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BUS. 1 v- y»RftRV ; Association Convention Issue Investment Bankers Final Edition 1946 13 .BEC fn 2 Sections-Section I Reg. V. S. Pat. Office New Number 4550 164 Volume York, N. Y., Thursday, December 12, Markets in De-Rooseveltization Copy of America Investment Bankets Association i Holds 35th Annual Convention By MELCHIOR PALYI Republican victory, Dr. Palyi points out confusion in economic situation which requires correction. Sees further in¬ flationary forces in increasing money supply combined with in¬ creased velocity of its circulation. Contends we will have more confusion but not recession. Looks for continuation of bottle¬ necks in labor and materials and concludes crux of Republican, Commenting Price 60 Cents a 1946 on inclusive. Elect Edward Hopkinson, Jr., 1 Meet at Palm Beach, Fla., Dec. 1 to 6, President. Hear Committee reports and addresses by retiring A President Charles S. Garland, James J. Caffrey, SEC Chairman, and others. The 35th Annual Meeting of the Investment Bankers Association of America was held at the Palm Beach Biltmore Hotel, Palm Beach, Fla., from Dec. 1 to Dec. 6. The ; policy is to control inflation at its source and to stop debt-monetizaofficers formally elected at the meeting were Edward Hopkinson, Jr., partner, Drexel j tion. Urges a budgetary surplus of $10 {billions to reduce & Co., Philadelphia, as President, who succeeded Charles S. Garland of Alex. Brown & national debt. ^ Sons, Baltimore; and Robert W. Baird of Wisconsin Company, Milwaukee; Julien H. Collins, My New Dealish elevator man was jubilant two days after the Julien Collins & Co., Chicago; Hal H. Dewar of Dewar, Robertson & Pancoast, San Antonio; election. "You see," he said, "the stock market crashed. That shows ^Albert H. Gordon of Kidder, Peabody & Co., New Of Drexel & Co., as ' t c a n you not£ versus couldn'tv d o." Republi¬ Does do? cans their victory Dr. Melchior Paly! I ^ trends which govern our to exchanges is not conducive to economic exchange rates is obnoxious price-fixing, our domestic economy. • de-Rooseveltization be with prosperity without undergo a pro¬ in spite of the fact that the Republicans have won the battle under the flag of free en¬ called, could not found change, terprise and freedom from regi¬ mentation, in spite of the damage their propaganda against commu¬ bureaucratism, etc., has in(Continued on page 3077) econ- and will undermine the deteriorating into an inflationary boom? Or cursed by a depression? Our ideological foundation, so stability in the whereas fluctuating exchanges are correctives of imbalance. Contends international control of omy, aiid by the pres¬ inhibitions operating within its own political bosoms? blessed standard and managed currency, each of Holds fixity of which must eliminate the other. and Will straddle two antithetical monetary regimes, i.e., the gold it inherits, sures dents. The Bretton Woods Monetary new tues Fund offers us a Gold Standard version of the International which possesses ' A few of the original system's vir- though many new vices, as it is here pro¬ Pictures taken on pages at IBA start and of new Association Addresses and Committee reports Convention 3032 to 3042 incl. on page 3043. Aerovox Corp.* V ;< . 4 .• . -At'• ' newly elected Chairman of the Securities E. and Exchange Hopkinson, Jr. New | Havana Litho, j • Prospectus on request , Co.* V;.$ COMMON STOCK ■ Successors I HIRSCH, * Established LILIENTHAL * CO. York Stock Exchange New timbers and other 1 Exchanges St., New York 4, N.T. Teletype NT 1-210 2-0600 Chicago Geneva ; Cleveland Lonica (Bepresentatlve) York; Edward K. Van Home, & Webster Securities Cor- Treasury Department. of their addresses, sion, text full The to¬ The new governors INDEX Troy Contents CORPORATE Bankers to the Kenya Colony ,, Head FINANCE LIMITED Government in Office: 26, Bishopsgate, London, E. C. OF NEW YORK Paid-Up Capital Reserve Fund Bond Dept. Teletype: "v The Bank conducts every description and exchange business banking 90c Trusteeships and Executorships also undertaken , Conv. Preferred *Twin Coach Company T»I. REctor 2-3600 New York 5 Members New York 120 Enterprise 6015 Broadway, Telephone: Teletype N. Y. 1-676 Philadelphia Telephone: on request Reynolds & Co. Security Dealers Ass'n. 45 Nassau Street Montreal OF Toronto Bond Brokerage i.y Stock Exchange New York S, N. Y. REctor 2-8600 ' Bell Teletype: NY 1-635 Bond Department THE CITY OF NEW YORK New England . Public Service Co. Appraisal of and Dealers Hardy& Co. Members New Members New York Stock Exchange York Curb Exchange ira haupt & New York 4 TeL DIgby 4-7800 Tele. NY 1-733 co. Members New York Stock Exchange and other Principal Exchanges 111 Broadway York 6 New REctor 30 Broad St. Values available upon request for Banks, Brokers Preferred *Prospectus INCORPORATED of Preferred \ New York • NATIONAL BANK HAnover 2-0986 Solar Aircraft Company Conv. Members N. Y. N. Y. WILLIAM ST., " '/ Dealers Assn. ^Detroit Harvester Co. Com. Gearhart & Company £2,200,000 Conv. NY 1-708 Alloys, Inc. Acme Aluminum MARKETS £2,000,000 52 v THE CHASE V Members Bell Teletype NY 1-305 In India, Burma, Ceylon, Kenya Colony and Aden and Zanzibar Subscribed Capital_v.—£4,000,000 ' ' VV HART SMITH & CO. New York Security Branches ; Bonds ;, j ; SECONDARY and Uganda 3011 State and V * Dallas Pittsburgh Springfield page their regional groups to three-year terms beginning / York S PHILADELPHIA Buffalo ~ Syracuse Washington, D. C. Scranton Wilkes-Barre New Haven Wooneocket see respective ' Albany Baltimore of detailed index For of the Asso¬ ciation, who were elected by BONDS THE NATIONAL CITY BANK , York; Pacific/ Emilio G. Collado, Executive Di¬ Northwest, Herman L. Lind, rector of the International Bank Camp & Co., Portland; Rocky ;-0' for Reconstruction and Develop¬ Mountain, Aaron W. Pleasants, - ^ ment, and Morris M. Townsend, (Continued on page 3030) " Director, Banking and Investment Section, U. S. Savings Bond Divi¬ New poration, MUNICIPAL 1927 64 Wall Street, New NATIONAL BANK of INDIA, AND ; INVESTMENT SECURITIES BOSTON 25 Broad WULnover STATE Analysis on request to . Stone Commission, R. H. Johnson & Co. 1 HlRSCH & CO. i & OHIO RR. New Whiteside, Thomas land, Municipal GULF, MOBILE - EngChace, ? WhitesideWarren,. Incorpo- 'i rated, Boston; New York, John C. .» Maxwell, Tucker,, Anthony & Co., St.; Louis; Company, Vacuum Concrete p* W. Louis Walter Ainsworth, Metropolitan St. Caffrey, serve i Chicago; Inc., Valley, Mississippi • Martin, Martin, &, Corbett Burns That the Fund will break gether with the addresses of the down, and break down quickly, that its very ex¬ retiring President, Charles S. Gar¬ Rene Leon istence will but postpone progress in interna¬ land, and thfe newly elected Presi¬ tional procedure and further embitter interna¬ dent, Edward Hopkinson, Jr., tional relations, the author has no doubt whatsoever. His conviction and the reports of most of the standing Committees are is based on the fact that the Bretton Woods Monetary Fund atfound in this issue, beginning with (Continued on page 3092) \ A, . , page 3043, ■, AAA/' officers Chi- Company, & George L. cago; J. James Blair William : posed to demonstrate. nism, ; : V princi¬ Foreign exchange expert, discussing free foreign exchange as opposed pal speakers, exchanges fixed by International Monetary Fund, predicts an early at the Con¬ : A breakdown of the Fund. Says Fund is attempting vention were ; mess Quinlan, Limited, Montreal; Cen¬ tral States, Wm. McCormick Blair, to destiny? Or \ will Congress be stymied by the v Los Cal., , Vice-Presi¬ The change in the deeper as By RENE LEON any presage o; Angeles, Monetary Fund : indeed, the prob¬ the C Reference to Bretton Woods That, lem: What can are: Richards & hfy With Special Democrats is close of the Convention, California, B. P. Lester, Les¬ ter & Co., Los Angeles; Canadian, W. T. K. Collier, Collier, Norris & the at Carey Hill the that City; S. of Hill, and thingfrom the Republi¬ cans <S>- York expect any- 2-3100 10 Post Office Tele. NY 1-2708 Direct Sq. Boston 9 Hancock 3750 Private Wire to Boston ■r>n 1 vf J V*1. 3010 I'r3™ieftav*w'" :<*&' .ji**'?.:",? ' tfWr.i \is .W fav/'Ji THE COMMERCIAL & FINANCIAL CHRONICLE Thursday, December 12, 194(j Benguet Console Mining* Chic. & Southern'Air- By SUMNER H. Standard G & E Com. Mid-Continent Air. Prospectus KING & KING ■ Members N. Y. Security Dealers Assn. Ass'n of Securities Dealers, Inc. Nat'l 40 XKohnnge «.» N.Y, 5 By ROSWELtr MAGILL< - ; .', V). Former Under Secretary of the Treasury . -Reviewing,principal facts relating to busiriess situation, Dr. Slichter //Former Government official maintains good tax laws are-needed toy / ; concludes prospects for profits depend'upon industrial peace and )! / promote business activity required to support enormously expanded i that adjustments in the price structure are due.' Holds immediate /Federal budget. Pleads for reduction in expenditure, demonstrat¬ ]'■' outldok for industrial peace is good, and .drop in prices next'year; ing how individual income tax rate as directly correlated therewith., will not reduce output/ Takes optimistic view of future produc- ! Advocates reduction in corporate rate, with some credit fdr divi' tion and employment and advocates: (1) holding doWU pricCs of I; dends paid. Recommends elimination of "nuisance taxes," but finished goods, particularly goods out-of-line with general price// retention of excised levies confined to ;a. few, productive.* sources*,>' level; (2) refusal of wage increases that require price increases; We are surrounded these -days by too many things that we-don't (3) getting trade unions to aid in promoting labor efficiency; * know about and that .we can't control.. The atom b^omb/ oun-rslations i/' ! (4) negotiating long-term contracts with unions; (5) :discouragetp Russia; or close -at home,- ther. solution of the labor .turmoil, ) ment t)f credit expansion; and (6) end of Federal deficits. price ' ' ■ ■ - * ■ l-* -■■■-v : ;y; « . SECURITIES CORP. Established 1920 • . University ♦ Higgins,lnc* *With SLICHTER* Lamont University.Professor, Harvard ■<.. HA 3-8778 '• - BlLZi MLETYPl XT 1-433 ■■ ;v';!.', Elk Horn Coal — * These remarks will fall- into' three parts. First, I wish to point out some of the. most significant-facts-in the, present business sit- Common & Preferred International Elevating Pharmaceutical Organics j - - 120 Broadway, WOrth Bell Exchange Ni-Y. 5, " ,: trefids are in¬ dicated,, ■ b y these facts. Third ^Iwish NY d isc u'ss 1-122T I V'v 1 3/68, Issued-: , done, by busi- Class *'A" ; to the mote sta- York Curb Exchange Nassau Street, New York 5 than it was of last prevailing prices taxes during the latter-half of 1946 will Stock- Wells* address* by Prof.- Slichter American Overseas Common & Preferred Airlines /. Street, New York 5 ' ' *•' -\ • hope that they will leadership, • v. : -• U' .v.' 1-1843 \ industry as • industry/ would than, in J ' ' ! 1940. ments long; enough to give po¬ tentialities are-and can com¬ avail¬ - of pri¬ * be 43.2% / With, in¬ above 1940.- As New York Etock New York Curb 1 ■, • Exchange Exchange d Prices 3. N.Y/ NY 1-1557; v I; American braacii office*: oor ; Gas & Pbwer / Birmingham Electrie/ . ?" ' do what we matter of fact, it /. has been strong upward a pres- 3097) on page CANADIAN INDUSTRIALS CANADIAN BANKS , ; , Hanover 2-4850 & 1127 ) dent and We Edward A. Pureed & Co. siock Exchange Members New York Curb Exchange can 50 Bell System Teletype NY 1-191S/ from its • New York 4, N. Y. Our Lady • •: " J Like these matters. on as a a ; the^ of* • Financial District i : : ■' * ■ ■' 'v;.V-C Your Contribution, is* Earnestly ? 'J Solicited for the Building Fund - !!;/;// obfuscated ?'■ we case will listen to will try not to we by the in pretty a that the Our lawyer's the- end, we • NEW YORK 6, N.Y./ > I am a witness in witness and a some facts for you, but some speculation i A War the Memorial Financial in i District : * proceeding, with the ordinary faults of more be¬ Your Contribution is as (Continued on Earnestly Solicited for the Building Fund indulge in .< to the future. I * may even - state < some • Teletype NY l -672' Lady of" Victory Church sensible community sides, for I shall not merely digest Members N.. Y. Stock Exchange and Other Principal Exchanges i evidence; be this Goodbody & CGb 115 BROADWAY the Frank C. Masterson & Co, jury jury, page opinions** JOSEPH McMANUS & CO. 3080) ' A Complete - We have prepared a\Memorandum " ... Brokerage Service ■ , I j on * •" " -J- •• •'* NATIONAL GAS : •'* ! N athan Straus -Duparquet, Inc. for Which is available Banks and Dealers on request to Banks, Brokers !and Dealers . - * Ifember* New York Security Dealers Ass* York Teletype NY 1-2361. :• 1 Private Wires to — SOW — QUOTED. ' * J-G-White 6 Company ''■ Security Dealers Association, Telephone HAnover 2*24001 Punta Alegre Sugar Quotations Upon RequeH : . 37 WALt STREET Teletype 1-376-377-378 Buffalo*—Cleveland—Detroit*—Pittsburgb-—»St. INCORPORATED J 74 Trinity Place, New York 6, N. Y. 120 Broadway, N. Y. 5, N. Y. 1 Common - Troster, Currie & Summers Member New Common CORPORATION BOUGHT C. E. de Wiliers & Co. Savannah Sugar: & ELECTRIC • Loui& | / NEW YORK 5 I'. PARR I Members \sew York ESTABLISHED; 1890 Telf HAnover 2-9300; ; Tele. NY 1-1815 New & CO. York ' Stock Exchange. Curb Exch. Assoo. Member J New York Coffee & Sugar Exchange • ' r- ''' '■ ' '/:'V= f --Li-i, Af War. Memorial in / ///%- present peak, and what rf American citizens sit v ''-.! . Victory Church $•-' specifically what us « Broadway WHitehall 4-8120 kO// Secretary of the Treas¬ tell, to will abide by. CANADIAN UTILITIES Telephone BArclay 7-0100 Central/ Pttb,) UtiLt Wi S4 k reasonably expecl; the Presi¬ can conclusion Pr\P Canadian Securities Dep^/.!/!v> Teletypes—NY, 1-1126 Scranton Elec. Com^; given^ where it; will be used.f! We will/come) to .. CANADIAN MINES f. Over-the-Counter Stocks and Bonds. 1 Members N. • Y:, Security Dealers- Assn. i Members New York ;tq control them. gyrations;/ and, is maintained for the accumulation BTeeueanAC-ompon^ Northern Indiana P.S.'. _ " | or placement of large blocks of ■V are Tel. REctor 2-7815 Department REctor 2-7630 Direct wire* to high relative/ to permanent tax structure we must costs. .During. the> last year there look forward to. ^ ) , BROADWAY, NEW YORK 5 a We Maintain Active Markete irt Uy S^ FUNDS for "Special Situations" St., N. Y. 5 in us don't.know much about the Bell HAnover 2-0700 New Orleans, La.-Birmingham, Ala. peo¬ he; has accomplished,-what its No at the start,v but we: Our , Broad St., New York 4, (■ i Unfor¬ compared ury Was 49% above 1940/ (Continued 37 Wall Members New York Stock Exchange/ •; I-25 108% above il940 and the rate of spending the budget expenditures are. necessary same as in 1940, one would expect and why; what the budget outlook the price level to be. about 45 %. is^ if r national income- declines , • Members 120 3 Steiner, Rouse & Co. give tunately, ability to ,lead the- able 'on<the greater "jN^C PONNELL & To. WHitehall 3-1223 NY Request ! on> ' thnspecialists,: simple terms a;statement of what comes/ after: taxes H. 6. BKIINS & CO: Teletype ; • r employed with 42.3 million in 1940. vate. Bought—Sold—Quoted p Bell persons were* private iml94Q (less than the usual rate of Stock r. )Telephony: in | increase) ,-J physical output ' 20 Pine Analysis going to * Rea¬ change iff the 'average before the American Pharmaceu¬ work weekL If manufacturing be sonably ask the Secretary of War tical: Manufacturers' Association, accepted as a rough measure of or the Chief of; the General. Staff New York City, Dec. 11, 1946. the change in hours, the average to give us specific statements on wprkj week- in October, 1946,? was how much of an army he thinks about 5% longer than during the we need, how he thinks we ought year 1940. If output per manhour to get it, what training it/will be was; 10% more in/ October than A. S. Campbell Company Common * - about 108%': above the annual rate in 1940.' In October, 1946, about spring." The in¬ 52 million of/individuals* after come *An Byrndun Corporation Struthers to the ; people greater in relation' to7in' and/with prices substan¬ prehensive; inf orrriation. is Bell System Teletype NY 1-1548 Common he . the of - Telephone COrtlandt' 7*4070 f ' the big problems to and duction comes How is v' / It is a great temptation to leave quarter This is one of/the . buy 4t ?: wholesale the r first , Vanderhoef & Robinson 'si pro- to . maintenance Members New October. and of Bought' -S old-—Quoted # ; ' 1956. Savoy Plaza ManufacturingGo tially higher than last spring, .'it is ple and< ability-to comprehend .the economy- -i n obvious that .the upward pressure atom -bombr are not likely to re¬ Prof. S. H. Slichter the immedi- dn prices is considerably less than side in the same man;- Congress¬ : ih the first quarter. xate future.menand- scientific experts on ) Fifteen principal facts -in the ; | 2. Prices are slightly high rel¬ atomic energy are two quite dif¬ present business situation impress ative to prpduction and incomes me as particularly significant for when ope uses the prewar rela¬ ferent breeds of cats.-Under-these the immediate future; ''KJ' ' tionships betweerf the^three /as-a circumstances; we the people/ can "i 1.: The balance between produc¬ yardstick/ Incomes after, taxes at reasonably ask the scientist to tion, prices, and incomes is con¬ the present time;, are running pause in his devastating experi¬ siderably less favorable the Savoy Plaza . the index he- eat? can . « Rogers Peet > Preferred Rockwell con¬ personal problems press for solu^tion/ - Where is he to. live? What a rapid gains in prices, in the J ness,;lab or,, 7 a n d govern- history of the country. With pro¬ Hathaway Bakeries & 12.3%l in f / Common been moderate gain in the supply f of goods relative to incomes. Iri ad¬ dition there * has been-a rise " of whatmay: be prices between V bility- New, When there ;has I ment i quarter/ Thus most 2-4230 Teletype about) If he-is . i .to) Members Baltimore Stock little Sec-<^" ' scientious,/he' feels h'e ought td ondt: I wish, to be about r, 10% > aboye : the - first kpow about at least some of them, but a s k he hardly knows where to be¬ J wh at quarter. -V Industrials production;! in t b u-s i ffe.s s October was 13:7% above the- first gin to.learn; and meanwhile /his" 'A* International Resources knows uation.■ / Kaiser. McEwen & May, - Estate Commont Jones - cbntrol, the form and extent of ntiilitary preparedness all 'are subjects that the man "in the-street ! 20 WALL i-FI ST., NEW YORK HANOVER 2-9612 ; Number 4550 Volume 164 :/r- ' . r ' * 3011 THE COMMERCIAL & FINANCIAL CHRONICLE ' INDEX /ggg// ^ Articles and News Holland's Present International B. S. Paffe AW Investment Bankers Association of America Holds 35th :rAnnual Convention i;^.*w,wUC.i.J.C:i:i.-i;Coyer cf By DR. W. T. F. SLEE De-Rooseveltization—Melchior PalyL___——Cover Markets in Economist ;:;f.iTree Versus Fixfed Ekchanges^Hehe Leon—^Oover The Economic Outlook—Sumner H. Slichter^————,.3010 U" j(r Design for —William '--'i ■ / .■*' —John i DuttOn - _ You and 13011 — ■ Germany—Poor-House Changes in Wage figures, guilders,- as average 3015 ^ - 3016 Wolman—— figure 85 ; ; Taxation 3024 D; Does Tax of . : < System Discourage Business?—W. L. Hearne—3028 | Buehler G. "Double Taxation" of Corporate Profits—Richard REPORTSigpilll 1BA ADDRESSES AND I —_———-—Cover :-;i Story Convention IBA (coal) was, equip¬ / ■..■/'.,/ /./;. Mortgage Certificates ' and is, a most serious . Ruhr William Slee re¬ and the liquidated the ergy G0LDWATER, FRANK 10GDEN i *. imports machinery) are necessary to get strike production apparatus going. 39 . Broadway, New York, N. Y.! r Past Year and Future Outlook of IBA—Charles S. Garland 3044 i Basic Problems in Investment Process—James J. Caffrey 3045 ; In Hopkinson, Attendance _3046 I" Securities—Emilio Collado 3048 | Convention IBA at The International Bank and Its —— Selling Savings Bonds for Good Public Relations ' —Morris - M. —1_————'——3049 i; L. Townsend Member New York Security if U.S.A^ had fully bottleneck in en¬ ; ; < " f; : how much the British em¬ on Ruhr coal and the coal in this Plastic country, will affect (Continued 3095) on page - j . ^/•Ttfeport v Activities——13056; on 1 '-«• f * ' *• ^ '' ' # * ' ' '<t v'l > ; i Studying Proposal,torRevise.Schedule of ; > ^ lj Commissions ■ on /.Transactions/ ■ in Securities.—;U J3013. ;. :j Gale Johnston to Head St. Louis Bank-—. ————,.3013 a .NYSE of Unlisted Issuer Corporations/ Than $3 Million Assets—James J. Caffrey 3014 SEC Wilt Not Seek Control With More Eugene Meyer to Plead for Herring Prospectus— 1 Must Revise Labor Laws—Senator Ball—— . & UFE Moves Offices and ; 3022 j —-—3028 j 3120 >, With Mexicans.^i—13120 / Garland Sees End of Artificial Interest Rates—3120 Secretary / Snyder Discusses Finances Charles S. Page Business Insurance Stocks Man's Bookshelf. 3022 3120 .3103 ./ 3018 -Canadian Securities Dealer-Broker Investment ... "Recommendations Municipal News and.Notes. - .:/./// , Real H Securities Railroad Estate 3105 :NSTA Notes ;<•». • 3020 •Observations—A. Wilfred May...3013 Our Reporter on Governments. /. 3031 Our Reporter's Report.......... .3119 Einzig—"Hard", and rSoft>" / ; and cooperation is to prevail between the members of thb we a 3017 Prospective Security Offerings. .3118 Public Utility Securities..,; 3016 i.. • -t -l • Securities (Continued We Afembert New York Haytian Corporation Punta Alegre Sugar ; ; A. L Staley Mfg. Sugar Assoc. Lea Fabrics interested in offerings of PREFERRED STOCKS U. S. Sugar Commodore Hotel *' ^Fidelity Electric Co. > > Class A Common Stock Susquehanna Mills •Prospectus on request Spencer Trask & Co. Members Members 32 N. Y. 25 New York Stock Broad Street, New Tel.: HAnover York 4 Members New York Curb 135 S. La Salle St., Exchange Chicago 3 / Tel.: Andover 4690 2-4300 Boston Albany Exchange Teletype- -NY 1-5 - • Schenectady ; Glens Falls Members New York Security Dealers Assn. 25 Broad St., New York '■"/ -/■/ ' Worcester - DUNNESCO. WHitehall 3-0272—Teletype Private Coca-Cola Bottling Co. of New - York//: Coca-Cola Bottling Co. of St. Louis Wire to 4, N. Y. NY 1-9S6 Boston Coca-Cola Bottling Macfadden Publications, Inc. WHitehall 4-6330 Teletype NY 1-832 ... Co. of <• Chicago* * Coca-Cola Bottling Co. of Los Angeles Panama Coca-Cola Bottling Co. , * HOIlROSESIkeSIER CHICAGO 4 834 Direct Wire National Red Rock Bottlers, Inc. (Atlanta) Bank Co. Radiator Co. , Board of Trade Bldg. , 1968 Trust \ . "v 6s, Public National & Security Dealers Assn. Broadway NEW YORK 4 \ Stock Exchange 1 i ? i * often; Bureaucrats and politicians Harrison 2075 Teletype CO 129 Service New York—Chicago—St. Louis Kansas Ciiy—Los Angelea ESTABLISHED 1914 v . ;": Specialists in Soft Drink Stocks j 74 Telephone: Teletypes: NY 1-375 — NY 1-2751 upon Request C.E. Unterberg&Co. Members Trinity Place, New York 6, N. Y. BOwling Greeu 9-7400 Analysis N. Y. Security Dealers Ass'n Broadway, New .York 6, N.Y.i Telephone* BOwliiig Green 9-3565 .i. i 61 Teletype NY 1-1666 i ; Ball Teletype NY 1-2033 IL • are WOrth 2-0308 . Teletype NY 1-84 Bell System T .,3110 Cro well-Collier > " Broadway Possibly thRt's why Markets, (Walter Whyte Says) INC. Newburger, Loeb & Co. 15 Broad SL N.Y.5 Members New York Security Dealers Assn. Eastern Registration. .3112 / /, Now in Tomorrow's DIfcby 4-8640 n to the good. their other ;Virtues an ability/to read the under "Securities Salesman's1 Corner" on page 3102) ! .3109 STRAUSS BROS. Co. N. Y. Title & Mtge. Co. ] hll have elections every so Graham-Paige 4s Co. Lawyers Title & Guar. Prudence Co. Well, it's Shops Hi BIO 0 & to. few snips in its girdle and un^- ' Bond & Mtge. Guar. Co. Lawyers Mortgage. a Securities Salesman's Corner.,,. .3102 Vicana Sugar CERTIFICATES ■ Billings & Spencer Punk Alegre Sugar TITLE COMPANY ■fi-Hu'. diidii going to take Page .......... Currenciesj little. Corp. Company National Shirt number among Mutual Funds ; Thiokol National 170 bend Securities........... 3020 . .3022 ' ............ TRADING MARKETS during his forthcoming High Grade Public Utility and Industrial Regular Features Bank and Chicago policy of harmony, understanding, new Commission is 3021 Seeks to Join AFL A administration; j R.lWasoh^!lllll.3023l:j Condemned-^CUrence B. Randall——3026 ; Bunting President of NAM——.— Earl / Exchange Commission, has some fencoUTaging things to Say SEC and; thersecurities NAM'k Program for Prosperity—Robert Closed Shop t by squawks that "free riding" does or James J. Caffrey, the new Chairman of the Securities <;>•:' / World Bank Issues-,———1—3016 i;. SEC Issues New Rule on Red Reilly &Co.,b, j New York in the SEC chairmanship and its executive personnel. ) Intelligent investors cannot be created by sticking their noses into ' about the attitude of the Commission [■ ; give them enough stuff. Best protection for investor is edueation and sound advice, v J"-^ H^ ; Laws,._3057 j 20% Tax Reduction,——^1—_3058 j Expects Overall J. F. not 1; Urges Revision and Amendment of State Securities 'i f' : By JOHN DUTTON Request on new unintelligible prospectuses, Periods Shortened--—11 _--1^3055''' ^Federal Legislation Committee Reports Prospectus permanency . Market-:!—-——3053 if/Municipal j .Securities ^ Com Wants "Standby" I pblicy of harmony, understanding and cooperation between i SEC and securities industry is to prevail, there should be more ; Ground—________——_3051 j Rlse in Utilities ■ Equity Financing—fc—^——J-«-.-*3052 | >31946 Treasury Finance and Securities ll HI Reports Railroad Credit Losing Cites of Dealers Assn. Ino. National Assn. of Security Dealers, Will He Love Us in May As He Does in Decembei? Financing 3050 j Industrial Securities Committee Expects Heavy i Teletype NY 1-1203 HAnover 2-8970 supply, Just 11 (raw material, bargo but ; Materials Jr;_..^.i—————*.—,.....3043 Edward WHittehall 4-6551 supply Carry-Over Problems of Coming Year " - Title Company industries, export very serious eral, all over Europe. ; ! ! Recently, the Ministry of Ener¬ gy could declare that strongly im¬ proved Dutch coal production, coupled with imports; from the first their : All bottleneck for production in gen¬ .war-- covery, , Offerings Wanted overcome Besides,/^the f energy essential that technical difficulties.'"."' plight for ••their - Goode__3029 million 110 over insufficient trade had to is that exports are of ment-of export ap¬ torn countries 3027 Monopoly—Alfred to ' trade is showing results. exports and an¬ the ttiusic WALL STREET, NEW YORK 99 worldwide scarcity of certain raw materials, million The are ' However,- with! the an nually). in Austria—Herbert M. Bratter_3026 Check No of we, pay . <»- pre¬ guilders £ ' Corporations Should Be Taxed as Such—Matthew Woll—_3025 Our Economic Operations show (ap¬ proximately 1,000 / million . Taxation" released, just guilders Organized 'TAJ" Opposition to Proponents of Plan—Edmour Germain—3017 ■! Problems Facing Industry—C. E. Wilson _______2019 Proposed Remedies for Defects in Corporate -v —John L. Connolly—— prices ears. Obsolete Securities Dept. < rebuild its foreign proximately Opponents of Incorporation on NYSE Planning l!fSW: danger. monthly war Buffett__—___3016 Howard Trends—Leo against r Will the GOP Congress Fulfill War Commitments to Our People?—Congressman Holland's drive to , October 1 the the (1) Exports Jump in Third Quarter > \ Power-House —! or $*):—James P. Warburg And to denying—that we no "hogs" for your cats and dfcgs! are other countries, fails, the safety of as there's —but Telephone: ':Dempsey^^-^^fr^r^^:^y;r^:|i30l5 •^-Rev. ;Bernard.-;:,W; well as their dollar debts will be in .-——3014 A National Labor Relations Policy—Senator Ball ■yxty,:'--- Our Grave Inflationary Dangers even not occur until 1950. may drive by Holland, ; Control—Allan Sproul—__3012 i———3012 Money Management and Credit Washington H ,ViV-1.' ———3011 _r^_— • She is incurring poten¬ tial hardships by the present necessity of buying imports at inflated prices with borrowed money«, He holds that if the imminent exporting of payments Will He Love US in May As He Does in December? iL , .• Slee shown surprising strength »' Economic Outlook Holland's Present International FLYING topping prewar figures, her balanc¬ /; _„_3010 ft,-;;* System—^— Tax Our Federal RUMORS ARE :V ' > although Holland's export trade recently has asserts COMPANY » # n *. r I 'i v.-* * •* •* .€ ; < TtfE /3012 y\ <>■ * , COMiiEECIAL&¥MANCIAL dHROhlCtS Thursday, December 12, 1946 |<> ... li' ■. 'iJfc *•"* :■ J;!"'1' |f I''' *: JU: ,v > £ r'.-l ■HI i^ J®y AIXAK SPROUL* I I President, Federal Reserve Bank of New York' Stating primary job of Reserve Banks is overall credit administra¬ serve demands of sustained high production, high income,: tion to and high employment, while preserving public faith in our currency! Mr. Sprcul contends gold standard, in terms of cur¬ and credit, rency convertible into gold, is not likely to return. Stresses need of, international monetary management and defends work of Federal Amer. Window Glass Com. & Pfd. Reserve System in Buckeye Steel Castings Old • , Pfd. qualitative credit controls must be maintained and concludes' far as inflation is concerned, ours is essentially a holding! operation.- Sees inflation remedy in more efficient production. ( theatres! Jj I have decided Expreso Aereo General Machinery and ; | control. This easy an Pfd. Mohawk Rubber* confronts and, criti¬ oid pfd. bination cal days, I feel i: would not be justified that I " in Conditioning United Drill & Tool "B"| Vacuum Concrete speaks for himself. My second Committed p^nippsea^ t^e mem¬ bers of I the Bpard oj^ Governors and representatives of the Federal1 Reserve Alabama Mills* * Aspinook Corp.* | ; Textron Wrnts. & Pfd. as and: sonde usual, to people, including the Federal Advisory Council. I cannot speak for such system; certainly not a beyond that, I am merely giv¬ you my personal views. I can only speak as one individual who participates in the work of the System. J Banks, which has specific My confession is that I do not relish these speaking jobs and like to avoid them when I can do so without dodging my responsibili¬ ties. Central bankers have long been known An address by Mr^ Sproul be¬ as members silent service. We have preferred, acts speak for and us them. not to try to explain approach has its ad¬ This vantages—many of difficult , our to actions are It also has our explain. its disadvantages,; the chief one perhaps being?that in a country such as ours you are likely to/ go out of pusiness if you public you are At domain. followed tradition in Banking Conference, New Jersey sisted Bankers program As bur y Park, N. J., Dec. 6, 1946. Derby Gas & Elec. <;•« New England P. S. Com. Puget S'nd P. & L. Com. the do not doing in the rate, May and blandishments of They'll be whittled down—but not^ • 1 ,■ ^ * ' ' ■ to that extent. union and individual employers is one way of breaking union monop¬ ,'V r»* ' ufA, "V ^ v" oly. It could be achieved by a Increasing the exemptions of individual incomes from the in-,, simple amendment to the National * f (Continued on V. • ' re¬ Page 3082) come tax v • ■ w*Bulletin ■ individuals. lots or Circular upon * the | '. request * ; ^Tennessee Gas&Trans.- *Prospectus available Lewis won't deter on Request 105 West Adam. Telephone BArclay 7-0100 St., Chicago Teletype NY 1-672 legislation on Lewis type leaders, will merely mean less speed and greater;' deliberation probably *Metal Forming Corp. 120 BROADWAY, N. Y. 5 REctor 2-8700 ■| $ , FIRST COLONY Direct Wires To CORPORATION Members New York Security Dealers Association *' 52 Tel Wall Street HAnover 2-8080 New York 5> N. Y• Teletype NY 1-242$ consideration -collective " bar¬ the, incoming Con¬ between contracts only the Corp. ♦Capital Records Aeronca Aircraft U. S. Finishing Com. & Pfd. investigation, is penning j.K.Rice,Jr.&Co, Established 1908 N. Security Dealers Assn. 2-4500—120 Broadway System Teletype N. Y. 1-714 REctor Bell Y. control resolu¬ The af¬ fable ex-publisher would like t<* a tion reviving that probe. the fishing party which big > game fish—or suckers—during the TNEC talk-/ resume no But the Senator should know- thing—Republicans in control Congress won't be so generous with fishing tackle as were O'Mahoney's D e mocratic col¬ leagues. one of * - ■Budget are now - * balancing • specialists diluting their prescrip¬ with uncertainties the of big ifs. They talk of, lim¬ iting outgo to income if the natwo I tional hasn't been by the coal strike and if the anticipated in¬ dustrial slump fails to snowball next year. Privately, many of them will tell discreet ears they expect reductions in normal Federal expenditures to be more : than offset by employment shrinkage and subsequent Fed¬ eral expenditures for work re¬ lief along about the third quar¬ ter of 1947. economy thrown More slogan Members labor of bills. Already Senator O'Mahoney, Democrat of Wyoming and * con¬ tions *Prospectus on request f N. Y. 1-1286-1287-1288 I |lrll'l , Return to the old system gress. *Dumont Electric *Pro3pectaei Available ' gaining will be eyed and may be abolished by *Hungerford Plastics . cry against busi¬ industry will rise with and fest. *Hoving ^District Theatres Anti-monopoly ness netted him * Watch de¬ velopments in that direction. strike legislation? crusader; Con¬ Industry-wide ■ Phila; & Los Angeles legislative engi¬ the throttle of the anti- at Labor Relations Act. ductor of the unproductive TNEC ' greater wisdom also—in Congres¬ sional action.- Exchange and Other Principal Exchanges Broadway, New York 1926 ENTERPRISE PHONES Bartf'd 6111 Buff. 6021 Bos. 2100 * While flag" waving by John. L. Goodbody & Co. :• Members N.Y. Security Dealers Assn. • # - Marlin-Rockwell Carey (Philip) Mfg. 115 Ward & Co. - Qf happiness, wouldn't Treasury too se¬ punish Jhe verely. of EST. That would gener¬ the people; End of the coal strike will not soften the impact of such Members IS. Y. Stock , serious be surpris¬ H. H. Robertson Bought - Sold - Quoted "-V . ing if Congress raised the ex¬ emption plateaus to' $2,500 for married couples and $1,500 for * tProspectus Upon Request V* receive * gress will certainly enact laws making unions and union leaders accountable to government and *Crowell-Collier Pub. Standard Gas Elec. " will It wouldn't » Federal Water & Gas Southwest Natural Gas * * study, chairman for your | an- Spec. Part. p I Capitol) be voted without skidding them into a fiscal inferno.. So don't count a one-fifth shrinkage in your contributions to the Federal till. ate any in the Nation's on Bausch & Lomb Southeastern Corp.' I c ex¬ scene Hallelujah Republicans who have been preaching a 20% income tax cut right across the board are being gently hushed. With the camp meeting hysteria of the campaign subsiding, GOP/steersmen are regretting that 20% pledge. They now know such a slash can't Art Metals Construction Scranton Elec. U. i N. Delegate TV Washington and You ( Views of those behind the neers .Cent. States Elec., Com. | the traditionally, to let fore the 18th Mid-Year Trust and Association, of f, : "The Boss; Has Just Been Made A ing plain what N. J. Worsted, New two, go the Federal Reserve System. The Federal System as created -by the Congress of the United States is, in fact, a Federal system. There is the Board of Governors at Washington having broad powers of policy-making, supervision,, and coordination. There is the Federal Open Market Upson Corp.* the reserved, with lesser with regard to the future. I can matters. Before I embark on this try to interpret policy once it has discussion, i however, I - should been fixed by the appropriate make two statements arid one body Within the System but, if i I not speak for Tenn. Products of been the statement is that I cannot and do l| Richardson Co. ' Taylor-Wharton* agency, taking up your time He - arid the powers central have Allan Sproul debt, I cannot and do not speak for the Secretary of the Treasury. Philip Carey If Purolator Prod.* one have been given to some to the constituent parts, some to a com-; My first statement is that while my talk must include observations on the management of the public N.Y. New Hav. & Hart. been time national and regional; some the me in these have system; it is' at same confession. Moxie . eral central a banker w of directors; given certain statutory powers and which have certain powers of advice arid counsel growing out of those statutory powers. This is a Fed¬ most the boards their which subject for popular pres¬ entation, but it as -■ and important Minn. & Ontario Paper Missouri Pac. > - the twelve Federal Reserve Banks subject which Majestic Radio & Tel. Michigan Chemical || ' "f | money credit is not is |:g|||.yLanova||li| U. S. Air '.'..ft* tonight management Hartford-Empire Co.* Higgins Inc. ; , authority over the open market operations of the banks. There are about Gt. Amer. Industries ;:|v/ /'•■•V,' <$>- *r . to : talk? with you Old ' ■ Douglas Shoe* . ' '• ■ Having been given freedom of choice—an important freedom which those who are interested in other freedoms sometimes neglect- Diebold Inc.* | | District "so .; , low interest rates and in sup-!~ Holds quantitative as well war at as Cinecolor Chicago R. I. & Pac. I S's; ' financing porting government security markets. out of gear facts for of a investors legislative is the drive for which the Securities and Exchange Commission is The is drafting proposed agency amendments doing spadework. to (Continued the SEC on page 3102) Act. ; .: THE JU* J , t,4 ^ NYSE .zx^ , \ ' -a i» COMMERCIAL & FINANCIAL CHRONICLE ^ -i. Studying Proposal to Revise Schedule of #• , « ;W Commissions ■ »**. j. 4 ,».♦•„ V ■»•!•• 'm, " t. Transactions on NYSE . ;t ; ; suggestion of on Bonuses Securities in ;of its member firms. Exchange is drying up a tentative first draft of a new schedule it proposes first to discuss with Securities and Exchange Commission and then, possibly, present to membership for a vote. Commissions are y rigidly set by Constitution of the Exchange and an amendment , will be necessary to effect a change. Firms want added revenue to v meet higher costs of doing business. v ry f Acting ' tor of the. The Government determination to cling to regulation credit—one of the government's few remaining outposts the Federal Reserve authorities •: t.. y • - y ; far ahead with the proposition with¬ Feeling the pinch of increased out first having some kind of an costs of doing business, due pri-; understanding with the SEC. ; ; marily to the higher wages which must now be paid as compared with 1942 when the present sched¬ ule went ; into effect, a number * change have asked for a revision rates to provide increases in revenue large enough to cover Gale Johnston to Head < St. Louis Bank The The matter at the moment is in election ston change and it won't go before the Mercantile Board of Governors consideration draft further for until incorporating the essentials which the firms wanted included be drawn up.: y Minimum commissions which can charge are rig¬ by Article 15 of the Constitution of the Exchange and before the rates can be changed the Constitution, it is pointed out, be must amended. What 1, John¬ F, of President Commerce the and Bank Co., St. Louis, Mo., on Feb. 1947, resignation his and Vice-President Second of as the Metropolitan Life Insurance Com¬ • member firms now Trust tentative a can idly set to Gale of become the hands of the staff of the Ex¬ is pany was announced by Leroy A. Lincoln, President of the Metro¬ The successor to Mr. Johnston, ; in con¬ charge of Group insurance sales for —- ; Met- the general upward revision of all the rates. Many rates will un¬ ropolitan, will doubtedly be thought now. pointed ou shortly, a rates down, desire, The houses added need. various in the ag- y\ - y in Before the Board of Governors discuss the issue with the entire commissions can which the brokers charge. .The Board feels that >WWl8m Published The COMMERCIAL and JU • 25 B. Park fj'sy ' i DANA COMPANY, 2-9570 to DANA 9576 SEIBERT, V • Administration's concerning for them.. Between 1940 and 1946 the prices of outh cars have already risen 38-40%,-while Chevrolet and Plym¬ disposable per capita (adjusted for the cost of living) has increased by only 9%. Even allowing for statistical error, it cannot be denied that the pres¬ ent prices of consumer goods are very high in relation to purchasing power. - report to, or ob¬ of, the Exchange with Christmas bonuses payments to their or adjusting or employees. own CANADIAN SECURITIES U Abitibi Pr. & Paper 5s, 1965 Brown Company 5s, 1959 Calgary Power 5s, 1960 Int'l Hydro-EIectirc 6s, 1944 HAM SMITH SCft HAnover 2-0980. 52 WILLIAM ST., N. Y. 5 Bell Teletype NY 1-395 Toronto Montreal New York x „ Galveston Houston * - Lake Jefferson Sulphur be recalled that the Board's* field survey ment deficit and increased the individuals and businesses have been much smaller than during the war." Further it cites "reduced consumer savings while the rise in consumer expenditures for goods and services, many of which had not been available during the war, exceeded the increase in consumer years tan and incomes. plans for prior 16 he* was with the Metropoli¬ * St. Louis. in - Growth in individual holdings of i .wV iv y Publication* ) $25.00 per year. Standard , Record —Monthly (Foreign postage extra.) S/S & & Pfd. T. J. FEIBLEMAN & CO. Orleans Stock Exchange Membert Hew New Orleans 12, La. New York 4, N. Y. Richards Bldg. Arcade 41 Broad St.. Bo. 9-448* Bell Tel.—NY-1-493 ; . securities government 4 Insulator American ; Aggravation of the Production-Consumption Gap sup¬ San port of the all-important automobile market additionally are greatly aggravated by the continued administrative tightening of instalment Carlos Milling Albert Pick * terms credit," are American Beverage durable goods ^"constituting the great still kept under wartime regulations. As a (Continued , on page i Nazareth Cement eleven other major classes of dollar bulk or. ! Mills Corp. Fruit Com. by the government in comparison with their prewar status. Although the Board removed its wartime restrictions on con¬ sumer > credit, effective December! 1^ automobile terms along with o ' * > The afore-mentioned "economic" obstacles to cash buyers' ; credit - r y i Other Earnings ceased." Defense For program. Jonas & Naumburg Lane Cotton of Liquid Asset Holdings private spending, current liquid savings by & Pfd. Com. Moreover, the evidence of surprising paucity of consumers' sav¬ ings and liquid assets, as adduced by the Reserve Board itself, renders highly inconsistent its deflationary consumer-credit efforts. It will Preferred ;* 3104) Note—On account of the fluctuations In the rate of be in made New York funds. . PETER BARKEN New York 4, N. Y. 32 Broadway, ? A- Bought Manager -— Sold — Tele. NY 1-2500 Tel. WHitehaH 4-6430 Quoted Thursday, December 12, 1946 Every Thursday (general news «*„- vertising issue) and every Monday (com¬ plete statistical issue — market quotation records, corporation news, bank clearings, state and city news, etc.) ; Other Offices; 135 S. La Salle AMERICAN t/o Edwards & Smith. Domestic, Canadian $2 & $4 PREFERREDS TELEPHONE : Copyright 1946 by William B. Dana i'.'; '• Company 25, as 1942, .. York,' N. Y., . the under office at post the Act at of New March 3, 1879. ;■ Subscription Rates , Subscriptions in United States, U. Possessions, Territories and Members S. Pan-American Union, in Dominion Canada. Other of $26.00 Countries, $33.00 per $29.00 per year; per as V v- ■ - ■ Co., Inc. 70 Pine Street, New York 5, N. Y. and if issued) y . ;'v MAHER & HULSEBOSCH WHitehaH 4-4970 . (When, '• v G. A. Saxtors 8c l%%Conv. Deb., due 1981 y v • '>■ §& TELEGRAPH| of year. ) ■ ■ matter Febru¬ Philippine • .■■■ second-class and SIS. Mining Issues/'t COMMON . Reentered Specialists in - Northeastern Water Co. St., Chi¬ cago 3, 111. (Telephone: State 0613); 1 Drapers' Gardens, London, E. C., England, ary economists own the vital gap between production volume, and buying power, -is or is not generally valid, it seems indisputable that at least the rise in automobile prices has been outstripping the public's ability to pay President WILLIAM D. RIGGS, Business end year exchange, remittances for for¬ eign subscriptions and advertisements must HERBERT D. SEIBERT, Editor & Publisher WILLIAM sales ; Savings Publishers Place, New York 8, REctor organi- State zations y Monthly •./•<i; Reg. U. 8. Patent Office WILLIAM with 1941 Bank and Quotation Record—Monthly $25.00 per year. (Foreign postage extra.) CHRONICLE not connection consumers ' Gale F. Johnston Twice Weekly FINANCIAL in of established the HHHHIMIV . C : said. ury, and as Field Director to Philadelphia main office of the Trading and Exchange Division of the Securities and Exchange Com¬ mission because, under the powers delegated to it by the Act of 1934, the SEC has jurisdiction over the Mr. theU.S.Treas- puts the question up to the mem¬ bership to vote,': too, it plans firms need factor tant the deter¬ tain the approval our September, 1945, led it to 'conclude that despite the widespread : P r i o r to assumption of wartime income inflation, the net residue of spendable comingli to savings remaining in the hands of the public was far below expecta¬ New York, Mr. tions. And in line therewith, the leading article in the Board's "Bulle¬ Johnston was tin" of November, 1946, under the caption "Slackened Growth In in Washington Liquid Assets," shows that "as a consequence of the reduced govern¬ they revenue * announced Lincoln the brokerage can the be is the at gregate, it it of compensa¬ has ' templated, it is understood, is not kept Exchange income •" ' J politan. the . determining the nation's volume of industrial activity. / \ , Such effective buying power directed to the / automobile industry,t certainly constitutes the A. Wilfred May ■ mainspring of our further reconversion progress. With its current attainment of high output, that industry will very soon be confronted with the very crucial problem of making the motor car consumable by our mass population. Whether the contentions • Governors, relative , , these heavier expenses. ■x tion, are willing and able to pay, productive capacity for peacetime usage now practically unlimited, < consumers' effective: purchasing power becomes again the most impor- With of mined that members and member ;'-r prices Board of consumer of control:— to permissible bases of „ . of. the the Continuation of the Regulation W-type of restriction, which was justified in wartime as an integral part of the nation's overall anti-inflationary campaign, is not only rendered useless by the ending of our armament economy, but will be affirmatively injurious to our present full em¬ ployment and production efforts. ' : The total volume of consumption depends both on the amount of goods available, and on the - / / ^'With reference to Rule 436 of embracing immediate as well as are long-term fallacies. !y y.' on » of. houses affiliated with the Ex¬ Consumer Underprivileged the Versus In its apparent suggestion of some it would not want to go very York the. New Department of Member Firms that * the purchase and sale of securities listed on the Big Board. ; ! of Stock ^Exchange Were advised; on Dec. 10; by. Edward C, Gray, Direc¬ seriously considering the possibility of revis¬ ing its schedule of commissions Employees ^ | to ^Members some -The New York Stock Exchange, acting on the of its member firms, is ^MSStreas^Mst,. Brokers In ; / 4-2422 113 Hudson St., NY 1-2613 Office Branch ■ : Teletype Telephone WHitehall v Securities,, New York 5, N. Y. 62 William St. Teletype NY 1-609 , Dealers & Investment Jersey City, N. J. year. Prospectus on request ; V' '-y -f y •; p .v ■ v."v . y Dravo Corp.* *Air Products, y American Maize Prod. Co. Josephthal&Co. HODSON& COMPANY, Members New York Stock New York Curb Inc. t Telephone: Bought 19 REctor 2-5000 Congress St. — Sold *Prospectus — . on Quoted request *Prospectus FREDERIC H. HATCH & CO., INC. r - ■ Broadway, New York $2.40 Conv. Preferred ^Universal Winding Co. Com. Exchange and other Exchanges 120 Broadway, New York 5 165 Raytheon Manufacturing Co. : Common Exchange Inc. Com. & "A" Boston 9 \ MEMBERS - N. Established Y. 1888 SECURITY DEALERS U ASSOCIATION request Reynolds & Co. . Members -0;-^ on 120 Nein York Telephone: - . Stock. Exchange ' Broadway, New York 5. N. Y. REctor 2-8600 ' Telephone: LAfayette 4620 63 Wall Street, New York 5, N. Y. , v Bell Teletype NY 1-897 , Bell Teletype: NY 1-635 • ^ ; 3014 BALTIMORE - Baltimore Transit Co. All LOS ANGELES Central Hanover Bank Seaboard* Fin. ** Announces Appointors meeting of the Executive Common' & Preferred Issues : Bayway Terminal Walt National Sash Weight //.. Board the of " STEIN BROS. & BOYCE OSCAR F. KRAFT & CO. fKerakers New York & Baltimore Stock Exchanges and other leading exchanges 6th WEST 530 STREET LOS ANGELES, 14, « S* CALVERT ST., BALTIMORE 2 Bell Teletype BA <393 -Tel.. Trinity 2529, { New York Telephone BEctor 2-3337 CALIF. S.-Duncan and George F. Mohrmann, Assistant Treasurers; Adolph Garnjcist and Edward J. Jungerman,.Assistant Auditors; and JOhn H. Andren, Assistant Manager of the Foreign Depart¬ LOUISVILLE BOSTON Bates Manufacturing Co. American Air Filter Berkshire Fine Spinning Assoc. - Dwight Manufacturing Co./.•'.:/•••.• Naumkeag Steam .Cotton American Turf; Ass'n Consider H. J.- •; Wiliett ' Parker Appliance Co. Purolator ■ f Girdier Products Saco Lowell Shops ' Corporation - Murphy Chair Company •. Warren Brothers Class "C" •> BOSTON 9, HAN cock 8200 Incorporated > 31 MILK STREET 1st V*;'- MASS. Decries overriding economic power given to unions and lack of protection to individual worker and minority groups. Calls for thorough overhauling of National Labor Relations Act. " * We policy. of OMAHA, * NEB. Christopher — August Borchert and Jay H, Jv>.; M. Wooldridge with B. C. Christopher & Co., are Grain $t' Exchange Building. Bell Tele. LS 186 PHILADELPHIA No. Indiana Public Service" (Co. Merchants radically take months for that Prior Preferred ' : r: on heeded,; though may Amalgamated Sugar BUCKLEY BROTHERS , 1420 Walnut Street, 8c COMPANY Philadelphia 2 ESTABLISHED. 1899 New York {Tel. Hubbard 3790 : Los Angeles t 24 Federal Street, Boston 10 >v Tele, BS 128 toms of basic defects in , our policy getting at the causes these symptoms. We have leg-, rather than of Complete agreement on what those; changes islated for immediate crises rather than trying to change the policy which had brought .'about those , Senator - Jos. H. Ball However, it cannot be empha¬ changing our national labor policy will be no imme¬ crises. I hope we can avoid that mistake in the 80th Congress., I shall do what i can to prevent the Congress from being stampeded adopting hastily drawn, and inadequately considered < legisla¬ relations into diate panacea, or cure-all for our difficulties to day in this field. tion to deal with crisis such Such some immediate the coal shutdown* as attempts, in the long run will create more problems than/ they solve. thousands i of ihdividual trend has been to increase steadily Sen. Ball before the economic power of unions and the 51st Congress of Industry con¬ to decrease almost to the vanish¬ ducted by / the National Associaw ing point their legal duties and tion of Manufacturers, New York responsibilities. /The development :... (Cotninued on page 3088) tf/ City, Dec. 6, 1946. . *An address by : 160S* Main street Salt Lake City t ■ Pittsburgh, Pa. Hagerstown, Md. r N. Y. Telephone—WHitehall 3-7253 Private Wire System between Philadelphia, New York and Los Angeles "f. within > Our national policy today i$ the negotiations, agreements and dis¬ .result of some 15 or 20 years of during -which the putes between individual employ- development EDWARD L. BURTON Los Walter J. Connolly & Co., Inc. even there not be dreds of and New York, Philadelphia Angeles Stock Exchanges Also Member of < New York, Curb Exchange Request • are picture in the United States, whether it is stable and harmonious or chaotic and war-like, is the sum total of hun¬ , . ; Light ;' Utah-Idaho Sugar Distilling Corp. Members Circular that dt * and probably years change to reflect itself in ^ these hundreds of thousands Of individual relationships. One misr ]f take we made in recent years, in Congress was to deal with symp-^ • our present policy a n place r We can change national policy ) with reasonable speed, but it will • The labor relations Memos on Request Boston & Maine RR. there yvrong in tion Metal & Thermit Corp. taking the framework of national policy, sized strongly enough that legisla¬ Utah Power 6» unions representing their employees, people Should .be.:/ SALT LAKE CITY and ers - the Amer¬ is something ' & some |reat majority / B proceed today on the premise that the 8Qth Congress substantial changes In our national labor relations The . ' - ,3>- can will make believe /: Floor, Kentucky Home Life Bldg. Long Distance 238-9 under the law. At: the Branch offices, William Elliott, Edward T.< Matthews, Murray, Jr., William F. Hathjens and Henry F. Skelton, Assistant Treasurers; and William R. Augustine, Assistant Secretary. LOUISVILLE 2, KENTUCKY Teletype BS' 424 N. Y.: Telephone CAnal 6-8100 has right to intervene when .public interest is paramount; and ' an implimenting equality and responsibility by all groups ( f (3) changes BANKERS BOND £°! m | tied when possible by free collective bargaining; (2) government g;. / - Pont, Homsey Co. ( strife. warns M, Two With B. C. du sees new national labor policy fortb- \ legislation is no adequate remedy for industrial Lays down as principles r (1) all disputes should be set- ' j coming, but ican Winn & Lovett Grocery Inquiries Invited U. S. Senator from Minnesota Liberal Republican Senator ! ment. James J. Policy By HON. JOSEPH II. BALL* James Tele; LA 875 / Thursday, December 12,194S A National Labor Relations of and Trust Company held on Dec. 10. the followingV appointments were * approved: £ ■7 bhb ■? f. - ; /■; At the Main office* Donald W. Baker, Henry R« Juliand, Michael T. 'Meehan, William H. Miller, Frederick J. Millett, Max Nides, Jfames4 Richardson and J. Cornell Schenck,Assistant Secretaries; •?!"* Common . a Trustees of Central Hanover: Bank Cons. Rock Products Preferred At Committee * Disney /Common: A Preferred :/t// Monumental Radio . * THE COMMERCIAL & FINANCIAL' CHRONICLE Utah 1 /y BELL SYSTEM TELETYPE SU 464 , TRADING MARKETS New England Markets Retail New England '<:-V '• Bank -and . V 'J,.. • a century of leadership in complete fire protection / ///-.(/V Insurance Stocks Inactive Available .> - - . • a discount ■ 50%" ' STOCKS from net current assets. ;1 V■.'iJ 1 Securities at .of 'approximately . 1946 ' Low high_L__;19 to date-.-!! ix Established ' BOENNING & GO. Franklin Street, Boston 10, Mass. Liberty Members Salt • 1606 Walnut St., Philadelphia 3 2340 : ' "" «f; Portland Providence Springfield ' PH PEnnypacker 5-8200 Private Phone to N. Y. C, COrtlandt 7-1202 , 30 Lake Stuck .Bx.cba»ge.« - BROKERS *' Salt Lake City, Utah . r:v'i Phone 5-6172 I NORTHWEST MINING Botany Worsted Mills SECURITIES Empire "Southern Gas ■ . In a press conference at Falm Beach, addressed the IBA Convention, James J. " For Immediate Execution of Ordert Empire Steel or Quotes call TWX Sp-43 on Pittsburgh Railways Co. Light Co. Warner 3.30 % Preferred Stock Floor H. M. • EQUITABLE DES BUILDING MOINES 9, IOWA ♦ ♦ ♦ ♦"» ♦ » Time: Sp-82 at ■/■j./:/'//Jv the pro¬ tion and that substantial progress wif be" reported during the com* for im¬ provement in ( security "mar¬ gram jng year or pending tion programs, keting ^ proce¬ Byllesby & Company PHILADELPHIA dures now w as OFFICE Members Standard Stock Exchange 4/:./of Spokane :/ y:Brokers - Dealers « Underwriters ' ' : ST. LOUIS , some As to the location of SEC head¬ legisla¬ Con- to quarters, , He gress. h O W- James J. . Caffrey UTICA. N. Y. shareholders Foremost Dairies, Inc. Utica & Mohawk Common & Preferred Winn & Lovett Grocery Co. Cotton Stix&Co. Common & Preferred ■ Mills, Inc. boughtI-sold—quoted INVESTMENT SECURITIES Circular S09 OLIVE Clyde C. Pierce Corporation Florida Municipal & Corporate Securities ... -Barnett Nat'l Bank Bldg, Jacksonville Long Distance 47 Branch—St. "♦—4—♦ ♦ » ♦ I, INVESTING COMPANY INC. 238 Genesee St. Tel. 4-3195-*6-7 Auif ♦ i MOHAWK VALLEY St.LouisLMcv Member! St. Louis Stock Exchange Fla. ♦—•—♦—♦—» request STREET i Florida Teletype JK 181 Petersburg. on • Caffrey "guessed'* .'•/;///■/'' /'// its headquarters from Philadel¬ did not propose to phia back to Washington either late next spring or early summer. rCnew the recommendation made at the last session for extension The offices were - transferred to to corporations having 300 or more Philadelphia temporarily during, and assets of more $3,000,000 of the regulations regarding proxies, and publication of profits and trading position of directors or insiders. He an¬ nounced the Commission has now under consideration a formal rule which would permit a wider cir¬ culation of the trial '-red herring" than . Mr. that the Commission would move . eVer, that he Branches at' ■" - Kellogg, Idaho and Yakima, Wn. H ♦- tion ctnfpri Peyton Building, Spokane PH 73 mission would new Regardingthe stock market September, Mr. Caffrey agency has almost com¬ pleted its current study, and would soon issue a report on the causes and the problems involved. ' } said his ing study, and, propose disintegra^ break in undergo¬ that the Com¬ STANDARD SECURITIES CORPORATION RIttenhouse 6-3717 JACKSONVILLE, FLA. ■ Std. Pac. Other hours.' Stock Exchange Bldg. Phila. 2 Telephone Teletype Bell Tele. DM 184 Exchange from 10i45 to 11:30 A.M. Company Wawaset Sec. Co. Bought—Sold-—Quoted Phone 4-7159 of !•./ Sterling Motor Truck Fla.j on Dec. 4; whefe'he t Caffrey, Chairman of the fulfillment of the capitalization knd organization of public utility holding : companies, as required by Congress—is nearing comple¬ • Iowa Power & , Securities, and that American Box Board : Predicts "red herr^ng,' prospectus question will be*, f: soon-'settled, Commission told reporters SPOKANE. WASH. INCORPORATED sory concerns.. . f Will seek wider powers over investment advi- f Ex change • DES MOINES WHEEL0CK&CUMMINS over, , - / says ' Teletype SU 67 " ! - he profits || and trading provisions bf insiders' for corporations of $3 million \ J capital and 7898 Stock Exchange Building .1/ ' conference at Palm Beach, SEC Chairman Caffrey will not urge extension of regulations governing proxies and I W.H. CHILD, INC | Members Boston Stock Exchange Tel. b In press . : 9 F. L. PUTNAM 4 CO.. INC. 77 0orporationsWithMor^Than$3,OOO,OO(IAssets UTAH MINING 1 Industrials—Utilities , BROKERS and DEALERS Over ^ ; Secondary Distributions SEC Will Not Seek Control of Unlisted Issuer American-La France-Foamite Coverage Utica 2, N. Y. Tele. UT 16 the war. Mr. Caffrey favored a return to Washington in order, to facilitate the SEC's relationship with other government agencies. Arthur Iresch With Smith, Barney & Co. prospectuses. He also announced that a recommendation would be CHICAGO, ILL.—Arthur Tresch made to, Congress to widen the has become associated with Smith, Commission's control over invest¬ Barney & Co., 105 West Adams ment advisory services, but did Street, members of the New York not specify the exact nature of and Chicago Stock Exchanges. Mr. the control desired. Tresch was previously a partner Mr. Caffrey stated that one of the major problems of SEC—the in Arthur Tresch and Co. Germany—Poor-House /Our Grave Inflationary Danger! •J / < ' ; By ■ > . T .;,/>• within our price structure is due to oversupply of money and not to goods shortage. Father Dempsey points to eight-fold increase in our money and four-fold increase in bank • / r * - or /banks to '100% carry . We unacceptable.1 'Keynes' ideas, which, he says, I undesirable are reserves > or tLays * : j J inflationary policy to prewar -Inflation is process that can appear in the economy of a nation and is therefore difficult to define. Inflation affects a *in many ways the whole in¬ ter-relation of ; i s that > is a curate the way ;: our limited s - • _ Rey-B. W.Dempsey - arid to include all possible factors. For those- who ,rar<e^.interested,, ,1 might, in say sing, Dana ? Skinner's hook "Seven f Kinds pf * Inflation" treats Of all these variations and is. at pas ' once- of James P. fu-j Warburg life civilized toari; upon of planet. * , supply and the goods are peace but prosperity is indivisible. highest bidder. In such Just as today war anywhere in readable: and sound. . the total sum Of money the wprld means the: likelihood of Spent On' this commodity may not war everywhere in the world, so increase; it simply buys less goods a: case per*, dollar. Second, a certain corn- modity burg before the Foreign ~ Policy may be. plentiful; the .volume may Association, New York City, Dec. (Continued oni page 3105) i, be simple, in a aggression, of and of niceties (Corporation ||.International Cellucoltoii Products/Co. ' s 'J\ j ^ ' ' ,V|v/ r' *' « ' 111/ m - * . <; BOUGHT—SOLD—QUOTED *Analysis on request New 'York Hanseatic Corporation YORK 5, N. Y. ,120 BROADWAY, NEW Teletype: NY 1-583 SullivanWdron'Pro^ STOCK COMMON Manufacturers of. the Nationally Known of * such' formulas would We maintain markets at net prices in "WHIPSTER" i v *- C"/v s* ?-o - be A ' & r; '•('« '*** s •i- £'■ ; ,v -'V; V ' ? ^ ON REQUEST American Telephone : '.In the; popular-mind cause and effect are* frequently confused When inflation is associated .with a rise ' in ;prices. Tn ./ the great his¬ toric inflations in Germany, Rus¬ the increase in the money supply. and F. H. KOLLER & CO., Members N. Y. sia, /and, Austria,' no one but-stu¬ dents imputed these inflations to j NEW Telegraph Inc. Company Security Dealers Ass'n HI BROAD WAY \ '-'v- "i-. •v-■ ■ PROSPECTxis • dangerous in others'. YORK ?6, N. Y. BArcIay:7-0570 2%% -• Convertible Debentures The high prices were attributed to j shortages, or else i speculators \vere blamed- Suchv views may be merely inadequate or they may be Due 1961 Delivery when issued *finite i wrong. To i say-that prices have not risen and that therefore • we r '•/: .V - . V Subscription Rights ■ -v. disguised Telephone & E.ST, "2% %" Convertible ^Debentures arrangement *An address by Father; Dempsey and vatVthe;»Luncheon |Meetipg ,of> the Missouri 15, 1946., Association, Press - . . : K Nov « ^ *v}*'■!\i'. h,\ /• • We render n brokerage- service in ail Unlisted Securities : • "■ /'V; • j *•;*■: • • , v... ■■ ! '4- • Telephone: WHitehall 3-7830 • < ; ^ fc'ir i'. , : ' .A ""v j !•. k.v The; ^ / Securities Corporation MEMPHIS ; KNOXVILLEj ■ ; HARTFORD NASHVILLE- , BIRMINGHAM >• GREENSBORO r MELLON SECURITIES Merger of • ' 'Y CORPORATION—THE FIRST BOSTON CORPORATION New York Boston Pittsburgh VNEW ORLEANS CHATTANOOGA CHICAGO 'HARTFORD -• n T'- CORPORATION " •NEW YORK*. Street, New York 5 :V,5 FIRST BOSTON DALLAS 60 Wall :. v for • ' Prospectus supplied upon request i —— «Banks and Dealers '.r-r* ' Copyof. Prospectus available, on request Ass'n " /V ■ SJlilMHlUllo. Members N. Y. Security Dealers , Subscription Warrants , . c< described in the Prospectus on or before that time, DueDecember 15, 1961 •v , on scription; Warrants must be received by the Company in New/York or must be in the possession of Bankers Trust Company, New York, as agent, for stockholders pursuant to the Telegraph Go. diverted and that, or privilege will expire at 5 P.M. Monday, December 16, 1946. Sub¬ The subscription American rain." To say that the eviT effects or - ' complete of inflation have been postponed • . ■•■A,.,.'■ i' -V'/V.'., * opposite of the truth..It has been well stated that "high prices cause inflation in the same way that - wet streets cause 7 We maintain markets / in •> ; have avoided inflation may be the • j (Continued on page 3108) by / Prussia under the leadership : eco¬ Simple formulas may then suffice for particular cases., though the ^ be-| Germany is the chief testing cause liberately and successfully waged Polaroid vital inter¬ alike gross and powerful, .the refinement . Second: We have a de¬ Telephone: BArclay 7-5660 nomic science become superfluous. iise ' est in the future of Germany, ' the forces at work in ari economy are tion, dedicated to the doctrine that might makes right. came • f v. concrete instance inflation may be easily described and Jrecognized. When -may not wars *Text of an address by Mr. War- commodities class, of or again. That is one "why we have a vital irW9 terest in Germany's future. We, have the duty to see to it that there is no German warrior na-? reason being In ;1871; as fhe result three disturb the to allowed be world's peace Ger¬ Germany warrior nation must A German never three con- , f But though a valid definition pf inflation % of general ; application : Modern this ; ; sold to the Ipossibiiities • into ties. may be in short supply/ Buy¬ Peace And»Prosperity Indivisible ers bid against eabh'other for; this /I In this shrunken world,- not; only vadequate ton i cover/allthese, ; First: happiness • '*•' • • ? and prosperity, but • our national safety, and even the continued [ support this with memory, sponsible for bringing on a second. tehtio^::&;^ may own';: only the not bur own people but the whole human including ourselves. J ' j" . at % time I a ture commodity or" class of commodi¬ ac- i and same Commbdity Prices Rise upon will1 afiect race, prob¬ de¬ pend not only /Speaking generally, prices rise for; two reasons. First, a . certain bcthi technically n o w lem . \ Whyj infla-^ in We 7; k German rain in the firfet it did not place. simple to \ tion man solution of the • that our v / r therefore, inflation does _not ex¬ ist, is> like telling1 men who haye successfuUy1 worked * all. night to keep a swollen river in bounds if •-complex. And; jt is therefore ' define it that >;• of children. that ./and .price ,s Jj. •<fTh e ip rice? structure future ^and j. ^money,: goods, * not of lem is not-some remote academic will* be handled with the care it deserves. • This was in the timei grandfathers. Within ourthis modern Ger¬ many—born as a warrior nation —has shared the responsibility for bringing on one world catastrophe,1 and has been almost solely re¬ of Bismarck. problem of Germany. unsuited to U/S., and expresses are • here today to discuss the^ are This prob¬ poverty, oppression and unrest anywhere in the world today belief problem of reversal of j question of interest only to Students threaten the happiness and tran¬ of foreign afquility of all people everywhere. ; inflationary trend will not be handled properly. fairs. You and Thus, what happens in Germany What' I have to say to" you may be very simply summarized: I are here to may or may not interest us very much so far. as any sympathy for ? 1. We have in the United States today a grave inflationary talk about it \ the German people is concerned; because we | »v problem. V/ / / * - " ' " ' ; ■ - j ' ' '2; * This problem is wholly unnecessary and is the result of know "that it but what happens in Germany is v * misguided policies th&t could have been avoided. \\ directly af¬ of profound and vital interest to £. "There is /little reason 4oJ hope' that this explosive problem fects our own us for a different reason^-because V • Power cooperation, Holds Germany is^hub of European economy and therefore, a major continental prosperity. Says Germany, besides7 having only surplus coal produc¬ tion in Europe, is still the largest single compact mass of skilled labor and expert technology in Europe, and this is a major* factor in its productive capacity/Foresees no permanent peace, without restoration of German economy. Describes conditions in occupied Germany and concludes there should be two plans—one* a short-range and- one) a long-range agreement -on Germany's future. if factor in promoting trade; growth. Sees present increase in Average velocity.; of money; circulation as further inflation'danger./ Contends preven-1 ;1 lion* 0{s further ihflation' by higher interest rotes or by requiring; ductivity * Power-House or - /upon Great r deposits in last 25 years—far out of proportion to population, pro- i £ ;: . ' pressure ' '\ By JAMES P. WARBURG* ' * •/, Prominent banker, asserting peace and world-wide prosperity are indivisible, contends we have a vital interest in future of Germany because that country is laboratory for building an enduring peace based U , Regent, St. Louis University,, School of Commerce and Finance [ ! Asserting terrific , BERNARD W. DEMPSEY, S,J> 3015 FINANCIAL CHRONICLE THE COMMERCIAL & [Volume 164 / Number 4550 CLEVELAND / PROVIDENCE PHILADELPHIA RUTLAND SAN FRANCISCO SPRINGFIELD BUFFALO WASHINGTON | /"*v rt 3016 L'P S? .•«■' • THE COMMERCIAL & FINANCIAL CHRONICLE ?\ " ' ' vr-:'\,^vv Thursday December 12, 1946 i (a) 1946 earnings ' are above last year's, (b>. only abotit $790,000 in portfolio income will be lost through sale of the utility properties, and (c) over $4,000,000 in fixed charges and $3,500,000 in preferred dividend require¬ parent Public because obtainable is 1 Utility Securities Cities Service company ments will Cities Service Company has made steady progress during the past two years in streamlining its major utility sub-holding company j«iy stems—Cities Service Power & Light and Federal Light & Traction. iPower & Light disposed of its outlying properties, retaining Ohio saved. be the reveal effects consolidated share of finally merging its the interests,1• remaining present value of bonds per share [Light follows was (Federal dissolved Aug. will 30 and dissolved be in dividend their the the arrears, BB Preference Stock__.___ B Since the debentures interest from Jan. 1, (Cities Service Company. idends The top company recently sub¬ - Preference Stock— will'be 18.75 will no crue own For World Bank Issues Insurance Association of America considered to ac¬ after bankers other agents to solicit or these, serving Kansas exchanges of preferred stocks for City' and adjacent areas, are to be the new bonds, merged; the other two operate in Accompanying the description Canada and New York State.- [ v '•( of the Plan is an income state¬ 'Following are the main outlines ment for Cities Service Company /Of the recapitalization plan: Cities (parent company only) for the 12 Service Company's own funded months ended Oct. 31, 1946, ad¬ / debt was reduced June 1 to around burdens on the backs of the Amer¬ our step from in; World Bank's | campaign to ! stir invest-? and into activity on -behalf its - battle securities.' surance panies Eugena Meyer com- - : ' are associates at the Bank re¬ port Mr. Meyer as yesterday re¬ iterating his public explanation of his resignation as due to the con¬ clusion that now is the time to . new ; - burden is debt! interest annual is $262 was the billion. cost of this about; $5;t billion, ' Since able to pay its interest charges by additional borrowings. These obligations to war vic¬ Howard Buffett tims and war bond holders can ; be met three ways: (1) be repudiated outright. They can \ (2) They World War II saddled two per¬ can be largely repudiated by pay¬ manent and gigantic economic ment in steadily deteriorating dol¬ burdens on the backs of the Ameilars. (3) They can be paid in ican people. One is our duty to 1946 purchasing-power dollars. the widows, orphans, dependents, ("Obviously only one honorable;; and wounded of World War II. course is open. It is to pay these On Oct. 31, 2,022,082 • persons debts in dollars with a purchasing answer. legally barred from in¬ vesting in World Bank securities. His the Federal 1930, a period of sixteen years, the Federal government has only been n will second the debt The next 12 supply the of cost Our Colossal Debt * The dollar? Congress entire 1946, deterioration i costing about $6 billion more than now The sham ? ■ colossal Federal debt. On Nov. 15, con¬ months receiving expenditures for veterans . . against of the Total the continued The Bank's fi-: , those government for any one year in the Twenties. V ' /' left- duct (a of include temporary GI benefits. * * are inter- wingers, not annually. That is much nqtionalists, militarists, ment interests J ^ duty to ... other subsidiary, Arkansas- remain outstanding the new bonds nancing can¬ not succeed Louisiana Gas Co. ' Thus Cities will,be subordinate. \ . with invest¬ Service will eventually be prin¬ The Plan must be authorized ment public cipally in the oil and natural gas and approved by the SEC, by a business, with no utility invest¬ Federal Court and by at least 60% apathetic or suspicious. In ments except for several small re¬ of the preferred (and preference practically tail gas companies, which it will stocks. The company may employ every state inseek to retain on an exempt basis. of Republican Congressional majority move courageously World War II saddled two per-<8>manent and gigantic economic does Republicans, group in New York tomorrow will cowed by the constitute an- ' ' ' propaganda its retail gas Three urges: (1) prompt ces¬ outlays for foreign lending; and (2) reduction of military expenses to legitimate peacetime figure. 12—Eu¬ ican people. One is Or will the Meyer's address before Life gene ' and "foreign handouts/' he Dec. div¬ ( ; sation of direct and indirect Will the WASHINGTON, sacred to get America's finances in order? bear that date., recapitalization and The new bond issue will later integration plan to the SEC. It Will eventually divest itself of the be reduced to about $83,000,000, major utility investments, prob¬ using left-over cash (estimated at ably by sale to the public. Ar¬ $25,000,000) from the sale of util¬ kansas Natural Gas Corp., as re¬ ity (interests (after* the (rfemainirig maining sub-holding company, $60,000,000 old 5s have been paid Will also perfect a plan to com¬ off. It will be further decreased ply with the Utility Act presum¬ $1,500,000 anually by a sinking ably by arranging to dispose of fund. While any of the old bonds mitted its our ment expenses share. a Meyer to Plead 187.50 _ |947, $3.12 earn¬ as __$184.50 near expenditures is indispensable to fulfill¬ obligations to war victims and bondholders, Noting that half of current $40 billion budget is devoted to armaof ment face being (including arrears): Preferred Stock future, it is expected, thus yplacing the holdings of the three operating stocks (with some other assets) directly in the Treasury of with stocks preferred nfour subsidiaries into Public Serv¬ ice Company of Mexico. Power & were Vh- ' radical reduction in Federal the ings (the usual method of report¬ ing them). In 1945 such earnings of on Member House of Representatives from Nebraska ( Republican member of House Banking Committee maintains that did not contain a pro forma con¬ federal Light & Traction. part , ( Plan •substantial to solidated income statement which would Congress fulfill War By HON. HOWARD BUFFETT It is unfortunate that the Plan (Public Service and Toledo Edison together with it 64% interest in Meanwhile the latter also disposed of a Will the GOP already were receiving World War II monthly pension or com¬ least f equal at power the ( to present level. That will be the hard way.' It justed to a pro forma basis. Actual select the Bank's permanent head. pensation checks. The list is per¬ will be $100,000,000 through application of net income for this unpopular. It will mean period was $9,- He stated that he had some diffi¬ manent and steadily growing. It .accumulated cash to retirement of (Continued on page 3118) " 108,660 (compared with $6,741,879 culty in persuading his wife that $35,000,000 5s of 1950. Since that for the calendar year 1945), or he should resign. On the other /date the top company is under¬ $5,585,340 after annual preferred hand some friends of Mr. Meyer stood to have replenished its dividend accruals. The first ad¬ outside the Bank have been say¬ Treasury position by calling in justment under the Plan ; should ing that Mr. Meyer's family were Joans to subsidiaries; on Oct. 31 increase net income to $9,222,335, worried about his health and pre¬ By LEO WOLMAN* cash assets amounted to over $88,the Company estimates; and the vailed upon him to resign. ; Professor Economics, Columbia University (000,000. compared with current final steps under the Plan after While both considerations doubt¬ [liabilities of $15,000,000. Immedi¬ sale of the utility stocks, should less were present the impression Maintaining reasonable cost of doing business is everybody's con- \ ately upon the plan becoming ef¬ further increase the amount to cern and that it persists in Washington circles that encompasses the present wage problem, Dr. Wolman fective, the remaining $40,578,000 $12,268,050 (all available for the Mr. Meyer found organization and contends there has been too much "messing around" *5s of 1950 will be redeemed re¬ common regarding stock). Thus the final policy problems tougher than he ducing funded debt .to slightly Y transcendent pro forma share earnings for the had importance of higher wage rates. Holds wages have anticipated. under $60,000,000. This remaining common stock would been rising at an unusual rate for a long eventually < debt will be retired later from the be •sale of the major utility holdings. compared While the old debt is to be tired, the company $108,361,950 ,*sue re¬ pany in expects to isnew Sinking Fund Debenture 3s due 1997. increased This that $3.33, with actual parent earnings of only 88c 1945. course, Will not be a refunding operation about to These based on $85,000,000 results a as com¬ share are/ of the; assumption can be obtained from the sale of the utility prop¬ public offering, but the bonds erties. Will be issued in exchange for the This substantial estimated gain Or a V Justin Jacobs Mgr. of Luckhurst Co. Dept. that Justin Jacobs, cer¬ public accountant, is now Manager of their Investment Re¬ search Department. "Crowell-Collier "Tennessee Gas & Transmission t t OMAHA, Kilbourn Rockwell Manufacturing Co. fForemost Dairies ' (Special to "The Financial Liberty Aircraft Products Bausch & Lomb Optical Co. i U. S. Potash *Prospectus on NEB. — Burwell has become - N. associated with i 3 Herrick, Wadc|ell & Co., Inc., whose main office is at 55 Liberty New York City. In the past Mr. Kilbourn was with United Funds Management. Corp. .(Prior thereto he was Omaha manager for achieve by investment busi¬ other, and the Northern Indiana Pub. Serv. Com. Portland Electric Power 6s, 1950 & 29 BROADWAY. NEW YORK 6. N. Y. Direct Wire to Chicege Co. ' wanted to avoid. responsibility by ,thecom¬ mon p run of \ it costs. Sills, Minton & Co. Chronicle) one Cost of Prof. Leo Wolman from time to I read things which every of us reads and talk to people as It Doing / 1 Business •;.,T !• ""Y" very time, Financial 1 Reasonable A hard to understand The all. They say, what we want harmony, what we want is peace, and nobody worries about;"4 John A. Rodgers, Jr. With (Special to pretty: does not f- is deci¬ take. so I us to be concerned about costs seem at t h the But now, nearly every one of p o e a that a series of well-definable, J well-defined, clear evils which we as¬ of sumption And Federal Water & Gas Com. Gilbert J. Postley under¬ standing as to the problem find Consolidated Elec. & Gas Pfd. society in which the thinking ;■ simpler anyhow,,than it is; today, that if things got more and more costly, if doing business was a more and more costly enter¬ prise, that there resulted from sions you 1870 , riot the type of thing was or for own in procuring, ducted his are You have got to work for it and you them Boettcher-Newton & Co. and con¬ in Omaha. relations can 1 e roughout the? country ness ESTABLISHED - Chronicle) / Street; Request get by wishing for them. only ' ' j : we somehow Herrick, Waddell Co. Adds • « Good pea ceful, workable labor nounce Trading Markets in Common Stocks "Hates Manufacturing Co. time, much in excess of t? living, and that this has resulted in increasing -'.V; costs and prices. Cites Railroad Retirement Act as raising rail- r > road payroll 20% and contends continuous and steady wage in-f:/1 creases are adding strains and stresses to the economic system that will eventually "bring us into trouble." - • increased cost of , Luckhurst & Co., Inc., 40 Ex¬ change Place, New York City, an¬ tified , seems ment that to me it is to be my judg¬ awfully hard to get harmony and peace unless you turn your mind back to a very of us CHICAGO, ILL.—. John A simple kind of thing—though not talks about, to see that there is no Rodgers, Jr.,, has become asso¬ easy to achieve—namely, a rea¬ ciated with Sills, Minton & Co., concern about what seems to me sonable cost of doing business. to be the fundamental problem of Incorporated, 209 South La Salle And a reasonable cost of doing Street, members of the Chicago present times, of present labor re¬ business is a goal which is every¬ It used Stock Exchange. Mr. Rodgers was lations, and that is costs. body's concern. previously with A. C. Allyn & Co to be believed, you know, when Well, then, when we talk about we lived in a simpler society and and Bond & Goodwin, Inc. 1 this problem of a reasonable cost of doing business, we are talking "Text of an address delivered in reality about the wage problem Phihp Dorner Dead by Dr. Wolman before the 51st in its larger aspects, and the prob¬ Philip H. Dorner, associated Congress of Industry Conducted lem that affects everybody. And with Wm. R. Staats Co.,. Los An¬ by the National Association of we must remember in this congeles, for 25 years, died of a heart Manufacturers, New York City, continued on page 3103) attack at the age of 50. Dec. 6, 1946. about things that every one ( }• | Volume 164 THE COMMERCIAL & FINANCIAL CHRONICLE Number 4550 Opponents of Incorporation on NYSE Say They Calkins Elected May Organize to Fight Proponents of Issue Director of AFGL "Hard" and "Soil" Currencies V/, By PAUL EINZIG * British calls commentator attention unwarranted to / optimism regarding volume of British exports, due to failure to take account. of currencies in which exports: are paid. Points out exports have been going to Sterling Area or to countries with "soft" or jncon-. vertible currencies, and not into "hard" currency countries, such as ( U. S. Says U. S. loan, despite; large exports, is being rapidly used i. , and British export drive is merely depriving people of Heeded home-produced goods. up, - . »„ • change in recent weeks. a sudden-and thorough For months^ figures underwent ' mmmmmmmrnarnrn. o f f i reduction a ,^^HKjj|aS3« balances. An those of members. ' such exports in frozen claims on those France, merely increase into a are Th VVnll e countries Such ou t increase pointed " •• tlie , in ""exports far beyond antic¬ ipation, and presented this as a great achievement. Paul Einzis W „ Nothing sion > ■ o 77; of the which Britain to extent ceived the re¬ proceeds of exports in Sterling or in inconvertible weak currencies; of of the extent to result of which it would possible to use the proceeds of which these proceeds disappeared the American loan very sparingly* in the bottomless pit of war balr iv; More recently this, * optimism ance repayments; or even of the gave way to a more cautious tone extent to which exports were in official circles. And the latest given away for nothing to expronouncements on the subject by enemies or others. ance, as a A"": said about the inclu¬ was supplies sent to British troops abroad, or to UNRRA into the impressive grant totals of ex¬ ports. : There was no indication of They foreshadowed a drastic re¬ duction of the adverse trade bal¬ tv government bury its head in the sand face of these obvious facts. chose to and volume of i'v Until recently the / value the of / Germany pro¬ as duces absolutely nothing—it is a deal loss. • y be Mr. Cripps Stafford Sir and Dalton' decidedly pessimistic. if export figures had of giving rise foolishness The unwarranted to York City, been to realize that it is not the but their according analysis the proponents of countries of destination. : : hard currencies, It ' . government realized that if Britain succeeded in elim¬ the proposition certed drive staff of the New York "Times" for seven not would her save been have should about the because of the storm of controversy w hi c h the issue aroused, suddenly showed signs of ponents and it still hasn't made up its mind as to just what it ought to do. It feels that the case for permissive incorporation ernors, indecision on the matter. For permissive incorporation to be adopted, the Board of Gover¬ proponents has been working up is already boomeranging against nors would first have to approve advocates. The of an amendment to the constitu¬ its opposition tion in ; fact, whether it permitting incorporation, wonders, wouldn't be dignifying the pro¬ then the question would have to gram of the proponents too much go before the entire membership of the Exchange for a final vote to reply to the allegations being ' '-s/j and, as the opponents are aware made by them. It is the opposition's view that of the terrific pressure which the proponents, through their commit¬ the proponents in the five educa¬ tee, 1 are currently bringing upon tional pamphlets, which they have the board and upon the general distributed so far to the 4,300 al¬ membership, but especially upon lied members of the Exchange, the board, they are wondering including the partners, have whethep or not they, too, should organize to give more effective We easy to optimism running short of dollars and other currencies in a very short time. For an export surplus to he manufactures British bard without was "talked down" for had that argued Lieu¬ as a Navy. announce fellow SCHENLEY DISTILLERS CORP, v <*h .7 , /'• ;7 ;v\7MERIT ■ '' We understandably proud address by Charles were to listen to an F.Brannan, Assistant^Secretary of Agriculture, before the Distillers, Rectifiers and Importers luncheon ac the Waldorf-Astoria, in New York, on November 11th, just prior to the opening of the 31st National Hotel Exhibition at the Grand Central Palace". Mr, Brannan ' said in part: , UI wonder how many Americans realize the important pole that high- protein feeds (by-products of distilling) Have played in the tremen¬ dous increase in meat production during World War II; beef, veal, V lambf mutton and pork production I want to say very plainly that the distillers* aid in helping provide high-protein feed concentrates is not something that the Department of Agriculture regards lightly, The truth is that the Department is quite proud of the fact that it not only urged, but aided, the distilling in¬ dustry to go into this program. Even though the fighting phase of the war ended more than a year ago, the de¬ v , , - v association with of us and . to years. our Americans.This is number 149 of a series. ♦ pleased to MR. ERIC G. MELLGREN MR. D. KINGSLEY WALDRON since Hope will be of interest to we to the individual been instrumental ■" It was the deficit is much smaller than it was expected produce any dollars. An export to be, why not draw more ex¬ surplus to countries holding Sterl¬ tensively on the dollar loan in(Continued on page 3111);; • ing balances merely results in a do Sterling Area countries does not are the strengthen agitation in favor of allowing the long-suffer^ ing British consumer to buy more from served war NOTE—From time to time, in this space, there will appear an advertisement which which the Ames' committee of the , balance trade prior to the war and years during the its part to counter¬ on act the various moves of the pro¬ bound to inating her trade deficit, this in itself , foresee that the official The even ■, the of was a re¬ SCHENLEY DISTILLERS CORPORATION this fall when the Board of Gov¬ drawn upon to meet the deficit in to director a Mr. Calkins porter and special writer on the The opposition has been ques¬ tioning : the: necessity for a con¬ dollar loan has to be which the global figures that really matter advertising agency, has elected company. to^ ' came Frank-Guenther tenant Commander in the broker and so optimism was It is not as forcefully brought home to the expression to what they believe to more in stirring up resentment ;.:/'77 deteriorated in the .meantime. The government partly by the cam¬ be the majority view on the issue. (Continued on page 3111) global figures justified optimism paign in favor of slackening the in November to the same extent export drive which, deprives the V7t;. as they did in June. But in the home consumer of much-needed y}#l meantime British official circles goods, and partly by the pace at were Calkins, Vice-Pres¬ Law, Inc., 131 Cedar Street, New " mism. W. Albert of Exchange who are opposed to weighing the desirability of banding committee countries: resist: the efforts of the 26-man export surplus to occupied committee which was formed by And an ident Members of the New - York Stock .the figures .of Vt'e;T ih s''o f glowing opti- known \ themselves as Howard . seriously considering desirability of forming a committee to make, views of what they believe -io be majority opinion more vocal. Proponents' committee is very confident Board of Governors and members of Exchange will vote overwhelmingly in favor of permissive incorporation. In face of mounting controversy over subject, Board again postpones its decision On question for another month. Opponents declare arguments of proponents presented in pamphlets which they are distributing are an insult to intelligence permissive; incorporation, on * tactics of proponents, the opponents are now weak commented , of export surplus to countries with inconvertible currencies, spokesmen over to be foreign trade British'Government towards attitude of the The By EDMOUR GERMAIN Concerned ; formerly of W. J. Banigan & Co. mand for meat p . and , - is still extremely great ample feed supplies also correspondingly and the need for is therefore large** 7;■ MR. NOEL EDDY We were ■'=7.. ' impressed when Brannan stated . , . Mr. "It is highly " We take Certified ° .* - ' v ; r7\ [•"' is Public now Accountant, ,'y "V"vf •' y ;• v. ';.y>'>7- 1 '•'• •' 44 Wall Street, New York '•• 77" *'' - f'''1 7; ?!'' 7: f CO. S, N. Y. : -*.» Y. .Security 40 Exchange Place 'yy'sv - w time contribution, V the great majority of the people, I am sure, still think of distilleries almost exclusively in terms of beverage alcohol—in terms Assn. HAriover 2-0270; more complete widespread. Despite the fine efforts of the distilleries to acquaint the nation with the facts of their war¬ • New York 5, N. Y. ' . .''v. ' . or more •" 7-7 77:77."■> 77777 v:...7,'i. 7. y ■' \7' •|/.". Dealers' particularly so of the distilling industry, There are few industries ■. perhaps none. . . about which misunderstanding is LUCKHURST & COMPANY, Inc. Members ' N. to be . Department '-** dustry to our national well being widely known. This seems should be ♦ our ' 77 -7' ;/ 'V<7 7';7v '• ■ & Members New York Stock Exchange . -t"^ of manager Investment Research 5 •" • facts of the contribution of every in¬ GRIMM MR. JUSTIN JACOBS '7:y7V important, therefore, that the true pleasure'in announcing that ;'y-::7 of liquori y ):■■■'O^ Mr. Brannan also made the significant statement that, "The contemplated increase in grain avail¬ able to distilleries would result in a Rhodesian Selection Trust • '• '• ! '■ . v- . >• "i 1 • ■ • / W .'.V •: " • ..v V very substantial increase in the quantity of distillers* dried grain available for feeding to live stock. The forecast for the year which began October 1st is for 500,000 tons as • .aa TRADING Gaumont-British compared with 330,000 tons last and a 1938-1942 average of only 244,000 tons** Scophony, Ltd. year Definition FIRST COLONY CORPORATION British Securities Dept. . - • *'• > ' " ■ • * - • - j ' . '. •• Goodbody & Co. Members N, Y. Stock Exchange and Other Principal Exchanges 115 BROADWAY Telephone BArclay 7-0100 NEW YORK 6, N. Y. teletype NY 1-672 & of "candor", Funk Wagnalls: "Openness; frankness; impartiality; fairness." Thank you, Mr. Brannan * Underwriters and Distributors of Corporate Securities FREE —96-PAGE S2 Wall Street ■ New York 5 postcard BOOK — Send Hanover 2-8080* * ! .Teletype NY 1-2425 a letter to mark merit of or Dept. 18A, 350 Fifin Ave., N. Y. 1, and you will receive a 96-page book containint leprints of earlier articles on various schenley distillers subjects, . . : i.' sir; «''■ corp., . -s ■ THE COMMERCIAL & FINANCIAL CHRONICLE 3018 CARTER H. CORBREY&C0. developments in view of the freight rate increase, and, an,apt praisal of values of New-England Dealer-Broker Investment^ Member, National Association Thursday, December 12, 194(5 Public Service Co. ice MhhUe West — mentioned will he pleased parties the following literature', • ?'■ to send interested ■ UNDERWRITERS ■■ Amott-Baker Realty MARKET Averages DISTRIBUTION LOS ANGELES 14 CHICAGO 3 650 135 La Salle St S-Spring St State 6502 Michigan 4181 CG 99 LA 255 — monthly bulletin •— 150 Amott, Baker & Co., Inc., Broadway, New York 7, N, Y. ,-L ■ Also available is de¬ Bulletin—Latest Corp.; Analysis of Chemical Cnni;V Sun and pany. charts of fhe 65 industrial, railroad and utility stocks in the Dow-Jones Averages, memorandum—Dempsey & Com¬ ; Corporation ■ .■ Showers" .,;7: Brothers Co. 135 South La Salle Street, Chicago 3, 111. " -v pany, : Copy on request Co., inc., 41 Broad Street, New 4, N, Y. ,.;K & to date—F. W. Stephens Company, 15 William Street; New York 5, York N. Y. Engineering. "" • • :: •. '■■■v •• A. DePinna Public National Bank & Trust Co.—Analysis—C. E, Unterberg & Co., 61 Broadway, New York 6. N, Y. , Public Co.—memorandum Service Company of In¬ diana, Inc. — analysis—First Bos¬ Corporation, 100 Broadway* ton New York 5, N, Y. Argo Oil Corporation—Descrip- 1946. ' . i ... tive circular-—Seligman, Lubetkin ments to keep the booklet up Common Pizzini & Co., Inc., 25 Street, New York .4, N, Y. ■ Herrick, Waddell & Co,, Inc., 55 Liberty Street, New York 5; N. .Y, from Jan. 1 to Nov. 30, Additional weekly supple^ . W. Broad and volume of each stock for the period Co., 225 Street,- Milwaukee 2, Osgood Company —- circular—* Delaware Lackawanna '& West¬ — Lackawanna RR N j Divi-* Seligman, Lubetkin & Co., Inc., 41 sion First Mortgage "A"., 4s— Broad Street, New York 4, N, YJ memorandum indicating attrac¬ —B. showing daily high, low, closing ■ Wis. —» & •; Brief — Company ern tive yield--rin the Current issue of "Railroad and Other Quotations" analysis Chemical an Shoe memorandum—Loewi East Mason . Inc.; Heyden Admiral an —- velopments—John H. Lewis & Co., 14 Wall Street, New York 5, N. Y. Charts—Weekly We have ; I Memo¬ •. ■ / ■ randum—Penington, Colket & Co., 70 Pine Street, New York 5, N, Y. Burdine's Aviation v Laboratories Abbott Bond Price Collins Radio Company—circu¬ 1 lar—Adams & Co., 231 South La Salle Street, Chicago 4, 111. It is understood that the firms Pacific Coast ' SECONDARY Nunn-Bush Recommendations and Literature For - . of Securities Dealers Wholesale Distributors Co.—study—Doyle, O'Connor & Co., 135, South La Salle Street, Chicago 3, III. Also available circulars dn are Tennessee Products and Wellman , ■ :^ . : L Ralston Steel Car Co. Gruen Watch Company—memo¬ randum Walnut Also v — .. available Rockwell memoranda are Bird & San, Inc. arid Northern on Circu« — Lerner & Co., 10 Post Office Buckley Brothers, 1420 lar Street, Philadelphia 2, Square, Boston 9, Mass, — 25 Indiana Public Service Co. Manufacturing Co.— Analysis—Steiner, Rouse Broad Street, New & Co., York 4» N,Y 120 South La -Brochure—Geyer & Co., Inc., 67 Wall Street, New York 5, N. Y. Salle Street Asplnook Corporation—Circular & Co., 120 Broadway. Cycle Insurance Earnings Eire CASWELL & CO. —Ward New York 5, N. Y. Vyy ford lenge to the barrage of pessimisr statements—bulletin tic with TRADING MARKETS Nutrine ■ Bros., 32 Broadway, New York 4, \- Also Company available is of articles they have running in the ChronicleHarrison Wholesale Company- write to Mark Merit, in care o! Distillers Memorandum—Brailsford & Co., Schenley Corporation, 208 South La Salle Street, Chicago 350 Fifth Avenue, New York 1, Corp.; Alabama Mills; Diebold, Inc. C ? t Mitchell & Company, 120-Broadway, New York 5, N. Y. Also available is a memorandum on Standard Screw. > — - . Boston, & Maine Railroad W. Y. 4, 111. v' memoran¬ a Circular — Mass, , Vilas Chicago 4, 111, / Also available dum • " Long Bell are analyses of Lumber Investment Opportunities in the Gas Tele, CG 146 Industry Fairman Salle & Study Co., 208 — Fred W. South La — Street, Chicago 4, 111. ' bulletin—Laird, Bissell & Meeds, 120 Broadway, New — York ,5;n.'y. ^ r Central Hanover- Bank & Trust Company - Utility 5^8 of '52 and Consolidated Electric and Gas Pfd. — Comprehensive NEW YORK MARKETS Public 208 MIDWEST New Board of Trade Bldg., Ass'n Ass'n Chicago 4 an Co, ucts La 4, 111, Salle Street, * * ■" ' . ' . ->r- ;• Maryland Casualty CompanyAnalysis of situation—Edward D. Jones & Co„ 300 North Fourth Street, St. Louis 2, Mo. • ' ; on Preferreds — Arthur Wiesenberger & Co., 61 Broadway, New York 6, N. Y. ; : : ; f . Northern Indiana Public Serv¬ ice and Merchants Distilling Co. Simplicity* Pattern Co. Also available to dealers and in^ stitutions special are District Theatres Electric Corp.; Henke Shops; letters Dumont Princess Vogue Corp.; & %Pillot, ^ Inc.i Electronic Corp. of America; The F. R. Corporation; Hungerfordl Plastics; Loew Drug Company;] Stratford Pen Corp.; Metal Form¬ ing Corp.; Le Roi Co.; Corrugating Co. York ■ Shore & Mil¬ waukee Mohawk West Indies. Sugar memorandum Co., 1 Wall Street. New York 5, & N. Y. — Bennett, Spanier Co., 105 South La Salle Street, Chicago 3, ill. , -/..v.- Company i f --r Analysis of situation in recapitali¬ zation — Ira Haupjt & Co.;' Ill Broadway, New York 6, N. Y. Also available is a study of rail Spencer Shoe Corporation —\ Analysis—Buckley Brothers, 142ft Walnut Street, Philadelphia 2, Pa. , . Service Corporation Liqueur Corp.—Brief —Detailed study—G. H. Walker,& ^ Northern Indiana Public Serv¬ Company—Detailed study of situation—Bear, Stearns & Co.,.l Wall Street, New York 5, N. Y. ice Northern Indiana Public Serv- Victor Dykes Now With J Russell, Berg & Co. kjt * (Special to Thb Financial Chroniclb). V' BOSTON, MASS.—Victor Dykes . •Je»spp Steel Pfd. •Seismograph Service Corp.,Com. has Primary MarArefap^ Chgo. No. Sh. & Milw. Maryland Casualty Company $2.10 Cumulative Prior Preferred* ^ •Prospectus Available on Request. - v ymi H.Davls & Co. sell, on (Special to The Financial ChronicleX Request - FRESNO, CALIF.—William; M. Donleavey, Harvey H. Shields, Jr; Members Principal Stock Exchanges Chicago Board of Trade Chicago 3 Teletype CG 405 Indianapolis. Ind. Rockford, 111. Cleveland, Ohio ;||| SILLS, MINTON & COMPANY - Brailsford & Co. INCORPORATED 'Members Chicago Stock Exchange ' 208 • r 209 SO. LA SALLE ST., CHICAGO 4, ILL. Telephone Dearborn 1421 , S.' • La': Salle Street CHICAGO; Teletype CG 864 Direct Private Wire to J. G. WHITE & CO., New York . ^ TeL State • Ora the staff A. Turner have Of <Bailey previously v/as 4-;-v'r/f with First the California Company. Mr. Shields was with First California Co. ,v / , CG 93 9868 and joined & Selland* 1157 Fulton Street. Mr, Donleavey ' Tel. Franklin 8622 Co., 75 Federal past he was with In the Bailey & Selland Add Three ^ *Prospectus & Berg Street.' Common Stock V* Common Stock Established 1916 become associated with Rus¬ The Fidelity Co. and was an offi- >, cer of Cromwell & Cabot, Inc., - Ry. Co. —/2 $1,05 Convertible Preferred* 10 So. La Salle St., Late — data—Aetna Securities Corpora¬ tion, 37 Wall Street, New York 5, Well*-Gardoer & Co., Com. Snap-On Tools Corp., Com. ' . North , Time for Caution Salle Street, Chicago 3, 111. ' Chicago Cities York Office Chi¬ Co.—Analy¬ — 'oy on Railway Co.—Brief hqem* orandum on, outlook—Brailsford Railroad Stocks—Current com¬ & Co.,. 208 South La Salle Street, ment—Delafield & Delafield, 14 Chicago 4, 111. J \. Wall Street, New York 5, N. Y. i / -y'-i-1 1 /' —Special memorandum • cago South , Teletype CG 129 Wire to New and ■. Telephone: Harrison 2075 Direct Banks out of Line Bank Stock—Analysis —Kalb, Voorhis & Co., 15 Broad¬ way, New York 5, N. Y. STRAUSS BROS. Members New York Security Dealers Members Illinois Securitleo Dealers York -City Railway. Showers Brothers , for the Southern on sis—Caswell & Co., 120 South La Metal & Thermit CorporationManufacturing Drug IndustryMemorandum—Buckley Brothers, Review of conditions—Hirsch & 1420 Walnut Street, Philadelphia Co., 25 Broad Street, New York 4, .2, study and analysis in brochure N. Yt/l 'pyv Also available are memoranda form—Fred W. Fairman & Co., Central Hickey, 49 Wall Street, New York, 5, N. Y. Also available is a memoran¬ , ::v- Analysis^ — & and Co., Miller Manufacturing Co. :':r-'■ Exchange Street' Chicago 4 Seaboard Airline Press Manufacturing Co.—Detailed Analysis—Comstock & Co., 231 South "La Salle Street, International Cellucotton Prod¬ — Walter J. Connolly & " '■*s-.1 \ i: Hydraulic Analysis—New York dum on the significance of the Kanseatic Corporation — 129 Co., 24 Federal Street, Boston 10, recent Freight Rate Increases. Broadway, New York 5, N. Y,; WilliamA.Fuller&Co. Tel. Dearborn 5600 Haloid; Automatic Fire Alarm—memo¬ Equities — Study of relative positions of equities actively traded—H. Hentz & Co., 60 Beaver Street, - New York 4, N. Y. Holding Common Members of Chicago Stock Iron & Steel; Barcalo; randum "■j vy Lear Inc. 209 So La Salle on Schenley Distillers Corporation —Brochure oeen Purolator Products; Upson Candy Co. Prospectus on request v capital appreciation—Strauss ■ 'Common * Empire; Lanova Corp.; Mo-, hawk Rubber; and-Taylor Whart¬ a list of suggested stocks for income and memoranda are W. L. Douglas Shoe Co.; Hart¬ on Guide to the Perplexed—a chal¬ Phone Central 5690 Tele. CG 1122 available Also CHICAGO 3, ILL. : Gulf, Mobile & Ohio Railroads- Analysis—R. H. Johnson & Co., 64 Wall Street, New York 5, N. Y. I SINCE 19081 J Fred.W. Fairman Co. L . - ' INTERSTATE BAKERIES CORP. Common & Preferred mm !' . . DEEP ROCK OIL CORP. Common Central Public 5^'s of '52 We Maintain Active Markets in " | ' Recent Analyses on Request FINANCIAL Merchants Distilling Corp. Common ■ ' NORTHERN STATES POWER CO. 6% & 7% Preferred ■', ! Standard Silica Corp. H. M. Byllesby and Company J m SOUTH LA SALLE ST. Incorporated'" CHICAGO 4, ILLINOIS Telephone. Randolph 4068 Direct Private Wire to New York 135 So. La Salle Street, Telephone State 8711 ' ' . Bell System CG 837 New York: . - Philadelphia '' '' ! Chicago 3 Teletype • V, Pittsburgh ■, CG 273 FAROLL & COMPANY Member , y • York Stock Exchange and other Principal Exchanges 208 So. ; La Salle St * Minneapolis Phone Andover 1430 Tele. •; ' ■ Its ; .■ : "• ISO • >• v •' Branches Prepared—Conference Invited Albert Frank - Guenther Law Incorporated ■ ... 13'1 Cedar Street New York 6, N.Y* Boston CG ... A11 Telephone COrtlandt 7'5C60 / CHICAGO 4 • • New .../ Plans " analyzing these Bonds, v In Common Stock Write for bur Brochure ADVERTISING Stoqk: . f - t Chicago Philadelphia San Francisco qilfllllllllllllllllllllHIUItiltlllllllllllllllilllltlllllfillilllltlllltlltlllllllllllllllillllllllllUlliollMHO .Volume 164 vNumber 4550 THE COMMERCIAL il ■'iV u » £ the ;v ^•'^O'What interest Chicago business from ''over and industry people had; left strike last week was given wholeheartedly; to most successful International Livestockx Exposi¬ , the such events coal the as ,;\-X of the coal miners', walk¬ closed the hours. It Board of Trade obtained was They Re¬ were for 3019 Chicago and other rfitiesu dicate, in¬ main for cents both of whom i have their original offers the South Chicago r-::'.v -,:v: ♦ * plant. asked the Illinois commu- increases proposed business service and Active Trading Markets in 50 for residences. Although operating costs have risen $66,000,000 or 80% since 1940, thfc .v . The in Chicago range up to $1.50 for i '-fv.";,,. * - ;! t Illinois V Bell " Telephone 40-year shipping "monopoly," and the beginning of two huge sales by the War Assets Administra-*—— —■ 1 frt * V|. v—-—'—— End government. public, present lessor, and Philip D, Fitzgerald and his Chicago syn¬ creased tion in 47 years, record pre-Christmas sales despite the dimout, an appeal to Chicagoans by an Alaskan publisher to help break Seattle's tion. FINANCIAL CHRONICLE & *■ said, company Co. Commission for increased rates .59%. or than Company have revenues Increased less Commerce Collins Radio $58,000,000 / w.c-J two A by Robert out5 came just in time to stave off Buckley, partner in BuckleyV& ornin fnmmi«Qinn firm • a'crippling congestion of freight Cn Co., grain commission firm. treminals here, '"'l *' ''' and to prevent : * * * / ; ,*/■' ': •• ■ Problems Facing . Industry field 5 equipment. industrial Manufacturers last of ,r materials raw Inland Steel Co. announced it reaching the were their shutdowns. had re¬ sold $50,000,000 of President, General Motors Corporation G bonds, dated 2.68% Nov. v:\Leading industrial executive lists problems 1, as: in concern commercial the radio .■ Sound financial competitive position after reconversion. / (1) business interserves. ' Compared to other sec¬ i ruptions from 1946, and maturing Nov. 1, 1976. strikes; (2) materials shortages; (3) increased tions, however, the Chicago area The total was placed by Kuhn, cdme through the strike in good ^/working capital needs; (4) obtaining increased fixed capital reLoeb & Co. with eight insurance I shape. ] quirements; (5) keping costs and prices in balance; and (6) high firms at 100% plus accrued in¬ f More than 430,000 persons saw f taxes required by huge Federal budget. Attacks monopoly of terest. the 47th livestock exposition here, # )(l trades unions and wants collective bargaining on an industrial basis ,'.vrV -.y/i. 4/ '-4'"J*'V and both entries and prices paid Swift International prohibited. • Denies aim to destroy'labor unions and lays down Co., Ltd., tor the "Champion 'animals" ap¬ disclosed that Argentina had ap¬ principles of new labor legislation.1 Ascribes present strike situaproached or set records. The Series of and By C. E. WILSON* : leading i ■ serious Common Stock Circular on ■ . ., Request , ADAMS 6- CO. 231 SOUTH LA SALLE STREET , i; • v CHICAGO 4, ILLINOIS :• TELETYPE CG 361 PHONE STATE 0101 " proved increase in its capital steer, a1,380stock from 1,500,000 to 3,000,000 Royal Jupiter, shares. The Argentine r govern¬ was purchased by the Firestone Tire" & Rubber Co. for $14,490^ ment specified that none of the highest price ever paid at the proceeds*be used to acquire any other packing* interests there. show. grand champion jpouqder • . The Maritime v strikes devastating efforts, ^ have effect had • cial one the C00, a the a other comercial sale a : h - t h e no War:. . h r e been trends. c o m W. J. of a National Association should nessmen stop terms of a, Repressions *, /4 ; by * R. the 4 War. ment / and stricted . E. as bility Wilson rival ciation. Vice-President Trade of of Kansas the City, • -,v: • " • . i;- y. ' pacity production ..:: ',v. ' - v'; :>?*••• Coon, Chairman of Corp., said fi¬ companies -must take ag¬ Finance , ing competition of* banks. versified its field of direct invest¬ by acquiring in a substantial a Pacific new steam¬ dressed the American Conference's from the war, and the lack of grow¬ He ad¬ Finance convention. Dr. since/the H. Zinn, head of the Argonne Na¬ the these two. In had: we v . coal CHICAGO 4 231. So. La Salle St. an trial civil V interference olies not dictators or like of We monop¬ tractive issues kind. They do not like them in govern¬ ment and politics, in finance and (Continued on page : any taining own, of $2,700,000, with $1,5)50,000 invested by the Chicago Two Corp., which owns the complete preferred issue of $1,- "700,000, and 25% each of the $250,000 common stock issue and $750,000 junior; preferred Isrv '•'-£* r V" * * , dismissing .v'/ In a * > <4. > ■ ,> FLOYD the grievance of one man." temporary restraining order viously had been of A because obtained ■ that our with D, CERF CO. *Ft. .4. \ 4^' > '/' *r 4'Ji - ' * I' " 'r». " i.' ?*Prospectus Available "i f ♦Jessop ' • Wayne Corrugated Paper Com. Steel / Common & Preferred' "r. - ♦Felt & Tarrant Mfg. ' v> ■■ ,-:::vv ••• ■:.■-} ri?<\ ♦Tucson Gas Electric Light and Power Minn, & Ontario Paper, Com.1 Oroville :u / Southwestern^Piiblic Service Company f Texas Public Service Company Ganmont British Pictures pre¬ i' Northern Indiana Public Service Company . • of ;way exclusively. Chicago / Public Service Company of Indiana, Inc. Fresnillo Co. no them 120 South La Salle Street /; ;*Sioux City Gas and Electric -Company . in Bought—Sold—Quoted ! ■ / Cinema Television . the world, . department servev • - Missouri "Utilities Company an Shaw said "This court is not going to hold up the Board of Trade, the biggest grain • > Superior District Power Company Michigan Public Service Company ' Brown Co, Com. & Pfd. but Central Illinois Electric and Gas Company Gulf Public Service Company ^Iowa Publie Service Company. Abitibi P. & P. Co. Com. & Pfd. under¬ for their clients. Main¬ compete ,*Black Hills Power and Light Company Central Arizona Light and Power Company ; TrodingMarkett against the Board of Trade to prevent it from putting certain new regulation into effect, market in 'f ' \ petition for Judge r. •: in Correspondence invited. Lake injunction Federal main competitors were striving to acquire the $91,000,000 Republic Steel Corp. plant from senior ;>sue. > exclusively retail no we dealers, 4 V- 3107) specialize writing and distribution of securities, providing investment dealers with at¬ COMMON STOCKS r .