Full text of Commercial and Financial Chronicle : August 7, 1947, Vol. 166, No. 4618

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ESTABLISHED 1S39

I AUG 8

1347

"

Reg. U. S. Pat. Office

Volume

166

Number 4618

New

York, N. Y., Thursday, August 7, 1947

Price 30 Cents

Copy

a

Achievements of

Neither a New Bull
The Economics of Dollar
Shortage
the GOP Congress Market Nor an Old One
By JAMES D. MOONEY

By

HON.

U.

S.

ROBERT A.

Senator from

President and Chairman of the
Board,

TAFT*

By FRANCIS W. LA FARGE

Ohio

Senate leader lauds work of

Market Analyst,
Clark, Dodge &

Analyst holds factors which

Charges lack of co¬
operation on part of President.
Holds present tax burden cannot
be long maintained. Holds budget
was reduced
$3 billions and esti¬

indicate

Jan.

'

tors

f

a

will be

quickly relieve this soshortage. Advocates along with loans and gifts to
foreign
countries, we furnish leadership and technique that will
restore
order and production
by best known methods with facilities
ayailable.
Urges restoration of convertible currencies and estab¬
lishing of a free gold market in New York.
called

downward, with

Cites industry's high break¬
as

c-3>——

threatening factors.

—

In

a

letter, July 26, the Editor of the "Commercial and
Financial

Chronicle," commenting

upon

my

article

3>of

have

strengthened

had grown up,
in
Wash¬

.

movement

low ground.

Certain

During

years.

new

between

countries and convertible currencies could

Basically the situation
confronting the stock market is little dif¬
ferent from that
prevailing at the time of the highs of last February.

1947, there met in
the first Republican

that period there

important market

point and international political troubles

even

3,

Washington
Congress in sixteen

next

possible decline into

surplus at $7 bil¬
lions. Upholds Taft-Hartley Act.

caused

recent market rise have
largely
force, and that technical, economic and political factors

spent their

mates current

On

Holding dollar shortage is largely an illusion, Mr.
Mooney points
out integrity,
organization, administration and technical skills ap¬
plied to production, together with freer multilateral trade

Co.

new

Congress.

EDITORIAL'

Shortage"
published

since that time

his

As

but other fac-

We See It

d i

s

guished

1 n

t i

azine

said,

"I

balance it ap¬

that

pears

bility. Every¬
thing done by
any
Republi¬

prospect for

can

tors

smeared

unless it

hap-

:f pened. to
cord

N

some

,/fr. W. La Fargo
v

;

policy.
From the time the
Republicans
gathered, the 80th Congress was
subject to the same type of cal¬
culated and bitter attack
by the
New Dealers, and by the allies
they had gradually accumulated
in the field of propaganda.
They

♦Address by Senator Taft at a
dinner of the Republican State
Central Committee,

Columbus, O.,

July 31, 1947.

g o
the

possibilities on
the

-

downside

great as they then were.
Before discussing the present

position in- detail
to

analyze

the

the

recent

whether

it

is

forces

recovery

they

necessary

are

back

of

discover

to

lasting

tem¬

or

porary factors. These factors group
themselves under the headings of
be

can

considered

in

on page

Outing

of

the

similar questions

persons

Association appear

Leland Electric

22 and

more

scarcely

of other related

than

once

"Plan"—if that is what it is

"warnings" from Europe, particularly from
London, about the diminishing supply of dollars.
Until quite
recently, one of the most telling argu¬
ments in support of all such
ideas as are now

commonly

supposed to be embodied expressly or
by implication
in the proposals of the
Secretary of State has been the
iterated and reiterated assertion that
the

extraordinary
leaving this country was being sup¬
ported by American charity and American
loans; that
these supports for our
export business were being
volume of exports

and

rapidly eaten

21,

away;

free

James D.

ex-

Mooney

in

world

trade

out so well in
I want to add to his

paper."

your

frank comments that I find busi¬

who know the facts and
understand the causes and conse¬

nessmen

of

quences

conditions

the

present chaotic
international ex¬

in

change and trade, are reluctant to
what they know to be the

state

and remedies for the
pres¬
ent international trade difficulties
for fear they might be misunder¬
causes

stood,
.

critized,

that

or

(Continued

on

page

they

28)

and the inevitable result in the

(Continued

23.

that

thoughtful change con—.
vertibility plays
during the past few which is brought

day has passed without references

a

in influential
quarters to this

that

pages

thinking

important part

The|e ) a$d

—and without

Traders

on

the "Mar¬

must have, occurred to all

in this land

weeks when

unique
34)

Detroit

Securities

sound

among
as

bankers

out of consideration ?:

or

PICTURES taken at Annual

Michigan

to

Is there
really such a thing—at least a thing have many
over¬
developed conceptually as to warrant the
major part of looked, in dis¬
what is now
being said in its name?
If all, or the
larger cussing the
part of what is being said is valid as
foreign trade
respects Europe, by
what process of
logic. can pother parts of the world be left situation, t h e

and somewhat

(Continued

often referred

now so

3,
find

even

so

technical, economic, and political
and

thing

shall Plan"?

as

order...
A curious

page 24)

:

.1

are

ew

Deal

six
a

that

i.

■

ac¬

with

than

was

What is this

a

some-

fc* * months

der^Mt

and

is

poorer

it

Strange "Marshall Plan" Notions

that the

continued ad¬

c ,i --

aied,

have

vance

to be

was

depre

on

-

July

weakened. On

invinci¬

(Continued

n

mag¬

perfection and

Robert A. Taft

Riddle

Dollar

Deal

New

,

"The Economic

on

the

somewhat

ington
parti¬
cularly, the
legend
of

-

Willys-Overland Motors, Inc.

on

34)

page

State and
Aerovox Corp.

Havana Litho. Co.

STATE

R. H. Johnson & Co.
Established

and

Municipal

MUNICIPAL

Bonds

1927

BONDS
INVESTMENT SECURITIES

Hirsch & Co.
.

Members Neio York Stock Exchange
and other Exchanges

Street, New York

BOSTON

25 Broad St., New York 4, N.Y.
HAnover 2-0600
'

64 Wall

'

Chicago

Teletype NY 1-210

Cleveland

Geneva

London

-

(Representative)

Troy

PHILADELPHIA

Albany

Baltimore

Buffalo
Dallas

Pittsburgh

THE NATIONAL CITY BANK

HART SMITH & CO.

OF NEW YORK
52

Wilkes-Barre

Williamsport Springfield Woonsocket

New

Bond Dept. Teletype: NY 1-708

Department

THE CHASE

Members

Syracuse

Harrisburg

Scranton

Bond

5

.

York Security Dealers Assn.

WILLIAM
Bell

ST., N.

Y.

HAnover 2-0980

Teletype NY

New York

1-395

Montreal

Toronto

NATIONAL BANK
THE

OF

CITY OF

NEW YORK

SERVING SOUTHERN CALIFORNIA
SINCE

Air

1927

Products, Inc. Com. & "A"

Detroit Harvester Co Com.

Bond

Emery Air Freight Corp.
Underwriters and
Distributors of Municipal

Investment Securities
626

S.

SPRING

ANGELES

Georgia Hardwood Lumber Co.
Common

Corporate Securities

Raytheon Manufacturing Co.
1

14

OTIS & CO.
CiAREMONT

•

PASADENA

(Incorporated)
•

REDIANDS

Established

1899

'

Member ios angeies stock exchange

J

.

TELETYPE: LA 68




/

CLEVELAND
New York
Chicago
Denver
Cincinnati Columbus Toledo Buffalo
.

$2.40 Conv.

*Prospectus

120

request

York Stock

Exchange

Broadway, New York 5, N. Y.
Telephone: REctor 2-8600
Bell

Analysis

and Dealers

upon

request

Preferred
on

Reynolds & Co.
Members New

PLAIN PREFERREDS

for Banks, Brokers

and

ST.

TRInlfy 5761
LOS

*

England

Public Service Co.

Service

Common

New

Brokerage

Teletype: NY 1-635

Hardy & Co.
Members

Nero

York

Stock

Members

New

York

Curb

30 Broad St.
Tel. DIgby 4-7800

Exchange
Exchange

New York 4
Tele. NY 1 -733

irahaupt&co.
Members

New

and other

111
REctor

York Stock Exchange
Principal Exchanges

Broadway,
2-3100

Boston

N. Y.

6

Teletype NY 1-2708

Telephone:

Enterprise 1820

THE

(518)

2

COMMERCIAL & FINANCIAL CHRONICLE

Implications of the Marshall Plan

Arden Farms Co. '

Dr.

Metal & Thermit
37

Memo

So

New York Hanseatic

by

Teletype NY 1-583

7-5660

cial

But

supply, we

trate

and

Savoy Plaza

tive.

The

e n c e.

Plan

(1 )

Savoy Plaza

Europe being an integral
unit,
fresh
dollars

total
con¬

nations

with

are a

a n

ically constitute a bloc in opposi¬
to the
excluded, with the

crisis.

Dr.

Warfare between

a

•

World-wide economic distress and

ent

Teletype NY 1-1548

solve

themselves

pean

customers

new

"bankruptcy"

ability

Pennsylvania Salt

to

undertake

(3) The strain

debt-

more

is such

Request

back

U. S. economy

mains
China

that, to quote Under-Sec¬
(May

world demand exceeds

countries

"joverseas"

her

for

and

and.

special action

of

question-begging?)

course;

will

call

indicated by

as

the Wedemeyer

Euro¬

suppliers
Japan re¬

too,

ability

our

.

worry,

Korea,

"Since

8):

their

if

the job.

on

special

a

of
most
would re¬

troubles

payment

foreign financing

on

retary Acheson
on

of'

were

of the continued

Bought——Sold——Quoted
Prospectus

reduces

The balance

off political danger.

servicing;

3y2% Conv. Pfd.

in

HAnover 2-0700

the

New Orleans,

effect

Exchange

NY 1-1557

La.-Birmingham, Ala.

Direct wires to

substitute peace treaty for the

in

other forms
somewhat
face

of

zones

reduction

of

Germany

our

branch offices

trade
of

barriers

co-operation

wishful thought

the

"fact-finding" (or

and

Henry Hudson Hotel Com.

a

—

Howe Scale Com. & Pfd.

in the

International

charter to outlaw

Sweet Steel

and

Trade

Organization's failure to agree
a

National Dyeing &

on

Printing

Intl. Education Publ. Pfd.

trade-shackles,

of the deadlock in the customs

or

of

center

the

approach is needed.
(2) New emergency aid should
be provided preferably as
gifts or
lend-lease, since Europe's appar¬

a

7-4070

Telephone COrtlandt
Bell System

amounts

union plan in the Low

them;

is

Europe

j (5)

economic

virtual

of

consequence

Melchior Palyi

renewed, nay,

York 5

co-op¬

tion

unprece¬

Therefore,

Members New York Curb Exchange

to

refuse

which

Those consenting automat¬

erate.

the

dented

Vanderhoef & Robinson

a

Thus,

East).

Plan

Stock

York

St., New York 4, N. Y.

(7) Intra-European self-suffi¬
ciency should be fostered by a

world

Fulton Trust Co.

to

Far

the

New

25 Broad

Austria;'

failure,
fronting

100 Shares

in

western

priorities,

poli¬

cies

BID WANTED

is

Marshall

not
"piecemeal"
as
heretofore, in accordance with the
urgency of the needs and our abil¬
ity to supply them, excluding the

nancial

31 Nassau Street, New

assistance in

should be allocated on the basis of

Our

postwar inter¬
national fi¬

Class "A"

Steiner, Rouse & Go

(6) Within Europe, Germany is
the focus of the crisis (as Japan

economic

that:

3/6s, 1956

concen¬

.

.

(4)

implies

have to

.

where it will be most effec¬

areas

d

.

.

emergency

our

collateral evi-

,

significant implications have become discernible

some

Members

to

announce-

ments

1

Bought—Sold—Quoted

of offi¬

way

<

a

between them and the creditor.

York 5

♦

general suggestion only, with its content to be spelled out
in the discussions and compromises among the would-be debtors as well as

far, the Marshall Plan is

in due course,

Corporation
BArclay

Louisiana Securities

an indication our postwar planning
in international reconstruction is a failure.
weakening of Soviet influence in Europe by Plan and holds reconstruction of Ruhr must have prec¬
edence over any European aid or financing.
Says cost of- Plan greatly underestimated, and concludes
"dollar diet" alone cannot remedy European economic situation.

request

120 Broadway, New

substitute jpe^ce treaty for Western Zones of Germany

a

Sees

years

on

Palyi contends Marshall Plan amounts to

and Austria and is

dividend record

of

Alabama &

By MELCHIOR PALYI

Preferred, Common & Rights

Unbroken

Thursday, August 7,1947

(8)
the

Countries;

The,problem is

dollar-anemia,

equilibrium

in

to

relieve

the

or

the

dis¬

11

international

brought

about

external

circumstances,

fault

no

rate

by. historical

of their own,

by

of

reason

120

and

r

through

not at

their

own

Baltimore Stock Exchange

Members

balances of the distressed nations,

Broadway, N. Y. 5
WOrth

Bell

2-4230

Teletype NY 1-1227

;

any

in¬

ternal

policies. Accordingly, the
"sovereignty" of the
debtors

Central States Elec.

should be

fully preserved, mean¬
ing that American help should be
forthcoming without pressure to

mission;

(Continued

on

Detroit Int'l

30)

page

(Va.)

Stock

Common

1

Bridge

Reiter Foster Oil

MCDONNELL &fO.
I

Members

New

120

York

By

Exchange

Curb

BROADWAY, NEW YORK 5

WILLIAM

Former President,

+,

CHAMBERLAIN*

United Light & Power Co.

Frank C. Masterson & Co.

2-7815

REctor

Tel.

Tudor City Units

Refecting Outcome of War

-

Exchange

York Stock

New

,

Mr.

Chamberlain holds unprecedented victory in the

failed to gain

v/ar

declared political and

our

eco¬

Established

.

nomic

Members

objectives: national security and liberation of oppressed peoples. Develops position that, despite
military victory, voluntary abandonment during progress of war of her ancient balance of continental
power policy brought Britain actual defeat.
Discusses effect upon us.

Olctual TWafket 6 Qu

WALL

64

New

York

1923
Curb

Exchange

NEW YORK

ST.

Teletype NY 1-1140

0

HAnover 2-9470

The American

Steel

Taylor

Wharton

Iron

&

S.

Finishing

com.

& pfd.

U.
"

the

System
"A"
Guaranty & Trust

Title

to

& Film

war

gain

ity

crushed and

entering

upon

Eng. Electric

Gen'l Aniline

people stand as victors in the greatest war of history.
Our enemies in
helpless, their lands and cities laid waste.
The personal and
punishment inflicted upon them is without precedent.
Our declared objectives

war are

material

Virginia Electric Power Co.
Electric Bd. & Share Stubs
New

that

were

thes's that peace

for

;

tranquillity

triumph

our-

as

selves

and

freedom

for

of

0

ssed

the

over

enemy

Theatre
Dumont Laboratories
Artists

United

*

p

p r e

follows

It is

obvious

that,

barren

despite

our

ture

of fruit,

is

our

so

why the fu¬
prospect appears so somber.
and

e

Hood Chemical

attained.

Haytian Corp.
Int'l Detrola

-

deem

ously

BreenemiCompan^
Members N. Y. Security Dealers Assn.

Y. 5
Hanover 2-4850
Teletypes—NY 1-1128 & 1127

37 Wall St., N.

We face
depleted

began.
with

war

and

resources

impaired

Fear for the

danger¬

a

fiscal

position.

future oppresses us.

Oppressed peoples, before'
trance

into

the

war

our en¬

counted

of

tens

popularly

entertained

millions, are now
by the hundreds of
These

was

balance in military and economic
as
between
the
various
Continental

States.

As

a

conse¬

contrast

the

to

its

hands

concentration

of

one

(Continued

in

government;
page 26)

on

in

num¬

mil¬

^Editors Note:

In the

Mr.

Chamberlain

participation in the military vic¬
tory, Great Britain in reality lost

of

Joseph McManus & Co.
Members New

York Curb Exchange

Chicago Stock Exchange

39

New York 6

Broadway

Teletype NY 1-1610

Digby 4-3122

the

Washington

since

war

her

aim

was

not

military victory as a thing in it¬
self, but military victory as a
means

to

an

end.

She fought

to

render her Island and her Empire
secure

ger.

aga'nst

Yet,

as

we

has

rearranged
and brought to date the contents
a

him

immediately

Standard

Milling Co.

follow¬

ing announcement by the British
War Government of its pact to
continue the

Russia
tion

of

letters

to

the

in alliance with

war

the

.

Axis

out

In

states.

pointed

he

he

contended must be the certain

re¬

reasons

for

policy,

a

his

—

the

what

sult of such

★

destruc¬

complete

Troster,Curries; Summers

giving the

conclusions.

Mr.

Members

New York Security Dealers Ass'n

Chamberlain

presently resides in
Saratoga, Calif.
.

TT

,

Acme Aluminum

Utility

Public Service Co.

(United

tRhodesian

Kingdom 4% '90

Solar Aircraft Company

Common

90c

Selection

Canadian Mines

Gaumont-British

Canadian Utilities

Northern Indiana

Scophony, Ltd.

'

Alloys, Inc.

$1.10 Conv. Preferred

of Indiana

Canadian Industrials
Canadian Banks

Industrial

Asst. Mgru

number of letters written by
to friends in. New York and

We Maintain Active Markets in U. S. FUNDS for

STOCKS

KANE,

foregoing

opposite conclusion; the con¬
clusion that, notwithstanding her

Railroad
Public

MICHAEL HEANEY, Mgr.

WALTER

reasonable

a

the

an anticipated dan¬
the natural result of
acknowledge the outcome of the war as fought,
ourselves
powerless
to
liber¬ both her Island and her overseas
ate.
This is a strange outcome possessions are less secure than
of
victory
and
many
people, before the conflict began.
It is
who unhesitatingly accepted the my purpose to demonstrate this;

bered

lions.

Trading Markets in

William Chamberlain

insecurity

natural

Argo Oil

there

II

power

support in objective reasoning.
On the contrary, reason supports

se¬

the

this

'

following
preceding World

no

than be¬

fore

Pick

War

ip victory for Great Britain finds

We

cure

Lea Fabrics

(1) The

belief that World War II resulted

s

our¬

selves less

J. P. Stevens

interval

World War I and

of this dispersion or dis¬
tribution of Continental power, in

have not been

v e

us.

the

In

to

insofar

quence

d

objec t i

they affect
(2)

and

<

unprecedent-

Foundation Co,

Bell

turn

attempt to point out why
military victory has proven

Moxie Common

Time, Inc.

unexpected

That which

events.

military
victory, these

Albert

the

at

peoples.

R.R.
Aetna Standard Eng.
Punta Alegre Sugar
Warner & Swasey

j

wildered

be¬

are

an

New England
Piece Dye Wks.

Securities

to point out the causes;
outhne the consequences

Northern

Boston & Maine

f

and

would assuredly follow a military

secur¬

United

V

Curb and Unlisted

<$>-

Conv.

-

Preferred

*Twin Coach

Company

Canadian

Securities

Department

British

$1.25 Conv. Preferred

Common

& BONDS

Public Service

*UniversaI Winding Company

Securities

Department

BOUGHT

—

SOLD

—

QUOTED

90c

Conv.'Preferred & Common'

*Prospectus on request

Goodbody & Co.

C.A.Saxton& Co., Inc.
| 78 PINE ST., N. T. 5

J

Teletype NY

,

WHltehall 4-4970 I
1-609
'

T




jj

Members

N.

Y.

Stock

115 BROADWAY
Telephone BArclay 7-01OO

Exchange and Other Principal Exchanges
NEW YORK 6, N. Y.
Teletype NY I -672

J-G-White 8 Company
*

INCORPORATED

37 WALL STREET

*

NEW YORK 5

ESTABLISHED 1890

Tel. HAnover 2-9300

Tele. NY 1-1815

Reynolds & Co.
Members
120

New

York

Broadway,
Telephone:

Stock Exchange

New York 5, -N. Y.
REctor

Bell Teletype:

2-8600

NY 1-635

Volume 166

Number 4618

THE COMMERCIAL &
FINANCIAL

CHRONICLE

(519)

INDEX
Articles
The Economics of

—James D. Mooney

Neither

and

the Dollar

—Francis

W.

Should Free Gold
Markets Be Outlawed?

Page

.Cover

.

New Bull Market Nor

a

News

Shortage

Old One

an

—Sen.

LaFarge__-^

Robert

-Cover

^

Taft

A.

—

Cover

.

Implications of the Marshall Plan—Melchior
Palyi

2

____

Rejecting Outcome of War—William Chamberlain

Dr. Sakolski, in
commenting on recent reports of premiums
paid on
gold in various markets and efforts made to halt or
discourage free
gold markets, points out gold speculation is not an
"unmixed evil"
and is a normal
outgrowth of present unstable
monetary conditions.
Holds prohibition of free market leads
to "black

<

j

2

___

Should Free Gold Markets Be Outlawed?—A. M.
SakolskL^

"Whither America?"—Rep. Harold Knutson

markets," and a
gold arbitrage could aid in
bringing
about equalization of world's
gold supply.

3
6

_____

The Problem of Small Business—Russell A.
Stevenson

Construction in Mid-1947—Thomas S. Holden

*

9

sell

at

Discusses the Dollar Shortage—

4

___

Gael Sullivan Refutes Sen. Taft Claims

on

Congress

much

6

8

coming

mainly
British

14

which

fined

in

could

Canada

Canadian

14

A. M.

from
Co¬

lumbia

_13

Alfred Loyd Re-Elected to GOP
County Committee

claims,
modify

Sakolsld

not

be

14

the

Government

for

Haiti Makes Exchange Offer to Holders
of Called Bonds

14

SEC Reports

__

$35

«

16

Export-Import Bank Grants Credit to Italy—

18
19

Italy and Poland Devalue Currencies—

19

20

(Editorial)

Insurance

ternational

Our

Reporter

Business Man's Bookshelf

14

Prospective

Canadian

16

Public

Coming

Securities

Events

in

Field

-——

-

the

Investment

-—

Dealer-Broker

Recommendations

Einzig—The

Railroad
14

—-

Cost

Real

.^Convertibility.,

12

7

Mutual

News

Funds———

About

NSTA

Banks

of Trade

in

The

20

—

(Walter

COMMERCIAL

"See

of

and

Reg.

WILLIAM
25

B.

Park

S.

DANA

BERBERT D.
WILLIAM

j

Office

COMPANY,

$25.00

Publishers

Place, New York 8, N. Y.

'REctor

VFILLIAM

Patent

2-9570

to

9576

D.

SEIBERT,

President

jEvery Thursday

every

issue

corporation

and

Other

(general

and

—

Monday

ad¬

(com¬

market

clearings,

135

S.

Coypright 1947 by William B. Dana
Company
as

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

.

rate

per

year.

year.--

account of

the

postage
—

extra.)

Monthly,

fluctutations

in

exchange, remittances for for¬
eign subscriptions and
advertisements must
be

made

in

New

York

under

of

for

the

which

above

parity

an

the

dollar

This is not

ounce.

un¬

fact,

might be considered
of

sequence

speculation
on

although
Civil

funds.

it,

passed

within

a

nor¬

mone¬

have

the

gigantic

Congress

War

outlaw
was

a

We

in

as

and

war

disturbance.

gold
States

the

Act

of

CERTIFICATES
Bond & Mtge. Guar. Co.

Lawyers Mortgage Co.

had

United

scale,

and,

during

the

commodities that

be

Hoving Corp.
Jack & Heintz

Haile Mines
U. S.

Finishing Com. & Pfd.

J.K.Rice,Jr.&Co
Established 1908
Members N.

Y,

Security Dealers Astm.

REctor 2-4500—120

com-'

are

value,
or

Bell System

Broadway

Teletype N. Y. 1-714

im¬

so

as

to1

transferred,'

Haytian Corporation

always;

in

universal demand.
When
confidence in
currency stability
is restored, the
incentive to ac-!
quire gold or any other similar

Punta Alegre Sugar
Lea Fabrics

U. S. Sugar

commodity for hoarding
gradually

The gold thus withdrawn
circulation or from mone¬

ceases.

from

tary

is

use

restored.

miums,
so-called,
matically.
The

in

way

Gold

Susquehanna Mills

pre¬

auto¬

cease

DUNNE & CO.

which

gold went
into private hoards after the
out¬
break, of World-War II is de¬
scribed by the Bank
for'Interna¬
tional Settlement as
follows:—

Members New York
Security Dealers Asm.

25 Broad St, New York
4, N. Y.
WHitehall 3-0272—Teletype NY 1-958

"(i) During the war, several
governments, including the United
States

Government, sold

gold

in

India, China and elsewhere for
primary purpose of obtaining

York

the

local

currencies

at

a

Corrugating Co.

relatively

favorable price and the
secondary
of

purpose

checking inflationary
tendencies by the absorption of

BOUGHT

—

SOLD

—

QUOTED

the most volatile
money in circu¬
lation.

"(ii)

After

method

ployed

of

the

war,

a

financing

in

China

similar

was

and,

FIRST COLONY

em¬

CORPORATION

it would
which re¬

seem, also in Greece,
ceived part of its foreign credits
in the form of gold coins, subse¬
quently sold on the market.

52 Wall St.

New York 5y N. Y.

Tel. HA 2-8080

Tele. NY 1-2425

two

U. S. price of $35

to

weeks
was

it
in-

per

On

ounce.

Established

1947, the sale of gold was
suspended, the reported reason
being the heavy fall in Mexican
but sales

reserves;

the

at

price

end

was

of

were

resumed

when
increased to $42.90

This

ounce.

Members
New

the
per

however,

was,

a

York

Stock

Exchange

New
i

March,

York

Curb

Exchange

Cotton

Exchange

New

bear

made to

and

the

a

reduction

former

level

first part of April, and

Chicago

would

seem

the

to $39.76

in
to

Mexican
gold
have taken place

(Continued

on

page

Exchange,

Board

of

New Orleans Cotton
And other

Inc.
Trade

Exchange

Exchanges

was

May, 1947.

"Arbitrage
■'«-

in

York

Commodity

higher quotation than the market
could

1856

H. Hentz & Co.

Jan. 28,

per ounce in

legislation

realized that the law

We

N. Y. Cotton

Exchange Bldg.

NEW YORK 4,
CHICAGO

DETROIT

Nw Y.
PITTSBURGH

GENEVA, SWITZERLAND

41)

interested in offerings of

are

Stern & Stern

N. Y. Title &

Prudence Co.

.

■

'

Subscriptions In United States, U.
Possessions, Territories and Members
Pan-American Union, $35.00 per

year;

Members
S.
of

in

15 Broad

New

York

St., N.Y. 5

Bell

& Trust Co.

PREFERRED STOCKS

Rome Cable Corp.
4%

Spencer Trask & Co.

Members New

Stock

25 Broad
Tel.:

Exchange

York Stock

Street, New York

Albany

4

Members New

York

135 S. La Salle

HAnover 2-4300

WHitehall 4-6330

Teletype NY 1-2033

Exchange

Curb

Exchange

St., Chicago 3

Tel.: Andover 4690

Boston

-

Glens Falls

-

Schenectady

-

Conv. Preferred

Analyses

C. E.

on

request

Unterberg & Co.

Members N. Y. Security Dealers Ass'n

61 Broadway, New York 6, N. Y
Telephone BOwling Green 9-3565

Teletype—NY 1-5
-

Textile, Inc.

Public National Bank

Mtge. Co.

Newburger, Loeb & Co.

~

High Grade Public Utility and Industrial

Lawyers Title & Guar. Co.

March

Subscription Rates




Aeronca Aircraft Com. & Pfd.

Europe in September

tary

Record—Monthly,

Record

it

mal

(Foreign postage extra.)

of

second-class matter Febru¬
at the post office at New

\
'

the

Earnings
year.

free gold

a

precedented in time of war or in¬
flated paper currencies.
In

per

(Foreign

to

measures

outlying sections

far

were

9.

$38.00

Quotation

taken

obsolete*.

your

WALL STREET, NEW YORK
Telephone: WHitehall 4-6551

4

a

quotation

bank

news,

La
Salle
St.,
Chicago 3, 111.
(Telephone: State 0613);
1 Drapers'
Gardens, London, E. C., Eng¬
land, c/o Edwards & Smith.

Reentered

Canada,

year.

have

similar

in

in

of $35

44

page

certain

on

TITLE COMPANY
and

news

city news, etc.).
Offices:

sporatic

reported

You

on

and

s<t

99

moneyj
confidence;

leases, etc., into
or

us

meant

Join the satisfied

many.

i

;

and, above all, which will

countries, where

interfere in

or

war

metal
35

RIGGS, Business Manager

vertising Issue)
plete statistical
state

per

Note—On

Thursday, Aug. 7, 1947

records,

and
per

Monthly
$25.00

SEIBERT, Editor & Publisher
DANA

5

>■

Other Publications
Bank

U.

Industry

37

Says)

Countries, $42.00

FINANCIAL CHRONICLE
,

18

,

Registration-—-

Whyte

article

Dominion
Other

and

been

Street—have

so

ranks and call

was

"(iii) The Bank of Mexico has
1939, when serious gold
shortages sold gold from time
to
time,
by' the belligerents was in
pros¬
pect, gold has become a com¬ requiring payment in U. S. dol¬
lars.
From June
14, 1946, the
modity favorable for speculative
price was $40.61 per ounce, this
operations, and, at_various times,
being 16% higher than the offical
prices
were

14

!">*

Markets

Washington and

13

Weekly

Philippines

Mex¬

Beginning with the outbreak
the

8

25

'

Twice

Tomorrow's

Switzerland,

market.

40

Securities-

Now

42

Bankers—

Notes

Published
,

and

the

outlaw

15

Securities

Estate

The State

.

Activity—

gold.

o

Offerings

From

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

in

dealings and speculation in gold

Page

Securities.—______

Securities

Sterling

rigid steps to

ing
ico,

May—

Securities Salesman's Corner

8

—

of

Monetary Fund, which

South American

Governments

Security

Investment

jointly

requesting

prevent pri¬
vate banks and others from deal¬

44

Wilfred

on

Utility

Fed¬

requested member nations to sup¬
press free markets in gold bul¬
lion. Great Britain also has taken

have

Observations—A.

12

have

statement

a

somewhat

—Cover

Board

the

44

Bank Loans—

Stocks

and

denied.

along the same lines had
previously taken by the In¬

more

Page
It

See

and

Snyder

Reserve

been

Regular Features
We

be

29

Championship

Burnett Walker, of Smith,
Barney & Co., to Study
Foreign Financial Conditions

As

"free"

Action

Merryle S. Rukeyser Says New Dealers Are Now
the
Stand-Patters
:

Bank

fear of

banking
and
business
in ' the
United; States not to lend facil¬
ities
fcrr this
traffic t and i the
Treasury
is
about
to
enforce
stricter licencing of gold
exports.

18

N. Y. Federal Reserve Bank
Analyzes Gold Distribution

a

or

ounce, .cannot

issued

18

Gold Exports

is

"black"

gold, involving danger
parity of

Secretary

16

Schwartz, President of Proctor Electric Co.,

Says Prices Have Not Yet Reached Peak

Turkey Plans to Seek World

an

eral

National City Bank Analyzes
Federal Budget Reductions

N. Y. Curb Team Wins Softball

widespread

to the present U. S.
gold

15

Kent Cooper Hits Government
News Agency Plan

on

greatly exaggerated.

market in

15

Treasury Proposes More Brakes

was

However, that there
a

Says Short Corn Crop Poses Serious Problem

W. M.

ment

Resources and Liabilities of Dealers

on

and Brokers

much to

••

causes a loss of

size in relation to
be easily stored

this'

permitted to be exported,
importance of the announce¬

the

Wall

perishable, have relatively small

re¬

v^hich

and

reason

Australia Joins Fund and World Bank

-—99

the
stability of the national
currency. Therefore,
people Who*
have the
means, seek to transform;
their
surplus
holdings of cur-'
rency or other
property having
a
face value
expressed in terms
of the
monetary unit, such as debt

referred

ore

■

r

in

the

only
to
low
grade
gold

11

Sigurd S. Larmon Urges Better Knowledge of World
Conditions

system,

open
Inas¬

as

ment

Clement Attlee Reveals Plans to Avert Crisis in
Britain______9

Pessimism Is Overdone, Says National
City Bank—,.

WORDS

v

j

announce¬

Chicago Transit Authority Bonds Offered to Investors______

THREE LITTLE

Causes of Speculation in Gold
What causes the
speculation?
'
The
answer1 is \
Very ; simple J
War, together with a paper

premium

market.

it

■
■

re¬

the'

therefore
-

product

a

in

Accomplishment

_________

Winston Churchill Flays Britain's Labor
Government-

the

,

fined

and

hastily repealed.

producers and
4

Knox, President of Westinghouse Electric International Co.,

80th

con¬

centrates from

Canadian

Governor Dewey Lauds Unionism-.

of

of international

effective

cept gold

13

*

.

AMD COMPANY

Considerable interest has
developed in "free" and "black"
markets
for gold since the
announcement of the American
Smelting and Re-"
fining Co. that
it would
ac¬

11

Clerks—Roger W. Babson

*

restoration

7

Britain's Economic Situation—Sir Stafford
Cripps___
Bottleneck of Careless Sales

LicHTfnsTfin

"

By'A. M. SAKOLSKI

Achievements of the GOP Congress

Worcester

3

Teletype NY 1-1366

i*!11 ,i1 .'Jt' "WWW'SiMsU

taMwiH

.

Thursday, August 7, 1947

CHRONICLE

THE COMMERCIAL & FINANCIAL

(520)

4

BUSINESS BUZZ

Dewey Lauds Unionism
pre-Labor Day statement, New York Governor says we cannot «
our State without well conducted organizations
banded

In

visualize

EST, m*

together for collective bargaining.
Says State Government is
dedicated to principles of union organization and collective bargain¬
ing.

*

.

Governor Thomas E. Dewey

Day statement, issued at
labor

and
of

convictions
t h

Brockway Motors

d

Buda Co.

squalor.

pioneers

e

jnionism. The

the

of

statement fol¬

rest

lows:

Chicago R. I. & Pac.

aries

and

long

a

since

Fairbanks Co.*

Cement*

Liberty Aircraft Prod.
Majestic Radio & Tel.
Michigan Chemical
Minn. & Ontario Paper

marched

took determination and

well

as

moral courage, to

as

of

struggle

for fair treat¬

the

the

who

men

work for

gressive legislation which insures
those who toil the highest degree

On their side they had
only their courage but the
conviction that they were right.
wages.

not

Purolator Prod.*

protection against the hazards
of social and economic insecurity.
of

"Today the people of New York
that they were right.
A

-ealize

Rockwell Mfg.

administration of the gov¬
of New York State is
principle that the
everCi>any argu¬
principles of union organization
' We take labor
and* collective bargaining must be

great many of us
hat

Sorg Paper

%

Stand. Fruit & Steamship

Sterling Motors*
J. P. Stevens

Stromberg Carlson
TclCd

Taylor-Wharton*

there

Time Inc.

was

about

ment

unions

it.

granted,

for

fact

in

U. S. Air Conditioning
United Drill &

Tool "B"

Vacuum Concrete*
Warner & Swasey
Wurlitzer

of

position

progress."

organized

social as well as our
industrial fabric.

Cent. States Elec. Com.

Cumberland Gas

-

tells American

fact

spirit with which we share;
celebration testifies to the
that the social progress of

New

York

Gould & Co.,

J. W.

120 Broad¬

City, announce
that Edward Glassmann has joined
heir organization. Mr. Glassmann
ing conditions of the workers im¬ was formerly
manager
of the
the state

In

New

way,

throughout

mortgage

York

department

sales

Hart Smith & Co.

improved. We know to-

for

tional

General Machinery Corp.
Oxford Payer Com.

Crowell-Collier Pub.

Virginia Elec. & Pow. Co.

Elec. System
Puget S'nd P. & L. Com.
Southwest Natural Gas
Standard Gas Elec.
Tide Water Pwr. Com.
Bulletin

or

Circular

upon

Bo,ught

-

Sold

-

Quoted

told

Exchanges

request

the

has been a de-

of

velonment

e r

out

almost

the

excess

William E. Knox

Ward & Co.

the only way it

EST

Wellman Engineering Co.

1926

Tennessee Products &

\fiembers N.Y. Security Dealers Assn.

120 BROADWAY, N.Y. 5
REctor 28700

in

productivity

European

incentive to

vestment there,

so as

capital in¬

to enable a

enlarged volume

of

Euro¬

exports to the United States

upon

world shortage of

something that has

us

over

night,"

Mr.

pointed out. "For 20 years,
1920 to 1940, the United States on
an
average exported over $800,Knox

more

than

it

imported.

Direct Wires To

-

—

Folia., Chicago <fc Los An^lea

ENTERPRISE PHONES
BtrtTd 6111

Buff. 6024

Boa. 2100




Analyses on request

Two world wars have ag¬

gravated

the

the first world

.

situation.
war,

During

for instance,

sunply of wines was cut off
from France.
So, in New York
our

Scli^maii) Lubetkm &D Co.
.

5

IS.,

f

t

•

Members New York Security

41 Broad Street

' *

"•

-

-

'

Dealers Association

New York 4, N. Y.

State and in

oped

our

pagne

California, we devel¬

own

wine and cham¬

business, and today we are

producing very acceptable quali¬
ties

ties.

of both

believe

and in great quanti¬

We are even in the export

that

even

a

-

I do
good
dif¬

Scotsman could have told the
ference.

Company

Westinghouse

"The

several years ago realized
we

in America are

Accordingly,
Import

own

that time we
able

sums

of

able

that if

going to con¬

export we must import.

to

tinue

countries.

otner

loans.

Chemical

INCORPORATED

N. Y. 1-1286-1287-1288
_.

*

had had one more year

ists
not

come

becoming

really

were

reasonably palatable. If our chem¬

by the
performing certain services
for us in the way of shipping and
insurance, by our tourist trade and
by our purchase of the world's
gold and silver, and by gifts and

Osgood Company "B"

they

war

and that

ment

Towards the end of the

whisky.

n uous

be remedied is by an improve¬

ports,

whisky.

Scotch

of U. S. exports over im¬

t i

c o n

exports

During the war we developed at
least five brands of Scotch type

century,

.

of their most
to the United

namely,

States,

last quar-

the

British

that the

believe

I

valuable

world

Convertible Debentures due 1956

another

had lasted

war

would have lost one

000,000

4%

the

"If
year,

This balance was made up

Graham-Paige Motors Corporation

and today we are

eum

present "dol¬
lar
shortage"

dollars is not

105 West Adams St., Chicago
Teletype NY 1-672

Telephone BArclay 7-0100

petrol¬
producing
rubber in greater quantity than
we ever imported it prior to 1940.
alcohol and

from

rubber

"The current

Exchange and Other Principal

New York

War II, again
example, we were

World
an

as

off from a supply of natural
rubber.
This forced us to produce

jcut

audi¬

that

pean

Goodbody & Co.
Members N. Y. Stock

"During

simply

re¬

from

his

and

115 Broadway,

business in wine and champagne.

who

just

much

New Eng.

<$>-

Com¬

ence

can

& Pfd.

...
Chamber of Commerce in

American

the

July 24, W. E. Knox, President of the Westinghouse Elec-

on

growing

Buda Company

before

European

of

Art Metal Construction

address

trip, including
Soviet Russia,

t

Durez Plastics & Chem.

free enterprise system.

Interna¬

tnc

T^nTv*

Federal Water & Gas

*

a

an

London

i

J. W. Gould & Go.

has been synchronous

parallel with the progress of
the
cause
of unionism in our
midst.
As the living and work¬

proved, the conditions

under

turned

Edward Glassmann

Sees remedy in improved

export balance.

our

European economic productivity, and greater incentives to capital V

had

in this

Chamber of Commerce in London it is result of

steady growth of

pany,

;.abor in our

Cleveland-Cliffs Iron Co.

Amer. Gas & Power

W. E, Knox, President of Westinghouse Electric International Co.,

\

we

preserved.
t r
•
state without
'Both personally and hs Gov¬
well-conducted ' organizations
of
ernor, I am happy to send warm
men and women banded together
for collective bargaining.
Labor greetings to the members of labor
organizations
throughout
the
Day in this year, 1947, is a festi¬
val in which the entire population state, and I urge the people of
New York to join in celebration
of our state joins to acknowledge
of
this
anniversary of Labor's
and respect the established, un¬

and

United Artists*

The Dollar Shortage

dedicated to the

"The

Tokheim Oil Tank

"The

,

ernment

have forgotten

Hiya, Fatso! My name's Smith. I hear your firm is looking;
a man with a forceful
personality!"

for

canhot Visualize ouT

disputed

Textron-Pfd. & Wts.
•

fortunate in the patriotism,
the maturity and the understand¬
ing of its labor leadership.
We
owe to labor much of the unpre¬
cedented prosperity and well-be¬
ing of our state, its record rate of
employment and high wages; its
harmonious
industrial relations,
and the whole network of pro¬

lines of jeering spectators.
physi¬

sparse

been exception¬

"Our state has

ally

processions
through

Day

Labor

earliest

sometimes

ment

Polaroid

to

tribute

Dewey

faced misun¬

of unionism

oneers

join

Philip Carey

£.

Thomas

derstanding,
indifference,
even
/iolent
hostility. - Many people
still alive can remember how the

cal

Nu-Enamel

f

an

operation in two great world wars.
The
freedoms we
enjoy today
first Labor Day.
The interven¬ would have been shattered by
ing time has been a period of now if its leaders and members
progress beyond compare in the had not realized that free unions
history of industrialism. The pi¬ can exist only in a free society. 1

It

Moxie

.

occasion to pay
labor's record of co¬

also

is

"It

.

the

brated

Lanova*

of us, the indirect beneficir
of unionism, to pay tribute

cele¬

workers

Gt. Amer. Industries

o

:

devoted bygone pioneers
spearheaded the union move¬
in its days of storm and
stress.
'
1

way

aainority

General Machinery

A,

-

ment

small

a

;

who

our coun¬

try have come

Elk Horn Coal

'

•

the

to

state

"Our

Diebold*

1

"Sept. 1, 1947, therefore, should
be an occasion for not only the
direct beneficiaries, but also the

American

f

;ext

Cinecolor

Lawrence Port.

the

courage

American Hardware

day that no community enjoys
complete health in which any
segment of the population toils
for inadequate pay and lives in

and

lauded

Labor
the principles of

Albany on Aug. 5, praised

organ¬

ization

Abitibi Power

• '

•

}

of New York, in an advance

of

our

established our
andj ( since
have spent consider¬
money and consider¬
we

Division

time

executives'

in'

trying to find ways and means in
which to increase imports intorth$
United

States,

not to tear -down
but to supple¬

economy,

own

our

ment it and build it up.
hear

"I

and

hard
the

basic

a

lot

soft

in

Europe about

money.

It

difference?

What, is
is very

simple and can be summed up in
word—production.
In the

one

United States, if you have
you

can

dollars,

purchase anything from
to electric refriger¬

automobiles

ators, from new clothes
If you
be
you

to food.

wish the pound sterling to

classified

as

a

hard

currency,

must produce.

"In

conclusion,

I

have

two

thoughts that I would like to leave

(Continued on page 36)

<r

Volume 166

Number 4618

THE COMMERCIAL & FINANCIAL
CHRONICLE

Steel

The

F. H. Alliston Is

Production

Electric Output

Observations

Carloadings

State of Trade

Retail Trade

Commodity Price

Special

By A. WILFRED MAY

Auto Production

Industry

MONETARY FICTION AT HOME AND
ABROAD

J

Industrial production in many lines continued to
advance grad¬
ually during the past week and total output at the close
was slightly
higher than that of the previous week. The
continuing dearth of
certain types of skilled labor and raw
materials worked to
..

disheartening features of the President's Midyear
Economic Report is the great
emphasis laid on "purchasing
power,"
and the indication that New Deal
purchasing

largely discredited, will continue to

so

long

reported as generally agree¬
able with some employers noting an increase in
employee efficiency,
but at the close of the week the
picture was somewhat altered
by
new threats to
production by labor disputes.
In

r.

the

case

the

of

Ford

Company negotiators failed
on

Motor

union

at noon

on

strike^ both sides reached

...

In

the

steel

industry output made progress from the low level
during the recent coal shutdown and the
operating rate
beginning Aug. 4 will be at 94.9% of capacity.
Many users of sheet steel were unable to meet

reached

for the week

production sched¬
ules due to the
difficulty in obtaining supplies and increased
prices
of steel further
aggravated the problem of users.
'
Production of electric ranges, electric
pumps, motors and oil
heating equipment was high but was not adequate to
meet the very
«

glossing
A.

Wilfred

1

week ago.

The effect of the increase in steel
prices

registered in the

was

motor
industry on Friday last, when General Motors
Corp. initiated
the first major
departure in the price of cars by
announcing a 2%
to 6% increase in all
passenger vehicles and Chevrolet trucks effect¬
ive Aug. 1.,- It is
understood that price increases on G.
M.'s nonautomotive products will follow the
same
general pattern as for
passenger cars and trucks.
•
With respect to other
car-makers, no comment was made, but
.

,

-

they

were

reported studying the situation. The Ford
Motor Co. was
reported hopeful that price
adjustments made a month ago would
cover recent increases in
costs of material. In the trade
the feeling
existed that price increase
announcements
week from
manufacturers not

Consumer credit,
which

ness

credit

by

has

the

come

early nexl;

a necessary and desirable instrument
of busi¬
considerable contraction
during the war as a

suffered

result of governmental

reported

might

already heard from.

restrictions, is again coming to the fore.

Federal

continued

Reserve

its

Board

that

month-by-month

the

volume

It is

of

such

breaking climb
through June, adding 2% to another
peak of $10,884,000,000.
This
represented- a gain of
$2,979,000,000 in the?-last 12 moiiths
!:

According to the
only
the

consumer

same as

Federal Reserve

credit field

still

V;.--.

'•

■'''■*

-

Board, installment'buying, the

under

other types of credit.

*

restriction, performed

about

Instalment credit on auto sales increased
another 6% in June to
a total of
$852 millions, but the rate of increase
was less rapid than
for any of the last 12 months.
;
Installment
to

a

total of

sale credit for other

items

Building,
York

Mr.

on

"net"

our

was

rose

nearly 3%

$1,142 millions.

in June

Chronicle

the

New

Stock

Ex¬

In the past Mr. Alliston

an

officer

of

the

First

of*

Stix & Co. Add Two
Special

to

exports
ST.

Truman's

of

Detroit

Michigan Corporation.

•

,

members

and

changes.

509

The

Financial

Chronicle

LOUIS, MO.—Stix

&

Co.,

Olive Street, members
of the
Louis Stock

St.

added

Exchange, have
Sterling M. Friedman and

Leo I. Miller 'to their
staff.

real

real
more

"The

of production

over

cause

currencies

of

shortcomings

Europe's

difficulties

with

"dollar

shortages,"

and

and

as

the

"soft"
as

the

determinant of the Marshall Plan's
course, has been nowhere
clearly depicted than by our Ambassador
right in London.
dollar

crisis is fundamentally a
production crisis," says Mr.
"No amount of sophistry, no
dialectical exercise, can con¬
ceal this brute fact. There will be
no solution
therefore to the dollar
crisis, so loaded with far-reaching consequences, until the
production
crisis has been mastered. It is for this
reason that
Secretary Marshall,
evidencing again his singular capacity to assess the

Douglas.

significance of

events, made his Harvard address."
Coal

This
cases

Not

analysis

of

our

Currency, Needed
vividly confirmed than in the
England and France.
Despite

is nowhere more
"sister democracies,"

Chancellor

of the
Exchequer Dalton's adroit fiscal
manipulations
creating a plethora of purchasing
power, the British situation is
going from bad to worse. Why? Because of
production shortcomings
The amount of
monetary units in the hands of the people
gives not
one iota of

five

compensation for the limitation of
productive labor to

day work week—in

units, in the face

quarter

of

Canadian Western Lumber

4s, 1962
Consolidated Paper SVzs, 1967

Shawinigan Water & Power
3s, 1971
Steel of Canada

HART SMITH & 00.
52 WILLIAM ST.,

New York"

(because?)

has not >.t

all

The
was

qorrect

contradictory aims. Witness the
collectivized

BOUGHT

and

current waste and

inefficiency in

AND

with approval

SOLD

of local controls.

'

..if,

L i

'

Markets

quoted

*

for

.<"* t
kind of

I

any

foreign exchange, free

blocked.

or

grain

harvesting, as officially reported in
difficulty in turning out both
goods—despite the complete freedom of

"Pravda," and his evidently
producers

Toronto

STERLING BALANCES

Soviet Example

in declaring that the subtlest and
overturning the existing basis of society is by debauch¬
ing the currency. But now Mr. Stalin is
realistically and disappoint¬
edly learning that social revolution and needed
production represent
two
own

Montreal

Arabian, Ethiopian, Iranian,
Liberian, Siamese

surest way of

his

HAnover 2-098*

1-395/

offset

products of American
Relief of currency famine does
not relieve production

surely

N. Y. 5

Bell Teletype NY

of purchasing
of the nationalization of one-

nation's productive facilities,
production shortages and the need for

Lenin

2%s, 1967

supply

the

free enterprise.
famine!

3Vis., 1967

Canadian Pacific Rwy.
4s, 1949
Canada Steamship 3V&S, 1957

a

dollar famine.
"Can our industry
produce the goods?", not
"Can, our Exchequer
manufacture the moneyV*
surely is Britain's burning question
today.
In the same
way, it is the "miracle of production," not the
jug?
gling of credit, that has accounted for America's
unparalleled wealth
In France too the
enormously inflated
power

3%*, 1967

Bell Tel. of Canada
3s, 1977
B. C. Pulp & Paper

a

country self-admittedly on the brink of
bankruptcy. The existence of adequate supplies of
currency or bank
deposits mines no coal, nor
directly or indirectly supplies sufficient
food or gasoline to
keep them off the ration cards. Only
exportable
production, not currency-creation, can relieve Britain's

severe

Abitibi Pr. & Paper

record

figure

Alone, it is stated.

May
\

The

*

special section

Norman,
privately commented on American preWar planning prospects
-thus, "Who is going to
do the managing, the Lord
himself?") The present

heavy demand.

demand for all building materials
continued to be heavy.
Total engineering construction in the week
amounted to
$100,834,000,
ebout 25% below the
previous week.
Private construction decreased
12%, and public construction 42% from the levels
of a

and

Financial

MIC H.—Frederick

who

a

compromise
which allows up to one year for a
study of the provisions of the TaftHartley law by a bi-partisan four-member commission. This
action
defers any strike for at least 10
days.
The principal point at issue
was a dispute over a
pension plan and a "John L. Lewis" contract
clause which would
side-step the penalty provisions of the TaftHartley Labor Law.
v
-

a

position is particularly
harmful in encouraging the socialist
planners
abroad whose managed
economy moves are based
on manipulation of
money spendable by buyers.
(A far cry from the realism of
Montagu

and

Less than eight hours before the
deadline set

that day for the

on

home

at

.

And

Company, both the

by his devotion of

abroad.

Workers, and union officials tentatively set the strike for
Tuesday
morning of this week.

assets

ness

Friday last to reach any agreement
dispute which threatened a walkout of 107,000 Ford

contract

a

were

The

wittrWm. C. Roney &
Co., Buhl

thereto in which it is implied that our industrial
activity and general prosperity are largely de¬
pendent on individuals' savings and liquid busi¬

*

Labor-management relations

be

theories, although
officially promulgated as
power

the present administration remains in
Its importance in the President's mind is

manifested

hamper

production in several lines.

as

power.

—

H. Alliston has
become associated

One of the most

*

to

DETROIT,

...

Business Failures

5

With Win. G. Roiey

Index

Food Price Index

and

(521)

consumers

permanent

all his consumers and
the market
money restrictions.

place from "arbitrary capitalistic"

F. BLEIBTREU &

CO., Inc.

79 Wall St., New York
5, N. Y.

Telephone HAnover

2-8681-2

■

STEEL

PRODUCTION

ABOVE WEEK AND YEAR
AGO
The steel scrap market this
week was still on the

loose and its

inflationary gyrations
cf

1917.

Nor

peak had
would
worst
cost

been

soon

case

was

was

surpassed even the hectic World War I
days
there any sign
except wishful thinking that a

reached

develop.
of

in

scrap

prices

situation

was

since

jitters

wartime

days

metalworking weekly.

that

or

This

their chief
problem,

During

In

when

downward trend

a

giving

steelmakers
production

their

at

any

according to "The Iron Age," national

peacetime period in the nation's
history has the price
of scrap remained so
high for so long a time, states the
magazine.
no

This condition stems from
wartime dissipation of
scrap
Current demand for
steel, and the

long-term

advances

were

noted

this

week

at

Buffalo

burgh the price of heavy melting steel this
above the average
price there in June
gross ton

was

scrap

and

shortage.

Chicago.

week

1917 when

supplies, the

a

reached.

was

Sharp

At Pitts¬

$1.75

a

ton

peak of $41 per

addition

Cables:

The Positive Damage
to

the

above-indicated

chasing

negative results from

Solofret,

New

York

pur¬

power stimuli, there is also a
very important affirmatively
disastrous repercussion
that it behooves us in- America to recognize.
are in
possession of more purchasing power than can be
used, that is, if the total of
monetary units exceeds the aggregate
of the
available goods, the relative
under-supply and under-produc¬
tion of the wanted
goods will only be aggravated.
For workers
already being unable to spend their funds on the
goods which they

If workers

want—and

LAMBORN & CO.,Inc.
99

and 'not by abstract economic
community—will naturally ease

up
their productive
effort which would
only get them more unspendable
purchasing power. In other words, it must be realized that
goods cannot be consumed
before

on

power"

they

can

are

WALL

STREET

NEW YORK 5, N. Y.

motivated subjectively
theory about the welfare of the

*

SUGAR

produced, and "purchasing

be diluted until it is
entirely fictitious.

Raw—Refined—Liquid

And most important
of all—extension of purchasing-power ex¬
perimentation arid other variations
of rubber-dollarism must inevit¬
ably lead to ever wider areas
of political management and, if not
abandoned, the eventual creation of a collectivist state.
'

M

'

■

=»

>

f

t

•

i

'»

7

.

•

Exports—Imports—Futures

,

—

DIgby 4-2727

,

;

'

.

'

,

'

The average
price of
and

heavy melting steel at
Pittsburgh, Chicago

Philadelphia advanced'

92c

a

gross

ton

''The Iron Age"steel
scrap composite price to
gross ton.
The strength in the
the absence of

The

steel

for
a

the

new

week

market has been
spectacular

some

price

large buyers from the market.
increase recently

put

into

and

effect by

Common
a

despite




on

page

36)

&

Specialists in

Preferred

United Artists Theatre Circuit
Common

.

steel

pro¬
ducers averaged
$6.17 per net ton according to the
revised "Iron Age"
finished steel
composite price, which is
weighted to the shipments
of the various
major products included in the
composite. The index
this week is 3.17956c a
pound compared with 2.87118c a
pound in the
week previous to the
price advance. The
average price for finished
steel today is about
10.7% above what it was two
weeks ago and
37.6% above the
average for 1939..

(Continued

McGraw (F. H.) & Co.

put

high of $41.75

Domestic, Canadian and
Philippine Mining Issues
»/
i

Bulolo Gold

.

t

Dredging, Ltd.

,

Kerr

Bought—Sold—Quoted

Addison

Big Wedge Mines
Far East Oil

FREDERIC H. HATCH & CO., INC.
Established
MEMBERS N. Y.
63 Wall

1888

SECURITY DEALERS

Street, New York 5, N. Y.

ASSOCIATION

MAHER & CO.
62 William St., New

York, N. Y.

Tel. WHitehall 4-2422

Branch, Office
Bell Teletype NY 1-897

113 Hudson

-.«•••

St., Jersey City, N. J.

;

6

Refutes Taft

"Whither America?"
KNUTSON*

By HON. HAROLD

'

Chairman, House Ways and Means

Committee

-

Truman's veto of
penalizing suc¬

governmental
that

Denies tax reduction will increase prices and accuses President of
Upholds Taft-Hartley Act. Sees absolutely no economic foundation for prediction
depression is in offing. Calls for rebirth of American spirit of self-reliance.

cessful enterprise.
extravagance.

America?" because we have now reached
nation where we are called upon to decide whether we

in our progress as a
shall continue on the road that will inevitably lead to
ruptcy, or re<§>we

path
brought

.proven

The Problem

bank¬

of Reducing Federal

Expenditures

as

If it is

deemed desirable to re¬

that

momen¬

tous

decision.

manageable
The issue is clear-cut and let proportions, we should look even
more
to the elimination of im¬
no
one make
any mistake about
governmental activities
it.
In short, shall we choose to proper
than to the trimming of expenses
remain a free people, whose roots
in each
bureau or department.
are deeply grounded in the tenet
Over and over again, we should
that there can be no • substitute
ask the question: Are there not
for personal integrity, individual
initiative, and collective industry, private organizations which could
and would perform this service
or shall we substitute therefor a

In

all parts

philosophy

.that

prosperity,

us

happiness and
greatness. To¬
day the Amer¬
ican
people
called

«tre

to make

upon

>

of the

is

found

Hon. Harold Knutson

unrest,
uncertainty
4
and bewilderment. Only we have
been able to retain a semblance

mass

political and economic sanity.

of

}'" The

is

issue

Shall we

clear.

cling to the blessings with which
have been endowed by a be¬

we

the

to

and

Providence,

neficent

institutions and traditions handed
down from the
In

well for
are

us

Founding Fathers?

at

arriving

is

it

decision

a

to remember that we

but custodians of the blessings

♦An

address

Rep. Knutson
of

by

before the National Association

Credit

Til.,

Chicago,

Jewelers,
July 29, 1947.

Preferred

Artkraft Mfg.

Terminal

Bayway

Emerson

c

Drug

Class A & B

Jacksonville Coach Company
Common

Kirby

Lumber

Common

STEIN BROS. & BOYCE
York

&

Baltimore

CALVERT

BA 393

New York Telephone REctor

2-3327

™S

BANKERS BOND £°1
Incorporated

Floor, Kentucky Home Life Bldg.
LOUISVILLE 2, KENTUCKY

Bell Tele. LS 186

Long Distance 238-9

ST. LOUIS

BOSTON

Stix & Co.
Boston & Maine RE.
-Prior

efficiently

to

and

<

to face.

issue),
Gael Sullivan,

econom¬

Thursday night the wild claim
of trimming the budget by $3 bil¬
lion was repeated. No
mentiori
was made of the fact that the goal

National Com¬

was

mittee

made

Executive Di¬

question ought certainly to
raised in the case of all the

This

re¬

lowing

reductions amount to only $1

lion 267 million which means

Many Reblicans
tried

Gael

to

Sullivan

the

defend

approach

Sen¬
Robert A. Taft of Ohio who
to the air from his home
in

only achieved by a

were

80th Congress.
Latest

thai

Republicans ipissed their goal
by 79%.
-t
And these relatively small cuts

the

p u

ator

actual
bil«i

far available shows that the

state¬

ment:

have

$6,000,000. No mention was
of the fact that the most
and accurate estimate soi

careful

leased the fol¬

took

ically?

the

of

rector

this

State Thursday

group

was

cuts

that saw
in such things

lunch program.
No attention was

night to try to ex¬

meat-ax

unreasoning
as

the school

paid

/.
the

to

.

Stock

BALTIMORE 2

ST.,

Bell Teletype

more

budget

problems they hadn't the courage

of

cover

this

.

1st

S.

the

on

fact that such cuts would cer¬
plain away the failures of the Re¬
be
the God of our Fathers
tainly pay off in the poor healtH
agencies extending government publican dominated 80th Con¬ of future
that we will not repeat the same
generations of American
credit: The Farm Tenant Office, gress.' Incidentally, Taft had the
mistake that so many other peo¬
citizens.
•
,
The Rural Electrification Admin¬ news broken to him at that time
Soil conservation was hit, crop
ples have made.
istration,
the
Social
Security that he was Ohio's favorite Re¬ insurance was hit. Small business,
Board, the Federal Works Agency, publican son.
y
Public Spending
which had been getting help from
The entire approach to the 80th
the National Housing Agency, the
As you are only too well aware,
the Department of Commerce tQ
Railroad Retirement Board, the Congress taken by the Republican
the question of taxation cannot be
aid them to compete against Big
leaders is unreal,
Tennessee Valley Authority! the
divorced from that of public ex¬
Business,
found all these aids
Veterans Administration, the Fed¬ y The claim many things, but fail
penditures. The most difficult fi¬
sabotaged under a Congressional
eral Security Agency, the U. S. to face the things they did not do.
nancial problem confronting
us
policy of Big Business%favoritismt
Maritime
Commission, the War ; The fact that two farcical com¬
Taft said time was necessary t<|
today is how to reduce public
mittees were set up by the leader¬
Shipping Administration, the
spending. Some of you may, like
of
the 80th Congress to get his inexperienced Congres^
Smaller War Plants Corporation, ship
under way.
myself, be old enough to remem¬
The fact is it neve*
solemnly investigate and try to
and various insurance and retire¬
ber the denunciations for extrav¬
yy
determine whether there are any got under way.
ment funds.
It never did get its appropria¬
agance heaped upon the first bil¬
At present, of course, the domi¬ high prices or any housing short¬ tions bills into order.
lion
dollar
Congress—one
that
nant item in the budget is the ex¬ age are typical of that unreality.
For the first time in history no|
Part of the format of every sospent a billion dollars, not in one penditure for national
defense.
one
of the 12 major appropria¬
called statement on the 80th Con¬
Until this item of expenditure is
year but in two. How times have
tions bills was ready by the end
reduced drastically, the Federal gress is a long sequence of double
of the fiscal year. As a matter o|
changed!
tax!1 burden is certain to be oppres¬ talk, false claims, smears of all
.■ 'X
fact most of them were still pend¬
sive. But, under present circum¬ government workers, even cheap
LOUISVILLE
ing when July was nearly gone. »
personal attacks at the President.
stances, we dare not disarm.
In other words, the "business¬
All of these things marked Sen¬
Are we not, however, faced with
like" Republicans let the govern¬
ator Taft's approach to the sub¬
American Air Filter
the unpleasant fact that, just as
ment
departments
dangle
for
France spent 20 years and billions ject.,
American Turf Ass'n
The simple fact is that the 80th nearly a month with no idea of
of francs strengthening the Magihow to gear their operations. Th§
Consider H. Willett
not Line, only to see it collapse Congress did not complete its own
Republican Congress even got so
narrow and selfish legislative pro¬
Girdler Corporation
in one day, ^we may spend $10 or
tangled in its own red tape that
y.
Murphy Chair Company
$15 billion a year for several gram.'' "
its own employees had to wait for
Taft said the Republicans
years on our army and navy, and
their pay.
Reliance Varnish Co.
Nothing could have
needed time.
yet have our nation destroyed in
been
more
disruptive
to
the
They had plenty of time to play
a single night in a terrific atomic
orderly operation of the govern¬
politics with the tax bill and run
holocaust?
ment than this fiscal
stumbling
Congress

Exchanges and other leading exchanges
6

destroy

would

that

and

and I pray

,

BALTIMORE

Members New

duce

-

enslave the indi¬
vidual. The choice is ours to make
soul

the

globe is

be

follow us.

to

i

{

Democratic

enslavement and national

have inher¬

they also belong to the
generations yet unborn, which are

ited,

and

sound

that

and benefits

the

to

turn

]

As a reply and refutation to Senator Robert A. Taft's address atj
Columbus, Ohio, on July 31, extolling the accomplishments of the
80th Congress,
<&—
ments.
This is the responsibility
controlled
by
of the Senate under the Constitu*
the
Repub¬
tion and marks another of thQ
licans (printed

subject today "Whither

I have chosen for my

that stage

i

Republican leader's claims to accomplishments are unreal.
Says time was wasted on "soak-the-poor" tax bill and hits TaftHartley Labor Act.
V/

tee, says

Congressional leader outlines problem of taxes and public debt and decries President
Tax Reduction Bill. Attacks present tax system as destroying private incentive and

business

80th Congress

on

Executive Director of National Democratic Commit-

Gael Sullivan,

Representative from Minnesota

U. S.

Thursday, August 7,1947

FINANCIAL CHRONICLE

THE COMMERCIAL &

(522)

INVESTMENT

SECURITIES

Preferred
509

street

olive

Traded in Round Lots

St. Louis LMo,

Does it not follow

that

an essen¬

prerequisite to any sound fi¬
nancial program for the future is
the establishment of effective in¬
ternational control of armaments,

tial

it

twice.

through

That

might well have

that

took

time

been

applied to vital matters

such

and bumbling.

,

Republican speeches de¬
fending the 80th Congress include
an attack on the President for his
use
of the veto.
No account is
taken-of-the fact that the Presi^
dent's veto power is as much &
All

raising the floor
increas¬
ing the benefits and broadening
and especially of atomic energy?
If our enemies, by < persistent the base of social security.
The time wasted on the soakstalling, can succeed in postponing
part of the legislative process as
for two or three years action in the-poor tax bill might well have
the House of Representatives or
been employed in handling vet¬
this direction, it is not improbable
the Senate itself.
y
erans' problems or in giving the
that few of those present will have
It is as much his duty to dis¬
people of the country a better
any occasion to worry about ter¬
approve bad bills as it is to ap¬
restrial affairs, and the Govern¬ rent control bill rather than the
prove good ones.
15%
gun-point rent rise they
ment at Washington will be heard
Yet
Republicans continue td
of only in history books—if the actually received.
prate about the veto. .
.
/
Taft made a great point out of
reading of such books is still per¬
But in the final analysis the
the passage of the Taft-Hartley
mitted.
record of the Congress is in its
labor bill.' He failed to meniton
failures to act. Here are the things
If, regardless of immediate ex¬
that he admitted on the floor of
they did not do:
:
penses, we were wise enough to
the Senate that he did not write
use our present preponderance of
They did nothing to curb in¬
a word of the bill which bears his
flationary prices.
'
) V;
power
to force the immediate
name.
y
establishment
of
international
They did nothing on flood con¬
There was no reference'to the
control of armaments, our future
trol except with a patchwork pro¬
confusion that
exists over this
expenditures for defense might
gram.
"■ •' y
law as to whether the very first
be safely cut to a fraction of the
Nothing on minimum wages.
•
major labor contract signed after
Nothing to broaden social se¬
present budgetary allowance for
its. passage was legal or not;
I curity.
that purpbse. Then, we could slash
yy;'
.'v
refer to the soft coal contract and
Nothing to train the youth of
taxes vigorously without endan¬
to the fact that the co-authors of
the nation to defend our nation, i
gering the national safety.
fhe act disagreed as to whether
Nothing to improve the * educa¬
it was legal.
Financing the Public Debt
tional level of the nation.
Recently Taft admitted that the
Under such circumstances, the
Nothing on a Department of
portion of the bill dealing with Welfare.
most troublesome item in the bud¬
as

housing,

or

under minimum wages, or

~

Walter J. Connolly & Co.,
24 Federal

Inc.

Louis Stock

Members St.

Exchange

Street, Boston 10
Tele. BS 128

Tel. Hubbard 3790

SPOKANE. WASH.

DES MOINES

NORTHWEST MINING

WHEELOCK & CUMMINS

SECURITIES

.

INCORPORATED

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or

Continuing Interest in

of

Quotes call TWX Sp-43
Exchange

A.M.,

Iowa Power & Light Co.
3.30%

Preferred

Pac.

fron(i
Std.

other hours.

on

Floor

10:45 to 11:30
Time: Sp-82 at
* '

Publishing Co.

Common

Stock

CORPORATION
Members Standard Stock
of

Brokers

BUILDING

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9,

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B»l' T*le. DM 184




suggested, and I might say
Ways and Means Com¬
mittee has given study to the sub¬
been

Stock

STANDARD SECURITIES

Meredith

would be payments on the
public debt, both principal and
interest. In this connection it has
get

-

Peyton

Exchange

Spokane

Dealers

-

Underwriters

Building,

Spokane

Branches at

Kellogg, Idaho and Yakima, Wn.

that

the

ject of extending excise taxes, and
that is something of interest to
you

War excise rates must,
in cases of liquor, beer
tobacco, be restored to pre-

all.

except
and

(Continued on page 32)

political

"expenditures" of unions
freedom

Nothing to improve the

unnecessarily limited the

care

of the press.

the

Following passage of
Hartley Law over

ident Truman
and

.

the Taft-

the veto, Pres¬

canvassed the field

followers hamstrung

by running out on

to

The

lation

their responsi¬

bility to consider the
and confirm or

despite
startling number
of our young men
and women
were revealed as unfit to defend
the nation during the war yearsi
fact

Taft and his
the program

appointed outstanding men

administer the law.

nominations
appoint-

reject the

medical

of all of the people,

that

a

President called for legis¬
to

for action.

these problems.
submitted programg

meet

The President

But nothing

happened.

(Continued on page 35)

y

Volume 166

Number 4618

THE COMMERCIAL &
FINANCIAL

Washington
Ahead of the News

By RUSSELL A.
STEVENSON*
Dean, School of Business

controls of SEC

as

lative investment.

commission to get at
the commission did not find in ac¬

given subject and

a

a

business, and

This was quite a
jolt in the practice of appointing commissions and it looked for awhile
as if it might be discontinued to the
great disappointment of commis¬
sion lovers, that quite extensive group of men who
have either re-

tired
who

some

affairs

to

"serve
and

who

just
doing it.

love

These

tory
ter

who

or a let¬
of appre¬

ciation

the

the

their

Carlisle

to

of

Bargeron

the

one's

service

naturally

adds

to

to

who upsets
the applecart, who reports that he
didn't find conditions the way the

President thought they were,
all.

He

serves

on

no

more

to

buttress

the

President's

kept pretty much always

on

go.
♦

Mr.

was

commission that

a

sought to

upset his policy.
This
the famous Wickersham Com¬
mission to investigate prohibition.
was

Mr.

Hoover

convinced there

was

another victory in adherence

was

the

with

The

cause.

econ¬

of

means

us

sup¬

important

bad

a

idea

whose

persons

are

they write things into these
reports so plausibly that the hasty
reading which the sponsor must
of necessity
give, doesn't detect
them.

a

Wickersham

ever

served

on

have

now

commission
headed by Mr. W. Averill Harria

man, the Secretary of

study how

stance

is

whether

hidden

ideas

flow

into

the propoganda stream with

the

authority

man.' "

Not

much

left

we

Commerce,

of

and

sub¬

our

man

of

the

important
'

...

'
,

determine

continue to give
to Europe. But one would
have to
be pretty naive in politics to have
any doubt as to what the commis¬
sion's findings will be.
can

detect

may

of

these
ideas but not
being versed in the
be put,

one

to

use

which

will

is persuaded by the bright

young men that it is just

friend

lot of

grumbling in this country,
informed
warnings,

and

of

mine has

that

we

were

endangering

our

economy. The purpose of the
commission is to still these
grum¬

blings and warnings,: to find after
long and. laborious- efforts, that
while

we," of course, must be prac¬
tical in this business and

careful,
giving

orderly continuation

holds out
a

A.

an

background, who give
to the Republican cause,

have
indirectly
advanced
the
Leftist cause through the
employ¬
ment

of

giving
they

bright young, men and
them free rein.
Maybe

sponsor them

on

the air. The

list would prove shocking to
many
our best
citizens,

of

!
Edward E. Mathews Adds
■

Special to

The

T—

Financial

nu¬

hear¬

the
Re¬

cently the De¬
partment of Commerce establishOffice of

der

the

Small Business

direct

un¬

supervision of the

Undersecretary. This

either

the

pressure
scene

or

economic

In

of

emergence

a

new

group on the political
the presence of a real

problem.

much

of

M.

