issue:
Wheat, which for two hours Monday could find no buyers as it hit the
daily minimum prices, with the most active December contracts at 95%
-day could find no sellers
cents, after the first five minutes of the session to
at the day's maximum price, with December at $1.00k.
For two hours Monday afternoon [July 31] grains went begging on the
counters of the Chicago Board of Trade with scarcely a trade made at the
minimum daily figures, registering a full five-cent decline for wheat for the
third consecutive session. Pessimism was rampant, despite bullish crop
news. Reports of further heavy distress selling to come were prevalent.
Overnight,directors of the Board of Trade voted to reinstate the minimum
restriction prices at which the grains could sell. Moreover, they did considerably better than their initial effort in conjunction with the Department
of Agriculture, setting Aug. 15 as the date on which minimum limits might
be first changed and making necessary a three-day notice in advance of
any such change.
As a result, the public flooded the pit with buying orders this morning.
Wheat prices spurted to the trading limit of five cents a bushel in the Chicago market. At that level trading ceased, sellers apparently envisioning
even further price gains. The grain market opened at 10:30. At 10.35,
the last of the few wheat trades was made. Brokers bidding the actual
limits of five cents a bushel on the upside were unable to procure any wheat
for their clientile. Thus the market which two weeks ago did 239,000,000
bushels of wheat in one day did probably less than 1,000,000 to-day.
Professionals, including many of the prominent seaboard operators, were
thwarted in their efforts to procure some of the identical grain that they
would not buy Monday night [July 31] at the minimums, having bid up
only about one cent. These interests then rushed into the Winnipeg
market and bid deliveries there up about nine cents a bushel. There are
no price restrictions in the Dominion exchange.
Export Aid Sought by Pacific Northwest Wheat Industry—Movement of United States Wheat to Orient
Possible.
A new export movement of United States wheat to the
Orient may be one result of the recent grain conference held
in Washington (referred to in our June 29 issue, page 789),
officials of the Agricultural Adjustment Administration revealed July 27, we learn from an announcement issued by
the U. S. Department of Agriculture which continued:
While grain exchange representatives discussed a code to eliminate existing market abuses, spokesmen for Pacific Northwest grain interests informed George N. Peek, Administrator of the Adjustment Administration,
that a serious condition impends in that region as a result of a new crop
coming to market with seaport terminal storage already congested with
carryover grain.
Aug. 5 1933
The western representatives reported two alternatives to remedy the
situation. One lies in exports, logically to Oriental markets. The other
is shipping grain via the Panama Canal to Gulf and Atlantic United States
ports, there to compete with midwestern grain stocks. The Adjustment Administration officials were informed that with present prices, the Pacific
wheat handlers could place their wheat in Eastern United States markets
under prices prevailing there for midwestern stocks. They pointed out that
this would result in backing up wheat on Chicago and other markets with
a corresponding effect on price.
The Western representatives urged action under Section 12 (b) of the
Agricultural Adjustment Act which provides that "in addition to the foregoing (rental and benefit payments) the proceeds derived from all processing
taxes imposed under this title are hereby appropriated to be available to
the Secretary of Agriculture for expansion of markets and removal of surplus
agricultural products."
In addition to Reconstruction Finance Corporation credit already extended
to finance exports to the Orient, the Agricultural Adjustment Administration
has provided for the possibility of using proceeds of processing taxes to aid
in financing exports. The Administration is thus prepared to aid exports,
if it finds that it can substantially improve wheat prices in this country by
so doing.
Sale of surplus Pacific Northwest wheat would not only be an advantage
to the growers of that region, but would react to the general benefit of all
U. S. wheat growers by relieving the pressure on markets, Mr. Peek indicated.
Comments of F. D. Farrell of Kansas Agricultural
College on Federal Farm Adjustment Program—
Success of Plan Will Probably Mark End of Era of
Extreme Individualism in Agriculture.
The Federal farm adjustment program is partly guided by
the belief that export of agricultural commodities will not
soon recover its volume of five or ten years ago, in the opinion
of F. D. Farrell, President Kansas Agricultural College, writing in the August issue of the American "Bankers Association Journal." Mr. Farrell says:
"Nobody knows whether the farm adjustment program will succeed. Its
sponsors describe it frankly as an experiment. It seeks to socialize agriculture at least to the extent that farmers, in what is believed to be the
public interest, will restrain their production activities and that processors,
distributors and consumers will contribute something toward paying farmers
for exercising this restraint. The adjustment programs definitely are based
on the fact that prices are determined primarily by supply and demand.
They also are based on the assumption that the export business in agricultural commodities will not soon return to its volume of five or ten years
ago.
"The plan offers wheat price insurance for 1933, 1934 and 1935, for the
domestically consumed portion of the wheat crop. The insured price is to
be sufficiently high to give the domestically consumed portion of the
wheat
crop pre-war purchasing power. If the plan is as effective as its
sponsors
hope it will be, the reduction in supply may influence wheat prices so
that
the entire wheat crop will have pre-war purchasing power.
"If the adjustment program succeeds, its launching probably will
mark
the end of an era of extreme individualism In agriculture in the
United
States.
"Recent fundamental changes led Secretary Wallace to say,
'what we
really have to do is to change the whole psychology of the people
of the
United States.' This is a large order. It involves the whole
program of
farm adjustment as well as the larger national economic program,
of which
farm adjustment is a part. If the people decline to participate
in the program to the extent necessary to give the experiment a fair trial,
we shall
never know whether farm adjustment as now proposed would have
succeeded
or not if it had been given a fair trial."
Secretary Wallace Delays Decision on Wheat
,
Acreage
Reduction—Course Dependent on International
Action.
Secretary of Agriculture Wallace stated on Aug. 2 that he
had not come to any final conclusion as to the course which
this country would follow if the other wheat exporting nations
failed to join us in a wheat reduction campaign, in answer
to inquiries concerning his statement yesterday postponing
the wheat acreage reduction announcement until August 24.
Only if the present attempt to secure international action
should fail will a separate domestic program be undertaken,
he said, adding:
"The program as to facilitating the export movement of our surplus
wheat,and the program as to the amount of acreage reduction, if any, which
would then be called for, would both be determined in the light of conditions
at that time."
London Wheat Conference Adjourns Until August 21.
The London wheat conference recessed on July 27 until
Aug. 21 after being unable to reach a definite agreement
principally it is said, because of Australia's refusal to join
with the United States, Canada and Argentina in a curtailment program. Associated Press accounts from Washington
August 1 stated:
A few hours after the recess announcement was made at London, Mr.
Wallace told newspaper men here that he would announce the acreage
reduction figure for the allotment plan "within ten days."
It was disclosed Saturday July 29 that delegates remaining at London
after the recess had revived hope for a definite agreement and had cabled
Mr. Wallace requestingliim to postpone his decision.
From London July 30 cablegrams (Associated Press)
stated:
Negotiations for a wheat restriction scheme took a turn for the better
over the week-end and prospects were brightened for an eventual agreement adapting production of the world's principal staple to demand.
If the "big four" nations—the United States, Canada, Australia and
Argentina—had maintained the solidarity of the previous weeks at their
Volume 137
Pinancial Chronicle
final meeting last Thursday, it was understood in informed circles that a
agreement virtually satisfactory to all, the exporters and the producers,
might have been reached. There was just a suggestion of a rift, it was
explained, and an adjournment until Aug. 21 was agreed upon.
Since that time there have been informal conversations which were
understood to have consolidated the "big four" more strongly than ever.
Canada and Argentina were said to strongly favor a restriction of acreage,
while Australia was declared to be willing to cut exports.
Frederick E. Murphy of Minneapolis, one of the American delegates,
plans to leave, probably Tuesday night, on a trip which will take him first
to Berlin and then to Prague, Rome and Paris, with a view to lining up
importers in preparation for resumption of the discissions.
Henry Morgenthau Sr. of the United States delegation sailed yesterday
on the Berengaria for New York, leaving the negotiations in Mr. Murphy's
hands. Mr. Murphy admitted he had cabled Secretary of Agriculture
Wallace in Washington, but would not reveal the contents of his message
and said a reply had not been received.
European Wheat Output Close to That of 1932.
According to a wireless message from London July 29 to
the New York "Times" which added:
The European wheat situation is described as good. In most countries
the crops are expected to equal if not exceed those of last year, and the
prospective Continental demand is likely to be moderate.
Both France and Germany seem willing to sell the new crops for export.
Russia also is tentatively in the market, although she will ship on nothing
like the scale of two or three years ago, according to the information that
has been received here.
Dr. H. C. Taylor Named by President Roosevelt to
Represent United States on Permanent Committee
of International Institute of Agriculture at
Rome, Italy.
Dr. Henry C. Taylor, formerly of the Department of
Agriculture, has been designated by President Roosevelt
to represent the United States on the permanent committee
of the International Institute of Agriculture at Rome,
Italy. In reporting this July 24, a Washington despatch
to the New York "Times" added:
His appointment revives an office which has remained unfilled for several
years. Dr. Taylor, who is one of the country's leading agricultural economists, served in the Department of Agriculture from 1919 to 1925.
Review of New York Coffee & Sugar Exchange for
July -Most Active July on Exchange Since 1929
-Volume of Sugar and Coffee Trading.
Und,r date of Aug. 1 the review of tne New York Coffee
& Sugar Exchange, Inc., for July was issued as follows:
The past month was the most active July since 1929 on the New York
Coffee & Sugar Exchange. Volume of trading in both coffee and sugar
showed considerable improvement over last year.
The sugar turnover for July was 886,600 tons, compared with 467.700
tons in July 1932. The volume of sugar trading so far this year is 4,685,400
tons, compared with 3,593,650 tons for the same period in 1932.
The volume of coffee trading in July was 1,391,500 bags, compared
with 197,250 bags in July 1932. So far this year the coffee turnover is
3,347,250 bags, compared with 2,197,500 hags.
Review of New York Cocoa Exchange for July-Trading
Volume Largest ir History of Exchange.
The following review of the New York Cocoa Exchange
during July was issued by the Exchange on Aug. 1.
Volume of trading on the New York Cocoa Exchange during the month
of July was greater than any previous month in the history of the New
York Cocoa Exchange. A total of 10,560 lots, or 141,504 tons, changed
hands on the trading floor of the Exchange. This amount is seven times
the volume of July 1932, which was 1,353 lots, or 18,130 tons. The
month's turnover is equal to more than a qaurter of the annual world's
production of cocoa.
Although prices fluctuated in a wide range during the period, prices
were almost unchanged as the month closed.
Sale of Farm Credit Administration's Holding of
Brazilian Coffee on Aug. 1.
The Farm Credit Administration announced Aug. 2 that
the New York Coffee Office of The Grain Stabilization Corporation on Aug. 1 1933, sold 62,500 bags of Santos coffee, at
prices ranging from 8.65 cents to 9.05 cents per pound. The
announcement said that this sale constitutes the regular
monthly allotment offered to the trade on sealed bids of
coffee acquired from the Brazilian Government in 1931 in
exchange for American wheat.
At the last previous sale (June 28, noted in our issue of
July 1, page 33) 62,500 bags of Santos coffee were sold at
prices ranging from 8.55 cents to 9.15 cents per pound.
Domestic Cotton Textile Industry Reached Record
Activity During June, According to United States
Department of Agriculture-Continued During
First Half of July.
Activity in the domestic cotton textile industry reached
the highest levels on record during June, and apparently continued at these levels during the first half of July, according
to the Bureau of Agricultural Economics, United States Department of Agriculture, reporting on world cotton prospects.
Under date of July 27 the Bureau said:
United States cotton consumption in June was about 700,000 bales or
more than twice as much as in June 1932, and 214 times the low
consump.
937
tion of July last year. Textile sales have been rather large during recent
weeks, but probably have been somewhat below the record output.
The high level of cotton textile production in May, June and July is attributed to uncertainties as to the future price level and anticipation of increased
costs. Activity has increased somewhat in the last two months in most
foreign countries.
The 1933 cotton acreage in Egypt is officially estimated by the Egyptian
Government at 1,873,000 acres, or an increase of 65% over the 1932 acreage,
and 7% over the 1931 acreage.
The Bureau reports that present indications are that the
acreage in China is larger than last year.
Domestic exports in June, the largest for any month since
January, were continuing relatively large during the first
half of July, and were the largest for the month of June
since 1919.
Increase in World Use of American Cotton During
Past 12 Months-Consumption Approximated 14,132,000 Bales.
World consumption of American cotton during the 1932-33
season, that is, the past 12 months, approximated 14,132,000
bales, according to the preliminary estimate of the New York
Cotton Exchange Service, issued July 31. This is the largest
world consumption of American cotton since the 1928-29 season, when world spinners used 15,226,000 bales of the American staple. Last season, world consumption totaled
12,506,000 bales, two seasons ago 11,113,000, and three seasons ago 13,021,000. The Exchange Service also said:
The large increase in consumption of American cotton during the past
12 months was due to a number of factors. In the United States, cotton
consumption has been of record-breaking proportions during the past three
months, partly as a result of the sharp upturn in general business activity
and partly as a result of rapidly rising prices. Abroad, general business
activity has shown a slight upward tendency in the aggregate in recent
months, but the chief reason for the large use of American cotton by foreign
spinners was the low price of the American staple relative to foreign growths,
brought about by the relatively large proportion of American cotton and
relatively small supply of foreign cottons in the world supply of all growths.
Strike of 3,000 Dyeworkers Ended After Wage Agreement Is Reached-Seven Silk Dyers Are Accused of
Violating New Code.
A Strike of more than 3,000 employees of the Textile Dyeing and Printing Co. of America, Inc., and of several smaller
plants at Fairlawn, N. J., which began on July 26 in protest
against the alleged failure of the companies to adhere to the
silk dyers and printers Code, ended on July 31 when the
strikers returned to work under the terms set forth by the
employers. It was said that the decision to terminate the
strike was in part the result of a private meeting on July 28
when James A. Moffitt of the United States Department of
Labor, •as conciliator, told the strike representatives that
their actions could not be regarded in a patriotic light and
that continuance of the strike would defeat the purpose of
the NIRA. The workers, who were not unionized, had demanded increased wages.
Further difficulties in insuring smooth operation of the
silk dyeing Code were experienced on July 31 when Robert
Salembier, Secretary of the Institute of Dyers and Printers,
announced that 12 investigators had been appointed by the
Institute to determine how the Code was being carried out.
The investigators reported that seven plants were operating
after the closing hour made mandatory by the Code. Mr.
Salembier said that he had sent their names and a full report to General Hugh S. Johnson, Recovery Administrator.
The Code went into effect on July 24.
July Raw Silk Imports 72.9% Higher than in Same
Month Last Year-Deliveries to American Mills
Up 16.2%-Inventories Increased.
Raw silk imports during July 1933 were 7.29% higher
than during July 1932, according to the Silk Association
of America, Inc. July deliveries of raw silk to mills showed
an increase of 16.2% as compared with the same month of
last year. Raw silk stocks at warehouses on July 31 were
51,684 bales as compared with 50,721 bales on July 31 1932.
July 1933 imports of raw silk were 62,348 bales as compared
with 47,435 bales during the previous month and 36,055
bales during July 1932. Deliveries to mills during July 1933
were 44,597 bales as compared with 53,627 bales during the
previous month and 38,382 bales during July 1932. The
Association's report follows:
RAW SILK IN STORAGE.
)As reported by the principal public warehouses in New York City and
Hoboken.)
Figures in BalesEuropean. Japan. AU Other. Total.
In storage July 1 1933
1,512
31,080
1,341
33,933
Imports month of July 1933.x
3,833
52,665
5,850
62,348
Total available during July 1933
In storage Aug. 1 1933.z
5,345
3,076
83,745
44,843
7,191
3,765
96,281
51,884
Approximate deliveries to American mills
during July 1933_ y
2,269
38,902
3,420
44,597
Financial Chronicle
938
SUMMARY
Imports During the Month.:
Storage at End of Month.:
1933.
1932.
1931.
1933.
1932.
1931.
53,114
23,377
22,239
41,134
44,238
47,435
62,348
52,238
53,574
38,868
30,953
34.233
31,355
36,055
61,412
58,859
58,775
47,422
45.453
49,294
47,827
57,391
29,446
42.234
46,825
37.315
53,411
44.040
70.490
67,999
50,617
69,747
60,459
43,814
43.033
40,125
33.933
51,684
62,905
70,570
62.675
57,349
59,159
53,043
50,721
52,223
49.393
54,435
57,932
62,937
51,814
45,399
47,407
35,497
32,688
37.352
29,921
41,878
38,099
49,921
67.275
89,480
Total
293,935
Average, monthly.. 41,991
547,195
45,600
605,919
5,),.193
Januar ,
Februar9
March _
April_
May _ •
June_ •
July.
August
Septem'
ter
October
Novem )er
Decem er
Approxinude Deliveries
to American Mills.y
January
February
March
April
May
June
July
August
September
October
November
December
Total
Monthly average
43.971
57,315
45,393
Approximate Amount of Japan
Silk in Transit at Close
of Month.
1933.
1932.
1931.
1933.
1932.
1931.
46,204
32.665
38,934
41,910
47,151
53,627
44,597
58,793
45,909
46,761
35.779
32,923
37,466
38,382
59.905
59.694
53,703
43,955
40,548
• 55,910
54,242
55,333
41,356
45.073
42,161
44.746
46,454
53,819
56,668
50.645
48,432
25,700
28.100
39,100
40.200
42.300
41,500
38,600
48,500
31,000
31,100
42,200
43.400
42,800
44,700
50,200
51,400
37,700
37,700
21,300
24,400
36,900
33,400
41,600
40,500
53,200
59,700
50.800
53,900
305,08
43,584
553,818
46,151
594,889
49.574
39.500
40.054
40.958
28,800
34,800
30,800
:Covered by European manifests Nos. 30 to 34 inclthive: Asiatic man tests Nos.
126 to 150 Inclu Jive. y Includes ra-exports. z Include.; 3.013 bales hell at terminal
at end of month. Stocks at warehouses include Commodity Exchange, Inc., certified
stocks, 690 bales.
Figures of World Rayon Production Show United
States Produced from 25 to 30% of World Output
During Last Decade-Japan Expected to Rank
Second in 1933.
Compilation of the world's rayon production figures has
been undertaken for the first time by the Tabize Chatillon
Corp. and the record is included in the current issue of the
"Textile Organon," published by the company. The compilation shows that world production aggregated 515,390;000
pounds for 1932, compared with 454,765,000 pounds in 1929,
and with 76,765,000 pounds in 1922. An announcement,
issued with regard to the new compilation, continued:
The compilation reveals several interesting facts. First, that the world
production of rayon has increased each year with the single exception of
the 1929-30 comparison. Second, the United States has produced from
25% to 30% of the world total in the last decade. Third. the rapid ascendency of Japan as a rayon producer. There is little doubt but that in 1933
Japan will be the second largest producer of rayon. The fourth point of
interest is the closeness with which the British. German, Italian, and
French rayon production has approximated each other in the last decade.
lkyroductIon by countries for the years given follows:
POUNDS.
1929.
1932.
131,000.000
70.500.000
69,900.000
69,750,000
61.000.000
47,300.000
19.500.000
9,600.000
8.800,000
7.100.000
6,600.000
5,700,000
8,640.000
-515,390,000
United States
Italy
Japan
Great Britain
Germany
France
Holland
Belgium
Switzerland
Canada
Poland
Czechoslovakia
All others
Total
119,500,000
71,000,000
27,000.000
58,250,000
58,300.000
49,300.000
20,900.000
16.000.000
11,600.000
3,750,000
6.000.000
4,625,000
10,540,000
-454,765,000
1922.
24,400.000
5,700.000
525.000
14,500.000
11.000.000
6,250.000
2,500,000
6,600.000
1,900.000
485.000
625.000
2,280,000
78,765,000
World production by years follows:
1932
1931
1930
1929
1928
.1927
515,390,000
496,270,000
442,690,000
454.765,000
344,710,000
309,620,000
1926
1925
1924
1923
1922
224,850,000
190,340,000
145,950.009
103,030,000
76,765,000
1921
1920
1919
1913
1917
66,000,000
55,000,000
44,000.000
35.200,000
34,100,000
Aug. 5 1933
May production was about 8.500 cases greater than in April when 65,965
cases were produced, and compares with 54,047 cases produced in May 1932.
The report indicated that the increased May production was a continuation of the general expansion of the rayon industry in Japan, which is
placing that country among the leaders in the world.
At the present rate of production. Japan would produce about 90,000,000
pounds of rayon in the nett 12 months. In 1932, the United States, which
Is the world's leading producer, had an estimated output of 131,000.000
pounds. In the same year, both the United Kingdom and Italy produced
about 70,000,000 pounds of rayon.
Approximately 90% of the entire output of Japanese rayon mills is consumed domestically.
Miners in Eastern Ohio Receive Pay Increase.
Associated Press advices from Martins• Ferry, Ohio, July
28, said that a majority of the Eastern Ohio bituminous coal
mines on July 28 announced a 20% wage increase, effective
July 29. About 1,000 miners will benefit the advices said.
Wages Raised 10% by Stutz Motor Car Co.
Colonel E. S. Gorrell, President of tile Stutz Motor Car
Co. of America, informed employees of a 10% wage increase
on July 28, we learn from advices from Indianapolis by the
Associated Press. Colonel Gorrell at a mass meeting of the
employees expressed hope that this increase could be followed
by others later.
Saw and File Manufacturing Concern Announces
Second Pay Rise.
Henry Disston & Sons, manufacturers of saws and files,
announced on July 28 a second wage increase for over 2,000
employees, to take effect Aug. 1, according to Associated
Press. advices from Philadelphia July 28. Combined with a
previous one effective July 18, it will raise piece-work rates
and salaries a total of 15%.
Studebaker Corp. Increases Pay 15%-Complying
with Code of Automobile Industries.
Announcement was made on July 31 that a 15% increase
In the hourly scale for all employees of the Studebaker Corporation will go into effect Aug. 1, in accordance with the
NIRA Code of the nation's automobile industries. With regard to the increase, Associated Press advices from South
Bend, Ind., July 31, said:
The pay-roll increase will affect approximately 6,800 plant workers and,
In addition to the industrial wage boost, all clerical help receiving $35 a
week or less will receive a 10% increase. The minimum weekly salary will
be $14 in the clerical departments.
Wages Increased by Steel Firms.
An increase in salaries averaging 15% by the Republic
Steel Corporation will benefit 2,300 workers, the company
reported July 31, we learn from advices from Youngstown,
Ohio, to the New York "Times" of Aug. 1. The Carnegie
Steel Co. and the Youngstown Sheet and Tube Co. also have
advanced salaries 15% the advices said.
Forty-Hour Week Adopted by Worsted Division of
Amoskeag Mfg. Co. in Accordance with New
Code.
On July 31 the worsted division of the Amoskeag Manufacturing Co., the nation's largest textile firm, began operation under the new Code calling for two shifts and 40-hours
a week, according to United Press Advices from Manchester,
N. H., July 31. The minimum wage the advices said, will be
$14 a week, with an increase promised when the differential
has been adopted. About 3,000 operatives are affected.
Petroleum and Its Products-Oil Trade Unable to
Agree on Code of Fair Practice-Secretary of Interior Ickes Will Draw Up Code-Widespread
Slashes in Crude Oil Prices.
Rayon Yarn Prices Increased.
oil men and National Recovery Administration
With
The du Pont Rayon Co. on July 27 advanced rayon yarn officials unable to reach a satisfactory basis for further
150
the
brings
advance
The
pound.
prices 5 to 8 cents a
negotiations toward the formulation of a code of fair pracdenier 24 to 40 filament to 65 cents a pound for first quality tices in Washington conferences during the week, the situacprices,
,her
0
cents.
85
to
-denier
100
skeins and the
ation culminated in the appointment of Secretary of the
cording to the New York "Times" of July 28, are:
Ickes to-day (Friday) to write a code of fair comInterior
-filament,
Seventy-five-denier. $I: 125-denier. 72 cents and 150-denier 60
than these prices.
petition for the industry.
70 cents. Duponaise yarns are 5 cents a pound higher
event
The situation was deadlocked with representatives of the
Prices on undelivered portions of orders are subject to change in the
producers,
•of modification of the code of the rayon and synthetic yarn
oil industry and NRA officials unable to make any progress
19.
July
submitted
towards agreeing on a code when Ickes was handed the
of compiling a code that would be effective.
assignment
.Japanese Continue to Expand Production of Rayon
Secretary Ickes has been in close touch with the matter since
May Output at New High.
is felt in oil and adminisProduction of rayon in Japan during May established a new the conferences first started and it
a
record total of 74,524 cases of 100 pounds each, it is indicated tration circles that he would be able to devise code which
effect.
could
into
be
put
Division
Textile
Department's
Commerce
the
to
in a report
The one factor holding back any hope of the oil men
irom Trade Commissioner Paul P. Steintorf, Tokio. The
reaching an agreement was the controversy within the
Department in making this known July 18 added:
Volume 137
industry itself on price-fixing. With one faction siding with
the factors averring that price-fixing was a necessary companion of cost-fixing, another faction was equally determined to prevent any provision in the code which would
entail the Government establishment of official price
levels for petroleum products.
Washington rumors are that James A. Moffett, who
recently resigned as Vice-President of the Standard Oil Co.
of New Jersey, to accept a position with the Administration,
will play a major part in aiding Secretary Ickes with the
writing of the code and will be named as head of the department supervising the industry under the code, if it is approved by the industry and Administration. It is known
that Moffett favors Federal regulation and price control.
Earlier in the week, the forces fighting any attempt at
Federal price-control enjoyed a temporary victory when
General Hugh S. Johnson announced that he had drawn
up a trade code which omitted any reference to price-fixing.
However, this aroused such bitter dissension that the ensuing
deadlocked resulted in the naming of Ickes to handle the
matter.
Aligned with Walter C. Teagle, President of Standard
Oil Co. of New Jersey and also Chairman of the Advisory
Committee aiding General Johnson, in the fight against
Federal price fixing was the Standard Oil Co.of Indiana,the
Gulf Oil Co., The Texas Oil Co. and a group of independent
operators led by Jack Blalock of Marshall, Texas.
Favoring price control as necessary if the industry is to
increase employment and raise wages were H. R. Kingsbury,
President of the Standard Oil Co. of California, Harry F.
Sinclair, President of the Consolidated Oil Corp., Wirt
Franklin, prominent Oklahoma independent operator and
other factors in the industry.
The brief attempt of independent oil forces to maintain
a higher price schedule than that posted by the major oil
factors failed this week with the Sinclair-Prairie Oil Marketing Co. admitting that it could no longer maintain a 75-cent
top for mid-continent oil with the Standard Oil Co.'s of
New Jersey and Indiana paying only 62 cents a barrel top
and posted a new schedule conforming to that maintained
by the fcrmer two companies. Following the Consolidated
Oil Corp. subsidiary in this move were the Continental Oil
Co., which, with Sinclair, was instrumental in posting the
higher prices last month, Empire Pipe Line Co., Cities
Service subsidiary, and the Barnsdall Oil Corp. The Magnolia Petroleum Co., Standard of New York subsidiary, also
swung into line with the lower prices.
Blaming the failure of the two Standard Oil units to meet
the higher level as the reason for the price slashes, H. F.
Sinclair, President of Consolidated Oil, said that "we have
no alternative," and pointed out that hundreds of thousands
of dollars had been spent in the vain effort to maintain the
higher price scale.
The latest price battle was a repetition ot the struggle last
fall of the same group of independents to force the Standard
units to increase prices beyond the $1 top to $1,12 which
suddenly ended in December with complete victory for the
major units which saw a price top of 70 cents a barrel
established.
Following on the heels of these slashes came reductions of
13 cents a barrel in Illinois, Princeton and western Kentucky
crude oil prices with Lima crude reduced 10 cents a barrel,
posted by the Ohio Oil Co.
After an advance of 5 cents a barrel last Saturday had
pushed the price of Corning grade crude oil to 95 cents, the
South Penn Oil Co. suddenly slashed the prices 10 cents a
barrel to-day (Friday) to 85 cents a barrel.
From Washington came news of the first attempt of court
restraint of President Roosevelt's regulations preventing the
inter-State shipment of "hot" oil with a group of Texas
independents filing suit in the District of Columbia Supreme
Court asking that Secretary of the Interior be prevented
from enforcing this ruling on the ground that it is unconstitutional. An injunction was asked for this purpose.
Secretary Ickes was given until Aug. 15 to show cause why
such an injunction should not be issued.
Price changes follow:
July 29.-The South Penn Oil Co. advanced Corning grade crude oil
5 cents a barrel to 95 cents.
Aug. 2.-The Sinclair-Prairie 011 Marketing Co., subsidiary of the
Consolidated Oil Corp., slashed its price schedule 13 to 25 cents a barrel
to a 62-cent peak. The Empire Pipe Line Co., Cities Service subsidiary,
Barnsdall Oil Corp. and the Continental Oil Co. met the new price list.
Aug. 3.-The Magnolia Petroleum Co., subsidiary of Standard Oil Co.
of New York, met the reduced schedule posted by Sinclair and others named
above.
939
Financial Chronicle
Aug. 3.-Reductions of 13 cents a barrel in Illinois, Princeton and western
Kentucky crude oil and 10 cents in Lima crude were posted by the Ohio
Oil Co., effective as of Aug. 1.
Aug. 4.-The South Penn Oil posted a reduction of 10 cents a barrel in
the price of Corning grade crude oil to 85 cents a barrel.
Prices of Typical Crudes per Barrel at Wells.
(All gravities where A. P. I, degrees are not shown.)
$2.00
Bradford, Pa
.85
Corning, Pa
.77
Illinois
.72
Western Kentucky
Mid-Cont., Okla., 40 and above___ .62
Hutchinson, Tex., 40 and over____ .41
.41
Spindletop, Tex., 40 and over
.50
Winkler, Tex
.30
Smackover, Ark., 24 and over
$ .81
Eldorado, Ark., 40
.50
Rusk, Tex., 40 and over
.50
Salt Creek, Wyo.,40 and over
.40
Darst Creek
.90
Midland District, Mich
.80
Sunburst, Mont
Santa Fe Springs. Calif.,40 and over 1.14
.96
Huntington, Calif., 26
1.82
Petrolia, Canada
REFINED PRODUCTS-GASOLINE PRICES HOLD STRONG
DESPITE CRUDE OIL PRICE CUTS-TANK CAR GASOLINE
ADVANCED TO 6h CENTS BY SEVERAL FACTORS-OTHER
ITEMS FIRM.
The slashes in crude oil prices affecting all major oil producing areas east of the Rocky Mountains had little effect
on local refined products pi ice lists with bulk gasoline still
strong as several factors advanced tank car prices here
3d-cent a gallon to 63j cents during the week.
Standard of Jersey announced a contract price of Oi
cents a gallon Tuesday for tank car gasoline, at the refinery,
for delivery over the following 10 days. Officials of the
Sinclair Refining Co., subsidiary of the Consolidated Oil
Corp., announced a similar advance with a price of 63-i cents
a gallon on tank car gasoline above 65 octane and 6 cents a
gallon below 65 octane at New York, Philadelphia, Tiverton,
R. I., Portsmouth, Charleston, Jacksonville and Tampa.
On Monday Standard Oil of Kentucky had boosted the
1 -cent a gallon for
price of 65 octane gasoline and above 4
tank ear lots at Savannah, Jacksonville and Tampa, establishing market in these areas at 6 cents a gallon.
Local demand for bulk gasoline continues strong and some
factors in the industry feel that further advances in the near
future are in prospect although it was admitted that the
sharp slashes in crude oil prices may prove to have a hampering effect on the strong sentiment noted in local gasoline
trade circles recently. Again, easiness in the Gulf markets
developing in the latter part of the week had a slightly unsettling effect on the local market.
While kerosene consumption at the present moment is
seasonally low, a revival of interest in futures commitments
was shown during the week and several iefiners are reported
to have received good inquiries. While prices continue unchanged at 5 cents to 53j cents a gallon for water white
kerosene at the refiners, any buying movement will more than
likely move prices higher, it seems indicated.
Grade C bunker oil moved along at a satisfactory rate
during the week, holding unchanged at 85 cents a barrel, at
the refineries, while Diesel oil continued in good demand at
$1.75 a barrel,same basis.
Pennsylvania lubricants closed last night (Friday) firm
but quiet after moving in a fairly good manner earlier in the
week.
Price changes follow:
July 29-Standard Oil of Kentucky posted an increase of h-cent a
gallon for 65 octane and above gasoline at Savannah, Jacksonville and
Tampa, establishing the market at 6 cents a gallon in tank car lots.
Aug. 1-Standard Oil of New Jersey advanced the price of 65 octane
and above gasoline h-cent a gallon to 6h cents, tank car lots, at the
refinery, for delivery over the following 10 days. The Sinclair Refining Co.,
Consolidated Oil subsidiary, met the advance. The latter company also
made the h-cent advance effective at Philadelphia, Tiverton. R. I..
Portsmouth, Charleston. Jacksonville and Tampa, with below 65 octane
held at 6 cents a gallon at these points and New York.
New York
Atlanta
Baltimore
Boston
Buffalo
Chicago
Cincinnati
Gasoline, Service Station, Tax Included.
New Orleans
.$.19
Cleveland
$.182
.1954
.203
.182
.189
.185
v.19
Denver
Detroit
Houston
Jacksonville
Kansas City
Minneapolis
$.183
.135
Philadelphia
San Francisco:
Third grade__ __ .151
Above 65 octane_ .195
.215
Premium
.145
St. Louis
.195
.156
.175
.20
.14
.159
*Less 2 cents cash discount.
Kerosene, 41-43 Water White, Tank Car. F.O.B. Refinery.
Chicago
New York$.02h-.03h I New Orleans, ex---S.0334
.044-.034
Tulsa
(Bayonne)-$.05-.054 I Los Aug.,ex .044-.06
.03
North Texas
N. Y.(Bayonne)Bunker C
these 28-30 D
Fuel Oil, F.O.B. Refinery or Terminal.
$ .70
[Gulf Coast C
California 27 plus D
$.75-1.00 Chicago i8-22D_ .42h-.50
$ .85
.85
.70 Philadelphia C
1.75 New Orleans C
Gas Oil, F.O.B. Refinery or Terminal.
N.Y.(Bayonne)-
!Chicago28 plus G 0_3.0354-.041 32-36 G 0
'Tulsa
$.0134
$.0134 I
U. S. Gasoline. Motor (Above 65 Octane), Tank Car Lots, F.O.B. Refinery.
N. Y.(Bayonne)
N. Y.(Bayonne)
Shell Eastern Pet-S.0590
Standard Oil. N.J.Motor. U. S....-$.0834 New YorkColonial-Beacon. .06
Stand. 011, N. Y_ .0615
.0590
z Texas
Tide Water 011 Co .06
.06
Gulf
Richfield 011(Cal.) .0625
Republic 011
.06h
Warner-Quin. Co_ .06
Sinclair Refining_ .()63i
x Richfield "Golden." z"Fire Chief," $.0815.
$.05-.0514
Chicago.
New Orleans,ex_ .04-.0454
Arkansas
04- 04X
California
.05.07
Los Angeles, ex_ .0414-.07
Gulf ports
.05-.0554
Tulsa
.05-.,155(
Pennsylvania
.0534
940
Financial Chronicle
Further Gain Reported in Crude Oil OutputInventories Again Increase.
The American Petroleum Institute estimatas that the daily
average gross crule oil production for the week ended July 29
1933 was 2,697,850 barrels, compared with 2,673,350 barrels
per day during the preceding week a daily average of 2,650,150 barrels during the four weeks ended July 29 and an
average daily output of 2,137,500 barrels for the week ended
July 30 1932.
Stocks of motor fuel oil at all points increased 786,000
barrels during the week under review, or from 51,936,000
barrels at July 22 to 52,722,000 barrels at July 29. In the
preceding week there was a gain of 138,000 barrels.
Reports received for the week ended July 29 1933 from
refining companies controlling 92.2% of the 3,586,900-barrel
estimated daily potential refining capacity of the United
States, indicate that 2,424,000 barrels of crude oil daily
were run to the stills operated by those companies, and that
they had in storage at refineries at the end of the week,
28,851,000 barrels of gasoline and 129,461,000 barrels of
gas and fuel oil. Gasoline at bulk terminals, in transit
and in pipe lines, amounted to 20,186,000 barrels. Cracked
gasoline production by companies owning 95.1% of the potential charging capacity of all cracking units, averaged
484,000 barrels daily during the week.
.The report for the week ended July 29 1933 follows in
detail:
DAILY AVERAGE CRUDE OIL PRODUCTION.
(Figures in barrels.)
Oklahoma
Kansas
Panhandle Texas
North Texas
West Central Texas
West Texas
East Central Texas
East Texas
Conroe
Southwest Texas
North Louisiana
Arkansas
Coastal Texas (not including Conroe)
Coastal Louisiana
Eastern (not including Michigan)
Michigan
Wyoming
Montana
Colorado
New Mexico
California
Week
Ended
July 29
1933.
Week
Ended
July 22
1933.
4 Weeks
Ended
July 29
1933.
Week
Ended
July 30
1932.
600,600
125,500
55,600
50,750
21,850
158,200
58,400
583,650
84,100
52,600
26,050
31,250
125,750
46,450
93,100
19,950
29,700
7,250
2,400
37,600
487,100
621,550
128,550
50,300
50,650
21,800
158,050
58,000
548,800
80,400
52,200
26,350
31,350
125,400
44,450
92,050
17,550
26,800
7,750
2,550
37,600
491,200
595,900
129,500
50,200
50,300
21,750
159,550
58,250
557,050
76,900
51,850
26,600
31,350
125,300
44,250
90,900
17,650
27,400
7,550
2,500
37,450
487,950
394,550
96,050
56,850
49,950
24,250
178,300
57,950
330,600
1,200
57,000
29,900
34,150
118,950
31,650
103,950
18,350
38,200
7,700
2,850
35,900
469,200
Total
2.697,850 2,673,350 2,650,150 2,137,500
Note.-The figures indicated above do not include any estimate of any oil which
might have been surreptitiously produced.
CRUDE RUNS TO STILLS, MOTOR FUEL STOCKS AND GAS AND FUEL
OIL STOCKS, WEEK ENDED JULY 29 1933.
(Figures in barrels of 42 gallons each.
Daily Refining Capacity
of Plants.
District.
Reporting.
Potential
Rate.
East Coast
Appalachian_ _
Ind.. Ill., Ky._ _
Okia.,Kans.,Mo.
Inland Texas- _
Texas Gulf
Louisiana Gulf_ _
North La.-Ark
Rocky Mountain
California
582,000
150,800
436,600
462,100
274,400
507,500
162,000
82,600
80,700
848,200
Total.
%
582,000 100.0
139,700 92.6
425,000 97.3
379,500 82.1
161,100 58.7
497,500 98.0
162,000 100.0
76,500 92.6
63.600 78.8
821,800 96.9
Crude Runs
to Stills.
%
Daily OperAverage. cued.
497,000
104,000
354,000
269,000
100.000
428,000
121,000
52,000
37,000
462,000
a Motor
Fuel
Stocks.
Gas and
Fuel Oil
Stocks.
85.4 15,158,000 7,871.000
74.4 2,001,000
806,000
83.3 7,453.000 4,645.000
70.9 4,640.000 3.833,000
62.1 1,475,000 1,922,000
86.0 5,257,000 6,977,000
74.7 1,337,000 1,885,000
268,000
539,000
68.0
765,000
58.2 1,042,000
56.2 14,083,000 100,218,000
Totals week:
July 29 1933__ 3,586,900 3,308,700 92.2 2,424,000 73.3 52,722,000 129,461,000
July 22 1933._ Q KOS! nnn Q Qno ,nn no o q QQ7 nnn 79 1 41 ORA nnn 195 457 nnn
a Below are set out estimates of total motor fuel stocks on U.S. Bureau of Mines
basis for week of July 29 compared with certain June 1932 Bureau figures:
A.P. I. estimate on B.of M.basis, week July 29 1933..b
54,720,000 barrels
U.S. B. of M. motor fuel stocks, July 1 1932
61,558,000 barrels
IL S. B.of M. motor fuel stocks, July 31 1932
62,181,000 barrels
b Estimated to permit comparison with A. P. I. Economics report, which is on
Bureau of Mines basis
c Includes 28,851,000 barrels at refineries, 20,186,000 bulk terminals, in transit
.and pipe lines, and 3,685,000 barrels of other fuel stocks.
Crude Oil Prices Lowered in Southwest-SinclairPrairie Oil Marketing Co. Slashes Prices 13 to 25
Cents a Barrel-Other Companies Follow.
Reductions in crude oil prices ranging from 13 to 25 cents
a barrel in the various Southwest fields were announced by
the Sinclair-Prairie Oil Marketing Co., purchasing subsidiary of the Consolidated Oil Corp., effective 7 a. m.,
Aug. 1. For some time there have been two different
price schedules in the Southwest. Magnolia Petroleum,
Sinclair-Prairie, Continental Oil and some of the smaller
companies have been posting prices ranging from 43c. to
75c. a barrel in the Midcontinent, while the Standard Oil
Co. of New Jersey, Standard Oil Co. of Indiana, Shell
and Gulf companies have been quoting prices ranging from
38c. to 62c.
Aug. 5 1933
The Sinclair-Prairie Co. on Aug. 1 posted crude oil in
the East Texas field at 50 cents a barrel, a cut of 25 cents.
Prices in the North and North Central Texas fields were
reduced 23 cents a barrel to 28 cents for below 29 gravity
with a 2-cent differential up to 52 cents for 40 gravity and
over. Changes in other fields are:
Gray County (Texas Panhandle) reduced 23 cents to 34 cents for below
35 gravity with a 2-cent differential up to 46 cents for 40 gravity and
above; Carson and Hutchinson Counties (Texas Panhandle) cut 18 cents.
to 29 cents for below 35 gravity with a 2-cent differential up to 41 cents
for 70 gravity and above; and Oklahoma and Kansas lowered 13 cents, to
30 cents for below 25 gravity with a 2-cent differential up to 62 cents for
40 gravity and above.
Announcement was made Aug. 2 by the Continental Oil
Co. that it will meet the reductions made by SinclairPrairie Co. The new schedule of the Continental Oil Co.
for Oklahoma, Kansas and North Texas crude begins at
38 cents for oil below 29 gravity and provides for a 2-cent
differential for each degree of gravity to a top price of 62
cents a barrel for 40 gravity and above. The Empire Pipe
Line Co. and the Barnsdall Oil Co. have also their prices.
Fair Trade in Copper, Lead and Zinc at Steady PricesSilver Irregular.
"Metal and Mineral Markets" in its issue of Aug. 3,
remarks that buying of major non-ferrous metals was in
fair volume during the last week; and prices for copper,
lead and zinc were well maintained in the domestic markets.
Tin was somewhat lower than in the preceding week, attributable chiefly to the rise in the dollar. Silver was
under pressure on liquidation by speculators. The buying
of major items was inspired by the steady flow of new
business in manufactured products. The feeling that the
codes of practice may force prices for raw materials to higher
levels naturally exerted some influence on traders. The
weighted index number of non-ferrous metal prices advanced sharply in July, the figure for that month being
69.04, against 64.15 in June, and the low for the year of
44.79 in February. The same publication adds:
Copper Fairly Active.
A good demand prevailed in the domestic copper market last week,
total sales amounting to about 10,000 tons. With the exception of one
lot that sold on Friday for prompt delivery at 8%c., all business of the
week was booked on the basis of 9c., delivered Connecticut, with deliveries extending through the fourth quarter. Continued improvement
in the outlet for consumers' products and a more or less general feeling
that prices may advance further under a copper code seemed to be the
two principal factors that stimulated buying interest in the metal. Although the major part of the business in the seven-day period was for
consumer accounts, dealers managed to acquire a fair tonnage of forward
metal. Efforts to bring all interests concerned into agreement on a code
for presentation to the NRA are reported to have been unsuccessful so
far, despite prolonged discussion and consultation with Government
representatives. Unless a satisfactory understanding is soon reached,
the belief exists in some quarters that the Administration may enter the
deliberations in the role of arbiter to expedite the drafting of the code.
Trading volume fell off slightly in the foreign market last week, although
no change in the basic position of the metal abroad was reported. Prices
moved to somewhat lower levels as dollar exchange strengthened. During
the seven-day period prices ranged from 8.23c. to 8.65c., c.i.f.
Canada produced 21,056,268 pounds of copper in May,against 19,776,008
pounds in April, according to the Dominion Bureau of Statistics. Output
in the first five months of 1933 totaled 102,657,012 pounds, against
109,200,957 pounds in the same period last year.
According to the annual report of Union Miniere du Haut-Katanga, that
company produced 54,000 metric tons of copper during 1932. The imposition of duties in the United States brought about the dissolution of
the Copper Exporters Association, the report points out, but the producers decided, in their own interests, to maintain provisionally their
output on a scale in keeping with the rate of consumption. The future
rate of output will be determined in relation to the activity of the copper
market.
Lead Is Unchanged.
Inquiry for lead was somewhat better than in the preceding week, and
In view of the recent activity in the market the sales tonnage was sufficient
in volume to maintain values. The market held at 4.50c., New York,
the contract basis of the American Smelting & Refining Co., and 4.35c.,
St. Louis, on common grades. Corroding lead commanded the usual
premium of $2 to $3 per ton. Owing to the unsettlement in the foreign
market, consumers seemed less inclined to accumulate additional metal
against forward requirements.
Sales of lead for July shipment came to about 43,250 tons. Shipments
to consumers during July were large and will probably show a liberal
gain over June. Sales already booked for August shipment are satisfactory, amounting to more than 25,000 tons.
Total intake of lead in ore by United States smelters during June was
17,895 tons, against 17,715 tons in May. Intake of lead in scrap smelted
In connection with ore amounted to 5,766 tons in May, against 5,466
tons in the preceding month.
Good Sales of Zinc.
Trading in zinc was in good volume last week, the total tonnage of
business transacted being well above the weekly average. Most of the
sales were for prompt or nearby delivery, although on a small number
shipment specifications extended over the remainder of the year. Price
of the metal was maintained in all directions at 5c., St. Louis, including
yesterday, when inquiry was materially less than it had been earlier in
the week. The code for the zinc industry is reported to have been filed
with the NRA and this action is generally held to have strengthened the
position of the metal.
Volume 137
Financial Chronicle
Tin Statistics Favorable.
The feature in the market was the statistical position as revealed in
figures announced at the end of July. United States deliveries were 395
tons larger than in June, the total for July being 6,540 long tons. A year
ago United States deliveries were down to 2,265 tons. Total deliveries
during July came to 10.165 tons, against 9,371 tons in June, and 5,057 tons
in July last year. The visible supply of tin on the last day of the month
was estimated by the Commodity Exchange at 38,043 tons, against 39,964
tons a month previous and 49,125 tons a year ago. The market was quiet
most of the week, with prices moderately lower on the rise in the dollar.
Yesterday a fair inquiry set in from consumers. Reports on the state
of activity in tin-plate industry continue favorable.
Chinese 99% tin, prompt I hipment, was quoted as follows: July 27.
47.875c.; July 28, 43.75c.; July 29, 43.625c.; July 31, 43.25c.; Aug. 1,
42.90c.: Aug. 2, 43.25c.
Steel Operations Hold at 57% of Capacity-Production
Threatened by Labor Trouble in Coal Region,
Says the "Iron Age"-Pig Iron Price Again
Increased.
Steel demand is showing unexpected staying powers, and
ingot production remains unchanged from a week ago at
57% of capacity, reports the "Iron Age" of Aug. 3. At
Pittsburgh operations have declined from 50 to 49%, at
Chicago from 56 to 52%, at Buffalo from 60 to 57% and in
the Wheeling district from 90 to 85%. On the other hand,
production in the eastern Pennsylvania district has risen
sharply from 41 to well over 47%, the rate in the ClevelandLorain zone has advanced from 67 to 69% and there have
been slight gains in minor centres. The "Age" further
reports as follows:
From present indications steel output this month is less likely to be
affected by seasonal influences than by a shortage of fuel. Efforts of the
United Mine Workers to unionize coal and coke operations in southwestern
Pennsylvania have assumed threatening proportions, in some cases causing
entire suspension of work. Continuance of these labor difficulties for any
length of time might well result in the exhaustion of accumulated supplies
of fuel and pig iron, with an ultimate curtailment or stoppage of steel production at various plants.
The trouble in the coal and coke region has already had some effect on
operating plans. A Cleveland steel company, which had prepared to blow
in a blast furnace, has deferred lighting it until the fuel outlook clears up.
A new uncertainty has appeared to perplex buyers of iron and steel. Recent
purchases to escape higher prices may now have to be followed by well
distributed orders to insure deliveries.
Demand from the automobile industry, the largest single consumer of
Iron and steel, is holding up unusually well. Production of motor cars
last week reached a new high point for the year and assemblies for July are
expected to total 240,000 units. Output in August, according to present
indications, will compare favorably with the performances of June and July.
Chevrolet and Chrysler may turn out fewer cars than in July, but Ford's
schedule caAls for 55,000 units as compared with an estimated output of
50,000 last month.
The pressure of motor car companies for steel has been such that Detroit
warehouses have done the biggest business since 1928 and 1929.
Pig iron producers have also been pressed for deliveries, not merely by
the automotive foundries but by smelters generally: In a few instances
July shipments of pig iron have been the largest for any month since 1929.
Pig iron production in July was 1,819,438 tons, or 58,692 tons daily,
compared with 1.265,007 tons, or 42,166 tons per day, in June. The rate
of output was the highest since May 1931. The month saw a net gain
of 16 active furnaces.
Makers of heavy rolled steel products will benefit from the Government's
naval program. For 16 vessels allotted last week to Navy yards for construction, the steel requirements include 21,775 tons of plates, 9,475 tons
of shapes and 7,000 tons of stainless steel sheets. For 21 vessels on which
bids have been taken from private builders 45,450 tons of plates and shapes
will be required.
Fabricated structural steel awards for the week aggregate 33.135 tons.
More than 900 Government building projects, calling for 160.000 tons of
steel, have been officially sanctioned, although appropriations have not
yet been granted on individual projects. Twenty-two States have received
Federal approval of loans for road work and the first bids for highway steel
will be opened in Now York Aug. 11.
Exports of iron and steel in June, owing to a decline in scrap shipments,
dropped to 102.581 tons from the May total of 123,069 tons. Imports rose
to 34,368 tons from 26.295 tons in May.
Owing to a further slight upward adjustment in delivered prices on
Southern pig iron, the "Iron Age" pig iron composite has advanced from
$15.90 to $15.94 a ton. Silvery pig iron has been advanced in its various
grades $1.25 to $9.25 a ton. The finished steel and scrap composites are
unchanged at 1.973c. a lb. and $12.08 a ton, respectively.
THE "IRON AGE" COMPOSITE PRICES.
Finished Steel.
Aug. 1 1933, 1.973c. a Lb.
Based on steel bars, beams, tank plates,
1.973e. wire, rails, black pipe and sheets.
One week ago
1.973e. These products make 85% of the
One month ago
1.976c. J, United States output.
One year ago
High.
Low,
1.973c. July 5
1933
1.867c. Apr, 18
1.977c. Oct. 4
1.926c. Feb. 2
1932
2.037c. Jan. 13
1.946c. Dec. 29
1931
2.2730. Jan. 7
2.018c. Dec. 9
1930
2.317c. Apr. 2
2.283c, Oct. 29
1929
2.2860. Dec. 11
2.217c. July 17
1928
2.402c. Jan. 4
2.212e. Nov. 1
1927
Pig Iron.
Based on average of basic iron at Valley
Aug. 11933, $15.94 a Gross Ton.
furnace foundry irons at Chicago,
$15.90
One week ago
15.01
Philadelphia, Buffalo, Valley and MrOne month ago
mingham.
13.76
One year ago
High.
Low.
$15.94 Aug. 1
$13.56 Jan. 3
1933
14.81 Jan. 5
13.56 Dec. 6
1932
15.90 Jan. 6
15.79 Dec. 15
1931
18.21 Jan. 7
15.90 Dec. 16
1930
18.71 May 14
18.21 Dec. 17
1929
1928
18.59 Nov.27
17.04 July 24
1927
19.71 Jan. 4
17.54 Nov. 1
941
Steel Scrap.
Based on No. 1 heavy melting stee:
Aug. 1 1933, $12.08 a Gross Ton.
quotations at Pittsburgh, Philadelphia
One week ago
$12.08
10.54 and Chicago.
One month ago
One year ago
6.50
Low.
High.
$12.08 July 25
$6.75 Jan. 3
1933
8.50 Jan. 12
6.42 July 5
1932
11.33 Jan. 6
7.62 Dec. 29
1931
15.00 Feb. 18
11.25 Dec. 6
1930
17.58 Jan. 29
14.08 Dec. 3
1929
13.08 July 2
16.50 Dec. 31
1928
15.25 Jan. 11
13.08 Nov.22
1927
Steel works operations have eased off two points to 55%,
the first break since the upturn started last March, as producers become more conservative pending clarification of the
government program, and consumers withhold fresh commitments until their own situation and that of the price
structure become better defined, stated the magazine
"Steel" of Cleveland on July 31. "Steel" further went on
to say:
Intrinsically, the production outlook remains strong, steelmakers having
sufficient specifications to carry them through much of August at the
present rate. Part of these specifications originated with large buyers last
week, when the July 31 deadline on preferential prices drove in considerable
tonnage. Not for three to four weeks will the present dearth of new buying
be felt seriously, and in the meantime the recovery program will have
become more clearly developed.
Conservatism on the part of leading steelmakers has been prompted
by the fact that the industry is rapidly nearing an era of controlled prices,
to become effective with acceptance of its industrial code. It is nearer a
single-price basis for large and small consumers than ever before-an
experimental venture.
So far as the immediate market is concerned, two developments are
outstanding: First, the almost complete abolition of preferential prices;
second, the extension of current minimum prices for the remainder of the
third quarter. However, while these prices are being offered now, they are
not being guaranteed for the full quarter.
Some difficulties in the proposed new price set-up under the code remain
to be adjusted. For example, Chicago independents are reported favoring
dropping the $2 differential over Pittsburgh, to take advantage of their
position for the Detroit market. Basic pig iron is to be sold at the basic
price only when it is to be used in open hearths; when in the foundry cupola
it is to take the higher foundry iron price. In the meantime, various prices
continue to be raised; railroad tie plates are up $3 a ton; cold-finished
steel bars are to be advanced $5 a ton; special grades of ferroalloys are
higher.
One of the strongest promises for a fall upturn is the continuing active
demand for raw materials. July generally is the year's low in pig iron shipments, but the month marks the high spot so far this year, 30 to 50% over
June with a further gain indicated for August. Four more furnaces have
resumed; large coke inquiries have appeared. Lake Superior iron ore shipments for July, estimated 3,500,000 tons, approximate the total for all of
1932.
Structural shape awards for the week rose to 23,795 tons, including
18,000 tons for Boulder Dam-Los Angeles transmission towers. Reinforcing bar tonnage also increased substantially, with the placing of 8,700
tons for the San Francisco-Oakland bridge substructure. Approval by
the War Department has assured 15,000 tons of shapes and bars for Grand
Island bridges at Buffalo.
Cleveland is taking bids on 35,600 tons of cast and steel pipe; 5,000 tons
of plates are being negotiated for the Pasadena Pine Canyon pipe line.
Pan American Petroleum & Transport Co., New York, has distributed
3,500 tons of steel pipe.
Railroads generally are manifesting more interest in maintenance requirements, and steelmakers are basing hopes for larger purchases shortly
on the strength of improved earnings. Several western roads are preparing
to make substantial rail purchases; 8,000 tons of rails are reported released
to Carnegie Steel Co. Missouri Pacific has placed 1.500.000 tie plates.
Steel works operations last week declined 10 points to 80% in the Wheeling district; 2 to 49% at Pittsburgh; 2 to 58% at Chicago. They advanced
4 points to 90% in New England; 1 to 63 at Buffalo; remaining unchanged
in other districts.
"Steel's" iron and steel composite remains $30.02: the finished steel
composite holds at $47.40, while the scrap composite has advanced 37 cents
to $11.62.
Steel ingot production for the week ended July 31, is
placed at 55% of capacity, according to the "Wall Street
Journal" of Aug. 1. This compares with a shade over 56%
in the preceding week and with 56% two weeks ago. The
"Journal" further states:
U. S. Steel is estimated at 50%,against 49% in the week before and 47%
two weeks ago. Independents are credited with a rate of 59%, compared
with 61% in the previous week and 63% two weeks ago.
The following table gives the percentage of production for the corresponding week of previous years, together with the approximate change from the
week immediately preceding.
Independents.
Industry.
U. S. Steel.
16
13 -1
1932
144- %
29-4
1931
33
31 -2
53+1
1930
64%+ %
58 + %
92+1
1929
100
96 + %
70+2
764+1%
1928
72%+13i
65
1927
68%
713
Daily Pig Iron Production Gained 39% in July.
Estimated production of coke pig iron in July totaled 1,819,438 gross tons against 1,265,007 tons in June, according
to the "Iron Age" of Aug. 3. The July daily rate. at 58.692
tons, increased 39% over the June average of 42,166 tons a
day. The daily rate in July was the highest since May 1931,
which was 64,325 tons.
There were 106 furnaces in blast on Aug. 1, compared with
90 on July 1. Sixteen furnaces were blown in and none blown
out during the month reported the "Age."
The usual tabulations will appear in next week's "Chronicle."
Financial Chronicle
942
Bituminous Coal and Anthracite Production Again
Increased.
According to the United States Bureau of Mines, Department of Commerce, there were produced during the week
ended July 22 1933 a total of 7,220,000 net tons of bituminous coal and 869,000 tons of anthracite, as compared with
6,965,000 tons of bituminous coal and 743,000 tons of anthracite in the preceding week and 4,400,000 tons of bituminous coal and 706,000 tons of anthracite in the corresponding period last year.
During the calendar year to July 22 1933 production
amounted to 165,772,000 net tons of bituminous coal and
24,826,000 tons of anthracite, as against 155,820,000 tons of
bituminous coal and 25,741,000 tons of anthracite during
the calendar year to July 23 1932. The Bureau's statement
follows:
ESTIMATED UNITED STATES PRODUCTION OF COAL AND BEEHIVE
COKE (NET TONS).
Calendar Year to Date
Week Ended
July 22
1933.c
July 15
1933.d
July 23
1932.
1033.
1932.
1929.
Bitum. coal:a
Weekly total 7,220.000 6,965.000 4,400.000 165,772,000 155,820,000 286,098.000
Daily aver_ _ 1,203,000 1,161,000 733,000
911,000 1,669,000
968,000
Pa. anthra : b
Weekly total 869,00
743,000 706,000 24,826,000 25,741.000 38,559,000
146,500
151,900
Daily aver_ _
227,500
144,800 123,800 117,700
Beehive coke:
451,100
8,100
426,000 3,800,900
Weekly total
14,900
17,500
2,462
2,608
1,350
Daily aver__
2,483
2,917
21,971
a Includes lignite, coal made into coke, Iccal sales and colliery fuel. b Includes
Sullivan County, washery and dredge coal, local sales and colliery fuel. c Subject
to revision. d Revised.
ESTIMATED WEEKLY PRODUCTION OF COAL BY STATES (NET TONS).
Week Ended
July
Slate.
July 15
1933.
July 8
1933.
July 16
1932.
July 9
1932.
July 18
1931.
Average,
1923.
195,000 173,000 110,000 102,000 204,000
Alabama
389.000
21.000
27,000
30,000
33,000
Arkansas and Okla_ _
40,000
74,000
34,000
31,000
37,000
38,000
64,000
Colorado
165,000
510,000 431,000 162,000 141,000 652,000 1,268,000
Illinois
195,000 185,000 160.000 148,000 205,000
Indiana
451,000
42.000
37,000
30,000
36,000
43,000
Iowa
87,000
75,000
50,000
70,000
69,000
97,000
Kansas and Missouri
134,000
Kentucky-Eastern_ 659,000 531,000 407,000 348,000 615,000
735,000
105,000 103,000 150,000 137.000 114,000
Western
202.000
17,000
18,000
12,000
28,000
Maryland
35,000
42,000
1,000
1,000
Michigan
2,000
3.000
2,000
17.000
17,000
23,000
29,000
Montana
21.000
29,000
41,000
New Mexico
14,000
18,000
20,000
15,000
52,000
24,000
North Dakota
9,000
8,000
12,000
16,000
18,000
14,000
Ohio
381,000 290,000 152,000 107.000 407.000
854.000
Pennsylvania (bit.)_ 2,080,000 1,590,000 1,258,000 1,037,000 1,862,000 3,680.000
Tennessee
50,000
62,000
74,000
44,000
79,000
113.000
13,000
Texas
12,000
13,000
11,000
11,000
23,000
Utah
13,000
20,000
19,000
28,000
87,000
27,000
Virginia
230,000 193,000 121,000
95,000 176,000
239,000
Washington
22,000
19,000
17,000
20,000
37,000
24,000
West VirginiaSouthern
1,660,000 1.292.000 945,000 863,000 1,619,000 1,519,000
Northern
482.00. 372,000 323,000 251,000 440,000
866,000
Wyoming
42,000
59.000
40,000
36,000
115,000
66.000
Other States
1,000
4,000
2,000
3,000
4,000
2,000
Total bitum. coal_ 6,965.000 5,530,000 4,155,000 3,592,000 6,855,000 11,208,000
Penna. anthracite___ 743,000 676,000 597,000 520,000 752,000 1,950,000
Total coal
7,708,000 6,206,000 4,752,000 4.112,000 7,607,000 13,158,000
Aug. 5 1933
July 1, a gain of 1,615,000 tons.
reported as follows:
SUMMARY OF COMMERCIAL STOCKS OF BITUMINOUS COAL,
INCLUDING STOCKS IN RETAIL YARDS.
P. C. of Change.
July 1
1932.
Apr.1
1933.
May 1
1933.a
July 1
1933.a
From
From
Previous Year
Quarter Ago.
Consumers' stocks: b
Industrial, tons_ _ _ 21,100,000 18,943,000 17,886,000 18,250,000
Retail dealers, tons 5,200,000 4,900,000 4,600,000 5,000,000
-3.7 -13.5
+2.0 -3.8
Total tons
26,300.000 23,843.000 22,486,000 23,250,000 -2.5 -11.6
Days' supply, total 41 days
27 days
31 days
31 days
+14.8 -24.4
Coal in transit:
UnbIlled loads,tons 1,632,000 1,814,000 1,852.000 1,466,000 -19.2 -10.2
On lake docks, tons 4,911,000 3,628,000 3,169,000 4.784.000 +31.9 -2.6
a Subject to revision. b Coal in the bins of householders is not included. The
estimated total is subject to a possible variation of from 3% to 7%.
Note.-This survey of consumers'stocks is made possible by the assistance
of the National Association of Purchasing Agents. By co-operative agreement the Association, acting as representative of the larger consumers,
tabulates and totals the returns from manufacturing industries. Railroad
fuel stocks are supplied by courtesy of the American Railway Association
and stocks of electric utilities by the Power Resources Division, United
States Geological Survey. The Bureau of Mines collects the data for
coke,steel, cement,and coal-gas plants and from a selected list of representative retailers. By this arrangement most of the expense of the survey is
now borne by the co-operating industries.
Industrial Stocks and Consumption-Bituminous.
Between April 1 and May 31, a total of 1,221,000 tons of soft coal was
withdrawn from the reserves of industries, leaving a balance of 17,722,000
tons on hand on June 1 (not including coal in retail yards). During June,
however,some replenishing took place, and on July 1 industrial stocks stood
at 18.250,000 tons. Most of the increase occurred at furnace coke ovens,
steel works, and general manufacturing plants. On the other hand, stocks
of railroad fuel and stocks at cement plants declined in June.
Meanwhile, industrial consumption continued to expand, rising from
18,097,000 tons in May to 18.693,000 in June. Juno, however, was a
shorter month, and the average daily consumption increased from 584,000
tons in May to 622.000 tons in June, a gain of 6.5%. Reduced to a daily
basis, consumption showed an increase in all branches of industry except
the railroads and coal-gas retorts. The most substantial gains were reported
by the cement mills, by-product coke ovens, steel works, and electric public
utilities.
INDUSTRIAL CONSUMPTION AND STOCKS OF BITUMINOUS COAL,
EXCLUDING RETAIL YARDS.
Stocks-End of Month, atElectric power utilities_a
By-product coke ovens_ b
Steel and roiling mills_ b
Cement mills_ b
Coal-gas retorts b
Other industrial_c
Railroad fuel_d
Total industrial stocks
Industrial Consumption byElectric power utilities
By-product coke ovens
Beehive coke ovens
Steel and rolling mills
Cement mills
Coal-gas retorts
Other industrial
Railroad fuel
Total "industrial consumption"
Stocks of Bituminous Coal in Hands of Consumers
and Dealers Again Fell Off During Second Quarter
-Industrial Consumption Increased 3.3% During
Month of June.
Amor-ling to the United States Bureau of Mines, Department of Commerce, speculation in inventories, which has
been a feature of some branches of industry in recent weeks,
has not been an important factor in the coal market. While
stocks of consumers increased during the month of June, as
often happens at this season, the record for the second quarter
as a whole shows a decrease. On July 1 the tctal reserves in
the hands of comm3rcial consumers and retail dealers
amounted to 23,259,000 tons, as against 23,843,000 tons on
April 1, and 26,300,000 tons on July 11932. In comparison
with a year ago, therefore, the present stocks show a decrease
of 11.6%. In fact, they are the smallest for any corresponding date since 1920.
At the June rate of consumption, the stocks on July 1
were sufficient to last 31 days, as compared with a supply
equivalent to 41 clays on the corresponding date of last year.
The number of unbilled loads at the mines on July 1 was
also less than at the beginning of the previous quarter,
amounting to 1,466,000 tons, as against 1,814,000 tons on
April 1. A year ago the numbar of no bills stood at 1,632,000
tons.
Although consumers' stocks declined during the past
quarter, substantial additions were made to reserves at
the head of the lakes. From the abnormally low level of
3,169,000 tons on May 1 stocks of bituminous coal in the
hands of the dock operators increased to 4,789,000 tons on
The Bureau further
Additional Known ConsumptionCoal mine fuel
Bunker fuel, foreign trade
June 1933.
(Prelim.)
May 1933.
(Revised.)
Net Pons.
4,400,000
3,338.000
705,000
217,000
390,000
5,500,000
3,700,000
Net Tons.
4,392.000
2,971,000
676,000
227,000
377,000
5,220,000
3,859,000
+0.2
+12.4
+4.3
-4.4
+3.4
+5.4
-4.1
18,250,000
17,722,000
+3.0
2,290,000
3,251,000
78,000
916.000
373,000
185,000
6,100 000
5,500.000
2,093,000
2,780,000
74,000
820,000
273,000
199,000
6,150.000
5,708,000
+9.4
+16.9
+5.4
+11.7
+36.6
-7.0
-0.8
-3.6
18,693,000
18,097,000
+3.3
212,000
.125,000
187,000
116,000
+13.4
+7.8
Per Cent
of Change.
Days' Supply Days' Supply
Days' Supply on Hand atElectric power utilities
BY-Product coke Ovell.9
Steel and rolling mills
Cement mills
Coal gas retorts
Other industrial
Railroad fuel
Total industrial
58
31
23
17
63
27
20
days
days
days
days
days
days
days
29 days
65
33
26
26
59
26
21
days
days
days
days
days
days
days
-10.8
-6.1
-11.5
-34.6
+6.8
+3.8
-4.8
30 days
-3.3
a Collected by the U. S. Geological Survey. b Collected by U. S. Bureau of
Mines. c Estimates based on reports collected jointly by the National Association
of Purchasing Agents and the U. S. Bureau of Mines from a selected list of 2,000
representative manufacturing plants. The concerns reporting are chiefly large
consumers and affords satisfactory basis for estimate. d Collected by the American
Railway Association from all Class I roads, which consume 96% of all railway fuel:
figures given also allow for smaller roads.
Estimate, subject to revision.
Domestic Anthracite and Coke.
Stocks of domestic fuel, also, show no sign of abnormal purchasing for
storage. The tonnage of anthracite and coke on hand July 1 1933, was less
than on the corresponding date last year.
Anthracite in Retail Yards.-Stocks of anthracite in the hands of retailers
showed the expected seasonal increase from April 1 to July 1. The tonnage
on hand July 1, however, was much less than on the same date last year.
It is not feasible to canvass all retailers, but a selected list of 243 dealers,
Including the largest firms in the country, reported a total of 293.685 tons
on hand July 1 1933, against 414,209 tons the year before, a decrease of
29.1%.
Anthracite in Producers' Yards also shows a sharp decrease as compared
with a year ago. The total reported by the producers on July 1 1933, was
533,274 tons, against 2,076,246 tons last year.
Anthracite on Lake Docks.-Stocks of anthracite on the Superior and
Michigan docks on July 1 stood at 264,137 tons, a decrease of 51.6% from
the corresponding date last year.
Coke.-The tonnage of coke held by the 243 selected retailers reporting on
July 1 was 38.3% less than a year ago. Producers' stocks of by-product
coke on hand at merchant plants amounted to 1,423,691 tons, against
1,750,996 tons a year ago, a decrease of 18.7%.
Financial Chronicle
Volume 137
SUMMARY OF STOCKS OF DOMESTIC ANTHRACITE AND COKE.
% of Change—
July 1
1932.
April 1
1933.
May 1
1933.
July 1
1933.
From
From
Apr. 1. July 1'32.
Retailers' Stocks, 243
Selected Dealers—
Anthracite—net tons__ 414,209 231,029 233,180 293,685 +27.1
52
Days' suPP1Y-a
32
53 +65.6
42
Coke—net tons
98,622
22,599
60,875 +169.4
22,089
Days' supply _a
86
10
85 +750.0
31
Anthracite in producers'
2,076,246 511,143 457,265 533,274 +4.3
storage yards
Anthracite on lake docks 545,705 295,786 285,872 264,137 —10.7
By-prod. coke on hand
at mprrhftnt nlanta 1 750 996 L215.792 1.322.204 1.423.691 +17.1
—29.1
+1.9
—38.3
—1.2
—74.3
—51.6
—18.7
a At current rate of deliveries to customers.
Almost 30,000 Miners on Strike in Southwest Pennsylvania Coke Region—Demand Union Recognition—
Accuse U. S. Steel Corp. Subsidiary and Other
Companies of Unfair Tactics—Governor Pinchot
Sends National Guard Troops to Fayette County to
Preserve Order—Employers Deny They "Imported
Gunmen"—Governor's Proclamation.
A strike of 30,000 miners in the Connellsville coke region
of southwestern Pennsylvania, centering about Uniontown,
was marked during the current week by a series of outbreaks
between strikers and company deputies, in which it was
istimated that about 40 persons had been wounded and one
was killed. The strike assumed major proportions when it
was supported by the workers of the H. C. Frick Coke Co.,
subsidiary of the United States Steel Corp., and rapidly
spread to involve more than 25 mines, whose workers
demanded recognition of the United Mine Workers of
America. On July 28 John L. Lewis, President of the union,
sent a letter to Secretary of Labor Perkins in which he
charged that the troubles which had broken out in the
Fayette County coke regions had been caused by the attitude
of agents of the H. C. Frick Co. Mr. Lewis's letter was
outlined as follows in a Washington dispatch of July 28 to
the New York "Times":
According to Mr. Lewis, employes of the Frick company were told June
1 by its President, Thomas Moses, that a company union would be formed
at once. That was when it was expected that the Industrial Recovery Act
would be adopted by Conress.
Concurrently with the announcement, the letter stated, Mr. Moses
announced that an election of officers would be held on June 6, "on which
day each qualified voter employe would be furnished a ballot on which
would appear the names of the company's nominees for office in this company union."
Disregarding this "coercion," continued Mr. Lewis, the employes of the
company, upon the enactment of the Recovery Act, joined the United
Mine Workers.
Since then, the Frick company, he said, has carried on a campaign
among its employes to discourage their affiliation with the union, and
"to penalize individual leaders among their employes as an object lesson
of the company's disfavor of the legitimate union."
Mr. Lewis said his offer to co-operate in obtaining a resumption of
work was rejected by the United States Steel Co.
"It has been clearly evident that the H. C. Frick Coke Co. has not
been in a conciliatory attitude," the letter went on, "and is fomenting
increased trouble and increased violence through the importation of gunmen supplied by strike-breaking agencies in New York, and through increased use of company-paid deputy sheriffs, furnished by the Sheriff of
Fayette County. As a result, on July 27, at the Colonial property of this
company, four of the striking employes were shot down by agents of the
U. C. Frick Coke Co.
"These men were shot down merely because they attempted to avail
themselves of the privileges conferred upon them as citizens by the terms
Of the National Recovery Statute."
Also on July 28, Governor Pinchot of Pennsylvania
threatened to send National Guard units to the disturbed
area to preserve order, and in a communication to Sheriff
Harry E. Hackney of Fayette County said he had been
informed that gunmen had been imported from New York
943
by the coal operators. The Governor followed this threat
with action on the following ctay (July 29) by ordering 300
National Uuard troops:into the county. The Governor's
proclamation read:
Whereas it has been represented to me that rioting conditions exist in
various sections of Fayette County, where the lives and property, peace
and safety of the people are threatened, which the civil authorities are
unable to suppress; and
Whereas the Constitution and laws of this Commonwealth authorize the
Governor, whenever in his judgment it may be necessary, to employ the
militia to suppress domestic violence and preserve the peace;
Now,therefore, I, Gifford Pinchot, Governor of the said Commonwealth,
do hereby admonish all good citizens and all persons within the territory
and under the jurisdiction of the Commonwealth against aiding or abetting
such unlawful proceedings; and I do hereby command all persons engaged
in the said riotous demonstrations to disperse forthwith and retire peacefully to their respective places of abode, warning them that a persistence
in violence will compel resort to such military force as may be necessary
to enforce obedience to the laws.
In a statement on July-29, explaining-the sending of the
troops, Governor Pinchot said:
"I have sent the National Guard into the strike region to restore order
and to see that the Constitution and laws of Pennsylvania are respected.
I have instructed the guard to protect all citizens in their constitutional
rights and to suppress all violence, whether it comes from operators, deputy
sheriffs or miners.
"The miners have the right to organize, to picket peacefully, and to
assemble in meetings. The Supreme Court and the President recognize
these rights.
"The mine operators have the right to protection of their property
The laws of Pennsylvania recognize this right.
"The National Guard will protect the rights of miners, mine operators
and citizens generally. It is impartial, and will remain so.
"I call upon all good citizens to co-operate with it in restoring peace
and good order in Fayette County."
In instructions issued to the officer commanding the troops,
Governor Pinchot told him his battalion was to act "to keep
the peace without fear or favor." Meanwhile Sheriff
Hackney sent a telegram to Governor Pinchot in which he
denied charges by the latter that his deputies had aided in
prolonging disorder. In the telegram he said:
"For you to charge me with fomenting strife and violence is untrue and
unfair to me and to yourself. Especially is it untrue when you have withdrawn the State Police from Fayette County before I have had an opportunity to reply to your telegram.
"I have been and will continue to be willing to co-operate with you in
every way for the protection of human life and property within the law.
I cannot go beyond the law. Neither can you."
Thomas Moses, President of the H. C. Frick Coke Co.,
also telegraphed the Governor on July 29, denying a charge
by Mr. Pinchot that the company had imported gunmen
into the coal. strike area. "Please be informed that your
statement is wholly'without foundation," Mr. Moses said
in his telegram. On July 31 the strike was marked by a
number of riots, in which many persons were hurt, and which
were occasioned when strikers marched on mines still open
with the intention of closing them.
With additional clashes on Aug. 1, in which nine pickets
were shot, one mortally, and sheriff's deputies woe stoned
by strikers, John L. Lewis, President of the United Mine
Workers of America, conferred on the strike situation in
Washington with Edward T. McGrady, a Deputy Administrator of the NRA. Mr. Lewis later issued a statement
in which he said the strike was developing to a point "where
it will require the serious attention of some organization of
sufficient authority and influence to talk to the United States
Steel Corp. and other coal companies."
"The spread of the strike in Western Pennsylvania is due solely to the
uncompromising attitude of the operators, their opposition to the United
Mine Workers and their failure to treat their employes with ordinary
consideration," he declared.
"The United Mine Workers do not intend to have tile guerrilla warfare
continue indefinitely."
Current Events and Discussions
The Week with the Federal Reserve Banks.
The daily average volume of Federal Reserve bank credit
outstanding during the week ending Aug. 2, as reported by
the Federal Reserve banks, was $2,209,000,000, an increase
of $9,000,000 compared with the preceding week and a decrease of $207,000,000 compared with the corresponding
week in 1932. After noting these facts, the Federal Reserve
Board proceeds as follows:
On Aug. 2 total reserve bank credit amounted to 32,208,000,000, an
increase of $7,000,000 for the week. This increase corresponds with increases of $17,000,000 in money in circulation, $13,000,000 in member
bank reserve balances and $9,000,000 in unexpended capital funds, nonmember deposits. &c., offset in part by an increase of $32,000,000 in Treasury currency, adjusted.
Bills discounted increased $2,000,000 at the Federal Reserve Bank of
San Francisco and $3,000,000 at all Federal Reserve banks. The System's
holdings of bills bought in open market and of Treasury certificates and
bills declined $2,000,000 each, while holdings of Treasury notes increased
$13,000,000.
Beginning with the statement of May 28 1930, the text
accompanying the7weekly—condition statement- of the Federal
Reserve. banks was changed to show the amount of Reserve
bank credit outstanding and certainother items not included
in the condition statement,sucn as monetary gold stocks and
money in circulation. The recteral Reserve Board's explanation of the changes, together with the definition of the
different items, was published in the May 31 1930 issue of
the "Chronicle" on paee 37971
The statement in full for the week ended Aug. 2, in comparison with the preceding week and with the corresponding
date last year, will be found on subsequent pages, namely,
pages 1CO2 and 1003.
Beginning with the statement of March'15 1933, new
items were included, as follows:
1. "Federal Reserve bank notes in actual circulation," representing the
amount of such notes issued under the provisions of paragraph 6 of Section
Financial Chronicle
944
18 of the Federal Reserve Act as amended by the Act of March 9 1933.
2. "Redemption fund—Federal Reserve bank notes," representing the
amount deposited with the Treasurer of the United States for the redemption of such notes.
3. "Special deposits—member banks" and "Special deposits—nonmember banks," representing the amount of segregated deposits received
from member and non-member banks.
A new section has also been added to the statement to show the amount
of Federal Reserve bank notes outstanding, held by Federal Reserve banks,
and in actual circulation and the amount of collateral pledged against
outstanding Federal Reserve bank notes.
Changes in the amount of reserve bank credit outstanding
and in related items during the week and the year ending
Aug. 2 1933 were as follows:
Increase (+) or Decrease(—)
Since
July 26 1933. Aug. 3 1932.
$
+3,000,000 —323,000,000
—2,000,000 —33,000,000
+10,000,000 +192,000,000
—3,000,000 —15,000,000
Aug. 2 1933.
$
164,000,000
8,000,000
2,038,000,000
—1,000,000
Bills discounted
Bills bought
U. S. Government securities
Other reserve bank credit
TOTAL RESERVE BANK CREDIT2,208,000,000 +7,000,000 —180,000,000
+33,3000,000
4,320,000,000
Monetary gold stock
1,948,000,000 +32,000,000 +191,000,000
Treasury currency, adjusted
5,618,000,000 +17,000,000 —110,000,000
Money in circulation
Member bank reserve balances
2,319,000,000 +13,000,000 +307,000,000
Unexpended capital funds, non-member
538,000,000 +9,000,000 +147,000,000
deposits, are
Returns of Member Banks in New York City and
Chicago—Brokers' Loans.
Beginning with the returns for June 1927, the Federal
Reserve Board also commenced to give out the figures of
the member banks in New York City, as well as those in
Chicago, on Thursday, simultaneously with the figures for
the Reserve banks themselves, and for the same week, instead
of waiting until the following Monday, before which time the
statistics covering the entire body of reporting member banks
in the different cities included cannot be got ready.
Below is the statement for the New York City member
banks and that for the Chicago member banks, for the
current week, as thus issued in advance of the full statement
of the member banks, which latter will not be available until
the coming Monday. The New York City statement, of
course, also includes the brokers' loans of reporting member
banks. The grand aggregate of brokers' loans the present
total of these
week shows a d3crease of $18,000,000,
loans on Aug. 2 1933 standing at $876,000,000, as compared
with $331,000,000 on July 27 1932, the low record for all
time since these loans have been first compiled in 1917.
Loans "for own account" decreased from $761,000,000 to
$742,000,000 and loans "for account of out-of-town banks"
from $127,000,000 to $125,000,000, while loans "for account
of others" ircreased from $6,000,000 to $9,000,000.
CONDITION OF WEEKLY REPORTING MEMBER BANKS IN CENTRAL
RESERVE CITIES.
New York.
Aug.21933. July 26 1933. Aug.31932.
$
6,732.000,000 6,731,000,000 6,556,000,000
Loans and investments—total
3,374,000,000 3,369,000,000 3,501,000,000
Loans—total
1,778,000,000 1,790,000,000 1,669,000,000
1,596,000,000 1,579,000,000 1,832,000,000
On securities
All other
Investments—total
_ 3,358,000,000 3,362,000,000 3,055,000,000
2,300,000,000 2,293,000,000 2,087,000,000
1,058,000,000 1,069,000,000 968,000,000
U.S. Government securities
Other securities
749,000,000
36,000,000
Reserve with Federal Reserve Bank
Cash in vault
782,000.000
38,000,000
720,000,000
37,000,000
Net demand deposits
Time deposits
Government deposits
5,221,000,000 5,263,000,000 4,920,600,000
776,000,000 783,000,000 802,000,000
254,000,000 254,000,000 162,000,000
Due from banks
Due to banks
90,000,000
72,000,000
66,000,000
1,116,000,000 1,099,000,000 1,114,000,000
Borrowings from Federal Reserve Bank_
Loans on secur. to brokers & dealers;
742,000,000
For own account
For account of out-of-town banks__ _ _ 125,000,000
9,000,000
For account of others
761,000,000
127,000,000
6,000,000
307,0000000
16,000,000
9,000,000
876,000,000
894,000,000
332,000,000
Total
On demand
On time
Loans and investments—total
627,000,000 644,000,000 244,000,000
249,000,000 250,000,000
88,000,000
Chicago.
1,257,000,000 1,311,000,000 1,270,000,000
Loans—total
On securities
All other
Investments—total
U. S. Government securities
Other securities
Reserve with Federal Reserve Bank
Cash in vault
Net demand deposits
Time deposits
Government deposits
Due from banks
Due to banks
Borrowings from Federal Reserve Bank_
709,000,000
712,000,000
883,000,000
359,000,000
350,060,000
363,000,000
349,000,000
509,000,000
374,000,000
548,000,000
599,000,000
387,000,000
320,000,000
228,000,000
371,000,000
228,000,000
217,000,000
170,000,000
292,000,000
26,000,000
272.000,000
27,000,000
182,000,000
18,000,000
1,008,000,000 1,048,000,000
354.000,000 351,000,000
42,000,000
42,000,000
804,000,000
337,000,000
13,000,000
171,000,000
266,000,000
156,000,000
237,000,000
184,000,000
263,000,000
6,000,000
Aug. 5 1933
Complete Returns of the Member Banks of the Federal
Reserve System for the Preceding Week.
The Federal Reserve Board resumed on May 15 the
publication of its weekly condition statement of reporting
member banks in leading cities, which had been discontinued after the report issued on March 6, giving the figures
for March 1. The present statement covers banks in 90
leading cities instead of in 101 leading cities as formerly, and
shows figures as of Wednesday, July 26, with comparisons
for July 19 1933 and July 27 1932.
As is known, the publication of the returns for the New
York and Chicago member banks was never interrupted.
These are given out on Thursday, simultaneously with the
figures for the Reserve banks themselves, and cover the
same week,instead of being held until the following Monday,
before which time the statistics covering the entire body of
reporting member banks in 90 cities cannot be got ready.
In the following will be found the comments of the Federal
Reserve Board respecting the returns of the entire body of
reporting member banks of the Federal Reserve System for
the week ended with the close of business on July 26:
The Federal Reserve Board's condition statement of weekly reporting
member banks in 90 leading cities on July 26 shows decreases for the week
of $104,000.000 in loans and investments, $69,000,000 in net demand deposits, $9,000,000 in time deposits and $21,000,000 in Government deposits, and increases of $25,000,000 in reserve balances with Federal Reserve
banks and $6,000,000 in borrowings from Federal Reserve banks.
Loans on securities declined $71,000,000 at reporting member banks in
the New York district and $75,000,000 at all reporting member banks.
"All other" loans declined $16,000,000 in the New York district, $6,000,000
in the Chicago district and $18,000,000 at all reporting banks. Holdings
of United States Government securities declined $38,000,000 in the New
York district and $23,000,000 at all reporting member banks, and increased
$17,000,000 in the Chicago district. Holdings of other securities increased
$12,000,000.
Borrowings of weekly reporting member banks from Federal Reserve
banks aggregated $28,000,000 on July 26, the principal change for the week
being an increase of $4,000,000 at the Federal Reserve Bank of San Fran•cisco.
Licensed member banks formerly included in the condition statement
of member banks in 101 leading cities, but not now included in the weekly
statement, had total loans and investments of $838.000.000, and net demand,time and Government deposits of $831,000,000 on July 26,compared
with $812,000,000 and $808.000,000, respectively, on July 19.
A summary of the principal assets and liabilities of the reporting member
banks in 90 leading cities that are included in the statement, together
with changes for the week and the year ended July 26 1933, follows:
July 26 1933.
Increase (-I-) or Decrease (—)
Since
July 19 1933. July 27 1932.
Loans and Investments—total._ __16,662,000,000 *-104,000,000
Loans—total
On securities
All other
+413,000,000
8,561,000,000
—93,000,000
—940,000,000
3,789,000,000
4,772,000,000
—75,000,000
—18,000,000
—251,000,000
—689,000,000
8,101,000,000
*-11,000,000 +1.353.000.000
U. S. Government securities____ 5,117,000,000
2,984,000,000
Other securities
—23,000,000 +1,245,000,000
*+12,000,000 +108,000,000
Investments—total
Reserve with F. R. banks
Cash in vault
Net demand deposits
Time deposits
Government deposits
Due from banks
Due to banks
Borrowings from F. R. banks
1,674,000,000
188,000,000
+25,000,000
+154,000,000
10,598,000,000
4,538,000,000
560,000,000
*-69,000,000
—9,000,000
—21,000,000
+559,000,000
+7,000,000
+501,000,000
1,114,000,000
2,564,000,000
—82,000,000
—126,000,000
+52,000,000
+171,000,000
28,000,000
+6,000.000
—133,000,000
* July 19 figures revised (Chicago District).
Stock of Money in the Country.
The Treasury Department at Washington has issued the
customary monthly statement showing the stock of money
in the country and the amount in circulation after deducting
the moneys held in the United States Treasury and by Federal Reserve banks and agents. It is important to note
that, beginning with the statement of Dec. 31 1927, several
very important changes have been made. They are as follows: (1) The statement is dated for the end of the month
instead of for the first of the month;(2) gold held by Federal
Reserve banks under earmark for foreign account is now excluded, and gold held abroad for Federal Reserve banks is
now included, and (3) minor coin (nickels and cents) has been
added. On this basis the figures this time, which are for
June 30 1933, show that the money in circulation at that
date (including, of course, what is held in bank vaults of
member banks of the Federal Reserve System) was $5,720,764,384, as against $5,812,319,611 on May 31 1933, and
$5,695,171,375 on June 30 1932, and comparing with
$5,698,214,612 on Oct. 31 1920. Just before the outbreak
of the World War, that is on June 30 1914, the total was
only $3,459,434,174. The following is the full statement:
Financial Chronicle
Volume 137
70,
47
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309'169'L6L'Ed 1Z1.9I1'SLO'OI
11111
In 14 CC
945
Free Gold Market in United States Held Necessary Preliminary Step Toward Establishment of New
Monetary System-Views of Committee For Establishment of Free Gold Market.
The Committee For the Establishment of a Free Gold
Market in the United States announces that it has reached
the following conclusions:
.3
C-1
In the short run, a free gold market in the United States would bring
about or facilitate:
1. Free functioning of gold as a standard of value in which the United
States would exercise its due share of world influence;
2. Increase in the American price level and the promotion thereby of
general economic recovery at home and abroad;
3. Immediate elimination of existing penalties on gold producers and
stimulation of new production;
(a) by giving American producers the world price for gold and
(b) by making it profitable to work mines now closed;
4. Encouragement of gold imports frcm abroad during the remaining
period of dollar exchange instability;
5. Discouragement of (a) excessive gold consumption in the United
States in manufacturnig and the arts, and (b) smuggling gold out of the
country, which present conditions openly invite;
6. Recovery of old gold from scrap, jewelry, and unknown hoards;
7. Repatriation of American refugee capital from abroad, of which it is
estimated that amounts aggregating hundreds of millions of dollars are
being held abroad in the form of gold;
8. Control of dollar exchange rates, should it become desirable to operate
a dollar equalization fund;
9. Equality of opportunity for all Americans to own gold legally-a
right which foreigners now enjoy.
//.
In the long run, the establishment of a free gold market in the United
States is desirable:
1. To create a market mechanism preliminary to introducing a gold
bullion standard under which a variable official buying and selling price
for gold will be desirable z
2. To stimulate domestic gold production by the assurance that American
producers will receive the world price for gold.
Authority.
Legislation was incorporated in the Agricultural Relief Act of May 12
1933 looking forward to a revised monetary standard. The Committee is
satisfied that a free gold market can be established by Presidential proclamation under the authority of this Act. It believes that such a step should
be taken in full recognition of the long run advantages to be derived from
the new monetary system.
The establishment of a free gold market in the United States would be
not only a needed preliminary step toward establishment of a new monetary
system, but an institution of permanent value, providing the nation with a
financial autonomy more definite than it has heretofore possessed. At the
same time it would permit the United States to co-operate with other nations in the maintenance of an international monetary system without the
danger of too violent repercussions on its own economic life.
The Committee's conclusions.are based upon:
(a) The analysis and supplementary data submitted by the National Industrial Conference Board;
(b) A special report on the functioning of the Free Gold Market in
London, prepared for the Committee for the Nation by Professor T. E.
Gregory of the London School of Economics, and
(c) Exhaustive research and investigation by members of the Committee
of the gold situation as it affects the United States.
J. Chester Cuppia is Chairman of the Committee For the
Establishment of a Free Gold Market in the United States.
•Revised figures.
a Does not include gold bullion or foreign coin other than that held by the Treasury,
Federal Reserve banks, and Federal Reserve agents. Gold held by Federal Reserve
banks under earmark for foreign account is excluded, and gold held abroad for
Federal Reserve banks is included.
ia These amounts are not included in the
total since the money held in trust against
gold and silver certificates and Treasury notes of 1890 Is included under gold coin
and bullion and standard silver dollars, respectively.
c The amount of money held in trust against gold and silver certificates and
Treasury notes of 1890 should be deducted from this total before combining it with
total money outside of the Treasury to arrive at the stock of money in the United
States.
d This total includes $44,066,151 gold deposited for the redemption of Federal
Reserve notes ($1,832,490 in process of redemption), $36,888,707 lawful money deposited for the redemption of National bank notes ($19,632,712 in process of redemption, including notes chargeable to the retirement fund), $7,392,000 lawful
money deposited for the redemption of Federal Reserve bank notes ($513,002 in
process of redemption, including notes chargeable to the retirement fund), $1,350
lawful money deposited for the retirement of additional circulation (Act of May 30
1908), and $58,917,107 lawful money deposited as a reserve for postal savings
deposits.
e Includes money held by the Cuban agency of the Federal Reserve Bank of
Atlanta.
f The money In circulation includes any paper currency held outside the continental limits of the United States.
Note.-Gold certificates are secured dollar for dollar by gold held In the Treasury
for their redemption; silver certificates are secured dollar for dollar by standard
silver dollars held in the Treasury for their redemption; United States notes are
secured by a gold reserve of $156,039,088 held In the Treasury. This reserve fund
may also be used for the redemption of Treasury notes of 1890, which are also secured
dollar for dollar by standard silver dollars held In the Treasury; these notes are being
canceled and retired on receipt. Federal Reserve notes are obligations of the United
States and a first lien on all the assets of the issuing Federal Reserve Bank, Federal
Reserve notes are secured by the deposit with Federal Reserve agents of a like
amount of gold or of gold and such discounted or purchased paper as is eligible under
the terms of the Federal Iteserve Act, or, until March 3 1934, of direct obligations
of the United States if so authorized by a majority vote of the Federal Reserve Board.
Federal Reserve banks must maintain a gold reserve of at least 40%, including the
gold redemption fund which must be deposited with the United States Treasurer,
against Federal Reserve notes in actual circulation. Federal Reserve bank notes
are secured by direct obligations of the United States or commercial paper, except
Where lawful money has been deposited with the Treasurer of the United States
for their retirement. National bank notes are secured by United States bonds except
Where lawful money has been deposited with the Treasurer of the United States
for their retirement. A 5% fund is aLso maintained in lawful money with the
Treasurer of the United States for the redemption of national bank notes secured
by Government bonds.