< Serving Investmenl Dealers war Americans do I ^ fArt ac^ress4by4Mr/ "VV^ilson- be¬ Teletype CG 955.-;, -c;;: - that almost proved disastrous for the wnole nation. >" uncertainty and Dearborn 1501 ' just ended, example of organized anced re¬ request. strike with production—a form of indus¬ ization • the on COMSTOOK & CO. * " ; Trailmobile Company 'Detailed analysis available problem, are basic, and others' largely result; from j PUBLIC . _ St. Louis Public Service Co. the fiscal ca¬ Laboratory, said atomic en¬ fore; the 53rd Annual Meeting of ship line, the Pacific Far- East ergy power plants would-not be Bines, now operating between San developed for "industrial use be¬ IllinpisMahufacturersAssocIation, Erancisco, the Philippines, Mari¬ fore -five* or 10 years. W.: D. Chicago,- III,, Dec. 10, 1946* t anas, Korea and Japan, The com¬ Lynclv Vice-President of, the pany, incorporated last July, now tional Folding Box Co. and retir¬ has 18 dry cargo and refrigerator ing Packaging Institute President, UTILITY chips in: service; 'k ; discussed a rise of more than 20% in- packaging costs. Pacific Far East has a capital¬ <w „ exceedingly high: na¬ resulting from the the failure to balance unemployment./ and the Manufacturing Co. Seven-Up Texas Corp. . problems facing industry, the first, the labor problem, and the last, W. tional . quirements resulting from unbal¬ sulted irom Mastic Asphalt Co. ♦Miller which these conditions impose. I have listed these six war, inventories which have Old Ben Coal Corporation ♦Long-Bell Lumber Ccnpany # While principally due to strikes • and union activity. < ; J 3. Incfeased working capital Re¬ f Howard Industries, Inc. ♦Hydraulic Press Mfg. Co. budget in the decade before the war, together with the con¬ tinuing huge Federal budget and the excessively high Federal taxes bosses and la¬ | 2. Material shortages resulting Asso¬ Mo., was chosen after the mem¬ nance bership meeting last week..... gressive steps to meet the -The Chicago Corp. further di¬ ' conference Owen" L. General - Chgo. Auro. & Elgin Ry. Units the bor the , / ;•• : 4 4 '/ Baltimore Transit Co. Pfd. debt and war, union pressed by most union spokesmen, before trust ~L'; The tional re¬ gov¬ on of the American Bankers .. of securities - 6. ; pro¬ dictators, and the unsound economic policies of unions as ex¬ interest rates on mid-continent Commodity Exchanges and Allied Trades, Inc., was an¬ nounced in Chicago, •; Mr. Scott, Executive j ' difficulty of keeping prices in balance, and and threatened further inflation. sulting from the policies of C. ' 1 price level. The costs re¬ duction in the of Federal Reserve Bank of Chicago, predicted sta¬ election ' Months head expenses due to such higher costs. these unemploy¬ dent # Scott's " I : 4. Increased fixed capital re¬ quired due to the higher cost of tools, plants and facilities, and an important increase in fixed over¬ ac¬ .1. Organized John K. Langum, Vice-Presi- ' 1 1 f Aeronca Aircraft Corp. creased 1 icated p Among of talking li' irregularity of supply, and the in¬ They lems are: the '-v'-. d3>- World centuated and finan¬ on ' big one: Some of these problems would have existed if a Bedding Manufacturers that busi¬ of interest > major prob¬ tion ments permitted by: Administration. * credit losses ernment >' - ahead," is Jr., President of the National Associa¬ Board ;. . * President of BorgWarner International Corp.,/said told $25,000,- . # • * - ' ' ' ' . -Walter v * . 1 to ^$20,000,000 of surplus commod¬ ities over-the-counter to vet¬ erans* * '.'•t'f. on export shipments Europe arb less than 0,5 % -of sales., Joseph • P. Kennedy, how salev of4 2,800 % owher of the MerchandiseMart, government apd and DeLind, Alaskan on :;; /; ... , last month commented Dodge plant machine tools that • * My subject today, "The Problems Industry Faces in the v Several important speakers here morale and economy. The WAA started two large-scale retail -cost j tion to labor lawlessness 4 have been was Better," before the Export Man¬ agers Club. ~He said West Coast ; :: .. appeal to Chicagobus! made by .Peter Wood, publisher of the Alaska "New" hess an named Common „ ■ -v': ■ 'Prospectus ou Request « . Company I '' '• ;;:E. H. Rollins & Sons C / ! Incorporated 1' • aUam3CNA>®COMEANY 5 Dredging :;y Rhodesian Angle American 3 Chicago / New York Incorporated ;r>/ . " Boston / . ^ Milwaukee South La Salle | ■ Omaha Street CHICAGO 3 y CO 530 .•—/• Minneapolis 135 Central 7540 Direct wires to our offices in principal financial centers Rhodesia Broken Hills Rhodesian Selection Trust FOUNDED 1913 San Francisco Mines THOMSON & V (Mexico)' . ^ Steep Rock Iron Mines !: COMMODITIES "O Vicana Sugar Co., Ccur .on upon Com, Republic Nat'l Gas #.;■ COMMON p Copies available r Enamel Electronic Lab. Com. request : Hearst Class A 231 So. La Salle St.' •j: . Chicago 4 ZIPPIN & COMPANY Branches In 35 Cities V t • Nu ) .Vicana Sugar Co. 6/55 MSKINNON ) Greiss Fleger Com. on Northern Indiana Public Service Co. ■ ■ ; SECURITIES We have prepared a bulletin . Scophony, Ltd. • ;■ w ■ •' Members New York Stock . •>' Exchange and other principal exchanges Specialists 208 in S. La Foreign r * .: / CG 451 •' .. : 135 SOUTH LA SALLE STREET Street " INCORPORATED . — Salle Chicago 4, Illinois Randolph 4690 DOYLE, O'CONNOR & CO. Securities V" - : r-: Members New York Stock Exchange Members Chicago Stock Exchange Assooiate Member New York Curb CHICAGO 3, ILLINOIS Telephone: Dearborn 6161 STRAUS & BLOSSER Teletypei CG 1200 135 South La Salle St., Chicago 3, 111. fTel. ANDover 5700 Tele. CG 650-651 Thursday, December 12, 1946 FINANCIAL CHRONICLE THE COMMERCIAL & 3020 landlord knows how easy it is for both hotels and experience has shown, just when permit tempo¬ it pee,ds $ prop and a very jus¬ ?*' • V transfer of quarters in the tifiable one. ' ally desirable in a office buildings to rary event bullish Whll Street is not wholly Though conservative opinion on analysts who believe that prospect for profit-making in real estate issues, as in some other selective fields that might be mentioned, though probably not as good as they would like to see it, yet is encouraging and full of promise nevertheless. .; y,• ^/vV^ ? •' ;':y S:y:V/y the There are in®" two developments which are giving strong support to the mar¬ ket, it is held. The first and, ac¬ cording to some, the most impor¬ tant of these developments, re¬ flecting as it does the inevitable aftermath of the war, is the the real estate field > . by termination large-scale on valuable (' Because office the commercial - investor the York State at least, rents in the commercial raise national election in 1948 it is be¬ Business houses will usu¬ houses. prefer ally apartment than in the buildings on OPA it is believed to be easier is that to political aspirations of Governor Dewey, that legal restrictions af¬ fecting rentals on dwellings and apartments will, be completely lifted. Consequently, until the the of face the in presented7 by the situation lieved by some, not too much re¬ lief in the direction of lifting higher the to +pay rentals that can now be arranged ceilings on apartment rentals can be expected. the by mutual agreement between v parties concerned than be, ex¬ posed to the possible necessity of finding other quarters elsewhere. tion would like and also because the apartment houses, how¬ of high construction costs and the In difficulty of obtaining materials— ever, tenants have a way of mak¬ though materials are now begin¬ ing it exceedingly unpleasant if ning to trickle into the market— not difficult for the landlord who space, * ters, the likelihood is slim in New because of the at¬ more tractive than apartment houses to industry building buildings upon Besides, it is felt in some quar¬ which tends to make fact i One rather a small scale and thus at least seemingly impotent to deal with the enorm¬ ity of the problem posed by the present housing shortage with the gusto some people in the popula¬ is/ organized agencies of government various leases repairs7 and, necessary especially in the case of the com¬ mercial ^structures, , to allow ;;for the normal expansion in the amount of space which present tenants may desire who are en¬ gaged in successful enterprises. /, all classes of securities, there are some on of tenant to spill his venom him fob the slightest cause. According to observers, some instances as the 10% rise expected in OPA much as seven floors, in the larg¬ ceilings on hotel rooms will at est and best commercial build¬ least cover the added costs to the ings in New York and elsewhere, hotel industry occasioned by the but especially in New York. The 20% increase in wages granted to second development, though not the hotel help a few months the as definite as the first still very new apartment houses won't be raises his rents. The average clear-cut and real to many, is going up immediately, at least not the confidently expected lifting of to any appreciable extent, it is OPA ceilings on hotel rooms by thought. Present apartment houses the first of the year and on rents will therefore not be faced with the competition which the new •on dwellings of all sorts, includ¬ ing apartments, by next summer buildings might conceivably give them for some time and the effect to a point about 10% above pres¬ of a 10% rise in OPA ceilings on ent levels. ' / apartment rentals, it is .pointed The termination of the leases out, can have the effect only of by the government agencies, of immediately increasing the -fi¬ course, is and will continue to nancial returns 'on the present make much needed office space structures. Of course, it is recog¬ NSTA NATIONAL COMMITTEE TO MEET in the preferred commercial loca¬ nized that there is a very definite There will be a meeting of the National Committee of the Na¬ tions available to the nation's limit to the extent to which ten¬ tional Security Traders Association at the Palmer House, Chicago, leading financial and mercantile ants can occupy high-rental quar¬ Wednesday Jan. 29, starting with luncheon at 12:30 p.rh. establishments which, now in the ters. The market for $200-a-month throes of completing the job of V A group will leave Chicago Wednesday evening Jan. 29 for converting their processes from a apartments, for instance, is known Kansas City to attend the Winter dinner of the Bond Traders Club to be not too large. Even a 10% wartime to a peacetime economy, relief in OPA ceilings on apart¬ of Kansas City on Thursday evening, Jan. 30; leaving Kansas City want to expand their administra¬ ment rentals, however, it is be¬ that night for Minneapolis to attend the Twin City Bond Traders, tive and sales organizations, even lieved, (will.probably - stimulate Club's dinner oh Jan. 31. ( ' . - / carrying certain departments in some new apartment house con-r some instances to new areas, so More complete details on the tri-city meeting will be announced / struction. T \ ^ , " as to be in a strategic position to (It could happen—just as it has later. exploit all the trade possibilities that may be open to them in the happened before—that the con¬ THE BOND CLUB OF LOUISVILLE struction of new apartment build¬ coming years.4 ,r' ' ] The passing away;, of / John D. Faison, ings will come just at the time Thus, much at least of the space in covering some NSTA Notes • REAL ESTATE SECURITIES , BOUGHT SOLD fc\ ■' / , , . QUOTED ( - _ , which SHASKAN & CO. Members Now York Curb Exchange Boll aging Dlgby 4-4950 of under Markets: California & New York ing square low as per commercial of in general, it is said, the ? action of an ac¬ space resembles cordion, times in good enjoying than v formerly, larger and more pre¬ into move - families, now incomes larger buildings, such conditions, it is gen¬ out swelling - as quarters and or as sons and daughters, giving expression to a desire commonly observed of least 50% of the space now occupied by the government agencies. Even should the government agencies vacate all their quarters and 50% of the space remained unused, de¬ creased costs of maintenance, it is thought, would still work to bolster profit levels. However, it obtain quarters of their own and shrink¬ ing in b"ad times as families find tentious wanting to live at such that the smaller and tious places Francisco 4 EXbrook 8515 William O. Co.-y:-y/ :j:$ :3:?:' Henry Christman; Jr., Vice-President; James C. Willson & Co. liard & Son. G-2 /■ s F-l Membert Neto Dlgby 4-2870 41 5s Our Bankers Rldg., Inc.—Chicago '60 W.S. Wacker Wells Bldg. and curities market supporting Hotel> St. Xi; vH can J. Tuesday, Jan. 28, 1947. ASSOCIATION OF NEW YORK Heaney, : * "'-"V, *>' 51 \v• c i* • *'..*>•' •/- f' ; r Other of Joseph McManus & officers , Dealer• Ataociation H An over 2-2100 Michael Common issues, sound clientele. constant outlet for high HELP WANTED (• of all types investment type of ") ■ suitable for an - : POSITIONS WANTED OTHER CLASSIFIED ADS amott.Bakbr &\Co. Central 4402 * i it. . ..... •« SEE INSIDE BACK COVER Incorporated New York Tel. BArclay 7-4880 "*«< • * Heaney clientele, serviced, by 54 registered • 150 Broadway J. FOR Louis CHICAGO * 1 J Produce Exchange Luncheon Club., elected for the coming year are: Louis A. Gibbs, of Laird, Bissell & Meeds, First Vice-President; Frank A. Pavis, of Charles E. Quincey & Co., Second Vice-President; T. Geoffrey Horsfield, of Wm. J. Mericka & ,Co., Inc., Secretary, and Wellington Hunter, of Hunter & Co., Treasurer. . " 7 •' • " ' " ... • • n*. Pictures taken at the meeting will appear in the "Financial Chronicle" of Dec. 19. Statler, offerings from other dealers 135 So. La Salle St. CG-8I ' Co., was elected President of the Security Traders Association of New York, Inc. at the annual meet¬ Hotel, In York Security large retail We welcome ; Valiquet & Co. \ ^ r - ^ratify/ :•> - " Myles Standish Co. Boston | _ 7, N.Y. Teletype NY 1-588 s..* »;>."« « > « ■ 3 *■»"» I Committeemen "I are; CLUB,OF CHICAGO SECURITY TRADERS representatives, provides a grade investment issues. of Roosevelt 1 ' ^ Pierce, ;Fenner & Beane. ' RETAIL DISTRIBUTION BY 54 MEN Streets '52 W.S.-—New York 3-5s - Ferguson, Merrill Lynch, weaken the se¬ Jan. 31. it, as market Broad Street, New York 4 Prince & Lafayette : 1 r Stein Bros & § Incorporated Real Estate Securities ; ; 1 ' - : > Hamilton, Treasurer; > I Hil- y Berwyn T. | & Co., and Mrs. Ora M. | National - winter Dinner scheduled for Seligman, Lubetkin & Co. Teletype NY 1-1942 ; v r The Bond Traders Club of Chicago announces and undation Compan SIEGEL & CO. 6 ■ - ing held at the / - ■ . Secretary; J. J. B. Moore, Berwyn T. Moore •. t Estate Securities 80 Broadway, N. Y. Alden X:,. i, BOND TRADERS decide the old home¬ isn't such a bad placev in to live after all. Such facts ■V7'V * ,v All Real o. William less preten¬ more attractive than they thought daughters re Mtge.Co. B-K - * Boyce. I . Michael • /■ Alexander CTIVE MARKETS Series -v< • Brocar, Jr., Albert C. •: times sep¬ possible before and as sons using. It is recognized, too, that as much as a 5% vacancy is actu¬ N.Y. Title & the following have been reelected to serve as officers H Bankers Bond Co., President of the Bond Club ( or are livable and elected £ of the Club:* • / ■ ;■ Alden, President; O'Neal, Alden & f of the Bond Club, arately from their families,, readily absorb at once at left the Club without a President, -j deliberation by the Board of Governors *,! Louisville, After due their annual Mid¬ This will be for stead members and guests. In co-operation the Bond Traders Club of Kan¬ which has been observed that the gov¬ sas City will hold their annual Dinner Thursday, Jan. 30 and the as these, of course, only, tend to ernment agencies are not vacating Twin City Bond Traders Club will hold their annual Dinner (Friday* all the space they have been spread confusion in the real estate J. S. Strauss & Co. Montgomery St., San $1.50 erally felt, can hardly fail to show increases or, at least to maintain a considerable degree of stability. Private industry, it is estimated, can Real Estate Issues Tele. BP 61 & 62 around added space will be starting to taper off.^De¬ mand for apartments and dwell¬ $1.40 or $1.25, will now command around $3 per square foot. Earn¬ ings 158 agencies foot but in some cases as Teletype NY 1-953 Firm Trading government when the demand for acquired, say in New York, at the low rentals of 1942 period, aver¬ Members New York Stock Exchange 40 EXCHANGE PL., N .Y. the V t ' 1 ^ THE COMMERCIAL & FINANCIAL CHRONICLE until corrected been Two related which ment Permits unlimited circulation of "red herrings" as soon as registrar I tion is filed, on condition that it is explicitly stated there is no offer • ; - Vi to I i sell, has offer to buy, or solicitation to sell or buy, or to dispose of;:, question.'; New rule to be effective during a six months' I; or trial period. ; ' " \ , ' The Securities and Exchange Commission has announced the adoption of Rule 131 pursuant to the provisions of the Securities Act of 1933, particularly Sections 2(3)<£ and 19(a), to facilitate the dis¬ distribution of copies would be v ' ; semination of information in curities . Act ments ^, registration before 1statements such become registration effective. . provides that sending any t. before person, statement; Se- state- It giving to registration or a becomes • effective, a of the proposed form of pro¬ filed as a part of such registration statement, shall not in copy spectus itself constitute deemed adequate. The its Commission will were at the cerning securities in .. continue policy, enunciated in Securities (1) has receiving the red herring. sons \: information communicated to those per¬ proposed . circulated for time and same which * the posal also provides that son given con¬ Commission yet taken action, are: rule providing that a sum¬ of information in a regis¬ a tration statement, which summary stitute effective, shall not offer an to sell con¬ security within the meaning of the Act; and (2) a rule providing that a statutory prospectus may consist of a red herring prospectus which is attached to and made part of a a inadequate red her¬ and investors need the out of the Rule 131. Act, the Rule in the nature of an Interpretation of certain provi¬ sions of Section 2 (3) of the Act; that it relieves restriction; that Both of ' these Commission proposals but re¬ that , study and further dis¬ ovith the industry before be taken with respect more public procedure pur¬ (a) and (b) of procedure Act recently announced in unnecessary; and that the Securities Act Release No. 3171, are the Commission is also consider¬ Rule may be declared effective them. to As notice and can ■ - suant to Sections 4 1 - the Administrative was immediately pursuant to Section ing proposals for the simplifica¬ tion of the registration forms un¬ der the Securities Act of The , text the of 4 (c) of that Act. 1933. Commission's Rule 131 shall provide as follows: inaccuracies Acting pursuant to the Securi¬ inadequacies iri the red her¬ ties Act of 1933, particularly Sec¬ Definition, for certa'n of "Offer to Sell," "Offer for Sale," "Attempt or? Offer to Dispose of," and tions 2 (3) and 19 (Continued on page 3111):*;; formal action is as Rule follows: 131. to correct necessary and prospectus) ring, so that both together contain (a) thereof, the offer to buy" within the mean¬ ing of Section 2(3) of the Act, if the proposed form of prospectus an contains mation the substantially the infor¬ required by the Act and and regulations there- rules under ; be to spectus for included in registered a pro¬ securities, or ; substantially that information with certain exceptions. The copy , I must : also legend; : contain the r ; required -i The rule by its terms . V effective for trial a is to be period of six months 4 from December, i 1946, which time its operation be closely studied by the during will V Commission to determine whether it should be continued, » modified, rescinded. or ; The Commission has i adopted this rule after intensive study and - '.«• after discussion of j comments with and from many ested receipt inter¬ under- .persons, including writers, dealers and attorneys. V - iy , Under Rule 131(a) nounced, a of copy herein a an¬ proposed form of prospectus containing the * f; necessary given r legend to any be sent or ask soon as may person the registration statement is filed, if it contains substantially the in- , formation required * the rules imder - and be to spectus for by the Act and regulations included in Writing Its Way Around the World therea pro¬ registered securities, or contains substantially that in¬ formation except for the omission PPROX1MATELY125 million Scripto Pencils; of information with respect to the offering price, underwriting dis¬ counts or commissions, discounts or commissions to dealers, amount of proceeds, conversion rates, call prices, or other matters dependent upon the offering price. - ; ' ' -Section 8(a) of the Act; in out¬ lining the conditions under which , ago—the placed , Commission statement, a for - the market at / . , a . put to use in the manufacture of booster : ;!•>:V'. ;• . •»* v.-;'. • parts.: Five Army-Navy ><E" awards testify thai Scripto performed its task ■ well; meanwhile continuing production of mechan-y of mechanical pencils. From ical pencils at the government's request. headquarters areas. • An important part of Scripto operations is the placement lead and eraser business. Scripto .*■ i V"-'-.:'v,'l f , \"^ 1 r y.-.'v', {~'' i " ' .• " i •''•''X'i<71'-.. V'v' "••Jj^' ','••!:??♦'■*.. V:: ",v: - j,' ? •" --C-V;.;V-'r'J* Under progressive leadership, Scripto, Inc. is trans¬ lating , plans postwar into action . . working . toward further development of domestic and over¬ reseas business ... constantly creating new products. was also the first to develop a full line of refill colored leads. With its newly production, A separate division, Adgif, was created in enlarged plant geared to all-out Scripto looks ahead to even greater been : of copies' of the proposed prospectus, as permitted by the Rule. The determination of form V;" •'•'.VVv-V ' yeiars^ Scripto's mechanical "know* 4 war was fuses and intricate bomb price within, the reach of f, ments, will consider whether ade¬ made > . considering acceleration of the has how" in Atlahta, Scripto pencils are sold throughout the in dissemination During wood- effective date of registration state¬ quate • first mechanical: pencil—a Scripto—was .United States and iii 61 foreign trade has been available to the public. requests 1923—the j,<+\ turer registration requires the Commis¬ Commission, . Today, Scripto, Inc. is the world's largest manufac¬ sion to consider whether adequate information respecting the issuer The was ' may" accelerate the effectiveness of . on everyone. " the year >' encased of ; 1931 to handle advertisiiiur u^ Scripto pencils for premium and. kk v success in meeting the demand for popular-priced, high-quality writing instruments, c'/ what constitutes adequate dissemination must, of course, remain a question of fact in each case after Another consideration of all pertinent factors. It would; however, involve as a minimum the distribution, advertisement Southern industries, industrial is in the series development. ready to do its by Equitable Equitable has part Securities helped to in {supplying Corporation featuring finance many Southern others with capital funds. a reasonable time in advance of the > ■ ;v - ' , ■ anticipated effective date, of cop¬ ies of such proposed form of prospectus to all underwriters and dealers who may be ■ invited to participate in the distribution of the security. However, the granting of acceleration will not be conditioned upon the distribution of such copies in any state where their distribution would be il¬ legal. In this connection,,/ any registrant or underwriter may, be¬ NASHVILLE fore distributing 322 UNION such copies, ob¬ tain from the Commission's staff &n opinion whether the proposed DALLAS KNOXVILLE EQUIT GREENSBORO BIRMINGHAM NEW ORLEANS The is primarily still being considered quire finds ; "offer for sale," "attempt or offer to dispose of," or "solicitation of *• to carry j provisions adopts "offer to sell," an public j protection of; necessary purposes, rings (copies of proposed form of have been circulated effective and for the interest was registration tions. are cussion becomes herring Commis-j neces-j-,; sion, deeming such action sary and appropriate in the hereby action registration statement the became statement is used under specified conditions 3061, of refusing supplemental document containing acceleration where materially in¬ such additional information as is or before before the Securities and Exchange any per¬ be sent or given only the supple¬ mental document in certain situa¬ Act Release No. accurate to whom the red rules com1- not mary the information required by Sec¬ This latter pro¬ tion 10 of the Act. Securities Corporation BR OWN LEE O. STREET, NASHVILLE 3, TENN. CHATTANOOGA CURREY, PRESIDENT TWO WALL STREET, NEW YORK 52 N. Y. " THE COMMERCIAL & FINANCIAL CHRONICLE 3022 of Manhattan, Bankers Trust, Bank, of New York, Central Hanover, Chase National, Chemi¬ cal, Corn Exchange,' 'First'Nation* al, Guaranty Trust, Irving TrustManufacturers Trust, ; National City, New York Trust, Public Na¬ tional and U. S. Trust. [..■ Thursday, December 12, 194$ Bank Bank and Insurance Stocks By E. VAN BEUSENi A. interesting item of —i——i last week was the announcement by news The - This Week—Bank Stocks An Public National Bank & Trust. Co., New York, of an increase in annual dividend rate from $1.65 to $2.00. Public has long been the an ultra conservative dividend payer, and this sharp which success at¬ Must Revise Labor 7 f "The State tax levy iox the re-offering of the $23,200,000 ;City 7 of \ Baltimore 1946-47 fiscal year does: ndt in* bonds •; served to invigorate: the elude any general fund tax levy, market " for ; tax-exempts, Laws, Says Sen. Ball; ' • T m ent: ~ ($000) 1932____^ 8,250 4,407 38.35 Dec. 31, 4,682 •39.18 31, 1933_ 1934__U_„. 8,250 Dec. . Dec. Dec. Dec. 1935 31, 1936____L_. 31, 1937-.J 31, 1938-^__^ 31, 1939_' 31, 1940-1; : Dec; '31,; 1941_——" Deo. Dec. Dec. Dec. A 8,250 8,250 31, Dec. ' 5,775 1946—— 5,453 799 .9,008 44.80 158,157 ; 136,388 1,006 7,000 1,155 7,000 10,545 • 43.86 7,000* 11,060 45.15 170,135 187,299 11,599' 12,321 46.50 243,399 48.30 325.344 13,508 51.27 415,525 17,267 48.89 18,555 51.24 •After charge-offs. • .495 . / ' 545.499 : 600 " 1,315 1,139 800 1,322 >600 600 1937 capital was increased through this, has a n 538,964 $448,364,. V Earnings have shown a steady expansion. In 1932 there were heavy write-offs; prior to these charges tota 1 net -earnings amounted to $940,000. From 1933 to 1945, both years included, total net earnings aggregated $16,063,- off head to what we in a achieved f of have headed Senator H. Ball \ interest demands has Jos. are our , a thorough over¬ labor laws. Mr. Lewis been adjusted to reflect March 31 deadline, and I doubt that Con¬ gress can complete the legislative overhaul by then. But there are some things Congress cam han¬ dle by that date, including media¬ tion, secondary boycotts, unioniza 000 and total dividends, $7,681,000; tion of foremen, union breach of $8,382,000 or 52.2% were retained contract, and welfare: funds. To to build up surplus and book- handle the problem 7 posed by value. Recoveries and security Lewis will take longer." profits have been excluded from reported net earnings and have and 20% been used to write-down 20% a stock dividend and the sale of 4,000 shares of new stock. The next, change was on Feb. L 1945 when capital was increased /from $7,000,000 to $7,700,000 by a 10% stock dividend. In December, :1945 a further increase was made through the sale of 110,000 shares at $45 per share. The par value remains at $17.50. \ The book-values listed have not the 10% stock dividends of 1945 the cost respectively, but are of securities and for reserves. " 330,000 shares in 1932It may be of interest to com¬ 1936, 400,000 shares in 1937 to pare Public's record with that of 15 of New York City's 1944, and 550,000 subsequently. leading and 1937 based on Over the period from Dec/ 31, commercial banks as a; group. 1932 to Sept. 30, 1946, total Cap¬ Earnings and dividends are for italization has increased from $12,657,000 to $28,180,000, a growth years 1933 to 1945, and other fig¬ .of $15,523,000 or 122.5%; book val- ures from Dec. 31, 1932 to Sept. iue per share has grown from 30, 1946, 15 Banks Increase in total capitalization.- ; Increase in surplus and undivided Increase in. deposits— •Aggregate net earnings— Aggregate dividends Dividends . . * 122 5% js profits..^J 32L0% .7" 57.5% , 495 0% I™ ___ / , 'Excluding recoveries and security profits so far ' • $1,384,637,000 7,681,000 2.io : 211.0% $16,063,000 ' l_„i covered ; 29.9% 882,583,000 \ times 1.57 times determinable, as Incorporated by Royal Charter 1727 regard ; to comparative growth of earnings, it seems more rational HEAD OFFICE—Edinburgh J throughout Scotland LONDON OFFICES: 3 Bishopsgate, E. C. 2 8 West Smithfield, E. C. 1 49 Charing Cross, S. W. 1 ; Burlington Gardens,^ IV. / 64 New Bond Street, W, / TOTAL ASSETS £115,681,681 us a from the year by wayi the was by the "Chase National Bank of New York and, included as principal members, the Bank¬ ers Trust. Co., First National Bank-of New York, National City Bank of New 7 York, Chemical Bank & Trust Co., Smith, Barney 6 Co., Lehman Bros., Blyth & Co., •Harriman Ripley ' & •; Co. and fund tak has not been levied. the award Dec. il Bank of Chicago, also competed for the loan, Capital on specifying .• terms interest cost of a net one of the offerings to " . bonds awarded * appear unconditionally guarantee the cer¬ tificates as to par value arid div¬ off lic's net . the7 State from througli the me¬ dium of donated State ad valorem taxes, which remission of taxes is authorized t by various special acts of the legislature,- all in ic* eordance With the constitution ro| State the various under • articles the use of State aid for promoting the general welfare and prosperity of the State. .' v i permitting 7 • /"The situation has created con* confusion ;; relative " siderable early maturities of both to principal and interest of bonds of the vari* units affected. ous It would cer* that the State Will make every effort to avoid any default or delay on the bonds payable from the remission of tainly seem - of " November. obliged to rescind block of $1;5O0,OOO funds such sale of hand on units that most and meet can bond of prin¬ and interest requirements" such surplus funds for* a reaspnable period of time." cipal from advertisement v on in the latter part The -city/ Was _ The 'New York Central RR. will ] 23; areas entitled to receive ai<f largest new New York Central equipment trust of 1947 2% stantial debt issues authorized equipment trust certificates, and by the voters at the November are publicly offering a portion of elections. them, subject to Interstate Com¬ ; . Another development in the merce Commission approval, at prices to yield from 1.20% to past week that contributed to. im¬ 2.25 %, according to maturity. The proved sentiment among munici¬ was the enforced certificates mature annually Jan; pal (dealers I, 1948 to 1957, inclusive,; and are cancellation by the City of Boston of a major part of the $2,955,000 being issued under the Philadel¬ ■RR. *- that there ire , the / market in recent months and one of the first of the sub¬ of '$20,000,000 "We understand - stituted . levy for remission to the various".eligible' areas, i :Itf is in* teresting to note that Ihis is the first year for the past 7approxi~ mate 100 years, that a general - vHalsey, Stuart & Co., Inc. and won rent Peabody 1.554%. The Baltimore finaneing, incidentally, was addition¬ ally significant in that it con¬ associates be cur* State taxes. We understand that: when ; the legislature meets in & t Co. This January, an effort will promptly group paid a price of 100.1399 for be4 made to correct this unfortu* the i bonds, tb bear 114%, lJ/2% nate situation by requesting the / and 1%% coupons, the net inter¬ appropriation of surplus funds to est cost to the city being 1.527%, cover this year's tax remissions. The bonds mature serially from Furthermore, it is believed that 1950 to 1976,-incl. 7 ' V practically all of the units eligible An equally strong syndicate, to receive tax funds by remission " headed by the First National have varying amounts of excess Kidder, Halsey, Stuart Offers H. Y. Central Equips. idends by endorsement. They will substantially all be issued to provide for approxi? their "depression" losses, and in mately 75% of the cost of new fact were by then actually realiz¬ standard-gauge : equipment, esti¬ ing some recoveries. In 1936 Pub¬ mated to cost $27,281,000. 7 written underwriting that; there.- will means funds available from the no .< latter, based 1936, for by that time the banks had Branches to, start given to speak, phia plan. • With Royal Bank of Scotland so by ; the syndicate. position where the national haul of circum- of the degree of success reason . The. think .we the v, stances, the fact is that the mu-:• nicipal; fraternity i received a /"lift"-of considerable import by a just com e through. I* of r considered were k to the need recurrence J which Regardless for legislation / $25.00 to $17.50, was think not h as 660' and $538,964,000, a rise of thereby increased, In 000 or nearly 500%. ; from value but n an y Several capital changes have $38.35 to $51.24, a gain of $12.89 been made during the period un¬ or 33.6% before adjustment for der review. In 1936 capital i was stock dividends, but of $29.29 or reduced from $8,250,000 to $5;« 76.4%, after adjustment; deposits from $90,600,000b to 775,000 through a change of par expanded surplus generous,' particularly when com¬ pared With those available on a great many of the city's outstand¬ ing: bonds/: g e d in 'respect tjie situation c - 600 1,787 2,094 Lewis ., that which that it was. offered to investors on terms' down,: do 600 600 1,235 - " Jam happy backed has « ;/;v/.495 I 600 , "I very that 536 > 1^25 1,213 159,990 - 495 157,361 9,625 9,625 Sept. 30, 961- 40.89 Dec. — Vv;; '&K ; V .660 - - 125,648 138,313 • 39.87 7,000 7,000 1945—— 812 • 40.60 41.52 42.28 31, 1943—-Dec. 31, 1944— 31, 96,337 5,148 8,950 •: 1942—7,000 31, *•—2,840 90,600 ; <$ooor ($000) ($000) - 9,356 9,910- 7,000 7,000 Dec. . •$. •• ($000» 31, - . • entire action undoubtedly will thereby reducing in considerable be welcomed by the bank's numerous stockholders and well-wisherS. measure the apathy that has been Public has an outstanding record of growth since the dark days Commenting on the falling !d£f the-( chief • characteristic of ihis of 1932-33, under the guidance of alert and able management. 1A-re¬ of the coal strike by "John i L-" field ? of investment for many view of this growth may be of interest. Lewis, Senator Josdph 'Ball ' (R£ weeks /J An important factor- in Total ' of Minn, told the ' Surplus.and "Chronicle's"- the; favorable .reception accorded Net Oper. Book-, Undivided correspond¬ the undertaking, of course, was Dividends Value Profits Earnings Deposits Capital • ;\ terest of bonds of the local units. tended -the •».? i „ the %Vz% parking facilities bonds, scheduled to ma¬ ture from 1947-1966, as the at¬ torneys declined to certify their legality "because of technical ob¬ jection to the manner in which the loan had; been "passed.? 7;: ; Notice of the Sale of Bonds " Sealed proposals will be received in tb® " ;: office of cation the Board of Edu¬ of Clerk the Washington of Township Local School District, Stark County, Ohio, P. M. Sutton, R. P. D. No. 1, Alliance, Ohio, until twelve o'clock noon, December 20. 1946, of the for purchase district school Two the in Hundred of bonds of said aggregate amount <$200,000j)0> Tliousand < Dollars, dated January 15, 1947 and bearing Interest at. not to .exceed 6% per ; payable semi-annually and issued purpose of constructing a fire- ; elementary school building, : and under authority, of the Laws of Ohio and t of Sections 2293-1 et. seq. of the era! Code of Ohio, and under and 'In accordance with a Resolution of the Board of Education of said school district, to issue said bonds, which Resolution was duly passed by the ^oard on the 13th'of Novemoer, 1946. 'I annum, for the proof : denominations and " respectively as follows. All bonds dated JanUary'15, 1947 and'there be Issued two hundred (200) bonds % Said bonds are of the mature shall be shall of One Thousand ($1,000.00) Dollars each,' Associated with Halsey,. Stuart earnings, exclusive of se¬ The cancellation was not en¬ with interest payable semi-annually on curity profits and recoveries, ag¬ & Co., Inc. in the offering are: the 15th a ay of January and of July :in tirely unwelcome as the original gregated $1,225,000 and in 1945, Equipment Securities Corp.; Halleach year. Said bonds shall mature .In offering had proven to be a - semi-annual Installments according to the $2,094,000; an increase in the an¬ garten & Co.; Harris & Co. (Inc.); slow mover and, to that extent, following schedule; Five bonds of One nual earning rate of $769,000 or Hornbl'ower & Weeks; Otis & Co. 7 Thousand ($1,000.00) Dollars each " shall had been a source of depression 62;5%, Aggregate figures for the mature March i, 1948 and five bonds *of (Inc.); Phelps, Fenn & Co.;. R. W. Jto tbe market in general. This, 15 banks, on as nearly the same One Thousand; ($1,000.00) Dollars each y "Pressprlch & Co.; Ed H. Rollins & of course, was just one of sev- ; shall mature September 1, 1948. A similaf basis as determinable, were $113,number of bonds shall mature on each Sons, Inc.; L. F. Rothschild & Co.; ;efal recent flotations in that 646,000 in 1936 and $127,686,000 in anniversary of said dates; a total of Ten /category. / Thousand 1945, the increase in annual earn¬ Gregory & Son,'Inc.; The Illinois ($10,000.00) Dollars In bonds " Elsewhere in ■ t h e s e pages shall mature in each year for a period ing rate being $14,040,000 or ap¬ Co.; First of Michigan Corp.; Hay♦ v«r (Starting on page 3043) will be of twenty (20) years. proximately 12.5%. den, Miller & Co.; The Milwaukee Anyone desiring to do so hiay presenli found the addresses and most of It is very clear from this record Co.; Wm. E. Pollock & Co., Inc.; the committee -reports made dur¬ a bid or bids for said bonds bearing a ; that Public's rate of growth has definite rate of interest different thaa Julien Collins & Co.; Kebbon, ing the course of the recent con¬ specified in the advertisement, providing; been far greater than that of the however,-that where a fractional interest vention of the Investment Bankers McCormick & Co.; Mullaney, Ross group as a whole. rate is . , Associated Banks: Williams Deacon's 7;' Bank, Ltd, Glyn Mills & Co. The Christiana Securities Company Revised Circular on Request 15 banks considered are: NEW JERSEY Laird, Bissell & Meeds Membcri New York Stock Exchange Telephone: Bell BArclay 7-3500 Teletype—NY 1-1248-49 Association document. and Thomas & Co. H. O. Peet Adds Lockridge KANSAS CITY, MOi-Lee ^ L. Established 1891 18 Clinton St., Newark 2, N. J. MArket 3-3430 N. Y. Phone—REctor 2-4383 Florida. Included with 10th We have reference to committee's comments per taining to the "unusual situation recently developed in Texas in' regard to the State's so-called T^x Revision" Bbhds." We quote from follows: years - past, Texas has remitted "to certain lo'cal units H.„ O.,Peet & Co., 23 West part or all of the State general Street, members of the New Lockridge has become. associated J. S. Rippel & Co. in in the reports is that of the Mu¬ Mason, Moran & Co.; McMaster nicipal Securities Committee and Hutchinson & Co.; Alfred O'Gara it may be of interest to comment & Co.; F. S. Yantis & Co., Inc.; here on at least one section of this (Special to The Financial Chronicle) Against E. I. du Pont 110 BROADWAY, NEW YORK 5, N, Y. First Cleveland Corp.; the SECURITIES This Stock Presents Interesting Tax Loss and Arbitrage Possi¬ bilities & Co.; The this part of the report, as "For some bid, such fractions shall be one? of one .percent (1%), or mul? thereof. Said bonds will be sold to the highest bidder at the time and place above mentioned at not; less than par and accrued Interest. Bids may be made upoa >1 fourth• (J/4) tiples all / - issue. bottda bid for and the gross amount of bid and accrued Interest to date .of delivery, All bids must be accompanied by a certified check drawn in favor of the" .Board 'ot Education of, Washington Township Local any number of bonds in this Air bids must state the. number"of* or. District School The Board of in the Education district reserves the and all bids. should Bids' " be v of sum of $2,000.00. said school privilege to reject any • " sealed - ' and' : • v ,' endorsed' . York Stock Exchange. ridge previously with Mc¬ was Donald & Co. Wright, Snider Co. Mr. Lock¬ and vPrescott, " : Tpwnship. School Bonds"'. ' ■' *•.7 fund tax; -It is reported that in " w *By order bffthe Board of Education I' vof Washington Township Local ■ • some instances this State ad va¬ ; > 7 * School District,'. Stark County^ Ohio. lorem tax remission represents all V'. • F, M,-SUTTON, .Clerk ,/■ .; 7 dr.ihe greater portion of funds for R. f; D. No. 1; •• "'"v the: payment; of principal and in¬ : ' ' Alliance, Ohio ' ; vV: ."Bids for . , . , Washington ■ /Volume 164 Number 4550 * i .v. " - THE COMMERCIAL FINANCIAL & CHRONICLE .. ' * . * ^ ■ 3023 - ■ • > . gaining NAM'S Program for Prosperity y.X;,i. k-y % , In - s; condensed •- form the find- l ings f policy . mittees jy ing year * the of i It is children our America, to protect labor, to e increase pro¬ duction, the following labor d 1 spokesmen y the - meetings, f Dec. to free collective - is bar¬ 3, The union ; their of well as as the the protection of law should be extended to strikers only when , em¬ the majority of well as as the employees in the right to their re¬ express spective positions. 5. No issues law of which .7"''" „ should strike protection if not do it involves relate . Such issues demands and in work restrictive are - demands, or secondary boycotts. 6. No individual should be de¬ bargaining unit, by secret ballot impartial supervision, have prived of his right to work at an voted for a strike in preference to available job, nor should anybody acceptance of the latest offer of be permitted to harm or injure the employer. Employees and the employee, or his family, or employers should be protected in (Continued on page 3110) under em¬ incon- densed by Committee a on Robert R. Wason %■ Committees t iunder chairmanship of Robert R* Wason, retiring President of the [* Association, and constituting $23,200,000 a program for 1947, is as follows: - 7 Today we should not doubt that I future y our yield prosperity Both are available "7 ■■ • : ■ 'X: . can and progress. Gityjof Boltimore, Maryland I < Every : American now knows ( that the frontiers of America are v as .unlimited as, the minds of men '% and that they are virtually un/. explored. X;X Industrial research •5 now, • • , , , 5 | that produced countless . l'/2%. ''/♦% and I %% Bonds new , Interest Exempt from present Federal Income Taxes X weapons to win the war is? avail* '■:* able to improve human welfare when permitted to do so. There Legal Investmeht for Savings Banks and Trust Funds in New York > Is , no . -Hope is abroad in America. The i, American people are demonstrat:i Ing that they, intend to recover AMOUNTS, MATURITIES AND YIELDS . (Accrued interest to-be added)* 7; ,7.-.-/ the freedoms lost in depression 4 and ■ war. , , - $10,000,000 S|I: /. ' . The industrial plant created during the war has not yet ex- • * * > and certain other States peed for depression in Amer- ICcU , pressed its duction of ; power i prove full capacity in goods pro- its nor Dated August 15,1946 full to reduce prices and imthe American standard of ealyr. Aug. 15, Due' $ I ,000,000 ' $5,000,000 $•)" • (Semi-annual Interest February 15 and August 15) 1950 $ome control of prices, has been X 11/2% Highway Bonds - . • I X!XX:./XXX *'7X77>/.X/XV;C y removed. - Other controls will hamper the American economy. There is a jam of unspent money, of unbought goods, of un¬ built-homes, of enterprises re¬ tarded, of inventions to be made. .85% 1951 .95 1952 1.05 ' , • j ' ' 1953 1954 1.10%; ' 1.15 1955. 1956 , . 1950-59 ■ > 1958 1.35 1.20 * 1959 1.40 1.25 XXX one can and the measure of millions of 1.05% 1953 1.10 • 1964-65 1.55 115 1959 L40 1966-67 1.60 1955 J.20' X 1960-61 1.45 1956 1.25 • 1962-63 1.30% 1.50% 1968-69 ; 1970-76 ; expressing only fractions of they possess, waiting cndv 1.65 1.70 XV Dated $3,200,000 %% Water Bonds January l, 1947 Due SI OOO.OOO-ea. it-annual interest March I and to l, 1952-56 inct. yr, Sept September I) Dated : Due $800,000 August IS. 1946 / . X ,* < ■' X X,: The incentive of profit and the f. Sept. I, 1952-61 incl. Sept |( 1962-76 incl. XXI.35 7 energies restrictions yr 1957 ( Americans, thwarted government ea. yr. ea 80000 ;^X^ ■:'-'X;'sr/X'X::X:" the abilities •for ($380,000 f$ (Semi-annual interest March I end September I) ,. 1952 1954 XvXXt ,X -Due 1958 . - -, January I, 1947 X * 'X X;.;7 1.30% ;7, v ea. yr. Aug. 15, 1970-73 incl. r * / J. * (Semi-annual interest February 15 and August 15) , t Price 100, and accrued interest X.justification of savings to create capital * need understanding by every American. ;X; The wages and salary payments . In ;- 1945 to -workers corporations large as the in 12 were Theabove-Bonds'dre offered when, as and if issued and received by usarid subject to approval of legality Messrs. Wood, Hoffman, King <f Dawson, Attorneys, New York, N, Y, American times dividend by X . as payments to the millions of corporate stock¬ holders whose investment makes high wages possible. * X X-. ..The Chase National Bank./ i Bankers trust Cofnptifty ' - The presence of profit is workers' only guarantee of ployment and enterprise is workers wages. as?<< .f First National Bank Smith, Barney & Co. em¬ Lehman Brothers / Blyth & Co., Inc. Harriman • S important to Harris Trust: , . Organized ^ ')- , _ , • . v Mercantile-Commerce Bank & Trust •"'r /' ■ y | ^ ^ J' \ X - xs, v lr\, v .• < and women who ucts, believps in 1. High wages to sup¬ 2. 3. ■ men buy their prod¬ :: XX NAM each accomplish advocates one freedom these ends, certain designed to in t- ^ v "?!•»" , X** '^V. X- ' Kidder, Peabody & Co, XX \L- * * '■ The Ndrthern Trust vi- Company First National Bank ol of Portland • /' 1 .Portland, Portland, Ore, Ore. >'■' "/ "• . % - . .. V. Baker, Watts & Co. ""v' Laurence M. Marks 4 Co. '7 •oltimorev.;//v;: vXXX/V/X.:'v First of -... X / )/ >;• -/XXX;/. .,, actions, restore Incorporot.d Stein Bros. & Boyce . Baltimore Union Trust ' ,•./ /' 7-:'V- X. Trust Company of Georgia '.XV'XXX Company Incorparut.d y. , 1 /XX,,-/; ..• vX- R. D. White & Co. 1 - •>- /7 '7.!'7 ..7r'"'X ,7/iv ,Xr:X;XV'.XX/7X.7v:: vx'^vx xxj:x:7 j: x New York, December 6, 1946, :X R. S. Dickson & Co, Incorporated ':> 7.X/ /7X 7"/*.'•/■•/"• X: R. L. Day & Co. X Harvey Fisk & Sons Baltimore XX Company, Inc. ., ;: "-'/XXX'7'X7:XX; . Michigan CorporationXXX^XXX X^ j'T-X the America and thereby bring about a higher standard of living, a stronger national defense Company Company '*■ 77 Kean, Taylor & Co» Kean,-Taylor Co* 7:XX Mackey, Dunn & Co. ; Low prices to consumers;' - 7 Fair returns to investors; ; /.' To • R. W. Pressprich & Co, "Estabrook & Co.", W. E. Hutton & Co. B. J. Van Ingen & Co. Inc. Lee Higginson Corp. XX /7c //'X.XXXX^VX. /XXVVXX XXXX'r ■::/ ■ " /. X 7;.X;X,/X'XX''iXXXX/XX/7/ BacOrt, Stevenson & Co. Braun, Bosworth & ,Co. '7 Co.. Equitable Securities Corporation X C. F. Childs and Company, lnc» cX/v'/ /7/X 'p-I-'. ^v^X ,X 7 C workers; -VX of Baltimore . The NAM, servant of the Ripley & Co. T. Phelps, Fenn & Co. ) V t.X ■. - ply the tools of production to produce \yhat customers want at prices they are willing to pay. 7 • Chemical Bank & Trust Company , Incorporated Mercantile Trust X • X % Salomon Bros. & Hutzler ' 1 Bank Inrnrnornted . Savings Bank X; X X Xv XStone &" Webster Securities Corporation N.W.Harrij & Co. 1882. Incorporatedl907 •V/77; Baltimore I There can. be no prospect r of sustained and productive full em¬ ployment unless there is prospect investors who as .... cinci Brown & Sons Alex. Brovft Sons. ?; ^ " The National City ' °l New York > J X Profitable it of return for v v is to owners, de¬ spite efforts to persuade workers to the contrary. -,v * as ^ the Stern Brothers & Co. Kansoi City ;X- Mackubln, f , l'/2% Sewer and Airport Bonds • lo._ Dated 1; iNo • h Jnclj - 1957 \ in¬ jurisdictional strikes, sympathy strikes, strikes against the government, strikes to force employers to ignore or violate the law, strikes to force recognition of an uncertified union, strikes to enforce featherbedding or other This I draft, to hours or working condi¬ tions, or demands which the em¬ ployer is powerless to grant. volved 7'.'l V W, H. Morton & Co., Inc» u-i-- 'X' dohn Nuveen & Co. Legg & Co. ' Owen , Daly & Co* Baltimore ' the have wages, for appropriate unit wish to be repre¬ sented by the union. X' pro¬ recomihended. f; It intended at 4-6, elusive. is gram by employers. contrary to the public as by terms should provide that disputes aris¬ ing over the meaning or interpre¬ tation of a provision should be settled by peaceful procedures. labor to as the bargaining agreements. Collective bargaining agreements re* , re¬ , duce strikes and to just to obligated, collective ployer should be obligated, by law, to bargain collectively in good faith, provided that a ma¬ jority of; the employees in the ment with labor before the law in dur- well 2. The union restore equality of manage¬ To its com ployer should be law, to adhere to x 4. If a legitimate difference of a union or unions over representing the employees of two opinion wages, hours or or. more employers to take joint working conditions cannot be re¬ wage action or engage in other conciled through collective bar¬ monopolistic practices as it is for gaining or mediation, employees two or more employers to take should be free to strike where joint price action or engage in such .strike is not in violation of an existing other monopolistic practices. agreement. However, view mi11 « of ' X prohibited as interest and their: children. I points \ welfare the and be unions an* ynounced in which abuses Monopolistic practices in should Dec. 7, the National Association of Manufac- on the straint of trade are inherently contrary to the public interest and of its Annual Convention release issued at the adjournment a turers v 1. Its Committee on Committees, under chairmanship of Robert R. 'Wason, retiring President of the Association, issues a condensed draft of findings of its policy during the year. Holds future can yield prosperity and progress, and advocates high wages to workers, x yjow prices to consumers, and fair return to investors. Recom? mends unbiased, fairly-administered labor laws. J,;.. \:?i[I Pi in New York City from how destroy its benefits. v came to popular and Corporate Taxation By JOHN L. Counsel, Minnesota General This Manufacturing Company Connolly outlines proposals as: (1) mitting corporations to deduct from taxes dividends paid share¬ holders. Concludes there should be modification instead of elimina¬ taxation, and that Congress should give corpora¬ merely relief from inequitable taxation. There have been many plans proposed for ideal and permanent tions ones of will the corporate taxation, and of problems be mentioned now 1. Repeal of and the principal considered. the Corporate Income Tax. serious defect in that it affords an opportunity to profits 'in the corporation and avoid any tax whatsoever on the oroms^ until distribu¬ percussions in our society that would be produced by such a tion. This plan pile up p has a . would It plan partially false assumption that the receipt of earnings \ for the corporate earnings, the of taxable year, whether or him. He would share in his not distributed to then / such include penalty tax on un¬ sonal income tax oh that part of earnings has not the corporate earnings which have permit i n - proven to be, and never will prove not been distributed.,, It. might vestors in cor¬ to be a satisfactory method of come about that if no cash divi-x porate stocks forcing out corporate earnings in dends were paid, many a stock¬ eventually to the form of dividends so that they holder would be hard, put to pay sell them and may be taxed to the individuals. his income taxes. He might have pay only a After all, a corporation, while a no alternative but to sell some of John L. Connolly capital gains fictional concept, is recognized as- his stock jn order to pay a tax on .1 tax on ac¬ an entity, and carries many ad¬ income that he never actually re¬ cumulated profits realized. Fur¬ vantages in business operations. It ceived, or ever would receive. thermore, it is well known that is a reservoir in which is initially Another difficulty 'would be in assets earning large increments gathered a very large portion of the administration of this law. of earned corporate profit can be the national income. In 1941, 264,Consider the result where a passed from one generation to 628 corporations reported a total change was made in the corporate another without even the payment net income of $18.1 billion and return. This would necessitate the of the capital gains tax. It is pos¬ 204,278 reported a net loss of $1.7 amendment of each Stockholder's sible under existing estate and gift billion. At this level it is con¬ return. Consider also, the problem tax provisions to leap frog a gen¬ venient and realistic for Congress of the stockholders that sold their eration or two. Of course the stock during the taxable year. to impose a toll; not, however, the capital gains provisions could con¬ complete exaction in respect of If the predicament of distressed ceivably be amended to eliminate corporate earnings, but a portion stockholders was considered a these advantages but in many of it. A corporation has a definite matter of paramount considera¬ situations there would be post¬ identity, and a real tax-paying tion, a fairly complete distribu¬ ponement of the tax to deal with. capacity that is separate and dis¬ tion of corporate earnings would It is hard to appraise the specific tinct from its stockholders. result, which might nullify the harmful economic results from It will be remembered that in attempts of management to op¬ putting a premium in the form of 1936 the Treasury recommended, erate the business in a manner tax-savings upon the concentra¬ would tion reinvested of earnings by Placing a distributed and the House the passed, a measure corporate income withholding taxation at the cor¬ repealing porate level. But it is not dif¬ ficult to imagine some general re- tax, and substituted a * Abstracted from an address by Mr. Connolly ing only to When the refund would be allowed. taxes on mountable. ,77' Conclusions corporate dividends, " share ■, It reported, ceeded the total tax of is an equivalent i If needed revenues were to be 7 It is my conclusion that— rata receipt of those /earnings by the: stock¬ obtained, this plan would neces¬ 1. We should not eliminate the corporate tax. ■, holders. It does not take suffi¬ sarily involve destructively high ciently into account the fact that corporate rates. 2. We should not permit corporaIf a very high rate were not while the stockholders have a tions to deduct dividends in beneficial interest in the retained imposed, the public would not ac¬ computing net income for in¬ cept a total exemptionof corpo¬ earnings, the distribution or re¬ come tax purposes. tention of the same is an act of rate dividends. 3. We should not adopt the sys¬ The rate selected would un¬ managerial judgment. The divi¬ tem in effect in Great Britain dend policy is determined by its doubtedly operate as a detriment at this time, but if the corpo¬ board of directors. The corporate to the small stockholders, in view rate and the starting rate earnings do not measure the tax of the accepted principle of grad¬ or rates for individuals are uation of rates based on ability paying capacity of the stock¬ brought closer together this to pay. ■ holders. Under this proposed plan, 71". ■ l system or some modification of there would be allocated to each 4. Adopt the British system for •it should be adopted. ^ stockholder his proportionate taxing corporate profits. 4.; Politically Congress will not 7 ■ business. difficulty corporations the But it. Relieving stockholders of all 3. constructive plan would a tax present rates the credit would be 19% of the dividends received and said but if this credit ex¬ computed no Under classification of as "small" _and "large" and admin¬ this method there are other ad¬ istrative" troubles are yet to be justments that would have to be proceeds made but they are not insur¬ satisfactorily worked out. r development. Such be something to recom¬ has it that mend S7l'7ii gross income, and pay personal necessitate income taxes on the levying of more and burden¬ We are here met with many some taxes upon other sources of reason, stimu¬ major difficulties. The individual late tne incor¬ income, particularly upon individ¬ taxpayer may not have sufficient poration of all ual earnings.:■>/;■ ;/rl r;V 11' :! :-y ■■ 7 funds with which to pay his per¬ . undoubtedly, for this some may , tion of corporate solution by it and authorities, by a corporation of an actual pro repeal of corporate income tax; (2) taxing corporations as partnerships; (3) exemption of dividends from taxation; (4) adopting British system whereby corporate taxes are paid on behalf of stockholders; and (5) per¬ Mr. a attention favorable , corporation in manner as a part¬ the same upon end in 7 nership. CONNOLLY* Mining and an • 2. Taxation of a ; In " 1.939. Remedies for Defects Thursday, December 12, 1946 FINANCIAL CHRONICLE & THE COMMERCIAL 3024 tax apply¬ undistributed profits. bill finally passed, it before the Annual provided both a corporate income tax and an undistributed profits the Under system in force ; Congress must provide some re»; 7. lief from the present inequi- ; England the tax paid by the cor¬ poration is considered as having been paid on behalf of the stock¬ j holders. A British 5. The best we can his computing 7 table tax stockholder in liability tax cludes in his income not in¬ only the amount of the dividends dis¬ net also the tax tributed to him, but 717': hope for in the ! 1771 i 1 immediate future is the exemp- llllS tion of dividends from the com¬ bined normal and surtax start: (as is also the starting in¬ dividual rate) and the stockholder 50% dividends ;;'7777 then \:i. •s'. , . is from than reasonable ac¬ • ■< Weslinghouse Pfd. deduct from his tax the amount of paid on the dividends by the corporation. This system in its workings results in a great many tax A nationwide group of 131 un¬ derwriters, headed by Kuhn, Loeb offering today to the ?> public a new issue of $50,000,000 of Westinghouse Electric Corp. refund claims. 7:17^7l7ll 3.80% cumulative preferred stock, '1 Substituting a 38% corporate series B. The stock, represented rate, if the corporate profits were by 500,000 shares of $100 par val- * $100.00 and a $62.00 dividend de¬ clared as a cash dividend, the ue, is priced at $100.50 a share. & is Co., . stockholder would include $100.00 This al¬ second his in income, and be gross lowed has long been used in Great Britain, and seems to have worked satisfactorily for the British. It must be remembered that/ the and rate individual "7 : both 50%. But even normal tax rate are corporate the an by Westinghouse to provide funds for plant expansion and re¬ arrangement, and for increased working capital requirements to meet anticipated peacetime pro¬ duction loads. In September, this 7-17 7.;:" "• country would Probably too high. be a including tax re¬ country, that its adoption is highly improbable. If such a plan was adopted in tive difficulties, in postwar in a compre— financing pro¬ gram individual starting rate of 38% in this the constitutes offering major step hensive tax credit of $38.00. a This system starting rate of 20%, to compare with a most conducive to the best busi¬ ness results. The pressure thus similar corporate rate would be exerted by the stockholders upon as high as would prove acceptable. management to declare dividends It is fairly demonstrable that the British system would produce so would force the financing of ex¬ pansion from outside sources many inequities and administra¬ rather '.""i, I'll 7 * "yi Kuhn, Locb S Co. Offers IS7 receives. The allowed to he that stockholder of each'$1.00 for $2.00 reports J§7 117"/V7 7ing rates. on tion.- the corporate earnings. on his behalf by the corpora¬ There the corporate rate is paid V j j eliminate the corporate tax, but in this the company marketed $30,000,000 of 2%% debentures, due Sept. 1, 1971. 77 tms •'7 " 7 77 777 1171" 777' year, Specifically, net proceeds the the of sale preferred new 7177 ill applied to the pre-; stock will be payment of from $50,000,000 principal outstanding bank loans. amount of borrowed bank loans.market and generaL Last May the company $80,000,000 Subject to through •-Ill it is the pres¬ of the manage¬ h ment to issue and sell in 1947 ad¬ 1711 complete edited text will subse¬ porations in the same manner as this country, and you assume com¬ ditional shares of its common stock to individual normal as well as quently be published in a volume surtax. This plan proved very un¬ partnership seems to be receiving plete distribution, it would en¬ to provide funds for use in con¬ issued by the Institute. tirely eliminate the corporate tax nection with the expansion pro¬ except on that portion of the in¬ gram, including the retirement of come paid to exempt institutions. the remaining $30,000,000 of bank This advertisement is not, and is under no circumstances to be construed as, an offering 5. Permit corporations in comloans. 7vl'l—■. ■ *7 7. 7..,^,,^.. puting. income tax to deduct 7. ~ of these shares for sale or as a solicitation of an offer to buy any of such Westinghouse's expansion pro¬ Symposium of the Tax Institute, New York City, Dec. 6, 1946. The tax made and dividends subject cumulation of surplus earnings. Optional taxation of smalUcor¬ funds, business conditions, ent expectation j . t securities. The offering is made only by the Prospectus. V ; - 11 Sll-' illl'll dividends paid. This would eliminate gram, the cor¬ begun in 1945, total estimated involves a .7717 expenditure of ap¬ proximately $132,000,000, of which about $95,000,000 represents the -;7vlv; cost of new facilities and equip¬ 7773 \1 profits tax for those corporations ment, and the balance the cost of ;j not distributing their entire earn¬ rearrangements and related ex¬ ings. This would impose hardships penses, Up to Sept. 30* 1946 ap¬ on a great many small corpora¬ proximately $49,000,000 have been tions that would be required to expended in this connection and retain their earnings for growth porate tax if we assume complete distribution of earnings. But it would amount to an undistributed 24,300 Shares • 1 Minneapolis-Honeywell Regulator Company 7 r-> 77 ,7v. Ik ,; 3.20% Convertible Preference 77::7 7:'v * 7i ;7- 7.7 vv.v.- :*7 771/.7 ,,7' • '*77- '*•« ,w. c •*. Stock, Series A -..V., i\: (Par Value $100 per share) »7'i' .-r'j. •• 7v* \\ 77>.'. lt 7 •' t 7 '7^7 • 7:- v~:'77 '*•' : 11171:,\7;7 purposes. - • Price $105 per share and accrued dividends Copies of the Prospectus may be obtained in any State from only such undersigned as may lawfully offer these Securities in such State. of the / December 12,1946. CORPORATION v., Dividends received by indi¬ viduals should be exempt from tax at the basic rate for the combined normal and part of the income distributed un¬ present rates, but it would der alleviate some of equities. The it is expected that the the present in¬ method by which of the greater part; remaining $83,000,000 be expended consist of by the end of 000,000 of 2Vs% 1,1951; $30,- $20,000,000 debentures, due Nov. of 2%% debentures, due accomplished could Sept. 1, 1971; $30,000,000*ot \Vt% be by deducting from the tax bank loans, due April 30, 1948; computed upon the individuals 79,974 shares of 3V2% cumulative entire income plus dividends the combined normal - and surtax preferred stock, series A; 500,000 starting rate times the amount of shares of 3.80% cumulative pre¬ dividends, or by eliminating divi¬ ferred stock, series B, and 13,dends from the starting rates such 016,342 shares of common stock as was in effect prior to 1936. with a par value of $12.50 a share. Under the first method and at the this could be UNION SECURITIES , will 1947. 7^1-71 Upon completion of the current offering of preferred stock, out¬ surtax in lowest bracket. standing debt and capitalization / This would not entirely elimi¬ Westinghouse Electric will nate the corporate tax upon that of 6. Volume 164 Number 4550 THE COMMERCIAL & FINANCIAL CHRONICLE Federal Vice-President, American Federation of Labor Labor leader supports taxation of corporations on ground they are accorded special privileges and shareholders buy stocks on basis ' ceeds. double taxation tutes \ result in lower prices or - higher wages. Says volume of production % together with technological and managerial improvement will bene>4 fit corporations and encourage business enterprise more than lower Holds corporation taxes. : that elimination of corporate taxes will : ; or profits are higher despite taxes. > - pect the exemp- share fair 4 For v of a after all, rally re, direct individuals corporations, because they apply directly to those making a share- ments are cor- rising costs mands for profit. Our ..WKBKm Matthew Woll ;• , only most just and fair that the corporations should, in return, pay taxes in exchange for the many privileges they enjoy. 7 'Shareholders, who might bene¬ removal -of . » State i r « and local govern¬ faced with steadily and their expanded services. de¬ These longer be paid for by taxa¬ tion on real property, and those can no / It is fit from the of and their benefits. therefore, incomes on net porations enjoy many privileges and ■ prefer, taxes separate persons, distinguished from holders, tries to the price be soon bid by untaxed competitors eager for business.;; Workers quite natu¬ legal As persons. producer who forced back into line when under¬ corpo-;« rations taxed shift his tax by raising of his products, may the taxes, corpora¬ tion taxes, likewise have no just reason to expect such benefits. amounted to $23 afford education areas... and welfare, " to ' the whose: wealth \ has been ^ v ! Complete removal of such poration taxes would leave • cor¬ business savings. Thus, in spite of enormously greater taxation, corporations still managed to accumulate more than twice .as.-much in profits states and solely upon now localities that depend real estate taxes in serious difficulties. are v' It is not unreasonable to expect that a and local borne part of the burden of State by government should corporations that be do business within their boundaries. State and local taxation This of such vicious exploitation. v who advocate the aboli¬ . Those tion of taxation such, that argue lower on . corporations it will as permit prices, higher wages and greater dividends, all of which, it is argued, will contribute to the health and prosperity of the econ¬ omy and result in adequate tax ; revenue from sources. I - *■ more in money 1943 than as costs, higher lower and wages all are that much higher more de¬ pendent upon volume production and technological and managerial improvement than they policy. • • . A few what I figures are on tax > will , , / illustrate In 1939, all corpo¬ in the > United States a total of $5 mean. figures, which I submit, conclusively that high taxa¬ tion is no bar to the accumulation of high profits and for reinvestment. . high reserves , It cannot be said too often that the basis of -low prices is high production. mass America's genius production has made a at seem¬ ing paradox come true. It has long been the boast of our busi¬ nessmen i that they could pay higher wages and produce better goods at lower prices. " Thus, it the has not , been , , true * in past that increases ■, suggest American genius for have shown—in the figures quoted above—that high corporate taxation need not be that any I barrier to the accumulation of reserves is for reinvestment. likelihood no resulted creases in in wages automatic in¬ in prices. On the con¬ trary, while American wages are far above those dustrial;! nation, ucts have of other in¬ American prod¬ declined any in price over the years. that corporate taxes will as .. be There peactime all at as the wartime taxes and the probable therefore, seem as they were in wartime. as However, this a problein over which I refuse to lose much sleep. The ability of our economy to fi¬ nance ment expansion and is new invest¬ intact. ;If what is hurt by the continuation of corporation taxes is the ability of corporations to finance their expansions out of their own funds, I say that there is no great loss. Internal financ¬ ing will certainly tend to promote ever-greater concentration ; of power in the, hands of a few cor¬ porations and of the men who manage them. Forcing them to go to the community to seek funds for expansion is one way of help¬ ing diversify control and of mak¬ ing it possible for new enterprises to enter the field. Moreover, loopholes in has been individual personal of one our that to the avoid income reinvests largest income tax laws which allows taxes when poration in which he What is true of wages is equally true of taxes as a factor in cost. ' chances of accumulation of suffi¬ they profits These have would profits, non-corporate I the cient reserves, high prove unfairly and un¬ worthily benefiting from the fruits production. wartime taxes, they put away for corporate reserves and expansion ject to-the complete and merciless exploitation of t their resources, day, 'unjustly, in mass high had accumulated in 1939 before taxes. whiie Northern capital would en¬ joy a veritable shareholders' holi¬ cither making a specious plear—or admitting that they have lost their faith taxation in 1943 than they had in 1939. In spite of enormously Southern and Western states sub¬ the after . : tionfrom pay¬ ment of their taxes of redressing that situ¬ ation.;; They can help make it possible for the Federal Govern¬ ment to. return, by means of sup¬ plemental aid, funds for health, drawn upon. V To the question, "Should corporations be taxed as such?"—my reply is an emphatic affirmative. Corporations have no right in ■ equity to ex..<§>■ •—1 ——. ! '. - Corporation one means of existing taxes and do not lose.; Denies corporation tax consti- c; taxes, billion, 671 million. After taxes, this came to $9 billion, 842 mil¬ prises are draining away their lion, which was divided into $4 natural resources without return¬ billion, 348 million for dividends ing an adequate share of the pro¬ and $5 billion, 494 million for By MATTHEW WOLL* Second 3025 the owns the upon cor¬ stock its earnings instead of them. This makes many in the top brackets of the income tax largely tax-free and enables them to get indefnitely distributing Relatively high taxes, when should, of course, be at a consider¬ rations spread over a large mass produc¬ ably lower rate than the Federal earned billion, 460 tion, need not add Their liablity is limited—their fa¬ materially to corporation taxes, but certainly million dollars in profits before the price of the product. When rich for an indefinite period. -Up cilities " for profit-making and should be at a level that Federal taxes. After Federal businessmen permits cry, as they have in to this time, however, I have operation are immensely ex¬ the State and local taxes had been governmental deducted, they had the past year, that they cannot heard no suggestion from those panded through the corporation. units to provide adequate serv¬ a total of $4 billion 228 million— continue the traditional policy of advocating repeal of corporation They have no right to expect that ices. which was divided into $3 billion, ever-lower prices with increased profits taxes that an individual's it should escape taxation. 806 million for dividends and From the Southern and $422 wages and a fair contribution to West¬ equity in a corporation's retained Furthermore, most shareholders ern states we have often heard the million for business savings. the operation of the local, State earnings should be taxed as in¬ bought their holdings on the basis complaint that In 1943, the total corporate enterprofits, before *nd national come. v : of a tax structure as it now exists, community, they are .:;.v •: They benefit enormously from the V institution the of corporation. ■ including substantial a " corporate profits. taxes were stock owners tax on If corporation to be abolished, these would suddenly and without any effort on their part, be the beneficiaries of a consider¬ able increase in stock values. There is no basis in equity giving them this windfall. - • Some that the argue This is under no circumstances be construed as an offering of these securities for sale, or as an offer to buy, or solicitation of an offer to buyy any of such securities. The offer is made only by means of the Prospectus. December 9,1946 „ corpora¬ tion of the This, that result and/or higher wages, income tax to their - 399,860 Shares in Gulf Oil Corporation in effect, is an admission corporations are now passing the on will tax lower prices ^ that the elimina¬ say as a for tion tax constitutes double taxa¬ tion; others to cus¬ in the form of higher prices or as lower wages to their employees. If they are doing this, the double taxation argument has no validity, since corporate prof¬ tomers its after taxes would be the (Par Value $25) they would have been without as . Capital Stock same corporation tax. a Actually, ;> of ■"'■■■ there course, 77 7:77 ; is considerable- difference among both businessmen and students of . ■ •'■•'■ -yy-iyf Price $63 per share ; to the impact of cor¬ poration taxes. However, organ¬ ized labor has in the past sup¬ ported the view that the net in¬ taxation, tax come ; as is the economic and most tax,, as equitable applied to both individuals and corporations. These taxes, together with inheri¬ tance taxes, are to as correctly referred people are for¬ because they are Copies of the Prospectus may be obtained from any of the several underwriters listed in the Prospectus, including the undersigned, only in States in which such underwriters are qualify fied to act as dealers in securities and in which such Prospectus may legally be distributed.} taxes which to tunate pay, applied only on the basis of abil¬ ity to pay. direct between N9W, and The First Boston in¬ direct taxation, workers can make only one choice. If they; >7S?% to. believe that all taxes were shifted the to no consumer, Blyth & Co., Inc.' point in even considering the type of taxes to levy. r However, competitive enterprise system, * Abstract of a talk by Mr. Woll before the Annual Symposium of Institute, New York City, Dec. 6, 1946. The complete edited text will subsequently be pub¬ the Tax lished in a Co. Eastman, Dillon & Co. there would be Goldman, Sachs & Co.' volume issued by the ..Institute..'•,r ».4 , •77. Harriman Ripley & Co.' i Hemphill, Noyes & Co. Incorporated workers do understand that under our Clark, Dodge Corporation Kidder, Peabody & Co.' Stone & Webster Securities Corporation V Merrill Lynch, Pierce, Fenner & Beane Union Securities Corporation . 3026 THE COMMERCIAL & FINANCIAL CHRONICLE : ' of; the ^ NAM panel participants advocate union members' • discretion in clues-paying. ■ Senator Ball said' ' , The right to stop .paying union dues is the only veto power left fact u rers spoke as a member of a without questions the Con- Mr. Shop the .com¬ pulsory payment of contributions by workers, the Senator said: "There is tween* a vast • Industry New York Whitney, .Smethurst, in answer -to War¬ Vice-President of Sonnd economic condition tions of international .union i difference be¬ paying trade jority for bargaining purposes.'' To the. question of the legality associations, if. they prohibited by law,", are r announcement is The offer to tell or a solicitattan of an offer Po inty these securitiesw offering is made only fry the Prospectus. '' T"; . * ■ I nt A . , e m know problems o r or-;; g a f o to the and transmitting information aad in4 terpretirigpolicy] in respect to all officials in Viri n a sources of the personnel in times con¬ with of crisis, and which make It imV financial and .possible 'to handle most, matters e ijc in a matters, t h ie in more e c o n o m "Ch ro n iclje" correspondent has prepared Herbert M. Bratter the followirig on the " ^: '' - • notes] ' ^ State, Department" arid ^Ahny ysetUp here. " ^ y -; ; bassies confronting Ameir- an and Legations. mission The eco¬ find amount of that time In a considerable a effort and is advisory or occupying forces. Vienna, for instance, the econ¬ Series Eleanor Lansing Dulles, author of "The and other wellknown- books, who also came here last year from the Department in Washington. Mrs. Dulles was on the American, staffy at Brettori French expert, Franc" Woods in 1944 and subsequently Foreign Policy Assodabulletin in support of that wrote tion a program; . financial, eco¬ Foreign Office officials North Carolina; and Heller, a commercial specialist who lived-in Austria be¬ versity Miss of Ruth the fore war and about the ex¬ assistance from y As the American Army sees.'it, U; S. ,government, a4 in the the United States is committed to ]; the establishment of an indeperid-r % case of the loan application to the Export-Import Bank, their appli¬ ont and democratic Austria. ;Part]| cation is forwarded through the of that task is the establishment U. S. Legation. Various inquiries of a sound basis for Austrian eqp* % with regard to international or¬ nomic life. This In turn jnvolyes the , A. G. Becker & Co. incorporated Xee Higginson Corporation ganizations, conferences planned Washington, etc., naturally a from of come to the American diplomatic White, Weld & Co. Obviously December 10,1946 go studies of reports matters series a on economic through. these . channels in much the same way as they would in more normal times. It is some- This advertisement appears of record only and is not, and is under no circumstances to be construed to be, an offering of this Commoh Stock for sale or a solicitation of an offer to buy any of such StockfThe offering is made only by the Prospectus. concern Austria. American conditions an offering to buy any of governmental budgets;, its ; of such Stock. ' V' circumstances #0 be..construed solicitation .of an iOffer as a 4 The offering is made only by the Prospectus. DOBBS HOUSES, INC *■ "V.-"* 1 •' 7' w. -r •, . ■■.. ' .v■ ■ .. *.' /• • "• '• '-Viv !7. r.V'"? *; :* Common Stock t (Parlvalue $1.00) •' i /Price $16 per v J" '•i- .-V ■ /•/ - A:.' *• •. ■ - i .• /'-• . ■_ .; ^ Cqpies of the PTOSpectus may •' Share ■*: vjj-- • ,v be ©btamed-tena tthe imdersigned, '■/ . /, j ':y. t '. ^1 ,]Copies q/ 41ie JPyospectibS mwy he Van Alstyne, Noel & Johnston; Lemon & Co. December 2, ■ 1946. v./ Co. Oowell, Weedon & Co. .:>•/../ •, ^ n^^nmeunteai^ueemmm^uaeoomuniumuememoemtmameaemo^oeuamauanmemuum^someim^i^m^^maiemenmiem^mo^oUomamiaUaU^^^nu^^^to^^^oeou^aUau^uiLeeueaaimmoiiimtoum^i^^oti^iuo^^mSSomitml^ooo^i Emanuel, December 1946. in¬ iinan-1 (ContinuedPnlpage 75,000 Shares . , volves a .far-reaching, conc^ii with the currency of Austria; jts this Stock for. sale or 200,000 Shares Seaboard Finance Company in participation,-in the supervision of Austrian ernmental activity therefore This advertisement is not and is under no as with tirn establishment financial sound gov¬ mission. and Common Stock Mrs. financial wishes to. request . Lynch, Pierce, Fenner & Beane ters;;;;y:;|;?yy.:;;y:y^ approach the economists both with cellence of whose recent reports respect to policy matters affecting from Vienna the writer heard in their relationships with the U* £j>., Washington. I and also with regard to the more general .^Council J and / Ministry The Army's Financial Task in Austria: Its Organization for) S problems. ^ , , ; .Carrying Them Out f , ]" When the Austrian Government Copies of the Prospectus may he obtained only in States in which such Prospectus may legally he distributed and only from such ofthe undersigned andother dealersas are registered dealers in suchStates. ' Merrill State., Department's economic staff here at this wfiting are: Mr. Sidney Mellon who was brought here from the De? ; partment in Washington to wprk on economic and political raat-i are Austrian, nomic and - , the y > , ■ ■L: ( V Mr. Carlisle Mclver, a Treasury long and frequent¬ Department economist who was ly arduous and also meetings of at the Potsdam conference and the Financial Division of. Military who is especially interested .- in Government. They participate transport matters; iy £> y with "the military authorities in Mr.y Fred 'Bunting, a former consultation- with Austrian gov¬ economics professor from the Uni- B ings which ernmental agencies and they also deal directly with these same Glore, Forgan & Co. On ■ rputlne fashion even quiet times. ]"• ; ;/ f purely omists attend, quadripartite meet¬ (Par Value $100 per share) Company - four, Various complications arise from this situation to tax the 're V- cerned bodies. William Blair & with five governments xather than the one, and are charged, with1 nization American nomic experts attached to such Company 50,000 Cumulative Preferred Shares, t to | times, stated that the rAmerican Tic an representStives in Vienna; deal e r e s readers spent in consultation work with the Carson Pirie Scott & v I >'*' ,> ^ ican Mission in an occupied area is different in many respects from that carried on by the usual Em¬ not an \ , . The work This ,4 VIENNA, AUSTRIA—In view of the fact that Austria is on the^ Russian-American politico-economic front line and in the belief that -r y,it will-be -of^ :yy;:'■ y;'W.: y:: 1be not . basis for Austria's future inde- seen as pendence and democracy. ganizafions. be>" >said:; ;: "In general^ field of activ¬ ity would be quite, similar to that of" legitimate ^ ? trade associations. Anything an international labor 7'=and Mr. iP«n- dall formed the panel, with . h';: union dues, - and paying to some kind of a ytrdst fund1. It is entirely different frdm -City Dec. 5. union does which is a concerted Senator Jo¬ making a man stay in a union |as* effort to impose a uniform costseph H. Rail, a condition of Working. And fib Raymond S. will take care of the bad leader¬ fixing item which is reflected in :S m e t hurst, ship in the union by dropping out iher, price ■ just; as' ;much* vaffeets if " he doesnt like it, and pretty NAM counsel, competition, as other activities by soon that union won't have a ma¬ in 'v." .. HERBERT M. BRATTER question, "What should; the func¬ nation of the closed gressfof Amer¬ ican ren constitutional." question"; ad¬ a he would Include in his condem¬ at. ■- to Senator Bali: asking1 if panel answer¬ ing Randall answer dressed to added, "If outlaw¬ ' " y "Chronicle" correspondent describes financial and economic probylems confronting Ainerican ciriiian and military officials in Vienna. are ing; yellow dog contracts is con¬ stitutional, then outlawing tihe closed' shop contract is clearly I- labor relations from the floor Clarence -B. 1 states authority to act in that field," But he of the National Associa—: : ] assumed arid that therefore the James B. Clow & Sons, acting as moderator.■';; V-i;"; ^ |' In ! Thursday,. December 12, 194? , Ooi Economic Operations in Austria jurisdic¬ tion, has legalized the closed sh6pj has ernment , Mr. Randall, a national Vice-President tion of Manu-«> " * appeal is based jon the grounds that the Federal Gov¬ his disapproval of bad leader¬ ship and the way in which the officers of his union autocratically administer its affairs, Clarence B. Randall, Vice-President of Inland Steel Co., declared today. . . , *■ ' r • prohibiting "I think the to the labor union member to express . amendments shops in three states in the elections, and the appeal to the Supreme Court in this regard, closed last . .;./„y./ ; vMaihed fwm itUe .iMidCTsifiWMtd . [Volume 164 Number. 4550 Public More Conscious. //„ /• . ! By ALFRED G. BUEHLER* ■; ^ > //; Professor of Public Finance, University of Pennsylvania - Prof. Buehler maintains taxation is; not 7/7/ sufficiently selective tool /*f or rooting out socially undesirable monopolies, but holds taxation should not encourage monopoly by discouraging competition. Ad- I vocates preferential taxation for small business. ' i I •/. « f W V' w - — *;* « ♦ "i—*' #r. a r e r e q u e n tly ./ proposed as curbs y •• ■ j j')'^ iiipir ' a-'I'-J: 'lr saving A. E. 1—^1 -p-/ —Y tteii upon excess profits ./tax /presents - against small business shbuld be removed.: ' '/'////77/ ; com- how- i.e v e r, , / ■ tion and pliance, *' i/ ..••• i, '•*(.>'■ •' ^its have Dr. Alfred G. Buehler iiiques for the Valuation of busi¬ ness investments for the or meas¬ urement of normal rates of return such investments in various in- on /dustries • and among/individual - and / Gordon Municipal Bond. Cincinnati of : at Dealers the "an4 serve on the Board of Directors: J. hot know: how do measure excess Company; Harry O'Brien, of Katz aind r CBtjep;,' Clair \ S. bjf Moreover, not all* monopolies i . enjoy excessive profits, and /" cessful snail concerns may, for if they survive the hazards of > /:/ motion and development. • Graham, of Middendorf & Clair S. Hall & suc- Company. 7/://|7/: a /time,.obtain high rates of return excess-profits tax is likely to penalize small enterprises and to ; reward monopolistic concerns .//which are favorably situated and escape with little: or no excess-* Henry C. Dick Dies 1 pro- Hence • - : Henry C. Dick,/Vice-President of Frederic H. Hatch an t half. a Commerce, now / ".... ; number over of re¬ admitted to & New York City, members of the Co., Wall Street, New York & Co., 63 City; died at his home at the age of 61. Dick- had firm for Grimm ; & Co.,. 44 Wall Street, New York Stock return for- the Wprk/^ like." extra /and fashion, very -cpnse^ suffers. In high taxes have the effect of discouraging;venture capital necessary for the develop¬ ment: of those assets which/have aj relatively high rate of depletion, Arscott urged that be given to turn- announced them of the members of association Eric the Exchange, have G. with Mellgren and Noel Eddy as registered represen¬ tatives, and D. Kingsley Waldron as a member of their partment. ; Mr. /■"'/. y;( Mellgren Henry B. Gersten v- Trading De¬ /':7-^'/-///':/.// formerly: was partner of W. J. Banigan & a Co. New York Stock Gersten //less there arbitrage department. Ppme^^/taxea which: have ihg / effect: on- Mr. y business and; pro;y . . that | Mr. Arscott pointed out dne dislocation in a any jpart of the economy causes' a Wave of disorganization through¬ out the entire system. "I think it tamely to point out," hersaid, "that (Jhapges in rates/of pay for-cer^ tjainj groups do little givej these ;beeri /with /the1; Hatch jhand over where he • over with W. J. more/than - in England; trader Slso. associated work/ he war for about" 12 to was years a ;'with Gruntal&, Co., Lehman Brothers, and A» G, Bepker & Go:, Inc, Geyer & Co. Holds Annual Cocktail Party business here and in -Canada several* years, hospitalized A U. for Marine S. of World. War I, he was in the late war fol¬ lowing injuries received-as one of volunteers/who the the boats Vor the British . manned a/ Geyer Street, & cocktail party at of the on Dec. able \ It Dun- f • the New & Co., City, 120 Broadway, New on Jan. 1, 1947. ^er }£ iwiU. &^y byjfie;£rQSpertu$*. axe socially /undesirable/ Even | then, shbuld not" other regulatory business will not be necessary. : Par Value $100 Stock, Series B Per Share erential rates should be provided smaller income corppra- >; ior the /1 tions. ////;/,;//// J / The loss carry-forward /should -/he extended to seven would: equalize ; the years/ This taxation of (Plus accrued dividends) .with 7 fluctuating• / and stable incomes and remove one type of tax discrimination that frequently prevails to the disad¬ vantage of small business.// • • / / concerns ? v ■:; ■ i - In conclusion, - taxation is not selective tool for socially undesirable r Regulation by the IFederal Trade Commission, other regulatory bodies, and the courts, /imperfect as it is, is more prom- /a . . sufficiently ■ noting out monopolies, y writers nanied in the Prospectus • i I .*Abstracted < from < a • talk by Prof. Buehler at the Annual Sym¬ posium of the Tax Institute; Nevr York City, Dec. 6, 1946. The com¬ plete edited text will subsequently be published in a volume issued by the Institute. af i-,f - . * " v, .... . .. . ' .. *.« ; .7.., December 12, 1946, :/-/ ...''"'.7-.., •v'«* •*. Exchange, firm of Abra¬ ham on holding companies intercorporate dividends and // consolidated returns—are not jus¬ tified unless all holding companies (However, if the corporate income | tax rate is high, as it now is, pref¬ Admit the Stock Exchange The taxes 3.80% Cumulative Preferred [ partnership in — / / If taxation is moderate : and ;/ equitable, the exemption of small to Stock York /labor, measures be applied to eliminate / holding companies completely?/ / party heldl will be admitted to • - Club -Alexander Abraham, member of In general, and 'industry Would gain from the elimination of uneconomic tariffs that benefit monopolies. / /•r J /'v', < a most enjoy¬ the Abraham & Co. - un** Athletic was a "repeat" of Wall held the Roof Garden Downtown 10. 67 City, last year,, J York ThlsiadheftwbtcnPis ml\iiCd is oh-iiS & Mlitildtiot #f\ MofjcrjiQ h.uy'myMswfc secutilks* ■The. Inc., Co., New -York tages to be gained. »consumers, firm's . ■//. Mr.: Eddy, lately, of Cohu & Torrey, has .been in the security veteran k supply was Department.: /: Prior entering the available: educated and Banigan & Co. in their groups greater com/ 30 was received/Ms' business training/ / 1/"/ /Y Mr; W&ldroh because of the i nterdepend- Trading ebce of all branches of industry disturbance/or . and financial | in 'discussing production /and wages, Sweden, he hamper/ Sweden;/ Germany clear social advan¬ are Mr. Exchange. is manager of the regulation //cf chain "store methods of' com■7/ petition";' <!/■// 'y/;/y^7/// /•/f; /^Tariffs 7to/Wfture monopolies economically indefensible, Street, Waldron to Staff In curbing the chain stores. They tend .to raise prices for consumers /•Who patronize the chains. They are Wall 1 Mellgren, Eddy and not appear to have been effective not suitable for the in Hettleman Grimm Co. Adds lbwer. net > are Jan. 2 will on partnership cus¬ million and a Henry B. Gersten be .////;/•//•/- //::/•• Citv. years as a bond than those groups not included iq //■ profits tax.' Y-•/ Y/Yyy//7//!//• specialist. Previously / he had pay Increases. And an overall in¬ //* The antichain-store taxes are partly political and * partly eco- managed his own bond trading crease, assuming the same rate of / nomic in their origins. They do firm in Wall Street for 10 years. production, ultimately completes 71 tomers is the New York meeting held /Nov.. 21,19461;,/ action in general. Gordon / satisfactory growth in that Partner in Helfleman which the business of the bank and ported : the of / encountered.; The point is, we do y., a 31 Henry B. Gersten to Be . nttal profits... indicated Oct. ahd/was Associated "V^ith: that firni Reis, Jr., of Seasongood & Mayer, Pjver or/^seleqtive sales taxes to for I the/past :20 years. //A native was elected Secretary-Treasurer ajlow a modification of direct inof /ized definitions of excess profits /; The following were" elected to through such devices as Section 722 are indicative of-the problems balance sheet for. the a / heavily graduated ihcome.faxes- allow a -relatively consideration Chairman, presented fiscal, year/ended when he. .added. Mr. period individual- and elected Group and risk taking, productive activity, H. Diehl of the Provident Savings Bank / & -Trust 7 Company was establishments. The resort to base earnings investment, quently 7 production CINCINNATI, OHIO —Clifford not tech- suitable ] . . ■ /'yet/; devised , ' Bond Dealers Elect in burdens. //We ..Vk'?«..%|t*4'iXi^X'h v deter¬ Arscott, C.B.E., President of minish Municipal 1 jnahy/inequalities ; */'• i Cincinnati / and •• - f of tax¬ a t6 put forth extra, effort to achieve maximum production tends to di¬ taxation .. - / burden become he emphasized, fall upon the pub¬ lic, (whether they are levied on goods/services or earnings. The hatural - incentive of 'the worker ' of administra- Conscious on/Dec.:'10 at the; annual rheetihg of stockholders. Taxes, , .( great practical difficulties more 7 / /;'/ Wedd, Vice-President and Manager of the bank, said ' n ising in checking socially / detri-r mental monopolies./ On the other hand, taxation shbuld hot encour¬ age monopoly or discourage/com¬ petition. Tariffs that foster un¬ economic monopolies should be withdrawn pnd discriminations in ./ monopoly. The General the Canadian -Bank of //—- .. is the. continued rent V to "-Y-v-V. . public ation which has antichain-store taxes/protective tariffs, holding companies, and preferential tax treatment of small on n* business -/ 'Alt -Y - 'V of Excess-profits.' taxes, taxes ftrf. ! : a A The cycle with everyone back in relative position." S. M. Of Tax Borden ; the his , md<dhenmimsyl^0yi^^t^eses€cmtiesinsneh^xie^^^:'" . '■ ; Thursday, December 12,-1946 FINANCIAL! CHRONICLE THE COMMERCIAL & 3023 Or take it the other way around: Suppose that the income .tax - re¬ duces the income "aVail&ble to the By W. L. HEARNE* • • United States Steel Corporation Tax Supervisor, ', ' ' is a business enter¬ last be discriminatingly discerned and do with the effect the other and corporations, ing many kind of taxes to individuals. With the latter superficially seem that we are not concerned here, since this Forum is supposed to be about business enterprise. Nevertheless upon it is tax may an pect much address by could, spend of time lot a production — that is whether it is a tax that is passed City, Dec. 6, 1946. The on to customers, or whether it is complete edited text will subse¬ a tax that is levied on the owners quently be published in a volume issued by the Institute. ; ;Y r—and sticks. My own opinion is 2% ; costs which are to make The presence simply that;it is harder for busi¬ to ends make - terms of ; meet, or today's topic, it is couragement Yto business prise,".'; v Y Y YY V. To mature V V-V/. - ;,, $2,000,000 on • loss that a luck" have can than consequence to ~ is your other no restrain ' unconditionally guaranteed a in dis¬ enter-r Y: ■; who terprises do when of they the ish that contend profits substantial where and must does not dimin¬ appear incentives answer of enterprise enterprise is not superficially ob¬ vious. One reason since ever for this is that corporate rates above 20% have been in effect, there has been large backlog of demand a resulting reduced from the war and the level of production of the war. lot of goods during durable consumers As result there a ,.YU'• i "vy r * f ^ (Y Y< 5V * Y'./ s ^ \i *• Y; ( \ / h y;' ' . ■ . to > even whatever make - minimizing have to the in make them f'r Y: '* (' , ; { \ Y "Y'H * ^ J± " ( 1951 1.70% 1955 1949 1.40 1952 1.80 1956 2.20 1950 1.55 1953 1.95 1957 2.25 1954 2.05 < ,?;Y Y a ■*' ' - ' Y : Y7 v f a ^ < } ' !' 4 ^: -*y ' . Aren't sick. are today's date. But that doesn't to prove ' \ ' . . ^ the HALLGARTEN & CO. HORNBLOWER A WEEKS Y; R. W. PRESSPRICH A CO. PHELPS, FENN &, CO. ? OTIS & CO. YY r (INCORPORATED) £. H. ROLLINS & SONS . INCORPORATED L. F. ROTHSCHILD A CO. • ; . - - GREGORY A SON ■' , THE incorporatedf- . FIRST OF MICHIGAN CORPORATION THE MILWAUKEE , V:- 1 Y ^ YY'' ;■:.'Y; " ■ , THE FIRST CLEVELAND CORPORATION McMASTER HUTCHINSON A CO. ALFRED O'GARA A CO. INCORPORATED dividends (January 1 and July 1) payable in New York City. Definitive Certificates, with dividend warrants attached, in the denomination of $1,000, registerable as to par value. Not redeemable prior to maturity. These Certificates are offered when, as and if received by us. It is expected that Certificates in temporary or definitive form will be ready for delivery at the office of Halsey, Stuart & Co. Inc., 35 Wall St., New York 5, N. Y. oapr about January 6, 1947. The information contained herein has been carefully compiled from sources considered reliable and, while not guaranteed as to completeness or accuracy/ we believe it to be correct as i business of this date. of .. can Business new firms starting; of new successfully growing; of old firms falling behind in the com¬ petitive race and going out of the picture; of little firms becoming big, and big and little firms going bust. In short, business enterprise in America is a population of business enerprises in all stages of birth, youth, growth, middle-age, old-age, and decrepitude. For the population to remain healthy and productive we must have birth and growth. That is where the tax cost works its hidden effect. The income tax cost mounts up with increased \ in volume • to build a competitively necessary sound enterprise. Earl ; . Banting Pres. Of Nat'l Ass'n of Mrs. Earl Bunting, President of the ' Winchester, .Va,y has been elected f Natiopal Associa^ |§ tipn ;of Manu-;;; • : a funds for of source of concentrated squeeze Con¬ annual of Amer¬ ican Industry gress Wal- the at nifirifim rrmrarr - dorf-Astoria. Y/ Mr. Bunting succeeds Rob-v : ' WaSOn/ ^ ert B. President YYY; Y ; Y Earl Bunting V of Manning/ Maxwell & Moore, of New York. ; ; > ; ; to.hisl:hew yiMr; Bunting brings ; heading the NAl$,;jriprf than 30 years of business, expqr^ task of ence. > . Berryville, I1L, ^ on July 29,1893, and was educated , in public and private schools. He^^ borri was 1913 From ^ 1915, he was a / to partner in the. firm of Bunting & Block, architects ahd engineers, LeGrande, Ore. Forif the next 15*' years—until 1930—he was Vice- / ; President and director of Schwab Brothers Printing and Lfithograph- ing Company of Portland.YyY/Y' In 1922, he formed'the* firm of Earl Bunting & Associates, indus-Y marketing consultants, of Portland, which was succeeded in 1931 by the firm > of Bunting, Durkee & Leake, of Portland and Washington, D. C. " engineers ; and f; Iri 1934 he organized Earl Bunt- Y ing & Co., industrial engineers, of Washington, and in subsequent years served as consulting direc- / tor and officer of numerous con- Y various in cerns lines of manu- including activity, facturing Textile the > Corp., and its. companies, the Ware Manufacturing Co., and Fleitman , associated Valley E-Z Mills. •; - While retaining his came Corp. in partnership." Washington firm, the in a in 1941. he be¬ director of the O'Sullivan / 1938 and He also is its President Y director of a the Victor Products Corp., Torvic Laboratories, re-investment^ growth. The tax has the a the 51st with can hundred-or-more-fold in¬ crease in the tax cost. The tax is levied on the source not only of dividends to owners but on the breed internal ' institution be everlasting. firms effect ; enough money left after taxes to finance the expansion deemed trial in America is the continual proc¬ points To be dated January4-, 1947. Par value and semi-annual December 12, 1946. shprt-sightedness of the ones great rapidity once an enterprise passes its "break-even" point on the way up. A few percentage THOMAS A COMPANY 'YYYY'^ Y Y-YY^.p; ' F. S. YANTIS A CO. . , KEBBON, McCORMICK A CO. £OS§ A COMPANY MASON, MORAN A CO. /. , WM. E. POLLOCK A CO., INC. JULIEN COLLINS A COMPANY MULLANEY, ILLINOIS COMPANY HAYDEN, MILLER A CO. COMPANY that taxes do not discourage It only proves who assert that doctrine. No £ (INCORPORATED) because there was or not business enterprise. ess : doing whatever is competi¬ claim to EQUITABLE SECURITIES CORPORATION existing corporations tively necessary and financially possible to maintain and expand their markets—in short, to con¬ duct business enterprise, at least HALSEY, STUART A CO. INC. HARRIS, HALL &. COMPANY arid ^mariagers did return for risk Y; the worthwhile not deterred by existing taxes from ^ '■ K ' ^ that truth, 2.15% :V ' > ? be¬ undertaken not owners think not not pect. This kind of enforced enter¬ prise is like taking medicine, jVhich you wouldn't take if you subject to authorization by the Interstate Commerce Commission. is : ''■*) which never enterprises were cause tax-cur¬ presents a loss prospect which is worse than the small profit pros¬ Y, $ /V may be obtained in any State in which this announcement circulatedfrom only such of the undersigned and other dealers as may • which They invest¬ All these circumstances make it 1.20% ■"Y'- the considering them. They are the growths in small enterprises in possible for people to say, and I think with substantially complete 1948 ' didn't. They but got .started can. new of face - competitively obsolete. To become competitively obsolete lawfully offer these securities in such State. - happened not there to be counted. They profits tailed profit prospect in order (Accrued dividends to be added) • ; / /that -existing means whatever fashion they * MATURITIES AND YIELDS Offering Circular existence. in the things that might are President of the encounter, Certificates are to be issued under an Agreement to be dated as of January 1, 1947, which will provide for the issuance of $20,000,0QQ par value amount pfipertifkates to be secured by new standard-gaugep railfoach^t^pmeht ^ co&atot |essN|an p7i2$LQQ0» The have they can, under the circumstances whatever they are, and they have to endure whatever losses they These Issuance and sale of these Certificates are consider sibility of having: the investment undone—that is, of .the investors not ha ving spent their money arid of have * . \ already That is to easy. What we have to O'Sullivan Rubber Corporation of y t'pols. -This of par value and dividends by endorsement Y' s S v the mortar, etc. There is no pos¬ ments $$$<£*%. v corporations: have to dd; the ; best tjbeY 'canYVvitlf. thesituation' jh which they find themselves. They each January 1, 1948 to 1957, inclusive Y Y s , The investors are "stuck''-with the by The New York Central Railroad Company > ' No, we can't conclude that taxes : do not discourage enterprise just by looking at the behavior of en¬ are- a corporations in existence representing an investment in tools and facilities to produce such goods. The money has been sunk in the " tools—in the bricks ' and -v - as to payment new shrinks. to become To be curing people from organizing and con¬ ducting corporate enterprise. This is so simple that I wonder why it is sometimes challenged. Those taxation / prospect of se¬ money for tools also Shrink it and the the tools never having been made. Equipment Trust Certificates v, no production, recovered. ;"r;" (Philadelphia Plan) ■ public to invest additional savings. hard I said that the effect of taxes on Equipment Trust of 1947 • of it will be taken in taxes, wnue if you. make from customers deter New York Central Railroad vYY;-' v>7 . what any of most the enterprise has to offer when it is seeking to persuade the business customers to buy just ; as at the higher price. Price (of which $16,000,000 par value amount are being publicly offered at the yields shown below) • | 7:^ -'Y vestment. constitute because they'died in J the minds of the men who were simply because up $20,000,000 Y^;VY/■: of are be ness and the Y.'; growth through re-in¬ These two together also conducting ' business, source taxing profits does not dis¬ people from initiating or conducting business enterprise, then why not tax them 100%? can¬ of such costs pushing against cus¬ tomer-^resistancemeansY Quite New York . } >• net If prices contribution can one .answer yearly courage king. Producers through the sale of which the cost of cost a of authority only the are Taxes fighting over whether or not it is Mr. Hearne, presented at the An¬ nual Tax Institute Symposium, line buying. Mounting costs require mounting prices to cover them. production. affects which cost a Y . corporations.- There is here, too. The only reason that corporations are organized is in the hope of profit Anything which says to those who organize corporations ; "If you should make a profit a large slice of owners growth. If 38% earningsJ are " taken in 'taxes;'" then 'there is a ' Y maximum of 58% left to provide Y both the dividend incentive for of this simple question: increases not be a cost of distinguished from as owners. the other way. It is the cus¬ not put or may production cus¬ they have costs to cover and ex¬ business enterprise, nor is it necessary to do so because the big tax burden now and in prospect is the Federal tax on income. That We ♦Abstracted from Federal, upon initiated, fi¬ nanced and managed by individany question at all about it being uals for the ultimate purpose of available to tomer who is have time to go into all of them and their ramifying effects fact that all businesses are, a to passed on The customers. do not in the last analysis, is income runs governments. We and local State would it cost of pro¬ duction, we have to remember that no producer is the boss of his they exist today. There are a lot of corporations and they are pay¬ one income an is why: Assuming it is a be cannot earning This individuals. look at corporate taxes as f Let's has to do with the effect of taxes it the Y1: neglected. one has to of taxes upon first The appraised. analysis are also is truth that production there isn't a, cost of cost of tomers as an increase in price, or whether it sticks as a decrease of of them is so obvious as to command immediate and widespread recognition and satisfying customers—who in the acceptance. But that only makes This t whether one it all the more important that they tends through the corporate form. That is the thing which makes it a deterrent to business enterprise ■■fet. There are two ways in which taxes discourage it run to be passed on to cus¬ tomers. But regardless of whether or not the corporate income tax in v great danger, industrial tax expert points out present corporation taxes add to cost of production which cannot always be reflected in prices. Holds that by reducing profits and not compensating for ; business losses, business taxes retard investment and employment. prise. Neither long mostly Contending present tax structure puts our competitive economy ,<t the in that ; v the element of on Hagerstown, and Md., and the. Inc., both of of.! the O'Sullivan Building, Inc., of Bal^ „ ,' Y ,• ^ He has been a director of NAM for one year.. ; Y :• • Y Volume 164 ' Number '4550' f! THE COMMERCIAL & FINANCIAL CHRONICLE tax the distributed part of In the casfe t>f profits dis¬ tributed to high-income stock¬ superficial holders of on examination;;: Uplofr the corporate tax* would continue, thh^tely,/however, it does not they probably took the tax into profits. who seem subject to high individual tax rates, the tax col¬ lector would get- a much bigger By RICHARD GOODE* ■ -j Economist, Division of Tax Research, U. S. Treasury '/ - ; Treasury tax expert, basing his remarks on recent report made by him, interprets ''double taxation11 as "relative over-or under-taxation," points out problems involved in equalizing taxes on corpo¬ rations and individuals/ /r - /./ /// V:'. number a taxation" of the is ent enough should sue and cided " Without minds further on but the is¬ argued out be . of colorful cor¬ ; status; / although going to the same recipients is not taxed. In case dividends than are taxed more other, kinds a stockholder , A - second present of in- charge corporate it and income or thus slows against tax reduces, the system reduces its the is incentive to In large part, I believe, this criticism is actually a complaint against in¬ come taxes in general rather than against the corporate income tax in particular. If, however, corpo¬ of to lower believe, stockhold¬ may not be taxed more heavily than other income recipients. To the extent that the corporate is shifted forward in sub¬ tax higher prices, it is 19% individual rate. no more a "double tax" on mentioned,: also and to the extent that the corporate tax is shifted, it becomes in other financing financing stem from on the effect as / broad so consumption appraised. on though there is ble taxation On the in. the no literal doUr sense. other/hand, , the division of opinion goes so deep that some¬ times the same individual or I shall not attempt to evaluate these charges nor even to state the counter-arguments in favor of group advances arguments that seem conflicting because of incon¬ sistent treatment of the subject of incidence. Without going fully in¬ to the subject, I wish the- present corporate tax. I do want to say that I think that, none of the arguments on- either side levy only to raise the question of shifting of the cor¬ porate tax as a possible limitation ■„ vanced /'"• tion would holders give gains. It is,- of course, impossible to appraise this possibility in quantitative terms. Furthermore, the effect of the corporate tax has probably not been confined to stock prices but probably has spread to all kinds of earning assets. As . corporate shift tax, some potential in¬ probably ' attempted to to bonds The result prices of and other and other Whether one finds ■ pend with cerned ' whether on taxation" a hap¬ pened, the corporate tax was thd of a general decrease in yields of all kinds of earning -as¬ sets rather than merely a tax on the yield of stocks. ; : •> cause tion- with investment incentives it can be accepted uncritically and that, in my opinion, a great deal more analysis needs to be done on the questions raised. For present purposes it is enough to point out should that the of the various proposals for modi¬ in large measure on the actual ex¬ fying the present system/ / v i Co/ 586 /Even if the corporate tax is not California Street, members of tfije shifted to commodity: prices or San Francisco Stock rate profits are taxed more heavi¬ ly than other kinds of income, the corporate tax may be especially harmful to investment. In connec¬ be noted that the present taxation" / or /"relative "double overtaxation" porate case of profits of is distributed greatest low-income in cor¬ the stockholders and least in the case/of tent ot-double taxation" or; "rela¬ tive--overtaxation"-/of-corporate compared .with ; as other come stockholders. /This because: ^e: progressive is true kinds of income. rates/ of The present relative overtaxa- 5 •ion the: individual income /tax partly; io offset the effect of the corporate r or corporate profits is neither extensive nor might be supposed heavy /as so on the basis of - . be pertinent to the appraisal may Lawyer Partner in Kahn Co. SAN FRANCISCO, is in the * wages, * present stockholders may in many cases largely escape the tax. The basis for this assertion is the familiar with equalizing faxes ent. kinds, of- income, talization * and Now Sole fj | theory of tax capi¬ / SHERMAN, TEXAS—O. J. ;Colamortization. " If wick, Jr. is now sole proprietor; tif present stockholders bought their shares with the expectation that Colwick & Son, Street.