Full text of Commercial and Financial Chronicle : December 11, 1947, Vol. 166, No. 4654

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i

12 1947

ESTABLISHED 1839
,

„

«*J"

<****-

*

*

'

Reg. U. S. Pat. Office

Volume

166

Number 4654

New

OuiNational

The Steel Industry Outlook
By WILFRED SYKES* ■;;
President Inland Steel Co',.; •'

■

Security

»:V V-.

>"■'

*

Landon

;

in output and demand, will

warnsagainst

military

training

supply will

Most

Americans

of

in

the

today

steel

present

has

creating
I

in¬

are

elemental

find

demand

L

dict

out

terns

Soar¬

lengthy article in

a

recent issue of the "Chronicle," issue of

private savings institutions which sell United States Savings Bonds
are "unconsciously or misguidedly sacrificing themselves and
helping

have <S>

pat-

that

we

<$and

patriot¬

ism."

EDITORIAL

Certain

fal-

in

and

sistently. It

housing
of

most of

But

.

has

imme¬
concerr

us.

wear,

to

a no

to

eat

to

to

are

of'

many

there

is

an-

other

even

vital

more

that

us,

must

we

not lose

sight of—our national

curity.

That is particularly true
in

the

on page

se¬

London

26)

♦Address delivered by Mr. Lan¬

or a

pauper

iS#l|fisg;IFe£'See It^m

of
x

industry.
good

it

•has/been ,'a
•pauper,

un-

More False Assumptions

:

deal

of the time

a

something

always
a prince

A

the

con-

been

an

impor¬
as

something

don at the Kiwanis

A

Last week in these columns

j

an

cuT^enf' dorh6sti(? ^6Heies 'appear to

' We rshall. now

^fortunately. At proceed to a similaf; examination of that part of our foreign
the
present policies which
may quite accurately be termed political
time
it
is
a
Wilfred Sykes
bribery.-V...:
prince. How
Obviously, . beyond that; which can be defended as
long it will
continue in that status, T don't purely humanitarian assistance to other human beings who
know.
are in distress, our entire
foreign "recovery" program rests
g What I want to talk to you upon two broad and fundamental^ assumptions.
One of
about today is something about
them is that unless nurtured by billions of dollars worth
what makes up the steel industry
of our goods and services anything remotely resembling
—what is it. Steel is one of the
fundamental
industries
in
the
democracy in Europe will quickly disappear, submerged
United States, on which our great
beneath a torrent of totalitarianism advancing from the
productivity has been built. With¬
East.
The other is that somehow we may, with almost inout an abundant supply of steel
■

'

'

we

Club, Chicago,

could not have developed this

(Continued

111., Dec. 9, 1947.

on

-

,

(Continued

-

,

on page

ing suggest
that the author
of

it

in

close

Havana

Lithographing Co.

PICTURES

Mr. Sykes before the

33)

their

over

-Viettba^
government

a;r e.

impose

debt

Established

and

reduction
deflation
them
name

with

he

on

the

in

William C. Hanson

of thrift.

the

bond program and that
writing theoretically when

was

he condemned the sale of Savings
Bonds by

private savings institu¬

tions.

|

;

v

•

To

get the proper perspective
on
the Treasury's bond program,
and thus to judge it correctly, one
:

must

distinguish between its

over¬

all, ultimate objectives on the one
,,

(Continued

on page

28)

taken at

the

Annual Meeting

of the Security

Traders Association of New York appear in Pictorial Section.

State and

City, Dec. 4, 1947.

R. H. Johnson & Co.
•>

touch

functiors" and

Association of Customers' Brokers,
New York

not

was

page 22)

♦Stenographic transcript of
address by

'

this

the State take

analysis was presented
Dumber of fi|s§ assumptions upon which rhuch of our

of,, a

r

Oct. 9, cover page, signed by a Professor of Economics, argues that

reason¬

problem cf-

Four

we

■

certain
■

place to sleen

Big

*

V

exactly what will happen three months ahead in that industry,

elemental

(Continued

Says Savings Bonds promotion by banks
good-will and helps their business, and that sales program
has made millions of small capitalists. /> Stresses importance of
Savings Bonds in combating inflation and points out value of stable
dollar to banking and insurance institutions.
Sees need for converting commercial bank government holdings into savings bonds.

:

not be used.

are

their functions.

creates

Sees

against

Savings Bonds,

over

lacies

tant

the

|

|r

line of

\

as

-

pretty

to

:■

of

*

have followed

diate

problem

warns

'I

fostering sales
sacrificing themselves and helping State take

prices o.
food, clothing
are

elemental

may

By WILLIAM C. HANSON

was

ing

Alt M. Landon

and

point,

producing capacity that

excess

that

maximum

at

Copy

Mr. Hanson denies private savings institutions, in

Contends steel;
pro-

a

Director, Investors Advisory Institute, New York

Says

impractical because of labor shortages.

are

place to sleep—something to

a

abnormal;

to fluctuate

in proportion to population!.

Price 30 Cents

Savings Bonds Not a Detriment to
Savings Institutions

■

supposed to talk about the prospects of the
steel industry, but I think you
people know as much about the pros¬
pects of the steel industry as I do.
I have never been able to pre¬

things

wear—and something to eat.

■'%

balance demand, and argues increased steel

soon

duction facilities

democracies

and has not promoted peace, i

terested

grow

supply.

compulsory military service. Ex¬
presses doubt camp training for
youth is beneficial and points out
caused downfall of

:r

steel will continue to be
superior for construction purposes, and
decries fear of depletion of ore or coal

emotional propaganda that would
lead us to install immediately

universal

....

industry, though bound

;

Ex-Gov.

•

Steel company executive, in calling attention to
present
demand for steel products, holds

By ALF M. LANDON *
Former Republican Candidate for
President

York, N. Y.,. Thursday, December llv 1947

STATE

and

Municipal

MUNICIPAL

.

'•

Bonds

BONDS

1927

INVESTMENT SECURITIES

Bond Department

Hirsch & Co.
•

■»

■>

Members New York Stock Exchange
and (ther Exchanges

t5 Broad
lAnovrr

64 Wall

'

'/

St.. New York 4, N-Y.

2-0600

Chicago

Teletype NT 1-210

Cleveland

London

Street, New Yerfc 5

BOSTON

Troy y

■

PHILADELPHIA

Albany

Baltimore

,

Buffalo

Syracuse

Dallas

Pittsburgh

Harrisburg

Scranton

Williamsport

Geneva (Representative)

TKE NATIONAL CITY BANK HART SMITH & CO.
Members

|§

Springfield

OF MEW YORK

52
:

Wilkes-Barre

Bond Dept. Teletype: NY 1-708 :

Woonaockef

*ABC

NATIONAL BANK

Vending Corp.

WILLIAM

^

Bond

of INDIA, LIMITED
Bankers

to

the

Government

Kenya Colony and

in

Underwriters and

Uganda

Branches

Distributors of

Office:

26, Bishopsgate,
London, £. C..

In

India,

Colony

and

Burma,

Aden

and

Subscribed Capital

Capital

£4,000,000
£2,000,000

OTIS & CO.

Reserve

Fund

£2,300,000

(Incorporated)

The

Bank

conducts

banking

and

every

exchange

description

undertaken *




1899

Members

CLEVELAND
1

New York

Cincinnati

Chicago

Columbus

120

,Deirrer

Toledo

Buffalo

4%%

Conv.
on

Preferred

New York Stock Exchange

Broadway, New York 5, N. Y.
Telephone:

f

-

Bell

REctor 2-8600

Teletype:

THE

OF

CITY OF

NEW

YORK

Northwest

I Utilities
Analysis

and Dealers

upon

request

request

Reynolds & Co.

?■

business

Trusteeships and Executorships
«l«o

Established

of

&

*Prospectus

national bank

Brokerage

for Banks, Brokers

Common

Paid-Up

Toronto

Company

Corporate Securities

Zanzibar

HAnover 2-0980

*RobertshawJFuIton Controls

Municipal

and

Ceylon, Kenya

V.

Montreal

Service

•

Head

ST., N.

Bell Teletype NY 1-395

New York

Common

v-"

the chase

New York Security Dealers Assn.

NV

1-635

Hardy & Co.
Members New York Stock Exchange
Members New York Curb Exchange

30 Broad St.
Tel.

DIgby 4-7800

New York 4
Tele. NY 1-733

ira haupt&co.
Members
and

111

New

other

Stock

Exchange
Exchanges

Broadway, N. Y. 6 *

REctor 2-3100
Boston

York

Principal

Teletype NY 1-270$

Telephone:

Enterprise 1820

2

COMMERCIAL

THE

(2366)

Portland Elec.Power 6/50

What Will
:

—

"Thursday, December II, 1947

An Analysis and Forecast of Sales of Consumer Goods

'

Portland Genl, Elec: Co.

CHRONICLE

They Buy?

*
.

Common

& FINANCIAL

''1;

By WILLIAM II. LOUGH

"

:

Alabama &

.

President, TradeWays, Incorporated

When Issued

Louisiana Securities

Economic

B ought—Sold—Quoted

New York Hanseatic

Corporation
Broadway, New York 5
BArclay 7-5680
Teletype NY 1-583
120

analyst, pointing out Inflation distorts consumers' spending, sees new pattern of consumer
demands in making.
Says spendings per person for food, liquor and tobacco have been rising since
early 30s, and have filled vacuum left by shortages of autos and household appliances. Holds postwar
boom is at top, but wiih absence of severe labor troubles or disruption in domestic or international af¬
fairs, a 10% decline in consumption expenditures is worst contingency in prospect. Forecasts changes
in pattern of consumption and end of eager demand for some products.

Writing sales figured in current dollars' are still rising at a rate that appears
to be accelerating.
Chart I shows the remarkable gains from 1939 on through September,
194?.
On its face the chart makes an inspiring picture — with all its curves marching
majestically^—
~
—-—r——
upward and more, the Department of Com¬
merce
onward, and
estimates, shown in the
no
end
in chart, are open to doubt.
Esti¬
sight. EspO- mates by the Securities and Ex¬
pecially heart¬ change Commission of liquid sav¬
ening to man¬ ings by individuals come to only
ufacturer's
hi $2.6. billions in the first half of

3/6s, 1956

Savoy Plaza
Chase

v

Bag

and

ings

ap¬

pliances, ■ • musical

Vanderhoef & Robinson
Telephone COrtlandt 7-4070
Teletype NY 1-1548

is

the

of

not

is

120

York Curb

is

good reason,

no

The

It

Further-

reassuring.

chief

is

now

Capital Needs of

explanation

of

other products are also operating
beneath
the surface.
Moreover

these
have

,

they

Vice-President,

Taylor Wharton Iron & Steel
IT. S. Finishing: com. & pfd.

are

Texas

Title

Trust
England
Artcraft
Manufacturing
United Piece Dye Wks.
Guaranty

Northern

&

New

vestment

of under-construction and under-

equip¬
ment, plus all
non

tial

maintenance

translated into figures^—

and resi¬
is a great
void which must be filled if our

which
lions

construc¬

families are to be adequately
housed and if our industry is to

which

Laboratories

substantial
amounts of

they
in

can

our

new

investment

new

and

receiv¬

Utah Southern Oil

ables

reflect

the

rise

prices.

produce the goods out of

we

build

can

a

in

consumers are

Kirby Lumber

spending
about

the

same

Murray Shields

amount for

new

Members N. Y. Security Dealers Assn.

37 Wall St., N. Y. 5
Hanover 2-4850
Bell Teletypes—NY 1-1126 & 1127

credit.

The

need

for

production
facilities is urgent. After 15 years
new

*An address by Mr;

Shields at

the Government Finance Side Ses¬

sion

of

the

52nd

NAM

Annual

of American Industry,
New York City, Dec. 5, 1947.
Congress

Established 1850

be

the

added

re¬

Members

39

Digby 4-3122

war-torn
cannot

we

meet

our own

of

large part of the world

a

well

demands and those

without

of

a

substantial

productive

as
ex¬

a

can

matter of vital interest for

be

we

Exchange

New York 6
Teletype NY 1-1610

that present levels of
activity cannot be main¬

sure

business
tained

without

continued

heavy

capital outlays.
Money

Is

Not

as

Plentiful

as

Argo Oil

It

Was

shorter

workdays, shorter work
weeks and longer vacations make
it necessary to use more physical
plant per unit of manpower than
was the case before.
Finally, we
are in the pilot-plant stage of the
greatest
advance
in
industrial
technology in the world's history.
We have ahead changes in tech¬
niques so vast and fundamental as
to render a large portion of our
present plants obsolete. We have

Mgr.

Stock Exchange

Broadway

capacity.

And it must be remembered that

York Curb

New

Chicago

is

the
that

Asst.

Joseph McManus & Co.

Under such conditions the avail¬

ability of credit and capital funds

of

It is clear

KANE,

WALTER

quirements for material aid in the

pansion

housing and durable goods, a large
part of which must be financed
through mortgages for consumer

must

MICHAEL HEANEY, Mgr.

high

new

standard of living. Add all
demands together and we

reconstruction
areas.

And

Hood Chemical

war

Securities

bil¬

inventories

needed

Federal Liq. Corp.

^reenaecmiGompanu

NEW YORK 5
HAnover 2-9470

/

before

Punta Alegre Sugar

Time, Inc.

The

question—"Where

Utah

the

are

funds

coming from?"—might at
first glance appear superficial in
view

of

the

fact

cheap in historical
terms.

But

that
as

credit

well

as

Southern Oil

is

real

capital funds are
in fact much less readily available
new

than they were a few months ago.

(1) Self-financing through re¬
tained earnings and depreciation

(Continued

on

Troster,Currie&Summers
•'

:

Members

■/

New York Security

Dealers Ass'n

Teletype—NY 1 -376-377-3^8

page 19)

H. Hentz & Co.
We Maintain Active Markets in V. S. FUNDS
Members
New

York

Stock

New

York

Curb

Exchange

Cotton

Exchange

York

New

Commodity

Chicago

Exchange

Exchange,

Board

of

Inc.
Trade

New Orleans Cotton Exchange
And other

Exchanges

Abitibi

Pow. & Paper

PORTSMOUTH STEEL
'90

Minn. & Ont.

Paper

Noranda Mines

Raytheon Manufacturing Co.
$2.40 Coriv. Preferred

BAUSCH & LOME

Rhodesian Selection

Brown Co.

Canadian

for

United Kingdom 4%

DAN RIVER MILLS

Gaumont-British

•

:

Securities

British

90c Conv.

Exchange Bldg.

NEW YORK 4, N. Y.

Members N. Y. Stock Exchange and Other
CHICAGO

DETROIT

Securities

PITTSBURGH

GENEVA. SWITZERLAND




115 BROADWAY
Telephone BArclay 7-0100

Principal Exchanges

NEW YORK 6, N. Y.
Teletype NY 1-672

Company

$1.25 Conv. Preferred

Bought—Sold—Quoted

;;

^Universal

Department

Goodbody &. Co.

;

Preferred

Twin Coach

HOVING CORP.

Scophony, Ltd.

Department

v

Solar Aircraft Company

Winding Company

90c Conv. Preferred

*Prospectu$

N. Y. Cotton

•

Curb and Unlisted

industries into

must pour tens of

we

of

as

Int'l Detrola

;

1923

,

Teletype NY 1-1140

the

U. S. Glass Co.

' Established

WALL ST.

64

are

Newmarket Mfg.

Stock

Common

Detroit Int'l Bridge

:■

working capi¬

Warner & Swasey

Central States Elec. (Va.)

Members'New York Curb Exchange Y

tal

Boston & Maine R.R.

~

1-1227

Frank C. Masterson & Co.

Aetna Standard Eng.

Bates

2-4230

Loft Candy

supply the goods needed for ex¬ these
panding markets. To the vast de¬ get a level of investment spectac¬
mand for making up the ground ularly high as compared with any
lost during the depression and period in this nation's history.
-

Dumont

WOrth

Bell Teletype NY

..

v

long list of

a

there

Manufacturing

Theatre

Broadway, N,"Y. 5

120
•V.'

Company,

plant

of

dential facilities

residen¬

-

per annum and

Artists

Members Baltimore Stock Exchange

$>-

in

new

Clyde Porcelain Steel

United

Pfd.

&

Mitchell & Company

Expanding Economy

an

..

new

3^-47

Com.

organ's Inc. Units.

urgent problems faced by American business es an inadequate supply
savings in relation to the need for new capital funds.
The demand for long- and short-term funds- is at a peacetime high. Business in¬

tion, is close
to $25 billions

Boston Terminal

Coal 5's, 1955 Ws.

onoft

ontague Rod & Reel

One of the

Film "A"

Transmission

East

Com. & Pfd.

Aspinook Corp.

of current

Electric Bd. & Share Stubs
&

"A" & "B" Pfd.

ississippi Glass

/,

Holding capital needs are at record levels imd unless these needs are supplied,
business adEJrity
cannot be maintained, economist contends/money is not as plentiful as it was. Proposes Federal Re¬
serve renounce obligation to hold down interest rates and Government bond yields, and
recommends
Foreign Rehabilitation be financed through private credits. Urges tax exemption for savings.

OLctual "IWaTKets Qu

Genl Aniline

etropolitan Com'l Corp.

generalizations
practical value unti

present

Steel

|' ay, McEwen & Kaiser

sweeping

little

7 specifically, into dollars-and-cents
commonplace, too,
"(Continued on page 30)

a

branch offices

our

ayflower Hotel

;

certain

for

and

to

By

TeL REctor 2-7815

Porcelain

Direct wires

larger expen¬

the

food

for

NYM557

New Orleans, La.-Birmingham.Ala.

and

ditures

SL, New York 4, N. Y.

HAnover 2-0780

and clothing prices to a somewha'
lesser degree—have gone up faster

MURRAY SHIELDS*
and. Economist, Bank of the- Manhattan

Exchange

BROADWAY, NEW YORK 5

Baltimore

25 Broad

that inflation works unevenly. In
the present situation food prices—

[ 7

ominous word: Inflation.

Members

York Stock Exchange

■

.

level. Yet their tendency to con¬

McpONNELL&ro.
new

Spendings

tb'be sure, why they should con¬
tinue at their abnormal wartime

There

;

■—*—

term trends toward

phenomenal rise in total consump¬
tion expenditures and declining
tendency in savings is obvious to
every one. It can be stated in one

tract

new

Inflation Distorts Consumers'

consumers'

outlays. Sayings, however, do nbt
appear to - be
strongly resistant
to the pressure for larger expend¬
itures.

Prospectus on Request

widen¬

their

William H. Lough

Bought—Sold—Quoted

and

spread Of
segment

ing

Commcn

auto¬

mobiles

other durables

Bell System

American Water Works

instru¬

ments,

Members New York Curb Exchange

SI Nassau Street, New York 5

fV"

■

Co!

Members New York Stock Exchange-

higher than'other prices. Con¬
sequently, food and clothing take
a much larger proportion of con¬
1047 against $14.5 billions in all' sumers' dollars than they took in
of 1946 and $10.6 billions in all prewar days. The shares available
of 1941.
Though the two esti¬ for other; consumers' goods art
mates are not, strictly comparable, being relentlessly squeezed injtc
they usually run roughly parallel. sm a Her proportions. Inflation
If SEC is nearer right, as it prob¬ veils the process but cannot alter
ably is, personal savings are un¬ it. *
'r^:rr
! ■;
The foregoing statement is un¬
comfortably close to the vanish¬
ing point.
1
questionably true so far as it goes
/
'
V
but. is not the whole truth. Long-

home furnish¬

Common

.

Steiner. Rouse &

At this

Savoy Plaza

Class "A"

Bought—Sold—Quoted

on

& Common

request

J-G -White & Company

Reynolds & Co.

INCORPORATED

37 WALL STREET
i

.

-

NEW YORK 5

ESTABLISHED 1890

TeL HAnover 2-9300

Tele.

NY

Members New

120

'

York Stock Exchange

Broadway, New York 5, N. Y.
Telephone:

1-1815

•

Bell

REctor 2-8600

Teletype: NY 1-635

■p

Volume

THE

Number 4654

166

COMMERCIAL

I N D E X
>

'.Savings Bonds Not
—William

C.

a

_

The Steel Industry Outlook—Wilfred

*

an

2

Anthony Gaubis Takes Exception to Barbour's Concept of
Dow

-

Theory

—

A

Bank

Investment Portfolio—E.

Gold, Silver and Diamonds

Sherman

W.

Inventory

Sutton, Jr._____

Pricing

—Maurice

Under

12

i'13

7

zine to

'

iT

John I. Snyder Heads Pressed Steel Car Co. Board-

18

"

NASD District No. 18 Appoints New Officers——

-Federal

Reserve

October

Business Indexes

7

20

—

—____39

;

28

Canadian Securities

8

Dealer-Broker Investment Recommendations

8

integrity or ability to
and efficient service to his customers,

From Washington Ahead of the News-—Carlisle

Indications of Business

Bargeron .r

Act!vity-~-W--

News About Banks and Bankers-

Our

on

35

^

Reporter's Report.

Rea 1 Estate

Securities^-——-_

The State of Trade and Industry

on

Warren Brothers "C"

that
be judged

we

can

say

DUNNESCO.

7:7"'•.=
'

Members N. Y. Security Dealers Assn.

25 Broad
WHitehall

small securities firm to be

HI. H. LAMSTON, INC

thing that is made to order for

This is the sort

unscrupulous
salesman or registered representative who might wish
to cast unfair aspersions upon a smaller competitive

•

firm.

Local

dealers

in

given wide distribution it will be much
disadvantage in many ways.

CORPORATION

Dominion

$38.00
per

WILLIAM

DANA

$25.00

COMPANY, Publishers

25 Park Place, New York 8,

7:

B.

N. Y>

and
per

7

as

disclosed
Central Public Utility

Monthly
$25,00

per

Earnings
year.

(Foreign

account

the

of

•

postage

Record

—

made

in

New

York

destruc¬

the wealthy.

TO THE

Monthly,

postage

extra.)

fluctuations in

funds.

SEC REQUESTING THAT

INFORMATION

CONTAINED IN FINANCIAL STATEMENTS FILED

extra.)

rate of exchange, remittances for for¬
eign subscriptions and advertisements must

be

condone policies that are

Southwest Gas Producing

Commonwealth
United Public Utility

Gas

(Common)

EVERY DEALER SHOULD IMMEDIATELY WRITE

the

HERBERT D. SEIBERT, Editor & Publisher

capital with that of smaller firms will temporarily help
their business, in the long run it will work to their detri¬
or

SVsjs

Southwest Natural Gas

year.

Record—Monthly,

(Foreign

N. Y.

Tele. NY 1-2421

Tel. HA 2-8080

they recognize that the comparison of their large

tive to all except
per

year.

Publications

Quotation

year.

Note—On

/

REctor 2-9570 to 8578

;

Bank

U. S. Patent Office

Reg.

,

of 'Canada,
Countries, $42.00

Other

FINANCIAL CHRONICLE
,7

While

ment to advocate

Other

and

New York 5,

52 Wall St.

large firms in the securities
they have frowned on the SEC policy of mak¬

ing public the financial condition of dealers

Weekly

QUOTED

It is to the credit of many

field that

at

COMMERCIAL

—

FIRST COLONY

smaller communities will find

v

in the Pictorial Section.

Published Twice

The

SOLD

that if this list is

the recent annual meeting of
the Security Traders Association of flew York
appear

—

any

by the financial statements filed with the Commission.

Pictures taken

St., New York 4, N. Y.

3-0272—Teletype NY 1-956

BOUGHT

of

9.

page

a

competitors is contrasted with theirs.
7

Washington and You---—&&^.4——w——J—44
'See article

Alegre Sugar

Lea Fabrics

communities, will provide the general public

own

to their

Tomorrow's Market (Walter Whyie Says)__________________ 34

1-714

Haytian Corporation

honest

entirely solvent
service, the firms in this category
will be subjected to an extremely unfavorable compara¬
tive position when the capital of some of their larger

'

i.—__7

-

an

and render efficient

40

_____

Broadway

Bell System Teletype N. Y.

Punta

-Yety publishing the capital of widely segregated secu¬
rities dealers, operating under conditions peculiar to

sible for

14

——

1908

2-4500—120

an entirely distorted and incomplete picture of the
H. capacities of each one of these registered dealers.
Since the public does not understand how it is pos¬

__—__—____* 'V

Securities Now in Registration——

I

REctor

| with

42

Securities-—78
Securities
£
■]
i_" 18

Securities Salesman's Corner-.—

Established

.

Members N. Y. Security Dealers Assn.

are

a

$ their

437

______________

Public Utility

: *

7

17

Prospective Security Offerings——_______________________

Railroad

v/

_2_-7.57:

Governments

J.K.Rice,Jr.&Co.

Susquehanna Mills

honesty and ability are not virtues that
by the size of a man's bank account.

20

———

Observations—A. Wilfred May

render

It is in the best American tradition when

'16,

—

Paul Revere Fire Insurance

-

37

______________

NSTA Notes

Our Reporter

7

__

Mutual Funds

•

■,

9

y

that it could be used to the detriment of
We say that Congress
nothing of the sort!
•- /
77:i
so

dealer and his

22

_

Coming Events in the Investment Field

Einzig—Britain's Heavy Gold Lossesr^:.—__^_v

a

Time and again it has been shown that there is abso¬
lutely no connection between the amount of capital of a

Regular features
12

financial service to

Gibraltar Fire Insurance

a maga¬

;

As We See It (Editorial)__-____----__---_______________Cover

-Business Man'sBookshclf—

who has
offer, or as

anyone

ulars contained in financial statements of dealers
7 kept confidential.

Cleveland Trust Co. Compares Bond Yields and Living Costs 43

Bank and Insurance Stocks.

City of New York Insurance

enterprise system is preserved in this country, and that
the Constitutional rights of small business are
pro¬
tected, it will immediately take steps so that the partic¬

(

20

_

—

National Liberty Insurance
Baltimore American Insurance

„If the SEC is interested in seeing to it that the free

'§ FIC Banks,Place Debentures___^__ilp'%-18>7
Toppers Announce Annual Christmas Party

sell,

intended

7

16

;

to

by each registered dealer.
that registered dealers
may now ex¬

by

to

1947.

WALL STREET, NEW YORK
Telephone: WHitehall 4-6551

financial

the smaller dealer in securities?

if Secretary Snyder Urges Tax Revision______________j_„___ 14

■

mean

;^made public

Harvey Russell Will Form Consultant Firm

on

remain

losses for

be used for other

9

Edward A. Roberts Forms Engineering Firm_

sworn

Selling

days

more

tax

99

a list to
promotional purposes?
Did Congress intend that information of this sort be

15

Emanuel Spiegel Reports Improved Home Building Outlook
in New York Area__

"

The letter went

compiled from

were

Commission bandied about

Tailoring the Federal Budget—Thomas S. Holden__________ 15
-

calling attention to the ad¬
certain financial publication

pect to see the vital financial information which they
have been compelled by an SEC rule to file with the

Conditions

Economic Outlook and What to Do About It—H. B. Arthur_

.

Does this

,

—___-___-___^___r.rT3

Present

generally.

statements filed with the SEC

777".;7;7-

Stans

H.

that the figures

few

a

establish

starting in an early issue a complete list of
registered dealers with their invested capital

S.

say

8

j

Production, Not Controls, Will Curb Inflation

a

would be carried in its columns.

King________;_^ 11J

Let's Stay Free—C. E. Wilson

—Frank

U.

7

_

The Investor Looks at London—Herbert G.

sales letter

—For Tax
Only

stated that

6

Adams___l__—j

a

vantages of subscribing to

Declining Money Value

vs.

—Roger Babson

■„

On Nov, 26

4
6

__

policy.

work to their detriment and detriment of
capitalism

'

t Long-Term Trends in Industry—Donald B. Woodward—
Prosperous Germany Is Essential!—Dr. J. Goudriaan

;

,-4;.:

_______________________

A

adversely affected unless Commission
Praises firms with large capital for condemning procedure because of recognition of fact that condoning policies inimical to all except wealthy will eventually

-V

U

Investment—Roger F.\Murray—

"IT IS LATER

THAN YOU THINK"

small dealer

sees

reverses

787

Stocks for Trust

mm

By JOHN DUTTON
Writer

■-

2;':

Expanding Economy—Murray Shields.

—John Dutton

Preferred

B.S.

Cover7

SEC Policy of Revealing Capital of Dealers Un-American

;;v.'

3

AND COMPANY «*

..Cover

Buy?—William H. Lough______________;7_

Capital Needs of

Policy of Revealing

*

Cover

Sykes

Our National Security—Alf M. Landon__
What Will They

1

v

_____77—•

_

SEC

Pa*e

v-

\

Detriment to Savings Institutions

Hanson

(2367)

17

Articles.and News

77",,•

FINANCIAL' CHRONICLE

&

Edward A. Pureed & Co.
Members New York Stock Exchange

7

WITH

THE

SHOULD

SEC

ALSO

BE

WRITE

HE

CONFIDENTIAL.

KEPT
TO

HIS

SENATOR

AND

CONGRESSMAN ASKING THAT THEY USE THEIR

Members

50

New

York Curb Exchange

Broadway WHitehall 4-8120

Bell

Teletype NY 1-1919
4, N. Y.

System
New

INFLUENCE TO COMPEL THE SEC TO DO SO.

York

WILLIAM DANA SEIBERT, President

7

WILLIAM
7£-'7;»

■

-V

D.

RIGGS,
;*! ■

-1

■*'..

•*

..

Business

Manager

-V

■

•

;•

.

"1, • >

•

TITLE COMPANY

Thursday, December 11, 1947

7 Every Thursday " {general news and ad| ve^tisiiig issue} and every Monday (com5 plete statistical issue — market quotation
records, corporation news, bank clearings,
and city news, etc.).
■

We

CERTIFICATES
Bond & Mtge. Guar. Co.

Chicago
3 I

Offices:

Salie

La

S.

135

St.,

111. -(Telephone; State 0613);
Gardens, London, E. C., Eng¬

3,

Drapers'

B. V. D.

interested in offerings of

High Grade Public Utility and Industrial

state

■j i Other

are

PREFERRED STOCKS

Lawyers Title & Guar. Co.
N. Y. Title &

Copyright 1947 by William B. Dana

'

i

Company

,

Reentered
ary

25,

York,

as

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N. Y.,

\ '

post

the

in

United

Territories

Pan-American

Union,

Mtge. Co.

*Third
1

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office at New
Act of March
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7

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■

Subscription Rates

Subscriptions
Possessions.

*

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second-class matter Febru¬

at the
under

and

$35.00

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States,

U.

S.

Members

of

per




year;

in

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York

Stock

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analysis
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COMMERCIAL

THE

(2368)

FINANCIAL; CHRONICLE

&

LETTER

Preferred Stocks for Trust Investment

:

,'r.

7.

t; '

7 V,

murray*' .?•

By roger f.

;

*

Mr. Murray weighs arguments

both

down

«

and

pro

preferreds:

factors in selection of industrial

as

EDITOR:

_

• •

^

..

,,

Concept of Dow Theory

|

matter of proper selection

a

TO

Takes Exception to Barbour's

'7,

to whether preferred stocks are appropriate as"
of individual issues, and lays
(1) proper industry analysis; (2) capitalization

con as

Holds it is

medium for trust investment.

-

City

Vice-President, Bankers Trust Co., New York

Thursday, December 11, 1947

Anthony Gaubis, of Anthony Gaubis & Co., Investment Counselors,

•

contends it is not

analysis; (3) earnings analysis; (4) current asset protection analysis; and (5) protective provisions
analysis. Stresses factor of preferred stock yields as compared to yield of bonds, and says timing
'7
* 7
7
7.'7:of purchases is important.
'7
77o77:7;7:7'^77'''' ;'^'77;

Dow

Theory

as

a

"forecaster of Market Movements."

Criticizes

anti-social, since it implies a concerted action that
helps to exaggerate business cycle.

.

question is asked, "How appropriate are preferred stocks as a medium
investment?" the standard answer is that it depends upon the circumstances

When the

for trust

logical

largest

gen¬

eral

purposes

answer,

it

but
a

and

valid

is

the

ing

the

accept¬

more,

an
would

special
of

ber

my

num¬

like

to

Roger F.

pose

the further

"

.

Murray
^

,

quest'on: "Why do

ourselves

ask

Outstanding

issues

market interest show
better results, but in

general

the

about

highly

1940,- but the stocks were
unstable holdings.r V3

years.

should

I

unsatisfactory*

only 41% of the eases was every
dividend paid when due through¬
out the decade 1931 through 1940.
In another 25% of the cases, divi¬
dend arrears >were paid up
by

inter¬

est for a

60-year period
two-thirds of

?

we

appro¬

It is this bad history of

stocks

opinion,

preferred

which

class

a

as

for the

so

accounts

frequently ex¬
investments,

priateness of preferred stocks for

pressed by writers on

trust investment rather than take

to the effect that preferred stocks

it; for granted that they are suit¬ possess the weaknesses of both
able?" After all, we do not hesi¬ bonds and common stocks and the
tate to make the general statement
advantages of neither. Other ar¬
that
representative
corporate guments against preferred stocks
bonds

suitable

are

in¬

trust

for

trust investment are derived
from
the basic weakness of a

for

vestment,
without relating v our
opinion to; the * special circum¬ preferential, as opposed to a con¬
stances and requirements of each tractual, claim upon earnings and
fund. Why, therefore, do we not assets^ It is this basic weakness
include preferred stocks as a' mat¬ that has
permitted common stock¬
ter of course?

:

holders
ferred

\

The Case for the Negative
I

believe

found

in

our

and in

record

tions of the difficulties which in¬

if

turns

legal liabilities, but to the strain
relations with beneficiaries and

legatees which

visualize in

we can

times of adversity if we share the

experience of investors
dividend
omissions
and

average

with

shrinking market values.
We

fact

all

are

that

well

less

aware

than

the

of

half-dozen

a

railroad

preferred
stocks
have
demonstrated investment charac¬
teristics.
In the public utility

field, the rather good performance
of the operating company issues
has been offset by unsatisfactory
holding
company
stocks.
The
*An address bv Mr. Murray be¬
fore the Mid-Winter Trust Con¬
;

ference

the

of

Trust

Company

Section of the Pennsylvan:a Bank¬

Association,

ers

Dec.

and

zations

recent years

5w(

vestors in preferred stocks have
faced in the past. I refer not to
on

to get the better of pre¬
stockholders in recapitali¬

reorganizations.
Ir
the synthetic merger
knowledge of the has been widely used to coerce
our vivid
recollec¬ minority stockholders. As a result

the

Harrisburg,

Pa.,

5, 1947.

individual

an

preferred

out

badly, it is
badly indeed.

turn out

stock

likely" to

Proponents of preferred stocks
for

investment

trust

placed

are

the

on

the lack of

a

also

are

defensive

because

fixed maturity con¬

tributes to price

instability. In a
preferred stock portfolio, further¬
more,
it is impossible to obtain

overlooking the compensation

in the form of

higher yield which

the investor receives as compared
with

placing

term

bonds."

his

funds

in long-

Conceding, for the moment, that

industrial preferred stock,

new

somewhat

subject which
been

a

about

investments.
of

deny me the
opportunity of
discussing a
has

over

that

issues have proved

.such

answer

Examination of

issues.

record

shows

Further¬

one.

volume
for investment
consists, of course, of

industrial

not

helpful

very

the

compensation is adequate for
accepting a security with certain
inherent

weaknesses

ought to examine
this rebuttal with care. We should
make certain that the argument is
a

maturity,

we

a

diversified bond

portfolio. And so I could continue
to stress the negative side of the

citing statistics and
to
reinforce
these

ples

points and
But

let

a

ones.

ment

chance

a

rebuttal.

We

to

make

know

a

that

of

public

"this

so-called

mar¬

ket r

does

itations,

letter

has read even
Dow's

is correct in

tory

This is
home against
naming our maiden aunt the
eficiary of the policy, and
insuring

avirig

a

like

advantage.

fire,

our

record

have said is largely true,

Prince in these columns last week,
the Dow Theory is really all things
to all people. Mr. Barbour admits
at
the present time, some
Dow Theorists are long of stocks,
out of

our

don
>re

funds

income

combined.

true until

and

are

This

invent

we

will

method

for

tical way to do this in the ordinary
-

(Continued

on

m

his Nov. 17

article for "Barron's."

In this ar¬

ticle, Mr. Cortese states that "The
remain
shortcomings of the Dow Theory,

some

trust.

by Mr. A. J. Cortese

principal

as a

page

probable

basis for investment decisions,

market

students

did not confine his personal stud¬

ies, to

the

Dow

frequently

took

Theory,, and he
positions in the
which he frankly stated,
were not in line with underlying
trends as defined by the Dow
Theory.
Mr. Barbour makes a
market

.

.

Jones Industrial
in

the

Average, and 24.2

companion

a

definition of

a

rising

or

to

falling

apart from its relation

business,

the

Dow

Theory

nullified."

The industrial average

the

rail average to 23.4!
In the
spirit of telling the whole truth,
have

also

lead

of

the

the

Dow

offers

no

theory of market

Buda

Theory,

Wires

there

times when this Theory

are

a

Dow

Theory points are oenetrated.
certainly of no help to in¬

This is

vestors.

Detroit Harvester

with fiduciary responsibilities. If
such investors were to follow only

Bowser Com. & Pfd.

Durez Plastics & Chem.

the signals given at "bull market"
and
"bear market" confirmation

-

Sold

-

particularly to those

they would be confronted

with the fact that three of the

Exchange and Other Principal Exchanges

:'§k 105 West Adams St.. Chicago
Teletype NY

1-672

^vels than those orevailing at the
time of the immediately preceding
bear

market

signals—something

which had not occurred
it

Graham-Paige Motors Corporation
4%

Convertible Debentures due

wonder

anv

that

market

have

asking

a

Engineering Co.
on

2-8700

1-1286-7-8

been




LOS

ANGELES

once

and

students

themselves
Theory is a
theory to follow at the
the

sound

Mr.

Dow

~

Barbour

states

that "Like
the Russians, who can see
nothing
°"ood in this country, the critics of

request

the

Scli^maLity Lubctkin

serious

unorejudiced
whether

1956

5

Dew

Theory

see

this ohilosophv."

Co?

&)

Members New York Security Dealers Association

41 Broad Street
&

even

during the preceding 25 years! Is

Broadway, New York

Security Dealers Association

past

five bull market confirmation sig¬
nals were given at higher price

Goodbody &. Co.
BArclay 7-0100

and

ooints.

Quoted

INCORPORATED

PHILADELPHIA

positions,

near-term reversal of

Crowell-Collier Pub.

1926

to

practice.

calls for taking tentative

to

sav

New York

4, N. Y.

that

no

"The

critics

of

vital

see

in.
the

The pa¬

critics is endless, yet the

of

Theory survives.
as

good

He then goes on

trees but not the forest.
rade

Direct

in

record

Bird & Son

Analyses

York

the

is

move-

Company

Tennessee Products & Chemical

New

to

as

present time?

Members

state¬

does not want to mis¬

publ'C

Art Metal Construction

Wellman

NY

this

mentioned

ment if he

Every Dow Theory student will
really not labeled correctly, for it admit, as does Mr. Barbour, that

Foundation Co.

Tele.

aver¬

I believe that Mr. Barbour should

American Hardware

Telephone

♦special report AVAILABLE

Established

railroad

age) be broken by both averages,
all bullish implications would be

oositions in the event that certain

;

Giant Portland Cement

Ward & Co.

Robert

"ailure to realize that with respect
to stock price trends, it is merely

ket alone,

21)

115 Broadway, New York

REctor

know,

Rhea was one of the outstanding traders of his time. He definitely;

subsequently declined to 50.2 and

result, not of fault or error
in its formulation, but rather of ?

Upson Company

Phone:

the

stock
market's
action.
As all

future

subject to

Members N. Y, Stock

120

point as,to

are the

market. 3 When applied to the mar¬

Bought

Portsmouth Steel

real

forecastingthe

.

)i beneficiary and remainderman
re identical, or when, as in pen-

Aspinook
\

the

soundness of the principles behind
the Dow Theory, as a means of

the mar¬
property. While that dear
ket. However, he then says "Each
old lady is taking a sightseeing
trip to the Grand Canyon on the group will come out well over any oarticular point of the fact that
period of time, for they under¬
proceeds, and the insurance com¬
Robert Rhea circulated a bullish
stand the market" In other words,
pany is explaining that the loss
prediction on July 24, 1932, when
apparently, you can't lose! 7 - ;■$ z
was covered in full, we are won¬
the Dow Jones Industrial
Average
dering ^ what we* shall use for ; Mr. Barbour goes on to say that stood; at about 49. Mr. Barbour
fhe "Dow Theory, is a philosophy
money -to pay for restoring our
state, however, that
•or stock market analysis and in¬ neglects to
home to a livable condition.
•;
under date of Nov. 12, 1932, Rob¬
terpretation, and "the forecasting
ert
Rhea wrote that "Under a
The idea of c o m o e n s a t i o n
of the probable prevailing major
through higher yield for additional trend .and intermed iate movements strict interpretation of Dow's The¬
risks
assumed
is
really
valid, of the market." This is
ory, we are yet in a bear market.
quite in
Should K (58.2 in the Dow
therefore, only when the interests contrast with the statement made
of

is

you

merely confuses rather than

clarifies
Anthony Gaubis

to

while others

vv\

;!;;,

quent reference to Robert Rhea's

and

ben¬
that
then

fird which destroys much

these two contradic¬

points of view.

I believe that Mr. Barbour's fre¬

quite well on a portfolio of
some
of the'popular misconcep¬
preferred stocks because we re¬
ceived enough additional income, tions'of this theory,; and certainly
does nothing to clear them ud.
over and above what-we could
Judging by Mr. Barbour's letter,
have collected
from
bonds,
to
cover'the losses and to show a and as so ably pointed out by Mr;
clear net

small part of Mr.

a

will

work

agree that Mr.
Cortese, rather than Mr. Barbour,

not

adds

only what has hap¬

that any unbiased individual who

theory,

Barbour's

and

a 'forecaster of
trends.'
The for-

price

pened and says nothing about the
future of the market.'? I believe

has

on

it have stated,

rriula describes

been, $md still
is being, over¬
sold

It is not, as some students

security

short
he

bursting to point out: "While what

Diebold, Inc.

ments.

Mr. May, I do
feel that the

Mr.

did

r
1

long as it has
a
large
fol¬
lowing.
Like

explain to him that we

us

<»-

as

dangers.

Perhaps we have done enough,
at
this point,
to discomfit our

the advocate of
preferred stocks for trust invest¬

particularly

its

The Case for the Affirmative

host of minor

,

consolation to the latter

major

give

us

outset, I want to say that I do not fully share Mr. May's
Theory, and do feel that it has a certain

It is small

exam¬
<

At the

a

over-all opinion of the Dow
limited value,

realize its lim¬

to have

!

;

.

few words of rebuttal to Mr. Barbour's letter, pub¬
lished in "Chronicle" of Nov. 27, in support of the Dow
Theory?
> f-:

applicable to trust investments.
Patently, it is not, A trustee. is
serving two masters, the life ben¬
eficiary-; and the remainderman.

,

of maturities in

you

The

without

and

setting aside from preferred
average,,rate of return over stock yields enough- income to
a period of years, as can be done
provide a reserve for future losses.
within limits through the rotation At
the moment, there is no prac¬
the

case,

May I add

each individual account. This, as we all know, is

surrounding the investment problem in
a

Editor, Commercial & Financial Chronicle:

now

Rhea

followers

as

and
are

Dow

it

was

Theorv

is

in the days

Hamilton, and its
legion." Come, come,

(Continued

on

page

27)

Volume 166

Number 4654

THE

COMMERCIAL

&

•

I

CHRONICLE

FINANCIAL

4.

1

*

(2369)

Joseph J. Latin to Form

*
.

Steel

The

Production

Electric Output

,

Own Investment Firm

■

Carloadings

A

>

,

'

Widely Available Investing Tool

(Ninth of

a

Series

•

y

i

;

open

Index

Auto Production

and

j

y ;

Investing Methods)

on

Commodity Price Index
Food Price

J. Lann will shortly
offices to engage in the secu-

Joseph

Retail Trade

State of Trade

By A. WILFRED MAY

5

Industry

Business

•
-

Failures

•

-

'

Certainly
one
of
the y important
readily-available " "toolk"
calling for evaluation and re-evaluation by ,the investing public jis
r

„

:

;V

V

.

.

spited in

As developed in the Scottish and English M- j

*

y

vestment

the

from

centers

1880's

and

through-j

the first quarter of this century, the aim 6f
their operations was based on the attainment of

out

Scattered plant shut-downs

~

the investment company in its present-day metamorphosis from its
genesis in Scotland and its erstwhile adolescent growing-pains here.

and

tained at

kept

reserves.

the

in

a

high point.' yV

very

the ranks

of

the

labor

ment in

of

form

industry. • Confirming this

constantly-growing

Regarding such capital gains

as

fortuitous

not as real income is in line with traditional

and

Bi\tish

investment philosophy—as manifested in
tax
laws which have
always rejected

British

cap'tal profits

as a proper object of income tax¬
,;.y": y,.yA'"yh •v.
in this country, although there were a few'
sporadic attempts to duplicate the mutual fund::
technique at the turn of the century, due to the

ation.

re-;

.' u
• •.••*
.:•* v. • - .
employment remained very
high with layoffs in some lines compensated for by expanding work
forces in other plants. It is reported that some women who left the

In

•

•

•

•/

•

•

-

-

level

recurring income from dividends and interest, in
labor market at the close of the
Leu cf capital appreciation which, when cashed* ;
was

slightly reduced output

a

modest decline in total production last week. Notwith^
standing this small recession industrial output for the week was sus¬
a

of

war

have again taken up

employ¬

-7

••<■.

•

-

state: of r national

employment, Director
Robert C. Goodwin of the United States Employment Service re¬
ported that employment in the United States is likely to hold near
60 million throughout most of 1948.
Farm labor, he stated, will be
scarce, but will be alleviated by a program of importing Mexican
farm labor, to be announced
by the State Department, v
/
high

general
Wilfred

May

until

public's

the

World

tremendous

the

and

ray

stock-market

following decade, it was not until the late 1920's—most
unfortunately—that the American investment trust movement got
-

,'

^

.

'i

.
.

:

'

Organizations and its
notice

served

orgy of the

started in earnest.

In the spirit of these extraordinary times the Congress of In¬

dustrial

Liberty Loan campaigns of the First

War,

j

y

of securities-consciousness

lack

Joseph J. Lann

formerly
in M. S.
is mak¬
ing his headquarters at 2 North
Broadway, White Plains, N. Y.

rities

business. .He

was

for many years a partner

Wien & Co. At present he

-

A.

.

and

nine

CIO

under way for

(

unions

Tuesday

on

of last week

industry through its President, Philip Mur¬

upon

Vice-Presidents,

a new

that it would

get

a

Ralph Jerome Co.

drive

round of wage increases.

CITY,

OKLAHOMA

This drive is expected to be launched within the next few

months
by major CIO unions such as the Maritime Union, the United Elec¬
trical Workers, United Auto Workers and the United Steel Workers

Jerome

Evelyn

investment

OKLA.—

conducting an

is

bus'ness

from

offices

in the Petroleum Building, as sole

:
V-. proprietor of Ralph Jerome Co.
of feverish
speculation • characterized by Unions.Just what amount of an increase will be sought was not dis¬
billion, loans on securities of $20 billion, and j
call loan rates oscillating between 8 and
20%; and multiplying to closed, but the CiO's statement concerning fresh demands claimed
the nth degree the management and capital-structure abuses which that since January, 1945, manufacturing industry workers have "suf¬
had previously been engaged in by
holding companies and high¬ fered a loss of over 18% in purchasing power." This figure, it is fel't,
lighted by a few reformers like Prof. William Z. Ripley; promoters11 will have an important bearing on wage negotiations which will take
of the late nineteen-twenties,
\■'■■■■
catering to the raging speculative fever, place soon.;
formed "trusts" for the acquisition of securities at the same multiple- :, The effects of past increases in the wage rates of workers in the
inflated levels as was every kitchen-maid and barber then busily transportation field were felt last week when the American Airlines
engaged in master-minding the market.
Often little else than reversed its position and filed a request for a 10% increase in pas¬
gambling pools, these trading companies unfortunately endeavored senger fares because of higher operating costs. The railroads joined
Abitibi Power & Paper Co. ,t
to prostitute the traditionally respected nomeclature of "investment them by filing a second amendment on Wednesday of that week to
trust" for their own ends.
their pending freight rate petition. The roads are seeking an increase
As the SEC described the process in its
Bralorne Mines Ltd.
I
report submitted to the Congress in 1938, "the British trusts were of slightly less than 3% over the 27% at present being considered by
utilized to a greater extent in publicizing and
cent an hour
promoting the sale of the Interstate Commerce Commission, to cover the 15
Noranda Mines Ltd.
securities of American investing
companies, than as models for their wage increase granted recently to its workers. ,v >
structures and operations."^'
•
J
y It is pertinent to note, with respect to rail wage boosts, that

Founded

brokers'

at

time

a

loans of

•

$8

,

.

yyi-The

post-1929

collapse,; of..,.the entire - structure *of •.•speculation,
entailing the decimation of the asset-values of the.trading units as

for the month of October, of this

j,

come

well as

the legitimate funds, amounting to a 5-3% shrinkage in the
public's total investment in the trusts, brought on the SEC's minute
and long-drawn-out investigation of trust practice prescribed in the
Public Utility Holding Company Act of 1935. Following the Commis¬
sion's submission of very voluminous reports (of 150 and more pages)
to Congress from 1937 on, a regulatory law was finally passed in 1940.

Regulatory Safeguards
The regulations, applied through the resulting Investment Com¬
panies Act of 1940, safeguard the buyers and holders of investment
■

company
others:

among

ways,

many
:

■

Investment company capital

iqust.be a minimum of $100,000
^.before any public offering is made. '
>•;
,

.

securities in the following important

To guard against

;

over-leverage (or the equivalent of British

"over-gearing"), the equivalent of individual traders' "margin
-

requirements"

are

prescribed, through restrictions

the invest¬

on

ment

companies' own capital structures. The law orders that
f funded debt must be covered by at least triple the amount of
assets, and preferred stock capitalization by at least a double
amount of assets.

ings, and the erstwhile pyramiding,
Basic investing policies

must

are

prohibited.

way

net railway operating in-!

Lrailroads was close to $9,000,000 below that
month of 1946, according to the Association of;

same

American Railroads. *

v

'ine ngure

HART SMITH & CO.
52 WILLIAM ST., N, Y. 5

|

Bell

$76,433,466

lor October stood at

as

compared to $85.-

Hew York

HAnorer 2-0980

Teletype NY 1-395

Montreal

Toronto

255,053 in the like period of last year and represents net after pay¬
ment of

operating expenses and taxes, but before interest, rentals and
charges are paid.
*
: " " » „•
1"
There was increased evidence of the approaching Christmas

jiner

fixed

■'holiday in stores last week. Seasonal promotions stimulated consumer
interest in gifts and other holiday goods. Retail volume in the week
rose
moderately above that of the preceding week and was well
above that of the corresponding week a year ago. Luxury items at¬
tracted favorable attention in some' areas but consumers generally
sought medium-priced articles of good quality.
;" V
Retailers continued to be interested in practically all types of

HODSON & COMPANY,

'^ilnc/^'

goods and placed substantial orders. Wholesale volume rose slightly
and held moderately above the level of the like week a year ago.
Buyer insistence on quick deliveries increased and deliveries gen¬

erally

were

slower than in recent weeks.

STEEL TONNAGE

165 Broadway,

SCHEDULED FOR CURRENT WEEK

BEST SINCE MAY,

1945

;

"

New York

•

cannot be

to the shareholders at least

semi-annually.

■

are

barred.

administrative

constant

Blue-Sky laws to back

up

sequently, just

as

growing pains

(though far less

,

supervision,

together

with

this Federal statute, have corrected

all past and potential abuses as well as is

One major steel
to

all

practically possible.
sensational

and

firm, the magazine points out, has sent a letter
soliciting information in any case where the
offered that steel company's material at gray

of its customers

customer

has

been

prices. The firm's Vice-President and General Counsel has
given the specific job of tracking down any gray market steel
involving his company's products. A few other major steel companies
have been continuously attempting to eliminate any chance of their

products winding up in the gray market.

(Continued

on

page

*

33)

9 9

Con¬

ones),

the

V:.

WALL

STREET

NEW YORK 5, N. Y.

58g|

SUGAR

;

Raw—Refined—Liquid

\

Exports—Imports—Futures

j

DIgby 4-2727

!

-

allocation or control would have
any effect on the steel gray market which involves only 4 or 5%
of the total steel being shipped this trade paper observed.
Nor
can the activities of steel companies which are desperately try-

v

No system of government

'

,

LAMBORN &CO.,Inc.

been

v

the British and Scotch trusts went through their
severe

activity, according to "The Iron Age," national metalworking weekly.

market

Self-dealing by management and other abuses arising from
duality of directors' interests

ing out in an effort to wreck the black market steel racket. Dozens
of customers have been thrown off mill order books for gray market

of information

complete portfolio and balance sheet results inust be imparted

State

the

year

class

Quietly.but forcibly, major steel companies have been strik¬

chain-hold¬

be clearly stated,

changed without stockholder approval; and by

SEC's

the

•

Cross-holding between investment companies,

The

for

of

(Continued

J

on page

36)

j

v

.

III
ATTENTION DEALERSf
We have prepared

a

circular

on

Southwest Gas

STEEL INDUSTRY
and

available

for

Retail

V

Distribution.

Nat'l

Association

of Securities

Dealers,

>-£

broadway; new york 7, n. y. •"'

Telephone: DIgby




9-4224

-

Teletype:

NY

*

"

•

-

t

•

'

'

'•

*

.

'

i

••.

•

.

FREDERIC H. HATCH S CO., INC.

Inc:

'

150

"

Bought—Sold—Quoted

MERCER HICKS & CO.
Members

Producing

American Maize Produtts Co.

low-priced stocks of several speculative Steel

Companies

T%

Commonwealth Gas
the

Established
MEMBERS

T; 83 Wall Street.

N.

Y

8ECURITY

YoHc 5. N.

Y;

1888

DEALERS
«

ASSOCIATION

•

-

B^II Teletype NY 1-887

a

THE

(2370)

COMMERCIAL

CHRONICLE

FINANCIAL

&

Thursday, December 11, 1947

A Prosperous

Long-Term Trends In Industry

Germany

•

?, ■'

/?'.

By DONALD B. WOODWARD*

!K vk

Is Essential!

Second Vice-President, The Mutual Life Insurance Co. of New York

Mr. Woodward lists the following five nationwide trends with their vital long-term effects on investors:
increased marriages, higher birth-rate, greater longevity, rising national income and its redistribution,

>

>*»/*.

*

Professor

M'"

J-

''''

GOUDRIAAN

Commercial

at

University

of

\;v':-\7?l

Rotterdam,

■;*'*. / and Technical University of Delft

and drastic decreases in the cost of

machinery related to wages. Concludes analysts and investors
companies having good research units, and emphasizes importance of world peacei^

must concentrate on

DR

By

(

Political economist terms it mistake to consider American

help an
Basically, business operates to supply; and serve the people of this country—or to £• isolated element. Advocates Western countries' claims to German property be transferred to U. S. in exchange for Marshall Plan
supply and serve other businesses which directly operate to supply and serve the people;
Jc benefits.
Declares a prosperous -Germany under American
This basic fact is sometimes lost to sight in the superstructure of dollar
figures, pieces of
7 influence would be best guarantee for world peace.
ratios"?———
—-—•—■—
paper,
—

and interlock¬

———

.

CHART I

/'• ; HIGVERSUM, HOLLAND—In these days,

now that famine and
cold are menacing the victorious nations of Europe as well asthe beaten
Germans, it becomes more and more clear, that material and financial

ing corpora¬
which

tions

AMERICA

direct

the

are

HAS MORE

NEW

FAMILIES:

aid is wanted from the U. S. A.

instruments
with

deal.

we

if

THEY MUST

which

NEW

HOMES

through this
superstruc¬

NUMBER

can

we

-it-

that

the

end

result of

bus¬

«

is

to

and

vie

ser

es

the people.

r

-

to

likely

factors

have

in

ence

trends

In

16

great

industry.

trends

the

of

some

in

is

you

talk

In

the

terms

the economist,

of

happening i to

that way, I shall deal with factors
influencing the volume of demand,
and with changes in the composi¬

some

of the

by Mr. Woodward be¬

New

producing, and which are likely
persist far into the future.

York

Society of Secu¬
rity Analysts, Inc., Deq. 4, 1947.-

tion of

demand.-

'

Five major trends will be indi-

cate^ and shown, and from
view

of

a

these, two general

clusions will be drawn.

re¬

con¬

,

&

Nazareth Cement

Warner Company

.

24 Federal

Tele.

BS

OFFICE

Telephone

128

,

Teletype

RIttenhouse 6-3717

ST. LOUIS

The

high

are

to

no

Reliance

Varnish

Stix 8c Co.
INVESTMENT

SECURITIES

?

of

now

the

Members St. Louis Stock Exchange

PHILADELPHIA

SPOKANE. WASH.

Portsmouth Steel Corporation
Gruen Watch
Buffalo Bolt
Data

on

NORTHWEST MINING

Company

SECURITIES
For

Company

or

Request

New

York Curb

1420 Walnut

New York

other hours.

•

upon

but

Exchange

Philadelphia, New York

4

STANDARD SECURITIES

CORPORATION

t

and Los Angeles




<

Members Standard Stock

Los Angeles
Hagerstown, Md.

3-7253
Private Wire System between

j;

Exchange

of Spokane

Brokers

-

Peyton

Dealers

-

Underwriters

Building, Spokane
Branches at

Kellogg

Idaho and Yakima, Wn.

tal

owned

for the remaining

and

thev

looking

are

to

American y Congress.
These
billion 'are mainly intended
buying of coal, oil, food,

$19.3

for the

.

fertilizer and textiles and
seem

rather

make

one

difficult

a

believe

that

it may
task
to

European

countries, without the aid of for¬
American

mer

investments,

will

be able/to pay interest and
amortization? m bdue time. t i« • ;

single, independent problem

a

as

instead

ef

seeing it in its logical

connection with the circumstances

that

are

evils:

at the root of all nresent

indefi¬

an

period, at least for the first

decades.

This

most

that the first

means

essential

real

condition

value

to

for

foreign

rights of property in Ger¬
will be fulfilled at least for
the just mentioned period.: 77?
The second question is if the

many

amount

of German property that
reasonably be transferred to
foreign ownership, is sufficient.
The "Institut fur Konjunkturforschung" (Institute for the study
of the business cycle) at Berlin,
can

namely World War II.

irrEurope just" as its need for
habiiitation

its

of

factories

reand

a

man

ceded

to

Poland is

marriages some 20 to
hence, again in about 40

hence, again about 60
very

so on down

long

period

of

of

a

very

large

proportion of the

peo¬

in 1939

damage in

1 billion RM

1o of 1939

GermaiVnational
wealth in:

&

Land

70
50

Commerce

-A-—

50,

50
40

—

ror

and

Furniture

bombardments.

7

55

105

Assets abroad

& gold

100.

10

47%

600

Total
,

v--£\£:

&

personal effects-

Therefore the nations of Europe

a

Losses and

-

The Reparations Problem

Here

arises

the

old

well-knowm problem

and

of

too

repara¬

Nobody

mous

Versailles

who

and

has

seen

the

confirmation bv experience of his

pessimistic expectations will
speak about reparations in the

most

entrance

as

Value

50
temporary demoralization of Traffic,.--—
40
its workpeople and management Public property..
125
after five years of oppression, ter¬ Houses

who has read the fa¬
writings of the late Lord
Keynes concerning the Treaty of

of

counted

.

the

determined; creditors of Germany,

physiological
and a maid,

zone;

property situated in the territory

what

And, given the

include

Eastern

and

10

population
is

they

quoted;

are

Western

25

number

a

the

forestry. 120
Industry & mining 140

workshops, finds its origin in the
devastation caused by : the war.
the - looting of the Germans and

tions..

to.45 years

figures

loss,

there will be another very large
24 years

under the direction of Prof. Wagehas just published a study

The want of consumption goods

the stage of

that

inevitable
of

propor¬

loose

after

way

so

popular

thefirst

war:

in
"le

France
Boche

Starting for
value

total

a moment from the
of 600 billion RM of

'39, that equals about $240 billion
of 1947,- one can safely say that
the total wealth still existing in
Western

the
of

53%

billion.
third

as

zone

is

60%

about

billion, i.e., $75
Reckoning
about
oneinvested in industry, min¬
of

$240

ing and traffic (this fraction is
certainly higher for the Western
than

zone

for

both

com¬

zones

bined), $25 billion would be capa¬
tion, in which they will remain payera"—"Germany will have to ble of
transferring to the Western
for 35 to 40 years, has very con¬ pay.'* 7^77;y.;';77:
powers.
This surpasses already
Every one Will now agree that
siderable economic and investment
the total amount of $22.4 billion
meaning. It is easy to identify a the; amount of reparations that
asked for by the Paris Conference
number
reasonably be drawn from
of
businesses to which can
on
the Marshall Plan.
this means an enduring large de¬ Germany by the export of goods is
It is, however, pretty sure that
for the first decade insignificant
mand for products,
fluctuating, of
the figures given in the German
as
compared with the enormous
course, with the business cycle,
report are far too low. The wellThe
but clearly constituting a "long- havoc caused by the Nazis.
known estimate of Helfferich cal¬
transfer of machinery from dis¬
term trend.
•
.]
culated
the
German
national
mantled factories, the putting to
One business for which this sit¬
wealth in 1911 as being 310 billion
work of German prisoners of war,
uation provides a long-term trend
Mark. From 1911 to 1939 the price
the annexation of certain parts of
of demand is housing,
spreading German soil are also small means; level doubled, making the 600
billion Mark wealth of 1939. But
out, of course, into building ma¬
they keep Germany in a perma¬
terials, household furnishings, ap¬ nent state of unrest and are ham¬ the continuous increase in invest¬

pliances, real estate and the like.
:

Street, Philadelphia 2

Pittsburgh, Pa.
N. Y. Telephone—WHitehall

Floor

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

BUCKLEY BROTHERS
of

on

of

Members New York,
Philadelphia and
Los Angeles Stock
Exchanges
Also Member

Immediate Execution of Orders

Quotes call TWX Sp-43

of;mar-;

ple into the period of accumula¬

Bell Tele. LS 186

attaching

being grateful debtors of America,
are still potential but resolute and

American

entering

number and

1st

Long Distance 238-9

rate

extraordinarily large

through

St.Louis 1,Mo#

Floor, Kentucky Home Life Bldg
LOUISVILLE 2, KENTUCKY

extent

time.

street

the Bank for investment in capi¬

now

stay high, or may
presently diminish—I am not here
to prophesy. But it is a fact that

The

Incorporated

small

to 70 years hence—and

509 olive;

m BANKERS BOND ^

unlamented

may

processes

Co.

the

in

same.

marriage denotes.

v

has to be continued for

and

billion

to

even

mind, that the occupation
territory of Germany

Hist above $3 billion is asked from

goods

.

of the entire

.

and the

riages

all

Murphy Chair Company

even

incomes

accumulation—for

American Air Filter

the

of

,'

7

to progress upward.

an

7 PH 73

report

obvious

mistic

'" ■
'7 • , - :
has become
the most opti¬

*

however, it

11 believe however;i that we are
concerning the present state of the
making a bad mistake by consid¬ German national wealth.1
ering the American aid to Europe 7 From this study the following

is

LOUISVILLE

Consider II. Willett

war.

ever

guggest a profound pptfrhism among the
population—notwithstanding the fact that the
Dow aTones averages seem unable

tion

American Turf Ass'n

im¬

first

situation

The number and

Stock Exchange Bldg. Phila. 2

Street, Boston 10

Tel. Hubbard 3790

Byllesby & Company

PHILADELPHIA

that is highest in all

history, and has rarely,

been exceeded in any
other country in the world. , This

one

Walter J. Connolly & Co., Inc.

number

ever,

the altar

.

H. M.

The

prevailing are also a significant
influence, for, though it horrifies
the sentimentalists, the road to the
deposit window and the road to

Pittsburgh Rys. Co.

i

shows.

means a rate

American

thirties.

..

Sterling Motor Truck

Preferred

I

during the war, and
depression
of
the

Empire Steel Co.

Boston & Maine RR.

Chart

as

7" ■'*?-. "
This high number and high rate
in
part from
deferment

Empire Southern Gas.

\

•

national
quite

was

the

after

one.

Now,

nite

the

The number of marriages in the
United States is now very high,

result

Botany Mills

Traded in Round Lots

its

from

procedure

countries concerning the Mar¬
shall
Plan
only an amount of

$19.3

MaiTiagres.:;

v.

American Box Board

Prior

.1945

the

these

of

•

if

BOSTON

B

1940

Implications of Increasing

to

if you would like the matter stated

trends in business which they are
*A

1930

important

people, and to suggest

fore

4-, ,■>

1020

long-term

most

what

0

i1010

influ¬

What I shall

This

present

chiefly backed by the

are

countries.

is happening
happen in the

attempt to tell and to show
is

'

to

determining

in

'

what

very

many,

latter

investments

a

business¬

more

American

The long-term
population and related

in

the

Holland,

future to business.
trends

practicable

a

on

The two loans, granted by the
International Bank to France and

.

clues

is

and

'ransaetion

stricted.

to

f,;:
Study of what is happening to
the people can therefore provide
some

•

but

wealth.

money

his would

provide

goods

and the

goods
ire to be given
as a dole or that
rt is possible to place the whole

f

iness' activity
Donald B. Woodward

scale hitherto not expected.

a

Useless to say, that Germany was then occupied by
would be possible, the allied forces only for a very
highly serve the inter¬ small part; there were certain rea¬
ests
of
both
parties concerned, sons to believe in the good faith
but it is obvious that up till now and the power of the Republic of
the space for sound credit giving Weimar and the dislocation in Eu¬
to European countries is very re¬ rope was not comparable with the

OF MARRIASES

*

.

the

on

with the prob-<®

us

like foot'ng.

clearly

see

if

'em

But

look

we

ture,

This confronts

ESTABLISH

Another line of business

similarly
affected is that providing home
services, including telephones,
electricity, fuels, home publica¬
tions, gas and water. A third is
virtually all forms of insurance:
life

insurance

because

(Continued

on page

marriage
24)

pering by themselves the restart¬

ing of German production which
has to provide anyway the means
for reparations.
There

is

however

one

way

per year dur¬
period 1911-1939 makes
another doubling very likely.
7j

ing

national Income of Ger-

the

The cautious reader may

of

settling the reparation problem in
a
rather short delay and that is
to draw the indemnity wanted not
from the

ment, valued at 3%

(Continued
1 The

from

a

figures
summary

Quarterly
Economical

on page

ask if

18)

?

.

given
above are cited
of this study in the

Review

of

Institute

of

the
Netherlands
September 1947,

Volume 166

Number 4654

COMMERCIAL

THE

Washington
Ahead of the

wont to send it off

such statement

that

our

as

prosperity knew

boom

would

he

have

Work that he wouldn't be able tc

office

on

rail.

Hoover

a

the

Under

Harding,

the

Federal

R

it

we

next

soil

o

our

the

thrown

into

poverty

In

We used to meet these

farmers

poverty

the

at

watering
■and winter
resorts, traveling in
high priced automobiles, and they
always seemed to be enjoying the
boom—maybe they had gone into
the stock market,
too—along with
the rest of us.
Nevertheless, the
farmer's
"plight" was a never
ceasing
political
agitation
all
through the '20s until he really
did

of

come

of

rest

did.

us

That

trouble

just

•

the

as

-

is

"plight" up until then
jwas mostly of political making is
,

c

in

those

quite

insisted

did

never

that

that

any

days.

well

the

that

Coolidge's

I

re¬

it

was

veto

of

.

its veto I made
section

and

tour of that

a

could

find

no

more

than

passive support for the bill,
yet - a tremendous agitation had
been worked up to pass it in Con¬
gress. I thought surely there must
be

support for it in the 10th

some

Iowa

district

which

was

repre¬

sented by Haugen, a co-author of
the bill, and in a determined ef¬
fort to
where

find
I

some

support

went there.

hold there

was

Lo

some¬

and be¬

there.

none

Then along came Hoover seek¬

ing

the

Republican

nomination in 1928.
Lowden

Presidential
Former Gov¬

of

Illinois, oppos¬
ing him, based his campaign on a
% promise to revive the McNaryHaugen bill and as convention
time approached we were told
that
angry
embattled
farmers
were
to gather at Kansas City,
where the convention was held, to
support him and block Hoover.
They finally showed up, these angry embattled tillers of the soil,
100 of them at least, attired in
brand hew overalls, and their pa¬
rades with a brass band provided
the lighter side of the convention.
ernor

-

Notwithstanding all this, Hoover
was
finally convinced of the
"seriousness" of the political sit¬
uation

the

in

Farm Belt. In the
subsequent campaign I was sitting

■

the

present

boom

ary

of the most serious inflation¬

factors is the policy of making
easily available to veter¬

money

to

ans

ex¬

we

in

are

midst

loosely

so

a

Our

railroads

a

in-

flationary
boom. And all

Sherman

£.

Adams

stances

A great many

changes have also
taking place in the security,

„

■

one

"

night

in

Borah.

ator

hotel

a

The

late

in

room

Dr.

Hubert

Hoover'r^campaign
called Bcrah on the

Work,
ager

Diesel engines and our

comotive

in

for

steam lo¬

themselves

without

market

a

in

this

the

Middle

being

lost

could

save

section

West

and
it.

that
I

pretty

by

was

way

only

had

of

and

the

off

indications

They said

are.

are

that they

would level

prices

with the

the

public

killing of OPA, and
unmistakably wanted

OPA killed.

the

But

prices, for

whatever reasons, haven't leveled
off.

thoroughly

the

and

we

pause

to

take stock and

of

questions

banker

must

answers.

to

which

formulate

every

his

,own

Each of you has received

of a set of 22 questions
below)
which
represents
an attempt to summarize in a logi¬
cal fashion the steps that should
copy

(text

you

rest

can

assured

"something

is

that

going to be done

about high prices," and

done

will

likely

harm than good.

whatever

cause

more

But the political

situation is such that
has

got to be done.

"something"

>?'•

*

feeler which may

the

anti-trust

state

self,

for A1 Smith.

had

outcome

no

but

single

dustry

Borah, him¬

Maybe

illusions
he

a

about

the

gravely told Dr.




trying to guess market swings.
Others do not even seem to realize

this is really what they are
doing. At times they buy bonds
chiefly because they think the
market may go up, not because

to

bankers, perhaps

approach

they wish to

investment

to

policy.

ket

gard

on

In other words, they re¬
investment policy as a flex¬

ible

of

means

they

loans

their

in

or

general

no

earnings

attitude

with

rests

positor; but in the

case

the

whatever

reason

go

except

"to

profits'," and they then sit

bankers have found in
that trying to guess
swings is frequently an
expensive proposition. The cards
Many

recent

years

market

loans, the initiative rests with the
borrower; in the case of deposits,
initiative

sell

may

back and hope to be able to buy
back in at lower prices.

toward
bank investment policy has much
to commend
it.
In the case of

the

securities
lower.
they sell securities for
they
they

hunch

realize

position.
This

decline,
a

Sometimes

whereby

to offset changes
their deposits or in

in

occur

their

control

able

are

that

hold the bonds to
at other times,

And

often in the final stages of a mar¬

are

de¬

obviously stacked against the
banker.

average

of invest¬

In

order

to

re¬

ally beat the market, the banker
must
guess
right
considerably
more than half the time. His prof¬

ments, the?, initiative .'rests with
the banker t himself.
Investment

policy is obviously well suited to its must more than offset the loss
be used as a means of managerial of income that is incurred while
control, as a balance wheel for he is waiting for the market to
adjusting the position of the bank decline. Market fluctuations are
to changing conditions.
usually caused by events that can¬
This

not

philosophy of investments,

however, is

not

by all
I was talk¬

bankers bv any means.
a banker who
told me that he had for years fol¬

lowed

the

anyone,

to

the

but

est

when he guesses wrong,

in

occurred

deposits
tion

or

have

whatever
gram.

his

loans

or

in

or

A banker may be
enough or lucky enough
catch several market swings,

account; namely, he has kept all
available funds invested in high¬

grade bonds with maturities
quite evenly spread over a tenyear period.
Changes that have

itself

Board

Reserve

Treasury.

shrewd

fixed formula in his bond

a

by

Federal

ing recently with

be predicted in ad¬
even
by the

possibly

vance

embraced

in

long

that he will

the

run,

sooner

or

losses

later suffer

will

usu^

ally wipe out his trading profits.
Every banker should be
in

his

his

own

whether

mind

clear
or

not

in his earnings posi¬

he intends to base his investment

modification

operations partly upon guesswork
regarding short-term market fluc¬
tuations, whether or not he will

caused

his

in
•

no

investment

pro-

7

take
A

Rigid Investment Policy

profits simply for the sake
taking profits, whether or not

of

he

Some persons are rather scorn¬
ful toward a rigid investment pat¬

because

tern

he

me

of

this

type but it seems to

that -it definitely has its good
Over a period of years,

will
can

doing

subscribe
some

make

so.

to

new

issues

salesman

tells him

half

point by

a

a

If he is wise, he will

points.

buy bonds only with the idea of

reasonably satisfactory results are

holding them to maturity.

practically assured, regardless of
what happens. The banker avoids
the

/

•

'

Effect

ol

Another

Interest

Rate

Trends

risk

of making

errors of in¬
judgment which might
to be costly. What is more,

vestment

mulating

basic

your

,

laws

catch

know

banks

of

stances

are

whose

circum¬

roughly quite similar

but whose investment oolicies dif¬

;

Speaker Joe Martin has put out
a

will tell you frankly that they

ers

majority, subscribe to this maturity.

a

general

who

question in for¬
investment pro¬
prove
gram is how much weight, if any,
phy with regard to bank invest¬ he is free to concentrate his ener¬
you will give to your oninion as
ments. The first five questions on
gies upon his bank's operations to the long-term trend of interest
the list are entitled "Your basic
and the development of local bus¬ rates.
This is quite a different
approach to investment policy."
iness, activities which may prove proposition than trying to guess
Despite all that has been said far more rewarding in the long short-term
market
swings.
A
and written regarding bank in¬ run.
careful appraisal of the long-term
vestments, the fact is that there
As a matter of fact, it would outlook for interest rates is to
is
little
unanimity
of
opinion
some extent a matter of judgment,
seem that the general principle of
among
bankers with respect to a
well balanced maturity distribu¬ not entirely a matter of guess¬
many of the very fundamentals
tion, should be a part, in fact a work.
of bank investment. For instance,
In
substantial
analyzing the outlook for
part, of every bond
I am quite sure that all of you
account.
A
balanced
maturity interest rates under present-day
consider first your basic philoso¬

on.

Fix

to

permit in¬

to

fix

fer

,

very

sharply.

investment
flect

policy

differences

Differences in

voluntarily
are

getting

another

NRA, "to take the chaos out of
business," started here.

:

provides
protection
against any eventuality. The only
real question, it seems to me, is
whether you are to adopt this
principle for

as-

or

address

by Mr. Adams at
Association
Study Conference,
Ann
Arbor,
Mich., Dec. 4, 1947.

the Michigan Bankers

conditions, certain key facts must
be

it

kept in mind. For one thing,
seems
apparent that future

changes in the level of yields on
entire portfolio government securities will depend
to a very large extent upon the
cise
some
degree of flexibility policies of the monetary authori¬
with regard, to some part of your ties: the Federal Reserve Board

re¬

the basic

prices.
''An

we

distribution

frequently

in

J

hadn't been able to find

even

bankers

some

Some of these bank¬

future.

near

circum¬

respect

are

■

So

Borah

toured

conditions that

country.
So they must sell
to Europe and in order that they
be followed in making a thorough
may. do this, we must give Europe
reappraisal of your bank's invest¬
money with which to buy the lo¬
ment program.'. The
investment
comotives. There are only a few
results that you will obtain from
hardy souls in Congress who want
your
bank's securities portfolio
to stop the colossal artificial
pros¬ over the
years to come will be
perity device which the Marshall
largely determined by your atti¬
Plan essentially is.
tude
today regarding these 22
But while the politicians, the
questions
and
the
manner
in
Administration and the Republi¬ which
you apply your answers to
cans
alike, want to
keep this your investment program.
"prosperity," they are alive to the
Basic Approach to Investment
agitation
against
high
prices.
Policy
The
Republicans feel
they are
To begin with, it is essential to
being held responsible for this

is

phone and excitedly told him that

new

exist tomorrow? If not, how
should we modify .our investment
policies
in
the
light
of
these

a

m

man¬

tele¬

the

and

may

as

"

Lincoln, Neb., with the late Sen¬

beeh'following appropriate for the
changed conditions thay exist to¬
day

permit, with
as well?"

earnings

fall.