Gold Mining Affected by Price Upturn-American
Industry Faces Rising Production Costs with Fixed
Return for Metal-Export Licenses Sought-Appeal
Made to Treasury for Right to Benefit from Higher
Quotations Abroad.
From the New York "Times" we take the following (copyright, by Nana, Inc.) from Washington July 3:
One American industry not sharing in the business upturn but finding
itself worse off with every price advance is gold mining.
Its cost of production mounts as general prices go up, while the price
at which it must sell its product Is fixed. In fact, there is nothing salable
in the world that equals in its price stability American gold. Unlike the
Governments of all other gold-producing countries that are off the gold
standard, the American Government makes no concessions to the gold miner
to compensate him for the depreciation of its currency. The effect of the
new gold laws and regulations on him is this:
lie may sell his gold, fresh from the mine, only to the Government itself,
meaning the United States assay offices and mints; he may not export it;
he may not sell it to jewelers and manufacturers. He has but the one
customer. That customer, Uncle Sam, pays him, not in gold certificates
as previously it did, but in ordinary currency. Moreover, Uncle Sam also
pays him in that currency just exactly what it paid him before March 4,
namely, $20.67 an ounce. The miner can take it or stop mining.
Canada Pays a Premium.
Across the border in Canada the Dominion Government has a different
plan. It wants to encourage the mining of gold. Therefore, while making
itself the sole legal purchaser, permitting no competition, it pays the
miner a premium equal to the difference between the gold value of its
currency and the actual value. Thus if the Canadian dollar is valued in
the exchanges of the world at 85 cents, or 15% below par, it pays a bonus
of 15 cents. Australia, South Africa and the other gold-producing countries,
now off the gold standard, make the same or similar provisions.
The American industry is growing restive under existing conditions. At
the beginning it regarded those conditions as merely temporary; the lack of
consideration given to it in framing regulations was thought merely an
oversight. Now, as no relief appears in sight, it wants the Government to
do something.
Several suggestions have been advanced as to remedial measures. Roughly,
these are:
946
Financial Chronicle
1. That a free gold market be set up, just as there is in London.
2. That the Government adopt the Canadian plan and pay a premium
on mined gold equivalent to the difference between the depreciated dollar
and the gold dollar.
3. That the Government modify the embargo on gold shipments to
permit legitimate gold miners to export their products so that they may
obtain the higher price current abroad.
Licensed Exports Advocated.
The majority of the industry, as represented in the American Mining Congress, has decided to advocate the third or licensed export plan as the most
practicable and the one more in accord with the administration's recovery
program. It has laid this proposal before Secretary of the Treasury
Woodin, who has it under consideration.
The history of gold production in this and other countries shows that
when general prices go up, the mining of gold diminishes, and that when
prices go down gold production increases. During the period of the World
War, and immediately after, many low-grade gold mines were obliged to
shut down—the margin between costs and prices of gold being too narrow.
Since the depression began American gold production has steadily increased
as a result of the lower price level. Last year new gold to the value of
$50,628,000 was produced in American mines, an increase of $1,098,800 over
the production of 1931.
Slackening in Activity.
This year, so far, production has been running at a rate of rather better
than 10% greater than last year's, but the industry reports that a slackening is apparent. Production in Canada, which has outrun American production for the last three years, increases steadily.
In presenting the appeal of the gold mining industry to Secretary Woodin,
J. F. Cal!breath, secretary of the American Mining Congress, based it on
two propositions:
1. That the necessity for the embargo presents complete proof of the
importance of maintaining domestic gold supply.
2. That if countries outside of America had an ample supply of gold,
the American supply would protect itself without an embargo.
He also pointed out that a curtailment of gold mining at home would
increase unemployment.
Citing statistics to demonstrate that high prices reduce gold production
and low prices increase them, Mr. Callbreath held that, with gold at a
fixed price of $20.67 an ounce, "and with the anticipated wage level and
operating cost increases, the gold industry will be practically driven out
of existence" unless there is relief.
World-Market for Gold Asked by Mine Executives—
Fixed Price at Mint Held Bar to Employment.
Gold-mining interests carried their demands for a free gold
market to the public at San Francisco on July 26, with a fullpage advertisement in which more than a score of mine executives, engineers, attorneys and mining association officials stated their case. Tile foregoing (Associated Press
from San Francisco) is from the Los Angeles "Times- of
July 27, which went on to say:
An open message to the President, heading the page, urged him to relieve
"the forgotten industry," presumably by permitting sale of gold produced
in mines to the highest bidder.
P. M. Cropper, editor of the Mining and Industrial News, stated the
miners' grievance crisply:
"When the President placed an embargo on gold shipments on April 20
it forced the miner to sell to the mint at the fixed price of $20.67 an ounce
of gold.
Want Free Market.
"This was followed by a further order that all newly made gold should
be sold to the mint, although there was and is a market for gold throughout the world at far higher prices." He added the miners simply seek the
right to sell gold freely.
P. R. Bradley, President of Alaska Juneau Gold Mining Company, asserted
the industry is being "done an injustice," various leaders indicated mining
operations are ripe for expansion of employment, needing only a fair market
for gold, and Norman C. Stines, General 3fanager of La Grange Gold Mines.
Inc., said:
Retards Expansion.
Aug. 5 1933
Chilean Court Decision Eliminates "Gold Clause" in
Contracts.
On July 5 the Department of Commerce at Washington
stated that a number of American firms with connections in
Chile may lose substantial sums of money as a result of a
decision rendered by the Court of Appeals in Santiago which
reverses an opinion of a lower Court and, in effect, abolished
the "gold clause" in existing contracts, according to a report
received in the Commercial Laws division of the Department
from Commercial Attache Ralph H. Ackerman, Santiago.
The Department's advices continued:
Unless the ruling of the Court of Appeals is reversed by the Supreme
Court, the holders of notes may be repaid on the maturity date with Chilean
currency on the same basis, peso for peso, as when the loan was made.
Many American firms doing business in that country attempted to forestall
such a development by inserting a "gold clause" in the contracts at the
time the notes were signed.
The new court decision is described in Santiago financial circles as comparable to the decisions in American and British courts covering the gold
clause in contracts made in a currency which depreciated between the date
of the making of a note and its maturity.
Swedish Currency Aims at Price Rise—Professor Cassel
in Stockholm Article Explains Plan of Stabilization
There.
Professor Gustav Cassel, in the quarterly review issued
July 8 of the Swedish Bank, Skandinaviska Kreditaktiebolag,
gives an expose of the Swedish stabilization program, it was
indicated in Stockholm advices July 8 to the New York
"Times" which went on to say:
Sweden left the gold standard in 1931, he states, because it was forced
off by Great Britain's departure from gold. This, however, did not mean
a total loss of control over Swedish currency.
Some rise in wholesale price levels was desirable, but it was controlled
by the new Currency Act with a clause that the cost of living must not be
increased much. However, the wholesale price index fell steadily from the
Autumn of 1931 throughout 1932, reaching 110 in September 1932, and
105 in April 1933.
In consequence of this, a currency committee was formed the past
Spring, consisting of representatives of industry, agriculture and banking
and economic experts.
"The committee found a general increase in price levels should be created
by the spirit and endeavor of the leading world countries to increase commodity prices," Professor Cassel says. "It was further thought this would
have to be followed by stabilization at a rate of exchange between the currency of the more important countries, especially a rate between the pound
and the dollar.
"The question of return to gold has not been discussed by the Committee.
Swedish monetary policy should mainly be concentrated on the internal buying power of the kroner. As a means to obtain this end a discount and
credit policy was used, aided by the Swedish Riksbank, which incidentally
is somewhat independent of the Government.
"Special State expenses, for instance, the doles, are financed by an issue
of State bonds taken up by private banks and rediscounted by the Riksbank."
Professor Cassel concludes:
"The Government and Parliament agree that the policy-sponsored by the Committee seems to be in full accord with the demand of general world interests. For
the world increased prices are the first presupposition for economic recovery and
fixing rates of exchange in this connection is very desirable; but logically it implies
that it must first be made clear how far each single country will go as regards raising
ao.
It?
price levels.
"When at some future time earnest steps are taken to increase world price levels.
it will be immensely easier to obtain an agreement on a freer commercial policy
and a settlement of any kind of international debts. It is very desirable that the
economically most important countries should agree to create that rise in prices.
in which the other countries would be sure to join."
Italians Determined to Retain Gold Standard—Lira
Quoted Above Parity First Time in Six Years.
A copyright message from Rome July 9 is taken as follows
from the New York "herald Tribune":
Distinctions in Monetary Terminology Explained in
Silver Market Dictionary Issued by the Commodity.
Exchange—Gold Standard, Gold Exchange Standard, &c., Described.
The discussions at the London Conference on currency
stabilization involving gold and silver and President Roosevelt's rejection of currency proposals have tended to direct
increasing public attention to such terms as managed currency, gold standard, bimetallism, inflation, gold-exchange
standard, fiduciary currencies and fiat money. The distinctions made in the use of monetary terminology are explained
by the Commodity Exchange, Inc. in the Silver Market
Dictionary, prepared for the Exchange by Herbert M. Bratter
of Washington, D. C. Regarding the information contained
in the dictionary an announcement says:
For the first time since stabilization was effected nearly six years ago
the Italian lira has been quoted above par in European countries with gold
currencies. This simple act is clear evidence of the firm position of the
lira besides indication of the strong determination of the Italian Government
to defend to the uttermost the solidly stabilized lira at its present value.
However great the disappointment felt in Italian circles at President
Roosevelt's rejection of the joint declaration of the gold countries, there is
positively no tear felt in Italy about the future of the lira, which has resisted all shocks to monetary systems in other countries richer than herself.
The lira is firmly based on gold and can defend itself by its own organized
power and no particular action, therefore, is considered necessary at the
present moment to maintain it at its present level.
Italian economists maintain that the problem of economic recovery cannot
properly be saved until currency is first stabilized. No country, they add,
can develop an economic policy unless its currency previously has been
stabilized. While any idea of a united front among European gold currencies against the United States finds little favor in Italy it is felt that the
countries with stabilized currencies should unite in defense of their common interest, continue their efforts and obtain early stabilization of both
the dollar and sterling.
Currency management is not confined to inconvertible currencies, according to this dictionary. In most convertible currencies there is some management. A managed inconvertible currency is one of which the currency or
banking authorities attempt more or less continuously to regulate the value
by altering the quantity of currency and/or other credit instruments in
circulation. Management may be directed toward regulating the internal
value of the currency, or toward regulating the external value.
The gold standard, the dictionary shows, exists in a country when the
internal value of its currency is kept at parity with gold by the maintenance
of a free gold market. By the latter is meant unimpeded convertibility of
the currency into gold and vice versa, at a fixed ratio and without maximum
limit; and unimpeded importation and exportation of the yellow metal.
Moreover, gold must be unlimited legal tender.
The gold-exthange standard is that form of the gold standard wherein
the currency is convertible into some foreign gold-coin-standard or goldbullion-standard currency, and vice versa, at a fixed ratio and without
maximum limit ; in other words, the currency is indirectly convertible into
gold. The several foreign exchange standards are simply derivatives of the
gold-exchange standard. Thus, so long as the franc and the lira remain on
a gold basis, currencies kept convertible into francs or liras are on the gold.
"In the 'new deal' at least the first step has been taken to assist every
industry—except that of gold mining," and that present conditions threaten
"complete cessation" of gold production.
E. L. Oliver, President of Idaho Maryland Consolidated Mines, Inc., said
his company had prepared to double forces at work, but under the Government's restrictions this appears inadvisable.
Volume 137
Financial Chronicle
exchange standard. Prior to September 21 1931, the sterling-exchange
standard was a form of the gold-exchange standard. When on the date
mentioned, Great Britain suspended gold payments, currencies on the
sterling-exchange standard ceased to be on the gold-exchange standard, and
became simply foreign-exchange-standard currencies. (The gold-exchange
standard was first employed by banks in Scotland in 1763.)
Where the gold standard has legal but not de facto existence, because of
impairment of one or more attributes of the gold-standard as described above,
the currency is still regarded as having a certain theoretical parity in gold.
Mexico is in this category.
The silver standard is described in the Silver Market Dictionary as a
monetary standard of value based on a specified weight of silver as the unit.
Theoretically, the silver standard may have as many forms as the gold
standard. Actually, only two countries—China and Hong Kong—have the
silver standard in the sense that the internal value of the currency is kept
at parity with silver. In China there exists several impairments of the full
silver standard, some of which also apply in Persia and Ethiopia. It is
therefore, in Hong Kong to-day that the silver standard has its fullest development.
SilverrPurchases'-of United States Government—
Acquisition Under Bland-Allison Act of 1878,
Sherman Act of 1890, &c.
A law passed this year provides for the issuance of silver
certificates by the United States Government, to represent
silver received in partial payment of war-debt instalments.
This will be done in the case of 23,000,000 ounces of silver
paid by foreign governments in June. The acquisition of
the silver calls to mind the large silver purchases by this
Government between 1878 and 1893. Under the Bland-Allison Act of 1878 and the Sherman Act of 1890 a total of 460,000,000 fine ounces of silver was purchased by the Government at a cost of over $464,000,000, it is revealed in the Silver
Market Dictionary published by the Commodity Exchange,
Inc. The Dictionary—a 200-page volume prepared for the
Exchange by Herbert M. Bratter of Washington, D. C.—contains detailed information on American currency, including
the two acts mentioned above and the more recent Pittman
Act of 1918. It is noted:
The Bland-Allison Act was passed in 1878 over the veto of the President.
It provided for the monthly purchase by the United States Government of
not less than $2,000,000 nor more than $4,000,000 worth of silver and the
monthly coinage of such silver into standard silver dollars, which were given
full legal tender for all debts and dues, public and private, except where
expressly stipulated otherwise in the contract. The 1878 law was superseded by the Sherman Act of 1890.
Under the Bland-Allison Act 291,272,019 fine ounces of silver were purchased during the period 1878-90, at a cost of $308,279,261, and approximately 352,000,000 silver dollars were coined therefrom.
'Me Sherman Act of July 14 1890 ordered the Secretary of the Treasury
of the United States to purchase each month 4,500,000 fine ounces of silver
bullion, or so much thereof as might be offered at the market price, providing the latter did not exceed the standard silver dollar's coinage value
($1.2929 per ounce). Under the Sherman Act approximately 218,000,000
silver dollars were coined.
The Act of 1890 provided that the Treasury notes used for the purchase
of silver be legal tender for all debts, public and private, except where
otherwise stipulated by contract. Upon redemption the notes were to be
reissuable, but the amount outstanding was always to be the same as "the
cost of the silver bullion and the standard silver dollars coined therefrom,
then held in the Treasury, purchased by such notes." By November 1 1893,
when the Sherman Act was repealed, the Government had purchased thereunder 168,674,683 fine ounces at a cost of $155,931,002 in Treasury notes.
After 1893, the Treasury notes, when redeemed in silver money, were
cancelled, and the silver bullion so released from the reserve against those
notes, as well as the seignorage, was coined.
The Act of March 14 1900, provided that Treasury notes be cancelled
and retired as rapidly as the silver bullion which had been purchased with
those notes and was then being held in the Treasury, should be used up in
the coinage of silver dollars and subsidiary silver coins. The Treasury notes
of 1890 still outstanding are now secured by an equal amount of standard
silver dollars held in the Treasury for their redemption, while the 1900
act made these notes redeemable in gold from the gold reserve fund.
Another important Act relating to silver was the Pittman Act
of 1918.
Its principal purpose was to make available to Great Britain silver wherewith to supply the need for rupees in India.
The Pittman Act of 1918 authorized the Secretary of the Treasury
from
time to time to retire silver certificates and concurrently melt or
break up
and sell as bullion the silver dollars represented thereby up to a limit
of
350,000,000 standard silver dollars. Upon the sale of
such bullion the
Secretary was required to instruct the Director of the Mint
to purchase in
the United States of the product of mines situated in the United States
and
of reduction works so located, an amount of silver equal to the
necessary to replace the silver dollars so melted or broken up; amount
such purchase to be made in accordance with the then existing regulations
of the
Mint and at the fixed price of $1 per ounce, 1.000 fine.
Coinage of silver dollars out of American silver
purchased under the
terms of the Act took place during the period 1921-28.
Approximately 88,000,000 dollars were minted in 1921, 84,000,000 in 1922,
57,000,000 in
1923 and smaller amounts thereafter.
Mexican Delegation at International Monetary
and
Economic Conference Opposed to Consideration
of
Silver as Commodity.
Associated Press advices from London July 1 stated
that
tile Mexican delegation filed a statement that day with
the
Economic Commission of the International Monetary and
Economic Conference, urging that group to give up consideration of silver as a commodity and leave the question
for the
Monetary Commission, where it was receiving special
study.
The cablegram added:
947
In view of the opposition to binietalism, the Mexicans said they did not
propose to urge the adoption of silver in the face of "the orthodox thesis of
the experts and of the majority of the delegates."
Nevertheless Mexico emphasized "the convenience of enlarging the monetary use of silver as a supporting currency in internal circulation, and of
developing the use of silver as a complementary money in international
circulation."
Dollar Continues Basis of Japanese Government Gold
Purchases.
On July 6 the Department of Commerce at Washington issued the following announcement:
It was proposed recently in Japan that the Government purchase gold
on the basis of the yen-sterling rate of exchange. It is now announced
that the Japanese Government continues to pay a premium on gold based on
the dollar exchange rate, according to a cable received in the Commerce
Department from Commercial Attache Halleck A. Butts, Tokio.
••••1141111•••
World Monetary and Economic Conference—Text of
Concluding Address to Plenary Session by Secretary of State Hull—Text of Radio Address by
Premier MacDonald.
As noted in our July 29 issue (page 775) the World Monetary and Economic Conference, meeting at London, adjourned on July 27, with no definite date fixed for reassembly. The question of a future meeting was left in the
hands of the Bureau, or Steering Committee, which will set
a date when—and if—the Conference is to meet again. In
describing the proceedings on the final day, we have previously given an abstract of the addresses made to the
plenary session by Secretary of State Cordell Hull of the
United States and Premier Ramsay MacDonald of Great
Britain. The complete text of Secretary Hull's speech, delivered on July 27, was as follows:
Address by Secretary Cordell Hull.
The Conference is now entering the recess stage. The progress of its
work has corresponded with the difficulties of its task. Human ingenuity
could scarcely have devised a more complete jumble and chaos of busines
and general economic conditions than those facing the nations and the Conference when it convened and still challenging solution.
The multiplicity of other circumstances has further impeded the progress
of the Conference, such as the lack of an international public opinion, the
malignant opposition of those who blindly or selfishly oppose all international economic co-operation and the engrossment of many nations with the
more or less temporary phases of their domestic programs for the emergency
treatment of panic conditions.
It is inevitable in the light of these extremely complicated conditions
that the Conference, having reached a few important agreements and coneluded a thorough appraisal and understanding of the problems presented,
would find it necessary to recess. Time must be afforded for some of
these difficulties to be ironed out and for the nations further to broaden
their economic plans and policies so as to co-ordinate them on a gradually
increasing scale with the program of international co-operation which this
Conference is undertaking to promulgate.
The conditions which defied solution by individual State action and imperatively called for international treatment offered the compelling reason
for this Conference. Every rational person knows that since there were
international causes of the depression there must be international remedies.
For those either pessimistically or wantonly inclined to attempt further to
handicap the Conference in its particular efforts to go forward is virtually
to indict and discredit all forms of international co-operation however necessary to deal with international problems which vitally affect the welfare
of peoples alike in every part of the world.
It is easy to say that this or that incident or complication or condition
has caused a partial failure of the Conference. This has been the experience of past Conferences when struggling against many obstacles to solve
complicated problems involving human life and human welfare. The very
purpose of international co-operative effort is aggressively to override these
and all other impediments to the fulfillment of its high mission. To impute failure is to impute the bankruptcy of world statesmanship in the face
of unparalleled and universal economic distress and suffering.
Sees Valuable Seed Sown.
Business and economic conditions in every part of the world remain dislocated and disorganized. At the beginning of the Conference
the delegates
had no adequate conception of the complicated conditions in
distant countries and of each other's varying viewpoints. Understanding
is the chief
basis of all international relationships, and its importance
can scarcely be
overestimated. Manifestly valuable seed has been sown here
already in
that we have come to a deeper and more
sympathetic comprehension of
our common problems.
There are after all only two agreements. One is by
imposing one's will
by force—by war. The other is by
persuasion—by Conference. Even by
the violent means of war—which we
have all renounced—no one would
expect agreement in six weeks. How
can it then be said that the Conference—this method which has killed no man—has
already failed? Many
actual wars of the past growing out of
bitter trade controversies would have
been averted had there been more peace-time
Conferences.
My judgment is that just now the
world's statesmen cannot sit in Conference too often or too long in earnest and
patient consideration of all
questions calculated to disturb friendly
relations and clear understanding
between nations and in determined effort
to bring about their fair and
peaceful adjustment.
Many of those not delegates here who
criticize the Conference for not
going forward more expeditiously represent
the economic leadership of
numerous countries which have already failed
in repeated attempts since
1929 to cure panic conditions. This group
of critics includes the selfish
but shortsighted beneficiaries of
governmental favoritism and those
mock
patriots whose constant propaganda would make
international finance and
commerce almost criminal.
These forces are potent in many parts of
the world to-day. They will
be very slow to lower a single excessive trade
barrier until human distress
becomes unbearable. It matters not to them
that there ought to be $40,-
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Financial Chronicle
000,000,000 of additional commerce on the high seas this year, thereby
affording employment for labor and markets for surpluses.
In the past there have been spectacular races by nations in military
armaments. Their wildest rivalry, however, scarcely exceeds in danger
the present mad race between most nations to promote economic armaments
which inflict colossal injuries on the masses of people everywhere. At this
moment the world is still engaged in wild competition in economic armaments which constantly menace both peace and commerce.
Nations Must Pursue Less Extreme Economic Policies.
The nations must make up their minds to pursue less extreme economic
policies; they must discard artificial expedients to protect industries that
are notoriously inefficient or are not justifiable on any practical economic
or business grounds.
When some nations undertake to produce every commodity, whatsoever the
cost, for purposes of either peace or war, other nations are driven to turn
to the adoption of similar policies of unjustifiable production, with the result that, as in the case of military armaments, the economic race neutralizes itself to the injury of all who are engaged in it.
I appeal to this Conference and through it to peoples everywhere to demand an end of the ruinous races by nations in either military or economic
armaments. It is the duty of statesmen everywhere to lead the world away
from these twin evils of this modern age.
Much has been said about the order in which the subjects on the agenda
should be considered. I believe that the membership of the Conference
frankly recognizes that both the financial and economic difficulties as listed
in the agenda must be visualized as one unified network of obstructions and
impediments to international finance and commerce and attacked and dealt
with as a whole.
Stable Monetary Facilities Necessary Incident to Lowering of Trade Barriers.
It would get nowhere to lower trade barriers without development of
stable monetary facilities for the movements of commerce nor on the other
hand would commerce move with the aid of complete monetary stabilization if existing insurmountable trade obstructions still continued intact.
Substantial progress in dealing with either group depends on corresponding
action dealing with the other.
The object of this Conference is to substitute prosperity and good will
for panic and trade strife. To relax our efforts in the face of the need and
the duty pressing upon us would show an amazing indifference to human
welfare. The average citizen must by this time be convinced that those
who have opposed sane, practical, international economic co-operation have
proven to be false prophets.
Do the 30,000,000 of unemployed wage earners or the many millions of
impoverished farmers and producers of raw materials need additional proof
of the failure of such leadership?
May I again remind you that the domestic economy of more than thirty
important countries is primarily dependent upon international finance and
commerce with direct repercussions upon the entire world. The practice
of a too narrow policy has choked the entire trade of the world with disastrous effects upon home production and home prices and markets everywhere.
The processes of exchange and distribution have broken down and their
restoration presents the real world problem. Disastrous experience teaches
the necessity for a broader economic social and political policy. Every
-country to-day should first have a comprehensive domestic program calculated most effectively to deal with the existing depression. The United
States has launched a constructive program to this end.
Indispensable and all important as domestic programs are they cannot
by themselves restore business to the highest level of permanent recovery.
A program of international co-operation is necessary for purposes of a
broad basis on which to build the domestic economic structure, to give it
stability and to make possible a substantially greater measure of sound and
lasting business prosperity.
Let me say with reference to my own and other countries striving, by
every available domestic method, to extricate themselves from panic conditions, that there is no logic in the theory that such domestic policies are
irreconcilable with international co-operation. Each country should undoubtedly invoke every emergency method that would increase commodity
prices so that they may gradually be co-ordinated with international economic action for the common purpose of business recovery.
The development of both programs can be proceeded with in a substantial
scale from the outset and to an increasing extent as emergency treatment
of panic conditions diminishes.
Proposal For Reduction of Trade Barriers.
In harmony with these views I have presented to the Conference a proposal for an agreement among the nations to reduce trade barriers gradually over a period of time to make the unconditional forms of the favorednation doctrine, with a reasonable exception in favor of broad international
efforts for reduction of trade barriers, the universal basis of commercial
policy and to extend the life of the tariff truce to a reasonable period beyond
the final adjournment of the Conference.
This proposal offers a basis upon which a world program might be developed during the course of the recess and the meeting of the Conference
•
to follow.
The American Government therefore hopes that every nation that may
not have done so will launch a full domestic program of both ordinary and
extraordinary methods and remedies calculated to raise prices, to increase
employment and to improve the business situation.
We must all agree that business conditions in most countries are still at
or near a panic level, and that their restoration imperatively calls for a
program of fundamental policies and methods as outlined in the agenda of
this Conference. We know that these conditions have not greatly improved
and that the basic features of the Conference agenda remain virtually untouched and unacted upon.
We know, too, that the greatest single step the Conference can take is
one that would inspire confidence; and this step can only be taken by a
determination of this Conference resolutely to go forward to the solution
of each vital problem listed on the agenda.
No nation has ever been able to live unto itself and not become backward and decadent. No people in the past have long remained highly civilized without the continuing benefit of the customs, learning and culture of
other parts of the world, and these are only within the reach of trading
nations.
International Commerce Conducted on Fair Basis Greatest Peacemaker.
International commerce conducted on a fair basis, as our agenda proposes, is the greatest peacemaker in the experience of the human race. The
promotion and preservation of the high ideals and high purposes of economic peace brought this great Conference together and its failure would
be their failure. No governments within my time have faced a graver eco-
Aug. 5 1933
nomic crisis or come together with a higher mission. It would be an unforgivable act if they, through local, regional, or other considerations, should
fail to perform this great trust.
They should disregard the threats or pleas of minorities selfishly clinging to the excessive tariffs and other favors of their governments. A
reasonable combination of the practicable phases of both economic nationalism and economic internationalism—avoiding the extremes of each—should
be our objective.
I want to take this opportunity to express to all who have contributed to
the work of this assembly—to his Majesty the King who graciously opened
the Conference, to the Prime Minister who has so ably presided over this
great gathering, and to my other fellow-delegates—my own deep satisfaction
in the helpful spirit of co-operation which has resulted from our labors so
far.
Sees Clearer Understanding of Viewpoints as Result of Conference.
We came here beset by our individual problems compelled by the necessities of special circumstances arising from widely differing conditions in
our various countries. We have come to a much clearer understanding of
each other's viewpoints and special problems. We have not permitted immediate considerations, no matter how urgent, to divert us from the larger
purposes to which we are all committed.
We are unitedly resolved to move forward together in a common cause.
It cannot fail to be gratifying to all who wish lasting success from this Conference that greater good-will and mutual helpfulness, deeper comprehension
and renewed determination have come from our deliberations.
The duty and responsibility of the Conference are will known to us as
they are to every intelligent citizen on the planet. I pray that each of us
may be given the light clearly to see and fully to understand. We cannot
falter. We will not quit. We have begun and we will go on.
Shortly after the conclusion of the final session of the Conference on July 27, Premier MacDonald delivered a radio
address to the United States over the Columbia and National
Broadcasting Company networks, in which he summarized
the results of the Conference and his hopes for the future.
The text of that address, given on July 27, as transcribed in
New York by the National Broadcasting Company, was as
follows:
Radio Address By Premier MacDonald.
Good evening! I have just come from the plenary meeting of the international Conference, where it has been decided that the Conference as a
whole should go into recess for a time, which is to be as short as possible.
Why is this being done? The explanation is simple. The great upheaval
of effort now going on in the United States to recover prosperity has unsettled, for the time being, the value of the dollar. That, in turn, has raised
some fears in Continental countries lest their own currency might be badly
disturbed., and, again, in turn, that made some delegations refuse to go on
discussing monetary matters and questions like tariffs, with which they
are allied.
Meanwhile, busy men cannot be kept in London, and though certain committees will continue their work in full, meetings of the Conference for the
time being have to be deferred.
Pray do not misunderstand one. No one is to blame. It was just that
uncontrollable conditions arose, and we might as well blame the Creator
as the American Government. Men responsible for the Government of States
have just to make the best of circumstances. The necessity for the recess
came as one of the consequences of the effort that was being made to combat
American conditions, and it was unfortunate for the Conference.
What more can be said? The cordial message I have had to-day from
the President shows that he is one with us in our labors.
The countries most frightened by the unsteady movements of the dollar
were those still on the gold standard. They believed that their own currencies were threatened and that they were exposed to grave dangers by 'Tenlators who are acting at present on reviving industry and confidence as
locusts on a thriving field of corn.
Most of these countries had already gone through terrible experiences
in inflation, which had brought important sections of their people to ruin,
had impoverished their working classes, and had exposed them to political
revolution. They were not going to have that again if they could help it.
Memory of the nightmare of currency collapse made the representatives
of those countries where it had been experienced rigid against any suggestion or even discussion of any suggestion, however reasonable or desirable,
which might disturb public sentiment in their countries and might plunge
them again into that pit of uncertainty.
Some difficulties had been foreseen by us, and had conditions remained
where they were in May or June they could have been overcome by some
temporary agreement that would have carried the Conference on until the
conditions for a more permanent settlement had arisen. Conditions had
changed catastrophically, however, and in the great uncertainty, no agreement was found to be possible.
Agreemertt Possible But Not in Hurry.
I am sure that an agreement is possible, but not in a hurry. We must
work away at it as soon as circumstances permit. In any event, this
momentary difficulty will be one of our immediate concerns. Its settlement
will open the way to an agreement on the principles which should underlie
sound tariff and quota policies, among other things.
You have all heard that the Conference is the biggest and the most representative that has ever assembled under one roof. You have been told that
over 60 nations are there, with their diversities of race, language, interests
and social and political conceptions, that the list includes six Prime Ministers,
seven Foreign Secretaries, seven Ministers of Finance and so on.
I wish you could have seen the actual meetings and could have been
present, say, at those daily conferences of the various chairmen and rapporteurs with their experts, which have met in my room, to keep it working
and to see that everything was moving systematically and that no point of
importance was being overlooked.
They were a severe business assembly, and yet with those Ministers and
those experts whose advice decides the course not only of national but of
world policies, all sitting around the same table, discussing, proposing,
amending, negotiating, there was something more than the spirit of mere
business in our midst. There was also something of a fulfilling prophecy
of hope, a whisper of the imperishable approach of world co-operation, an
embodiment of the lilt, "It's coming yet, for a' that."
Cites Value of Conferences.
Do not believe what you read about the failure and uselessness of
these
Conferences. Several have been held since the war. They have all, In
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varying degrees, revealed obstacles in the way of unity of action, and yet
every one has contributed something to the final success of world co-operation.
Imagine what the world would have been without them. They are the
pioneers of a new system of world co-operation, the inevitable result of
democracy active in world affairs. They are not to spring at once into fullfledged efficiency. Their beginnings must be beset by impediments and partial success for a time. Temporary difficulties must not be exaggerated.
It would have been a miracle, in view of the size of this Conference, the
nature of its business, the uncertain conditions of the world, had this one
not been held up at some point. But do remember that to be held up is not
to be ended. The obstacles are removable and they will be removed.
We are not only trying to discover how the economic state of the world
Is to be improved, but we are part of the great tendency to strengthen the
mind of mutual aid and international co-operation as the way to peace.
The personal meetings and exchange of views as to world policy of themselves made a great gain fully appreciated only by those who have taken
part in them.
Let me mention some of the big issues with which the Conference has
been charged to deal. Generally, our work is to devise ways and means of
bringing about a revival of world trade and to remove the causes which
led to the present disastrous collapse.
We wasted no time in getting down to business. Opportunity had to be
given at the outset for the leading delegates to explain generally the conditions of their own countries, their particular problems, and the policies which
they favored. Thirty-four delegates spoke, but at the end of the third day
we were in a position to set up a scheme of committees and commissions to
each of which were assigned the various questions and groups of questions
which composed our very lengthy agenda.
Work went rapidly during the first fortnight or three weeks, when various
Important committees were confronted with the difficulty whiah I explained
a few minutes ago. Then came the pause.
Debts as Well as Monetary Questions Had to Be Considered.
Another question besides this monetary one we have had to consider is
debts. It has been repeatedly said during the meetings of the Conference
that until the nations face the problem of their debts, there can be no
healthy recovery in trade. Debts are partly governmental and partly private.
During the war and for a considerable time after it, a great many nations
had been living and meeting obligations by borrowing.
Now they have to face up to their burdens and their commitments. Debts
contracted far above the capacity of countries to pay, together with policies
which prevent goods being sent in payment, are now the bane of every Finance
Minister and every enterprising business man. At the present level of prices,
the nations of the world cannot carry their debts, and the sooner we all
recognize that the better.
The Conference was no place to discuss intergovernmental debts on account of its composition, but other debts have to be studied by it in order
to set up the right machinery for dealing with them.
Here again we get back to the need for greater co-operation in financial
and economic policies to restore the international movement of goods and
services. Debts are so heavy because prices have fallen so much. Increase
prices, especially by extra consumption, and the burden of debt is lowered.
This is another of the questions which is being carried away by chairmen and
members of committees who will meet again in due time to work at solutions.
1Vorld Wholesale Prices Have to Be raised.
There is universal agreement that the world wholesale prices of primary
products will have to be raised. For one reason or another, they have fallen
well below economic levels. Fields have gone out of cultivation, or, if
cultivated, bring only a rich harvest of losses.
There are people who tell the consumer that these higher prices are all
to his detriment. Never was there a more short-sighted view than that.
The consumer cannot live on bread which is cheap by reason of the ruin of
agriculture. The great democratic movements in trade and commerce, the
trade union and the co-operative movements are not so blind to their permanent interests as to commit themselves to the doctrine of cheapness at
any price and upon any one's sacrifice.
Upright people must feel that the producers of everything which they
consume should enjoy a fair return for their labor. The effect of an uneconomic price, whether it is for labor in the fields or in the workshops,
Is to starve consumption at its very root, and one of the reasons why engineers, cotton operatives and others are unemployed in Great Britain is the
conditions in India and the condition of the farmers in the Middle West
States of America, in Australia, New Zealand, Canada, who have, for a long
time, failed to get a due reward for their labor in the markets of the world.
The Conference has to approach this question of raising prices in different
ways.
First of all, there is the question of increasing consumption. It is a disgrace to our civilization that in a world of plenty millions of human beings
In many nations should be underfed and underclothed.
If we could restore the purchasing power of the nations which have been
impoverished and expand our resources by a greater employment of the
people we might, in time, get rid of the present excess of production and
the menace of the possibility of overproduction.
In the meantime, however, we have to face the question of controlling
production. What, in the name of common sense, can any one object to in
that rational and well-thought-out scheme for limiting production in relation
to market demand? So great is now our power of production that to give
it absolutely free play would not only, as was once the case, prevent the
dangers of monopoly and cornering but would make it impossible for producers, on account of the volume of production, to secure economic prices
for their goods in an uncontrolled market.
The danger of this control is very well known. Those of us who see that
It has to be applied, at any rate as a temporary measure, are fully aware
of those dangers and are trying to provide against them. But in working
It out, I think it will be found that the dangers, when they are arrayed on
paper are really more theoretical than practical.
All these old conditions of the absolute free market and the complete
safety of uncontrolled production have changed within recent years,
and
though our bodies may be old, the minds we bring to bear upon these problems, the problems of a new world, must be flexible and young.
Wheat Producing Problem.
At the moment it seems to me that you can limit production by the bankruptcy of the producer or by reason. I confess I prefer to try the latter.
Therefore, one of the most interesting of the questions which various committees of the Conference are considering is whether it is possible, and
if
so, how, to get the wheat-producing countries, like the United States,
Canada,
Argentina and Australia, to come to an agreement upon the volume of
pro-
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duction whith. they are to market, and, as a consequence, to come also to an
agreement with the wheat-consuming countries regarding the marketing arrangements that they are•making.
'
Representatives of countries producing other supplies in great bulk are
engaged in similar consideration. The task they have in front of them
is an enormously complicated one. Agreement, if they could reach it, would
be one of the greatest landmarks in the evolution of the rational control of
commodities.
But what you and I have to assume is this: As the world gets smaller
and man's power gets more and more gigantic, as he harnesses natural forces
to his' service, unco-ordinated individualism means death, not life; misery,
not comfort.
The workers of all nations will find themselves involved in general ruin,
and civilization itself will revert to barbarism. But man will be crushed
down by his own.
These are some of the big subjects now under active review. I just mention them in order that you may have a general idea of what the Conference is and the work that is set before it.
Have any of you attended a town council, a national assembly of a church,
a co-operative or trade-union congress? If you have, consider the comparative simplicity of your work, the general and undetailed nature of the resolutions which take so long to draft and which are passed with so many flaws
and unconsidered consequences.
Remember the time it takes you to get such simple work done, and then
try to understand the work which is being carried on in the busy life of
South Kensington, where the Prime Ministers and Foreign Ministers and
Ministers of Commerce and Finance know that a slip, an unconsidered consequence, a shoddy decision will produce results for which they will blame
themselves for many years and for which their nations will suffer.
Conference Adjourns But Does Not End.
You at your fireside will be sure to think that we at the committee tables
are slow. I cannot blame you. I am impatient myself. But remember this
—the Conference adjourns but does not end. We go on holidays, which
amount to nothing more than that the work done hitherto in South Kensington is pursued in another place and in other rooms. We shall return to the
committee rooms and the assembly halls in due time, and there, I believe,
with wise agreements which will help the world to put behind it these
last
years of depression, of starved trade and of economic movements which
have
made men and women very poor. Goodnight!
$5,000,000 is Cost of World Economic and Monetary
Conference at London.
Conservatively, the entire cost of the International and
Monetary Conference at London is put at $5,000,000, it was
stated in a London wireless message, July 29, to the New
York "Times" which also said in part:
The Conference's social side was even more costly than the official side.
Britain agreed to bear the additional cost of holding the Conference here
Instead of in Geneva, estimated at $l00.000. The British Government also
stands the further charge of $38,000 for alterations to the Geological
Museum.
The government's hospitality probably cost no less than $250,000. One
Item alone, the Guild Hall banquet for 850 guests, cost $10,000.
"The City"—financial London—is believed to have spent $100,000 also
In entertaining the Conference. Actually the Conference has been the
most expensive ever held. The expenses of the other principal governments
also were heavy.
The French delegation received a preliminary allocation of $130,000.
The large German delegation was even costlier. The American delegation.
although the personal expenses of its delegates were severely restricted, run
up a heavy bill by transport, cable and trans-atlantic telephone expenditure.
But the Conference brought prosperity to London hotels, restaurants and
shops, as the wives and families of the delegates spent money freely.
The Conference happened to coincide with the gayest and most crowded
time of year. It has been like a three-ring circus, for the foreign visitors
have scarcely known which particular event to take in of the many going on
simultaneously.
As to weather, the foreigners agreed that Britain had been
libeled, for
little was left to be desired in the way of fair skies. It was London's best
season. Already many delegates are discussing return visits, without any
thought of international deliberations to interfere with their pleasures.
Senator Couzens, Returning from London Conference,
Says Parley May Have Laid Basis for Future
Understanding—Disappointed in Outcome, He
Nevertheless Declares It Was Not a Failure—
Other American Delegates Leave England.
Senator James M. Couzens of Michigan, a member of the
United States delegation to the World Monetary and Economic Conference, arrived in New York from London on
July 27, and declared to reporters who met his vessel that
the Conference had not been a failure. Senator Couzens said
that he was disappointed in the outcome, but that he believed
fruitful seeds had been sown and that the Conference had
helped to produce international understanding. The principal achievements, he added, would be the conclusion of
multi-lateral and bi-lateral trade agreements between different countries. Senator Couzens had left London several days
before other members of the American delegation. Secretary
of State Hull and most of the technical and
clerical force
sailed from England for the United States on July 27.
James
M. Cox said that he would remain in England until the
middle
of August. Senator Pittman sailed for New York on
July 29.
A partial account of the interview with Senator
Couzens.
after his arrival in New York on July 27, is quoted
below
from the New York "Times" of the following day:
When Senator Couzens left for London he said that if
the Conference
failed he would return to America as a rabid isolationist.
He did not so
appear yesterday.
He would not discuss the Conference in detail, saying'this
should be left
to Secretary Cordell Hull, head of the delegation.
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Financial Chronicle
"The anticipated action of the Conference to-day in plenary session indicates that it will be left to what the League of Nations calls a Bureau and
what we call generally in this country a Steering COmmittee," he said.
In reply to a question as to the possibility of a future resumption of the
Conference, he continued:
"Our country is represented on this Bureau by the Secretary of State, who
has faithfully attended all the meetings, and I am perfectly willing to leave
it to him to decide whether the Conference is likely to meet again."
Senator Couzens, who was the only Republican member of the American
delegation, said he felt about the Conference much as he did when he went
to Europe 30 years ago to introduce and sell Ford automobiles.
"I found spots that were very encouraging and other spots that were discouraging," he declared.
"One advantage of such conventions is that they establish contacts which
could not have been brought about in any other way. Like at a meeting of
the Chamber of Commerce, so with the Economic Conference, innocuous
resolutions were passed, but that cannot be judged as a finality of the
Conference.
Holds Nations Learned Much.
"Out of the weeks of meetings, discussions and speeches I felt the seed
had been sown which will be of benefit eventually. We have found out
what things cannot be done which before the Conference we thought might
be done. Whatever the results of the Conference, certainly the representatives of the 66 nations learned a great deal."
The Senator was questioned on the attitude of Europeans toward President
Roosevelt's strict guidance of the American delegation.
"As far as I was able to observe, most everyone was in the frame of mind
of watchful waiting to see the outcome of the admitted experiment which
the country is undertaking," he replied. "Most every country, with the
possible exception of the gold bloc, was hopeful and expressed considerable
confidence. No one ever intimated, as I recall, a lack of good faith on the
part of the President.
"It must be borne in mind that there was nothing in the agenda which
ever suggested any temporary stabilization of international currency, but
the agenda does refer to the establishment of a permanent international
monetary system," he explained. "But in spite of that, the European gold
standard countries, out of a clear sky, sprang a temporary stabilization plan
upon us.
"Now I must make it perfectly plain that our directions and instructions
were that we were not to deal with any temporary stabilization plan, and
all the events which took place in connection with this matter were conducted by the President and his own Treasury representatives.
"I want to emphasize this fact because I am afraid the American press
aid not make it clear to the public that separate authorities dealt with this
question at the Conference."
Senator Pittman Predicts Final Accord When World
Monetary and Economic Conference Reconvenes—
Says War or Peace Will Be the Issue—Silver Compact Termed "Epochal."
When the World Monetary and Economic Conference reconvenes its final results will decide the issue of war or
peace, according to Senator Key Pittman, member of the
United States delegation to the conference, in a radio broadcast from London on July 31. Senator Pittman said that
all delegates desired peace, but that behind each delegation
sat a dictator whose "name was Economic Nationalism. He
would not surrender a single thing. No nation can win
everything forever. Governments, like individuals, must
have friends and cordial relations and commercial intercourse." Further extracts from his address, as reported by
the New York "Times" on Aug. 1, follow:
"It seems evident to me that the 66 nations who desire peace and prosperity are dependent upon the actions of a few powerful countries. It is
difficult for these countries to agree. It is a historical fact that there has
always been disagreement between them, for their interests, when they lie
In the same fields, are always in conflict. It Is perfectly natural for these
powerful countries to disagree.
"This conference was called in order that the points of difference might
fairly and frankly be discussed and the differences ironed out, and we
have every reason to believe that as a result bases will be established which
will make possible a give and take that will preserve peace for many years."
Senator Pittman admitted that In a sense" the economic conference
had been premature. But he said the conference had laid a basis for
remedying "the deceit of depreciating money." which causes the disruption
of values in international exchange.
Silver Agreement.
Of the agreement on silver, in the negotiation of which he was the leading
figure, the Senator said:
"It seems to me that the unanimous determination of the conference to
restore the monetary value of silver is epochal. The agreement with
reference to silver I consider the most remarkable multilateral agreement
ever entered into between governments and of itself alone it would have
justified this conference.
"This will restore the purchasing power of the people of India,China
and the rest of the Orient who constitute over one-half of the people of
the world. With this purchasing power restored, the surpluses of other
nations of the world will quickly disappear and prosperity will be upon us
before we can realize it."
Declaration of British Empire Delegates on Financial
and Monetary Policy----Views Recorded Following
Adjournment of National Monetary and Economic
Conference.
In our issue of July 29, page 772, we published an item
with reference to a general agreement announced on July 27
by the British Commonwealth of Nations indicative of a
single monetary policy for the United Kingdom and all the
Dominions except the Irish Free State. The agreement or
declaration, which was issued by the British Empire delegates to the International Monetary and Economic Conference, was given as follows in London advices July 28 to the
New York "Times":
Aug. 5 1933
Now that the World Economic and Monetary Conference has adjourned,
the undersigned delegations of British Coimnonwealths consider it appropriate to put on record their views on some of the more important matters
of financial and monetary policy raised but not decided at the Conference.
During the course of the Conference they had an opportunity for consulting
together and reviewing in the light of present-day conditions the conclusions
arrived at at Ottawa a year ago in so far as they had reference to issues
before the Conference.
The undersigned delegations are satisfied the Ottawa agreements have
already had beneficial effects on many branches of inter-imperial trade and
that this process is likely to continue as the purchasing power of the various
countries concerned increases. While there has not been sufficient time to
give full effect to the various agreements made, they are convinced the general principles agreed upon are sound.
The undersigned delegations reaffirm their conviction that the lowering
or the removal of barriers between countries of the empire, provided for in
the Ottawa agreements, will not only facilitate the flow of goods between
them but stimulate and increase the trade of the world.
Stand at Ottawa Recalled.
The delegations now desire to draw attention to the principles of monetary
and financial policy which emerged from the work of both the Ottawa and
World Conferences and which are of utmost importance for the countries
within the British Commonwealth. The following paragraphs embody their
views regarding principles of policy which they consider desirable for theit
countries:
At Ottawa the governments represented declared their view that a rise
throughout the world in the general level of wholesale prices was in the
highest degree desirable and stated they were anxious to co-operate with
other nations in any practicable measures for raising wholesale prices. They
agreed that a rise in prices could not be effected by monetary action alone,
since various other factors which combined to bring about the present depression must also be modified or removed before a remedy is assured.
It was indicated that international action would be needed to remove the
various non-monetary factors which were depressing the level of prices.
In the monetary sphere the primary line of action toward a rise of prices
was stated to be the creation and maintenance, within the limits of sound
finance, of such conditions as would assist in the revival of enterprise and
trade, including low rates of interest and an abundance of short-term money.
Inflationary creation of additional means of payment to finance public
expenditure was deprecated and an orderly monetary policy was demanded,
with safeguards to limit the scope of violent speculative movements of commodities and securities.
Price Rises Welcomed.
Since then the policy of the British Commonwealth has been directed to
raising prices. The undersigned delegations note with satisfaction that this
policy has been attended with an encouraging measure of success. For some
months, indeed, it had to encounter obstacles arising from the continuance
of a downward trend of gold prices, and during that period the results
achieved were in the main limited to raising prices under empire currencies
relatively to gold prices.
In the last few months the persistent adherence of the United Kingdom
to the policy of cheap and plentiful money had been checked for the time
being by the change of policy of the United States and by the halt in the
fall of gold prices.
Taking the whole period from June 29 1932, just before the assembly of
the Ottawa Conference, a rise in sterling wholesale prices has taken place
of 12%, according to "The Economist" index. The rise in sterling prices of
primary products during the same period has been much more substantial,
being in the neighborhood of 20%.
The undersigned delegations are of the opinion that the views they expressed at Ottawa regarding the necessity of a rise in the price level still
hold good and that it is of the greatest importance that this rise, which has
begun, should continue. Regarding the ultimate level to be aimed at, they
do not consider it practicable to state this in precise terms.
Any price level would be satisfactory which restores normal activity of
industry and employment, which insures an economic return to the producer
of primary commodities and which harmonizes the burden of debts and fixed
charges with economic capacity. It is important that the rise in prices
should not be carried to such an extent as to produce an inflated scale of
profits and threaten a disturbance of equilibrium in the opposite direction.
They therefore consider that the governments of the British Commonwealth
should persist by all the means in their power, whether monetary or economic, within the limits of sound finance, in the policy of furthering the
rise in wholesale prices until there is evidence that equilibrium has been
re-established, and that, thereupon, they should take whatever measures
vossible to stabilize the position thus attained.
Position on Public Works.
With reference to the proposal which has been made from time to time
for expansion of government programs of capital outlay, the British Ccrmmonwealth delegations consider this is a matter which must be dealt with
by each government in the light of its own experience and its own conditions.
The Ottawa Conference declared that the ultimate aim of monetary policy
must be the restoration of a satisfactory international monetary standard,
having in mind not merely stable exchange rates between all countries but
the deliberate management of the international standard in such manner as
to ensure the smooth and efficient working of international trade and finance.
The principal conditions precedent to re-establishment of any international
monetary standard were stated, particularly a rise in the general level of
commodity prices in the various countries to a height -more in keeping with
the level of costs, including the burden of debt and other fixed and semifixed charges, and the Conference expressed its sense of importance of securing and maintaining international co-operation with a view to avoiding, as
far as practicable, wide fluctuations in the purchasing power of the standard
of value.
The undersigned delegations now reaffirm their view that the ultimate
aim of monetary policy should be the restoration of a satisfactory international gold standard, under which international co-operation would be secured
and maintained with a view to avoiding so far as may be found practicable
undue fluctuations in the purchasing power of gold.
The problem with which the world is faced is to reconcile the stability
of exchange rates with a reasonable measure of stability not merely in
the
price level of a particular country but in world prices. Effective action
in
this matter must largely depend on international co-operation, and in any
further sessions of the World Conference this subject must have
specii;1
prominence.
Stable Exchange Stressed.
In the meantime the undersigned delegations recognize the importance
of
the stability of exchange rates between the countries of the empire in
the
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Financial Chronicle
Interests of trade. This objective will constantly be kept in mind in determining their monetary policy and its achievement will be aided by pursuit
of a common policy of raising price levels.
In the interim, imperial stability of exchange rates is facilitated by the
fact that the United Kingdom Government has no commitments to other
countries regarding the future management of sterling and retains complete
freedom of action in this respect. Adherence of other countries to a policy
on similar lines would make possible the attainment and maintenance of
exchange stability over a still wider area.
Among the factors working for the economic recovery of the countries
of the Commonwealth, special importance attaches to the decline in the rate
of interest on long-term loans. The undersigned delegations note with satisfaction the progress which has been made in that direction as well as in the
resumption of overseas lending by the London market. They agree that
further advances on these lines will be beneficial as and when they can
be made.
The undersigned delegations have agreed that they will recommend to
their governments to consult with one another from time to time on their
monetary and economic policy with a view to establishing their common purpose and to framing such measures as may conduce towards its achievement.
This declaration has been signed on behalf of the respective delegations
by Neville Chamberlain (United Kingdom), R. B. Bennett (Canada), S. M.
Bruce (Australia), G. W. Forbes (New Zealand), General J. C. Smuts (South
Africa), Sir Henry Strakosch (India).
The declaration has not been signed by the representative of the Irish
Free State, who has referred the matter to his Government.
No Premium on United States Money Orders Drawn on
Canada When Discount Rate Is Under 5%.
The Canadian Postal Administration will no longer pay a
premium on United States money orders issued for payment
in Canada when the discount on the Canadian dollar is 5%
or less, according to an announcement on July 27 by Postmaster Kiely of New York City. The announcement said:
Postmaster Kiely announces that the Canadian Postal Administration
has advised the Department at Washington that in view of the reduction
in the rate of discount on the Canadian dollar, it is not practicable to pay a
premium on United States money orders issued for payment in Canada,
when the discount is 5% or less.
It is further stated that if exchange values fluctuate to a point exceeding
5% discount,immediate consideration will be given the question ofresuming
the payment of a premium.
The above information is given to prevent any misunderstanding on the
part of remitters as to what amount the payees will receive.
5% Tax on Interest on Canadian Securities Paid in
Foreign Currency at Premium not to Apply Where
Exchange Premium is 5% or Less.
From the Canadian "Financial Post" of July 22 we take
the following:
Canadian Government tax of 5% on interest and dividends on Canadian
securities paid in a foreign currency at a premium will not apply in future
where the premium on the foreign currency is 5% or less. This means
that Canadian holders of Canadian securities payable in American funds at
5% or lower premium will not be liable for the tax. This amendment to
the tax has been made by order-in-council, and was necessitated by the
recent foreign exchange developments which caused the United States dollar
to drop to about a 5% premium over the Canadian unit.
The exchange rate which will rule on bearer coupons will be that prevailing on the date of presentation for payment. On cheques issued to
shareholders or bondholders of record some days before the payment date,
the exchange rate will be taken as that of 15 days prior to the date of payment of interest or dividends. This is to allow early issuance of cheques
with the tax deducted, if applicable.
Reason for Change.
The reason for the change in the tax is that the exchange rate on American funds has recently dropped to less than 5% premium. If the tax were
deducted from payments on this basis, it would reduce the interest or dividend payment to less than the nominal amount payable. In this case
holders would not take payment in American funds. The change does not
apply to payments to Canadians in sterling at the present rate of exchange
(about $5). Sterling payments to Canadians have not been taxable on this
basis yet because the pound had not risen to a premium in Canada until
recently. But if sterling goes above $5.11 in Canada. the tax will apply.
The 5% tax was imposed last March and came into effect May 1. It
applied to Canadian holders of securities on which American funds could
be demanded for interest or dividends at the holder's option. At that
time the exchange rate on the United States was varying 10 and 15%.
The object of the tax was to produce revenue from an increment accruing to
Canadian holders of United States payment securities on which a substantial premium was being realized by Canadian investors.
France Paying Great Britain $67,500,000 on Loan.
Under date of Aug. 1, Associated Press advices from Paris
said:
The French Treasury began to-day to repay a British loan of £30,000,000
(currently about $134,000,000) made late in April by a group of English
banks.
half the sum is payable now, and the remainder in three months.
951
The British credit, according to the initial announcement by Finance
Minister Bonnet, bears 2% interest. At the time it was indicated that the
purpose of the financing was to finance the budget.
Comments by the New York papers Aug. 2 is quoted as
follows:
Finance Minister Georges Bonnet of France, in announcing the loan
for April 29, said the transaction was for six months at 2X %. The Bank
of France and the Treasury guaranteed it.
It was explained that the loan was made in England because the French
market was not able then to absorb a bond issue. Financial quarters expected British banks to obtain francs form the British equalization fund,
which had been a heavy purchaser of the franc in order to keep the pound
rate low. This, it was said, would protect the gold stores of the Bank of
France.
Bank of England to Cut Pay.
In a London cablegram to the New York "Times," it was
stated that members of the staff of the Bank of England
were informed on Aug. 3 that their salaries would be cut
about 10%. The cablegram also said:
The news came as a shock, as the Bank has been building costly new
premises, has continued paying the stockholders a dividend of 12% from
Its profits and recently doubled the maximum allotment for directors' fees.
The first salary reduction will be effective next March and it will be
followed by further reductions in March of the following three years. The
decision means a reduction in the Bank's payroll approaching £100,000
[currently about $453,0001 yearly.
Delay in Completing Negotiations in Germany Incident
to Utilization of Blocked Marks Retained by
Reichsbank under Partial Transfer Moratorium—
Use of Scrip Would Be Limited to Purchase of
Additional German Exports.
The following Berlin advices July 10 are from the New
York "Times":
The first internal negotiations between the Reichsbank and the committee of Germany's creditors regarding utilization of the blocked marks
retained by the Reichsbank under Germany's partial transfer moratorium
have ended without authority to conclude agreements.
The committee will merely report to the various creditor groups.
The main difficulty, apparently, is over the effort of Germany to finance
the forced expansion of her export trade with money with-held from her
creditors. About this the creditors are displaying little enthusiasm. In
German eyes, Americans are worst offenders in this respect, and criticism
about American reluctance to organize to trade in scrip offered by foreign
creditors for the untransferred part of Germany's interest payments is
becoming audible.
The United States, comments the "Tageblatt," would rather promote
her own exports than safeguard the interests of American creditors by
facilitating additional German exports.
The use of scrip, it appears, would be limited mainly to the purchase
of "additional German exports"—that is, exports above normal trade.
Since the scrip is expected to sell abroad at about half its normal value,
while the German exporter accepting it in payment would be able to redeem it at home at full value, he could still sell his goods abroad at half
the regular price and make a profit.
The creditor, on the other hand, would pay a 50% discount and exchange loss, since interest on dollar obligations is paid at the current rate
of exchange.
It appears that the way is being paved to favor those countries that
are willing to accept those "additional German exports" at the expense
of those that are unwilling to do so.
Efforts of Free State of Prussia to Make Full Dollar
Payments on External Loan of 1924 —Restrictions
on Use of Reichsmark Instrument, Which Will
Represent 50% of Sept. 15 Interest —Drawing
Through Sinking Fund.
The Free State of Prussia is notifying holders of its 63/2%
sinking fund bonds, external loan of 1926, that, while it is
prohibited by law from transmitting funds necessary to
pay the interest and redemption price due Sept. 15, it will
continue its efforts to obtain permission to make the full
dollar payments. It is noted that:
The German Government's decree of June 9 requires the deposit with
the Conversion Bank for Foreign Debts of the reichsmark equivalent of
the interest and redemption price. The Reichsbank has indicated that
permission will be given in due course to transmit in dollars 50% of the
interest due Sept. 15, with the remaining 50% to be paid in the form of a
reichsmark instrument, evidencing deposit in ,the Conversion Bank. Restrictions will be placed upon the use to which holders of these instruments
may put the reichsmarks so deposited. Holders of the bonds will be
notified when any arrangements for the payment of interest become
operative.
Through Brcwn Brothers Harriman & Co., as fiscal agents,
it is announced that the usual drawing for redemption
through the sinking fund on Sept. 15 has been made.
A cablegram Aug. 1 from Paris had tbe following to say:
The British credit of £15,000,000 opened late in April for the French
Treasury is now being repaid. Half of the amount is to be paid at once
as the obligations fall due. The remainder falls due in three months.
The Bank of France still holds substantial foreign balances and these will
be drawn upon in payment of the debt. Foreign exchange holdings of
the bank for the week ended Aug. 10 will show a reduction of approximately
1,250,000,000 francs. There will be a corresponding drop on the liabilities
side of Treasury deposits.
According to reports here, there was no preparation for repayment
through preliminary purchases of sterling in the open market. On the
contrary, it has been the policy of the bank over a long period to reduce
constantly its holdings of foreign exchange in order to avoid exchange risks.
When the Bank first took heavy losses on sterling back in 1931 this was
agreed upod in a contract with the Treasury which made up the Bank's
losses,
Gain in Reserves at German Reichsbank —Transfer
of 50% of Bond Interest Seems Assured for Rest
of Year—Light on Schacht Plan —Returns Indicate that Action on Debt Was More Drastic than.
Necessary.
From its Berlin correspondent July 29 the New York
"Times" reported the following:
The uninterrupted increase in the Reichsbank's reserves since the end
of June is taken to indicate that the transfer of 50% of the bond interest
is assured till the end of the year. The increase, however, is partly attributable to a return of "flight capital" in consequence of the new law treating
violations of exchange regulations as treason. This latter source, however.
is temporary.
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Financial Chronicle
The Reichsbank's returns prove that the 50% reduction of bond transfers
was more drastic than was necessary, and shows Dr. Schacht's motive
was not merely to prevent depletion of reserves but actually to replenish
them.
Return to full transfer is problematical. It requires, first of all, mitigation of C overnment's semi-autarchistic foreign trade policy, which impedes
exports more than it reduces imports. Apart from ambition to strengthen
the Reichsbank's reserves at a cost to bondholders, Germany has a strong
interest in not resuming full transfer.
The untransferred cash will certainly be used for financing either the
Government's work-creation plans or private industry. Also German
debtor concerns, which henceforth pay interest in marks on the basis of
dollar and sterling depreciation, count on relief from further depreciation.
German holders of external bonds lose nothing whatever, as they are getting
100% of their interest paid promptly in marks. Finally, there is continued
strong Nazi agitation against "international capital," behind which Chancellor Hitler personally stands.
Dr. Schacht's policy is to keep the Reichsbank's exchange reserves barely
sufficient to meet importers' current demands and convert the residue of
exchange into gold, thereby obviating a loss if depreciation continues.
The Reichsbank seeks eitber to buy gold from Russia or convert superfluous exchange into gold in the free gold market. Ten million marks
additional gold in the last return was acquired in this way in Paris. Dr.
Schacht has consistently championed a gold reserve in preference to exchange; in fact, in 1923 he opposed the rentemark project on the ground
that the new mark ought to have a gold basis.
President Schacht of German Reichsbank Favors
Limited Parleys—Specific Problems Should Be
Discussed by Interested Nations Only, He Says—
Opposes Devaluation—Not Worth While Regretting Failure of London Conference.
in a radio talk from Berlin on July 30, broadcast in this
country over a NBC network, Dr. Hjalmar Schacht, President of the Reichsbank, said Germany was convinced of the
failure of the World Economic Conference at London and,
in the future. would conduct her economic and politicll
negctiations exclusively with the nations and parties directly
concerned. We quote from the New York "Times" of
July 31, which also had the following to say:
Dr. Schacht, who was interviewed by William Hard, NBC commentator,
expressed the opinion that it was not worth while regretting the failure
at London.
"It is true," he said, "that the lack of agreement about currency stabilization was the reason for the breaking up of tbe Conference. But,even
had an agreement been reached on the stabilization question, I feel that
the Conference would never have been a success.
"There are two great problems which face the world," he declared.
"One of them is the problem of debt, international and internal. As far
as international debts are concerned, they have derived in part from political
and not from economic reasons, and I feel that they cannot be settled
except in the course of political settlements. Such settlements lie naturally
outside of the sphere of economic conferences.
"As far as internal indebtedness is concerned, it is primarily a problem
of internal, which means national, politics. I take the liberty of saying
that in my opinion depreciating the currency is not a suitable means for
solving the debt problem. I believe there are more natural means, such
as reduction of interest or even of principal, or such as reduction of taxes
pressing upon the debtor and similar matters of help by the State.
"In no case, however, can I believe that the co-operation, for instance,
of Afghanistan, Luxembourg or Paraguay in the World Economic Conference could have been a deciding factor in solving these problems.
"The second problem is unemployment. In this connection, too, I
cannot imagine that the before-named or similar countries can materially
assist in solving the problem of, for instance, American or German unemployment. This is just a question of an absolutely internal policy.
"If, therefore, in the future we shall have economic conferences, let us
have conferences devoted to specific problems and attended only by those
Immediately interested in those problems."
"Financial and Economic Review" of Amsterdamsche
Bank, N.Y., of Amsterdam, Holland.
The Statistical Department of the Amsterdamsche Bank,
N. V., of Amsterdam, Holland, has released its 36th issue of
the "Financial and Economic Review." The review, which is
Issued quarterly by the bank, contains a detailed report on
all circumstances that have been of influence on the financial and economic conditions of that country during the
second quarter of the year 1933.
It is usually preceded by an article written by some authority on the subject dealt with. This time an article has
been inserted written by Dr. D. Tollenaar, Agricultural Engineer, Director of the Experimental Station for Vorstenlanden Tobacco. The article is entitled: "Tobacco in the
Dutch East Indies."
Spain Recognizes Soviet Russia—Trade Treaty to Be
Negotiated Immediately.
The Soviet Union was formally recognized by the Republic
of Spain on July 27, when President Alcala Zamora at a
Cabinet meeting endorsed a Cabinet decision to open
diplomatic and commercial relations with Russia. It was
announced that a commercial treaty between the two countries would be negotiated immediately. Spanish recognition
of Russia brings to 20 the total of countries that have accorded formal recognition. Describing the action of President Zamora, a Madrid dispatch to the New York "Times"
on July 27 said:
Aug. 5 1933
The method of openinq relations is interesting. A note was to be transmitted to Russia at the same moment that a similar note was being sent
from Moscow to Madrid. The Spanish note, addressed to Maxim Litvinoff, Soviet Foreign Commissar, reads:
"I have the honor to inform you that the Government of the Spanish
Republic, impelled by a desire for consolidating the general peace and reestablishing friendly relations between the people of Spain and the Union
of Soviet Socialist.Republics recognizes de facto and de jure the Government of the Union of Soviet Socialist Republics as the only legal and sovereign Government.
"The Spanish Government considers it necessary to open diplomatic
and economic relations between the two nations and it is proposed to proceed with an immediate exchange of Ambassadors and begin negotiations
to establish a commercial treaty.
FERNANDO DE LOS RIOS,
Minister of State.
Tenders Invited by J. P. Morgan & Co. and National
City Bank for Purchase for Sinking Fund of
Bonds of Argentina.
J. P. Morgan & Co. and The National City Bank of New
York, as fiscal agents, are notifying holders of Government
of the Argentine Nation external sinking fund 6% gold bonds,
issue of Feb. 1 1927, Sanitary Works Loan, due Feb. 1 1961,
that $213,493 in cash is available for the purchase for the
sinking fund of so many of these bonds as shall be tendered
and accepted for purchase at prices below par. Tenders of
bonds, with subsequent coupons attached, should be made,
at a flat price, below par, before 3 P. M. Aug. 31. If tenders
so accepted are not sufficient to exhaust the available funds,
additional purchases upon tender, below par, may be made
up to Oct. 30 1933.
4mImmin.10110mmmr
Chase National Bank Invites Tenders for Purchase for
Sinking Fund of Bonds of Government of Argentine
Nation.
The Chase National Bank of the City of New York, acting
for the fiscal agents, is notifying holders of the Government
of The Argentine Nation external sinking fund 51/% gold
bonds, issue of Feb. 1 1928, due Aug. 1 1962, that there is
available approximately $149,252.36 in cash for the purchase
for the sinking fund of so many of these bonds as shall be
tendered and accepted at prices below par. Tenders are invited before 3 P. M., Aug. 31 1933, at the Trust Department
of The Chase National Bank of the City d New York, 11
Broad St., New York City.
Rio de Janeiro Defaults Aug. 1 Interest on 63% External Gold Bonds of 1953.
White, Weld & Co. and Brown Brothers Harriman & Co.,
fiscal agents for the Rio de Janeiro 63/% external secured
sinking fund gold bonds, due Feb. 1 1953 announced on
July 31 that the interest due on the following day would
not be paid, since funds for that purpose had not been
received.
Funds Deposited for Payment of Aug. 1 Coupon on
8% Bonds, 1946, of External Debt of Republic of
Uruguay.
Holders of the external debt of the Republic of Uruguay
are notified by J. Varela, Minister of Uruguay that in line
with a decree dated July 3 1933, the Republic has deposited
the necessary funds for payment of the coupon due Aug. 1
1933, on the 8% bonds, 1946, in Montevideo to the order of
The National City Bank of New York, fiscal agents. Under
the terms of this decree the Government will deposit in
Mintevideo an amount in Uruguan pesos equivalent, at par
of exchange, to the interest to become due on its externak
long term debts. The pesos so deposited will be transferred,
from time to time, for payment to coupon holders consenting
to accept the same, at the rate of exchange prevailing at the
time of transfer.
Postponement of Argentine Tax on Insurance Sought
by New York State Superintendent of Insurance—
George S. Van Schaick in Appeal to Secretary Hull
Cites Effect on Trade with Application of Tax to
Marine Insurance.
As a result of representations by the Association of Marine
Underwriters of the United States that a pending decree of
the Republic of Argentina would have a serious effect upon
marine insurance on commerce between that country and the
United States, Superintendent of Insurance George S. Van
Schaick has requested Secretary of State Cordell Hull to seek
postponement of the operation of the decree to afford American marine underwriters an opportunity to present their
views to the Argentine Government. An announcement by
the New York State Insurance Department, July 20, from
wthich the above is taken, added:
Mr. Van Schaick was informed that the decree would impose a tax of 7%
on the premiums of all insurance placed with insurance companies outside
Volume 137
Financial Chronicle
of Argentina which have not been licensed in that country. The decree was
confirmed by the Argentine Congress and sanctioned in June of last year,
but its enforcement was suspended until a more careful study of the law
could be made and regulations to enforce it could be drafted.
Recent advices, according to information given Superintendent Van
Schaick, indicate that the law will probably be placed in effect in the
immediate future. Its operation, it was stated, would result in imposing a
heavy tax upon American imports into Argentina. While the decree apparently has a laudable purpose in seeking to discourage unlicensed insurance, it
is the opinion of Mr. Van Schaick that if its application to marine insurance
would result in an impairment of trade relations between Argentina and the
United States through the imposition of penalty taxes, the result would be
deplored. In addition, there is a possibility of retaliatory action on the part
of other nations and States which would further disrupt the free flow of
foreign trade.
The world-wide practice in the matter of marine insurance gives to importers and exporters the privilege of negotiating terms of trade which involve
a freedom of choice in the placement of marine insurance. An American
importer from Argentina may insure for his own account the marine perils
to which the property is subjected during the voyage or he may permit the
Argentine exporter to insure for his (the importer's) account.
Superintendent Van Schaick has asked Secretary Hull to request particulars concerning the pending decree and to solicit a postponement of its
operation as applied to marine insurance, in order to give American marine
underwriters an opportunity to make special representations in their own
behalf.
City of Cordoba, Argentina, Defaults Aug. 1 1933 Bond
Interest.
Interest due Aug. 1 on the 7% external sinking fund gold
bonds of 1927 of the City of Cordoba, Argentine Republic,
has been defaulted, according to an announcement by White,
Weld & Co., fiscal agents for the issue, on July 31. The
announcement said in part:
As fiscal agents for the loan, we regret to advise that the funds required
for the payment of interest due Aug. 1 1933 have not been received by us
from the City of Cordoba. Accordingly, we shall be obliged to refuse
payment of the interest coupons due on that date.
As previously announced, no funds have been received for the payment
of the coupons due Aug. 1 1932 or Feb. 1 1933 which are still in default.
Argentina Unemployed Number 333,997.
Associated Press advices from Buenos Aires stated that
the Ministry of Labor announced that day there were 333,997
unemployed in Argentina, an increase of 115,000 since
January 1932.
Argentina Debt $1,892,000,000.
Under date of July 28, Associated Press advices from
Buenos Aires said:
Argentina's public debt was estimated at about $1,892,000,000 in the
annual report to-day of the Bond and Shareholders Corp.
Argentine Banks Told to Cut Interest Rates—President
Justo Warns They Must Reduce Profits in "Difficult
Times"—Asks Voluntary Action—Otherwise Government Will Enact Emergency Laws.
Banks must reduce their interest rates and be content
with smaller profits was a Presidential ultimatum delivered
on July 29, according to a cablegram on that date to the
New York "Times," which also had the following to say:
President Agustin P. Justo uttered it to representatives of all national
and foreign banks after he had called them to the executive offices for a
conference.
"It is unreasonable," he told them, "that bankers should expect in
these difficult times to continue to obtain profits out of all proportion to
the profits obtained by the sources of production."
He cited an instance where one bank charged 103 % interest on loans
to farmers.
"Under such conditions," he added, "the farmer merely continues
working for his own ruin. The fact that the Government so far has permitted the banks to operate without official suggestions does not mean the
Government is indifferent toward the problems which are associated with
banking. On the contrary the Government has been giving close attention
to the conduct of the banks in the face of the increasing difficulties of
their debtors.
"I notice that all the private banks reduced the interest payable on
deposits and savings accounts as soon as the Bank of the Nation reduced
its rate, but none followed the Bank of the Nation's example in reducing
at the same time the interest chargeable on loans and discounts. This
Indicates an effort to obtain still higher profits." The President said it
was necessary for the banks to show more understanding of the difficult
situation of their debtors and that credit must not be further restricted.
"No matter how serious or general the bankers' difficulties may be,"
he went on "the difficulties of their debtors are even more serious and
more general."
He expressed the hope that the bankers would adopt adequate measures
without making it necessary for the Government to legislate emergency
laws for the reliefof debtors. He indicated that emergency control measures
would be enacted if the bankers failed to heed his suggestions.
Nicaragua Demands Duties in Gold.
By Tropical Radio the New York "Times" reported the
following from Managua July 16:
Because of fluctuating currencies, the Nicaragua Congress has passed a
measure requiring that customs duties be paid in gold cordobas, should the
Paper cordoba fall in value.
Nicaragua Increases Duties on Corn, Flour, &c.
The Nicaraguan Congress has passed a measure increasing
the import duties on corn, beans, rice and flour by 12%%,
953
effective immediately, according to advices by Tropical
Radio from Managua July 15 to the New York "Times" which
also stated:
The Atlantic coast is exempted from the duty on flour and beans because
of the difficulty of transportation. The measure is expected to stimulate
the use of native products. Large quantities of flour and rice are now imported.
Nicaragua Bars Foreign Labor.
Under date of July 9 a wireless message from Managua
said:
Because of the depression, President Sagasa has decreed that only Nicaraguans shall be permitted to work on Government wharves and vessels flying the Nicaraguan flag.
Legislation Curbing Insurance Concerns in Nicaragua.
Managua (Nicaragua) advices (by Tropical Radio) to the
New York "Times" stated:
The Congress passed to-day legislation requiring all insurance companies
to deposit securities to the value of $30,000 gold with the National Bank for
permission to continue operating.
Nicaragua Not to Sell Railways.
The following wireless message from Managua, July 30,
is from the New York "Times":
The Government denies a report that it plans to sell the National railways to a public utility company in the United States for $3,000,000. Until
1924 51% of the stock of the railways was owned by New York bankers,
but the Government at that time bought back all the stock.
Mexico Has No Nicaraguan Claim.
From Managua July 18 the New York "Times" reported the
following:
The Mexican Charge d'Affaires here, Ramundo Cuervo, announced to the
press that Mexico has no intention of presenting a claim in connection with
the Nicaraguan revolution of 1926. Mexico has re-established her legation
here, withdrawn in 1927. Some newspapers opposed to the present administration had stated the Mexican Legation was established in order to
collect a claim.
Changes in Japanese Banking System Recommended
by Economic Federation of Japan.
In its July 25 issue the New York "Journal of Coramemo" published the following special correspondence from
Yokohama, July 10:
Drastic changes in the Japanese banking system, particularly to extend
the use of central banking funds for industrial development, are recommended by the Economic Federation of Japan, a body embracing the
country's leading financiers, industrialists and merchants.
•In addition to expansion of the powers of the Bank of Japan to permit it
to extend funds to increase industrial activity, it is recommended that
Industry be given greater representation on the board of directors. It is
urged that the bank's capital be increased and that the Central Bank be
allowed to own shares in other banks.
Lending Powers.
At present the Bank of Japan is largely confined to discounting Government bills, bills of exchange and commercial paper. In addition the bank
lends on securities collateral, but its powers in this direction are considered
Insufficient, The Economic Federation urges that the Bank's charter be
changed to permit the eligibility of all sound and liquid debentures as
security for loans. It is also urged that special preference be given to
Hypothec and Industrial debentures so that the Central Bank may have
closer relationships with industry.
The funds required by industry reach huge amounts. The Hypothic
Bank and the Industrial Bank are to extend funds to industry from deposits
drawn from the general public. It is urged that their ability to issue debentures also be augmented. The Central Bank would extend to them longterm loans just as it now makes long advances to the okohama Specie
Bank in connection with foreign exchange.
Control of Rural Banks.
As a result of recent mergers certain banks in the rural districts now
operate like central institutions. It is urged that these sections be brought
Into closer relationship with the central money market. For this purpose
a new institution would be created to control these banks. This institution
will own shares in the provincial banks and, as a sharehloder, will participate in the selection of directors. Its own shares will be Government
owned.
For liquidation of farm debts it is suggested that local public organizations buy up all of these farm lands under mortgage requiring immediate
liquidation. The lands purchased by the public organizations in this manner
may remain as public domain or may be sold to tenant farmers who wish to
become independent.
Funds required by local organizations for buying up of the mortgaged
lands may be obtained from the Simple Life Insurance Bureau. The organization may also be financed by means of special bonds issued by their
respective prefectures.
Money Crisis Reported in Canton—Silk Exports and
Remittances Drop—Living Costs Increase.
The following Associated Press advices from Canton,
China, July 19, are from the New York "Evening Post":
This city is faring a serious monetary crisis, chiefly because of a decline
in the annual silk export from 70,000,000 to 4,000,000 Canton dollars (about
$21.600.000 to $1,285,624).
Remittances from Chinese emigrants abroad, an important economic
factor to the city, have declined 70%. A grave increase in living costs is
following a bad slump in copper cents, which are selling by weight at
approximately three Canton dollars to the thousand. Silver is being
heavily discounted against Hong Kong notes, which command a 50%
premium.
954
Financial Chronicle
New Chinese Tariff Rates Applied to Goods in Bond.
The Department of Commerce at Washington stated on
July 11 that goods stored in Chinese bonded warehouses
prior to May 22 1933, upon withdrawal for entry into the
country, will be subject to the new import duties which
became effective on the above date, in place of the old
tariff rates originally stipulated to have been applicable to
goods withdrawn from bond within three months, according
to a report received in the Department from Commercial
Attache Julean Arnold, Shanghai.
Japan Plans Establishing Bureau on American
Relations.
Under date of August 1, Associated Press advices from
Tokio stated:
Because of the increasing importance of American nations in Japan's
foreign relations, the Foreign Office is planning to establish a new bureau
to handle dealings with nations in North, South and Central America.
Appropriations for the office will be included in the 1934-35 budget, it
was learned authoritatively to-day. Hitherto one member of the Foreign
Office has taken care of relations with the entire Occident.
Another new bureau for Manchurian and Mongolian affairs is also planned.
Tenders to Bonds of State of New South Wales, Australia, Invited by Chase National Bank of New
York.
The Chase National Bank of the City of New York,
Successor Fiscal Agent for the external 30-year 5% sinking
fund gold bonds, due Feb. 1 1957, of the State of New
South Wales, Australia, is inviting tenders for the sale to
it at'Aces not exceeding their principal amount and accrued
interest cf as many of these bonds as will be sufficient to
exhaust the sum of $135,057.04 now held in the Sinking
Fund. Tenders should be addressed to the Corporate
Trust Department of The Chase National Bank of the City
of New York, 11 Broad St., New York, before 12 o'clock
noon OD Aug. 4 1933.
New York Stock Exchange Rules Four German Bond
Issues Be Dealt in "Flat"—Bonds of Free State
of Bavaria, Cities of Nuremberg and Leipzig and
Bank of Silesian Landowners Association in Breslau Affected.
The following rulings of the New York Stock Exchange
were issued on Aug. 1 by Ashbel Green, Secretary of the
Exchange:
NEW YORK STOCK EXCHANGE.
Committee on Securities.
Aug. 1 1933. •
Notice having been received that the interest due Aug. 1 1933, on Free
State of Bavaria external 20-year 63 % sinking fund gold bonds, due 1945,
Is not being paid:
The Committee on Securities rules that beginning Tuesday, Aug. 1
1933 and until further notice the said bonds shall be dealt in "flat" and to
be a delivery must carry the Aug. 1 1933 and subsequent coupons.
Notice having been received that the interest due Aug. 1 1933. on City of
Nuremberg external 25-year 6% sinking fund gold bonds, due 1952, is not
being paid:
The Committee on Securities rules that beginning Tuesday, Aug. 1 1933
and until further notice the said bonds shall be dealt in "flat" and to be a
delivery must carry the Aug. 1 1933, and subsequent coupons.
Notice having been received that the interest due Aug. 1 1933 on Bank
of Silesian Landowners Association in Breslau first mortgage collateral
6% sinking fund gold bonds, due 1947, is not being paid:
The Committee on Securities rules that beginning Tuesday, Aug. 1 1933
and until further notice the said bonds shall be dealt in "flat" and to be a
delivery must carry the Aug. 1 1933 and subsequent coupons.
Notice having been received that the interest due Aug. 1 1933, on City of
Leipzig 7% sinking fund gold bonds external loan of 1926, due 1947, is not
being paid:
The Committee on Securities rules that beginning Tuesday, Aug. 1 1933,
and until further notice the said bonds shall be dealt in "flat" and to be a
delivery must carry the Aug. 1 1933, and subsequent coupons.
ASHBEL GREEN, Secretary.
Additional Rulings on Bonds of Province of Styria
(Austria) by New York Stock Exchange.
Ashbel Green, Secretary of the New York Stock Exchange,
issued the following announcement on July 27:
NEW YORK STOCK EXCHANGE.
Committee on Securities.
July 27 1933.
Referring to the rulings of this Committee dated Aug. 1 1932 and Jan. 26
1933 in the matter of the non-payment of interest on Province of Styria
external secured sinking fund 7% gold bonds, due 1946:
The Committee on Securities further rules that beginning with transactions of Aug. 1 1933, the bonds dealt in as "with all unmatured coupons
attached" shall be ex the Aug. 1 1933, coupon;
That beginning Aug. 1 1933, the bonds may be dealt in as follows:
(1) "With Aug. 1 1932, and subsequent coupons attached";
(2) "With all unmatured coupons (i.e., coupons, the due dates of which
have not been reached) attached":
That bids and offers shall be considered as being for bonds "with Aug. 1
1932 and subsequent coupons attached" unless otherwise specified at the
time of transaction: and
That all transactions in the bonds shall be "flat."
ASHBEL GREEN, Secretary.
The Committee's ruling of Jan. 26 1933, was referred to
in our issue of Feb. 11, page 934.
Aug. 5 1933
New York Stock Exchange Rules Further on Bonds of
Greek Government.
The following announcement was issued by the New
York Stock Exchange, through its Secretary, Ashbel Green:
NEW YORK STOCK EXCHANGE.
Committee on Securities.
July 27 1933..
Referring to the rulings of the Committee on Securities dated May 2
1932 and April 20 1933 regarding non-payment of interest on Greek Government 40-year 7% secured sinking fund gold bonds, due 1964:
The Committee on Securities further rules that beginning Monday,
July 31 1933 the said bonds shall be dealt in only "with May 1 1933 and
subsequent coupons attached."
Attention is directed to the fact that the bonds are dealt in "flat."
ASHBEL GREEN, Secretary.
Bonds of Republic of Uruguay Dealt in "Flat" on
New York Stock Exchange.
On July 27, Ashbel Green, Secretary of the New York
Stock Exchange, issued the following statement:
NEW YORK STOCK EXCHANGE.
Committee on Securities.
July 2-7 1933.
Notice having been received that the interest due Aug. 1 1933 on
Republic
of Uruguay 25-year 8% sinking fund external loan gold bonds, due
1946,
will not be paid in dollars on said date:
The Committee on Securities rules that beginning Tuesday, Aug. 1 1933
and until further notice the said bonds shall be dealt in "flat" and to
be a
delivery must carry the Aug. 1 1933 and subsequent coupons.
ASHBEL GREEN, Secretary.
In our issue of July 29, page 780, we noted an item relating
to the bonds.
Agricultural Mortgage Bank, of Colombia, Bonds Dealt
in "Flat" on New York Stock Exchange.
Through its Secretary, Ashbel Green, the New York Stock
Exchange issued the following announcements:
NEW YORK STOCK EXCHANGE.
Committee on Securities.
July 27 1933.
Notice having been received that the interest due Aug. 1 1933 on Agricultural Mortgage Bank of Colombia guaranteed 20-year 6% sinking
fund
gold bonds, due 1947, will not be paid on said date:
The Committee on Securities rules that beginning Tuesday, Aug.
1 1933
and until further notice the said bonds shall be dealt in "flat."
In view of the offer to make partial payment of one-third in cash
the balance in scrip on account of the interest due Aug. 1 1933, the and
Committee on Securities further rules that beginning Tuesday, Aug.
1 1933
the said bonds may be dealt in as follows:
"With Aug. 1 1933 and subsequent coupons attached";
"With Feb. 1 1934 and subsequent coupons attached";
That scrip received in partial payment of coupons shall not be
deliverable
with the bonds; and
That bids and offers shall be considered as being for bonds "with
Aug. 1
1933 and subsequent coupons attached" unless otherwise specified at
the
time of transaction.
Aug. 1 1933.
Referring to the ruling of the Committee on Securities, dated July
27
1933, that Agricultural Mortgage Bank of Colombia guaranteed 20
-year
6% sinking fund gold bonds, due 1947, shall be dealt in "flat" beginning
Aug. 1 1933 and in view of the offer to make partial payment of
one-third
In cash and the balance in scrip on account of the interest due Aug.
1 1933,
the bonds may be dealt in as follows:
"with Aug. 1 1933 and subsequent coupons attached";
"with Feb. 1 1934 and subsequent coupons attached."
Further notice having been received that until such time as a registration
certificate as provided under the Federal Securities Act of 1933 has been
filed with the Federal Trade Commission in Washington, and
approved
by them, the fiscal agent will be unable to effect the above payment on
the
Aug. 1 1933 coupon:
The Committee on Securities rules that beginning Tuesday, Aug. 1 1933
and until further notice the said bonds shall be dealt in "flat" and to
be a
delivery must carry the Aug. 1 1933 and subsequent coupons.
ASHBEL GREEN, Secretary.
New York Curb Exchange Rules Bonds Be Dealt in
"Fla t"—Affects Bonds of Central Bank of German
State & Provincial Banks, German Consolidated
Municipal Loan of German Savings Banks and
Clearing Association, Province of Hanover, and
Prussian Electric Co.
The New York Curb Exchange issued the following notice
on Aug. 1:
The New York Curb Exchange has received notice that the interest due
Aug. 1 1933 on the following bonds is not being paid:
Central Bank of German State & Provincial Banks, Inc., first mortgage
secured gold sinking fund bonds, series A, 6%. due Aug. 1 1952.
German Consolidated Municipal Loan of German Savings Banks &
Clearing Association 7% sinking fund secured gold bonds, series of 1926.
due Feb. 1 1947.
Province of Hanover (State of Prussia, Germany) Harz Water Works
Loan, second series 63 %, due Feb. 1 1949.
Prussian Electric Co.6% sinking fund gold debentures, due Feb. 1 1954.
The Committee on Securities rules that, beginning to-day (Aug. 1) and
until further notice the aforementioned bonds shall be dealt in "flat"
and to be a delivery must carry the Aug. 1 1933 and subsequent coupons.
May Bar Margin Deals Through Legislation, Senator
Robinson Says.
The following from Little Rock, Ark., Aug. 2 is from
the New York "Journal of Commerce":
Legislation making trading on margin illegal may become necessary as
a result of recent speculative activities on the stock exchanges, Senator
Volume 137
Financial Chronicle
Robinson of Arkansas, Democratic majority leader in the Senate, declared
in an address here to-day.
"This spectacle presented in recent days of wild and unrestrained speculation on the exchanges is both pitiable and contemptible," he said.
"Shall we so quickly forget the lesson of 1929, when millions of uninformed
investors, some of them sacrificing their homes and other necessities for
the gambler's chance of winning quick and easy profits, precipitated a disaster which will be repeated if the orgy of speculation now in progress continues and gathers volume?
"The worst thing observable is the sign displayed in transactions on the
exchange, that recklessness and ill-considered action are still the implement of rich and poor investors alike."
Stock Exchange Acts to Curb Speculation—Minimum
Margin Coverage Fixed in New Rules at 30% on
Accounts of $5,000 and 50% in Case of $5,000 or
Less—Weekly Reports Called for Regarding Participation in Pools—Employment by Members of
Customers' Men Subject to Approval of Exchange
—Statement by President Whitney.
Action to curb speculative dealings was taken this week
by the New York Stock Exchange, in the adoption by the
Governing Committee on Aug. 2 of new rules designed to
restrict margin trading through the requirement (effective
Sept. 15) of a minimum margin of 30% where the accounts
have a balance of $5,000 or more, and at least 50% where
accounts have a debit balance of $5,000 or less. It is
stated that heretofore the only requirement had been that
the margin be adequate. Margins are not to be granted
in the case of stocks selling at less than $5 a share or on
bonds selling at less than 10% of face value. Pointing out
that the Exchange moved to tighten the restrictions about
the financial activities of members by ruling that no member
shall loan money on security collateral "for the account of
any non-banking corporation, partnership, association,
business trust, other entity, or individual," the New York
"Journal of Commerce" of Aug. 3 observed:
According to Richard Whitney, President of the Exchange, the action
was taken in furtherance of the policy expressed in the Glass-Steagall Banking Bill, which prevents member banks from making loans for the account
of others.
In the same connection, and with the same object, the Exchange is now
prohibiting members carrying margin accounts from paying interest on
credit balances when such balances are created for the purpose of receiving
interest thereon. Ordinary credit balances arising from transactions are
not subject to this provision unless it appears that credit balances have
been increased for the purpose of receiving interest.
The Committee on Business Conduct is empowered under
the new rules to require members to report on their participation in pools, syndicates and joint accounts, and the
Committee may in its discretion disapprove any such connection. In furtherance of the authority conferred on it,
the Committee issued a call upon members of the Exchange
to report on Aug. 4 on all pool, syndicate or joint account
operations, and similar reports are to be made weekly
hereafter. Summarizing the requirements affecting customers' men, the New York "Journal of Commerce" said:
Customers' Men Ruling.
The exchange further moved to improve the standards of business
solicitation by prohibiting the offering of securities, the soliciation of new
margin accounts and communication with customers in their homes unless
the customers have given express permission for such communications in
writing. The minimum salary now to be paid customers' men employed
after Aug. 2 is $60 per week for men employed in cities of over 400,000
population and $10 per week for others, in efforts, according to Mr. Whitney
to "attract men of responsibility to this important branch of the business."
None other than registered customers' men shall perform their duties.
Traveling representatives will not be approved and the employment of
clerks in nominal positions because of the business obtained through them
is forbidden. Payment of expenses incurred by customers' men for the
entertainment of customers is prohibited. Customers' men must be employed on contracts of at least six months' duration.
The announcement by Richard Whitney, President of
the New York Stock Exchange, of the adoption of the
regulations follows:
The Exchange has for many years required all members accepting or
carrying accounts for customers to secure proper and adequate margin.
In order to strengthen this rule and to make clear what the Exchange
considers proper and adequate margin, the Committee on Business Conduct
has been given power to fix minimum marginal requirements from time
to time. Acting under this new power the Committee will require a minimum margin of 30% of the debit balance in each account having a debit
balance of more than $5,000, and a minimum margin of 50% of the debit
balance in each account having a debit balance of $5,000 or less. Additional
margin requirements will be imposed on short positions and also on securities
selling at very low prices, and on securities which do not have an active
market on a recognized exchange.
The offering of securities for sale to people in their homes and also the
solicitation of new margin accounts from people in their homes has been
prohibited, and customers' men have likewise been prohibited from communicating with customers in their homes in regard to marginal transactions
unless the customers have given express permission in writing for such
communications. The Exchange has also fixed substantial minimum salaries
for customers' men. It is felt that this step will tend to attract men of
responsibility to this important branch of the business. In order not to
create any unemployment these minimum salaries will not be made applicable to persons who are now employed but will apply to all changes in
employment and all new employees. Furthermore, the payment of expenses
Incurred by customers' men for the entertainment of customers has been
Prohibited.
955
In order to secure prompt information in regard to the existence of any
pools, syndicates and joint accounts trading in listed securities, and also
of the existence of any options relating to listed securities, the Committee
on Business Conduct has been directed to require all members of the Exchange, and firms registered thereon, to file weekly reports of all such
activities in which such members are interested, or of which they have
knowledge, by reason of transactions executed by or through them. The
Committee on Business Conduct has also been given authority to disapprove
the connection of members with any such activities whenever in the judgment of the Committee such activities may be unsound or likely to create
prices which will not fairly reflect market values. Any such disapproval
will be reported to the Governing Committee for such action as it may
deem appropriate under the constitution and rules of the Exchange.
In furtherance of the policy expressed by Congress in the Glass-Steagall
banking bill, which prevents member banks of the Federal Reserve System
from paying interest on demand deposits, or making loans for the account
of others, the Exchange has restricted the right of its members to pay
interest on credit balances, and has likewise prohibited them from lending
money for the account of non-banking institutions or individuals.
The action taken by the Governing Committee at to-day's meeting
represents a development of the policy of the Exchange. All of these
various steps have been under consideration for many months and have
been adopted because we have become convinced that they are sound and
in the public interest.