■/ // /'/ 127 ; '■ //// rate profits V ' . . the present relative over¬ taxation -of corporate profi s. The first charge-5is/that the present system is/inequitable. The first principle of equity in taxation is X ://• 200,000 shares <o#/as I should prefer to say, *' , e "double^ taxation" of corpo¬ :e /'/'./•/ j/ '///''* ■:/.z /' 2 ; $100 idend from date of issue often held to be to tax all natural persons '/A// ■!/» the with the same rate./ By same income at this "c *u~ D~"-u standard be obtained in any State in which this announcement is circulated from only such of the Unlet- of such.States it is indeed true that stockholders often are „ , /: /. 1 f; J ,/ overtaxed; / At' other times, however, stockhold¬ temporarily undertaxed,cThe rule of equal taxa¬ 'f /:///, tion of equal income is subject to ers are at the many least modification in accordance with principle of. reasonable clas¬ It may be argued in support of the present system that ./AV/:/; sification. differences holders ients of ■/V;v and are a genuine in taxation other stock¬ income recip¬ reasonable reflection differences Stockholders ;ahd v> of the limits of this between others. ? Within I cannot pretend to dispose of this issue. A complete discussion of it would, in my opinion, require a thorough¬ going analysis of the corporate in' • * paper, Abstracted from Estabrook & Co. Harriman /"."iV Ripley & Co. paper ,; Incorporated' Stone & Webster Securities / Kidder, Peabody &. Co. Corporation;: * ■ * • Glore, Forgan & Co; F. S. Moseley & Co. Horn blower /, •/;//:>;Merrill Lynch, Pierce, Fenner & Beane Rhoades & Co. read Hallgarten &. Co. W. C. Langley & Co. .'by Mr. Goode before the Annual Tax Symposium' of the Tax Insti¬ tute, New York City, Dec. 6, 1946. ; ; * The complete edited text sequently be published ume will.sub-. in a volissued- by the Institute. - Weeks ;//; Carl M. Loeb, a The First Boston Corporation U Paine, Webber, Jackson &.C urtis December 12, 1946. A «',-iDiA i."i >' i > '.K, ,-S iv( East /'/. ///•' /, or , .•/ v//*" called partner Proprietorship; on; differ¬ /Several charges have been brought against the present so- a Exchange]t| "double sense CALIF,/- - more con¬ literal . James V. Lawyer is now in Sidney P. Kahn & specific pro¬ . well de¬ eliminating _. the validity of the criticisms against the tax and as a point th£t validity of the case against the present" corporate tax depends profits .high-in¬ on may one assets bid up to some extent, while the fall of the price of stocks was somewhat cushioned. If this were by substituting for "double posal ' acceptable assets. doubtless that the was bonds equalizing taxes on corporate profits and other kinds of income* ;/ /v. / *• be¬ a of r////*; stocks less attractive investment after imposition or increase of the came talking about removal of "double taxation," it seems better to speak 'XX*'' stock¬ present windfall taxation"* sueh colorless terms as "relative overtaxation" or "rela¬ tive undertaxation.'/ Instead of -V on the previous owners of stock, and its unexpected repeal or reduc¬ tax than other income under the control" of the same individuals. It seems to me that discussion would be ad¬ •'/// as tax.; To the extent that they did the corporate tax was trans¬ formed into a one-time bear a«.smaller current Hie* did not rise so, vestors the critical issue of shifting.'. Indeed, to tax Economic and business opinion is divided compared with equity and a and must be discourage the corporate form of doing business. national growth. backward form ers profits. / The present tax system is held to favor debt r or the stockholders than, say, the excises alcoholic beverages are double taxes/on stockholders in distil¬ leries, breweries, and wineries. If on : in charges against the present method of taxing corpora¬ tions, which seem to me somewhat less important than those already Two far-reaching ef¬ a prices workers wages, as many . come even ■r * y- ! distributed to ject to only term the distribution of income Wealth, invest basis profits" re-r V//// tained in corporations controlled f <• V by high-income stockholders; may > on the tax-exempt this |•' I and that other income iV} incOme Mm'i heavily ■ the of place, the emotional tax and its come fects carefully and not de¬ simultaneous imposition of two or V ,' use higher But, 81 cents out of each distributed the corporate tax strikes profits distributed to stockholders subject to individual income tax, either because of low-income * the If the tax is passed for¬ ward to consumers in the form of net tional income. pres¬ not J or corpo¬ tem, 1 that rate tax. the stockholder's funda- ///#/ porate / profits f: and stockholders compares with taxation of other kinds of income and other income recipients. Under the present sys¬ i! Treasury on present so-called "double taxa¬ tion" or "relative overtaxation" of taxes but how the taxation of ' ' cor¬ consumption and saving, on incentives and invest¬ ment, and on employment and na¬ be that the In the second place, the real problem seems to me not to be "double taxation" in the sense -:.ff of ' condemn the mentally revised, /llfi phrases. V>. to in of taxing profits / should be iuily /;ff| believe is unfortunate/ In the first system may I ,n t, ■<!.■.'''' reasons method rate |/;/ ///// the to revenue words r-ciouoie®'- people hearing. It of or of much as they otherwise would profits. This is true have. Present stockholders in mainly because we do not know many cases may have bought with any degree of certainty who their shares at prices and yields actually pays the present corpo¬ that at least in part discounted "the profits distributed to a stockholder subject to a 70% marginal individual rate is net Sees need for thorough-going analysis of on wealth and income distribution, deciding how. much to Probably stock for stocks. prices decreased corporate on dollar of corporate tax is net ad¬ ditional tax in the case of profits of; most | 30% out of each dollar of the porate tax. equity. //. For existing relative overtaxation account in pay , on taxation" ;///, get so much at the Cor¬ level. For example, only not on the present If, did possible at the present stage analysis to set defi¬ economic nite limits to the actual extent of individual.level* if he additional tax ///■' //// ///I/ the effects of corporate income tax "double '/••■'••r'l&v content Jl cut, at porate , consumption and Savings, on incentives and investment, and employment and national income. Denies relative overtaxation of corporate profits is as heavy as is generally claimed, r. : ' f"' I | are /■ [ | THE COMMERCIAL & 3030 Investment Bankers Association of America The International Trust Company, Pennsylvania Glover & Mac- Gregor, Inc.', Pittsburgh. V / j Membership Grows Committee of The Membership the Association, headed by James reported, as Aug. 31, * total members of' all M. Dain, as Chairman, of classes 701, compared with 059 as of hostilities: cessation the after year follows:, of As of : Class I 54 Class II .~Y-- Association Has Surplus of Aug. 31, 87 Class C Inactive v ■ —281; 274 — — 17 _L —— •■' •'■•v;':r > 'f surplus for largest the treas¬ had and it the past year is Association has '659/ located have an increase - of these find will V, One of the problems the due Convention was the U method was buy, any not booklets Commitment ' Question Stand-By the do | - with which concerned of - handling commitments of un¬ derwriters. A special Committee, of which:, Eugene "P. Barry of "stand-by" ' of This announcement is neither an offer to sell, nor a solicitation of offers' to 12 advantage of organized especially useful. ever ^annual; dues which cities in the courses cation schedules which resulted in Registered branch offices_683 com¬ of booklets -when these of set banking business. Member houses principally to changes made in the dues classifi¬ was the completed,will constitute *. the most comprehensive and authori¬ tative document dealing with the many phases of the investment During the last fiscal year, which closed on Aug. 31, the As¬ sociation's operations showed sur¬ plus figures of $60,700 compared with a surplus of $26,330 for the 1945 fiscal year and $6 200 for the 1944 fiscal year. This substantial 1945 - : feels-that volumes ury. Registered branch offices.771' As the Association's of dition Class B y#1 Porter, reported a prosperous con¬ ___247 Class A : Committee, under Chairmanship of. Irvin L. the • 94 mittee Finance The Class B Class C a apply for reinstatement until August, 1947. mailed to subscribers: -The bers may 31, 1946 ——40 C Class A standard 126-hour course. The: booklet : on "Fundamentals of Investment Banking" published by the Association, is now being '. Aug. completion ceived certificates for of these 11 former Inactive mem¬ classification of the membership for the past two fiscal years was as Chairmen of these shares. The offering is made only by the Prospectus. 150,000 SHARES to time, prior to the expiration of the rights, sell the security being . ($1.00 Par Value) Copies of the Prospectus signed market rate and at to that the going such cover sales through; the purchase of rights, :. a - substantial ;, reduc¬ , tion in the amount the underwriters of the risk to would be " ef¬ fected. Stockholders who ate able to exercise un¬ their rights would have a better opportunity to realize on them by the means of sale of the rights and the pos¬ sibility of a large block of un¬ - subscribed securities ' demoraliz¬ ing the market after the expira¬ tion of ?•; the subscription date would be greatly reduced. This plan differs £ from i the - present method of handling rights in that normally the underwriters will merely stabilize the stock or the rights, or both, and will not ag¬ gressively buy rights for the pur¬ pose of exercising rights and making a distribution of the se¬ curity underwritten prior to the expiration date. To make such ja plan practical, it might be neces¬ sary to change the present method of compensation so that underwriters would have have York. of the this flat a writers apply BLOSSER 8c would be to sell, The offering ,v for: financial sum have the right to much of the gross fee to merchandising the said securities Government , they .y.V'-V'., .r'.y.*'*.- r, the see Racing Association, Inc. - . •; Yh'.TZ v - ,t ■ v.- v'< ; -'I*4--" Iv'"'* ' Industrial Willard, j . ■ 120,000 Shares Common Stock / /' M; & Co., Nev^ M. Dain, Company, Minne¬ ;' 1 Dain apolis. & 4, Municipal Securities—George I#. Martin, Martin, Burns &. Corbett Inc^ Chicago, Public $ §; / Service I . Securities—Ed¬ ward H. York, Jr., Drexel & Co., Philadelphia. Railroad Securities — Percy Ml Stewart, Kuhn, Loeb & Co., Nev$ York, *• Small i ; Business—John Fen- F. nelly, Glore, Forgan & Co., Chi¬ ' cago. State 1 • Robert. $. Mead, Stone & Webster Securities Legislation — Corporation, Chicago. Stock Relations Exchange Clifford Hemphill, —+ Hemphill, Noyes & Co., New York. mtm New York Stock Exchange! Weekly Firm Changes The New York such on changes: ' this as your considered has erts Dec. 19. tinue as -'-'JyT John Mr. warrant. Bankers of use Trust; and a Millikin Mr. of Glover the Exchange Maxwell Mr. will be om con¬ partner in Tucker, An¬ a bership J V M of the " William late will be considered on Dec. 19. Vaughan will act floor broker. W. ' , Mr. individual as an 3 . E. William ; \ - , Nulty retired front partnership in Francis I. du Pont & Co, on Nov. 30.:> > ' n : : ;i-\ Sidney W. Moss withdrew front partnership pro¬ contingent - Vaughan to William N. Vaugham com¬ was Rob? Maxwell will Transfer of the Exchange mem¬ in¬ and White & Case. The plan the by thony & Co. Co. : pany John C. to considered posed by the Bankers Trust Com¬ \ v-^--l. ^ bership of the late Frank C. pro¬ would Exchange Transfer of the Exchange mem¬ basis that a Stock has announced the following firn$ rights the # "Another plan that mittee / , (10^ Par Value) / .v.;'Vi Reynolds A,' Membership —James • J. complications and possible involves . , Securities—Frank / York. violation of Section 9A, 1934 Act. 'Xfcy 60,000 Shares 25$4 Non-Cumulative Preferred Stock ($4.80 Par Value) Citv , . / they objection no of purchase price, in volve • Del- — National Group Chairmen's—Mark C. Elworthy, Elworthy - & -Co., Sam Francisco. \ / * suggested above. However, must be done . up V.1' Securities Pfeffer, ,vV it would not constitute any mark¬ Sunshine Park K. was as principle to adopting the that solicitation of offers to buy, any of these securities. is made only by the Prospectus. ■ pil: nor a , Co., Investment Bank of New York..' it would have to be borne in mind offer Harold — mittee—A. Northey The committee has dis¬ this operation in detail cussed gram an Porter, Th0 of Chicago. ) York. Foreign necessary. in neither L. Foreign > Investment New to* would as have announcement is } ' - First National Bank with the staff of the SEC and December 6, 1946 This Nevfc „ ti""', •' \ Finance—Irvin the stockholders. Then the under¬ of the respective States. STRAUS Amei Taxation—Amyas Kidder, ; Peabody & Co., in¬ services that would not vary with the amount of stock taken up by COMPANY J;:; } ' Federal to justify I the rights and the sufficient unsubscribed RICHTER >■ • Legislation—Walter A* Schmidt, Schmidt, Poole & Co., Philadelphia. • < 1'. mont price "a investors to to.sell obtained SCHERCK, Company,' Chi¬ Federal dealers' discounts. One method of v #7.50 Per Share laws & Colling, cago. security at a price higher than the sub¬ scription price and to pay normal may ities Julien Collins „ H. sale of the underwritten be obtained from only such of the under*!? may legally offer these shares in compliance with the secwr' as . Julien ing market. It is believed that ;if the underwriters are.; permitted accomplishing Price . Education / gub-Com¬ Jon^s, Morgail Stanley & Co., New York. purchase Common Stock J . y — would be in line with the prevail¬ underwritten1" at come Incorporated the the:period of the stand-by, exer-" cise these rights - and from time Stanley,; - Morgan Stanley & the Velvet Freeze, of Conference John ; Clifforti Folger, Folger, Nolan, .Incorpor¬ ated, Washington. ; / v i ) •, v previous. .listed as standing com-* are mittees for the coming year: cedure that would reduce the time already-have re¬ \ Chairmen following ent commitments, with a view to at¬ tempting to develop a new pro¬ and 450 students> This compares Some of them resigned and the with the all time high of 812 memberships of the-others, after due notice, were cancelled. Each members on June 8, 1937. The a Committee The the purpose During the fiscal year endijng $77,000 over those of the pre¬ of the stand-by and at the same vious fiscal year.jv on Aug. 31, last, the Membership Jjj/',f■ J;■ V;, time permit the underwriters t<r Committee recommended and the Training Program in Operation | discharge some- of their commit¬ Board of Governors approved 62 ..Julien H. Collins, on behalf of ments^ reported on various plans to this end, with applicants for membership. The the following the Education Committee, reported loss of 20 members, of which 11 cohclhsiohfy-v *'■V/mv•'?' '■ that the IBA Training Program, were Inactive, resulted in a net / "Of th6 V various plans , which instituted :2Vz years ago,, was now gain of 42 members. Of the 17 in full operation and -successful ,have been studied for improving Inactive members on Sept. (1, the present method of handling classes were being conducted |in 1945, six of them returned to 18 cities, largely with cooperation stand-bys* the one' that appears regular membership during the of universities and Jto- he-they most practical would colleges. Mare year. The' remaining 11 had not than 1,200 students are now i en¬ give the underwriters permission:, resumed business within one year rolled in the association's^ courses to buy rights aggressively during (Continued from first page) Milton G. Hulme, Chair¬ was that had been appointed for of studying the pres¬ method of handling stand-by man, Holds 35th Annual Convention Denver; " Western Company & Shields o .Thursday, December: 12, 194(j FINANCIAL CHRONICLE in Garvin, Bantel & Nov. 30. on .Edward & Laidlaw JV Roesler, partner Co., died on in Nov, 29. His interest in the firm will cease as of Dec. 31. 1 • . / . ' : Johnson of White & Case are here and will Price: $5.00 Per Unit this Consisting of One Share of Preferred Stock and answer Two Shares of Common Stock obtains any timated period Copies of the Prospectus the undersigned may may legally be obtained from the undersigned only by persons to whom offer these securities under applicable securities explain the operation of plan. They approval, that a of the this 812 West Street, Wilmington, Delaware and legal 50 Broadway, New York 4, N. Y„ BO 9-3893 that the counsel December 6,1946 and John H. Valentine Co. a final in the commit-, Winthrop to Admit Davis Robert Winthrop & Co., 20 Ex¬ York City, members of the New York Stock change Place, Exchange, Davis to New. will admit partnership Henry on G. Jan. 1. be effected. "Although practical is ies^- it reduction stand-by committee lieves the first plan John K, Walters & Co., Inc. prepared to SEC ment may laws! are questions. If this plan will receive approval, it matter for be further be¬ suggested is SEC suggests submitted study to before report is rendered." Spencer Trask to Admit., Spencer Trask & Co., 25 Street, New York of the New York Stock will admit Allan partnership on Broad City, members Exchange, C. Eustis, Jr. to Jan. 1. Volume 164 Number 4550 "Our ' Reporter THE COMMERCIAL1 & FINANCIAL CHRONICLE Governments" on This announcement is not an The By JOHN T. CHIPPENDALE, JR. offer to sell or a solicitation of offer to buy these securities* an offering is made only by the Prospectus, ' The . v v improved technical position of the market brought about by the position purchases of dealers,, as well as inaccumulation by institutions, along with the ending of the coal strike, resulted in an up trend in government security prices. Although; there are some adjustments that still have to be made, it is indicated by the market's action that they will not be of major importance and have been rather fully discounted. The temporary ihoney squeeze seems to be in some s vestment . # . . ,y £ First and Refunding Mortgage Bonds, ] ... j . There has been and still is considerable shifting of holdings a decided move into the longer• term, higher coupon obligations going on. The shorter maturities of the 2s are being sold, (largely to the big city institutions)' and the proceeds are going in the 2s of 1952/54, the 2Ms of 1956/5$ or the ZV2s due Sept. 15, 1967/72. . 2/4%' Series due 1981 >* Dated December 1, 1946 • v\':;\ among the deposit banks, with . / £ - , . better tone. i $30,000,000 Philadelphia Electric Company . passing and when the financing of the 15th is out of the way, the money markets will be in for a "breather," ■v.. vzhieh; should enable the commercial banks to regain their equilibrium. This does not mean that these institutions have not been in the market, because they have, and as a result of their buying the ^foank eligibles have been showing a much g . . . v . I measure ; '.•• • |;■ Due December 1,1981 y .. . \ | < • Price 101.35% and accrued interest ... \yC\ The June and December 2s of 1952/54 have come in for some good buying and would no doubt have moved up* more, if it were' not M. for selling by non-bank investors,, which has tended to keep prices on the stable side, The 2 Ms due 1956/59 are still very well liked by most of the commercial banks, with the smaller out-of-town in¬ - The , stitutions the largest buyers. | V However, since, the yield *' , ' • . le obtained in has any State in whichthis announcementcirculated from only such as may lawfully offer these securities in such State. been 1956/59, this has of the 2y2s instead of the 2Ms by the larger inpremiums, .-resulted in buying are may of the undersigned and other dealers ■( on the 2V2% due 1956/58 somewhat better than that available in the 2y4s of stitutions that Prospectus < not too much concerned with HALSEY, STUART & CO. Inc. . | LONG ELIGIBLES j '. pM'i IMPORTANT ' V •: . commercial banks with to the effect that the . BURR &, COMPANY, . . -I- } ; The 2Ms due Sept. 15, 1967/72 being are carefully by practically ^ Tiave : / 'GREGORY &. SON savings deposits, banks i hough there are reports large city accumulated these bonds during periods of price weakness. watched INCORPORATED very all of the commercial banks, because they this issue and will continue to acquire it" have the opportunity and the price is considered INC. R. W. PRESSPRICH &. CO. / HAYDEN, STONE & CO. MULLANEY, ROSS & COMPANY 'b DEMPSEY & COMPANY SWISS AMERICAN CORPORATION ■ > ..... " K*; •. ; December 11,1946 ■>;' v . PHELPS, FENN &. CO. {INCORPORATED) - The longest eligible, the 2%% due Sept. 15, 1967/72, has ,come in for some good investment buying in moderate amounts. This has .b^en done principally by the v OTIS & CO. V: * • ; real interest in a whenever they ■cjlf favorable. . , * . y; Higher operating expenses y their assets into the well as • vj;- the desire to put as more of longer-term obligations, have recently made the ^banks quite conscious of the importance of the longest eligible tax¬ able issue in their scheme of things. It is not expected that there .will* be any concerted rush to pick up the 2y2s due Sept. 15, 1967/72, ;j because the banks are not yet in great need of additional . Although they may have to take small amounts, in an advancing . income. * 5 on de-| clining prices that the big buying will take place. ."..This seems t© •pretty much put a floor under prices of this issue.... As to what level %this -might be is purely a matter of guesswork. f ■ . . . Nevertheless, the opinion seems to be that whenever these bonds can be bought under 105,. they will be accumulated in very large amounts. * . . . 7/ ? • - j PARTIAL EXEMPTS DEPRESSED f: The uncertainty created by all the talk as well as the many | ^proposals for cutting taxes following the November elections, slowed ; ? the' buying of the partially exempts and this in turn stopped the ppward trend in prices of these obligations..... After a period of /r solidation during which some new con-1 lows for the year were made,, in¬ terest has again come into these bonds, which has , , ' _ ' * ^ Of which $1,800,000 principal amount are being pubticLy offered at yields shown below f i - = resulted in "'-M :'s': 1 "\i. lTo'mature. $300,000 ; j • . , £ r The felling i of, and •• porate porate 4. similar .*,»*' Also seems to . ... . , j ; - f ■*7-, - if there is to be near . ; 1948 1.15% 1949 1.3 % 1950 1.50 1951 1,625 The issues.:. I y • likewise been sellers The large insurance to an important hope that there will be to "ultimate investors early in the ' '• 1959, inclusive some of the , i eligible 1.75% 1956 2.125% 1.90 1957 2.15 i 1954 2.00 1958 2.25 71955 2.10 1959 2.30 HARRIS, HALL & COMPANY OTIS & CO. (INCORPORATED) (INCORPORATED) ' . i MM; . 1952 1953 > way. an THE MILWAUKEE COMPANY i new THE FIRST CLEVELAND CORPORATION They are still holding offering of long-term bonds .,. year. . . . . ; HALSEY, STUART & CO. Inc. .. MASON, MORAN & CO. Meetings between the monetary authorities and the heads of these concernsi are sched¬ uled for the early part of January. Because of the arranged JULIEN COLLINS & COMPANY 4 FIRST OF MICHIGAN CORPORATION j McMASTER HUTCHINSON & CO. MULLANEY, ROSS &. COMPANY ALFRED O'GARA & CO. . . . . together, it is indicated that the large units ance fields are quite likely to refrain from after these conferences. „ .,. v 100 to yield 2x/%%. ... WM. E. POLLOCK & CO., INC. THOMAS & COMPANY get- in the - any sizable buying until : i ; • . '■'•v F. S. YANTIS & CO. INCORPORATED savings, and insur¬ It is reported that these same ultimate investors have tried in the past, but without too much success, to convince the monetary authorities of the need for more issues of restricted bonds at : ■ v To be dated January 1, 1947. Principal amount and semi-annual dividends (January 1 and July 1) payable in Chicago. Definitive Certificates in the denomination of $1,000, registerable as to principal amount. Not redeemable prior to maturity These Certificates are offered when, as and if received by us; It is expected that Certificates in temporary or definitive form will be ready for delivery at the office of Halsey, Stuart & Co, Inc., 123 South La Salle Street, Chicago 90 Illinois on or about January 3, 1947. The information contained herein has been carefully compiled from sources considered reliable and, while not guaranteed as to completeness or accuracy, we believe it to be correct as of this date.. • z: u v v, -1', v December 11, 1946 ; l ■ t-.".*. MATURITIES AND YIELDS companies and savings banks have not yet into the market in off with the . ' of bonds, particularly the longer 2s and 2 Ms of 1956/59. come each January 1, 1948 V are subject to authorization by the Interstate Commerce Commission• Offering Circular may be obtained in any State in which this announcement is circulated from only such of the undersigned and other dealers as may lawfully offer these securities in such State. . have 'v'.;. V .-'V Issuance and sale of these Certificates . {< 1 Buying has been spotty and not too substantial in the restricted bonds, but nevertheless sufficient to improve prices, partly because of the thinness of the market for these obligations. The small insur- | a nee companies and savings banks have been putting funds ta work in the longest ineligible 2Ms as well as the other.restricted! They ..: , , THIN MARKET ; / " ... ji^in : Vr//''1 ' as to payment of principal and dividends by endorsement by Gulf, Mobile and Ohio Railroad Company. < ; . ,, ' ;V-' '• 4 ■: Certificates, are to be issued under an Agreement to be dated as of January 1, 1947, which will provide for the issuance of $3,600,000 principal amount of Certificates to be secured by new standard-gauge railroad equipment estimated to cost approximately $4,592,410. ' . an upward trend in prices of taxable ob¬ the end of this year or the early part of next year, as is believed by many in the financial district, then the partially ex¬ empts can be expected to follow such a move. v ." Moreover, the longer maturities-of the partially exempts fit well into the plans of some of the commercial banks, to-extend maturities in order to mainincome. . * " ■/, • ' £? j ■ y " ligations on ' '' These - be come */■ present levels. , now that revisions in taxes, when next year, will not be as great as had been talked are quite likely not to include important changes in corlevies. Even allowing for some minor relief in cortaxes, the yield on the partially exempts compared with maturities of taxable issues would still be favorable at they do ;!">v ■ * / : To he unconditionally guaranteed M It is reported that the demand for the exempts is sizable and comes from institutions both in and outside of the metropolitan area. j ^ '• * - .partially , (Philadelphia Plan), *' much a -■ 2% Serial Equipment Trust Certificates : better tone for these issues, v. M Gulf, Mobile and Ohio Railroad Company | UH Equipment Trust, Series D . . ; ' .» this issue from time- to time, im market, it will be in a period of / .1 $3,600,000 . • Thursday, December 12, 1946 1-6, 1946 IBA Convention-December Charles S. Drexel & Garland, Alex. Brown & Sons, Baltimore; Co., Philadelphia. Edward Hopkinson, Jr. " ; "iV . R. H. Johnson,- R. H. Johnson & Co.; Wallace M. McCurdy. Thayer, Baker & Co Philadelphia—Presentation of the New Orleans Cup. '• ;■ Julien H. Collins, Julien H. Collins & Co., ertson & Chicago; Hal H. Dewar, Dewar, Rob¬ & Co., Los Angeles: Pancoast, San Antonio;' Carey S. Hill, Hill, Richards Robert W. Baird, Wisconsin Co., Milwaukee. • \ ■. t,- - , . George B. Wendt, First National Bank of Chicago; H. Laird Smith, Securities Corp., Nashville; Wm. R. Hcndrix, Equitable Securities Corp., Ralph Owen, Equitable Securities Corp., Nashville; John J. Rust, Equitable Corp., New York City. ■ 4 -- V • •- ' • - " "Vy-v' v.- '•"* • jJ?-. "& fi ■;' Y/Pi '■ D. ■*'/ *v - P iviV'. ,'!1; . Mortis,- RobinsonRoland H. Boardman, R. H. Johnson & Co., Boston; Co., New York. n; v : > Stone, Jr., John Nuveen Humphrey & Co., Atlanta, Ga.; R.H. Johnson, R. H. Johnson & m v• -- .• V J Fred • ■'Vi"',V *- -vv.-f ' Equitable Nashville; Securities & Co.. Chicago; Joseph L. ' WMm wmMm. mm John F. Linen, Chase National Bank of New York. ^ Charles S. Parker, Jr., Continental Bank & Trust Co , Stewart A.-Dunn, C. J. Devine & Co., New New York; York; Frank T. Kennedy. C. J. Devine & Co., New York. H. Wilson Arnold, Weil H. Russell BarroWi Barrow, & Arnold, Leary & Co., New Orleans; Shreveport, La Volume Number 4550 164 THE COMMERCIAL & FINANCIAL CHRONICLE v Baltimore; Emil C. Williams, Chemical Co., New York; Hazen S. Arnold, Braun, Bosworth & Co., Toledo; Francis Moulton, R. H. Moujton & Co., Los Angeles; David M. Wood, Wood, Hoffman, King & Dawson, New York; Walter A. Schmidt, Schmidt, Poole & Co., Philadelphia. J. Creighton Riepe, Alex. Brown & Sons, Bank & Trust Albert J. T. Woll, E. M. Newton & Co., Boston, Mass.; Mr,: & Mrs. William M. Cahn, Jr., Henry Herrman & Co., New York; Hilton Hornaday, Financial Editor, Buffalo Evening News. William J. Price, 3rd, Alex. Brown & Sons, Baltimore, .Md.; Mrs. Shirley C. Morgan; Shirley C. Morgan, Frank B. Cahn & Co., Price,.3rd. Baltimore, Md.; Mrs. William J. v;'77'. V."-.-.'.; ■} Altert* T Armitage, Coffin & Burr, Inc., Boston; delivering Public Service Securities Report to Convention. ', " j : v ' : f . Walter W. Craigie, F. W. Craigie & Co., Richmond; J. Marvin Moreland, Rotah, Moreland, Galveston, Tex.; Darnall Wallace, Coffin & Burr, Incorporated, York; F. D. Farrell, City National Bank & Trust Co., Kansas City, Mo.; Harold J. Schluter, First National Bank of Chicago, New York; Edward M. McLaughlin, Paine, Webber, Jackson & Curtis, New York, v Mosle & New J. Murray Atkins, R. S. Dickson & Co., Inc., Charlotte, N. C.; Mrs. J. Murray Atkins; John T. Wall, JR. S. Dickson & Co., Inc., Charlotte, N. C.; Jonathan G. Gullick, Emmett F. Connely, Firstof Michigan Corp., Detroit Mich.; Shirley C, Morgan, Co., Baltimore, Md.; Mrs. Thomas G. Schaedle; Thomas G. Schaedle, Briggs, Schaedle & Co., inc., New York. Frank B. Cahn & John McG. Dalenz, Calvin Bullock, New York;,Mrs. Howard Finney, Jr.; Howard Finney, Jr., Bear, Stearns & Co., New York. ■ i - " 1 . Thursday, December 12,1046 3034 . V Mr. & Mrs. Thomas Beckett, Jr.. First Southwest vanv Dallas; lanta ' Ga. Hugh D. ■ ' • C?om- Courts & Co., At- Carter, Jr., * Edmond M. Hanrahan, , 'i m ' ' ; William T, K. Collier, Collier, Norris & Quintan, MonCharles S. Garland, Alex. Brown & Sons, Baltimore, treal; Hal P. Dewar, Dewar, Robertson & Partcbast, Sari -Retiring Prisldeht of Investment Bankers, Association of Antonio, TexJ 4 * * -; , .: : ,.'^ ' \ America). Murray Hanson, General Counsel, IB A, Wash-W'-V f ■- • ■ i1 Se^vnties & Exchange Commission, ington, D. C. Philadelphia; Mrs. ; Robert Stevenson, 3rd; Edward Hopkinson, Jr., Drexel & Co.x Philadelphia. V ''ifV.J; •'1 £;}:■ £ ■ '■! '1'.: , • /' r uk: B«|0/v'vV': ,*V- CA mXm WSm^u^'■HIk V- •" vY' '■V*v'" m-A.'/v—' • • • , Vt . ?4 I j Wmm '! t fiis§§§#i K - I M JIBBP '^| ■ Co D. Williams; Edgar Honnold, Oklahoma City, Okla.; William Urell, Bar Brothers Co., New York City. James K. _ Warren P. William, Ryan, Sutherland & Co., Toledo; Mrs. Warren Mr. and Mrs. C. & ^ & Co., Inc., New York; Mrs. George Geyer; Mrs.: Feldman; George .Geyer, Geyer & Co., Inc., New York, V/C;';V.; t ?■ Herman A. Feldman, Geyer Herman A. .: Miller, Dominion Securities Corp., New Milwaukee, Wis.; Clarence L* Finger, Milwaukee & Co., Chicago; Mark L, National Bank & Trust Chicago. . Co., St. Paul, Minn. :/vc';p.0 New York; Paul L. Mullaney, Mullaney, Ross Baxter, Parker Corporation, Chicago; Frank D. Farrell, City Co., Kansas City, Mo.; Francis F. Patton, A. G. Becker & Co., Robert L. Thayer,.Lehman Bros., V York; Earl Pry or, Milwaukee v:?TjRnE;iGOVlUnERCTAIi/»: -FINANCIAt, -CHROISriCLE VdlumsNumber 4550 3 V- / •• Industrial Securities "Committee at Breakfast. Meeting—Mark C.;>Elworthy, Rlivorthy & Co., San Francisco; Clement A. Evans, Clement A. Evans & Co,; Atlanta; Benjamin J. Buttenwieser, Kuhn, Loeb ~& Co., New YorkyCommittee Chairman; Leroy A. Wilbur, Stein Bros. & Boyce, Baltimore; Henry M. Batcman, Bateman; Eiohler & Co., Los Angeles. ~ /"Kenneth Drummcmd, Calvin Bullock, St. Louis, Mo;; Tames F. Quigg, Paine, Weboer, Jackson & Curtis, Chicago; James C. Wavren,-AlM. Kidder& Co.,", New" York; Richard C. Noel, Van Alstyne, Noel & Co:, New York; Benjarriin A. Walter, - Bingham, Walter & Hurry, Las Angeles; James Sheldon Riley, Bingham, Walter & Hurry, Los Angeles. ■ r vV'V : Stock Exchange Relations Committee at Breakfast Meeting—Samuel D Lunt, Richard A. Kebbon. Kebbon, McCormick & Co., Chiago; Richard de la Chapelle, Shields & Company, New York; Committee Chainndn; Edward C. .'Anderson, Scott & Stringfellow, Richmond-, Va.; Joseph H. King, Union. Hamlin & Securities Lunt}Buffalo, N* Corporation, New York; Albert W. Tweedy Boston HyC.Wainwright & Co.; :y~ > -Membership Committee at Breakfast Meeting—J. Rpssell Postlethwaite, First California Company, San Francisco; Alden H. Little, Executive Secretary and Treas¬ urer of IBA; D. Dean McCormick, Kebbon, McCormick & Co., Chicago; Mary R. Lin¬ coln, Assistant Secretary, IBA} Gerald P. Peters, Peters, Writer & Christensen, Inc.,. Denver; Clifford Hemphill, Hemphill, Noyes & Co., New York. C . inmsaH m ill i5- <? £'* • ■ ■ ','•. « 1« . V,:--"-' - ^MtUbl W«: .*- —".i I Robert L. Thayer, Lehman Bros., New York; Carl T. Naumburg, Stern, Lauer & Co., New York; Herman L.*■ Lind, Camp & Co.* Portland, Oregon; Conrad frost, Stern, Lauer & Co., New York, " : *' ■ k" ■' *«" 1 '• ; • '' ■' .*V > ,■ "'-V .v; H. Lieben-* y-':. -V; Sigmund Stern, Stern Brothers & Co., Kansas City, Mo.; John A. Prescott, Prescott, Wright* Snider Co., Kansas City, Mo. t ; ^ ' V Karl D. Pettit, K. D. Pettit & Co., New York; Frank O. Maxwell, Maonoell; /Los Angeles; S. K. Cunningham, S. K. Cunningham & Co., Inc., Pitts¬ burgh, Pa.; Wilbur Ri Wittich, Maxwell, Marshall & Co., New York City; Karl D. Pettit, Jr., Knickerbocker Shares, Inc., New York. . }' Marshall & Co Federal Legislation Committee &t Breakfast Meeting. THE COMMERCIAL & FINANCIAL CHRONICLE Front—Rucker Agee, Sterne, Agee & Leach; Birmingham; George LeVind, Blyth & Co., Inc^New York,;^ -,r' v? ^ b r vj;' 1 v v. <, : Hear—John J. Bust, Equitable Securities Corp., New York; David J. Lewis, Paine, Webber, Jackson & Curtis, New York; Reginal M. Schmidt, Blyth & Co., Inc.? New York; Mahlon O. Bradley, Paine, Webber, Jackson & Curtis, Chicago; Nathan S. Sharp, R. S. Dickson & Co., Inc., Chicago; Sidney J. Mohr, Jr., Thornton, Mohr & Co., Montgomery, Ala. , Edward H. Hilliard, J. J. B. Hilliard & Son, Louisville, Ky.; Preston Delano, Comptroller of the Currency, Washington, D. C, * <' \ ■" 'V , * Mr. & Mrs. Adolph E. Weltner, A. E. Weltner & Co., Kansas City, Mo.; Miller Pontius, F. Eberstadt & Co., New York; Mr. & Mrs. Maurice H. Sandberg, A. E, Weltner & Co., New York City. H. ! i Malon C. Courts, Courts & Co., Atlanta; Gerald P. Peters, bhristensen, Peters, Writer & Inc., Denver; Richard W, Clarke, Richard W. Clarke & Co., New York; Mrs. Joseph M. Scribner, Pittsburgh; Mrs. Walter A. Schmidt, Philadelphia; Walter A. Schmidt, Schmidt, Poole & Co., Philadelphia; Frederick T, Seving, Butcher & Sherrerd, Philadelphia. ;, Thursday, December 12, 1946 Albert J. T. Woll, E{M, Nevjton & Co., Boston, Mass.; Dudley C. Smith, Mu¬ nicipal Secretary; IBA (Investment Bankers Association), Chicago; George L. Martin, Chairman, Municipal Securities Committee, Martin, Burns & Corbett, Chicago. Hardin H. Hawes, Harris Trust & Savings Bank, Chicago; D. T. Richardson, Mil¬ ton R. Underwood & Co., Houston. John J. McKeon, Charles W. Scranton & Co., Yarnall & Co., New Haven; H. V. B. Gallager, Philadelphia; F. Edward Bosson, Putnam & Co., Hartford, Conn. t. Ames & Co., Inc., New York; C. J. Fullerton, A. E. New York; Mrs. William M. Alley; A. G. Curry, A, E. Ames & Co., William M. Alley, A. •; Ames & Co., Inc., Inc., New York, , ; Samuel K. Phillips, Samuel K. Phillips & Co., Samuel K. Phillips & Co., Philadelphia, • - Philadelphia; Edward J. Phillips, ' Elvin K. Popper, I. 'M. Simon & Co., St. ' ■ Louis; Max S. Muench, Stix & Co., Louis; Alden H. Little, J. Krebs, Metropolitan, Wertheim & St. St. Louis. ' ' ^ ~ Mr. and Mrs. Anthony E. Tomasic, Thomas & Co., V,T Bert H. St. Louis; Bert H. Horning, Stifel, Nicolaus & Co., Inc., St. Executive Secretary and Treasurer Emeritus, IBA; Festus Horning, Stifel, Nicolaus & Co., Inc., St. Louis; Charles S. Werner, Co., New York; Mrs. Jean Honaker, Palm Peach; Douglas R. Hansel, Co., New York; Mrs.& Mr. Mel M. Taylor, Semple, Jacobs & Co., Wertheim & Thomas Whiteside, Chace, Whiteside & Warren, Boston; Alden Pittsburgh. H. Little. 1 * >.41 t • • V ' J f:' * | ,}■ j:'- " ' ■' I;' mwSk :idBB r 'r ■ ' . . Mr itejMH i ;||j •'•'v, ■; :¥:' JB • i 'I ' : * 'V* jfl| v Jh : IBI ^■Hk : • jt •-'• <s- *•»$»■ ';/ ^ '• \s$-+tiEBKgM. r i. $£'<**%&•>**■.His* .,*>v :• v: . JH - NH Joseph A. Rushton, Goodbody & Co., Chicago; Leonard J, J, Paidar,Goodbody Paidar, Goodbody & Co., Chicago, Mrs. Thomas R. Furlong, Chicago; Chicago; Mrs. Mathew J. Hickey. Mathew J. Hickey, Jr., Hickey & Co., . ; . ; Mr,; and Mrs. Samuel L.vVarnedoe; Yaniedoe) Chishoim <& Co.> Savannah; 'Mr. Savannah. ::- ; ;U > * Harper, Wm: P. H(wr»«r ^ Sow & Co,, Seattle; & SOri &€&y Seattle; Herman-L.Lind, Camp & Dickinson Cv Wm. Fi Harper U"f-i'V> ^ j ' Sherman Ellsworth!, Co'„ Portland, Qr-eg, - i - jr » j ,-f ».V "v' " "V ft *' A ,. - 7,"'? ■> r '■ V/' 3038 Thursday, December 12; 1940 A J . ^•'K7;4't £ri *wf •RlK vf ~ <•' i-t„ B&ww■ %< '^S'K'te Anthony E. Tomasic, Thomas & Co., Pittsburgh; W. H. Hammond, Brawn, Bos& Co., Chicago; C. F. Hememvay, Illinois Co. of Chicago; Robert Ledyard, J. C. Bradford & Co., Nashville, Tenn. • 1 v~ ' u 1 v "■* w H;».1 f \ worth v Louis J. Cross, Paul H. Davis & Co., Chicago; Milton S Trost, Stein Bros.'Se Bayce, Louisville, Ky.;AV. Theodore Lowr Bear, Stearns & Co., New York; Ralph W. Davis,,"Paul Hi Davis & Co.;'Chicago.;^/*-1p <hK:"f'ippu P: piii ' 1 mi - >>• • '& v. V'■"v; "/• .7, ■ ? ? : ft 'i<A, ' Xy, 01 : ' kh\. :: -Jt < | 'J V'^v-A i T. George Van Hart, Salomon Bros: & Hutzler,New York City; TTA. Von Glahn, ;; J* P; DonnaUy* Peoples National Bank,-* Char- J lottesville, Va.; C. F. Cassell, C. F. Cassell & Co., Charlottesville, Va Salomon Bros. & Hutzler, New York; - Mr. and Mrs/. George W. Elkins, Jr., Elkins, Morris & Co:, Philadelphiar Edgar J. Loftus, R. S. Dickson & Co., Inc. .^7. -•.,■*.r- Leston B. Nay, F.rst Securities Company, Chicago; Mahlon O. Bradley, Paine, Webber, Jackson & Curtis, Chicago* Robert G. Mead, Stone & Webster Securities Corp., Chicago; Edward E. Anderson, Discount Corporation of New York, New York. A Gerald,»Pf Peters, A. E.Weltner & Co., Peters, Writer & Christen sen. Inc., Denver; A. E'i Weltnery^Y"' Kansas City, Mo. Maurice H. Sand berg, A. E. Weltnef & Cd.p hp Iric:, NewiYQrk\GityJ; M,: Fi<Robert^ Sidlo, Simony Robertsftr Co.$ ;J)mver5^r■'.'*•t 5; : Edward A. Stephenson, National William Hv Gregory, Jri, Bonner & Gregory, New York; Monroe V. B/ Gibbons & >iv^ v Chase National Bank, Chicago; Robert L* Hatcher, Chase Bank, New York; Emil C. Williams, Chemical Bank frTrust Co., New York, Poole, George ..:: York; .; Co.; New York; Sanders Shanks,' Jr., The Bond Buyer, New Commercial & Financial Chronicle, New^otki^p-y'r F. Vincent Reilly, <>A > < ; , THE COMMERCIAL &v FINANCIAL' CHRONICLE i -Mrs, Joseph W, Sener, Baltimore,. Md.; Feed R. Tuerk, Crupenden & ,Co., Chi¬ \ cago; Joseph W. Sener, Mackubin; Legg & CO., Baltimore; Mrs. C.GerardMorgan, Jr.* Baltimore; C. Gerard Morgan, Jr., Mackubin, Legg & Co., Baltimore, Md.;;Mrs. * William H. Gregory, Jr.; William H. Gregory, Bonner & Gregory/New York/Walter H. Pohlhaus, Mackubin, Legg & Co., Baltimore; Mrs. Walter H. Pohlhaus,/ / J ;,v; J. Murray Atkins, R. S. Dickson & Co., Charlotte; JohnP. LabouissHoward, t,$bouis$eK Friedrichs & Co.; New Orleans; Robert C. Webster, Webster & Gibson, Nashville; James E. Koddy, Scharff& Jones, N«bw Orleans; Carrr Payne, Cumberland Securities Corp./ Nashville; W, Russell Barrow, Barrow, Lcary & Co., Shreveport, La.; Errol E. Buckner, National Bank; of Commerce, New Orleans, La.; Gilbert Hattier, Jr., White, Hattier & Sanford, New Orleans; George H. Nusloch, Nusloch, Bguftedn& Smith, New Orleans, Mrs. J. Emerson Thors, New' York; Mrs; Herman; :B>; Joseph/;Cleveland; George Geyer; New York; Mrs. Herman A.- Feldman, New York.' ^; Mrs. ; T. George Van Hart, Salomon Bros, & Hutzler, New York; William N. Beebe, Stillman, Maynard & Co., New York; Mrs, Edward E. Bartlett. .... ........ 'zwm > Charles H. Loomis, First National Bank of St, Paul; Jack-Talbot; Northwestern. National. Bank, Minneapolis; G. James Caldwell, Caldwell, Phillips Qo:, St. Paul; I, D. Qwen, Allison-Williams Co., Minneapolis. Alfred S. Wiltberger, .Blpth & Co., Chicago; Dwight W.: Chabman, American Trust Co:, San Francisco; Mrs. George W. Davis; Mrs, Dwight. W. Chapman;. ~W. Schlichting, Bankers Trust Co., New York; Mrs; Frank > ''•;DdviSj'iSfea9srs:<&--jpQ^>San"Frahcisco. .. Arthur Werden; George W. Davis, V.J\"* .»— t Mr. & Mrs. Wm. K. Barclay, Jr., Stein Bros. & Boyce, Philadelphia; Ernest O. Borbritz, Moore, Leonard & Lynch, Pittsburgh; James L. Harrison, National City Bank. New York; R, A. Metzger, Union Central Life Insurance Co., Cincinnati. . - Clement A. Evans, Clement Atlanta; Mrs. Edward Nelson New New York; Mrs. Wayne Martin, Atlanta, Ga. A. Evans & Co York;Myron F. Ratcliffe, Lehman Pros.; Thursday, iD^cerpber 12,1946c Richard W, Courts, Courts & Co., Georgia, Atlanta; Clement A. Evans, Clement A. Evans Co., Atlanta; Waldo W. Mallory, Clement A:>Evan$ & Co., Atlanta. J. W. Means, Trust Co. of & 1 H.■•'I. Prankard, Lord, Abbett & Co., New York; A. R. Hughes, Lord, Abbett & Co.,Chicago. -V ■.vCf;7' Atlanta, Ga.; giving Federal Taxation Report. ;'. J - ; . Officers of Jim Daisy—Thomas R. Furlon, Chicago Tribune, Aere Perrinnius; Finance Magazine, Lyric Censor; "C. Nofman Stabler)' New York Elephantian Anther. < Jim Daisy • tierati Tribune, I . . ^J . ' '■ . " M t* * "■ • ' .-f < t ' / * \ ^ " *• * " Carl S. Wittmer, Jr., Bucktej/ Brothers, Hagerstown, Md.; J. Carey Thompson, ; Jr., Buckley Brothers, New. York. • v■;;1 ^-;v;;;'v-i;,s-.;;(^ Jiiti Daisy Officers and Initiates William A. Happ,. St. Louis Globe Democrat; Grand Androedum; William L. Ayers, * r[ ■ 'v ' Initiates. •' : tr .v. '• f , , • !vplume . 164 Number 4550 THE COMMERCIAL & FINANCIAL CHRONICLE : . \ 3041 INVESTMENT BANKERS ASSOCIATION AMfPIfA "; ■r•• V •• : ' '' ' ■ :' " '''"'v /'■ ' ^V ' 4 . ' vV'v'v-' hmJMIJClJLViJLJIM v'v:V-:' 'r ' ;->V ' \'v 'v::- .■' '■ . ->:■' : ; \ OFFICERS 1946-1947 PRESIDENT Vice-President E. Robert W. Baird Exec. Vice-President Hopkins on, Sec. & Vice-President Jr. Julien H. Collins Treas, Vice-President &J8PPJM8 • * H. Little - /MMt m f Ber Alden • - 4. "'-ji Carey S. Hill Vice-President ALBERT H. GORDON Icovernors ''i" Walter W. Ainsworth James M. Dain Edward C. Anderson Albert T. Armitage R. Mark C. Elworthy de La Chapelle Wm. Russell Barrow John F. Fennelly Henry ML Bateman Charles S. Garland Wm. McCormick Blair Frank E. Gernon W, T. K, Collier W. S. Gilbreath, Jr. THE COMMERCIAL '3042 FINANCIAL CHRONICLE & Thursday, December 12, 1946 GOVERNORS (Continued) Thomas Graham George L. Martin J. R. Postlethwaite Milton Clifford Hemphill G: Hulme iHerman L. Lind Joseph T. Johnson . Nathan D. McClure John C. Maxwell John Redwood, Jr. John Rauscher ■ | .Charles Walter B. 'Merrill A. Schmidt Samuel D. Lunt ' Delmont iC. K. Newbold Pfeffer ' .v. Aaron Taylor ( W, Pleasants Harry Theis Albert W. Tweedy ■ . t !£.: K. Van Howie RobertC. -Webster Adoiph E. Weltner Thomas Whiteside Frank A. "■ WiUard v.u/l Wilson ,Volume 164 •' •. * Number 4550'YYC;C::-v!; V' -v--v . -THE COMMERCIAL A FINANCIAL CHRONICLE -I-• -v.:,,. — • , . . . , 3043 .. ■ •' i . " ;• : .. "• . _ _ • i ; : . " t • \ ' • • . • f .... Carry-Over Problems of Coming Year ■LP'S By edward hopkinson, jr.* - " "• • - • ,. President, Investment Bankers Association of America Ti /C Partner, Drexel & Co., Philadelphia * " f ; I i" appreciative am of the con¬ fidence you have shown in me ing excit- we I -my / v in I . and surely shall with do j j .which the In- J HBKBJBB bankers Asso¬ / E. Hopkinson, * < Jr. - * Retiring President Garland's adxlress, in opening this Convention, in describing the activities of the past year, has also charted the carry-over problems of the ing I com¬ believe, an active a reduction in public af¬ certainly - hope that Budget may be so arranged as to I permit.a modest start in this di-i rection, effective for the year 1947. | Nevertheless, we the fact the has that Federal tax ciled with is balanced budget that a certainly a made me¬ Sec¬ it; possible for the representatives of the "Association to get a first-hand knowledge of the problems they are facing, and have made pos¬ sible friendly and informal dis- far tomorrow. extent ^♦Inaugural address of Mr. Hop¬ the tention of the 35th Annual Con¬ Investment Bank¬ Association of America, Palm Beach, Fla., Dec. 6, ers . Tax reduction possible; should to a hit or miss affair; but ^should be carefully considered With relation to its overall effect our Whole budget there on economy. To * support our ,'i. .i is of carried state of in how in the world certainly cannot al> budget that is to be either paid for at the unbalanced an the endangering of or some- attendance for extent-offset the salaries of those no; longer needed? Very definitely one: must recognize that the present rates of compensation do not furnish many of our Fed¬ eral employees •nor decent a incentive an to living, continue Government service for in our. more have put must recognize this and deal generously with our public more servants. In opinion, my it -all adds up to the fact that the level of Government the to expenditures, for future, is almost bound continue at a high level, and near tax reductions must come, in large part, from the greater yield of va high level of production at profitable levels, and thereby make^ possible a tax-yield adequate to support the-budget at lower rates of taxes. * - , . Relations with SEC r As to the mechanics of operat¬ is also moving upward. Securities ;own business: there we info close contact with the our come • and Exchange Com¬ the humber of Federal employees mission, which has been in the represented^ at this Convention by activities'which are "•V ■ V ■; r: y,;- '.i!' problems a so ably with | CLEVELAND SALT LAKE CITY SPRINGFIELD INDIANAPOLIS Y — r; ; , EUREKA i STOCKtON • C'' - ' * PROVIDENCEr' | h) LOUISVILLE » HOUSTON • OAKLAND ■ - ' ~ PASADENA • ; '-• SEATTLE , > ; SACRAMENTO YaC*)'; ,l; / DETROIT W DALLAS. • - "* ^-• SAN DIEGO •- v Private wires connect LONG \ BEACHy-j? principal offices^ ; * . j» • v, * • . . - .; : had the to Commissioners as op¬ meet and the . law the and procedures developed there¬ vestors at an earlier date will be progress in the right direction. 1 have no doubt that the Commis¬ sion itself will be able to correct some rof the further difficulties by appropriate changes in regula¬ tions; others, as stated by Chair¬ man Caffrey, may require legis¬ lative sanction. Your Federal Legislation. Committee, with : the able assistance of Murray Hanson, our General Counsel, has alreadybeen at work studying this phase of the situation, and I hope will produce some gestions which acceptable tainly be the SPOKANE' SAN JOSE - BEVERLY HILLS area to our of constructive may SEC. - not It be will sug¬ un¬ Cer¬ endeavor to wider* agreement with their* to the best way to as PITTSBURGH ; have investors that Any step to facilitate mak¬ ing information available to in¬ .MINNEAPOUS V FRESNO ; SANTA BARBARA , ■ of believe which have been PORTLAND • PHILADELPHIA... and weaknesses and bottlenecks in the ^ LOS ANGELES • ^ country and -of our we, consider the to in nearly every respect. Experience has shown some of the STREET, NEW YORK 5, N. Y, C CHICAGO • the de¬ and mutual BlytH'&CoJIhc' BOSTON I aside, pri¬ own staff," for the p^st several years, been able to bring about a better understanding of our mu¬ tual problems. Qur - problems. are has S ECU RITIES SAN rtANCISCO whole. portunity erwnterran 14 V/ALL of business our their concerns themselves under. ing many -^Y voted efficient; administration of - the proper functions of Government, we moment, pur¬ members in. our here business present our Certainly the vate ambitious young men and women. If we are to have competent and rising prices, the cost of Govern¬ ment-bought supplies and salaries i YL;.i-' :i:. , but national security, or both. Also, it cannot be lost sight of that, with the hot* be that budget possible at the cost Of national nor do we want a tax security, cut be balanced a cost! be unsettled achieved today to business of great that can ford for the small business of the course, * expenditures, affairs?. We It into of present destroys the incentive and the possibility of saying, and, particularly, makes it- impossible grow too military a . to get away far may,. desirable objective, neither as as gradually from high percentage of short-term obligations. Some cut recon¬ dollar. at r Treasury adopts a. policy of fund*nS some-of the -present^ shortter™ %'s into longer term bonds, the be can retary of the Treasury Snyder and kinson [ so reduction Federal expendi- J »«d it may well be higher if the teen consecutive years. We must not complacently r permit it to drift into a dangerous state of If our , shown & deficit for;six- now reduction of I debt cannot be expected to be Budget j lower in 1947 than it was-in-1946, Jhis . with which pose less, quately compensate a smaller sub- group of remaining employees, to and tures for 1947 just is not in the wood; The. interest on the public cannot overlook to the best advantage with tax-gatherer collecting such a high, percentage of the. income business. - and Ito the consciousness of all our the' Federal citizens. After all, any spectacular tion directly to the our own have appreciated the seriousness of . difficult, more in*-taxes, relate staff - ■ industry' nor private individuals can indefinitely func¬ more distinguished Chairman, Mr. Caffrey, and his colleague, Mr. Hanrahan. I hope they have felt that thqy were sincerely welcome at our sessions, and that they have a likely, the possibility of any helpful along these lines, Cfi stantia.l-. reduction ■ in taxes for can fully share the enthusiasm 1947. " This- must be driven home I of interest be to be fairs affecting our whole economy, as well as those matters which chanics of ' : • its high level of profitable Fin- process- of -being' discontinued business activity. -Work stoppages will be reduced, but will not the and : interruptions of ! production aggregate expenditure to . ade¬ Our chronic unbalance. year, course, that the Association must continue to take . having lo-do- must with these subjects will, no doubt, | make have an opportunity to continue for com¬ matters standing committees having to do and contribute mitted. of debt policies and taxes. ; f i d e nee ' ciation is ■ r . cussions -vestment ; ,v. • remain heavy. Sees high level of profitable business activity essential to support National Budget and expresses confidence in fruitful cooperation with SEC, and continued progress in the investment mechanism. ^ > # i^'best-;.'.;.' to y, -co n V ; find .ourselves ■which ; 'MmMMNHgrni; j times .which ms. I.>C- President the *. inaugural address, newly elected IBA President urges Association take active interest in public affairs as well as matters relating to investment. Advocates early balancing of Federal Budget, but warns government expenditures will in! electing me ;to this office. It is;, great honor and privilege to be; in ■. t ; In •a your • .(Continued on proceed, and page 3046) THE COMMERCIAL & FINANCIAL CHRONICLE Thursday, December 12, 1946 Past Year and Future Outlook of IBA Hallgarten & Established 1850 , London Chicago > . Municipal Bond Department THE NATIONAL CITY BANK OF NEW YORK 66 Branches in Greater New York mmmmag#* i irniimiwiiii imrttimt bto'TtteA''/"',..1- I' THE COMMERCIAL & FINANCIAL CHRONICLE in 1•- •• S^:H- ■ with you. We want to get to know better . those s ha r > SEC head tells investment bankers of threats learn " SEC and Investment lated to developm i' of the ment bound the e n t James J. Caffrey invest- process to movement be as a< whole. affected affecting by the It is any invest¬ ment process. It is, therefore, a business in which a high premium ought to be put on basic Today I want en¬ ^ -• peared. The been largely development has terprise. Any factors which af¬ a development in fect this vital condition also affect technique. However, I am going you. to try to show why it is just as j, important to foster also the devel¬ Investment Banking Mechanism banking is in-v tegrally re¬ 1 'ivY&V- Yfe/;ities laws. :\;'V • them. ; Depressions, of course, affect all us. They have instant and effects on your business. One of the symptoms of a de<pression is the freezing of capital pools. Somehow indecisions and lethargy seem to overtake us. marked level of securities ing to devote their savings to opment of the investment banker's The investment banking mech¬ anism as it exists today is a fairly modern thing. selling group ized with to talk about some The investment banker, in the peformance of his function, stands between enterprise and the pub¬ lic pools of capital. His business needs not only securities to sell, but a large class of investors will- their distribution presently organ¬ accent rather on rapid as servant of the investor. % In the short period since the early '30s that has accounted for the latest business developments in you have had your demon¬ . than on lei¬ strated to you some of the factors which may constitute significant the unhappy consequences : :. Investment by Mr. Caffrey be ing caught with large unsold allot¬ For example, you all remember fore 35th Annual Convention of ments. What we have seen is an the days in the middle and late Investment Bankers Association evolution of a complex method '30s when so-called "private place¬ of America, Palm Beach, Fla delicately adjusted to meet the ments" came into public promiDec. 4, 1946. * 1 mechanical needs as they ap- nence. It was a time of real fear The .• banking v" growth of a system companies and up increasing percentages of available invest¬ ment was nothing to be complac¬ ent about. You gentlemen com¬ plained—and complained hard. Unfortunately and, I think, time has proved erroneously, some oi your hardest complaints were against the SEC and its basic laws banks There to be seems frat¬ safe, to shrink in which insurance Not Swallowed investment in a desire to pla^ from direct enterprise. Good away job-making projects ; wither for capital, and^ capital, hiding safety, hungers for good rec¬ lack of in tum. At such times criticism" of the investment banking fraternity tends to run high; and it seems an inevitable tendency, notwijhstand- ing the political complexion of the time, to meet depressions by sup¬ . UNION "SECURITIES alone There , , investment ernity. risk-taking, are recently characteristics.* They threats *An address . the planting the investment banker and by using government capital private placements, to help keep employment up. ■ '«• to its present methods. but other means of by-passing the evolved in response to changing When you analyze them you will direct call on investors' savings Antidote to Adverse Factors conditions. Vast amounts of cap¬ see that they all touch the vital constitute possible competition Whether adverse factors to the ital" have been necessary to fi¬ predicate of your business which with the investment banker's dis¬ investment banking business are nance the accelerated expansion I mentioned before—the ability to tribution function. The degree to or are not of our economy; issues tend in depression symptoms, satisfy a wide-spread public de¬ which corporations can finance good times to stumble over each mand they can be met by one good an¬ for direct investment in en¬ additions from internal savings other to catch markets; markets tidote—strengthening the confi¬ and the use of bank credits are terprise. • £ are traditionally ephemeral dence of issuers, of the public, of things; other examples. and some of you have experienced the man in the street with say¬ By-Passing Public Direct surely thinking. developed problems which I conceive to be basic. The syndicate and as role in are live factors in stage of the business cycle. True, they are not as obvious when new financing is plentiful and is matched by active demand; but it is true too that they do not of salesmanship raised and proposes a joint study by SEC and investment bankers to revise secur- with > ternal savings any spring into being with depression^. to Wants o their exchange ideas established investment banking expedite its processes so as to help and not to hinder informed investment. Urges investment bankers not to be mere peddlers of securities, but to assume a continuing obligation to their customers. . points of view - to through "private placements" and other means of by-passing public investment. Sees antidote in investment banking strengthening confidence of issuers, of public and of investor. Pledges common to ! system of direct . our problems,. t • mechanism who r e By JAMES J. CAFFREY* ■'.V :• Chairman, Securities and Exchange Commission :V-- ;:We, of the Commission, are glad to be with you today. We thank you for your gracious hospitality and for this opportunity to meet infor m a 11 y tures the are ily in are several fea ings to invest, in your functions. One of Your industry has many fairis that they weather friends. It is comfortable common these examples. most significant not, by any means, necessar¬ "depression babies." placements, bank credits, and in¬ CORPORATION UNDERWRITERS AND DISTRIBUTORS Investment Securities 65 BROADWAY, NEW BOSTON BUFFALO PHILADELPHIA ' • YORK® CLEVELAND I / * SYRACUSE ■ s. to know that Private tion seeking HARTFORD a a seasoned corpora¬ refunding to take (Continued on page 3058) - ;j THE COMMERCIAL & FINANCIAL CHRONICLE - Thursday^ December 12, 1946 .... Hopkinson Discusses IBA's Carry-Over Tasks the Coming Year In '^ •(Continued from page 3043) ' narrow, to. ..the i greatest .v extent . possible, any area of disagree-* ment; and we welcome the oppor¬ tunity to cooperate with SEC iii a fresh re-study of: what can and should be done,' The the ion of; the implementat¬ proposed - procedures' of and itb International Bank which the Director, Mr,-. Colladd, Executive gave at our;Tuesday morning us session SPECIALISTS IN of comprehensive -review progress give most timely. was It will membership the mate¬ our rial to consider jthe problems and opportunities of foreign finance at States Government a time when own we must consider our problems of employment4and production with relation to world Securities PSl-llil affairs. ■MI est in ' ■<: great inter¬ the work and program of assure of you the .Education my Committee.; I_fe©I particularly fortunate that Julierl Collins has agreed to. continue a« its John McClure will as another J year, for Chairman with Fennelly and Nathan Vice Chairmen. continuity preserve - This the in preparation of "Fundamentals of mntilv: iii Investment >'• Banking"- C, J. DEVINE & CO completion. v, Chicago- • s Boston Cincinnati Philadelphia« St. Louis •* -* Pittsburgh San Francisco ~ ,,.V thei concluding:; sentence Mr. Garland's address, wherein warned, Cleveland .. ; - In closing J- can only re-echo to you HAnover 2-2727 ... LZZZiT:' Chicago Boston; come us so that of he must mot be¬ we engrossed in our own personal- businesses that we lose sight of our important duties as citizens. Drexel & • \ Co Underwriters and Distributors of Industrial, Public Utility, Railroad and Municipal Securities . * Members New York Stock Exchange ' < Philadelphia Stock Exchange *1. New York Curb Exchange (Associate) PHILADELPHIA 1 NEW YORK 5 15th & Walnut Sts, 14 Wall Street ■j (Volume 164 Number 4550 ,THE COMMERCIAL & FINANCIAL CHRONICLE And World Fnnd ' (Twenty'Fourth of! a Series) JEAN DE LARGENTAYE , French Executive Director of ; ; the Fund* :• ;:.v4 Jean de Largentaye French executive 1. > has been director of the Fund since the1 resignation of Mr. Pierre Meiides-Francev on July 4; 1946. Previ- ously Mr: ■V'Vv ' r'' • de Largentaye had been ing serv¬ French as temporary al¬ ternate execu¬ tive director of the Fund; hav¬ ing been a . member of the! French r dele¬ gations at the Kretton Woods Conference of 1944 and the Savanna h J. meeting of Fund;and and Bank , T ' Largentaye in governors 1946. LV'';' A'-''' de tf'"'/ 'mv'V' • ( -■ March — HT' - >~r< 'V^' Mr. de Largentaye was born Brittany in November 1903. He in is graduate of the Ecole Polytechnique and has a master's degree in a From taye 1925 to 1930 engineer was de for ■®fWf/ Largen¬ 1'Air Li- quide, Jhc;; spending three jmars in the plants of that firm in Spain: r Admitted in 1931 in the services of the : Inspection General des Fi¬ nances, he served in the Ministry of Finance until 1939, from 1936 in the Treasury Division. In August 1939 he; was, drafted in the artillery with the grade of lieutenant and- later,' in 1940, was assigned to the Purchasing Mis¬ sion in Spain by the Ministry of _In April 1940. de Largentaye was appointed Financial Attache of the French Embassy in Spain and the v French Legation in Portugal. April 1943 he resigned ceeded to and In pro¬ Algiers, where he nance. Upon the transfer of the Provisional Government to Paris at the end of August 1944, he was placed in charge of the services of the Commissariat for Finance maintained in Algiers In December 1944 he' was rein¬ stated as Financial Attache in Ma¬ which were drid and Lisbon. 'Before the made war de Largentaye French- translation of the "General. Theory' of Employment, Interest and Money" of John a May- nard Keynes which was published in Paris. He also Wrote various ticles economic on and ar¬ financial subjects for the "Revue d'Alaer." fcfr* ">k?v ' mm/SSSttammtrn - • • • ' ' British Exchg. Control Bill The - statement that .Britain's balance-of-payments deficit in the ending next July is likely to "substantially less" than an¬ ticipated was made on Nov. 26 by year be the Chancellor of the Exchequer. Hugh Dalton, at which time, mov¬ ing the second reading of the ex¬ change-control bill, he said that despite this Britain must improved still watch position closely her supplied of "hard currencies." "He defined hard currencies American and Argentine crowns, which • Canadian pesos omitting are and Swiss as dollars Swedish francs generally regarded as the 'hardest' of all currencies. . "Mr. when low He Dalton could not predict Britain, could afford to al¬ the free capital movements. described exchange control as 'indispensable weapon for safe¬ guarding our -balance of pay¬ ments,^ saying it would enable Britain to play her full part in carrying out the objectives of the International Monetary Fund." an ■fs^ ■as,ivv«-' v .#.*3 was entrusted with the Research Serv¬ ice of the Commissariat for Fi¬ .. * y£ "J. • '* «vt*V ./■ lit&i'? - ■■■ ■ ifc» \ ,y THE COMMERCIAL : j-1 & FINANCIAL CHRONICLE 1 ' , 1 ' * W'U >"•'"* "«irw "• »——7".Tr* m ■«><■»»,« n . 3048 Thursday, December 12, 1946, The International Bank and Its Securities V'.'.. .... By EMILIO G. COLLADO* ... — ... . United States Director, International Bank It is particularly fitting to dis¬ the International Bank for World Bank official explains organization and purposes of the institution and points out its restrictive provisions on lending will result in carefully consid¬ ered loans of a productive character designed to increase levels of world eco¬ cuss Reconstruction and Development with the members of the Invest¬ ment Bankers nomic Ass ociation been de¬ signed to play a direct and important in the invest- in e n t m a trusts to as well hand it is purpose of the Bank to pro¬ available mote private foreign in¬ terms, to sibilities member direct the Emilio vestment by of G. on loans. On principal the his alternate is the Under !";- tions will be guarantees or in loans and other investments made on the own by private investors, and only when private financing is not to it governments, ties will within to stitute a by its its securi¬ few years con¬ important factor in, the an investment markets. Ministers of Finance obligations guaranteed by it. If the Bank cessfully carries out the c suc¬ The International Bank has been established pursuant to Arti¬ cles of Agreement formulated in respon- July, 1944, at the Bretton Woods Conference the which Agreement also for prepared the Interna¬ and MUNICIPAL SECURITIES was responsibilities reconstruction many of of financing development and which the International Bank was ultimately to assume. Congress authorized the President to accept membership in the Bank and undertake on be¬ half of the United States the obli¬ J Board of of System and Executive the nors of nual of Directors of the Export-Import Bank—to act for There the participation States in nancial these of the regular Gover¬ V eign financial operations of in dollars to the Bank to meet pay calls and reports the recommendations Congress regarding the the Other and countries by Dec. 27, opera¬ followed 1945, an Executive Director and their alternates by the President by and with the advice and consent of the National Ad- a countries cles which suit recently be Francis I. duPont & bodies, Co. which is as the Executive all Each Underwriters; Distributors, Dealers operations member of the the chief executive Counsel; Mr. Charles ; Iongh, formerly head of; Secretary. as /" ?;1J The, Bank has organized; it has called up capital; it and is plications; it (Continued and has received considering certain loan ap¬ is considering, the 3070) page 011 *An address by Mr. Collado be- fore of Convention Investment Bankers Association, Palm Beach, Fla., Dec. 3, 1946. ap¬ in Clark, Dodge & Co. ESTABLISHED 1845 nZ l°Tt SJ°CH Exfal9e »°, ONE Tel.: ew .™ "e® Exchange or WALL Rochester, N. Y. N«w York Curb Exchange ' • , STREET Wilmington, Del. 1'; "-'ivi f v ' - '-v; i'- V ^ . -ft f - • New York Cocoa ojjee & Sugar Exchange * BOwling Green 9-6000 = ' • NEW • New MEMBERS 5, N. ; New York and Boston Stock New York Curb Exchanges Y. Teletype: NY 1-1181 • 61 Wall Street, New York 5, N.Y. i NEWARK Philadelphia, Pa. Rochelle, N. Y. • ■ Exchange BOSTON Newark, N. jj White Plains, N. Y. YORK Rhetpont : 4 .. New York Cotton Exchange • New Orleans Cotton Exchange . Cable: Chicago Board of Trade • Exchange i LONDON f Jersey City, N. J. London, England CORRESPONDENTS Cincinnati * Cleveland * ? are Municipal Securities MEMBERS Columbus Richmond - ,, Bank. government General yer, responsible for the conduct of the general President, under the direc¬ merly of Morgan & Co., Paris, as Director of Research; and Mr.. Morton Mendels, a Canadian law- or so. who Directors is , of the largest Dutch banks, as Treasurer; Mr. Leonard Rist, for¬ made powers, 1» one governed by two vested Governors ; Directors the subscriptions of in¬ on Crena de Board of Governors in a is of Executive Pineo, formerly of the Royal Bank of Canada, as Loan Director; Mr. expected to complete the for¬ The Bank the Washington. Voting President; Mr. Chester McLain of prominent New York law firm, Australia and Colombia, authorizing legislation be¬ fore their parliaments. Four others, Turkey, Syria, Lebanon, were * a a nations were Italy, and Eugene Meyer was elected Presi¬ dent, and he has brought together f a carefully selected staff including Mr. Harold D. Smith, former > Director of the Budget, as Vice them, , President a elected Board the Directors, is represented at Bret¬ ton Woods are eligible to join at any time prior to Dec. 31; two of and board under officer of the Bank. In June Mr. 5 has 38 now in Bank both The sufficient other > j tion and control of the Executive ? had Seven have dividual countries. accepted the Arti¬ Agreement to put them of they based |md be sued in district members. Governor and to the Bank—for example, the Bank into effect. The Bank United States in Congress also provided certain status, rights, and immunities to of a the and tions of the Bank and Fund. The sue Si mm week since May 7 at the offices of the Treas¬ and to render periodic etc., ury, as a chairmanship of whom the Bank, capital of $3,175,000,000 subscribed by the U. S.; it provided for the appointment on the United States agencies such as the Export-Import who have served high posts in public and private tive Directors act fi¬ institutions with the for¬ malities in the next month - Di-1 one financial institutions, The Execu¬ eligible for membership and may , in . twelve Executive are an- • at, Washington rectors are many United international courts of the United States. Agreement; it fully empowered Secretary of the Treasury to :i and The first representing each of the five largest subscribing na¬ tions and seven elected ; by the have Corporate Directors. their meeting rectors, debentures in this country where the approval of the Government of Senate; it created i held September. the United States in those matters such as assenting to the sale of the .Teletype N.Y. 1-344 Governors may Exchange (Associate) 2-9500 the of Reserve gations embodied in the Articles Street, New York 5, New York Telephone HAnover Board in The 49 Wall as sentatives of the United States in the Bank and Fund, to coordinate designed New York Curb lations, delegated fully operating authority to the Executive Direc¬ tors, and elected seven elective known — ments Act which temporarily to undertake Members New York Stock Exchange met and required, to give policy guidance to the repre¬ the Laurence M. Marks & Co. organizational of the United States is adopted in the summer of 1945, at which time also the lending authority of the Export-Import Bank was ex¬ panded by $2.8 billion to enable it UNLISTED TRADING DEPARTMENT Governors States Monetary Fund. United participation was author¬ ized by the Bretton Woods Agree¬ -1 of Governors for the other member nations. Among the Executive Di¬ tional INDUSTRIAL, PUBLIC UTILITY, RAILROAD Board initially in Savannah last March, 5 ^ consisting of the Secre¬ tary of the Treasury as Chairman, theSecretaries of State and of Federal obligations or The ^ NAC and the investment markets of its the heads or ad¬ ministrative procedures and regu¬ Council ,r-.( "vv.- Secre¬ the visory \ of their central banks. Commerce, and the Chairmen derived from the sale Bank tary of State for Economic Affairs, provided entrusted other hand, funds be em¬ ployed by the Bank in its opera¬ Collado -j\ participations reasonable supplement private investment by the Mr. Will Clayton. Other countries have generally appointed their insurance companies and as both to persons the the ernor is the Secretary of the Treasury, Mr. John Snyder, and absorb securities, and points to need of legislative by states to permit these institutions to purchase. Registration with SEC and listing on exchanges expected. principal means Looks to banks practice of of appointing and Fund. The United States Gov¬ action world, On the a same the States United activity. payments. - cl-tinery of the one followed long-range balanced growth of international trade and balance of role Governor and Alternate a Governor and most countries have Says requests for loans have been received from Chile, 53 Denmark, France, Poland, the Netherlands, Czechoslovakia, Luxembourg and Iran. Asserts principal purposes of Bank is to promote since the Bank has points • N -f-r4 St. * Philadelphia Louis ? Pittsburgh - IS® Volume Number 4550 C 164 THE COMMERCIAL & FINANCIAL CHRONICLE " - r / 3049 Selling Savings Bonds for Good Public Relations By MORRIS M. TOWNSEND*. , Director, Banking and Investment Section Savings Bond Division, . u. S. Treasury y. The As Treasury Department is deeply grateful to the Investment Bankers Association and its bers for the help you nancing the most costly of all gave mem¬ in fi¬ ■;>; in wars, 1941-45. This not is merely grace¬ ful In be¬ and lated praise. the early of of war days We I finance with rectly; the in men Second Federal;: Re¬ District serve I and M. Townsend Morris Importance of Public Debt Management what investment bankers, brokers and did there; $6 billions security dealers sold more than they in individuals of bonds to worth ''' '.I •' ' * '"-V >, fact; whether we like it Sale of E Bonds or not the public debt exists. Every decision concerning the ; Now how do we stand on E management can and will affect Bonds? Over $30 billions worth, cash value today, are in the hands your bread and butter, your busi¬ of the people. Since January first, ness, your family, your children despite all you've heard and read and grandchildren. know has of the means we coopera¬ It has been the oft-stated of the policy Secretary of the his predecessor,. present Treasury and Chief Justice Vinson, to down possible and practical. That Victory Loan the debt cash fast as has balance duced to a as pay was now been We have here a responsibility 1946. cannot evade, an opportunity been receipts surplus banking system. That The Federal Budget have cut away at least The redemption; rate has danger early and worked with the that way is up to Congress, not the declining since last April. Treasury to forestall it. The Treasury. And so is the reduction cannot ignore. (Continued that the financially , the public debt the sale of United throughout States Savings Bonds to indi¬ public credit viduals plays an important part. given to this York, were later used the nation. has never Proper been We have team for their devoted March, brainy work. We do so now. splendid and did You war I best during the splendid. here to ask you to continue. am ; your and your best was has war not ended I hardly that the Treas¬ ury's problem is your problem in a very personal sense, for upon management of our 260 the proper dollar billion debt de¬ of private fi¬ for years to the come. national in this country pends nance course 1935.., The on page 3072) t hey get fcrdtiit others have cashed in. But not selling Selling than the The we are enough E Bonds today. in Savings Bonds more we redeemed the public creased sense for. hasn't in¬ debt. Actually Treasury will have retired $23 billions of matured debt distributing since securities, March, when the Dec. 15 payments are made, out of $48 billions that will billions a year and sales have ex¬ of these bonds ceeded redemptions of - ... this has been paid out of cash bal¬ created by the oversubscrip¬ ances tion of the Victory Loan — and part of that was from sales of Sav¬ short-term commercial than a billion and experts predicted credit quarter. The & IiORNBLOWER § •>,' . " § ' / ' . WEEKS Y,;jf ' 40 WALL STREET, NEW YORK 5, N. j . Members Principal i,'- Exchanges that this has seven wouldn't exceed billions. Savings The United down Portland, Me.; Providence; Baltimore; Bangor. cut six to States Bonds Division of the is very much a going Yet our sales promotion a long time—longer concern. of us here will live— budget is only $2,600,000 for the get that public debt fiscal year and we're operating to the painless proportions with one-quarter our 1945 staff— we just 411 paid employees in the 48 Townsend States and Washington. I might before the 35th Annual Conven¬ point out that spending $2.6 mil¬ tion of the Investment Bankers lion dollars to sell $8 billions Association of America, Palm worth of bonds is a sales promo¬ Beach, Fla., Dec. 5, 1946. *An address by Mr. Eastman, Dillon & Co -I * FOUNDED 1913 ^ * * '*' ' , \ 15 Broad Street, New r> 4 y' - " , V - . 1 * , ' York 5, N. Y. thomson & mskinnon SECURITIES 11 Wall • COMMODITIES Street/ New York 5 ■ .. 'w Private wire system connecting our offices in 35 cities in the philadelphia United States and Canada • chicago paterson • • los angeles reading • i EXCHANGE AND OTHER PRINCIPAL SECURITY AND COMMODITY EXCHANGES > r Chicago los angeles • st. louis • hartford easton Private Wires to Correspondents in MEMBERS NEW YORK STOCK " 'V'V . Offices: New York; Boston.; Chicago; Cleveland; Philadelphia; Detroit; obligations held by banks. Anyone who workings of bank knows V"" V . that sales wouldn't equal redemp¬ tions and firm our understands the to date by more a facilities helpful to dealers interested in financing behalf of clients. on due this year. As you know, came be the any before ; out¬ Americans to have more financial The maturing securities we've E, F and G Bonds so far 1946 at the rate of almost $8 been able to retire were mostly It will be than amount Most seem selling Treasury , them since about. worry than standing is now almost $50 billion, ings Bonds. We have simply re¬ tired $23 billions of debt with of which around $43 billions is held by individuals. We have been money we didn't need. for the in United States Treasury. need' remind you been selling for funds to reduce the debt. a Folger, Alden Little and members we can say: "I have my own busi¬ of the IBA staff—and I might add ness to look after—let someone a host of others. I want to pay else worry about the public's particular tribute to Perry Hall of business." Morgan Stanley & Co. for his or¬ Gentlemen; the public debt is ganizing ability and for the foun¬ your business. Shrug that off and dation he and his associates laid you'll have no one but yourselves for banking participation up. to blame if the financial ship of through the Second War Loan state goes on the rocks. We are not drive. Many of the ideas advanced going to have fair weather forever by Perry Hall and his assistant, and you know it. ; Barry Pay son, now Vice President In the over-all management of of the Bankers Trust Co. of New re¬ minimum working bal¬ from how on we must You have read the predictions $80 billions; you and I know that that Federal cash income this fis¬ borrowing on Governments can be cal year will likely exceed cash pyramided far past the four-tooutgo by $3 to $4 billions, which one ratio. means that the Federal budget is about E Bond redemptions, that E I want to add right here that the better than balanced, actually. Bond account has shrunk only 1.6% in the first ten months of bankers Of the nation saw "this Whether it ends the fiscal year we we Treasury heart of Andrew Mellow himself. United States securities thus taken out side from the first and the tion that would have warmed the It is my belief The predicted tidal wave of re¬ American Bankers Association has trained minds demptions never came. E Bond sample of what you contributed of this country have to choose now redemptions have exceeded sales, nationally to the financing of vic¬ between two courses. We can take yes, but to lose only 1.6% of what tory. amounts to a demand deposit of an active interest in this problem •. I want-to take this opportunity and lend every possible aid to over $30 billions in ten months of to thank "Chuck" Garland, Cliff wise management Of the debt or this inflationary year is nothing to the New York area alone. That is on our given ance and 1930, when it was $16 billion. tion cost of only $.36 on the thou¬ down potential bank credit by at upon least four dollars for every dollar of rely must adjust our thinking to sand dollars. (; . investment argument for assisting the hard di¬ worked been sale of U. S. Savings Bonds, Mr. Townsend points out both the effect of savings bonds holdings in promoting sound public debt management and the value of savings bond sales in improving public rela¬ tions of investment bankers. Says enough bonds are not being sold to small business and professional men, and recommends creation of an IBA Savings Bond Committee. Sees in widespread holdings of savings bonds a defense against demagogues who will propose scaling down or repudiating public debt. an . • i san francisco THE COMMERCIAL & FINANCIAL CHRONICLE The trial IBA Committee Thursday, December J2, 1946 Indus¬ on min Loeb & ported'to Co., the Conven t i o n is Chairman, * * plant additions to handle consumer < demands, domestic and foreign, for standard products; V ' ■; / new . '; starved Securities, of which Benja¬ J. Buttenwieser of Kuhn, C both > re¬ 2; The ti .-k for heavy in- 3. are effort should b 1 both by the bankers thems elves and the Building 5. Building ; gov- crnment regu- dating'' cies agen- to fpster a" wider market for - .• ■■E9BHHHH •" ».~y, '! ; B. J. Buttei\weiser\ aid and The text of your might some :•? >.■ ; up up of working capital positions for those industrial corporations which have been seriously disturbed by the efr fects of the war and by the high ' of the after-the-war care con- aversion period. the Com¬ "In addition, there will be a heavy -foreign 'demand for- our goods (both capital and consum¬ ers) after the war which may. well involve the question of long-term credits. The development of a r rendering its report for the first year following World War II, { inventories which will either be very low or in some cases non-existent; V In it , ;; taxation rate which has made ,'v, impossible thbbuiiding up of sufficient cash reserve^to take r mittee's Report follows: . .: replacement of machinery with new ■ industrial securities. in or .facilities : plant and out 4. ■' fflL ' ^ whole in the up-to-date machines; : e made r built by the. government; worn ■fH/rjjpBH good and that every of Retooling dust rial fi- nancing purchase part i; ^ Committee considers that be fruitful to review of the reports of its recent framework for - tween credits such call for complete will cooperation be¬ industry,- government and finanee -If the unfortunate experi* which followed the last war ences Dominick & Dominick be avoided.' No to are .the tions bankers can become a one ques¬ that,:investment fact should and play an important role in this field. Unr less we come into agreement on a workable plan now, at the end of the war we may find ourselves to_tally. unprepared on procedure, in which event it is not unlikely that .the extension of such credit will Established 1870 Members New York Stock Exchange function, of govern¬ ment;" ; Your 1945 Committee likewise— and, we think, properly—devoted considerable 14 WALL STREET, NEW YORK 5 postwar Dominick of to capital port: Canadian - attention its of demands of industry, as is attested to by the following excerpt from its re¬ the . , * ( _ "Throughout the War period the United States Government acted Affiliate the primary banker for as Corporation indus¬ try and as its chief source of new Canada, Montreal bonds of loan War funds. capital were sold to the public and out the proceeds large amounts' were plants and loans to industry..' Gov¬ ernment has carried virtually all of the risk. The necessity for this used to build industrial to make during War need not be debated here. But with the coming of U. S. Governments the function of raising funds supply the capital needs of in¬ dustry should revert to the invest¬ peace to ment Municipals markets." ; ^ That the investment banking dustry has not been remiss in its duty of purveying such postwar capital is irrefutably established Public Utilities by - i r the following {Continued on outline of the page 3074) Industrials Railroads Industrial, Utility and Municipal Financing Canadians Securities Bought and Sold . • on Commission Trading Markets in • Preferred Stocks . - ; ' : Industrial, Utility, Railroad Bonds and Stocks V. ; Foreign Dollar Securities ? KIDDER, PEABODY^CO FOUNDED 186j Members New York Stock cMembers V^Cjw York and "Boston Stock Exchanges and b^etv York Qurb Exchange Exchange Sixty Wall Street ' New York 5, ; BOSTON CLEVELAND N. Y. Private wires to PHILADELPHIA NEW flAVEN New Boston York ALBANY „• PROVIDENCE ■ Philadelphia NEWPORT Chicago , BALTIMORE SCRANTON * ' in¬ CHICAGO HARTFORD NEW BEDFORD SPRINGFIELD New York - READING LOWELL Teletype NY Um ■-- . ! Volume Number 4550 164 THE COMMERCIAL & FINANCIAL CHRONICLE ■ l Pointing out the recent slump IBA Railroad Securities Committer under chairmanship of Fairman R, Dick, | notes reversal of investment attitude in current year, and states decline in in railroad securities as indication that is losing ground, after a few years of re¬ vival, the IBA mhhhh Railroad Serailroad credit ShHH curities MHHWppB| prices of railroad equities Com- .by Fairman Rb pick -Of Dick Merle-. & Commerce at. a time when every effort, both of gov¬ ernment and the railroads, is di¬ Commission's rected policy of of tricted Fairman R. vital-to our re- earn- hope that in its forthcom¬ ing rate.>der cision, ". increases ade¬ quate wiU be granted. The text of the report follows: on , quarter of a collapse. earnings, the! railroads in order to sup-; 1938 railroad earning power; to all.intents and purposes Was obliterated. : b : . increasing the capacity to plication of the railroads, espe¬ cially the opposition, of the Sec- i retary of Commerce, the Secretary of Agriculture and the Director of t.. 'Tn;the sprang of 193§ the Com-/ qiission/met ,the; traffic suffers a severe Economic Price the decline, railroad earnings can-disappear in the same way they disappeared Stabilization of in the first quarter of 1938.' the as well a& various 'State regulatory commissions. : and Administrator? opposition 1 - ; There is considerable discussion pf, the earnings the railroads of It. is regrettable/that the con^ during the war years, and analysis emergency by authorizing a substantial increase fidence expressed.Jn .oyr report of reported earnings for 1945 in jln rates, whiqh; more than offset for 1944 no longer appears, fo be Connection with amortization of look" elsewhere if we are to dis¬ the. rate decrease of 1936. r/f Rail¬ justified. It would not bq correct defense projects and the offsetting cover J the" cause of the; present road earning power recovered and to stafe today that /'there is like¬ reduction in taxes. ' It is pointed decline of "confidence in railroad q new harvest of bankruptcies was wise nq reason to believe that the out that those adjustments would securities; / vr ;b'bbbb///'"-A/' avoided, /:. Railroad credit, how- lessens of 1936, 1937 and 1938 increase the rate pf return on in¬ The developments which are re¬ lever,. is still suffering, from the have beep forgotten," The lessons vestment after depreciation from sponsible for the decline in rail¬ shock of this experience. of those years show the ' r danger of 3.76% to 4.47%. ; road credit clearly do not lie in - "The railroads today are" mid¬ a -narrow spread between reve¬ The Commission further devotes for. rah transportation, .bitbis necessary to "expresses Dick economy ply the current demand irig power, but : HMMHM may governmental restrictions . Smith, attacks the Interstate v grant rates are mentioned, and considerable space is given to evi¬ dence and arguments submitted by those in opposition to the ap¬ Holds condition due Reviews forecasts of future ; ;. railrbad traffic, and concludes that if sound credit conditions are to be /'. restored, investors must be assured that rails will not again drift b|*V^ y into lower traffic volume and inadequate rate structure. '. to mittee, headed . be termed in relation to cancellation of land , ■ . > Your Railroad Securities Com¬ mittee, in its report of November, 1944, and again in 1945, had the pleasure of recording an impress siye improvement ' in b railroad eredit. Today your committee uofortunately is compelled to report the loss of much, and in son^e all of the cases i has / b been - described such exists today as . "Current pressures V qn y tq the rail¬ rate structures .are already serious. Increases.ip wages, very increases in the cost of materials in and last six months investor confidence ; has'"received a pro¬ found shock. Railroad: .equities have suffered a drop in price which could correctly be termed a cycle similar to that of 1936, ;1937 and'1938. The surcharge that- pointed tunately, traffic continues to hold; in fact, it husjneteased. > If, prior, were tee: fpy .11144, as follow?- the state of mind of investors and the way in a supplies and the suspension of the rafe surcharges have alb . U s postwar . ^decline. in traffic, The In our three reports for 1944 and 1945 main causes the for improvement were of railroad pointed out: jb. 4 j > I certain for . /there situation. are b The Bureau 1940 volume and current rates or. results The The removal of maturity dan-; deficits.// by anticipatory payments refunding operations, believe 1937 that show no a celed. discusses; theipresenf earnings' of of working and. expenses; and crued depreciation. cisms of to the railroads ;;•// (Continued on Municipal Bonds CHASE Secretary of the Treasury—186l*l §64 - - - - - - -bond THE CHASE v Department- w - OF . THE 1 ^ NATIONAL CITY Pine Street Tel, HAnover 2-.6000- of have-been - OF corner NEW of Nassau BANK YORK . Bell - . . . System Teletype NY i-ioio 1936{, forgot-i wages result were of Increased lower rates ahd and as q higher In the ""autumn of Dealers in 193t growing traffic .declined.. The ..operating are hot ratio rose rapidly, In- the first State INDUSTRIAL, PUBLIC UTILITX r»'^p.;Vf 4 * * Municipal . ^ J?; < ,i; .?>•• *V"' Siv/;y 4Y **»V *. J • and ' r? * ,*;V((•? ''v.v'-": Housing AUthOrity Bonds i|| FOREIGN SECURITIES //b/';i///"b/.b'v v.;/-'bg:b;/:; 1 UNLISTED TRADING DEPARTMENT 'Inc., Harvey /b////b;;;/./|:/b SINCE 1863-b:: Wertheim Members New page high grade United States Government Securities X<y investment account appear to indicate an in4 State and other P. York & Co Stock Exchange new york 52 WALL STREET, HAnover 2-2900 NEW YORK 5, N. Y. Bell de4 unac-4 These criti/ the railroad New/York City Securities SALMON capital^ especially tq pairment of the gains that have a preciation; rafes'are^ raised ta compensate for the railroads, aU stated in dollars, increased cqsts: the: situation. can with nq' reference .to /the spread he4uvedb•-If,^howevqr,: rates and between revenues remain they; ape WA Certain advantages level There is detailed discussion of surcharge iq rates wps cant In the summer of 193f been made, nor can the deteriora¬ points. belief that the railroads high v and large reason lessons the 1938 and turther tion in credit be due to space to criticizing investment account, fen. In 1936, traffic, was rising! operating ratios were falling and earnings increasing. In Decem-i Although the low level of net ber earnings today does not permit a strengthening of the fi¬ nancial position of our railroads, there is as yet no significant im¬ b of the. Commission ebb./././ /.ir .;;;/ //.- ;/ "There is likewise Increasing recognition of the importance of our railroads as the very, backbone of our do-? mestic transportation. railroad recognizes the danger in wages. gers p. v ings. That this disaster will ac-j tually take place is by no means the y tant reductions in debt and ./• fixed charges.' 444b'b4'b;b the spite oJ| level * of riet /earnings that Transport Economics and Statis-? permits the building > up of tics of the Commission has pre-j safety cushions in current as¬ pared a study analyzing railroad sets and makes possible imporearning power on the basis of j considerable Careful 5 mission p. A • T the event declines. ready resulted in an increase of strong credit grounds for belief .that the Com-} then > report points in the operating ratio in of substantial increases in collapse. Income bonds and junior volume. : If, following the war, mortgages have declined in spme railroad traffic declines: mate¬ cases as much as 40% and there rially, the railroad operating ra¬ are but a handful of roads whose tio will show further increases, bonds do mot- reflect a definite and it is possible to imagine a impairment in credit as compared decline in traffic volume which with high-grade corporates in will wipe out all railroad earn-j other fields. in expenses traffic mental, and essential factor, out in the report of this commit¬ road as and nues in the field Of governmental inmates j^s been removed, wages study of the Commission's report quoting from their report to Con¬ restrictions on earning power. The have' been iq Ex .Pqrte 162 and Ex Parte 148 gress for the year 1908. Criticism ; increased, / operating dangers of a situation^ developing ratios have risen 5 reveals no mention of this funda¬ also is directed to the unnecessary points." For¬ but ground gained in fho last tWO. years. Credit what might be termed the mate¬ rial factors affecting the railroads Teletype—NY 1-1860 3060) j/ THE COMMERCIAL & FINANCIAL CHRONICLE The Public Service Securities as well Chairman, reported to the IBA 35th ume despite in 'w ir' ypwagfe, mf w|H|v Ri J'UHBR vol-. of debt - financing . compared with 1945, the cur- rent and ing see ^ com- years Mp» in should .\ ^ . Duncan R. Linsley ex- * .4 - X We have witnessed during the 1944———— debt financing 1945, which was the a very stock $503 1,221 1,089 $118 peak sub¬ fNotes $109 56 232 27 83 Total • $730 1,509 1,199 55 410 76 332 13 114 770 40 24 823 11 1942— 1941———. 643 1940————. 759 prices resulted in • duction offered. Financing by one company — in the form of tures due serial 1971 ing rising an bond average Preferred fNew Year Stock Money $33 $219 1945 88 v'-v;.' 1944—— —— notes for reached in 1945. over 221,000,000 of bonds werO sold at 70% of the debenture and approx¬ financing, includ¬ imately 20% of the note financing during ing in the latter category the sale undertaken the In 1945 the $1,- an average net interest cost to the current issuing companies of 2.88%, the 18 *18 1 4 *Ten months ended Oct. 31. XTXf none - 8 12 fFor account of the operating com¬ $For the account of the holding company. pany. all time high sale of common and both for new account of the utility company stocks. The volume of the offerings provided the to real test for a market, and presented nine during the resulting in the utility current 000 ceeding $500,000,000. the on Of such offering price of Ohio tober and accounted an for UXXX ;j - ;uv,:|7 ;v v - X'" y>0$ public aggregate history, ' ' •• ' issues, » • ,'1 '•7 -V .• „ y "xr- vy-j?' A'" V^ , addition In . ■' '• . (Continued *;' v'Z ' }$$■.?■ ,ii- 77**' v\rt to !>.-•'•; * j,. , /1 ' >•■ • 0• ■ X utility on '777 X • »• ,/■ '$pc - 7' " XXX' X \i 'xX; > -' ,*.A 1 •' f ; ..• ... ;■ *>•«;,/ ' • ■ ; • ""v,";. '•■» "!^ '/'/'! \ , V <*77- :\ .X. jX/' j w~ > '< •<*•* v "-'v' capital new . 4 , - fr. ■ : frequently • -» •]$& fx v '» : Smith, Barney & Co* . equities 3068) page -Oo. ^oof.■-•■;, .. ;kt?> ; underwriting ' offer¬ new Benefits To Dealers /--.'X .; " ; < " ex¬ In spite of volume of a ■ 'S % •)£ and amount an ings far in excess of any in recent $150,000,000. over . offering the market in September and Oc¬ amount, 4,500,000 shares with Stocks in the sharp setback experienced in volume, a r public companies to public year common close concern preferred company offering of approximately 7,000,shares, aggregating of were investment banking busi¬ ness, which will have distributed holding companies, of 1946, pe¬ reached in the distrib¬ the equity stocks of accelerated during the first months common and for the money market in public utility companies, problems which electric and gas to came riod from May to September and at one stage a virtual saturation 300% of the next largest year to date. The issues fairly rapid succession in the /of V"PiVlXXP■ XXX-oXO /XX .X'ftX •./;,:>•XX Boston 9, Mass. 75 - 13 68 utility 53 State Street $219 ,-X 14 42 prices. 30 Pine Street $186 > , 4 1941-^— based New York 5, N. Y. Total 95 5 $220,000,000 in do 11 Dick & Merle-Smith following Common 65 16 3V8 % deben¬ total of bond financing for 1946 accounted the • 1943———. 1942—-— — ? 10 V;'! of of the total in Sales was will not exceed 50% re¬ senior common JPortfolio ution that the of -Common Stock Calendar point appears volume indicated prospect for the balance of the 000,000—an it the table (000,000's omitted): These year, com¬ amount in millions of dollars or $77,500,000 current and $20,000,000 of in stock financing in principally borrowings from contemplation prior to Dec. 31 of "term loans" not publicly the current year will raise the total of preferred stock financing year. Including financing in for 1946 to approximately $285,- promissory notes issuing increase in preferred and stock financing, the *Ten months to Oct. 31. fComprises banks in the form of the financing has been the substantial Preferred by Columbia Gas & Electric Corpora¬ stantial increase in preferred and common Debentures 16 utility companies tion since 1936, and by (000,000's omitted): Bonds 344 in the United States as compared principal amount of year financing to approximately 2.70%. Contrasted with the sharp during the war period in millions of dollars 240 current year 1946 a sharp drop in electric and gas debt electric and gas utility companies 1943— .y by investment bankers in timing their offerings. The Com¬ mittee's full report follows: with the of of amounts lowest of any year, ease of money and cost panies for the first six months of 1946 of *1946 ^ 1945—-—.,—- ercised the volume of Division Utilities reveal; the following yearly sion BH iMMBL-iMaWM care be companies. Comparative figures obtained primarily from reports of the HHK orderly market, in port¬ held stocks *1946--.—— maintain an common Year utility equity financing and urges, in order to of Securities and Exchange Commis¬ substantial interest as holding companies dissolutions and recapitalization. Cites A. T. & to folio by holding Public will increases as plant expansion heavy financing and looks for continued public utilities debt refunding as well as large amount of new capital issues. Warns proper timing of-of ferings is matter of concern to investment banking industry. Annual Convention that, drop Public Service Securities Committee ascribes trend to IBA Committee, headed by Duncan R. Linsley of The First Boston Corp. Thursday, December 12, 1946 • •" ' • purchase large blocks of securities from institutions, individuals and distribute them secondary X or •' — Distributors ^V' \ \ investors, often through special offerings. ::X OX;/XXXoXXXX:XX:/- X'.rX X Besides Underwriters to X-* "XX V w'K\„x-\t and estates /• > X v' X'" f:X /X,;-:XX •• X/XX sharing the regular concessions I ' offered those ■> * . w «■ i x ' dealers who ' * ? ''' 7 *&■ 71l: V7v x * •' participate in Members New York Stock Exchange New York Curb Exchange Philadelphia Stock Exchange Chicago Stock Exchange Chicago Board of Trade Commodity Exchange, Inc. such distributions, 7"1' dealers additionally by acting V ,^4';svf:fc> v''\ v f 1 r» 1 can as * v also benefit originators— V, • yr ?i * 'r r \ •/ bringing suitable blocks of securities 120 Broadway Empire State Building substantial The Sherry-Netherland NEW YORK CITY BRANCH PHILADELPHIA, PA. SCRANTON, PA. EAST ORANGE, N. J. ALLENTOWN, PA, MORRISTOWN, N. J. SYRACUSE, N. Y. - -* u i new or capital issues to this firm; ; '■ (:-7:-7c';777;;7v '• If; ' '77'^ J'&v "!'r -,j. :;7;;::::; -:7';.V.'; •..7-^;7;-: ,..;7,7 SMITH, BARNEY & CO. OFFICES \ POTTSVILLE, PA. 7''n\i 4"* Members New York Stock LANCASTER, PA. YORK, PA. BRIDGETON, N. J. MS: 0\,.1(;.X Exchange 14 WALL STREET, NEW YORK 522 FIFTH AVENUE, NEW YORK PHILADELPHIA , 5 . N ®71|| -t * CHICAGO 7 7^ | Volume 164 Number 4550 V -V Without making any recom¬ mendations, but with a note of warning that further and large- scale sale of to the ties government THE COMMERCIAL & FINANCIAL CHRONICLE: 3,053 encouraged to remain on the side¬ lines. The downturn in, prices IBA Governmental Securities Committee, under chairmanship of Aubrey G. | Lanston, reviews current Treasury finance and its effects on market for Federal bonds. Reports prices of long-term issues recently improved, but not buoy¬ ant. Warnscontinuous expansion of government bopd sales to non-bank investors diverts capital from industry. securi- rates would interest term move publi^ this of ters was mat¬ following the Drive) ately kind would be the subject of lengthy discussion and that some decision might be reached on whether or not the Treasury would endeavor to lower short-term interest rates. The tory A. Vic¬ last G. Lanston report of your committee is largely an outline of Treasury finance. and Treasury security inarkets during the last year. The committee makes recommen¬ no It suggests that a major dations. objective intimation came with the announcement that the Feb. via a thus Certificate, Treasury 1, 1946, %% new continuing the borrowings which had been established earlier in the for rate such reports Conflicting war. and analyses continued, however, with respect to whether any decision had been made that might indi¬ cate lower rates for any prospec¬ tive long-term Treasury of wartime financings the light of the changing requirements of a peace¬ in reviewed due made be would any of refunding Certificates The of decision first the Loan Drive of October, 1945. The full text of the Committee's report is as follows: be in that ities since the the generally known January, 1946 (immedi¬ also It changing position of the Federal Budget. In the President's Budget Message of Jan. 14, 1946, the fig¬ ures showed a contemplated re¬ The Victory Loan Drive opened 29 and closed Dec. 8, 1945. The demand for Drive securities Oct. tirement billions 7.1 of in the larger than had been expect¬ Treasury's outstanding debt by the ed. Total sales were $21.1 bil¬ close of the fiscal year ending lions. The demand for the longer- June 30, 1947. If the Treasury term marketable securities was contemplated debt retirement, larger than had been expected. then it seemed that the prospects obvious to came It also be¬ temporary that they had very little to gain by holding out for higher prices. Consequent¬ ly, only a slight increase in of¬ ferings was necessary to reverse the price trend. holders of these It also some bonds believed was generally that many temporary holders of these long-term Treasury bonds would prefer to defer their sales until the end of the so-called "six- months period." The next popular market pastime was a series of predictions prospective as to the size of such selling. The figures high as 4 or more billions which, according to gome, were ran as all to be sold in the to days. 9Q ensuing 60 All of .these things combined to reinforce the down¬ turn in loans. A further consideration was the time economy. lose from withhold¬ ing market purchases. measurably lower. Treasury security prices. Several uted other factors followed been practice a approved While this (which had limiting the changes in their daily quotations to a range of 8/32s when price daily; i.e., on days changes might have quoted at a greater variance than 8/32s, the individual dealers been tended to shift to Since this an "order basis." the was usual case wide recessions in Treasury secu¬ rity prices were avoided. they occurred they might Had have Treasury financings; or in periods of bad war news aroused j; concern throughout the country, or have given comfort or retarded . propaganda material to mies. our going on, some1 ene¬ This practice was still the rule during the spring of 1946— questions as to when it might be abandoned rested on opinions of the best timing with respect to the national interest. During the withdrawals of war deposits which were open-market policies of the Banks Reserve When some found it necessary to sell securities longer than cer-> tificates or bills in preparation fori tion of the market. of these banks War Loan Calls they prising because the these longer price decliiie from the 106% peak of April "an order basis" made it the of price level of Bank Eligible securi¬ been ties had bank created by several continuous purchases. part of those wartime difficult for those who wished to ury, sell policies, had generally rity dealers who handle the bulk as of transactions in such securities this readily was as some a omitted of¬ commercial banks /(Continued on page 3067) ..*■■{ ferings to the Since wished. as long-term of 214s due 1959-62 and 9.8 billions of the 2%s due 1967-72. These Treasury bonds were further re¬ large purchases were against .background where: • - the case; i.e., the was, well-known, buyers were wartime Goldman, Sachs & Co. 30 Pine Street, Investment Securities market, moreover, was gradually becoming cognizant that the debt retirement might reach a total closer to 17 or 18 billiop offerings .'were over, and Commercial Paper .than the 7 billions included in the J Commercial & Travelers Letters of Credit (b) Many people expected that Budget Message and that this debt (the level of interest rates which retirement might take place dur¬ criiight prevail following the Drive might be lower than that which pointed up the following: it was obvious that the war loan deposits commercial banks would be The expectations of those who purchased the longer-term mar¬ issues were more than suffer pricer of 106 %* on April 6,1946. things conspired to bring this about. ■ the 1945, was ics of money commercial banks would comparable loss in their in their income fromjsuch and for these reasons the commercial bank demand for eli¬ British Treasury bonds might be substantial, thus indirectly in¬ creasing the normal demand for longer-term ineligible Treasury gible believed 106% Dealers came longer- for the of 1967-72 it be¬ obvious to buyers that they it all reached was Treasury 2%s believed that — When, however, as high a price as markets, interest rate controls, etc., were such that was Underwriters—Distributors issues. borne out, then the mechan¬ our a PUBLIC UTILITY, RAILROAD and INDUSTRIAL SECURITIES • ' UNITED STATES • GOVERNMENT SECURITIES STATE and MUNICIPAL SECURITIES RAILROAD, PUBLIC UTILITY and INDUSTRIAL SECURITIES W. C. Langley Blair 6- Co. Members New York Stock & Co. Exchange INC. 44 WALL ;/V | BOSTON PHILADELPHIA STREET, NEW YORK 5, N. Y. * V EUFFALO > PITTSBURGH CHICAGO 4 ' ST. LOUIS CLEVELAND * * SAN FRANCISCO 115 Broadway 10 Broadway, St. Louis 2 sources; quite possible that our Treasury might emulate this action. If this were Federal Street, Boston 314 North crease Government lowered the rates of interest which its Treasury paid on short-term borrowings from the British banks. It 75 Chicago 4 Philadelphia 2 Treasury security holdings; a de¬ A number of October, Chestnut St., substantially t reduced; as .