Important

There

change their investment position
substantially from time to time
according to their guess as to what
the market is likely to do in the

that

as

investments

your

held until they are paid at matur¬
ity.

the

insofar

the

permanent com¬
mitments which will ordinarily be

are

and,

in

swings

whether you are

or

less

or

more

position with respect to safety and

acquainted with the old maxim
that the higher we go, the harder

been

as

being primarily a means of ad¬
justing your bank to a satisfactory
liquidity

we

in

long; run
their investment results and

of us are well

one

going

are

influence

■

better syndicated

motive behind the Marshall Plan,

as¬

deci¬

a

question on the list, as
you will see, reads: "Do you re¬
gard your investment portfolio as

the

of

f rst-class

that

Sokolsky,

such

The first

this. to
weigh carefully all of the ele¬
of the ments of our investment programs.
columnists, gave
In doing so, there is a variety
striking example recently of the

George

underlying

have

upon the condition of their insti¬
tutions.
■■

are

buy homes. It is silly, of
changing conditions? It may be
to talk about tightening
unusually important at this time
bank credit when money is

flowing around

going to regard

not

loans

panding
rap¬
idly. In short,

course,
up on

policy.

are

which they oper¬

upon

which

bond market

upon

inflation.

or

of the

aware

short-term

guess

funda¬

levels;' bank

make

to

bankers

cases,

and

basic

sive

of the Re¬

Marriner Eccles pointed out
a
House' committee that

before
one

want

some

the

unprecedented

markets.
The
long
downward
working in the knowledge that it
trend in interest rates came to an
did stir up a lot of political
agita¬ end
early in 1946. Recently Gov¬
tion, and also in the knowledge
ernment bond prices have declined
that if Coolidge had done
any¬ rather
sharply and some issues
thing to deflate the boom, there is
are
selling five points or more
no telling what would have
hap- below their 1946 highs.
There
oened to him.
And there is not
have been even greater declines
one of them from President Tru¬
in prices of municipal and cor¬
man on
down, who wants to stop
porate bonds.
; V; .V
;

They all

to

regard

sumptions

at

them.

fact

McNary-Haugen bill meant
the end of the Republican party
;in the Middle West. Shortly after

:

be¬

are

iticians

Belt

the

$ the

-

the

are

of the
dire political things which were
predicted by, the Farm Belt pol¬

by

member

f

got

bunk—
of politicians are

the current crop

bankers

ate

largely

was

individual

of

incomes

spite of this plain history—
that the uprising of the
following their so-called
Board

sumptions

sky-rock¬
eting;
farm

fact

deflation at the hands

is

full

even

farmers

serve

going

v^What will be the impact of cur¬
gestures,
rent 1 and
future
developments
but
no
one
wants
to
stop
it.
Neither does any group of citizens upon our banks' investments? Are
the'investment
policies we haye
want it stopped -as it
'applies to

indicated
Farm

%

the

Business

In

Dr. Work

was

every bank should be subjected every so often to a
thorough overhauling, a careful and critical reappraisal.
Today we are confronted with
rapidly changing conditions which have vital implications for bank investment policy.

mentals of bank investment

we

portfolios.

of

and real estate

phoned Borah

that

and proper supervision of bank investment
The investment
program

oper

Middle West had been safe all the
time.

overnight.
stricken

and

no

with

ginning
of i. Hoover's
undoing,
though the election proved the

Carlisle Bargeron

City

liquidity and earnings. Urges proper maturity distribu¬
risky as sets. Cautions against trying to guess bond market
substantial change in government bond interest rates.
Stresses need of close

commodities

the "Chief' authorized the

say

Comp'any, New York

or

blast; prices of

to

items and

minutes

statement

10

were

be

Hawley-Smoot bill.
30

'

Trust

&

thin*

was

set of

one

within

Belt

years,
tillers
of

•

the

politicians for
the

first

opened up, the
couldn't be confined to

revisions

from

Farm
<

would

make

subsequently turned out, wh^p

any

were

hear

do

the tariff act

from

what
to

would

that the

unless

to

the tariff for revision of agri¬
cultural items only. Of
couise-, as

rate,

and

West
him

up

upped the dis¬
count

Middle

authorized

statement

ne

e-

Board

serve

the

ave

of

out

,

<s>-

probably been
ridden

no

swings, and foresees

some

bounds,
V
The fact is, of course, tnat had he ever done
anytning to check

the

Bank

folio to its situation in regard to its capital,

another rise with

on

Vice-President, Central Hanover

tion and the elimination of undesirable

the Coolidge Adminis¬
was that he would never do
anything to discourage the boom
led to the 1929 collapse. Instead,
frequently when the stock
was

(2371). 7

Mr. Adams discusses problems of basic
approach to a bank's inyestment policy and its relation to the
peculiar circumstances of the bank itself. Holds each individual bank must adjust its investment port¬

;jl;: One of the damning indictments against
market faltered he

CHRONICLE

By E. SHERMAN ADAMS*
Assistant

By CARLISLE BARGERON

which

FINANCIAL

A Bank Investment Portfolio

From

tration

&

your

whether you will plan to exer¬

holdings.
Another of the $64

whether

you

are

questions is
going to try to

and the Treasury. It is argued by
some
that the monetary authori-

(Continued on page 34)

COMMERCIAL

THE

I: (2372)

&

CHRONICLE

FINANCIAL

■

Thursday, December 11,1947

Gold,Silver, Diamonds
Dealer Broker Investment

Versus Declining

Recommendations and Literature

Money Value ,.;./

It is understood that the

By ROGER W. BABSON

Southwestern Public Service

}

In

talk

recent

a

the

before

Society

York

New

progressive
depreciation of various currencies
and sees possibility of U. S. dol- lar continuing to decline in pur¬
chasing power. Says all people
are unanimous
that gold, silver
and diamonds are only things
which, at all times/ are worth
something.
' ;-

Analysts, Mr. Herbert Nichols, Chairman of the Board of Southwest¬
ern Public Service (assisted by Vice-President Stanley), gave an in¬
teresting summary of the company's history and progress. The com¬
pany, now a well-integrated oper-f
———
ating utility with annual revenues amount which is being amortized
approaching $12,000,000, has de¬ through earned surplus over a pe¬
veloped from a former holding riod of years. The financial struct
company, Community Power & ture is approximately 60 % debt
light.
This metamorphosis was 15% preferred stock and 25%
accomplished by selling a large common stock equity, and it i
of

number

scattered

subsidiaries

and

welding the remainder into a
unified system.
The area served
(principally in northern Texas
and including small sections of
Kansas, Oklahoma and New Mex¬
ico) covers an area larger than the
state of Pennsylvania.
All prop¬
erties, with one small exception,
are

interconnected

" now

with

the company's policy to maintain
these ratios.
While the common
stock ratio may appear

somewhat
'ow, it is interesting to note tha'

about

23%

an

reason

The

tive in attracting new business to
their localities. The present trend
toward decentralization of indus¬

try is also exnected to work in the

company's favor.
The company's nine steam gen¬
erating
plants all use
natural
gas, which is obtained
able contracts having
years to

favor¬

about

six

Thus with the in-,

run.

troduction

on

of

new

generating

is

average of about 18% for

all electric utilities. The

at Amarillo can direct the flow of

many of whom head local Cham¬
bers of Commerce and are ac¬

revenues

currently available for common
dividends, which compares

with

lower

the entire system, in¬
creasing the operating efficiency.
Farming
(including irrigated
acreage), oil and natural gas, and
cattle and sheep raising are the
principal activities in the com¬
pany's
territories, The present
prosperity of the oil industry ac¬
counts in part for the company's
rapid growth.
However, another
factor in growth is the activity of
the
company's
local
managers,

gross

stock

high-voltage lines.
A load dis¬
patcher in the new office building
power over

of

to

appears
-

than

average

-

•atio. :

principal
a
much
operating

be

While it is
return

earning

net plant account

(over

7%) the Texas law permits

earn¬

ings

on

to 8%. There is

up

mission

rates

regulation

being

individual

in

that

regulated

municipalities.

poll of

that

there

customers
is

from

70,000

kw

in

1942

load

to

166,000. recently and an anticipated in¬
crease to 400,000 by 1953. October
revenues were

whereas

all

30%

last year,
utilities in

over

electric

September showed

a gain of
only
13%. With this rapid growth and

the lower generating
costs, net
operating income (before Federal
taxes) jumped 36% in October
and 22% in September,
compared

with

a

16% gain for the 12 months

ending Aug. 31.

Earnings for the

stock

common

increased

from

fm

interested

more

in

Dillon, Read & Co. have acted
bankers

as

iome

for

the

years, and

lancing

the successful fi-

record

is

indicated

by

the average yield on its bonds of

2.85% arid

on

the preferred stock://

3.72%. The company, recently

of

sold i

3%

privately $9,700,000 30-year

bonds to yield 2.97%.

to register

pects

>f

are

too unfavorable.

perhaps

stock is

common

if market

summer

$1,000,000

now

ex¬

about $3,-

soon

100,000 of preferred and

ditions

It

con¬

Sale

When the

common

.•xtra

subscriptions subject to al-

otment) and 95% of the outstand¬

on

The

having

company
excess

is

fortunate

capacity,

permits sales to other local

in

which
com¬

panies, including Electric Bond &
share subsidiaries. By gearing its
expansion program a little ahead
of Immediate
requirements, it Can
insure prompt and efficient serv¬
ice to its

own

'customers;'

The company has
virtually com¬
pleted the adjustment of its plant
account to an original cost
basis,

except

for'

a

remaining

small

the

counter

ton.

Air

that

At

v

dend payments appears possible in

P h i 1

d

a

e

1

Do.,

ton

next

times.

six months

or

so.

m

e

m

d

n

safest

btamabV—

Also available is

~*ouds.

son

Within

20

I

years,

be¬

Bonds

It is

Also

true that, the German Government

tbena

redeemed

"Marks"

in

Rejoins

special report

.

Doyle, O'Connor &Co. |
(Special

to

Tae

CHICAGO,
Walsh

has

Financial

ILL.

—

rejoined

Chronicle)

Thomas D.

the

staff

of

Doyle, O'Connor & Co., Inc., 135

—

available

bnf

and

Western

reports

are

on

Oil Consolidated

Maryland

Railroad

Company. ^'V

T

cents

to/, 1/10.000 of> one cent.
Moreover, holders of German in¬
surance policies and bank deposits
suffered the same loss.
Nothing

A Boeing

Airplane
Company —
Special review—John H. Lewis &
Co., 14 Wall Street, New York 5

like this will happen in the United
States.
But inflation has always
since the days when the
European Kings dinned their
people's gold coins. Inflation will
existed

Cleveland-Cliffs

old

continue

to

be

a

factor

and

70 Pine

the

I

j that

China?

Thomas D. Walsh

—

Corp.—

Comstock

&

■A'APlAkAAA.

Mr. Walsh

South La Salle Street.

has recently been manager of the
trading i department
for
J.
J.

O'Connor &

Co.

'

.'

"

,v

Corp.—

CO M l NG

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

EVENTS

Graham-Paige

Motors

Analysis—Seligman,

was

New York.

Also

'

lady,

Tzu Hsi, the Empress
who never heard of
The budget was al¬
balanced.
*'"'/*' •

In

available

Foundation

Dowager,

Co.,

neering, and

Communism.
ways

Coal

County

information

,

worth 500 in American gold. China
was ruled with an; iron hand by an
old

—

Co., 231 South La Salle Street,
Chicago 4, 111. A '
'
'

have

time the Chinese dollar

Co.

Street, New York 5, N. Y.

Franklin
Late

What Has Happened in

Iron

Analysis—G. A. Saxton & Co., Inc.,

.

are

Field

Investment

analyses of

Wellman

Tennessee

Engi¬

Products

& Chemical.

(Cincinnati, Ohio)

Dec. 15, 1947

Cincinnati Stock and Bond Club

.

Annual

"

ican dollar.

Johns-Manville

Corporation

—

Summary and opinion—E. F. Hutton

&

Company, 61 Broadway,
Y. aA

New York 6, N.

Long-Bell

Lumber

Company-

Revised analysis for dealers only
—Comstock & Co., 231 S. La Salle

Street/ Chicago 4, 111. f "

This has not been due

:

/

Christmas

Dec.

'

Annual

Toppers

at

.

,

the

at

*

..

.

(New York City)

22, 1947

the

Christmas

Hotel; St.

George,

Brooklyn.
Dec. 24, 1947

Annual

to any

Party

Hotel Sinton.

Party

(Toronto, Ont., Can.)
Tor¬

Luncheon

Buffet

onto Bond Traders Association at

The

Michigan

;

Steel

Casting

Co.—

Analysis—Adams & Co*, 10.5 West
Adams Street, Chicago 3, ill.

the

King Edward Hotel..

Feb. 3,

V

;

19^ (Chicago, Hi.)-

;

,

Mid-Winter Dinner of the Bond

Truth About France

;

visited

Portland Electric Power

World

War

clients

there

Portland General Electric

looked upon today.
War I this franc

Common

clined to about 50.
due

&

had

Paris,

and

The

;/ Northwest Utilities—Analysis— Traders Club; of Chicago at the
Ira Haupt & Co., Ill Broadway,
La Salle Hotel.
New York 6, N. Y.
D I

French

March 5, 1948 (New York City)

Co.

6, N. Y.

!

Portsmouth Steel Corp.—Data-

Buckley Brothers, 1240 A Walmr
Street, Philadelphia 2, Pa.
Also PvailahV is late infov-o*

During World
gradually de¬
This

was

tion

not

but to failure
budget.
Just preceding World War II the
Vane had declined to around 20.
Since then, through further failure
to balance the budget, a huge gov¬

Gruen Watch Co. and Buf¬

the franc has declined to

New York

Portsmouth

Steel

Corp.-r-Re-

Roy Prosser & Co., 52
William Street, New York 5, N. Y.

March

1948

12,

'

(Toronto,

/
Ont^

Canada)

Annual
Bond

Dinner

of the Toronto

Traders Association at

King Edward Hotel.
Nov. 15-18, 1948

••

Dinner at

the Waldorf Astoria.

•

sume—J.

Security Dealers As¬

sociation 22nd Annual

-

^

ernment debt and other economic
causes,

on

falo Bolt Co.

to dishonesty,

to balance the

Gilbert J. Postley

in

often.

::

I

I,

franc, at that time, was worth 200
»n: American gold.
It was looked
upon as Stable as our; dollar^ is

6s, 1950 & 7% Prior Pfd.

Chicago

Walsh

-

Vorth American

these Marks, hart dromed from PA.

numerous

Direct Wire to

appraisals —
& Co., 15 Broad
Street, New York 5, N. Y. Vv.;

Voorhis

Oil
Company—Special
Walston,
Hoffman - &
Goodwin, 265 Montgomery Street
San Francisco 4, Calif.

these

saw

Government

Co.

eport

practically worthless.

come

Investment

—

Kalb,

Bishop

time, sold for about 240.
German

Westinghouse Electric Corpora¬
tion

S.

at, that

Reicbmark,

.

U.

a

Portsmouth Steel and the Up¬

on

bonds

than

better

A//-;>AAAAAX&jAAA

-

New York 5, N. Y.

-

the

as

&

Aspinook Corp.—Special Report
—Ward
&
Co.,
120 Broadway,

ing the Reichrrark 3s

Babsoo

Roger

Kidder

M.

-

29 BROADWAY, NEW YORK

Investing Co., Inc., 238 Genesee
Street, Utica 2, N. Y.

Street, New York 5.

-

mc-

were

1 Wall

N. Y.

dishonesty, as was the case
with Germany. It has happened
current yield is 7.6%- and the
through a constant failure to bal¬
orice-earnings ratio; is about 8.4 ance thehudget.
the

Mills,

Valley

Reduction Company, Inc.—

Memorandum—A.

pbia and Bos¬

/A Before




Banking

a

around

111

:

growth issues—Thomas E.
King & Co., 39 South La < Salle
Street, Chicago 3, 111.
P~Ji y-'y^iyA * A *

Just before World War II, I was
21, the in China inspecting the Shanghai
approximate 1947 range being 25- Power Company.
At that * time,
20. The company's policy is to
Chinese dollars were worth 501 in
pay
American
money or it took only
>ut about two-thirds in
earnings
20 Chinese dollars to get a U. S.
in dividends. The current rate is
dollar. This was only a few years
U*60 and with the current growth ago. Todav. it takes about 150 000
in earnings an increase in divi¬ Chinese dollars to buy one Amer¬
>ver

& Mohawk Cotton

Utica

Inc.-*- Circular — Mohawk

!

Times Earnings—Memoranda on
several

time, the lead¬
ing banks of
New
York,

''J'P.

4m'

.

figured

Y.

always been interested
sued and the offering underwrit¬
in China.
My ancestors were in
er
In March 1947 the
company, the Chinese trade, sailing shins
from Gloucester to China ports. At
offered
about
65,000
common
,hares to stockholders (permitting

San Francisco 4, Calif.

speculative

Do., 150 Broadway, New York 7,

preferred value of every currency will prob¬
ably continue to decline. ■
■
«

tock is offered, rights will be is¬

Co., 1 Montgomery Street,

and stocks

on

teel companies—Mercer Hicks &

was as

being negotiated with

Dillon, Read.

Master Metal—Cir¬

the industry
>f several low-priced

statistician

for

for

company

Trust

&

House in Bos¬

I

are

$1.80 in the 12 months ending Aur ing stock took advantage of these
gust 1946 to $2.50 in the 12 months
Vights/
ending October 1947 (in both
The stock is currently selling
cases earnings
were
the present number of
shares).

<

f,

service.

good

1898,

a

indicated

stock, but this need not be offered

system

in

re¬

rates and that customers

over

Steel, The
cular

of Technology

dissatisfaction

no

National Bank

—

Institute

setts

o

cent

Public

v

the Massachu¬

the

A

Street, Chicago

;

cumb &

to changes which I have
personally witnessed in my short
lifetime. My first job, after grad¬
uating from

state,

by

def¬

no

West Adams

105

3, 111.;

Special Situation—Analysis of Unterberg & Co., 61 Broadway.
New York 6, N. Y.
85-year-old New England com¬
pany with large dividend accumu¬
lation—Raymond & Co., 148 State
Public Service Company of New
Street, Boston 9, Mass.
Mexico—Circular
Brush, Slo-

relate

com¬

no

*

Co.—Third quarter analysis—C» E.

today, here are some facts for
readers to consider. Moreover,they

fairly high

a

until next

in

making

Developments of the
developments in
the industry—Vilas & Hickey, 49
Wall Street, New York 5, N.Y. /

in

tional average despite the large
amount
of
rural
area
served

by

increase

am

company's residential rates
average slightly less than the na¬

equipment fuel costs per kwh are
actually declining instead of ris¬
ing rapidly as with coal burning
companies.
;
The phenomenal growth of the
company's territory is indicated
the

This week I

Railroad

Week—Current

inite recommendations to anyone;
but with the mess the world is

,.V ;:v, "

Vr;;

firm* mentioned will be pleased

send interested parties the following literature:

to

Mr. Babson reviews

Security

of

.

(Dallas, Tex.)

the

/

/

Prentiss-Wabers Products Co.-

National Security Traders Asso¬

Analysis in current issue of "The
AdamsJournal"—Adams & Co., ciation Convention.

'■'UVflwawtMirK-tAq»;

""ft'Wri •»•+■'<•

Volurns 166

Number 4654

Britain's

THE

COMMERCIAL "&

/'

By PAUL EINZIG

.

•

.

Emanuel M.

>

of Home Builders,
says private
50% more housing ih 1948 than in 1947, and points to
heavy applications for FHA loans, resulting in exhaustion of funds for that purpose, as eridence of
high attainment in private home building. Fears Marshall Plan may lead to mater.als
shortage. * v
At. the

ENGLAND.—The British Treasury's monthly gold
bulletin stated that during November British sales of gold amounted
to £48 000.000. This brings the total of gold outflow since September
to £103,600.0-0.
Even allowing for the purcnase of some Soutn
Andean gold^
\

ueht

of

Nation
Assoeiat

,

spend in South America the! pro-

net

Britain.
Since : :th;e
amount
o>
sterling accepted in payment for
exports f by
many; countries
is
limited, the use of sterling by
third countries reduces the extern
to which Britain is able tof pay

loss

jean-

not be much

than

less

100,000,000,1

so thatfthe
gold reserve

be jnow
where

must

so m e

r

u

o

the

.

;

l

I.

up

I

hand

?

;

been
hv

"

that

$280,000,000

after

<

were

re-

V

:

must
of

amount

when

have

had

dollars

convertibility

in

was

suspended. Allowing for this, for
the purchase of $220,000,000 from

,

the International

V' ""1 and

for

the

balance

.

of

Monetary Fund,
of

use

the

of

some

Canadian

the

dollar

credjt, i| is possible to estimate

i'j

Britain's ^ gold
and
dollar
loss
3 ,V, since August 20 at about $1,000,;I

;

;

;

e

COO,000,

-

X--

.

f:

The

-

.

,

remaining gold reserve of
$2,000,000,000 would be ex¬

about

hausted before the middle of 1943
if the drain continued at the

?

rate, and if

oP both

worst

worlds.

She

IP,
{■>;\

be forthcoming. So' far the !outflow seems to continue1 almost
unabated.

Iff;

-not

"

drive'has

export

noteworthy

any
most of

and

the

import
not yet begun to pro-

have

cuts

-

(

The

shown

yet

results,
;

has

Day,"

Mr.

''When

we

Britain's

were

balance

trade

extent

the-current

ments

the

of

balance

trading

on

does

short

not

duce their effect. It is hoped

:

official

circles

that

in
long

before

the British adverse trade balance

will

more

cash,

or

never

we

pay¬

account; Much

ances.

is

of

In this

old

our

decline

materially.

time,

same

the

cuts

reassuring. For the gold drain is
.well in excess of the adverse bal¬
ance, allowing for invisible as well
as

visible items. In addition to the

loss

of

gold

Britain's
has

I

:■

be

to

in

payment i for

trade

own

deficit,

gold

Area

goods. It is

British

of the

loss

of

adverse

^Moreover,

gold

is

there

in

much

from

watertight.

number

of

While

minor

xhe

offenders

who

U

As

'i

Dublin

be

of
■■

i '■ ■V; v..
i

/Hi!

be

their

own

it

seems

vears

with

is

reasonable

a

recent I,

wholesale'

weeks

amounts *■;. are * believed
evaded the

the

note

of

the

need
.

not

\/;

be

•

shared
.

.1I

by

■

J'-. Unfortunately

Britain has f to
supply gold not only to the Sterl¬
ing Area but in practice also to
countries

many

Area.
on

T^e

belief

outside

that

this

for

purchases

which

that

drain

means

of
that

British
to

re¬

To,

a

large

very

remedy lies in
British

Britain's resources ceased when

convertibility

convertibility

suspended

was

entirely mistaken.
was

For

is

thing,
not entirely sus¬
one

Cripps, like his
Dalton,
resort

the prevention

.

Spain

in

Area,

many

was and

it could

countries.

is in

a




still

Thus

position to

tries
or

do

not

pay

indicate

1947.

1,

of

the

that

about

are ;n

far

Many more appli¬
process./New Jersey

into

the lead in thr

'

;'';Ir33l.

the matter of sale housing,

.

for

the

ar^if'ic
It is

bas issued commitments covering.

ap-iroxirnatp]v'

year

17,000

units

in

all

government

ihat

We found

material

and

costs

our

probably the highest'in the
Country, but individually we were
in Washington of this fact,

«It

thereupon oecided by

was

small

iZe

$20,000

and

> up
business

locally

are

group

in this

a

that

area

it

to organ-

itkr^l associations intp this

our

Home Builders Council

nn!ninnf^iiTn;iparticulw
problems
opinion from the in-

my

formation

have

I

gather from
from
th

s

mgton

been, able

reliable

to

and

sources

private builders throughout
area,:that our industry

entire

!year foAml
1948 at

anil pre-

least 50%

L

•

during

^4

the

pfr'of Irr
j.

Richards

?

first

c

week

0

re-

Nov^•. 1 applica0

f>nn

i

$50,000,000

1-

iPer
-+rGk'
1 within a

m

Nov.,

four davs

it.

i.

x

1
period

classes

were

started, but we estimate that about

the

spring

of

evidence that

1946,

A1

Gross

could not satis-

we

factorily
create
houses at CI
a WAvjVvV
J
V*
VW vv AAVMWVV
$10,000
cfilin?
thic r>f>iiincf
4^-.
ceiling, this
ceiling was micao
raise 1 in
»

#

u^c

metropolitan

of

area

New

total dollar volume of

a

that Commissioner

reason

mortgage commitments
Congress gave further; au-

thorization to it,
I

which was proposed naThis was accomplished
February of 1946. When,

York

FHA

unt'l

to

and his committee cfered further

I the
of

•

$404,000,000 in applications were
filed
with/regional
offices
throughout the country.
It' was

for

able

was

a $10,000 ceiling for
rather than the $8,000

area

early
in

Commiss<.°n.er

*

up to
tions had been f^led ut the rate

since

don> this committee
this

FJ1A_ reported

cently that
nn

Accordingly,

tonally.

i

fices

more

starts for 1947, ceiling

4

to the Wash-

authorit.es.

presentation of accurate facts
and information to Messrs.
Foley,
Wyatt and thereafter Mr. Creeupon

mS
have created
hous-

1

ttu a

At the moment

Ooft,yoil are Jamlbar.with

ft®

5^lve 1S^U

y

•

jEee"

^Ah rAC^r?At5}°U+Hng E.xpedl,ter'

+
^ nnn
?? size of a
'009 square feet. Again,
?ur Washington committee headed
was ab:Ie to have this

fff^{

Si,J!alse

square

eet ln February of 1947.
"In

the

early days of Title 608
ng Committee has
unanimously when many of us found objec¬
tions
to
the
-ecommended I to
Congress : the
processing of applica¬
tions under this title. A1
massage of a Bill
authorizing FHA
Gross,
to ensure an additional $1 bil- who meanwhile had been desig¬
nated by our National Association
hon to cover the period
up! to
March 31.' /This is indeed wel¬ as Chairman of the Mortgage and
Finance Committee, worked out
come news and w'll enable FHA
can

report that the Senate Bank-

to process applications
during the
coming winter months.
; ;

many solutions of the problem
with the top officials of FHA.

/"This

"At
the moment Congress
is
considering legislation commonly

,

,

Home

Builders

.

Council,

which

cons:sts of builders' asso¬
ciations active in the metropolitan
area

of

New

early in

present

h

:

are

to

the

as

"Marshall

AU of these local

affiliated with the

heard

formed

was

Home

of

I- the I tremendous

ere

referred

Plan," to assist the needy nations
of Europe.
This morning we have

York,

19451

struggle wh'Ch we as an indus¬
try had to endure s'nee 1941, The

discussion

as

to

the

impli¬

cations of this plan as it
may af¬
fect

Industry. Unquestionably,
the results of the Marshall Plan
our

will

have repercusslors with

spect

to

re¬

supply of materials.
important
factor
coupled
our

creation of the National Associa¬

Tins

tion

with current recommendations be¬

was

a

most fortunate step cn

""he part of the leaders of

our

irt-

'ustry.

/■

"Th's
was

Home

formed

as

Builders
a

Council

result of

neces¬

.

ing made to Congress and re¬
quested by Pres'dent Truman for
system

some

materially
constantly

problems by going d'rectiy to the

industry

government agencies and

attempt-

is

cumbered

of

hamper

,

for

program

sity.
Many cf us in this area were
atte^ot'ng to solve our individual

1948.;

controls,

tve
We

be

must

vi^^ant so that
rot orce aeain

with

will

housing,
our

en¬

unjustifiable

re¬

strictions and controls."

ACTIVE MARKETS

Amott.Baker&Go.
INCORPORATED

Equitable Off. BIdg.
IT holesaler and Retailer

Rights

period

coun-

in goods

in convertible exchange.

ahead

at

about 30% of the foregoin*.

..

which

Jersey

ending Sent.
30,
1947,
approximately
15.000
units have actually been started <
and that of this number aoprox'- \
mately 11.000 are already
pleted. Of the total number, FHA
that

the blocking of the

of export to

New

ranks

reports

"In

drastic

Dollar

used

are

we

the best reports available indicate

Mr.

unfunded old sterling balances or

be

333.3:::/'
of

the State.

on

ill the

forthcoming, very

early davs of the ^08 program and ;
the "results are evident throughout

.

longer usable for payment

as

that

commit¬

r

pended

steps such

such

,

and

actual

am

ex¬

was no

Aug. 20. While sterling

I

more

process
of

be

State

jumped

Stafford

much-needed

,

;will

cations

is, however; reluctant to
to

many

in

moment

Nov.

extent

predecessor

that

read.,

8,800 un'tc of rental housing were
committed under Title 608 up to

degree the
of the

Sir

bracket

and

since

I need not recall to you

are

by

was
entirely
wouid be; advantageous
builders
of

Tru°r

These

in
the
are

1947

of

Builders.

FHA

the hands

authorities.

tre¬

country in the erection of renta"
horsing units" actually under con¬
struction.
Many: of these have
been completed and are occupied.

Bank

Britain receives
no
foreign
change for her exports.
j :

by the

several

have all

you

createu

tional pattern.

were,

Association I

this

of

goods,

that

got off to a
recently an¬

of

shortly.-

assume that part of the British
of England is attributed in • part
gold reserve Of $2,000,030,000 is to the return of such notes. Their
regarded as Britain's own reserve Proceeds are also used in payment

which

controls

wh'ch

ments

control; the decline of

circulation

homes

the

National

informed

have

to

were

associations

announcement

large

very

office

FHA

"The

smuggling

starts

mendous Title 608 projects about

projects

to

;-'b V•;<

There is also a
through

In

local

the. British,

I.

New

areas

nouncement has been made

al¬

supposed

in these

slow start, but more

to

And

the part of the

on

these four count'es in

program

control in Eire

Africa

identical

capital

Town.

exchange

South

of

new

produced annually approxi¬
mately 18 000 housing units.
For
many reasons the rental housing

to

anybody;

"P&'

Cape

or

though
and

transfer

a

year

York

belong to the
Sterling Area there is nothing to
prevent

this

public created by mucl
adverse publicity directed at uf
%>m antagonistic groups and even
fe©m high Washington officials.
I
am informed that prior to the war

countries

nound notes hitherto held abroad.

sidering that most countries of the
Sterling Area have a'gold reserve

!

both

-of

buying

ture of

patriation

will

II
Mr.

were;

res'stance

some

overspent their : allowances
while
on
holiday abroad have
been caught and heavily fined, in
other directions capital is escap¬
ing on a large scale. The depar¬

to be

how far this conception
carried in'practice. Con-

;;

Increasing costs of materials and

had

of
other
Sterling
countries, since the gold reis supposed to belong to the
entire Sterling Area. It remains
seen

;

retarded because! of
uncertainties of wage scales

starts

large

3

months

four

illicit outflow of capital. The Brit¬
ish exchange control is very far

serve

I

remarkable."

riers

great bureaucrats who generally handle
local problems accord
ng to a na-

,

material

started, I,of -which approximately
Richards
found, it necessary to
75%
were -not
completed until
early in 1947.
During the first discontinue accepting applications

excess

also

is

1946

July

m
°

for this

balance.

trade

tive.

the

burdened all through the
period and up to July 1, 1947,
accomplishments seem all the

end of the year. : During the year
1946
about
14,500
units
were

the

wonder

no

requirements

for

a

we

■

Sterling

Area

also

since

ago

unsatisfactory. Although survey services,-1 can report that
the
sterling balances of India, for the area of Brooklyn; Queens,
Egypt, Iraq and a few other coun¬ Nassau and Suffolk Count'es, from
tries have been funded, a large Jan.-1,
1947, to Sept. 30, 1947;
amount belonging to other coun¬ about 25,000 units eft housing were
tries remains unfunded 'and can started,' of which' approximately
therefore
be
used
for
current SO %, will be completed before the

in
practice it is not nearly as effec¬

provided

months

us by the Federal Housing
Administration
and
recognized

At the
British

in

Spiegel

most

purchases of British and

and

today back in
Sent
our
problems collectively.
beginning to see many.
Thereupon, a committee headed
more
units in the higher-priced
by Alfrei Gr0£S was created for
reported.1 housmg being erected in these the purpose of
presenting our
'

able to

bal¬

respect the situation

Egypt has stopped one of
the
most, notorious
loopholes
through which British capital had
military expenditure abroad will been * pouring * out.
But
large
also begin
to make themselves amounts find their way to Switzer¬
ielLli
A V
if land or to the Western Hemisphere
Even so, the outlook is far from
through South Africa and Eire.
will

i

Continuing
his
remarks,
Spiegel stated:
h "From intormab'on made avail¬

Much

unt 1

up

oved

^

cons.der that it Is but

five

more

any

sterling

b

Spiegel

were

war

goods
represents the

it

since

liquidation

yield

M.

relieved of many of the con¬
trols and' restrictions w.th wh.ch

deficit

of

Emanuel

be

unrequited
exports i.. b rt
hardly V any unrequited imports,
Consequently
the
amount
of

the

of

prohib ted.

every

extremely

'

much

same

assistance should

no

anj

to

most

labor

unable to convince the authorities

metio-

reason

getting the

being.

v

We bu lders

have

hampered
of

ties /n New Jersey have been idle
sm.e
the early days of the war

proud of the job which has been
accomplished to date since < V-J

remembered

certain

•

,;

?.

com-

labor

frozen. Tnus Britain is

used

on

a

aiea.

Spiegel,

——

completed until last spring. ■'
"Many bu-lders in Westchester,
Nassau, Suffolk and several covn-

been

the

not

were

were con-

gold stock has

at

pace

has

Treasury

'metro¬

the

1—■—

by

1

will

-British

;;

4

in

leased on the ground that notice. of
the
British
exports
yields
for; their withdrawal was given neither
goods nor cash, at any
before August 20.. Moreover, the rate lor tne time

;

'

I

York

v

not

New

politan;

reciprocity

no

indicate the

20

the

'

•

siaeiably
arid

building
in

of

shortages

prog¬

cf-home

ress

The worst of it is that there is

partly from the released
portion of the American loan, it
be

the

of

.—,.

■,

number of starts in 1946

York

of dollars obtained partly
the International' Monetary

August

-

a

Plight picture

purchases

for

All

area of

Fund and

,;

2nsr pa nted

tc

"Vv^';

»

Dec. 1, sponsored by the

on

ing to iron out sir.ctly local probuntil the spring of 1947. lems., As incliviauais we tound it
us
know that the large impossible to break uown
the bar-

pleted

Luild-

-

'.I'1".,11 ''

.75% of these units

of

politan

use

from

ixome

1

a

on

New

..

■»f--t;

sterling

abroad..

Yor& City

in New

Regional Vice-Presi-

<£—

in this respect.
Britain's export surplus in rela¬
tion to many countries cannot be
used for any purpose. It is simply

500,000,000.

which

Einzig

surplus

herexport

Conference

rem

The

Dr. Paul

with

d

n

■

of

ceeus

Builders

...the

1

during .that
period, the

Home

erect

Home Builders Council of New York, New
Jersey and Connecticut, Emanuel M.
President of Home Builders Association of Northern New
Jersey and

,

LONDON,

£

9

Spiegel, Regional Vice-President of National Association

builders in and around New York will

supply neethd gold not only to Sterling Area nations but to other
countries. Holds much of British exports yields neither goods nor
cash, bui mere:y represents liquidation of old balances, and con¬
tends there is much illicit outflow of British capital.

v

(2373)

Outlook in New York Area

Estimating British gold losses since end of war at $1 billion, Dr.
Einzig predicts remaining $2 billions will be exhausted before
mid-1948, if drain continues at present rates.. Says Britain must

a

CHRONICLE

Heavy Gold Losses r

'-vV'''

£

FINANCIAL

of

Investment Securities
:

:

New Common

:
Our

Old Common

Trading

stocks, title company and,

bank participation

SIEGEL & CO.
39 BroadTraT. N. Y. 6

Teletype

NY

M

150 BROADWAY

Pljby 4-2370

1-1942

Department;

specializes in real estate bonds
and

Boston

.

certificates. I

NEW YORK 7, N.Y.

Philadelphia

CHRONICLE

FINANCIAL

&

COMMERCIAL

THE

(2374)

10

ford & Co., together with others,

.

CHICACO

-V

Illinois Brevities

grading Markets in

Active

STEEL

MICHIGAN

loans, and the balance will be added to the general funds of Cejotex
Corp. Included among the underwriters were A. C. Allyn & Co.,'Inc.,

Republic Co. (Inc.) and Kebbon, McCormick & Co.,

Chicago.

#,

■;#•:\#'V

a

which

headed

also

was

#■•#.

by

Paul

H. Davis & Co. and Union Securi¬

old

Increased in each

company

this year.

first three quarters

the

of

of this 40-

earnings

share

Common

year

30

September

ended

months

profit for the nine

Per share

cents.

95

was

Analysis Available

ADAMS 6< CO.
ILLINOIS

CHICAGO 3,

PHONE STATE 0101

361

TELETYPE CO

-#.#

STREET

WEST ADAMS

105

ties

Corp., on Nov. 25 offered 41,shares of; Keystone Steel &

270

Co.

Wire

at $45.87%

demand for this cor¬

coals

substantial

assures

earnings.

1947

stock

mon

per

($10
share

dividends.

accumulated
Estimated

$5.95

carries

value)

par

preferred stock

7%

Corporation's

$2.00

are

accumulations

for the

earnings

preferred.

per

Keystone

V#;;;#';

months

last

amounted

On

in

comparative

a

regard

shares

stock

6%

....

Comstock & Co.
CHICAGO 4, ILL.
231 So. La Salle

Dearborn 1501

Stt>

Teletype CG 955

*

#';##:;.##V"

In connection with the

proposed

program
of ; Interna¬
Harvester Co., its stock¬

holders

will at

for

called

Jan.

special meeting
28, 1948, vote on

a

the directors of the
company to issue not more than
$160,000,000 .principal amount of
debentures, which will be con¬
authorizing

into

vertible

stock.

common

by Glore, Forgan £? Co. of New
York,
and Harris; Hall & Co.

in

under¬

writing and distribution of securities,

ed by

Chicago,

tractive issues for their clients. Main¬

others,

taining
own,

department

compete

we

dealers,

retail

no

but

serve

Correspondence

in

no

of

way

our

with

them exclusively.

invited.

''

FLOYD D. CERF CO.

Securities

of

,

offered

(par

erty

$10)

which

per *

added

-

-

stockholders

of

;

them,

at

Subscription
Nov. 26, and

$9.75

per

rights

ex¬

a

headed

group

by

A.

of
C..

Cruttenden &
&

Co.,

Collins

&

at the
ceeds

Co., Stifel, Nico-

Inc.,

Co., also of Chicago,
offered

balance

same
are

western's

Julien

and
the

unsub¬

(64.314 shares)

price.

The net

pro¬

to be added to North-

general

funds

to

be

used for corporate purposes.
;#.v *

*

*

stock

A total of

redemption of its

Nov.

at

Bowser

2,240 shares of 50-cent cumula¬

Common

tive convertible preferred stock

of the

Paper

1, 1947,
###.##

share.

Detroit Harvester

On

Common

Portsmouth

Nov.

on

#

Boston

Common

ing,

Disintegrating

$11.50

per

:

Nov.

syndicate

Steel

at

18, an underwriting
headed by The First

Corporation, and includ¬
others, Central Re-

Speer

company

holder.

The

chase of

a

a

Pa.,

now
Straus

stock¬

plant at Punxsutawney,
leased by it.
&

Blosser and Brails-

Common

New

York

Stock

Associate

Member

New

135 South La Salle St.,
TeL ANDover 5700

York

Curb

INVESTMENT

'

;

•". ##

:•

'

y

.#

The

:

if

«*

.

.

:'

# if

Sanitary District of Chi-

The

Chicago Park District har
for
prepayment and re¬
demption on Jan. 1, next, $300,00'
of Park
Improvement bonds oJ
T946 at 100 and' interest.
Imme¬
called

''

_

request

Exchange
Principal Exchanges
Salle

CHICAGO

»

1430

1946.

year

1947

It

would

#

dated

of

if

Inc.,

net

of

about

li

St.

4
Tele. CG




156

'
BOSTON

sales

for

increase

an

the corresponding

over

month last year.

For the first 11

months of 1947, net sales amount¬
ed #to ,# $111,322,949,.
a # gain
of

13.83%

the

over

1946.
H.

V.

period

same

;

;

..

###; *

OMAHA

KANSAS

CITY

MINNEAPOLIS

INDIANAPOLIS

in
,

❖ '''•'ii-

it-

,

'■

r-

'

McNamara, President of
Chicago,. on

NationalTea I Co.,
Dec.

2

that

announced

dividend

of *37%

extra

an

cents per share

will become payable on the com¬
mon stock on Jan. 2, 1948, to hold¬

of record of Dec. 16, 1947, and

ers

indicated

dend

rate

that the quarterly divi¬
on
that issue for 1948

of 25 cents

First

The

at

or

'

it'

.

if

ended

National

sales

if

Western

year,

-for sale

as

a

tion

(not

equipment

molds)

at

located

^Heights, and which
of

the # assets

Glass Co.

on

turing

acquired
from

by

Kimble

The

directors

declared

an

cents per share, in

1946

to

M^nufac-'

Nov.

26

dividend of

10

on

addition to the

regular quarterly dividend of 12%
cents per share on the common
The quarterly payment will

stock.

record Dec. 5,
on

—

of Ero

extra

be made

TRADING MARKETS

The

operation
in

Chicago,

Co.,

cash.

The production and sales of the

705

in

last

* V# *

including
Chicago

July 1, 1946.

39.2%.
in

stores

from

#

The

part

period

708 at Nov. 28, 1947.

produc¬

were a

of

as

$140,800,090

of

gain

a

purchase price is to be paid in

—

$196,193448,

with

!nerea<*ed

offers

unit all real estate,

machinery,

buildings,

totaled

number

Division.

Owens-IUinois Glass Co.

Jan. 2,

weeks

1947,* amounted

29,

the. corresponding

Court for the Nor Lie rn District
Ohio,

on

four

$14,771,093 for the same period
in 1946, an increase of 28.1%.
F*»r the vear to Nov. 29- 1947,

By order of the U, S. District
of

Nov.

compared
,:

paid

the

to $18 916,488, as compared with

Bank of Chicago,
.

bales; for

,

Treasurer
District

also

was

1947. '

on

Dec. 15 to holders of

1947, and the extra
holders of rec¬

Jan. 15, 1948, to

ord

Jan.#2, 1948.

Central Putlic

#

Utility

Corporation
Red a

Pump

#:##■ ##:';■/ Common '[■'/ ##
#

United

Income

Stockyards

Clearing Machine ;#
Common

Common

Stock

^

#;?•. " 'V fl
Brailsford & Co.

•"#.##

•

1952

Chicago, North Shore &
Milwaukee Railway

■

Preferred

t,',,"-

5l/2s,

■•'#;#:;'

208

Chicago 4

S. La Salle Street

Chicago

Tele. CG 146

Tel.

State

ZIPPIN

—

Sold

&

—

4

9868

Quoted

COMPANY

208 S. La Salle St., Chicago 4,

MILWAUKEE

'

consoli¬

November,

$14,238,713,

11.04%

•

reports

Specialists in Foreign Securities

CHICAGO
PHILADELPHIA

'

$12,-

if

South African Gold Mining Shares

Incorporated

$9,with

expected

was

be

British Securities

A.C.ALLYN«mCOMPANY

ended

compares

i

Municipal

NEW YORK
Phone Andover

months

Stock

Member New York Stock

So. La

10

which

Spiegel,

payment of the called bond?
being made at the office of the
of the
Chicago Park

is

Tel. Dearborn 5600

■

the

Railroad

FAROLL & COMPANY
208

for

\l 000,000.

diate

Bought

and other

of

' ■: \:V#

111., has called for redemp¬

: cago,

its Chi¬

approximately $8,090,OCO for the

1947,

•

'

/

af

that sales for the full 12 months

Members of Chicago Stock Exchange

Industrial

Standard Silica Corp.
Common

#. #-#';,■

to

31, 1947, amounted to

full

The issue was oversub¬

209 S. La Salle Street

Corporation
on

working

addition

an

Public Utility

Distilling

statement

to

i#..

-

Chicago Corp., which

-

991,344,

William A. Fuller & Co.

Tele. CG 650-651

SECURITIES
Merchants

added

President

plant, has announced that

Oct.

to

$4,000,000 bank loans, and

balance

#'

Exchange
Exchange

Chicago 3, 111.

Mack

share,

Participating also in an offerin?
4 of 75,000 shares of Ap¬
palachian
Electric
Power
Co
4,50% cumulative preferred stopk
at $100 per share (flat) were Cen¬
tral Republic Co. (Inc.) and Har¬
ris, Hall & Co. (Inc.).
'; *

#

Chicago Stock

of

net

proceeds to the
Speer company are expected to be
used to finance in part the pur¬

among

tion

and 46,234

shares for the account of

straus & blosser
Members

of
per

proceeds to be used

Owens-Illinois

.

ration for the

working capital.

net

$51.25

a

#

Bla?h,

has contracted for the construc¬

par

no

oh; Dec.

Co., Ames, Emerich & Co., Inc.,

Ames, Emerich & Co., Inc., on
18 also participated in an
offering of 80,000 shares of Speer
Carbon Co. no par value common

were

stock

common

repay

#

F.

vFirst National Bank of Chicago. # would be 37%
cents, as compared
.####• ,#
if
■. ❖
with 25 cents in 1947.
An extra

only $25,760 was used to reim¬
burse the treasury of the corpo¬

to

Common

Latest

fl,

$14 per share, of which
33,766 shares are for the account

Central

Members

of

Allyn & Co., Inc., and including,:
among others, Paul H. Davis &

pre¬

$15

Nov.

,

underwriters

of Lib¬

at

Corp.

Loan

proceeds of

Chicago

to

share.

publicly

stock

due

.

common

scribed

ferred

Inc.,

ascribed for 17,686 shares of $3 *
par value, out of 82,000 shared

laus

,

Z

R.

others,

shares of

in

reported to be on hand, equal
approximately four months'
production on the basis of current
operations. # #
<

Dec. 3 publicly Of¬

on

150,000

highest

to

Sills, Minton &

scribed.

■#####-

Co.

Co. and

&

second

was

Webster

among

the

were

the company's history. A
backlog
of orders in excess of $2,000,000

;';r

#,#:%#;

1,

13, 1947, of North¬
western Public Service Co. sub-

pired

•'

underwriters,

included,

capital.

on

Shillinglaw, Bolger & Co., also

convertible

&

Becker

of Chicago, on Nov. 25

cumulative

*

sales

'

and

publicly
offered 99,000 shares of 75-cent

'T

Whipple & Co., Farwell, Chap¬

the

record Nov.

First

Chicago

and

cago

the
:<

sinking
May

"# *

debentures

share, the greatest part of the

120 South La Salle Street

Metals

Co.

Blosser,

'i.; if

6

>

of

Trucks, Inc.,

15-year;

>

*

*

v

capital.

syndicate head¬

Straus &

G.

The

of

>

1962, at 100 and interest, the net
tion on Jan. 1, 1948, $8,425,500
to be used as follows:
3 of refunding bonds, $500,000 of
$2,000,000 to prepay a bank loan;
'construction bonds and $50,000
approximately $1,300,000 for ex¬
pansion of the facilities of Hey- ^ of land damage bonds, or a
total of $8,975,590 bonds in all.
den's Princeton (N. J.) plant; and
the
balance
added
to
working ; Payment will be made at The

Sills, Minton & Co., Inc.,
and including, among

providing investment dealers with at¬

;

proceeds

The

syndicate which will underwrite
these debentures wijb be headed

/

$272,639, as against a loss
$175,132 in the previous year,

were

selling

v

tj.

•

value

2%%

•

,

if

:

.

"

*

Co., Inc.,

an

capital. '
if

of

A. G. Becker & Co. Inc., Bacon,

fered

Nov. 13 headed a
group
of
investment
bankers
which publicly offered $6,000,000
Heyden Chemical Corp. 15-year

An investment

exclusively

4%
due

Chicago

Serving Investment Dealers
specialize

15-year

debentures

v;

(Inc.) and William Blair & Co. of
Chicago. The proceeds are to be
used for expansion.

We

publicly

(Ind.)

bank loans.

A.

;•

group

man

&

quarter earn¬
ings were $1.31 per share as
against
$1.37
per
share
last
year. A hank loan of $1,100,000
has
recently been negotiated,
in order to augment working

tional

stock-.-—.13%

preferred

7%

Allyn

1959, and to reduce outstanding:;

to the
number of
outstanding for # the

\ ».

which

$1,500,000 Dodge Man¬

$785,000
fund

,•

A

to redeem the outstanding

the first

period,

'■

'

sinking
fund debentures
1, 1962, at 100 and in¬
terest, the net proceeds to be

basis

earnings after provision for taxes

participated to the extent of 5,C0(
shares in the public offering on
Nov. 18 of 40,000 shares of $1 pai
value common stock of Carpenter
Paper Co., Omaha, Neb., at $51
per share.
•':■ #,!.
■■■'■■ ■ ■ #•.;'v

Oct.

used

4.948,842, compared with $4,236,in the preceding year.
Net

746

com¬

Kebbon, McCormick & Co. also

4%

$816,456,

to

'•

per

C.

offered

Inc.,
of

A.

ufacturing Corp.
due

$5 62% per share

stockholders.

*

«

and

(Inc.)

Co.,

at

account

for

Inc.,

,

issue

Net

year.

financing
APPROXIMATE MARKET

Common

15s

1917,

30,

Sept.

yere the largest in its peacetime
history.
Actual. shipments were

at

100,-

of Munising Wood Products Co.,

;

On Nov. 13, Central Republic;
Co.

stock

mon

share.
added to

Co.

(111.) at $15
The
proceeds will be
working capital.

com¬

stock

per

stock of American-Mari¬

common

etta

totaled $6,744,750, a gain of 15% over the
sales of $5,855,760 for the same
ing

com¬

before

share

per

the

on

par

preferred

share) and
000 shares of $1 par value
($10

par

al|t> of

#.# -7'## livi.

—_

for the first quarter, end¬

pany

1946.

Corporation#

convertible

.7

•■

public Co. (Inc.), Harris, Hall &
Co. (Inc.), Bacon, Whipple & Co.
Dempsey & Co., Sills, Minton &
Co., Inc., and Straus & Blosser.
all of Chicago, offered publicly
125,000 shares of $2 par value

compared with $916,148 for the
three
months ended Sept.
30,

Franklin County

poration's

the

of

Sales

profit

Coal

(no

share, for
the account of National Lock Co.,
a Keystone subsidiary. Other Chi¬
cago bankers interested in this of¬
fering were: A. C. Allyn & Co.,
Inc.; Central Republic Co. (Inc.),
and Dempsey & Co.
value)

three

Continued record

stock

common

w#.'". ;#'■

."f

underwriters,4"

Another group of

Common Stock

#'■

Kropp Forge Co., Chicago, for. its
dscal year ended July 31,
1947,

'on/Nov. ,-25 publicly offered 59,#000 shares of 5% cumulative

Corp., New York, and associates publicly offered $3,000,000 of 3%%
debentures due Aug. 1, 1960, of Celotex Corp., at 97% and interest;
Of the net proceeds, $2,500,000 will be used to pay off term >ank

Central

CASTING COMPANY

j-

Paul H. Davis & Co., Chicago, and Union Securities

On Nov. 21,

Thursday, December 11,' 1947

Telephone Randolph 4696

Illinois
Teletype CG 451

CG 95

Volume

THE

Number 4654

166

COMMERCIAL ^ &: FINANCIAL CHRONICLE
Jhe only one
the 1 rieht. :•-*"'
Molotov

finds

now

good

help work out a
Russian bluff has

will

news

be

soon

coming

forth.

its

run

Wm. E.

himself

D.

T.

Moore

&

course.

Co.,

50

Judge Joins

Kobbe & Co. Staff

D. T. Moore to Admit

*

Broad

.

Kobbe, &

Company,

.

internal

bad

its

tough;Awalk out and threaten to
; make; a Separate peace with Ger¬
out many^: That would not work, as

situation.

1948.

a

A

'The astute investor expects something constructive to comer
of the Council of Foreign Ministers now meeting in Lancaster House',
London, for the picture has greatly changed since the same* men
(except for Marshall replacing Byrnes) started disagreeing over
K
peace
treaties
just two years we offer what Russia:will not,'
ago. The great political freedom.'
A '■
A

do not want to

we

set up

a

new

government and pump into Ger¬
millions of dollars to help

many

the

Germans

and

then

have

the

Russians siphon it all out as repa¬

rations.'"

-v.;'•.

1

-.

amount of tax

With E. E. Mathews Co.
BOSTON, MASS.—Louis F. Dow
has been added to the staff of Ed¬
ward
E. Mathews Co., 53 State
Street.

^

A. The time is ripe for something

place

in power by telling their people of
foreign hostility and it is becoming increasingly difficult to con¬

to be accomplished and the whole

taking
in
the

stock

market

vince

investor looks with

selling

cur-

rently

has

given the

market

an

ap¬

pearance

of
lot

being

a

weaker

than

it really

is and
people
falsely

many

have
this

Col. Herbert G. King

is

sults.

That

clamoring for

is against them and that; they are don ; and

is

is

why

some

confident

that

some

recently,

trading

over

department

(Special

to

The

CHICAGO,

Financial

J.

Chronicle)

ILL.—Alfred

Gross has been added to the staff
of
La

Hallgarten
Salle

&

Co.,

231

H.

Denton is

South

Street.

112

West 81st

City.

In

Baron G.

the

agreement is

1 '

/

■' In the last two
years the Com7 munists have lost a lot of ground

throughout

the

whole

Stalin

has

slipped

and

ably within his

of

A

To

A

Europe

consider¬

Companies of Columbia Gas System

own

| AI

surrounded

by a group of 12
ministers, each of whom secretly
believes

that

he

carries

shall's baton in his
The

world

has

a

mar-

AA In two years,

much

expected

from the United States because of

A

her

claims

been

about

was

[ that they

are

,

dent

that

offer

but

i.

starvation.

acting

as

boom-

a

Russia

has

poverty,
She

nothing to
misery and

cannot

even

isfy the needs of her

own

plants and underground storage fields
77;.;"A"-/vA. -7 >-7 A.wv.v7>. 777;A;7:-:*7
.

Ry the end of 1949, the System plans to

bring

homes, industries and

more gas. to

people.

the

area

it

commerce

serves; an area

rich in

needing so much.

AA:Debentures,

"

AVery few people realize the
tual

of

weakness

million

Soviet

ac¬

were

killed, the most productive

areas

been

have

dustrial
tem

destroyed and her in¬

plant and transport
in

are

disrepair.

A

No

sys¬

longer

she supply her own population
with
everyday
necessities.
The
people have suffered so much that

■

■*

r

Portion

pany

.

A'

-

I;

■.

Per Share

•

; <

■

VS1.36

•

V

> :

Representing: Parent, Com- '
Net Income
r A.*
*
"
.

•

>.35;
»■

1.0Ij

Amount Reqyired for Retirement of
.•

Balance of Parent Company
come

ment

After

Provision

of Debentures

A,

follows: f

'

in

Paid August J 5

*

V

Paid November

.

s

.

'
;

-

.;.85

year1947
AilAA'A

r '•

.*;

Paid May

^

-AA

for Retire-

:.

Paid February 15".

*

••

I!

as

;

A

Net. In»A

CASH DIVIDENDS-paid in -the
>V were

15(J

•

.

;

I.vJ5<f :;;

>

.

.

15(5

•

15A"AA^A

V.':

♦

1^". A

Total Regular Dividends
.
v V :. 60(5
Extra Dividend paid Nov. 15
15(5
Total all Dividends

;

v

.

iy

". ' "75 (5 on

each of

r

our

1 1

Retained, by Subsidiaries

Balance

no leader in Russia today
strong enough to lead them into

and added to that is

-

30, 1947 ■ :Af

there is

war

■

rending Sepfyfhber:

Consolidated Net Income

can

another war. The country's physi> cal condition is not conducive to

EARNINGS; AND DIVIDENDS
the twelve, months

For

Russia.

Russians

12

f;

of

resourcesAapd progressive^ enterprise.

Over

.

spend an additional $74,000,000Aa total
of $127,000,000 to

Soviet Rus¬
sia wherever they have been. They
swarmed
in
proclaiming them¬
selves as liberators, but turned out
to
be
locusts.
They are badly
dressed and behaved, poorly fed
and their equipment woefully in¬
adequate.- They suffer so from
comparison with our troops that
they are kept out of sight as much
as possible1.
The Soviet policy of
appropriating
everything
and
shipping it. back to Russia has
aroused
great resentment wher¬
ever they are and wonder at their

;

ppf^

v

wells,^ u

;ARew

^ipelines/pompressor stations, propane

the

creased the prestige of

<

V

sat¬

AThe Soviet troops have also de¬

J:

$53,000,000

spent

construction

pro¬

duce goods or food enough to

;

■"-<!<

new

topple,

to

by the end of 1947, Columbia A

so

erang and it has now become evi-

j

1;

AlA"f°r

sweeping and her prophesies that

| capitalism
■>

have

mWm

^AA £ companies will have

^QUJwIWealttuand production and
v. our small Josse$r,in the. war/ NoA body expected much from Russia
but

engaged in the largest construction A

are

program'lirijtrih^Sys^

pocket.

own

the ever-increasing and currently A

;hA critical demand -for natural gas

country. In
addition, he is in poor health and
is

meet

..

5

12,23 3,256 shares of Common
Stock outstanding ^ "
A'i'r ^
-

pos-

i session of the atomic bomb. Stalin
knows
f we

we

will

never

-attacked,

.are

use

but

it unless

he

has

a

| thoroughly realistic knowledge of

15'
H

the value of the bomb to us in the
event of hostilities, • A ;;

(7-7 The

Communists

have

long

p preached that the United States

SI

COLUMBIA GAS &

IT represented all that is decadent in

A. modern life, but Europe has found
.

i

I

I
■i

that
)

"

our
•

help has meant food,
'

#

materials,

machinery,

loans

aid without "interference.
.'(

■

,

...

and needs what

-

we

and

It wants

...

can

give and

Russia cannot, material, help, and




ELECTRIC CORPORATION

raw

parent company

COLUMBIA
GAS
SYSTCM

he

Helbig & Co.

actually not far

1

engaging in

Street,
past

disagreement in London. That
why great bargains are now
being eagerly picked up by farsighted investors who believe that
away.

of the

John

H.

a

securities business from offices at

H.

a

an

of

J. H. Denton in N. Y. City

fear

a

20 years and,

was manager

Valentine Co.

Joins Hallgarten Staff

re¬

the shrewed
hope to Lon¬

until

is

;

55

Judge has been in

unsettle-

ment to

of

them that the whole world

world

Mr.

ttributed

a

j

Inc.,

...

.

:; •

The Soviet leaders have stayed

|

trader.

Wall Street for

.

,

.

Street, New York City, members
King predicts Russia will give way in opposition to peace % From now on they must cooperate. of
Liberty Street, New York City,
the New York Stock Exchange,
treaties for Europe, and that is why shrewd investor looks with hope'A & On A the other hand, Secretary will admit Frances Moore Merrill announces that William E; Judge
to London. Says communism is declining and Russia's weakness is
afford
to
be to limited partnership on Jan. 1, is now associated with the firm as
' Marshall; cannot
Col.

; ;

*

',,

something to
peace treaty. The

Member, New York Stock Exchange
•

,

always in

are

where he has to do

By COL. HERBERT G. KING

■

who

-

New «York
was

with.

COMMERCIAL

THE

12. 42376)

j

"

;

FINANCIAL

&

Thursday,1 December 11, 1947

CHRONICLE,

.

minj.1 mm mm* www

'

"y*„.

■"•i',

i
'

••

Bank and Insurance Stocks

c.
.

wilson* /

e.

President of General Motors

.

*

<

,

■
'

By E. A. VAN DEUSEN

Prominent
r-

This Week

T

Bank Stocks

—

'

:

v

-

r

The

Burr's Man¬

stockholders' meeting of Aaron

149th annual

industrialist, asserting Socialism

dictatorship and slavery, upholds freedom of

means

)

our

political and economic system. Blames Government policies, food shortages, and European aid program for inflationary trends, and says chief problem is to produce more and to increase workers' econoraic security.
Decries new Government controls and urges lower cost of Government, extending
hours of work, and: elimination of regulations impeding production and distribution. Lists 1(1 recom-

*
'

held at noon on Dec. 2, 1947.
Now known as
Company, it is the only one of New ;
large commercial banking institutions to hold its annual
//////;££'//■; mendations for remedying shortages. .
meeting prior to the closing of its books at the year-end. Conse¬ :: ;>*./'.■'?<
quently, repoi ted earnings are based on actual figures for the first £££■.''
About ten days ago I was discussing the subject of my talk this evening, "Let's
nine months and estimated figures 1
" ' '' mm-''*
I
The
stock
is
currently ; selling Stay Free,"; with one of my friends. He said he didn't think the title was intriguing.
for the last three months.
hattan Company
the

Bank

was

Manhattan

the

of

York's

basis, net operating
reported at $2.00

around' 24%,
equivalent to ap¬
proximately 12 times net operat¬

share, compared with $2.56 in
1946, a decline of approximately
22%. Net realized security prof¬

ing earnings, and providing a div-,
idend yield a shade under 5%.

its

ers

this

On

earnings

were

per.

were'

share,

reported

$0.18

at

in

$0.85

with

compared

therefore $2.18
share, equivalent to 1.82 times

per

the annual

are

ings

of

with

a

£;•

Loans &

Discounts

724,519

* 371,786

*

-

tan's

Nov.

30,

558,311

is

world?

be

•

Governments

amounted

to

five and ten years.

the

free. -'

which increased ,14%,
count for .about half of total
costs,

Governments is 1.61% per annum

with 1.53% in
1946; the average rate of return
on all earning assets was approx¬
imately 2.0% for the 11 months of
this year, compared with 1.86%

stated:

for the year 1946, as reported by
Chairman J. Stewart Baker at the

that

ex¬

;■ V

With regard to 1948, Mr. Baker
"Unless there is

change for the
conditions,

a

drastic

in economic

worse

confidently believe

we

efforts will result in in¬

our

creased net

stockholders' meeting./

earnings for 1948."

;

Bank of Manhattan's trend of earnings and book value since be¬

fore the war, on a per
v

*

"

Net

the

of

-

i

so c

a

1

a

the

>f

'■

has

kept

•

!-

pace

1 by this material

Music

progress.

back-' and -art and all forms of health-

are being
ro^oted by thos£

society

school.

advocated and

of

two-thirds

Now

them

In* the last 50 years

the death
rate among children up to
six
tructlve" and "in the interest of years of age has been reduced
ill the people."
approximately
75%
and
the
death
As a matter of
rate between ages of 6 and 60 has
:act, their phdosophy is reaction¬
been reduced 40%. These are only
ary, destructive and when put into
ffect reduces the standard of liv- a few of many examples of our
are.

who claim that
:heir philosophy is "liberal,"-"con-

/

The real problem of Americans
is the

that of the rest of;

as

same

It is to produce more.
can we reason¬

ably satisfy the needs and desires
of our people and at the same
time meet the high cost of gov¬
ernment while

sharing reasonably

world.

with the rest of the

world.

in Europe.
Old World quality of our schools and hos¬
deologies in serious conflict, with pitals. In 1900, one-third of the
our
American concept of a free children aged 17 were in high

that

car

f Problem to Produce More

There is

slavery

'

motor

a

manufactured.

Only by doing' this

:r.V V
Social- progress

taken in many parts ful recreation flourish. We have
We aga n
have greatly increased the number and

ward is be ng

in

been

not

the world.

•.

and

ri.e

cannot

has

tubs.

truewith and has been made possible

it

Apnerican to have more unless we
produce more.
We cannot/eat
food that has not been raked. We

mobiles and 92% of modern bath¬
■

"plan

to

but in

in

world

a

appraising it

mind

we must

there

that

'r.

.

;:'

food shortage-

keep

has

always
been a world food shortage. Prob¬
ably at no time .has more than.
25%

of

,

the

regularly
needed

all

have

question

share

population
food they

the

would

The

eat.

world's

had

or

liked

to

is how much

will ng to
share with others and with whom.
we

can

or are

we

,

ng
It

and enclaves the
well

is

for

social -progress.
r j&yy
In ;th^; face 6f the retioT-d

people.-remember

to

us

v

not understand how any

American political phi^
'osophy after 175 -years is still -the
hat

our

doubt

can

the

I do

American

soundness

of

our

It is

one

food

or

thing to donate surplus
to

share

sacrifice

some

tunate

reasonably ,at

with

the

unfor-

other countries.

of

It

,

is

Net

Net

Secur.

Recoveries

Divs.

Book

Reported

Paid

Value

developed

•

:

'

'

'

.

6%

with

permitted

-

something else to. > be asked to
liberal *ard revolutionary institutions. I do not understand
Share their misery when it is of
philosophy in the world today. On how he can even consider adopt¬
'heir own making. 1
^
;
.''
ts record
it ;s the best political ing policies and principles which
All of us will have a better un¬
organization that has ever been when put into effect by govern¬

share basis, has been as follows:

''
/

* .'\••

penses.

for 1947, compared

;; V

for

ac-r

in

-and

'•/

ing $110,000,000 less. Net is lower,
however, because of higher total
operating expenses estimated at
6% more than in 1946.
Payroll

bank's

Briefly,

been

would have had the
unemployment.
There is r.o way for the average

going

economic serse, a long step

loans and investments are averag¬

\

The average yield on the

available

funds

that

fact

Wilson

E.

C.

:

$383,800,000; the average maturity
is 4 years 9V2 months to actual
due dates and 3 years 2% months
to earliest call dates.
Approxi¬
mately one-half1 mature within
five years and one-half between

"Let's

me,

in;! other. population,

/, be like not to

He also reported that gross on-;,
erating income this year- will be
about the same as in 1946, despite

Manhat¬

1947,

that way" we

with

say

Stay Free."

r

Politically,
of

.As

had

! they would all

world's area and 7% of the world's
we have 46%
of it'
parts
of the I electric power, 48% of its rad.os
world, we can 154% of its telephones, 59% of its
hardly realize''steel capacity, 60% of its life inwhat it would surance policies, 85% of its auto¬

($000)
429,810
592,513

($000)

385,152'
499,779-

442,125

Bankers Trust—1_-

U. S.

o

about

what

on

Sept. 30,1947'

($000)

($000)
Bank of Manhattan

bear

„

Govts.

&

Loans

Discounts

f

.

.'cans would do this, then I am sure

What is
this record
of what
granted.
And
in spite of all
Americars have accomplished a
.we
read and! compared
with the rest of the

the figures are

ago

year

-Sept. 30,1946U.S.
Govts.

tions

whose loans and

exceed their hold¬

now

our

institu-

free

Governments. | Comoared

follows:

as

dividend rate of $1.20.

of us take

the only large New

are

discounts

Total net operating and se¬

1946.

curity profits

Trust

York City banks

have always been free."' We Americans have been free so
—-————
'
———' ' 1 ■'' '',

you

long that moSc-?--

Bank¬

Bank of Manhattan and

per

replied, "That's because

v"

new,

*

Oner.
•«

£;;•»•

f,

Earnings Profits

Year

$

$

1939

1.11

1940

1.14

1941

Total

23.26

0.90

23.44

»n4 is baced on nromoting

0.90

23.73

0.90

!. 24.28

0.90

25.03

$•:.*

1.68

1.03

2.17
1

0.43

1.37

0.90

$

-

0.57
v

the well- ments- either in ancient times or
being of all the peoole. It recog¬ today, have always resulted in a
nizes the rghts of the individual loss of personal
liberty and an

1.80

H

/

v

promote

to

'

1942

—0.65

1.81

,

1943

2.01
2.40

1944
1945

*3.12

■

1.32

-•

0.29

1.45"

0.47

3.80

0.95

0.76

4.11

'

0.55

0.33

4.00

2.56

0.85

0.81

4.22

2.00

0.18

.

:

Estimated

1.00
:*

v

misery/ Js

human

it

wonder, then, that I repeat,
V
;
Under it "Let's Stay Free." ■
any

,,

our

v

0.95

2.18

dictatorship of the few.

in

country has made great prog¬
; ; £
Outcome of War
■
26.20 ress in developing social and eco¬
values and in what our /.r Our most; adute current eco30.26 nomic
31.55 forefathers called the "pursuit of norhic''and social problems are a

'

1946
1947

increase

the ini¬
tiative of the millions and not the

1.20

f32.06 happiness."

1.20

»

•

■'

'

v

,

:

direct

result

of

the

Ameri¬

war.

have

accomplished so much
tax savings.
fSept. 30, 1947.
Socialism Means Dictatorship
in real human progress, especially
It is interesting to observe that since Dec. 31, 1939, book value
The historv of the world shows during the last 50 years, that much
per share has increased by $8.80, equivalent to a gain of 37.8%. £•/: fhat scc'ahstic theories when put 's being expected of us by the
cans

^Includes $0.40

into efrect

large scale cannot
be maintained without oolice state

BANK

NEW JERSEY

and

SECURITIES

INSURANCE

;

—

'

-r

^embers

Telephone:

ft

what

system has accomplished

good

our

If all Ameri-

home;

by Mr. Wilson at
Banquet of the 52nd

wa^es

Established,

YORK 5, N. Y,

1891

;

18 Clinton St., Newark 2, N. J.

RArclay 7-3500

MArket

Bell Teletype—NY 1-1248-49

address

3-3430

Annual

the

NAM Annual Congress of
can-

Industry,

Dec.

5,

1947.

New

Ameri¬
City,

York

■:

Royal Bank of Scotland
Incorporated by Royal Charter 1727

WHOLESALE MARKETS IN

"/j;

HEAD

INSURANCE STOCKS

have

more

Whitehall 3-0782

n

CHICAGO 4

BOSTON 9

10 Post Office Square
HUBbard 0850 >

11

67

3

*

49

Two

BS-297
PRIVATE

210 West 7th Street

FRAnkIiri'7535

Michigan 2837
LA-1086

WIRE SYSTEM CONNECTING:

CLEVELAND,

''"^TELEPHONES TO:
Providence.

PHILADELPHIA,

LOS

HartforS, Enterprise

Enterprise 7008




ANGELES,

6011

■"

i

Russ
■

Building

YUkon 6-2332
SF-573

s

NEW YORK,

•

BOSTON,

SAN

FRANCISCO

Portland, Enterprise 7008

have

basis

On

what

people

be

con¬

humanitarian

a

would

the

willing

to

American

do

for the
unfortunate meh, women ard chil¬
dren of Western Europe if their

present /condition
from

such

I

as

rather than from
had

we

had

great

some

trophe

resulted

natural

a

catas-"

earthquake

an

in

war

which

important Vpart?

an

On

the basis of political and economic

in

many

I

government,

and

in industry predicted serious

48

the

immediately

fol¬

They- said

war.

,

Banks:

Glyn* Mills & Co.
Williams

Deacon's

town

as

Bank, Ltd.

farmer
sell

to

what

~r

selling
to

in

the

hours

to the 40

war.

They

work-week

worked

from

during

the

hours worked pre¬

even

stated

that the

how

to

live

50%

better

a

Within

,

the

even

deprive
also

cause

of

shipping

I prophets

were.

Perhaps if they

of

the

this

or

we

ber

food

abroad
to continuing our
high food prices for- a
longer time. ■
will

contribute

oresent

~

./

We must also apprais? in dol¬

lars
to

and

materials, what it

takes

make

good on our other com¬
mitments—how soon they can be

were

j how wrong these poorly informed

goods that

some

They

an

let

badly at home,

fulfilled—and

promoting

limits

cannot

we

though to help them will

us

need

can

still

h<*

.

oeople of Eurooe starve this winf
ter,

feared

of scarcity.
The results
of the last two years have broved

neither

practical

resources

ently

economy

/

and aftep

apple butter

to tell which,

able

were

wh'Te working less.

They appar¬
over-production.

spoon

customers

which.

to

smearcase.;

of us call cottage
jar of apple butter.

only one

thev

went

of

smearcase and

several

nor

who

jar

a

some

cheese, and
He had

as

war

learn

TOTAL ASSETS

Associated

the^

Alsatian

high

labor

real problem of Americans was to

£ 141,823,667

motives will be confused and
misf
understood.
We
irav
find
our-,
selves
in
the
situation
of

was

10,000,000 people would
be without jobs.
They used this
statement to justify an immediate
the

CHICAGO,

Detroit, Enterprise 6066

themselves

ago

years

in

change

Charing Cross, S. W. I

SAN FRANCISCO 4

231 S. LaSalle Street

CG-105

Smithfield, E. C. /

64 New Bond Street, W.

NY 1-2875

things of
higher standard of liv¬

unemployment
many

Burlington Gardens, W. I

LOS ANGELES 14

a

the good

of

had before.

ever

even

throughout Scotland

Bishopsgatc, E. C. 2

8 West

Wall Street

are

Amermans

lowing

NEW YORK 5:

prosperous

and

places

LONDON OFFICES:

INCORPORATED

considerations

political and economic

siderations.

our

\^7v

OFFICE—-Edinburgh

Branches

SEVER & CO.

is

working ;at h'gh
although prices are
high—much higher than we would
like r to
have
them—American?

than

BANK and

realize how

ing by far than any other people
in the world or, for that matter,

N. Y. Phone—REctor 2-4383

jjiji. A. Qlbbi). Manager Trading Dept.)

we

America

life and

•

can

job has been done here at

a

Americans

Rippel & Co.

humanitarian

so

orogress

:;:An

1. S.

and
from

considerations, what are our com/
impatient to continue the
mitments, either moral, on ac¬
interrupted by the twe count cf cur stated
purposes dur¬
wa/s that perhaps we too are ex¬
w tbrut less of b'berty and opooring 1he war, or formal as part of"
tunity, without degrad'at'on of the pecting too*much in too short a our international agreements made
time.
As a matter of fact, only
mass of the people.
So, I say, let's
during or since the war? Unless
when we look at other countries
we
separate these problems our
look at the record. Let's look at
cf
are

without dictatorship,

.

New Vork Stock Exchange

BROADWAY, NEW

the world/' We Americans

rest of

methcdi,

in our own lifetime.

laird, Bissell & Meeds
U

a

the world

STOCKS
J: !

on

derstanding of this situation if in
thinking we separate charity

our

also

bow-

soon

be relieved of this burden

receiving, from
materials
ever

we

with

full

of
do

other

equal
row

should

(Continued

on

of

page

by

countries

value.

realization

we

What¬
be

done

the

facts

38)

Volume 166

THE

Number 4654

&

By FRANK W. SUTTON, JR.*

;

Contending bankers

•

well qualified to determine their

are

Mr. Sutton

opposes

v>

finan-4

own

Certified Public Accountant

opinions of individual business

Sees

managers..

."

.

production is essential

1

•

•

'

-

*

•

-

The end of

-

•

•.

*

►

credit controls

consumer

*

Nov. 1 marked

on

1

*

♦

event¬

an

history

and

lpon

wide

regulations, but it may not continue. Prior
lr the *
Consumer the terms required. This is par¬

ing

higher.

Credit

increase in in¬

Nov.

Com¬

ticularly
biles.

If credit is not available oh

New

terms

borrowers can meet, savings
and government bonds
by the people to ac¬

Jersey

Eankers

*

sociation
the

.

As¬

accounts

and

will

American

Eankers

the

pre¬

due

o

terms

f

and

c o n

d it i

ons

that

were

be¬

lieved

.y;:
4":4:
44 conservative
and reasonable.
Reports received
since Nov. 1 would indicate
many
bankers
are- not *
granting * * con¬
sumer
7.'.

'

,of

'

manufa

to ,18

months

on

♦

conservative

'A'

'•

policies are ; being
followed in all other consumer fi¬

f

nancing.' vv;K'
Some
I

not

or

throughout, the
of

to

-•

has

banks

our

will

In

that

for

the

>

;i';\J- ;•! -;4.■'.'"it:

dealers

in

second-hand

H.

Maurice

Stans

evi¬

visible

the

and

profits
a

somewhere

banks, the

ousness

told

price

that

ahead,
that

of

reaction

be lower.
suggests
the likelihood of future imfentory
losses at some time, the extent of

nation's bapks
have increased $2,769,000,000 and
loans

year

in the

in

same

our

have

the

amount.

same

This

is

and

to

ability of the

the

business

individual

about

decreased

losses

the

period investments in

securities

going

are

to

dealers

bear them

it

as

is, of course, the de¬

financial re¬
faith-

ports, and in particular the

it.

in

times

such

as

this

than

at

ing cannot be different at an up¬
ward point of a cycle than at a
downward point.
But it is true
economic

that
their

do

events

pressures

;

1 As

side
in

practices, in the

exert

accounting

on

that times
th^se do create many prac¬
tical problems of inventory pric¬
ing that are not the same as the
problems when markets are de¬
clining.
4'.
/
•
4 •:
sense

,

.

'

the

fact,

asserted, and these

all out¬

are

of accounting as we know
Paine, in his "Crisis," put it

supernatural

a

of

realm

Thomas

knows

"Heaven

way:

-s,

how

to

put

proper

a

its goods" but practicing ac¬
countants are not in a position to obtain
this formula in time to make it useful.

price

upon

Then

the
great Emerson in one of- his
implied that valuation is at least
superhuman:
if:
"In
nature
there
is
no
false valua¬

essays

,

.

„

.

tions."

Finally,' it is reported that, cen¬
turies ago when the designing Cleopatra
gave Anthony an inventory of her assets,
she

said:

"This

like

are

matter

a

been

has

of the business cycle.

being dependent, in great part
and some
equipment should be. All of us are interested
4 It is no exaggeration to say that
advertising no down in the
accountants have been wrestling
growth and development
4; *An address by. Mr. Stans de¬
payments and long terms for re¬
with
the
subject
of ' inventory
of our communities. The housing; livered at
meeting of the Illinoic
payment, but I know of no bank¬
pricing ever since the dawn of ac¬
shortage
is
still
a
problem,,;
al¬
Manufacturers'
Association,
Chi¬
ers
financing such sales.v.:.v'.2
though not as serious as it was. cago, 111., Dec. 2, 1947.
counting—at least, ever since the
It will be several years
before
More Production, Not Credit

automobiles

.

That purpose

velopment of useful

implies that accounting principles
and considerations may be differ¬

present economic conditions, is
deceptive, because it

That is, of course, not true.
The
basic concepts of inventory pric¬

thought, of ^course,

Ibis

enter

somewhat

ent

the

prices)

the

there are only
three recorded ins.ances in history1 and
literature in which the secret of absolute
or
exact
valuation of a stock of goods

other points

de¬

timing is highly uncer¬
tain, but that inevitably commod¬
ity prices (and resultant product

4; In the first six months of this,

the other hand, the title of
discussion, with its emphasis

ap¬

light of tne practical
for
which
inventories
into
business
accounting.

in

be

purpose

or busi¬
critics, of making excersive
profits, in view of the uncertainty
of being able to retain them at all.

the

that

then

proach to inventory pricing must

ac¬

losses, but also
unwillingness to be

Principles

for

clear

the

on

by

reaction
the seri¬
will

Need

o

is

It

quite

"

*

On

pend upon a great many incal¬
ciently to offset the increase in culable factors inherent in the
operating expenses, but this is not domestic and foreign situation, and
that

be

.uosequent

this

executives

being

important

an

to

of

goods.