The new rulings were made public as follows by the
Exchange on Aug. 2:
Amend the rules adopted by the Governing Committee pursuant to the
constitution by adding to Chapter XIV thereof two new sections to read
as follows:
"Sec. 12. No member of the Exchange or firm registered thereon shall
loan money upon the security of stocks, bonds or other investment securities
for the account of any non-banking corporation, partnership, association,
business trust, other entity or individual.
"Sec. 13. No member of the Exchange or firm registered thereon,
carrying margin accounts for customers, shall pay interest on any credit
balance created for the purpose of receiving interest thereon. Credit
balances arising out of transactions in securities or commodities or incidental
to any busines regularly carried on by a member or firm prior to the adoption hereof shall not be subject to the provisions of this section unless it
appears that such credit balances have been increased solely for the purpose
of receiving interest thereon."
Amend Chapter XV of the rules by adding the following new sections
thereto:
"Sec. 5. The Committee on Business Conduct is authorized to fix the
minimum amount of margin which must be required by members of the
Exchange or firms registered thereon accepting margin accounts and the
minimum amount of margin which such members or firms must require
on existing margin accounts.
"Sec. 6. The Committee on Business Conduct shall require each member
of the Exchange and firm registered thereon to report, in form determined
by said Committee, all substantial pools, syndicates or joint accounts
trading in specific securities listed on the Exchange in which such member
or firm is, directly or indirectly, interested or of which such member or
firm has knowledge by reason of transactions executed by or through such
member or firm.
"The Committee on Business Conduct may in its discretion disapprove
of the connection of any such member or firm with any such pool, syndicate
or joint account which it shall determine to be contrary to the best interest
or welfare of the Exchange or to be likely to create prices which will not
fairly reflect market values.
"Sec. 7. The Committee on Business Conduct shall require each member
of the Exchange and firm registered thereon to report, in form determined
by said Committee, all substantial options relating to securities listed on
the Exchange in which such member or firm is: directly or indirectly. interested or of which such member or firm has knowledge by reason of
transactions executed by or through such member or firm.
"The Committee on Business Conduct may in its discretion disapprove
of the connection of any such member or firm with any such option which it
shall determine to be contrary to the best interest or welfare of the Exchange
or to be likely to create prices which will not fairly reflect market values."
Margin Requirements.
To Members:
The Committee on Business Conduct, pursuant to the provisions of
Section 5 of Chapter XV of the rules adopted by the Governing Committee on Aug. 2 1933, has made the following ruling in regard to minimum
margins:
The minimum amount of margin which must be required shall be sufficient in all cases to finance the account and, in any event, shall amount to
at least 30% of the debit balance in the case of accounts having a debit
balance of more than $5.000 and to at least 50% of the debit balance in
the case of accounts having a debit balance of $5,000 or less. The market
value of active securities listed on any recognized exchange shall be used
in computing the amount of margin except that no value shall be allowed
on any stock selling at less than $5 a share or on any bond selling at less
than 10% of face value. Substantial additional margin must be required
in all cases where the securities carried are subject to sudden changes in
value or where the amount of any particular security carried is unusual.
The minimum margin which must be required on short commitments shall
be ten points, and in accounts having both a long and short position the
margin must be sufficient to comply with the foregoing minimum requirements in regard to long positions as well as in regard to short commitments.
The foregoing requirements shall not apply to long positions in United
States Government obligations on which a minimum margin of 5% must
be required.
Great care must be exercised in determining the value for marginal
purposes of securities which do not have an active market on a recognized
exchange. All members of the Exchange and firms registered thereon
carrying a substantial amount of such securities in margin accounts shall,
In connection with their questionnaire answers, report to the Committee
on Business Conduct all material facts in regard to such securities and the
accounts in which they are carried.
In the case of all existing margin accounts the foregoing minimum requirements shall become effective on Sept. 15 1933.
No member of the Exchange or firm registered thereon shall accept any
new account unless the margin therein equals or exceeds the minimum
margin at the time required by the Committee on Business Conduct. For
the purpose of new accounts the minimum requirements above set forth
are effective immediately.
In case the margin in any account shall fall below the minimum required
at the time by the Committee on Business Conduct, the member of the
Exchange or firm registered thereon carrying such account shall take
prompt steps to secure additional margin and shall, in any event, rectify
such position within a reasonable time.
ASHBEL GREEN, Secretary.
956
Financial Chronicle
Pools, Syndicates or Joint Accounts.
To Members:
The Committee on Business Conduct, pursuant to the provisions of
Sections 6 and 7 of Chapter XV of the Rules adopted by the Governing
Committee on Aug. 2 1933 has ruled:
(1) All members of the Exchange and firms registered thereon shall report
by 12 o'clock noon on Aug. 4 1933 all pools, syndicates and joint accounts,
trading in specific securities listed on the Exchange, existing at the close
of business on Aug.2 1933 in which they are,directly or indirectly,interested
or of which they have knowledge by reason of transactions executed by or
through them. Reports on such pools, syndicates or joint accounts shall
specify the names of the securities traded in; the amount of existing commitments; the names of the persons participating therein and their respective interests; whether such pool, syndicate or joint account was organized
for the purpose of trading in securities or for the purpose of accumulating
or distributing the same and a copy of any written agreement or instrument
In writing relating thereto.
(2) All members of the Exchange and firms registered thereon shall
report by 12 o'clock noon on Aug. 4 1933 all options relating to securities
listed on the Exchange existing at the close of business on Aug. 2 1933 in
which they are directly or indirectly interested or of which such members
or firms have knowledge by reason of transactions executed by or through
them. The reports of such options shall specify the names of the securities
and the number of shares or the principal amount of bonds covered; the
duration and terms; the names of the grantors and grantees, and the names
of the persons entitled as of the date of the report to exercise such options;
also a copy of any agreement or instrument in writing, relating thereto.
Separate reports shall be made in regard to each pool, syndicate or joint
account and in regard to each option.
Similar reports shall be made by 12 o'clock noon on each Friday subsequent to August 4 ofall such pools,syndicates or joint accounts,and also of
all such options, existing at the close of business on the preceding Wednesday.
All of the foregoing reports shall be addressed to the Secretary of the
Committee on Business Conduct, shall be marked "Confidential" and
shall be delivered to Room 608, 11 Wall Street, New York City.
ASHBEL GREEN, Secretary.
Customers' Men.
Amend Section 9 of Chapter XVI of the Rules so as to read as follows:
"Sec. 9. No member of the Exchange or firm registered thereon shall
employ, without the prior approval in each case of the Committee on
Quotations and Commissions, any 'customers' man' as defined in subdivision (c) of Section 7 of Chapter XII of the Rules
"No member of the Exchange or firm registered thereon shall employ
any 'customers' man.' except pursuant to the provisions of a written contract of employment which shall provide for a term of employment of at
least six months' duration and a salary at least equal to the minimum fixed
from time to time by the Committee on Quotations and Commissions.
Prompt notice shall be given to said Committee on Quotations and Commissions of any modification or termination of any such contract and the
reason therefor.
"No member of the Exchange or firm registered tbereon shall pay any
expense incurred by any 'customers' man' or other employee for the entertainment of customers.
"All 'customers' men' must have fixed and definite duties in the office
in which they are employed requiring their attendance at least during the
time that the exchange is °pea for business.
"The employment of a clerk or clerks in a nominal position, because of
the business obtained by such clerk or clerks, is forbidden.
"Employment of traveling representatives for the solicitation of commission business in listed securities will not be approved."
Soliciting of Margin Accounts.
Amend Chapter XVI of the rules by adding a new section to read as
follows:
"Sec. 10. No member of the Exchange or firm registered thereon or
employee thereof shall solicit margin accounts or offer securities for sale
by communicating with any person at his home or place of residence unless
such person shall have previously given express permission in writing for
such communication. No employee of any such member or firm shall
solicit marginal transactions by communicating with any customer at his
home or place of residence, unless such customer shall have previously given
express permission in writing for such communications. The provisions
of this section shall become effective on Sept. 1 1933."
Salaries to Be Paid Customers' Men.
To Members:
The Committee on Quotations and Commissions, pursuant to the power
vested in it by Section 9 of Chapter XVI of the rules as amended by the
Governing Committee on Aug. 2 1933 has determined:
(1) That the minimum salary to be paid to "customers' men" employed
after Aug. 2 1933, by members of the Exchange or firms registered thereon
shall be $60 per week for "customers' men" employed in offices located in
cities having a population of 400.000 or more and $40 per week for "customers' men" employed in offices located elsewhere in the United States.
(2) The foregoing minimum salaries shall not apply to "customers' men"
in the employ of members of the Exchange or firms registered thereon on
Aug. 2 1933, but shall apply to all changes of employment occurring subsequent to said date and to all new employees.
(3) No member of the Exchange or firm registered thereon shall permit
any person to perform any of the duties customarily performed by a "customers' man" unless such person shall have been employed as a "customers'
man" with the approval of the Committee on Quotations and Commissions.
(4) The attention of members of the Exchange is called to the provision
of paragraph 3 of Section 9, Chapter XVI of the rules as amended by the
Governing Committee on Aug. 2 1933. The provisions of this paragraph
must be strictly enforced.
(5) The attention of members of the Exchange is also called to the provisions of Section 10 of Chapter XVI of the rules adopted by the Governing
Committee on Aug. 2 1933. The provisions of this Section apply to all
employees of members of the Exchange and firms registered thereon and
must be strictly enforced.
ASHBEL GREEN, Secretary.
Outstanding Brokers' Loans on New York Stock
Exchange July 31 $916,243,934, Compared With
$780,386,120, June 30--Fourth Consecutive Monthly
Advance—Largest Figures Reported Since Sept. 30
1931.
For the fourth consecutive month outstanding brokers'
loans on the New York Stock Exchange increased during
July. On Aug. 3 the Exchange reported that loans at the
Aug. 5 1933
close of business July 31 aggregated $916,243.934 which
compares with $780,386,120, June 30. The latter total was
$251,876,682 over the May 31 total of $528,509,438. The
July 31 total is the highest reported since Sept. 30 1931, at
which time the figure was $1,044,407,879. In the July 31
statement demand loans are shown as $679,b14,938, compared with $582,691,556,Jure 30, while time loans on July 31
are reported as $236,728,996 against $197,694,564, June 30.
The July 31 figures, as made public by the Exchange,follow:
Total net loans by New York Stock Exchange members on collateral,
contracted for and carried in New York as of the close of business July 31
1933 aggregated $916,243,934.
The detailed tabulation follows:
Demand Loans Time Loans.
(1) Net borrowings on collateral from New York banks
or trust companies
$590,118,964 $232,052,496
(2) Net borrowings on collateral from private bankers,
brokers, foreign bank agencies or others in the City
of New York
89,395,974
4,676,500
$679,514,938 $236,728,996
Combined total of time and demand loans $916,243,934.
The scope of the above compilation is exactly the same as in the loan
report issued by the Exchange a month ago.
Below we give a compilation of the figures since January,
1931:
Demand Loans.
1931—
$1,365,582,515
Jan. 31
Feb. 28
1,505,251,689
1,629,863,494
Mar. 31
1,389,163,124
Apr. 30
1,173,508,350
May 29
June 30
1,102,285,060
1,041,142,201
July 31
1,069,280,033
Aug. 31
802,153,879
Sept. 30'
615,515,068
Oct. 31
599,919,108
Nov. 30
502,329,542
Dec. 31
1932—
452,706,542
Jan 30
Feb. 29
482,043,758
Mar. 31
496,577,059
341,003,662
Apr. 30
246,937,972
May 31
189,343,845
June 30
189,754,643
July 30
Aug. 31
263,516,020
269,793,583
Sept. 30
Oct. 31
201,817,599
213,737,258
Nov. 30
Dec. 31
226,452,358
1933—
255,285,758
Jan. 31
222,501,556
Feb. 28
Mar. 31
207,601,081
Apr,29207,385,202
May 31
398,148,452
June 30
582,691,556
July 31
679,514,938
Time Loans.
$354,762,803
334,504,369
278,947,000
261,965,000
261,175,300
289,039,862
302,950,553
284,787,325
242,254,000
180,753,700
130,232,800
' 84,830,271
Total Loans.
$1,720,345,318
1,839,756,058
1,908,810,494
1,651,128,124
1,434,683,650
1,391,324,922
1,344,092,754
1,354,067,350
1,044,407,879
796,268,768
730,151,908
587,159,813
59,311,400
42,620,000
36,526,000
38,013,000
53,459,250
54,230,450
51,845,300
68,183,300
110,008,000
122,884,600
123,875,300
120,352,300
512,017,942
524,663,758
533,103,059
379,015,662
300,397,222
243,574,295
241,599,943
331,699,320
379,801,583
324,702,199
337,612,558
346,804,658
104,055,300
137,455,500
103,360,500
115,106,986
130,360,986
197,694,564
236,728,996
359,341,058
359,957,056
310,961,581
322,492,188
528,509,438
780,386,120
916,243,934
In our issue of April 8, page 2336, we gave the monthly
figures back to January 1926.
Senator Fletcher Denies Reports of Early Resumption
of Inquiry Into Stock Exchange Trading—Ferdinand Pecora After Conferring With Richard
Whitney Says Latter Denies Knowledge of Artificial Manipulation of Market.
Senator Duncan U. Fletcher, Chairman of the Senate
Banking Committee, denied on July 24 reports that an
early resumption of the inquiry into Stock Exchange trading
practices might result from the recent price movement.
Associated Press accounts from Washington on that day said:
Informed of a New York dispatch quoting Ferdinand Pecora, counsel
for the Senate subcommittee on banking and currency, as announcing a
conference to-day with Stock Exchange officials, Senator Fletcher said
"Mr. Pecora has instructions to keep in touch with all developments.
"He has not reported to me recently and I see no necessity for calling
an earlier meeting," the Senator explained. The chairman of the committee
has authority to call his group back into session at any time. When the
Inquiry was recessed at Washington it was announced hearings would be
resumed October 2.
"I notice that the tremendous speculative market has steadied," commented Senator Fletcher. "The recent price drop was undoubtedly a
shaking down to real values. I think the situation will work itself out.
"The difficulty would be solved if all trading moves designed to make
an improper profit, such as pools, were given publicity. We probably
can require it if necessary."
Senator Fletcher is on vacation here at the home of a daughter, Mrs. T.J.
Kep, and working on recommendations intended to better control activities
of the New York Stock Exchange.
In Washington Associated Press advices July 25 it was
stated that Ferdinand Pecora, counsel for the Senate Stock
Market Investigating Committee, wired Senator Steiwer
that day that Richard Whitney, President of the New York
Stock Exchange, "denies knowledge of any pool or any
other artificial manipulation having contributed to market
movement of recent days." Continuing the despatch stated:
Senator Steiwer, a member of the Committee, had telegraphed Mr.
Pecora, suggesting the Committee investigate last week's stock market
break. Mr. Pecora's reply to-day said:
"Have received your telegram. Had long conference with President
Whitney, of the New York Stock Exchange, relative to market activities
of last week. He denies knowledge of any pool or any other artificial
manipulation contributed to market movements of recent days.
"Shall pursue my inquiries further. As soon as I receive any evidence
of artificial manipulation or of the factors which produced the price gyrations
of last week. I will communicate with Senate Banking and Currency
Committee with a view to determining upon a course of action."
Senator Steiwer to-day forecast legislation by the next session of Congress
to minimize the possibilities of a recurrence of "the panic of 1929 and last
week's experience with its abnormal shrinkage of prices."
Volume 137
Financial Chronicle
In the New York "Herald Tribune" of July 25 it was
stated that Mr. Pecora accompanied by Julius Silver, associate counsel for the Senate Committee, and Frank J.
Meehan, chief statistician of his staff, conferred with President Whitney,of the Stock Exchange,and Roland Redmond,
counsel for the Exchange, on July 24 according to an announcement by Mr. Pecora. The "Herald Tribune" added:
The conference related particularly to transactions of last week, it was
said, and other conferences will be held in the near future.
A statement issued last night at Mr. Pecora's office follows:.
"These conferences are preliminary to the presentation of evidence
before the Senate Committee on Banking and Currency when public hearings
are resumed.
"No definite conclusions or decisions can be based upon the conference
of to-day. As soon as sufficient information or evidence has been obtained
with respect to the causative factors of recent movements in the securities
market. Mr. Pecora will lay the same before the Senate Committee on
Banking and Currency for its consideration."
Speculative Stock Market Trading and Views of Senators on Subject of Federal Legislation.
Legislation for Federal regulation of the Stock Market
appeared likely on July 22 to be one of the first measures
to be proposed at the next session of Congress, it was stated
in a Washington account on that date to the New York
"Times," which went on to say:
Uncertain as to what steps should be proposed. Congressional leaders
agreed nevertheless that something should be done to check the speculative
fever.
Discussing the subject of regulation with a bar against quotations, some
Administration leaders in Congress thought that the Senate Banking and
Currency Committee would urge Federal control of the Stock Exchange
and that Congress would ratify this recommendation. There seemed
no doubt in any one's mind that the Government had complete authority
over securities, moving in inter-State commerce, although what could be
done to stop speculation in New ork State was not so clear. In one
quarter it has been suggested that the licensing provision of the NIRA
could be applied.
Senator Robinson of Arkansas remarked:
"The last few days indicate the necessity for additional legislation,
and in view of the fact that the Senate Banking and Currency Committee
has been making a study of the subject, it is believed that a report may be
looked for early in the next session.
"Of course there arises not only the question of what should be done
but also the extent to which the subject may be dealt with by the National
authorities.
"It is rather surprising that the lesson of 1929 should be so quickly
forgotten, or rather that it should not have been more profoundly impressed."
Senator McKellar, long a critic of market speculation, pointed out one
particular evil of the market crashes, namely, the depression of securities
below the actual value. In his opinion, suppression of marginal trading
would correct or go far to stop speculation.
President Roosevelt's demand for Federal control has been expressed
more than once, but was particularly emphasized Aug. 20 1932, in a campaign speech at Columbus, Ohio. He said then that the Stock Exchange
must be put under Government regulation to prevent removal from one
State to another to escape State supervision.
957
Amendment to Constitution of New York Stock Exchange for Removal of Stocks Adopted by Governing Committee of Exchange.
Ashbel Gieen, Secretary of the New York Stock Exchange,
announced on July 27 that the Governing Committee of the
Exchange on July 26 adopted the following amendment to
the constitution and that it had been submitted to the Exchange in accordance with the provisions of Article XXV of
the constitution:
Change the present paragraph (f) of the Twelfth Sub-Section of Section 1
of Article X to paragraph (g), and add a new paragraph (f) reading as
follows:
To direct that any stock listed upon the Exchange be removed from the
list and further dealing therein prohibited when it shall appear to the
satisfaction of the Committee that facilities for transfer and registration
in the Borough of Manhattan,City of New York,are no longer available.
New York Stock Exchange Suspends Trading Shortly
After Noon, Friday, Aug. 4, When Gas Bombs
Force Members and Employees Into Street—Fumes
Spread from Ventilator—Exchange to Reopen as
Usual Monday.
Tear gas bombs, secreted in the ventilating system of the
New York Stock Exchange, caused a suspension of trading
on the floor of the Exchange yesterday (Aug. 4) when the
acrid fumes permeated the au and forced almost 2,000 members and employees to rush for the street. Trading was
suspended at about 12.10 p.m., after a listless morning in
which only 500,000 shares had changed hands. When an
investigation disclosed the presence of the two gas bombs,
Allen L. Lindley, vice president of the Exchange, announced
that trading would not be resumed for the remainder of the
day. Various theories as to the cause of the incident were
entertained, but late yesterday afternoon police who were
investigating said that it appeared to be the work of a
practical joker. Trading will be resumed as usual on Monday morning. An official statement was issued as follows
by the Exchange:
Allen L. Lindley, Vice-President of the Exchange, announced that the
Exchange would be closed for trading for the balance of the day. Investigation disclosed that unknown persons had placed cylinders containing tear
gas at one of the intakes of the Stock Exchange ventilating system. Although the gas permeated the trading floor and the offices of the Exchange
and rendered it necessary to close the Exchange, no injuries have been
reported. As the Exchange would have been closed in any event to-morrow.
Saturday, Aug. 5, trading will be resumed as usual on Monday morning.
It was stated at the Exchange that the last prices quoted
will be considered as closing prices. It was also announced
that the Exchange would be unable to publish bid and asked
prices on stocks at the customary closing hour. These
prices are ordinarily gathered on the floor from specialists
at the close of each session.
Senator Thomas Urges "Real Value" of Stock Be Listed
—Asks Government to Publish "Reasonable" Saturday Trading on New York Cotton Exchange—
New York Commodity Exchange Closed To-Day
Range to Curb Speculation.
5)—Montreal and Toronto Exchanges to Be
(Aug.
•
second
only
as
to
the
Characterizing the "market racket"
Closed Saturdays Through Sept. 2—Pittsburgh
"kidnapping racket," Senator Thomas of Oklahoma on July
Stock Exchange Takes Similar Action.
25 urged government publication of "the reasonable value"
W. S. Dowdell, President of the New York Cotton Exof stocks listed on the New York and other great security change, issued the following statement Aug. 1:
exchanges. A dispatch from Washington July 25 to the
For the benefit of the cotton trade and in view of the many inquiries as
would continue to remain
New York "Times" from which the foregoing is taken also to whether or not the New York Cotton Exchange
open for trading on Saturday mornings, the Board of Managers, at a special
said in part:
of Managers believes
The
Board
meeting to-day, decided to remain open.
This "alternative to Federal regulation," he asserted, was imperative
for the protection of investors and should be made effective immediately
to anticipate "an orgy of speculation when the $3,300,000,000 public works
program swings into action."
Without such information available to the public and a consequent curb
on speculation, Mr. Thomas said, the nation could expect a repetition of
pool control of stocks and commodities, with market crashes paralleling
those of October 1929 and July 1933. . • •
As Senator Thomas was demanding action regarding commodity and
stock exchanges, others at the Capitol asserted that Government officials
were considering a proposal that Exchange traders be compelled to obtain
licenses under the "NIRA."
Mr. Thomas declared that recent developments show that, in the absence of law or effective regulations, "the several exchanges are imposed
upon by persons who have but one thing in mind, and that is the making
of profits through unconscionable practices if necessary. I refer to the
manipulation of commodity and security values through pool activities."
Thomas Holds Data Avaitable.
Explaining his proposal that the Government publish the "reasonable
value" of securities, the Oklahoma Senator said:
"Under the Securities Act, all companies having stock listed on the
exchanges will have to file with the Federal Trade Commission sworn
statements, and, from such statements, the reasonable value of such listed
stocks may be ascertained.
"From the records and data available—the sworn reports; the past
selling record of the stocks; the monthly or quarterly profit and loss statements; and the known trade and trend outlook; all harmonized and adjusted
with the present price level of such issues—a competent authority could
prepare and make public for each stock a low and high price range, wherein
the price of such stock might legitimately fluctuate, such range being
published for the protection of that portion of the investing public which
desires to make investments in either such common or preferred stock
Issues.
"When such a system can be established the possibility of wild and
uncurbed speculation would be minimized, if not practically eliminated."
that, for the present at least, such action is for the best interests of the cotton trade and the cotton farmers, and, moreover, is in keeping with the
desire of President Roosevelt that no action be taken that would reduce
employment through curtailing customary hours of service operation.
The Board of Managers of the New York Commodity
Exchange, Inc., voted on Aug.3 that the Exchange be closed
to-day (Aug. 5). At a meeting to be held Aug. 9 it will be
decided whether or not the Exchange will be cllosed the following four Saturdays.
The Pittsburgh Stock Exchange announced on Aug. 3
that it will be closed Saturdays until after Sept. 2.
Canadian Press advices from Toronto, Cnt., Aug. 1,
said that members of the Toronto Stock Exchange voted on
that day to cancel Saturday sessions until after Sept. 2.
The Governing Committee of the Montreal Stock Exchange
decided Aug. 2 to keep that Exchange closed Saturdays
through Sept. 2. The Montreal Curb Market followed suit.
Similar action has also been taken by the New York Stock
Exchange and other exchanges as noted in our issue of July
29, page 781.
Salaries Raised 10% by New York Stock Exchange.
Herbert G. Wellington,a member of the board of governors'
of the New York Stock Exchange, on Aug.3 notified General
Hugh S. Johnson by telephone that the Exchange had
authorized an increase of 10% in wages, effective immediately. The New York "Times" states:
958
Financial Chronicle
The increase affects not only employees of the Exchange, but also its
affiliated companies, including the Clearing House, the building company
and the quotation company, which employ in all about 3,000 persons.
Letters were sent to President Roosevelt and to General Johnson outlining the wage increase and also notifying the Administration of the
Exchange's acceptance of the conditions of the Presidential re-employment
agreement.
New York State Superintendent of Insurance Takes
Over Six Mortgage Companies for Reorganization27 Other Guarantee Companies Freed of Restrictions—Ten Others to Go Under Rehabilitation
Program.
In a State-wide reorganization of the title and mortgage
guaranty business, George S. Van Schaick, New York State
Superintendent of Insurance, took over for rehabilitation on
Aug. 2 six companies in and near New York City, with
liabilities of $1,336,500,000 and assets of $101,816,000.
The liabilities of all the companies taken over for rehabilitation consist of outstanding guaranties. At the same time
he released in New York City and in other parts of the State
27 companies from the restrictions under which they have
been operating since March 15. He announced that the
rehabilitation program for the remaining 10 companies
under the jurisdiction of the Insurance Department was
being drawn up and would be made public within two weeks.
The companies taken over for rehabilitation, with the statement of their condition, were as follows:
Bond & Mortgage Guarantee Co., Brooklyn; liabilities, $835,000,000:
assets, $47,000.000.
Lawyers Mortgage Co., New York; liabilities, $366,000,000; assets,
$26,492,000.
State Title & Mortgage Co., New York; liabilities, $63,000,000; assets,
$14,500.000.
National Title Guaranty Co.. Brooklyn; liabilities, $31,500,000; assets,
$6,600,000.
Union Guarantee & Mortgage Co., New York; liabilities. $30,500,000;
assets, $4,077.000.
First Mortgage Guaranty & Title Co., New Rochelle; liabilities, $10,500,000; assets, $3,147,000.
The six companies were taken over on orders signed in
the Supreme Court in Manhattan, in Brooklyn and in Westchester County on the application of Mr. Van Schaick.
Two of the companies, the Bond & Mortgage Guarantee
Co., Brooklyn, and the Lawyers Mortgage Co., New York,
are to be reorganized through the creation of two new companies for the benefit of their creditors. The successor
companies are the Bond & Mortgage Guarantee Corp. and
the Lawyers Mortgage Guarantee Corp.
The entire stock of each of the new companies will be held
by the Superintendent of Insurance as rehabilitator for the
benefit of the creditors of the old company which each
succeeds. The new corporations, each with a capital structure of $3,200,000, will service the mortgages and properties
held by the old companies and on orders of Mr. Van Schaick
"will only issue guarantee of a restrictive character"
The four other. companies—the State Title & Mortgage.
Co , New York; the National Title Guaranty Co., Brooklyn;
the Union Guarantee & Mortgage Co., New York, and the
First Mortgage Guaranty & Title Co., New Rochelle—will
be conducted by the Superintendent of Insurance for the
benefit of their creditors.
A statement issued by George S. Van Schaick on Aug. 2
follows:
The following initial steps were taken by George S. Van Schaick, Superintendent of Insurance, in a State-wide reorganization of the title and
mortgage guaranty companies under the supervision of the Insurance
Department:
(1) Twenty-seven companies have been relieved of the restrictions under
which they have been operating since March 15 1933. Such companies
are as follows:
Albany Title Co.
Hudson Counties Title & Mortgage Co.
Bankers Bond & Mortgage Co.
Hudson-Harlem Valley Title & Mtge.Co.
Bronx Title & Mortgage Guarantee Co. Inter-County Title Guaranty & Mtge.Co.
Brooklyn Mortgage Guaranty & Title Co. Investors Syndicate Title & Guaranty Co.
Central New York Mortgage & Title Co. Jefferson Title & Mortgage Corp.
Central New York Title Guaranty Co. Lehrenkrauss Mtge. & Title Guar. Co.
Continental Mortgage Guarantee Co.
Mathews Bond & Guaranty Co.
Equitable Mtge. At Title Guarantee Co. Metropolitan Title Guaranty Co.
Farmers Title Guaranty & Mtge. Co. Mineola Bond & Mtge. Guaranty Co.
Fidelity Title & Guaranty Co.
Rockland Title & Mtge. Guaranty Co.
Franklin Title & Mtge. Guar. Co.of N.Y. Security Title & Guaranty Co.
Greater N. Y.-Suffolk Title & Guar. Co. Syracuse Title & Guaranty Co.
Guaranteed Title & Mortgage Co.
United Title & Mortgage Co.
(2) The Bond & Mortgage Guarantee Co. and the Lawyers Mortgage
Co. have with the consent of their respective boards of directors been taken
over by the Superintendent of Insurance for rehabilitation and have been
reorganized for the benefit of their creditors, pursuant to the authority of
the Supreme Court through the creation of two new companies—the Bond
& Mortgage Guarantee Corp. and the Lawyers Mortgage Guarantee Corp.
The entire stock of each of the new companies will be held by the Superintendent of Insurance as rehabilitator for the benefit of the creditors of
the old company which each succeeds. Such new corporations, each with
a capital structure of 33.200.000, will service the mortgages and properties
held by the old companies and hereafter will only issue guaranties of a
restrictive character.
(3) The Union Guarantee & Mortgage Co., the First Mortgage Guaranty
& Title Co. of New Rochelle, the National Title Guaranty Co. and the
State Title & Mortgage Co. have been taekn over for rehabilitation and the
business thereof will be conducted by the Superintendent of Insurance for
the benefit of their creditors.
Aug. 5 1933
(4) A rehabilitation program for the remaining ten companies under
the jurisdiction of the Insurance Department is being formulated and will
be announced within the next two weeks.
The statement issued by Mr. Van Schaick further states:
It is common knowledge that the real estate and mortgage market has
been demoralized for some time due to the disastrous influence and effect
of the depression. The situation had become so acute following the bank
holiday in March that the Superintendent of Insurance promulgated rules
and regulations for the resumption of business by title and mortgage guaranty companies under definite restrictions. The purpose of these regulations was two-fold: first, to avoid preferences to creditors whose claims
had matured or would shortly mature to the detriment of contingent creditors whose claims would mature at a litter date, and second, to give to
each company an opportunity to submit to the Superintendent of Insurance
its own reorganization plans.
Various plans were submitted by the companies in accordance with this
requirement. These were all rejected since, in the opinion of the Superintendent, they did not meet the fundamental condition laid down by him,
that any plan which he would approve must have for its sole purpose the
greatest possible protection for the holders of guaranties. As a result of
his own study of the situation and assisted by the New York Guaranteed
Mortgage Protection Corporation, the Superintendent of Insurance drafted
a basic plan of reorganization. This plan, modified to meet varying
conditions of individual companies, is tbe substance of the rehabilitation
program which is now being undertaken. Such plan has been reviewed
and approved by the Insurance Board, consisting of four former Superintendents of Insurance—William H. Hotchkiss, Jesse S. Phillips, Francis R.
Stoddard and James A. Beha,together with Aaron Rabinowitz and Matthew
Woll and by the New York Guaranteed Mortgage Protection Corp..
a
quasi-public body created by the legislature to represent certificate holders.
The restrictions promulgated on March 15 were temporary in character
but have resulted not only in the reopening of 27 companies heretofore
listed, but also in a reduction of expenses and affording an opportunity
to
reduce liabilities of various of the companies which improved their condition so as to make possible rehabilitation of the companies that
cannot
be presently gpened.
The condition of the mortgage guaranty companies which are not
able
to open is one of non-liquidity due to the frozen condition of real estate
and
mortgage investments everywhere. It is the opinion of the Insurance
Department and of all the experts who have studied the question that
there
is reason to believe that time and the passing of the depression,
together
with a carefully planned work-out of securities, will prevent
wholesale
slaughter of the public's investments in the guaranty mortgage field.
The creditors and certificate holders of these mortgage guaranty
companies are entitled to be paid in full before any benefit accrues to
anyone
else. They are entitled to an orderly work-out of the securities behind
their
claims instead of ruthless sacrifice or liquidation. This is the basis of
the
plan which has been evolved. Undoubtedly the plan can be improved
through experience. If it doesn't work or work well, it can be revised
from time to time or changed to liquidation if rehabilitation is found
to be
impossible.
Every portion of assets invested in a new company as a part of the
process
of rehabilitation is represented by stock in the new company held
by the
Superintendent of Insurance as rehabilitator for the benefit of
creditors
and certificate holders of the old company. If the plan succeeds
this will
primarily benefit such creditors and certificate holders.
If rehabilitation instead of liquidation is desirable, there must be
adequate
and competent machinery set up to do the rehabilitating. In each
case
this is done by the new corporation under the most drastic and
complete
control on the part of the Supreintendent of Insurance that has yet been
set up. This is necessary because the old personnel are to be used
in part
with the new corporations in the performance of a public service.
The
necessity of a partial use of the old organizations which know the business
to be saved is obvious. The hope of successful rehabilitation
would be
considerably lessened if vast businesses were suddenly swept from
the
experienced hands of those who know them to a new group totally unfamiliar
with the business to be conducted.
If there is any hope for the future, if real estate and real restate
mortgages
are to remain the most substantial of investments, as is generally
believed,
then improvement in real estate conditions must be anticipated
and the
unfortunate investors in the mortgages and certificates of the mortgage
guaranty companies given reasonable opportunity to have their investments
saved. The hardship confronting investors, many of whom are of
little
means, who have come to rely heavily upon the payment to them of
their
interest and principal at the agreed times, is pitiful. The facts,
however,
must be faced. Preferences must be avoided. Security must be
salvaged.
The investment itself must be protected if there is any reasonable
method
by which it may be done. Everyone realizes that the protection
of one's
capital investment is more important than immediate payment.
, Justice John B. Johnston of the New "a ork Supreme Court, Kings
County,
granting the order directing the Superintendent of Insurance to take
possession of the Bond & Mortgage Guarantee Co. for rehabilitation.
The
order for the rehabilitation of the First Mortgage Guaranty &
Title Co.
was granted by Justice George H. Taylor Jr., in the Supreme
Court of
Westchester County. Rehabilitation orders for the other companies
taken over were granted by Justic Alfred Franke thaler in the Supreme
Court
of New 1 ork County. The Superintendent of Insurance was
represented
by Attorney-General John J. Bennett Jr., through Assistant
AttorneyGeneral Joseph C. H. Flynn in all of the proceedings except that of the
First Mortgage Guaranty & Ttilte Co. in which Deputy
Assistant Harry
Greenwald appeared.
The New York "Times" Aug. 3 states in part:
The Bond & Mortgage Guarantee Co., with headquarters at
175 Remsen
St., Brooklyn, with its outstanding guaranteed mortgages
totaling $834,963.175.21, is the largest company of its kind in this country.
The petition in the Bond & Mortgage Guarantee Co. case,
made with the
consent of its board of directors, said that the holders of
$44,117.791 outstanding guaranties had demanded payment and the company
had availed
itself of the provisions of its policies under which it was not required
to
pay the principal of any mortgage until the expiration of 18 months after
it became due.
"The company was in default in the payment of interest guaranteed
to its policy holders of $7,607,880.51 (less the company's premiums) which
the company is uable to pay and for which suits and demands would have
been instituted but for the capital rules and regulations promulgated by the
Superintendent of Insurance pursuant to Chapter 40 of the laws of 1933,"
the petition stated.
"The issuance of these rules and regulations was made necessary by
the chaotic economic and financial conditions existing at that time. Creditors of the company who had maturity claims were pressing for payment
and with the assets of the company frozen in real estate investments payment of maturity claims would have exhausted the available resources
of
the company."
Volume 137
Financial Chronicle
Since the company was organized it had guaranteed $2,160,625,237 in
mortgages, the petition declared.
Petition Is Optimistic.
An optimistic note was sounded in one part of the petition, which read:
"In spite of the severity of the present crisis it is believed that with
its ultimate passage real estate will be restored to better values. There
are other factors of abnormality about the present situation. If the remainder of the period during which they may be expected to continue can be
bridged, the rehabilitation of the company will be more than justified and
the benefits will flow to the company's creditors and policy holders."
Attached to .the petition was the plan under which the company will
operate through the newly formed corporation. The continuance of the
company's guarantee business will be on a restricted basis. The new
corporation will issue new forms of mortgages, limited as to its guaranties
to holders of present guaranties of the company.
The Superintendent of Insurance will administer the affairs of the corporation, which will have a capital, surplus and reserves of $3,200,000.
The officers and directors will be:
President—Fred P. Condit.
Vice-President—John L. Sherwood.
Treasurer—William B. Clarke.
Secretary—Harold W. Hoyt.
Directors—Charles S. Brown, Wesley C. Bush, William B. Clarke,
Frederick T. Condit, William L. De Bost, John I. Downey, John A. Carver,
John J. Gunther, Robert B. Hoffman, George S. Horton, Harold W. Hoyt,
Remsen Johnson, Emil Leitner, Edward Lyons, George C. Meyer, Lewis
S. Morris, Aaron Rabinowitz, George H. Roosevelt, Benjamin H. Roth
and Howard T. Strong.
Limit on Guarantees.
"In order to realize on the good-will of the company's guarantee business,".tbe plan explains, "it is proposed that the new corporation will issue
a new form of policy which will guarantee only certain of the obligations of
the mortgagors. The new form of guaranteed policy will be directed
primarily to a guarantee of interest 60 days after due date, taxes, current
instalments of assessments, water rents, insurance premiums and foreclosure expenses, but will contain no guarantee of the principal of the
mortgages.
"The proposed charge for this guarantee will be J of 1% ofthe principal
of the mortgage annually.
"There will be a limit upon the size of mortgages which will be guaranteed
and upon the total amount of guarantees, which will be as follows:
"No guarantee policy will be written upon any mortgage where the
annual interest charge under such guarantee will exceed 1M % of the then
capital, surplus and reserves of the new corporation.
"No new guarantee will be written at any time when the total annual
Interest liability upon all outstanding guarantees equals or exceeds five
times the then capital, surplus and reserves of the new corporation. If
and when the new corporation has issued guarantees upon mortgages to
the limit hereinabove provided, the Superintendent may, in his discretion,
Increase the capital stock of the new corporation and transfer additional
assets from the company to the new corporation in consideration of the
issuance of such capital stock."
In the plan outlined for the treatment of claimants and policy holders
of the company Mr. Van Schaick said that all holders of defaulted mortgage
participation certificates guaranteed by the company would be requested
to deposit them with the New i ork Guaranteed Mortgage Protection Corp.,
with which the new corporation would co-operate.
Lawyers Mortgage Co.
A new corporation, known as the Lawyers Mortgage Guaranty Corp.,
with capital, surplus and reserves of $3,200.000, will continue the business
of the Lawyers Mortgage Co. The officers and directors will be:
President—Richard M. Hurd.
Vice-Presidents—John W. Ahern, M. A. McGreevy.
Controller—C. N. Titterington.
Treasurer—Joseph W. Phair. •
Secretary—Francis K. Raynor.
Directors—John W. Ahern, James A. Beha, Howard S. Borden, Frederic
R. Coudert, Edward R. DeWitt, Julian P. Fairchild, Milton Ferguson,
Robert W. Goelet, Richard M. Hurd, George V. McLaughlin, A. Henry
Mosle, Robert L. Pierrepont, Samuel Riker, Francis R. Stoddard and
Bronson Winthrop.
The petition seeking the rehabilitation order said that the Lawyers
Mortgage Co., since its inception, bad guaranteed $1,315,701,479 on mortgages, on which it had paid more than $881,625,000. Its present outstanding guarantees amount to approximately $366,000,000, and its assets
are $26,492,000.
As in the case of the corporation succeeding the Bond & Mortgage Guarantee Co., the corporation continuing the Lawyers Mortgage Co. will
issue a modified form of guarantee under which it will guarantee the payment of taxes, interest, current instalments of assessments, water rates,
Insurance premiums and foreclosure expenses, but will not guarantee the
principal of the mortgage. The operations of the two corporations will
be similar and creditors of the two companies will receive the same sort of
treatment.
New Rochelle Company.
Supreme Court Justice George H. Taylor at White Plains, granted the
petition of Mr. Van Schaick to take possession of the First Mortgage Guarantee & Title Co. of New Rochelle. The company, by majority vote of
its directors, had asked that the action be taken.
Mr. Van Schaick's petition said that an extensive examination made
of the company's affairs showed it "to be in such a condition that its further
transaction of business will be hazardous" to its policyholders, creditors
and the public. His petition said that his purpose in taking over the company was to rehabilitate it.
Justice Taylor said that if persons not present who were parties to the
proceeding "object to features of the same affecting them their right to
more in relation to such featires remains unimpaired."
Statement by Joseph V. McKee—Title Guarantee &
Trust Has No Mortgage Obligations, He Says.
The following statement was issued on Aug. 2 by Joseph
V. McKee, President of the Title Guarantee & Trust Co.:
The control of the business of the Bond & Mortgage Guarantee Co.
has been assumed by the Superintendent of Insurance under a plan of reorganization approved by the Supreme Court. Much misunderstanding
has arisen regarding the Bond & Mortgage Guarantee Co. and the Title
Guarantee & Trust Co.
Title Guarantee & Trust Co. owns less than 4% of the capital stock of
the Bond & Mortgage Guarantee Co., and prior to June 30 1933. our company set up sufficient reserves to reduce this holding on our books to a
nominal value.
959
The Title Guarantee & Trust Co. has not guaranteed the payment of
mortgages and it has no obligations of that kind outstanding. Its business
is confined to title insurance, banking, trust business and servicing of mortgages.
The Superintendent of Insurance has given much thought to the tremendous problems arising out of the mortgage situation, which is the
result of present economic conditions.
During the past two months the condition of real estate has undergone
fundamental changes for the better. There is a marked improvement on
all sides not only in the purchase and sale of properties but in the increase
of income. If this improvement continues, we can feel confident that the
problems facing the mortgage holders will be successfully solved.
The Bond & Mortgage Guarntee Co. will operate along conservative lines
suggested in the plan proposed by Mr. Van Schaick and approved by
Judge Johnston.
George S. Van Schaick Gives Further Details of Plans
For Rehabilitation of Bond & Mortgage Guarantee
Co. and Lawyers Mortgage Co.
Further details concerning the organization of the Bond &
Mortgage Guarantee Corp. and the Lawyers Mortgage
Guarantee Corp., successors to the Bond & Mortgage
Guarantee Co. and Lawyers Mortgage Co., respectively,
were disclosed Aug.3 by Superintendent of Insurance George
S. Van Schaick. The statement follows:
Through the .two new companies. the Superintendent of Insurance as
rehabilitator of the old companies has available an instrumentality for the
performance of certain services essential to the conservation of the assets
of the old companies for the benefit of their creditors. It is necessary for
the protection of mortgage guaranty and certificate holders that the underlying mortgages and properties securing their investments be efficiently
serviced while the old companies are in rehabilitation. Interest and principal payments must be collected; foreclosure proceedings must be instituted
when necessary, properties must be managed, leased and sold; mortgages
must be refinanced: and some agency must see to it that taxes, assessments,
water charges and insurance premiums are paid.
This service will be rendered by the new corporations under contracts •
between them and the Superintendent of Insurance as rehabilitator. These
contracts, however, will be terminable by the Superintendent at will so
that an immediate change in servicing plans and arrangements can be made
at any time if demanded by necessity or otherwise. Under these contracts
all servicing operations will be rendered by the new corporations in behalf
of the old companies at actual cost.
Interest Guaranteed But Not Principal.
In order to preserve to the fullest possible extent the earning power and
good will of the companies which they succeed, the new corporations will
Issue a restricted form of mortgage guaranty. This guaranty will embrace
the payment of interest 60 days after due date, taxes, current installments
of assessments, water charges, insurance premiums and foreclosure expenses.
There will be no guaranty of the principal of any mortgage. It is proposed
to charge M of 1% of the principal amount of the mortgage annually for
this guaranty.
Limitations Determined.
While it is the consensus of opinion of officers of the new corporations,
real estate experts and others that the new guaranty can be written successfully and produce a profit for creditors and policyholders of the old companies, certain restrictions have been imposed as a precautionary measure.
Existing law restricts guaranteed mortgages to property of a value of at
least 50% in excess of the principal amount of the loan thereon. The new
corporations, however, will guarantee mortgages upon property only up
to such percentage of its value and under such other limitations as the
Superintendent may determine within the statutory limit. The value of
properties upon which mortgages are to be guaranteed will be ascertained
by appraisers or leading real estate firms approved by the Superintendent
of Insurance and the boards of directors of the new corporations. There
will be no sale or guaranty of participating interests in groups of mortgages
and there will be a definite limit upon the size of individual whole mortgages
which will be guaranteed and upon the total amount of guaranties that
may be outstanding at any time. These limitations are as follows:
1. No guaranty will be written upon any mortgage when the annual
interest charge of such guaranty will exceed 1%% of the then capital.
surplus and reserves of the new corporation.
2. No new guaranties will be written at any time when the total annual
Interest liability upon all outstanding guaranties equals or exceeds five
times the then capital, surplus and reserves of the new corporation.
Each of the new corporations will have a capital structure of $3,200,000.
which has been provided out of the assets of the company which it succeeds.
The entire capital stock of the new companies, representing these assets.
has been issued to the respective old companies and is held by the Superintendent of Insurance as their rehabilitator. This stock control vests in the
Superintendent, pursuant to the direction of the court, drastic powers of
supervision over the operations of the new corporations. Officers and
directors will be responsible to the Superintendent and may be removed
by him if in his discretion such action seems necessary or desirable. During
the period in which he has stock control, the Superintendent will assure
himself of effective supervision over the policies and practices of the new
corporations by such rules and regulations as he deems necessary.
Directors Appointed.
The Superintendent of Insurance feels that because the organization-of
these new companies was in the public interest, the public should be represented on their boards of directors. Accordingly, he has named James A.
Beha, George V. McLaughlin and Francis R. Stoddard as directors of the
Lawyers Mortgage Guarantee Corp. and George E. Roosevelt and Aaron
Rabinowitz as directors of the Bond and Mortgage Corp. Mr. Beha and
Mr. Stoddard are former Superintendents of Insurance of the State of
New York and, together with Mr. Rabinowitz, are members of the State
Insurance Board. Mr. Rabinowitz is also a member of the State Housing
Board. Mr. McLaughlin is a banker and also former Police Commissioner
of New York City and State Superintendent of Banks. Mr. Roosevelt is a
member of the investment firm of Roosevelt & Son. Others who have
consented to serve as directors representing the Superintendent of Insurance
and the public on the boards of reorganized companies are:
Oliver Roosevelt of the Dry Dock Savings Institution;
State Senator Henry G. Schackno;
Robert Moses, Chairman of the State Council of Parks and former Secretary of State;
Dr. Henry Moskowitz, and
Professor A. A. Berle Jr.
As public representatives on the boards of these companies, these public
spirited citizens will keep in close contact with their operations and will
960
Financial Chronicle
report immediately to the Superintendent upon any matter which should
come to his attention. They will be active directors who will perform a
definite service to the people of the State and they will serve without salary.
Salary Limits Fixed.
In part the new corporations will utilize the services of officers and
employees of the old companies in order to take advantage of their experience and familiarity with the type of business which will be conducted and
the details of the properties and mortgages involved. Salaries and operating
expenses have been drastically reduced. The maximum salary limit for
any officer or employee of the new corporations has been fixed at $17,500
and this amount will be paid in only a few instances.
Special Deputies Named.
The rehabilitation plan which is now effective was prepared after months
of painstaking study and consideration. At the present time it seems to be
the best that could be produced. It should be borne in mind, however,
that the plan is subject to amendment and improvement if in that way the
fundamental purpose of the rehabilitation can be readily and speedily
accomplished. That purpose is to do everything possible looking toward
the payment in full to guaranteed mortgage and certificate holders. The
action which the Insurance Department has taken is purely from the
standpoint of the public interest. Constructive suggestions or criticisms
relating to the plan and with a view to strengthening it will be welcomed.
J. Donald Whelehan has been appointed Special Deputy Superintendent
of Insurance in charge of the Bond & Mortgage Guarantee Co. in rehabilitation. Charles J. Mylod will be in charge of the Lawyers Mortgage Co.
and the Union Guarantee & Mortgage Co. in rehabilitation as Special
Deputy Superintendent of Insurance. Edward McLoughlin is Special
Deputy Superintendent in charge of the First Mortgage Guaranty & Title
Co. of New Rochelle and the National Title Guaranty Co.in rehabilitation.
The State Title & Mortgage Co., which like the others was taken over for
rehabilitation yesterday, will be supervised by Richard J. Brennan, Special
Deputy Superintendent of Insurance. Each of these Special Deputies will
work in close co-operation with First Deputy Superintendent of Insurance
Samuel R. Feller, who is devoting his exclusive time to questions pertaining
to the rehabilitation of title and mortgage guaranty companies. All of
these Special Deputies have had wide experience in rehabilitation work in
the Insurance Department.
E. A. Crawford Suspended from Commodity Exchange,
Inc., for Failure to Meet Obligations.
Edward A. Crawford and the firm of E. A. Crawford &
Co. was suspended on July 26 from the Commodity Exchange,
Inc., for failure to meet obligations. This announcement
followed similar action on July 24 by the Chicago Board of
Trade, as noted in our issue of July 29, page 762. Newspaper
reports said that Mr. Crawford was interested chiefly in
rubber in his transactions on the Commodity Exchange.
Selling or Giving Away of Insurance Policies with
Sales of Newspaper and Magazine Subscriptions,
Securities, Services and Commodities Disapproved
by New York State Insurance Department—Ruling
Issued.
A ruling was issued under date of July 5 by New York
State Superintendent of Insurance George S. Van Schaick,
which disapproves various plans whereby insurance is sold
or given away in connection with the sale of securities, commodities, services and subscriptions to newespapers and
periodicals when the insurance company and its representatives in fact become parties to a promotional enterprise.
This is in addition to the common statutory objections applicable to many cases. A statement issued by the New
York State Insurance Department on July 10 with regard
to the ruling continued:
The ruling is based upon a recent opinion of Attorney General John J.
Bennett Jr. in which it was held that the issuance of life insurance policies
in connection with the sale of stock of an investment trust was illegal
because, among other reasons, it made the insurance company a party to
a promotional plan.
Superintendent Van Schaick pointed out in his ruling that the use of a
common sales representative unquestionably tends to discredit insurance
when the principal object is a commercial promotion. The attitude of the
Insurance Department is that an insurance agent should not be subject
to a conflict of interest which would binder him in his duty to applicants
for insurance.
Each plan involving the services of representatives who act in the dual
capacity of insurance agents and solicitors for a commercial project will
be reNiewed as it comes to the Insurance Department's attention to ascertain whether or not a promotional enterprise is involved. This will be
a question of fact to be determined in each instance.
Under the provisions of the ruling a promotional enterprise will be deemed
to exist if any condition other than the payment of the requisite premium
Is imposed in order to obtain an insurance policy or continue it in force or
if the test of eligibility for such insurance is anything other than compliance
with proper underwriting requirements.
The ruling follows:
An opinion by the Attorney-General of the State of New York rendered
On Dec. 7 1932 to this Department held that a plan whereby policies of life
insurance were issued in connection with the sale of stock of an investment
trust of the management type and wherein the solicitors were not licensed
as insurance agents, was objectionable, (1) in that it makes the insurance
company party to a promotional plan by inducing the sale and purchase of
stock (2) in that it contemplates the selling of insurance by unauthorized
persons, and (3) in that it allows discrimination in violation of Section 89
of the Insurance Law.
This opinion has necessitated a review of the numerous plans in which
insurance is provided in connection with the sale of securities, commodities,
services or subscriptions to a newspaper or periodical. A hearing was held
and a re-examination has been made of the entire question.
No matter what form the transaction may take, if there is an active
Campaign to sell securities, commodities, services or subscriptions to newspapers or periodicals, the insurance company is apt to become a party to
a promotional plan.
Aug. 5 1933
The use of a common sales representative where the principal object is
a commercial promotion unquestionably tends to discredit insurance. This
is inconsistent with the general purpose of the Insurance Law in placing
Insurance on a high plan and safe guarding its sale through competent and
trustworthy solicitors. It is somwhat akin to the proposal recently made to
the Insurance Department that trading stamps redeemable in insurance
be given away in connection with the sale of merchandise. That plan
was disapproved.
In certain respects an insurance agent owes a duty to the public of guidance
and counsel in respect to the intricate and complicated features of insurance.
This is particularly so in the sale of limited or restricted accident policies
sold at low rates where misunderstandings as to coverage frequently arise.
While it is neither necessary nor legal to insist that an insurance agent devote
himself exclusively to insurance work, nevertheless it is proper and desirable
to insist that in exercising his duties as an insurance agent in a particular
transaction he have no conflict of interest which would hinder him in his
duty to the applicant for insurance.
It is the general ruling of this Department that in addition to the common statutory objections applicable to many cases, the various plans under
which insurance is sold or given away by an agent actively engaged in
soliciting purchasers for a security, a commodity, a service or subscriptions
to a newspaper or periodical where the insurance company and its representatives in fact become parties to a promotional enterprise, are disapproved on the authority of the opinion of the Attorney-General above referred tti. Specific rulings on the plans coming to the attention of the
Insurance Department will hereinafter take into account this factor.
It is not the intention of this ruling to make any exclusive definition as
to what may constitute a promotional enterprise within the meaning of
this ruling. In general a promotional enterprise will be deemed to exist
whenever the sale of insurance or its continuance is conditioned upon anything other than the payment of the premium therefor specified in the
policy.
It also follows that under any plan no discrimination should be made as
to those entitled to insurance based upon anything other than proper
underwriting.
Report on Workmen's Compensation Insurance by
New York State Insurance Department—Approximately $737,000,000 in Premiums Reported to Have
Been Paid to Insurers by Employers Since Adoption of Law in 1914.
Since the inception of the New York Workmen's Compensation Law on July 1 1914, employers of the State have
approximately $737,000,000 in premiums to insurers now
engaged in business, according to an analysis of earnings and
costs of this form of insurance which has been completed by
the Rating Bureau of the New York State Insurance Department, it was announced on July 24. Tables containing the
information developed by this study will b3 incorporated in
the annual report of Superintendent of Insurance George S.
Van Schaick to the Legislature. The announcement, issued
by the Insurance Department, continued:
The amount of premiums paid by New 1 ork employers for workmen's
compensation insurance increased from $12,500,000 in 1914 to $62,000,000
in 1927 and 1928. Since then compensation premiums paid in the State
have receded, the amount for 1931 being $47.000,000 and for 1932 approximately $45,000,000.
Benefits paid and owing to injured employees, including the cost of
medical and surgical treatment, and to employees' dependents for death
benefits aggregated approximately $479,500,000 during the period from
July 1 1914 to Dec. 311932. This averages more than 5% in excess of the
contemplated loss ratio upon which premium rates are based.
Countrywide results for the year 1932 indicate that insurance companies
licensed in New .1 ork State earned premiums in that year totaling approximately $126,000,000. Benefits aggregating in excess of $87,000,000 have
been or must be paid on losses sustained in 1932 and expenses in excess of
$52,000,000 were incurred. The net underwriting loss of all carriers on
compensation business for the year was more than $13,500,000 or 10.8%
of earned premiums.
A loss ratio of 60% is considered normal for this class of business and is
sought to be achieved by both company underwriters and actuaries. The
remaining 40% of premiums is allocated to expenses. The results of 18%
years' experience under the Workmen's Compensation Law in New 1 ork
State show that in only four years did the results approximate the aim of
the rate-makers. Loss costs exceeded expectations in nine years and were
subnormal in the remaining five, when the experience was unusually good.
Favorable results which were achieved during the years 1917 to 1920.
Inclusive, are considered to have been the result of high wartime wages and
postwar prosperity. The loss ratio then mounted for several years but
fairly normal results were attained from 1925 to 1927. Since then the
experience has been adverse.
Statistics developed by the Insurance Department show the following
loss ratios for each year since the Workmen's Compensation Law became
effective:
Policy
Percent
Percent Policy
Percent Policy
Year—
Year—
Loss Ratio.
Loss Ratio.
Loss Ratio.
Year—
1914
52.8 1920
80.4
51.0 1926
1915
81.5
67.0 1921
59.8
1927
1918
1922
70.4
87.4
67.4 1928
1917
52.0 1923
70.8
71.4 1929
1918
56.5 1924
70.5
89.4
1930
1919
53.8 1925
87.8
81.1
1931
Incomplete results for 1932 show a loss ratio of 89.7%.
Glass Steagall Bank Act Regarded by Committee of
Association of Reserve City Bankers as Emergency.
Measure, Pending Development of Sounder Banking Structure—Urges Working Out by Bankers of
Reforms—Advises Against Withdrawal from Reserve
System Because of Guaranty Feature—Possibility
of Latter's Continuance Only as Temporary Plan.
Bankers are confronted with the responsibility of advancing
proposals for fundamental reforms in the nation's banking
system, according to a report of the Commission on Banking
Law and Practice of the Association of Reserve City Bank..
era,issued on July 31 at Chicago. The Commission is headed
by John H.Hogan of Chicago. It was noted in the New York
Volume A37
Financial C onicle
"Herald Tribune" of July 31 that the report regards the new
banking law as simply an emergency measure for the peni
of transition which is to produce a stronger banking structure. Fundamental reforms in the banking system are
needed, the report says, and bankers are warned not to emphasize unduly the deposits guaranty feature of the new national bank law.
Withdrawal from the Federal Reserve System because of
the deposit guaranty provision of the new law is advised
against by the report, said the paper indicated, the report
stating that such action would undermine public confidence
and weaken the Reserve System. Any tendency of the guaranty provision to unsettle the banking system would bring
about the intervention of Congress with suitable modifications, according to the report. From the "Herald Tribune"
we also quote as follows:
Bankers Found Best Equipped.
"It must be evident," says the report, "that the emergencies of the
present situation have placed squarely upon the shoulders of bankers a responsibility for making constructive proposals for remedynig conditions
which have brought great criticism upon the banking profession as a
whole, and in many instances great loss on many depositors. Bankers are
better equipped than any other group to point out the difficulties in the
present system and to suggest remedies for these difficulties.
"We believe that bankers as a whole are ready to assume their full share
of responsibility for the banking troubles which have occurred in this
country in recent years. However,it is only just that public opinion should
recognize that bankers have not alone been responsible for present conditions. It is fair to ask the people as a whole to assume a share of the responsibility.
Working Compromise Required.
"We must find a working compromise between free and easy banking,
which results in periodic distress, and a system so loaded down with laws
and regulations that, while it may be theoretically perfect, it will in fact
fail to provide the freely flowing life blood of industry and agriculture
which is its chief reason for existence. The records show that bankers
have repeatedly raised their voices in protest against the easy granting of
bank charters, but these bankers have been in the minority and public enthusiasm has swept over them. The bankers also know that a very definite
share of the responsibility for the present situation rests upon the Government itself. Federal charters have been too freely issued. Charters
have been issued in many of our 48 States to persons without any banking
experience and with inadequate capital. Government agencies have frequently been lax in their examinations and supervision of the banks so
chartered. The overwhelming proportion of bank failures has talien
place among the group of banks which were inadequately capitalized and so
small as to afford no opportunity for the development of sound banking
experience.
"If these factors are recognized, it may be possible for a group of bankers
whose record is unblemished to co-operate with the Government and the
Congress in bringing about the needed reform. Bankers stand ready to
co-operate with those who have charge of banking supervision and of banking legislation."
The report quotes Professor A. A. Berle Jr. as having been opposed to
the guaranty feature, and that "we have to regard the Glass-Steagall Act
as a bridge or transition rather than as a permanent solution."
"In view of the fact," the report continues. "that the strong banks of
the country, the Federal Reserve Board, the Treasury Department and
a wide section of public opinion was opposed to the guaranty plan, why
did it pass?
"This Commission suggests the following line of thought: A faulty
banking system was responsible. The man on the street knows that a bank
charter cannot be obtained except from a Government agency. He knows
that when sign 'bank' is put over a door. a Government agency has endorsed that establishment and permitted it to accept deposits.
The average small depositor has no basis for discriminating between a
safe bank and an unsafe bank. When,in these circumstances, thousands of
banks close, involving heavy losses to depositors, the average man feels
that a severe injustice has been perpetrated. From millions of men and
women in this situation a demand has arisen that their deposits should be
protected. As long as bank failures are permitted to continue, this demand
will exist.
"The great question before us to-day is not the soundness or unsoundness
of a deposit guaranty plan but a sound banking system.
"The guaranty plan involves a temporary fund and a permanent fund.
The temporary fund is based on limited contributions, and the contacts of
this Commission indicate that most bankers are inclined at this time to go
along with the temporary fund on the ground that it does not involve a
commitment to the permanent fund as now written on the statute books.
As to the permanent plan, this Commission is having exhaustive studies
made by bankers and by impartial experts outside of the banking business,
with a view to setting forth in a purely factual and impersonal way the dangerous possibilities involved in the operation of this plan.
"It appears to be the feeling of most bankers that if the facts with regard
to the permanent plan become generally known and if it proves to be the
case that the operations of this plan threaten the stability of the strong
banks of the country, the common sense and fair play of the public and of
Congress will lead to suitable modifications.
"It must be obvious that it is not the intention of the government, or
of the Congress, to ruin the banking system, but rather to strengthen it,
and this Commission believes that if the bankers will assume a constructive
attitude, modifications can be obtained in this legislation.
"A numbar of bankers have recently been quoted in the public press to
the effect that they propose withdrawing from the Federal Reserve system
as a result of the threats to the solvency of their instutitions involved in
the proposed permanent guaranty plan. Our recommendations is against
any such action.
"In the first place, wo believe that any attempt on the part of a large
number of banks to withdraw from the system might be met by legislation
which would render it impossible to operate outside of the Federal Reserve
system. In the second place, we feel it to be self-evident that if a large
group of banks were to withdraw from the system and as state non-member
banks were successfully to oppose legislation attempting to force them back
Into the system, the resulting controversy and discussion could not fail to
Upset public confidence in the banks as a whole and to produce another
serious banking situation.
961
Federal Reserve Board's Increased Powers Over Credit
Policy—Broadened Powers Surveyed by Edmund
Platt.
Under the Banking Act of 1933 the Federal Reserve Board
has greatly increased authority over the credit policy of the
nation, says Edmund Platt in the August issue of the "American Bankers Association Journal." Mr. Platt, Vice-President
Marine Midland Group, New York, was formerly ViceGovernor of the Reserve Board. "That the Reserve Board
has by recent legislation been placed pretty definitely under
control of the Treasury or of the Administration cannot be
doubted," he continues, "so far at least as matters of broad
credit policy which are assumed to affect prices of commodities are concerned."
As for the broadened powers, says Mr. Platt, "most of
these increases of authority have to do with administrative
detail and include prescribing regulations or enforcing penalties in a wide variety of cases, but there are several which
are far-reaching and have to do more or less with matters
of credit policy. Several pivotal sections of the Act are designed to prevent the use of Federal Reserve funds in speculation and to limit loans based upon stock and bond collateral.
One of these brings the Board into direct contact with member banks without any necessary intervention or recommendations from the Federal Reserve Banks." Mr. Platt goes
on to say:
"It is noteworthy that Sec. 3 of the new Banking Act distinctly gives
the Federal Reserve Banks authority to refuse to make loans to the member
banks. The amended paragraph formerly required that the \Board of
Directors of each Federal Reserve Bank 'shall administer the affairs of said
bank fairly and impartially and without discrimination in favor of or against
any member bank or banks, and shall, subject to the provisions of law and
the orders of the Federal Reserve Board, extend to each member bank such
discounts, advancements and accommodations as may be safely and reasonably made with due regard for the claims and demands of other member
banks.' The word 'shall' has been changed in the new act to 'may,' doubtless because the Federal Reserve Banks had often maintained that a member
bank presenting eligible,paper and needing funds because of loss of deposits
or because of deficient reserves was entitled to credit and that the Federal
Reserve Bank could not undertake to determine for what specific purpose
a credit, which in most cases had already been granted, was used.
"There is still another section in the new banking act, which has the
same purpose, the limiting of loans 'secured by collateral in the form of
stocks, bonds, debentures and/or other such obligations, or loans made to
members of any organized stock exchange, investment house or dealer in
securities, upon any obligation, note or bill secured or unsecured for the
purpose of purchasing and/or carrying stocks, bonds or other investment
securities.' It cannot be doubted that the amendments contained in these
three sections will make member banks much more careful in the future in
the matter of extending loans of a speculative character, and_g_they_ lead
to the formation_d_hattli ion_against the m_akingi loans that
cannot be paid witLiout sale
collateral they —,--N/111 have accomplished
something worth while.
"The most important of the other increases of Federal Reserve power
in the Banking Act of 1933 is the power of the Board to fix interest rates
on time deposits contained in Sec. IL Member banks are prohibited in this
section from paying any interest whatever on 'any deposit which is payable
on demand,' with certain exceptions relating mostly to deposit of public
funds 'made by or on behalf of any State' or other subdivision or municipality 'with respect to which payment of interest is required under State
law.' Whether this exception is broad enough to include what are known
as court funds on which interest is required by State laws in many States
is yet to be determined.
"In Sec. 30 the Board is given power to order the removal of officers
and directors of member banks who have been certified to the Board by
the Comptroller of the Currency or a Federal Reserve Agent as having continued to violate bank laws or who have continued 'unsafe and unsound
psactices' in conducting the banking business. There was originally a good
deal of opposition to this section, and the fact that it includes the power
of removal for 'unsafe or unsound' practices as well as for violation of law,
gives it a certain vagueness and apparently gives the Board or the Comptroller of the Currency considerable discretion in defining such practices.
_
"In two or three very important sections of the Act the Board is authorized to issue permits. One of these has reference to the control of bank
stock holding companies or group banking organizations. Another which -is •
found near the end of the Act, provides in the words of the report of the
Banking and Currency Committee of the Senate that 'no officer or director
of a member bank shall be an officer, director or manager of any institution engaged primarily in the business of purchasing, selling or negotiating
securities, that no member bank shall act as a correspondent bank for any
such institution and that no individual, partnership, corporation or un- `
incorporated association shall act as correspondent for any member bank,
unless a permit thereof is issued by the Federal Reserve Board. The issuance and revocation of any such permit rests with the discretion of the
Board.'"
"
alhe
Message of Governor Lehman to New York State
Legislature Asking for Moratorium on Home and
Farm Mortgage Foreclosures Until May 1 1934.
Swamped with demands for the relief of small home
owners facing loss of their property because of unemployment, Governor Herbert H. Lehman asked the New York
Legislature on Aug. 2 to declare a moratorium on home and
farm mortgage foreclosures until May 1 1934, at least.
Associated Press accounts from Albany Aug. 2, from which
we quote, went on to say:
The moratorium proposed by the Governor would apply to foreclosures
brought because of the non-payment of principal, provided taxes and
Interest and other charges had been paid.
Financial Chronicle
962
Aug. 5 1933
Mr. Lehman told the lawmakers in his special mortgage relief message
that he did not advise a general mortgage foreclosure moratorium because
be feared such a move would endanger banks. insurance companies and
the holders of guaranteed mortgage certificates.
At the same time he declared that deficiency judgments after foreclosure sales have been adding to the home owners' burden because they
are "entirely out of line with the fair value of the property." He asked
the lawmakers to give the Supreme Court the authority to determine
"the fair value of the real estate foreclosed, irrespective of the price bid.
and to limit the deficiency judgments only to the difference between that
determined value and the amount of the bond."
Governor Lehman also recommended that laws be passed to facilitate
the operation of the Federal Home Owners' Loan Act in this State. This
would include giving the State Superintendents of Banks and Insurance
'Corporation
the right to invest in the bonds issued by tbe Home Owner,
and also to exchange any mortgages they hold for such bonds. Mr.
Lehman also suggested that the bonds be made legal investments for
trust funds.
The Governor expressed the hope that by May 1 1934, the date he tentatively fixed for the end of the home and farm mortgage moratorium,
the Federal Act would be bringing some relief for hard-pressed mortgagors.
If not, he said, and if the "state of National recovery" requires it, the
Legislature may extend the moratorium.
He warned against the enactment of any moratorium measure that
might serve to encourage the nonpayment of taxes on real estate.
the complete deprivation of all income if any general moratorium were
declared which would excuse the non-payment of interest.
The financial situation of the municipalities of the State is involved
in any action which might encourage the non-payment of taxes on real
estate. A general moratorium on tax payments would seriously embarrass every municipality of the State.
The problem connected with the securing of deficiency judgments is
almost as important as that of mortgage foreclosures. I am of the definite
opinion that an end must be made of the present system of obtaining
exaggerated deficiency judgments.
A deficiency judgment should bear some definite relation to the real
value of the property, rather than to the price established at the forced
auction sale.
Not only homes, but all forms of real estate are equally affected by
this. I believe that such relief should be extended to all real estate.
Authority fhould be granted to the Supreme Court to determine the
fair value of the real estate foreclosed, irrespective of the price bid, and
to limit the deficiency judgment only to the difference between that determined value and the amount of the bond. The burden of proving such
value should be placed upon the mortgagee foreclosing the property,
and in the absence of such proof the presumption should be that the value
of the property is at least the amount of the first mortgage.
In order to facilitate the operation of the provisions of the Home Owners'
Loan Act, I recommend certain supplemental State legislation.
Would Embarrass Municipalities.
In the first place, I suggest that it be provided that all institutions
under the supervision of the Superintendent of Banks and of the Superintendent of Insurance be empowered not only to invest in the bonds issued
by the Home Owners' Loan Corporation, but also to exchange any mortgages held by them for such bonds.
I also suggest that such bonds be made legal investments for trust funds.
Trustees holding mortgages should be authorized to exchange such mortgages for bonds issued by the Home Owners' Loan Corporation.
And lastly, I recommend that the power already invested in banking
institutions to invest in farm loan bonds of the Federal Land Bank be
extended to insurance companies.
I believe that these various acts on the part of the State will go far
to aid the refinancing of mortgages provided for in the Home Owners'
Loan Act.
About three weeks ago I appointed an advisory committee on home
and farm mortgages. An extraordinary session was not at that time
In contemplation. I had hoped that this committee would consider the
entire subject of mortgage foreclosures and the questions relating thereto
in an orderly, deliberate manner and give me, as well as the Legislature,
the benefit of its views or recommendations.
But as soon as I found it essential to call an extraordinary session of
the Legislature. I requested the committee to proceed without loss of
time to a consideration of the subject. The committee has willingly cooperated with me and for the past two weeks has been in almost constant
session.
Its report, however, has not yet been submitted, but I am informed that
at least a preliminary report will be ready shortly.
I, therefore, recommend to your consideration, pursuant to Article IV,
Section 4 of the Constitution, the enactment of legislation relating to
the foreclosure of mortgages on real estate: legislation which would limit
the amount of a deficiency judgment, and legislation authorizing banking
institutions, insurance companies and trustees to exchange any mortgages
held by them for bonds issued by the Home Owners' Loan Corporation
and otherwise to invest in such bonds and farm loan bonds.
HERBERT H. LEHMAN.
"A general moratorium on tax payments would seriously embarrass
every municipality in the State," be said.
He recommended that the moratorium legislation should provide "that
the liability of any guarantor of the payment of the principal or any instalment of any mortgage shall not be released by the moratorium but
shall likewise be postponed for the same period."
"Incorporation of such a provision is automatically made necessary
by the creation of a moratorium," Mr. Lehman said. "In fact, it serves
to indicate forcefully the existence of a delicate interdependence of the
many distinct interests of various groups of our citizens."
. In declining to declare a general moratorium on foreclosures, the Governor declared that "the effect of such a moratorium on millions of our
people would be very great, the extent cannot possibly be foreseen. I
have given the most careful study and consideration to this subject, as
the plight of the home-owner generally has engaged my deep sympathy."
The Governor's message follows:
To the Legislature (in Extraordinary Session):
It is evident that the State will have to intervene to prevent to some
extent the hardships now being occasioned by foreclosures of mortgages
on homes and farms. Owing to the current depression thousands of
our citizens, who have invested their life savings in individual homes,
now find themselves faced with the prospect of having these homes taken
from them. Continued unemployment has drained their resources.
They find themselves unable to meet principal maturities.
If there were available a ready market for mortgages, they would be
able to help themselves by refinancing their mortgages. The fact is,
however, that the real estate market has become so disorganized that
the ordinary channels for obtaining new mortgages on homes are practically closed. Refinancing of a matured mortgage has become well-nigh
impossible. Home owners in many cases have been forced, as a consequence, to give up their homes.
The hardship has been seriously aggravated by reason of the fact that.
upon foreclosure sales, deficiency judgments have been entered against
home owners entirely out of line with the fair value of the property.
In this way, not only does the small home owner lose his home but he
frequently becomes saddled with an excessive deficiency judgment for
the rest of his life. The cause of these deficiency judgments is again
the absence of any real estate market, and the consequent reluctance
to bid on the foreclosure block.
The problem is a most difficult one, with far-reaching ramifications
and effects. If it were happily one of simply extending relief to the home
owner it would not be so difficult of solution. It is, however, tied up
inextricably with the interests of virtually all other groups of citizens
who are entitled to State protection to the same extent as are the home
owners of the State.
In adopting a program for mortgage relief it is therefore essential not
only to consider the plight of the home owner but also the effect of that
program on millions of others whose welfare and, indeed, whose very
existence may be determined by it. The greatest good for the greatest
number should be the determining factor.
I believe that at least until May 1 1934 home owners should be protected from foreclosures brought by reason of non-payment of principal,
providing taxes and interest and other charges have been paid. Such
legislation will bring relief to a very substantial number of home owners
without seriously affecting the interests of the other great classes of our
population.
Any legislation for such a moratorium, however, should provide that
the liability of any guarantor of the payment of the principal, or any
instalment, of any mortgage shall not be released by the moratorium, but
shall likewise be postponed for the same period.
Incorporation of such a provision is automatically made necessary
by the creation of a moratorium. In fact, it serves to indicate forcefully
the existence of a delicate interdependence of the many distinct interests
of various groups of our citizens.
My thought is that by that date the provisions of the Federal Home
Owners' Loan Act might have given some relief for hard-pressed mortgagors: and that the Legislature, which will before then be in session, can
determine whether or not, in view of all the circumstances, including
the state of National recovery, a continuance of such moratorium is necessary and advisable.
I recommend that this relief be extended only to real estate actually
occupied by the individual owner thereof, either by himself or in conjunction with not more than one other family, and to a farm occupied
by the owner.
I do not see my way clear to recommend at this time any general moratorium on foreclosures based merely upon a default in the payment of
interest or taxes. The effect of such a moratorium on m.ilions of our
people would be very great, the extent of which cannot possibly be foreseen.
I have given the most careful study and consideration to this subject,
.as the plight of the home owner generally has engaged my deep sympathy.
If interest on mortgages is not paid, the default affects savings bank
and insurance companies, which are the custodians of the savings of many
millions of people. There are many thousands of persons of limited
means whose sole livelihood is the income from one or more mortgages.
Many hundreds of thousands of our citizens have their savings invested
In guaranteed mortgage certificates; they might suddenly be faced with
Bond Legislation Recommended.
Merger of Mississippi Joint Stock Land Bank with
Tennessee Joint Stock Land Bank.
In the Memphis "Commercial Appeal" of July 21 it was
stated that the merger of the Mississippi Joint Stock Land
Bank with the Tennessee Joint Stock Land Bank for purposes of administrative economy was announced on July 20
by T. W. Woodbury, Secretary of both banks. The merger,
it was stated, would become effective at the close of business
July 31. The Tennessee Land Bank will retain its present
offices, which are also occupied by the Mississippi Land
Bank, on the second floor of the National Bank of Commerce
in Memphis. From the "Commercial Appeal" we also
quote the following:
"The merger is solely in the interests of economy and for more efficient
operation by eliminating a large amount of bookkeeping," said L. K.
Thompson. President of the Land Banks. "The interests of the stockholders will be the same under the merger and no change will be made in quarters or personnel."
Stockholders of the Mississippi Land Bank voted the merger at a meeting Wednesday [July 191 with the consent of the Federal Farm Loan Board
that the bank go into voluntary liquidation. The Tennessee Land Bank
will acquire the assets and assume the Mississippi bank's liabilities.
The Mississippi bank will receive a consideration of 3.500 shares, of a
par value of $350,000. of the Tennessee Land Bank. This represents the
full amount of the outstanding stock of the Mississippi Land Bank. All
except three shares of the stock of the Mississippi Land Bank are owned by
the Tennessee Land Bank stockholders.
Directors of the banks are: C. V. Moore, President; Mr. Thompson,
Vice-President; R. B. Barton, T. 0. Vinton, Will Trigg, H. A. Ramsey,
R. B. Snowden and John Phillips.
Sister of Senator Glass Named Assistant
Treasurer of United States.
Mrs. Marion Glass Bannister, sister of Senator Glass,
was appointed by President Roosevelt on July 26 to be
Assistant Treasurer of the United States. She is the first
woman to occupy this post, which carries responsible duties
and a salary of $5,600 a year. A Washington dispatch,
July 26, to the New York "Times" noting this, added:
Mrs. Bannister is the second woman to go into the Treasury. Mrs.
Nellie T. Rosa, Vice-Chairman of the Democratic National Committee, is
Director of the Mint. Mrs. Bannister has been active In:Democratic
politics for years. At one time she was publisher of a local magazine.
Volume 137
Financial Chronicle
President Roosevelt Reported Satisfied That Business
Is Gaining Without Resort to Inflation at This
Time—Treasury Credit Factor—Federal Reserve
May Increase Buying of Securities in Open Market.
The Government does not contemplate entering upon
inflation of the currency at present and will issue cheaper
money only as a last resort to stimulate trade, according to a
close adviser of the President, who diseussed financial policies
with him this week. Advices to this effect were contained
in a Washington account Aug. 3 to the New York "Times,"
which also had the following to say:
This official asserted to-day that the President was well satisfied with
the business improvement and the Government's ability to borrow money
at cheap rates. These are interpreted as good signs, and if the conditions
tontinued as the recovery program broadened, it was believed no real inflation of the currency would be necessary.
The President's attitude is represented to be that more money need
not be put into c:rculation if the recovery plan succeeds. If it is apparent
after a thorough test of the recovery plans that additional stimulation to
trade is necessary, then the President, it was said, will not hesitate to try
some form of real currency inflation.
But, viewing the situation to-day, this official said that inflation appeared
to be far distant and may never be made a part of the Roosevelt Administration's policies.
To Continue Present Policy.
The pre3ent currency policy of the Government will be continued,
with the Federal Reserve perhaps increasing its purchases of Government securities in the open market, it was said at the Treasury. This
is considered a mild type of inflation, as it leads to the substitution of
Federal Reserve bank notes for Federal Reserve notes. But it is not the
kind demanded by the real inflationists. This group wants currency
issued without'any collateral behind it.
The Federal Reserve bank notes are backed by virtually any sound
collateral held by the issuing banks, while the Federal Reserve notes
are backed by a minimum of 40% gold.
Since February there has been a gradual increase in the volume of Federal Reserve b nk notes outstanding, while the Reserve notes have been
reduced heavily. Until recently there was a small increase in National
bank notes, but in July this type of currency in circulation dropped somewhat.
Some Treasury experts insisted to-day that no inflationary plan was
under consideration. Officials declined to say what would be done if the
dollar continued to decline abroad.
Liberal Credits Urged.
President Roosevelt has urged that the banks liberalize their credit
policies in order to get money to work. This was taken to indicate that
the Federal Reserve banks might increase their purchases of Government
securities. They have been buying small amounts of Government bonds
weekly for some time.
The recovery program will stimulate the inflation of credit through
large expenditures of public funds. Some experts question, however,
whether money can be put into use as rapidly and in as large volume as
was thought possible.
The plan of General Hugh S. Johnson, Administrator under the NIRA,
was to get $1,000,000,000 to work by Oct. 1. For every billion dollars
in money put to work, 1,000,000 persons may be returned to employment.
in General Johnson's opinion.
Continued talk is heard here of a reduction in the gold content of the
dollar, although, according to Treasury experts, the establishment of a
permanent gold policy at this time appears to be remote. The Treasury
desires to study the results of the recovery program, with its relation to credit
conditions, and to watch the course of the dollar in foreign exchange before
deciding on any change.
Gold Currency Return Doubted.
It was pointed out in Treasury circles that the United States has been
off the gold standard but five months and that this is not a sufficient time
in which to make an adequate appraisal of the gold situation.
In the meantime the Government is gradually drawing in gold from circulation and impounding it in the Treasury and the Reserve banks.
President Roosevelt Desires to Convert-Liberty Loan
Bonds—Portion of the 43s May Be Refunded.
President Roosevelt indicated on Aug. 2 that if the market
is good between now and the middle of September there may
be a partial conversion of the Fourth 4Yi% Liberty Loan.
We quote from advices from Hyde Park on that date to the
New York "Journal of Commerce," which also said in part:
The Liberty 414s are callable only on six months' notice to bondholders.
In view of the huge volume of this loan there had of course been no expectation of refunding the entire amount which exceeds $6,000,000,000. Presumably, special series will be called.
In calling special blocks of the loan the Treasury presumably would issue
other bonds carrying a lower coupon. The 8-year bonds to be delivered on
Aug. 15 Carry only 3I%. The Fourth 4s being called would no doubt
be convertible into the new bonds. 4 AAA
Bearing on "Inflation."
The indication that President Roosevelt is seriously considering the refunding of the 4 Vie was especially interesting because of its possible bearing
on the possibility of inflation. With the Government seeking to mobilize
most of its outstanding debt into long-term bonds carrying low coupons,
inflation becomes the less likely. Of course, no evidence exists that intentions will not change before the date on which notice would have to be
given to holders of the loan.
The President noted that the Government balances to-day are the highest
since war times. Cash balances are $1,500,000,000. The large balances
result from the policy of issuing more obligations on maturity dates than
are required in order to meet running expenses, interest and principal.
The cash balances built up in this way have, of course, no bearing on the
Government deficit. . . •
The President said that Reconstruction Finance Corporation expenses
the rest of the year will not exceed $500,000,000. Maturit'es until the
end of the year are relatively light so that the Government will be able
to retail its large balances. They can be used in part to aid in the refunding program under contemplation.
963
Dr. W. L. Thorp of Amherst College Named Director
of Bureau of Foreign and Domestic Commerce-Economics Professor Succeeds F. L. Feiker.
Dr. Willard L. Thorp, Professor of Economics at Amherst
College, has been appointed by President Roosevelt as
Director of the Bureau of Foreign and Domestic Commerce
of the Department of Commerce, it was announced in
Washington on July 31. Dr. Thorp is only 34 years old
but has had considerable experience in research and statistical
work, and is the author of several books on economic and
business questions. Secretary of Commerce Roper, in
making the announcement, said that the Bureau under its
new leadership will lay particular stress on economic facts
and figures considered essential in supporting the work of
the NRA and of special application in long-range economic
planning. Secretary Roper stated:
it is believed that with emphasis on basic research applying particularly
of
to problems such as estimating production and consumption, growth
productive capacity, expansion of industry in terms of equipment, markets
and employment, machinery depreciation and obsolescence, the future of
American foreign trade and a wide range of similar topics, a better sense
of direction can be given to business with eventually a much greater degree
of national economic security and stability.
Such work in the Bureau of Foreign and Domestic Commerce rests on the
belief that long-time problems of the type listed above must be faced if
industry is to be put back on a sound footing and started forward once
more along the pathway of reasonably assured progress.
The established functions of the Bureau in the promotion of trade at
home and abroad will be carried on as usual, but more attention will be
given to studies which may assist in the determination of broad economic
policies, helpful not only to business men but the Government as well.
Combined Offering of $850,000,000 or Thereabouts in
Treasury Bonds and Notes in Government's
August 15 Financing—Comprises $500,000,000 31,4%
/3% Two-Year
Eight-Year Bonds and $350,000,000 15
Notes—Bonds Subject to Surtax and Profits Taxes—
Books Closed—Issues Heavily Oversubscribed—
Bonds in Denominations as Low as $50.
The Treasury's August 15 financing, announced July 30
by Dean Acheson, Acting Secretary of the Treasury, represented a combined offering of Treasury Bonds and Notes
totaling ',,:50,000,000 or thereabouts, of which $500,000,000
consists of 8-year 314% Treasury bonds of 1941, and $350,000,000 of 2-year 1%% Treasury notes of series B 1935.
Subscriptions to the new offering were invited Monday
July 31; in the case of the Treasury notes the subscription
books were closed at the close of business July 31; the books
for the Treasury bonds were also closed July. 31 so far as
cash subscriptions of over $10,000 were concerned, but
remained opened for cash subscriptions up to and including
$10,000 and subscriptions for which Treasury certificates
maturing Aug. 15 and Sept. 15 ware offered in exchange.
On Aug. 2, the books on the bonds were closed in the case
of cash subscriptions, up to an' including $10,000, and for
the exchange of certificates maturing Aug. 15, the books
continuing open Aug. 2 only as to th 3 exchange offering
applying to certificates maturing Sept. 15. The total subscriptions to the combined offering of $850.000,000 was
announcei on Augud 2 as having exceeded $4,500,000,000—
the $500,000,000 bond issue having been oversubscribed
six times, and the $350,000,000 Treasury notes having
brougbt subscriptions of $1,500,000,000. These fieures as
to the oversubscription were given out Aug. 2 by President
Roosevelt at his Hyde Park (N. Y.) home, where he is
enjoying a brief vacation. As to the President's announcement the New York "Times" reported the following from
Hyde Park Aug. 2:
President Roosevelt announced this to-day,adding with a smile that the
Treasury would have on hand on Aug. 15 more cash than at any other time
in history, even during the World War. On that date its bank balance,
figuratively speaking, will be in excess of $1,500,000,000.
The response to the Federal financing program was more enthusiastic
than even the most optimistic members of the administration. including
President Roosevelt. had forecast. It turns financing problems for the
remainder of 1933 into mere routine instead of problems to vex the Treasury.
The President's enthusiasm over the success of the financing program
reflected that of Secretary Woodin and Dean Acheson. Under Secretary,
with whom he talked over the telephone to-day.
The large subscription was taken as extraordinary evidence of the confidence of the country in administration policies, possibly the strongest
manifestation of support yet received by Mr. Roosevelt since he assumed
office.
First Bonds in Two Years.
Acceptances of subscriptions to the bond issue probably will exceed
$1.000.000,000. it was indicated here, since the Treasury is accepting
every offer to purchase the bonds from subscribers requesting allotments
under $10.000. and Is accepting in addition all offers by holders of Treasury
certificates maturing in September to turn them in in exchange for the
new bon ts.
The certificates maturing in September total 11451.447,000 and bear
interest of 4%. Exchange tenders on these exceeding $180,000,000 already
have been received. . . •
The Government has on hand at present about $700.000.000 in cash.
On Aug. 15 It must meet maturities of Treasury certificates totaling $461.000.000. but this refinancing is being accomplished in large part through
the issue of Treasury notes. which has just been heavily oversubscribed.
964
Financial Chronicle
Only $1,500,000,000 Needed.
The net result of these factors, it was explained here, is that the financing
program for the remainder of 1933 is made "infinitely easier than had been
hoped for."
To carry on past next Jan. 1, the Government need obtain only about
$1.500,000.000 of additional funds, including all direct expenditures and
such indirect ones as financing the Reconstruction Finance Corporation.
The direct expenditures include $1,000,000,000 for refunding purposes.
The indirect expenditures include Federal unemployment relief, public
works and all similar projects.
The announcements of the closing of the subscription
books were made as follows in the circulars issued by the
Federal Reserve Bank of New York:
FEDERAL RESERVE BANK OF NEW YORK.
[Circular No. 1259, July 31 1933.1
Subscription Books Closed.
On offering of United States of America Treasury Notes. 1%% Ser. B-1935.
On offering of United States of America 334% Treasury Bonds of 1941,
except as stated below.
To all Banks and Trust Companies in the Second
Federal Reserve District and Others Concerned:
In accordance with instructions from the Treasury Department the
subscription books for the offering of United States of America Treasury
notes, 14%,series B-1935, due Aug. 1 1935. dated and bearing interest
from Aug. 15 1933, were closed at the close of business to-day, Monday.
July 31 1933.
The subscription books for the offering of United States of America
% Treasury bonds of 1941, dated and bearing interest from Aug. 15
1933. due Aug. 1 1941, were also closed at the close of business to-day.
Monday, July 31 1933, for cash subscriptions for amounts over $10,000,
but will remain open until further notice for cash subscriptions for amounts
up to and including $10,000, and for subscriptions for which payment is
tendered in United States of America Treasury certificates of indebtedness
of series TAG-1933 maturing Aug. 15 1933, or series TS-1933 maturing
Sept. 15 1933.
Subscriptions for Treasury notes, series B-1935, and subscriptions for
% Treasury bonds of 1941 for amounts over $10,000, actually mailed
before midnight, Monday, July 31 1933, as shown by post office cancellation, will be considered as having been entered before the close of the
subscription books.
GEORGE L. HARRISON,
Governor.
FEDERAL RESERVE BANK OF NEW YORK.
[Circular No. 1262, Aug. 2 1933.1
Subscription Books Closed.
On offering of United States of America 33.1% Treasury bonds of 1941
except as stated below.
To all Banks and Trust Companies in the Second
Federal Reserve District and Others Concerned:
In accordance with instructions from the Treasury Department the subscription books for the offering of United States of America 33.j,% Treasury
bonds of 1941, dated and bearing interest from Aug. 15 1933, due Aug. 1
1941, which were closed on Monday, July 31 1933, for cash subscriptions
for amounts over $10,000, were closed at the close of business to-day.
Wednesday, Aug. 2 1933, for the receipt of cash subscriptions for amounts
up to and including $10,000, and for subscriptions for which payment is
tendered in United States of America Treasury certificates of indebtedness
of series TAG-1933 maturing Aug. 15 1933.
All cash subscriptions for amounts up to and including $10,000, and
subscriptions for which payment is tendered in Treasury certificates of
Indebtedness maturing Aug. 15 1933, actually mailed before midnight,
Wednesday, Aug. 2 1933, as shown by post office cancellation, will be
considered as having been entered before the close of the subscription books.
The books will remain open until further notice for the receipt of subscriptions for which payment is tendered in United States of America
Treasury certificates of indebtedness of series TS-1933 maturing Sept. 15
1933.
GEORGE L. HARRISON.
Governor.
The $500,000,000 33% Treasury bonds of 1941 will be
dated and bear interest from Aug. 15 1933 and will mature
Aug. 1 1941. They will not be subject to call before maturity.
The Secretary of the Treesury reserved the right to increase
the offering by an amount sufficient to accept all subscriptions for which 13 % Treasury certificates of indebtedness
of series TS-1933 maturing Sept. 15 were tendered in payment; on this point the Treasury circular bearing on the
bond offering said:
Cash subscriptions for amounts up to and including $10,000 will be
allotted in full;subscriptions for which payment is to be tendered in Treasury
certificates of indebtedness of series TAG-1933 maturing Aug. 15 1933, will
be given preferred allotment; and subscriptions for which payment is to be
tendered in Treasury certificates of indebtedness ofseries TS-1933, maturing
Sept. 15 1933, will be allotted in full. All cash subscriptions for amounts
over $10,000 will be allotted on an equal percentage basis.
The Secretary of the Treasury reserves the right to reject any subscription,
In whole or in part, and to allot less than the amount of bonds applied for
and to close the books as to any or all subscriptions at any time without
notice; the Secretary of the Treasury also reserves the right to make allotment in full upon applications for smaller amounts, to make reduced
allotments upon, or to reject, applications for larger amounts, and to make
classified allotments and allotments upon a graduated scale; and his action
In these respects shall be final. Allotment notices will be sent out promptly
upon allotment,and the basis of the allotment will be publicly announced.
Ths. bonds will be in bearer and registered form, as follows:
Bearer bonds with interest coupons attached will be issued in denominations of $50, $100, $500. $1,000, $5,000, $10,000 and $100,000. Bonds
registered as to principal and interest will be issued in denominations of
$50. $100, $500. $1,000. $5,000, $10,000. $50,000 and $100,000. Provision
will be made for the interchange of bonds of different denominations and of
coupon and registered bonds and for the transfer of registered bonds, without charge by the United States, under rules and regulations prescribed by
the Secretary of the Treasury.
Aug. 5 1933
An important feature of the provisions governing the
issuance of the bonds is the fact that they are made subject
to surtaxes and excess profits and war profits taxes, as evidenced by the following which we quote from the Treasury
circular:
The bonds shall be exempt, both as to principal and interest, from all
taxation now or hereafter imposed by the United States, any State, or any
of the possessions of the United States, or by any local taxing authority,
except (a) estate or inheritance taxes, and (b) graduated additional income
taxes, commonly known as surtaxes, and excess profits and war profits
taxes, now or hereafter imposed by the United States, upon the income or
profits of individuals, partnerships, associations, or corporations. The
Interest on an amount of bonds authorized by said Act approved Sept. 24
1917,. as amended, the principal of which does not exceed $5,000, owned by
any individual, partnership, association, or corporation, shall be exempt.
from the taxes provided for in clause (b) above.