Warren

have

been

been added to the staff of
Edward
E.

Mathews

Co., 53 State Street.

the

discussion

on

this

subject there appears to be
implication that there is a con¬

an

flict

of

interest

large-^cale
small

.

the

form

largeness

there

between

enterprise

business

takes
of

unit,

of

and

though

sinister
particular

some

by

the

consolida¬

mergers,

tions, and acquisitions that have
tended

to

operators.

dency to

eliminate
There is

a

smal
natural ten¬
many

that this consti¬

assume

inevitable movement to¬
the concentration of
eco¬

an

nomic power
through the elimina¬
tion of all of the small

indepen¬

dent business units.
mains that
in

size

of

in

spite

many

The fact

re¬

of the growth

corporations the
concerns

a

matter of

fact, there is

no

conflict of interest
between large

the

larger

highly competitive industrial
It is also
important to large

avenues of
entry
business world be
kept
individuals operating on a
small scale, just as a
means for
preserving the private enterprise
system.

into

the

open to

It is
of

true, of

course, that points
of
interest do arise

conflict

monopolistic practices
employed to gain control of
tain markets.
which
some

in

The

the

of

enjoys

unless

the

seems

world

that

we

is

to

prices

he

as

similar actions

of

Unfair practices

contrary

to

the

they

either

a

large

public

is

large

corporations.

are

interest

undertaken

are

on

for

smallness'

It would be unfortu¬

embark

involving the
funds

upon

use

of

a

program,

government

merely

to
keep a large
number of firms in
business that
would

normally fall by the way¬
though similar tactics

side,

even

have

been

used to placate
other economic
groups.

This does
should close
culties

not
our

that

some

>

j

that

mean

we

eyes to the diffi¬

confront

Those who stimulate friction

or

It

the

to expand his
operations.
real small-business

the

small

en¬

This is

problem,

and it should

be considered in Its
setting within the pattern of the
economic structure as a
whole. It
is highly essential to

keep

the

paths open for new business ven¬
tures in order to assure the
heal¬

thy development of the
economy.
If

these

paths

have

become

clogged, the remedy is to remove
the impediments if
possible rather
than to offer subsidies or
bonuses.
The problems. that
appear to be

particularly pressing
fare

of

three

small scale.

or

to

small

on

the wel¬

business fall under

broad

headings: finance,
taxation, and management.
jj
'

corporate

enterprise

dominates

some

that

today

segments of

the

industrial economy and the
smal

enterprise. On the
contrary, there
community of inter¬

attempt

to

set

up

programs

small business in opposition

at the expense

doing

are

a

to,

for

of, large enterprise
disservice

both

whole. Even the smallest

it

to* the

small business and to- the
economy
as a

n.

;

■

The small enterpriser does find

or

extremely
capital

launch

con¬

a

difficult
funds

new

venture

(Continued

on

to

secure

to

necessary
or

page

to

ex-

31)

Alumnus," Quarterly Review
Number, Summer 1947, published

by the Alumni Association of the

We

University of Michigan.

are

MR.

We

announce

pleased

to announce that

Senator

Vandenberg

don't

was one of

becoming
some

The

uneasy.

So

"authoritative"

has become

commission's

All

it

be

a

such

lot of

reports do.

mostly

thinking and

the

But

work, the

the prejudices of the




JOINED

OUR

*

s

a

'

general partner of this firm

j
»

r;

ORGANIZATION
Established 1916

Members Principal Stock

report,

important

BRADLEY

MOFFAT, Jr.

he

support.

It will bear
names.

DANIEL
HAS

O.

I

sup¬

when it comes, is
expected to pro¬
vide this "authoritative"

MAHLON

that

for the atomic bomb

those who asked for this
study.
He feels his international
position

will

is

area

much concerned with the
prac¬
of
the
small
dealer
who

the

nate

in¬

tice

with

enterprise

sake alone.

and

the consumers

market

inflated

small

has* become

to charge what the traffic
will bear.
The consumer is- just

charges

a

creasingly hard for the small
terpriser to start a business

prone

as

suggested, are
palliatives.
They would
costly method of preservihg

merely
be

much

monopolistic position in

a

programs, all of

been

of

are;
by no
to
big business.
country store that

restricted

have

businessman.

practices

Even the small

which

small

forced to pay unreason¬
These monopolistic

limited

means

its

not

are

efficiency. These

the

prices.

unfair

or

to

concern

are

able

properly

Their actions

objectionable to
competitor
but
are

government loans to con¬
that fail to meet the stand¬

of

of

destroy us. The world will bd
destroyed if we don't save Europe.

port.

are

only

who

over

commodities
market through

questionable practice

greater

in

have

certaip

national

condemned.

cer¬

situations

corporations
substantial
control

sales

are

of

banks or private
loaning
agencies, special tax concessions,
or
outright grants of public funds
will only result in
subsidizing in¬

field.

to

be<

sion

in

business that the

pro¬

The small business
problem, if
there is one, cannot be
solved by
special-favor legislation.
Exten¬

business

particuarly true

Any

Congress during the past few
type.

ards

threat to us, and any^
continuation of giving is

collapse. ~*It
haveHto wait

to

to

ically

than the
This is

so¬

years are of this

cerns

whether

total number of
business
has not decreased.

As

con¬

can produce
parts or render
specialized services more econom¬

the

mere smallness.
This point of view has been
stim¬
ulated
in
recent
years

of

the

a

is

impedes such growth or
subsidizes small business
just to
keep it small is wasteful.
Some
of the
proposals for aid to small
business that have been submitted

de¬

in

It

to

gram that

producers.

often

the

something

about bigness and
virtue attached to

number

large

retailer

efficiently.

desirable

encourage
growth to a size that will
enable
a concern to
produce at the lowest
cost per unit of
output.

purchase

workers

more

cially

concern

gained

indictment

an

tions

siderable part of his
custom.
The large
business units like¬
wise have an interest
in the small
Dusiness segment of the
economy.
For one reason the small

the

j Often this

such—as

as

were

small

the

upon

to

no

necessary

wanted

developed.

grow, and as it
does it usually performs its
func¬

market

no

when

BOSTON, MASS.—Herbert N. est. The small business has a very
Babb, Paul J. Hoar, Josiah J.
*
Reprinted from "The Michigan
Kirby, Robert F.
Snyder, and
Joseph

have

industrial plants for

can.

done in

was

part to offset the criticism that
the Department had failed to
give
adequate attention to this segment
of the
economy. All of this pop¬
ular concern for the welfare
of
the small business unit
indicates

is a. definite

Chronicle

arge

ings
on
subject.

Stevenson

the

ward

made

com¬

have held

R.

Similarly, the
pends

that

merous

im¬

no

servative

some

own

mittees

tutes

exhaustive study of the extent to
which
influential men
of
con¬

freely

would

if it were not for
the

desires

cern

large industrial concerns,
for they constitute the bulk of
its
market, either directly or indi¬
rectly. Many of the small manu¬

small

business

simple

a

statement of fact and has
plications.
A

it

was

necessary to appoint this
commission because there was a

"

infrequently the important

propaganda

a

Presidential commission again.
We

These

be

Exchanges

Chicago Board of Trade

Wm. E. Pollock &
Co., Inc.
20

PINE STREET,

Telephone HAnover 2-8244

NEW YORK 5,

%

*———

prosperity

assembly
plants
that
parts from the spiall

lishing

economic

Wicker¬

report of his own.
It
caused him considerable
political
grief.
I do not recall that Mr.

way

tangible

to

_

Dry

report, instead, gave high re¬
joicing to the West. Mr. Hoover
sought to overcome this by blan¬
keting
the
commission's
study

an

a

writers,

always appearing on
these profound governmental and

sham

It

We refer

studies,
to
overhaul
their stables; at least, to take in¬
ventory and find out just what
they have. Because some of the
the bright
young men are quite clever

Hoover, incidentally,

who appointed

to

horses.

race

it wouldn't be

our

names

the

the

facturers

apparent

need by estab¬

much

and

It

to

pretty

lot of the rest of

But

is to name men of the opposition
party so as to get his influence in
party affairs behind your policy.
In this light Herbert Hoover
is

I

and

belong

to

for

in

at all

this

Washington

as

no

of

stake

recognized

know the bright
the stables to

port.

already formulated policy. A trick

!

we

omists and

facts,

Hous'es

been

am

with

This is to say that the
appoint¬
ment of Presidential commissions
is intended, not to get new

but

have

men

problems of small

must

>—

of

for

Both

——

definite

their

promises

which

employment

;

in

aids.

of

not suggesting that this
sizeable industry should be elimi¬
nated because it affords
profitable

com¬

of <S>—

one

benefici¬

g overnment

bright

work

to

Barney Baruch's man,
somebody else's man, etc.
I

at

missions.

know

one

to

to any man

woe

men

they

we

of

the

Around

which
as

obituary.

But

important

young

And mention

do

commissions

and New York

children

and to their friends.

stables

who

men

appointed.

they

show

can

know

many

these

President

as

aries

personal acquaint¬
of at least 20 men

my

risk capital

specu¬

,

Congress have

maintain

young

from

which

I

ances

congratula¬

a

ness

the

live.

Among

always get

ers

to

come

serv¬

not answer to

j

scores

discouraging individual

currently directed to the plight of the small business
enterpriser:
organizations of the propaganda type
urging upon the public various
business. Candidates for
public office are prone to include small busi¬

reforms to aid small

This brings us to an
interesting
phase of American life, right im¬
portant, too, in the high pressure
propaganda
in which we have

the

President"

and

concerns

method to stimulate flow of
private funds for risk ventures

are numerous

do the work.

their

range

of Michigan

legislation, Dr. Stevenson

Much attention is

There

bright young men whom the im¬
portant names have employed to

or
ar¬

7

I.

from

can

be solved by
special favor

cannot

hindering capital acquisition by small
Says government guaranteed loans are

cordance with the President's preconceived ideas.

business,

Administration, University

Asserting the small business problem

By CARLISLE BARGERON
Once upon a time a President appointed

(523)

The Problem of Small
Business

From

the facts of

CHRONICLE

N. Y.

10 South La Salle

Indianapolis

Teletype NY 1-2846
August 1,

1947

Street, Chicago 3
Rockford

■

i

'

■

8

Chicago Transit Bonds

Dealer-Broker Investment

Offered to Investors

Recommendations and Literature

Conditional offer made by Harris,

Boston-Blyth Syndicate
Harris, Hall & Co., Inc.; The
Utilities Earnings Make Unexpectedly Good Showing
First
Boston
Corporation,
and
Early this year some utility analysts were a little skeptical or Blyth & Co., Inc., head a nation¬
pessimistic regarding the earnings outlook for 1947; they thought that wide group of approximately 200
the uptrend in revenues might be checked by an anticipated business
investment banking houses which
recession, and that increased costs would cut into net earnings.
This conditionally is offering to the
has not proved true thus far, however, insofar as most electric and
public $105,000,000 principal
natural gas companies are concerned—although the telephone, transit amount of Chicago Transit Au¬
and manufactured gas companies^
thority Revenue Bonds, series of
Hall-First

utilities

electric

made

unex¬

an

pectedly good showing due in part
to tax adjustments.
Hence it was
natural
for
comparisons to
be
slightly adverse in the first three
months this year.
However, the

and

May
were much better, as indicated by
the following table of .net income
(millions of dollars) for all Class
for

comparisons

April

A and B electric utilities:
.Percent Change
Incr.

1947

$67.4

Jan.

1946

$68.0

Deer.

.8%

__

64.7

Mar.

68.3

58.6

Feb.

5.3

59.3

1.2

Apr.

57.0
55.3

47.6

Total

the

of

showing

ter

utilities, net income showing a
gain of 23.8%.
For the twelve
months ended May there was a
gain of 21% compared with only
7% for the electric companies. In

income of the
companies was 9% over last
year, but in the month of April
there was a remarkable gain of

the first quarter net

Ol

factors

important
amount

spent

the

in

income
is

utilities

the

of

account

for

fuel.

and

the

In

Jan¬

this was nearly $45,000,000
compared- with
$31,000,000 last
year.
In March fuel costs were
57% over last year but in April
only 42% and in May 31%. Some
of this improvement was probably
due to greater use of hydro-elec¬
tric power.
The recent jump in
fuel costs due to higher wages is

uary,

conditions

weather

course

important role in natural
earnings, largely determining
volume of house-heating. The

play

variable

the

an

April gain resulted from an in¬
crease
in gross of 30%, and the

23.8%

of

increase

May

panied

accom¬

14.9%.

gain of

revenue

a

growth of the gas com¬
panies appears likely to continue,
since new pipelines are being con¬

The rapid

structed

tional

planned

and

addi¬

will be brought from

gas

southern

and

and

fields

midwest

to

eastern and northern custo¬

serve

who

mers

are

switching

from

Since the average

coal, oil, and manufactured gas.
Thus the natural gas companies,

would

with the low cost of their

not

yet

in the figures.
utility coal pile
about three months,

reflected
last

product

comparatively
small
definitely "out
in the utility race. The

their

and

higher costs won't be fully in evi¬
dence until around the latter part

labor expense, are

of the year.

in front"

In

the

month

of

sales of

May

electricity gained 16.8% and rev¬
enues 12.8%.
Salaries and wages
15.1%

higher and miscel¬
laneous expenses 14.2%, while de¬
preciation gained only 5% and
taxes
16.4%.
Operating income
from
electric
operations gained
only 1.2% and other utility oper¬
ating income (largely from man¬
ufactured gas)
was down
8.8%.
However, miscellaneous income
was
nearly
double
last
year's
figure and income deductions de¬
were

clined
tial

18.2%.

Thus

the

electric

gain in
earnings
appeared due to

(Special

marked

to

The

Financial

risking

Chronicle)

CALIF,

FRANCISCO,

SAN

has

Robinson

S.

Thomas

been

added to the staff of Bacon &

Co.,

Street, members
San Francisco and Los An¬

256 Montgomery

of the

With F. C. Shaughnejssy
Special

SAN

decline

"other income deductions"

in

(espe-

BOUCHT

-

to

The

Financial

Chronicle

FRANCISCO,

CALIF.

Street, members of the San Fran¬
cisco Stock Exchange.

SOLD

-

QUOTED

West Virginia Water Service

Federal Water & Gas

Puget Sound Power & Light

^Indiana Gas & Water

Public Service cf Indiana

-

Frank
Shaughnessy & Co., Ill Sutter

Margaret Downey is with
C.

Southwestern Public Service

*Prospectus

on

It is understood that the
to

send

Automobile

situation

outlook—Hirsch

Street, New York

25 Broad

Co.,

&

Industries

Dresser

Industry—Study of

and

pleased

firms mentioned will he

parties the following literature:

interested

—

Memoran¬

57 Wil¬

dum—Otto Fuerst & Co.,

Street, New York 5, N. Y.

liam

4, N. Y.

Co.—Circular—Ward

Fairbanks
Aviation

offering comprises $40,-

Bulletin

Containing

—

York

Co., 120 Broadway, New

&

earnings, news, prices, comment, 5, N. Y.
000.000 of serial bonds which are
Also available are memoranda
and general market opinion—John
priced from 104 for 3V4S due July
on Taylor Wharton Iron &
H. Lewis & Co., 14 Wall Street,
Steel;
1, 1953, to 102 for 3%s maturing
Purolator Products; Upson Corp.;
New York 5, N. Y.
July ~1;''"1972. The yields for the
United Artists; Vacuum Concrete;
serial
bonds
will
range
from
Air
Flow;
Lanova
Earnings Comparison for second Fleetwood
2.50% to 3.50%.
The remaining
Lawrence
Portland Ce¬
quarter of 1947 of 19 New York Corp.;
$65,0P0,000, comprising 3%%
City Bank Stocks — Circular — ment; Sterling Motors; Diebold;
term bonds due July 1, 1978, are
Laird, Bissell & Meeds, 120 Broad¬ Lamson & Sessions Co.
priced at 103, to yield 3.59% to
way, New York 5, N. Y.
maturity. In

the opinion of the
King & Dawson,
bonds are exempt from all

these

taxes.

present Federal income

Houston Banks and Trust Cos.—
Mid-Year

a

thority to take up all of the bonds
if at least
80% of the total is
for by investors. Un¬

subscribed
less

Analytical Comparison

V. Christie & Co., First Na¬

—B.

syndicate has entered into tional
contract with the Transit Au¬ Texas.

The

Bank

New York.

Also

Building, Houston 2,

Insurance and Bank Stock Eval¬

80

Analysis—Seligman, Lubetkin &
Co., 41 Broad Street, New York 4,

analyses of

available are

Company "B," Wellman
Engineering Co., Tennessee Prod¬
ucts & Chemical.
Osgood

uator—

extended by mutual consent,

Comparative

insurance

and

38

Analysis of

Broadway,

Co.—Brief
Co., 120
New York 5, N. Y.

National

Terminal Corp.—Mem¬

Sessions

&

Lamson

banks—But¬

agreement will
expire on ler-Huff & Co., 210 West Seventh
September 12, if by that time Street, Los Angeles, Calif.
the banking
group has not
re¬
ceived
orders for 80%
of the
Price Earnings Ratios and Yields

memorandum—Ward

total.

orandum for dealers

the

Sale of the bonds

will mark

an

important step in the program of
unification
of
Chicago's
local

transportation facilities under
municipal ownership. The prop¬
erties involved are Chicago Sur¬
face
Lines
and
Chicago Rapid

Public

Utility Common
Stocks—Stroud & Co., Inc., 123
South Broad Street, Philadelphia
123

on

the

sale

of

only—Adams

Adams Street.

Co., 105 West
Chicago 3, 111.
&

available

Also

is

valuation

a

New England

Public Service Co.

appraisal of Railroad Equip¬ —Analysis—Ira Haupt & Co., Ill
ment
Certificates
and
City
of Broadway, New York 6, Y. Y.

and

Philadelphia Bonds.

Corporation—Memoran¬
Co., 1 Wall

Oliver

from

&

9, Pa.

Transit System.
Proceeds

Corp.—

Motors

Graham-Paige

attorneys, Wood,

the

Railroad

Developments

—

Cur¬

dum—A. M. Kidder &

as follows: rent action in the field during the Street, New York 5, N. Y.
*
the purchase price week—Vilas & Hickey, 49 Wall
Public National Bank & Trust
of the Surface Lines' properties; Street, New York 5, N. Y.
Also available is a memorandum Co.—Analysis—C. E. Unterberg &
$12,162,500 to- purchase properties
of
the
Rapid Transit
System; on New York, New Haven & Co., 61 Broadway, New York 6.
N. Y.
$3,000.000-for cash working funds; Hartford Railroad.
Also available are analyses on
approximately
$13,000,000
for
modernization of the lines, and an
Security and Industry Survey— Stern & Stern Textile, Inc., and

bonds

will be applied

$75,000,000

as

undetermined amount for adjust¬

An analytical guide for investors
paid to the trustees (issued quarterly)—Merrill Lynch,
of both companies upon consum¬ Pierce, Fenner & Beane, 70 Pine
mation of the purchases.
Street, New York 5, N. Y.
*
*
*
The Authority has
adopted
ments

to

Rome Cable

Corp.

be

Simmons

Company—Analysis—

Co., 60 Beaver Street,
Y.
Also available is an analysis of
Commonwealth & Southern Cor¬

H. Hentz &

New York 4, N.

Arden Farms Co. — Memoran¬
comprehensive program for mod¬
ernizing the system to be ac¬ dum—New York Hanseatic Corp.,
quired. The program, scheduled 120 Broadway, New York 5, N. Y. poration and the Fortnightly In¬
Letter
discussing the
Also available is a memoran¬ vestment
for completion in 1955, contem¬
Rail situation.
plates the expenditure of $152,- dum on Metal & Thermit. •

of which $77,624,300 is
Artkraft Manufacturing Corp.—
applicable to the Surface Lines
and
$74,750,000
to
the Rapid Descriptive and illustrated bro¬
chure—Comstock & Co., 231 South
Transit System.
La Salle Street, Chicago 4, 111.
Chicago Transit Authority was
374,300,

geles Stock Exchanges.

combi¬

of circumstances—a good
showing,
substantial
im¬
provement in miscellaneous in¬
a

also

With Bacon & Co.

the

for
a

fuel

and

are

good showing thus
far. though next year they may
find the going a little rougher.

nation

come

utilities

reasonably

a

substan¬

month

1947. The

gas

58%.

2.3%

most

companies for the
made an even bet¬
than the electrical

gas

month of May

gas

One

B

figures for Class A and

The

natural

16.1

$296.1

$303.0

unlikely

.

7.7%

52.9

May

seems

that an equally
good showing can be made in the
months immediately following.

rather

of 1946 the

In the first quarter

It

amortization).

cially

have received a decided set-back,

Thursday, August 7, 1947

FINANCIAL CHRONICLE

THE COMMERCIAL &

(524)

Request

Utica & Mohawk
Inc.

—

Circular

—

Cotton Mills,
Mohawk Val¬

ley Investing Co., Inc.,
esee Street, Utica 2, N.

238 GeftY.

of the General
Webster Chicago Corporation—
Cleveland Cliffs Iron Company
new
company- Analysis and Outlookh-Also copy
approved April 2, 1945, "for the —Analysis of
of letter mailed to stockholders by
Marshall & Co., 647
purpose of acquiring, construct¬ Maxwell,
South Spring Street, Los Angeles the company—Brailsford & Co.,
ing, owning, operating and main
208 South La Salle Street, Chi¬
14, Calif.
taining
for
public
services
;
cago 4, 111.
transportation system in the met¬
Colorado Milling & Elevator Co.
ropolitan area of Cook County."
Now With White, Weld
The Act was adopted by the City —Memorandum — Buckley Bros.,
Special to The Financial Chronicle
of Chicago at an election held on
1420 Walnut Street, Philadelphia
BOSTON,
MASS. — Philip M.
June 4, 1945. The governing and 2, Pa.

created by an Act

Assembly of the State of Illinois,

body

administrative
thority

is

the

of the

Chicago

Au¬

Transit

Also

.

available

Eastern

on

are

memoranda
and

Corporation

Southern Production Co.

(Continued on page 43)

joined the staff of
& Co., Ill Devon¬

Reynold has
White, Weld
shire Street.

PUBLIC UTILITY PREFERRED STOCKS

Artkraft

^Birmingham Electric Company

Company
Illinois Electric and Gas Company
Illinois Public Service Company
Power and Light Company
and Michigan Electric Company

*Central Arizona Light and Power

Paine, Webber, Jackson & Curtis
i

Established

Central
^Central

1879

Central
Indiana

Manufacturing Corp.
Lima, Ohio
COMMON STOCK

Iowa Electric Company.

of
Maytag
Home
Commercial
Beverage
&
Refrigerators, Liquid Vending
Machines
and Outdoor Advertising

Manufacturers

Light and Power Company
Minnesota Power and Light Company
Montana Dakota Utilities Company
Northern Indiana Public Service Company

Iowa Electric

Chicago Railway First 5s, 1927

Northern

Chicago City Rails 5s, 1927

Edison

sales

estabiishing

new

and
earnings
records.

are

*

Gilbert J. Postley & Co.

Approximate price
Descriptive

Prospectus

New York

Boston

brochure

dealers only

Comstock &

request

Incorporated
Chicago

illustrated

Corporation

upon

AjCAUXNWCOMESNY

Wire to Chicago

and

available to

Company

United Public Utilities




„

Current

Service Company
Public Service Company of Indiana, Inc.
Sioux City Gas and Electric Company
*
Southwestern. Public Service Company
*Toledo

Direct

Signs.

States Power Company

*Northwestern Public

Calumet & South Chicago 5s, 1927

29 BROADWAY, NEW YORK 6, N. Y.

Freezers,

Food

Milwaukee

Minneapolis

Omaha

Co.

CHICAGO 4
231 S. La Salle

St.

Teletype

Dearborn 1501
CG 955

Volume 166

Number 4618

THE COMMERCIAL &
FINANCIAL CHRONICLE

(525)

Attlee Reveals Proposals to
Avert Crisis
Tells

Commons

efforts

be

will

made

to

of

terms

ease

Construction in Mid-1947
By THOMAS S.
HOLDEN

President,

control.

Aug. 6, Clement Attlee, Prime Minister of the Labor Govern¬
Britain, following his submission to Parliament on the

ment of Great

previous
of

day

bill

a

^

to

that

the

give the Brit-

"shortcut

is h

merely

Govern¬

hensive power
all

over

industries,

to

adjustments have brought

to

as

Socialism," but

a

it

clear

designed

that

only

the

to

powers

meet

the

present crisis.

(from

J

No¬

others.

the

was

re¬

nation,
the

told

House

First Boston Offers

of

by severe ma¬

Commons that
drastic

will

ures

Shares of Negae Com.

meas¬

taken

be

The

for

First Boston

clement

the present

group of investment
which publicly offered

AttIee

'

He

essential

stated

and

there

be

re¬

$8

that the

further

stock,

share. The issue

per

sale at competitive

on

reduced

be

ing industries,

par value

was

placed

bidding

on

Aug. 4 by General Public Utilities
Corp. and was awarded to the

re¬

group on a bid of $11.01 6/10 per
share.

many

Representing the complete

Thomas

S.

Holden

of

labor

costs,

trols,

and

price and wage con¬
reinstatement of gov¬

ernment controls over construction

in the supposed interest of veter¬
ans'

housing.

Abnormal

phases of the

version market induced

recon¬

number

a

work

started

eastern states now
appear
show a moderate

in

37

likely to

decline for the
entire year 1947 as
compared with
1946.
Department
of

Commerce
holdings of GPU in the Associa¬ of
excess construction
costs over overall
estimates,
representing
tion, the shares being offered were and above
such cost increases as work in place,
may show a mod¬
Loan
Agreement, under which acquired through the exercise of were occasioned
by higher mate¬ erate increase for the year; workGreat Britain received a credit rights
under
the
Association's rial prices and
higher hourly wage in-place figures would
of $3,750,000,000 on condition that plan of
include
recapitalization. Proceeds rates in the construction trades. much
activity that was started in
Britain would resume the con¬ from this
financing will be used Excess costs arose from such fac¬ 1946; the
year-end carryover of
vertibility of the pound sterling by GPU to reduce by $3,000,000, a tors as
procurement difficulties, uncompleted projects was
unusu¬
and would relinquish its discrim¬ $12,700,000 bank loan.
black-market prices, irregular de¬ ally large.
inations against U. S. imports.
Capitalization of the Associa¬
liveries, frequent stops and starts
These
restrictions, says Mr. Attlee, tion, upon consummation of the and stretched-out
Comparisons With 1920
completion time
has aggregated the British eco¬ recent
refinancing, consists of on projects, overtime pay, reduced
While the current
nomic crisis,
adjustment
and have brought $22,425,000
of
20-year
sinking labor efficiency, and the then pre¬ phase of construction
about a more rapid exhaustion of fund collateral trust
industry re¬
2%% bonds,
vailing system of cost-plus-fixed- covery corresponds to the situa¬
the proceeds of the American loan series
A, due 1967; 77,625 shares of fee contracts which
tion the industry faced in
arose during
than had been
1920,
contemplated. He 41/2% cumulative convertible
Mr. Attlee spoke regarding the
of
the
Anglo-American

terms

pre¬

therefore undertaking

was

tiations

ferred stock and
1,246,011
of $8 par common.

nego¬

with

Secretary of State
Marshall to have the terms
eased,
revealed that Secretary has

plan of recapitaliza¬
tion, the Association retired by
redemption all its outstanding de¬

agreed to these discussions. "We
have been driven to
pay dollars or
convertible

plies

and

sterling for
the

bentures totaling

our

sup¬

through

of

con¬

tion offers

problem

rather

than

one

arising

more

and

subscrip¬

to holders of its

$5.50
replaced 95,847
such preferred with
1,246,011 shares of new common.

vertibility is really a problem of preferred
the
world
shortage of dollars, shares of

particularly from the

$34,998,500, and

exchange
stock,

loan agree¬

American Stores Go.

Commons.

Following Mr. Attlee's address,
Secretary of State Marshall an¬
nounced at

he

had

news

a

agreed

conference that

to

a

conference

with the British Government with
a view
to relaxing provisions of
the Anglo-American Loan

Agree¬

ment, but a definite date had not
yet been set for the beginning of
the

discussions.

He

added

that

some modification in the terms of
the loan could be effected without

The

American

Stores

Lehman

concluded

CO.,

Brothers,

has

arrangements
with
Life Insurance Co.

Metropolitan
for

a

$15,000,000 loan.

$7,000,000 has
2%%
be

been

interest.

available

at

Aug. 1, 1948 at
3%.

Of this sum,

borrowed

The

at

balance will

time up to
interest rate of

any

an

The loan will be due

Aug. 1,
referring the matter to Congress,
1967,
subject
to
a
but Secretary of
repayment
Treasury Snyder,
schedule
at another news
beginning Aug. 1, 1952
conference, indi¬ and
that

cated

to

the

further concessions

no

British

without

could

having

be

made

Congressional

approval.
The

Britain's

measure

to

presented
to
August 5 by Prime

on

Minister proposes to promote the

productivity
merce

of

industry,
com¬
agricultural; foster and

and

direct exports and reduce imports
on
many classes of commodities
from all

or

any

countries, and thus

redress.the balance of trade; and
generally that the whole1

assure

resources

of

the

available for

community
and

use

are

are
used in

a manner best
calculated to serv¬
ice the interests of the
community.

The

give
power

proposed measure would
the
British
Government

to direct labor to specific
to prevent workers from

jobs,
leaving their jobs in essential in¬
dustries, and would permit the
government
ment

to

individual

wartime.

The

direct

of

powers

Mr.

and

industries

dure until 1950. It
members

William
Park,
President
of
American Stores, said the
purpose

are

regi¬
as

to

in
en¬

denied by
Attlee's Cabinet
was




the

control

economy

Parliament

amounting to 4y2% annually
principal sum borrowed.

of the

of

drastic

financing

is

to

provide

funds for additional
facilities and
increased

working

capital

re¬

quired by its
expanding business.
American
Stores
with
head¬
quarters at
more

than

Philadelphia,
2,000 stores

operates

and

costs

over

to

that

costs

excess

have

caused

run

15

would

are

actual

to

25%

normally

be figured on the basis of current
quoted material prices and wage
scales

and

customary contractors'

mar¬

seven states and
the Dis¬
trict of Columbia.

The Financial

DETROIT,, MICH.
Baumgartel, Jr. has

to active construction markets was
still spotty.
There has been a

to

the

been

added

Baker, Simonds
Co., Buhl Building,
members

&
of

Exchange.

trend

of

P. A. Duma & Co.
Opens
—

contract-letting
a

starts

devel¬

Total dollar volume
of

Peter

forming P.

building

and
engineering contracts re¬
corded for the first
six months of
this year was the
third
ever

recorded

having
1946
war

been
in

and

for

largest
period,
only in

like

a

exceeded

1942,

peak

construction.

year

of

reason

By

of

current

high costs, as compared
earlier periods, the
story in
terms of physical
volume is some¬
what
different.
Building floor
space contracted for in the
first
six months of 1947
amounted to
with

380.211,000

square

feet, compared

with

540,087,000

square

feet

in

194-3,
1942,
1941,

602,144,000
429,165,000

square

feet

in

square
feet in
and
260,909,000
in
1940.
These comparisons do
not indicate
that
the
current
slowdown
amounts to more than a
market

adjustment.
The contract total for

1947,
with

July 1-15,

was $285,115,000,
compared
$259,737,000 for the first half

of the
preceding month. Figures
for such short
periods are not too

valuable

trend

as

indicators, but

it is of interest to
note that there
been some increase in

has

con¬

tract

volume

of controls

is bet¬
slowdown than

Some

following

removal

June 30.

on

progress

has

been

made

This is shown by a brief review
of the figures:

Construction

on

a

recession.

increases

Contracts

37 Eastern States

Awarded

(Millions of $)
1946

January
February

$

—

1947

358

$

572

387

—

March

442

698

597

April

735

952

likely to
in

wage

of coal,

based

increases,

Duma & Co. with
offices at 1447
Ogden Street to
engage in the se¬
curities business.

are

cause further price rises

construction

materials

for

which coal is a large element
o£
cost, notably metals and metal
products. Some wholesale prices
.

602

May

in prices

recent

675

have

been softening.
Increased
supplies and inventories of dis¬
since Jan. 1. Between
tributors and increased
November, June
competi¬
808
605
tion are apt to cut
1946 and March,
into any un¬
1947, wholesale
usual
prices of construction materials
profit margins that
6 Months
may
$3,938
$3,493 have
rose 25% on average, construction
characterized the
shortage
While the figures from March period.
cost index numbers (theoretical in
Generally speaking manu¬
the sense that they do not include through June of this year were facturers' prices for
finished prod¬
less than the totals for the cor¬ ucts have
the
abnormal
increased less, percent¬
excess
costs
de¬
scribed above) increased
responding months of 1946, they agewise, than have the prices of
8%.
Result of these increases and represented large dollar volumes raw
materials
and
the
hourly
of accumulated excess costs was as compared with records of other
wages they pay.
to
highly satisfactory years.
price
The
many
residential and

fairly general
in the

creases

round

of

in¬

wage

construction trades

—

non-residential projects out of the
All non-residential proj¬
ects remained under Federal con¬
market.
trol

and

limitation

through June

30, at which time passage of the
and Rent Control Act of

Housing
1947

eliminated such controls

cept

as

affecting

ex¬

buildings

for

recreational and amusement pur¬
poses. At the same
time, it elimi¬
nated rent control on all new

high

months

of

1946

projects

non

rushed

ahead

Federal

large

-

Varied Price Increases

included

residential

many

in

anticipation

restrictions,

and

of

many

Among
as

in

construction

general

increases

over

started

on

the

high-priority preference
encouragements

basis

of

and other

offered

by

the

veterans' emergency housing pro¬
gram/In view of the many

diffi¬

1947

over

materials,

commodities, price
prewar have varied

single-family house devel¬ considerably.

opments

Increases

the

1939

to

wholesale prices have been

lows, according to the
reau of Labor

May,

average

U.

as

S.

Bu¬

(Continued

on

page

33)

Amott, Baker & Go.
INCORPORATED

REALESTATE
,

«

STOCKS & BONDS

Wholesaler and Retailer
of
Investment Securities

Bought—Sold—Quoted

and

DIgby 4-2370

Teletype NY 1-1942

REAL ESTATE

SECURITIES

Department

specializes in real estate bonds

bank

SIEGEL & CO.
39 Broadway, N. Y. 6

Trading

stocks, title

company

and

participation certificates.

SHASKAN & CO.
AUmben N«w York Stock Exchange

150

BROADWAY

Boston

NEW YORK 7, N. Y*

Philadelphia

K

Members New York Curb Exchange
40 EXCHANGE PL.,N.Y.
Bell

of
fol¬

Statistics: brick and

ACTIVE MARKETS

A.

A.

a

toward cost stabilization. Whole¬
sale material
prices have changed
very little since March.
Recent

Our

DENVER, COLO.
Duma-Kamenoff is

time, apparently

large-scale

in

Howard J.

staff of

the Detroit Stock

of

much easiec

danger of sharp re¬
cession such as characterized the
earlier period. In fact the recent

Adjustment to free-market con¬
ditions began in November, 1946
with abolition of OPA and
its

supply had overcome some
shortages, but not all. Distribution

a

the

as

price controls, shortly followed by

to

adjustment thig
without

Chronicle

—

preponderance

ter described as.

Baker, Simonds Staff

Special to

considerable

overhead and profits.

kets in

Joins

a

evidence points

and

Gets $15,000,000 Loan
through

to

abolition of construction wage sta¬
bilization.
Materials ^production

ment," Mr. Attlee told the House
of

Such

war.

reported

project'costs

Under its

and

the

shares

triple the

Slowdown Only
Readjustment

underestimating the

and

sometimes

Current

cost

awarded

builders

the latter part of
1946,
before the price and
cost
situation became critical.

such

further price and con¬
increases as com¬
pared with those that
actually
took
place.
Consequently, they
indicated volume increases for
1947 that are not
being realized.
The Dodge
figures for contracts

by

even

of

struction

major produc¬

and

as

alike in

extent

n

inflation

sociation common

imports
causing
people."

on

"hardship for

be

in

workers

longer,

would

would

strictions

*

that

work

forces

i

$11.75

industries would

quired to
armed

Aug. 5 at
per share, 311,361 shares of
England Gas & Electric As¬

were

work-

and

stoppages

New

economic

crisis.

bankers

organizations

oped

by govern¬
private
F. W. Dodge
Corp.

mental agencies

short¬

strikes

ages,

Corp. headed

a

overcoming

terial

toward

is very nearly
complete.
Advance estimates of 1947 con¬
struction volume made and
pub¬
lished last November

phase. It was
characterized

or

ordinary time required for com-*
pletion, a more cautious attitude

Thus

market

conversion

encountered

carrying 1946 projects through

in double

re-establishment of
the free, competitive
construction

vember, 1946)

workers in the

culties
in

tion

Day

through

stabilization. Necessary market
activity, as compared with the some-

housing, thus removing a quite
unnecessary deterrent xto produc¬
of the kind of
housing most
widely needed by veterans and

first

phase
-

<$>-

phase.

The

V

cost

moderate slowdown in

a

feverish

first

was

an

make

are

re¬

and

sources,

intended

was

emergency
measure.
Nevertheless, conservative leaders
will try to have the bill
amended

ment compre¬

The construction
industry in mid-1947 is in its second
phase of postwar recovery
This is the phase of material
price and construction
what

bill

F. W. Dodge
Corporation

Construction authority asserts
industry has safely passed
through initial postwar adjustment
Holds adjustment will be much less
period.
severe than after
First World
War, and may be followed by
longterm expansion
period.

Anglo-

American loan, armed forces will be cut, and further restrictions
on
imports made.
Introduces bill intensifying government's economic
On

9

DIgby 4-4950

Teletype NY 1-753

THE COMMERCIAL &

(526)

10

PHILADELPHIA

*

Memos

BUCKLEY BROTHERS
and

New York, Philadelphia
Angeles Stock Exchanges
Also Member of

Members
Los

Trustee

Street,

New York

Pittsburgh, Pa.

delphia

close relation¬

between
Philadelphia Company and its
subsidiary
since
1902,
the
Trustee's
conclusions
c o ul d
scarcely have been expected to
be otherwise.
Philadelphia
Company owns all of Railway's

ship which has existed

ra

Bank & Insurance

v
'

Philadelphia Transportation Co.

demand

Philadelphia 2

Chestnut Street,

New York phones
HAnover 2-2280

Locust 7-1477

Teletype PH

:

system's

the

volves

1,

ways

to

Empire Steel Co.

Empire Southern Gas

of

Pittsburgh Rys. Co.
Sterling Motor

Warner

000

Byllesby & Company

PHILADELPHIA OFFICE

Co. was employed
exhaustive study of

to

make

an

transactions

inter-company

and

of analyzing the

340,340, or 89 cents i per share,
compared with a net loss of $2,-211,425 for the corresponding 1946
period. Second quarter earnings
were
somewhat under the first
three months reflecting wage in¬
creases which became effective in

000

panies involved.' No date was set
a hearing.
The petitioners, all

the

in the

more

may

share.

ap-7

orders on June 30 was

filled

the

than eight years

{

■

■

:.v

Eastern Pa.

for

Gas

Natural

;It

hand and on~

that net earnings for
exceed $1.50 per
Backlog of un¬

and
year

common

system has been in bankruptcy.
was stated that sudh funds oil

in¬

$200,000,4"

accumulated proximately $178,682,000.

has

which

121,000

indications that
reach

may

compared with $122,254,000 in

1946,

York,
asked that the
be taken from the $23,-

money

sales

1947

New

of

There are

May.

payment to public holders of
of the
various com¬

for

equitably

be

reports net

securities

cash

year, Budd
earnings of $3,-

first /half

the

For
Co.

directing trustees of Pittsburgh
Railways--Co. to make a partial

other transactions

1 d

o u

Budd Company

21, a petition was filed
in the District Court for an order

states

ware- :

t'

* ■"

v:

On July

this note.

these payments of

to

bought

Cash Distribution

and

shipping

.

departments to the new '
location;. -IV-y/C" ■<■■■■;■. V''-77C:'- 7

housing

event, a

dissolve."* Tn any

and

ities

is a "must."

;

it to

probably require appropri¬
adjustment when distribution
on Philadelphia Company
claims. He adds "It may be, how¬
ever; that
terest
s h

its

its ^cap¬

further

and

Aircraft Corp.

eventual moving of
manufacturing facil-7

plans the
entire

an

Philadelphia

to simplify

order

structure

ital

ate

by opinion or

port was uncolored
recommendation/ j

in

to Kellet

experimental work for the
Army.
The drug corporation
for

Company is at present under an

would

and

Corp. and about a year ago was
leased

Commission

proceedings

constructed for SKF
by
Defense
Plant

was

Industries

to

the

on

'SEC

practices.
The data
lis made
adduced was factual and the re¬

Teletype
PH 73

Telephone

on

of the results of

accounting

Bldg. Phila. Z

RIttenhouse 6-3717

in

The

ministration for $1,750,009.

plant

re¬

required to

be

may

up

active -capacity.

;

that these
To
assist the Trustee in the
it Wo matters standing alone /and
preparation of his report, Price,
viewed apart from consideration

Company

Stock Exchange

paid

trustee

The

i

Waterhouse &

H.M.

was

and

has an¬
nounced its intention of sitting

Interest

i

and

framework

prompt and equitable reorgan¬
ization of Pittsburgh Railways

pended for benefit of Railways,
in the amount of $54,-

;

Deep Rock principle, to
preferential treatment in

as

Exchange

reorganization.

Truck

Cement

Nazareth

the

obtain

many

integrate dts operations or, in
the
alternative,
"to 'liquidate

Ladenburg, Thalman & Co.. There is
nothing to
indicate that any
part of the $100,000 was ex-

,' The court order directing the
investigation was prompted by
owners of minority publicly-held
securities seeking, by application

Botany Mills

Phila¬
delphia
pharmaceutical
firm,
has purchased a large industrial
plant in Upper Gynedd Town¬
ship from the War Assets Ad¬

date.
It is sig¬
nificant That %the Securities &

for

latter

the

in

amendments

such

;.

#

$

*

Sharp & Dohme, Inc.,

while admit¬

the

.

Chocolate

stockholders will vote on
Sept 15 on proposals to retire
treasury shares and to split pres¬
ent common three for one.

pur¬

changed

to

provide

bring it

given

paid by

amounts

due

visions

in¬
dated

note

to

for

by Rail¬
Philadelphia Company

reimburse

to

understandable."
American Box Board

ed

transaction

1924,

Plan,

inappropriate

respects

report states:

$100,090

a

April

unit for

a

'■

.v.-v
*

Corp.

improved conditions, is expect¬

was

second

The

operation and
administration
by the parent
company prior to present Trus¬
teeship which began in 1938 is
of

WHitehall 4-2400

257

stocks,

over

1942

The

tedly

as

/
*

*

.

HERSHEY—Hershey

reorganization.

of

poses

in

way

considered

be

per

;

61.94%.

After a long
battles which car¬
Supreme Court,
ruled that "in the public

was

equivalent

history,

share compared
$4.60 for the comparable
period.
Sales
were
up

$8.86

1946

jinterest" the entire system must

which the whole
handled
may
have been due ito' inadvertence
rather than intention but never¬
theless it resulted in Pittsburgh
Railways paying interest of ap,proximately $50,000 for 30 years
($1,524,600)
when Pittsburgh
Railways
received
no
benefit
from the transaction."
....
"The

transaction

approximately 64% of the sys¬
tem's
underlying
bonds
and
stocks. The alleged domination

H. N. NASH & CO.,
Phila. Phone

common

pay

the pre¬

upon

The Trustee's

1902.

-$10,000,000 in
notes and, in addition,

something
•

1421

and

preferred

Pfd. & Common

3-6s 2039,

may

Consolidated."
Just how Railways became liable
fqr the $840,000 advance made to
Consolidated is not clear, since
the operating agreement did 'not
become
effective
until Jan.- 1,
ferred

Philadelphia Company.

In view of the

Consolidated

to pay] also to

dividends
stock
of

current

and whether there are
grounds for the equitable.limita¬
tion
or
subordination of claims
filed by

required

be

other

it

First half re¬
reported as best in

were

with

the U. S.

ried to

all

and

to

series of legal

to pay

,

.

currently

is

stock

company's

provisions."

plan's

obligated
.

loans

upon

which

rentals

Phila¬

any

or

Railways was
other things, "

interest

all

party,

Angeles

Philadelphia, New York and Los

Company

——-—;

■;

among

available to

are

debtor's estate against

the

Wire System between

Private

action

;

dated,

deterclaims or
to

investigation

of

causes

Telephone—WHitehall 3-7253

N. Y.

examina-^

an

whether possible

mine

Philadelphia 2
Los Angeles
Hagerstown, Md.

conduct

to

and

tion

Curb Exchange

New York

1420 Walnut

sults

for Western

Request

on

The

shares

10

each

selling around 80.

326-page report filed last

a

for

share

(In sandlot language this plan
month with the U. S. District Court never got to first base, princiPennsylvania, W. D. George, trustee of Pittsburgh Rail¬ ipally because the 53 underlying
ways Co., concludes that "at no time did Philadelphia Company take i companies of the system, stand¬
advantage of its position as parent to impose unreasonable or inequi¬ ing /upon the rights of their cor¬
table charges against Pittsburgh Railways Co."
porate entities, refused to con¬
The report is in answer to an order of Nov. 7, .1945, directing the
sider themselves
bound
by the
In

Co.

at

common

share in the ratio of one

a

held.

mant 1942 Plan of Reorganization.

Philadelphia Company

additional

buy

$35
new

jgestion for. revision of the dor¬

"Clean Bill" for

Corporation

Eastern

Southern Production

to

ber, W. D. George, trustee of
Pittsburgh Railways, ,is expected
to file within a few days his sug-

Pennsylvania Brevities

Co.

Colorado Milling & Elevator

Thursday, August 7, 1947

FINANCIAL CHRONICLE

'

HARRISBURG—Last week the

deposit represent, in

main, /excess
money
hot Public Utility Commission, by a ;
weighed opposite the cancellation the
three-to-two vote, took the first
by Philadelphia Company of cash needed for operation of the sys-'
ordinary administra¬ step toward permitting the wide¬
loans to Railways in the amount* ter or for
of
$9,700,000,
and
the
other tion of the estate. The petition spread use of natural gas in East¬
ern
Pennsylvania by approving
transactions
between
Philadelopposed payment of any money to the application of Manufacturers
jphia
Company
and
Railways
Philadelphia Company or ;its af¬ Light & Heat Co., Pittsburgh, for
whereby Philadelphia made sub¬
; tionable.
V- 7'v; construction of a $5,200,000 pipe¬
stantial
concessions 'which bet¬ filiates.".,::'1 :
*
*
line through Chester, Montgom¬
The'first concerns the payment tered the position of all other se¬
ery, Bucks, Lehigh, Northampton,4
of
dividends
on
Consolidated curity holders in the . system."
Duquesne Light Financing
Monroe and Pike counties.
v, f
Traction preferred stock for the
V
The Trustee
concludes that ]; V Duquesne Light Co., subsid¬
Purpose of The new line is to <
period from Nov: 1, 1900, to Dec.
iary of Philadelphia Company,
"except possibly for
the -two
furnish natural gas at whole- :
31, 1901. Pittsburgh Railways Co.
items of interest above men¬
; has
registered $75,090,000 first
advanced the necessary funds to
sale rates to Home Gas Co. at *
mortgage bonds to -become due
tioned, there are no claims or
Port Jervis,
N. Y.
It is ex- \
Consolidated on open account. Of
causes of action against Philag Aug. 1, 1977, for refunding pur¬
the
total
of $840,000 preferred
pected, however, that,
upon
poses.
Names of underwriters,
f delphia Company , . . and no :
completion,
applications
will ;
dividends so .paid, Philadelphia
J grounds exist for the equitable
| offering price to public and in¬
pour
in for consumer use in *
.Company received $810",462.50 and
terest" rate will
be filed by
\ limitation or subordination of
many
Pennsylvania
commupublic
holders
received $29,amendment.
The ' mew
issue
} claims filed by Philadelphia
nities.
537.50. But the record shows that
will refund $70,000,000 presently
J Company."
these dividends were recorded as
The decision was considered of,
In the course

informa¬
tion made available to him, the
Trustee
finds
only
two
in¬
stances
of payments made by
Railways to Philadelphia Com¬
pany which he considers quesvoluminous statistical

Ben Franklin Hotel

Com.

Hotel Keystone Com,
Phila. Warwick Com.

Transportation Issues

Phila.

...

Catawissa RR. Pfd.

,

East Penna. RR.

K.
Philadelphia Stock

*.Members

Packard Bldg.,

Exchange

Philadelphia 2
N.Y.'Phone

Teletype
PH 375

'

COrtlandt 7-6814

.

3^s.

(outstanding

a

Consolidated, and

liability of

hot of Railways.

Pennsylvania

Under its oper¬

with

agreement

ating

and New Jersey

Consoli-

Revised Plan Expected

<

s

In

;

;

with a District

compliance

Court

'4

order, issued

last Decem-

proceeds

,

1

corporate purposes.
: *.

•

•.

of
for

Balance

:

will he available
,

importance 1 since
Philadelphia^
joined Jn asking the Federal
Power Commission to approve use
:
of the /Big and Little Inch pipe-',
has

;

*

."

..

Steel .production in the Pitts¬ lines for the transmission of gas
burgh
district is - scheduled .at
fo The
city.
Philadelphia Gas
105% of capacity for the week
ending Aug. 9.
Actual rate of Works Co. has stated -that a sup-"

r

Municipal Bonds
-

Available Publications

^

.

Aug.

operation for .week ended
was reported at 103.8%.

2

Dolphin & Co.
Trust Building :
PHILADELPHIA 9

Fidelity 'Philadelphia

-

«'

EQUIPMENT CERTIFICATES

5-4648

Teletype—PH

have

Appraisal

Valuation and

.

York— HAnover 2-9369

System

of

tion

299

CITY OF PHILADELPHIA

authorized
of

distribu¬

the

rights '

of

stockholders

BONDS

Two members

sion,
ing
the

♦Nor.

.

Co. Common
Rlander Common
Atlantic City Elec. C&. Com.

Harshaw Chem.
*
*

123 Public

Roberts &

Copies

-

Trading Department

Utility Common Stocks.
on

residents of coal produc-,

"

Request

-

Issues

Direct Wire to New

.

,

■

•

•

&

•*
;

Sons

E. H.Rollins &
/Incorporated

.

1528 Walnut St.,
New

Philadelphla 2

Boston

York
San

Francisco




PHILADELPHIA 9, PA.

Chicago

i

;

,

i;

•

Pittsburgh

^

York City

;

Lancaster

-

Scrahton

10th Floor, Peoples Bk. Bldg.

PITTSBURGH 22, PA.
Grant 3900
,.

"Bell System

6T Broadway
NEW YORK, N. Y.
BowKntf Cr*en

Teletype—PG-4V3

9-398?
>

:

pead '

11

and long s popular

Turner

1

^

New York Curb Exch.

1Jr

"-fr—;

Philadelphia traders, El~;
died on July 27. > He
had been on the desk with Newburger .& Hano and .predecessor
companies for over 30 years. ,
mer

COMPANY
Pitts. Stock Exch.
(Assoc.)

N. Y. Stock Exch.

NEW YORK 5, N. Y.
5 REctor 2r6528-29

and

t
•

among

■'

■

Norman Lafferty

Members

120 BROADWAY

PEnnypacker 5-7330 >
Allentown

\

Incorporated

123 SO. BROAD STREET

v

PEnnypacker 5-0100

CHAPLIN

-

Well-known

*Offered only by prospectus

Bought—Sold—Quoted

1

opposed

7"

action.

Elmer Turner

Active in

Pennsylvania

Western

of thef Commis¬

counties, vigorously,

::

Price-Earnings Ratios and Yields on |

Common
Ind. Pub. Serv. Com.

Phila. Eiec. Co.

~

:'j.

to consumers.

rates

Corp.

Hajoca

natural gas to be mixed1
manufactured product is.
desirable to avert an increase in

ply of

with the

Hajoca Corp. Rights
Directors

Philadelphia—PEnnypacker
New

RAILROAD

/

;.

Telephones:

,

Bell

Appraisal

Valuation and

•

•

On the desk for

Meeds,
Norman

■

'

Laird, Bissell &

Philadelphia,
Lafferty

1

Dies

since

died

1938,'

July, 29.

Lefferty entered the securities
business with Munds, Winslow &

Mr.

Potter in 1925.

Volume

166

Number 4618

THE COMMERCIAL &
FINANCIAL

CHRONICLE

(527)

Britain's Economic Situation
By

SIR

In

Trade, England
economic

Points

ther cuts in imports

affairs
fur¬

out

home,

jmslead

or

be

ple for over a year now that the
sellers' market could not last and
that it would end much sooner

of

accused

inisleading.
I should like

by

than
now

of introduction
to

-

way

say

a

word

or

has

in

come

kets—especially in the

cur¬

just those
things like textiles and pot¬
tery in which we have the great¬

optimistic nor
p e s s imistic

est consumer

about

machinery which we need ur¬
gently for our own rehabilitation.
All this means
that, as a fact,
we are
running through our dollar
credits at an alarming pace—at
the rate of
something like £800
million a year—even though we
are limiting our imports to some¬

the

uation.
one

is

Sir Stafford Cripps

im¬

of

diffi-

mense

,

culty

but as I know how the
people have faced such
problems in the past, I am confi¬
dent that they will face them and

.British

them in the future. But
.that confidence is based
upon the
necessity
of
their appreciating
,the facts and facing up to therm
overcome

.

shortages in our own
like capital goods and

country, or,

sit¬

It

a

are

ticularly to relieve the present
great pressure on the sterling dol¬
lar

exchange

shall

we

inevitably

find ourselves under the absolute
necessity to curtail our imports
much

further

than

today, and that

we

in

must

doing

are

its

turn

affect the volume of our
produc-r
tion and so the speed with which
we
can hope to rebuild our bal¬

where between 70-80% of
prewar.

of

ance

Non-Discrimination

they

overseas

payments.

Difficulties

A

Hopes of Marshall Plan
good many people have asked
What then are the bald facts
recently why we haven't done
Such is the position of
many
of our present economic
situation? more by way of cutting our im¬ other
European countries today;
i We have passed through a year ports—or
why we have cut out that is why Mr. Bevin has thrown
^of growing difficulties in the last imports by what looks like an himself
with such whole-hearted
12 months. Our own domestic fuel almost insignificant
figure.
energy into organizing a response
and raw material
Let us remember that we are to the Marshall
shortages have
offer.
.

the

that

luxuries
other

unnec¬

trial

equipment

ion

that

and

needed

restrictions

glo-American
of

the

of

our

,|3y

.

still bound

embarrassing

extreme shortage of for¬
eign exchange.
our

This

latter

cloaked,
now

for

has,

of

rapidly

by

us,

diminishing

that

the
to

us

import

that

never

our own

have

We

commercial

on

not

the

basis

hard currency. What

While these

—

on,

soft

Relevant

foreign exchange at
Very distant date.
'

dollar

tered-away

in

that

is

peculiar to our
own country.
The very wide de-»
,^ree of inconvertibility of foreign

sive

or

want par¬

ible,

the

other

shortage

countries

of

dollars

puts added

in

pres--

sure
on
the
sterling-dollar ex->
change. We become, as it were,
the exchange channel for a large

part of the world, and

we there¬
have to carry the main bur-i
den of the world's dollar
shortage,

fore

This is something which
•was' not

I

think

generally anticipated.dt

the time of the grant of the Amer4
.lean credit.
Second, and this is

almost
of

important, the shortage
foreign
exchange
in
other
as

ports

vegulate'their imports—as
have

.reason—thus

fhose

to

do

for

closing to

our-!

we

the

same

us some of

have'always relied fbrbuild-i
ing up our export trade. A typical
instance of this is the Argentine
yvhere many classes of goods are!
mow

bciany

prohibited
of' them

from

just

;goods with which

we

entry and
those very
should

exj

pect to be able to pay for essen¬
tials Argentine
-imports,

largely

foodstuffs, into, this country.
'

There is

a

further factor of im¬

portance which we must bear in
"jnind.

I have been

warning

peo¬

in

by Sir Stafford
Cripps at Rotary Club Luncheon,

-

as

has

become

agreement
well

as

of

powers.

with

by

cut

a

-

very

raw

trade

"I say without hes¬
Conservative leader
"there will be no re¬

and

personal

brought
from

would be

tish
our

ac¬

a

credit

land.

indulgences,

the

down, have been
power by the vote

Then, indeed, there

bound forward in Bri¬
and

respite

Then, indeed,

feet

again

on

in every
should set

we

the

high road
and

stony

uphill all the way, leads out
of the quagmires in
whiph we are
now

floundering and sinking."

the

This is under

circumstances

no

offer to buy,

an

The

.Not

a

to

or as a

be construed

as

an

offering of these shares for saley
buy, any of such shares.

or as

solicitation of an offer to

offer is made only by

means

of the Prospectus.

New Issue

August 5, 1947

deal¬

our

incompetence

us

which, though it is hard

thought of

-

;

\

I

311,361

our

economy as
nation to have

Common Shares of Beneficial Interest

\
'

-

(Par Value $8 Per Share)

....
'

'

%
•

«

rials.

of

overriding importance, it is

sential

'

■

,

New England Gas and Electric

diminishing

barriers.

*

I

.

Association

;

moment" the

mate¬

We have in fact cut out the in¬

long

as

is in power.
itation" the

and

be

Though for the
immediate critical
foreign exchange situation
may be

production

or

the belief that no recov¬
be expected in Britain
as the Attlee Government

can

a

our
utmost to conclude a
multi¬
lateral trade
arrangement at Ge¬
neva on the basis
of

im¬

no

ery

of the nation.

films

our

pressed

driven

which,

as

sen¬

proposals, however severe,
are truly made in
the na¬
tional
interest.".
But
he
ex¬

ings with other eastern
European

these

of

either foodstuffs

(A Massachusetts Trust)

.

es¬

that we
should ' lay - the
we had
hoped to achieve basis for a
freer
exchange of goods
food—in itself a serious matter5 in
the future which
will enable
especially as regards variety—and us and others
to maintain a
we have made a few
proper
adjustments balance of
creases

in

in

materials

raw

afford to do
terial effect

tion.
to

a

without

so

on

where

any

can

ma¬

export produc¬

our

payments and
convertibility when the imme¬
diate dificulties have
been over¬

so

come.
t

country
it

is

is

we

the

unobtainable
for

hoped for increase

some of our
in production.
,

have

we

dealt

fairly drastically, though
have

to

do

things get

this

must not cut that since

basis

Tobacco

in

more

of

with

to

worse.

nance

as

as

Bill becdmes law.

the

Fi-1

we

only newsprint as to which
acted as moderately as
possible in the circumstances.

have

was

It

is

the

not

surprising perhaps that
generally did not give
fair report of the argu¬

press

a

very
ments on the matter
in the recent
debate in Parliament.
So you see that what
done is to make

we

have

warning

possible

cuts

without

em¬

barking at this time upon a seri¬
ous dislocation of
our production
in

itself

could

only "make

may be obtained from any of the several underonly An States in which such underwriters are qualified to act as

dealers in securities and in which such

Prospectus

to, meet

our

1

l,

J

I

depend primarily upon

inventiveness
facturers and

"a

these up

our

designers,

as

salesmen.

.our

our

manu¬

And

productivity

only to turn out
to

be

more

able

to

more

market

Harriman

skill and

legally be distributed.

may

we

(Continued

on

page

Moseley & Co.

E. H. Rollins & Sons
Incorporated

Whiting, Weeks & Stubbs

Schoellkopf, Hutton & Pomeroy, Inc.
H. F,

already

35)

Estabrook & Co. *'

Incorporated

F. S.

4r

goods but
them at a

are

Coffin & Burr

1
-

G. H. Walker & Co.

not

running into difficulties in the
export markets, and the spectacu¬
lar .increase which we
experienced
towards the end of last
year has
not only been affected by the fuel
and .-raw material
difficulties, but,
also ' by the!;greater'
difficulty in

Corporation
/

Higginson Corporation

Goldman, Sachs & Co.

Merrill Lynch, Pierce, Fenner & Beane

Incorporated

favorable competitive price.

As I have
said,

Ripley & Co.

1 Stone & Webster Securities

I Lee

Corporation

Eastman, Dillon & Co.

in

salesmanship price is of course
fery important factor. We want

to!f increase

Blyth & Co., Inc.

import-necessities

productive effort arid

a

The First Boston

•

;Our capacity to build

And that (that

leaves

writers

•/

visible.

mpst

soon

Copies of the Prospectus

j

credits by
exports visible and in¬
i

if

1

\

.

only
one
side of our
balance of pay-'
ments
problem, that is our debits
by imports. The other side is our

may

imports the Chancellor of
Exchequer will have power

deal- with

*

■

with

•

we

course

Films

the

r

British Export Situation
So far I have
dealt

machinery which is imported be¬
it

'

.

very great deal.- As to special

cause

Price $11.75 per share

overseas

we

But all that does not
amount

London, England, July 23, 1947. which




level

without

dislocation

wherever
*An 1 address

in

70-80%, there is
manage

serious

export markets upon which

we

offer

It is essential to

abroad

present

our

of

can

we

'countries leads them to limit and

selves

trade

U.S.S.R.

to do is to economize
exchange—and a few other

With

currencies in the world
generally,
combined with the acute overall
-dollar shortage is
adding to oui?
own difficulties in two
ways.
»
; First
owing to the fact that
.■Sterling has, by agreement with
America, itself become convert¬

Marshall

the

and he added
"will accept, sup¬

party

port and endure
any and all

fears

Continuing, Mr. Churchill said:
can

.

sible

have

in large quanti¬
and fruits

indispensable to

"What

of

that

deplorethat

power.

easement

from our present misfor¬
tunes until the guilty men whose

upon

tive recovery.".

a
great exporting
broadly of the fol¬ markets all over
the world and to
lowing things: foodstuffs, raw ma¬ be able to
indulge in three and
terials, machinery, films, tobacco,
four-sided exchanges
through con¬
newsprint, and little or nothing
vertible currencies.
else, at least in any quantity that
For this reason we
are
matters.'
"
doing

.

one

We

nor

American

ties of foods however desirable
not

Mr. Churchill
to support a

covery

and

were

party

Agreement,
his

remarked,

loan

re-equip-|

industry

and tobacco

to do
alignment of

markets consist

no

This foreign exchange problem

is not

political

the

the import of basic
foodstuffs."
Mr. Churchill asserted.
"Instead much has been frit¬

nothing

subject Kof political
controversy
between the two parts of
Europe
relationship should, we be¬
lieve, be close. A fact well illus¬
trated by the great efforts we have
been making to get a
comprehen¬

ticularly

hard currencies.
Our purchases

of

we

has

whose

select

course

idea

any

world

the

considerations

the

on

to realize that their source
may
be cut off, not
by shortage of ma¬
terials but by. shortage of the

i

of

can

imports visibly continue it is hard

>

with

means

price, volume, delivery and so
but

resources would

allowed.

This

choose—on

cannot

wq

import.

food, raw materials and
machinery,
from
the
Westerp
Hemisphere in particular in a vol■nme

That

basis of the availability of
foreign
exchange—the particular country
or countries from which we shall

dollar

have enabled

by the non-discrimina¬
of the Loan Agree¬

clauses

ment with America.

however, been

most

credits which

tion

.

indeci-;

Govern¬

of
on

,

more

and

Socialist

ment, a great part
has been spent not
ment

aid

America,

by the An¬
Agreement.

Loan

"Owing to the follies
sions

food¬

financial
from

imposed

,

been made the

basic

revision of the present

as

for

that

expressed the opin¬

further

be

well

as

his

Loan

Winston Churchill

to

indus¬

would

far

American conditions
imposed on
Britain by the
Anglo-American

goods,
instead
of

stuffs, and he

extravagences,

pledged
request

essary

obtain

been

months

cial

f

and

being used

have

not

effective if made a
year or
ago."
Despite his criticism of the
Labor policies and its
wild finan¬

im¬
o

My.

Wednesday

would

six

was

portations

has

day to day until
nearly
exhausted?

more

which

asserted

wasted in

warning that unless some major
action is taken to right the world
shortage of dollars so as to make
the
majority of currencies freely
convertible into dollars, and par¬

rency areas—tend to be

very

neither

payments

a

of

which

from

on

loan

is
There is not one
proposal that
Attlee can make on

manage-

loan,

possibly right

overseas

But do not forget that

mar¬

hard

The

they will help to delay by

the

ernment's
ment

Government

drifted

$3,750 million
American

short time, at'
any rate, the date
when we shall run out of
dollars
and hard currencies.

some

the best and most persistent

ap¬

proach to this

am

end

but

the

the

Labor Gov¬

"potted" I

difficult.

more

balances of

our

Well

proaching in others. Unfortunately

problem.
I

the

people expected.

problem

cuts imposed cannot

classes of goods and is
rapidly ap¬

two about the
general

some

our

casti¬

gated

I have been asked to talk to you
today on the present economic situation and
you must
therefore be a little patient with me if I
occupy rather more of your time than
you perhaps
anticipated.
This is a very wide subject and if I try to make

Attlee regime of

accuses

,wartim? Prime Minister and Conservative
m an address at Woodstock, Eng., site of his

vli t??? Britain,

ancestral

j

he

away

iMrf}!ifnSt?Lf;hSruhi11'
a

\

my remarks too

Woodstock, England,

proceeds of American loan
and asks for easement4
conditions and additional
American aid.

ot loan

\

will dislocate British economy, but may be required if dollar
shortage continues.
Sees hope in Marshall Plan and deplores
implication of its political alignment. Stresses need of
greater
productivity of British industry to win "Battle of Balance of Payments."

shall probably

at

whittling

Stating he is neither optimistic or pessimistic, statesman in charge of Britain's
describes foreign exchange difficulties under nation's
existing foreign trade deficit:

.

Churchill Flays Labor Government
address

STAFFORD CRIPPS*

President of the Board of

11

Boynton & Co., Inc.

Yarnall & Co.

H. P. Wood & Co.

Incorporated

a

f! f r<

>

U

■

b'' *:* A' *'' ■''1!

'''''4'

F. S. Smithers & Cx
E. M. Newton &

Chace, Whiteside, Warren & Sears

Townsend, Dabney and Tyson 1

>

Starkweather & Co. 1

Pacific Company of California

William R. Staats Co.

Chas. W. Scronton & Co.

Hayden, Stone & Co.

Perrin, West & Winslow, Inc.
H. C.

b;

i1

.

•

■

•

Compa v

Wainwright & Co.

,

The Cost oi

Bank and Insurance Stocks
TEiis Week
Despite

—

Sterling Convertibility
By

PAUL EINZIG

Noting growing pessimism in Britain regarding outc ame of sterling convertibility, Dr. Einzig sees need
of further concessions under Anglo-American Loan Agreement to prevent early exhaustion of British

DEUSEN

By E. A. VAN

Thursday, August 7, 1947

FINANCIAL CHRONICLE

THE COMMERCIAL &

(528)

12

Bank Stocks

dollar

Foresees likelihood of collapse of terms of Agreement before Marshall Plan starts.

resources.

rise
LONDON, ENG.—Although only a fortnight has passed since sterling became convert¬
net operating earnings of 15 New ible, the light-hearted optimism displayed in official circles about the effects of the change
of security profits, were fractionally gave way to growing concern.
It is true, nothing spectacular happened on July 15, as in-

substantial decline in total earning assets and a

a

operating costs, the aggregate

in

exclusive

banks,

City

York

higher in 1946 than in 1945.

aggregated $127,-

Their total earning

1946.

$127,820,000 in
&

with

compared

686,000

deed

their net operating earnings

In the latter year

assets, however, between mid -year
and

1945

1946, shrunk

mid-year

$23,980,348,000

from

$21,761,-

to

This represents a decline

800,000.

$2,228,548,000 which is equiva¬

of

netted

banks
turn

in

1945,

figures

were,

trend in the rate

upward

each

of

bank

leading New

15

City banks.

this

quite likely that

seems

1946

in

York

Earning assets
mid-year

the

at

the
percent return by net operat¬
respectively, ing earnings, exclusive of security
profits and recoveries. The aver¬

.59% and .08%.
It

presented the situ¬

In Table I is

of

point are used for calculating

But the ex¬

return is .68 %.

age

happen,

of re¬ periences

of the individual banks

variations, depending

wide

show

much

that

con¬

to

tnat

sidering
is

soon

able

be

in

and

within
ton

con¬

t h

Dr.

Paul

Einzig

credit became greatly accelerated

immediately
Sir Stafford

and
And

shortly before
after July 15.

against

American goods.

the

"scarce

of the Bretton
has been in¬
vented with the object of induc¬
Woods

dollar

the

as

well-known,

clause"

currency

proceeds

e

well

as

is

As

from

drawals

of

British

with¬

the

of

any

pace

discriminate

Cripps, in his speech on the "bat¬
tle of the balance of payments'.'

Agreement

ing the surplus country to enable
deficit countries to pay for the

not

are

which

convertibility is
How¬

ever, the harshness of the Amer¬
ican interpretation
of Article 9
and of the Convertibility Clause

has given rise to very little criti¬
cism of the United States. All the

is

criticism
Britisn

directed

the
having

against

Government

lor

failed to enlighten American offi¬
cial opinion and public opinion

surplus, either by importing more
of their goods or by lending them
more
of their currencies.
As a

about the full extent of the
den

bur¬

the
uncompromising American inter¬
imposed

Britain

on

of the.loan agreement.

pretation

British

official

Indeed

by

propa¬

convertibility of
ganda aimed at conveying the im¬
deficit country can now
Britain
actually
to import more or to pression " that
the

of

result

concerned
a

bound to be grossly abused.

meaning of the BretWoods Agreement.
As a re¬
to

countries

without

currency"

"scarce

the

titled

gradual.
txie

also
a

con¬

much better posi¬
tion
to
guarantee the effective
enforcement of their restrictions,

sult member countries will be en¬

vertibility has

But

convertible

on

also

was

rather

inadequate, con¬
sidering that in two months' time

that not only the
sterling will soon

and

but

declared

be

thai; the tran¬

case

sidered

the

sterling,

in

number of countries

ceases

likely to be in

dollar

to

means

satisfy the demand

switched

be

dealing

been

to

it

Fund

will

exchange

Britain,

the

as

for dollars the unsatisfied demand

no

foreign

free

important,

more

as

sition

earning rate of % of 1%.

ation

while the average rate of
15 banks was .57%.
In 1946

.53%,

the

on

av¬

an

overall net increase in the

erage

1946

in

aggregates, the rate of return was
the

assuming

earnings,

based on

assets

In

1945.

speculate

effect would be

the

what

bank

higher rate of re¬

a

earning

on

than

the

Obviously

10.3%.

to

lent

possibly

there

ation, it is of interest to
on

nothing

could

maintained for some
candidly admitted that Britain's sterling, a
time.
This column has pointed to a large extent, on the differing dollar position has become greatly be forced
out
on
several
occasions
the character of their operations. For aggravated by the fact that other lend more, which it can obvious¬ stands to benefit by the conver¬
changing character and propor¬ example, Chase and National City countries can now draw on the ly ill afford to do. This is only tibility of sterling, or at any rate
tioning of the bank's portfolios,
For the one of the anomalies arising from that it would not cause any addi¬
have the lowest rate of return, British dollar resources.
tional losses of dollars.
viz: a drop in the volume Gov¬
while First National and U. S. first time the- possibility that the the premature restoration of the

turn may be

holdings,' a lengthening
maturities, an increase in com¬
loans, etc., all of which

ernment
of

Trust

increasing the banks'

tend toward

profits per dollar of earning as¬
sets. In addition, there is the re¬
cent unpegging of interest rates
on
Treasury bills, with its ten¬
dency to firm 'interest rates in
other directions.:

-

•

" V

year

II

assets
taken at mid¬
earning

the

bank

each

of

loan

the highest.

enjoy

are

Table

In

mercial

1947. It should be noted that

they are considerably below the
figures of a year ago. Assuming
that each bank this year will en¬
joy a net increase in rate of re¬
turn of % of 1%, the additional

has

been envis¬

now

'•

'

*

deficit

aspect of the interpretation
of
convertibility
which
has
hitherto been overlooked became
during the course of the

evident

given by the Treasury to
a series of questions in the House
about the exact meaning of the
answers

—

Central

3.10

1,374

8.04

.