< a con¬ sequence a f 208 So. La Salle St., 1410 in fulfilled by the subsequent market action. The 2%% bonds reached v./ In Foreign Exchange ing the calendar year 1946 instead over the longer interval. This of 'had existed prior thereto. ketable New York 5 The .that unlimited might otherwise be "scarcity" theory in some degree, thought to be substantiated. (a) The thought was prevalent there might be some even¬ tual scarcity of such bonds since ? :the than moved a offerings / of new commercial Since the Treas¬ was The Treasury sold 3 billions of the .experienced difficulty. This was not sur¬ some contrib¬ Treasury securities to do so Fed¬ designed to meet money requirements were being largely confined to this sec-< eral years war coinci¬ unexpectedly large debt retirements. In the wartime economy it had not been neces¬ sary for many banks to secure their war loan deposits by shorterterm Treasury securities such as certificates and bills although the dent with the small group of government secu¬ asTwell.During the they adequately prepared to> not meet the large loan of about was commercial banks found that encouraged) and At times the volume seemed to increase. were had little to without a reduction in continued the volume of offerings. New York 6, N. Y. *moi*i |iin V, wHW>rtliliil«fiHIH<'iTilM>WHffMf"t-f if . &0S0'}00 0000000^ mw0000iU0' ■■■:: THE COMMERCIAL & FINANCIAL CHRONICLE Thursday, December 12, 1946 Report of Municipal Securities Committee Reporting further rise in a the bonds in question, mu¬ nicipal financing with a steady lowering of yields to investors, the IB A -Municipal Securities Com* m i tt e which !>. & Corbet t, Chicago, the still settled un- prob- lem -regarding clarifica t i o n of of and federal constitutions. |HI The Call Provision in a again recom- HfKf:' BBnEnnEH George B - ill, which relieve marketing SEC. of the State political units shall not be subject to call or redemption pri¬ or to their fixed maturity, unless Committee right to exercise such call or redemption is expressly stated Oil the face of the bohd." : the Vr year for four consec¬ . ^ the "Bond Buyer's" in¬ yields of 20-year general highs were: 1.69% The importance of such a re¬ quirement has become clearly ap* patent through the bompatativel& > on record and 1943; 1.59% September 1944; nicipal Texas in in August 1.35% flected a r The same yield of index 1.67% as certain of mu¬ in availing themselves of legal technicality through units Arizona in and in which to force surrender of vari-, in their of ous outstanding bonds pridi* to ftiatufity, despite (the fact .May 1945 and 1.29% in March and April '1946. activities recent some November confidence assure that the bonds issued by Martin obligation bonds of 20 large cities, the would investors and be helpful tp municipal credit if our states would enact legislation requiring utive years the prices of municipal bonds reached an all-time high. dex " ... Municipal among municipal bond jurisdiction of from report follows: Based sur¬ and its The text of the During each L. ^ It , mends passage Of the Boren would is Bond . and the Hp|^Ei callability outstanding bonds bonds benefited turity with payment of interest ofiiy to ddte Of surrender, or to Compel them to be exchanged for refunding bonds bearing a lower rate of interest, would impair the Contractual obligations of the ap¬ pellant in violation of the appro*priate provisions of both the state of is Chairman, calls attention to and the dis¬ the such bonds before maj render of of George Martin, Burns Inc., of presumed to have been accordingly. To force e, Martin sale its in trict that bonds the not were sold re¬ callable of ered and that and the received prices the of sale not were on their so avs consid¬ municipalities that basis in Taking bonds. advantage of some developed legal tCchhicality for. the ' purpose Of gain at the expense of holders of obligation made,' in good one's " faith and purchased on that basis does not reflect credit on the bor¬ rower. Callable Municipal Bonds the increasing number of With municipal issues tional features of another, IS BROAD STREET, NEW YORK 5 tion of we INDIANAPOLIS PITTSBURGH directed to the atten¬ clearly, indicating offering lists, in¬ dividual and general, as well as in in PHILADELPHIA TRENTON op¬ character or members last July the our of importance ALBANY containing one abbreviated advertisements, etc:, that the bond is callable, or called circulars, WASHINGTON if thai be the We case. recommended further that (Continued on page 3064), Carl M. Loeb, Rhoades & Co ESTABLISHED 1886 Underwriters : an Investment Securities UNDERWRITERS BROKERS DEALERS 61 BROADWAY NEW YORK „ . _ Philadelphia> Pa. Dayton, Ohio : # Baltimore, Aid. Lexington, Ky. . CINCINNATI '0M ^.'Boston, Mass.'} East on, Pa. - Portland, Me, ' / NEW YORK 0Jjdndon,JENgUMBf ^ Memphis, Tenn. Geneva, N. Y. ,. -Geneva, Switzerland 's 0 Buenos Aires, Argentina > • • Aubu'EN, N. Y. Hornell, N. Y. Syracuse, N. Y, * * • ■ ^ '■ ■ Elmira, N. Y. Ithaca, N. Y. •Middle.town, N. Y, Utica, N. Y, Z * Watertown, N. Y. J Volume 164 Number 4550 THE COMMERCIAL & FINANCIAL CHRONICLE ' : The Stock Exchange Relations Committee of the IBA, headed by IBA Committee & Co., in its con- vention, dis¬ cussed such report to the 35th . f , .. briefly, topics as V: In¬ • and iry; - • corporation of Member - recapturing prewar position in foreign field. Notes efforts of public relations department of NYSE, and discaisses ehiployee's ; pension plans and unionization movement. : number i . Stock change Public Relations, . i Charges and Employee Re¬ lationships. stock offered to holders R. de LaChappelle and other matters the report states: ; The question of ^"standby" of¬ ferings has assumed considerable importance in recent months of market weakness because of nu¬ losses sustained by under¬ These standbys were from 22 to 11 days in duration, the average being 17 days. ■ The ratio of of¬ ferings ranged from one share of¬ fered for each 12 held to of common for common, preferred for preferred, convertible bonds average preferreds for the offering of common; even entirely differ¬ an ent stock to common' shareholders (I.e., Cincinnati Columbia com¬ the New York Stock Ex¬ change, we find that there were 23 such offerings during the first ten months -of 1946,"under the usual standby arrangements and underwriting groups. writers. These standbys have been in various forms, such as offerings to of mon, on Regarding and . and examining just classification, that of common one merous ; Reviewing Commission these . /Gas. & Gas and .Electric Electric). Divestment quality has been no for each one share two held, the general working out at about one Compensation has ranged from a minimum of 1.2% for to price for based % on additional compensation based the "amount 1 unsubscribed. Whereas the majority, of these standby offerings were successful, nevertheless four of these offer¬ ings by supplying stockholders; copies of the "red herring," and a letter explaining that the price would be decided at a later date, when the formal exchange * // ; offer ; on . an on average the of about in addition there is generally a , eliminate kinds of all con¬ stockholders' , without One constructive step designed complaints. ' The cost of guaran¬ teeing that protection against that It is of interest to note that of the stocks involved, about 85% fractional percent of complaining stockholders has been too onerous stock offerings was recently evidenced by the action of the Federal Reserve Board, in declined marketwise from original for permitting stockholders of for. underwriting firms, offering date to expiration date, tion with the margin between success and failure., being uncomfortably ment' close in several whose .securities are | cases. i : The aggregate profit on # suc¬ cession of successful deals more often than not is wiped out by one unsuccessful deal. The recent weak markets bring into focus the necessity of shortening the stand¬ by/ period and, if possible, to otherwise lessen the risk factor to in the. time on sult in of the A reduc¬ commit-' these offerings would re¬ saving to the corporation being under¬ written and -would /substantially reduce the underwriting risks of security firms. ' - v.- .. . .. J, The a Tecent Standard Brands, preferred stock offering, in¬ volving the use of the "red her¬ ring" prospectus to reduce the pe¬ riod of standby, may be a partial Inc. facilitate to cor¬ a poration to buy new issues of the securities, corporation's margin. used ties of The same on credit 50% may to an buy outstanding issues operating company which is simplifying its corporate structure 1 under the Public Utilities Company Act. / - (Continued ' on ^ Holding •• page 3061) com¬ which sliding scale Statu, Municipal and Revenue Bonds Lehman Brothers U. S. GOVERNMENT STATE MUNICIPAL MUNICIPAL CORPORATION BONDS • BOND DEPARTMENT ■ Chemical bank TRUST COMPANY * " ' 165 Founded 1824 Broadway, New York 15, N. Y, PlIIXPS, FKN.N , be ; by holders of stocks of utili-, who subscription the fixed standby pensation desire-to take place. ; By re- < the period of standby curtailing the time in which stockholders may become; fully informed, the; uncertainty which normally accompanies the waiting period is minimized, y would ducing icy of issuing rights to run from 11 to 22 days is predicated upon ceivable In this par¬ days the underwriter. "The present pol¬ the of holders. ticular case, it was possible to re¬ the exchange period to five were not, in one case, only 38% of the stock being subscribed t seven. 4.7% of an exchange relatively small was a with . guaranty against loss and unsuc¬ cessful standbys have been nu¬ merous and costly. Ex¬ This to duce Firms, For¬ eign Business, 30SS , offering f/V^-and recommends steps be taken for renewal of listing of foreign issues "Standby" Offerings, . solution. on Stock Exchange Relations, whose chairman is Richard de La Chapelle, holds present period ranging up to 22 days' duration, involves unnecessary risk to underwriters and has resulted in heavy losses. Renews statement of" advantages of permissive incorporation of member firms Richard de La Chapelle of Shields annual A., - _ Ai Co. ,THE COMMERCIAL & FINANCIAL 3056 Committee Active Federal Legislation In Walter A. Schmidt, its brief statement to the Con¬ a vention, Walter A. Schmidt, of Schmidt, Poole & Co., Philadel¬ phia, the Chairman of the Federal L egislation Committee the IBA, ported tive legislation can now re¬ the on activities Abescon during tails the of on its meeting at 26th. The de¬ at Governors of of his committee Jan. the program were ex¬ the belief that plained and discussed by Chuck Garland and Murray Hanson on their nationwide tour of 28 cities during- the in the current and year expressed forthcoming session of anv tion would be -i; enacted which putes in the < , difficulties - Schmidt A. Walter settle outstanding ■ dis¬ and administration of the The Securities and Exchange Act. text of the report follows: \ ,rJ The past year has been an ac¬ tive one for the Federal Legisla¬ tion At Committee. meeting ernors, "must" legislation f hCS!1S HH nnt cnnsS legisla¬ would !■ spring the of the Board ' of Gov¬ at Bretton Woods, we re¬ schedule of the heavy of Congress on construc¬ tive spring. Because Congress, new and be expected. Holds progress has been made regarding Securities laws to the Federal cept the Boren Bill, on ex- which the Securities Committee yesterday, but the has been laid and, particularly in view of Chairman Caffrey's comments on this sub¬ ject yesterday, it would seem that we can reasonably expect long overdue action along these lines Municipal reported groundwork by the Congress during the com¬ legislative program * . position. While these talks were progressing, we had the break in information to dealers and inves¬ tors the market and the problem be¬ came an academic one. I'm told a that prior to the effective date of registration statement without It also pointed up the fact that one of the principal purposes of the 1933 Act is thus being defeated. The solution of this problem is one of running afoul of the law. leg S do not believe Pr°Sram and we that lt can be completely resolved a change in the law. In without the meantime, as you know, we been cooperating with the have Commission and the NASD on the "red Commission's herring" pro¬ endeavor to improve posal in an the situation ; which developed since the Higgins decision. On April 16th the SEC pub¬ Chairman Caffrey said yes¬ conference here that this proposal is a "dead" one at the present time. terday at press a On June 20th the SEC released its proposal to "Safeguard Inves¬ tors in Unregistered Securities." This proposed amendment to the 1934 Act would, in substance, with the issuers of listed securities and officials dealing ing session. with the question of "free riding" On Jan. 4th the SEC released by so-called "insiders," in new its opiniop in the Oxford case. It issues being offered to the public was considered by our committee 3807, a doubtless Commission seen has very* yet gone over these proposals, told that they are most con¬ structive and should aid mate-' as I am rially in reducing the size of both registration statements and the the prospectus. At the this point I members who have served sub-committees Their efforts been most want the of to our on thank Association various the during year. and assistance have helpful, thus enabling committee better to deal with exceptions, subject pres¬ the varied problems which have ently unregistered corporations presented themselves. having at least $3,000,000 in assets I want to say also that it has and at least 300 security holders, been a great pleasure to have to the registration requirements, worked with Murray Hanson and i the periodical and other reporting under the able leadership of requirements, the "proxy" pro¬ Chuck Garland. His stewardship visions, and the "insiders" trading has been superb and he can be provisions currently applicable to 1934 No. of ■ S-l, which is the one most com¬ monly used under the 1933 Act. i Although our committee has not our certain lished Securities Exchange Act of Release also have the date recently circulated for comment revisions in the Registration Form evolved pointed up for the industry the difficulty of getting preliminary inAufiusfu' amendments You that herring" prospectuses, "free riding" and simplifica¬ registration statements. Twelve point and approved. tion of prior to the effective registration statement. chairman, reports to 35th IBA Convention new construc¬ dissemination of "red of Thursday, December 12, 1946 CHRONICLE thereof, as provided in assured affection the constant of and respect of our committee and the membership at large. Sections 12, 13, 14 and 16 of the considerable detail on Federal Legislation Committee 1934 Act. This question is still and —Walter A. Schmidt, Chairman; a copy of that report was sent to under consideration by our com¬ William Bayne, Hagood Clarke, all of you. and submitted to the business for mittee and will more than likely At this time, there¬ at Absecon and M. J. M. Cox, Brownlee O. Curlater, in co¬ comment or alternative sugges¬ come up for action in the next fore, we shall merely touch upon operation with the NASD, we en¬ tions reyy Hal H. Dewar, Newton P. the highlights of our earlier re¬ proposed Rule X-15C2-3. We session of Congress. deavored to clarify for the mem¬ Frye, M. M. Grubbs, Carey S. asked for comments and sugges¬ port and endeavor to bring you On Oct. 12th the SEC proposed Hill, Edward H. Hilliard, Edward bership the implications of this up to date on developments in the tions; from all IBA members, and two new rules designed "to ac¬ opinion to their current business Hopkinson, Jr., Paul W. Loudon, interim. 1 \ 1 following discussions with mem¬ complish the broadest practical practices and customer relation¬ George L. Martin, Chapin S. NewBetween Dec. 18th of last year bers in various ported our in activities up to That time , - . this, we evolved our 12 point legislative program. This was approved by the Board and Jan. 25th of ships. On Feb. release on 7th the SEC issued its This the Higgins case. parts of the coun¬ committee met in on May 2nd and all aspects of this mat¬ try a special Philadelphia went over On the afternoon of the ter. same the called "red herring" proposal we representatives of the Commission that in its view, the alleged abuses found by the Commission's staff asked for written comments from of the Comjnission committee more indicated a frank to within the realm of good ethics fair practice than in the realm of fraud; and, therefore, that the problem was and which should be handled one The NASD took and with had the all IBA subsequent Commission substantially the same is members, following which sub-committee met in New York Philadelphia prior to meeting with the SEC Commis¬ sioners and certain of members We had a most constructive and encouraging discussion with the Commission, all of which leads us to hope and believe that within a very short time we will have a that Foster Succeeds Schindler In Commerce It that will enable lis to dis¬ seminate preliminary information Department announced was President on 29 Nov. had Truman ap¬ pointed to the post of Under Sec¬ retary of Commerce William Chapman Foster, a small business man with a background of war¬ time government experience. Mr. Foster the staff. rule —WW not an and again in a by the NASD, through its self-regu¬ latory facilities, rather than by the Commission acting under the fraud provisions of the 1934 Act. meetings used as a dissemination such hard, James Parker Nolan, John Redwood, Jr.; Henry T. Vance, Philip K. Watson, and Lyle IV Wilson. time to see to it friendly discussion with them. fall ^ Cede frtttcU and at the attempt to sell the se¬ curities during that period in vio¬ lation of the Act." On this scr business fan ing date and the effective date, resentatives The PRIME SHORT TERM ISSUES tration statement between, the fil¬ that but twee con¬ tained in a Securities Act regis¬ day the committee met with rep¬ for several hours and had Select same dissemination of information will Alfred succeed ET. Schindler, whose resignation, ef¬ fective Dec. acV President 4 ■> the cepted with regret. Mr. Schindler's resignation was made known by Secretary of Commerce W. Averell Harriman on Nov, 29. In leaving Mr. government, the Schindler will resume the Presi¬ dency of the Alfred Schindler Co., of St. Louis, a company credit banks offer excellent media for cash balances. Issued 1945, when he was appointed Un-V der Secretary in the Commerce; Department. In - announcing the* resignation, Mr. Harriman said; j "At the time of my appointment' to .the post of Secretary, I per-: $100,000, they available regularly through recognized dealers and dealer hanks. 5 Eligible as security for. most fiduciary, are consultants, and public re¬ advisors. He resigned as active head of this company and of various directorships in April, j monthly in maturities from 6 to 12 months and denominations from $5,000 to business, sales, and distri¬ lations employment of large suaded Mr. Schindler to remain to aid trust and public funds, these debentures are authorized under the Federal Farm Loan Act, as amended. They all state, are his UNDERWRITERS CHARLES R. DUNN, Fiscal 31 Nassau Street / > his long-de-; interests now Schindler message to business everywhere. He goes back to private business with our very best wishes for success." Mr. Schindler was appointed groups , \ Under Secretary of Merrill Lynch, Pierce, Fenner New York 5, N. Y. Underwriters and Distributors - & Beane | of Investment Securities Brokers in Securities and Commodities ' President Roosevelt Commerce by on April 10, | 1945, at the request of former Secretary Henry A. Wallace. How¬ I ever, | NEW YORK 5, N. Y. 70 PINE STREET as its carry Agent remained missed by the De¬ partment. We also shall miss his unrelenting drive to further the work of the Department, and to . , new will be greatly SECURITIES . my ground in general business, and his experience and knowledge of the distribution and sales fields CORPORATE upon request to However, business Mr. that THE FEDERAL INTERMEDIATE CREDIT BANKS of these desirable obligations assumed long as he did. His extensive back¬ DISTRIBUTORS municipal and local taxes. explained gladly I oblige him to leave the govern¬ ment service. I am much pleased of will be as part. ferred besides enjoying exemption from Other features me duties, even though this involved considerable personal sacrifice on legal investment for savings banks and insurance companies in various states, specializ¬ as bution ing Consolidated Debentures of the Federal intermediate Mr. as Mr. Roosevelt died before confirmation, but Schindler's one of his first actions Presi¬ " : Offices in 91 Cities r ■, > | he'was iiiiiiiiiiniiinmHiiniiBiiiiiiiiujiiimiiiuiiiiiiiiiiiiniiiiiiniiiiiiiiiiiiiiniiiimiliiiiiiiiiiiiiiiMimtHiiiHiHimiimtimiiuiiinmmiiimjiiiiiiiiiiiHiuHmim reappointed him and confirmed by the Senate dent Truman on April 16, 1945. •' f-f-'if-i. Volume Number 4550 164 THE COMMERCIAL' & FINANCIAL CHRONICLE) 1 \ Revision and Amendment of State Securities Laws Speaking on behalf of the State Legislation Committee, Robert G. Mead, of Stone & Webster Secur¬ ities Corp., Chicago, its chairman, tionary whether^is- powers, or is personal cretion and without legally established limits. Robert ; . calle^ ^atten- g. mead, Chairman „ Interim Report v.» Legislation Committee j State V Bretton Woods, N. H. June, 1946 : The interim, since our last re¬ November, 1945, has not especially active legisla¬ tion period. The legislatures, of in port been an nine states have been or are now in regular session. In two of these nine states, amendments have been made to the securities laws, follows: as bership take to _ , . .. Robert G. Mead imme- June 19, ate steps in ' v preparation of data and in mak¬ ing recommendations to the 43 State Legislatures which are to be in session in / 1946, the Securities Law (a) to increase the registration fee from $15.00 and, (b) to pro¬ $5.00 to vide an exempted transaction for a registered dealer the resale, by or broker, of outstanding ' ities acquired An interim report was filed by this committee at Bretton Woods broker at in ably June of this With the items, there incorporated in that report exception were of year. two to sonably Legislation and to the committee a copy Accord¬ of that report is ap¬ pended hereto and made this report. Since the date of a a prices or to of the current security, price related sale, (Continued •7 part of provided or to page the interim report in June, the National Asso¬ ciation of Securities Administra¬ tors held their annual convention at the Commodore Hotel in New York. At that Committee Stock convention, their Warrants on- YEARS 67 and OF SERVICE Purchase Options made its final report reasserting the posi¬ tion taken by a group of Middlewestern State Securities Adminis¬ trators in a Declaration of Policy, with respect to warrants and stock purchase options. That re¬ port Was unanimously approved by the convention, thereby ren¬ dering the policies originally out¬ lined in the Declaration of Policy the expressed policy of that Asso¬ ciation. PAI.VE,A\j:BBKR..rACKSON&ClHTIS ESTABLISHED and other principal stock and remembered, bow* Cverf that neither this action by thtf National Association nor 1879 MEMBERS NEW YORK STOCK EXCHANGE , It is to be the commodity exchanges NEW YORK BOSTON CHICAGO 25 Broad Street 24 Federal Street 209 So. LaSalle Street * 745 Fifth Avenue Declaration of Policy amounts to AKRON » 222 North Bank Drive CLEVELAND >.pONCORD HARTFORD : LOS ANGELES * PROVIDENCE ! DETROIT LYNN T DULUTH MILWAUKEE * SPRINGFIELD ST. : * * ELMIRA PAUL • GRAND RAPIDS ' MINNEAPOLIS • PHILADELPHIA WORCESTER Underwriters ■— Distributors Brokers Underwriters Distributors Dealers STOCKS and BONDS Brokers Corporate and Municipal Securities & •' w''..-,.'; * %,e li. i ' , L V | /V , * V ' ,k J . , 'SV' Special and Secondary Offerings Research and Advisory Service EMANUEL, DEETJEN & CO Members New York New York Curb Stock Exchange Exchange Commodity Exchange, Inc. NEW YORK 52 William Street prices the certain on CHICAGO BOSTON or reason¬ such rea¬ current market price at the time report for the year 1946. ingly, price price and sold at State pertinent now a secur¬ by such dealer related market the material items of interest with respect * effective act an salesmen's of the report made to the Conven¬ tion follows:. By amended was The full text 1947. • Kentucky: of such informa- 3066) FINANCIAL CHRONICLE THE COMMERCIAL & Thursday, December 12, 1946 Basic Problems in Expects 0verall 20% Tax Reduction ' V ,, . Federal Taxation, headed on the 35th An¬ mitted to substantial reductions in expenditures, a balanced bud¬ the Federal Tax¬ ation Committee of the IBA whose get, and a downward revision in excise taxes which were Chairman is Richard P. Dunn of the Auchincloss, Parker & Redpath, greatly increased in 1942. As matters stand now, it appears Washington, D. C., expressed con¬ In a brief report to nual Convention, Investment Process. •' by Richard P. Dunn, considers probable early passage of Rep. Knutscn's proposal for a 20% overall 1947 tax |§| reduction, to be followed later by cuts in excises and other wartime levies. IBA Committee : ; (Continued from 3045) page : || advantage of falling rates will probably ^ be k nocking at your door; that a few large institutions and should experience no diffi¬ It is difficult at this time to make will be glad to relieve you of [a culty in either House and that it a real estimate of the changes to major part of a prime issue; that will be passed in February. In the be included in the second: bill* you can get active dealer, partici¬ Senate Finance Committee some There will be a number of hear¬ pation in a sure thing in a risiiig changes might be made, although ings and a great deal of testimony market. But the important ques¬ . they are interested from not expected to be im¬ Mr. Knutson will be the It groups. is tion is how solidly stand -you bill with the public—with the large next Chairman of the House Ways pass so that reductions in excise classes of investors whom your in¬ gress of a bill to reduce income taxes can go into effect on July and Means Committee and Sen¬ dustry is primarily designed to taxes in 1947 by 20%. According as Congress convenes providing for ator Taft will be Chairman of the 1, 1947. ^ serve. They are the ones who a ''quickie" tax bill that will bring to the report:.;.-.;..;;. Senate Finance Committee if he If the Republicans are able to form the essential backbone of £k>me time ago Representative about the 20% cut in individual wants it. It is reported here that make substantial cuts in. the your market. It is in their service rates. It is planned that the tax¬ Knutson went on record as favor¬ they are substantiallyin:.agree¬ budget, they expect to have a that the industry is, ultimately, ing a 20% tax cut straight across payer will compute his tax as now ment on the first tax bill for-J947. large surplus for fiscal year 1948 justified—morally and practically. and then deduct 20 % from the to¬ The objective of this 20%; cut ik on which to base further general You are the investor's the board in Individual rates ap¬ primary di¬ tal tax. It is expected that this bill to reduce taxes by $3,500,000,000. tax cuts early in 1948, the next rect channel to enterprise. That plicable to 1947 incomes. In ad¬ -• There is some talk that the. Sen¬ Presidential election year. is why issues come'to you and that dition, the Republicans are com- nwill be offered without hearings ate Finance Committee fidence likely that Mr. Knutson will in¬ troduce a bill in the House as soon by Con¬ of early passage portant. planned, however, to have the « offer may a which credit Federal excise in far as the Senate bill. second You cannot afford to have that channel closed up, to have either issuer or in and therefore search for of by-passing that channel. you means investor lose confidence begin on the And, in that very rfeal sense, yoiir the hearings when possibility changes tax to with; reference Finance Cpm-- nittee is concerned, the PUBLIC UTILITY suggestions, make constructive to taxes. There is also under discussion, so RAILROAD closely and be prepared two biUs during the war aiid possibly, re¬ ductions Committee;' recommends is why the investor comes to you. - that;;this Association follow these discontinued was Your • earned ; income the of return Ample time will be interests and the interests of the individual normal and investor are identical, f " surtaxes to 50%,; applicable to available arid "we should have a /'"'V v.*"v ~v;jvr'< '?'1 * ;• ; SEC Administration 1947 income* but it is regarded,by sympathetic hearing for the first For a moment let us take a many that this provision will not time in many years. find its way into the first tax bill: quick glance at the legislation Federal Taxation Committee— administered The next part of the Repub¬ by the Securities and of limiting ' ,ij\ INDUSTRIAL "■ • -• l ' BOND and STOCK licans' BROKERS a tax program Several will, involve Richard P. Dunn, Chairman; James Exchange i Commission. things stand out clearly. You will and hear¬ H.; Lemon, Vice Chairman; Wm. number of changes, - recognize immediately tlxis, that W. legislation is; predicated on the M, same / bases, that; underlie' your begin in March. In this second own business; this legislation; as¬ bill the following will be con¬ Ferris, Frank E. Gernon, H. Fred¬ ings on should the second tax bill Richard Barrow, Russell Courts, Henry H. Egly, George sidered: Vilas & Hickey New Members Members New dividual York Stock Exchange York Curb Exchange surtax Au¬ Hawes, Nathan D. McClure, capital rates, Hagemann, Jr., Hardin H. erick Federal excise taxes, in¬ gains, earned income credit, and gustus W, Phelps, Ralph W. important administrative changes. monds, and Harold E. Wood. Si- the sumes classes existence of investors of large wish to who invest their savings in enterprise and. it assumes the necessity for protecting these people and serv¬ ing them well, The working of 49 Wall Street these laws has demonstrated that they are not, by any means, in-* tended or administered to be de¬ Telephone: HAnover 2-7900 Teletype: NY 1-911 structive bf your business. Pershing Co. & recognize that CURB EXCHANGES a CHICAGO BOARD OF TRADE They business is.a part of our economy and their broad aims are to help lay MEMBERS STOCK & NEW YORK - your vital firm basis in the Anierican . ecoh-i omy for the growth of sound pub-^ lie investment. It is the intention yvXvillp behind these laws.to help, and not to hinder, And Brokers: in it In 120 Aviation to inform the investor, nor can they in themselves make a reality of ; it. Registration statements Railroad FRANCISCO SAN TOLEDO. YOUNGSTOWN ROCHESTER; should be prepared carefully and with an honest intention to dis¬ Railroad Stock ♦ Equipment Steel • • Low Priced Dealers Underwriters ' ,L . ' ' . ' ; j . ' . Agricultural Automobile • Electrical Equipment .:■• Building • Food • • ' , i , , - . .j _ Chemical Wholesale Industrial Machinery distributors Investing Company • Merchandising • Mining Petroleum • Tobacco • • Railroad mission primarily engaged in the processing of registration state-! ments, and despite the fact that Railroad Bond * Institutional Bond Industrial Bonds and Stocks • Municipal Bonds we have had to burden that staff with Fully Administered y*• ;■ y—yy ' • ; ; '■ ; yyyy-y;'••• .V-'y y =;yy*yy• ■' V""1 ■ ESTABLISHED 1890 J*G'WHITE Telephone Incorporated IIAnover 2-9300 ' 37 wall v*, WALI STREET wiv street . ■ ' , COMPANY INCORPORATED ■ 63 BelIS,„em Teletype < NY 1-1815 . new york 5 • •• NEW YORK 5, JNL Y, • * *# ■< * > -m - ' m ' INC., CHICAGO duties as a reorganization, result our of staff is doing its utmost-to carry through our program of expedit¬ ing processing. It is our hope that the good sense of our program will .be recognized, that we will be able to increase the number of people engaged in the handling of registration statements and come nearer the fulfillment * of our; hopes DIRECT PRIVATE WIRE TO SILLS, MINTON & CO., j&j&iWiitff; added wartime '-^■•0,'■ istributors Group, now being by the staff of the Com¬ carried Public Utility General Bond close. They are processed by peo¬ ple who do their work efficiently and thoroughly. We have no in¬ tention of speeding up the han¬ dling of registration statements and other filings by doing the job sloppily. If the job is to be done well, no amount of efficiency en-* gineering can get it done quickly without enough people to do it. In spite of the heavy load Utilities • outlined These proposals do not exhaust either the full scope of a program PROVIDENCE CLEVELAND I process. CHICAGO DETROIT addresses improve the machinery for get¬ ting adequate, accurate informa¬ tion out to investors, for simplify-1 ing the filing of information and for expediting the registration Rector 2-3500 PITTSBURGH past of the projects we have un¬ dertaken at the Commission to WIRES TO C ORRESPONDENTS BOSTON investment. at the intention some n.y. Broadway, new york 5, Teletype NY 1-750 PRIVATE informed our, Commission, in; administering them, to follow that spirit, • v bonds GROUP SECURITIES, INC, is for ; expedited But, in view, processing. sensible prbgram cannot be fully achieved merely by revisions in the Commy a >y6Iirme 164:/. Nirmbef 4550 mission's - - ; commissions. -As long as therialesis a free lance entrepreneur procedure. /No • matter we adjust our ' how/ carefully man methods, the prime responsibility who ia . $ THE COMMERCIAL & FINANCIAL ' < with; those to given and which he should; read. the firm Clear and full information. is im- ever possible unless those who, material for investor be strong a nor - neither the salesmen should one. > But forget that, to the customer, tfme 'simple- and curate jreads and the stamp on it. To profit by slurring make over the importance of having the same customer fully informed is to run completely ac¬ the risk of Joss of confidence and unless the, investor - clasical abuses inv these ■>•,/' Relief Needed for ; ;[/•'■;';;Unsound; distrust; and, in. the Jong run, is the material • given to him. not to profit at all. ~ ilt is a sad fact that not enough in¬ :'■* You gentlemen know as well as vestors read prospectuses, that too I how often your salesmen's vol¬ much investment is made on the ume or the success of a distribu¬ basis of the tip and hunch..;' We tion depends on what the market will probably never be able to did the day before. That is be¬ get all investors to ! read what cause so many investors have not first things first. Conditions are committed to depends letter laws. -About of detail six or ago /representatives in seven of our years your or¬ ganization, of the NASD, and of many exchanges / gether with legislation: us y sat for We * a certain of Securities the Act of ities /Exchange/Act. it. rs a be¬ on our whole-hearted the there is intention to a pre¬ standards necessary for his protection and to make them meaningful mutual task engaged in and its our in most where success efficiently mutual cost.'■ ' and it/counts him serving at the honestly, reasonable a ■ y IBA PAST PRESIDENTS revision of of the It depends primarily abroad provisions and their service American investor that serve to¬ of survey reached of agreement on areas down we are on effort to preserve and strengthen the standards under which we My most impor¬ work. Wisdom lies in assuring the in the end, your livelihood cause, to . > But this is my first address to your-Association and I believe in believing that there is perfection the last 3059 tant message to you is that: we are'committed to the protection of investors as- public servants; you We do not flatter ourselves into consumption by honestly protected against certain |/{Statutory prepare try to presentation- at the their inal/disclosure if the investor is not to be merely hangs his hat in your of the. whov prepare / the shop,, the temptation will continue fields.' ; material i that the investor, will ,;be CHRONICLE 1945-46 1943-44-45 1942-43 the Secur¬ The views they should read; but we should formed, and have not been helped ^olved/.t]Dy; the. participating never stop trying to serve those: to form, the habit of buying a. par¬ bodies/were boiled down to a set of specific proposals, arid counter¬ who want to read and to stimulate, ticular investment representing a proposals. ExtenSiye hearings be¬ the; others tn use the information particular grade and quality of fore a House of Representatives at their disposal. earnings. Because he has ho basis Committee -were- had.' The* war for; indepm^ehfc^ : Encouraging Investor Interest In the vestor too often buys j trends ;M- interrupted.that program. \ -That can be done in- several stead of: buying; investment. /That ipteryening-year^ certain of: the ways.. The first, as I have indi¬ would be fine if markets: went, no proposals may have- become -ob? cated, is to make an honest ef¬ place but up. However, .markets do sojete;*I - knbw that" out own re¬ visions. Rt the Commission have fort ' to' state the facts, fully,; but not do that. And, I should think, simply. and directly. The second you would, want ,.to Abuild a-busi*- already: achieved some of the obis- encourage investors to use the j ectiVes^rahd many more may be iiess .which has - the capacity/'to information. By that I mean lit¬ withstand the daily index jitters. reached/without the/ieed^ for stat¬ erally sitting down with an in¬ I cannot think of a better; utory change. The experiences of . , , - way 6f vestor, opening the prospectus for doing thaf than by raising the him, explaining what it is and general level of salesmanship. to what it contains, and guiding, him the point at which the securities . , the/past few to us - the at > Charles S. Garland John Clifford Folger Jay N. WhippJe yeara have/indicated Commission other in which areas statutory relief 'of through it., All of us, I venture to seller * regards .it as a ..matter; of unsound conditions' is needed, and say, have had the experience of course to see. to it. that his cus- probably;; y our nwri: added experi¬ ence may indicate that looking at financial statements tomer knows- what you want he should which we did not completely un¬ know "about what he is buying; toXchange; your minds;;abbut some of. the proposals. ' ; y' y y derstand. Imagine then the. pre* And that, means seeing to -it that I« i . dicament of the investor frightened at the balance sheet mere or who is sight of income the investor uses and understands a the state¬ We have passed the We all prospectus. war crisis. hope to set out for many UNDERWRITERS AND DEALERS years of peace to come. I am glad But, in that balance sheet, Concern of Banker with Securities that in our relations with in the income statement, and in Laws your the other pertinent disclosures lie I think the sound and the long- Association and other groups in the grains of truth about what he range view is clear. The invest¬ the financial community we have is/being asked to buy. y The in¬ ment banker should be * directly already laidthA basis for a joint vestment banking houses cannot concerned with preserving the in- well-considered be merely peddlers,: they* cannot effprt at improve¬ tegrity of the standards and Vobr ment. Industrial, Public Utility and Railroad Securities State and . be merely if, keepers;of rummage jectives of the securities laws and will agree, their professional obligations go be¬ yond the closing of the sale and the ringing up of the cash register, then you must agree- they should recognize and- fulfill this obliga¬ as you with ment. The translating them into tari- ready begun gible results On the firing line. That concern,} further,; should not the Commission an documents- relating • Free, unmanipulated, ? and tion. orderly trading markets are vital to public confidence in invest¬ ""Service Embodied in Your ment. It does a tailor little good Profession'* to fit a suit perfectly if the suit To stand as the intermediary foils apart soon; after the cus¬ between enterprise and investors tomer leaved the shop. It does the cannot, in the long run, mean only investment banker just as little that you have the goods to sell or the customers to buy without be¬ good to bring a sound security al¬ intensive study of to the Lazard Freres & Co. statutory :Twl^on"^ogram;:;' With stop with the Securities Act, It the purpose of preparing should/extend to:the- others/as well. has ule of proposals now as a a that make sched¬ reaching agreement legislative proposals. Will take time,. It is that Members New York Stock 44 WALL basis for further meet¬ task of joint : sense ings and conferences to continue our Municipal Bonds dan be done not on That ; Exchange STREET, NEW YORK 5, N. Y. ;■ ■ {;■■■ h ■ CHICAGO 4, ILL. BOSTON 10, MASS. 231 So. La Salle St. 75 Federal Street PHILADELPHIA 2, PA. Girard Trust Co. something hastily. ing ever conscious of the ideal; of fairly priced to the investor and service embodied in your profes¬ leave him to the hazards of a Ignoring that ideal may not rigged market. The investor stays keep customers from coming in with'the security.' He heeds, if he sion. in the rising market. it you But without holds debt, build a high wall between a trust indenture* that him an independent and the customer when a real trustee performing the minimum selling job is to be done. of services necessary to preserve assures you I can . well temptation understand of "the the salesmen the security, to utility, or II he Has bought a Canadian Securities investment trust issue it shoot the stuff out, to pile up the does little good to have made Orig¬ C-C .■:-«/'-5--V; .~ V. -:v.rTv: :S:v7T-. ■; Pienters In External .*e;. Government Provincial ■ . i CANADIAN •' '< ' : Industrial Municipal 1 Governments Public Utility Provincials Railroad Railroads " Utilities Ernst &. Company .MEMBERS NEW YORK .STOCK EXCHANGE ; CHICAGO STOCK JEXCHANGE,. i,y v.y .y/:yy NEW YORE CURB EXdHANGfi Wood, Gundy & Co. 'Incorporated / CHICAGO BOARD OF TRADlT ' ? inc.; 12(1 Broadway New York 5 Direct private : i / wires to Chicago, ' >. *. - New-.York' 5 r ' 111.,,Los -Angeles, Cal, Ldui8,l Ato.,' And Birmingham, Alabama Wall Street, 231 So. La Salle St. .:)//t;;/.//;..Chicago 4 : ;■7, n • 1 1 •. < Toronto Montreal - Winnipeg ' Vancouver London* England; Bldg. I i t- THE COMMERCIAL & FINANCIAL CHRONICLE This is what the Commission said •in-their decisforfin this Reports Railroad Credit losing Ground Commission (Continued from page 3051) to the future vol¬ as traffic is completely ir¬ reconcilable with the forecasts of ume tention to establish grounds for a reduction of the railroad rate base. made The forecast the estimate sented low. of by volume traffic pre¬ There the carriers is unduly increase freight of rates, mal estimates the It is difficult to find in that re¬ or be the present normal more sitating conditions, active business, time but it should lems noted that the forecast of the materially less the future prob¬ in difficulties and neces¬ further raise in rates a during a period of will decline cannot be determined at other hand, the temporary postwar boom period to be followed by a decline to traffic not are in the reorgani¬ inconsistent. If, a port any indication of concern as to the future earnings of the car¬ riers in the event that traffic de¬ Whether If the the Commis¬ sion considers the present esti¬ mates to be merely the result of on rate relief awarded. clines. made zation cases report and appen¬ the basis for the furnishes merely temporary. or considers them nor¬ mal then these estimates and the o\ $7,464 billion and the other dix in the Commission $7]|21 billion, and the conclusion Commission's indication no estimates of traffic volume as nor¬ is $6,800 billion. The Commission submits two other estimates, one drawn from these forecasts in is present report as to whether the Commission considers the above The carriers' forecast, based no on traffic and conclusion that the future of reaches by the Commission only a few years ago in regard to the normal earning power of railroads in reorganization. V. " i : - then proceeds to a report should be fully analyzed and dis¬ cussed at the present time. If sound credit conditions are to be, restored, investors must be re¬ lieved of their fear that the rail¬ roads will again drift into a pe¬ riod of lower traffic volume with rate structure completely out of adjustment to the lower volume. In this connection, the following record of forecasts by the Com¬ mission in prior years is not re¬ assuring: ' ■ \C-' • a , In , April, 1931, the Commission confirmed grain reduce re¬ railroad Earnings of the west¬ earnings. ern to. reduce stating that the would ductions less decision a rates, carriers than at that 3%.' on. time were investment but the Commission expressed the Three months later, the carriers The decision of the Commis¬ 1931, was that only an insignificant amount of relief should be granted, due to the extreme gravity of the com¬ petitive and the general economic situation. )\'j, - Eighteen months later, in March, 1933, the Commission decided that the surcharge was no longer nec¬ and canceled it. Any im¬ provement in the situation, how¬ ever, was temporary, and subse¬ quently railroad earning power again became impaired due to in¬ essary resultj a in 1933 and again authorize sur¬ Instead of costs / conditions had again year the Commission decided, in spite of the protests of the riers, 1935 car¬ that1 the relief granted in was no longer necessary. finartJpiir- In this Commission -may show clearly that they are fully aware of the necessity of establishing a railroad under rate structure traffic present." The fa¬ less those existing at future status of credit railroad adequate conditions than vorable is in clearly the hands of the Interstate Commerce Commission. based decision, the evidence of the past on should time in age that has mission the correct dam- already been done. conditions The •./ A realistic that Com¬ the should recognize are clearly stated in General Com¬ modity Hate Increases, 1937, Ex Parte 115, decided Oct. 19, 1937: remaining stable they in¬ creased, and instead of traffic ris¬ ". .,» Tt is ing, it fell precipitately. ." In the only necessary to first quarter of 1938 railroad earn¬ have in mind the incongruous re¬ ing power was practically obliter¬ sults which would follow an at¬ and ated Commission the again forced to reverse was tempt to itself not stable rate only by restoring all the increases ing 1936 but even grant¬ more. forced to do in 1938. ■") In of .this view peated errors record of re¬ in forecasting, and the repeated periods of railroad difficulties resulting from a de¬ cline in traffic while operating under for rate a structure improving wonder that traffic, designed it is no railroad credit today has again received a severe blow. Of course one no traffic whether knows will hold today its at present level. If it does, railroad earnings may remain on a reason¬ ably satisfactory basis but the dis¬ ing if V improved and in December of that NEW YORK opposite of the forecast. tion to the effect charges in rates. * t,:y.y-■■ '/■'y:<';y\, s■ / Unfortunately, the Commission again was wrong. The develop¬ ments in 1937 were exactly the compelled to reverse its decision As costs. By 1936, ?. prospect." we turbing fact in the picture is that the June, 1946, opinion of the Commission gives no considera¬ of '' that the undertook our original decision in March, 1935, does not now ex¬ ist. it' A continuing revival of in¬ dustry appears likely to result in a further increase in traffic, and no sharp general increase in oper¬ ating expenses is immediately in which emergency to meet in March, 1935, the Commission was creased Established 1922 conclusion is It is obvious from a study of the past that the Com¬ mission, instead of decreasing rates in 1936, should have in¬ creased them as they finally were 103. Company figures canceled in that in the event ' in¬ earnings were necessary subsequently, f: the carriers could again apply for relief. sion in December, & these opinion applied for rate relief in Ex Parte qAllen from creased connec- Corporate Financing unmistakable "The tion With this later readjustment be unfounded: ion" ,the case on railroad earn¬ of a decline in traffic when such decline takes power and place. y. - J / ;/ This report is prepared prior to the? final opinion of the Commis¬ sion in the present rate case. may It comes • out the fears expressed rates that so of 'return would a be realized, notwithstanding general business conditions and of fall ableness the and in traffic rise consonance therewith, to realize the unreason¬ and impracticability such policy.' "* -y, any of .. . "However, recognition this of fact that the railroads cannot hope in times of economic depression to normal a earn with it return carries the recognition ' of the complementary principle that they should be given an opportunity to than more earn normal a return in times of prosperity. In the same case, after stating a general rule which might well control our ac¬ tion with rates, we "Tt respect said, at will be railroad to 582: page noted, that also, it contains recognition of the prin¬ ciple that inasmuch as railroad earnings must inevitably fall be¬ low normal in times of depression they properly be permitted may rise above normal in times of to prosperity. Such recognition might well be supplemented by a provision that some portion of surplus accumulations shall held in liquid form.' "* 1 V; ' V V-ri' * \ ' be " '' '> V X '• : - lV The future of railroad credit de¬ be that when this decision herein will have been proved to adjust pends the on Commission application by the of these basic prin¬ ciples so years ago, and apparently forgot¬ ten clearly stated by it nine today, at least decision of June far as as the 20, 1946, is con- cerned. It is not ordinarily customary / to quote famous poets in a serious ?y analysis of the rail problem, but a study - of the repeated refusals of LEBEINTHAL& CO. US BROADWAY, NWY0RK 6, N.Y. 1 Oldest House in America Underwriters • the Commission to permit the railroads to protect their earning brings to mind the follow¬ power REctor 2-1737 ing quotation from Rudyard Kip¬ Specializing In ling: j* fODD LOT MUNICIPAL BONDS - • "The pain of i/r refusal Bell System Teletype NY 1-2272 / maiden's one yy;y:': Is drowned in the pain of the '.■/ next."y;yyyy -' If we from Wholesale Distributors . would include quotation a American poet that seems an appropriate, evidence: the re¬ quired of the railroads to demon¬ strate their need for is revenues comparable to the evidence Eugene Field Underwriting Actual Markets in man / OVER -THE - required "He Distributing COUNTER to prove that a ■; intoxicated: was is not drunk who the floor from Z _ Can rise again and drink some. ,'/;./ Trading SECURITIES yy .y more, But he is drunk who prostrate lies And ' drink cannot or . cannot rise." Respectfully submitted, Railroad Securities —Fairman Gearharf & Company incorporated ' ' * '/ i pont j NEW YORK 5 45 NASSAU STREET REctor 2-3600 rillladelpiiia telephone Enterprise 0015 bell new Securities teletype york 1-576 Hanover 2-7793 Committee Chairman; Buttenwieser, Pier- Flint, A. Northey Jones, Arthur C. Robert New York 5 Dick, V. Davis, W. Lloyd Fisher, John G. Members New York Security Dealers Association 70 Pine Street telephone Benjamin L. FIRST COLONY CORPORATION Underwriters and Distributors of Corporate Members New York Security Dealers Association R. Knies, John S. Loomis, G. Rowe and Frank M, * Stanton. , 1 - Teletype NY 1-2425 * Quoted -from 1931." •: - * : "15% y./.i • Case,, Volume Number 4550 164 THE COMMERCIAL & FINANCIAL CHRONICLE precedents Waiits"Standby,'Periods Shortened 6. The development of close re¬ (Continued from page 3055) lations A special committee of this As¬ sociation has been working ag¬ gressively, in cooperation with the ■ New York Stock .The Exchange, problem and it is hoped that several constructive develop¬ ments sound may . of commitment. in Firms reported at some length at last year's meeting on the idea of permissive incor¬ cent branches much vious the there our pre¬ several are; outbreak incorporation. if under operate Corporate permit corporations to accumulate reserves alty for without pen¬ tinue The New York Stock Exchange been working for some time originating listed securities. lieve the ested in herewith which membership this a subject, is we we be of in in Price v 50 plan is different There is with financial industry. —editorial comment from various well our throughout the to im¬ the need of caution and con¬ tor. The at in ; 1 Stock of be¬ members use, and ' Without disrupting that there is in stocks. This entire Irving D. Fish, Richard A. Keb- would bon, Joseph H. for read¬ room higher whole is Newbold Taylor, Albert W. Tweedy. the who J|» BAM STOCKS are compen¬ avoiding change as This the ISSIIRANCE STOCKS prac¬ a result union or may JDealers re¬ result in establishment of and Institutions sale, trading Stocks are invited specialized facilities freely, to use our REORGANIZATION & "WHEN-ISSUED" M, Macdonald, H. Charles B. McDonald, C. priced problem King, Samuel D. Ranald Lunt, ■ of - the Anderson, it for any service existing listing requirements for foreign securities, both, dollar and, in¬ ternal. A Chapelle, La the schedule, ; Modernization de Edward C. in their organi¬ labor laws, new quirements. the by Stock Exchange Relations Com¬ .00175 It might be • industry who have had zation, short, ''Money Exchange for in employees tical, experience Work," produced for the New York Exchange Firms. .0025 sation plans to consult with those j movie new Stock Respectfully submitted, .0039 — commission insur¬ * contemplating employee the would-be inves- f £ — Exchange, and the Associa¬ of Chairman; in¬ trend may affect the future rela¬ is tion continuing trend in industry toward unionization. This this advertisements Stock a tionships the favoraff Jo v .005 firms, giving some 2,600 over $12,000,000 of life insurance protection. con¬ with copy to be 400 newspa¬ newspapers committv employees over That to again on the close degree of operation which obtains betvfT this Association, the New York .0066% —— 200 in force by 91 now your comment conclusion, mittee—Richard plans group In wishes tends Commission : justment the end.. To illus¬ the price level in¬ a. , ber and ing the New York State Legisla¬ ture is another step towards this same which commission 30 seem houses 90, equitable. of large scale business de¬ velops: related the analysis, underwriting of Bank or and to Insurance Stocks. SECURITIES 2. Recommendation of simplify¬ ing and out at 100 on Saturday towards . company. pension policy has borne fruit is already evident servatism to be¬ give or creases:,'.' "/■■'CV have been adopted by many mem¬ ance adver¬ This schedule will magazines. press inter¬ present taken magazine to the about 25 of few of the initial steps will have to fore any 1. Because and reluctance Profit-sharing country has been numerous and favorable. The underlying theme to expand the list of foreign se¬ traded on the Exchange growth abroad various pers, appearing in over 300 cities from coast to coast, as well as in small curities the Stock next year, published has facilitate York tisements. Foreign Business to New newspaper increase the volume of listed business and encourage the listing of many stocks now dealt in over the counter, business suer's formation The public relations program of ing the year 1946, approximately $750,000 will have been spent for ments should broaden the market and the charge shares to decrease as 90 into 90 at trend The closings is making further head¬ way, reflecting the tendency in many industries towards a fiveday week. Recent • action on the part of the New York Clearing House Banks in further petition¬ trate, the following shows how the 140 drive 100 percentage Ex¬ Exchange, since its- inception in mid-1945, has accelerated considerably. Dur¬ for seats, * sig¬ committee is the legislation to re¬ quire all companies with assets of $3,000,000 and with 300 stockhold¬ ers to register and supply infor¬ mation similar: to that required for listed companies. No doubt the effect of its passage would be war. for does not seem particular of our selling a commission changes many securities of fairly large closely held companies pre¬ the busi¬ ness purposes. Passage of the permissive incorporation amend„ the as subject commission shares of stock at 180 is the SEC's proposed Public Relations corporate proper the ' ■ in flat 35 cents per share irrespective of price. For example, to > to Tax laws which worth made stocks present is viously unlisted because of the is¬ desired, so One between-the- shooting as being actively studied by the New Stock Exchange staff. York adjustment upward be on negligible proportion but now gives definite signs of revival. One would enable they of well well are,not. in higher, where the commission at Since 1939 this business shrank to | definite advantages to permissive members, '' nificance to of a pointed out in report, the rates Miscellaneous foreign- institutions in for as :some should to is difficult be Your committee is of the belief our and broker seeing. the period of great flight of inter¬ national capital for refuge before and Board within several months. As was correspondents times several of investment banker stock period, reaching its peak in wars discussion by member houses and it should come up for vote by the interest of large was re¬ benefit securities, from the and arrangements that will change and which that membership. This picture was designed to de¬ pict the function and role of the planning a recapturing for made shown it the New York banks, and New York months, the subject has de¬ veloped ■ In carefully listed our branches committee poration of member firms. have NYSE branch offices, foreign rep¬ resentatives arbitrage, overseas Incorporation of Member This is approach have we its prewar position in the foreign field. Business originating abroad reduce the risk factor in this type Permissive March of Time, has recently been released. During this convention Exchanges, wide change should which result Stock scope of subjects to covered is proof that the Ex¬ be this on with governmental officials, and finan¬ cial centers all over the world. to accordance with standard practice; liberalizing amendments to the Securities Act to the SEC, State Department, Treasury, and Congress. ,,(,n 3. Cooperation and Treasury eliminate ' with double American-held the taxation foreign RIGHTS & SCRIP State Departments 'to mn & co. of securities and foreign-held American secur¬ ities INCORPORATED through reciprocal treaties. Jasepihihal & Ga 4. * Exploration of questions such zoning different parts of the world for charges, splitting com¬ as missions or pver-rid6s with of New Stock BOSTON New York Curb Exchange Commodity Exchange, Inc. Exchange to Post •Office >; "Wall Street 67 WHITEHALL 3-0782 . Bell System CHICAGO 9 Square 231 hubbaro 0690 120 Broadway, New York 5, N. Y. REctor 2-5000 NY 1-2873 LOS 4 S. LaSalle Street 412 franklin 7939 SAN FRANCISCO Puss 4 Building suttcm 6987 LA-toSb PRIVATE WIRE CONNECTING: SYSTEM NEW SF-S7J YORK, BOSTON, CHICAGO, CLEVELAND, PF'LADELPHIA, LOS ANGELES, SAN FRANCISCO 19 Congress St., Boston 9, Mass. Lafayette 4620 Direct * ' ' ' - Hartford, Enterprise 6011 Correspondents in Principal : Portland, • Providence, Enterprise 7008 Telephone to Boston and Private Wire System To ' V' TELEPHONES TO Bell System Teletype BS 360 A ' '' > 1 • * I . V ft.' '.;•••"<[ .V$-Y : U':- I* v&f:? - ' ' vl'i k ! n ' II Cities s/ 1 - -V ,r, < ' W«; 'V"4' V I >t y':* 1--". • ■ ' ft 1;. & 1 !■> -v'<«;. ■' "< -\ V J 1 •/' v "!'/ § Underwriters—Distributors— Dealers IIIISeirsch Successors to Members New CLEVELAND 14, O. 1010 Euclid Avenue Main 2933 - TELETYPE CV 190 & co.llllllll HIRSCH, LILIENTHAL & CO. York Stock Exchange and Other Exchanges NEW YORK 4, N. Y. 25 Broad St. CHICAGO 3, ILL. 135 South La Salle St. HAnover 2-0600 TELETYPE NY 1-210 LONDON, ENGLAND State TELETYPE 8770 CG 1219 GENEVA, SWITZERLAND (Representative) Direct Wire Service between New York, Chicago and Cleveland Enterprise Detroit, Enterprise 6066 their branch offices. 14 michiqan 2837 CG-/OJ BS-297 ANGELES West Sixth Street Teletype NY 1-319 procedure participation in partnership, own¬ ership or affiliation with NYSE firms or York Chicago Board of Trade for¬ to be followed by the Exchange t with respect to the form and ex¬ tent of foreign nationals permitted ; f MEMBERS eign brokers or dealers, absorbing cable and shipping charges; etc. 5. Establishment NEW YORK 5: 7008 COMMERCIAL & FINANCIAL: CHRONICLE : THE 3062 of Past Year and Future Outlook of IBA (Continued from page 3044) f and consult with the staff of the Bank their on Matters We much , r .* report recommending sev¬ in the 1934 Act. This proposal, as you know, would in general subject presently course; been very occupied with matters per¬ gress a eral important changes unregistered corpora¬ tions with over 300 stockholders and over 3 million dollars in as¬ unlisted ' tors, to the registration, reporting, proxy and "insider trading" pro¬ members; you We'promptly visions of that Act. will recall that circulated Commission the direc¬ asked pro¬ members to study this our posed Rule X15C2-3 for comment. This rule dealt with the now al- proposal and it is to be discussed atv:subsequent sessions' of this equally forgotten problem of "free-riding", in so-called "hot" new issues. After canvassing the Convention. most V 1 • ■ '* r , • 13th, the SEC circulated two' proposed rules which were designed to bring about the- dis¬ addition to the American {Bankers semination Association and regarding new issues during the others; as I have so-called of more information "waiting period." Hav¬ ing canvassed our membership for lem, which is largely academic in no its views, a subcommittee of our doubt that if it should arise again, Federal Legislation Committee, on la bear market, but I have you sulted in substantial agreement, as to principles and objectives and 1 therefore, very hopeful ,that am, in the future near shall have permit under¬ distribute to writers we will Which rule a "Red Her¬ investor well vate in advance the effective date of the of registra¬ know you all ap¬ preciate the: significance of this development, tion statement; I - , , You also, know that on Nov. 20th circulated Commission for comment proposed revisions in Form S-l, the registration form most commonly used under ' the 1933, Act. This proposal is de-» signed substantially to reduce the size of, and to make more read¬ able, the registration statement and particularly the prospectus. This is another step by the Com¬ mission which clearly shows their render more earnest intention to reasonable and practical their ad¬ ministrative procedure. I me am that the members of this Asso¬ ciation 1 D001ITTLE, SCHOELLKOPF & CO. Established, ' 1919 ' YORK NEW NEW EXCHANGE STOCK LIBERTY BANK BUILDING the (ASSOC.) EXCHANGE CURB YORK and say that duing the past six months, your officers, together With Murray Hansonarid a num¬ ber of our members,* have en¬ gaged the , And - West|r» New York and and .. Commission It is my sin¬ belief that there now - exists Association Manager «' < ,• O- ' ■*'{- i<"r, , r of the Secur¬ Exchange between the Commission*and JOHN A. BRADT "-V; ; wholesome and discussions with his colleagues. cere TRADING DEPARTMENT *1' many Chairman new ities ^ \ in understanding Buffalo of of experience or I am happy to Primary markets in all securities collec¬ altered circumstances. Bell Teletype BU 46 Telephone Washington 4970 and administrative procedure can will be amended if properly called for in light BUFFALO 2 • individually tively are in favor of. regulation provided it is soundly conceived and fairly administered and pro¬ vided that both the statutes and MEMBERS i will agree with sure you 1 ' I ^ , ' a feeling understanding ) and of our mutual respect frotp which much constructive: good can Direct Private Wires to result TUCKER, ANTHONY & CO.—WERTHEIM & CO., N. Y. long as mount the as we all hold para¬ protection of the in¬ vestor's welfare. We like to think Schoellkopf, Hutton & Pomeroy, Inc. UNDERWRITERS and DISTRIBUTORS — of tional program. we We were repre¬ Cincinnati meeting of the State Commissioners on the In the past year, the fruition of the effective training. is,that have been significant to me Most IBA training courses organized in 18 cities and, includ¬ ing those now in session, over New York. In addition, I know 1,200 students have been enrolled. that Arthur • Davis; has worked The IBA text, "Fundamentals "of Banking," is being with various group committees on Investment specific changes desired in in¬ published; currently and .has de¬ ceived wide acceptance and most dividualEstate> Jaws;: Our) State Legislation Committee is well favorable comment, throughout thet aware of the importance;■ of the industry and from other organiza¬ " / problems which have developed tions, schools and colleges. warrant and option problem and also at their annual convention in v , In view of the very great re* sbonsibility)borne by the individ-* in investment bank** meeting them. Our National com¬ ing and our desire. to promote: a mittee and our staff stand ready high level of competence in the to be helpful on jnatters of drafts¬ ranks of the industry, I can think manship and correlation, but th6 of no more satisfying manner in real basis for effective under¬ which to apply pirn; efforts thani^ standing and cooperation between in the careful education of young our industry and the state admin¬ men of character in the funda¬ istrator or legislature must be de¬ mentals of our business. veloped at the state level, So much for my report on the "State of the Union." Although The Boreu Bill we have not succeeded in all our Because of the pressure of re¬ efforts and while many of our conversion ; legislation; only orie problems are yet unresolved, Bill relating to our industry was nevertheless I believe this>sum-*j considered by Congress during the mary review of our activities past year—the Boren Bill—which demonstrates that we have ac¬ was favorably reported out by the complished something and that House Committee, but it was not we are well on our way toward acted upon by either f the House becoming an effective:; trade or¬ endeav¬ in this field and has been oring to coordinate the work of the various state committees in uals engaged , or Senate. the George However, which has tangible for' us all. Let me * state clearly that the work done and ley Smith and Murray Hanson, the results:^Achievedare due in accomplished such constructive major part to the unselfish vol-. work that I am very hopeful that Unteer efforts of our Governors, the new Congress will pass thfs our committee chairmen and pur measure. committee members, who have Another problem we have re¬ given unstintingly of their time cently studied is that of shorten¬ and experience, for- all of { which ing the stand-by period or other¬ I am deeply indebted to them. wise reducing the risks of under-: The Outlook writers where stand-bys are in¬ volved. To me^ it is highly; signif¬ A word now about our business" icant that over the past two during the current year and the years, the losses in such under- outlook for the immediate future. writings, where preferred stock For the calendar year 1946, the has first been offered to common volume of new financing;) will stockholders, have been approxi¬ probably be about 7 billion dol¬ mately twice as great as all profits lars, as contrasted with $7,958,from such underwritings. Eugene 000,000 for 1945. Despite this re¬ Barry; and his committee have duction from last year, 1946 will; been earnestly studying this sub- rank higher than any other year ject and although they may not since 1930.: Of the 1946 financing, as yet have found the complete approximately 45% will represent answer, they will make some in¬ new money and 55% refunding. teresting suggestions to you at ja As to the future, it would ap¬ Martin's Committee, Municipal with the aid of Dave ganization value Wood,;Dud^ subsequent session, t And pear certain "that oyer the next American industry several years Educational Program last, but by no means least, I wish to comment on our educa¬ Private Wire Between Our seen concern. at the sented — INVESTMENT SECURITIES have title is forehanded and carefully planned validly earned only if we place program of our Educational Com¬ the interest of the investpr above mittee. Two and one-half years our own! ago, this group, headed by Julien Collins, in anticipation of the State Regulations war's end and the return of our During the year, we have been young "men from the Armed active, as in the past, in the state Forces, laid the. groundwork for a regulatory field, wherein the lack •complete educational program de¬ of uniformity in the various blue signed to assure the industry of sky laws, and perhaps over-zea¬ obtaining new personnel of high lous interpretation and adminis¬ quality and to provide that per¬ tration by certain state adminis¬ sonnel with comprehensive and trators, have been giving us in¬ and: honorable creasing rings" to dealers and other pro¬ fessionals; and dealers, in turn, to distribute "summaries" to the pri¬ the On Oct. already indicated; This is & prob¬ : banking busi¬ profession,^butjthat de¬ . by Walter Schmidt, I am happy to say that our meeting re¬ .St' I "Red Herring" Prospectuses for its to „ • • f reaction, we worked closely with both the Commission and the NASD, in membership problem in great detail. With¬ attempting to be specific, as out this subject will be fully reported or sets,, and their officers and endeavored to clarify the situation our c- . July, just before the adjourn¬ ment of the 79th Congress, the Commission submitted to the Con¬ Pertaining to SEC> i and sion investment as: A scriptive 21st, met with the C.pmmisr discussed all aspects of Nov. this In have, of Last April, cooperative effort. this ■;))• taining to the Securities and Ex¬ change' Commission.—Early this year, the now almost forgotten "Oxford Case" commanded everyone's attention and after thorough discussion and consideration, we for result of tion to deal with it as a ma'ny problems. ■; { :*■$ shall be in much better posi¬ we officers and the ness: Thursday-December 12, 1946 D will require additional facilities calling for capital financing fan Offices :-':V i': Niagara 70 Street, Buffalo 2 63 Wall Street, New York 5 Washington 8060 . BOwling Green 9-2070 Consultants c/- Teletype BU 122 Teletype NY 1-2827 f .j on Municipal Finance ^' 1 J ^ H u ; > ' <( i A Constructive Service to Municipalities t- -H ^ * e As Consultants HAMLIN & LUNT MEMBERS ASSOCIATE NEW MEMBERS YORK STOCK EXCHANGE NEW YORK CURB • . EXCHANGE f Y+ Municipal Finance we render a con* on structive > planning service for Cities, governmental units. ; f States and other This service includes experienced assistance in development of plans for new financing, * , reorganization; of . . existing debt structures, ' planning the financing, of self-liquidating, projects, and BROKERS AND DEALERS JN r public relations. SECURITIES. LISTED AND UNLISTED SECURITIES We WE are DO NOT BUY financial OR SELL'IN¬ pleased 4a cooperate wiLh finan- * cial institutions and investment houses. Complete Trading Facilities—Retail Distribution MARINE TRUST CO. Telephone: Washington 4035 Branches: BUILDING, BUFFALO \ Rochester, N. Y. —Norwich, Bell Teletype BU 145 N. Y, ' i. ; " Private wire to Kidder, Wainwright, Ramsey & Lancaster ;: 70 Pine Street New York 5, N. Y. ; 3 Peabody & Co., New York - / ' - Telephone WHitehall 4-3540 in THE COMMERCIAL & FINANCIAL CHRONICLE Volume 164" Number 4550 of their holdings of liquid excess assets set aside .for that purpose, bring .•.only fv: And that fundamentally impor¬ tant economic factor—small busi* h ness—spurred l logical advances of the will i'l likely create . techno- by the on war years, vast demand a J for investment funds. We must f not forget that industrial America m ■■■llyy' X3.I most important step that taken is to create and workers and associates. the may well It is clearly {morrow. to our respon¬ our that venture capital goes to work with enthusiasm. power see Surely, the investment banking - business look can forward to an immediate future of high activity. * Thus far; > .remarks I* have to the directed my activities and £ problems, of. our business., I think j they are suggestive of fruitful fields of endeavor for ciation for the coming $ must carry on Asso¬ our year. educational our work, our cooperative work with departments and agencies of gov- ^ ernment, with other organizations,. to their as In a who to earner achieve the r" Unfortunately, co¬ }.£:£■■v.' economic system and who are converting the right to strike into an inhuman method of subjecting our free society to the threat of physical danger, - ; starvation and ultimate destruction. in the field ;of State regulation, in and in conwith-Federal legislation ' nection Battle Line of Conflicting ] and administration, i; But, : portant im¬ as these are, we have some gduties and responsibilities; whiC far transcend our immediate busias Political Philosophies ?*: • of the people it will undoubtedly: Events of the past year - have clearly pointed out that the battle a lines treatment of all its citizens based > have been-drawn mark and well Repre¬ Governors will their responsibility Death Benefits Paid to First—return between policy of fair our important duties government to for the and; equitable enterprise our Conflicting political philosophies. upon the enforcement of laws .ness interests. > ; In my opinion it is time for us against all groups alike;{{ { to take pride in our convictions General Problem Ahead j Second—put an end to the era and to join with others who share of ^unrestricted giving;- both for¬ ; At V-J* Day, the ■ entire - world' our objectives in the battle to pre¬ ? looked to the United States for serve the - 1 very principles which eign anddomestic,; j leadership—moral, political and have made this country great. No "Third—base our fiscal policy economic. The successof the other principles can serve us if we iipon sound business principles, United Nations, the International are to U. Y. Holders by Insurance to respect the rights of the minority . , our g the municipal field sentatives Senators, . those leaders who are consciously and intently working toward a breakdown of even believers in the newly-elected . high such reme¬ dial steps will meet with opposi¬ tion, -for they would require the elimination of irresponsible labor of staunch are States, we, have the for therein lies the true test of a responsibility of preserving for properly functioning democracyour next generation the great am objective which in these cru¬ country of opportunity which our cial times we must achieve and predecessors passed on to us. The exhibit to the other nations of the future of this nation depends upon world. ' "' ; the resurgence and the firm reAs citizens, our part in this pro¬ establishment of the system of gram of reconstruction did not free enterprise, the open ac¬ end on Election Day—these men knowledgment of the soundness whom our votes put into office and propriety of the profit mo¬ have constant need of our advice tive generated by hard work and and our support. • • the assertion of a philosophy of Our investment banking indus¬ encouragement and opportunity rather {than vindictiveness and try has a vital part to play, not only in the reestablishment of our proscription. •:; { ; v / normal peace-time economy, both On Nov. 5, the American people national and international, but demanded a government by repre¬ in raising the level of that econ¬ sentation and an end to bureau¬ omy to new and greater heights. cratic government" by appoint¬ We have busy and worthwhile ment. The insistence upon honest years ahead, but.let us.not become and fair self-government is un¬ so engrossed in our own personal mistakably clear. If the new Con¬ businesses that we lose sight of gress correctly interprets the will any leaders and also United own individual enterprise, productive efforts of which he" is capable.- our personal freedoms engendered by the rights of private initiative and This, to¬ gether with a wider application of incentive wage systems, will en¬ courage the patriotic American wage a and strong but fair labor policy. Such a policy should equalize the legal responsibilities of employee and employer and permit to both a freedom of choice that only • be can enforce businesses and cause, ' government, the outgrowth of thousands of sibility to do everything in < In the field of whereas we too often spend of the principle of self-govern¬ small part of our thoughts ment by a free, hard-working energies on this all-important people,. ; ; matter, :i ■■vr:,.. It is to be hoped that these and • , is the i small business of today ;; •; '. small m £ become the big business of to* • disappointment unhappiness. system free- our compels the devotion and the concentrated at¬ - tention of us all.1 ' • ". families life in benefits in the received insurance first claims, the Institute of Life In¬ reported on Nov. 27. This compares with $159,296,000 in the corresponding period of ,1945, when 152,120 claims were paid, surance $155,007,000 in the like period 1944, when 150,040 claims were paid. In pre-war 1941, the nine months total of payments was and ol $127,144,000 under 136,399 claims. 'The Institute says; •'Of the aggregrate payments in this state, $114,970,000 was policies; and $25,611,000 95,402 industrial insur¬ ance policies. { ". For the nation as a whole, $961,surance under was 100,000 was paid in death claims policies in the first months,: compared with under 962,573 $967,474,000 under 1,008,090 poli¬ cies in the corresponding period of last year and $751,490,000 under 818,255 policies in the first threfc quarters of 1941. : , fulfill the leader's role. :] Fund, the International Bank and other international agencies, the revival of world trade, world habilitation, the of the kind of we future re¬ survival world in which a sincerely believe—all these depended, and still depend, so definitely upon a strong United States. Today, fifteen months after V~J' ; Day, we ; must wonder ; so /have g whether have we stewardships not • failed taking this stand nize the It should be time our g Now obvious to or never we restore — ■ freedom so economic our to necessary great a America. and clever, They have the willingness to ] None of these steps is reaction* sacrifice everything for ■ their ary. Rather, each is a reassertion Underwriters ; . V Bond i & Goodwin Established 1927 must revitalize country if we are to give the World the unique genius: that is America.' - ,0ur work begins home. INVESTMENT SECURITIES right here at In finance and industry Incorporated [J Established 1894 64 WALL STREET NEW YORK 5 we must clear away the chaotic con¬ ditions that healthy prevail, for a is the only sound basis for the role of world lead¬ Boston upon Albany ership that has been thrust US. , / . ! Fiscally; t ' • . we must . in overhaul tax our that will manner a structure the remove present contradictions, inequities and;-uncertainties, and ! provide definite encouragement for 6 • •" . , i. Baltimore Troy Scranton, Pa. ■ . •••' . • Springfield, Mass. PORTLAND 6, ME. 120 Exchange St. New Haven, Conn. . ■ - ■ • • ■ ■ . i ' f'c retail Dallas Woonsocket, R, I. ' • ^ Our J 63 Wall St. Buffalo Pittsburgh salesmen . ■ 1 f We are specialists .in the ;■ NEW YORK 5 Philadelphia Washington Wilkes Barre. federal budget by drastically re¬ ducing unnecessary expenditures; We must adopt a stringent" and publicly acknowledged policy of debt reduction; and finally, i we ^ Syracuse tlie must balance BOSTON 30 Federal St. now economy Retail Distributors R. H. Johnson & Co. all short, our ? Dealers • our us running Fourth must recog¬ our hardworking cere, ; is we that In opponents in this ideological- battle are sin¬ " C that fact in • ' " : 1 - (>L • J(l l, ■ ' ■• ■ - V w. ; % reitail investment field. 10 states enable us to distribute, among real: investors, large blocks of attractively situated; bonds and stocks. | pri¬ vate enterprise. ■■Industrially, with the: greatest potential the world has ever known, we are not even approach¬ ing 7 full capabilities. While to have rid ourselves our we appear of the restrictions and happily our problem here is even more! fundamental. In -the'sim¬ plest of terms, !. to. a.false duction for higher wages. ({ tion welfare of and earner. well of that That as in a a volume production. and territory where than 5,000,000 people 3 live and work. na¬ a nation of a eco¬ source of, product of, the wealth nation. wealth of the any more a be measured by the and welfare of the wage nomic freedom this is as i,ouu com- must progress . g. I firmly believe that the true /progress munities in have succumbed we philosophy of "some¬ nothing"—of less pro¬ thing for Serves more tnan hampering effects of government controls, un¬ .•*, ' But nation and further, the depends upon earner, Thus, the spurious receiving higher; money wages for less work and less effi¬ cient production, paradoxical columbia gas & electric efficiency of its illusory progress of the wage constitutes situation which i a can under 39,698 ordinary policies; $19,208,-* 000 was under 8,917 group life in¬ ' : nine months of the year, under 144,017 nine citizens, as preservation of $159,789,000 death Companies York „New corporation (Thursday, December 12,1946 fTHE COMMERCIAL & FINANCIAL CHRONICLE general Report of Municipal Securities Committee (Continued from the long 3054) principle of page established minimum yield to fund tax levy, which that there will be no funds means It might be well to keep in mind levy that appropriations are made on a > for remission to the various elig¬ Diennial basis, and that the year ible areas. It is interesting to note 1946-47 represents the second year available from the current that this is the first year for the the purchaser past approximate 100 years, that, a general fund tax has not been lev¬ be followed, i.e., (1) Where a call-; able bond is selling at a discount the ied. timate lowest tax rate levied for the gen¬ eral fund was 20 cents per $100 yield computation is to the ul¬ maturity; (2) Where a bond is callable at par and selling at (3) Where a bond is callable at a premium Or variable pre¬ miums, the yield is computed in such manner that the purchaser receive, not less than year, the indicated, should any such call privilege be exercised. also recommended that the there should be available* years The. rate labor, material and of general op¬ of erations. We understand that pre¬ which in remission of taxes is au¬ thorized by various special acts of the legislature, all in accordance of with the in where computing yield it be. indicated abbreviated offering lists as well in as ings.1 : other forms of under offer¬ . Negotiability states, doubt whether the ability, the exists as to attributes of negoti¬ within the provisions of Uniform Negotiable able from special fund, such a laid as tax obligations. This was pointed out by our Association back in 1938. Recommendations made at the time to Negotiable were broaden the Instruments Laws so as a formula rigidly ; down orem the states becomes auto¬ The Boren Bill, II. E. 3129 constitution of the state by the legislature. Briefly it contemplates the bal¬ ancing of estimated income :' against actual appropriations and the levy of a general fund tax to cover the deficiency. Estimates of income for the year 1946-47, ex¬ 2. clusive of a general fund ad val¬ special or feature matic. various articles permitting Treasurer, under Instru¬ ments Law, attach to bonds pay¬ practically all revenue remission , Developments during the year the use of state aid for promoting with regard to H. R. 3129 were re¬ the general welfare and 'prosper¬ ported in part in our Interim Re- J ity of the state. port of last June. Very briefly The state property tax levy is what took place was as follows: V calculated by the State Tax 1. A conference was held on v. Board, consisting of the Governor, V' March 27 between the Secur- * the State Comptroller and State V ities Subcommittee of the In- v Under the present legislation of some ; /:>■;■:V-V1''; there is a variance from the above method instance any reason¬ able estimates of current costs of :: propriations for the current year. We understand that there are 23 This might well portend the need areas entitled to receive aid from for a reinstatement of the general the state through the medium of fund tax next year, and of course donated state ad valorem taxes, when such tax is levied, the tax yield We valuation. Of apropriation. The next appro¬ priation will be: ;the first made since the end of the war, and levy for this purpose has been 35 liminary budget figures call for cents per $100 assessed valuation an outlay for the next year of from 1933 up to the present fiscal somewhat over two times the ap¬ fixed would During the past 30 assessed premium, the yield computa¬ tion is to the first callable date; a ture at its coming regular session. of tax, are reported approxi¬ mately $2,000,000 in excess of ap¬ propriations. This explains the omission of a general fund tax to provide the at- levy for this year under the pres¬ ent law. eaton & howard eaton & howard situation The balanced fund 5 stock fund::;® has created con¬ relative confusion siderable to tainly make seem every default EATON & HOWARD « n • INCORPORATED an Established 1924 24 Federal Street 335 conference, the SEC definitely asserted the power, under its interpretation; of the Securities Exchange Act' in its present form, to regulate * in state and mu->. and f industry took the position / as the law is so construed y by the administrative body, it; 'should amended be so as to ; clearly evidence the intent of Congress in this regard and urged the enactment of H. R.® legislature meets in January, promptly be made 3129 effort will as a amendment this unfortunate situa¬ needed clarifying: the Securities; to Exchange Act to assure the fis¬ cal processes of the states and. local governments and the mar- ; tax remissions. Further¬ kets for their securities—pri¬ it is believed that practical¬ mary and secondary—freedom ly all of the units eligible to re¬ from SEC regulatory jurisdic-, ceive tax funds by remission have tion, either direct or indirect. . varying amounts of, excess funds 3.. .The Interstate -and Foreign on hand, and that' most-of such ; Commerce Committee - subseunits can meet bond v principal ; quently amended H. R. ? 3129 and' interest requirements from and. Voted it out. The bill as ; such surplus funds for a reason¬ amended in Committee provid¬ able period of time. ed for the addition at the end year's Montgomery Street SAN FRANCISCO BOSTON this again " tion by requesting the appropria¬ tion of surplus funds to cover this BOSTON , • quest of the full Committee. ■:;/§ At that or to correct ities the delay on the bonds pay¬ able from the remission of state taxes. We understand that when the A INVESTMENT MANAGERS confer¬ was American Bar Association . It would cer¬ that the state will effort to avoid any The affected. called by the SecurSubcommittee at the re- ence nicipal securities. It also op-:; ; posed the bill. Those repre- > senting states and municipal"... ities, investment funds, the % and interest of bonds of the var¬ Managers and Underwriters parties transactions early maturities of both principal ious units affected. terstate and Foreign Commerce £ of the House, the ; Committee SEC and representatives of the more, h The State Tax Board will again meet next summer to SHARES OF CAPITAL STOCK OF levy for the 1947-48 fiscal year. Its action with regard to a general fund levy for that year will de¬ pend entirely upon the estimated income for the : of paragraph 11 •'. end of paragrap* 15 (c) consider the period and the ap¬ propriations made by the legisla¬ (b) and at the (1) of | of the Securities Exchange Act the;' following sentence: suant to this paragraph Investors Trust your may Write for prospectus relating to the shares be obtained from local investment dealer of either of these investment funds, each of which is managed independently of the or other by a different management VANCE, SANDERS THE PARKER > C0RP0RATI0R group. COMPANY & 111 DEVONSHIRE STREET BOSTON one court street, boston 8, mass. NEW YORK 6l 1,1 1 Broadway shall apply to any transaction with Massachuse Prospectus "No rule,or regulation adopted pur¬ LOS ANGELES CHICAGO jao South LaSalie Street - 210 West Seventh Street Volume 164 L ' ■■ THE COMMERCIAL & FINANCIAL CHRONICLE Number 4550 ' • - — ' — ' ——. "—' 3C6S - ' ' - of the United States holding that States have title to such lands. "As recently as 1933, the then Secretary of the Interior denied an application by a private person for an oil-drilling permit on lands' off the California coast, quoting a decision of the Supreme Court holding was title the to these lands vested in the States, the Sec¬ retary calling this 'the settled law.*' "Four years lutions later, in 1937, reso¬ introduced were in the, Congress, for the first time assert¬ ing Federal ownership of these lands. These resolutions failed of Their, passage. mere nevertheless, created title the these to introduction, a cloud upon, lands. "Since that time, there has been continuous by private Federal oil leases agitation applicants for such on posits. contain lands as are petroleum de¬ therefore clear that of oil with It is chief the these of to known connection this resolution is that applications by private interests, for oil-drill¬ ing permits furnished the first occasion in the history of the Nation for did not a claim that the States lands under navigable own waters. the colud then Secretary of the Interior reversed himself, "Further aggravating these titles, the on and, in the early spring of 1945, publicly announced that he in¬ tended to grant such applications of private that these interests on the theory lands were owned by States. the United "Immediately thereupon, a (Continued on page 3068) Purchasing and Distributing INCORPORATED State, Municipal, Corporation Founded 1898 and Public Service NEW YORK BOSTON '' . MEMBER Securities BANGOR PORTLAND HARTFORD Company OF BOSTON STOCK EXCHANGE Dealers in INVESTMENT SECURITIES Members of New York, Boston and Chicago Stock Exchanges New York Curb Exchange F. S. MOSELEY & CO. Indianapolis Chicago Boston Tex ti le—I ndus tri als Banks—Utilities Members New York Si Boston Stock Exchanges New York Bank & Insurance Stocks High Grade Bonds CONNECTICUT Government Municipal Industrials—Insurance 111 Devonshire BOSTON 9, Street MASS. • Railroad Public Utility 14 Wall Street NEW YORK 5, N. Y ( 3066 THE COMMERCIAL ; '' : * • . « . • . (Continued from page 3065) of resolutions, "composite, Senate of dential which "The mittee in indicates that there parks recreation and developments, private, times alone over leum far public and exceed many the value of the petro¬ \ , *; : . ' "In addition, the testimony re¬ facili- ests which ' . , <• ' '•/' vealed many other diverse inter- conducted are resources "If the The > oi 209 CHURCH / Hartford 7-2669 ; title to land to these our lands states and beneath, submerged or re¬ seizing title reclaimed land or litigation U. S. issue in the pending suit. Government The Senate Judiciary Commit¬ tee, in its report on the Resolu¬ tion, also pointed out: "It is | £ /V Connecticut Coverage We have been privileged to initiate and/or participate in . S • , ! financing and refinancing of Connecticut E industrial, insurance, bank, S corporations for gable waters to remain clouded for many years while the Supreme Court 40 years. is of deciding a series the on fifty-fifth this subject E Congress can, and in good equity should, end all clouds by adopting this resolution. Tre¬ E mendous and public utility over certainly unjust to allow the/ title to all lands under navi¬ case new when the postwar developments settled. > "Another decision by the courts would not be any more effective PUTNAM & CO. I 6 CENTRAL ROW, HARTFORD 4 | Representatives Throughout the State E E/*"/. Members of the New York Stock Exchange =; 1 in preventing later attacks on the state sea'and what lands lie within and harbors. bays j*; * gress Matter of equity legislation hav¬ object similar to that of would as a be forced to enact ing an House Joint Resolution 225. order to enrich resolution. the TwM private per¬ attorneyv for one of these) and one public official ap¬ peared in opposition to the resolu¬ (the sons tion,/ '_,.: ''■*• .1 • which land statehood and reversed himself and all his 'pre¬ decessors in 1945. > /{ "In 1933, before his intellectual somersault, Mr. Ickes: declared it / . be.'the settled law' 'title that ocean ;: within the three-mile limit is in the state of California, and the land may ", not be appropriated, except by . authority of the state.' If there is I any 'grabbing,' it would seemr to / be by the Federal; Government j and not by the state. the to land same would assure purity, justice and rigid conservation of oil,. Yet the fact is that the worst oil scandal we ever had in • ; • incorporation of one oil company whose sole asset appears to be the expectation of obtaining the right to exploit California's oil lands as / the present owners under r state title are dispossessed. this resolution should its adoption is the only way to set at rest permanently a controversy which involves titles oil has been permitted to ohscn^e the to property in every State of the following editorial on the The subject appeared in the "Saturday Evening Post" of Oct. 5, 1946. It is reprinted in this report by special permission of the "Satur¬ Exchange (Associate) York Curb copyright Post,?! if Mr./ to upset; these state titles, every title to ; staterowned submerged or reclaimed land will be immediately important Ickes' fact that, successors manage subject to challenge, and the own¬ ership of property standing on / such land could be seriously ques¬ tioned/Attorney General Robert % Kenny, of California, surely not / to, be classed as an 'exploiter' has ' in his brief, in which he ! joined by the attorneys gen¬ eral of forty-six states, how/ water-front property in cities like :f Boston, Philadelphia, San Fran¬ cisco, New York, New Orleans, Kansas City and Norfolk, * Vir- ' ginia, would- be subject to suits, -v v • - S •/■•'/ :/;.-/ the Commission orders executed '■.fi First in on owners could the of Local Issues J.' never National Bank Bldg., Baltimore assumed long "It is the persuasive: contention; the states that it isn't just a of oil, for if California's posits is subject to Federal seiz¬ ure, so are the submerged lands of Maryland and Virginia, which; yield mostly oysters and clams.I Anyway, the issue is now in the! 2, Md. Tel. Lexington 0210 have arise. submerged land containing oil de- Z '.j.'ii!;• ^ ■ lap of the Supreme Court, where; it may be shorn of sensationalism and decided on legal principles." Respectfully submitted, C. T; WILLIAMS & CO. INCORPORATED Vand Connecticut Securities Utilities . -///<//■///' /:. | INVESTMENT BANKERS '§H' / I® Wj United States Government and Municipal Bonds FIDELITY BUILDING BALTIMORE 1, MD. i Telephone Plaza 2484 Bowling Green 9-2211 te Commit¬ Hazen S. Arnold, H. Wilson Arnold, Fred D. Blake, Edward Boyd, Jr., Edward B... Coughlin, Ruth Cranston, Clarence F/Davis, Charles W. Easter, Francis P. | Gallagher, Hardin H. W. Wayne Glover, Hawes, John G. Heim- erdinger, Gustav Klein, Newell S, Hartford 7-3191 Boston: Liberty 8852 Securities tee—George L. Martin, chairman; William M. Adams, Rucker Agee, ' Railroad, Public Utility and Industrial Issues Fed¬ pass; as sound ★ ' Hartford Bell System Teletype: HF 365 which the repeatedly re¬ fused to lay claim until Mr. Ickes | Municipal New York: to Government eral Primary Markets InK. Springfield: 4-7311 belonged to the beginning of their ; claims, and other nuisances which ;, Insurance * has states from the policy of matter Exchange | in ex¬ "Finally, the incendiary issue of a Members New York Stock Exchange New S . Industrials of oil legislative as mead, miller & co. Members New York and Boston Stock Exchanges Associate Members New York Curb t; Government group ploiters. Actually, the bill was in¬ to 'quiet' state titles to soon as "The committee/concludes that z Tifft Brothers i a tended matter • to Federal this country arose from the leas¬ "Forty-eight S t a t e arid local ing of Federal lands at Teapot public officials;5 representing Dome. And it is also a fact that i among them 47 States, 417 cities Mr. Ickes' promise to snatch Cali¬ located in all 48 States, 50 public fornia's submerged oil lands from port authorities, and other public the ownership of the state of Cali¬ agencies, appeared ; in support of fornia has already inspired the day/Evening, Active Markets 'ft,; attempt by the State 'grab' something as an California from the ; , Baltimore and New York Stock Exchanges i de¬ passed by Conand vetoed by President Truman of broadcasts bill the shown ifiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiHitiiiiiiiiiiiiiimiiiiuiiiifi '■* radio and scribed opinion of the commit¬ tee, should theiupreme Court re¬ "Secondly, it might be sup¬ verse itself, the result would be posed, from all the ruckus, that so catastrophic to the economy of land held under-state title is in- Z the country resulting from the overthrow of long - established variably exploited by thieves and rules of property,/that the Con¬ swindlers, whereas Federal title y "In the Baltimore Stock Exchange New Britain and Middletown "V,- sub¬ /"For example, most of the news to the soil under the open over merged land that the people can / be forgiven for some strange mis¬ conceptions of the whole business. / to beneath the inept, Federal title to versus the pending it would be lie much dispute this distinction should be made in lands '• •' so the on Publishing • was and Branch Offices in s coun¬ Assuming Nation." involving millions of dollars are being delayed until this matter is | which what titles was brought to Supreme Court. Presi¬ dent Truman in vetoing the Con¬ gressional action last August con¬ tended that Congress is not an ap¬ propriate forum to determine the legal issue involved and that the Supreme Court should decide the Telephones: New Haven 6-0171/ , New York CAnal 6-3662 case no tidelands of all of the The 194 to alone, but threaten the title to the the STREET, NEW HAVEN 7, CONN. Bell Teletype—-NH as Supreme Court case, up to the courts to determine in continuous litigation quest of like lands in all states? f. Members Jieto York Stock Exchange . . Co. & There is sea. in any state, what is there to pre¬ vent it from completing the con¬ Chas. W. Scranton difference in title tenances the distinction. to Ml that suggested harbors- and r bays and those lands fronting on the open ment is successful in V; a been lands- in and rivers. If the Federal Govern¬ Statistical Information has there is hat claimed from, all bays, ports, har¬ bors and inland navigable lakes "■ it¬ of every parcel of land front¬ ing navigable waters in the whole Nation would necessarily require judicial determination; • , •', /,;.. / California coast. While this claim the Primary Markets the reverse is affect SECURITIES should ary primarily directed at the oil there, it will be recognized that the action, if successful, would not CONNECTICUT Supreme^ Court of States for it would mean that the bound¬ "It Government Federal Zy;///./';•■/ self, unending litigation would re¬ sult for probably half a century, brought suit claiming lands, be¬ low the low water mark, on the FIFTY - FIFTH YEAR OF DEALING IN reopen Curtis /'/'/■/:/."; reporting gress ' y - .. no reason to decision (the more one their or The . "There has been other land. such produced are - is There has of /these States the by stories the which from States 1946 Company. the question in some other State with-respect to some ing to of these lands upon which improvements have been or Supreme fifty-fifth of this series) will pre¬ vent some other official from try¬ opinion of the commit¬ distinction can be made between the claim of ownership such United the been the ownership the believe have cases the in grantees. no constructed than 54 of lands "In the of any In United obtained." ;&'vi:.■/'/ in State every titles upheld lands Nation. natural ' on legislation. These include, for example: coal, brine wells, gravel beds, oyster beds, mussel shells, shrimp fisheries, diamonds, crab fishing, sulfur, muskrats, marine fisheries, salt¬ water fish, and other industries producing millions in income in parctically States' others. Court affected by this tee, deposits. likewise shows that there has been invested billions of dollars in harbor private interests these lands, which upon have These ' testimony and highways, and other public developments ; on such lands. States; these include Texas, /Louisiana, California, Mississippi, Ohio, Indiana, Pennsylvania, and The public areas, are ber of others. and cities com¬ petroleum deposits in lands under navigable waters in quite a num- ; • include the facilities of every port and harbor of the Nation. Many «. testimony before the improvements by authorities introduced in the House of Repre¬ were and the sentatives. , ' ites, industrial, business,- and resi¬ House Joint Resolution 225 is the • " V, -M Report of Municipal Securities Committee series . • Thursday, December 12, 1946- FINANCIAL CHRONICLE & • —- Private Telephones to New York and Philadelphia BELL TELETYPE—ESTN MD 264 John S. Linen, J. W. Means, D. K. Pfeffer, Malcolm, S. Bell Teletype BA 499 Branch Office—Easton National Bank Bldg., Easton, Knight, Md. Prosser, Russell E. Siefert, Louis W. Stayart, erick W. Woll. Harry Theis, Fred¬ Willey, and Albert J. T.. Number 4550 Volume 164 ; THE COMMERCIAL & FINANCIAL CHRONICLE 1946 Treasury . (Continued from page 3053) ) certify for banks purchases of longer term than of securities longer cates, it necessary was to make securities markets if the in ury a ury was that which was markets buying had able been to simultaneously deprived of a comparable volume of investment funds. ,' (> , . was to absorb periodic and, at times, necessitous selling. Obviously, .that price level could being, asked Naturally, redemptions of - , Series E $4,077,084,000 294,417,000 2,450,564,000 _ F Series G ,.™..- Total On April J3Q, -1946/transactions being in Treasury securities took place now represented and G Savings something- over which a little by Series Bonds is 46 E, F now billion, of that other made statements were emphasize to this; pattern Series E. In this connection your mittee wishes to make on quotations. Under circumstances government these security dealers had but to wartime practices of markets. When the one limiting daily were continue to market is yields should conform namelyj %% to the further much-publicized billions Of sales to be made by so-called specula¬ a increased actually pected to the cause Sales Your tion more were as committee raises the ques¬ to whether the IBA should Circulation in of to securities Treasury and Federal Reserve Banks The figures this time of Oct. 31, 1946, and show that the money in circula¬ by those are tion at course, non- of At present, and bank; investors. that date (including of that held in bank vaults member banks Reserve system) same dealing with pluses to the redemption of Treas¬ $3,459,434,174. * s * Street, Baltimore 2, Md. PHILADELPHIA Hagerstown, McL Washington, D. C. MEMBERS NEW YORK STOCK EXCHANGE and other leading exchanges. - LOUISVILLE , Cumberland, Md. .1- ho view. terms and conditions the ing the point of professional war, the on as dur¬ and from the view¬ investment ROBERT GARRETT 6- SONS distributors, the steady, substan¬ ESTABLISHED 1840 August and tial absorption of these issues has ^ been remarkable—in the absence >W;'- ; v ' the unsettlement in stock market of the emotional prices caused the Treasury isted in secu¬ wartime appeal that and ex¬ v:' V; ■*' /■ with rela¬ | iV ^ K rt. tc % ' ? , *f '';dV.::v.- ■[, WV" - <• ?i\ . - 5* . ; «';>■ : . ■ •• 'i V V- N 1 & ; > \ *<,/>; ' Investment Bankers s« % i ? 4 jf - > i/"1 V ' 'v ~W \ 4 - BALTIMORE 3, • \' . <>V » i * s 1 „ — - !\- * MARYLAND BAKER, WATTS & CO ESTABLISHED 1900 Members New York Stock Exchange ' Members Baltimore Stock .- A'* -'• Members New York J' v, i '• ! *i* 5• ' Exchange Curl}, Exchange c ' ,vy.' ' , o Government and Federal Land Bank Bonds MACKUBIN, LEGG & COMPANY Maryland County and .Municipal Bonds Listed and Unlisted Stocks and Bonds ' • , 7 ; Active Market in Local Securities BALTIMORE 3, ;'r • ' , ' ^ NEW YORK, N. Y. Members New York Stock New Exchange , York Curb i:)it?A S. MOSELEY & TTENDEN National Bank Bldg. '■ Clarksburg, w. Va. & Telephones: New York—CAnal 6-7162 Teletype BA 395 (Assoc.) CO.; BONNER & GREGORY—NEW Baltimore—Calvert 6200 ■ YORK CITV CO.—CHICAGO )NRAD, BRUCE & CO.—SAN FRANCISCO, SEATTLE, . Exchange MD. \ West Virginia Representative, Union ESTABLISHED MD. CALVERT & REDWOOD STREETS A.".'; trV1 ••.*-r:-'" the was a which your commit¬ ex¬ prominently in September, Associatb of Federal, $28,600,120,086, as against $28,506,662,707 on debt that is not increasing but Sept. 30, 1946, and $28,049,136,may be expected to decline. Your 408 on Oct. 31, 1945, and com¬ committee believes that such debt pares with $5,698,214,612 on Oct. 31, 1920. Just before the out¬ reduction should be brought about break of the first World War, that by applying Treasury cash sur¬ is, on June 30, 1914 the total was in prospect, we are NEW YORK 1 ,; and agents. continue, regardless of the condi¬ tion of business, to urge the sale of the maximum possible amounts 6 S. Calvert V Com¬ Treasury Department in has issued its cus¬ mental deficits. This may have Washington a more deflationary effect than tomary monthly statement show¬ excessively high taxes, and may: ing the amount of money in cir¬ deducting the create an environment unfavor¬ culation; after money held in the U. S. Treasury able to full production. Established 1853 'S of The offer its Savings Bonds, Series E, reverse. In the latter part of on lacking F, and G, to the public during Securities The Treasury has continued to in their visible volume that prices period when such sales subject tee expresses tive holders of long-term Treas¬ sources were so Money savings to non-productive securi¬ Treasury Certifi¬ on and , from such Governmental SteinBros.&Bovce war¬ price decline. From that time and of rates would be inimical to the through the middle of August, best interests of the economy. 1946, the price movements of Whether higher levels are desir¬ longer-term Treasury 2^% bonds able in the short-term or the longranged from 102 ^ to approxi¬ term areas of Treasury securities, mately 104. or for interest rates in general, is It might be added that the ury bonds never appeared. ownership " ties which represent past govern¬ ob¬ 2%% on long-term Treasury bonds. There is general agreement that any lower pattern cates, offerings without absorbed the Treasury security in which market time pattern of borrowing rates, actual market an reestablished thus was in shift a lieves that the current outlook for no recourse price changes under the presump¬ tion of contributing to orderly • for the public debt from the banking highlights. their individual abandon near •—rather than to continue to strive market than-counter the the This, completes our summary of history-and; aome of the Your committee be¬ • sharply lower- in public interest to stress the need for a free flow of savings into consu¬ mer goods and business ventures ties to non-bank investors diverts com¬ some in system to other investors. $1,271,046,000 • that be may . 