No exact
method of inventory pricing has
ever been successfully devised for
all situations and none-probably

income taxes at
profits which might

restrospect

evaluation

some

of

pay

laies on

in

managements to

with
took

he

unless

goods

account"

greater

uni¬

of insecurity about

Business

continually

be

business

and

cused, by social reformers

is nevertheless

future.

will.1

Lurking < in the backonly the unwilling¬

business

of

enterpreneur

an

of

stock

ever

of

ness

economists that there is bound to

some

country

our

in
e-

a

stock

temporary and partially offset by

prosperity

exist

are

TV
ZZ^i'JL
increase in risk assets
mcreasmg
tneir earnings sum-,

of

brought

into

ugn

versal feeling

with no in¬

year

come.

dences

has

that

"arove

Underneath

continued

decrease

a

—*

measurement

profits for

renewal of interest in the

a

incur

gories in recamounts.4.

duty, and I know the desire
of all bankers, to avoid purely
inflationary loans. ; : 4-i4\.:.;.4
The increase in the cost of op¬
erating

VoT'

V"':

realization that there could be nb
true

round is not

ur-

cat

world¬

many

circumstances

eserves.:

ord

be the

r

t

c

also

most

credit

it

imposed,

are

is

ers

cars

at one-third of the
purchase price.
The reports also indicate safe
and
,.

how

excepting new so in many of our larger institu¬
cars resold
shortly after they were tions.!' 44 ■
purchased. 4 The down payments
Increased Loans Offset by
required on cars are continuing
lr Decreased Investments

.

than. 12

second-hand

4

t

regulations

Regulation

more

•

4

In all of our credit ex¬

tirr>p

"W."
I
have yet to
any
banker : permitting
than 24 months for the re;.. payment of loans on new cars and

•■•.4-"

be.

can

dication

hear

•

it

credit loans on terms more
liberal than were permitted under

.•V-.VV more

,

know

tensions," whether

be

to

;

We

'

problems of inventory pricing and
n the allied
subject of inventory

ness

ers,
distribu¬
tors and deal¬

destructive

tion.

higher

physical
quantity
of
goods held by

No banker desires further infla¬

member banks

schedules

to

the

Do Not Want Inflation

Bankers

all

to

i

""

uncertainties.

about

is

'

the impact of

hese

national

[price levels,

be used

pared and for¬
warded

1

•

..

The fear that is generated under

part of

ventories

quire
goods
deemed
necessary.
Many have already waited years
to acquire what they desire,
4-.4

As¬

sociation'

Wnile

automo-J

in respect to

so

mittees of the

,

Introduction-

1

still trend-

own

Sutton, Jr.

"

are

uj

Frank W.

-V'

■.

——————^

ful day in American banking. For the first time in several years it
is now possible for banks to extend credit on terms and conditions

proscribed by their

|f[

•

.

It is easy to set the
stage for this subject. Business concerns, large and small, are„r
approaching the end of another postwar year characterized by inflated prices, a
high
volume of business and in most cases
large profits. Nationwide, inventories are at the high
est volume in
<«>—*——
-'
•'•••- ■"—1——

'Urges banks increase ratio of capital to deposits and foresees higher
bank loan rates.

'

■r

inflation and tax relief is needed.*.

to curb

•

.

Says increased

not conducive to. inflation.

as

v

need for changing accounting valuation principles.

no

•

financing

consumer

l|4*- vf

Accountant, taking note of growing interest in inventory pricing because of current inflated
values, 4
high volume of business, and resulting large reported profits, sees growing fear on
part of business
management that they are paying high taxes on profits which may be offset
by subsequent losses. Points
ont valuations cannot be exact, but supports view accountants' rules are a better gauge than whims and

credit control* and defends

new

13

By MAURICE H. STANS*

;

.«

President, New Jersey Bankers Association

cial terms,

(2377)

i'fetf: -t*

President, The First National Bank, Toms River, N. J.

»:

.

CHRONICLE

Pricing Under Present Conditions

v;\:

•

WiU Curb Inflation
r

FINANCIAL

Jiik■.-< V

Not Controls,

/

COMMERCIAL

the

is

jewels 'I

am

brief- of

plate, and
'tis exactly

money,

possess'd

of:

valued."

Shakespeare unfortunately did not disby footnote or otherwise, whether
Cleopatra used<;"Iifo" or "fifo" in her
calculations, or whether she observed the
"lower of cost or market" rule; and of
c'ose,

course, there was then no Securities and
Exchange Commission to impose this ob¬
ligation
upon
him, so that the secret

lost.

is

.

.

(Continued

on page

29)

.

-

Restrictions
Bankers

believe

well, qualified

4;:;44:'4v;4

they

are

very

establish

to

their

financing terms and are defi¬
nitely opposed to any new credit

own

restrictions.
of

has

been

a

large increase in the amount

very

44

There

credit

consumer

outstanding

f®4

and this increase occurred
during
the
period
of

lli

from

i®

credit controls will
It seems to me we

Regulation

Notwithstanding it
September,

1941

"W."

in

was

to

force

Nov.

1947, the spiral of inflation
tinued. Now

more

and

told

we are

1,

con¬

consumer

stop inflation.
need

produce

more.

suggesting remedies

to

to work

1 No

one

Congress

to
mention
this
solution,
since the end of the war the rec¬
ords of our banks show
cares

clearly the

first

consumer

goods "were

ac¬

quired by those having the cash
with

the
.

44:;
V

•

-

cash has

.

are

4

:*.•*

which to pay and gradually
percentage of those paying
been

decreasing.

to; maintain

omy

we

our

present

continue

must

If

we

econ-

our

high

production and increase^ it wher-

•.

T, ever poss blei Already dealers are
4 "finding their inventor1 es increas-

■

ing in

.•

manvr

lines and it is not

as

'

easy

.

:

to find purchasers as it

Many bankers

vi.

were cf the

production would
in

: ('

some

lines had

have

.

Since the
been

war

1 \

many

priced .out

where the cash

opinior

decreased

Regulation "W"

been continued.;V
.

was.

of

was

4

.4

conditions exist.

normal

.

It is

to .have our homes,

desire

banks,

our

stores

'

buildings, repaired

public

, ;

.4 4

,

;

and modernized. New school build¬

highways, bridges, airfields
things too numerous to

ings,

,

r:;

T/iis announcement is not an offer to sell or a solicitation of an offer to buy these securities.
4 ' ' i 4 ^
'
The offering is made only by the Prospectus.
■
\-4'444:"4:4*:•:v,r4'

44444?4'•

and other

mention

needed.

are

All

cost

money and require
credit. It is
quite evident we are headed for a
continuous
credit expansion for
some years to come.
Every bank
increasing its risk assets is putting

its

on

books

months
as
a

or

losses

for

The Cleveland Electric Illuminating

-

future

Company

that will develop

years

economic changes occur. This is
normal phase of banking that

should be expected and in antici¬

'•„!

of
such losses adequate
provisions should be made to es¬

pation

tablish

against which fu¬

reserves

losses

ture

be

may

setting aside

a

charged

reasonable part of

Capital Position of Banks

First Mortgage Bonds, 3%, Series due 1982

Dated December. 1,

•

f

-

.

Due December 1, 1982

1947,

by

ri;''"''4'*1 Price 101.08% and accrued interest

all interest and discount received.
:

•

•

j.

Once again I would like to urge
all bankers to review their capital

positions

in relation

to their de¬

■•■iffy* If if The Prospectus may be obtained in any State in which this announcement is circulatedfrom only
ffiyptppi: i f of the undersigned and Other dealers as may lawfully offer these securities in such State.

posit'liability and risk assets... It
is unlikely we will ever have a
more

;

favorable

procure

new

-:

tors.;.
—

such

•

opportunity
to
capital from invesT

■■

HALSEY, STUART & CO. INC.

of the Currency,

Acting

Chairman

Comptroller
while serving as
of the Federal

Deposit Insurance Corp., gave

4

.4 4
OTIS

4

me

BEAR, STEARNS

4 PHELPS,

CO.

(lNCOScO«ATED)

<

&C0.4

people have

44BURR & COMPANY, INC.

the .market,

capital accounts to total assets of

'iff

*"

'■/■■■

not available

all operating banks in the United
because they were.unable to meet* States increased from 6.7 on Dee.
on

4
4

4 BLAIR &. CO., INC.

4

•;

4

•*

GREGORY &. SON
'

4'!'

•

4 DICK A MERLE-SMITH
t.I

«

>

>

1GREEN, ELLIS A

ANDERSON

^

•*. ♦
—

r

'<

...

•

' INCORPORATED

BACON, WHIPPLE &. CO.
HILL & CO.

4

HIRSCH & CO.

'

An
i

..

the

address

Mid-Year

-

...

;

1.

-

by

-

Mr. Sutton, at

Trust

&

the

New

Banking
Jersey
Bankers Association; Asbury
Park,
J.y Dee>-3,- 1947^.
Conference

of




The

ratio of

District

banks in

F.D.LC,

*

THETLLINOfS COMPANY

WM. E. POLLOCK & CO., INC.

STERN BROTHERS A, CO.
>1?U'

No.

2, of which North
Jersey is a part, is the second
highest i in the country.' It ;in**
( Continued oh page: 27) - * t
-

fc-.w A*.

December ! 1, 1947.

;

STROUD A COMPANY

INCORPORATED

AUCHINCLOSS, PARKER L REDPATH

June 30, 1947.

4

SCHOELLKOPF, HUTTON &. POMEROY, INC.

FENN & CO.

''

figures I. know will be of
interest to you. The ratio of total

some

31, 1946 to 7.0

4"

.

..

Mr. Preston Delano,

,;^o
J'V'i

>

i!

.

'

14

Thursday, December 11, 1947

CHRONICLE

FINANCIAL

&

COMMERCIAL

THE

(2378)

Secretary Snyder Urges Tax Revision
Securities Salesman9s Corner

/

By JOHN DUTTON

There Are People

mediate tax reductions,

In speaking at Houston, Texas, before the Houston Chamber of Commerce on Dec. 6,
Secretary of the TreasuryjJohn W. Snyder stressed the importance of maintaining the
government financially'stirong; ;and;' although advocating a review of our outmoded tax

Who Can't Be Sold—They BUY!
The

themselves—we wouldn't need salesmen.

If securities sold

s

how"

acquired by a competent salesman cannot be learned
books—it also takes experience and practice.
However, the

"know

from

principles of sales psychology are applicable to the securities
as in any other line of sales endeavor.
You can have the
speculation, for offering to the public;
tout if you don't know how to make them WANT IT you're licked. ;,
,
,

he would admit that HIS OUTWARD

than

FIDENCE

HIS

IN

BLUFF TO

HIDE

JUDGMENT,

IS

INNER SENSE OF TIMIDITY.

HIS

he about the product

than

REALITY

IN

upon

ing of

can

just

as you

long

who knows

develop into

of the most satisfactory accounts,

one

let him feel that he is doing the thinking and in¬

vestigating. AND THE BUYING.

Try and jam. something down his

throat and he may buy it—BUT NOT FROM YOU!

He'll call up an¬

This

i

all

may

sort of strange—but there is

seem

the surface.

explanation—but it doesn't matter how

to it

more

Modern psychology probably has

than

technical

a

frustrations this fellow

many

lias had in his childhood—the main point of importance to the sales¬

i

soothing

It's

the

old

same

brings

ways

syrup

HE LIKES.

dose—you

results.

First,

•

can

don't

certain

ideas.

interests.

securities.

a

criticize

his

a

folio.

as

explaining

your

be

why

It al¬
Become

Show

why he

you

ties,

owns

or

like it.

an

Sug¬

thorough
make

,

as

the

Of course, Harry knows all the time
that he wanted to be
sold;
but he never wants you to know
it.

Incidentally,

Harry

never

reads those

long SEC prospectuses—he, also wants
you to do it and
then tell him about it in language that he
can understand..'

Georgia Power Bonds/

1/

Offered at 101.42

For

Gerogia Power Co.

Profit
The

$5

Preferred

stock

of

an

85-year-old New -England com¬
pany,
which has a ' dividend
accumulation

of

$77

share.

a

Earnings over the previous ten
years
have averaged $21.30 a
share.
While

paid

dividends

no

for

a

have

number

of

been
years,

earnings, in nine of/the past
ten years covered
annual divi¬
dend

requirements by

a

wide

margin.

Recent price 37
Ten-year

average

the Common $4.07

7-

earnings
a

in

Some

and

of

Kidder,

their bid of

terest
are

rate

beihg

price

of

terest,

Blyth & Co., Inc„
Peabody & Co. on
100.69, naming an in¬

3%%. -/The bonds
re-offered today at a
of

101.42

to

and

accrued

in¬

yield

approximately
3.30%. Proceeds'ate for
expan¬
sion/of the company's facilities.

Recent price 7

modern

our
...

expanding
/

■

.

of

on

[,/

these,

/"During the
were

past

years,7 when

striving to increase Fed¬

eral revenues, first to prepairerfdr;
and later to fight, the costliest war

in history, we were compelledito
give high priority to those meas¬
of taxation that would bring

in sufficient revenue. Of

necessity;

it

easier

business

for

"The

needed

after

expansion

of

the

competitive

ate;-to^disturb

trade.

"But

must

we

the / tax / on/

unduly

or

some

individuals with low in¬

on

are-

'

-

„

•

1 *

~

.

that

believe

under

more

normal conditions it could not be

7 "I further believe that in

ing the tax system it is impoitant
bring about greater equalization

questions.

example,
what
specifically is there in the present
tax system that lies in the path

come

of

burden on business income,
pending, uflon whether it is

continuing expansion of Amer-

in

the

taxation

business

of

in

ducted

the

of

form

markets for the products of Amer¬
ican industry? What are some of

ity

the inequities which have { crept
into the American tax system and,
tolerable during conditions

degree of equalization would

should

to the

ojfAvar;

"In

the

voted

eradicated?

Treasury

have de¬

we

deal

great

a

7-77

have

we

released

major tax-studies; 15 others
and

process

lease

are

-

ap¬

con¬

should be given
problem which has received

much

so

!

■

.

discussion

"There' is
discuss

not

all

elements of

in

recent

sufficient

of

the

time

important
policy

fiscal and tax

a

stated

before

the
on

the

first

requisite

permanent

to

welfare and is the keystone to

security of
"I

am

people.

a

/ ;

convinced

the!
■ \

/••

that

"

before

conclusions on tax re¬
duction, the Congress should first
reaching

consider foreign aid within a bal- 7 7
anced

budget; second, debt reduc¬

tion ;

and.,third, equitable tax
vision. 77/7,7 7/7:

re-

willrbecomfe feasible/arid

proper. 7

"We
must,,: remain ; a
nation
strong economically, strong finan¬
cially,, and > strong, in 7the det,er-

...

.

mination .to
sibilities of

exercise

our

leadership.

-

/J./
-

respon¬

.7. 7* /7.

•

"Devotion to the principles, of a. •'
free democracy has, been the,com- 77
pelling force behind the progress/7.
of our system of enterprise. And,//
under-the continued guidance" of ;
these principles, we will persevere
as a powerful influence for
world-///
wide economic stability and gen- 77
uine world peace.'/ ;;
•
7 :?. ; -

Southern California Edison Preferred Offered
First Boston-Harris Hali
•:•// An underwriting

Group

by The First Boston Corp., and
Harris, Hall & Co. (Inc.) on Dec. 10 made a public offering of a new /
issue of 800,000 shares of 4.88%, $25 par value, cumulative preferred

Ways

group headed

stock of Southern California Edison Co.

The stock is

being offered at
/7 ;./;/■;/
7' /7«//
as
a
whole or in part at
rnately
4.65%.
'
7
/
'
i
* able
company is a part of Com^ duce adequate revenue. It should
-/ The issue was awarded to the prices Tanging, from $27.00 if .re- 7/
monwealth & Southern
be equitable in its treatment of
Corp.
deemed
before Jan.
group in competitive bidding Dec.
1, 1953 to ,c
9 on its bid of $25.05 per share $26.25
if
redeemed
after
Jan.
for a $1.22 dividend stock..
).
l, 1963. >/7;/7'>7/i7g'7
■
z
Proceeds from the sale of the
Upon completion of the present >7
stock will be used to retire $16,firianqing papitalizatipn;//of //the7l>;4; Over-the-Counter Quotation Services
OOOjQOQ of bank loans incurred; in
company will consist of $138,000,connection
with
j
the/ company's
"/■■i://"/:-; For 34 Years
000 first and refunding mortgage!;//7
program of construction and the

1947,
"

as

'The

follows:
tax

•

system

$26.25

should;

per

share to yield approxi-3/ '

•

pro-r

,

balance

partially to reimburse the
expenditures: for

company/' for

St., Boston 9, Mass.

;

259

.

46 Front

N. Y. Telephones: HAnover 2-7914




obligations.
- ;
)
"In closing, I would like to re-/V
state my strong conviction that a "7
financially sound government is 7

*

May 19,

NATIONAL QUOTATION BUREAU, Inc.
Teletype BS

have / prerequisite /; j

in

repeat here those fundamental
principles of a sound tax structure
1

'

7/

re¬

"I believe that it would be well

which

it

"r

not opposed to tax

arn

to

and Means Committee

\'
perfectly
-

,

several

next

*

•

12

are

scheduled for

the

during

months.

In this

to be attainable;

nection attention

to

date

to be neither desir¬
practicable, some greater

nor

pear

v *

"To

incorporated

art

or;

time

questions. 7

to. make

time Z

"When the necessary prerequis-

may prove

able

best

to these

want

a/

it.

ites have .been/met, tax reduction

business. While complete uniform¬

study, to provide the
public and the Congress with the
answers

at

de¬

and" months, namely, the double taxa''
American tiqn of dividends,
| ...

of

debt

con¬

unin¬

an

corporated

be

in¬

regardless of the legal forms
of organization. Present law pro¬
duces important differences in tax

which, if unchanged, would sooner
or later interfere with
expanding

now

our

shouldreduce

met certain necessary

revis¬

to

ican business and industry? What
is there in the present tax system

we

feasible and proper after we
.

detrimental to business during the
war and postwar inflationary pe¬

"In meeting this need, the Con/
gress must resolve many difficult

For

,/ "I

prof¬

Continued without harmful effects.

from

7

when

reduction./ I believe tax reduction

deter

public

/

less favorable business conditions

•

Z

con-

clear that I

riod,,, I

American

public

-

/-•:

fidence in government obligations

comes/; Still others would, unae

-/.

,

/ '

tional.and charitable foundations.
We must not weaken

burden¬

revenue

strong, balanced tax program/. We
need a tax system that wilbnot
the

by individuals, by. insurance
companies, by; banks, by educa-

£reigM//vpther /excises/; produce
Cither/ unimportant; amounts of by' ignoring

ing excise tax system has not been

a

public debt has been

our

held

transportation / of

7" "While it is true that the exist¬

devise!

now

■

/ ;

government and the people of this Z
country. -Government" bonds are /

tions/? An outstanding example is

the

for

The

i

:

although

rela¬

industry
j

war

American

we should maintain
budget with adequate

balanced

t

make it difficult to carry on

request

:

-

provision for debt reduction. '
• j
"It is; a sobering thought that

pomplex excise tax struc-

additions
and
better¬
ments for the nine months ended

property

Tel. CAP. 0425

Cer-

years.

is among the matters which materially reduced from its peak,
require especial attention in j it still remains at the staggering
the
process
of modernizing the figure of $258,000,000,000.
w,
/"The public debt of the United
tax system to make it compatible
with the continued expansion of States is a contract between the W

other capital improvements. Gross

148 State

17

will

itable enterprises.,//

:

in

time

ture

and to the incentives which would

and

first

of prosperity

and

government to plan for the future.'

adequate attention could not be
given to considerations of equity

special situation mailed
4

the

measures} were
adopted during depression condL American business and industry.:!
tions; others during the extraor¬ //"Some/of-/the present excises
dinary circumstances of warv /f/ip: enter into business costs and oper¬

December

9 awarded a new issue
of $10,900.000 first mortgage bonds
series
due 1977 to ah
underwriting group

consisting

of

system were adopted under
conditions vastly/different from
those which confront us currently*!

be

;

S.

U.

Treasury closed its
last fiscal year with a surplus for /

A stable tax

basic tax structure.

-

"The

j

share.

descriptive analysis of this
;

oif

debt.

flexibility

a

investment/

;

to

make

"

jlf

economy.

phase,

ity confined largely to changes in
tax
rates
and
exemptions, will

expan¬

have done this job thoroughly and well, nine times
out of ten
you can then pick up the telephone and
say, "Hello Harry, how are
you?" "Harry, you can buy ten of those Consolidated
Psychology 5s,
they are all right." He may only buy five of
them, but if he is going

other

tax
Structure,
which today
fully meet the require¬

providing markets for this

If

the

have

not

of

sion.

you

buy at all, this is the way he'll do if'

re¬

is necessary in

possible END YOUR INTERVIEW BY LEAVING HIM SOME
LIT¬
ERATURE TO READ AND EXPLAIN THAT
YOU ARE GOING TO
CALL HIM ON THE TELEPHONE IN A
COUPLE OF DAYS,

to

,^n.

"Many elements in the present

his

suitable addition to'ftis port¬

why he should

reasons

and

owns

certain situation and

questions and

again.

points.

your

investments, his

gest that you believe it would make
Answer his

and

\}\

;

Take him to lunch.

Find out what he

Don't

Tell him about

it time

use

pressureJ

friendly—be sympathetic to his ideas.
interest in his

him, and then give him the

you meet

domestic

pos¬

without frequent revisions of the

be

tax

ures

is to.recognize him when

man,

kind of

would

7/:,77';' •!
ments

we

appears on

believe

tainly during this present period /

'

other broker and buy it (if he likes it) and you'll never hear about it.
'

I

structure, with necessary flexibil¬

does

sign.

go

which

maximum salutary effect upon our

our

economy.

the

loyal customer, provid¬

a

this

achieve

would

John W. Snyder

is

he

that he is satisfied with the purchases that he makes.

course,

This fellow
as

A

buy-*-so he'll check

his salesman pretty carefully before he gives him

up

If he finds such a salesman he will become

Since

someone

he expects to

ONLY

nomic conditions, it should be
sible

equitable

CON¬

OF

fiscal

wards

sound ness

vision

OWN

intelligent, he realizes that he must rely
more

SHOW

'

should inter-

groups., it

cliff

..

the sales process which

is involved
when you go oufto sell the fellow who LIKES TO THINK THAT HE
MAKES UP HIS OWN MIND.
He is a pretty common type of every¬
day human being, that you meet on every street corner. The woods
are full of this type.
Somewhere he has the idea in the back of his
head that he has a mind of his own. He is usually a thinking fellow
and tries to be well informed on most subjects.
He is an individ¬
ualist.
He has a highly developed ego—but he won't admit it any¬
more

a liferent

-1
op-1

/There is one
however/ which I
Said Secretary consumer markets that are essen¬ would emphasize.
/77'/7
"As Secretary of the Treasury,
Snyder/-///'^ tial for high-level production and
"One of the employment.; Taxes should be a3fl must consistently and forcibly
advocate the policy of providing
most effective Csimple to administer and as easy
steps we can to comply with as possible.. While sufficient revenues to meet cur¬
take
obligations and
to permit
in, gov¬ the tax system should be flexible rent
ernment: to¬ and ..change
with changing eco¬ steady liquidation of the public

business

let's investigate

""

m"

e

posed immedi-j fere as little as possible with inate general tax centives to work and to invest
It.diould help, maintain the bioad
r ed u ctions.

same

week

t

s

y

s

most attractive investment, or

This

while emphasizing need for a financially sound government and opposing imhe expresses approval for a revision of taxes.

In address at Houston,

Chicago

Established

1913

' -/ /' ■/

.

!

■

/

f

Street, New York 4, N. Y.
/

•

San

Sept.. 30,
1,40,122
1947

and the

and 1949
Francisco

mate.
...

1947 amounted to $35,and for the balance of

The

are

calendar years

125,000,000.
new

1948

exoected to approxi¬
1

v

/

/

'7

•

:

.stock will be redeem¬

bonds, $16,000,000 bank loan notes,
and

capital stock,

value,
5%

as

follows

original

071

shares

offered.

7

/
/

preferred,. 1,653,429

7

160,000

,

.

preferred, 1,653,7; 7

.4.48% / preference, v77

shares of

thepreferred

.

shares

shares of 4.32%

3,183,091

"

all of $25 .par

common,

stock

now

and

being

7 '..7 1

"

Volume 166

'

Number 4654

FINANCIAL

COMMERCIAL. &

THE-

■

.

iii'

ii

"

•

I.i.

"

n

I.m 11

him

i IN

11)1

1""

-

CHRONICLE

if' "»'

9

(2379)

15

in n—wpy—

Tailoring the Federal Budget
By THOMAS Si HOLDEN*

What to Do About It
Vice

"•'.-I-

Economist, Swift & Company

'

'

Mr. Holden describes tax studies of National Association of Manufacturers which resulted in

;
;

because of Fcchrai Governments fluctuating policies, Mr. Arthur

\

up

characterizes present boom as highly vulnerable. Sees hope in
Federal Government showing signs of adopting counter-inflationary '
policy* but points to weather, bonuses and wages as likely to

"run

"r;
I hope that
with

the price bulge this fall."

up

chairman's decision to invite

our

of this round table

not

was

inspired by

^^

me

•*wiso

..

I

fill

;

could

it,v for

thought

;

p

That's
11

.

Jr>ited

States

•

staxtling

I

reduction

new

a

'>

1

shows

contrast

'■

no
real countries in the world, parCcuhedge.; against :arly those in. the Eastern Hemi-

was
•

inflation/r.

| sphere.

have

We

.

attained

full

But, to turn. employment; - we have irx ' very
more
directly ccps derable measure restored the
to the subject .normal flow of consumer
goocts
oTjhour odis- with the exception of a. few: in
cussion, "Tne the durable goods classification
E c o n 0 m i c iik,e houses and automobiles.' The

1

Outlook

and

What

-Do

to

restoration

This

'

w-

•

.

ornmended in

\

poii;

fcra-

s

e

tion.

0 n

w.s.lful think¬

ing.; It

the

e x

h

a

u

"

"

II"

It

the

of

study

S.

Thomas

ustive

■

which

we

will

's the highest

re¬

All

When we entered the war we
had: gone through a decade which

good.

"'J*

,

V

began with disastrous depression,
by eight years of, more
less
our

frantic effort
government

to9te*flLinflation.
what

it

of

giving
with

int

war

process

get

considered

prosperous balance
called -"re'-flation."

The*

The

trying to

was

a

back

about it.
M

The

'V--

V

by

goods surely is one exception,

jumped

with

supply

close of the

the

practi¬

war

cally all of the pressures
on

relative

were

of

through the first two years
V-J Day was seeking to
-

This is under
<

an

imagined deflation¬

iff

'
nowhere

is there

omy

tendencies.-,;

■.

no

circumstances

solicitation

of

in

offer

have

econ¬

grown

like ragweed

blooms.*. Those who'are sensitive
to the winds of human opinion,
like these, who .are allergic to the

ragweed, have gpne into paroxysms
and wheezing and blowing.
Con¬
gress has; been assembled with one
of i,ts purposes to do something

lational .vtotal

vv

,

*

1

'

>

remarkable

Industry,
1947.

1

s

-,

fiscal

of

individual' in¬

($2.50

par

be held be¬

set

out

rate

New

York

Dec. 3,

fensible
have

trade"
one

series

of

refrained

-

estimates,

from

order

is

really

leave

to

expected
for

room

Subscription Price

war.

■

*

.

(Continued

page

on

offer to buy,

or-as an




32)

or as a

9, 1947

Company
.

?

i.

■'

•>

!•

-

'

■

Warrant Holders

to

f

of meat

counter.
much

the

on

other side of the

Disposable' incomes

more

than

double

are"

t

'if

nrewar

levels and with meat supplies in¬
creased

by only one-fifth, .it is
natural, to find prices going, up.
We

.,

made

which
index

of

most

<

a

showed
the

recent;, calculation
tbatp the. current

exact

,V;
>.

\ '

to

per

'

<

y

^

share

•
\ '

- „."

*

'

"Vs

During the subscription period, the several Underwriters* including the
undersigned, may offer shares of Capital Stock acquired through the exer¬
cise of rights and. any shares of unsubscribed stock at prices not less than
the subscription price set forth above, and not greater than the highest
price at which the-Capital Stock is then being offered by others in the
over-the-counter market plus the amount, pf any concession to dealers.

dividing

illustrates

an

index

by an index- of

..f

the

.

..

:

Copies of the Prospectus

■

-g.1-;..;

writers

extent "to"

divide -into

(Continued

on

the

national

page

36)71 r;

may

be obtainedfrom

securities and in which such
y -• J-**

■

7(_.

y.. ff;

any

of the several under¬

of the unsubscribed shares, including the undersigned, only in

States in whicfii such underwriters are

which

meat

$13

-j

falls at al¬
point that would

the supply of meat., •

This

'

meat prices

of national income

v

.

4

■

■, '•)

^

qualified to act

Prospectus
-

■

■

'.

••

as

dealers in

legally be distributed.

may
•

.

r

in

com¬

promise. We offer this budget as
a maximum, and we
really mean
a maximum, with no intention of

value)

•

we

"horse

the

philosophy, which is that
always ask for much

than

k':y(

.

our

should

more

Rights, evidenced by Subscription Warrants, to subscribe for these shares
by the Company to, its. Stockholders, which rights will
expire at 3:00 P. M., Eastern Standard Time (12:00 Noon, Pacific Standard Time), December 22, 1947, as more fully set forth in the Prospectus.
!

of

City,

in

as a

have been issued

vy-

op¬

can

amount

! Capital Stock
I

year

reasonably cost
are points

r';

r

be

ceiling. In that event,
the lower figure should apply. In
undertaking a realistic and de¬

constructive step

*

igggl

The

comes.

.

ican

should

any

'

prices respond to. change?
in;money incomes. >And if the
postwar reconversion in the expectations of the U. S. Depart¬
ment of Agriculture are correct.
expect, beginning
* A statement by- Mr. Arthur at we, should
a
panel discussion of the-NAM sometime next spring, to- have' a
sightly
smaller
total volume o'
52nd Annual Congress-of. .Afr¬
The

the

budget

offering of thest securities for sale,

as an

to

to what the Federal

at which the cost
low

phasis, upon, increased production,
There has been ample discus¬
sion of the capital formation study

be construed

buy,

proce¬

Congressional

the

clear evidence of

so

be calculated by

.Iff>v.-

V| Now, to turn to the more direct
question and to more strictly eco¬
nomic terminology, we can cite
some very favorable pages in the
record.

The subjects of

'

he

the

beginning to show their

about it.

by

i) .■«i.;-'

Government that the seeds of in¬

are

of

for

December

•

and

to

to

a

in 1949. No doubt there

The American Insurance

.

the

,

flation

at

of such securitiesv These securities are initially being offered by the
Company to its Stockholders and such offering is being made only by. means of the Prospectus.
an

is

budget.

believe

we

662,504-Shares

decidedly do not have sta¬

Perhaps

,

■;,4^.■■ ffifffffff-ff-'ffff}
inflationary
But the number of dollars oh
• ?
. *
- ••
- This last is one of the
important one side of the meat dealer's
have
increased * much
.facts in our present situation—a counter
belated recognition in the Federal "aster than the number of pounds
is to counter

concern

as

NF.W ISSUE

supply of meat'has
up
one-fifth from prewar
ary threat one minute, an imped¬ gone
Farmers are doing a
ing inflation the next.
Only in overage.
the past few months have we had good job; the nation doesn't have
a
shortage of meat per capita
a recognition on the
part of gov¬
ernment ■ that
our
predominant mmpared with the supply before

counteract

arrived

-

industry. "The value of products
sold by this industry tend to move
/ery closely with changes in the

ment

a

this

We have prosperity,

way
inflationary pressures
work as in the livestock and meat

after

•

scarcity of

redundancy of money,
capital requirements,

goods,

tremendous

New

52nd

of

to

bility.

still

inflationary side; scarcity

NAM; Annual
American Industry,
York City, Dec. 5, 1947.
of; the

Congress

military

.

unbalanced budget and so forth.
Still the policy of our govern¬

of

sion.

the., available
purchasing power in

;his country.
but we

the less.

none

At the

disease, but infla¬

our own

of continued

rrcsoect

guised

tion

1948,

erations

toward the solution of our present

their feet, are aU matwhich
leave
us
with
the

ers

mods

treating symptoms

It is

taking.

ree-

atten¬

your

that

maximum

which

Committees

en¬

'•'.♦Address by Mr. Holden at the difficult price, problem, a solution
Government Finance Special Ses¬ which must include strong em¬

get on

o
.

strained in some respects
by war¬
time controls, perverted and d's-

by

^The $31 billion maximum

cntrol, or to assist effectively the
ifforts- of other countries trying

over
the position of even
balance and found ourselves faced

rather than the

.

restoration of the

a

economies under

right

inflation, both potential and
actual—inflation which was re¬

The increase'in the flow

.vhere-toward

pressure

We

Department. The

report was approved by the NAM
Board of Directors on .Oct, 29.

which government spending has
been cut, the failure to get• any 2

in tlrs

recovery

Association's Gov¬

con¬

realistic, and which I shall outline
to
you
presently. The amounts
proposed for the various services
and functions represent our best
judgement, based upon the rec¬

those soidies are capital forma¬
tion, tax revision, and a maximum
budget ceiling for the fiscal year
1949. The program that has been
developed as; a result of these
studies, if adopted, would go far
toward restoring the economic, in¬
centives of work, thrift, and risk-

from

over

thf
increasingly .seri,

our.

the s.aff of the

ernment Finance

been

have

gaged, during the past year, in a
series of independent but inter¬

locking studies.

fact

ommendations

been

you

various items contained in it

dures

Studies

has

direct

me

the

to

The

pro¬

i statistical

the

recommended

•

staff

NAM

forth

First, let

as

of Man¬

tax

a

with

of the budget study has
placed in your hands.

tion

such

discuss

to

aut the wage demands fostered by
he government, the feeble' rate at

process

,i1w" "

a; vengeance./

to

carried

or

have de¬

we

inflationary unbalance with¬
doing anything very -.effective

out

a

inflationary

us

)us

time

same

period,

war'

govern¬

e rv en e d

impeded

,dvi^d ::-r'd;:'d:d d-'d

the

veloped,

part

-

for national pride and ela-

■

At

ihealthy,

a

by

proposes

..

been ;are based on a study prepared' by
Dr. Harley L. Lutz, working with

isdefinitely.dtp;,, the
have prosperity.; It is

We

acn.

by using the traditional

recovery
ment

the

on

to. create

this,

.a cause

followed
of

that has ever
history, 7■■jffSf

attained in

some reason¬

/■

or

ensuing years.
an organization

setting

*-"-A~

hope

semble peace within
able future time.

itures in

NAM Tax

■

dition

been

toward

tax
burdens, *it is likely to be
challenged to snow that this pro¬
gram
will not
undermine
the
budget.
•
'
:

Holden

is

ment

clusions

step

gram, and particularly, one wmich
involves a substantial reduction of

current JFederal Budget and of
necessarilyincomplete
seems
to
me
j and this situation probably holds analyses and recommendations re¬
that " we
can
forth the most hopeful potentiality garding possible economies made
H.. B. Arthur
b e s
ty inter- of sustained higjb level production oy numerous, committees, and sub¬
committees of the two Houses of
some
time
Pcet ^ today's "or
to
come.
The.
situation in terms of the
Your commit¬
progress standard of living of the Amer¬ the" 80th Congress
that has been made in
restoring a ican people; that is, the real inr tee's report and recommendation
with
war-disrupted economy to a con¬ come in terms of goods*consumed,
regard to the Federal Budget
About

commit¬

the

here

briefly
some
aspects
of
these
budget recommendations. A table

gressive

ufacturers

of

That

arrive^ Sat by

expansion, pf in¬
dustrial plan! and capital equip¬

pose

the National Association

qd.iViciloja was

and.

ultimate

the

budget reduc¬

represents

When

Spending
Committee

of

taxr revision program by-

tee's view of what is practical and
for fiscal 1949: as a pro¬

Go verniment

NAM.

view

the

other speakers. It will be my pur¬

further re¬
ductions in Government expend¬

con¬
of the

viction

It

and

re-

this As¬

feasible

Sum-*

marize4
studied;

committee's

goal of peacetime

not

d

your

does not represent

sociation's

state¬

is

ment

in

present
all the other

by

$3 billion.

\ffj.

itself

be greatly reduced without impairing services, and contends present general expenditures
are far too high. Allows $4 billion for contingencies and foreign aid.

estimated

an

the

to

sta;te of practically

there

■

placing
Says National Defense and Veterans' benefit

1949 Federal Budget.

on

It is entirely practical and realistic for taxpayers .to demand that Federal Government
expenditures for the fiscal year 1949 be limited to a maximum of $31 billions.. Such a limi¬
tation would permit tax reduction from present levels in the amount of $7 billions and debt

a

.

can

v

$31 billions

>

to be; a member

potential supplier of meat.
here should be classed as a "hedge
against inflation."
ole for me.
I &—t
-

spending
,

selfish effort to eurry favor
If this is the case, my presence

a

...

maximum of

a

like ragweed, largely

grown

Chairman, NAM Government Spending Committee

"

By H, B. ARTHUR*

'

Asserting seeds ol inflation have

-

President* F. W. Dodge Corporation

.

•

••

The First Boston Corporation

THE

16 ; (2380)

COMMERCIAL

&

BOSTON SECURITIES TRADERS ASSOCIATION
The Boston Securities Traders

Dec. 4,

on

Halsey, Stuart Offers

Association at its Annual Meeting

officers and governois for the

1947, elected the following

Cleveland Et. Bends

ensuing year:

A

NSTA Notes

Electric

ASSOCIATION

New York the

series

3%

bonds,

due

1982, on their bid of 100.58%. Re-'
offering is being made at 101.08% ;

OF NEW YORK

Meeting of the Security Traders Association of
; -

interest, "• yielding

accrued

and

Annual

Halsey,-

by

December 10
$20,000,000
Cleveland
Illuminating
Co.
first

mortgage

At the

headed

group

Stuart & Co. Inc. on
awarded

SECURITY TRADERS

1947

Thursday, December 11,

CHRONICLE

FINANCIAL

2.95%.

approximately

following were elected officers for 1948:

»

{

Proceeds-

from the sale of the bonds are to*

to tne company's cur-,
proposed construction

be applied

and

rent

.

whicn presently aggre¬

program,

approximately $93,000,000.

gate?
In

opinion of counsel
are
legal investment

bends

Arthur E.

E.

Anton

Engdahl

Burton F.

Homsey

"...

avings banks in the States of Connecticut,
Massachusetts
and
New York. It is expected that the

Whitcomb

will apply for listing of
York Stock

company

"MM

*

Me cOiids on t.e New

Exchange. ;; ; r •-1.

MM,
J

a

the
for

the

For

A:/'

the

-F V

-

1946,

year

•.

+ .

the

•/

Cleve¬

Illuminating Co.

land Electric

re¬

ported total operating revenues of

John J.

James

O'Kane, Jr.

F.

$47,713,175 and gross income after
nainten?nce, depreciation and all
taxes
of
$10,063,349;
maximum
annual
interest
charges on all

Andrew R. Steven, Jr.

FitzGerald

bonds to be

outstanding after this

rinancing will require $2,100,000.
The bonds are subject to redemp¬
tion at the option of the company
prior
the
Harold

.

A. Madary

thereafter to

President—Arthur E. Engdahl, Goldman, Sachs & Co. ,
Y Vice-President—Anton E. Homsey, du Pont, Homsey Co. 'fM-:
Treasurer—Burton F. Whitcomb, Blyth & Co., Inc.
Y '
Recording-Secretary—Harold A. Madary, Geyer & Co., Inc.:*,;
:
Corresponding-Secretary—Albert G. Woglom, A. G. Woglom &
Co., Inc.
VVi / 4 Mh'' \V;. V v-'-X /
:
Governors (two years)—Harry O. Baker, Boston S. D. & Tr. Co.;
Frank S. Breen, Schirmer, Atherton & Co.; Birney S. Halliwell, F. S.
Moseley & Co.
'
7 ■

The

Me

N?
John

J.

Meyers,

Wellington Hunter

Jr.

President—John J. O'Kane, Jr., John J. O'Kane, Jr. & Co.
First Vice-President—James F. FitzGerald, Paul & Co.
Second Vice-President—Andrew R. Steven, Jr., Bond & Good¬

win, Inc.
Secretary—John J. Meyers, Jr., Gordon Graves & Co. Vi,
Treasurer—Wellington "Duke" Hunter, Aetna Securities Corpora¬
tion.

*

Pictures taken

the

at

^

annual

meeting

appear

Governors (one year)—John J.

F.

Brown,

of

Illumi¬

nating Co. provides electric
in

ice

Cleveland

;

;;77 ..''Y/'-

Electric
and

in

?

serv-

adjacent

territory in northeastern Ohio ex¬
tending nearly 100 miles along the
south shore of Lake Erie and hav¬

ing

estimated

population

a

1,640,000.
in

steam

at

The company also sells
the

downtown

Cleveland.

of

business

Approxi¬

revenues

The Nominating Committee of the Bond Traders Club of

has selected fhe following slate ior
H

Chicago

derived

were

electric

energy

from

the

and

ap¬

•

proximately 4% from the sale of

1948:
"

of

sale

••**

'

%■

\

<

i7

'

steam.

!•

,

elsewhere in the

Kervey Russell Will
Form Consultant Firm

Boettcher

Bosworth, Sullivan & Co.

reducing

mately 96% of its 1946 operating
SOND TRADERS CLUB OF CHICAGO

BOND CLUB OF DENVER
Donald

1948 at 104.08%,
annually

1,

1977."

Cleveland

section

D'Arcy, F. L. Putnam & Co.

"Chronicle."

President of the Bond Club

Dec.

to

premium

&

has

Co.,

of Denver to

been

succeed

Other nominees

are

nominated

Bernard

for

Hervey L. Russell, who has been

''
'

Kennedy

.»'&■

'•'''j

manufacturers
with
renegotiations problems

counseling

Robert L. Mitton,

their
3

since resigning from the War Deb

oartment in 1943,

</Pf

New York City.

:t -t

step

as

will establish

an

in M

business

counsel

investment

He is taking this

he feels that the knowl¬

in renegotia-'
supplementing his experi-77
the past 25 years in the

edge he'has gained

tions,
Starr

Koerner

James

E.

Hitchcock

Ernest A.

Mayer

v;

Arthur C. Sacco

's»."

President—Starr Koerner,

Mitchell Hutchins & Co.

";77vv-:v.7

Vice-President—James Ev Hitchcock, Cruttenden &
Secretary—Ernest A, Mayer, Hblley, Dayton & Gernon.

of

ence

industrial ahd investment fields,:
will be of
sultant.

'

v

;

to

Treasurer—Arthur C.-Sacco, First Securities Co. Y 7V 7*'7Y7 :7;7;'
The new officers will be introduced at the Annual Mid-Winter

greatest value as con-

-

\

He will offer his services \

brokers,

bankers,

institutions,

:;

estates and individual investors as

-

investigator, evaluator and general
Th£ se¬ consultant, as well as stockholder
representative.
vY •" v"- '
The dinner will be held at the La Salle Hotel, and our club
Mr. Russell states he has no de-7
feels fortunate in having reserved rooms for out-of-town guests.
sire to join the overcrowded field

Diriher

Feb. 3, 1948, and will take,office March 1, 1948.:
lections of the Nominating Committee were unanimous. '

Donald

F.

Brown

Robert L. Mitton

Vice-President; Glen

Glen

B. Clark

Phillip

J.

Clark

B. Clark, Sidlo, Simons, Roberts & Co., Secre¬

tary, and Phillip J. Clark, Amos C. Sudler & Co., Treasurer. NornMated for directors were Mr.
Kennedy, Orville Neely, Merrill Lynch,
Perce, Fenner & Beane; David Dodge, J. A. Hogle & Co.; and'Rus¬

sell G. Van

Dervort, Denver National Bank,

;7

■

.rt

rill

Elmer Longwell, Boettcher & Co., Chairman, George Shaw,

Mer¬

&

i

•

;

>

MM

7' '

"market-

of

prophets,"

but

will

devote most of h;s time and energy

MM

to

limited number of

a

situations.".;1;

SECURITY TRADERS ASSOCIATION OF LOS ANGELES

■'M-'M■.:/"

Lynch, Pierce, Fenner & Beane, and B. E. Simpson, B. E. Simpson
Co. were members of the
nominating committee.
i

Room, reservations will be handled by Chris Newpart of Merrill

Lynch, Pierce, Fenner & Beane.

.

•

on

The election of officers of the Security Traders Association of
Tuesday, Dec. 2, 1947,v and the newly elected
7'777:
"
v.-'./'."

Los Angeles was held
officers are:
•'

J. D.

i

Topping to Opsn

,

Municipal Bond Firm

BOND TRADERS CLUB OF PORTLAND

James D.

New officers of the,Bond Traders Club of Portland for 1948 are
Pierre A. Kosterman of
Conrad, Bruce & Co.", President; Dan Bailey
'

1st

will

Topping

form

his

as

own

of January *.
municipal v

)

'

brokerage firm in New York -h
City.
Mr, Topping has been a C;
bond

Vice-President " 6f f. Braun,Bost

?7

worth & "Co.;:

ters*

Ihe;; with headq'uar- > P
ih^' Ne'wr.York'" 'CityT /Prior'M
"

■"%

.

>

Wjth

Mr^,, Topping
partnersijiJ;^isY newrr firm M

Associated

X
as

Will be RoswelFH; Harriman and

Oliver B. Scott

"

William

A.

•

"

Pierre A. Kosterman

of Foster &

Russell

McJury

President—Oliver B. §cott, Maxwell, Marshall & Co.* *
Vice-Presidenf—William A. Miller, Fairman & Co.

Marshall, Vice-President; Rusself/McJury of the First

N^ional Bank of Portland,
Secretary-Treasurer.'
Co.; is the




retiring President,

John G. Galbraith,

hereto with. Hipkins & Topping.:

Now Sole

Treasurer—Gordon B. Tuttle, Edgerton, Wykoff &

Co.
Secretary—William C. Pike, Buckley Bros.
:
l ?:
7
Board of Governors—John C. tHecht, Dempsey, Tegeler & Co.;
.

John Galbraith &

Jack

Alexander,

Bourbeau & Douglass,

Wagenseller & Durst, Inc. *

v

Stewarjt R: Terrill; botH of whom ^
have ;been'; with the7New York";
office of Brau i, Bosworth & Co. ?
since its establishment and, prior

Miller

.

and Donald E. Summerell,
7
.

Proprietorship-;

"

William E. Keegan is now sole

proprietor ef W. R. Britton & Co.,
120

:

-

Broadway, New York City..7

k

itj

-.

■

i

■'*

■

'

Volume 166

Number 4654

THE

COMMERCIAL

division

will

Announcement

serve transit systems,
financial institutions
made

was

of

the

public bodies and

formation

The

of

Roberts

Lexington Avenue, New York City.
Heading this new engineering firm is Edward A. Roberts who
since 1925 has*>
been

engaged

the

in

field

transit

of

ization in
1918 to

op¬

the

Office of Defense

During

also

chief
of

various transit

1945

to

he

the

Division

ger

Operations

of

maintenance chief of Queens-Nas¬
sau

1930.

Queens,

New

York

Omnibus

of

with

been

the

the

of

the

Transit

Heeler

Bureau

as

Chief

and

with

Organization,

consultants.

transit

A'A-AA

Ahearn,

witn the Beeler Organ-

was

banks

New

in

and

announced by
C. Warren
Crandall, Executive Vice-Presi¬
dent,
[of the Union National]

completed

the

roster

re-organized

in

since

months

officers

last

six
on

the board of directors in

that

time

May. At
Murphy was

Mayor

elected President.
•"/.

•

.

.

*

;

"

.

$

•

*

Company

of Passaic,

N.

J.

has been acquired by the Paterson
Savings Institution of Paterson,

through

N,: J.,

stock

is

News,"

said in part:

which

Mr.

of

-

the

Whitehead

of

tors

the

the

Direc¬

of

institutions.

consolidation
after

Board

special directors' meeting
of the local bank last night. The
78-year-old Paterson bank ob¬
a

tained

control of

the

57-year-old
Passaic bank, it was said, by pur¬
chase of the People's stock hold¬
ings of William F. Laporte, Ex¬
ecutive

Vice-President;

bank's

Bank and Trust Company of

over

New Ywk

on

Assistant

Secretaries:

of

G.

Karl

E.

John

Edward

is

Aubrey

bank

i)4tn

s

*
.

tne

Commerce in New

Bank

York.

which

Island

and

stock

common

of

14,000

and

has

of

the

shares of
par
value

each, to $387,500, con¬
sisting of 20,000 shares of pre¬
ferred stock of the par value of
$12.50

$7.50

each

19,000

and

shares

credited to the State Banking De¬

partment, was contained in
Albany, N. Y* advices to the New

The

West

..

*

;

*

Hempstead

National

Bank of Hempstead, N. Y. has in¬

its. capital

creased
to

from

$100,000; the increase

$25,000
was

•

)

•"i.




■

elected

Savings
second

trustee of the

a

in

Bank

1907;

Vice-President

President in

Chairman

ef-

inter¬

the

stock

Bank

in

He

1932.

of

been

of

that

stockholders

the

the

nected

for 61

had

in

1915

served

board

will

of Nov.

been,

con¬

of Philadelphia.

become

relations,

joined

Cashier,

"Howard

Towson

Michael

made

on

appointment of E.

Donelly,

Union

as

Cashier

National

Bank

of
of

Newark, N. J., it is learned from
Newark
states

Arthur

B.

several

weeks

further
1

"Mr.

the

"Evening

Irwin,

S.

of

Federal

elected

Reserve

Bank

of

of

for

serve

will

succeed

Cheraw,

clined

S.

Edwin

C.,

who

re-election.

Mr.

Mathes

the
prior

Kansas
to
his

of

Oklahoma
was

City

City

*

mem¬

a

bank's

transfer-, to

Oklahoma City in 1920."
a

,

The First

-

Louis,

*

following

>

*

>•

National Bank

Mo.,

has

in

promotions,

St.
the

announced

according

to the St. Louis "Globe Democrat"

of Dec. 3:

C.

dents;

to

Elmer S.

Roeper

Cashiers

to

Cashier,

Barnard
•*.

Schicker and

from

Assistant

Assistant

Vice-Presi¬

Walter L. Dressier to As¬

sistant

to

\

•/

The

and

Assistant
#

*

.'

Citizens

.

Egrle

B.

Auditor.

*

National

Bank

of

Denison, Tex. has increased its
capital, effective Nov.
18 from

Malloy,

$150,000

de¬

stock

to

$200,000

dividend

of

"Sun"

through

$50,000,

a

it

is

learned from the Nov. 24 bulletin

added:

of the office of the

"J. A.

Sydenstricker, Cashier of
First National Bank, Marlin-

the

the

►

Rich¬

has

The

Vice-President of the

a

branch.
staff

three-

a

until

and

City Bank and placed in

.

term beginning Jan. 1, 1948,

year

and

will

he

1923

of

mond. According to the Baltimore
Sun" of Nov. 20, which stated
that

since

in

the

Currency.

Comptroller of

.

r/iis is under

NFW

by

/.

as

an

at

ISSUE

December io, 1947

E83KS; Company'
Cumulative Preferred
($25

par

'ff'AA A

Stock, 4.88% Series
value) :..v".

Price $26.25 per share

'

Copies of the Prospectus may be obtained from any of the several under¬
only in Stales in which such underwriters are qualified to act as

National

take

as

a

Bank,

the

Braddock

bank

in

these

noted

were

columns Oct. 30, page
yV'f ■' Y

*TY *

Lovett

the

C.

meeting

1757.

the

"Journal"

of

Howard

the
Bank

bank's

in

the

23.

service

of

in

1923
and

Assistant

He

was

directors,
Mr.

Ray

the

High

and

Citizens

Savings

Grove

Bank

Hospital

Lehman Brother!

Salomon Bros. & Hutzler

White, Weld & Co.

Kidder, Peabody & Co.

Dean Witter & Co.

,

;

Lee

Ckrk, Dodge & Co.
■

•

.■

,

Company

(Incorporated!

■

%

'•

;•

■

•

•>

Bacon, Whipple & Co.

A. C. Allyn and Company
Incorporated

■

Carl M. Loeb, Rhoades & Co.
v

.

R. W. Pressprich & Co.

,

Schoellkopf, Hutton & Pomeroy, Inc.
■

Equitable Securities Corporation

Shields & Company

■'-*

Central Republic

•

Ccffin & Burr
Incorporated

Higginson Corporation

*•'•••••.•)

William R. Staats Co.
"

•

■

-

William Blair & Company

?

Maynard H. Murch & Co.
The Wisconsin

Company

Brush, Slocumb & Co.
The Illinois

Company

Stroud &

.....

Schwabacher & Co.

Bateman, Eichler & Co.
Juiien Collins & Company

Laird, Bissell & Meeds

Company

Incorporated

The Milwaukee Company
Stern Brothers & Co.

H. F. Boynton & Company, Inc.

Elworthy & Co.
Lester & Co.

Hill Richards & Co.

Maxwell, Marshall & Co.

and

The Ohio Company

Ball, Burge & Kraus

Pacific Company of California

Sutro & Co.

Watting, Lerchen & Co.

Bos worth, Sullivan & Co.

Crowell, Weedon & Co.

The First Cleveland Corporation

J. J. B. Hiiliard & Son

J. Barth&Co.

and

Trust

Henry Dahiberg and Company

Y

Kirkpatrick-Pettis Company

/
9

The

Treasurer

Island

E. H. Rollins & Sons
Incorporated

Weeden & Co.

was

Secretary

Secretary a year ago.
previously employed by

Rhode

Goldman, Sachs & Co.

Lynch, Pierce, Fenner & Eeane

A.

in 1946. Mr. Jepson has been with
the
bank
since
1928
and
was
elected

Harris, Hall & Company
(Incorporated)

Glore, Forgan & Co.

Providence

Nov.

Treasurer

Merrill

Corporation

•

•

!'•

elected

was

and

The First Boston
Drexel & Co.

Hayden, Stone & Co.

chosen Treasurer of
Street Bank and Trust

of

Assistant

legally be distributed.

•

0

Ray,

stated

was

may

Incorporated

was

High

Prospectus

Pa.,

over

branch

Jepson

dealers in securities and in which such

placed

was

to

,

Insurance

be construed

Southern California Edison

the

Pittsburgh. The plans of the latter

Co.

with

to

800,000 Shares

Assistant

an

tional Bank & Trust Company of

resigned
"News"

been

circumstances

Na¬

(capital $500,in
voluntary
liquidation on Nov. 17, having
been absorbed by the Mellon Na¬

who
The

no

ojjertng oj these securities for sale, or
offer to buy, or as a solicitation of an offer to buy, any of such securities. The offer is
made only by means of the
Prospectus. This is published on behalf of only such
ff'ff:.'of the undersigned as are registered dealers in securities in this State.
>
an

Klenske, all Assistant

Braddock,

the

Deposit

been

quote,

A.

Braddock

000)

the

has

has

we

has been with the

charge
ber

Class B director of the

a

been
bank's

writers

The

News"

says:

Donelly

C.

as

Federal

charge

First

announced

Linwood

Cashiers.

succeeds

ago.

here

Fred

S. GerWililams, Gil¬
bert C. Savidge, Earl H. Cunerd,
Earl
S.
Eichin,
William
H.
Barndt, Francis C. Moore, and

he

that

directors

Cary L. Page, President of the
Jackson Mills, of Wellford
and
serve

Reserve

has
the

from which

"He

was

Kansas

approximately $58,000,000. A preproximately $58,000,000. A pre¬
vious item bearing on the merger
was given in our issue of
Nov, 20,
page 2065.
' 1 •
\

Iva,

of

Vice-President; William

mer,

Street

The

Present

19

appointed

Herbst, Cashier 04
County,
Manager of Fidelity's

office.

City,

charge of the credit
department. R. L. Mathes, Cashier
of the Oklahoma City
branch, was

Baltimore

directors all effective Jan. 1, were:
Samuel J.
Livingston, Assistant

elected
the

1945

F,

of

Federal

Cashier

said:

bank

the

year later. Other

a

appointments

entered

Bureau.

of

also

,

The Phila¬

the

becoming

Vice-President

Research

1

the

of

as

business, Dec. 20, and
on Dec. 22, the
County Bank will
begin operating as the Towson
office of the Fidelity Trust Com¬
pany. The "Sun" also said in part

tional Jan. 1, 1945, as an Assistant

it

Dec.

effective

the

City branch, effective
Dec. 1. The Kansas City "Times"

of

of the bank's correspondent bank

*'
^
He was also organizer and FirstPresident of the Buffalo Municipal
years.

was

The

*

Kansas

merger, according
to the Baltimore "Sun" of Dec. 3.

both

*

Alexander, Assistant

of

in

Oklahoma

Dec. 2.

on

of

Vice-

National

said: "Mr. Evans who is in

in

•

Announcement

by

appointed

Vice-

a

First

Co. of Providence, R. I. at a recent

he

Forest W.

institutions

Joseph J.

named

with

which

approved

Milford,

was

Vice-President

which
*

V

this

December, 1944. He was a former
of the realty firm of
Gurney, Overturf & Becker Inc.,

the

York "Herald Tribune."
„

also quote:

of

$12.50. Information to this effect,

Cashier

Baltimore,

delphia "Evening Bulletin" in re¬
porting this in its Dec. 5 issue,

on

President

stock of the par value ot

common

has

President

President for 12 years, becom¬

ing

$225,000,
consisting of 20,000 shares of pre¬
ferred stock of the par value of
each

Y., died

1912 First Vice-President

increased its capital trom

$2.50

was

named

*

Long

N.

Mr. Gurney, who was 82

Buffalo

as

Neck,

Gurney, Chairman of

Buffalo,

we

"He

The Great Neck Trust Company
Great

of

had been asociated
with the bank for 40 years, said
the Buffalo "Evening News," from

pointment as Advertising Man¬
ager is in recognition of her work.

of

Chamber

of age,

years

year

* \

of

Nov. 30.

she has been
actively engaged in handling the
Bank's advertising, and her ap¬
past

more

He is Assistant

the

Bank
of
Baltimore County at Towson, Md
with the Fidelity Trust Company,

the Board of The Buffalo Savings

joined the Bank in 1929 - having
formerly been with the National
the

of

Charles L.

of The Bank for Savings in
City of New York, at 280
Fourth
Avenue.
Miss
Flaherty

For

messenger

a

that

is announced

William N.

has

ager

oi

as

Commerce.

tne

Bank

career

Treasurer

appomted Advertising Man¬

been

an¬

reports

5,

*

Flaherty

M.

Anna

Miss

ol

on

than 30 years ago.

Street Office.
*

:

ing

Ruben-

Assistant Secretary

stein,

Harriman

G.

Dec.

the
Buffalo
"Evening News" which
states that Mr. Sweeney, who now
is in charge of the installmentloan department, began his bank¬
nounced

Foreign Department. Harry
Carey was appointed Assistant
Randall

Lewis

dent

F.

ager,

and

Trust

Traders

&

Company of Buffalo, N. Y. Presi¬

Martin J. Suydam was ap¬
pointed Assistant Treasurer and
Jack
R. Stunzi, Assistant
Man¬
G.

Sweeney has been ap¬
Vice-President of the

a

holdings

controlling

a

stated

Evans

Bank

.

Manufacturers

Ryan.

Treasurer

J.

pointed

Setterstrom,

David

Schmidt £ and

Emil

stock.

new

stock

a

Dec. 9 appointed as

Case, Paul J. Hanna, George H.
Haslam, LeMoine K. Buckalew,
Alfred
L.
Manierre, Donald R.

Spaidal,

dividend
the sale of $25,000

through

of $50,000 and

other

*

the

was

announced

were

President of the Reserve Bank, in
charge of the Baltimore branch."

The

known

made

was

changes
by W. R.

here

*

of

banks will have total resources of

said, beyond the exchange of two
of

*

merger

,

"The

and

:

change in the

no

personnel

;

York

further

^-A A

"There will be

next Jan. 1.

as¬

County Bank will become
an
advisory committee for the
Towson territory. ♦ The combined

announced on Dec. 3,
learned from the Newark

"Evening

which

has. tyeen

New

#

The

Va., was elected as a
director, to succeed him¬
self for a three-year term
starting

Mercantile
was

W.

Class A

investment houses.

of

bank,

acquired at $47.50« a share, com¬
paring with a book value of about
$35 a share.
•
„.f:

Bankers

fected

Baltimore

saic

It

The Executive Committee of the

with

ton,

17

est."

CAPITALIZATIONS

Board ot Trustees oi Central Han¬

sociated

consolidated, Henry C.
Whitehead, President of the Pas¬

It

and

Previously he

serve as

represented

EW BRANCHES

CEVISED

since 1940.

will

ONSOLIDATION8

OFFICERS, ETC.

the

has

son

<EW

Grove

on

Balti¬

28,

Mr,

Bank

it

Nov.

with

the

They had held approximately 47 %
of the stock, according to the an¬
nouncement, and with the Pater¬

News About Banks

that

purchases

C. Elias and Dr. Anton Randazzo.

1

notes

of

connected

and control of the two institutions

been

announced

was

according to the

"Sun"

close

:

-

,

Control of the People's Bank &
Trust

members

transit system.

of

the

major change

a

transit systems, public bodies and
financial institutions inteiested in

problems

of

27,

more

ment

Bank,

or

the

Jersey, New York
Pennsylvania. The appoint¬

People's

plans

Nov.

as

in the
in

(2381)

Baltimore, Md.

the

rehabilitation

or

involving the
movement of people in cities and
on
public highways.
A typical
case
is Mr. Roberts' retainer by
the City of Seattle to make an an¬
nual survey and a series of recom¬
mendations on the operation and
finances of its municipally-owned

engineer on transportation
problems tor the Roberts Organ¬
ization will be Yvilliam H.

and

supervisor

officers?

modernization

in

liquidation

independent A bus - lines > ;in
Northern New Jersey. ',/;■ ';>V
The new organization will serve

having

As

who

Steinway

Maintenanc^ & Service

transit

as

consulting engineer, with the New
York Transit Commission

merger

numer¬

Jersey
:

and

ous

of the

New

of

So.,
a concern
specializing
in
taintaining
bus fleets
of

charge

Utilities * Commission

Lines

Corporation, he formed
continues
to
operate

still

Transit

Highway Passen¬
of the Office of

a

Transit

and

From

Director

was

transit, intercity bus and taxicab
industries.;; Previous connections
have

number of years as

of

Defense Transportation, in
of the wartime regulation

Public

After

companies i n
the
Borough

city.

;•

Aheain

Mr.

war

the

division

Eric

1942

executive

the

Transportation.
Holmgren, Jr., who will be
in charge of maintenance and au¬
tomotive engineering for the Rob¬
erts Organization, has been in this
field
since
graduation
from
Brooklyn Polytechnic Institute in

From
to

was

1942

Canada.

and

headed the Transit Section of the

Rob-

&

1923

Roberts

States

engineering as
a
partner in

M r.Roberts

A.

United

Fisk
erts.

Edward

1942, making transit sur¬
in most of the large cities in

veys

and

eration

similar capacity from

a

in the

years

examination

CHRONICLE

District. He also acted

assistant to

Organization, Transit Engineers and Consultants, with offices at 369

>;■'

of

Second

organization

FINANCIAL

Corp. for the last 13

Edward A. Roberts Forms Own Firm
New

&

election
as

a

Mercantile

*

of

'■ *

Manasses

,.

J.

Vice-President of the
Trust

Company

of

F. S. Smithers & Co.

E. M. Newton &

Company

Strader, Taylor & Co., Inc.

Reinhoidt & Gardner

Wagenseller & Durst, Inc.

18

A

disappointing aspect of the railroad picture has been the
distributions to keep pace with the flood of yearend extras and increased regular rates that have been coming through
in the industrial field.
Improved debt structures, strong finances,
and the continued high level of "i
initial stages of the post-depression
earnings are held in many quar¬
ters to justify more liberal divi¬ earnings recovery the management
dend
policies on the part of a preferred to exert its main ener¬
large number of roads. Yet there gies towards financial rehabilitahas been little inclination on the tion and improvements to prop¬
part of management to allow the erty and equipment. Nevertheless,
considerable
debt
progress
has
owners of the property to partici¬
been made in recent years. Fixed
pate to any greater extent in the
present boom.
This attitude is charges are now down to an indi¬
One

failure of dividend

-

particularly disappointing in view
of the long dividend drought of
the depression decade.

exceptions to

One of the major
this

general policy was the Union
in declaring a year-end

Pacific

the

At

it<\

time

same

the

that

was

an¬

directors

had

approval

to

subject

voted,

by

split
both the common and preferred
stocks two-for-one next year.
It
was
expected at the very least
stockholders and the ICC, to

that directors of Atchison, Topeka

Santa

&

its

reduced

has

suit.

follow

would

Fe

Fe

Santa

non-

equipment by about a third in the
past few years, eliminating all but
two issues of long term non-call¬
able 4s.
It has a net working
capital of close to $133 millions
ancLits earnings this year should
at least reach $16.00 a share. Still
the dividend was kept to $6.00 a
share with

year-end extra.

no

that

Another' road

considered

liberal

more

was

a

compared with a little over $15,000,000 in 1940.
Moreover, the
collateral trust issue Wzs, 1975)
that

old

the

6s

help eliminate
provided with a

to

sold

was

was

particularly liberal sinking fund,
bringing the year's
assuring consistent future paring
share.

extra of $4.00,

distribution up to $10.00 a
nounced

level of around $10,500,000,

cated

been

had

likely candidate for
dividend treatment
Pacific.

Northern

Since

re¬

sumption of dividends with a dec¬
laration of $1.00 a share late in

payable in 1943, the com¬
has followed a policy of
paying only one dividend a year
and
the rate has been kept at
1942,

of

structure.

the debt

Last year,

credit such

without

A share

tion

made

was

it is indicated that this
will be increased at least to $5.00
a

Moreover, industrial ex¬

share.

pansion in the western end of the
service area, and the opening up
of vast

farming areas through
irrigation projects, have devel¬
oped, and should continue to de¬
velop,
important
new
traffic
sources.
This augurs well for fu¬
ture satisfactory earnings levels.
new

J. I.

Snyder HeadsHi

Pressed Steel Board
John

I.

Snyder,

Board

of

Jr.

short time

a

Directors

zation of defense

which

were

a

dividend

their

at

last

generally

analysts

as

basic¬

is felt in

some

quarters

prospects

appear to
be
well in the early
months of 1948, it is entirely pos¬

sible

up

that

institute

the

management

may

policy of interim divi¬
dends next
year.
Finances are
certainly adequate to justify such
a
step (net working capital is
equal to more than four years'
fixed charges) and the company
has no maturity problems to pre¬
pare

for.

a

V

"

Northern Pacific

was

rather slow

to

get an aggressive debt retire¬
ment program under way. In the

Guaranteed Stocks

It

.

an-

that

that

Col,

Robert
C.
Downie, Presof

dent

Peo¬

ples First Na¬
tional Bank &

Com-

Trust

was
a

di¬

of

the

company.

Col.

elected

ally among the most attractive in
the lower priced rail group. More¬

shaping

s

was

pany,

still consider the shares

over, it
that
if

e

c

nouced

;■

rate

rail

meeting,

n

also

projects in 1945,

failure of the directors to increase
the

rail¬

equip¬
ment and
horn e, appli-

ago.

many holders of the
disappointed over the

Although
stock

.

of

turer

addition to normal

in

was

depreciation.,

Pressed

way

amorti-*

accelerated

of

4

the

Inc., a 1p<H,.«
ing manufac¬

.

for

of

Steel Car Company,

payment total postdepression distributions will come
to $6.00 a share out of six years'
earnings
(1947
earnings
estK
mated) of around $36.00 a share.
Cash earnings have actually been
considerably higher than that as
the reported results were after de¬
ductions

Dec.

on

Chairman

elected

was

this

With

In the cur¬

its stock.

on

rent year

A similar declara¬

share.

a

earn¬

ings of so many carriers, Northern
Pacific reported earnings of $3.28

pany

$1.00

net tax

any

bolstered the

as

I.

John

Jr.

Snyder,

rector

Special Securities

Downie,
Chief

during

the

;

A director of the company

assume

1947,

his

•

new

Mr.

the

for

Pittsburgh .district.
January,

was

war,

Officer

Ordnance

•

Snyder

■

since
will

duties immediate¬

ly, with headquarters , in Pitts¬
burgh, Pa. To accept the chair¬
manship of Pressed
Steel Car
Company, Inc., Mr. Snyder has re¬
signed as manager of the buying
department of Kuhn, Loeb & Co.,
investment
bankers,!;; New York
City. He is a director of the law¬
yers Title Corp., New York City,
and of Cory Corporation, and a

did not

make

tion

by comparing
wealth

in

false

a

able

;

1

cutive Committe of Knickerbocker

Hospital, New York City.
Mr.~» Snyder
was
this country and in

educated in
England and
began his business career with
Kuhn, Loeb & Co. in 1936. He is a
member of The Wall Street Club,
Wykagyl Country Club and Phi

Telephone BOwling Green 9-6400
Teletype NY 1-1063




scheme

task

which

sentiments

to

this

only be accomplished by
by America alone.

America—and

carry.

also

can

acceptable)

Germans

The

have

certain

a

Che United States and for Ger¬ feeling and respecf for "prestige."

many?

The

of the other Euro¬
countries, except perhaps
Russia, is in German eyes not

v.,,/;-V.v;;

-

Stgtes it means
that instead of getting a money
claim on several European coun-

prestige

pean

United

the

To

is

zone

.

Russia; this of course

has to be deducted from the trans¬

cluded

aid

for

to

Ger¬

Western

A still more

important objection

ports

at

claim

,

effort.

war

mous

im¬
interest of

in

the

.business

is

the

of

and

American economy as a

reparations for its enor¬

on

not

are

American

the U. S. A. itself and consider its

likely that

certain periods these

during

be raised when we look

may

and it is very

markets

'

many.

whole,

On the other hand, the danger
not fictitious that in the long

achievements of
and organizing
capacity.
They know the high
American level of prosperity; they
envy it, they love it, to become
the

know

they

American

American

science

or

at least similar to the

Americans is at the pitch of their

If America takes the lead,
definitely and forever lasting—
the amount of reparations claimed
they will follow, accustomed as
of the U. S. A. in Western Europe.1
by each of the allied nations.
they are to good discipline.
Gratitude," especially gratitude of
And a prosperous and progress¬
Must Avoid Astronomical Claims collectivities, does not last very
long. /:When once the benefits of ing Germany would be the best
If one includes every dollar lost
the American imports are forgot¬ impetus for all the western coun¬
by enemy action and every dollar
ten, the exigencies of the Ameri¬ tries; this Germany permanently
spent by the nation's own actions
coached
by American influence
can loans will remain and it will
it is not difficult to arrive at
be far too easy for all sorts of would be one of the best guaran¬
astronomical figures beyond every
for
world
prosperity and
anti-American elements to mobi- tees
possibility of fulfillment for the lize
~
certain
national
instincts world peace.All

depends

principles

the

on

these money claims. will be¬

run

accepts for the calculation of

one

come

dreams.

nuisance to the popularity

a

.

first

two centuries to come.

one or

therefore

It

seems

to

restrict the claims

against the foreign creditor who
is asking his "pound of flesh."

wise

a

policy
much as

as

"(i A

possible and to accept as a J first
step — and probably as the only
step possible — the amount of
reparation necessary for restoring
the productive power of each na¬

with - the
all these

settlement

direct

countries puts

Western

difficulties aside and a long

term;

engagement of the U. S. A. in Germany does not mean a fundamen¬
tal change in the actual situation.
tion to the prewar level, taking
This U. S. A. is already bearing
into account the growth of the
the main part of the occupation
population. Even then a lot of
costs and is financing by its own
problems arise and it seems ad¬

Springfield Fire Stock
Offered at $38 per

Sh.
By First Boston Group
The

First

Boston

and

Corp.

Kidder, Peabody & Co. headed a
group
of
investment
banking
firms
which publicly offered Dec.
German
imports.
visable to agree as soon as pos¬ the inevitable
sible on one standardized and de¬ Germany for the moment is a los¬ 8, 80,987 shares of $10 par value
tailed scheme of calculation of ing business in constant need of capital stock of Springfield Fire
But and Marine Insurance Co,?.£t $38
this basic rriinimum; every riation new capital from; America.
200,000 shares of the
would have to base its claim for whilst the U. S. ,A. is practically per share.
stock were originally offered to
reparations
on
this
standard the only money-giver, the actual
stockholders on Nov. 18, 1947, at
scheme, submitted of course to management of the German prob¬
lems in the Western zone is con¬ the rate of one share of new stock
checking by one central authority.
for each 2V2 shares of stock held
By doing so, the points of view stantly hampered and obstructed
by divergencies between the three of record on Oct. 6, 1947. At the
more or less already accepted by
close of the subscription period
.
'. '
the International Bank and by the main powers.
on Dec. 5, 1947, 109,400 shares had
Conference on the Marshall Plan
The concentration of all repara¬
been taken by stockholders. The
would be closely approached to tion claims in one single hand,
that of getting reparations from however, should mean that the offering of 80,987 shares repre¬
sents the balance of the 90,600
Germany and probably they can other nations, who have sold their
shares
to
be taken
up
by the
be brought to complete identity. claims to the U. S. A. abstain fair¬

rV It

is

that

clear

calculated

claim

U.

the

A.'s
is

S.

on'this

base

practically negligible because the
U. S. A. production per capita has
already surpassed its prewar level.
But it would be most deplorable
if

this

for

reasons

the

American

ly completely from all mixture in
German affairs so that the .prime
condition for

real efficient

a

man¬

agement of the German bankrupt,

absolute one-head direc¬
fulfilled. And it seems
pretty sure that the objections of

i.e.,
tion,

an

underwriters plus 2,215

shares ob¬

tained

by them through the

ercise

of

11,828

shares previously

rights,

after

ex¬

deducting
sold by

the underwriters.

from

Proceeds

is

public mind would show no inter¬
est in the problem of getting repa¬
rations from Germany altogether

France and the other West Euro¬

and perhaps

man

in an impulse of gen¬
erosity towards the beaten enemy
tend to abstain from every action
in this field. By doing so America
would
actually
give
away
the
rights of others, that is so say of
its

It also

was

announced that the

debtors, and these debtor

own

Western

Europe

would be brought in a

position of

of

countries

U.

the

mines

and

very

a.s.o.

nations

ferent

;

10

would

12

or

not

add

more

causes

factor to the

num¬

that prevent the re¬

habilitation of Germany.

Therefore, it

should

be

under r

potential claim

on

property

given

the

countries

should

to
not

be

exercised by themselves but trans¬
ferred to the U. S. A. in exchange
for

the

Elmendorf in Milford
MILFORD, CONN.—Joseph De-

goods to be imported

Witt

Elmendorf is

engaging in

This would

the

whole

solution

for

ac¬

simplify and clarify

situation.

that

the

is

once

will

be

used

the

financing

by the company to

It

seems

a

certainly accept¬
countries,

Western

securities business from offices at

able

10 Pond Street.

because it wculd free them from

strengthen the ratio of its capital
funds to the volume of premiums
written.

The rapid

growth in pre¬
has

mium volume in recent years

made it advisable to obtain addi¬

built industry

tional capital funds

in

the

is and will remain
American hands. The

strong

company

may

in order that
continue to

Krupp Works in the hands of the

write its share of desirable insur¬

United

ance

States

hem Steel

or

combination

proposition

Steel, the Betheleany other American
is
quite
another

than

restarting

them

under whatever German direction
can

one

And the resell¬

imagine.

ing of former German property by
vate

owners

act

the

which might
shall Plan

,

tendencies

result from the Mar¬

on

the American

econ¬

FIC Banks Place Debs.
successful

A

Point

of

View

This brings us to the last

point
It

view, that of the Germans.

is

obvious

that

labor

unrest and

all kinds of sabotage

in Germany
will continue and increase as long
the

policy of dismantling of
factories, i.e., the annihilation of
means of subsistence for the Ger¬

people

is

continued.

Credit

Intermediate

of

The

offering of ajn

is¬

of debentures for the Federal

sue

Germans'

man

•

admitted %

assets of the
company and its four subsidiaries,
known as the Springfield Group,
amounted to $61,398,599 at Aug.
31, 1947 and net premiums writ¬
ten were $38.572,133., for the 12
months ended Aug. 31, 1947. * ;

omy.'

as

business...

Total

will strongly counter¬

inflationary

dif¬

much; it would only increase
existing confusion and

one

and

mean

the already

German

.

to

countries against a complete
quick rehabilitation of Ger¬
industry will
melt away,
they are assured that this re¬

pean

the American Government to pri¬

other

Western

Mt.

cooperation

hand, it is quite
clear that the pure formal transfer
of ownership of German factories
On

its domestic appliance division is
located and which is readily ac¬

company's

the
make

Ownership Transfer Confusing
*

stood that the

the

not

urgently needed.

office of President of the company
has been moved to Chicago where

to

would

the wholehearted

for
so

which

A.

S.

of

dependency

permanent

cording to the Marshall Plan.

New York 4, N. Y,

not

can

democratic

real

very
large; they are too well
aware that, after all, the position
tries, they gef a long term invest- :
of
all
these victorious nations is
ment in Gehhany which practical- :
ferable
amount.
On
the
other ly cannot be liquidated. Anu this; far from being happy.
But the
hand, it is known " that in the is not a bad bargain. The money; Germans do respect the United
amount of $22.3 billion asked for
claims, even when they are sound,, States, not only because there are
by
the
Paris
Conference
an will mean rather big imports of | 140 million Americans against 60
amount of about $4 billion is in¬ European goods on the American million Germans, but also because

Western

the

from

ment

conceded to

erous

Vernon, 111. plant.

60AKAWTEEP RAILROAD STOCKS-BONDS

this

Is

on

obligations

them

of

most

for

the Marshall Plan. In
the Potsdam Agreement the/de¬
livery
of
a
certain
specified
amount of surplus capital equip¬
report

and

debts

;of

transfer¬

the

Western zone

the

educating, the German people

present uncertainties and humiliations and from a growing burden

'

sugges¬

with the amount asked for in the

trustee and Chairman of the Exe¬

cessible

ffS Broad Street

Thursday, December 11, 1947

.

'

Gamma Delta.

Bonds

;

Prosperous Germany is Essential!
(Continued from page 6)

we

CHRONICLE

& FINANCIAL

COMMERCIAL

THE

(2382)

Banks

was

made Nov. 19

by Charles R. Dunn,
fiscal agent for/ the
banks.
The
financing consisted
of $37,750,000 1.25% consolidated
New

York,

debentures dated Dec. 1, 1947,
due

Sept.

1,

and

1948. The issue was

placed at par. In addition a spe¬
cial offering of $10,000,000 1.25%
consolidated debentures

was

made

ownership of fac¬
tories and mines and the entrance

at par. These
Dec.
1, 1947

of Americans in the top

manage¬

1,

ment does not matter so

much to

with cash funds of $3,185,000 were

German provided he
opportunity to work, to
earn a living and to look to a fu¬
ture of gradually increasing pros¬

$50,935,000 of de¬
1, 1947. As of
Dec. 1, 1947 the total amount of
debentures outstanding was $354,035,000.

transfer of the

the

has

average
an

perity. If there is

a

chance of re¬

1948.

debentures are dated
and mature March

The

proceeds

used; to retire

bentures due

Dec.

together

-WrtHWjrfVtti.Ui

/■

<fiv«wiwHWi^*«,a

9^«tWt<l'¥WM»M? SUM

im»v:mnf^wmmtm**1w; **«**?