Hanover

559

Chemical Bk. & Tr._
Corn

National—

National
Public

200

1.35

.68

"5.26

,.57

669

3.03

.45

7.40

.72

Trust—._

1,021

National—

844

Trust—.

U. S.

AVERAGE

.65

'928

Trust

City

York

New

'1.27'

92.54
2Q.08

Irving TrustManufacturers

.62

5.50

7,304

3,098

-

_

.64

3,608

—

—

4.85'

.57

:

1.22

44.07

.68

•

share at mid-year,
1946.
INet operating earnings, 1946. JNet
operating rate of return on earning.- assets.
Earning

assets

per

amounts obtained from the

operating earnings for 1947.

.46

2.87

888

Exchange—

First

Guaranty Trust

2.59

448

National

Chase

.59

Actually,

of

course,

each bank

experience a flat % of
1 % increase. Nevertheless it will
be observed that the estimated re¬
will

not

sults, when compared with 1946
net operating profits, do not ap-i
pear
unreasonable, except that
Guaranty Trust's estimate seems
somewhat low. It is of interest to
these results with
half-year figures tabulated in

the
this

"Chronicle"

of

compare

the

in

column

Inter¬

Fund.

This

national

Monetary

that, for all practical pur¬

means

countries

are

postpone convertibility until 1951
Bretton Woods Agree¬

Possibly- the adoption of
by the United

ment.

the Marshall Plan

made conditional
the restoration of the conver¬

States
on

may

be

also

will be

and

more

on

able

the

to

use

charge 4%
of Britain's

premature,

and that in any

such exemption can

case

Britain

free

of

interest,

and

on

which Britain is to pay 2% inter¬

only be

States.

est to the United

What is

by merely two months

with

of

Manhattan

of

New

York

4,008

Bell

(L.

A.

J. S.

Rippel & Co.
1891

Established

18 Clinton St.,

Newark 2, N. X
3-3430

MArket

Teletype—NT: 1-1248-49

N. Y.

Gibbs. Manager Trading Dept.)

under

the

„

is

There

that

even

reluctant to admit the full extent
of

the danger arising from the
rapid exhaustion of Britain's dol¬

lar

Since

resources.

convertibility
it has

.

.

Phone—REctor 2-4383

Tr.

'

:

irr

National

•-

$2.56

Many quarters feel that if
only American opinion had been

made

done.

to

realize

what

25.45

25.97

3.16

3.10

the

1.40

.715

8.02

8.04

would

.62

.585

2.91

2.59

United

States

have

been

more

.765

2.94

2.87

the

Loan

.745

■

6.02

5.50

are,

the proceeds of the loan

8.50

11.395"'

94.82

92.54

2.75

.775

17.03

20.08

.22

.805

1.41

1

»

1.04

.695

.575

certain

to

-

5.26

fore any new

Marshall

3.03

3.57

assistance under the

Plan

possibly

rcan

available.

come

That

>

1.10

.845

7.40

7.40

f

1.00

.695

5.54

4.85

cumstances

40.23

44.07

1.345

3.74

vertibility

1
With Buckley

to

Brothers

sterling;

or

without

United

the

States.

WHITEHALL 3-0782

"Wall Street
NY 1-2078

Branches
CHICAGO 4

BOSTON 9
I

Port

231

Offia Squart

S. LaSatle Strtd

LOS ANGELES 14
U3

BAN FRANCISCO 4

West Sixth Strict
MICHIOAN 2AX7

r«*AWKLIN 7B3S

NUBBAMD O6B0

LA-1086

CG-/OJ

26, Bishopsgate,
London, E. C.

Office:

Head

in

WIRE

SYSTEM CONNECTING:

CLEVELAND.

SF-S7J

Prri'-n^nre

Enterprise




Enterprise

7008

NEW YORK, BOSTON. CHICAGO,

6011

"-^Portland,

j

would

generate

bad

would

endanger

the,

The

Enterprise

Detroit, Enterprise 6066

Capital—

£4,000,000
£2,000,000,
£2,300,000*

Fund

conducts every description1 of
banking,
exchange, .business
*

Bank

.

m «

,,

TrusfeeihtpV and Executorships *
also

Bro¬

the

Marshall

of

cons<en,t

jagain

feeling ,aij.d
adoption

Plan.

of

Timely con¬
,

cessions

at

the

present,, stage

might enable Britain tpj scarry
at least until the fate

on

pf that Plan

Gross, Rogers Adds
(Special to The Financial

Paid-Up

the

is decided.

Kenya
1

Aden and Zanzibar

Subscribed Capital

PHILADELPHIA. LOS ANGELES, SAN FRANCISCO

TELEPHONES TO: Hartford,!

Burma, Ceylon,

ANGELES, CALIF.—May-,

joined the staff of Buckley
thers, 530 West Sixth'Street.

Puss BuHding
•l/TT(*6B«7

Reserve

PRIVATE

India.

Colony and

*

t

and Uganda

LOS

Chronicle)

pard G. Froemke,. formerly with
Stephenson, Leydecker & Co., has

LIMITED

the Government in

Kenya Colony

-

con¬

an<J

^Thi?
_

(Special to The Financial

NATIONAL BANK

by the cir¬

suspend jthe,

of

be¬
that

application of non-disprimipatiop,

.805%

with

of INDIA,

means

Britain may be forced

797

2,991;

are

be exhausted long be¬

1.35
•i»

5.77

'

.78

.

to

inclined

application of
Agreement.
As things

.48

:

Bankers

stake

1.01

the

INCORPORATED

at

Government

\
>1

BANK and INSURANCE STOCKS

GEYER & CO.

is

to be lenient in the

AVERAGE
•

1946

876

—

Trust

.-i '•

Earnings

1947

.805

6211-

National City
New York Trust—

I f J.M

cial propaganda claims it to have

Earnings

.635

830

_

of

offi¬

as

$2.76

.

.075%

,

WHOLESALE MARKETS IN

instead

harder,

175 •:

Trust

Manufacturers

...

softer
it

made

2,197 - f

—

Irving Trust

S.

sterling

having

.49

808

National

Guaranty

Operating

6,797 i"

First

U.

67

1 ij

the Government is

5.01

384

Bk. & Tr.

Exchange

Public

NEW YORK 5:

Marshall
...

widespread,, feeling

a

now

1,121 V
497 * I

Hanover___

National

Chemical

N Y.

to
df

\

392

Bankers* Trust

Chase

Exchange

$.51

$409

Central

7-3500

Telephone: BArclay

Rate of

Return 1947

Net

Operating

NetOper.

from Ve%

Bank

SECURITIES

Request

Slock

enough

1:

made

Net Earns.

1947

Bank

Corn

York

misled.

maintenance

the

assistance

a

Estimated

Estimated

Additional

Mid-Yr.

BANK STOCKS

\>»

banks

or

not

were

,I^lan.

II

Estimated

Assets Per

Laird, Bisseli & Meeds

to

sterling,

has accentuated the drain,

NEW JERSEY

19 NEW YORK CITY

of

intelligent

that

effort

supreme

On the other hand,

Governments

are

gravity

prospects of substantial American

of the time

agreements

vertibility

full

convertibility beyond the turn of
the year depends entirely on the

July 24.'

1947

BROADWAY, NEW YORK 5,

They,-

conclusion of con¬

the

for

a

the

British

the necessity

holders

realize

con¬

of

the

the

individuals,

or

The extension

purely temporary.

limit

making

whether

,

dollars which it has obtained from

realize

foreign

disappointment
in London following on Mr. Mar¬
shall's statement that the State

was

efforts

the

to make

avert a crisis.

indeed.

for

requests

of the situation and

There was some

Share at

Mem her*

workers

Britain has contributed its Department announcement of the
in dollars. It exemption from Article 9 of Brit¬
means
that in practice the ain's trade with British Colonies

EARNINGS COMPARISON

120

counteracted

ceptable, however, the amount of
American assistance under the
Plan would have to be very sub¬
stantial

officially-in¬

Moreover, it has largely

for

'

on

cessions.

quota to the Fund
Fund

British

wards

Government

of

this

ing of the American attitude to¬

the currencies of all
beneficiary countries. >• In order
that such a "string" should be ac¬
tibility

TABLE

Circular

Presumably

spired optimism was aimed at in¬
ducing foreign holders to retain
their sterling balances.
Yet its
result has merely been a stiffen¬

poses,

Earning

2nd Quarter

to

entitled

under the

One

'

455

Trust

Bankers

convertibility of sterling — pre¬
mature
in the sense that other

aged in official circles.

operating profit per share has
In
view
of
these and other
been
calculated
and tabulated. Payments Agreement with Egypt.
changing factors in the bank situ-- The nexft
step was to increase the It ^appears that Egypt -j* and of
1946 rate of return of each bank, course every other country which
rTABLE I '
has
convertibility
agreements
as shown in Table I, by % of 1%,
V
'
t
is entitled to de¬
.55
$2.56
thus to arrive at an assumed rate with Britain
$ 465
Bank
of
Manhattan
.51
25.97
5,053
Bank
of New York
for 1947 on which to estimate net mand the conversion of sterling
.68
net

'

be used up by the end

may

of this year

.Joins First California

Chronicle)

Special

CALIF.—Rich¬
Ryah Has 1 beem added to

LOS ANGELES,
,.

ard

T.

the

staff of Gross, ■ Rogers

of

the

change.

The Financial

C^roniole;

.

1

,CALIFJ—

& Co., Chester Marcel, Jr., is now .conSpring Street, members, riefcted with" First
California Com¬
Los Angeles Stock
Ex¬
pany, 510 South Spring Street.

458 South

undertaken

to

LOS. ANGELES,

\

Volume 16G

Number 4618

THE COMMERCIAL & FINANCIAL
CHRONICLE

(529)

13

Bottleneck of Careless Sales
Clerks
By ROGER W. BABSON

NSTA Notes
If

possible your Chairman would appreciate hearing
affiliate chairmen regarding the results of their efforts
.

advertising contracts.
feel

if

over

our

We are, at the present time

would give

group

us

a

bit

over

effort

more

from
to

Mr.

Babson, deploring neglectful sales clerks, asserts if
"they are courteous and anxious to serve,
general business will be good for at least year or two."
Holds satisfied customers
pay good divi¬
dends. Favors merchandising chains as investments.
Not long ago Boston's famous
cartoonist, Dahl, pictured a well-dressed
gentleman
standing on his head in a well-known department store
trying to attract the attention of
some
salesgirl. I know how this man felt standing on his head

all

secure

$16,000 but

$20,000.

lately
by
salesper¬

-

We understand Cy Murphy of
Mackubin, Legg & Company, New
York City, gave some help which brought in a
good contract. May we
:

sons

7

With

the

Convention next

week

in Boston and

Convention
we have naturally

but

greatly

appreciate

the

work

done

by

retail

Though
their

Chronicle,"
of

many

untiring

us

for

may

efforts

the

work

consider the

will

they

May I request those of

,

in this issue to do

space

members who

our

hang - over.
During the

Beck,

war

years

most

workers

have

are

immediately

so

done

this

had

year.

Roger

'•

HAROLD
j

NSTA

'

:i

'

ices.

30

Today,

program for the

special train

on

entertainment

I

announces

;

'

us.

old

doing
I

get

1

*

'

minutes

The

Hotel

more

Southern

or

Harry M. Sheely.

Hotel, reservations should

be made

through

important

J.

•

Armstrong,

Chairman,

Stein

Bros.

&

Boyce;

to

Frank

E.

King, Co-Chairman, Stein Bros. & Boyce, or J. Wilmer
Butler, Baker,
Watts & Co., President of the
Association.
"
~
*

The Investment Traders Association
of

the

following

delphia

Philadelphia has prepared

program when the Convention

Specials arrive in Phila¬

the evening of August 9:

on

future

6:15 p.m.—Special

trains arrive at

\

.

Broad

factor

business

on

and

travelling

in

are

a

most

determining

conditions. -'You

don't need to be undecided dbout
the

trend

you

the"

of

business, ljust note
how salesclerks act. They'll
give
courteous

'

Inquiries regarding the Baltimore
Party should be addressed

Edward

salesclerks

salesmen of the nation

4:15 p.m.—Convention trains leave" for
Philadelphia.
Guest fee for the Baltimore
Party will be ten dollars per person;
tickets can be obtained from Charles
Gross, Harry M. Sheely & Co
For those desiring rooms
Friday night, August 8, at the Lord Balti¬

If

answer.

they

are

and

anxious to serve,
general business will be good for
another year

they

are

two

or

at

least.

•

indifferent and

slow

to

look for a falling off in
sales, accompanied by gradually
increasing
unemployment.
One
serve,

4

:
.

V

•; "
in sponsoring
10:15 p.m.—Buses return

for present indifference is
the minimum wage laws of vari¬

Street

Program for

...

'7:00

Party

are

$7.50 each.

Sunday, August

8:45 a.m.—Buses
•

For tickets

to

I

believe

in

good

,,

/

.

'

>

League

Island

Savarm

and

Navy

Restaurant

Yard,

J.

South

Phila-

NEW

ISSUE

Sundky, August

Visiting

and

all

for

guests just for the
rooms.

any

.

special

John B.
Swann,
'

The

will

>

.

Garden

Fehrig, Reynolds
*

Babson charts also indicate
that
increase in business failures

hand like

the

should
a

lock

Dated August lj 1947

..

{ A

'

can

&
&

Committee

will

be

City Bank of New York

warns

inflationary

spurt may

if caution is thrown to the
wind.

come

Commenting

on general business conditions
the August issue of
Bank Letter" of the
National City Bank of New York
draws the
following conclusion: <S>
"it is now clear
that, as matters over the past nine months. Infla¬
have
developed, bearishness has tion thrives on three
conditions:
been overdone.
People have un¬ (1) continuous
additions to the
derestimated the strength of
sup¬
money supply; (2) general short¬
porting influences in the economy

the

"Monthly

age of

—among them the

large deferred

demands for goods,
ports financed to a

huge

our

great extent
by American gifts and loans, and
the degree to which
business has
'cleaned

house'

warning

of

the

break

last

very

largely

warnings

following

Fall.

that

stock

It

become

the

filled.

market

ficult

indeed,

was,

because

of

brakes,

were

from

such

the

ing

and hence that the recession fear¬

nary

ed did not materialize.

are

are

taking it for granted that

in

new

a

inflationary

trend and that business
to abandon prudent
so

can

up¬

afford

policies which

generally salutary

to

what

say

week

one

to

that
the

not

Due

up

to the present

levels; already

extraordi¬

our

being curtailed in
'■
,r

"Certainly

this

is

throw caution to the
the risk of

Thomas

']

no

All time -is Eastern
Daylight Saving.




Philadelphia

•

:

-

August 4, 1947.

2.

-

*

:,

*

.

--

'
1<

V

,

i

i

time

winds, with

tionary spurt, from which the
action could be

a

good deal

serious."

were

placed privately

being offered to the public.

serially

to

to

inviting another infla¬

•_

August 1, 1967

Kuhn, Loeb & Co.
t

mar¬

J

.-\l

F.

exports

some

also be accom-1

by:

be
An

improbability of exports hold¬

kets.

of record only. These securities
are

will

next.

additional factor of
importance is

plied to inventory buying in time,

treme of

steadily less acute,, and
pipelines are becoming well
As, for psychology, it is dif¬

many

ap¬

we

goods; and (3) bullish psy¬

chology.
At present the money
supply, though huge, is no longer
increasing.
Shortages of goods
still exist, but in most lines
they

ex¬

.

headed

a

Says Pessimism Is Overdone
But National

.

Co., 123 S. Broad Street, Philadelphia
2; Harry
Co., 1528 Walnut Street,

or

hatchet and handle.

transportation details

Fete

key

a

j

Philadelphia Party

to

them

hand-in-

go

and

Equipment Trust Certificates, Series 42
1m ,t

store
to

advertising and good

be; Thomas

while in
Philly, contact
Lilley & Co., Packard Building,
Philadelphia 2, Pa.

O'Rourke, Stroud
/

Good

salesclerks

Corporation

information will

through Saturday

9 and 10.

.

For

fits.

fac¬

railroads.

General American Transportation

*viie-Stratford on Saturday night instead
of the special
trains, contact
:
George Muller, Janney &
Co., 1529 Walnut Street, Philadelphia 2.
"
,

indus¬

in

your

attention

.

stay at the Belle-!

modated

than

more

they do come in. This will
greatly help your advertising to
"pull" better and show big pro¬

$10,136,250

tour of the City.
12:30 p.m.—Convention train
leaves for Boston.

Love, George E. Snyder &
Co.,; 1411 Walnut Street.
Should any Convention special guests care to

»•*

rather

people into

pay

when

is

chains
or

more

one
reason
why I
savings in merchandis¬

through the undersigned, and have not been and

at

ajh'.-—Motor

Chief coordinator and
Headquarters Chairman

'

1

a

buy,

*

A Headquarters
furnishing complete service
be'maintained in the Bellevue-Stratford Hotel
4

ing

tories

attract

sales

over,

,

-11:30

*

large part of the
now

every

try.
This
invest my

Every have proved

wages.

.

I

extremely

departments must become
important aspect of

This announcement appears
for purposes

10—

delphia.

'

a

demand

light of current trends,
customers
can
no
longer
be
treated with indifference.
After
spending money on advertising to

With

ago.

at

states.crWhere such minimums .i, '.VThis, however, does not war¬
highest, the service is poorest. rant swinging to the other ex¬

9:45 a.m.—Church services to
be conducted
by the Senior Chap¬
lains and Ship Chaplains stationed at
the base (Cath¬
olic mass on the U. S. S.
Rochester non-sectarian
church service on the U. S. S. Saipan). Services
to
i.
-fee followed by an inspection
trip of one of the latest
.
fighting ships of World War II.
11:00 ja.m.—Tour of Naval
Base, etc.

•Mi

urgent

year

the

apply

Thayer, Baker & Co.

to 8:30 a.m.—Breakfast
at
the
the Broad Street Station.1

a.m.

a

factories

In

to Broad Street Station.

Guest fees for the Garden

to John M. Hudson,

Sherrerd) who join with the I.T. A.
garden party and buffet.

a

than

of

high levels and

that
soon

reason

ous

III (of Butcher &

lower

output

If

Station, Phila- are
delphia (where they will remain until departure for Because the law prevents penaliz¬
Boston). Chartered buses will be at the station to ing
saucy and indifferent clerks
take conventioneers on a
three-quarters of an hour with,
pay cuts, too many clerks
tour through Fairmount Park and
the Main Line en
don't care what
route to the estate of Mr. and Mrs.
they do or say.
Howard Butcher

♦

be

1

Salesclerks the Real Bottleneck

•«.

indicate
department store sales may

s

whom

salesgirl to wait

a

Advertising

statistics

overheard

woman,

some

us

'

peake Bay to the mouth of the Severn River.
11:00 a.m.—Visit to the U. S.
Naval Academy at Annapolis.
1:30 p.m.—Luncheon aboard the
cruise steamer.

*'

.

on

wait

is

trying
her,
finally retort: "Looka here, girlie,
are you mad or just sultry?"
to

9:00 a.m.—Cruise of approximately two hours down the Chesa-

y

Dividends
Recent

is

he

or

watched for

*

_

staffs

kindly

the

on

8:30 a.m.—Special trains from Chicago arrive in Baltimore,

,.

to

one

August 9 of those

on

she

favor

the fol¬

sales

feels

the way to the National Security Traders Association

Convention in August:

to

coun¬

the quota in
reasonably
well filled.
Hence, there is little
excuse for the condescending at¬
titude
of
the
salesperson whc

SECURITY TRADERS ASSOCIATION
PRE-CONVENTION PROGRAMS

lowing

serv¬

accustomed

however,

most

5, N. Y.

Association

—

for the lack of service.

reasons

Pine Street

The Baltimore Security Traders

became

a

Most customers were tolerant
because they understood well the

SMITH, Chairman
Advertising Committee

NATIONAL

-

time.

ter.

B.

York

We

do

was

waiting in line behind the

'•

New

double

Babson

shortage of both goods and

contemplating buy¬

Collin, Norton & Co.
.

W.

to

There

forms close Aug. 16.

as

bad

a

merchant should work for a
high | has already grown to a new
high
wage standard in his city; it
helps' as compared to previous
years.
business.
But wages
should be As retail
trade
becomes
more
adjustable to the service rendered.
competitive and customers seek
Fixed wages and hours—either
by bargains and
discounts, or refuse
laws or unions
encourage care¬ to
buy, this trend is likely to
lessness and ultimately will
bring continue. This increase in
failures
about general
unemployment.
is
largely due to the sloppy atti¬
tude of salesclerks.
Satisfied Customers Pay Good

war-time

Post Convention Issue of the "Chronicle" is
published.

ing

stores

have

1947 not too profitable,
on
Aug. 28 when our

year

demonstrated

be

Messrs

our

the ."Commercial

Murphy, Reilly and Strickland, the solicitors for
Financial

what

of

many

at the Convention next week.

&

question

no

the

Special stopping at Baltimore and Philadelphia,
into consideration that these cities by
extending hospitality
may feel an added burden in assisting your
Advertising Committee
with contracts.
However, we are pleased to advise our members that
Boston has made a very good showing and we
hope to give the results
do

can

-

taken

We

have¬

—

n't you?
There

congratulate you Cy?

because I have been stood-

myself^-

up

should gross

we

re¬

more

14

THE COMMERCIAL & FINANCIAL

(530)

CHRONICLE!

Thursday, August' 7,1947
——————mm

Wants Better Knowledge of World

Northern's

Great

earnings were

June

.

disappointing.

somewhat

nice increase of over $1.5 million in gross
more than offset by higher operating costs and

,..AS .^e result of

road experienced a

The

but this was

revenues

political

ratio

(for the3>

down to 32.7%

was

naif year

it was 36.6%) which is
among
the
lowest
among
the
major railroads for which de¬
tailed figures for the month are

the

in

road's

operating income

$1,086,000 in taxes.
June the

company

income

Federal

year

the

for

$800,000. An¬

that the company

increased its maintenance outlays
materially. The maintenance ratio
jumped from 32.8% in June 1946
to

35.1%

tRis

of

the higher

revenues

Presumably this heavy
work was done at least in part in
preparation
for
the
seasonally
heavy summer months. It is also
year.

possible that the figures reflect
desire

to

get as much

of this work

ticipated

a

possible

as

done before the

an¬

Although the June results

were

rather disappointng, the cumula¬
tive total for the first half of the
compared favorably with the

year

impressive reduction in
debt and charges among the major
most

charges

they

$19,300,000.

above

to an an¬
nual level of just about $7,750,000.
This reduction of more than 60%
Today

are

down

period. Earnings per share
on the
preferred stock (the only
stock issue outstanding) amounted
$1.97

last

share

a

before

adjustment

creased income

The road's

taxes.

half earnings
Moreover, the company
entering its seasonal peak

earnings period which should add
materially

profits.
main

six

months'

Two of Great Northern's

traffic

items

wheat.

and

the

to

iron

are

iron

The

rail

credits,; and

considerable
ment

add

invest¬

of

measure

a

support to its stock.

Indicators

ore

and

in

open

in

-

At

the

election

primary

held

last week, Alfred E. Loyd was re¬
elected for the 1947-1949 term as

Under

averages

Service,

Federal

New

—Discussion

of

the

Labor

the

in

Law,

current

Broadway, New

140

Results

York

Depart¬

of

McNair

P.

—

of

Harvard

Research, Soldiers Field, Bos¬

ton 63,

Mass.—Paper—$3.50.
■

1

•

Chaos

Planned

■■ 1

<

1

Ludwig

—

von

tion,. Inc., Irvington

on

-

October.

During

months

the

necessary to

into

the

close
net

to

the

war

New York.

in

Prewar

of

-

October

treme

period.

seasonal

ironed

boom

it

Last

out

has

most of .its

While
curve

annual

ex¬

pretty
the war

was

during

now

the

returned

with

normal vigor.

Great

year

Northen

re¬

ported net earnings of $7.58, a
share on its stock. This included

just about $1

representing

credit for

Federal

Naturally

there

income

will

be

net

a

taxes.
tax

no

credit this year. Nevertheless, and
even witlr a substantial tax liabil¬

ity, it is expected in most quarters
that

the

road

should

be

able

and

this time," Mr. Larmon stated
in an interview on July 30.

Committee

at

six

1947. The stock
been selling about

has

times

the

prospective

Alfred E.

member

influential

the

of

important and
Republican County

Committee of the County

of New

25

ovep

Alfred

years

Guaranteed Stocks

Bonds

Special Securities

N. Y. which is now

being reorganized as Loyd & Co.,
Inc., to act as underwriters, origi¬
distributors

of

secur¬

ities

specializing
in
procuring
capital for business enterprises in
Mexico.

firm

The

will

branch office in Mexico

have

a

relief

in

granting
the

form

ideas.

problems to be studied!

Chamber's

International

the

on

Advertising, he'as¬

serted, should be a survey of mar¬
kets and media, and the stabiliza¬

of

tion of rate structures.

of

to Mr, Larmon:

According

"In certain coun¬
the
advertising
man
is
goods to Russian satellite nations tries
is
"utterly
useless."
He
said: without basic market
informa¬
t'The domination of Russia is so tion.
He
must
have
accurate
complete and the control of the data on the size, location, trade
population so thorough that the conditions and competition in the
granting of goods or credits would
various markets.
And the esta¬
Only increase Russia's dictatorial
and uni¬
domination. In no way would it blishment of standard
or

government."
,v ■'
I The advertising executive sug¬
gested
that American
business

would

rates

form

advertising,
contribution

to

the

help

its

make

industry

expanded

world
'

trade."

Haiti Bonds Called for

!
!

Redemption—

Government

to

answer

Hunt

for Economic

socialism—Betty

—

The

ington-on-Hudson,
paper

New

charge

no

—

Foundation

Education, Inc., Irv-

York—

single

for

.

them for

$3.75, lower rates on large quanti¬

CHICAGO, ILL.—Donald

registration
as a

of

member

corporation, the number of Cali¬
fornia

member

firms

of

Royce

was

from 1932 to
RAILROAD STOCKS-BONDS

N. Y.

The

the

established

in

R.

formerly

1-1063
a

John Small & Co.

asso¬

in

was

1887.

Aug. 10-14,

1947 (Boston, Mass.)

National Security
ciation

annual

Traders Asso¬

convention at the

Hotel

and the

International Bank

Reconstruction

Develop¬

and

Statler.

were

of

the

signed Aug. 5 on be¬
Government of the
of Australia
by

Commonwealth
The

Honorable

Norman

J.

O.

monwealth of Australia.
Australia's

quota in

with them.
Mr. Foster
previously with Montgom¬
ery,
Scott & Co. and prior t<>
that was manager of
the bonc|
department of Chas. W. Scrantofy

sociated
was

Co.

&

of New Haven,. Conn.

Before

he
municipal
Corps

the Inter¬
is $200,-

Abf
of the
departments of

entering the. Army
manager

was

bond

national Monetary Fund

Municipal
cago

(Chicago, 111.)

Bond

Club

of Chi*

Outing.
5, 1947

(Hollywood,

&

j The application for
of Australia

Investment Bankers Association

Beach

000,000, and its subscription to the

$200,000,000.

Fla.)

wood

Foster & Co. and

capital stock of the Bank is 2,000
shares of a
total par
value of

Hotel.

was

membership

approved by the

Wood Struthers

Co., both of New

With Hallowell,

York City,

M.

Fetterolf

is

now

members of New York

International Bank in May, 1947.

—

Peteif

associate#

Sulzberger & Co.,

with Hallowell,

national

the

j

Sulzbacheif

PHILADELPHIA, PA.

Boards of Governors of the Inter¬

Monetary Fund and

Wall

Street, New York City, announce
that R. James Foster is now as¬

Makin, Ambassador of the Com¬
'

Chicago is Annual Convention at the Holly¬

director of the company.

Fund

ment when the Articles of Agree¬

Field

40

Co.,

&

Small

John

!

ment

Nov. 30-Dec.

California

R. James Foster With

half

Sept. 20, 1947

Staats Co.

Frederick R. Tuerk of

Australia Joins Fund

for

In Investment

Ex¬

1942.

William

its outstanding

Australia became the 45th mem¬
ber of the International Monetary

Angeles,

the

Republic of Haiti has called for redemption on Oct. 1, 1947,
principal amount thereof and accrued interest, all oi
Customs and Gen-^
eral Revenues
External 30-Year and interest, to be dated July 15,
Sinking Fund 6% Gold Bonds, 1947, and to mature July 15, 1957,
on the basis of 103% of principal
Series A, due Oct. 1, 1952, and
amount of new bonds
for each*
Series C, due. Oct. 1, 1953, and
Certificates
of
Interest
in
the 100% of principal amount of old
Series C Bonds.
In commenting bonds surrendered for exchange*
Interest accrued on the old bonds
on the call for redemption, Gaston
and certificates to the date of sur¬
Margron, Secretary of State for
render for exchange will be paid
Finance of the Republic, stated
in cash and interest accrued or*
that the Republic intends to offer
the new bonds to the same date
to the holders of these securities
the right to exchange the same will be deducted. The formal ex¬
change offer is now being pre¬
for bonds of a new Internal (5%)
Loan of the Republic* payable in pared and announcement thereof
U. S. dollars both as to principal will be made shortly.
The

EVENTS

Royce,1

Calif., has been
elected
to
membership in The
Chicago Stock Exchange, accord¬
ing to an announcement by Homer
P.
Hargrave, Chairman of the

j

at 100% of the

COMING

President of William R. Staats Co.

With

new

'

Chicago Exchange Member
Los

bonds right to exchange
internal issue payable in U. S. dollars.

offer holders of called

copies; 10 copies, $1.00; 50 copies,

Wm. R. Staats Co. Is

of

to

And World Bank

City.

ciated with Blyth & Co. and was
an
officer in the Chicago office




"

ties.

Mr.

Teletype NY

re¬

Mooney

Show Me Any Other Country—

Knowles

and

D.

E.

change is increased to three.

New York 4,

Y.—cloth—$3.00.

White Plains,

William R. Staats Co.

Telephone BOwling Green 9-6400

N.

An

Board.

f*

25 Broad Street

edition—James

—Harper & Brothers, New York,

Loyd headed the over-the-counter
firm of Alfred E. Loyd & Co. of

nators

of Organization,

Principles

vised

York.

For

Madison,

Loyd
.

a

1947

earnings results. ' This ratio ap¬
pears
quite low for a stock of

GUARANTEED

the

that

the

expressed

Larmon

i * Mr.

opinion

lead to a

will

interchange of information*

The first

by

and

world

the

European countries, rejuvenation
the exchange of goods
and
services is of utmost importance

of

to

report between $7 and $8 a share
for the full year

recently

of

fuller

New 5% Issue

Bureau of Business

and

Service,
Wis—paper—$1.00.

years

its

sustain healthy econ¬
people in most

goods both here and

omies and healthy

r,

Pattern

Industrial

Commerce

Research

entry
averaged

operating income in the July-

well

of

our

road

two-thirds

into

divided

international

for

it

July-

ten

immediately preceding

distribu¬
develop

help

can

process

trade
aboard. He
two ideological camps and with
reported that the meeting fostered!
living standards- far below those cooperation among business mera

Educa¬

—University of Wisconsin School

four

delegate,

a

believes that adver¬

Hudson,

improvement month by month in
the second quarter. The real bulge
the

as

part of the

a

as

markets

Wisconsin, The—Edgar Z. Palmer

in

tising
tion

planning—paper—650—
-

he attended

Larmon

Mr.

Switzerland®

in

meeting

merce

national problems.
"With the world

,

gradual

comes

enable Americans

help the people of these nations
develop
a
democratic form .of

t

Study

—

trends

deficit

—

Specialty Stores in 1948

seasonal

a

Larmon

S.

which

at home would

credits

Foundation for Economic

operating
with

issue

University Graduate
School
of
Business Administration, t1 Division

economic

conditions

The

Survey"

"Guaranty

of the

die first quarter,

Z.

of

Bureau

one

normal

an

Business

of
the
question
whether a system based on indi¬
vidual freedom can be mixed with

summer

Sigurd

standing of world conditions here

of
!

'i*1

the

a

to make sound decisions on inter¬

and

Research

^—Malcolm

Committee

to be found in the railroad indus¬

try.

Commerce

Operating

early fall months.
pronounced

y.—.

Wisconsin—E.

in

of

ment and

movement

the

Great Northern has
most

N.

Current

of

Conditions

i

concentrated

Council, 112 East

long,

"a

trade

process."
Commenting on the recent In¬
ternational
Chamber
of
Com¬

under-,

19th

move¬

ore

spring while the wheat

that

better

Post War World

Mises

is

added

the

make

world

of

drawn out

He

peace.

Garrison Villard—

rized—Oswald

Is

15, N. Y.—Paper.

Repsblican County

situation

and continued

York,

To

ic

cation

here and!
revivifi¬

industry

by

could

aboard

econom¬

Being Milita¬

How America

Guaranty Trust Company of New

Alfred Loyd Reelected

wide

e

energetic

and

intelligent

of

that

indicated

Larmon

Mr.

world¬

Madison, Wis.—paper—$1.00.

sounder

added.

tional trade is

settled

Business

and the still strong

imports

Fifth

730

& Co.,

and

charges,

U. S. economy our own
could be doubled," he

the

ing

Avenue, New York 19, N. Y.—
paper—$1.00 (500 to public librar¬
ies and nonprofit institutions).

j—E. W. Axe

tions, the sharp contraction in debt

place Great Northern among the

a

of

action

5

the

opera¬

that

a more

the

Lakes

Houghton

-

School

efficiency of

expresses

belief

tant to

ment does not get under way until

Great

Axe

Palmer—University of Wisconsin

inherent

&

by

lack

in¬

for

Inc.,

coun¬

increasing purchases of
goods and services, and by elimi¬
nating existing obstacles to world!
trade.
"Without seriously affect¬

b i cam,

u

non-dominated

aid

vitally impor¬

with

compared

year's opening

now

—

favorable long-term traffic trend,

of $0.80.

is

1947

Studies Series B No.

Street, New York,
in fixed requirements is equiva¬ paper 150.
lent to about $3.75 a share on the
stock

Young
R

Sweden,

—

tries

f

o

interna¬

1930s annual fixed

were

$

could

revival

carriers during the past ten years.
In the middle

1946

to

New

financial condition all combine to

increases.

waee

16 Wall Street,
5, N. Y.—Paper.

dergone
judicial
reorganization
Great Northern has accomplished
the

Trust

Bankers

Company,
York

Copper

even

—

.

Economic

This

taxes

close to
was

price has been

recent

rate, which is certainly

Aside from roads that have un¬

A year ago
accrued no

taxes.

income

were

other factor

dividend

States

United

increase

was an

in

month

the

in relation to the current $3

low

Study of

—

the Pension Plans of Banks in the

net

in

decline

of

Federal

Also,

Northern.

Great

of

S

president
Bank Pension Plans

observed

a

Larmon,

protected and could readily
be increased.

One of the most important fac¬

,

tors

caliber

well

available.

now

the

,

-

two month stay in Europe, where he
economic conditions in France, England and

and

Sigurd

that of a year
earlier. On the constructive side, the company is still showing com¬
mendable control over its transportation costs.
The transportation
Net operating income was about $900,000 below

taxes.

Conditions

Sigurd S. Larmon, recently returned from Europe, sees that con¬
tinent divided into two
ideological camps. Urges withholding aid
to Soviet satellites
and suggests greater U. S. importations from
European democratic countries.
''

Stock Ex¬

change, 111 South Broad

Street,

|

Volume 166

Number 4618

THE COMMERCIAL & FINANCIAL CHRONICLE

(531)

A. N.
Our

Reporter

Governments

on

Central

eligible issues have again firmed un
slightly fol¬
period of dullness during which
efforts were made to

lowing the
.

Since there

.

.

was

.

down

ley

through or activity generated
by these
as investor's came
into the

.

.

\

during

month

sources, were the heaviest of
in

some

the

measure

restricted

bonds.

Despite the

-

the

.

July,
month

any

lows that

new

made

and

.

.

office of

Harris,
h

-

.

Up-

Coi

,&

a m

and

.

pressure on

.

stock

local

.

by most of the

.

Mr<

trader for the

informed

the ineligible list, the shorter
maturities
of the restricted issues such as the
2V4S and the 2y2s due
1962/67
and 1963/68 have acted
quite well, with greater interest
likely to be
evidenced from here on in the above
mentioned 2V2s.
The New
York State Insurance Fund was
again in. the market
adding to their
holdings of the Victory 2%s.
Savings banks and insurance com¬
panies were also buyers of these 2!/2s in rather
sizable amounts.

taken from

are

prior

-thereto
Alfred

N.

;in

Plumley

charge of

the

,

trading

municipal

department of

National

Bank

of

was

the

First

The

study shows totals

tered

members

Stock

.

714.

In

value

ible

compiling this figure
given to fixed assets

assets

not

into

securities

readily

cash
were

and

marketable
at

their

Aggregate
these

indebtedness

to

same

companies

for

amounted

$2,590,681,487, made

princi¬

up

pally. of bank loans and customers'
clude

opinion seems to be growing that the
Treasury will offer
long-term restricted bonds to non-bank
investors during the
Sep¬
tember refunding, operation.
While -it is rather
The $2M> -billion-dollar
generally be-;
baking
lieved the amount to be issued will
be about $1
billion, -it may not; industry, second largest of the na¬
exceed' $500,000,000
according to some money market
tion's food groups, is face to face
followers..
The talked about new
obligations would be along the lines of
the' with one of the most serious
Series "G" savings
bonds, which means a non-marketable issue.
problems of its history, according
to Harry W.
The funds obtained from the rumored new issue
Zinsmaster, Chair¬

credit balances.

This does not in¬

borrowings

curities such

as

.

.

.

.

.

.

and

used to

down

funded,

the

the

with the
«

part of the
amount

bank

of

held

securities

Treasury would

be

maturities.
that

.

would

.

.

be

to

be

tion.

Speaking
Board
at

,

;

1

w

W'j

Wi

...i.

-

.

.

.

.

investors already have assets
that are not
readily.market¬
able and more of these will
be acquired when the
building industry
/opens up. . . , They would prefer to have their government
holdings
in marketable issues.
It is believed that if
a new restricted issue
should come- along it would
be a much
longer, maturity than the

*

...

outstanding obligations.

The rate would

;•.

probably be 2%.%; :

DEBT MANAGEMENT

'

.

V

'''

'

,

w

The money
managers, according to reports, are now
ready to;
tackle the broad
problem of debt management more
vigorously and
the rumored new
restricted, issue would be the first
step in the new;
•program.
Market control, one
phase of debt
management, has;
thus far been carried out
through the selling of marketable issues
in the open market. ; . While this process could be
continued, it
cannot go on,
indefinitely.
The pressure of
pumping issues into!
the market would be
relieved by the issuance-of new.
4

*

.

.

.

^

.

.

.

.

securities.
By mopping up some of the
demand, with a new issue, the
supply side of the market might be
relieved until the
mortgage
market
.

opens

■'

too much

up.

.

trouble

.

.

in

within desired limits.

From that

time

there

on,

should

not

.

.

on

1

authorities

are

preparing

for something
important because they have
of these bonds down

gradually but steadily.

"

■

.

the

'

ineligible

been

means

market

forcing the prices
Could it be a new

of

prices, at the
pects for
as

well

a

as

of the

the

ABA

July 29, Mr. Zins¬
all

possible

ways

holding down their

same

short

time that pros¬
1947

corn

inflationary

crop,

pressures

and

high wheat export goals,
stantly tend to force their

pursuant to

Commodity Exchange
Requirements, which are the

Act

means

wheat

more

with

large-scale
may force
high level.

"A

short

corn

diverted

in

the

.

.

Firms'

inventory of exempt

se¬

tory of non-exempt securities at

the

amounting to $775,-

Customers'

in cash

ances

amounts

debit

accounts, which
due

are

from

customers

securities,

are

due and

payable to

accounts, which

tomers'

are

credit

balances

cus¬

funds

in

counts with open contractual

of lard,
flour,
sugar,
syrup and other ingredients.
"The nation's bakers, who
only
recently
re - pledged
maximum
quality and service to consumers
in launching a
$1,500,000 promo¬

mitments,
ceived
ment

which

from
for

are

com¬

funds

customers

securities

ac¬

in

not

re¬

pay¬

segregated

Commodity
quirements,
owed

to

credit

balances
in
margin
ac¬
counts, which include credits aris¬
ing from short sales, amounting to
$73,067,483.

which

A

to

.

would

.

be

requirements of Exchanges or

and
State
regulatory
agencies amounted to $33,760,247..
Firms' inventory of
exempt se¬
curities at market value
reported
by these same firms was $403,507,914 with their
inventory of

non-exempt
value

securities

amounting

to

..

The uncertaihty

*

...

be

offered

non-bank

even

bring buying into the

showing

due from customers

ances

in

the kind of restricted
bonds that may
in the future:
may be in

The

banks

amounts
on

borrowed

from

customers' securities to¬

T'his advertisement appears as a matter
been arranged

measure responsible for the

1

tomers

demand,

on

by these

V >

.

...

.

.

.

balances
are

in cash

accounts, which
pend¬

ing completion of securities transf
actions, totaling $41,371,123. Cus¬
tomers'

credit

counts

balances

with

;

SEPTEMBER COUPON

*

The Company
at

the

rate

of

commitments,

which

received

customers

ment

from

for

diately

securities

available

amounted

to

purchaser will, at

'

The SePtGmber refunding is a very lively topic of discussion
bank- holders of' the
maturing issues are seemingly

V

becoming

Notes

up

to

per annum,

any

accounts,
balances

The

which

.

.

on

amount

firms'

include




credit

borrowed

from

securities

were

borrowed from banks oh
and

partners'

both exempt and

securities,
non-exempt, was

$327,104,320.

and at the Company's request,.the

same

time prior to August 1, 1948, purchase additional
of 3%

per

LEHMAN BROTHERS
August 5, 1947.

delivery;,
Cus¬

borrowings on exempt
$107,094,800 and
non-exempt $214,144,966.
The

...

.

pay¬

imme¬

show that

securities

...

...

for

customers'

on

more

doubtedly
more
refunding, especially by holders of the
maturing notes that own them at
100, because they would lose in.come if
they went into lower coupon issues
that might be offered
them.

not

arising from short sales,
$70,887,087.

amounts

banks

as

reconciled to the belief that
they will not be given as much as
they
bad! hoped to get.
A 15 to 18 months
1V8 % appears to have the
rnost followers at this
time.
The issue will
go because the de¬
posit banks have "Hobson's" choice.
Nevertheless, there will un¬
be
self

in

amounted to

'■

rate

funds

were

$31,344,346.

i,

$7,500,000 hearing interest at the

ac¬

tomers' credit balances in
margin

has sold privately $7,500,000 of these Notes, bearing interest

2%%

in

contractual

open

.

.

as

funds held for customers

.

August

firms

$661,124,753 with customers' credit

American Stores
Notes, due

reported

were

member

same

.

V.

!

,

Customers' free credit
balances,
are due and
payable to cusr

of record only, the financing having

•f

$97»-

were

ing to $731,832,760.

privately through the undersignedf

$15,000,000

"

some "
attention that is being given
the 2Ms
due 1959/62 and the
2^9 due 1962/72 and 1963/68.. / The
bonds
I, are being looked upon as 1952 obligations, the year~ in
which '
they become bank eligibles.
,,
.
" The 21/4S due
12/15/59/62 were bought first because of
the small
holding of these bonds by government accounts.
Switches were
then' made .into; the
2V4s due 6/15/59/62, because
they became bank
eligible ahead of the December 2%s.
Now the trend is into
the
2 V2S due
1962/67, .principally because of the better
yield, although at
the same
time; the eligibility period is. lessened
by more than a
month!'
Government positions in. the
forementioned bonds are
flow believed to be very limited.
'

amounts

cash trans¬

securities,

out¬

investors

the
on

in margin accounts amount¬

.

over

market

at

$376,160,682.

Customers' debit balances in cash

accounts,

,

Fear that all future issues of
restricted bonds

non-marketable, might
standing obligations.
v

.

firms

transac¬

on

Federal

new

.

these

Re¬

regulated' commodities,

MARKET ACTION
restricted issue, it is
believed, would bring to an end the
gelling -of bank eligibles by non-bank
investors.
These holders
Would want to
keep their most marketable
securities, the bank ob¬
ligations, because they would need obligations that
could be readily
turned into cash.

Act

to
$47,636,031.
Cash
exempt securities segregated
particular purposes pursuant

.

.

Exchange

customers

in

to

pursuant

amounted
and

imme-

mediately available for delivery,
totaled $36,375,229 with customers'

tional

$418,479,278.

Funds

which

pending com¬
pletion of securities transactions,
amounted to
$153,430,035.
Cus¬

form

$1,548,330,006, made

principally of bank loans and
customers' credit balances.
Cash
in banks amounted to
up

bal¬

cash transactions in

in cash

eggs,

to

055,362 with customers' debit bal¬

on demand, were
$712,665,772 and customers' credit balances

tremendous

$514,-

as

Aggregate indebtedness

actions

$863,724,658, with their inven¬

tomers

means

For these firms

curities at market value amounted

held for customers

also

536

York

to

which

.

.

changes or Federal and State reg¬
ulatory agencies were $36,004,659.

Customers' free credit balances,

to

sharp price rises in corn's end
products," Mr. Zinsmaster said,
use

$50,453,910

and

$281,675,257 with customers'
debit balances in
margin accounts
amounting to $752,487,156.

export buying,
flour costs to a

"of which bakers

to

on

com¬

were

factor, together

crop

cash

customers

regulated

exempt securities
segregated for particular purposes
pursuant to requirements
of Ex¬

on

ever, presents a real headache.
"In
the first place, less corn

animal feeds. This

and

685,473.

program, fully realize that
issue of greatly restricted bonds?
v..
While a new
offering might; they must overcome this grave
take the outstanding
eligibles somewhat lower, this shoild be
situation while being careful to
tempo-!
rary.
The long range effect should
not be unfavorable because maintain
quality production," Mr.
marketability is still of more than passing interest to
Zinsmaster said.
investors.
...

owe

in

market value

r

soon

firms

own

extremely well in holding the
price line," Mr. Zinsmaster de¬
clared./ "The corn situation, how¬

new

amounts

transactions

con¬

costs up.
"To date bakers have succeeded

quantities

keeping the prices of the restricted bonds

.

meeting

a

exploring

and

shortening,

be

*

Evidently the

Chicago

are

Non-bank investors,
according to reports, do not like the idea
,- of an issue
that will not be
marketable, but there isn't very much
they can do about it.
They have the funds to invest,
and, after
/all, there is no safer place to put them than in
Treasury-issues,'
whether they are marketable or
not.
It is being
pointed out that,
-non-bank
<;

.

at

Governors of

master said that bakers
currently

"MARKETS" PREFERRED

.

of

as

segregated

New

reported

was

amounted

for

reported

was

Funds

the

Exchange.

capital

444,875.

.

banks

modities, amounted

re¬

...

;

qf American Bakers Associa¬

man

By cutting

have

in a stronger
position to deal
largest owners of the
maturing

commercial banks, the

obligations.

/

would

retire

on

se¬

municipals.

Cash in

$602,069,288.

„

~

exempt

on

Exchange

registrants,

tions

government bonds

.

Stock

members of

Stock
net

convert¬

included

both

Member Firms
these 3,276

were

Or

Poses Serious Problem

The

New York
Of

no

market value.

partners' securities,

022,507,231.

New York

Says Short Corn Crop ;

SEPTEMBER REFUNDING

and

and

was

other

.

$108,551,138 on exempt se¬
curities and $247,732,372 on non-

exempt and non-exempt, was $1,-

(c) regis¬
trants in each of the ten
regions.
Net capital for all
3,276 regis¬
trants was reported as
$923,886,-

Minneapolis.

.

the

of

Exchange;

:

taled

exempt securities.
The amount
borrowed from banks on firms'

for

each of the items for
(a) all of the
registrants covered; (b) all regis¬

.

.

th£ most

date;

Plumley
was
formerly bond

.

.

The data

Rand

♦Tower.
,

far, which explains

so

were

to

resources and
liabilities^
of registered brokers
and dealers.

p a n y,

•

according

0+
The Securities and Exchange Commission has made public a
statistical report which
presents data
based on its first study of the

recent report filed
by a total of
3,276 registrants as of a 1946 fiscal

Re-

|

and Dealers

principal

Com-

-

.

of

with

and Liabilities

Registered Brokers

public

...

Sales

be-

Central

2s, the partially exempts and the
longer
bank obligations still hold the spotlight because
maturities are being
extended for income purposes.
The ineligibles have
moved up
slightly from the lows of the year, since the
authorities have been
less aggressive
recently in their selling of these bonds.

,

Al¬

asso-

ciated

.

market.

term

has

•come
•

by lowering quotations.

moved ahead

The intermediate

.

securities

follow

no

developments, prices
.

these

on

—

Of

fred N. Plum-

Prices of the

bring the market

Reports Resources

Republic Co.

MINNEAPOLIS, MINN.

By JOHN T. CHIPPENDALE, JR.

SEC

Plumley Joins

15

annum.

16

(532)

THE COMMERCIAL & FINANCIAL
CHRONICLE

-

Hits Government News
Agency Plan
Kent

Canadian Securities

Cooper of Associated Press
would

By WILLIAM J. McKAY
In

this

tween

ism

two

of

ours

the lines

are

now

side and freer world trade based

one

of

Foremost

in

d

struggle for the attainment of the latter end
stand this country and Canada.
By wholehearted support of inter¬

itation
tions

of

of

the

the

for

world

restoration of

for

and

foreign trade

the

On

encouragement has been given to

economic

less

the

\

costly than its inevit¬

Also

and

the

part
be

the

to

fostered

program

country and Canada.
A
requisite, however,
present European economic

At

the

pound.

With

the

future
to

successful

opponents

of

free

a

world would be attained.

sential

ity

of

the

the

Allied

gle,

so

pound,

Nations'

be

which

much in the

successful

es¬

Europe.
remains
for

an

and

those

of

the

of

countries

confidence

where

monetary

instability
now
precludes
clear approach to economic
construction.

in

any
re¬

Therefore whatever

sacrifice is made

now

while there

is still

time

ropean

financial breakdown will

to

stave

off

the Eu¬

CANADIAN BONDS
GOVERNMENT
PROVINCIAL

There

a

news

ganda
news."

especially in the short term
The

area.

fected

internals

owing

less af¬

were

the

to

duce

strength of
free funds which were in steady
demand.
In sympathy with the
decline in New York, as a result
of the gloomy European
picture,
stocks were generally weak. The
decline in the golds also contin¬
ued with further waning of hopes
concerning governmental relief to
the gold-mining industry. On the
other
hand the prospects for a
greatly increased gold production
were
further enhanced following
the release of the latest mining
figures;
and
thus
despite
the
gloomy
prognostication
of
the
gold-mining interests, this indus¬
try now appears to be well on the
way to recovery and the attain¬
ment
of the prewar
production
level.

that

imposed

in

improvement

here;
ment

to gain an
what we have

years

ports

do

that the

and

of

have

served

this

it

the

physical

toward

existence

advanced

Taber

the

and

the

January budget proposals

once

and

back

effective

it

re¬

With Chair¬

the

House

CHICAGO, ILL.
ment is made

CANADIAN STOCKS

a

of

—

Announce¬

of the formation of

co-opartnership under the

and

over

from

previous

A. E. AMES & CO.
INCORPORATED

stitutions heretofore conducted at'
the

same

address

Woodruff,;

by

Sholten & Co.
TWO WALL STREET
NEW YORK 5,

N. Y.

Announcement is also made of
fice

at

61

a

Broadway,

branch of¬

City, which will include
RECTOR 2-7231

NY-1-1045

orders

in

municipal

government,

and corporate securities.

Partners in the

TAYLOR, DEALE
&
64

Wall

COMPANY
Street, New York 5

WHitehall 3-1874

broker¬

a

division for the execution of

age

are

York

New

new

'

„

organization

William A. Sholten, Morris E.

Knight, George R. Schneider and
Ehlenberger. Messrs. Shol¬

Arthur

ten and Schneider

were

previous¬

ference

between

Ehlenberger

with

were

New York

E.

F.

and

for

Since

new

January,

Mississippi River basin. While the

how

to

billion

The

flood

SECURITIES
Government
Provincial

Municipal
Corporate




dispatch

"Financial

Chronicle"

of

in

the

July 10

stating that Wilbur Irion had been
appointed Vice-President of the
International
Denver
been

was

Trust

Company in
error,
we
haye

in

informed.

'

.

,

i

.

plan for the

often

of

the

major

branches

of

the

revised

government
their

in

departments

requirements, most

the

direction.
with the
President's
approval,
made
smaller additions, such as raising
And

Govern¬

upwards
Congress
itself,

allowances

proved by Congress compare with

under

(Continued

the

veterans*

on page

41)

Appropriations for the Fiscal Year Ending June 30, 1948

(In Millions of Dollars)
Proposed

Accepted

by

by

Percentage

President

Congress

Reduction

-—

5,716.8

5,482.5

4.1

;

Department—Civil functions

619.7

502.1

19.0

:

3,513.0

3,268.8

6.9

8,500.5

8,188.8

3.7

2,031.0

1,231.0

Military Establishment

Sen. Amer.

War

Equip. Issue

Navy Department

American Transporta¬
Corp. has negotiated the sale

General
tion
of

of

institutions.

will

.

The

George H. Kountz With
to

The

Financial

CINCINNATI,
Kountz has

with

Tax refunds

certificates

.

£.

(

x—

_

—

,

Postoffice Department
Labor Dept. and Related

Other

related

Agriculture

523.0

•;

39.4

H3.2

453.8,,,
1,531.7

1,545.1

—

-,

,

0.9

Agencies
103.6

75.9

976.4

SO 1.7

7.7

*699.7

693.6

0.4

805.1

613.0

.23.9

296.1

Labor Department
Federal Security Agency

194.6

34.3

26.7
"

agencies.

Department

Interior Department
Commerce Department

287.0

191.9

279.7

—

232.7

.

33.1
'

State

Department
Justice Department

-—

-

111.5

20.6

:16.8

107,5

3.6

:

,

'

24.4

;

55.3

27.4

;

95.5

5,000.0

-

Legislative branch
District of Columbia.

7.8

80.6

95.8

x—

19.0

106.6
76.2

Judiciary -——xi
x
Government corporations

5,000.0

.

*.

0.3

Permanent and indefinite appro-

priations—
interest

on

,

>

-

the public debt

Other

Supplemental

362.3

362.3

2,191.1

1,810.0

17.4

33,860.8

31,095.3

8.2

—

...

associated

J.

Devine & Co., Inc.,
First' National : Bank ^Building.
Mr. Kountz

other

&

Other

|

Chronicle

O HIO—George

become

Administration

Treasury Department—

mature

.

-

independent offices

small group

a

serially in quarterly
instalments to and including Aug.
1, 1967. Maturities to and includ¬
ing Aug. 1, 1954, bear interest at
the rate of 1%%, the balance at a
rate of 2%%., The certificates are
designed to cover pai;t of the cost
of 2,132 tank cars" estimated to
cost $11,350,000. The financing was
arranged through Kuhn, Loeb &
Co. ■.
./.
'
' '

H.

Veterans

$10,136,250 series 42 equipment

Special

appearing

control

appropriations legislation was un¬
der consideration, moreover, some

ment, how the appropriations ap¬

of

C. J. Devine & Go.
The

President

-

Correction

CANADIAN

the

much

and

billion

Continuing the article states:
The following table shows, by

most

Knight

Hutton & Co. in

City.

the $31.3

billion
appropriations
the $37 Vz billion proposed to
be spent.

rbquest
and

out."

estab¬

ly with Woodruff, Sholten & Co.
Messrs.

Such

passage of
the last
major appropriations bills late in
July makes it now possible to
appraise how- they have come

re¬

people on earth. It has given
the greatest contribution to inter¬
state
acquaintance
and
under¬
standing.
It has built our nation

trust certificates to

the establishment of

carried

years.

the President
spend could be cut

where

$37^

down.

fices at 135 South La Salle Street

banks, insurance
companies and other financial in¬

appropria¬

authorizations

carryovers accounted for the dif¬

name

ment counsel to

for

in the budget—for ex¬
ample, $400 million to aid Greece
and Turkey, and $250 million as
the first instalment on a new $4

Sholten, Knight & Co. with of¬

to continue the business of invest¬

billion

would be made of

tions

side

$31.3

1948 fiscal year. In addition,
indicated that substantial

use

Vice-Chairman

on

appropriate
was

any

Formed in Chicago

by

foreseen

proposed

group.

intellectual standard

requested

has added many hundreds of mil¬
lions for items which were not

the

lishment of the most comfortable

Sholten, Knight & Go.

expenditures

control,

determine

amazing progress

nation

In his

to

and listening to the testi¬
of
countless
government
officials and other witnesses to

stimulated

has

appropriations
President.

the

1948,

to evoke
the press

voluminous

to be reduced.

fourteen-hundred page budget for
the fiscal year ending June 30,

they point, to the fact
boon of press freedom as

now

we

on

learned American

Nowhere in their

"the

mony-

strange assault

from any

article

members
of
the
Congressional
Appropriations Committees dur¬
ing
these
months
have
been
working
through
the
massive,

to read.

of 200

the

budget.

the

Bridges of the Sen¬
spear-heading the drive, the

ate

"It took freedom's thunder down
whole

are

>
»

Congress to re-«s>-

and Chairman

rather than to have the re¬
sponsibility rest, as it does now,
upon
the individuals who print
what they feel the people should

this

to

Wigglesworth

ity

the

of

Federal

straint has been lost.

order

on

and difficulties
Sees further economy

progress

the

man

would

in that a political govern¬
would exercise responsibil¬

be entitled

.

the President requested Congress

under

Soviet conception of press control
be

.

government

ver¬

of the Russian

form

a

be

would

practical demonstration of the ex¬
ceeding
difficulties
of
getting

biage with which the Commission's
was presented,
the. applica¬
hinted method

the

According

idea

mean

view

everywhere and every¬
thing else be banned. That, if you
plegse, is what has been the case
for 30 years in Russia.
Contem¬
plate, then, whether you would
prefer the Russian system to what
we have here today

past six months have provided a

abroad in the guise of
Continuing his attack, Mr.

of the

efforts

recent

government

a

"Stripped of the excessive

tion

private

Its

printed

The August issue of the
"Monthly Bank Letter" of the National
City Bank of New York contains an analysis and discussion of the

to carry on propa¬

agency

of

make their liv¬

two-party
system,
we
quickly have but one po¬
in charge of the gov¬

ernment.

efforts essential if taxes and national debt

.

Cooper stated:

week the external
section of the market continued to
ease

of

establishment

would

litical party

Analyzes Budget Reductions

legislation to authorize the

world's

now

the conviction that instead of our

present

National City Bank of N. Y. points out slow
in Congressional reduction of
expenditures.

while Congress was consid¬

the

thousands

where

♦

trend discerned
the fact that the

be

may

through

here

ering

solution of

and

de¬

great
and I

to be

to judge what informa¬
tion
the
people here at home
should have through the press.

came

the

MUNICIPAL

CORPORATION

sands

respects

than those thou¬

contemplate

of the govern¬

ment ultimately may prove

During the

in

While the sterling pivot
there is still hope
orderly world economy

in control

be printed,
as

be less fallible

or

these

the party.in power would
permit them to read.
Such con¬
templation probably would bring

explanation
group

to

is

of

About all you

what

government

employees placed

comment

to

offering

country soon would be if its
people were allowed to read only

political party

no

do

can

remon¬

to show why one

government

citizens who

political

a

of

achievement

but

purpose,

outstanding problem.

without

firm

revival

a

side

little

for

counterbalance

that

insinuation

knowledge
that the "key currency" method
had been adopted would .immedi¬
ately revive strong hopes for a

the

towards

its

strug¬
regardless of

this

on

counts

adequate

The

But

necessary

forth¬

a

a

the

the public good

Freedom of the Press,' put forth

party

of

futile

the

this

prog¬

in control of what
may

Cooper

lege presidents and professors who,
the'Commission

the

to

would

Kent

publication of the Commission's
report and coordinated documents

practical

Prosperity
an

restore universal financial and

of

ing

con¬

years
of the

the cost.

Atlantic

is given

as¬

under the name of
on

control

could supply.

Mr.

approach to currency sta¬
bility has achieved little or noth¬

economic

preserved

stage of doubt
contemplation of the
nothing would go further

global

war

outcome

critical

trade countries of the world.

therefore, that the stabil¬

tributed
to

It is

as

larger
of private initiative.
a

right
concerted
declaration
of
policy by the three key foreign

democratic

in

body of col¬

a

contributed

sponsibility which

has come from

step in the di¬

economic confidence than

undermining
of
confidence
in
sterling, a major objective of the

on

Cooper

"It is

intellectuals.

with

public

the

by

bate

theory
today lacks re¬

the

nationalization would

her

fearful

and

chaos is the maintenance of con¬
fidence in the present level of

the

on

of stimulation of trade

this

festations

has

ress.
The burden of their
strance is confined to the
that our press of

the

mani¬

socialistic

of

constructive

degree

fundamental
in the

all

serted, "the
most amazing

of Britain

a

benefit

result of the exercise of

a

by this

principal

modification

rection

adherence

mation

agency.

curious

here and in Canada.

accrue

any

tinued

British

the

dom,"

would

program of

economic

with

—~

serving
printed matter.

administration of individual effort
the issuance of
printed infor¬

news

control and 1

cherished freedoms.

in

gov¬

subject of
press
free-

financial policies is likely to pro¬
vide a clear indication of con¬
main

hand,

es¬

a

"Of

other

Russian Soviet conception of press

our most

into
homogeneity. As they do not
proclaim these facts, they do not
have to discount what the
free

e

that

vertible,

'f The forthcoming announcement
by the British
Prime
Minister

future

t h

restoration of full confidence in
the pound and the
greater ability
of Britain to make
sterling con¬

those countries which are hesitant
to make their choice of the alter¬
native offered.

concerning

tablish

able aftermath.

every

of

ernment

be far

na¬

of

<,♦>

Free-

on

o m

Congress

the rehabil-^

war-stricken

"Commis-

Press"

the

national schemes

the

means

one

Speaking in Williamsburg, Va., on Aug. 1, Kent
Cooper, Execu- £
Press, strongly attacked the proposal ing

a

sion

private initiative

on

the other.

on

it

says

destroy

tive Director of the Associated

clearly drawn be¬

diametrically opposed economic objectives—totalitarian¬

the

on

world

one

Thursday, August 7, 1947

Total

Based on a tabulation published in the Congressional Record for
formerly manager
of the buying department for J.\
July 26, 1947, page D616, Permanent appropriation for sinking fund
A. White & Cpmpgny.
to retire public debt is excluded.
<
:.
was

•

,

Volume 166

Number 4618

THE COMMERCIAL & FINANCIAL
CHRONICLE

(533)

•

■'•

'

\ihi

;•»')

•

•

-

*

>.i

,i
•

I-

•'

'

•

:y

-

jXf you're about

to

buy

a
i..

of value which bas made its

•

mograph,you re sitting in
the driver's

f

:

radio

seat

"famous for quality'the'

name

world over." With all its resources
'

manufacturer, there is
.•

no
'

*

■

as

the world's largest

price which Philco could
•

-

<

.

not meet

or

beat. But there is

which Philco makes
today, for the first time
-

t

'

i

in six

*'

"

'wherever
years, you don't have'tO
T
^

■

«•

"

'

"take what you can
get" any more. You
your dealer's store, choose what
you

*

,

can

really

basis of quality,
tone,performance and

*

name

and

stands for

walk into

want on the

reputation."..and

standard of quality with

compromise.

radio-phonographs

are

sold, the

quality and", value, .v-the standard

of,comparison'for radio buyers everywhere. In its

new1

models, Philco has kept faith with that reputation. la
every 1948 Philco, from $19.95 up, you get the utmost
ii*

buy it for immediate delivery..
that's why you'll want to
see the

Philco

radios

no

a

new

1948 Philco radios

and

tone, performance and workmanship for the
price yori

pay...PLl/S, the

assurance

radio-phonographs arriving now at your Philco dealer.
Philco,, the industry leader, is back in full

satisfaction which

Vast

this year, again,

.

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of years of enjoyment'and,
r

are

>

implied in the Philco

name.

production.

new

factories with the

in the world
new

are

longest radio.production lines

working at

name

new

efficiency, turning out'

*1948 Philcos at the
greatest rate in their

but much more

important, in these

days of post-war

TeadjustmentiiPhilco is; bringing jjou-the




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same

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the

impartial surveys* show that of all who;

radio-phonograph they will buy, 50%

want*a

.Philco. For 17 years, America has said ..."When
there's

choice, it's 'a Philco!" So when

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make

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purchase}

let Philco quality be
your guide.r. accept no less and pay'
no more.

CORP OR AT 10 N

-

{Surveys furnished en request*

17

THE COMMERCIAL &

(534)

18

Thursday, August 7,1947

FINANCIAL CHRONICLE

Treasury Proposes More Brakes on Gold Exports
By JOHN

licenses for private

DUTTON

thing for other people to try and put you on
spot. No matter how friendly your customer's relationship with

the

It is a natural

you

favorably. But soon after that the
world
monetary
fund
declared
that it would discourage further
international transactions in gold.

International Monetary Fund by no longer issuing
export of bar gold, and will further restrict
licensing of export of gold sent to U. S. for refining.
Local account
of Manila gold transaction shows it was for small amount.

Will back up

Salesman's Corner

Securities

That eventually stopped
tions

Following up the request on July 18 to business and banks not
lend their facilities in aid of speculative gold dealings abroad

to

market

to

negotia¬

Big

the

Wedge

gold.
"Recently, a syndicate of undis¬
closed Chinese came to Manila,

time when just for the devilment he will (See the "Chronicle," July 24, p/e>—1
will place you on the defensive. It is not good 23) the Treasury Department has world market for gold. Despite and offered to buy the gold in
sales psychology to allow yourself to be placed in this position even
warnings from the world mone¬
given notice in the Federal Reg¬
London.
in jest. When you sell securities you are selling something more than
ister of July 31, 1947, that it is tary fund, gold was sold at more
"It was not explained clearly if
a piece of paper.
What you are selling is an intangible and the only considering the amendment of the than $35 per ounce, something the gold will be returned to the
reason your customer buys from you is that he has more faith in
Provisional
Regulations
issued which may create repercussions Philippines or shipped direct from
abroad.
your ability to select security values than in his own judgment. You
under the Gold Reserve Act of
London to China.
"A
Chinese syndicate
can be sure that if he ever loses that confidence in you he will either
bought
1934
relating
to
gold
export
"Whether the Philippine action
bars of refined gold from the Big
buy his securities from another salesman or pick out his own invest¬ licenses.
A hearing, under the
to sell this gold at more than $35
ments. When that time comes you can look around for a new cus¬ Administrative
Procedure
Act, Wedge Mining Company at $45.50 an ounce falls under the interdic¬
be there may come a

may

give you a dig that

,

tomer,

investors have become far too
speculative minded. They have invested too large a portion of their
funds in non-dividend paying securities and, since the market decline
which began in the spring of 1946, they have seen a sizable deprecia¬
tion in some of their holdings. The next time one of your customers
starts in on you with a few well placed digs in your ribs be ready for
him. You come in the door with a big smile on your face all pepped
UP about some good news you just heard concerning something that
this customer bought from you and you are all set to spill it when
he says, "How about that frayed dog you sold me at twenty bucks
last year; it looks like you stuck me good on that one." Bingo, there
goes all your good news right up the chimney and instead of com¬
manding the situation you are right back on your heels clutching
around for an excuse or an alibi while Mr. Customer is inwardly
gloating to himself that at least if he did get stuck he's made you a
1

During the past few years many

little uncomfortable

will

about it too.

is what you can do.

thing like this.

in

the

securities business a very intelligent and
that if I was right six times out of ten I'd

successful broker

build a successful
business. If I was right seven times out of ten I'd make a lot of
money and so would my customers. And if I was right eight times
put of ten I'd be a miracle man. Now I think we've done quite well
with your account on an overall basis. It's the general average of
results that counts in the long run as you well know.
We've had
some pretty good securities but here
is one that quite frankly has
been a disappointment marketwise to both of us but the situation
seems to be improving, etc., etc."
Go on from there.
Any man who has the least bit of fairness in his makeup will
see the justice of
such a statement of your position. There is no
man living who hasn't picked a sour security at some tifne or other
if he has done any amount of investing to speak about. Allow no
customer to assume that you do not know your business. If you let
him think this way you will regret it. We are all entitled to a cer¬
tain number of mistakes but any time we do not command the con¬
fidence of our clients we cannot help them to achieve successful
told

held on August 11,

1947,

interested persons may

me

an

$10.50 higher than the
price in the United

ounce,

controlled

States.

appear.

Just keep smiling and say some¬
"Oh, that dog, (smile more) you know they say every
dog has his day and there will be a time for that one. Now I am
going to tell you something. Some years ago when I first started
this

So

be

which

at

Department pro¬
poses to amend the regulations so
that licenses for the exportation

Pacifico Ledesma and An-

selmo

Trinidad, members of the
stock exchange, negoti¬

The Treasury

Manila

ated the sale.

tion of

the world monetary

fund

observers say it

is not known, but
does.

Philippines

"The
of

this

and

fund

as

Is a member
such is ex¬

pected to be bound by rulings
"It was the first of such trans¬
from
the
head
office.
Mexico,
for industrial, profes¬ actions here where the
price was
sional, or artistic purposes will be
upon receipt of the warning, had
higher than the controlled price.
restricted to semi-processed gold.
immediately stopped further deal¬
It was the first transaction done
If these amendments are put into
ings in gold.
after the warning made by the
effect, licenses for the private ex¬
"Economists hold that at the time
world monetary fund, and inter¬
port of bar gold will no longer be national
organization which seeks it was agreed that all world cur¬
issued.
•
rencies must have the American
to stabilize world currencies.
Under
present regulations li¬
"The amount involved is small dollar as the base, and since the
American
dollar as
at present
censes
are
also granted for the
(the sale is worth p39,820), but
exportation of any gold refined analysis said the deal created a constituted is of gold as defined
from imported gold-bearing mate¬
precedent
for
Philippine gold, by law in 1934 the value of which
was
based at $35 an ounce, any
rial.
The Treasury proposes to not
only concerning price but also
restrict
the
granting
of
such concerning the final disposition of departure in gold transactions
from this price, would" automati¬
licenses to gold refined
in this the gold.
country on a consignment basis,
"The gold involved in the sale cally change the value of the cur¬
provided the subsequent exporta¬ comes from the bullion sent by rency of the country making such
transactions.
tion of the refined gold is to be Atok
Gold
Mining
Company,
made to the consignor of the gold*
"Thus, if the Philippines gets
operators for Big Wedge, to Lon¬
of

gold

w

bearing material, or to persons
designated by him. Such expor¬
tation will also be subject to the

that the gold-bear¬
ing material has been exported
from the country of origin and
requirement

officials

Atok

that the gold could be
sold there for more than $35 an
ounce.
At
that
time
prospects
were

therefrom is to
be imported into the* country of
designation in accordance with
the lavys and regulations of such
countries, f
The' proposed changes in the
regulations hre in furtherance of
the

refining.

for

don

had hoped

to

bright
brignt

the

close

more

(as in the case of
yesterday
at

than $35

sale

Manila

the

$45.50), ♦then the Philippines is
automatically getting more for its

deal I peso actually devaluating it."

gold refined

Export-Import Bank Grants Italy Credit
Approves aggregate of $23 millions in favor of Instituto Moliliare
Italiano, a public institution engaged in industrial financing.