The bonds will be acceptable to secure deposits of public moneys, and
will bear the circulation privilege as provided in the Act approved July 22
1932, as amended. They will not be entitled to any privilege of conversion.
In the case of the new $350,000,000 Treasury notes it is
stipulated:
The notes shall be exempt, both as to principal and interest, from all
taxation (except estate or inheritance taxes) now or hereafter imposed by
the United States, any State, or any of the possessions of the United States,
or by any local taxing authority.
The notes will not be acceptable in payment of taxes.
The notes will be acceptable to secure deposits of public moneys, but will
not bear the circulation privilege.
The bonds do not contain the gold payment clause and
are the first to be issued without such stipulation.
The Treasury notes will be dated Aug. 15 1933 and will
bear interest from that date at the rate of 14% per annum,
payable on a semi-annual basis on Feb. 1 and Aug. 1 in each
year. They will mature Aug. 1 1935 and will not be subject
to call for redemption prior to maturity. Bearer notes with
interest coupons attached will be issued in denominations
of $100, $500, $1,000, $5,000, $10,000 and $100,000. The
notes will not be issued in registered form.
Regarding the allotments with respect to the notes, the
Treasury circular dated July 31 said:
Cash subscriptions for amounts up to and including $10,000 will be allotted in full. Subscriptions for which payment is to be tendered in Treasury certificates of indebtedness of Series TAG 1933, maturing Aug. 16.
1933, will be given preferred allotment. All cash subscriptions for amounts
over $10,000 will be allotted on an equal percentage basis.
The Secretary of the Treasury reserves the right to reject any subscription, in whole or in part, and to allot less than the amount of notes applied
for and to close the books as to any or all subscriptions at any time without
notice; the Secretary of the Treasury also reserves the right to make allotment in full upon applications for smaller amounts, to make reduced allotments upon, or to reject, applications for larger amounts, and to make
classified allotments and allotments upon a graduated scale; and his action
in these respects shall be final. Allotment notices will be sent out promptly
upon allotment and the basis of the allotment will be publicly announced.
The stipulation as to payment for the notes follows:
Payment at par and accrued interest for notes allotted must be made
on or before Aug. 15 1933 or on later allotment. Any qualified depositary
will be permitted to make payment by credit for notes allotted to it for
Itself and its customers up to any amount for which it shall be qualified in
excess of existing deposits, when so notified by the Federal Reserve bank
of its district. Treasury certificates of indebtedness of series TAG
-1933.
maturing Aug 15 1933, will be accepted at par in payment for any notes
which shall be subscribed for and allotted, with an adjustment of the interest accrued, if any, on the notes so paid for.
From the Treasury circular detailing the bond offering
we quote:
Payment at par and accrued interest for bonds allotted must be made
on or before Aug. 15 1933 or on later allotment. Any qualified depositary
will be permitted to make payment by credit for bonds allotted to it for
itself and its customers up to any amount for which it shall be qualified in
excess of existing deposits, when so notified by the Federal Reserve bank
of its district. Treasury certificates of indebtedness of series TAG-1933,
maturing Aug. 15 1933, will be accepted at par in payment for any bonds
which shall be subscribed for and allotted, with an adjustment of the interest accrued, if any, on the bonds so paid for. Treasury certificates of
indebtedness of series TS-1933, maturing Sept. 15 1933 (with coupon dated
Sept. 15 1933 attached) will be accepted at par in payment for any bonds
which shall be subscribed for and allotted, with an adjustment of accrued
Interest as of Aug. 15 1933.
In his announcement of the combined offering Acting
Secretary of the Treasury Acheson called particular attention
to the bond offering, which he stated "is the first since the
issue of Sept. 15 1931. During the intervening period the
Treasury's financing has been conducted largely on the basis
of relatively short-term issues." With the issuance of the
bonds in denominations as low as $50 Mr. Acheson noted
that "this issue of bonds is designed to Word even the small
investor an opportunity to aid in the conduct of the National
recovery program of the Federal Government." The
announcement July 30 of Mr. Acheson in the form of a letter
to the banking institutions follows:
The Treasury is to-day inviting subscriptions for $500,000,000 of 8-year
% Treasury bonds of 1941, and $350,000,000 of two year P4% Treasury notes of Series B-1935. These funds are needed to meet near-term
requirements for the conduct of the Government's recovery program and
In part also to meet obligations which mature on Aug. 15.
our attention is particularly invited to the offering of bonds which is.
the first since the issue of Sept. 15 1931. During the intervening period,
the Treasury's financing has been conducted largely on the basis of relatively short-term issues. The time has now come when, because of iin-
Volume 137
Financial Chronicle
proved conditions and the steps already accomplished in the fiscal program
of the Government we can and should confidently begin to finance the
needs of the Government upon a longer term basis. The large oversubscription of the recent issue of five-year Treasury notes is an assurance the
bonds now offered will meet the needs and the approval of the investing
public.
This issue of bonds is designed to afford even the small investor an
opportunity to aid in the conduct of the National Recovery program of the
Federal Government. This program is being actively administered. The
broadest possible support, financial and otherwise, is essential to its success.
It is the intention of the Government to enlist such support and to invite
popular participation in the necessary financing.
The rate of interest and the maturity of these bonds, and the small
denominations in which they are made available, should make then attractive to individuals of small means as well as to the large investor. It is
urgently desired that active efforts be made to acquaint all classes of investors with the advantages of this issue and with the need for their participation. A broad distribution of United States bonds will place funds at
the Government's disposal for constructive use upon a basis which will
simplify the Treasury's financing. To the extent that the bonds are absorbed by the public the banks will be in a better position to accommodate
other credit needs.
In the past the co-operation of the banking institutions of the country
in placing Government securities with investors has been most effective.
In the announcements pertaining to the Aug. 15 offerings, it is stated that
the banking institutions will handle applications for subscribers. I am
confident that I can rely upon your active co-operation, not only in handling
subscriptions, but also in obtaining a broad distribution of this issue.
Very truly your,
DEAN ACHESON,
Acting Secretary of the Treasury.
On July 30 announcement of the proposed offering was
made as following by Secretary Woodin at his home at East
Hampton, Long Island.
To-morrow (Monday) morning the Treasury Department will announce
its August financing. The announcement will include an offering of about
$500,000,000 of bonds for public subscription as well as a smaller amount
of short-term obligations.
These are the first bonds, as distinguished from short-term securities,
to be issued by the Government since 1931. The issue is not a very large
one, but it is an important one. It marks a further step in placing Government finance on a broader and more stable base. It gives the public
generally a wider opportunity to participate in the Government's Recovery
program.
The President in his address over the radio last Monday night made it
clear that the success of the Government's plans depends upon the fullest
co-operation from all the people. It is a source of satisfaction that the improvement in banking and financial conditions and the greater assurance
as to the future now make it possible for the Government to issue a security
which will be attractive to individual investors as well as to financial institutions.
The coming issue will be made available in denominations as low as
$50 so that people with limited amounts to invest, as well as large investors
may buy them. The amount of the issue, the rate of interest and the
maturity, which will be announced from the Treasury Department Monday.
will make the bonds attractive investments.
Congress and the administrative departments have made remarkable
headway in reducing ordinary expenses, which have been brought within
current revenues. New sources of revenue have been provided for interest
and repayments of funds borrowed for emergency purposes. These emergency expenditures are essentially of a constructive character and are being
administered with a view to promoting a maximum of improvement in employment and in economic conditions generally. A considerable part of
the funds so expended will eventually return to the Treasury.
I am confident that this offering of bonds will be recognized by individual
and corporate investors, large and small, as tangible evidence of improved
economic conditions and as an opportunity for investment.
The subscription books will be opened Monday and may be closed at any
time. Applications for bonds of the new issue should be made promptly.
Banking institutions generally will be in a position to inform purchasers as
to how to proceed.
Below we give the Treasury circulars detailing the bond
and note offerings:
UNITED STATES OF AMERICA.
33.1% Treasury Bonds of 1941
Dated and bearing interest from Aug. 15 1933.
Due Aug. 1 1941.
Interest Payable Feb. 1 and Aug. 1.
The Secretary of the Treasury invites subscriptions, at par and accrued
interest, from the people of the United States, for 3 % Treasury bonds of
1941, of an issue of bonds of the United States authorized by the act of
Congress approved Sept. 24 1917, as amended. The amount of the offering
is $500,000,000, or thereabouts, with the right reserved to the Secretary
of the Treasury to increase the offering by an amount sufficient to accept
all subscriptions for which 1 % Treasury certificates of indebtedness,
Series TS-1933, are tendered in payment.
Description of Bonds.
The bonds will be dated Aug. 15 1933, and will bear interest from that
rate
of Ui% per annum, payable on a semi-annual basis on
date at the
Feb. 1 and Aug. 1 in each year. They will mature Aug. 1 1941, and will
not be subject to call for redemption prior to maturity.
•
Bearer bonds with interest coupons attached will be issued in denominations of $50, $100. $500, $1,000, $5,000, $10,000 and $100,000. Bonds
registered as to principal and interest will be issued in denominations of
$50,$100.$500.$1,000,$5,000,$10,000, $50,000'and $100,000. Provision
will be made for the interchange of bonds of different denominations and of
coupon and registered bonds and for the transfer of registered bonds,
without charge by the United States, under rules and regulations prescribed
by the Secretary of the Treasury.
The bonds shall be exempt, both as to principal and interest, from all
taxation now or hereafter imposed by the United States, any State, or any
Of the possessions of the United States, or by any local taxing authority,
except (a) estate or inheritance taxes, and (b) graduated additional income
taxes, commonly known as surtaxes, and excess-profits and war-profits
taxes, now or hereafter imposed by the United States, up& the income or
Profits of individuals, partnerships, associations, or corporations. The
interest on an amount of bonds authorized by said act approved Sept. 24
1917, as amended, the principal of which does not exceed $5,000, owned by
any individual, partnership, association, or corporation, shall be exempt
from the taxes provided for in clause (b) above.
965
The bonds will be acceptable to secure deposits of public moneys,and will
bear the circulation privilege as provided in the act approved July 22 1932,
as amended. They will not be entitled to any privilege of conversion.
The bonds will be subject to the general regulations of the Treasury
Department, now or hereafter issued, governing United States bonds.
Application and Allotment.
Applications will be received at the Federal Reserve banks and branches
and at the Treasury Department, Washington. Banking institutions
generally will handle applications for subscribers, but only the Federal
Reserve banks and the Treasury Department are authorized to act as
official agencies. Banking institutions which have been licensed to resume
their normal banking functions are permitted to handle subscriptions in
the usual manner. Unlicensed banking institutions are authorized to
accept applications for subscribers and to hold in segregated accounts
funds tendered in payment pending transmittal to a Federal Reserve Bank
or branch.
Cash subscriptions for amounts up to an dincluding $10,000 will be
allotted in full; subscriptions for which payment is to be tendered in Treasury certificates of indebtedness of Series TAG-1933, maturing Aug. 15
1933, will be given preferred allotment; and subscriptions for which payment is to be tendered in Treasury certificates of indebtedness of Series
TS-1933, maturing Sept. 15 1933, will be allotted In full. All cash subscriptions for amounts over $10,000 will be allotted on an equal percentage
basis.
The Secretary of the Treasury reserves the right to reject any subscription, in whole or in part, and to allot less than the amount of bonds applied
for and to close the books as to any or all subscriptions at any time without
notice; the Secretary of the Treasury also reserves the right to make allotment in full upon applications for smaller amounts, to make reduced allotments upon, or to reject, applications for larger amounts, and to make
classified allotments and allotments upon a graduated scale; and his action
in these respects shall be final. Allotment notices will be sent out promptly
upon allotment, and the basis of the allotment will be publicly announced.
Payment.
Payment at par and accrued interest for bonds allotted must be made on
or before Aug. 15 1933, or on later allotment. Any qualifed depositary will
be permitted to make payment by credit for bonds allotted to it for itself
and its customers up to any amount for which it shall be qualified in excess
of existing deposits, when so notified by the Federal Reserve Bank of its
District. Treasury certificates of indebtedness of Series TAG-1933, maturing Aug. 15 1933, will be accpeted at par in payment for any bonds which
shall be subscribed for an allotted, with an adjustment of the interest
accrued, if any, on the bonds so paid for. Treasury certificates of indebtedness of Series TS-1933, maturing Sept. 15 1933 (with coupon dated Sept. 15
1933, attached), will be accepted at par in payment for any bonds which
shall be subscribed for and allotted, with an adjustment of accrued interest
as of Aug. 15 1933. Applications, unless made by an incorporated bank or
trust company, or by a responsible and recognized dealer in Government
securities, must be accompanied by payment in full or by payment of 10%
of the amount of bonds applied for. The forfeiture of the 10% payment
may be declared by the Secretary of the Treasury if payment in full is
not completed on the prescribed date in the case of subscriptions allotted.
General Provisions.
As fiscal agents of the United States, Federal Reserve banks are authorized and requested to receive subscriptions and to make allotments on
the basis and up to the amounts indicated by the Secretary of the Treasury
to the Federal Reserve banks of the respective districts. After allotment
and upon payment Federal Reserve banks may issue interim receipts
pending delivery of the definitive bonds.
Any further information which may be desired as to the issue of Treasury
bonds under the provisions of this circular may be obtained upoon application to a Federal Reserve Bank or branch, or to the Treasury Department,
Washington. The Secretary of the Treasury may at any time, or from
time to time, prescribe supplemental or amendatory rules and regulations
governing the offering.
DEAN ACHESON, Acting Secretary of Treasury
Treasury Department,
Office of the Secretary,
July 31 1933.
Department Circuler No. 490 (Public Debt).
UNITED STATES OF.AMERICA.
Treasury Notes.
%, Series B-1935. Due Aug. 1 1935, Dated and Bearing Interest from.
Aug. 15 1933
The Secretary of the Treasury offers for subscription, at par and accrued
interest, through the Federal Reserve banks, under the authority of thern
Act approved Sept. 24 1917, as amended. Treasury notes of series B-1935.
The amount of the offering is $350,000,000, or thereabouts.
Description of Notes.
The notes will be dated Aug. 15 1933, and will bear interest from that
date at the rate of 1%% per annum, payable on a semi-annual basis on
•
Feb. 1 and Aug. 1 in each year.
They will mature Aug. 1 1935 and will not be subject to call for redemption prior to maturity.
Bearer notes with interest coupons attached will be issued in denominations of $100, $500, $1,000, $5,000, $10.000 and $100,000. The notes
will not be issued in registered form.
The notes shall be exempt, both as to principal and interest, from all
taxation (except estate or inheritance taxes) now or hereafter imposed by
the United States, any State, or any of the possessions of the United States,
or by any local taxing authority.
The notes will not be acceptable in payment of taxes.
The notes will be acceptable to secure deposits of public moneys, but
will not bear the circulation privilege.
Application and Allotment.
Applications will be received at the Federal Reserve banks and branches
and at the Treasury Department, Washington. Banking institutions generally will handle applications for subscribers, but only the Federal Reserve
banks and the Treasury Department are authorized to act as official
agencies. Banking institutions which have been licensed to resume their
normal banking functions are permitted to handle subscriptions in the
usual manner. Unlicensed banking institutions are authorized to accept
applications for subscribers and to hold in segregated accounts funds tendered in payment pending transmittal to a Federal Reserve bank or branch.
Cash subscriptions for amounts up to and including $10,000 will be
allotted in full Subscriptions for which payment is to be tendered in
Treasury certificates of indebtedness of series TAG-1933. maturing Aug. 15
1933, will be given preferred allotment. All cash subscriptions for amounts
over $10,000 will be allotted on an equal percentage basis.
The Secretary of the Treasury reserves the right to reject any subscription, in whole or in part, and to allot less than the amount of notes applied_
966
Financial Chronicle
Except for one bid of $50,000 at 99.940, the accepted bids ranged in
price from 99.925, equivalent to a rate of about 0.30% per annum, to
99.909, equivalent to a rate of 0.36% rer annum,on a bank discount basis.
Only part of the amount bid for at the latter price was accepted.
The average price of Treasury bills to be issued is 99.913 and the average
rate Is about 0.35% a year on a bank discount basis.
Payment.
Payment at par and accrued interest for notes allotted must be madc
on or before Aug. 15 1933 or on later allotment. Any qualified depositary
will be permitted to make payment by credit for notes allotted to it for
Itself and its customers up to any amount for which it shall be qualified in
excess of existing deposits, when so notified by the Federal Reserve bank
of its district. Treasury certificates of indebtedness of series TAG-1933.
maturing Aug. 15 1933. will be accepted at par in payment for any notes
which shall be subscribed for and allotted, with an adjustment of the inApplications, unless made
terest accrued, if any, on the notes so paid for
by an incorporated bank or trust company, or by a responsible and recognized dealer in Government securities, must be accompanied by payment
In full or by payment of 10% of the amount of notes applied for. The
forfeiture of the 10% payment may be declared by the Secretary of the
Treasury if payment in full is not completed on the prescribed date in the
case of subscriptions allotted.
Jesse H. Jones of Reconstruction Finance Corporation
Calls on Banks to Do Their Share Toward Success
of Administration's Recovery Program — More
Credit Needed to Carry Cotton, Wheat, Corn, &c.
Billion or More Through Preferred Bank Stock
Purchase by Finance Corporation Proposed in
Extension of Credit — Program Endorsed by
President Roosevelt.
Declaring that "banks and bankers must do their full
share if the recovery program is to succeed," Jesse H.Jones,
Chairman of the Reconstruction Finance Corporation,
stated on Aug. 1 that "to get business back to a normal,
even keel" requires capital, and requires credit. Mr. Jones
observed that "it will require a great deal more credit to
carry and handle 10-cent cotton than 5-cent cotton;$1 wheat
than 40-cent wheat; 60-cent corn than 15-cent corn, and so
on, if these prices continue." "Banks must exert themselves to meet the situation," said Mr. Jones, "by lending
on sound local 'values, not recklessly, but based upon a
going country instead of a busted one." He went on to say
that banks "must be put in a position where they can provide credit without endangering their own position, or that
of their depositors." Mr. Jones added:
General Provisions.
As fiscal agents of the United States, Federal Reserve banks are authorized and requested to receive subscriptions and to make allotments on the
basis and up to the amounts indicated by the Secretary of the Treasury to
the Federal Reserve banks of the respective districts. After allotment
and upon payment Federal Reserve banks may issue interim receipts pending delivery of the definitive notes.
DEAN ACHESON, Acting Secretary of the Treasury.
Treasury Department, Office of the Secretary. July 31 1933.
Department Circular No. 491 (Public Debt).
New Offering of 91-Day Treasury Bills to Amount of
$75,000,000 or Thereabouts—To Be Dated Aug. 9.
On Aug. 2 Dean G. Acheson, Acting Secretary of the
Treasury, announced a new offering of $75,000,000 or thereabouts of 91-day Treasury .bills, tenders for which are to be
received at the Federal Reserve Banks, or the branches thereof, up to 2 p. m., Eastern standard time, Monday, Aug. 7.
The Acting Secretary said that tenders will not be received
at the Treasury Department, Washington. The bills will
be dated Aug. 9 and will mature Nov. 8 1933, and on the
maturity date the face amount will be payable without
interest. They will be sold on a discount basis to the highest
bidders and will be used to retire an issue of $75,067,000
maturing on Aug. 9. Mr. Acheson's announcement follows
in part:
•
Aug. 5 1933
for and to close the books as to any or all subscriptions at any time without
notice; the Secretary of the Treasury also reserves the right to make allotment in full upon applications for smaller amounts, to make reduced allotments upon, or to reject, applications for larger amounts, and to make
classified allotments and allotments upon a graduated scale: and his action
in these respects shall be final. Allotment notices will be sent out promptly
upon allotment, and the basis of the allotment will be publicly announced.
They will be issued in bearer form only, and in amounts or denominations
of $1,000. $10.000. $100.000, $500,000. and $1,000.000 (maturity value).
No tender for an amount less than $1,000 will be considered. Each
tender must be in multiples of $1,000. The price offered must be expressed
on the basis of 100, with not more than three decimal places, e. g., 99.125.
Fractions must not be used.
Tenders will be accepted without cash deposit from incorporated banks
and trust companies and from responsible and recognized dealers in investment securities. Tenders from others must be accompanied by a deposit
of 10% of the face amount of Treasury bills applied for, unless the tenders
are accompanied by an express guaranty of payment by an Incorporated
bank or trust company.
Immediately after the closing hour for receipt of tenders on August 7 1933,
all tenders received at the Federal Reserve Banks or branches thereof up to
the closing hour will be opened and public announcement of the acceptable
prices will follow as soon as possible thereafter, probably on the following
morning. The Secretary of the Treasury expressly reserves the right to
reject any or all tenders or parts of tenders. and to allot less than the amount
applied for, and his action in any such respect shall be final. These submitting tenders will be advised of the acceptance or rejection thereof. Payment
at the price offered for Treasury bills allotted must be made at the Federal
Reserve Banks in cash or other immediately available funds on Aug.9 1933.
The Treasury bills will be exempt, as to principal and interest, and any
gain from the sale or other disposition thereof will also be exempt,from all
taxation, except estate and inheritance taxes. No loss from the sale or
other disposition of the Treasury bills shall be allowed as a deduction, or
otherwise recognized, for the purposes of any tax now or hereafter imposed
by the United States or any of its possessions.
$60,096,000 Accepted to Offering of $60,000,000 or
Thereabouts of 91-Day Treasury Bills Dated
Aug. 2—Bids of $201,409,000 Received—Average
Rate 0.35%.
Tenders totaling $201,409,000 were received to the offering
of $60,000,000 or thereabouts of 91-day Treasury bills dated
Aug. 2, Dean G. Acheson, Acting Secretary of the Treasury,
announced on July 31. Of the tenders received, the announcement said, $60,096,000 were accepted at an average rate on a
bank discount basis of 0.35%, which compares with previous
rates of 0.37% (bills dated July 26); 0.39% (bills dated July
19) and 0.36% (bills dated July 12). The aveiage price of
the. bills to be issued is 99.913. Tenders to the offering,
which were invited by Mr. Acheson on July 26 as noted in
our issue of July 29, page 783, were received at the Federal
Reserve Banks, or the branches thereof, up to 2 p. m.,
Eastern standard time, July-81. Acting Secretary Acheson's
announcement follows as contained in advices from Washington, July 31, to the New York "Times" of Aug. 1:
Dean G. Acheson, Acting Secretary of the Treasury, announced to-night
(July 31) that subscriptions for the offering of $60,000,000 in 91-day bills,
dated Aug. 2, amounted to $201.409,000, of which $60,096,000 was
accepted.
And with this in view the United States Government, through the
Reconstruction Finance Corporation, is prepared to buy preferred stock
In sound banks, State and National, to any reasonable extent, based
upon good business judgment and the use to which the institution can put
the capital. . . .
Any bank that has functioned as a bank should function has made
;osses and accumulated some slow and frozen assets, and this without the
slightest criticism of the bank management. To absorb the losses, most
of the banks have reduced their surplus and reserve accounts, and some
their capital stock.
The Government is now willing further to repair these leases and, In
effect, to carry the slow assets by the purchase of preferred stock in sound
banks on a very favorable basis.
A billion dollars, or even a half billion dollars of added capital to the
banks of the country can be multiplied many times in the extension of
credit. Ample bank capital will not only straighten the banks and make
it possible for them to respond to the credit needs of the country, but It
will strengthen the morale of the bankers, and both are necessary if we
are to conduct our banks in harmony with the recovery program.
Mr. Jones' remarks, presented under the title "The
Bankers' Part in the Recovery Program," were broadcast
on Aug. 1 on the National Forum under the auspices of
the Washington "Star." Mr. Jones, following the delivery
of his address, read the following letter from President
Roosevelt commending his plan:
Honorable Jesse H. Jones, Chairman, Reconstruction Finance Corporation,
Washington, D. C.:
Dear Chairman.-1 have just finished reading your address to be delivered on the National hook-up, Aug. 1, and heartily endorse all that
you have to say about the need for credit, and about co-operation in the
general scheme of "everybody back to work."
1 congratulate the many bankers who have safely steered their institutions through the troubles of the past four years, but credit must be
made available to all classes of our citizens if business is to be re-established
on a permanent, workable basis.
Your plan to provide the banks with new and added capital, by the
purchase of preferred stock on such fair terms as those outlined, will enable
them to extend this credit without fear of their own positiors.
It is also interesting to know—as the bankers will appreciate—that
this can be done with no added tax burden, and at no cost to the public
treasury.
Sincerely yours,
FRANKLIN D. ROOSEVELT.
Mr. Jones' address follows:
The world is as much startled as it is encouraged by the recovery in
commodity values and other values that the President has brought about
in the short period of four months.
The world is equally surprised at the extent to which these increased
values have been reflected in Improved conditions—improved business
and improved morale.
We are living in a new world. and I pause to wonder how many of us
had any sort of conception as to what the President meant by his "New
Deal." And I also wonder how many of us had any real faith in his ability
to bring us so 'quickly out of the depths of despair into which we had descended.
In great measure what has been accomplished up to now is the result
of confidence in the President and confidence in the stability of our country
and our Government. More, it is the accepted belief that the President
is determined to keep on cranking the engine until it goes.
Now—the President can furnish the leadership. He can provide the
means and the facilities. But it is up to the rest of us—to you and to
me—to carry on, to follow his leadership with faith, to put every ounce
of energy that we can command, into the task, to do—each of us—to the
best of our abilities, whatever our part of the job may be, whether on
the farm, in the factory, in the store, in the bank, or In the ranks of labor,
Holding back, waiting to see if it is really true, will be equivalent to
applying the brakes while at the same time giving gas to the engine.
Obviously this is not co-operation. The President's program will be
much quicker of accomplishment if all take a hand and help in the scheme
of "everybody back to work." Indeed, It is the patriotic duty, as I am
sure it will be the pleasure, of every citizen to co-operate to the fullest
Possible extent in carrying out the plans and programs initiated by the
President.
Volume 137
Financial Chronicle
Many leaders in business and industry, in banking, and perhaps in
labor, will probably feel that the program outlined for their particular
business or sphere in the general scheme, will be unworkable, or not as
they would design it. But we must all recognize that there is but one
leader—the President of the United States—and that failure to follow
his course and to co-operate with his program will be exactly like the
failure or refusal of a soldier In time of war, to obey his commanding officer.
No perfect plan for adjusting every branch of business can be promulgated
In a few weeks' time, but by willing co-operation, whatever plans are
put into effect can be r‘.arranged and refined if experience proves the
necessity for correction.
With four years of disastrous business results. of "economic hell," as
the President himself termed it in his radio address of July 24, without
centralized, constructive leadership, such as we are now so fortunate to
have, all business, all industry, all banking, and all labor, organized and
unorganized, should accept with good grace and without hesitation, the
plans, the suggestions and the leadership that l'resident Roosevelt Is
furnishing. This applies to big and small alike, to business of all kinds—
agriculture, railroads, public utilities, distributors, merchants, banks,
and in fact to every phase of our economic life.
It requires a willingness to compose one's views with the views of others,
to take one's place In the general scheme of our National life, to accept
leadership, and to assume an ordinary business risk.
To halt and to wait will not help.
Now to do all of this, and to get business back to a normal even keel,
especially requires capital—Invested capital and working capital. And
It requires credit—available credit and credit to be extended In a normal
way and on normal values.
This is where banks and bankers must do their full share if the recovery
program is to succeed. National banks, State banks, investment banks,
and the Federal Reserve banking system, all have a responsible share,
and none should hold back.
It will require a great deal more credit to carry and handle 10-cent cotton
than 5-cent cotton; $1 wheat than 40-cent wheat: 60-cent corn than I5-cent
corn: and so on, if these prices continue to increase.
The manufacturer, the processor, the merchant, the employer, must
all have additional capital and additional credit if they are to be able
to carry on in the recovery program. Permanent capital can be provided by the investment banker as soon as we have a return of confidence
by the investing public. In the meantime, banks must exert themselves
to meet the situation by lending on sound local values, not recklessly,
but based upon a going country instead of a busted one.
Our banks and bankers must have confidence and they must he put in
a position where they can provide credit without endangering their own
positions or that of their depositors.
And with this in view, the United States Government, through the
Reconstruction Finance Corporation, is prepared to buy preferred stock
In sound banks, State and National, to any reasonable extent, based
upon good business judgment and the use to which the Institution can
put the capital.
The amount of now capital that may be provided in this way will not,
In itself, be largo compared to the credit requirements of the country,
but by strengthening and increasing the capital structure of banks they
can take the ordinary business risk in extending credit consistent with
their capital and deposit positions.
Any bank that has functioned as a bank should function has made losses
and accumulated some slow and frozen assets, and this without the slightest
criticism of the batik.
To absorb the losses most of the banks have reduced their surplus and
reserve accounts, and some, their capital stock.
The Government is now willing further to repair these losses and to
carry the slow assets by the purchase of preferred stock in sound banks
on a vary favorable basis.
A billion dollars. or oven a half billion dollars. of added capital to the banks
of the country can be multiplied many times in the extension of credit.
Ample bank capital will not only strengthen the banks and make It possible
for them to respond to the credit needs of the country, but it will strengthen
the morale of the bankers, and both are necessary if we are to conduct
our banks In harmony with the recovery program.
Credit is the blood stream of all business, and banking is the heart.
Business must be financed by bank deposits. and banks that accept deposits and do not extend credit in a reasonable way will not contribute
to the general economic welfare nor to business recovery.
There can be no setstaln•A prosperity, no return to normal conditions,
without actual, available bank credit for all legitimate needful purposes—
for agriculture, business, and Industry of all kinds—from the smallest
borrower to the largest—in the hamlet as well as in the big centers.
It is well known that recovery In agriculture and a living price for the
products of tho American farmer are uppermost In the President's mind.
He has said on many occasions that this nation cannot hope for lasting
prosperity until agriculture is put on a living basis.
In the short period of four months he has revolutionized the price of
practically all farm products, and In an effort to help in this direction
the Reconstruction Finance Corporation has recently sent to its 32 loan
agencies throughout the country bulletins expressing its readiness to make
loans in substantial volumes: (a) For the carrying and orderly marketing
of agricultural commodities and livestock; (b) for making loans to farmers
and stockmen to enable them to carry and market their crops and livestock. and (c) for purchasing agricultural commodities and livestock
directly from the farmer.
Such loans, together with those to be made by the Farm Credit Administration, the Regional Agricultural Credit Corporations and the
activities of the Department of Agriculture, bring to the American farmer
complete banking facilities.
In looking over the bank statements of Juno 30, especially those of the
larger banks, it Is clear that there Is no shortage of ready money or of
bank liquidity.
The coffers of the big banks are filled with Government securities, cash
balances In the Federal Reserve, and otherwise, which indicates that
they are still waiting to sec if the things which people own and have to
offer as security for loans have any real value as a basis of credit.
A banker may argue that he has no applications for loans that he can
afford to make, but that same banker is probably continuing the policy
of converting his loans Into cash or Government securities. This policy
of forced liquidation should cease, and borrowers not only given time
to work out their problems but encouraged to take an active part In the
recovery program.
No one blames a banker for wanting to be able to pay his depositors
upon demand, and I am not finding fault, but merely calling attention
to the fact that if banks are to be run on such a liquid basis as to he able
to pay their depositors on demand there will be no credit for business—
and that simply stops the works.
The Congress passed a law in the summer of 1932 authorizing the Reconstruction Finance Corporation to make loans to any individual or
corporation and for any purpose. The Act was passed because of dried-up
967
bank credit. It never became a law because President Hoover vetoed
the Act, but Congress wanted the people who needed credit to have credit.
To encourage banks to put themselves in stronger positions by increasing
their capital so that they can assist in the general program of recovery
by lending and functioning as banks should function in normal times,
the directors of the Reconstruction Finance Corporation, with the full
approval of the President and the Secretary of the Treasury, are prepared
to match capital dollars with any sound bank_that can use additional
capital to advantage.
The Corporation will do this by buying preferredstock, to pay 5%
cumulative dividends, payable semi-annually out of net earnings. If
dividends are not earned they will accumulate, but not be payable except
from net earnings.
The stock may be retired at will by the bank and at all events it must
be retired out of 40% of the net earnings of the bank after payment pf the
preferred dividends and after setting up all necessary reserves to comply
with the banking laws, and to provide reasonably for losses, depreciations, &c.
It is not required, however, of any bank that more than 5% of its preferred stock be retired in any one year, and no stock must be retired
except frotn net earnings available for that purpose beginning two years
from date of issuance.
The National banking laws provide that the preferred stock may be
converted into common stock. This will enable the bank that wishes
to do so to convert its preferred stock into common stock from time to
time by selling it to its own stockholders or others than the Government.
This may be done, all or in part. at any time.
Where the law does not allow State banks to issue preferred stock the
Reconstruction Finance Corporation will buy 5%, 10-year. capital notes,
which take the place of preferred stock, and to be retired in the same
manner as preferred stock is retired.
The plan for retirement, as adopted by the directors, together with the
low dividend rate provided, should make it possible for practically all
of the preferred stock which may be sold to the Reconstruction Finance
Corporation to be fully amortized in approximately 20 years, and without
depriving the stockholders of dividends on their common stock in the
meantime.
This can be done without increasing the tax burden. The Government
will be co-partner ulth the banks with a limited return of 5%, which Is
well above the cost of money to the Government, but an attractive rate
to banks that can use added capital.
I have talked to the managing officers of some of the larger banks, as
well as the smaller ones, and find In many instances that they would be
glad to increase their capital through the issuance of preferred stock to
be sold to the Reconstruction Finance Corporation, but that they are afraid
their neighbors and competitors would gossip about them to the effect
that their banks were in a weakened condition and that they had to appeal
to the Government for help.
This is a very poor excuse, based largely on false pride or unwarranted
fear. Most banks have ample capital to get along, but the Government
wants them to do a job and wants to make it safe and easy for them to
do it.
As a matter of fact, for the Government to be willing to buy stock in
a bank and advertise to the world that it is a partner in that bank is the
greatest compliment and source of strength that could come to any bank.
And as for the critical neighbor, he is not entitled to a decent place In
society.
There are not really a great many of these gossipy gentlemen In the
country, but entirely too many at that, and while you might feel like
choking your favorite neighbor of this character, that is still against the
law, if you choke too hard.
It has been demonstrated In several Instances that the purchase of
preferred stock In a bank by the Reconstruction Finance Corporation—
and, by the way, this Is only done after a thorough examination of the
bank—has Immediately dispelled all fear or concern on the part of the
depositors and open bank runs have been stopped.
It is also noteworthy to say that in no instance where the Reconstruction
Finance Corporation has taken preferred stock In a bank has there been
the slightest disposition on the part of the depositors to withdraw their
funds.
In the same manner as with banks, and to the extent of $50.000.000,
the Reconstruction Finance Corporation is authorized to match capital
dollars with insurance companies by buying or lending on preferred stock.
That our country is inherently sound and recovery well under way Is
evidenced by the fact that repaynaelits to the Reconstruction Finance
Corporation have been $710,000.000. and no borrower has ever been asked
to pay a note. Extensions are freely granted, and the entire spirit of the
Corporation Is one of helpfulness to Its borrowers.
Statement by Francis H. Sisson Relative to Approval
by 14,000 Banks, Members of American Bankers'
Association of Basic Code for Bankers—Represents
Slightly Modified Form of President Roosevelt's
Blanket Code-40-hour Week to Be Observed.
It was made known on Aug. 2, that the American Bankers'
Association, comprising 14,000 banks with hundreds of thousands of employees throughout the United States, joined
the Industrial Recovery Drive under a modified Presidential
re-employment agreement authorized by Gen. Hugh S.
Johnson, Recovery Administrator. Washington advices
Aug. 2 to the New York "Journal of Commerce" noting this
added:
Under the bankers' code, employees of banks—States. National and
savings—mutual and stock banks, trust companies and investment banking
houses, will receive minimum wages of from $12 a week in towns of less
than 2,500 population to $15 a week in cities of over 500,000 for a 40-hour
week.
With regard to the approval of a basic code for bankers,
Francis H. Sisson, Vice-President of the Guaranty Trust Co.,
New York, and President of the American Bankers' Association, had the following to say:
Negotiation by representatives of the American Bankers' Association
of a slightly modified form of the President's Blanket Code. making It
more applicable to practical working conditions existing in the highly
specialized field of banking, has resulted in a type of agreement which it is
believed will command the support of bankers throughout the Nation.
Adherence to this agreement will bring the banking business fully in line
with the purposes of the NRA plan.
968
Financial Chronicle
While the Association has not the power to bind its individual members
to this agreement, communications addressed to the Association by its
members from all parts of the country as well as action by thousnads of
bankers individually and in local groups indicate its general acceptance.
The negotiations in behalf of the Association were carried on under the
constitutional authority of its Administrative Committee, which voted
approval of the signing by the members of the Association of the voluntary
agreement in conformity with President Roosevelt's appeal. Several
members suggested the advisability of modification of some of the terms •
of the agreement, and our representatives were able to obtain approval
of some of these suggested changes.
The discussions at Washington were conducted for the Association under
the direction of the Administrative Committee by Robert V. Fleming,
President of the Riggs National Bank, Washington, D. C., and Chairman
of the Association's Committee on Federal Legislation, P. D. Houston,
Chairman of the Board, American National Bank, Nashville, Tenn., and
Treasurer of the Association,and by 0. Howard Wolfe, Cashier of the Philadelphia National Bank, Philadelphia, Pa., in a number of conferences with
Gen. Thigh S. Johnson, National Recovery Administrator, and with the
assistance of Governor Eugene R. Black of the Federal Reserve Board.
The Association is deeply indebted for the helpful and constructive services
which these gentlemen extended to its representatives.
The Administrative Committee of the American Bankers' Association
has also authorized me,as President of the Association, to file with President
Roosevelt a declaration of the Association's intention to formulate a code of
fair competition under the NRA and to appoint a Committee to give consideration to formulating a code, to be presented for approval at the coming
National Convention of the Association to be held in Chicago Sept. 4 to 7.
In respect to the agreement just negotiated at Washington,
the Association has dispatched to all of its membership the
following communication, Mr. Sisson announced:
Under the terms of the NIRA, the President of the United States is
urging every employer in the country to sign a voluntary agreement covering
minimum wages and maximum hours as a part of his Nation-wide plan to
raise wages and create employment.
This voluntary agreement has been made to includebanking,specifically.
Your Atministrative Committee believes that in view of the purpose
sought to be served by the Administration, the banks of the country should
co-operate to the best of their ability to secure united action in this effort
to restore confidence and prosperity.
Under the authority vested in your Administrative Committee, we have
submitted a basic code to the NRA. Under paragraph 13 of the President's Re-employment Agreement, General Johnson, the National Recovery
Administrator, has approved the substitution of Section 2 of this basic
code for Sections 2 and 4 of the President's Re-employment Agreement.
We are enclosing with this bulletin a copy of the basic code as approved.
A message to the bankers of the United States from NRA will appear in
the press setting forth the consent of NRA to the above substitution.
Your Committee therefore recommends to all members of the Association
that they take the following steps:
1. Sign and mail the President's Re-employment Agreement which has
been delivered to you through the Post Office Department.
2. Sign your Certificate of Compliance adding thereto the following
clause:
"To the extent of NRA consent, as announced we have compiled with
the President's Agreement by complying with the substituted provisions
of the code submitted for the Bankers of the United States."
This Certificate of Compliance is then to be taken to your-yostmaster
who, upon receipt thereof, will deliver to you your emblem.
You will observe that under the terms of the agreement the American
Bankers' Association may file withe NRA a modified code which, upon
approval by the President of the United States, will supersede this amended
agreement. Modification, if any, of this code will be submitted to the
membership of our Association at its forthcoming convention to be held in
Chicago Sept 4 to 7 1933.
After signing the President's Re-employment Agreement, you should
Immediately place in force the provisions thereof as amended.
AMERICAN BANRERS'ASSOCIATION,
By the Administrative Committee.
This communication bore the names of the Committee
as follows:
Francis H. Sisson, Vice-President Guaranty Trust Co., New York,
Chairman.
L. A. Andrew, Vice-President, First Bank & Trust Co., Ottumwa, Iowa.
J. Stewart Banker, Chairman of Board, Bank of the Manhattan Co., N. Y.
Heyward E. Boyce, President, Maryland Trust Co., Baltimore, Md.
J. R. Cain Jr., Vice-President, Omaha National Bank, Omaha, Neb.
Wall G. Coapman, Secretary, Wisconsin Bankers' Association, Milwaukee, Wis.
Gilbert L. Duane, President, Grand Rapids Savings Bank, Grand
Rapids, Mich.
Harry J. Haas, Vice-President, First National Bank, Philadelphia, Pa.
' Frank N. Hall, Comptroller, Federal Reserve Bank, St. Louis, Mo.
Robert M. Hanes, President, Wachovia Bank & Trust Co., WinstonSalem, N. C.
Rudolf S. Hecht, Chairman of Board, Hibernia National Bank, New
Orleans, La.
P. D. Houston, Chairman of Board, American National Bank, Nashville, Tenn.
Francis M. Law, President, First National Bank, Houston, Texas.
R. M. Sims, Vice-President, American Trust Co., San Francisco, Calif.
Walter Tufts, President, Worcester County National Bank, Worcester,
Mass.
- The following is the code of fair competition of the bankers
of the United States:
The declared purpose of this code is to effectuate the policy of Title I
of the NIRA during the period of emergency.
•
Definition.
The American Bankers Association affirms that it imposes no inequitable
restrictions on its membership and participation in its activities, and it is
truly representative as a National association consisting of National, State,
savings, mutual and stock banks, trust companies and investment bankers.
1. Labor Provisions.
As required by Section 7 (a) of Title I of the NIRA, the following provisions are conditions of this code:
1. Employees shall have the right to organize and bargain collectively
through representatives of their own choosing, and shall be free from the
Interference, restraint or coercion of employers of labor, or their agents.
in the designation of such representatives or in self-organizaiton or in other
Aug. 5 1933
concerted activities for the purpose of collective bargaining or other mutual
aid or protection.
2. No employee and no one seeking employment shall be required as a
condition of employment to join any company union or to refrain from
joining, organizing, or assisting a labor organization of his own choosing: and
3. Employers shall comply with the maximum hours of labor, minimum
rates of pay, and other conditions of employment, approved or prescribed
by the President.
2. Child Labor.
After Aug 311933, no person under 16 years of age shall be employed,
except that persons between 14 and 16 years of age may be employed, for
not to exceed 3 hours per day and those hours between 7 a. m.and 7 p. m.
In such work as will not interfere with hours of day school.
,
3. Hours of Employment.
(a) No banking employee shall work in any bank for more than 40 hours
in any one week on an average of a 5-week period (such average being necessary owing to the periodic settlements, payments or emergencies in serving
the public, over all of which the bank has no control). The hours of any
banking operations shall not be reduced below the hours now obtaining in
each individual bank.
(b) This provision for working hours shall not apply to guards and watchmen employed to safeguard the assets of the bank who cannot be shifted or
changed during the night period.
(c) The maximum hours fixed in the foregoing paragraphs shall not apply
to employees in banking establishments employing less than two persons
In towns of less than 2,500 population, which towns are not part of a larger
trade area: nor to employees in a managerial or executive capacity or in
any other capacity of distinction or sole responsibility who now receive
more than $35 per week. Population for the purposes of this agreement
shall be determined by reference to the 1930 Federal census.
4. Wages.
No employee shall be paid:
(a) Less than $15 per week in any city of over 500,000 population, or in
the immediate trade area of such city.
(b) Less than $14.50 per week in any city between 250,000 and 500,000
population, or in the immediate trade area of such city.
(c) Less than $14 per week in any city between 2,500 and 250,000 population or in the immediate trade area of such city, and
(d) In towns of less than 2.500 population all wages shall be increased by
not less than 20% provided that this shall not require wages in excess of $12.
5. Administration.
Such of the provisions of this code as are not required to be included therein by the NIRA may, with the approval of the President, be modified or
eliminated as change.; in circumstances or experience may indicate.
This code shall become effective when approved.
New York Banks Well Supplied With Funds, Report
No Need to Sell Stock to Reconstruction Finance
Corporation.
New York banks will not need to avail themselves of the
offer of the Reconstruction Finance Corporation, issued by
its Chairman, Jesse H. Jones, to buy preferred stock of
banks. The New York "Times" of Aug. 3 in stating this
added:
While conceding that perhaps some hard-pressed banks in other sections
of the country might be helped by the sale of preferred stock to the Reconstruction Finance Corporation, most bankers here do not think that money
which costs 5% would be much help to banks in the present period of low
money rates. It was pointed out that, although member banks of the
Federal Reserve could borrow funds from the system at rates of from 2X
to 3%%, such borrowings were now at the lowest level in the history of
the system—$161,000,000.
There is no shortage of credit, according to bankers—only a shortage of
borrowers whose credit is good.
As for the tendency of bankers to maintain a highly liquid condition,
with large supplies of cash on hand and heavy holdings of government
securities and other assets eligible for rediscount at the Federal Reserve
Banks, this, the bankers say, is due to the unstabilized dollar, which makes
banks fear large withdrawals of deposits at any time by persons fearing
to lose by devaluation of the currency.
New York Clearing House Banks Vote to Sign Code
For Banks Prepared Under NRA—Pledge Cooperation—Eleven New York Banks In Letter to
General Johnson Indicate "Sympathetic Consideration"—Will Be Granted Loan Applications
Incident to Re-employment Project.
On Aug. 3 representatives of the barks in the New York
Clearing House Association unanimously agreed to sign the
temporary Code for banks prepared by General Hugh S.
Johnson, and to co-operate under the National Recovery
Act. The temporary code governing hours and wages in
banking institutions was submitted to General Johnson,
Recovery Administrator, by the American Banking Association on Aug. 2, and the Association was authorized by
the NRA to substitute these provisions for the President's
blanket agreement. Reference elsewhere is made in these
columns to-day to the statement made by Francis H. Sisson,
President of the American Bankers' Association regarding
the latter's approval of a basic code for bankers. In the
New York "Times" of Aug. 4 it was stated:
It is expected that the Clearing House banks will promptly put into
execution their resolution by forwarding to Washington signed copies of
the code. One of them, the Bank of the Manhattan Company, announced
last night that it had already done so. Another, the Corn Exchange Bank
Trust Company, had previously signed the Pesident's blanket code with
the understanding that when a general code for banks was prepared it would
adopt that.
Bankers here held that the new code would involve little difficulty or
them. In fact several of them said that it would mean almost no change
at all and that very few new employees would have to be taken on. The
question of salaries hardly arises at all, since most of the banks have no
Volume 137
Financial Chr,fnicle
employees receiving less than $15 a week,and in the exceptions only one or
two young messengers would be involved, the increases necessitated by the
code being in no case more than a dollar or so a week.
The two questions that had troubled the banks in preparing for a code
were the difficulties of adapting their working time to a 40-hour week
without provision for averaging these hours over a longer period of time
and the problem of fitting the hours of bank guards into a 40-hour week on
any basis. Both of these matters were taken care of by the code as drawn
up. The bankers are allowed to average their 40-hour week over a fiveweeks' period, which means that if their employees have to work long hours
early in the month, or after a holiday or weekend, they can be released
during slacker periods.
The code as drawn up provides that the maximum hours fixed do not
apply to guards and watchmen employed to safeguard the assets of the
bank and who cannot be shifted or changed during the night. As bankers
interpret this paragraph, all guards and watchmen will not come under
the restrictions of the code as to hours. The exception also made in the
case of employees receiving more than $35 a week who are "in a managerial
or executive capacity or in any other capacity of distinction or sole responsibility" will also exempt a large number of employees from the workings of
the code.
Announcement was made on July 31 that the Corn Exchange Bank Trust Co. and the Corn Exchange Safe Deposit
Co. had signed the blanket code agreement of the NIRA
and sent the same direct to Washington.
On July 27 eleven New York banks, including some of the
largest institutions in the country, formally pledged their
support to the NRA in a joint letter sent in reply to a request
by General Johnson, for an opinion as to what could be done
by the banks in the United States to assist in the President's
recovery plan. The letter from the banks said that "loans
made in connection with the industrial recovery plan may b
likened to seasonal loans. . . . Such loans should se
granted, of course, only where the credit of the borrower
justifies it and each loan must be considered on its own
merits, but all loan applications which pass this ordinary
banking requirement should, and undoubtedly will, have
sympathetic consideration from the banks." The letter was
signed by the heads of the following New York institutions:
Chase National Bank
Guaranty Trust Co.
Central Hanover Bank & Trust
Co.
First National Bank
Bank of the Manhattan Co.
New York Trust Co.
National City Bank of New York
Bankers Trust Co.
Irving Trust Co.
Chemical Bank & Trust Co.
Manufacturers Trust Co.
The letter read:
"New York, N. Y., July 27, 1933.
"General Hugh S. Johnson, Administrator, National Recovery Act,
Washington, D. C.
"Dear General Johnson:
"You have asked our opinion as to what can be done by the banks of
this country to assist in furthering the success of the President's industrial
recovery plan.
"The President's plan is designed to stimulate the growth of purchasing
power and thereby to increase the demand for goods. It is also designed
to enlarge industrial output and increase employment. These objectives
justify all the support that can be given to them by the banks.
"One of the principal functions of banks is to finance the production
and distribution of raw materials, food products and goods. Commercial
loans made for these purposes are among the most desirable loans which a
bank can make. Loans granted in one season for the manufacture of
goods to be sold in another season are of this category. Loans made in connection with the industrial recovery plan may be likened to seasonal loans.
They will be made for the financing of the production of inventory, the
liquidation of which the success of the President's plan would insure.
"Such loans should be granted, of course, only where the credit of the
borrower justifies it, and each loan must be considered on its own merits,
but all loan applications which pass this ordinary banking requirement
should, and undoubtedly will, have sympathetic consideration from the
banks. We believe that in this manner the banks can and will be of the
greatest help in assisting to a successful issue the President's industrial
recovery plan."
John A. Schoonover, of Spokane, Appointed Executive
Vice-President and General Manager of Regional
Agricultural Credit Corporation at Spokane.
John A. Schoonover, Vice-Piesident of the Old Nationa
Bank and Union Trust Co. of Spokane, Wash., since last
November, has been appointed Executive Vice-President
and General Manager of the Regional Agricultural Credit
Corporation at Spokane by Henry Morgenthau Jr., Governor
of the 'Farm Credit Administration. His appointment
became effective Aug. 1, when he succeeded R. E. Towle,
who has been recalled to his position as Managing Director
of the Helena, Mont., branch of the Federal Reserve Bank
of Minneapolis. Mr. Towle held this office from 1921 to
1932, when he became an official of the Regional Agricultural
Credit Corporation at Spokane. The Farm Credit Administration's announcement July 27 said:
Mr. Schoonover has been in the banking business in the Pacific Northwest for 15 years. Before that he was in the mercantile business. His
first bank'ng experience was at Odessa, Wash. Later he b. came associated with the Union Securities Co. and the Union Farm Land Co.,
Where he was required to inspect loans over a wide area. There he became
familiar with the financial problems of the fruit grower, livestock producers and dry land farmers.
From 1929 to 1932 Mr. Schoonover managed the First National Bank
of Sunnyside, Wash., where he became familiar with irrigation farming.
While there, he effected the merger of the Sunnyside National Bank and
the First National Bank of Sunnyside, later absorbing the Union Bank
of Granger.
969
ederal Reserve Bank of New York Signs Bank Code
—Governor Black of Federal Reserve Board Sanctions Action.
The code for banks prepared under the NRA by General
Johnson was signed on Aug. 3 by the Federal Reserve Bank
of New York.
In the New York "Journal of Commerce" of Aug. 4 it
was stated:
Most of the employees in the clerical department. It was stated, already
have working hours and wages conforming to the code, but there will be
changes for the members of the building maintenance force which includes
guards, porters, elevator men, etc.
From a Washington account Aug. 2 to the same paper
we take the following:
Reserve Board Backs lime.
Following General Johnson's approval of the agreement under which
the banks of the country are enlisting in the recovery campaign. Governor
Eugene R. Black of the Federal Reserve Board, announced the Board
santioned the action of some Reserve Banks in adopting the code.
"I am pleased at the action of the Federal Reserve banks and of the
American Bankers' Association," Governor Black said. "I have at all
times found the banks of this country ready to do their full part in any
patriotic or constructive steps taken by the Government. The action to-day
placing the American Bankers' Association squarely behind the operation
of the National Industrial Recovery Act is all the evidence the people of
this country nbed of the sincere intent of our banks to do their part in the
nation-wide program for industrial roenvery."
an of $30,000,000 Granted by Bank Syndicate to
Agricultural Adjustment Administration to Finance Purchase of Cotton From Farm Credit
Administration—Syndicate Headed by Chase National Bank and Guaranty Trust Co.
A $30,000,000 loan by a group of private bankers headed
by the Chase National Bank of New York and the Guaranty
Trust Co., has been made to the Agricultural Adjustment
Administration to finance the purchase of 1,019,814 bales
of spot cotton from the Farm Credit Administration, it was
stated in a Washington dispatch Aug. 1 to the New York
"Journal of Commerce," from which we also quote:
The loan was granted in two installments of $15,000.000 each. The first
loan of $15.000,000 will bear interest at the rate of 2% and will run for
45 days. The second loan will run for 90 days at the rate of 2%%.
Bought at Six Cents a Pound.
The cotton purchased by the Agricultural Adjustment Administration
from the Farm Credit Administration which was at the rate of 6 cents a
pound, plus certain carrying charges, is to go into the general pool for
option by farmers who signed agreements with the Secretary to reduce
this season's cotton acreage.
According to Washington advices Aug: 1 to the New
York "Times" the bank syndicate included 24 underwriting
institutions in Boston, Philadelphia and Chicago. The
"Times" dispatch also said:
Five cents a pound was paid for the old Farm Board holdings, which
had been originally acquired at 93-i cents, and to prevent a $54.000,000
loss to the Credit Administration, the Adjustment Administration paid
the remaining 4% cents from its $100,000,000 fund provided by the Industrial liecox ery Act ...
In financing through thd private syndicate the administration rejected
an offer of 570.000.000 at 4% from the R. F. C. That amount had been
previously authorized in a commitment by the corporation to the Secretary
of Agriculture, which is good for 12 months.
Private Financing a Saving.
By financing through private channels, the administration explained,
it had saved $25,000 a month on the 2% portion of the loan and $22,000
on that part carrying the 2%% rate.
It was explained that the R. F. C. had felt unable to provide its funds
at less than 4% on the ground that it was paying a rate of 33% on its
funds from the Treasury.
A spokesman for the Adjustment Administration said:
"We operate on a hard-boiled budget and if we can save money by
doing our financing in private channels, that's the way we're going to
do it."
It was reported unofficially that the Treasury had opposed the move,
feeling that the Reconstruction Corporation should continue to be the
fiscal agent for all Federal credit agencies. There is no provision in the
Agricultural Adjustment Act authorizing the Adjustment Administration
to borrow from the Treasury to finance its program.
Oscar Johnson, Finance Director for the adjustment organization, said
it is incorrect to regard the privately handled loan as representing a loss
to the Government to the extent of the interest payment involved.
It had been suggested that by financing through the Reconstruction
Corporation the full amount of the interest on the loan would have been
returned eventually to the Federal Treasury, while there would be no
such return under the method utilized.
Cotton to Make Repayment.
Mr. Johnson's version of the transaction was that neither the loan
nor the interest on it would be repaid by the Government, but that repayment would be taken out of the cotton on which options had been
taken. The Secretary of Agriculture is authorized under the Adjustment
Act to sell the option cotton to contracting farmers at 6 cents a pound,
with provision that he may sell the optioned supplies on the open market
for the farmer.
Under the latter method, the farmer would be paid the difference betvfeen the prevailing market and the value of his option, or the amount
received on the open market, minus 6 cents a pound.
Any additional amount needed to repay the $30.000,000 loan would be
taken from the $100,000,000 fund provided in the Industrial Recovery
Act.
An item bearing on the $70,000,000 credit authorized by
the R. F. C. appeared in our issue of July 1, page 59.
970
Financial Chronicle
19,800 Bales of Futures Cotton Bought for Account
of Secretary of Agriculture Wallace After Liquidating Loans—To Offset United States Sales.
Purchase of futures contracts for 19,800 bales of cotton
offset
for the account of the Secretary of Agriculture to
as colsales in the open market of cotton heretofore held
lateral for Government crop and seed loans, was reported
Farm
on Aug. 3 by Gov. Henry Morgenthau, Jr., of the
advices
n
Washingto
this,
Stating
tion.
Administra
Credit
,"
on that date to the New York "Journal of Commerce
went on to say:
cotton held as
According to Mr. Morgenthau. of 872.000 bales of stored
sold by permission
collateral for such loans. about 75.000 bales have been
of farmer borrowers, or released for sale.
acquiring title to cotton
The transactions are a part of the process of
so that the Secretary of
against which Government agencies held claims,
acreage reduction
Agriculture may fulfill cotton option contracts in the
program
•
400,000 Farmers Affected.
usually of one to three
Since July 19. 400.000 farmers whose cotton in lots
loans have been peror four bales has been held as security for Government
credit for it at the marmitted to release it for sale by agreeing to accept
cotton marketing assoket price on the day they release it. Co-operative
the cotton planter all
ciations. which control by marketing agreements with
cotton. have been acting as
but 160.000 of the 872.000 bales of seed loan
farmers.
agents of the Government in dealing with the
to-day, "have from the
"Seed loan transactions." said Mr. Morgenthau
disturbance of the
possible
start been handled in such way as to avoid any
made have been in small
market. Such sales of spot cotton as have been
been no great rush of the
lots as market conditions warranted. There has
releases, or fiNations. which
farmers to release their cotton for sale. Daily
at the rate of 10,000 to
Is the trade name for them, are now being made
15,000 bales."
1.583.974 Bales Delivered.
delivered to the DepartThe Farm Credit Administration has already
and futures upon which
ment of Agriculture 1.583.974 bales of spot cotton
to the Cotton Coadvances had been made by the Federal Farm Board
operatives and the Cotton Stabilization Corp,
es
Agricultural Adjustment Administration Establish
System for Handling Option Cotton.
producers
A system for marketing cotton under options to
program,
in connection with the cotton acreage reduction
Agriculture,
of
nt
Departme
the
by
d
establishe
is being
Agricultural
Oscar Johnston, Director of Finance of the
The AnAdjustment Administration, said on July 31.
nouncement said:
Association
Under the proposed plan. the American Cotton Co-operative
Department, through
will set up a special division known as the F. 0. B.
offered to the trade.
which cotton under option that is to be sold will be
spot terms where it is
This cotton will be sold on what is known as local
the demands of option
located. The cotton will be sold in accordance with
holders, with the least possible harm to the market.
accurate description of the
A catalogue is now being prepared, giving
catalogues will be disoptioned cotton by class, grade and weight. These
to purchase any
tributed to the trade generally so that every person desiring
so, Mr. Johnston stated.
part of this cotton may have the opportunity to do
trade upon the best
He explained that the cotton will be sold to the
cotton at auction,
terms obtainable. It will not be practicable to offer the
from time to
solicited
be
but offers may be made at any time and may
time. The best offers will be accepted.
States—
Public Works Advisers Are Appointed for AbandonSecretary Ickes Urges Quick Action and
ment of Local Prejudices—Committees Receive
Broad Powers.
President Roosevelt on July 26 ck,mpleted the administra
the remainder
tive organization to direct the expenditure of
advisory
of the $3,300,000,000 public works fund, by naming
for
Texas,
except
State
each
boards of three members for
Ickes
which four were appointed. Secretary of the Interior
in recomsaid that these advisers would have broad powers
admending Federal assistance to non-Federal projects. He
urging
board
each
to
sent
be
would
ns
instructio
that
ded
will
quick action on sound and useful public works "which
provide employment for large numbers of men in the shortest
possible time." States will be asked to furnish suitable
quarters for the various committees and offices will probthe
ably be located at various State capitals. In expressing
local
hope that members of the State boards will forget
prejudices, Secretary Ickes said:
agents of the
Although appointed to represent States, they are really
the public works program in its
Federal Government. They are to view
broadest national aspects.
to winning quick apThey are to formulate local programs with a view
boards must study
proval here in Washington. To do this the State auvisory
Emerlocal projects in the light of the announced policies of the Federal
gency Administration of Public Works.
The State advisory boards are to proceed without delay in selecting for
early submission to the administrator a balanced program of useful public
works which will move men from relief rolls to payrolls.
That not every application for public works funds can be granted is
obvious. It will he the function of these boards to weed out those without
merit. Only the best should be recommended to Washington for approval.
These boards must keep the financial status of their communities in mind
at all times. They must not send to Washington projects which are not
financed adequately. The taxpayer who is paying this public works bill
must be protected at every step. Local government budgets must be carefully scrutinized.
Aug. 5 1933
boards is a heavy
The responsibility that rests upon the State advisory
of
one. Their contribution of disinterested public service to the success
to work.
the undertaking will be an important factor in getting men back
The members of the State boards are:
of MontAlabama—Milton H. Firs, of Birmingham; Mayer NV. Aldridge,
gomery, and Fred Thompson, of Mobile.
of
Little Rock,
Arkansas—E. C. Horner, of Helena ; IIaley M. Bennett,
and John S. Parks, of Fort Smith.
Arizona—William Walter Lane, of Phoenix ; Leslie G. Hardy, of Tucson,
and Moses B. Hazeltine, of Prescott.
California—Hamilton II. Cotton, of San Clemente; Franck Havenner, of
San Francisco, and E. F. Scattergood, of Los Angeles.
Colorado—Thomas A. Duke, of Pueblo; Morrison Shafroth, of Denver, and
Miss Josephine Roche, of Deriver.
Connecticut—John J. Pelley, of New Haven ; Archibald McNeil, of Bridgeport, and Harvey L. Thompson, of Middletown.
Delaware—Lee Layton, of Dover; Will P. Truit, of Milford, and William
Speakman, of Wilmington.
Florida—C. B. Treadway, of Tallahassee; NV. H. Burwell, of Miami, and
T. L. Buckner, of Jacksonville.
Georgia—Thomas J. Hamilton, of Augusta; Arthur Lucas, of Atlanta,
and Ryburn Clay, of Atlanta.
Idaho—Beecher Hitchcock, of Sandpoint ; Frank E. Johnesse, of Boise,
and Edward C. Rich, of Boise.
Illinois—Carter II. Harrison, of Chicago ; James L. Houghteling, of Chicago, and James II. Andrews, of Kewanee.
Indiana—Lewis G. Ellingham, of Fort Wayne; Charles B. Somers, of
Indianapolis, and John N. Dyer, of Vincennes.
Iowa—Harold M. Cooper, of Marshalltown ; W. F. Riley, of Des Moines,
and W. P. Adler, of Davenport.
Kansas—R. J. Paulette, of Salina ; Martin Miller, of Fort Scott, and
Ralph Snyder, of Manhattan.
Kentucky—Wylie B. Bryan, of Louisville; N. St. G. T. Carmichael, of
Kyrock, and James C. Stone, of Lexington.
Louisiana—James E. Smitherman, of Shreveport; Edward Richter and
James W. Thomson, of New Orleans.
Maine—James M. Shea, of Bar harbor; John Clark Scates, of Westbrook,
and 1Villiam M. Ingraham, of Portland.
Maryland—J. Vincent Jamison, of Hagerstown ; W. C. Stettinius, of
Baltimore, and Charles E. Bryan, of Havre de Grace.
Massachusetts—John J. Prindaville, of Framingham ; Alvin T. Fuller, of
Boston, and James P. Doran, of New Bedford.
Michigan—Murray D. Van Wagoner, of Pontiac; Frank II. Alford, of
Detroit, and Leo J. Nowicki, of Detroit.
Minnesota—John F. D. Meighen, of Albert Lea; Fred Schilplin, of St.
Cloud, and W. N. Ellsberg, of Minneapolis.
Missouri—William Ilirth, of Columbia ; Harry Scullin, of St. Louis, and
Henry S. Caulfield, of St. Louis.
Mississippi—Hugh L. White, of Columbia; Horace Stansell, of Ruleville,
and Birney Imes, of Columbus.
Montana—James E. Murray, of Butte; Raymond M. Hart, of Billings, and
Peter Peterson, of Glasgow.
Nebraska—John Latenser Jr., of Omaha; John G. Maher, of Lincoln, and
Dan V. Stevens, of Fremont.
New Hampshire—Harold Lockwood, of Dartmouth College; Robert 0.
Murchie, of Concord, and Stanton Owen, of Laconia.
New Jersey—Edward J. Duffy, of Teaneck; William E. White, of Red
Bank, and Walter Kidde, of Montclair.
New York—Peter G. Ten Eyck, of Albany; John T. Dillon, of Buffalo,
and Paul M. Mazur, of New York City.
Nevada—Robert A. Allen, of Carson City; William Settlemeyer, of Elko,
and Ed Clark, of Las Vegas.
New Mexico—J. D. Atwood, of Roswell; henry G. Coors, of Albuquerque,
and Felipe Sanchez y Baca, of Tucumcari.
North Carolina—Dr. Herman G. Belty, of Chapel Hill ; John Devane, of
Fayetteville, and Frank Page, of Raleigh.
North Dakota—Henry Holt, of Grand Forks; Stephen J. Doyle, of Fargo,
and Thomas Moody, of Williston.
Ohio—William A. Stinchcomb, of Cleveland; Rufus Miles, of Columbus,
and Henry Bentley, of Cincinnati.
Oklahoma—John II. Carlock, of Ardmore; Frank C. Higginbotham, of
Norman, and Walter A. Lybrand, of Oklahoma City.
Oregon—Bert Haney, of Portland; C. C. IIockley, of Portland, and Robert
N. Stanfield, of Baker.
Pennsylvania—Joseph C. Trees, of Pittsburgh ; A. E. Maimed, of Philadelphia, and J. Hale Stineman, of Lancaster.
Rhode Island—William S. Flynn, of Providence; John Nicholas Brown, of
Newport, and William E. Lafond, of Woonsocket.
South Carolina—L. P. Slattery, of Greenville; Burnet R. Maybank, of
Charleston, and Thomas B. Pearce, of Columbia.
South Dakota—Leon P. Wells, of Aberdeen; Herbert E. IIitchcock, of
Mitchell, and S. H. Collins, of Aberdeen.
Tennessee—Colonel Harry S. Berry, of Nashville; Roane Waring, of
Memphis, and W. Baxter Lee, of Knoxville.
Texas—Colonel Ike Ashburn, of Houston ; S. A. Goeth, of San Antonio;
John Shary, of Mission, and R. M. Kelly, of Long View.
Utah—William J. IIalloran, of Salt Lake City; Ora Bundy, of Ogden, and
Sylvester Q. Cannon, of Salt Lake City.
Vermont—Frank II. Duffy, of Rutland; P. E. Sullivan, of St. Albans, and
Lee C. Warner, of Bennington.
Virginia—Henry G. Shirley, of Richmond; J. Winston Johns, of Charlottesville, and Richard Crane, of Westover.
Washington—William A. Thompson, of Vancouver; C. W. Greenough, of
Spokane, and Roy Lafollette, of Colfax.
West Virginia—D. H. Stephenson, of Charleston ; William P. Wilson, of
Wheeling, and Van A. Bittner, of Fairmont.
Wisconsin—Walter G. Caldwell, of Waukesha ; William 0. Bruce, of Milwaukee, and John Donaghey, of Madison.
Wyoming—Patrick J. O'Connor, of Casper; Leroy E. Laird, of Worland,
and John W. Hay, of Rock Springs.
Gov. Lehman in Message to New York-Legislature-Asks
Legislation to Permit State's Participation in
Federal Employment Service Program.
With a view toward participation by the State in the Federal employment service program Gov. Lehman of New York
State sent to the Legislature on July 31 a message asking
Volume 137
Financial Chronicle
that body to accept the provisions of the Federal Act and
to designate the State Department of Labor as New York's
employment agency. The Knickerbocker "Press" of Albany,
in its August 1 issue, further reported in an Associated Press
item:
Lehman
No expenditure will be required on the part of New York, Mr.
the money
said in a message to the special session of the lawmakers, because
appropriated at the regular session last winter for employment offices in
requirethe State Department of Labor will meet the Federal Government's
ments. This State will receive $115,400 from the Federal Government to
$350,000
and
1934
30
finance job-finding and the placing of men up to June
for the four years following. All of these grants will be paid to the State
out of the fund set up by Congress. $1,500,000 for the year ending June 30
1934, and $4,000.000 a year for the four years thereafter. The money is
allocated to the States on the basis of their population.
"The Federal Act provides," Governor Lehman said, "that no payment
shall be made to any State until an equal sum has been appropriated or
otherwise made available by the State for the purpose of maintaining employment offices as part of a State system. This State is in a position to
meet this requirement without any additional appropriation. The moneys
appropriated during the last session by Your Honorable Bodies (the Senate
and Assembly) for the conduct of employment offices by the Department of
Labor satisfactorily meet the Federal prerequisite.
"With the help of these Federal funds the Department of Labor of this
State will be enabled to extend its employment services to communities at
present entirely without such service and to establish a net work of local
offices through which workers and employers throughout the State can be
effectively taken care of.
"With the development of similar services in other States and with the
co-ordination of those services on a regional basis by the Federal Government, an inter-State clearance system for the demand and supply of labor
will be created. Furthermore, by means of such system reliable statistical
information with respect to employment and unemployment, so greatly
needed in this country, can be collected and intelligently used.
"The State of New York should immediately put itself into a position
to co-ordinate with the United States employment service and play its part
In this respect of the National Industrial Recovery program."
A previous message of Gov. Lehman recommending the enactment of a bill to place the State back of the National Industrial Recovery drive, was given in our issue of July 29,
page 792.
Validityw-of Order of Secretary Wallace Reducing
Commission Charges on Livestock Contested by
Actions Brought by Members of Kansas City Live
Stock Exchange.
A reduction in commission charges for selling livestock at
the Kansas City stockyards, ordered about a month ago by
Secretary Wallace of the Department of Agriculture, first
made effective July 14, but later extended to July 24, will
be resisted in the Federal Courts by the members of the
Kansas City Livestock Exchange. The Kansas City "Star"
of July 19 in indicating this went on to say:
Fifty-one suits in equity were filed in the Federal Court here to-day attacking the validity of the order and asking temporary restraining orders
enjoining its enforcement during the period that the validity of the order
Is under consideration by the Court.
A Threat to Market.
The Kansas City Livestock Exchange alleges that the order is discriminatory and threatens the efficiency of the market operations. The increase
in stocker and feeder rates would strike at the livestock producer, and
affect that part of the Kansas City livestock business in which it has attained world leadership.
J. C. Swift, Vice-President of the Kansas City Livestock Exchange, and
John B. Gage, attorney for the Exchange, were in Washington this week to
confer with Secretary Wallace regarding the rescinding or modification of
the order, or extension of its date of effectiveness. Mr. Gage ordered his
office here to file the petitions, following these conferences.
The petitions state that the present schedule of rates and charges which
went into effect on May 23 1932, represents a reduction of more than 10%
in the rates theretofore prevailing, and that the total revenue under the
present rates and charges during the first five months of 1933 to all the
market agencies was approximately 43% less than during the first five
months of 1929, the year in which the Secretary commenced his investigation of these rates.
Nothing TVould Remain.
It is alleged that any further reduction will destroy the efficiency of the
market operations and that in respect to the eleven firms handling the
largest volume of business on the market, on the Government's own cost
showing, nothing would remain with which to pay any compensation to the
owners of the agencies or any return upon invested capital.
The selling rates provided by the order are alleged to be approximately
40% lower than the rates for similar services at Chicago. while buying
charges and the rates to dealers are approximately 40% higher.
The petitions allege that the present charges, even at the extraordinarily
low prices for livestock which have prevailed, amount to less than 2% of
the net proceeds of sales and less on this basis than charges for selling any
other agricultural product.
It is pointed out that in 1929 the total amount of all the charges was
only eighty-four hundredths of 1% of the net proceeds remitted to shippers
of livestock. It is also pointed out that the fixed expenses of these agencies
for rent, utility services, taxes paid by these plaintiffs, remain unchanged
at levels approximately 230% higher than in 1913.
A Severe Financial Blow.
It is contended that the rates put in effect would destroy the financial
Integrity of the market and a system of marketing which has efficiently accomplished the sale of all livestock consigned to the Kansas City stock.
Yards without any loss whatsoever due to failure to remit proceeds of sales.
It is alleged that the rates proposed would yield to all the agencies approximately 1,6 million dollars less than the costs recognized by the Government's own accountants in their cost study introduced in evidence at the
hearing.
971
The hearing will be before three Federal Judges, one of whom will be a
member of the Circuit Court of Appeals of the Eighth Circuit.
The suits were assigned to the court of Judge Merrill E. Otis, who announced that a hearing on the requests for a temporary restraining order
would be held at 10 o'clock Saturday, with Judge Arba S. Van Valkenburgh of the United States Court of Appeals, Judge Albert S. Reeves of the
District Court and himself sitting as the 3-Judge Court.
A Kansas City despatch, July 22, to the New York
"Times" stated:
Secretary Wallace was restrained by a three-Judge Federal court to-day
from putting into effect the new commission rates he has promulgated for
the Kansas City Stock Yards. The temporary order is effective for 60 days
and a later hearing will be held to pass upon the merits of the rates.
It was said in court that a majority of the new rates were reductions from
the old rates. The new schedule would have become effective Monday.
The order was sought in an application filed Thursday by John B. Gage.
attorney for 51 livestock dealers.
Sitting on the case were Judge Arba S. Van Valkenburgh of the arcui$
Court of Appeals. and Judge Albert L. Reeves and Judge Merrill E. Otis
of the District Court.
NRA Issues Series of Rules Interpreting and Clarifying
Blanket Code Agreement—Not Intended to Affect
Collective Bargaining Contracts—General Johnson
Permits Small Stores to Employ Workers in 48Hour Week—Groups Not Covered by President's
Re-employment Agreement.
A series of rules, clarifying and explaining President
Roosevelt's re-employment plan, under the blanket Code,
have been issued by the NRA, following numerous inquiries
from all sections of the country as to the interpretation to
be given certain phrases. These interpretations were prepared by the legal staff of NRA, headed by Donald Richberg,
counsel, who remarked that the agreement was written in a
language intended to be flexible and to be capable of meeting
varying conditions. He also indicated that the Code does not
intend to affect contracts between employers and employed,
or to compel the breaking of contracts which involve collective bargaining. The text of the first six interpretations,
issued on July 28, follows:
INTERPRETATION OF PRESIDENT'S RE-EMPLOYMENT AGREEMENT.
Interpretations Nos. 1 to 6.
The President's .re-employment agreement was written in language intended to be flexible to meet many varieties of conditions. As a result, interpretations will be required from time to time as uncertainties in the
application of the agreement develop.
Interpretation No. 1 (concerning Paragraph 7).
means, first, that compensation of employees above the mini7
Paragraph
mum wage group (whether now fixed by the hour, day, week or otherwise)
shall not be reduced, either to compensate the employer for increases that
he may be required to make in the minimum wage group in order to comply
with the agreement or to turn this re-employment agreement into a mere
share-the-work movement without a resulting increase of total purchasing
power. This first provision of Paragraph 7 is a general statement of what
shall not be done.
The rest of Paragraph 7 is a particular statement of what shall be done,
which is that rates of pay for employees above the minimum wage group
shall be increased by "equitable readjustments." No hard and fast rule
can be laid down for such readjustments because the variations in rates
of pay and hours of work would make the application of any formula unjust
in thousands of cases. We present, however, the following examples of the
need for and methods of such readjustments:
Example 1. Employees now working 40 hours a week in factories. When
hours are reduced to 35 the present rate an hour, if increased one-seventh,
would provide the same compensation for a normal week's work as before.
Example 2. Employees now working 60 hours a week in factories. When
hours are reduced to 35, a rate an hour, if increased one-seventh, might be
insufficient to provide proper compensation. But, to increase the rate by
five-sevenths, in order to provide the some compensation for 35 hours as
previously earned in 60, might impose an inequitable burden on the employer.
The 60-hour week might have been in effect because of a rush of business,
although a 40-hour week might have been normal practice at the same
hourly wage. Seasonal or temporary increases in hours now in effect, or
recent increases in wages, are proper factors to be taken into consideration
in making equitable readjustments.
The policy governing the readjustment of wages of all employees in what
may be termed the higher wage groups requires, not a fixed rule, but "equitable readjustment" in view of long standing differentials in pay schedules;
with due regard for the fact that payrolls are being heavily increased and
that employees will receive benefits from shorter hours from the re-employment of other workers, and from stabilized employment which may increase
their yearly earnings.
The foregoing examples indicate the necessity of dealing with this problem
of "equitable readjustment" of the higher rates of pay, on the basis of consideration of the varying circumstances and conditions of the thousands of
enterprises and employments involved. Any attempt to define a national
standard would be productive of widespread injustice. The NRA will,
through local agencies, observe carefully the manner in which employers
comply with their agreement to make "equitable readjustments" and will
take from time to time and announce from Washington such action as may
be necessary to correct clear cases of unfairness and to aid conscientious
employers in carrying out in good faith the terms of the agreement.
When an employer signs an agreement and certifies his compliance and
also joins in the submission of a Code of fair competition before Sept. 1 1933
his determination of what are "equitable readjustments" should be accepted,
'
at least prior to Sept. 1, as a prima facie compliance with his agreement,
pending action by NRA upon the Code submitted, or any other action by NRA
taken to insure proper interpretations or applications of agreements. This
will afford NRA an opportunity to survey the general results of the re-employment program and to iron out difficulties and misunderstandings over
agreements that are of a substantial character.
672
Financial Chronicle
Interpretation No. 2 (concerning Paragraph 14).
A person who believes that some particular provision in the agreement,
because of peculiar circumstances, will create great and unavoidable hardship, should prepare a petition to the NRA asking for a stay of this provision as to him. He should then submit this petition to the trade association of his industry, or if there is none, to the local Chamber of Commerce
or similar representative organization designated by NRA, for its approval.
The written approval of the trade association, or such other organization,
will be accepted by NRA as the basis for a temporary stay, without further
investigation, pending decision by NRA. The petition must contain a promise
to abide by NRA's decision, so that if NRA decides against the petitioner,
he must give effect to the provision which was stayed, from the date of
the decision of NRA.
The petition and approval of the trade association or other organization,
as prescribed above, should be forwarded to NRA in Washington; and the
employer's signed copy of the President's re-employment agreement should
be sent to the district office of the Department of Commerce. After complying with these requirements the employer will be entitled to receive and
display the blue eagle by delivering his certificate of compliance to his
post office.
Paragraph 14 is not intended to provide for group exceptions, but only
to meet cases of individual hardship.
Interpretation No. 3 (concerning date of compliance).
It is expected that all employers desiring to co-operate with the President's recovery program will sign the agreements promptly and mail them
In. It is recognized, however, that it will be physically impossible in many
instances to adjust employment conditions and to hire the necessary additional personnel in order to comply with the agreement on Aug. 1. For that
reason, provision has been made for issuing the blue eagle only upon the filing
of a certificate of compliance. It should be possible in most cases to nrake
the necessary adjustments and file a certificate of compliance within the
first week of August, and such action, taken as promptly as possible, will be
regarded as carrying out the agreement in good faith.
Interpretation No. 4 (concerning Paragraph 13).
All employers are expected to sign the agreement, whether codes have been
submitted to the NRA or not (unless such codes have already been approved) ;
but after the President has approved a Code, or after NRA has approved of
the submission of the provisions of a Code for agreements in the trade or
industry covered, conformity with the Code provisions by an employer will
be regarded as compliance with his individual agreement.
Interpretation No. 5 (concerning Paragraph 9).
Where the July 1 1933 price was a distress price, the employer signing the
agreement may take his cost price on that date as the base for such increase
In selling price as is permitted by Paragraph 9.
Interpretation No. 6 (concerning employment covered by the agreement).
The following groups of employment are not intended to be covered by the
President's re-employment agreement:
1. Professional occupations.
2. Employees of Federal, State and local governments and other public
Institutions and agencies.
3. Agricultural labor.
4. Domestic servants.
5. Persons buying goods and selling them independently or persons selling solely on commission, provided, however, that persons regularly employed
to sell on commission, with a base salary or guaranteed compensation, come
within the requirements of the agreement.
Six additional interpretations were issued by the NRA on
July 30. Of these the most important was the one explaining that the agreement imposes no limitation on the maximum hours of operation of a store or service. On the same
day General Hugh Johnson, Recovery Administrator, agreed
to permit retailers in small establishments to employ workers up to 48 hours a week, instead of the 40-hour limit required by the Code. Under this agreement the minimum pay
scale is placed at $12 to $15 a week. Another of the interpretations issued by the NRA states that time and one-third
pay will be required for hours worked in excess of the maximum by employees on emergency maintenance and repair
work. The text of the rules, made public July 30, follows:
INTERPRETATIONS OF PRESIDENT'S RE-EMPLOYMENT AGREEMENT.
Interpretations Nos. 7 to 12.
The President's re-employment agreement was written in language intended to be flexible to meet many varieties of conditions. As a result,
interpretations will be required from time to time as uncertainties in the
application of the agreement develop.
Interpretation No. 7 (concerning Paragraph 4).
Hours worked in excess of the maximum by employees on emergency
maintenance or repair work shall be paid at the rate of time and one-third.
Interpretation No. 8 (concerning Paragraph 2).
The hours of any store or service operation may be reduced below the
minimum specified in Paragraph 2, if the reduction is in accordance with a
practice of seasonal reduction of hours and does not result in reduction of
the weekly pay of employees.
Interpretation No. 9 (concerning the minimum wage for apprentices).
The minimum-wage provisions of the agreement do not apply to apprentices if under contract with the employer on Aug. 1 1933, but no one shall
be considered an apprentice within the meaning of this interpretation who
has previously completed an apprenticeship in the industry.
Interpretation No. 10 (concerning the minimum wage for part-time workers).
The minimum wage for a part-time worker in an employment described
in Paragraph 2 of the agreement is a wage such that if the employee worked
at that wage for a full week of 40 hours he would receive the minimum weekly
wage prescribed for him by the agreement. The minimum wage for a parttime worker in an employment described in Paragraph 3 of the agreement
is the minimum wage per hour prescribed by Paragraph 6 of the agreement.
Interpretation No. 11 (concerning maximum hours of store operation).
The agreement imposes no limitation on the maximum hours of operation
of a store or service.
Aug. 5 1933
Interpretation No. 12.
The following are among the employments included in Paragraph 2:
Barbers, beauty parlor operators, dish washers, drivers, delivery men, elevator operators, janitors, watchmen, porters, restaurant workers and filling
station operators.
The first interpretations, issued two days ago, did not answer a number
of inquiries which have been made.
General Johnson of NRA Rebukes New York Concern
for Violating Code Regulations.
On July 31 General Hugh S. Johnson made public the following telegram sent to a New York concern, in which he
admonished it for alleged violation of the terms of the President's re-employment (NRA) agreement:
Lebanon Shirt Co.,
220 Fifth Avenue,
New York City.
Your full-page advertisement containing NRA insignia, published in the
"Daily News Record" of Wednesday, July 26 1933, is a distinct violation of
the letter and the spirit of the President's re-employment plan. You not
only have adopted a subterfuge to mislead prospective customers into believing that by some special dispensation you can offer them a privileged piece
of merchandise under the NIRA, but you used the insignia before it was released generally to employers.
Inasmuch as the terms under which the insignia might be used in advertisements were set forth clearly in Circular No. 1, your violation of the regulations is absolutely inexcusable and is to be condemned. A copy of this
telegram is being released to newspapers and press associations.
HUGH S. JOHNSON, National Recovery Administrator.
D. R. Richberg, NRA General Counsel, Urges War on
"Slackers" in Recovery Campaign—Says 10% Will
Let Others Take Risks While They Take Profits—
This Minority Will Lose "Blue Eagle," He Declares
in Radio Address—"Revolution Not in Purpose
But in Method."
A demand that Americans "wage a war against selfishness
and greed that corrupt the individual and destroy the
Nation" was voiced in a radio address on July 31 by Donald
R. Richberg, General Counsel of the NRA. Mr. Richberg, who spoke over a network of the National Broadcasting
Co. from Washington, said that the real war in the Athqinistration's recovery program would be against 10% of the
population who, he asserted, allow others to take risks while
they follow close behind to take the profits. These persons,
he added, will lose the "blue eagle" symbol if it is shown that
they are acting in bad faith. A partial account of Mr. Richberg's address, as given in Washington advices to the New
York "Times," follows:
Despite Mr. Richberg's assurance that "it is the purpose of the Government to build up and not to destroy, to encourage and reward the volunteers
who do their part and then let the slackers and the evaders herd together
and enjoy the society of each other," the address contained what was
construed as a definite threat of exercise of the Government's licensing
power against non-conformists.
Blue Eagle an "Honest Bird."
"The 10%'s will hold back," Mr. Richberg said. "The 10%'s will use
plausible and legalistic excuses. The 10%'s will not like the blue eagle,
although some may try to hide behind it.
"But the blue eagle is an honest bird. He is 100% American. He will
not long protect a 10%. And when the blue eagle has once flown away he
will not return.
"A 10% should understand that he cannot get the blue eagle back again
when it has been taken away because of his bad faith."
Speaking of the risks to business men in accepting the recovery program
of re-employment and higher wages, Mr. Richberg asserted:
"The risk and cost of permitting the depression to continue, the risk and
cost of drifting into the fifth winter of ghastly unemployment with private
and public relief funds largely exhausted, would be far greater to every
man than the heaviest risk and cost he may assume in signing or helping
to carry out the President's agreement."
Revolution by "Pen and Voice."
Sometimes, on hearing "well-fed, jovial men and well-dressed cheerful
women chatting in their comfortable homes," Mr. Richberg said he wondered how many of "the fortunate people of this country understand that
the long-discussed revolution is actually under way in the United States."
"There is no need to prophesy," he declared. "It is here. It is in process. In many other countries there have been revolutions since the World
War—each one with surprisingly little bloodshed, but with a tremendous
exercise of force and oppressive power.
"In this favored land of ours we are attempting possibly the greatest
experiment of history.
"Revolution by the sword and bayonet is nothing new. Revolution by
the pen and voice is different. The violent overthrow of parliaments and
rulers is nothing new, but the peaceful transition of all departments of
government from one fundamental concept of a political economic system
to another is different.
"It is a revolution not in purpose but in method; yet so profound a
change in method that our purpose may seem changed. That is not so.
The ideals that are written into the Declaration of Independence and the
Constitution of the United States still guide this Government.
"Regimentation" Not Planned.
"It is the freedom of the individual, his right to pursue happiness, the
security of his home, of his life and of his thought, that our Government
has been established to maintain—and will mainatain.
"It is not the regimentation of millions of wage earners that the NRA
would bring about, but their freedom from regimentation into armies of the
unemployed.
"It is not the control of industry that the NRA would bring about, but
Industrial freedom from control, either by a few dictators, or by the irresponsible movement of economic forces.
"The President's agreement is a pledge of public service—a pledge to
sacrifice an immediate gain for an everlasting profit—a pledge from the
Veume 137
Financial Chronicle
business men of America to unite to employ the workers of America. In
confident assurance that the dollars they add to the payrolls on Saturday
will come clinking back into the cash registers before the next payroll day
arrives."
General Johnson Asks Two Weeks Period Be Allowed
for Industries to Adopt Blanket Code Agreements
—Suggests Boycott Be Delayed to Permit Necessary
Adjustments.
General Hugh S. Johnson, Recovery Administrator, will
give business and industry two more weeks before he will
agree to the use of pressure as a means of enforcing compliance with the President's blanket wage and employment
agreement, he said yesterday (Aug. 4) in a conference with
newspaper men. General Johnson said that a period of
time is necessary for business concerns to adjust their personnel to the new levels of wages and hours, and added
that until this transitional period is ended the public must
"be reasonable and not start boycotts." He indicated,
however, that no "recalcitrant minority" would be allowed
to impede the recovery program and that the "teeth" of
the Recovery Act will be utilized if necessary, under the
power of the President to license industries, and to refuse
licenses to firms which refuse to abide by codes adopted to
cover their industry.
Utilities Pledge Industry to Early Action on Code.
The following from Washington, Aug. 3, is from the New
Yoi k "Joulnal of Commerce" of Aug. 4:
Full co-operation of the gas and electric utility industries in the President's emergency re-employment program was promised General Johnson
to-day by a committee consisting of George B. Cortelyou, President,
Edison Electric Institute; Floyd L. Carlisle, Chairman, Special Code
Committee of the Institute, and Herman Russell, Chairman, Special Code
Committee, American Gas Association. In view of the fact that the
utilities are service industries in continuous operation day and night,
some modifications of the President's re-employment agreement were
discussed and the Committee was requested by General Johnson to bring
In their code as soon as possible in order that the provisions covering
these special conditions may be substituted for the provisions in the standard
agreement, thereby entitling the members of the industries to receive
the blue eagle, upon execution of the modified agreement.
President "Drafts" More Than 600 Citizens to Lead
Recovery Drive Throughout Nation—Names Members of 48 State Boards and 26 District Boards in
Telegrams Sent by General Hugh S. Johnson,
The Administraticn's 30-day re-employment drive, designed to include as much of American industry as possible,
was officially launched on Aug. 1, and on the same day
General Hugh S. Johnson, Recovery Administrator, made
public the names of more than 600 citizens who had been
"drafted" by President Roosevelt to lead the re-employment campaign in their respective States and districts.
Each State Recovery Board consists of nine members,
while in addition 26 district boards have been formed, each
comprising seven members. Each member of the various
boards was notified of his selection on Aug. 1 in the following telegram:
President Roosevelt has drafted you as one of the nine members of
the State Recovery Board for the State of
, as explained in
Bulletin No. 3 of July 20 1933. He has requested you to volunteer your
services without compensation in this great drive for national rehabilitation. As a member of this board your duties will be to get every patriotic
American citizen employer and consumer to co-operate in this program.
Please wire acceptance immediately and you will receive further instructions.
GENERAL HUGH S. JOHNSON.
Leaders who were named in the East include:
Eastern District (parts of New York,New Jersey and Connecticut).—John
L. Hartnett, Troy, N. Y.; John Vanneck, New York, N. Y.; Mrs. Charles
H. Sabin, Southampton; Dr. Nicholas Murray Butler, Columbia University; Charles A. Beard, New Milford, Conn.; John R. Hardin, Newark,
N. J.; John Milton, Jersey City.
Buffalo District (western New York).—Dr. Francis E. Fronczak, Buffalo;
Bernard E. Finucane, Rochester; Mrs. C. Leonard O'Connor, Portland;
Alexis N. Muench, Syracuse; Clarence H. Kennedy, Elmira; John H.
Wright, Jamestown; E. J. Williams, Pinsdale.
New England District.—Robert Shepherd, Providence; Redfield Proctor,
Proctorville, Vt.; James P.Morlarity, Boston; Roy D. Hunter, West Farmington, N. H.; Joseph Alsop, Hartford; James F. Carberry, Boston; Walter
S. Bucklin, Boston.
Philadelphia District (eastern Pennsylvania and Delaware).—Samuel S.
Fels, Philadelphia; J. T. Skelly, Wilmington, Del.; I. B. Finkelstein, Wilmington; Fred A. Heim, Bethlehem, Pa.; George W. Heasel, Jr., Quarryville, Pa.; Thomas Kennedy, Hazleton, Pa.; Karl De Schweinitz, Philadelphia.
Pennsylvania.—W. M. Jacoby, Pittsburgh; John Phillips, Harrisburg;
Warren Worth Bailey. Jr., Johnstown; Charles Lynch, Greensburg;J. David
Stern, Philadelphia; Matthew H. McClockey, Jr., Philadelphia; Louis C.
Emmons, Swarthmore; M. E. Comerford, Scranton; S. Forry Laucks,
York.
The State Recovery Boards included the following:
New York.—James F. Conway, Plattsburg; Peter D. Kierman, Albany;
Albert Kessinger, Rome; Perley Morse, Suffern; William A. Denison,
Rochester; Moses Symington, Long Island City; David J. McLean, Brooklyn; Julia D. Hansom, Schenectady; P. Sherwin Haxton, Oakfield.
Connecticut.—Frank Bergin, New Haven; Edward G. Dolan, Manchester;
Fanny Dixon Welch, Columbia; Don A. Coster, Bridgeport; E. Rent Hub-
973
bard, Middletown; William Fitzgerald, Norwich; Joseph Holloran, New
Britain; John J. Walsh, Stamford; Milton McDonald, Bridgeport.
Massachusetts.—P. 0. O'Connor, Boston; Stanley King, President Amherst College; Allan Forbes, President State Trust Co.; Charles J. Mahoney,
Boston; E. Kent Swift, Whitenville; James Wall, North Adams; Edward
A. Filene, Boston; Edward C. French, President Boston & Maine RR.;
Miss Margaret Weisman, Secretary Massachusetts Consumers' League;
John J. Power, Worcester.