Volume

H

«*•"'"*"

Number 4654

166

THE

COMMERCIAL

"*I*"*—«JfmtfMH<¥ *w«»i*,w»*<>*

&

FINANCIAL

Capital Needs of
(Continued from page 2)
allowance is made difficult by the
attitude of tax authorities toward

undistributed profits, by corporate
taxes which take

handsome pro¬

a

decline

in

prices

and

cheap it will not be available in

ages

the

tributors

readily

accomplished

when

corporation

earnings are subject
double taxation, when
steeply

to

progressive

income

taxes

take

a

heavy toll of savings by the indi¬
viduals in middle and high income
tax
brackets, when market activ¬
ity is constricted by high margin

requirements, and when the
market has to absorb

a

stock

steady diet

of

that

vast

money

nigher interest rates
be

can

a

greater

insurance
banks

companies and

have

when

private savings

ing.

declin¬

are

?$#$$$'

(4)

Term

readily

loan

funds

available

from

less

are

insurance

companies and commercial banks.
The former have

been

from

neects

new

mortgages

and

many banks are less, interested in
term loans because their

new

port¬

folios

full

are

visory officials

and

bank

super-

strongly urging

are

that restraint be exercised in mak-i

instead

in

of

business,

risk

in

all

are

prone to
cautious

be

and

in

In

,

.

■

over-all

an

ductive

capacity

/[ factors:
(1)

basic

two

of saving has been

at

time

when

capital
investment continues at a vigorous
pace.
Person liquid savings
in the form of currency, bank deposits and securities are likely this

T year

to

billions

a

be

than

more

no

$6-$8

compared with $15 bil¬
lions last year and $37 billions in
as

1945.
They are
rently than they

[

national income
it is today.

higher curwhen the

no

were

was

40% of what

Undistributed business

profits have risen but they do not
fill

.

the

void

left

when

personal
savings are so low. Depreciation
reserves *are
high in dollars but
probably do not cover replace-

/; ment costs at present prices.

On

the other hand, outlays for hous¬

ing, consumers' durable goods and

plant and equipment and new
municipal projects are at the rate
[ of about $48 billions per annum
,;/[ currently, as compared with $36
new

billions last year, and $18 billions

(2)

The

supply

of

investment

funds-is poorly distributed and far
;

from mobile.
/-taxation

-/
•

Steeply progressive

has reduced the

conventionally

<

propor-

tion of total savings derived from
medium and high incomes which

in

the hands of savings institu¬

into

tions whose investments

ly limited by law.
fort

those

to

close¬

It is small

who

know that there

are

need

are

com¬

funds

to

great aggre¬

gations of savings seeking employ¬
ment

which

but

in

make

a

form

or

on

terms

them in effect inac¬

cessible.

a

ofticials

George H. Kountz With

be¬

with

Field, Richards & Go.

was

chronic

a

CINCINNATI,

than could

save more

H. Kountz has

OHIO

with

is

program

Administration

Our

to

reduce

-'J

y

-

to

Reserve

It

The

toward

way

jectives

could

authorities

serve

they

realization

of

contradictory ob¬

be cleared by an
by the Federal Re¬

announcement

that

they

will

few months consider that

a

are

longer

no

hold interest rates

obligated
bond

or

at

any given level
v/ill use their

and

to

yields

that they

for the sole

powers

purpose of proper management of

^e. supply of money instead of
jnamtaining a low price for credit,

must find

to

continue

standard

of

placement if

we

to

the

improve

living of

ture

people

our

strong.

Another

provide

inducement

an

to

for

indi¬

increase their savings

This is far from easy, for our
gov¬
ernment seems to have
virtually

limitless demands for funds, anc
the concept of taxation
according
to

ability to

to such

has been carried

pay

ludicrously steep grada¬

a

tion

in

have

severely constricted the abil¬

ity

the

to

surtax

rates

Recently

save.

that

we

number

a

wouid

clear that

we

are

not

likely to be

able to provide the funds needed
for industry unless surtax rates

reduced

are

to

a

maximum

of

50%, unless the tax on capita
gains is reduced and unless dou¬
ble

taxation

dends
are

urgently

can

for

necessary,
them with

take

we

divi¬

steps

but

how

the

need

large as it is? Two
changes in our fiscal pro
should make it possible for

gram

to do these

suggestions

things

have

now.

been

These

made

individuals from

by

time

to

time and have been viewed favor

ably

those

by

have

been

need

than has been the

Finance

whom

they

discussed, but they
given wider attention

be

to

with

Foreign

case

heretofore

Relief

o.

be

ap¬

leconstruction

to

struction
which

Investment

would

raise

in

Central
B ui

is

lding,

where he will

terest rates, even

tne

to provide an incentive for. ou'
investors to take the risks which

inevitably

are

guarantee
should

associated

In

case

with

government

to be necessary it

were

be

a

limited to

the political

and

exchange risks. The new or¬
ganization should assume the full
credit

risk, for

could

be

we

tional
would

of

be

other

no

that the

credit

adhered

if

course,

in

sure

tests

to.

And,

of

amounts

of

basic minimum of tne burden

to

governmental

demonstrably
the

But

authoiities

essential

government to the Red Cross. This
would have the special merit of

identifying sacrifices
of

our

ment

on

the

people in the form of
of

duction

contributions
in

should

management

rect

and

prises

obvious

abroad

a

re

material

are

succession

aid

they

called upon to give

of

drives

organized

accelerating rise in yields and} with the customary
efficiency of

European

This is under

no

offer to buy,
•

[

•

He

Belgium
War

in

served

was

Co.

Seufferle
in

during

II

Orlo

France

first

the

Lieutenant

a

King Opens

NORMAL,

ILL.—Orlo

F.

King

is engaging in a securities business
from offices at 509 West Manches¬
ter Road.

circumstances to be construed

or as a

solicitation of

an

as

an

offer to buy,

offering of these securities for sale,

any

or as an

of such securities. These securities

initially offered by the Company to its stockholders by

means

were

of the Prospectus.

NEW ISSUE

December 9, 1947

200,000 Shares

Springfield Fire and Marine
Insurance Company
■

be

of

one

enter¬

investors

to

here

Capital Stock

lenders and borrowers alike have
to

come

the

have less respect than is
with private credits.

case

Private

administration of relief

and reconstruction operations

would

several

have

advantages

Foreign

governments

be

to

able

the

be

sell

would

their

to

us

gifts.

as

able

to

not

citizens

which have been

goods

plied by
not

sup¬

use

funds

our

And they could not use our
to

their

industries.-

finance

socialization
But

the

consideration is that this
of financing

us

to

cut

needs

Price $38 per

greater

of

amounts

Exemption

for

viduals

funds

from

save

value

amounts
limited

which

their

indi¬

of

of
to

life

insurance.

exemption
a

absurd

at

country needs
ings

so

Harriman Ripley & Co.

Goldman .Sachs & Co.
.>•'

•;

F. S. Smithers & Co.

Kidder, Peabody & Co.

.

Incorporated

-

Lazard Freres & Co.

•

White, Weld & Co.

M. A. Schapiro & Co., Inc.

stated

Estabrook & Co.

Coffin & Burr

Hornblower & Weeki

^

Merrill Lynch, Pierce, Fenner & Beane

Lee Higginson Corporation

Tifft Brothers

Cooley & Company

Putnam & Co.

Tucker, Anthony & Co.

Folger, Nolan Incorporated
G. H. Walker & Co.

Mackubin, Legg & Co.
Whiting, Weeks & Stubbs

current

Bacon, Whipple & Co.

Shelby Cullom Davis & Co.

The Milwaukee

Maynard H. Murch & Co.

Company

Pacific Northwest

Company

First Southwest Company
Pacific Company of California

Rauscher, Pierce & Co., Inc.

Chas. W. Scranton & Co.

The

could

be

proportion—

10-25%—of total income.

say

-

Corporation

Incorporated

deposits in commercial and sav¬
ings banks, increased holdings of
securities or increases in redemp¬
tion

Blyth & Co., Inc.

Savings

which would ap¬
to be called for is that sav¬
taxation

share

for investment.

A second step

from

The First Boston

Clark, Dodge & Co.

Tax

:

Copies of the Prospectus may be obtained from any of the several underwriters of the
unsubscribed shares only in Stales in which such underwriters are qualified to act
as dealers in securities and in which such Prospectus may legally be distributed.

re¬

would

high income brackets would have

substantially

:

vita

the middle and in the

funds available

.

of

penditures enough to allow a re¬
duction in the gradation of surtax
schedules to a point where indi¬
viduals in

;;•

Capital Stock, 109,400 shares-were sub¬
through the exercise of Subscription Warrants issued to stockholders
of the Company pursuant to its subscription offer which expired December 5,
1947, including 2,215 shares subscribed for through the exercise of Sub¬
scription Warrants purchased by the Underwriters. The 80,987 unsubscribed
shares, exclusive of 11,828 shares previously sold, are being offered by the
several Underwriters at the price set forth below. - y--.

permit
governmental ex¬

our

/

scribed for

method

foreign relief and

construction

value)

Of the above mentioned shares of

government def¬

funds

par

to

their

icits.

own

($10

They would

meet

is

Kountz.

J.

&

Division.

out

program

recovery

C.

Co.,

Colonel, General Staff Corps, as¬
signed to the Military Intelligence

credit, take the

instead of obligations of one gov¬
ernment
to
another, for which

pay

consumption with the

and

A

and

part

Reserve

partner

a

for

incomes in the form of increased

the

or

If we stop the expansion of

Federal

private and the obligation the di¬

pear

from

World

&

administer, but such
a
would be easy indeed
as
compared to rationing, price
control
and
production control,
which we know to be virtually
impossible to make effective in
peacetime.
But the stakes are

projects

might

shifted

to

investment should be
assumed by the government, Such
a
corporation could make lorns
not only to private business but

ings be stimulated by exempting

be

and

was

Co.,

&

Devine

charged that a system providing
exemption for savings is difficult

high.

with

Van

.

White

A.

&

Kountz

as¬

foreign

First, the burden of raising re
lief funds, obtaining the
supplies
and administering their use abroad
well

J.
H.

and

design
system

J

.

Ingen
Geo.

present
It will bt

(^btained from

investors,
governmental
loans might be necessary, but only

Throiugh

B

*&

was

sociated

at

levels of interest rates.

to joinField,

Richards

Federal

way

conven¬

private
the

attracted

be

bonds.

Prior

though we need
yields high enough to induce in¬
vestment of funds which clearly
cannot

n

munici¬

worthiness

adequate

funds could not be

a

The

i

specialize

Board and the Treasury
deep devotion to low in¬

be

United States by selling its securi¬
ties at rates of yield high enough

such loans.

Reserve

have

Corporation

funds

present taxes.

&

Union

Co.,

credits
are

in

investment

by inter-governmental
loans but by a specially organized
and
privately
financed
Recon¬

The Red Cross and Foreign
Rehabilitation Through Pri¬

vately Financed Credits

to

seem

our

revenues as

basic

us

on
corporate
eliminated. These

is

also

for

European

of

careful studies by competent
experts have made it abundantly

wmcu,

landled not

of

vital

step would in¬
changes in our fiscal pro¬
and in the tax structure to

volve
gram

contributions

should be tax exempt.

propriate

Controls

these apparently

relief they should be
opportunity voluntarily

make

course,

Free Interest Rates From Federal
v.;

be

Field,

Richard's

unfortunately

likely to be received with somehing less than enthusiasm in many
quarters.

George

—

become associated

Co. he

need

we

public debt.

half has witnessed




the

from

future,

range

financial
substantial

assistance

for

save

ing

na¬

could

these

is

pal

apparently

a

which

in

times

do

troublous

some

to any tax relief in the middle or

The fact that the past year and
and

funds,
supplemental

face
indeed.
we

long while

a

not

high income brackets despite the
need
for
more
savings than it
clearly is possible for us to obtain

past furnished most of the venture capital
£; and long-term credit needed by

P-

be invested.

raise

do

we

for

the

.[ business. In addition, savings have
become increasingly channeled

to

for

If

an

various

in 1945, and $15 billions in 1939.

tendency to
This

things,

people

given

beleaguered

We need a balanced
And looking to the long-

viduals

.

ine rate

reduced

by

Cross

event

to

nation

Europe

It is possible, of com.se,
tha^
European lelief needs are
beyond tne ability of tne Keu

long

a

insure prosperity

funds

pro-

less readily
they were

are

than

be explained

may

,

fact

that funds for expansion in
available ;, today

■:f

the

sense,

mature

ply here.

our

ahead.

saving adopted when

lieved tnat the United Nations

in short sup¬

which
are

will go

need to substitute pow¬
on

government

many

of inflation and

for

investment

tne

we

budget.

to

and to make our industrial struc¬

granting credit.
:

incentives

it

as

need,

tions abroad.

are

banks.

selective

more

element

we

erful

capital

savings

we

toward removal of the threat

way

to
Europe.
bitterly opposed

consumer

We need large amounts of

;,

the

today

penalties

consumption of the particu¬
commodities

for

demand

budget, reduce surand provide

ing colossal
Many groups

for

-

creasing

their

through
funds

witn

earn

19

rates drastically

supplied tnrougn con¬
gressional appropriations, but berore we tax our
people to provide

prices

Interest rates would then be per(5) Current funds from banks mitted to r*se to whatever level is
are still
readily available, but with necessary
to attract increasing
the Federal Reserve Board
tight-. amounts of presently idle or of
ening up their reserve position
savln&s into investment in
as
an
anti-inflation measure and
*?ew n\or^aScs and new corwith the rapid rise in prices inpct5
,f an<i municipal securities
which
ing loans.

might be encouraged not
only to give their funds but to
sign pledges that tney will reuuee

tax

policy of grant¬

more

completely to fill their investment

for

rav¬

con¬

ual

of the Federal

with

$10,000

committed to the

within

able

that there

so

incentive

securities

new

bidding/up

savings
portfolios and

full

need

those who have
currency and de¬
posits to use them in investment

the

selling at dis¬
offerings prices, when

We

more.

by the

Furthermore,

war.

needs and which

save

recent

are

form

of

lar

can

funds for aid

issues

remain

the

clothing and other goods

to those leit descitute

people

goods.

counts fiom

in

a

preferred
stocks in the new capital market
is not always feasible when
the
trend of yields is
up, when most

or

may

or

of
risk

a

This is the problem. We need a
reduction in income taxes so tnat

tax

Sale of bonds

periods

cutback in capital ex¬
pansion is not to be forced.
;V

in

(3)

past

But there is

amounts

needed if

offerings due to foreign liquida¬
tion and high domestic inheritance
liabilities.

with

while

as

of

tne

not

compared

low

individual

an

about $150, an

earn

food and

good business.

are»still

$100

taxable " income

portunity to do so, willingly make
great personal sacrifices to give

depreciation allowances.
(2) Sale of new stock to present
stockholders or in the market is

yields

sure,

(2383)

individ¬
$20,000 of income must
approximately $200, an in¬
dividual in
the $50,000 bracket
must earn about $315 and an in¬
dividual in the $100,000 bracket
must earn $575. When the
supply
of savings is as low relative to

stocks

earnings and by the
drop in the purchasing power of

of

save

must

of

preferred

to
net

corporate | the Red Cross should raise sub¬
give stantial amounts of xunds, for our
abundant testimony to the reality people are generous by nature,
and width of the gap between sav¬ they recognize the
urgency of the
ings and the need for funds. To need, and would, if given an op¬
bonds

be

portion

"

Expanding Economy

an

iWh*6^

IHWIWX'I#!*«

CHRONICLE

t /

K■fpmm&i'...

It

a

time

when

the

an

increase in

sav-

desperately that in order

William R. Staats Co.

Stroud &

Company

Watling, Lerchen & Co.

Incorporated

H. F.

Boynton & Co., Inc.

Granbery, Marache & Lord

Percy 0. Dorr & Co., Inc.
Kinsley & Adams

Robert Garrett & Sons

William H. Rybeck & Company

,

-^^hym^itvy^^pysm

*mprvv*' j*Mi

20

THE COMMERCIAL

(2384)

FINANCIAL CHRONICLE

&

Thursday, December 11, 1947

The bibulous gentleman

had been
reading birth arid death statistics.
"Do you know," !he remarked,
turning suddenly to the man
seated oh his right, "that every

Gilbert

Sharpies With
Company

J. A. White &

time I breathe

a man dies?"
CINCINNATI, OHIO — J. *A.
&
Co.,
Union
Central
"Very interesting," replied the White
Cincinnati
stranger.
"Why don't you chew Building,
municipal
'"■'/.V
By IIENRYHUNT
cloves?"
;
dealers, announce that Mr. Gilbert
M.
Sharpies,
Let's Exclude the Ralls/Mr. Dow
Cart Before the Horse
formerly of
As every follower of the Dow Theory knows, the "Dow-Jones"
S
h
According
to
"These
Thing?
apples,
Beeraft & Co.,
averages were started in 1897 using only industrial and rail stocks, Seemed important" published b>
the latter looming almost as large as the industrials in our economy Selected Investments Company ol Inc. is now as¬
of 50 years ago, Early in 1929, the*
Chicago,
"A
French
industrial sociated with
utility average was added in rec¬ investments divided as to type of trade paper says the U. S. work¬ them as Cenognition of the importance of this security as well as to industries. man produces 3 Vz to 5 times a £ t r a 1 Ohio,
fast growing specialized industry.
a
French workman
Rep resenIn a recent letter to sharehold¬ much as
Since 1929, no changes have been ers, President E, E. Crabb said: 'America proves that high wages tative,
with
h
e adquarmade with the exception of occa¬ "The economic outlook indicates bring about tremendous output,
ters
in
Columsional eliminations and substitu¬ an unabated volume of business says the publication. How about
Mr.
tions
of
individual
companies for at least another year or so. 'Tremendous output brings about b u s
Sharpies
is
comprising the three averages.
- •
Employment continues at approxi¬ high wages?' "
widely known
The utility industry is still con¬ mately 60,000,000 and at the high¬

Protpoctstr- upon request from
four investment dealer, or from

&

SECURITIES

NATIONAL

CORPORATION

RESEARCH

130 BROADWAY, NEW YORK 5, N. Y.

Ob

.

.

RUSSELL BERG FUND
INC.

on

MANAGER

INVESTMENT

Russell, Berg

&

75 Federal

Company
".;'/•

Street, Boston

TBLEPHONR

I.IBERTV

can

000,000, equal to but 2%% of es¬
timated total corporate earnings of

UNDERWRITE*

Investment Counsel

-

same

trucks, buses, and airlines—not to
mention the family car. In 1947,
Class I railroads will probably
show net earnings of about $400,-

Request

AND

industry al¬
hardly be

growth

a

though the

said for the rails today, in view of
the increasing competition from

Oapltal Stock
Prospectus

sidered

9550

j
•'

around

with.

We

believe

that

the

five

and

uct is

times

six

the

now

Notes:

at the rate of $226

bil¬

lion per year and the
national requirements

backlog of
for hous¬
ing, for railroad equipment, for
heavy construction of all types,

in the invest-

field,
National Securities & Research m e n t
Corporation recently published a particularly in
"Behind the

folder called

With

National

46c

with W. L. Slayton & Co.,
has Toledo. In 1923 he opened an of¬
fice in New York for this firm.
in 1920,

Selected
declared

American

Shares

year-end dividend ol
share, half of which is de¬

a

its

inclined to

are

Dow

Theory,
may
have

merits

ever

that the economic factors

not

100%

a

certain

chandise

,

A Toast

„

.

costs

And

or

tea to end with—

there?

me

Not at all!

/H/

Investors

sponsored by

'Syndicate; of Minneap¬

olis, has made

league strides
history. Its pres¬
ent assets of $108,000,000, make it
the
largest of the
"balanced"
funds, and the third largest of all
the open-end or management in¬
vestment companies in America.
Shareholders as of Sept. 30, num¬
bered 53,632, while assets were di¬
in its

seven

consumer ;

back

in

the

to

form:

mer¬

normal.

to

George H. Burr & Co., in charge
of their municipal department in

buyers'

strikes, is more than a mere pos¬
sibility. : International
relation¬
ships are having and will continue
to

have

a

direct

seven

year

Bond

Investment Fund

Subsequently he be¬
Stranahan,
Harris & Co., and later was made
Assistant Vice President of R. S.
Dickson & Co., both of New York.
In 1934 he organized the firm of!
Sharpies,
Beeraft & Co., New
York, to deal in municipal bonds.

and

tinue to believe that

a

we

con¬

'balanced'

bonds

of

municipalities and school
of Nov. 18, equal to districts. Recently the firm estab¬
$93.76 a share.
lished representatives in Toledo
486,000

as

firm

in

—

District

fur¬

program

complete.

more

CHICAGO, ILL.
election

a

of the
to make its coverage of Ohio
the

of

therance

Reports

Columbus is

in

Mr.

Placing

Columbus.

and

Sharpies

NASH District No. 8

important

reasons

underwriting

in

active

The annual

No.

8

of the

Fire! Huston Groap

favorable factors, We be¬

For these

Co. have been

J. A. White and

of

assets of $7,- Ohio

Dealers, Inc. has, been. held and
lieve, outweigh the unfavorable the following have been elected
but the latter are not to be ig¬ to terms on the committee.
nored.

associated with

came

National Association of Securities
i J ""The

York.

New

increasing
of

<

bearing upon our lives and busi-

Largest Balanced Fund
Investors Mutual,

of

are

resistance

Buyer

.

temperance dinner,
With water in glasses tall,
a

And coffee

lines

The

America reported net

of

firm

the

joined

he

1927

In

rived from investment income and

are

evi¬

dence exists that requirements for

been in the past, is now a bit ob¬
.

Some

favorable.

business

started in the municipal

Man¬

Investment

Gilbert M. Sharpies

New York. He

Scenes

agement."

prewar

Our gross national prod¬

amount.

solete.

Here's to

Bond Fund

is

half from security profits.
$16 billion this year. On the other
Total
1947 payments amount to 65c, of
hand, the oil industry which is
still
which 42c was derived from in¬
growing will; earn in the
neighborhood of $1,400,000,000 or for automobiles and various other vestment income alone.
merchandise plus international re¬
3 y% times as much as the railroads.
■\ Nation-Wide Securities has de¬
Why not forget about the railroads quirements for farm products and clared a year-end dividend of 20c
as
a
confirmer of the Industrial raw materials, all point to a con¬
a share, a part of which represents
Average—or substitute the oils if tinuance of high business activity. a distribution from security prof¬
three averages are needed to play
"It must be recognized, how¬ its.'

whatever

Manhattan

National in¬
reported at approximately
$200 billion and that likewise is at
the highest level. Money in circu¬
lation as currently
reported is
$28,635,000,000 which is between
est level in history.

come

\ Terms for three years
ning Jan. 16, 1948:

Completes Sale of |

Phillips Pet. Common

begin¬

investment banking group,

The

portfolio is best for the investor

William C. Gibson, W. C. Gib¬ headed by The First Boston Corp.,
policy plus a policy of se¬ son
&
Co.,
Chicago;
Lee
H. which underwrote the offering of
lectivity through analysis and re¬
Ostrander, William Blair & Com¬ 1,007,517 shares of Phillips Petro¬
search will provide, over the long
pany, Chicago; John M. Douglas, leum
Co.
common
stock,
an¬
pull, the most successful invest¬ John
M; Douglas & Company, nounced Dec. 5 that the issue had
versified
as
follows:
program
that
may
be
3.8%
in ment
Omaha; Frank L. Reissner, India¬ been completely sold.
'
cash; 12.6% in bonds; 33.3% in planned for at the present time."
napolis Bond and Shar^ Corpora¬
The offering, which constituted
preferred stocks, and 50.3% an
tion,
Indianapolis.
f
1
one of the largest pieces of equity
;
common
stocks. This investment Well, Blow Me Down
Term to January, 1950—To fill financing in recent years and one
The scene was in the reading
pattern conforms to the manage¬
of the largest ever offered ini¬
vacancy;
ment's present policy of keeping room of a large public
library.
-Michael
D.
Dearth, McCrary, tially to company stockholders,
,

and this

.

^

Dearth

&

Co.

Inc., Des Moines,

Bond Fund

Rowles, Harris, Hall & Company

Custodian

OF BOSTON

(Incorporated), Chicago; James F.
McCloud, Kirkpatrick-Pettis Com¬

Funds

pany,

^Massachusetts Investors Ml

rust

Certificates of Participation in

Omaha;

and

Cecil

Massachusetts

ration, Indianapolis.

Indiana,

the

Iowa,

States

of

Michigan,

Illinois,

Nebra¬

ska and Wisconsin.

Investors Second Fund

IN

are

for

Their Annual
Xmas

Aj/ou ^J'tincl
investment

Prospectus from

funds

may

at

Christmas

the

Hotel

party on
George,

St.

day, with discussion during lunch¬
directed
by Joseph Cross,
Henry Milner, Karl Panckie and
Jack Reno.
.4

(Series S1-S2-S3-S4)
to the shares

22

Brooklyn.,; Luncheon, other- re¬
freshments, etc. from 12 noon to
4:30 p.m. will be the order of the

COMMON STOCKS
relating

Party

annual

Dec.

prospectus

capital expenditures.

new

Toppers Announce

their

A

shares

Toppers, an organization of
municipal bond traders, will hold

BONDS

(Series K.1-K2)

five

each

The

(Series B1-B2-B3-B4)

PREFERRED STOCKS

for

$49 per share, expired
Proceeds of the financing

at

Dec. 3.

Weathers, City Securities Corpo¬

comprises
,

stock

new

held,

W.

District No. 8 of the Association

INVESTMENT FUNDS
investing tlieir capital

to the extent

shares or 97.62% of the
issue. The remaining 24,010 shares
The retiring members of Dis¬
were
taken by the underwriters
trict Committee No. 8 are:
and sold by them.
Paul E. Aim, C. L. Schmidt &
Rights to subscribe, which were
Co.
Inc.,
Chicago; Duncan M. on the basis of one share of the

•

«

eystone

subscribed for

was

of 983,507

Iowa.

eon

of any of these separate

he. obtained from the undersigned.

.

your local

Tlie

investment dealer or

Keystone Company

All

VANCE, SANDERS
111

of Boston
SO

&

COMPANY

Moseley

DEVONSHIRE STREET




from authorized dealers,
6i

YORK

Broadway

CHICAGO
fzo

South LaSalle Street

Co.,
15.

New York

City

.

may be obtained

BOSTON
NEW

&

before Dec.

Prospectus

Congress Street

Boston 9, Massachusetts

planning to attend should
notify Gerald W. Brewster, F. S.

LOS
2io

ANGELES

West Seventh Street

or

SELECTED INVESTMENTS COMPANY
135 South La Salts Street

CHICAGO 3, ILLINOIS

Louts Dreyltng

Jamesb

in

rg

JAMESBURG, N. J.—Louis R.
Dreyling is engaging in a securi¬
ties business from offices
mer

Avenue.

;

:

\

on

Gatz,

ftUFthwgfM Hu <W3J

Volume 166

THE

Number 4654

COMMERCIAL

&

FINANCIAL

CHRONICLE
adjustment of lk

Preferred Stocks for Trust Investment
bility is probably adequate to in¬

(Continued from page 4)

frienu,

me auvocate ox preierred
I peisonaily cannot long

stocks.

delay coming to nis rescue because
1

really

am

his side, altnough

on

with certain very

tions.

I

suic-

able, out at times acmaliy attrac-

;f tive, tor trust investment

Fcurtn, current asset protection
analys.s.. The relationship of net
current
assets
(after
deducting

do three

things in

provided
invest¬

our

,

First,

whicn

we

are

should buy only those
high grade, so that we

} can come as close as possible to
avoiding reliance

look

like

stock

a

out¬

should

treat

tively
oe

unsatisfactory

kind

of a
assets should

current

at least 50% of the lace amount

\

preferred• stock..

effort

gently
at

make

though they

we

spreads

gooo

quality bonds.

I

agree

must

done."

But,

cannot

do

in

an

selection and
the

negative

We

must

investors.
ter

up

from

the

when

my mind,
if
intelligent job

timing, tne

we

to

go

ferred
to

stocks

or,

the whole

do

-

recognize the pre¬
whicn have proved

desirable

be

how

all

investments.

determine

we

which will make

iji able showing in the

Subsection

to

the

the

16

of

a

the

be¬

important

investment, and it

field

presenting The

variety

in £ analytical

At tne end of October,

of the market

York

New

16%

and

to

which

be

effective

I

have

in

on

if I pass railroad issues without a

word,
ment

dismiss

and

preferred

public

with

stocks

that

the

selection

tne

utility
state¬

of

requires -no tech¬
niques different from those used

to look at it.

-

First,

must

industry

have

praisal is to review the record of
other issues in the

% Here

is

the

industry.
give full

same

place

to

weight to the factor of manageM ment in considering an individual
company
against
its
industry
background.
V

-

capitalization

Second,

analysis.

Because book values have

so

little

T, real

meaning, it is preferable to
bonds
(if any), preferred
stocks, and common stocks at mar¬
ket prices.
Currently, the 1947
take

low

price for the common stock
might be used to avoid overstating
the

equity position. While stable
growing industries can carry

or

higher proportion of senior
curities, it is a good rule to

a

careful
and

whenever

funded

preferred stocks together

stitute

over

zation

computed

25%

se¬

be

ings

of total capitali¬

in

this

manner.

It is also important to adjust this

standards, the earn¬
future

coverage,

tors

to

ones

capital

substantially

are

the

considered

be

in

re¬

same

dealing

with the public utility bonds.
I believe that most of the same
standards

which

preferred stocks

5%

or

less of the total, preferred

stock may safely be 25%; whereas

zation,

over

even a

15% of the capitali-

nominal amount of

preferred stock

Third,
ratio

of

interest

may

earnings
net

income

charges

dividends should
excess

of

portant.
earnings
in

been not

in

to

and
be

The

should be 2V2 times or better. Cur¬
rent assets protection is virtually
meaningless in the public utility
field, but protective provisions are
-

-

good

prudence,

gence,"
the

discretion,

as

we- are

us

spread

in

corporate

terest.

rule

we

when

have to

in¬

we

rounding out

are

a

event, regardless of the

absolute

levels

of

prices,

and should consider the

the

on

question of spreads, I shall refer
again to my index of six high
grade non-callable industrial pre¬

to

1926, the typical spread

just

From

narrowing to Vs of 1%.

1933

which

have

in

had

to

preferred

affecting

deductible

pattern

to

1935, the' typical
% of 1%. Then came

Careful appraisals of in¬
stocks must be made to

dividual

the

recent weeks

If the

trends

continue, there

be

reasonably

for

the

of

may

favorable oppor¬
tunities to add high grade pre¬
ferred stocks to trust portfolios

improvement of average
The same view does not
hold as to medium grade issues
because they are too greatly sub¬
yields.

ject to. the influences of business
conditions generally.

in

the
very

Jack Alexander With
Bourbeau &

Douglass

*

(Special

1923-1926

the

important.

very

in¬

•

of

the
acquisition
of
"fair
weather friends" in this period of
great pressure for income.
Third:
Timing of purchases is

true

bond

spreads

of

when

investors.

by

LOS

to

Financial

The

Chronicle)

ANGELES, CALIF.—Jack

investment H. Alexander has become associ¬
Bourbeau

with

ated

&

Douglass,

In that period the

typical spread between high grade
public utility bonds and preferred
stocks was about D/2%, compared
with

V2

1%

of

for

industrials

Currently, the differentials are
substantially the same in both
fields.

However, at present,

ket conditions
issues

of

are

such

mar¬

that

new

public utility preferred

stocks must

be offered at

a

con¬

cession of close to V4 of 1 % in
yield relative to issues which have

already been distributed.

The op¬
timism of the 1928 to 1930 period
a

increases

significantly reducing

exception

lk of 1%.

over

the

to

of

period,

tive to the yields on high grade
long-term bonds. To illustrate this

1923

1940's

characteristics of the public utility
business were not fully recognized

high grade preferred Stocks rela¬

was

my

and

similar to that for the high grade
industrial preferred stocks, with

can

we

yields

in

public utility field has been

peak

in long-term security prices.
In any

included

'

The

them..;.

that

1%

without

coverage

receive

we

of

applicable

because

a

J/4

1930's

taxes

earnings
dividends

funds

tne

largely

appreciate that this question
of absolute prices is a difficult one
as

stocks

opinion, the wider

my

the effect of

I

the

rate

compared to the 1920's is attribut¬

life of the trust is probably
being determined at the time of
purchase.
'
\ : '

vest

those

in

market.

Summary and Conclusions
This discussion has
and

wide,

from

ranged far

corporation

Jack H.
i

fi¬

•

; ■;

•

•

.

Alexander

■

•

.

510 South

rising in

that by

increased
last' few

has

been

both series,

October the spread had
to

1.15%.

weeks

the

Within

the

differential

1.20%, making

a

total

and intelli¬
described in

Fiduciaries

insist that such purchases must be

advantageously timed to make
them appropriate for trust invest¬
Let

ment.

me

nance

is

a

to

"yes, but—" answer.

First:

Preferred

group, or

suitable.
sues

do

San

stocks

Francisco

a

Mr.

Clancy

to

a

have
1923

illustrate

on

exist

which

will

prove

of Salinas.

These securities having

V

an

been sold, this advertisement appears as a matter of record only and is not to be construed as

offering of these securities for sale,

or as a

solicitation of

offer to buy,

an

any

of such securities.
December 5, 1947

NEW ISSUE

1,007,517 Shares

.

Phillips Petroleum Company
Common Stock
.

.

.

the

Of the above mentioned shares of Common Stock, 983,507

shares

were

sub¬

scribed for

through the exercise of Subscription Warrants issued to stockholders
of the Company pursuant to its subscription offer which expired December 3,
1947. The remaining 24,010 shares, to be purchased by the several Under¬
writers pursuant to

the Underwriting Agreement, have been sold by them.

im¬

short swing in the index

in¬

preferred stocks which I

constructed
to

date.

for

the

period

For

May 1944 this
yield of 3.91%.
During the next 14 months prices
index

showed

a

Exchange.

was

portance of this subject by refer¬
ence

Stock

formerly with
the average, are not C. L. Vertin & Co. and its pre¬
However, high grade is¬ decessor, Herman, Hampton & Co.
as

"men of

dustrial




dividend

(No Par Value)

Having assigned to

preferred

is

talking about rela¬
premium industrial

Low

able

Timing

equally im¬
You will find that if
rose rather persistently, until the
per share of preferred
bad business years have yield reached a new low of 3.35%
less than 40% of earnings in July 1946. Last week, the in¬
years, the degree of sta¬ dex again reached 3.91%.
power

high

issues.

re¬

the

:

that

for

important.

of six high grade non-callable

averaging in

have

discussion,

remind you

tively

than

high grade issues in the present

industrial

selecting good public utility
preferred stocks. However, a util;tv company, because of the sta¬
bility of its business, can carry a
larger proportion of senior secu¬
rities.
Utility companies can be
conservatively
capitalized
with
debt and preferred stock outstand¬
ing at 55% to 70% of sound prop¬
erty value. Combined interest and
preferred
dividend
coverage

combined

of 3 to 1, but the stability

earning

stock

be unstable.

analysis.

I

index,

a

also be used

can

in

Act, this formid¬
general standard for the amount able, yet I believe reasonable, task
of debt. For example, if debt is
of selecting the good stocks, I now

if debt is

should like to
been

from

I have discussed

for the selection of good

debt
con¬

you

return

footnote to this

a

rate of return derived
trust portfolio.
Second: Many basically unsatis¬
factory preferred stocks pass for
average

so

appraising public utility bonds.

construction

One

understanding
%■ of industry trends. They must be
favorable or at least satisfactory.
iff A useful double check on this ap-

of

rate

generally
long-term

lor

long-*

preferred stock—all of these fac¬

Act

observed

analysis.

the

held

for

without undue risk
and with beneficial effects
on the

avoid

I

less

care

This is certainly im¬

especially when

that

is

outlook

typically sell to yield

better

you

view

alternates

bonds

quirements, the protective features
in the mortgage bonds and in the

in

The character of the management,
the nature of the territory, the

clear

a

16%

way

reasonably priced
long-term bonds.

to

atisfactory
term

21

Spring Street. He was
security analysis-to in¬
spread was
terest rates. It is now appropri¬ formerly in the trading depart¬
a surprising development; for the
ment of Pledger & Co., Inc. and
ate by way of summary to pull all
immediate prewar years, as these
thereto
was
with Akinof these thoughts together into the prior
stocks ran into real resistance at
Lambert Co.
statement of a point of view on
around the 4% yield level while
the basic question: "Are preferred
bonds continued to rise, the spread
stocks suitable for trust invest¬
With Walston, Hoffman
increased to about 1%%. By July
ment?" Here is my answer, stated
(Special to The Financial Chronicle)
1946, the two indexes had come more
categorically than is ac¬
SAN
FRANCISCO,
CALIF.—
together sufficiently to leave a
tually justified, but I shall refrain John A.
Clancy has become asso¬
differential of only 95/100ths of from qualifying remarks, disclaim¬
ciated with Walston, Hoffman &
1%, Since that latter date, yields ers. and weasel words in the in¬
Goodwin, 2-35 Montgomery Street,
terest of clarity and brevity.
It
members of the New York and
have been

Penn-

slocks;

swing of
annum with¬

or

whichever

high produced

issues

grade

The

selecting good

industrial preferred

As

Exchange ferred stocks and the -movements
were industrial issues, 23% public
of this index relative to Moody's
utilities, 13% railroads, and the AAA" industrial bonds. It is inter¬
balance miscellaneous and foreign.
esting to review the history of
You will pardon me, l am sure, this
spread Y very briefly. \ From

properly

tests

income

more

preferred

interest rates.

recent

a

now

the

to

as

Stock

emphasizes; the types of business served, the rate
structure, the type of regulation,
exercise of judgment and
care
the relationship of the debt and
under the circumstances
prevail¬
ing. I should like to describe very preferred stock to the sound value
of the property, engineering and
briefly the five principal standards
quite

favorable

relatively short period meant

prices,

length

some

the most

example, 62%

the

ones

the

at

industrial

value of preferred stocks listed

sylvania Fiduciaries Act certainly
do not give a specific answer. The
new

also

ior

But

future?

recent" amendments to

this is
for trust

problems.

similar credit-

a

as

in rather technical terms

greatest

bonds

Selection

•

can

stocks

is

had bet¬

we

to

grade

preierred

field

un¬

way, with common stocks.

We

fully

are

preference

nign

cause

on

experience of

stick

permitted

clear

.electing

refuted.

the

upon

average

to

fund,

and

for

case

be

cannot

Otherwise,

decide

impor¬

more

I have discussed this problem of

with

improve

satisfactory

.

in

of

are

relation

It ap*

Obviously, the spread can widen
further during this period of ad¬
justment, particularly if an un¬

Nevertheless, we can buy
quate voting rignts in the event fewer preferred stocks, just as we
hat dividenus or sinking fund are place, less emphasis on long-term
in arrears.
v^V
bonds at times when we believe
Y Y.-

skeptic
comments, "easier said man

who

se¬

assets, the right to veto the issu¬
ance of prior
securities, and ade¬

perpetuity at peak prices

unattractive

even

cumulative dividends, a good sink¬

real

tie

Some of tne

things to look for

tant

intelli¬

not

ao

provisions

cannot be relied upon

prevent deterioration in the

curity.

pre¬

a

purchases

that

so

funds in
or

time

to

protective

ing

should

we

in

1946.

industrial

that

,

stocks

my

56/100ths of 1% per

of the

accordingly.

Third,

•

from

illustration

to

turities

•

stocks.

signiiicant inherence in this rela¬

picture, net

bOi.d.
we

attempt

today to guess
points for preferred
But
this much is clear

portant,

de-

longwould

separate occasion, anq I

a

not

call

provisions

trends

rate

buying

aole

Second,

:

snail
at

Fiftn, protective provisions anal¬
ysis. It is desirable to nave ravor-

ineffective

the

ferred stock holdings as
perpetual
securities and arrange bond ma-

'

require*

of

a

-

interest

rights, protective clauses, and all
signeu to make

.

preferential

on

pears

To discuss the question of
term

1% since the

of

peak prices of July

illustration: a year or
two in timing
purchases can make
standing preferred stock is impor¬
a big difference in the
tant oniy wnen a stock is deficient
amount of
income
produced and the protec¬
in either tne volume or stability
tion
of earning power.
provided for principal.
My
To maice any

analysis and portfolio supervision. They are ail important.

;

fair degree of market stability.

a

ment
r;

and!

dividends

of

definite reserva¬
firmly convinced that prior securities, it any) to tne

am

preierred stocks are not only

we

continuity

sure

(2385)

The First Boston

Corporation

,

22

(2386)

:

THE

COMMERCIAL

CHRONICLE

FINANCIAL

&

Lloyd Named to Head

Canadian Securities

PHILADELPHIA,

To

of

many

Canadian Administration.

tively

easy

For

this

it should

reason

be

the

world

cui

is

a

aid

was

war-ravaged

Europe. In the ab¬
of such a policy moreover,

sence

much

how

would

worse

Britain

tainly

with

ing spree"

were purchased at con¬
siderably lower levels than those
now
prevailing and many items

other

the

have fared?

assisted

countries

Also how would Can¬

ada

otherwise

have

her

abundant

export

disposed

of

surpluses,

and how else would the Dominion
have

been

domestic

heights

able

stimulate

to

production

<

and

record

to

thereby

the

achieve

a

maximum

employment?
lesser import, but

Of

cism

has

that

criti¬

a

been

accompanied
with the loudest fan-fare, is di¬
rected against the action of the
Canadian

authorities in

restoring

the Canadian dollar to its custom¬

parity.

ary

condemned

This
as

has

step

the

basic

been
of

cause

most of Canada's present difficul¬
ties and no heed is paid to the

that the motivating factor at

fact

the time of revaluation—the pro¬
tection of the Canadian economy

against the inflationary
from

south* of

the

pressures

border —still

holds good.

Also forgotten is the
previous universally lauded suc¬
cess
along similar lines of the
same

the

administration which during

war

gavo

the people of Can¬

their

the

1 9 4 7

Presi¬

dent.

ing

stories

Accord¬

to

min

o

tion

is

a

fusion.

Another

bone

mitted

the

of

-

tanta¬

policy which

so-called

buying-spree"

following

defensive

have

been

U.

S.

the

instituted

re¬

Here per¬

measures

to

Canadian

pent-up

per¬

"Canadian

valuation of the dollar.

haps

is

might

stem

the

demand

for

luxury goods following the

abstinence of the
war-years, espe¬
cially as the increase of 10% in
the

value

placed

of

the Canadian

dollar

corresponding discount
prices. In this connection,
however, consideration must also
be given to the fact that at the

on

a

U. S.

For three places on the Board of

price-level for gold

of $35 per ounce.
V

V

:'.V r ♦

.

During

:, *

■

the

"

"v

#

,

week

BOSTON, MASS. —The annual
meeting of the Boston Investment

■

,

market Club

the

for external bonds suffered

ther

decline in

ilar

wfth

line

sim¬

a

domestic corporates
category the Canadian
usually compared.

are

internals, following the
of

fur¬

a

in

move

with which

move¬

free

funds, first weak¬
sharply but subsequently re¬
a
part - of their losses.

ened

covered

Stocks
with

dull

were

the

golds

and

still

&

dol¬

Itis

now

making
the

evident

that

great

effort

a

domestic

Considerable

showing.

Canada

to

production
success

been

achieved

there

are

now

in

has

the

is

boost

oil.

of

already

west

and

reports of drilling

by Imperial Oil in the promising
area

of

the

Gaspe Peninsula.

Vaitses,(Jr., of Cannell, French

had

Stock

Exchange, will

George N. Cowen to part¬
nership on vJan. i 1.
Lyman G.
Sloomingdale, a member of the
Exchange, will withdraw as a
partner in the firm

on

Dec. 31.

Paul J.

Herold, national whole¬

distributor

of

Thomascolor

Incorporated

securities,
has
opened an office at 141 Broadway,
New York City it is announced.

64 Wall

the

Street, New York 5

WHitehall 3-1874

leading




Cenerazzo,
articles

many

magazines,

known

as

lightened

of

one

labor

who

has

published in
is nationally
the

most

leaders

en¬

in

the

country.

His ability to >appraise
management's side of the labor
picture as well as the union's side
him

makes

respect.

outstanding

His

talk

in

should

most

interesting to the club

bers

where

that
prove

mem¬

the business of

industry. J

engaged

are

in

raising capital for
:

-

To Be Batkin & Co. rjV*
1, 1948, the firm
Batkin, Jacobs & Co., 32
Broadway, New York City, will
be changed to Batkin & Co.
'
of

CHICAGO,

Admit

ILL.—Mitchell,

On th2 other

think of
of

you

pos¬

make

certainly would

you
it would

of

sort

pot want it;

ridiculous.

be

habit

is

a

We

have

is

dominant

for

definite

engineering reasons which I will
try to illustrate in non-technical
language. First of all, it has what
we
call a high modulus of elas¬
ticity: That simply means you
can apply a load to it, a stress to
it, and it will deflect very little.
Compared
with
aluminum,
it
would only stretch, if you had a
bar and tried to

one-third

as

it

use

as

a

lever,

change

their

shape or their
higher modulus
of elasticity than any other com¬
mon
metal. The
only competi¬
tive
metal
that
might be con¬
Steel has

sidered

as

a

structural material is

a

There

Hutchins
some

has

been

time.

"

-

with

the

have

aluminum

been

lot

a

since

the

alum¬

in

recent
because

war,

galvanized iron

was not

but

strikes the

the

sun

roof

and

as

inum

expands
nails

it

into

roofing.
of

roofings applied

years,

what

run

available;

gets

alum¬

hotter,

it

It either takes the*

more.

from the rafters or it
enlarges the nail holes. That keeps
away

being repeated time and time
again until eventually your roof
is loose. A good wind comes along,

on

and

the

fieldi

barn

thing out

there
as

an

is

in the Middle

:

^

:

about

is

structural

no

the

common

thing

common

produce,

in

out

very

:

....

Another

its

a

our way

West.'

that

is

roof

is

That

or

steel

is

ma¬

cheap

as

to

easily reduced from

or so

ores, as irons.
Steel is only
alloy of iron. Common steel
iron, carbon and manganese.

Other metals may be

added, such
molybdenum, nickel, tungsten,;
so on—all
imparting various
properties. That gives you a little

as

and

background/ of what steel is and
of the

some

why it is the

reasons

dominant structural material.
Present

Steel Demand Abnormal

There has been

deal of

good

a

discussion

recently as to the re¬
quirements for steel.. Everybody
is

saying at the present time that
enough steel is forthcoming.
Well, actually we ares producing
not

steel

more

than

peacetime

-in

--

other

any

Our

year.

maximum

steel

can
take an
steel—a piece

you

ordinary
of

piece

of

structural steel—and

apply

load

a

it

to

you

can

equivalent

to

approximately one-half its maxi¬
strength. After you have
removed that load, the steel will

mum

come

back

to

exactly

the

same

size and form that it

was

None

metals

of

the

other

has

property. Take any aluminum
alloy.
If
you
would
apply
a
similar load to it, let us say up
to half its strength, it would take
a

definite

deformation.

in

And

permanent

any

of

struc¬

like a building or a bridge,
can't have the thing sagging

ture
you

86 million

When

down. That is from an engineer¬
ing standpoint an extremely im¬
portant factor in connection with
steel.'
:
•'
\• }•'{"_ Vrv*'

ously the

an
extremely wide range of
ductility and toughness. In other
words, you can have a soft steel,

make

we

as

bodies

out

strength of

of,
say

automobile

which

has
the
around 50 pounds

inch, or you can have
steel, alloyed steel, with a
strength of say 200 pounds or

per

square

per

vary

square

that all

can

have

soft

interior,

ness on

a

so

inch.

over

hard

And

as

to

you

the lot. You

exterior

get

and

a

tough¬

the inside and hardness to

consider

we

We

have

look

a

mands.
a

I

steel

•

re-'

can't take too seri¬

abnormal

present

dition.

better
at

go

the

think

con¬

back

and

historic

that

will

de¬

give

us
clear picture of what is needed.

During the period from 1911 to
1920, which included the first
World

War, but in which the

sumption

of

steel

con¬

relatively
small compared to what it was in
was

the last war, we consumed in that
decade an average of 666 pounds

capita.

per

-v.;-

In the decade from 1921 to 1930,
we
consumed at the rate of 770

pounds per capita.

period in which
ing

That

we were

was

the

expand-:

building
buildings, and so on.

our economy,

new

Then another factor is that steel

has

tons.

we

auirements

before.

that

can

Mr.

of

use

of

you

production prior to the last
or the aluminum alloys,
war was in
1929 when there was
including magnesium, which have,
I say, about one-third of the elas¬ produced about 66 million tons of
ingots. During the war we got up
ticity of steel.
to practically 90 million tons of
A
second factor that is ex¬
ingots. At the present time we are
tremely important is that steel
running somewhere around 85 to
I
mean
that
aluminum

will admit

firm for

the

illustration

difficulties

much.

Now that is very important be¬
cause in our present sructures we
do not want them to deflect or
to

of

terial

place.
Steel

form.

simple

inum

of

bumping our
fenders against the back of some¬
body else's car, and so on. If you
did that with a plastic fender, you
wouldn't have any fender, and it
would be rather expensive td re¬

more

Chauncey K. Hutchins
partnership as of Jan. 1, 1948.

the

temperature,

difficulties.

A

could

one—Henry Ford
spent a lot of money trying to do
so—but ii you had such a body,

Street, members of the New York
and
Chicago Stock Exchanges,

Corporate

hand, if

automobile body made

an

to

CANADIAN

Provincial

homes

plastic—well, it would be

sible

SECURITIES

to

the

articles

beautiful

plastic.

hard

Municipal

change

materials will expand or contract.

kind

Hutchins & Co., 231 South La Salle

Government

you

terials.

such

to

a

Steel will expand only about half
as much as
aluminum when you
raise the temperature, and that

■

Effective Jan.

is

That

and

other

course

they

Mitchell Hutchins

N. Y.

ny-1-1 045

Mr.

Watchworker

r

INCORPORATED

rectow 2-7231

speaker will be
Cenerazzo, President of

American

-

name

company

guest

Walter W.

Union.

York

&

YORK 5.

the

cers,

New

Taylor, deale

NEW

7:

Following the election of offi¬

Co., 54 Pine Street,
Mew York City, members of the
admit

'j '

Copp, submited for re-election
the
present
officers,
namely,
President, Robert G. Gerrish, of
Whiting, Weeks & Stubbs; VicePresident, Andrew G. Weeks, of
Blyth. &
Co.,
Inc.;
Secretary
Robert S. Weeks, Jr., of Coffin &
Burr, Inc.; Treasurer, E. Wallace
Sleeth, of White, Weld & Co.; and
Publicity
Chairman,
Joh n
J.
D'Arcy, of F. L. Putnam & Co.,
,

&

Wednesday, Dec.

1 nominating

Inc.

;

on

committee,
of
Clair
C.. Pontius,
composed
Chairman, of R. L. Day & Com¬
pany ; Ralph Dibble, of Merrill,
Lynch, Pierce, Fenner & Beane;
Alfred Fuller, of Vance, Sanders
& Company; Thomas Johnson, of
Eaton & Howard, Inc., and Paul

the

somewhat better

a

The

S.

in

held

was

10, at the Boston Yacht Club.

irregular

drums but the paper and oil issues
made

Re-Elect Officers

the lowest coef¬

expansion.

engineering
expression,
by that we mean that when

tions and very definite properties,
but they are not structural ma¬

have

Boston Invest. Club

CANADIAN STOCKS

TWO WALL STREET

following

the almost fanatical attachment to

sale

A. E. AMES & CO.

the

been nominated: William K. Bar¬

production, which will as¬ place at the Club's luncheon meet¬
sist to correct the world-shortage ing
on
Dec. 15 at the Union
)f U. S. dollars, is also a more League.
practical approach to the realizajion of the objectives of the Bret:on Woods
currency schemes than

Paul Herold Opens
CORPORATION

urer.

of

many

Perhaps one of the best
illustrations of plastic and the use
to which it has been put is in a
nylon stocking. It is a perfect il¬
V-r'-'' lustration of a good use for a

mestic

.he sacrosant

many

ma¬

alloys

automobiles, and practically
everything you could think of, is important in many applications.
made out of plastics, but I think
You don't
want your structural
that idea has pretty well died out., materials to change, because that
Plastics have very definite func¬
generally produces stresses and

con¬

PROVINCIAL
MUNICIPAL

.

Other nominations announced

gold for the purposes
and
Wallace
M.
subsidy is just another com¬ Brothers
modity, the production of which is McCurdy, Thayer, Baker & Co.
for
terms
expiring in 1950.
important in the national econ¬
The annual election will take
omy.
The stimulation of the do¬

Cowen

GOVERNMENT

Lloyd

i;

clay, Jr. for term expiring in 1948;
of Walter W. Buckley, Buckley

is

Cowen & Co. to Admit

CANADIAN BONDS

Gates

H.

-^

the

ment

contention

Canada

as

con¬

cerned,

The

the government

considerable

As far

the

living in the world.

subsidize

read

dreams of

some

has

steel

ficient

and

mount to elec-

tion.

and

about

Club

tradition
n

that there must be

use

good reason for it.
During the war we heard

W

no

the

as

Another factor that is important

If

compare

and

&

Bros.

o y c e,

There is

of heat-treated steels.

Why

simple

Stein

outside.
materials

it

scratch easily with

versatile

so

weighs them in volume, tonnage

gold-mining indus¬

undoubtedly

externals

comfortable standard of

to

terial

partner

of

from

of combinations.

structural

On this subject there exists Governors

try.

ada the fewest inconveniences and
most

decision

their domestic

can

K. Barclay, Jr.

by
constitute a valuable contribution the committee are: Loring Dam,
to the Canadian economy.
Eastman, Dillon & Co., Vice Presi¬
To add to their present trials dent; John F. Bunn, Jr., Bioren &
Secretary, and William Z.
and tribulations the Canadian au- Co.,
chorities are also called to account Suplee, Suplee, Yeatman, Treas¬
for

you

is that

r,

and

that

steel with any other
materials, it so out¬

B

justification.
It must not be forgotten also that
an
important proportion of the
goods imported during the "buy¬

or

material?

dominant

make

knife, to a material that is next
to the precious stones in hard¬
ness. And you can make all kinds

of steel is that of a
material, and not so

a

can

the

on

wear,

You

a

use

decorative material.

a

sieel

we

William

ceed

greater

much

together.
principal function

the

Now

nating com¬
mittee, to suc¬

as

States

steel than all the rest

of the world

rent Canadian problems is the unsettlement of

cause

United

the

Today
more

club's nomi¬

and finances of

trade

Bond

of the

granted, however, there was lav¬
ish praise of Canada's foresight
and wisdom in strongly support¬
ing the efforts of this country to
the

the

structural

When " such

restore

of

principal

As

whole. $>
—
——
In the light of actual develop- time
Canada
had
an
apparent
ments
the
hindsight critic cer¬ superabundance
of
foreign
ex¬
tainly can confront the Dominion change reserves; the imposition oi
Government with an apparent er¬ import restrictions under such cir¬
ror
of
judgment in extending cumstances would indeed
have
over-generous credits for the pur¬ provoked the current charges oi
pose of foreign relief and rehabil¬
bureaucratic autocracy and cer¬
itation.

world.
makes

President

withstand

dominant

position among the nations of the

Co., has been nominated for the
of

its present

to

country

office

Club of Phila-

compara¬

matter to present convincing arguments in rebuttal.

economy

H.

—

delphia in
1948
by
the

a

with the British and other European situations the root

aggravation of the

PA.

Outlook

(Continued from first page)

m

Gates Lloyd, partner of Drexel &

unbiased observer it is difficult to reconcile, with the
facts,
the criticisms which have been recently leveled at the

an

The Steel Industry

Bond Club of Phila.

By WILLIAM J. McKAY i

Thursday, December 11, 1947

a

lot of

In the decade from 1931 to 1940,

,

we,

of

went

course,

through

great depression, and
consumption
down

to

when

we

1921

to

tween

per

576

capita

pounds.

take

the

1940 and

the

peak

the

our average

dropped
However,

period

average

period

from

out be¬

of

the*

twenties and the fairly good years
the thirties but a lot of bad

in

ones

too—it

comes

out

that

the

total consumption per capita over
that
twenty-year period is 668

pounds,

or

only two pounds

more

Volume 166
than

it

1911
I

in

was

to

Number 4654

the

decade

from

1920.

think

that

consumption

indicates that the

goes

pretty

much

THE

to

long period of time accord¬
ing to the population. There have

been many factors
contributing to
a reduction in the
per capita con¬
sumption, and they have to some
extent counteracted the natural
increase
For

that

might be expected.

instance, in automobile

—automobiles

represent

bodies

large

a

competent

-

geologists
tons of high

1,300,000,000
easily mined

ores,

the

a

over a

total

by

Under

the

mine.

If

normal

a

spend,

year

have

they

any

to

money

require

million tons.

when the

now,

about

Back 20

25

years

when

they used three million tons.

have

not

been

we

are

large

are

don't

bodies

want

to

of

The

quality and the heav¬
So you see, while we

increase, I think there

factors that

tend to decrease
the use, so that it works out over

long period that the

a

tion per capita is
Now

if

Iron
I think
to

ore

Ore

in

last

us

that

by

long

a

way

Range. There
of

name;

iron

the

over

have

to

furnace

around

40

to

terial

In

period.

been

allowance

some

in the

greater

future, I think
that

sume

tion

for

order

be

of

normal

our

will

we

can

as¬

consump¬

somewhere

700

uses

the

on

pounds

per capita,
consumption per¬
haps 1,000 pounds per capita. On

and

our

that

peak

basis

demand

find that

we

will

represent

might
expect
in
normal
peacetime operatioh, when we are
not trying to fill a lot of
pipe
you

s

.

We have

capacity at the

a

ent time of 91

not

all

"

.

million tons.

economic

of it is marginal.

all

capacity;

It is
some

It is practically
The only thing

being used.

that

pres¬

is

keeping us down below
100% capacity is the lack of scrap
and the shortage of labor.
There
to

are

additions being made

existing

our

mate that

our

capacity/ I

esti¬

real economic steel

capacity in this country today is
somewhere

lion tons.

around

little bit

a

82

to

mil¬

85

In other words/
more

that is
than perhaps we
a peak demand,

are

tures

represent

a

under

programs

the present

total,

of

the

construction

at

time, of about $1 bil¬

lion.

those

4. ♦

,

Future Demand for Steel

Now what of the future?

of

that

it

| cle

in

"Harper's

Magazine";

(August, 1947, talks about
/the

Great Retreat."

that, the

His theme

is

bodies—for instance,
been drawing, most of

ore

have

we

of
"Steel,

ore
supply in the Mesabi
Range—are being depleted to such
our!

an

extent that future additions

future
to

be

and

steel

production will have

the

on

ore

or

Atlantic

seaboard,

will be brought in by boat

from

lo

be,

is

ores

loon's
based

■

.• v

/■/;/:/

-v

only trouble about Mr. Barprediction is that it is not
fact

knowledge of the
facts. At the present time, in spite
of the stories you hear, we have
in sight or pretty close to sight—
in fact we are pretty sure of some
of the things but we don't want
always to find our ore—according
on

or




the

j

other

ton

to

have

we

very

know

by
can
or

I don't think it

outside

at

the

cost

necessary

Supply

that

most

will

be

held

up

concentrate

today.

We could make the iron magnetic
so it could be concentrated
by the
methods

:^me

viously

the

as

referred

have

ore

And

to.

pre¬

that

of

We

definitely
we

gas, either the natural gas
manufactured gas.
If fuel oil

/get

little

a

faster

course

re¬

duces

costs; if fuel oil gets too ex¬
pensive we will go back to the

used
pH;0r .to - the
supply that was avail¬
able in the past.
process

we

abundant

Limit

of

Productivity >

connection

of steel

with

the

I would like to

supply
bring out
over¬

of

our

economists, especially those in the
government service (and the chief
expert

to

seems

cultural

be

in

the

Department),

should have

Demand*

think

the

we are

have

balance

with

steel

a

the

ects

under

time

500 years
will
you

or something like that;
beyond that I don't think we

be
worrying about it. But
will see there is no danger of
exhaustion of the ores or ma¬

terials

that

in the

be

can

for

used

Steel

D'ants

we

million

ket

and

the

cost

If

coast,

we

freight

en

of

are

tons

are

In

1800

to

progressing
over

the last

"

a

in

The

geles Stock Exchange, is now do¬
ing business as a-corporation. Of¬
ficers, all of whom were with the
partnership, are Gerald C. Lam¬
bert, President; James A. Reeves*

kins,

between 18

and

ant

Evans With Crummer Co.

per

now

the

Secretary.

19

ST.

ing.

ducted

secure¬

ness

ly confident in predicting that in
1948

will

we

be

to

The

OSAN

gomery

&

Mr.

Evans

his

in

own

St.

previously
investment

outside

Simpson Visiting Coast

Finance

FRANCISCO,

12

on a

on Dec.
business trip to San Fran¬

CALIF.— cisco, Los Angeles • and
Sacra¬
mento, returning to Denver;on
300 Mont¬ Dec. 30. He will be accompanied
by his wife.

now

Company,
Street.
(

Denver, Colo., will leave

Chronicle)

with First

and is under no circumstances to be construed asf an offering, of these Bonds for
offer to buy, or as a solicitation of an offer to buyany of such Bonds;
The offering is made only by the Prospectus. *

$10,000,000

Georgia Power Company
First Mortgage Bonds

of

mmm

New

York; now it is a little
of Chicago. Freight on raw
products today from New
York to Chicago, for instance, is
about $14 a ton, so that if we
got some cheap ore we would

3%% Series due 1977

\

south
steel

have

penalty

a

of

something

that order to get it
of

our

mine.

facturing
scrap.

that

areas

About

material
comes

Then

you

scrap.

to

the

and

had

to

the

manu¬

can

create

20%

or

of

the

start

off

with

be¬

is

now

re¬

That

used

so

mills
over

and

again.

re-

If

of

a

Due December

1, 1977

Price 101.42% and accrued interest

Copies of the Prospectus
whom the

undersigned

be obtained from the undersigned only by persons to
legally offer these Bonds under applicable secumt.es laws.

may

may

be

returned say to
seaboard, you can
figure an expense of say $11 a
ton to get it back from Chicago
again, and then/you have the
freight on that again going west.
So you see there is quite a mar¬
gin to work on to cover the cost
the

1, 1947

in

to the center
in

you

steel

Dated December

Eastern'

concentration

of

these

lower

Blyth & Co., Inc.
December 11, 1947

con¬
busi¬

Paul.

pay

steadily

H.

Manager
Co., Inc. of

Bryan E. Simpson, B. E. Simp¬
son
&
Co., California Building,

With First California
(Special

Resident

now

Crummer

able to have the

supply meet the demand.

-

MINN.—James

is

the

Texas which has opened a branch
in the First National Bank Build¬

capacity to produce

So that I feel

PAUL,

Evans
for

,

150 years,

just

was

Akin-Lambert Corporation

is not,

or as an

and

Exchange.

sheets to something like about 22

steel

our

have

the products out to the

it

//

Barron's

mar¬

ooints of consumption. It happens
that the center of manufacturing
been

sale,

to

Corp.
In addition, he

financial publications and
has been engaged in private ana¬
lytical work for individual mem¬
bers of the

million tons.

the Atlantic

on

would

announcement

contributed

of

Electric

assembling

had

we

mills concentrated

produc¬

our

reorganizers

&

other

year, and proj ¬
being workell on
and will be completed in 1948—
our own project about the middle
of the year I think—which will
ects

we

present time

of

Gas

the

at

point in relation to the

materials.

This
'•

located

are

at about the limit

ores

Mesabi Range.

best

the

has

to
At the present
running at the rate

California

at

original

Vice-President; George C. Jen¬
Vice-President;
Alvin
GL
Low,
Secretary
and
Treasurer;
increase (the and William G.
Maginnis, Assist¬

way

of somewhere

a

are

the

one

Co., 639 South Spring
Street* members of the Los An¬

supply

demand.

supply of sheets.

Oliver H. Ritchie is

We

Charles J. William*

was

Standard

shortest items at the present time
are sheets. There are
many proj¬

fact:

or

of

/

approaching the time when

will

we

enough to last

oh, for 400

the

Lambert

applies to

same

there is in sight from 30
to 40 billion tons of concentrate—
us,

of

LOS ANGELES, CALIF.—Akin-

capacity to produce
120 million tons of ingots per year,
they overlook one very important

material

1937
gov¬

from 1935 to 1940.

maximum

Agri¬

say

He

Supply Will Soon Balance

increase

At
In

a

Exchange.

The biggest year

great many other industries. I feel
com¬

was

N. Y. Produce

steel.

no

ma¬

use

you

the

and

ernor

of

-

steel

operation, and that of

to

is

item

Oil

he

they ever had; so they
really not so badly off al¬
though they cry very bitterly they

I

Fuel

1936

Co.

are

real short¬

no

about

used.

ever

E.

&

Mackay
During

& Co.

maximum

■

is /used,

j

,

There

all.

not

to

they

and I think their steel consumption
this year will probably equal the

lack of fuel oil because

a

after the easily mined

how

represents

mine

to

and

will find it

is five and one-half million units;

iron-bearing material which one fact that is
generally
magnetic, that we think we looked. I think when some

is not

the

30

W.

Burnet

you

from the

present time, is fuel oil.

never

,

melted

;>'.•.//■>'

ore

good for another 75

is

was

panies use, that is rather short at

of

that

the coal

a

that

One

you

exhausted.

are

But

turned

...

of

;

high grade con¬
which, depending on

150 years

Sweden..
The

cents

terial.

what, you assume the consumption

foreign lands, such as Labra¬
dor, /Venezuela,
Chile,
Brazil,
1

25

age

/ Now
that
kind
of
material,
known, in sight, represents 5 to 10
centrates,

we

coal

with

industry is consuming at
you

for

than

na¬

cars

If

Wall

having
formerly been

in a five million unit year, you
[would have about four and one750,000 trucks.

beer*

years

I

about

in

Street
more

3,600,-

passenger

has

York

been

passenger
cars.
But
if that
is
translated into about the average
proportion that you would expect

million

Williams
general

City. Mr. Williams
has.

steel than the

more

the present time,

by

coal; but

increase

would be very significant

tons

coal

will have

Now

more

mining

where

slate.

or

much

so

seriously

the price of steel.

billion

the

and

New

misun¬

trucks

to

partnership
in the New York Stock
Exchange
firm of Edward J.
Duffy & Co.,
Ill
Broadway

and about

cars

The

trucks.

Duffy Pailuar
J.

admitted

take the amount of steel the auto¬

cleaning plants. That would add
something say on the order of 20

take

underground mine or
open pit. But the amount

would

hand

the

them, concen¬
put them to¬

additional cost is not

of

which

by

any

coal

little

a

passenger

quarter

mechanical methods and
separate the slate and other im¬

of

an
an

old

Charles

industry is running at

turally take

(

crush

gether again into lumps that
can use, than it will be to
dig

westward

Pro¬

fessor Martin Barloon, in an arti-

to

more

in

can't

we

the

purities from

but,

ores,

we

are

1,400,000

any

is that

miner selected

all

years

those

ores,

has

C;

ma¬

blast

a

000

mobile

up,

out

trate them and then

any

we

a

to do that.
there has

way

it will cost

course,

government

—

the

few

last

into

not

is

year, and out of that about

has

gone

E4w. J.

the rate of five million units per

and

loaded

other purpose.

any

concentrate

and

agencies

or

or

automobile

metal¬

is

difficulty

Charles Williams Is

derstanding of what goes on. For
instance, at the present time the

because, as the cost of mining
coal, with your increased wages,

methods

We

to have

put

a

silica

silica

Fortun¬

endowed

for

there

that

it.

use

necks crop up.
I think there

than others. But

purposes

only

carry

great deal of investigation
carried on, and we know how to

might expect as
but, of course, you can't gauge
these things too closely.
We are
adding at the present time, in
spite of the claims that we are
holding back, put out by some

adding two and a half million tons
of ingots, three million tons of
iron, and three million tons of
coke capacity, besides additions to
many rolling mills, or additional
rolling mills,
and
additions to
finishing capacity. These expendi¬

The

Mesabi

simply

n't

are

will have to put in cleaning plants,

a

peak
out of
about 801

our

high

with

so as

be

to

know

the

.out

million tons of ingots. That is not
at the present
moment, but what

lines.

fit

We

50%—

above the average over the

longer
On that basis, and making

is

.the

remove

capita,

somewhere

it

mixed

large part of it,

50%—

40

which has to be concentrated.

period of peak production in 1929,
find-that the per capita con¬
sumption (was
978
pounds per
say

the

on

we

shortage in sight for at least as
long as the iron ore will hold
out, or say 500 years anyhow.

But that

ores.

suited

could

we

bottlenecks croping up—if bottle¬

coal.

is

way

would find they could¬
There would be more

consumers

considering - just
the
metalluriicals, we have such tremendous

are large quantities
taconites—that is a

magnetic

magnetic

roughly

lurgical

not the end of the steel business

is

consump¬

we

or

we

or

is

country

more

quantities

30

very

Coal

material

raw

this

some

under

is the ordinary,

fairly constant.
back

for

you

with vast quantities of coal; some
,hat
is better than
others, and

Sight

say

of

with

concerned

have in sight enough

we

technical

look

we

but

them

next

ately

present tax conditions.

years;

an

The

in

and

ore,

find

grade, easily mined

expect

Reserves

30

or

freight would

some

overnight, .we, couldn't
operate.
We are using all the
labor that is available; and I think
if we would have a great deal of
steel, more steel available, the

than

more
course

If in

221

plants

much overbalance any such addi¬
tional expenditure.

be

may

the cost of

see

pretty certain there

result of the reduced
consumption

are

we

explored,

is the better

ier sections.

*2 to $3 a ton, and of

get down to using
large areas which

are

tivity.

(2387)

increase the capacity of our steel

exclusively and
Wotild

ores

probably not increase

two

ago there were many years

or

There

grade

taxation

so,

CHRONICLE

In fact, I estimate that

ores.

body of ore,
have
to
pay

paying taxes for the next 25
it.

FINANCIAL

the usual mixtures of
scrap

a

do

we

&

cost of steel made out of these

lower

it, so we are not so very
anxious to go out and drill a hole
in the ground and find a nice new
mine unless we have need for a

which

railroads

tiie

taxes on

ago, for instance/ We have better
In

grade

grade

way.

present

laws, if you find
you
immediately

years before we

Take railroad rails.

about

and that is not

long

consumption of steel—we are to¬
day using gauges of steel much
lighter than we could use 40 years

quality steel.

COMMERCIAL

Kidder, Peabody & Co.

24

COMMERCIAL

THE

(2388)

FINANCIAL

&

CHRONICLE
These

Long-Term Trends in Industry
A

means

to

dependency, fire insurance
home and possessions,

cover

casualty insurance to cover liabil¬

ities, burglary insurance to cover
possessions. And finally, the bus¬
iness.

Let

marriage
dissolution,
unhappily we must also

marriages, is
likely to operate at a high level;
prosperity is likely for Nevada,
Florida, and other states with easy
divorce
laws.
The lawyers,
as
expect to rise with

usual, get it both

the

AMERICA

HAS

AND

second

to a

of the physio¬

consequences

maid.
The number of children

arriving

in the United States is and has for

time

some

been

unprecedentedly

large, as Chart II shows. This fact

is, of course, related to the large
also is due

number of marriages,
in

some

ferment

and

war

part to the deliberate de¬
children

of

even

during

BABIES:

MORE

VOCIFEROUS

the

during the preced-

II

CHART

GROWING

turn

now

logical processes of a man and a

fees for

ways:

title work of home acquisition and
fees for divorce.

A

me

in

Birth-Rate

High

major trend, which has to do with

of

which

VI!

Present

(Continued from page 6)

MARKET

MILLIONS

rt

A nnroccinn

to

7

3

OF

BABIES

li

H

2

high, I shall leave to those who
have the daring and the wisdom

number of children and

of

both

would

seem

mean

a

boom

and

depression for
This demand

You will be able to identify the

products

judge

markedly

supplies

fourth

numbers,
is

fact

an

more

of

Chart III shows.

as

of

children

rising for

The

■

CHART III

building and

markets

to
re¬

which

is

in¬

parts

of

all

major

cities,

preponderantly

makes outlying areas ever
accessible.

more

have

we

For 20
seen

years

outward

an

population in
cities, and I suspect that what
have

or

of

movement

all
we

thus far is only the
to what may be almost

seen

precursor

v

.

The

more

sanitation have im¬
.

volved.

tation

long time as medicine,

and

of

stimulus

designed for children by mod¬
ern standards and
rapid transpor¬

has been steadily

proved.

and

location

is the

fifth

a

the

built 20 to 50 years ago are very

be expected to survive

a

estate

all

ill

birth

at

And

with

American

surviving, and surviving

are

surgery

that

but

being prominent.

explosion.

an

the business of baby
is going to boom almost
permanently.
V ;
sitting

.

K./, x/.;-,.; V-v Longevity
third

The

major

:

is

trend

living longer. Life expectancy
been increasing steadily and

has

rapidly for

many

of

advances

with

years

medicine,

the

public.

health and nutrition. With present

sensational
devotion

developments, and the
far

of

attention

more

and money to the

end

no

this

to

indeed

it

seems

accelerate.

the

that

likely

more

It is said, for

to

example,

radio-active

of

use

iso¬

most significant

is the

topes

subject, there is
trend in sight—

de¬

velopment since the discovery of
the microscope, and this is but
one
of many- developments now
underway or in prospect. Let us
show you some facts on

jects1

Men at all ages

ing

this sub¬

i

IV, which

have

increas¬

an

of

life, as Chart
three representa¬

expectancy
uses

tive ages for
strates. • Both

illustration, demon¬
the working years
and the years of retirement are
being prolonged. The odds are
than

more

that any man will

even

reach at least 70.

The

only

is

same

more

There is
women

true

the frail and delicate

decline.

tendency to fade

a

No

fiction

more

fictional,

no

more

mythical,

no

fabulous.

that

and

brutes.

fable

ever more

is

that

men

beings,
the tough

are

the life

age,

any

ever

was ever

delicate

and

women

At

was

myth

The truth

the frail

are

women-r—

widely held belief that

a

are

creatures, with
and

of

Chart V shows.

so—as

pectancy of the female is
greater than the

ex¬

some¬

male, and

will remember that I earlier
showed you the same point about
you

"

MORE

HIGH

CHILDREN

SURVIVAL

LIVE

RATES MEAN

TO

MATURITY:

EXPANDING

WOMEN

AMERICAN

DEMANDS

ARE

LIVING

PEOPLELCREATE

{OLDER

MUCH

survival of babies. "

LONGER:

"

The last picture in this

NEW MARKETS

tion, Chart VI, shows
YEARS

—

YEARS

^

results.

The

ple—those
been

PERCENT OF CHILDREN

SURVIVING TO AGE

45

45

-

65

and

the

the

30

30

I

GIRLS

30-

-30

peo¬

rising,

and,

since the rise is greater than that
the population, the proportion

population

half of the line

I

of the

old

of

of

-60

"V

beyond—has

rapidly,

very

\

connec¬

one

number of

comprised of
rising. The first

the aged has been

60-

numbers

the chart shows

on

of

aged

for

recent

decades, and the latter half of the
line projects the total—on con¬
servative
assumptions—to
1980.
By that time the number of
sons

65 and

ble.

Many of

per¬

will about dou¬

over

here today

you

are

in the latter part of that line for

BOYS

period of years in all likeli¬
hood—though the dissipation and
wild life to which security ana¬

some

15

LIFE EXPECTANCY OP WOMEN

-15

-

lysts

1920

1930

1940

YEARS

MORE

OF

ENJOY

THEM

REACH

LONGER

LIVES:

RETIREMENT

1930

1920

1910

AGE

——

1940

1945

YEARS

that it

mean

More

specifically, markets

should

45

45

MORE

THEY

AND

ARE

MORE

STILL

PEOPLE
BUYERS

WILL
LONG

REACH

have a long-term rising
tendency for all the things which
families accumulate, since more

AFTER

AGE

65:

families will remain longer in the
period of accumulation. A second

RETIREMENT

group

MILLIONS

30

MILLIONS

30
OF

PEOPLE

14-

-

14

facing increased
likely to be pensions,

drugs,

including medicines
publications for the

aged, opticals, hearing aids, etc. A
group is services for the

fourth

such

aged,

churches

MEN

15-

items

is

for the aged,

65 AND OVER

and

EXPECTANCY OF

of

demand

annuities and life insurance to pro¬
vide them. A third group is goods
NUM3ER

,

old

as

and

folks

church

An this trend has a
7

kindlier

±

1920




1930

1940

1945

1010

_L

_L

1920

1930

_L
1940

1950

JL

I960

to
1970

1980

marked

;

California,

with

their

climate, have only begun

grow.

green

St.

I.;

very

Florida, the Gulf Coast and

Southern

1910

homes,
supplies

geographical aspect: I should think
that

<' 1

,

hospitals, doctors, and recreation.

15
-

;

time

over

with longer utility.

20

LIFE

will

greater

emphasis and demand
for quality goods.
A longer life
expectancy may mean that when
people buy they will want goods

CHART VI

AGE

this rising life

expectancy mean to business? As
generalization I would conjec¬

a

MANY

,/'

out.

you

a

ture

MEN

keep

Now what does

1946

CHART IV

AMERICAN

supposed to be addicted

are

could
1910

v

that

people of all ages and conditions
are

what

CHART V

And finally, though
of it isn't

how to make money out
Clear to me,

with

is

purchase.

real

children arriving

are

large

services,

is

of the prime motivators in

one

suburbs

only

third

certainly life insur¬
ance, since protection of children

on

very

most

one

A

schools and camps with th,eir nec¬
essary

about 60 to 70 years—
down through a very

in

so

be

to

affected.

people's

young

again

at least to age 18

1946

in

its

who may

1940

to

is

proportion

1930

population.

again in about 40 to 45 years, and

longer,

1920

in the American

large number again over a
period of 20 to 24 years hence,

we

associated

1910

an

this

should

very

them

-L

we

of chil¬

dren

A

Not

I

that

time

number

And

years
is not soon
shall certainly have

in

-

a

involved better than I
to
do
forecasting. ,The demo¬ can. One major group is surely
graphers appear to be dubious— children's supplies of all kinds,
but without depreciation it may including apparel, housefurnishbe noted that when they made ings, bicycles, publications, pianos
some
doleful
projections about and other musical instruments,
population size trends 10 to 15 athletic equipment, and toys. An¬
years ago they did not anticipate other which should have a longthe present development.
In any term stimulated market is foods
event the fact is that we have a for
young
people, and milk I

long period of time.