Wm. McC. Martin, Jr., Chairman of the Board of Directors of
of the United the Export-Import Bank, announced Aug. 4 that, within the frameobjectives of the work of the
investment results.
<$•of Italy as well as to, produce
Most people want you to do their thinking for them. When you International Monetary Fund. The
under¬
additional goods urgently needed
Secretary of the Treasury and the standings
are, don't allow any one to make you admit that you are wrong.
Remember in this business we are handling other people's money Board of Governors of the Feder¬
reached
and
by the domestic economy.
al Reserve System on July 18,
The
three
firms
for
which
and that isn't something the average person takes lightly.
contained
i n
1947
credits have been
approved by
requested
all
American letters of Jan.
the Board are among the leading
banks, businesses and individuals 14,
1947
to
to refrain from using their facili¬ the Honor¬
industrial concerns rpf Italy. - Fiat
ties and funds for carrying out
is the principal producer of auto¬
able Pietro
motive vehicles, marine engines,
gold
transactions
at
premium Campilli, and
Walter M. Schwartz, Jr., President of Proctor Electric Co., says true,
and other mechanical appliances.
prices. The response to this re¬ of July 16,
Pirelli is the leading manufactur¬
quest has been most encouraging.
1947
to
Am¬
weight of wartime inflation has not yet been reached and no major
The
er
of
Treasury
Department be¬ bassador Tartires, telecommunications
;
price correction is needed to maintain sales volume.
lieves that the proposed changes
c hia ni
of
cable, and rubber articles. Mon¬
"The true weight of wartime inflation has been underrated by in the regulations will, with the
tecatini holds a very important
Italy,
the
continued cooperation of Ameri¬
many businessmen and economists in evaluating general business
Board
of
place
in
Italy's
mineral and
can
chemical production.
!
conditions to-^
business, assure compliance Directors has
Wm. McC. Martin, Jr.
day,"
Walter industries, Mr. Schwartz said that with the United States Govern¬ approved the
M:
Schwartz, there can be no severe recession ment's gold policy and will con¬ establishmen t
Jr., president so long as large segments of the tribute to international monetary in favor of the Instituto Mobiliare New York Stock Exchange
of Proctor country such as farmers and labor
cooperation. Other members of Italiano, an Italian public credit
Weekly Firm Changes
Electric Com¬ remain prosperous.
"We recog¬ the Fund are also taking measures institution engaged in industrial
The New York Stock Exchange
nize that prices eventually prob¬ to implement the Fund's objec¬
pany, Phila¬
financing,
of
three
lines
of
has announced the following firm
delphia, told ably will go too high and when tives with respect to gold.

the

policy

gold

States and of the

Holds Prices Not at Peak

credit:

will be ac¬

the company's

they drop back they

first

companied by some sort of reces¬
sion. On the other hand, we very
much doubt whether they have

The foregoing

changes:

proposals by the

(a) $10 million for the use of
Interest of the late Claude S.
undoubtedly taken Fiat, Societa per Azioni;
national sales
Newman
in Ira Haupt & Co.
to forestall "black market" specu¬
(b) $9 million for the use of ceased as of July 31.
convention at
lation in gold at various centers
Montecatini, Societa Generale per
reached their peak yet."
ShawneeWalter J. Murphy, Luke, Banks
throughout the world, reports of l'lndustria Mineraria e Chemica,
o
n
t h e Mr. Schwartz said that for the
& Weeks,' died on July 25, on
which have been growing during
Anonima; and
Delaware last
next few years he expected in¬
the last few weeks, and which
which date his interest in the firm
week.
(c) $4 million for the use of ceased.
dustry in general to be operating have been
causing considerable
Recog¬ in an atmosphere of general pros¬
concern
not only in the United Pirelli, Societa per Azioni.
Junius B. Close retired from
nizing that perity. "There is no major (price)
All
three credits
are
to be
States, which still adheres to a
partnership in Mac Quoid: &
prices
on
correction which will substantial¬ "fixed price" for gold, but also in guaranteed by the Italian Gov¬ Coady on July 31.
!■'
postwar

Treasury

are

-

W.

M. Schwartz,

most
due

Jr.

commodities
to

high

basic

are

high

costs

and

,

now

the

prevailing high labor rate in most

ly affect the overall volume of re¬
tail sales in sight," he

said.

France.

As

pointed out in the "Chronicle" of
July 24, the "black market" trans¬
actions are minor and. insignifi¬
cant,

but,

monetary
of

Over-the-Counter Quotation Services

and

Britain

Great

Established 1913




behalf

transactions will

of other concerns,

including many

small enterprises

these

with the
excessive

the "Evening

San Francisco

entitled

same

and different lines of

trial activity, will

indus¬

be received and

considered by the Board.

interest in these
developments there is reprinted
below an item which appeared in
Manila.

New York 4, N. Y.

drew from

partnership in the firm

engaged in the

unabated,

In view of the

Chicago

credit

in view of unstable
conditions in a number
is feared that, if pected that applications on

figure.

BUREAU, Inc.

Lynch and
Tomlinson, general

McKenna

stated that these
Herbert
T.
applications were
partners, became limited partners
among the first to be received in
in Moore, Leonard & Lynch, on
form
readily suitable for con¬
sideration by the Board; it is ex¬ Aug. 1. Addison W. Arthurs with¬
Martin

Mr.

three

countries, it

ly where the parity rate
dollar
is
set
at an

46 Front Street,

Charles

bring about further devaluations
of domestic currencies particular¬

For 34 Years

NATIONAL QUOTATION

ernment.

News," published in

Philippines, on July 17,
,"PI Gold Sold at $45 an

Ounce":
"Manila

yesterday

became

a

equipment and the mate¬

The

rials

to

credits

be

are

financed

under the

for the purpose

expand its markets
improve

July 31.

Three With Miller Firm
PHILADELPHIA, PA.—E. W. &
R.

C.

Miller

&

Co.,

Broad Street, announce
rence

E.

Garrett,

or

123

South

that Law¬

James

J.

Mc¬

Laughlin and William F. Brown

restore and
are now associated
to other the dollar position sales organization,

abling each concern to
wise

of en¬

on

with the firm's

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4618

166

Volume

N. Y. Reserve Bank

Analyzes Gold Distribution

August issue of its "Monthly Review" estimates gold and shortterm dollar assets available to foreign countries, exclusive of
In

>

Russia, at around $18 billions. Says problem is one of mal¬
distribution and danger of further shrinkage.
The August issue of the 'Monthly Review" of the Federal Re¬
analysis of world distribution of

the following

Bank contains

serve

gold and dollar assets throughout^
the world:—

discussion
threat of

There has been much
to

as

the

world

a

existence

or

shortage of dollars, or

of

convertible into dol¬
lars, which could be used for the
assets easily

volume
which for¬
buying in the

payment of the enormous
of

and services

goods

eign countries are
United

of

that

linked with
volume
of
foreign

the

is

question

This

States.

intimately

lending

United States Govern¬

which the

private investors,
be called upon to do in the
future. Of basic importance,

ment, as well
may
near

however,

are

as

outbreak of the
lions

at

the

end

and

war

of

$20 bil¬

hostilities in

August 1945.

In the first postwar
countries' drafts on
their gold and dollar assets were
year

foreign

approximately offset, in the ag¬
gregate, by new acquisitions of
gold from their own current pro¬

duction; in

August 1946, a year
Day, foreign gold re¬
serves
were
if anything
some¬
what higher than at the close of
the war, and dollar balances and
after

V-J

some

had

$200 millions.
In con¬
trast, during the seven months of
the second postwar year for which
statistics
are
available, foreign
countries not only utilized their
current gold output, estimated at
$700 millions a year, but also
drew
on
their
monetary
gold
stock to the probable extent of
$800 millions (apart from trans¬
fers of gold to the International
Monetary
Fund).
In
addition,

they

billion of their
holdings.

$1

spent

dollar

short-term

The

picture can
clearly, however,
looking merely at
size of the foreign
lar
holdings, one
of

distribution

if, instead of
the aggregate
gold and dol¬
considers the

such

holdings by

The liberated

areas.

Western
billions
ances

be seen more

countries

of

1946

gold

before

just

dollar bal¬

and

the

and

war,

and

March

only

In

billions

this

Western

"hard"

currency hold¬
reduced
from
the

were

equivalent of $2.6 billions at
liberation
the

end

to

of

dollars

in

the official French

area,

and

ings

$2.5

1947.

European
gold

about

1946.

$1

the

billion

at

Dutch gold and

declined

by
one-third,
amounting last March to $400 mil¬
lions.

Belgium is the only coun¬
in the area whose reported

try
gold and

dollars

the end of
of

higher

were

at

1946 than at the time

increased by
$40 millions to some $900 millions,
largely because of the goods and

liberation;

services

they

furnished

American

to

troops in the final phase of
European war.
In

Europe, which held $5.4
of

$3.7 billions in August 1945,
$3.2 billions left in August

"neutral"

the

the

countries

amount

to

about

$1 billions higher than

the

This

war.

increase

balances
serve

and

maintained this

after the revaluation of the Swed¬

ish krona in July 1946, lost some
$250 millions of its reserves be¬
tween

August

1946

and

No British figures are available

later

than

December

In

amounted

$2.1 billions.

(Continued

on page

country

supply. This article presents
analyzes the
known facts
concerning the world distribution

gold and short-term dollar as¬
the changes which have

sets and

place in this respect since

1939.

The gold and short-term dollar
now
available to foreign

assets

countries
the

as

(excluding

whole

a

U.S.S.R.)1 amount to some $18
About two-thirds of this

billions.

consists
ments

of gold held by govern¬
and central
banks.
The

rest is

made up

in

and

dollar
of

IBecause

the

banks,

holdings

foreigners'

short-term

private

and

American

with

of

of balances held

official

foreign

accounts

securities.
absence

t

of

of
The

official

statistics in this field, it is not
practicable to include the U. S. S. R. in
the Survey.'
"
r', " •
<1
Russian

Italy and Poland
Devaluate Currencies
Italy

reduced
from

rate

black

dollar

225

market

exchange
though

350

to

That

still

rules

rate

Ships May Go Out To Sea

higher. Poland lowers zloty from
100 to 250 to the dollar.
""

*'

1

.

As

■

I

*

M

,

verted

first step

in its application
for membership in the Interna¬
tional Monetary Fund, the Italian
Cabinet on Aug. 1 lowered the

THE ALABAMA DRY DOCK & SHIPBUILD¬

official rate of the lira from 225 to

ing, conversion, and construction during

350 to the

30 years of continuous service to ship owners and

lar
!

a

dollar, along with simi¬

reduction

in

terms

foreign countries.
"black"

has

been

at more

it

market

is

of

other

the

for some time
than double the new rate,
in

the

further

a

value

will be made before

of

the

re¬

lira

Italy finally
parity to

the "official"

announces

COMPANY,

pioneered

new

of

Mobile,

Alabama,

than 2,000 ships of varying sizes and

^

service.

war

advancements in ship repair¬
more

The

than

postwar

brought

years

about

considerable

activity in ship repair work, as the reconversion

operators in the Gulf of Mexico. Tooled and staffed

of ships for use in peacetime commerce was neces¬

to provide complete repair service to all types of

sary.

marine

various naval and merchant ships; the preparation

International Monetary Fund
when it seeks its aid for stabiliz¬

equipment, the

maintains

company

ing its currency. The move was
also taken to aid Italian exporters
who were hampered in
selling
goods abroad by the Italian Gov¬
ernment regulation which requires
them to convert one-half of their

proceeds at the
exchange rate and per¬
mitting them to sell the remainder
in the open market.
This provi¬
sion put the lira at an
actual
exchange rate for importers at

seven

This

program

included decommmissioning of

drydocks, ranging in capacity from 2,500 to 18,000

of troop carriers for returning GI's, and, primarily,

tons, for underwater repairing.

repairing

and remodeling

and tankers for the

With

a war

record of having built 20

the

foreign

more

types for

has

or

lira

quoted

expected that

duction

of

As the open
rate

ING

vessels

the

and

102 T-2 Tankers of

company

agencies

as

was

one

Liberty-type

22,400

recognized

by

ships for

ing

achievement

use

sources

in World War H. But the

of

its

war

job

repair division, which repaired,

currency

refitted,

type of service their

r

ships

.

owners

to render.

»

This revival of more normal operations found the

of

Alabama

of

or

Dry

Dock

&

Shipbuilding

Company

ready, as ever, to meet the demands of the

crown¬

that

was

cargo

each,

government

of the most important

new

tons

were

of private

its

well able

time—,

to carry out vigorously the plans of its \

customers.

con¬

official

Another
Southern
em

advertisement

in

the

series

industrial developments.

industries,

is

ready

to

do

its

by Equitable Securities Corporation

Equitable
part

in

has

featuring

helped to finance many South-

supplying

others

with

capital funds.

around 500 to the dollar.

Almost simultaneously with the
lowering of the dollar value of
the lira, the Polish Government's
Exchange Control Commission
raised the rate of dollars in terms
of
its
own
currency
unit, the

zloty, from 100 to 250, It is re¬
ported that this rate increase is
temporary and by Sept. 1, the Po¬
lish

Government

boost

the

100 to

will

filed

KNOXVILLE

with

the

new

a

member.




NEW

EQUITABLE

BIRMINGHAM

NEW ORLEANS

further

Securities Corporation

YORK

MEMPHIS
HARTFORD

GREENSBORO
CHATTANOOGA

BROWNLEE O. CURREY, PRESIDENT

rate

Interna¬

Monetary Fund, of which

Poland is

DALLAS

zloty-dollar rate, from

400, and that this

be

tional

will

NASHVILLE

322 UNION

STREET, NASHVILLE 3, TENN.

TWO WALL STREET,

How¬

British private dollar hold-

ever,

$2.5 billions and

August 1939, they had
to

and

taken

at

dol¬

lar balances amounted to $2.6 bil¬

can

of

1946,

which time official gold and

dollar" as¬

this

which

services

March

1947.

by using such assets, may be able
to meet their needs for the goods
and

re¬

practically unchanged until

foreign countries,

extent to which

is

small
extent
by
and
Portugal
Spain.
Sweden, the remaining
European
"neutral,"
which
in
August
1945
possessed
almost
$700 millions of gold and dollar

countries and the

of foreign

19

largely due to the accumulation
of gold by Switzerland and to a

lions.
of

Europe, gold and dollar holdings
now

are

before

the size and distri¬

bution of the gold and
sets

present total of $18 billions com¬
pares
with $17 billions at th|e

short-term securities had declined

by only

(535)

NEW YORK 5, N. Y.

40)

THE COMMERCIAL &

(536)

20

Thursday, August 7,1947

FINANCIAL CHRONICLE

"

"

*

^

SPONSOR

■

By HENRY

Of the 50 odd

mutual fund sponsors,

:

80% of total assets of
The

The

•

Syndicate.

Investors

and

the

is

latter

leading

only

& Company,

the

of

Inc.

Investors

sales of additional
shares in 1944. A large majority
of the funds tabulated were or¬
discontinued

Calvin Bullock

follows:

Distributors Group, Inc.

National

a

securities

120 BROADWAY, NEW YORK 5, N,

Y.

leaders

Inc.

Parker

Series sponsored by
Securities & Research

Mu¬

Research & Man.

National Securities &
Research Corporation

vestors'

teresting
tion

its

of Trust &

Morgan

(W.L.&Co.)
Howard, Inc.

Eaton

changes from

1947

ary,

42,100
___

& Howard Balanced

28,300
1,700

Fund

Eaton & Howard Stock Fund
UM

IIIL ilka

If

.L.t li1U.11iff.ik ft,

$1,084,400

Total

new

population increased, the price-times-earn¬
April 1940, to Janu¬ ings ratio has dropped 'to a 10year low. For the preceding nine

For the
whole the pop¬

noted.

are

United States as a
ulation has increased

7.3%. How¬

the^e is a wide difference
population trends among the

ever,

During the past
years,
the population of
Nevada
has
increased
50.9%;
California 39.5%; Arizona 37.3%;

individual states.
seven

New Dealers Now the Stand-Patters

the average ratio was 15.2
1; the present estimate puts the

They act

years

to

average price at only 9.2 times
current earnings—a decrease of
nearly 40%.

as

,

The New Dealers, who played
teen

the role of innovators in the Nine*

Dealer Of x

HUGH W. LONG & CO.
iNCOSfQRATt©

48 WALL

'<$>

justment.

that

view

This

iOS

shown small declines,
York an increase of - only

CXICAGO

ANCfUS

and New

0.6%.

^

..

;

.

•

e

ustodian

Tit 1105
Certificates of Participation

in

INVESTMENT EJJNDS
investing their capital

;

tively held this view on Nov. 5
last, and brought new faces to

of

Thus

News Service.

the

Mr.

as

Rukeyser

the

TkeK ey<stone

INVESTMENT

r

.

INCORPORATED

'

Diversified Investment

Fund

request

L

Congi •ess Street

Boston 9,

Massachusetts




Investment Managers
Telephone

'

HAnover 2-2893

25 Broad Street
New York 4, N.Y.

Putnam
50

Fund

Distributors, Inc,

State St.,

Boston

to

bide

upwards

additional.

$10 billions

events

.

with New?

All that is necessary
your

to

is;

time and wait for

demonstrate their er¬

-

'

1

★

NORTH AMERICAN SECURITIES
2500 Rutf

in the first half

it also spent

rors.'

*

Prospectus on Request
Prospectus upon

reinvested all of
in tools and

"It's foolish to argue

with Redeemable Shares

Managers and Underwriters

.

of

COMPANY

Dealers.

John G. Nesbett & Co.

It discloses that

retained profits

.

Building

San Francisco 4,

California

Proprietorship

Now

GENERAL DISTRIBUTORS

50

'30s.

constitutes an answer to

sophistry.

such

of this year

COMMONWEALTH

A

j

Truman

business not only

request

t

Company

of Boston

,

of the

facilities, but that

PUTNAM
FUND

on

manage¬

background

its

51-S2-S3-S4)
Prospectus

its

describing

executive personnel.

INCORPORATED

COMMON STOCKS

[peal investment dealer or

stubbornly adhere to

who

orthodoxy

the

policy, and the

of its

-Fund-'-

•

(Series K1-K2)

your

outmoded

aries,

under
auspices

spoke

ment

Nesbett

B1-B2-BS-B4)

Prospectus from

unemployment of the 1930s,
the self-styled liberals, of
New Deal emerge
the
contemporary
reaction¬

and.

booklet'

The

PREFERRED STOCKS

?

sub¬

.

IN

(Series

the Chief Executive,

"But

ject to a cultural lag, was at¬
tempting to apply political medi¬
cines intended for the depression

ternat ional

BONDS
(Series

Congress to put the nation's eco¬
nomic house in order.

Merryle S. Rukeyser
"Key¬ Policy"—by Louis Guenther: "An of the Amer"The practical effect is to ap¬
notes," issued by. the Keystone Englishman figures his wealth on i c ah Forum
ply new stimulants to inflated
Company of Boston, points
out the basis of his income, whereas of the Air over the Mutual Broad¬ markets, and to resist economy in
that "Earnings on the represen¬ most
American base it on the casting System'.
spending and moderation in tax¬
tative stocks comprising the Dow- total value of their assets. Hence,In
discussing where
are
we ing. Meantime, the bureaucratic
Jones
Industrial Average
have the American has become quota¬ headed economically, Mr. Rukey¬ economic planners, taking their
climbed to $19.28 per share, as tion minded and is either elated
ser
declared: ;"I challenge
the ideas from visionaries and pres¬
estimated by BARRON'S for the When his holdings show apprecia¬
sure
groups, are out
of tempo
premise that we are mere clay
12 months ending March 31, 1947.
with realities.
-'
;
tion, or unduly depressed if they
in the hands of the potter.
My
This figure—highest in a decade decline
sharply.
The
sounder
"In an economic forecast pub¬
•is more than three times 1938
method is to think primarily in view is: that in- a free competitive lished last December, one of thern
earnings and represents a gain of terms of income—how much in¬
society we can; do much to make created a hullabaloo by asserting
over
40%
on
the earnings for come a given amount of capital
profits were too high, and, if Un¬
1946.
will buy. An Englishman is not
soundly invested so that his in¬ corrected, would bring on a bust.
"While earnings have sharply
particularly concerned by market come remains. undisturbed."
The bookkeeping in the Midyear
declines if his capital has been.
Lord, Abbett & Co. has a new Economic
Report
of President

issue

current

The

Ke

the following

excerpt from an article in "The
Financial World" — "Buying In¬
come Is the Soundest Investment

I believe

majority of voters instinc¬

a

umnist -for In—

Securities & Research

National

Corporation quotes

...

Price-Earnings Ratio at
10-Year Low:

$10,749.

.

——
the bed in which we lie.

Wellington Fund has issued a
was expressed
booklet
showing
the result of
Oregon 26.1%,
here on Aug.
On the other $10,000 investment in Wellington 5 in a Goast to
Fund since Jan. 1,
1934. As of
hand, the population of North Da¬
coast
broad¬
June 30, 1947, the $10,000 had "in¬
kota, South Dakota and Montana
cast by Mercreased to approximately $14,000
has-shown an average decline of
Stanley
while
total distributions during ryle
about
14%, while in the east,
Ruk e y s e r,
the
period have
amounted to
Maine, Vermont, and New Hamp¬
economic col¬
shire have

STREET. NEW YORK S, N Y.

blocking the road to

Thirties, are now stand-patters, who are

postwar read-

Notes:

[
: J

road blocks halting postwar readjustment,
Rukeyser declares.

Washington 30%;
and Utah 22.9%.

Prospectus from your Investment

50,100

1,900

Agreement——'

Wellington Fund, Inc

Eaton &

Fund,

Investment

in

First Mutual Trust Fund—

issued in connec¬
Pacific Coast

map

with

63,300
42,100
4,500
1,600

National Securities Series

Man." In an in¬

Young

"Go West,

INC.

64,700
Corporation

Investment

Street

State

Declaration

believes that in¬
dollars
should follow
Greely's famous dictum:

Horace

32,000
13,200

Shares.

Declaration of Trust

Young Man"

Wetst,

67,900

22,700

Inc.____
Funds.—

Incorporated Investors

Corporation

State St.

Hugh W. Long

Bond Fund

Fund,

Business

Trusteed

funds

National

are

rumored that John L.
Lewis's favorite march tune is
"Stars and Strikes Forever."
"Go

56,100

83,300

Affiliated

is

It

12,000

•

13^700

American

Lord, Abbett & Co.,

Brow's Theme Song:

Beetle

,

Group Securities

Union

Corporation, and Investors
tual, both organized in 1940.

corporation

research

youngest

the

of

the

National

Prospectus-'upon fequest from
your investment dealer, or from

1__

______

______________

Nation-Wide

Wellington Fund—1928.

Securities

88,500

.

Street—1924.
Incorporated Investors—1925.
Two

9^800
1,300

5,400

Canadian >Investment

M. I. T.—1924.

among

22,500

A

___

88,600

30,300
26,000

——
_____

Management" Corp.

Dividend Shares-

State
•

-•

8'200

Bullock Fund

only four
market crash

antedating the 1929
as

1 900

-

3

3

_.,

Aeronautical

that, sells its shares ex¬
clusively through its own . retail
sale? organization, other sponsors ganized during the '30s,
sponsor

_____■

Fundamental Investors

Investment Corp.

the State Street

Fund

Fund

111,800

101,700

XeV ^ork Bond Fund
StocksManhattan

Hugh W. Long

all

161,100

Keystone Custodian Funds

Stock

funds in the

While

25,200

Fund

Selective

accompanying tabulation are of
the open-end variety, one fund,

each,

$100,000,000

than

Vance, Sanders (M. I. T.), the
oldest as well as the largest, Key¬

are

'30o

dealers.

and

resentatives

15 000

Investors Mutual

Syndicate

Investors

wholesale rep¬

operating through

assets

with

Three,"

"Big

of. more

stone,

equal to approximately

all mutual^

funds.

Keystone Co. of Boston

aggregate their assets on

$233,000 '

$192,500

Fund

Boston

12 now have assets of $30,-

000,000 or more under their control. In the
June 30, 1947 amounted to $1,084,400,000,

(000 omitted) (000 omitted)

"

M. I. T. Second Fund

Control 80%

TOTAL

NET ASSETS

.

M.I.

Vance, Sanders & Co.

HUNT

Bond

Twelve Sponsors

,

June 30,1947

"

«

I

•

„T

CO.

ALLENTOWN, PA.--G.A,
Shorpe is now
G. A.

sole proprietor of

Shorpe & Co., 538

Street.

•

Hamilton
*

1

Volume

166

Number

4618

THE COMMERCIAL & FINANCIAL CHRONICLE

Securities Traders Association of Detroit and

Michigan

Mmm
iS vM

n
bjwiCli

ifev

Ray Davies, Mercier, McDowell & Dolphyn; "Wild Bill" Fleishman, Brockett
Gardner, and Ira Ducey, all of A. H. Vogel & Co.; Geo. Walker, Mercier, McDowell
& Dolphyn.

First

Howard Parker, and Milton Manley, M. A. Manley & Co.; Clarence
Horn,
of Michigan Corp.; John A. Straley, Hugh W. Long & Co., New York City.

Verral Huntley, Investment Securities
Co., Jackson, Mich.; Alex B. Quirk, and
Harry Benjamin of Baker, Simonds & Co.; Russell H.
Goodrich, Investment Secu¬
rities Co., Jackson.




Alex

McDonald, McDonald, Moore & Co.; "Pinkey" Gilbert, Donovan, Gilbert
Co., Lansing, Mich.; Eddie Liska, Braun, Bosworth & Co., Toledo; William Moore,
McDonald, Moore & Co.
&

Victor P. Dhooge,
"Jack" Kenower

Murel J.
A. A.

T.

kinson.

Blyth & Co., Inc.; Wayne Spade, Watling, Lerchen & Co.;
Miller, Kevower & Co.

and Reginald MacArthur, both of

Sancrant, H. V. Sattley & Co.; Harold Rademacher, Detroit Trust Co.;
Maxwell, guest; Douglas H. Campbell First of Michigan Corp.; S. H. Wil¬

22

THE COMMERCIAL & FINANCIAL

(538)

Thursday, August 7, 1947

CHRONICLE

Outing Held July 21st and 22nd

Ed.

Stout,

Stoetzer, Faulkner & Co.; Clarence J.
both of W. H. Protiva & Co., Pontiac.

guest; Percy P. Newman,

Nephler, Jr. and Eugene A. Parmenter,

Jack Roney, Wm. C. Roney & Co.; Wm. Gordon, Shader, Winckler & Co.; C.G.
McDonald, C. Wallich, guest. & Co.; Robert "Red" Wallace, Wm. C. Roney & Co.;
G. McDonald
J. "Lumber"
s

Dean

Titus, Dean Titus & Co., Ann Arbor; Frank Meyer,

Corp.; Bill Weed, Cray, McFawn & Co.; Don Fisher.

'
■

■

Herman Tornga,

-

v

Rapids; Paul Moreland,

Clement, Curtis & Co., Chicago; Neil De Young,
Young, Larson & Tornga, Grand Rapids.

Moreland
De

De Young, Larson & Tornga, Grand

First of Michigan

&

Co.; Paul Yarrow,




Hale Sattley, H. V. Sattley & Co.; "Doc" Dillman, Harriman
Max Stringer, Watling, Lerchen & Co.; Wm. Roney, Wm. C. Roney &

Ripley & Co.;
Co.

Lester C. Lanterman, Dean Titus & Co.; Raymond L. Templin, Goodhody & Co.;
Gilbert S. Currie, Grouse & Co.; Hugh Lindeman, Vice-President of the Equitable

Trust Co.

4

Volume

166

Number

4618

THE COMMERCIAL & FINANCIAL
CHRONICLE

At Orchard Lake

Don
&

Hay Bernardi, Cray, McFawn & Co.; John K.
Roney, Wm. C. Roney & Co.;
W. Miller, McDonald, Moore &
Co.; Merle J. Bowyer, Paine,
Webber, Jackson

Curtis.

A1 Creighton,
Collin, Norton & Co., Toledo; Henry Vandervoort,
Cray, McFawn
Co.; Alex B. Quirk and Ed. Everham of Baker, Simonds &
Co.; "Herb" Schollenberger, Campbell, McCarty & Co.

&

Gordon Kirk and Anthony
Frank E.

Soma, Charles E. Bailey & Co.; John Johnson
Voorheis, Goodbody & Co.

Raymond W. Miottel, Leroy O. Jarvis
Jackson & Curtis.




and

•

and Vic

Williams, all

of

Paine, Webber,

(539)

23

Country Club

Ray Davies, George Walker, George McDowell, and Clare
Wass, all of Mercier,
& Dolphyn; John
MacFarlane, Executive Vice-President of the Detroit
Stock Exchange.
McDowell

Roy Hood, S. R: Livingstone & Co.; Mel
Stuit, John Nuveen & Co., Grand
Rapids; Cliff Verral, Nordman & Verral; Fred
Bargmann, Braun, Bosworth & Co.,
Inc.; Erwin Ward, W. H. Roose & Co., Toledo; William Siler, Siler &
Co.; "Doug"
Campbell, First of Michigan Corp.; Fred Alliston, Wm. C. Roney & Co.

Brockett

Gardner, William Fleischman, Ira Ducey

A. H. Vogel & Co.

Errol

Exley,

Parcells & Co.

Earle

W.

Parcells,

and

Joseph E.

and Ray

Hatfield, all

Johnson,

of

all

Charles

of

A.

24

(540)

THE

COMMERCIAL &

] propriations,

Achievements of

;

the GOP Congress

which

would

be

equivalent to about $3,000,000,000
'in expenses.

in

a

modified

control

remain

form

and

because

export
we

felt

they dealt with extraordinary ab¬
normal conditions.' The Republi¬

)
Furthermore,
b y
resolution
was
ready to
announce.
They fathered by Representative Clar¬ cans are blamed by some for re¬
strenuous of any days in my ex¬
were merely
asked to go along. ence Brown of Ohio and Senator moving price control and housing
(Continued from first page)
perience.
said the Republicans could not
controls.
It
might be
Lodge of Massachusetts, the Re¬ priority
Nor was the start of Congress
High Spots of Legislation
publicans have set up a commis¬ well to point out at this point that
organize the Congress, that they at all slow, as frequently charged.
I cannot here cover the entire sion to study the whole organiza¬
these controls were removed by
could not operate it when it was If citizens are to have the right
organized, that they could not to present their views on legis¬ field of legislation enacted. I can tion of the government, on which the President himself because of
hit the high
We were
pass a labor bill, that they could lation,
committees
must
hold only at the outsetspots. the Presi¬ former President Hoover has ac¬ an overwhelming public senti¬
met
by
not save money, that they could
hearings,
and before
reporting dential demand for $37,500,000,000 1 cepted an appointment, to strike ment for such removal. We gave
not
cut taxes, that they would
directly at the foundation of the him in 1946 an O.P.A. law under
bills, they must study the prob¬
to spend, five times the prewar
manufactured
wreck American foreign policy. lems
present extravagant spending. We which all
goods
long and carefully, for they
As the
session went forward cannot be studied on the floor of budget, and the maintenance of admit it was difficult indeed to could have been controlled until
\ these saboteurs of good govern¬ the House or the Senate. Today existing wartime taxes. We were accomplish savings by paring each July 1st of this year. The Presi¬
defied to reduce the budget one appropriation bill as it came to dent
ment were disappointed in each
removed
them
about
the
we have a vast field of legislative
cent or cut the taxes one cent. the Congress. We are determined time of the last
election. We gave
prediction. The Republicans or- policy, ten times as broad as that
The levying of taxes has always to reduce the vast jungle of bur¬
him an
^ganized
without
friction,
and dealt with by the early Con¬
emergency
housing act
been peculiarly the function of
"without Bilbo. The job was more
eaus, of which the federal gov¬ with vast money for subsidies and
gresses.
Government has ex¬ Congress and of the House of Rep¬ ernment now consists.
unlimited
control.
complicated than usual because of tended its hand into every field
He, himself,
removed those controls and fired
the
La
Follette-Monroney
Act, of activity, and even the con¬ resentatives. Congress has tradi¬
The Labor Act
tionally held the "purse strings"
Wilson
which abolished all of the com¬
Wyatt because
nothing
servatives in most fields come to
in behalf of the citizens.
It was
We adopted a Labor Act over was being
mittees and created entirely new us for some governmental action.
accomplished towards
never intended that taxes should
the most violent opposition to any
committees with new chairmen In one session, Congress cannot
the solution of the housing prob¬
be levied in excess of the sum
and new staffs. No Republican in
lem. The production of adequate
possibly make over the world or Congress determined to levy. But, legislation I have ever seen in
Congress.
The labor barons and food and housing is a difficult
Congress had ever been chairman even the United States. We must
because
the
existing
wartime the President fought every reform
of a Senate or House committee. select the subjects of most im¬
problem now under study by two
taxes had no termination date, the
These men had to organize the mediate importance and leave the
except the most trivial; and they special
committees
we
have
Presidential veto could be used
were determined there would be
committees and learn their new rest for further consideration. But
created; but I believe very strong¬
for the first time in the history of
no
labor bill of any kind.
The ly that it will be solved more
jobs. Yet, contrary to the charge considering everything, the list of
the United States to force upon
New
Act proceeds on a simple
of delay, the records show that important laws adopted has not
quickly by complete freedom of
the people the continuation of a
Congress
went' to work faster been equalled by any Congress.
principle, to eliminate as many as operation and more production,
high wartime tax system against possible of the injustices set up
than at the beginning of any pre¬ Subjects dealt with have been met
than by government directives.
the
overwhelming
opinion
of
vious Congress, that the commit¬ "head
by present law, particularly the
on,"
with courage
and
Congress.
Defense on Firm Foundation
tees did more and better work, directness.
Wagner Labor Relations Act and
r
In my opinion the tax burden
and that Congress, as a whole,
the
regulations
and
decisions
In the organization of our de¬
It is said that much work is left
today is more than can be long under that Act. It is based on pro¬
worked more steadily and covered
fense forces, the 80th Congress for
undone. That is certainly true and
maintained
without threatening
a broader field than any previous
tecting the union member against many years will be looked to as
will always be true. We have had
Congress.
Issues
were
met before us the job of clearing the existence of a free economy. arbitrary treatment by his leaders. having done more to put our de¬
We are taking 30% of the people's
It is based on making collective
squarely. Republican policies
fense system on a firm founda¬
away the wreckage of
the war
again became respected, and even and of the New Deal before we income, three days' work in ten bargaining really free and equal. tion than any Congress in his¬
on
the average.
The lower in¬
fashionable. Most of the Demo¬
Originally, the employers had a tory. The Democrats have talked
can begin to build.
We have had come groups are heavily bur¬
cratic members of Congress also
great advantage in such bargain¬ about Unification of the Armed
to establish a sound fiscal policy
dened. The incentive of the mid¬
are willing to testify to the effici¬
ing but by reason of special legal
Services since Pearl Harbor.
A
and relieve the people of the bur¬
dle income group to work harder
ency of the organization of both
privilege, regulations and deci¬
den of war taxation. We have had
is
discouraged.
Investment of sions the labor barons came to Republican Congress passed it, to¬
Houses and to admit that it would
to deal with conditions which left
gether with a revision of the
money in new tools and equip¬
have been impossible to do more
the
country
helpless
through ment is made impossible for mid¬ have every smaller employer at whole promotion system, which
than was actually done.
their mercy. The principle of col¬
should have a profound effect on
strikes in every important indus¬
dle
or
upper
incomes.
The lective
bargaining
will
be
How
was
the result accom¬ try.
improving the efficiency of the
moment the present activity turns
strengthened by our provisions Army, This after all was a pri¬
plished? It was accomplished by
downward the tax burden will
No "New Deal" Congress
imposing equal power and equal mary concern before dealing with
team play and hard work on the
tend to produce a slide into de¬
responsibility on big labor and on
part of the Republicans. There
Who is it that criticizes Con¬
purely domestic matters.
pression.
was never any substantial differ¬
This Congress passed a bill set¬
gress today for failure to act and
redressing ad¬
Any present estimate of receipts "^■-business.
mitted injustices in the law we
ence between the leaders
of the what is his motive?
First, the
and expenses shows a surplus of have tried to create a condition ting up a national scientific foun¬
House and the leaders of the Sen¬
Communist because this is not a
dation to encourage research in
abotit $7,000,000,000 in the current where
ate. Differences within the party
employer and employee
Communistic Congress, and be¬
every scientific field throughout
fiscal year and at least $3,000,000,- meet on
were reconciled in the party in¬
equal terms, and neither the entire United States. It is the
cause tlie Communists do not be¬
000 of this should have been de¬ will make unreasonable demands
terest by the surrender of indivi¬
lieve in Congress at all. Second,
first Congress to realize the tre¬
dual views and
advantage for the New Dealers and the C.I.O. voted to a reduction in taxes. because he knows they cannot be mendous
importance of research
party opinion and party welfare. because this is not a New Deal Surely the debt should be steadily enforced.
to our modern life.
reduced, but too big a reduction
Of course, there were some ex¬
The Act itself has been violent¬
or a C.I.O. Congress, and has con¬
We passed a bill reorganizing
ceptions.
And those exceptions cerned itself with reversing the in a single year greatly reduces ly attacked, but polls show that the whole Puerto Rican govern¬
received publicity out of all pro¬ abuses of the New Deal rather purchasing power and can en¬ a great majority of labor itself is
ment and permitting the election
portion to their actual importance; than with extending them. Third, courage a serious deflation. The m favor of nearly every reform of a
governor by the people, the
President
not only vetoed the contained in the Act.
but few indeed were unwilling to
Working
those modern planners who do not
most important step forward in
current reduction but he vetoed a
abide by the majority sentiment
men, who after all are the labor
really approve of Congress at all
our colonial policy since the Tydreduction for the year 1948. When
of their Republican colleagues in
movement, favor a majority vote
and who believe in government
does
he think taxes can come before their leaders can impose ings Act which preceded Philip¬
House and Senate. Congress suc¬
by the executive.
They would down?
pine independence. We submitted
ceeded because of the ability, and
upon
them a union shop.
And a constitutional amendment to the
have
Congress
delegate all its
The subject of taxes and ex¬
the
cooperation, of Republican
they also are in favor of written States limiting a President to two
power, including taxation, to some
penses is inevitably tied together.
Senators and Congressmen.
consent to a
check-off system.
federal bureau and not bother its
terms.
We provided for succes¬
The President's real reason for re¬
Labor is in favor of making wel¬
In the foreground of Republican head about what is done there¬
sion to the Presidency in case of
taining the taxes is obviously to fare funds trust funds in which
cooperation stood the Republican after.
Fourth, those who have
the death of both President and
have more money to spend. The
they have an equal legally en¬ Vice-President.
delegation from the State of Ohio. some project of their own, no
We have thus
best reason to reduce taxes is to
forceable
interest.
Labor 4s in found " time during the intense
John Bricker and myself worked doubt of importance, but post¬
reduce our ideas of the number
favor of requiring financial re¬
together in the Senate. I have poned in the necessity of con¬
controversy on taxes and labor to
of dollars which government can
never seen
a new Senator who sidering measures more vital to
ports from their leaders. Labor is
properly spend in a year, and in favor of free .speech for em¬ develop constructive policies in
gained so rapidly the affection the public welfare.
four
important
fields, and in
thereby reduce the present in¬
and respect of his colleagues, or
ployer and employee. Labor is in many others.
But as far as we can judge, the flated ideas of the proper scope
took hold of the job so effectively.
favor of getting rid of Communist
Among the matters pending on
people approve of the things Con¬ of bureaucratic activity. The time
I shall always be grateful for his
officers.
the calendar and in committee are
gress has done. For the first time has come when we should deter¬
effective cooperation throughout
The Act does not in any way
in 16 years those things have been mine the limit of the tax burden
extensive programs sponsored by
the session, and also for the kind
done because
the people them¬ which can safely be borne and prohibit a strike for better wages Republicans to provide federal
words he has said about me yes¬
It does prohibit sec¬ aid to states and local communi¬
selves have wanted to have them conform our expenditures to the and hours.
terday. The 19 Republican Con¬
done,
and
not
because
some taxes, instead of levying taxes to ondary boycotts and jurisdictional ties in the fields of health, educa¬
gressmen from Ohio may not have "must"
strikes, which were admitted by tion and housing.
It certainly
legislation has been trans¬ cover
every
expenditure
any
been the largest Republican dele¬
every
witness" before the labor hardly lies in the mouths of the
mitted from the White House.
crank can think up.
gation in the House but they were
committee
to
be
outrageous Democrats to accuse us of delay
There are those who
criticize
The Democrats have fought just abuses
the most effective. Most of them
of
the power of union in these matters when they have
our constitutional system because
as bitterly against every effort to
had been there a long time and
bosses.
We have put unions on
the President and the Congress
been in power for 14 years with¬
reduce
had acquired influence in com¬
expenses
as
they have the same basis as corporations so
may be of different parties and
out enacting such comprehensive
mittee and in Republican councils.
They have far as spending their members'
who have feared that this condi¬ against tax reduction.
programs.
Apart from the fact
taunted us with our inability to dues for
They had a predominant influ¬ tion would
political purposes is con¬ that we were involved in pro¬
produce a deadlock in
reduce this expense or that, while
ence on Rules, Ways and Means,
cerned. We have corrected many
government. If any one will ex¬
Armed
Services, Foreign Rela¬ amine the list of laws that have they enlisted every selfish and minor injustices developed in the grams demanding more immedi¬
ate
action, there
were
several
sectional interest to prevent re¬ administration
tions and many other committees.
of
the National
been
passed he
will conclude
duction.
In spite of Democratic Labor' Relations Act, particularly good reasons why those programs
They are trained in the party
broadly that there has been no
should
be still
carefully con¬
tradition, and in the willingness
legislative deadlock, nor, so far as opposition, the total reduction of those which actually encouraged sidered. There has not been time
to sacrifice individual interest to I can
expenses
below the President's strikes and we have created a
see, has the President been
to crystallize opinion among Re¬
party policy, as all of us are hampered in any important exe¬ figure should be $3,000,000,000. If joint
committee to study the publicans on the exact measures
it is, the government surplus will
trained here in Ohio.
cutive
policy.
But
the
much
operation of the Act and to deal
be
approximately $7,000,000,000. with the more fundamental prob¬ to be taken, and there are strong
vaunted talk of cooperation on the
differences as to methods. All of
Work Was Long and Hard
David Lawrence said last night
President's side has come to noth¬
lems necessary to insure increased
them involve a considerable ex¬
The work in Congress was long
that
the
80th
Congress
had
ing
Apparently,
he
contem¬
productive strength.
We do not pansion of federal spending, and
achieved the best economy record
and
hard.
For the last four
wish to follow England, where it
plated that all the cooperation was
activity, even though the admin¬
ever attained by a peacetime Con¬
months we have never recessed
to
come
from the
Republicans.
has become so apparent that once
istration is to be left solely to
a
regular day, and in the last Outside of foreign policy, he has gress in a quarter of a century the
productivity of the individual the states and local communities.
and made the biggest cut in Presi¬
month we included Saturdays in never consulted the
Republicans
worker declines a nation is in¬
At a time when we have such a
dential recommendations for ex¬
our long sessions, making it im¬
or
discussed with them any im¬
deed in dire straits.
huge budget of expense, involv¬
possible to keep up with the rest portant public policy. Even in penses since the present budget
In the field of government reg¬
ing large items—which we hope
system was established in 1923.
of our work. If our constituents
ulation and control the war was
foreign policy, Republicans were
are temporary—for armed forces,
He points out that Representative
have felt themselves neglected in
declared officially ended for leg¬
hardly called in on important new
foreign relief and veterans' edu¬
Cannon, of Missouri, the ranking
the last few months, it is only be¬
islative purposes. Most of the re¬
proposals like the Greek Loan and Democrat on the House Appropri¬
cation, it is hardly consistent to
cause we have literally not had
maining controls were eliminated
Committee,
admits that
the Marshall Plan until the policy ations
branch out into vast new fields of
time to answer correspondence.
or
modified.
Only rent control
itself had been formulated and $2,000,000,000 has been cut in apThe last three days were the most
nnu ntr

*

■\

'

'

Thursday, August 7, 1947

FINANCIAL CHRONICLE

•




,

Volume

federal

166

Number 4618

activity.

uation

will

1948.

THE COMMERCIAL & FINANCIAL
CHRONICLE
not

The budget sit¬

be

much

Finally,

clearer

the

in

be

local

set

by

New

the

up

bued with
federal

administration

desire

Dealers
to

im¬

the

Labor

Neither

of

housing

Federal

assistance

social welfare is

list

of

'},

V

action

\ 'Vr

'

fields

in

on

•'

*

•

is

In

the-field

realize

policy involves
of

an

that

to

poses
'our

taxpayers and

labor to

it is

the

and

Yalta

by

Roosevelt,

and at Potsdam by
'President Truman, we practically
abandoned
which

the

created

an

which

>

all

of

war

the

ideals

for

fought.

We
impossible situation in
was

freedom

is

throughout large
Europe and Asia.

He

has

often

suppressed
sections of

was

office

at

It

is

on

est

in

New

and

of

cent

one

believes in
now

Deal

doctrine

of

held

its

July

on

The

and

institution

new

elected

executive
are

officers

Andrew

of

tive

W.

far

ahead

as

we

merged bank has capital funds in

can

federal

government.

He

$7,750,000, total
over
$120,000,000 and

sources

Westchester offices.
to

employee of the

an

of

excess

He insists upon a health
plan
which will socialize
our
entire
medical
profession
and
make
see.

every doctor

Vice-President, and William
Post, Secretary-Treasurer. The

the

merger

re¬

18

A reference

appeared

in

our

issue of July 31, page 457.

has
'

favored

step

every

tralization

of

toward

in
federal

;

cen¬

bureaus, or
in
Valley
Authorities, as against the power
of independent
states, cities and
schools.
office

He

those

has

who

appointed
believe

trol by government.

in

HI

■'

.

The

federal

power

Essex

Lynn, Mass.,
of

its

urer,

HI

*

*

Board

manager
Viscose Corp.,

American

of

Treas¬

Hi

Hi

Beach,
of

division,
dent

and

opposed every effort to
In
Germany
Camden, N. J„
1
announces the election on
policy has been dominated by bring about labor reform.
July 10
the harsh and impractical MorWhile the Presidency remains of Henry
Knepper as President of
genthau plan,
even though the in Democratic hands, a Republican the bank and F. Morst Archer as
government pretended to repudi¬ Congress is faced with the job oi Chairman of the board.
ate it.
Our German policy has undoing, step by step, the more
*
Hi
Hi
•'/ •'
serious abuses of the New, Deal,
/ wrecked the. economy of Europe
A. Dean Swift,
Jr., Assistant
and in every step it faces a veto
and now we are called upon for
Cashier of the

assume

personnel

Vice-Presi¬

monthly meeting of
July 25. He will ar¬
rive in Portland in early Septem^
ber to succeed A. K.
Arnold, who
resigned, effective July 1, to join
the

on

Interstate

ment

Tractor

&

Equip¬

Company."

The

advices said that Mr.

same

Beach, who is a native Portlander,
accepted in 1933 a position wit.v
Citizens National Trust an t
Savings Bank of Los Angeles. He
resigned as Vice-President there
to

his

assume

present post

election

with

States National.

and

H. Russell

Hooper, President

of the City Bank.
price, it is stated,

The

The

stockholders

purchase

$1,342,841,

was

will

meet

on

Aug.

10 to ratify the sale.
The
stockholders of the City
Bank, it
is
stated, will receive $43.50 a
share.

Hi

*

Hi

The

Redman,

of ' Hamilton

M.

Trust Officer of the

as a

National

Bank

of

Commerce

of'

Seattle, Wash., was announced b v
July 24 by Andrew Price, Presi¬
dent, it was reported in the Seat¬
tle

"Times"

of

account

of

"Times"

notes

July

24.
In tl p
election, tin

his

that

Mr.

Redman

;The City Trust & Savings has
located
in
Seattle, havbn;
began as the Youngstown moved
from
Philadelphia,
Pa,,
Savings & Banking Co., which where
Bank

was
incorporated
in
190$.
It
opened the following year and in
1910 the name became the
City

Savings Bank, it was in¬
Youngstown press ad¬

dicated in
vices.

The

Dollar Bank

was

or¬

ganized in 1887$
The

our

July

the

directors

Hi

he served wrth the Provi ¬
dent Trust Company 16
years an 1
promoted to Trust Officer
three
years
ago.
Robert W.

was

Sprague continues
dent

and

Seattle

Trust

Merchants

National

Bank

Haute, Ind., has increased
its capital from $300,000 to
$500,000 by the sale of
$200,000 of new
stock, according to the July 28
Bulletin of the Office of the
Comp¬
troller of the Currency.
The en¬

larged

capital

as

Vice-Pres*

Officer

institution,

the

of

became

*

"Times"

H«

The London Head Office of the
Chartered Bank of India, Air
tralia & China received on
July
10

advices

from their Bangkc k
advising that their Tong(Bhuket) Agency would re¬
for business on July 14.

Agent
kah
open

effective

*

■

Hi

«ii

July 18.

.

cash

from

the

remedy

taxpayers

our

breakdown."

to
The

whole

policy has created an im¬
possible situation, which only a
strong executive policy can hop'e
even to alleviate.
Certainly it is
beyond the power of Congress,
which

cannot

initiate

policy.'■ _•$'/

foreign

:'$■

Congress went along this year
With the Greek-Turkish loan and

/.

With the relief for Europe made
necessary by the stupidity of our

previous policy.
It seemed that
these things might help to mainthin the political status quo with¬
out

serious

danger of

war/ until

economic recovery in Europe,
rr No'
country -has ever been
generous

as

the United

so

States in

We have
inade dollars available to. foreign
in

almost

unlimited

amount, with little restriction of
the

use

have

to -be made of them.

We

thus

permitted the raising
many
domestic prices.
Cer¬
tainly, we are interested in rea¬
sonable loans to enable foreign
countries to go to work and help
themselves, but I believe those
fined

hereafter
to

actual

and

equipment

able

the

should

be

which

the




it

Philadelphia, will

become Cashier

of

1948—and they

will

on

C.

foreign

L.

Vertin

Main

Co.

with

offices

Street, to conduct

a

at
se¬

curities business. Frank M.
Meyer
will be manager of the new ort

ganization.

i

\.

,

trust

company

for 28 years,

retiring in 1946. Ac¬
cording to the Philadelphia "Eve¬
ning Bulletin," he was one of the

pany

SALINAS, CALIF. — The firm
Herman, Hampton and Com¬
pany is being dissolved, and C. L.
Vertin, who-has been a limited
partner in the firm is establishing
341

the

founders of the Title Co. of Phila¬
delphia and President of the com¬

Being
Salinas, Cal.

of

receive

peoples involved to work harder
support themselves, and are

to

as

C. L. Vertin Co.

own produc¬
ability.' Certainly, we must
move very cautiously and be sure
that additional loans really fur¬

to

job

tional Bank of

*

*

Directors of the Northern Bank
of Milwaukee, Wis., have author¬
ized writing down the book value
of the bank building at 3536 W.
Fond du Lac Avenue, to a nom¬

Sept. 1, it was
should be done. The Republican
indicated
in
the
Philadelphia
Party has shown its complete
"Evening Bulletin" of Aug.
1, inal $1, it is learned from the
capacity to develop policy in this which also said:
most difficult field of legislation.
Milwaukee "Journal." An item to
"His promotion was
announced
this effect in its June 29
It has shown its ability to admin¬
issue,
yesterday by C. A. Sienkiewicz,
further said in part:
ister the executive department as
President.
Mr. Swift, a Marine
well as the legislative. Its domes¬
The furniture, fixtures and
Corps veteran, will succeed Leo
tic policies will always be sabo¬
M. Kelly, who is
leaving for Kan¬ equipment and a nearby parking
taged ; and opposed by. a Demo¬ sas
City, Mo., to join the Gustin- lot, 100 by 150 feet, are also down
cratic
executive
administration. Bacon
to the same amount.
The replace¬
Manufacturing Co. CentralThe befuddled foreign policy can
ment cost in today's
Perm directors also
market,; it is
promoted Elonly be redeemed by a change wood K.
estimated, would exceed $200,000.
Acker
and
Harry F.
in the executive
administration^ Richards from Assistant Vice- A. E. Francke, President of the
If the people want a definite end
bank commenting on the
Presidents
to
action,
Vice-Presidents.
to overgrown bureaucracy, over¬
Four new Assistant Cashiers were said the building had been pur¬

Formed in

con¬

tive

..incentive

the

only

.

them to restore their

nish

do

Central-Penn Na¬

is

do so.'

goods, machinery
necessary to en¬

countries

to

President in

of

loans

way

There

overgrown tax¬
appointed.
They are Clifford L.
ing, and overgrown regulation of
Elliott, Roger S. Seasholtz, .Charles
everybody—all abuses of the New G.
Douglas, Jr., and Thomas H.
Deal; if they wish a return to the
Chase.
;
common
sense American
method
of handling our problems of reg¬
Lee Sowden, Chairman of the
ulation and social welfare,
and board of the
North Philadelphia
our
foreign policy, within the Trust
Co., of Philadelphia, Pa.,
principles of American govern¬ died
on
July 28.
Mr. Sowden,
ment, they can only reach that who
was 73
years of age, had been
end
by electing
a
Republican President

affording aid to others.

countries

President.

grown; spending,

peace1 treaty can be worked
and until there can be some

some

out

by, the
one

*

;

•

from 1927 to 1929 and

director

of

the

was

a

Commonwealth

Title Co. at his death.
*
-

Directors

Co.

*

-

of

posit Bank, both of
Pittsburgh, Pa.
have voted for a merger of West¬
ern

into

proval
banks.

Fidelity, subject to

by

stockholders
.

,

in

1939

substantially
ment

cost.

at

Peningfon, Golket
PHILADELPHIA, PA.

—

Pen-

ington, Colket fy Co., 123 Sou* i
Street, members of the New
York and Philadelphia Stock ExBroad

its

-

About

spent at that time

Other's With

figure then
replace¬
$20,000 was

a

under

Fant,

Qn

moderniza¬

tion.

'

Since

1939

the

bank

has

made

sizable write-offs on the
building
each year,
considerably more than
the allowable depreciation for in¬
come

tax

said.

In

purposes,

Mr.

Francke

;

'>■

John F. Fant

changes,

announce the association

with them

as

registered

represen

-

tatives of Marshall P. Deputy and
Jules G. Franks. John H. Kelsay

January, the successive
writedowns had brought the book
value to $10,000 and the recent
action brought it down the rest

has

of

ment and John F.

joined the organization

member

of

as

a

the statistical

fixtures were down to
$7,500 be¬
fore the final write-off to
$1.,

depart¬
Fant, former!
of Kennedy &
Co., has assumed
duties on the trading desk.

The Northern Bank
began busi¬
in 1936 and had
deposits of
$200,000.
It now has deposits of

Wharton B. Carroll

the

way.

The

furniture

and

ness

Hi

the Fidelity Trust
Western Savings & De¬

and

chased

of

ap¬

both

$18,000,000, giving it fourth place."
*

*

-

the

says.

HS

*

the

United

on

will

bank's

elected

was

at

who

the

Youngstown, Ohio, effective in United
September, was made on July 20

HI

of

the

the

July 20.

Directors

"Mr.

Hi

of Terre

of

of

made known

was

charge

town, Pa.

Hi

on

First Camden National Bank
Trust Company, of

lently

.

the death

Vice-President and

The

He has vio¬

v

'

by E. C. Sammons,' President.
In its advices, the Portland "Oregonian" said:

Hi

has been elected a director
of the
First National Bank
of
Lewis-

Trust &

■

Company,

announces

Joshua Mills,

to

con¬

HI

Trust

Hi

*

in

organization

30

merger

a joint
statement by Carl W.
Ullman, President of the Dollar,

as

Company,
officers.
of the

the merged bank, to
The County Trust

Oregon,

Michel, plant

*

its

States National Bank of Portland,

Dick
&
Walker, have been elected to the
board of the Wiikes-Barre De¬
posit & Savings Bank, of WiikesBarre, Pa.

the

the

of

City
with
Exchange National

before

Vice-President

as

Fowler,

of

meeting

taxing, taxing, taxing,

as

of

directors

He

economy.

Vice-President

American
*

Guy A. Smith, district manager
the Metropolitan Life Insur¬
ance Co., and Alexander W.
Dick,
President

present capacity«
He had formerly

Appointment of Frank L. Beach

Hi

Announcement of the sale of the
City Trust & Savings Bank to the
Dollar Savings & Trust
Co., both

known

runner

a

Bank in 1930."

of

of

Wilson,
Jr.,
Chairman
of
the
spending, spending, spending. He board; Joseph E. Hughes, Presi¬
has shown not the
dent; William L. Butcher, Execu¬
slightest inter¬
the

H«

Irving Trust Company, of Tarrytown, and The Bank of West¬
chester, of Yonkers, the board of
be

as

26

H<

*

1

July 29 of the merger of the
County Trust Company, of White
Plains,
N.
Y.,
the
Washington

Democratic Presi¬

a

Trust

National, subject to stock¬

Avenue

Hi

on

not his

&

holder approval.

Harold J.
*

Following stockholder approval

He faces a divi¬
Democratic Party in
Democratic
success
de¬

expect

Madison

*

clearly believes

in

of

President

a

Building. Mr.
formerly in charge of

pany

States.

to take any other
position.
The President

our

except with
great
give foreign
countries a piqture of a divided
'America.
I am not
happy about
the
country's foreign policy.
Through the agreements made at

elected

the Bank of the Manhattan Com¬

dent

pro¬

resources

was

cated in the Chanin

President

National Bank

Pittsburgh, Pa., announces
that the Bellevue Savings & Trust
Co., of Bellevue, Pa., will shortly

and 41st Street.

never

danger

not,
provocation,

Teheran

the

pends
upon
.retaining
in
the
Democratic Party the radical and
Communist votes of the
largest
northern- cities.
The people can

should

gress

that

Mellon

Mellon

He will be in charge of
the bank's 42nd street
office, lo¬

completely opposed to the prin¬ Croker

which

that

or.

*

July 31.

sion, in the

field where Con¬

a

clear

1897

January, 1934.

Co. of

become the Bellevue office of the

*

William L. Croker

personal fault.

productive
unreasonable degree.

an

I believe

the

war,

the

drain

unless

in

us

unnecessary

♦

by the prin¬

general, I believe Congress should
interfere

pany of New York.

against the in¬

ciples of the C.I.O.

and
existing
law
confer upon the President almost
complete power over the foreign
policy of the United States. In
to

might

a conservative
way, but
in every crisis he has shown
that
he is still dominated

; Constitution

hesitate

Vice-President of the
Corn Exchange Bank Trust Com¬

talked in

• '■

of

We

week

a

an

Assistant

United

of

foreign policy,
this Congress has done its best to
cooperate with the policies of the
President.

in

the

Magne Hoel, formerly Assistant

Secretary, has been appointed

full examination

a

in

"News,"

Y
began his

old

National

were

what

Dallas

Wharton* who

career

been

ciples of the Republican
Congress,
representing the people of the

Foreign Policy
:

named to his

and

OFFICERS, ETC.

CAPITALIZATIONS

Throughout this session, it has

the
/

:

was

NEW

Pendefgast situation in
City, that they filibus¬

become

1948.

.

Democrats

about

25

City National Bank,
early parent of the First National,

REVISED

Opposition of President

improve
education.

in

the

bank's board of directors held

to

definitely

for

vestigation at the risk of sacrifice Vice-President of
Sterling Na¬
ing
all
necessary
legislation tional Bank & Trust Company of
which had to be
New York at a
completed.
meeting of the

Relations

and

the

tered for

of the

action must be taken

concerned

Kansas

appointees
can be said to have the
slightest
sympathy with the views of the
majority who enacted the Labor
Act. But, Republicans agree that

health,

the

be revealed in

by his appointments to

National

session,

so

ments from the President was not

Board.

long

CONSOLIDATIONS
NEW BRANCHES

examination of his
dealings with
war
contractors.
At the end of
the

the

News About Banks

"Mr.

searching

increase

depends on the
men appointed to
carry them out.
A
Republican
Congress
would
like to be sure they were initiated
by men who really believe in
keeping control out of Washing¬
ton. Our hope for sound appoint¬
power,

increased

learned from

which also said in part:

Maryland and West Virginia. We
refused to admit Senator Bilbo
to
the Senate
without a

whether they will

or

(541)

own

people the character of the
Democratic election tactics which
have prevailed in Kansas
City, in

communities, without inter¬
plans,

our

the

of federal assistance to states and

of the

on

Finally, the Republican Con¬
gress is trying to
bring home to

these principles are car¬
ried out in accord with the spirit

ference with

burdensome

taxpayers.

question

whether

local

too

Hi

Lang Wharton, Executive VicePresident of the First National
Bank in Dallas,
Texas, celebrated

completion of his 50th year with
the institution on
July 26, it is

With Lewis G. Dick
PHILADELPHIA, PA. —Whar¬
ton

B.

gerald
with

Carroll, formerly of Fitz¬
& Co., is now associate !
Lewis

C.

Walnut Street.

Dick

Co.,
,

1420

COMMERCIAL & FINANCIAL

THE

Thursday, August 7, 1947

CHRONICLE

(542)

26

the

partition of Poland

thus

between

at

one

stroke

reducing

the

and Russia was an ac¬ people to helpless servitude. They
complished fact.
In addition to had denounced as enemies all
her seizure of Polish territory and states where free enterprise was
fostered by those whose politica
permitted; had secretly carried
a portion of Finland, the Russian
calculations have proven faulty
Government had seized the Baltic out organized attempts to over¬
or whose errors of judgment have
States of Lithuania, Latvia, and throw the governments of such
been responsible for the failure.
Esthonia,
and
was
even
then states and had never made the
But in due time the force of events
deeply engaged in the process of slightest effort to conceal their
makes manifest even to the least
murdering or deporting all citi¬ profound dislike of the British
observant the sterility of military zens of these countries deemed Empire and of its institutions.
victory alone.
In political and economic policy
capable of organized opposition.
and in material interests and am¬
(3) Geographical, no less than
Only the annihilation of the
racial
and
political considera¬ German and Italian States and bitions the points of present and
tions, render some states natural their Balkan allies was required future conflict between the Brit¬
allies, while present or recogniz¬ to make the Russian Government ish and Russian Empires, were
able future conflicts of interest
without number.
British leaders
with its unparalleled reserves of
render alliances between others
were
not unaware of them.
In
territory, manpower, and natural
unnatural. An instance of an un¬
his volume "Great Contempora¬
resources, supreme upon the Eu¬
natural alliance is where, despite
ries" Mr. Churchill, with charac¬
ropean
Continent. And Russian
Germany

Rejecting Outcome of
friendship

(Continued from page

not

2)

countries

security. To pre¬
status was the British

maximum of
this

serve

war

objective.

tacked

at¬
in
No immediate

Britain had not been
had any country

Great

nor

Europe.

Western
attack
theless

the

Germany,

Never¬

anticipated.

was

British knew that a
any

or

other

state

the Con¬

might.

this were many.

both of men and

materials, leav¬

ing the British without a single
Continental ally or supplier. Such
power

a

could close the narrow
at Gibraltar and Suez

waterways

drive the British from
Mediterranean; it would lie
thus

the

upon

the majority.

trade or commerce are
anticipated in such an at¬

prosperous

The reasons for
A power which
could occupy all of Europe if neec
be could command its resources

British

under

their
Not one
of these
governments can meen
any reasonable test of legitimacy
and their behavior both in respect
to internal and
external affairs
will be molded by this controlling
factor.
Those who suppose that
either peace, contentment, or

rule

grown all-powerful upon
tinent cohld successfully challenge

and

bonds of
peoples but by heav¬

Britain and all the major
ily armed minorities, which,
of Europe experienced Russian direction, impose

Great

a

through

between free

to

be

the con¬
little purpose

mosphere, have observed
duct of mankind to

This

comparison of prewar

Eu¬

temporary

or

the

independent Conti¬

absorbing

nental
Great

States one by one causec

Britain

,

to enter the

balance

which

Ger¬

been

it ad¬
reaching
decision to enter the

avoided.

mits of

no

Moreover,

doubt that in

present
political
cannot

assured the inde¬ exist.

peoples

upon

supremacy

the

Continent

long delayed and

meant that the

long desired expansion of the Rus¬
sian Empire at the expense of the
British could no longer be re¬

military power of
sisted by Great Britain.
Events
Because
states
essential to the nation and hence its capacity for have made it clear that in their
maintenance of the balance have offensive or defensive action con¬
contemplation
of the Hitlerian
been annihilated the totalitarian sists of its own war-making po¬ threat British statesmen ceased to
tential plus that of those states
military and police governmen
give sufficient heed to the far

pendence

of its various

(4) The

interests in a given contro¬ greater threat of a Russia made
induce them to act in con¬ all-powerful as a consequence of
cert with it. Thus it is not impos¬ the war. And this is the less un¬
sible for a state of moderate pop¬ derstandable since it was the Brit¬
ulation and war-making potential ish Empire which for centuries
to establish
and maintain itself had barred the natural expansion
as a great power provided it pos¬
of Russia, and Great Britain had
sapped; many of her most valu¬ sesses requisite skill in the organ¬ more than once gone to war in
able customers either ruined or ization and leadership of coalitions resistance to that expansion.
taken permanently into the Rus¬ of neighboring states. Great Brit¬
German desire to replace the
sian orbit; her military and mora
ain presents a brilliant example
British in the Near and Middle

the side of
Poland, thus converting a local¬ prestige diminished; her loyalty
ized conflict into a general Euro¬ to more
than one faithful ally
pean War.
It is not improbable under serious question, for the
that the wisdom of this step wiL first time since she became great
be challenged by persons viewing is confronted upon the Continent
the event in past perspective. But
by one power of sufficient strength
such a challenge is unnecessary to to swiftly overcome all others.
a
correct understanding of what
In this singular outcome of
has happened, since the decisions titanic struggle carried to a seem¬
which brought Great Britain to ingly victorious conclusion by
her present unhappy position were great and brave people is to be
decisions taken during the prog¬ found one of the strange episodes
ress
of the war and might have of history. The British people en¬

man-Polish War upon

unity of military pur¬

with that of today demon¬ pose, unity in respect to
strates how complete has been and future economic and
does
not and
the destruction of that salutary interests

rope

British Islands and of Russia, controlling the enor¬
Asia and its armies could follow mous war potential of that coun¬
overland
routes into the Near try, as expressed in territory, pop¬
East, Middle East, and Far East ulation, and natural resources, has
as
it chose.
Fear that Germany been made supreme upon the Con¬
was
about to reach this stature tinent. In contrast, Great Britain
through the strategy of destroying her wealth dissipated; her vitality

between

War

tered

the war with a

single pur¬

that of preventing an antici¬
pated concentration of continental
power within a.single state.
Yet
before the war was over they had
become party to a plan of cam¬
paign, the certain consequence of
pose,

whose
versy

of this.

Throughout the long Na-

East

was

a

matter for some con¬

teristic

vigor and

eloquence had
Russia and

described the rulers of

their government,
pains to define
aims and ambitions.
The
of the British -Intelligence

the character of
and

taken

had

their
files

Office

must have

enormous

contained that

output of printed mat¬

ter, in part recently analyzed by
Mr. Max Eastman, which, while

fully disclosing Russian plans and
policy, made no concealment of
the adverse views of its leaders
respecting the British Empire and
British Institutions.
All this makes it the more diffi¬
to

cult

understand

why, at the
of Ger¬

moment when their fears

of Russo-German col¬
laboration might well have been
many

or

quieted by the German

attack upon

Russia, the British War

Govern¬

ment swiftly renounced an age¬
poleanic wars Great Britain was cern. But Russia and at least a
long policy and accepted its pre¬
the
recognized
organizer and
portion of the Balkan States to¬ cise antithesis. And the difficulty
leader of the coalitions resisting
gether with Turkey, for reasons is the greater when one considers
the expansion of France.
But it
affecting their national security, that acceptance of the thesis of
will be observed that such a state could be counted upon to join

of lesser population and resources,
being dependent upon allies, will
cease to be a strong power when
allies are

no

longer

available to it.

(5) For reasons outlined in the
preceding paragraphs it must be

Great

in

Britain

ritories.

ral

to a

resistance

German movement

into these ter¬

In this is seen the

natu¬

working of the balance.

The

single possible

exception to this,

Russo-German

collaboration pred¬

principle admitting

icated

of no exceptions that a power
substantially weaker in population

seized

apd resources than a strong state
with which its interests sharply

Great

regarded as a

upon

a

division

of

the

territory, was removed by
the German attack upon Russia.

domination of
have been
predicated upon no less tenuous
a supposition
than that the Rus¬
sian rulers having it firmly within
their grasp would
renounce an
imperial prize, the expansion of
their. Empire and the broadening
Russian

of

military

Continent

the

their

zone

could

of

influence.