New Jersey.—Theodore Boettcher, Paterson; Ferdinand Roebling, Trenton; Charles J. Roh, Newark; H. C. Beaver, Harrison; Thomas N. McCarter, Newark; Clinton L. Bardo, Camden; Charles Edison, West Orange;
Lester Coffins, Morristown; Percy Stewart, Bloomfield.
Limitation of Hours Will Increase Employment, in
Opinion of National Industrial Conference Board.
Limiting the week's work to 35 hours in manufacturing industry and 40 hours in non-manufacturing pursuits would
have required in May 1933 about 1,681,000 more workers than
the 12,185,000 estimated to have been employed. This is the
conclusion of a careful computation to be published in the
forthcoming service letter of the National Industrial Conference Board. Under date of July 31 the Board said:
The procedure used in determining this figure assumes that the man hours
actually worked in May would be maintained under the suggested limitation
of working hours per week. There is abundant evidence that total man
hours, particularly in manufacturing industry, were considerably more
numerous in June than in May 1933. If June work had been redistributed
by the suggested limitation of hours it would have required an even greater
number of additional workers, probably in the neighborhood of 2,000,000.
In manufacturing industry it was estimated that 6,139,000 persons were
employed in May 1933. It was found that in May 1932, when average hours
for all industries was practically the same as in 1933, a group of 1,500,000
workers contained over 811,000 who worked man hours in excess of 35 hours
a week. The proportion of additional workers required under a 35-hour
limitation to do all the work performed by the entire group was applied to
the estimated employment of May 1933, with the result that 839,000 additional workers would be required in this field alone.
Information of a similar nature is available for a group of non-manufacturing pursuits including anthracite coal mining, bituminous coal mining,
metalliferous mining, quarrying and non-metallic mining, crude oil production, telephone and telegraph, water, light and power, operation of electric
railways and motor buses, wholesale trade, retail trade and hotels. Similar
methods of calculation with a limit of 40 hours a week indicated that in
these fields 842,000 additional workers would be required to do the work
performed in May.
Suggestive as these figures are they do not give a complete measure of
possible re-employment under limitation of hours. They do not attempt to
forecast any increase in total man hours nor do they include the entire list
of employments subject to regulations to be put into force under the NIRA.
Employment and Hours Increased in June, According
to National Industrial Conference Board.
The returns received monthly by the National Industrial
Conference Board from manufacturing establishments recorded for June 1933 a notable advance over the previous
month in employment and earnings of industrial workers, the
Board announced on July 31. Employment in these factories
increased 7.2%, continued the Board, which added:
If this rate prevailed in all manufacturing industry the 6,139,000 workers
computed to be occupied in May 1933 were re-enforced in June by about
442,000 additional workers. Hours of work for old and new workers increased 10% from May to June. With practically the same hourly earnings
in the two months, the weekly pay envelope contained 10% more in June
than it did in May. What this combination of more workers and longer
hours meant to the community is seen in an increase of 18% in man hours
and therefore in payrolls and purchasing power.
In June 1933 the average weekly earnings, for an average week of 41.2
hours were $18.49 for skilled and unskilled workers of both sexes. This
figure is still 31.5% below the level of money earnings in 1923. If account
is taken of the fact that the cost of living, despite a slight rise in June over
the May figure, is still far below the 1926 level, it appears that the June
1933 pay envelope would buy almost as much as did that of 1923. In other
words, the purchasing power of wages in June 1933 was 95.5% of that of
the year 1923.
The improvement noted was general among the 25 industries reporting
to the Conference Board. With exception of four industries, there was an
advance both in employment and in hours. In 11 industries the purchasing
power of the weekly earnings was greater in June 1933 than it was in 1926.
Members of National Association of Manufacturers
Urged to Delay Signing of NRA Code Pending
Interpretation of Portions Affecting Wages and
Working Hours—Shorter Hours for the Same
Weekly Pay May Be "Insupportable," Says Assoc•ation.
The National Association of Manufacturers in a bulletin
sent to its members July 28 suggested that they refrain from
signing President Roosevelt's blanket NIRA Code until they
had ascertained how the Recovery Administration interlpreted the case of labor receiving higher wages but working
longer hours than stipulated in the Code. A Washington
dispatch July 28 to the New York "Times" indicating this
added:
The bulletin warned members that where employers seek exceptions to
certain provisions of the Blanket Code, they should obtain an official ruling
on their requests before signing it, since they would otherwise be bound by
all provisions.
"If Paragraph 7 [of the NM] is interpreted to mean that hourly
workers must be paid the same weekly pay for reduced number of hours,
then the contract in many cases becomes insupportable," the bulletin stated.
Financial Chronicle
974
Board Acted Unanimously.
The recommendations were addressed to "the manufacturers of the
country" and were unanimously adopted at a meeting of the association's
Board of Directors.
"We wish to emphasize," said the association, "that while we urge every
manufacturer who can do so to sign the proposed agreement, we also call
attention to the fact that unless he first presents his request for exceptions
from the operation of particular portions of the agreement and receives a
favorable ruling, he will be bound by the blanket agreement as circulated
by the President if he signs the same. It is therefore highly important
that in such cases he secure a ruling on these matters before signing the
agreement.
"We also call particular attention to the suggestion which we have made,
that since the signing of an agreement carries with it acceptance of the
labor provisions of the Act (Section 7A) it is highly important that the
employer should insist upon the approval of additional language which will
clearly express his constitutional right to deal with his employees in such
form as is mutually agreeable to employer and employee."
Objections on Pay Provisions.
Reasons given by the association to show the insupportability of the
interpretation that hourly workers be paid the same weekly pay for a
smaller number of hours were:
"1. Thousands of industries whose finances have been drained by three
years of operating losses cannot possibly finance the greatly increased labor
cost pending the certain delay in obtaining higher prices and greater sales.
This would ruin and close small institutions, which is not consistent with
the purposes of the act, and would further add to unemployment.
"2. It penalizes the employer who has dealt generously with labor and
who already pays most of his employees much more than the prescribed
minimum.
"3. It gives an unfair advantage to the low-wage employer because, instead of bringing his costs up to the level of the higher-wage employer, it
maintains the present spread between the low-wage and the high-wage employers.
"4. Where industries pay bonus in addition to a high guaranteed wage,
the bonus rates would be raised due to the reduced number of hours.
"We urge the following interpretation be put on Paragraph 7:
"'Compensation for employment' refers to compensation per hour wherever hourly rates are mentioned, and compensation per week where weekly
rates are mentioned.
"In ease the application of the contract reduces the total weekly earnings the rate of pay should be increased by an equitable readjustment of
pay."
Iowa Grocers, Rejecting NRA Code, Threatened—
Stores Forced to Close in Fear of Violence.
From the New York "Herald Tribune" we take the following (United Press) from Des Moines, Iowa:
Disturbances reminiscent-of wartime hysteria were reported in two Iowa
cities to-day as followers of the NRA in the grocery trade allegedly threatened yellow paint, bricks and bombing to force fellow tradesmen into line.
C. D. Amos. President of the Des Moines Retail Grocers' Association,
denied that the association was involved in the threats.
Five Des Moines grocery owners protested that they had been obliged
to close their stores under threat of violence unless they followed the schedule for closing hours adopted by the local grocers' association. The hours
adopted were from 8 a. m. to 6 P. In.
One grocer posted a guard with a sawed-off shotgun at his store after he
had been warned by telephone that he would be "beaten up" unless he
complied with the code.
At Waterloo a store that refused to close in compliance with the code
was surrounded by a crowd of people and numerous arguments followed.
The crowd broke up without violence.
"Sock Right onNose" Promised By Gen. Johnson of
NRA For Those"Who Won't Go Along With Code."
To quote from Associated Press dispatches from Cleveland
July 29 "a sock right on the nose" is what General Hugh S.
Johnson says objectors to the National Industrial Recovery
Act "who won't go along with the code" will get.
And the man President Roosevelt selected to create jobs
for idle millions shoved his firm, square jaw out another
notch as he said it. The dispatch also stated in part:
General Johnson's double-breasted gray suit was pressed, his shoes
shined, in sharp contrast to the wrinkles and dust that showed plainly
when he arrived for an overnight stop and his first good night's sleep In
weeks. The contrast was as marked as was his hotel bed from the hard
floor of the army plane on which he caught_a few winks on a flight from
Detroit yesterday afternoon.imam mi ki
Says "Plan Is Working."
His eyes—were—bloodshot, but they showed his satisfaction at a hard
Job done. . . .
"My message is simply this: The plan is working. The most essential
thing for us to do Is to get rid of the psychology of unemployment. Stop
figuring that you'll have to save for a rainy day. Spend to end umemployment.".itaitasitualligiiiiii
Textile Mill Workers in the Carolinas First to Draw
Pay Under Industry's Wage Code.
From Charlotte, N. C., Associated Press advices, July 29,
said:
Money was more plentiful in Carolina mill villages to-day as operatives
received and started spending the first money they have drawn under the
cotton textile industry's Code.
The Code went into effect July 17, with its minimum wage of $12 for a
40-hour week, but virtually all mills in this section hold back a week's pay.
Thousands of employees received increased wages to conform with the
minimunt scale, while skilled workers in a number of mills are reported to
have been paid varying Increases.
Textile plants in Greenville County, S. C., now running at peak production, employ around 13,000 workers.
Aug. 5 1933
Gen. Johnson of NRA Says It Is "Little Employer"
Who Will Make Recovery Plan a Success—Says
Automobile Code Will Put More Men Back to Work
at Better Wages.
General Hugh S. Johnson, Chief of the NRA,at Cleveland,
on July 28, told a gathering in the public square: "I went
to Detroit to get the automobile Code and I have it here in
my pocket."
Associated Press accounts from Cleveland, July 28, are
quoted further as follows:
"I hope all of you here are not unemployed now," he said, "but, nevertheless, the NRA is working."
He said the automobile Code "will put many men back to work at generally better wages than they have had."
"The thing we have yet to do," he continued, "is to get rid of the psychology of unemployment and to think in terms of not having to save for
unemployment."
He said he had not seen "a higher degree of enthusiasm anywhere than in
Cleveland."
In another address General Johnson recalled the condition of the country
before President Roosevelt took office.
"Graneries were full of grain, warehouses were filled with clothing. There
were stores on every hand. Yet 40 or 50% of the people of the United States
didn't know where to look except to public charities." He termed it a
"state of paralysis."
The whole situation has changed, he said, since the NIRA was placed in
operation.
All the great basic industries are co-operating, General Johnson said.
"But after all," he added, "it is the little employer, the one who hires
one to 10 men, who will make this plan a success. I've seen a little opposition in this respect. An editorial in a New York newspaper the other day
asked what was to become of the small stores.
"I say to you—what I told them in a telegram to-day—men have died
and worms have eaten them, but not from paying $12 a week for work in a
retail store."
NRA Emergency Postage Stamp Approved by
President Roosevelt.
Associated Press advices, July 29, from Washington, said:
One of President Roosevelt's last official acts before leaving Washington
for his Hyde Park vacation was to approve the model for a special postage
stamp to assist in arousing support for the recovery campaign. To be known
as the "NRA Emergency Postage Stamp," it will have as its central subject
the figures of a farmer, a business man and industrial worker and a woman
employee to typify American industry "as they walk hand-in-hand in a
common determination."
Of regulation size, at its top will appear the words "United States Postage"; to the left of these words "3 Cents," and in the lower left-hand corner
an Arabic numeral three. In distinctive lettering to the left of the, central
group will appear the letters "NRA." The color will be purple. It will
be ready for sale about Aug. 15. An order has been placed for an initial
printing of 400,000,000.
President's Re-employment Agreement Under NIRA
Effective Aug. 1.
The President's re-employment agreement under the NIRA
—the so-called "blanket" Code (given in our issue of July 22,
page 585)—became effective Aug. 1. Employers were called
upon to sign the agreement and mail it as soon as received.
On Aug. 1 they were asked to sign a statement indicating
acceptance of the agreement. Following that they were supplied with the blue eagle of the NRA to be displayed in their
places of business. A Washington dispatch, July 27, to the
New York "Times" noted:
Under the agreement employers may not engage persons under 16 years
of age after Aug. 31. They may not work any clerical, accounting, banking,
office, service or sales employees (except outside salesmen) for more than
40 hours a week.
Factory or mechanical workers or artisans must be employed a maximum
of 35 hours a week until Dec. 31 1933, but a 40-hour week may be put into
effect for any six weeks within this period.
The minimum wage scale in industry is 40c. an hour, and for white-collar
workers ranges from $12 to $15 a week.
Newspaper Reporters, Editorial Writers, &c., Exempt
from 40-Hour Week Limitation Under President's
NRA Re-employment Agreement— Gen. Johnson
Says Ruling May Not Be "Final Word."
New interpretations to clarify the President's voluntary
re-employment agreement were issued on July 31 by the NRA,
among them one providing for business men without employees obtaining the NRA eagle insignia. According to Associated Press advices from Washington, July 31, these may
get the co-operators' emblem by signing the agreement and
certificates of compliance. The Associated Press accounts
also said :
An interpretation concerning professional workers reads:
"The following are included among professional persons within the meaning of Paragraph 4 (relating to hours):
"Newspaper reporters, editorial writers, rewrite men and other members
of editorial staffs.
"Internes, nurses, hospital technicians, research technicians."
The "white collar" worker class limited to 40 work hours a week includes
maintenance forces such as charwomen, window cleaners, &c.
Employees receiving $35 or more per week whose duties are in part but
not wholly managerial or executive are not under work hour limits.
Non-profit organizations are counted as employers for all purposes of
the agreement.
Volume 137
Financial Chronicle
Trade areas of larger communities are defined as the territory in which
there exists direct competition. If the question arises, the decision should be
made by a Chamber of Commerce or similar organization subject to review
by the State Recovery Board.
Paragraph 4 of the President's blanket Code was as follows:
The maxl 111171 hour i fixed In the foregoing paragraphs (2) and (3) shall not apply
to employees 11 establish nents employing not more than two persons in towns
of less th to 2,509 population which towns are not part of a larger trade area; nor to
regIste-ed phi!' nacists or their professional persons employed In their profession;
nor to employees In a managed el or executive capacity, who now receive more
then $35 per week; nor to employees on emergency maintenance and repair work:
nor to very special cases' where nitric:00ns of hours of highly skilled workers on
continuous processes would unavoidably reduce production, but, In any such special
case, at least time and one-third sh ell be weld for hours worked In excess of the
maximum. Population for the purposes of this agreement shall be determined by
reference to the 1930 Federal census.
On Aug. 1 Associated Press accounts from Washington
said:
Hugh S. Johnson, the recovery administrator, to—day Indicated that the
official ruling of his assistants, that newspapermen are "professional
workers" and therefore not subject to hour limits of the Presideet's voluntary agreement, may not prove the final word on the subject.
He said this question would need further study, and also that no ultimate decision had been reached yet on how newspapers will be expected to
deal with their union contracts specifying definite hour and wage levels,
In complying with the agreement.
Way Open for Publishers to Sign Blanket Code—
NRA Ruling Permits Observance of Union Contracts.
The following Associated Press advices from Washington,
Aug. 3, are from the New York "Herald Tribune":
Recovery administration officials expressed the opinion to-day that they
bail sufficiently clarified the position of newspapers in relation to the
President's voluntary re-employment agreement to open the way for
publishers to come in without difficulty.
A ruling to-day permitted publishers who have contracts with their
mechanical forces, arrived at by collective bargaining, to keep these in
force even under the blanket agreement, if the way is not open to modification. If the contracts provide for a definite number of work hours
a week, 48 for instance, work may proceed on that basis. If they merely
provide a rate an hour, publishers will be expected to reduce the workweek to 35 hours with an upward re-adjustment of pay rates, though
this need not necessarily bring the total weekly earnings up to the 48hour level.
As for the child labor provision and its 7 a. m. work time limit, officials
were disposed to allow latitude in the case of newsboys. They did not
believe work by paper carriers before that hour would be generally harmful.
In regard to news forces the present intention of the Administration was
described as leaving to each publisher decision on brinzing them under a
work-week limit. Some already have Instituted a five-day-week or similar
arrangement, others oppose it. If publishers wish to take the stand that
their reporters are professional men, It was indicated to-day there was
little prospect that the Administration would feel called upon to interfere.
That left for strict, mandatory application of the agreement terms, the
forces of newspaper business offices, which would be treated like those of
any other business establishment.
Hearings on Paper Code to Be Held Aug. 7.
Hearings on the Code of Fair Competition submitted to
the NRA by the advisers' committee of the American Paper
Manufacturers' Association will be held at Washington on
Aug. 7 under the direction of Deputy Administrator R. B.
Paddock, according to an NRA announcement on July 27.
The Code includes provisions for the immediate adoption of
a 40-hour week, minimum wages of 30c. an hour, the gdoption of the Bureau of Standards specifications for quality of
product throughout the industry, and forbids child labor. In
our issue of July 22 (page 590), we referred to the newsprint
Code submitted to the NRA by the newsprint industry.
Heads—orSteerIndustry, at Hearing Before NRA on
Proposed Code, Voluntarily Withdraw Company
Union Stipulation but Retain Open Shop—
Secretary Perkins and William Green Favor Shorter
Hours and Higher Pay—R. P. Lamont Explains
Labor_Provisions—Code Taken Under Advisement.
Public hearings on the proposed Code of Fair Competition
for the iron and steel industry opened in Washington on
July 31 and were completed the same day, after which the
Code was taken under advisement by the NRA. Submission
of the Code by the steel industry on July 15 was described
in our issue of July 22, pages 589 and 590. The fact that
the public hearings occupied only one day was ascribed principally to the voluntary withdrawal by the industry of its
company union stipulation, since it had been anticipated that
this would be the principal point of contention. Despite this
action of the employers, however, representatives of the
American Federation of Labor said they were still dissatisfied with the amended agreement and insisted that after the
Code had been put into effect by the President the various
units within the American Iron and Steel Institute could proceed to re-establish the company union system. As amended
by the industry, the section of the proposed Code dealing with
the bargaining powers of labor reads:
That employees shall have the right to organize and bargain collectively
through representatives of their own choosing, and shall be free from the
interference, restraint or coercion of employers of labor, or their agents, in
the designation of such representatives or in self-organization or in other
concerted activities for the purpose of collective bargaining or other mutual
aids or protection;
975
That no employee and 110 one seeking employment shall be required as a
condition of employment to join any company union or to refrain from joining, organizing or assisting a labor organization of his own choosing.
The plants of the industry are open to capable workmen, without regard
to their membership or non-membership in any labor organization. The
industry firmly believes that the unqualified maintenance of that principle
is in the interests of its employees.
Robert P. Lamont, President of the American Iron and
Steel Institute, yester day (Aug. 4) made public a communication to the NRA, in which he said that the adherents of
the steel code have already gone beyond anything that can
be justified by present conditions in connection with maximum hours of labor and minimum wage scalcs. Dethils of
the communication will be given in a subsequent issue of this
paper, but a significant passage read:
We deem it unnecessary to reply to what was said on this subject or
to add to the facts stated and the statistical data furnished by Mr. Lamont.
We do desire again to emphasize that practical, not theoretical. questions
are involved and that they cannot be solved merely by mathematical computation, since there Is probably no industry in the country involving so
many variable factors as the steel industry.
We call attention to the fact that in accomplishing the great purpose
of the National Recovery Act, the members of the code have already
gone beyond anything that can be justified by present conditions. They
can justify themselves to their stockholders only by the realization of the
hopes aroused by the efforts of the National Administration. They cannot
go further.
The principal testimony given during the public hearing
came from Robert P. Lamont, President of the American Iron
and Steel Institute and former Secretary of Commerce;
William Green, President of the American Federation of
Labor, and Frances Perkins, Secretary of Labor. Mr. Lamont, speaking in behalf of the employers, explained the
Code and its labor provisions, and later announced the withdrawal of the company union clause. Mr. Green submitted
a proposed substitute Code, in behalf of the Federation, while
Secretary Perkins argued for a more liberal policy both as
to maximum hours and minimum wages. A description of
the hearing as contained, in part, in a Washington dispatch
of July 31 to the New York "Herald Tribune," follows:
Early in the hearing the question of company unions was brought to the
front when General IIugh S. Johnson, the Recovery Administrator, declared
that provisions in the Code making membership in such organizations prerequisite to employment would be in conflict with the law, and Robert P.
Lamont, President of the Iron and Steel Institute, held a hasty conference
with his directors and agreed to their elimination.
In announcing this change, Mr. Lamont stated that the steel industry was
united in holding that the company union was the most satisfactory method
of dealing with labor and that the elimination of Section 2 "does not imply
any change in the attitude on the part of the industry that our system is best
for the employees them-selves."
The Code as submitted indorses collective bargaining as the most feasible
method of maintaining proper relationship between employers and employees,
but it was pointed out that the law specifically prohibited the designation
of any particular labor organization in the codes. In fact, it is considered
quite clear that the law indicates what is tantamount to an "open shop" for
all industries subjecting themselves to codes.
Citing the law, General Johnson declared: "While it is probably a borderline case, it seems to me that matter is inappropriate in that particular
section of this Code, which contains the mandatory provisions of the recovery
law." At this point Mr. Lamont stated that the section had been placed in
the Code to express the belief of the industry that the open-shop principles
which have prevailed throughout the industry for many years should be
maintained and that the principles of collective bargaining should be established and maintained in a form which experience has shown to be satisfactory
to the industry and its employees.
"We felt that it was desirable," Mr. Lamont added, "to state frankly our
position in order to avoid the possibility of any misunderstanding by anyone. In including Section 2 of the Code, however, we did not intend to
inject into this hearing for consideration any question as to the merits of the
employee representation plans referred to in the section or of any other
method of collective bargaining I believe that the section can be omitted
from the Code without materially altering it."
Miss Perkins Congratulates Lamont,
Mr. Lamont then requested a recess, following which he returned with the
announcement that withdrawal of the controversial labor section had been
approved by the leaders of the industry, at which Secretary Perkins rose to
extend her thanks and congratulations "for withdrawing this section so that
it is no longer a matter of controversy." "This action," she said, "attests
the principles of democratic government, which have been on trial for 150
years, but which have withstood all such trials."
Early in the afternoon session Mr. Lamont again agreed to an important
concession to labor when he announced that representatives of various interests had agreed to a minimum wage scale of 30c, an hour in the Birmingham
and other Southern districts instead of 27c, an hour and 23c, an hour,
respectively, as prescribed for those districts in the Code as originally
submitted.
Mr. Green presented the NRA with an entirely different Code proposal
in so far as hours of work and rates of pay are concerned. Specifically, he
demanded a 30-hour week, an $18 a week minimum wage, immediate increases
for more highly paid workers to approximately 70% of their 1929 wages,
restriction against the employment of persons under 18 years of age in
manufacturing and mechanical work, and the creation of an advisory council
on industrial relations to be made up of seven members, three representing
the institute, three representing the Fedration, and the Chairman to be
appointed by the President of the United States.
40-Hour Week Opposed.
Miss Perkins appealed to the NRA to lower the 40-hour week standard
set by the Institute, and declared that there was need for limiting the
number of hours a day as well as those for a week. She said that during
her recent visit to the steel mills she had talked with many workers, who
were unanimous in their statements that "six hours a day is enough, lady,"
Financial Chronicle
judgment" coincided with
and added the observation that this "emotional
the 40-hour week
results of statistical analysis. She declared that under
and the 12-hour
plan of the employers such "evils as the seven-hour day
"The 40-hour week,"
day in some occupations" will be permitted to stand.
unduly
stimulating
she said, "will intensify irregularity of unemployment by
little work during
long hours during some months, to be alternated by very
40 hours.
other months, so that the average may be kept down to
be will have to be
"Just what the hours per week and per day ought to
employed that have
determined by the number of iron and steel workers now
by the technical
to be reabsorbed in the industry, and to a certain extent
to shorten the hours
processes of the industry. But it should be possible
provision for continuous
both of the day and of the week and still make
alternating shifts
operation of machinery where that is necessary through
six hours a day for six
of workers. Thirty-six hours per week, which is
offer interesting
days, or 30 hours, which is six hours a day or five days,
persons—one or two
opportunities for re-employment of a large number of
necessarily continuous,
roving shifts in the portions of the industry which are
and this will of itself make for additional employment."
150,000 1Vorkers to Be Absorbed.
be sufficient to take
She added that the reduction in hours of work must
of work.
care of scme 150,000 iron and steel workers still out
have befallen iron and
Miss Perkins reviewed at length the disasters which
steel workers since 1929.
Census," she said,
"According to figures available in the Bureau of the
the manufacture of iron
"425,000 wage earners were employed in 1923 in
was a decline from this
and steel that is to be covered by this Code. There
the number rose again
number in subsequent years to 389,000 in 1927, and
between 1923 and 1929
to 420,000 in 1929. During the prosperous period
Reserve Board index
employment in iron and steel went down, but the Federal
in 1923.
shows that production in 1929 was 23% higher than
in 1929 than in 1923,
"The total wages paid to the employees was greater
in wage payments. Paybut in the intervening years there was a reduction
$618,000,000 in 1927, and
rolls were reduced from $627,000,000 in 1923 to
then rose to $731,000,000 in 1929.
wages have dropped
"Since 1929, as is well known, both employment and
in March 1933,
disastrously. The low point in employment was reached
index at 21.5,
when the index of employment stood at 53.2 and the payroll
in 1929 were
as compared with 1929. Almost half of the workers employed
year 1932 were
unemployed in March 1933 ; and total earnings for the whole
than 75%.
$190,000,000, a reduction of $541,000,000 from 1929, or more
started upward.
"Beginning with April, employment and wage payments
and the pay1929,
of
By June 1933 the employment index had risen to 63%
through the
roll index to 36% of 1929. This upward movement continued
employees are
first part of July, but more than 150,000 of the industry's
the first half of 1933
still out of work. And the total loss of wages during
offset by lower
as compared with 1929 was $298,000,000. This loss may be
living costs amounting to something over 20%."
21-Zone Plan Opposed.
and insecurity
Miss Perkins characterized this as a picture of irregularity
a hazard not only to
of employment, earnings and purchasing power, that is
and to the
normal family life for the workers in the iron and steel industry
industry itself
community life of the cities in which they live, but also to the
phenomenon,"
and to the economic stability of the entire nation. "This is no
steel workers
she declared. "Between 1919 and 1921 the number of iron and
the wages
and
employed dropped from 418,000 to 254,000, or almost 40%;
paid out by the industry dropped 50%."
to
The Labor Secretary was sharply critical of the employers' proposal
"If
divide the country into 21 zones, as regards iron and steel production.
only
separate wage zones are needed," she said, "they should be established
should be
after the most careful research; and the number of such zones
substantial
strictly limited to a very few that are dictated by essential and
been
differences, and not by the mere fact that some employers may have
than
in a position to press the ccnimon labor rate down a few cents lower
others. If this is not done one of the worst forms of unfair competition
cut
may be perpetuated, namely, that which is brought about by those who
labor rates.
price
unfair
"An industry that has been given the privilege of preventing
wage
competition must assume the responsibility also of preventing unfair
competition."
the
Miss Perkins observed that the 25c. and 27c. wage minimums for
Negro
Southern districts were presumably based on the predominance of
their
labor in those districts. Negroes are also consumers, she declared, and
purchasing power is needed to provide markets for the products of agriculsubseLamont
Mr.
which
ture and industry. These were the wage minimums
quently agreed to increase to 30c. an hour.
"Equally important is the necessity of making the minimum rate of pay a
weekly wage rather than an hourly rate," Miss Perkins said. "From the
point of view of the management of an industry hourly rates are important as
measures of unit costs. But from the point of view of the wage earners, their
families and the purchasing power of the nation, it is the normal weekly
earnings that are important. The hourly rate may be high, but considering
the number of hours worked the rate per week may be low. It is essential,
therefore, in order to keep the purchasing power of the wage earners constant
that the minimum wage be fixed as a week's earnings. And we should be
looking forward to the time when minimum wages and consequently spending
power will be fixed on the basis of annual earnings which will greatly
stabilize our industrial life.
"The whole matter of wages is bound up with the economic status of the
communities in which the industry is located. In the Youngstown district,
for example, sonrte steel communities have had more than a third of their
population dependent on public charity for support. The burden on the
taxpayers became too great, and the commercial life of the communities, as
well as governmental functions, were paralyzed. In other communities, steel
companies have shown a commendable public spirit by setting up relief departments of their own, and thus relieving taxpayers, landlords and tradesmen of the burden of supporting unemployed steel workers.
"But where part or all of this relief has been granted in the form of loans,
a burden of indebtedness has been built up which threatens to retard the
recovery of steel communities, and the restoration of normal family life for
the steel workers. A moratorium or a forgiveness of these relief debts
seems to me a necessity of the situation. For if the employees who are to
be returned to industry by the influence of the NIRA have to pay any substantial part of their earnings back to their employers to meet their debts,
then little purchasing power will be left to them with which to stimulate
revival and employment in other industries, and the restoration of normal
life for themselves, their families and the communities in which they live
will be long postponed."
Mr. Green expressed himself as not wholly satisfied with the action of
Mr. Lamont in withdrawing the company union clause. Contrary to state-
Aug. 5 1933
this means of
ments of the employers that the workers are satisfied with
to them.
collective bargaining, he said, they actually are strongly opposed
He appeared to doubt the sincerity of the Institute, stating: "If I understand this declaration, it means notwithstanding withdrawal of the section,
to go
the industry is advising the Administration that it is their purpose
back and apply that section to the Code."
the
that
section
the
of
It was clear following Mr. Lamont's withdrawal
employers had by no means changed their attitude toward the desirability
of company unions. As one steel man present expressed it, "The law does
not specify that we have to deal with a union affiliated with the American
Federation of Labor, and we intend to continue tO encourage the sort of
union which we believe functions in the best interests of the industry and
employees alike."
It was pointed out that the company unions gave no support, financial or
otherwise, to the American Federation of Labor. Mr. Green declared that
the prospect of the companies continuing to promote company unions was
highly objectionable to labor. "If a new deal is on," he said, "it should
be a new deal for labor as well as industry. The workers must be free to
organize as they wish, free to designate their own representatives to deal
with the employers."
Urges Advisory Council.
Mr. Green laid particular stress on his proposal for an Advisory Council
on Industrial Relations. "If the industry will join in the creation of such a
Council," he stated, "on its part labor will, without argument, leave to the
judgment of the Administrator of the NIRA what wages should be paid and
what hours should be worked in the industry, pending a careful, impartial
study of the whole situation and a resulting recommendation to the Administrator by this Advisory Council.
"Such a study, which should be completed within a month or six weeks of
the date of the appointment of the Council, would greatly reduce points of
tension and conflict and would pave the way for even more constructive work
in the future. Most significant of all, it would be an earnest of a new mental
attitude, on the part of both employer and worker, in attacking their joint
problems of industrial relations."
The remainder of the hearing saw a wide range of witnesses, including
small producers and manufacturers, representatives of employers' associations, labor organizations and steel workers. One of the workers, W. II.
Crawford, of Birmingham, said he had come at the instance of other workers
in that district to tell the Administration they were not satisfied with the
company union plan. Mr. Green said that Crawford had obtained a leave of
absence from his foreman, but that on the discovery of his errand he had
been threatened with dismissal. Mr. Green asked and received assurance
that the NRA would take steps to be sure the witness did not lose his job.
Prior to the public hearing on the tentative steel Code,
Secretary of Labor Frances Perkins, on July 28 and 29,
visited several steel plants in Pittsburgh and Baltimore, and
talked with a number of workers in the industry hi an effort
to learn their reaction toward the hours of labor and minimum wage scales proposed in the agreement. On July 29,
after talking with employees of the Sparrow Point plant of
the Bethlehem Steel Co., at Baltimore, Miss Perkins said
that the proposed 40c, an hour minimum would represent a
substantial improvement over current rates, but that she believed that workers were entitled to the comforts and
security of $30 to $35 a week.
NRA Approves Special Code for Retail Stores, Affecting
Nine Groups with 6,000,000 Employees—Substitute Wage and Hour Provisions Inserted in
General Agreement-48-Hour Week for Food
Trade-40-Hour Week and Minimum of $14 Pay
Fixed for Dry Goods— Estimate&Potential Reemployment of 1,100,000 Persons.
Nine of the largest retail trade groups in the United States
agreed on July 31 on modifications of President Roosevelt's
blanket re-employment Code, as it affects them and their employees, and these modifications were accepted by General
Hugh S. Johnson, Recovery Administrator. As a result of
this agreement, it was said that most of the 2,000,000 retailers in the country, employing a total of 5,000,000 persons,
would put the provisions of the agreement into effect immediately. It was estimated by the NRA that this action might
result in the re-employment of 1,100,000 persons and the addition of $900,000,000 to the annual payroll. The retail
groups included are department stores, dry goods retailers,
specialty shops, retail grocers, clothiers, hardware stores,
furniture, shoe and mail order supplies. The substitute
agreement accepted and approved on July 31 will be operative
pending the submission and approval of definite codes for
the various retail groups. It permits retail grocers, druggists and food stores to employ workers 48 hours a week and
to remain open at least 52 hours a week. Minimum wages
are set at $14 a week in cities up to 250,000 population;
$14.50 a week in cities between 250.000 and 500,000, and $15
a week for cities of more than 500,000 population. In other
retail stores, including those selling hardware, clothing,
furniture, shoes and mail order supplies, minimum wages are
specified as $13 a week in cities up to 100,000; $13.50 a week
in cities between 100,000 and 503,000, and $14 a week in
cities of more than 500 000 population. For this group maximum hours are fixed at 40 a week. In both groups, minimum wages in the South are to be $1 less than in the North.
Exception as to hours is made for a short period during the
Christmas holidays. In making public the, new program of
the retailers, General Johnson said:
Volume 137
Financial Chronicle
It has been repeatedly announced that there are no blanket exceptions to
the Presidential agreement, but when an industry has submitted a Code of
Fair Competition, Section 13 of the Presidential re-employment agreement
authorizes the Administrator to accept provisions of the Code as a sufficient
compliance with the agreement during the period between the submission
of the Code and final action by the President.
But it must be clearly understood that such an exception does not in the
slightest degree obligate the Administrator to approve said provisions on the
final hearing. In each case in which such modification is permitted the
hearing will be called for at a date as early as possible, and the Code in final
form, when approved by the President, will supersede the agrement.
Among the national grocery groups which accepted the substitute plan were:
National
National
National
National
Association of Retail Grocers of the United States.
American Wholesale Grocers' Association.
Retailer-Owned Wholesale Grocers' Association.
Grocery Chain Store Association.
The miscellaneous stores were represented by the following groups:
National Furniture Association.
National Retail hardware Association.
National Mail Order Association.
National Association of Retail Clothiers and Furnishers.
National Retail Dry Goods Association.
National Shoe Retailers Association.
The text of the Code for the furniture, hardware, mail
order, clothiers and furnishers, department stores, specialty
shops, shoe and dry goods retailers follows:
On and after the effective date of this Code no individual or organization
selling at retail shall work any employee (except executives whose salaries
exceed $35 per week, or registerd pharmacists or other professional persons
employed in their profession, or outside salesmen, and except outside delivery
men and maintenance employees, who may be employed 48 hours weekly or
more, if paid time and one-third for all hours over 48 hours weekly) for
more than 40 hours per week, excepting at Christmas, inventory and other
peak periods employees may work 48 hours per week for a maximum of not
to exceed three weeks in each six months.
And not to reduce the hours of any store or service operation to below 52
hours in any one week, unless such hours were less than 52 hours per week
before July 1933, and in the latter case not to reduce such hours at all.
The maximum fixed in Paragraph 3 (a) (of the President's agreement)
shall not apply to employees in establishments employing not more than two
persons in towns of less than 2,500 population, which towns are not part of a
larger trade area.
On and after the effective date of this Code, retail stores shall establish
minimum weekly rates of wages for the retail trade for a work week specified
in Section 3 (A) [of the President's agreement] as follows:
Within cities of over 500,000 population [by reference to the 1930 Federal census], or in the immediate trade area of such cities, at the rate of
$14 per week.
Within cities of from 100,000 to 500,000 population [by reference to the
1930 Federal census], or in the immediate trade area of such cities, at the
rate of $13.50 per week.
Within villages, towns or cities with a population of 2,500 to 100,000 [by
reference to the 1930 Federal census], unless they are included in a trade
area as defined by Clause (A) or (B), at the rate of $13 per week.
The minimum wages that shall be paid by employers in the retail trade
to any of their employees shall be at the rate of $1 per week less in the
Southern section of the trade than the rates specified in Paragraphs (A),
(B) and (C) of Section (4).
The South is defined as the following States: Virginia, West Virginia,
North Carolina, South Carolina, Georgia, Florida, Kentucky, Maryland,
District of Columbia, Tennessee, Alabama, Mississippi, Arkansas, Louisiana,
Oklahoma, Texas.
In the entire United States, in villages, towns, and cities under 2,500 population, to increase all wages by not less than 20%, provided that this shall
not require wages in excess of $11 per week.
Except that on and after the effective date of this Code, union employees
between the ages of 16 and 18 years, inclusive, with less than six months'
experience in any retail store, shall be paid at the rate of $2 less for a work
week as provided in Section 3-(A) [of the President's agreement], and
except that apprentice employees more than 18 years of age with less than
six months' experience in any retail store shall be paid at the rate of $1
less for a work week as provided in Section 3-(A), provided that the minimum shall not be less than at the rate of $11 per week.
Except for the changes specified above, the provisions of
the President's general agreement apply to the industry.
The Code accepted for grocery and food stores also contains
the language of the President's agreement except for the
following amendments:
ARTICLE I.
The term "food and grocery distributors" as used in this Code shall mean
and apply to and include any person, firm, corporation, partnership, association and any others wholly or partially performing the functions of wholesale and/or retail distribution (except the farmer as a producer, nor shall
it be applicable to strictly manufacturing operations) engaged in the business of assembling, distributing and selling raw and/or prepared foods, and
merchandise entering into or used in connection with or in the keeping,
processing or preparation of the same for use or consumption ; and such other
merchandise as is by custom classified and commonly referred to as part of a
grocer's stock.
ARTICLE III.
Section 1. All employees of food and grocery distributors shall have the
right to organize and bargain collectively through representatives of their
own choosing, and shall be free from interference, restraint or coercion of
employers of labor, of their agents in the designation of such representatives,
or in self-organization, or in other concerted activities for the purpose of
collective bargaining, or other mutual aid or protection.
Section 2. No employees and no one seeking employment in the food and
grocery distributing trade shall be required as a condition of employment to
join any company union or to refrain from joining a labor organization of
his own choosing.
Section 3. All members of the food and grocery distributing trade shall
comply with the maximum hours of labor and the minimum rates of pay
herein set forth.
977
ARTICLE V.
This agreement in all respects subject to (1) the provisions of the Agricultural Adjustment Act and (2) the Executive order dated June 26 1933,
by which the President delegated to the Secretary of Agriculture certain
of his powers and functions under the NIRA.
ARTICLE VI.
Section 1. The maximum hours of labor shall be 48 hours per week and
no one shall be employed more than eight hours in any 24-hour period, excepting on the day preceding a legal holiday and on an additional 12 days
(when the maximum hours in any one day shall not exceed 10 hours) in any
six months' period.
Section 2. The minimum hours of any store or service operation shall
be 52 hours per week, providing, however, that where store or service operations were less than 52 hours per week before July 1 1933 this minimum
requirement shall not apply nor shall such hours be reduced.
Section 3. The maximum hours fixed in the foregoing paragraphs shall
not apply to employees in establishments employing not more than two
persons in towns of less than 2,500 population, which towns are not a part
of a larger trade area, nor to employees in managerial or executive capacity
who now receive more than $35 per week, nor to outside salesmen or deliverymen, nor to employees on emergency maintenance and repair work, nor to
very special cases where restrictions of hours would unavoidably reduce production, but, in any such special case, at least time and one-third shall be
paid for hours worked in excess of the maximum.
Section 4. The minimum wage for all classes of employees shall be as
follows:
Not less than
(A) $15 per week in any city of over 500,000 population, or in the immediate trade area thereof,
Nor less than
(B) $14.50 per week in any city between 250,000 and 500,000 population,
or in the immediate trade area thereof,
Nor less than
(C) $14 per week in any city of between 2,500 and 250,000 population,
or in the immediate trade area thereof.
(D) Employees with less than six (6) months' experience in this trade
may be paid $1 per week less than wages hereinbefore prescribed.
(C) The minimum wages which shall be paid by employers in this trade
to any employees shall be at the rate of $1 per week less in the Southern
section of the trade than the rates specified in Paragraphs A, B, C and D
hereabove.
The South is defined as the following States: Virginia, West Virginia,
North Carolina, South Carolina, Georgia, Kentucky, Tennessee, Alabama,
Mississippi, Arkansas, Louisiana, Oklahoma, Texas, Maryland and District
of Columbia.
(f) In towns of less than 2,500 population all wages shall be increased by
not less than 20%, provided that this shall not require wages in excess of
$12 per week.
(g) Population for the purpose of this Code shall be determined by reference to the 1930 Federal census.
(h) Not to reduce the compensation for employment now in excess of
the minimum wages hereby agreed to (notwithstanding that the hours
worked in such employment may be hereby reduced) and to increase the pay
for such employment by an equitable adjustment of all pay schedules.
James A. Moffett Resigns as Senior Vice-President of
Standard Oil Co. of New Jersey to Accept Membership on Advisory Board of NRA—Statement by
1, Walter C. Teagle, Explaining Reputed Controversy
Which Preceded this Action.
James A. Moffett, Senior Vice-President and member of
the Board of the Standard Oil Co. of New Jersey, announced
his resignation from these positions on July 28, following
what newspaper reports described as a prolonged "controversy" with Walter C. Teagle, President of the company. It
was said that Mr. Moffett, a close friend of President Roosevelt, had been offered a position on the NRA Advisory Board
of nine members. Mr. Teagle was already Chairman of this
Committee, and it was indicated that he objected to Mr.
Moffett's accepting membership on the ground that two
Standard Oil Co. officials should not be on the Advisory
Board. On July 30 Mr. Teagle issued a statement in which
he explained his attitude in the matter. His statement
follows:
I would like the public to know that the Standard Oil Co. (New Jersey)
is anxious to do all in its power to cairy out the policies of President Roosevelt, which seek to lift us out of this depression. For more than a year now
I have been engaged in an attempt to persuade employers that we must do
our part in spreading employment. But many of the difficulties encountered heretofore have now been surmounted by the President's plan embodied
in the NRA.
As Chairman of the Advisory Board of the Industrial Advisory Committee
I have had an opportunity to see at first hand the splendid way in which
General Johnson is tackling the extraordinary problems of the hour. It
seems to me that it behooves every company to make whatever sacrifices
are necessary to brinr about the success of the national recovery plan. This
has been and always will be the spirit of the Standard Oil Co. (New Jersey).
Now with respect to the resignation of James A. Moffett as Senior VicePresident of our company cn Friday last [July 28]: This is a matter of
great regret to us all in the Standard Oil Co. (New Jersey), but we realize
that in times like these a request to any of our men to serve the Government
is equivalent to a command. Our regard for Mr. Moffett is evidenced by the
fact that, when on June 6 last he wrote me submitting his resignation, my
associates and I endeavored to dissuade him from taking such a course.
Last week, however, when Mr. Moffett was invited to become a member of
the Industrial Advisory Board, it seemed to me that the public might misunderstand the presence, on a Board of only nine members, of two officials
of the same company, and this led to the acceptance of Mr. Moffett's
resignation.
If (as reported in the press to-day) Mr. Moffett is to become the Administrator of the oil industry, on behalf of the Government, he can be assured
of the full co-operation and cordial support of the Standard Oil Co. (New
Jersey) as well as those of us who have been personally associated with hitt
in the past.
978
Financial Chronicle
Revised Shipbuilding Code Provides 32-Hour Week
for Naval Construction and Average of 36 Hours
on Private Work—Minimum Wages Set at 35 Cents
an Hour in South and 45 Cents in North—Code
Is Approvei By President.
After several days of controversy between representatives
of employers and of labor, a revised Code of Fair Competition
for the shipbuilding and ship repairing industry, representing a compromise pact accepted by both parties to the dispute, was submitted to the NRA on July 24. It became effective on July 26, when it was signed by President Roosevelt.
The compromise establishes a 32-hour week on Navy construction and an average of 36 hours on private work, with minimum wages for common labor set at 35c. an hour in Southern
yards and 45c. in Northern plants. In the original Code submitted on July 12 the same minimum wages were provided
for Southern yards, but a minimum of 40c. was set for the
North, while a 40-hour work week was specified. Administrator Hugh S. Johnson, however, refused to accede to the
40-hour stipulation, and the shipbuilders eventually agreed
to the shorter working week. The labor representatives at
the hearings in Washington had advocated a 30-hour week,
but appeared content with the compromise plan finally
formulated.
The shipbuilding industry submitted its initial Code to the
NRA on July 12, and public hearings on the Code began on
July 19, with shipbuilders stressing the necessity of a 40-hour
week. The shipbuilders had specifically requested that
action on their Code be expedited so they might bid July 26
on the new naval building program involving $238,000,000.
The original Code provided for a 40-hour work week, with
minimum wages of 35c. an hour in the South and 40c. in
other sections of the country. The Code was submitted by
groups said to represent 80% of the industry. The agreement included a provision for price-fixing which provided
that "to accomplish the purpose contemplated by this Act"
it should be held unfair competition to sell below "a reasonable cost" determined by the Associations submitting the
Code. The agreement was accompanied by a letter signed by
H. Gerrish Smith and Joseph Haag Jr., both of New York,
and James W. Barnes, shipbuilding representative of Washington. Referring to the 30-hour week proposed by the naval
construction authorization, as against the 40-hour week specified in the Code, the letter said that the former "does not
seem in the public interest," as it would "unduly increase its
cost."
In the first bearings on the proposed code, held on July 19,
under the direction of A. D. Whiteside, Deputy Administrator, heads of several large shipbuilding plants declared
that a work basis of not less than 40 hours is essential to the
shipbuilding Industry. A minimum 30-hour week, they testified, would add not less than $120,000,000 to the cost of the
naval building program, would raise repair bills of governmental navy yards by at least $40,000,000 annually, and
would advance the cost of merchant marine building by at
least 33%. Additional details of the hearing follow, as
quoted from Washington ad vices to the New York "Times":
General Hugh S. Johnson, National Recovery Administrator, addressing the
shipbuilders, described the hearing as an "emergency" due to the situation
created by the dumping of the great naval construction program into the lap
of the industry, which was, he added, as unexpected as it was welcome to
the "sorely pressed" business.
The first speaker to pass judgment on the Code was H. Gerrish Smith,
President of the National Council of American Shipbuilders. He pointed out
that the Code was offered by the shipbuilders of the Atlantic, Pacific, Gulf
and Great Lakes. The maintenance and operation of the American merchant
marine was constantly in the mind ot those who had drafted the Code, he
said, while the naval construction program, now about to take form, was
another phase of the situation which had received careful consideration.
"The shipbuilding industry," said Mr. Smith," "is at a low ebb, both in
shipbuilding and in repair. On the repair side it is affected by the general
conditions in shipping, which have been affected by the generally depressing
conditions of business. On the merchant marine side, this means that the
volume is small.
"The industry feels that the wage provisions in the Code to increase minimum wages will accomplish the purpose of the NIRA without causing any
substantial increase in merchant marine construction costs.
"In the matter of work hours, the code provides for a basic week of 40
hours determined on an average time of employment over a period of six
months. The industry, the repairing end in particular, is of the emergency
or special type on which only one shift can work, and it is necessary either
to work occasionally for longer hours or to delay seriously the progress of
the work as a whole.
"While in general the work week will not exceed 40 hours, the Cade
guarantees that over a period of six months the average will be kept within
the 40-hour limit."
30-Cent Basis Urged for South.
Homer L. Ferguson, President of the Newport News Shipbuilding & Dry
Dock Co., discussed the wage provisions. The falling off in labor earnings
as a result of the depression represents, he said, the loss of four or five of
the eight hours' work, and also reflects comparatively recent reductions in
base rates of 10 to 15%.
Aug. 5 1933
Mr. Ferguson said he was convinced that 30c. on hour and a 40-hour week
for common labor would be fairer to the Southern end of the industry than
the 35c.-an-hour base carried in the Code. The rate for the Northern yards
is 40c. per hour.
Asked about the weekly wage loss in the yards, as disclosed by the statistics supplied the Administration, Mr. Ferguson explained that these losses
are to a substantial degree due to a spreading of work in order to afford
employment for a maximum number of persons.
Lawrence V. Spear, Vice-President of the Electric Boat Co., declared that
the hours proposed in the Code will afford complete relief of unemployment
in the industry. A 30-hour basis, he said, would "increase the cost of naval
work, 60% completed as of June 1, $86,199,000 ; it would increase the repair
bill of the navy yards by at least $40,119,400, and would add to the new
program an additional burden of not less than $120,353,000. All of this in
addition to the increased cost of materials."
Bardo Tells of Handicaps.
Clinton L. Bardo, President of the New York Shipbuilding Co., said that
plants have "continued to exist only under the most serious handicap of curtailment of business and difficulty in surviving financially."
As for equipment, the private yards, Mr. Bardo said, are ready to handle
any business, no matter how heavy the volume. Ile recalled the fact that
only two sea-going merchant ships are under construction in American yards.
Rear Admiral Emory S. Land, Chief of the Naval Bureau of Construction
and Repair, speaking for the Navy, agreed with the private builders that the
30-hour week would not work except at a greatly increased cost to the
Government and the merchant marine.
With the resumption of the hearings on July 20 a deadlock
developed when the American Federation of Labor unions
demanded a maximum 30-hour week, a minimum wage of $25
weekly for common labor, and wide latitude for the unions.
Representatives of the Federation offered a substitute Code,
the adoption of which, according to representatives of the
shipbuilding industry, would make impossible the completion
of the naval construction program within the $238.000,000
limit set by President Roosevelt. The new Code was submitted by J. A. Franklin in the name of 13 of the most powerful unions in the country, all members of the Metal Trades
Department of the Federation of Labor. Its text follows:
1. No employee, except members of the supervisory staff, shall be employed
in excess of 30 hours or more than five days in any one calendar week, nor
more than six hours in any one day.
2. No overtime shall be permitted, except for the maintenance and repair
personnel, and then only in cases of extreme emergency. All time worked
in excess of scheduled number of hours shall be paid for at not less than
double time.
3. The minimum rate of pay for employees covered by this Code shall be
$25 per week. This mininrum wage is to be guaranteed regardless of whether
the employee's compensation is otherwise based on a time rate or upon a
piece-work performance. The existing amounts by which wages in the higherpriced classes of workers exceed wages in the lowest paid classes shall be
maintained; and the wage rates under the 30-hour week shall not be less than
those paid for the regular full-time weekly hours previously worked.
4. Any system of subcontracting work by which an employee undertakes
to do a piece of work at a specified price and engages other employees to
work for him is considered an unfair practice and prohibited by this Code.
5. No new apprentices shall be employed in the industry until the existing
surplus of unemployed labor has been absorbed in reasonably steady employment.
6. No minor under the age of 16 years shall be employed or permitted to
work in any shipyard or ship repair plant.
7. Employees shall have the right to organize and bargain collectively
through representatives of their own choosing and shall be free from interference, restraint or coercion of employers of labor, or their agents, in the
designation of such representatives or in other concerted activities for the
purpose of collective bargaining or other mutual aid or protection. No employer or any agent of an employer shall take any part in organizing the
employees in his plant or plants in competition with, or as a substitute for
any labor organization existing in the industry, or any new labor organization that the employees may hereafter deem it desirable to form.
8. No employee and no one seeking employment shall be required as a
condition of employment to join any company union or to refrain from join.
ing, organizing or assisting a labor organization of his own choosing; and
no employee shall be discharged, disciplined or suffer any discrimination
whatsoever on account of membership in a labor organization, or activity in
organizing or conducting the affairs of such an organization. Nor shall
there be any discrimination in hiring any workers on account of having
reached any age limit if the worker is otherwise competent and efficient.
9. Employers shall comply with the maximum hours of labor and the minimum rates of pay and other conditions of employment approved or prescribed
by the President.
10. To assist the NRA in the execution and enforcement of this Code,
there shall be established a Joint Standing Committee equally representative
of the trade associations and the labor organizations in the industry, which
Committee shall have the following duties:
(a) To recommend such changes in or additions to the provisions of this
Code as experience with its operation may show to be desirable.
(b) To consider complaints as to violations or infractions of the Code and
to recommend proper remedies therefor.
(c) To recommend measures for carrying out the policy stipulated in subsection (b) of Section 7 of the NIRA with respect to establishing "by
mutual agreement, the standards as to maximum hours of labor, minimum
rates of pay, and such other conditions of employment as may be necessary
in the industry or subdivision thereof."
(d) The recommendations of this Committee, when approved by the President, shall be considered to be a part of this Code and have the same force
and effect as the provisions above stipulated.
In an effort to break the deadlock between representatives
of labor and the industry, Hugh S. Johnson, Recovery Administrator, on July 22 submitted a compromise proposal calling
for a 32-hour week, but the compromise at that time was
flatly rejected by the shipbuilders, who Insisted that it practically met all the labor demands and was far too low, and
that it would "wreck the industry."
Volume 137
Financial Chronicle
United States Opens Bids to Construct 21 Battleships—
Largest Single Program in Nation's History to
Be Finished in Three Years—$86,000,000 to Be
Spent in 1933, with Work Starting in 60 Days.
The largest formal opening of bids for naval construction
in the history of the United States took place at the Navy
Department on July 26, when bids for construction of 21 vessels were opened. Proposals were received for the construction of 16 ships in the Navy's $238,000,000 public works program authorized by the NIRA, as well as for five additional
vessels to be built with funds carried in the Naval Appropriations Act. The contracts were opened several hours before
President Roosevelt had signed the shipbuilding Code providing for shorter hours and higher wages, as described elsewhere in these columns. Secretary Swanson said that the
new Code would increase the cost of the construction plan,
although he did not estimate how large the advance would be.
He added, however, that the Navy would ask the Public
Works Administration for funds to meet the increase. The
bids were described as follows in a Washington dispatch to
the New York "Times," on July 26:
The bids were divided into the following classes:
From public works funds: Two 20,000-ton aircraft carriers, one 10,000ton cruiser, 6.1-inch guns, light ; four 1,850-ton destroyers, seven 1,500-ton
destroyers, two 1,400-ton submarines.
From current appropriations: One heavy 10,000-ton cruiser, 8-inch guns
[under the terms of the London treaty this ship cannot be laid down until
after Jan. 1 1934] ; four 1,850-ton destroyers.
The low bidders will not necessarily obtain contracts, and it will probably
be several weeks before the bids are thoroughly investigated and technical
matters approved by several Navy bureaus. Haste has been ordered, to put
idle shipbuilders to work.
The bids were principally submitted in two forms, outright offers for
from one to four ships, and separate alternate plans which would provide for
additional cost in the event labor and materials advanced in price, or for reduced costs in the event labor costs and incidentals dropped. The going into
effect of the shipbuilding Code, however, was said to mean that the outright
offers would be accepted.
Mr. Swanson said he believed work would be under way in 60 days in
private shipyards. Several navy yards are already "stepped up" to meet the
new construction program.
The Newport News Shipbuilding & Dry Dock Co. bid lowest for the two
aircraft carriers with an offer of $24,700,000 for one and $23,000,000 each
for both. It made an "alternate" offer for two carriers of $19,000,000 each.
The Bethlehem Shipbuilding Corp. offered low bid for the heavy cruiser,
with $11,720,000 straight and $10,824,000 as an alternate.
Low bid for the light cruisers was submitted by the New York Shipbuilding Co., with $12,251,000 for one ship and $11,657,000 each for two.
Automobile Code of Fair Competition Filed with NRA
—Hearings to Be Held Early in August—Continues
Open-Shop Policy,' Although Permitting Employees to Engage in Collective Bargaining—Text of
the Agreement—Henry Ford to Serve as Honorary
President of National Recovery Council.
Details of the Code of Fair Competition for the automobile
industry were announced on July 29 by General Hugh S.
Johnson, Recovery Administrator, who said that public hearings would be held on the agreement in Washington early in
August. The conclusion of the Code by members of the National Automobile Chamber of Commerce was noted in our
Issue of July 29, page 796. The tentative Code was signed
by all leading automobile manufacturers, with the exception
of Henry Ford, who is not a member of the Chamber. On
July 29, however, it was announced that Mr. Ford had consented to serve as honorary President of the National Recovery Council in Dearborn, Mich., and this was construed
as an indication that Mr. Ford would probably give his support to the minimum-wage and maximum-hour provisions of
the agreement. In making public the automobile Code on
July 28, General Johnson remarked, with regard to the socalled "collective bargaining" feature, that it is "not the function of the NIRA to organize either industry or labor. To
obtain the benefits of this Act, it is not necessary for workers to join either company unions or any particular labor
union." The automobile Code provides for a 35-hour week,
with permission for as much as 48 hours during periods of
greatest seasonal activity. It sets a minimum wage of 43c.
an hour for cities of 500,000 and over. For cities of 250,000
to 500.000 the minimum wage is 411Ac., and for cities under
250,000 population, 40c. Child labor is prohibited. One of
the most important sections of the Code is that which continues the open-shop policy, and states that "the selection,
retention and advancement of employees will be on the basis
Of individual merit without regard to their affiliation or nonaffiliation with any labor or other organization." The usual
Provisions giving employees the right to bargain collectively
and stating that they will not be required to join company
unions as a condition of employment are incorporated, however. General Johnson remarked on July 29 that the openshop provision in the Code appeared to conform with the Ad-
979
ministration's recovery program. The complete text of the
automobile Code follows:
Code of Fair Competition for the Automobile Industry.
Under the provisions of Section 3 of Title I of the NIRA, the following
provisions are established as a Code of Fair Corn-petition for the automobile
industry:
I. The term "motor vehicles," as used herein, means automobiles, including passenger cars, trucks, buses, and other commercial vehicles, for use on
the highway.
The term "automobile industry," as used herein, includes the manufacturing and assembling within the United States of motor vehicles and bodies
therefor and of component and repair parts and accessories by manufacturers
or assemblers of motor vehicles.
The term "Chamber," as used herein, means National Automobile Chamber
of Commerce, a trade association having its office at 366 Madison Avenue,
New York.
The term "employees" as used herein means all persons employed in the
conduct of such operations.
The term "employers," as used herein, means all persons, partnerships,
associations and corporations in the automobile industry by whom such employees are employed.
The term "effective date," as used herein, means the tenth day after this
Code shall have been approved by the President of the United States.
The term "expiration date," as used herein, means Dec. 31 1933, or the
earliest date prior thereto on which the President shall by proclamation or
the Congress shall by joint resolution declare that the emergency recognized
by Section 1 of the NIRA has ended.
II. On and after the effective date, and to and until the expiration date:
The minimum wages of factory employees covered hereby shall be at the
following hourly rates—to adult male factory employees:
In cities having 500,000 population or over, 43c.
In cities having 250,000 or over or less than 500,000 population, 41%c.
In cities or towns having less than 250,000 population, 40c.
To male factory employees over 16 and less than 21 years of age, and to
female factory employees:
In the respective localities above mentioned, a differential of five cents
below the respective hourly rates above mentioned.
Factory employees covered hereby (excluding supervisory staff and all
employees engaged in the preparation, care and maintenance of plant, machinery and facilities of and for production) shall work not more than 48
hours in any one week, and not more than 35 hours per week averaged for
the period from the effective date to the expiration date.
Office and salaried employees covered hereby receiving less than $35 per
week shall work not more than 48 hours in any one week, and not more than
40 hours per week averaged for the period from the effective date to the
expiration date.
The minimum wages of office and salaried employees covered hereby shall
not be less than the following weekly rates:
In cities having 500,000 population or over, at the rate of $15 per week.
In cities having 250,000 population or over, and less than 500,000 population, at the rate of $14.50 per week.
In cities or towns having less than 250,000 population, at the rate of $14
per week.
III. Employers in the automobile industry shall not employ any person
under the age of 16 years, child labor having at no time ever been a factor
in the automobile industry.
IV. Each employer engaged in the automobile industry will furnish approximately every four weeks duly certified reports in such form as may
hereafter be provided showing actual hours worked by the various occupational groups of employees and wages paid.
V. Under Section 2 (a) of Title I of the NIRA, the Chamber is hereby
appointed an agency for the following purposes:
(a) To collect from the members of the automobile industry all data and
statistics called for by this Code, or required by the President, or reasonably
pertinent to the effectuation of Title 1 of said Act, and compile the same,
and disseminate among the members of the automobile industry summaries
thereof, and allocate among and collect from the members of the automobile
industry the expenses necessarily and reasonably incurred in the preparation
and presentation of this Code and by the agency in exercising its duties under
this Article V, all in such form and manner as said agency shall reasonably
prescribe.
(b) To represent the automobile industry in conferring with the Administrator with respect to the application of this Code and of said Act, and
any regulations issued thereunder, and to hear complaints, and, if possible,
adjust the same, and to co-ordinate the Administration of this Code with
such codes, if any, as may affect any subdivision of the automobile industry
or any related industry, with a view to providing joint and harmonious action
upon all matters of common interest and to receive any proposals for supplementary provisions or amendments of this Code or additional codes applicable
to the automobile industry or various subdivisions thereof, with respect to
wages, hours, trade practices or any other matters affecting the automobile
industry or any subdivision thereof. Provided, however, that as regards all
matters mentioned in this paragraph (b) said agency shall have no power
to express any approval or recommendation to the Administrator, or in any
wax bind the automobile industry or any subdivision thereof, or do any
more than consider the foregoing matters, and confer with the members of
the automobile industry affected thereby, with a view to development of
the sentiment of the automobile industry, and the arguments for or against
such proposals, and arrange for hearings before the Administrator on any
proposal which a substantial proportion of the automobile industry desires
to present.
(c) The duties of said agency above enumerated shall be exercised by the
Chamber by action of its Board of Directors and/or members as provided in
its certificate of incorporation and by-laws and the laws under which it is
incorporated. Said agency may delegate any of its duties to such agents and
committees as it may appoint whose personnel, duties and powers may be
changed by said agency from time to time.
VI. As required by Section 7 (a) of Title I of the NIRA, the following
provisions, effective until the expiration date, are conditions of this Code:
(a) That employees shall have the right to organize and bargain collectively through representatives of their own choosing, and shall be free from
the interference, restraint, or coercion of employers of labor, or their
agents,
in the designation of such representatives or in self-organization or in
other
concerted activities for the purpose of collective bargaining or other mutual
aid or protection; (2) that no employee and no one seeking
employment
shall be required as a condition of employment to join any company union
or to refrain from joining, organizing, or assisting a labor organization
of his
own choosing; and (3) that employers shall comply with the maximum
980
Financial Chronicle
hours of labor, minimum rates of pay, and other conditions of employment,
approved or prescribed by the President.
In accordance with the foregoing provisions, the employers in the automobile inditstry propose to continue the open-shop policy heretofore followed
and under which unusually satisfactory and harmonious relations with employees have been maintained.
The selection, retention and advancement of employees will be on the
basis of individual merit without regard to their affiliation or non-affiliation
with any labor or other organization.
VII. As required by Section 10 (b) of Title I of the NIRA, the following
provision is contained in this Code: The President may from time to time
cancel or modify any order, appro,,al, license, rule or regulation issued under
this title.
VIII. By presenting this Code the Chamber and others assenting hereto are
not consenting to any modifications thereof and each reserves the right to
object individually or jointly to any nrodified Code.
IX. It is contemplated that supplementary provisions or amendments of
this Code or additional codes applicable to the automobile industry or various
subdivisions thereof may from time to time be submitted in behalf of the
automobile industry or various subdivisions thereof for the approval of the
President.
Auto Code Part Deleted—Paragraph Covering Pay
Rise Phase Removed from Final Text.
The following is from the New York "Times" of Aug. 1:
The text of the automobile industry Code, as given out in Washington by
the NRA and published in Sunday's newspapers, contained a paragraph which
was eliminated in the final draft of the Code, the National Automobile Chamber of Commerce reported ycsterday.
The portion deleted from the final version of the Code was the last paragraph in Section II of the published document, reading as follows:
"For all office and salaried employees covered hereby receiving less than
$35 per week and for all factory employees covered hereby, the wages per
hour shall not be less than the respective rates effective for them on Aug. 1
1933 (said rates having heretofore been raised by the employers effective
Aug. 1 1933, to a point which they estimate is substantially 90% of the
respective rates for the same class of work at the same factory as averaged
for the year 1929, less adjustment necessary in order to place employers in
the same district of the automobile industry on an equality for the same
class of labor)."
Members Representing 98% of Production of National
, Automobile Chamber of Commerce Sign Proposed
Automobile Code-200,000 Persons to Receive Wage
Increases.
Aug. 5 1933
enry Ford, Observing 70th Birthday, Declares
Preference Is to "Look Forward"—Never Lured
into Stock Market—$75,000,000 "Supposed" to
Have Been Lost Went Toward Wages and Taxes.
Noting that Henry Ford would on July 30 observe his seventieth birthday, Associated Press accounts from Detroit, on
July 29, said:
Mr. Ford's seventieth milestone finds him enjoying unusual good health
and as energetic and active as he was a decade ago. A keen eye and quick
step testify to the alertness and agility that has been characteristic of Ford
throughout his career.
"My preference is to look forward," he said to-day. "I have been doing
that all my life." In these words he dismissed "retirement" talk.
Mr. Ford spent part of to-day, as he spends every day he is in Dearborn,
at his offices in the engineering building of the Ford Motor Co. He is considering the industrial Code which virtually all other automobile manufacturers have agreed upon. . . .
The trouble is, he says, that the present Code is such that his company
would have to live down to it.
He said that he was asked recently "about the $75,000,000 we are supposed
to have lost last year."
"We did not lose it," he said. "We spent it. Most of it went into wage
envelopes; the rest for taxes. But we did not lose it—we used it. If we
had dropped it in the stock market, that would have been losing it. But I
was never lured into that game."
To-morrow Henry Ford and his family probably will talk of the past, but
for the most part Mr. Ford, who does not calculate life in terms of years
but in terms of experience, will be "looking forward."
Theatrical Code Filed with NRA—Hearings Start
Aug. 10 on Agreement Providing Various Pay
Scales for Actors, Chorus Members, Musicians,
Press Agents and Stage Hands.
A code of fair competition for the theatrical industry
was filed with the NRA on July 28 and public hearings were
scheduled for Aug. 10. The code, which was described as
"an extraordinary agreement of all legitimate theatre interests," sets the minimum wage for chorus girls at $30
weekly, and for actors with less than two years' experience
at $25 weekly. Press agents would receive at least $50
and at least $75 while traveling. Theatrical producers are
pledged by the code to raise their curtains on scheduled
time. The working week for actors was fixed at 40 hours,
although this would not apply during rehearsal periods.
Musicians would receive a minimum wage of $30 a week for
eight performances,and present union contracts for musicians
and stage hands would be continued. The code states that
its objective is the "revitalizing of the theatre as a national
institution so that the road may be restored and plays may
once more be given in every part of the country." It stipulates that only legitimate agencies will be used for the sale of
tickets, and that a reasonable percentage of seats will be
retained at the box office for direct sale to the public.
The Code of fair competition for the automobile industry,
which was adopted on July 28 and filed with the NRA, has
been approved by 98% of the membership of the National
Automobile Chamber of Commerce, according to an announcement by that organization on July 31. Alvin Macauley,
President of the Chamber, said that the Code is now official
so far as Chamber members are concerned, and that its approval means wage increases for approximately 200,000
persons.
Signers included the following cars and trucks, with General Motors signing for Buick, Cadillac, Chevrolet, Pontiac
and Oldsmobile and Chrysler Corporation covering Chrysler,
De Soto, Dodge, Plymouth and Fargo Truck; Auburn, Auto- Tobacco Code, Filed with Farm Adjustment Adminiscar, Brockway, Continental, •Corbitt, Douglas, Duesenberg,
tration Provides 40-hour Week and 30-cent Mini, mum Wage.
Federal, General Motors Truck, Graham-Paige, Franklin, .
Manufacturers of cigarettes, smoking tobacco, chewing
Hudson, Hupmobile, Le Blond-Schacht, Mack, Moreland,
Nash, Packard, Pierce-Arrow, Reo, Sterling, Stewart, Stude- tobacco and snuff filed a code of fair competition with the
baker, Stutz, Twin Coach, Ward, White, Willys-Overland and Farm Adjustment Administration. With some few exceptions the code provides a minimum wage of 30 cents an hour
International Harvester. Mr. Macauley said:
The individual companies are going ahead with arrangements for substantial increases in the wages of factory workers under the terms of a
recommendation passed by our members in thir meeting at Detroit, Wednesday, July 26.
Some companies have made these increases effective July
31, While others probably will follow soon, Mr. Macauley declared.
Henry Ford Says Minimum Wages at Ford Plant Are
Above Those of NRA Automobile Code.
Ford employees already are paid a higher minimum wage
than that proposed in the NRA automobile Code, Henry Ford
pointed out on July 29, in explaining his delay over signing
the pact. Advices to this effect were contained in United
Press advices from Dearborn Mich. (July 29) to the New
York "Herald Tribune," which added:
On the eve of his seventieth birthday . . . the motor manufacturer
said his factory experts were examining provisions of the Code carefully with
a view to determining the position the company would take.
"Our minimum wage paid to any one in our plants is 50c. an hour," Mr.
Ford said, "while I understand the new Code provides for minimum wages
of from 40 to 43c. an hour.
"We are pioneers in the field of a shorter working week. For years our
men have worked an eight-hour day, five-day week.
"So far as wages, hours of labor and conditions of employment are coneerned, we lead the Code. If we tried to live up to it, we would have to
live down to it."
Mr. Ford said he always had been a friend of the laboring class and that,
beginning with his seventieth year, he had the laborer's interest at heart
snore than ever.
Ford makes no distinction in birthdays.
' "We are getting used to anniversaries this year," he said. "It is 30 years
since the Ford Motor Co. was organized; 40 years since I made my first
engine, and 70 years since I was born. If you stop at every milestone and
.congratulate yourself you won't get far."
and a maximum 40-hour week. The code became effective
on Aug. 1, but it was stipulated that it would be subject to
change if its terms were rejected by the Farm Adjustment
Administration or the NRA,and that it might be rewritten
to provide for increases to tobacco producers. S. Clay
Williams, President of the R. J. Reynolds Tobacco Co.
and Chairman of the Committee which formulated the
agreement, said it had been accepted by companies representing 90% of the industry.
Cotton Ginning industry Submits Tentative Fair
Competition Code.
A tentative code of fair competition for the cotton-ginning
industry was submitted to the Agricultural Adjustment
Administration on July 25. The code proposes to prevent
certain practices unanimously condemned as unfair. These
included purchasing cotton seed from farmers, providing
transportation to the gins without cost, and issuing stock or
other interest in the gins to influence trade. Maximum
hours and minimum wages will be covered in separate labor
schedules to be presented later by States as a supplement
to the general provisions of the code. A public hearing on
the code was said to be contemplated at an early date.
New York Cotton Exchange Adopts Code Under NIRA.
The New York Cotton Exchange claims the distinction
of being the first commodity exchange to adopt the Blanket
Code of the NIRA. The Cotton Exchange engages about
200 employees. At a special meeting of the Board of Managers of the Exchange on Aug. 1, called for the purpose, the
Volume 137
Financial Chronicle
Code was unanimously adopted without reservations and the
following telegram was sent to President Roosevelt:
Cotton
At a special meeting of the Board of Managers of the New I ork
New
Exchange held this afternoon it was unanimously resolved that the
in his
President
the
behind
York Cotton Exchange should stand squarely
such
Recovery Bill and co-operate with him in every respect, even though
the
co-operation necessarily imposes additional expense. Accordingly
New ork Cotton Exchange goes on record as having signed the Blanket
Code without reservation."
New York Coffee and Sugar Exchange Signs Code.
The coffee and sugar industries of this country have been
called on to stand behind President Roosevelt's National
Recovery Act, in a message from William H. English, Jr.,
President of the New York Coffee & Sugar Exchange. Mr.
English sent the following telegram to President Roosevelt:
"The New York Coffee & Sugar Exchange begs to inform you that it
has signed the blanket code of the National Recovery Act. We are all
behind you in this great movement, not only for the recovery of industry
but for the important humanitarian aspect of the Act. I am urging the
thousands of concerns and business men In the coffee and sugar industries
of the United States to sign the code at once if they have not already done
so.
(Signed) WILLIAM H. ENGLISH, JR., President,
New York Coffee & Sugar Exchange.
•
•
Fertilizer Industry Presents Code..
The fertilizer industry on Aug. 2 presented its Code of
Fair Competition to General Johnson, through General C. C.
Williams, Deputy Administrator. The officials of The
National Fertilizer Association who made the presentation
were John J. Watson, President; C. T. Melvin, VicePresident; Charles J. Brand, Executive Secretary and
Treasurer, and Charles H. MacDowell, who is assisting the
Association in its recovery program. In presenting the
Code, these officials stated that it had been in preparation
nearly three months. They said:
"It is the result of the work of a Fertilizer Recovery Committee established in May, the work of which was submitted to a convention of the
Industry in June. This convention created a new Fertilizer Recovery
Committee representative of every section of the United States. That
Committee of 29 members held five meetings, and an Administrative
Committee of smaller size four meetings, after which a special committee
revised the Code following an informal conference with the Administration."
General Johnson was advised that "every effort has been
made to cover the problems of the industry, both from the
standpoint of hours of labor and wages and of competitive
practices, in such a manner as to enable it to render its
appropriate service to agricultural recovery as well as to
general recovery.'
The Code as presented provides for a maximum 40-hour
week, with a minimum of 35 cents an hour in the Eastern
and Middle-western States, 25 cents an hour in the South,
and 40 cents an hour in the far West. These rates, if put
into effect, will restore the 1929 wages and purchasing power
of workers in the industry and are 60% above the rates prevailing at the present time. Child labor, though not an
important factor in the fertilizer industry, will be prohibited.
If and when adopted, the Code will govern the operations
and marketing practices of approximately 600 fertilizer
manufacturers. Fully 80% of the total business is done,
it is stated, by the 233 firms that belong to The National
Fertilizer,Association.
Photographic Industry Submits Code to NRA-85%
of Industry Agrees to 40-hour Week and Minimum
Wage of 40 Cents an Hour for Men and 35 Cents
for Women.
A code of fair competition for the photographic industry
was submitted to the NRA on July 28, and a hearing was
scheduled for Aug. 4. The code provides for a minimum
wage of 40 cents an hour for men and 35 cents for women
on a 40-hour work week basis. It deals only with questions
of employment and contains no provisions affecting trade
practices. Technical, executive and administrative positions are not covered by the wage and hour stipulations.
William G. Stuber, President of the Eastman Kodak Co.
on July 28 said:
The code has been signed by all the Rochester manufacturers of photographic products, including Eastman Kodak Co., Defender Kodak Supply
Co. It has
Co., Haloid Corp., Folmer Graftex Corp. and Rectigraph
products
also been signed by all the larger manufacturers of photographic
throughout the country, comprising at least 85% of the industry.
981
in addition employees will be entitled to meals during their
hours of service. In a letter sent with the agreement,
the institute said that a 40-hour week "is not feasible or practicable in the restaurant industry." It added that "the
restaurant industry is anxious to show its patriotism and
to support our President's policy by securing the NIRA
insignia for all its members." Some of the provisions of
the code, as outlined in the New York "Times" on July 30
follow:
All restaurant proprietors would be required to submit certified reports
every four weeks to the National Restaurant Institute containing payroll
data, number of people served, all fixed and current charges,seating capacity
and "all other information which may be demanded for the economic welfare
of the industry as a whole."
Among the unfair practices which would be banned by the code are
the serving of free beer, alcoholic beverages or mineral waters with a meal
or the serving of free food with such beverages. The sale of food at less
than a 10% profit also Would be forbidden, and it would be made an unfair
practice to open a new restaurant in a neighborhood already well supplied
with them.
Asbestos Institute Formed—Code Submitted to NRA.
Following an organization meeting on May 17 last, the
Asbestos industry has been organized for the first time in.
its history, and the Asbestos Institute has been formed to
act as the co-ordinating body for the industry in working
with the National Recovery Administration. The Asbestos,
Institute is made up of five divisions comprising the principal
groups of products. These are:
(1) Asbestos paper and allied products.
(2) Asbestos cement products.
(3) Asbestos magnesia products.
(4) Aebestos textile products.
(5) Brake lining.
On July 28, at the first meeting of the Directors of the,
Institute, who had previously been nominated by the member
divisions, the following officers were elected.
President, Lewis H. Brown, President Johns-Manville Corp.; VicePresident, Bradley Dewey, President Multibestos Co.; Treasurer, D. R.
Weedon, General Manager & Treasurer Russell Manufacturing Co.
On July 31 the Asbestos Institute submitted to the NRA
a code of fair competition under which the industry proposes
to co-operate in carrying out the purposes of the NIRA.
Texas Moratorium for Loan and Brokerage Corporations Continued in Force Until Oct. 1.
From the "Oklahoman" we quote the following from
Austin, Tex., July 19:
A moratoeum for loan and brokerage corporations dealing in bonds and
debentures that has been in effect several months Wednesday was ordered
extended until Oct 1 by E. O. Brand, State Banking Commiss'oner.
The proclamation was signed jointly by Brand and Governor Miriam
A. Ferguson.
Notice of extension explained the moratorium was not intended to impair
the right of the corporations to receive voluntary payments or from paying
Interest on its obligations, provided payment of interest shall not be permitted where such payment "would impair the collateral pledged to secure
outstanding bonds, debentures and other obligations."
Decision Holding Unconstitutional Texas Moratorium
on Mortgage Foreclosures—Said to Apply Only to
County.in Which Ruling Was Handed Down—
Decision Affects Dallas Joint Stock Land Bank.
A ruling, handed down on May 19 by Judge Robert B.
Allen in the One Hundredth and Sixteenth District Court
at Dallas, holding the Texas real estate mortgage moratorium
law unconstitutional applies only to cases in Judge Allen's
court, according to Civil District Judge Ben F. Wilson.
Advices to this effect were contained in the Houston "Post"
of May 21, from which the following is also taken:
"Judge Allen's decision will have no effect on foreclosure cases outside
the jurisdiction of his court," Judge Wilson said. "The situation in this
county remains unchanged. Until we have an answer from the Court of
Civil Appeals, those who have obtained temporary injunctions need not
worry. Others who request temporary injunctions will be heard by the
Court."
Judge Wilson, Friday[May 19]certified questions on the constitutionality
of the mortgage law to the Court of Civil Appeals, which, in turn, is expected to certify them to the Supreme Court. A decision which will affect
all cases in the State is expected soon.
Deputy Sheriff Sanford, in charge of civil matters, Saturday [May 201,
said notices of 35 foreclosure sales have been posted. The next sale day
is June 6.
On May 2, Governor Ferguson signed the bill granting a 30-day moratorium on mortgage foreclosures. Coincident with the signing, 22 persons
applied for temporary injunctions against sales.
Judge Wilson grouped the injunction suits into one hearing, and, after
two cases had been heard, decided to certify questions of constitutionality
to the higher court.
Restaurant Code Asks 54-hour Week, Asserting That
Regarding Judge Allen's decision Associated Press advices
Shorter Period Is Not Practicable in This Industry
—$3 Weekly Minimum Pay for Waitresses.
May 20 from Dallas to the Houston "Post" said:
His ruling was the first by a Texas court on the constitutionality of the
The National Restaurant Institute made public on July 29
in his dissolution of an injunction against the Dallas Joint
the draft of a code which it sent to Gen. Hugh S. Johnson, aw, and came
Stock Land Bank, obtained by I. M. Pemberton and J. M. Pemberton of
Recovery Administrator. The code provides for a 54-hour Tarrant County.
The injunction was granted [May 12] by a Fort Worth court against the
week and minimum weekly wage rates ranging from $3 for
against the Pembertons. The bank obtained transfer
waitresses and $4 for waiters to $25 for first•cooks, while . sale of land on a note
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Financial Chronicle
of the case to Dallas Couiry, where the judgment on the note was issued.
Judge Allen granted a 180-day continuance, which held until the dissolution order Friday (May 19J.
C. C. Renfro. attorney for the Land Bank. said the case was submitted
strictly on a constitutional basis. He contended that the moratorium law
violated both the State and Federal constitutions.
B. F. Bouidin of Fort Worth. attorney for the plaintiffs in the injunction case, gave notice of appeal to the Fifth Court of Civil Appeals in
Dallas.
The mortgage foreclosure moratorium law, held invalid by District
Judge Robert B. Allen of Dallas, was passed by the Legislature in an effort
to give relief to hard-pressed farm and home owners.
From Belton (Tex.) May 24 the Jackson "News" reported
the following:
The new Texas moratorium act providing for injunction against trustee
sales and for continuance of cases in court to foreclose liens on land has
been held unconstitutional by Judge Few Brewster.
In several cases to foreclose deed of trust liens, in which the new measure
had been invoked, Judge Brewster held that the State and Federal constitutions provided that no law impairing the obligations of contracts
should be made.
Governor Comstock Signs Bill Providing for Moratorium
on Mortgage Foreclosures in Michigan Until 1935.
A moratorium on mortgage foreclosures became effective
June 2 in Michigan and will continue until March 1 1935.
The relief period started when Governor William A. Comstock signed the Bischoff-Munshaw Act passed the previous
week by the State Legislature, according to Lansing advices
June 2 to the Detroit "Free Press," the advices further
reporting:
The new law empowers the courts to continue until March 1 1935, all
foreclosure proceedings instituted in the future or now pending. Aside from
the act suspending penalties on delinquent taxes, the measure is the first
extending direct relief to home owners.
During the moratorium, all property on which foreclosure proceedings
are started will be under the control of the Court Clerk. The judges are
directed to fix reasonable rentals, giving preferences to the occupant. The
clerk will collect the money, pay taxes and keep the property in good repair.
A companion bill establishing a moratorium on land contracts is before
the Governor.
In an attempt to extend additional aid to home owners, Rep. George
C. Watson of Capac, Friday introduced a bill preventing tax title
buyers from taking possession of properties in the present emergency.
The proposed law would become inoperative next Jan. 1.
By an unanimous vote, the house of Representatives Friday approved
a bill giving emergency powers to building and loan associations. It is
intended to stabilize these institutions. It has passed the Senate and
goes now to the Governor.
William Green, President of the American Federation
of Labor, Demands Investigation of Reports that
Some Workers Are Being Dismissed as Result of
Industrial Recovery Act—Also Attacks Discharge
of Employees for Joining Unions.
William Green, President of the American Federation of
Labor, asserted on July 18 that there is no reason why some
workers should be discharged as a result of the application
of the Industrial Recovery Act. Mr. Green said that he
would demand an investigation of reports that some Southern
textile mills had discharged some of their operators because
of the new 40-hour week, effective July 17, and lie also said
that he was investigating the discharge of workers for joining
unions. Mr. Green was reported as follows in a Washington
dispatch to the New York "Times" on July 18:
"Employers in some places are discharging men because they are organizing as permitted under the Industrial Recovery Act," said Mr. Green.
"In other places employers are using their influence to prevent organizers
from meeting with employees for the purpose of discussing organization
plans.
"I have just received word that the Mayor of Mingo Junction. Ohio, a
steel center, has refused permission to members of the Steel Workers' Union
to pass out copies of Section 7A of the Recovery Act. That is the section
guaranteeing labor the right to organize and be represented by spokesmen
of their own choosing."
"Word has just come from Ilollidays Cove, W. Va., adjoining Weirton,
that the Mayor had refused permission to union men to hold a meeting for
the purposes guaranteed under the Recovery Act.
"Our representative in Fort Smith, Ark., informs us that men are being
discharged for joining unions, that coercion and intimidation are being
used. I have sent word to Fort Smith that employers discharging men for
joining the union are subject to penalties under the Recovery Act."
IIugh S. Johnson, Recovery Administrator, whose attention was called
to the report concerning discharges of sonic operatives in the textile areas,
explained that it was inevitable, when the work-week was cut from 120 to
80 hours, some discharges should occur.
Those are some of the eggs that were broken in making this omelette,"
he said.
American Federation of Labor Forming New Unions in
Rubber, Steel, Automobile and Other Mass-Production Industries—William Green Says Policy Does
Not Represent New Departure—"Federal" Locals in
Individual Plants to Negotiate With Employers.
The American Federation of Labor is only following its
traditional policy in organizing the workers in the automobile,
rubber, steel and miscellaneous industries, according to an
announcement by William Green, President, on July 26.
He said that in such mass-production industries charters of
affiliation with the Federation are given to employees of
various plants, and are awarded only in cases where there
do not exist international unions to which the newly organ-
Aug. 5 1933
ized workers can apply.f He:added that this plan of organization is not a departure from the form to which the Federation
has always adhered. Mr. Green's statement follows:
The American Federation of Labor is pursuing its traditional policy in
organizing the workers in the automobile, rubber, steel and miscellaneous
industries. The establishment of Federal labor unions in mass-production
industries means that the American Federation of Labor itself will represent
these Federal labor unions as they are directly chartered by the parent
organization.
Federal labor unions have been formed by the American Federation
of Labor for many years. Through this form of organization the workers
who do not come under the jurisdiction of national and international
unions already formed become identified with the organized labor movement, The American Federation of Labor represents these Federal labor
unions just the same as national and international unions represent local
organizations directly chartered by them. Through these Federal labor
unions the workers in mass-production industries may become organized,
may engage in collective bargaining and may be represented by men of
their own choice, as provided for in NIRA.
As a matter of convenience and practicability, Federal labor unions
will be established at different plants if conditions seem to make it necessary,
so that the workers may conveniently conduct their business affairs. In
considering industrial codes applicable to these mass-production industries,
the workers will be represented by the American Federation of Labor and
will be given the benefit of such expert, technical and trained service as
the American Federation of Labor can supply. There is no way by which
these workers may engage in collective bargaining except through the
establishment of Federal labor unions affiliated with the American Federation of Labor.
The officers and members of these Federal unions will be free to choose
American Federation of Labor representatives to speak for them and to
represent them in wage negotiations at hearings where questions affecting
their interests are considered under the authority of N IRA.
In following such a plan of organization the American Federation of
Labor is not in any way departing from the form of organization and the
traditional policy which it has pursued from the beginning. This policy is
the only one by NI hich the workers can become organized and enjoy the
benefits of collective bargaining as provided for in Section 7 of NIRA.
Mr. Green also declared on July 26 that employers who
are under contract to unions will be expected to reduce the
number of hours for industrial workers to 35 weekly if they
accept the voluntary blanket agreement proposed by President Roosevelt. He added that the pay for the shorter week
is to be the same as that for the longer period. A ruling on
this point has not yet been made by the NRA however.
Oregon Produce Dealers' and Peddlers' Act Held
Valid—Order Restraining Market Enforcement
Dissolved—Ruling to Be Appealed.
The Oregon Produce Dealers' and Peddlers' Act passed by
the 1033 Legislature is constitutional, Circuit Judge Crawford held on July 18 in a memorandum opinion in which he
dissolved a restraining order which had prevented the division of market enforcement of the Department of Agriculture
from enforcing the new law. The "Oregonian," of Portland,
from which the foregoing is taken, also said:
The permanent restraining order to prevent the enforcement of the law,
as sought by Dominic Cancilla and some 111 other wholesale and retail produce dealers, was denied. Defendants named in the test case were Max Gehlhar as Director of the Department of Agriculture of the State and IV. E.
Upshaw as field representative, Division of Market Enforcement of the Department.
Case to Be Appealed.
Appeal will be taken to the State Supreme Court, it was announced yesterday by Gus C. Moser and Richard Sleight, attorneys representing the produce
dealers.
The case was brought on the allegation that the Act, which provides for the
licensing of brokers and wholesale and retail produce dealers, is class legislation, discriminatory, and deprives the plaintiffs of property without due
process of law. The question also was raised as to whether or not the law
was regularly passed.
Judge Crawford held that as to the regularity of passing the law that "the
showing does not establish a substantial irregularity in the enactment of this
legislation."
"In my opinion the requirement of the license herein provided, from wholesale and retail produce peddlers, and the exemption of growers, is reasonable
and based upon logical and practicable considerations," Judge Crawford
held, in commenting upon the contention that the Act amounts to class
legislation.
Fee System Presided.
As to whether or not the Act is oppressive in its administration, or assumes
for the legislative delegates the functions of an administrative body, Judge
Crawford held in part that "There is no substantial showing that any such
extreme regulation has been invoked or is contemplated. . . ."
The Act itself provides for a fee system as follows: Brokers, $25 a year;
commission merchants, $25; credit buyers, $25; cash buyers, no license
required ; wholesale produce dealers, outside of incorporated city or in incorporated cities of less than 200,000 population, $25; wholesale produce
dealers in incorporated cities of over 200,000 population, $100 ; agents, $5;
growers, $1, and a like amount for each additional truck used; wholesale
produce peddlers, for vehicles carrying less than one ton of produce, $30;
for vehicles carrying more than one ton of produce, $100, and a like amount
for each additional vehicle; retail produce peddlers, without a vehicle or
using a vehicle carrying less than one ton of produce, $23 ; for using a vehicle
carrying in excess of one ton of produce, $50, and a like amount for each
additional vehicle.
Slowing Up of Employment Gains in July Reported by
President Green of American Federation of Labor—
Says President Roosevelt's Recovery Program Comes
Just in Time.
A slowing up of employment gains in July was reported on
July 25 by William Green, President of the American Federation of Labor, on the basis of preliminary trade union figures.
Volume 137
Financial Chronicle
"Union employment figures for July come as a warning
that business had not been quick enough to reorganize itself
under the recovery program," he said in a statement. Associated Press advices from Washington further quote him as
follows:
The President's general code comes just in time. If we allow the return
of men to work to be slackened off, the whole program is doomed.
The trade union reports showed that the percentage of membership
returning to jobs so far this month was 0.7 as compared with 1.3 in June.
"This slackening was to be expected." Mr. Green said. "Employment
normally falls off seasonally in July; also, the feverish industrial activity of
June this year was clearly abnormal and could not be expected to continue.
"Reports from industry indicate this same slackening. The long rise
In steel mill activity (since March 25) has stopped, automobile production
Is slackening, electric power production has declined, building contracts are
dropping off again. It was largely these developments that sent stock
market prices careening downward."
Mr. Green said that the Federation's estimate of the number of persons
who have found employment from March to June, eKcluding family workers
who obtained jobs on farms, was more than 1.500,000. More than 600,000
Industrial workers got jobs in June as compared with 340,000 in May and
460,000 in April.
"But in spite of these gains and the smaller gains in July," he added,
"well over 11.000.000 persons are still without work.
"We have as yet made only a small dent on the platform of re-employment. What we can do in the months ahead will depend on the co-operation
given the President In his program."
Railroads Merge New York Harbor Facilities—Wide
Economies and Improved Service Expected from
Co-operative Plan—Savings in Marine Operations
Alone are Estimated at $3,000,000 a Year.
The railroads serving New York have evolved a plan for
consolidating pier and marine operations in the harbor which
are expected to result in substantial savings, according to a
report issued July 23, by D. T. Lawrence, General Secretary
of the General Committee of the Eastern railroads. The
report was submitted to the Eastern Presidents' conference.
The elimination of lighterage by outside interests, consolidation of pier services, elimination of trucking in lieu of lighterage and exchange of floating equipment are among other
results cited by Mr. Lawrence. Ile summarized the results
of the harbor co-ordination program as follows:
(1) Reduction in Lighterage Costs.—Under the previous method of operation privately owned lighterage companies specialized on handling for the
railroads certain commodities, such as sugar, pulpwood, hides, vegetable
oils, lumber, grain and flour, It was customary also to make outside lighterage arrangements for unusually heavy lightering operations requiring derrick
capacity over 75 tons.
Under the co-operative plan worked out by the railroads, all of the
lighterage work with minor exceptions will be handled by the railroads
themselves, resulting in substantial savings.
(2) Consolidation of b'acilities.—Substantlal economies as well as improved service for shippers and receivers of merchandise freight have been
effected by consolidation of pier station facilities. This is in line with the
railroads' continuing progress toward greater unification of services.
'rho Baltimore & Ohio's station facilities at Pier 21, East River, now
accommodate the business formerly handled at the Pennsylvania's Piers
22 and 25, East River.
The operations formerly carried on by the Pennsylvania at Pier 2, North
River, have been consolidated with Desbrosses Street pier station. Similarly
the New York Central was able to consolidate at Piers 34 and 35, East
River, the business formerly conducted on l'ier 4, East River. At Wallabout, the L high Valley and Baltimore & Ohio have arranged to consolidate
their operations with the New York Central and Pennsylvania. and these
two piers will be operated as a union freight station for all four railroads.
(3) Elimination of Trucking in Lieu of Lighterage.—Due to competitive
conditions over a period of years, the practice has grown up in New York
harbor of trucking in lieu of lighterage, although equipment was available
for lighterage service. The committee's studies showed that in many instances It would be more economical to lighter freight Instead of trucking
It and the railroads represented by the committee have accordingly put
Into effect plans under which the practice of trucking in lieu of lighterage
will be largely eliminated. The volume of tonnage involved enables the
railroads to make substantial savings.