-

for

large

phenomenon which has appeared should be particularly well sus¬
in recent years in virtually every tained because the children's needs
country all over the world for are the least and the last to be
cut even when the family experi¬
which figures can be had.
Whether the rate will remain ences adversity.
j
: '

and

I

long

have

unusually

children's products.

a

-

mean

shall

it is interesting that this marked
expansion in the birth-rate is a

thousands

-

high survival rates

of

very

long-term trend of large demand

they are still arriving in very
large numbers. And if the ordained
course
of
natural
impulses of

BORN

facts

and

babies

flected in the marriage rate.

changed,

2

ia

degree the optimism re¬
And

some

very large

NUMBER

ol

onrl

associated

two

num'erous

very

ing depression, and also is influ¬
enced by the high level of in¬
comes.
It also probably reflects

Thursday, December 11, 1947

In

years

benches

on

Petersburg,

to

the

are.

come

the
of

streets

likely

.

to

Volume 166

Number 4654

stretch for miles where

they

THE

portion of familities in the lowest
income group, and the
expanding

now

only blocks.

cover

proportions which

Redistribution of Income

v-

er

The remarkable shift in the in¬

distribution of

come

tion

of

the

United

the

popula¬

States

fourth

major long-term trend xto
which I should like to call
your
attention.

Chart

distribution

by

VII

shows

incomes

are

groups.
This alteration

in the high¬
•

of

the

1

income

structure has accurred preponder¬
antly as a result of the great rise

the

is

COMMERCIAL & FINANCIAL CHRONICLE

in the total national

income, with
the preponderant proportion going

the

to increase the number of dollars
received in the lower categories.

received

of the

family units of the country, Indeed, in the highest group, which
and developments over the
past is not shown, a decline has oc¬
two decades, using all the
figures curred: it appears that the total
which

are

available.

You

can

see

the very great decline in the
pro¬

income both before and after taxes
in the brackets above

$100,000 is

now

decidedly less than in 1929.
is not, of
course, this decline
which has boosted those at the
lower end of the

It

total amounts

THEY

over

WILL

ARE

ENJO.Y

GETTING

LARGER

LIVING

STANDARDS

not taken into

ac¬

this

picture.
But even
adjustment for this factor

with

there would still be

Whether this condition will per¬
forecasters.
that

But I would

trend

a

toward

greater

and

that

I

capital

accumulation
would

the

of

upshift has
decades in this

many

with

And

observe

the

in¬
of

further

ob¬

technological

ad¬

last

two

or

three

decades which

are only now get¬
business, together with

ting into
$3000-$5000

DISTRIBUTION
FAMILIES
SIZE

OF

the

OF

increased

economic

and

po¬

litical power of the
masses, point
to a continuation.
Reasons exist,

BY

INCOME

therefore, for expectation that to
no
small degree the
upshift is
likely to be enduring.
The

business

meaning of such
an
upshift, I submit to you, is tre¬
mendous.
Broadly speaking, it
provides a great stimulus to mass
production in

But

distribution, to

line, to mass
transporta¬

mass

likely
be relatively
stimulated are
easily identifiable. One is housing
and all related items, for we are
truly an ill housed people, and we

to

'31 4,32

'33

'34

*35^36 »37

'38

'39

'40 'HI

'42

'43

'44 '45 '46

have

im¬
prove our living conditions when¬
ever we can. Another is food, not

CHART VIII

FACTORY

LABOR

POWER

COSTS

AND

ARE

MACHINERY

marked

CONTINUOUSLY
WILL

BE

INCREASING:

SUBSTITUTED

a

tendency

to

so much in the total quantity to be
consumed, but an increase in items
called for by better balanced diets

which the science of nutrition

phasizes.

em¬

One of these is milk. A

1926

=

all

to^

this

financial

masse's, and not
costs, rather than fi¬
selected rela¬

a

tively few big accounts.

major

long-term
trend
which is perhaps most striking of
all

the

is

enormous

reduction

in

price of machinery and mechani¬
cal power relative to the price of
labor.
of

This

the

is the fifth and final

five

trends.

The

cost

of

labor

has risen steadily over a
long period of years, and, during
the past decade has zoomed up¬
ward

spectacularly.

•the
MANUFACTURING

HOURLY

EARNINGS

other

Another

side

is

all

ofr the
fortns

mountain.
of

amuse¬

ments, both spectator and partici¬
Another

pant.

is

education:

we

seeing today the propensity to
get additional learning when pos¬
are

sible.

Still

such

hotels.

another

public

as

is

services,

restaurants

and

'*

Finally, and perhaps of particu¬
lar interest to you, I should think
that the upshift in incomes would
OF

prove a very

ELECTRIC POWER

great stimulus to fi¬

nancial services of all kinds. Only

LARGE COMMERCIAL USE

-

50

a

fraction of the population have

hitherto had commercial banking

millions more
or presently want such
Consumer financing of

accounts, and
will

now

service.

many

all kinds should have
trend.

been

a

long up¬

Life insurance already has

mentioned, and with increas¬

accurate.

more

satisfied

thorough

that

statistical

would not alter the

With

mechanical

labor

RELATIVELY CHEAP
PROVIDE

MORE

AND

ON THE
MORE

is

result
tive

The cost

possible

task

mechanical

labor
will be employed in preference to
human labor in the

factory, the

office,

the

farm and the home.
This trend has been
underway, of
course,

since

ever

revolution

the

200

1926




-

that human

as it has today.
(Let
parenthetically that I do

believe

this

trend

threatens

to state it the other way around,
mechanical labor, relative to hu¬

labor, has become perhaps
cheaper than ever before in his¬
tory.

'■

We have four charts

this point.
cover

they

the

They cannot, of course,
subject. Indeed,

entire

be little

can

trative.

than illus¬

more

Chart VIII shows the cost

long

manufacturing over a
stretch of years, compared

with

the

cost

of

large commercial
hour
to

a

is

electricity to

a

A kilowatt

user.

far

cheaper relative
marihour than at any previous

time.
farm

t

Generally,

now

Chart IX shows the cost of
labor

over

compared

a

become

relative

long period of
with a cream

to

farm

vides

this

situation

enormous

production of
and the tools and gadgets to
it.

Invention

have
ket

had such

never

this

as

and

great mar¬

provides

labor.

situation

are
easy
to
identify.
Outstanding is the production of

in every form: electricity,
coal, atomic, oil, gas, water—and

power

incidentally, the
that

more expensive
makes
other
power

labor

such

sources

shall

as

the

see

atomic

coal, the faster

commercial

use

we

of

Clearly, the de¬
appliances
in home, office, farm and
factory
is likely to experience a long up¬

mand

energy.

for

ward

mechanical

trend.

dentally,
labor

I

that

saving

should

the

guess

inci¬

application

equipment

of

the
for the-home as-compared with house is the least advanced; house¬
hold equipment in the aggregate
the
cost
of. a
sewing machine,
is perhaps as
far along as the
using the sewing machine as illus¬
Chart X shows the cost of

maid

a

trative of household labor savings
devices.

And

Chart

XI, the last
one, shows the cost of office labor
as indicated by a typist
compared
with an average of four types of
office equipment—an adding ma¬

chine,

a

cabinet

typewriter,
and

items used to
cost
be

are

office

compare

safe.

but

of

a

number

course,

prevents

any

and,

measurement

anyway.

Likewise,

as

aged

period of time
statistical

Con¬

Another field subject to

in

personnel

management

application of psychology

most efficiently that
items, human labor.
Mass services likewise probably
will be subject of markedly ex¬
panding demand: laundries, pack¬

items

accurate

1912.

services, including publishing;
great expansion is likely to

so

the change in quality

of equipment over a

about

great upward demand is technical

to

costliest

statistical
of

advances.

and the

only examples; it would

time has not permitted,

in

may be that this field
the
most
spectacular

see

come

The

with labor

desirable to develop

averages

of

an

will

very

letter file

a

automobile

to

sequently, it

use

of

prepared

restaurants,
household

foods

is

work

(Continued

on

Bonds

"

:

;

.

Due November I, 1977

PRICE

Price 102.91% and accrued interest

Prospectus may be obtained in any State in which this announcement is circulated only from
undersigned and such other dealers as may lawfully offer these securities in such State.

the

HALSEY, STUART & CO. Inc

public
as

increasingly^
page 26)
J

Company

riesP3M% Due 1977

and

example,

for

$4,000,000

December xo, 1947

a

of
the
Some
major
specific
lines of business given a powerful
upward long-term trend by this

FARM:

1916

use

technology

condition

RATES

1910

pro¬

stimulus to tfie
mechanical power

an

them.

relating to

of labor in

EQUIPMENT

The

us

future.)

labor, rela¬

First and General Mortgage

SEPARATOR

me

not

of

labor, has be¬
tremendously expensive; or,

Central Maine Power

CREAM

are

impetus
say

100
FARM WAGE

industrial

started, but there

few if any times in the past when
the trend had such an enormous

mechanical

to

come

-

INDEX

very

dear,

very

there surely can be no doubt what
is
going to happen: For

offer to sell or a solicitation of an offer to buy these securities,
offering is made only by the Prospectus.

IS

procedure

cheap, and human labor

not an

MACHINERY

I

more

point.

CHART IX

TECHNOLOGY: MUST

But

much

with great unemployment;
that
machinery and mechanical power has never been its
result, and there
has risen only moderately—and in
is no reason to believe that it will
some cases actually declined. The
occur in the

likely to
separator as illustrative of farm
comprises all forms
equipment, and shows what a very
of
travel,
travel
supplies
and
great bargain farm equipment has
equipment, since another Amer¬
ican characteristic is to go to see

series

every

Price of Machinery Versus Labor
The

the
am

the

be stimulated

100

COST

applies

at exorbitant

years

third group of businesses

INDEX

200

that

stress

me

services for

Certain lines of business

'30

let

man

every

tion.

1929

sav¬

ings should be greatly stimulated.

nancial service for

upshift.

an

sist, I shall leave for the daring

vances

$5000

with higher in¬

for hpme and office labor we have
had to construct our curves from
classified ads in the New York

there will be more wide¬ "Times," and a more extensive de¬
spread savings, all investment in¬ velopment of figures would make

reasoning

in

serve

BETTER

And since,

dollar, which is
count

skills.

INCOMES:

totals.

25

comes,

struments suitable to smaller

vestment

FAMILIES

ing ability of the masses to buy
it is likely to rise to far larger

Another significant factor
in the changed picture is higher
prices, or the depreciation of the

country
MORE

are

small.

prevailed for

CHART VII

scale, for the
relatively very

(2389)

v-

w.i^wfwi.

r

'ur vw *r" w klw^^^fT1w r*^

.J9WV "\1

tSMVv'S

V-JSWC

f

26

COMMERCIAL

THE

(2390)

& FINANCIAL CHRONICLE

Thursday, December 11,1947

Our National

Long-Term Trends in Industry

Security

(Continued from first page)
Fourth, those businesses which
(Continued from page 25)
concentrated in those lines which provide pensions and annuities conference seem to be following the United Nations was the an¬
moved out of the house and sub¬
have the best long-term trends.
the customary pattern.
may find their financial position^
swer to. a peaceful world and that
jected to mass production.
uncomfortable as they have to pay
Of course, national security in¬ the only reason we got into World
Cautions
Finally, and of especial interest
;.-.y.
more as longevity increases. Tnis volves a sound national economy. 'War II was that we did not have
"to some of you, I submit that this
But even if we conclude that we applies equally to self-insurers as That means a reversal of the un¬ the League of Nations.
The insituation means a long-term up¬ are
apt to have an expanding well as insurance companies, and sound fiscal policies we have been effectuality of the United Nations
ward trend in financing, and par¬
economy, there are still items for may be especially marked among following.
Hut I propose to dis¬ .n major disputes can no longer
ticularly instalment finance and very, marked caution for the in¬ the self-insurers who, because it cuss
specifically today the ques¬ be concealed from the American
investment banking, This country vestor.;
They are implicit in the isn't their full time business, may tions involved in military pre¬ people.-', r \
r'":•>
is already very
We were even told by many
Marshall Plan or no
/ five long-term trends here out- be less attentive to the problem. paredness.
ment as the studies of Dr. Sumner }linpH
fe
;
^
lined
And the higher the proportion ot Marshall plan we have got to gird sources that we had to get into
Slichter of Harvard show so con¬
in - the
clientele,
the our loins forthwith.
the last war because our security
First, obsolescence will be very women
clusively, and the condition I have
The little guys are in a heck of depended on Great Britain.
How
high under the conditions indi¬ harsher the problem may be.
here outlined should increase the
Fifth, an expanding economy a fix. But bad as their fix is to¬ ridiculous that statement was in
cated, higher, probably, than at
demand for equipment even fur¬
will use up natural resources fast¬ day, their fix will be infinitely the light of events.
But no won¬
any time in the past. And obsoles¬
ther.
A very large amount of
er, and bring us to exhaustion of worse if America lets her defenses der all those gross deceptions, incence is apt to be especially rapid
financing indeed will be required
down
and
becomes
involved
in
eluding the Atlantic Charter, have
in housing, and in the older parts specific items sooner than calcu¬
to make up the already existing
another world war.
left the American people punchof our
American
cities, all of lations based on prewar rates in¬
shortage and to meet the enlarged
drunk with something of an in¬
which are so ill designed for mod¬ dicate. Businesses directly or in¬
demand for equipment now that
Must Maintain Defenses
directly dependent
on
specific
feriority complex despite our
ern conditions.
it is so relatively cheap.
There is no question that we unparalleled
natural resources should be
military achieve¬
Second, business overhead is
must maintain our defenses to the ments.
watched very closely.
1
Pensions,
A Generally Expanding Economy likely to tend to rise.
utmost
of
our
A quotation from one of Theo¬
ability and re¬
for one thing, seem certain to be¬
General Conclusions
sources.
It would be suicidal to dore Roosevelt's speeches fits our
From the large number of busi¬
come far more general, and much
do
otherwise.
At
the
same
In the beginning I suggested
time, present situation.
nesses which I have suggested are
v
more expensive, with increasing
that
two
general
conclusions the equally important problem
likely to be stimulated over a
"Speak softly and carry a big*
longevity. Labor costs and tech¬
confronts
us
of
what
is
the
best
would
flow from this analysis.
long period by the five factors, nical
stick—you will go far. If a man
services are likely to ex¬
way to maintain our militapr de¬
you may draw the inference that
They are as follows:
continually blusters, if he lacks
pand.
fenses.
the forces are so great as to ex¬
First:
And,
in
saying
military
Long-term
investment
civility, a big stick will not save
Third, competition will be very
defenses,
I;
mean
economic
as
should
search
pand the entire economy. And I
especially for those
him from troubles; and neither
intense.
This is healthy for the
Because the crux of mili¬
think that the inference is true,
concerns
which have alert and well.
will speaking softly avail, if back
This country dees have the promise economy as a whole, but is likely aggressive
tary
strength
is
economic
and
of the softness there does not lie
managements, which
to be hard on some concerns and
of enormous expansion over the
political strength, power.
have and listen to good research industrial strength and
In private life
even industries.
Those industries
It isn't going to do us any there are few things more ob¬
units in both economic and tech¬ unity.
years, though; the- expansion will
which have high labor costs and
nical fields, and which are not good to have a large Army and noxious
presumably be subject to the in¬
than
the man who
is
are able
to find little possibility
terruptions of business cycles. But
sluggish about recognizing depre¬ great Navy, if we are weak eco¬ always loudly boasting; and if the '
forsubstaitution
of
mechanical
even
if we are to have general
France boaster is not prepared to back
ciation and obsolescence. Probably nomically and politically.
expansion, investment results labor may be especially hard hit. those are the only qualities which is a very recent and graphic illus¬ up his words his position becomes
should

be

best

when

funds

are

Vlk

v„v

■sho?'tn®f

t

.

■

.

HOME

MACHINERY

IS

REPLACING

DOMESTIC

THIS SUBSTITUTION WILL BE

%
200

tration

WORKERS!

INTENSIFIED

%
200

,

the

peace,
and

cold

have

150

150

-

100-

100

to

survive

we

hot
to

are

both

as

fession,

to

and

need

a

system.
Therefore, I
that security analysts,

conclude

50

both

of

For if

marriages will be de¬
ferred or prevented, births will
be
deferred
or
prevented, the
trend
toward
greater longevity
will be threatened, incomes will
be reduced by the weight of taxa¬
tion, and technological progress
will be monopolized by Mars. In¬
deed the ability of our monetary
system itself to survive another
war is dubious—assuming that we
monetary

-

absence

wars.

war,

were

50-

of

individuals and
are

as

a

pro¬

profoundly interested

in the establishment and mainten¬
ance

of peaceful conditions in the

world.

The

same

must be true of

universal

A. Kahle & Co. in
1930

1990

Co. is
engaging in a securities
.business from offices at 52 South

IT

SALARIES
PAYS

TO

HAVE

USE

INCREASED

MORE

SHARPLY:

Avenue.

Officers

are

A.

Vice-President and Treasurer.

A.

M.

Turner, formerly with Edw. D.
Dail & Co. of St. Louis, is also

MACHINERY

%

200H

associated with the firm.—

-200
INDEX

1926

=

the

military

100

Joins

Paine, Webber Staff

(Special to

The

Financial

Chronicle)

LOS
ry

150-

-

150

ANGELES, CALIF.—Hen¬
C. Kimbrough has become af¬

we

should also consider other fac¬

tors

reaching
in

Security before
final conclusion.

a

There

ties

the

professional

military

group who are very much opposed
universal military training, as
obsolete and
of

a

wasteful

expendi¬

money.

the

universal

Plan

Marshall

-

will

a

incredibly faster than

move

the last

war.

If

"blitz"—the

the'last

next

war was

be

one

will

no

longer

supersonic.

(2) That
two-ocean

we have
front, but

a

,

third front

a

.*-f

bases in the Arctic
Circle are of prime importance.
Also, continued
and
consistent
expeditions testing our equipment,
material and men under condi¬
(3) That

military

with
emotional
propa¬
The danger in such emo¬

maintaining an effi¬
constantly improving
imperative. Any fu¬
will certainly be an air

(4) That
cient

and

Air Force is

ture

war

tional

were

-

100

50

appeals is that it

led to believe that

causes

we

us

All

were

the

approaching

millenium with
the
British
loan,
the
Bretton
Woods agreement for the Inter¬
national monetary fund, the
United Nations and Yalta.
Right
or wrong, the emotional appeal is
not the right way to settle any
vital long-range problems.
Just

.look

minute

at

new

States—is

closer

that

Moscow

have

you

a

it

air

to

map

by

air

is

to

route to
Sanitago,

Chile.

(5) That
the world
warfare
mean

the

biggest

in

Navy

is not out of step with
the future.
I don't

Dyer in Denver
The

Financial

at

by that simply a lot of mas¬

sive battleships and

deep-sea

piling

of

up

need

We

armament.

.

five times the size of

Army.

failure and had to be revamped

and have its face lifted.

Chronicle)

-

of

of how

We

were

told that if

we

made

(7)

our

prewar

'it

A bigger and more

National

Guard

Reserves.

:

and

efficient

Organized

.-

the

English loan that that would
(8) Proper and efficient intel¬
her for five years and get ligence facilities are of crucial
business
from
offices
at
1835 England on her feet again.
Now, importance.
We are now spend¬
Champa Street.
In the past he it is all gone in a little over a ing a great deal of money on
did business in Denver as head of year and the government of that
Intelligence but there is a very
the Denver Bond & Share Co.
country is back for more money. serious question as to whether it
a

securities

carry

(Special to

The

Financial

Chronicle)

ILL. —William B.
Downes has become affiliated with

CHICAGO,

Francis

South

I.

du

Pont

Salle

La

&

Co.,

200

The

Street

,He

was

was

previously with Graham, Parsons
& Co.

'

V

is being spent properly.

We have
intelligence agencies
squabbling among themselves
build
terically denounced as a dirty to be top dog and to
little isolation'st.
Yet, that bank up their
own
empires.
CIG,
which
was
has not done the job promised'us.
supposed to be a sort
Anybody who objected to the
monetary bank cre¬
ated at Bretton Woods was hys¬
International

1996

look

plenty of floating air bases--car-

with the New Deal
theory in 1933 that America was

Joins F. I. du Pont Staff

1990

war.

beginning

Hogle & Co.

DENVER, COLO.—Frederick W.




to:

and J. A.

Dyer is engaging in

*1997 PRICES

come

(1) That any war of the future

Mr. Kimbrough was pre¬
viously with E. F. Hutton & Co.

(Special to

1930

sions I have

and

training are
being presented to the American

a

100-

1920

adequate military system.
are
some
of the conclu¬

Here

tions existing in that area.

Emotional Propaganda

people
ganda.

and

outstanding authori¬ —the Arctic Circle.

are

to

ture

pretend to pose as a
military expert, but I have made
it a point for some time to study
the question of a well-rounded

National

of

Adequate Military System

don't

the record for a
riers—submarines and lighter es¬
repeatedly wrong
cort and consort vessels.
|
government-inspired mass propa¬
(6) A regular Army four or
ganda has been in recent years,

filiated with Paine, Webber, Jack¬
son
& Curtis, 626 South Spring
Street.

1910

An

I

do is to
and the
to believe that we have the an¬ whole story is right there in front
Kahle, President; Janet M. Kahle,
of you.
Topeka—the approximate
swers to our problems—when the
Secretary; and J. T. Pettus, Jr.,
question is decided—just as we geographic center of the United
Central

CHART XI

OFFICE

Clayton

CLAYTON, MO.—A. Kahle and

1996

had

training as a
prerequisite of national strength
and security.
Now, I do not in¬
tend to say today that compulsory
military
training
may
not
be
necessary—provided
it
is done
through the National Guard. But
I do say that the American people
should not make up their mind
emotionally on this question of
military preparedness, and that

Both

1920

France

favor of compulsory peacetime

in

the investors for whom you work.

1910

that.

ever made successful com¬
absolutely contemptible. So it is
panies, and I conclude that in the greatest standing army in the with the nation. It is both foolish
world,
but
when
the
showdown
and
rapidly changing conditions which
undignified to indulge in
came in 1940, she lasted less than
seem
to lie ahead, they are the
undue
self-glorifications,
a n d,
two moilths!
above all, in loose-tongued
only ones which can do so.
de¬
All the power of government nunciation of other
peoples."
Second: All the five trends dis¬
cussed and illustrated presuppose propaganda is being turned loose

have

CHART X

Administration

of

UNRRA

too

of

many

correlating outfit, is now en¬
in collecting Intelligence

sold to the country as a glit¬

gaged

tering success when it was a fan¬
tastic failure.
We were told that

itself.

Our

Intelligence

is

not

being coordinated or meshed to-

».

Volume 166

THE

Number 4654

gether by one alert chief such as
must have.

we

.

(9)

That most important of all

—we

stay ahead of the procession
physics and strengthen

in unclear

basic

particularly

research,

our

research.

Very little is being said
about
bacteriological and other
scientific
developments
in that
field.
That is just as terrible and
fearful

as

In

atomic weapons.

as

COMMERCIAL

FINANCIAL

&

ing a provision in the Universal
Military Training Bill whereby a
boy may, after six months' train¬
ing in the Army, complete his

ritories

service

period

Russian Soviet has an

Guard.

Of course, if the Guard is

the

in

National

be efficient it has to have vast

to

appropriations
and

for

modern

lieve,
and

that

armories

new

equipment.

with

I be¬
support

proper

she has been seeking

CHRONICLE

for

centuries.

(2) The Czars had

fifth col¬

no

in Great Britain.

umn

Americans

of

who

are

taking their orders directly from
Moscow.
A

backing by the Congress, the

"Fifth

Communist

National

bacteriological warfare.
The
Russians probably have as much

American alternative to Universal

imagine Eugene 'Den¬
nis and W. Z. Foster, who are
Secretary and Chairman of the

Military Conscription by the

American

we

by
in

that field
The

as

Army

ular

have.

we

it

says

wants

sudden attack. But a
disciplined population

trained and

has always proven,
be the destruction

in the end, to

of

any

republic.

Neither

with

impressed

I

am

the argument

that the Army camp
training, no matter how bene¬
ficial, is necessary for a boy be¬
cause of mounting adolescent de¬
linquency.
The

v
for

reason

adolescent

de¬

linquency is lack of parental re¬
sponsibility.
We have too many

baby ..sitters in this country and
not enough parents who stay on
the greatest job of all, and that is
making good homes. - We already
have too many parents who shove
off on the schools and churches

raising their youngster.

the job of

And, I think it is a fallacious ar¬
gument that we must have still a
third agency—the Army—to help
raise our youth., '
I be¬

Don't misunderstand me.

be made

effective

and

and

a

very

reg¬

Army.
shown

contribute

a

in the event

ability to
sizable military force
of war.
There is ho

if properly
people.
ter

is

its

believe it can't do bet¬

to

reason

still

supported by the

too

early to

that
mass armies will not be employed
again, but the important thing is
have

to

say

reservoir

some

trained to

power

of

man¬

extent that

an

a

sudden attack will not bring com¬

I believe that the

plete disaster.
bulk

the .training

of

should

be

done within the framework of the

National Guard.

continue

to

Those who wish

in

on

branches could

do

the

so

in

the

pass

their

volun¬

into

available
in

call

intensive

training

Then they

Guard.

on

reserve

for

.

active

national

would

units and be
duty,

upon

for

emergency,

approximately five years

longer.

That would be about the limit of

really effective preparation of the
individual soldier.

lieve that military

training serves
to inculcate a valuable sense of
personal obligation to the nation.
That is something to be desired
in a political system that has been
too prone to emphasize the "take"
and not the "give" on the part of
its citizens.

question in my mind
is whether national universal mil¬
The main

training

itary

needed

will

the

do

job

Preparedness Most Elemental

conditions of warfare.

As I have

said, I fear that we are not con¬
sidering other phases of military
preparedness of even greater im¬
portance.
We might come nearer
to meeting our problems by seeing

any

will

Nor

have

it

guns,,

bombs

if

home

do

us

good

any

airplanes

ships,

bled

are:

we

to

and

white

at

extravagant, free
spending' national administration.
A sound fiscal policy is the es¬
sence

by

an

of national defense, and one

entered the of the' ways we will stop these
fields of science and research. We soaring prices is to cut our waste¬
should be concentrating our mili¬ ful and extravagant national ex¬
tary ; preparations on air power penditures and apply the savings

that

youths

more

and scientific
-

What'

a

developments.

nation

needs

now

to

strong militarily is
technical resources—scien¬

itself

keep
great

developments—
power—radar—remote control
weapons
and
devices —- atomic
energy—bacteriological familiar¬

tific resources and
air

ly.

;7

of

course

universal military

question in my
mind but that we must take some
is

no

"steps to increase the National Se¬
curity.
But peacetime conscrip¬
tion

is a whale of a change

for us

to adopt without the most careful
consideration.
It is a grave na¬

tional decision.
it has led

security.

,

To many nations

to disaster and not

to

.

The National Guand

has always

live

a

that

of

short

employee
budget

to

for

civilian
ployee to each two soldiers.
plans for

one

army

more or

six
1948
em¬

less un¬

war
going on between
Western civilization
in

general, and the U. S. A. in
Russian

ticular.

agents

are

par¬
ac¬

tively and determinedly attacking
America at home and all over the
world.

So far the battles are be¬

ing waged
cal

on

occurred since Yalta. The
French and Italian labor troubles

cally

are a

part of the Communist storm

A

more

on
or

this harassed world.
less

country

as

time.

long.

on

undeclared

between

Britain

war

and

way

unfair!

I do believe

fact that for

have to face the

we

years we will
the abyss of an¬
other war, and we have to prepare
ourselves accordingly.
The best
way to do it deserves the most
thoughtful and thorough attention
of every American citizen.

be

teetering

of thinking, the most

The

destruction

shifted

the

of

The

of

center

criticism

Theofy, (and

the

of

Dow

which I believe

one

started up, and

ply

of

adding.to the

after

stocks

started down. In my humble opin¬

ion,

helps

action

concerted

any




after
of

series

a

bull

a

Theory. Such
little

a

deal

of

reconfirmations
the

market under
a

more

more

Dow

procedure requires
work, and a great

patience, than a policy
Dow Theory, but

of following the

I

convinced that it is

am

a

more

profitable policy for the individ¬
ual, as well as being a sounder

policy for the country.
ANTHONY
Dec.

GAUBIS

7, 1947

37 Wall Street

Production, Not Controls,
Will Curb Inflation
(Continued fro mpage 13)

from 8.2 to 8.4. The Third

of

western

best be done

can

that

world's

the

forces

That

dollar by

programs on a

cycle, New York 5, N. Y.

the

exaggerate

to

creased

the

sup¬

have

they

rally

all

of the fu¬
their country than of the
chance to make the last possible
of

Mr.

gravity today is the U. S. A.
We must resolutely and wisely
civilization.

Market stu¬

more

Germany

center

of European
gravity eastward. The destruction
of Europe and Japan shifted the
center of the world's gravity west¬
ward.

think

basing their investment
follow-the-crowdbut-try-to-get-there-first
theory,
May shares, but which Mr.
Barbour does not try to answer), should concentrate on trying to
is that it is definitely anti-social. anticipate
cyclical peaks and
According to my own understand¬ troughs. They should encourage
ing of the Theory, (and I have their clients to buy stocks on a
been in a position to
study both the scale, once prices are well below
Theory and the mental processes intrinsic values, and to subse¬
of several of its leading exponents quently sell stocks and help sat¬
during the past 12 years), it usu¬ isfy the abnormal demand for
ally—or I might say almost always equities which Usually develops
important

some

on

economic system.

ture

passed, and of selling stocks after
Can you imagine Henry Wallace
it appears that a cyclical peak has
as
a
Russian making speeches in
been passed.
This means the use
Russia—siding with .America as of investment funds to
help exag¬
against Russia—and living very
gerate the cycle, by adding to the
long?
demand for stocks once they have

•

of

in

which

■

i

the six

South

months period

District,

Jersey is a part,

to

the carrying charges is so

pay

questionable banks are certainly
justified in refusing to lend 100%
of the cost. Many 100% GI mort¬

investing partners by requir¬ is the third highest. It increased
ing government policies that will from 8.1 to 8.3.
•;
gage loans are excellent risks and
increase production.
'
The world is still in somewhat are being granted by many banks.
Above all, the American people
of a turmoil.
The Marshall Plan This is particularly so in some of
as

not

world.
a

get

the

Plan

contribution
and

wards

the
peaceful

towards

can

cohtributes

world

have

The

Marshall

to¬

But

we

stable Marshall

a

President's

recommends

retary

be
restoring

peaceful world.

a

even

Plan.
tee

that

stability in the world.

stable

A

a

Rightly handled, it

order

don't

idea

means

one

a

Commit¬

figure, Sec¬

much

one.

higher

...

The greatest debate since
the
Lincoln-Douglas debate is going
on
today in the American Con¬
gress.
That debate, which will
cover
not
only our position in
the world, but our domestic poli¬

cies

well will bring before the

as

American
the

measures

necessary.

But increas¬

ingly the real world situation will
become

known

to

the

American

We seek
tries

nor

only

a

neither satellite coun¬

reparations.

prosperous

and

We

seek

peaceful

world.
The time is here when we must

and intelligently or¬
ganize our own forces for our own
security. How we do it demands

adequately

the

thorough

every

of European

relief at the moment

to be one of our most press¬

seems

ing problems.

Its necessity seems

consideration

of

patriotic American citizen.

Takes

Exception to
Barbour's Concept of
Dow Theory
(Continued from page 4);;

the rural sections where costs
not

so

are

less

a|e

and building codes
restrictive. The experi¬

high

ence of all bankers with whom;I
by nearly every¬
have discussed GI mortgage loans
to the extent
relief is necessary and methods of has been nearly perfect. I think

to

be

conceded

Opinions

one.

as

yet partici¬
administering it properly seem to
be many. Of one thing we are all pated in the GI mortgage financ¬
certain, the cost will have a direct ing have been missing an oppor¬
bearing " on our tax problems for tunity to supplement their bank's
earnings and have not been meet¬
some years.
'v ■
) ?, <••:'
ing the financing needs of their
communities
as
perhaps
they
t,
x Tax Relief Needed
No banker should help
Tax relief is badly needed—both should.
any GI purchase a home at an
corporate and
individual.
New
capital is constantly needed in a excessively inflated price and be¬
growing country such as ours and yond his ability to pay. Each ap¬
investors are usually those who plication should be analyzed en¬
bankers who have not

*

have been able to

save.

The pres¬

ent rate of taxation doesn't

tirely

permit

saving and our source of
capital is rapidly disappear¬

its merit.

on

New Credit

Controls

much
new

ing.

; -

V

■:

:

During the last few months we
witnessed a very material
change in the yields from invest¬
have

President

Since

Truman's

ad¬

dress before the special session of

Congress it has been quite evident
attempts will be made to impose
new
consumer
credit and other
credit controls. Should the Fed¬

bills
eral
Reserve
Board be granted
disappeared and the new
powers to increase bank reserves
yields are now about .94%. 12- and should such
powers be exer¬
month 7/s% certificates of indebt¬
cised the present earning problems
edness are being replaced with 13of
many
banks will be even
months certificates bearing \lk%
greater ones. Banks not carrying
interest/'
ment securities. % % treasury

people.

!
Mr. Barbour—are you trying to
Russ'a for 300 years.
I don't think
confuse the issues by making a
it will go On that long between
Jeffersonian political speech, or
Russia and the U. S. A.
Things
do you want anyone to take seri¬
move faster today
than they did
ously the identical types of argu¬
in the 17th and 18th centuries.
ments used by the Socialists and
went

dents who

They might —calls for
buying stocks after a
But not very
low point seems
to have been

economic and politi¬

although some minor
skirmishing has sporadi¬

fronts,

combat

Cowles analysis of 255 Dow The¬
as

27

helps to undermine confidence in
our

have

would be

excess reserves

required

The

yields on intermediate and to liquidate earning assets, fur¬
long-term government securities ther decreasing gross and net in¬
and
corporate issues have in¬ come.
Continued liquidation pf
creased substantially. The spread investment
assets
would
drop
between the yields of long-term market values still further.
governments and triple "A" cor¬
The American Bankers Asso¬
porate issues has increased to ciation has
already registered i|ts
about four-tenths of 1%.
To the
objection to any new credit con¬
bank having funds available for
trols. Should new credit controls
investment this change is a wel¬
come
one.
For the bank having be imposed, let us hope they will

heavy

investments

securities

the

desirable.
some

of

The

the

long-term

in

change

is

market

not
drop

so

in

long-term corporate

be

for

no

regulatory body

tarily

a

limited period because

relinquishes

municipal issues has been the given it.
equivalent of several years' in¬

and

terest.

Fortunately
have

not

many

large invest¬
There are two essential differ¬
Communists to defend their own ments in long-term securities, but
ences
that ought to be borne in
the changes that have taken place
favorite theories?
mind between the undeclared war
Mr. Barbour admits that there indicate quite clearly the dangers
going on today on the part of have been several times during of too many long-term securities
Russia with the United States, and
the past year when he thought even though they are of the high¬
the 300 hundred years of more
that the action of the market was est quality.
or
less undeclared war between
bullish, but that he did not rec¬
banks

very

relation in regular
Army circles.
It has never received the credit due it for its
Russia and Great Britain.
GI Mortgage Loans
work in our last two world wars.
ommend
the
purchase
of
any
There has been a great deal of
It has always had to take the leav¬
(1) The background of the trou¬ stocks. Isn't this in line with the
ble
between
Russia
and
Great work of so many letter writers, publicity given by the Veterans
ings in any military preparedness
program.
Yet it is profoundly an Britain started with Britain's seiz¬ who are always able to quote pre¬ Administration about many bank¬
American institution. The regular ure of India—in what Russia con¬ vious letters to the effect that they ers refusing to grant 100% ,GI
Army does a lot of bleating about sidered to be her sphere of in¬ were bullish; if the market sub¬ mortgage loans. In some sections
the National Guard, but has here¬ fluence. Whereas we handed Rus¬ sequently advances, and to point of our state the cost of new homes
tofore done1 little to help build it sia, on a platter made of Amer¬ to the fact that they did not buy being sold to veterans is so high
up.
However, it is now support¬ ican money and blood, vast ter¬ .any stocks at such times, if the and the ability of many veterans
been the poor

1

The

soldiers.

breaking

conscription.
There

civilian

army

declared

community level through the Na¬
tional Guard and Organized Re¬
serves.
At least every possibility
should be exhausted for keeping
it at that local level before we
■;vembark upon the uncertain longrun

employee to four soldiers. At the
peak of this war there was one

Russia,

J believe it is necessary to have
a reservoir of
manpower trained
to an extent to meet sudden at¬
tack.
I favor keeping it at the

liv¬

public, particularly in
campaign of 1948, the issue of
on our national debt.-' /
r;J •- i\ " how America is meeting this un¬
For instance, before World War declared war by Russia. The de¬
Two there was one army civilian bate may not fully develop all the

Today there is

Keeping Manpower at
Community Level

Party

the U. S. A.?

Marshall

event, this issue of na¬
tional preparedness is the most
elemental question confronting us
today.
The next Congress should
decide it one way or the other. In
light of world conditions we can
no
longer let the matter of na¬
tional security drift.

be done under modern

to

are

must

Question
In

Communist

government

they

regular
a

on

tary basis—the remainder, and by
far. the greater number, then to
continue

you

ing in Russia and sabotaging the

heretofore

It

Camp Training Not Beneficial

could

The National Guard has always

a

trained and discipl.ned population
to meet any

sound

Guard

Can

Column"

could have superiority in
the atomic field and be destroyed

fact,

subsequently declines? No

wonder Mr. Barbour considers the

Today the ory' editorials
active, dis¬
To my

loyal and traitorous fifth column
composed

market

(2391)

ever

volun¬

powers

on6e

;

*

With Harry W. Myers
(Special to The Financial

Latham

has

Chronicle) |

C.—Paul O.
become
associated

RALEIGH,

N.

& Co., Odd
Latham was
formerly
with
First Securities
Corp. of Durham and prior thereto
with Harry W. Myers
Fellow Building.
Mr.

with Geo. I. Griffin.

With Sweeney

J

Cartwright

(Special to The Financial

Chronicle) ;

COLUMBUS, OHIO—Howard A J%->
Zollinger has joined the staff of
Sweney, Cartwright & Co., HurrtBuilding.
\

ineton Bank

28

(2392)

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

Savings Bonds Not a Detriment to
Savings Institutions

:

(Continued from first page)
gations which were held by com¬
hand, and the mere mechanics of mercial banks has certainly been
its operation, on the other. When anti-inflationary in effect; it has
these objectives, and the over-all kept
inflation
from
being far
picture, are clearly seen, it be¬ worse than it is. The only crit¬
comes crystal-clear why it is
icism
that
could
be
to
logically lev¬
the advantage, not to the detri¬ elled against the savings bond's
ment of the savings banks to co¬ part in this is that it could have
operate.
It also indicates why been greater if more people had
these institutions have entered the made
more
effort
to
help the
program
wholeheartedly, - rather Treasury sell more savings bonds.
than under any feeling of comThe savings bond program has

,■

Y

pulsion or coercion.
'
*
Forexample, a savings bank in
one
of our largest cities up to
Sept. 30 of this year had issued
487,517 Savings Bonds since 1941,
for purchase; prices aggregating
$58,613,396.92 and its records show
that 48%, or more than $28,610,000
of this sum, was withdrawn from
its savings accounts to -purchase
bonds.
It is currently issuing 12%
,

:

.

;
..

,

made

small capitalists
holders of millions of

.

since 1941 and aims to

bond¬

and

Americans
make capi¬

Treasury

volunteers

in

the

ing of the things they sell.
could

there

have

been

No country

has

surrendered

ever

to fascism or communism unless it

had

majority of dispossessed and
despairingpeople to < whom a
"leave everything to Adolf" (or
of the Series E bonds sold in the
Benito or Joe) doctrine could be
city and sells, in wholesale and peddled as the one panacea
for all
retail lots, about half of the U. S.
economic and political ills.
You
Savings Stamps. Further, it acts do not create
proletarian despair
as issuing agent, of course with¬
and unrest by creating more bond¬
out charge, for many small firms
holders.;«
y YYyY:'<yYY Y' ■
operating Payroll Savings Plans
This democracy and our eco¬
which do not have the facilities
nomic system can be overthrown
to issue bonds.
only if it is first weakened by
a

would

work

only

if

with

free

a

Sam

hand

would

pick

people

Uncle

suaded

to

save;

urged to spend.

I

be

to

per¬

few need to be
see no less need

Holdings

Savings Bonds

..

from

the

more

know

that

banking sys¬

will more easily than does
other form of public relations.
They know it brings many people
into the banking rooms and makes
them
aware
that
the; bank
is
good

•

working not only for the good of
its depositors but for the welfare
of the 143 million Americans who

the U. S.

Treasury and share
the responsibility of managing our
huge national debt. They consider
own

,

v

their attitude

more

-altruistic.

realistic than

;'YY':YY YY''/''

In New York

/ show, 26%
rently sold

issued by savings

are

either

the

that it will
A

left

right wings

or

true.

come

obli¬

government

savings institution,

bank

or

other medium that persuades
American to put away another

any
an

dollar in

savings account, into

a

building and loan shares, into life
insurance, into
U.
S.
Savings
Bonds

and

into

or

ment is

helping just that much

the

state

trines

sound invest¬

any

to

Commercial

with,

very

exceptions are backing the
Treasury's efforts to keep the debt
even

when

this takes money out of their de¬
mand
deposit accounts
and

though Savings Bond sur¬
plus from national sales in excess
of redemptions is used to retire
even

bank-held government obligations
which pay interest to banks. They
are

no

altruistic

more

in,

or

un¬

conscious of what

they are doing,
than is the savings bank cited.
We

are

aware

institutions

that

that

some

did

savings

their

part

patriotically

in the war savings
program have dropped it in peace¬
time, and that others are giving it
only lip service. We can only con¬
clude that the reluctant

not

aware

of the vital

ones

are

importance

of

Savings Bond sales in manag¬
ing the national debt for the good
of

the

their

national economy

own

and for
institutions' welfare.

No

Imposition of Deflation

savings institutions are "let¬
ting government impose debt re¬
duction and deflation upon them
in the name of thrift and patriot¬
ism" we can only wish that some
of this deflation

were

the

aoparent in
depositors have

prices their
to pay for the necessities of life

which

net

come

before

reduction

of

savings.

more

than

The
$21

to

at

reserves

in

to

customer

cover

ratio of 6V2

the

the average.

to

;,:,Y.Y. Y

1,
\Y

on
•

Y

There would have been $13 bil¬

lion

less siphoned

directly out oj
supply
if
Savings

the

money
Bonds had not been sold and cer¬

the

average

who

are supposed to know
is best for
everybody.
Y

died

set

by

coming in, it is impossible to cal¬
culate, but easy to imagine. wha<

per

$1,000 in

the

up

have

been

the

effect

on

inflationary trend.

Any

banker

trained

person

million volunteers and donated and

program that

sponsored advertising and air time
that private savings organizations
could not begin to buy.
Not the

being

the

of the forces

enlists

Treasury

thrift that

for

is

any

can

see

that

any

keeps inflation from
than

worse

of

is

it

help;

to make every private investment

of a savings institution—or any
lives'or—safer in the end. Defla¬

.*•'

>,

<

"strong men" have

cowardly

suicide

Savings Bonds Not Competitive
In my opinion, it is

what
.

or

on

of

itive.

a

own

people. The people of West¬
Europe and the rest of the
world, in-my opinion, are not
going to submit to another alien
ern

dictatorship

unless

there

is

no¬

short-sighted

life insurance or
savings institution to consider the
Savings Bond program as compet¬
bank,

any

if

gallows; one dictator came to
ghastly end at the hands of his

-'

The article cited asserts that

had been
stopped after the war, the money
put into them since then would
have gone into private savings in¬
stitutions, in large part. Some of
it would have, of course, but that
is

Savings

Bond

sales

on

Welfare of People

The welfare of all financial in¬

stitutions depends in the end upon
the general welfare of the
people
who patronize them.

They want

neither

inflation

nor

severe

de¬

flation; they want steady business
and a healthy
economy. Theirs is
a very
special stake, therefore, in

the

proper

of

management

the

national

debt, in which the sav¬
ings bond program plays a vital
part.

It

is

not

to

necessary

ex¬

dim view of the

limited and

plain here why runaway inflation
nation to supply the
questions.
Bankers are as much or severe depression would be
means
of
working out their own salvation. interested in preserving the value' ruinous to private savings institu¬
I recognize no
of the dollar as they are in accu¬ tions.
economic
I believe so
firmly in the prac¬
law that says we have to have
mulating deposits. YY--Y Y Y';' t
tical
superiority of our system that
If we work together to
Net receipts from the sale of either.
my only concern is that we
may
prevent them, - we can
not realize that it will
prevent
not function Savings Bonds in 1946-47—that is
them.
If we don't, we can't.
smoothly unless we keep it in re¬ incoming cash from the sale of
Series E, F, and G bonds in excess
pair and constantly try to
Selling ' more
Savings
Bonds
improve of
it.
If we do, I am
outgoing cash for redemptions than are redeemed or cashed upon
where to turn for

help;

friendly

no

completely

ernment

no

or

it—at least
peared

on

con¬

other form of gov¬

economy can supplant
none that has
yet ap¬

this earth.

Bond

drives
of
1941-45 sold to millions of Amer¬

icans, notably through the Payroll
Savings Plan, the first security of
any kind they had ever owned.
Probably 60 million of the 80-odd
Bond

ginners

at

lions

them

of

buyers

bond

invested

first lesson

in

be¬

were

holding.

had

saved any money
less

never

Mil¬
before

regularly, much

it.

They got

the

solid

their

satisfac¬

thrift brings to the provident.

and

a

—have
lion..

amounted

The

concrete

benefits

that

to

over

$3

bil¬

sale

of. new
Savings
Victory Loan has
Treasury with $13

Bonds since the

supplied

the

billion in cash to

Savings

million E

in

the

This without

resentment

portfolios of

doubt fed the

a

toward

"Wall

and banks and bankers

Street"

during the

1930's which

had many unfavor¬
Patriotic public ser¬
during
and
since
World

able results.

vice

War II has been able to counteract

cover

about $10.6

billion in maturities and redemp¬
tions of all Savings Bonds, which
otherwise would have had to come
out

of

ances.

It

the

Treasury's

Y'- YY

■:

:

cash

bal¬

Y':' ',' ' ^"Y

is

generally admitted that,
without the continuing campaign
to sell Savings Bonds, supported
by business and industrial firms
operating Payroll Savings plans,
the

banks,

periodicals,

the

radio and
their advertisers and
press,

other volunteer aids,

E Bond

re¬

demptions
would
have
been
than they have been in

greater

maturity does not increase
crease

the national debt.

or

It

have to continue to deserve it.

savings
hear

or

banker

would

No

want

to

read that the

private sav¬
ings organizations of the nation
alone, among its financial institu¬
tions, were refusing to serve their
depositors and the general welfare
by selling and promoting the sale
of
Savings Bonds.
There could
be

never

enough Savings Bonds
cripple private savings in¬
stitutions, for every form of sav¬
ings has its advantages and dis¬
advantages compared to the others,
sold to

and there will

the

always be

boat for all.

room

in

YYYYY

Y (4) The Savings Bond program
in the bondholder-voter

an

awareness

in

of his personal stake

fiscal

government

policy and
Treasury's daily
Savings Bond holders
that
I
am
reliably in¬
The

economy.

from

mail

proves

formed.

The

personal

more

in¬

terest the

the

13 colonies who realized that

they must all hang together or
they would each hang separately.
Translated into present terms, that
is just as true of the leaders of

today

gether

spending; Congress alone
Federal
expendi¬

Americans

as

general fund.

nomic

"ism"

' Conclusion

works

for

the

Man's

Bookshelf
S.

Second

Naval

World

Logistics

Press,

in

War—Duncan

Ballantine—Princeton

Princeton,

N.

the
S.

University
J.—Cloth—

$3.75.
More

Housing at Less Cost—A

Study of Factors Blocking Large
Scale

Production

Reasonable

Cost

Recommended
:

V

The Savings Bond program has
additional
benefits
which

these

that

Business

Association
;

to¬

to

check

Congress. Savings Bond sur¬
plus is used to retire maturing
debt obligations, as already
stated,
even
though receipts go into the
upon

Y

founding
work

we

welfare of mankind.

U.

.

a

If

improve
strengthen our democray and
our economy—and they are inter¬
dependent—this great experiment
cannot fail, and Americanism will
remain the only political and eco¬

does

authorize

tures and the ballot box is

of the

was

1776.

de¬

The surplus from Savings Bond
sales is not used to increase gov¬
can

in

and

keep the securities spread,
and to spread them more
widely,
percentagewise, as time goes on

ernment

it

as

fathers

help

and the debt is reduced.

•

this in large part, but in order
to keep their present good
repute,
bankers and financial men will

-

Dependence

the

fident that

concentrated

creates

financially

or

the

and his

One

$10.6 billion less o■
bank-held debt, due to that much
being taken - out of the Savings
Bond
account
while
none
was

would

with
the help in peacetime of about a

War I,- when for lack of
regis¬
tered, non-marketahle savings
bonds, the debt securities soon

80's.

taxpayer

(currently 41 cents

(3) The program prevents a re¬
of the mistake in World

tional
loans

the

sales), continues to build

far

if

?only

ment of




expense

program,

feel

spread

tion

$24 billion of obli¬

this

would

average voter takes in
help tion does temporarily help savings
the conduct of his government by
of the schools. The School Savings institutions,
banks, insurance com¬ his elected
representatives, the
program begins in the first grade, panies and other market investors
safer are our democratic institu¬
is woven in with the teaching of by bringing down the
price and tions
and our citizen enterprise;
arithmetic, civics and budgeting. increasing the yield of marketable
During the 1946-47 school year bonds ;n general, but that is not economy.
This nation of ours was brought
more than 80,000,000 U. S. Savings
an unmixed
blessing.i Y'
into being by representatives of
Y-Y/n!
Y'YY- Y ''-YV"Y Y
Y.vY'Y --.Y -\ Y
Stamps were sold.

doc¬

biljiqn in the debt and the retire¬
some

which

He

less

Those

can

The

If

small

family than leaving
everything to the "strong men"

spread widely by promoting and
selling Savings Bonds

acceptance of
the benefits of thrift and regular

back

pockets, directly

least

the

banks

thrive

which

wider public

upon

indirectly.

annual

comes

communism

.

few

institutions

vate

into the people's

billion

spread of
socialism.

opinion, private savings that capitalism can
continue to
institutions, instead of following provide the most
benefits to the
the professor's advice to "abandon most
people and that for air its
Savings Bond issues" should mdke
shortcomings, individual enter¬
sure they are doing all
they can prise is better
for
man

operate with it should be the pri¬

debt

banks, corporations and investors
who bought them up at market
prices ranging down to the low

for

saving

my

to further their sale.

■i

of

United States fails to demonstrate

In

^

being spread because it is the
highest hope—and I believe about
the only hope—of the totalitarians

State, the records
check
of the E bonds cur-

banks.

;

is

$5

the

gations held by commercial banks
potentially inflationary, in thai
they? can be sold to the Federal
Reserve System
to create addi¬

tainly a considerable part of that
industry, business, labor or¬ sum would have been
spent in 6
ganizations, press and radio, banks 1946-47 market
of scarce goods
Savings Banks Not Unconsciously drastic inflation and depression. and savings institutions which ben¬ and
rasing
prices.
Retiring
$24
Another crash like that of 1929 efit from it to support the Treas¬
Sacrificing Themselves
billion
in
bank-held
debt
cer¬
in
this
country
v
would
be1
the
ury's
Savings
Bonds
program
in
I am sure this savings bank does
tainly worked against over-exsweetest music
Moscow and
its peacetime than there was in war¬
not sacrifice anything
by doing
pans'.on
of
bank credit money
satellites ever heard. The Russian
time. Thrift and saving have had
these things, nor is there anything
when we already had (and still
radio is already broadcasting to six years of intensive publicity
"unconscious" about it.
Its of\ave)\ too much money afloat in
whoever will listen a running re¬ and advertising through this pro¬
the
ficers, I know, consider the time,
economy. '
Over - abundant
port of unemployment, depression, gram and it would be folly not
trouble and money not only well
money due to war financing is the
to continue it.
nunger and uespair gripping tne
spent but well invested, They be¬
chief cause of our price inflation.
United
States
today,
complete
lieve Savings Bond Service creates
Certainly the last to advocate its If the Treasury haj been able tc
with harrowing details.
That lie abandonment or to refuse to co¬ ret.re even
any

the

on

currence

that

,

■

that

possible to retire $3 billion

.

;

money

in interest (or accrual)
his Savings Bonds without di¬

or

are

up

have

Bond

tax

directly

aware

Y

Bank

taxpayer to

verting any part of it to an inter¬
mediary. Thus he is made happily

pay

obliga¬

'

.

the

of his

some

happy if he thought he was
taxed to "pay $5 billion interest
to
banks, corporations and the
wealthy." ';Y:: Y-*:

all

the check
whenever his nieces and nephews
went broke. The right couise lies
between
prodigality and parsi¬
mony; it requires saving as much
as possible in the fat
years to keep
things going in the lean.
/
Most

marketable

It enables

back

on

$23.6

tem, most of it in short-terms. We

every

that

and

least

(2)

Although out of its cash surplus
since March 1, 1946, the
Treasury
had retired a net of some $21 bil¬
lion of maturing national
debt, by
shifting ownership it'* has been
ihan

including government, spent

one,

at

have

off for cash to

maturing

Into

Nor

tem

available.

insurance

would

(1) It puts debt securities di¬
rectly into the hands of individ¬

get

none

V-

a

communistic

this

Treasury

worse

Converting

better

a

and

was

private savings institutions cannot
independently of it:

interest

hundred years equal this advertis¬

antidote for the propaganda which
maintained that our economic sys¬

the

sold,

tions.

literally
every
American old enough to compre¬
hend them.
The savings institu¬

talists of more of them.
It is the
best
anti-totalitarian
and
anti-

been

billion

to

could not in

than it

greater

off

in all media in 1941-45, sold thiift

tions of the nation

uals.

left

drives

of $400,000,000 worth of do¬
nated and sponsored advertising

saving

to buy more bonds but also con¬
vinced them that they should hold
onto their bonds. If the
outgo from
the savings bond account had been

had

and

and,

achieve

no

Department,

through its Defense and War Sav¬
ings program, with the help of six
million

1946-47.
Every war loan drive
showed clearly that intensive
pro¬
motion not only persuaded

people

Widespread Savings Bond Holdings
The

Thursday, December 11, 1947

of

of

and

"by

the

at

Remedies

National

Manufacturers—

National Association of

turers, 14 West 49th
York

Homes

Manufac¬

Street, New
20, N. Y.—Paper.
*

<WWi4t\»i~i'VHWWI,fr .«■

t.

Volume 166

Number 4654

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

ference of

Under Present Conditions
(Continued from
ful

presentation

business

of

report of

known

progress

the

as

income

statement.
It
is readily
understandable that there can be
but doubtful usefulness in
any se¬

of

quence

is

\ 31

13)

page

the

financial

entitled

serves."

"Inventory
contain the

They

cial

reports that show

inventory

trail

a

reserves

through the accounts
charges and credits, so that
but

an

tell

what

sults

expert

re¬

limited

use¬

compared with a com¬
because
each
company

tory pricing,

methods

and

the

because

or

of

because

or

reserves

not,

can

income report which

an

different

ates

insider

be

petitor
uses

is

no one

business

an

true

There

fulness in
cannot

or

the

are.

of

ing
in confusing
runr.

inven¬

one

the

without

standard

of

does

reserves

charged against income by
companies are creations of
agement

cre¬

other

both
man¬

uniform

any

measurement.

The

company that is small may be able
to ignore for a time the fact that

on

these

Bulletin No. 29—Inventory

In

the

its

of

course

Prices

jectivity is already growing late,
because

it

business

be

can

proved

that

income

reports are by
and large greatly misunderstood
and greatly distrusted.
; '\
;

Because

of

the

methods

by

which accounting procedures have

historically developed, and espe¬
cially the fact that most of the re¬
finements of accounting are recent

developments of the competitive
phases of the industrial revolu¬
tion, it is not surprising that sub¬
stantial are as Of differences have

Statement 9

lead to

or

pretation

between

companies

confusion in the inter¬

in

the

reports of indi¬
vidual companies, it is not sur¬
prising either that there/ should

develop

criticism

severe

lished

financial

much

suspicion

of

pub¬

information
of

corporate

nancial r statements.2

In

and
fi¬

recent

years

these differences have pro¬

vided

a

basis for attacks

by those whose

ness

on

busi¬

purposes are

Nine years ago the
Institute of Account¬

devious.

more

American

ants, the national organization

of

practising
certified
public
ac¬
countants, undertook a major pro¬
gram directed toward the reduc¬
tion of

ated

these

differences.

It

cre¬

major committee, called the

a

committee

accounting proce- ;
dure,, to
examine controversial
questions in accounting and to

bulletin, the commit¬
accounting procedure made
inventory pric¬
ing practices. The number of di¬
vergencies in methods was almost
legion. In fairness, it should be

tee

that

application
extensive
retical

the

the

through the

ers

Statement

and

ufacturing
cost

are

to

price.

at

societies

of

selling

the

a

same

difference

while

of

procedures to be fol¬

of

differences

would

be

areas

reduced

and published financial statements
would thereby be made more use¬
To date this committee has is¬

ful.

31

sued

had

proved troublesome or con¬
fusing-' These statements
carry
only the weight of their own rea¬
soning and .the reputation of
members of the committee, V;but

they appear to have made'impor¬
tant: gains in the direction of nar¬

involves

Statement

isome

of .the variations in

In the last year

pa|£

the committee has

released two: very important bul¬
letin*

.Bulletin i:29Hs:entlUed

pricing.
■

the subject of .inventory

on

"Inventory Brief rig" - and Bulletin
..-.2 A-recent

public ^opinion

*urvey

con¬

ducted by Controllersbip- Foundation, inc.

light the startling impres¬
sions, among others, that 45%
of the
public s belie*«s that reported profits ' of
corporations are -deliberately understated,
brought

59% ;Qf the public believe that
is-(difficult to-.understand-a typical

and
It

to

that

profit and, loss statement.; ; The survey
report clearly showed- that beliefs such
as

these

lead

-to

the" further

belief that b»»*'**-»ss makes
amount

of

profit.,

•

an

prevalent
exhorbitant

the

the

\




one

circumstances,

Statement

5

requires

declines, which
as

have

not

occurred

balance
on

ciples

is

sheet and

priced

for

exact

\

committee

rent -loss.,''•
•

"market"''

as

6

>defirtes

used

"lower of cost

or

in

that

opinion

hand

tain

inventory

of
re¬

or

contracted for.

or

v

.

any spe¬

the- current period.

:•

/./"(c) for the.purpose of reducing
inventories jother than to a basis
which is in accordance with gen¬

erally

be¬

ciples
a

accepted

accounting

prin¬

(Bulletin 29), 6re of such

mature

relating

that
to

charges or credits
such reserves should

be), but makes, cer* not enter into the determination
exceptions to this definition. of net income and that they should

case

may

Statement

7

approves

plication of the

rule

of

the
"cost

that

their

ap¬
or

has

the

Barclay

With.

associated

become

Bax

Joseph

ILL.—Paul

all

reac¬

prices,

that

should

be

future

uncertainties

met

way)

future losses should
charged against the profits
This view¬
point was expressed by one of the

vague

thus be

from which they stem.

dissenters to the bulletin in these
words:

"Traditional

accounting prac¬
clearly inadequate to
existing extraordinary
price, inflation
and
subsequent
tices

are

cone

with

substantial

deflation

inevitable

based

Paul J. Bax

that appears

South

on

be realized.

which

such

Brown will

the in¬

it

own

securities

fices

in

Manchester.

of business

/

basic.

more

It

involves

*

managements have

an

honest dif¬

/

■

With Herrick Waddell

B.

Chronicle)

the staff of

Boyes has joined

Herrick, Waddell & Company, 55

the

Liberty Street, New York City.

direct question

of the objectivity
reporting, of the elimi¬
nation of public distrust in ac¬
counting, and the even broader
of income

ventory

for

reserves, or

any

more

than adequate

To

all

of

the

the need for different

tivity

of

tee

American

the

with

the

in

Stock

of

the

earning

business under

relates"

violates

that

concept

As
an

an

\

alternative to the

or

procedure can be developed
to meet these current difficulties,

objective
tion.

.

of

be

present

.

applied, without regard to the
for orderly and consistent

to income are

directed

4'i

f

j

..

this

and

only

inventory

at

account
'

■

J"

discussion
reserves

.*

be tested

sonable

is, of.

course,

reserve

no

the

whiihj

are not

for fairness within rea~;
The bulletin is a

limits.

document. Its sponsor*?:

hope that business managements;
will accept it as being in their best
interests, in the sense that truth¬
ful objective income reporting is
one of the surest ways of develop-

is
*

income. There
objection to am inventory
fronfi
surplus and re¬
turned
in
whole
t«* ' surplus when
no
longer considered necessary.
1

ated by charges to current

on

in accord¬
ance with generally accepted ac« ,
counting procedures,?, and cannofe.

are

cre¬

based

ipf management,

in/the .financial

bulletin

is not for each com-'

practices.
Business as a whole:
will/suffer if there should be any
widespread belief among users of
financial statements; that charge#

No reserve for

surplus
>

3 The

no

applica¬
to

answer

need

courageous

the

the

to decide what its profits
shall be, or what procedures shall1

this contingency has been specifi¬
cally * provided

of

pany

possibility of future

future conditions'.

and

consistent

of

Certainly

this problem

by

will depend, of course, on

determination

assurance

report of one corporation for 194f>:-

if any,

adoption

the

resist

procedures that have no basis for

ing to consider the good sense of
this paragraph from the, annual

a

must

we

of

los* in the inventpry should orices
decline. The amount of such loss,

some

ing

inventory reserve, it is refresh¬

p: "There is

until
some
basic
business measurement
sound change in account-,

However,

,,

use

n

change in

added).

reaching into the future.

i

unit were

adopted.

of

Clearly, the use of inventory re¬
serves

statements

supplementary

terms of such a constant

the conditions

(boldface

periods..

for reporting if a plan for meas¬
uring profits in terms of constant
units of value were developed and

existing during the year to which
it

profit in Taf

Possibly existing accounting pro¬
cedures would be most effective

Ex¬

capacity

measure

basis of moving cycle

on a

change, stated the objective of in¬
come
accounting as being "the
best reflection, reasonably obtain¬
the

to

short fiscal period and shbuld de4
vise a system of income reporting*

correspondence
York

New

Perhaps

should abandon the idea of at¬

we

tempting

a

Institute

in.

results

business

and

terms of index numbers.

showing
of profit, to justify artificial un¬
derstatement
of v that
profit.
A
good many years ago a commit¬
Accountants,

Per¬

ones.

haps we should in time develop a
system of measuring business ac¬

involve¬

other

spring from

basic

Perhaps

concepts of profits are
at fault and rapidly rising or fall¬
ing price levels merely bring out

arguing for artificial equalization:
of reported profits. They are con¬
fusing, honestly though it may be,
problems of business finance, of
dividend policy, of labor relations,
of

To them it is fair to make

business

type cf reserve to balance cyclic
over a period of years, are

and

thi$ bulletin may not
to accept in the first in¬

some

concession.

one

effects

ments that

protection for

this contingency."

other

ion of the Board :of Directors that

*.

for¬

was

DORCHESTER, NEB.—Carlisle

to state, because

as easy

statements.because it .is the opin¬

year."

He

(Special to The Financial

argument for the bulletin is

account of any

While the Bulletin is brief, its
either
directly to" each item in the in¬ conclusions are the result of long
ventory or to the total of the inr- deliberation and thorough consid¬
ventory or to the total of each eration of alternative and contrary
major category, depending upon i viewpoints by the committee. It
which most clearly reflects peri¬ l is recognized that some business

of¬

business from

Wakefield.

in

quite

is

H.—Rollins

shortly engage in his

merly with E. A. Straw, Inc., of

profits. This extraordinary
situation requires sensible

The

a

Rollins Brown Opens

than technical adherence to form."

not

with
for

associated

was

WAKEFIELD, \N.

making
objective
judgments exer¬
cised in good faith and a realistic
consideration of substance rqther

tests

he

Co.

&

Peabody

Kidder,

volved last-in, first-out method as
the
only means of eliminating

tolerance

trading de¬

number of years.

Neither should

business be forced to adopt

39'?\f

Bax

Mr.

Street.

partment of the Chicago office of"

inventory profits as un¬
qualifiedly realized in the face of
conviction that such profits will
never

Investment- Co.i

Salle

La

formerly in the

was

report

not be used to relieve the income

market whichever is lower"

I

Chronicle)

The Financial

to

tions, that periods of rising prices
create profits that will be offset
by losses in periods of lowering

able,

is therefore

"(b) without regard to

ing current replacement cost (by
purchase or by reproduction, as
the

P

cific loss reasonably related to the

cur-f

as

The

"

the term
the phrase

market"

losses.

such as those created:
"(a) for possible future inven¬
tory losses on inventories not on

'jm*"■

Statement

reduced,

serves,

or

a

therein defined

future

follows:
"The

differ¬

as

all-in¬

inventory
at the lower of

as

:

the

are

language of the bulletin is

applied

the

not in

for
of computing income, by

operations of

requires

are.

of

an

further

be

reserve

a

29

that

ket" for the lower ^valuation to be

recognized

date

on

market

or

purposes

obsolescence,
in :price levels or other
adopts the term "mar¬

be

the

the realization of the

and

cannot

It

and

at

Bulletin

of

which
cost

^deterioration,

to

be de¬

may

for losses which

reserves

clusive

from the cost basis of pricing
inventory when the usefulness
of the goods is no longer as great
as its cost, whether due to
physi¬

causes.

Reserves

hand. In effect,
this bulletin holds that the prin¬

ure

change

use¬

for future inven¬

reserves

fined

as

\

31—- Inventory

inventory then

an

cal

in terms of cost

This bulletin deals with the sub¬

the

depart¬

a

is

be easy

prospect

clearly

reflects periodic income.

It

stance.

tory

which, under
most

simple.3

ing

ject of

"last-in, first-out") but em¬
phasizes that the method selected
be

is

serves

able

v

and

should

market" rule and the definition

Bulletin

the

that

of several assumptions as
the flow of cost factors (such
"first-in, first-out," "average,''

odic income.
_

basic

Statement 4 approves the use of
to

v-•)"<[

follows:

affirms

(Special

CHICAGO,

social responsibility of financial
accrued losses on uncancel- reports to tell a truthful and un~
and
unprotected - commit¬ confusing
story.
The argument
ments.''
• ■ .-"J.
enters the area of the questionable
If
the
bulletin
accomplishes validity of any type of reserve for
merely a minor gain in its pur¬ something which has not hap¬
pose of proper measurement of in¬ pened in an accruable sense when
come, with the resulting achieve¬ it is applied against income for
ment of greater comparability of the
purpose of producing a result
business
results,
it
will
have different from that which actually
proved 'to be a major document.». occurred/ Those who argue for in¬

explanation

as

Barclay Inv. Co.

The argument against the bulle¬
tin and in favor of inventory re¬

"(c)! The requirement of record¬

any one

as

of

these:

fulness. .\\r

major objective in accounting for
inventories is the proper deter¬
mination of income through the
process
of matching appropriate
costs against revenues.
Statement 3 adopts "cost" as the
primary basis. of accounting for
inventories, and defines generally
the meaning of the term.
:•:

ence

accounting procedures of the

2

are

the major accom¬
the bulletin are

summary,

of that rule

business whose operation
a
stock of goods.
Tho

other statements

Paul J. Bax Joins

of

its

viewpoint will be clearly demon¬

price

*■

"(b) The affirmation of the "cost

The first proposition, be¬
defining the term "inven¬
tory," merely states that account¬
ing for inventories is necessary
for any

state¬

'■**.

plishments

or

yond

,

rowing

an

10

V''.'

uation for purposes of the balance
sheet, v
V:
v-:

of each.

bulletins, each of which

has dealt with some problem that

contains

propositions with

on

lowed, in the hope that the

bulletin

time

in

strated to be sound.

mination, rather than that of val¬

time

The

a

"(a) The emphasis on the ob¬
jective of proper income deter¬

income.::r- "h;.:
:

of

readers of financial

the

In

use

and

language for the benefit

ments. V;

the

at

ar¬

principal

the

denominator

common

common

treme pricing practices, and
ef¬
fectively narrows the area of the¬

oretical

the

of which would be the

one

ex¬

more

(other than

advantages,

many

the fact that it

of

some

ranges

guments that spring from rugged
individualism) and there can be

authoritatively expresses the basic
objective of inventory
pricing,
out

one

procedure

a

public ac¬
countants and to "accounting of¬
ficers
of
representative
manu¬
facturing companies, the opinions
were equally divergent.
The final
resulting bulletin contains some
compromises of viewpoint and is
clearly a single and perhaps very
temporary step in the evolution of
inventory pricing practices.
Its

rules

no

conviction' that

is

past experi¬
statement in the bulletin is per¬ ence.
Obviously reserve provisions
haps the suggestion that in time made
capriciously
to
equalize
uniform' methods
of
p: icing
be profits between years must be
devised within each of the prin¬ condemned.
It
seems
equally
cipal industries. There can cer¬ plain, however, that accounting
tainly be no disadvantage in such rules should not force business to

certified

worthiness lies in

please

practiceVneed greater narrow¬
ing.
The most important single

submitted to

were

leaves

of

When copies of early drafts

of the bulletin

clearly

Adrajttedly* the permitted

inventory cost,

inventories

losses.

bulletin

completely. Al¬
ready the committee is receiving
suggestions for a future revision.

sell¬

and

inventory

This

much to be desired and is certain

The differ¬

years.

expenses as an

com¬

had

burden as;an inven¬
(or
excluded
fixed

valued

or

purchase

more

all of administrative

ing

unprotected

theo¬

charges from manufacturing bur¬
den), to those that included some
or

on

con^

committee

directly from the
realized
requires that ac¬ income
during
highly
firm, uncancelable profitable periods, and (in some

of

area

in

ences
in
pricing
ranged from
companies tnat excluded all man¬

tory

10

crued losses

accounting writ¬

grown up among

ex¬

Which

not much

were

than

cost

mitments should be recognized in
the accounts in the same way as

variations

differences

rules out the pric¬

extreme cases such as
those of precious metals having a
fixed monetary value.

on

conceded

.

recommend

well

as

in

cept

permitting considerable
latitude within the premise of ob¬
grown up. When these differences
jectivity in the determination of
have been sufficient to prevent
comparisons

state¬

opinion from this

But the

economic events have

ing of inventories above

develop¬

investor, the con¬ organizations such as the National
Association of Cost Accountants,
sumer, the laborer, the taxpayer
—is becoming greatly more con¬ the Controllers Institute, the state
accounting. The
company that is large knows that,
as
a
matter of public
relations
alone, the time for increasing ob¬

financial

dis¬

disclosure of the effect of any

as a

the public—the

scious of income

tne

a

change in methods.

several surveys of

finan¬

in

the

consist¬

ments of the methods used

accounting profession
subjects.

little

r

for

the

ment of this

usefulness in

calls

closure

that

honest

8

in pricing methods and

ency

really authoritative expressions of

reports of a
employs- varying
methods of inventory
pricing from
one
period to another. There is
company

Statement

Re¬
first

elusion.

29

(2393)

i

ing the public confidence

;

necessary , to preserve the highly
valued economic system of which

created

.

they

are

a

part.

<.

.

that.*4$

THE

What Will
(Continued from page 2)

goods in the next two

consumer

three

to

years.

Procedure in Making Forecasts

sensible procedure,

sumers'

purchases

in

1948-49

at

three assumed levels of total

con¬

sumption

is

digest of

It

a

comprehensive review
analysis, recently completed

and

by

expenditures.
a

associates

and

myself, of
consumption expenditures during
my

and

most

opinion,
likely
to prove useful for business plan¬
ning and for selection of securi¬
our

ties.

attempts to supply
definite forecasts of con¬

fairly

in

the past 33 years.

A

of

alternative; consists

popular

sample of the popu¬
what they intend to buy.

asking

lation

a

One

example is the series of sur¬
of consumers' buying inten¬
tions sponsored by the
Federal
Reserve Board, indicating heavy
demands for durable goods.
The
findings make cheerful reading.
veys

covering the two
peacetime decades, 1921-1941. Re¬
call

that these

of extreme fluctuations.
American

tedious step-b,y-step procedure of

ful

the

weighing all

money

Making
realistic forecasts—or
trying to make them—is a
the

various

factors

to be taken into account. The

ex¬

planation
which
follows
omits
many details in order to present
as briefly as possible the line
of
reasoning which leads to our con¬
clusions.
are

to

eight broad classes of
consumer goods.
With this frame¬
work as a control and utilizing as
guides
the
established
ratios

for specific

types of prod¬

the

of

of

amount

have

will

The

remains

truth

cold

dollar contains only one

cents;
for

hundred

and every cent paid out
requirement has. to be
from

something
else.
behavior, we submit,

reliable guide than con¬

a more

sumers' wishful thoughts.

,

Within Limits Consumer Demands
Are Predictable

To get a

correct perspective

consumers' living

on

habits and buy¬

CHART I

1939-1947

current

a

one

Consumers'

is

that

dollars)

of

the

1921

economy

decades

From the

slump

moved

the

up

and

effects of

the

manna

for.

which

A

New Pattern

Is

the

Before
should
what

leaving

take

extent

patterns

to

we
to

consumption

prewar

were

2,

observe

during the

altered

two wartime

pattern

it

as

now

exists depends on the strength of
the new wants and living habits
formed

the

during

five

past

•

or

six years.
Which
If

•

could

relative

desires
nomic

Wants?

Growing

the

Are

we

the

Making

Chart

time

the

of

nence

"<

in

in the

now

innova¬

V

■

\

/

;

•

.

widely vai iant ft om that'
prevailed in 1921-1941, is
making. The perma¬

tern,

continuing shortages of
products must be allowed

some

shower •-

they

others.

on

Following the precedent set by
World War I, another new pat¬

tions and

to

highest plateau of widespread
prosperity any people had ever
previously enjoyed. Then followed
the four-year collapse, the worst

available

CONSUMERS EXPENDITURES
On

depths

to fulfill their desires.

among sales of related goods, it
is possible to work down to esti¬
mates

they

diverted

The forecasts here set forth

limited

calculation

two

were

habits

while

industries

sumers'

tion of the chart

But they also lead one to suspect
that few
of
the persons
inter¬
viewed had in fact made a care¬

even

Thursday, December 11, 1947

CHRONICLE

peacetime spending makes con¬
purchases — at any rate,
their broad classes of purchasss^at any given level of income pre¬
ing habits, it is best to look at
fair
degree of
their record through the past gen¬ dictable with a
This is a fact woith
eration. Chart 2 is a diagram of reliability.
the percentages of total consum¬ stressing, for it does not seem to
ers' purchases at retail values in be generally understood.
However, the statement does not
each censal .year from 1909 to 1929
mean
literally that the prewar
and
for
each
subsequent
year
through 1947.
For convenience, pattern will necessarily be closely
the two periods of World War duplicated in the next few years. ;
represented on this chart are set Not only changed price relation¬
ships but,f also long-term trends
aside for separate treatment.
Please note first the middle sec¬ in consumers? living and spending

for sales forecasts which are

This article

FINANCIAL

&

They Buy?

This is the safest

ucts.

estimates of probable demands for

COMMERCIAL

accurately

measure

strengths of people's
various kinds

for

of

eco¬

goods, it would not be hard
what they would buy

to

foretell

at

each

of

level

rational

the

in-

Accuracy in this kind of

| come.

measurement is unatta'nsble with

I

present crude statistical materials*

5 However,

good deal of further

a

-} information can be extracted from-

periods. World War I the data at hand. ;
•
;
ysome
very important
X The first step is to eliminate
Compare the percentage
price fluctuations, so far as that
checkered convalescence until the allocations of consumption expen¬
1909-1914,
averaged, | can be done, by applying to each
European War finally brought us ditures in
major class of consumption exto the closing years, 1940 and 1941, with the corresponding averages
penditures the most appropriate
of renewed prosperity. One might for the postwar years .1921-1929. 1
price index for that class—that is,
naturally expect that people would Food and tobacco together went
i the
food price index to the food:
allocate their spending3 in quite down 1.5% and housing (compris¬
group, the clothing
price index
different ways corresponding to ing rent, fuel and utilities)^ nearly
to the clothing group, and so on.
the wide variations in their eco¬ 5%. On the other hand, t aspor¬
To facilitate realistic comparisons
tation gained over 4% and house¬
nomic status.
we have taken the prices of June,
hold operation (including furnish¬
Yet a glance at the chart will
1947, as the base and have inflated
ings,
appliances
and
other
equip¬
reveal an extraordinary degree of
the figures for preceding years up..
ment) over 2%h These changes in
stability of allocations throughout
to the mid-1947 level. The effect
the pattern signified, and in large
the two decades. The percentage
is to show for each year the ap¬
devoted to food and tobacco to¬ part created, years of bitter de¬
proximate amounts : that would /
pression in farming and, on the
gether was never less than 26%
have been paid for each class of .*
other side, years of rapid expan¬
nor more than 28%.
Most of the
commodities and services if mid- ■;
sion in automobile manufacturing
allocations show an almost equal
1947, prices and price relationships
and allied industries.
-.v1'';y,
degree of uniformity. Variations
had then been current. The recent
Look now at what has happened
in consumers' incomes had sur¬
upward sweep of pi ices has been :
in the World War II period. Food
prisingly little influence on the
so
rapid that even 1946 expen¬
and tobacco plus liquor
(which
way they allocated their expen¬
ditures have been raised about
can be classed together now that
ditures.
14%—not
to
speak
of; earlier
The chart indicates an apparent reliable dat^ are available) have
To allow for population
shot up from .31.5% in 1941 to years.
exception in respect to liquor; but
in 1946; and clothing and changes the national totals are, re-j*
this signifies nothing more than 39%
duped; to; expenditures per capitey;
inability to collect statistics from personal care together from 14.3% These are the figures graphed in
;
to 17.2%. The chief offsetting de¬
bootleggers during the prohibition
Chart
clines have been in housing, down
era.
Before World War I, alco¬
X The first.thing to strike the eye holic beverages got a little over over 4%, in household operation,
is the extraordinary rise in spsnddown 2%, and in transportation,
6% of the consumer's dollar; after
down ;3ay ,V>r.v. ings per person for "food,' liquorthe intermediate disturbances they
and tobacco from the early thirties
came back in 1946 to their old
-rThese alterations are far from
in

history, from 1929 to 1933.
we
struggled .through
years of painfully slow and

our

Afterward

introduced

six

changes.