One

well inquire by what process
war
the British Cabinet consid¬
of reasoning, by what example of
her
pledge
to Russia, was of conduct upon the part of Empires
ered itself to be giving adherence
conflict should never form a mili¬ course in deep distress. Moreover,
of the past or present, including
to a successful foreign policy fol¬
tary alliance with such a state, beyond her own immediate neces¬
lowed
the British, could this supposition
by British
soldiers and
the purpose of such alliance being sities,
her interest clearly de¬ be sustained. Did not all history
statesmen without deviation for which, if successful, was to estab¬
the total destruction of neighbor¬ manded preservation of an inde¬
more
than three centuries. As I lish a concentration of continental
point unerringly to the conclusion
ing states.
By assisting in the pendent Russian State, since such
shall point out in more detail, it power more formidable, and hence
that, the power to expand her
annihilation of its neighbors the a state was essential to a correct
was deviation from this policy af¬
Empire being given her, Russia
more
dangerous to their Empire, weaker member of such alliance
distribution of European power.
would exercise it?
It is not im¬
ter the war began that has brought than that for the prevention of
in reality strikes a blow against But independent German and Bal¬
the British Empire face to face which they had felt compelled to
possible that British leaders fell
itself.
In the destruction of its kan States were no less essential
with disaster.
victim to their own and our war
fight. The discussion which fol¬ neighbors it destroys the sources
to preservation of that distribu¬
(3) Appreciation of the real lows is intended to make clear
propaganda. That they themselves
of its
strength, since it lessens tion, and hence to British security.
came
to believe that vast flood
outpome of the war, as affecting ;his fact; the fact that an ancient the number of its potential allies.
It was not the pledge of aid to
Great Britain and through Great
policy
was
abandoned by the But in respect to the more power¬ Russia but the pledge to continue of false witness, of concealment of
Britain ourselves, requires a com¬ British
the truth, of deception and distor¬
War
Government; that ful
ally the contrary is true. With that aid to the complete destruc¬
parison of the prewar Europe with sound military and political prin¬
tion, which is the vocal and ac-»
the destruction of each lesser state tion of
the strong independent cepted accompaniment of modern
that of today. Before Great Brit¬
ciples and precepts were ignored; the strength of the more powerful
states of Eastern and Central Eu¬
ain entered the war there stood that because of it the balance was
war; a detestable dissemination of
ally is enhanced since its weak¬ rope and their occupation by Rus¬
vis-a-vis Russia, a strong, capable destroyed; that Great Britain was
untruth which falsifies history,
ness and the natural deterrent to
sian armies that constituted devia¬ denies the existence of even the
and
productive German State. party to its destruction; that its
its expansion rests in the possi¬ tion by Great Britain from her
humblest of virtues among enemy
Though a
competitor of Great destruction has brought her peril
bility of formidable resisting coa¬ established policy. As certain as
Britain, Germany was also one and not security and that we, who
litions
and combinations.
It is it was that British security de¬ peoples, and conceals or ignores
monstrous infamies known to be
of her most valuable customers. deem
protection of the British plain that a nation which violates manded aid to the Russian State,
Between
Germany
and Russia
Empire
essential to our
own the principle here laid down, it was no less certain that it de¬ practiced by the rulers of allied
states. It is supposed that common
stood
Poland
and
the Balkan safety, are so deeply involved in
whatever may be the prompting manded refusal of such aid when
States. The small states of West¬ the
persons readily fall victim to un¬
tragic consequences that our motive, in reality fights to destroy it
came to a continuation of the
truths often repeated. Perhaps it
ern Europe were in excellent con¬
entire manner
of life must be the sources of its power and to
war to
the complete annihilation is no less the case with leaders.
dition ftoth financially and indus¬
adversely affected for many dec¬ remove the sources of the weak¬
of the German, Balkan, and Italian
trially.
They also possessed a ades.
Finding the answers to such
ness of its potential adversary.
It States.
certain tangible military strength.
II
questions is a matter for the fu¬
thus not only invites its own de¬
(2) In form and theory and ture. It is the fact with which,
The French Army was believed
Here
are
a
number of basic struction but paves the way for it. manner of government; in ethical,
to be the strongest in Europe al¬
as
a
people, we are concerned
economic, and religious concept; and not with those forces which
Ill
though France suffered from acute principles. They are sustained by
in viewpoint respecting the status
internal
dissension.
Italy was reason and find support in the
led up to it.
1
(1) When the British War Gov^
and rights of the individual, the
stronger than in many decades, writings of all recognized authori¬ ernment
hastily
concluded its
(3) There are some who say
Russian
Empire was
the very
and Spain was making recovery ties on war and the correct prac¬
that Russia, being weaker because
compact with Russia calling for
antithesis of the British. The lat4
from a civil war. In this disper¬ tice of states in its conduct.
he joint prosecution of the war
of the war, is less to be feared.
(1) Civilized nations engage in
ter, long established and ruled by
sion of power and wealth resided
to
the total annihilation of the
These are persons of little percep¬
government of unquestioned
the balance British security de¬ war as a means toward political
Germanic and Italian states and
tion. The strength of a nation, in
and politico-economic objectives.
legitimacy, desired above all else
manded.
■;heir Balkan allies, it pledged it¬
respect to its neighbors, is not
to be left to the tranquil enjoy¬
Today there is no German State, Success as to each belligerent
abstract but relative. If war has
self to a violation of the principle
ment and development of its poand German cities and productive must be measured in terms of its
ast
above outlined.
When the
weakened each of two potential
facilities are for the most part in objective. While military victory
^essions. Russia was governed by adversaries their relative strength
war
was concluded it had fully
a
rubble.
More than half of the is a step toward the goal, of itself,
group of revolutionaries who
implemented this pledge. Under ruled
may be little changed. If the po^
German population
and of the it is not the goal.
by force and violence; they
tential adversary of Russia is rel¬
the circumstances existing when
(2) To suppose a war to have
could assert no claim to legitimacy
arable land of the Germans are
the pledge was made the Russian
atively weaker vis-a-vis Russia
and hence tolerated neither dis¬
now in Russian hands.
Italy lacks been successful solely because of
Empire was not and could not be cussion of nor opposition to any because of the war, as against that
strength either for war or for an overwhelming military victory,
a natural ally of the
British nor
adversary Russia, though herself
or because of the total annihila¬
to
upon.
peace. France, impoverished and
interests be well policy they chosenot embarkpower weakened, is stronger. It is pre¬
tion of the enemy state is a mis¬ would British
These men had
seized
unstable, is torn with internal
served by the destruction of the
cisely in this manner that the sit¬
from the Czar, as seems so com¬
quarrels, a condition aggravated conception born of failure to ob¬
uation as between the British and
serve the true nature of war.
In Axis states. The armies of France, monly
supposed, but from
a
by unsound fiscal policies, which
Norway, and democratic government which suc¬ the Russian Empires has been
the exaltation of military victory Belgium, Holland,
the French Government declines
Denmark, all natural allies of
changed. As against the British
emotion triumphs over reason and
ceeded to
power following the
to abandon. Holland and Belgium
Britain, had been over¬
Empire Russian strength is many
for a time the people fail to com¬ Great
could offer resistance to no one.
Czar's
abdication.
Not content
thrown and their territories occu¬
fold greater than before the war
The strong independent states of prehend that the military victory
with seizure of the government,
pied.
Drained of their wealth
was barren since the political ob¬
began.
The states which, before
Eastern Europe no longer exist.
they had swiftly seized all the
they were weakened for a genera¬
the war, in concert with Great
All have been engulfed in the jectives for which the war was
property within Russia a.i well,
This tion to come. Polish resistance including lands and dwellings, Britain could have successfully
western expansion of Russia. They fought remain unrealized.
misconception is not infrequently had long since been broken and
are held within the Russian orbit,
the

somber


http://fraser.stlouisfed.org/
\
Federal Reserve Bank of St. Louis
f

Britain,

at the moment

of

may

of concealment from

encroachment

Russian'

resisted

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4618

166

Volume

no

one

with

growing

might of Germany, a
European totalitarian state which

her neighbors either in Eu¬
Asia, and could have been
counted upon to do so since their
national
interest
demanded
it,

knowledge of the past and a de¬
sire to look, even slightly, into
the future. And, as plain as it was

with

that

tinent.

have

opened

upon

rope or

been

destroyed.

Their

making

struction,- while

de¬

door

about

was

to

be

Russian

for

been

the

decline

to

upon that Con¬
went to war to avert

supremacy
We

recognized form of warfare, and
it is not without
significance that

as¬

we

ourselves,
sensitive

and

the
of

most

peoples,

and total destruction of the threat¬

was

less plain

no

the power of the
that of the

former

diminish

and

Russian

antagonism

latter.

toward

tection be withdrawn the destruc¬

about the total destruction of the

tion and

Japanese State.

ening
In

states.

bringing about the defeat

destruction

those

of

successful.

were

and

states

But

we

they are destroyed what seemed
obscure to many is now apparent
to everyone; that because of the
destruction

the

of

Axis

States

a

Given

the

premises
outlined
admitted of no other

to

less

than

apparent,
status

security is no
It is equally

our

before.

comparing

with

the

the

present, that the

above

(4) So apparent were the things
pointed out in the paragraphs just
preceeding, that objective reason¬

conclusion than that the Russian

ing admitted of but

swiftly to capitalize upon their is made
evident by their demand,
advantage, and that, since devel¬ as a
measure
essential
to
our
opment and execution of Russian
safety, that we now submit to
plans would require delay of re¬

conclu¬

State and its European allies

man

accomplished fact, the
would lose no
time in pushing toward comple¬
being

an

Russian

tion

Empire

ancient

its

hitherto

and

reason

leaders,
their

intelligently intent

upon

interests, would

own

move

Russian

threat

and

her

was

that

of

Britain

Great

is

greater

Germany.

military leaders

universal

covery in Europe, as well as Rus¬
sian control over such
govern¬
ments as were reestablished, they

to

Empire

civilian populations by
atomic explosives. The American
people received the news of this
new method and manner of
wag¬

with

war

satisfac¬
the declara¬

apparent

tion, and applauded

tion of the President that it was
his purpose to continue the atomic
attacks upon the civilian
popula¬
tion of Japan until that

That

military

it

training,

a

practice heretofore unknown upon
this

continent; to the maintenance

of

a
military and naval establish¬
expansion
unhesitatingly take steps ment many times
greater than
at the expense of the British. Yet to these ends.
Russian interest
formerly; and provision for an¬
our State Department and its staff
would also be best served by re¬ nual
military expenditure several
of supporting publicists, feigning moval of American troops from
times larger than our entire pre¬
ignorance of well known facts re¬ both Europe and Asia and the dis¬ war
budgets. These demands made
specting the despotic and illegiti¬ banding of American forces, and
by intelligent and patriotic men
mate
character of the
Russian the Russian Government would evidence
a
sense
of great inse¬
Government, and
ignoring the exercise the great political influ¬ curity and not of
security.
centuries old conflicts of political ence it unquestionably possesses
(5) To one who troubles him¬
and
material
interests
between both in America

thwarted

ambition

would

for

abroad

and

the Russian and British Empires,
assured themselves and the Amer¬

ican people that there need be no
fear. At the close of the war, said
officials

our

state

and

press

of

and radio,

their

to

bring this about.

situation

American

If

mained
that

leadership

uninformed

which

knowledge

self to take stock of the European

and

reason

made

re¬

respecting
little

a

objectively the plight of

the British

be

is

concealed

clear.
from

Since it

British, American

person

can

competent

no

or

Rus¬

clear, it is
lack under¬

our

as

power

yet give

a

impression of

our situation
We have settled all
ques¬
tions of relative
strength between

ourselves

and

the

Japanese Em¬

This has been
accomplished
without destruction of the
Japan¬

our

of

aware

are

(1) Events do not

clear

people

pire.

than

ese

State, and under

tration

there

of

General
little

seems

communist

a

the adminis¬

MacArthur

opportunity for-

seizure

of

power

the

over

Japanese people.
We
forced the Japanese out of
Manchuria and
Korea, but at the
expense of letting the
Russians in.
have

so

because persons who

British

pied and liberated countries, per¬ with whom
they deal;
mit independent governments to
be

established

there,

and,

like

in the

or,

passion and tumult of war, fail to
comprehend the forces they are

prudent businessmen, give them¬
unleashing; or are deceived in re¬
over to
the peaceful pur¬
spect to them, are persons walking
suit of Russian industrial and in¬
in the dark.
While the Russians
ternal reconstruction.
This ill- fought to clear their
country of
selves

considered

born

of

fateful

and

refusal

opinion,
heed to

to

their

historical premises of the

annihilation

importance.
the

Among
following:

(a)

;

riot

them

were

were
revolution¬

but

Their power over the Rus¬

sian people, lacking all semblance
of

legitimacy, had been established
by force and violence, and, as

their conduct demonstrated, could

be maintained only by continuous
and

bloody repression.

To

such

governments external controversy
and even external conflict is a

necessity.
I

The Russian rulers' plans
for conquest and empire expan¬
had

manifest

made

been

through the Russian

war

against

Finland and the seizure of Finnish

iterritory; through
,conquest

upon

war

and

of the three Baltic Re¬

publics of Latvia, Lithuania and
iEsthonia, accompanied by the
i systematic
murder or cruel de¬
portation to Siberia of all ele,

ments of their population deemed

,'Capable
of
heading
resistance
against Russian rule, and by the
"partition of Poland in agreement

(with Germany,
panied by

a

partition accom¬

less inhuman treat¬

no

,

(c)

ditions

•

calculated

The

of the Russian Czars; tra¬
which

openly called for
/Russian political and commercial
/expansion at the expense of the
British Empire.

^

to
p

The fact that opportunity
gain not only the traditional

(d)

territorial
centuries

objectives
had

been

which

a

for

calculated

part of Czarist policy but the po¬
litical
objectives
of
Bolshevist
world

revolution

as

well

would

to Russia through the elimination of precisely, those European
come

*

vahd Asiatic

nihilation;

powers
a

the

States,

slated for an¬

simple fact capable




total

German

and

the

of

sink

to

cruising

peaceful

on

along his coast.
ther

wantonly attack
ships of war

British

fears

missions

In return he nei¬

nor

experiences

re¬

the British popu¬
small open island
lying olose to the Continent, swift
as

lation is upon

a

transfer annihilation
by a powerful enemy
Japan¬
controlling
and
occupying
the
ese property or territory to Russia,
mainland and armed with atomic
fought to make Russia the master missiles would be its
or

substantial German

of two Continents and

the Asiatic

British

the

of

or

Empire.
If it is true that American politi¬
cal and military leadership were
successor

of

unaware

natural

acts,

and did

not

could

the

their

of

quences

not

conse¬

that

fact

affect the

result in the slightest.
The

discovery

lished for its
termination
tions

of the atomic
precedent estab¬

the

and

in the

use

of

certain fate.

Against

such

Britain

dare

present

mass

civilian

ex¬

popula¬

for

upon

dare

concessions

not

lies

necessity be delayed until

In

meantime

the

with

it

pursues

determination

its
and

intelligence,

are

our

natural al¬

cousins.

Their Is¬

quickly

overwhelmed by a
determined upon undis¬

power

Even

more

and

control
in

the

declared

of

event

war

the
of

Continent.

formally

a

the

possibility of
saving the British from swift

destruction

interests

she

would

be

no

greater

world

can

observe.

and

inevitable
be

The

course

which
Russia

natural
events

of

delayed but not changed
all
and

scientists
her

weapon

agree

both

smaller satellites

will possess with no considerable

nation

to
to

express

firm

determi¬

Russian expan¬
sion at the cost of Turkish inde¬
oppose

pendence and territory is a matter
of
little
difficulty.
We possess
atomic weapons. Russia does not.

lapse of time. But the contribu¬
tion of its discovery to British in¬
security can scarcely be over¬ When Russia does possess these
estimated.
With that insecurity
weapons, will either we or the
we are
British be willing to press that
deeply ^concerned.
Our objectives in the European opposition to the
point of war?
War as announced by our leaders Knowing the fearful
cost, would
and by those important formu- the American people
support their
lators of public opinion who aided Government in such
an
enter¬
our
leaders in expressing
their prise?
viewpoint were the same as the
The pattern and precedent for
objectives of the British-National the dropping of atomic missiles
Security.
Our national security upon civilian populations has been
was
deemed
menaced
by
the set. It must be considered as a

we

and

more

may

any yet

to fear

reason

be approaching

terrible

new

conflicts

than

experienced by mankind.

Whether these

be avoided de¬

can

pends, unhappily, not

upon

our¬

selves but upon ambitious rulers
who do not hesitate to express

their disdain and contempt for
and

our

us

institutions, and whose

personal safety at home may re¬
quire conflict abroad. It is there¬
fore necessary, not
only that every
essential
defensive
measure
be
taken

at

home

but

that

every

foreign policy be in¬

our

one

day
enmity where our
safety demands nothing

conduct

blow

to present friend and
present con¬

constituted a heavy
the
Manchurian
and

to

Korean

people.
So
brought the Koreans

churians

rule,

relief

while
and

from

we

Man-

Japanese

also brought them, indus¬
trial ruin at the hands of
the Rus¬
sians. The withdrawal of the
Jap¬
we

anese

armies

from

China

and

Manchuria has not

resumed.

Until

concluded

it

these

cannot

whether China
state

under

two

or

is

wars

be

to

are

known

become

one

single government

a

more
states under as
many governments, nor can we
know whether China or its
seg¬
ments will become
strong and in¬
or

dependent
despite

controlled

or

the Russian

victory
our

door

open

in

in doubt.

over

Thus

Japan,

long quest for

China

/

Complete

within

of power.

zone

our

the outcome of
an

;

appraisal

remains

v

of

Russian

gains in Asia must also be post¬
poned until the conclusion of the
Chinese Civil Wars. But with our
consent

and

aid

she

has

already

gained enormously both territor¬
ially and in relative power. Such
balance

as

was

existed between Asiatic
that
between
the

of the Japanese Empire and
that of the Russian
Empire. Japan

power

having
there

disappeared
remains

in

as

a

Asia

power

state

no

capable of offering even slight re¬
sistance to any operation the Rus¬
sian Government
may undertake.

(2) The deterioration in the
sition

of

Great

Russia is

a

Britain

mination

to

conse¬

deter¬

as our

the

see

an

po¬

vis-a-vis

matter of vital

to us, insofar

quence

of

in

as

rulers

the

prepare

the

and

territory

Europe and Asia

Russian
ever

power

may

final

seek,

as

what¬

consequences,

ourselves, with such
British

Empire

can

the

or

aid

offer,

to meet force with force
wherever
or whenever need
may arise.

To many,

tary

exultant in the mili¬

successes we

have

discover

national
much

so

friendship. It is by

as

of

quered

that

enemy

in

secured.

To

are

in

of¬

impregnable in

humane
is to

so

de¬

powerful

we

gent

the world

men

tertain

respecting

heavy task of
guard once stood by
the defeated. But from this
there
is no escape. No other
country is
capable of performing that duty.
Should internal collapse
standing

a

bring

must

en¬

authority

the absolutism of which,

one

is unmodified and

unabridged, has
directly interfere
of)foreign

not hesitated to

in the

internal

affairs

states and demand the overthrow
of their governments
because of
the practice of a modified form of
absolutism. Not content with the
powers

we

unquestionably fen joy

under the law of nations to
punish
all who have committed

crimes

against the laws of war, we de¬
nounce aggression and the
break¬
ing of treaties as crimes and join
in

sending enemy leaders to the
gallows for each of these offenses.
Yet

ourselves

we

are
guilty of
many treaties while our
collaborators in these con¬
demnations have not only broken

breaking

two

innumerable treaties but of all the
world's

are
the two
That the world stands a
observer of our conduct is

aggressors

greatest.
silent
not

to

be

these

accepted

things

proof that

as

have

escaped

its

attention.

(2)
our

As

additional

reckless

permitted

party

instance

attitude,

ourselves

to

ancient

of

we

to

have

be

made

practices

demned by reason and

con¬

conscience;

practices for centuries abandoned
by
civilized
peoples
because

by experience to make fu¬

proven

ture

both

wars

terrible.

more

more

Thus

certain and

we

have be¬

come

party to the enslavement of
captured soldiers, recognizing the
right of our Allies to make chat¬
tels of human beings in the name
of
"reparations."

Similarly we
party to the long
abandoned practice of the looting
of conquered lands and cities and

have

become

upon

should

over

us.

in the exercise of world
with

great

war

expe¬

As example
this, our State Department, the
meanwhile walking hand in hand

victors

the

and

impunity

of

unfitting that
a

human

with

challenge all historical

to these practices

in

time-

rience and precedent. Yet in
many
aspects
our
national
conduct
seems to exhibit a total
disregard
of the opinion honest and intelli¬

of

forthwith fall

of

behavior

gained, or
in the fall of hated
governments,
it will no doubt seem

curiously
the military

flout

may

standards

proven

be

we

fense

that

part to

that

assume

so

and

future

our

small

no

permanently
fense

our

today both in respect

safety is

British

enduring

the

power of
the Russian Empire, the
indirect,
but because
indirect, no less cer¬
tain result of the fall of the
enemy
states, means that we must either
reconcile ourselves to such ex¬

both

present

There is abundant
that

Government

pansion

at

people we are con¬
fronted with perils and
problems
of unparalleled
gravity. Many of
these perils may be much closer
in point of time than we
suppose.
a

we

Near and Middle East.

us

As

tries to the value of
many billions
of dollars.
The despoliation
of
these industries
by the Russian

tion of Turkey as typical of other
independent states in the East and
For

our

V

<(1)

telligently appraised lest

was
the possibility of the
through represents
saving of Poland by the British. policy. Increase in

though not without But there will never again be a
guile and ill-temper, and formally declared wa'r.
Science
presses its advantages as far as has rendered that
stately practice
prudence .hdmits.
This all the obsolete. Consider also the ques¬

and necessity for increase in
defensive measures.

established and

Japanese had
developed indus¬

than

both

cause, her government and policy
continuing as at present, will
bring deterioration to our position

phase of

States

It would therefore be

feel

move

which

our one effectual outbase
against the Euorpean mainland.

our

to

At

iss

ply of these missiles.

It will then
more rapidly.

war.

refuse.
blood

and

land

puted

it also possesses an adequate sup¬

a

there

Russian Government's final

moves

risk

a

attacked

free

not

Great

enemy

is no such enemy.
few years there will be.
Great Britain will then be called

Within

playing an ( important
part in the timing of events. The
are

must of

an

The British

revival by discovery of the atomic

within Russia of the Imperial tra¬

ditions

Japanese

contemplated
of

will

ment of the Polish people.
•;

leaders

bomb

(b)

sion

Britain,

of

The rulers of Russia

businessmen

aries.

hesitate

America and Great prisals.
1
insofar as the plans of
Congested

give
simple truths, flouted factual and
utmost

not
and

invader,

an

gesture

displeasure, conscious of the de¬
cline of British
power, now ddes

perience immediate improvement.
Such improvement might
go very
But a resurgence in Russian
strength from whatever source or

In both countries the

relieved those
sian, it had best be openly faced.
countries of war. Civil
Even the petty tyrant of
wars, rag¬
the Russian leaders will promptly
Albania, ing when the
Japanese landed and
standing of the true interest and who in the past would have trem¬
withdraw their armies from occu¬
thereupon discontinued, have been
historical/. background of those bled before a

supporters of the

in

far.

of

in Asia.

prewar

change

nation

ing

that

now

tain.

one

col¬

change in the Russian
with a consequent
policy or decline in

a

Government,

strength, our position and that of
all independent states would ex¬

Germany and her allies in Eu¬ General MacArthur demonstrates totalitarian
power, both European
rope and of the Japanese Empire appreciation of this. It stems from
and Asiatic,
stronger by far in surrendered itself into
in Asia, that it is not an exaggera¬ the fact that General MacArthur
land war potential and resources without reservation.
tion to say that Great Britain as has successfully resisted the un¬
than Germany, has become su¬
against Russia has ceased to be a wise efforts of visionless men in preme
IV
upon two continents, and
first-class power. Should our pro¬ our State Department to
bring the menace

sion: the annihilation of the Ger¬

in

about

27

laboration

with the
British, de¬
anticipated danger. We at¬ signed the pattern and set the
tempted to avert it by the defeat precedent for the mass extermi¬

of

spoliation of the British
Empire would be swift and cer¬

humane

that

enhance

British

in

as against that of Russia
because of the total destruction
power

threatened

expansion at
the expense of the British Empire,

that, in time,
that door might be closed
again;
of Germany and her allies, British since every successful step toward
power as against Russia has de¬ the revival of strong independent
clined and that of Russia as against states upon either continent would,
between Britain
Great Britain has risen. So great as
and Russia,
has

sume

allies

it

Russia

strong, leaves Great Britan weak.
Because of the total destruction

the

its

(543)

the

viduals.

they

private property of indi¬
We have become party

are

in

violation

of

which
power

we

notwithstanding
and

open

treaty
became

notorious

covenants

to

a

signatory
following the first World

War.
Our

press

also

(Continued

carries the
on page

28)

an-

28

THE COMMERCIAL & FINANCIAL CHRONICLE

(544)

Thursday, August 7,1947
■

r

The Economics of Dollar Shortage

Rej ecting Outcome of War
pected. They burned no books,'
destroyed
no
monuments,
and
erected no tribunals, before which
to try men for alleged crimes of
state of which they themselves

(Continued from page 27)
inouncement that

we

now propose

Ger¬

to enter the field of internal

politics and condemn learned

man

and skilled men to common labor

for

the

of

balance

natural

their

lives for

belonging to the domi¬
nant political party of their coun¬
try, and to place upon trial and
punish manufacturers for supply¬
ing their country with munitions
in time of war, and bankers for
supplying funds. All this pursuant

been

have

white
nation

as

and

whole

had

a

for
the

the
de¬

"Carpet-baggers" never
permitted to invade and

tested

been

"4

both

for

better

far

colored

and

equally guilty. They made plunder the South under pretense
pronouncements respecting col¬ of reeducating and reorienting the
lective guilt upon the part of the Southern mind?
entire French people, and
pro¬
The conclusions expressed
posed
no
national
punishment herein have been reached upon
such
as
future
subsistence
at an objective appraisal of mankind
near-starvation
levels.
On
the as he is and not as one might

(Continued from first page)

might

offend

some

Government.

in

one

the

I admire this mod-

esty, but the plain duty to help
bring about the correct solution

were

of

no

seems

these

international

to

me

an

problems
obligation at this

time upon all industrial and com¬
mercial men who
are
informed
about

what

is

going

in

the

and

re¬

on

world.
The

comments

upon

they dealt with
the suppose him , to be who permitted sponse to the article on "the Dol¬
through their recognized his mind to be inflamed by hate lar Shortage" have impelled me
precedents."
leaders, carefully preserving the or whose sources of information no write these lines by way of a
(3) I do not know who fixed established mechanisms of French were confined to
the feverish further explanation of the causes
our national policy respecting the Government and of French indus¬
propaganda of war. I have ac¬ and remedies .for the so-called
matters just discussed or under try.
: r
Through
lawful
channels cepted it as an immutable truth dollar shortage. ' \ >'
what laws such persons presumed they aided in bringing about the that man is what he is because
Dollar Shortage an Illusion
to act. It was not the President, restoration of the Emigre Bourbon nature made him so and that he
The much discussed dollar short^
since the policy was laid down King,
thus reestablishing the will remain what he is until na¬
before he came into office. But I Government upon the principle ture through timeless processes age is largely an illusion. It is due
to

"new

so-called

contrary

modern

and

French

of

they are now en¬
Since the bearers of

gendering.

legitimacy, leaving to the fu¬
determi¬
nation of changes in their own

of

the hatreds

this burden will be the American

ture and the French the

Government.

To this Government

people as a whole, your children they left questions of punishment
and grand-children and mine, it for
political or miltary crime.
becomes our problem and we are From the revival of French in¬
entitled to speak respecting it. It dustry
and
commerce
which
is a question far broader than the speedily followed all EUrope bene¬
fate of perhaps a few million fited, conquerors as well as con¬
wretched individuals now in our quered. In short, while not forget¬
power. While we talk today pri¬ ting the interest of their respective
marily of the fate of these, we are states, the men who constituted
establishing precedents which will the Congress of Vienna recognized
be followed, and so in reality are the eternal truths of life and the
talking of and preparing the fate natural limitations upon the power
-of our own. This being so, we had of both rulers and ruled.
While contending among them¬
best consider these questions:
selves respecting
the territorial
(a) Will wars be more or less
terrible because rulers
erals

that death

aware

are

and

gen¬

the

on

political rearrangement of
Europe made necessary in un¬
and

effects

to bad treatment, and
will be much the
whatever his nationality or

to good and
his

responses

same

color.

obedience to laws,

he

decisions,

fate?
that

Or

surrender

of

chattel

become

know

soldiers

because

event

in

property

like
they

to

be

paving determined that quest.

the French people

mitted

should be

themselves under

a

per¬

reestablish

and

live

to

new

govern¬

the

whom

say, a war of anticipadefense, or a war of con¬
us

To him the one is precisely
same as
the other. Its pur¬

declared to him by his
government and the word of his
poses

are

ment, they followed the principle
government he accepts in prefer¬
that
a
capable and productive ence
([to that of foreigners. We
people stimulated by a desire to
need not criticize him for this
(b) Will rulers and generals be
repair their fallen {.fortunes were since learned historians
more or less patient in their ef¬
having at
of value not only to themselves
hand all relevant documents and
forts to peacefully dispose of crit¬
but to all of Europe, and they
materials contend bitterly respect¬
ical international disputes, know¬
carefully refrained
from
those
ing that a sudden blow in the senseless persecutions so charac¬ ing the causes of and the right
and wrong of the international
night from a suspicious or coldly
teristic of small and petty minds
quarrels which culminate in war.
calculating
adversary may
lay
and so foreign to those endowed
He will also fight as an ally when¬
their country waste and hasten
with high qualities of leadership.
ever directed
them to the hangman's noose?
by his government
They also avoided the taking of and
/These are no longer moot ques¬
every peopie in Europe have
any
step which would tend to
tions.
Our policy makers have
fought both as friend and as foe
destroy the balance of power upon to
made them real.
The precedents
every other people in the in¬
the Continent, and took every es¬
distributed as reparations
the conquerors?

among

we have established in the con¬
duct of the war, and those we es¬

that

today as conquerors may
day determine our fate and

of

may
lives

our

not
of

be far distant as the
people are measured. It

is far from

policies

now

and precedents
unknown men in
And no more mis¬

down

established

by

Washington.
taken

of

because

being laid

to say
mine and
perish
in

exaggeration

that your children and
children
may

their

flames

to its pres¬

and may

wars

of that Continent

be expected to do so as

continue. Men do
It
is when
arrogant men in
these things because that is the
power, refusing to recognize the
allies, and that day
way they are made and from i';

tablish
some

terminable

sential step necessary
ervation.

idea

could

entertained

be

than that these policies affect only

peoples and hence
disregarded.
enemy

VI

may

be

.

An excellent method of demon¬

existence

of

universal

ts

human

virtues

long

with
well as

nature
as

limitations, proceed
0
treat mankind as though man
were
what he is not and never
ts

universal

has

wars

as

there is

no

Mankind

escape.

many

great

virtues and to these no people can

claim
rifice

monopoly. Man will sac¬
his life unhesitatingly for

a

that disaster impends
his
country;
he
hates
tyrants
such men, in their
though
often compelled in his
gnorance and fanaticism promote
weakness to live under them; he
hatred and not understanding, and
hates injustice and hypocrisy anc
in the ruins of one war make
haste to sow the seeds of another. deceit; he writes, and cherishes
As administrators, by their vain through the ages epics holding up
to everlasting scorn ^arrogant and
interference with those immutable
cruel conquerors
and glorifying
natural laws under which man¬
kind must advance through the courage, justice, and magnanimity
been,

As conquerors,

But

of the competent

whatever

his

virtues

or

his

individ¬
vices he lives and must always
strating an' unwise course of con¬ ual, they turn abundance into
live within the limits of his ca¬
duct is to compare it with one of scarcity
and
contentment
into
which time has proven the wis¬ misery.
Given power, and such pacity. It was recognition of these
dom.
Such a comparison of our men, in time of peace, may de¬ truths that actuated the men who
present conduct in Europe is open stroy more than armies do in war, made the great peace of Europe
to those who will trouble them¬ though the evidences of their mis¬ following the overthrow of Napo¬
selves

to

British

examine

and

the

European

work

of

statesmen

following the overthrow of Napo¬
leon.
These men were dealing
with the problem of France and
her subject and satellite
states
under
circumstances
paralleling
those of today, the chief dissimi¬
larity being that France was the

Germany of that period. The

re¬

sult of their work, and the demon¬
stration of their wisdom are to be

efforts

chief may not be immediately
ible to the people.
If

one

light

additional

wishes

upon

a

conduct toward

vis

proven
a

in that of Mr. Lincoln toward the

Confederacy,

and

in

the

simple and humane terms of sur¬
render dictated by General Gran
after his memorable

that

and

moved

light
federacy. It is failure to recognize
course
of
them that lies behind errors now

conquered peo¬
ple, none better is to found than
fallen

Abraham
Lincoln
and
General Grant in
their treatment of'the fallen Con¬
leon

conversation

with General Lee at Appomatox.

being committed in the conquered
lands of Europe. The most forlorn
of human vanities is the belief of
in

that they can

override

power
nature as

the

behavior of mankind; or

persons

mass

in

manifested in

alter man's basic character

free markets

another

in

the

years

of

peace




and Does any American

now

believe

Interna¬

try the old game of stamping; on
pieces of paper a value they do
not

The

have.

come

should

correction

in turning gold loose In the

the values of
gravitate

and letting

market

currencies

i;he: inflated

with

into

by the

cur¬

gold and
prices

will

into balance.

move

favorable balances of

be

paid with

balance
we

The

All

countries.

need to do is to get rid of the

field

bureaucrats

the

in

of, money and .international

trade

and

restore

sound

and

de¬

pendable principles which worked
well before the

modern

itical

the

era

restore confi¬

steps to

administrations

.

not

are

credits they need* Such
are
the Philippine IsHolland, Belgium, Den¬

foreign

countries

un¬

country
favorable

one

the

other

on

OPA-minded

so

taken

have

finding it very difficult to get the

shortages and under multilateral
trade and payments world trade

will

that

Countries
necessary

dence in their currencies and po-

disappear be¬
prices will be the arbiter of

cause

will

gold:

Then dol-

shortages will

ar

they are worth in terms

With only the secret
prices for gold left
we can not know how rapidly in¬
flation is staking place.
of

ands,

and Norway.

mark

r

•

Integrity, organization, adminisration and technical skills> applied
;;o production, together, with freer
multilateral trade between

coun*

and convertible currencies
could quickly change the: trend of
the so-called dollar shortage.
/■
tries,

of

theorists, and
regulators got under way.
Then dollars and gold now hoard¬

Examples of the Dollar

ed. will

Canada claims she is

managed

currency

flow

back

to

the

banks

and trade,
production and
ployment will increase.

em¬

The

present plight of England
economic regimenta¬
spite of her large war
debts, conditions have arisen in
England since the war which en¬
courages/capital to emigrate, or

arises

from

tion,

seek

In

Shortage

Myth

trade

At

Canada:

-;,

■

the

present time
going broke
ouying from the United States*
Canada bought from the United
States more than $600,000,000 in ex*
cess of the purchases of the United
States from Canada.* But in world
;rade

as

Canada

whole

a

had

a

■'avorable balance due her of over

6458,000,000 in spite of the cont¬
of the

inuous: deterioration

cur¬

within the country
rather than productive opportu¬
nity. These conditions are largely
due
to
government "planning,

of

nationalization of industries at the

convertible into" dollars,; her obli¬

of the tax payers and the

gations to the United States would
oe
settled with claims on these

hiding

expense

slowdown

of

productivity. ■ Fur¬
ther regimentation and restriction
of trade promise to make her con¬
dition

worse

instead of better. The

economic

throw

off

store

at

is

solution

to

regimentation and re¬
home

the

freedom

the

in the countries

rencies

Canada's

debtors.

of many

Canada's

If

had currencies that were

debtors

countries, most of which owe the
United
States for imports." In¬
stead of Canada being a victim of

shortage, Canada is

a vic¬
currencies," bilateral
trade, and regulations restraining

a

dollar

"soft

tim of

fought the war to gain. the free movement of goods and
Then permit the law of supply and. services m a world commerce de¬
for multilateral trade.
demand to establish prices and veloped
Nevertheless; Canada's ■unfavora¬
restore the pound to the converti¬
ble balance with the United Stateg
bility of prewar years when it was
really the currency of interna¬ is real to Canada. Unless the rest
people

In

commenting

Standard in

in
I

the

a

on

"The

Golc

Free Gold Market"

"Chronicle"

Nov.

14, 1946

pointed out how England with

free markets and

a

currency upon

which the Whole world could de¬

pend had built up the greatest
trading empire the world had ever
known and had reaped billions of

gains for her people from these
free

world restores convertible

of the

tional trade.

markets

and

their

wealth

producing processes, and express¬
ed the hope that she would again
return to this leadership in free
markets for the benefit of the
whole world.

But while England

and

currencies

must

Canada

her

strict

-freer

sooner

markets,

or

purchases

later

re¬

from

the

United States or the United Stateg
must

from Canada- a .great
than she is now buying.
For Canada to buy less from the
deal

buy

-

more

United States or the United States
to

goods she does not need

buy

from

Canada ds economically un¬

sound for both countries and

un¬

necessarily
wrong

costly.
This is the
solution.- The correct solu¬

tion for the benefit of Canada and

the

United States

the rest
ration

as

well

for

as

ofrthe .world }is the resto/convertible currencies,

of

struggling to find her way
sound .economic
conditions with,
principles and free
multilateral trade on the part of
the United States had;
the countries * that buy from Can¬
both the duty and opportunity to
ada-and the United States..
restore the convertibility of cur¬
France—France, is a rich coun¬
rency into gold
and establish a
The peasants of France are
free gold market for, measuring try.
was

back to sound

,

markets

.

of laws; the infliction of the necessary readjustments to be
prosperity which followed. These that the welfare of the country punishments; or the: erection of made- in monies, money prices
men did not destroy the French
political structures.
That which costs and value relationships al
would have been better
served
in the affairs of f government or in
State nor plunder either its indus
over the world.
had
Mr.
Lincoln
and
General
try or its citizens. They took no Grant yielded to those men from the'conduct of war or in the treat¬
;It is very disheartening to. those
ment of conquered peoples fails
slaves andi French troops as wel
whose
minds
reason
had been
of us who would like to see ex
to take account of human nature
as
French military leaders, in¬ driven
by hate, and who de¬
panding
production, trade anc
and to recognize its possibilities
cluding the Emperor, were treated ■ manded bloody reprisal against
prosperity for the good of all
as prisoners of war and their
per
Southern leaders and influential and limitations never has and people to learn that free markets
sonal
and
in
property rights' re- 1 Southern citizens? Would it not never can succeed.
gold everywhere are to be
seen

the

worth

let

one

sound

possesses

not

are

price (a free
market tells this story every day)
is to refuse to face reality and to

the real under-

find their natural level.

government

by his

than

more

tional Fund's stated

convertibility of curren¬
The law of supply and de¬

into

for

declared

war

cies

of the breakdown of
solution to what is

rencies convertible

follow in war or to de¬
himself whether the

must

termine

those

of

worth

government - fixed
currency
price, a black market arises im*
mediately; because any one who
can get hold
of this product can
profit by making a black market
or
bootlegging it.
To stop the
trade in gold just because curren¬

the

mand

knows

intentions

be

ts

free

cies.

and render
since he recog¬

when
sum¬
moned by his government.
It is
impossible for him to divine the
secret

:

a

black market

enemies

country's

and

a

He

Relieved to

to

to live

the

of

mercy

vicious.

The

called

see

Can

government
stamp out the black market in
gold any easier than in other
products?
When any product is

to what

low and the
that there is
no other course open to him.
For
the same reason he will fight his
the

causes

national Fund.

shortage of dollars in
foreign countries lies in a return

government
laws he and his would be at

and

failure to

a

ying

trade.

without

that

nizes

doing the work of Napoleon, in
is, let
the end they reached moderate
tional

anticipate

:

governments

under,

gallows awaits them if defeated?
Or because industrialists, bankers,

producers,

the nature of man

It is

;o

He will respond

changes.

tamped out by the planners unmanagement of the Inter-

der the

,

.

do know who will bear the burden

,

passage

.

.

,

,

said to have hoarded over

.dollars-in

esting

to

armed

.

billion

gold/ It would be inter¬
know

just

American currency is.
France

a

.

because

forces

and

the

how. much
hoarded in
American

civilians

have

spent plenty of American money
in France and most of this money
has

gone

right into hiding.

Tfye

Volume

166

Number 4618

real

people of France who are
thrifty and understand monetary
values know the
uncertainty of
the

value

of

the. French

franc.

They also know the instability of
the French Government.
They are
fully cognizant of the breakdown
of integrity and
administration in
France.
that

Then

they

understand

simple economic and
principle that bad

tary

drives

out

the

memories
their

of

good.

the

mone¬

money

With

vivid

destruction

of

well-being caused by infla¬
cheap -money after World

tion and

War
in

I

and

at

other times

many

the

history

French

peasant

of
France, the
and shopkeeper

wisely hoards American paper
dollars, gold, silver, and any other
currency that he thinks will keep
its purchasing power. He pays his
debts with French francs that he
knows
are
several
times over¬
valued by

etary

the International Mon¬

Fund.

Shopkeepers

are

anxious to sell their merchandise
for

THE COMMERCIAL & FINANCIAL CHRONICLE
cies

of

the

countries

of

the

The Immediate

hoarders.

Because

Production and trade

disor¬

are

ganized
and
lagging in every
country where uncertain currency
values

prevail.

The first

step in
production
and

reconstructing
trade in any

country is that of

constructing

and

re¬

stabilizing

the

currency of the country.

South America:
Many countries
in Central and South
America
are

finding

it

their
States

because

exceed

in

chases

from
If

restrict

the

United

these

dollar

countries.
can

to

necessary
purchases from

purchases

value

our

pur¬

South

American
South Ameri¬

these

countries

could

collect from
the
Sterling Bloc countries and
from the "soft
currency" countries
of
Europe in credits that we
would
accept
in

it

payment,

would

not be

countries

necessary for these
reduce
their pur¬

to

political
the

others

are

The

clothing,

medicine,

The

gardeners

in

little

find

produce

in

inflated to the

are

and

farmers

France

these currencies

incentive

to

increased

of

excess

their

own

in

than

more

about

ten

400

percent

Bank

years.

family needs because they can
only sell these products for French
currency that has a dubious value.

about

They, cannot

the

de¬

posits payable on demand in
rency
have
increased

francs

at

buy

with

reasonable

French

prices

the

machinery,

and

a

might well claim that there

a

currency shortage in
of the fact that the
currency

greatest
come

out¬
standing in France at the present
time

one

into

runs

lions

and

it

knows,

hundreds

is

of

doubtful

bil¬

need

if

any¬

outside of the Bank

or

of France could

estimate, just how
much currency
is^m circulation.
There are probably
ehough Amer¬
ican dollars, gold, and other
stable

currencies of other

foreign

coun¬

tries hoarded in France to
supply
all the
necessary
currency
re¬
quirements of France if these cur¬
rencies could be adopted as a na¬
tional currency and all the French
francs immediately blotted out of

existence.

There is

real

a

money

shortage in France, but it is not
because of any
scarcity of francs
in circulation. It is because of too
many francs in circulation and too
little
confidence in
the
future
value of these francs.
The
money

shortage in France, or the short¬
age of good money in circulation
in France, illustrates the so-called
dollar

land

shortage in the world. Eng¬
sells

francs
above

the

francs.
the

goods

with

real

But

bills

of

France

for

value

to

far

stated

a

value

England
credit

of

these

cannot

tic

France

on

States

because

of

the

or

uncertain

value of the French franc and the

unwillingness

of American and
Canadian exporters to accept ob¬
ligations on France in the settle¬
ment of debts due them.
Central

The

European

monetary

tions in France

Currencies:

and

trade
not

are

condi¬
bad in

as

other

European countries
such as Greece, Albania, Hungary,
Austria, Yugoslavia, Rumania, and
Italy.t Up to the present the Ger¬
man currency is not
freely con¬
many

vertible; and

for

this

it

reason

is

not wanted outside the borders of

Germany by any country. Inside
Germany * any currency such as
the.

American

dollar,

management
had
not
so stupid. In
fact, the hoard¬
ing of food supplies is well known

Swedish

Good; money

does not cir¬
culate;; only' the bad and uncer¬
trade.

result

As

ebb

a*

and

freely

trade

black

is

at

markets

in
a

and

barter dominate the trade activities.

tries

The currencies of such
as

Holland,

Switzerland

Central

are

Denmark
in

because

these

believed to have

coun¬

and

.

permanent value than the




in

Low

curren¬

a

free

con¬

the

countries

more

curren¬

and

where

poverty

black

most

are

pronounced.

Such, countries
France, and Greece,

China,
Vast

only

.few

a

are

to
examples.
going to

.

food

supplies are
people are unem¬
ployed and, poverty and begging
are on every street corner.
Even
while

waste

the

United

States

has

it

found

to destroy tons of food
supplies for lack of a market at

necessary

Perhaps
of

of

one

this

the

distrust

of the domestic

purchasing power
of monies is
in
Greece, where
soup
kitchens and hunger pre¬
dominates.
Greece is living off
the charity of other
countries, in¬
cluding the United States.
But
still there are producers in Greece
who
have products
to sell and
instead

of

currency

and credit. Just recent¬
products have been ex¬

with

between

these

countries

free flow of gold to settle

a

balances,

at

free

market

rates,
myth
of a
dollar
shortage would disappear. More
over, the restoration of free eco¬
the

present

nomic and

tween

Bloc
for

monetary practices be¬

the

Dollar

would

areas

the rest

tries

with

know

of

from

and

by

services

would

ability

to

is

delivery
to

Coun¬

sell

other

buy

deter¬

of

goods

countries

who

wish to buy.
Also, in order
buy goods from other coun¬
tries, it is necessary to pay in
to

currencies and credits that

are

governmental

adminis

tration and restore
monetary con¬
ditions in which the rest of the
world
can
have confidence.
world

can

economic

,

financial

and

conditions

just as
Switzerland, Sweden, and Can¬
ada
have done.
Of course,
the
economic

conditions
of
these
countries and their financial sta¬

bility
"

menaced

are

stable
and

by

the

un¬

conditions, mismanagement,

inflationary

other

countries

practices
who

of

want

buy their goods but can't

to

for

pay

them.
and

But in spite of the political
financial chaos of neighbor¬

ing countries, each country must
manage its own financial affairs
and

meet

its

attract

tive

obligations to other

or

countries

it

either

capital

The

abroad.

dollar
shortage
inflation,
tariffs,
restrictions, and the loss of
in

political

No two countries

the

dollar

United

States

or

States

from

the

govern¬
can

cor¬

shortage, such
and

might attempt to do by
buying
less
from
the

ing

to

produc¬

from

confidence

the

from

expect

or

so-called

results

trade

cannot

loans

United

Canada

—

as

sale

while

the

United

ity organizations of the American
people are pouring into Greece

consumers'-goods to keep the
ulation

alive.

The

pop¬

Americas

and

the

United

States buy¬

goods

paycheck

the

of
toil

should
heir

place

in

and Trade Difficulties

terms

not
re¬

from

spare

their

consumers'

goods
large
quantities of foods and other con¬

Depreciated

currencies

and

conversion

rates, causing
the hoarding of gold and Ameri¬
can
dollars, trade restrictions, bi¬

lateral

trade

regulations,

quotas,

tariffs and the lack of confidence

in

political

prevented

have

governments

the

of
duction, and trade since the
recovery

ended. Instead of

policies

war

turning to sound

countries

are
adding
Imports are be¬
currency inflation

restrictions.

more

ing

all

pro¬

curtailed,
in

most

countries,

free

being forced
into black market
hiding, and the
development of totalitarianism is
gathering supporters in almost all
countries.
The

remedies

to

are

to

the

"Chronicle"*
trend

that

or

sold

tended
other

home

credits

on

by the United

countries.

ligence
and

them

to

But

ex¬

States and
if

this

neg¬

in

restoring order and
production is to continue
supplies
are
to
into gifts and not to

turned

paid

for

need

while

the

continue

and

to

argue

over

of

restoring

for

production
the
industrial

distribution,
in

in

getting down to

order

workers

be

countries

the sensible problem

economic

be

producing

countries,
paychecks
are

whose

weekly
being taxed to

impeccable governing board
and a totally unbiased manage¬
ment, experienced in operating a
an

free auction market. Traders from

countries/,<•'
with
these
gifts

Along
loans

liver

it

seems

also

come

change to finance their trades and
sell their surplus bills of ex¬
change on countries from which
they had bills due. Wide fluctua¬
tions in exchange rates would dis¬
appear as countries restored their
i;o

or

at

balanced

by
multilateral
pay¬
ments, and the present economic

cies that will

serve

N. Y. Garb Te» Wins

Softball

poli¬

the breakdown of economic

shrink.

If

these

conditions

a

governments will blame the spec¬
ulators when no one is to blame
but the government planners who

paths

to

maintain

free

with
two

We

these

columns.

off

restrictions

throw
we

as

markets

and

can

as

establish free

rapidly

as

stances will permit.

as

circum¬

Prices shoulc

be allowed to seek their
in any currency

own

level

of the world. The

law of supply and demand will be
the leveler of prices.
Currencies

should

gold

be

convertible

into

free market for
thus enabling every trader

find

to

made

through

gold

out

a

easily' and

what currencies

restrictions

less

are

quickly

worth.

should

be

Trade

With

recovery have

more

than The;

In
warring
delayed

cost

war.

the

.Along
to' any

loan;,or 'gift
should
go
a
thorough

every

country

favorable.

Un¬

ties

at

known

hand.

deliberately
and

levy

Any

adopts

unproved

shrink

trade

heavy

with

and

the

we

headed

are

for

,

The outlook in

which

production and

burdens

of

tied

score

at

l

all

and

base.

on

Bertuzzi

took

game

win

who

last

notched

night

com¬

17 games, losing but
during the regular sea¬
'

Wall

Street

A.

A.

presented the
trophy
Exchange

member and manager of the softball team.
The Curb has retired
two trophies in its

reign of soft-

Dall

supremacy, which includes a
three year period of consecutive

championships in the
Wall

There

Street
was

no

now

defunct

Softball

League.
play during the war

years.

Arthur Bonham, member of the
Athletic
Committee, an¬

Curb's

nounced

that

tendered

the

the

a

dinner

victorious
future.

near

would

be

team

in

taxation

Two Join Staats Co.
Special

Europe with the

LOS

George

and

with

on

to

shrinking trade should bring
some sober thinking about how
the

reverse

present trend to¬

ward

limiting imports. The first
step is to abandon managed cur¬

rencies
ible

and

restore free

currencies

into

convert¬
.

and

markets

for

hoarded

all

them.

there
All

strictions

will

currency controls, re¬
and embargoes should

E.

to

Economic Stabilization," Sept.
5, 1946; "A Free Gold Market for
Stability," Oct. 10, 1946, and "The
Gold

Standard

in

a

Free/Gold

Market," Nov. 14,1946..

—

Forrester,

Schwabacher

&

With E. F. Hutton & Co.
Special to The Financial Chronicle
!

LOS

ANGELES, CALIF.—Ger¬
Dalboy is with E. F. Hut-

ald W.
ton &

Company, 623 South Spring

Street.

Two With Merrili Lynch
Special

*"A Free Gold Market Essential

Chronicle

CALIF.

.

Staats Co., 640 South
Spring Street, members of the Los
Angeles Stock Exchange.

cur¬

disappear be¬
be] no profit in

Financial

William R.

money/and

black markets will
cause

The

previously
Co., and
Robert E. Norton,
formerly with
Merill Lynch,
Pierce, Fenner &
Beane, are now associated with

hoarding by establishing free

convertible

rencies

to

ANGELES,

approach of another cruel winter

that

experimental

policies

ice.

unretirable Jules S; Bache
to Harold Godsell, Curb

less

facili¬

country

base

on

Anthony J. Shields of Harris,
Upham & Co., President of the

trade with its inevitable crises.

understanding-based upon well be abandoned. The United States
established principles of
restoring dollars should be convertible into
order and production by the best
gold. Gold should be permitted to
methods

game

son.

removed

work toward this goal in¬

we

home

re¬

in

to

should
fast

the

Curb

fully in the articles

more

a

the

on

pleted an undefeated season, win¬
ning sixteen straight.
In all, the

Again, I repeat briefly, what
said

the

double

one

ferred

put

to

men

the

will

or

close the marts of trade.

mates

Johnny

markets

value conditions that have

two

man, contributed a homer to the
winning cause in the second game

principles. But instead
have created the fictitious

of

have

Di¬

Arthur Denny, Curb second base¬

sound

on

with

run

shrinkage may turn into
collapse before long. Then the

fort, savings, and enterprise.
which

Softball

Curb left fielder slammed

tinue the

gold. Bring
the gold and American dollars out

ideologies

Association

vision

con¬

integ¬
rity and understanding of the
simple principles that induce ef¬
the

Championship

Athletic

did not

pegged
prices
by
government
planners and trade is beginning to

markets

the best inter¬

countries

dollar

shortage would disappear.

.

least

ests of the countries in need. The
breakdown of production and dis¬
tribution is largely the result of

many

so-called

the

of

causes

putting on more restrictde¬ tions and thus
creating more black

principles of good manage¬
ment, in order to restore the nec¬
essary technical understanding of
distribution

gold convertibility.

Trade between countries would be

stead of

the

production and

to

currencies

championship for the sec¬
ond straight year in the play-off
ible monies into
gold and free finals last night at Croke Park,
markets. The way the
freezing of where Josepthal & Co. was sub¬
exchange rates for paper money dued 9 to 3 and 5 to 2
by the mas¬
not convertible into
gold freezes terful hurling of the Trinity Place
the exchange of
goods, and trade ten's
Johnny
Bertuzzi,
league
has to be
restricted, was thor¬ leading hurler.
•
'
oughly described by me in these
With the Curb leading 2 to 1 in
columns Nov. 14 last.
Now we
the first
game, Johnny
Bagely,
have the inflated currencies with

and

to

necessary

leadership,

t:.;•

country in the world would
to this market to buy ex¬

every

obey the laws of sound convert¬

are

own

currencies

and

should be under the guidance of

the

are '

of their

in

free

ex¬

we

pay these charity,
and
international
balances
that
going to become dis¬ are unfavorable
canceled out with
couraged with the administrations
balances that

bills

gold

and

This

and

the

.

these

gold

other.

each

market

the

Walking off with both ends of a
twin bill, the New York Curb Ex¬
change copped the Wall Street

In

trade

change would take if

of

terms
for

find

can

out

people.
pointed

I

world

in

values

York

New

restore

strong democratic political gov¬
ernments, free the exchanges, re¬
store gold convertible
monies, and
let the law of
supply and demand
make
prices efficiently without
costs

in

up

currencies

real

market

sumer

products.
These products
will be given to countries in need

set

of

they

probably

all

World International Exchange

failed

own

be

where

pegged

29

circulate freely. The hoarding of
gold will diminish when curren¬
cies are readily convertible into
gold at free market rates.
A free auction market for gold

Causes and Remedies for Present

producing countries of Europe,
Africa, Australia, and elsewhere

economic

capital resulting from the savings
of labor, regardless of the coun¬
try of origin will seek productive
opportunities in free markets and
•

Greek

States Government and the char¬

people

environment in which the

free competition/

for

States

Canada

political
and
economic
integrity, convertible currencies,
an

uncertain

ported from Greece to the United

Canada

storing
and

the

"isms" instead of

Any country in the
dependable

maintain

ly food

ac¬

ceptable and this should be ade
quate
hint
to
any
country to
establish

weekly

people who
in the producing countries.

can

world.

countries

the

Sterling
example

an

to

their

foreign

mined

the

goods

that

and

set

from

thrives

monies

needed. .The correction lies in

demand

Europe ' and ' the

Countries
cies

are

countries

gold

the

taxes

markets for gold to test theWalue
of the currencies are

they want good American dollars

rect

low

and

over¬

vertibility program and restore
the free international
exchange of

mark:

offered

Sterling Bloc

currency

ments.

is

more.

and the United States Dollar
Bloc
countries would get
together on

kroner,;or:British pound is quick¬
ly hoarded; because of the uncer¬
tainty of; the future value of the

tain money

as

United

the

from

been

quite

little

have

political

illustrations

use

French currency to pay her obli¬
gations to Canada or to the United

could

in

large part of the shortage
goods with domes¬
production if economic and

price.

If

countries

a

best

In England
circulation has
much

con¬

of consumers'

any

the

a

the

in

States, but bank
deposits have probably increased

spite

of

many

percent.

as

and

goods they do not pro¬
Almost two years have now
elapsed since the end of the war
duce.

increased

in

one

cur¬

probably

350

and

sumers'

currency

not

tools and machinery they need.
In the French internal
economy
is

of

danger point. Currency outstand¬
ing in the United States has been

franc.

shelter,

which
will
enable
these
countries to purchase from abroad
the
tools,

permanent

the

de¬

kets

mention

than

many-

baie necessities of life until
local production can
supply these
needs and produce for The mar¬

and

value

systems

and

frightfully

upon its own people is not de¬
serving of support With a part
of the production or the deduction

the

part with their foreign monies
which they believe to have a more

Both

being

graded by poverty and starvation.
immediate-need is for food,

markets

pound.

economic

countries

of

The

Sterling Block Countries:
key currencies in the world
today are the United States dollar
The

British

breakdown

in

chases from the United States.

the

Needs of Relief

the

and

defeated

foreign money, and particu¬
larly dollars, but they are very
unwilling to give you change in

or

of

(545)

LOS

to

The

Financial

Chronicle

ANGELES, CALIF.

—

Jo¬

seph F. Brady and Robert C. Ken¬
nedy have become affiliated with
Merrill

Lynch; Pierce, Fenner &

Beane, 523 West Sixth Street.

Thursday, August

(THE COMMERCIAL & FINANCIAL CHRONICLE

(546)

30

pendence

Implications of the Marshall Plan
the

(Continued from page 2)

distressed

nations'

exchange

relations,

power

anxieties,

war

of

western

Europe

they

on

the export potential of food,

7,1947

represent ultimate monetary
which could not be liqui¬

reserves

coal,
metals, linseed oil, etc., from the
Russian sphere. Cutting off those

dated to

major extent

any

with¬

panics. Un¬
less German industry and trans¬
portation become fully operative

out risking currency

exports is tantamount to raising
are dwindling; and economic consequences.
building capital, most
It is to the credit of the Marshall our burden substantially.
inflation, etc);
countries indulge
in consuming Plan that it has greatly weakened I
Another difficulty may confront withma year or so,
(9) Lastly, there is nothing in¬
what is left to them; entire politi¬ Soviet influence in western Eu- the plan for Germany's revival unlikely,
Britain, t a
,
•»
dicated to set a limit to the Plan's
cal systems are deteriorating, and
rope,
especially also in France, right at home.
Public opinion might
irj
»
operation. In other words, it is the
area of distress is widening.
Ever since the liberation, France here (and in Britain) is still un- too,
to avoid a
.
another financial experiment to
International
economic relations has been
playing a double-faced der the spell of war-propaganda ^ort, there is no way or
bridge over an emergency, which
and internal price structures are
game. At the original conference and fearful of a new aggression. rhe conclusion
we a
may or may not be terminated
perverted and made inoperative on the Plan, Bidault presented an- The underlying theory is that in- in principle the
or
thereby.
by a maze of "Schachtian" ex¬ other sample of this kind of di- [ dustrial reconstruction per se is porting Europe s
change restrictions, quantitative plomacy by offering a formula to the source of imperialistic danger, icit, we
The Great Fiasco
acquiesce
import regulations, price manipu¬ justify morally the Russian posi- The instance
of the post-Ver- v e r y
new
An
obvious, but never men¬
lations, bulk buying and bilateral cion and to accept the American sailles revival and subsequent re- charge, probably $3-5 billions, 11
tioned, implication of the Mar¬
practices.
Multiple
currencies materially. It did not work; the militarization of the Reich is the n°t more, and for years to come.
shall Plan is that so far our post¬
flourish right under the nose of French had to
choose between great bugaboo. In reality, had the Important private sources set tne
war
planning
in
international
the International Fund, the very Russian friendship and American Allies stuck to the disarmament "need" much higher,
reconstruction is a failure.
That
purpose of which is to eliminate
finance. Short of a Congressional clauses of the Versailles Treaty,
follows logically from the neces¬
them.
refusal to swallow the Plan— had they not tolerated and even
The Crucial Question
sity not only to re-start and ex¬
legalized Hitler's war preparaThat brings up the crucial quesA $25 billion tonic (not counting which is most .unlikely in view of
pand it, but also to do so on a
the political implications—we can tions, he would have been stymied tion. Will the new Plan,- with its
new plane.
That a failure was in¬ an annual $1 billion or so in pri¬
count on
France being in our from the outset. In other words, well-taken emphasis on German
and investments,
evitable has been foretold, among vate charities
nor the $2.5 billions or so thrown
camp
(as long as fresh dollars there is no danger whatsoever in reconstruction (if and when that
others, by the present writer. It is
Germany's industrial revival pro- gets under way), and disregarding
in by Canada, Sweden, and Switz¬ are forthcoming). The new alignimportant to realize in what that
erland)
that leaves the outer ment has been foreshadowed and vided we do not permit its use for the Russian monkey-wrench,
their

correct

policies

and

(socialism,

gold reserves

instead

of

wh

need billions
coiiap

I

PS

that it
p
burden
pmternationa a
to
substantial
annua

failure consists.

financial

World-wide

early

1942. UNRRA was sup¬
to bridge over the acute
shortages of the first two years
as

was

countries

The

way.

UNBRA's means, mainly our $2.7
billion stake in it, had been ex¬
as

been

rent

understand it has not

we

relieved.

Witness

the

pending budgetary

or

The

relief

in

planning

Enter

ex¬

cur¬

Departure

light of this almost
of
"boondoggling"

failure

total

that the Marshall Plan has

appro¬

countries, $71 millions for refu¬
gees, $550 millions to support the
population of occupied countries,

to be

evi¬
dently is the assumption that the
1943-46
international
planning
was

a

groping in the dark, that

world-wide rehabilitation is

also

limit

we

of

Secretary

State

what

declared

a

far

possible to raise, within a year or
and manpower losses and national two, the Ruhr coal output by 50
disintegration. But it may take million tons, the 10% diference
some time to enlighten our public between
Europes pre-war and
opinion.
present production.
But that

potential in view of her territorial

recognized
by
recent
AngloAmerican agreements, first, to restore inter-zonal economic unity,
.

and then to double German steel

output (up to one-half of the pre-

four

war,

or

than

had been
new planning

problem

greater

cooperation

that

July 16 to be the Number One
necessity: the reconstruction of |
Germany, which used to provide
26% of Europe's steel and 40% of I
her coal. That objective has been

Its starting point

understood.

half-a-dozen

the

tion, leaving aside the fact of on self-supporting "commercial"
Germany's greatly reduced war terms? Technically, it should be

Germany

French

But

presupposes

war-like purposes. And nothing bring the European balances of
is simpler than to accomplish that, payment into the kind of equilwith or without military occupa- ibrlum in which they can operate

on

New

It is in the

priations of $350 millions for postUNRRA

expensive

an

French

in

unions.

trade

and

communist
politics

by .partial

fqllowed

retrenchment

receiving end.

hausted, the world's need for "re¬
lief"

reserves

periment, indeed, even after al¬
lowing for the physical damage
that had to be repaired on the

production in the
got
under
result is that after

until

so,

devastated

financial

evaporating at the yearly rate of
$4.7 billions (!), and with dimin¬
ished
prospect for equilibrium,

posed
or

with its

world

planning

for the postwar era broke loose as

five times the actual

•

/

^

would not, and could not end the
fuel crisis. It would defeat the

Cost Aspect

The
a

•

,1

ujf

n

ii.

.

the tot

ftem

Marshall Plan aeenda

and

manTi^accepted

coal £amine Partially only; EP"
rope's coal demand' SreatIy ln~
„ obstacles are overcome*'how flated by wasteful mal-allocations
much toS to be wovMedTnnualT and by the hu®e needs °f recond f
h
b
vears' Semi? struction for a rapidly growing
ffi J , fj„
not not on
both population far exceeds today the
°H*la\ ,hP Atianhr indicate the volume that was sufficient in the

tjL

as

S

'TnnUhe,oTm?Jf thi

of the fnr paph nf
$4 tn
by Russia in her zone.
In the c^thillinn<3 llfarshaH Plan four to
«*<=
foreseen, and that a
Bretton Woods pro¬ has to be devised as well as fresh American zone, the new
However
the forthdirective
gram was supposed to follow up amounts provided. The Roosevelt trial Level
supersedes
annual deficit in Europe's
UNRRA and solve the long-run approach turned out to be basi¬
the disastrous directive J. C. S. I
balance of navment is
financial problems of the world
cally fallacious because the "loans"
infmrinn
estimated tentatively by the House
other than relief.
So far, those were
"fa™°"s
o£ the
given
without
relevant
MoH sub-committee on foreign affairs
institutions have not even started
plan.
These are only
strings attached. As the Adminis¬ genthau
t
bout $1Q bmio
not countmg
to operate in an appreciable fash¬ tration
emphasizes now: Europe paper moves so far, but they are th
F
V,st or anV other dision.
Their means are altogether must
help herself to be helped by decisive signs of realizing, at last, tressed area outside Europe. But
inadequate, to handle the problem; us, meaning (so far) a self-help
a substantial portion might be
their 6-odd billions of dollar re¬ consisting; in some sort of priority
♦
EJ *covered by Europe drawing on the
sources might be exhausted very
system for thee allocation of fresh
witnout ner fer- bulk of the unutilized dollar comfast. The best they can do is to dollars. Limited as it is, this is continent, tnat steel,
tihzers,
coal
chemicals, mitments and crecht potential todo, very little.
(They are run by a new idea injected into our "in¬ machmery, etc., Europe cannot
—Qn Jul
^—approximately
a firmly established
bureaucracy, ternational finance," except for become a going concern; and that I
^12i^ billions The European disthe vested interest of which is the terms of the Greco-Turkish therefore
the
reconstruction
of
tressed
countries
also
are
the
to perpetuate itself.)
"Now we loan of $400 millions which go the Ruhr must have precedence
chief recipients of private dollar
know that Bretton Woods was not even further in controlling the over virtually any new European
transfers.
Furthermore,
they
bold enough," writes the "Man¬ debtor.
fi"?
than pure relief. I Qwn much of the "visible" $15

etc.

Indus-\%
comiL
cZbined

the

Next,

sold

was

as

That

is only

Bretton Woods

quasi-commercial

a

approach to the world's financial

troubles, not as a charity affair.
However, charity ("lend-lease")
is what the world
demands, not
even
such
pseudo-banking ar¬
rangements as the "sale" of surplus property, the British cash
loan of

$3.75 billions, the Export-

Import

Bank's

widened
which

to

credit

$3.5

volume

Exit Russia

limits the

Soviets

nomic
West

and; subsidies reached about $12
But

currencies

are

fur¬

ther away

the

on

spot

by

offering

break

had

to

between
come

out

East

out of balance than

more

two years ago.

accomplished
tressed

Nothing has been
keep the dis¬

to

economic

systems operat¬

ing without continued

shots-m-the-arm;
eliminate

very

American

little

to

internal

into

open, for more than one reason.
The least an
international plan

is some sort of check¬
the debtors, thus driving a

presupposes
up

on

at

creating

least

for

a
a

while.

living standards of the
far

below

the

climate,
This time,

peaceful

prewar

dangerously low in

masses are

level, and
places;

many




*

,,

iron-tight
security, and

of new funds to France,

guarantees
cession
cession

not

be

of

her

for

"hold-out"

a

But these figures

story.
—*•

am she CanBut sne can-

tneaaar.
the Saar.

or
of

.

of

pects
It
it

will
will

the

about

t

pacify the short-sighted French

our
I But

'a

qiirnll]«,\

v

export
what

nripp_

k

'

The bolshevization of

„

Qf

tne meeting.,

in

interested

trend

$12 billions with its domestic tax

trena

rising

European

that

,

will

every

use

wrench, especially

Ben

Cohen

and

monkey-

its grip over

Vincent

fe«epi

mventeries

and^wtet haya yoro

ronse-

the minor evil cornalleged

danger of

wl£;n tne atiegea danger

Europe gomg bolshevik, orsome'

?c

o

n1tArr.1>tive

ThPV

th t exchange restrictions

and

sfmilar tradeS
.

f th

emergency

one basu^ cause ot the emergency.
.
cannot be eliminated in
,
countries on socialistic pattern^^and

stnctions ca"n®[QK,f

under
o

inflation. Socialism -and
^ ca ital out of

—,»1 fnr I stnctions are

Carter1

indicate a change in "ideology.") Little can be done with-1
out Russian cooperation to issue
a German money that has circu-

inflationarv

d

H

burden and mtiationary conse^

quences as

mine

remain

iney regard an

American export surplus of some

^

more'

: we.could^set the terms

getting

prices Keep rising. ^
makes the Congres- Pared

estimate

"emer-

.

t

m o u n

"needs'' Pretty mUcb WOrtbleSS iS
nation-1 the fact that it contains onlyja
item annually f<f I
Central Europe would have suf¬ ization than in coal output. Also, $400 million
fered a severe set-back, and the the entire military administration Germany (as against $210 milof the zones is in need of thor- lions
for Austria alone). That
extracting of several billion dol¬
lars annually from that area pre¬ ough revamping. There will still would be a drop in the bucket to
me
xuxiucui.c
ux
xvuoaxa
ov:cion+
sumably stopped, with a parallel remain the influence of Russia rehabilitatethe bombed-out cities,
agandists."

^

^

pvnnrf

gional

apd growing disequilibrium. But

from our lending statesmen apparently
Viilion have not yet grasped the point,

place,

°f deterioration continues, and if

ad
resistance and to iron out the ad-

to

do not tell the

first
—

two

bickerines
DicKerings

extensive
extensive

the
—

I'X/r if the l/s
vea^s
lurtner it tne last two year s

Pros-

reconstruction,

German

take
taxe

early

■

estimated ^>iu nimoii
annual deficit on _international
account, the $6100 million store of
the satellites should be deducted
On the other hand, the deficit

However there i<; no reason for
xiowever, tnere is no reason tor

itimism

In
-

very] Europe s

view of the overwhelming European consensus and her
own desperate
position.
long in

the

tensions, colo¬ strengthening of "capitalism" and
and
civil
revolts, or* the U. S. prestige all around.
The
threat of full-scale conflagrations.
very idea of promoting European
From a long-run point of view,
stability must be repugnant to
the $12
billions spent plus the the Soviets; troubled; waters are
still available, some $12.5 billions the ones in which
they can fish.
appear as so much waste—using
Whether we planned it that way
that word in a more literal sense
or merely stumbled into it unwit¬
than applied to the large-scale
tingly, one thing the Marshall
capital export of the 1920's. Then, Plan has
accomplished already is
the dollar outpour was instruto have reduced the geographic
menital in spectacularly raising
radius of our forthcoming com¬
living standards, greatly expand¬
mitments, and to have put the
ing productive capacities, permit¬
ting the accumulation of large blame for it on Russia. Of course;
exchange reserves and inventories, that means also that we have fi¬

nial

and

nations as well.

ing

^

*

and

from being genuinely wedge into the Iron Curtain for
stabilized, budgets and balances of anti-Russian observers and "prop¬
payment

Their leadveconomists, make no bones
about it: that the combination of
super-bureaucratic rule, soak-therich taxation, discouragement of
enterprise and work, monetary in-

era

consideration.

refinanced and reorganized under

area

it only for the purpose of
sabotaging the scheme. The eco¬

year our dis¬
postwar credits, donations

billions.v

whole answer.. The answer is in
the internal policies of the west-

'

approach

into

By1 July 1 of this
bursed

new

them, or their satellites, help in
exchange for "cooperation" in an
all-European scheme. Moscow had
to refuse the offer or could enter

etc.,
supple¬

to

supposed
ment Bretton Woods.

Does that mean that Europe is

hopelessly sick?; No, it means
simply that Germany is not the

S I bimon gold and of the sum $10 flation, pampering of idleness,rencan jGeFm5ny be|I billion balances and similar "hard I forcing unnatural exchange rates,
Can Germany be billion balances and similar "hard forcing unnatural exchange rates,
to be financed by
reserves
of the vyorld | and substituting arbitrary confuworld
the
prevailing
circumstances? |
cutting out the Soviet sphere, a
(ovJ^ the
s<) and couid li- Lion in the place of the rational,
French resistance will have to be
logical sequel: to attaching strings.
quidate some of these remaining free price-making process — all
overcome presumably at the price
It was a bright idea to put the
holdings
add up to declining productivity
Moreover, -the

billions,

were

gfowing. The same holds for all
other resources in short supply. ;

mtfgral,part
^ml

^

part of the story.

available to other countries. Ger-

Iman reconstruction itself would
abs°rb £he„.coal it de™a"d ,kee^
roost of
In the mean-

e''mlfnaJrng the

chester. Guardian."

before a major part of the
German outPut could be made

years

the only, way to s

may

"tn^
^fnr Tmnorts" I strangulating economic efficiency,
mobilized to pay lor imports.
"emereencv"
never
Italy's exchange reserves are Thus
the emergency never
nav

revoking scarcely worth mentioning; Germany, Japan, Austria, and Korea
had been stripped of all. It will
take many billions of our dollars
way, the
Soviets will use their before these nations will be able
German
and
Austrian zones— to produce
an export surplus
and their plates to print German without
being subsidized from
marks—as
hostages
through this side.
nally given up Central Europe—
which to blackmail us into conEven in western Europe, where
if there is anything final in his¬
cessions at Germany's expense, if gold and dollar holdings still are
tory—cost what that may in terms not at our own. And they can do substantial, they mean very little
of international ethics, long-run so effectively, because of the de-1 for solving
the crisis. Largely,
lating

power

without

Potsdam agreement,
and without burying reparations
at least for some time.
In every

the ludicrous

ceases.