30 billion is in over the over-the-counter markets the centage pf the increased public Treasury's debt retirement by government security dealers. It program, which by the end of debt with non-bank investors. The is noteworthy that at no time dur¬ 1946 will have totaled 22.8 bil¬ objective has been to reduce the volume; of swollen disposable in¬ ing the course of the war or up lions^ ^Further, contributing to to that particular date had this this has been the ability of banks comes that might be used to com¬ variance occurred. The volume to increase their loans, etc., in pete for a drastically reduced vol¬ of Treasury security transactions unexpected volume with a conse¬ ume of civilian goods and servon the Stock Exchange is usually quent lack of interest in the bond negligible. The volume increased markets. sellers found occasional bids it $5,551,021,000 in as cautions future ices; i.e., to limit the rise in the mittee—Aubrey G. Lanston, Chair¬ general price level which nor¬ man, Herbert N. Repp, Vice-Chair¬ mally accompanies and follows a man, M. S. Andrus, Eugene R. major war. Black, George Buffington, Robert In peacetime, the emphasis H. Craft, Edward B. Hall, Francis shifts to achieving and maintain¬ M. Knight, Charles V. Leroy, Deli'd ing prosperous business condi¬ mont K. Pfeffer. tions. Sales of Treasury securi¬ pf Treas¬ During: the war and on ; the floor; of the New York ury borrowing costs should hot be servations. reconversion periods a basic goal Stock Exchange at levels sharply increased. In part; the lack of ol lower than those which were Treasury^iinancings has been buoyancy may also be attributed quoted largely on "an order basis" to the\ continuous enlargement of to place the largest possible per¬ the floor—even at mittee $6,822,065,000 ; The amount of the national debt > such that remainder of the dead horse? It is on this point that your com¬ Redemptions over Redemptions $4,995,497,000 —$918,413,000 171,641,000 ^ 122,776,000 383,883,000 2,066,681,000 , , prevailed. has Excess of Sales Series - The question is who carries the 1 to Nov. The results from Jan. com¬ ■ out¬ 26, 1946, are reported as follows: E bonds have been considerable but Since Sept e m b e r prices in The Treasury Savings Bond Di¬ longer-term ' Treasurysecurities vision is currently engaged in a not hold. have improved; but the market, commendable and important effort Finally, the' continued rise in on the whole, has not been buoy¬ to perpetuate and increase the stock prices, the inflationary as¬ ant. Whereas, in the Spring, regular purchase of E Bonds un¬ pects of the economy, and the Treasury and Federal Reserve der the payroll ; savings plan. action of the Treasury security officials lent substance to the While the continuation of the markets swung the prevailing at¬ thought that the pattern of %% Savings Bond Program meets titude toward interest rates from to 2Vz % for Treasury financings with general approval, there are one in which lower levels were was satisfactory (and should, not many differing opinions as to the expected to one in which predi¬ be lowered), the market condition proper management of the public cations and a fear of higher in¬ in Treasury securities was now debt as a whole. terest rates bonds E standing since Jan. 1, 1946, been slightly over V/z%, sales or expense. make investments, and the mar¬ ket for long-term Treasury bonds was now. effort of Treasury markets other level which had been created by continuous bank unset¬ sales amount the in aided by rumors from Wash¬ panies market the i.e., existed; the The larger than usual commitments in reversal from that which had pre¬ viously in 101.18. ington that the Treasury was con¬ sidering the advisability of offer¬ ing additional long-term Treas¬ ury bonds. During this same period investors such as insurance com¬ sharp a low of new tlement they they needed or desired a higher income than In other words, the unexpected need for funds which arose from the debt retirements created a situa¬ tion in the Bank Eligible Treas¬ ielt 21,&s of 1967-72 sold down to tively little less than many ury securities held by the The net decline mercial banks. they have been people expected. Finance and Securities Market rity markets to again come under pressure. On Sept. 10, 1946, Treas¬ ;■ 3067 LOS ANGELES, PORTLAND (ORE.) THE COMMERCIAL & FINANCIAL CHRONICLE, and Revise and Amend State Securities Laws '■ is publicly available the is or made available to the Director of ■Securities. •' -. New --V:' York: Effective April 23, 1946, the New York law was amended to provide an exemption the requirements for filing statements and supple¬ mental statements, by application Attorney General, as to the following securities: to the 1. Securities of a corporation which has been in existence for a period of 10 years, or whose pre¬ decessors have been in existence for such an immediate and con¬ tinuous period, and which secur¬ ities have not been in default in principal interest or shall same remain legislators were predominantly occupied with wpr emergencies or ceding other most essential matters. the years, common stock dividends at the rate of not less than 3% of the 2. curities laws book value thereof. among were which have been opportune time. fully listed upon any exchange in the State of New York as of Jan. 1, 1925, and long thereafter so as a , Chicago Louis Arthur Davis, and or and by Field Secre¬ administrators' law The tary. however, St. and Murray Hanson, General Counsel, very > period, this During Cleveland, Cincinnati, Louisville, Se¬ leisure more members from New York, ed by deemed to be things which those well could wait, Securities committee were from the States of Illinois, Minnesota, Missouri, Ohio there have been many matters of The meeting was and Virginia. entirely informal where all pres¬ ent had full opportunity to put forward their buckley brothers ions and After Members New York, Los Philadelphia and observations, opin¬ suggestions, have not, an final Their session. Exchange yet, as This The Private Wire System ; the • year war conclusions been has been a state nine legislatures so- only being in session. 1947 Jn WALNUT STREET be in Teletype i of Wilkcs-Barre: Los Angeles Long Beach f Beverly Hills due—in is overdue. San Diego Lewisiown The mod¬ number of the periences and new developments N. Y.-NY 1-2546 Hagerstown a state laws to attune them to ex¬ Phila.—PH 265 Phila.-—PEnnypacker 5«5976 % N. Y.—WHitehall 3-7253 securities law will regular session. ernization . legislatures of 43 the states having a PHILADELPHIA 2, PA. Pittsburgh soned and more some instances, long More uniformity of the fundamentals of such laws is Hanover , to a hindrance grade of less the sea¬ eral economy. , .. .^; £' these But things will not be about - without thought brought and effort. Someone must assume Responsibility land leadership; This, in turn calls for preparation against the day when the legisla¬ of tures these 43 states will be convening, beginning with Jan. l; 1947, Preparedness calls for a survey of the problems and devel¬ opments in detail in each of This survey should some the 43 states. be supplemented by consultations state officials, particularly with the administrator law, on of each state the basis of arriving at a undertsanding and a co¬ operative effort to the public common economy. This effort layed. should not be de¬ be begun now It should particularly true during and pursued, actively, to some the deep depression period and to logical conclusion. ; * some degree during the war period. Primarily,'this is the function These laws, with rare of the State Legislation Commit¬ exceptions, have come to embody ambiguities tee and the several Group Legis¬ lation Committees. But, in real¬ and are incapable of interpreta¬ ity, it is, over all, the business of tion with a degree of certainty the investment industry, individ¬ was necessary to the smooth function¬ ually and collectively. ing compatible with the public in¬ terest. In ROBERT G. MEAD, Chairman State Legislation Committee. states the laws some Reports Rise in Utilities made called non-legislative year; COAST TO COAST New York than meeting executive 1946, the first after period, of speculative typp. Such laws are sorely in need of careful survey and revision both for public protection and the gen-* hastily drawn and without the time necessary to completely co¬ ordinate such amendments with the rest of the Act as a whole. Equity Financing public. Telephone: securities j. conference the the Committee held Angeles Stock Exchanges New York Curb 1420 The instances. industry itself, through the, NASD daily listed so tions for the preceding 10 years, and have paid preferred and com¬ mon stock dividends for the pre¬ six of more to the sale of the better . obliga¬ on number a have become . from dealers' broad general economy country demand revisions current interest such as is now scooperating as never be¬ and any securities senior thereto, rules and regulations under the laws and practices in the several fore. NASD activities, alone, conas well as securities and any se¬ s t it u t e substantial regulation. curities senior thereto becoming states. Among these is that of the State policing is supplemented- by fully listed on such exchanges Declaration of Policy by a num¬ the SEC. ; There no longer re* since that date arid remaining so ber of the state law administra¬ mains an excuse for multiple and listed for the 10 years preceding tors as to stock purchase options the offering, and additional or warrants. This matter has been duplicate supervision to the de¬ heretofore imposed. Sim* the subject of much discussion, gree amounts of such securities as have been listed for at least 10 years casual and official, among invest¬ plification and cooperation should now be the major slogans. With bankers and committee immediately preceding the offer¬ ment a good understanding of the pub¬ ing date, which additional secur¬ members. lic interest, a patriotic and earn¬ ities it is planned, as of the time On May 16 a conference was est purpose, regulation may pow of the offering thereof, to list. held at Cincinnati between a be reduced *to the minimum; and 3. All securities enumerated in group of representatives of in¬ with even a greater efficiency Section 359-f, subdivision 1 of the vestment bankers, almost wholly than in the past, law, with the exception of para¬ of the IBA, and a committee of A number of the: state : laws, five from the securities laws ad¬ graphs (b) and (k) thereof.' ■' over the years, have undergone During the war period, legisla¬ ministrators, at which the subject various amendments and even stock purchase options and tion by way of revisions to all se¬ of amendments to amendments. curities laws, national and state, warrants \w a s •• considered Ik at Some such amendments have been The IBA was represent¬ was at a standstill. The minds of length. (Continued from page 3057) tion the of the in Thursday, December 12, 194$ am¬ ply justified. The public welfare (Cpntihued from page 3052) have given a very good account of stock to stockholders at $120 per themselves. share. . In addition to the An additional source of n6w financing by electric and gas utility companies, capital was available to the par¬ so far in 1946 the Bell ent Telephone company, American Telephone System has entered the capital & Telegraph Co., which received market for a sum of $578,000,000 in 1946 (through Nov. 20) i $16,of debentures, including the cur¬ 850,720 in cash payments made by rent Offering by American Tele¬ holders upon conversion of the phone & Telegraph Co., expiring 15-year 3% convertible deben¬ Dec. 16, of 15-year 2% % con¬ tures, and in 1945 such cash pay¬ vertible debentures to its stock* ments on conversion provided an holders. In 1945 debt financing aggregate of $31,072,760. i_; by the SystenT reached : a total Expenditures for new construc¬ of $575,000,000. It is interesting tion by the Bell System amounted to note that whereas in 1945, 95% to $267,000,000 for the first six of the total financing by the tele¬ months of 1946, as compared with phone companies was for refund* expenditures of $255,000,000 for ing, in 1946 the trend has been the full year 1945 arid the man¬ completely reversed with approx¬ agement of the Telephone Com¬ imately 95% of such financing pany have stated that expendi¬ representing new money. tures of more than two billion : _ In 1946 one subsidiary company, dollars may well be required dur¬ Mountain States Telephone & ing the next few years to provide Telegraph : Co. raised approx¬ imately $9,500,000 from an offer¬ the plant necessary to handle the of ing stock common holders and in 1945, England H E RRE RD to Telephone 000 from current demand for service on stock¬ Southern norma), basis, to carry put an , Co. betterments which were suspended offer- the during war, and to provide At the present time _,000 shares of common for growth. 0 Underwriters, Distributors, Dealers in CORPORATE AND MUNICIPAL SECURITIE S UNLISTED , Railroad, jPublic .Dtilit^ and Industrial SECURITIES We interested in block offerings of are securities either for 1 MEMBERS New York Stock Exchange - New York Curb our through own account our listed and unlisted or for distribution: ', organization. , / - Philadelphia Stock Exchange Exchange (Associate) ESTABLISHED 1914 Boenning & Co. 1500 WALNUT STREET Philadelphia Telephone • Teletype: Pennypacker 5-2700 MEMBERS PHILADELPHIA PHILADELPHIA 2, PA. PH 4 PHILADELPHIA 3, PA.i v'.. ... v. •.» -.v ■' ' r . .. (ASSOCIATE)- 1606 Walnut Street Barclay 7-4641 ■' STOCK EXCHANGE MEMBERS NEW YORK CURB EXCHANGE New York Telephone .♦ i \ 5-8200 v.' ft PEnnypacker . a plant Bell System Teletype PH 30 . ' .. ... v i New York , *•-& v } t", Telephone COrtlandt 7-1202 Volume 164 v. THE COMMERCIAL A FINANCIAL CHRONICLE Number 4550 [the provision of additional plant and normal voltage conditions. A cash by the holding companies.. and'facilities is being, impeded by similar deficiency exists in power The following list1 of companies is Shortages of certain critical mate¬ station capacity in some areas, indicative of what may be ex¬ but this is not as. generally exist¬ pected rials. and has been compiled The operating utility companies ent as the deficiency in distribu¬ from tentative plans which have have been faced with problems tion plant. The increased invest¬ been filed with the Securities and Common to many other industries ment required to correct these Exchange Commission or from in the form of increased wages, conditions will not increase rev¬ public statements of the prospec¬ higher operating costs and the dif¬ enues materially at this time. In tive vendors. The list is by no ficulty in obtaining construction time, however, it will be reflected means complete and does not in¬ and replacement materials. Such in substantial increased demand clude any of the companies whose higher costs have been offset by for new capital, which will tend common stocks will be placed the elimination of the excess prof¬ to restore investment ratios to lev¬ upon the market by means of dis¬ its tax with the result that ings available for in 1946 1945. will be earn¬ stock common higher than in - With the advent of V-J Day, the \ els more war normal in line with pre¬ conditions. tant factor to A second impor¬ note is that new plant is costing as much as 50% than prewar plant, with a more managements of many of the elec¬ tric and gas companies expected resulting increase in maintenance costs and sharp drop in kilowatt hour in¬ dustrial sales and reduced operat¬ raise the investment ratios. a ing cellation of war failed to Both of these factors may be construed adversely to the utilities. Never¬ contracts and the theless, we conclude that the in¬ trinsic position of the operating rapid to period ot reconversion. duction in further can¬ due revenues to tendency a revenues The re¬ in many cases materialize, the loss in utility companies have never been sounder; than it is today. The tribution to stockholders ing companies a operating company to be distributed to the public has been selected by the management of the holding company in col¬ means of prices business the board securities will be own" by offered for competi¬ are of staff of of duct consideration un¬ the company vided of men attention successful the In pro¬ short long experience and be should possibility contract, no the con¬ of the entering into if for even a given a service relatively period of time, so that the offering for cash, either by j udgment in a wide field of ac¬ many problems encountered in the means of underwriting or offering tivities, including legal, financial, transition period from holding of rights to stockholders, of over engineering and construction, ac¬ company control to investor own¬ the 15.000,000 shares of with a common stock counting market value, based on the taxes, /rates /and ership and present level of prices, ill excess other matters. operating fronted company With Public will be with company* ment experienced be met. Service Securities % Total Common to Be Sold *19% Company— Company American Gas & Electric witness eral level man/Albert T. Armitage, F. Ed¬ on Frederic H. Brandi, ward Bosson, service Joseph T. Johnson, Hugh D, Mac- the holding companies Webster, Edward H. York. ert C. We specialize in Operating Public Utility Common Stock Issues entire new gen¬ prices for utility equities Birmingham Electric Company .A---.,-.™,--- 100% t46V2% California Oregon Power Company-^——I——— 100% to f46 lk % and reasonable to both the seller .Atlantic City Electric Company - Carolina Power & Light Company Central & — Florida Power & Light Company—— Power & Light Service Company — 100% —— .Wisconsin Power & Light / 4« "KArnall St Go. investing public. Dis¬ vi w • ;.v, *<fc <lr' 1 "W v< New York Stock Under Exchange New York Curb petitive bidding. . - ' • - ■ (: - Philadelphia Stock Exchange Exchange (Assoc.) 1528 WALNUT STREET practices which have 15% been developed as a result of the 56%^ competitive bidding rule, PHILADELPHIA 2, PENNA. Bell System TeletypeJPH 22 the 17.6% 100% — —— — 46V2% 64&% — »— 15% — 100% 46% Company— *Plan of Electric Bond & Share Company Stroud & Company [INCORPORATED contemplates offering existing market stock to its common stockholders at prices under presumably without underwriting by bankers. fplan contemplates sale either at competitive bidding or in such as the Securities and Exchange Commission may permit. Underwriters and Distributors other manner R ail road, Public U tility and Municipal Security Issues WELLINGTON f; ~r. :i: "T ■ fftfcFUND Maintaining Active Trading Positions in Guaranteed & Leased Line Stocks Equipment Trust Obligations INCORPORATED NEW YORK 5, N PHILADELPHIA 9, PA. W.f L. Morgan & Co. . Public Utility Stocks Underlying Railroad Bonds Public Utility Bonds Pennsylvania and General Market Municipal Bonds 1928 123 General Distributors S. BROAD 120 STREET . Bell System Teletypes—PH 296 & PH 297 N. Y.-Phila. Private Wires—REctor 2-6528 & 2-6529 ;- REAL ESTATE TRUST BUILDING PHILADELPHIA 7 Y. BROADWAY REctor 2-6528 PEnnypacker 5-7330 'v-;vv:v V*;/ * • ■ - .,Vf-YyV 'Semi-Annual Valuation of Railroad & Industrial Equipment Certificates' and "The Bond of the Week"'—a series of articles on railroad bonds. r v Members "':; particularly substantially, ,100% . A——— ———— fair — Public Service Company of New Mexico Toledo Edison Company are under the present system of com¬ Oklahoma Gas & Electric Company— Texas Utilities prices which 15% Company>~.-.A-----------r--r Pennsylvania Power & Light Company—.. obtain ————- 15% Company— situation where it will be difficult crease Company City of Philadelphia Bonds a 15% Northern Indiana Public Service Co.———; Ohio Public creating and to the iMontana Power Company—.— Mountain States Power whole, tribution costs would likewise in¬ Michigan Gas & Electric Company Minnesota a 14% — Kansas Gas & Electric Company—— as 20% South West Utilities Company Detroit Edison Company Municipal Authority Bonds an of / personnel, The manage¬ Bain, Edward K. Van Home, Rob¬ of atively" short space of time/ Un¬ less sound judgment is used, we may ■ Com¬ mittee: Duncan R. Linsley, Chair¬ con¬ problems many which in the past they could con¬ sult may Respectfully submitted For the first time, therefore, the management of the services - to operating v ■ of case of the smaller operating companies, we feel that serious of coihpanies responsible willing to and business. holding companies. The personnel service are that selected many der the service contracts with the these of who time to necessary specialists subject to their call were v provided and directors composed the devote cannot afford to main¬ large a of citizens local the and tain example who is with relatively smaller operating companies are -"on their of $300,000,000. rendered being absorbed by The timing of the sale of these rapid increases in commerical are at the lowest level in history, issues is a matter of concern to light and small power business in spite of increased costs, and it the investment banking industry, and in residential sales. Due to is evident that the industry is de¬ and unless some means can be strikes and the inability to get termined to continue the policy found to provide an orderly dis¬ hew materials as scheduled, the of rate reductions as time and tribution of these issues, through electrical manufacturing com¬ circumstance? permit. no fault of its own the marketing panies have not as yet been in a It is quite improbable that the machinery of the industry may position to deliver electrical ap¬ volume of debt financing by elec¬ not be equal to 1 the task. It is pliances in volume with the re¬ tric and gas companies in 1947 most important that the manage¬ sult that the utility companies will reach the level experienced ment of the holding companies, in have not yet hit their prewar either in 1944 or 1945, as in many collaboration with the Securities stride in load building programs. cases refunding of higher coupon and Exchange Commission, de¬ rate bonds has been largely con¬ Two important factors affecting velop some program which will summated and the demands for the present utility picture should result in an orderly process of foe noted. Most companies have new money may be delayed for bringing the individual issues to foeen unable to build lines for sev¬ reasons already set forth. We may, market. We have had a demon¬ eral years and require extensive however, look forward in 1947 to stration during the current year increases in the capacity of trans- a substantial volume of common of the depressing market effect mission and distribution facilities stock financing in the form of of a great volume of common to restore normal excess capacity portfolio securities being sold for stocks being offered within a rel¬ war the many complete, it does embrace company will be able management ating with the local operat¬ ing people, prior to the time the tive bidding. With the distribution of the common stock to the public, sale for cash: offerings ligation to see to it that before operating company stock is distributed to the public the oper¬ the laboration While the foregoing list of con¬ templated take upon themselves a moral ob¬ tors of the Southern and Corp.) rather than management and board of direc¬ of hold¬ for (as Commonwealth 3069 ■ I THE COMMERCIAL & FINANCIAL'CHRONICLE ?Thursday, December 12, 1946 ; - ■ — - • ■ • ' • The International Bank and Its Securities (Continued from page 3048> territories cated is marketing of its own: obligations. It is, in short, a going concern. the not the member project itself a is comparable agency of the member which is accept¬ ?;..: ii able to the Bank, fully guaran¬ Let us consider the loan opera¬ tions of the Bank, * ty); tees - the .repayment of the y principal and the payment of The principal purposes of the v interest and other charges on Bank are: or ceives lo¬ for borrower, the central bank or the some h To assist in the reconstruction 2. The and devolpment of territories members by facilitating the investment of capital for,pro¬ stroyed the reconversion facilities by disrupted or cial and of in resources developed countries. less ■" ?' 2. To promote private foreign vestment, I as have in¬ already stated, and : 3. To promote the ance growth trade and long-range bal¬ of the international maintenance of ; equilibrium in balances of pay¬ . ments by encouraging interna- tional investment for the devel- V bpment L of the of resources '" p r o d uc ti ve members, thereby raising productiv¬ assisting in ity, the standard of living and conditions - of labor in their the Bank {territories. For . these ; purposes .. make may loans or or participate in direct guarantee in whole or in part loans made by private inves¬ tors through the usual investment channels for the exclusive benefit of its own members. shall be subject conditions: When . the Such loans committee, in¬ cluding members of the staff of the Bank and a representative applicant,, has submitted written report recommending the project after a careful tech¬ a nical, engineering, and eco¬ nomic study of the merits of f the proposal.-, 4. In the opinion of the Bank the rate; of interest and other charges? are reasonable and such rate, charges a*id the ? schedule for repayment of principal are appropriate to the project. 5. In making or guaranteeing a loan, the Bank shall pay due regard to the prospects that the borrower, and, if the borrower is not a member, that the guar¬ antor, will be in position to meet its obligations under the ? loan; and the Bank shall act prudently in the interests both of the particular member in whose territories the project is located and of the members ? a whole. A whose investors, a loan made by the Bank re- portion con¬ relevant- to weighed two May, its 1947. Bank ' invested ' to achieve the purposes of largely in short-term obligations the Bank which I have mentioned *Cf the United States Treasury. By ? impartially in which such funds immediately usable ity in the member nations and to alone, facilitate repayment by the rowers. 1 The , ' Bank nounced the cations Chile, has ? -- receipt of loan appli¬ of intent from Denmark, France, Poland, the Netherlands, Czechoslovakia* Luxembourg, and Iran.) These re¬ quests cover both reconstruction programs and developmental projects. They cover only the fi¬ nancing of acquisitions abroad of materials and equipment and not lb cat currency-financing of labor, the the the Bank I ' ; - ' ' -V promotion of not balanced,- growth international t r a d e and the maintenance of 'equilibrium in Such currencies, payments, conditions important if the borrower is to be ( - an individual loan application, give careful attention not only to on must have recourse to the private ■ capital markets; It is anticipated ; that; Eventually' the Bank will i the details of the particular proj¬ ect but their relation to the broad carrying out of the project and twelve or ? Loan They cover of maturities of from ten to twenty-five committees years. » ; actively considering three of the applica¬ tions. No loan are decisions yet been taken, have as Exchange and balance c$£ payments situations make it un¬ likely that df- securities be Such repaid. The Bank must avoid political activity. But where a borrower have im¬ previously been the attention of the brought- to Export-Import report to the Congress Of last March the NAC indicated that the International Bank would the principal to make agency . portant ? economic bearing the markets immediate of the • mini¬ borrowers; the. policy of Bank the f United r om the the? outset consequences in in be given careful consideration in U. S. passing on the application. of the International Bank. us has turn' to the financial side of the capital subscribed would about $8 billion. to legalize the obligationsjpf the; Bank for investment by insurance? companies; hi thd District : of Co-1 lumbia. Action ip this field forms a part of the legislative programs? : rise to , The Bank js authorized to call - of number of national and state a projects. Tfoe Export-Import Bank to enable the Bank to meet inter¬ held has been sb informing applicants est and amortization and associations up of Finally, a financial New York Telephone Transportation Co. Rector 2-1282 All Issues present) indications suggest that; may? confidently await action during the course of the next leg¬ we sessions for Members New York Telephone ? t— Bell Teletype - PH 378 y the - case of are — WEST VIRGINIA *1 INDUSTRIALS BANK STOCKS — ?| ; ? THOMAS & COMPANY UTILITIES ?? Exchange • Pittsburgh Stock Exchange (AssociateJ: Chicago Stock Exchange Chicago Board of Trade capital and surplus of all banks, ? investment by state banks isj permitted. Mutual savings b a n k s, withi total assets of about $17 billion, exist in 17 states. In four of these? - Butler, Pa. in-j vestment in tHe; obligations of the ? .? course Investment Securities BRANCH OFFICES - , total? the haying 62% of the total assets, Clark, Dodge & Co., New York City and to Branch Offices Wheeling, W. Va. of now mitted. New York Stock Private Wire pro-j no JMembers ; 6% some International New York Curb banks met. But in twelve states rep- resenting GENERAL MARKET MUNICIPALS national vided that certain requirements of? the bank supervisory authorities' PITTSBURGH, PA. RAILROADS }; States, with capital and surplus of] over $7 billion, may gen-; erally invest up to 10% of their capital and surplus in securities? of investment quality of a single?; issuer. No legal barriers exist in. Established 1891 ? ? well Philadelphia 2, Pa. , eligibility1 be briefly summarized. Commercial banks in the United 1904 COrtlandt 7-6814 the . The present status of may Philadelphia Stock Exchange. ' V? - of classes of investors rn; the states in which large invest" ? Samuel K. Phillips & Co. Packard Bldg. most principal Real Estate Issues ESTABLISHED • country. It is, of course, too early ; to predict the final outcome but ment funds exist. , us rep- : meetings with the principal1 investing ' institutions and state requirements Philadelphia — institu¬ number of resenting the United States have Specializing in " > The NAC has recommended action to amount suggested in the-Fed" legislative program of the Council of State Governments and the- Department of Justice. present 38 $7.7 billion. With the addition of the sik likely countries I mentioned earlier, the members Legis¬ legalizing such obligations) been eral-State of the Bank. The authorized capi¬ tal of the Bank is $10 billion. The subscriptions to broaden potential " markets for the obligations lation Ill Let { efforts tions. programs investment outlets The authorities of the United States have interested themselves 20% of its subscribed capital to serve as working funds. The other 80% may be called only as needed development to authorities in many parts of the A. E. MASTEN & COMPANY . < islative PENNSYLVANIA in transition consequences thereof, I feel, must Philadelphia ■[ placed Canada. - • be the in'the "Uhited States and perhaps ' the satisfactory attain¬ of the Bank and the repayment of its loans, such policies and such economic on ment of the purposes Pending the effective n e e d s significant volume may p e r i o d of reconstruction, and therefore the Bank must look at number of these applications policies of a any the Bank shall be sound and shall any ; A had mehfc. the prospects of repayment of the loan. We intend that the loans of . GUARANTEED RAILROAD STOCKS •: \ , position to meet its obliga¬ haps $800 million of its own funds tions -to the: Bank, I believe that available for loans. For operations the Executive ? Directors of the in larger amounts, and in order to Bank must, therefore, in passing replenish its working balances, it ject to regular amortization. range and " j The Bank; will thus have per¬ in. a PHILADELPHIA BANK and INSURANCE STOCKS PH80 - expenditures i the-Bank may incur in such > as of , although usable for administrative All loans of the Bank will be sub¬ a business of making emergency long-term loans for reconstruction RIttenhouse 6-7700 readily available for Current loans long-range market its securities in a number ? trade, financial, and investment of foreign: market s—especially ■ policies of the borrower as the European—which have tradition¬ latter might affect the useful ally financed international invest- and other local costs. it Js Bell System Teletype $720 . rencies of balances it year about in loan i Operations, and the equivalent of almost $800 million more, in cur- * ' principal purposes is the next will have million of United States dollar funds, some • $80 million of Canadian and other ? considerations - „ of available i- ; Among of •* an¬ economic : bor¬ aiready letters or I - - . Export-Import Telephone has increase levels of economic activ¬ States in general to withdraw the Phila. it May essarily to PENNSYLVANIA TAX EXEMPT SECURITIES members I am certain that all of the member governments will dilect their representatives to act on loan projects on; the basis of mum Specializing' be be earlier. ' ; • provisions will result in Carefully considered loans of a productive character designed to With the coming into effective op¬ eration of the International Bank Established 1907 or Only economic considera¬ shall . order for which the loan operation of the International Bank the Export-Import Bank has extended such credits limited nec-> UNDERWRITERS & DISTRIBUTORS cerned. These able terms. Street, Philadelphia 2, Pa. further decisions, and these considerations foreign loans for reconstruction and development which private Capital cannot furnish on reason¬ 1529 Walnut In shall be JANNEY & GO. | member arrangements to en¬ that the proceeds of any loan used efficiently and only for Bank. In guaranteeing other as , of the supervisory of the ,;£■ by its Articles of Agreement from ■t interfering in the political affairs rency of each member. The Bank I of any member, nor shall it be in¬ has announced its intention to call fluenced by the political character up the second 10% of its capital s by sure granted. are ' ??. ? has already been paid; in gold or dollars and an ' additional 8% in the local cur- I instalments! by ; In this manner -the ' has already received some $150 million representing the 2% •: was the Bank of ?'?•???~t ?. The first 2% tions purposes be guaranteed -'•» i shall make the would y.?? or Moreover the Bank are competent 6. In in opinion 3. A to the following member borrower compensation . circumstances,y be for the in otherwise to obtain the . ii M obligations to private own investors, In the making and implement¬ ing of loans the Bank is prohibited Bank shall, except in spe¬ condi¬ reasonable for the borrower. the encouragement of the development of productive fa¬ cilities the that market loan under conditions which in the war, and „ 1 tions productive peacetime needs to satisfied is prevailing unable ductive purposes, including the restoration of economies de¬ : Bank the of •••??????■■ ?.•??? ; * made of its ance.?~)??/.)??;? :? ?i:?rv-> ••■*?? ? purpose of specific projects of reconstruction or development. . the loan. suitable its risk. 7. Loans of "financial; -&ssistr i i i fof this type The Bank is principal per-? now one" is * of ; New. York where eligibility? legislation enacted at the was session of the Insurance legislature.; companies in. last?; ; ■ • vir¬ tually all of the states having an< important volume of insurance? . - Johnstown, Pa. - assets are now barred from in¬ vesting in the obligations of the I'Bank-.*Total assets of life, insur-»'.. Volume ailce Number 4550 164 companies to some $44 run billion. Trusts - t tions in most jurisdictions are acquire to of corporation bestowed by interna¬ tional agreement implemented by the domestic legislation of the ,\vrw . permitted - THE COMMERCIAL & FINANCIAL CHRONICLE i capital, fund created for the very purpose, should carry the Bank through tries, Western Europe, and a num¬ comfortably with no necessity to impair its own capital. capital subscriptions w.ith that of unless" specific restrictions are in- • * Much interest has Bank P":. c make loans may or and surplus—at the present time $7.7 billion. This dis- been V'vp;V\. only to the extent of 100% of its unimpaired subscribed ;fc corporated in the instruments es'% tablisning tne individual trusts. < reserves, automatically fixes the amount of its own obligations which the V;nity in " the probable size and' Bank may usefully issue. This also timing of issues of the Bank, their I played the financial by commu- . terms and ^ chinery These • occur, But let of deepening, world-wide will apply for registration SEC, tions for depression other or f able by- next May. Its consideration of loan applications is pro- behind greatly v They the NAC. They will issued in more than loan funds for actual not; be The bonds of the Bank will not | pressing for for will expenditures , timei^l some be United States bonds, nor will in considerable 1 funds its measure own drawn are This, of course, V a certain testing of the market. The Bank is in fact a ; mutual IV I believe v in ested •; On analysis of the obligations of the tate Bank. members. The creditor and debtor ligations of the Bank to the limit members, of other the principal method of tribute a annum on financing development. and obligations. obligations in ration laws of any may Since the "service further bonds call years, on obligations, will be over over many annual requirements are not great. It is unlikely that capi¬ capital not originally paid in, and it may require payment in the would be required in any one year nance and it is production subscribers for the 80% tal currencies needed to meet its obli¬ gations. The alone is Thus, it United States share whatever other current their payments or of gold and dollars, whole up operations than if or were in currecies other I believe that this , ; ,-t '• ,.T, '. !v ;V 1 .... depreciation. Its loans debentures must be denominated same currencies as Also;^^its local at the, equivalent United States dollars of that at to in have a instrument the Townsend, Crouter Membert New York and - • V V'V'm v ' \ : foreign stances of the of of J-;/ ■' -x «!' ^o /'• xj- & Bodine - :••' - • -r'';';:'• Exchang(e^'\-i{/^j<^^:f.^r':.^^fyt. .' V';- •; BUILDING; PHILADELPHIA 2 ■ YORK ' NEW YORK OFFICE Private Telephone 30 BROAD HAnover 3-7917 ' HAnover STREET 3-9440 SECURITIES W-t' ' ' —.•*•— J / - ' v' ' S h / 5 4 fl* N - ?' *' -J, .{•! . >> I ; \V ;• <„ ■ \ t «• V*f \[ *£''« 0 '* , ' \f A, v < t ' „ - * v p.. ip«^ 1 jS Jr'X /-V'VV- / . Sheridan, Bogan Co. MEMBERS ' h i / . , PHILADELPHIA WALNUT ST., >16 . ' . - , v • < £i . STOCK EXCHANGE PHILADELPHIA 3, PA. . ^ <•< '»• '/ * «'/£• *** ° v<' >lic Utility—Railroad—Industrial t SECURITIES New y and General Market Municipal Bonds Slevisioiv Securities ne Stocks 'X/V • • • Electronic Guaranteed and Leased NEWBURGER & HANO Members New York and Philadelphia Stock Exchanges Equipment Trust Obligations Barik and Insurance Stocks • v :4-v New York Curb - Exchange _ 61 CP varies A. Taggart & Co. ■ . Telety PU 677 Street, Philadelphia 2, Pa. Dime Building, Allcntown BROADWAY HAnover 2-5300 HARRIS BURG Investment Securities '30 Walnut KIngsley - PHILADELPHIA 7 NEW YORK 6 ■; • ' 5-1716 c . 1342 Walnut Street. 5,( '••T-;.. LEBANON ■ KIngsley 5-4500 ATLANTIC CITY the as of and financing and and at pro-f de^ •; t PHILADELPHIA —NEW emphasis reconstruction velopment. < v,-:. INVESTMENT re¬ promotion projects Philadelphia Stock Exchanges and New York Curb ; If these borrower. and present investment supplemental grams r . , the normal tion and possibly interest on par¬ -i for long-term detailed presentation of very its the International Bank on discussion this It is gress, to place principal ■; devoted a emer¬ policy, fully ratified by the Con¬ to pro¬ the financial picture of the Inter¬ DeHaven & surest which to build* transitional financing the Bank's Bank may expect the and to us peace. •, . to rehabilitation, construction. times there all PMPSSP&M v 1944', upon trade of world necessary relief, private I and the surest foundations and gency of the de¬ currency High home number of vehicles for the the International Bank. capital must be maintained by the at The United States has utilized proceeds of the sale of. tect holders of the obligations of ticular loan? due to local circum¬ \;)\ expansion income prosperity and LOcust 7-0770 •'•> to' the analysis dem¬ onstrates members are . should be ample security bentures.^ abroad be of currency in the of the position of the Bank correspondingly strengthened. ,.:: V would digress to point out that be sus¬ dollars. the Bank will not incur any risks out of the can zation, ' increased. be come levels foundations Moreover, with the of the International Monetary Fund and the prospec¬ tive International Trade Organi¬ currency a high levels of domestic and employment. By the rest of the world—the portion of its a of which is operations of almost three times the remain¬ me of analysis would of course be appreciably altered if the Bank were not in fact fully loaned States of facilitating the sound economic development of other areas, the levels of world production and in¬ large fraction of their reserves f This is needed by the Bank, to the extent Let a balance United future years of level exports and im¬ ports appropriate to the mainte¬ 3% than 5% could ever more be never the ing obligations. to mands quick half tcr almost 2 be required in one year. The de¬ on members would thus be demonstrated that dollar assets and claims against the Unite d States Government amounting than more tained certainly not likely that call of a additional $2.5 billion. an may the Bank would hold total of calls PACKARD 7 the can assured in of its sporadic suspensions of amortiza¬ most of the usual attributes of a the Bank's on spread international ; economic conditions United States further im¬ 'the analysis. only to meet Under .any even fairly legal entity with a is development continuous and steady flow of foregin loans. Only by the reestablishment of high levels of production and trade the world a as (United obligations and Treasury general '.The Bank, though not strictly speaking, a corporation since it is not incorporated Under the corpojurisdiction, is world-wide disturbance economic through assets i such liquid own of the pledge per • the outstanding princi¬ contractual charges on secured | by the general assets of the Bank t han by specific assets. con¬ the which may be used of the Bank, J rather borrowers fee' of 1 to 1V2% level, States >- , , the pal of their-loans to a sort of in¬ surance fund called, the Special Reserve which must be segregated may own On their' subscriptions. at the outset at least this will be Such securities will be general • the of obligations of its it is not believed that may be expected that the principal business of the Bank will be the direct lending of its own funds and funds raised by the sale of its & in a antee the direct | It , cert to nations alike stand behind the ob¬ reconstruction ? loans guar¬ Although the Bank | levels. two at one, band detailed more some assistance the of source all of its members together and subscribe im¬ portant sums of capital - to facili¬ would be inter¬ you The factor of time Bank's total obligations at a fully loaned up position. In addition it They will be very well se¬ holds claims against other govern¬ cured by the substantial assets of ments in the form of the loan the Bank, by the ' conservative portfolio, the 80% capital, and the provisions of the Articles of miscellaneous foreign currency Agreement, and by the compe¬ cash—all convertible in the terms tence erf the management, of the Agreement into dollars or down. will also provide they as long-term interests of the United proves States. will of the total have never failed to meet all contractual debt quite good even though not perfect. they be guaranteed by the United the other hand, the Bank certainly wish to maintain sizeable working balances, and i will therefore wish to replenish On *• maturity one , equipment. So the actual need of Bank probably be ranging from perhaps ten years to 20 or 25 years, and at least the longer maturities will be subject to amortization. >f ; due to delays in ob- taining delivery of materials and the be,'issued in the United only with the approval of may States of signature the we The number of years. If the a economic ■ with and protracted, the Bank f loan contracts than 85% pro¬ slump. great enough to meet the interest and amortization Cn dollar obliga¬ will apply for a listing of the bonds on the major exchages. • I believe that you will all agree me that the immediate and the United States make up more of the others are We very whose members service. And the records of many and | expenditure of loans lags observations about the rela¬ tion of all this to the foreign eco¬ nomic policy of the United States. Special Reserve and other dollar cash, segregated reserves, and un¬ paid capital subscriptions. ceeding, but no commitments have yet been entered into. The rate of other of few coun¬ cash funds of the Bank should be of the Bank's bonds with the ' Scandinavian many as as ;i( resources, and more will be avail- r Association would be particularly interested in such specific matters. I should like to conclude with a Dominions, ber outstand¬ obligations, Canada, the Kingdom, the other British we United are except the first World ing. If War national Bank and its obligation^,, since I have felt that you as mem¬ bers of the Investment Bankers number of nations a whose debt records the worst sort us assume conditions—a tracted Bank include than more obligations to private in¬ vestors—its loan portfolio plus its have at least twice assets by will States require the speeding up of the world's economic recovery will distribution. matters on which deci- Bank has already available important amount of dollar an that the Bank at all times ensures ma- the Bank have not yet been taken. As I have indicated, i, the ^ their for are sions v conditions, and the Now the foreign members of the the guarantees The Bank International the not loan portfolio adequately meet the requirements of servicing the Bank's ^debentures. Even if they occur on a reasonably large scale, the; Special Reserve or insurance members. obliga- the do 3071 - THE COMMERCIAL & FINANCIAL CHRONICLE In Attendance at IBA Meeting (Continued from page 3049) (Continued from page 3046) Brent, W. Rufus Brigham, Ruth Broome, Robert E. Brophy, Frank J. Brown, Austin A. *Brown, J. Fred Brownlee, J. A. Brownell, John R., Jr. Bryce, T. Jerrold • : Buckner, Errol E. *Burge, John D. ♦Buttenwieser, B. J.> *Caffrey, James J. , Eastman, Dillon & Co. International News Service Guaranty Trust Company R. S. Dickson & Co. A,, • Dean Witter & Co. '■# Boettcher & Co. , ' N. Clark Street Grant-Brownell & Co. Clark, Dodge & Co. National Bank of Commerce Ball, Burge & Kraus Kuhn, Loeb & Co. Securities & Exchange . Commission -: Callaway, David H., Jr. First of Michigan Corp. Investment Bankers Assn, "Wall Street Journal" J. J. B. Hilliard & Son "• *\ and Mrs. * Denotes Mr. I H. s New York Washington New York Louisville •/" .• must Scharff LJones ■ believe it must recognize that the ciates its stake the in bond pro¬ been looking pay income is off a savings bonds to indi¬ more trusts and estates, and particularly E Bonds to average viduals, in I war. branches is spread among luncheon viduals and the people, more it goes to indi¬ directly into the consumers. The con¬ has been the forgotten man pockets of we could say as The Federal Reserve Banks and income earners. That way the debt of the interest on wish much for the smaller firms. with of have been and dinner industrial leaders cities holding meetings in scores and these, we know getting results.. #V; •' are The recent behavior of the market hasn't helped any. John Citizen takes a wins it's flier in stocks because and he's if he smart a cookie. If he loses, it's "those fel¬ lows in Wall Street" who have robbed him. tinguish ment And he between counselors doesn't dis¬ invest¬ sound bankers or and the unified financiers who involve the world in for their own profit—a > of smug and sleek financial wars gang racketeers who contribute nothing to the nation. The aftermath of is 1929 with still when, will us. "Wall When, Street" story to the public? The enemies oh tell its •' ; ■ of private enter¬ prise and banking capitalism are an investment man,v myself—19 working night and day to under-'# vestment bankers and all indus¬ years in Wall Street. mine our system. Yet our me if I am brutally realistic. I am system has worked out pretty well com¬ pared to other systems. I am re¬ minded of a story brought back* from Russia by someone in Wash-!;';'; ington recently. You recall "The Grapes of Wrath," a best-seller' about migratory workers in Cali¬ fornia some years back. Thei Rus¬ sian government spread a cheap #:?:*? WHITNEY BUILDING l. d. 25 NEW ORLEANS 12 magnolia 1271 UNDERWRITERS — DEALERS — BROKERS JACKSON, MISS. Municipal and v translation Corporate Securities of that book widely{ the people, to show them among how the American capitalistic sys-. tern produced poverty. They got MAS°n,*Ha6An unexpected reaction, an . WEIL & ARNOLD * INVESTMENTS M family in that story migrated from # the dust bowl to LA. California in antique wreck of art?# automobile. | an The Russian workers and peasants ! ;; said to each other: "This America 1 Bell Teletype—NO 175. must be a great place; even f, peasant family has a truly the poorest motor car." DISTRIBUTORS We Distributors Underwriters boom-\ a erang. You'll recall that the Joad i'Mx CANAL BUILDING NEW ORLEANS 12, Exchange Raymond 0711 & LD 145 AND ■ listening more talked; meeting all high, effectively. teletype UNDERWRITERS . and debt is gram. Today 88% of the firms em¬ than I have especially ploying 1,000 persons or more are kinds of Americans. I can tell you # operating the Payroll Savings that there is no business or profes¬ during a period of inflation. sion that needs a good public reMeanwhile, we have to manage Plan, and 75% of those employing more than 100 persons are carry¬ lations job as badly as the invest-' the debt. The ideal way to meet maturities on short-term debt is to ing it on in peacetime as they did ment and brokerage business does. to time only when depression. The Savings Bond Now why should you bother to program is trying to build up his do this? strength now by persuading him You have an opportunity to do to put some of his buying power an outstanding public .relations into savings. That isn't charity— job for yourselves through the un¬ it's the reverse of it—self-help. selfish selling of Savings Bonds to I have said that this program customers. I hope you will pardon no. 180 & 181 Richmond Stock Banking Needs Good Public Relations E Bonds fast come support of the commercial and savings bankers of the nation. If we could get in¬ Members Investment which Congress has — management solidly, we'd sell those last SECURITIES SHREVEPORT, LA. business as We are not selling enough bonds bucket shop operators. A Gallup lately, but the time is not far off to the small business man, the poll along this line would be when he'll be the indispensable professional man and woman, the heartbreaking to a decent invest-, man again and all of us Will be self-employed, the retired and ment banker. The uninformed worrying about how to keep him those living off income from in¬ citizen thinks of "that Wall Street!# consuming. Blood transfusions for vestments. That is where you crowd" as a group of international him proved pretty costly in the could help most MUNICIPAL and CORPORATE incorporated and behind it enough. I have out of traveled taxes, 40,000 miles It is a gratifying fact that the through almost every State in the' levies. I am not in Union this politics and I cannot predict what bigger the industry or business is, year, to address some the new Congress will do, but I the better its management appre¬ 30 bankers' conventions. ; I have after sumer (Continued on page 3073) „ trial - of the debt, for that money here¬ sell New York Caldwell Phillips Co. Marion NewYork New York Denver Chicago Dayton New York New Orleans Cleveland New York St. Paul *Caldwell? G. James Cardwell, New York New York New York Philadelphia - ♦Cahn, William M., Jr. Henry Herrman & Co. Calvert, Gordon L. # Carberry, Patrick Thursday, December 12, 1946 have millions had Joads, our relief on and we our may;* have them nvestment Securities again, but private en-! terprise, with all its shortcomings, f Corporate and Municipal has produced standard of Securities 1108 E. MAIN Telephone 2-2841 NEW ORLEANS 12, LA. TELEPHONE * - , - highest] of any country on earth. There is a powerful case | ' TELETYPE " ## . ?, ;;j > for;;5 private enterprise and it ought top be presented. After another major # depression it may be too late. In-J vestment men are shining targets for the slings and arrows that are# hurled at capitalism. By your deeds, more than by words, you can prove your value to society. ' Nusloch, Baudean & Smith MAgnolia 4701 the man ST., RICHMOND 10, VA. Teletype—RH 460 here living for the average #! NO 188 This Savings Bonds program of¬ fers you selfish bread UNDERWRITERS Virginia - - North Carolina * South Carolina Municipal Bonds and Corporation Securities cast the investment banker and broker and But Firm Bids — Firm Offerings UNLISTED — CORPORATE well-wishers, Quotations and yes, of scores, potential hundreds, are doing it by selling savings bonds to their customers. Dangers of Bank-Held Public Debt, ISSUES ALL LOCAL SECURITIES a an opportunity; it is also # responsibility. I hope you read the recent report of the Commit¬ tee for Economic Corporate Dept. Teletype LY 83 v your¬ cial banks LYNCHBURG, VIRGINIA Teletype LY 82 but every thousands of people. The commer¬ This is Scott, Horner & Mason, Inc, nobody if member of; this profession started helping* ; people to accumulate savings, as a public service, you'd make friends,;;; COUNTY" DISTRICTS MUNICIPAL convince selves. Florida Bonds customers Municipal Dept. for un¬ will truly bethe waters. You that upon might spend millions of dollars in advertising the homely virtues of West Virginia' \ - opportunity an service concluded: Clyde C. Pierce Corporation Long Distance 47; 5-3680 Bell Teletype JK 181 "If Development. It there pleasant and certain serious inflation found them. . . . are simple, ways to avoid we But if have we not wish to . live in JACKSONVILLE 1, FLORIDA Richmond, Va, Roanoke, Va, Norfolk, Va Branch Office ----- ST. PETERSBURG must free r a dynamic, free society, we accept the responsibilities of citizens. This is one of the great post-war tests of the ability tof a free society to keep its house iVolume 164 in order; ness men The cannot afford fail¬ Not many people know about it, not enough at any rate. a council of busi¬ we ure," That (THE COMMERCIAL & FINANCIAL CHRONICLE Number 4550 was talking. I have heard investment men public say: "We should be paid for sell¬ makes it imperative that ing Savings Bonds." They have possible American have a not thought the matter through. magnitude debt every stake in its of our work¬ Of the 6 million volunteer management proper through owning part of it. The debt will be a burden in hard Finance War in ers thousand only few a investment were men. times. Demagogues will propose Among the million we have today scaling it down or repudiating it. only a few hundred from your in¬ iWe'll have a conservative Con¬ vestment profession are active'r.To gress for a while, but no assurance pay one group would mean we that the conservatives can stay in would have to pay all, adding to cost of carrying the debt power if we repeat the history of the 2929 and the early 30's. If we which is now $5 billions a year. I should go into a depression with a doubt if the Government will ever quarter of pay trillion dollars public a banks, the wealthy ^vell-to-do—watch out! Now what can Bond Committee An IBA Savings We solicit your cooperation and do to help you world that is and to Spread the debt? assist you, I tomorrow, we on the responsibilities leadership today—and challenge to every man a in woman this It room. ing this country's leadership of the world nor without surrendering your leadership of this country. It is up to -people like you to guide the ship wisely. You are on the bridge; yours is the responsibility. If you fail, the Crew will take over and the will be good ship Free Enterprise the rocks. It can only go on saved by people - who know howv;C::<;A:^ When apparently like like a you irresistible us in 1941, Ameri¬ faced what looked hopeless job. You did it. We beat the unbeatable Axis. You can have suggested to do as well in peace once you real¬ Charles S. Garland, President, In¬ ize that it is your responsibility. I Investment bankers, brokers vestment Bankers Association' of and security dealers have a mil¬ America, the creation of a na¬ bring you this challenge and this lion customers who could easily tional "IBA Savings Bonds Com¬ opportunity to help keep this buy $1,000 or more in Series E mittee* and the appointment in country solvent, sane and strongBonds each year-and another esti¬ each State of a chairman who will fit to lead the world. mated 5,000,000 who could buy at see that the Committee's program least a $100 E Bond each year—all Thank you. is carried out. of this without seriously affecting May I suggest to you a national your daily business. This would give In Attendance at IBA Meeting (Continued from can¬ not be evaded without surrender¬ cans the and of take forces attacked Bonds to individuals. debt concentrated in the hands of the for the direct sale of Savings the world of vive in must 3073 John 3072) page Nuveen & Co. Carpenter, Fred B. Carson, James H. "'Carter, DeWitt Carter, Hugh D. Cartwright, Todd ♦Casey, Douglas *Cassell, Clair F. Cattier, Jean Chapman, Dwight W. Chapman, R. C. Chap.pell, William B. First Boston Chester, John F. Associated Childress, Francis B. ♦Chisholm, Frank A. *Clapp, John J., Jr. Clark, George E. Clark, Robert E. * Clark, Robert W., Jr. Clark Sydney P. ♦Clarke, Hagood Clarke, John W. Clarke, Richard Wjb\ Coggeshall, George K. Childress & Co. Chicago Salomon Bros. & Hutzler New York Nashville Securities Co. Nashville Courts & Co. Atlanta v ; . Columbus Sweney, Cartwright & Co. C. Allyn & Co. ■ ; A. C. F. Cassell & Co. ; Chicago . Charlottesville White, Weld & Co. New York American Trust Company San Francisco Otis & Co. Cleveland New York Corporation New York Press Jacksonville Varnedoe, Chisholm & Co. Savannah R. W. Pressprich & Co. New York Adamex New York Securities Corp. Calvin Bullock New York Investment Bankers Assn. E. W. Clark & Co. Washington Philadelphia Johnson, Lane, Space & Co. Atlanta John W. Chicago - Clarke, Inc. Richard W. Clarke Corp. New York Schoellkopf, Hutton & Pomeroy New York ♦Denotes Mr. and Mrs. (Continued on page 3074) total of 1V2 billion addi¬ slogan "Every Customer a Holder of U. S. Savings Bonds." a year and us a tional E Bond sales in million many ers in I E Bond hold¬ more few years. a VIRGINIA-WEST VIRGINIA that the partners of suggest firms take the personal responsi¬ Every solvent American should bility of seeing that the sales force <bwn E Bonds. The man with a is not only informed but actually large current income should also working on this program. I also buy Series F Bonds and the per¬ suggest that in all market letters ads you run a and 50 years of age or older should son such have part of his funds in Series G Bonds. I want to call your atten¬ as NORTH and SOUTH CAROLINA MUNICIPAL BONDS drop-in line, "Buy and Hold U. S. Sav¬ ings! Bonds," or "We Sell U. S. point: Savings Bonds as a Public Serv¬ "Bonds of Series G may be re¬ ice." Above all, I ask you to co¬ deemed at par, in whole or in part, operate with your IBA Sayings <1); upon the death of the owner, Bonds Committee w h e n it is or a co-owner, if a natural per¬ created. tion to powerful a son, or (2) as trustee or other selling to bonds held by a fiduciary, with STATE richly endowed This nation, so upon CRAIGIE & CO DEALERS the death of any person which re¬ ful people, has won the leadership in the termination of the of the world. Never before has our 1 Telephone 3-9137 IN MUNICIPAL and 616 East Main Street and with resource¬ resources * BONDS - RICHMOND 15, VIRGINIA Bell Teletype BH 83 • ft 84 sults trust." leadership been so important. own This meet provides system of free enterprise our death. under free institutions is to created at expenses to If cash ready > i sur¬ •U,' ' " ,-. BUSINESS ESTABLISHED 1924 ' Vr " e - ' ' MUNICIPAL and CORPORATE SECURITIES SOUTHERN SECURITIES TEXTILE PROPERTIES and P,|r ' ^ , « , *7 *»; /- , " ** 'o. - „ . 1 ( ^ » *, '' 'V ev'C \ ' **\\ '' , I <•* •* i ' 't V '' '' ,, " *L". ' I* ' ' 1 » - ' <l ' , / ' rs V' 'S' -v LEEDY, WHEELER 6- CO. V i', ' , FLORIDA BANK BUILDING . ORLANDO, FLORIDA A. M. LAW & COMPANY (Established BELL TELETYPE-OR 10 . •• , - ; . LONG DISTANCE 27 - 1892) SPARTANBURG, S. C. 1 f - i&i ^\j? > v\ v'»: ?« ; -vj' v >' :a'A V7 v'' •£' -i" Vr' ' * Long Distance 51 . </* £'s?,7 •/; • Bell Teletype SPBG 17 UNDERWRITERS 1 XJ , /' V 'k - ' / ' * ' '■*/ V \ r 'S «» * , ?- 1 ^ '* ' 1 >/ '" , ^ r/' •J1'*'^ ^V ' • ' v K\ " ' Securities 11 " ''V /v'-V' •'»'*/ Georgia South Carolina i DEALERS DISTRIBUTORS uf- ^':r Corporate and Municipal 52 YEARS IN THE SOUTH * 1 j A' ' xa \i t' , 5(/\ v ^ * i Tennessee, North Carolina, ; : . ;; ;; . ; , ' 3 Established I9I9 Alabama, Louisiana & Florida STATE AND MUNICIPAL BONDS CORPORATE BONDS AND LOCAL STOCKS I v R. S. DICKSON & COMPANY INCORPORATED wmmmmmmmmmmmmmmmmmmmmmmmr:? .:,v The Robins ^nHHpiipnaaaMaa onJluinphreij Company established RHODES HAVERTY BLDG. WAlnut 0316 NEW YORK | RALEIGH 1894 ATLANTA lonc CHARLOTTE CHICAGO RICHMOND COLUMBIA 1, GEORGIA distance 108 Wire DirectBetween > Charlotte, New York and Chicago Offices In Attendance at IBA | *Collado, Emilio G Collier, W. T. K. Collins, Julien H. Colyer, Charles M. Connelyy Emmet F Conway, James P. Collier, Norris & Quinlan Julien Collins & Co. ^ Central National Bank First of Michigan Corp. • . Washington the first full postwar year, . \ • ' Montreal Chicago ? Cleveland Detroit * v of ;v',v' Washington Spencer Trask & Co. Ingen & Co. Lazard Freres & Co. Grouping of New Corporate Issues in the United New - : > Washington International Bank' ;:L Bonds . and Stocks Notes—.. $194,212 .. — . : 1 and \ ' • ' it I - '*}:>: 1 " ■ :-7.7: $903,792 -32.6 6.3 i 291,674 10.5 ■- 14.0 29.4: V ;230,670 S'rVffti-} v <•. Total $1,647,514 82.7 and Notes.™ $6,900 0.3 > -9,856]: ;] corp. securities— of total-,,.*—..'.. -' $758,890 376,689 . 27.4>" $1,344,114 8.4 it $989,560 0.5 41.8% i 0.8 100 $1,994,330 u To illustrate the 35.8" , $2,637,074 55.5 $9,232 0.3 $16,132 0.1 12,126 $11,502 0^ $28,258 100 : 1936 1937 1938 Phone.—6-6101 and LD 114 ... 1939 1940 — 1941 Correspondent, .... 1942 Phone Whitehall 4-1877 1943 ... 1944 ... 1945 ... ■ ,v ' ' ■' ;v /■ w&H niimmin eiatu | ifuiiitfg'ij of « ' 100% omitted) $1,192,000 1,225,000 873,000 383,000 736,000 1,062,000 624,000 374,000 646,000 5,746,000 1,255,000 New Amount Capital (000 % of (000 % Total omitted) new cap. omitted) Total 26% 30 352,000 $3,387,000 5 1,209,000 33 408.000 50% 1,267,000 8 67,000 41% 1,733,000 2,026,000 1,557,000 419,000 685,000 26 18 97,000 135,000 27% 16 173,000 41% 19 118,000 60% 25 2,466,000 35 21% 4,491,000, 52 92,000 224,000 654,000 18% 35% 22% Municipal Bonds Bonds of Federal Bell Teletype—SL 186 : - Private Western; Union Telemeter irrmfg t be The Committee dereliction its oil feels statement speaks part. that for itself. the. None-, theless, it desires to point out one extremely", significant feature,namely, that of the total amount of new funds provided through all corporate issues during this pe¬ riod, $1,647,514,000 or 82.7%, was purveyed to industrial companies; and in this the; * commendably: & conservative proportion of $1,062,290,000 in equity securities and $585,224,000 through the me-: dium of Indebtedness. ! ■ ; of patent to and As this any f indicated was report thinking far vaster even and is as this person, sums of ;j new capital must be furnished to sat¬ isfy the present voracious mone-. tary appetites of so many corpora- ■ tions, especially those in the in¬ dustrial field, stimulated by their transition to peacetime economy.The statements of the so; of purpose many;^pf our recent industrial^; security issues have been so rela¬ tively similar in their tenor that | the following excerpt from the prospectus describing last week's issue, of $100,000,000 of General Motors ? Corporation f preferred aptly epitomizes industry's: postwar capital: "The proceeds (of this is¬ be added to the Cor-j poration's general funds and will be used from time to time for; . net will sue) corporate purposes as the man¬ agement determines. To meet an-i ticipated postwar demands fqr its; products, the Corporation has un-i der way a program for modernization and expansion of its exist*-f| Service to New York Correspondent c in earlier some its part might well on warranted. be financing, postwar elucidation need for new, Long Distance—160 rf> tion stock Agencies Enterprise Telephone to Chicago ^ statement might a well mittee considers that, in view of. the; importance of the entire ques-" , Arkansas BOND DEPARTMENT ing facilities, construction1 of new arid ^ additions to working? Municipals * units program is revision to con-; capital;; The present constant under Bond Department -COMMERCE MERCANTILE Trust Bank, and Union Planters i NEW LONG DISTANCE 218 YORK conditions, but changing presently, estimated may ap-! proximate $590,000,000 for plantfacilities and equipment in the! U. S. of which $290,000,000 was — expended through September 1946.| If additional funds are required ^ghtk- Memphis 1, Tennessee iiflltl to as Compaxry MISSOURI ST. LOUIS 1 form National Bank & Trust Co. 'Kv between equity securities as showing do¬ ficiently enlightening via Stocks For New Capital Refunding $4,579,000 2,434.000 2,140,000 2,116,000 2,762,000 2,619,000 1,042,000 1,059,000 3,112,000 Arkansas St. Francis Levee 0.6 100 United States Government Securities WMmm j; Mississippi—Tennessee pur¬ ing figures might of itself be suf¬ to the aud¬ itors of this report, but your Com¬ State and y*'j and the past decade, we append the follow¬ (000 FIRM BIDS AND OFFERINGS ■ type The mere citing of the forego-; (000 omitted) - "Year, NASHVILLE 3, TENNESSEE the corporate issues dur¬ enormity of the above figures in comparison For — - 0.3 New Capital Total New York 0.3 . t. $4,763,953 . ." 70 Pine Street ; r 28.2 DOMESTIC CORPORATE ISSUES Manager JBond Department—PAUL O. FREDERICK, V.-P. Teletype—NV 93 30.9 ;2v 27.3 ing statement from a recent Federal Reserve Bulletin mestic corporate issues from 1936 through 1945: Bell 7.9 1,292,960 • ; 2,270 $2,769,623 58.2% v; with similar requirements in Commerce Union Bank of new indebtedness, that its failure 23.0 - . ; $16,756 Bought «—- So/df—■Quoted $1,098,004 43.12 $1,474,693 ;2 $1,195,466 53.3 : Stocks ■% 13.0 $623,928 ; ■ $585,224 s Specializing in Southern Obligations 20.7 $573,095 ; .1 1,062,290 Notes! — ' r and Holdings, etc.— Bonds Municipal Bonds '-W.St 85,015 v :V $279,227 - ' $623,928 ■ Investment Trust Ji* 2.5; $50,833 ' Utilities— with' current year, both by major groupings of industries and delin¬ eated Bonds . of pose to include such Stocks l',:i ' % Total $573,095 Industrials— ; Genera! Market Total ' ' tr, " > i % Total • ;v Bonds ■;■-: ■' Mrs. ■ this report crowd statistics, but it believes that the figures cited furnish such a clear Stocks Chicago H. M. Byllesby & Co. Committee has endeavor¬ to not ing the first nine months of the Refunding— (000 omitted) ' Capital ..% Ttotal - Your ed statement "Character of New York ; Miami v ^ New York 1 B. J. Van •v . States for the nine months ended Sept. 30, 1946. ■ ' *' - 3050) together with figures showing the amount refunding during this period: (Continued on page 3075) '/*" page capital raised during the first nine months of this, new ' Cook, Harold H. Cook, Robert H, Cooper, Walter W. Corbett, John • * Corns, O. G. Mr. and of Natl. Assn. Securities Dealers ■"Denotes • (Continued from ' i . . amount World Bank Heavy Industrial Financing 1 . , Executive Director j , Foresees Meeting (Continued from page 3073) Thursday, December 12, 1946 FINANCIAL CHRONICLE THE COMMERCIAL CORRESPONDENT for 14 WALL STREET this or; other Corporation may purposes, provide them out from the sale of of cash resources, additional securities rowings." Just one firm this or from bor¬ 2 i r excerpt to con¬ more any confirma-i This one from? statement filed; SEC for a contemplated point—if tion be necessary. Underwriters SPECIALIZING IN the TENN ARK Distributors firm MISS. Offerings DISTRIBUTORS UNDERWRITERS registration with the issue of Electric ferred stock: "The Dealers stock i !" r, to I which this pros-; pectus relates is a part of a nancing plan to provide for Quotations MUNICIPAL of Westing-; .Corporation > pre-j $50,000,000 house Ji-j the; Corporation's plant expansion and;; BONDS rearrangement program and fori working capital require-; ments to meet the peacetime pro-' duction loads which the Corpora-; increased United States Government Securities • General Market Municipals Newhard, Cook & Co. —}.»,;;!:c. .V'.iV.jv -v-i" ,:"'y New York Stock V ' Exchange ">' St. Louis Stock Exchange Bell Teletype—SL 152 MEMPHIS 1, TENNESSEE TELEPHONES 5-3637 • 5-3638 • LO-3II • LD-312 TELETYPES ; ST. LOUIS 2, MO. FOURTH &. OLIVE STREETS MEMPHIS — New York Curb Exchange (Associate) " Chicago Stock Exchange OF ♦" V 4 ''•** ^ —Members— L. D. St. Louis 340, 341 & 342 tion anticipates/ The accumulated demand for many of the Corpora-] products resulting from the general interruption of commer-i cial production during the war,, the natural growth of the Corpo-?; ration's business due to the in-] creased use of electric - energy tion's throughout the country and foreign markets, and many Correspondent ME-283 • ME-2S4 and Private Wire System Clark, Dodge & Co., 61 Wall St., New York 5, N. Y. addition to production from the the prewar which is in. the volume of,, anticipated development of new , Volume 164 Number 4550 THE COMMERCIAL A FINANCIAL CHRONICLE products and the addition of new items to established lines, all fore¬ shadow sales much a in the time in the than at any Corporation's history, except during > higher level of future the War. By the laws of most states, savings general terms such revision of the banks in no degree and life in¬ tax and investment laws as it con¬ surance Companies to only a rela¬ ceives may furnish possible pan¬ tively minor degree, are permitted aceas for the situation alluded to to invest in common stock; and in above. We do so only because of less restricted but likewise to no our appreciation of their signif¬ great extent, life insurance com¬ icant bearing on capital available "Accordingly, at the end of the war* the Cctfporatioiv-in com¬ panies mon with many other companies, may purchase preferred shares. i For i industry to finance only with the re¬ any too sizable part of its hew conversion of its plants from War capital requirements through bor¬ production to peacetime opera¬ rowing would be to sacrifice pru¬ dence and could very well, as we tion but also with a program of expansion and rearrangement of know from experience,- lead to was faced its rtot manufacturing handle the indicated production and competitive gram was volves facilities to to increase in maintain position. Such its pro¬ begun in 1945, and in¬ the construction and ac¬ quisition of additions to plants, the purchase of additional equip¬ ment, and the integration and re¬ arrangement of the expanded fa¬ cilities for efficient operations, at 0 total estimated expenditure of approximately $132,000,000, of approximately $95,000,000 which represents the cost of new facil¬ ities and equipment, and the bal¬ ance represents arrangements the cost and pense." 7 of re¬ related ex¬ *7 serious or even ished financial embarrassment disaster in times of dimin¬ business activity. A very part of these capital requirements must therefore be substantial met through equity financing. Even though your Committee does not far so transgress the bounds of modesty as to feel that it can in this report furnish the solution to this vexing problem of deter¬ mining the Soiifces proper for such and available for investment.;>y;,vv :.,/777'. .V;<;7; 7 With regard to the tax laws as they affect the ability of individ¬ uals—or in fact corporations or aiiy other entities—to build up savings for the very necessary (Continued from Coughlin, Edward B. Courts, M. C. Courts, R. W. *C0xom Thomas T. t Craft, Robert H., 71 *Crago, John H. ■■ ♦Craigie, Walter W, Cromwell, W. Rex 7 Cross, Louis J. function of providing funds—be it Cross, Milton C. in the form of equity or indebted¬ Crouse, Charles B. ness—for the expansion of indus¬ *Crowell, Warren H. *Crozer, Samuel A. try, • we believe* that removal of "Cruttenden, W. W. any tax on capital gains would Cunningham, S. K. prove economically sound and Currey, Brownlee O. timely when viewed from all Curry, A. G. Cutler, Harold B. angles. If capital gains were not Dalenz, John McG. subject to tax, greater amounts of Davids, Mark funds would remain in the hands Davis, Arthur. G. 7 { /7 •7 of citizenry and would be avail¬ *Davis,' DeWitt equity cap¬ able for capital requirements of ital, nonetheless it deems it time¬ industry. This would be highly new ST. . of with compares a 1041. through - . vast We S! St. 7 ventories 7:7/ &6& our sizable drain oil capital. new & Angeles Los Co. Investment Bankers Assn. . Angeles Chicago 7 v Chicago Welsh, Davis & Co. is MARKETS Market a we ESTABLISHED , Lotlls Stock can find it" 1871 v . .'.•7'.77-7- A; MEMBERS York Stock Exchange Exchange Chicago Stock Exchange New York Curb Exchange, Associate ■;7.,:v'l/;- Saint Louis 2, Mo. .if:7 7^7^^7^;-7 : * ;* Bell Teletype SL 593 > Louis, New York between St. and Providence other ;related reservoir of Lester Los .Direct Private Wire Service • • • lteiiiliol<k& Gardner Netv York St. Louis 2, Mo. 400 Locust Street :• 5, N. Y. G. H. WALKER & CO. 14 "Wall Street ' Telephone K^ekman 3-5880 Telephone Central 6640 Bell —MEMBERS — Bell Teletype-^-NY 1-2748 Tfeletype—SL 174 New Long Distance 395, 396 A 310 the another sents New York 0kiS/t STRfefeT,.:- Merrtbets St Louis Stock Exchange basis, super¬ higher price level of the individual components of that inventory, necessitates larger working capital. While this may not loom large in individual instances, except in the case of our major corporations, nonether less in the aggregate this repre¬ Calvin Bullock Josephthal & Co., New York, and James E. Bennett & Co., Chicago some unit a upon New York St.SLouis l.Mo, This increase in in¬ on imposed Equitable Securities Corp. A. E. An^es & Co. Security-First National Bank Nashville 1 W£Sf MENY SECURITI fields, all too often necessitates the carrying of an inventory far larger, than was customary in the era. Chicago Pittsburgh V.'; Direct Private Wire Connections with the slowing up of the completion of the finished products manu¬ factured by so many of our cor¬ porations, due to the difficulty of promptly and steadily obtaining supplies and parts or due to labor prewar Cruttenden & Co. S. K. Cunningham & Co. Specialize In Orders For Banks .And Dealers Central 7600 It is also Worthy of mention that in Los Angeles Philadelphia ' Co. 300 North Foiirtfc St. of capital required transition to peacetime unsettlement New York Crowell, Weeden & Co. Stroud & Chicago Board of Trade • also to give indication of its complexity. Detroit Richmond EDWARD D. JONES & CO. 1945, "economy, but Chicago Harriman Ripley & Co. Crouse & Co. St. Louis And InVitefc Yottf Inquiries re- amount this Paul H. Davis & Co. New purpose of these three ex¬ cerpts, and especially citing them with the preciSeness that we did, Was to illustrate not merely the for Dallas New York New York Trading Department Is Active In All , peak of $8,200,000,000 in 1941 yearly range of from $4,500,000,000 to $6,700,000,000 in the 1939 Atlanta "If there a from Courts & Co. Hallgarten & Co* Guaranty Trust Company Smith, Moore & Co. F. W. Craigie & Co.' Dallas Rupe & Son 7:':77777; 777:777'777->!'-• $11,700,000,000 for the full which Atlanta Local Listed And Unlisted Securities estimated to- an Denver Courts & Co. LOUIS Our _ Of 1946 with CoUghlin & Co. (Continued oh page 3076) final indication of the vast a Meeting 3074) page Mr. and Mrs. ♦Denotes ly .and proper to present it for the advantageous to industry.. Gov¬ consideration of industry, bank¬ ernment, too, would be advan¬ ing hhd the entire Country.' y; taged because instead of obtaining Despite this self imposed caveat, a mere one time tax on capital amount of capital' required far and despite our not meaning to gain, it would receive ah aimual 'expenditures 6uch: as those 7 en¬ make any incursion into the tax dri the income derived from visaged above, we might point realm of your Legislative or Tax¬ the. investment of the entire cap¬ out that, according to the SEC, ation Committees, if incursion it ital gain instead of the lesser in¬ .Capital expenditures on new plant and equipment by all segments of be, your committee is not so pusil¬ come; and consequent diminished business, excluding agriculture, lanimous as not to outline in very (ContihUed on page 3076) $5,000,000,000 in the first As "• In Attendance at IBA York Louis Stock Exchange St. New Investment Secu rities — Stock Exchange Chicago Stock Exchange Commodity Exchange, Inc. i York Curb Exchange (Associate) NEW YORK ST. LOUIS PROVIDENCE 1 Wall St. 503 Locust St. Hospital Tr. Bldg. Members * New York Stock Exchange Chicago Stock Exchange St. Louis Stock Exchange New York Curb (Assoc.) Chicago Board of Trade ■ This reiteration of the need for « capital inevitably leads to new of consideration such feels the sources a of capital. Your Committee new that it be may said with .justifiable pride by the invest¬ ment banking industry that it has functioned well during the war years and bids role with equal :the fair to play its efficiency during difficult conversion present 7'y-v..*77. PRIMARY Industrial MARKETS IN serious problems which age must intelligence and be cour¬ Of '.■ or ■ Railroad /. ".v.,;» OF government at least the alter ego THE ' Bank—PublicUtility if the free enterprise system, ownership Public Utility - BANK & INSURANCE STOCKS ^contrasted; with ;as — and Municipal Bonds to point 'put faced with DISTRIBUTORS DEALERS Members St. Louis Stock Exchange "7' only prudent, however, that there are very It is era. UNDERWRITERS WHITE & COMPANY NATION and Corporation Stocks such ownership through dom'ihant financial control, is to sur¬ vive. / . , ALL MIDWESTERN and LOCAL ISSUES , f I institutional and Real Estate Bonds * Foremost r among lems appears to be these ; prob¬ the question of whence this vast amount of capital •.' will realizes emanate that the when new one MISSISSIPPI VALLEY TRUST BLDG. preponderant ;• portion Of the savings of the try are stored ernment bonds Up. either or CENTRAL 0282 SAINT LOUIS 1, MO. TELETYPE SL Metropolitan' St. Louis Co* 11© Locust Street 477 coun¬ in gov¬ in life insurance - Private wires to: Chicago, Kansas City, Los Angeles and New York BELL TELETYPE ' companies : or in savings banks. Saint Louis l, — SL 499 Mo. LONG DISTANCE 207 A 208 THE 3076 1 Day, William L. Decker, O. Paul de La *Dewar, Hal H. Dickson, Rush S. R. Dieckman, E. F. *Dillman, David Glore, Forgan & Co. Journal of Commerce *Dixon, Joseph W. / Graham, Parsons Peoples National *DoolittIe, Roy W. Doolittle, Dorbritz, Ernest O. Moore, DuBosque, Clayton jDulaff, David; ^Denotes Chicago. Chicago St. Louis New York New York Calvin Bullock Wertheim & Co. F. Eberstadt & Co. Commercial & Financial DuBois, Allen C. 1 New York O'Connor & Co. Washington St. W. 69 Charlottesville Buffalo Schoellkopf & Co. Pittsburgh Leonard & Lynch Doyle, (Continued on 3077) STATE and Banking DISTRIBUTORS - DEALERS » UNITED GOVERNMENT STATES - MUNICIPAL SECURITIES INDUSTRIAL, PUBLIC UTILITY, RAILROAD and INSURANCE SECURITIES Sti REAL ESTATE, BANK BONDS & STOCKS LISTED and UNLISTED Stifel, Nicolaus & Company INCORPORATED ST. LOUIS CHICAGO • of life insurance com¬ we repeat and about the importance do Specially focus attention on !1<! mpa^ir.I MEMBERS 0>3 ESTABLISHED 1924 ■ '';ftftft:.; ft'';ftft;.'ft ft'.;\\ '-.'ft--''- " 'i '• ft'ft-ft ftfe ■■ ft 'ft-ft '- ■ Underwriters—Distributors Dealers ■M .ft; i 316 N. 8th STREET, building $48,000,000 recent article in month. A fective date of a registration "Investment statement. Circulation lof the so- per the parties concerned, not the least of these being the issuing corpora¬ tions and the investing public. & CO. L M. SIMON Business Established MID-WESTERN and The overture 1874 DISTRIBUTORS SOUTHERN 1 ft-C J Stock Exchange St. Louis Stoclc Exchange 315 North Fourth Telephone—Central 3350 Street • St. Louis 2 limbo of it Pre 5 cpttWri nht. SniderC a. Members Chicago Stock Exchange tftftftftft INVESTMENT BANKERS Established Co. *' is charged with ; required this depart¬ ure from custom. And it did so, fortified, too, by the memorable lines of Cowper: "Sweet too PREFERRED STOCKS is the sweet to t' . ;... .,,5;'.:.-' Long Distance 93 k- ' * . r* ••• . • •'* Omaha, Neb. . • ■ ;♦ • •' * * •' • - ; .j •. •„ Chicago, 111. — ' 7 1 • • 1/ - Topeka, Kans. •* - yj ■:v' ft i- Specializing in Unlisted Securities ' 916 BALTIMORE AVE., KANSAS Teletype—KC 262 CITY 6, MO. Telephone VICTOR 3143 harp of prophesy; wrong'd by a mere be mortal touch" „ . - Committee: J. Buttenwieser, Chair¬ Industrial Securities Benjamin man; Henry M. Bateman, Blankenship, Teletype KC 273-4 exigencies of the situation which it Not , MUNICIPAL and CORPORATION BONDS ' Ave., Kansas City 6, Mo. 1009 Baltimore uncertainty only because felt that the surveying AND LOCAL b have improvised that theme. It did so on Bell Teletype—SL 288 CORPORATE SECURITIES Slerii Brofes fur¬ with, sober contemplation of;' the risk entailed and ventured into this ther Curb {Assoc.) Chicago Board of Trade New York TRADING DEPARTMENTS ARE ACTIVE IN MUNICIPAL note on the such was in¬ tertwined in prior reports. Your Committee is not unaware of the fact that in this report it, too, has not entirely eschewed that motif. It may even MEMBERS New York INVESTMENT SECURITIES report to this sounded a respectful motif of prophecy as SECURITIES OUR satisfaction of all resolved to the ., GArfield 1721 UNDERWRITERS "•*- prob¬ Committee Second: Another technical up ST. LOUIS 1, MISSOURI Teletype—SL 62 uri- ' * , STOCK EXCHANGE ST. LOtTIS sound. in our country Dealers' Digest" indicated that called "red herring" prospectus equity capital for financing the "Private deals were substantially goes to the very core of this prob¬ normal expansion of our industry unchanged at $61,287,000 per lem, and y o u r Committee is arid trade and for their conversion month in the first six months of gratified to be able to report that from wartime to peacetime econ¬ 1946 against $67,308,000 for 1945." the SEC is giving this far-reach¬ omy. The article did not indicate how ing subject timely and intelligent The foregoing* appear to your consideration; With the coopera¬ much of this private placement Committee to be some of the basic, tion of your association and other broad, underlying economic prob¬ was for industrial securities but similarly interested parties, it is lems confronting industry in gen¬ for the reasons indicated previous¬ confidently expected and piously eral and the investment banking hoped that this important ques¬ ly it is reasonable to assume that business in particular. There are tion of adequate and timely and practically all were of that nature. various technical problems which practical circulation of informa¬ Your Committee reiterates and tion prior to the sale of new se¬ likewise beset our industry. Some endorses the views of the 1945 curity issues, which, we reiterate, of them have been the subject of has such a significant bearing on considerable discussion in prior Committee on this subject, as ex- their proper distribution, will be of V*. A economically is 'private' placement, direct is probable that the desire to avoid is a paraphrase of a similar ob* proportion to the degree in which registration under the Securities servation contained in the 1945 such funds are obtained through Act has been an impelling reason committee report, which likewise? equity as against indebtedness, in the decision of many issuers to points out that "the Securities and save in cases where the outlay can sell their securities privately. The Exchange Commission has; recog¬ readily be repaid through depre¬ pressure of the large volume of nized "this situation in its release* ciation charges, etc., in which funds in the hands of insurance in the so-called P. S. I. case and case borrowing is entirely war¬ companies and other institutions has expressed the view that the ranted, ft However, if the afore¬ constantly seeking outlets is also agreements under discussion ini mentioned large-reservoirs of cap¬ an important factor in the situa¬ that case were not in violation of ital are restrained by law from in¬ tion. Anti-Trust Act.'* And, it seems probable that the .Sherman vesting any except a small por¬ an increasing volume of the better Whether* or not this determined tion of their assets in equity se¬ grade industrial securities will be the matter of whether our Indus-* curities, then obviously new cor¬ sold through private placement in try will hear further on the sub¬ porate capital requirements will the future. We may expect that ject is a matter on which your have to be met largely through the investment banking business Committee prefers not to express borrowing. This, we reiterate, is wfll always be at a distinct disad¬ any present opinion other than to economically unsound; and we vantage in competing with direct suggest that if there is any aura wish to emphasize that it is un¬ buyers unless the Securities Act is of doubt on the question, it is of sound for borrower and lender changed to equalize the competi¬ such overall importance that any alike because of the resultant tive position in so far as it is de¬ vestige of uncertainty should be diminished equity junior to the termined by the requirements of removed by legislation. very indebtedness which these registration." Third and last, there is the en¬ lending institutions own. There¬ That this observation is just ks tire question of adequate distribu¬ fore, we suggest a revision of the tion of new securities which, iri laws governing their investments applicable today as it was when made in the above-noted report, considerable degree, is related to to liberalize and widen somewhat is attested by the fact that the the proper dissemination of in¬ the * scope of their equity pur¬ figure for private placement in¬ formation under the Securities chases.*' dicated above was at the rate of Act in advance of the actual ef¬ New York Chronicle UNDERWRITERS or corporate securities to in¬ vestment institutions, without reg¬ istration under the Securities Act, requirements is in almost Mr. and Mrs. Fifty-Six Years of Investment direct "The First: sale of - York Cleveland New Bank at the present time are weighing all considerations in¬ the; following matters considered volved—both from the standpoint in the report of our 1945 prede¬ of the issuer and all potential; cessor committee: buyers, large and small—private?' germane panies, savings banks, trust funds lem for which your and similar fiduciaries, we have continues to be an important has no present solution but which indicated that the predominant factor in the field of corporate fi¬ it nonetheless again calls to your part of the savings of this country nance. Industrial corporations attention is the question of main¬ which are not invested in govern¬ now account for nearly all of the tenance of a fixed offering price ment bonds find their way an¬ issues which are sold through this by agreement between under¬ nually into the hands of insurance route. (The competitive bidding writers and dealers during periods companies and savings banks. And rules for public utility and rail¬ when an Issue is undergoing in¬ this process is growing. We have road issues preclude issues in itial distribution and which, so fai* likewise indicated that we think these fields from being so private¬ as we can visualize, is an essential that the prudence with which cap¬ ly placed.) ... In the period of part of the machinery by which ital is purveyed for expansion of about 4% years -ended July 31, new capital is obtained by corpo¬ industry for its postwar conver¬ rations through the public sale of 1945, private placements sion and, in general, for its capital amounted to $2,597,000,000. ... It their securities. This observation Antonio '0. Chicago & Co. that opinion Chicago New York ■ governing the in¬ quotation,1 instant own vestments , ; v Securities Corp. Union S. Doyle, Leo J. Drobnis, George J, Drummond, Kenneth As to the laws Heavy Financing reports of your Industrial Secur¬ pressed in the ities Committees. Particularly and adds its Chicago Charlotte - , Mericka & Co. Wm. J. u: *Donnally,' J. P. Downey, Norman Washington San & Co., S. Dickson York New & Dewar, Robertson Pancoast *Doerge, Carl H. Chicago Comptroler of the Currency Continental Illinois Bank Continental Illinois Bank Denison, John W. *DeSwarte, Bruce H. York New Corp. Swiss American Delano, Preston the that gain. This is the system which has prevailed.in England and.is there generally conceded to be sound. from the investment of capital gain minus the tax on tax, Chicago Baltimore Shields & Co. First Boston Corporation Chapelle, R. (Continued from page 3075) Philadelphia National Bank Mackubin, Legg & Cp. Delafield, Richard M. de Neufville, Otto :ft Chicago American DeGroff, Ralph L. Francisco San Davis, Skaggs & Co. ? Paul H. Davis & Co. Drexel & Co. *Davis, Ralph W. Foresees 3075) (Continued from page Thursday, December 12, 1946 FINANCIAL'CHRONICLE Industrial Securities Committee Meeting In Attendance at IBA *Davis, George W. COMMERCIAL & Fred M. Charles B. Crouse, Clement A. Mark C.-Elworthy, Evans, Hubert W. Lofft, James Moss, Julius W. Reinholdt, Jr., W. Le- [Volume 164 THE Number 4550 COMMERCIAL & FINANCIAL CHRONICLE Markets in De-Rooseveltization (Continued from first page) •?ue<? on.^e other side, and not¬ personnel. But in terms of eco- fundamentals, the election merely confirmed and accentuated nomic been wnat has increasingly prev¬ alent already. This country cannot but be of one free less, just more or as enterprise war-ravaged iLurope cannot be hpt more or less socialistic. It is an essential fea¬ of ture xnat democratic its economic termined by civilization: policies the erishment drives it of de¬ the are welfare The bleakness masses. of impov¬ into some of torm totalitarianism, as the prospect of rising standards calls for economic freedom. ^ Money-tinkering and wealth(or things of that redistribution *ort) were^ a politically unescap- able sequel to the great depres¬ sion as Full Employment, Cradlesecurity, and Na¬ to-the-Grave tionalization philosophies are the reaction of the British masses to compulsory austerity, and communist vote r e g i s t e * r e n c h workers' as r s the the dissatisfaction with wages lagging behind 2nf]a}jon' That North America is different world, the Democrats Having peen too slow in changing their depression-time ideological horses, they were washed out by bad to learn the hard way. °f prosperity-expecta- Better theirs understandable the is reaction than from the Meeting on . , ,~ . not rent output, rather than to let us restore an anti-Russian Germany in the Western zone. Besides, they ask for a price: a free hand in be a seasonal gether. The best matter measure New York New York New York New York Palm Beach New York Boston Oklahoma City Norfolk New York New York New York Coral Gables Philadelphia Chicago Seattle San Francisco New York >; ; New York Specialists in alto¬ of the "active" monetary volume is the currency in circulation outside the banks, plus "adjusted" sum 01110 of price Central Europe, including Poland and Hungary, and full control of demand a tions In Attendance at ISA it if it renounces check its speed. To rthe Republi¬ (Continued from page 3076) our commitments. A disgusted cans, a high level of production and Dunn, Charles R. Federal Land Banks Congress may issue a peace proc¬ "reasonable" price levels should C. J. Devine & Co. lamation, but that will be mean¬ result from abolishing controls. Dunn, Stewart A. *Dunstan, E. F. That is the essential Bankers Trust ingless. After the previous war, change in Company . our proclamation m e r el y con¬ policy: from a capitalism bol¬ Duryea, Wright Glore, Forgan & Co. firmed an a 1 r e a d y established stered by artificial shots-in-the- Duskin, Joseph H. Thomson & McKinnon peace, while this time hone will be arm and hamstrung by govern¬ Duval, Gordon B. Guaranty Trust Co. mental and trade union interfer¬ Eaton, Chasles F., Jr. Eaton & Howard established without us. R. J. Edwards, Inc. But bow cam it be established, ences, to one operating by and ♦Edwards, J. H. large in accordance with the rules Eggleston, Aubrey J. Investment Corporation given the deadlock with Russia? of the competitive game. Egly, Henry H. Dillon, Read & Co. So far as the A-bomb is con¬ Egly, Mrs. Henry H. with Henry H. Egly cerned, the danger of losing it Monetary Volume and Velocity Egly, Patricia with Henry H. Egly voluntarily probably is over. As Elcook, S. L. 2515 But what of inflation? In Octo¬ Ponce de Leon Blvd. to territorial questions, ; a co¬ ♦Elkins, Geo. W., Jr. Elkins, * Morris & Co.lossal "horse deal" seems to be ber, commercial loans of report¬ Ellis, R. Winfield Lee Higginson Corp. shaping up. The Russians appear ing member banks have risen by Ellsworth, Sherman Wm. P. HarpeV & Son & Co. ready to permit unification in $600 millions; for all banks, the record expansion of business Elworthy, Mark C. Elworthy & Co. Germany as well as in Austria, Emerson, Sumner B. Morgan Stanley & Co. thus giving up their stranglehold, credit of a single month must ap¬ ♦Emerson, Willard I. proximate $800 millions. In the Hemphill, Noyes & Co. as indicated by their haste in rid¬ ♦Denotes Mr. and Mrs. ding those countries of equipment same month, money in circulation arid even of men. In view of the spurted by $140 millions, con¬ (Continued on page 3078) lack of German cooperation with, sumer loans by a record $300 mil¬ 4% of the total. These and Allied hostility against their lions, are certainly not signs of an im¬ rule, this is the best way for them to keep their finger in the pending depression. Seasonal? If it's an unusually booming otherwise depleted German pie, so, by drawing reparations out of cur¬ season, indeed. But they could be, blamed withstanding the significance of fiousecleaning in finance, trade union policies, and administrative 3077 deposits—total demand Danubian trade, foreshadowed al¬ deposits minus items in process of ready by our concession of sur¬ collection, governmental and inter-bank balances. This figure of rendering the Danube boats with¬ out reciprocal concession from actual purchasing power reached a year ago the then all-time high their side. of $106.3 billions, (against less "Bi-partisan" policy means to than $26.2 billions in June, 1929) let the State Department proceed. and declined in the following five But to swallow a new appease* months by 5%, to $101.2 billions. ment (virtually the program of Since March, it is rising again. By Unlisted Securities Members Cincinnati Stock Exchange First National Bank Bldg., Cincinnati 2, Ohio -- • Telephone: Main 4422 Teletype: CI 388 may cause Congress Wallace!) the end of September, it reached quite a little indigestion. Any¬ a new record: $107.7 billions, and confusions which distort the Brit¬ how, if an appeasement compro¬ rises since. Nor is this rise due ish and Continental minds. In mise is accepted, we will have to cither side of the Atlantic, due to the .painful worries and socialistic the to decline in the volume of the U, S. was regarded finance Central Europe's recon¬ other forms of money. As a mat¬ struction. If none materializes, we anyway as the bastion of unfet¬ ter of fact, the billions of "latent will have to keep the Germans money" grow month after month: tered capitalism, and the great importance of the confidence-vote and Austrians alive. One way or savings deposits amounted to $47.9 it earned in our elections is easilv the other, additional appropria¬ billions in November, 1945 ($28,6 overlooked. Over there, Nov. 5 tions are to be expectedr-wfiich billions in 1929), $49.7 bililons in brings us back to the internal merely underscored what was February, 1946, and $534 billions ;assumed, and its main effect con¬ scene. in September, 1946. The net sale of sists in arousing fear about fi¬ E, F and G bonds proceeds now at Return to Free Markets nancial, commercial and diplo¬ the monthly rate of about $100 The prime objective of economic matic "isolationism," which would millions. Money creation, actual policy is: to Secure Full Employ* and strengthen the Russian grip. potential, continues relent¬ ment (whatever that means), but lessly. avoid the pitfalls of inflation. To Foreign Policies Rising monetary volume alone To be sure, the Republicans do the Rooseveltians, inflation was a need not affect prices immediately not plan to return to laissez faire, minot concern; belying as they did if the average dollar's turn-over to t abolish Social Security and on high wages and subsidies to would slow down proportionately. on regi¬ collective bargaining, still less to oil the machine, and (Continued on page 3078) cancel the anti-monopoly legisla¬ mentation and credit control to ' ■ .Europe, tion, i or to farm m INCORPORATED 1st FLOOR KENTUCKY HOME LIFE BLDG. LOUISVILLE 2, KENTUCKY to abandon the support parity prices and to silver. vNor is there . BANKERS BOND m a of chance break- the continuity of our "bi¬ partisan" foreign policy which has not been a campaign issue at all. In reality, the foreign-born minor¬ ities, especially the Poles, deserted the New Deal partly because of Washington's inept handling of Russian "imperialism." No doubt, INVESTMENT DEPT. mg THOMAS H. GRAHAM, W. INVESTMENT Manager BOHNERT CHARLES C. WILLARD P. McNAIR E. C. LEWIS Seasongood & Mayer ■ KING P. M. CONWAY J. M. FETTER ... bEPT, WOOD HANNAH, Asst. Mgr. HOWARD D, LOUDEN • . ' they will be remunerated for their votes by Congressional declara¬ tions in favor of the under-dog Established 1887 in Zion¬ ists, possibly also by special im¬ migrant quotas and similar ges¬ tures. The trouble is that we are faced by burning issues which call for prompt action if a world-wide economic catastrophe is to be Central Europe, as were the < CINCINNATI 2, OHIO Ingalls Bldg. Pounded 1872 Members New York &. Chicago Stock Exchanges Members New York Curb Exchange (Associate) averted. Of course, foreign since basic change in is in the offing, international no policy the 419 W. Jefferson St, major credit lines already have been granted, and the President's pow¬ . ers under law June, 1 have 1948, enthusiasm the reciprocity extended until tariff been Besides, for Republican high tariffs Established 1878 Bell System Teletype—LS 284 A. LEPPER & :■ : y.Y';: / . CO. Y-YyYYY:7 ( ' \ These are minor questions (though the squandering of American money abroad may be replaced capitalistic rights of U. S. citizens) compared to the real issue: how to put the world on a Louisville 2, Ky, Long Distance 197 & Western Union Phone — MASONIC TEMPLE ; Active Markets In , . ; ■ ■ All Local Securities Specialists in * by insistence on the commercial Hilliard Bldg, OWENSBORO, KY., OFFICE is burning only in depressions. f J. J. B. HILLIARD & SON UNLISTED SECURITIES Kentucky Municipal Bonds and " ? peace footing. Evidently we are ,jnot going to crusade for democ¬ racy, while on the other hand no f ^Republican majority will dare to * risk that another world .war might • r v " - r. .. ($■>> . Private 1st NATIONAL BANK BUILDING and CINCINNATI 2, OHIO - Wires to Wood, Walker & Co., New York Mitchell, Hutchins & Co., Chicago Telephone, Telegraph or Write Us • THE COMMERCIAL & FINANCIAL- CHRONICLE Markets In Attendance at IBA Meeting i: (Continued from page 3077) Erickson, R. R. -Chicago Journal of Commerce ■ New York Sun Clement A> Evans & Co.; Commerce Trust Co. Bros. &; Boyce > C. Ewing & Co. v, Clark & Co. Bank & ; Estes, John B. • • New York New York ; Atlanta Kansas City Baltimore .^Wilmington Cleveland -, , *Evans, Clement Evans, Harold Evans,. Henry Ewing, Allen *Fahey, Leslie Farrell, F. D? , Kansas City * ' ,■ uset, Steele & Ce.r0 W: *Fauset, Joseph The Woman Banjcen Brooklyn; ^ Feil, Helen R, *FeJdmann, Herman A, Geyer & Car r : New York *Fennelly, John F. -Glore, Fprgaii & Co.-^ Chicago ; Fieder; W. A. • H-M. Byllesby & Co. New York Finger, Clarence L? ^ Milwaukee Company, St. PauL*Fjnney, Howard, Jr. • - Bear, Stearns & Co. - New York , Fisher ? Pittsburgh .Singer,,Deane & Bcribner Charles N» *Denpte? ^lr. £nd Mrp. ^ (Continued - / ' -on page 3079) j * ' * < - Thursday, Pecernbet 12,1946- i (Continued from page 3077) The annual velocity pf net demand deposits (outside New York) Slipped from 234 in 1937 to 194 in '39 and 464 in '45. Now, it has started to recover gradually: 17.1 in September, against 14.0 |h the same month last year, inaccurate as this measurement fs, it leaves inflation road at the end of which creating* output in stands As "Boom and Bust," wish¬ self may be at stake. ... ' Confusion, Not Recession* V But this the trend. And ultimate outlook is other indications. This overshadowed presently; by 4 the year, the prospective billion dol¬ immediate issue, represented by a no douht ,as;. to there lar are - increase in circulating curren¬ somewhat reduced buoyancy in is not jikeiy to stem from mere hotel and department store busi¬ hoarding desirest H, F and G bond ness. downward price corrections sales are .'another- object. lesson, in. steaks,: beverages, and costume in the first 10 months of this year, jewelry,-:"sluggish" - demand for gross sales pf $640 billions were seats on airplanes and in operas, diluted by $5.5} hillipns pf re^T consumer, resistance against oyer* demptiong. More than 1Q% of the priced hats, poor quality-cloth and outstanding savings bonds have war-time substitutes, etc. These cy been redeemed and the proceeds are supposedly the symp10ms presumably spent before they re* which spell "recession," allegedly appeared again as bonds, In other around the corner. What they spei} is confusion words, sayings have a turn-over "velocity" of their own which rather than recession, Decontrol Is one reason; it throws into the open rises, too. a wide variety of articles, -the The Inflationary "Cycle" prices of which were kept in the : Both the quantity of money and OPA hothouse. They have to feel its velocity are on the increase-^ their way and find the real sup¬ the typical boom signal—the more ply-demand positions before they SO, since, credit restraints are can take their proper seats oh the eased- Already, compared to pre¬ inflationary bandwagon. But in war levels, the number of avail* the meantime, violent fluctuations able dollars has more than trebled, occur, with consumers and pro¬ while the average dollar turns ducers baffled and hesitant in around at a rate only moderately making commitments, creating lower than it used to? That is why confusion. 454: national output and paid-out na¬ Very confusing, too,'-are the tional income more than doubled, stresses and strains in the price structure due to the disproportion¬ average weekly e a r n i n g s and Wholesale prices having risen by ate rise of indiyidual prices. For 100% or so. Given the vast accu* no good reason, cotton rpse from mulation pf pent*up demand and 80 per pound in 1939 to 39%0 . SECURITIES OHIO Corporate and Municipal CLEVELAND CINCINNATI of INVESTMENT BANKERS ; >' , members , new new: Established 1903 « stqck york york curb: chicago board chicago stock cincinnati stock of exchange exchange of trade unprecedented from soft and semihard goods,: the., markets - of which "recede'^accordingly, That d o p a r t m e n fc storey gq nervous,, fs understand*-' able?' (But that "economists". dp so, is most regrettable. Pf course,: it is embarrassing to find oneself: in a cycle for which the textbooks pave nq name or precedent. The unpleasant compulsion to use One's head may explain some of mental fdepression?") inci¬ dentally, until September, depart* ment store sales were* running: month for.; month 25% above? 