(4) Consolidated Totting and Lighterage.—The committee devised and put
Into effect about three months ago a plan for exchanging between the railroads operating in New York harbor their towing and marine equipment
In such a way as not only to accomplish immediate economies and Improved operations, but also to open up great future possibilities of still
further savings. As a result of this experience, the railroads have arranged
to pool their equipment and completely unify the lighterage operations of
the harbor.
In carrying out this plan, T. C. Mulligan has been appointed manager
and has been given authority to take full charge of the combined lighterage
operations of all the railroads.
(5) Elimination of Other Competitive Practices.—The committee is actively studying all operations for the purpose of eliminating unnecessary or
duplicate practices or establishing a uniform practice for all of the interested
railroads.
All of these major accomplishments and other results of minor importance
have been achieved with a minimum delay due to the co-operative spirit
and frankness with which the interested railroads have entered into the
discussion and solution of their joint problems.
Chester S. Lord, Managing Editor of the New York
"Sun" for 33 Years, Dies at Age of 83—One of Foremost Figures in American Journalism—He Later
Served for 12 Years as Chancellor of New York
State Boar:I of Regents.
Chester S. Lord, former Managing Editor of the New York
"Sun" and one of the foremost figures in American journalism, died at his home in Garden City, Long Island, on Aug. 1.
Mr. Lord, who had been ill for more than a month, was 83
years old. He retired from newspaper work in 1913, but
983
was active in both his personal recreations and his duties as
Chancellor of the Board of Regents of the State of New York,
a post he had held since 1921. Members of the Board of
Regents of the State of New York acted as honorary pallbearers at the funeral services on Aug. 3. We quote briefly
from the New York "Times" of Aug. 2 regarding Mr. Lord's
career:
In American journalism few men were more influential than Chester
Sanders Lord—Boss Lord—who left the New York "Sun" in 1913, after
41 years' continuous service with that daily newspaper. He was one of
the so-called Dana group.
The second career of Mr. Lord, and it was more than three decades
long, was educational. He had been a Regent of the University of the
State of New
ork since 1897, and was Chancellor of that institution
from 1921 until his death. The first part had been hectic; the second
furnished more repose, but in the Autumn of his life Mr. Lord took delight
In recalling the days of his cubhood, the early years on the "Sun" with
Mr. Dana and Amos Cummings. and he took a keen and paternal Interest
in the evolution of the newspaper.
"There is not a newspaper man in this country." wrote the late Edward
G. Riggs, poli•ical writer on the "Sun," "who would not like to read a
volume or two about Chester S. Lord "
As Managing Editor Mr. Lord piloted the paper through periods of
stress and opulence from the feurpage daily that it was in the early eighties
to the great metropolitan daily that it had become when he handed over
the helm to his successor. Those who worked under him did so with a
devotion that was touching. American men of the press the continent
over admired Boss Lord. The nickname sound forbidding, but it was
bestowed upon him in the most kindly meaning of the term.
Work Involved in Reopening Unlicensed Banks
Described by Comptroller of the Currency J. F. T.
O'Connor.
Under the title "What the U. S. Treasury Is Doing
to Re-open Your Bank," Comptroller of the Currency
J. F. T. O'Connor, addressed a meeting of the Young
Democratic Clubs of America, District of Columbia division,
in Washington on July 19. Comptroller O'Connor said,
"Our work is both remedial and preventative. We desire
to remedy the present situation. Equally we desire to
prevent its recurrence, and to lay the foundation for a
sound banking system." The Comptroller stated that on
March 4 1933 there were 5,938 operating National banks in
the United States. Of this number, he said, 4,509 were
licensed to resume normal banking functions on March 13
14 and 15, leaving 1,429 National banks unlicensed as of the
beginning of business March 16. He added that "within
126 days there have been 390 old banks licensed, 71 new banks
chartered through which funds from unlicensed banks were
made available, and 320 plans of reorganization approved."
"Of the closed banks" the Comptroller stated, "364 have
not submitted plans for reorganization;" he went on to say
that "53 of these bnaks are located in western Pennsylvania.
The depositors should insist upon plans being submitted
by those in charge of the closed institutions. The responsibility rests there." The address, which was broadcast
over a network of the National Broadcasting Co., follows:
Permit me to thank the District of Columbia division of the Young
Democratic Clubs of America for this oppertunity to present to the people
over WMAL and the Blue Network of the National Broadcasting Co. a
brief survey of the work of the Comptroller's office in reopening unlicensed
banks.
Few poeple appreciate the intricacies involved in opening a bank. • A
careful examination must he made of the assets and liabilities, the character
of assets analyzed to establish liquidity; losses must he determined. When
these facts are found, the basis is laid for reorganization. If the capital,
surplus and undivided profits are wiped out, the stockholders must contribute up to 100% of their holdings. Efforts are made to revise the old bank
or establish a new bank; new capital is furnished by stockholders, depositors
and in some instances by the Reconstruction Finance Corporation. This
Corporation operates in three ways: First, by purchase of preferred stock
in the new banks: secondly, loans to the new bank and thirdly, loans to
conservators or receivers upon application of the Comptroller of the Currency where the bank must be liquidated and this money made available
to depositors. Plans presented are carefully analyzed, not all plans are
fair and equitable. I gave an incident of this In my address before the
Minnesota bankers which I will repeat.
After being told over the phone by two Senators, one Congressman, and
a National Committeeman that the reorganization of a certain bank on a
certain plan was most important, a delegation composed of three directors
of the bank and a lawyer were shown into my office. They told me of the
urgent need to reopen the bank, the suffering of the depositors and the fact
that they had been unable to get ony one to approve their plan and were
appealing to me. Inquiry led to the fact that the plan contemplated a
waiver by the depositors of 50% and that the stockholders were not putting
In any money. Further questioning brought forth the fact that one of the
directors present and his wife were the owners of stock to the amount of
$25,000, another owned $12,000 of stock and the third owned $5.000. It
was quite apparent that the waiver by the depositors would not only restore
the bank to solvency but would make the stock of these men and others
worth one hundred cents on the dollar. I told them that the stockholders
should put up money and was met with vigorous argument on three points:
First, they, the stockholders, did not have the money, second, it would
delay the opening of the bank three weeks or more and third, that since
the depositors were willing and anxious to waive 50%, why should the
Government say "no." The file showed the stockholders could raise about
$200,000 and they did, and the depositors waived 40% instead of 50%.
No wonder they were delayed and could not get their original plan approved.
It is true that on the basis of the new plan it took three weeks longer to
reopen the bank but it was worth it to the depositors. I do not mean to
Imply that there are not cases where the stockholders can do nothing, or
that it is not proper and necessary In order to reopen or reorganize banks
984
Financial Chronicle
for the depositors to waive in large amounts, but I am desirous of showing
you some of the problems which confront us.
Our work is both remedial and preventative. We desire to remedy the
present situation. Equally, we desire to prevent its recurrence and to lay
the foundation for a sound banking system. Thus, while we are primarily
concerned with the problem of securing for depositors and creditors the
ultimate in recovery upon their claims, we are as well concerned with the
results of our handiwork in order that having secured for depositors and
creditors the maximum recovery, there will result a needed organization in
a position to function properly and enjoy the respect and good-will of its
customers.
"What," I am asked, "has the Treasury and what has the Comptroller
of the Currnecy, in his supervising capacity, done to accomplish these
results?"
On March 9 1933, Congress enacted the now familiar "Bank Conservation Act," among other things, providing for the reorganization of national
banks and appropriating $2,000,000 for expenditure, under the direction
of the President to carry out the Act. No sooner had the Act been adopted,
than committees were created in each of the Federal Reserve cities to meet
and adivse with the bankers and assist them in making immediate corrections of their troubles. Treasury officials and employees were on continuous duty day and night to assist where possible.
Almost immediately there was set up, as a division of the Office of the
Comptroller of the Currency, the Reorganization Division, the personnel
of which includes more than 100 people. most of whom had have special
banking training. The Comptroller's office receives an average of 7,500
pieces of mail daily. There are over 500 employees of the Comptroller's
office in the field and the Reconstruction Finance Corporation and Federal
Reserve banks have their personnel engaged in assisting in the work.
Their task is to accomplish the results already mentioned. Naturally,
they must have something with which to work. The information upon
which they base their opinion must be correct. Consequently, it was
determined that each unlicensed national bank should be thoroughly
examined by a competent examiner prior to the adoption of any reorganization plan. This work has been carried out as fast as has been humanly
possible, and it is with great satisfaction that I am able to state that every
unlicensed national bank has been examined since the holiday. Every
available foot in the Treasury building is occupied, and to accommodate
the staff, six floors of the large office building across the street have been
secured. From July 1 to July 15, 304 bank committees have discussed
plans and received assistance in their problems of reopening banks. This is
not an unusual number and illustrates the burden upon this department.
On March 4 1933, there were 5,938 operating national banks in the United
States. Of this number, 4,509 were licensed to resume normal banking
functions on March 13, 14, and 15;leaving 1,429 national banks unlicensed,
as of the beginning of business March 16. Within 126 days, there have been
390 old banks licensed, 71 new banks chartered through which funds from
unlicensed banks were made available, and 320 plans of reorganization
approved. Thus since March 15 over 50% of the national banks which were
unlicensed have been either licensed or plans have been approved for their
reorganization, and due to the system which has now been established, the
work is being rapidly accelerated. It should be noted, in connection with
those cases where plans have been approved,that it is largely up to the local
community to make effective such plans, such as securing the consent of
depositors and providing capital. The unopened banks are being given
every consideration and an earnest effort is being made to formulate workable plans of reorganization. Of the closed banks 364 have not submitted
plans for reorganization. Fifty-three of these banks are located in western
Pennsylvania. The depositors should insist upon plans being submitted
by those in charge of the closed institution. The responsibility rests there.
In the event of an arbitrary refusal on the part of the Conservator to
submit plans, the Comptroller of the Currency will remove him. It is, of
course, folly to say that all of such banks will be reorganized, or that less
than a substantial number of the same will not have to be eventually placed
in liquidation. But It may likewise be said that every effort is being made
to prevent such from being the case and where it is possible to do so it is
hoped that sound reorganizations will be accomplished. In this connection, it should be borne in mind that by deferring efforts to reorganize for
a time, seasonal collections, other strengthening of assets, and changing
conditions may make possible whta is now impossible. Such cases, while
not numerous, are not unusual and do exist.
As already mentioned, each plan of reorganization is formulated upon the
basis of the facts and circumstances peculiar to the particular case. Quite
often 1 receive requests for samples of reorganization plans to be adapted
to specific cases. This is impossible. I might add, that the desirable
procedure is for the Conservator of the bank or the reorganization committee to review the bank's assets in the light of the last report of examination and to attempt to formulate an equitable plan which is deemed to
be workable and fair to the depositors. The Chief National Bank Examiner
and the officials of the Federal Reserve Bank, I am sure, will be glad to
assist insofar as possible, and consequently,in such cases It would be well to
present the plan to the Chief National Bank Examiner and the Federal
Reserve bank of the proper district. When the plan has been placed in
form satisfactory to the Chief National Bank Examiner and to the Federal
Reserve bank, it should be forwarded to the Comptroller's office for review
by the Reorganization division and if fair and equitable, will be approved
by me. In this connection, it must be remembered that, as a matter of
law, approval in the last instance is made by the Comptroller of the Currency, and while the examiner sincerely and impartially sets up the facts as
they exist in his opinion, the best plan, in the last analysis, is a question
about which there may be a difference of opinion; and it sometimes happens
we cannot agree as to the best method, in which case the reasons for
disapproval are given and a plan which is deemed workable is Outlined.
whereas possible.
In formulating a reorganization program, there are a number of factors
which must be given consideration. In the first place, the reorganized
upon
bank must have an adequate capital structure dependent not only
with
the minimum requirements as provided by law, but commensurate
the volume of business and deposits which the bank may reasonably expect
must
bank
reorganized
the
by
to enjoy; secondly the assets to be retained
not only be sound but must be of the character responsive to ordinary
of opinion as
banking demands. Often there exists an honest difference
asset,
to the value of a particular asset and often it is argued that a certain
conditions.
changed
under
while of little present value is of potential value
are
banks,
we
reorganizing
in
that
Nevertheless, it must be remembered
of
dealing with assets which msut be responsive to the present demands
business and commerce and we must see that these assets are not only sound
acceptotherwise
but that they conform to the requirements of law and are
able as sound banking assets; thirdly, we must see that the reorganized
bank, when opened, wil have that degree of liquidity necessary to conduct
that it
its business upon a sound and conservative basis and, therefore,
its ordinary
has the necessary cash or the ability to procure the same to meet
upon
bank,
reorganized
demands; fourthly, we must be satisfied that the
by earnthe basis of the reorganization as planned, will justify its existence
for certainly a
ing a sufficient income to meet its expenses of operation,
Aug. 5 1933
bank's earnings offer some indication as to the necessity for the bank and
the place that it occupies in the community; and lastly, we must see that
the management of the bank is such that the continued existence of the
bank is insured after its reorganization; consequently, directors and officers
should be of unquestioned integrity and ability.
These are only some of the problems with which we are daily faced;
others constantly occur and recur.
Bank Conservation Act.
Reference has already been made to the "Bank Conservation Act" of
March 9 1933. This is only one part of the Act to provide relief in the
existing national emergency. Means were also provided for the capitalization of national banking associations by the issuance of preferred stock and
for the purchase of such preferred stock by the Reconstruction Finance
Corporation, where deemed advisable. We have not been unmindful of
the facilities offered in this respect and have availed ourselves of these
privileges.
The provisions of the "Bank Conservation Act" with respect to plans
or reorganization are relatively simple, but its administration is accompanied
with grave responsibilities. As you know, the Act provides that a plan
of reorganization requiring the consent of depositors and other creditors or
stockholders, or both depositors and other creditors and stockholders shall
become effective when the Comptroller of the Currency shall be satisfied
that the plan of reorganization is fair and equitable as to all depositors,
other creditors and stockholders, and is in the public interest, and when,
after reasonable notice, depositors and creditors representing at least 75%
in amount of the bank's total deposits and other liabilities, as shown by its
books, and stockholders representing at least two-thirds of the bank's
outstanding capital stock, or both, as the case may be, shall have consented
in writing to the plan of reorganization. All creditors are to be treated
upon the same basis and no creditor, not entitled, as a matter of law, to
payment in full is to receive more than his pro rata share. In addition, the
plan must be in the public interest and for the public good, as distinguished
from the benefit that may possibly inure to a chosen few.
My attention has been called to a circular issued by the National Depositors Committee. 1 quote from that circular:
"Even where the plans do not contemplate releasing the stockholders,
depositors are being asked to accept stock for all cr most of their deposits,
with no assurance that they will be able to cash their stock in, when the
objects of this corrunittee are attained."
Let me say this is possitively untrue and unfair. I quote again from the
same circular:
"Yet the fact is that throughout the entire banking crisis, stockholders
have succeeded heretofore in influencing Federal and State agencies.
Both the United States Treasury and the Reconstruction Man(e Corporation have consistently approv ed plans drawn by and in the interest of
the stockholders."
Let me say that this statement is also positively untrue and unfair.
I would pass without an observation this unfair critcism were it not for
the fact that counsel for the committee is a distinguished member of the
American bar.
Permit me to give you some figures which will give you a clear view of
what has been accomplished by the various governmental agencies in giving
relief to depositors. On Dec. 311932, deposits in national banks amounted
to $18,301,916,000. On April 4 1933, the deposits in unlicensed national
banks amounted to $1,865,330,000, representing appro: imately 10% of
the aggregate amount of deposits on Dec. 31 1932. On July 6 1933, deposits in unlicensed national banks, exclsuive of banks in the District of
Columbia and the City of Detroit, amounted to $1.058.902.000, representing slightly more than 5% of deposits as of Dec. 311932.
If we deduct the amount of deposits which will be released immediately
upon the consummation of the approved plans, the total amount of frozen
deposits in unlicensed national banks, exclusive of Detroit and the District
of Columbia, will be approximately 4% of the total amount on deposit on
Dec. 31 1932. These re ults are said by some to be remarkable in the
circumstances and are attributable mainly to three factors: First, the
co-operation, tireless energy and sympathetic understanding of President
Franklin D. Roosevelt, the calm judgment and persuasive force of his
distinguished Secretary of the Treasury, Flonorable William H. Woodin
and the keen discriminating financial mind of the Executive Assistant
Secretary of the Treasury, Walter J. Cummings. Secondly, the support
of the Reconstruction I inance Corporation, its able board, the Chairman
of which is Honorable Jesse Jones, who have worked corscientiously and
strenously and in complete harmony with the Comptroller's office to bring
about this result. And thirdly, the unprecedented economic recovery.
This is best reflected in the condition of banks generally. Let me give
you an illustration. Twenty five banks and trust companies in greater
New York increased their deposits by close to one billion in the three months
ended last June 30, and by more than $700,000,000 compared with a year
ago.
In conclusion, let me say no discrimination has been made between
Republican dollars and Democratic dollars in closed banks. My department has assun eel that the Republican depositor although probably much
less in need of his money than his Democratic friend, is just as anxious to
get his share of the remaining 5% now in closed national banks. Of the
many hundreds of depositors. creditors, stockholders and officers with
whom I have discussed plans of reopening, I have never inquired and do
not know the politics of any. Let me say definitely and positively that the
Comptroller of the Currency is interested in your plans for reopening your
bank and giving relief to the depositors and not in your politics. There
has been some fine illustrations of self sacrifice and true Americanism by
officers and stockholders of many banks. Men and women have come
forward and volunterred their 100% assessment, waived their deposits,
subscribed for new capital, in order that the depositors should not lose a
single dollar. I mention this because some are prone to only mention
those connected with the banks who have tried to evade their legal and
moral responsibility and have been compelled by legal proceedings to make
their just contribution.
Monthly Report of Railroad Credit Corporation—
Second Repayment to Participating Carriers to Be
Made Aug. 15—Will Amount to $742,403—Total
Repaid After Aug. 15 Payment Will Be $3,732,174.
The Railroad Credit Corporation, which was set up by
the railroads to administer funds derived from emergency
rates granted by the Inter-State Commerce Commission
under Ex Parte 103, is now engaged in liquidating its affairs,
and on Aug. 15 will make another repayment to the participating carriers, the Corporation announced Aug. 3. The
first distribution to the participating carriers (noted in our
issue of July 8, page 257) was made on July 15 1933, at which
Volume 137
Financial Chronicle
985
time they received 4% of the amounts they have paid into
the Corporation, or $2,989,771, of which amount $1,221,892
was paid in cash and the remaining $1,767,879 was credited
on the obligations of carriers indebted to the fund. The
Corporation's announcement Aug. 3 continued:
purposes. It was urged in support of Section 7(b) that the Government
should not use its power and authority, under existing conditions, in
such a way as to lead to a further reduction in railroad employment. The
restriction relates to such action as is required or impelled or induced
under authority of the Government through some agency or mechanism
created by the new Act.
The second distribution to be made on Aug. 15 will amount to 1% of
the amounts that the participating carriers have paid into the Corporation,
or 8742,403.
This will mean that when the second distribution has been made, a total
of 83,732,174 will have been repaid to the participating carriers.
In the 15 months ended on March 31 1933 that the Marshalling and Distributing Plan administered by the Railroad Credit Corporation was in
operation, the participating carriers paid to the Corporation net revenues
derived from the emergency rates amounting to $74,744,279. It was from
this fund that the Corporation made loans to various railroads to prevent
defaults in fixed interest obligations.
As these loans are repaid, the Railroad Credit Corporation will make further distribution from time to time to the participating carriers.
Following is a letter signed by E. G. Buckland, President of the Railroad Credit Corporation, and addressed to the chief executives of the participating carriers, which accompanied the report:
"Pursuant to the provisions of Paragraph 10 of the Marshalling and
Distributing Plan, 1931, the Railroad Credit Corporation submits herewith statement of its financial condition as of July 31 1933.
'"I'he principal changes recorded on the July 1933 statement are incident
to the first disaibution under the Plan, authorized by the Board to be
made July 15 1933, based on the fund of record June 30 1933. This resuited in a repayment of $2,989,771.21 to the participating carriers upon
their net contributions to the fund. Of this sum $1.221,891.54 was paid
In cash and the remainder, or $1,767,879.67, was credited on the obligations of carriers indebted to the fund.
"Further distributions will be made from time to time as funds become
available for that purpose, and to that end, partial or full payment of the
Credit Corporation's loans will be sought whenever such payment may be
obtained without undue hardship upon borrowers.
"The Board has now authorized, as distribution No. 2, a repayment of
1% to the participating carriers. This distribution will be made as of
Aug. 15 1933, based on the fund of record July 311933.
In this connection it should be understood that all distributions are
subject to adjustment as the fund basis changes by reason of tax refunds
and other causes."
Holdings of United States Steel Corporation Stock
in Other Countries.
The quarterly statement of the United States Steel Corporation reporting the amount of its stock held abroad
shown, as of June 30, a decrease of 3,420 common shares
since March 31 and 5,573 shares of preferred. These reductions follow increases in the previous quarter of 11,380
common and 620 preferred shares. There are now held in
foreign countries 280,898 shares or' common, representing
3.23% of the aggregate outstanding. The preferred held
abroad totals 73,397 shares, being 2.04% of the aggregate.
Below we show the figures for various periods since March 31
1914. On the latter date the amounts in other countries
were, of course, much greater than at present.
The report for the month follows:
THE RAILROAD CREDIT CORPORATION REPORT TO INTER-STATE
COMMERCE COMMISSION AND PARTICIPATING CARRIERS,
AS OF JULY 31 1933.
Balance,
Net Change
Assets—
During July 1933. July 311933.
Investment in affiliated companies—Loans made __d$1,687,837.05 $70,531,191.96
Cash
369,574.92
d1,030,250.68
Petty cash fund
25.00
Special deposit—Reserved for taxes, tte
1.503,575.00
Miscellaneous accounts receivable—Due from contributing carriers
d164,095.13
94,966.81
Interest receivable
23,145.21
417,380.56
Unadjusted debits
130,298.33
d44,035.04
Expense of administration—Jan. 1 to July 31, inclusive, 1933
10,552.51
80,623.92
Total
d$2,892,520.18 $73,127,636.50
LiabilUtes—
Non-negotlable debt to affilllated companies
d53,090,558.60 a$71,653,720.98
Unadjusted credits
d549.86
423,702.08
Income from funded securities—Interest accrued on
loans to carriers
198,297.92
971,123.17
Income from unfunded securities and accounts—
Ow Interest on bank balances, Scc
290.36
77,890.27
Capital stock
1,200.00
Total
d$2,892,520.18 $73,127,636.50
d Denotes decrease.
a Emergency ravenues to July 31 1933
Less refunds for taxes
Less distribution No. 1
Approved:
E. R. WOODSON,
Comptroller.
Washington, D. C., Aug. 1 1933.
No. 17.
$75,425,431.92
$781,939.73
2,989.771.21
3,771,710.94
$71,653,720.98
Correct!
ARTHUR B. CHAPIN,
Treasurer.
Railroad Jobs Not Guaranteed—Emergency Transportation Act Merely Bars Co-ordinator from
Reducing Personnel Below May.
Nothing in the Emergency Railroad Transportation Act
provides for absolute protection to railroad workers against
furloughs or dismissals by individual railroad companies,
Joseph B. Eastman, Transportation Co-ordinator, said
July 22. His statement, in response to communications
from employees who apparently were under the impression
that the emergency law prohibits separations after its
effective date last May, reads as follows:
Section 7(b) of Title I of the Emergency Railroad Transportation Act,
1933, contains restrictions on reductions in the number of employees
In the service of a carrier and in their compensation "by reason of any
action taken pursuant to the authority of this title." Judging from many
letters which the Co-ordinator has received, it seems to be a common
Impression among railroad employees that this paragraph of the Act
protects them absolutely from dismissals or furloughs after the effective
date of the Act. In the opinion of the Co-ordinator this impression Is
not correct. It overlooks the words "by reason of any action taken pursuant to the authority of this title." The restrictions apply to any action
which may be taken by the Co-ordinator or the Commission under authority
conferred by the Act, or to action taken as the result of anything done by
or through the carriers' Regional Co-ordinating Committees, the creation
of which the Act directs. They do not apply, in the judgment of the
Co-ordinator, to any lawful action taken by individual carriers or by
carriers jointly which does not result from any authority conferred by
the Act or involve the use of any agency or mechanism which it creates.
The Co-ordinator does not believe that It was the Intent to prohibit
or restrict voluntary economies In operation which were lawful when
the Act was passed and are instituted in ordinary course of management.
The general purposes of Title I of the Act are, among other things "to
avoid unnecessary duplication of services and facilities . . . and to avoid
other wastes and preventable expense." The Title undertakes to invoke
the powers of the Government and set up machinery to assist in these
FOREIGN HOLDINGS OF SHARES OF U. S. STEEL CORPORATION
June 30 June 30 Dec. 31 Dec. 31 Dec 31
1933. 1932. 1932. 1931. 1930.
----Common Stock.
Africa
411
331
219
306
199
Algeria
99
Argentina
117
88
--4
--86
474
262
Australia
311
222
217
2.307 2,281 2,255 2,234 3.418
A ust ria
Azores
1
1
1
1
1
Belgium
3,1 8 2,913 3,130 2.663 2,756
217
227
Bermuda
227
227
150
7
17
17
Bolivia
17
1
412
Brazil
377
406
267
242
British India
54. iii
55:,
- 83 5524 57Canada
56-.8on
558
538
528
599
Central America_
290
493
575
562
549
Chile
366
1,412
333
456
143
40
China
1
18
Colombia
1
1
18
2
2
Denmark
2
8
23
23
23
--ia
Ecuador
31
31
1
31
Egypt
1
59,564 45.368 63,397 44.575 43.140
England
65
70
64
66
Finland
15.270 16.876 15.906 14,522 13-.375
France
1,380 1,452 1,507 1.197 1.037
Germany
Gibraltar
--- :1
-i6;-3
--i
'
--8
Greece
116,136 69,881 102,540 53.725 43.654
Holland
265
149
335
149
24
Hungary
102
773
113
214
16
India
699
688
667
656
425
Ireland
1.562 1.226 1,280 1.107
903
lta'y
3,123 3,385 3,063 1.345
210
Japan
37
37
37
37
7
Java
37
62
Luxembourg_ _ _ _
37
37
33
5('
56
56
56
56
Malta
1,254 1,540 2,043 1,425 1,035
Mexico
164
183
16?
Norway
129
108
5
5
Paraguay
80
20
103
---§
--ii
Peru
49
49
48
39
28
Poland
9
9
1
Portugal
9
2S
28
28
--i8
31
Rumania
222
309
309
10
Russia
8
3,104 2,945 3,449 2,887 2.814
Scotland
Servia
1-,in 2-.(5
2:15g6 2:15,6 2-.
Spain
5
5
Sumatra5
1,821
1,217 1.837
-goo
938
Sweden
3,274 2,285 2,929 1,511 1,249
Switzerland
60
65
65
35
5
Syria
219
219
219
219
219
Turkey
Uruguay
-iAi
--iii
--i
--ii
Venezuela
Wales
531 87.9 67,84
West Indies
8-.307 8-.518
---------____
---_
No address
Total
Preferred Stock
Africa
Algeria
Argentina
Australia
A cstria
Azores
Belgium
Bermuda
Brazil
British India_
Canada
Central America _
Chile
China
Colombia
Denmark
Ecuador
Egypt
England
France
Germany
Greece
Holland
Hungary
India
Ireland
Italy
Japan
Luxembourg_
Malta
Mexico
Morocco
Norway
Poland
Peru
Portugal
Russia
Scotland
Serbia
Spain
Sweden
Switzerland
Turkey
Wales
West Indies
Total
Der.31 Dee- 31
1929
1914.
183
-ih-,
198
2.210
3
2,645
150
1
1
340
3
3
630
1,866
46
212
--i..i
17
65:g.
54,259
456
332
331
3
34
13
1
18
----
5
--8,
37.968 710-,iii
12-K3 64-.159
880 2,664
100
--8i
42,544 342-,6:15
15
14
343 2-,991
855
146
46
5
7
__
33
56
--ii
36
300
76
70
--il
_-_ _
-iio
— iii
---§
4
2.735
4,208
1:61?.
1,225
-6,46
2,680
1
1,470
-fi9
--id
---:i
6.092
----
-iii
1,872
___
280,898 222,073 273,038 199.965 182.072 182.150 1193064
114
114
114
104
104
104
-- ii
60
998
120
555
533
—56
60
979
120
535
533
--:16
70
998
120
540
533
- W)
60
1.009
120
523
533
-- e)
60
528
120
523
533
--:
-36
60
538
120
570
520
20,57-1 21-,94 2 .0=1 21:468 257,8M
30
130
--,h
42
42
--4
--i..?
124
124
124
124
132
5
5
5
5
5
217
217
217
217
217
13
11
11
--ii
--ii
--ii
17,921 23.912 23,217 27.032 34.135
8,930 8,619 8.776 8.783 9.641
1,049
957
947 1.017 1.016
____
13
13
13
13
11,507 10,067 10.957 9,832 10.509
8
10
8
10
882
606
698
596
596
590
541
601
554
520
1,383 1,419 1,423 1,409 1,432
1
1
1
1
1
63
63
63
63
.63
i
--6
64
--74
--ii
53
34
200
--ii
1
100
-Thi
1
200
----
----_
217
1,514
- 17
1,419
2'17
1,416
--17
1.493
---7
1,508
371
803
2,088
103
-ioi
740
2,070
100
-5r71
795
2,490
103
-445
722
1,998
100
-ioi
722
2.018
100
--ii
--ii
53
73
11
484
2,088
-61
21
31
81
,H
26--32
136
5
217
34111
12
42
--49
--ii
-iio
32.132 174,906
10,658 36,749
1.091 3,252
13
38
10.369 29,000
596
514
1.385
1
63
--i:i
--
4.119
1,678
81
-iot
235
7
27
-------5
12-0
7
43
1.442 13,747
220
-482
432
717 1,137
3.488 2,617
100
100
2.393 27,464 2.4172-.86
2,737 2-.A5
1172
73,397 77,799 78.350 80.792 93.259 04.524 309,457
Financial Chronicle
986
The following carries the comparisons back for a long
series of dates:
COMMON.
PREFERRPD.
Shares. Per Ct.I DateS'-ire.. Per Ct.
914 _____1.285.6:36 25.29 Mar. 31 914
3.67
312.311
914
1.274.247 25.07 I June 30 91.1
312.832
8.67
g.so
309,875
911
1.231.968 2.1.94 . Sept.30 914
911
1.193.064 2:3.47 1 Dec. 31 914
309.457
8.59
915
1.130.209 22.23iMar. II 915
308.005
8.55
Qui
957.587 18.84 I June 30 915
8.41
303.070
915
826.8:13 16.27 , Sept. 30 915
297.691
8.26
915
696.631 13.70 Dec. 31 915
274.588
7.62
962.091
916
634.469 12.4S Mar. 31 916
7.27
916
625.251 12 .30 June 30 916
2:36.361
6.56
916
537.809 10.58 Sept. 30 9)6
171.096
4 75
916
509.6:12
9.89 Dec. 31 916
156.412
4 :14
917
494.338
9.72 Mar. 31 917
151.757
4.21
917
481.342
9.45 June 30 917
142.226
394
917
140.039
477.109
9.39 Sept. 10 917
3 59
917
48-1.190
9.52 Dec. 31 917
140.077
3 88
918
485.705
9.56 Mar. 31 9113
110.194
3 90
918
491.464
9.66 June 30 918
149.0:32
4 13
918
495.009
9.73 Sept.. 0 918
147.845
4.10
918
491.580
9.6:1 Dee. 31 91%
148.223
4.11
919
493.552
9.71 June 10 919
146.478
4.07
919
465.434
9.15 Mar. 31 919
149.832
4.16
919
391.54:3
7.76 Sept. 30 919
143.804
3 99
919
368.895
7.26 Dec. 1 919
138.566
3.84
920
348.0:36
6.84 Mar. 1 921)
127.562
3.54
920
312.567
674 June 30 920
124.316
3 46
920
323.4:38
6.36 Sept. 30 920
118.212
3.28
920
292835
5.76 Dec.
920
111.436
3.09
921
289.144
5.69 Mar. 31 921
106.781
2 93
921
288.749
5.6% June 10 921
105.118 2.91
921
285.070
2.87
5.60 Sept. 30 921
103.447
921
280.026
5.50 Dec. 31 921
128.818
3.58
929
980.132
5.51 Mar. 31 929
128.127
3.55
929
3.4:3
275.096
5.41,June :30 999
123,844
922
270.794
5.:32 Sept.:30 999
123.710
3.43
92'
261.768
5.15,Dec 30 922121.308 3:36
023
239.:310
4.70 Mar, 29 923
119.7:38
3.32
923
207.041
4 07 June 30 923
117.631
3.27
92:1
210.799
4.14 Sept.:in 923
118.435
.29
203.109
92:3
399 Dec.31 923
113.155
.10
924
201.636
3 96, Mar.:31 924
112.521
1.14
921
203.059
3.99 June 30 994
112.191
3.12
924
201.691
3.97 Sept.30 924
111.557
1.01
113.759 3 19
924
198.010
389 Dec 31 924
925
195.689
385 Mar. 31 925
111.463
3.10
925
127.:335
3.50 June 30 925
111.800 310
925
2.50 Sept. 30 925
127.078
112.679
3.12
925
119.414
2.35 Dec il 925
113.843
3.16
926
122.098
2.40 Mar. 31 926
3.13
112.844
129.020
2.5:3 June 10 926
926
111.908
3.10
12:1.557
926
2.4:3 Sept. 30 926
112.822
3.12
926
12:3.090
2.52 Dec il 926
112.562
3.14
120.348
927
2.37 Mar. 31 927
113.478
3.15
168.018
2.36 June 10 927
927
113.4:32
3.15
17:1.122
2.4:3 Sept.'30 927
927
112.835
3.14
2 49 Dec. 31 927
177.452
927
111.262
3.08
928
1,
7.006
2.62 Mar. 31 928
112.385
3.12
180.829
June
30
2.54
92%
928
3 06
110.023
928
175.039
2.46 Sept.30 928
109.626
3.03
028
166.415
2.34 Dec. 31 928
101.912
2.83
173.920
929
2.44 Mar. 31 929
101.627
2.82
183.396
929
2.28 July 31 929
96.362
2.68
929
176.485
9.18 Sept. 30 929
91.724
2.64
189.150
929
2.24 Dec 31 929
93.524
2.63
930
171.917
2.00 Mar.:31 9:30
9-1.399
2.62
gin
170.803 1 99 June 30 930
95.21:3
2.64
9:30
173.824
2.00 Sept. 30 9:10
9:3.7:37
2.61
9:10
2.09 Dec. :31 930
182.072
93.259
2.60
9:31
182.804
2.10 Mar. 31 931
91.617
2.62
100.86g
9:31
2.19 June 30 931
91.991
2.55
196.416
2.26 Sept.30 931
9:31
89.301
2.48
91l
199.965
2.29 Dee. 31 931
80.792
2.24
932
215.908
2.48 Mar. 31 939
79.911
2.22
939
222.073
2.56 June 30 9:32
2.16
77.799
9:32
251,896
2.89 Sept.30 939
79,9:36
2.22
273.038
3.14 Dec 31 032
932
78.350
2.18
013
244.418
3.27 Mar.31 923
78.970
2.19
280,898
3.23 June 30 1933
933
73,397
2.04
DateMar. 31
June 30
Sept. 10
DNC. 11
Mar. 31
June 30
Sept. in
Dec. 31
Mar. II
June 0
Sept 10
Dec. 31
Mar. 1
June 30
Sept. 30
Dec. 31
Mar. il
June 30
Sept. 0
1)..e. 1
Mar.
Jute- 30
Sept.:30
Dec. 31
Mar 31
June 30
Sept 30
31
lre.
i
Mar :11
Jut e 31
Sept.30
Dec 11
Mar. 31
June 30
Sept 30
Dec. 10
Mar 29
June 30
Sept. 30
Dec. 31
Mar 31
June 30
Sept. 30
lit-c. 11
Mar. 31
June 10
Sept. 10
Dec. 31
Mar 31
June 30
Sept. 30
Dec. 31
Mar 31
June 30
Sept 30
Dec. 31
Mar. 11
June 30
Sept. 0
1)ec. 31
Mar.31
July 1
Sept. 30
Dec. 31
Mar 31
June 10
Sept. 0
Dec 31
Mar 31
June 30
Sept. 0
Dec. 31
Mar. 31
June 30
Sept. 3()
Dec. 31
Mar. 31
June 30
In the following table we also show the number of shares
of the Steel Corporation distributed as between brokers and
investors as on June 30 1933 and June 30 1932:
CommonJune30 '33.
Brokers. domestic and foreign_ _ _ 1.558.573
Investors, do,nestic and foreign_- 7,144,679
PreferredBrokers, domestic and foreign____
344.309
Investors, domestic and foreign__ 3.258,502
Ratio. June:10 '32. Ratio.
17.91%
1.096.057 12.60%
82.09%
7,607,195 87.40%
9.56%
90.44%
280.805 7.79°1
3,322,006 92.214
The following is of interest as it shows the holdings of
brokers and investors in New York State:
CommonBrokers_
Investors
r PreferredBrokers
Investors
June 30'33. Ratio. June 30'32. Ratio.
1,025.112 11.86%
1.46:3.253 16.81%
1,623,168 18.65%
1,878,884 21.59%
317.387 8.81%
1,392.887 38.66%
253.876 7.05%
1,474,341 40.92%
Co-ordinator of Railroe d 3 Eastman Urges Roads to
Speed Repairs in Back-to-Work Drive.
The large railroads of the nation were asked on Aug. 3
to fall in step with the Administration's "back to work"
campaign by spending "every available dollar" on long overdue repairs. Joseph B. Eastman, Federal Co-ordinator of
Transportation, made the appeal in a telegram to the presidents of the major carriers. The text of the telegram follows:
Reports to me indicate that the railroads have restored about 40.000 men
to work since June 1. This is good, but is it all that can be done? A
country-wide drive is on to increase employment, build up purchasing power,
increase production and sustain It by consumption. If all pull together
this drive will succeed, but it may fail if some hang back. The railroads
will gain directly and immediately if it succeeds, and they have much deferred maintenance work which sorely needs to be done. Money spent for
such work will be well spent and consistent with economy. I strongly urge
that the railroads spend every available dollar in putting men back to work
and In so doing their part In the drive they will I believe serve their own
Interests as well as those of the country. Further economies In operation,
without impairment of service, must not ultimately be neglected, but the
Immediate need of the country Is the return of men to work. I have every
reason to believe that the railroad executives sympathize with this point of
view and will co-operate,
In addition to the employees who have been restored to
work, the railroads have also in a considerable number of
Aug. 5 1933
instances increased the hours of employment of men already
at work.
Figures announced by the Inter-State Commerce Cornmission on Aug. 3 showed the railroads were employing
938,406 men during May, the month below which the Railroad Co-ordinator Act says the roads may not go in cutting
down personnel. This was a gain over April and March,
but a reduction of 126,753 under May a year ago.
______________
Rail Director Adds to Staff-Federal Co-ordinator Gets
19 Additional Aids-Salaries Range from $4,200
to $15,000 a Year.
Nineteen additional appointments to the staff of the Federal Co-ordinator of Transportation were announced Aug. 2
by the Co-ordinator, Joseph B. Eastman, who added in
response to inquiries that the salaries of his assistants range
from $4,800 to $15,000 a year. The personnel selections
follow:
N. D. Ballantine of Booneville. Mo.. Assistant Director, Section of Car
Pooling; Walter Bockstahler, of Evansville, I
Assistant Dirtor.
Director,
Transportation Service; Edward M. Johnson, of Clyde. Kan., Assistant,
Transportation Service; Arthur F. White of Manhattan, Kan., Assistant,
Transportation Service; Robert C. King of Junction City, Kan., Assistant.
Transportation Service: Carroll W. Brown of Cleveland. Assistant Director, Purchases Section* George A. Cooper. of Mount Pleasant, Pa., Assistant. Purchases Section; H. P. Dalzell of Philadelphia, Assistant, Parchases Section.
The Research Staff.
The following were appointed to the research staff:
Charles S. Morgan of Niles, Mich.; Norman D. Haley of New I ork;
F. R. Bell of Buffalo; 1'. A. Conway of New I ork; H. D. Folsom of Salt
Lake City; R. E. Freer of Cincinnati: W. L. Fulton of Oxford, Miss.;
L. T. Paxton of New Jersey; Warner Tufts of Chicago; T. K. Urdahl of
Madison, Wis., and H. C. Wilson of Vandalia. III.
Messrs. Morgan and Haley are employees of the Inter-State Commerce
Commission and their services have merely been loaned to the Co ordinator.
Messrs. Bell. Conway, Folsom, Freer and Fulton are furloughed employees
of the Commission's Valuation Bureau.
Salaries.
As for the salaries of previous appointees. Mr. Eastman noted that his
term of office ends on June 16 1934. unless extended for one year. and that
the research work preliminary to recommendations for legislation would be
of even shorter duration and in most instances was not likely to extend
beyond Nov. 1 next.
"Because of the temporary character of the work," he said, "considerable
expense is involved for assistants who have been obliged to make their
headquarters at Washington, New York, Chicago or Atlanta. and at the
same time maintain homes elsewhere.
"The Co-ordinator also has found it necessary to secure the assistance
of men with a high degree of skill and experience and of recognized standing in railroad work, but has not thought it wise to attempt to draft the
services of executives of the larger railroads who might afford to serve the
Government regardless of compensation. . . ."
Many of Mr. Eastman's assistants will receive salaries In excess of his
own, which is $8.500. taking Into account the 15% Federal salary cut.
The salaries announced follow:
V. V. Boatner, Western Regional Director, $15.000: H. J. German of
Pittsburgh, Eastern Regional Director, $15,000; C. E. Weaver of Savannah,
Southern Regional Director, $15.000; J. R. Turney of St. Louis. Director
of the Transportation Service Section. $15.000.
M. M. Caskie of Mobile, Southern Traffic Assistant. $8.500; W. H.
Chandler of New Iork. Eastern Traffic Assistant. $8.500; C E. Hochstedler of Chicago, Western Traffic Assistant. $8,500: R. L. Lockwood of
Washington, Director of the Purchases Section, $7.503; 0. C. Castle of
Houston, Director of the Car Pooling Section, $7,51,0; J. W. Carmait of
Washington, Executive and Legal Assistant, $7,500; J. L. Rogers of Washington, Executive Assistant, $7,500.
Other salaries range from $4,200 to $8,000 annually.
New7Laws in Indiana and Wisconsin Based on Russell
ham Sage Foundation's Revision of Uniform Small
10, Loan Law.
New laws governing loans to consumers (people with Income but no bank security) have been enacted by the Indiana
and Wisconsin Legislatures. Governor Comstock has announced that these and other plans will be considered for
submission to the next session in Michigan.
These are outstanding forward steps in the "new deal" for
organized consumer credit taken in the State Legislatures,
according to L. C. Harbison, President of Household Finance
Corp., which engages in the lending of money under the small
loan laws. Since the previous general legislative session, in
1931, three other States, New York, New Jersey and West
Virginia, amended existing laws to increase the maximum
legal interest rates on consumer loans.
It is stated that the new features are based largely upon
the Russell Sage Foundation's latest (1932) revision of the
Uniform Small Loan Law which regulates companies making
loans up to $300 to wage earners and stipulates the maximum
interest rates which may be charged. The Foundation first
proposed the law, as enacted in many States, about 20 years
ago, and has recommended revisions to meet new conditions
several times since. The Indiana-Wisconsin provisions
transferring to a commission the power to set maximum
charges were added to the newest revision. Mr. Harbison
said that "25 States now possess laws regulating small loans
and interest rates."
Volume 137
Financial Chronicle
Plans for Reorganizing Mortgage Guaranty Business
of National Surety Co. Discussed.
Plans for reorganizing the mortgage guaranty business of
the. National Surety Co. were discussed July 26 at a meeting of the special committee of insurance commissioners
serving as a protective committee for bondholders, held at
the offices of the State Insurance Department of New York.
Superintendent of Insurance George S. Van Schaick and his
counsel, Milton B. Ignatius, met with the committee and reviewed with it the rehabilitation plans which are under way
and contemplated.
Several spokesmen for bondholders appeared before the committee to
present their views. Among them were representatives of the Sun Life Insurance Co. of America, Baltimore, Md.; C. H. Berets & Co., New York City;
Stein Bros. & Boyce, Baltimore, Md., and C. F. Garrat, Grand Rapids, Mich.
The following members of the insurance commissioners committee were
present: Superintendent Charles C. Greer, Alabama ; Superintendent
IIerbert L. Davis, District of Columbia ; Commissioner Wilbur D. Spencer,
Maine; Commissioner Charles E. Gauss, Michigan and Commissioner William
A. Sullivan, Washington.
A public meeting of holders of mortgage guarantees of the
National Surety Co. for the purpose of answering their inquiries and of obtaining their suggestions on possible reorganization plans was held in the State Office Building on
July 27 by Superintendent of Insurance George S. Van
Schaick as rehabilitator of the company. In addition to a
large group of bondholders and their representatives who
were present, six of the seven members of the special protective committee of state insurance commissioners attended.
Superintendent Van Schaick explained that the rehabilitation proceeding
was undertaken in lieu of liquidation in order to avert the serious losses
to creditors which would have resulted from forced disposition of assets at
this time. Whatever reorganization plan may be effected for the mortgage
guaranty business of the National Surety Company, he said, would be wholly
In the public interest. He told the bondholders that they should feel free
to draw their own conclusions from the facts presented and to act according to their own judgment. He expressed his pleasure over the co-operative
spirit shown by those present.
Although no detinite reorganization plan was proposed, the consensus of
opinion seems to be that a new mortgage corporation should be formed in
working out this phase of the rehabilitation program. Milton B. Ignatius,
special counsel for the Rehabilitator, stated that a speedy reorganization was
desirable.
Bondholders were asked to submit in writing to the Rehabilitator any
suggestions which they believe will assist in working out the mortgage situation. All such suggestions will receive thorough attention and analysis,
Superintendent Van Schaick assured the group.
The insurance commissioners committee was represented by Commissioner Merton L. Brown, Massachusetts, Chairman ; Superintendent Charles
C. Greer, Alabama ; Superintendent Herbert L. Davis, District of Columbia ;
Commissioner Wilbur D. Spencer, Maine ; Commissioner Charles E. Gauss,
Michigan and Commissioner William A. Sullivan, Washington.
Harriman Hearings Postponed to Aug. 29 After Banker
Has Heart Attack in Court.
Hearings on the mental condition of Joseph W. Harriman
former president of the Harriman National Bank and Trust
Company of New York City, who is under indictment on
the charge of altering some of the accounts with the bank,
were ordered postponed until August 29, after Dr. Menas S.
Gregory of Bellevue Hospital had testified before Federal
Judge Francis G. Caffey on Aug. 1 that Mr. Harriman was too
ill to appear in court. On the preceding day Mr.Harriman
had suffered a heart attack in court, and was immediately
returned to the hospital, where he is now in a medical ward.
Former Officers of American Bankers Association
Identified with 0 ficial Staff of Bank of America
to Attend Annual Convention of A. B. A.
Seven officers of the Bank of America, five of whom are
members and former members of the Association's official
family, are planning to attend the annual convention of
the National organization to be held .n Chicago, Sept. 4 to 7.
The Bank of America's representatives will be A.P. Giannini,
Chairman of the board; Will F. Morrish, President; Arthur
fieynolds, Vice-Chairman of the Board; Russell G. Smith,
Cashier; J. E. Huntoon, Vice-President; D. Porter Dunlap,
Assistant Vice-President, all of San Francisco, and P. R.
Vice-President, of Los Angeles. All of these
officers of the Bank of America are active in American
Bankers Association affairs. Mr. Giannini is a member of
the Association's Economic Policy Commission. Mr. Reynolds is a past President. Mr. Morrish and Mr. Williams
are members of the Executive Council, and Mr. Huntoon is
a member of the Agricultural Commission.
Booklet Issued by American Bankers Association on
Service Charges in Commercial Bank Management
Series.
The Committee on Bank Administration and Banking
Practices of the American Bankers' Association, under the
Chairmanship of Fred W. Ell worth, Vice-President of the
Hibernia National Bank, New Orleans, La., has issued,
987
booklet XIII in its series on commercial bank managements
dealing with service harges. In the foreword it is pointed
out that one of the leaks which has been a drain on bank
earnings is the unprofitable checking account. Banks, in
common with other lines of essential business, are entitled
to a fair return for their services, and a fair method is to
charge each account in proportion to services rendered;
the measured service charge secures this result, the foreword
says.
Some of the topics covered in this booklet are: "Why
Your Bank Should Adopt Measured Service Charge,"
"Bankers Eliminate Losses by Adopting the Measured
Service Charge," "Advantage of Co-operation with Other
Banks in Your City or County in Adop ing the Measured
Service Charge," "How to Determine the Charges Your
Bank Will Adopt," "How to Install and Operate Measured
Service Charge." Suggested letters, booklets, folders, &c.,
for use in mailing to depositors are also given.
Copies of this booklet may be obtained from the Bank
Management Commission, American Bankers' Asso ciation
22 East 40th St., New York City, for 25 cents.
Suspension of Holidays and Opening of Banks for
Business.
Since the publication in our issue of July 29 (page 799)
with regard to the banking situation in the various States,
the following further action is recorded:
ALABAMA.
The Reconstruction Finance Corporation has authorized
the purchase of $25,000 preferred stock in the City Bank of
Tuskegee, Ala., a new bank.
The preferred stock authorization is contingent upon the
subscription of an equal amount of common stock by those
interested in the organization of the new bank.
ARKANSAS.
That a new bank is being organized in Jonesboro, Ark.,
to replace the closed Bank of Jonesboro, is indicated in the
following dispatch from Jonesboro under date of July 23,
printed in the Memphis "Appeal":
A petition seeking a charter for a new bank for Jonesboro may be filed
with the State Bank Commissioner within the next 10 days.
Organization plans which have been in progress for the past two months
were believed near completion after the city water and light plant pledged
$15.000 in deposits in the defunct Bank of Jonesboro as payment for stock
in the new bank.
The plan for forming a new bank is based on the idea of getting depositors
In the closed institution to subscribe their deposits at a discount as stock
In the new Institution.
A committee including attorney E. L. Westbrooke, Sr.. Roy Jacobs and
attorney Joe C. Barrett, is handling details of the plan. They stated
Friday that deposits totaling more than $130,000 already had been pledged
toward the project. This would amount to $40,000 in stock.
ILLINOIS.
The State Auditor of Illinois has taken over the East Side
Trust & Savings Bank of Chicago, according to Chicago
advices on Aug. 1 to the "Wall Street Journal," which added:
The bank has been closed since the banking holiday in March, this year
Deposits amount to $273,000, capital Is $200,000, and surplus $50.000. .
Advices from Quincy, Ill., on July 30, printed in the Chicago "Journal of Commerce" stated that the South Side
State Bank of Quincy had been permitted to reopen by the
State Auditor.
INDIANA.
Concerning the affairs of the closed Citizens' State Bank
of Noblesville, Ind., a dispatch from Noblesville on July 27
to the Indianapolis "News" contained the following:
Judge Fred E. Hines, of the Hamilton Circuit Court, has made an order
for A. H. Baker, conservator for the Citizens State Bank of ths city, which
was closed last week, to pay all depositors in full who placed their money
in the institution after Feb.27, the date of the State moratorium.
This will release $40,000. Other deposits will await liquidation of the
bank.
The Court named the Indiana National Bank, of Indianapolis. and the
American National Bank, of this city, as depositories for the funds of the
defunct bank.
KENTUCKY.
The directors of the Reconstruction Finance Corporation
have authorized tne purchase of $250,000 preferred stock
in the First National Bank & Trust Co. of Covington,
Covington, Ky.
The preferred stock authorization is contingent upon the
subscript ion of common stock by th )se interested in the bank.
Advices from Owensboro, Ky., on July 27 to the Louisville
"Courier-Journal," contained the following in regard to the
affairs of the defunct Central Trust Co. of Owensboro:
Judge M. L. Blackwell. Dixon, to-day (July 27) approved the plan for
reorganization of the Central Trust Co., which closed In Jan. 1932. with
d 'posits of more than $2.000.000. and ordered attorneys representing the
reorganizaton committee to prepare a judgment calling for immediate
reopening of the closed bank.
No decision has been reached by attorneys representing R. L. McFarland, special deputy banking commissioner in charge of liquidation. and
J R. Dorman. State Banking Commissioner, whether they will appeal
988
Financial Chronicle
Judge Blackwell's ruling to the Court of Appeals. Both Dorman and
McFarland opposed the plans for the reorganization and reopening of the
bank, attorneys say.
Judge Blackwell suspended liquidation of the bank on Dec. 19 of last
year and ordered McFarland to dispense with the services of all of his
assistants. The cost ofliquidation of the bank thus far totals nearly $60,000.
LOUISIANA.
The City National Bank of Baton Rouge, La., the new
organization which replaces the Bank of Baton Rouge and
the Union Bank & Trust Co. of that city, opened for business
on July 27, making available $3,466,167.25 in deposits,
which had been "frozen" for five months in the two institutions, according to Associated Press advices from Baton
Rouge on the date named. A dispatch from Baton Rouge
to the New Orleans "Times-Picayune" on July 25, after
stating that the Bank of Baton Rouge and the Union Bank
& Trust Co. had that day been formally placed in the hands
of the Louisiana State Banking Department for liquidation
in orders signed by District Judges George K. Favrot and
W. Carruth Jones, went on to say that the Reconstruction
Finance Corporation had subscribed $300,000 of the stock of
the new bank and the depositors in the old institutions had
subscribed a like amount to the stock and $60,000 to the
surplus. The advices, continuing said in part:
The Union Bank & Trust Co. depositors will receive a total of 70% of
their deposits. including 5% already released and any amounts subscribed
for stock, and the Bank of Baton Rouge depositors will receive 50%.
Including the 5% already released and amounts subscribed for stock.
MAINE.
The Board of Directors of the Reconstruction Finance
Corporation has authorized the purchase of $50,000 preferren
stock in the First. National Bank, Pittsfield, Me., a new
bank to succeed the Pittsfield Nation tl Bank.
The preferred stock authorization is contingent upon the
subscription of an equal amount of common stock by those
interested in the organization of the new bank.
MARYLAND.
A plan providing for the resumption of normal operations
by the Broadway Savings Bank of Baltimora, Md., was
approved on July 27 by John J. Ghingher, the State Bank
Commissioner, according to the Baltimore "Sun" of July 28,
from which we quote further as follows:
Provision is made for the release of 75% of the balance of depositors'
money on hand at the bank Feb. 24 immediately the plan becomes operative.
less the amount of any withdrawals which have been made in the meantime
with the permission of the Bank Commissioner.
The remaining 25% to the credit of depositors will be placed In a "suspense account" and held there until the bank has realized profits and
appreciation of its securities sufficiently to justify directors in declaring
dividends in adjustment of this balance.
On any accounts where the balance exceed $50 and the 75% is less than
that sum, the entire $50 will be made available for withdrawal.
Aug. 5 1933
surplus of $30,000. The sum of $75,000 in preferred stock
is to be subscribed by the Reconstruction Finance Corporation, leaving $105,000 to be raised locally. The "Investor"
furthermore said:
The City Commission of Benton Harbor lent support to the plan by
voting to subject its deposits of $126,000 to the regulations demanded for
re-opening.
The "Michigan Investor" of July 29 stated that the Kent
City State Bank at Kent City, Mich., the State Savings
Bank of Fowler, Mich., and the State Savings Bank at
Frankfort, Mich., have re-opened and the following Michigan
banks are scheduled to re-open: The Wolfe Bros. State Bank
of Centerville, Sept. 5; Home Savings Bank of Kalamazoo,
Sept. 11, and the Antrim County State Savings Bank at
Mancelona on Sept, 11.
po A recent meeting of the depositors of toe First National
Bank of Rochester, Mich., approved a plan for a new
bank as outlined by Treasury officials, according to the
"Michigan Investor" of July 29, which continuing said:
Under the plan the new National Bank of Rochester will be capitalized
at $50,000 with $10.000 surplus. The Reconstruction Finance Corporation
has agreed to purchase $25,000 of the stock and the remainder will be
subscribed locally.
Advices from Battle Creek, Mich., July 31, appearing in
the Detroit "Free Press," stated that announcement was
made on that date that a new bank is to be established in
Battle Creek, under the title of the National Bank of Battle
Creek, which will replace the Old Merchants' National Bank
& Trust Co. and the City National Bank & Trust Co. The
new organization, which is to open within two or three
weeks, will be capitalized, it was said, at $1,500,000, consisting of $750,000 of preferred stock subscribed by the
Federal Government through the Reconstruction Finance
Corporation, and $750,000 of common stock subscribed by
local interests.
The reopening on Aug. 1, of the Citizens' Savings Bank
of New Baltimore, Mich., is indicated in the following press
dispatch from that place on July 28, printed in the Detroit
"Free Press": •
The reorg;,nized Citizens Savings Bank received authorization July 28
from the Treasury Department to reopen. General banking business will
be resumed Aug. 1, Cashier Louis Pingel announced.
Fifty per cent of all deposits will be available to depositors at that time.
The other 50% will remain in a trust fund.
On July 28 a charter was issued by the Comptroller of the
Currency for the new Manufacturers National Bank of
Detroit, which is expected to re-open shortly. With the
approval of the Comptroller, the Board of directors for the
new bank and two of the officers were named on July 24.
John Ballantyne, formerly Chairman of the Board of the
The Baltimor "Sun" of July 27 stated that toe Farmers' First National Bank-Detroit and President of the Detroit
Bank of Willards, Md., would re-open on a 100% basis on Bankers Co., was chosen President of the new bank and
that day, according to an announcement the previous night Henry H. Sanger, former President of the National Bank of
by John J. Ghingher, State Bank Commissioner for Mary- Commerce, was selected as Vice-President. Both men were
also elected directors. The other directors (all of whom are
land. The "Sun" continuing said:
Detroiters whose interests are mainly confined to that city),
The Wicomico County institution, which has been operating on a restricted withdrawal basis since the bank holidays, has been enabled to
are: Edsel B. Ford, President of the Ford Motor Co.;
re-open in full, he said, through a reorganization of its capital structure,
Alex Dow, President of the Detroit Edison Co.; Murray W.
Benjamin A. Johnson has been elected President to succeed R. Fulton
Sales, President of Murray W.Sales & Co.; George R. Fink,
Powell, resigned, Mr. Ghingher's announcement said. E. G. Davis Jr., is
Cashier.
President of the National Steel Corp.; Clifford B. Longley,
The Baltimore "Sun" of July 29 stated that the Birnie attorney for the Ford Motor Co., and Wesson Seyburn,
Trust Co. of Taneytown, Md., having completed its reorgan- who has large local interests.
ization program would reopen on that day on a 100% basis,
The Manufacturers National Bank has been organized as
,according to an announcement made the previous night by an entirely now unit and will merge four suburban banks—
the State Bank Commissioner, John J. Ghingher. The the Highland Park State Bank and the Peoples Wayne
paper mentioned went on to say:
County Bank of Highland Park, and the Guardian State
The Carroll County institution, which has been operating on a 5%
Bank and Dearborn State Bank of Dearborn. The Reconwithdrawal basis since the bank holiday, immediately will make available
struction Finance Corporation will advance $17,000,000 on
to its depositors 70% of their old deposits in cash, Mr. Ghingher said. The
depositors will be given certificates of beneficial interest for the remaining
the assets of the suburban banks, all of which are now
30%.
functioning on a 100% basis. The Detroit "Free Press" of
The bank, whose capital structure has been revised so that it has $50,000
July 25, authority for the foregoing, continuing said:
capital and $25.000 surplus, will reopen, Mr. Ghingher said, with approximately $750,000 in deposits. Charles R. Arnold is its Cashier.
The reopening on a 100% basis of the Farmers' & Merchants' Bank of Easton, Md., was reported in the Baltimore
"Sun" of Aug. 1, which furthermore said:
None of the bank's deposits will be withheld on the reopening. The
capital structure has been revamped as a result of voluntary stock subscriptions by leading citizens of the community.
The institution, on reopening, will have a capital of $60,000 and surplus
and undivided profits of $30,000. Deposits aggregate about $750,000.
T. Hughlett Henry is President of the bank and Richard T. E. Forman
Executive Vice-President, Mr. Forman recently resigned as an examiner
In the Bank Commissioner's office to accept the position with this bank.
MICHIGAN.
We learn from the "Michigan Investor" of July 29, that a
new bank is being formed to succeed the Farmers' & Merchants' National Bank & Trust Co. of Benton Harbor,
Mich. The plan provides for a capital of $150,000 and
Under the plan now being put forward by Federal authorities, the new
bank will be used as the medium for the disbursement of a further 20%
payoff to depositors in the closed Guardian National Bank of Commerce.
The payoff will be made possible by an R. F. C.loan of $25,000,000.
In regard to the banking careers of the men chosen to
head the new bank, the paper mentioned had the following
to say:
The head of the new institution has been prominent in Detroit financial
and business circles for upwards of 40 years. Mr. Ballantyne was born in
Paisley. Scotland, in 1868 and came to Detroit in 1891, following a period
spent in Canadian banks. He was successively Credit Manager and VicePresident of the Detroit National Bank, and organizer and President of
the Merchants National Bank. He became Chairman of the First National
Bank on May 1 1930, resigning April 24 1931 to become President of the
Detroit Bankers Co. He resigned that position on May 31 1932. In
addition he served as director of the Detroit branch of the Federal Reserve
Bank of Chicago and President of the Detroit Clearing House Association.
The Vice-President (Mr. Sanger) of the new institution began his local
banking career in 1891 as a clerk in the old First National Bank. He
Financial Chronicle
Volume 137
advanced to assistant Cashier in the Commercial National Bank, then in
1907 assisted in the organization of the National Bank of Commerce. At
its opening he was elected Vice-President and Cashier and eventually
President and Chairman of the Board, offices he held until the bank was
merged with the Guardian Detroit Bank in 1931, when he became ViceChairman of the new institution (Guardian National Bank of Commerce).
He was also President of the Michigan Bankers Association in 1928 and
served three years on the executive council of the American Bankers
Association.
According to Detroit advice to the "Wall Street Journal"
yesterday, Aug. 4, at a meeting of the directors on that day,
the following were appointed senior officers of the new bank:
Charles K. Bartow, formerly Vice-President of the First National Bank:
John H. Hart, formerly Executive Vice-President of the First National
Bank-Detroit; Charles A. Kanter, formerly a Senior Vice-President and
director of the Guardian National Bank of Commerce;Samuel R. Kingston,
formerly Vice-President and director of the Guardian National Bank of
Commerce: Frank J. Maurice, President of the Highland Park State Bank,
Chairman of the Board of the Guardian Bank of Dearborn and a director
of the Guardian Bank of Royal Oak; Joseph F. Verhelle, formerly Comptroller of the Detroit Bankers Co.; and Benjamin G. Vernor, formerly
Executive Vice-President of the First National Bank-Detroit.
Mr. Bartow also was elected Cashier, the advices said.
989
There are other assets, which, when liquidated, will make possible declaring of dividends.
Besides the Federal loan,$375,000 will be needed for the new bank. This
will be raised in a stock selling campaign, the machinery for which has
already been assembled.
Junior stated that when the new bank opens a certain percentage of
deposits taken over from the old bank may be immediately withdrawn. He
was not certain what the percentage will be, but thought it would be more
than 50%.
Asked if he thought depositors will receive 100% after final liquidation
of the old bank, he said he believed not, but that the percentage would be
much higher than would be the case if the Comptroller of the Currency had
not agreed to the opening ofthe new bank,because the assets upon which the
$1,650,000 loan was granted would have taken a number of years to liquidate
and at much expense.
The loan will be turned over to Junior until the set up of the new bank is
completed.
That checks aggregating approximately $150,000 would be
paid on July 25 to 550 depositors of the Citizens' National
Bank of Long Branch, N. J., waich has been closed for the
last 18 months was note I in a dispatch from that place to the
Newark "News," which added:
They will represent a 10% dividend on deposits. The checks have been
The new National Bank of Jackson, Mich., which has received from the Comptroller of the Currency at Washington.
been organized to succeed the Union & Peoples' National
Early reopening of the Peoples' Bank & Trust Co. of
Bank of Jackson, opened for business on Aug. 1 in the former • Passaic, N. J., is indicated in the following dispatch from
quarters of the old bank, which had been closed except on a that place to the Newark "News" under date of July 27:
limited basis since the Governor's holiday edict was issued
The Federal Reserve and the State Banking Department have approved
in February last. Jackson advices on July 31, appearing in a plan by which the Peoples' Bank & Trust Co., which has been operating
under
Altman Act since the bank holiday, will reopen on an unrestricted
the Deti oit "Free Press," from which the foregoing is learnt, basis. the
The plan has been approved by a depositors' committee.
continuing said:
The committee went to work to-day (July 27) to obtain consents from
Depositors of the former bank will be paid within a week or so, it was
stated. An estimated 30 or 35% of deposits will be distributed among
22,000 depositors. They chains will be paid alphabetically.
The new bank is capitalized at $400,000, half of which was put up by
local men and the other half by the Reconstruction Finance Corporation.
The officers of the bank are: Chairman of the Board, Frank W. Gay;
President, Stuart M. Schram; Vice-President. Harry Stiles, Vice-President
and Cashier. Jay F. Clark and Assistant Cashier. Rush W. McCutcheon.
MINNESOTA.
The Minneapolis "Journal" of July 28 reported that the
Goodhue State Bank of Goodhue, Minn., had reopened for
regular banking functions on July 27, according to an
announcement by the Minnesota State Banking Department.
MISSOURI.
On July 29, the Board of Directors of the Reconstruction
Finance Corporation authorized the purchase of $100,000
preferred stock in the Plaza Bank of St. Louis, St. Louis,
Mo., a new bank to succeed the Guarantee Plaza Trust Co.
of St. Louis.
The preferred stock authorization is contingent upon the
subscription of an equal amount of common stock by those
interested in the new bank.
The Comptroller of the Currency on July 24 levied a
100% assessment against the stockholders of the Cherokee
National Bank of St. Louis, Mo., according to an announcement the previous day by Jack Bernhardt, Federal receiver
for the closed institution, which was capitalized at $200,000.
The assessments are payable Aug. 31 next. The St. Louis
"Globe Democrat," authority for the above, also said in part:
Bernhardt stated he has authority to grant an extension without interest
to all stockholders who pay 25% of their assessment by Aug. 31 and who
will give a written obligation, satisfactorily guaranteed, to pay 25% more
by Sept. 30, another 25% by Oct. 31 and the final 25% by Nov.30.
If the assessments are not paid to the receiver, he explained, he will
be forced to bring suit to collect in Federal Court. In such cases suit will
be entered for the assessment plus interest from Aug. 31.
National bank assessments are construed under Federal law as debts,
not to the bank, but to the Comptroller of Currency, and,as a consequence,
cannot be offset against credits in the closed depository.
Stockholders, in addition to paying the assessment, will lose the face
value of their stock.
The bank did not open after the National banking holiday last March.
It was first placed in the hands of a conservator and when shortages were
discovered Bernhardt was appointed receiver April 22. The shortage in
the institution's accounts has been placed by the District Attorney's agents
at approximately $185,000.
As a result of Government investigation three officers of the bank are
under Federal indictment, charged with embezzlement and misapplication
of the bank funds. They are Henry P. Mueller,President; Harry G. Freiert,
Vice-President and Cashier, and Rudolph L. Provavnik, Assistant Cashier.
Stock hold by these men also was assessed.
NEW
JERSEY.
In regard to the affairs of the new National Bank of
Orange, Orange N. J., which is to succeed the Orange
National Bank of that place, the Newark "News" of July 29
stated that directors for the new institution had been selected
and would be called together to organize as scon as official
word was received of the loan of $1,650,000 from the Reconstruction Finance Corporation, with which t3 op 3n the new
bank. Eugene Junior, Conservator, in charge of the Orange
National Bank, which has been operated on a restricted
basic since March 4 last, was reported as saying on July 29
that assets of the bank have been pledged for the loan. The
paper mentioned went on to say in part:
the necessary 75% of the depositors and two-thirds of the stockholders.
Under the plan 30% of the deposits would be subject to immediate withdrawal upon the bank's reopening. The remaining 70% would be represented by preferred stock in a holding corporation to which the slow assets
of the bank would be turned over.
The preferred stock would have a par value of $1 a share and be sold
at that price. . . . All stock of the bank would be held by the holding
company and in return the present stockholders would receive common
stock of the holding company of no par value and no voting power until the
preferred stock is retired.
All officers and directors of the bank have resigned effective when the
reorganization is complete. Thereafter the bank and the holding company
would be run by officers and directors elected by the preferred stockholders.
Cecil 0. Dunaway of South Orange is directing the reorganization for
the depositors' committee, which has opened an office in the old City
Trust Building.
NEW YORK STATE.
On Aug. 3 directors of the Yonkers National Bank & Trust
Co. of Yonkers, N. Y., of which Supreme Court Justice
W. F. Bleakley is President, on Aug. 3 issued a statement
indorsing the plans for organizing the proposed new First
National Bank in Yonkers. The two institutions are in no
way connected. The above is taken from a Yonkers dispatch
to the New York "Herald Tribune," from which we also
quote the following:
The proposed new bank is to be formed out of deposits and assets of
the First National Bank & Trust Co. of Yonkers, now restricted, with
Frank Xavier, retired newspaper publisher, as President of the new institution, and Samuel Untermyer, lawyer, as one of the directors.
Directors of the Yonkers National, lending moral support to the plan to
open the competing bank, passed a resolution,commenting upon the present
canvass of First National depositors for stock subscriptions, and stating
that "we recognize the irreparable injury that will result to the business of
our city in the failure to adopt the plan." The resolution also states "we
recognize the benefit that will accrue to the depositors if the plan be
adopted."
NORTH CAROLINA.
The Reconstruction Finance Corporation has autoorized
the purchase of $120,000 preferred stock in the reorganization
of the Commercial Bank of Lexington, Lexington, N. C.
The preferred stock authorization is contingent upon the
subscription of an equal amount )f common stock by those
interested in the reorganization.
Concerning the defunct Bank of Windsor at Windsor,N.C.
which closed in December 1930, a dispatch from that place,
dated July 27, appearing in the Raleigh "News & Observer,"
had the following to say:
The Board of Directors of the Bank of Windsor called a meeting of the
bank's depositors at the courthouse on Wednesday afternoon, July 26.
A large number of depositors were present and agreed to accept notes in
accordance with the plan presented.
The Board of Directors of the Reconstruction Finance
Corporation has authorized the purchase of $120,000 preferred stock in the reorganization of the Commercial Bank
of Lexington, Lexington, N. C. The preferred stock
authorization is contingent upon the subscription of an
equal amount of common stock by those interested in the
reorganization.
According to Lexington advices on July 31, printed in the
Raleigh "News & Observer," the Commercial Bank of
Lexington, which had been closed for two months after the
national banking holiday, and subsequently operated on a
restricted basis, resumed full operations on that date. The
dispatch furthermore said:
A published statement of the bank appearing coincident with the removal
of restrictions to-day showed an unusually high state of liquidity. In the
990
Financial Chronicle
reorganization the capital stock was increased from $119.000 to $120.000,
with stockholders paying a voluntary assessment of $15 a share, and the
Reconstruction Finance Corporation purchased $120,000 in preferred stock.
This is reported one of the first State banks in the nation in which the
R. F. C. has purchased stock, the recent period is the only time in over
40 years that banking operations here have been restricted.
OHIO.
The Ohio State Banking Department on July 28 took over
for liquidation the Zitiello Banking Co. of Cleveland, according to Associated Press dispatch from Columbus, Ohio,
on that date, which addel;
Antionette Difino, who has been acting as Conservator of the institution,
will be in charge of the liquidating proceedings.
The Wasnington Savings Bank of Washington, C. H.,
Ohio, which has been closed since July 20 193'2, will re-open
early this month according to Associated Press advices from
that place on July 25, which added:
This was assured to-day whom Common Pleas Judge TI. M. Rankin
approved the re-opening application of the reorganized institution, headed
by President W. A. Hoppess.
Associated Press advices from Medina, Ohio, on July 26
stated that the Wadsworth Savings & Trust Co. of Wadsworth, Ohio, which closed Oct. 19 1931 with $990,000 in
deposits, would reopen as the Citizens' Bank of Wadsworth
under terms of a plan approved on that day by Common
Pleas Judge John D. Owen. Advices from Wadsworth to
the Cleveland "Plain Dealer" on the same date, July 26,
indicated that the bank would reopen either July 29 or July 31
and gave additional information regarding the bank's affairs
as follows:
Common Pleas Judge John D. Owen at Medina granted authorization
for the reorganization of the closed Wadsworth Savings & Trust Co. after
an injunction suit was withdrawn, when differences were compromised
late to-day (July 26):
The old bank's former executive Vice-President, Schuyler C. Durling,
has appealed a penitentiary sentence in connection with the bank's failure
a year ago. Deposits were approximately $1,000,000.
A journal entry, carrying stipulations of the compromise, is to be drafted
by the half dozen lawyers involved to-morrow.
It will carry modifications of the reopening plan, under which depositors
are to receive 5% in cash. 45% in a restricted savings account and 50%
In certificates of participation In the proceeds of liquidation of "frozen"
assets by a holding company.
The 35 objecting depositors are to receive 55 cents on the dollar of their
deposits. '25 cents on opening of the new bank and 30 in participation
certificates, to be redeemed not later than next July 1.
PENNSYLVANIA.
That a reorganization plan for the First National Bank of
Birdsboro, Pa., has been accepted by the Treasury authoritie;
at Washington is indicated in the following taken from
Reading, Pa.,advices on July 25 to the "Wall Street Journal":
At Birdsboro, iron and steel Industrial town nine miles east of Beading,
Henry N. Willits. Conservator of the First National Bank, has been
notified that a plan of reorganization has been approved by Treasury
authorities at Washington. The plan calls for the establishment of a new
bank, taking over the acceptable assets of the old, and agreeing to pay an
equal amount of deposits, which, according to the proposals approved at
Washington. Is equivalent to 75% of the present deposits.
The following with reference to the affairs of the First
National Bank of Sharon, Pa., was contained in advices from
that place on July 31 to the "Wall Street Journal":
The First National Bank, closed since March, must have new capital of
$300.000 and surplus of $60,000 to reopen, the Federal Reserve Board has
told officials of the bank. John Stevenson, Harry 1'. Forker and P. A.
Diggs have been named trustees of the depositors whose accounts amount
to $1,151,776.
TENNESSEE.
The directors of the Reconstruction Finance Corporation
have authorized the purchase of $400,000 preferred stock
in the Commercial National Bank, Chattanooga, Tenn.,
a new bank to succeed the Chattanooga National Bank.
The preferred stock authorization is contingent upon the
subscription of common stock by those interested in the
new bank.
The bank, which we learn from the Chattanooga "News"
of July 29, is to open on Aug. 7 or possibly to-day (Aug.5),
will make a distribution of 40% to its depositors shortly
thereafter. Depositors have been asked to appear at the
banking house this week and file proofs of their claims in
order that they may have payment orders delivered to them
as soon as the Commercial National Bank is open for business. Officers already chosen for the new bank, according
to the paper mentioned, are Z. C. Fatten (now conservator
of the Chattanooga National Bank); Robert Hall of Coral
Gables, Fla., Executive Vice-President, and Gordon L.
Nichols, well-known Chattanooga banker, Cashier.
VERMONT.
As of July 29, the Board of Dire3tors of the Reconstruction
Finance Corpor ition authorized the purchase of $50,000
preferred stock in the Walden National Bank in St. Albans,
Vt., a new bank to succeed the Walden National Bank.
Aug. 5 1933
The preferred stock authorization is contingent upon the
subscription of an equal amount of common stock by those
interested in the new bank.
The People's National Bank of Barre, Vt., which has been
in the hands of a conservator for several months, reopened
on July 29, according to advices by the Associated Press
from that city, which continuing said:
It is the largest, in point of deposits, of the four banks in this city. Barrett C. Nichols, recently connected with the National Shawmut Bank of
Boston. Mass., has been named Executive Officer and Vice-President,
succeeding W. C. Johnson, Jr., who becomes agent of the trustees of the
depositors' trust fund.
The bank has been refinanced on a plan of $200,000 paid-in capital stock
and $100,000 surplus.
VIRGINIA.
The State Banking Commissioner for Virginia, M. E.
Bristow, announced on July 27 the sale of the Bank of Max
Meadows, Wythe County, Va., to the First National Farmers'
Bank of Wytheville, according to Associated Press advices
from Richmond, Va., on that date. The dispatch furthermore stated that the Commissioner had also announced that
the business of the Bank of Fox Hill, Fox Hill, Elizabeth
County, had been suspended for 60 days beginning with
July 26 at the request of its Board of Directors.
Additional List of Banks Licensed to Resume Operations in Second (New York) Federal Reserve
District.
The Federal Reserve Bank of New York issued the following list on Aug. 2, supplementing its statement of July 19
(noted in our issue of July 22, page 604), showing additional
banking institutions in the Second (New York) District,
which have been licensed to resume full banking operations:
FEDERAL RESERVE BANK OF NEW YORK.
(Circular No. 1261, Aug. 2 1933.1
MEMBER BANKS—NEW YORK STATE.
Highland Falls—First National Bank in Highland Falls (effective 9:00 a. in.
Saturday, Aug. 5 1933).
Marcellus—The First National Bank of Marcellus.
Maybrook—The Maybrook National Bank (effective 9:00 a. in. Friday
Aug. 4 1933).
Port Henry—The Citizens' National Bank of Port Henry (effective 9:00
a. in. Saturday, Aug. 5 1933).
GEORGE L. HARRISON, Governor.
ITEMS ABOUT BANKS, TRUST COMPANIES, &c.
New York Cotton Exchange membership of the Estate
of Ftederick J. Fredet ickson was sold Aug. 1 to William J.
Jung, for another for $21,500, a decrease. of $500 from the
last previous sale.
New York Cocoa Exchange memE. A. Canalize sold a bership, July 29, to Jerome Lewine for another for $4,500,
unchanged from the last sale.
E. Smith was the host on Aug. 1
Former Governor Alfred
at the official opening of the main office, 160 Broadway,
New York, of Lawyers County Trust Company, formed
through the merger of Lawyers Trust Company into the
County Trust Company of New York. Mr. Smith, as Chairman of the Board, and One R. Kelly, President, received
visitory to the institution, among the congratulations received was a telegram to Mr. Smith from President Roosevelt, which said :
My warm congratulations to you and the directors of the Lawyers County
Franklin D. Roosevelt.
Trust Company on the opening day.
Mr. Smith told newspaper men who were present that the
consolidation of the two institutions had fulfilled an ambition that he hail for several years, namely that of opening
an office of his bank in the Wall Street district and likewise
extending the services of the bank to Brooklyn.
According to the condensed statement of conditions as of
July 31 1933, made public Aug. 1, the deposits of the consolidated institution increased by approximately $1,200,000
since the tentative balance sheet was drawn for the stockholders' meetings on July 27th, when the merger was approved. The condensed statement of condition shows total
resources of $35,349,235, including $9,119,122 in cash and $4,671,218 in United States Government Bonds. Capital, surplus
and undivided profits total $3,245,744 and deposits $31,168,002. The capital stands at $2,000,000. At a special meeting of the directors held July 31 the following new officers,
formerly of the County Trust Company of New York and
Lawyers Trust Company were elected: Vice-Presidents,
Raymond M. Frost, Harold S. Seal, Thornwell Stallknacht,
Archibald Forbes, Robert I. Smyth, William K. Swartz and
Joseph L. Obermayer, Secretary and Treasurer, Walter H.
Grief; Assistant Treasurers, Joseph P. Stair, Marshall E.
Munroe; Assistant Secretaries, Harry C. Howe, Lane P,
Gregory, William G. Scott; Assistant Trust Officer, B,
Volume 137
Financial Chronicle
Martin Larsen. In addition to its main office at 160 Broadway, the trust company will maintain offices in the Empire
State Building and 14th Street and Eighth Avenue, Manhattan. and a Brooklyn office at 44 Court Street. The former
Midtown Office of Lawyers Trust Company at 15 East 41st
Street, has been consolidated with the Empire State Office.
In addition to Alfred E. Smith, Chairman, and One It.
Kelly, President, the Directors of the company are: Vincent
Astor, Henry R. Barrett, Lucius H. Beers, John J. Broderick.
Peter J. Carey, Howard S. Cullman, Philip S. Dean, William
H. English, Albert W. Haigh, Albert T. Johnston, Edward J.
Kelly, William F. Kenny, Ralph W. Long, Daniel J. Mooney,
Charles F. Noyes. Kenneth O'Brien, Stuart B. Plante, Aaron
Rabinowitz. John J. Raskob, Daniel L. Reardon, Louis F.
Rothschild. Walter E. Sachs and Parry D. Saylor.
Previous items regarding the merger appeared in these
columns July 15, page 438 and July 29, page 802.
At a meeting of the Board of Trustees of United States
Trust Company of New York held Aug. 3, Benjamin Strong,
formerly Vice-President of the Bank of Manhattan Company
was appointed a Vice-President of the United States Trust
Co., effective Sept. 15; George Merritt and George F. Lee,
formerly Assistant Secretaries of the last named institution,
were promoted to Assistant Vice-Presidents; Henry G.
Diefenbach was appointed Assistant Comptroller; Irvin A.
Sprague and James M. Trenary were appointed Assistant
Secretaries.
Henry Nettleton Sweet, a former partner in the Boston
banking and brokerage house of Hornblower & Weeks, died
at the Phillips House of the Massachusetts General Hospital,
Boston, on July 28. Mr. Sweet was born at Lancaster, N. H.,
on Aug. 4 1860. He studied at the schools and academy in
Lancaster, and then went to Boston to attend the Massachusetts Institute of Technology with the class of '81. He entered the employ of Hornblower & Weeks in 1901, and was
admitted to the firm Jan. 1 1909, with which he remained
until his retirement on Dec. 31 1931.
Among other interests, Mr. Sweet was a member of the
Boston Real Estate Exchange for nine years and of the
Massachusetts Naval Milita in which he served as an ensign,
lieutenant and ordnance officer.
Theodore Ackerson, President since January 1929 of the
Franklin-Washington Trust Co. of Newark, N. J., has resigned his office to accept a position as Managing Officer of
a bank in an adjoining County. Mr. Ackerson became connected with the Franklin-Washington Trust Co. as Executive Vice-President in August 1928, prior to which time he
was a Vice-President of the Hudson County National Bank
of Jersey City. The Newark "News" of July 28, from which
the above information is obtained, continuing said:
The directorate of the Franklin-Washington adopted a resolution of regret
at Mr. Ackerson's decision and wished him success in his new field.
Clifford F. MacEvoy, Chairman of the Franklin-Washington, will act as
President until Mr. Ackerson's successor is chosen. Mr. MacEvoy was President of the Mutual Bank of Roseville from its opning in 1914 and after its
merger and change of name into the Franklin-Washington Trust Co., until
Mr. Ackerson became President in 1929.
Edward F. Clark of 52 Broadway, New York, formerly President of the
Guardian Trust Co. of New York, who was associated with Mr. MacEvoy in
the organization of the Mutual Bank of Roseville, has been elected a director
of the Franklin-Washington, as has Henry C. Miller,'retired builder.
An increase in the capital stock of the First National
Bank of Morristown, N. J., from $200.000 to $250,000,
was approved on July 19, when the shareholders gave their
approval to the sale of 6,000 shares of new stock at $75
per share. The stock will have a par value of $25 and a
premium value of $50 per share. Morristown adVices on
July 20, to the Newark "News," in reporting the matter,
furthermore said:
The purpose of the increase, as expressed by bank officials. is "to put
the bank in a position to handle the increased business which it is believed
will follow the present evident recovery from the great depression of the
last four years."
All the new stock previously had been underwritten, but in accordance
with the law notices of their right to subscribe were mailed to the share—
holders at the close of the meeting .
The plan under which, it is understood, the change in
the bank's capitalization has been made was outlined as
follows in a Morristown dispatch to the "News" under
date of Juno 19 last:
It is proposed to "reduce the capital stock from $200,000 to 5100.000
Upon the condition that the capital funds thus released will not be disbursed
among the shareholders but will be placed in the undivided profits account."
A change is then proposed in the par value of the shares of the capital
stock from $100 to $25. followed by an increase In the capital stock from the
adjusted amount of $100,000 to $250,000. This is to be done "through
991
the issuance and sale-of 6,000 shares of new stock having a par value of $25
p4r share at S75. being at a premium of $50 which will produce $450.000,
of which $150.000 will be placed in the capital account and $300,000 in
the surplus account."
A final dividend was paid July 26 to 2,500 depositors of
the old Brotherhood Saving & Trust Co. of Pittsburgh, Pa.,
bringing the total to 98.3%, according to the Pittsburgh
"Post-Gazette" of July 27, which went on to say:
Deposits on hand when the institution closed Oct. 16 1926, were about
$470,000, according to Frank NV. Jackson, State Banking Deputy in charge
of liquidation. Representing labor's experiment in the banking business, the
bank came into the limelight and subsequently was closed through expose
of an alleged bond purchase swindle. Officers of the institution were tried
and acquitted. Two men not connected with the bank served prison terms
in the case.
The Pennsylvania Department of Banking on July 28 announced advance payments to depositors in the following
closed banks, according to the Philadelphia "Financial
Journal": Glenside Bank & Trust Co., Glenside, Pa., 5% to
be paid on Aug. 21, making the total paid 30%; Allentown
Trust Co., Allentown, Pa., 10% payable Aug. 17, making
22Y,%, and the Homewood Peoples' Bank., Pittsburgh, Pa.,
10% to be paid Aug. 23, making 45% paid.
We learn from'the Chicago daily papers of July 29 that
Charles C. Haffner, Jr., has tendered his resignation as
Executive Vice-President of the City National Bank &
Trust Co., Chicago, effective on or about Aug. 15. He
will then become associated with R. R. Donnelly & Sons
Co., but will retain his connection with the City National
as a member of the Board of Directors. Mr. Haffner began
his Chicago banking career in 1924, going there from the
Buffalo Trust Co., of Buffalo, N. Y.kHe_is"..a graduate of
Yale University.
The Nebraska State Banking Department on July 22 announced payment of a 5% dividend, amounting to $9.269, to
depositors of the failed Farmers' State Bank of Glenvil, Neb.,
according to a dispatch by the Associated Press from Lincoln,
Neb. on that date, which added:
They now have received 35%, or $64,972.
Advices from Woodward, Okla., on July 27 to the "Oklahoman" reported that an initial dividend of 6% had been
declared on that date by Sidney W. Haynes, receiver for the
First National Bank of Woodward, which had been closed
for 18 months. The dispatch added:
Approximately $145,000 in city funds and $37,000 in county funds are
tied up by the receivership.
Payment of dividends to depositors of two failed Oklahoma State banks was announced on July 21 by W.J. Barnett,
the State Bank Commissioner, according to the "Oklahoman"
of July 22, which named the banks as follows:
Final dividend of 4% was paid to depositors of the Citizens' State Bank
at Fairland. It amounted to $1,900 and makes a total of 74% repaid to
depositors since the bank failed in 1923.
Third dividend, 10%, was paid to depositors of the Bank of Fairmont
at Fairmont. It amounted to $5,500, making a total of 30% repaid.
In regard to the affairs of the defunct Natural Bridge
Trust Co. of St. Louis, Mo.—one of the numerous small St.
Louis banks which closed their doors in January last—the
St. Louis "Globe-Democrat" of July 29 stated that claims aggregating $717,969.46 against the institution. which is now
being liquidated, were listed in a report filed on July 28
with the Recorder of Deeds by 0. II. Moberly, Commissioner
of Finance for Missouri. The hank's total assets at closing
Jan. 16 1933 were listed at the book value of $1,127,241. The
paper mentioned went on to say in part:
Common claims listed in the report of the Examiner yesterday amounted
to $655,608.24, while claims to which preference is asserted total
$62,361. . . .
Principal assets of the bank as listed in a report filed with the Recorder
last February, are: Cash, $33,739 ; checks in process of collection, $10,297;
in Federal Reserve Bank, $37,297; in other banks, $10,004 ; time loans,
$156,445; demand loans, $333,518 ; real estate, $43,336 ; bonds $465,921;
stocks, $1,767; stock in the Federal Reserve Bank, $7,500.
-4---
The MemPhis "Appeal" of July 23 stated that announcement had been made the previous day by Gilmer Winston,
Chairman of the Board of the Union Planters' National Bank
& Trust Co. of Memphis, Tenn., of the promotion of I. II.
Wilson from Vice-President in charge of the institution's
Manhattan branch to a Vice-President at the main office,
succeeding Edward C. Tefft, who resigned in order to join
the Thomas W. Briggs Co. of Memphis, a well-known advertising concern. The paper mentioned furthermore said
in part:
992
Financial Chronicle
Mr. Wilson's rise in Memphis banking circles has been rapid. He joined
the staff of the Manhattan Savings Bank & Trust Co. when it was a subsidiary of the Union Planters in 1930, as a Vice-President and was placed
In charge of the Manhattan when it was made a branch several weeks ago.
Mr. Wilson resigned a connection with the Tennessee State Banking Department to join the Manhattan Bank. He has been in the banking business since his youth.
A native of Columbia, Maury County, Tenn., at the age of 16 he became
connected with the Columbia Bank & Trust Co. A volunteer in the United
States navy, he later won a commission as ensign paymaster. After demobilization he returned to the Columbia Bank & Trust Co., quitting the
position of teller in 1921 to join the State Banking Department as examiner
in charge of West Tennessee State banks. . . . In January of last year
he was promoted to the position of Executive Vice-President of the Manhattan. . . .
The Stock Yards National Bank of Denver, Colo., is being
liquidated and paying off depositors in full. This we learn
from Denver advices (by mail) to the "Wall Street Journal,"
which continuing said:
No deposits will be accepted after July 29 and all savings accounts and
certificates of deposit will cease drawing interest after Sept. 1. The bank
was organized 30 years ago to facilitate transactions at the stockyards.
Swift & Co., the principal stockholders, are desirous of retiring from the
banking business. It is estimated that stockholders will receive $140 per
share. Capital stock is $250,000 and deposits on June 30 were $1,260,143.
According to an announcement by Ben R. Meyer, President
of the Union Bank & Trust Co. of Los Angeles, Los Angeles,
Calif., the directors at a meeting held July 27 promoted
Louis Meyer Jr., heretofore Manager of the bank's bond department, to an Assistant Vice-President, and advanced
A. B. Fox, formerly Assistant Manager of the Bond Department, to an Assistant Cashier. The Los Angeles "Times" of
July 28, from which this is learnt, furthermore said:
Mr. Meyer Jr. joined the Union Bank in 1926, and in 1929 was made
Manager of its Bond Department. Mr. Fox was employed by the bank in
1923 as a messenger boy. He has worked in various departments, and in
1929 was made Assistant Manager of the Bond Department, which position
he has held until now.
THE WEEK ON THE NEW YORK STOCK EXCHANGE.
The stock market has been somewhat unsettled this week
with a tendency during the latter part to move to higher
levels. Trading has been dull and prices irregular, and for
the most part changes have been within narrow limits.
Industrial stocks and specialties suffered sharp declines
during the first part of the week, but a portion of these
losses were subsequently recovered. There continues to be
a good demand for the so-called "wet" issues and shipbuilding stocks have attracted considerable speculative
attention. The daily turnover has been extremely small
and the tickers have, at times, been at a standstill. Call
money renewed at 1% on Monday and remained unchanged
at this rate on each and every day of the week.
Following the return to the five-hour session on Monday,
practically all open-market values were revised sharply
downward, and while there was no liquidating pressure except in some recently buoyant specialties, most sections of
the list were without support. There were occasional rallies,
but these faikd to hold as th market continued its downward drift. The weak stocks included many marketfavorites
such as Bethlehem Steel, du Pont, Amer. Tel. & Tel., United
States Steel, Chrysler, J. I. Case, New York Central and
Commercial Solvents, all of which receded from 4 to 6 or
more points. Other prominent issues showing losses were
International Harvester, Cerro de Pasco, Baltimore & Ohio,
Liquid Carbonic, Owens Illinois Glass, Urited States
Smelting, Johns-Manville, Union Pacific, Santa Fe, Alaska
Juneau, Consolidated Gas, Crown Colk & Seal, Drug, Inc.
and Goodyear Tire & Rubber. There was a very moderate
rally near the close, but this made little impression on the
final prices. The turnover for the day was approximately
3,085,053 shares, as compared with 1,390,000 shares on
Friday, the last trading session of the previous week.