...
' .
.
Europe as a whole has emhraoed
equalitarianism, and expects.-the
Americas to deliver the &<>ods--at no cost to herself. That is the

psychologico-poUU^ root of her
financial anemia. No diet of doltlars" can cure ^ +9n tb® CGtI!.1aS
we are perpetuating the .trouble
by giving financial support to the
policies which brmg it about, ul*
timately leading, into economic

Volume 166
chaos,

not

Number 4618

into

revival.

As

THE COMMERCIAL & FINANCIAL CHRONICLE

an

shortage,

the

Evil

two

English

in

Jewkes of

Demons

rent at all European

economist, Professor J.
Manchester, summed it
lately:
"The real sources of
(Britain's) troubles are infla¬

up
or

tion,

excessive

physical

controls

the distribution of industrial

over

the

economic

mythology cur¬
headquarters,

they are not even mentioned, ex¬
indirectly, by pointing out

cept

inflation

that

bottlenecks

resources,
and the disruption of
the normal working of the price

led

which

throttle

pro¬

duction.

system.

the material

causes

These

three

conditions

acting and reacting

are

other

in

a

which

way

doubtedly bring

upon

each

will

un¬

more serious dis¬

location

unless
they can be
promptly and firmly dealt with."
As to
dollar-scarcity and labor-

The

State

Department

be

may

by great generals;and astute

diplomats.

But

their

economics

stems

apparently from Washing¬
ton, D. C., or London, or Paris—
certainly not from Manchester
(where the free-trade
originated).

term loans.

dertake

the

operations

of

going
primarily to
the fact that the sources of longterm
loans
or
capital are not
available today.
We are in the
a

This is due

anomalous situation of

having

an

unprecedented amount of funds
seeking investment on the one
hand and
able

to

the

on

dearth of funds avail¬

a

the

small-sized

other.

is to provide
anism to
This
over

The

some

problem here

effective mech¬

bridge this gap.

situation

a

business

developing

was

period of

stantial

The

question

peatedly suggested is
long-term

loans

is

a

system of

be

to

extended

by commercial banks and guaran¬
teed in full, or at least to
90%,
by the government. A bill was in¬
in

the

last

session

Congress to establish such
This

obviously is

a

markets.

Investors generally have
been placing much more
emphasis

plan to

a

shift the risk in whole

or in large
part to the government. In order
to operate such a system it would
be necessary to create a
large re¬

the

on

marketability of their in¬

vestment

securities

than

the

on

possibility of higher interest rates,

the

losses

lishment

inherent
of

new

in

the

estab¬

enterprises and

small business upon the shoulders
of the taxpayers.

This

presents

interesting

an

anomaly in the government's

with the result that well-seasoned
listed securities of
large corpora¬

lations

tions

great demand, while
the issues of small
companies not

one

listed

changes',

hazards of private enterprise—the
Securities and Exchange Commis¬

sirable

sion.

in

are

the

on

principal stock

ex¬

are not considered de
investments.
In
other
the risk-taking function

words,

has become less attractive to
those

having surplus funds to invest.
They would much rather hold
bonds

government

or

triple-A

corporation bonds than to take
chance,

on

relatively

a

unknown

to

the

hand

protect

an

the

individual.

re¬

On the

agency is created to

individual

from

the

This operation is carried

on

so

venturesome

lose in

or

business.

new

On

or

the

hand,

recognizing the im¬
portance of risk capital to the new
and growing
enterprise, the gov¬

taxpayers.

further by the very effective con¬
trols instituted by ■ the Securities

were

purpose

of

protecting the unwary investor
losing his savings in getrich-quick schemes, these govern¬
ment

agencies

dried

up

funds for

have

the

source

new or

of modest size.

that

needs

practically
of capital

untried ventures

The small

capital,

concern

ranging

in

amount from $20,000 up to a half
a

million,

market

stocks

is

for
or

unable

to

find

a

its

securities—either
bonds—even if it has

fulfilled all

the

requirements for
with the
Securities

registration
and

Exchange Commission. Fur¬
thermore, the procedure for regis¬

tration of securities is such

ly

process

that

it

a

cost¬

is

beyond the
means of
ordinary small corpora¬
tions to qualify.
*

Under these circumstances it is
not at all
strange that several

proposals have been made for di¬
rect aid from the government in
the form of long-term guaranteed
loans. Both the Federal Reserve

Banks and the Reconstruction Fi¬

Corporation

nance

are

now

auth¬

orized to make long-term loans to
small business concerns that are
unable to secure accommodations
from

their

tions.

local

These

banking institu¬

institutions,' however,

have failed to fill the
gap because
the need, is for genuine risk

capi¬

tal

■,

rather

than

long-term

bank

loans.
It

is

clear

that

some

institu¬

tional arrangements are
necessary
to fill the gap created
by the ab¬
sence

If

of the

this

speculative investor.

function

is

to

be

effec¬

tively performed, it must be ex¬
pected that there will be sub-




of 40% of its net

income, and then
that portion of the remaining in¬

sesses

If

a

the risk and

assumes

as¬

the costs involved to all the

system of guaranteed loans
established with

nancial

institutions

private fi¬

choosing

which loans to carry independent¬
ly and which ones to be insured
it is not difficult to anticipate the
results.

All

sonably
carried
and

the

the

sound

ventures

the

by

all

of

safe

private

doubtful

or

rea¬

would

be

agencies

ones

by the

government.
Government
not

are

the

guaranteed

-

to

answer

loans

the

risk-

capital problems of small business
Some
flow

method
of

to

private

stimulate

funds

into

the
risk

ventures must be developed. This
does not imply that the Securities
and

be

Exchange Commission shoulc
abolished.

rendered

an

That

agency has
effective service in

protecting the small investor. At
the same time, it is desirable to
open the way for the more specu¬
latively inclined to place their
surplus funds in more venture
some

affairs.

problem

for

This

is

of

more

private

;

enterprise

than it is for government.
Both the American Bankers As¬
sociation
and
the
Investment
Bankers

Association

nounced

plans for

have

an

credit-pooling

schemes through private agencies
outside
their
regular
channels.
been
the

So

very

banking
far, these have not

effective

volume

of

providing
long-term loans

necessary to meet
small business.

The

type

in

the

needs

of

income.
ation

most

likely to fill this gap is an inde
pendent, privately financed, risk
assuming agency at the local level
The purpose of such an
tion is to furnish

organiza

capital to

isine

new

ventures

prom

through

the

purchase of capital stock—either
referred

ing

the

or

common—thus avoid

debt

character

of

long

distributed to

has

individual

as

unfortunate

an

effect

in

general and is
particularly
oppressive
to
the
small corporate enterprise where
ownership is limited to a few in¬
dividuals.
In

the small

case

tempts

to

avoid

assessment
not

on

enterprise at¬

this

the

double

tax

income by

same

incorporating, it immediately
into

runs

personal

another

difficulty.

income

tax

is

The

assessed

against the incomes of individual
proprietors and partnerships as
they accrue regardless of whether
they are distributed or retained
in the business.

Furthermore, they

taxed at progressive rates, the
result being that the profits re¬
are

tained

in

the

business

taxed

are

at the

highest individual rate ap¬
plicable to the proprietor or part¬
ner.
Suppose, for example, that
Mr. X, a proprietor of
a
small
manufacturing plant, should have
business

a

ing

profit, after withdraw¬

reasonable

a

for sal¬

amount

ary, of $100,000.
He is in need
of additional capital for expansion
and

decides to leave the entire
individual

he

rates

the business. Underithe

m

assessment

income

tax

well might have
60% bracket. His

very

reached the 50

or

the

on

amount

which

he planned to leave ki the busi¬
would be taxed at still

ness

higher
rates, so that he would only be
able to reinvest a small
part of
the $100,000.
Obviously, it is prac¬
tically
impossible, under these
conditions, for a business to ex¬
pand through the process of
plow¬
ing back eatings.
A second

complaint of business,
particularly small business, is
the rigid adherence to the
single
and

year

the

as

basis

income. There

for

are

computing

frequently wide

fluctuations in the earnings. Tax
payments are naturally high in
when

years

low

in

low.

income

years

is high and
earnings are

when

The actual losses incurred in

particularly, bad

cannot

years

be

carried

over for a
sufficiently long
period to compensate for the ex¬
ceptionally high taxes paid in the
good years. This creates a very

real

hardship

income tax

of revenue.

on

business

any

an

amendment

procedures for computing
that the

so

be made

can

on an

The

assess¬

average

capital gains and loss fea¬
the present income tax

also

work

to

the

disadvan¬

tage of small business. In the
of

the

individual

incurred
be

can

case

on

returns, losses
capital investment

deducted

only to the
tent of capital gains on other

ex¬

sets.

limit

from which the small

con¬

source
cern

can

secure

risk

days

before

the

became

vestor's
means
on

to

a

a

capital.
income

In
tax

major factor in the in¬

calculations,

was

prone

number

of

a

man

of

to take chances

tors

hope that probably

one

would work" out well.

present law he cannot report the
losses
on
the
failures
the current earnings on
the successful ones.

Hence,

he

the

organization;
on

re¬

of busi¬

case

single proprie¬
partnerships, and
(3)

or

or

the

instruction

operator of

number

of

can

be used

the

of

owner

small business.

a

regional

A

offices have

been opened in different parts of
the
country, manned by coun¬

selors

equipped

with the varied
problems involv¬

ing

give

these

It

general

is

not

counselors

the

to

professional services usu¬
ally performed by accountants or
other

specialists, but rather to
to the types and sources

advise
of

as

information

essential
to
the
successful operation of a business.

The Office of Small Business is

developing its extension program
gradually, recognizing the fact
that much of the information

quired

for

re¬

effective

counseling
obtained through re¬

must first be

The small business enter¬

prise is not in

distinctly competitive disadvan¬
tage. The administrative staffs of
large corporations are supported
by a great many technical special¬
ists, for management today is a
complex affair. In order to cope

to

counsel.

of

purpose

search.
It is in the field of
management
that the small business is at
a

a

position to main¬
department or

tain

a

research

even

to

undertake minor studies.

The

study of

management

prob¬

lems in small business is
properly
the function of a
public-support¬
ed agency. It would be
impossible,
if desirable, to maintain an

even

adequate

staff

undertake

in

all

Washington

of

the

to

research

knowledge of. production, work necessary in this field. As
marketing, accounting, and per¬ an alternative, the Office of Sma 1
sonnel relations, the
large company Business is now experimenting on
a

finds it necessary to maintain siz¬
able departments in each of these
fields. The small

business,

ating in the
subject to the

same

oper¬

markets

have

the

attack

gan.

to

problems in¬

telligently.

He needs outside ad¬
vice and counsel, not
just periodi¬

when

some

particularly
him, but con¬

acute problem faces

tinuously,
the

so as

pitfalls

schools of business administration
—at

necessary

to avoid

before

he

reaches

them.

Indiana,
This

search

grant

major
Although "lack

of failure.

causes

projects with the landcolleges. It is planned to

administration

experimental
completed.
It

will

whole

usually

leads

to

factor—lack of

personnel

some

ability, experience,

knowledge—as the basic

or

In

sheer

of

case

cause.

after

take

present

have

time

some

of

program

Office

the

projects

been

for

the

extension

and

research

of

the

Small

of

Business

to

be¬

fully effective.
When
it
does, however, the management
phases of the small business prob¬
come

lem will be

of

capital" is the reason most fre¬
quently
listed by
credit-rating
bureaus, more careful analysis

and Michi¬
also follows the

extend these cooperative
arrange ¬
ments to other schools of business

counseling,
The mortality rate
among small
businesses has always been
high.
Numerous studies have, been made
to find out, if possible, the

Texas,

program

pattern of the Department of Ag¬
riculture in its
cooperative re¬

of

some

in cooperation withrfhe
divisions of three of the

program

and

knowledge

these varied

cally

a

research

governmental

same

controls, is beset with the same
types of* problems. Obviously, no
Single
individual
can
possibly

In

largely met.

reviewing

some

of the prob¬

lems of small business
to

conclude

that

one

is

ap ;

its

position is
hopeless. Yet, in spite of all the
problems and in spite of the very
definite trends toward concentra

-

incompetence, tion, the small units still persist.

there is

nothing that can be done There are
today somewhat over
to aid a sinking business.
Those three million
business units.
O?
persons entering business totally
these, over 2.7 million, or 90%,
lacking in ability will fall by the are
units that employ less than
wayside just the same as those four workers. There
are less than
lacking the necessary attributes 5,000 firms that
employ 500 or
often try their hands and fail at
more
employees, and many oi
law, medicine, or other walks of ;hese are
engaged in types of bus¬

life.

Such failures

costs that

free

incidental

are

always present in

are

a

society.

In

where

cases

failures

result

from lack* of sufficient
knowledge or experience, how¬
ever, there is something that can
be

done.

Small

business

is

on

sound ground in seeking govern¬
ment assistance in this area. Ex¬
tension services of an informa¬

tional

sort
of

should

covering

to

the

management

be

rendered

whole

can

by

and

govern¬

the small business

com¬

munity. This is one method of
aiding business generally without
subsidizing inefficiency.
this

is

ample precedence for

type

years

ture

of service.
For many
the Department of Agricul¬

has

maintained

an

instruction

of

program

effective

in

management. This extension
has

ice

been

improving

a

potent

farm
serv¬

factor

in

the

purely manage¬
ment function in agriculture.
A start has

direction

been

entitled

Operating

of

it has already prepared

published

these

While this office

,in operation for less than

two years,

-

in this

the Department of
through the Office oi

Small Business.

has been

made

by

Commerce

a

covers

a

series of pamph¬

"Establishing
Business."
the

and

Each

of

major problems

production, financing, market-

ing,

and

iness that could not be conducte 5
on

small scale.

a

Thus it is clear

that

merely

lets

capital
against

of

IV.

out of ten
Under the

under

earned

form

changes in the capital gains and
loss provision of the
law, would
have a salutary effect on the fi¬
nancing of new £nd small business
enterprise.

and

in

tax

conducted by

ness

the

ventures

double

tained income in the

the

This.% tends

as¬

the

adjustment of the tax

There

of

laws

of

incomes

(2)

covering several years' income.
tures

for

render

ment

ments

assess¬

usable handbooks that

advice and

for this situation is

taxable income

principal source
undoubtedly the

most equitable method of

field

the

are

31

type of business,
They
prepared and constitute

well

ing the cost of government. It is
clear, however, that the adjust¬
ments
suggested,
namely,
(1)

which is subject to wide variation
in income.
The obvious remedy
in

It is

structure

criticism of the

a

specific
are

the present

on

tax

the

as

the

This form of double tax¬

business

upon

the

of; institution

is

stockholders is taxed

amount

This change in custom on the
part of investors was stimulated

from

affected

graduated

projects.-

Exchange Commission and
the various state
regulatory agen¬
cies. Organized for the

Business income is

effectively that it becomes
practically impossible for the in¬

other

to

individ¬

which

income

not meant to be

corporate

deterrent

corporations and

dividual to win

ernment

and

on

These comments
federal

on

serious

the imposition of these taxes
in several ways. A tax is assessed
against a corporation at the rate

of

sys¬

preceding
the war and was
brought about volving fund, perhaps a billion
in part by changes in custom and .dollars, to be replenished from
time to time from taxes. At
ih part by newly
best,
developed gov¬
this would be a means of
ernment controls in the
assessing
capital
years

most

much safer ventures.

elimination
m.

The

come

losses,

troduced

m

yy

how those losses will be assessed.
One proposal that has been re¬

tem.

prefers to invest his surplus funds

un¬

this

ment subsidies.

uals.

(Continued from page 7)

concern.

of

;he financing of small business is
he impact of the federal income

Small Business
pand

As¬

the first to

was

program

for risk capital in small business
and obviate the need for govern¬

movement

The Problem of
]

a

sort,
and the plan has been
adopted
in several other localities.
Agen¬
cies of this type, if they are well
managed and are given sufficient
financial support from local in¬
vestors, might well fill the need

tax

.

The New England

sociates, Inc.,

(547)

account

keeping

for

the
very
small
enterprise
does continue to represent a ver

substantial

segment of

the

econ¬

omy.

It is true that the small business
units
are
facing more difficult

problems than

before.

ever

Mor¬

tality rates are high, and although
they are offset by the birth of new
units, the costs of failure are a.
drain

The

on

the economy as a whole.

primary

these

purpose

problems

is

Corrective
should

be

in attacking

to

attempt
society.

reduce the costs to

to

measures, however,
such a character a ;

of

to retain the free and independent
status of the individual business¬
man.

Substituting the government

the

as

place
would

of

source

of

risk

the

private
jeopardize that

The small business

lifeblood
economy.

economy
ized

of

a

capital in
investor
freedom.

is in fact the

free

competitive

If that segment of the
were

to become social¬

through paternalistic

govern¬

mental

policies, it would be the

end

free

of

These
the

enterprise.

suggestions

problems

of

for meeting

small

with respect to risk

business

capital, taxa¬

tion, and management aim to af¬
ford

the

necessary

destroying the

relief without

essential features

aof the private enterprise economy.

32

(548)

THE COMMERCIAL & FINANCIAL CHRONICLE

"Whither America"
(Continued from page 6)
levels, and in some instances
wiped out altogether.

I

war

think, that it is most

for

the

world

that

fortunate

there

yet

had

mains
one
country—the United
of America—which has its
foundation in the free
enterprise

| On the otner hand, we have a
situation where we are now col¬

The

States

lecting 75% of all

system, and has the money to give

from

revenues

income taxes, corporate and indi¬
vidual.

If

uniformly level degree of

a

perity for

the

if

the

method

falling

Congress

for

in

pe¬

Committee and urge reduction
repeal of the excises

mittee of 25, and of

House

a

con¬

sisting of 434 other members.
However, I do feel myself to be
safe ground when I

that

it

will

be

assure

aim

our

to

you
not

impose taxes that will injure bus¬
iness

threaten

or

the

revenues.

The two must be
kept in constant
focus if we are to maintain a
sound and prosperous
economy.
Our Committee devoted the bet¬
ter part of a month to

hearing

of witnesses

scores

and

on

excise taxes

nearly all of them presented

carefully

prepared and informa¬
briefs which will be of the
utmost assistance to our Commit¬
tive

tee when

we

vision

the

of

Does

Revenue

a

re¬

Free

Enterprise?

Progressivity

flicts

with

in

taxation

American

con¬

ideals

of

fair play.

The theory of our com¬
petitive free enterprise system is
that the rules of the game are set

by government.

Every individual

is expected to do his best to
win,
while abiding by these rules. The
skillful

most
to

their

do

players

are

entitled

winnings, and what they

with

their

business

of

gains

is

not

the

else—pro¬

anyone

vided, of course, that the win¬
nings are not used anti-socially.
But, under our present tax laws,
,

the government is
likely to seize
the lion's share of the

winnings.

When it does so, it makes
esty of the rules and, in

trav¬

a

effect,

endorses the communistic
doctrine
that the whole institution of

pri¬

vate

property

that

told that the free enter¬

is

out-moded

and

must

give way to what the dogooders are pleased to term the
"new
order."
Their
arguments

that

are

tem

is

the

failure

a

adequate to
If

their

how

free

enterprise
and

wholly in¬

times.

our

sys¬

to be won, not
only
also here at home.

contentions

be

true,

does

it come that in the
darkest hour of the great contest
to destroy Nazism and
Fascism in
their

abroad,

worst

possible

world looked to

us

form,

the

to become the

arsenal' '■

Of democracy, " also 'the
banker: for the allied side?

v:I cannot yet understand how it
>vas possible for a decadent sys¬
tem of capitalism to convert from

other

the

crisis, each succeeding

product* of

some

to

its

so

desperately needed in
Armageddon.

Battle of

We

even

Russia

had to

step in and
being crushed

from

destroyed.

If

what

true,

it

should

and

done the

have

Russia

and

those

would destroy our soul tell
reverse,

save

been

who
us

in

should

be
the

have

saving, but she couldn't

because it takes free initiative
do that kind of job.
»
•

to

-

We

are

in

general, agreement,




was

school

read

the

for

easy

why

American

control

citizens

Sectional
dices

their

private

at

time

icit,
tax

and

government, so rhuch of
it dangerous to the American sys¬

encroachment

upon

business and industry; a period of
immunities and privileges granted
one class for the sake of
political

and denied to all others;
period in which new instru¬

power,
ments

of

public

power

were

created which could have enslaved

us; a period of prodigious spend¬

ing with votes its major aim; a
long, long period of reckless and
wasteful

deficit

unprecedented
cumulation of
lic

debt

financing on
scale, and the

me

an

which

potential

long has
of

source

that could destroy

period of

pub¬
been a

enormous

our economy; a

attacks

many

inflation

an

on

consti¬

tutional

government,
.some
by
men in
power, some by advocates
and preachers of foreign ideol¬
ogies who would substitute some
form of the corporate state for
our

republican form of represen¬
government.

tative

election

President
the

mandate to the

a

the

and

Government

States

an

should

overwhelming

an

Congress
of

be

be

reinstated

of

as

the

that

United

returned

the

to

the

organic

law

the land.

failed

we

.

power, and individual stupid¬
as witness President Truman's

two

vetoes

of

the

tax

reduction

bill and the labor measure.
At
the November election the Amer¬
ican people, by a

preponderant

majority,

declared

that

they

imposed

them

upon

as

a
a

rates

had

he

such

no

corporation
the

pockets

government

individual

time when the gov¬

a

running

big surplus.

a

Figure that out for yourselves, if
Frankly, I have not been

war

measure.

stop to waste¬

ful

spending; they also emphati¬
cally registered their will that

However, the

national

in

that

for the
ber

of

one

labor unrest

is the

num¬

tax

fingers that dip into
the pay envelope.
The working
man
naturally computes his wage
as
being what he takes home,
after

all

made.

deductions

The

result

have

is

been

constant

a

demand for increase in wages and

increase granted

every

increase in

means

the price of What

buy; and that creates

vicious in¬

a

flationary

spiral that can
.ceivable get out of control.
On the other

hand,

tion will increase

prices.

an
we

a

con-

but not

wages,

<

It will need some clarifi¬

billions under existing tax rates.
with a
legislative budget
ceiling of $33 V\ billions, there

cation.

Even

tax
in

the fiscal year

mated

would

have

1948.

been

you

ever

that

witnessed

ample of

it

a

would

similar

stupidity and

crass

not

ex¬

iniquity of the thing is so flagrant
to
be apparent to all.
The

approximate^

as

tion

closed

little

Mr.

it

to

were

would

spending there

choose

Truman

but if I

to

comes

from

Mr.

and

to award

have

to

it

like

go

to

comes

constituents writing to me
complaining that they could
employment on war
work until they joined a union.
Many members of Congress tried
to do something about it, but the
labor leaders were so firmly en¬
war

not

to Mr. Tru¬

ascertion

spending.
the

on

when

I base that

fact

that

two

after

that

I ask

ute

insisted, again
again, that his estimate of
$37.5 billions is the rock-bottom

record
peak

decline

of

with

first

earlier

that

World

war

expenditure
cal year

to

year

1948.

compare

from

the

established
War.

After

to

positive conviction that if

we

are

to forge ahead in this country,

our

people must be
tain

permitted * to re¬
greater share of what they

a

You

earn.

present

and

tax

I

law

know

that

the

has

practically
destroyed incentiye. As an indus¬
trialist
some

*'*

in

California .wrote

weeks back, and X quote:

me
•

yet

shop

If

9

a

ers

1920.

ers.

were

we

must

deliberately

trying to
production of their
with

co-workers

own

this:

like

buddy,

win the

war

are

alone?

remark

a

"What's

you

the

trying to

Take it easy,

I do not like to think of
what would have happened to in¬
dividuals who preached that kind

pal."

of

doctrine

during

the

had

war

they lived in Germany or Russia,
but under a representative form
of government I supnose we have
got to take it and grin.
All over the country building
operations are virtually at a stand¬
because

still

Taft-Hartley Law

needs

our

slow down the

seen.

in

econ¬

our

sufficiently high level

found instances where union lead¬

hurry,

carried

of

maximum

ate, remains to be

Cox

Bill

the
of

production.
For
years labor leaders have insidi¬
ously worked to curb the output
of
the individual.
Even during
the war, when the cry was for
more and more of everything, we

was

something

as

the

to maintain

are

on

to meet all of
have

of

10

and

he

con¬

■

we

omy

before

violation

clear

a

Rights.;

that

union

employment? I
closed
shop and

the

Articles

war

after

a

labor

a

handful of Democrats in the Sen¬

of

excessive

build¬

Brick layers, plasterers,
and
other building
Taft Labor law which the Con¬ carpenters,
trade groups are not alone de¬
gress passed over Mr. Truman's
veto. Not one of labor's
legitimate manding wages so high as to
rights will be denied by the law throttle construction but,,to make
matters worse, they are only turn¬
which
the Republican'
Congress
has
enacted.
Labor's
right
to ing out a fraction of the work that
strike for legitimate purposes will they did a few years,ago. ;
(ft
The same holds true in indus¬
be preserved; so will its right to
free
I seem to recall) q statement
collective
bargaining • by try.
agents of its own choosing. But by young Henry Ford to the effept
the law
will place some much that with 30% more -y/erkers em¬
production
,wqs
needed restrictions and curbs upon ployed,. .Ford
Now

The big thing that prompted me
introduce the tax bills is my

secure

union

made in the fis¬

1919, when the total

to

sider

It

this

the maximum Federal
was

Administration

you,

is

Can

The President has

enlightening

the

fellow Americans, if
free country?
If it
is, why should it be necessary for
an American citizen
to pay trib¬

and

is

in

efforts got us nowhere.

our

this

Mr. Roosevelt.

figure for the fiscal

secure

trenched

VJ-Day he sent a
peacetime budget to Congress that
is 400%
bigger than any peace¬
time budget ever submitted by
years

late

accolade ►and

amateur

an

.

during ;the

recall

well

I

Roosevelt
an

Both are half broth¬

shop.

boi*n out of wedlock.

ers

between

shop has no more place in
things than has the

scheme of

our

the debt.

on

When it

they constitute a
our economy.
I

on

not go into detail with you
on
that score because the

need

union

un¬

Present Taxes Destroy Incentive

sore

folks

1

And, I
be safe to increase the income of might add, the 80th Congress vdll
never
the American people through tax
accept a politic tax bill
reduction; that the better method written by the CIO for Mr. Tru¬
is through wage increases.' Have man and his White House advis¬
President

of

canker

$4 billions, which would have left
$5 billions,-or more, for applica¬

is

,

fact,

matter

The esti¬

loss under H.R.

revenue

"

Industry-wide strikes are unAmerican and indefensible. As a
•

reduction and debt reduction

But I will make a prediction for
taxes and on Julv 1, a sec¬
If Truman takes this tax
decrease, amounting to as you.
much as 29%, went into effect in reduction issue to the American
Canada.
But we, the richest peo¬ people in 1948, I predict here and
ple in all the world, are told by now he won't carry as many States
our

permits industry-wide
recognizes unionized

shops.

I am reliably informed that a $18 y2 billions, or about one-half.
Many of you are wondering
large
midwestern
manufacturer
has figured that H R. 1 would what's the next step? Can we still
have been equivalent to an aver¬ eet tax relief for 1948? That, mw
age of 31/2 cents per hour wage friends, is up to you and 49 mil¬
increase for his 1 employees and lion other tax-weary Americans.
The: Republican Party has lived
that is not to be sneezed at. ' ' '1
Canada and the Uhited King- up to its: promises.- Whether you
domdom have already each given can influence Mr. Truman, or a

their people the benefit of a sub¬
stantial reduction in personal in¬

it
and

the

tax reduc¬

that

be
at $41.5

because he has made Roose¬

sure,

has turned

law is deficient in several respects

may

look

with me, I am
of the major causes

worm

aroused

an

strikes

1948

year

velt

agree

say

people compelled
Congress to act. The Taft-Hartley

income, the net receipts

man

will

I

and

and the Congress.

and

able to

You

government,

leaders have defied the President

do

starving* the goose thatj laid the
golden eggs, as well as killing her
outright. At the current level ol
fiscal

government,

that because time after time labor

as

the

inner

the

of labor leaders, was not
strong, or stronger, than the

Federal

a

you can.

reconcile the two acts.

times

at

as

not necessarily produce the
great¬
est revenue. There is
such a thing

conservatively estimated

to

reckon with the bureaucratic lust
for

ity,

tax

for

bridled demagoguery?

Unfortunately,

crushing

nurturing

were

made up

can.only be provided by

Severe,

we

the

and

Congress

that

a
government within a govern¬
ment, and I am not so sure that

production

allowing all to make and retain
reasonable profit.-

a

convince

country

be incentive, and that

ond

had

we

last November, when 50
voters
marched
to
the

polls, and by
majority issued

there must

incentive

power strike, not to men¬
multitude of lesser strikes,

burgh
tion
to

continue the

come

Mandate for Tax Reduction

million

we

business

one

for 49 million

cut

ernment is

an

ac¬

his

when

taxpayers at

tem of representative government.

It was a period of government
by men, not by law; a period of

income,

heavy tax burden.

attain maximum

Truman

Mr.

running on a $19 billion def¬
but he vetoed a $4 billion

was

industry.
class preju¬

sation in

a

a

over

suspicions and strifeall foreign to our way of life—
were encouraged.
It was a period
of experimentation and
improvi¬

in

into

and

jealousies,

failed

significant -that

one

They demanded

the

having

it

been

compunction when he signed the
repeal of the excess profits tax
in 1945, which put about $6 billion

created by the men in power

enlarge

tie-up of a year ago, John L.
several
coal strikes,
the
New York truck strike, the Pittsrr

ly upon the inflationary effect of
giving the people more of their would be a margin of $914 bil¬
own
money
to spend, but it is lions, to be apportioned between

predecessor,

tanks

planes,
and
trucks, and tractors,
and guns, and shells, precision in¬
struments, not to mention the re¬
quired supply of food and cloth¬

have

The veto messages dwelt heavi¬

ple lived under crisis government,
moving from one crisis to an¬

wanted relief from the
staggering
tax load that had been

.and

the wrong.

grammar

After

To

a

impose taxes.

not

a

understand

to

For 14 years the American
peo¬

peace to
war, almost overnight,
and produce the endless and limit¬
less
quantities
of

ing, all

student.

to

two messages

but

people; and that the Constitution

I

was

authority

venture.

is anti-social, and
one's rivals is

system

1

sole

the rail-;

road

Lewis'

and the national income remain at

to you that the

say

would

creditable

so generously endowed.
True, there is yet a great battle

You will recall that

are

not

measures

free enterprise sys¬
representative form of

R.

H.

given in the veto messages

had

outslripping

We

President

withholding approval from the

government, and the many other
blessings with which we have

criminal.

prise

for

of

the

of

compounded

need

reasons

chil¬

our

our

bill

I

way

historic and traditional in¬

government

Code.

Progressivity Fit in With

,

.*

draft

to

come

or no con¬

that

Congress to

been

industry.

Obviously, I am not in a posi¬
tion to say to you
definitely what
will be done, because after all I
am
but one member of a com¬

on

tem,

or

affecting

your

our

stitutions,

our

great, when
liberties,
our

the

of

children may en¬
benefits and advantages

the

national

present

charge
veto

usurpation

our

our

It took such strikes as

debt

productivity of

high levels than if

I

Truman's

their

and

the

upon

ception of his Constitutional limi¬

fortunate

life, to the end that

joy

You have had several able
rep¬

before

President who has little

re¬

world.

preserve

pends

tations.

less

free institutions and

dren

of
appear

to

the

upon

tax system, which in turn de¬

our

upon

tion

of

riods.
resentatives

United

the

conferred

His veto of the second tax reduc¬

our

could

such

the

and

of

ability to redeem the

depends

and that is based on
product-on.
the
Congress the sole power to levy By reducing the tax burden we
are more
likely to see production
taxes, yet it was .vetoed by a

has

made

supplementing

revenues

of

relief

the

Constitution

States

we

highly

a

the

great politi¬
people.
a

True, we put everything that
possessed into that war.
We
felt then, as we feel now, that no
sacrifice
was
too

present arrangement

ideal; but unfortunately,

desirable

for

countries

pros¬

in time of
cepression there is a
rapid falling off in revenue from
that source and it would be

find

lend

habilitation of

considerable number

a

of years the
would be

and

could be assured of

we

by

produc¬

and

tion.-

Our

been made

maximum

quillity

low.

cal party to a free

re¬

Thursday, August 7, 1947

10% % reduction to the big fel¬

a

a

word about the Hartley-

ing costs.

.

.

,

union labor leaders-r-all

intended

down 25%.

■

,t..,

The present high prices are* in
busi¬ for no other purpose than to pro¬
because ,there was no longer tect the public against widespread a large measure due to hi£h pro¬
the power
duction costs and excessive exr
off racketeering labor an incentive for me to remain in abusesjof power and the evils in¬
leaders
be
curbed, if not de¬ business. Most of. the money that herent in jhe exercise of that ports .of nearly everything -Iwe
stroyed.
iI made went to taxes."
power.
The new labor law will need..: >,
„<
A
Republican
Fellow Americans, I ask you in
Congress,
re¬
Congressional opponents of tax return to the rank'and file of
"I have

sold,control of

;

my

ness

3

.

sponsive

j

to

the

mandate

of

the

people,
bill

enacted a tax reduction
(H. R. 1) which would have

granted

tax

relief

to

49

taxpayers, ranging from

million

30%

in

the low bracket to

10y2% in the
brackets.
That measure
met with universal approval and

highest

fulfilled

a

sacred

promise

that

reduction bleat

over

the radio, and

labor
fairs.

control
"

of

their

union

af¬

all

sincerity,- how

"

long

can

this

continue without bringing an eco¬
that my tax
bills were discriminatory in that
You will agree with me, I am nomic paralysis? • / • •
Gods knows I want to see the
they did not give the little fellow sure, that the need for corrective
as
many dollars in reduction as labor
legislation
was
even
of working man get as much money
the so-called
big fellow received. greater importance than tax re¬ as he earns and I rejoice with
They s utterly ignored the f act duction.. lyVe. have had our fill of him in many of the gains he has
1
that H.R. 1 gave a 30% reduction strikes since
I, myself,
J-Day and the-need made over the years.
to the little fellow as against only of the eountrv, is for,\labor tran¬ : have carried a card in. the tvnoin

the

open

forums,

:

166

graphical

union

than! I

to

care

for

more

recall,

of

somewhat

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4618

Volume

so

years

I know

benefits

the

that

have accrued for the working mart

well-being for the many by
serving and promoting the
nomic

motives

and

pre¬

to

eco¬

billions.

incentives

ent

At this point may I remind
you
it requires an investment of

by being organized, but the situ¬

that

ation has gotten out of hand.

limit

no

or

nothing to

say

has over $8,000 to create a new job. Today
about how The average person who receives of the

his union is to be conducted and

indications

that the rank and

are

small

a

the job

income

does

not

create
through which he gets that

Someone else has made
getting fed up with their income.
leadership. I think that was dem¬ that job possible, through his de¬
onstrated at Detroit more than a cision to provide capital, or as¬
year ago when Mayor Jeffery was sume a business risk, or take on
reelected
over
a
man
named managerial responsibilities^ Any
Frankensteen, a Vice-President of plan of tax revision which does
the Automobile Workers' Union. not
give at least. proportionate
You will recall that Mayor Jef¬ recognition to this basic reality of

ment

fery was elected by a 50,000 ma¬
jority, and to me that was most
significant, because the automobile
workers

wish in the
1

elect

can

anyone

city of Detroit.

I have gone into the labor ques¬
tion in some detail because I con¬

paramount question
confronting us today. It involves
it

the

workers, who are being ex¬
ploited, just as much as it does the
employer, business in general, and
the

it

unfortunate for the

is

as

country

President

that

whole

a

would

be

Tru¬

various

a

existing

greater production, lower prices,
and an expanded market for fin¬
ished and
I

am

of those

one

Americans

order

materials.

raw

to

who

old-fashioned

have

that

sound

a

and

in
ex¬

and above

over

If he thinks
that his veto of the Taft-Hartley
Bill will Win him support from

ation

the rank and file of

all

stability.

labor, I fear
much dis¬

should

be true of the
farm, the
shop, the factory, the railroad, and

man

when

the

votes

counted in November of '48.

The country applauds

the action

of Congress in overriding Mr. Tru¬
man's veto
of the Taft-Hartley

other activities.

Under the New Deal

he will become a very

illusioned

taxes, cost of oper¬
depreciation.
That

and

18 tax

laws, each

we

enacted

slapped

one

on

of the other until the whole

top

thing
has

looks

like

traveled

a-suitcase
the

around

that

develop¬

history of

man¬

we

need, my friends, is

a

old American spirit of selfreliance that made America what
it is.
We must get over the idea, that
the government owes
I

freely

certain

us

living.

a

concede that there
fixed obligations \to

that

incumbent

are

are

the

upon

the government and which should
be

the

avoided.

On

other

the

last

have

certain

obligations

government.
I
ceded it to be

have

nity of the individual
also

us

while

dol¬

every

It is

that is

needed for the

neces¬

conduct of government, and

sary

'

will again become

we

people.

prosperous

happy and

a

Let

us

ever

only a prosperous
help rebuild a war-

can

to

all

and

command that

my

lutely

must

stop looking to Washington
do the things for them that
do for themselves.

10

committees

and

at

the

same

time give due regard to the sen¬

there is abso¬

pressions.

The

situation

wholly different from what it
back

in

had

a

the

late

runaway

'20s.

was

Then

we

market, and

no

backlog of orders.
tem

ex¬

today is

Our credit sys¬

was

.over-extended and we
iority rights of the older members.
were skating on
We had to set up research staffs
mighty thin ice.
Today the situation is wholly!
for the various committees, and
different. Our banks are
bursting
you people know that it was not
with
deposits.
Every manufac¬
an
easy matter to pick trained;

men

East,

who

and

women

loaded

of

their

all

planning.

In

underwent

they gladly
tribulations and

paints, 64%; iron and steel,
34%; plumbing and heating ma¬
terials, 52%.
For the building

Paint materials include
many im¬
ported items which have com¬

fore.
While

Chairman,

we

able to find

a

have not yet been
suitable individual

I

so

and

faith
and
and

in

a

they

the

future

supreme

America

boundless

of

America,

confidence in God

needs

That is what

today.

given

could

go

particular position, not¬
withstanding that the job pays

$9,000

on

and

enumerate

be

for

one

'
;The'80th Congress has to date

1

a year.

,

.

free

a

If

■

•

,

that
area
which
we
nroudly call the1'"bread and but¬

.

we
get a
altogether' due to loose and
irresoonsible talk by persons who
should know better. A deoression

Continued- high production

materials

maintenance

and

inventories

normal

of

by wholesale

the rest.

carefully,

and

Unless indeed the
country is in
a new round of
price inflation,
it looks as if general

for

tent of cost deflation that is

(3) Competition as the1
regulator;' including not only
petition between different
ducers
of

and

the

but in order to bring these oppor¬
tunities into, fruition we must be

kinds of
with

different

between

materials, such

cement

products-.

* ;

blocks

■:M

com¬
pro¬

distributors

materials,

same

but also
different
as

lumber

and

clay

"

or

prolonged

struction.

;

bilization

of

parently,

be

a

nec¬

deep

in

con¬

necessary

costs

sta¬

could

not,' ap¬
without' a

effected

slowdown of construction activity,
the coming of the slowdown

just

when it did is

of

tion

a

far better indica¬

economic

would have been

health

than

1947 boom

a

ac¬

companied by further price, wage
and

construction cost increases. "

Sound Recovery in 1948v.tD

,

Sound

sound

adjustment
the way

in

to be the

usher

this

pave

recovery

proves

will

market

should

year

in

1948.

•

for
this

If

case, next year
third phase of

the

postwar

recovery, the phase of
catching up with deferred de¬
mands, likely to last several years.
After World War I it took until

the

of 1924, a period of six
from the cessation of* hos¬
tilities, to catch up' with deferred
construction > demands. ■
In
that
end

years

postwar period cost stabilization
affected by a two-year de¬

was

pression
which

(1920-1921), the'like Of

we seem

to be

avoiding this

time.

.

construction activity after deferred
demands had been taken care of

volume

the country ever had in
peacetime. During the third phase
of recovery a climate favorable to
broad economic
expansion was
created, so that the fourth phase
of

postwar

recovery

.

was

one

greatly increased activity in
in

ing in terms of
to

follow

of

are now

a future

fulfillment

construction

of

con¬

industry gener¬

ally. Prophets who

,

,

recession

Since

struction 1 and

.(4) •, Reduction vof any .unusual
profit margins charged in the
shortage period.

itrtich dispatch as is

.

as* to require

essary is such

in 1924.
The reverse happened.
Following 1924 there were five
price years of the largest construction

'

and with -as
released from the Stranglehold in
(5) Elimination* of all abnormal
advisable, to will'only come when we lose our which we are held by a grasping
excess
costs that arose
in the
fulfill the Republican Party's cam¬ heads, -our. faith in
America, and and a thoroughly! selfish bureau¬
shortage period,, .» \
';•/
paign pledge to eliminate all that in the future. I believe that with, cracy.g., '
•
V
I,
j; (6) Increased productivity of
portion - of the huge bureaucratic intelligent leadership we can work
The venturesome spirit which
construction labor; better coor¬
'machine Which < is not absolutely out a program that will continue,
made Anrierica nbw lies? dormant,
dination apd improved managerial
the present level-of
essential.
"
?■'
"
]
prosperity in¬ because the incentive to branch
1
efficiency on construction jobs.
Congre&sv is doing this Without definitely.
\ \-li\
n
ot; but has1 been
moved

private enterprise.

Many people exnected declining)

(2) Reduction of some material
prices badly out of balance with

competition

,

/, i ter basket of the world? holds as
depression it will many opportunities as it ever did
r

(1)
of

following factors:

possessions

had

in themselves.

clocks, rolling stock, hand.
factory equipment, and'
Today

indefinitely..

climb, to'

rise,
I call that

and retail dealers.

their wordly

few,

were

Lowered construction costs will
result from the

hardy

forefathers, who had landed on
Plymouth Rock two centures be¬

watches and

farm

.

wisdom, day by day,

progress.

pared

short,

the

the trials of their brave and

turer has

tee, of which I am honored to be

To gain in

With hope and zest to

by

brave

The

the

not

was

great

a
backlog of orders. Wei
the va-;
They demonstrated to an ad¬
need
everything from shoes to miring; world what the American
rious staff positions.
In the case,
household * gadgets i neople can do if but
of the Ways and Means Commit-; automobiles,

and experienced men for

To know and feel that I am
To stand erect, not bow the

builded and materials
commodity
group
(not including prices at
wholesale, cost of living
Washington bu¬ metal
products) the increase was and
construction costs might be
reaucrats
and
government sub¬ 94%,
compared with 91% in the
stabilized at levels somewhere in
sidies.
Rather,
this
great and general wholesale
price index for the
range of 45 to 65% over their
glorious country is the product of all commodities.
Lumber's price 1939
averages.
industry,
freedom,
opportunity behavior has been
very
similar
and personal initiative.
It does not appear that the ex¬
to that of agricultural
products.
made

world.

foundation for such

no

.

The power to chose the work I
do,
To grow and have the larger

(Continued from page 9)
tile, 47%; cement, 25%; lumber,.
single-family house projects
189%; paint materials, 144%; pre- are making notable

our

the Reorganization
Act passed by the late Congress.
In the process it was necessary for
us to squeeze 49 committees into

on—

Construction in Mid-1947

.

formity with

Englishman, Herbert Casson,
London,

remember that

America

purpose, so far as time
will permit, to iron out all wrin¬

streamline the organization in con¬

an

of

,

■

.

the

view,
free,
knee,,,
for our national
security, there To be no chattel of the
state,.
shall not be one
penny for ex¬ To be the master of
my fate,
,p;
travagance and waste.
To dare, to risk, to lose, to
win,
America no longer has money To make
my own career begin,
r
to throw away.
Henceforth, let To serve the world in my own '.
us
think of America first. Then
way,
.c

lar

worldly possessions into covered manded high
prices in world mar¬
wagons
and turned their faces
kets; in spite of high prices of in¬
resolutely and hopefully to the
gredients, manufacturers of pre¬
kles, remove all bugs and. inci¬ setting sun, braving the hidden
pared paints have held prices of
illumine the economic horizon in dentally, give tax relief next year. dangers of the forests; who in 150 their
products closely in line with
Two weeks ago, with the ap- years transformed an
a long time.
empire wil¬ general
My friends, it is the
commodity price increases.
first step in our return to Con¬ oroval of the majority members of derness into the richest empire on
On the face of this price record
stitutional government, and rule the Ways and Means Committee, earth—they were the ones who
the most likely adjustment within
by the people, rather than by I named a Tax-Study Committee builded America."
the range of manufacturers'
prices
favored groups.
Not
consisting of 11" outstanding rep¬
only did they wrest the
would
appear
to be reductions
resentatives
of
industry, labor, empire west of the mountains
Not a Do-Nothing Congress
bringing lumber more nearly in
agriculture and other activities. from
the
hostile
Indians; ..they
line with other commodities. This
For months the New Deal prop¬ This group will be a fact-finding built roads and railroads, opened
is, of course, a highly important
aganda bureaus have been trying body, and as a result of their up farms,, established schools and
to sell the American people on findings we hope to report out a churches, and created thousands factor in the cost of single-family
houses. Paint materials dropped
the idea that this has been a do- revised Revenue Code
early in the of modern and prosperous cities,
nothing Congress. Based upon my new year that will be workable, villages and hamlets where the sharply in June. Materials re¬
quired for semi-fireproof and fire¬
understandable and fair; There is standard of living is so
more than 30 years' service in the
high that
proof buildings and heavy con¬
House of Representatives, I say a great need for revision.
'
it is the envy of all the world.
struction are priced at wholesale
to you that this is a foul falsehood.
When the early pioneers set out
The Depression Bugaboo
I cannot recall a Congress that has
on
that great migration they cut today at levels reasonably com¬
parable with rises in general com¬
Fellow Americans* I am greatly all ties with the old
accomplished so much in such a
home, and
disturbed, as I am sure you are, what they did, and what they ac¬ modity prices and the cost of
short time.
over the talk that we hear about
The' Republican controlled 80th
Vtt l
jUOr
complished, |; was
done
without
a depression, j!. Let me
Congress* came
into
being
on
say to you government subsidies, government
Imminent Lowered Construction
with all the candor and force at
l';
Jan. 3 and our first act'was to
controls, - or even governmental
/'• •" » ■"
Costs ' :

Bill by such whacking majorities.
It is the first ray of sunshiny to

sol¬

a

Perhaps I can best illustrate
what I have in mind by quoting

Private Enterprise

that

Washington shall have

Indeed,

is necessary to

rebuilding of that world.

man.

resolve

world.

vent America

con¬

sundry and I feel, with my whole
being, that the American people

America

devastated

33

to their

never

Claus

a

realization of the "last best hope
on
earth"—the freedom and dig¬

the

Santa

or

that

cessity of mutual sacrifice for the

duty of the
government to act as a

Federal

shackles

bureaucratic octopus has fastened
upon us. Let us recognize the ne¬

hand, the people of America also

nurse

believes

of

fine

not

expanding

the threshold

era

spiritual rebirth of the American
people. We must recapture that

people

for

go if
industry.

can

break

Let

gravely deficient.
If,our economy is not to remain
static we must provide
proper in¬
industries and
businesses, and the
creation
of new ones, both
of
which would
make
more
jobs,

we

on

the

all

panding economy all investments to
situation that at should return at least 5 or 6% they shoulid

times has threatened our

economic

stand
greatest

we

What

failed to recognize and take

man

cognizance of

are

system

land without pres¬
horizons.
There is

where

to

in

centives

they

'

sider

economic

our

in all the history of mankind.
us here and now resolve to

era

kind.

file are

^

a

have the will and the

we

of $225

income

Let

economic

The average union member

little

national

a

America is

of

the few.

see

(549)

demands

think¬

depression

of- deferred
and

filling

industry's backlogs of unfilled

■

1

impairing
•

single essentidl gov

a

erhmefitat function or service. 'J
"■•We pfbm'ised the American peo¬
ple to drastically reduce the costs
Of

t

government which, under the

:NeW Deal; have assumed Franken¬
steen

proportions.
? ^ .
.
-'' < • ':
Let hie return to the budget for

a

few moments:

we

must have

that

about $40 bil¬
Now that income has

to4 a

we

know

or

how

closely linked
balanced budget is tax. relief. tional inOome'

advisedly,

important

con-

"cerns must be5 the maintenance Of

lions

a

year.

increased to
while

existing, and the creation of new

and

jobs, dependable income, and the

years,




to

give

expansion

as

the fourth phase of

«

expansion
to you, and I say

do .well

sdme'tead-

One of our most

it

say

might

thought< to possibilities of general

repressed and sup¬
recovery following World War II.
(7)
Increased
willingness
of
pressed by excessive taxation and
contractors -to tender i lump-sum Much will depend upon the kinds
jtistrtient/ of course, but, there is- oppressive
regulations. - The big bids and to
a
vast
guarantee completion of solutions found for the coun¬
difference
between such- job befdre Congress and our peo¬ dates.
: •
-v.
readjustment and a depression.';
try's current problems of indus¬
ple, as I see it. lies in re-awaken¬
All:these, things are currently
ariy in the reign of Franklin ing the spirit that was America in
trial labor relations, public debt,
the
and1 considerable
First, * he' toid us we ' had' our earlier days, and this can only taking - place
taxes and interrat'onal political
reached the outermost horizon and be done by permitting'the Amer¬ progress has been made. Reason¬
that we need look for no further ican people to retain for them¬ able stabilization of these numer¬ and economic relations.

Oh,

development. Now
loosely' and illadvisedly he spoke.; .Then our na¬

I wish to

orders

I

was'

about
am

$17-3

well

billions,
along

in

I confidently expect to live

selves

a

fair share

of

the" wealth

ous

will

that they create.
Fellow
Americans,

I

have

elements of construction costs

permit

and

development of
which builders

"encourage

new

-the

give progres¬
ture and in the destiny of Amer¬ sively better values for less money.
ica.' *'
n v.-' :;'f" s.
•:
Already a number of homebuildboundless

I believe

confidence? in

we

now

threshold of the

stand

most

the

on

fu¬

the

wonderful

ers

have

Joins

methods by

can

successfully introduced

site-prefabrication for large-scale

;

Corbrey Staff

Special to The Financial Chronicpb

LOS

aid E.' Weekes has
of

»

ANGELES, CALIF.—Don-

Carter H.

joined the staf:

Corbrey & Co., 65(

South Spring Street.

34

(550)

THE COMMERCIAL & FINANCIAL
CHRONICLE

ranging for instruction from this, country, and all the

liant outlook for the oil

rest that go

As We See It

for

(Continued from first page)

early future, must be that
and with that

shrinkage

our

Give to
In

fine,

continue

to

to maintain

observers

who

own

good times at home.

should

have been

But

alert

more

such

program.

have

has it been officially
consideration

the

up

we

under

are

or

in

Certainly

wished

at the very

no

what

some

exports

our

are

long

ago

are

Neither

may

be taken for granted that

will

be

sooner

later voices

or

heard

demanding that China, India, possibly
Japan, and many other parts of the world be included
when such programs as that
supposedly embodied in
the

"Marshall

Plan"

are

under

consideration.

And

of these arguments will be fully as valid, so far
as
sustaining the economy of the United States is con¬
cerned, as those now being advanced in support of

many

European aid.
Other pleas on humanitarian consider¬
ations, too, may be as strong in one as in the other
case.
This, then, would leave the defense of any plan
which singles Europe out for
special treatment with
only the notion of building or maintaining a "bastion"

j

against the encroachment of Russia to support it.
This
is as it should
be, for if what is apparently being con¬
sidered in the

of

case

fended at all it

must

Europe
be

on

be successfully de¬

can

such ground

some

self-

as

defense, albeit obviously very costly self-defense, against
the Titan pushing farther and farther into
Europe from
the east.

Dow

Jones

reached

Washington

again going into

must be

affected with

And here

opinion, which by every
competent analysis had been found
to

be

either evenly balanced be¬

tween the bullish and the bearish
sides or slightly on the bull side

to that time, suddenly swung
heavily to the bear side. Not only
did opinion become nearly unani¬
up

mously bearish but there also
very
general agreement on
other

are

naivete

a

not

which

is

al¬

making reference to

remain¬

shortages really mean in most contexts.
We pass over the
plainly implied, if not expressly stated,
proposition that they can not "wait" for the fruition of the
"Marshall Plan," but must either
have
the next month

or

two

or

renounce

more

some

dollars within

of the undertak¬

the strength of which dollars in
gigantic amounts
have already been
supplied that country—which, incident¬
ally, finds it difficult under a socialistic
regime to bring
itself to hard, consistent work in order to
on

gain

ing status of self-support.

a

self-respect¬

But it is not this
type of phenomena—now all too
common on the other side of
the Atlantic—that for the
moment concerns us.
It is rather the notions
and the

strange ideas which
not
If

appear to

be

developing, if indeed

already flourishing here in the

some

reports

are

to be

United

credited the "Mar¬

shall Plan" would
stop at nothing short of "moderniza¬
tion" of the industrial
plant of Western
in

the

restoring

of

war

Europe. Mere
damages is not

enough.

Factories must not only be
restored, and re¬
habilitated but "modernized."
Such questions as the
installation in Western Europe of American
mass

duction

.

I

'

techniques

one

in

are

apparently to be

governmental circles

installing, selecting the forms




pro¬

decided

somewhere.

only that but government would undertake
,

break

the

in

was
an¬

that

was

the

market

by
Not

of organizations and

the
ar¬

would

outstanding

opportunity.

As

at

buying

so

many

times in the past the stock market
failed to be so nice to so
many

people at the

time.

same

The close approach of the Dow
Jones industrial average to its low
of

October, 1946

by

accompanied

was

fairly complete selling cli¬

a

tor

which

in

basis

important fac¬

was an

holding that average, tem¬
at

least,

lows

and

above

just

both
an

on

further factor

on

its

closing

a

absolute

one.

A

present at that

was

to play an im¬
portant part in the ensuing re¬
covery
movement and make it
much

more

from

was

than

selling

a

rebound

mere

a

By mid-

climax.

investors had been

May
shred

out

important
number

of

months

to

the

from

able to

mass

few

a

industries

and a fair
individual issues for

either

which

a

outlook

the
year

for

longer

or

peared favorable even

six
ap¬

if the much

touted business decline

was

about

to

get under way, or which con¬
tained a strong enough growth
element to make the

purchase of
common stocks a relatively
riskless venture at the then prices.

their

These

industries

were

such

im¬

portant ones as the oil, chemical,
tobacco, automobile and electrical
equipment industries. These- five
industries happen to constitjitfc,-a
very

large proportion of the~Dow
industrial average, being

Jones

represented by 12 of the 30 issues
in

the

average

or

40%, while in

dollar value these 12 stocks com¬
pose

48% of the total value of the

average.

The blue-chip character

of these issues was another attrac¬

tion

to do

and

movement

an

poverty, for time, which

that is what dollar

some

That

score.

expected

max,
we

"warnings" from London about how limited is their
ing supply of dollars—that is, how great their

assistance

low ground.

new

Market

mind the

are

of

bear market low and on that date
it and many other
averages were

any of the cries for further assistance from the other side of porarily
the Atlantic.
We do not at the moment have in
October

they

low

average
163.21
on

May 17, last. The Dow Jones rail
average had already made a new

present

Europe?
Is it possible that what is
being suggested by apparently
well-informed and usually reliable sources can
really be
under serious advisement?
If so,
the public certainly
has the right to be
officially informed to that effect. And
We
might add that if this is the case many official minds at

States.

the

as

industrial

its

downward

What Is It?

But what is this that is under consideration for

ings

existed

to

investment

characteristic
that

and

funds.

the

This

minority

list

stocks will

of

further

upon

As

on.

be

commented

•

The

.

lows progressed,
number of

the

May

fed

was

by

developments. Of

importance vin.
was

it

a

most

the

early stages
growing belief
"advertised drop in

rapidly

that the

over

business

v&sreither

to

be

very

minor.-in scope or was not to
make itself felt to any
degree for
many
months to come.
If
this
were

tfUe, and the evidence

was

good deal in that direction then
the equities of many other indus¬
tries besides the five mentioned
a

above seemed

likely to give good
during the

accounts of themselves

remainder of 1947. The six months

holding period
stock

market

the constructive

side for the time

short

order

posal"

back into thf

came
on

being.

the

In very

Marshall

became

the

"pro¬

Marshall

"plan" in the majority of peoples
•minds

and

for

weeks

some

the

bogey of what might be going to
happen to our export trade in the
final

months

of

the

is

or longer ex¬
panded and fears that the current

high level of earnings was very
temporary subsided.
The
post¬
ponement of any tax reductions
for

the

individual

1948

was

only

a

better

that

until

least

at

disappointment

a

mild

one

in

view

but
the

of

feeling about other matters
then abroad.

was

in

as

either

outlook

is

no

it seemed to be

as

ago or even two

Business

ago.

measured

Board

activity, as

by the Federal Reserve

index

or

other index,

any

trending downward.

Slowly, to
sure, but the trend is down.
Question has again appeared as to
be

how

far

whether

this

trend

not

or

will go -and
it will accelerate.

Will agreement be reached
by the

Western European nations on the
relaxation of restrictions on trade
and
on
other changes
in their
methods of doing business
quickly
enough to encourage a skeptical
and

cynical Congress to appropri¬
large enough funds to im¬
plement properly whatever plan
ate

the

upon

for

Western

Russians, find

the

re¬

Europe.
the-new-

monkey wrench to throw in the
works that
they are so obviously
searching for?
Will the sizable
drop in American exports just re¬
for

more

"dollar

June be followed
by
sizable declines as the

crisis"

widens

and

deepens?
The decline
of

190

and

in the Federal Re¬
index from its

Board

serve

the

to

to

high
figure of 183

June

the lower, figure

indicated

for

July in itself represents merely
a very
high level
business to a still high one. The

retreat from

a

of

decline

could

amount

further,

and

continue
say

fair

a

to

170-175,

yet leave business at

a

very

good* level. But at a time when
the latest upward twist in the
cost
of living, the
growth of restric¬
tions on our foreign

trade, the end

of the

inventory accumulation pe¬
riod and other factors
point clear¬
ly to the downtrend in business
continuing for a somewhat indefi¬
nite period the question of the
break even point of American in¬
dustry has been reintroduced into
the

picture

couraging

year

look for six months

cited

\

months

clear

as

weeks

lost its
Faith in the business out¬

terrors.

six

longer

even

the

increase

an

only two months

ported

•

the recovery from

for

be agreed
habilitation of

Old One

an

arid

be

of two forms.

may

(Continued from first page)
technical situation

would mark the end of the whole

most incredible.

headed
one

Will

Market Nor

way

1946

ing their force, one or two of them
quite rapidly. On the other side
the supply factor seems to be

countries

New Bull

a

could

areas

their

their

Unfortunately the past few weeks

not confined to

While not so much has been seen in the
press about
Asia and, possibly, some other sections of the
globe, it

top

both

have
seen
definite
indications
that the favorable factors are los¬

be

given their normal weight, such
things are ac¬
tively under study, so much under study that
thoughts have
continuance of a large volume of turned to estimates of requirements of
materials, tools,
exports to that Continent (including gifts as well as com¬ machinery and what not to
give effect to such planned
mercial sales) a
sharp reduction in the volume of fdreign economy embracing most of Europe.
The idea would be
shipment would occur if, for example, the other parts of worthy of Russian communism, of
course, but that is appar¬
the western
hemisphere were to cut down sharply in their ently nothing which would deter some of the leaders in
purchases in this country. What more natural, then, than Western Europe today, or in this
country either.
the question: Why a "Marshall Plan" for
Europe to sustain
That such notions are
utterly fantastic is pointedly
the economy of the United
States, when for that purpose it
suggested by the recent
is as much needed in
controversy over the relative
Canada, and the Latin American coun¬
production rates of France and
tries as in Europe?
Germany.
The obvious
Nor have some of these other claim¬
impotency of the Labor Party in Britain to
ants upon our
persuade
generosity and our naivete been slow to point
even its own followers to
go to work with a will also
out that the "standard of
living" in many of the countries
points up the fact.
And a political revolution in
in this
Eu¬
hemisphere—at least so far as the great rank and
rope in effect erasing political boundaries
and age-old
file are concerned—is
fully as low as in most of Europe
animosities would be essential.
What nonsense is this?
even in these bad times.
Neither have they been backward
in listing this fact as a hazard to
democracy.

beginning to observe that
Europe, that even with a

the

number

a

example of what might be ex¬
pected of the rest of the market.

"inspired," or
least to have had their origin in
knowledge of

in the heads of officialdom in
various

was

to

are

through

1947

in Washington.

had to

now

arid

an

as we are aware,

plans

industry

months ahead

many

consequent success of
of oil stocks in
working

official word that decisions have been
reached in
such matters.
But if repeated "feelers"
and numberless
discussions which appear either to have
been

we
we

far

so

that

a

capitals of Western Europe

'

Prosper!

have been told repeatedly that
carry Europe on our shoulders if
we

our

with such

Nowhere,
asserted

exports sales must shrink

prosperity would disappear.

our

Thursday, August 7, 1947

The

in

a

distinctly

dis¬

manner.

Break

Even

:

Point

Officials of Westinghouse Elec¬

tric have publicly estimated

that

the break

cor¬

even

point of their

poration is double what it
1941.

The

majority

was

in

of

earnings
companies,
second quarter of
1947.,
while revealing a
continuing very
high level of earnings in most in¬
stances, show a decline from the
reports
for the

of

industrial

Passage of
first quarter despite' increases in
labor bill was
sales.
In the limited number of
considerably more im-'
instances to date where sales have
portant development and one that
decreased, earnings have declined
should be placed
definitely on the
the

Taft-Hartley

deemed

a

constructive side
stock market.

in

And

terms

of the

finally the

and

travagant settlement reached be¬
tween
industry and coal labor
brought about a resurgence of in¬
terest in the

inflationary elements

in the

picture. The possibility that
the Marshall plan would involve
large scale expenditures to reha¬
bilitate
added

Western

attention

Europe
to

drew

inflation'

the

and

ex¬

angle.

once

usually in a rather dramatic
disturbing
manner.
Thus
again the permanence of the

present
of

even

high rate of earnings
a

rate below the

or

current

but still high enough to sup¬
port the present level of stock
one

prices

is being questioned."1 The
tremendous increase in the break

point of American industry

even

necessitates -the maintenance of
volume at very high levels, levels
that are difficult to maintain for

Bullish Factors Lose Strength

any

If all of these factors that favor

Once again as the stock market
has made a close approach to the

the bullish side
force

for

an

siderable

are

to remain in

indefinite

number

con¬

190

months

the

but

of

ahead, then the supply and de¬
mand factors in the stock market
at its present levels might be con¬

really protracted period.'

•

level some of the factors on
demand side have weakened.

The seriousness of the
foreign po^litical
situation,
with
warfare

breaking out in Greece and Indo¬
having a balance on nesia and the threat of increased
the demand.side that was suffi-, troubles elsewhere is
enough to

sidered
cient

to

as

warrant

the market

tiating

was

the

belief

that

capable of nego¬

successfully

/

the

heavy

supply area that lies immediately

they represent'of the broad ahead of it. The apparently bril¬

account for part of the low
.priceratios of many stocks.

earnings
New

fears

nence

this

of

regarding the

perma¬

earnings, might complete
picture and invalidate the

Volume

166

that

argument
been

never
a

level

At

Number 4618

the

market

the

A Hint from the Motor Stocks

has

cheap in relation to

so

business and

of

THE COMMERCIAL & FINANCIAL
CHRONICLE

time

same

Possibly

earnings.

the

market

amount

two

of

financing to which many cor¬
porations have already been or
will

forced

be

to

resort

provides

good

example.
Ahead of its 13,000,000 shares of
common
stock have gone in one
a

tion but this
cial

senior

in

crease

securities

the

or

in¬

an

stock

common

the

formerly did not exist. Com¬
petent authorities believe that in¬

7

corporations

alone

securities at the

billion

dollars

a

6

for

year

Motors

company

it

is

df

new

working capital.

notable

And

with

ahead

of

the

point.

If

level

will

for

remain

many

average

1939

Average
Apr. .1942

Mar. J938

Oct.

1938

of the

of

last

gin

above

before.

its

the

low

mar¬

advance

in

the

strong

the

as

industrial average might make it
seem

to be.

Analysis of the indus¬

that the advance has-been carried

back

have

or.

done

advance.

distinct

a

less

really

from

A number have partici¬
a

few not at

A reflection of this fact is to

'found.in the performance
Y.: "Times" 50

the N;

stock

of

aver¬

some

hanging

minor issues, such as the
admission of a limited number of

displaced

the

and

on

well

pated onjy slightly,
all.

delays

minority.
than a third
on

Presidential

Congress did make an
effort to handle foreign policy on
a
non-partisan basis. There were
some

largely by
Only 29%

about

The 80th

trial section of the market reveals

persons

into the country

Europe, but in

record

withua

speak

was

me

important

general

not too- bad.

the

Yet Taft

-heavy foot strode forth to
of unity but created dis¬

today

and

of frustration and

slows

down

impotence

the

tempo of production.
inimical

lack

We

of

to

Nothing is

production

constant

as

general

power

or

effi¬

hold-ups

for

materials.

raw

therefore concentrating on
these four. factors,
they are having
are

absolute first call
so

on

to

as

our

avail¬

enable

us

dislocation
Here

I

as

possible.

would

relations with

and I

other nations
hope that Senator Taft will

not be the

one to shatter our own
national unity in the face of this
Atomic
Age and its terrifying

problems.

can/be argued that the concentra¬

This then is the real record of
in the the 80th Congress.
It is a sordid story of sub¬
investment issues in itself reflects
a lack of (confidence in the
over¬ servience to the lobbies tof
Big
all situation.
Business, of shocking inaction in
meeting the vital issues of -the
Conclusion
day.
With
doubts and fears
Senator Taft was the boss bf
again
of

arisipg

the

flow

of funds

about, such

fundamental

the

earnings

Republicans who voted this
shameful record. When he cracked
the whip, thev jumped.

impenrianence of the for¬
eign political situation it is diffi-

Small wonder then that Senator
Taft failed to give an accurate

cut to forecast an advance

report

stock

market factors

manence

of

as

corporate

the

per¬

and the

stock

by the

market

through a Supply
area that grows in quantity with
each point of gain in the average.
On 1he other hand it is not diffi¬

cult to

envisage

a

combination of

unfavorable

developments




that
a

test

will

91

and

76

re¬
on

profit."

off
to

long?

irate
the

also

,,.

of

these

failures

in

first

would

column

that

"In

I

troublesome
fuel

and

out

elaborate

methods

of

and

saving

industrially

power

by

ingenious methods of economy or
by staggering hours of the domes¬
tic

is

user

surpluses

industry
ever

going to
so

as

mop

created

the

up

leave

and

much embarrassed

as

by shortages.

1~~'"

less-

that

standard

It

is

an

absolute

reaching anything
duction

next

condition

the

as

made

that—as

upon

did

The majority of stocks
comparatively little.

There has been

ex¬

we

We are gradually

climbing back
the ladder of exports from the
point to which we were knocked

up

down by the fuel shortage.
We
haven't yet reached as high
point as we had achieved1 last au¬
far
a

of

our

either by

over¬

importing

enjoying a lower
living—or exporting
working harder than

There is no more slack to
taken up in our internal econ¬
omy.
We
cannot
increase
our
standards by greater
Je

money

wards unless also

production.
salaries
hours

get a greater
increase profits,
we

To

or

re¬

wages

or

to

shorten

without

mojre production
merely increase the internal
inflationary pressure and will be

will

of benefit to no one.

tion

that

The

is

It is produc¬

first necessity.

the

most

important section of
economy is that which I have
mentioned as basic to all produc¬
our

tion,

coal, electric power, trans¬
port and steel. If we fail in these
fail

We

in

all

have

production.

our

neither

to spare.

time

some

140%

the

urgent for our future
the period before
D-Day.

one

contribute to

can

by their effort

to

or

as

was

Every¬

our

failure

economic

sur¬

great power is at stake.
The courage and determination of
as

a

off

it

long and

try great in
war

alike.

nomic

would

of the sellers' market abroad

•_

tick

cannot-continue

as

a

country

living

any more

on

than

this weren't
doubt

but

would

only
on

there is little

so

that

be

stocks
today not

many

cheap

potential income but

on

present profits.
The

market

isn't

namby-pamby

naive

a

that

reflects

hvery puff of wind. The
people who back their judg¬
ment

with

hard

apparently quite

money

are

of the

aware

potentials that make for bear
are

being pretty

cagey about the whole thing.
The market shows it almost

everyday.

-

The

be

hurt,

as

this

buy

or

column

they can't

more.

is

So far

concerned

softly still
Stops in Bethlehem
same.

Thursday.

views

article do
time

expressed

not

Whyte
in

necessarily at

coincide

this
any

with Those

of the
They are ^presented as
those of the author only.)

Chronicle.

right and hold dear in our
civilization. Seldom in the world's
a greater call come to

nation,

a call for courage and
leadership, let us welcome that
challenge and meet it with all our
any

prices not increased sales. If

[The

be

history has

products is in my opin¬
illusory. The rise in sales
comes
from higher per unit
ion

—Walter

believe to

we

unit

per

most

More next

immeasurably

strengthen all that

larger

and Steel remain the

times of peace and

democracy, eco¬
political, is on trial

success

mean

sales. Gains in dollar sales of

applies.

before the eyes of the world. Our
failure would mean its .collapse,
our

Unfortu¬

the advice'to walk

Our

and

advances.

hold them
outright

pessimists but realists facing up
to the gravity of our task and
using for its accomplishment those
qualities that have made our coun¬

resources

and

energy so

Pacific Coast

that the

British Commonwealth of Nations

by its practical idealism play its
full

part

world
be

target we have fixed for
spring—difficult because of

We

.

public, on the other
hand, are beguiled by esti¬
mated
earnings and either'
hold on to what
they have on
the theory that because
they

Payments is on,

independent

our

stock

doesn't

success

our

by their lack of effort. The Battle
of the Balance of

all

re¬

The situation is

as

in

helping to

from

what

economic

otherwise

George
a

will

Orders Executed

chaos.

Schwabacher & Co.

Washington" Carpenter,

Jesup & Lamont, New York City,
a

Stock

member of the New York

Exchange, died at the

of 64. ; Mr.