.

•

•

.

"

.

•

6%

norm.
as

much

1939

1941

1940

1942

1943

1944

Sourcei U. S- Dept. of Commerce
thfff qvorttfi of 1947 on -onnwol

1945

r

bo*i>)

.-%•

1946

•,

•

*

....

.
_

1947

X:),
*

y

OF CONSUMERS'

the average consumer

negligible.

At the present rate of

consumers'

spendings

of

l/10th

of

$160,000,000

and social welfare.

to

on

of

products and
another

1%

a

involves

for

shift

every

loss

a

class

one

of

corresponding gain

class.

Shifts

of

this

•

The well established pattern of

CHART II

PERCENTAGES

as

all social-cultural activ¬
ities put together—that is, on edu¬
cation, serious reading, religion

spends

-

Incidentally, this is twice

••%

PURCHASES

"

■

CONSUMPTION

1909.1946'

size

are

CHART III

big enough to ruin

some

to date.

rise

WORLD WAR II

rate

the

rise

is clothing

of rise

This

care.

in

throughout in

terms

of price indexes of June 1947

started from

a severe

the thirties.

asso¬

slump during

Even in 1941

ditures per person

RECREATION

TRA NSPC RTAT ON

11II

ni

111

f 1 1

1 1 1

L.LI

Thereafter

it moved up fast to its very high
level of $200 a person in
19451946.

SICKNESS, DEATH, INSURANCE

THREE MINOR CLASSES

expen¬

well be¬

were

low those in 1927-1929*

TRANSPORTATION

differs

and

food

ciated products, however, in that it

Calculated

y.i.H




in

personal

from

SOCIAL CULTURAL ACTIVITIES

ii.iiiiiii

Next

plus

.

1914-1946
WORLD WAR

explain- V

not

prices would be to cut down food
•-

CAPITA?

is

shown

by the;- upswing.""'of. i food *;
prices, which has been eliminated
from this chart.
Indeed,"the nor¬
mal effect of exceptionally high
able

consumption.

.

EXPENDITURES PER

Please take note that, the

.

here

f 1 1

(Mostly Services)

HOUSEHOLD OPERATION

1 1

Housing
climbed
slowly
but
steadily from 1939 on. The three
minor classes—(1) sickness and £
death expenses and insurance, (2)
recreation, and (3) social-cultural
activities—moved up more sharp¬

—

(Includes Equipment)

ly,

yet

gradually

also

and

with

setbacks, from their low
point in the thirties. Spendings per
some

HOUSEHOLD OPERATION

(Includes Equipment)

person

recreation doubled; on

on

sickness and associated items went

HOUSING

up

(Rent, Fuel, Utilities)

40%;

ties,

sociaj-cultural activi¬

on

20%.

Transportation
and
.<
including
equipment, advanced slowly until
household : operation,
1941 and

ing the
:

CLOTHING ond PERSONAL CARE

F

were

war. ?

t h

ur

e

-

r

•-:,.X/X\"?

light

■
'■*; ■'
relative

on

strengths, of desires in two
Fuel, Utilities)

,1.1.1

II

I t I

I

parable

periods

com¬

is

supplied by
Chart 4. The two periods repre,

i

LIQUOR

sented

in

the

1933 to

and

■

then cut down dur¬

chart—1921

1940---start

to

,

1929

from ap-r

proximately equal basesr of per >
capita expenditures and show ap¬
v

FOOD, UQUOR, TOBACCO

.

proximately equal expansion .of
total expenditures—32% from 1921

FOOD ond TOBACCO

to

1929

and

from

31%

1933

to.

1940. The chart presents a fairly
trustworthy comparison, therefore,
CLOTHING ond PERSONAL CARE

of actual demands in the twenties
and

in

the

thirties.

Of chief interest

gains
for

in

the

are

thirties

....

the notable

of demands,

clothing, household operation

and the three minor classes at the

-

Volume

168

Number 4654

THE

and

top of the chart.
Demands for
transportation grew at substan¬
tially the same high rate in the
two periods.
^

the

before

the

leave

;

To

what

shortages

extent

goods must be taken into account.
Food,

the

this

group

are

expendi¬
for food.

expenditures
for
and tobacco (after
allowing for price increases) may

Effects of Postwar Shortages

in

-

an answer con-

estimating how consumers
would have spent their money in

■1946

if all classes~of

and

services

had

commodities

been

in

ample

supply-.The rise in total
ditures

42%

rise

from

liquor

expen-

strongly

shown

in

of

15%.

All

these

three

rise have become

entrenched habits.

The

Chart 4, could have
been continued into 1946. On that

most

assumption,

extravagance, it is safe to say, will

vulnerable

of

restaurant-eating;

the

but

three

is

this

even

;

^

arrive at the fig-

we

tabulated

ures

in

Table

1.

we

have

left

vacuum

by shortages of automobiles

and
ex-

In other

ings in

^

as

fv.The price

i;

relationships

falling

off

from

the

reached in the twenties.

expenditures
$166

were

Per

capita

1927

and

1929 against $135 in 1940 and $148
in 1941, though total expenditures

higher

were

both

the

latter

Noteworthy, too, is the fact

in

food

in

no

prewar

and

group

take

did

year

clothing

less

than

the

group

51%

or

than 53% of total per capita

more

expenditures. Evidently increases
in good spendings in peacetime
come
in large part out of allot¬
ments for

in

this

clothing. The great rise
from

group

therefore,

1946,

normal.

A

1941

plainly

was

safe

through

inference

is

ab¬
that

consumers'

i)

expenditures

»"

-

Clothing

%

&

jv

personal

resistance, to,

close to 37% if total

a

.

figure

expenditures

.

37.0%

la ted

Actual
%'sof

for

1933-40

1946

-

36%; •■'$442

Total
-r

38.1%

11.5

no

111

9.5

112

12.7'

37

153

13.2

87

9.8

53

133

11.5

Sickness, death,
insurance

;

y

%'s of

1946

Total

$461

40.0

200

17.4

127

-101

>

.

•

;

—;

'

56

■6.4

39

-4.4

Totals
V

yY

*1
■

s

v

24

69

6.0

50

59

5-1

63

100%

"4

'

-'

.

EXPENDITURES

11%.

'

s

r

*

L,

V

100%

—12 ;

for

1933-1940.

'

'■■■ ;7

"

2

'

I'

'

J

t

\

'■

v;

■"$

.

-.V"i ' *
■ - V .'

v.,1'

i-v'.

■

AJi
ASSUMED

A

>

it must

7

IN

1948-49

;

group

will

rise

moderately

be

sink

20%.h'%;

:^

consists

any year

'y^i" Vj&i'S
;

1100

of

than 25% in

nor more

from 1934 through 1941.

preceding the

com¬

bined percentages moved within a

'<n

slightly higher range—from over
24% to a little over 26%. Relaxa¬

-

tion of credit controls, if effected
sometime in 1948-49, could have

-1000-

a
7

!6

stimulating effect

on

:

Sickness, Death,.'
800

b

Recreation V.

Insurance

,

-

"

"

m

•

.

i-.

'

turniture

Social-cultural

142

15.5

138

12.0

132

12.8

126

13.7

132

11.5

114

11.0

97

10.5

121

10.5

109

10.5

96

10.5

65

5.7

62,

6.0

59

6.4

58

5.0

50

4.8

42

4.5

32

2.8

30

2.9

27

activities

Total

_.i—

:

100%

$1,150

—

$1,035

$331

36.0%

2.9

levels

pressure

13.7% and 14%.

appliances. Nevertheless, the
of increases in housing
costs plus other urgent demands
will
probably restrict expendi¬
tures in this group to not more
than the following percentages of
total expenditures: 11.5%
at the
level

1946

of

total

expenditures;

which

other

70%,

to

upkeep

Allocations

formulating our forecasts we
have had the advantages of con¬
sulting the monumental study of
"America's Needs and Resources,"
by J. Frederic Dewhurst and asso¬
ciates,
recently
issued
by
the
Twentieth Century Fund.
Their
estimates for 1950 (De^vhurst ob¬
jects to calling them forecasts)

and

of autompbiles and to
railway and bus fares. The un¬
demand

for

new

cars—

assuming that output can meet the
demand—will undoubtedly raise
allocations
to
the
group
well
above

their

to 10.4%.

prewar

of 9%

range

The percentage assigned

the

total

three

Minor

of

Groups—Percent¬

at various

expenditures
dent in the

rience.

light of

elastic of the

the

is

The

most

are

decline.
the

on

The

other

other

hand*

stubbornly resistant to the

and

downs of

total

The ' remainders

level

ups

>

1

10%

1950.
In the Twentieth

r

Fund

Household

L

In

15.0

16.6

12.8
11.0

—

10.0

10.5

6.6

6.0

---u-*.—---a.

4.9

4.8

2.9

2.9

death,

insurance-.

activities

.

100.0%

differences

center

in food,

which gets far too low a percent¬

in

the

Twentieth

Century

Fund

allocation, and in housing,
which gets far too high a per¬
centage—that is, when these two
classes are considered in the light
of their present and prospective
price
relationships
with
other
The

only other difference worth
special mention is in household
operation, including equipment.
the class with the largest

proportion

of

chases.

is

It

postponable
the

one

100.0% %

portionate expansion of any other
class of expenditures—in the pres¬
ent instance by the expansion of
the food

group.

i'Vf;'; Forecasts for 1948-49
The postwar

try,

boom in this coun¬
safely assert, is at, or
close to, its top. This follows

one can

very

from two simple facts:

classes of expenditures.

This is

Present

Study
37.0%

13.0

Social-cultural

age

the

14.0

—__

Transportation

Sickness,

Century
Study

31.1%

operation

Recreation

below that attained in

Allocation of Total Consumers' Expenditures

v

Food, liquor, tobacco____»_
Clothing and personal care

some

1946, because this is approximately
the level represented in the Dew¬
hurst estimates of expenditures in

divided

be

at

of the Dewhurst estimates and the

expenditures.

to

difference

pattern here proposed are evident
in the following comparison. We
list here our percentages for the

them at the three assumed

among

wide

points between the basic pattern

three; its proportion

rises in good times to a maximum
of 5%
and falls whenever total

expenditures
two classes,

of

brought changes in price relation¬
ships which now make a recalcu¬
lation imperative.

prewar expe¬

Recreation

record

the swift movement of events has

levels of total
almost self-evi¬

are

the

allocations graphed in
Chart 2,
At the time of making
the estimates this peacetime pat¬
tern no doubt appeared to be a
sound and acceptable basis.
But

allocations to the three minor

groups

from

peacetime

expenditures.

Three
age

levels

assumed

derived

were

to the group does not seem likely
to vary much from 10.5% at any

of

figures in Table 2
graphed in Chart 5.

are

In

operation
satisfied

13.5%,
/'

A Comparison With Dewhurst's

of

expenditures in this group are de¬
voted to purchases of automobiles;
the

respectively,

are,

100%

arrive at the

we

if the total goes down 10%;
10.5% if it goes down 20%.

30%

,

By applying the percentages ex¬
plained above to the three as¬
sumed levels of total expenditures
per capita—that is, equal to 1946,
10% below 1946 and 20% below—•

11%

Transportation—About

$920

,100%

and

most

pur¬
sus¬

(1) unem¬
is
at its
practicable
peacetime minimum; (2) no idle
productive capacity worth men¬
tioning for consumer goods
is
available for early use. Of course,
if men wanted to do a full day's
ployment

work,

present

ceptible, therefore, to the squeez¬

shattered.

ing effect produced by

a

CHART V

a

dispro-

records

could be
merely

But that idea is

bit of day-dreaming.

r

J.Vl'-j;

>

700

,

,

EXPENDITURES PER CAPITA

> two p«ac«tim»

p.riod.: 1921 »o 1929

is not to deny that prices
higher—conceivably, much
higher.
If they do—particularly
if they move unevenly—they will
further distort the prewar pattern
of consumption expenditures. But
they will not add a nickel to the
country's real income.
can

PERCENTAGES OF GROWTH

OF CONSUMPTION

Transportation

Tronsportotian

155

—

Sickness, Death,
Insurance

—20% L ower

14.5

37.0%
15.0

insurance-

Recreation

$383

This

'

Social-Cultural Activities

Social-Cultural Activities

__

I1/-

;.v7
900

operation

Transportation
Sickness, death,

The

are

than 23.9%

.NWV'.y •>'

v

Household

off,

given unavoidable in¬
in rates; expenditures in

closely related inversely
to expenditures for housing. The
two groups together took not less

,

1047>

10% L ower

38.0%

167

care__

shortly, and public util¬

are

In the 12 years

*

comes

purchases of
home furnishings and appliances
which are easily postponable. Ex¬
penditures for the group as a

at-V".TV

Recreation

is

allocation

lies. 'When rent control

group

LEVELS

^vXASJ
■

...

this

Household Operation, Including
Equipment—Well over half of this

,7

Expenditures in 1948-49

terms of prices of June,

jevel

$437

'

H
CAPITA;.

THREE

.

That

provide
urgently needed housing is un¬
questionable. In April, 1947, ac¬
cording to a computation by the
Institute of Life Insurance, 2,754,000 families were sharing living

to

2:

-

(Calculated throuRhbut In

Food, liquor, tobacco
Clothing and personal
Housing

decline.

20%

The least percentages
required for this grouo in
1948-49 are: 12.0% with total ex¬
penditures at the 1947 level; 12.8%
if they sink 10%; 13.7% if they

-6

of price indexes of June 1947" Y

SELECTED YEARS '"

V

,

a

much less than enough to

this

2.5?.'

$1,149 ;

PER

IN THREE
*

?

in

gradually from
$101 in 1940 to*$127 in 1946. The

whole
4 '

15.5%

creases

-45

,

,r b' l;\rV>

CHART IV,

,

>

certainly

and utilities—rose

ities

-29'

*

5.0

>*29;

100%

$1,161

Calculated throughout in terms

.

,

34,

5.5 %

57

•

2.4

28

-

CONSUMPTION

>

$19

7.8

column 3
* At same percentages of gain over 1940 as those listed lit column
I
-

almost

above 1946.

4'

3;*

27

$880

—

and to

16

10.8
!

88

r

Y-YY-Y

will

go up if total expenditures de¬
cline: to 15% in a 10% decline

accommodations with other fami¬

of Actual

11.0

124
;

Social-cultural
activities

ciency (—)

.

Recreation

•

DefiorDe

.•••.*•

in

14.2

166

operation-

Housing
Household

percentage

as
*25

15.1*

/>.'i Transportation ^4!

■

and personal
expenditures remain

of

strong

gain in
•

clothing

10

if total

they will be forced downyin^spite

However,

;

133

care

Of

Total

Pood,- liquor, tobacco $325

'

v-

S

than

of

hold at their 1946 level.

.%'s of

Actual

■>.in'
V-; ->
*
1940

14.5%
care

more

percentages of total expenditures,
however, slowly dropped in the
same
period to an all-time low

.

YY'Y'Y'YY.

allocation in 1948-49 of

hand, judging by past records, the

(Stated throughout in terms o| price indexes of June-1947) £ i.li/'X
Excess
'Y'YyYYY--..
*C?aiCu- Yv--. ,v-.
i
Y-■■■■' /'Exce

YYrYY

if
clothing prices remain very
high, we see no likelihood of an

expen¬

"Table 1-—Calculated ys; Actual Per Capita Expenditures in 1946

Y • Y■jg.ppbf

well stocked. Evert

are

to per¬

calculated percentage in Table
if "total

goods

i

wardrobes

as

38^ (the

'

'

1946

prices
$160 in

reduction in

allocated ;to

'

mid-1947

at

in

heights

at their 1946 volume. On the other

be estimated at less than

among

the classes of consumers!

•vyy

f

the contrary, a marked

years—on

H ousing - The per capita
conclusion is that the allocation to;
amounts (at mid-1947 prices) al¬
this group in 1948-49 cannottwell lotted to
this group—rent, fuel

per capita spend1946—that is, the alloca-

they might have been if;
postwar shortages had 'not distorted them—are usefulclues,, to
anticipated sales in 1948-49.. But
further-correctiohs' and adjustmerits, remain to be made.^YY'5 Y

tions

much

so

this group
without seriously affecting present
living habits.
But no such ;de¬
velopment seems likely to occur
within the next two years,Y Our

respects the calculated

allocations of

Y,

large

a

ditures

k;) later; ^

;

rise

(or

more

than other prices

less)

wjll be noted

as

much

mit

also in housing; "but

this* is illusory,

;

under

of

pressure

a

household appliances..V A large
cess appears

•

except

so

•v.

•Y %

much

expanded to fill the.

.

v

off

sharply reduced in¬
comes.
The remaining possibility
is that food prices may go down

fj*'

y

fall

not

rough indication
of the extent to which expendi¬
tures for food and clothing have

Here

;

a

-

v

-

of

together

foods,

194£,

to

contrasting situ¬
steadily rising strength
demand through the peactime

chases

elements in the

1933

31

,

Table Z
Three Estimates of Per Capita Consumption

Care-

ation—no

that

other

and. Personal

meet

we

years.

and

(2395)

'

Here

roughly apportioned as fol¬
larger poundage of food
consumed,
11%; increased pur¬
restaurants

CHRONICLE

,

Clothing

be

at

FINANCIAL

below 1946 and per¬

10%

lows:

in

from

1946

to

eating places, including services,
16%; a residual, to be accounted
for
by shifts
to
higher priced

per

spendings

1940

&

haps to 36% if the total declines
as much
as
20%.
ir

capita

per

capita between 1940
and 1946 was slightly over 30%.
Suppose that the rates of increase
as

;

of

certain types of consumers' goods?

sists of

...

Tobacco—Three-

more

The

*' V One approach to

v

or

in

tures

responsible

food,

^

Liquor,

fourths

are

for today's increased spendings on

vJ

decline

.

they
essential question sail

continuing

*

of

cur¬

rently

However,

war.

one

unanswered:

•

shortages

durable products which

many

affect
expenditures
will
presumably be altered consider¬
to three
The records depicted in Charts ably in the next two
3 and
4
clearly indicate which, yyears. These factors and others
likely
to
influence
each
class of
wants were growing most rapidly

•r

;

continuing

COMMERCIAL

r~^l

1933 to 1940 |

go

■

ir>'-.

it- vi

Household

Operation

-

tOTAl

Output

of

consumers'

v

goods*

except those retained to build up

600

Household Operation

SOCIAL - CULTURAL

Housing

inventories, is equivalent to con¬
expenditures. Since out¬

sumers'

and expenditures (measured,
dollars) cannot in¬

put

500

RECREATION

Housing
,-V >

Clothing and
400

Personal Care

SICKNESS, Etc.

crease, they" must either remain
indefinitely on their present level
or

Clothing ond

constant

in

TRANSPORTATION

300

down. Whether the boom is
indefinitely or is to
in a moderate or in a

go

continue

to

Personal Care

culminate

next two
depends on many factors,.
question is outside the scope

critical slump within the
HOUSEHOLD OPERATION
200

years

The

—

Food, Liquor, Tobacco

of this article.
HOUSING

Food, Liquor, Tobacco
100

If
CLOTHING

Our estimates pro¬

vide for all three
a

extent

slump
can

contingencies.

occurs,

its

possible

best be gauged

by re¬

ferring to past experiences. Here
1929

1941

1946

1946

10%

20%

♦857

♦939

♦1149

Level

Lower

Lower




FOOD

are

the

approximate percentages

(Continued

on page

32)

32

THE

(2396)

COMMERCIAL

What Will They Buy?
(Continued from page 31)

>'

1929

to

1931

sharp, short-lived crisis)
—.'.YvyY.-:,—*(consumption only moderately affected);-—
(continued decline, becoming serious!—

1929

to

1932

(continued into deep depression)

1929

to

1933

(an

1937

to

1938

(slight

1919

to

1921

1929

to

1930

in mid-

debacle)

economic

slumps

as

a

movements

whole but only the
of total consumption

which

expenditures,

major ele¬

3.0%

In the event that total per

fiscal year
accepted this

1948., The >• House

adopted a
of $33.5 billion. Neither
amount proved to be controlling,
and the actual expenditures for
ceiling, but the Senate

niture, household appliances and,
most of all, automobiles.

Judging from the analogies cited
above,
unless there
should be
:radical disruptions in labor rela¬

$31.5

of

maximum

a

-

billion dollars for the

begins .to

money

freely toward rent, fur¬

flow more

the economy.

approved

jewelry are to be anticipated,
consumers'

as

figure

capita

1,070,000. Until -this number is
changed, we must accept it as
settled policy. Our story can be
summarized

"

Estimate

1S48,

the fiscal year 1948 are now esti¬
mated by the President to be $37

level.

rehabilitation; -■>> ; y;y y ;/1 •' Y

ther

budget for 1949
is close to the House ceiling fig¬
ure for 1948. In the course of the

and

lor

have

We

estimates

added

1946..

20%

drop but with no ex¬
pectation that it will occur. ;'■<?.
a

capita expenditures, as
previously remarked, somewhere
near the Twentieth Century Fund
estimate for 1950:;' A 20% drop
would bring them down to a little
below the 1941 level.
The effects

national sales of

on

major classes of consumers' goods
.are set forth in Table 3.
The fig¬
in

ures

this

table

the

are

Our maximum

summary,

likely

capita expenditures in Table 2
multiplied by an estimated aver¬
age population of 143 millions in

to

those

prove

who

now

disappointing
foresee only

continuation

endless

exclusive of foreign aid and

lion

hearings
various

to

used

cedure

an

maximum

of eager de¬

in

information

much

of

support

proposed. The pro¬
4n
compiling our

budget

was

to note the

amounts -proposed by the House
It will
for 1948, and to give effect to the
difficulties also for compa¬
economies which were shown to
listed in this table are derived nies .that neglect to prepare for be
possible without impairment of
from a review of prewar ratios selling their products against in¬
services. In a few cases account
modified by consideration of ex¬ creased buyer resistance and in¬
was
taken of statements by ad-^
tense competition. However, well
isting
price
ministrative officers as to further,
relationships, . and
managed
businesses
have;
come
known demands arising from warpossible economies, and in the
created shortages.
% y through more trying periods with case of public works, some ad¬
Even
if
the
present level of flying colors and can do so again. justments were made even in the
♦Table 3
1948,,, on • the
Three Estimates of National Sales to Consumers at Retail House figures for
♦m
ground Inat the conditions cited
yY
Values in 1948-49
by the President in August, 1946,
(In billions of dollars; calculated throughout in terms of
price indexes of June, 1947)
for
suspending
such
activities
V' ;
' *
''r'
":'"V Assuming that total per capita' expenditures are:
would probably still be present in
"
:
: vY
°n 1946 level ' >10% below 1946
20% below 1946
t+ ort-f-,br~CYYyY. t-f or— Y
the fiscal year 1949. These condi¬
Food, liquor, tobacco
Y
62.5
2.3
54.8
-10.0
47.4
-17.4
tions were the high cost of ma¬
tFoods and beverages purchased
V
for home consumption;;.Y^Y
terials, high wages of labor, and
44.0
2.4 /; ; 38.6
7.8
34.4
—12.0 '
Y
: Y
Purchased meals and beverages
the general scarcity of supplies
(chiefly in restaurants
•
/Y o.3
14.1
2.4
120
:V: 9.0
5.4
entering into construction pro¬
Tobacco products
_YY_ ;
4.4
4.2 "■ + 0.2
+ 0.4
4.0 V
Clothing and personal care_____
jects.--;;
23.1) 4.2 ;-Y
5.9
22.2
20.3
7.8
YivYY/'-, <■'Yy
1948-49.

The

signed

dollar

the

to

amounts

chief

mands for their products..

as¬

spell

sub-classes

.

■

-

„

.

■

-

377'

5,585

3,660

effect to House economies

there

of both departments,

case

the

in

implications

were

subcommittee

reports that fur¬
economies in administrative

operating

available
Hence

trend

toward

—

.

Clothing, accessories, - shoes.
Jewelry, watches, luggage..;
Cleaning and repair services_Y>
Personal

17.5

1.8

30

Mousing
Rent

and' imputed
and

Household

Household

rfifltYJ^--'

lighting supplies...;
utilities...;

+

;

1.9 ;

—

;

13.9
'

0.2

2.5

+

0.1

2.3

+

1.5

16.7

9.5

+

1.0

.1.8

+

0.3

•

0.7

1.7

0.2

2.0

+

1.1

+:

1.3

Y

:

0.2

—

0.7

+

0.2
0.6

—

6.4

—

0.8

—

In

entitled

+

—

13.8

'/

1.3

+

—

2.2

0.2

—

short, except for the item
"contingencies, including
international affairs and finance,"
.

2.6

0.3

1.3

,6.0

—

184)

0.7

.—

—

Y

13.2

Y

0.1

—

8.2

;/

,15.9

0.2

.Y. 0.1

2.7

•

5.0

—-

:+

18.0

;

1.6

:

Y—- o.'i'T

2.5

J

J8J)

,,

___!

7.6

;

Sickners,

and

Personal

death

expenses.^

...

and

<•

amusements....^.

Commodities

Social-cultural

....

activities

..w-YY'

it

possible to maintain an
adequate defense program, on the
standards set by the Congress, at
expenditure of $5,500 million
the War Department: and of

an

for

million for the Navy

$3,500

partment.

"

/

De¬

•

V

intended to weaken or

sense

no

•

economy

made
in

Y

recommendations
by the subcommittees were

The

impair the defense establishment.
me emphasize again that they
were
aimed simply
at the low
order of administrative practices
Let

prevailing,-and at the excessive
personnel. The War Department,
for % example,
is carrying, ? this

budget for 1949,: is substan¬
tially the budget which the Housa
would have set up for 1948. It is
an indication of the kind of spend¬

0.2

3.6

+

0.5

:

15.0

Y
r'

6.3

0.2

+

3.2

+

1.9

5.7

+

1.0

3.6

+

0.3

'•

}).3

+

0.4

8.8

6.8

+

0.2

6.5

2.5

+

0.2

2.3

8.3

+

0.3

2.7

+

0.1

5.6

+

0.2

4.6

;—

0.8

4,5

+

0.4

4.3

+

0.2

143
or

from

capita

per

Y
'

7.2

5.0
5.5

:

,

3.2

2.1
0.7

ing reduction that would be pos¬

0.8

sible

1.3

+

0.6

+

0.8

~

if

of

all

tions made

+

by the subcommittees

0.1

ness

methods and greater

8.6

—

6.4 Y

—

2.2

—

0.3

5.8

—

ing

efficiency

2.2

—

0.2

Y

3.6
;

;Y

—-

3.9

—

and

for
net

Table

2

13.4;

131.5

and

estimated

an

corresponding sales in

served.

,

We have accepted the data

2.2
0.4

civilian employee for
two men in uniform. During

every

the

the ratio

war

civilian

was one

have

been

kind

of

established

automobile

purchases

purchases: of

used

are

cars;

70%
the

on

—30.0

We

popu-

logic

of

total'purchases

remaining

.30%

of

is

new

pas-

allocated

not

a

the

contend,

before you. We are

to

purchases.

do

for

as

1949

budget.

did the

nor

ever,

satisfied, how¬

that it is possible to operate

the Federal services in the fiscal
The series P bonds

Halsey, Stuart Offers

are

year

redeem¬

1.949 for no'

bUlion.tY

more

than $31

Y'"'J,Y yy;1:: "V:
ranging from 106%
to ;100% and through the
Let me give you some specific
sinking
or »' improvement
fund iat. prices 'instances-of the kind of recom¬
mendation
scaled from 102.92% to 100%.
toward
greater effi¬
■
The company, an operating sub¬ ciency and .economy that enter
sidiary of New England Public in this story of the 1949 budget.
These
points,
incidentally, pre
Service Co., is primarily an elec¬
tric utility operating wholly with¬ continued in the full report on
the budget study as approved by
in 'Maine. Its distribution
system
the Government Spending Com¬
serves
about
187,000
domestic,
able at prices

''

.

Central Maine Bonds
•:

Halsey, Stuart & Co. Inc. offered

to

the

public

Dec.

10

$4,000,000

Central Maine Power Co. first and

^general mortgage bonds/ series P
■3%.%, due Nov.,1, 1977 at 102.&1%
and

accrued

won

award

interest.

of the

bonds at corri-

Ypetitive sale Dec. 9
102.0299.

firm

The

on

bid

its

;

;

6f
,

Net
.new

proceeds from the sale of
bonds will be used ot reduce

outstanding bank indebtedness in-

,

.

commercial,

industrial,

agricul¬

tural and municipal customers

the central

the

state.

alid
This

in

mittee

and

.

the Board. A

copyj of

this

report is available to inter¬
ested members on request. ;
1;
.

sourthern part of

territory

has

population of about 560,000,

a

rep-

The large
eral budget
involve

elements of the Fed¬
which are likely! to

most discussion

and

con¬

tute

10%

the

of

This year

total.

curred

sinee

million of the
economy reduction recommended
for the War Department in 1948
was
to be achieved through re¬

total/ Nearly $300

ductions

in

"j"

v.,

..the
y

purchase

or

used

construction

property,/;




:

?

are
defense, veterans:
resenting1 approximately two- troversy
thirds of the total population of general government and foreign
aid.. You are entitled to know
of the state, and embraces the greater
something about the manner! in
V part-of its industry."
1: ; ■'
> which the amounts proposed 'for

,

Our

total

includes

1949

in

veterans

$6,500 million for

of

$3,200

million for readjustment benefits.

if

Even

increase

some

assume

we

in the cost of

pensions, it is clear
that shortly thereafter the cost of
the veterans program -should fall
below $4,000 million, unless some
new
device
for spending addi- '
is foisted upon

tional billions

Government.

General

us,

The

ex¬

penditures under this heading in¬
legislative and judicial ac¬

tivities,
executive
management
-. control,
the
Government's
contribution to Civil Service re¬

and

tirement funds,
cial

such

war,

and various spe¬

growing out of the

programs

disposal of surplus

as

property.
The record of the spending un¬
this function is

der

a good guide
should costdn the fu¬

to what it

this

ture.

In

from

the

respect, it ; differs
postwar cost of; other
services, some of which must now
be carried at levels having no re¬
lation

whatever

cost.

It is

refer

to

the

terest

on

the

their

to

prewar

futile, for example, to
expenditure for

public debt,

or

in¬

to the

cost of defense in
to

1940, as guides'
presentv obligations for

our

these services.

But it is proper to

in the case
the general overhead function
which is called "General Govern-the

consider

record

of

ment."

The

figures for recent
as follows:
%

have been

years

.General j

y

.

(•

Year

YJYGovt.1

:

<

''

/

which

was

'number

establishments,
large

directed

Navy; Department,
found to be operating

the

excessive

an

were

shore

of

holding

and

too

proportion of its enlisted
in training
status

a

personnel
ashore.

The

Naval

-«

1,500

1948
Y

(estimated)

/

1,240 Y

principal

The

.

reason ,;

the

for

is the inclusion of the heavy cost
of the War Assets Administration
and

some

We

should

Y. plus

YY/

-

.

Similar criticisms

against

-

1947

other similar

Bureau

x

of

agencies.

thankful

be

civ|lian and. military job of giving,

personnel.'

away

the

that

our war

sur¬

at about 5 to 10 cents on the

dollar of

original cost will shortly
completed/for the cost of this
selling job
has
been

be

so-called

about 30%

of the sales value

ceived.

Our

fensible

in

estimate

re¬

of

$1,000
million for 1949 is eminently de¬
view

of

the

historic

trend of the basic general

services,
operating
some and
in view of the anticipated
plants at only 3% of capacity, and termination of the special agencies
only one plant in excess of 50% which are still operating in this
capacity in March, 1947.
field.
Ordance

was ;

;Y

,

Veterans' Pensions and Benefits.

The
of

two

large items

veteran

the

and

in the cost
pensions
readjustment benefits.
care

is

and

the

are

The first of these is

destined

already, large
still

increase

to

further. The second is large now,
it

but

should

off rapidly
of time and the
termination of the privileges ac¬
taper

with the passage

corded. In fact, it is possible
our

estimate of the

that

cost of read¬

justment benefits in 1949 is some¬
what on the high side. The Vet¬
erans'
cized
move

Administration

was

criti¬

3harply for its failure /to
more
rapidly toward effi¬

cient administration by the House

subcommittee. Some of the points
made
■

were

the following:

Y

<

Contingencies,
ternational
Our

Affairs

maximum

Y

Including
figure

In¬

Finance.

and

of

$4,000

million for this function is based
the

pattern set for this cate¬
of expenditures exclusive of
the British loan" since the termi¬

on

gory

nation of hostilities.

•'•'

Y/

;

emphasize
steps, • if the Fed¬

Y In conclusion, let me
the next step or

eral Budget

is to be further sub¬

stantially reduced., This is the re¬
duction of the area of the Federal
servicesi. I have already indicated
one

case

aspect of this problem in the
of the grants; and subsidies*

But that is only one phase of

the
The Federal ad-i
organization .is stity
the swollen, stage to whieh it

larger problem.
ministrative
in

(1) No proper central control of was
expanded during thie war and
personnel. The available central
the prewar period of continuous
office records revealed a dispro¬
emergency.
I cannot agree that
portionate
assignment
of ; per¬ all of the
agencies- created were
sonnel to branch offices, also to
really necessary, even for the vig¬
the

regional offices^ and

ministrative

Sept.-i l,. -1947, I the
-wei e

insurance

to

of the immense increase in 1947 and 1948

the officers constitute 13%

and

of ad¬

maintenance

-

proceeds, of which

1,-

had

policies at the time of the hear¬
ings.
>' v.", ■ v
/

-

strength .of the new
Army should consti¬

the;-officer
peace time

„

-

than

1944

this

on

reasonable

Congressional
committees,
that
everything possible in the way of
greater efficiency and economy
has been reflected in the figures

YY

farms,

;

that

allocated

been

not

More

payments

Y
'•<,!
(Million)
YYYyYYY $808
passed / setting s the
size / of the
1945.1Y/YYY-Y
' 789 - Y
Army it was testified by high1946
Y- Y Y Y -Z
Y Y 989Yr
ranking military authorities that
for six soldiers: When the bill was

1.8

0.2

1946.

foods raised

to

were

operat¬
be ob¬

0.1

,

minus the

figures

cars

in

recommenda¬

'

,

148.1

listed

the

for the observance of better busi¬

"

0.8

—

—

13.7

Y

O.l

_

2.6

.

6.6

;*Y 0.1
'

2.9

4"

expenditures

millions.

^Includes government purchases and
^The

1.3

164,4

'Derived

tPlus

3.1

+

Y.

records.

premium

200,000

year,, one

cur

:

0.2

framework

Totals

latlon of

+

3.8

insurance

Recreation.

Sports

^YY Y
insurance......

death,

Sickness

v

6.0

.".

7.2

4.!>

7.5

.

upkeep & operation

carrires

0.2

+

17.3

§ Automobiles, accessories, parts

business

0.3

+

Y«.Y/

expenses

Automobile

senger

+

3.0

equipment.
appliances........

Transportation

;

Y ■Y 1.7

'

Service

.

i:i

0.3

lfti7

Furniture and

Public

,

16,9

6.4
+

14.2
,

operation.

Mechanical

4.4

—

1.6
'

care,Y*:UY

Fuel

—

Duplication of work and
and a bad mix-up in

(5)

peronnel,

insurance

peace¬

a

establishment,

defense

time

sought.
that with a

concluded

we

were

expenses

should. be

and

'

—

(4) Excessive construction costs.

clude
In the

should be

ports of the several subcommittes
cf the House Committee contain

$4,037

476

econ¬

?recommendafcioivs_ Y„
Expenditures in 1948 giving

House Commitee

Appropriations drove hard to
produce a, set of*bills that would
come close to this ceiling. The re¬

$6,061

omy

continued

on

the reductions

subcommittee

Navy
Dept.

Dept.

1947__

of Aug.,

the
the

discussions on
appropriation bills,
and

members1 of the

The next two to three years are

per

hints

War

expenditures

of

as

House

given out as to the

probable budget requests for 1949
indicate a total of some $34 bil¬

the frequent as¬
sumption that we will soon return
to the prewar pattern of consump¬
tion
expenditures seems to
us
clearly a fallacy—and a dangerous
fallacy insofar ,;as it influences
business plans.
However, unless
consumption should fall off con¬
siderably more than 10%, which
we see
no reason to expect, the
outlook does not appear alarming.

per

preliminary

Such

that have been

:

In

The assumed 10% decline would
carry

billion.

follows:

as

(In millions)

,

in real estate and

economy

construction.

proposed

our

expenditure for defense was ap¬
proached was expressed by the
House Subcommittee on the War

domestic politics or inter¬ expenditures s i n k to 10% be¬
10% decline in low the 1946 level, further losses
consumption expenditures -is the b,y foods, restaurant service, cloth¬
worst contingency that now looks
ing and jewelry are in prospect
plausible; and it is quite reason¬ and sales of household furniture,
able to hope that recovery will
equipment and appliances may be
start from a considerably higher
expected to slip somewhat below
tions,

national affairs, a

which

from

view

porting material entering into it
has been derived from the recom¬ Department bill, namely/that the
mendations of the Appropriations trend is toward a peacetime Army.
Committees of the Congress. You The Congress has enacted legisla¬
will recall that the Joint Legis¬ tion setting the ultimate size of
lative Committee on the budget the armed forces in the Army at

22.0%,

_

and

among

are

the most stable of the
ments in

10.5%

realistic

a

and

National Defense. The point of

regard this

one. The
basis of that view is that the sup¬
as

in our maximum

purposes

budget for 1949 were determined.

more.

or

have said that we

budget

spendings is maintained, moderate
declines in foods and beverages
and
in
restaurant
service
and
rather drastic declines in clothing

do not meas¬
severity of the

relative

the

I

18.0%

recession in consumption)

These percentages
ure

billion

.

6.5%

—rv-—

of $35

settling quietly for a total

12.0%

(a

these

(Continued from page 15)

,

of decline of per capita consumption expenditures (figured
1947 dollars) in preceding lapses from relatively high levels:

Thursday, December 11, 1947

FINANCIAL CHRONICLE

&

personnel at hospitals.

for

(2)
over
-

A

lack

supplies:

of

\

proper

control

v

(3> Delay and' lack of efficiency

orous

prosecution* of the war or-

the handling of other actual emer¬

gencies/ Certainly, at the present
time, many of them are no longer
needed.
If they are not promptly
liquidated, every effort will
the bureaucrats -to

made- by.-,

be

v

tr -V

;■'>

Volume; 166 .'Number 4654.
activities

new

color

some

that

of

COMMERCIAL

It will be

;

finning work
The special
by
former
President Hoover is dealing with

itarian temptors and make of them

this

own

1

.

matter, and it needs the utr
that we can give, as

(Continued from first page)

national

a

As

normal

a

Before

peacetime

period,

not

our

best hope of realizing such goals
is by a contraction of the scope
of the Federal organization.
Forecasts of the

outlook

revenue

in

that the Federal net receipts
year will be no greater
the

President's

most

payment

after
tax

which

is

giving

effect

reduction,

-

estimated

to

is: Is

to have
are

budget of

a

up your

in

would not have taken
time and ours in talking

about it.

But it is realizable only

The thing about

their

he

is

meek and cautious when he feels

back

that

his

of him.

constituents

If you

Congressman

want

your

you

stand.

him

letting

urging
show

letter

by

give

don't

economy,
away

also

h*

telegram

or

the
for

asking

v

or

city, or State.

.

V Stockholders

of

being offered

new

a

par

are

issue of 662,-

company's $2.50

out

the

on

basis

shares owned

|
;

The'First

two

Boston ; Corp.

heads

a

nationwide

group of investment
banking firms which is under¬
writing the offering to stockhold¬
The

subscription period

pires at 3
;

p.m. on

from

Proceeds

estimated

Dec. 22. >
the : issue

surance

as

the American In¬

Group,

with

and

Russia

sunposing that
and elsewhere
social and

half

a

has

had

ago,

additional

capital funds, enabling the group
to maintain its relative position in
the expanding field of fire and
casualty insurance.

;

eco-

about

benefit

of

of

From all this

experience

that.

It

is

one

of

often doing

are

Russian

leadership.

communism

we

Europe the tendency
than

more

and

of its.

across

marked

the

favorite
>

quite with¬
In our own

so

and

must

conclude

successors

the

that

there

is

a; very

Atlantic.

United

States.

Indeed

new-fangled ideas of the New Deal
apoear

How

to have been imported from
this, straying away from

far

written- by the
groupi 'have increased from $18,170,411 da; 1937 to $53,123 729 in
.

;
:

consolidated net premiums

The current

12

Now. what is to be said in

months

the

33.5%.

was

financing, when

com-

•pleted, is expected to increase the
ratio to about 49.2%.

...

,

;

;>

-

Richard Knight Dead

Craigmyle. Pinney & Co.,
^members of the New York Stock
Exchange, died at the age of 72.

political

that

we

may

this connection
~

beneficiaries

but little interested in
in

ager of




the

In

of

light of these facts of
succeed in our political
let

it

our

he

observed

/

some

our

instances at least

ing those

largess

are

often

concepts of democracy, and
are

actively at work violat-

concepts. > In the second place, we are
ouite obviously rank outsiders in the eyes of
many of
the

very

peoples of these countries, and,

strings which

material sacrifice,

any

we

sup-

,

;

.

,

.

/
(Continued from page 5)
;
•'
American trust has now become a
thoroughly respectable and useful,
if somewhat less
glamorous,;avenue of investment.
;
..

we

may

r~

.

Potentially Misleading Deductions From Regulation
There has been considerable
danger of importantly fallacious con¬
clusions being drawn
by the public from the SEC's revelations of
past capital shrinkages* of former...

.

-

»

the desirable pattern for our
younger,

movement,

proves

of

the fallacy

expecting extraordinary operating success to result directly
the insurance of good ethical practice. ,1 /
/
"r;r' i
.

Ij-f
and

from
•
v'.:

Abortive British Results
V/.1.For the record of operating results chalked up
by experienced
ethical

British

management

over

a

number

of

years

has

been

surprisingly bad. The British trusts have not managed, capital any
more successfully than has the
average lay investor.
During the
post-1929 deflation, heavy accepted capital losses, dividend reduct.ons and shrinkages in asset values were
widely suffered. " By 1933
54

out

the 50

197

of

trusts

(had passed their

dividends, and of
able to pay any divi¬
1933.
Between 1928 and 1932, even the regular
(excluding capital losses) fell by 33% against a
in industrial earnings of
only 26% and it was
s:'x important reorganizations.
Almost 25% of

trusts formed in

dends whatever

in

investment

income

concurrent

decline

necessary

effect

to

The

value

1928-29

common

were

their preference dividends during the period.
of the 29 companies which published

earn

cf the

only 28

assets

their "hidden reserves" in both

1929 and 1933 fell from 22% - above,
value during that interval; arii In dnlv two
cases did the portfolio value remain "above water."
By 1933, the
aggregate of previously accumulated reserves was completely wiped
out; the preferred shares of 44 cf the 126 leading companies being

to

22%

below,

book

uncovered by a deficiency of assets averaging 25%;
During the
entire period from 1929 onward the record of,asset conservation made

by the British trusts in comparison with the course of security prices
in general was distinctly unfavorable. ! This is seen
by a comparison
of

the

of

valuation

of the 40 leading trusts, adjusted for
compared with general bond-stock index
weighted to correspond to the trusts' equivajently proportional hold¬
ings of bonds and preference shares.
:'
4 ' '
course

alterations

in

capital,

d:
In the categories both of investment income related to industrial
earnings and capital conservation related• to the)course of their
respective markets, the data clearly shdw that ever since 1929 the
American trust management outperformed the British.
The

writer

had

the

England the reports of
Even

then

showed

a

the

opportunity of examining at first-hand in

some

valuation

of

trusts,for their operations during 1938.
their-assets at current market prices

deficiency below book values in ;76 of the 100

those 76 companies,

54 showed their

common

stock

cases.

Of

to be not fully

covered; that is, that previously accumulated reserves plus the pre¬
vious year's undistributed earnings were insufficient to cover the

d;screoancy

between

capital.

■

their

assets'

market

value

and

their

share

that

*

;

Richard Knight, Assistant Man¬

likelihood

bribery?

sometimes suggested,

as

,

written': during
the
endedbon that idate

much wealth that

ply them with practically any of the things they refuse
provide for themselves, but if accepting such largess is likely to involve them in some future war of
the Titans, they lose some of their
enthusiasm.
It
would appear that this world situation is not as
simple

;

Net' premiums

year; to

so

to

the trusts failed to

throughout the world. In
in many countries at - least

•: appears
than in the

of the

one

chose, without

we

,

having

.

Let their

anything worthy of the name of democracy, free enterprise
and all the rest is
likely to go in Europe before the pendulum starts upon its return
journey it would, of course, be
impossible to say.
It may go a long way..
Obviously,
the r 12 months ended Sept. 30,
1947-.
During the past ten years however, this movement may or may not come under the
the ratio rof consolidated capital dominance
of Russia.
It often (has its springs in other
andi surplus • at the year-end to
quarters.
It is in many instances either indigenous or else
consolidated net premiums written
has become
thoroughly acclimated. ; Russia in her prose¬
during the year ranged from a
nose
into the domestic
Jhigh of 78.2% in 1938 to a low of lyting is ^certainly sticking her
46.5-% in 1946. The ratio of such affairs of other countries/but in the.circumstances it obvi¬
capital funds on Sept. 30 of this
ously can not be said that we are free from the same taint.
/

could if

us as

'

drift toward "the left",

more

no

malpractice, together with the
subsequent imposition of "reform'' legislation.
-.u ".
:
.v.-.
The lay'investor should not
have the impression that there is
a
cause-and-effect relationship between the d
sappointing record of
achievement during the depression and unethical
practice, or that
hence the reform legislation
gives a' "government guarantee" of
either speculative profitability or investment
safety.
Analysis of the actual management performance of the British
trusts, whose revered tradition of good practice has been held out as

Leftward Drift

be

over-run

.

is entirely Rus¬

extended

fishing in troubled waters.

v

to

to "save"

a

■■

definite

we are so eager

have; been
repeatedly

.....

they in¬

Russia, are them¬
selves far. more frequently than not
urging policies
;here in the United States which in substance, if not J ;
in fornv are r crassly alien to American tradition.

are

be; approximately
$8,407,176. They will provide the
company and its three subsidi¬

communism

;Thtey regard

regimes undef their owri thumbs

traditions, and

denunciation

ex¬

to

aries, known

evident that

country,.even those elements in the population, and.
certain public
figures, who are most; vigorous in

of one new

kt the close of business on Dec. 1.

share for each

ers.

the

value capital stock at $13 per

share,

see

that

American

Russian

desire to become crushed between the

virtually the whole world constitutes
troubled waters.
Peoples everywhere in the world
are turning
to leaders and to programs anathema to

American/In¬

Newark, N. J.,

504 shares of the

is

not make the mistake of

us

mistake

is

the

tyranny < imposed within
another , clique: or element in the

by

inspired.

now

interference

has

and west of them.

that they

way,

pastimes of that country—as it was and doubtless will
% be again of a good many other nations. The difference

-

Co: of

in

?

Offered at $13 per Sh.
surance

It

constituted

this country a century

no

-

slow, in crying out about

or

nomic organization radically different from that
wfyich
the Constitution of the United States established in

be

not been

\

as

is

for centuries in

;

American Ins. Stock

actively under

.or
movement
in
Europe
throughout the world toward forms of

sian

Federal money in your dis¬

more

trict,

him

,

re-

by opposing armies during the past quarter of a
century
more, particularly during the past decade.
Even those
elements in their population which have no
sympathy with
communism,™ or with Russian schemes, likewise have no

'«

en¬

plague

have,

people

from

that the Soviets appear

this pdlrft
:

know where
And after having sent

strong

a

It

«

But let

; r

part in holding the budget down
$31 billion or less, you have the

of

who

suspicions

opposing forces east
They are sick unto death of war. They
reason
why they should become involved at some
later date in an armed
struggle between the United States
Active ";b.!• *'
and Russia.
./ - •
.'
:
1

Mussolini.

or

the

.v

,

are

to

job

same

arouse

,/y - , \
Not So Simple '
<
.•
Another aspect of all this
appears to have escaped gen¬
eral notice.
Most of the

likewise evident that they intend;- if
they j ean (probably short of war) to underwrite similar
regimes in many if not all of the other countries of Europe
and probably in
parts of China and elsewhere in Asia.

Senator to do his

or

33

'

interested in such doctrinal
proselytism than

borders

own

population.

that he is standing alone, but he
is full of
tiger milk when he

knows

tfi *rra^

in matters
purely European.
advantage not only of being on the
ground in a well organized way, but has the
advantage
of being
European^—or at all events half-European.

charge along their western borderland are prepared to
go to whatever length may be necessary to achieve that
end.
In this they, in one
sense, are copying the tactics
of others who have
gone before them, including their own

noted

that

the

course,

such program

Hitler

was

predecessors

is

find ourselves

now

against

slow, indeed have

Russia

in

member

a

more

of Congress which all of us have

times

war"

tend to have communistic

if the Congress acts courageously
in appropriating the money for

many

"cold

a

some

far

ever

or we

1949.

but Russian imperialism.- In
have just fought a bloody

The Russians

.American

v

we

tSoviets

$31 billion really possible for the
fiscal year 1949?
We believe that

is,

told that

./■;;It must be admitted, of

The big question in the minds

of most of you

be

slightly different form, imposition of which from with¬
out Js now threatened in
many
if not most of the
countries of Europe and Asia.
■

.

tax¬

save

that is feared

are

against totalitarianism and

gaged

program,

to

$7 billion.

payers some

it

we

war

recent

namely $41 billion, there would be
a
surplus of $3 billion for debt
NAM's

our

proceeding to consideration of these as-"
may be well to observe that the first is
simple as it may seem.
We have given it

so

itarianism

fine,

estimate of receipts for fiscal 1948,

L;

quite

that

than

rampart in

expression in about the official form, but in the minds
of many Americans—and if we
may say so, we sus¬
pect in the minds of officialdom—it is not simply total-

for 1949 are necessarily uncertain
at this itme.
If we assume how¬
ever,

rtffp 3rif,^l(Si'k

(2397)

Russian.

If either of these

«

sumptions it

further into

move

sort of

a

„

Budget goal of $20

we

<J^V iWji

of
is well known, long
entrenched themselves
among the discontented in all
or
nearly all these countries, and their minions will not

•

moving tide of autho¬
premises is seriously defec¬
tive, then the whole case for the larger part of our
foreign
aid program falls to the
ground.
;V
;;,
/;

or¬

In years past we have
talked about, and the NAM Board
of Directors has approved, longbillion.

y

self-defense against this'onward

ritarianism.

ganization.

range Federal

-JN«4*rtirt;

.

(of many of the recipients whd!
naturally desire'to
main as free of American
domination as they do

credibly large gifts, entice these peoples from'their, total¬

most support

as

•

.

munificent gifts will "certainly

,

headed

individuals and

,11J »

*

FINANCIAL CHRONICLE

V#

an¬

for idle hands to do,
commission

&

W' rWHV Mj-yii m&ViWi 3*

will

of Satan

case

-vuw '

."/v^

provide
justification/, for

their continuance.
other

THE

1 VI- O-'P'M

accordingly, any
be disposed to place on these

So we see that the Investment Company has fully come of
age in
the United States, and that the American trust is to be considered as
an institution well able to stand on its own feet—with its individual
characteristics—as a long-tern* "tool? for the advantageous use of the

prudent long-term investor.,,
;iUy)
v
And in the selection of particular investment companies, as with
the general run of securities but more easily, our thorough investor
,

can

a

only

various

tests

of

comparative

valuation.
1

.

and

absolute

quantitative

.

34

THE COMMERCIAL

(2398)

;

FINANCIAL. CHRONICLE

&

Thursday; December 11,: 1947

I.I^.JlUiMllilUlliipiiM'nuiUiiili,.

Now that it broke, the conclu¬
are lower prices ahead

Tomorrow's

*

%

(Continued from page 7)

I haven't figurged out where to put stops
in this market, but I don't

-

==By WALTER

r

.

WHYTEss

Present lows considered

'■'■

cheap

♦

*

*

I don't pretend to

bearish

widespread

know if

The dangers of an automa¬ grief has been anticipated to
tic market I pointed to last believe that the next impor¬
were

than

I

confirmed sooner tant
week's

last

from

*

column,

childlike

almost

has been

in

can

cheap. They

simplicity:

its

I

but

It

better.

or

was easy

Steel

get cheaper
the lows.
96 or so, U. S.

may

can't

Buy them at 178; sell them Bethlehem
at 184

rthe
are

based/. upon

market,. In addition, some bankers
The monetary authorities, have
have
been/granLng
consumer
made
several
cautious
loans;: withbqt adequate analysis
noves in the direction of restrainof the: risks and pitfalls of this
ng the volume of bank credit and
type of lending,
7:.
some additional
moves are gener¬

ally anticipated. As

we

Jhese measures and

tion of more to

come

At the end of June of this year
the average country member bank
had
loans plus securities other

all know,

the expecta¬
have already

in fairly sharp declines than governments equal to more
than four times its total capital
prices for government securi¬
accounts, whereas the ratio at th(
ties.
war was
less thar
No one can say for sure just end ; of
three times. As of right now, this
how far- the policy of monetary
ratio is rapidly approaching five
restraint may be carried or pre¬
toes; total capital accounts.
If
cisely what the effects will be

that.

pick

at

around

current

No

member two

More next

184.

The

*

*

same

-

column I

quote

from above also warned that
such
and

procedure was explosive
could spray traders with

the

*

*

*

[The

views

Thursday.
—Walter

Whyte

expressed

in

thu

article do not necessarily at an%
time coincide with those of the
Chronicle.

They are presented as
those of the author only.)

////■;■ .■/.■

William J. Collins & Co.

178

figure had a large
following. If there is any
question of it, it could be dis¬
pelled by reading most of the
market letters. So what hap¬

pened? Last Friday and Sat¬
urday the mystical 178 figure

(Special

to

The

Financial

PORTLAND,

Chronicle)

ORE.—Donald

P.

Hemingway, for many years with
&
Hardgrove and prior
thereto a principal of Hemingway
k Carpenter, has become associ¬
Ferris

ated

with

William

J.

Collins

&

Co., U. S. National Bank Building.

broken with the indus¬

Was

slipping to around 175. Theron Conrad, Member of
The reaction was prompt. The Phila. Stock
Exchange
bearishness, a I ways latent,
The investment firm of Theron
sprang to the surface and the D. Conrad & Co., Inc. has been
accepted

were

foregone

as a

conclusion.
*

*

*

-■■■'•In many a

previous column
Warnings have appeared
against following the obvious.
The general pessimism today
is a case in point. The 178

figure

was

broken. Practical¬

ly everybody who had

of

tering

technical

knowledge

a

smat¬

market

elected

to

Philadelphia

membership on the
Stock Exchange.

With its main office in Sunbury.
Pa., at 416 Market Street, the firm
maintains representatives in most
Eastern Pennsylvania sections.

the

the government bond

upon

ket.

present rate of loan expansion
continues for another six months:

mar¬

However,

we do know that
Government cannot possibly

Dean Harris in Lincoln

the .ratio

will

exceed

was

to

active

The

Financial

as an

a

individual dealer

With

Doerfler

has

chronicle)

MICH. —Harry
joined the staff

W. E. Hutton & Co.

/.•■■;:■■■

on

With Maxson Securities

Members

New York Stock Exchange

New York Curb Exchange

(Associate)

San Francisco Stock Exchange
Chicago Board, of Trade

New York S.N.Y.

14 Wall Street

Teletype NY 1-028

COrtlandt 7-4150

Private Wires to Principal
Son Francisco

Koaterey

—

—

Offices

Santa Barbara

Oakland

—

Sacramento

Fff«W




*

your earn¬

particularly

within

the

higher yields than
in the market today

next several

books at
available

are

short-term
Unless action is taken in

issues.

time, such a
fronted with
problem

on

bank

be

may

serious

a

con¬

earnings

year or two from now

a

be substantial

to

in

event oJ

the

banks which have tax¬

excess of . $?5,000
than to those whose income is less,
than
loss
ties

$25,000.

Also,

net

a

capital

resulting from sales of securi¬
is obviously more advanta¬

geous from a tax standpoint to the
extent that it offsets taxable in¬
come

in

of

excess

$25 000.

There

is

of

be

reasonable

,

w

to

con¬

therefore,

that yields on
government securities will prob¬

ably remain at relatively low lev¬
els

for some years to come.
On
the other hand, it is obvious that
no one can be
absolutely certain

to

as

what
will

the

be

level

of

number

a

interest
of

years

from now/ It goes without saying
that a. banker cannot for a mo¬

ing the market
portfolio.

stability

the

of

The

degree of market stability
will also
depend in part, of course, upon

needed for your account

your

liquidity requirements. What

may

be the extent of future fluc¬

tuations in your loans

The

deposits?
bank

will

and in

answer

depend

for

partly

your

/ :

The next group of

questions, as
you see, refer to your specific in¬
vestment policies and objectives.
The first two questions in this
group relate to the matter of ma¬
turity distribution.
■
;
'. :
;
Some persons talk about matur¬

your
upon

ment permit

ity

distribution

in

terms

of; the

the financial stability various - local
factors
that
you
of his bank to be jeopardized by alone are in a position to analyze:
betting too heavily on continued the composition of your deposits
low interest rates, ///,/'////•;-/ and the character of the territory

maturity of the portfolio.
Average maturity may at times be
a very
misleading figure. It does

On the other hand, even if
you
think interest rates are likely to

cash position, nor does it Indicate
the portion of the bank's liquid

ferm, to adopt

sense of

in

.

.

Question of
i An

that

extremely short

an

serve.

you

rise, it would not be conservative

banking, in the true

a

Depression

important question to bear

mind

meet

all

credit

in

is:

"Could

deserving
the

you. readily
demands for

of

event

a

severe

*rade

bonds,

Investment

policy

*or

payment, i This

caused

hard¬

ship to the community and put
the banking /profession under a
continued low

should provide protection against

possibility
rafes

of
as

of
public disfavor from
well as against cloud
which it has not entirely emerged
higher rates.
even today.
-

"Your Bank's Circumstances"

J
of

Maturity Distribution!;

The next group of ciuestions, as

/

•

If

can

this

should

occur

again,

all guess what the result

we

might

be: renewed agitation for the na¬
will see, is entitled: "Your.tionalization of the banking sysBank's
Circumstances."
Unless
teiii; Bankers must make sure that
vou adhere to some rigid formula
this does not happen. In the event
por
vou

your

enVre portfolio, the com-

oosifion of your bond account will of another depression, every bank
should be in a position to meet all
depend to a great extent upon
creditworthy - requestst * for < loans
vour analysis of the circumstances
from its customers.
of your particular bank,
v*
''
,

-

average

not

take

into account the

bank's

assets that may be held against
large temporary deposits, such as
a big war loan account.
For this
reason, the matter of maturity

distribution
down

into

should
at

;

least

be

broken

two ;

parts:

(1) the amount of cash plus very
short - term
securities
required

against
possible
demands
for
funds by borrowers and depositors
oyer
the next. year or so, and
(2) th e balance of the portfolio.
As indicated, earlier, a substantial
oart

of

the

folio should
or.

balance

of

consist of

the

port¬

issues due

callable, within about ten years.
extent
to
which. holdings

>

The

should

be

concentrated

in

the

shorter issues, say due within fiveshould depend' upon your
Judgment ?s to future trends, in
your bank's loans
and deposits./
years,

Other things being equal, it may
>e desirable to have so^e conc6nration

in

952.. : ^

issues

callable

aroyhd

;;^./■ Aij.

..

Holdings of long-term securi;ies, for. the average bank, should
ae
limited tp. amounts that can.
SOUTH BEND, IND. — George
be regarded as permanent irivest-:
Stevens has been added to the
there be in your assets in relation position to answer the next/ques¬
ments to be held to maturity. The
staff of Maxson Securities Co., 222
tion on the list: "Is a very high
to the protection afforded by your
determination of a suitable amount;
East Irvington Avenue.
capital accounts?" In other words, pegreel of .market- /stability re¬ of long-term securities' will
/in¬
quired for all your investments or
how strong is the financial
posi¬ are
volve consideration of the volume
you - justified - in ? regarding
tion of your bank today and-how
of your savings deposits, the sizeJoins H. 0. Peet Staff
earnings as an important-consider¬
vulnerable
might
your " assets
and composition of your mortgage
(Special ,to Twe Financial Chronicle)
ation in connection with your in¬
prove to be under adverse busi¬
vestment policy?" Earnings should portfolio and also the; trend of
OMAHA, NEB. — Walter R. ness and bond market conditions?
not. be a consideration in invest¬ your total
mortgages.
There- is
Bowen has been added to the staff
As we all know, the volume of
of H.
O. Peet & Co., Farnam bank loans has been
ment policy unless your bank is much to be said for a policy of
expanding
Building.
at a record rate during the past in a
strong financial position and reducing your holdings of long(Special to The Financial Chronicle)

"

cost

may

clude,

Stoetzer, Faulkner

Building, members of the De¬
troit Stock
Exchange.
He was
oreviously with Keane & Co. and

Schwabacher & Co.

This is

also the differential / between
a severe business depression.
servicing it are
the 25% capital gains tax and the
actors
that
cannot
be
This obviously has a very di¬
ignored
higher tax rates on income, which
in determining monetary policy, rect and vital bearing upon in¬
may be a point to keep in mind
even
under existing
conditions. vestment policy. Unless a bank
in considering
portfolio /adjust¬
Finally,
when
the
inflationary has a better-than-average capita?
ments,
particularly
for
banks
dangers have subsided, it is to be ratio; then to the extent that the
which expect to be in the 53% tax
-\xpectei that low interest rates degree of risk in its loan port¬
bracket
for
a
number
of
for Treasury borrowing will be folio increases, the risk in the in¬
years.
that
the factor of overshadowing im¬ vestment portfolio should be re¬ Many bankers have found
they
can effect substantial savings
portance in the minds of the mon¬ duced, ;; Second grade securities
by estimating their tax position
etary authorities, regardless of should be eliminated and holdings
well in advance rather than waitr
what administration happens to of long-term maturities, especially
ing until the year is over before
be in power.
corporates and municipals, should
computing theif taxes,
v / 1' /
oe cut down, thereby strengthen¬
It
the

the possibility of

Stoetzer, Faulkner & Co.. Penob¬

.

happen to

may

true if your investment portfolio
contains large amounts of securi¬

?ourse, to

mterest

scot

Orders Executed

what

ings position.

able income in

of-thumb as to * what the ratk
would be a disaster of the
should be between a bank's risl
magnitude
in
the
fight
against inflation. Moreover, it is assets and its capital accounts
widely recognized that credit re¬ Nevertheless, the foregoing fig¬
strictive measures, unless carried ures do suggest that some bank?

flie

partner in Harris & Lively.

DETROIT,

Pacific Coast Exchanges

your bank's earnings?"
An
attempt should be made to look
ahead, not just for six monhts or
so, but for several years, to see;

first

Chronicle)

in Lincoln, and prior thereto was

(Special to The Financial

Securities

for

five

earning capacity, the number one depression?" During 1930-33 manv
LINCOLN, ILL.—Dean J. Har¬ essential of any. business. Losses banks were not able to meet all
ris
is resuming the
investment ef income are just as serious, deserving demands for credit. Af
business from office in the Grie- sometimes,
more
serious,
than a matter of fact, many loans which
sheim Building.
depreciation
on
high- were basically sound were called
In the past he market
(8peclal

.

Pacific Coast

If this is the case for your

.

institution, the next question, ob¬
viously, is: "What is .the outlook

ment

nvestment pos'tion if such a pol¬
icy might endanger your bank's

watching it.

was

mentsj

g

,

ties due

rates

trials

forecasts of immediate doom

'in

.

Hemingway With y

little doubt that

is

-

years which are on your

?nd

losses.
There

are" jus¬
i y i ti g Considerable
weight to their earnings require-'

tified

n

that the size of the national debt

points—-178 and

*

.

Manjr banks, however/

♦esulted

prices
poring over bal¬ and the rest at
already have arelatively high
Friday's and to disruptive extremes, are ex¬ ratio
and that the degree of risk
ance sheets; no listening to
tremely weak medicine in trying
Saturday's lows look attrac¬ Lo combat inflation. We also know in the loan portfolio might prove
"inside information," just re¬
tive.
as

your liquidity requirements
are/adequately • covered. / f *77

when these high-yielding bonds
times mature. / 777/: - 7'v;^v7/>':
the
the bills. So I'll leave them
total capital accounts by a sub¬
afford to have prices decline to a
for somebody else.
stantial margin. That, gentlemen
•^/;/7;' Question of Taxes
• /
point where holders of $50 billion
In connection with your earn¬
would be a higher ratio than ex¬
worth of savings bonds will be¬
isted just prior to the 1931-33 ings position, taxes are
obviously
come disturbed and start flooding
3n important factor.
/.
Tax exempt
Right now I think the the Treasury with demands for collapse.
ncome is far more
Obviously there is no good ruleimportant, of
steels, oils and coppers are cash redemption. Such a develop¬

the past

for

pattern

few weeks

I

*

*

*

want to know why,
only guess. Arid my
guess is probably no better
than yours,
may
even
be
wqrse. But guesses don't pay

back to a market
fundamental that if enough
people recognize a certain
signal the chances are that
the
signal
is completely
meaningless. Or worse still,
it may be entirely erroneous."
*

*

If you

"This goes

The

will be up.

move

quote

To

expected.

half, particularly, dur-? unless

ing recent months.
Many of
loans that have been rt ade

already

stocks will go lower. But I
think that enough potential

ness.

week

year and a

ties ought to adopt a severely re¬
strictive credit policy in order to

inflated, - valuations
combat the forces of inflation. If
such a policy were to be adopted, and many of the. businesses which
have to be hit on the head
it would mean higher yields.mid have borrowed money are making
when I see and hear the fu¬ lower
prices - for government se¬ gqod profits today only because
they are operating.-in a seller's
ture forecast so unanimously. curities.
*
/
/•
'

Whyte

Says—
despite

*

I don't agree.

Markets
Waller

A BanklnvestmentPortfolio

sions

Having studied your safety po¬
The first and obviously the most
sition and your liauidity require¬
vital question is "How much risk,
of depreciation and losses might ments; you Should now be in s

,

Volume

■1.

'

,terrn

*•

166

bends

loans

Number 4654

ras

mortgage

your

increase.

THE

maturity distribution o*

<

ties
'5

:

are

basis

;

computed

in

the

the

cn

of

case

government

bonds; that- have
optional
call
dates.' The figures that appear in
the
r

-i

'

•

/

-

ures

•

'

dates

"

/

ba*ed

are

is

of actual

use

doubtless,more

but

the

call

of

use

be

considerably more
realistic, esoec'ally in the case of
the partially tax exempt issues.

.

•

The

maturity dates
conservat've

i.,r

/

n

based upon actual

are

maturity dates.

-

<

Bullet

call dates. wherea> the figgiven in the Federal Reserve

call reports

.

.

Treasury

upon

,

.

may

elinriinated

entirety.

Eliminating Undesirable Holdings

with

Quality of Investments

objectives

your

'

and

standards with respect to the

V quality of

-

investments? That
is nrobabiy the easiest nuest'on in

v-'vl-

"this entire Pst.

;

;

your

:

side

there

is

little

now.

If

the

afford the risk,
choice but to sell

risk

in

these

unde-

sired

holdings is rot of serious
proportions for your bank, your
policy regarding them may de¬
pend to some extent-upon your

bank

a

port-

corporate

.

.

are .still

v;;:

and

municioal

issues

prices

which

selling

to

{S *;■

This

should

be

said:

he

at

nu?te high

in

com-

pgr isoh ■;?Witb>ithfe.Apricesab Which

postponement

of

undes5red

~i.g

securities, prior to purchase?

with

time.

of

•.

.

*

.

..

policy with
premiums, both
with
respect
to
buying, i bonds
which -are quoted f at ; premiums
respect

bond

to

such

bank.

his

as

(1?)

should

Your

city cor¬
respondent, obviously, is by no
means infallible.
Nevertheless, it
only stands to reason that men
who
the

devote

their

study

entire

time

with

pi- they have sold upon
"'sions in the past."

^

.

'

'
•

to

bond

ing

premiums?

regarding

What procedures will you

follow for
ment

sources

reviewing

invest¬

your

requirements, for supervis¬
portfolio, and for

your

con¬

ferring with outside sources?

to

investments
who have had years of expe¬

rience

in

working

banks

town

problems,

with

their

on

should

banker In

able

Reporter

It

deserves

is this:

responsible

"

oolicies

your

Governments

By JOHN T. CHIPPENDALE, JR.

for

one

range

em¬

.

You alone
the

Government security prices continue to move in a very narrow
because the monetary authorities have put a "floor" under
quotations.
The longest tap issues are "pegged" in the
neighbor¬

y

point

spec'al

are

.

.

hood of 101, with the most distant
eligible obligation being held be¬
tween 103.6 and 103.8.
The pressure is on to hold prices of
Treasuries around current levels, with
plenty of bonds

investment

of

institution. This
responsibility that cannot be

a

on

helping him to formu¬

feel

phasis.

Our

be

to

investment policies.

conclusion, there is
I

out-of-

investment

be

assistance to the average

some

is

(22)

you

respect

with outside

bank

of

It is up to
your basic ap¬

eration.

to formulate
to investment, policy, to
analyze the investment require¬

you

proach

.

.

being bought
by the Central Banks and the Agencies in order to carry out this op¬
There seems to be little question in the financial
district,
over the
ability of the authorities to maintain prices at levels which
they consider beneficial to the money markets.
The restricted is¬

shifted to anyone else.

,

.

.

.

.

many occa- and also with respect to the treat¬
ment of premiums after they are ments of your individual
bank, to
I wonder what consult with competent outside
^
The ney* question' is the matter on yout books?
diversf"cation among various Percentage of all bankers are be¬ sources, and then to establish your
'^,ivof
And-it is
'Hashes of securities.; Your obiec- set with directors who just don't investment objectives.
: ff y'tives w,+h resoeot to diversiUca- like premiums. The old unreason¬ up to you to see to it that these
b°n will depend to some extent ing prejudice against premiums objectives are actually achieved.
dies hard. Today for many banks
As we all know, there is no book
\
nnon ve»r -fax. Position. Banks in
has
become
a
formidable of rules that contains all the an¬
the $25,000 to *50,000 tax bracket thus
.••■•^1 v, v;;J;1:,;
'iiean. hardlv afford to ignore the problem.
swers; there is no simple magic
The fact is, of course, that high formula for achieving the best in¬
\ advantages yof. partially tax ex•

.

What

specific policies
plan to follow in dis¬
posing of holdings which do not
conform with these
objectives?
(18) What should be your policy

out¬

corre¬

.

'

,

What should be your

:

intervals

d sinterested

some

source

spondent

In

pe¬

periodic

discussing his situation in de¬

that

specified

What procedures will you
follow in analyzing and in check-

quality?
What should be your ob¬

(16)

supervis.on?

(21)

to

cation?

holdings

some

re¬

wJtb respect

jectives with respect to diversifi¬

to plan to make steady prog¬
ress toward their
complete elimi¬
and

What should be your ob¬

sit¬

late his

toward

now

ment

(15)

and

at

make

start

for

Supervising Your Portfolio
(20) What records and periodic
studies do you need for invest¬

ments?

jectives

35

(19) What should be your policy
with respect to taking profits?

uation
for

of

some

schedule

by borrowers and
the coming

over

viewing h:s entire investment

and

regarding their
however,

much,

definite

a

action may prove to be costly.- As
a
general rule, it is desirable to

riod

present time many medium-grade

.

else's opinion

future.

have

depositors

(14) What should be your objec¬
tives with respect to the
maturity
distribution of your other invest¬

objectives and standards:
Finally, every banker should

tail

cannot

you

securities by
salesmen
purchase bonds without

lated

If

eliminating

bankers

most

that

by

year?

checking and without
reference
to
previously formu¬

your

foh o should conta;n only hichgrade. securities.' Moreover, at the nation within

v

,

1930's.

convi-red

are

"

S

of ; the

ence

.

..

After the ex^eri-

sold

who

objectives with
respect to matur ty distribution,
quality and proper diversification?
The answer to that question may
derend ehtirely upon the f nancial
position of the individual bank.

one

<

are

and

(2399)

mands fop funds

adequate

Hew and when should holdings
eliminated which do not ccn-

xOrm

confidence in your own or some¬

What should be

CHRONICLE

excessive or if they regarding any corporate or mu¬
highest quality, then, nicipal bonds before he buys them.
should be reduced There are still sortie bankers who

of

not

be

sar^e

FINANCIAL

these holdings
or

your own

portfolio with average f gures for
( various
groups of banks you have
to be sure, of course, that maturi¬

&

rate bonds are
are

-

Incidentally/-in comparing the

COMMERCIAL

sues

not

are

considered to

.

.

the problem that the

be

longest eligible

issues might turn

out to be, especially if there should be changes in
requirements by the Congress.

reserve

.

It is

.

.

bit surprising to traders and Investors alike that the
eligible bond has been held so long at the 103.7 level,

longest

a

since there appears to. be no important reason for
maintaining it
at a premium over the longest tap issue.
Many still believe
.

the "peg" will be lowered

the

on

the decline will he cushioned.

.

.

.

.

2V&S due Sept. 15, 1967/72 but
.

(

.

emnt

*

...

,r

..

,<■

;

bankers

be wise to restrict
*\Vny' 'nimchases of municipals 1 to
.

may

,/ fon-auaVtv

credits

also

and

to

fairly/ short maturities.

;

A«s

.

corporate

bonds,

as

we

all- know

,

has been

bonds is dominated

■

"

/

rather

a

„

by the life in?

companies.

surance

During

,

insurance

tt>e

war,
"

-

the

.

,

companies

outlets for their investment funds.
Over, tv»e
oast
year,
insurance

companies have been able to

J

tUgiY*

Tau/I

|
Vs

r^o^tgqgp

loans

ex-

SUb-

I

st.flptj»Uv and there has been

*'

iocreasino'^stiuuly of

'

bon'a
1

As a natural

'«sues.

bonds haw* rpadiostM

"

-

re-

normal

reMionshm

to

to

more

yields on

government securities.
No
of

one

can

course,

pert"ir»*m

wif^

sav

what the future holds

for ror^orat** bonds.

remember,

O^e uoint to

however,

is

that

incuranoe companies hold

the

around

.*20 b'liicn of ^vern^^nt secnr;_

,
-

/Hps.

Tf

the differential

between

1

'I preciablv,

'

and

nms

•i would
•

d

1

in yields

and

governments

rates s^ouH besrih

TfW.

On

results.

the

KEATING THE HARVEST

other

even

more

stable.

Chairman Eccles of the Federal Reserve Board
again stated his
on "Special Reserves" before the Congress, and at the same

position

matter of bank investments. What

time

strongly indicated the need for support of the government bond
market, so that the 2%.% rate for long-term Treasuries would not

change in yield, is needed most is the determina¬
die
higher premium issue'will tion to adhere to the dictates of
fluctuate less, not more, on a per¬ clear thinking and common sense.
centage basis, which is what really
matters. During the past'few years
Reappraising Your Bank's
Investment Program
many
bankers, - trying to avoid
premium bonds, have purchased
Your Basic Approach to
long-term corporate and munici¬ ?
pal securities that had no' premi¬ J
; Investment Policy
Given

the

same

of

instead

ums

quoted

Treasury

premiums.

at

purchases

'hese

preciation

tend

compa-

investors
switch

to

eoroo-

widen an-

to

the. insurance
other

well

as

from

hrjrt—cn+<> fp+n nomnvatps

selection
bank

Some

show

now

points

20

of

issues

or

a

of
de¬

more.

"nv-

obtain

issues

of

to

buy

for

should be made

account

a
on

the basis of

quality, maturity and
yield, not the size of the premium.
Regular

an

eorbo-

pew

suit, market yields on corporate

/
;

quently mroven

For these bankers, the prejudice
win ing to qpav- exceptionally
high prices for corporate bonds against premium bonds has been
because thev had so few profitable a mighty costly proposition. The

■

;

vestment

be

violated.

amortization

premiums has

Until

bond

of

become a must.

now

recent years many banks
charged off premiums entirely at
the time of purchase.
Formerly
;

(I) Do

regard your invest¬
ment portfolio as being primarily
a
means of adjusting your bank
to a satisfactory position wi,th re¬
spect to safety and liquidity and,
insofar as circumstances permit,
with respect to earnings as well?
v(2) If not, what is your basic
approach to investment policy?
(3) Do you plan to try to guess
m arket Swings or to invest on a
basis?

'"

getting them

a

^purchase of government bonds by the Federal
.

Out of the above total in

that

due in

are

more

of $294,000,000

excess

than five years.

ing fired into "Federal" in

.

.

.

were

Treasury bonds

issues

are

be¬

uncertain manner because there
is still plenty of "bearishness" around as far as the
eligible gov¬
ernments are concerned. ,, .
A

HIGH PRICE

-

no

.

.

Purchases of the longer Treasuries by the Federal Reserve Banks,
have been in increasing amounts each
week/with more than $131,000,000 being taken on in the period ended Dec. 3, compared with
$120,000,000 for the previous week, v
; Despite the credit restrictive
measures of the authorities that are
being carried out in order to
limit the credit base, excess reserves of the
system continue high

:

.

because

;

(4) In formulating your invest¬
ment policies, will you give any
weight whatever to your opinion

At the present time this support of the market
by

,

.

big bundle of securities,
Reserve Banks,
since Nov. 5, when the operation first
started, has amounted to more
than $368,000,000 through Dec. 3...
because

you

perm anent

.

the monetary authorities is

■

sbarn de^me in prices in recent
months. The market fo** corporate

,

;

of

volume of municipal bonds
"that will be offered in the market
in ihe next few years, however.