1945; ppw, they may be running "only" 20% higher. The spoiled children of this inflation yell "de* pregsipp" each time they do not "4 reap at least 35% above the pre* ? vipus alirtime peak? own the , Labor Bottlenecks I Bottlenecks Labpr sppply js our main source of confusion, direct, indirect, an#i roundabout Directly, 58.1 milppng employed means that any major;: additional demand for labor must I draw jt from other employment-— at higher wages; and draw it will, "stick out their necks"; they get lesser efforts at work, but also to accordingly. Specula¬ i n d u 1 g e in prpduction-breaking tive orgies call for correction even strikes, which are the more dis** | in a rapid inflation, much more turbing to the stock market since so in a "slow one. Similarly, the their "incidence" on profits can-*: shortened elimination of OPA and CPA fet¬ npt be foreseen. ; No one can tell which' plant or spending in °ne direction, which necessitates less industry will be hit next, and to spending in another. The artificial what extent. The same holds for gold reserves, d°dar balances, distortions of the price structure the roundabout effects of the U. S. credit lines, and extra- must be corrected, implying gains labor bottleneck. They create a; American barter trading, pressing here and losses there, but endlhg wjde range of shifting material against depleted supplies and in* up with higher prices all around. and parts shortages which delay Furthermore, a redistribution of the assembly, lines, hold hibited production. As the produc¬ up deliv-f tion and consumption center, we the consumers' dollar is the nec¬ eries, arid postpone the f'filling of are leading the procession on the essary ; consequence of the in- the 'pipeline." Nay, new empty 1 . , ters induces mom - exchange appear before the old arq| filled. Involuntary inventories pc4 % cumulate due to shortage of ac¬ cessories, postponing the market* ones exchange ing pf ; otherwise finished .and sprely needed products. To a ^ Resident Partner, N4YV: John T. Heme — Mgr. Bond Dept ^X '? however, the number one source of confusion.,. industrial capitalism abroad, or what is left of iti suffers from ail kinds pf shortages? (The Prime Minister just warned Britain of a "manpower shortage for yeara to come;") But foreign shortages merely add to pur own trouhlesare, cash reserves, this fall. If it fails back to last; Or production cannot expand. IpJanuary's 260 or so, it still will directly, labor's extraordinary not have corrected the. discrep¬ bargaining position permits ? ft ancy to the general trend. In other npt only to get away with longer words, when all prices rise, some vacations, shorter hours, and I and above all: the unchecked abil* ity of the credit system to monef tize the debt—-incomes and prices could and should keep rising. Monetary inflation raises incomes and the spending of consumer id turn stimulating new investments and raising the demand for labor that is practically in full employ* ment, thus necessitating higher wages. On top pf it, the world markets labor under the pains of inflated demands bolstered by CINCINNATI, OHIO I T, Bartlett capital goods. more automobiles, houses,, fully prognosticated by the Marx¬ furniture, etc., appear on the ians and their fellow-trayellers. market and absorb the ultimate At stake is more than the success buyer's attention, he has to divert of the Republicans. Capitalism it* some of his purchasing power: - Walter, Woody & Heimerdinger MUNICIPAL BONDS 403 DIXIE TERMINAL CINCINNATI 2 s build home (often. short pf essential appliances) npw takes from five tp six months, instead pf three tp four, holding down manpower that is in demand elsewhere, Every qld car that has tp be dis* carded because of lack of parts npt only. demonstrates fhaf sec* ondary shortage, but' also depletes the - supply of second-hand auto* mobiles. Take the vital instance locomotives and freight cars^ the much too moderate production of which has declined lately, Wheri more than 40%- of equipment ig « while 'all'of it is exA of WE IN - continuous wear and leaf, and while "car-loading fig*/ ures reach for new highs—a de* ppsed KENTUCKY MUNICIPAL BONDS . Nelson, BpcwiNC-^Ca ^m/esimentJecurities THE W. c. THORNBURGH CO. CAREW TOWER CINCINNATI 2, OHIO 13 East Fourth Street Teletype CI 260 CINCINNATI 2 PArkway 6820 OHIO L D. 107 Teletype CI 366 ; of "Branch Offices; Telephone Ch 6422 peveland^rAkron to rivative bottleneck (freight tie* up) develops on the .shoulders of the primary (labor and material shortage). More delays and higher costs of transportation jn turpi hold up production and raisp prices. Lower productivity results also from an unusually high rate pf labor turnover, another sequel to labor shortage. Bottleneck in the most Essential resource creates derivative 'bottleneck? all around, that the en* under thp iaw pf diminishing returns: rising costs per unit of output, which is with the consequence tire' system operates somp da* ciine of demand. (.Hotels, e g., ask not for remedied even by a 15% raise of transient rents Volume .i •s <;' * Y because 1(>4 " ~ THE COMMERCIAL & FINANCIAL CHRONICLE Number" 4550 ;• ' •» decline law of of to exclude 3079 supply and demand is VVVWJJiAiSvj occupancy partial enhances -their permitted to ^operate freely, and measures asissuing; non-eligible -f : that, is what the Republican vic¬ long-terms at a p p r e c i a b 1 y in¬ 5 The theory that volume produc¬ tory stands for, more production creased yields, or with tax-ex¬ (Continued from page 3078) demand for labor, emption features. / tion per se will overcome the bot¬ means more That leaves the markets to seek Fisher, Robert W. Blyth & Co. tlenecks ignores the essential di¬ higher wages, and more consumer levels in accordance ♦Fisher, W. Lloyd Baker, Watts & Co. ; lemma of inflation. It produces a spending. Increased net earnings their own of large corporations in the first with supply and Hay den, Miller & Co, demand—operat¬ Fleek, John S. high level of demand for virtually three quarters, ; 12% above 1945 ing under conditions of advanced ♦Flint, John G. Kidder, Peabody & Co. everything. But all output cannot Folger, John Clifford (another "recession" symptom?), disequilibrium. Supply is ham¬ Folger, Nolan, Inc. > be geared to simultaneous full must stimulate investments and pered by basic and derivative bot¬ Foote, Gordon R. ,: .Francis I. duPont & Co. V; production; there is not enough from CK a » UC.C1JUIV 104 :to costs.) ■ even such 92% ^^7 r. ; Vi. . labor to go around. While one bot¬ tleneck rows. is widened, another nar¬ Unless the fundamental bot¬ tleneck broken, the economic jam" will continue, and the cost-price inflation. That is the old problem the new Congress should solve—or try to. is further; increase the demand for As it is, business expendi¬ tures for new plant and equipment labor. are estimated at $11.7 billions this . tlenecks which mand driven raise costs; de¬ by an excessive purchasing power that is able to pay rising prices. Both are in con¬ is \:vY ; Watkins Forrest, John G. Frederick, Paul O. French, Jo M. Froman, Celeste Frye, Charles D. & Fordon Baltimore Cleveland Boston Washington New York Detroit ; . New York Times Y-Y New York Commerce Union Bank Nashville Blyth & Co. . New York billions at the stant structural shifts due to un¬ Investment Bankers Assn. Chicago 1941,- and that even rates in the process of cost Chicago Journal of has not exhausted as yet more and price inflation, and due to Commerce Chicago than a fraction of the pent-up de¬ constant : William A. Fuller & Co. changes in the allocation Fuller, William A. Chicago mand for productive capital goods. of A. E. Ames & Co. productive resources and in the Fullerton, C. G. Toronto Rational labor policies could ac¬ In short, given the inflated vol¬ distribution •Denotes Mr. and Mrs. of consumptive : in¬ complish a great deal, but not the ume of purchasing power and the comes. The solution. By restoring the consti¬ access to more disequilibrium is (Continued on page 3081) money by debttutional rights of the employer monetization: "sound" labor con¬ bound to deepen by its own mo¬ »nd of the "non-conformist" em¬ ditions, desirable as they are, are mentum, though the inflation may ployee, reducing the incentives for likely to break down the last im¬ be interrupted time and again by When you have an interest in voluntary unemployment, effec¬ pediments holding up the boom reactions to correct excessive tively punishing contract-breaches, and the concomitant progress of OHIO SECURITIES eliminating the NLRB's catering inflation. swings. "Over-production" in one to restrictive union practices, etc., The crux of Republican policy sector, with lowering effect on its CLEVELAND BANK STOCKS man-days lost in strikes might be then is, must be, to control infla¬ prices, merely drives labor and cut to one-half of this year's 120 tion at the source^ the only effec¬ materials out of that sector until millions, perhaps even to the 1937 tive control. Balancing the budget, Securities Listed Cleveland Stock Exchange high of 25 millions (against 2 to 6 to production-lags and rising prices begin with, is a fairly simple can millions normally). The lifting of set in; attractingback labor and matter, even with some tax re¬ price regimentation may be in it¬ CORB USTON : duction thrown into the bargain material and starting all over. self a sedative to the labor mar¬ But what is needed is an annual Temporary set-backs in consumer ket; it helps to avoid wage strug¬ surplus of, say, $10 billions to off¬ & gles at the expense of the con¬ spending merely serve to re-es¬ set the current credit expansion Member* New York, Cleveland and Other sumer. But let us not forget that Principal tablish the balance between the (provided it is used to redeem Stock Exchanges strikes work both ways: to some bonds held by banks, not by. the rise of incomes and the rise of extent they "control" or postpone GUARDIAN BUILDING public). The Republicans are sig¬ prices. Ultimately, deflationary the vicious* cost-price cycle. This CLEVELAND 14 nificantly vague about ; that, as fiscal: or PRospect 6300 monetary measures will year, the loss of labor income Bell Teletype—CV 97 about the problem of federal ex¬ kept down - consumer spending. become unavoidable to call a halt. year "traffic will so against ♦Fordon,Ralph New York $8.3 peak of wartime - . Prescott Co. - _ penditures in their entirety. In so; it is running at arv an¬ spite of substantial economies, no peak-rate of 120 billions.) budgetary surplus, of such size is They also dampen the speculative likely to appear before '48 ot *49, spirits, expressed in the decline if at all. of stock quotations and the "stag¬ Debt redemption would have nation" of inflated real estate to be supplemented by methods to values. iEveh nual \ Less strife on the labor front is all that (without might accomplished deflation). Even be actual stop the to be debt-monetization. effective, direction has kt steady wage rates it would re* ready to face suit in higher incomes and more any to a But policy in that be drastic HAYDEN, MILLER & CO Established 1903 and real depression, be INVESTMENT SECURITIES it only a short one. Nothing of the spending, virtually offsetting the kind is under serious considera¬ additional production. But why tion, and the objective of budget- rising? If the balancing at reduced taxes should wages stop Union Commerce Building seems CLEVELAND, Underwriters and Dealers OHIO Members Cleveland,Stock Exchange MUNICIPAL and CORPORATION SECURITIES THE FIRST CLEVELAND CORPORATION ' CLEVELAND ! ! STOCK EXCHANGE NATIONAL CITY BANK BUILDING CLEVELAND 14 Telephone Teletype Prospect 1571 Bell System CV 443 & 444 Underwriters and|I3ist^ut6r& State, Municipal and Corporate .jV ;'}$<■ [' V";: ; V"'v':-v ^VC'V'. Securities OTIS & CO (Incorporated) ESTABLISHED 1899 McDonald & Company Member New York Stock CLEVELAND Exchange Member Cleveland Stock Exchange YYY UNION COMMERCE BUILDING1 CLEVELAND 14, OHIO NEW YORK CINCINNATI ; IJt TOLEDO CHICAGO V COLUMBUS DENVER BUFFALO THE COMMERCIAL & . 3080 duced 3010) (Continued from page lawyers and judges something the income tax, it is to see how either World War Without witnesses hard have been income tax is a President's last revision of could , . well. We produced materials and a bigger amazingly more war ally, thought we could. Look at the money we were able to spend. In the last year of World War I, the fiscal year 1919, the Federal Gov¬ army than anyone, enemy or $18.5 billions, a the time, for six before in 1913, Federal ex¬ ernment spent great peak for years only $725 mil¬ Federal Government spent $100.4 billions; six years previously, in 1939, the total was $9.1 billions. In neither case did revenues keep up with expenditures. In 1919, Federal tax collections were $4.5 billions, penditures lions. in were 1945, the In fiscal 1945, $41 billions. experience, like I, supports two major propositions. If production World War II that of World War is high and the national income large, we can support a huge Fed¬ eral budget. The converse is like¬ wise true, as shown by the ex¬ perience of the 30s. If the eco¬ nomic machine is not functioning production is not very Federal receipts will good either. The sec¬ ond proposition is one aspect of the first. The income tax with its well, if good, then not be very tax the varies with incomes. If its way • the bulk of the total Federal rev¬ there men seem men same any who special merit in a particularly otherwise have unpleasant job of trying to persuade their colleagues in Washington to eliminate bureaus and personnel added during the postwar year ranging around $20 billions. The dollar may not be worth now quite what it was mal then, but even so, a Federal budget of $20-$25 billions is gen¬ we vidual taxpayer, who wise Treasury have would other¬ system. to spend fourths ment maintain can -— Cleveland 14, Ohio better than dividually. navy The next 1,1 " " -- ..... MEMBER CLEVELAND ■" ',•* ".. 'tt i\j r { \ 7 ^ , * V . STOCK EXCHArfdE. >' i; '' \ i J <. for the of the size we had during the war. How much ex¬ penditures, then, are really neces¬ sary? How many young men can be employed to belter advantage by the army under arms than by the laboratories and shops of the army or a navy country? and been saying that How women be left many young men can employed to be Federal untouched. done after I, taxes could be re¬ was But omy excise we can insist on tration, and they produce a min«*' litiga-i ^ We have added a multitude ■■ of other sales and excise; taxes> during the war, and have in- ' creased their rates. Many of these * taxes produce little revenue and " are essentially nuisance taxes. We imum of controversy and tion. /villus ' I '■ great1 would do well to abolish a As number of them. fact, matter of f a the numerical majority of: re-1 Federal excise taxes could be pealed without very serious loss of revenue, and the public relief I would be great. Why a 10% tax / on sales of sporting goods, to pro-1 duce only $7,878,000? Why a 10% >; tax on sales of victrola records? * Presumably because golf clubs ?: and recordings of symphonies are ? regarded as luxuries of the rich;* But what about the baseball bats« used on the corner lot or the discs J that the bobby-soxer dreams over? At any rate, the Federal Treasury could get all the needed excise t tax revenue if it retained the? taxes on liquor, tobacco, jewelry, i toilet goods, furs, and luggage; the | transportation and communica¬ tions taxes, and the admissions' tax. The gasoline and lubricating , oil taxes, and the taxes on auto-* ? mobile tires, tubes and parts will: also to be retained for cur-* need because of their pro-; ductivity, but should, it seems,/ be relinquished to the States as: promptly as possible. A program of this sort would enable the elimi-, rent years a dozen or more nuisance:; of firearms and shells, radios, and matches, out serious loss of revenue. Let tion are Investment Securities - :iv, history.. These two taxes have the great merits of dependability in good times and bad, and of es¬ tablished and effective adminis-6 greater econ¬ Merrill, Turben & Co. ' taxes, Liquor and tobacco taxes, haver the Federal and we certainly should do so. ; nation of ..i:--" sales and taxes, like those J \\f "yV> A, * *t v revenues ! Government all through our fiscal tion, are necessarily much higher than they were before World War II. Probably all expenditures will " •' <(-4 :"r' >il: SECURITIES ^ been used to support ex¬ permanently remain much higher. as Federal all taxes, purpose? Certainly we want a good and effective army and navy. But it is obvious that we do not wish to maintain either an plain that if a determined drive were made to reduce Federal ex¬ " INVESTMENT i a Probably around three- t of Federal CO. ;; incorporated r,f in the income tax*'' individual and corporate. The f other one-fourth will be raised by penditures do not have to be that high. Some of the costs, like in¬ terest and veterans' hospitaliza¬ World War " are Such it. on question is: how much notably the liquor arid the tobacco does the Government need receipts penditures, H. L. EMERSON & Congressmen insist will be raised by certainly should be reduced. The inference is plain, though it has not been so clearly stated by the principal Adminis¬ tration officials, that expenditures should not be reduced. For it is tax 500 perfectly possible, if '■ our and money Certainly the the total receipts anced whenever the have himself? Trading Markets Building ■ X expenditures or that po¬ budget is essential, not merely to 1 litically desirable but unnecessary permit tax relief that is urgently ' receipts were estimated at $8 bil¬ purpose. The common sense of needed, but to bring Federal ex¬ lions more. The budget deficit as the situation is, though, that ex¬ penditures under control, so that estimated in January was, there¬ penditures acquire no additional in a period of less production, arid ' fore, slightly reduced. merit through being made by the lowered national income, we can Without more, this is not a bad Government. • -V Basically the ques¬ still pay our way as we go. budget showing, and it has been tion is: can the Government per¬ so represented to the people. For¬ The Tax System ' \ « form the particular function more tunately, the Administration at The income tax is bound to bewisely and efficiently and spend long last has begun to advocate the money better than the indi¬ the mainstay of the Federal tax 1 to cut down budgeted for this war, GOTTRON. RUSSELL 8 CO. Union Commerce and earnest . Long Distance and is erous equal or exceed the total expendi¬ better advantage by the OPA or those elements in the in¬ tures. If the Federal budget is by the Bureau of Animal Hus* wartime companion, the excess come tax which tend to produce out of balance by an excess of ex¬ bandry or by the Government profits tax, is our most flexible, stability penditures, as it has been since in recepits must be Printing Office than by private as well as our most powerful, 1932, Congress can seek to bring factories and groceries and farms? strengthened and conserved. engine for revenue production. it into balance by increasing re¬ I do not know the answers to ceipts (the method which was followed half-heartedly up to these questions, but I do strongly believe; that citizens should ask World War II, and then vigor¬ them regularly of their govern¬ ously) or by reducing expendi¬ mental representatives, and that tures. the representatives should think During the current fiscal year, about them, obtain the available receipts will just about balance information about them, debate expenditures. The fiscal officers about them, and then answer of the Government have advanced them* | ~ the proposition ihat that balance We cannot assume that a Fed¬ should be maintained by leaving eral budget which has grown to both expenditures and receipts alone. More particularly, the Pres¬ nearly seven times the average ident and the Secretary of the expenditures of the 30s, can safely cv 565 well-informed men pre¬ budgets for a nor-i« sented Federal enue, Teletype different >: several ago, year groups of to think so, would A time and the the very Government is to pay in such times, or even to come reasonably close, it .must have other taxes to rely upon. Let me emphasize those two points again, for they are basic. A Federal budget of the dimen¬ sions we will have for the fore¬ seeable future requires active a balanced budget. There can cer¬ business and a good level of pro¬ be no quarrel with the duction to support it. The Treas¬ tainly proposition that the Federal ury, as well as the people, has a budget should be balanced at this very real interest in good busi¬ ness. Hence, the tax laws and time, particularly in view of the fact that production and national Federal legislation generally income stand at new high levels. should be so framed in the public If we cannot balance the budget interest as to permit business to function actively and profitably. now, how can we ever expect to balance it? All of us should give We must have active production and high level employment not the President and Congress full support on this particular effort. only for the general welfare, but The more important question to for the welfare of the Federal mind, however, is one to Treasury. Second, the income tax my which too little public attention is the flexible element in Federal has been given, namely, at what revenues. If expenditures can be level should the budget be bal¬ reduced and controlled, the in¬ anced? There are, of course, two sides to any budget, receipts and come tax rates can be reduced. The budget is bal¬ Since the income tax will produce expenditures. the Federal the $40 billion Federal budget? Some Federal Expenditures The Is • paid for. The the budget for fiscal 1947, released great producer on to do. Aug. 3, 1946. displayed two in times of high production. In salient changes from the original times of low production and de¬ The State of the Budget budget message in January. Ex¬ pression, the income tax produces penditures were estimated at $5.9 We came through the war very little, since the revenue from billions more than in January and generally don't permit at budget would still be balanced. Federal Tax System Design for Onr Thursday, December 12, 1946 FINANCIAL CHRONICLE me with*; -/ > state the same proposi¬ affirmatively. Excise taxes > essential element of the an In past Federal revenue system. they have been used to produce a much greater propor¬ tion of Federal revenues than they years, - • - , UNION COMMERCE BLDG. Union Commerce Building CLEVELAND 14, OHIO TELEPHONE - MAIN 4070 ' ' • : - - '■ ■1.."K-:-■-• <"■ w! TELETYPE V .CV264 to.;■ ■ OHIO CLEVELAND 14 't produce today. They provide much needed stability in receipts/ The Treasury should not have the centrate taxes ROOSE&SC MUNICIPAL SECURITIES Wm. J. Mericka 6- Co. of used, so that administration can be efficient, and the burden of such .taxes can be spread widely and evenly. Hence, the Treasury Building 29 Broadway CLEVELAND 14 NEW YORK 6 Telephone MAin 8500 WHitehal! 4-3640 authorized to collect estate and gift taxes. OHIO and MICHIGAN v 1408 Toledo Trust Bid?. Toledo 4, reduction from present 38%, would produce about $7 billions. Recommenda¬ tions have been made for the re¬ the ISSUES Direct Private Wire to New York corporation income tax at a 35% rate, a slight Ohio possibly complete elim¬ duction or ination of the tax. In the long corporation taxes are cer¬ tainly borne by and paid by in¬ dividuals — stockholders, consum¬ run, be $5-$6 billions from excise and sales taxes, customs and the The Union Commerce commodities about Specializing in Exchange of excise productive sources, generally collection few on a sales should incorporated Members Cleveland Stock all its. eggs in the income tax basket. It is fiscal wisdom, however, to con¬ ers, or laborers. It is probably m mmmmp (THE COMMERCIAL' & FINANCIAL CHRONICLE' Wiser, therefore, to bring the rates down when stitute we can, and to sub¬ direct imposts on the more individuals who must pay the bill. For the present, however, it cer¬ tainly is not possible to reduce the corporation income much; and, in poration is tion agency. event, the any convenient a rate cor¬ collec¬ Congress should give some; recognition to the fact, how¬ ever, that dividends paid to indi¬ "Vi (' viduals, have already been taxed "V 'V,V,!' '""7j tax .■ income as to the corporation. Some credit for dividends should be granted to individual stock¬ holders, not an surtaxes, but exemption full a from substantial or credit for the taxes the corpora¬ tion has already paid. That is the main change which needs in made the general to be corporate tax structure. Finally we to come taxes and individual rates. If our basic premise is to facilitate ac¬ tive production, our major con¬ be that the income tax, essential as it is to government revenues, should not be collected in such a way and at such rates cern must to discourage individual initia¬ tive and activity. During the past 12 years, the income tax has been as repeatedly tightened stantive provisions. ing in its sub¬ The remain¬ inequities generally operate against the taxpayer, not against . the Government. The taxpayer is reasonably cerned about rates are so two facts: as a save any rates Should not be reduced materially, and whether earned income should not bear a less rate of tax than investment income. Let us examine briefly the possibilities of meeting each of these com¬ plaints. High income tax rates evitable tures are in¬ long as total expendi¬ high. A little detail on so are budget makes that fact revenues plain. Federal excises, customs, estate and gift taxes produced $7.8 billions in fiscal 1946. Cor¬ poration taxes produced $13 bil¬ lions, including both the excess profits tax and the capital stock tax, now repealed. The individual income tax turned in $18.7 bil¬ lions, to produce total Federal (aside from social se¬ curity taxes) of $39 billions. (In addition, there were miscellaneous receipts of $3-$4 billions.) Hence, it is evident that, if the Federal budget stands at $35-$40 billions, revenues the as our have Administration mends, no; tax .safely be made. for the loss of the the excess profits tax. revenue of income tax $7 about about individual should ; billions. of pro¬ ourselves 1946) If the budget stays at $35-$40 very little hope of tax reduction; It ought not and need not be kept at that height. If we can bring it down to $20-$25 billions, and if we can billions, there is maintain active production, income taxes in¬ be can materially reduced. We give a moderate tax credit count of earned income. could heights, we cannot, certainly headed ac¬ on We could and for are we trouble bring down the surtaxes all along when the next financial storm the line. We have little fiscal lee¬ They will still be high, blows. but they would be more tolerable way any more, for the debt is and they \yould not then dampen very large and essential expendi¬ are incentive so much. Both steps tures very great. We can would materially aid savings, and manage successfully, however, if thus re-establish the sources of we use on governmental affairs venture capital, which in turn has the same good sense and prudence enabled us build to im¬ to and that takings. ahead. ♦Denotes Mr. and First National Bank UJ , Charlotte Corp. Toronto J , »!' Richmond St. Louis Harris, Hall & Co. Morgan Stanley & Co. Chicago Ohio State Journal Columbus Hollowell, Sulzberger & Co. Braun, Bosworth & Co. Philadelphia Emerson & H. L. Securities New York Chicago Cleveland Co. Exchange & Philadelphia Commission New York Co. Wertheim & Washington St. Louis Investment Bankers Assn. Globe-Democrat Merrill & Lynch, Pierce, Fenner & Beane - New Orleans ;' Chicago *■ ■?' ' ' Boston ' dealers • * '' V", * ' ' ; * »•"/ ' . * ^ ! MEMBERS New York Stock Exchange ^ Cleveland 14 Union Commerce Building Main 7071 Hartford Kidder, Peabody & Co, New York Yarnall & Co. Philadelphia Dominick New York Baltimore . New York Moseley & Cp. Drexel & Co. ; Philadelphia Philadelphia Newburger & Hano Carl M. Loeb, Rhoades & Co. New York with Frank E. Gernon New York "M. Geyer & Co.- /New York & Co. MUNICIPAL BONDS J New York Ira Haupt & Co. New York Boettcher & Co. NeW York First Boston Corporation; California Securities Wood, Grundy & Co. Mason-Hagan, Inc. G. H. Walker & Co. Chicago Philadelphia ' Alex. Brown & Sons • Grubbs, Scott & Co. Interstate New York Curb (Associate) Cleveland Stock Exchange Cleveland /Vv'-, Geo. B. Gibbons Chicago Chicago Pittsburgh Straus & Blosser ' San Antonio ■- * Chicago Tribune ♦Gernon, Frank E. Gernon, Helene ♦Geyer, George Gibbons, George B.,Jr. ♦Gimbernat, Jules, Jr. Gish, Carl K. " Glavin, Charles C. Glover, W. Wayne ♦Goldsmith, Bert. M. Gordon, Albert H. ♦Graf, R. J. * ♦Graham, Thomas Gregory Kidder, Peabody & Co. Curtiss, House & Company Meeting Maynard H. Murch & Co. &>White : ; Gates, Thomas S., Jr. Geis, Leonard B. New York & Bonner brokers lick them. Funk F. S. New York Chase National Bank Whiting, Weeks & Stubbs (Continued from page 3079) Domlnick & Dayton New York Co. (Continued from page 3085) We have great problems In Attendance at IBA Cooley & Co. San Francisco Company & Eastman, Dillon & Co. Mrs. , .: California Grant-Brownell Mason, Moran & Co. < Fulton, W. Yost Funk, Creston H. ♦Furlong, Thomas R. Gable, Charles J., Jr. Gaerste, J ohn L. '? Gallagher, Frank Gallagher, Herb't V.B. Gander, MacLean ' ♦Garland, Charles S. Gatchell, Earle First What remains is to step . out and ♦Harkness, Edw. M. Harkness, Robert B. apply to private under¬ we the greatest plants in the world, 'It may be well to give more specific encouragement to savings, by permitting a deduc¬ prove V New York < Bank Los EXCLUSIVELY ■ Angeles Ira Haupt & Co. New York Kidder, Peabody & Co. H. M. Byllesby & Co. New York Bankers Bond Co. Louisville Chicago ; Dependable Service In All Central Ohio Securities ,> , >' ' v* »• /■' ;fl ' * j -t "<v ^ „ - ' r '• - / 'A 'V ' ■ i "V .j ( .* , \ UTILITIES Straiialian,Harris & (ompany *.-< \ a x ,«i1' * \p , - < INDUSTRIALS ■ , INCORPORATED CHICAGO TOLEDO NEW YORK MUNICIPALS CLEVELAND CINCINNATI ;;";.■ ESTABLISHED 1922 VERdoEj<S? Company; we Members New York Stock Exchange Huntington Bank Building (not the from income tax. Statisticians na¬ expenditures means 1% to you on your income tax. You can reasonably ask yourselves and your Congressmen whether you want this or that item in the budget that much. bring The have Boll the Teletype CL 281 Columbus 16, Ohio COIJ.IN. .NOKTON & CO. ESTABLISHED r— 1920 ADams 7131 Members of sur¬ produce around $2^-$3 lions. V individually." With tional income at its present peak, each $620 millions of tax, for ex¬ insurance pre¬ cor¬ Thus $13 billions billions taxes the direct effect I have suggested reduc¬ toms, estate and gift taxes ducing $5-$6 billions. The $18.7 we can see of each class of expenditures upon RAILROADS tions and repeals of excises, which would leave that-group and cus¬ need come can { Suppose we can bring down the expenditures to $25 billions, a budget still far above levels in in employment then, we to the point sources, income the for' life recom¬ reductions up porate finally where It will take ac¬ tive business, full, employment and high national income to make the 30s. revenue in * high, and that, whether 1 surtax tion ample, ; tax money to acquire a business of his own. He may wonder in that con¬ nection ^ con¬ that result, it is difficult to ♦Grant, George H. Grant, Richard H., Jr. miums, or in the estate tax for Gray, Henry E. life insurance proceeds. We cer¬ ♦Green, Sheldon R. tainly need to get' back to the ♦Gregory,Wm. H., Jr. philosophy that it is good policy ♦Grimm, Willard T. to save, that it is smart to be ♦Grossman, Arthur S. thrifty. It is hard to establish Grubbs, M. M. habits of thrift or saving, when Gullick, Jonathan G. the tax system makes them almost Gundy, Charles L. impossible as a practical matter. ♦Hagan, John C., Jr. Billions are hard to understand, Hagemann, E. Kenneth Hall, Edward B. for you and I have never had any. '• For that reason, I have tried to Hall, Herbert S. translate the billions into terms ♦Hall, Marshall R. ♦Hallowell, Henry R. you can readily fathom — per¬ centage points on your income ♦Hammond, Wm. H. tax. The key to our whole fiscal Handyside, Douglas P. situation is expenditures. If Con¬ ♦Hanrahan, Edmond M. gress can bring expenditures down Hansel, Douglas R. to $20 or $25 billions, we can have substantial individual tax relief. Hanson, Murray ♦Happ, William A. If expenditures stay at anything like the present astronomical Hardy, Ford T. •"«' like of Because of the full of dividual - income expenditure (or another amount) were cut out.' New York Curb (Assoc.) New York Stock Exchange bil¬ com¬ Chicago Board of Trade ' Cleveland Stock Exchange „ puted that, to bring in the neces¬ sary total, the initial or normal rate of income tax would have to be about at 17% present. instead of 20% as To bring the point home to you, the initial income tax rate, applicable to all persons with incomes in emptions. will ent level about one of excess of the ex¬ (at our pres¬ national income) point for go up percentage each $620 millions of Federal STATE & MUNICIPAL SECURITIES BONDS ex¬ Toledo 4, Ohio come tax to all payers individual must be BRAUN, BOSWORTH & CO. in¬ 2% higher than it would be if. that New York 5, N. Y. Tel.: Adams 6131 and applicable 30 Pine Street 508-12 Madison Ave. penditures. Thus, if agricultural subsidies of $1,346 millions are to be retained, as in the 1947 budget, if the budget is to be bal¬ anced, the initial or standard rate LISTED and UNLISTED Long Distance: LD 71 Bell Teletype: TO 190 Tel. BOwling Green 9-2432 Bell Teletype: NY 1-2978 INCORPORATED TOLEDO — NEW YORK— Private DETROIT — CHICAGO — CINCINNATI Wire to: CHICAGO—DETROIT—NEW YORK—CLEVELAND ■ '••• , •■" ... THE COMMERCIAL 3082 Money Management andoverall Credit (Continued from page 3012) meeting, only to be caught nual in December by' your persuasive the primary job is the Our of the coun¬ credit administration try; and our objective must be to make credit policy serve the de¬ to & FINANCIAL Control Federal Reserve play our part I believe ■ over / past the went tionally and internationally. striking exam¬ transformation was the recognition, during the interwar period of the present century, that i thirty years the Nationally, I make the assump¬ the gold standard, in of a currency freely con¬ vertible into gold, has disappeared and is not likely to return. This there election an was and the voters seemed to express learned, of course,, that credit policy is not the sole determinant of economic health or sickness. The impatience with controls of var¬ ious kinds which they had borne high hopes of a with varying degrees of resigna¬ during the war. But money management or credit control is not a war baby;, it is the' product centrated on tion tions of specific treatment economic ills, which con¬ central bank opera¬ in the '20s, and which tended our to center around fiscal policies in disappointed of many years of growth and de¬ in the past, and, I believe, will be velopment; at least since the es¬ disappointed in the future. An in¬ tablishment of the Federal Re¬ tegration of all of our various System in 1914. It was made by the key position which money and credit occupy in our democratic society and our serve necessary capitalistic economy. And, by the same token, the powers of money must be istered so control credit and management limited and so admin¬ that hamper to not as society; not to destroy that econ¬ V/.;:' omy. • . Carlton ://■ / '30s, have been the economic and then, is programs necessary if we are to avoid total¬ itarianism, or State capitalism, or State socialism, we have to relate these programs to the social habits individual desires of millions of human beings without too de¬ and is an in¬ difficult task. suggests that humility should combined with hope if we, in compulsions./ It tailed tricate, complicated, It be M.Higbie Corporation It has been said, the Perhaps the most tion -that movements terms perverse I do; what in the past, that dressing not because I am fearful of might happen if we resumed specie , that recently, cause ple of this . not unmindful of the fact ; Gold Standard Has Disappeared Federal Reserve President. System has acquired the exper¬ mands of sustained high produc¬ Problem Not a "War Baby'* tion, high income, and high em¬ ience which should enable it to itself decently. And I I embark on this discussion of ployment, while preserving public acquit anchor that belief in the unique money management and credit faith in our currency and our We have / long-;- since Federal character of our System. control with some hesitation. I credit. am beyond this conception be¬ events forced them to do so; vaguely, in terms of restoration of an automatic gold standard — na¬ System,, are well. that Thursday, December 12, 1946, CHRONICLE fail to but payment; see because/ I the advantage of such capital1 might be that instead of re¬ of — /international balances they might accentuate unbalance^ This- did not conform with gold standard theory — but the "hot money" of the years between the did not respond to theory; it wars only way to insure the proper Fesumption;1 There is no- lack of responded to speculative; urges participation of the Federal Re¬ faith in our currency or our credit and political fears.; >■ \ :; System in any reordering of without domestic gold converti¬ World Concerned With oiir financial affairs, is to deprive bility,, and the restraints of such International Money Management the System of all taint of private convertibility are not needed to participation. The government, so insure wise administration of our ■Certainly since the end of the the argument runs, would be will¬ monetary affairs. In fact, if reim- first World War we have had ing to place full reliance in* the posed,. they would not guarantee more and more management of System's existing powers, or to such wisdom. This has been amply money in the international/ sense, grant it new powers, only if every demonstrated in the past. Restora¬ even though a return^to the gold vestige of private participation in tion of gold circulation within the standard was one of the early its management were removed. I country would seem to me to be goals of that period. The central know that this is what is happen¬ a step backward in the historical banks of the world,vunder the ing to central banks in other evolution of "money". ../.: / leadership of the Bank of England countries, and that it appears to / Internationally, the gold stand¬ and the Federal Reserve Bank of be a growing political philosophy New York, were in the ascendant ard still persists and performs a abroad. But so far as we are con¬ useful function, but it is not auto¬ during the decade following that cerned it seems to me to be a matic. And in so far as it ever was war, and they were the accepted misreading of the longer term fu¬ automatic, it, was'' at a particular instruments of money manage¬ ture and a miscalculation of the internationally. They \ still time and in a particular- set of ment policy which will best serve us economic circumstances. Except in had respect for the gold standard, now. Rather than seek powers by its earliest and most rudimentary but they thought it necessary and trying to make the Federal Re¬ form it was* a gold standard ap¬ desirable to supplement its work¬ serve System just another govern¬ plicable to the time and circum¬ ing. Sometimes they acted to al¬ ment agency, we should be able to stance of England's 19th century leviate seasonal strains, or tem¬ claim powers because we are a porary shortages of foreign ex-?. successful working example of position in the world. It rapidly became more of a sterling stand¬ change on the part of one or • government functioning im the ard than a gold standard, and it another of the countries of the economic field with the aid and flourished with London, as the world. Sometimes/.they acted to support of private business. Our acknowledged financial center of accelerate the effects of an inflow Experience in government-busi-1 the world, with Great Britain as or an outflow of gold, which was ness cooperation — government the great exporter of capital, and relatively easy because of the having the dominant voice as it < the great importer of raw mate¬ multiplied effect of the fractional should have in the field of mone- | / J. % < rials, and with the rest of the trad¬ reserve system. tary and credit policy—may be a' ing world largely revolving about Obviously they failed to restore signpost along the way to solution 1 the- center. In essence it was an either the pre-1914 gold standard of one of the major economic, adjustment between one economy or international monetary stabil¬ problems of the postwar years: and the rest of the world. ity. But we should not be too the relation between government &nd business in our whole econ¬ '/ Quite early, and more clearly as hasty in attributing that failure to men or to the semi-private char¬ it became necessary to cope with omy. of the institutions they simultaneous efforts of many na¬ acter What are these powers I am tions to adjust their economies served. They were pioneers, and talking about which the Federal during cyclical depressions, ele¬ gallant and courageous pioneers, Reserve System tries to exercise? ments of management crept into in the development of common in Toymen's language, and we are the gold standard even while it international economic policy through consultation and coopera¬ was still referred to as and con¬ Oil pretty much laymen in this tion. They were the legitimate sidered to be automatic. Central field, they are the powers of forerunners of world organiza¬ banks became more .and more serve - ! 1912 BUHL BUILDING DETROIT 26 i • management." Thai is a the "money CHARLES A. PARCELLS & CO. Members of Detroit Stock Exchange ' V,'. ) ' . ' ^ * 4 -Y-. "" ,/. "V '7 1 _ - /' // V../ ■ <■'> 1 I ' "4 . *7 " ' 't r Michigan Markets Listed and Unlisted Stocks of their powers and respon¬ sibilities. They said sensibilities of all those who deny working on that they were the lender of last re¬ interference with what they sort theory, but this in itself in¬ pall "natural economic laws." And "natural economic law" Tn. this terfered with the automatic work¬ case usually is thought of, if only I ing of the gold standard. And they any > ESTABLISHED 1919 V - ■. not so much failures of men institutions—they were fail¬ ures resulting from the tendency we have to place too much em^ and financial arrangements, on problems of particular coun¬ A world organization run; tries. and solely directly by national / governments will not Z; solve problem any better than did semi-public central banks, if Municipal and Corporate Securities DE-206 / \ " to were ual, Be" s«tem TeIe- DETROIT !26„ MICH. that institu¬ function, will do well to profit by their experience. Their failures enough on underlying eco-; nomic conditions and the individ- £ 639 PENOBSCOT BLDG. V'■ the v international tion/which is how beginning not Miller, Kenower & Company TELEPHONE as Monetary Fund; and phasis II — BONDS -# ill RAndolph 5625 such tions aware term which is likely to arouse have Building ii r'V"J t.V'/ 4 * "1 -i r/i - f A'r Mercier, McDowell 8 Dolphyn MEMBERS ; DETROIT Bell Teletype DE 475 STOCK subject of recently been the preparatory meetings, in London, and which will be continued dur¬ I DETROIT 26, MICH. ' Telephone Randolph 3262 the problem itself is misconceived. ] That is why the successful out¬ come of the negotiations on trade }. and economic arrangements which, RAndolph 3976 Ford the : the' ing the coming year, is tant, so essential, to the the EXCHANGE so impor¬ success of/ international financial organ-/ isms already created. International instability, and currency devaluations/ and exchange con¬ trols have been, most often, the re- v flection of basic disturbances in a; country's international position, or ; of international cyclical move-: ments of wide amplitude. States¬ men and economists could con-;demn currency devaluation or ex¬ change controls, as they con¬ monetary :/ ' , Corporate Bonds * , v-. and Stocks Specializing in Michigan 'J Listed and Unlisted Securities Investment Dealers and Underwriters MEMBERS DETROIT STOCK EXCHANGE^ 'X. demned war, but these phenomena persisted. It doesn't do much good to tell a primary producing. country, of small means, which still three bad har¬ which has had its ex-, ports drastically contracted be-/ cause of depression in a major in^ dustrial country, that it must avpid. exchange control or cur¬ rency devaluation because that has suffered two or Indianapolis Bond and Share Corporation BUHL BUILDING CA-5752 DETROIT 26, MICHIGAN DE-507 129 EAST MARKET ST. INDIANAPOLIS 6, IND. vests, would not be "cricket"—would "gold standard." / is true, of course, that there not be It or ^NumberCOMMERCIAL Volume.464 Jaas also been change nance stability the to ity. Monetary policies to /' classical ' medicine is also at •Z work. And if we reject the med■k icine from our. systems alto- mainte¬ of domestic economic stabil¬ be less and less are coming defined / -gether,- we may just drift on / from expedient to expedient and never get really fit again.. with reference to the state of the tional gold reserves and the ternational balance of na¬ in¬ •. payments, and /: Nationally and more in terms of domestic economic stability. It 4s the difficulty of more mestic stability think calmly decided by the review of amination ment security market.' v : ; the investiga¬ At the beginning of the recent tions of our existing banking and credit system which preceded the, World War it was decided that our expenditures for war pur¬ adoption of the Federal Reserve Act in 1913. How successful we poses should be financed at stable, have been in the administration not rising, rates of interest such as the pressing needs of previous of / the Act, and of the various amendments which have been wars had produced. To make this decision effective, a pattern of adopted, particularly the Banking for government; securities Acts of 1933 and 1935, may well rates be a matter of some difference of was established, with Federal Re¬ serve support. The almost in¬ opinion; But l know of no serious evitable consequence of the fixing body of opinion which seeks to abandon money management, as it of this pattern, which meant sup¬ has developed over the past thirty plying the commercial banks with whatever funds were necessary to years. The Federal Reserve Sys¬ tem has made a place for itself, maintain the pattern, was pretty as a part of our banking and constant pressure on the longer construction and. Development are setting out to help to.. solve. It . - considerable >. degree of of money interna* a. management , tionally. But it also requires a •recognition of the fact that the problem, fundamentally, is financial — it is a problem of duction and trade, of costs - not pro* and prices, and of the maintenance of « stable, growing economy in the principal countries of the world. What. we. need: to -retain from gold standard days, whether pure and automatic, or adulterated ■. the and the avail¬ over other countries,- and - means national experience, the ex¬ of the experience of our prob¬ lem today--the one which the In¬ ternational Monetary Fund and the .International, Bank for Re¬ time control ability of credit has been sub¬ stantial : relinquished, for the time being/ by obligations or re¬ sponsibilities which have been as¬ sumed in support of the govern¬ question of "money manage¬ ment" was thoroughly studied and with international balance which is the core of the exchange If the commercial banks have same will agree that us the reconciling do¬ and - prosperity ? domestically,I or of most prices, turities, credit machinery/ term rates/'Actualy, therefore, the war was wholly from the disciplines which fied: its services the been only semi-automatic, realization that international imposed sistent in we; is a cannot escape gold standard domestic action. Per¬ on unsound the fiscal national //The. which some of those . young disciples who followed but could mot al¬ of mind and .< Employment which allows the classical medi¬ . wrong/and turned sys- the debt in and are by public debt have'/become a part curve that the long end will tend to de¬ On cline* So much for loss of one the side this has relative fiscal/policy impor¬ and debt contrasted with as of means a is fixed, that that we doubtful our > the in-which monetary policy is to work or can be to transfer our work effec¬ of credit were domestic the and over durable depressionsr and in and the to the needs of a gether happy, but it is that they that we my opinion wandering perilously far from the are worth continuing— kind need them, at least until omy we something better has been devised. of enterprise private are should have .given a welcome to management practiced by central banks. In with (Continued, on page 3084) Cray, McFawn & Company MEMBER V'; DETROIT STOCK EXCHANGE % ■ v. Municipal and Corporate Securities UNDERWRITERS DISTRIBUTORS • Listed and Unlisted Trading Facilities 26, MXCHXGAH /;/ of itsj simplest terms, and Teletype: DE 540 — Chicago — Vifire To Cleveland ■— Toledo support of the our still Telephone: Cherry 6828 Pord Building- Hew York control the that means commerical banks, in large the part/ have the initiative in determining; ta tingulshed. be If bank; reserve created the or .ex-j commercial; Markets In sell government securities banks and not or is the market will /opinion, substantial. changes them at somewhere so not Michigan Securities absorb; the going near UNDERWRITERS and DISTRIBUTORS which a few years ago Dealers and Brokers Mc Donald - Moore & Co. this MEMBERS DETROIT STQCKEXCHANOE DETROIT we 26, MICHIGAN Listed and Unlisted Issues should: have, regarded as offer- . MUNICIPAL BONDS |ng McredUblepropaise of; a bet¬ ter scheme: of things. c ; / CORPORATION BONDS & STOCKS "I must npi oe misunderstood. X dp not suppose that the dassi- , - /'■'■/ . seR or. that ?we can depend -Listed and Unlisted ;Z:////Z/ZZZ // V;/-;;-^: cal medicine will work by: it- t Members PARTNERS on BRANCH OFFICES painful aidsvof, which exchange variation and overall WILLIAM MOORS ;V- « s. - import - - ^ y<.{ ' + GRAND- DON W. MILLER- HAROLD R. CHAPEL 1 - * RAPIDS, * Detroit Stock Michigan Trust Building * Phone 94336 MICHIGAN - Exchange DETROIT 26 GRAND RAFID5 2 ' it ,We/need .quicker and less Buhl ■ Teletype GR 184 Randolph 8992 Building - Teletype DE 7 FLINT, MICHIGAN control are the most important I, M.A. MANLEY & CO MEMBERS DETROIT STOCK EXCHANGE InvestmentSecurities Specializing in $:41 \ & ;'v' -u . Members Bank and Insurance Stocks New York Detroit BUHL BUILDING, DETROIT 26 Telephone—Randolph 1890 . . ^ New York Stock Exchange Stock Curb Associate Chicago Stock Exchange Exchange DETROIT ? Teletype—DE 92 econ¬ trying to preserve. I *.:•/ji ......,,iv:»v:.<•..>.../• Direct Private availability of credit. lit Ann Arbor our so controls to qualitative credit con¬ trols. We have two such now, the the cost of credit, /'Similarly credit availability the twin weapons money booms our enterprises to adapt their practices dynamic expand¬ ing economy. When you think of extending such controls into other control of credit used in the stock fields, however—and this would market and the control of con¬ be necessary if qualitative controls sumer credit. Our experience with are entirely to supplant quantita¬ these controls has not been alto¬ tive controls—you find yourself affections from quantitative credit DETROIT whether cost accentuate , control) meant has - greatly' reduced magnificent, objective approach I; interest and to it seems, with age-old poisons, v , / not we consumers' goods. These swings have tended tem, also incongruously mixed, - . are case of means government security market has as either of credit in the use stock market and in the mass dis¬ all maturities. If the short end of side^ it ipy substantial run¬ the ultimate are swings in the tribution supposed Economic control/dnd oil the other of a we the market, Our economy is peculiarly suscep¬ tible to the influence of wide far as they the masters in our own house. \ can be moderated by credit con¬ trols, it is a contribution to sta¬ Transfer from Quantitative to bility. The administration of these : Qualitative Credit Controls controls is possible without inter¬ One way out of the dilemma— fering too greatly with that inde¬ the loss of control over the cost pendence of decision which will and availability of credit—would permit individuals and business to involve/ deprived of their significance,; are banking and institutional the sur¬ government se¬ kinds they want war the rate of The and sour sally, is' circulating in otir . of sellers. In the'^tendency : of Interest/rates is the to come together at one figure fori tively. do its work* It shows how much modernist stuff, gone V our free cine to : out turities extent* to; which -area; , rates. came withput of prices, under steady downward pressure.. . increase Federal management, thoroughgoing proposals, advanced on behalf of the United States, expressly directed towards creating : a system . the monetary ^policy/ as and : of emphasized Keynes said: v.We have here sincere tremendous size tance /States proposals for consideration by the International Conference Trade and; now assets. free to shift their as but at declining and the available in stable rates of interest, We at least up of new ; prpbiemv So long as differences in maturity, faces us in the success¬ and the risks which longer ma-: obligations position as he was. In his last essay, which discussed the United at not the residual buyers. prinripal/ the of - . correctly interpret the mas¬ ter; who have not been as agile ways not funds, curities are where they were when we went in, but with the longer term rates Federal Debt management of money grows out of our* participation in World War II. It has been created by the financed we are with short-term rates still pegged national our ful ations, the late English economist, John Maynard Keynes,, has said it, has said it well, and has said it, perhaps, to the confusion of '/ during ■ The matter how much management you have. As in many other situ¬ on for have and deficits in no : not otherwise rendered ? existence. policies could which two / struggles monetary field, a country's current, balance of payments, will end up in international instability persistent and has forti¬ position/iby -performing : plus 3083 - in interest rates, affecting all ma¬ such as were formerly employed for purposes of mone¬ tary control, are now impractical. I deem them impractical because of their effect on the prices of public debt obligations, and there¬ fore on all those holding such ob¬ ligations, and their effect on the cost of public debt service. At the But in the. long run these exiV- pedients will work better and we shall need them less, if the shift of emphasis a in "money management" from the maintenance of international ex¬ A FINANCIAL CHRONICLE Jackson 3084 THE COMMERCIAL ft FINANCIAL CHRONICLE Thursday/Becember 12, 1946 termittent heed of Reserve funds, it is flying in the face of human and some ■ short-term rates of in¬ experience to expect increased terest have risen slightly. production per mkn hour. ' 1 r Money Management and Credit Control , requirements, of banks. I shall have to have new powers if (Continued from page 3083) we must still try to see we are to be held responsible for am not going to try to explain, we can do with quantitative credit control—for "money man¬ analyze or discuss these proposals. tion—it has done little to reduce controls. agement." The Board suggested Information concerning them has the volume of funds already cre¬ In current thinking the quan¬ that consideration might be given been sent to you and their discus¬ ated and in the hands of the pub¬ It is true that this is weak med¬ icine in terms of combating infla¬ reserve think what (1) to requiring banks to main¬ sion could form the content of one two expressions. The Board of tain a secondary reserve in the or more separate speeches. I can Governors of the Federal Reserve form of Treasury bills and certi¬ only say that I think they have of system in its 1945 annual report ficates indebtedness, which little relevance as far as meeting to the Congress suggested that the would, be superimposed on our present problems is concerned.-1 present powers of the Federal Re¬ present cash reserve system; (2) do not believe we can expect serve System, granted in very dif¬ consideration o f to the; control of long-term se¬ Congressional ferent circumstances, are inade¬ curity investments of commercial and action upon such fundamental quate to deal with present or pos¬ banks, and (3) to an increased au¬ changes in our banking system in titative approach has had at least , situations, and that we thority to change cash or primary the sible future near profitable to me, therefore, to concentrate on what we might do with our present powers and our present skill, com¬ bining our resources of power and DAVID A. NOVES & COMPANY • '■'/ ' ; : ... V • ' '• • :• , Stocks Bonds - 208 So. La Salle - V •* ' '■: ■ '■ „ V:' •', v • ,'/ ' Commodities Street, Chicago 4 STAte 0400 : Members New York Stock Exchange New York Curb Exchange (Assoc.) '.4.. Chicago Board of Trade Chicago Stock Exchange Chicago Mercantile Exchange Winnipeg Grain Exchange Branch Offices Chicago Union Station Board of Trade Building # INDIANAPOLIS, IND. 236 SO. CANAL ST. Monthly Stock Summary sent free request upon available to heard of no credit control which would ac¬ complish these purposes. So far as inflation is concerned, ours is es¬ sentially holding operation. a have executive authority and re¬ sponsibility. I think that it is pos¬ sible to do something with them as they stand. What we do need not be spectacular nor drastic. It has not been sufficiently recog¬ nized, perhaps, that the very size of the public debt and of the bank holdings of the public debt have made the money market much more sensitive to relatively mod¬ est action than was formerly the case. The fact is, of course, that we have been using the modest approach in debt and money man¬ agement—elimination of the pref¬ erential discount rate, retirement of Government debt out of Treas¬ ride we the suffer for sins. America's our na« world economy. If we exhibit a lack of responsibility; in our do-4 mestic economic affairs, we shall betray a world which is looking us for leadership, and which to Remedy in More Efficient . There is only one final and com¬ pelling and satisfying the present lack of answer balance to be¬ tween the supply of goods and ser¬ the supply of money, and to the present danger of our climbing another loop in the costskill with those which the Treas¬ price spiral. That is an increased ury uses in managing the public supply of goods and services grow¬ debt. Money management and ing out of increased production debt management, as distinguished per man hour—out of increased from fiscal policy which depends efficiency of men and machines. largely on Congressional action, That is the only way we can val¬ are today's Siamese twins of ef¬ idate the increases in costs which fective and usable power and in¬ have already taken place in our fluence in the hands of those who if of boom and bust; coaster We shall not be the only ones to the public. I have come. It is certainly the most dy¬ practical program of namic and significant factor in the Production It has seemed affected be roller lic, and nothing to increase the tional income represents perhaps supply of goods and services two-fifths of the world's total in¬ term future. Siamese Twins of Money Manage¬ ment and Debt Management Unfortunately, the whole world will vices and economic structure. only way we ther increase about can in is the fur¬ bring prevent prices, decline in a That a or prices, without the hardship and suffering of de¬ pression and unemployment. Re¬ sponsible management must know that this is the problem; that put¬ depends on us, in large part, for its own stability. Those who are concerned, with the direction of American business and American labor need to ponder this, not only because of its economic im¬ plications but because of its .in¬ ternational political implications. If to lead the world toward we are enduring peace, we cannot afford to dissipate our influence and weaken World our neighbors by economic irresponsibility. No one who lives, as we all do, in the of shadow should the forget atomic bomb, for one fact that instant, » . - This partial digression should make clear, I think, that I attrib¬ ute to money management only a very secondary role in meeting the major problems of today. It is important, howeyer, that it be free to work in the right direction. That is the significance of what - price increase might be called the next step iri the modest approach to restoring increase is no credit control—breaking out of solution. Responsible labor the straitjacket of the pattern of recognize that its own inter¬ rates, in which we voluntarily al4 ting into effect a to meet every wage real must ests, well as whole of as living—are same hour. bound standard in up the package with output per man - ourselves the interests of the lowed community—our Recognition must lead be to and tied fastened during the war. By I mean, that specifically, the defrost¬ ing of the presently frozen shortterm rates on Government secur¬ to balances, increases in accept¬ ities. I do not suggest this as an action, however, or little will be ance buying rates—and that so far urgent matter of the moment; this approach has been measur¬ accomplished. And action will re¬ ury Bear, Stearns CHICAGO actions other Co. & ably effective in the economic sit¬ quire consideration of our incen¬ have given uation in which it has been used. tives to investment and to work, time Aggressive bank bidding for long¬ and of the penalties for slackness NEW YORK er term Government has bonds been diminished, at least tempo¬ rarily, the pressure in production, whether of agement labor. Without or on re- man¬ ade¬ of such there are credit administration. But it seems a credit and if again to have we are We rial the cannot banks the be used; money determination how much; supply ference, in terms Chicago Stock Exchange J. Preston principal exchanges Offices of the Jay N. Whipple • Burlingham • James W. Marshall • William D. Kerr shift Augustus Knight ► ment securities, as year, or 246 S. County Road was 1 - Breakers Hotel MIAMI BEACH FT. LAUDERDALE Roney Plaza Hotel Broward Hotel facilities while there. invite connection is not you Listed and Unlisted Stocks and Bonds National Underwriters Your orders will be Established 1916 Members principal Stock Exchangee 10 South La Salle •—Fidelity Fund, Inc. Paul H .Davis & (kx quickly trans¬ • of Trade Bldg. Municipal Bonds repre¬ to make use-of our mitted by wire to your broker on a "give up" basis. CHICAGO money Street, Chicago ' NEW YORK 14 Wall Street CG 405 INDIANAPOLIS < CLEVELAND the case whether it Underwriters and Distributors we ex¬ from short to long Govern¬ THREE IN PALM Florida, further be may n FLORIDA If your regular brokerage of banks is motivated by a desire to Partners William T. Bacon, early this • indefi-* panded. And it makes little dif¬ Ernest F, Kartshorne sented in get of the pat¬ how much Federal Reserve credit New York Stock Exchange Members Bldg. c$n* supply, whether the action of the NEW YORK STOCK EXCHANGE 528 Ingraham a nitely leave with 14,000 commerr will MIAMI the to be able to and supplement of rates. tern Members • of worthy policy out of the straitjacket zcacjfo Biltmore Hotel certain; not tain ties in* cer ment, we must sooner or later Ga. Branch few struct!ve policy of debt manage¬ /35'Sou/A jCa§a//e Street Six problem. factors that the benefits to me that if we are P3aeon77Mt)opfG & , the move a are support end other giving us consider to name, Established 1923 are formance and without observable duced, the banks have .been in in- penalties for inferior performance, DANIEL F. RICE AND COMPANY other and And I recognize longer quate incentives for superior per¬ term rates of interest has been and us ROCKFORD rep- a#*www#- Volume 164 resents ; shift from a securities to has been the iTHE COMMERCIAL & FINANCIAL CHRONICLE .Number 4550 ♦Johnson, William A. Government In Attendance at IBA credits, as more recently. private case (Continued from page 3081) ,1 do not mean, of course, that so long as anything like the pres¬ Wm. P. Harper & Son & Co. ♦Harper, Dickinson C. ent situation exists, we should Sills, Minton & Co. abandon the short-term market to ♦Harris, David J, National City Bank its own devices. And I do not Harrison, James L. Trust Company of Georgia mean that we should relax our ♦Hatcher, Lloyd B. Chase National Bank ;s controls so far as to breach the Hatcher, Robert L. Harris Trust & Savings 2V2% rate on long-term Govern¬ Hawes, Hardin H. - / Bank ' ment securities. The former is Hawley, Shepard & Co. not necessary and the latter is.not ♦Hawley, Dudley A. Hazel wood, Charles F. E. H. Rollins & Sons desirable. But it is necessary and New York Times it is desirable that we regain a Heffernan, Paul - • J. C. Bradford & Co. Karman, Adrian J; New York V; New York New York ' CHICAGO * • J!j- unfrozen. are Nashville Securities Co. Hill, Richards & Co. Watting, Lerchen & Co. Detroit J. J. B. Hilliard & Son Louisville C. Ed gar Honnold Oklahoma Los • < CHICAGO V 3, ILLINOIS ;; Telephone ANDOVER 5700 Direct Private Wires Coast to Coast ; ; Angeles %;V,; DETROIT Drexel & Co. Evening News Buffalo F. P. Lang & Co. New York Scott, Horner & Mason /'* Stifel, Nicolaus & Co. Lynchburg Chemical Bank & Trust Co. New York KANSAS CITY MILWAUKEE INDIANAPOLIS ! St. Louis Calvin Bullock Chicago E. H. Rollins & Sons New York Public Utility ; John Nuveen & Co.. Chicago A. Webster Philadelphia Dougherty & Co. Chas. W. Scranton & Co. New Haven Ball, Burge & Kraus Lord, Abbett & Co. Wagenseller & Durst Glover & MacGregor White, Weld & Co. H. M, Byllesby & Co. Cleveland Industrial OrV'.y--: J " , Railroad Municipal : ■ Underwriters Chicago Los Angeles Bonds and Stocks Dealers Pittsburgh ; New York V " Distributors Chicago W. E. Hutton & Co. New York William R. Staats Co. . McLeod, Young, Weir, Inc. F. P. Lang & Co. Company Los Angeles New York ; > New York Milwaukee New York . Johnson, Lane, Space & Co. Johnson Savannah Pittsburgh 4 • II. M. Byllesby 135 South LaSalle The Philadelphia : 1' ' ^ Street, Chicago 3 Telephone State 8711 New York Company and INCORPORATED Teletype CG 273 : Pittsburgh : Minneapolis A. G. Becker & Co hold idle funds, from month to month, in INCORPORATED anticipation of a minor change in rates which might not be forth¬ ESTABLISHED coming. The market for interme¬ diate securities would be subject to - -•/; City Philadelphia refunding purposes just as it does now. Banks and other investors would hardly prefer to (ASSOCIATE) Charlottesville V Treasury would still be able to sell its short-term securities for ; EXCHANGE EXCHANGE 135 SOUTH LA SALLE STREET : , ■;i Nor should there be any reason for Treasury concern, if shortrates STOCK STOCK NEW YORK CURB EXCHANGE . Detroit " , term YORK New York Nashville & 3086) MEMBERS NEW Chicago R. H. Johnson & Co. page STILU S & BLOSSER San Francisco Cn. Peoples National Bank Milwaukee on ■ New York ' Co. Alison & Co. Grant-Brownwell & Co. New York New York Hickey Angeles Dayton . Mrs. if}: (Continued Co. Vilas & Bank New York New York & ' ; Mr. and o Nashville Johnson ♦Denotes ; Chicago Cleveland Francis I. ; New York Los World-Telegram Hickey Cleveland Commerce Union Bank Equitable Securities Corp. Brush, Slocumb & Co. F. S. Moseley & Co.: & Baltimore Hartford California Chicago Prescott New York : Cooley & Co. Skall, Joseph, Miller & Co. Kales, Davis New York & 1 E. R. Jones & Co. Kane, Arthur G. Hemphill, Noyes & Co. Freres Milwaukee -New York Chicago Illinois Company Lazard \ ; New York New York , Heller, James M. position in which we shall be able to apply the brakes to credit ex¬ ♦Hemenway, Charles F. ♦Hemphill, Clifford pansion when inflation threatens, even if we can only apply them Hendershot, Ralph Hendrix, W. R. ever so gently. That is why we should look forward to restoring Henshaw, Edward C. *Herzer, Karl P. some flexibility to the interest ♦Herzog, Edwin H. rate structure. It can be argued Hewitt, Charles L. that flexibility of interest rates in Hewitt, Max A. a supported market merely means ♦Hickey, MatthewJ.,Jr. changing the peg. But surely there Hickey, Thomas J. is a vast difference between sup¬ Higbie,N. Bradley, Jr.:, porting a market at your own dis¬ ♦Hildreth, Wm. S. : cretion, at rates which you can ♦Hill, Alberts. move up or down, and supporting *Hill, Carey S.J : • a market at fixed rates which you Hill, J. Gordon 1 „ have announced in advance your Hilliard, Edward H. determination to maintain. In the *Honnold, C. Edgar former case, all the advantages of initiative and uncertainty will be Hopkinson, Edw., Jr. Hornaday, Hilton working to make policy effective. Hornbostel, John F. In the latter case, betting against * Horner, Edwin B. the house is a sure thing. If it is Horning, Bert H. not known in advance exactly Horton, Leonard M. what we are going to do, we may ♦Houston, Joseph C. well find that very little pres¬ Howe, Burton A. £ sure will have sizable and bene¬ Howe, L. L. J. ficial results. If reserve funds can Howe, Paul D. be made a little less readily avail¬ Hoye, Wilbur G. able, and the certainty as to their ♦Hudson, Fred W. future availability in any amount ♦Hughes, Albert R. at a fixed price can be removed, ♦Hughes, William S, banks as lenders may be deterred ♦Hulme, Milton G, from inflationary lending, such as Hunt, E. Jansen :; lending to finance excessive in¬ Hunter, W. F, ' ventory accumulation or consumer Iglehart, J. A. W. spending. And banks as investors * Jardine, J. Earle, Jr. may be deterred from reaching Jarvis, W. H.R. out for the longer term bank el¬ Johnson, Harold E. igible bonds if the safety of pre¬ Johnson, Joseph T. miums is no longer guaranteed. ♦Johnson, R. H. Johnson, Thomas M. Treasury's Concern Regarding t„ Short Term Rates ^ ♦Johnson, Wilbur E» Jones, Elisha Riggs Jones, Graham ♦Joseph, Herman B. Seattle . Mason, Moran & Co. Wood; Gundy & Co. Smithy Barneyk & Cot Johnston, E. S. Johnston, W. Fenton Meeting 1893 greater uncertainty and there¬ banks, Corporate and Municipal Bonds attractive, especially to fore less but the Treasury's long- term market need not be affected. ^Historically j .there is no Investment Commercial Paper fixed re¬ u lationship between long and short ; Securities, Investment Stocks certainly so long as the federal Reserve System gives its rates, and support, the long-term rate can be NEW YORK CHICAGO kept where it is. Downward pres¬ sure on the long rate would be Investment relieved,, but Upward pressure, if it developed, Banking for over Fifty Years could be successfully resisted. Finally, the cost of ser¬ , vicing the;,debt need not be in- (Continued on page 3086) UNDERWRITERS AND DISTRIBUTORS INVESTMENT SECURITIES ACALLYN^COMPANY Incorporated Central Republic Company 209 SOUTH LA SALLE NEW YORK MILWAUKEE STREET, CHICAGO 90, ILL. CLEVELAND ? MINNEAPOLIS DENVER OMAHA DES 1 CHICAGO MOINES ' ST. LOUIS NEW YORK BOSTON > PHILADELPHIA ; J OMAHA '.-A. i*,;' . '"ff. Vyi. Members of Chicago Stock Exchange MILWAUKEE KANSAS CITY : FLINT : MINNEAPOLIS INDIANAPOLIS " THE COMMERCIAL & FINANCIAL CHRONICLE Boettcher & Co. ♦Lawrence, David F. In Attendance at iBA Meeting (Continued from page 3085) ... i •. * Lea, C. Russell • *;; v Reynolds & Co. v ♦Leach, Edmund C. Sterne, Leather, B. H. New York Times - Agee & Leach 1 J. Devine & Co. C. Coffin & Burr Honolulu New York; - New York ^ White, Weld & Co. yBacon, Whipple & Co. • Guaranty Trust Company 0 Union Securities Corp.i/>r~ New York ,-V Chicago ; New York New York Simonds & Co. Kinloch, Huger & Co. Mason, Moran & Co. / Philadelphia National Bank Vilas & Hickey ' • Mercantile-Commerce Bank Detroit Charleston • Chicago ^ ' Philadelphia . Montgomery Baker, New York St. Louis > San Antonio H. C. Speer & Sons Co. Chicago Metropolitan St. Louis Co. | St. Louis Rauscher, Pierce & Co. C. J. Devine & Otis & Co. • Howard, Labouisse, Friedrichs & Co. Laemmel, William G. ♦Lambing, Malcolm E. ♦Landis, O. D. Lanston, Aubrey G. Laud-Brown, Wells ^ New York Cleveland Co. ^ New Orleans , Chemical Bank & Trust Co. New York Peoples First National Bank Webber-Simpson & Co. First Boston Corporation Pittsburgh Bankers Trust Company New York Chicago New York .. Nashville : New York & Curtis ; - or W}emlers Chicago of (Silica ato Slock <Cxckany» 209 S. LA SALLE STREET : ' • CHICAGO 4 Teletype CG 146 Tel. Dearborn 5600 ♦McClure, Nathan D. ♦McCormick, D. Dean ♦McCurdy, Wallace M. McDonald, C.B. McElroy, David B. ♦McGrew, Edward D. McGuirk, William McKeon, John J. McLaughlin, Edw. M. ♦Denotes Mr. and with an be reduction in the a cost. Inasmuch average there would ; annual the as ser¬ major banks, or will be when they mature, this is not an impos^sible program! Refundings of Gov~ Toronto fyj ernment New York Saint Paul securities ; banking • system ■? within could the- ; well be New York made with shorter maturities and New York at "lower New York war-^we Buffalo through the banks with 2% bonds. Such - a ;programr of course, • during not need the to finance would seem to be the reverse of J fundings^«ome of the debt but,yio New York Atlanta do than - Pittsburgh Louisville rates present circumstances,, the only funding of debt y which has real meaning is the sale of securities to non-bank t investors, and retirei- . New York New York ly y.■! Philadelphia Lincoln ment of bank-held debt with the Martin, Burns & Corbett ' Milhous, Martin & McK night Chicago proceeds. That could Atlanta Salomon Bros. & Hutzler New York complished, so long as it is eco¬ nomically desirable, by stepping up sales of Savings Bonds faster * r Mason, Moran: & Co. Chicago Central Republic Cohipany G. H. Walker & Co. St. Louis y Los still be and further, and bv sales of Chicago JMaxweU, Marshall & Co; 2 Vz % bonds-r-with term Angeles removed—to ac¬ long- rollover institutional invest¬ Investment Corporation Norfolk McCabe, Hanifen & Co. Union National Bank .• Denver Pittsburgh y, • agement Kirkpatrick-Pettis Co. Harriman Ripley & Co. Kebbon, McCormick & Co. Thayer, Baker Co. Omaha the cost of servicing the debt, but Chicago Chicago what you get is worth what you Philadelphia McDonald & Co. Cleveland J. P. Morgan & Co. Inc. Northern Trust Co. 4 Such a modest approach to money and to support a complement¬ ary program just New York.,: ' as of debt management, .it has in the recent past. Since .early this. year • the. Treas¬ New York policy of using surplus" bal¬ ury Mrs page for it. pay Paine, Webber, Jackson on man¬ which, really increases , on New York . debt New York New Haven Heller^ Bruce & Co. tW kind <>f management would have to lean Chas. W. Scranton & Co. (Continued This is ors. : New York Kuhn, Loeb & Co. & Curtis ♦McMahon, Eugene G. refunded less than T held by the Milwaukee -; maturing part of these short securities are; ; Chicago • securities rate vice ' New York . May, W.Peyton McCabe, William E. ' McCague, Robert H. ♦McCloud, James F. -y Portland on 1V2 %. If all 'of these securities were y New York charge marketable < callable before the end of 1950, or New York of •' excluding bills, is about $1 b;llion, New York . William A. Fuller & Co. Government New York - i has been estimated billions $65 New York , Laurence M. Marks & Co* Marks, Laurence M. Markus, Norbert W. /•; Smith, Barney & Co. First Trust Company ; " ♦Martin, Bennett S. It that the annual interest ■ ♦Martin, George L. ill; ♦Martin, Wayne Marx,;Ii. Eugene I ♦Mason, Fred. H. ♦Mason, Robert Matthews, Robert H. ♦Maxwell, Frank O. term rates. -y-U'K New YoricT;" EstabroOk & Lewis, Robert J. Liebenf rost, Conrad H. Stern, Lauer & Co. Limbert, Lee M. '" Blyth & Co.v.';;.:. Lincoln, Mary R. Investment Bankers Assn." Lind, Herman L. : Camp &. Co. Chase National Bank ♦Linen, John S.v : !v Little, Alden H. j Investment Bankers Assn. Loewi, J. Victor ,-^/^': Loewi & Co. *Lofft, Hubert W. Wood, Gundy & Co. R, S. Dickson & Co. Loftus,E.J. . Loomis, Charles H. .: r First National Bank ♦Low, V. Theodore Bear, Stearns & Co. Laidlaw & Co, ■ Lucke, Frank L. Ludin, Joseph Dillon, Read & Co. t Hamlin Lunt, Samuel D. &vLunt:::! ♦Lynch, Thomas, 3rd Moore, Leonard & Lynch ♦Lyons, W. L., Jr. W. L. Lyons & Co. Dominick & Dominick Macdonald, Ranald H. Clement A. Evans & Co. ♦Mallory, Waldo W. Marckwald, Andrew K. Discount Corporation h (Continued from page 3085) • by a rise in the shortest creased Or ( : y New V , y<$'^ nd Credit Control .•v/* New York J. C. Bradford & Co. Ledyard, Q. R. • -1 •-> Lee, James J. s / j Lee Higginson Corporation! Leeds, Donald D. , .V v Bartow Leeds Co. ' Leedy, Loomis C. ' <'' „ Leedy, Wheeler & Co. ♦Legg, John C., 3rd Mackubin, Legg & Co. Lemkau, Hudson B, Morgan, Stanley ,8c Co. few LeVind, George Blytn & Co. Lewis, David J., Paine, Webber, Jackson J, >•.«»»* Money Management, V New York ,.j ' , Co..V Chicago' Kebbon; McCormick & Dean Witter & Co. ♦Kebbon, Richard A. ♦Kellett, Richard W. Kennedy, Frank T. Kennedy, Walter V. Kernan, Francis Kerr, William Di • Kiendl, Arthur H. ♦King, Joseph H. King, Thomas J. Kinloch, B. B. ♦Klute, Roy H. Kneass, George B. Knies, Arthur C. Knight, Newell S. ♦Kocurek, A. J. Kohler, B. M. Krebs, Festus J. > '" Kreitler, Carl J. Kruse, John A. Labouisse, John Denver- \ * ,1;; ' , to ances 3087); retire outstanding debt, held largely by the; Federal serve rBahks ^epd the commercial' banks, /has subjected the reserve position of member banks to mod¬ erate pressure at : Company Snxs, Minton COtamtcr ^mtrittes Cnmpattit Treasury from its INCORPORATED withdrawals funds of loan account at the war banks,, to redeem securities 209 SOUTH LA SALLE STREET CHICAGO 4 Municipal, County and School Bonds eral Reserve Banks. Reserve funds were * temporarily taken out of the market and this limited, to extent, the ability tion Phone the Teletype CG 540 Randolph 3900' of banks or to "some the inclina¬ their expand loans and investments, at least in CHICAGO 3 39 South La Salle Street ma¬ turing in the portfolios of the Fed¬ Tele. CG 864 Dearborn 1431 frequent inter<- yals.; This has .been -the result of fringe of areas credit. The directly disposed of program also $23 billions of Treasury ^deposits which; if spent for other purposes, would have increased by that ampunt the already large supply We have adequate capital, CARTER H. CORBREY & CO. offjnqioney;fn .the .bands ,of the public, WHOLESALE DISTRIBUTORS experienced personnel and contacts in all End of Short-Term FOR This ment UNDERWRITERS important centers. Refunding phase of the debt retire¬ will program PACIFIC COAST MIDDLEWEST tibn of $3,261 millions of notes SECONDARY DISTRIBUTION MARKET maturing, balances in ury growing sale ACTIVE TRADING HICKEY MARKETS on of Treasury| Dec. 15, Treas-t war of out ai| redempi end this month. With the We solicit your inquiries. to come . the Government loan account tremendous securities in the Victory ago Will have been, largely elim4 Drive Loan year a ihated. Hereafter, reduction in thq & COMPANY, INC. total Salle Street, FIELD BUILDING,CHICAGO RANDOLPH 8800 • 1234-5 TELETYPE Chicago 3, III. Teletype CG 99 Telephone STATE 6502 Federal primarily rent income ments. TRADING GENERAL SPECIALISTS MARKET IN SECURITIES : : V BRANCH OFFICE 650 South Spring While will an excess over the cash effect depend of cur4 disburse-^ of retirement thus far has been Street, Los Angeles S4r Calif. Telephone Michigan 4181 debt upon ^ Teletype LA 255 ly anti-inflationary, debt ,mild¬ further re¬ demptions of bank-held securities, (Continued On page 3087) Volume ' - Number 4550- 164 - ■ : THE COMMERCIAL & FINANCIAL CHRONICLE / j - . n 1 ■ i - i / ...... Parish, Henry, 2nd .Parker, Charles S., jr.1 (Continued from page 3086) f ♦McMillan, John S. V(Continued from page 3086) Vrj 1C If financed by an excess of tax! ♦McNabb, Duncan J. '■€ McNulty, James J. • ^ Teceipts over Government dis-i ; Mead; Robert G. ;bursements, will be actively ;de-| ;flationary. Money will be taken i from individuals and corporations ♦Mead, W: Carroll •and used to extinguish bank cred-; ♦Means, J* ;'• Merrill, Charles B. fit, 'thus reversing the wartime, Metzner, Russell H. ,f •process of credit creation. 11 A similar effect can be obtained ♦Meyer, Louis,. Jr. ♦Meyer, Maurice, Jr. by net sales of Government secur-; ♦Mikesell, Robert S. ities to non-bank investors, ~ the ■ used being proceeds to Miller, J ames K. se-j V •' to bank from . . , . Neuhaus, Joseph R. 'conditions. Right . , violent; Newhard, Chapin S. a more no f: ♦Nuveen, John, Jr. "our financial affairs. I have outlined modest approach a O'Brien, George E. '■} Olderman, Russell J. to the restoration of credit control. There mod-! to me it .timidity with respect to this approach, hut it seems be the best approach avail¬ Owen, Ralph Oxley, A.E. C. ♦Paidar, Leonard J. Chicago ' ; ; Atlanta " ; ; ■ Merrill, Turben & Co; Cleveland Central National Bank Cleveland § Los Stern, Frqmk & Meyer Hirsch & Co. ' Securities Angeles Toledo / Seattle ; 'i. Montgomery Galveston Baltimore; Mackubin; Legg & Co. ,Co. Baltimore .Frank B. Cahn & Atlanta ■ ! Chicago f A. B. Morrison & Co. Miami Thomson & McKinnon New York Peters, Writer & Christensen Denver ♦Petersen, Reno H. ¬ Peterson, E. Norman ♦Pfeffer, D. K. ♦Phillips, Clare N. Phillips, Edward J. Phillips, Samuel K. Pierce, Shelly Pigott, James M. Pleasants, Aaron W. ♦Pohlhaus, Walter C. Boston New York . New York Illinois Company Chicago Equitable Securties Corp. National City Bank Wesley Hall & Co. Samuel K. Phillips & Co. Samuel K. Phillips & Co. New York Philadelphia Journal of Commerce New York New York San Diego Philadelphia Central Republic Company Chicago International Trust Co." " Denver Baltimore Mackubin, Legg & Co. Denotes Mr. and Mrs. (Continued V on 3088) y page ; ' / Boston W. H. Morton & Co, New York R. H. Mouiton & Co. Los Angeles Chicago Corporation ; ,, StXouis Co. , • ■Chicago Mullaney, Ross & Co. A. «E. Masten & Co. Pittsburgh ■Reynolds >& Co. j Stern, Lauer & Co, New York First Securities Company Chicago . Philadelphia iKidder, Peabody -& Co. New York Neuhaus & Co. Houston & Chicago Chicago Pittsburgh : New York 'Hemphill, Noyes & Co. 'Preston, Moss & Co. Riter Hornblower & Weeks . Northern Trust Company American National Nashville Philadelphia 1 Robinson-Humphrey Co. 'Stix & Chicago Cumberland Securities Corp. Van Alstyne, Noel & Co. . * & " Weeks ?First Boston - Chicago " A. G, Becker & Co. ♦Payne, Carr ♦Pearsall, Gilbert B. ♦Perrigo, Charles R. ♦Pepper, Cecil B. Peters, Gerald P. . Herald-Tribune , New York Thornton, Mohr & Co. Rotan, Mpsle & Moreland Glore, Forgan & Co. Kay, Richards & Co. Parker Corporation ; Philadelphia Corp. Pacific Northwest Co. Hornblower S New York First National Bank $$ree& Daytona Beach St. JLouis / , Cleveland ' Bank - Nashville * Members New York Co. Wan Alstyne, Noel & Co. New York Collier, Norris & Quinlan Wisconsin Company Nusloch; Baudeam &iSmith > John Nuveen & - Co.1' !, Montreal S. R. Livingstone & Co. Field, Richards & Co. The- Bond ♦Otis, C. Barron opposition to, disbelief an; and Owen, I. D. ; "is \ Baltimore Mead, Miller & Co. ; ' Georgia Hayden, Miller: & Co. • y • ! Newhard, Cook & Co. : ; v Chicago • . Trust Company of T. Nelson O'Rourke, Inc. Newby, Mrs. Betty A. faced with now, of labor troubles, we. Newton# Arthur :M. ; ^ than stand fast: Nielson, Einer Nix, Allen J, ^Nevertheless, problems of money ♦Noel,'Richard C,;, management and debt manage- Norris,.H. B. unent should have our considera-v North, Ludlow F. i Hion as we enter a new phase in Nusloch, George H. do ' . Securities Corporation: . resurgence can Stone & Webster Dominion - V; V' non-bank Miller, Lewis Minor,: Stanley N. investors would also extinguish Mohr, Sidney J., Jr. fbank credit and in addition would ♦Moreland, J. Marvin ,provide an outlet for accumula-! ♦Morgan, C. Gerard, Jr. ■tions of ; funds which; otherwise * Morgan, Shirley C. i "yvould have to seek employment ♦Morris, George L. ..elsewhere, quite possibly with in¬ Morris, Joseph L. flationary effects. So long as in¬ ♦Morris, Pat G. < flation, or the threat of inflation* j Morrison, A. B. is our adversary, this aspect of inMorse, Charles L., Jr. icreased sales of Savings Bonds to Moss, James W. individuals, and possible sales of ♦Morton, William H. Jong-term restricted ".bonds to 'in-; ♦Mouiton, Francis stitutional investors, should not Mudge; Louis G. ;be overlooked. If we should enter Muench, Max. S. ;a Afcflaticnary period, of icourse, I Mullaney,;Paul L, ■:M reversal of these public debt op-j Mullins; Frederic P. orations would probably be appro-* Murphy,; John A. ^ tpriate 'and quite readily attainNaumburgjCarl T. ;able. 'Debt management as well tas Nay, LestonB. Federal Reserve, policy must, he ♦Nelson, Edward "responsive to .changing economic curities 5 Stranahan, Harris & Co. : E. W. & R. C. Miller & Co. Miller, E. W. off pay bank-held debt. Such shifts of Detroit ■ , Ames, Emericn & Co. New York Co. Parker, E. Cummings ♦Parker, Nathan K. Parker, William A. Parsons, James O. Patton, Francis F. . St. Louis Dempsey-Tegeler & Co. Carlton M. Higbie Corp. : Co., New York Carl M. Loeb, Rhoades & Continental Bank & Trust And Credit Conlroi ,3087 ■ i , New York Stock Exchange Chicago Stock Exchange Milwaukee New Orleans Chicago Detroit „ Cleveland New York Buyer Alii son-W illiamis V Company Minneapolis Equitable "Securities Corp. Nashville Dominion Securities Corp. New Yorkf Goodbody & Co. Chicago Brokers and Dealers in . _' ; may us in 'the circumstances in we find ourselves. For the able to which In ves vestment tm en t Securities K -v. lopger term .we may need new. •methods t or new powers. J am concerned that we do not get "just seeking of habit .the Underwriters and Distributors oj onlyj into, one ifi r' ■ ',l" ' • J !i'1 "<;-V K Since 1924 MUNICIPAL, COUNTY AND SCHOOL BONDS power" until we have ,pow-: more >s,<, FOR 60 YEARS " beyond our wisdom and our ers " ^ : n- J- Jv 1 's;yV;. My talk has been overlorig and ''the subject probably more inter-i Resting to ,me than to VI am itell you what is most on my sup-| ' me close on renewed land Direct Wires to our Correspondents 135 South La Salle Street, Chicago 3 EASTMAN, BILLON & CO. Members New York Stock TMep^rte "Randolph 0820 BAKER, Exchange SIMONDS & Members Detroit Stock CO. Exchange recently ioc- warmed which Teletype CGO 917-918 THE' HELD BUILDING competence. \ a more general :note;! ; An ^ incident curred Chicago 3, III. Telephone State 4151 some ' Let . H. C. Speer & Sons Company mindi }in the afield irr which I .am iposed to have JNC* 'Established JL885 120 Scftith La Salle Street, For this you. but I thought I must sorry, fit Tracy Rogers f heart my faith my this in country of ours, and the demo- capitalism which it spon- •cratic i'sors before the world. Last August; 'and September# 48 Estonian .small boats to breathe the air of 'freedom ; Shillinglaw, Bolger & Co "order they were saved from .many land .still •its STATE AND MUNICIPAL BONDS y j r tragic ^ K v !v 1''4 4 1 f» . r . 'l ' 'r t >j \* for mistakes may!. consequences world. the But for us we UNDERWRITERS and DISTRIBUTORS THE NORTHERN INVESTMENT SECURITIES TRUST COMPANY are pressing forward towardVthej we set up for ourselves when; country was settled and when! goals >this GOVERNMENT mistakes . in the ordering , of affairs. These ;have : " de-j 'portation. This to me is a sign and ■■■■% portent. We may be . making ; rour STATES Presidential: By here. UNITED refu-j crossed the Atlantic in three; gees political institutions were1 founded.. Not until Chicago people begin; F RANK L IN 7 0 70 i -BELL S YS T E M T EL E T Y pi — CG. 3 6 8 taking to the sea in small boats,' • ito get States away and from the into countries United lare '• in the ascendant, V- •-.••V despair. -v; {•:■ --WW t• need we • , i r"v/?'• VVd-X.I SOUTH LA SALLR STREET, CHICAGO 3 ; NEW YORK where other economic and social systems IV 120 5 Telephone State 5850 Teletype CG 1070 HANOVER 2.1572 • CORRESPONDENT BRQAD BELL ,STREET^ » SYSTEM TELETYPE-NY. . 1-853 THE COMMERCIAL & FINANCIAL CHRONICLE 3088 Thursday, December 12, 1046 Attendance at IBA Meeting (Continued from (Continued from page 3087) Pontius,Miller. H Poole," Monroe V. Popper, Elvin K. Porter, Sylyia F. ♦Postlethwaite, J. Rus, ♦Potter; A. C. Potter, Edward Power, John F. Powers,* Lester; ♦Prankard, Harry I. Preseott, John A. Pressprich, Reg. W., Jr. .♦Price, William J. Prosser, Malcolm S,. Pryor, Earl Quigg, James E. ^ Geo. ;B. Co.' St. Commerce Union New York : , Kansas Snider Co. -ftX [ City New1 YOrk \ Milwaukee j Paine, Webber, Jackson Curtis . Chicago . i . Chronicle } - Goodbody & Co. *Reuter, F. Brian ; Revits, Samuel Mellon National Bank • ! * C. J. Devine & Co. . [ * Denotes Mr. and Mrs. ' j ! New York - s | j j i r New York } : A , who have, found their power action in labor Simply changing the policy correct that lopsided picture them. to will not overnight change our labor relations in the United States from their present chaotic state to of harmony and stability. The changes must be' reflected in hun¬ dreds, of thousands of individual negotiations before that can happen. • • Principles of a New National Labor Policy There three, 'principles Which. I believe should govern ,Us v are try, to formulate a hew na¬ tional labor relations policy. The first of these is that, all disputes between employers and employees be settled through possible insofar free • as: is Spring St. Angeles 13, INVESTMENT groups courts collective on disputes coming be¬ the basis of their in¬ as to what is right and fair. Our judges apply a general law defining the rights and privileges and responsibilities of all citizens to a particular dis¬ pute. That is basically what we mean by equal justice under law. If that concept over relations, then we must first define the jur¬ isdiction of these special labor courts. That means defining in the law what are the proper is¬ sues for ; collective bargaining. Obviously, wages,; h o u r s and working conditions come into that we into carry the field ' SECURITIES 1' ; : : decisions to the arbitrary judg¬ ment of individual men and would rave to write the kind of statute I have outlined. When Publie Interest Is : Paraaiount • The "second principle which 1 believe should govern in the de¬ velopment of a cy is. that the national polGovern--".: ment's intervention in labor-mannew Federal „ • agement relations. shbuld ^ occur "! only when the rights' of individ¬ books? How about uals mand all that union's de¬ a it lhave observers at meetings, of the board of di¬ rectors? How about mands that foremen union de¬ be required defined in law are in¬ where the; public inter-.. v est in the dispute ; is; considered, " ] paramount to the private rights and interests of the contending as volved or . strike preserved. / tive; bargaining as ' principle of our national policy and our major means of settling disputes, then this second prin¬ ciple follows inevitably. We can¬ not have free collective bargain-* ing if the Federal or state govern¬ ment is going to butt In any time it feels like it, or any time one of the two parties believes that it" can gain some advantage by such an procedures for peaceful Management Conference last win¬ ter wrestled with this problem for several weeks and reach any was unable to agreement. But even if the law what could define in we are proper issues for collective bargaining and thereby within the jurisdiction of these courts, we would have to go still further and set up in the law gen¬ eral standards to guide our judges. We would have .to define what is fair wage, what are fair working hours and working conditions, what are fair vacation schedules, a sick leave, cetera. et - senior it y rules, Only by establishing such standards in the law and de¬ so defined in the law. If v we to adopt' free collect the primary, are . c . intervention. intervention The in Government's situations rights of individuals are; ; where involved should come primarily, through an appeal to the courts by the indi¬ viduals concerned. tion The interven¬ administrative agencies' should occur only when it is clear that under the law the public in¬ by .. terest in the settlement of the dis¬ pute has become paramount to the private rights and interests of both parties. ^ ; • ■ The third and which I believe final principle; should apply we in this field is the liberal concept of equal justice and responsibil¬ ity under the law for all individ¬ uals and groups, which underlies our whole Constitution and form; of government. There will be opposition to the adoption of this principle to na¬ tional labor relations policy* There are people who believe quite sincerely that simply be¬ cause of the employer-employee relationship and the advantage which the employer normally hag in that relationship, the govern-* ment must be in effect a partisan on the side of employees and their; organizations in order -to .bring;, about substantial equality of bar^, gaining power.; That has been the theory of our national labor, rela¬ tions policy under the New Deal Administration in practice if not in theory. * r"I \ WEBBER-SIMPSOX & CO. fj; CHTCAGO 3 a suggestion, compulsory adjudication be applied only in dis¬ putes where the; public interest; becomes paramount to the private interests and; rights of the two parties. But that field is so broad ;oday that we still could not leave parties and is 135 SOUTH LA SALLE STREET v policy. There is should category; But how. about a union's demands to see the company's Welsh, Davis and Company r ;ions that of labor disputes between individuals; fining the jurisdiction of such On the face of it, such a posi¬ courts could we adopt this concept tion makes a lot of sense. Rut of judicial decision in labor dis¬ .those who advocate it must con-r putes and preserve our concept of sider its full implications. Simply equal justice Under law; which is to set up a system of labor courts vital to a free society, empowered to settle disputes be¬ The fact is that there is no gen¬ tween employers and employees eral agreement as to proper issues by decisions which will be bind¬ for collective bargaining or the ing on both parties and to prohibit standards to apply in determining strikes or lockouts will not be what are fair wages, hours and enough. Individual judges decid¬ working conditions. In the absence ing disputes on the sole basis of of r such general agreement, the their own judgment of what is development of legislation along right and fair is not our concept this line would require several of equal justice under law. It is years at least. Frankly, 1 do not simply one group of men render¬ think we have time to adopt this Tele. LA 50 Tele. CG 900 , our bargaining, with the right of the to join the union? Are they proper employees to strike and the right issues in collective bargaining? of the employer to try to beat the You will recall that the Labor- barbaric and uncivilized method, and that it is high time we should ' Los judges of do hot decide dividual-judgment settlement just as we settle most 510 So. of men. The fore them develop Chicago 3, HI. putes between two other many hew legal responsibilities and duties have been imposed on increasing demand in some sections of public opinion today that we abandon this prin¬ ciple of free collective bargaining as our primary method of settling disputes in favor of some kind of compulsory adjudication or arbi¬ tration of labor disputes. Those who hold this view point out that settling these disputes by eco¬ nomic warfare, in which all parr ties concerned and the general public almost inevitably lose, is a Henke 135 So. La Salle St. ing arbitrary decisions in the dis-< approach to national labor rela- disputes seriously curtailed while There is Swift, of freedom should ^ (Continued on page 3091) ' . < Pittsburgh Zf-% Clark, Dodge &. Co, fRex, William M. ; i New, York 1 1 us we New York ] Reitenbaugh, John S. i . Cleveland '. ' < ers, and i ■ Maynard H. Murch & Co. Commercial & Financial 1 Reid, Frank B.; Reilly, F. Vincent j Seattle National Bank 3014)1 one i,; Baltimore Sons Cleveland Quigley & Co. New York Lehman Brothers. -. • ■ RausCher, Pierce & Co.? ~ Baltimore Baker, Watts & Co.:- ' r Paine, Webber, Jackson ; . NewYork "Curtis Quigley, J. L. Ratcliffe, Myron F. ♦Rauscher, John ♦Redwood, John, Jr. Reed, Stuart R. 1 ' Company Milwaukee New York New York R. W. Pressprich &,Co, Brown & ^ ; ' ; Lord, Abbett & Co.' Preseott, Wright, v; ' Nashville Bank page has been the reverse for employ¬ . ;NewYorfc^;(;;5i:;] Sons Eastman, Dillon & Co. Dominick & Dominick Seattle First Louis San Francisco ; ] First California Company. Alex. Brown & i ;! New York New York Post Alex. k;:;' New York Gibbons & Co, I. M. Simon & & . New York i F. Eberstadt & Co. Investment Securities . '11 I 208 South La Salle Street j v..* ir Cinwmoo r: - • ■' The fallacy of this, position. isi that it overlooks the fundamental nature of government in a free so¬ In order to function, gov'? v ernment; power, must always be, superior-to the powbr of-any pri¬ vate or minority interest in so-* ciety. The current challenge by the United Mine Workers of the ciety. § . " ■THEMIS^pNSlNCQMlRANY'' vc: Member . ' TelephoneAndover 1811 Teletype CO 1268 '■"•'■{■ of Chicago Stock Exchange DALY TELEPHONE TELETYPE MILW. \... 0525 , ^uiiiHiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiitiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiuim 291 law of the land and an order a court Federal is essentially cif a challenge by a minority group ,of the sovereign power of govern¬ ment. No government which . wants ☆ mit; such Underwriters and Distributors government ■ O S'H k b's'H1 a oly the ' r ' ■>' ' r " • V ' ' Milwaukee, Wis* 7f2 NORTH WATER STREET • • v ' "*• •.< -• use of force and gov¬ that tremendous power government on the side of one group in the collective bargaining process makes a complete mock¬ ery of free collective bargaining. In order to bargain freely, there must be reasonable equaMfy_°£ power jQin both sides of jibe table. If government is to throw its treTo align of , W A U S A U on ernment power must be superior < to the power of any private inter¬ est in society. i Investments Specialists in Securities of Wisconsin Corporations I S O N a to govern can per-, challenge to succeed. Government must have a monop¬ of Investment Securities "Branch Offices: "M A D remain to with the power *• '• * ** ' r MARQUETTE 4084 wmmmmm ■PH fifMBMMCitWi*4»kW*JurtWSW*iwWVfty tW«tt>«cU Avmall'?«.'% * < iVolume 164 Number>4550" I ZJZ " mendous • power — the on unions, then there, is lective-bargaining: no ' side of requisite for a good media¬ two or more employers in the parties have con¬ same industry, a possible solution fidence in his complete impartial¬ which nevertheless presents many ity; The Senate r version of the technical and legal problems; and, tor is that both government forgets / its : liberal iqnction of adjudicating the rights and interests of; private .parties and groups on the basis of equal justice under law and becomes a partisan of a particular group or Case bill gaining as the primary method of settling labor disputes, we can¬ not accept this theory that, gov¬ ernment must be partisan of the a supposedly weaker group in col¬ lective bargaining. /.This does not mean ithatv government cannot > step in to check the arbitrary use of power by either employers or Unions in such ways as to impair equal bargaining. In the NorrisLaGuardia Act, Congress out¬ lawed the so-called "yellow dog" contract,' which was such, a mis¬ use of : employer power..! In the National Labor Relations Act, we protected, by:: law the individual employee's; right to organize and bargain collectively through: rep-' jresentatives of his own choosing, free of Coercion or interference by his employer.* That; is a'n: entirely different thing from' having the , government, line of one- the side to;/ the..' collective party up onr. bargaining process. That was sim¬ recognition that.the individ¬ ual employee, unless he be very ply a exceptional, is often at a disad¬ vantage in bargaining with his (employer,- but that when he bands of Federal media¬ . the ferred it. to or eral society and in collective bar-; session of five members with Conciliation Service trans¬ have had ;/>:£' •// 1,., ././/.> t£ :So. if we believe in a free lib¬ last tion board evitably toward dictatorship and eventual liquidation Of the rights and • groups. ■;*•'. 'i: the independent an groups in society, it is headed in¬ of ; all /individuals in Congress would have 'established _ . That : board power; to no would issue orders decisions but would have been exclusively mediation agency. a In order to give such a board a to function, -we should - chance provide 'that: where /the moves in on a. motion own board dispute either by its the at request of parties, both employ¬ er and employee should maintain the status quo for a specified pe¬ of one or the riod of time—either 30 or 60 days. Since the board would be directed to intervene only ih h disputes stoppage would substan¬ tially/interrupt interstate com¬ merce, such a limitation or the right to strike or lockout is tho¬ roughly justified under our sec¬ ond principle of government in¬ where a tervention when the public inter¬ est becomes paramount to the pri¬ vate rights ; Our .second problem- is what to do about industry-wide bargain¬ ing and shutdowns.:. The current together : with" his /fellow ^em¬ ployees that disparity in power is lessened, /if not /'eliminated com¬ pletely^-/^: Increased Power of Unions Since for 15 /> or 20 years our pol¬ icy has been increasing the of unions while at the power so parties to as tions back ; oh individual an ployer basis. ; em¬ It is my own conviction that the problem has not been studied suf¬ ficiently to produce the best solu¬ Therefore, I believe an intensive study of industry¬ wide bargaining and shutdowns tion possible. should be undertaken in January by the new Congress before try to draft legislation. we !' The problem of stoppages - in electric, gas and water utilities is in nation-wide can¬ shut¬ downs in coal, oil, steel, transpor¬ tation or communications which quickly, not only affect millions of. people adversely but can strangle the/whole national can, very Our problem is how to economy. rate-fixing is done almost en¬ tirely by the states, I believe it be sounder policy for the states • to take - the V initiative ' in solving this problem than for the a new field. /; A third new / problem in Jean C. Witter ; Federal employers and unions is neither practical nor desirable. A rigid - application of- the /Anti- STOCKS—BONDS—GRAIN - / writing a is that - of COMMERCIAL PAPER Members > t .// New York Stock Exchange MINNEAPOLIS and ,v: other ST. PAUL *••••'. principal GREAT Exchanges FALLS, MONT. Trust laws to unions, for instance, would prohibit all strikes, since any strike, is a conspiracy which restrains commerce. What is re¬ quired is a-general balancing of legal rights and responsibilities in those sections which made unions v:://■■": •./////'■';/<■//// || | td move into -•///£</v/r free labor movement in the proc, Connely Piper, Jaffray & Hopwood would the ess. E. F. the the possibility of such stoppages without destroying or weakening free enterprise or the eliminate S. Fleek category because they are governmentlicensed monopolies with their rates and permissible rates or re¬ turn on capital more or less fixed by government agencies. Since situation.,£;We simply a John somewhat different a such not: tolerate •■/ / - both private in¬ rights of either party in * ■" discour¬ or . " -'/ - industry¬ wide bargaining and get negotia¬ terests us. It is clear that the public interest does become whol¬ • from ly paramount to the for all of time same both age policy equalizing the rights and respon¬ sibilities of employers and unions under law. ' Obviously, a rigid ap¬ plication of identical statutes to coal shutdown has dramatized this IBA PAST/PRESIDENTS ••'/ 1941.42/-1939-46-41 finally, a very strict regulation of industry-wide bargaining, in the public interest or interests of 'the/two r /"'• l/v//-//:/ //: Federal Government •parties. . ' 3089 first free col¬ - More1 funda¬ mentally; when r any?; democratic and;, freedoms ' ftj$ ffHE COMMERCIAL1 & FINANCIAL CHRONICLE 'TIH: 'i'KMl;' " ■■•■• - collective bargaining process. /We dealt this with problem in suable aspects of some the Case bill in FIRST NATIONAL BANK legal entities for breach of contract, - which stopped the compulsory unionization of fore¬ as Frankly, I know of no very sat¬ decreasing their legal duties and isfactory solution at the present responsibilities, it is inevitable time. Our present answer is gov¬ men under the National Labor that in writing a new policy, in ernment seizure and operation of Relations Act, which outlawed accord with these principles, the facilities, and it doesn't seem to be secondary boycotts which are in legislation involved will bear restraint of trade or create working very well. Eventually, most heavily on unions. Certain such a solution heads toward to¬ monopolies which are against the special privileges and immunities talitarianism./ Other: solutions public interest, and which estab¬ which; they now ,enjoy will be which have; been advanced in¬ lished standards for welfare funds taken away from them. New re¬ clude some form of set up through collective bargain¬ compulsory sponsibilities will be imposed on arbitration of V.//:/.;,///// ;£/''://:£///' ./•/:/./ disputes in this ing. them. In most cases, the employ¬ On these phases of this problem, category, which I discussed ear¬ er does not enjoy the special priv¬ lier; or. application of; the Anti- we are in a position to introduce ilege or immunity which we take Trust laws to prohibit simultan¬ bills early in the next session and away frqm the union, and has al¬ // (Continued on page 3090) /: !// eous strikes against or lockouts by ready had', imposed on him re¬ sponsibilities corresponding to Minneapolis b-:i~: ;..i .. I ,/, /'■.•'/; ■//, •/./-•' ■/ UNITED STATES ••• ■ / / /... ■; ■ ■ '.v/ ••/•tv« / /•.• - v: / ;.v;V; GOVERNMENT, / STATE AND MUNICIPAL BONDS . IIS SOUTH FIFTH STREET MINNEAPOLIS 2, MINNESOTA ,- those which would be imposed on Unions.;;wj ■ ;:/?/:/;;/• >/;:/"" M have listened to a great deal testimony on this problem for the past six years and I have yet ? of hear to union showing / ; of leaders make r-v general employer which would justify legislation checking abuse them. . misuse of or ; any power . The main burden of union complaints against the employers when we were holding hearings Allison-Williams Company ':/■/> : NORTHWESTERN BANK BUILDING : , the on Case Bill that was Unions demanded a crease ih the made a! an 30-cent-in¬ :///'!••/■ r ./ / .-.-. ••/-: ;*////> r/ •' r,;;.* .Bell. System Teletype MP employer & ■ ;:/</ no kind of legitimate ;///V ■i i Company, Inc. Investment Securities -•: /./;:% 163. Endicott hour increase. an Kalman 8c t§S MINNEAPOLIS 2 insulting counter offer of 10 cents mere That is wages,, when it? McKnigKt Building Building SAINT PAUL 1 . com¬ MINNEAPOLIS 1 | plaint if the unions really believe in free collective "Whether sound the were economically in taking that position is one bargaining. employers a moot question and which only a free market can decide eventually. /Kinds i The of Legislation legislation veloping a new Needed in needed national labor C. S. Ashmun Company de¬ INVESTMENT SECURITIES Municipal and Corporate rally into four general categories problems each ! one First, and I shall briefly.' we need mediation machinery.. ent discuss ^ better pres¬ Conciliation Service is badly staffed and is directed by the Sec¬ retary of Labor who is by statute a- partisan of Tabor,/whereas the Securities / Federal The INC. re¬ lations policy breaks down natu¬ of FRANK & BELDEN, 1212 FIRST NATIONAL-SOO LINE BUILDING MINNEAPOLIS 2, MINN. . MINNEAPOLIS 2, MINN. Bell System Teletype MP 124 < : Thursday, December !2> 1946 COMMERCIAL & FINANCIAL CHRONICLE THE 3090 IBA PAST PRESIDENTS There are many • attitudes and , the law what we " mean by "col¬ ,; (Continued from' page 2089) instead of practices by both employers and . / proceed immediately .with hear¬ lective bargaining," unions Which are* most harmful, XX X ;. ings and floor action. vV;Y leaving it; to, the NLRB, and we should require: uniori^ as well as but which are not subject to-.Cor- XX'SX'X' rection / by legislation ? to « any • -X :*? • employers to bargain/X^ 'X;'; Overhaul National Labor ' >; >; marked degree.' : The economy of Xx,:;XY: V,,/X Relations Act yv< Protection of individual Worker's scarcity which appears to domi- ;Xv.X:.Xr i But any solution-of this third ' 1935-36 1936-37 1937-38 , Rights',:--s,.v problem of balancing legal rights ing example of sighted thinking oriythat: side of vt' the bargaining table. -We all reC-.T t-X/1^ ognize that this strong tendency of r,: ,, unions "/to -limit: production Xand |XX:v;/X makework /developed out of ex- ' >;};///: perience during depressions /when ; ■ stretching-every job to, the/limit ; -X . became; standard practice. / But it ; 'X ' . . AjAky:,i0M$$ ' '. 1 * ■/' •" ;'■■ >■: ; r ,,:~,J4'1" i'1 .• i -.M *; "H ,* ; iv/vftr.,'- .y * *,*.■ jr .j.- .: i 'f National the t r^'. M .•' /.../ ]?•'■■■:■'■'■'XX< '/".'■"''. ?V^'i-"4/.""'v':'■>"•■- Board says he could make & Company Harold L Wood Investment Securities FIRST NATIONAL ■v of the other a Relations A hostile board Labor can. . act; which is merely an¬ that grantihglegisr proof .■; liberal law. ?. ' XXXX'-JxXf /y-XwX/r> X the Drafting - ' amend¬ proper ments to the National Labor ^Re¬ MINNESOTA essential First, a prohibition; of jurisdic¬ that unions a -V- "... v"-;> :X...'\X - if^ •*'•■••» •.'* . * SAINT PAUL" 1, Co. contract to act on this basic economic fact. / approved XfXBut if unions are short-sighted, . / >. by a large and; specified majority many, employers have been even more myopic. / / Our present lop-YXXtX of the employees affected.' X v The more rj*have studied the sided national policy is a direct / X result /of the. power-drunk arro- X " problem and 5 these - regulatory proposals, the more it has appear-? gance and stupidity with/which ; ; ed to me that ,s;uch remedies are employers, dealt 'with unionization : X X' The John XL X X X not only superficialJout they head a few decades ago. in the direction-of ever7increasing Lewises: inV; the labor movement X X; / learned their lesson well — from W government ? control andregula¬ X-;/^ tion, v which in :Jriy' experience is employers; /'.XX" /•,!:x;-X >.X>X-rX'X^ Although it has/been apparent ; \: almost certain to be abused; It is to anyone who had eyes to see for;'/'/; my own conviction that by far the soundest and most; direct solution many -decades that free American v X . X workmen would not and could not XX;'X;}'. is to go to the 'fieart of the probbe. valtdv-unless requirement A machinery lem. and and all outlaw the closed shop ^feMs of .1 contract other be treated on a as just so many digits balance sheet, added up making , BUILDING;: Labor tional Relations Board's by the unla? pirobiemiwRh; few decades rnent must deal. If .indiviatwls r.cannot -be ported by the "weighty of eviY ago. dence" instead ofyby/X^any evi¬ forced to jo|nV a Xunion' by / this gotiations as C<rtfectiveXbdrgaining^ shabby bread-a&drbutter. control, dence" as the law. now breads. but ^w'many yme$;do yw / tea<i > I Fourth,\ clarifying;.the.; defini¬ free workmeafjyiH through the of Employers /makihgi ; deniands/bh X; tion of employee in the act so that democratic p r^o c e s sX eliminate the / unions? Shouldn't ] barg^b-X/ X at some stage in a strike he peases, racketeering Communist at the employer's option, to be a ing Xbe ,X a ;< two-way * stte e t?. X " leadership andrlbeep their unions legal employee. The present'defi¬ .X.