&
a

Lamont

age

Carpenter joined Jesup
in

partner in

1921; he had been
Teft

brokerage firm.

on

Pacific Coast Exchanges

partner in the brokerage firm of

and

Securities

:

the

save

George Carpenter Dead

increasingly rapid disappear¬

ance

drum

companies due to
price levels.
that the stocks

markets and

nor

most' difficult climb to get to the
next

some

nately increased income

grejit constructive effort by the

exports;

tumn but we are not
But after that there is

abstinence.

entire nation is needed today. We;
should be neither optimists nor

perienced with the last fuel short¬
age—the bulk of the loss must
fall

low just under

a

upped
Theory is

ever.

a

many cases it is well nigh impos¬
sible to cut that home
consump¬
so

fu-*

aver¬

180 and rallied back to about

from

every

that

citizen in the country should ex¬
ercise the
very maximum of do¬

tion further,

immediate

concerned. The

was

ages

he

pro¬

like full

winter

of

is

more, that is

last

ThCj rest of the country will not
so
short-sighted.
.'

far

so

ture

al¬

was

completely meaningless

thumping about the sharply
you want
increased
income
expected
suggestion is

only balance

seas payments

vival

political speech. He was and because of the shortages which
holding the mirror up to Boss are affecting or may affect our
Taft, and his Captive Congress. production.
Looking thro ugh rose-colored
The lesson of all this is I
think
glasses he found that .what he saw
easy to point out,
was good. •
:

most

finished

No More Slack to Be
Taken Up
We can

sources

working

as¬

being

are

case

hold on,
my

our

night's

be

stocks

Last week's action

185.

writer

see

with

we

,

would bring about at least

the

like to mention
the great interdependence of our
industrial and domestic user of
these things.
It
is
of
no
use

ercised it looks as if we 'shoulc
which has fallen just short of
The President has
taken
the
duplicating its -February high. An leadership in efforts to establish get through—Jf not we shall cer¬
additional
manifestation of. this a lasting peace. His
approach has tainly fail and that failure wil
fall largely upon our exports. Our
phenomenon can be seen -in the been one of complete
non-par¬
fact that in May, when at times tisanship.
exports in most cases still come
1
the p. J. industrial average was
from the surpluses over a
There should
be
no
partisan
very
some
7 points above its low, as politics at so crucial a
period in meager home consumption and in

tion

If

re-read

of our exports I

up

age

many as 100 stocks were .making
riewTows daily while in the latter
port of July, with the average in
new high ground for the
year, the
number of new highs was aver¬
aging only about 25. In fact it

I still be

can

in

unity by slurs at the non-partisan mestic economy in fuel and power
If that economy is
foreign policy.
?
rigorously ex¬

our4

alternative but to

that

sume

Bethlehem and

at

own

factors

to get through the very difficult
period of next winter with as little

reaction.

exr

tent of-advance in the Dow Jones

asked

you

which

an

vetoes, but on these vital issues
Congress itself vetoed any action.
They
were
typical
Republican
vetoes, the vetoes of inaction and

having suggested that the sit¬
as

break

a

groun&j*

.

statements

to-

The motor stocks are.not alone

be

low

(Continued from page 6)
Republicans
babble
wild

The

high.

uation is-not

markets^ recent lows

Refutes Tait

industrial

average since May 17, which
thled $23 at the recent

in

stock

our

able resources

important indicator of

an

If
most

ciency

new

months

seven

of

abroad.

so

1938

motor

comfortable

a

5 months
:;V

that could result in

Some few observers took

this &s
the

October

had

past

4 months

into

average

the

bought the stocks. So I
no

representing these companies
(Continued from page 11)
were
cheap and would there¬
manufactures we could as
individuals. The only fore
advance. This theory
remedy is in our own efforts and isn't
original. It's the basis for
what are the if need be in our

come

sense

and

May 17 virtually duplicated its

low

|

Mar. 1938

Oct.

The record speaks for itself. It
further bolstered by the fact
that when the industrial

group still

disposing

I

knowing if
or if they

market.

that

were

Britain's Economic Situation

coal, steel, electric
transport. A shortage
of these has a doubly
adverse effect.
First it actually
diminishes the possible volume of
Time Lag production, but second and per¬
-4 months haps even more it brings about a

May 1946
July 1947

Feb. J 947

highs

high

a

to

way of
sold out,

the

'

1946

is

on

v

Mar. 1937

Dec. 1941

highs to date„
Lows
!

1938

over

D.J. Ind.

Jan.

even

of any one

Nov. 1936

highs

1947

interest¬

are

ing and maybe they're

power

■

'

the wrist

industrial

eleven years.

—

wrote

Steel

paper you have a nice
His

right when they
These little slaps

the building
would
say

Stocks

1946

at

months

Motor
1936-37 highs
1941-42 lows

were

motor stocks and of the Dow Jones

financing is resorted to in
any quantity the supply of stock
overhanging the market becomes
.

I

of

The following table gives the sig¬
nificant highs and lows of the

common

,

action

current

expectation is that demand for its

stock

greater.

better

even

have

clippings of two
assumption is that, having
old columns, before me, gotten out of them
once, how

ions

no

readers

the

was

spectively and that "...

occurs.

I have two

weren't."

products

increases and in turn in¬
creases
the
importance
of
the
even

:ion

possibly
real significance. The
strong posi¬
tion of the motor
industry is very
widely conceded and the general

stock

break

xi long, prefer stop¬
ping positions until clarifica-

across

their

If

common

to

tory of such performances by the
stocks combine to make

largely
through bonds and preferreds the
pyramids

having failed

and

during the have

.

stops,"

column, also enclosed by the held until a
predetermined
reader, and to which he figure is broken.
apparently takes exception,
Now as to the

'pretending" that "predic-

not

.

motor

is raised

money

3own signals continue in evi¬

is

group

February high the apparently
strong position of the auto¬
mobile industry and the
past his¬

increasing
in large
amounts. Thus the overall supply
of securities is headed for a large
new

motor

.

raise your

you

same

of my
olus a verbal criticism about

the

(Bethlehem

that

35

and then gave the
stops.
It must be obvious that

following the July
weekend. In a
subsequent

4th

dence.

regard¬

about

cer¬

Monday

equipment

auto

stocks

day's session." That

By WALTER WHYTE=

=

manufacturing
and

the

the

in

Whyte

Says—

its

new money

increase in the months ahead.

compared
The same

column I ad¬

one

disposition of

first two hours *in next Mon¬

Walter

very

utilities will be turning to the se¬

markets

auto

stocks

of

While
alone

working capital requirements is
steadily rising. The railroads and
curity

61%

the

Big Steel) "

in¬

company stocks.

that the percentage

funds that is dedicated to

frequency for

Jones

in February.
can be made

majority

and

been

ing the other

pur¬

zation

Dow

observation

to

of plant expansion, moderni¬

poses

the

has

with 65%

must

of

rate

that the

July 24 closed
$2.36 above its February high of
184.49, the best price for General

that

sell

Markets

obviously a spe¬
brought about by

dustrial average on

to

A pyramid has been created

dustrial

fact

tain

potentially the

was

situation

vised

Tomorrow's

past

timing of the 2-for-l stock
split. On the other side, despite

$80,000,000 of debt and $58,000,000 of preferred, with either

come.

the

the

year

more

months—and

justified. In

interesting
of

February highs. Chrys¬
ler, of course, has been,the excep¬

considered. Westinghouse Electric

again

most

most ominous one—has been the
failure of the motor stocks to bet¬
ter their

be

must

the

development

(551)

&

,</

Co., also
r

,

t

a
,

,

•

-

New

Members

York Stock

Exchange

New York Curb Exchange
(Associate)
San Francisco Stock
Exchange

Chicago Board of Trade
14 Wall Street

New York 5, N. Y.

COrtlandt 7-4150

Teletype NY 1-928

Prioate Wires to
San.

Francisco

Monterey

—-

Principal Offices

-—

'Santa Barbara

'Oakland
Fresno

—

Sacramento

Thursday, August 7, 1947

THE COMMERCIAL & FINANCIAL CHRONICLE

(552)

36

DAILY WHOLESALE COMMODITY PRICE INDEX SHOWS

The State of Trade and Industry
good many years major firms in the steel
operating on a multiple price basis for
such products as semifinished steel, galvanized sheets, enameling
sheets and long ternes. The price lists issued by the U. S. Steel Corp.
subsidiaries indicated that their prices on galvanized sheets are $2
a ton less than other major producers, $1
less on enameling sheets
and $4 a ton less on long ternes, a product extensively used by the
For the first time

in

a

week were

this

automotive industry.

relationships and strong competition involved in

With customer

today's steel market, despite the heavy overall demand, it is unlikely
that the price differentials will last very long, the trade paper points
out.
There are indications from some sources, it adds, that inde¬

pendent steelmakers will meet U. S. Steel's lower prices on some
so far this week the situation was not clear cut.

'items but
The

inroads

reflection

being made by

aluminum

sheets may cause sober

the multiple prices for galvanized steel

on

sheets and the
a

of automotive buying may cause
change in the price of long ternes.
of the

knowledge
There

week

the

manufacturers
timate
1

importance

little

was

over

new

were

no

or

this
that most
to the ul¬

Steel Institute announced on

Mon¬

of steel companies having

of this week the operating rate

94% of the steel capacity of the industry will be 94.9% of
capacity for the week beginning Aug. 4, 1947, as compared with
94.4% one week ago, 78.9% one month ago and 89.0% one year
This represents an increase of

ago.
:

0.5 point, or 0.5% from the

preceding week.
The

operating rate is equivalent to 1,660,700 tons of
castings compared to 1,651,900 tons one week ago,

week's

steel ingots and

1,380,700 tons one month ago, and

1,568,500 tons one year ago.

AUTOMOTIVE OUTPUT EXCEEDS

PREVIOUS WEEK AND YEAR

Murray Corp. strike,
and Canada the past
week rose to 94,643 units from a revised figure of 83,807 units in the
week preceding.
The gain resulted chiefly from the resumption of
operations by most General Motors plants after a week's idleness,
according to Ward's Automotive Reports.
Comparable figures for the same week last year show 79,385 "
units turned out, while in the corresponding period of 1941 only
62,146 units were built, due to widespread shutdowns for model
Notwithstanding the adverse effect of the
production in the United States

and truck

car

changeover.

deliveries showed strength

much
your

freight for the week ended July 26, 1947
919,928 cars, the Association of American Railroads an¬
nounced. This was an increase of 194 cars, or 0.02% above the pre¬
ceding week and was the highest for any week soUar this year. It
also represented an increase of 9,415 cars or 1% above the corre¬
sponding week in 1946, and an increase of 33,498 cars or 3.8% above
the

same

week in 1945.

The

Cotton prices in the
the

week.

Trading

was

.

to

tributed mainly

industry for the week ended Aug. 2, 1947 was 4,805,740,kwh, according to the Edison Electric Institute.
This compares
with 4,730,229,000 kwh in the preceding week and was 10.5% in ex¬
and power

000

4,351,011,000 kwh produced in the

of the

cess

corresponding period

of last year.

delivery.

Early strength

was

at¬

intent to buy 40,000 bales to be sent to Japan.

able

Steady commission house liquidation and reports of more favor¬
weather were responsible for price declines in late dealings.

Spot markets were faily active with new ginnings selling freely. Re¬
ports from Texas and the Far West indicate that the new crop is
making excellent progress in those areas. Textile markets continued
to be very active the past week and prices were firm to slightly
higher. Although some price resistance was noted, a substantial quan¬
tity of goods was sold. The demand for almost all staple carded cot¬
ton gray cloths was heavy with offerings of print cloths, sheetings,
and broadcloths for spot and nearby delivery becoming increasingly
limited.

past week due chiefly to the lack of offerings of fine wools. Ap¬
praisals of domestic wools for purchase by the CCC during the week
ended July 18 totaled 2,097,948 pounds bringing the aggregate ap¬

praisals of 1947 wools to 36,438,377. This compared with a total of
144,964,967 pounds appraised to the same date last year.

Retail volume rose moderately

in the week and continued at a

level than that of the corresponding week of 1946.
shopped carefully and continued to prefer medium-priced

somewhat higher
Consumers

Credit sales increased and collections were
generally slow. Clearance and promotional *sales
stimulate public interest. ; •
"

articles of good

reported

to

continue do

Gains

quality.

be

wholesale

in

volume

over

the

preceding week

and the

corresponding week a year ago were moderate. Order volume in¬
creased as retailers gained confidence. Buying was cautious, but less
restricted than in previous weeks. Deliveries improved in some lines,
scarcities persisted in others. Retailer preference for known brands
of merchandise continued to be evident.
•
BUSINESS FAILURES TURN DOWNWARD

of

volume

After

increasing in the previous week, commercial and indus¬
a little in the week ending July 31, reports

Bradstreet, Inc. Concerns failing numbered 69, down from
76 last week, but almost five times as many as in the comparable
week of 1946 when only 14 failures occurred.
*
•

Dun

&

The decrease occurred

entirely in failures involving liabilities of

$5,000 or more, declining from 68 in the previous week to 58 last
week. Despite the decline, they were about six times as numerous
as the 10 reported in the same week last year.
Small failures with
losses under $5,000 increased in the week just ended, rising from
eight to 11.

Compared with the 1946 level, they showed a less sharp

rise than the larger

failures with liabilities in

Manufacturing

excess

of $5,000.

accounted for one-third of the week's total

Retailing had the next largest number of failures, while
wholesaling, construction, and commercial service failures num¬

higher

Over half

East North

10.

of the week's failures were concentrated in the Pacific,

Central, and New England States.
failures were reported against four in the previous

checked

sisted in several lines.

buy

WHOLESALE FOOD PRICE INDEX SLIGHTLY HIGHER

items

over-priced

quantities of most foods were available. Housewives
purchased large stocks of fresh fruits and vegetables. Canned and
frozen meats, cold cuts and poultry continued to sell in large volume,
volume.
V ■"
•:.!
...

most paper products

were

style full-backed fur coats. Clearance sales of
cotton dresses and beachwear were numerous.
Men's tropical weight suits and work clothing were hard-to-get items
in many parts of the country.
The demand was considerable for
men's high-quality white shirts and staple colored shirts. Home de¬
signers purchased large quantities of laces and ribbons for remodel¬
ing last year's styles.
'
the

country

the

in

period

ending

on

10% above
corresponding week of 1946. Regional estimates exceeded
those of a year ago by the following percentages: New England
and Pacific Coast, 5 to 9; East and Northwest, 6 *o 10; Middle
West, 9 to 13; South, 3 to 7, and Southwest, 7 to 11.

Wednesday of last week was estimated to be from 6 to
the

manufacturers that order delays produce de¬
livery delays couple4 with continued unchanged replacement costs
swayed retailers further from hitherto guarded buying policies.
Insistence by many

Wholesale volume in the week ended this Wednesday

rose

Order volume con¬
siderably exceeded that of the corresponding week of 1946. Re¬
tailers continued to purchase prudently but less restrictedly and
nationally advertised brands and good quality merchandise were
moderately above that of the previous week.

preferred.

,,

revolution.
that

it

I

is

You, here
in the midst of a

are

am

happy

revolution

a

—but

to say*
brought

revolution nevertheless.

a

"You

are apparently acceJerat-J
ing the socialization of industry*
not because you necessarily want
to, but because conditions are bad

you

next

always hoping that
will solve your

are

step

though

somehow

another it doesn't."I

do

not

or

,

profess to know all

the

answers, but I wish to leave?
with you what may be a new

the

to

object

provide

target*

or

the

greatest

,

Department store sales on a country-wide basis, as taken from
index for the week ended July 26, 1947,

am

ever-increasing quantity of goods
and services and ever-improving:
housing and educational opportu¬
nities.
"Even the Soviet who national¬
both labor and
capital, dis¬

ized

covered that if

they took the in¬

centive away from

tion fell

on

its face.

labor, produc¬
Accordingly*

in Russia

today, you will find that
using both the piece¬
system and the bonus sys¬

they

are

work

tem.

I assume, without
knowing*
under a labor government

that

this is

also

that

believe

I

true.

The

that

thing

one

some

people'

fail to appreciate is that it is
just
as important to have
competition
between capital as between

labor*

and

that for

tion

or

outstanding produc¬
achievements capital also
should
receive
its
rewards
or
bonuses.
Otherwise there will be
desire, need or incentive for
capital, regardless of ownership*

no

to risk itself in

producing better*
cheaper things that
civilization. And?

the Federal Reserve Board's

simpler and

abqve the same period of last year.
This compared
8% the preceding week.
For the four weeks
ended July 26, 1947, sales increased by 7% and for the year to date
by 10%.
•

make up modern

increased
with

an

4%

increase'of

by

the

and humid weather

hot

was adversely
which prevailed the

past week

Retail trade in New York City the
affected

greater part of the week.
It was reported consumer acceptance of the new fall styles
was

ers

well received in the wholesale

The
of

markets with garment buy¬

attempting to expedite deliveries on orders.

the

await the effects
prices of finished

all to the end that not

increase

steel

in

merchandise.

quotations
,

upon
•

"In other

the Federal Reserve Board's index, department
City for the weekly period to July 26, 1947,
increased 3% above the same period last year. This compared with
an increase of 14%
(revised figures) in the preceding week. For the
store sales in New York

slightly to stand at $6.51 on July 29, as compared with $6.48 a week
earlier. The current figure represents a 24.2% increase over the $5.24
for the corresponding date a year ago.
.

four

According

weeks

to date 9%.

to

ended

July 26,
-

1947, sales rose 10%

and for the year

words, ladies and

tlemen, change the rules
if

game

wish—but

you

gen¬

of

the?

do

not

overlook the American
system of

free

enterprise.

faults,
peace

■

capital, but

labor suffers, through lack of
pro¬
duction
and
through
a * lower
standard of living.
; ,

durable goods field last week had to

Food prices moved irregularly during the past week with nine
commodities advancing in price and an equal number declining. The
wholesale food price index, compiled by Dun & Bradstreet, Inc., rose




another.

to

one

England,

possible number of people with

in limited supply.

new

for

in

of
namely,

Summer sportswear,

volume

from

ing

tools and

Early promotional sales of Fall women's wear were greeted with
enthusiasm. Consumers evidenced interest in fur-trimmed coats, coats

Retail

a so¬

country, or a communist
country, nor can I tell when I pass

Let us not argue about
dogma for dogma's sake, but keep*
an open mind on
my understand¬

and bedroom suites exceeded the supply.

Building materials, screen wire, steel pipe, carpenter

I

thought.

certain types of small electrical ap¬

pliances sold well. Shortages of known brands of lectric stoves,
refrigerators and washing machines persisted. The heavy demand
for good quality dining

private enterprise country,

problems,

..

air

the

cialist

and

„

.

in

feet

5,000

the

Substantial

Five Canadian

week and three a year ago.

variety and were

merchandise. Many
and carefully
Scarcities perall prospective purchases for quality,
to

refused

consumers

failures.

bered less than

"From

cannot tell the difference between

by the ballot box and not
by the sword and rifle and bomb>

purchases last week increased mod¬

consumer

instrumental in attracting interest to seasonal

trial failures declined

head and increased production!

about

RETAIL AND WHOLESALE TRADE MODERATELY HIGHER

The

number of people on
payroll—who are inci¬
dentally supported by the work¬
ers—to the 1938 level, but, as a
starter, I recommend a five-year
plan to reduce the number of
State employees 10% each year
for five years.
Certainly, with
the prevailing shortage of labor
around the world, this seems to ba
a
very simple and sensible sug¬
gestion.
From a business stand¬
point, it would mean lower over¬

a

Activity in the Boston wool market declined slightly during the

with hoods, and

SUMMARY OF TRADE

I feel that
country and mine and most
government.

the public

announcement by the government of the

an

Household specialties and

by the electric light

too

from

ducing the

domestic market eased slightly during
volume consisted mostly of

light and

small lot purchases for future

A YEAR AGO

of electric energy distributed

amount

suffering

was

into market was of the countries of the world are
the railroads were unable to furnish box cars in suffering from this same curse.
sufficient numbers. Reports indicate that many farmers are storing During the last decade, govern¬
a good part of their grain instead of selling it on the open market at
ments everywhere have been tak¬
present prices.
Prices eased slightly toward the end of the week ing a greater and ever-greater in¬
as heavy selling of the grain occurred.
Oats fell sharply >.t the close terest and participation in busi¬
It is my recommendation
chiefly in sympathy with other grains.
The domestic demand for ness.
flour tapered off during the week as buyers displayed resistance to
that we put a little more business
advancing prices. Export demand was light as buyers awaited an¬ in government. I am not going to
nouncement of September allocations.
be so bold as to recommend re¬

.

ELECTRIC OUTPUT 10.5% AHEAD OF

that

mentioned

I

name.

Sweden

The movement of the record Winter wheat crop

Clearance sales increased in number and

revenue

call

us

held up only when

FREIGHT LOADINGS ABOVE WEEK

totalled

let

The first

you.

"the Knox Plan" for lack of a bet¬

erately in late dealings.

YEAR AGO

AND

(Continued from page 4)

ter

early in the period but declined mod¬

erately from that of the preceding week and was somewhat
corresponding week a year ago.

Loading of

Shortage
with

irregular with prices of most
cereals finishing lower after an early bulge which carried some
deliveries to new seasonal highs.
Cash wheat and the nearby

than that of the

RAILROAD

The Dollar

commodity price

Grain markets last week were

consumers

'

The American Iron and

day

steel

complaint from

prices .for the simple reason
expected to pass the increases along
high

consumer.

beginning of the week, the daily
index, compiled by Dun & Bradstreet,
Inc., levelled off and moved within narrow limits during the re¬
mainder of the period.
The index closed at 266.48 on July 29, as
compared with 266.57 a week earlier.
On the corresponding date a
year ago the index stood at 220.09.
moderate rise at the

a

wholesale

(Continued from page 5)

industry

NARROW TREND

After

nished

but
it
a

has

It

both

in

has
war

produced

many-

and

and

in

fur¬

quantity of goods and

at

standard of

living for the people*

higher than

any

has

ever

earth."

been

other system that
tried

out

on

this

Volume

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4618

166

Securities
•

Acme Electric

Corp., Cuba, N. Y.

(S7i8)

Corp.
Offering—To be offered publicly at $5
Proceeds—Company will receive proceeds from

Colony
a

share.
sale

of 58,880

the

proceeds from the sale of 64,366 shares.

also will receive proceeds

rants for

common

Company
from the sale of 20,000 war¬

stock to underwriters at an aggregate

price of $2,000. Net proceeds will be used to pay current
bank loans and for working capital.
Broadcasting Co.,

American

Inc., N. Y.

27,

(3,333 shares) will be offered publicly.
Price by amendment.

The remainder

submitted.
•

Automatic

American

Business

Machines

Vending Machine Corp., New York

Corp.,

Birming¬

ham, Ala.
July 28

(letter of notification) 15,000 shares ($10 par)
5% preferred and 13,666 shares
($1 par) common.
Price
—$10 a preferred share and $5 a common share.
No

underwriting.

For working capital.

Conlon-Moore Corp.,

Par.

purchase

of

common

amendment.

stock.

Crawford Clothes, Inc., L. I. City, N. Y.

Aug.

9, 1946, filed 300,000 shares ($5 par)
Underwriters—First Boston Corp., New York.

selling

Underwriter

Price by amendment.

—

Name

by

Proceeds—For pay¬

ment of loans and for other
corporate purposes.

Bonanza
June

17

common.

Mines,

Inc.,

San

Co., Inc., Boston.

For

claims.

($1 par) common. Under¬
writer—Reynolds & Co., New York.
Price by amend¬

Francisco

(leter of notification) 65,000 shares (100 par)
Price—$1.25 a share. Underwriting—A. L.

&

exploration of mining

Proceeds—Of the total, 120,000 shares are being

sold by

stockholders and the balance by the company.

The company will use

proceeds for organizational pur¬
poses, which includes the merger of Berlo Vending Co.,
Philadelphia, and Sanitary Automatic Candy Corp., New
York.

Brayton
March 24

Robertson,

1946 filed 2,343,105 shs. of common (par $5)
additional number determinable only after the

an

Dillon, Read & Co. Inc., White, Weld & Co., and Shields
Co. (jointly), and W. C. Langley & Co. and The
First Boston Corp. (jointly).
Offering—Price to public
by amendment.
&

for

for

a

in

annual

requirements was and still is
regarded as a major objective in the best interests of
the company and its shareholders. We look forward to
the accomplishment of this objective in the near future."
Inc.

Disticraft, Inc., Chicago
May 8 (letter of notification) 15,000 shares Class B com¬
mon.
Price—At market.
All or part of the securitiea
may be sold through Bennett, Spanier & Co., Chicago,
as agent.
The shares are being sold on behalf of three
officers of the company.

(letter of notification) 10,000 shares ($20 par)
Price—$23.25 a share. Underwriting—Cohu &
Torrey, New York. For capital improvements and for
workjng capital.
C.

Corp., Marion,

Ind.

July 30 (letter of notification) 2,500 shares of 5% cumu¬
preferred.
Price—$100 a share.
Underwriter—
Foelber-Patterson, Inc., Fort Wayne, Ind. For additional
working capital.
lative

Atlantic

City

(N. J.)

Electric Co.

Offering is part of American's plan to dispose of its
holdings of 1,150,000 outstanding shares of Atlantic City.
The shares remaining after the public offering will be
as

dividends

on

American's

par)
D. A.

Cress, respectively president and
treasurer, at $1 a share and 1,800

and

No

underwriting.
California

For working

capital. ;^

First Boston Corp.
Merrill Lynch, Pierce,
Ripley & Co. (jointly).

Bids—Bids for the purchase of the securities scheduled
for May 20 and
postponed to June 18 further delayed.
It is reported
company has abandoned sale of preferred
for a construction credit and term loan
of $9,000,000
which the company has
negotiated with a group of banks.

Carscor Porcupine Gold
Minos, Ltd., of Toronto,
Ontario
June 24,

1946, filed 400,000 shares of

writers-No
a

underwriters.

Offering

share in Canadian funds.

Under¬

common.

To

—

the public at

Proceeds—For

variety
purposes in connection with
exploration, sinking of
shafts, diamond drilling and working capital.
Central Soya Co., Inc.,

of $26 a share. Underwriters —
California, Cruttenden & Co., Pacific
Capital Corp., all of Los Angeles; Brush Slocumb & CO.,
San Francisco; and Adele W. Parker,' Clearwater. TO
purchase 493 shares of capital stock of G. H. Cherry,
Inc. out of a total of 625 such shares presently outstand¬
ing. [Revised letter filed on Aug. 6.]

and

Proceeds—Working capital, etc. Offering indefin¬

itely postponed.

(letter of notification) 62,500 shares of capital
stock of which 34,000 shares will be offered
pyblicly at
$1 a share and the balance of 28,500 shares will be issued
No

consideration of promotion services to

underwriting.

For

debt

retirement

the company.
and expansion

purposes.

Drackett,

7,371

Bids—Bids for the purchase of the stock submitted
July
22.were rejected. A joint bid by The First Boston

•

Shields & Co.; Drexel & Co., and White, Weld & Co. of

(Kan.)

Development

Price

By

—
-

•

Duquesne Light Co., Pittsburgh, Pa.
Aug. 1 filed $75,000,000 30-year first mortgage bonds.
Underwriting—To be determined by competitive bid¬
ding.
Probable bidders include: Kuhn, Loeb & Co. and
Smith, Barney & Co. (jointly); Halsey, Stuart & Co. Inc.;
The First Boston Corp.
Proceeds—To redeem $70,000,000 of first mortgage 3%% bonds at 103V4.
The balance
will be added to general funds to pay part of the cost
of

construction.

new

*

Duraloy Co., Scottdale,
March 12

Pa.

(letter of notification) 25,000 shares

Co.,

($1 par)

^

behalf of the issuer, 12,500 shares ($1 par)
for the account of Thomas R. Heyward, Jr.,

on

and

12,500 shares ($1 par) common for the account of
Thomas R. Hay ward, Jr.
Price—At market (ap¬
proximately $3.25 per share).
Underwriter—Johnson
Mrs.

& Johson, Pittsburgh, Pa., and The
Corp., Cleveland.
The company will
for working capital.

First
use

its

Cleveland
proceed*

Mar. 28 filed 60,000 shares of $10 par common.
writers—To be determined

able bidders include

Inc.,

Under¬

by competitive biding. Prob¬

Harris, Hall &

Co.

(Inc.); Otis &

Co.; Kidder, Peabody & Co. The stock is being offered
by East Coast Public Service Co., parent. Bids for pur¬

July 31

Cherryvaie

shares).

-

chase of the stock scheduled for

stock.

common

M.

East Coast Electric Co.

Chemical Plant Foods, Inc.,
Monrovia, Calif.

July 25

in

Charles

amendment.

common

share for each 7% shares held.
Unsubscribed
sold to underwriters.
Price by amend¬

one

Co., Cincinnati

April 28 filed 14,300 ($1 par) common shares. Under¬
writer—Van Alstyne, Noel & Co. Proceeds—Stock i*
being sold by Harry R. Drackett, President (6,929 shares)

common

Fort Wayno, Ind.

shares will be

ment.

of

a

Aug. 21, 1946, filed 90,000 shares (no par) common.
Underwriter—None. Offering—Shares
initially will be
offered for subscription to
common
stockholders at
rate of

(8/12)

maximum

a

Co.

Drackett

Probable bidders include:

and Blyth & Co. Inc.
(jointly);
Fenner & Beane and
Harriman,

at

Pacific

Oregon Power Co.

March 26 filed 60,000 shares
($100 par) cumulative pre¬
ferred. Underwriters—To be determined
by competitive

bidding.

Douglas Oil Co. of California

fered

($1

shares will be offered to key
employees at $1.50 a share.

•

March 19 filed 522,416 shares ($10 par) common,
being
offered by American Gas & Electric Co. Underwriters—
To be determined by competitive bidding.
Proceeds—

distributed

51,800 shares

Detroit

March 13 (letter of notification) 11,500 shares ($25 par)
5%% cumulative convertible first preferred. To be of¬

Steel Products Corp.

of notification)

/

April 30 filed 34,963 shares ($1 par) common. Under¬
writers—Reynolds & Co. and Laurence M. Marks & Gk»
both of New York. Price—By amendment. Proceed*—
Shares are being sold by a stockholder. Twin Coach Co^
Kent, O., which will receive all proceeds.

of

common.

S.

(Mich.)

(letter

vice-president

$1

(8/25-29)

July 22

A.

Buchanan

Indefinitely postponed.

Detroit

Proceeds—To redeem outstanding mortgage bonds, series
"F," due 1965, to repay bank loans, and for property
additions.

Harriman Ripley & Co. bid 100.779

4.40% dividend.

common, of which 50,000 shares are to be sold to
Donahue and Elmer W.

dividend

Arnold, Hoffman & Co.,

4.30% dividend.

a

July 28

July 12, 1946, filed 350,000 shares (no par) cumul. first
preference stock, Series A; 300,000 shares of convertible
second preference stock, Series A, and 1,355,240 shares
common stock (par $5).
Underwriting—Kuhn, Loeb &
Co., New York. George Eastwood, President, in letter
to stockholders, Dec.
22, said: "We have come to the con¬
clusion it will not be necessary to issue any additional
shares of common stock" as part of company's refinanc¬
ing plan. In connection with the sale privately of $35,000,000 3%%
debentures
announced
July 17,
1947,
George A. Eastwood stated: "The debenture sale permits
immediate accomplishment of some of the objective of
the refinancing plan which the directors and
manage¬
ment contemplated nearly a year ago when the share¬
holders at a special meeting authorized the issuance of
two new classes of preferred stock.
These new stocks
were designed to
carry a lower rate of dividend than
the present preferred stocks and the consequent reduc¬

Co.

May 3, 1946 filed 70,000 shares of cumu. preferred stock
($100 par). Underwriters—To be filed by amendment.
Bids Rejected—Company July 23,
1946, rejected two
bids received for the stock.
Blyth & Co., Inc., and F. S.
Moseley & Co. and associates submitted a bid of 100.06

•

Armour and Co., Chicago

Union Gas

Price Of

First Boston Corp.; Halsey, Stuart & Co.
Inc.; Coffin &
Burr; Spencer Trask & Co.; Dillon, Read & Co. Inc.

Divco Corp.,

(N. Y.)

Offering
Co.,

common.

Joseph Levy, President^
date indefinite.

refunding mortgage
bonds, series "I," due 1982. Underwriting—To be deter¬
mined by competitive bidding. Probable bidders:
The

Mo.

cent cumulative, convertible preferred and
50,006
shares (10c par) common.
Price—$5 per unit, consisting
of one share of each.
Underwriter—White and Co.. St.
Louis, Mo. For expansion of operating facilities and for

Brooklyn

results of competitive bidding are known. Underwriters
—To be filed by amendment. Probable bidders include

•

Inc.,

stockholders.

to

June 27 filed $60,000,000 of general

working capital.

March 30,

tion

Service,

(letter of notification)* 50,000 shares ($1 par)

27%

American Water Works Co., Inc., N. Y.

plus

Flying

Proceeds—Go

Detroit Edison

June 30 filed 145,000 shares
ment.

Proceeds—To pay off indebtedness and to finance

expansion of business.

amendment.

New York

Chicago

July 25 filed $800,000 10-year first mortgage 4%% sink¬
ing fund bonds.
Underwriters — Illinois Securities Co.,
Joliet, 111., and Mullaney, Ross & Co., Chicago.
Price-

$3,000,000 15-year sinking fund debentures,
1962, with non-detachable subscription warrants for

due

Albee
!

ISSUE

per share and a joint bid by Dillon, Read & Co.
Inc., and Smith, Barney & Co. of $16.30 per share were

Barium Steel Corp.,
June 17 filed

1946, filed (by amendment June 23, 1947)
33,333 shares ($1 par) common stock.
UnderwriterDillon, Read & Co. Inc., New York. Offering—A maxi-,
mum of 30,000 shares may be sold by company to per¬
sons, firms, or corporations with whom the corporation
had network affiliation agreements on March 31, 1946.
June

Registration

INDICATES ADDITIONS SINCE PREVIOUS

shares and four selling stockholders

the

in

$17.68

123,246 shares ($1 par) common stock.
Underwriters—Herrick, Waddell & Co., Inc., and First
filed

26

June

Now

37

(553)

poned

May 19 has been post¬

indefinitely.

Cherryvale, Kans.

Corp.;

(Continued

(letter of notification) 2,400 shares of class A
Price—$25 a share. : No underwriting.
For
factory site and construction of building.

on page

38)

common.

I'

Claude

Corporate and Public Financing

Neon,

Inc., New York

March 28 filed 226,454 shares ($1 par) common. Under¬
writing—None.
Offering—Shares will be offered for

subscription to

common

share

10

for

each

Proceeds—Towards

stockholders

shares

cost

held.
of

on

one

Price by

additional

amendment.
interests in oil

of

Corporate and Municipal
Securities

leases.

The

Cohart Refractories Co., Louisville,

FIRST BOSTON
CORPORATION
Boston

basis of

Underwriters and Distributors

New York

Chicago and other cities




Ky.

Mar. 28 filed 182,520 shares ($5 par) common.
Under¬
writers—Harriman Ripley & Co., and Lazard Freres &

Kidder, Peabody W Co.
Founded 1865

Co., both of New York.

Pittsburgh

Price by amendment. Proceeds
—The shares are being sold by Corning Glass Works,
New York, and represent 88.8% of the total outstanding
common

poned.

of

the

company.

Offering

indefinitely post¬

Members
New York

of the New York and Boston Stock Exchanges '**
.

Boston

Philadelphia

Chicago

R/*

-

38

THE COMMERCIAL & FINANCIAL CHRONICLE

(554)

General

Cement Co., Chicago
July 29 filed 100,000 shares ($1 par) common.
Under¬
writer
Lazard Freres & Co., New York.
Price by
amendment.
Proceeds—Shares are being sold by stock¬

NEW ISSUE CALENDAR

Illinois

Central

RR

Aug. 28, 1946, filed 355,000 shs. ($1 par) common, of
which 55,000 shs. are reserved for issuance upon the
exercise of stock purchase warrants. Underwriter—Van
Aistyne, Noei & Co.
Ottering—The 300,000 snares are
issued and outstanding and being sold for the account
of certain stockholders.
Company has also Issued 55,000
stock purchase warrants to the selling stockholders at
10 cents a share entitling them to purchase up to Aug. 1,
1949, common stock of the company at $11 a share. Price
bj amendment. Offering temporarily postponed.

Equip. Tr. Ctfs.

Shackleton Piano Co

--Preferred

Vacu-Top Jars, Inc

Common

1947

August 8,
Quaker Products Co

Common

.

August 11, 1947
Jahn & Oilier Engraving Co

Common

•

August 12, 1947
Grammes (L. F.) & Sons Inc.,

Hajoca Corp.
Corp

common.

-Preferred

__

August 13, 1947

•

Goss

Potomac Electric Power Co.
11:30 a.m.

Preferred

August 15, 1947
Conditional Sales Agreement

•

Grammes

August 18, 1347

:

Common
(EDT)—Equip. Tr. Ctfs.

August 22,
Consumers Power

Worth

C.,

Grolier

1947

•

Seattle,

(L. F.)

Common
Common

Laughlin, MacAfee & Co., Pittsburgh.

loans.

standing

San Francisco Bank

common.

Proceeds—For

reduction

of

(Continued from page 37)

Lehman Brothers and Lazard Freres Co.

(jointly) toward
underwriting the stock. Offering—Preferred stock ini¬
tially will be offered in exchange for outstanding ($100

par) 6% preferred and ($50 par) junior preferred. The
basis of exchange will be one share of new preferred
for each share of 6% preferred and one share of new
preferred for each two shares of junior preferred. Shares
of new preferred not issued in exchange will be sold at

f

None.

31,1946, filed 5,000 shares ($100 par) 5% non-cumul.
preferred. Underwriters—None. Offering—To be offered
at par to customers, officers and employees of the com¬
pany. Proceeds — For corporated purposes including:
modernization and improvement of the manufacturing

>

plant and machinery and eouinment

Empire Projector Corp., New York
July 1 (letter of notification) 20,000 shares ($10 par)
4%% cumulative convertible preferred and 20,000 shares
($1 par) common.
Price
$10 a preferred share and
$1,315 a common share.
Underwriter—Philip L. Pritch—

shares.

Price—$100

preferred share.

No underwriting.

One

.

share of

Frank E.

Newark, N. J.

150,000 shares ($1 par) common class A.
F. Gillespie & Co.,
Inc., New York.
a
share.
The registration states princi¬

will

Wm.

be

in

Sons

exchange

for

Co.; Abraham

New

Inc.; Bloomingdale Bros., Inc., and the F. and
Co., all subsidiaries of Federated. In

and

registration covered 482,174 shares of

offering by 18 stockholders;

sold from time to time at the market
Stock

Exchange.

Business—Holding

Florida Power & Light Co.,

on

a

ing capital.
Illinois Powsr Co., Docatur, III.

-

July 29.. A negotiated sale is

now

possible.
•

Florida Ramie Products, Inc., N. Y.

Aug.

1

class A

(letter of notification)
common.

Price—$3

a

100,000

share.

equipment, to

to add to

pay

off

working capital.




some

($1 par)

Underwriter—Bat-

kin, Jacobs & Co., New York. To purchase
and

(8/25)

shares

new

machines

current liabilities and

Plant-Choate

Cedar Rapids,

•

■

Inc.*

*

loans.

(H. W.)

-

& Co., Inc., Atlanta

,

16,000 shares ($50 par) 5% cumulative
convertible preferred and 15,000 shares ($1 par) com¬
mon.
Underwriter—Clement A. * Evans & Co.,' Inc.,
Atlanta.
Offering—All but 3,000 shares of the common
will be sold publicly at $6.50 a share. The preferred will
be offered to the public at $50 a share.
The 3.000 ^ shares
of common not sold publicly will be offered to company
officers and employees at $5 each.
Proceeds—For con¬
struction of new plants at Atlanta and Memphis, Tenn.
Offering indefinitely postponed.

Legend Gold Mines,

Ltd., Toronto, Canada

June 27 filed 300,000 shares ($1 par) common treasury
stock.
Underwriting — To be supplied by amendment.
Price—50 cents a share. Proceeds—To develop-mining

properties. Business—Mining.

July 31
common.

Li

Faico
N.

.

'"

,

•

•

Manufacturing £o., Inc.,

!
Little Falls,

Y.

(letter
.

To

of-notification)

be

sold

at

5,000^shares

market.

($2 par)

^Underwriter—JBirn-

Shares being sold on behalf,of
of preferred will be used to reimburse the com- r
■
pany's treasury for construction expenditures. Net pro¬
ceeds from: the sale of common will be applied for re- \
Libby, McNeill & Libby
i>
demption of 5% cumulative convertible preferred stock J1
not converted into common - prior to the redemption ' April .30 filed
169,001) shares (no par) preferred stock.
date.
The balance will be added to treasury funds.
Underwriter — Glore, Forgan & Co. Offering —✓ Stock¬
holders will be given the right to subscribe to the hew
Company has asked the SEC to defer action on its fi¬
nancing program because of present market conditions, i» stock at the rate of one share of preferred for each 36
shares of common owned.
Proceeds—The money will fee
lllinois-Rockford Corp., Chicago
used to complete a plant at. Sunnyvale, Calif., and for
other corporate purposes.
July 24 filed 120,000 shares ($1 par) common.. UnderOffering temporarily post¬
writers—Brailsford & Co., and Straus & Blosser, Chicago.
poned,
Price—$9.25 a share.
Proceeds—The shares are being
Manhattan Coil Corp., Atlanta, Gn<
sold by four stockholders and represent part of the stock
the sellers will receive in exchange for their holdings
May 20 filed $500,000 5% serial debentures, due 1949of four furniture
companies to be merged with the regis¬
1957; 12,000 shares ($25 par) 5V2% cumulative converti¬
trant. The merging companies are Toccoa Manufacturing
ble preferred and 85,000 shares ($1 par) common.
Uh-i
Co. and Stickley
derwriter—Kirchofer & Arnold, Inc., Raleigh, N. C. Price
Brothers, Inc., both Illinois corpo¬
rations, and the Luce Corp. and Stickley Bros. Institu¬
—The debentures at 102.507, while the preferred shares
tional Furniture
will be offered at par and the common shares at $4
Co., both Michigan corporations.
sale

'

Manufacturing Co.,
Iowa

April 18 filed

4

Proceeds—Net proceeds from the

'

^

April 30 filed 60,000 shares ($25 par) 5% cumul.' con¬
vertible preferred. Underwriter—Paul H. Davis & Co.,
Chicago. Price—$25 per share. Proceeds—To be added
to working capital and will be used in part to reduce

W. E. Hutton & Co.

•

was

on

La

Underwriters—By competitive bidding. Probable bid¬
Blyth & Co., Inc.; The First Boston Corp.;

June 24 filed 150,000 shares of
$100 par cumulative pre-ferred. Underwriters—Names to be filed
by amendment.
Bids—No bids submitted for purchase of stock
which

advertized for sale

LaCroase Telephone Corp., Chicago ;

ders include

company.
*

»

July 22 (letter of notification) 10,693>shares of common
stock (par $10). , Price—$12 a share.
Stockholders of
record July 3 given right to subscribe in ratio of one
new for each 4 shares held.
Rights expire Aug. 15. For
property additions and replacements.
'
* •
?

June 17, 1946 filed 200,000 shares ($50 par) cumu. pre¬
ferred stock and 966,870 shares (no par) common stock.

the New York

Miami, Fla.

re¬

To be offered through officers and
stockholders. For reduction of liabilities and for work¬

ten¬

These may be

J/

(Letter of notification) 60,000 shares ($1 par)
Price—$5 a share. Underwriter—H. P. Carver
Corp., Boston.
To retire debt and for working capital.

shares of common.'

Straus,

for

Proceeds—To

•
Huletts Landing Corp., Washington County, N. Y.
Aug. 1 (letter of notification) $34,000 of 3% debentures,
due 1967, and 1,700 shares (100 par) common.
Price—
$502.50 per unit, consisting of one debenture and 25

R. Lazarus

common

Price—By amendment.

Offering indefinitely postponed.

addition, the

tative public

York.

deem outstanding shares of $4.25 cumulative no par
pre¬
ferred at $104 a share and for construction expenditures.

common

&

-

July 22

Lay

26 filed

Offering—Of the total 102,-

offered

Filene's

_

Koch Chemical Co., Winona, Minn.

Co.

110,000 shares (no par) cumulative pre¬
ferred, series A. Underwriting—Smith, Barney & Co.,

Department Stores, Inc., Cincinnati
July 31 filed 584,554 shares (no par) common.
Under¬
writing—No underwriting.

'

•

,

current bank

Electrochemical

June

Federated

of

Company's fiscal agent is
For drilling an

O'Connell, of Holbrook, Ariz.

Hooker

Price—$7.25
pal stockholder has granted the underwriters an option
to purchase 45,000 shares of class B
($1 par) common
at $7.25 a
share, exercisable for a period of three years.
Proceeds—Proceeds of approximately
$870,000, together
with $755,000 of other
bonds, will be used to repay the
balance of $34,000 of a
property mortgage, to pay off
loans in the amount of
$1,295,000 to Bankers Commer¬
cial Corp., New
York, and for additional working capital.

shares

No underwriting.

oil well.

Underwriter—E.

380

March 14 filed 270,000 shares of capital stock. Under¬
writer—Strauss Bros., Inc., New York. Underwriters may

associates.

To organize life insur¬

Federal Electric Products
Co.,

shares of old preferred. Bids—Bids for purchase of stock
advertised for July 14 postponed.
/
*-■ w
\

common.

issued to A. G. Hogue, President of the company, and his

company.

stocks

Un¬

e
Hogue Arizona Petroleum Inc., Holbrook, Ariz.
Aug. 1 (letter of notification) 300,000 shares ($1 par)
capital stock, of which 150,000 shares will be sold public¬
ly at $1 a share and the remaining 150,000 shares will be

will be issued with each purchase of two shares

•

Hammond Instrument Co., Chicago
July 16 -(letter of notification) $100,000 of ($1 par) com¬
mon, being sold by Laurens Hammond, President of the

as such. Price—$3.50 a share. Proceeds—Net
proceeds will be used to pay obligations, purchase heli¬
copters and equipment and for working capital.
'

($100 par) 5% cumulative preferred and 1,500
(no par) common which will be used as bonus

common

competitive bidding.
Proceeds—Proceeds from the sale
of new preferred will be used to redeem unexchanged

Rights expire Oct. 1,

withdraw

(letter of notification) Thomas A. LaFollette,
Seattle, Wash., on behalf of the Family Underwriters
Corp., a new company which he is organizing filed 3,000

Feb. 26, filed

for each 10 shares held.

Proceeds for construction program.

Holicoptar Air Transport, Inc., Camden, N. J.
.

>

July 29

of preferred.

one new

1947.

Prices to be determined at time of sale.
derwriting—Paul H. Davis & Co., Chicago.

For working capital.

ance

of

company.

Family Underwriters Corp., Seattle, Wash.

a

Holders of common stock of record Aug. 18 will
given the right to subscribe for the stock in the ratio

be

Dec.

Working capital.

Kentucky Utilities Co., Lexington, Ky.
May 9 filed 130,000 shares ($100 par) cumulative pre¬
ferred.
Underwriters—To be determined by competitive
bidding. It was announced July 25 that the company has
instituted conversations with The First Boston. Cprp.,

bank

•
Hajoca Corp., Philadelphia (8/25)
Aug. 4 (letter of notification) 6,987 shares of common
stock (par $1).
Price—$35 per share. Underwriting—

Edelbrew Brewery, Inc., Brooklyn, N. Y.

shares

Iowa

4
Jeanefte (Pa.) Glass Co.
Aug. 4 (letter of notification) 420 shares of 7% cumula¬
tive preferred stock.
Price—$105.
Underwriter—Mc¬

Noyes & Co. Offering—Underwriters will purchase from
the company 70,000 shares and from Fred P.
Murphy
and J. C. Graham, Jr., 100,000 shares of issued and out¬

August 27, 1947

shares

Dubuque,

Engraving Co. (8/11)
26, filed 102,000 shares ($1 par) common. Under¬
writer—Sills, Minton & Co., Inc., Chicago. Price—By
amendment. Proceeds—The shares, which constitute ap¬
proximately 48.5% of company's outstanding common
stock, are being sold to stockholders.
\

Society,

Bonds

—

Arnold, Hoffman & Co., Inc.
Products, Inc

•

Co.,

Jahn & Oilier

& Sons, Inc., Allentown, Pa.

Common

Co

Florida-Ramie

ard.

Power

May 13 filed $19,400,000 of first mortgage bonds, due
1977, and 3,000,000 shares ($3.50 par) capital stock.
Underwriters—To be determined by competitive bid¬
ding.
Probable bidders:
Lehman Brothers, Goldman,
Sachs & Co.
and The First Boston Corp.
(jointly);
Halsey, Stuart & Co. Inc. (bond only); Harriman Ripley
& Co., and Dillon, Read & Co. Inc. (stock only).
Pro¬
ceeds—For debt retirement, finance new construction
and for working capital.

Feb.

Inc., New York
April 2, 1947 (by amendment) 170,000 shares of $1 par
common stock. Underwriters—Riter & Co. and
Hemphill,

August 25, 1947

~

v,

Interstate

1,000 shares ($25 par)
No underwriting.
For

and

Springs,

(letter of notification) 200,000 shares ($1 par)
class A common.
Price—500 a share. Underwriters not
named.
For reopening of mine.

Aug. 4 (letter of notification) 5,811 shares (no par) $1.50
cumulative preferred. Price—$25 per share. Underwriter
—Warren W. York & Co., Inc., Allentown, Pa. Working
capital.

Common

August 19, 1947
Co. Noon

M.)

International Production Co., El Dorado
Mo.

(8/12)

Acme Electric Corp

Southern Pacific

P.

share.

Hills

July 30

July 25 (letter of notification) 300,000 shares of capital
stock.
Offering price not stated. No underwriting. For
organization and operation of business.

Chicago, Burlington & Quincy

Plywood, Inc.

(Oliver

a

Beverly

Wash.

(EDT)

Railroad

•

Valley Cooperative Assoc., Omaha, Neb.

(letter of notification)

Price—$25
working capital.

Common

U. S. Television Mfg.

Golden

July 29

Preferred

Co.,

through Bennett & Co., Hollywood. To purchase equip¬
ment, liquidate indebtedness, and for working capital.

Qlensder Textile Corp., New York

Delaware, Lackawanna & Western RR.
Noon (EDT)
__Equip. Tr. Ctfs.

Gasoline

capital stock.
Price—$1 a share. To be offered to stock¬
holders.
Unsubscribed
shares to be offered publicly

holders.

1947

August 7,

Inglewood

July 7 (letter of notification) 100,414.8 shares ($1 par)

—

(Showing probable date of offering)

Thursday, August 7,1947

Portland

baum & Co., New York.
two stockholders.

,

Volume 166

Number 4618

THE COMMERCIAL & FINANCIAL
*

each.

Proceeds—To

finance

retire

bank

indebtedness

and

•

'

CHRONICLE
'

-

(555)

'

Chilkoot Co., Port Chilkoot, Alaska
(letter of notification) 4,000 shares ($25 par)
and 8,000 shares ($25 par) preferred.
To be
sold at par.
A total of 1,300 shares of common and 600
shares of preferred will be issued in return for services
rendered in promotion and organization of company.
No
underwriting. For exploitation of property iq Alaska.

to

purchase of machinery and other plant equip¬

Port

4%%

mand

common

Manontqueb

Explorations,

Ltd.,

April 10 filed 300,000 shares ($1 par)
writer—F.

H.

Winter

Proceeds—For

claims.

&

Co.

Toronto,

Price—40

cents

Can.

Under¬

common.
a

share.

exploration and development of mining

Potomac

Business—Mining.

Electric

Power Co.

ation

in Rochester.
Bids—No bids submitted
chase of the stock when advertised
Aug. 5.

(J. W.)

Feb. 28 filed

Inc., Brooklyn, N. Y.

to

($1 par) common. Under¬
writer—Burr & Co., Inc., New York. Price
by amend¬
ment. Proceeds—Of the total, 100,000 shares are
being
sold by seven stockholders. The remaining 50,000 shares
are being sold by the
company, which will use its pro¬
ceeds for general corporate purposes.
McPhail

cumulative

mined

150,000 shares

dividends.
Underwriting—To be deter¬
by competitive bidding.
Probable bidders in¬

stock will be issued for the purpose of
the old preferred at a lower dividend rate.
new

ceeds

will

be

used

to

make

the

,•

.

r

-

•

\

:

'

being sold by

'

common.

To be sold at market.

•

Morris Plan Corp. of America, N. Y.
Mar. 31 filed $3,000,000 debentures.

Pa.

■

Price

Cadmium
Mass.

June 2

Battery

Corp.,

(letter of notification)

proceeds—To be added

to general funds for
general cor-

porate purposes.

No

and 150,000 warrants.

$.0006%

Price—$1

per warrant.

Inc., New York, which
a

share

Underwriter—C. K. Pistell &
Co.,

will receive

a

discount of 20 cents

common and who will
purchase the war¬
total price of $100.
For drilling three wells

in Jackson
County, Tex., and for
development of properties.
•

a

the.

on

rants for

common

per common share and

Northeast

new

benture

Price

100.

—

No

business expansion.

underwriting.

For

Nortluvest Casualty Co.,
Seattle, Wash.
July 31 (letter of notification) 30,000 shares
($10 par)
6% cumulative preferred.
Price—$10 a share.
No un¬

•

For general corporate purposes.

O'Harra Bus

July 31
common.

Price—$1.15

share

a

250,000 shares

($1 par)

235.000 shares and $1
a share on
15,000 shares already sold. To be sold
through
pfficers of the company.
For operation of business.

Old
Mar.

31

Distillery,

filed

shares

50,000

cumulative preferred and
>

par)

common

>

tible.

on

Poindexter

an

Inc., Louisville, Ky.

($20

par) 5% convertible
unspecified number of ($1

shares into which the preferred is
converS. Yantis &
Co., and H. M.

Underwriters—F.

Byllesby & Co., both of Chicago. Price—At par.
To be added to
working capital.
Offering
.

postponed.
..

Oneida, Ltd.,

i

'

Oneida,

N.

Proceeds

indefinitely

Y.

May 27 (letter of notification) 20,500 shares
($12.50 par)
common.

Price—$12.50

a

share.

Offered at par to
common, stockholders of record June 13 at
rate of one
new share for each 10 shares
held. Rights expire Aug. 13.
./No underwriting. For additional

working capital.

.

J

Plywood Inc., Detroit (8/19)

'

July }8 filed $500,000 5% sinking fund
debentures, due
1967, and 200 000 shares ($1 par) common.
Underwriter
—P. W. Brooks &

,

Co., Inc., New York, is principal unand Baker, Simonds &
Co.,
Detroit, is principal underwriter for the common.
Price
derwriter

for

debentures

—Debentures will be sold at
par with a 9% discount to
underwriter while common will be sold
at $2 a share
with a discount of 30 cents a share
to the underwriters.
Proceeds—To purchase all the
outstanding stock of Kal-

pine Plywood

.

Co., Klamath Falls, Ore., and to retire
bank indebtedness and for
working capital. Stock offering scheduled for Aug. 19. Bonds later.




•

Missoula,

Mont.

of

a

Co., Boston, will be under¬
remaining 120 shares will
For working capital and
organiza¬

shares.

The

(letter

of

notification)

Co.

2,500

shares

(no

par)

common.

Price—$10 a share.
No underwriting.
Fo •
purchase of materials and to
pay for labor to manufac¬
ture chains.
•

Schweser's

(Geo.)

Sons, Inc., Fremont, Neb.

1,000 shares ($100 par)
6% cumulative preferred.
Price—$100 a share. No un*
derwriting. For working capital.
Service Caster & Truck
Corp., Albion, Mich.

April 10 filed 32,000 shares ($25 par) $1.40 convertible
preferred and 53,962 shares ($1 par) common.
Under

writer—Smith, Burris & Co., Chicago. Price—$25
ferred share and $10

100%

The sale of stock

•

cooperative

operating

of fresh

fruit

separate
vegetables

a

and

Underwriter—Robert

B.

Lake

common

share.

Soden,

Montreal,

director oi
Proceeds—For explora¬

Mines,

Ltd.,

Toronto,

:•

Shackleton

Piano Co., Louisville, Ky. (8/7)
July 29 (letter of notification) 10,000 shares ($10 par)
5% preferred.
Price—$10.50 a share.
Underwriters
Urban J. Alexander
Co.; Almstedt Bros.; Bankers Bond
Co., all of Louisville.
For additional working capital.
.t>«

•

•

'•■■■".

.

'

11

„

-

Feb. 3 filed 25,000 shares
($190 par) 6% cumulative pre¬
ferred and 25,000 shares (no
par) common. Underwriter
—John Martin
Rolph, Vice-President and director

,

*

-b

-

share

one

($10 par)

6% cumulative preferred and

share ($1 par) common.

Price—$12.50

one

Under¬
writer—Southeastern Securities Corp., Jacksonville. For
working capital.
Sta-Kleen Bakery,

July 18
mon

per

unit.

Inc., Lynchburg, Va.

(letter of notification)

of which 45,500 will be

100,000 shares of com¬
exchanged for outstanding

common, 45,450 shares will be issued as a stock dividend,
9,090 will be sold to existing stockholders at $10 a share

and 10 shares will be sold to underwriters at
$10 a sharp.

Underwriter—Scott, Horner & Mason, Inc., Lynchburg,
Va.

For expansion of plants and for equipment.

•

Standard Milling Co.,

July

(letter

29

of

porate

Chicago

notification)

6,000 shares ($1 par)
Underwriter—Stone
:
Corp., New York. For general cor¬

To be sold at market.

common.

Webster Securities

Republic Pictures Corp.. New York
Registration originally filed July
31, 1946, covered 184,823

.j,;

July 29 (letter of notification) 8,000 units consisting of

of

company.
Price—The stocks will be sold at
$105 per
unit consisting of one share of
preferred and one share
of common.
Proceeds—To be used in
organization of

..

Southeastern Development Corp.,
Jacksonville,

Can.

Refrigerated Cargoes, Inc., New York

a pre

Proceeds—Pro

Fla.

company.
Price—500 a share.
tion and development of
mining property.

Red

a

ceeds, together with funds to be provided by a term bam
loan, will be used to discharge indebtedness to Domesti<
Credit Corp.

plan.

Quebec Gold Rocks Exploration Ltd., Montreal
Nov. 13, 1946, filed
100,000 shs. (500 par) capital stock.

Raleigh

and

July 28 (letter of notification)

connection with the

Formation

1,420 shares ($50 par)
preferred.
Price—$50 a share.

convertible

Schenectady (N. Y.) Chain

July 29

business.

Lines, Inc., Anchorage, Alaska

(letter of notification)

f

(letter of notification)

tion expenses.

Quaker Products Co., Philadelphia (8/8)
.Aug.i 1 (letter of notification) 2,000 shares of common
stock
(par $100). ^Price—$100.
Underwriting—None.

A de¬

•

derwriting.

Paul R.

June 9 filed 460,000 shares of stock.
Underwriter—Mark
Daniels & Co., Toronto.
Price—25 cents a share.
Pro¬
ceeds—To finance diamond
drilling and land surveys.

Finance

bonds.

—

For mine explora¬

•

acquisitions and

Corp., Boston
July 31 (letter of notification) $100,000 of Series

Underwriter

28

is in

25

not be underwritten.

underwriting—J. W; Abbott, President of
charge of all sales. For development of

company for distribution
and frozen products.

t

•

Norartda Oil Corp., Perth
Amboy, N. J.
July 28 (letter of notification) 299,000 shares of

share.

plan approved by the SEC last June.

Easthampton,

($10 par)
cumulative convertible
preferred. - Price—$10 a
share.
Underwriter—Harrison White, Inc., New York,

a

Ltd., Toronto, Canada

Business—Mining.

writer for 1,300

($1 par)

shares and terms of offering will be determined
by New
England as soon as the U. S. District Court of Maine
issues an order enforcing its
corporate simplification

30,000 shares

6%

$1

100,000 shares

filed 565,553 common shares (par
$10), now
by New England Public Service Co. Underwriters
Names by amendment. Probable bidders include: The
First Boston Corp.;
Kidder, Peabody & Co.; Blyth & Co.,
Inc.; Harriman Ripley & Co. Offering—The number of

as

Maria Mines,

cumulative

owned

Unsubscribed shares will be

Nickel

Santa

June

Seattle,

Public Service Co. of New
Hampshire

July

through

4

Inc.,

Salant, Inc., New York

Sanitary Products Corp., Taneytown, Md.

mining claims.

Pittsburgh,

offered public¬
the underwriters.
Price
by amendment,
Proceeds—To be added to cash funds for
investment in
securities.
Business—Insurance business.

ly

•—

Princeton Mining Co.,

salesman.

Aug.-5 filed 180,000 shares ($5 par) capital stock.
Un¬
derwriter—The First Boston Corp., New York.
Offer¬
ing—Shares initially will be offered to stockholders at
rate, of nine shares for each 11 shares held of
record
of Aug. 25.

working

filed

Underwriter—Jackson

company, is in

National Union Fire Insurance Co. of

i

Co.,

28

poses.

July 29 (letter of notification) 451,625 shares of capital
stock, of which 400,000 shares will be offered publicly at
100 a share; balance will be used to compensate the

Underwriter—East-*

man, Dillon & Co., New York. Price by amendment.
Proceeds—To retire outstanding bank loans.
•

Milling

Blomberg, President of the company.
tion and development.

behalf of Merle E. Morton, President of the

No underwriting.

company.

Priestly Mining &

July 29 (letter of notification)

July 30 (letter of notification) 200,000 shares (10<S par)
on

for

and

Aug. 4 filed 250,000 shares ($1
par) capital stock.
Un¬
derwriter—Mark Daniel, Toronto.
Price—50 cents a
share (Canadian
funds). Proceeds—For corporate pur¬

Cash pro¬

I

Morton Oil Co., Casper, Wyo.

common

notes

proceeds.

•

Wash.

'

bank

240,000 shares ($2 par) capital stock.
Dillon & Co., New York.
Price
by amendment. Proceeds—Shares are
being sold by 13
stockholders who will receive

refinancing

•

equipment and for
is

of

Underwriter—Eastman,

cash

working capital.

,

March

chase of stock will be received
up to 11:30 a.m. (EDT)
August 13 at Room 1901, 60 Broadway, New York.

stock

retirement

Salant &

adjustments and
to repay
temporary bank loans made for the purpose of
redeeming old preferred shares.
Bids—Bids for pur¬

—

common

For

capital.

preferred for each old preferred share, plus cash adjust¬
ments. Shares of new preferred not issued in the ex¬
change will be sold to underwriters.
Proceeds—The

ceive proceeds from the sale of preferred
only and will
use it to pay off bank
loans, buy new

.■

Pa.

Co.; Kidder, Peabody & Co.; The First
Boston Corp.; Dillon, Read &
Co., Inc. Offering—Stock
will be offered in exchange for
outstanding ,5 %% pre¬
ferred, series of 1927, in the ratio of two shares of new

July 25 filed 100,000 shares ($10 par) 5%% cumulative
convertible preferred and 200,000 shares
($1 par) com¬
mon,.
Underwriters—Brailsford & Co., and
Shillinglaw,
Bolger & Co., Chicago.
Price —,$10 a preferred share
and $6 a common share.
Proceeds
Company will re¬

The

pur¬

clude Drexel &

Candy Corp., Chicago

Russell McPhail, President.

for

Royal Imprints Inc., Lewisburg, Pa.
July 17 (letter of notification) 10,000 shares
($10 par)
5% cumulative participating
preferred.
Price—$10.50 a
share.
Underwriter—S. M. Walter & Co.,
Harrisburg,

(8/13)

July 10 filed 140,000 shares ($50 par) preferred, entitled

Mays

series A first

cumulative preferred, pay off de¬
notes, and for property expansion and conversion
of telephone system from
manual to automatic dial oper¬

July 29

ment.

39

purposes.

Strauss

Fasteners

Inc.,

New

York

•hares of $1 cumulative
convertible preferred ($10 par)
•nd 277.231 shares (50c
par) common stock, with Sterling
Grace & Co. as underwriters.
Company decided to issue
454,465 shares of common stock
only, which were to be
offered for
subscription to stockholders of record

March 25 filed 25,000 shares of 60 cents cumulative con¬
vertible preferred. Underwriter—Floyd D. Cerf Co. Inc.
Chicago.
Offering—The shares initially will be offered
for subscription to common stockholders of

5, 1946, to the extent of one share for each five held.
Issue not to be underwritten.

of

Sept.

& Hardware Co.
one

share

Rochester (N. Y.) Gas & Electric
Corp.
May 26 filed $16,677,000 first mortgage bonds, Series
L,
due 1977, and
50,000 shares ($100 par) preferred stock.
Underwriters—To be determined by competitive
bidding.
Probable bidders:
Halsey, Stuart & Co. Inc.; Blyth & Co.,
Inc.; Glore, Forgan & Co.; Merrill Lynch, Pierce, Fenner
& Beane; Harriman
Ripley; Lehman Brothers; The First |
Boston Corp. and
Smith, Barney & Co. (jointly). Pro¬
ceeds—To redeem all of its
outstanding $7,675,000 bonds
and to repay $3,500,000 bank
loan and to finance new
construction.
Corporation has temporarily abandoned
the proposed
financing, it was announced June 17, due
to

"unacceptable" conditions

sion.

Instead

of New York P. S. Commis¬

company June
to issue unsecured notes.

18

asked

SEC

permission

ferred.

each

Segal Lock
share in the ratio

a

30

held.

working capital.
Textron Inc.,
Feb.

28

Providence, R. I.

filed

300,000 shares ($25 par) 5% convertible
preferred. Underwriters—Blair & Co., Inc., New York
and Maxwell, Marshall & Co., Los
Angeles. Price by
amendment.
bank loan

Proceeds—For payment of $3,950,000 oi
notes; purchase of two notes issued by a.sub¬

sidiary, Textron Southern Inc. in the amount of $1000,000 each, and for working capital. Offering date
indefinite.

Thomascolor Inc., Los Angeles

July 9 filed 1,000,000 shares ($5 par) class A common.
Underwriter—No
underwriting.
Price—$10 a share.
Proceeds—To

purchase

production

facilities

and

for

working capital.
,

United States Television

Mfg. Corp.

(8/12)

June 18 filed 75,000 shares of 5% convertible preferred
stock (par $4). Underwriters—William E. Burnside &

Rochester

(N. Y.) Telephone Corp.
June 4 filed 67,500 shares
($100 par) cumulative

for

shares of Sega
Unsubscribed shares of preferred will bt
offered publicly at $10 a share. Proceeds—For additional
common

Revere Racing
Association, Inc., Boston
July 29 filed 140,000 shares (no par) common.
Under¬
writer—Bonner & Bonner,
Inc., New- York.
Price—$5.75
a share.
Proceeds—The shares are being sold
by stock¬
holders who will receive all net
proceeds.

Inc., parent, at $9

of preferred

pre¬

Underwriting—By competitive bidding. Probable

bidders—Merrill Lynch, Pierce, Fenner & Beane and
Kidder, Peabody & Co. (jointly); Blyth & Co.,
Inc.;
Glore, Forgan & Co.; Shields & Co. Proceeds—To redeem

Co., Inc. and Mercer Hicks & Co. Offering—To be of¬
fered at par.
Proceeds—For general corporate purpose?
as additional working capital.
Registration statement is
expected to become effective this week.

(Continued

on page

40)

„

i

iV.rWi •

VJT. v-..;

>«

i

«•

a,

(Continued from page 39)
^

-

Utilities & Specialty

United

Corp., Boston

10

•

Price—Debentures 98; common $3.75

Proceeds—For plant construction, purchase

Registration

equipment and for working capital.
statement became effective June 28.

Vauze Dufault Mines, Ltd., Toronto,

irriter—Name to be filed by

Canada
Under-

amendment. Price—50 cents

Western

Inc., Buffalo

(9/22)
Aug. 1 company filed with the SEC a statement covering
$25,000,000 30-year first mortgage bonds of a series bear¬
ing interest at a rate not to exceed 2%%. Bonds will be
sold at competitive bidding. Company plans to spend
$100,000,000 through 1949 on improvements and may
s^tart construction of a steam-electric generating plant
qjti Lake Erie in the southeast corner of Michigan- Com¬
expects to advertize for bids Se^t. 12, to

pany

be opened

Morgan Stanley &

Sept. 22/" Probable bidders include:

Co.; Halsey, Stuart & Co. Inc.; Lehman
Weld & Co.; W. C. Langley & Co.

Brothers; White,

(8/15)
Company will receive bids up to noon (CDT) Aug. 15,
at its office, Room 206, 547 West Jackson Blvd., Chicago,
Chicago Burlington & Quincy RR.

•

for the lowest interest rate at which bidders

dither

(a) Not to exceed $2,-

both of the following:

or

will provide

31, 1947,
financing the acquisition of three new 4,000 h.p.

082,300, from time to time, on or before Dec.
for

United States Government,

State, Municipal and

Whitefield

NEW

•

Welsbach

Aug.

4

entirely changed.

shares..-

•'

)

PHILADELPHIA

•

PITTSBURGH

•

Philadelphia

Corp.,

,

& Western RR.

cates

company

•

N. Y. Reserve Bank

now

believed

are

than before

Latin

to

the

be

lower

war.

which during
the war increased its gold and
dollars from $1.1 billions to $3.9
America,

billions,

further

expanded
its
$300 millions in
the first year after V-J Day, but
used up $700 millions in the first

holdings by

seven
war

Latin

some

months of the second post¬

Thus,

year,

American

resources

are

on

gold

still

the

whole,
and dollar

very

SAN FRANCISCO

(8/7)

large in

comparison
with
the
prewar
years, but the shrinkage has been

page

has

to $1,475 millions at

the year end
and subsequently are reported to
have been reduced further, al¬
though more recent figures of
gold holdings have not yet been
made public. The resources of the
leading
sterling-area
countries
(excluding the United Kingdom)
increased from some $600 millions
in August 1939 to $1.4 billions in
March 1947, owing primarily to
the accumulation of gold by the
South African Union.
To

gold and
dollar balances in the aggregate
considerable
in
a
number
of are still somewhat higher than
countries in the area. Argentina's they were in 1939, but this appar¬
gold and dollar reserves declined ent stability covers Widely diver¬
from $1,654 millions at the end of gent changes in the distribution
September 1946 to some $1,200 by areas. Liberated Western Elimillions
in
June
1947; Brazil's rope, which had $5.4 billions in
$800 millions in
August 1946 to $719 millions in
March
1947; and Mexico's gold
and dollar assets from $350 mil¬
lions on V-J Day to about $200
millions at present.
holdings

from

up:

foreign

dollar

assets

Latin

America

March 1947,
compared to $1.1 billion dollars in
August 1939, but some countries
were rapidly depleting their hold¬
ings; and those of the principal
sterling area countries (excluding
the United Kingdom), which were
at $0.6 billions at the
outbreak
of the war, had risen to $1.4 bil¬
were

at $3.5 billions in

,

1947.

.March

in

lions

which
lions

in

only

had

some

December

Canada,

$400 mil¬
1938,
had

nearly $1.5 billions in December
1946, but undoubtedly has con¬

less than

siderably
now.

.

that amount
.7

7..

,

the significance of
the wartime and postwar changes
in foreign gold ;and dollar hold¬
ings, several facts must be kept
in mind.
First, it must be noted
August 4939, had only $2.5 bil¬ that these are only the changes
lions left in March 1947.
On the in
the
official
gold
monetary
other hand, the gold and dollar
stocks ahd
official and private
holdings
of
"neutral"
Europe, dollar balances; they take no ac¬
which amounted to $1.5 billions in
count of the quantities of gold
August 1939, are at present $1 bil¬
lion higher.
The United King¬
dom's
gold
and
official
dollar

In

judging

which have

been hoarded by the

holdings, which were about $2.1

public in many countries. While
it is impossible to give an accu¬
rate
figure
for
gold
hoarded

lions !in December

billions in August .1939 had risen

abroad before the war

to

$1,883 millions

1938, increased

at, the

end of to $2.6 billions at the end of 1946,

1945, but they declined last year but this increase



.V,1

offset

gold and dollar re¬
official
and
private,
which amounted to only $400 mil*
Canadian

sources,

,

sum

not

in official hold¬

present plans

any

Riter &

Clark, Attorney General

Calif. Bids for the shares
of Alien Property Depart¬
ment of Justice, 120 Broadway, New York 5, N. Y., on
or before noon (EDT) on Aug. 27.
\
Southern Pacific Co.

& Hutzler; Harris, Hall & Co. (Inc.).
purchase of the certificates will be re¬
to noon (EDT) Aug. 19 at office of J. A. Simp¬

Bros.