-

.

and

premium issues have always acted

X; fully tax evempt state and munmi- just about as well marketwise as hand, there is nothing mysterious
%
t>al securities.
In wew bf "the lower coupon issues and have fre¬ or highly complicated about this
-

.

issues

government

of

Treasury

the

substantial

obligations

reserves.

gold

by the

inflow

member

and, the

banks

in

continued sale of
order

to

maintain

...

The purchase by the Federal Reserve banks of more than
$368,000,000 of government bonds, in less than a month, with thei,j<

regarding the future trend of bond

'
argument could be made for yields?
(5) If so, what is your opinion
practice on the grounds of
at
the present time and how much
"conservatism," but not so today,
for with bond portfolios account¬ weight should be given to it in

some

bulk of it in the last two weeks, adds to the
inflationary pressure

this

and thus offsets to

large part of total your investment program?
income, failure to amortize

ing for such
bank
bond

results
the

the

over

in

What

life

true

distortion

of

earnings picture.

policy should

considerable extent the other credit tighten¬

.

,

,

.

The

:

/

^

'/I;/;'

This is not the whole story as to the amount of bonds that were
bought by the authorities in the month of November in order to stem
the downward movement in prices of
Treasury obligations.
Gov¬
: •

(6) How much risk of deprecia¬
tion and losses might there be in

...

your

assets in relation to the pro¬

follow tection afforded
with respect to taking profits in accounts?
;
securities?

.

.

AND AGAIN

Your Bank's Circumstances

bonds

the

of

serious

a

bank's

a

This is the price that is being paid in order to
keep quotations of Treasuries stable.
measures.

a

premiums at periodic inter¬

vals

ing

you

by

your

capital

trust

ernment

accounts

last

month,

according to some estimates,
bought more than $200,000,000 of marketable issues, to help the cause
of stability in the government market.
Purchases of outstanding
Treasury obligations by the Agencies were small the early part of
November but assumed very sizable
proportions near the end of the
.

banker

average

had better pause and ponder well
before he realizes anv more prof¬

(7)

Is

risk

the

likely to increase
the

in

loans
appreciably as
your

result of further loan expan¬

month,

v.

.

.

Commitments by government trust accounts do not add to

.

its in his security holdings.
Tak- sion? f
If;/'yv".7•;:1" the inflationary forces, because the funds that are
jfhc better vield. -This would obviprofits
frequently
results
oncTv tpnd to
(8) What may be the, extent of standing marketable
keep the spread from ng
obligations come from taxes.
simply
in
writing
future
up
book
valuvs
fluctuations in your loans shift of
widening very substantially for
deposits.
nnd;, reducing
and
in
net
income.
A
your deposits?
ton-grade issues.

used to
.

<

buy out¬

It is merely a

,

.

We a1! knov^ that cornp-ate h"^^

r>rices fluctuate

rather v'de

ever p

.{range over p period of years.

banker
'n

If

he

bonds

decides

to

enfirehr

avoid
If

he

corporate
dops buy

Ve shcld rpcogn'^e tUn <n-

pvitahilitv

of

price

fluctuations

jand should buv onlv issues aed
amounts that he is

ii(or>

anerm&nent

which ix in

a

sition

has

no

about

market

wilb'ng to hold
ba«?s.

A

bank

stroua financial
reason

to

denreciption

po¬

worry

in

a

Tegconqble

commitment, of highgrade corporate bonds. If the bank
is

not

tion

in

ana

a
n

strong financial posi¬
lis

holdings cf corpo¬




of

income, not in tenuis

capital gains.

of

The

(9) Could

you

readily meet all

deserving demands for credit in
the event of

(10)

average banker makes no mistake

them

should think of securities

terms

Is

a

severe

depression?

high degree of
market stability required for all

Supervising the Portfolio
The last three questions in the

of

your

a

most

refer

to

half of

the

supervision

total

earnings,

investments

or

are

obvious that the banker must give

bonds.

COURSE OF PRICES

you

of

it is

considerations affect your invest¬
ment decisions?
;

From Nov. 5, when the task was undertaken
by the authorities
stop the sharp recession in prices of government obligations, quo¬
tations of the longest tap issue have gone down
only about a quarter
of a point, with the 101 level
being held since about the 12th of last
to

month.

adequate
definite

supervision

He

should

procedures

these
eslabl'sh

over

also

that

he

will

invariably follow in analyzing and
in checking with outside sources

.

and

(15)| What

Objectives
amount of

cash and

.

During this

time the most distant eligible bond
103.7, with the latter quotation or "peg"

same

104.30 to

being held since about Nov. 26.
As

Your Specific Investment Policies

.

has declined from

careful thought to the problem of
assets.

in the past month it is indicated that more than
used, by the powers that be in the operation of
halt the precipitous decline in prices of government

was

a

very

justified in regarding earnings as
•row portfolio.
With investments an important consideration?
(II) What is the outlook for
constituting more than two-thirds
of the total earning assets of the your bank's earnings?
average bank and contributing al¬
(12) In what ways should tax
list

Altogether

$600,000,000
bringing to

to

which

issue

has

.

.

been

.

bought

more

heavily by

a matter of
conjecture, although well in¬
formed sources believe that the bank bond has
recently been sold

in

much larger amounts than the
ineligible issues.
This is
due to the feeling that lower prices will
eventually be registered
in the longer eligible securities.
.

very
you

short term securities should
have to cover possible de¬

the

monetary authorities is

.

.

S5

36

THE

<2400)

COMMERCIAL

Thursday, December 11,1947

CHRONICLE

FINANCIAL

&

month since March 1929. The Octobe
September's $307,560,440 and contrasted
valuations of $171,213,237, repiesented a rise

eeded the total for any other

The Slate of Trade and Industry

;igure increased 6.0%
f 90.3%.

(Continued from page 5)

ing to protect their names by searching out gray market dodgers
make much dent in such transactions as long as demand continues
far above available supply. The zeal of the steel producers is an

.

As

expected, tinplate producers have

was

ton.

a

-

shows

dipped tinplate carrying 1.25 lb

MIXED

After

dropped

297.49

a

Grains

fairly active in the early part of the week. Cocoa prices trended
a falling off in demand for actuals from manufac¬

unchanged from that
69.8% one year ago.
This week's operating rate is equivalent to 1,710,009 tons of
steel ingots and castings unchanged from last week, 1,655,000 tons
DROP 12.2%.

,

,!

he

;\7/;\ 7'777 .77^.7; 7;, 77:-V--..7'.77 ;7-777'7;

to mills

unfavorable weather.
Demand

industry for the week ended Dec. 6, 1947 reached a new
figure, amounting to 5.217,950,000 kwh., according to the
Edison Electric Institute. This compares with 4,983,439,000 kwh. pro¬

week, which included the Thanksgiving Day

11.7% over the 4,672,712,000 kwh.
•turned out in the corresponding week in 1946. The previous. high
production figure was 5,180.496,000 kwh., reached for the week ended
Nov. 22, 1947.
■ 7 -;, 7
. .,77.
7.7:7777.;
holiday, and was an-increase of

777.v7:v777777;;; :y;7 ::7,
textiles remained

cotton

for

delivery

nearby

fall below 11,000,000 bales due to recent

were

limited

very

'777 y77yV7777.vL>7

•

strong.

mills

and

Offerings for

were

reported well sold into next year.

generally

77

7

7

7,7 77777,;,

Business in the Boston raw wool market continued rather dull

7

with

sales of small lots of
scoured and grease off wools.
Imports of wool received at Boston,
New York and Philadelphia in the week ended Nov. 21 were 4,173,900
clean pounds as compared with 7,144 800 the week previous.
The
largest percentage of imports originated in .Argentina. 777:
trading

largely

confined

to

numerous

SUSPENSION OF

FALL WITH

OPERATIONS

TRUCK OUTPUT

150,400 in the corresponding week

covering against textile sales and exports and to feau

that this year's crop might

distributed by the electric light

77-b77-;.7,77/.';7y;;77^

7

ught domestic supply position was an underlying factor in
'.trade demand was active with considerable buying attrib¬

rise,

ute*

HIGH RECORD

AND SLIGHT PRODUCTION

the

restoration

of

prices

of

represented

a

something Ike the

normal

relationship with national
buying power, an upward adjust¬
from

ment

held
be

bad" been

that

levels

down

by ceilings and sub¬
Any rise in 1948 that can

sidies.

within

classed

reasonable

f eld

the

*

of

would be

expectation

RETAIL AND WHOLESALE TRADE ADVANCES

ON CHRISTMAS

7 y;;"y BUYING
-777;;^,7^;;7:77;7,7
The holiday spirit continued to be evident in stores
Car and truck production in the United States and Canada last

great and where some
sustain'ng forces
are be¬

the

of

precarious.

increasingly

coming

collapse of foreign demand or

A

sudden

a

even

toward

swing

phychological

caution

extreme

with respect to inventories, com¬
mitments. or future plans, could

give rise to

reversal of the price
time. It

a

movement at almost any

should
over,

beforgotten,

not

more-»

that high prices themselves
of the most effective cures

are ore

rising prices; it builds up buy¬

of

ing resistance,, mops up more pur¬
chasing power, and these who are
not sharing in the benefits of the
price increases find it necessary
to curtail

;v7./,b'v;7

DEGLINES BY OTHERS

in

1947

products

ability *s

The

90

7;7'7'7'7'.' ;'777 '7777:'v,'77^77^/77^777' ;7vv77'.;7'-;

year ago.

and power

DODGE

of

in

369,500 in the previous week and
a

record high

AUTOMOTIVE

kind

curred

•

be forgotten that
increase wlrch oc¬

not

Trading was active and total sales in the ten spot markets dur¬
ing the holiday week amounted to 297,500 bales, compared with

Thanksgiving holiday,, and a decrease of 11,435 cars, or 1.4%
below the same week in 1945, which did not include the Thanksgiv¬

duced in the preceding

the

ireat

7

illustration.

an

the true secondary postwar boom
period, without the precipitous
price collaose which characterized
1920-21.
We are, however, in a
stage of the boom where vulner¬

sharply with final quotations showing a net gain of

vanced

points for the week.

the

The amount of electrical energy

a

a

ground for the season, spot cotton in the New York market ad¬

giving holiday. However, they represented an increase of 131,428 cars
or 19.9% above the corresponding week in 1946 when loadings were
reduced substantially by labor difficulties in the coal fields and also

ELECTRIC OUTPUT AT NEW ALL-TIME

prices
probably
1947.
7

government,

•:? 7-;;: ■
y7-7:y;77 extremely small by comparison.
sizable increase in receipts, hog prices moved higher
those for cattle and sheep. All deliveries of lard
Present Boom Vulnerability
futures sold at new seasonal high prices, aided by an aggressive de¬
This leads to a final point.
We
mand for cash lard. 7v7- 7
•
:7 7 7,7;
'77 77' 77 have probably gone through the
With all the active futures contracts rising to new high
early stages of reconversion, into
juespite

Loadings for the week ended Nov., 29, totaled 792,329 cars,
according to the Association of American .Railroads. This was a de¬
crease of 110,333 cars below the preceding week due to the Thanks¬

ing Day holiday.

tient

in the week, as did

THANKSGIVING HOLIDAY

DUE TO

in¬

"7V\;7'7'. 7''7;>''

turers.

and 1,230,100 tons one year ago,

ago

national

If

little higher than

vide

a

downward due to

capacity for the week beginning Bee. 8, 1947
of one week ago, 96.9% one month ago and

the forecast for

to

income.

It should

top sold at $3.20*4

scarcity of food in Europe was likewise a feature. Government buy¬
ing of wheat and flour showed some decline from recent weeks;
Strength in corn reflected limited country offerings of the cash grain
and the growing scarcity of feed grains.
Domestic flour business was only moderate with export buying

Institute announced on Monday
this week the operating rate of steel companies having 94%
the steel-making capacity of the industry will be 97.7% of

down

This digression into the meat
industry I make simply to pro¬

All deliveries

bushel, the
highest since the all-time peak of $3.25 established on May 11, 1917.
Bullish influences included reports of insufficient moisture in winter
wheat areas and a lack of selling pressure.
Reports of a growing

will receive

somewhat

holds up next year, the quo¬
will be as indicated by the

come

high marks for the season.

contract at the

The December

boil

national
com¬

irregular with wide fluctuations featuring active

were

the Chicago Board of Trade last week.

on

of wheat advanced to new

The American Iron and Steel

month

daily wholesale

week earlier and with 240.39 on the like date a year ago.

trading

-

be

may

The question in this case seems

rising to a new postwar high of 301.45 on Nov. 28, the
sharply to 298.02 on Dec. 2. This compared with

week.

to
Agriculture,
prices
that

to

modity price index, compiled by Dun & Bradstreet, Inc., in the pas'
xndex

available.
This, ac¬
the
Department of
will
mean
meat

cording

DEVELOPS

;

Mixed movements marked the course of the

.

magazine states because they have no idea of how much more steelmaking costs will advance during 1948.
' ;
m
Although total finished steel production this year will be 28.8%

a

'7;.

TREND;-

income then

rise of 0.7% above the higher than the average for 1947,
1947. The latest index provided—always that word, "pro¬
when it stood at $6.39.
vided."

COMMODITY PRICE INDEX

WHOLESALE

DAILY

products were not advanced last August in¬
creased steelmaking costs on this product has been absorbed by steel¬
makers for the past five months. No advance could be made before
Jan. 1 because of annual contracts between tinplate makers and canmakers.
Tinplate producers stiU:may be taking some chance, the

RAILROAD FREIGHT LOADINGS

gain of 12.2% over a .year ago

a

effective Jan. 1, 3948.
Because tin mm

of

What fo Do AM It
(Continued from page 15)

in the three

week ago, the current figure represents a
previous peak of $7.12 recorded on Sept. 16,

of tin per 100 lb base box of
Another grade of hot dipped
percentage of total tinplate
shipped has been advanced $21 a ton. Electrolytic tinplate (thinner
coatings than the hot dipped material) has been advanced $19 a ton.
Canmaking quality black plate and special coated manufacturing
ternes have been advanced $20 a ton. All of these increases will be

of

■

cents, following sharp advances

il

or

a

tinplate has been advanced $17 a ton.
material comprising a much smaller

greater than a year ago automobile makers as a group
about 38.7% more steel than they were shipped in 1946.

rise

-

.

-

v

■

preceding weeks, pushed the Dun & Bradstreet wholesale food price
index to a new all-time high of $7.17 on Dec. 2. Up 1.6% over $7.06

being done.
raised the price of

for the year 1948. Two months ago "The Iron
Age" estimated that the price advance would be between $15 and
Hot

lurtner

a

tin mill products

$25

'

:

Etotorcic OiMt and

FOOD PRICE INDEX HITS NEW ALL-TIME HIGH

have claimed nothing was

to those who

answer

over

/ith.the October, 1946

r

thgir purchases.

think

I

;

intermediate

as consumers
increased their purchases of gifts and seasonal merchandise.
Retail
volume in the week rose moderately above that of the preceding

phase of a runaway spiral of in¬
flation headed for the moon.,
I

The lower volume

week

feel

operations Monday night, combined with slight declines in output
by other members of the "big three."- 7■■ V--7/777 ^

year ago,

f

week touched

an

with 115,197 in

109,728 units compared

estimated

to Thanksgiving, states "Ward's Automotive Reports."
was due in large part to suspension of Dodge truck

the week prior

included 84,549 passenger cars and 20,205
trucks built in the United States and 3,827 cars and 1147 trucks
Last week's figure

cording to "Ward's."

7 ■77.7

77-;

The

preliminary estimate of" November production is 419,621
units comppr<^ with 460,527 in the previous month and 380,460 in

:777

November, 1946.

''

SEPTEMBER

the past week.

SINCE

Dun & Bxadstreet, Inc., reports 60 concerns

failing as compared with 72 in the preceding week and 37 in the cor¬

responding week of 1946.

7 While failures
only

were

a

fifth

as

as

in the same week of prewar

1939 when businesses failing totaled

7 7

2977 "

'

counted

as

Small

failures

under

$5,000

and

floor

materials

that of
•

with losses of $5,000 or
low, numbering nine

remained

_

.

were

automobile

representing the only district in which failures were
than in the previous week. No other region had half
failures.

more numerous

;.77';77"77;;;7;7:7:777 777 7;'.

77/777777;;

ago

a

steadily purchased.
Hardware, building
supplies and equipment were in large
hunting equipment continued to sell well.

volume for the country

year ago.

7

14 and

10 to

to

in the period ended on Wed¬

estimated to be from 10 to 14% above,
Regional estimates exceeded those of a year 7;

11, South 8 to

12; Middle West 13 to 17, South¬

Pacific Coast

'*

last

good wheat
summer
and the

United States

good corn weather

ESTABLISH

rose

15 to

weather

•7

the

Federal

slightly in the week and remained mod¬

Board's

Reserve

index

for

the

week

ended; No v.

29,

1947, increased by 10% from the like period of last

year.
This com¬
increase of 9% in the preceding week.
For the four
weeks ended Nov. 29. 1947, sales increased by 10% and for the year
to date increased by 8%.
;
,
/; 7

pared with

an

Christmas shopping here in New York last week moved at
more

accelerated

purely weather phenomenon),

we

would

in

215

cities of

the

United

States reached

the sumrof

$325,8)3?-167.' the largest October volume on record; according to
& Bradstreet, Inc. With the exception of March, 1946, it ex-

Dun




be concerned over

row

agricultural surpluses rather than
scarcities.;,
7,/v/;77;
7 *7'. 777
.

/

Anather

been

G-e

factor has
soldiers' bonus

temporary
rash

o*

payments and settlement of

termi¬
'-7

leave bonds.

nal

virility of,
vHe worre soiral. especially as long
as we have John L. Lewises with

:. Cne.has to grant the

bus'nessmen

while

but

have

gett'rig weaker and weaker
'm -resisting of late; the workers

a

bringing department sales volume up to
Fresent indications point to substantial gains

are

1946 business.

„

lean-mg it's not genuine, but
goM. 7 "777.:'77-' 7; 7
7

"col's

And

these

According, to

the

Federal

Reserve

Board's

index,

department

City for the weekly period to Nov. 29, 1947,

increased

same

an

above the.

increase of 5%

Nov.

period last

in the preceding week.

year.

This compared with

For the four weeks ended

29,1947, sales increased 5% and for the

year

to date

rose

by 10%.

phenomena—

penvses av.d wages—just
aH^ut sum up the price bulge this
fall. ■ 7/ 77\"
'77,
7■;
.

With Paul H. Davis & Co.
(Special

to The

Financial

Chronicle)

CHICAGO, ILL.—Earl C. Jock-

v

store sales in New York

1%

three

weather,

pace,

last year's figure.

RECORD

Rising for the fifth,month in succession,, building permit values
October

had

(a

us,

19.

erately above the level of the similar week of last year. 7 7 7y77"77 "7
Department store sales on a country-wide basis, as tak^n from

^

In

^ad

Fvmnp

i~h1 has

VALUATIONS

FOR OCTOBER

raoid

I have.heard it said that

"hanges.

been
Wholesale volume

over

BUILPTXTG

in making ■■■ this
because of the
.

,

partly

was

by the following percentages: New England 9 to 13. Ea«t and

Northwest
west

total failures,

many

coverings
and

demand and in tome areas

,

against 10 last week and nine in the same week a year ago.
Fewer concerns failed in all industry apd trade groups except
retailing. In this latter group failures increased from 20 to 24, ex¬
ceeding those in the comparable week of 1946 by a margin of four
to one.
7' '
The Middle Atlantic States claimed over a third of the week's

as

confident

statement

resects food, are subject to

Practically all types of toys and gift items were sought by con¬
last week.
Home furnishings, small electrical appliances,

51 this week, they continued to be about twice as heavy

in the previous year when only 28 failed

more.

7;
consumers

777.7.; '"7777;.:7.77' 77.7.77. 777777777 /77 7'7'

.7

,

below that of a.year ago.

Retail

larger failures involving liabilities of $5,000 or more ac¬
almost entirely for the week's decline.
Down from 62 a

week ago to

vegetables continuing in large demand.
some enthusiasm from

nesday of last week,

"

The

a

sumers

sharply from last year's level, they

numerous

week

7\ Men's suits, topeoats and sportswear sold well, although the 7
furnishings was generally slightly -

77.'• V.7777-

;

were up

corresponding

volume of men's clothing and

Declining in the week ending Dec, 4, commercial and industrial
failures fell off to the lowest number registered in any week since
the first of September.

the

Heavy Winter clothing aroused

-V;..

-

that of

above

In

fresh fruits and

•'

EARLY

well

an

point made earlier—that our gov¬
items; generally consumers preferred moderately priced items of good ernment has finally recognized
quality.
7-7'7 •' ■
77, 77777/7/777777'77":1' 77 ."'7777. 7-7 7--'77r and begun to show sigrs of adopt¬
7/77 A veyy slight decline in the demand for food occurred following ing a counter-inflationary policy.
the Thanksgiving Day holiday, but volume remained at a very high
77Also, we should remember that
level.
Poultry and staple groceries were steadily purchased with world conditions, particularly as

r

7' 7 7\7.V7 :';'7v77-'777

BUSINESS FAILURES DROP TO LOWEST LEVEL

remained

according to Dun & Bradstreet, Inc., in its current review
some areas there was an increase in the buying of luxury

of trade.

in

not

.

last year 93,907 vehicles
were made,
while in the like 1941 week output was 92,205. The
revised total for last week's four working days was 84,391, ac¬
In the corresponding week

in Canada.

and

boom,

a

'

in this kind of^

are

we

Paul
La

F.

Salle

affiliated

become

Davis
Street,

&" Co.,

10

with
South

members of the

New York and Chicago

Stock Ex-y

formerly with
Wavne Fummer & Co. and Good-

^angesi

' He

body & Co.

was

Volume

166

Number 4654

THE

COMMERCIAL

&

FINANCIAL CHRONICLE

of Current Business
0

Indicated steel operations

'percent of capacity)

Equivalent to—

Dec. 14

(net tons).

Crude oil
output—daily average
Crude runs to

stills—daily

Gas

oil and

,

;

w

,

Residual

fuel

97.7

oil

fuel

output

(bbls.)

oil

Latest

Previous

Year

Month

Month

Ago

96.9

ALUMINUM

69.8

1,710,000

1,675,700

1,230,100

~

(bbls.)..

I

Nov. 29

5,309,000

5,229,000

5,224,000

Nov. 29

4,699,000

16,607,000

16.138,000

15,926,000

Nov. 29

15,289,000

2,324,000

2,192,000

1,903,000

1,888,000

5,257,250

Nov. 29

.___

at__~II~Z!

(bbls.)

—

at

5,275,300

5,274,250

6,382,000

6,574,000

6,793,000

8,405,000

8,447,000

8,364,000

86,319,000
20,619,000

All

88,619,000

21,218,000

22,566,000

20,666,000

CIVIL

CONSTRUCTION,

*

ENGINEERING

State

and

Federal

Dairy

62,646,000

62,749,000

68,464,000

Fruits

56,774,000

57,259,000

58,371,000

Beverages

902,672

940,746

660,91?

743,195

617,94:

Rent

u;

Dec.

^

——IZDec'

—_

OUTPUT

coal

Pennsylvania

DEPARTMENT

S,

BUREAU

and

lignite

anthracite

STORE

OF

46,867,000

71,109,000

76,685,000

67,109,000

50,431,000

34,279,000

55.8G0.000

55,680,000

41,228,000

28,688,000

11,429,000

9,203,000

5,591,000

20,825,000

INDEX—FEDERAL

29

12,090,000

*13,300,000

12,850,000

29

1,057,000

1.213,000

937,000

29

2.038,000
1,160,000

133,500

*138,400

142,900

9,800

'

*395

?v

.

fuels

'

313

FAILURES

(COMMERCIAL

STREET,
IRON AGE

AND

INDUSTRIAL)—DUN

&

Dec.

Scrap steel (per gross ton)

Electrolytic

(E.

M.

&

72'

37

——i.—

D^c.

2

$36.96

$33.96

$36.96

$23.13

——Dec.

2

$40.25

$40.58

$41.50

$25.00

3.18925c-

(New

(New

York)

Lead

(St.

U. S.

Govt.

Aaa

at

at—

3

'21.200c

21.200c

Dec.

3

21.525c

21.550c

Dec.

3

LO.OtOc

80.000c

Dec.

3

Dec.

3

-I—Dec.

3

^
at

^4?;

i

RESERVE

—

.--Dec.

.

15.000c
'

21.200c
21.425

Dec.

.

_■—-—-

-

101.84

9: •>:

111.07

;

(average
(average

(average

——

9

—L._

Bonds———-—

Aaa

9

104.14

9

105.86

112,75

9

.

9

Dec.

JDec.

•

_

—--w--——

Utilities

Group..

Group

.Dec.

FERTILIZER

ITY

INDEX

BY

-—Dec.

ASSOCIATION—WHOLESALE

;

Fats

and

oils

Dec.

.

_;
——

Grains
;

——————

—

Livestock

For

producers'

"f

Unfilled

11.650c

.

LIFE

—

-

All

•

9

3.11

9

>

,

v

*

3.08

2.85 ' '
.2.95

/

received

3.15

i:9

3.50

'

■

;•

:

:.iV

,

•'

109.97

—...

;•

.:

3.08

•: <

2.81

■

2.99

'v

f

3.41

(■

3.28

2.98

2.90

2.78

9

2.03

2.90

2.80

2.66

V

.

f

igp

4^«.8

456.7

:

'

237.4

235.3

;

282.0

287.6

,

___

—

v
.

:.,i.

Raw

—

16,357,524

37,626,367'

35,647,321

Dec.

6

159.3

159.4

159.5

136.3

236.4
157.1

Dec. -6

140.6

Dec.

129.3

v

1

136.8

6

6

V-

219.1

•

236.4

232.5

207.0

157.1

154.5

153.3

136.8

136.3

122.4

140.6
;v

•

•r-.

K:

136.9

~

.

129.3

■:;r^:-::;/l28.3

products

All commodities- other than

farm

products and foods




'

fine

ounces)

short

171,580

29

170,175

29

93

218.1

212.7

29

420,456

165.882

/

v'o-'

!,

182,964 ;

'

-

i

•

)-■

•••'*:

418,582

5
5":

150.7

151.0

;

$93,979,000

30,167,000

28,367,000

28,773,000

7,269,000
17,795,000

6,358,000
17,574,000

16.964.000

30,640,000

29,457,000

25,433,000

42,364,000

35,218,000

38,415,000

7,334,000

——

J50.196

70,916

♦72,099

192,441

♦203,276

29,665

♦29,895

2,727,794

>2,860,488

*1,814,853

47,679

♦48,306

*47,149

9,609

8,561

V

•

———

INCORPORATIONS—DUN

INC.—Month

1125,296
=

*27.706

&

of Oct.

(DEPT.

CASTINGS

(thousands

Month

September:

of

35,877

—}.

pounds)

of

10,799'

COM¬

OF

pounds)

of

(BUREAU

CEMENT

83,158

„

518

32.727

30,441

34,563

75,060

92,367

523

-873

28,135

33,992

1,000

1,241

——-

1,228

MINES)—

OF

,

192,927

153,574

162,353

■

148.4

:

;

>

.j'.

20,099,000

16.213,090
17.955,000

10,455.000

• 13,337,000

9,308.000

16,342,000

80%

79%

$60,958,447

$81,855,563

86%

—

SELECTED INCOME ITEMS OF U. S.
I

Commerce

(Interstate

RYS.

Com-

income

Income

available
fixed

after

income

Amortization

150.3

charges—;

15,351,019

97,206,582

3,445,697

2,875,943

2.880.093

91,607,970
55,083.092

74,671,789

94,326,489

40,322,812

56,570,778

3,739.746

projects

common

On

preferred stock

equip.)__

&

structures

-

/

3,297,828

3,068,499

-37,024.984

53,502,279

23,578,939

29,444,900

28.476,358

1,354,223

1.346,250

973,152

30,738,444

21,322,717

13,817,849

17,280,446

3,524.813

17,168,139

4,318,989

1,365,765

4,145.941

2.51

2.17

2.50

137,457

••••..

———

—

fixed

T

I 51,343,346
————

—

stock

On

to

'

!

taxes

income

16,589,285
77,547,732

income——

appropriations:

of

14,228,841
95,053,667

r—

&

defense

of

income

fixed

for

«—

(way

from

charges..—

charges

Contingent

Depreciation

:

—

——

deductions

Miscellaneous

-Net

$80,824,826

income—

income

Total

,

August:

of

operating

railway

Other

545,042

'

20.362,000

17,480,000

:—-—

——

mission)—Month

94

436,178.;.

i

;

—w_r-—_—,

used

CLASS

Net

•

100

/

■

tbbls.)

'

191.3

;

of August:

RAILROAD

-125.6

,V< 182,029

102
-

2,897,105

2,631,273

;

——-

tons)

(thousands

die

Income

29

396,752

——

tons)

(in

(in

PORTLAND

'V

159.8 y:''

M

STEEL
5150.2

157.4

139.1

190.3

188.6

187.7

170.2

Nov. 29

178.3

178.8

173.8

163 Ji

Nov. 29

203.3 V

200.4

195.9

165.0

■

144.7

;.s>* 119.1?:

charges

>

151.3

.'.144.0

142.7

130.7

,118.7

118.3

95.8

.151.3

151.3

—.

(DEPT.

CASTINGS

—,

,

For

—

Unfilled

for

orders

(short

tons)

185.2

144.3

127.8

123.7

I.Nov. 29

134.8

134.7

133.4

118.3

Production

Nov. 29

118.7

118.1

117.2

106.7

Shipments

(number

Shipments

(value

(•J

142.6

TRAILER

COACHES—HOUSING,

(DEPT.

TRUCK

OF

of

units)

of
of)

units)

126,471

88,719

90,567

34,544

31,686

35,904

526,229

478,649

380.589

month

TRAILERS

(DEPT.

OF

175.9

154 .f

154.6

130.2

Month

150.0

134.1

Production

152.7

150.8

132.3

142.0

140.9

121.1

units),
Shipments (value In dollars)

of

Shipments

TYPES

(number

of

ONLY
8ept.:

figure.

4,791

$7,865,126

COMMERCE)—
:

,

<*..,,3.213

JMonthly

average

in

year

♦3,169

6,578

4.005

♦3,724

6,207

$10,466,291

*10,114,765

$12,594,963

u..™,™——_

_____

♦Revised

6,741
6,523

$10,859,515

units)

of

4,864

6,986

6,925
$11,634,920

—

——

September:
(number

of

—

156.1

.*

of

COMMERCE)—Month

(number

,152.2.

153.1

end

120,405

102.9J3

131.8

186.1

Nov.. 29

at

——

136.5

176.7

sale

—

187.2

157.1

—

—

138.0

152.5;

COMMERCE)—

of September:
,
; :
v
(short tons)
—t———
sale (short tons)
producers' own use- (short tons)

Month

For

Nov. 29

177.9

OF

Shipments

-V

Nov. 29

Nov. 29

■

).

ounces)

short

BUSINESS

Lead

116.7

v

Nov. 29

:

fine

(in

Capacity

.

210.8

;

540,649

400,898

$236,414,000 $218,389,000 $210,898,000

-

MINES)—

OF

(BUREAU

157.6

7

161.5

«:.

737,401

550.961

434;387

$108,179,000 $101,415,000

—

Shipments from mills (bbls.) ——
Stocks (at end of month)
(bbls.)

174.1

-

951,859

590,702

t'''/

-

238.9

217.2

;

1,025,089

•

—

—-

Month

223.1

..Nov. 29

farm

figure.' -'• "

18,099,123

LIFE

OF

-

Production

179.4

Nov. 29
articles

products
other than

♦Revised

18,495,696

...

——!

197.8

178.9

Nov. 29

.

—_*

products

commodities

All commodities

217

192

^

—

294.1

224.6

Nov. 29

materials

Manufactured

179'
—

227

■v

263.8

6

6

t

TO

—t,——

•.

232.4

196.2

6

'•

t

————-

291.9

245.0

Nov. 29

products—.:

Semi-manufactured

-253

210

September!'

—

256.6 '

198.2

6

of

307.8

fipeclal groups—
.

>

r

252.1

Dec.

INSTITUTE

—

MERCE)—Shipments

216.9

248.3

-

.

198.2

Nov. 29

——

Hcusefurnisliings goods
Miscellaneous

*215
*203

234

2,679,858
<

PAYMENTS

BENEFIT

—

BRADSTREET,

§ 370.7

.

228.5

258.9

Nov. 29

1

.

products—

allied

239
244

223

;

—

metal

and

2S6
252

September:

(in

Silver

NEW

'

.

materials

Chemicals

336

month

f*51

.

values

Aluminum

6

Dec.

%

payments

of

Dividend

lighting materials

vBulldhig

271

♦298

3.05

J

-

LABOR—1026=100:

c

Vv;

Copper (thousands of pounds)—————'
Magnesium (thousands of pounds)
Zinc (thousands of pounds)

't

6

of

end

sale' at

*

OUTPUT

v.Zinc

3.17

3.35

3.02

6.

Dec.-

—_____

products

Metal and
-

DEPT.

—

:

Fuel and

.

S.

products

'Textile

-

♦275

224

———

2.70
2.84

,..

3.41

456.0

tons)

Lead

9

9
0

<short

Gold

6

5'

AVERAGE—100

leather

300
372

OF COMMERCE)

2.61

O

Dec.

at-—

WHOLESALE PRICES—U.

Hides and

249.5

Mine

Ratio

Foods

»

2.83

Dec.

;-',V

OIL, PAINT AND DRUG REPORTER PRICE

Farm

.-/■

——

use

;

Federal

All commodities

272.2

of

production of recoverable metals in the U.S.
Copper (in short tons)
— — —

--.—Dec.

...

.

for

'/

endowments

Total

2.28

2.74

Dec.

—_

INDEX—19.16-36

280.4

119.82

v

'2.99

:

3.49

311.8

ttons)__

(tons)

129.9

"

_———„—j—

;

_

tons)

dividends

Policy

■

310.9

Dec.

(tons)

orders

139.8

consumers—

customers—month

benefits

Surrender

117.40

2.34

2.82 V.

6

Percentage of activity
Unfilled

140.8

.

Annuitv payments

112.19
x

117.00

2.91

Dec.

-

NATIONAL PAPERBOARD ASSOCIATION:
Orders

165.0

RE¬

omitted)-—

(000's

INSURANCE—Month

Disability

116.22

115.04

2.37

336.6

—

machinery
groups combined

Production

ultimate

to

own

INSURANCE

METAL

2.38

268.6

Dec.

•:

.}<

136.5,

184.2

AVERAGE

1935-39

•'

339.2

1

—

/,.•

\

Matured

120.84

107.98

-

115.04

272.9

—

Fertilizers
Farm

X-

6

1

drugs

tons)

•},'

f

Death

1)9.00

105.69

V

6

Metals

and

X-

113.31

,

113.50

6

Textiles

materials

103.68
116.41

»■

106.74

Dec.

Miscellaneous commodities

Fertilizer

■/'

(short

orders

(short
\v

10.500C

V

118.20

104.31

«

—.Dec.

;

Building materials

92.0
154.8

187.5

September:

of

70.000c

116.80

^

:

111.62

.———Dec.

...

Fuels

Chemicals

91.7

92.1

156.$

INSTITUTE:

ultimate

sale

COMMOD-

Cotton

.

103.8
114.4

37,873,257

GROUP—1935-39—100:

Foods

Farm products

Y.

N.

sales

NON-FERROUS

MOODY'S COMMODITY INDEX--——

NATIONAL

.116.61
114.85

"

Public

V- 111-62

114.46

■

9
—

Industrials

111.2
123.8

October:

September

from

Month

;
;

;

102.39

h,\:

9

Baa.

of

For

10.500c #-•

.

113.31

■

MOODY'S BOND YIELD DAILY AVERAGES:

Average, corporate

165.9'

117.6

124.6

$325,639,000 $315,590,400 $288,151,300

•

v

101.86

110.34

,

Dec.

Dec.

;

114.08

Dec.

Industrials Group

::

141.5

185.9

FED¬

FEDERAL

DISTRICT,

of

ELECTRIC

Revenue

11.800c

14.800c

10 .500c.

.

W '*¥■ 116.02

———Dec. >9

-

Group

A Public Utilities Groups—

Govt.

SALES—SECOND

OF

18.175c

15.000c

14.800c

"

10.&Q0C,.

9

--—Dec,,

-

Baa

U. S.

151.4-

179.8

187.6

Avevage=l00)

19.275c

c

80.000c

>

15.000c

14.800c

9

.—-—Dec. ;9

—

Aa

v,

BANK

Sales

••

Dec.
—

■

Railroad

178.5

181.1

RE¬

(FEDERAL

1946.

<:

176.6

(1935-1939=

1935-39

STORE

I OLICYHOLDERS

Bonds

corporate

A—

162.0

November:

of

Sales

MOODY'S BOND PRICES DAILY AVERAGES:

Average

176.4

181.7

—

month

...

■

INC.

SALES

SYSTEM .-c

Month
rw'

at

fit/-Louis)

199.8

187.0

COMMODITIES-

OF

1RAY IRON CASTINGS (DEPT.

York)

Louis)

Zinc' (East

193.3

198.2

J. QUOTATIONS):

refinery;at—■'
reiinery at

Lead

STORE

Sa'es

2.70711c

copper—

Straits tin

--

October—

of

Kilowatt-hour
2

3.18925c

212.3

'55

monthly), unadjusted^__,—
daily), unadjusted—daily), seasonally adjusted
Stocks, unadjusted as of Oct. 31
Stocks seasonally adjusted as of Oct. 31 —

4,672,712

Dec.

3.18925c

186.0

235.9

seasonal variation—__—_—i.—v
seasonal adjustment

ERAL

334

5,057,455

72

,

183.8

for

Without

EDISON

•

.Domestic

Export

4,983,439

60

—

BRAD STREET,

—Month

PRICES:

Finished steel (per lb;-)-—
Pig iron (per gross ton)

METAL PRICES

6

ice

PURCHASES

&

Adjusted

BRAD-

INC

COMPOSITE

'5,217,950
v..

188.5

195.2

—------—---

100)—Month

SERVE

6

228.4

-•

ice——!

and

and

=100—Month

•

137.3

240.6

—

Houseiumishings

DUN

EDISON ELECTRIC INSTITUTE:
,r

1.4.1

155.7

and, electricity

DEPARTMENT

367

——

—

electricity

CONSUMER

RESERVE
29

sweets

—

SERVE
;

———

——

oils

DEPARTMENT

(tons)

145.9

196.5

157.8

$105,388,00C

MINES):

(tons)„__

SALES

$97,298,000

~~rW

___________

(U.

$116,802,000
49,693,000

j>c

_

vegetables

Miscellaneous

$214,014,000
137,329,000

160.3

203.5

J

———_—,—!

and

Other

Dec,

—

——

-——:

—

Fuel,

NEWS

15:

—

bakery products

and

Sugar and
Clothing —

733,139

CITIES

LARGE

September

Products

61,988,000

792,339

163.8

-

MODERATE

FOR

IN

of

46,259
73,893

35,750

78,054

47,998

—•

56,747,000

706,018

S.

July)

loods

Nov. 29

Nov. 29

.

municipal

—;

Bituminous

;

..

INDEX

FAMILIES

Cereals and

.

Total U. S. construction—Private construction
Public construction

PRICE

Nov. 29

__Nov. 29

,U.

—

of

t

Gas

ENGINEERING

RECORD:

.

in

!:

items

7,693,000

82,092,000

aluminum

July

1035-39=100—As

5,354,000

84,777,000

virgin

,(
tiid

MINES):

(end

INCOME

All

OF

aluminum

CONSUMERS

4,794,570

'

of
of

of

Fats

Revenue freight loaded (number of
cars)™.
Revenue freight ree'd from connections
(number of cars)

(BUREAU

—Month

ASSOCIATION OF AMERICAN RAILROADS:

.

„

Ago

Nov, 29

__

COAL

>■-

Year

—

™—

distillate

Ago

—

__

;

fuel oil

Month

Stocks

(bbls. of 42 gallons each)
(bbls.)

(bbls.)

distillate

and

Week

97.7

1,710,000

fuel oil output
(bbJs.)
;
I
Nov. 29
Stocks at refineries, at bulk
terminals, in transit and in pipe lines—
Finished and unfinished gasoline
(bbls.) at
—Nov, 29
Kerosine (bbls.) at
-Nov. 29
oil

Previous

Week

;,V

average

(bbls.)

Residual

Gas

Latest

Production

Dec. 14

AMERICAN PETROLEUM INSTITUTE:

Gasoline output
Kerosine output

>

'

Steel Ingots and
castings produced

v-

"

The following statistical tabulations cover
production and other figures for the latest week or month available (dates
shown in first column are either for the week or month ended
on that date, or, in cases of
quotations, are as of that date):

AMERICAN IKON AND STEEL INSTITUTE:

<>

37

(2401)
V-

-

38

(2402)

THE

COMMERCIAL

FINANCIAL

&

CHRONICLE

of the present

high cost of govern¬
our foreign
relief program to others, will only

Let's Stay Free
(Continued from page 12)
and witnout violating the funda¬
mental principles of our free so¬
ciety or jeopardizing our political
and economic future.
Do

We

We

are

Need

restoration of at least

some

were

mention

reluctant

bonds—in

of

Hold¬

line

call

a

goods and services

with
on

currently
same

way

that money currently being earned
can be spent for these same
goods
and services.

Supply
free

ings

A

combination

earnings and wartime

creates

which

always
price in a

a

if

ability

an

exercised

to

its

to

of

farm

without

subsidies,

control

of

effective

or

the

price of manufac¬
without an equally
rigid control of wages. Rationing

disease

of

inflationary

in

pressure.

From the best information I

can

the

increase

not

goods available.

It is

supply

of

get, the immediate relief proposed
for
Europe is not substantially
greater in relation to our national

device to

a

years.

suit

of

clothes

to

On

wear.

the

contrary, the very fact of ration¬
ing of even a few commodities
well importantly reduce the
production of those commodities
may

within

brief period of time. One
result of rationing would

a

certain

be that

The

Inflation tends to dissipate
of a nation just as
undermines
the
strength of an individual. A tem¬

the

even

under
not

made

maximum

the

Marshall

4%

exceed

production.
such

been

of

that

proposed
would

Plan

national

the

It does not look like

a

but
to
eliminate
the
of the temperature by cur¬

causes

ing the disease.

Let's make sure
the lep¬

that

we

rosy

of Socialism or Communism

do

by using
duce the

not

contract

intended to

measures

re¬

temporary

temperature
without curing the

inflation

of

disease

big'percentage of Amer¬ work and production would mean
would be queueing up to an
extra IV2 hours per week for

icans
obtain

their

reduced

share

of

all

producers.
The real
concentration on

available goods rather than work¬

is

ing to produce

items

more.

We would

have more regulations and paper

less

work,

goods

and

services.

trouble

the

such

wheat

as

certain

steel,

and

where considerably more than 4%
of

production

is

apparently

The

re¬

dangers; of rationing and quired.
:
price control are being dramati¬
The situation reminds me of the
cally demonstrated in France to¬
story of the stranger who wanted
day, where rationing and price to cross a river. He
inquired of a
controls
imposed on food have native how
resulted in the black

markets, on
one hand, and a reduction of
food supply, on the other — be¬
the

the

cause

farmers

will

not

sell

deep

and

age
man

the

food

is

either

eaten

in

larger quantities and hoarded

on

the farms

into black

or goes

mar¬

kets, while industrial production
is hampered by underfed workers.

told that it

river

was

an

was,

aver¬

of two feet deep—but the
drowned trying to cross the

river!

their food for money with which
they cannot buy the manufactured
goods they need.
The result is
that

was

the

World

War

I Inflation

Greater

The inflation that has occurred

during and since World War II is
probably not as great as that

not

satisfy

peacetime.

It is

the

people

in

self-defeating in

that it tends to reduce production
and

available

supply while

ficiently distributing
ing shortage.
I

reminded

am

that

happened

little

over

two

in

of

an

an

inef¬

increas¬

incident

Washington

years

ago.

World War II lasted much

curred were in the order of
12 times

If

Following

way
of avoiding
inflation
and
high prices was to work tempo¬
rarily more than 40 hours a week

the

wartime
and

work-week of 48 hours
the prewar work-week of 40

hours.

A prominent labor leader
said to me in a small

that

great

We

are

still

a

burdened

with

the

of government, real wages cannot

be

raised

materially

without
working longer hours, .Any at¬
tempt to raise wage rates at this
time

faster

than

in hourly

crease

the

actual

only add to further inflation.

Wage pol eies, however, are not
the only important current con¬

the

another

causes

important

round of wage and price increases,
it will be a great price to pay for

portance.

perity of

more

concerned with both.

called

our

to

attention

The protec¬
consists of the devel¬

tive aspect

opment of sound employment and

personnel
that

plans

procedures

and

fair treatment

assure

in

em¬

ployment,
job
assignment
and
layoff, and in all other employ¬
ment

relations.

It

includes

also

resulted

from

'

tion

of

employes

the

Perhaps

and

Income

the

most

time,

how much

in increas¬

succeed

we

matter

no

-

important aspect of the protective
phase of employment security is

with

customers'

mands

tastes

constantly

ing the output of industrial prod¬

problem

ucts that do not directly enter into

ment and income of

of

and

de¬

changing,

the

stabilizing

ordinary

employ¬

household

increases

will

not

recent increase in living cost has
resulted from increased food costs.

processes.

The

tices

people employed in industry

cannot eat the

typewriters

or

steel, automobiles,
furniture they help

to

make.

of

the

wage

first

postwar

increases,

wages

again increased substantially
As a result, there was

last spring.
a

further

prices.
that

It

a

increase
was

in

costs

and

hoped at the time

year's

high
production
would reduce shortages and sta¬

bilize

the

country's economy by
stopping the wage-price spiral.
Perhaps there was some wishful

In

with their

period

a

ordinary

hold budget costs.
prewar

experience
to

more

it

is

house¬

on

their

volve

Externally, it

customer
or

or

consumer

may

in¬

supnlier prac¬
It

customs.

is

further complicated by many and

frequently conflicting

governmen¬

tal and trade union policies.

will

gains

represent

in their real standard of living at
the prewar rate.
vr:
All of us, I

the

of

sure, want to see

am

however, it has

war,

impossible

rapidly

wages as
average

can

the

of

man¬

be done.

Fur¬

area

before

to

raise

real

as we

did

the

the

war.

on

During

open to every worthy em¬
ployee, and to do all we can to
assist these who aspire to these

opportunities.

Only in this way.,
employees feel that progress

will

is

matter of personal worth and

a

effort, and be willing to make the
effort
to
equip themselves for
these

opportunities

with the best of

ditions.

improving
they contribute

their own position

Inflation
Just

and

business

to

period

security.
inflation,

of

increase

in

produc¬

tivity and more has been absorbed

During

a

accounted

profit*: must be above average to
maintain
industrial
production,"
business activity and correspond¬
ing employment at high levels,
because

it

dollars

to

takes

and

more

maintain

the

more

same

amount of

employment, the same
physical inventories, and turn out
the same amount of goods.

Likewise, improvements and

.

placements

of

plant

and

re¬

equip¬

depreciation

dollars required must come from
increased profits or be obtained
additional

possible

benefits

capital.

new

hazards of going into debt
as

great for business

for

individuals.

are

The
just

they are
only other

as

The

alternative is to restrict the

ical

activity

phys¬
employment in

and

line with available capital in the
business.

This

is

why

reason

achieved

basically
nation

no

prosperity

the
ever

through

in*

flation.

The effect of the current infla¬

tion

on
the capital problems of
industry is dramatically illustrated
in a recent study by the Depart¬

ment of Commerce.

the corporations
a

whole

had

It shows that
the

of

net

nation

as

earnings in the

first half of 1947 of $8,400,000,000
and

depreciation

reserves of $2 $10,400 000,000 all
told, to finance their requirements.

000,000,000,

Out

of

paid
or

or

these

net

$2,900,000,000

35%

of

the

earnings they
as
dividends,

total—about

half

the percentage usually distributed
to stockholders.
This left them

$7,500,000,000
for
carrying
the
higher costs of inventories and re¬
extent placements of tools and equip¬

worth

that

the

effort.

each

the

To

makes

management

progress

eration,

this

In

will

progress

the whole

over

be

made

attention

should be called to two legal com¬
plications in the development of
better plans and

two

items

000.

So the nation's corporations

all

used
serves

country.

connection

ment. But the actual costs of these

programs of em¬

required

their

and

The

first

is

that

serves

laws

present

tax

plans that require the

accumulation of
these

the

do

reserves

not

established

because

recognize
for the

re¬

$11,000 000,-

depreciation

half the

dividends
other
from

and

$31/2
the

had

billion

banks

or

re¬

amount that

ordinarily would be

used to pay
obtain

to

an¬

borrowing
by selling se¬
by

curities.

and operate

our

and

by the high
ccst of business living and threats

threatened inflation

all

are

eco¬

managers are worried

sound

hours.

worried

arxious about their personal
nomic security, bus'nessmen

laws make it difficult to establish

40

are

by the high cost of living and

creased

war,

Profits

workmen

as

ployment and income stabilization.

working more than
During and since" the

keeping

to the greater well-being of all.

the war, the purchasing power of
workmen was maintained and in¬

by

in

American tra¬

our

In this way by

that will result from further prog¬
in this field are more than j

ress

in employment stabili¬
$'%{
zation within its own area of op¬

the living standards of workmen
continue to increase.
Since the
been

be done." Within the

agement, much

perhaps thermore,

expect them also to
than this—to have in¬

that

creases

prewar

Based

natural
want

of

ment

factory work¬

ers is complex.
Internally, it re¬
budgets,
bring quires far-sighted management
down
living costs soon or fast, analysis and planning of products,
distribution
because the largest part of the and production and

the

these

ity of opportunity to its fullest,
by keeping the door to advance¬

as

immediately

and

present

It
of

management to develop the secur¬

provisions made for them through
and
normally
re¬
tained
profits
in
the
business.
During such a period, the extra

in a, period of
being particularly stability of employment and in¬
come. In a changing economy with
sympathetic
to
their
problems.
Rising food, clothing and housing new products and processes con¬
displacing old ones and
costs affect employes immediately. stantly
At

eco¬

assistance

'

inflation

greater

the

existence

Industrial managers cannot help
being concerned about the posi¬

one's

ment cost more than the financial

in
protection against
ordinary hazards of oersoral
period. There
through benefit plans
is no reason why we have to re¬ such as life, health and accident
peat such an experience, but to insurance.
avoid it requires political
and
Stability of Employment
business
leadership of a high

have

to

the inflation of that

demonstrate

nomic and,
hence, social worth.
is one of the responsibilities

in¬

productivity will

ployment relations is of equal im¬
> There
are
two aspects
to this matter of employment se¬
the privilege of helping others. curity—the
protective
and
the
The ominous threat to our pros¬ progressive. Management must be
rope

end

a

I had

between

pressures

have understood the problem and
have handled them somewhat bet¬
ter than did their fathers a
gen¬
eration ago.

round

compromise

or

great.

inflationary

were

a

as

10

In other words,
have
been much greater but Americans
the

made the suggestion that the real

as

war

of

It is
rising
living costs, it is natural for them clearly not a simple task. How¬
which occurred in a comparable
is not made by
to expect wage adjustments nec¬ ever, progress
period during and after World
essary to keep them at least even simply saying that "nothing can
War I.

Rationing is no solution for the longer and importantly involved
problem, since to partly reduce more of the world than did the
consumption
through
rationing first World War. The debts in¬
will

diversion

temperature. siderations in employe relat:cns
the contemplated aid to Eu¬ The security and stability of em¬

causing

staggering amount stated j order.
that way, but even 4% in terms of

a

history—a

highest cost of government in our
history. Until the foreign nations
are able
to get along without so
much of our help and until we
perature, as all doctors know, is
not a disease in itself. Wise doc¬ succeed in reducing the high cost

conceded

point has

in

the

resources

inflation has been
by Presi¬
dent Truman, as well as by other
distribute goods according to a
output than the value of the net
political leaders of both parties.
pattern determined by political exports to these same countries
planners rather than by the Amer¬ during the last two years. It is Many of us remember too well
ican public's vote as customers. true that what we have been send¬ the depression, unemployment and
Rationing will not give us one ing abroad is in part responsible hardships that occurred two or
three years after the end of World
more bushel of wheat to eat, one
for the price increases during the
War I, and which are generally
more ton of steel to
use, one more last two
will

increase

temperature

tors do not attempt to cure a tem¬

imports importantly increases th.s

tured products

sickness

or

perature

fullest

further

a

required
deal of
our
productive facilities and ef¬
one's forts to non-productive purposes.

to a fever. It is a
sign of economic ill health just
as a temperature is an indication
compared

buy,

control and the control of
prices but, like certain facts
of life, these are not being dis¬ government units or
agencies are
cussed openly and frankly.
All willing to
reduce their current
students
of
the
problem know purchasing, the pressure on prices
that even with well-policed ra¬ is bound to continue.
It is true
tioning there can be no effective that whatever aid we extend to
price control of farm products Europe beyond the value of our
wage

be

sav¬

extent, would greatly exceed the
current ability to produce. Unless
individuals, corporations, and all

to

stop the inflationary
in living costs for all.
we must all try. People
We are still trying to clean up
instinctively fear inflation as they
do a fever. In fact, inflation may the aftermath of the greatest war

a

demand

and

market.

current

contribute

body.

into balance at

come

the cost of

ment and

mediately
trend, but

the

Reduce Current Purchasing

of the

predict¬
ing
10,000,000
unemployed
and
troublesome
surpluses are now
loudly demanding rationing and
bureaucratic
control
of
prices.
is

these

their stated value—have

wartime controls. The same groups

There

of

being produced in the

Controls?

being told that the sit¬
uation we are facing as a nation
is so critical that it requires the

who two years ago

paid by issuing bonds.

was
ers

the

New

The balance of the cost

went.

we

Thursday, December 11, 1947

Since

tinue

rationing

nor

to

economic
without

solution
we

try to solve
and

neither

is

effective

must con¬

our

political

a

for

present

problems

surrendering our tradi¬
tion of such plans as an ordinary tional liberties. This requires that
Thus, there
we
operating
business
expense
at
the
accept
our individual respon¬
nothing left over to in¬
but these higher industrial
I
time they may be set uo. A^ain, sibilities which go with these lib¬
wages crease
living standards, especially
cannot be held to be
entirely re¬ since we
better. You talk like a Communist.
promptly returned to the rigid provisions of the Wage-Hour erties. But in the fight against in¬
sponsible for the increase in the
By the way, you've been in Rus¬
40-hour week after the war. As a Law with respect to the payment flation government has the great¬
cost of living, particularly in food
of overtime severely restrict the est
sia; what do you think of their
result, the two rounds of wage in¬
responsibility, since the pres¬
prices. They contributed to in¬
possibility for employment and ent inflation and the continued
creases made since the war have
system?" He said, "Frankly, they
creased food prices only to the
income
stabilization
for many con¬ threat of more inflation have re¬
have
a
marvelous
seriously contributed to further
system
for extent that
they increased the de¬ price inflation.
cerns. These laws should be modi¬
sulted directly from governmental
equitably distributing nothing."
._-y;:.v/V-'-V;'
mand. The reported
crop failure
fied so that they will promote
policies, particularly tax and fis¬
If there were no European re¬ and the
Increased Income Without
continuing political de¬
instead
of
restrict
constructive calpolicies.
lief problem, we might still face moralization in Western
Europe,
Increased Costs Needed
management
efforts
in
this
field.
the threat of more inflation or a the
delay
in
negotiating
final
:
To increase income without in
The
p
Jobs of Government,
- >: •
progressive aspect of em¬
continuation of the wage-price peace
treaties, the adverse weather
The first job of government is
spiral, due to the very real short¬ which reduced our own corn and creasing costs and prices is the ployment security is that of op¬
only solution to the problem. For portunity for employees to pro¬ to make real progress in reducing
ages created during the war and oats crops are the
principal rea¬ workmen to expect
wage increases gress and advance.
There is no the cost of government.
This re¬
—perhaps even more importantly sons for the increase in food prices
under present conditions that will
security in a changing world as quires both an actual reduction
—due to the fact that we
only during the last six months.
provide
important
increases
in great as that which comes from in expenditures and an increase
paid, through taxes, approximately
With
this
unfortunate
world living standards or,
through such opportunity to qualify for a better in the efficiency of government.
one-half of the cost of the war as
situation, perhaps we cannot im¬ wage increases, to seek to shift all job—to be given the chance to In other
words, fewer taxpayer
I

group that
unemployment
30,000,000 people.
good naturedly said, "You know

of

was
as

promoting

many

as




thinking involved in the situation

by the highest cost of government
we

have

has been

ever

known.

onera-

Volume

~

dollars

166

must

Number 4654

THE

Home—One

be

spent and we
better value for the dol¬

must get

of

prices

progress

surplus money

In recent years all the
made in increasing in¬

as

the

rangement of work has been more
than absorbed in the higher cost

selves—only

war.

of

This

oart in

be reversed and our increased
productivity devoted to raising the
general standard of living of the
whole country.
>•, >
;

1 a lion.

now.

The second job of government
is to'adopt measures that will en¬

creases

,

trend

..

.

Only

in

particularly in
duce
Tax

reforms

that will

ways

industrial

costs

and

and

na¬

money

spent

by

government, ultimately is paid out
as wages and salaries.
The other

ac¬

10%, on the average, must be left
in the system to provide the in¬
centive to make it work. No na¬

to

help people to be

tion

can ever

get

poor

eliminating
law

and

efficient

more

regulation
impedes production

that

every

distribution and thus

The

government

unnec¬

must

killing
a

pigs

raise

to

job-rationing

The

.

a better
Today the situation clearly
calls for- a repudiation of these
reactionary and inflationary pol-

|

Helping Problem of Shortages

government.

To

do

(1)

sound boom that

an

nation

already

we

!

un¬

That

debt.

debt

is

As

deeply

are

are

to

r:

tories—rInventories

increasing

in

total,

have

ended.

The

since the
pipe lines should

be full

and

goods should

ever

war
now

now

be

business, and

employment of
future adjustments that may

the

shortages created
keep inventories

fpadq
by the

To

increase

turnover

is

down
a

par¬

busi¬

(9) Avoid Waste—In this period
of
shortages of all kinds it is

particularly important that all of
do everything we can, both in
business and personal affairs,

to avoid

wasting anything of value
—food, fuel, materials and time*

a

in

The slice of bread, the bar of steel,
the shovel of coal alone may seem
too small to be worth saving. But

(2) Avoid Speculation!—The fu¬

ings,

speculative

is

us

will

enough

without adding to '< our
problems and our nation's prob¬
lems by speculation

idea

that

we

based

in

are

be

never-end¬

a

multiplied
amount
real

a

to

help.

That

sort

of

will only guarantee

(3) Insist

On

a

A

speculation
crash.
«

we

as

nation

a

enough to go

Reduction

costs

ernment

than

a

that

we

are

Even

not

rich

that

take

quarter of all

It

the wealth

millions,
total that will

a

is

We must increase

machine,

per

per acre.

This will

hour,

goods at less cost.

the

only way we can get
prices
without
lowering
Our prewar rate of prog-

wages.

in this regard was a little less
than 3%
a
year.
This progress

I may
on

slow but it

seem

the

average,

each

means

that,

generation

particular gov¬ 'has had twice as much as their
ernment activity is desirable in¬ fathers did 25 years before.
No¬
dependent of cost.
The question where else in the world has any
not

whether

is simply: Is it worth what it costs

nation
such

be

our

(4)
r

any

and can we

afford it?

test.

4

-

Insist

That

This must

/• -

-

Our

.

I see

Foreign

Trade Be On A Two-Way Basis—
Without

questioning the need to
contribute help this winter to the
desperate peoples abroad, the fact
remains

that

relief

that

fails

profitable employment op¬
portunities will only add to later
despair. These nations cannot af¬
to remain

continuously

charity basis with

Nor

us.

on

a

can we

long afford to be almoners to the
world.

Our foreign aid

predicated
work

time

so

our

us.

must be

rehabilitation

friends

the things
value for

from

on

that within

a

and

reasonable

may pay us

with

they produce in equal
the things they need
-

(5) Conserve Our Spending At




of

of

and

maintained

increase

in

the

living of its people.

progress

why this marvel¬
cannot be continued

for the next

100 years if we pre¬

ous

serve

no

reason

our)

free

institutions

and

nromote the initiative of the mil¬

lions.

'

:

to

create

ford

rate

standard

;

-

achieved

a

While

faces

they

the

are

problems
large and

our

nation

important,

be solved in the same
produce an automobile or
other item produced by mass
can

way we
any

production.

Essentially this con¬
breaking down the whole

most not only for himself but will

as "emergency
money
enjoyment" husbands

real

The

the

ancient

we

conditions

ness

made

was

October together with

1939

*

'

.

Total

Total
Durable
Nondurable
Minerals

;

—

...

After

186

182

*192

190

—

goods—
-

Total

*195

188

*198

196

191

218

214

*224

219

215

171

168

*177

177

172

♦154

153

145

*157

158

147

t

184

138

friends

II,

,

.

All

I

have

I

States, and I
fortune

owe

To
to

durable

by

life

and

at

second

value

convert

155.7

149.1

*156.8

156.7

149.6

179.1

173.8

*181.0

179.5

173.9

•137.1

137.3

129.7

*137.8

138.7

130.4

'

.

t

337.2

—

145

142
291

1

230

372.8

328.1

302.4

258.3

139

156

153

149

258

♦298

299

278

t

257

267

237

u

292.8

t
t

'

>

'•

•

••

♦275

durable

total

in

shown

contract

Indexes

shown

Book,

multiply

averages,

centered

Chart

Reserve

by .152.

;

moving

three-month

on

To convert indexes to

for 37 Eastern States.

total by $410,269,000,

Chart Book,; multiply

Federal Reserve

in

Federal

in

and minerals

based

and minerals

nondurable manufactures,

manufactures,

index,

nondurable by .469,

month, of F. W. Dodge data

figures,

$184,137,000 and all other by $226,132,000.

index, without seasonal adjustment, and payrolls index

Employment
Bureau

compiled by

Labor Statistics.

of

INDUSTRIAL

States.

to

United

PRODUCTION

(1935-39 average=100)
;

Oct.

184,

„■

*

hear til

.

Electric

——

Machinery

———.j.

—

equipment-

Transportation

and

Smelting

Furniture

224

214

195

184

177

171

184

177

171

507

477

369

507

477

369

*278

276

268

♦278

276

268

♦234

228

237

*234

228

237

198

Plate

glass

products——

Clay

—

Rayon deliveries

—;

143

136

*168

164

155

211

209

155

;

*212

158

156

151

156

t

198

181

♦158

160

149

*166

166

158

221

212

*231

225

218

229

241

*227

229

241

♦158

169

♦163

*158

:v

158

169

139

130

155

139

130

155

278

279

248

278

279

248

178

•158

178

t

*158

t

121

117

t

120

cfvt

i 120

97

t

118

98

131

103

t

128

104

103

78

t

101

80

t;

(i Calf and kip leathers

United

142

*141

127
■

167

200

leathers

hide

Cattle

150

151

products

Tanning

182

*150

>
,

171

—i—

textiles

Wool

Leather

*176

136

203

♦163

-

168

140

184

t

,

Cotton

182

'

156

■'<:

products
consumption—

174

♦203

*227

and

t

128

*225

Textiles

184

164

prod.

asbestos

185

174

*168

Gypsum and plaster products

Abrasive and

185

198

*199

*130

Cement

:

''

♦143

and glass products

Stone, clay

183

188

t

195

♦176

——-

184

183

t

products..*^.--.

Lumber and

''V,

Oct.

214

Nonferrous metals and

products
refining—

-

-

Sept.
195

188

,

*199

Automobiles..,...-——————.

*204

»

224

t

Open

1946

-1947'-

Oct.

<195

*204

steel—————

and

—Seasonal Adjustraent-

1946

Sept.

Oct.

MANUFACTURES
Iron

Without

;
Adjusted for
—Seasonal Variation-1947-

New

to

the

140

tData not yet available.

points
.379,

residential by

long

United

to

136

197

■

Construction

ready to give my

am

168

t

NOTE—Production, carloadlngs, and department store sales Indexes based on dally

'

After

the

t

148

'

indexes

.

the

140

195

the

York they found they could get
only $2.75 in American dollars for
these British
pounds. V This did
not happen years ago; moreover,
it did not happen in China, Ger¬
many, or even
France.
It hap¬
pened last week in New York
City.
-1
;

believe in

168

t

•«——

.•Preliminary.

1

returned

t

Department store stocks, value

cent.

a

get dollars, but upon
England
to
get
the
money, were told they must be
paid in pounds. When my Glou¬
cester

145

•156.4

Freight carloadlngs

negotiations (the British are won¬
derful traders) a price was agreed
upon.
The owners, naturally ex¬
to

t

183

.

Department store sales, value-

Some" English invests "have
endeavoring to purchase two

to

'

*180.9

been

going

•

'

incident.

pected

184

192

goods

theoretically stabilized
Ap¬
parently, however, this is a ficti¬
tious amount, as illustrated by the

trawlers.

Oct.

Sept.

*222

———————

Durable

was

Gloucester

Oct.

,♦173

———

at $4.03 in American dollars.

following

Oct.

Sept.

♦189

—

Nondurable goods

them at
probably

War

World

1946

1947

Factory payrolls—

fluctuated from $2 to $3, according
to the fate of the British Navy or

Army.
pound

*

..

Nondurable goods

nearly $5 in American
During World War II, it

currency.

Without

—Seasonal Adjustment—

Factory employment—
Durable

Up until World War II, the Brit¬
ish pound has been the standard
currency of the world, and it has
for

payrolls:

Oct.

————

—

other

All

averages.

sold

and

1946

'J

that it takes about 300

means

employment

for construction contracts;
100 for all other series.

Construction contracts, value— •

(Continued from page 8)
point where it is difficult to get

of

INDEXES

—Seasonal Variation—

*

Total

are

follow:

Manufactures—

Declining
Money Value

one-third

'

■.

industrial production—

Versus

They

The indexes for

time.

same

year ago,

1947-

Gold, Silver, Diamonds

about

System issued

•

Residential

price.

Reserve

Adjusted for
;

,

pestilence.
So I hope you all agree with
me when I say "Let's Stay Free."

any

100

average =

1935-39 average =

!

and

accept

a

average»100 for factory
1923-25

underfed, underclothed, embroiled
in wars and surrounded by famine

to

month and

a

BUSINESS

; V

which', for over 6,000 years, has
stagnated
human
progress
and
kept the vast majority of people

Frenchman

Christ¬

The Board's customary summary of busi¬

public at the

delusion

World

Old

a

gift.

monthly indexes of industrial production, factory em¬

ployment and payrolls, etc.

falling into

are

good diamond ring for

a

mas

Board of Governors of the Federal

Nov. 26 its

on

individual

and

-39

Federal Reserve October Business Index

millennium

•-

117

94

67

95

67

t

118

141

t

115

141

t

*121

130

t

*121

130

Manufactured food products—
Wheat flour——:—

•155

158

146

*166

182

158

♦139

137

135

*147

the
Meatpacking —;
Other manufactured foods—
world, and what MAY happen in
;t":Processed
fruits and veg._
the United States.
Certainly, our
Paper and products
dollar, like the money of all other
Paperboard
countries throughout the ages, will
Newsprint production
gradually decline in purchasing Printing and publishing
Newsprint consumption—
power. How far this will go, no¬

♦140

146

115

*142

♦160

*163

154

*142

153

167

States:

clients and

I

all

over

the

rest

and

Sheep

am

call to their attention what is hap¬

pening

Goat and kid leathers—

unfair to my
readers not to frankly

But,

leathers-

lamb

Shoes

—.—-

of

,

.

;v';\

—

—

Petroleum

body knows.

and

Gasoline

What
selves?
duce

can

we

First,

the

U.

do to

we can

S.

protect our¬
work to re¬

and increase the U.

S.

production

of goods through better work and
new
inventions.
When
talking
with

coal

!;

—

By-products—,——
Beehive—

Chemicals

——.

—.——

——

Rayon —
;—
Industrial chemicals
Rubber products—

—

—

157
182

91

97

i':

-■'7* t
'

.

;

-

117

*178

173

*183

298

216

152

144

143

136

•*195

172

184

85

91

132

♦151

:

150

•

,

157

152

182

172

97

85

145

135

138

131

119

145

132

125

J,''t

*202

♦179

t

*202

♦179

♦162

162

145

*162

162

145
167

...

t

170

167

t

170

"V'-: t

162

160

t

162

♦438

427

406

*438

427

406

*250

249

240

248

*247

'
1

238

295

*295

160

257

♦295

295

257

♦423

425

402

*423

425

402

♦220

216

234

*220

216

234

*162

150

;

clients

and refugees from
countries, they emphasize
the importance of every family
owning more real things, includ¬
ing
a
small home
away
from
bombing danger with fertile land,
fuel and other useful commodities,
other

(•':

Whether I talk with

a

-•

V :0

MINERALS

•

160

150

*162

160

*162

161

160

*162

161

Anthracite

*126

122

124

♦126

122

124

Crude

*165

164

149

*165

164

149

t

111

111

t

144

126

t

298

252

155

Fuels

—

—

Bituminous

Metals

coal

petroleum
—

♦Preliminary.

together with a few jewels, espe¬
cially gold, diamonds and silver.

' tData not

.

opinion

that

Remember,

thereby assist solving the problem mending
of the whole
country.
General thing else

new

as

I

not
diamonds
am

or

CARLOADINGS

(1935-39 average

<=

100)

156

153

155

156

153

Coke

192

180

183

188

178

180

Grain

152

137

142

152

153

142

Coal-

Livestock
Forest

—

products

Miscellaneous

Merchandise,

recom¬

l.c.l.

u

104

105

128

161

139

197

t47

149

146

155

161

154

170

181

157

235

272

216

149

145

139

163

157

tl52

75

73

79

78

77

82

tRevised.

any¬

investment for profit.

.

160

yet available.
FREIGHT

:

German or

Chinaman, a Frenchman or Eng¬
lishman, they are unanimous in
the

'!>

—

—

t

184

•148:

products-

——

Coke

-

Government debt

gold, diamonds
silver are the
into small pieces which can be and
only things
efficiently handled by the worker which, at all times, are worth
on
Hence,
the
jobv Thus, each of us by something, everywhere.
devoting his efforts Jo his own these are known as "emergency
particular job will accomplish the money."
sists of

But

me.

and

1

responsibility,

I

v

i ress

more

The question is

us .more

lower

'

produce.

dollar and

per

| give

in

—

forever with gov¬

on

,

,

the Cost of Government

the

-

ing boom, or that we will be smart check inflation.
enough to get out before the our output per
crash.

by

(10) Increase Productivity—In¬
creasing our productivity is an
absolute requirement if we are to

the

on

to

a

This

.

ture of each of

the

to

(2403)

Almost everything looks too high

But

francs to buy one American dollar.

prosperity
living which we

;Of; every farri^
ilyv
We cannot justify second
there are more than 140 million
mortgages to buy luxuries..
Americans and these small sav¬
v

improved.

be

imagine that there is

postwar

(5) Control* and Reduce Jnven-.

our

gage^out the future

•

our

of

us

first mort¬

a

the

standard

we

.

ticularly sotind job for all

by unsound credit. Only by liv¬
ing within our means can we help
the country and ourselves.

seriously
country is perfect

self-reliance

for

worth

if

nessmen at the present time.

not financed

was

j

through substituting governmental
control and centralized authority

harder

land

,

been

never

would

us

cut

by the war,

up

Keep Ourselves Out of Debt
has

short

longer' and

war.

part, we should do the following
things: •
r
—There

that

we

a

be required, .when .we havp

our

v

of

cannot

a

iany

As

inflation.

and

when

we are trying
the shortages created
all of us must work

on

of

businessmen,
citizens, we have
re^pr risibilities to help solve the
problem of shortages and to avoid
additional

None

to make up

'nventories will reduce the impact

and

managers

(point

was

aver¬

working 40 hours a
working more than 10

coming out in direct proportion to
the raw materials going in. Lower

But in our fight against infla¬
tion. we cannot leave it all to

agencies

same

facing a big, tough
job.
He told us
one day in Detroit that the
only
way to eat an elephant was to cut
it up hi small pieces and get a
lot of people chewing at it.

situation exists and

been

■

other

is

the

on

hoped for and dreamed about dur¬
ing the war." t-/\
J^
V- -, ^

living.

and

person

week

and

skilled workers, to earn

Congress

age a

achieve

penalty for extra hours of work
interferes with the rights of many,
particularly of lower paid and un¬

icies.

he

production

war

While this

prices.

measure.

for

less than 30 hours to support him¬
self and his family. "

;

example, the 40-hour week
is a heritage of the days of
planned
scarcity* uf plowing under cotton,
and

only

more

hours to support government and

For

It is

when

Total

ernment means that

supporting special interest groups

;

paying

Temporarily Work Longer
—The present high cost of gov¬

cease

•

by

—

can

CHRONICLE

(7)

that require employers and their
customers to pay for work not
performed or to pay excess prices
for goods and services.

get rich—it

producing less.

essarily raises costs.

\

the

including

taxes

and

The third job of government is
render every assistance it can

by

-

per cent of

income,
as

costs

:

to

and

3

raises

'

FINANCIAL

ing the war, made this

claim

should know by

us

only

collected

complish this.

:

our

Vf.

Ninety

tional

re¬

to

un¬

&

Campbell, Chief of Ordnance dur-

checking the spiral of in-

prices.

prices.

required

are

our¬

we

that simply raising all wages
faster
than
our
production in¬

,

private
enterprise,

productive

restrain

as we

as

Down—All of

courage the investment of

capital

created during
that direction lies

(6) Keen Our Cnsts and Prices

-

<

signs
rising

postpone
necessary buying—will we do

must

government.

steadily

we

In

,

isaster.

certain

spend too freely the

we

dustrial productivity through the
of better tools and better ar-

use

the

inflation.; is

lars spent.

*

;

of

COMMERCIAL

NOTE—To convert coal and
in

Federal

Reserve

Chart Book,

in total Index, shown
miscellaneous by .548.

miscellaneous indexes to points
multiply

coal by .213 and

*

♦

40

THE

(2404)

COMMERCIAL

■

"

:

"

CHRONICLE

FINANCIAL

&

Thursday, December 11, 1947

r

Securities

•

Acme

Broach

Corp., Ann

J

•

Arbor, Mich.

V

2,

r

Co., Ann Arbor. To build factory, pay obligations..
for-working capital. ; ./;;// ;4
/:/ ./.V
v V*;*'

and
and

All American

,

^

American

.'•-/■

■r.-.f:-

"/::/

into
'

fire insurance

American

Dec.

1

Box

business.

Board Co.

•■

■ *

price of the

determined

Central

'

Co.

-

only

basis

'

each

Schaefer
Chicago.
Offering—To be offered publicly in units of one share,
of preferred and one share of ccmrpon.
Price—$5.10 per
unit.
Proceeds—To finance completion of its factory
and for working capital.
/••./

t

one-half

share

stockholders for subscription on the
share of new common for each pre¬

and

one-tenth

share

held.

construction

share

of

new

for

common

Price

by amendment.
Prorepayment of bank loans.

and

Light Co. (12/15) •
$6,000,000 first mortgage bonds, series B,
1977; and 40,000 shares ($100 par) cumulative pre-./

Underwriting to be determined by competitive*

bidding.

& Co.

Inc.

& Co.

basis of

one

expire

Dec.

shares

to

22.

be

Price—$13

publicly

share.

per

&

Bids—Bids

for

purchase of

securities

will

offered

by

be

«

•

American & Overseas Development
Corp., N. Y.
(letter of notification) $125,000 5-year 5% con¬
vertible subordinate debentures.
Price—Par.
Under¬

basis of

Nov. 18

writing—None.

Working capital and day-to-day

expenses.

■.

Electric

one

Offering—To

Co.

common

Apex Smelting Co., Chicago
1

(letter of

notification)

11,111

shares

($10

par)

Price—$27 a share. No underwriting. To
chase certain assets from National
Smelting Co.

common.

common.

No

un¬

on

the

stockholders

Holding

30,000

' '

•;

J?

|

(50c par)
by Public
To be sold

shares

-

share. Being sold

a

Corp.,

.f-V

V

'

_

Price

Elliott Co., Jeannette,

/

Nov.

://

'■ V..••••

.■'»

»•

.

-

,'T

•„/i«{.;

Inc.,

N.

Y.

V

inventory,

filed

20

(12/18-19)

Pa.

par) 5% convertible
Underwriter—F. Eberstadt
Price by amendment.
Proceeds
—For construction and expansion program, retirement
of demand note, working capital.
•
^
shares

60,000

($50

cumulative preference stock.

by

Proceeds—To finance construction.

•

& Co., Inc., New York.;

Fidelity Corp. of Michigan, Grand Rapids, Mich.
Nov.

justment for outstanding $4.50 preferred. / Unexchanged
shares of new preferred will be sold
publicly. * Price by
amendment.
Proceeds—To retire unexchanged shares
of old preferred.
Offering indefinitely postponed.

•

pur¬

$2.50

—

'

writer—Reich & Co., New York.. Purchase of
etc.
VV
//VV /r TT
V/V/:;/V

Cleveland
(Ohio)
Electric. Illuminating Co.
Sept. 26 filed 254,989 shares (no par) preferred, series of
,1947.
Underwriter
Dillon, Read & Co., New York.
Offering—To be offered share for share plus a cash ad¬

oper¬

notification)

of

Price

.••/

•

Haven, Conn.

New

stock

—

•

Dec.

(letter

common.

/•

Inc.,

J

share for each 10 shares held.

new

amendment.

M.

.

&

Dec. 1 filed 204 000 shares ($8.50 par)

-•

derwriting.

ating

2

Dec.

Industries,

Sept 22 (letter of notification) 65,000 shares of common
(par 100).
Price—65 cents per share.
Under¬

No under¬
writing.
Price—$100 a share.
Proceeds—To purchase
rolling mill* equipment and for working capital.
Gas

:/>T

'

Eastern

/:V Electric Steam Sterlizing Co.,

Nov. 10 filed 4,000 shares ($100
par) common.

Cincinnati

bottling plant.

a

■

Wilmington, Del.
through registered brokers and dealers.

(CST) Dec. 15 at 20 N. Wacker

Pa.

Pittsburgh,

(letter of notification) 50,000 shares of 6% pre¬
ferred ($5 par).
Price—$5.75 a share.
Underwriter—
McLaughlin, MacAfee & Co., Pittsburgh, to acquire and

Service

Unsubscribed
■

*

Doughboy Bottling Co.,

v'VV V,

underwriters. .Pro¬

ceeds—To be used for capital funds.

V

Oct. 24

•

Century Steel Corp., Hollydale, Calif.