-i-'V V/-'7'~ '•* MINN. and j ment that no closed shop •provided in the .Second, giving to"employers an absolute 'right X toX/anXXeiecRon FIRST NATIONAL BANK standards . jobs,' rather:'than full with /;/ X membessfRKhi a qnion a steel and : coal-, into costs,/ many r - X condition. /of \ employment. The employers/had to be clubbed into /'/;/• X closed or union^ship/'which turns whenever they are^threatened over to the union leadership abso¬ wereX' individual •< human beiiigs 'i* XX with either a jurisdictional;;or an lute control Over the individual's Uka:Meni'selves. X Even'today,'it ' organizational strike ' by ~~unions right and opportunity to work in a rare concern where the top ex- X - ':, which claim to represent a major¬ an occupation.of his own choos¬ ecutive is a specialist in labor re- v « ity but will not voluntarily submit ing, is clearly an illiberal viola¬ tion of individual freedom. In ad¬ lations, although it is clear that X to an election. ' Third,, requiring that the Na¬ dition, the closed shop has formed the/basis for m««pEK>lies as vicious labor!j,: relations is the X toughest ;* election democratic Caldwell Phillips living lower from membership, and a and abide by the use to fewer / are:{X;;&;y&J;- strikes and tional t- ognize and to impress on . lations Act will take timeVand study, but among/ the v changes which appear at this time to be i:"h X, their fol- / XX/ X lowers that such an economic pol- XYX; • icy ! inevitably heads downward X X leaders to rec- >,! time for union is . toward - " employment,and full produc- ; . > tion.X;/ No people have ever yet * X succeeded Xin consuming more Xr/.,\ than they produced for any length . of time, and unions should begin ■ , require¬ would complete dead letter lative, judicial and administrative powers to an appointive agency in government is neither sound nor BANK BUILDING SAINT PAUL 1, •XX "union policies. Overhauling the National Labor '("] There have beep many propo¬ Relations Act does hot mean any sals to meet thfs: problem by Fed¬ weakening whatsoever of the em¬ eral regulations, requiring annual ployee's right to organize and bar¬ financial reports from unions, bi¬ gain collectively. As a matter of ennial secret elections of officers; fact, thai guarantee needs to be supervised strike votes by secret strengthened because, as it stands ballot, an appeal; to a Federal tribunal for any employee refused now, no employee can get into court to protect his right unless admittance to a union or expelled i Frdthingham' E. determination changes.:\;;:.vr^>>;-;I/.l\--v,.y-; making F. unions/is an outstand- XXX selfish and short- X; /» .: hate many - ; Our fourth problem firi writing responsibilities also requires a new national /policy - is proteca thorough overhauling of the Na¬ tion - of the. rights of;; indiy.idual tional Labor Relations Act. That and -iminorities ; within vfall take considerably more time workers unions. This rtias become in¬ and study because it has been six creasingly i important: - and urgent years since ; Congress- considered as unions have°grown in Size and any amendments to the act,"and we have 10 years of court and pjower i and : individual workers NLRB decisions to - consider in have had less and less voice in the and asVany findings of fact be reviewable by the courts unless they rare sup¬ XXXxKfxfiS mented - attembt^d trustsXof a , _ J. much, ^ound and the employee's risks in: a strike Whether increased and Vy: At risks. some >' » » >5«y% - '\ »•*•. '* 'f •' '• \ / .' really i-V< p\«( ;X>'X •'}''' v.', xv'. ; ^C,A- are working for him. Shouldn't liber|(l. X( Coaferess will choose evil to regulate thisf closed shop or root it out of our economy, pro¬ would riot^ I shall press but- more: solution. foif;the drastic,' in demand^ ; / employer return for /higher^, ;X shorter hours and all the - other demands: he -is; constantly? Management c knows . individual incentive in our econ- - XTt is about time that em- . omy. ployers figured out sdme way ■ of / incorporating these fundamentals of legisla¬ our economy into beat tion;^ Permit; ever the me collective, mony. lawful means in the Charles C. Cook X; ; f :^A ; T. 5, v' ^ v 1 f'-: : \ u. • MUNICIPAL and CORPORATE Greenman 6- Cook, inc. MM11; SECURITIES xxfixl INVESTMENT ST. PAUL 1, MINNESOTA Telephone-^-Cedar 7441 SECURITIES Teletype—ST P 149 5sgi;QUAi|i;&?eo;;jss /X.* 'X ;!X;X Member . :vvVr-X ;;XXv././■■■:/ 'y- 'f- X; ■ Chicago Stock Exchange,X : DAVENPORT, IOWA Davenport Bank Bldg. ):k X/xr-.;: Members of Minneapolis-St. Paul . ) to does, but his right to strike by fill r\X;^yvf--St. Paul 1, Minnesota • X much v responsibility as its em- Employers and unions must details, and it is their ployees for developing ways and.:'; if he feels the union demands means of dealing effectively with X attitudes and efforts which will in made a settlement impossible.XX' Communist or racketeering lead- XX X the long run make the difference And, fifth, we should define in between harmony and chaos. X ership when it gains control of the X, Bldg. ^ , X5 agreeing;' to importance of production and the Can Provide for /possible much So mbre wages, jpermahent and liberal * ^ [ • > < What Laws The I vehtwe^o ^edict. /But the somethirig emphasize bargaining contracts, without any ;, >{; employee's right to strike is not to speed-up implications. -;; « - , ^ again that laws can only provide lockout, which no employer in his I believe management has as the framework for industrial har¬ senses Almon A. Greenman a opposite for the employer of the / Park-Shaughnessy & Co. First National Bank theXjemployer's stage;in agent for those who bargaining "P'P'fyV'P/^Pi•••' - longer his employees and request a new election to determine the Municipal and Corporate Securities ' too longed strike, whether after three, six or nine months; an employer should have the right to say that those workers still out . are no Underwriters and Dealers in v decreased has nition Stock Exchange '/.//•/-'-Bell Teletype DNV 91 K; . .1, MM* ; , Branch Office: Waterloo, Iowa X/X'XX/ « ».*» +" * • »• - * / ;^ . ; / , X Volume Number 4550 164 .THE COMMERCIAL „ & FINANCIAL CHRONICLE 30911 ■ \ through which their em¬ must bargain, r Manage¬ unions ployees ment, of ten nize does not this let problem, velop ways of 'XI even alone f 1934 solyingJt.y-vrv;,vr|v have worked enough in v.,,//'.11 y.; .V de¬ ; • y. f/; :• '*?.■*•*.? Ty • v T; / • . •'.,■// 1931-32 *• ' \ \'?, *Sener, Joseph W. ♦Seving, Frederick T. •- 1930-31 ♦Shanks, Sanders, Jr. Sharp, Nathan S, Shaw, Herbert I. Shawell, W. J. ?U: • in¬ dustry to. know, that the loyalty and effort of veteran employees . afe vital factors in the, success of enterprise, yet they have very seldom been V adequately recog¬ nized by management. A worker any who stays with the same five, 10 ♦Shelley, William F. ♦Shields, Cornelius Shillinglaw, David L. ♦Shreve, Wickliffe ; concern 20 years honestly feels or that he has invested ♦Denotes part of his life in that business, investment the Mr. and Sherrerd The Bond Buyer R. S. Dickson & Co. New York Vance, Sanders & Co.... New York well Chicago .. \ Investment Co. Houston Vance,. Sanders & Co. Boston \ Shields & Co. New York ! Shillinglaw, Bolger & Co.. Chicago ] Hayden, Stone & Co, New York i Sills, Minton & Co. Chicago j (Continued on page 3092) psychologist will -tell is us iriy an G. job a W. Bovenizer //'/:/ Allan M. Pope / - . UNDERWRITERS Henry T. Ferries DEALERS ■ " -tremendously important. There is a creative instinct in all of us which demands satisfaction Ahat basic human need in production factories our mass where In Attendance at IBA men and women /.spend all ; day on monotonous tasks I do not kno\^, ibut L am sure that it is another Meeting . problem In labor relations to management has paid in- v ,fsufficient attention. ; .; Legislation cannot solve these problems,- for either labor or man¬ agement./ But more intelligent, liberal, courageous leadership on I both - sides can solve; them, and must solve them if PUBLIC UTILITY, INDUSTRIAL (Continued* from page 3088) / i which DISTRIBUTORS TEXAS MUNICIPAL BONDS there is trouble. How to satisfy or j - Mrs. as that the satisfaction which dividual gets out of doing ; Philadelphia 4 Baltimore same?:\:Jyj/- WAny v Butcher & j an important as the in¬ vestment of dollars, yet how many concerns .treat those investments . Pittsburgh Chicago J. R. Phillips ♦Sills, William H. substantial a Singer, Deane & Scribner Daily News Mackubin, Legg & Co. ♦Scribner, Joseph M. Seeley, Herman G. ■. IBA PAST PRESIDENTS recog¬ *^oads, J?Wlip J. First, National Bank ♦Richardson^ I). T, Trust Co; ■£ ' Milton R. Underwood & Co. Houston Alex. Brown & Sons Baltimore Oklahoma . Riepe, J. Creighton ♦Riley, James S. /;§;/ Roberts, Albert, Jr.'// Roberts, Chas. B., 3rd ♦Roberts, Malcolm F. Robinson; Edward H. ; BONDS and STOCKS City ; Bingham,: Walter & Hurry. :;LqsAngeles ;/ Cohu & Torrey St. Petersburg' Pennsylvania CompanyPhiladelphia Denver Sidlo; Smions, Roberts & Co j! BANK and INSURANCE STOCKS , Schwabacher & Co. New York , to, Rqddy; James E. J /**/ //Scharff New Orleans Jones,:. / Rogers, Frederi ek;C. ' Thomson &;M[cKinnon jmintain/ourfreeeconomy. v • ; New York., ? I receive a great many- lettefs Rouse, ROberjt G// -■/ Fedeial Reserve Bank? New York ybh^thesubject of Tabor/relations, Rovensky, William R. Hornblower & Weeks // New York //'/; including quite a few from - em- ♦Rowe, Robert G. • Stroud; & Co. / - -' * i " //Philadelphia r ployers who want to see the whole Rushton, Joseph A/ / Goodbody. & Co. Chicago "National'/ Labor Relations Act Russell/ .Pr Scott/:jr/ ■ Glore, Forgan & Co. .'.'J -New York ^ : Equitable: Securities junked,/- ;who;/ demand that alb Rust, John J. > Corp* New York j strikes;, bb outlaWedU % Congress is • ♦Sandberg, Maiii -New York noUgoing to do anythiiig of that: '£Sanders, Jesse "Jrr,: Sanders^ Dallas / kind, z As a matter of fact, such, ♦Schaedle, Tho New York G.Briggs, Schaedle-&'Gd: we/are . RAUSCHER, PIERCE & CO. MERCANTILE BANK BLDG., DALLAS 1, TEXAS Long Distance Bell Teletype 841 and 847 -■ - ! DL 186 and DL 1$% :/ - ■■ . Branch Offices: Houston & San Antonio j! , . ' ■ "demands prejudice the chances of. doing a really fair and sound job of overhauling our national labor policy.;? To many of us, it is ap¬ parent that in laws, in court inter•pretations and in administrative "procedures and attitudes, govern¬ ment has gone much too far in in¬ - Sphiichtingi A. New York ; Schluter, Hard First National Bank f Schmick, Franklin B. Straus & Blosser Schmidt, Reginald 3VL Blyth & Co. ♦Schmidt, Walter A. Schmidt/ Poole Schwartz, William A. Goodbody & Co. New York ' World-Telegram, -NewYork < creasing the power of unions and Schwerens, Murray R. relieving them of legal responsi¬ bilities and duties/' ■; / / #-&$$$ " . Bankers Trust;. /—'/■ Chicago New York Co. • Chicago \ /./ ; • Philadelphia Dittmar & Company / :Z 616 South Texas Bank SAN ANTONIO and it do Teletype a/fair,/sound ; basis,/ achieving a / reasonable equality of power and a/sound balancing of responsibilities and -rights as between unions and em- J . Building 6, TEXAS — SA 15, /'."///' ♦//; on //Underwriters Distributors — — Dealers £ ployers/ We do. not want to leave loopholes for-any employers any Corporation and Municipal inclined to go on the kind of so /.pnioinrbuslJng, campaigns;^ . had / after the first; World War. / "• INVESTMEMIT SECURITIES .; How .extensive - : V/' i^. ' j. t y' ./jl • A.- 's will:; be -j ; • W, r? ; /////// 4': . . /*/ " ! »;>• W v one ; to V -} ;j"#i Securities i\? ). •• .7. • DALIAS </ I-. . Specialists in Texas Corporation but 1^-''think it is safe can,say, ' . RCOUOl-l <3' BAMK-' BL the /chants jmade/^^inj'jiu^ona^aws/bo:-. and Municipal Securities predict that there will be sub- stahtiai changes .in the direction I have then Telephone: Central 6151 . on a I, Teletype: DC 193 em- drive to destroy unions, can chaoges Bell employers /interprets those changes as a signal to /bark Branch Office-—-Dallas outlined./ If any substaihtial /number ' of . ^ Telephone—Garfield 9311 •v/vijfe want to correct that situa¬ tion Incorporated ^ (Formerly—Mahan, Dittmar Si COi—Established 1924) assure will you that the be: repealed < soon; 1 J • ,t .w * / '{ \ y ;<•* ' , '■ . • y >' .//''• • ■■ ' , ' • ■ • • - , , ./ , - * • we will have an even more " • •. ' • ••• \ ; ^ :"--vv • .. - k:' -* • . . / • '• ^ )•.. 1 have my own \ now. I cannot The "TEXAS" —the Bank ACTIVE texas securities > . .• - lop-sided and partisan policy than we . I .. * and BOND in Texas with thei DEPARTMENT emphasize too strongly Trading Markets Maintained in All Unlisted conyiction that whenever Dealers and Underwriters Specializing in government departs too far, and for tod long a function 'of under law tice to • SECURITIES TEXAS MUNICIPAL BONDS all individuals and, groups and becomes a parti¬ san 1 STOCKS, BONDS and MUNICIPAL time: from its liberal dispensing equal jus¬ Special interest in Texas Municipal general obliga¬ - -Underwriters . Distributors — — Dealers tion and revenue bonds maturing up to ten years. of particular groups; it inevitr- Offerings of odd lots are invited. ably .tends to degenerate; into dic¬ tatorship. Both free enterprise arid free labor unions would be ated if that happens. Up liquid¬ The Rus s em-, & : , the as NAM, . that this, time our and that the new / / - / date credit P. R. McRee analysis gladly B. on (Jack) Davis, V. any Texas furnished upon City or request. Garrett, Pres. P., Manager Bond Dept. : 493 > 1 41 .SAN ANTONIO 5 ^ M near then.is made to work oh and sound basis; / f^; - .*, ;v\ alamo national bank building •" the v center to TELETYPE DL • sure labor relations policy stops somewhere C om pan y incorporated can •' help tremendously to make - County ployers of America, through such /organizations . ★ policy fair a - ^ / . 'Bell Teletype SA 23 Western' Union f M » I » MMIM - Teletype Telephone Fannin 4324 Western Union Phone o e > o s i t INSUIANCI / ■ COKK5KATION Prescott & Co. Stone, Morton J. :' .: . ' • s ; 7Y;7 ;7!y"777 (Continued from page 3091) • 7 Chicago :: ' :I New York •! Bankers Assn. & Co. 'I Equitable Securities Corp. ♦Smith, Dudley C. Investment Smith; ElwoodD..Harriman Ripley Smith, H. Laird Smith* J. Raymond . Smith, Norman V : ; .: , New York - - New York v : / New York - Merrill Lynch, Pierce Smith, Winthrop H. & Fenner :7: & Hutzler Savannah First National "Bank ;f> y,: w{ Atlanta^:;-:;'! Herald-Tribune 1 7 "'"""TV " New York Reynolds & Co. New York Shields & Co. . New York ' Co. Johnson, Lane, Space & f Space, Julian A., Jr. ' Beane Smutny, Rudolf ./w Salomon Bros. Speas, J. W;; Nashville 77 New York:? ' Weeden & Co.! . 7 - ' Merrill Lynch, Pierce : ; ; /'Fenner & Beane8. "? « ♦Stabler, C. Norman Staley, Thomas F. Stalker, Alfred J. . Stephenson, F.Kenneth New York Boston Chase National Bank •**'.' ' New York Goldman, Sachs & Co. 77 New York Sterling, Norman E. Allen C. Ewing & Graham, Parsons & Co. Starring, Mason B., Jr. Estabrook & Co. Stearns, Philip M. Stephenson, Edwin A. • ♦Stevenson, Robert, 3rd Investment ^Stewart, Harold S. v. ♦Stewart, Percy M. : V - —• - Kuhn, Loeb & Co. . Hirsch & Co. ♦Stirling, Louis J. - Stone, Fred D., Jr. •; ."7 John Nuveen '7 ! & Co. yy i . . Albert R. y Thayer, Robert L. j Thomas, Joseph A. j Thompson, J. Cary, Jr. Thayer, . i; ♦Thors, J.Emerson ♦Thorson, Reuben i & Curtis • j'j? Thomas & Co. JJ ' y.!?♦Topping, James D. : Braun. Bosworth& Co. -•!'• ♦Torrey, Clare M. i Cohu & Torrey i ! • ; • ♦Townsend, Mossir M. United States Treasury ♦Trigger, Raymond I s Investment Dealers Digest Trost, Milton S. ' Stein Bros. & Boyce ■ /v. Tsolainos, K. P. Baker, Weeks & Harden 1 Tucker, Norman L.7v77-Chase National Bank V777i7 Tweedy, Albert W/7277:H. C. Wainwright & Co.: ^ Tyson, Robert W., Jr.' ' Blair & Co. ; 7" y ' Urell, W. H» . ; Barr Brothers & Co. 7./ ♦Valentine, John W. : Harris, Hall & Co. ♦Vance, Henry T. 7 '% Vance, Sanders & Co. / , * Vanderpoel, Robert P. Herald-American - ■ Van Hart, T. George Salomon Bros. & Hutzler Van Ryn, John Merrill Lynch, Pierce, ,1 ♦Tomasic, A. E. . Chicago 7,7: Pittsburgh New York New York Washington New York Louisville New York 7, New York 77 Chicago San Antonio New York Chicago New York ♦Varnedoe, Samuel L. Savannah \ Varnedoe, Chisholm & Co. - Boston ! i 7 New York New York New York i Boston Chicago New York Palm Beach Fenner & Beane Jacksonville Kansas City Bankers Assn. Dittmar & Co. • , Co!77 ^ Stern Brothers & Co. Stern, Sigmund ' '! Taylor, M. M. 7 Chicago ;V' Boston Little Rock Chicago Northwestern National Bank Minneapolis Semple, Jacobs & Co;72772:.'St.Louis , : * Thayer, Baker & Co.. v ; - Philadelphia Lehman Brothers' 77< New York Lehman Brother^ v ; • New York: : Buckley Brother^ ;>7-f j) - .7;7 New York Kuhn, Loeb & Co. // \ "77:ry'- New York Paine, Webber, Jackson 7.7/ ; .!■! 7- -v V 7/7'; fj. ♦Sullivan, Dabbs Swift, T. Philip Talbot, Jack ; Cleveland \ Mason,-Moran-- & Co; { < r:; :• Whiting, Weeks & - Stubbs Dabbs Sullivan Company ■ Continental Illinois Bank ♦Stuart, William R^: ; Stubbs, John O. ' * < - Simons, Godfrey B. G. H. Walker & Co. v.?.Providence 7 Simmons, CarletonH. .E! M. Newton .& Co. Boston ,<iizC Simmons, Richard W4. Xee .Higginson. Corp. . Chicago Sinton, JudithR. ; Investment-Bahkers Assn. Chicago.:::.! ♦Skinner, David L. " Harriman Ripley & Co. New York Slezak. G. Edward ' Loewi & Co.,; :. ^V '• :" Milwaukee CHRONICLE FINANCIAL THE COMMERCIAL & Fortune Magazine * New York von Glahn, Theodore A.. Salomon Bros. & Hutzier New York Wade, L. R. Adamex Securities Corp. - ; New York Waldmann, George R. Mercantile-Commerce Bank New York Walker, G: H.J Jr. G. H. Walker & Co. , New York Wall, John T. * ' R. S. Dickson & Co. \ * /« Charlotte ,l Wallace, Darnall 'Coffin & Burr / ,• •• New York ♦Walter, Benjamin A.:7 Bingham, Walter & Hurry ; Los Angeles ♦Ward,NormanD. V Norman Ward & Co. ' "'r/\ Pittsburgh •/ 7; Vind,Helen , UNDERWRITERS-DISTRIBUTORS Merrill Lynch, Pierce,•• » 7 * Fenner & Beane; -.^ Philadelphia Warren, James C;7 77 7A; M.jkidder. <8c. Co. - ..New York Ward, T. Johnson,21 " . of Securities of Established v* i . Tt '^Denotes Mr. and • : • . • , «/. (Continued on page 3093); Mrs.', • .. . <* - 7.T2 , - - COMPREHENSIVE COVERAGE OF THE SOUTHERN CALIFORNIA MARKET Inquiries Invited T .» ■: RIVERSIDE:- '• '1 . -i *>U !?/'/' HOLLYWOOD^ V SANTA ANA - ,V V'vfv'i •• j- : ... LONG BEACH PASADENA . ■:$ > POMONA SANTA MONICA NEWPORT BEACH Obligations , Angeles 14, MAdison 2121 ?v 621 S. Spring St.; Los NEW YORK United States Government Member Los'Angeles Stock Exchange •;*/'! ; Municipal Bonds and State 7 Mmtkat savings ASSOCIATION y- NATIONAL Bond Investment Department San Francisco Co Schwabacher INVESTMENT SECURITIES 600 81IS1 MARKET STREET AT MONTGOMERY 7 SUTRO & CO "•A! Investment !.!:/",Telephone SUtter 5600 !, SAN FRANCISCO 4 *Dealers in 7.7.. MEMBERS ; ; NEW NEW YORK CHICAGO t / Bankers Unlisted Securities ;7 'Brokers. 7 \ 7 STOCK EXCHANGE BOARD OP THADF YORK- CURB EXCHANGE (ASSOCIATE) NEW YORK NEW . . ...Ji. . STOCK EXCHANGE^ EXCHANGE -(ASSOCIATE)'" YORK CURB SAN FRANCISCO STOCK EXCHANGE LOS ANGELES STOCK EXCHANGE • Angeles l4 Los SAN FRANCISCO •• 210 W. rNEW? YORK" • "OAKLAND VIH UI t ■'' 7v : MONTEREY FRESNO - SANTA BARBARA SACRAMENTO 1 Seventh Street S.ahJose- i , 246 S. First Street .■ vv - - su' •/.. 4 ■ . 407Montgomery St. New York 6 61 Broadway; f(lT^evefl^iils7:T 204 S, Beverly Drive THE COMMERCIAL" & FINANCIAL CHRONICLE under the regime,- of .-fixed .exr changes? •; I contrast, each and .all of these controls, - when needed, are actu¬ ally : integrated -in the free ex¬ v yet ,• at once disappear changes, when the need for them ; at IBA -3y' In is gone. Under the regime of free ex¬ changes all nations either; balance their international trade or accept the consequences in either a lower or a higher rate'of exchange. If they sell too much on balance . their put a exchange rate will rise and brake their sales because on their goods will have become too • • •-/ ; (Continued from Warterfield, Chas. W.1 Washburne, Hempst'd Watterson, Wm. H. - Meeting 1929-30 Cumberland Securities Corp. Nashville y Harris, Hall & Co. Fahey, Clark & Co. Evening Telegram ' Chicago ' ■ Webber, Robert P. "V, Webster, Robert C. Weed, Walter H., Jr. ;'; same result; Low exchange will . Attract venture capital where and When it is most needed by render¬ ing it profitable yto shift capital from centers of;: high exchange. Thus yit is ■ that venture capital adds its weight to the other fac¬ tors making for equilibrium. In¬ cidentally, it might be pointed out that venture capital, with its risks and its rewards,; is the province of the individual, not of the State. <f - Some will conten'd that free ex¬ • • changes will into a hot the turn gamble. foreign '-■£ ♦Weeden, Frank Welsh, William W. *Weltner, Adoph E. Wendt, George B." Webster & Weeden & Gibson Nashville Co.-1.;- ; New York " . San Francisco ^ Welsh, Davis & Co. -:.V. y:;"';t. First National Bank Chicago ? ; City Chicago Wertheim & Co. New York. A. E. Weltner & Co. • ' Toronto Union Securities Corp. • Werner, Charles S. . Orlando New York New Orleans Boston - Boston Baltimore Trowbridge New York; New York y ♦Wilson, Lyle F. Pacific Northwest Company Seattle Wilson, Walter W. Morgan Stanley & Co, New York ;, BIyth&Co.r. J "- New York Maxwell, Marshall & Co. Newburger & Hano ; E.- M. Newton & Co. f • £•[ £{'N r yy ; New York ; V & Dawson * ^ < Harold E. Wood & Co. New York • ^ Merrill-Lynch,4 Pierce, ■■ v''1'" St. Paul X y ... - WfagensellerS Durst, /«a ; New York Fenner & Beane ; Yates, James A., Jr. Hill Brothers St. Louis r 626 SO. SPRING ST. yyy as in ; the ; international Moreover,; trade confirm that where is Short-term ■ ex¬ foreign trade individuals. succeed outside CLAREMONT I y Direct Private Wire ~ to New York markets. statistics will every¬ To Southern California fix CTORS SHAPING WESTERN DESTINY... FEWEL 6- CO. ,',-y \ . 453 So. y* Member Los Angeles Stock Exchangb ^l :^ < ] .;£. Spring St. TRinity4191 • J* ■ Long Beach : : - • on Los Angeles 13, Calif. V'.,/.."Co-'yxXT-' '*) San Diego y '; v Arcadia • Beverly Hills Money. California cent when doing country's their per above the national Power, yGreater and boundaries. •;y:::Kyyy- ilfll Specializing of cost (and wage) dif¬ ferentials between nations? Under .•'-What growth in America. exchange is part and parcel of the *'know-how of foreign trade. It is essential equipment for those would y as exception.:; Those who are unwill¬ ing to accept the risk of exchange as a legitimate business' risk may always elect to do business in terhis of their own currency, in Which event the risk of exchange Will be assumed by the foreign customer who, in turn, includes it in his own cost figures. Foreign business v' yy REDLANDS ' - Interest of the rule to that of the who ;.v; ',v\,yy Investment Securities com¬ the-exchanges merely for the sake Of accommodating those few en¬ gaged in infrequent long-term operations would subordinate the ' . Teletype: LA 68 ') Members: Los Angeles Stock Exchange » PASADENA chiefly composed of transactions involving innumerable ,v' v TRtstrr 5761 yx;*y ;y-;:yy,y:;- losangeles t4. ' , JEsnd demand will then be y Investment Securities ? so changes might as reasonably insist ton fixed prices for wheat, for cot¬ ton, for copper,- etc., etc. Supply pletely regimented in the local ..y SOUTHERN CALIFORNIA MARKET exchange- markets nor the Staple commodity markets offer that those who demand fixed ^ Boston the long-term "hedging" facilities, y Chicago y because the ex¬ ^y Drexel & Co. change markets, like the markets York, Edward H., Jr ■ Philadelphia for staple commodities, offer shortYoung, William E. ;: McLeod, Young, Weir & Co. Toronto y ^ term .'"hedging" facilities.- But •Denotes Mr. and Mrs. what n of long-term operations? The answer to that is that neither case, ' the -:.j - y Wood, Hoffman, King Wood, Harold E. :: |Retail Distribution of Securities In Salomon Bros. & Hutzler Wolff, James W. y y Hagerstown WoU, Albert J. T. Woods, Richard A. y;, - San Francisco New York ; Buckley Brothers ; ; yy-y Chicago • . . • Work, Robert M. ^ ♦Wood, David M. - New York Co. Dean^Witter & Co. ♦Wittich, Wilbur R. Wittmer, Carl S., Jr. Pliny Jewell New Orleans Arthur Weisenberger & C.TJ-'f Henry R. Hayes New York Toledo Union Securities Corp. ♦Witter, Jean Callaway v ; Wilson, H. Warren Wiltberger, Alfred S. • Kansas : Wilson, Julia trade Such, however, is 1926-27 - Cleveland ; ■ versely, by checking exports and stimulating - imports, high ex¬ change tends to bring about the 1927-28 v * *Wheeler, Howard S. Leedy, Wheeler & Co. expensive when priced in terms of Lazard Freres & Co. White, Cleveland toreign v currencies. Conversely, White, Harry H. White, Hattier & Sanford If they buy too much on balance Whiteside, Thomas Chace, Whiteside & Warren their exchange rate will fall and ♦Whiting, Max O. Whiting, Weeks & Stubbs put a brake on further* purchases Wilbur, Leroy A. ,y.',. Stein Bros. & Boyce y by making foreign goods too ex¬ Willard, Frank AyVy: Reynolds & Co. £ pensive when priced in terms of Chemical Bank & Trust Co.' ♦Williams, Emil C.. ' their own currency. Low ex¬ Williams, John S. Graham, Parsons & Co. y ; change,:. by stimulating exports ♦Williams, Warren D. Ryan, Sutherland & Co. and curbing imports, tends to Hibernia National Bank ■ equilibrate a nation's position Wilmot, Willis G. Without resort to artificialities by Way of ; loans or controls. Con¬ IBA PAST PRESIDENTS page 3092) electric power in per cheaper potential hydro¬ than is in of the world. v—;y--:y:.y capita income 40 average. any comparable region ,.yy:: ; - y y-4- - yv the regime of fixed exchanges the destructive V impact- of tive costs on EAST low rela¬ the price structures - high cost nations is plainly Visible. But under the regime of free exchanges, dumping is neu¬ tralized and penalized by the rise In the dumping nation's exchange rate. If, for example, X nation dumps a million dollars' worth of goods on our market, and we pay pot gold but legal tender there©gainst, X nation needs must re¬ imburse itself by buying one million dollars' worth of American and-WEST Of COAST dollars' worth as Ve have bought, which suits our book; jn the latter event the; dol¬ sold - as ured in terms of the seller's cura f-{ y. (Continued on page 3094) */* fi*' . i;•* - ' / .V 'i ✓ V i' V * j in Western Securities First California Company CA CDRPDRATIQN) y I:,.,;,. ryv Members New York Stock Members New York Curb Exchange Exchange Members Philadelphia Stock Exchange Members Los Angeles Stock Exchange -v* - | r'-, V. UNDERWRITERS " y 300 Montgomery Street Teletype SF 431 -432 Philadelphia Beverly Hills Wilkes-Barre Long Beach San Diego Hanover, Pa. Lewistown ; DISTRIBUTORS "y Angeles, New York and Chicago •! 650 South SAN FRANCISCO 20 Trinity.5343 Pittsburgh • Private Wires Between San Francisco, Los 530 W. 6th Street, Los Angeles 14 many lar will have fallen when meas¬ Trading Markets maintained Philadelphia, Diego, ^Chicago and Detroit Buckley Brothers goods or services or sell dollar exchange in the amount of one -million in the exchange markets. Ip the first instance we shall have llSSCES S Private Wire System to Nevi) York, San Active yty-;; Spring Street LOS ANGELES 14 • V' -Teletype LA 533 y ,% - New York Hagerstown, Md. OFFICES IN PRINCIPAL CALIFORNIA AND NEVADA CITIES LCHRONICLE AICNANIR& y THE COMMERCIAL 3094 Free IBA PAST PRESIDENTS 1922-23 1924.25 1925-26 Exchanges (Continued from page 3093) the dollar own falls currency he will receive that sale his of dollar rex- of change.; Under the regime of free exchanges dumping doesn't theories which laws the or world regulation bv of A. the Under regime free of • ex¬ / American Trust Co. Pfd. & •V '*H : Com. > Mt. Associated Telephone Co., Ltd., Pfd. Bank of America, , Common Fuel Supply Co. Common N.S.T.A., Common Bullock's, Inc., Common San Diego Gas California-Pacific Util's Co. Com. San Jose Water Works Common Central Electric & Gas Common Fireman's Fund Insurance Yuba Cons. Gold Fields Com. fixed factors Angeles with % scient. 1 MONTGOMERY Teletype SF STREET • " under¬ and imbalance, prevent their penetration * Nor The thus | and immunize will fail Monetary because:-money price by its unit, but it expresses value by its volume. units fix Woods Bretton '• leave and controlled /, - " , profes¬ the "stabilizers''/derive -much sional jo support from the Very champions Those to whom of free markets. SAN FRANCISCO 4 in To volume belief the un¬ that sta¬ prosperity. They will, matter of a accept course, as legitimate business risk the risk Fund aban¬ of Jbls sover¬ exchange the to. maintain, , value of his unit of currency, issue. interna¬ of non qua but retainsj full sovereignty\pver volume pf tain he will currency He will be unable to main¬ fixed :value a without rency ; - his for either / to resort loans or controls. cur¬ If he borrows price fluctuations in the com-, it will be because imbalance has modities in which they will deal. They this?- risk; by for provide whenever "hedging" able, yet set in against which denied the forces to change as if from a plague.- son, In of their paradoxical attitude, balance in international accounts can through trade achieved be only restrictions and he trade natural position I to Thus it is that we balanced growth t of have sent after to seem MONTGOMERY STREET to, process SAN FRANCISCO 4, gain CALIFORNIA or repudiation. total ' ?v- with ture. some markets foreign have destroyed our home ' YUkon 1984 Teletype SF 543 to the losses extent, of in exchanges based industries " will but, in reality, while we foreign our we market investors' loans.: I This, submit, doesn't make sense.. . .. a on Van Alstyne —•—1 v stable national price struc¬ try to maintain fix and we arbitrary values exchanges shall we to without. We shall the on our expose from undermining economy then try Noel Offers $tk./ / Public offering of 200,000 shares of $1 value par common stock of carry our debt burden and main¬ wage our a - scale bars and the labor Deq. 2 by a banking group com-' , posed of Van Alstyne, Noel & Co.* Johnston, Lemon & Co.,VI and Crowell, Weedon & Co. The "stock was priced at $16,per share,;: / shares of be used by in and to reduce company outstanding part stock will common the bank loans and for' general corporate purposes./; commercial; paper, other: The of 100,000 common being sold for the ac¬ of 'IndustrialAcceptance balance shares are count Corp; ; Ltd.;/which 'company ac-; quired these shares as part pay-// ment for the purchase from it to Campbell Finance Corp. Ltd. ;?./ 'Co.; is ;ap-^ Finance .Seaboard proximately third in size among' the small loan companies in this country. Balances of loans out-L standing at Sept. 30,1946 amount-; ed to $33,949,498,; as compared with $13,322,388 a year earlier, r The company operates 115 of¬ fices, located in 18 states in this country and 8 provinces of the Dominion of Canada. Approxi¬ mately been- This 65 of these offices have acquired since, last year J expansion about been brought nas largely by the purchase of all of the capital stock of Camp-^ 50 loan offices in the Dominion // Canada.' 1 - ; . to many, i; Velvet Freeze Stock Placed An letting by opening our who pay.--their daily wage equal to;the en stock common made Dec. 6 at an Market / offering of 150,000 shares of value $1 par was $7.50 per share by underwriting group headed by / Scherck, Richter Co. of St. Louis and Straus & Blosser of Chicago. T h e wholesale and DEALERS ,■■/ '• retails ice cream through four plants and 82 retail stores -St. in Louis and Kansas City, Mo., Peoria, 111.; Milwaukee* Wis. and surrounding territories. ; DISTRIBUTORS .' - LOS ANGELES ; ;••.; • •• ; •; v: ■" sr. SAN FRANCISCO i South Spring St. 1 Montgomery . ' Established 1932 Angeles-San Francisco Wire • ★ if; 650 SO. SPRING ST. i •/ I Telephone TRinity 0281 V .! ;. / /" .y_; GLENDALE Private Los \, St.' ' LOS:ANGELES 14, CALIF. ^ Teletype LA 38 of : Los Angeles BROKERS ' CROWELL, WEE&ON & CO; - 621 Members . HILL RICHARDS & CO. .■ PASADENA Stock Exchange LONG JBEACH f • manufactures, company ' ' of '/^'. OAKLAND BEACH \ Proceeds from the sale of 100,-. • 000 ' LONG v Seaboard Finance CD. was/madei to tain down SAN JOSE ';A';/. Seaboard finance legal tender For if markets SAN DIEGO structqre / or} free expose^ price have ; prcrfited y ml the American Some 315 bad, ultimately leading partial -• ■—a—- under; the regime of fixed exchanges. loans./ Good money, by way of ri Our choice is as between fixed credits funded and refunded, is exchanges tied to gold with an DAN FORTH FIELD COMPANY its.invariably; I reaction ' to/ im¬ as the. surest will-operate If, for the same rea-T- bell Finance Corp. Ltd., an On-: applies controls, he will tario corporation which operates throttle trade. cannot his return equilibrium.' he will ibe aid of: the - they shrink from the risk - of ex-, consequence DELAWARE FUND ing the sine of the measure eignty when fixing,, and promis¬ dition of AMERICAN FOREIGN INVESTING CORP. some accept fixed exchanges as a con¬ as WELLINGTON FUND member he a Western Distributors each dons price-fixing is anathema seem to tional trade GROUP SECURITIES enter the price structure. under-valuation Curiously enough, Brush, Slocumb & Co. Hell System /provide because free mar¬ bility will result is illusory. This kets set more : accurate relative is precisely what Bretton -Woods values than can be fixed by any Under - its provisions, group of - men, however omni¬ attempts. connections to other principal trading centers. - face. currencies, of 'Private Wires to New York and Los uncer¬ now free exchanges, by their re¬ omy, action to measures to the over- or we . through which alien freely thus as immediate . are mine every segment of. the econ¬ mar¬ penalty. period of a as conduit the Fund own exchanges Whereas fixed exchanges will there be cause for complaint Inquiries Invited in all Pacific Coast Securities during obliged to sell. Unable to see the exit, he is not likely to use the entrance. Manipulation will its the if tainty -such eign currency, but never what he will receive for it when ultimately carry , ; of manipulation the currency manager will know what he has to pay for his for¬ California Water Service Pfd. & Com. Sierra Pacific Power Pfd. & Com. Central Arizona Light & Power Com. Southern California Edison Pfds. and balance, >/ kets for purposes & Elec. Pfd. & Southern California Gas Pfd. exchange for as he enters the Pacific Gas & Electric Pfds. By contrast, under the protect afforded by..free exchanges, we;, can and we should reduce tariffs to a minimum. because the tion rate of exchange;.by. because.- people structure enjoying the rewards of sound policies and suffering the conse¬ quences of the unsound. Nor will they, in their relations with other nations, be able to play pilot-fish to the shark, using others' cur¬ rencies to manipulate their own; Harbor Plywood Co. -monopoly';/ a mass under-, compensator against cost and wage Unfortunately, knowl¬ differentials between all nations, edge of foreign exchange is not and thus insure sound and bal-y/ widespread, so, that few suspect anced growth of trade as the need /; for; tariffs disappears. Y; Y Y the danger threatening the price V* VY/ *" 4 //. -Y.-'-v V*; changes all nations may adopt such economic and monetary pol¬ icies as best suit their needs, TRADING MARKETS - . monejgry problems yet blithely, act in global terms. imposed do this and sur¬ have stand-it. competition., open Prescatt who dis¬ men we we Woods; answers , none of these questions.. //;> :/> *, $•■;////:: > ;/^///H/; attempt at an Price-fixing is resented whenever, only those industries which cannot exist without shelter or subsidization will feelthe effects John local would and Dysart is Can Do / production /and, "know-/ /: how*'?; And if we have, when will / that - monopoly; lapse? / Brettoh on .. true. : Tt mere Such being the case, foreign seriously undermine our price structure, cost differentials cannot N. vive? regard the difficulties inherent in pay. Thomas worker. defy the natural rights of man. The come . Ray Morris- hourly earnings of the American' visible/ on < Bretton Woods. Monetary; Fund is the professional manager's,dream less units of his own money against the one million dollar pro¬ many ceeds mania, hand, is the mania for man¬ agement; the attempt by the few to impose on the many untested to him. ; For as in terms of his costly more Fixed Exclianges vs. modern every thus raising his relative costs and rendering his dumping rency, the The : LAGUNA BEACH/<; MEMBERS LOS ANGELES STOCK EXCHANGE ■ /:'•< ^HE COMMERCIAL & FINANCIAL CHRONICLE Volume 164;^ -Number 4550 Holland's Present Inleraalioiial Economic Outlook -'/(Continued from jHolland's of 3011) ;:f ■> page is recovery - "matter a Mr,. Eugene,Meyer! conjecture:; recently made a textiles (rayon yarns, effectf • Important" agricultural ; are made ; 'U^f of / J"-- *1946 estimates put, etc. flower • > bulbs, 1 billion,-but espe¬ cially in the first balf of the year men-, /•//;;;^ •:' to feed Initial. imports. had , tial to . the essen¬ and construction ulti-j the Dutch export mately, to ' ■"f/ of Exports • already-existing gap between imports and exports, it is Imports Still Running Ahead (2) 1 .. . in the t third quarter and though' this temporarily widens the A" -0 fc' l--Q "" 1920-21 up h.v :f f --/a .■'!■', imports at 3 billion guilders and exports at as IBA PAST PRESIDENTS „.i/ % a : / Disappointing in 1945 and the first half Of 1946, Imports picked1 exports U.S.A.1 seeds, {seed potatoes, fresh vege¬ whole; tables/fresh fruits," flax, breeding worldi;;f/«- :-f'vr'~c~ f4- <---f-/j cattle, fish,Teguminous vegetables, Dutch and, numerous:other items.,'' "that full production in the is of vital interest to the f / Original population tioned-above,-had to help., indus¬ try get a new-start. /•/': statement - in an: taddr esSii4'WW'-York,vt()-'1fte starving. cotton piece goods), coke, paper,;gin, beer and 3095 ca¬ pacity//'':';'' a both imports and exports lagged Imports in Million Guilders, 1946 xonsiderably;. "arid :the figures, of, •imports were revised to 2.3 billion f..< Jan.: __,__/_not published '•' ;f 136.6 June .guilders, and exports to 600 mil-' 207.7 Feb.inot published y < July , .lion guilders. 206.7 v ' March __not published f ;■ Aug. 198.1 In the4 third quarter, however,' Sept. Aprils——not published < 212.4 Oct. imports and, particularly, exports, May 105.0 ;.<■*,< ° v < improved markedly,-end it now fyH* Though not. officially given, we several hundred millions worth appears that the gap in the bal¬ estimate the first four months' im¬ of/ agricultural and horticultural ance of trade, though large, will ports at some 450 million guilders products, large imports of cereals be smaller than was estimated. * and therefore,- ten months' im¬ (mainly from the U. S.) will re¬ main necessary. Exports in Million Guilders, 1946 ports at some 450 million guilders First imports after the libera¬ 1st Quarter— / //*>• f.•/ f f tion were (3) Balance of Trade Still foodstuffs, textiles, " ■ . . Roy C. Osgood f G. W. Baker, Jr. / Lewis Franklin B. . . Jan 19.9 ■Feb. 27.8 v : March , H .! 46.1 ;' Monthly average '2nd Quarter— accent is on i946 41.3 March ;■ April j 41.7 ; -Aug; z?'-Se . 66.0 ; 60.4 - indi-j exports BONDS DEALERS are, DISTRIBUTORS increasing, the Dutch balance of STOCKS June : Maxwe ll Mars hall & Co. , ■ 207.7 31.8% s 206,7. /. , 91.6 ': 29.2% . 46.3%: 198.1 . Member Los Angeles Stock Exchange 29.7% "136.6 . 60.4 Aug.' ■Sept. 39.3% 105.0 41.3. 40.5 ' : 66.0 July f 91.6 BROKERS ' ; May vf"■;;j.f f;f .'. July'-™-™--™.. • :'Feb.''/---'--^-- "i:. 125.0 3rd;Quarter— that?; although Imports Covered if by Exports ; j Imports ; Exports 19.9. H; *not published f - | 30% 27.8 $30% •: /j *not published 46.1 ♦not published $30% *nOt published 43.2 *$30% Jan.' 40.5 Monthly average The foregoing paragraphs ; cate trade is still ad verse. 43.2 j-L• • . mairily however,;; Hie raw materials, , April sMay •!•// June' "». 31.3 — goods. / Now, : machinery, semi-finished /goods, etc." for further, reviving industry; 93.8 '/ mer UNDERWRITERS Unfavorable clothing, and other typical consu¬ 110.2 jii:^/j2i2:4€S/ 547.0 ■' 647 S. SPRING ST. 40 WALL ST. LOS ANGELES NEW YORK 5 14 51.9% 218.0 : •;•■ * . ■ Monthly Overage -- ' 72.7 f / 1 'f " W Dec. 1 In 10 - .--months' - ■ • , As the situation Dutch the years, prewar exports balance of trade always showed a a considerable gap, the difference now stands at 547 million guilders, < and with two months tct go,; 600 being made good by such items million guilders appears to be a as income from shipping, foreign .very safe estimate, :700• million investments?; etc/Oyer the 1930-39 even, being within the realm of period, Dutch imports averaged possibility* /.£■ ;; y j. 1,400 million guilders annually, as Immediately:' after- the libera-, against; exports of1,000 million tionf exports/ to an important de¬ guilders. ■' gree, were made up of available Assuming/ that- fourth-quarter stocks of horticultural products imports Will total 600-700 millions, /{flower a bulbs,; in as far as they total imports for the year would had jiot j been iused, for < hutnan be some. 2,000 million guilders. consumption!) and shipments of With exports at 600 or 700 million diamonds cut in - Amsterdam. guilders, the gap in the balance / Gradually/ however, exports be- of trade would amount to 1,400 of of' the - * came more: diversified and as in pre-war years payments only be expected If exports ;• million^ guilders. Exports 1,300 or .industrial products therefore will - cover imports by - - >ff approximately 30.;to 35 %, as comf again be doubled in 1947. At pres¬ ent, Philips' exports run to some 10 to 15% of total Dutch exports going to 73 countries and in 1947, the figure Of exports is estimated at 100 million guilders. The Eind¬ employs 21,100 hoven factory now workers.; ' <>,f- •<£ 4"f ' :r f Other industrial exports consist - of i ; . BEVERLY HILLS ■ ■ : SAN DIEGO LONG BEACH can be increased to the level .i of imports/ , -7- equalize imports, the ulti¬ Dutch exports is aet To mate; goal ;of at,^;QpOMhIibh guiidlera ih 1947, 2,000 million in 1948, 2,800 million in 1949, 3,000 million in 1950, and UNDERWRITERS ^ 3,200 mill ion in 1951, •••. Extremely high as these figures international above trade.' The machinery, M SECURITIES chemicals, ships, How to Bestore the Balance (4) ; - ' of Payments? . the Before war, Holland's "in¬ visible income", more than offset the deficit in the balance of trade. Direct figure " 1 1 r'f . land niial \ / New York 1 ■ To '-. Boston J -■■; fMORGAN S Go. Members Los Angeles 14,429,000; tons for 1,039,000,000 guilders or an aver-i age; value of approximately; 70 were Stock Exchange 634 South Spring StreeL Los Angeles 14 Telephone Michigan 4421 I Teletype LA 146 with regard to guilders per ton! investments, Taking therefore not value but shipping, transit trade, etc. have (Continued on page 3096) / changed markedly.. Besides, Hol¬ But prospects income from foreign * ; miliiqh br an overage value Of 190 guilders per tbh; for 1938 the |ij£| ures Wire Private J. ARTHUR WARNER & CO., Inc. far/ljai^year Holland exported 2,8O6^0S^ tons with a value of 547 SANTA MARIA BEVERLY HILLS - has to take care of an- now interest charges on. its/Tori;' eign debt. ' : * J I'M \ ■ ■ ' ■ : /// oulton & Gompany S ": RRASHEARS COMPANY & Members Los Angeles Stock Exchange ; i.' 4 .. *• Established 1914 /11 * ' / \ " ^»S?'v'vK* jjfk > ,, * : i • f. t t ; ,, y'4 • „,» r% ' j ; | 'jt'«\ A vt/ r . t (*> - UNITED STATES GOVERNMENT BONDS |1 ' J ; SINCE 1922 | i ' - ; I ® and MUNICIPAL BONDS GENERAL INVESTMENT . ' '' SECURITIES I.. . - ?; • . 51 n SO. SPRING STREET, LOS ANGELES (13) v ' ; index « G. V' Railroad and Municipal / reflect the greatly raised price level of conn modities arid finished products in given ■> » ■' Industrial, Public Utility : < compared with pre¬ export capacity, it should be borne in mind that the Dutch figures DISTRIBUTORS • ^ may seem r as war INVESTMENT DEALERS • t'».'^i:'c;.v-.^'rV/?'•."• V• V'•:i-V» ^ ; *7 ^ " y .,!(***"a ^ * "w. " v, y / .1 r > taking the lead again; Lamp Works (Eindhoyen). Since the the beginning of l946/exports of this company alone have more than doubled and: will probably ■ LOS ANGELES TO NEW YORK OFFICE ~ " ... - of prices on which these export estimates are based is 250 pared with 70 %/in prewar years. as f Ranking hi^i^/D^ against 100 in 1938.; »/,/ trial exports are radio, electro- In September. and October; how¬ ; If we take 1946 figures as comtechnical and affiliated products, ever; this ratio showed strong im4 pajfed !; With j 1938, we see that sa produced by. Philips Incandescent provement. jure, * W • V. is now, restora¬ balance of can tion . . V •• t Estimated. —— ; A Value 5 . \ k' PASADENA /Nov.;:/ * DIRECT PRIVATE WIRE 36.1% : ;//■ :/ iip.2 {: ■ ff; 1,516.5 -V:/- •■•/.;. f ■/ 4th Quarter-— ; ' * MAdison 7741 ' Teletype: LA 76 j SAN FRANCISCO 4 LOS ANGELES 13 510 South Spring Street. 405 Montgomery p Street " Teletype LA 243 y / Teletype SF 98 /1 i 3096 Thursday, December 12, 1946j CHRONICLE COMMERCIAL & FINANCIAL THE ' in hand. International Economic Ontlook Holland's Present therefore figure equals 1950 the volume, more or in their balance of less the volume of Dutch exports in 1938. Vv: i937 exports to 1938 ; : Y; 1938 — *1940 (4 months) " im¬ Narrowing the gap between Holland ports and exports and even mak¬ ing ; is the. imports exceed exports at, in order to restore aimed about $140,000,000, were against imports from as of about The Holland $14,000,000. t.: Y.v",V. share S.'s U. indebtedness, international con¬ exports, mal for Dutch-American Trade (5) in sizable the gap world able to export U. balance V. ' Holland's exports to the U. S. in 1945 were made up of:; exports (mainly diamonds)_—_$ 743,676 Horticultural and agricultural exports——. —.4,551,312 Industrial Miscellaneous figures' are: For the current year, although the postwar S., T $ y, \ Holland Holland's imports from U.S.A. ' " (t 1 O QH7 RQ(j '' ; V $12,907,889 ; ; Jan. '• , __ March April May _ __ Aug. YY J' . * but — LOS ANGELES 14 ical TRinity 1041 , 1 * " • - " PASADENA * Teletype LA 224 " * A '/ ' * 1946-1947 Dollar Needs WESTWOOD • - [i Bank ; Covered Lieftinck loan acquired May the from / Bank in ? ernment—yto.;have the-balance of off, however, 7^'-A r? a/:..-*.».i . v , r v -» >. ; i) .> . . Planning Bureau: speaks: of 195(1 ^ as the year in which exports will cover ,1 imports. This,. Lhowever, rests on "the supposition of no ma¬ break in ' the international structure. < The European in general find them¬ situation having to cover . with costly assets * Ameri^' originally calculated. They missed : the high tide in committed, Re-i Development' and loan. ' As Minister stated" in' Washington in Holland's recovery pro¬ and the need for large im¬ ports 'and considerable amounts of foreign exchange will go hand gram Export-Import • The estimate of the Government!' (bought with borrowed money) giving a much lower yield than year Washington ($100 million Y J gov¬ payments/reaily^balanced—is fac" these countries October," 1947 will be the top last last haa • : goal" of the The ultimate . million $500 of 1947 are covered. The million $200 for 1946 their immedi- • machinery and equipment in a period of very high prices, whereas it might well be that by the time they get ready ; for large-scale exports, prices will have dropped, leaving, construction," recently announced that Holland would apply for a Holland's dollar needs for 1946 and part : world prices and probably will get caught in tha low tide with markets glutted. President chemicals, med¬ preparations, books, paintings, antiques, etc,'. by 50 of new Eugene;-: Meyer', outgoing of the International Mr. unset), flower bulbs, flowers, plants, seeds, flax, — banks) is fully can half second shown surprising strength. ate needs for new 4,528,153 of which was taken the diamonds (cut * ( to exports 1946 Leading the for of Approximate.;', United States are: ^Member Los Angeles Stock Exchange 621 S. Spring * $13,683,168 "\;'h Summarizing^we^^arrive-at thei conclusion that after ^.disappoints ^ ing start'fHolland's export ' trade countries 1,397,794 $143,183,772 _ t>..■■'f ' ■)■ selves in the unpleasant 867,496 851,058 01,620,738 country.-J (6) The Next Four Years , price 1,492,071 Y 1,180,020 h' curities in this 7 for foreign se«* vestment demand jor Q7G 397 976,327 769,511 * -1 19,692,134 *19,660,000 * Sept. 'Exports to U.S.A. !'■' ,V >11,546,169 21,111,457 June July INVESTMENT SECURITIES ; ■ • 10,625,083 13,902,836 16,621,995 17,116,209 Feb. Bingham,Alters Hurry 64,649 : -r---' —— $5,359,639 of trade with is larger than before occupation: quantities. All formerly nor-j $ 9 months,YV:*\ f Holland liberated May 1945, Stockpiling, v '■, Holland to have an unH favorable is-generally - known that the United States is. one of few,coun¬ tries in the I ; ^Before the war, also, it was It , { and to create imports is about 25-30%. But the surplus with which to pay off U. S. takes only 6% of Holland's tracted to finance recovery. YYfeY 41945 in Holland's Y-vY' balance of payments a r held in abeyanco '; only until there is a greater in-i Imports from U.S.A. $32,000,000 $75,000,000 : ; • v 20,000,000 1 81,000,000 22,000,000 J 77,000,000 ■ / 4,000,000 (in round 71,000,000 • ; Y V 5,000,000 !Vf numbers) -.;. 82,000,000 >14,000,000 ^ ' r: ' • 148,000,000 v Exports to U.S.A. trade with the months' Nine S. U. this year is being Holland countries in Europe show considerable gaps occupied (Continued from page 3095) Besides, the Dutch Wall Street loan announced in July of As regards trade between and land able been never Hol¬ S., Holland has the U. with to balance its country that and, in our. opinion, will hardly ever be able to do so in the; future. So, in order to be able' to' pay • back its dollar indebtedness, Hdlland can only hope that, by creating an trade balance, of trade active a . of rest the world or with the by creating large surplus on its revenue ac¬ count in international can ELWORTHY & CO. the securities ot We maintain active markets in Ideal Cement Company Mountain • Colorado Milling: & Elevator Potash Company Denver Tramway export drive fails to goal, (or if prices for industrial export products fall) or if conditions in world shipping are disappointing, many countries realize United States Potash Company Golden Corporation .7 Cycle Corporation Equity Oil v Co. • But if the of Colorado Public Service Company of America Utah Southern Oil Co. dollars, either through the Mone¬ tary Fund or ultimately through free foreign exchange transactions* :*v California Electric Power Company Co. Daniels & Fisher Stores Co. Investment Securities States Tel. & Tel. Co. shipping, ifL exchange other currencies for ■ its that have borrowed in the U.S.A* 111 SUTTER STREET* SAN Garfield FRANCISCO 4 > DN 490 Jose San Oakland Sacramento will find themselves caught with I Amos C. Sadler & Co. 4460 /' 4 \ Yi-L.'Y.Y'Y'Y-' ■•:,v■ DENVER FIRST NATIONAL BANK BLDG., Specialists Rocky Mountain Region huge dollar debts and will have great difficulties in paying back according to plan. 7 : ■ KEystone 0101 > ; Holland (as well as the lending may, however, find a considerable safeguard in the fact. countries) Securities that its foreign investments are virtually intact and can.always be called ance upon support the bal¬ if other means to of payments should fail.: ;' ,....; - HANNAFORD & TALBOT that —* tiohals Denver 2.. 519 California Street Bell System GArfield 8000 VA-»yJr'i r Teletype SF234 ,v rrr Y "the Toppers, an'.brganization off municipal bond, traders,- will hold ' DN 63 Teletype.. zj.:. Holland is in its Toppers to Hold Annual Christmas Party SAN FRANCISCO 4 ■ as r Building First National Bank long- of - rehabilitation * its; ha«f always might' be called upon- to '7 give; up part of their holdings of foreign,: arid especikHjr dollar; investmehtsr ^ v ^ ^r'' " INVESTMENT BANKERS as period CIDL0, SIMONS, ROBERTS & CA Investment Securities ; Y?/>■ ;:Y :. Y > This same fact,; however, means tk. its annual Christmas luricheon oh - Wednesday, Dec.,18; at the: Hotel St., George, Brooklyn, N. Y. .1 f Wilson, Johnson & Iliggins MAIN 6281 : -v• ■ f : • ' • ; • -:: : BELL,- DN 290 7 ; ■ Reveille, chow, recreation and;^' taps, in that order, beginning |a£ 12 noon and ending at 4:30. p.rn./ will CHRISTENSEN, INC, PETERS, WRITER & ;7"7:- DENVER 2, COLO. .-7'. TRADING MARKETS j;-:' ' • ■ *' •' Loveland, Colo. . ■"■)! : master. - San Francisco — Chicago •.; —l 1....Y:" YY'v";>.'■ Dealers in 300 Montgomery St., San Francisco Teletype—SF 156 ■ 1:7 YY Y-'-V;' 7 Corporation Securities.: 7 : New York and Municipal Telephone—YUkon 6-0363 schedule The ARIZONA NEW COLORADO MEXICO UTAH Bonds of. . MONTANA NEVADA 7 WYOMING ■ with established included. Luncheon served at 1:30 p.m. System Connecting the Barr. Brothers,; as John toa§t~ Topper party ; custom of awarding door prizes and other-amusements will" be Private Wire be Hollan, • will b& • | 'y The Toppers committee consists of: Bigelow - Chaplin, Hirsch Sc Company; John C. Clark, John C, Clark; & Co.; Mark de Baryf Harris, Hall & Co., Inc.; George B. Gibbons, Jr., Geo. B. Gibbons & Co.|- John Hollan, John Hornblostel, F. P. Lang &,Co.; William McKay of "The „Blue List,", and Robert Sharp, Grunwald & Co. The Economic Outlook t, (Continued from 3010) cafiiiagd in manufacturing, for example, have risen over 14% between October,; 1945, and October," 1946. Never¬ theless, the prices of consumer .sure on . goods Wctges. have page Jcioui A,y risen faster than hourly earnings.* As a result of the rise in prices and the repeal of the profits tax, corporate prof¬ excess its have been running somewhat better than last year. For the first nine months 350 companies made about 12% than more last year. This figure, however, fails accu¬ rately to reflect normal cost-price relationships because in dustries profits held were in¬ many down by strikes.'Among 271 companies in industries relatively free from strikes, profits during the first nine months rose from $573.9 mil—lion in 1945 to $832.9 million in 1946, a gain of 45.1%. Business is doing much better than many ananagers are 4. The willing to admit. •. possibility of labor dis¬ putes makes the outlook for profits highly uncertain, i This is shown iby the record of 89 companies in 'industries where strikes were nu¬ ' this merous year—steel,; automo¬ biles,- electrical equipment, and mining. The profits of these 89 -companies dropped from $398.3 million in the first nine months of 1945 to $267.2 million in the first nine months of 1946—a decline of one-third. 7^V'7777'7:::77: •' -5. The cost of living during the last few months has > of one undergone rises in its the sharpest The index of liistory. •■V gjoods prices 7 February consumer from rose 129.6- in to 148.8 in October, or nearly 15.0% in eight months. The the of the strong economy. The government debt is no longer increasing. This that the banks means are not iba group chairmen anti-strike sentiment among workers. cre¬ 12. ,7,'/7'-'/; ■ . , E. PENNSYLVANIA NEW ENGLAND NEW YORK / Despite the relatively weak ating demand deposits to finance bargaining position of the unions the purchase curities others. by In of government themselves fact, or se¬ : and by debt of the Federal government has been re¬ duced from lion in in One of the large oil companies has February to $263.5 billion On the other hand, already 11. granted increase is to living of cost a increase of 18 cents private credit is expanding. Busi¬ ness loans to reporting member banks increased from $7.5 billion in June to over $10 billion on Nov. 13. Consumer, credit has risen from $5.7 billion a year ago to $8.4 hour. This an re-examined be every, three months in the light of changes in the cost of living. Swift and Company and one of the packinghouse unions have negoti¬ ated a wage increase of 12 cents an hour in nine plants. The Amal¬ gamated Clothing Workers, which received a general wage increase during September. The bargaining position of labor is considerably weaker than it was a year ago. There are two principal reasons for thiSi One is the widespread lack of confidence • The increases has started. likely to be fairly substantial. are October. billion second round of wage in¬ a creases peak of $279.2 bil¬ a uncertainties business the ahead, the of 15 cents cently 121/? a cent the part of businessmen in the industry. Contracts have been re¬ opened in the Chrysler Corpora¬ tion, in the International Harvest¬ pects er much were more certain. A ly because of strikes in many in¬ hour second round is likely parts, a electrical copper, equip¬ and others. As time, unions the are rank not file and more time. of any The leaders know this. new strikes. Employers, general rule, are hot fully as a an the was of S. despite occur the first creases U. Investment Securities . This; will vey They know that it would not be easy to work up enthusiasm for being dustries of 10 to 12 cents that strike-minded to¬ day. They do not wish to lose INCORPORATED demanded. The to produce increases in a good many in¬ are wage result of the loss of much work¬ ing Sumner B. Emerson Hemphill, Fenton & Campbell tile industry of New England. In¬ creases of 15 cents to 26 cents an directly and indirect¬ dustries—steel, automobiles, auto¬ ment, coal, Whiteside Company, in the rubber indus¬ try, in the cotton and rayon tex¬ for the weaker po¬ sition of labor is the large amount motive Thomas arbitrator in the women's garment reason of time lost Ward an price level. Consequently, inter¬ ruptions to production would worry them much less than a year ago when the business pros¬ second Johnson hour last year, re¬ an received hour increase. -An even: larger in¬ crease has been awarded by an on T. round enterprises of Bureau A Labor The United States National Bank Bldg. fact in¬ of wage uneven. very 6,600 hour. Portland 4, Oregon sur¬ by Bell the System Teletype PD 328 Statistics shows that between V-J Day and May, 1946, in manufacturing , 21.3% of the workers received aware , ; (Continued on page no 3098) index of prices paid by consumers for food jumped; from 139.6 in February to 180.0 in October, . or 7" 20.9%; 7 .6. The price structure contains many serious distortions. Whole¬ sale prices of farm products, for investment bonds Oregon Securities 77 ll!P!& , 77 example, 3926, and rise about are 151% 70% above 1940. 1 *> •*; 21% ; .. above 1926 -V; ";,v, i* • *■. and y. ' prewar. « ft- 'v V eft * t &S ft; 46% HESS & McFAUL " increased Amedcan Baiik - ft -1 .Wilcox Biiildliig, Portland -4,. Oregon. ?7 ft 7 p.. cU % Portland 5; Oregoii.' tiS Teletype PD -254 ^ *. .■ ft Manufacturers^ inven¬ tories have increased from $16.3 billion in December to $18.9 bil3ion in September: retail inven- V I'» *»,V-'a*. ■ "yVentories ; "*77* Inquiries, Invited substantially, but the ratio of into ' sales ; is "still below y - ~.V.Ai*77 X* "'■'£> V ...... .7*:-Inventories, have t t . above 1939. V . j ,:7V- stocks ft-; continuing interest in all Oregon Unlisted Stocks & Bonds. The in. food about a above prices, is almost- as - The -wholesale prices of ^ commodities other than 'food are » -7 -great.r We have Phone ATwater." 3141t; Bell System Teletype PD lories from $6.7 billion in September, 1945; and $6.1 billion in De-r r- cember to $8.4 billion in Sept emy iber, 1946;, and* wholesale inven¬ y V" tories from $4.3 billion in Decem- tember, 1946. facturers' : v Frank Butchart & Co fcer, 1945, to $5.1 billion in Sep¬ - The ratio of inventories to manu- sales in September was 1.76 in comparison with 1.83 in September, 1939. The : : -ratio of retail inventories to sales in September, was 1.02, substan¬ EftjVI. Adams & Co. ratio of 1.43. 8. v » t u ;; ' , : ft'. PORTLAND 5, OREGON . Signs of weakness in prices are beginning to appear. ticularly significant is the in , Investment Securities ft-AMERICAN BANK BUILDING ft| tially below the September, 1939 the; index tures. Par¬ AMERICAN BANK BUILDING trend of. commodity .•-PORTLAND 5, OREGON fu¬ - ^ Despite the rise in whole¬ sale prices, the index of "commod¬ ity futures has shown virtually no MChange.- - In ; factftits movement yv since ..the end oftJuly has been • slightly 116.7 on downward. It stood at June 22; 122.1 on July 31, on Nov. 30. The Bureau and 120.9 . of ' Labor wholesale from 176 Statistics food - prices index • of dropped Oct. 19, to 164 on Nov. 16. There has also been a whole¬ JOHN 6ALBSAITH & COMPANY Pacific Northwest Securities 7 on some drop in the price of cotton, although this price is still far too high..ft- 77. / ■ 9. Despite the scattered signs of ft t, . ..We have specialized in - j -, -7 - Pacific Noithwest Securities BLANKENSHIP, GOULD & BLAKELY since 1928 --INCORPORATED weakness in at a prices, new orders are peacetime peak. - The Depart¬ ment of 228 100) in in Commerce index reached September comparison (1939 with equals 166 source Correspondence Invited in September, 1945. 10. The basic Quotations—Bids—Offerings Porter Building of inflation¬ ary pressure has shifted from the government to the private part of BEacon 7151 Bell ; ; ' Portland 4, Oregon • > ••••'* ' v, , 7 WILCOX BUILDING 7 7? PORTLAND -. 7 ••'•• ' 7' U, OREGON: ; -•' - • System Teletype PD 83 Bell System Teletype PD 280 v„7.; '77 ...?. ' ' 3098 LA.CHRONICLE! ICNANIF&' [THE COMMERCIAL' the The ESconoxtiic Outlook * (Continued from page 3097) Thursday, December 12, 1948 present labor the situation than should riot expect to see it drop besuspects. low 165.. It may not drop below 175. o, man-in-the-street Hence I look for compromises not ^■. in by prewar standards but portion in the third quarter was strikes. Th^ prospects for indus¬ * general wage increase in wage considerably higher than during virtually normal by prewar stand¬ trial peace would be brighter if ;; What policies should business, ; rates; 2.3% received increases of the first quarter, A gain of nearly ards. employers were better at making labor, and government adopt to % less than 10%, and 25.5% received counter demands which could be promote n $15 billion in the annual rate of stability of production increases of 18%% or more per incomes after taxes produced a Y Two principal conclusions for used as the basis for compromise. and employment during the next: ;•% 4Jh o u r. In non : manufacturing, rise of $13.6 billion in the annual the immediate future of business ; Unless prices go higher than I 12 months?. £59.2% received no general in- rate of expenditures on consump¬ expect them to do, .the drop in I <i: By far the most important con- v follow from this analysis of fun¬ i crease, 25.2% received increases of < prices which may be expected tributioh which business can make tion. Spending for consumer goods damentals. One is that the pros¬ less than 10 cents ah hour,, and in relation to cash and bank de¬ pects for profits depend upon in»- next year will not. produce a ser¬ is to keep down the prices of fin- ious drop in the output of goods; ished goods as much as i only 1.4% received 18% cents or posits held by consumers is still possible, dustrial peace. Had the time lost i more. xYvaY':/ very low, In. 1940, expenditures from strikes been normal, indus¬ The current expectations that ad¬ arid to reduce any prices which', are out-of-lirie with- the general ;Y;Y; on consumer justments in prices will produce goods were 5.17 trial concerns in the first nine 1. 13. Although the edge is rapidly ^ being taken off the accumulated times the average holdings of de¬ months of 1946 would have been large drops in output overlooks price level. Serine prices, especial-' demand for non-durable goods, mand deposits and cash by indi¬ one-third higher than they were. three important facts: (1) the lim¬ ly in the field of manufactured; little dent has been made in the viduals (exclusive of trust funds); In the case of individual com¬ ited number of prices which will goods, are still low in relation to; be affected by the adjustments; costs and may have to- be raised.. (fhuge accumulated demand for in 1943, 3.2 times; in the middle of panies industrial peace means the (2) the enormous unsatisfied de¬ The second round of wage in-* r' automobiles, housing, industrial 1945, 2.5 times; and in the middle difference between comfortable mand for durable consumer goods, creases may compel' some addi¬ «equipment, and other durable of 1940, 2.6 times. profits at present cost-price re¬ industrial 15. Although the proportion of equipment, and housing; tional increases. Even where costs' J goods. ■ v.:'., ,' lationships and large losses. Hence disposable income spent for dur¬ uncertainties in the labor situation and (3) the progress that is being are-high relative to prices, how-, ; 14. Spending by individuals in able consumer made in removing the special con¬ ever, managements should exhaust goods during the profoundly affect business plan¬ (relation to their incomes in the first half of 1940 was substantially ditions which have been holding every effort to cut costs before; ning. v The second principal con¬ second half of 1946 is still below below the prewar back the output of these and many raising prices. Certainly any price normal, the prQ- clusion from this survey of funda¬ other items. The drop in prices which is more than 40% above mentals is that important read¬ will occur in the main among prewar should be regarded as too H justments are ahead in the price farm products and a few, lines of high and reduced as soon as pos-' structure. Moderate to fairly sub¬ IB A GROUP CHAIRMEN "soft" goods, such as appareL Most sible.; YY (YYYYY;&Mstantial drops in the prices of agri¬ finished goods are not high in re¬ ! TheN reason.- why prices • should ^ CALIFORNIA PACIFIC N'WEST ROCKY MOUNTAIN I cultural products \ and apparel lation to incomes and, after the be held down as much as possible V may be expected by summer' and next, round of wage increases; will Js that the rise in incomes since V probably considerably earlier. Ag¬ not be high in relation tot costs., j940j has been- very uneven! Wage\ ricultural prices will be sustained Hence, price adjustments will not increases,! as I have pointed out, V; to some extent by industrial re¬ seriously affect either the buying have varied greatly. * Millions at ■ covery in various parts of the or the production of most manu-r wage earners and salaried work- < World. 0 Nevertheless improve¬ . normal , - * * . . . •• - .. ments in factured goods. transportation will make able The need fot dur¬ goods, industrialwhich cannot now be marketed. equipment, and housing is so ur¬ gent and so large that the demand Increases in farm equipment and for these goods will" exceed the fertilizer will raise farm 'output current capacity of industry, de¬ in Europe. In the United States, spite the adjustments that may .be the increasing flow of durable occurring in the prices. of farm goods will divert some spending products and soft goods.- The high frqm foods. Barring extremely and sustained output of durables, unfavorable crop weather sizable reductions in the prices of farm equipment, and housing will sus¬ tain the entire economy. After re¬ products may be expected within ductions in the prices of food and a few months. Apparel prices are out of line: with incomes* and as apparel have occurred, the lower the urgent demand is met and as prices of these goods will help support the market for durable apparel meets more competition from other goods, the prices of ap¬ goods and housing. The output of durable goods; industrial equip¬ parel may be expected to drop. In order to judge the short-term ment, and housing has been held back by shortages of raw mate¬ business outlook, one needs to rials and parts and by various bot¬ know the answers to two principal tlenecks. These -'bottlenecks are questions: (1) what are the pros¬ gradually being eliminated. The pects for industrial peace and (2) removal of price controls, by per¬ how will the inevitable adjust¬ mitting increases in the prices of ment in the price structure affect copper, zinc, lead, .and other raw production and employment, v materials and of many fabricated The outlook for industrial peace and partly fabricated goods, is fa¬ during the coming months appears "tor me to be good In this opinion cilitating the "removal of bottle¬ necks. Particularly encouraging I am probably in a minority. Per¬ Ijas been the rise in the output of sons who expect much labor trou¬ many building Y materials i and ble point to (1> the large number household equipment. Whatever of important agreements which contributes to higher output and are being reopened; (2) the very employment in the industries stiff wage demands being made by making durable consumer goods, unions; (3) the keen rivalry be¬ industrial equipment, and housing tween union leaders and between helps the economy go through unions which causes economic the adjustment in prices of agri¬ considerations to play a minor cultural products- and soft goods role in wage negotiations; and (4) without bad effects upon output the increasing difficulty of em¬ and employment. ! ployers in passing on wage in¬ All in all, the outlook for pro¬ creases in the form of higher duction and employment during prices. My optimistic view rests the next nine to 12" months ap¬ in the main upon two facts: (1) the appreciable number of large pears to; me to be considerably available supplies of raw material consumer , Mark C. Elworfhy Sherman Ellsworth . Edward B. Coughlin PACIFIC NORTHWEST COMPANY • UNDERWRITERS * Senvbtf '•DISTRIBUTORS The Pacific Northwest •dealers , 1 since 1913— through its predecessor com¬ Markets Maintained in panies, Ferris & Hard grove, PACIFIC NORTHWESfiv heller, Ehrlichman Company, .SECURITIES ATT SEAT 187-188- established 1913, and Drum- established 1921. - EXCHANGE BUILDING '' • SEATTLE SPOKaNE PORTLAND ABERDEEN A TACOMA YAKIMA EUGENE BELLINGHAM have had -ers small - no increases or only ones/ Interest rents, dividends, - pensions,-• and :■ annuities have riot been adjusted ! TRADING MARKETS strong reluctance of both employ¬ will drop to 140 before next fall. and the rank and file to This appears to me to be unlikely. ers come involved in strikes. be¬ There is Unless the index is forced down FOR far more room for compromise in by a great wave of strikes, BROKERS, DEALERS and BANKS IN I farmers next-year-have risen rap*- i •<*. idly, but nexj year; these incomes ; ' irivill be substantially less; than this . ; The second round of wage increasing maladjust¬ ments in the wage structure be¬ cause these advances are going. in the main to the very persons who received large raises last year. The large accumulation of urgent demand prevents the uneven inyear. advances is incomes from in crease MINING STOCKS a specialty of dealing la Murphey, Favre & Co. ESTABLISHED 1888 INVESTMENT BONDS CHILD, IXC. Members of Salt Lake Stock & STOCKS Exchange Sponsor and Distributor of BBOKEBS Composite Bond Fund, Inc. + Stock Exchange Bldg., Salt Lake City 1, Utah Telephone 5-6172 . i . . prices and should not readily as- ' sume that prices which moved !; goods satisfactorily in 1946 wilt ' .do so in 1947. , ;Y The first step in holding down prices is to avoid wage increases : f this winter which will compel ; ; further advances in prices. -Some : unions, sensing that the cost of ! living is about to fall, are hasten¬ ing -to get wages adjusted to the recent temporary rise in living • costs; Despite the good profit ' . - record in many industries} wages ! cannot be raised as much as the ; recent increase in the cost of ing without forcing many liv- ; advances in finished goods.; With ad- ; and thus force a further advance in ; the; prices of many • finished goods, employers would serve themselves, labor, and the community by refusing to make wage increases which require price; increases—except in the case of the workers who did not participate in the first;; round of wage inor in the case [ ; ; ■ : ; v * Y : Y Teletype SU 67 SPOKANE 8, WASHINGTON * Bell System Teletype-SP 88 • ; of occupa¬ industries which need to ; in order to eliminate » ; V in production. In • time to : adopt a wage policy which will ; help force down the cost of Irv-; : : ing toward the wage level rather' ; than to force it up still further., If Y pay more bottlenecks further increases are not forced in the prices of * the present ; finished goods at time; the price struc- ture will be more favorable to em- ; ; ployment after: the prices of farm products fall. Much of the contribution of business to keeping down prices must take the form of reductions in costs.. Managements are always r i , > other words, now is: the mining stocks of this locality SINCE 1898 W. H. •; in incomes. Hence, concerns should be conservative in raising v ; creases or YY Y ; immedi¬ rise tions We have made i : ately limiting the market fbr ! goods. As the urgent demand is met, the market more and more feels the influence of the uneven . UTAH , upward td offset the. rise in the : cost of living. The '{ incomes- of j justments in the price structure about to occur, the time has come to stop the spiral of wage increases producing price" increases, which in turn produce demands and important settlements which better than most business analysts for further wage increases; have recently been made without predict. I have seen estimates that Instead of letting wages rise in strikes and (2) the obviously the index of industrial production proportion to the cost of living ■ - payments,» ?; ; > Y Volume ak * .ji Number 4550 164 THE COMMERCIAL & FINANCIAL CHRONICLE v.-) r . 3099; doing this. Recent progress / in half in dues each month, gets the system proper authority to regu¬ cess of various groups in getting eliminating bottlenecks and re¬ members a sizable rise in money late consumer credit. large handouts from the govern¬ placing old r: equipment is not wages every few* months.. Such i Some people regard the pros¬ ment My guess is that, govern¬ spectacular, but it is steady and' members- obviously cannot be pective drop in agricultural prices ment expenditures over the next it adds up in the course of a few counted upon to stand by the as a reason why credit policies several years will average $35 months. T Expenditures on indus¬ union in* times lot/; adversity. should be billion a year. This is considerably liberalized.. Such action trial equipment, for example* rose Unions have need to broaden their would be premature. Agricultu¬ higher than I should have guessed from an annual rate of $8.5 billion activities in order4 to make a their ral prices arc year ago. ':■ ■/■; dangerously, high a year in the first quarter of 1946 interest iri -the organization less and should be In the light of this analysis, the slowly forced down to $11.0 billion in the third quar¬ exclusively /anarrow economic without delay. If consumers are proposal to cut all income tax ter* > Two important steps which one. / Working /with ■ management compelled to buy durable goods rates by. 20% seems premature. could help-hold down prices have bp and production 4 problems / is /one housing out of the savings of Obviously it does not rest upon a not been taken by most concerns. way of doing this; ;/'/. V ,11 / i. * the community instead of being careful analysis of the needs of They are: (T) getting trade unions the government. ; Furthermore, Labor's interest in wage poli¬ permitted to use bank credit, to help in raising labor when tax reductions are made, efficiency cies which do not fprce up prices prices in general and agricultural and (2) negotiating agreements is plain—especially after the un¬ prices in particular would be put they should be carefully designed with-unions which assure indus¬ to increase the supply of venture even rise in incomes during -the under mild pressure. As a result, trial peace for two or three years. capital because, in the long-run, last several years. I wish to stress, the abruptness of future price ad¬ ^ Many unions would undoubted¬ however, the golden opportunity justments would be mitigated. shortage of venture capital is ly be unwilling to cooperate with which unions have to win pres¬ Certainly present credit policies likely to be the most serious limit : . ctuuvc who could/ be of much help. tige and good will to well as should not be permitted to. force to as the; prices of farm products and thus to aggravate the drop in those prices which will occur in the- near future; \v,"" 'V;v/ »' up general economic to raise their own vl-l;;/. stability and bargaining power in the long run Nevertheless, there is far more by negotiating agreements which :tyillingness/ among unions to co-f would definitely rule out strikes operate with management in rais¬ for the next two or three years. It ing efficiency than has been able is doubtful whether the strikes of to express itself—simply because managements have not attempted ?\ to create thenecessary machinery for cooperation. make to can keeping down prices promoting industrial peace. The record of the last year shows that present prices are high enough to enable business to earn comfortable cerns con¬ profits provided there is industrial peace. have year _ been worth thus raise the demand for labor improve the long-run bar-, gaining position of unions/ Does vision to laborV interest see assuring, industrial: Assured industrial peace, business concerns position to wpuhl be in a savings in costs in the form of pass on fairly promptly prices. Hence, industrial peace becomes a major step in a program to keep down prices. The strong bargaining position lower v of business concerns at the pres¬ ent time gives them a golden op¬ portunity to make a major con¬ tribution industrial peace. Man¬ agements should abandon the practice of making substantial concessions to unions How without getting anything in return. The most important concession that managements can gain in return for wage increases this winter are agreements which run for two or the can // iri / mote business ent tax rates may next billion. stability during the The principal contri¬ year? bution which the government can make is to discourage the expan¬ sion of Under present in prospect create credit will the danger faster expand than output. When this happens, demand rests on an unstable foundation. It is bound to drop as Restrictions of credit are debt regardless of whether these Such agreements would not prevent re¬ opening year wages at least /once a in the event of a substantial rise in the cost of living, subject to the provision that deadlocks . would tion. be submitted A to substantial arbitra¬ number of agreements in steel, automobiles, rubber, meat ; packing and elec¬ trical equipment industry assur¬ ing industrial peace for two or /three, years ; would/be strong boost to business confidence and would provide a strong founda¬ tion, for a program of gradual reduction in prices. Organized labor can contribute duce or even to on many eliminate run a its surplus deficit. are income, or . ' v The double revenue Taxes come This regula¬ war powers The new of Congress should promptly give the Reserve SEATTLE PORTLAND Brokers • O i. , • be dividend on the dividends No time should be lost by the new, holders of power in devising ef¬ fective programs to promote sta¬ in¬ bility a third step would be to tax dends received by persons bringing in home union that each shares the divi¬ sponsibility for keeping the with omy >:■* \t an cy; (2) by adopting wage policies which do not force up prices; and ! A .V--A- Washington and General Market strikes for the immediate State and • : ■' . f agement in increasing plant effi¬ ciency would increase the capa¬ city of unions to raise real wages as distinguished \from merely raising money wages. During the last year unions have succeeded in increasing money wages, but in to an * a of several billion dol¬ in excess of current needs. of the next five years will boom period which means • : arouse would and* hold their members. also help interest the As a be a M! * SPOKANE t-u'u 1 7/' •!"'-* tf» f 1 ,i,' ; ' Underwriters • \ * J !r . OF SEATTLE ;. ' u ' .//• • A " _ Teletype SE 2 6t Telephone Elliott 1505 . \, v 1 f^^i'''' r v * • ^11 ■*' f' ' * 'ft*; Municipal Bonds U. S. Government Bonds 'it' .V'.y /■/;/;/: FOSTER virtual ,doubling of union mem¬ bership during the last six years, unions have millions of bers who regard the sort of slot machine turn for a dollar as which, in or a re¬ dollar and a - New { yV# MEMBERS York Stock : ^ Exchange and New York Curb (Associate) , Seattle! 4, Washington . 820 SECOND AVENUE, SEATTLE 4 Teletype SE 482-483 a Seattle-First National Bank III BOND DEPARTMENT MARSHALL Municipal and Corporation Bonds Cv- :■ ;:;v: new mem¬ union & Telephone SEneca 0680 r MAin 3131 i - \ v 4 j g ltr //-//./,'yg/i Seattle 11, Washington EUGENE Dealers 1 The National Bank of Commerce J period when The needs of the government will be determined, in the main by national defense, and by the sue- >*,» [' _ to of result of the fc ill/? if BOND DEPARTMENT / reduction of the' public debt will contribute to economic stability. hour's pay. management • they have failed purchasing power of Cooperation with rS/'v'- 1 long-run industries raise the M-, T U. S. Government Bonds !'w?":ISTSSf SfiSf-H'*" v•'' ■/> - most : i§ ex¬ PACIFIC NORTHWEST SECURITIES man¬ *. Municipal Bonds TRADING MARKETS MAINTAINED future. Participation by unions with ' ~l')f State and (3) by pressing for two- or threeyear agreements which rule out ' }« ' stability (1) by pressing opportunity to work with management to increase efficien¬ re¬ econ¬ stable. to business for to leaders of each terprise and the A distribution. and the managers of each business en¬ profits of which the are > or dring' most of the/next that this will ■ that business assure the Republicans will do a good more by giving individuals credit needs of the government. be set1 to provide five years Most the President. of should revenue lars production. At the present time regulation of consumer cred¬ it by the Federal Reiserve author¬ the substantially taxation lohg-run tax policy of the careful estimates of the whether it is used in consumption upon or government should be based upon or tion rests trols does not against general income. A second step would be to eliminate the sary by the savings of other persons. The banks and the Federal Reserve System are under pressure to facilitate the expan¬ sion of bank credit regardless of ities is .under fire. At best able to take risks and to perience to teach-.it that quick changes in fiscal .policy are neces-? financed by an/expan¬ sion of credit The eliminated. were they could point to many blunders in the operation of con- Unfortun¬ lessons in the school of more, never debts are controls fact that less, mo thing is gained, in the supply venture capital to prefer short run at least, by challenging secure investments. The first step the demand. Whoever makes the is tax changes, therefore, should economic policies of the country be to reform this major defect in will be expected to do a far betters the tax system. One step in the job than has ever been done be¬ attack on this general problem fore, in keeping the growth of pro¬ would be to permit capital Tosses duction/ and* employment steady. to be offset to a limited extent conditions, with tion prices considerable part of pressure Re¬ prepared to responsibilities. They lack definite programs. Dur¬ ing recent years they have argued strongly that all would be well if changed until the country has had the on taxed. the nor well new job of running the economy now that the opportunity and the res¬ ponsibility is theirs. Today the than half. Since the government community demands / security allows' very limited loss offsets,; more insistently than ever before the high marginal rates of taxa¬ in its history. In my opinion the tion-cause the very people who demand is overdone. Neverthe¬ that ately the fiscal machinery of /the new ones. are business are these assume the government takes half of any increment of income, and above government is not. well designed soon as the expansion of credit to make: quick changes in fiscal ceases,It is. bound, to drop still policy. So great is the inertia of more as soon as people begin pay* public opinion that the fiscal ma¬ ing old bank loans faster than chinery is not likely to*; be they incur Neither publicans $20,000 a year, for example, ■ against the enterprise during the /agreement. well exceed $6 strong and a the price structure too high, this surplus is not too large. Devel¬ opments during the next six or nine months, however, may well require that the government re¬ portionate rise in production. The large purchases of durable con¬ sumer goods and housing which are which incomes shifted to the- Republican Party much of the responsibility for determining the government's contribution to stability. / for the tax paid by the corpora¬ upward credit except where this expansion makes possible a pro¬ that ex¬ cash outlay by about $4.6 billion. As Treasury estimates of income are usually on the low side, the cash surplus under pres¬ government pro¬ life the cut, the Treasury ceipts of the government will ceed expansion popular. Con¬ three years and which bind the cerns like to expand their sales by union to engage in no strikes encouraging customers to go into of not Although a bookkeeping deficit of $1.9 billion is indicated, the Treas¬ ury has estimates that cash re¬ in /the peace are estimates income at $39.6 billion. the labor movement have leaders with the economic insight and the opera¬ seriously interrupted by If taxes and ever, strikes. esti¬ pf peace iri the principal have; been made /public./ For the for the next several present fiscal year expenditures years would stimulate long-range of the federal government are ex¬ planning by business and would pected to be about $41.5 billion. country's key industries for the are upon mates of the needs of the govern¬ ment. No satisfactory estimates At any rate, next several years? high/enough/ how¬ to produce a very satisfac¬ tions policy must be based assurahce' Prices arenot tory annual statement if - last ■Z Of great importance is the bud¬ get policy of the government., This industries : / Particularly important is the JconMbution / ^ichImanageirient by the their cost to labor. at for keeping the stable.. The - elections economy have system is the high marginal rates about ,.r responsibility most > IV wartime controls be eliminated has shifted to business most of the r. the level of employment. The serious fault with the tax on CUliUUllU a The insistence of the public that „ contribute gAVCU — year) at lower surtax rates than general income. . ' managements in cutting costs. Some which would be > willing might lack union representatives . . (say $10,000 Teletype SE 489 THE COMMERCIAL & FINANCIAL CHRONICLE Salomon Bros. Hutzler Edwards & Holt to Be Abbott Proctor Partners To Admit Shaw & Simon Abbott, Proctor & Paine, mem¬ bers of the New York Stock Ex¬ change, will admit James N. Ed¬ wards and Bernard S. Jan. partnership as have associated been of Holt to - Salomon Wall Bros. : 60 City, members of the New York Stock ship Holt is manager of the an Hutzler, 1. ^ Both Exchange, will admit Leo G. Shaw with the and Charles J. Simon to partner¬ Richmond,- Va. office, 911 East Main Street, for some years, Mr. being & Street,■, New > York associate manager of Jan. 1, 1947. as 1 department." of that office. Mr. Shaw firm's arbitrage >'■ . \ >: j.r A COMPLETE FINANCIAL SERVICE We offer complete facilities and personalized service regarding investment and underwriting. 244 BAY STREET, TORONTO PHONE AD. 9371 437 ST. JAMES ST., W., MONTREAL PHONE PL. 3932 ; , v CENTRAL STATES rrvr.m Collier, Norris & Quinlan •' ' ' / ' .' members MONTREAL v>? STOCK MONTREAL 1 - ' V EXCHANGE "CURB MARKET Alfred S. Wiltberger Aldred Collier, Norriss Quinlan LIMITED members , The Investment Ewing T. Boles Building, Montreal Dealers , , • ' Canadian SiliSIKil are Securities Invited - Association of Canada Montreal Toronto DOMINION BANK BLDG, HURON & ERIE BLDG. TORONTO, ONT. LONDON, ONT. ADELAIDE 1385 METCALP 4500 Railroad, Public Industrial Stocks Specialists in Utility and Paper Securities CANADIAN INVESTMENT SECURITIES Standard Securities 3rd Company Floor, C. P. R. Building BELL, GOUINLOCK 6- CO LIMITED 69 YONGE STREET, TORONTO ESTABLISHED 1920 V Telephone—Adelaide 5441 TORONTO Magnus T. Paulson William D. Ross Gordon C. Simpson Thursday, December 12, 1946 u juh'MI f THE COMMERCIAL & FINANCIAL CHRONICLE Volume 164 " Number 4550 /.I, Survey. articles He contributed has , foreign trade, to vari¬ ous,iscientific journals..'v • during the 12 months period end* ing Nov. 30, 1947 to 100.3% for the 12 months ending Nov. 30,' 1980, on , Chief s of < the Foreign Credits Branch is Mr. Gabriel T. Kerekes, who joined the Division in May, 1946. Prior to his service with the Offers $30 Million | Phila. Electric Beads and thereafter at par. , , . The largest project in the con¬ consists of work struction program cording to custom nomination fngersoll Nominated to tantamount to election.. Other Head Phila. Sec. Ass'n Branch. Both prior to and follow¬ ing his service in the Army from October, 1942, to November, 1945 (which included with work the Far Eastern Division of the Office of Strategic Services), Mr. Drei¬ man taught economics at the Uni¬ versity of Minnesota. He has pub¬ lished articles in technical jour¬ nals economics, and served as economist with the Research Di¬ vision of the OPA in Washington. * < on Unlike the Branches other of the Finance Division, the Ac¬ counting Branch does not main¬ tain direct contact with the Aus¬ trian Government other the or three Elements, its responsibilities <—which are very considerable— j , together with proceeds from the recent sale of 300,000 shares of new 3.8% preferred stock will be used to provide /approximately $60,000,000 of new capital for the company's construction program through 1947. Temporary financ¬ ing for part of the program has been provided through $18,000,000 of short term loans represented by promissiory iy2% tired the from of proceeds financing. solidated after the new stock and bond financing sist of of preferred lt<T Alll the Board Harold Scattergood, Newlin Davis, Snyder, Yarnall & Co., and Wil¬ liam B. Ingersoll. ; stock. common '::S3|§ Government, Municipal J# engaging in business from of¬ securities Fifth 175 City. is Welt L. Harold £■' H|f!l§ Public Utility, Industrial ; Harold Welt in NYC York SHED 1903 Canadian Securities stated value Avenue, New y All issues quoted and dealt in, Dominion-wide service,. , , Toronto - New York - all funds and supplies channels ment of the IBA GROUP CHAIRMEN Austria., Chief Kelison R. in Branch MISSISSIPPI MINNESOTA is Mr. VY. \ ~ Royal Securities Corporation T Limited Helms, who succeeded Major Al¬ fred, B. .Hecker. Mr, Helms,, also In' private life I associated with Price, Waterhouse and Companv, joined, the Finance Division in November, : T945, v after \ having served in the Army since 1943. He became Chief of the Accounting Branch after Major Hecker's re¬ 244 St. James Street West ■- 1 , Toronto Hamilton ; .. ' v,Halifax . . - V Montreal 1, Canada Telepfcorie^HArbour 3121, :, Saint John Calgary Vancouver :, . Quebec \ " - • , Ottawa Charlottetown . " Winnipeg St. John's, Nfld. deployment. in August, 1946. De¬ puty Chief .of the * Accounting Branch, with special responsibility for Supply Accounting, ; is Mr. Ernst J. McLuckie. ".11 1»" ■1 i. '' ' - ;. 'wxWBW'r" . v\ .. Sunshine Park Racing Clifford S. Ashmun Creston H. Funk Chapin S. Newhard Gairdner and Company Limited Stockson Market Preliminary to the opening on tfan. 15, 1947, of the initial 50-day period of horse racing on its track near Tanipa, Fla;, the Sunshine Park Racing Association, Inc., Investment Dealers Savard, Hodgson & Co.. inc. :v:-; ' Members of The Investment Dealers Association of Canada ' publicly " offered pec. 6, 60,000 Shares; of 25 cents/nbn^cumuLative The securities, of common stock. Underwritten by John K. Walters t INVESTMENT DEALERS preferred stock and 120,000 shares 276 St. James Street W., Montreal QUEBEC — - Plateau 9501 TROIS RIVIERES SHERBROOKE ST. JOHNS .. Inc., of Wilmington, were & Co., 320 Bay Sheet, Toronto priced at $5 per unit, consisting of share of preferred and two shares of common stocks. Pro¬ Elgin 2301 one from ceeds Savard sale will be ap¬ the plied to additional improvements ■ Members of ; working capital'., of race fbrt the conduct meetihgs£"}i\ ^Pursuant to tween . the agreement be¬ corporation and the Hart The Montreal Stock Exchange ■ : ^ t j . ' ,' to, and further Rehabilitation of Sunshine Parkj'hnd to provide .. The Montreal Curb Market Hamilton Montreal Quebec , STOCK BROKERS 276 St. James Street W., Montreal SHERBROOKE 1i — TROIS RIVIERES Plateau 9501 ST. JOHNS an of M. Russell Dock Jr.^ holders of a permit issued by the Florida State Racing Association, meets will be partnership and C. C. Vega,, held each year for a 50-day pe¬ riod .uary during to the months of Jan- Sunshine Park March... consists of a one-mile track with a chute, mile three-quarter brawley; gathers & Company McLeod,Young,Weir & Company a grandstand and clubhouse, which together with adjacent terraced areas ACTIVE will accommodate approxi¬ DEALERS spectators, and a parking area able to accommodate mately 20,000 3,500 cars. The corporation has recently acquired stables with approximately stalls 600 which will be installed at the Park. Al¬ GOVERNMENT MUNICIPAL - CORPORATION CANADIAN ing the past summer and will be completed before the opening on Jan. 15. .*• Private JPire Connections to New York CANADIAN, BANK OF COMMERCE. BUILDING ADELAIDE Metropolitan curities will of consist Building ;;; Elgin 0161 corpora¬ tion following the sale of the se¬ and Montreal 5821 *' Capitalization J of the SECURITIES BONDS though not in use since 1934, the Park has been maintained and re¬ habilitation was commenced dur¬ TORONTO TORONTO 75,000 shares of 25 cent non-cumulative preferred stock, $4.80 par value, and 300,000 shares of .10 cent par) common stock. . , - . T v Montreal Quebec * Ottawa is ,l Kidder, Peabody & Co.; Harry B. Wire connections: Montreal being confined to accounting for which pass through U. S., military govern¬ on will con¬ preferred of stock and $137,816,005 the scaled from 104.4% if redeemed membership $221,757,064 of long term $57,472,000 debt, Redemption prices on the bonds fices at are For Philadelphia of Capitalization ^ of Governors to serve three years: Electric Co. and subsidiaries con¬ re¬ the - kilowatts. payable These, notes will be. to banks. new notes , announced by" the committee are: Vice-Presi¬ dent, Harry C. Rippard, Buckley Brothers; Treasurer, G. Ellwood Williams, Pennsylvania Company, and Secretary, Harold Scattergood, Boenning & Co. PHILADELPHIA, PA.—William B. Ingersoll, of Stroud & Com¬ now in progress on the new South pany, Inc., has been nominated for Halsey, Stuart & Co, Inc.; headed wark steam-electric Office generating President of the Philadelphia Se¬ of Strategic Services during the an investment banking group that station, located in southeastern curities Association in 1947 by made a public offering Dec. 11 of war, he was engaged in banking Philadelphia on" the Delaware the Association's nominating com¬ first and refunding River, and related transmission in New York City, and had been $30,000,000 mittee to succeed H. Clifton Neff, with the Foreign Funds Control mortgage bonds 2%% Series due facilities. Present plans call for of Schmidt, Poole & Co., the 1946 Division (Diplomatic Section) of 1981 of Philadelphia Electric Co. the ultimate installation at .this President. Election will be held at 101.35% plus accrued interest. location of four the U. S. Treasury. : turbo-generator • at the annual dinner meeting of The bonds were awarded to the «• Mr. Lawrence S. Dreiman, units, each with a rated capacity the Association on Tuesday, Jan. present "Chief of the Budget Sec¬ group at competitive bidding Dec. of 150,000 kilowatts and an effec¬ 14, at the University Club. '• Ac¬ tion of the Public Finance Branch, 10 on a bid of 100.879. tive generating capacity of 169,000 is also acting as Chief of the Proceeds of the sale of the bonds ; U.'-S. Forces and with the nominations Hamilton Sherbrooke ■ London New York THE COMMERCIAL & FINANCIAL CHRONICLE 3102 Securities Salesman's Corner Thursday, December .12,1946,v7 were accorded bigger allotments they fcould make more profits and sell out before they even put up the cash, were nothing but greedy gamblers and not investors and deserved TECTING WILL HE LOVE US IN MAY AS HE DOES a IN DECEMBER? signs of the times in the election results, whichever way they> may blow. /'; •. ' ■.• v'7z//7 :• r'/;/•■ v/--. /: {■.. The new Chairman of the Commission has started off well and in all fairness to him, no one should1 doubt his sincerity when he speaks about his desire for closer and more harmonious relations between the financial community and the SEC. It is about time that brokers and dealers in securi¬ not, there Caffrey knows it still large numbers of investment dealers are who do not call their local SEC offices the telephone, even They don't wish to become involved in discussions of the most unimportant matters for fear that some employee of the agency Will make something un¬ pleasant out of it. This is no fantasy of the imagination. It is a fact that many dealers live in dread of the Securities Commission, and for no earthly reason except that they distrust this agency to such an extent that the less they have to do with it the better. Many, too, are fed up with requests on for routine information. industry, the fact is that there have life for any¬ one to have much faith in the possibility that a continuity of policy and procedure could ever be developed. * For ex¬ ample, does anyone know how long Mr. Caffrey is going to be the head of the Commission? No matter what his policy may now be, next year he, too, may become a judge. Then everybody will have to start all over with a new chairman. That is what has been going on in the past and it is yet too soon to believe that times have changed. What happened to Messrs. Kennedy, Landis, Douglas, Frank, Purcell — and how many more were there? I've lost count! 7*',-j f One more thing that Mr. Caffrey had better get straight before he goes out on a limb, and that is this business of protecting the investor. He is of the opinion that it would be a good thing if those who sell securities would insist that those who buy them know more about what they are buying before they hand over their money. Now he's really got something, but this is exactly what securities dealers and brokers have been doing day in and day out in this business for many, many years. • Yes, and this was so even before their was an SEC. But you don't make intelligent investors out of people by sticking their noses down into a prospectus and telling them to read a lot of verbiage that has been pre¬ pared by ex-SEC lawyers who have written those things in language no one^but themselves and the professionals ■could understand, because if they did it otherwise, someone might get in trouble ten years from now on the grounds that relevant facts had been omitted. Learning to become an intelligent investor takes "time, patience, experience, and posasibly even the loss of some money, And those among .the public who were hollering about free riding in a lot of speculative junk last spring, because they thought if they been far too many chairmen during its short , **A. DePinna Co.—-Class A *Denman Tire & Rubber Co.—Common *Hytron Radio & Electronics Corp.—Common | g *Mary Lee Candies, Inc.—Common ^ : v ■ 1- , ■' W//. f , *Prospectus available on request **Memorandum available There is only protection for one dealer for BY this why taxpayers should Gaffrey subject of protecting the in¬ vestor then he will give the utmost cooperation to those who are running their -own individual business organizations along sound, constructive lines. He will strive to make THE America abroad experienced, men with thorough knowledge of our business, 1 SEC after what has been The he will need since it on ever help from everybody. '' * : - Corporation Washington and You (Continued froin investment bankers to wants will filing registration state¬ ments. * 7 * * Reconstruction Finance 7 Cor¬ made ever RFC, (2) blame waste on poor administration rather than the basic law, and (3) continue the agency in standby original RFC law was sponsored by/ the GOP under President Hoover. as For sentimental political as they reasons well won't yet admit publicly that need for this 7 pre-New Deal agency no longer exists. ,-w , the soundness curities.*, by form.1 Republicans recall that the bonds k Reciprocal will trade < month be when . . ,. of (2) jtl bn * ' * * PHILADELPHIA, Dec. 11—Wil- 7 liam K. Barclay, Jn, a paTtner uL/ St5ein Bros. & Boyce^-was elected President • 55 LIBERTY & Co., Inc. ' / ■ / */// # Vr Treasury men/to help bring this wider distribution of Federal indebtedness by selling savings bonds. Statisticians vis¬ ualize a potential annual market of $1,500,000,000 for savings bonds in customers of investment' bank¬ ers, brokers and security dealers. To date, investment bankers have failed to join other bankers fn promoting savings bonds sales. Now, the Treasury is striving to woo the IBA into joining its un¬ paid sales staff. 1 ' '/7////';:' * * 7/ * the Guaranteed annual wage in in¬ dustry remains purely in the aca¬ demic stage.. Nobody of influence STREET, NEW YORK 5, N. Y. even advocates — take about it Over-the-Counter Quotation Services • ' soon. V//7- . tion Federal from •'///// control i' .Jy For 33 Years // • • are ■ 1 ■ \ 7- " • •* •' ' mur ' V i being at least these, flotations must be 7financedt wholly by private capitakiaiMA h . NATIONAL QUOTATION BUREAU, Inc. Established 1913 77; 46 Front Street, New York 4, N. Y. Chicago San Francisco United States and Canada. Bank will apply to SEC The - Presi-' Winsor, aside sets Jan. a Supreme Court decision holding the industry , to be inter¬ state in scope and therefore sub¬ ject to Government supervision •j „ 3rd,/ B id di e, \ Whelen & Co., vof ; was elected// Win. K. Barclay, Jr. /t- Secretory; andir >/j' Samuel Evans, Jr., ofj The existing New Deal Congress CL C. ,CoI- the industry's plea to lings' & .'Co.,, Inc., was elected/; the court opinion per¬ Treasurer / -z v >;■; >//;/•"// ■ z( /; manently out of operation. There' Spencer D. i Wright, Jr., of, a good chance the incoming Re Wright, - Wood & ; Co^ retiring publican Congress may ; prove President, was elected .• to tb® 7 more sympathetic.' board, of governors for term ex- ' rejected legislate , ' American - joice - may Ire-* business appointment of over as O. Ambassador to7 The Senate will con- Gardner without demur. < England. " firm Although ; Democrat who hetd a New Deal appointive office, the North Carolina business man Kaelin & MeConnell of St. James, he will; remain* a Street;/New York City, ; members of the New York Stock Exchange ■ the, capitalistic system7 which > brought him personal wealth... '• ' */ • - * * . whisper stage, watching. . vt. .* Republican f but ■ Hs may • . * Robin bear - : ' Hoods Office of Harden,;! Wall exchanges, win admit McConnell Rollin M. partnership to as osf Jah;:l, 1947. ' Mr? Kaeliniaaas been ryith .the firm for some time in the bond' . department-: . Mr. McConnell has been manager are bending their bows at the State Department's and other institutional ; , Baker, Weeks & William R. Kaelin and ♦ Airline merger talk is heard in important circles here/" • It's in the - • lost his perspective dur¬ ing -the reform drive againstz private enterprise. In the Court sagacious, practical exponent of v » piring in 1947., . and Edward M. / Fitch,- Jr.j- ,o£Fitch &z „Co~, ) Inc., ^and Theodore Mead, of , The First Boston Corp., / were ; elected for terms expiring in 1949. Baker Weeks to Admit • never for registration of its bonds» hopes all States will make them legal investments for insurance com- - until effect 1947 ' time c e in Bank worried by a in some investment circles.; of Co. & /elected; dent; James D. *".J *"/ officials growing mur¬ Gates Drexel Existing law against securities to be issued by the Bunk. Ifs agreed for the of *, meet¬ Lloyd was in¬ as . terstate commerce. . ,. International Club r ing held,/last ndghtzv(Wed-; nesday, / Dec.' .11),/ at / the Racquet Club. H. > it i Bond the Club's - annual industry has been en¬ couraged by Republican election win to renew the fight for. exemp¬ seri¬ ('Max Gardner ously the recent recommendation by a bloc of Federal experts that immediate steps be directed to¬ ward industry-wide guaranteed yearly pay. Congress may rtolk about the idea, won't do anything the at Insurance < invesii&ehi^ not of Philadelphia, •z/r v by • { i urged »• ■' ■ i •- in Barclay President of Philadelphia Bond Club changes for ratifica¬ elimination, of. the debt * the speedier erans;;• rather v thane inadequate 7 houses for sale at inflated prices. / voodoo * * "r " secrecy shrouding the Odds are concentration: making of such pacts. better than in the event they'U win: ,on hands of the banks, both issues. wealthy and well-to-do ; has * * * -7 7.*K:< 7;Vr:' Treasury 7 economists worried. % y;vr. Installment ^buying They're afraid a depression may restraints come are slated for/ further: modifica¬ along with most of the 7 Government's obligations held tions., And you can mark down one ; thing by these three classes^ of ^in¬ saa/ .almostcertain vestors. To cushion the crash, Federal Reserve Board, won't get they want Federal securities; permanent authority to regulate such credit. more widely distributed. ' 5 J 4' 7 / and more * ond, industry will be encouraged 7 to. erect rent projects for vet-J next ' /;/ National mirades expect But at least two con- . struct!ve steps are-certain. First, additional suffocating controls J over materials will be lifted. Sec- 7 and deals to Congress tion,/ and ^ lousing; tariff all Don't ! direction ,of Reciprocity Information opens hearings on projected modifica¬ tions in existing pacts. High tariff Congressmen1 will demand (!) submission > , This whole Committee 1 If want a. copy,, write to Charles Shaeffer, .Treasury Di-\ ' jectox of Public Relations. f 1 i * ' j * agreements precipitated the RsL +RC Rni pou z ■/ / /////; * law faces amendment issue • : (R—Rc) se¬ the * t /// * ; ... z of ^ I loss: of Federal 'teithz:^&:,'^ermin6lou^7-ds'i Rsi be over and for¬ be subsit- In a pre-publication zf. Treasury statisticians ; bewildered financial / writers'7 : bination of facts which has pro¬ voked considerable' skepticism poration will be overhauled, won't be dismantled. Congress will (1) call for the first public, accounting dis¬ of revenue. general obligations se¬ cured by general assets of the Bank, No government guaran¬ tee, United States or otherwise, will be attached. It's this com¬ paperwork problems for corpora¬ tions The taxation which might review, co-^ parties an$ banks. operate. ' Offhand, this looks like - tilted- without 3012) page Structure corporate profits into various tax delves mulas Tax discusses inequities in- double tributed - Herrick,Waddell opus the * ' 1 f - the Treasury Department under the appellation "The Postwar born was < a better title for an 80-page technical study just,.released by be are going commercial zBringing in the sheaves might z the servants of the people and not their lords and masters. Meanwhile it; is up to all who are desirous of better relations to give the hew chairman their coopera¬ tion. If something constructive is now to come out of the they industrial, . and financial institutions; " PERSONNEL OF THE COMMISSION which comes in con¬ tact with the securities dealers and brokers conscious of the fact that be forced finance these wandering trou- Dadours, (2) - why inexperienced youngsters, are being hired at $6,OGO and $7,000 .salaries without any qualifying examination what¬ soever, (3) why State Dept. hasn't sought for this task of selling country to when he discusses the means foreign, assignments to peddle this contrivance, will find out (1) continue to lead the way through education and sound ad¬ vice. This is a long, slow process. If this is what Mr. , request in outfit is hiring hun¬ American, ideology.7/ A Congres¬ sional committee will investigate THE the' investor. That and broker • on THAT ,0 for the securities In addition to the Commission's past record of coldness toward the securities • FACT they did last April, THEY ARE ONLY KIDDING THEM¬ 7 is for information that have been made in the past. { THE SELVES. (Continued from page 30X1) or ABOUT PUBLIC WASN'T GETTING ENOUGH OF THAT STUFF, as ties lost their fear of the SEC. Whether Mr. ELSE, A SQUAWK Cultural dreds of young ex-servicemen at ush salaries and training them money. IF THE SEC THINKS IT WAS PRO¬ THE INVESTOR, OR ANYBODY MAKING and high-sounding airs.:, That propaganda to lose their By JOHN BUTTON Information lonal Ail of the Detroit office, Penobscot Interna- .Building. Volume 164 THE COMMERCIAL & FINANCIAL CHRONICLE Number 4550 havior and SOUTHERN of SOUTHWESTERN data wages,In into States IBA GROUP CHAIRMEN several the. United well-defined interesting periods, and the simplicity itself. I would are like to put it before you. I have taken first the from 1933 so • that foundation look ning kind a which we of can future, because you begin¬ an We abstraction some¬ doing it right iin City, the center of the United States, in a room filled with representatives of industry and the press. We are doing it are New York here from Harold C. Evans in their presence and During the wartime crisis Canada was pre-eminent both in point of time and also an the quality of its governmental controls. Disci¬ plined acquiescence to Federal regimentation has become ingrained in the Dominion system to the detriment of private initiative and industrial enterprise. This situation has been aggravated by the removal of controls in this country which has put iur-<$— on the Dominion's posted eoncerning the up-to-date ironbound economy. In order to developments on the company's counteract the natural influences property on the remote Gaspe exerted by greater external free¬ peninsular. Other Canadian rais¬ ther pressure dom, tain lar vis-a-vis the U. S. dollar. With regard to future prospects the Canadian situation as a whole is no use concrete situations we have Not got to deal with. <' onlv will this weaken the Cana¬ We had a period of industrial dian position when price controls recovery in the United States (it are eventually lifted but it also was interrupted, all right, but operates in the meantime as an don t worry about that) that ran inflationary factor.: • •« ' from 1933 to <1939, (Continued from page 3016) ;v/ when .the Moreover, the Dominion has not the talk is about wages and, as World War began. In that pe¬ learned from the object lesson so nection, that the United States, in much riod, the money information as we have in wages of Amer¬ well demonstrated in this country common v with the rest of' the Changes in Wage Trends • ican -we have been in a. this country—and we are a coun¬ favored position because of • try which is simply deluged with geography and because of our na¬ information, we spend an awful world—nbut tive endowment—that we have lot, kind of conditions.'