On Tuesday prices firmed up all along the line, and while
there was some unsettlement apparent during the opening
hour, this quickly disappeared as the market continued to
move ahead. Motor stocks were in demand as a result of
the excellent June report of the Chrysler Co. Railroad
issues were active throughout the day and miscellaneous
industrials were in sharp demand. J. I. Case Co. was the
outstanding feature of the trading as it soared upward 73/i
points to 683. The gains in the general list ranged from
2 to 4 or more points, though there were a few issues on
which speculative attention centered, that showed advances
up to 6 points. The turnover for the day was small as
compared with previous sessions, less than 1,800,000 shares
being handled during the day. The principal advances
3 American Cornwere Air Reduction, 53' points to 94%;
Aug. 5 1933
mercial Alcohol, 43/i points to 43%; American Water Works,
2% points to 29
Atlas Powder, 4 points to 28; Auburn
Auto, 2% points to 54%; Canada Dry Ginger Ale, 3 points
to 283'; J. I. Case Co., 7% points to 683-i; Corn Products,
3% points to 793i; Crown Cork & Seal, 43-i points to 47;
Deere & Co., 33/ points to 303/2; Eastman Kodak pref.,
33% Points to 124; Goodrich pref., 4 points to 42; Industrial
Rayon, 4 points to 633'; Motor Products, 23-i points to 42;
National Distillers, 432 points to 80; Peoples Gas, 3 points
to 57; Real Silk Hosiery, 5 points to 55; Union Bag & Paper,
4 points to 40; United States Industrial Alcohol, 6 points
to 60, and Western Union Telegraph, 23/ points to 573/8•
Trading was unusually quiet during the first half of the
session on Wednesday, but renewed speculative interest was
apparent toward the end of the day as the trend turned
sharply upward. In a number of active stocks for which
there was a brisk demand, the gains ranged from 2 to 5 or
more points. The metal shares, including the gold mining
issues, were the leaders of the upswing, the improvement in
this group being due in part to the inflation talk. "Wet"
stocks were a feature of the trading, most of the Popvlar
issues being in demand during the greater part of the session.
The gains for the day included among others, Air Reduction
23/i points to 96%, Alaska Juneau 23/i points to 263,
American Beet Sugar pref. 7 points to 45, American Tobacco
23/i points to 833/8, Byers & Co. pref. 7 points to 67, Celanese
23' points to 39%, Colorado Fuel & Iron pref. 123
4 points to
173-j, Firestone pref. 2 points to 70, Homestake Mining 26%
points to 242, Industrial Rayon 33/i points to 67, International Business Machine 39' points to 144, Liggett & Myers
4 points to 97, Montesuno 73/2 points to 65, National Distillers 6% points to 86%, Pittsburgh & West Va. 83
4 points
to 253, Union Pacific 3 points to 115, United States Industrial Alcohol 4 points to 64, West Penn Electric 35% points
to 583 and Western Union Telegraph 53/2 points to 68%•
Irregularity, due to overnight announcement of plans
relative to the curtailment of speculative excesses in the
securities market, was the dominating feature of the trading
on Thursday. Some individual issues were higher at the
close but the list, as a whole, was lower. Transactions continued to dwindle and about 1,509,240 shares were turned
over, recording the smallest day since the bank holiday.
There was a slight improvement in the afternoon, but it
did not last long and at times the tickers were at a standstill.
The changes on the side of the decline included most of the
speculative favorites, the principal losses being sustained
by American Can Co., 23/2 points to 833/2; Auburn Auto,
23/2 points to 54%; J. I. Case Co., 2% points to 67; Celanese
Corp., 23/i points to 373's; Crucible Steel pref., 6 points to
48; Illinois Central, 2 points to 403/3; New York & Harlem,
7 points to 123; Peoples Gas, Chicago, 23 points to 563-i;
Western Union Tel., 23/2 points to 61, and Worthington
Pump pref. B, 33/2 points to 35.
Trading was suspended on the New York Stock Exchange
at 12:10 on Friday due to a flood of tear gas from bombs
which exploded in the ventilating system. Up to the time
of closing, the market had displayed a somewhat heavy
undertone in extremely dull trading during the two hour
period of business. The dealings were largely professional,
public participation having dropped to an extremely small
part of the morning transactions. As the market closed
many important stocks had slipped down below the previous
close, the list including among others, Air Reduction 3 points
to 95, American Beet Sugar 4 points to 41, Ingersoll-Rand
432 points to 58, Radio Corp. pref. 6 points to 30 and Woolworth 25
/
s points to 413/2•
TRANSACTIONS AT THE NEW YORK STOCK EXCHANGE,
DAILY, WEEKLY AND YEARLY.
•
Week Ended
Aug. 4 1933.
Railroad
State,
Stocks,
Number of and Miscell. Municipa' &
For'n Bonds.
Bonds.
Shares.
Saturday
Monday
Tuesday
Wednesday
Thursday
Friday
m,-tai
3,085,063
1,784,420
1,727,420
1,509,240
2500,000
a•ana
Sales at
New York Stock
Exchange.
Stocks—No. of shares_
Bonds.
Government bonds_ _ _
State dr foreign bonds_ Railroad dr misc. bonds
Total
a Unofficial.
$7,975,000
7,229,000
5,951,000
5,630,000
2,787,000
HOLIDAY.
*3,225,000
2,524,000
2,444,000
2,766,000
997,000
142 229.572.000 E11.956.000
Week Ended Aug. 4.
1933.
1932.
United
States
Bonds.
Total
Bond
Sales.
$1,695,000 $12,895,000
558,000 10,311,000
9,182,000
787,000
406,000
8,802,000
447,000
4,231,000
33.893.000 S45.421.000
Jan. 1 to Aug. 4.
1933.
1932.
8,606,143
13,060,580
466,651,452
211,836,936
$3,893,000
11,956,000
29,572,000
$3,267,000
14,056,000
44,134,000
$283,350,400
476,859,500
1,368,467,900
$448,813,050
470,935,100
914,468,500
$45,421,000 $61,457,000 $2,128,677,800 *1,834,216,650
Financial Chronicle
Volume 137
DAILY TRANSACTIONS AT THE BOSTON, PHILADELPHIA AND
BALTIMORE EXCHANGES.
Boston.
Week Ended
Aug. 4 1933.
Saturday
Monday
Tuesday
Wednesday
Thursday
Friday
Total
Prey. wk. revised_
Philadelphia.
Baltimore.
Shares. Bond Sales. Shares. Bond Sales. Shares. Bond Sales.
61,053
30,907
33,739
29,090
7,106
$8,000
2,000
10,000
5,000
1,000
40,360
17,746
16,339
12,889
1,915
$1,000
161,895
2925241
$26,000
819 000
89,249
191 451
$4,000
828.500
3,000
1,849
476
1,183
1,188
704
$1,500
5,000
1,200
6,000
5,400
14.458
$13,700
820.100
DAILY TRANSACTIONS AT THE NEW YORK CURB EXCHANGE.
Week Ended
Aug. 4 1933.
THE CURB EXCHANGE.
Wet stocks continued as the feature of the trading on the
Curb Market during the greater part of the present week.
There was some demand for shipbuilding issues toward the
end of the week, New York Shipbuilding rushing up 31A
points. Specialties were also ir demand, Great Atlantic &
Pacific Tea Co. leading the upswing with a substantial gain.
Oil stocks were fairly active at higher prices and there was
a moderate demand for mining shares.
On Monday, the general list was dull and the trend of
prices downward, the losses ranging from 1 to 6 or more
points. Aluminum Co. of America was especially weak and
dipped more than 6 points at its low for the day. Electric
Bond & Share, one of the most active of the speculative
favorites, was off about 2 points, and American Gas & Electric and Cities Service were also down on the day. The
"wet" stocks declined -with the general list, Canadian
Industrial Alcohol, both A and B stocks, dropping back
fractionally, while Hiram Walker was off about 2 points
at its low for the day. Humble Oil & Refining Co. and Gulf
Oil of Pennsylvania were also down on the day. Mining
shares eased off with the rest of the list.
Following a spotty and irregular opening, the curb list
firmed up on Tuesday and many of the market favorites
closed with substantial gains, though the volume of trading
was much below the average turnover. Practically every
group was included in the upswing, the gains ranging from
1 to 3 or more points. Aluminum Co. of America was fairly
active and registered a gain of 2 points to 67 on a moderate
turnover. American Gas & Electric and Electric Bond &
Share were also in demand at higher prices. Glen Alden
Coal and General Tire & Rubber were strong and Canadian
Industrial Alcohol was up nearly a point.
Trading continued within narrow limits during most of
the session on Wednesday, and while the dealings were quiet,
prices were fairly firm. Specialties attracted most of the
speculative attention, though the alcohol stocks were also in
active demand during most of the day and stocks like Hiram
Walker, Canadian Industrial Alcohol and Novada scored
modest gains on the day. Electric Bond & Share and
American Gas & Eleetric were prominent among the utilities
and the changes in the oil group were fractionally up and
down. The largest gains of the day were made by stocks
for which there was only moderate demand.
Final prices were about evenly distributed on the gain and
loss side on Thursday, most of the advances being recorded
by the specialties group. Some of the speculative favorites
were inclined to heaviness during the greater part of the day,
Electric Bond & Share dipping a point or more followed by
American Gas & Electric which lost a similar amount. The
industrial group was represented in the advance by The
Great Atlantic & Pacific Tea Co. which gained about 4
points and New York Shipbuilding advanced 9 points on
reports of now financial and executive blood in the organization. Oil shares wore mixed but mining issues were fairly
steady.
Curb stocks were soft on Friday and the volume of trading
fell off following the closing of the stock exchange shortly
after noon hour due to tear gas bombs which exploded in the
ventilating system. Some of the more active issues in the
specialties group were higher and a few of the industrials like
Jones & Laughlin Steel and Safety Car Light & Heat showed a
sharp upward tendency. Alcohol stocks were lower, losses
ranging from fractions to 3 or more points being registered by
Industrial Alcohol A, Hiram Walker and others. Public
utilities moved down with the rest of the list and oil shares
were heavy. The changes for the week were generally on
the side of the decline, though there were several prominent
issues that registered modest gains. Among those on the
Side of the decline were American Light & Traction 20 to
19%, Asso. Gas & Electric A 13/8 to 1%, Atlas Corporation
143
/
s to 133, Central States Electric 2% to
Commonwealth Edison 66 to 643, Consolidated Gas of Baltimore
993
8 to 23.4, Gulf Oil of
643 to 64, Electric Bond & Share 243/
Penn. 46 to 4514, Humble Oil 72M to 693.1, International
Petroleum 163/i to 1634, Niagara Hudson Power 10% to
103', Penrroad Corporation 43
/s to 338, Standard Oil of
Indiana 293/b to 289/8, Swift & Company 19 to 183/8, United
Founders 2 to 13/8, United Gas Corporation 43/ to 4Ys,
United Light & Power A 578 to 531, and Utility Power
2% to 2.
Stocks
(Number
of
Shares).
Saturday
Monday
Tuesday
Wednesday
Thursday
Friday
437,795
262,455
272,965
294,323
185,860
Total
Bonds (Par Value).
Foreign
Foreign
Domestic. Government. Corporate.
$67,000 $3,457,000
105,000 3,084,000
125,000 2,825,000
56,000 2,507,000
104,000 1,845,000
$562,000
$457,000 $13,718,000
1,453,398 $12,699,000
1933.
1932.
1,204,910
1,453,398
Stocks-No. of shares_
Bonds.
$12,699,000 $23,396,000
Domestic
1,197,000
562,000
Foreign government_ _ _
758,000
457,000
Foreign corporate
$13,718,000 $25,351,000
Total
Jan. 1 to Aug. 4.
Week Ended Aug. 4.
Sales at
New York Curb
Exchange.
Total.
HOLIDAY
$165,000
$3,225,000
101,000
2,878,000
146,000
2,554,000
44,000
2,407,000
106,000
1,635,000
1933.
1932.
71,573,646
27,755,035
$581,854,000
27,763,000
26,373,000
$449,832,100
19,129,000
41,877,000
$635.990,000
$510,838,100
Course of Bank Clearings.
Bank clearings this week will show a decrease as compared
with a year ago. This is the first week, that our bank
clearings totals, have shown a decrease as compared with
1932, since the week ended June 10. Preliminary figures
compiled by us, based upon telegraphic advices from the
chief cities of the country, indicate that for the week ended
to-day (Saturday, Aug. 5) bank exchanges for all the cities
of the United States from which it is possible to obtain weekly
returns will be 4.4% below those for the corresponding
week last year. Our preliminary total stands at $4,969,245,960, against $5,199,493,636 for the same week in 1932.
At this center there is a loss for the five days ended Friday
of 3.7%. Our comparative summary for the week follows:
Clearings-Returns by Telegraph.
1Veek Ending Aug. 5.
1933.
1932.
Per
Cent.
-3.7
+4.7
-2.8
-27.6
+14.1
+14.4
-0.8
New York
Chicago
Philadelphia
Boston
Kansas City
St. Louis
San Francisco
Los Angeles
Pittsburgh
Detroit
Cleveland
Baltimore
New Orleans
$2,870,626,372 82,981,285,867
180,290,050
188,791,639
218,000,000
212,000,000
225,000,000
163,000,000
48,993,258
55,893,194
42,500,000
48,600,000
78,025,000
77,398,000
No longer will re port clearings.
76,100,533
75,154,329
54,673,356
42,935,214
49,798,270
52,295,695
68,043,746
44,556,519
21,599,198
19,099,000
-1.2
-21.5
+5.0
-34.5
-11.6
Twelve cities, 5 days
Other cities, 5 days
$3,850,359,962
457,345,005
$4,044,309,298
465,051,915
-4.8
-1.7
Total all cities, 5 days
All cities, 1 day
$4,307,704,967
661,540,993
$4,509,361,213
690,132,423
-4.5
-4.1
Total all cities for week
A A
Complete and exact details for the week covered by the
foregoing will appear in our issue of next week. We cannot
furnish them to-day, inasmuch as the week ends to-day
(Saturday) and the Saturday figures will not be available
until noon to-day. Accordingly, in the above the last day
of the week has to be in all cases estimated.
In the elaborate detailed statement, however, which we
present further below we are able to give final and complete
results for the week previous, the week ended July 29. For
that week there is an increase of 29.1%, the aggregate of
clearings for the whole country being 85,124,286,213, against
$3,970,158,413 in the same week in 1932. Outside of this
city the increase is 12.4%, the bank clearings at this center
recording a gain of 39.4%. All of the Federal Reserve
districts contributed to the increase except the Philadelphia
and Richmond Districts. We group the cities according
to the Federal Reserve districts in which they are located
and from this it appears that in the New York Reserve
District, including this city, there is an expansion of 38.4%
and in the Boston Reserve District of 13.9% though the
Philadelphia Reserve District shows a decrease of 0.9%.
The Cleveland Reserve District has a gain of 12.3% and
the Atlanta Reserve District of 23.6% but the Richmond
Reserve District suffers a loss of 17.4%. In the Chicago
Reserve District the totals are larger by 18.9%, in the St.
Louis Reserve District by 29.8% and in the Minneapolis
Reserve District by 51.6%. In the Kansas City Reserve
District the increase is 13.3%, in the Dallas Reserve District
5.6% and in the San Francisco Reserve District 14.6%.
Financial Chronicle
994
In the following we furnish a summary of Federal Reserve
districts:
Month of July.
Week Ended July 29 1933
1933.
1932.
Federal Reserve Dists
let Boston ____12 cities
2nd New York 12 "
3rd PhdadeIola 9 "
4th Cleveland__ 5 "
5th Richmond _ 6 "
6th A tian ta___ _10 "
7th Chicago ___19 "
8th St. Louis__ 4 "
9th Minneapolis 7 "
10th KansasCity 9 "
11th Dallas
5 "
12th San Fran_ _13 "
$
$
%
Total
_i10 cities
Outside N. Y. City
Canada
32 cities
225.701,759
3,506.930.968
250.220,551
206,650.174
73,841.800
77.537,422
320,722.710
88.510.837
85.951,214
100.114,539
30,926.227
157,644,982
198,195,358
2,533,379.791
252,563,081
183,981.437
89,353,276
62,755,19'
269.843,701
68.209.526
55.681,756
88,246.109
29,282.457
137,5E0,665
+139
+38.4
-0.9
+12.3
-17.4
+23.6
+18.9
+29 8
+51.6
+13.3
+56
+14.6
5.124,286,213
1.705,033,581
3.970,158,413 +29.1
1,517.618,374 +12.4
AA, leffi 10,
0,4 RA1 A•71,
1 -Lie, .1
1933.
1931.
1930.
413,875.512
4,337,798.726
388,730.811
270,317,250
130,797.437
96,062,013
476,436.288
103,342.311
78,010.608
125.925.631
38,089.045
224.473,611
559,551.142
6.891,679,217
492.055,909
379,195,914
162,819.598
122,927,570
879,514.424
156.192,453
102,489.446
176.'766.821
51.80 1,231
292,170,562
6.683.359,276 10.257.500,317
2.165.582,571 3.510,725,868
260.681,666
July
1932.
Inc Or
Dec.
July
1931.
July
1930.
Federal Reserve Dlsts.
189. Boston ____14 cities 1,092.789,740
919.797,053 +18.8 1,939,110,537
2nd New York_ _13 " 16,479,863.371 12,087.606.012 +36.3 22,545,690,801
3rd Philadelpla 13 "
1,159,679,191 1,217,525,707 -4.8 1,896.571022
4th Cleveland. _14 "
841,428,313
850,926.228 -1.1 1,385,896.632
5th Richmond 9 "
343.303,748
611,980.947
436,237,580 -21.3
6th Atianta__16 "
362.778.805
332.607,616 +9.1
518,086,916
1,420,073,284 1,316,201,85' +7.9 2,562.734,795
7th Chicago -__25 "
8th St. Louis__ 7 "
416.702.813
341,281.577 +22.1
534,777.301
9th Minneapoll813 "
314.889.124 +25.0
393,768,662
420,314,706
10th KansasCity 14 "
596,826,522
521.525,890 +4.9
781,801,765
11th Dallas
247,427,765
10 "
224,591.241 +10.2
344.001,213
12th San Fran 22 "
750,915,849
732,775.194 +2.5 1,157,195,507
32 cities
1.796,780.662
1,101,168,356 +62.7
1.325,479.166
Federal Reserve DIsts.
1st Boston _ ___14 cities
2nd New York.. _ 13 "
3rd Philadelpla 13 "
4th Cleveland__14 "
5th Richmond _ 9
6th Atlanta____16
7th Chicago ___25
8th St. Louis_ 7
9th Minneapolls13
10th KansasCity 14
11th Dallas
10
12th San Fran 22
$
7 Months Inc.or 7 Months
Dec.
1932.
1931.
$
2.385.206,521
30,471,567.665
2.361.867,048
1.875.543,918
781 065.855
625,101,417
4,100,408,436
755,551.271
510,107,254
1,067,106,577
416,128.133
1,490,378,577
1,681,030.650
7 mown
1930.
S
%
$
6,198.444,716 7,513,974,791 -17 8 13,061.982,585 15.910,356.531
91,835.538,345 100.909,535,152 -6.0 176,231,774,425 224,778,091,478
7.612.233.374 8,863,884,966 -14 1 12,979.674.393 17.446.740,154
4,870,270,859 6,285.435,034 -225 2871,250,614 12,455,972,861
2271,442,780 3.286,373.368 -30.9 4,133,815,896 5,365,811.776
2,232 162,416 2 790,762,944 -20.0 3,915.315,891 4,988.813,053
7,449,952.499 11,063,163,415 -32 7 19.821.755,093 27,262.918,570
2,431.052,092 2,788,156,966 -12.7 3,993,701,617 5,696,943,436
1,992,839,912 2.159.022,329 -7 7 2955.987,934 3,537,815.151
3,009,203.618 3.792,242,214 -20.6 5.351,052,818 7 181,634,555
1,595.519,430 1,843.725,297 -135.2,606,063,757 3,149,286.835
4,521,790,161 5,649,626,855 -19.9 8,075,406,805 10,708.801,988
Total
170 cities 139.026,480.222 156,975,903,361 -11 4 263,300.831,861 338,615.186.288
Outside N. Y City
46,778,291,821 59,172,378.083 -21.0 91,298.452,095 118,919.181,545
Canada
32 cities
a ,y7a on, enn
g log F,L1 All
-1.11
a In Ir. W7, c17
1932.
Stocks, number of shares_ 120.271,243 23,057,334
461,130,372
Bonds.
Railroad & misc. bonds_ _ $283,435,000 $123,803.000 81,346.870,900
State, foreign, &c.. bonds 79,674,000 73,886,600
468 128.500
U.S. Govt. bonds
20,905,300 45,947,950
281.152.400
Total
176,775,312
$763,249,300
379,682,100
379.494,450
8384.014,300 1243,637,550 82.096,151,800 $1.522,425,850
The volume of transactions in share properties on the
New York Stock Exchange for the month of July for the
years 1930 to 1933 is indicated in the following:
1933.
No. Shares
1932.
No. Shares.
1931.
No. Shares.
1930.
No. Shares.
18.718,292
19,314,200
20.096,557
34.362,383
31.716 257
33,031.499
First quarter
58,129,049
99,110.149 172,343.252 226.694.430
Month of April
May
June
52,896,596
104.213.954
125,619.530
31.470,510
23,136,913
23.000.594
Second quarter
282,730,080
77.608,023 159,650,208 265,974,280
Six months
340,859.129 176,718,572 331,993.460 492.668,710
Month of January
February
March
Month of July
120.271.243
23.057.334
42.423.343
64.181.836
65,658.034
62.308.290
67.834.100
96,552.040
54,346,836 111.041.000
46,639,525 78,340,030
58.643,847 76.593,250
33.545.1350
47.746,000
The following compilation covers the clearings by months
since Jan. 1 1933 and 1932:
MONTHLY CLEARINGS.
Clearings, Total All.
Clearings Out..-ide New York.
Month.
1933.
1932.
1933.
1932.
$
$
Jan_ __ 20,141.759,034 26.447.984.113 -23.8 7.495,834,009 9.763.649,984 -23.2
Feb___ 18,394,473.930 21,333.355.246 -13 8 6,230.757.132 8.114.829.518 -23.2
Mar -- 16,457,395,180 24,486.131,521 -32.8 5,001,069,914 8,876.687,161 -43.7
1st qu. 54,993,628.144 72.267,470,880 -23.9 18,727,661.055 26,755,166,663 -30.0
Apr._ 16,703,083,774 22,826,372,573 -26.8 5.914,260.763 8,857,550,480 -33.2
May._ 19,996,74.5.772 20.667.501,203 -3.2 6,689,801,527 7.928.232.424 -15.6
June_ _ 23,277,434,469 21,918,490,620 +6.2 7.452,854,878 8.016,623,719 -7.0
26 qu_ 59,977,264,015 65,412,364,396 -8.3 20,056,917,168 24,802,406,623 -19.1
We append another table showing the c earings by Federal
Reserve districts for the seven months for each year back
to 1930:
7 Months
1933.
1933.
6 mos. 114970892 159 137 679835 276 -16.5 38,784,578,223 51,557,573,286 -24.8
Total
170 cities 24.055,588,063 19,295.068.085 +24./ 31,718,165,142 16 890,015,672
Outside N. Y. City
7,993,716.598 7,620,801,797 + 4.9 12,792,532 496 17,071,821,303
Canada
1932.
313.406,006
We also furnish to-day a summary of the clearings for the
month of July. For that month there is an increase for
the entire body of clearing houses of 24.7%, the 1933 aggregate of clearings being $24,055,588,063 and the 1932 aggregate $19,296,068,085. This is the second time since
November 1929 that our monthly tabulations have shown an
increase over the preceding year. In the New York Reserve
District the increase is 36.3%, and in the Boston Reserve
District 18.8%, but in the Philadelphia Reserve District the
totals show a decline of 4.8%. The Cleveland Reserve
District suffers a loss of 1.1% and the Richmond Reserve
District of 21.3%, but the Atlanta Reserve District enjoys
a gain of 9.1%. The Chicago Reserve District has to its
credit an increase of 7.9%, the St. Louis Reserve District
of 22.1% and the Minneapolis Reserve District of 25.0%.
The Kansas City Reserve District has managed to enlarge
its totals by 4.9%, the Dallas Reserve District by 10.2%
and the San Francisco Reserve District by 2.5%.
We also furnish to-day a summary of the clearings for the
month of July:
July
1933.
Serenfont/s.
Description.
SUMMARY OF BANK CLEARINGS.
Inc.or
Dec.
Aug. 5 1933
11 11114 171 I:01
Our usual monthly detai ed statement of transactions on
the New York Stock Exchange is appended. The results
for July and the seven months of 1933 and 1932 are given
below:
July __ 24,055,588,063 19.296,054,095 +24.7 7,993,716.595 7,020,804,797 +4.9
The course of bank clearings at leading cities of the country
for the month of July and since Jan. 1 in each of the last
four years is shown in the subjoined statement:
(000.000s
omitted.)
New York
Chicago
Boston _
Philadelphia
St. Louis
Pittsburgh
San Francisco
Baltimore
Cincinnati
Kansas City
Cleveland
Minneapolis
New Orleans
Detroit
Louisville
Omaha
Providence
Milwaukee
Buffalo
St. Paul
Denver
Indianapolis
Richmond
Memphis
Seattle
Salt Lake City_
Hartford
BANK CLEARINGS AT LEADING CITIES.
Jan. 1 to July 31July
1932.
1933. 1932. 1931. 1930. 1933.
1931.
1930.
$
$
16,062 11,675 21.926 29,768 92,248 97.798 172,002 219,666
5,434
799 1,577 2,792
7,012 12,689 17,918
1,018
5,383 6.509 11,653 14.204
788 1,731 2,151
951
7,244
1,102 1,147 1,779 2,208
8,339 12.178 16,365
229
510
379
1,620
281
1,887
2,849
3,742
330
859
568
2,121
2.554
361
4,217
5,487
621
814
2,581
402
3,088
432
4,367
5,891
431
343
1,131
236
175
1,733
2,347
2,883
1,036
181
285
256
1.284
179
1,749
1.972
583
401
1,605
279
1,957
302
2,700
3,782
5S9
464
1,376
287
2,051
248
3,175 4,047
334
274
1,346
214
1,416
280
1,900
2,313
177
164
490
98
817
85
1,246
1,396
727
516
811
261
2,079
202
4,001
5,355
161
95
71
507
535
83
689
1,166
148
184
534
90
96
685
1,066
1,301
36
33
54
50
217
259
342
419
105
64
135
315
499
54
732
923
215
173
106
685
801
114
1,206
1,570
85
101
62
404
458
70
614
708
114
134
74
442
566
78
751
975
103
81
56
277
48
388
530
670
145
189
101
680
102
782
1,027
1,325
69
50
33
274
47
306
377
571
140
169
95
543
702
88
968
1,205
61
77
37
246
40
284
429
534
51
65
239
35
253
45
353
481
Total
Other cities
22,579 17,783 31,971 43,884 129,789 145,042 246,157 315,863
9.237 11,934 17,143 22,752
1,477 1,513 2,747 2,956
Total all
24.056 19,296 34,718 46,840 139,026 156,976 263.300 338,615
Outside New York_ 7,994 7,621 12,792 17,071 46,778 59,178 91,298 118,949
We now add our detailed statement showing the figures
for each city separately for July and since Jan. 1 for two
years and for the week ended July 29 for four years:
CLEARINGS FOR JULY, SINCE JANUARY 1, AND FOR WEEK ENDING JULY 29.
7 Months Ended July 31.
Month of July.
Week Ended July 29.
Clearings at1933.
1932.
Inc. or
Dec.
1933.
1932.
Inc. or
Dec.
1933.
1932.
Inc. or
Dec.
1931.
1930.
S
$
First Federal Rese rye District- Boston1,889,706 +12.3
2,121,301
Me.-Bangor
8,649,633 -8.7
7,894,091
Portland
787,797.113 +20.7
951,002.544
Nfass.-Boston
2,440.453 +2.5
Fall River
2,502,035
+7.4
1,479,969
1,588,870
Holyoke
1,439,837'-21.1
Lowell
1,136,325
2,341.127 +13.2
New Bedford
2,649,391
13.352.591 -3.9
12,831,233
Springfield
8,716.423 -32.3
Worcester
5,902,183
34,984.516 +28.9
Conn.-Hartford
45,102,219
17,740,887 -2.7
New Haven
17,258,330
+16.1
Waterbury
4,313,40
5,006,100
R. I.-Providence
32,676,70'
+9.4
_
35,751,300
+3.5
1,974,696
N. 11.-Manchester
2.043,7;
Total (14 cities)
1,092,789,740
919,797,053 +18.8
11,741,934
38,210,443
5,383,146,260
16,337,777
9,620,185
7,699,803
15,053,941
79,601.446
37,195,524
239,379,611
103.713,225
27,655,600
216,798,800
12,290,167
13,572.354
67,592.840
6,508,793,593
21,621,860
12,174.888
9.619,954
18,850.384
100,201.957
66,307,681
253,128,847
164.549,099
34.560.500
259,044,900
13,955.934
6,198,444,716
-13.5
-43.5
-17.3
-24.4
-21.0
-20.0
-20.1
-20.6
-43.9
388,023
1,761,352
198,000,000
496,682
355,177
+9.2
1,608,713
+9.5
172,607,725 +14.7
+2.6
483,961
519,531
2,807.779
377,000,000
731,109
606,973
2,314,800
515,000,000
945,409
-37.0
-20.0
-16.3
-11.9
242,827
516,788
2,575,900
1,104.327
9,765.797
3,808.024
262,819
464.870
2,451,199
1,563,382
8,584.032
3,365,832
-7.0
+11.2
+3.8
-29.4
+13.8
+13.2
431,128
663.726
3,781,086
2,419.957
10.714,091
5,522,446
505,569
959,025
4,610,122
3,0(30,01)1
13,541,294
6,503,468
6,633,300
410,839
6,035,900
378,748
+9.8
+8.5
8,754,300
526,419
11,018,000
749.391
7,543,974,791 -17.8
225,704,759
198,195,358 +13.9
413,875,542
559,854,142
995
Financial Chronicle
Volume 137
CLEARINGS-(enntinued )
Week Ended July 29.
7 Months Ended July 29.
Month of July.
Clearings at1933.
1932.
Inc. or
Dec.
Second Federal Rc serve District -NewYorkN. Y.-Albany
44,578,655
24,803,552
Binghamton
3,644,603
3,601,332
Buffalo
113,553,973
106,192,833
Elmira
2,488,575
3,142,057
Jamestown
1,633,720
2,439,610
New York
16,031,371,455 11,675,233,234
29,885,441
29,235,377
Rochester
Syracuse
14.338,401
16,695,400
Conn.-Stamford _ _
10,091,894
9,915,182
N. J.-Montclair_ _ _ _
2,844,741
1,920,696
Newark
69,013,323
89,103,719
Northern N. J
123,813,610
119,952,313
Oranges
4,357,508
2,929,005
Total (13 cities)
1933.
1932.
Inc. or
Dec.
1933.
+36.3 94,835,533,345 100,909,535,152
-6.0 3,505,430,963 2,533,379,791
+38.4 4,337,298,723 6,891,679,217
7,376,532
e4,124,475
7,553,296
49,555,502
21.802,696
8.544,213
11,711,575
7,244,000,000
33,207,015
55,372,713
44,313,395
28,465,182
13.798,727
17.042,933
13,231,516
75,513,216
39,869,620
10.620,554
13,832.753
8,333,600,000
71,216,719
74.692,143
54,354.390
36,920,335
-46.5
-75.8
-43.1
-34.4
-40.9
-19.5
-15.3
-13.1
-53.4
-25.9
-18.5
-22.9
298,447
C
230,255
329,335 -9.4
c
312,404 -26.3
575,151
c
953,436
1,310.510
c
1,124.574
973,314
1,120,102 -13.1
2,531,206
1,804,030
241,000,000
1.021.531
1,814.932
1.675,131
1,095,933
243,000,000 -0.8
1,637,431 -37.6
1,965,765 --7.7
1,407,496 +19 0
971,493 +12.8
371,000,070
2,630,673
3,884,733
2,641,823
1,503,779
470.000.000
3,333.536
5.551.381
3,397,920
1,929,853
3,003,000
3,601.000
-0.9
388,730,811
492,035,909
c
c
42,050.221
+3.3
63,000,090 +12.6
6,188,400 -0.3
c
c
49.444,785
93,321,253
11,493,500
c
c
52.339,050
122,191.223
14,836,100
+18.2
1,361,521
1,724,193
85,103,479
71,910,112 +18.3
114,696,191
188,055,378
206,650,174
183,981,437 +12.3
270,317,230
379,195,944
93,466
2,528,000
22,873,119
272,973 +63.9
2.109,000 +19.9
21,174.334
+8.0
470.821
3.578,931
29,057,768
955.960
3.994.423
33,238,090
96,195.200
107,142,003 -10.2
2,111,000
7,612,233,374
8,863,884,936 -14.1
250,220,551
e3,876,000
23,035,231
1,036,198,802
1,375,321,705
192.454.350
9,953,161
2.039.133
24,069,535
12,894,000 -69.9
-1.0
--13.6
-5.0
-29.8
-22.8
+11.5
1,234,172,220
2,050,574,037
234.532,590
14.182,533
4,054.0112
23.419,118
-32.9
-19.3
-29.8
-48.5
+2.8
C
C
43,449,420
70.043,9611
6,169,400
-15.1
-11.1
-54.4
+92
+3.6
+12.7
4,390,436
1,952,789
4.560,794
2,121.140,951
27,664,099
43.029,530
6,311,620
3,125,785
9,175,032
2,553,834,663
33,942,954
51,16 ,403
--30.4
--37.5
--50.3
--16.9
--18.5
--15.9
-1.1
4,870,270,854
Fifth Federal Rese rye District- RichmondW. Va.-Huntington.
427,304
1,453,514 -70.6
Va.-Norfolk
-9.6
10.675,000
11,803,001
Richmond
+0.4
101,609,647
101,170,939
N. C.-Raleigh
2,370,879
S. C.-Charleston _ _ _
3,013,844
+8.6
2,775,862
Columbia
3,149,626
175,217,964
235,920,435 -25.7
Frederick
1,031,819
942,214
+0.5
Hage.stown
D. C.-Washington
51,328,170
76,646,111 -33.0
5,294,095
64.925,000
679.707.212
f5,809.052
19.018,034
f6,205,325
1,131,077,017
5,902,883
1,217,525,707
Fourth Federal Re serve District -Cleveland Ohio-Akron
1,662,000
Canton
4,497,930
Cincinnati
178,644,733
180,528,367
Cleveland
243,439,599
287,395,339
Columbus
31,354,100
29,774,000
Hamilton
1,344,265
1,914,843
Lorain
514,000
397,020
Mansfield
3,941,361
4,395,305
Youngstown
Pa.-Beaver County.
813,338
964,102
Franklin
317,792
357,299
Greensburg
677,119
1,486.193
Pittsburgh
360,678,834
330,351,402
Ky.-Lexington
3,830.000
3,745,321
W. Va.-Wheeling_ _ _
7,563,373
6,711,866
Total(9 cities)
841,428,313
343,303,748
850,926,233
436,237,530 -21.3
Sixth Federal Rese rye District- Atlanta*13,000,000
Tenn.-Knoxville__ _
12,500,000
Nashville
43,496,400
29,576,243
(]a.-Atlanta
128,000,000
107,000,000
Augusta
4,263,410
2,597,231
Columbus
1,841,520
1,500,786
Macon
2.230,496
1,945,160
Fla.-Jacksonville _ _ _
30,254,925
29,171,616
Tarn pa
3,270,594
3,497,889
Ala.-Birmingham _ _
40.156,951
33,956.909
Mobile
4,202,430
3,071,371
Montgomery
1,952,629
1,669,366
Miss.-liattlesburg _ _
3,219,000
2,897,000
Jackson
4,243,517
Meridian
1,135,225
847,316
Vicksburg
431,822
409,595
La.-New Orleans_ _ _
85,323,394
97,723,627
Total (16 cities)
362,778,805
332,607,616
Seventh Federal ft °serve Distric t-ChicagoMich.-Adrian
d30,035
402,435
Ann Arbor
2,005,353
2,454,760
Detroit
201,503,691
260,603,838
Flint
3.317,404
4,234,198
("rand Rapids
4,377,200
10,042,264
Jackson
6,352,051
1,909,851
Lansing
2,483,246
6,542,375
Ind.-Ft. %Vayne__
2,067,846
3,970,911
Gary
6,988,271
6,020,136
Indianapolis
47,818,000
56,056,555
South Bend
2,213,433
4,232,732
Terre haute
13,513,366
14,343,163
Wis.-Madison
1,680,983
3,013,623
Milwaukee
53,621,916
63,977,297
Oshkosh
1,197,011
1,786,000
Ia.-Cedar Rapids_ _ _
8934,197
82,941,539
Davenport
22,162,165
22,257,153
21,702,977
Des Moines
Iowa City
9,945,764
Sioux City
9,173,631
Waterloo
794,074
773,645
Ill.-Aurora
1,348,978
3,747,278
Bloomington
1,017,716,076
799,227,589
Chicago
2,265.260
1,920,949
Decatur
10,027,114
9,330,093
Peoria
2,085,890
2,476,354
Rockford
4,072,685
6,486,478
Springfield
Total (25 cities)-- -
1,420,073,284 1,316,204,853
+4.0
+47.1
+19.6
+64.2
+22.7
+14.7
+3.7
-6.5
+14.3
+36.8
+17.0
+11.1
+1.8
1,323,000
1,505.375
50,752,495 -25.1
77,541,861
95,415,405
554,727
9,748,235
14,489,747 -32.7
18,815,056
22,710,435
73,841,800
89,353,276 --17.4
130,797,437
162,819,598
-8.4
-5.8
-9.5
-6.3
-13.6
-19.0
-23.0
-27.9
-6.7
-9.6
-16.4
-10.0
-57.1
-11.6
-17.6
-40.1
3,257,212
10,326,644
26,400,000
603,541
1.815.765
6,995,903
20,700.000
498,759
+79.9
+47.6
+27.5
+39.1
3,255,010
9,197.817
29,300,000
1,059,157
2,000.000
19,837.987
37.616,075
1,235.298
457,276
8,631,000
301,601
5,856,261
+51.6
+47.4
543.329
8,649,355
1.466.652
9,787,381
8,653,236
781.958
7,163,910 +20.8
594.792 +31.5
10,446,722
1.032,096
14.037.702
1,632.678
82,316
18,239,189
60,072 +37.0
18,763,124 -2.8
80.844
32,452,603
2,790,762,944 -20.0
77,537,422
62,755,193 +23.6
96,062,013
135,90s
35,127.889
122,927,570
3,592,910
18,832,05;
2,079,229,070
40,211,235
87,155,791
16,547,11
45,331,235
33,523,371
50,620.293
387,960,866
38,230,142
99.963,134
35,192,337
499.0 8,279
13,555.553
822,918,973
157,736.542
157,937,426
11,625
255,810
52,212.714
61,476 -81.1
364,341 -29.8
55,471,931 -5.9
116,251
595.482
111,856,581
154,41N7
57
949,793
2,127,094 -55.3
4,182.801
6,490,670
550.570
404,024
1,195,900 -53.1
1,733,889 -76.7
2,340.028
1,464,178
2,881.073
2.630.034
10,572,000
503,552
2,705,53i
10,793,000 -2.0
733,793 -31.0
2,578,949
A-4.9
14,055.000
887,670
3,647,692
19,550.000
2,035.144
4,023,455
11,817,505
11,342,893
A-4.2
19,159,812
25,128.489
524,402 -63.7
2,129,646
2,635,609
+9.1
2,232,162,416
-92.5
-18.4
-22.7
-21.7
-55.4
A- 232.6
-62.0
-47.9
+16.1
-14.7
-47.7
e551,293
14,643,023
810,798,117
19,870,851
29,746,068
25,522,920
10,920,647
14,908,368
33,454,553
276,642,715
16,859,964
87,703,794
8,942,470
314,1427,192
5,925,101
84.687,258
e24,795,932
133,473,940
+8.4
54,982,912
+2.6
-64.0
+27.3
+17.9
+7.5
+18.7
-37.2
4 216.823
11,015,911
5,434,223,905
12,201,161
57,911,021
15.544,031
25,390,737
80.840,153
274,947,472
853.900.000
25,551,392
13,924,412
15,107,592
291.701,630
35,237,852
277,469,230
26.724.078
15.26:4,246
22.273,000
28,130.714
8,812,647
3,577,041
817,272,460
-84.7
--22.2
--61.0
-50.6
--65.9
i-54.2
-75.9
--55.5
--24.0
--24.7
--55.9
-12.3
--74.6
-53.3
--79.5
--84.3
-11.1
+42.3
-43.9
-41.1
24,040,978
274,003,111
832.046
7.292,292
341,381,577
+22.1
2,434,052,092
190,554
155.061
4,880,267
4,061,673
A-20.2
5,142,525
7,284.585
2,164,707
1,757,065
A-23.2
3,725,000
5,017,774
801,715 -763:4
172,020,003 A-33.1
461.935 A-10.1
1,770,022 A-27.9
539,900 -6.7
1,492,663 -41.1
1,207.859
299,146,204
784.370
2,521,050
1,307.078
2.107.045
1,924,051
632.911.831
1.144.390
4.017,099
2,755,782
2,990.243
209,843,704
A-18.9
476,436,238
879,544,424
61,200,000
17,519,736
47,200,000 +29.7
14,486,307 +20.9
76,300,000
17,715,646
109.800.000
31,594,792
-34.1
-10.4
-76.6
-57.9
9.524,091
b
297,000
6,152,707 +54.8
b
370,572 -19.9
8,637,547
b
639,113
13,576,404
b
1.221.257
2.788,156,966 -12.7
88,540,837
68,209,586 +29.8
103.342,311
156,192,453
75,;22,984 -27.2
12,163,331
30.503,453
7,012,174,200
17,336,793
75,120.224
24,611,416
50,837,930
--65.3
--63.6
-22.5
--29.9
--22.9
-35.8
--50.1
7,449,952,494 11,063,163,415 -32.7
f700,907
1,620.437,195
503.745,563
564.629
38,029,351
595,523.236 -40.6
+16.5
416,702,813
--56.8
--22.3
--13.1
--71.9
--22.3
--77.7
--34.7
-20.2
3,286,373,368 --30.9
+5.4
-12.7
+7.9
12,254,985
83,610.783
782,058,015
20.649,629
24,534,203
27.807,276
1,732.534,490
7,400,349
832,704
353,454,032
74,084,804
258,953,051
772,700.000
23,949,436
12.027,953
12,239,010
224,517,460
25,421,7,6
258,883,243
24.151,299
12,765,921
20,015,000
el2,071,169
7.793,743
2,949,219
489,609,312
-44.2
-16.2
-33.0
-68.2
.6,235,435,034 -22.5
983,907
1,818,000 +16.1
252,563,031
2,271,442,780
Eighth Federal Re serve District -St. LouisInd.-Evansville
361,124
New Albany
280,672,639
229,130,577
Mo.-St, Louis
71,387,482
83,149,878
Ky.-Louisville
Owensboro
4,500,000
*4,000,000
Paducah
33,221,814
47,266,730
Tenn.-Memphis_ _
503,531
273,566
111.-JAcksonvillo _ _ _
2,275,049
Quincy
1,340,000
Total(7 cities)
1930.
+98.1
6.021,976
8,417.569
1.036,299
-7.6
1,645.348
+22.1
35,512,162
43,132.010
+14.5
781,011
924.438
-25.1
597,303
1,033.821
+39.4 4,217.776.705 6,726,774.449
+9.3
7,534.873
10,213,166
--7.4
4,133,530
6.313.955
+24.8
2,754,73
3,413.034
-62.9
434,320
622.767
-8.0
26,533.0;0
40.126.697
-3.9
34,078,753
43,880,743
-4.8
Total (14 cities)--- -
1931.
4,481,033
8,876.925
+56.0
-8.8
763,451
705.643
22,729,091
27,701,652
-14.5
502,269
-23.8
574,953
392,224
-41.0
213,778
-5.7 3,418,252,632 2,452,540,039
4,903,800
-20.3
5,360.639
3,024.499
2.801.925
-19.7
2,002,638
-13.5
*2,500,000
757,727
-31.9
235,134
16,053,890
-32.8
14,777,695
25,214,070
-17.2
24,239,832
-41.4
Third Federal Re- erve District -Philadelphi a-Pa.-Altoona
1,321,738
1,435,723 --7.9
Bethlehem
1,890,751
Chester
1,293,743
1,891,466
Harrisburg
7,869,913
10,790,127 -27.1
Lancaster
4,839,749 -16.8
4,029,403
Lebanon
1,351,374
1,314,013
+2.8
Norristown
1,850,914
1,925,202
3.9
Philadelphia
1,102,000,000 1,147,400,000 -4.0
Reading
5,417,551
8,792,650 -33.4
Scranton
8,539,244
9,622,901 -11.3
Wilkes-Barre
7,043,690
7,809,330 -9.8
York.
5,562,716
+6.7
5,213,752
N. J.-Camden
No longer will report clearing s.
Trenton
13,399,90(
14,600,000
1,159,679,191
Inc. or
Dec.
262,440.671
168,250,754
+79.7
23,334,300
25.652,491
+1.2
634.831,595
801,119,855
+6.9
17,033,630
23,975,633
-20.S
18,500.241
10,910,803
-31.0
+37.6 92,243,185,401 97,797.525.278
226,413,014
180,517.706
+2.0
95.903,544
119,433.203
-13.8
70,949,929
82,060.845
+1.8
17.476,120
11,903,093
-32.6
470,623,013
700.669,144
-22.5
735,244,471
883.227,401
+3.2
23.577,054
40,231,037
-32.8
16,479,863,371 12,087,606,012
Total (13 cities)--- -
1932.
3,457,459 --79.7
1,886,697,575 --14.1
534,931,678 --5.3
36,501,821
305,648,081
3,554,723
17,305,630
293,174
229,039.165
503,727
2,264,170
503,530
879.203
320,722,740
Financial Chronicle
996
Aug. 5 1933
CLEAR!NGS-(Concluded
7 Months Ended July 29.
Month of July.
Week Ended July 29.
_
Clearings at1933.
Inc. or
Dec.
1932.
1933.
Inc. or
Dec.
1932.
1933.
1932.
Inc. or
Dec.
1931.
$
$
%
s
1930.
___.
$
s
%
Ninth Federal R , erve District -Minneapoli sMinn.-Duluth
9,654,013 +51.6
14,638,998
213,514,006 +31.2
280,032,689
Minneapolis
Rochester
976,852 -16.6
814,483
St. Paul
61,896,496 + 13.0
69,954,756
N. D.-Fargo
6,996,239 -11.8
6,167,358
Grand Forks
4,812,000 -36.4
3,061,000
Minot
737,000 -8.4
675,000
S. D.-Aberdeen _ _ _
2,540,85, -21.4
1,997,665
Sioux Falls
3,302,537 +19.0
3,929,206
Mont.-Billings_ _ _ _ _
1,169,232 + 10.0
1,286,135
+9.1
Great Falls
1,734,199
1,891,426
Helena
7,394,500 +23.0
9,091,997
161,192 + 10.4
Lewistown
177,949
Total(13 cities) _ _ _.
393,768,662
314,889,124 +25.0
s
$
%
65,872,349
1,415,516,157
7,575,369
458,380,737
52,397,418
32,306,000
5,688,475
18,197,206
25,537,642
10,134,196
14,984,744
51,144,553
1,287,483
+4.0
-4.9
-35.0
-11.9
-22.2
-46.4
-34.0
-25.8
-10.4
-26.0
-35.3
+3.8
-21.6
2,833,449
64,267,357
1,726,296 +64.3
38,907,444 +65.2
3,647,759
53,231,425
3,819,585
71,264,458
14,991,706
1,517,002
12,269,967 +22.2
+7.4
1,412,782
16,245,768
1,683,922
21,222,5i
1,741,153
_
429,934
562,417 -23.0
671,202
925,65
287,152
215,865 +33.0
397,606
495,07
+2.2
2,132,926
3,020,96
_
1,992,839,912
2.159,022,329
-7.7
85,951,214
56,681,756 +51.6
78,010,608
102,489,4-41
-66.8
-80.6
-23.7
-22,1
-31.9
-19.6
-43.5
-13.9
-18.0
-11.7
-19.5
-28.8
-21.9
-27.8
47,776
c
1,564,683
21,615,951
109,382 -56.3
c
1,229,058 +27.3
18,257,404 +18.4
195,926
c
2,383,356
30,465,451
310,75i
c
3,092,38
41,324,001
1,488,815
2,515,732
1,275,530 +16.7
3,889,752 -35.3
1,837,770
4,324,501
60,325,221 +14.3
69,046,496
2,219,928 +27.3
2,825,572
563,225- 583,895 -3.5
81,077,551
3,742,333
2,522,16;
2,481,96Z
_
120,001,23,
4'
4,572,87
Tenth Federal Re; erve District -Kansas Cit
639,445
Neb.-Freinont
272,327
Hastings
556,877
b
Lincoln
7,139,267
8,205,012
89,611,930
Omaha
96,166,582
Kan.-Kansas City _ .
7,733,874
4,083,095
Topeka
7,419,589
7,654,900
Wichita
14,016,361
20,115,133
1,097,110
Mo.-Joplin
1,442,263
278,537,932
Kansas City
302,068,209
St. Joseph
13,679,000
10,478,000
18,036,412
Okla.-Tu.sa
•
16,304,750
Colo.-Colo. Springs
2,799,275
2,524,944
Denver
77,529,612
74,332,873
2,978,173
Pueblo
1,979,497
y-57.4
____
+14.9
+7.3
-35.6
+3.2
-30.3
+31.5
+8.4
+30.5
-9.6
-9.8
+4.3
-33.5
1,847,518
950,000
46,368,370
533,713,125
37,877,787
45,491,977
70,929,890
8,680,308
1,605,464.264
73,507,597
103,800,045
15,619,378
442,492,464
17,460,925
5,558,478
4,897,532
60,739,699
685,071,542
55,620,970
56,575,951
125,440,234
10,084,988
1,957,487,836
83,251,861
135,147,134
21,943,064
566,248,636
24,174,319
521,525,890
+4.9
3,009,203,648
3,792,242,244 -20.6
Veventh Federal Reserve Distr ict-DallasTexas-Austin
2,926,467
2,684,945
+9.0
2,234,147 -2.2
Beaumont
2,185,121
98,099,022 + 12.5
Dallas
110,367,150
El Paso
9,049,190
+0.9
9,134,473
+3.3
21,520,229
Ft. Worth
22,233,750
7,893,000 -9.2
Galveston
7,166,000
71,751,540 +12.9
80,997,310
Houston
904,020
+3.2
Port Arthur
933,807
Wichita Falls
2,327,993
2,200,000
+5.8
La.-Shreveport
8,234,548 +10.9
9,155,692
20,121,762
16,358,855
696,916,472
60,411,756
131,295,855
47,312,000
544,272,483
6,294,942
14,196,639
58,368,666
+10.2
1,595,540,430
Total(14 cities)---
546,826,522
247,427,765
Total(10 cities) _ _ _ _
224,591,241
Twelfth Federal R eserve Distric t-San Franc isco1,584,000 +10.8
*1,755,000
Wash.-13ellingham_ _
94,852,195 -6.7
Seattle
88,478,203
22,399,000 -11.6
Spokane
19,811,000
1,755,721 -23.6
Yakima
1,340,937
3,761,730 -31.0
2,596,017
Idalo--.Boise
+9.9
413,249
Ore.-Eugene
454,000
60,845,644 +10.8
Portland
77,386,482
1,859,706 +21.7
Utah-Ogden
2,263,550
39,619,426
+6.4
37,244,444
Salt Lake City
Ariz.-Phoenix
6,183,355 +11.6
6,899,893
2,879,815 -1.2
Calif.-Bakersfield_ _ _
2,845,399
12,914,184 -5.4
12,211,768
Berkeley
+5.3
12,131,632
12,773,132
Long Beach
No longer will report clearing s.
Los Angeles
1,756,707 +10.3
1,938,190
Modesto
+5.1
10,981,615
11,983,091
Pasadena
+3.5
2,759,164
2,856,256
RI erside
20,154,254 -46.4
14,022,103
Sacramento
No longer will report clearing 5.
San Diego
432,219,130
+7.4
402,453,320
San Francisco
6,862,032 -10.0
6,174,064
San Jose
5,228,978 -19.5
4,206,821
Santa Barbara
3,661,187
3,911,082
+6.8
Santa Monica
+2.2
5,088,202
5,199,703
Stockton
+2.5
Total(22 cities) _
730,945,849
_
732,775,194
Grand total(170cities) 24,055,588,063 19,296,068,035
Outside New York_ __
7,993,716,598 7,620,804,797
s
68,508,438
1,346,169,539
4,926,543
403,727,783
40,752,568
17,324,000
3,758,026
13,495,711
22,889,694
7,498,130
9,699,766
53,082,003
1,009,711
1,621,594
446,289
100,114,539
1,586,985
455,939
1,268,351
88,346,109 +13.3
125,925,634
176,766,82-1
-35.0
-22.6
-27.3
-42.4
-47.4
-44.8
-17.7
-13.9
-13.4
-35.5
-20.8
-22.5
-18.9
9,452,949
75,420,427
17,809,044
93,052,587
12,553,807
104,781,612
26,009,351
191,554,200
-24.7
-28.0
-31.5
-51.4
2,580,526,849
37,060,216
25,591,207
23,035,690
28,267,573
3,087,814,434
40,556,448
36,259,205
29,551,165
36,405,984
-16.4
-25.2
-29.4
-22.0
-22.4
4,524,790,161
5,649,626,855 -19.9
1,005,639
1,106,715
27,183,041
36,578,72-2
5,647,392
1,885,000
7,625,805.
2,630,066
2,367,973
3,862,9811
30,926,227
29,288,45',
+5.6
38,089,045
51,804,231
19,675,676
4,260,000
253,250
+4.2
18,878,451
4,336,001. -1.8
306,34C -17.3
27,699,396
7,658,000
629,269
33,105,996
9,143,000
648,620
------ _ _
19,073,825
13,831,401
+37.9
22,737,516
36,66
- 7--3
70
8,100,094
7,074,318
+14.5
---
11,830,383
16.:4".
60-,707
2,396,336 +14.6
2,747.363
No longer WI 11 report clear trigs.
4,163,086
6,285,439
+14-.6
3,559,181
5,076,617
4,067,303 ---317
2,736,221
No longer will report clear ings.
94,305,211
81,079,463 +16.3
+3.3
1,220,399
1,261,195
744,785
+7.6
801,274
710,302 +34.8
957,833
899,729 +11.5
1,003,354
5,251,270
4,514,619
134,561,705
2,496,319
1,230,040
1,402,046
1,254,800
176,382,289
2,789,442
1,604.785
1,768,381
1,718,300
137,560,665 +14.6
224,473,611
292,170,562
1,843,725,297 -13.5
12,519,540
701,536,391
177,623,000
13,413,329
28,858,757
4,789,575
547,266,168
13,447,575
284,013,226
68,096,253
21,092,099
104,299,199
98,185,537
1,213 1j
1,135,828
440,002 +22.6
27,840,389 -27.7
539,520
27,856,679 -41.3
22,803,927
21,550,595
+5.8
795,012,620 -12.3
75,594,657 -20.1
168,433,533 -22.0
4,326,782 +10.8
4,794,796
1,583,000 -18.1
63,037,000 -25.7
1,296,000
587,585,832 -7.4
8,267,994 -23.9
17,281,000 -19.2-17.8
-+7.5
1,388,071
72,215,593
1,491,984
8,137,000
542,941,843
129,215,000
7,719,994
15,184,077
2,644,000
450,145,005
11,583,240
245,967,292
43,927,831
16,705,683
80,821,690
79,580,964
762,918
-2.1
2,469,686
157,644,982
2,015,831
+24.7 139,026,480,222 156,975,903,361 -11.4 5,124,286,213 3,970,158,413 +29.1 6,683,359,276 10267 500,317
+4.9 40,778,294,821 59,178,378,083 -21.0 1,706,033,581 1,517,618,374
+12.4 2,465,582,571 3,540,725,868
CANADIAN CLEARINGS FOR JULY, SINCE JANUARY 1, AND FOR WEEK ENDING JULY 27.
Week Ended July 27.
7 Months Ended July 27.
Month of July.
Clearings at1933.
$
460,724,432
567,975,330
499,883,837
64,151,022
17,106,049
17,942,873
9,364,864
18,661,178
27,393,268
6,962,628
6,606,357
11,555,434
*19,750,000
14,391,715
1,466,589
1,539,466
5,263,508
2,058,072
3,787,907
2,419,737
1,970,743
926,965
2,870,486
2,580,340
4,098,855
11,441,127
1,096,262
2,788,734
2,765,688
2,187,948
1,912,103
2,537,145
CanadaMontreal
•
Toronto
innipeg
•
Vancouver
Ottawa
Quebec
Halifax
Hamilton
Calgary
St. John
Victoria
London
Edmonton
Regina
Brandon
Lethbridge
Saskatoon
Moose Jaw
Brantford
Fort W illiam
New Westminster__ _ _
Medicine Hat
eterborough
Sherbrooke
Kitchener
V. indsor
Prince Albert
Moncton
Kingston
Chatham
Sarnia
Sudbury
Total(32 cities)- -
1932.
Inc. or
Dec.
$'
/0
336,817,664 +36.8
357,637,032 +58.8
176,510,470 +183.2
52,480,233 +22.2
+1.2
16,910,799
18,235,905 -1.6
10,041,519 -6.7
15,823,950 +17.9
17,191,902 +59.3
6,928,000
+0.5
6,183,378
+6.8
11,052,109
+4.6
15,708,391 +25.7
11,840,718 +21.5
1,594,666 -8.0
1,341,046 +14.8
5,575,877 -5.6
2,259,658 +17.6
3,508,820
+8.0
2,719,573 -11.0
1,999,399 -1.4
766,358 +21.0
2,704,560
+6.1
2,485,318
+3.8
+9.2
3,751,937
10,249,291 +11.6
1,138,855 -3.7
2,834,187 -1.6
+1.1
2,735,654
1,600,824 +30.7
1,862,803
+2.6
1,977,455 +28.3
1,796,789,662 1,104,468,356
+62.7
1933.
$
2,360,872,347
2,794,978,122
1,576,010,182
369,200,453
112,709,014
109,138,580
57,638,559
99,954,369
144,188,886
41,820,321
38,580,317
68,004,669
105,247,402
87,297,015
7,874,319
9,003,214
32,589,667
15,220,516
21,507,760
14,815,450
11,878,169
5,182,115
15,636,390
15,562,839
24,040,540
62,095,047
6,491,749
17,471,679
14,543,956
12,129,243
10,396,103
14,118,568
8,276,203,620
1932,
$
2,311,282,026
2,350,464,695
1,033,131,606
371,998,157
142,459,650
124,872,242
70,346,064
114,785,813
142,139,934
51,874,845
42,535,221
77.858,547
114,688,089
94,558,914
9,932,467
9,320,971
40,684,301
16,512,731
23,608,076
16,746,162
13,951,327
5,217,818
17,620,908
17,219,326
26,054,597
70,873,441
8,684,202
21,803,379
16,773,495
13,026,781
12,102,636
14,450,012
Inc. or
Dec.
%
+2.1
+18.9
+52.5
-0.8
-20.9
-12.6
-18.1
-12.9
+1.4
-19.4
-9.3
-12.7
-8.2
-7.7
-20.7
-3.4
-19.9
-7.8
-8.9
-11.5
-14.9
-0.7
-11.3
-9.6
-7.7
-12.4
-25.2
-19.9
-13.3
-6.9
-14.1
-2.3
7,397,578,433 +11.9
1933.
$
104,612,371
137,208,217
151,304,682
16,332,338
3,815,225
3,745,421
1,830,010
3,784,429
6,546,621
1,481,550
1,473,519
2,304,140
3,051,984
2,409,744
296,933
337,672
1,059,474
418,169
754,386
522,024
444,410
195,869
607,393
606,750
899,974
2,897,360
228,428
864,458
557,359
481,075
454,527
621,680
452,148,192
c Clearing House not functioning at preseat.
b No clearings avai able.
a Not included In totals.
e Three months' figures. f Two months' figures. * Estimated.
1932.
Inc. or
Dec.
1931.
"
,0
+59.0
+93.9
+272.0
+41.8
+12.9
+20.4
-1.0
+24.1
+95.3
+12.2
+24.0
+1.1
-9.0
+2.7
-4.5
+30.4
-9.4
-1.0
+22.1
-18.5
+3.6
+35.0
+23.5
+28.4
+13.9
+26.6
-0.5
+20.3
+11.3
+58.2
+31.3
+46.3
$
82,297,169
77,057,404
41,712,667
15,288,181
4,413,009
5,589,319
2,353,453
3,865,492
4,191,457
1,686,259
1,883,251
2,328,364
3,580,396
2,511,652
355,879
363,324
1,469,311
504,229
728,660
513,473
527,386
351,941
600,603
591,053
807,600
2,241,339
302,739
650,612
547,207
356,840
295,339
719,058
224,553,678 +101.4
260,684,666
$
65,796,404
70,776,326
40,672,877
11,519,999
3,380,210
3,109,594
1,849,364
3,049,530
3,352,714
1,321,003
1,187,853
2,278,184
3,353,531
2,345,542
310,926
258,999
1,169,076
422,371
617,700
640,664
428,880
145,037
491,991
472,567
790,224
2,288,099
229,568
718,872
500,505
304,028
346,130
424,815
1930.'
$
109,384,834
85,901,945
45,768,600
16,078,195
6,130,947
5,741,337
2,741,853.
4,856,399
6,064,190
2,246,956
2,030,962
2,765,018
4,231,320
3,223,545
483,999
496,233
2,083,915
1,037,344
916,876
647,344
809,473
222,610
756,566
654,918
947,529
2,994,338
393,212
800,670
956,573
503,293
515,603
1,019,403
313,400,666
d Two weeks clearings; Clearing House reopened July 17,
Financial Chronicle
Volume 137
PRICES ON PARIS BOURSE.
Quotations of representative stocks on the Paris Bourse
as received by cable each day of the past week have been
as follows:
July 29 July 31 Aug.1 Aug.2 Aug.3 Aug.4
1933.
1933.
1933.
1933.
1933.
1933.
Francs. Francs. Francs. Francs. Francs. Francs.
Bank of France
12,500 12,500 12,600 12.600 12.700
Banque de Paris et Pays Bas
1,666
1,660
1,650
1,660
1,650
Banque d'Uttion Parlslenne
362
360
360
363
Canadian Pacific
313
316
309
305
315
Canal de Suez
19,400 19.275 19,435 19,650
---Cie Distr d'Electrieltle
2,700
2,230
2,655
2,670
Cie Generale d'Eleetrleitle
22,230
,85
2,220
2,230
2,220
Citroen il
550
545
541
550
Comptoir Nationale d'Escompte
1,13(1
1,150
1,120
1,130
1,140
Coty Inc
250
240
240
240
230
Courrieres
377
374
370
371
Credit Commercial de France_
841
836
838
845
Credit Fonder de France
4.5i6
4,970
4,960
4,990
4,960
Credit Lyonnais
2,270
2,270
2,270
2,260
2,270
Distribution d'Electricitie la Par
2,710
2,690
2,670
2,620
2,680
Eaux Lyonnais
2,940
2,890
2,920
2,900
2,930
Energie Electrique du Nord_
760
762
755
760
Euergie Electrlque du Littoral
1,015
1,010
1,022
1,014
French Line
72
65
78
75 •
Galerles Lafayette
Holt92
93
91
93
92
Gas le Bon
day
1.140
1,130
1,150
1,140
1.120
Kuhlmann
670
670
650
650
660
L'Air Liquide
820
820
810
810
820
Lyon (P L M)
922
922
912
912
Mines de Courricres
-570
380
370
370
370
Mines des LOLLS
470480
490
470
Nord Ry
1,400
1-,:100
1,400
1,390
1,490
Orleans Ity
888
815886
Paris, France
1-,056
1,070
1,070
1,060
1-,070
Pathe Capital
81
81
81
81
Peehiney
1-i513
1,280
1,250
1,250
1,260
Routes 3%
67.10
67.00
66.90
67.10
67.00
Routes 5% 1920
108.30 108.00 107.60 108.90 109.00
Rentes 4% 1917
78.00
77.60
77.20
77.40
77.20
Routes 4% 1932 A
83.30
83.30
82.80
83.10
83.00
Royal Duteh
1,760
1,750
1.770
1,760
1,740
Saint Gobain C & C
___ _
1,338
1,330
1,315
1,326
Schneider & Cie
1,602
1,546
1,580
2,590
---Societe Andre Citroen
550
550
550
540
550
Societe Francalse Ford
93
92
91
91
91
Societe Generale Fonciere
144
145
142
144
143
Societe Lyonnalse
___ _
2,930
2,930
2.920
2,805
Societe Marsellialse
575
572
571
574
Suez
19,400 19,300 19,200 19,600 19,iii()
Tubize Artificial Silk pref
179
176
175
180
Union d'Electricitie
920
-iiiii
930
920
920
Union des Mines
230
220
220
Wagon-Lits
99
95
97
92
-- - -
THE BERLIN STOCK EXCHANGE.
Closing prices of representative stocks as received by
cable each day of the past week have been as follows:
July
29.
July
31.
Reichsbank (12%)
152
Berliner Handels Gesellschaft (5%)
88
Commerz'und Priv:it Bank A G
50
Deutsche Bank und Disconto-Gesellschaft.._
55
Dresdner Bank
45
Deutsche Reichsbahn (Ger Rys) prof(7%)
100
Allgen eine Elektrizitaets-Gesell (A E C)
21
Berliner Kraft u Licht(10%)
109
Dessauer Gas (7%)
11011- 116
Gesfuerel (5%)
81
day
Hamburg Elektr-Werke (8%%)
103
Siemens & Ilaiske(7%)
154
I a Farbenindustrle (7%)
132
Salzdetfurth (7%%)
Rheinische Braunkohle (10%)
206
Deutsches Enloe!(4%)
112
Mannesmann Roehren
63
HaPag
14
Norddeutscher Lloyd
15
Aug. Aug. Aug. Aug.
4.
3.
1.
2.
Per Cent of Par
151
151
151
147
87
87
87
87
49
49
50
49
54
54
55
54
45
45
45
45
99
99
100
99
21
21
21
21
109
110
108
109
116
114
116
114
81
80
80
80
104
105
102
105
153
155
153
154
132
133
131
131
171
171
171
201
206
183
112
111
111
109
63
63
62
61
14
14
14
14
15
15
15
14
In the .following we also give New York quotations for
German and other foreign unlisted dollar bonds as of Aug. 4
1933:
Anhalt 75 to 1946
Argentine 5%, 1945, $100
pieces
Antioquia 8%, 1946
Austrian Defaulted Coupons
Bank of Colombia, 7%,'47
Bank of Colombia, 7%,'48
Bavaria 6 Y28 to 1945
Bavarian Palatinate Cons.
Cit. 7% to 1945
Bogota (Colombia)631,'47
Bolivia 6%, 1940
Buenos Aires scrip
Brandenburg Elec. 6s, 1953
Brazil funding 5%, '31-51
British Hungarian Bank
6318. 1962
Brown Coal Ind. Corp
630, 1953
Gall (Colombia) 7%, 1947
%, 1944
Callao (Peru)
Ceara (Brazil) 8%, 1947._
Columbia scrip
Costa Rica scrip
City Savings Bank, Budapest, 78, 1953
Deutsche Bk 6% '32 unst'd
Dortmund Mun Util Os,'48
Duisberg 7% to 1045
Duesseldorf 7s to 1945__
East Prussian Pr. Os, 1953.
European Mortgage & Investment 7345, 1966_ __ _
French Govt. 535s, 1937..
French Nat. Mall SS.(18,'52
Frankfurt 7s to 1945
German ALI Cable 7s, 1945
German Building & Land
bank 6%%,1948
Raid 6% 1953
Ilamb-Am Line 630 to '40
Hanover Harz Water Wks.
6%, 1957
Housing & Real Imp 7s,'46
Hungarian Cent Mut 75.37
Hungarian Discount & Exchange Bank 75. 1963_
Bid
25
72
r24
175
127
/27
j32
A sk
30
26
31
36
fl9
f23
110
118
56
38
22
25
13
28
58
41
/40
43
58
/18
/5
7
120
/23
61
1912
712
12
35
28
137
164
40
/13
17
43
-43
-17
21
46
40
/63
125
117
2419
52
66
31
60
69
35
65
72
/26
38
137
30
42
31)
f31
33
IFIat price.
12 i
2812
55
Bid
Ask
Hungarian defaulted coups j60
Hungarian Hal Ilk 7348,'32 /71
76
3812 4012
Koholyt 6345. 1643
54
Land M 13k, Warsaw 8s,'41
59
Leipzig Oland Pr.6342s.'46 65
68
Leipzig Trade Fair 7s, 1953 2912 3112
Luneberg Power. Light &
5412 5712
Water 7%, 1948
47
Mannheim & Palat 75, 1941
50
1.3412 37
Munich 7s to 1945
Muffle Bk,Hessen, 7s to '45 25
30
Municipal Gas & Dee Corp
Recklinghausen, 7s. 1947 34
37
Nassau Landbank 634s.'38 63
67
Nati Bank Panama 612%
40
1946-9
42
Nat Central Savings Bk of
Hungary 734s, 1062._ /45
47
National Hungarian & Ind.
f45
Mtge. 7%, 1948
47
Oberpfalz Elec. 7%, 1946.. 32
35
Oldenburg-Free State 7%
25
to 1945
30
Porto Alegre 7%, 1968...... /25
30
Protestant Church (Ger39
many), 7s, 1946
42
Prov Bk Westphalia 6s,'33 153
Prov Ilk Westphalia 6s,'36 35
-4-5Rhine Westph Elec 7%,'36 /44
47
Rio do Janeiro 6%, 1933.. /24
26
Rom Cath Church 63-Is,'46 5412 5712
R C Church Welfare 7s,'46 40
42
Saarbruecken M Elk 6s, '47 67
74
Salvador 7%, 1957
J1712 19
Santa Catharina (Brazil),
8%, 1947
/211.
23
Santander (Colom) 7s, 1948 /14
16
Sao Paulo (Brazil) 6s, 1947 /16
18
Saxon Pub. Works 5%,'32 f35
Saxon State Mtge. Os, 1947 60
63
Stem & Halske deb 6s, 2930 200
235
44
Stettin Pub ULU 7s, 1946._
46
Tucuman City 7s, 1951_ _ _ /23
26
Tucuman Prov. 7s, 1950_
33
37
Vesten Elec Ry 75, 1947.. /22
25
Wurtemberg 7s to 1945... 39
41
997
THE ENGLISH GOLD AND SILVER MARKETS.
We reprint the following from the weekly circular of
Samuel Montagu Sc Co. of London, written under date of
July 19 1933:
GOLD.
The Bank of England gold reserve against notes amounted to £189,694,971
on the 12th inst., showing no change as compared with the previous Wednesday. No purchases of importance have been made by the Bank during
the week. Demand for the moderate amounts of gold available in the
open market was keen, and prices continued to rule at a premium over
franc pat ity. Purchases were made for the Continent, but a good proportion
of the supplies was again taken for destinations not disclosed.
Quotations during the week:
Per Ounce
Equivalent Value of
Fine.
E Sterling.
July 13
124s. Id.
13s. 8.32d.
July 14
124s. 2d.
13s. 8.21d.
July 15
124s. 3d.
13s. 8.10d.
July 17
124s. 3d.
13s. 8 10d.
July 18
124s. 534d.
13s. 7.82d.
.July 19
124s. 4d.
13s. 7 99d.
Average
1245. 3.08d.
13s. 8 09d.
Gold shipments from Bombay last week amounted to about re82.000.
The SS. "Mantua" carries $255.000 consigned to London and £31,600 to
Paris; the SS. "Gange" has £316,000 consgined to Naples; and the SS.
"Castalia" £80,000 consigned to Liverpool.
SILVER.
A quieter tone has prevailed during the past week, and prices showed
only small variations. American support and speculative buying following
the proposals submitted on the 13th inst by Senatm Pittman at the World
Conference, imparted some steadiness to the market, but the demand was
offset by Continental selling and re-sales by speculators.
The Indian Bazaars have bought, and yesterday buy:ng by Ch:na followed f rmer exchange adv ces from that quarter.
Reports rece'ved to-day of further d scuss on at the World Conference
seem tc ind'cate the fa lure of effotts to reach an agreement to secure
internat'onal control of s Iver, in wh ch case the outlook of the market
would appear doubtful In view of the speculative bull position built up in
the hope of a more favorable outcome.
Quotations during the week:
IN LONDON.
IN NEW YORK.
Bar Silver per Oz. Std.
(Cents per Ounce .999 Fine).
Cash Deliv. 2 Mos. Deliv.
July 13_ 18%cl.
1834d.
July '2
08 13-16
July 14__18 11-16d. 18 13-16d.
July 13
40 7-16
July 15__18 11 16d. 18 13-16d.
July 14
4034
July 17__18 11-16d. 18 13-16d.
July 15
405i .
July 18.1834d.
July 17
40%
July 19_18 9-16d.
18 11-16d.
July 18
40 13-16
Average_ _18.666d.
18.791d.
The highest rate of exchange on New York recorded during the period from
the 13th inst. to the 19th inst. was $4.87, and the lowest $4.75.
No further Indian currency returns are yet to hand.
The,
tocks in Shanghai on the 15th inst. consisted of about 126.400,000
ounces in sycee, 277,500.000 dollars and 6,300 silver bars, as compared
with about 126 200,000 ounces in sycee, 277,500,000 dollars and 6,300
silver bars on the 12th Inst.
ENGLISH FINANCIAL MARKET-PER CABLE.
The daily closing quotations for securities, &c., at London,
as reported by cable, have been as follows the past week:
Sal.,
Mon.,
Tues.,
July 31.
July 29.
Aug. 1.
Silver, per oz__
18d.
1715-16d.
1734cl.
Gold, p.fine oz. 123s.8d.
124.s.
124s.
Consols, 234%. Holiday.
7234
7234
British 334%W.L
Holiday.
9834
9834
British 4%Holiday.
1960-90
10934
10934
French Rentes
(in Paris)3% fr. Holiday.
66.00
67.10
French War L'n
(in Paris)5%
1920 amen_ _ Holiday.
107.60
108.00
Wed.,
Aug. 2.
1734d.
124s.3d.
7334
Thurs.,
Aug. 3.
1734cl.
124.9.7d.
7234
Fri.,
Aug. 4.
1734d.
124s.634d.
7334
99
9834
10931
9934
110
10934
67.00
67.00
67.10
108.30
108.90
109.00
The price of silver in New York on the same days has been:
Silver in N. Y.,
per oz. (cts.)
3534
3534
3536
353-1
36
3576
Bank Notes-Changes in Totals of, and in Deposited
Bonds, &c.
We give below tables which show all the monthly changes
in National bank notes and in bonds and legal tenders on
deposit therefor:
June 30 1933
May 31 1933
Apr. 30 1933
Mar.31 1933
Feb. 28 1933
Jan. 31 1933
Dec. 31 1932
Nov. 30 1932
Oct. 31 1932
Sept. 30 1932
Aug. 31 1932
July 30 1932
June 30 1932
Amount Bonds
on Deposit to
Secure Circula
Zion for National
Bank Notes.
Bonds.
856,394,230
897,952.290
899,410,240
885.871,740
806,026,070
796.069,670
796,908,870
812.590,590
799.672,590
780,377,630
793.600.490
672,408,440
670,487,590
$
853,935,968
864,590,423
893,199,238
875.820.165
800.885,900
786.034.870
786,734.150
796,032,621
787,913.945
769,831.107
719,829.513
667,831.250
669,570,345
National Bank Circulation
Afloat onLeval
Tenders.
116,665,120
116,072.980
88,832.155
90,640.375
93,435,155
95.111,140
94,596.698
79.848.287
75.161,955
62,191.678
63,576.840
66.046,173
67,103,868
Total.
970.601,088
980,663,403
982,031,393
966,660.540
894,321,055
881,146.010
881.330.848
875.880.908
863,075.900
832,022.785
783,406,353
733,877,423
736,674,213
$2,581,934 Federal Reserve bank notes outstanding July 1 1933, secured by
lawful money, against $2,772,040 on July 1 1932.
Financial Chronicle
998
The following shows the miscount of each class of United
States bonds and certificates on deposit to secure Federal
Reserve bank notes and National bank notes June 30 1933:
U. S. Bonds Held May 31 1933 to Secure
On Deposit to On Deposit to
Secure
Secure Federal
Reserre Bank National Bank
Notes.
Notes.
Bonds on Deposit
June 1 1933.
2s, U. S. Consols of 1930
2:4. U. S. Panama of - 1936
24, U. S. Panama of 11138
3s, U. S. Treasury of 1951-1955
3k8, U. S. Treasury of 1946 1949
3%s, U. S. Treasury of 1941-1043
3%s, U. S. Treasury of 194o 1943
34,s, U. S. Treasury of 1943 1947
3s. U. S. Panama canal of 1961
3s, U. S. convertible of 1946-1947
Totals
Total
Held.
$
565.944,300
45.468,580
22,73 4,900
76.933,200
53.033.400
44.754.400
19.331.(50
27,018 Ou))
1.000
1,020.000
565.944,300
45,468.580
22,731,900
76,993,200
53.033.400
44,754,400
19,331.450
27.048.1;00
1 000
1.020,000
856.394,230
856,394,230
Tho following shows the amount of National bank notes
afloat and the amount of legal tender deprsits June 1 193
and July 1 1933 and their increase or decrease during the
month of June.
Notional Bank Notes-Total AfloatAmount afloat June 1 1933
Net decrease during June
$980,663,403
10,052,315
$970,601,088
Amount of bank notes afloat July 1 _
Legal Tender NotesAmount on deposit to redeem National bank notes June 1
Net amount of bank notes redeemed in June
.$116,072,980
592.140
Amount on deposit to redeem National bank notes July 11033
$116,665,120
New York Produce Exchange Securities Market.Following is the record of transactions at the New York
Produce Exchange Securities Market, July 29 to Aug. 4,
both inclusive, compiled from sales lists:
Stocks-
Sales
Friday
for
Last ll'eek's Range
'reek.
Sale
of Prices.
Par. Price. Low. High. Shares.
*
Abitibi Pow & Paper
.10
1
Admir Alaska
1%
1
Aetna Brew
6%
1
Allied Brew
1
Altar Consolidated
*
American Republics
*.
Andes Petroleum
1.50
1
Arizona Comstock
1
Bancamerica Blair
Beverages Units
.56
I
Black Hawk Cons
2.%
*
Brew & Dist v t c
3..5
*
Dhicago Gulf
*
Dolor Pictures
234
Dombustion Engine w I_ _1
.15
1
Domo Minos
.15
*
Dontinental Shares
1
Droft Brew
134
1
*
Davison Chemical
2%
1
Eagle Bird
8
61 Canada Units
1
EUizabeth Brew
234
1
2
Fada Radio
1
13
Falstaff Brew
*
Fashion Park
100
Preferred
2
33.4
lock Brew
.14
10
Fuel Oil Motors
2%
,uhrmann & Schmidt_1
4
1
3eneral Electronics
10 14%
3olden Cycle
*
.20
lartman A
.15
*
B
*
11) Rubinstein pref
*
ndian Motorcycle
2%
1
retter Brewing
3%
1
(ildun Mining
1
*
{inner Airplane
1
(Ingsbury Brew
1
3
Cuebler Brew
3
..essings
1
..ock Nut
.65
1
dacassa Mines
.26
*
darmon Motor
*
xTewton Steel
10
2
'aramount Publix
2%
1
'aterson Brew
1
'etroleum Cony
1
'olyrnet Mfg
234
1
tallways N
53%
1
tayon Industries A
thodesian Selec Tr 5 sh
%
*
tichfield Oil
5.50
tossville Alcohol
25 23
Preferred
tustless Iron war
liortwave Sr Television 1
1.50
1
Iscoe Gold Mines
3
*
tandard Brewing
1
ylvanite Gold
1
'Illier Thompson
.10
1
Inited Cigar
100
Preferred
5
New w i
1
'Ictor Brew
Vayside Consolidated_50c
.40
*
Vestern Television
1
A
5
.26
Villys-Overland
.32
1
enrIAGold
300
2
1%
.11
2,500
.10
1,000
1%
234
2,200
534 6%
1,000
2
214
100
134
134
.19
1.500
.19
1.25 1.50 20,200
10)1
4% 4%
400
2% 2.A
50(1
.56
.56
2% 12,50(1
2
2,700
%
1
100
2%
23-4
200
234.
24
.15 2,000
.12
400
.23
.15
1% 4.100
13.4
1,200
1
1
700
234 3
8% 10,900
7
4,200
2% 234
2,000
1%
2
1,900
1234 14
100
%
%
200
2
2
1,100
3% 3%
.14
.20 4,000
3,700
2% 3
2,60(1
3% 4
100
14% 14%
.20
.25
500
.13
.20 2,700
100
6% 6%
2% 3%
300
100
2% 2%
3,100
3% 4
300
I
1
600
11
11
2,100
3%
3
200
5% 7%
300
1%
13-4
500
.65
.65
.30 3,2(10
.25
100
5% 5%
1% 2% 14,500
900
2
234
200
X
X
800
IX
2%
3.200
2% 234
5% 5% 47,600
200
2% 2%
x
2,400
34
2,550
19
15
425
21% 23%
% 2,500
%
.50 2,200
.25
600
1.42 1.50
600
3
3
.95 1.00 2,00))
300
6
6
.15 39,700
.03
100
.38
.38
200
sy, 83-4
200
1%
1%
.53 1.000
.52
.40
.50 2,100
1,400
1% 2%
5.100
.31
.25
.35 6,000
.25
Range Since Jan. 1.
Low.
1% Aug
.05 Mar
1% July
43/s July
134 June
1 34 June
.05 Jan
1.15 July
1% July
July
2
.40 July
1% July
% Aug
2% Aug
1
''ay
.08 May
.10 Feb
July
I
.15 May
2% Aug
4% June
July
2
1% July
May
7
% Aug
2
Aug
2% July
.10 Jan
2% July
2% Jan
8% Mar
.20 Aug
.13 July
2% Mar
2% July
2% July
Mar
I
.30 Feb
10% July
3
July
4
May
154 May
.19 Jan
% July
2
May
.12 Mar
2
Aug
.33 Apr
1% July
X Apr
4% July
Jan
1
% Aug
Jan
1
3% Jan
1.4 July
.15 Apr
1.01 Mar
2% July
.95 July
July
6
.06 Feb
.38 Aug
8% July
134 July
.28 June
% Apr
1% July
.06 Mar
.09 Jan
High.
July
Feb
June
June
Aug
June
June
Aug
July
July
Aug
July
Aug
Aug
July
May
May
July
234 June
334 July
8% Aug
43-4 June
2% May
20% May
1% July
4% July
534 June
.28 Feb
3% July
4
May
16
July
% June
.35 June
7% July
3% Aug
3% July
July
5
Aug
1
17% July
3% Aug
7% Aug
1% June
.74 June
U June
10% July
23-4 July
June
5
1 % Feb
July
5
33-4 Jan
534 Aug
July
3
1
June
July
32
31% July
% Aug
X June
1.80 July
5% May
1.45 June
6% July
X June
4% May
8% July
June
2
.72 July
June
1
73-4 June
% June
.48 June
3
.19
3
1134
2%
3%
.32
1.50
4%
234
.56
334
I
2%
2%
.20
%
2%
* No par value.
sews
Zommerciaiand illiscellantons
....„
.,.„
National Banks.-The following information regarding
National banks is from the office of the Comptroller of the
Currency, Treasury Department:
CHARTERS ISSUED.
July 22-First National Bank of Marissa. Marlssa,II
Preddent: Will J. Brown. Cashier: It, E. Hamilton.
Will succeed The First National Bank ot Marissa. No.
6691.
Capital.
$25,000
Aug. 5 1933
Cap'ml.
2.250,000
July 22-Union Nat. Bank In Kansas City. Kansas City, Mo_
Capital stock consists of $1.350.000 preferred stock,
and $1100.000 common stock. President.: Ben It. Ilicks.
Cashier: E. J. McCreary Jr. Will succeed Fidelity
National hank & Trust Co. of Kansas City. N ). 11 )44
600,000
July 26-City National flank of Baton Rouge, Baton Rouge. La_
Capital stock consists of $300,000 preferred stock. and
$300.000 common stock. President: W. II. Bynum.
Cashier: D. 1. Cazedessus. Will succeed Bank of
Rouge and Union Bank & Trust Co. of Baton
1
Rouge.
July 28-Manufacturers Nat. Bank of Detroit, Detroit, Mich. __ 3.000.000
Capital stock consists or $3,000.000 common stock.
President: John Ballantyne. Cashier: Hoary II. Sanger.
July 28 Community Nat. Bank of l'ontiac, Pontiac, Mich
400,000
Capital stock consists of $200,000 pref. stock, and
8200.000 common stock. Will succeed The FI s Nat.
Bank at Pontiac. N ). 13610
Auction Sales.-Among other securities, the following,
not actually dealt in at the Stock Exchange. were sold at auction
in New York, Boston, Philadelphia and Buffalo on Wednesday of this week:
By Adrian H. Muller & Son, New York:
Sit.
$
Shares. Socks.
$6,2011 lot
360 Laura Gordon, Inc.(N. Y.), par $106
$15 lot
10 R C. lintel Corooratlon (N. Y.). pref
$8 lot
50 R C. Hoyel Corporation (N. Y.), pref
Certificates Nos. 358, 12, 112, 153 of the Queens Valley Gold Club, Inc. $50 per elf.
lot
80 Henry G. Ingersoll, Inc. (N. Y.), par 810
20
135 The Tuinucu Sugar Co. (N. Y.), par $100
Per$'
C
5
Bonds$1,000 Number Three West Fifty-First Corporation, 5% debenture bond,
May 1 1957----------------------------------------------------50% & int.
By R. L. Day & Co., Boston:
$ per Sit
Shares. Stocks.
1011 First National Bank, Boston, par $20
2834
5 Richard Borden Mnufacturin Co., par $100
3 Essex Co., par 50
63%
1,500 Lavonia Manufacturing Co., pref., par $100
0(116
12 Vanadium Corporation of America
23
137 United Founders Corporation, common
•
1%
(3
17 Batchelder, Snyder. Dorm & Doe, common
purchase
stk.
corn.
warrants
attached.. _$55 lot
300 Public Utility Holding Corp.,
14 Fort Wayne-Lima Rd. Co.. corn. v.t.c.: $600 5s, gen. mtge., Jan. 1 1957
coupon July 1931 and sub. attached
$4 lot
14
50 American British & Continental Corp., 1st pref
131 United Founders Corporation, cormnon
common
Companies,
13 Massachusetts Lighting
60%
15 Eiliott Addressing Machine Co., pref. par $100
27
By Barnes & Lofland, Philadelphia:
$ per Sit.
Shares. Stocks.
20 Philadelphia National Bank, par $20
573-4
20 Chase .\ ational Bank,:New York, par $20
2934
Granting
Lives
&
Annulties, par $10
30 Pennsylvania Co. for Insurances on
2834
11
10 Real Estate-Land Title & Trust Co., par $10
40 John B. Stetson Co., cormnon, no par
18%
10 A
4 Philadelphia Bourse. common, par $50
41 j
10 Catawissa Railroad Co.. preferred, par S50
30 _,i
40 Bri:1 Corporation, preferred
By A. J. Wright & Co., Buffalo:
Shares. Stocks.
$ per Sit.
lot
75 Chas. Cory & Sons, Inc--------------------------------------25c,-----------------$1.05 lot
300 Coldak Corp.. class A ------
DIVIDENDS.
Dividends are grouped in two separate tables. In the
first we bring together all the dividends announced the
current week. Then we follow with a second table in
which we show the dividends previously announced, but
which have not yet been paid.
The dividends announced this week aro:
Name of Company.
Per
Cent.
Public Utilities.
Allentown-Bethlehem Gas,7% pt.(qu.) _
Baton Rouge Elec., 43 praf.(gu(r.)
Central Aritansas r'.S. Corp. p:ef.(4 u.).
Cent. Miss. Vall. Elec. drop. Pr.(QudCnester Wet. Serv. Co.,$54 Pr.(4 u.)
Clear Sprg. Wat. Serv., $6 pref. (quar.)
Dayton row.& Lt.,6% pref.(monthly)Eastern 1701. Assoc.. common (quar.)
El Paso Elec.(Del.). 7% pref. A (quar.)$6 Pref.(land 6% pref.(quar.) (qu.)_
gtd.
Empire & Bay State Tel..
Fairmont Park & Hadington Pass. lty_ _ _
(quar.)
pref.
Co.
Trac.
Federal Lt. &
National Tel.& Tel. class A (guar.)
1st preferred (guar.)
New Rocnelle Water Co.(quar.)
Nova Scotia Lt.& row..6% Prof. (qu.)_
Ohio Pow. Co.,6% pref. (Uttar-)
58 1-3c
Ohio Pub. Ser. Co. 7% pref. (tnthly.)500
6% preferred (monthly)
41 2-3o
(monthly)
5% preferred
$IX
Penn State Plater Corp., pref.(q uar.)
$IX
Peoples Telep. Corp., prof. (quar.)
Pittsburgh Suburban Water Service Co.
$1%
$54 preferred (guar.)
134%
Ponce Electric. 7% pref.(quar.)
$I )1,
Rochester Gas & El., 7% peer. B (quar.)_
$1%
6% preferred C (quar.)
$11.4
6% preferrd 0(quar.)
Southern California Edison Co., Ltd.
7% preferred series A (quill%)
IA%
6% preferred series B bluer.)
$1%
Susquehanna Utilities. pref.(guard
750
Tide Water Pow.,$6 pref. ((luar.)
581-Jo
Toledo Edison Co. 7% pref. (mthly.)
500
6% preferred (rnonthlY)
412-3c
5% preferred (monthly)
40
United States El. Lt. & Pow. Shs., ser. B
90e
((Mad
Washington Gas Light Co.
134%
Wheeling Elec. Co., 6% pref. (quar.)
$134
Williamsport. $6 pref. (guar.)
Fire Insurance Cos.
Seaboard Insurance ((intr.)
Southtrn Fire Insurance Co.(N. Y.),,
Miscellaneous.
Affiliated Products, Inc (oto.)
Aintrieun(hide Co. (quar.)
Extra
Arm riean Crayon Co.. 6% prof. (guar 1
When
Payable.
Boots Closed
Days Inclusive.
Aug. 10 Holders of reo. July 31
Sept. 1 Holders of rec. Aug. 15
Sept. 1 Holders of rec. Aug. 15a
Sept. 1 Holders of rec. Aug. 15
Aug. 15 Holders of rec. Aug. 5
Aug. 15 Holders of reo. Aug. 5
Sept. 1 H )1,13rs of rec. Aug. 19
Aug. 15 Hold L's of rec. Aug. 3
Oct. 16 Hold VS of rec. Sept. 29
Oct. 13 ti,olers of rec. Sept. 29
Sept. 1 Holders of rec. Aug. 21
Aug. 5 Holders of rec. July 25
Sept. I Holders of rec. Aug. 15a
Aug. 1 I Udders of rec. July 28
Aug. 1 Holders of rec. July 20
Sept. 1 Holders of rec. Aug. 21
Sept. I Holders of rec. Aug. 16
Sept. 1 Holders of rec. Aug. 5
Sept. 1 Holders of rec. Aug. 15
Sept. 1 Holders of rec. Aug. 15
Sept. 1 Holders of rec. Aug. 15
Sept. 1 Holders of rec. Aug. 21
Sept. I Holders of rec. Aug. 30
Aug. 15
Oct. 2
Sept. 1
Sept. I
Sept. 1
Holders
Holders
Holders
Holders
ilolders
of
of
of
of
of
rec. Aug. 5
reo. Sept. 15
rec. July 28
rec. July 28
rec. July 28
Sept. 15
Sept. 15
Sept. 1
Sept. I
Sept. 1
Sept. 1
Sept. I
Aug. 15
Sept. 1
-Sept. 1
Sept. 1
Holders of
Holders of
Holders of
Holders of
Holders of
Holders of
Holders of
Holders of
Holders of
Holders of
Holders of
rec. Aug. 20
rec. Aug. 20
rec. Aug. 19
rec. Aug. 10
rec. Aug. 15
rec. Aug. 15
moo. Aug. 15
rec. July 31
more Aug. 26
rec. Aug. 5
more. Aug. 21
1514c Aug. 15 Holders of rec. Aug. 5
50e Aug. 15 Holders of rue. Aug. 1
5c Sept. 1 Holders
501 Oct. 2 1101thrs
25c Oct. 2 Holders
Aug. 1 Holders
of
of
of
Of
rec. Aug. 18
rec. Sept. 12
rec. Sept. 12
roe. July 20
Financial Chronicle
Volume 137
Name of Company.
Per
When
Share. Payable.
Books Closed
Days Inclusive.
Miscellaneous (Concluded).