Rights

Business—Manu*

/V //•/..w.. / ;'/./•• v/-

Dogpaw Gold Mines Ltd., Toronto
22 filed 1,000,000 shares
($1 par) capital stock.
Price—40£ per share.
Pro¬
ceeds—To develop mining properties in Flint Lake local*
ity of Ontario.
'r-V
li

■'

(12/23)

share for each two shares held.

new

working capital.

saws.

Underwriter—Tellier & Co.

equip

Co.
Co.

&

Drive, Chicago, 111.

,

for

and

Power &

received up to 11:30 a.m.

Nov. 14 filed 662,504 shares of capital stock
(par $2 50).
Underwriter—The First Boston Corp. Offering—Offered
for subscription by stockholders of record Dec; 1, on

•

is

Proceeds—Company

Oct.

-Vf

filed

penses.

common. Under¬

common

(jointly); Salomon Bros. & Hutzler. Price—By competi¬
tive bidding.- Proceeds—For property additions and ex-:
/
r

-

selling 20,000 shares and
the remaining 90,000 shares will be offered by stock¬
holders. The company will use its proceeds for plant

Offering—To be offered to 6% pre¬

Probable bidders include Halsey, Stuart
(bonds only); The First Boston Corp.; Blyth
and Harriman Ripley & Co. and
Smith, Barney
(jointly); Lehman Brothers and Glore, Forgan

Underwriters

ment.

facture of radial

ferred.

-

writer—Reynolds & Co., New York.'Price—By amend-

construction

21

due

—Gearhart & Co., Inc., New York; Herbert W.
<& Co., Baltimore, Md., and Comstock & Co./

>

one

common

Nov.

of

Pa. <( 1/5/48)

Inc., Lancaster,

110,000 shares ($2.50 par)

commission.

ceeds—For

(1/5-48)

5 filed

bid, that of Blyth & Co.,- Inc. and
Peabody & Co. was submitted and was rejected
They bid $13.75, less $1.75 under¬

of

ferred
•

the basis of

Price—Price

by competitive bidding and
will be supplied by amendment.

common

De Walt,

Dec.

company.

ferred and

on

held.

shares

determined

be

Proceeds—To finance construction program.

.

10 filed

Dec. 8
Kidder,
by the
writing

,

nine

each

for

Business—Public Utility.

program.

Power

by stockholders

subscription

will

bonds

Hutzler; Kuhn, Loeb & Co. Price—To**'
bidding. Proceeds—To ,

Maine

for

share

one

by competitive

construction

Central

Newark, N. J.

'-.y/

.

Serv.

160,000 shares ($10 par) common. Underwriting—To be determined by competitive bidding. On

preferred (par $5) and 100,000 shares (100 par) common
and an additional 285,000 shares common issuable upon
conversion of preferred and exercise of 35,000 common

American Insurance Co.,

/ /

shares ($7 par) common and $8,000,*
000 30-year first mortgage bonds. Underwriting — The *'

.

pet. 23 filed 100,000 shares of 6% cumulative convertible

stock warrants to be sold to underwriters.

Light Co.

(Ohio) .Power &

Dec. 5 filed 170,000

•

(12/18)

Furniture, Inc.

:

Salomon Bros. &

Nov.

filed

Americana

Pub.

Dayton

„

fered

V

100,000 shares ($1 par) common.
Under¬
writer—Paine, Webber, Jackson & Curtis, Boston.
Price/
by amendment.
Proceeds—To improve its plants and to
reimburse its treasury for funds invested in new sub¬
sidiary, American Pulp & Paper Co., Filer City, Mich. :
v

Illinois

•

Price—$35 a
V

Stuart & Co. Inc.; The First Boston Corp.; Blyth &
Co., Inc.; Kidder, Peabody & Co., and Smith, Barney
Co. (jointly); Glore,..Forgan & Co.; Lehman Brothers;-

finance

-

*

Central

be

'J-.j.';■

3

stock

common for preferred in 1945.
Proceeds—For corporate purposes.

sey,

(letter of notification) 2,500 shares of class A/
(par $10) common, 5,000 shares ($10 par) class B com¬
mon, and 11,250 shares 8%
($10 par) cumulative pre¬
ferred. Price—$240 per unit, consisting of 2 shares of class
A, 4 shares of class B and 9 shares of preferred. r-:JNo
underwriting.
For capitalization of company to enter
Nov.

r

Co., Springfield, ffl. * common shares will not be underwritten but the bonds l<
first and refunding mort- •, will be sold at competitive bidding. Probable Bidders—•
bonds, series B. Underwriters—To be determined v: Halsey, Stuart & Co. Inc.; Morgan Stanley & £0.; Blyth .
by competitive bidding. Probable bidders include: Hal¬
& Co., Inc. Offering—The common shares will be of¬

Florida,

//fe'/w

;</.l:

'

gage

*

of

Co.

Insurance

Bankers

Miami.

-

'

•-//>

"

Dec. 8 filed $10,000,000 30-year

l>e changed to American Steel & Pump Corp.) Under-.,
Writing—To be filed by amendment. Price by amend¬
ment.
Proceeds—To pay off indebtedness incurred in
the acquisition of the capital stock of A. D. Cook, Inc.,
*

holdings of

•

Oct. 30 filed 100,000 shares

Lawrenceburg, Ind.

Registration

INDICATES ADDITIONS SINCE PREVIOUS ISSUE

share.

Industries, Inc., New York
($1 par) common (name to*'

in

Callaway Mills, LaGrange, Ga.
< /'
'-Iv'-XT1, the warrants will be sold to the agent at 10 cents each.
Aug; 28 filed 123,306 shares (no par) common.
For
Under-., Underwriter—Coburn & Middlebrook, Hartford.
writing—No underwriting,
Offering — Shares will be /, working capital.
"i:
"•//•'•: : V-:. '/V/. •/// Tz V--; V:"//"/
offered only to those stockholders who exchanged their;

(letter of notification) 40,000 shares ($5 par)
common. Price—$5 a share. Underwirter—Dean W. Titus
Dec.

Now

26

and

notes

$150,000

at face amount.

5%

short

term

No underwriting.

and to carry on business.

ness

^

$150,000 6% long term

(letter of notification)

'

notes.
To be sold
To reduce indebted-^
*

*

•

Bluebook Associates, Inc., New York
Dec. 5 (letter of notification)
2,000 shares ($1 par) com¬
mon, 2,000 shares ($100 par) preferred and
2,000 shares
common
■

•

•

Codman &

Shurtleff

8

(letter of unification) a maximum of
10-year 5% notes and 5,000 shares (no par)'

to be issued to C. A. McGinnis in return for
idea

plan for publication of Home Maker's Blue Book.
Price—$101 per unit, consisting of one share of common

Purchasers

and

debts and other

share of preferred.

No underwriting.

For

notes

Colorado
Brown
19

&

Bigelow, St. Paul, Minn.

(12/16)

Dec.

receive the
proceeds, and

163,645 shares

are

5

,

•

Insurance
of

San

To

Dec.

pay

Colorado

Francisco

stock

(par $10).
Price—$25 a share. Proceeds—For
Business—Writes fire, automobile and

Co., Holly, Colo.

T

working capital.
insurances.

k

/

-■/■/

16

stock

debtedness

Corporate and Public Financing

the public.

•

The

:
-

■::
Boston

j: corporation j/:/ ::;:
-

:.

^

/

-r'r
■

New York

:.t

•«

,

.t-

and acquisition of

Dec.

Chicago and.other cities




$1,000,000 of 1%% loan
underwriting. Offering—To
be bought only by patrons and

*

acqui¬

8

•.

.

y •>

...

Danielson

•••'Pittsburgh

$25

Heating Equipment Co., Philadelphia
(letter of notification) 10,000 shares of capital
stock (par $25).
Price—$25. Underwriting—None, but
200 retail and wholesale fuel
operators and dealers will
-be asked to subscribe for the stock. • Working capital
I*

-

capital equipment./
.,•'■■>

.

.

■.

of

y tt

V.
•*

•.*.•

V
.

*•".*

•

Manufacturing Co., Danielson,.Conn.

1

(letter of notification) 20,000 shares ($10 i>ar)
preferred and.4,000 preferred stock option warrants^ ^he
preferred will b£ offered publicly at $10 a shaie^and
V

""v

"

'

IV V-DJh

'

York,

New

shares

for

D. Cleland Co.^
and Harold H.

Proceeds to selling stockholders.

each

31

26

Guardian
filed

36,000

Newark* N. J. (12/17)]

($5 par)
record

common.

Under-

Offering—Shares
Dec. 3

held.

shares

Securities

shares

on

Rights

basis of

expire

a

,

Corp., New York

($25

par)

5%'cumulative

preferred and 100,060 shares ($1 par) com¬
Underwriting to be filed by amendment.
Price—
preferred share and $10 a common share.
Pro¬

ceeds—For investment.

Consumers

Dec.

all

p.m.

mon.

and

Price—At face amount. Proceeds—For
sition of additional office and plant facilities.

--

Brothers,

offered to stockholders of

Nov.

No

may

per

convertible

members.

"

FIRST BOSTON

Common

Price—$1.25

filed "120,462 shares

First

1,1946. No underwriting

$1,000,000 4% non-cumulative common
par); $4,000,000 of 3V2% certificates of in¬

cumulative;

V

(EST) Dec. 16.
Unsubscribed shares will be
offered publicly.
Proceeds—To be added to company's
capital and surplus.

Cooperative Assoc., Kansas City,

certificates cumulative.
1

12

two

filed

($25

stock.

writer—Blyth & Co., Inc., New York.

3

Missouri

Oct.

Nov.

are

Pa.

30,000 shares of class B
share. Underwriters—•

(letter of notification)

Firemen's Insurance Co.,

Placers, Inc., Denver

Consumers
-

-

Lancaster,

Fuller & Co., Dunne & Co., James

Vermilye

.

Inc.,

Co.,

Huston & Co., Seattle.

Underwriter—None.
other

9

S. D.

taxes,

Electric

(12717)

common

common

of

letter of notification filed Aug.
and no offering price.
V

-

Co.,

common

of

(letter of notification) 32,433 shares (25c par)
capital stock being offered by officers of the company as
a bonus concurrent with the offering of the issuer under

,

Union

Gear

$100,000
common.

Dec.- 1

.

California

shares

device for internal combustion machines.

to be issued

exchange for outstanding shares of Quality Park Box
Co., Inc.; Consolidated Printing Ink Co., and John Beissel
Co.
Price—$9.50 per share.
V \

Nov. 28 filed 99,700 shares

50

No underwriting.
working capital.

Flexible

(letter

in

•

receive

notification) 2,500 shares ($100 par)/
4% cumulative convertible preferred.
Price — $100 a
share.
No underwriting as yet.
For testing of timing

filed

1,038,207 shares of common stock (after
split-up of 10-for-l). Underwriter—Otis & Co., Cleve¬
land.
Proceeds—874,562 shares of stock are being sold
by Charles A. Ward and other stockholders who will

will

$1,000 of notes.

per

op¬

of

eration of business.

Nov.

Inc., Boston, Mass.

.

Dec.

and

one

Fidelity

///••■//...

/

Volume 166 ..Number 4654

(2405)
neco .equivalents 50 cqnts).
Underwriting—No under¬
writing; " Offering-^For subscription by common' stock¬

NEW ISSUE CALENDAR

holders

on

owned.

Price—$5

the

basis

of

each IV4 shares
Proceeds—For lehaoiii union

share.

a

program.

December

n

12, 1947

11:30

bonds and 66,560 shares ($1 par)

$77.50

Hickok

k.r.^^r-..i.Common

December 16,

v'i■

1947;

:

•

Brown & Bigelow

Manufacturing

bond

••••

...Common

(CST)—

and

1

Co.,

Trust

Kilo

—Equip. Trust Ctfs.

*r

New York Central

Inc.,

Rochester,

face amount.

Fidelity Electric Co., Inc.—-CI. B Common

•

Dec.'

Northern Indiana Public

common

Service Co.—Preferred

Hotel
5

Bankers Bond Co., Inc.,

like amount of bonds due

a

.

Unsubscribed

Lowenstein & Sons,

shares

will

sold

.

"

.

Inc.* New York

Nov.

26 filed 20,000 shares
($1 par)
writing—None. Offering—Shares are

Under¬

be

Under¬

common.

being offered to
andemployees under an "employees
stock option plan."
Price—$21 a share.- Proceeds—To be
added to working
capital.
V,

at

certain

officers

,

Manhattan Coil Corp., Atlanta, Ga.

May 20 filed $500,000 5%

Keystone Corp., Pittsburgh, Pa.
notification) 10,000 shares (no par)
$7 each/ No underwriting. For alterations

serial

debentures, due 1949-

1957; 12,000 shares ($25 par) 5^% cumulative converti¬
ble preferred and 85,000 shares ($1
par) common.
Un¬
derwriter—Kirchofer & Arnold, Inc., Raleigh, N. C. Price
—The debentures at 102.507, while the

(letter of
at

andi mprovements on

Reading Tube Co...———_ -Pref. and Common

To refund

Dec. 31, 1947.

one share for each two held/.
Price at par.
Proceeds—To repay bank loans and finance
construction.

Firemen's Insurance Co.-^-—-Common

Louisville, Ky.

Underwriter—The

Louisville, Ky.

22, when subscription warrants expire.
Offering—For subscription to common stockholders on

17, 1947;:>

share.

(letter of notification) $182,500 of
10-year first
mortgage ^refunding 6% bonds, due 1958.
To be sold at

the basis of

December

per

Nov. 26

auction after Dec.

(EST)-Common

a.m.

None.

—

Price—$12.50

Louproco Realties, Inc.,

,

Electric Light Co.
25,000 shares ($20 par) common.

27 filed

writing

Equip. Trust Ctfs.

Northerp Natural Gas Co.,. U

writer—Ray T. Haas, Chicago.
General corporate purposes.

.

(Hawaii)

.

Oct.

(CST)

Corp. of America

Oct. 6 (letter of
notification) 24,000 shares of 5% cumulative convertible preferred stock
(par $12.50). Under-r

Ctfs.

Missouri Pacific RR.
Noon

-

postponed indefinitely.

Equip.

-

Lock Nut

..' New York
Sept. 19 filed 200,000 shares ($1 par) common.
Under¬
writer—E. H. Rollins &
Sons, Inc., New York.
Price—
By amendment.
Proceeds—The shares are being sold
by 36 stockholders who will receive proceeds.
Offering

International Great Northern RR.
Noon

Underwriting—Lobe, Inc.; A. M. Lind; and Gerry
Moore,
Seattle,,Wash.. For general corporate purposes.

all of

Price—

,

1

.

$1 per
To purchase sawmill

No underwriting.
working capital.

and for

Indianapolis Power & Light Co.——Preferred
Permanente Cement Co

capital stock.

$100 principal amount of

per

share of stock.

;

(CST)___—Bonds and Pref.

a.m.

•

Kayward Milling Co., Los Angeles
»
'
Nov. 24 (letter of notification)
$301,200 2% unsecured

15, 1947

Central Power & Light Co.

-

stock and $50,000 of 6%
promissory notes. Price-^5 cents
a
stock share and notes will be
sold at face amount.'

;

Frigidinners Inc.—————1-_—...,.."_Commou
December

Ddc;"

share for

one

Livingston Mines, Inc., Seattle, Wash.
i>(letter of notification) 200,000 shares (5c
par)

-

•

41

premises of Hotel Keystone.

preferred shares

December

18, 1947

American Box Board Co

Common

—

Elliott Co.

December 23, 1947

American Insurance Co.—

«'

\'v :/V

/

definitely postponed.;

January 5, 1948

X;

■

i)e Walt,; Inc,-™^

Oct.

9

Fischer

Baking Co., Newark, N.
^
(letter of notification) $299,000 5% cumulative
non-voting preferred. Price—$100 per share. No under¬
writers.
To refinance a part of corporate obligations
and improve employee and employer relations.
-

Nov. 17

mon.

tal.
•

Products Co.,

Detroit, Mich.
Oct. 21 filed 100,000 shares ($1 par) common.
Under¬
writers
Campbell, McCarty & Co., and Keane & Co.,
—

both Detroit.

a

share.

Proceeds—The shares

being sold by 14 stockholders who will receive

are
.

Price—$7

pro-

Bartlett,120 Broadway, New York. V /

/

new

stores.

Interstate

•

Frigidinners,

Inc., Philadelphia (12/12)
<
Dec. 4 (letter of notification) 75,000 shares ($2
par)
common and 15,000 shares of common reserved for issu¬
ance upon exercise of warrants..
Price—$2 a share. Un¬
derwriter—Woodcock, McLear & Co., Philadelphia.v To
pay off loan and for working capital,,;1,
j
.1 v ''y ; 1
.

,

,

Gabriel
Oct.

24

Co., Cleveland
(letter of notification)

and

2,132,223

and

shares

The SEC

t

the sale of the bonds.

Gamble-Skogmo, Inc., Minneapolis
Dec. 4 (letter of notification) 2,000 shares of ($5 par)
common. To be
sold at market through Carl M. Loeb,
Rhoades & Co., New York, as principal underwriter.
%

General

Instrument Corp.
Nov. 14 filed 150,000 shares of common (par $1). Under¬
writer—Burr & Co., Inc., New York.
Proceeds—Stock

being sold by four stockholders who will receive pro¬
Price by amendment.
Expected early in January.

ceeds.

.

.

Gerity-Michigan Corp., Adrian, Mich.
Sept. 29 filed 40,049 shares ($1 par) common.
Under¬
writer—Ames, Emerich & Co., Inc. and Dempsey & Co.
Price based on market: $10-$10.50 per share.
Proceeds—
The shares are being sold for the account of James
Gerity, Jr., company President. ;
-y'~

Greenwich

Nov.

25

Gas Co., Greenwich, Conn.
(letter of notification) 7,333 shares (no par)
To

common.

writing.

To

stockholders

pay

at

$14

a

share.

No

construction loans.

Nov; 13 filed 272,852 shares (no par)
underwriting. Offering—To be offered to
holders of record Dec. 16

on

the basis of

common.

one

new

No
share

held.

Rights expire Jan. 7, 1948.
Price
by amendment.
Company also plans to sell privately
50,000 shares ($100 par) preferred $4.50 series. Proceeds
—For

seven

new

construction.

Guyana Mines, Ltd., Toronto, Canada
shares ($1 par) common.

Nov. 26 filed 303,587

writing—None.

Price—50 cents

a

share.

~

Under¬

thereby."

be

-

industrial

No

per¬

.

*

-

filed

,

Boston

Bureau,

Inc.,

Washing¬

-1

For additions and replacements to its

: >

Co.,

St.

Louis

Nov. 28 filed 250,000 shares (no par)
lative preference stock, series B.

v

$4 dividend

cumu¬

Underwriter—Smith,

„

working capital.

Barney'& Co., New York.
Price to be filed by amend¬
Proceeds for general corporate purposes includ¬
ing financing new plant construction and additions to
present facilities.
Offering postponed due to market
ment.

Issue will

conditions.

■.,// -vj x::- /

•,

Co., New Castle,. Pa.

300,000 shares

common

stock

(par 50(J).

Underwriter—Lee Higginson Corp.
Proceeds
being sold for account of certain stockholders.

Stock

—

Nationwide Home Equipment Corp., New Haven,
Conn.
(12/18)

/
.

Nov. 19

Kansas Soya Products Co.,
Inc., Emporia, Kans.
Dec. 3 (letter of notification) 3,157 shares
($95 par)
a

(letter of notification)

100,000 shares of capital
Price—$2% per share.
Underwriter—»
Henry P. Rosenfeld Co., New York.
Proceeds — For
expansion. Business —Company sells furniture, house¬
hold appliances, etc., at retail.
stock

•

preferred. Price—$95

"

Monsanto Chemical

-

...

„

.

10

development.

underwriting.

property,

-

placed privately.

Nov.

Research

Middle States Telephone Co. of
Illinois, Chicago
Nov, 7 (letter of notification) 13,125 shares of common.

Sept. 25 rejected the bid

Inc.,

For additional

Bronze

share. Undewriter—Kenneth Van

(par $1).

,

,

.

Sickle, Inc., Emporia. For additional working capital.
North

Lewis and Smith Drug Co.,
Inc., Omaha, Neb.
1 (letter of notification)
$50,000 of 10% 10-year
debenture bonds. Price—$500 per unit. No underwriting.

Nov.

Dec.

Oct., 23

(Md.)

filed

debentures

underwriting.
000

of

above

49,000
and

per

ment

and

of

14,600

common.

common

Of

as¬

signed to the association by the Maryland Racing Com¬
mission.
Registration statement effective Nov. 20.

Co.,

Baltimore, Md.

Leeend
stock.

•

Gold

Mines,

Ltd., Toronto, Canada
($1 par) common treasury

Underwriting

Price^-50 cents

properties.

a

—

share.

To be supplied by amendment
Proceeds—To develop mining

shares

mining lease.

;

Indiana

of

com¬

Underwriter—Henry
For payment and develop-t

Public

f

v

Service

Co.

(12/17)

($20 par) cumulative pref4
Underwriters—Central Republic Co. Inc.|

stock.

stockholders of record Dec. 2
share for each
>

.

■■

Dec.

16.

eight

common

Unsubscribed

Price—$21

share.

a

on

basis of

shares

will

Proceeds—To

be

preferred

one

shares held.

Rights

offered

improve

expir^

publicly]

its

public

utility system. '
•

"

'

*
,

r'

^

''

»

Northern Natural Gas Co.

June '27 filed 300.000 shares

25,000

share.

New

shares

have been

a

Chicago; The First Boston Corp., and Blyth & Co. Inc.*
York.
Offering—For / subscription by common

the

be held by agent until
lapse of escrow agreement.
Proceeds—Proceeds will be put in escrow and will not
meet

Oil

cents

Oct. 29 filed 272,694 shares
T erence

will

a

of

Northern

Inc.

unit, consisting of $1,-

shares

100

debentures

American

(letter of notification)

White & Co., Baltimore, Md.

10-year 6% cumulative income
shares (10 par), common.
No

Price—$1,001.

debentures

$146,000

7

Price—90

mon.

drug enterprise.

Harness Racing Association,

$490,000

and

For

C

The SEC's action also held up

Automatics,

Johnson

underwriting.

.

Oct. 10 (letter of notification) 95,000 shares of common.
To be sold at market.
Underwriter—George F. Breen,
New York.

East

No

'

,

ton, D. C. *
'
Dec. 8 (letter of notification) 400 shares of
preferred.
Price—$100 a share. No underwriting. For research and

-

x

Johnson

Middle

share.

a

,

Proceeds—For

Hawaiian-Philippine Co., Manila, P. I.
Sept. 24 filed 500,000 shares 7% cumulative preferred,
par 10 Philippines pesos per share (currency basis one




on

be used before definite dates for

equipment and working capital.
.

effected

Laurel

stock¬

•

stock.

construction

equitable to the

sons

La.

common

capital

new

The SEC in its decision declared the price
offered for the stock "would not effectuate a
reorganiza-'
tion plan which would be fair and

For expansion of retail

Gulf States Utilities Co., Baton Rouge,

for each

under¬

par)

for

for the stock.

on

($3.50

retirement, finance

10,000 shares ($1 par)
behalf of Wm. H. Miller, a director of the
company, to be sold at market.
Underwriter—Sills, Minton & Co., Chicago.
Indefinitely postponed,
-

common,

common.
Price—$8.50
working capital.

working capital, v Bonds awarded Sept. 24 to
Halsey, Stuart & Co; Inc. on bid of 101.90 for a 3%%
coupon rate. Stock awarded Sept. 24 on bid of $4.05 per
share to Lehman Brothers,
Goldman, Sachs & Co. and
j

Wertheim & Co.

.

*\

Co., Dubuque, Iowa
May 13 filed $19,400,000 of first mortgage bonds, due
1977,

Underwriter—Clair
For working capital and

Cincinnati, O.

Melchoir, Armstrong, Dessau Co. of Delaware,
Inc., Ridgefield, - N. J.
Dec. 4
(letter of notification) 2.500 shares (no par)

Power

Proceeds—For debt

for $75 per unit.

common

•

including the financ¬
■;;/>

-

general corporate purposes.

Proceeds—To repay bank loans

Temporarily postponed.

shares of

S. Hall & Co.,

Department Stores, Inc.
Oct. 30 filed $5,000,000 15-year sinking fund debentures.
Underwriter—Lehman Brothers, New York.
Price to

ing of

vt_

i(

McKay Davis Inc., Toledo, O. >

Bids—Bids for purchase of stock will be
-received up to noon Dec. 15 at office of
Simpson, Thacher

ceeds.

•_

Nov.117 (letter of notification) 28,000 shares
(10 par) 5%
cumulative preferred and 20,000 shares
(no par) common.
To be sold in units of seven shares of
preferred and five

tion purposes.

be filed by amendment.

-_V

Martinez-Bell

'

'mining properties.

Brothers; Blyth & Co., Inc.;

and for general corporate purposes

preferred share and $15 a common
For additional working capi¬

Dec. 3

Interstate

Fraser

a

No underwriting.

Mining Co., Superior, Ariz.
"
(letter of notification) 22,900 shares of common.
Price—$1 a share. No underwriting. For development of

(12/15)

/ W. C. Langley & Co.; Shields &
Co., and White, Weld &
Co. (jointly); Otis & Co.
Proceeds—For new construc¬

&

Price—$100

share.

40,00u snares ($100 par) cumulative pre¬
'Underwriters—Names by competitive bidding.

Probable bidders: Lehman

...,

'

filed

ferred.

f

'

4*'>

Indianapolis Power & Light Co.

^Common

——

$4

indebtedness

-,

regis¬

>,

shares at

common

bank

Manufacturers & Jobbers Finance
Corp.,
•
!
Shelby, N. C.
V
Nov. 25 (letter of notification) 1,500 shares
($100 par)
'*5'%' preferred and 10,000 shares ($10 par) class B com¬

and Stickley
Brothers, Inc.,; both Illinois corpo¬
rations, and the Luce Corp. and Stickley Bros. Institu¬
tional Furniture Co., both
Michigan corporations.
In¬

Americana Furniture,\ Inc.^-i---Pref. and Common

the

and

retire

.

Manufacturing

Co.

...

.../Capital Stock

at par

'

exchange for their holdings

of four furniture
companies to be merged with the
trant. The merging companies are Toccoa

offered

Proceeds—To

and to
finance purchase of machinery and other plant
equipment.
■„
,. • J...
■,1.//•
, •
-'.v '

Under¬

Blosser, Chicago.;

Debentures and Pref.

—

be

each.

Price—$9.25 a share. Proceeds—The shares are being*
sold by four stockholders and
represent part of the stock
the sellers will receive in

preferred..

Nationwide Home Equipment Corp..-Capital Stock

Sunray Oil Corp

will

Illinois-Rockford Corp., Chicago
July 24 filed 120,000 shares ($1 par) common.
writers—Brailsford & Co., and Straus &

*

•

1

,

1

'■1

\
*

(12/16)

-Nov. 14 filed 710,500 shares of common stock

(par $10)]

Underwriters—^To

be

sold through competitive bidding/

Probable bidders:

Blyth & Co., Inc.; Dillon, Read 81 Co.

(Continued

on

page

42)

THE

42

(2406)

Inc.

Proceeds—Shares

Light

&

Bids—North

Co.

Power

by North American

being sold

scription by company's

Light &

American

ferred

Power Co. will receive bids at Room 2004, 60 Broadway,

Racing Association,

Downs

Inc.,

Cement

Oakland,

Co.,

Calif.

I^

•

Southern

Acid

Virginia
Dec.

be

-••■J.

l-for-2

offered

•

publicly.

&

Sulphur Co.,

■

Co.

the

irom

-

.

Price by amendment.

Co., San Francisco.
bank

reduce

and for working

loans

Richmond,

•

_;,

Southwestern

Peter

Paul, Inc., Naugatuck,

Conn.

stockholders.
No underwriting.
working capital.

construction program.

—

•

Portland

Dec.

(Ore.)

Plywood Corp.

of

New

Hampshire

A

Expected early in January.

Power, Inc., Mishawaka,

(letter of notification)
Price—$5 a

•

offered

for

subscription to present share¬

one

share for each five shares held.

Price to be

Proceeds—To

pay

poses.

,

Publix Shirt Corp.,

Oct.

3

filed

New York

shares

140,000

($1

par)

/

a.

4

Inc., New York
notification) 2,996 shares ($100 par) '
Price—$100 a share.
No underwriting/. For

(letter of

•

stock

will be sold to underwriters for investment at
share.

Proceeds—To

tive Nov.
•

pay

bank loans.

100 per

4

share.

Proceeds—To

for working capital.

•

Statement effec¬

monthly Jan. 1, 1952.
Mills, Inc., at face amount.

Issued to Mannington

St.

Regis Paper Co., New York
300,000 shares ($5 par) common. Under¬
writing—No underwriting. To be offered on New York
Stock Exchange.
Price—At market. Proceeds—Shares
are being sold by Weco
Corp.,
iary of Western Electric Co.

Silver Buckle
Oct.

wholly-owned subsid¬

a

Mining Co., Wallace, Idaho

13

(letter of notification) 1,500,000 shares of (10c
par) stock. Price—20 cents a share. Underwriters—F.
E. Scott, Pennaluna & Co., J. E. Scott and Morris
George,
all of Wallace, Idaho, and John Erickson and Harold

Gribble, both of Mullan, Idaho.

purchase

;

Mines, Inc., Wallace, Idaho
Oct. 28 (letter of notification)
1,345,000 shares of com¬
mon.
Company is selling 1,000,000 of the total and the
balance is being sold by four stockholders.
Price—150
share.
The company will offer the securities

a

directly
with the aid of L. E. Nicholls & Co. and W. T.
Anderson,

both of
will

use

Spokane, Wash.,

South

I

as

its proceeds for

Carolina

underwriters.

Electric

s:c*

The company

mining operations.
&

Gas

Co.,

Dec. 2 filed 80,858 shares ($50 par) cumulative convert¬
ible preferred and 404,293 shares ($4.50
par) common
for sale, and 687,293 shares reserved for conversion of




production

facilites

•

.

& .Co. Trie.;

Lehman

Brothers;

Dillon,

Inc.

Missouri

dated

be

vv '

•

Pacific

RR.

(12/16)

\

inviting bids to be considered Dec. 16, at
Dec. 16, ~ for the purchase of A $5,248,000

.

.

-—-

Jan.

15.

1948. and

to

mature

serially from

Halsey,

•"

..

='Ar

:

..

1

-V.

-</;•*

"

■
f\.y.

\

Vv>-

V,:.

Ohlb Power Co.

'

Dec. 10 reported company has plans under consideration

and:'

for/sale eaHy>Jh/l946 of $28,000,000—$30,000,000 bonds,
for

ne\y

money

Probable

purposes.

'& CpA Inc.;

First Boston

&" Co.- Inc.
•

bidders:

Dillon,.

Corp.; Halsey, Stu&rt
'

•
,

;

-

Cincinnati
6,000 shares ($25 par)

Price—$10

a

com¬
•

Wallace

(R.)

&

Conn.

Dec.

a,

No

A

underwriting.
,

Sons

v

>

For addi-

Co.,

(parent).
Proceeds for
improvement.
Probable, bidders for bonds:
Halsey, Stuart & Co. Inc.; The First Boston Corp.; Blyth
& Co., Inc.

Wallingford,

,

r

:

(leter of notification) 12,000 shares ($25 par)
common. Price—$25 a share. No
underwriting. For addi¬
tional working capital.

Southwestern Public
Dec.

C.)

Gas

Light Co.

Nov. 7 filed 85 000 shares
(no par) common.
No under¬
writing. Offering—The shares will be offered for sub¬
scription to common stockholders of record Dec. 26
on
the basis of one share for each
five held.
Subscription
warrants will expire Jan. 13, 1948.

Dealer-Managers^— ;

New

York area, The First Boston
Corp.; Washington
Alex. Brown & Sons./Price—$20
per share.
Pro¬
ceeds—To be added to general funds
for current con¬

area,

8

future
has

(D.

Co,

stock' to West Penn Electric Co.

4

Washington

Edison

Dec. 5 company asked SEC for permission to sell .at
competitive bidding $4,000,000 30-year 'first mortgage
collateral trust bonds; also 50,000 shares of common
property

>./ *

;

Mfg.

1

Potomac

v

•

share.

Philadelphia El&ctric

t

Dec. 4 rumored company contemplates sale of same
§35,000,000 of bonds to finance its construction program.
Probable bidders:
Halsey, Stuart & Co. Inc.; Morgan
Stanley '& Co.; Glore, Forgan & Co., and W. C. Langley
& Co. (jointly); The First Boston
Corp.; White, Weld

Corp.,

,

no

plans

as

yet.

Dillon, Read & Co. Inc.
'

probable underwriter.
•

V

register with SEC in near
of preferred and common stock, but

$3,000,000
definite

Service Co.

expects to

company

-

•

**

-

White Motor Co.,

Dec. 9 reported company has under consideration
plans
for sale of approximately $6,000,000 in new bonds
early
in January. Probable bidders:
Halsey, Stuart & Co.

Inc.;
Blyth & Co., Inc.; White, Weld & Co.; Kidder, Peabody
&

Co.

•

Cleveland, ©,

•

Oct. 28 filed 275,000 shares
($1 par) stock.
—Hornblower & Weeks, New York.

offering

postponed

indefinitely

according

nouncement Nov. 17.
•

UNITED STATES

Underwriter

Offering—Proposed
to
•.

an

an¬

,a;

•/

GOVERNMENT, /

STATE, MUNICIPAL AND
CORPORATE SECURITIES

>

"

Wilton

(Conn.) Arms, Inc.
Dec. 2 (letter of
notification) 747 shares
tol stock

on

behalf of Dorothea D.

Miller & Son, New

more

($100 par) capi-

Hubbard, of Wilton.

than $160

a

share.

Blair

Adrian H.

INC.

York, Auctioneer.

Wisconsin Central Airlines,
Clintonville, Wis.
18 filed 125 000 shares
($1 par) common.
Under¬

Nov.

writer— Loewi

NEW
ATLANTA

•
.

BOSTON

.

•

(> Co.
'■

::

A;' 'A/A 'f

YORK
BUFFALO

•

CHICAGO

& Co.

Price—$4 a share. Proceeds—To
purchase aircraft, repay notes and for
working capital.

:

Tampa Electric Co.

struction program;

To be offered at not

Columbia,

&

/Boston Corp,

share. No underwriting. For working

a

tional working capital,

For mine development.

SiJverore

Co.

!

Dyke Taxi & Transfer. He., Buffalo, N. Y.
Dec. 4 /letter of
notification) 996 shares ($10 par) com¬

Nov. 26 filed

,

Hutzler; The First

Van

mon.

•

.

>

27

2,

1948 and due

/

,

Jan. 15, 1949 to Jan. 15, 1958. Probable bidders:
Stuart & Co. Inc.; Salomon Bros.' &

Lumber Co., Ravalli, Mont.
(letter of notification) 1,152 shares ($100 par)
and 1,848 shares ($100
par) 6% cumulative pre¬
ferred.
To be sold at par.
Underwriter—L. A. Dona¬
hue, Billings, Mont. For payment of liabilities and con¬

•

/

Dec. 5 (letter of notification) $240,600
promissory notes,
series C, D and E ($80,000 each series), all dated Jan.

Stuart

to

common

mon. Price—$25
capital.

3

Co.

Halsey,
Read

Read

struction of mill.

Roy Jackson, Inc., New York

Ruberoid

1

-

,

Cleveland

(letter of notification) 1,000 shares ($100 par)
7% preferred. Price—$100 a share. No underwriting. For
business expansion and working capital.
•

Co.

Company has issued invitations for bids to be consid¬
17 for $12,800,000 equipment trust
certificates,

Thornton

Oct.

'

price. No underwriting. To be added to working capital.

Dec.

'

&

ered Dec.

Trenton, W. J.
(letter of notification) 30,000 shares

•
Dec. 2 (letter of notification) 4,279 shares ($5 par) com¬
Tri State Acceptance
mon.
To be offered to salaried employees at market / Dec. 3
(letter of notification

•f

(par $100). Under¬

...

19.

Reliance Electric & Engineering Co.,

Probable underwriters:

Co.; Harris Hall

certificates, series JJ, dated Dec. 15,
$656,000 Dec. 15, 1948-1955. Probable bid¬
ders:-Harris,, Hall & Co. (Inc.); Halsey, Stuart & Co.

Thomascolor Inc., Los Angeles,
■■
July 9 filed 1,000,000 shares ($5 par) class A common.
Underwriter—Paul J. Herold, New York. Price—$10 a
v

:V

authorizing $160,600,000
Glore,
(Inc.), and William

on

1947 and due

($1 par)
Price—$10 per share. Underwriter—Blyth
Co., Inc., New York. To replenish working capital.

issuable

redemption of the class A stock.
Underwriter—
Aetna Securities Corp., New York.
Offering—Class A
stock will be offered publicly at $6 and class B stock

;..V

'

noon
(CST)
equipment trust

common.

upon

./;

A>T'

v

Michigan Consolidated Gas Co.

•

Thermo id Co.,

Dec.

Offering indefi¬

50.000 shares class B

debentures.

.A-

V

/•-•> -Ay

V

writers—Eastman, Dillon & Co. heads a group of under- \ Inc.; ^Salomon Bros. & Hutzler.
writers. Purpose—To financing
merger of Pacific West¬
•
New York Central RR. (12/17)
ern Oil
Corp. and Mission Corp. into Sunray.
;

(Pa.) Tube Co. (12/17)
Oct. 28 filed 200,000 shares (no par) 500 cumulative
class A and participating stock, 50,000 shares (100 par)
stock, and

&

The trustee is

filed

12

second preferred stock, series of 1947

Reading

class B

^'5

'

•.

(12/18)
$40,000,000 20-year 3V2% sinking fund
debentures and 250,000 shares 5% cumulative convertible

—

the

Dec. 5 reported company contemplates sale of
$9,000,000
bonds.
Proceeds for construction.
Probable bidders:

-

Sunray Oil Corp.

Nov.

Under¬

that

Stock Options,

—

writer—Reynolds & Co., New York. Price by amend¬
ment.
Proceeds
The shares are being sold by three
stockholders who will receive proceeds.
nite.

u

Forgan

Strong Manufacturing Co., Sebrlng, Ohio
12 (letter of notification) 3,674 shares
(no par)
common.
Price—$10 a share.
Underwriter
Gunn,
Carey and Co., Cleveland. For operating expenses.

V
common.

'

"V.*v"

International Harvester €0.

convertible

^

Nov.

■.

Warrants

is

& Co.

working capital.

determined by competitive bidding.
off loans and for construction pur¬

held.

expected

,

I

•;

Proceeds to Chairman of board.

now

is

it

Halsey, Stuart & Co. Inc.; Harris, Hall & Co.
(Inc.); Salomon Bros, & Hutzler.

25

common.

Unsubscribed shares and the bonds will be offered pub¬

share

and

bidders:

Inc.

licly.

trustee

Blair & Co.

holders at the rate of

each

24

Jan. 28 stockholders will vote

•

(jointly); Kidder, Peabody & Co. and Blyth & Co.,
(jointly); W. C. Langley & Co. and Glore, Forgan
&
Co.
(jointly); Halsey, Stuart & Co. Inc.
(bonds
only); Kuhn, Loeb & Co., Harriman Ripley & Co. and
Smith, Barney & Co. (jointly). Offering—Common stock

Dec.

(letter of notification) 5,000 shares of common A
(par $1). Price at market. Underwriter—A. G. Becker

Dec.

Inc.

be

stock for
on

Great Northern RR.
(12/16)
inviting bids to be considered (noon—
CST) Dec. 16, at St. Louis, for the purchase of $2,496,000
equipment trust certificates, series AA, dated Dec. 15,
1947 and due $312,000 each Dec. 15, 1948-1955.
Probable

'

($10 par) common and $3,000,000 30-year series C first mortgage bonds.
Under¬
writers—To be determined by competitive bidding. Prob¬
able bidders:
The First Boston Corp., Coffin & Burr,

Building Corp.
' v . —
trustee, mailed to stockholders

International

The

Ind.

-

Nov. 25 filed 139,739 shares

first will

expire

Wertheim & Co.

K

Sterling Engine Co.

Nov.

Office

reorganization will be consummated by Dec. 29. The
offering has been underwritten by a group headed by

60,000 shares ($1 par)
share.
Underwriters—v

common.

con¬

entitling them to purchase at $1 lVs shares of

common

will

/'

derwriting.
For purchase of machinery and equipment
and for working capital.
Co.

14

class

•

Equitable

new

Austin, Inc.; Ferron R. Davis, Inc.; and Her- "
bert S. Wolff Securities Co., all of South
Bend, Inc.
To'
organize business and for working capital.

(letter of notification) 30,000 shares ($10 par)
5% cumulative preferred.
Price—$10 a share.
No un¬

Service

Nov.

Proceeds—For

Dec. 4 J. Donald .Duncan,

Harrison &

3

Public

Motive

Steam

^0

T

expenditures.

warrants

Blyth & Co., Inc. and Stone & Webster Securities Corp.
(jointly); Glore, Forgan & Co. and W. C. Langley & Co.
(jointly): Harriman, Ripley & Co. Proceeds—To finance

Pittsburgh Steel Co.
Nov. 20 filed $6,500,000 of first mortgage bonds, due 1967.
Underwriters—Kuhn, Loeb & Co.; A. G. Becker & Co.,
Inc. and Hemphill, Noyes & Co.
Price by amendment.
Proceeds
To refund outstanding first mortgage bonds.
Expected after Jan. 2, 1948.

'

Co. /A/\

bidding.
Probable bidders:' Halsey, Stuart & Co.
Inc., Lehman Brothers and Lazard Freres&Co. (jointly);
White, Weld & Co. and Kidder, Peabody & Co. (jointly);

For expan¬

/>

■

a

Mutual Life Insurance Co.

struction

tive

(letter of notification) 11,955 shares (no par)
common, to be offered for subscription at $25 a share
sion and

Elec.

9 company,

western

A/,/'://

•

6

to present

&

-

subsidiary of Federal Water & Gas
Corp., requested the SEC for permission to sell $1J)QO,O0O
first mortgage 8lk% bonds due 1971, privately to North¬

•,

$7,000,000 30-year first mortgage bonds,
Underwriting—To be determined at competi¬

series B.

Nov.

Gas

t'U'*

company

Birmingham Gas Co.

Dec.

filed

5

rumored

has under consideration the
offering to stockholders early in January about $8,500,000
of oreferred stock with Smith, Barney & Co. as under¬

,

4

Nov.

capital.

5

writer.

Inc.,

writer—Hill Bros., St. Louis. For working capital.

Proceeds—

Armstrong Cork Co.

Dec.

.

Underwriters—Dean

To

Thursday, December 11, 1947

the pre¬
a

on

(letter of notification) 6,464 shares of common.
Price—$40 a share. To be initially offered to stock¬
holders and employees and then to the public. Under¬

150,000 shares of common stock (par $1)
Witter & Co., and Schwabacher &

Nov. 24 filed

will

common of South Carolina Power
Commonwealth & Southern Corp.

No un¬
derwriting.
Price — $10 a share.
Proceeds—To build
trotting and pacing race track near Ocean City, Md.

(12/15-19)

shares

ing

Berlin, Mid.
Nov. 28 filed 34,900 shares ($10 par) common.

Permanente

Unsubscribed

common

Price by amendment. Proceeds—Proceeds together with
other funds will be used to purchase all of the outstand¬

of the stock.
Ocean

CHRONICLE

stockholders,

common

l-for-10 basis and the

on a

basis.

(EST) Dec. 16, for the purchase

New York, up to 11 a.m.

FINANCIAL

&

preferred. Underwriter—Kidder, Peabody & Co., New
York. Offering—Shares initially will be offered lor sub¬

(Continued from page 41)

:

COMMERCIAL

PHILADELPHIA

•

PITTSBURGH

*

ST.

LOUIS

Volume 166

Number 4654

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

of

160,000

(2407)

new

only

offering

price of $13.75

less

a

shares,
tender

common

attracted

single

a

the

This

underwriting compensation

standing stock.
jected

_

ably higher than the lows reached
in

the

other
of

first part

of 1946. On the

hand, the purchasing

the

been

income

from

decreasing

rise in

because

has

of

the

1930's. Then

the higher yields on bonds
bought today are more than off¬
set by the decline in the
purchas¬
ing power of bond income.
part,

point

diagram
to

as

illustrates

high-grade

of

back.

years

The solid

Mocdy series of the
of representative

poration

when

still

bonds. : In

the

the

period,

were

tightly

policy which

exists.

by

the

creasingly
purchasing

average yield

high-grade

rates

of

war

"The downtrend in bond, yields
has been accompanied

many

is

interest

government debt—a

trend

line

the

came

which

ities under the policy of maintain¬
ing low interest charges on the

corpora¬

bonds, for which the
yields is available for

The

controlled by the Federal author¬

this

tion

4%.

as

abnormally
easy
credit
existed throughout most

living costs. For the most

"The

high

as

long decline in bond yields after
1932
began during the era of

power

bonds

been

decline

severe

in¬

an

in

the

of bond income,
diagram.
For
illustration, we shall assume that

broken

power

shown

as

cor¬

the

on

line, the yield has ben adjusted
for changes in the cost of
living as

$1,000 in highgrade corporate bonds was made

measured

at

index

by the consumers' price

of

the

Bureau

of

investment

an

the end of 1941; that

investment of $1,000

Labor

Statistics.

The
base
period, or
100, for the latter is the five-year

March,

average for 1935-39.

a

plotted

at

December of
1

"In

4.59%.

was

in

line

of

the prior years

with

the

During those

below

for

the

years

higher.

even

tern

changed

ered

by

the

Moody
re¬

$28;

the

second,

third,

$26.20.

on

the

on

However, if

we

for changes

in the cost of living

aver¬

adjust the yields

index, using the 1935-39
find that the

we

of

the

the

cov¬

would

second,

third

purchasing

income from

vestment

diagram, and since

average

the base period for the latter,

as

But the pat¬

in the period

the

September

as

4%, and during and after

or

in

on

all

World War I it ranged from 5 to

6%

been

$24.70; and

dropped

never

Based

the first investment would

on

have

about

far back

as

turn

corporate
was

made

was

1947.

yield series, the actual annual

average

average

monthly yield

age

amount

...

This

made in

be

$19,

the

power

first in¬

$25.30;

from

from

and

the

out

this

the

,

CORPORATION

erations

,-V. V.y.

,

\
\ /

'

do

well

funds

smaller

more

the

the

reception

several

for

out

came

Illuminating

Cleveland

Co.,

ac' 'ual yielo

'■;y

Calif.

could

The
group
which
took
up
Southern California Edison's 800,000

shares

ferred

of

$25

new

par

pre¬

apparently realized
this piece of business was not des¬
was

quite

so

"quickie." ; The
reported moving but not
sprightly as the several

bond issues.

But

the

reported

early

to

be

was

satisfactory with
up
of the unsold

clearing

balance

expected.
With
two
competing the successful
syndicate paid the
company
a
groups

price of

$25.05

for

a

divi¬

$1.22

dend rate and reoffered the issue

"S*

offered the com¬
price of $25.02 for a $1.25
\

underwriters

still

in¬

are

Thursday, Dec. 18, is now
day tentatively set for mar¬
new securities projected
Sunray Oil Corp., as part of

the

by

DIVIDEND

five

>

bids

separate

a

BACH, Treasurer.

Wichita River Oil

Dividend No. 7
A

dividend

share

holders

of

Twenty-five cents (25(f) per
paid January 15, 1948 on the
the Corporation, to stock¬

be

will

Common

Stock of

record

of

the

at

NOTICES

close

record

the

at

1947.

close

of

will

Checks

Colony

NO.

61

Trust

Boston,

business

be

Mass.,

December

mailed

Company,
J.

from

Boston,

H.

■:

The

OFFICE

:r

LOUISVILLE

GAS
of

Board

AND

O'c

1947

December

DIVIDEND NO.
The

OF

.y-

ELECTRIC

COMPANY

Directors of Louisville Gas

and

December
the

At

five

B

15, 1947,
meeting

same

cents

(25c)

dividend

a

share

per

Common

Stock

of

twenty-

declared

was

of

the

on

Board

of

as

the

close

of

business

of earnings for

WILLIAM

the

October 31, 1947, a cash
per
share (an increase from
and an extra dividend of 50c per
the outstanding common stock of this

on

25c

1948,

New

stockholders

to

of

record

at

the

business

January 10, 1948.
SIMON OTTINOER, Secretary.

York,

N.

Y.,

Treasurer.

COMPANY

share or three per
par value of the shares
Company has been de¬
clared this day, payable on January 2,
1948, to stockholders of record as shown
by the books of the company at the close
of business on December 5, 1947. The
of

25c),

of

;■■■

LANGLEY,

A dividend of 75per

cent

corporation have been declared payable January
20th,

C.

181st Consecutive Dividend paid
by The Texas Company and its
predecessor.

KNOUREK, Treasurer.

quarter ended
of

the year 1947.

TEXAS

THE

December

Corporation
to

1947.

the

United States

20c

10,

381

Directors

of
this
Company,
meeting held this day, declared a divi¬
dend of Fifty Cents ($0.50) per share on the
outstanding capital stock, payable on January
5, 1948, to stockholders of record at the close
of business on December 26,
1947.
This dis¬
tribution represents the final dividend in
respect

1947.

dividend

of

a

Company, for
quarter ending November 30, 1947, payable
check January 20, 1947, to stockholders pi

record

Rosario

Broadway, New York 5, N. Y.

Secretary

Company (Delaware) at a meeting held
4, 1947, declared a quarterly divi¬
dend of thirty-seven and one-half cents
(37V2C)
per share on tne Class A common oiock oi
Company for the quarter ending November 30,
1947,
payable by check
January 20, 1947,
tc
stockholders of record as of the close of busi¬

Class

Honduras

&

Mining Company

December

ness

York

120

Massachusetts.

ELLIOTT,

December 2,

the

New

11,

at

by

5, 1947.

CONSOLIDATED
COMPANY

of twenty cents ($0.20) per share
paid on December 26, 1947, to holders
of the outstanding Capital Stock of the Calumet
and
Hecla
Consolidated
Copper
Company
O"

the

business

HECLA

DIVIDEND

i

of

,r

Joseph L. Martin, Treasurer

December 3,

(3%)

The

on

Texas

stock transfer books will remain open.
L. H. Lindeman
November 21, 1947

1947.

'

Treasurer

y

for

offering of $4,000,000 of new
its companion issue

Allied Chemical &

ao juste d for
cost of liv ng

61

"

Dye Corporation

The Electric Storage Battery
company

Broadway, New York
December 5, 1947

v'
.

189th Consecutive

Allied Chemical &
Dye Corporation
declared
a
special dividend of

Quarterly Dividend

has
;*

Three
1

"■
.

:;.u

the

| ''

'39

'40

'41

43

'42

44

'45

Dollars

Common

payable
mon

'36

H.

>

1

'37

1947.

be

;
a

22,

dividend

close

receivced

company

of

<

"36

AND

COPPER

share

of

such

December

December
CALUMET

in the case of Central Maine Pow¬

to

Western
Tablet
&
Stationery
has
been
declared
payable
on
1948,
to
the
holders
of
record
shares
at
the
close
of
business on

December 31, 1947,

For

efforts

of

Financing

keting of

"gunshy" with re¬
gard to equity issues was indicated
Co.'s

of

until

Plywood

be

Stock

Corporation
January
10,

Corporation

Single Bid Rejected
to

given that a dividend at the
rate of $.50 per share on the issued and out¬
standing shares without par value of the "Com¬

the year.

;

■"

*35

possibly
of

Oil

G. W.

"n —

chan<;es in

'34.

a

TABLET
&
STATIONERY
CORPORATION

hereby

OIVIDEND NOTICES

yie ld

1933

for

is

E.

turn

The runner-up

an

postpone

weeks,

the

Sunray

15,

$26.25.

Notice

mon

to

Electric

response

WESTERN

Next

on

investor

company.

DIVIDEND NOTICES

Sale

prove a

issue

into the

undertaking, it
likely go over for

stock

tined to

Defers

cumulative preference

very

after

will

Preferred

Oil

negotiated

several

Georgia Power

Edison

Western

stock Series B.

A

I

i'

-

decided

the last two for $10,000,000. each.
So.

probably

of the largest

one

temporarily at least.

while, the sale of 250,000 shares
of new $4

as

carrying out of the consolidat¬
ing Mission Oil Corp and Pacific

re¬

the

of

Electric

Co. and Delaware Power & Light
Co. the first for $20,000,000 and

,

_

ac¬

under¬

new

Dealers reported the ready sale
of the three bond issues which

bonds, but
v

have

A

This

'

of¬

attending
more
than a couple of the relatively
recent huge emissions.

total
.

op¬

needed

dispose
block of junior shares.

•

to

was

end

Presumably influenced by the
recent unsatisfactory performance
of the market
generally, Mon¬
santo Chemical Co., is Yeported to

sluggishness

er

i

of

fi¬

takings brought out in the last
few days contrasted with the

clined

r

bear

corporate

would

or

Certainly

That

.-I;..

'

to

observations

seek

one

corded

VI

A

tends

that

and

through
ferings.

v

BOND YIELDS

issue

new

forego abnormally large-scale

dividend.

HIGH-GRADE
V-

recent

officers

nance

pany a

•

week

bankers

some

at

investment, $16.20,"

behavior of the

market

third

of

v

high-grade

on

bonds

are

beginning with

1932.

December, 1932, the

yield

1900.

The data

second

a

was

1946, . when bond yields
about at their lows; and that
investment in the same

were

quarterly intervals for

the past 15 years,

of

The

bid

stock

Monsanto

middle of 1934 the yield has

never

The

the

deal put over

,

.

"Bond yields have been
rising,<8>
and in general
they are appreci¬ the

and

held

of the closing month of the
year,
if the way finally is cleared for

The bulk of this issue was to be
offered first to holders of its out¬

*

In the current issue of the "Business
Bulletin," published by the
Cleveland Trust Company of Ohio, a
comparison is made of bond
yields and living costs over last 15 years. According to the "Business
Bulletin":
',

undertaking

will stand

of $1.75 a share.

now

temporarily by litigation.

up

share

a

three-way merger

43

($3.00)
Stock

December

the

'47

15, 1947.

WARD BAKING COMPANY

on

The Directors have declared from the

Company,

Accumulated Surplus of the Company a

1947,

to com¬
stockholders of record at the close

of business December
'46

share

per

of

27,

final dividend for the year 1947

five

..

W. C. KING, Secretary

mon

to

stockholders of record

business

on

quarterly dividend of $1.37 H a share
on Preferred
Stock payable January
2, 1948 to holders of record December

December 15,1947. Checks

12, 1947 and

will be mailed.

90

H. C.

When you want to CIRCULARIZE the Investment

ALLAN,

Philadelphia 32, December 5, 1947.

(&>)

cents

a

a

Year End dividend of

share

on

the

Common

Stock payable December 27, 1947 to
holders of record December 12, 1947.

Secretary and Treasurer

AtllS-CHJUMIRS
MFG. CO.

,

Firms in the United States and Canada, Remember Us!

*

The Board of Directors declared the

the close of

at

DIVIDENDS

*

of seventy

($.75) per share on the Com¬
Stock, payable December 31,1947,

cents

T. MELLY,

475 Fifth Avenue
New York

Treasurer

17, N. Y.

STATEMENT OF EARNINGS
Allis-Chalmers

Manufacturing

Company has released
statement

for

the

an

twelve

earnings
months

THE ATLANTIC REFINING CO*

period October
We

have

for
of

and

metal

a

firm

every

North

Cities,

This

stencil

and

America"

list

and

is

in

bank

our

listed

arranged

within

revised

mailing department
in

"Security Dealers

alphabetically by States

the

daily

1, 1946 to Septem¬
ber
30,
1947,
showing net sales
billed of $172,567,020 and a profit
after taxes of $2,570,548.
Copies
of
said
statement
are

Cities

and

by

offers

firm

available

Our

charge
or

SPECIAL

selected
All

N.

A.

States

addressing

We
at

for

can

»

addressing

Canada)

also

small

is

S.
or

$5.00

D.

LIST

Cities

completed

supply

additional

the

complete

per

$6.00

list

per

on

(United

thousand..

(main

within

list

offices

only)

or

thousand.

24

W,

roll

Company's

secur¬

E.

HAWKINSON.
Secretary and Treasurer.

hours.

gummed

the

parties and may be obtained from
the
Company or from Guaranty
Trust
Company,
140
Broadway,
New York
15, N. Y., its Transfer
Agent,
and
City
Bank
Farmers
Trust Company, 22 William Street,
New York 15, N. Y.. Trustee, under
Indenture dated as of September
1, 1946, as well as other sources.

most

up-to-the-minute service available.

-States

to

labels

charge.

SITUATION WANTED

At a meeting of the Board
held December 3, 1947, a
one
on

dollar ($1) per

Herbert D. Seibert & Co., Inc.




REctor 2-9570

New York 7. N. Y

TRADER
position

to

orders

in

give service and
over-the-counter
securities.
Box Ml24, Commercial &
Financial Chronicle,
25 Park Place,
New York 8, N. Y.

Preferred Stock

RADIO-KEITH-ORPHEUM

CORPORATION

Convertible 4% Series A of the Com¬
pany,

payable

February 2, 1948, to

'"PHE Board of Directors has

stockholders of record at the close of
business January 5, 1948.
At the same meeting a

Preferred Stock

cents
on

the

3.75%

Series B of the Company,
at

payable Feb¬
2,1948, to stockholders of record

the close of business

January 5,1948.

Checks will be mailed.

per

a

dividend of 15

the Common
Corporation pay¬
January 2, 1948 to

share

on

Stock of the
able

on

stockholders of record
close of business

on

at

the

December

15, 1947.
J. MILLER WALKER

RICHARD ROLLINS
December 3,1947.

declared
cents

dividend of

ninety-three and three-fourths
($.9375) per share was declared

ruary
Wishes

execute

of Directors
dividend of
share was declared

the Cumulative

Cumulative

25 Park Place

V

ity holders and to other interested

names.

the

you

RKO
DIVIDENDS

PREFERRED

Secretary

Secretary
December 4, 1947

44

& financial chronicle

the commercial

(2408):

Thursday* December 11, 1947
ported in the dailies, "as the final
of
the
Republicans to

BUSINESS BUZZ

answer

Truman's

for

request

in¬

broad

flation controls."

on.

•

•

Disregarding

minor

points,

this program of the GOP seems
:

Behind-the-Scene Interpretation*
from the Nation's

And You

Capital

Somebody ought to tip off Harry Truman that Marriner Eccles
means to promote some deflation if the Congress gives him a
"X
X,
Presidents, like newspaper men, can't watch everything. But if
the President realized it, Mr. Eccles told the Banking Committee of
the Senate that were he given the power to require commercial
banks to establish secondary re-^
serves, he would use it/ He would spending religion with an admix*

use;

of

Furthermore,, he

imports.

gold
would
time

to

it to restrict • the vol

of bank credit

to about the

s

balance"

present level, "on

/..</ v

ture of central
■'

x

•

.

,

,.

awkwardly

to

trying

talk
about controlling inflation, for
political purposes. There is no
sign, however, that he or his
advisors wanted to take that one
little step necessary to end in¬
flation-—the promotion of just a
wanted

Tr'uman

to

They are
But Mr. Ec¬
cles feels differently. - He isn't
afraid of anybody, unless may¬
little bit of deflation.

too afraid of that.

it is a bunch of politicians
who might seriously threaten to
raise interest rates.
be

*

*

*

;

Y, '

■■■'

hasn't been settled.

*f

*

Just

*

as

gram

permit

within

like the

was

pull the wheel of bank

one

est"

chine, and things really would
begin to happen. Business vol¬
ume would drop.
What really
would hurt is that banks might
slow down
on
these nothing

Fleming

down and 25 years to pay home
Then all thunderation

loans.

would
dent.

about

burst
So

the

Truman

Mr.

Presi¬

at

least

ought to know about it.
■,

■"

j.;'

The Congress is most unlikely,
however, to give Mr. Eccles the
authority to require a new batch
of reserves.
Congress shows no
$igns of going for this one. Power
or no power, however,
Marriner
Eccles remains a character unique

by

himself' in

Washington

the

panorama.
*

*

*

Senate

was

weary

of these tightly-knit,

abstract arguments of the type

always

Eccles

Governor

which

submits to committee.

Fleming

'didn't try to bombard the com¬
mittee
with
the ; AdvisoryCouncil's statement.

fact

In

it

if

mittee

hit.

it

The

com¬

impressed.

was

*

XXX

♦; v.',

*;/v.

there

drying

est rates.

in

compensatory

Roosevelt Ad¬
ministration was just so tickled
to catch

a

The

in the cutest eco¬
So it hired him at
First he was a special as¬

spending

up

nomic lingo.
once.

sistant to
Treasury.

the

Secretary of the

Then

and the two around the sun.

ing

a

tronomical

In

November

•

these

FR

gether

Board

at

the

latter's

to

were

luncheon

get
table

if

if

#

.

sentiment

growing

interest

that

there

ever

flation.

Mr. Eccles usually gets atten¬
tion
for : the
things he says

which
such

business

as

does

not

Probably Mr. Eccles would ve¬
hemently deny that he distrusted
the operations of the market place.
But there is probably no more of!
a
thorough-going managed econ- j
omy gent somewhere near the top •

bank credit restriction.

theless, within

some

of tne neap ngnt now tnan
ernor

Eccles.

"Gov-1

His economy-man-1

.aging
philosophy,
to
the
slanted

however,

is'

compensatory




consistent

a

was

one

the

end

when

been

ized by any group.
X-X X

■

'V"..

ounce

downturn

of

eclipse.

His

had

is

no¬

Utah.

to

He

might

cold

in

*

■■

as

*

he

go

it.

sees

if

..

.

■■

Gold to Canada is not merely
gold. Likewise it is not ju?t a
commodty which can be shipped

if in the

to the U. S. that

v-

xsxxx:

*. XX-' ;•';:Xx

^

It is a cinch that
if Canada drops the proposed sub¬
sidy on gold mining at U. S. be¬
hest, the Treasury will pay many
more
dollars than would go to
buy the
Canadian . gold which
power.

under

Gold

key to opening the Cana¬
northland,
Canada's vast,

preliminary groping of the Con¬
gressional majority, now being re-

an

exchange deficit.
.

m.s.Wien&Co
ESTABLISHED 1919

40

N

Y

Exchange Pl.t N. Y. 5

,

HA. 2-8780

Teletype N. Y. 1-1307

.

^

Security Dealers Attfn

X; VXX

Trading Markets:
,

Ralston Steel Car

Oregon Portland Cement,
Riverside Cement 4 & B

Spokane Portland Cement

otherwise would have been mined,
a } new < postwar
kind of
"Hyde Park Agreement."
It would be easy to mistake the

to meet

dian

as

British Prime Minister

proposed

chasing

got
all his efforts

to arrest inflation

Mr.

than $35 an ounce in terms of pur¬

it is guessed, if he

sooner,

.

thai sin¬

by Mr. Eccles,
bet he wculd go

good

a

New Issues

Ca¬

Allegedly
the
Treasury
op¬
Canada's stimulating gold
mining because it would have to
buy and "neutralize" the gold. It
may be also that the Federal con¬
science is repelled by the notion
that gold is worth something more

believed

cerely
it

Domestic ^Foreign
Securities

poses

Administration
to

Reorganization

Sf*wVr.t
.

ticed, and are not held against
an

the
gov¬

economists, who usu¬
ally have guessed wrong on the
big swings, see no end to good
times.'?•/

the West he closed to settlement.

po¬

from

majority of

Rails

oppo¬

in July. This is a
domestic
affair.

50s, the

matters

economic

on

arises

the

Snyder's opposition is almost as

■,

admo¬

contrary to Administration
litical
interests are littld

Ottawa in

popular in Canada

This may be Eccles' last com¬

out

that

ernment

of gold mined above the
achieved
in the year;

ending

not

year,

:

people with its "repre-;

nadian

organ¬
v

fact

volume

i'

thought
carefully.

an

Old

sition to payment of $7 on «very

X;wA-XX ;/-'X;

*

>

repress

scntations" to

a

rise
has

sentiment

LERNER & CO.
investment Securities

10 Post Of»ice

Square, Boston 9, Mass.

Telephone Hubbard

1990

Teletype Be ft

like,

Never¬

it

of the first to
of

deficit

began

to

cal courage with

a

he

until

1958,

call for

not

Susquehanna Mills

All Issues

no

r.ARI MARKS & r.O- Inc.

lambasted

-v-

currently

talks

even

allow

foreign securities
specialists

Lusiness.

louder for government economy.

would

Empire Steel Corp.

FOREIGN SECURITIES

last

politi¬
term of of-,

mortgage money

Eccles

Teletype—ny 1-971

Firm Trading Markets :

that

most soundly the GI and other

No * Republican

X

He

financing

appear

fice

HAnover 2-0050

compensa¬

depression would
forever. While it took

Mr,

nadian

end to in¬

an

or

is

to

is

production
national de¬

limits, Ec¬

the

easy

happen next

could

yet

the present program for

spending philosopher.

*

program

Much

not

x:XX:x:

^

gold

velopment. This is just the po¬
sition the U. S. Treasury now
takes in the Poinds of the Ca¬

Congress

in

is to be

This

There

must

rates

crystallized,

yet

is the

is

if

at

thing over.
impugning the personal motives
of the Federal Advisory Council
also definitely fell flat.

tory

if

to¬

to talk the
Mr. Eccles*

expense,

whole

cles

been there since.

realities.'

:'''■

repress

thus

Con¬

antagonistic

a

*

however, are develop¬
clearer perception of the as¬

ophy

f He

jority' has
through its

early West.

To

gressmen,

into power with a philos¬

up.

to the

reasons

Should

wanted to submit

came

Federal Reserve Board and has

a

who

someone

come

Eccles

member of the

1934 he became

VvX' .vXX/X^

him.

Mr.

banker who believed

in spending. Also he could dress

if

if

premise that the earth
revolves about the moon, rather
than the moon about the earth,

the

believed

up.

the

1934, and was discovered to be

spending.-

in his
capital

of

unexploited, national
frontier. When gold is developed
in Canada, other mines come, also
business and people. Thus gold in
a limited way is what wheat was

largely

Try to ask him why in¬

sounds like

from

stopped

who

profits

long statement
before * discussing credit .control
generally. Chairman Tobey asked
him. please not to, as Mr. Tobey

Then

ma¬

However, the

unexpected turn in the
business cycle. The danger of

heard of inflation!!"

never

terest rates shouldn't rise, and he

the

man

great

sources
-'f

back

real live banker-business

ya

His big fanaticism is low inter¬

confessed that he got confused b,v
statements.
So Tobey and

a

Aint

danger,

were

that

were

Wash¬
ington scene to testify before a
Congressional c o m m i t t e e in

Eccles appeared on the

make

to

view,

nitions

few points of economic

reg¬

imentation.

a

business

talked

And

try voluntary action before

even

"Wrong?

ing

a

one

his allegation that he wants to

reluctantly
(supposedly)
dragged from
him.
He just

sense.

anti-

own

Under

program.

part the President would
have to "put up or shut up" on

was

O

*

*

have guessed that
Banking committee

may

the

X'.

if

nice tinsel look,

ond

Fleming
Council.

Bob

spokesmen,

of the Federal Advisory

if
a

effect of foreign aid would not
be inflationary. Under the sec¬

•.

Part of the fault
of those "vested inter¬

credit off the old business ma¬

etc.*

part the President would have
to limit exports so that the total

call from

*XXV.;XX

*

#

President's

inflation

Eccles

Mr.

allocations,

prevent inflation.

These have

the White House,
XX;«

the anti-inflation pro¬

y.A--:''

first learned,

honestly testified the
other day, that the. President
was thinking about bank credit
doing something or other in this
anti -inflation thing, when Mr.
Eccles got a telephone

—-

in order to

he

gather dust.

;

These agree¬
same Ob¬

jectives

But Mr. Eccles has not
the inner circles
since the late President Roose¬
poses.

as

jX.Vx

v.

-

ments would have thev

a.

this business with loans.

tX:

•'

if

the Congress would open up wide
the
street
to
voluntary agree¬
ments within .industry. Just how
broad these agreements would be,

Mr. Eccles'

nance

if *

if

V

put him in office want it- man-

velt died. Thus he

of

level which would

a

aged for specific utilitarian pur¬
been

hold¬

total

Under the second main proposal

manage

quickly took the
proposition of hold¬ secondary reserve thing from the
ing bank credit down to about the shelf, where it had lain since 1945.
'present level very easily might All the prior appearances indi¬
promote just a little deflation. To cated that until Mr. Eccles got that
the Administration, that would be telephone call showing that the
about like a slight case of cholera, vVhite House, after all, had not
unless the blame could be put liorgotten him, he never dreamed
)f pushing this plan this year,
upon what Mr. Eccles calls the
"vested
interests," the nation's Mow he has gone all out for it, in¬
bankers. For it is pretty generally cluding a promise to use the pow¬
agreed among the think boys in er if he got it. In fact, his anxi¬
government that bank credit is ety for the power was so great
rising mostly in response to in¬ chat Congress reacted like the
flationary forces.
It takes more sweet young thing faced with
dollars to stock a warehouse full ;he too aggressive suitor.
*
*
*
of parts because the parts cost
It was not all Eccles* fault,
more.
And you've got to have a
however, that the secondary re¬
bigger warehouse, because your
sales volume is on the up. You fi¬
serve
plan is going back to
.

overall

"same,time., "V;

the economy because those who
Mr.

the

.

himself'

finds

He

itself.

down

words, it would have to fight in¬
flation and the commies «at the

does

however,

Truman,

Mr.

ex-

not impinge, too severely on the
domestic
economy,
In
other ;

not love the managed economy
for

One

Administra-

part of the world.
Then the Administration wotuid

*

*

.

any

exports to

banking theologies.

♦

the

tion could curb and channel

ports to

ing

•

this power; Mr. Eccles said,
offset the inflationary influence

that

so

be charged in effect with

now

use

maiir parts.

two

idea is to broaden export con¬

,

•

have

trols

;

chance.

.to

50 Broad Street

Xj* •'**

v-

:
•

:

New York 4f N. Y.

AFFILIATE: CARL MARKS & CO. Inc. CHICAGO

Hill, Thompson & Co., Inc.
Markets and Situations lor Dealers

,

~

120
■

Broadway, New York 5

Tel. REJbtor 2-2020

Tele. NY 1.2660

■

..

Volume

166

Number 4654

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

Pictorial Insert A

Security Traders Association of New York

Mike Heaney, Jos McManus&
.

Co.; John J. O'Kane^ J. J. O'Kane, Jr. & Co.;
Reeves, Blair & to., Inc.; Frank Pavis, Chas E. Quincey & Co.

,

%

..

;

-wS

I
■

-imm

*1

*%

R. Sims

Zoltan Xavier Salkay, Gearhart & Co., Inc.; Harold Smith, Collin, Norton & Co.;
Irving Stein, Goulet & Stein; Joseph Sehrank, Shaskan & Co.

WW

fmk
10

*

*■

Ben Van Keegan, Frank C. Master son & Co.; Walter Saunders, Dominion Securities
Corp.; John O'Neill, Stein Bros. & Boyce, Baltimore; Gerald F, Kane, Luckhurst & Co,

Bert
k

:

Burbank, White, Weld & Co.; John McLaughlin, McLaughlin, Reuss & Co.;

Harry Michels, Allen & Co.; Jim Kelly, Kidder, Peabody & Co.

Tja

■

WM

m-m
fv
-

vIMfc || |

wmm.
„

Thomas J.

Mullins, White, Weld & Co.; Henry Oetjen,

McGinnis, Bampton & Sellger; Charles Zingraf,
Laurence M. Marks & Co,

Otto Steindecker,

Bill Tetmeyer, Willis E. Burnside & Co.; Charles King,

Carl Stolle, G. A. Saxton & Co.; Walter Saunders, Do-

Charles King & Co.; Daniel G. Mullin, Tucker, Anthony
& Co., New York; Tom Greenberg, C.E. Unterberg & Co.

minion Securities Corp.; Ed Kelly, Carl M.
Loeb, Rhoades & Co.

New York Hanseatic Corp.; Harry Bartold, Eastman, Dillon & Co.;

Harry Pollack, Frank C. Masterson & Co.; Bob McCook, and
Buckley Bros., New York City




•

A. L. Hutchison, both of
'.;L-■

Samuel I. Gold, Lilley & Co., New York; Arnold J. Wechsler, Ogden, Wechsler & Co.;
Stan Roggenburg, Roggenburg & Co.; Ed Russell, Seligman, Lubetkin & Co.;
>
A1 Powell. Kenney & Powell

Pictorial Insert B

THE

Annual

Arthur

COMMERCIAL

&

FINANCIAL

CHRONICLE

Thursday, December 11, 1947

Meeting and Buffet Supper

Schwartz, Bache & Co.; Jim McGivney, Hornblower & Weeks; Joe Eagan,
Frank C. Master son & Co.; Hal E. Murphy, Financial Chronicle

Frederick M. Stern, Stern & Co.; Morris T. Sitkoff; Murrey Perlman, S. K. Cahen
& Co.; Bill Eiger, Hart Smith & Co.

%

Sam

Englander, Seligman, Lubetkin & Co.; Asa Huff, Georgeson & Co.; Bob Kelly,
Bonner & Gregory; Howard Parsons, Joseph Janareli & Co.;
'
Hank Serlen, Josepthal & Co.
,

Ed

Thompson, Smith, Barney & Co.; Geo. Nelson, Bonner
& Gregory; Warren
Reardon, White, Weld & Co.

Charles Jann, Estabrook & Co.; Sid
&

-

'•

Irving Ittleman, Strauss Bros.; P. Fred Fox, P. F. Fox &
Co.; Frank Warner, G. A. Saxton & Co.

Siegel, Siegel & Co.; Ed Stryker. Moore, Leonard
Lynch; John French, A. C. Allyn & Co.; Harry Peiser, Ira Haupt & Co.




Tom Carrie, Bonner & Gregory; Walter V. Kennedy, Coffin & Burr, Inc.; Harold I.
Murphy, Bonner & Gregory; Bill Boggs, Kalb, Voorhis & Co.;
Syd Melven, S. R. Melven & Co.

Connie Sheridan, Mitchell & Co.; John B. Crowley, John
B. Crowley & Co.; James McLean, S. R. Melven & Co.

Frank W. Aigeltinger, Aigeltinger & Co.; Gilbert Wehmann, White, Weld & Co.;
Harry Arnold, Paine, Webber, Jackson & Curtis; George Hoffman, Greene & Co.

Volume 166

Number 4654

THE

Held December

Dan

COMMERCIAL

&

FINANCIAL

James R. Brewer,

Co.; Sal Rappa, F. S. Moseley

Geo. Leone, Frank C. Master son & Co.;
Seaver &

& Co.;
Barbier, G. A. Saxton & Co.

Phil Barmonde,

Co.; Jerry Aal, Young, Aal & Golkin

Cliff

Duke

Hunter, Aetna Securities Corporation; Ray Kenney, Kenney & Powell;
M. Kidder & Co.; E. Michael Growney, Growney & Co.

Bill Doherty, A.

Edwin L. Beck. Financial Chronicle; Larry Wren, Allen
& Co.;

Elbridge H. Smith, Stryker & Brown

(Hoy) Meyer, Stern & Co.; Ben Grody, Herzog & Co.; Julius D: Brown, Hirsch & Co.;
Ed Jacobs, Blair F. Claybaugh & Co.; Alfred I. Abelow, Mitchell & Co.




Mackubin, Legg & Co.; Willie Schmidt, Laird, Bissell & Meeds;
Williams, Laird, Bissell & Meeds; Bob Beswick, Laird, Bissel & Meeds;
Channell, First Boston Corporation; Nelson Strothmann, A. M. Kidder & Co.

Carroll

-

J. Arthur Warner & Co.; Les

Pictorial Insert C

5th, 1947, at Produce Exchange

McMillen, F. H. Roller & Co.; George Collins, Geyer & Co., Inc.; Charles O'Brien
Murphy,' Merrill Lynch, Pierce, Fenner & Beane; David Wittman,
Jacquin, Bliss & Stanley

Kane, Jos. McManus &

CHRONICLE

W. F.

Nat

Birnbaum, Birnbaum & Co.; Joe Goldenberg, Ira
Haupt & Co.; Arthur Vare, Hourwich & Co.

Webster, Hardy & Co.; Howard Brown, Ingalls & Snyder; Dick Abbe, Van Tuyl
& Abbe; Joseph McManus, Jos. McManus & Co.

THE

Pictorial Insert D

COMMERCIAL

&

Well Attended

Donald

Daly, Maxwell, Marshall & Co.; Joe Titolo, Harris, Upham & Co.;
Mottino, Harris, Upham & Co.; Bill Wittich, Maxwell, Marshall & Co.;
Sam Magid, Hill, Thompson & Co.
?

Bill McGivney, Toerge & Schiffer; Pete Steven, Bond &
New York Hanseatic Corp.; A1 McGowan, New

Jim Cleaver. Goodbody &

& Co.; F. H.

Felix Lopez,

Goodwin, Inc.; Maurice Hart,
York Hanseatic Corp.

Co.; R. J. Petke, Garvin, Bantel
Roller, F. H. Roller & Co.




Geo.

Searight, Aetna Securities Corp.; Lester Gannon, W. T. Bonn & Co.; Bill Swords,
Newburger & Hano; W. T. Bonn, W. T. Bonn & Co.

Bob Livingston, L. J. Schultz & Co.; Ed Whiting, Kaiser & Co.; Ed Sachs, J. G. White
& Co.; Jack Rose, Fitzgerald & Co.; Charley Ogden, Ogden, Wechsler & Co.

Janareli, Janareli & Co.; Bruce Briggs; Allan
Kadell, E. H. Rollins & Sons., Inc., New York;
Jack Miller, Amott, Baker & Co.

Corp.; John M,

Fenner & Beane; Nat Greene, Simons, Linburn &

Co.

Thursday, December 11, 1947

CHRONICLE

by Membership

Joseph

Thomson & McKinnon; Arthur Hamill, Lee Higginson

Mayer, Merrill Lynch, Pierce,

Herk

FINANCIAL

Leo

Chet

de

Willers, C. E. de Willers & Co.; Bill Kumm,
Co.; Nat Krumholz, Siegel & Co.

Dunne &

Goldwater, Goldwater & Frank; Abe Strauss, Strauss Bros., Inc.; John MacLean,
Shearson Hammill & Co.; Henry Byrne, Hirsch & Co.