Bids—Bids for

ceived up
son,

City.

There is reason to be¬

several billion dollars,
can

gold held in this way is of
present use to the monetary
authorities of the countries where

over,
no

is

known

that

a

very

and

now,

it

substantial

hoarding has occurred

al¬

Hoarders who have

it is held.

ready declined to turn in their
gold to the authorities are un¬
likely to do so until monetary and
economic stability is restored in

countries or until
plans

their respective

clear-cut and comprehensive

such

sta¬

effectively

car¬

restoration

are

being

of

also to keep in
portion of the
reported holdings of gold and dol¬
lars
is
actually
available
for
meeting balance of payment def¬
It

is necessary
that

only

a

icits,. A large part represents le¬
gal currency reserves which for¬
eign central banks are required

reconstrucion.

American

legislation
or
customary
practice. While the legal reserve
requirements (where they have
not already been
suspended or

could

be

altered,

of

^pay

substantially' reduced)
whether

circumstances
would

balances

short-

and

term securities held

by foreigners
are
owned privately,
and their
utilization therefore depends on

of the foreign
repatriate these funds
or on the
ability of foreign gov¬
ernments to requisition them un¬
der their exchange control pow¬
ers.
In any event, a sizable part
of the dollar funds of the foreign
countries
are
working balances
that have to be kept above a cer¬
tain minimum in order to insdre

the

willingness

owners

to

uninterrupted flow of inter¬
■ Owing to the rise
price level, these
minimum working balances tend

an

in the American

to be

be

in

be

it

such

conducive

the
a

present

procedure
to

restora¬

higher than before
n——i

\the w^ir,
j
|

Wm. W. Brooks Form;

77i|;

Gwn Firm in Boston
(Special to The Financial Chronicle)

tary

doubted

of

one-half

to maintain under existing mone¬

course

orderly
Secondly,
about
the
$5 billions of

tion of confidence and to

national trade.

out.

mind

165 Broadway, New York

Treasurer, Room 2117,
■
V
' '

be said as to its
distribution by countries.
More¬

ried

(8/19)

July 28 the company asked the ICC for authority to
issue $11,400,000 equipment trust certificates, series V,
to be dated Aug. 1, 1947, thq proceeds to be used to
finance new equipment estimated to cost $15,266,286.
Probable bidders include Halsey Stuart & Co. Inc.;

nothing

the

Cali¬

ing capital stock of The San Francisco Bank, 526
fornia Street, San Francisco,
must be presented at office

.

increase in

(8/27)

of the United States,
purchase, as a whole, of 20 shares
of common stock (par $1,000) (five-sixths paid).
The
shares constitute approximately 1.666% of the outstand-*

amount to

bility

for issuing extra preferred

invites bids for the

lieve that gold privately hoarded
outside the United
States may

for

!

Co.; E. H. Rollins & Sons, Inc.

C.

Tom

since 1939.

but

v.

,

may make advisable the issuance of additional preferred
stock. Traditional underwriters: Hemphill, Noyes & Co.;

Salomon

decline in British private
holdings.
The gold and
of

Issue is

shares, but directors feel company should be in a posit
tion to take prompt advantage of any opportunity which

(8/7)

some

h:

,

Pittsburgh Coke & Chemical Co.

•

a

dollar

19)

St. Louis

Hotel Co.,

Aug. 4 stockholders voted to increase authorized $5 pre¬
ferred stock from 60,000 to 120,000 shares. Management!

purchase of
The certifi¬

will be negotiated,
possible underwriter. Proceeds
for plant expansion., " .',»•/
'
^

by

Aug. 7 (noon). Probable bidders
Stuart & Co. Inc.; Salomon Bros. &

San Francisco Bank

ings may have been partly

,

would be issued in near future to refund
bond issue.-New issue would bear 3V2% in¬
expected to be placed privately.

present

Sale of the stocks probably

Analyzes Gold Distribution

(Continued from
ings-

•

Halsey,

terest.

Power Co.

RR.

.v.

,

$1,300,000

company's refinancing
plan. Company proposes to issue to Equitable Life As¬
surance
Society, of the United States $5,131,000 3%
debentures in exchange for $4,231,000 of its 3 and 23A%
debentures now held by Equitable.
The company also
proposes to sell enough shares of its common stock to
raise $279,000.
'
:

Illinois Central

equip¬

will be opened

Jefferson

Derby Gas & Electric Co.

as

common

Aug. 12 stockholders will vote on authorizing a new, first
mortgage of $1,690,000 of 20-year maturity, of which

Aug. 19 SEC will hold hearing on

Blyth & Co.

1946 covered 550,000

-

Hutzler; Harris, Hall & Co. (Inc.).

Probable bidbers: Halsey, Stuart & Co. Inc.; Salomon Bros. & Hutzler;
Harris, Hall & Co. (Inc.). Bids will be received up to
noon (EDT) at office of J. G. Enderlin, Treasurer, Room
2008, 140 Cedar Street, New York.

Idaho

May 21,

>

Western

issue

semi-annually over a period of 10 years.

•

•

include

Aug. 15, 1947, and are to mature

to be dated

are

filed

'

Emery & Co., Salt Lake City. To purchase mining
ment and supplies and for working capital.
:

authority to issue
$11,360,000 equipment trust certificates, series Y, the
proceeds to be used in connection with the purchase of
$14,214,609 in new equipment. Bids on $2,500,000 of the

•

ST. LOUIS

7

July 23

July 25 company asked the ICC for

-

;

Lake

,,

will receive bids for
$2,800,000 of equipment trust certificates.
7

will be used

CLEVELAND

•

Light Co., Madison, Wis.

Mining & Development Co., Salt
City, Utah
,,
;
(letter of notification) 250,000 shares (50 par)
common.
Price—25 cents a share.- Underwriter—H. A.
.

filed $650,000 of 15-year 4%% sinking fund
Underwriter — Paul & Co., Inc., Philadelphia.

Delaware Lackawanna

Aug.

•

CHICAGO

Co., Dalton, Ga.

stock
sold by Middle West Corp. The original

(par $10) to be

passenger locomotives,' one new 4,500
Diesel-electric passenger locomotive, and 6 new
stainless steel streamlined passenger train cars; (b) Not
to exceed $1,912,500, from time to time, on or before
Dec. 31, 1947, for financing the acquisition of two new
4,000 h.p. Diesel-electric passenger locomotives, one new
4,500 h.p. Diesel-electric passenger locomotive, one new
2,000 h.p. Diesel-electric passenger locomotive, and 6
new stainless steel streamlined passenger train cars.

with

YORK

•

Insurance

Power &

Wisconsin

& Fixture Co., Inc.

INC.

BUFFALO

Life

July 21 (letter of notification) 10,000 shares ($10 par)
capital stock. Price—$20 a share. No underwriting. For
capital surplus.
<
\

subscription rights.
Proceeds—To retire preferred stock
and to reduce bank loans.
Reported July 16 that the

•

Blair A Co.
•

Helena, Mont.

statement

months.

BOSTON

Ida.
Casualty Co.,

(letter of notification) 1,997 shares ($100 par)
common.
Price—$150 a share.
No underwriting. To
finance stock casualty insurance company.

Aug. 6 reported company plans sale of 35,000 preferred
shares and 100,000 common shares during next three

Corporate Securities

r

"

July 16

h.p.

Mich.

Co., Jackson,

Power

States

ing—Shares will be offered for subscription to Weber's
common stockholders. Certain shareholders have waived

bonds.

operating expenses.

f

Ida.

July 30 (by amendment) 10,000 shares of common

present plans will be

Prospective Offerings
Consumers

"

Coeur d'Alene,

Mining Co.,

of company near Gem,

Diesel-electric

•

Star

108,763 shares ($5 par) common. Under¬
writers—Blair & Co., Inc. and Wm. R. Staats Co. Offer¬

($1 par) common.

Proceeds—For general

share.

a

agents. For

(letter of notification) 2,000 shares ($100 par)
6%"cumulative first preferred; 500 shares ($100 par) 5%
cumulative second preferred and 2,500 shares (no par)
common.
Price—$100 for each preferred share. The
common will
be exchanged for presently outstanding
common on the basis of five shares of new common for
each share of old common.
No underwriting. To pay
outstanding obligations and for working capital.
Weber Showcase

July 31 (letter of notification) 49,000 shares of common
stock (par $1),
Price—$5 per share. Underwriting—
None". Purchase of component parts and assembly into
completed jars; working capital.

Mar. 31 filed 500,000 shares

of common.

Mar. 31 filed

(8/7)

Vacu-Top Jars, Inc., New York

West

July 30 (letter of notification) 359,087 shares of common.
Price—500 a share.
To be offered through employees
and officers of the company.
For prospecting holdings

Lake City

well.

Victory Chemical Co.,

•
^

July 18

of

;

Oil & Gas Co., Salt

drilling of oil and gas

$700,000 5% 15-year convertible debentures
and 225,000 shares ($1 par) common. The state¬
ment also covers 112,000 shares of common reserved for
Conversion of the debentures.
Underwriter—Carver &

•

Vernal

**

■

•

July 29 (letter of notification) 300,000 shares
Price—10 cents a share.
To be sold through

due 1962,

Co., Inc., Boston.

For plant re¬

Niven, Vice-President of the company.
habilitation and working capital.

Dec. 20 filed

pCr share.

year

(letter of notification) 150,000 shares ($1 par)
common.
Price—$1 a share.
To be sold through Hugh

Utah Chemical & Carbon Co.

v

retire $327,000 of collateral trust 5% 10sinking fund bonds, to pay off bank loans and for
additional working capital.
Business — Construction of
street lighting systems, valves and plumbing specialties.

Proceeds—To

Inc., Indianapolis, Ind.

Velvet Power Co.,

July 30

filed 75,000 shares ($10 par) 5% cumulative
convertible preferred.
Underwriter—Herrick, Waddell
& Co., Inc., New York.
Price—$10 a share. The under¬
writers will receive a commission of $1.50 per share.
In
addition, they will be granted warrants to purchase 50,000 shares of the issuer's common at $5 a share., Pro¬
ceeds—For additional working capital.
July

c

1947

Thursday, August 7,

& financial chronicle

the commercial

(556)

40

.'ffiii

MASS.—William W.
forming W. W. Brooks

BOSTON,
Brooks is
&

Company

with

offices

Congress Street, to engage
securities
a

member

Exchange,
ner

in

business.
of
was

the

Mr.

Brooks,

Boston

formerly

at 50
in the

a

Brooks, Smith & Co.

Stock

part¬
v

,

Volume

166

Number 4618

THE COMMERCIAL & FINANCIAL CHRONICLE
tions

Should Free Cold

considerable

coins

the

scale,

finding

farther east.

The

even

result of. these

and other gold shipments to east¬

countries

ern

the

that

was

free

ate

effort

of

issue

he

newly-minted

observed

that

to

in the same interval.

"(iv) The monetary authorities
in Switzerland have .sold gold at a
rate which in 1946 averaged about
Sw.fcs. 1 million per working day.
In some respects these sales can
be
regarded
as
a
sterilization
measure, since in that way the
Swiss authorities were able to ab¬
sorb funds from the market and,
•.

.

coins,

the

that

mean

be

more

tied

franc

would

gold in

to

convert further

consequently, to
amounts of

gold into Swiss francs
for foreign customers. In its an¬
nual
report for 1946 the Swiss
National

from

its

1941

and

bars

sales

gold coins

of

market

the

to

that

announced

Bank

and

to

Swiss industries exceeded Sw.fcs.

1,000 million, of which Sw.fcs. 307
million

were

"(v)

Much

of

from

gold

the

Switzerland and from other sales
found

its

considerable

where

France,

way, to

had

amounts

been

purchased by the public in recent
It is estimated that at the

years.

beginning of 1947 private gold
holdings in France reached the
high figure of 3,000 tons, equiva¬

ject to manipulation by the gov¬
erning
authorities.
But,
when
signs of monetary stabilization ap¬
pear, as it did in the early 1920s,
the

"The

internal

central

banks

of

dispose

there

their

of

hoards, since

is danger that the value of

gold in terms of currency may be
lowered.

There

was

France, beginning
'n May, 1946, as indicated
by the

accompanying chart, which shows
the black market quotations of the
French gold coin, the "Napoleon,"
both

in Paris and

As remarked
the

in Switzerland.

in

present gold situation by the
for
International
Settle¬

ments:

"Since

fresh

additions

have

for

be

psychological.
One
interesting development has been
the adoption of a somewhat re¬
strictive

credit

policy

1947, which would

early

in

may

to

a

tend to

hoards.

But that is not the whole

when there is

a

great

de¬

hoarding purposes, the
price paid for gold will normally
rise and, since that price is often
regarded as a, 'true', measure of

the

value

of1

currency,
the
tends to increase
a

bringing the price of gold ;down hoarding habit
French market. As may the psychological danger of infla¬
be gathered from the graph, this tion. This danger,
moreover, may

oh the

the

quotations for

notes

on

which

the

the

time

most

when

other

an

the

effect

French

Swiss

value

franc showed
a

an

of

bank¬

market,
the

on

on

French

improvement at
quotations for

currencies

were

sag¬

ging."
f

than

more

offset

the

advantage
connected with an absorption of
funds. There is* in fact,
^ fine bal¬
ance
in the argument:
in some
cases

official gold sales may both

lower the

price paid for gold and
absorb mvolatile funds, and then
the sales may have a useful influ¬
ence on the
market, even though

When Hoarding Ceases

the tendency to hoard is a
sign
large private of distrust in some currency or
gold hoardings in Europe, Asia another. But another state of af¬
and elsewhere (impossible to es¬ fairs is conceivable—one charac¬
timate accurately), it may be ex¬ terized
by the disadvantage that
pected that if the trading nations the flow of savings into gold will
©f the world again succeed in re¬ deprive a country's credit instituIn

view

of

the

Quotations of Gold Coins in Paris and in
Switzerland.
In French francs.

i'

and abnormal

"premiums" widely

reported to be paid for gold. The
present so-called "market price"
of

'000

.tooo

5000
5000

Price of Napoleon
in Paris

ized

this

when

it

endeavored

to

sell

part of its gold holdings at
$42.90 per ounce, but soon dropped
the price to $39.76.
The reports
of isolated high premiums which

have

prevailed

resent

but

minute

a

dealings, and
sentative of
market.

in

India, South
the Philippines rep¬

America and

fraction

free and

widespread

transactions

re¬
mar¬

during

OP A, when sporadic instances

curred of excessive

oc¬

prices paid by

small class of consumers that

garded

"ijrice

prices

re¬

as no object." Such
representative of

not

are

price

Services of
One

ket

a

level

of

the

in

gold

gradual

Free Market

that

purpose

free

a

would

is

serve

restoration

would

mit

the

few

Switzerland,
gold
of

of

greater

countries, such as
which have surplus

hoarded

or

dollars, to dispose
holdings
for
greatly
imports to a greater ad¬

their

needed

vantage.
There

can

be

doubt

no

that

first step in
supplying
ditional gold reserves which

was

a

mitted

tion

a

of

this

new

monetary stabiliza¬

domestic

cannot

ad¬
per¬

be

currencies.

done

But

when artifi¬

cial "official
exchange rates" and

outlawing
of
gold
transactions
discourage tourist traffic as well
as
import-export operations and
prevent
rate

the

natural

ex¬

balancing

effect.
No
pay $3.50 for
a
breakfast in Paris, merely be¬
cause he is
required to exchange
a

likes

to

dollars for

francs

at

the

"black

"of¬

the
on

greatest

free
of

gold




'

l

"

I

»

1947

i

"

t

It

and

destruction of

a

exchange
the

meant

markets

in

national

gold—the
to

trade

become

restrictions.

beginning of black

threatens

now

lished

evil

was

a

in

New

,1914.

evil

of

markets

was

of

movements

exchange

cannot

movements.

foreign

gold

replace

The

gold

coordination

bullion

standard

of

with

gold exchange standard can¬
not
be
based on the principle
of

the

gold,

closest

in

rowest

the

free

concentration
sense

of

centers

gold

contrary

of

of

the nar¬
limitation of the

possible

number

in

possessing

trade.

On

the

such

coordination, if it
lasting and if it is to

serve
to
stabilize
the
interna¬
tional independence of currencies
requires free trade in gold on the

may

pub¬

1929

by

"Gold

to

be

largest possible scale.

Gold

ments

correct

would

weaknesses

then

of the

move¬

ments

of the

the

movements

foreign1 exchange and the

of

move¬

latter would render

possible economy
ments of gold."

(Continued from
educational program.
termined effort was

ply

to

keep

Thus

a

de¬

required sim¬
budget from

the

in

the

move¬

16)

page

—in the

head

hospital

program in over¬

Insurance Fund.

indicated in the proposals sub¬
mitted by the President last Jan¬

program

uary.

Appropriations
totalled $31.1

made

billion,

for

1948

reduction

a

of $2.8 billion from the
$33.9 bil¬
lion the President asked for either
in the original

budget

plemental

in sup¬
Aside from

requests.

or

the

in

and

expenses,

the

han¬

dling of the National Service Life"

swelling well beyond the bounds

The

foreign aid

enacted

was

with

rela¬

tively

minor cuts such
as
elimination of Poland from

the

the

list of countries to be
granted re¬
lief assistance.
*
"{

How Much Cut

in

Expenditures?

How much these cuts in
appropriations will mean in terms of

cut in
1948
appropriations,
Congress disallowed some of .the

expenditures

requests
for
extra
money
for
fiscal 1947, rescinded $3 billion in
appropriations carried ovsr from

propriations cuts should result In
corresponding reductions in ex¬
penditures
from
the
originally
projected rates.
In other cases,

previous years and not yet used,
and recovered considerable funds
which might otherwise have been

The

Committees'

Approach

In

going over the budgets for
military services, the Appro¬
priations
Committees'
objective

the

to cut out waste

was

without

agance

ciency.

and extrav¬

sacrifice

of

effi¬

the Army it was
percentage of offi¬
cers—13% % of total personnel
compared
with
the
previously
planned 10%—was unjustifiably
felt

With

that

high.

the

Bonuses

for

flying

discovered

were

to

per¬
be

loosely

administered as well as
disproportionate to the present
risks of flying.
The Army was
urged to save money and obtain
a
better control by centralizing
its procurement, by sharing du¬
plicate facilities with the Navy,
and by improving its accounting
and cost records. With the Navy,
the

Committees

discovered

that

shift of training activities from
the shore to the fleet might cut
a

requirements
25,000 men.

personnel
than
The
an

more

looked

Committees

by

with

especially critical

partments
swollen

-

and

wastes

have

which
to

the

been

bureaus

correct.

In

have

be

forese^it

Many of the ap¬

discovered
have

still

agreed]

other

cases,,

disclosed

been

where)

savings are possible though theyj
may not be immediately realizedj
The

final

expenditure
total, of!
will not be known untifi

course,

the

fiscal

ends

June

30J

1948, though, the Bureau of
Budget will work up*'revised

the!

year

timates''''based'
sional

action

on

""the

on

and

data

es¬

Congres-!
submitted

by the departments.
The negative side of the
record]
shows

that many

proved

sentatives
the

of the cuts ap¬
House of Repre-'

the

by

not

were

Senate

and

sustained

had

tled down to reach

to

a

by

whit¬

compromise,

Likewise

the

items

contemplated

not

be

addition

of

new

in Janu¬

ary will neutralize many of the
savings. In a few instances sav¬
ings have been disputed, most,
notably the reduction of $800 mil¬

lions

in

refunds.

appropriations
Here

more

for

have
the

tax

will
should

money

to be appropriated,
figure allowed, prove to be too

low.

.

eye

on

bureaus

administrative

caniiot

with assurance.

areas

de¬
with

overhead,

The experience emphasizes the
difficulties involved—the compli¬
cation

of

government

organiza¬

and

tion

accounting

methods,

overlapping of activities be¬
tween
departments
or
between

which

bureaus

within department# on
"public relations" or "publicity
work," and on expensive research

derstanding;
the
waged by bureau

activities

of

reports that got around of the ef¬

sionary"

or

acter.

harmony with the Pres¬

letters of protest
from back home.

on

In

an

as

continuing

well

"academic,"

"speculative"

as

in

housing

the Committees cut back
public works programs.
In the
payments

gold

before

Agriculture
were

stern

battle

chiefs

against

fects

of

the

cuts

and

resultant

to Congressmen

Cut for Bureau of Internal
Revenue

Perhaps
criticism

most
damaging
Appropriations

•

attention

was

directed

restored to large possible areas of savings

came

when the

ury-Postoffice appropriation bill
July 1, issued a statement to

on

for

the

the

Committees' work

the

-

of

President, in approving the Treas-

Veterans'

program,

the

ex¬

year, through
1948, though with maximum pay¬

Committees

to

cuts in their funds; and distorted

ments to any one farmer reduced
from $10,000 to $500.
With the

the

calculated

soil

tended for another

of

seem

prevent rather than promote un¬

shortage

rial,

of

old

"vi¬
char¬

often

recognition of

conservation

partially

The

Analyzes Budget Reductions

Department

of

gold
private
bank
gold shipments!
It
system that worked ex¬

It

in

entitled

gold

prevailed

pos¬

sible.

and scarcities of labor and mate¬

through

that

we always arrive at the
conclusion that free trade in
gold
should be restored as soon as

inter¬

infest

York

Mlynarki

the

and

standard

monetary

system,

is

relations and

pre¬

cellently well under the

we

which

a

Feliks

gold

the

free

private

equalization

credits
l

riers

of

whatever point of view
examine the present

outlawed

restriction

This

the

parities
J

ac¬

freedom

"From

the

ter,

abolition

tooo

thus

Restoring Private
Gold Arbitrage

Probably
the

and

for

restriction
is

market"

for his dollars.

more

arbitrage.

1946

similar

the

ident's efforts last Fall and Win¬

an

true purchasing parity of the two
currencies. But he can get around
this situation by buying his francs

vents

ml

other

free gold markets and resulted in
further international trade
bar¬

exchange

between currencies from

American

taprtsscdin french francs

tooo

taken

Mlynarki

discusses

movements, he writes:

fact, the U. S. Treasury

this amounted to

sonnel

following
World
War
I,
the
heavy • spending
of
American
tourists abroad, when the dollar
was
so
highly valued in Europe,

in Switzerland
;ooo

and

exporta¬
tion of gold by enactment of the
Gold Reserve Act of 1934.
All

the

undoubtedly lead to heav¬
foreign goods by
importers, and would per¬

S.

Price of Napoleon

2000

ended

spent by government agencies.

ier purchases of
U.

in

free markci rate

con¬

mar¬

equilibrium in the supplies of the
metal throughout the world.
It

moo

di rtie

States

has

In

actually

of

are in no way repre¬

a

These

semble somewhat the "black
ket" operations in meat

Need

)

tion.

quoted if natural marketing con¬
ditions were permitted to prevail.

get

•M

Franc,

The National Bank of Mexico real¬

ficial rate" much higher than the
•

countries

gold is in no way indicative of
price the metal -would' be

his

t<

United

the

ercising

'000

-,

under present

evenfl

the

work

present no great objection to
the
flow
of
gold
into private

for

decline has also had

gold,

the

desper¬

a

maintain

41

and Central Banks." On
page 112
of this work, in which

Britain

permanent malady in
conditions "of monetary distress,. the
domestic
economy
of
the
is not an unmixed evil.
Certainly, leading nations of the world.
if a- free market instead of a "black
No better conclusion could
pos¬
market" were in existence today,
sibly be given to this essay than
there would not be the excessive to
quote from a small

at

story:

It, is indeed likely that this credit
policy ! has been ' one factor in

fore¬

monetary point of view, there is

mand

to

in

inflationary effect, it may the general
thought that, from a purely
market.

have

seem

the

from

seem

an

some holders of gold to sell
in order to procure French francs
for current wage payments, etc.

forced

ket

a

apt to pass into and out of hoards
purely

analysis of

an

Bank

gold movements

number of reasons, many of

evi¬

some

dence of this in

country's gold stock

a

leading

of lost confidence and economic
disturbance. In fact, a mere sus¬
picion of currency stabilization
leads gold speculators and others

in France have shown that gold is

them

the

European countries gradually ac¬
cumulated gold, much of it com¬
ing from hidden hoards that had
been gathered up
during the spell

lent

to about U. S. $3,400 million,
or nearly five times
as much as
the gold reserves of the Bank of
France.

would

financing has had the effect of going authoritative analysis that
making people seek refuge in permitting a free speculative mar¬

to

sold in 1946.

It

The

once

Evil

France, after

her free

fixed

a

1931.

Great

gold market by prohib¬
iting private gold exports in 1936.

reintroduce

gold coins into circulation would

increase in the circulation of
paper
money which arises out of war

other kinds of
property which are
more stable in value
and less sub¬

in

once

relation, with all the inconven¬
price of gold usually fell—for in¬ War I.
iences which would result for the
During and following the first
stance, by over 20% in Egypt be¬
tween
August,
1945,
and
the World War gold disappeared from currency and the economy from
modifications of any consequence
Spring of 1947. In Bombay, how¬ the reported monetary reserves
in the international price of gold."
ever, where steps had been taken of the banks very much as it has
to check the sales of gold, the done during the
corresponding
Speculative Gold Market Not an
price for the metal rose by about period of the late war. The great
Unmixed

60%

by

to

vertibility

more

universal gold standard or some
other basis), the visible stock of

gold will undergo considerable in¬
This happened after World

standard

the Swiss authorities should

a

crease.

gold

meeting of that bank on March 8,
1946. Referring to a demand that

of turning to a normal stable cur¬
into, rency situation (whether through

their way

speech made

a

was

tional Bank at the annual general

some

Mediterranean countries and

attitude

(557)

after the post-World War I sta¬
bilization in the
1920s, but broke
down in the
currency war that
followed the abandonment of the

a

by the President of the Swiss Na¬

(Continued from page 3)
a

possible reconstitution
deposits. Typical of the gen¬

of

eral

Markets Be Outlawed?
on

of

"the reduction of

effect that

$20,000,000
the

enue

in

the

appropriation

of

Internal Rev¬

Bureau

will

mean

(Continued

a

reduction

on page

42)

in
.

,

42

THE COMMERCIAL & FINANCIAL CHRONICLE

(558)

Thursday, August 7, 1947

Indications of tCurrent Business
The following statistical tabulations cover production and
shown in first column are either for the week or month ended
Latest
AMERICAN

Indicated

steel

STEEL

AND

IRON

operations

of

(percent

capacity)-

——.—.Aug. 10

on

that date,

Week

78.9

89.0

1,660,700

1,651,900

1,380,700

1,568,500

AMERICAN

tdns)_

(net

Aug. 10

output—daily average (bbls. of 42 gallons each)
July
Crude runs to stills-^-daily average (bbls.)
1
July
Gasoline output (bbls.)____
___—July
Keroslne output (bbls.)___—
i
July
Gas oil and distillate fuel oil output (bbls.)
*
_
July
Residual fuel oil output (bbls. )_i
_j.
July
Stocks at tefineries; at bulk terminals, in transit and lit pipe lines—
Finished and unfinished gasoline (bbls.) at
.—
July
—

______

at

t-

fuel oil

(bbls.)

at_

5,109,100
5,093,000

gas sales (M therms)
Natural gas sales (M
therms)

16,070,000

14,791,000

26

26

5,162,000
16,142,000
1,884,000
5,708,000

5,912,000

5,606,000

5,847,000

26

8,738,000

8,969,000

8,298,000

'8,066,000

26
26

1,969,000

1,820,000

91,806,000

88,959,000

26

85,812,000

87,145,000

16,807,dOO

16,672,000

14,369,000

46,505,000

41,721,000

—

.

♦51,317,000

48,490,000

CLASS

45,311,000

52,497,000

Number

.

49,808,000

July 26
July 26

—.—

846,141

919,734

919,928

682,258

651,744

694,618

910,513
705,446

I

U.

ENGINEERING

Total

of

Net

Public construction
and municipal

31

$100,834,000

$134,765,000

31

66,216,000

75,468,000

31

34,618,000

59,297,000

31

25,840,000

49,179,000
10,118,000

8,778,000

$105,599,000
30,372,000

,

75,227,000
45,190,000

55,587,000

(ASSOC.

30,037,000

20,244,000

.

OF

AMER.

272

*272

OT>

2,377,979

*2,379,468

2,109,341

227,374
$696,908,689

,221386
$724,432,209

$611,998,248

550,057,087

557,318,292

517,363,043

RRS.)-~

represented

operating

,

revenues

ZZ„ZZZ

expenses—

ratio—per

OF

Anthracite

4,091,000

•4,609,000

5,263,000

382,000

♦450,300

482,800

$10,663

$7,905

35,500,000

(net

tons)—Month
,

(net

46,600,000

75,728,895

MINES)—

July
Coke

'84.54
44*.664,691
3.7,824,952
14,872,000

72,653,480
60,201,057

charges

(est.)-..

(BUREAU

76.93

77,345,314

78,93.

—

~

OUTPUT

227,374

$10,884

cent.

railway operating :ncome before

Beehive

60,125,000

35,343,000

,

carriers

miles

operating

of

$115,712,000

157,526
87,346

June:

of

Pennsylvania
July
Jbly
July
July

construction

S.

,

ASSOCIATIONS—

■Taxes

COAL

NEWS

construction

State

RRS.

Month

1,998,796
.'185,051
128,738

165,179
98,115

therms)

Net Income after
charges

RECORD:

Total

•

1,942,164
1,697,292

2,312,585

1,847,537

Z__

reporting
;
freight transported (tons)ZZZ_ZZ_

of

Number

v

CONSTRUCTION,

(M

motor

Operating

Revenue freight loaded (number of cars)
Revenue* freight rec'd from connections (number of cars)

ENGINEERING

of

Volume

ASSOCIATION OF AMERICAN RAILROADS:

Private

Ago

2,110,831

_

(M therms)

Month of June:

-

16,165,000

47,097,000

sales

gas

sales

gas

AMERICAN TRUCKING
1

2,091,000

July 26

.—

at

Mixed

Total

CIVIL

Month

Month

Total

4,926,050
4,887,000

5,083,650

July 23

*

(bbls.)

5,049,850
5,126,000
15,747,000

26

July 26

_

(bbls.)

oil and distillate fuel oil

Residual

ASSOCIATION—For

Manufactured

Crude oil

Kerosine

GAS

Year

Month

94.4

INSTITUTE:

AMERICAN PETROLEUM

Gas

:

Previous

of June:

and castings produced

ingots

of that date)

are as

Latest

Equivalent toSteel

month available (dates

or

of quotations,

cases

Ago

Ago

94.9

„

in

or,

Year

Month

Previous

Week

INSTITUTE:

Activity

other figures for the latest week

tons)—Month

JulyZZZ

of

CONSUMER CREDIT
OUTSTANDING, BOARD
OF
GOVERNORS
OF
THE
FEDERAL

RESERVE

SYSTEM—; Estimated

term

in

short-

'

COAL

OUTPUT

(U.

BUREAU

S.

MINES):

OF

Total

.July 26

coke

Beehive

♦12,100,000

♦8,230,000

1,117,000

1,116,000

1,105,000

.July 26

(tons)-.—

11,800,000

.July 26

Bituminous coal and lignite (tons)
Pennsylvania anthracite (tons)

124,100

♦110,700

80,800

credit

Automobile
Other

AVERAGE—100

._

July 26

217

212

245

4,805,740

4,730,229

4,189,824

*

4,351,011

Revenue
of

(COMMERCIAL

INDUSTRIAL)—DUN

AND

INC.-:

STREET,

&

—

82

76

69

14

METAL

steel

Finished

Mine

July 29

2.87118c

2.87118c

$36.18

$33.15

$28.12

$40.83

$40.00

$35.58

$19.17

Domestic

;

NEW

Straits

tin

(New

(New

Lead

21.225c

21.225c

21.2250

July 30

21.100c

21.425c

21.425C

15.925c

-July 30
July 30

80.000c

80.000c

80.000C

52.000c

at——

at__.
at

15.000c

15.000c

15.000C

—July 30

14.800c

14.800c

14.800c

——

10.500c

10.500c

10.500c

8.250c

Bonds

.Aug.

—

122.02

121.89

121.36

(in

117.20

116.80

of

118.60

5

5

121.88
120.22

•

122.09

121.88
120.22

120.84

Aug.

~

Groups

Industrials Group

—__a

S.

Govt.

116.80

116.80

116.41

110.15

109.97

109.42

112.56

5

112.37

112.37

111.62

115.43

5

118.60

118.60

118.40

119.00

5

120.63

120.63

120.84

1.54

1.55

1.59

2.79

2.81

2.72

2.56

2.55

2.56

INCORPORATIONS

DRUG

5

_

-

_

2.61

2.83

ASSOCIATION—WHOLESALE

150,196
*27,706
*47,149

9,179

11,402

143.9

137.Y

&

8,922

3.03

3.04

r

5

3.04

3.08

2.88

2.72

2.72

2.73

—

Month

(BUREAU

OF

142.5

MINES)

(bbls.)

(at

end

13,389,000

12,091,000

15,414,000

16,066,000

19,392,000

!

month)

14,566,000

15,328,000

—

;J.

of

*21,331,000

11,957,000

(bbls.)

'74%

.

SLIPPERS

AND

(DEPT.

COM-

OF

MERCE)—Month of May:
(number of pairs)

Shipments

(number

Shipments

36,491,000

38,713,000

49,469,009
Not Avail.

$139,302,000

$149,875,000

Not Avail.

of pairs)
—

PLYWOOD

Production

(M

Shipments

and

%-in.

2.62

2.61

—

5

417.5

416.5

403.1

-Aug.
-Aug.

223.9

221.3

219.6

(M

June 30

sq.

COM¬

June:

,

(M

%-in.

.

equivalent)

at
31,481

(M ft., log scale)

Log stocks

log scale)

(M ft.,

-Aug.
——

commodities

195.1

198.6

208.2

226.7

258.2

259.4

249.5

219.0

2

344.4

352.5

351.1

320.7

250.5

254.8

256.7

♦Revised

*Monthly average

figure.

in

year

250.7

249.7

234.0

206.4

180.1

178.6

172.2

151.5

(Continued from page 41)
returns

loss

.

quence,

of

of

revenue

less

of,not

than

$400,000,000."
This
sounds
like
blind budget slashing, and in the

(irrespective of kind or
complexity) handled.
In conse¬
its

in

164.4

159.6

221.7

219.7

193.2

158.5

150.1

148.8

124.1

2

216.1

194.7

185.7

177.6

2

150.7

152.9

152.4

127.5

129.5

127.9

on

129.6

121.4

that the Bureau should have been

2
2

machinery

167.7
220.7

135.0

135.0

134.6

119.7

given

within

less.

2

-Aug.
PAPERBOARD

127.1

127.1

126.6

115.-1

2

206.7

203.6

198.2

.July 26
.July 26

Percentage of activity

163,539
176,856

145,615

173,699

1152,741
176,814

149,865

161,405

.July 2S

99

97

102

95

.July 26

at

458,672

474,870

461,226

575,590

141.2

141.2

143.2

136.9

ML, PAINT AND DRUG REPORTER PRICE
AVERAGE=100

Aug.

1

WHOLESALE PRICES—U. S. DEPT. LABORr-1926=100:
All commodities

Hides

and

Textile

.July 26
.July 26

leather

products
lighting materials
—

and

metal

products

and

allied

products

L*__
ZZZZZZZ_Z_
ZZZZZZZ

.1

.

.

All commodities other than farm
products—— ■ ■ .
AH commodities other than farm
products and foods

v»Revis6d figure."

"




Appropriations

cuts and the opportunities for in¬

troducing savings without loss of
A
preliminary report
submitted by the
staff late in
July questions the "sound admin¬
revenue.

124.1

istrative

157.3

taken by the Bureau. According
to the report, the Bureau applied
all of the cut to the work force
out in the,field, with little or no

182.0

182.4

179.0

167.1

168.0

162.2

140.7

173.6

172.7

170.0

144.0

138.6

138.4

138.4

109.5

108.9,

107.1

104.5

90.2

141.4

practice"

143.6

174.8

174.8

175.4

132.6

allowance

117.9

117.9

123.2

100.3

operating

131.3

131.4

131.0

112.5

115.7

115.8

101.7

of

the

ington personnel.

116.4

142.9

113.3

The

Manufactured

House

ing how the Bureau had made its

to
articles

the

147.6

Special groupsSemi-manufactured

than

Committee assigned its investiga¬
tive staff to the task of determin¬

.July 26

Raw materials

rather

.July 26
.July 26'

166.0;

165.2

161.6

140.2

145.3

144.4

142.1

109.0

.July 26

145.0

145.1

142.7

119.3

.July 26

143.7

143.3

1408

116.8

.July 26

133.7

132.9

132.0

108.6

for

a

drop

expenses

or

in related
in Wash¬

their

of

staffs,
people

vacant

positions

on

able to take
released
elsewhere

or were

the Bureau.

The

number

imposed

the

cut

of

amounts

of

suggestions made in the report
for eliminating waste motion, to¬
gether with the fact that a num¬
ber of the persons dropped had
been

given unsatisfactory . effi¬
ciency ratings, seems to indicate
that there is room to tighten up
efficiency without -loss of • rev¬
enue.

the

on

by

an

no

ac¬

taxes

various

cut

can

in

appropriations,

be overly harsh and

arbitrary, is often the only way
to create pressure looking to in¬
creased efficiency.
Obstacles

to

Retrenchment

It would be contrary to human
nature if many government. ad¬

ministrators

did not resist, after
long "fat" years, making up
salary increases by increased effi¬
ciency giving up plans for addi¬

col¬

tional

new projects; and abandon¬
ing present activities which they

may

by

A

while it

the

-

arbitrary rule which took

lected

action

Bureau, the report went

say,

count

other offices merely cut down the

number

of

.July 26

commodities

statement 'many

money

-July 26

products—

Housefurnishing goods
Miscellaneous

more

.July 26
.July 26.

Building materials
Chemicals

a

150.3

-July 26

products.

Fuel and

Metal

150.6

.July 26
.July 26
.July 26

—.

such

Following the President's criti¬
cism

(tons)

Farm products
Foods

of

people would be inclined to agree
with some members of Congress

172.4

ASSOCIATION:

(tons)
(tons)

face

important office had
field deputy col¬
half, while some

of

cut

2

147.8

one

number

lectors

2

-Aug.

INDEX—1926-36

53,459

92,931

1946.

2

Unfilled orders

24,391

♦63,860

*136,862

4,000 to 5,000 em¬
ployees and will result in a direct

personnel

218.1

2

2

;

.

2

4

—

—

Orders leceived

*35,618

60,442

140,665

at June 30

Analyzes Budget Reductions

Grains

Production

121,412

125,068

—

Consumption of logs

179.2

-Aug.

NATIONAL

*142,070

*141,491

ft.,

sq.

.

ft.,

139,623

142,975

%-in. equivalent)

consumption

352.5

2

of

OF

equivalent)

Stocks

2.58

(DEPT.

ft.,

sq.

39,525,000

36,089,000

(value of)

2.70

2.62

2

Farm

,

PRICE

,

CEMENT

COMMOD

-

oils

Miscellaneous

*57,406

GROUP—1935-39=100:
i

Fuels

(DUN

1926-36 AVERAGE=100

—

Production

2.74

3.20

5

INDEX

FERTILIZER

and

2.64

2.81

3.17

Aug.

—

Foods
Fats

2.64

3.16

Aug.

_

-

Group

INDEX BY

2.64
2.81

Aug.

_

-

Group

COMMODITY

NATIONAL

•74,895
*31,201

59,762

*

REPORTER

Capacity used

2.50

5

Group

MOODY'S

s.

(bbls.)

SHOES

1.51

2.79

5

-

ITY

5

5

■

A

Baa
Utilities

72,760
31,083

in

metals

121.46

5

up.

__

Aa

Public

34,932,619

tons)

MERCE)—Month
A

Bonds

5

Industrials

36,794,388

'

118.20

5

Aaa

Railroad

37,022,918

May 31

July

Stocks

MOODY'S BOND YIELD DAILY AVERAGES:
U.

recoverable

tons)

AND

SOFTWOOD

Average corporate

of

as

MINES)—

123.13

120.22

5

Aug.

—

Group

Utilities

OF

tons)———

short

BUSINESS

PORTLAND

123.45

117.20

Aug.
Aug.
Aug.

:

——

Baa™———-——————————!
Public

1^,064,489
$275,606,100

•

of

Shipments

5

.Aug.
—

Railroad

customers

short

(in short

INDEX

8.250c

5

Aa

17,664.962
$310,762,400

—Finished Cement—Month of May:

.Aug.

corporate

Average
Aaa'

17,610,274
$310,024,600

8.100c

July 30

—

(East St. Louis) at—:—

Govt.

1.84&

S.—

Production
S.

2,327

consum¬

omitted)—

June:

(in

PAINT

OIL,

MOODY'S BOND PRICES DAILY AVERAGES:
U.

2,213

14.150c

York)

(St. Louis)

Zinc

July 30

at—

York)

Lead

U.

2,835

customers—month

BRADSTREET, INC.—Month of June__

at

refinery

refihery

Export

(000's

(BUREAU

production

Lead

sifcK

Electrolytic copper—

of

Copper
Zinc

METAL PRICES (E. & M. J. QUOTATIONS):

May

of ultimate

the

2.73011c

$36.38

July 29

—

3.16613c

July 29

lb.)

(per

Pig iron (per gross ton).
Scrap steel (per gross ton)

ultimate

to

ultimate

OUTPUT

699

1,867
r

INSTITUTE:'

___

Month

IRON AGE COMPOSITE PRICES:

2,887

4.

May

Number

BRAD1
July 31

of

from

336

1,112

2,8l9

2,216

*

sales

ers—month

2

Aug.

Electric output (in 000 kwh.)__

1,142

loans

ELECTRIC

810

2,902

L__

accounts

Kilowatt-hour

EDISON ELECTRIC INSTITUTE:

862

„

loans

Single-payment

204

EDISON

FAILURES

-J

,

Charge
SALES—FEDERAL RESERVE

STORE

SYSTEM—1935-39

of June 30:

as

Instalment sale credit—

12,603.000
1,305/000
126,200

Instalment
DEPARTMENT

millions
credit

consumer

district

offices but only of the number of

sincerely feel to be "indispen¬
which, on close analy¬

sable" but

sis,

do

not

warrant

their

costs.

Number 4618

Volume 166

relevant observations were

Some

published

"The

in

ployee,"

of

organ
Federation
of

National

Em¬

Federal

official

the

Federal

Employees, last March while the
Appropriations Committee hear¬
ings

for

which

a

years has been very liberal with
appropriations, many of which
were
not earmarked and there¬

available for

often

fore

which

there has been

never

of his taxes.

some

denced

by

This

was

evi¬

enthusiasm

the

for

budget-cutting

to make possible
instalment of tax relief

first

a

this year.
the

It

after
both

bills

porities,

two

reduction

by large makilled by Presiden¬

while

up

(administrators)
state
that their agencies cannot be cur¬
tailed
in
the
slightest
degree
which, even if true, is an unfortu¬
nate approach
.
Other admin¬
istrators, who have acquired cer¬
tain expensive habits with regard
to. Federal spending which they
some

.

.

have gone so far as to

even

.

do

far

so

have gone
intimate that they can

wish

not

as to

alter,

to

Congressional

the

outsmart

.

ap¬

propriations committees to secure
all the funds they seek.
"Heads of some agencies that
were
clearly
overstaffed
have
neglected to clear the deadwood
out- of

their

either

through

official corners,

own

expedi¬

political

laxity, administrative inef¬
ficiency,. or other equally indeency,

fehsible

reasons

.

.

.

that

at times

seem

instead

administrators

some

in the most
efficient manner possible the offi¬
cial
organizations entrusted
to
them, were trying to wreck them
by giving substance to the most
trying to

preserve

violent criticisms leveled at Fed¬

to

as

less, if money
is

almost

for

funds

to

for

to

reasons

found

diversion of

new

a

debt

be

spending

recommendation

$4 billion

above

available,

certain

urging the

The

and

over

cur¬

retire¬

Neverthe¬

allowance

retirement
are

are

accelerate

way

projects.
start

to

a

which followed

the tax vetoes, is
example of this tendency. The

an

citizen

should

whether

bid

ready

reduce

to

ernment is to

of

the

cost

of

reduce the

gov¬

ex¬

ponder

additions

to

housekeeping

ernment

when

that

in

al¬

an

sees

administration

Federal

and

of the Company, payable October 1,
1947, to holders of such stock of record on
the books of the Company at the close of
business Seotember 4, 1947.

Offered to Investors
of

30,
and
2/100ths of a share of the Common Stock
of Atlantic City Electric Company on each
share of the Common capital stock of this

seven

program
are
of
greater
benefit to him and to the country
tax

corersponding

a

relief

In

the

would

speech

already

ence

experience

an

to

of

representatives
1

"When

to the

ory as

Washington

n

to

Wash¬

beautiful the¬

manner

in which

should handle budget and tax
duction.
should

I

believed

we
re¬
we

government

reduce

that

ex¬

penditures first, balance the bud¬
get, make a start toward retiring
the national debt, and then and

hands

estimated
an

$17,734,682

in

1948

such stock of record

prevent

bill

Wherr

to

H. D.

estimated $25,089,932 for 1957.

air fields in his District would be

discohtinued

their

if

When

reduced.

budget

was

Customs

the

lots of

operation

of

Service

appropriation
was
re¬
duced 10% the head of the Bureaui took no steps to reduce in
niimber the 33,000 employees in
Washington but notified the 25,000 operatives in the field that
their jobs - were in danger and

less

than

21

Company

them

told

their

fire

a

under

Congressman.
.

\

build

to

sible

is

It

.

following.

mercial

icle,

Box
&

25

new con¬

present

some

Salary

mission.

obviously

L

or

730,

22 5 Fourth

only reduce after
consideration by a rea¬

It

.areful

Preferred

hstance

In

almost every

heads apply the
not where it hurts the

bureau

Eduction

;ast but where it hurts the most,

that not only every employee

o

[but

benefactor of the de¬
partment-will apply pressure to

AT a meeting ofAmerican Woolen
of the the Board of Di¬

'Congress

to

restore

the

hereby

.

share has been declared

firm,

licensed

states of Florida and

in

the

Stock of Atlas

of, such stock of record at the close
of business August 28, 1947.

August 5, 1947.

shares

and

experienced
rect

local

underwriting,

salesmen.

mail campaign

contacts

to

assure

Replies must
clude

excellent

contain

unwavering

public

support

|The strongest force behind that

(public support, quite evidently, is
promise that economy in gov¬




15,

1947

record

at

the

clientele.

history and in¬

August

FUNDAMENTAL
INVESTORS

P. O. Box 88

INC.

of Fundamental

vestors, Inc. have declared
of

Jacksonville 1, Florida

close

$.11

per

share

business

of

will

Checks

1947.

29,

be

Common Stock

Convertible

A

Stock

Preference

Prior

September 15, 1947
stockholders of record August 28,

to

payable

dividend

A

regular quarterly dividend of

$1.75

per share on the 7% Cumula¬
Preferred Stock payable Octo¬
15, 1947 to stockholders of rec¬
ord October 1, 1947.
A dividend of $1.50 per share to¬
gether with an extra dividend of
$2.00 per share on the Common Stock
payable September 15, 1947 to stock¬
holders of record August 28, 1947.

of

$.50

share

per

has

been declared on the Common Stock
of

this

payable

corporation,

1947.

on

September 15, 1947 to stockholders
of

record

tive

at

the

close

1947.

29,

August

ber

of

business

will

Checks

be

mailed.

Transfer books will

CLIFTON W. GREGG,

Vice Pres. and Treas.

close.

not

Dividend checks will be mailed by
the

Guaranty

Company

Trust

CROUP

of

New York.

CONNETT,

August 6, 1947.

SECURITIES,INC.

I
NEWYORK STOCKS, INC.
«C7

The

following distributions have been

declared

the

on

Special Stock of the

45th

Company from Investment Income, pay¬
August 25, 1947, to stockholders
of record as of the close of business
able

CONSECUTIVE

DIVIDEND
The

.»•*•«

$.07

.•••«•

.06

•

*04

.•••••*

»07

Agricultural Series
Automobile Series

Aviation Serios

»

Bank Stock Series

«

•

Building Supply Series

•

•

•

»

a

In¬

•

•

•

Electrical

following dividends

•

.07

»#•••••••

*06

.

.

Government Bonds Series

»

.

.

.

•

»05
05

Insurance Stock Series
.*•••••

*10

•

•

...*••

Railroad Series

•

•

•

*12

•

•

•

.06

.

.

.

•

.01

...»•••*

.05

•

•

.

• • •

06

Equip. Series
.

Tobacco Series

.08

*

Utility Series

Railroad

.05

on

On

the- various

Group Securities, Inc.

have been declared

payable August 30,

1947 to shareholders of record

August
15, 1947 at the regular dividend meet¬
ing of the Board of Directors held
July 31, 1947 at Jersey City, N, J.s

•

Equip. Series

Food Series

•

.

•

•

»

.06

••••

.10

•

•

.**•

•

*

Diversified Investment Fund

•

«

*

.18

Diversified Industries Shs.

dividend

payable

»

Chemical Serios

Steel Series

The Directors

Corp.

of

Sep¬

mailed.

regular quarterly dividend of
per share on the $4 Cumula¬

Public

photo of applicant.
Southeastern Securities

on

stockholders of

to

$1.00

Oil Series

di¬

creating sufficient

payable

corporation,

tive

Metal Series

•

»

*

.08

•

•

.06

Diversified Preferred Stock Fund.

*14

•

the
Corporate Bond Series

•

•

•

For Third Quarter
Regular Extra Total

Class

Agricultural....

.07

.05

.12

Automobile

.075

.025

.10

Aviation

.01

Building

.07

Chemical

.06

Elec. Equip.....
Food

.11

Fully Admin.

.07

.04

.11

General Bond...

.095

.035

.13

Indust'l Mach...

.07

Institute Bond..

.09

Investing Co....

.08

.05

.13

Low Priced.....

.05

.07

.12

Merchandising

.07

.11

.18

*

...

.

.06

.01

—

—

.04
—

—

—

—-

.07
.10
.11
.06

.07
.09

,

With

on

record

at

the

Trader-Salesman
clientele

association

can

with

over-the-counter

form

small

house,

a

well

pleasant
equipped

liberal

Financial
Chronicle,
Place, New York 8, N. Y.

25

.03

.03

.06

Equip..

.04

—

.04

.04

—

.04

.06

—

.05
.02

Utilities

com¬

mission, partner co-operation. Replies
confidential.
Box
B87,
Commercial
and

.08

Railroad Bond..

Sept. 2, 1947.

.02

Steel.

of

.01

.06

Tobacco

holders

.06

Railroad Stock..

1947, to

close of business

Mining
Petroleum

Railroad

Corporation's capital stock Sept. 16,

It is clear that the task of get-

Ithe

A

declared:

were

Merchandising Series

wants

Successful

per

the

on

rectors

Company, held today, the following
dividend*

Machinery Series

izing in the offerings of mutual fund

Itihg

larid

a

per

the Com¬

Georgia, special¬

■*

government
expenditures,
taxes, and debt down, if the job
is to be done, will require-a per¬
sistent effort backed up by a wide

on

Walter A. Peterson, Treaswer

Expenditures and Taxes

,

that

given

regular quarterly dividend of 40tf

Securities Salesman

reduc¬

*

is

Common Stock

Corporation, pay¬
able September 20, 1947, to holders

!
,

17, 1947. Transfei

AtlasCorporation
on

$1.00

declared

Preferred Stock

classes of shares of

mon

every

tion."

this Company, payable
Stockholders of record at the

Books will remain open. Checks will be mailed

sonable

hry economy.

Stock of

close of business September

Notice

-

been

tember

August 5, 1947.

HELP WANTED

Established

has

Cumulative

STOCK

29, 1947, a quarterly dividend of
three-quarters per cent was declared on

October 1, 1947, to

dividend of

quarterly

$4

this

New

can

percentage the appropriitibh of a department, division, or
bureau, and rely upon the head
bf the bureau to apply the neces-

July
and

Chron¬

Place,

what services should be cur¬

dled.

On
one

Dividend

ployee should be dispensed with
p

Ave.,New York 3,N.Y.

COMPANY

Com¬

Con-

for

A

share

R. A. BURGER, Secretary

Financial

Park

com¬

impos-

to attempt to say what em¬

3ss

Seeks

Has

30 Rockefeller Plaiza
New York 20, N. Y.
August 6, 1947

alj^ de-

York 8, N. Y.

impractical

and

nection.

MRKVICliA, Treasurer.

Preferred Stock

incorporated

years.

CAN

wholesaling

the close of

at

COMPANY

the entire issue will be retired in

the

and buying;

GtJS

American Woolen

fund,

starting in 1958, in amounts rang¬
ing upward from $1,149,200. It is
estimated by the Authority that

PREFERRED

trading,

76

1947, to stockholders of record
business August 28, 1947.

by the

sinking

a

AMERICAN

partments having to do with

selling,

Dividend No.

August 5, 1947, a dividend of FIFTY
CENTS (50^) per share was declared on the
Capital
Stock
of
NEWMONT
MINING
CORPORATION, payable September 15.

^ THE FUNTK0TE

Treasurer.

in

Corporation
On

$1,000,000 to $3,000,000 per
from 1953 to 1972, and the

term bonds will be retired

Analyst-Salesman
experience

Newmont Mining

the books of the

on

F. S.

Wide

DODGE, Treasurer.

ANDERSON, Secretary.

the

Department notified many Con¬
gressmen by telephone that the

E.

August 6, 1947.

general budget
before Congress the War

was

H.

The serial bonds will mature in

reduc¬

budget

BELL, Secretary.

Company at the close of business August
12, 1947.

-

-

public, has been declared

surplus

to

pany,

•

tion.

the

or

of the

net earnings of the Com¬
be payable and distributable
September 15, 1947, to the holders of

out

that

estimates

available for debt

revenue

annum

down

a very

Authority

service will increase progressively
over the next ten
years, from an

their

and

shared:

went

ington I had

refer¬

disillusionment

i

have
I

which

citizens

many

The

its net

has
been
made,
Cotton summarizes

Congressman
which-

be.

Company, issued and outstanding in the

the Mayor of Chicago.

of

measure

O.

Capital Stock of MAGMA COPPER COMPANY, payable September 15, 1947, to stock¬
holders of record at the close of
business
August 28, 1947.

/Nquarter ending September
of Twenty-five Cents (25c)

Governor of Illinois and four by

than

1947 to
share¬
close
of
business

Dividend No. 100

1947

members, three appointed by the

works

capital

15,

the

On August 5, 1947, a dividend of
Twenty-five
Cents (25c) per share was declared on the

A regular quarterly dividend for the

4

(Continued from page 8)
consists

at

1947.

Common Stock Dividend

Among those associated with
Harris, Hall & Co., Inc.; The First
not until then we should consider
Boston Corporation, and Blyth &
tax
reduction.
I
believed
that
Co., Inc., in the offering are: A.
Generating Kickbacks to
while money was cheap and em¬
C. Allyn and Company, Inc.; East¬
Congress
ployment
plentiful
we
should man, Dillon &
Co.; Union Secu¬
Some, further insight into how continue '• for
a
time
to
collect rities
Corporation; Equitable Se¬
"practical politics" works to de¬ taxes on the present schedule, in curities
Corporation;
Goldman.
feat
economy
was
given in
a
Sachs & Co.; Harriman Ripley &
speech
by
Congressman
Norris
SITUATIONS WANTED
Co., Inc.; Kidder, Peabody & Co.;
Cotton of New Hampshire before
Lehman Brothers; John
Nuveen
the "New Hampshire
Federation
& Co.; Paine, Webber, Jackson &
UNLISTED SECURITIES
of
Taxpayers' Associations last
Curtis;
Smith,
Barney
&
Co.;
TRADER
Spring. "The departments of Gov¬
Stranahan, Harris & Company,
Capable of organizing an Over-theernment," he said,
Inc.; Central Republic Company,
Counter department. Drawing account
"do not content themselves with
Inc.; Hallgarten & Co.; Merrill
plus
commission.
Have
had
over
the
mere
twenty years' experience. Box A 731,
presentation of their
Lynch, Pierce, Fenner & Beane;
Commercial
&
Financial
Chronicle,
cause
but they sometimes resort
25
Park Place, New York 8, N. Y.
todesperate
and
questionable
DIVIDEND NOTICES
means to
eral

employment."

the Company, issued and out¬
standing in the hands of the public, has
been declared out of the surplus net earn¬
stock of

Chicago Transit Bonds

which

1947.

Magma Gopper Gompany

I One Dollar Eighteen and ThreeCents ($1.18M) per share for the

ings

Board

29,

outstanding

September

reoord

C.

THE regular quarterly dividend of

quarter ending September 30, 1947, on
the 4%% cumulative Preferred capital

pocket.

public

record-breaking

18,

quarter

the government
spends is coming out of his own

well

July

Preferred Stock Dividend

f

gov¬

citizen

of

August

the

on

//

money

the

the

payable

share

holders

AND ELECTRIC COMPANY

Yet its essential

per

stock,

rather

a

by the course of events. We stand
the best chance of getting orderly
financial

this

Board of Directors of this Company has
day declared a dividend of Twenty (20c)

Cents

AMERICAN GAS

like

STREET

York,

The

revenue

government."
sounds

BROAD

New

DIVIDEND NOTICES

such

flood control plan,

new

THE BUCKEYE PIPE LINE
COMPANY
30

get, and the only

43

DIVIDEND NOTICES

"The government will spend all
the money it can

treme statement.

expenditures

so

doubtless

"It almost would
of

tailed

& Co., Inc.;
Kuhn, Loeb &
Co.; Lee Higginson Corporation;
Phelps, Fenn & Co.; Shields &

kernel of realism is demonstrated

reasonable

■1

Company; B. J. Van Ingen & Co.,
Inc., and White, Weld & Co.

with

entirely plaus¬

revenues

created

•

program.
The only trouble
it is that it won't work.

we

should be held

The argument is

ment of the vast debt.

«

Blair

This

ible that

(559)

might have a back¬
log for the future* I still' maintain
that this is a logical and sound

tial veto.

pansion of some agencies con¬
siderably out of line with the
purpose
for which they were
#

economy

tax

passed

were

order that

evidenced again

was

weakening of the

effort

purposes

intended,
permitted the ex¬

Congress

ernment will relieve thecitizen of

in

under way:
Congress

were

''With

THE COMMERCIAL & FINANCIAL CHRONICLE

.07

.06

.05
.06

.08

By "regular dividend" Is meant dividends,
from

Park

48

48 WAU STRICT,

NEW YORK

5, N. Y.

WALL

STREET, NEW YORK 5, N. Y«

net

investment

income.

"Extra''

dividends represent distribution from
accumulated, undistributed net profits*

1

THE COMMERCIAL & FINANCIAL CHRONICLE

(560)

44

•

•

industry. Second

for

commodity markets, brokers and
-dealers reached a $5,186 top in
1944,

groups

'

v

*

*

in

worker

mittee

1929-1945 interval, as

$1,725.

Average

of

low

1933

about
midpoint of the 64 industrial
groups classified by the Com¬
merce Department. Thirty-three
banking

had

lower averages

30

higher,

just

was

pay

than banks.

*

-

buying

Baldwin

is

Republican

is
Chairman. Both claim the GOP
is sunk unless it woos the middleVermont

of

Flanders

Senator

A11 a n

South

tfi c

and

Domestic
Commerce bases this deduction on
a 70-page report
.
.
"State and
Hegional Market Indicators, 19391945."
Copies cost 20 cents at

Pacific States. Office of

other

step

pre¬

are

a

off

sound

and

Both

vote.

little wooing of that
by inviting housewives and
little people with gripes to
before their subcommittee

kind

about

a

Here's

worth

Department field of¬
Superintendent of

Commerce

fices

the

or

decide for

month

a

the

flected

both

by
build

won't

will

missiles

Real

returns.

Congress

before

But

placed

major parties,
quicker

houses

*

cheaper. Best you should expect
a foundation for possible fu-;

is

man

watch the
Congressional inquiries coming
homes,

Land

*

*

*

special committee created by
and House to investigate

A

Senate

—

be

Samuel Pry or, Republican

Mr. Pryor

of

share

three

with

strategic

major

blunders last session when he (1)
persuaded a group of Congress¬
men
to introduce a bill creating
a

single

American line
by Pan American; (2)

overseas

dominated

its first

tendered free rides and
ment

to

the

*

All

hope for

business

1948

when

okaying

bill.

of

census

1947 distribu¬
Congress
quit

covering

died

business cen¬
Senate passed, but

The

relatively

that

and

and du¬

compliance

cost

a

the House blocked it

on

economy

not serious, leads most

are

the problems

arising from

overlapping taxation in the field
are

of secondary importance."
*

.

in

York

New

fiscal

1946

got

$26.6 million, or 4% of the state's
total
revenue,
from the stock
transfer levy, the Treasury finds.
Federal

revenue

the

for

source

the

from

same

year

same

totaled

$30 million.

*

If

abreast

the

of

House

keep
Small

inquiry

Committee's

Business

into charges the big petroleum

companies
outlets

own

tors.

favoring

are

their

small distribu¬

over

Committee

The

The

opens

McCarthy crowd tried to
chairmanship booty

by convening a rump committee
session last week, failed. Sena¬
tor Tobey was away with a

sick
wife, but enough of his friends

man

Chair¬

there to defer the

were

election. It's to be

a

show¬

Study

Walker,

charge of the Foreign

the

invited
Mr.
dismay

Miller and learned with

only

his

home«

a

steamship
won't

the
legislation.

hopper

the

into

dropped
It

few hours earlier
state
friend
had

company

surprising if

be

U.

S.

economists

partner

have

in

been

country's

economic situation.

With B. C.

Christopher

Special to The Financial Chronicle

CITY, MO. —Rodney

Wilson has

bers

of

of

been added

to the

Christopher & Co.,

Trade

Building, mem¬
Chicago Stock Ex¬

the

change.

Department

Barney & Co., invest¬
ment bankers and brokers, will
sail this week for Western Europe
Smith,

Old Reorganization
Rails

Domestic & Foreign
Securities
New Issues

on manganese is expected
eign Department makes periodic
approximate $1.5 million, leav¬
trips on the same itinerary to Eu¬
ing $33.5 million for the other
three. Recent payments on
the rope to be prepared for by the
time when the American market

to

'

IF

*

three

have

lobby.

averaged

$3.5 to $4
indicating that a

million monthly,

curtailment is inevitable.

1948

Con¬

trys to find out how much
American
spent
on
its

con¬

*

.

*

is

that

be

continued.

says

that.

.

.

Department

"While

ESTABLISHED
Members

Special

some com¬

N.

7.

1919

Security Dealers

Exchange PL, N. Y. S

Assfu

HA. 2-8780

Teletype N. Y. 1-1397

With King Merritt

'state and Fed¬

The

M. S.WlEN & Co.

by
40

The Treasury Department has

concluded

accept financing

to

*

does not retard trading, should

Federal Housing

ready

countries of Western Europe.

eral taxation of stock transfers

*

Administration
—if that's possible—by a House —reluctantly—went into the busi¬
Labor
subcommittee with New ness this week of insuring loans
goldfish bowl

These in¬

clude steel works, irrigation proj¬
ects
and
textile
factories.
The

,

that

struction industry is to be toted on
a

Turkish indus¬
being financed by

up

are

Outlay

bill,

instrument

chosen instrument

Labor racketeering in

for

Bank

and

the state owned banks.

Board

of

build

to

tries, which

staff of B. C.

Foreign Financial Condition
Burnett

International

KANSAS

.

Pan

national tour in

used

department.

Burnett Walker to

special dispatch

a

Development
aggregating $400 millions.
It is
expected that the first application
will be for $200 millions to be

joined their staff in the trading

group was

gress

down August 19.

a

the

.

the

seize

from

nounce

hearings in Chicago, August 21,
considering the chosen
to talk with financial and govern¬
then swings through Nebraska,
instrument bill; (3) urged Repub¬
ment
leaders .about
conditions
Montana, California and Texas.
can have
the job. The dour Mr. lican commitee member Miller of
which will affect foreign financ¬
*
*
*
Tobey is out to scuttle the real- Connecticut, to withdraw a bill
ing in the American market for
Premium payments on copper,
estate lobby. Newcomer McCarthy authorizing steamship companies
foreign loans.
says he just wants more places to operate international air car¬ lead, and zinc will be whittled
Mr. Walker will return in two
to live, isn't after any particular riers.
slightly this year. The Commerce
*
*
*
■
,n
months
after
visiting
England,
human prey, would like to see
Department has $35 million for
Belgium, the Netherlands, Den¬
Real fact is that Mr. Pryor
everybody happy.
premiums on-these three metals
mark,
Switzerland,
Italy, and
tossed a cocktail party to cele¬
*
*
*
and
manganese for
fiscal 1948.
France. 'The Smith, Barney For¬
brate introduction of the chosen
.

According to

the New York Times on July
31, the Turkish Government is
preparing an application for loans
to

E.

minded,

$400 mil¬

as

opment.

Street, New York City, an¬
that Daniel Moffat, Jr. has

Pine

much

as

in Turkey studying the

Pollock & Co., Inc., 20

*

*

oil

you're

Reported

lion will be requested for devel¬

eral

With Win. Pollock Co.
E.

World Bank Loans

loan, of course, will be in addi¬
tion to the $100 millions which
was
granted Turkey under the
Truman Doctrine.
Recently sev¬

Daniel Moffat, Jr.
Wm.

Turkey Plans to Seek j

Reconstruction

*

*

grounds.
'

Phillips

for G. L. Ohrstrom & Co.

as¬

*

a

*

that

while

dollar

consumer

and 52c in May.

Commerce

House

members

Commitee

entertain¬

the

spent for food contracted from
56c in March to 54c in April

sus

should credit himself

of

average

an

$3.11 in 1945. The farmer's

and

without
*

*

to

dropped

tion

*

housing

convenes August 19 for
organization meeting. Ex¬
pect a clash between Republican
Senators Tobey of New Hampshire
and McCarthy of Wisconsin. Both
hanker to be Chairman. Only one

re¬

can

off

1946. Rate of pay¬

over

is

administration

loans by
Banks increased

$1.62 for each dollar borrowed
in fiscal 1947 from $1.81 in 1948

necticut.

better

up.

comes

pects

tax

administer

double

plicate

*

11.3% in number and 8.4% in

National Committeeman in Con¬

legislation. Nonetheless, if
interested in financing or build¬
ture

ing

it

its

to

farm

long-term

volume

transfer

simple

that
*

the doorstep of Pan
Airways
and front

on

American

or

undress

this

of

if

—

hotel
inspection.
and

public

cause

hearsal

de¬

be

will

lobbyists out

lounges

for

rooms

short¬

be heaved at the housing

cocktail

of

Political bricks aplenty are to

age

now

shake the aviation

*

*

scrambling

stock

This

investigators to the conclusion

or so.

In fiscal 1947 ended last June

Federal

of overseas op¬
it's almost

Right

erations.

consideration,

coupled with the facts that the

30

certain Congress next year

Documents, Washington.
*

for the plunder

appreciable

an

the volume of security

on

trading.

Today,
as
compared
yesterday, the farmer is (1)
snagging less of the consumer
dollar spent for food; (2) borrow¬
ing
more;
(3) repaying fewer
loans. Agricultural analysts aren't
sure this trend is positive, won't

live to rue

the day they started

indicate that

levy has had

effect

with

*

*

may

WaR,

40

evidence has

been presented to

.

Big airlines

no

curity brokers,
the

development

a

plaints have been made by se¬

watching.

political powder keg.
*

a

*

*

*

cost of

the

occupy

longer credit to the dealers.

living. That's headline materialand

"needs."

or

liquid position, can extend

more

member,

a

thinking

advanced

is pared to do

power

shifting out of New England and
the Middle Atlantic States, into
the
East North
Central. South

Central,

when the

subcommittee holding hearings in
the
North and East gets busy.

of-the-road

*

*

Jjs

will

manufacturers

Senator

at

Street, New York City. Mr. Phil*
lips was formerly manager of the
wholesale and trading department

*

*

headlines

the

,

Consumer

what she wants

for

pay

the Economic Report.

on

Watch

against a

Howard E.

Very well—if Egypt is able and willing to

Com¬

Congressional

Joint

the

*

averaged $2,622 per
1945, peak for the,

Bank pay

offices

of

And Egypt, too?

special
under Chairman Taft of

regional pattern by three

$2,742 low in 1933.

a

from

these fields that we look to the United States for

ber^ Senator Baldwin sponsored
the legislation authorizing thi3
investigation. It's to be on a

by security and

average pay

era,

a

1

Phillips is now con¬
ducting his own investment busi¬

equipment and technical assistance." — Mamdouh
Bey Riay, Egyptian Minister of Commerce and In¬
dustry.

price probe scheduled
send-off by mid-Septem¬

Senate

gas'

,

great strides forward in the
glass, paper, furniture, clothing,
artificial silk and leather goods.
It is primarily in

to

electricity utilities with a $3,average.
For the 1929-1945

*r

made

have

"We

manufacture

by security and commodity markets and brokers
and dealers averaged $5,132 for each full time employe in 1945. This

and salaries paid

694

fa

Egypt.

highest average annual wage and salary of any U. S. industry. That's
a Commerce Department conclusion from a 1929-1945 survey.
Wages

compared with a national average of $2,357 for all
security and commodity mar-f"—

*

and sugar refining is a major industry of

sugar

the

m

Howard E.

ness

Security and commodity markets, brokers and dealers pay

and

nation,

mainly with the use of our vast cotton crops, such
as cotton ginning, textiles and production of cotton¬
seed oil and soap.
We also raise a large amount of

from the Nation's Capital

Jkets, dealers and brokers were

agricultural

an

*

Phillips Is
Opening Own Firm

Egypt regards industrial progress as important to
its future.
Our chief industries are now concerned

Behind-the-Scene Interpretations
»

primarily

"Although

•<

*

Howard E.

Egypt, Too?
OTb

"

f

Thursday, August 7, 1947

to The Financial Chronicle

COLO.

DENVER,

—

David D.

DeLashmutt is with King

Merritt

&

Co., Inc., U. S. National Bank
Building. ■

Seaboard Fruit Co., Inc.

r

York

is

Republican Gwinn swinging

made

by private lenders to manu¬

Chairman's gavel. The group

the

facturers of prefabricated homes.

hearings

Congress ordered such insurance
over
FHA demurs. FHA regula¬

ambitious,

will

open

at Cleveland on October 27, swing

west, south, then back east for
December
windup in Alabama.

tions .limit the

are,

'

from

this insurance than

the old

FOREIGN SECURITIES

High

consumer

rARL MABKS & CO. INC.

ticut's

Republican Senator Ray

Baldwin,
for

a

so

he's

FOREIGN SECURITIES

prices include
*

to

apt

housing phase

press

of special




*

SPECIALISTS

*

Dealers in prefabricated
homes will also profit from this
new

FHA

insurance,

because

Empire Steel Corp.

All Issues

RFC insured market deal.

high home rentals, says Connec¬

Susquehanna Mills

Firm Trading Markets

loan to one year,

maximum interest to 4%, plus a
prepared
to
be mortgage insurance premium of
1%
of
the
original
principal
tough, determined to discover if,
how, and .how much labor racket¬ amount, and restrict -loan to 90 %
of the manufacturing cost. Preeering has retarded home con¬
fabricators
expect greater help
struction wand hiked home costs.

Members;

General Products Corp.
Teletype—NY 1-971

HAnover 2-0050

50 Broad Street

.

Hill, Thompson & Co., Inc.
Markets and

■'

New York 4, N. Y.

AFFILIATE: CARL MARKS & CO. Inc. CHICAGO

120

Situations for Dealers

Broadway, New York 5

Tel. REctor 2-2020

Tele. NY 1-2660

i,
5