American Factors, Ltd., corn. (extra)--20c Aug. 10 Holders of rec. July 31
American Laundry Mach Co. (quar.)__
10e Sept. 1 Holders of rec. Aug. 22
American Steel Foundries, pref
50c Sept. 30 Holders of rec. Sept. 15
Anglo Persian Oil Co.—
Amer. dep. rec. ord. reg
23.9c Aug. 7 Holders of rec. June 30
Archer-Daniels-Midland Co. corn. (qu.)_
25c Sept. 1 Holders of rec. Aug. 21
Automatic Signal Acceptance (bi-mo.)_
60c Aug. 1 Holders of rec. Ju'y 15
Bandini Petroleum (monthly)
50 Aug. 19 Holders of rec. July 31
Bankers' National Invest. (guar.)
6c Aug. 25 Holders of rec. Aug 12
Class A & B (quar.)
24c Aug. 25 Holders of rec. Aug. 12
Preferred (quar.)
15c Aug. 25 Holders of rec. Aug. 12
Borg-Warner Corp. pref. (quar.)
$15( Oct. 1 Holders of rec. Sept. 15
Brach (E. J.) & Sons common (quar.)
10c Sept. 1 Holders of rec. Aug. 12
Brown Shoe Co., common (quar.)
75c Sept. 1 Holders of rec. Aug. 21
Cabot Mfg. Co. (quar.)
Aug. 15 Holders of rec. Aug. 3
$1
Canadian Eagle Oil Co.—
Participating preferred coup. No. 3
u23.88c Aug. 10
Chrysler Corp. corn., special (quar.)..- 50c Sept. 15 Holders of rec. Aug. 15
Coca Cola Co., common (guar.)
$14 Oct. 2 Holders of rec. Sept. 12
Columbia Pictures Corp. pref. (quar.)
75c Sept. 1 Holders of rec. Aug. 17
Comml Invest. Trust Corp. corn. (qu.)_
50c Oct. 1 Holders of rec. Sept. 5
Convertible pref., orig. series 1929(qul mal4 Oct. 1 Holders of rec. Sent. 5
Compressed Industrial Gases, Inc. (qu.)
35c Sept. 15 Holders of rec. Aug • 31
Consolidated Paper Co. (quar.)
10c Sept. 1 Holders of rec. Aug. 21
Cosmos Imperial Mills, Ltd.,7% pf.(qu.) 874c Aug. 15 Holders of rec. July 31
Crows Nest Pass Coal
Sept. I Holders of rec. Aug. 1
$2
Crum & Forster Ins. Shs. A&B (guar.)
10c Aug. 31 Holders of rec. Aug. 21
Preferred (quar.)
$15.1 Aug. 31 Holders of rec. Aug. 21
Cushman's Sons, Inc., corn. (quar.)
50c Sept. 1 Holders of rec. Aug. 15
7% preferred (quar.)
$14 Sept. 1 Holders of rec. Aug. 15
$8 preferred (guar.)
Sept. 1 Holder: of rte. Aug. 15
$2
Drug, Inc. (quar.)
75c Sept. 1 Holders of rec. Aug. 15
Fire.tone Tire & Rubber, pref. (quar.) _
$I 4 Sept. 1 Holders of rec. Aug. 15
First Chrold Corp
$2.11 Aug. 18 Holders of rec. Aug. 11
Franklin Co
Aug. 1 Holders of rec. July 25
$2
Fulton Industrial Security, pref. (quar.) 874c Aug. 1 Holders of rec. July 15
Guggenhime & Co., 7% let pref. (guar.) ln % Aug. 15 Holders of rec. July 29
Hawaiian Commercial & Sugar (we).25e Aug. 5 Holders of rec. July 25
Hires(Chas. E.) Co. class A coin.(qu.) _ _
50c Sept. 1 Holders of rec. Aug. 15
Holly Oil Co
10c Aug. 10 Holders of rec. Aug. 9
Homestake Mining Co.(monthly)
75c Aug. 25 Holders of rec. Aug. 19
Imperial Tobacco of Grt. Brit. & Ireland
% Sept. 9 Holders of rec. Aug. 16
International Elevating Co
$10 Aug. 15 Holders of rec. Aug. 8
Invest. Trust of N. Y. coll. ser. A (s.-a.)10c Aug. 31 Holders of rec. July 31
Kress (S. H.),6% pref. special (quar.)
15c Aug. 1 Holders of rec. July 20
Lanston Monotype Machine Co. (quar.)
$1 Aug. 31 Holders of rec. Aug. 21
Ludlow Mfg. Associates (quar.)
$14 Sept. 1 Holders of rec. Aug. 5
Managed Investments, Inc.(s-a)
100 Aug. 15 Holders of rec. Aug. 1
McColl Frontenac Oil Co. coin. (quar.)_
15e Sept. 15 Holders of rec. Aug. 15
Metro-Goldwyn Pictures pref. (quar.)
1 n % Sept. 15 Holders of rec. Aug. 31
Montreal Loan & Mtge.(quar.)
3% Sept. 15 Holders of rec. Aug. 24
Mt. Diabolo 011 Mining & Devel.(quar.) 5.005 Sept. 1 Holders of rec. Aug. 24
National Bond & Share Co.((war.)
25e Sept. 15 Holders of rec. Aug. 31
National Liability Ins
100 Aug. 21 Holders of rec. Aug. 1
National Sewer Pipe Co., Ltd. cl. A (qu.)
600 Sept. 15 Holders of rec. Aug. 31
New England Grain l'rod.(quar.)
25c Aug. 1 Holders of rec. July 24
New York Shares Corp., col. tr.(s-a)- - - 100 Aug. 31 Holders of rec. July 31
Parker Rust-l'roof Co., common (qu.)
75e Aug. 20 Holders of rec. Aug. 10
I'enick & Ford, Ltd., Inc. corn.(quar.)_ _
50c Sept. 15 Holders of rec. Sept. 1
Extra
500 Sept. lr Holders of rec. Sept. 1
Pillsbury Flour Mills, Inc., corn.(quar.)_
25c Sept. 1 Holders of rec. Aug. 15
Purity Bakeries Corp., common (quar.)
25c Sept. 1 Holders of rec. Aug. 15
Holland Paper Co., Ltd., pref. (quar.)- - $14 Sept. 1 Holders of rec. Aug. 15
Southern I ipe Line Co
10c Sept. 1 Holders of rec. Aug. 15
Standard Coosa-Thatcher (quar.)
124c Oct. 1 Holders of rec. Sept.20
7% preferred (quar.)
% Oct. 15 Holders of rec. Oct. 15
Standard Oil Co. of Nebraska (quar.)
250 Sept. 20 Holders of rec. Aug. 30
Standard Oil of Calif.(guar.)
25c Sept. 15 Holders of rec. Aug. 15
Texas Gulf Producing Co., common_ _ _ _ f2%% Aug. 31 Holders of rec. Aug. 11
Union Tank Car Co.(quar.)
30e Sept. 1 Holders of rec. Aug. 15
United Aircraft & Transport Corp.—
Preferred (quar.)
75c Oct. 1 Holders of rec. Sept. 8
United Biscuit Co.(guar.)
40c Sept. 1 Holders of rec. Aug. 15
United States Playing Card Co.(quar.)_
250 Oct. 2 Holders of rec. Sept. 20
Utica & Mohawk Cotton Mills
50c Aug. 15 Holders of rec. Aug. 7
Wrigley (Wm.) Jr. Co.—
Capital stock (monthly)
1 2 6 30-95c Sept. 1 Holders of rec. Aug. 19
Capital stock (monthly)
12 5 30-95c Oct. 2 Holders of rec. Sept. 20
Capital stock (monthly)
12 6 30-95c Nov. 1 Holders of rec. Oct. 20
Capital stock (monthly)
I 2 6 30-95c Dec. 1 Holders of rec. Nov. 20
Weston (Geo.), Ltd.. 7% pref. (quar.)__ 1)% Aug. 1 Holders of rec. July 20
Westvaco Chlorine Prod.(guar.)
10c Sept. 1 Holders of rec. Aug. 15
Name of Company.
999
When
Per
Share. Payable.
Books Closed
Days Inclusive.
Public Utilities (Concluded).
Central Kansas Pow., 7% pref. (quar.)_ 134% Oct. 15 Holders of rec. Sept. 30
7% preferred (guar.)
% 1-15-34 Holders of rec. Dec 31
6% preferred (quar.)
'34% Oct. 15 Holders of rec. Sept. 30
6% preferred (q'tar.)
14% 1-15-34 Holders of rec. Dec. 31
Cleveland Elec. Illuminating Co.6% preferred (guar.)
$14 Sept. 1 Holders of rec. Aug. 15
Columbia Gas & Elec. Co.,corn.(quar.)..
J20e Aug. 15 Holders of rec. July 20
5% cony. preferred (quar.)
134% Aug. 15 Holders of rec. July 20
6% preferred (quar.)
159% Aug. 15 Holders of rec. July 20
5% preferred (quar.)
In% Aug. 15 Holders of rec. July 20
Commonwealth Utilities pref. C (quar.)_
$in Sept. 1 Holders of roc Aug 15
Concord Gas, 7% pref. (guar.)
1 n % Aug. 15 Holders of rec. July 31
Connecticut L.& P. Co.,54% Pi.(qu.).. $14 Sept. 1 Holders of rec. Aug. 15
Sin Sept. 1 Holders of rec. Aug. 15
64% preferred(quar.)
Connecticut Power Co., common (qu.). 624c Sept. 1 Holders of rec. Aug. 15
Coon. fly. & Lighteg., 44% pref. (qu.)- 51.125 Aug. 15 Holders of roc. July 31
Consol. Gas Co. of N. Y., corn. (quar.)_ _
85e Sept. 15 'folders of rec. Aug. 7
Consol. Gas, Elect. & Pow. Co. of Bait.Common (quar.)
90c Oct. 2 Holders of roe. Sept. 15
5% series A preferred (quar.)
5134 Oct. 2 Holders of rec. Sept. 15
6% series D preferred (quar.)
S1 4 Oct. 2 Holders of rec. Sept. 15
% series E preferred (quar.)
$1 34 Oct. 2 Holders of rec. Sept. 15
Consumers Power Co.. $5 pref. (quar.)
5134 Oct. 2 Holders of rec. Sept. 15
$l 4 Oct. 2 Holders of rec. Sept 15
6% preferred (guar.)
6.6% preferred (guar.)
$1.65 Oct. 2 Holders of rec. Sept. 15
7% preferred (quar)
$14 Oct. 2 holders of rec. Sept. 15
6% preferred (monthly)_
50e Sept. 1 Holders of rec. Aug. 15
6% preferred (monthly)
50e Oct. 2 Holders of rec. Sept. 15
6.6% preferred (monthly)
55e Sept. 1 (folders of rec. Aug. 15
6.6% preferred (monthly)
55c Oct. 2 Holders of rec. Sept 15
Eastern Shore Pub. Ser. $64 pf. (qu.)
$134 Sept. 1 Holders of rec. Aug. 10
$6 preferred (guar.)
$14 Sept. 1 Holders of rec. Aug. 10
Elizabeth & Trenton RR.(s.-a.)
$1
Oct. 1 floiders of rec. Sept 20
6% preferred (s.-a.)
$134 Oct. 1 Holders of rec. Sept. 20
Empire & Bay State Teleg 4% gtd.(qu.) $1
Sept. 1 Holders of rec. Aug. 21
4% guaranteed (quar 1
Dm 1 !folders of rec. Nov. 20
$I
Empire G8.4 & Elec. Co.,6% pi. A (qu.). 14% Sept. 1 Holders of rec. July 31
7% preferred C (quar.)
% Sept. 1 Holders of rec. July 31
6% preferred C (quar.)
14% Sept. 1 Holders of rec. July 31
Escanaba Pow.& True.6% pref. (qu.)- _ I 34% Aug. 1 Holders of rec. July 27
6% preferred (quar)
14% Nov. 1 Holders of rec. Oct. 27
11% preferred (emu.)
134% 2- 1-'34 Holders of rec. Jan 27
European El.Corp..Ltd.,com.A & B (qu)
10c Aug. 15 flolders of rec. July 25
Fairmount Park & Hadd. Pass. Ity.(s-a.) $14 Aug. 5 Holders of rec. July 25
Federal St.& Pleasant Valley Pass. fly _ 624c Aug. 25 Holders of rec. Aug. 20
Florida Power Corp.7% pref. (quar.)___ 874c Sept. I Holders of rec. Aug. 15
l'referred, series A (quar.)
5134 Sept. 1 Holders of rec. Aug. 15
Georgia Power 87 Light $6 pref.(quar.)_ _
$14 Aug. 15 Holders of rec. July 31
Gulf States Utilities Co., 56 pf.(quar.)_
$14 Sept. 15 Holders of rec. Sept. 1
$54 preferred (quar.)
$134 Sept. 15 Holders of rec. Sept. 1
Havana Elec. & Util., 1st pref.(quar.) _
750 Aug. 15 Holders of rec. July 28
Illuminating Power Security (quar.)-- - - $134 Aug. 10 Holders of rec. July 31
7% preferred (quar.)
S134 Aug. 15 Holders of rec. July 31
Kentucky Utilities Co., 7% Jr. pf.(qu.)- 8734c Aug. 21 Holders of rec. Aug. 1
Lincoln Telep. & Teleg. 6% pref. (quar.) 134% Aug. 10 Holders of rec. July 31
5% special preferred (quar.)
14% Aug. 10 Holders of rec. July 31
Lorain Telep. Co.,6% pref.(monthly)_ _
50c Sept. 1
Los Angeles Gas & Elec.6% pf. (quar.) _ 14% Aug. 15 'folders of rec. July 31
Louisville Gas & Electric Co. (Del.)—
Class A & B common (quar.)
4334e Sept. 25 Holders of rec. Aug. 31
Luzerne County Gas & El. Corp.7% 1st preferred (quar.)
$111 Aug. 15 Holders of rec. July 31
$6 1st preferred (quar.)
.5134 Aug. 15 Holders of rec. July 31
Monmouth Cons. Water, 7% pref.(cm.)- 134% Aug. 15 Holders of rec. Aug. 1
Montreal Light, Heat & Power (quar.)
$2 Aug. 15 Holders of rec. July 31
Mutual Telep., Hawaii (monthly)
Sc Aug. 20 Holders of rec. Aug. 10
National Power & Light, corn.(quar.)__ _
25e Sept. 1 Holders of rec. Aug. 11
New York Steam Corp., common (qu.)-550 Sept. 1 Holders of rec. Aug. 15
North American Edison Co pref.(qui- $14 Sept. 1 Holders of rec. Aug. 15
Pacific Gas & Elec.,6% pref.(quar.)374c Aug. 15 Holders of rec. July 31
5 ti% preferred (quar.)
34nc Aug. 15 Holders of rec. July 31
Pacific Lighting Corp.,com.(guar.)- -75c Aug. 15 Holders of rec. July 20
Peninsular Telep. Co., 7% pref. (quar.) 134% Aug. 15 Holders of rec. Aug. 5
7% preferred (quay.)
154% Nov. 15 Holders of rec. Nov. 5
7% preferred !guar.)
% 2-15-34 Holders of rec. 2 5-34
Pennsylvania Pow. Co.,$6.60 pref.(qu.)
55c Sept. 1 Holders of rec. Aug. 21
$6 preferred (quar.)
$14 Sept. 1 Holders of rec. Aug. 21
Philadelphia Co., 5% preferred (s -rt.) - 25c. Sept. 1 Holders of rec. Aug 10
Phijadelphia Elec. Pow. Co..8% pfd (qu)
50c Oct. 1 Holders of rec. Sept. 5
Phila.Suburban Water Co., Prof.(War.) $14 Sept. 1 Holders of rec. Aug. 12a
Potomac Electric Power6% preferred (quar.)
$14 Sept. 1 Holders of rec. Aug. 12
54% preferred (quar.)
514 Sept 1 Holders of rec. Aug. 12
Service Corp. of N. J., corn.(qu.)
70c Sept 30 Holders of rec. Sept. 1
Below we give the dividends announced in previous weeks Public
8% preferred (guar.)
$2 Sept 30 Holders of rec. Sept. 1
7% preferred (guar.)
and not yet paid. This list does not include dividends an$134 Sept 30 llolders of rec. Sept. 1
$5 preferred (quar)
Sept. 30 Holders of rec. Sept. 1
$14
nounced this week, these being given in the preceding table.
6% preferred (monthly)
50c Aug. 31 Holders of rec. Aug. 1
6% preferred (nnonthlY)
50e Sept.30 Holders of rec. Sept. 1
Public Utilities Corp. (quar.)
$1
Aug. 10 Holders of rec. July 31
When
Per
Boob Closed
Quebec Power Co., corn.(quar.)
tr25c Aug. 15 Holders of rec. July 26
Name 01 Company.
Share. Payable,
Days Inc:same.
Shawinigan Vat.& Pow. Co.,com .(qu.)_ trl3c Aug. 15 Holders of rec. July 14
Shenango Valley Water Co.6% pt.(qu.) 1,
9% Sept. 1 Holders 01 rec. Aug 20
Railroads (Steam).
6% preferred (guar.)
% Dec. 1 Ilolders of rec. Nov 20
1
A tunny & susquenaima (s
544 Jan. 1 Holders of rec. Dec. 15
Sioux City Gas & Elec. Co., 7% Pt. (111.) 514 Aug. 10 Holders of rec. July 29
Atlanta & Charlotte Air Line (o-a)
$44
Sept. 1 Holders of rec. Aug. 20
South Carolina Power Co., $6 p1. (qu.)_
Oct. 1 !folders of rec. Sept. 15
514
BOBIOn & Providence (quar.)
$2.125 Oct. 1 Holders of rec. Sept. 20a South Pitts WaterCo.. 5% prof (R. a.)_
% Aug. 19 Holders of rec. Aug 10
Cleveland & Pittsburgh, guar (quar.)
874c Sept. 1 Holders of rec. Aug 10
So. Calif. Edison Co.. Ltd., corn.(qu.)_ _
Aug. 15 Holders of rec. July 20
2%
Special guaranteed (quar.)
500 Sept. 1 Holden of rec. Aug. 10
So. Calif. Gas Corp., $634 prof. (quar.)_ _ 134% Aug. 31 Holders of rec. July 31
Guaranteed (quar.)
8740 I )ec. 1 lioiders of rec. Nov. 10
Sou. Canada l'ow. Co., Ltd.,corn.(qm.)_
Aug. 15 Holders of rec. July 31
25c
Special guaranteed (guar.)
i)ee
1
holders of rec. Nov. 10
60,
Stamford 'Water Co. (quar.)
$2 Aug. 15 lIolders of rec. Aug. 5
Delaware (s.-a.)
SI Jan 134 Holders of rec. Dec. 15
Syracuse Ltg.(70., Inc.,8% pref. (quar.)
2% Aug. 15 Holders of rec. July 31
Erie & Pittsburgh 7% guaranteed ((Juan) 87%c Sept. 10 Holders of rec. Aug 31
634% preferred (quar.)
1 5,9% Aug. 15 !folders of rec. July 31
7% guaranteed (quar.)
8740 Dec. 10 Holders of rec. Nov. 30
6% preferred (qua:
14% Aug. 15 Holders of rec. July 31
Guaranteed betterment (quar.)
800 Sept. 1 Holders of rec. Aug. 31
Tampa Electric Co., corn. (quar.)
56c Aug. 15 Holders of rec. July 31
Guaranteed betterment ((mar.)
80c I /ec. 1 Holders of rec. Nov. 30
Preferred, series A (quar.)
$14 Aug. 15 Holders of rec. July 31
Hartford & Connecticut Western (s.-a.).
$1 Aug. 31 Holders of rec. Aug. 21
Telephone Invest. Corp. (mthly.)
20c Sept. 1 Holders of rec. Aug. 20
Hudson & Manhattan, 5% pref. (s-a)
$24 Aug. 15 Holders of me. Aug. la
Monthly
20c Oct. I Holders of rec. Sept.20
Louisville'lend.& St. L.5% pf. (5 a)_
% Aug. 15 Holders of rec. Aug. 1
Tennessee Elec. Pow. Co., 7.2% pf.(qu.) $1.80 Oct. 2 Holders of rec. Sept. 15
Common(8 a)
$4
Aug. 15 Holders of rec. Aug. 1
7% preferred (Irian)
$154 Oct. 2 Holders of rec. Sept. 15
Norfolk & Western, common (quar.) _
$2 Sept. 19 Holders of rec. Aug. 31
6% preferred (guar.)
$14 Oct. 2 Holders of rec. Sept. 15
AdJustinent preferred
$1 Aug. 19 Holders of rec. July 31
5% preferred (quar.)
$14 Oct. 2 Holders of rec. Sept. 15
North. RR. of New Jer. 4% gtd. (quar.) $1
Sept. 1 holders of rec. Aug. 21
7.2% preferred (monthly)
60e Sept. 1 Holders of rec. Aug. 15
45 guaranteed (quar.)
Dec. 1 (folders of rec. Nov. 20
SI
7.2% preferred (monthly)
60c Oct. 1 Holders of rec. Sept. 15
Oswego & Syracuse (s.-a.)
$24 Aug. 21 Holders of rec. Aug. 8
6% preferred (monthly)
50c Sept. 1 Holders of rec. Aug. 15
Peoria & Burean Valley, 7% era.
34% Aug. 10 Holders of rec. July 21
6% preferred (monthly)
50e Oct. 1 Holders of rec. Sept. 15
Peterborough (s. a.)
Si st Oct. 2 Holders of rec. Sept. 25
United Companies of New Jersey (qu.)_
$24 Oct. 10 Holders of rec. Sept. 20
75c Oct. 1 elders of rec. Sept 15
Pitts Bess. & Lake Erie corn. (s.-a.)
United Gas Improvement (quar.)..
30c Sept.30 Holders of rec. Aug. 31
14% Dec. 1 olders of rec. Nov. 15
6% preferred (quar.)
Preferred (quar.)
$111 Sept.30 Holders of rec. Aug. 31
Pittsburgh Fort ‘t ayne & Chicago (qu.) Us % Oct. 1 Holders of rec. Sept. 9
Utica Gas & Elec. Co., 7% pref. (quar.)$1 3
4 Aug. 15 Holders of rec. Aug. 1
7% preferred (quar.)
% Oct. 3 Holders of rec. Sept. 9
Virginia Elec.& Pow.$6 pref.(quar.) _ _ - $14 Sept.20 Holders of rec. Aug. 31
Quarterly
14% Jan.2'34 holders of rec. Dec. 9
Washington Ry. & Elec., 5% prof. (qu.) $I
Sept. 1 Holders of rec. Aug. 16
7% preferred (quar.)_
14% Jan.4'34 Holders of rec. Dee. 9
Quarterly
$1 34 Sept. 1 'folders of rec. Aug. 16
Pittsburgh Youngstown & AshtabulaWest Penn Elec., 6% pref. (quar.)
% Aug. 15 Holders of rec. July 20
7% preferred (quar.)
134% Sept. 1 Holders of rec. Aug. 21
7% preferred (quar.)
% Aug. 15 Holders of rec. July 20
7% preferred (quar.)
134% 1)00. 1 Holders of rec. Nov. 20
25c Aug. 10 Holders of rec. July 13
Reading Co., corn (guar.)
Fire Insurance Companies.
50c Sept. 14 Holders of rec. Aug. 24
1st preferred (quar.)
Boston Ins. Co. (s -a.)...
$4
Oct. 2 Holders of rec. Sept. 20
50c Oct. 12 Holders of rec. Sept. 21
2r1 preferred (guar.)
Pacific Fire Insurance Co. (guar.)
60c Aug. 7 Holders of rec. Aug. 5
$24 Oct. 10 Holders of rec. Sept 20
United N J. RR & Canal Co.(quar.)
$14 Jan 1'34 Holders of rec. Dec. 15
West Jersey & Seashore, coin. (s.-a.)
Miscellaneous.
14% Dee. 1 Holders of ree. Nov. lb
6% special guarauteed (s.-a.)
Allegheny Steel Co., pref. (quar.)
$134 Sept. 1 Holders of rec. Aug. 15
Allied Atlas Corp., liquidating
$15
Public Utilities.
Aluminum Mfg., Inc ,coin.((mar.)
50c Sept.30 Holders of rec. Srstit lb
60c Sept. 30 Holders of rec. Sept. 15
Bridgeport Gas Light Co. (quar.)
Common (guar.)
50e Dee. 31 Holders of rec. Dee. 15
$2 Sept. 1 Holders of rec. Aug. 11
Brooklyn Edison (quar.)
Preferred (quar.)
$134 Sept.3(1 Holders of rec. Sept. 15
$134 Oct. 2 Holders of rec. Sept. 1
Brooklyn Union Gas Co. (guar.)
Preferred (quar.)
Dee. 31 Holders of ree Dec 15
$1
California Water Service, 6% pref.(qu.) 14% Aug. 15 Holders of rec. July 31
American Arch (quar.)
25c Sept. 1 Holders of rec. Aug. 21
Canadian Hydro-Elec. Co., Ltd.—
American Bank Note Co., pref. (quar.)
75e Oct. 2 Holders of rec. Sept. 11
Sept. 1 Holders of rec. Aug. 1
tr$1
'.Ind preferred (quar.)
American Can Co., coin. (guar 1.
$1 Aug. 15 Holders o rec. July 25a
Central Mass. Lt.& Pr.6% pref. (qu.)
$14 Aug. 15 Holders of rec. July 31
American Capital Corp 55 34 prof
h$6
Aug. 5 Holders of rec. July 21
1000
Name of Company.
Financial Chronicle
Per
When
Cent. Payable.
Books Closed
Days Inclusive.
Miscellaneous (Continued).
American Envelope Co.7% pt.(quar.)_.. 151% Sept. 1 Holders of rec. Aug. 25
7% preferred (quar.)
1%% Dec. 1 Holders of rec. Nov.25
American Factors, Ltd. (monthly)
10c Aug. 10 Holders of rec. July 31
Am.& Gen.Secs. Corp. cl.A corn.(qu.)
7)
,ic Sept. 1 Holders of rec. Aug. 15
$3 series cum. preferred (quar.)
75e Sept. 1 Holders of rec. Aug. 15
American Hardware (quar.)
25c Oct. 1 Holders of rec. Sept. 16
Quarterly
25c 1-1-34 Holders of rec. Deo. 16
American Home Products (monthly)-25c Sept. 1 Holders of rec. Aug. 14a
American Hosiery Co.(guar.)
37M c Sept. 1 Holders of rec. Aug. 24
American Investors, $3 pref. (quar.) _ _ _
75e Aug. 15 Holders of rec. July 31
American Re-Insurance Co.(quar.)
50c Aug. 15 Holders of rec. July 31
American Stores Co.(quar.)
50c Oct. 1 Holders of rec. Sept. 15
Extra
50c Dec. 1 Holders of rec. Nov. 15
Quarterly
50c Jan 1'34 Holders of rec. Dec. 15
50c Oct. 2 Holders of rec. Sept. ba
Amer.Sugar Refining Co.,com.(quar.)_
$1 Y, Oct. 2 Holders of rec. Sept. 5a
Preferred (guar.)
American Tobacco, class A & B (quar.)_
SIX Sept. 1 holders of rec. Aug. 10
Anglo-Amer. Corp. of So. Africa,6% pf _
3% Aug. 18 Holders of rec. June 30
Anglo-Persian 011—
claYi% Aug. 7 Holders of rec. June 30
American dep. rec. ord. reg
Sc Oct. 1 Holders of rec. Sept. 15
Angostura-Wup'm'n,initial(quar.)
Artloom Corp., pref. (quar.)
h51X Sept. I Holders of rec. Aug. 15
1M% Sept. 1 Holders of rec. Aug. 15
Bamberger (L.) & Co.,6% pt.(Qu.)
60c Aug. 9 Holders of rec. Aug. 7
Bankers & Ship. Ins. Co.of N.Y.(qu.)..$1% Oct. 1 Holders of reo. Sept.28
Barber(W.H.), pref. (quar.)
1M% Aug. 15 Holders of rec. Aug. 1
Beacon Mfg.,6% pref.(quar.)
25c Aug. 15 Holders of rec. Aug.
Blauner's, Inc., corn.(guar.)
75e Aug. 15 Holders of rec. Aug. 1
Preferred (quar.)
37 M c Aug. 15 Holders of rec. Aug. 11
Bloch Bros. Tobacco (quar.)
37Mo Nov. 15 Holders of rec. Nov. 11
Quarterly
51M Sept.30 Holders of rec. Sept. 25
Preferred (guar.)
$1.M Dec. 31 Holders of rec. Dec. 25
Preferred (quar.)
Blue Ridge Corp. $3 cony. pref. series
1)75c Sept. 1 Holders of rec. Aug. 5
1929 (quar.)
25c Aug. 15 Holders of rec. July 25
Bohack (H. C.), common
$1% Aug. 15 Holders of rec. July 25
1st preferred (quar.)
$1H Aug. 15 Holders of rec. July 25
Bohack Realty Corp., 1st pref.(quar.)_ _
$1 Oct. 30 Holders of rec. Oct. 15
Bon Ami Co., common A (quar.)
50c Oct. 1 Holders of rec. Sept.24
Common B (guar.)
40c Sept. 1 Holders of rec. Aug. 15
Borden Co., corn. (quar.)
250 Jan. 12 Holders of rec. Jan. 12
Bornot. Inc., class A
25c Aug. 15 Holders of rec. July 31
Boss Mfg. Co., corn. (quay.)
$1 X Aug. 15 Holders of rec. July 31
7% preferred (quar.)
68Hc Aug. 15 Holders of rec. Aug. 1
Bourjols, Inc.. pref. (guar.)
British South Africa Co.—
zw6d Aug. 17 Holders of rec. July 7
Amer. dep. rec. (Interim.)
12M c Aug. 15 Holders of rec. July 20
Buck Hill Falls (quar.)
75c Sept. 15 Holders of rec. Aug. 25
Buckeye Pipe Line Co. (quar.)
$1
Oct. 1 Holders of rec. Sept. 15
Burger Bros.. 8% pref. (quar.)
10c Sept. 6 Holders of rec. July 31
Burroughs Adding Machine Co.(quar.)_
40c Oct. 1 Holders of rec. Sept. 15
Columba Sugar Estates, corn. (quar.)
35c Oct. 1 Holders of rec. Sept. 15
Preferred (quar.)
50c Aug. 15 Holders of rec. July 31
Canadian Converters, Ltd., corn.(quar.)
Canadian Oil Cos., Ltd.,corn.(guar.)_ _ _ 12M c Aug. 15 Holders of rec. Aug. 1
Canadian Silk Prod., class A (quar.)__.. 37Mc Aug. 31 Holders of rec. Aug. 15
51X Oct. 1
Carnation Co..7% pref.(guar.)
1-1-34
51%
7% preferred (quar.)
87A0. Jan. 31 Holders of rec. Jan. 14
Cartier. Inc.. 7% pre/
75c Aug. 15 Holders of rec. July 31
Cedar Rapids Mfg.& Pow.(quar.)
Central Aguirre Associates
15% Aug. 15 Holders of rec. Aug. 1
100. Aug. 15 Holders of rec. Aug.
Centrifugal Pipe Line Corp.cap.stk.(gu.)
10o. Nov. lb Holders of reo. Nov. 8
Capital stock (guar.)
51Y, Sept. 1 Holders of rec. Aug. 19
Century Ribbon Mills,Inc., pref.(qu.)
10c Aug. 15 Holders of rec. Aug. 1
Chain Belt Co.(quar.)
Chartered Investors, $5 pref.(guar.)- - - SI X Sept. 1 Holders of rec. Aug. 1
25c Sept. 1 Holders of rec. Aug. 19
Chicago Yellow Cab Co., Inc.(quar.)
b0c Oct. 1 Holders of rec. Sept. 20
Clorox Chemical Co.,cl. A (quar.)
50c Jan 1'34 Holders of rec. Dec. 20
Quarterly
$1 Aug. 15 Holders of rec. July 15
Compania Swift Internacional (s.-a.)_..
Confederation Life Assoc. (quar.)
$1 Sept.30 Holders of rec. Sept. 25
Quarterly
El Dec. 31 Holders of rec. Dec. 25
Congoieum-Nairn, Inc., 7% pf. (guar.) _ 1 H% Nov. 1 Holders of rec. Aug. 15
Consolidated Cigar, 7% pref. (quar.)_ _ _
Sept. 1 Holders of rec. Aug. 15
Consolidated Oil Corp., pref.(quar.)
$2
Aug. 15 Holders of rec. Aug. 1
Continental Can Co., Inc. corn. (quar.) _
50c Aug. 15 Holders of rec. July 25a
Cottrell(C. B.)& Sons Co.
% Oct. 1
8% preferred (quar.)
% 1-1-'34
6% preferred (quar.)
Courtaulds, Ltd., corn. interim
w1M% Aug. 19 Holders of rec. July 18
lc Aug. 15 Holders of rec. July 31
Cresson Consol. Gold Mining & Mfg.Co.
Sept. 1 Holders of rec. Aug. 12
Crown Zellerbach Corp., p1. A & B (qu.)_ 37
Cuneo Press, Inc.,655% Pref.(guar.)
% Sept. 15 Holders of rec. Sept. 1
18.6d. Aug. 18 Holders of rec. June 30
Daggafontein Mines. Ltd., ord
5c Sept. 1 Holders of rec. Aug. 15
Deere & Co., pref. (quar.)
Si Aug. 15 Holders of rec. Aug. 4
Delaware Division Canal (s.-a.)
25c Sept. 1 Holders of rec. Aug. 15
Diamond Match Corp., corn. (quar.)_ _ _
75c Sept. 1 Holders of rec. Aug. 15
Preferred (s.-a.)
51% Aug. 15 Holders of rec. July 31
Dime & Wing Paper Co.,7% pt.(qu.)_ _
12)4c Aug. 15 Holders of rec. July 31
Distributors Group (quar.)
Dominion Bridge Co., Ltd., corn.(quar.) tr50c Aug. 15 Holders of rec. July 31
tr50c Nov. 15 Holders of rec. Oct. 31
Common (quar.)
50c Aug. 15 Holders of rec. Aug. 1
Dow Chemical Co.(quar.)
% Aug. 15 Holders of rec. Aug. 1
Preferred (quar.)
50c Aug. 15 Holders of rec. Aug. 3
Duplan Silk Corp., (s.-a.)
50c Sept. 1 Holders of rec. July 31
Eastern Theatres, Ltd., corn. (quar.).._
Electric Shareholdings Corp., pref
9$1Y, Sept. 1 Holders of rec. Aug. 5
40c Aug. 15 Holders of rec. July 31
Employers Re-insurance Corp.(quar.)_ 60c Aug. 1' Holders of rec. Aug. 5
Ewa Plantation Co. (quar.)
50c Oct. 1 Holders of rec. Sept. 15
Faultless Rubber Co.. corn. (quar.)_ _ _ _
50c July 31 Holders of rec. June 30
Federal Service Finance Corp.(guar.) _
7% preferred (quar.)
51X July 31 Holders of rec. June 30
Fitz Simons & Connell Dredge & Dock
Co., common (quar.)
12 Mc Sept. 1 Holders of rec. Aug. 21
Florsheim Shoe Co., pref. (quar.)
Oct. 2 Holders of rec. Sept. 15
51
50c Sept. 1 Holders of rec. Aug. 15
Fre3port Texas Co. common (quar.) _ _
l'referred (quar.)
SIM Nov. 1 Holders of rec. Oct. 13
General Cigar Co.. pref.((Mar.)
51% Sept. 1 Holders of rec. Aug. 23
Preferred (guar.)
$1.3i Dec. 1 Holders of rec. Nov.24
General Foods Corp.(quar.)
45c Aug. 15 Holders of rec. Aug. 1
General Union Co. $4 pref. (quar.)
75c Sept. I Holders of rec. Aug. 10
Golden Cycle Corp. ((muar.)
40c Sept. 15 Holders of rec. Aug. 31
Goldfield Consol. Mines (initial)
5c Aug. 31 Holders of rec. Aug. 16
Gottfried Baking Co., Inc., cl. A (guar.)
75c. Oct. 1 Holders of rec. Sept. 20
Preferred (guar.)
% Oct. 2 Holders of rec. Sept. 20
1St % Jn.2 '34 Holders or rec. Dec. 20
Preferred (guar.)
Government Gold Mines Areas, Ltd., reg 60% Aug. 17 Holders of rec. Juno 30
American deposits received
60% Sept. 1 Holders of rec. June 30
3% Dec. 29 Holders of rec. Dec. 27
Grace (W. R.) dr Co 8% pref (s.-a.)-..
73c Sept. 1 Holders of rec. Aug. 10
Grand Union Co., pref. (quar.)
Great Atlantic & Pacific Tea Co.—
51M Sept. 1 Holders of rec. Aug. 4
Common (queer.)
25c Sept. 1 Holders of rec. Aug. 4
Extra
Preferred (quar.)
51X Sept. 1 Holders of rec. Aug. 4
25e Aug. 15 Holders of rec. Aug. 5
Great Lakes Dredge & Dock Co.(queer.)..
15c Sept. 1 Holders of rec. Aug. 15
Hale Brothers Stores, Inc.(queer.)
Hanna(M.A.) Co., $7 pref.(quar.)_ _ _ _
51% Sept. 20 }folders of rec. Sept. 5
$2
Oct. 20 Holders of rec. Oei. 10
Hannibal Bridge Co.. cons. (quar.)
% Oct. 1 Holders of rec. Sept. 21
Elarbauer Co., 7% pref. (queer.)
% 1-1-'34 Holders of rec. Dec. 21
7% preferred (quar.)
Hardesty (R.), 7% pref. (quar.)
% Sept. 1 Holders of rec. Aug. 15
7% preferred (guar.)
% Dec. 1 Holders of reo. Nov. 15
Harmony Mills of Cohoes,N.Y.,pf.(lig.) 525
Aug. 15 Holders of rec. Aug. 10
750 Aug. 15 Holders of rec. Aug. 1
Hartford Times, Inc., pref. (quar.)
Helena Rubinstein, Inc., pref.(quar.)_
25c Sept. 1 Holders of rec. Aug. 15
Hercules Powder Co., pref. (quar.)....$15.4 Aug 15 Holders of rec. Aug. 4
Hershey Chocolate Corp., corn. (queer.)..
75e Aug. 15 Holders of rec. July 25
Convertible preference (queer.)
$I Aug. 15 Holders of rec. July 25
Hibbard, Spencer, Bartlett & Co.(mo.)
100 Aug. 25 Holders of rec. Aug. 18
.9 Monthly
10c Sept.29 Holders of rec. Sept.22
Hollinger Consol. Gold Mines
trl% Aug. 12 Holders of rec. July 28
Honolulu Plantation (monthly)
25c Aug. 10 Holders of rec. July 31
Name of Company.
Aug. 5 1933
When
Per
Cent. Payable.
Nilscellaneout (Concluded).
Horn & Harden (N. Y.) pref. (quar.)-- 51,I1
Horne](Geo. A.)& Co.,(quar.)
25e
6% preferred A (guar.)
$134
Imperial Tobacco Co. of Great Britain &
Ireland, Ltd., common, interim
w6 34%
Ingersoll-Rand Co., common (queer.)
3734c
Internat. Business Mach. Corp. (queer.) 5114
Internat. Harvester Co.. pref.(quar.)_ _ _
51%
International Shoe, pref. (monthly) _ _ _ _ 50e
Preferred (monthly)
50c
Preferred (monthly)
50c
Preferred (monthly)
50c
International Tea Stores—
Amer. dep. rec. ord. reg
rte18%
Interstate Hosiery Mills Co
40c
Intertype Corp. 1st pref. (s.-a.)
$2
_
Jones & Laughlin Steel Corp.7% Prof......
25e
Kaufmann Dept.Stores, corn
20c
h53M
Preferred
Kendall Co., pref., series A (queer.)
$134
Klein(D.Emil)(quar.)
250
Kroger Grocery & Baking (quar.)
25c
1st preferred (quar.)
$155
2d preferred (quar.)
5134
La Salle & Koch Co.7% pref. (queer.)....
%
Landers Frary & Clark (quar.)
3734o
Quarterly
3734c
Lehn & Fink Products Co., corn. (queer.)
50c
Leslie-California Salt Co., corn. (quar.)_
35c
Liggett & Myers Tobacco Co.—
Common and common B (guar.)
$1
Lincoln National Life Ins. Co.cap.stock
700.
Link-Belt Co.,common
10c
6M% preferred (quar.)
%
Loblaw Groceterias, cl. A & B (quar.)
tr20c
Lock Joint Pipe Co.(monthly)
33e
Monthly
33c
Monthly
34e
8% preferred (guar.)
$2
Loew's, Inc., 56M preferred (queer.)...
51%
Loose Wiles Biscuit Co., pref. (guar.).El%
Lord & Taylor, 1st pref. (queer.)
5134
Lunkenheimer Co.. pref.(quar.)
51%
Lynch Corp., common (queer.)
25e
MacMillan Co. (guar.)
25c
$6 preferred (quar.)
5134
Macy (R. II.) & Co., common (guar.).—
50c
Magnin (I.) & Co., 6% pref. (guar.)
134%
6% preferred (guar.)
1)4%
Matson Navigation (quar.)
S134
May Dept. Store Co. (quar.)
25c
McClatchy Newspaper, 7% pref.(guar.) 43fic
433jc
prefrred (queer.)
McIntyre Porcupine Mines, Ltd.(qu.)_ _
u25c
u1214c
Bonus
u12Mc
Extra
u
Mercantile Stores, 7% pref. (quar.)
Sc
TkIerland Oil Co. of Canada
75c
Moody's Investors Service, pref. (qu.)
Elti
Moore (Wm.) Dry Goods Co.(Guar.) Et
Quarterly
%
Morris Sc. & 100. to El Sta., 7% pf. (qu.)
%
7% preferred (queer.)
$1
Morris Plan Ins. Soc. (quar.)
$1
Quarterly
NIuskogee Co.,6% pref.(quar.)
5134
50c
Nashua Gummed & Coated Paper
50c
Quarterly
7% preferred (quar.)
5134
7% preferred (queer.)
51X
%
National Biscuit Co. preferred (quar.)-50c
National Container Corp., pref. (quar.)
(n)
National Distillers Products Corp., corn_
National Founders Corp., pref. (queer.).... 87;60
National Lead Co., common (quar.)_ _ _ _
5134
$134
Class A preferred (quar.)
Class B preferred (queer.)
5134
National Linen Service, $7 pref. (s -a.).... 5334
4M
New Era Consolidated, Ltd., ord
50c
New Jersey Zinc, coin.(guar.)
5134
Newberry (J. J.) Co.,7% pref.(quar.)
Niagara Share Corp. of Md.—
Class A $6 preferred (queer.)
$134
Class A $6 preferred (quar.)
$134
bOo.
Nineteen Hundred Corp.,class A (queer.)
50o.
Class A (queer.)
75c
Northam Warren Corp., pref. (quar.)
75c
Preferred (quar.)
Norwalk Tire & Rubber Co., pref. (qu.) 87Mc
$1
Norwich Pharmacal Co.(quar.)
15c
Oahu By. & Land (monthly)
Sc
Oahu Sugar (monthly)
20c
Onomea Sugar (monthly)
50c
Owens-Illinois Glass (quar.)
25c
Extra
75c
Pacific Southern Investment, Inc., prof
Ponder (David) Grocery, class A (queer.) 8734c
750
Penman's, Ltd., (quar.)
Procter & Gamble Co., common (quar.).. 37lic
75c
Pullman, Inc. (guar.)
$144
Quaker Oats, preferred (guar.)
250
Republic Supply Co., corn. (quar.)
25c
Reynolds Metals Co. (quar.)
30e
Rich's, Inc., corn. (queer.)
$1 54
Preferred (queer.)
051.075
Royal Dutch Co., ord. shares
250
Ruud Mfg. new conanon (queer.)
Savannah Sugar Refg. Corp.. corn. (qu.) $134
1)4%
Preferred (queer.)
30e
Scotten Dillon Co.(guar.)
Second Investment Corp. (R. I.)—
75e
Preferred (queer.)
$2
Sheaffer(W. A.) Pen. pref. (guar.)
25c
Sherwin-Williams Co
$134
Preferred, series AA (queer.)
37Mo.
Sioux City Stkyds.. $el pf. (guar.)
3734c.
$8 preferred (guar.)
51 Y,
Smith (A.0.) Corp., prof.(quar.)
Solvay Amer.Invest., pref.(quar.)
31%
Southern Acid & Sulphur Co.. Inc.,
50c.
Common (quar.)
Southern Pacific Golden Gate Co.—
3734c
Class A & B (queer.)
$IM
6% preferred (queer.)
60e
Standard Cap & Seal (quar.)
Stanley Works,6% pref. (quar.)
3734c
Strawbridge & Clothier, pref. ser. A(qu.) $IM
25e
Sun 011 Co., cons. (quar.)
25e
Common (quar.)
134%
Preferred (quar.)
1M%
Preferred (quar.)
Swift Internacional
$1
25c
Texas Gulf Sulphur Co.(guar.)
90c
Thatcher Mfg. Co., pref. (queer.)
Tide Water 011 Co.,5% prof.(quar.)- - - $134
150
Timken Roller Bearing Co.(guar.)
25c
Trunz Pork Stores, Inc. (queer.)
25c
United Engineering & Foundry (quar.)_
7% preferred (queer.)
5134
United Milk Crate Corp., cl A.(queer.)..
500
Class A (quar.)
500
Books Closed
Days Inclusive.
Sept. 1 Holders of rec. Aug. 11
Aug. 15 Holders of rec. July 29
Aug. 15 Holders of rec. July 29
Sept. 1 Holders of rec. Aug. 7
Oct. 10 Holders of rec. Sept.22
Sept. 1 Holders of rec. Aug. 5
Sept. 1 Holders of rec. Aug. 15
Oct. 1 Holders of rec. Sept. 15
Nov. 1 Holders of rec. Oct. 15
Dec. 1 Holders of rec. Nov. 15
Aug. 7 Holders of rec. July 7
Aug. 15 Holders of rec. Aug. 1
Oct. 1 Holders of rec. Sept. 15
Oct. 2 Holders of rec. Sept. 13
Aug. 15 Holders of rec. Aug. 10
Aug. 15 Holders of rec. Aug. 10
Sept. 1 Holders of rec. Aug. 10a
Oct. 1 Holders of rec. Sept. 20
Sept. 1 Holders of rec. Aug. 10
Sept.30 Holders of rec. Sept.20
Nov. 1 Holders of rec. Oct. 20
Aug. 15 Holders of rec. Aug. 14
Sept. 30
Dec. 31
Sept. 1 Holders of rec. Aug. 15
Sept. 15 Holders of rec. Sept. 1
Sept. 1 Holders of rec. Aug. 15
Nov. 1 Holders of rec. Oct. 28
Sept. 1 Holders of rec. Aug. 15
Oct. 1 Holders of rec. Sept. 15
Sept. 1 Holders of rec. Aug. 12
July 31 Holders of rec. July 31
Aug. 31 Holders of rec. Aug. 31
Sept.30 Holders of rec. Sept.30
Oct. 2 Holders of rec. Oct. 2
Aug. 15 Holders of rec. July 31
Oct. 1 Holders of rec. Sept. 180
Sept. 1 Holders of reel Aug. 17
Oct 2 Holders of rec. Sept.22
Aug. 15 Holders of rec. Aug. 5
Aug. 15 Holders of rec. Aug. 15
Aug. 8 Holders of rec. Aug. 8
Aug. 15 Holders of rec. July 21
Aug. 15 Holders of rec. Aug. 5
Nov. 15 Holders of rec. Nov. 5
Aug. 15 Holders of rec. Aug. 10
Sept. 1 Holders of rec. Aug. 15
Sept. 1 Holders of rec. Sept. 1
Dec. 1 Holders of rec. Dec. 1
Sept. 1 Holders of rec. Aug. 1
Sept. 1 Holders of rec. Aug. 1
Sept. 1 Holders of rec. Aug. 1
Aug. 15 Holders of rec. July 31
Sept. 15 Holders of rec. Aug. 15
Aug. 15 Holders of rec. Aug. 1
Oct. 1
1-1-'34
Oct. 1
1-2-34
Sept. 1 Holders of rec. Aug. 25
Dec. 1 Holders of rec. Nov.24
Sept. 1 Holders of rec. Aug. 16
Aug. 15 Holders of rec. Aug. 8
Dec. 15 Holders of rec. Nov. 8
Oct. 2 Holders of rec. Sept.25
Jan. 2 Holders of rec. Dec. 21
Aug. 31 Holders of rec. Aug. 15
Sept. 1 Holders of rec. Aug. 15
Oct. 16 Holders of rec. Oct. 2
Aug. 5 Holders of rec. July 25
Sept. 30 Holders of rec. Sept. 15
Sept. 15 Holders of rec. Sept. 1
Nov. 1 Holders of rec. Oct. 20
Sept. 1 Holders of rec. Aug. 20
Aug. 18 Holders of rec. Juno 30
Aug. 10 Holders of rec. July 20
Sept. 1 Holders of rec. Aug. 16
Oct. 1 Holders of rec. Sept. 15
Jan2'34 Holders of rec. Dec. 15
Aug. 15 Holders of roe. Aug.
1
Nov. 15 Holders of rec. Nov. 1
Sept. 1 Holders of rec. Aug. 1
Dec. 1 Holders of rec. Nov. 1
Oct. 1 Holders of rec. Sept. 22
Oct. 1 Holders of rec. Sept. 20
Aug. 15 Holders of rec. Aug. 11
Aug. 15 Holders of rec. Aug. 6
Aug. 20 Ilolders of rec. Aug. 10
Aug. 15 Holders of rec. July 29
Aug. 15 Holders of rec. July 29
Aug. 5
Sept. 1 Holders of rec. Aug, 19
Aug. 15 Holders of rec. Aug. 5
Aug. 15 Holders of rec. July 25
Aug. 15 Holders of rec. July 24
Aug. 31 Holders of rec. Aug. 1
Oct. 5 Holders of rec. Oct. 2
Sept. 1 Holders of rec. Aug. 15a
Aug. 15 Holders of rec. Aug. 1
Sept. 30 'folders of rec. Sept. 15
Aug. 14 Holders of rec. July 31
Sept. 15 Holders of rec. Sep. 5
Nov. 1 Holders of rec. Oct. 14
Nov. 1 Holders of roe. Oct. 14
Aug. 13 Holders of rec. Aug. 4
Sept. 1 Holders of
Oct. 20 Holders of
Aug. 15 Holders of
Sept. 1 Iloiders of
Aug. 15 Holders of
Nov. 15 Holders of
Aug. 15 Holders of
Aug. 15 Holders of
rec. Aug. 15
reel. Seta. 30
rec. July 31
rec. Aug. 15
rec. Ang• 15
rec. Nov. 15
rec. Aug. 1
rec. July 15
Sept. 15 Holders of rec. Sept. 10
Aug. 15 Holders of rec. July 31
Aug. 15 holders of rec. July 31
Aug. 15 Holders of rec. Aug. 1
Aug. 15 Holders of rec. July 31
Sept. 1 Holders of rec. Aug. 16
Sept. 15 Holders of rec. Aug. 25
Dec. 15 Holders of rec. Nov. 25
Sept. 1 Holders of rec. Aug. 10
Dec. 1 Holders of rec. Nov. 10
Aug. 15 Holders of rec. July 15a
Sept. 15 Holders of rec. Sept. 1
Aug. 15 IIolders of rec. July 31
Aug. 15 Holders of rec. Aug. 3
Sept. 5 Holders of rec. Aug. 18
Aug. 10 holders of rec. Aug. 3
Aug. 11 Holders of rec. Aug. 1
Aug. 11 holders of rec. Aug.
Sept. 1 Holders of rec. Aug. 15
Dec. 1 Holders of rec. Nov. 15
Volume 137
Financial Chronicle
Per
Cent.
Name of Company.
Miscellaneous (Concluded).
Union Oil of Calif.(quar.)
U.S. Pipe & Foundry Co.. corn.(quar.).
Common (quar.)
1st preferred (quar.)
let preferred (quar.)
United States Steel Corp., prof
Vick Financial Corp., corn. (s.-a.)
Vulcan DetinnIng Co., pref.(quar.)
Weill (Raphael) & Co., 8% pref. (s.-a.).
Wesson Oil & Snowdrift Co., Inc.—
Preferred (quar.)
West Virginia Pulp & Paper Co.,pf.(qu.)
Westmoreland, Inc. (quar.)
Winstead Hasler)
,Co.(quar.)
Wisconsin Holding, A (quar.)
Series A (quar.)
Wiser Oil(guar.)
Quarterly
Wolverine Tube,7% pref.(s.-a.)
7% preferred (quar.)
Woolworth (F. W.) Co. (quar.)
Worcester Salt Co.. 6% pref. (quar.)- - _
Wyatt Metal & Boiler Works (quar.)
When
Payable.
Books Closed
Days Inclusive.
25c
12340.
12340.
30o.
30c.
500
71;,e
%
$4
Aug. 10 Holders of rec. July 20
Oct. 20 Holders of rec. Sept. 30
1-20-34 Holders of rec. Dec. 30
Oct. 20 Holders of rec. Sept. 30
1-20-34 Holders of rec. Dec. 50
Aug. 30 Holders of rec. Aug. 1
Aug. 15 Holders of rec. Aug. 1
Oct. 20 Holders of rec. Oct. 6a
Sept. 1 Holders of rec. Aug. 1
$1
$13.4
30e
$13.4
h17%c
17lie
25e
25o
$335
Sl
60c
13.4%
$1%
Sept. 1 Holders of rec. Aug. 15
Aug. 15 Holders of rec. Aug. 1
Oct. 1 Holders of rec. Sept. 151
Nov. 1 Holders of rec. Oct. 15
Sept. 15 Holders of rec. Sept. 1
Sept. 15 Holders of rec. Sept. 1
Oct. 2 Holders of rec. Sept. 12
Jan2'34 Holders of rec. Dec. 12
Sept. 1 Holders of rec. Aug. 15
Dec. 1 Holders of rec. Nov. 15
Sept. 1 Holders of rec. Aug. 10
Aug. 15 Holders of rec. Aug. 8
Oct. 1
t The New York Stock Exchange has ruled that stock will nos be quoted exdividend on this date and not until further notice.
I The New York Curb Exchange Association has ruled that stock will not be
quoted ex dividend on this date and not until further notice.
a Transfer books not closed for teas dividend.
a Correction. •Payable in stock,
I Payable In common stock. g Payable I n scrip. A On account of accumulated
dividends. 1 Payahle In preferred stock.
1 Under section 213 of the NIRA, Wrigley (Wm.),jr. Co., is required to withhold
at source an excise tax equal to 5% of the above dividends, and stockholders, other
than domestic corporations, will therefore receive on each of the above dividend
dates 25% per share net.
m Commercial Invest Tr. pays div. on convertible preference stock, optional
series of 1929, at the rate 01 1-52 of 1 share of common stock, or, at the option of the
holder, in cash at the rate of $1.50.
n Nat. Distillers Prod, dividend in warehouse receipts of one case of whiskey
containing 24 pint bottles for each five shares of common stock held. Whiskey
withdrawn only as authorized by law and upon payment of Government taxes,
together with $4 per case for bottling and casing and 15 cents per case per month
from Oct. 1 1932 to cover storage, guarding, insurance, certain State and local taxes
and other minor costs. (Approximate charges to accrue to delivery of warehouse
receipts will be $5.95 per case.)
o Royal Dutch Co. dividend of $1.075 declared on New York shares. Unless
prior to July 31 1933 a ruling is received that dividend is not subject to tax imposed
under Section 213(a) of National Industrial Recovery Act, $1.02125 will be paid:
should ruling be subsequently received that dividend is not subject to tax, a later
distribution will be made to stockholders of record July 31 1933 of the amount so
deducted.
p Blue Ridge Corp. declared a dly. at the rate of 1-32d of one share of the common
stock of the corporation for each share of such preference stock, or, at the option of
such holders (providing written notice thereof is received by the corporation on or
before Aug. 15 1933) at the rate of 75c. per share In cash.
q Electric Shareholding pays div. of 11-250th of a share of common stock, or at
the option of the holder $136 cash.
r In the case of non-residents of Canada a deduction of a tax of 5% of the
amount of such dividend will be made.
American Cities Power & Light Corp., optional div. of 1-32 of 1 shares of
class B stock or at holders option, 75 cents cash.
Payable In Canadian funds.
U Payable in United States funds.
S A unit.
IV Leas deduction for expenses 01 depositary.
o Less tax.
V A deduction has been made for expenses.
1001
STATEMENT-OFT MEMBERS'OF, THE NEW YORK CLEARING HOUSE
ASSOCIATION FOR THE WEEK ENDED SATURDAY, JULY 29 1933.
Clearing House
Members.
'Surplus and Net Demand
Undivided
Deposits,
Profits.
Average.
"Capital.
Bank of N. Y. ct. Tr. Co_
Bank of Manhattan Co_ _
National City Bank_ _ _ _
Chemical Bk.& Tr. Co_
Guaranty Trust Co
Manufacturers Trust Co.
Cent. Han. Ilk. & Tr. Co
Corn Exch. 13k. Tr. Co..
First National Bank _ _
Irving Trust Co
$
6,000,000
20.000.000
124,000.000
20,000,000
90,000,000
32,935.000
21,000.000
15,000,000
10,000,000
50,000,000
Continental Bk.(1,.. Tr. Co
Chase National Bank...
Fifth Avenue Bank
Bankers Trust Co
Title Guar.& Tr. Co_ _ _ _
Marine Midland Tr. Co_
Lawyers Trust Co
New York Trust Co_ _ _ _
Com'l Nat.Bk.& Tr.Co_
Public Nat.Bk.& Tr.Co.
4,000,000
148,000,000
500,000
25.000,000
10,000,000
10,000,000
3,000,000
12,500,000
7,000,000
8,250.000
Totals
017 151
$
9,413,500
31,931,700
55,695,500
46,856.300
177.266,300
20.297,500
61.112,500
17,535,800
73,105,000
62,863,100
min
Time
Deposits.
Average.
$
81,029.000
243,325.000
2813,279,000
235,701.000
1)856,162,000
211,643.000
477,469,000
174,898,000
318,550,000
307,989,000
$
8,959.000
33,650,000
163.860,000
27.326.000
63,856,000
97,107.000
53.542.000
20,556,000
30.633,000
53.563,000
4,546,600
27,539.000
58,704,600 c1,148,523,000
3,105,400
42,598.000
62,519,500 d471,435,000
10,521,100
27,301,000
5,272,800
43.266.000
1,804,800
9,731,000
21,694,500
188,605.000
42,922,000
7,732,200
4,518,800
39,287,000
1.791.000
100,566.000
2,578,000
72,191.000
298.000
4,155,000
797,000
17,457.000
2,287,000
29,564,000
730 407
non
5 701 252 00A
754.730.001
* As per official reports: National June 30 1933 State, June 30 1933; Trust
companies, June 30 1933.
Includes deposits in foreign branches as follows: (a) $204,753,000;(b) $64,219,000
(c) $73,661,000; (d) $30,418,000.
The New York "Times" publishes regularly each week
returns of a number of banks and trust companies which are
not members of the New York Clearing House. The Public
National Bank & Trust Co. and Manufacturers Trust Co.,
having been admitted to membership in the New York
Clearing House Association on Dec. 11 1930, now report
weekly to the Association and the returns of these two banks
are therefore no longer shown below. The following are
the figures for the week ended July 28:
INSTITUTIONS NOTIN THE CLEARING HOUSE WITH THE CLOSING
OF BUSINESS FOR THE WEEK ENDED FRIDAY, JULY 28 1933.
NATIONAL AND STATE BANKS—AVERAGE FIGURES.
Loans,
Disc. and
Investments.
Manhattan—
Grace National
Trade
Brooklyn—
Peoples National
Res. Dep., Dep. Other
N. F. and Banks and
Elsewhere. Trust Cos.
Cash.
18,119,800
2,665,143
109,600
78,807
1,399,600
522,148
5,316,000
82,000
328,000
Gross
Deposits.
$
1,890,800 17,370,600
327.831
2,866,931
50,000
4,900,000
TRUST COMPANIES—AVERAGE FIGURES.
Weekly Return of New York City Clearing House.—
Beginning with Mareh 31 1928, the New York City Clearing
House Association discontinued giving out all statements
previously issued and now make only the barest kind of
a report. The new returns show nothing but the deposits,
along with the capital and surplus. The Public National
Bank & Trust Co. and Manufacturers Trust Co. are now
members of the New York Clearing House Association,
having been admitted on Dec. 11 1930. See "Financial
Chronicle" of Dec. 31 1930, pages 3812-13. We give the
statement below in full:
Loans,
Disc. and
Investments.
Manhattan—
County
Empire
Federation
Fiduciary
Fulton
United States
Brooklyn—
Brooklyn
T:Incro C'ntintv
Cash.
Res. Dep., Dep. Other
N. F. and Banks and
Elsewhere. Trust Cos.
s
Gross
Deposits.
$
$
$
$
18,681,100 *2,752,800 1,199,200
56,912,100 *3,201,000 13,625,400
431,973
59,624
6,073,823
243,008
*442,418
8,268,530
300.000
19,006.300 *2,239,700
71,068,333 7,598,900 16,511,974
19,137,800
2,194,300 65,375,400
492,007 5,521,932
479,219 7,875,894
204,500 17,032,800
67,494,458
2,567.000 15,508,000
1.476.331 5.482,663
150,000 92,233,000
24,098,057
90,438,000
23 737.177
* Includes amount with Federal Reserve as follows: County, $2,425,100; Empire,
$2,140,100; Fiduciary, $223,645; Fulton, $2,093,500.
Condition of the Federal Reserve Bank of New York.
The following shows the condition of the Federal Reserve Bank of New York at the el_ose of business Aug. 2 1933, in
comparison with the previous week and the corresponding date last year:
Aug. 2 1933. July 26 1933. Aug. 3 1932.
Aug. 2 1933. July 26 1933. Aug. 3 1932.
Resources—
Gold with Federal Reserve Agent
Gold redemption fund with U. S. Treas'y_
601,706,000
7,843,000
606,706,000
8,242,000
Gold held exclusively agst. F.R. notes_
609,549,000
614,948,000
154,232,000
134,956,000
151,916,000
134,713,000
Resources (Concluded)—
451,217,000 Due from foreign banks (see note)
13,568,000 F. R. notes of other banks
Uncollected items
464,785,000 Bank premises
All other resources
62,487,000
Total resources
216,898,000
898,737,000
901,577,000
744,170,000
74,533.000
83,370,000
973,320,000
984,947,000
3,067,000
3,253,000
15,612,000
32,259,000
16,542,000
32,637,000
Total bills discounted
47,871,000
49,179,000
Bills bought In open market
U. S. Government securities:
Bonds
Treasury notes
Certificates and bills
2,532,000
3,704,000
15,452,000
180,972,000
274,950,000
309,944,000
179,779,000
268,093.000
307,994,000
190,050,000
123,679,000
394,563,000
765,866,000
755,866.000
708,292,000
Gold settlement fund with F. It. Board
Gold and gold certificates held by bank
Total gold reserves
Other cash.
Total gold reserves and other cash
Redemption fund—F. It. bank notes
Bills discounted:
Secured by U. a. Govt. obligations_ _ _ _
Other bills discounted
Total U. S. Government securities.Other securities (see note)_
Total bills and securities (see note)
Liabilities—
72,343,000 F. R. notes in actual circulation
F. R. bank notes in actual circulation_ _ _ _
816,513,000 Deposits—Member bank—reserve acc't__
Government
Foreign bank (see note)
Special deposits—Member bank
59,161,000
Non-member bank
39,474,000
Other deposits
98,635,000
1,267,000
1,283,000
4.369,000
817.536,000
810,032,000
826,748,000
Total deposits
Deferred availability items
Capital paid in
Surplus
All other liabilities
Total liabilities
Ratio of total gold reserves & other cash*
to deposit and F. It. note liabilities
combined
Contingent liability on bills purchased
for foreign correspondents
1,472,000
6,907,000
98,415,000
12,818,000
25,195,000
1,668,000
5,084,000
95,810,000
12,818,000
27,220,000
1,184,000
3,803,000
88,535,000
14,817,000
27,903,000
1,938,730,000 1,940,832,000 1,779,503,000
637,585,000
52,247,000
955,088,000
11,452,000
7,111,000
5,807,000
970,000
24,005,000
603,681,000
987,883,000 1,004,433,000
94,501,000
99,204,000
58,532,000
58,132,000
85,058,000
85,058,000
8,476,000
12,193,000
946,437,000
81,951,000
59.175,000
"30177,000
.3,182,000
642,856.000
52,999,000
927,815,000
22,412,000
7,792,000
6,042.000
939,000
22,888,000
1,938,730,000 1,940,832,0
892,056,000
25,080,000
3,528,000
25,773,000
1,7'19,503,000
59.7%
60.0%
52.7%
12,401,000
12,131,000
19,394,000
•"Other cash" does not include ,
1 it. notes or a bank's own 1, It. bank notes.
NOTE.—BeginnIng with the statement of Oct. 17 1025, two nevi items were added in order to thaw separately the amount of balances held abroad and amounts
due to foreign oorr gnxmdeuts. In addition, time caption "All other earnings assets," previously made up of Federal Intermediate Credit Sault debentures, was chan„..,c1
Potal tells and seouritioi." Poe latter term 4..4 a100ied as 4 more accurate description of the total
to "Other decurif s," and ..ne reunion, eotai earnings i4iors'•
toe orovisLius of iactIon 13 au.] 11 or the Fedelai ita4erye tot, wawa it Wtli dtag.341 are tne ouiy items included
Of the discount sa eptanooti and aeourittes 4o4,1ire.1
t heren
Aug. 5 1933
Financial Chronicle
1002
Weekly Return of the Federal Reserve Board.
the condition
The following is the return issued by the Federal Reserve Board Thursday afternoon, Aug. 3. and showing
the System
for
results
the
preset'',
we
table
first
In
the
on
Wednesday.
business
of
close
the
at
of the twelve Reserve banks
last year. The
as a whole in comparison with the figures for the seven preceding weeks and with those of the corresponding week
Federal Reserve note statesecond table shows the resources and liabilities separately for each of the twelve banks. Thebetween
the Reserve Agents
ment (third table following) gives details regarding transactions in Federal Reserve notes
amount of these
and the Federal Reserve banks. The fourth table (Federal Reserve Bank Note Statement) shows the
outstanding
bank notes issued and the amount held by the Federal Reserve banks along with the collateral pledged against
Events
bank notes. The Reserve Board's comment upon the returns for the latest week appears in our department of "Current
and Discussions."
AUG. 2 1933.
AT THE CLOSE OF BUSINESS
COMBINED RESOURCES AND LIABILITIES OF THE FEDERAL RESERVE BANKS
211933. June 14 1933. Aug. 3 1932.
Aug. 2 1933.1July 26 1933. July 19 1933. July 12 1933. Jufy 5 1933. June 28 1933. June
$
$
s
$
$
$
$
s
$
2,756,903,000 2,816,469,000 1,987,282,000
2.747,239,00012,736,432,000 2,772,412,000 2,785,711,000 2,767.366,000 2,809.201.000
62,986,000
42,906,000
44,260,000
44,068,000
44,317,000
43,273,000
39,457.000
43,643,000
38,560,0001
2,801.153.000 2,859.375,000 2,030,268,000
2,853.269.000
2,811,683,000
2,829,354,000
2,815,685.000
5,889.000
2,785,849,00&2,77
notes
Gold held exclusively agst. F. R.
534,924,000 427,674.000 243,805,000
532.723.000 531,160,000 515,142,000 508,904,000 527,701,000 485,550.000
Gold settlement fund with P R. 13oard
207,584,000 209,703,000 204,946,000 197,131,000 245,741,000 347,780,000
Gold and gold certificates held by banks_ 240,938.000 241.610.000 215.052,000
3.533.208,000 3,532,790,000 2,643,853.000
3,559,510,000 3,548,659,000 3,545,879.000 3,545,842.000 3,549,092,000 3.543,765,000
Total gold reserves
a
a
a
a
a
a
a
a
Reserves other than gold
287,060,000 293,254,000 272,219,000
290,507,000
255,459,000
278,001,000
271,919,000
269,111,000
251,784,000
Other cash•
3.820.268,000 3,826,044,000 2,916,072,000
3,811,294,000 3,817.770.000 3.817.823.000 3,823,903,000 3,804,551,000 3,834.272.000
Total gold reserves and other cash
a
a
a
a
a
a
a
Non-reserve cash
7,392.000
7,242.000
7,392,000
8,014,000
137,693,000
8,014,000
7,791,000
7,640,030
-_notes
bank
Redemption fund-F. It.
Bills discounted:
55,553,000 182.088,000
47,477,000
45,144,000
43,335,000
39,450.000
35,786,000
37,053,000
39,834.000
Secured by U. S. Govt. obligations__
174,579,000 198,209,000 3,15,095,000
123,703,000 124,310,000 127,343,000 128,416.000 138,468,000 145,837.000
Other bills discounted
222,056,000 253,762.000 487,183,000
163,542,000 161.363,000 163,129,000 167,806,000 181.80:3,000 190,981,000
Total bills discounted.
8.827,000
40,693,000
10.200,000
8,186,800
23,044,000
9,848,000
13,194,000
9,616,000
8,213.000
Bills bought In open market
441.030,000 441,188,000 420.934.000
441,463,000 441,037.000 440,813.000 440.776,000 440,779,000 440,436.000 693,482,000 683,509,000 323,078,000
U.S. Government securities-Bonds._
730,678,000 718,197.000 706,383,000 697,484,000 697,514,000 705.047,000
Treasury notes
Special Treasury certificates
1,102,123,000
865,787,000 868.290.000 870,061,000 868,973.000 856,965.000 829.329.000 820,162.000 807.747,000
Other certificates and bills
1,954,674,000
1,846,135,000
1,932,444,000
1,975,212,000
2,027,574,000
1,995,258,000
2,037,923,0013
2,017,257,000 2,007,23:3.000
Total U. S. Government securities
2,923,000
6,028,000
3.624,000
2,848,000
2,297,000
2,157,000
2,026,000
1,862.000
1,846,000
Other securities
Foreign loans on gold
2,211,529,000 2,200,415,000 2,192,260,000 2,190,450.000 2,202,442,000 2,177.227.000 2.188,480,000 2,200.030,000 2,380,039,000
Total bills and securities
Gold held abroad
3,835,000
2,891,000
3,832,000
3,729.000
3,729,000
3,967,000
4,025.000
3,958.000
4,029,000
banks
from
foreign
Due
21,471,000
13,248,000
18.848,000
16,411,000
15,416.000
17,610,000
19,095,000
17,821,000
17,014.000
Federal Reserve notes of other banks__ _
379,017,000
328,222,000
340,469,000
407,388.000
357,321,000
374,170,000 364,593,000 419,284,000 410,386,000
Uncollected items
54.312.000
58,119,000
54,312,000
54,312.000
54,366,000
54,370.000
54,367,000
54,369,000
54,417,000
Bank premises
50.951,000
47,811,000
52.60:3,000
50.193,000
51,163,000
52,399.000 651,435,000
50,951,00C
50,183,000
All other resources
RE.SOURCE.S.
Gold with Federal Reserve agents
Gold redemption fund with U. S. Tress
Total resources
6,531,033,000 6.518.973,000 14,5L5,931000 6.559,043,000 6,497,002,000 6.484,005.000 6.525,726,000 6,570,299,000 5,746,402,000
LIABILITIES.
3,090.286,000
3,001,605,000 63003,685,000 3,037,508,000 3,067,062.000 3,115,331,000 3.061,324,000 117,774,000 3.118,379,000 2,857,805,000
F. R. notes In actual circulation
113,264.000
126,632,000 6123,011,000 118,137.000 115,853,000 124.012,000 120.031,000
F. R. bank notes in actual circulation
2,218,912,000 '2,286,207,000 2,205,302,000 2,281,378,000 2,012,134,000
2,319,239,000
2,306,366,000
sect_
2,268.728,000
2,289.811.000
-reserve
banks
Deposits-Member
55,972,000
46.422,000
129.527.000
55,029,000
67,965,000
83,821,000
57.995,000
81,786,000
56,229,000
Government
10,088.000
10,807,000
20,286.000
8,410,000
15.984,000
19,833,000
15,041.000
16,207,000
18,664,000
Foreign banks
78,696.000
76,358.000
83,449.000
77,196,000
85,920,000
81,438.000
81.743,000
81,053,000
Special deposits: Member bank
19,314,000
18,789,000
18.334.000
19,635,000
20,641,000
22,681,000
22,997,000
22,130,000
Non-member bank__
43,833,000
36,422,000
53,114,000
43,010.000
51,082,000
69,225,000
63,645,000
49,487.000
66,603,000
Other deposits _
2,115,335,000
2,481,003,000
2.486.760.000
2,563,918,000 2,573,709,000 2,541.839,000 2,521,817,000 2,450,724,000 2.509.783.000
Total deposits
323,232,000
381,537,000 368.299.000 418,402,000 403,886,000 357,504.000 339,652.000 377.793,000 399,701,000 133,700,000
Deferred availability items
146,256,000 146.248.000 146,180.000 146,360,000 146,796,000 146.744.000 0147.665.000 147,563,000 239,421,000
Capital paid In
278,599,000 273,599,000 278.599.000 278.599,000 278,599,000
278.599,000
278.599.000
278,599,000
Surplus
36,909,000
27,822.000 026.849,000
31,790,000
24,036.000
25.422.000 625,266,000
25,406,000
29,536,000
All other liabilities
6,497,002,000 6.484.005.0006.525.726.000 6.570,299,000 5,746,402,000
6,559,043,000
06,565.931000
6.518,973,000
6,531,083,000
Total liabilities
I
Ratio of gold reserve to deposits and
63.3%
53.1%
63.0%
63.6%
63.5%
63.7%
63.4%
63.5%
63.9%
F. It. note liabilities co oined
Ratio of total reserve to deposits and
F. R. note liabilities C..mi blued
Ratio of total geld reserve. AL other cash to
68.5%
68.8%
68.3%
58.6%
68.4%
63.4%
638.5%
68.4%
68.4%
&posit & F.11 note liabilities combined
Contingent liability on bills purchased
36,948.000
36.060,000
35,031,0001 59,496,000
36,140.000
36,021,000
35,694.000
35,761,000
37,123,000
for foreign corre-pondenta
___
•
--r..____ _____
$
$
S
$
$
$
$
S
$
Ifafurtni I) trtoution of Bills and
Short-Ter,n Securities146,300,000 167,914,000 342,342,000
136,381,000
127,542.000
121,061,000 116,058,000 118.342.000 122,581,000
33,661,000
1-15 days bills discounted
14.036.000
16,677.000
17,844,000
12,614.000
13,149,000
11.906.000
13.027.000
13,839,000
51,988,000
18-30 daye Mils discounted
35.905.000
14,555,000
46.819,000
14,870,000
13.147.000
15.127.000
15.598.000
14,671,000
42,152,000
31-60 days bills discounted
20,653.000
18.468,000
15.639.000
23,274,000
15,775,000
15,323,000
14,100.000
11,782,000
17,040.000
41-90 days bills discounted
5,102.000
4,900,000
5,546,000
3,503,000
3.214.000
2,533.000
2,478.000
2,189,000
Over 90 days bills discounted
181.803,000 190,981.000 222,056,000 253,762,000 487,183,000
161,363,000
163,129.000
167,866,000
163,542.000
9,910.000
Total bills discounted
1,370,000
4.336,000
4.708.000
15.769.000
2,295.000
6,578,000
3,476,000
1,250,000
7,769,010
1-15 days bills bought in open market
894,000
1,552,000
1,:314,000
1.731,000
1,100.000
1,880,000
2,23:3,000
688,000
10,632,000
18-30 days bills bought In open market
2.697.000
1,431,000
1,333,000
1,942,000
411.000
3,053.000
3,020,000
488,000
12,382,000
81-60 days blils bought in open market
2,166.000
2,567,000
2,845,000
3,642.000
5,809,000
1,119,000
1,683,000
5,786,000
81-90 days bills bought In open market
1,000
1,000
Over 90 days bills bought In open market
40,693,000
8,186,000
8.827.000
10,200,000
23,084,000
13,194,000
9.616.000
9,848.000
8,213.000
Total bills bought In open market
68,600,000
41,613.000
35,113,000 131,975,000
34,325.000
40.825.000
34.500.000
15.200.000
113,644,000
1-15 days U. S. certificates and tuns__ _
40,738,000 14-3,412,000
34.325.000
46.025.000
43,100,000
15,205,000
46,700.000 116,997.000 113.644.000
290,411,000
10-30 days U. S. certificates and bills_ _ _
108,495,000
138.844,000
53,227,0(10
290,556,000 270,575,000 167,445,000 150,446,000
218,588,000
31-60 days U. S. certificates and bilis_ _ _ 275,001,000
84,883,00(1 103,313,000 293,689,000 277.326,000 234,562,000 269,576,000 159,796,000
73,413,000
81-90 days U. S. certificates and bills__ _
348,634,000 342.304,000 422,011,000 384,082,000
359.029,000 360.654.000 348,029.000 351,809,000 351,768,000
Over 90 days certificates and bills
Total U. S. certificates and bills
1-15 days municipal warrants
18-30 days municipal warrants
81-60 days municipal warrants
81-90 days municipal warrants
Over 90 days municipal warrants
865,787,000
1,705,000
44,000
23,000
863.290.000
1.732.000
870.061,000
1,897,000
38,000
23,000
69,000
38,000
22,000
69,000
868.973.000
2,037,000
10,000
38,000
22,000
60,000
856,965,000
2,177,000
10,000
38,000
22,000
50,000
829,329,000
2,727,000
10,000
38,000
73,000
820,162,000
2,803,000
10,000
38,000
72,000
807,747,000 1,102,123.000
5,637,000
3,501,000
236,000
25,000
33,000
10,000
38,000
120,000
50,000
69.000
6,028,000
2,848,000
2,923,000
3,624,000
2,297,000
2,026,000
1,862,000
2,157,000
1,846,000
Total municipal warrants
==
3,080,974,000
Federal Reserve Notes3,280,674.000 3,312,994.000 3.348,580,0003.361,556.000 3,327.308,000 3,362,087.000 3,340,077,000
Issued to F. R. Bank by F. R. Agent.... 3,270,681,000
265.984,000 271,801,000 261,698,000 223,169,000
266,076,000 276.622.000 275.486,000 281,518,000 246,225,000
Held by Federal Reserve Bank
3.090.286,000 3,118,379,000 2,857,805,000
3,004,605,000 3.004.052,000 3,037,508,000 3,067,062,000 3,115,331,000 3,061.324.000
In actual circulation
Collateral field by Agent as Security
for Notes Issued to BankBy gold and gold certlfimtes
Gold fund-Federal Reserve Board
By eligible paper
0 S. Government securities
1,523,266,000 1.528.968,000 1,478.034.000 999,167,000
1,515,854,000 1,514,497,000 1.513,977,000 1,519,776,000 1.518.931,000 1.285,935,000
1,227,935,000 1,338.435.000 988,115,000
1,231,435,000 1.221,935,000 1,258,435,000 1,265,935,000 1,248,435.000 115,779,000 126.141.000
150,570,000 471,796,000
97.295,000 105,105,000 119,420,000
98.276,000
100,440,000
441.200,000 504,200,000 467,900,000 635.430,000
477,200.000 489,200,000 485.200.000 499,200,000 505,700,000
3.434.939.000 1.094.521.1.0nn
a 324 969.000 3.323.903.000 3.354.007.000 3.390 016 non fl flW 43a000 3.366.180.000 3.387.244.000
p.....,
in "other cash." b Revised.
included
Now
ti
e
own
Bank
a
notes
or
F.deral
bank
Reserve
notes
Reserve
•"Other cash' does not include Federal
AT CLOSK OP BUSINESS AUG. 2 1933
LIABILITIES OF EACH OF THE I) PEOER ‘I RESERVE BANKS
WEEKLY STATEMENT OF RESOURCES AND
IfInneap. fCan.Ctsy. Daiwa. 3an"as
Two Ciphers (00) omitted.
Louis.
Si.
Chicago.
Boston. New York. Phila. Cleveland. Richmond Atlanta.
Total.
Federal Reserve Bank ofS
$
$
$
$
$
3
$
$
RESuURCES.
601,703,0 180,000,0 237,770,0 124,835,0 94,550.0 776,432,0 119,474,0 68,296,0 106,290,0 24,014,0 183,263,0
Gold with Fed. Res. Agents-- - 2,747,239,0 230,609.0
1,521,0 1,128,0 7.118,0
1,869,0
1,340,0
3,785,0
1,264,0 2,614,0
7,843,0 3,824,0 4,714,0
1.540,0
38,560,0
Gold redm.fund with U.S.Treas.
183,824,0 242,434,0 128,099,0 97,164,0 780,267,0 120,814,0 70,165,0 107,811,0 25,142,0 190,331,0
Gold held excl. asst. F.R.notep 2,785,849,0 232,149,0 609,549,0 12,919,0 50,241,0 18,040,0 10,664,0 141,433,0 27,540,0 20,784.0 29,05:3,0 20,391,0 25,317,0
154,232,0
21,550.0
532,723,0
F.R.Bd
fund
with
settlein't
Gold
474,0 12,531,0 5,204,0 30,575,0
694,0
7,143,0
14,762,0 3,971,0 4,840,0 3,630,0
Gold & gold Ws. held by banks_ 240,938,0 22,158,0 134,953,0
50,737,0 246,773,0
.
3,559,510,0
reserves
gold
'Niel
1003
Financial Chronicle
Volume 137
Weekly Return of the Federal Reserve Board (Concluded).
RESOURCES (Concluded)Other eash•
New York.
Boston.
Total.
Two Ciphers (00) omitted.
251,784,0 16,828,0
Total gold reservesArot her cash 3,811,294,0 292,685,0
844,0
7,640,0
Redem fund-F.It. bank notes_
Bills discounted:
1,699,0
See. by U.S. Govt.obligations -39,834,0
123,708,0 5,362,0
Other bills discounted
163,542,0
8,213,0
Total bills discounted
Bills bought in open market_ __ _
O. S. Government securities:
Bonds
Treasury notes.
Special Treasury certificates_ _
Certificates and bills
7,061,0
502,0
Phtla.
Sc. Louts. Ifinneap Kan.etfy. Dallas. San Fran.
Chicago.
Cleveland. Richmond Atlanta.
$
74,583,0 27,792,0 24,449,0 13,648,0 12,136,0
9,864,0
31,769,0
4,717,0 10,995,0
,347,0
7,656,0 171
960,667,0 158,912,0 96,140,0 160,390,0 58,393,0 264,120,0
249,0
48,0
296,0
98,0
100,0
1,798,0
973,320,0 239,297,0 321,145,0 162,627,0 123,598,0
169,0
581,0
390,0
3,067,0
8,590,0
6,715,0
3,420,0 2,106,0
7,515,0 11,651,0
320,0
8,367,0
982,0
9,742,0
528,0
2,065,0
108,0
4,157,0
290,0
4,586,0
990,0
3,754,0
47,871,0 32,724,0 10,935,0 13,757,0
266,0
675,0
722,0
2,532,0
8,687,0
239,0
10,724,0
894,0
2,593,0
198,0
4,265,0
134,0
4,876,0
198,0
4,744,0 15,305,0
297,0 1,556,0
15,612,0 5,189,0
32,259,0 27,535,0
67,895,0 14,277,0 16,685,0 12,593,0 17,163,0 25,292,0
100,338,0 28,860,0 19,222,0 24,556,0 14,999,0 52,987,0
441,463,0 21,860,0
730,678,0 44,316,0
180,972,0 29,421,0 34,041,0 10,861,0 10,403,0
274,950,0 54,612,0 71,314,0 22,752,0 21,772,0
865,787,0 49,898,0
309,944,0 61,491,0 80,297,0 25,620,0 24,513,0
155,712,0 32,495,0 21,621,0 27,647,0 16,888,0 59,661,0
Total U.S. Govt.securities_ 2,037,928,0 116,074,0
1,846,0
Other securities __
B1118 discounted for, or with
(-),other F. R. banks
765,866,0 145,524,0 185,652,0 59,233,0 56,688,0
510,0
1,267,0
323,945,0 75,632,0 57,528,0 64,796,0 49,050,0 137,940,0
19,0
50,0
2,211,529,0 123,637,0
Total bills and securities
4,029,0
307,0
Due from foreign banks
17,821,0
400,0
Fed. Res. notes of ether banks.
374,170,0 42,511,0
Uncollected Items
54,417,0 3,280,0
Bank premises
50,183,0
757,0
All other resources
817,536,0 179,480,0 197,262,0 73,256,0 65,614,0
399,0
442,0
1,472,0
875,0
1,538,0
811,0
460,0
6,907,0
98,415,0 28,989,0 37,590,0 31,922,0 10,476,0
12,818,0 3,495,0 6,929,0 3,238,0 2,412,0
25,195,0 3,661,0 2,582,0 3,832,0 4,655,0
335,613,0 78,423,0 61,946,0 69,870,0 54,091,0 154,801,0
282,0
117,0
117,0
19,0
28,0
548,0
293,0 1,201,0
962,0
392,0
1,005,0
2,977,0
49,800,0 14,133,0 9,643,0 21,152,0 12,431,0 17,108,0
1,747,0 3,559,0 1,792,0 4,244,0
7,608,0 3,285,0
1,439,0 2,825,0 1,464,0 1,163,0
669,0
1,941,0
256,555,0 171,424,0 258,923,0 128,877,0 443,168,0
6,531,083,0 464,421,0 1,938,730,0 456,214,0 567,299,0 276,570,0 207,950,0 1,360,952,0
Total resources
LIABILITIES.
V. R. notes In actual circulation. 3,004,605,0 223,175,0
F. It bank notes In act'l circa]] 126,632,0 12,142,0
Deposits:
Member bank-reserve account 2,319,239,0 143,317,0
Government
56,229,0 3,191,0
1,192,0
18,664,0
Foreign bank
Special-Member bank
81,053,0 3,194,0
Non-member bank
22,130,0
66,603,0 4,085,0
Other deposits
Total deposits
Deferred availability items
Capital paid In
Surplus
Ali other liabilities
2,563,918,0 154,979,0
381,537,0 42,378,0
146,256,0 10,728,0
278,599,0 20,460,0
29,536,0
559,0
642,856,0 235,896,0 300,722,0 136,451,0 115,981,0
2,169,0
52,999,0 7,684,0 9,204,0
759,741,0 136,953,0 90,790,0 111,552,0 33,526,0 216,962,0
987,0 4,114,0 4,204,0
1,353,0
458,0
31,318,0
927,815,0 121,631,0 154,639,0 71,109,0 53,354,0
834,0
22,412,0 3,467,0 6,566,0 3,494,0
571,0
637,0
1,616,0
1,714,0
7,793,0
6,042,0 9,250,0 6,380,0 4,901,0 3,431,0
209,0
151,0 3,022,0
1,906,0
939,0
130,0 6,024,0 7,494,0 3,571,0
22,887,0
406,440,0 71,834,0 52,377,0 104,564,0 60,419,0 151,740,0
1,572,0 2,547,0 3,034,0 1,892,0 3,659,0
3,561,0
473,0 1,143,0
473,0
375,0
555,0
2,122,0
299,0 5,681,0
33,473,0 4,114,0 1,583,0 2,705,0
821,0
167,0
776,0
7,041,0 7,098,0
957,0 8,719,0
171,0
1,239,0
8,267,0 3,059,0
175,376,0 90,657,0 61,970,0
38,739,0 31,914,0 9,502,0
12,386,0 4,991,0 4,928,0
28,294,0 11,616,0 10,544,0
941,0 2,856,0
2,578,0
460,904,0 88,232,0 58,897,0 111,114,0 64,040,0 171,763,0
52,741,0 15,600,0 9,302,0 21,913,0 13,384,0 18,205,0
13,239,0 4,016,0 2,869,0 4,311,0 3,741,0 10,701,0
39,497,0 10,186,0 7,019,0 8,263,0 8,719,0 19,701,0
1,632,0
1,353,0
783,0
1,104,0 1,194,0
3,512,0
987,888,0 138,098,0
99,204,0 28,649,0
58,532,0 15,814,0
85,058,0 29,242,0
831,0
12,193,0
171,424,0 258,923,0 128,877,0 443,168,0
6,531,083,0 464,421,0 1,938,730,0 456,214,0 567,299,0 276,570,0 207,950,0 1,360,952,0 256,555,0
Total liabilities
Memoranda.
Ratio of total gold reserves and
other cash° to deposit At F. It.
note liabilities combined
Contingent liability on bills purchased for for'n correspondents
68.4
77.4
59.7
64.0
67.5
71.6
69.5
78.7
70.6
64.2
72.0
59.8
67.9
37,123,0
2,710,0
12,401,0
3,898,0
3,675,0
1,448,0
1,299,0
4,826,0
1,262,0
854,0
1,076,0
1,076,0
2,598.0
•"Other cash" does not include Federal Reserve notes or a Bank's own Federal Reserve bank notes.
FEDERAL RESERVE NOTE STATEMENT.
Federal Reserve Agent al-
Boston, New York.
$
$
Total.
Two Ciphers (001 omitted.
$
Federal Reserve notes:
Issued to F.R.Bk. by F.R.Agt. 3,270,681,0 243,366,0
Held by Fed'I Reserve Bank_ 266,076,0 20,191,0
In actual circulation
3,004,605,0 223,175,0
Uollateral held by Agent as security for note.Issued to bks:
Gold and gold certificates
1,515,854,0 72,092,0
Gold fund-F. R. Board
1,231,435,0 158,517,0
Eligible paper
100,480,0 6,896,0
U. S. Government securities
477,200,0 10,000,0
Tntal nnlintar al
't 1,
,A
nr.n n
9A7
cot n
Chicago.
Cleveland. Richmond Atlanta.
Phila.
$
$
$
$
Sr. Louts. Minneap. Nan-City. Dallas. San Fran.
$
$
$
$
$
$
726,062,0 251,975,0 317,048,0 144,985,0 138,578,0
83,206,0 16,079,0 16,326,0 8,534,0 22,597,0
789,686,0 147,409,0 93,499,0 120,224,0 35,752,0 262,097,0
29,945,0 10,456,0 2,709,0 8,672,0 2,226,0 45,135,0
642,856,0 235,896,0 300,722,0 136,451,0 115,981,0
759,741,0 136,953,0 90,790,0 111,552,0 33,526,0 216,962,0
97,450,0 107,270,0 49,330,0 21,550,0
82,550,0 130,500,0 75,505,0 73,000,0
14,388,01 9,208,0 7,435,0 5,275,0
60,000,0 75,000,0 15,000,0 42,000,0
438,482,0 42,774,0 30,296,0 21,490,0 19,014,0 92,500,0
338,000,0 76,700,0 38,000,0 84,800,0 5,000,0 90,763,0
1,663,0 2,463,0 3,058,0 4,383,0 12,800,0
4,173,0
20,000,0 27,000,0 23,200,0 15,000,0 8,000,0 72,000,0
147.270.0 141,825.0
800.655.0 148,137,0 93,959,0 124,343,0 36,397,0 268,063.0
523,606,0
78,100,0
28,738,0
110,000,0
741) 444.1) 254_388.0321_978_0
FEDERAL RESERVE BANK NOTE STATEMENT.
Federal Reserve Agent atTwo Ciphers (00)(mimed.
Federal Reserve bank notes:
Issued to F. R. Bk. (outstdg.)
Held by Fedi Reserve Bank_
In actual circulation
Collat.pledged agst.outst. notes:
Discounted At purchased bills_
U.S. Government securities
Total collateral
Boston. New
York.
Cleveland Richmond Atlanta,
Phila.
Chicago.
Si. Louis Aftnneap. Kan.City. Dallas. San Fran.
$
4,249,0
45,0
147,098,0 14,124,0
1,982,0
20,466,0
63,841,0
10,842,0
7,798,0 11,440,0
114,0 2,236,0
2,189,0
20,0
33,338,0
2,020,0
560,0
102,0
1,378,0
25,0
995,0
8,0
7,186,0
3,072,0
126,632,0 12,142,0
4,114,0 44,204,0
52,099,0
7,684,0
9,204,0
2,169,0
31,318,0
458,0
1,353,0
987,0
2,512,0
171,274,0 20,000,0
64,274,0
1,622,0
8,000,0 15,000,0
282,0
3,000,0
40,000,0
329,0
5,000,0
2,000,0
1,000,0
279,0
8,000,0
5,000,0
173,786,0 20,000,0
64,274,0
8,000,0 16,622,0
3,282,0
40,000,0
5,329,0
2,000,0
1,000,0
8,279,0
5,000,0
Weekly Return for the Member Banks of the Federal Reserve System.
Following is the weekly statement issued by the Federal Reserve Board, giving the principal items of the resources
and liabilities of the reporting member banks from which weekly returns are obtained. These figures are always a week
behind those for the Reserve banks themselves. Definitions of the different items in the statement were given in the statement of Dec. 14 1917, published in the "Chronicle" of Dec. 29 1917, page 2523. The comment of the Reserve Board upon
the figures for the latest week appears in our department of "Current Events and Discussions," immediately preceding which
we also give the figures of New York and Chicago reporting member banks for a week later.
include
Beginnin
@FedFRASER