-' that is a the same I don't think from here with much war diate a safe thing to do because is unusual, and the imme¬ aftermath of a war is uh- creased messing around .that has been done. Tbe outcome of a lot of this!theorizing has been tbat it doesn't really matter what you do . ... . moneyearnings. 50 %. They have a rate and undertake for high wage than 'most people imagine. let this: sink in on you KWe flects unusual an rate. a more or ation.-We less general situ¬ increased the rate of 50% and the cost of living only 10%, so that the people that said that you solved your economic problem by raising the purchasing power of wages did not know these figures or knowing them, decided to disre¬ gard them. They were, then, poor guides for us. Anyhow, there are the figures, wages increased or to exert an Now, haVe What ' - .. j * \ in this country- not from sufficiently investment an careful on marked any clear to departure policy based consideration the of underlying factors. Frederick R. Lack Head to American Standards Assn. Frederick R. soon the strict as ex¬ President suing not the case in Canada. minion's final the" Bank of War the of the Canada has D„ve; been directly Dominion bona on formerly was Vice-President of the ASA. George H. Taber, Jr. will be Vice-President of the As¬ sociation for the coming year. He is Executive Vice-President of the was a Refining Co. and already member of the Board of Di¬ of the ASA. W. Averell Harriman, Secretary of Commerce, in a telegram to Mr. Lack hailing his election Do- active than ever, in more en-, Philadelphia Electric Co. Mr. Lack years Loan the announced was at the concluding session two-day annual meeting at the Waldorf-Astoria, New York. Mr. Lack succeeds Henry B. Bryans, Executive Vice-President of rectors was Co., will American the of the bond market here was permitted to adjust itself to a more natural the conclusion it year, Nov. 22 Sinclair Such of Standards Association for igencies of wartime financing be came less: acute the government Since Lack, Vice-Presi¬ dent of Western Electric be said: "In critical the ahead, I envision the ASA Federation technical, of 100 some and consumer , trade, govern¬ mental bodies as making an out¬ contribution to strength¬ ening our national economy." 4 standing - We have been doing it before and we did it part of the s ried about the cost of living, but you raise wages, - you! we worry about it, yet nobody raise a kind of wage, and you hope' takes the responsibility for it, no¬ that the result of raising that kind body is responsible Tor this in¬ , As maintaining the 1933 to 1939 is a short market at an artificial level. As ,a consequence the inflationary in¬ period of time in the history of a country or the history of an In-' fluence of Central Banl^ bond dustry, and that was the increase purchases now has an even greater impact on the frozen Canadia from 1933 to 1939. " \ * economy. This effect is disguised •'Y Let me take the next period, to some degree, which was the period of the war, ^as the war flated. volume of credit cannot from 1939 to 1946. You all know under; the/strict regime of price more about this period and have control, flow into natural con¬ heard a lot about it; and you read structive -channels, but creates > a a lot about it, too. • ; From 1939 to pressure of idle funds on the gen¬ 1946, using the same kind of fig¬ eral interest structure. ures, the money rate of wages Thus when the day comes to increased 80%. I could give you the exact figures but I have a free the entire economy, the Ca¬ nadian economy will be great array of talent here that will ^Poseid tell me in a minute, so I have to to pressure from within and with¬ to do it. to it. border. Now, been raising wages in the United States at still justify r When other to lower it a little bit, you. will force yourself of wage will be prosperity and crease in the cost of living. We into depression,: or into worse stability, and a higher material are just all universally worried Thafs a fine state for* business, and things of that kind. standard of - living and all the about it. I am putting it to you in very things people hope for./ s You do j an intelligent country to be in— but don't worry about that! simple terms, but that is a very not legislate these hopes, you subtle kind of idea and underlies hope for them;- you do not legis¬ Anyhow, we increased the late these goals, you hope for a lot of American thinking.. ; You money wages during the war -80%! All you legislate, all you and increased the cost of see for yourself by ; examining, them. living. weighing this simple statement of arrive at by collective bargain-; 40%.. Again we followed with a the thing I have given to ycmv that ing, Is a pricer-that is all—and second period - of substantially 5 it would be a very popular idea you arrive at that price and you greater increase in money wages demand that price and you-take than in living costs or than in because it is an attractive idea. But because it is a popular idea a position with respect to that prices. Therefore, there was a and an attractive idea, it does not price; or you put it into a Fair substantial increase in the purLabor Standards Act or necessarily mean it, is right, and Jaw, 4ae- chasing power of money wages. I want to make an interpolation we had better; learn about it We cause it is your judgment—right had better learn about it because or wrong—that if you do that, if here. Don't hold me responsible though I am not prophesizing-rd you arrive at that price, you Will for these figures. I did not invent am looking mainly at history to¬ have stability, you will have an them. I take figures from offisome reason separately. . that there is a rela¬ time as a matter of deliberate pol¬ tion between the rate of wages icy for the ; purpose of solvirig It doesn't paid when a person is hired for a economic problems. solve them, but that is another job. or does a job, and the general cut this short. The cost of liv¬ prosperity ;of > the country, ..and matter. We have been in a high; they have always simplified this wage movement for a long time,] ing—this runs down to 1946, you thing to the point where they are so that we are not novices at this, see, September, August, October, some such date—the cost of living ready to say that,1 if you have a and we have a wealth of expe¬ increased in that period 4:0%, high wage rate you have pros¬ rience if we will only turn to its' perity; if you have a low wage use, if we will only pay attention You know, we are getting wor¬ have depression. further and say, if you price levels with , , they think go dealt . - rate you and wage be . that the wage rate-ought that means I will come to later, to be raised continuously and that but that is important—not that certainly the worst elvil or -crime we "have been raising'wages, biit you ! could commit would be to raising theni at an unusual rate lower it some time or other or to for a long period of time. Y contemplate lowering it. v- * We didn't wait until this war Many people now hold that and they hold it because the cannot - to wages, view that inflationary effect on we know the main .facts^ : That While we were doing that, the the Dominion's artificially low cost of living increased 10%, so price may be one of the penalties we level, in a similar way the that people belated effort profited, so far as to pay for saving thrust upon us day depress the rate in and day out all of this un¬ price was concerned, in that pe¬ of interest operates in the same riod from 1933 to 1939—in the direction. digested material. • rate of wages paid to manufac¬ Once again the example set by Where Do We Stand? turing labor in this country this country in relaxing the drive people, or whatever towards lower interest rates has I know froraefforts I make (14,000,000 the number was) and that re¬ not been followed north of the from time to time to find out people, to lead them astray and make them think that things are better than they really are. So there are these elements in the background what it is that somebody knows about a relatively simple labor that need to be considered. I want to add another element, fact, that we simply do not know So the first thing to do is and that is, pople's thinking about them. these things. There has been a clear the deck, so to speak; how lot of thinking in this country we got to the present position in and throughout the world about wages and where we stand. We what van 1 appropriate, proper, have moved a lot. tenable wage policy is and people : I might start this by a general have got themselves all messed statement to this effect, that we up in this. have been raising wages in the We are not immune; I mean United States at an unusual rate America is not immune from this for a much longer period of time usual and tends to mislead Now, listening to this thing, we On the contrary, the ceiling on awfully spoiled, so that 50% wages has been removed and the looks like small pickings in this strict control of prices remains. country, but just put it in its V Just as the action in raising the proper perspective: We have in¬ level of the Canadian dollar tends unsual situ¬ formation that all the rest of the ation and it is very hard to draw world put together and you never conclusions from this unusual pick up a newspaper that is not situation and say, "We are going full of information—I am not sure on 50%. American audi¬ is are been through a very • increased an an capital could very well take note of this admirable procedure. ; ence spend more money on in¬ we labor of course, very, of Canada sacrificed its most effectual bargaining counter—tne 10% discount of the Canadian dol¬ ers being abstract about this thing for there are cer¬ there James E. Roddy By WILLIAM McKAY pe¬ I do into the future with where. a recovery. have we upon the to don't look period 1939. That is to riod of industrial that 3103 - out credit — inflation held CANADIAN BONDS : Y Y GOVERNMENT PROVINCIAL ' MUNICIPAL CORPORATION : m bounds only by strict governmen¬ tal controls—a sudden upward revision of internal prices when removed, aggravated as far as foreign trading compe¬ tition is concerned by the sacrifice of the 10% exchange advantage. controls are A further factor of CANADIAN STOCKS -no mean im¬ portance is the fact that this coun¬ try, in taking the initiative m re¬ turning to a free economy, is now far ahead of the Dominion effort to restore normal A. E. AMES & CO. INCORPORATED its m peace¬ time stability. >y-t-t During the week the feature of the security markets was a flurry in internal bonds which were in demand partly as a result of the gloomy strike picture south of the _ TWO WALL STREET NEW YORK 5, RECTOR 2-7231 4 N. Y. NY-1-1045 . nights—we may encounter the con¬ ditions which make it-necessary to deal with this set of ideas in a expanding border. Free quence firmed funds m The movement however follow conse¬ sharply to 3% ft. did not through and the rate re¬ acted to 4%. External bonds were motionless and the call ment of the Dominion 1948 produced no ^ pay¬ noticeable re¬ an economy, you ever-rising . - WHitehall 3-1874 — ,'vY!" CANADIAN SECURITIES j . you will find a lot of surprising price:-of labor.1 have divided *those figures. People who quarconclusions, because as much as for-purposes of simplicity the be~ (Continued on page 3104) COMPANY Street, New York <5 ir¬ will ciai sources. They are responsible regular with golds, weaker on material and they are pretty good speculative liquidation, and standard of life. But you want to figures. I could quarrel with and base metals reactionary Pager after remember, you don't legislate any them if. I wanted to, but I have more or less practical manner.:, earlier strengthening. During the of those ends; you hope you wtil never ; f think yet seeh any figures that week the sponsors of Gaspe On achieve them. ' ; W somebody could not quarrel with. .Ventures about wages is to take stock and Lt(L, set a praiseworthy see where we stand and I think Now,- we have been raising the I am coining back to quarrel with examnle by calling a in have & 64 Wall investment demand. Internal stocks were again TAYLOR,DEALE ■ New York to keep the stockhold¬ in this country intimately ers Government Provincial . ... Municipal Corporate $ THE COMMERCIAL & FINANCIAL CHRONICLE 3104 if NORTHERN MICHIGAN you practical people—and are is full of practical people that all know about this—you don't this IBA GROUP CHAIRMEN do OHIO room a ing thing like that without push¬ up your cost. I wish I had thought so, the time to say why I but haven't I assertion that and I you don't make the do it without pushing up cost. We did many odd devices that find everybody is familiar with wil¬ lingly and unwillingly. We have added taxes on payrolls on which we have seen only the beginning. Let me cite what knows one the case. Nobody Crosser Bill It industry. Wm. which passed was by an overwhelming majority of Congress, most of whom did not understand what they were vot¬ John D. Burge C. Roney railroad social is a bill insurance and, if they did, should not have voted for it. It imposed ing for upon the railroad industry for certain forms ity 3103) (Continued from page which estimates of social unbiased an a tak secur¬ actuary will cost 21%% of the ' taken But this has reason behind it; payroll. They Now, there is a policy—to pick them as the gospel truth today, these are reasonable years. are prewar years, war years and an industry that everybody knows because they have changed their the first postwar year which I am cannot afford it—and to put an minds about what they want. Using. ,;Y' -ZZ Y7-* additional tax above its wages of Let's take another period,-.Sep-' reled with them ' a year ago, One tember, 1945 to 1946, one year, and .: - a , critical year; the first postwar In this year we converted year. ourselves from a economy war more and figure it is a figure of profound importance, if you want to understand this thing, understand it. do not understand it, we are and we do want to 20 to 21%% on the payroll. that prices crept up on wages— understand, .theyv have been told won't repair that damage at all: that wages can go up without because prices are going to creep costing anybody a penny. That is up on them so fast you won't simple language that anybody can an We might well talk of these things frankly because there is no use keeping them under cover. There are these other charges, also, of which taxes on payrolls for wel¬ If you can economic miracle. raise the wages of everybody and it doesn't cost anybody a cent, then we are performing the^kind miracle of we been able to reason hitherto have perform. why wages are not So that the going up is have been taught that going up and that they without doing any know there but can say this about the nobody is going to in¬ wages less than 10 cents amount: crease are an hour. That is treason. is in the nature of That crime. a You wouldn't do that. is There a third for it is that there reason and the third reason in the United States who is willing, able and prepared to take the responsibility for telling the American public what is likely to happen if you isn't anybody today raising the wages once That is all. ■ There is lack¬ keep on more. - ing that responsibility, because if you raise them once more, this is what you can be reasonably sure , that this time they followed instantaneously will be by a prices for a very simple reason. Some people, maybe, need not raise their prices, but rise wage you go of, any I don't know the amount, crease. can harm. been So, looking into the future, we are going to have a wage in¬ they up has increase. that people is unless he happens to be from that Thursday, December 12, 1946 in people will ♦ have to raise their prices. < The OPA is gone, as was predictable last year this time it would be gone. Gone or most not, it could not have interposed itself against a price increase ^ There is going to be a substan¬ tial wage increase and it is going to be followed a fairly promptly by increase, and substantial price let now me stick my neck out and make. my. final and it is (I run prognostication, a great risk in ? doing this, but this is a more or less friendly audience) it jis the last 'increase for some time to no are for to one. of the books. get this sible one. There big wage increases * little time on the books more some —on is the last It come. It is a mistake It is an irrespon¬ group that asked for thig It is an irresponsible group one. people that propagandized for one, because it ends wage this increases cause it for some adds to time and be¬ the strains and stresses, already great in this eco¬ nomic system which, if you push a so-called peace'economy; If we when wages went up at that rate. them much further, will bring us least, that is what we thought going to commit ourselves to lots So we are in for a wage increase yyy'Y;. 'ZSX ■ Z:zX: it was. We will rededicate it of trouble. I assume you have got fare and social insurance purposes and it will be followed instan¬ into trouble. ; ZzZ'-S/3 these figures. ZvXZ'-/ taneously by a commensurate Let's take a look at are won.: shortly. I ■ There is a question and answer I want to call your attention to this other figure. I take the peak Another is a new idea we in¬ price increase, so that the people period coming and maybe in the things that have been said about of the last big burst of prosperity, vented in the war when we were who use the arguments for a wage question and answer period some this year. The Secretary of Labor, or inflation, or whatever you want prosperous. When you say you increase now to say they have got one will ask one of my col-; who has at his disposal a great to call it—boom—in and out of are prosperous in a war, you to repair a damage done a while statistical agency, made a speech states which was reached so far mean a simple thing: you mean leagues what that trouble is. ago—the damage being the fact as manufacturing wages are con¬ the government prints money and a while ago in which he said that 1 from September, 1929. pays for it. And that is a kind of the 18-cent increase really did not cerned That is a long time ago from one apply generally because, according prosperity that doesn't last. Any¬ 1 ' to the Bureau of Labor Statistics, point of view, but not so long how, it never has lasted, and if people only got about 11 cents on from another. Seventeen years is you look at the logic of it you (Continued from page 3013) ,.■! '-\V the average. Well, that is a fool¬ not a long time in American his- won't expect it to last, so we in¬ ish statement for a Secretary of tary. September, 1929, was a vented during the war, in the result of the present higher prices combined with the wartime Labor to make. It would not be peak. I compare September, goodness of our hearts (we are ening of automobile credit terms from 24 to 15 months, the average^ a foolish statement for a Secre¬ 1929, to the latest date for which generous people) a thing called instalment buyer making a purchase involving a trade-in, must make, we have got figures now—say, "on the fringe," and that can add monthly payments three times the prewar amount. tary of Labor to make if he did , , » not have a big statistical agency at September, 1946—this is a peak up to a lot of money. To illustrate the present critical plight of the great mass of auto-^ But fringe because wages have been going is his disposal, fringe anyhow and we invented mobile buyers and would-be buyers, who do not have the ready cash? but, having a big statistical agency at his disposal, up unsteadily now since 1933 and these things and they are adding to cover the (greatly increased) cost in one payment, we list the^ » ' it was a very foolish statement I wager you are going to be sur¬ to cost.' comparative obligations on the New York buyer of a Ford Super-de~y to make because if he had gone to prised at these figures. ; XXifoZZ Y777Y Somebody is going to talk Luxe car in 1939 and now: 1946 I'Z 1939 /7 his statistical agency he would This was a prosperous country about one of these fringe items, $1,535 $879 have gotten the figures which he in 1929. Of course, things were which just occurred to people v-'f ZZ Cash price (without accessories) 512 293 7 / Yr One-third down payment used to the CIO convention and going on that did us in later, but they'd have to pay for. Portal586 :: 1,023 which I will now have the privi¬ who knows whether they don't go Z "Unpaid cash balance-———i/' to-portal. Then we added a third 131 r' ♦ 58 ; Insuranee lege of imparting to an employ¬ on again somehow or other even item—indirect cost—and that is a •. 644 1,155 Total unpaid balance er's organization which perhaps with the best of intentions, but I very interesting item. I wish I Z':Z :7;. 72 :,777 7 "Finance charges ought not .to see the figures be¬ don't want to worry, you. * This is had time to talk about it/ In¬ X.'• 721 1,227 fore they are shown to a labor a cheerful audience. direct cost is a very simple kind Z'XzX Total balance due— Monthly Installments (24 fororganization. The fact is that at that time of thing, a new thing unknown to 82 30 merly; 15 now) — —- ; Anyhow, in this year, Septem¬ there traveled to this country most people. It is what you pay into at ; , ■ . , ' • short-,' , ... y • ' — • ' ' ber, v.4. 1946—again 1945, U. the from : S. quoting people from all Department of went up i 13%. ; : bu^^re you have three very imi^-pbrtant periods, a prewar period which v was our period of experi- mentation when we were solving \';i the economic problems V United States and when - left with the highest of the we were unemploy¬ ment rate that the United States whom you are of this coun¬ tory worker was in 1929? Some¬ thing like 56 cents an hour. It how you change your without quite knowing you are doing. ; y^'y^Ky' shows you what Now, that peak of prosperity in September, 1929 and the latest month for which we have got a had in periods of was twice the increase in cost of Then we narrow it to the last period of one year, September #45 to '46; there was a 20% in¬ living. , •: crease as against the crease. 13% riod increased 18%. That is, from September, 1929, to August September of 1946, 18%. or There lot is an increase in you use. chart in it in which they compare record. It is not That is the _ a record I made. background on which productivity, the efficiency of we work. labor, with fhe money rate of Let ipe add a couple of other wages from March to July, 1946. I haven't the slightest idea why items to the background. You get they chose those months. You a background like that and you can choose any months you like. get people to work /When it is remembered that one-half of all prewar cars were paying to work at consumed by individuals with incomes less than $2,500, and that higher rate than you ever did about two-thirds of cars going to all groups were customarily pur¬ before. This sounds funny, but I chased on instalment credit, the very crucial potential damage to am not being facetious about it. our entire consumption economy resulting from a continuation of That is a big item in American these severe consumer credit restrictions, can be clearly appreciated.. cost today and it is going to be In this connection the degree of our present abnormal boom demand devilishly hard to absorb. It is must also be kept in mind, with the Federal Reserve Index of Indus¬ in many cases going to be im¬ trial Production showing the physical volume. Of business to be no? possible to absorb, and it is a kind less than 45% above 1937's previous peacetime peak. For it indicates of*cost nobody had any business the probability of a severe business recession (if ' not "bust")? imposing on an economic system which would greatly accentuate the above Cited obstacles from/ which has just gone through the credit regulation. V: ,V thing that this economic system The American Bankers Association is particularly concerned will have gone through in the over this potential threat to the fair and .adequate distribution of a next few years. • . / * .goods, as evidenced by the current Credit Committee in Chicago. deliberations of its Consumer \ 1 ; anticipated recession (particu¬ any unbiased person will say are larly in Administration circles) there must be coupled fhe very low pretty substantial things, these volume of automobile credit which is now outstanding, The present* marginal items that can rise to a outstandings of $331 millions are less than their minimum during the very substantial figure. I won't 1930-32 Great Depression, and only one-sixth of the 1*941 amount.. try to estimate it. That is the Hence the current regulatory borrowing curtailment, particularly. if background, ladies and gentle¬ long continued, will constitute an uneconomically unjustified bar, So you have got in addition to these wage rises, which I think men, that and it is someone on that background dared to ask me With , this general picture of an further reducing effective buying power, to Long-Term Implications predict the future. I don't think that is so hard to do. So, I say Increase in Purchasing Power of. now, as to the future, that wages in¬ Labor are going up some more. Fairly pur¬ depends bti what period I brought with me, be¬ chasing power, of the price of labor, that you cannot match any¬ cause I want to use it, a report of where in any history or in any the American Federation of Labor part of the world for so short a statistical organization which gets out a monthly bulletin with a period of time, and that is the A to in books explained why we were pros¬ perous. Do you know what the average rate of wages of a fac¬ sights order world industrial figure—you all call this prosper¬ republic. ■; Y • 1 ity, all right, but you are nervous From 1933 to 1939 the increase about it—the money rate of wages Y in money wages, was five times of ' a / factory Worker1/ increased the rate of increase in the cost of 107%. That is, double, a little living. In the war period—a more than double, just to show lengthy period from 1939 to 1946 you how this kind of thing works, i —the increase in money wages and the cost of living in that pe¬ ever .. over the and wrote try that got into common circula¬ tion during that period, and they 'Went up ■' 1920's about the prosperity ^vriitrhefcost of living in that period -■ct the 20%. Figures are interesting: 94c ; vto $1.12, $1.11, $1.13—there is no j'l fuse worrying about a cent or two. • in Labor—the money wages exercise of qualitative credit controls by the Federal Reserve Board may be defended as being theoretically sound*; Nevertheless, when seen in the context of the entire economy, and soon. They will go up no matter particularly of the monetary and credit operations of the Treasury m what happens to the coal dispute, as well as the Reserve Board itself, their application to consumer though the outcome of the coal credit must be seen as inadequate, and inconsistent with other far dispute may affect the amount more powerful inflationary stimuli set in motion by the very same, and the timing. They are going up! or other, branches of the government. Our Federal debt has grown Now, why are they going up? eight-fold during the past decade, and our money supply has trebled Because large numbers of people since pre-War. In, proportion to our "super-modern" machinery in this country have been told for producing floods of inflation, the consumer credit dam will have they should go up and they have no greater effect than a straw., Let the Reserve Board and the Treas¬ been told something more; they ury concentrate on fundamentals! ■ v Y • •• ; , ; ; / The foregoing treats of the overall economic phases of the present have been told they should go up consumer credit situation. and can go up without doing any But there are also the traditional objec- tarm., ,,,Tq .translate, The permanent U yop. fOj consumers' ;grqunds*|whiqk Volume 164 Number 4550 . THE COMMERCIAL' & FINANCIAL CHRONICLE 310# some. Reserve officials are presently voicing. There is also the "personalized" objection based on fear of the borrower as well the lender not being wise enough to abstain from overextension. have particular interest now—for this industry is, above almost as others, *' i?1'6 recor<* has consistently disproved this. Ever since the start business in this country by Cowperthwait & Sons, individual's management of his borrowing has consistently con¬ founded the skeptics. unimportance of the as a typical year, we find the following as the one of the "Big Three' finance companies. Total only 1.6% of new car volume. Net losses 4U trouble' one percent pas^ ^ue accounts two-tenths of If the , only four-tenths of Jul ?nc* to but . one (based recoveries through on the end of the as year amounted percent of outstanding dollar volume. on grounds of potential future injury to of this past record—surely restriction based objection be voiced lender—irrespective thereon By BRUCE WILLIAMS record of repossessions aggregated were availability of should at least be confined to banks, who acting as trustees of the public's funds. The Federal Government is not justi¬ fied in playing self-appointed nursegirl to the privately-owned finance companies. are Penalizing the Underprivileged der almost any management. We quote: . "The old idea that investment managements have 7 formula, future the or with endowed are dies hard. some difficult, and the least ceptible to sus¬ with those of the "ChronThey are presented as those of the author only.l cide some magic singular ability to foretell the and $27,027,000 Special Dis¬ were tributions. On Nov. 1, 1946, net assets of to a fixed Compared with a the 10 Keystone Funds .amounted to trustee, the doctor or the lawyer $153,655,100. find their paths well marked. reduction CHEMICAL - The Reserve Board has said that the issue of continued Govern¬ ' our weaknesses, as well as our by the Congress—that is, whether strength, how can we hope to enabling Executive Order should be vacated, or whether the au¬ make real progress in any line of thority for such regulation should be continued by specific legisla¬ endeavor? 7 7 \yy y,7.-,.,7 tion. Whether the Board is wholeheartedly sincere or not; let the in¬ f "No one should put his invest¬ coming Congress follow the urgent dictates of sound economic policy ment dollars under the care of a —as well as the recent election returns—by deciding that the small management and expect the imr consumer shall not be thug sabotagedl v >.> ' 1 possible, or hope even, for the im¬ ment restriction should be decided the , evident to OF Group Securities, inc. that among the combina¬ Commonwealth has outstanding, as it leads them in three of the five periods com¬ pared, and is in second place in tion funds, been the other two." - . . a To do eventual so will lead only The disillusionment. prospectus on request Diversified Investment Fund Hugh released W. Long two new Co.,. has just & folders on DIF six advantages in owning investor should not expect that its share and indicating its cur¬ management will always get out rent yield to be 5.2%. This lib¬ of the market at the right time, (Continued from page 3015) eral rate of return is the highest V. and back in again at the right available on this fund lie stable or even increasing. But anytime formerly had. Yet there has been time—or that the value of his in¬ of the volume of within the last 15 months. money is in¬ no increase in American popula¬ vestment will not fluctuate, of creasing more rapidly than the tion, productivity,; or volume of The Long Company also an¬ that there may not be times when volume of goods, buyers will bid trade to offer any kind of justifi¬ the current market value will be nounces increased dealer compen¬ tip even this increasing supply. cation for such a change. sation on conversion from one 7* less than the original amount ac¬ Then the price rise is not due to The figures for bank deposits cepted for investment. The art of Series of New York Stocks to an¬ a shortage of goods; it is due to are every bit as other. The following percentage impressive as investing has not yet reached the increased money. And we have those for currency. In June, 1929, stage where we can look ahead charges on conversions now ap¬ then a simple inflationary process. one the eve of the great collapse, and plan—with a feeling of com¬ ply. Formerly these charges were Because a dollar always sells demand deposits stood at what plete confidence, in the accuracy divided between the dealer and for a dollar people are deceived was regarded as an imposing and of our forecasts. Probably it never the sponsor; henceforth the dealer about its stability. Nothing needs dangerous height, $55 billions. will. People have been trying to will receive the full amount. greater emphasis at the present Four years of depression reduced do this for a very long time—but ^Yyy'Y Net Percentage time than the simple truth that a this, by June, 1933, to $41.6 bil¬ it is the unexpected which usual¬ ■7 Asset Value Charge rise in prices and a decline in lions. Since that time we have ly upsets the best laid plans. 7 $ 0—$49,999 3% the value of money are different had an almost uninterrupted ad¬ "What then, you may well ask, 150,000— 99,999; Y'. 2% 7 names for the same thing. When vance: $57 billions in 1937; $66 should be the function of invest¬ 1% 100,000— up the Sunday newspapers in certain billions in 1940; $74 billions in ment management? First of all, cities rose in price from 10tf to 1941; $81 billions in 1942; $110 such Chemical Shares ; 7 management should operate 20£, a dollar would buy only half billions in 1943; $136 billions in along tested, common sense lines. Distributors Group has an at¬ as many papers, but 10 papers 1944; $162 billions in June, 1945, It should not hold out hope for the would buy twice as many dollars. and tractive new folder available on $168 billions in November, impossible. It should be progres¬ The price change came not be¬ 1945; and $170 billions in August, Group Securities' Chemical sive, yet at the same time keenly cause paper and other newspaper 1946, the last month for which aware of the lessons of his¬ Shares. The following excerpts cervices and supplies were dear; we have complete and accurate tory. ..." ; are from the covering letter: the change came because money figures. This means * that from An accompanying article cites Was cheap. And that is our first June, 1933, to August, 1946,.-the Two factors are today pulling the record of Harvard University's point. In spite of actual wartime- volume of funds against which in opposite directions in y the 300-year-old endowment fund as imposed shortages of certain the American people could write Yy:'" goods, the terrific pressure within checks increased more than four an example of what competent, American economy: full-time investment management our price structure is due to the times.; This increase - has been 1. An enormous unsatisfied de¬ over-supply of money, not to a greater since we entered the war, may be exnected to accomplish. mand for goods, including new Short supply of goods. :'7 7- ..,7 but the process was well "Harvard long ago recognized along at products made from new ma¬ the time the bombs were dropped the need for an experienced and <Our American Inflation Problem on Pearl Harbor. And even war is terials. 7" Y•' '77;•.•' full time management to look We may turn now from consid¬ not a sufficient excuse for such an after its Endowment Fund. It 2. The attitude of organized labor erations of inflation in general to expansion of the means of pay¬ knew that capital could not take demanding an increasing share our current American problem. ment: $315 per capita in 1933 and care of itself. The accomplish¬ of the total value of the prod¬ The increase in our money sup¬ nearly four times as much in 1945 ments of this management can uct ply is clear in the figures for all —$1240 per capita. ; YY^Y'YV 775;;' best be shown by a glance at the andrestricting output forms of money. In 1920, Ameri¬ record. From 1886 to 1931 the rate Where did such funds come through stoppages, thus reduc¬ cans did business with between from? During the early 30's some of return averaged approximately ing both direct manufacturing $3 and $3.5 billions of legal mon¬ of it came from gold that still 5% and from 1932 to date slightly volume and raw materials sup¬ ey- This is the dollar bills, the poured into the country. But most over 4%, a remarkably steady in¬ fives and tens, and the nickels, of it came from the plies. Y'7 ■•■■■; 7 expansion come record through wars and de¬ quarters and dimes that are daily of deposits to finance the Gov¬ pressions. Furthermore, as • of Under these circumstances, going in and out of pockets and ernment debt. At the present time, June 30th, the market value of the shares in the Chemical industry purses, cash registers and tellers' about $140 billions of a $270 bil¬ Fund was 19% in excess of book windows, settling minor payments. lions debt, more than half, is in value. Truly the record of this In 1933, after the bank holiday, the hands of some class of banks great Endowment Fund over the this amount of legal money in¬ or of some Government agency or years is a fine example of com¬ creased to about $5.5 billions- fund.; By and : large, this fact petent Massachusetts trusteeship. Our Grave SHARES from your investment , probable. expressed in this necessarily coin-* Actually, of alW arts, that of investment is the most do .not venes a ■ un¬ conditions. icle." " " views [The article conformity with inconsistencies generally involved in wellclamping down on consumer credit contra¬ Commonwealth Investment Co. basic government "Much has been written about aim, in additionally aggravating the dis¬ advantageous position of the small consumer. Curtailing his acces¬ the advantages of hired Referring to Barron's recent manage¬ sibility to credit privileges obviously also obstructs his access to ment in the of investment com¬ care of invested comparison goods, and lowers his standard of life. The degree of pany performance, North Amer¬ hardship ensuing money, but we would like to say from the afore-cited high instalment payments prescribed for the something to you about the lim¬ ican Securities Co. calls attention to the record of Commonwealth. automobile user, is exactly correlated with the size of his income and itations of this same management. savings. ' V- 7 -7. 77'> For unless we frankly recognize "From the Barron's reprint it is v.77' 7,v'' ;■> ; Y, .v^7;7Y, fYYYY 7' .intentioned regulation, costs and materials Don't Expect the Impossible The Trustees of George Putnam Fund, writing in the December issue of "The Prudent Investor," make some realistic comments about the limitations as well as the advantages of professional investment approach. In wage raw listing dealer or Distributors Group, Incorporated 63 Wall Street, New York 5, N. Y. Inflationary Danger . . . .ProspecfuV upon request from your investment or National research dealer, from securities # & corporation 120 broadway, new york 5. n. y. - , , .. representing, in part at least, mon¬ ey withdrawn from the banks in alarm and not returned. But even after the FDIC was well estab¬ trend continued; by 1939, the figure was about $7.5 billions. With the war, the expan¬ sion exceeded all conceivable bounds; in 1942 the figure was lished, the that means by more national vast means sent which direct a than half of debt did came from the reserve ment comparison 1920's, the American people at least eight times as much money at ready command ;as with have legal they pur¬ banks and the commercial banks; and in this case there was clearly no curtail¬ ment of the banks' in repre¬ of chasing power from-any individ¬ ual's budget. About $106 billions 1945, $27.9 billions; in December, 1945, $28.4 billions, at which fig¬ ure it has remained with minor fluctuations till the present time. short, our financed not reduction $15.4 billions. In January, 1945 it was $25.2 billions and in October, In was of the power of any indi¬ vidual to spend, and little curtail¬ further power At a are time when concerned their savings, record so over this should be a many the 300 real Distributions stone Shares declared for the panies the sale of securities. an be added to billions. allocation of This our total represents funds 1 arising from savings and does not there- continued on page 3106) Prospectus from your tnveilment Dealer or HUGH W. LONG & CO. INC 48 WALL ey stone dlfflRRI Aiffvmriiitr O'fPO S ATt O STREET, NEW YORK S. N.Y. Custodian v on Key first out of invest¬ $9,629,000 were Distributions realized on income Special Since inception in ■ INC, 10 months of 1946 totaled $15,378,000, of which $6,748,000 were Regular and may of INC. CUllll^C paid $140 old year Bond Fund Keystone Distributions ment of of source , Distributions lend. people future inspiration." Another $25.5 billions in bonds held by the insurance com¬ to all by relative characterized Prospectus may be obtained than $59,400,000 has been more paid out to shareholders, of which $32,389,000 were Regular Distributions Prospectus from your from authorized dealers, or SELECTED INVESTMENTS COMPANY 1932, Funds The 3, ILLINOIS be obtained or Keystone Company of Boston 135 South La Salle Street CHICAGO may local investment dealer 50 Congress Street, Boston 9, Man. j THE COMMERCIAL & FINANCIAL CHRONICLE 3106 Our Grave Inflationary Danger "*?■<< • - (Continued from page 3105) fore involve expansion of the an of payment/ But such sav- means ings are routine; and while they do not represent expansion of de¬ , posits, neither do they represent a curtailment of ordinary dispose • . able income. consumer The set of important facts may perhaps be more easily realized if we turn the figures around. Out of our 270-billion dol¬ . / lar same debt only $63 billions are in the hands of individuals — and i the classification "individuals" in■ j eludes unincorporated businesses which in • some cases substan¬ are enterprises, In other words, definitely less than one-foUrth of v ,our total debt is in a form which represents a real deduction of con¬ tial purchasing power. The of the ; indebtedness in sumer amount t 1929 is ■v so small a fraction of the present total that it may be neglected. Therefore, we may say that only one-fourth, at most, of our iftdebtedness was financed by i' means that were clearly anti-inflationary, * >• from hand to hand and checks go from bank to bank. A small sum had weak government; but since 1932 bur national fiscal policy has moving fast enough can support a large volume of trade. In the last stages of inflation, this velocity becomes visable. When the mark been basically inflationary; that is, we have used an increase in the money supply to increase the incomes of various groups./ In¬ going to pieces in Germany, flation as a policy solves none of the old problems and creates new youngest and fastest member of the family met Father at the ones of its own. ; Any group of factory gate on pay day and ran persons who were caught in the With the money as fast as he could price collapses of 1929 and of to Mother, stationed at the, gro¬ 1931-32 and Who seem to have cery store, so that the -money benefited by inflation, still have could be spent at once before it their problem. Inflation may post¬ declined further in value. Velocity pone the problem or change its gets into big figures when money direction or its form, it will not is handled like that. In the United solve:it.;,\/.v/./J/- ;/■/////.: -fev States in 1936, a time as close to A simple example of this is the normal as we have in the past course of wages. In the unem¬ decade, the "average dollar" ployment period of 1932-1935, changed hands 22 times a year in labor enthusiastically welcomed business transactions; now the the spending program. Employ raverage velocity is about 13 times ment recovered was the a velocity ; spending pro¬ no new gram, no new policy, legislation is needed. - is to increase the average no We have increase vast a in money, no new , Preventing Further Inflation , the supply of money of all types; year. All that is needed to give an acute inflationary problem us problem is to prevent fur¬ ther inflation without inducing a Our therefore, we have a decrease deflationary spiral. This is ex¬ the value of money. The tremely difficult to do. Only two : first effect of an increase in serious proposals have been made H the vol u m e of m o n e y is a concerning it. The first is good decline in its value; that is, but inadequate—-let the govern¬ a rise in prices. We cannot em- ment stop making its own market phasize too strongly that a rise for its own bonds; let the rate of in prices and a fall in the value interest rise and again become a of money are different ways of significant and reliable price/This saying exactly the same thing. would have an overwhelming ef¬ fect oh the banks which ? are Effect of Unused. Money Supply loaded with government bonds at Ordinarily, when We have an rates of interest less than 1 %. increase in the volume of money This price adjustment would wipe we have a fall in its value; that out the capital of many banks. /■ is, prices rise. Before the war, ex¬ Fortunately, the bonds held by cept for- a brief period in, early the bank are mostly securities that 1937, we did not have any impres¬ have not far to go to maturity; sive price rise in spite of the in¬ and the proposal Would allow the crease in money, We have here a banks to carry the securities at case of an economic cause ready par until maturity. This plan has to operate but with its effect sus¬ the merit of putting an end to the pended. The reason for the sus¬ source of further inflation, but it pended effect was that the ex¬ does not reduce the urgency of the ; in •. , , pansion money was done in present problem. as to cause general The other proposal is adequate apprehension and lack and sound and no more drastic of activity, in spite of the power than the situation requires; but it of the monetary factor. The is too drastic to be accepted. This money was there, but it was not proposal-r-to explain it briefly— Used, and the normally expected would make use of the present effects did not follow. economic situation to introduce a such a of . way ■ business ; At the present moment, the patriotic motive for observing price control is gone. The sense of banks would common effort in a common banks simply peril that produced cooperation during ■the war has departed.'All the ac¬ cumulated inflationary pressure of thirteen years is now v ready to ^work; nothing whatever needs to be added. If anyone thinks we have had a general shortage of goods, let him consider the in¬ dexes of department store stocks for the past six years. Never once did they go down to the average for 1935-39. they ran For 50% A limited list of was the to most 60% part, above it. important goods scarce, but there was no gen¬ For who is willing to use his eyes and ears, there is no need to quote figures to prove the anyone existence of You see inflationary pressure* it and hear of it all about In spite of some small adjustment in the past few weeks, every salesman expects to be able to sell any goods he can get; every you. : house owner is sure he could get higher rent. Every Job holder is expecting a raise. The bars, hotels, and resorts are full. Luxury items that couldn't be given away are now selling at big-figure prices. This does not spell goods short¬ age; this spells easy money, which is the layman's phrase for infla¬ tion. The money is already exist¬ ent, ready to operate. All that is needed to bring about an unman¬ ageable situation is a more rapid use government of the funds we have. The price level that can be sup¬ ported by a given sum of money depends in an important degree on the rate at which money goes reserves. The the securities in be retired and the -, given a credit in paper money at the Federal Re¬ serve, This would reduce the pub¬ lic debt by $116 billions. This would, moreover, with the lawful money in circulation, give us a supply of lawful money very closely equal to the volume of deposits. •' That sum of money would be fixed and not .allowed to expand or contract. Against de¬ mand /deposits the banks would be required to carry 100% re¬ serves and would becoipe simply money warehouses, charging for their services. With time deposits the eral shortage. 100 % of system legal of notice Money longer do double duty as requirement would be strictly enforced. would no invested funds and Still be avail¬ able to the investor though they were liquid funds. These simple devices would prevent markets from going to pieces for purely monetary reasons; but they are devices too drastic, as I have said, to be accepted. as very moderately, slowly than it did in any major country. In the fall of 1937 we had the sharpest price collapse in economic history and we came out of the resulting un¬ employment only by the adoption of the "Defense Program," a new form of government spending, From thiswe moved easily into war spending on an apocalyptic scale—-not spending merely lor what was required for the Con¬ duct of the war, but spending also for Other purposes and using the outlay of money to achieve shifts in personal and regional income distribution. ; Today, after, 13 years of spending, labor is again clamoring for higher wages,, for better housing (in which field we are about 15 years behind in sup¬ ply) and for another spending program as the only way to avoid more other disaster. poor country and we tions and express its mind regard¬ tapo were out. to get the less lators of what thegentry, if any, specu- . who/were; the cause of all i short road to may think. Yet we took Keynes' the trouble! The inflationary theories and applied National Socialism in this country, them in this country as though just as it was in other countries, is they were generally valid. WPA—easy spending; OPA—price Just in passing, this is a striking control while government; policy makes it impossible; FBI—to as-; parallel to another historical situ¬ / ation. ; During the / Napoleonic sist OPA do the impossible. V I can give you a pertinent ex¬ Wars, England was cut off from ample of this process. A student continental supplies. For several decades wages tended to remain at a subsistence level; and if one class — the v merchants another money, owners—did — made class—the not. , land Labor, in any at St. Louis University, former a service man, managed to obtain a car at less than the ceiling price. He called was on explain how he a car by the OPA to able to buy at less than the fixed price. was case, was presumed to stay at the subsistence level. This theory of He opposition of class interests business of OPA's and that until he bought a car at more than the valid local was a piece, of- economics" on a scale, but historically speak¬ maintained that this was ceiling price the OPA had no in¬ no terest in the matter. He was in¬ ing, of momentary duration. Able British economists, analyzing their formed by the OPA official that loca} circumstances, set up their people did not realize it but actu¬ analysis as of supposedly universal ally. it had just as much authority application and we have been as the FBI, fumbling: about in e c o ho mi c ; At the present moment, there blind alleys ever since because we has been a slight but happy re¬ accepted their theory of class war¬ versal of this trend; but the enor¬ fare, In the past 15/ years we mous pressure is still bearing on have made a similar mistake by our price structure/and vthe ^ ut¬ following Keynes' British analy¬ most vigilance of the guardians sis. of the republic and of all good in. citizens is required to prevent the appearance of inflation in/any No Hope For Careful Handling form Of Problem Our reliance and dependence tion. and under any administra¬ The essentials of medieval democracy, of which in its English upon British economic theory is form we are the fortunate heirs, one of the principal reasons why was the control of the purse there is little reason to think that strings. ; This we have largely anything Will be done about our lost ; It/ must ) be regained and present difficulties. / Keynes' the¬ maintained.^ ■ ' .»■- ories under a variety of attractive . have been sold to millions names of Americans who found dead with label on them a wouldn't be "cheap money" but who will talk glibly about "deficit financing;" Besides, the temptation is too great for the politician and the supposed beneficiary. People like yourselves may be strongly op¬ posed to cheap money; but if your region /or your county or your ward or your brother-in-law is going to be benefited, it is easy to Minn. Honeywell Pfd. Offered to Public .. An underwriting group headed by Union Securities Corp. arid in¬ Keynes'Theories .>■/-cluding Piper, "Jaffray & Hop\ The wood, of Minneapolis, and Alex. analytical basis for this has Brown & Sons, of Baltimore, is « been furnished by a British econo¬ offering today to the public 24,30® I mist, John Maynard Keynes, a few shares of Minneapolis-Honey well years ago created Lord Keynes, who died t some months Regulator Co. 3.20% convertible recall that economists have made ago. Keynes' influence among preference stock, series "A." The mistakes before and to feel that stock is priced at $105 a share arid 9, the younger economists, especially those in government service; was the situation is controlled by the accrued dividends. ' One of the enormous. No other scholar of big bankers anyway; Net proceeds from ;the sale will modern times has affected' the most beguiling attractions of in¬ be added to the company's treas-, flation is that everybody thinks minds and lives of so many ury funds as additional working people. The acolythical devotion he is the only one that will gain capital and will be available for/ of his disciples was Well summar¬ by it; and everybody wants just a general corporate purposes. The ized by a University of Chicago little inflation which will benefit current volume of the company's ; economist who stated that he Was him. A little bit for each is a lot production, and the resulting in¬ no longer a Cummuriist because for all in the final total; and in¬ crease in inventories, haye in¬ flation balloons the original prob¬ "Keynes has rendered Marx un¬ creased working capital require¬ lem it Was supposed to solve into necessary." This was • a very ments;.-,/;^ %///'-//■):••//// adistorted price structure which common attitude, though it is in¬ The preferred shares constitut¬ highly aggravates that original teresting to note that in this case ing this offering are identical in of this, speaker Its practical im¬ problem. * respect to dividend, /conversion " portance may be doubted. The Finally, the magnitude of the rights arid call price with the 85,speaker was Oscar Lange who, problem, makes it almost impos¬ 700 shares of convertible prefer¬ thinly disguised as a representa¬ sible of human control. The vast ence stock; already outstanding tive of the "Polish" people, has and erratic monetary pressure and listed on the New York Stock been dutifully carrying water on that has been created cannot be Exchange./; They are convertible., both shoulders for the Kremlin in allowed to : increase, but; at the into Shares of common, stock of the United Nations meetings. sarne time the pressure cannot the company at a conversion price It is like of. $75 per common share (taking Now, though Keynes wrote as simply be withdrawn. an economic analyst and sought bringing a man from his work in the preference stock at $100 a ; to develop theories of general a pressure ; caisson, f Sooner or share). They are redeemable In validity, he was primarily inter¬ later we must get him out. but if whole or in part at $ 110 a share ested in practical, policies with we take him out quickly he will on or before March 1, 1949; and which to solve the grave Briitsh have a serious case of "the bends." $100 a share on or before March economic prob 1 ems. Conceal The ^price system will have "the 1,1952, and at $i08 a share therer Keynes' theories and policies be¬ bends" in many different direc¬ hind formulas elaborate as you tions at once if we adopt a drastic Upon completion of this offer¬ policy; Now it is will and bedeck them with a tech¬ deflationary ing the outstanding capitalization nical vocabulary as complex as easy to say that the government of Minneapolis-Honeywell will you please, they come to nothing should stop printing money, start consist of 110,000 shares of 3.20% more nor less than inflation. As a paying its debts, let the interest convertible preference stock, se¬ said in the beginning; inflation rate alone, and do its borrowing . . , has many forms and; manifesta¬ tions. England is a country about half again as big as Missouri, highly centered financially in one n. metropolis, with only - five big banks all closely under the thumb Inflationary Policy A Deliberate of the Bank Of England, with a One working class accustomed to do Our second point Was that the as they are told and to leave pub¬ inflationary problem was the re¬ lic questionsv. to the gentry, A sult of deliberate policies that policy that might work when have been mischievous in the ex¬ Strongly controlled as it could be treme. In flation is the economic under such circumstances cannot ailment of poor countries and be transferred to our vast country. weak its large semi-independenf governments. When an With unpopular government cannot get regions each with a Federal Re¬ popular support for a tax. pro- serve Bank of its own, and with gra m, the people are forced to pay its almost 15,000 banks and a the taxes in the form of higher prices. Now we certainly are not population that is anything but a Thursday, December 12, 1946 in a market it does not Control. But this must be done in the face of the opposition of special inter¬ ests like silver and against the urging Of many groups Who think little inflation is all right for just them. This sort of policy¬ making and execution requires a quality of mind and will that is rare among public officials. a ries A, common share. and 1,243,800 shares of par Value $3 a /;'■ : )H'/: ^ //'// stock, / Halsey Sluarft Offers Equipmenls Gulf Mobile The award of a new issue of $3,600,000 Gulf, Mobile & Ohio People too easily forget that the RR. equipment trust certificates secret police organizations of con¬ due 1948 to 1959 was made Dec. tinental Europe began with pop¬ 10, to Halsey, Stuart & Co. Inc. ular approval as intelligence, and and associates, at 99.2599 for 2% notes. The bid was the only one enforcement agencies for price control/ They hid behind the old submitted. Subject to; Interstate formula that high prices caused Commerce Commission/ approval of the financing, the bankers reinflation—not the truth which is of- the notes yield 1.15. to ; have not docile and that likes to ask ques¬ Russian Cheka and the Nazi Ges¬ 2.30% according to maturity. quite ' the contrary—and the old offered $1,800,000 Dec/ 11 at prices to Volume 164 Number 4550 THE Problems 1 - this power, public resentment has risen, This resentment has been like them in labor either. Amer¬ icans instinctively fear the loss of available way;: namely, by voting against the administration which fostered and allied (itself with individual abuse of through that the monopoly a • Y/Y. economic position proved of- work- Na¬ desirable. purpose. abuse Act has of the given unions and is situation. now union On ible r was the abuse willing to place union are mem¬ or them The majority of our fellow cit¬ izens, including union members when they think about the matter seriously, realize that the real im¬ provement in the standard of liv¬ ing of > our / welfare not solve the labor problem either. I am .equally sure that the and in the workmen generally is of our the must be important reforms in la¬ bor union activities. The superior organization of. in¬ dustry and business that we have developed in Our country under laws our how country realize that there existing governing labor relations must be amended in the interests of all the As we still face the problem of not only achieving a final sound settlement of the coal controversy but. also./■ of other threatened interferences with pro¬ . striving for the last 5% or 10% that might • be gained for. their members, they must not destroy the 90% which they already have. They know that a truck driver administration coal tions we that the condi¬ face and the organ¬ now ized' unemployment and lack of production we suffered last win¬ ter will not be repeated The American annually. people cannot earn more than more that a and with reason men can when working, with superior tools is because they accomplish more useful work. capital must The present situation and was clear¬ Communist strikes - and con¬ supported even the inspired sit - down seizures under plant the cloak of. legitimate unionism. We of are now reaping the harvest the- wirlwind from We be all know that accumulated to for these superior tools. Most Americans are proud of our pay ly forecast when government doned a earn can pick and" shovel. be paid more a organized unemployment industry after another. one bulldozer Or be paid more than can stand annual work stoppages and in a machine with man The a man can; be, paid teamster; They know cutting more a arid • the wind that American we industry do not wish handicapped there cess to see or society. our They industries destroyed. notable are of free a While of records of none us can society suc¬ both employers and their employees "without unions, there live exclusively by Everyone of us is dependent upon the activities of others for his very existence. Our country, cannot survive in an at¬ mosphere of industrial anarchy, // his own efforts. I am not in any sense making political speech, but the recent elections show clearly • that; the majoriy of our fellow citizens rec¬ ognized even before the coal strike, that the policies followed in the last /ten years must be changed. The new Congress has a great responsibility to see that modifications remedial / measures are promptly taken. rise since 1936 in the strength of the Republican alleled and The that coincided has with the growth of union membership and by. As the and public more has suffered from the abuse of affect¬ ones laws and procedures administration them of should be consistent with the fol¬ lowing principles: 1. a They must * - - , be economically effort to find polit¬ have to sory union membership is as an¬ tagonistic to American principles which must be covered. There are five, among others, which seem law. They must be subject to the laws regulating group and same personal other conduct izens. that apply to and .all groups Unions should other not be given any special privileges to resort to violence and intimida¬ or essential:-- >/; YY-'y/- ;Y ••//••/•''/■ 1;/- Industry - wide bargaining tion. should be prohibited. It is the es¬ sence of monopoly in labor rela¬ bargaining must be clarified. /Y and tributed has ; to importantly the nation's con¬ present difficulty. If labor monopolies are permitted on an industry-wide basis, employer cartels to match them are thereby made inevitable, and the product of this situation in the end will require State con¬ of both. This is the Nazi- trol cit¬ expect 1 ' , governing collective The law says that employers must bar¬ collectively, but in all language of the National the Labor Relations Act there is no defini¬ tion of collective bargaining. What it is and the limits of collective bargaining must be clearly de¬ Likewise, the law must be fined. clarified so These that management em¬ Fascist-Communist pattern. At the ployees, such as foremen, do not least it would be wise for have a conflicting responsibility to observe how this by being subject to union control. experiment develops and works 5. Strikes over jurisdictional out in England before we commit ourselves irrevocably to the same disputes, sympathy strikes and all forms of boycotts must be out¬ course. There certainly is a grave lawed. YY Jurisdictional disputes question as to whether England must be resolved by judicial proc¬ can achieve efficient production on sound a problems will be solved in large part when we re^ form our labor legislation and our fiscal policies. We must avoid dangerous infla¬ tion, stop wasting the nations re¬ sources, quit quarreling and go to work. Americans want freedom from industrial strife just as they want freedom from war. '"In conclusion and to emphasize again the importance of solution of sound a the country's labor problem, it seems appropriate to quote from a speech made by the late at Justice the Brandeis conclusion bitter strike in of than more 40 In speaking of what ago. Boston long a we now bargaining, he said, conferences, though wisely conducted and with the best of in¬ on either side, do not al¬ tentions in result ways agreement. fail at times to Men the right; and, see indeed, what is right is often in doubt. For such cases arbitration affords frequently an appropriate remedy. take This remedy deserves to its able place among the honor¬ settling those ques¬ of means tions to which it properly applies. very Questions Americans may arise, however, which not be arbitrated. Differences sometimes fundamental. are mands be may made De¬ which Such differences cannot be'sub¬ esses./:://// mitted resorting to coercion and the de¬ These proposals alone, however, will not assure us of labor peace Again, the action of the union of essential J personal and, finally, the dicta¬ torship which has been the result of such a political philosophy in freedoms all other countries. / Immediately nt the end of the Japanese war, and while the guns still smoking, the auto work¬ ers' union; in an effort to break were overnight. We have to row be hoe before achieved, reform of even long, hard a "What, then," Justice Brandeis asked, "should be the attitude of the employer?" He answered his to replace that of conflict. This will require many months of effort and the industry-wide conference for the economic The lem second cri ti which all American as de¬ anti-American ends. own heritage ca of/, prob¬ us f ■ citizens ace is the debt from the failure to- balance war the of establishing a uniform the pattern for the entire in¬ federal budget in the decade be¬ fore the dustry. ' war, together with con¬ / , purpose wage , . , "In the event that the General Motors Corporation / will Y give leadership to insure the conven¬ ing of such a conference of the automotive and allied industries, agree to waive direct negotia¬ tion with the General Motors we Corporation in wide lieu negotiation. take / this course step, of If you on this of position citizens before the war. tion a we Continuing that government is purposes union the to we you take the initiative and develop industry-wide 'bar¬ gaining with/your International na¬ machine. taxes mean approximately 25% of the na¬ income, it means on the hour that citizens work three for for themselves and one government, or in terms of a forty-hour week, en¬ joy the fruits of thirty hours of Union./ We their for the government. If such taxes it would be for our Our sound a country American standard achieved are of development even if system living based on we were. and the we have free com¬ are sion Industry-wide bargain¬ ing tends to disregard the peculiar local interests of many groups of employees and of individual employers, to increase costs and labor and work ten hours not reduced, either an exten¬ of the average work week will ultimately be required reduced standard of citizens petition. or equally unto as a Saxon would sensible wrong—to what we more have he The history of Angloof American liberty that struggle to resist it at..any cost resist when .first offered rather than to the pay penalty surrender. 'ship It is of the money,' ignominious old story of 'the writs of assistance,'^ and of 'taxation without representation.' The struggle for industrial liberty must follow the same lines. / / "If labor unions are arbitrary or lawless, it is largely because em¬ ployers have ignominiously sub¬ mitted to arbitrariness ness as under a Justice Brandeis nately, we on world to say, is so a on spe¬ YYY'Y "Fortu¬ ordered must pay the penalty for sins, be they sins of commis¬ sion omission, of doing wrong suffering wrong to be done or of or unto the went by //./ He then went our or to their as then illustrate his points cific example. that lawless^ policy immediate interests." own to or temporizing a mistaken belief us, /;.; / //'/'.. •/•'//■' living for the of wages, you may compromise a matter of hours—if the margin of been than that wrong to be done "You may compromise a matter whole will result. have to and upon no a or During the period of shortages it dealing with these important as him. rests the to do are not in a position this, and do not believe that essential in problems that the employer should strive only for the right. It is tional hours demands a mort¬ When federal taxes amount zens. of "As part have sug¬ Our taking for its too high a percentage of productive effort of all citi¬ average your high As 100% gage on our productive General Motors replied, gested that have now to the / federal debt alone today is about equal to the entire wealth of ail of the demands stated herein." To is the we negotiation with the Corporation ganized labor should be resisted at whatever cost. I have said that it of activities. fail shall insist upon immediate — tinuing high federal expenditures industry¬ however, own question in these words "Lawless or arbitrary claims of or¬ for non-essential or should suffer 1 of and ar¬ a substitution of force for for reason. best struction and social chaos for their knows that for years we have urged industry-wide treatment of wage problems. We call upon it now to initiate the calling of an bitrary, may or the cooperation will have create others. appear to have been lawless with our to of law present laws affect¬ ing labor relations. The spirit of unions decision will General Motors with this qualif¬ "The Corporation / well wage-price, anti-in¬ policies, made its destruc¬ tive "30% or else r—" demand on the end elimination from the ranks of unions of all subversive elements which are now atempting to use nation's to that flation the the employer, after the fullest con-"" sideration, believes would, if yielded to, destroy the business. in its socialized industries without struction and years call collective "But 4. The law gain keep their activities basis. , much worked forty more some¬ hours, as did during the war, instead of profit will permit. No man can with certainty that his opin¬ is the right one on such a question. : But you may not com^ say ion promise on a question of morals, prices and to affect adversely the interests of the people as a forcing organized unemployment or where there is lawlessness or sound. The on the country by strikes and con¬ even arbitrariness. Industrial lib¬ ical shortcuts / to prosperity whole." ;/ //-•; v.;Y,YY/Y'/ tinuing the period of ' shortages erty, like civil liberty, must rest without work must be aban¬ Gentlemen, when we made this with the resulting increasing costs upon the solid foundation of law. doned. V"-'".*;'/"// •; y. '-A'-.-'' ■••//' A y decision we were conscious of the and prices. The sound policy now Disregard the law in either, how¬ They must be ethically and so¬ risks involved/ As it turned out, would be to reduce the tax load ever good your motives, and you cially sound. it cost General Motors one hun¬ for non-essential government pur-? have anarchy. The plea of trade They must be legally sound and dred million dollars. We 1 still poses and to improve the effi¬ unions for immunity, be it from enforceable. ,,; •;/'./ V think it was the right decision. ciency of our operations so that a injunction or from liability for They must be practical and un2, Compulsory unionism is .to¬ satisfactory standard of living can damages, is as fallacious as the derstandable. y .r talitarian. The most basic demo¬ be achieved with the forty-hour plea of the lynchers. If lawless They must recognize the prin¬ cratic freedom is the methods are pursued by trade "Y. /'- <: right to dis¬ week. ciple that we can all have more sent from* the Material problems, unbalanced unions, whether it be by violence, opinion of a ma¬ only if we produce more. They jority without being subjected to inventories, uncertain prices, and by intimidation, or by the more^" must reward industry and coercion and loss of individual thrift and recognize that lazi¬ high costs of tools, plants and peaceful infringement of legal liberty. It is the basis of free ness and be dissipation must pay speech/-If labor leaders need com¬ facilities must carefully rights, that lawlessness must be : - 2. 3. . 4. . 5. „ , - par¬ the abuse of power created there¬ more these and ( the consistent Party old ing unions and workmen gener¬ ally, it is clear, at least - to me, a sound of re¬ and the power of unions is extremely complex. There are many points and, of" what was sown ten years ago. To¬ is no record of a successful union day, the power that this public without a successful employer. policy created is threatening the In developing the new laws or very life of our nation.,//?/; In our modern industrial rewriting of our laws garding industrial relations have accomplished as free men working in unions should • . , can the way man of personal freedom as ing. vyf;. y.i,;. compul¬ 7. They must recognize that labor sory membership in a church or a [ political party. monopolies, just as any other It should be form of business monopoly are prohibited by law throughout all 7;$ intolerable in a free society and industry asjt is on the railroads ■ must be regulated by the under the Railway Labor Act. Y govy ernment or prohibited. /: 3. Unions must be Y/yY subject to just ication: in duction.;, But we must not, over¬ look the- bigger problem of re¬ forming our labor laws and their so to as can or do help their members, but even the most ardent unionists must realize that YYYP; nation a differ may how much unions people and in keeping with American concepts of a free society, system of free competition. Opinion fright to work—to compete for job and earn a living—is su¬ perior to the privilege of strik¬ country fundamentally due to the better tools industry has supplied and to But people, -of over¬ special privileges not enjoyed by all other citizens. this did not solve the' liquor prob¬ am sure that the repeal of all Federal labor laws would ; hand, the ; bers above the law of the land give lem, and I inajority of the other predatory not Incidentally, »/ the they decided that the only way out was to repeal • the /law. ! a port timately so great that the major¬ ity, 14 years after its enactment, i have can constructive the No pay tribute to any private group in order to hold a job. Compul¬ '/a tions unionism. They are willing to sup¬ sound measures to improve the lot of workmen, but also passed with laud¬ morals and health of the public. The abuses of the prohibition law and its administration were ul¬ ' and /;■/ - of monop¬ olistic power under the guise of objectives; namely, to pro¬ temperance and improve the mote A . whelming majority recognizes that they must be protected against This labor act has now worked out about like the prohibition act, which would one place ; in American economic life, and the majority of Americans; are for them and do riot want -to destroy intolerable an no Wqrkmeh's unions leaders has multiplied the troubles was intended to eliminate. result sure - sound the Act The am biles. In fact, that this power I of wanting to substitute and buggies for automo¬ horses certainly has not accomplished the return to a accuse me putes burdening or obstructing interstate and foreign commerce." this advocating horse-and-buggy days in labor relations. of the purpose tional Labor Relations Act is: "To diminish the causes of labor dis¬ It not am the ZYY-Y Y Y/v Y; stated I - operate. The interests of all the people and not simply promote labor monopolies. the National Labor Relations '■The to /correct this, intolerable situation in labor relations. The public is insisting that such laws must recognize the including the: Norris-LaGuardia Act, the Social Security Act, the Wages and Hours Act, Act. administration in wrong They must recognize that the // only- effective month, it is that there must be by-? legislation, and im¬ men, and the reform Congress with the laudible objec¬ tive of fundamentally improving the in this/movement. If there is one clear mandate in the election last any form of dictatorship cre¬ ates. -V Y Y/YY/Y / z Y;! YY/t In the decade before the war a number of laws were passed by •Y/Y v./-; liberty power expressed 6. 3107: gether, there must be something Facing Industry (Continued from page 3019) industry, and it is becoming in¬ creasingly clear that they do not or mv; COMMERCIAL & FINANCIAL CHRONICLE their penalties. pulsion to hold their unions to¬ watched by all , businessmen ■;Y:Y,Y A;/ to put down at once and at any cost." * | t ■ ■' . Nr-'wr^j r* {' THE 3108 COMMERCIAL & FINANCIAL to Poor-House (Continued from page . . . , our 3015)' own or coal mines are • , , • ' . , .. ' —but it can be lost there beyond redemption. German Hub of European ' • in the European econ¬ omy, But such an effort—no mat¬ ter how desirable—cannot bear Germany fruit except over long period a their needs. Often Between eastern Germany and the in natural commerce • f what shall be done ', They are fright-v living next door to a''; the* future; ened ;of moral and morass desert is practically at all, no, was planned that way, movement of people to and fro, cause the four occupying powers no exchange even of information. failed to carry out their agreed It is more difficult for a German plan. This plan—the Potsdam to get from Leipzig to Munich or no \i. an economic plague-center—-which; has come into being in place of but be¬ an area which once supplied them- , western zones there .. ing a voice in aS four or five German families are evicted to make room for one Allied household.. The Germany of today is an economic desert.' Not because it many./ as working at the time, and our ships sailing. ground for the great experiment, These are some of the reasons to which we are now committed— why Germany has been, and will, the experiment of building an en¬ to a very great extent, remain the during peace upon the foundation economic hub of Europe, unless of great power cooperation. Gerher people are wholly destroyed many is the laboratory in which that experiment must succeed or or enslaved and her lands par¬ titioned and annexed to other fail. countries. Since no such drastic Nowhere else in the world is course is contemplated, the prob¬ cooperation so difficult. Nowhere lem is not merely how to render else is it so necessary. Every the German people peaceful and aspect of the problem of building law-abiding, but how, to harness an enduring peace is reproduced the skill, energy and natural re¬ in that troubled and troublesome sources of a new, peaceful German part of Europe which lies be¬ nation kto the best interests of tween the Vistula and the Rhine. ■ Between these two rivers East Europe and of the world. .. Let me say here that a care¬ and West must meet, join hands, and go to work in friendship and fully planned and faithfully ex¬ long-range endeavor to in peace—if there is to be peace ecuted in this world. Between the Vis¬ build up the backward nations of tula and the Rhine the peace of Europe may well, eventually, re¬ the world cannot be wholly made duce the relative importance of ' serve 'v'/ Thursday, December 12,1946 CHRONICLE with — a much they needed of what bought from them much of; what they produced. And thisl and . Agreement—called for „• treating applies not only to Germany's >. small neighbors. French recon¬ Germany as an economic unit, in¬ ject to go from Montreal to Calstead of cutting it up into four struction is delayed and imperiled * cutta.. ."Y'Y Y Theseparate water-tight compart¬ by lack of German coal. Eastern Germany, which used to ments. How and why this plan same thing is even more true of The British, after seven supply the food for itself and for has miscarried is a story in itself. Italy. a large part of western Germany There is not time to tell it here. years of privation, are still comas well, is now exporting all its Moreover, I have discussed this pelled to remain on wartime ra¬ Hamburg than for a British sub¬ ' except for a bare subsistence ration retained at home. Its industries are work¬ foodstuffs to the East, ing for Russia; but they are grad¬ ually running down, due to war the most recent issue subject in of your own "Headline series. We ; with are an Book" v' : tions. a in ? concerned & here only appraisal of what has plant equip¬ happened and what it means to us. ment, lack of effective manpower From this point of view, I think and absence of parts / and raw it is fair to say that Allied occu¬ materials formerly, derived from pation set out to accomplish three damage, removals of the West. immediate objectives, only one Germany Western worse condition. is in even Never self-suf¬ ficient^:;lii food^ arid now deprived of the normal surplus from the which it has It so tarize; and many. to i cold across and the economic hungry thouY Y;/y sea. collapse of Ger-Y and especially the cutting coal, may turn out to be the worst physical disaster that has befallen western Europe.; More serious still is the effect off of German of to demili¬ ^ country of sands many, of all this upon democratize Ger¬ „ this death aware that' shipping strike may mean the •; made coal strike or a The far accomplished. out to disarm, set And even we—remote and fortunate—are the prospects for. lasting peace. Not only is re¬ construction being delayed, misery ' ■■ Disarmament has been accom¬ it lives on French leavings Anglo-American c h a r i t y. plished.;; Except for German po¬ protracted, and the seed of unrest Deaths from starvation are fre¬ lice operating under Allied super¬ sown, but confidence in the whole k quent, hunger oedema prevalent, vision, not a single German le¬ planned structure of a great power}; ■fy': r If infant mortality high. ^Industry is gally possesses firearms of any peace is being undermined. at a low level of' production- sort—not even a shotgun to kill the" four-power failure in - Ger^ XV: —is also, " the hub of the whole quent threatto the as yet pre¬ • some plants at a total standstill rabbits. The Wehrmacht, the SS, many continues, people through¬ carious structure of peace. Y ; European economy. out the world will begin to won^ In I other,, words,;.-; we, in this and few operating at more than a the SA and the' Gestapo have Geography, geology and fraction of normal capacity.; : In ceased to exist. German ships are der * whether they have made a technology have > conspired to country, cannot hope for peace, i fatal mistake in placing their faith unless there is peace in Europe. part, this is due to war damage, banned from the seas, and. Gerr ; bring about this inescapable fact. in the ability of the great powers There can be no peace in Europe, but even more to shortage of man¬ man airplanes from the skies. ; "Whether we like it or not, Gerto reach and carry out agreements unless the peoples of Europe are power and the low productivity As for demilitarization, very man rivers and railroads are the —especially in the more trouble* Most prosperous, reason¬ of available skilled labor. little has been done. War damage /i gateways to the heart of the Eu- reasonably some parts of the world. of all, it is due to shortage of coal. to German industry is not nearly Y ropean*■;' Continent; German coal ably soon. And there can be no This is the picture which con^ The > great Ruhr coal fields, so revival of prosperity in great as one might suppose fronts the: Council of Foreign. fields are the sole producers of early so / longas its present capable of producing something from a casual inspection of the YY surplus coal in western Europe. Europe, remains :■ a poor- like 130,000,000 tons per annum, ruined cities of the Ruhr. Bomb¬ Ministers, now in session. , This The German people—even in de- power-house is the picture which the Foreign are turning out less than half of k V feat—are still the largest single house;.:, y\Yv ing could, temporarily put out of Ministers have so far avoided fac-? that amount. Most of -this is action To summarize: ' a steel mill or a huge syn¬ compact mass of skilled labor on h "We must, in our own interest, needed to run the railroads and thetic plant for the manufacture ing, and which must be faced now. the Continent; ' " -. This is the picture which con-'/ utilities, to supply the of oil or rubber. But such dam¬ rThese elements combine to prevent a recurrence of German public fronts you and me here, as citi¬ armies of occupation, and for ex¬ • "*./••<' • : make the German people a major aggression;age was more often to easily re¬ zens £ of one of the four great We cannot, in our own interest, port to the coal-hungry countries paired v structures than to vital nations ! factor in Europe's. productive responsible for the failure^ of western Europe. Only a trickle allow the planned structure of machinery. Since the surrender, capacity, as well as a major maris reaching German industry—not a few v ket place for the goods produced peace to be undermined by failure shipyards and war plants We Need Two Plans enough to make steel for even the have been destroyed. of the laboratory test in Germany; But the :• by other nations.:„ y ; What we need at this m< most needed construction and re¬ Before Hitler came to power, and planned process of destruction or is hot merely a new plan for pair. Y'Y/Y' ;> T>y v}■£).•* removal of war potential has pro¬ We cannot reasonably hope for Germany ranked third—after the many; We need two new plans, y Throughout all of Germany ceeded at a snail's pace, because United States and Britain, in total lasting peace, unless a peaceful We need a new long-range agree¬ World commerce. Half of Italy's and productive German nation consumers' goods are practically of Allied bickering and because ment as to what Germany and Foodstuffs (apart of the realization that this pro¬ Jforeign trade was with Germany. takes its place in the heart of a unobtainable. what kind of Germany will best rationed items), clothing, gram was in direct conflict with Germany was — next to Britain— peaceful and reasonably prosper¬ from fit into a new peaceful and rea-< YtYY" YYY;''Y:.' :'Y household utensils, furniture,' or the immediate and pressing prob¬ the best customer and supplier of ous Europe. sonably prosperous Europe. Evert ; That is why a solution in Ger¬ even the simplest hand tools are lems of rehabilitation. the western European countries. more urgently than this, we need Y> During the Nazi period of fofced many is as vital to lis as any do-? not to be found anywhere except ; Little, too, . has been accom¬ a new short-range plan for the -'■■ in limited quantities and at fan¬ plished in the far more important -draft penetration into southeast- mestic problem we face today. rapid rehabilitation of Europe—? tastic prices on the black market. field of demilitarizing,;the mind } fern Europe; Germany bought more a plan which will use the human ;• Conditions in Postwar Germany Those who have goods, refuse to and spirit of the German people. than one-third of all the exports and material resources of Ger- Y And now let us take a brief sell them for- currency, because The Allies have learned that it is of Hungary; Bulgaria, Rumania, look at; what has happened to even the most simple-minded cit¬ difficult to teach democracy to many for this reconstruction,, in-? Greece,. Yugoslavia and Turkey, stead of creating a focus of eco¬ Germany- under four-power oc¬ izen knows that the German cur¬ men struggling for a bare exist¬ ; and likewise supplied more than nomic and political infection in ;Y one-third of the imports of those cupation, and try to see what this rency is inflated and intrinsically ence—particularly when the four the heart of the Continent. ; b, Y means to us and to. the whole worthless. Cigarettes—at a dollar occupying powers ; have not ^ ■ Countries.,,, '<• . .".< ;• ? ,■■ To some extent at least, these world. <*, per cigarette—have become the reached any agreement on what two plans will necessarily be in It is not quite two years since accepted ;•/ i The Coal Areas medium of exchange. this democracy is that they desire conflict. A long-range plan should the Allied Y Armies crossed the Farmers hoard their produce, to teach. yY--:; Y/.' YY Y As you well know, coal is the contain provisions for limiting Vistula and the Rhine—one year !lieart of a modern ind^sfr^l hungry hordes of gleaners invade The political vacuum in Ger¬ their fields, and those who work many is almost as complete as Germany's heavy industries, espe¬ feconomy. But few nations in the and seven; months since Hitler's and for •/ "world possess coal fields capable Germany surrendered and ceased for wages can buy nothing for the economic vacuum, and closely cially steel;; production, •of producing their own require¬ to exist. What was once the Ger¬ their money except the scant al¬ related to it. But this is a sub¬ stimulating the increase of heavyand especially steel ments. Apart from Russia, every man nation, before the annexation lowance of food calledfor by ject about which my able col¬ industries, capacity in other countries. ' The country in Europe has been de¬ of Austria, is now partitioned their ration cards. league will speak to you in a short-range plan should, on the One piece has pendent for all or part of its coal into six pieces. ; Millions are homeless. But moment. other hand, use every possible .supply upon one of three great been annexed by Russia. A much scarcely a new house has been In the time which remains. I sources of surplus. These used to larger and more important part built in Germany- since the sur¬ should like to call your attention device of immediately utilizing the existing or .potential German been annexed by Poland. render. be Britain, the German Ruhr and has Even window glass is to the effects of .the present eco¬ And the- remaining rump,-lying ■.Upper Silesia. Y/yk in Germany capacity to provide materials for practically unobtainable. Families nomic - conditions repair, reconstruction and new ; I say "used to be" because two roughly between the Oder and the are crowded together in available upon the rest of Europe and upon construction throughout Europe.> ■ of these sources are at the pres¬ old western frontier, has been cut housing, with a whole family fre¬ the. prospects of durable peace. ent moment unavailable. Bjritain, up into four - separate zones, of This conflict between shortquently compressed into a single In 1941, when Nazi bombs were . hvhich once exported as much as occupation. range and long-range objectives room. Many are still living in raining upon Britain, Anthony As a result of this partition, 78,000,003 tons of coal per annum, cellars. Here and there a win¬ Eden, then Foreign Secretary, had must be carefully analyzed, un¬ is now barely able to produce the economic life of Germany is dow-box with blooming gerani¬ derstood and brought into har¬ the vision and the courage to enough to satisfy home require¬ paralyzed. The parts annexed to ums indicates where some one What is needed most of make a declaration of British pol¬ mony; ments. Upper Silesia, which is Russia and Poland, as well as the lives in the still habitable por¬ all is a timetable and a carefully \ icy after Germany should have Soviet zone of occupation, are said to have produced over 100,tion of a ruined building. been defeated. "Our conditions worked out and adjustable sched¬ €00,000 tons per annum for the working to produce reparations ule of priorities. To make matters worse, some for peace with Germany," he said, for Poland and the Soviet Union. YNaz's during the war, is now held The whole problem, simply thirteen million Germans are in "will be designed to prevent a The French zone is similarly be¬ by Poland, and the products of the process of being expelled from repetition of Germany's misdeeds. stated, is how to make the poorits min?s go mostly to Russia or ing milked by France. The Bri'.ish house into a power-house for re¬ the lands annexed by Poland and But while these - military meas¬ to countries in the Russian trade and American zones are living on construction, without letting th£ Russia, from the Sudetenland, and ures must be taken, it is not part orbit. Thus, for all of western subsidy to the extent of half a from parts of Hungary. These of our purpose to cause Germany power-house again become art Europe there remains only the billion dollars a year paid out of arsenal. Or—if you prefer—how to collapse economically. I "expellees"—preponderantly old German Ruhr as a source of ex¬ the pockets of British and Amer¬ to get the Germany economy up men, women and children—have say that, not out of any love for portable surplus. If the Ruhr fails ican taxpayers. At this moment out of the cellar without letting no place to go except into the Germany, but because a starving to provide coal for Scandinavia, they are in the course of economic its "upward momentum carry it already overcrowded homes in the and a bankrupt Germany in the unification—a process which will the Low Countries, France, Switz-< midst of Europe would poison all beyond the floor it is ultimately rump of Germany. ^ erland. Italy, Greece and the Ibe- cost over a billion dollars before ; I' her neighbors. to occupy. And—to cap the climax—as the of us, who are xian Peninsula, the peoples of the two zones alone can become This problem is difficult, but That is not sentiment; it is com¬ occuping powers have begun to these countries must go without self-supporting. not insuperable. It can be solved mon sense." - t Between the Anglo-American bring in the families of troops and sufficient fuel/ or else pay an ex-? if each of the occupy ing,- powers'Today Germany is starving and stationed in Germany, ©rbitant premium for coal brought area and the French zone-there officials is willing to state its-awn-point bankrupt. Her neighbors--on all all the way acfoss the ocean from is but little exchange of food, raw more and more of the better hous¬ sides are frightened^and demand¬ Of view fully and Sincerely; 1n th$ the United States—provided that materials or manufactured goods;; ing facilities have been taken over > • 4 , - r Economy of ' In the meantime, years. the Finally: We have a vital inter- whole European economy cries out est in the future of Germany, be- for swift rehabilitation; * Delay cause Germany—besides being the means not only protracted suf¬ chronic trouble maker of Europe fering, but unrest and a conse¬ East, and t ' - - „ • , , , . • , . . . ' , • . ' <:■ ^ . ; • • - - . , : . , t . . iMMcWtWUtf MiiowitttimiMwim realization THE COMMERCIAL & FINANCIAL CHRONICLE Number 4550 that, effective agree¬ ment can be reached result of a compromise based mutual confidence only as the upon under¬ ahd the occupy¬ ing powers has had a.clear policy. Each has had its understand¬ own able preoccupation. * been concerned Russia has with reparations in order to restore its devas¬ own France has been con¬ with partition, as protec¬ tion against a fourth German in¬ cerned vasion. Britain has been con¬ cerned with restoring as much as possible the of the world. concerned much as order. map of have been prewar And we with we preserving as could of its economic We have not faced the fact that the peoples of Europe do not restoration of prewar ca¬ want a pitalism, and could not restore it if they wanted it. even : Because of these and other pre¬ occupations, out view a us and the of problems woven the and of realistic none , worked sidered rehabilitation, — ultimate has con¬ inter¬ two creation of a world capable of living in peace. Germany is only a part of that twofold problem, but a part which reflects the whole. who desire they to know only what they prevent but not what trying to accomplish.' A are clear definition of considered pur¬ pose by each of the four occupy¬ ing powers would probably bring out a far greater area of common ground than parent. Peace is to all of Of our is at present more than us ap¬ important attainment the individual desires or pre¬ dilections. Putting an end to human suffering everywhere is more important than economic or political • advantage temporarily gained or precariously held. As one of the great powers charged with making the peace, we of the trustees for all the are one offering of 150,000 shares $100 par value first preferred stock, 4.40% series A, of St. Regis Although many people have decried the delay of the Interstate Paper Co.,, is being made today Commerce Commission in coming to a decision on the carriers' re¬ (Thursday) by an investment quest for rate relief there are few to be found who are inclined to banking group headed by White, criticize the final decision. In view of the sharp earnings declines ex¬ Weld & Co. The stock is being perienced by the great majority of railroads in the period since V-J offered at $100 per share plus Day, and influenced by the earlier decision of the Commission in the accrued dividends from the date Railway Express Agency rate<J> —: —r*rr—■■ ;l", of issue. use muscles—but in the clear that this war shall be the last, and that it shall not have been fought in Vain. "This is the time, not for floundering in vagueness and am¬ biguity, but for determination conditioned by respect for the rights of others, for courage tem¬ our purpose pered by wisdom, and for strength made gentle by a sense of respon¬ 3V If . have failed thus far, it sale will T St. Regis Paper the leading ; Co. £ is * of of one manufacturers v of in the United products paper States with ex- the are the people. The other items. many pany over-all were a increase is The com¬ of the country's lead¬ producers - of groundwood one direction. Some quarters had also held to the belief that the decision carriers 14% of the total domestic output such - months paper ; ended for another 25%., which - than other sections of the country are The Panelyte manufactures laminated has been indicated this year that the eastern roads are more seri¬ ously in need of the rate relief the favorable differential cut was to purely nominal proportions in the recent decision. ; The surprise over the size of the rate" increase allowed touched off plastics, accountsfor a buying wave in the short session approximatelyf 10% of current however,* was sales, and supplies primarily the Saturday which, refrigeration, automotive and elec¬ dampened to some. extent by un¬ trical industries. Net sales, royal¬ certainties inherent in industrial and ties and rentals of subsidiaries and totaled income the in company the Canada for to United the $51,225,567 amounted and net sales 100,299. Milwaukee, St. 3 . (Special to year and net died at heart attack. was with G. For many years he Ohrstrom & Co., L. later joining the W. H. Bell firm. with many / - The Financial Chronicle) RAPIDS, $2,211,411. coal this zon strike. Over the - remaining cloud was to The Financial -3 ' on dissipated and $5 dividend on the pre¬ ferred out of 1945 earnings. tion this on Ac¬ ing .clarification of railroad 3 picture. the general Financial has G. become Cantor & associated Co., with 161 Devon¬ With Clayton Securities to The Financial BOSTON, MASS.—John M. Colmonthly meet¬ burn has joined the s aff of Clay¬ 17, directors of New ton Securities Corp., 82 Devonshire York, Chicago & St. Louis are ex¬ Street, /■; 3/;• ~';•*'... Dec. on pected to declare a dividend of at least $5 a share out of 1946 ings against arrears'on earn¬ the 6% preferred stock. A dividend Of $1 a. share out •; of 1946 earnings was paid in the spring and the will pany twice over rectors of who took the this earn com¬ the Gulf, no $6 dividend. Mobile & dividend, The Financial Di¬ Chicago Railways C Cons. "A" 5s, 1927 are : ex¬ $£ a the 5% preferred at their meeting. There may be other favorable actions. With any such evidence of returning ; Arden Farms - Common & Preferred u man¬ confidence, public senti¬ now way Interstate Bakeries Common & Preferred Or- and the industrial picture has improved. - ; , . Universal Match i Republic Pictures Railroad Bonds and Stocks , Debenture 4s, 1965 fi 3 Chronicle) BOSTON, MASS.—May & Gan¬ non, Inc., 161 Devonshire Street, * . ' 3 y.M. Ernst&Co. 3 MEMBERS With L. F. Rothschild /(Special, to The Financial /BOSTON, Morham L. F. MASS. —James C. has joined the staff of Rothschild & Co., 30 State V. V.''-"1''-'. ■ 61 Member* New York Stock Exchange Broadway ■ . 120 Broadway, New York 5,N. Y. New York 6 Telephone—DIgby 4-4933 Bell Teletype—NY 1-310 , Street. Lady of Victory Church 231 So. LaSalle St., 1st Chicago 4, 111. Mtg "A" 4s 1993 Bond on Main Line Properties of Strategic Nature SEABOARD-ALL FLORIDA 6s, 193S A War Memorial in the Financial District — /Priced to.yield better than 6|4% Bonds & Certifs. : DENVER & SALT LAKE ; 6s, 1960 — Assented & Analysis on Request Unassented Your Contribution is Earnestly Solicited -for the Building Fund LONG ISLAND AIRLINES ' f.UARANTEED RAILROAD Mclaughlin, reuss & co. 1. h. rothchild & co. Member of National Association of Securities Dealers, Inc. i'..} u.J. r ).« i -j -if t.. 25 Broad Street 52 wall HAnover street 2-9072 TTrrTTTTTTI / York Stock Exchange and other leading Security and Commodity Exchs. New PFLUGFELDER, BAMFTON & RUST Chronicle) First Mortgage \ Chronicle) OhiOr December agement to well year pected to declare at least $2.50 on (Special BOSTON, MASS.—Sanford Dj. Palmer, Jr. has become affiliated with Kidder, Peabody & Co., 115 Devonshire Street. ; : % action with respect to mid-year share With Kidder, Peabody Co, DL&W—Lackawanna RR N J ■ / Chronicle) At their regular ing Trading Markets in- Our . Chronicle) shire Street. ;(Special the hori¬ more The postponed pend¬ was that the rate question is out of the far to BOSTON, MASS.—Paul B. Condry weekend a (Special / staff. Philadelphia, Pa. his home after suffering a tox With Cantor in Boston were May & Gannon Adds (Soecial Frederick V. De Voll, Secretary of W. H. Bell & .Co.,. Inc., .1500 Street, \ Street. B. • Walnut ■' \ GRAND the full has added John A. McCue to their F. V. De Voll Dead previously McKinnon With John R. Schermer Co. Paul & Pacific will have declared stagnation brought about by the ment should also be bolstered $35,336,923, income amounted to $2,-/• r. net rectors of Chicago, - heavy-duty multiwall paper bags, while sales of groundwood printing and v publication papers, used /for telephone directories, magazines and catalogues, account division, better break a during the 18 would be carried through in the 30, 1946. permanent increases. Although it June Nearly 50% of current sales failure 1 with few minor ing of last spring, in connection with printing and publication papers, the temporary increases, to give having produced approximately the eastern to date is ours, but so also is the opportunity. associated was & years. resent the will of the people. And we Collins Thomson healthy and well rounded market allowed well be supported by constructive surprises dividend developments over the in the decision, considering the next week or so. By the time this past history of rate allowances by is in print it is expected that di¬ there consisting the Commission. Some increases of groundwood printing and pub¬ were even greater than had been lication /papers, kraft pulp and requested^ paper, heavy-duty multiwall paper Coal roads were particularly bags and laminated plastics. The well treated and the general treat¬ company and subsidiaries / also ment '. of agricultural products, manufacture bag-making and bagwhere long term policy has been filling machinery. /*; St; Regis is against substantial increases, was probably the world's largest man¬ highly favorable to the carriers. ufacturer of multiwall paper bags Failure to allow any increase on which are used to package cement iron ore shipments to upper lake and other pulverized rock prod¬ ports, on the other hand/ consti¬ ucts, as well as chemical, food tuted a surprise in, the opposite and ernment. which does, in the long run, rep¬ been output an 1946, government generally become Clogher & Co., 1011 Lincoln Road. Mr. be For the six months ended June 30, a had have the is not solely the fault of our gov¬ We have Chronicle) Stanley 1945 we the redeem to States sibility. Financial . of A moment to strength—not in the arrogant flexing of our military and eco¬ The BEACH,' FLA.—Frank Collins and Stanley H. Gettis MICH. — pected that the railroads would enthusiasm was in evidence as the Marion H. Bignell has become company's get a good share of what they had week opened. Obviously all of the associated with John R. Schermer outstanding 5% cumulative prior asked for. It is doubtful/however, uncertainties have not been re¬ & Co., Grand Rapids National preferred stock and the $2.50 cu¬ if many of even the most bullish moved. We have still to look for¬ Bank Building. mulative preferred stock of Tag- followers of railroad securities had ward to anticipated requests for gart Corp., a subsidiary, amount¬ anticipated as favorable a de¬ additional wage increases in the ing;; in each case to $52.50 per cision as was finally handed down. steel and automobile Kerr & Bell Adds industries. share plus accrued dividends; to (Special to The Financial Chronicle) With the exceptions contained With greater firmness on the part purchase certain pulp and paper in'their LOS ANGELES, CALIF.—John orginal request for rate of government, however, and the mills and other related assets relief the railroads, had asked for recent change in the political L. Strahley has been added to the from Time, Inc., and the balance an average increase of little more complexion there is increasing staff of Kerr & Bell, 629 South together with other corporate than 19%. The Commission has confidence that these two prob¬ Spring Street, members of the Los funds will be used in the com¬ actually granted what is estimated lems will be surmounted without Angeles Stock Exchange. pany's modernization and expan¬ to work out to an average increase any disastrous paralyzatiori of our sion program;. The company will of 17.6%. -• [ Moreover, the decision economy. issue to Time, Inc., an additional Smart With E. H. was unanimous with no Commis¬ All in all, the great majority of (Special to The Financial Chronicle) 50,000 shares of the new preferred sioner dissenting and also provid¬ railroad analysts accept the pres¬ stock and 550,000 shares of com¬ ed for making the temporary 10% ent outlook as WATERVILLE, ME.—Ray John fully justifying a mon stock as part of the purchase increase in Smart has become associated with passenger fares perma¬ constructive attitude towards rail¬ price for the property acquired nent. Aside from the magnitude road securities. This attitude could E. H. Stanley & Co., 177 Main used not to hoard it. our it case, Proceeds from of . definition of (Special to MIAMI of peoples of the world. And, among the great power trustees, we are, for the moment, the strongest. This is our crisis of opportunity. A moment to use our strength, nomic Two With Glogher & Co. Offered at Par from that corporation. Compromise is difficult between men Paper Pfd. Public To date, not one of tated areas. 3109 M. standing. ..V. :-v;/ 4 St. Regis 7/;>/£'<,/I1-f ' [Volume 164 MW-ulhftSllMtiJwif'A.v n. y. c. 5 Tele. NY 1-1293 STOCKS-BONDS New York 4, N. Y. Telephone BOwling Green 9-6400 Teletype NY 1-1063 ;ra iY* THE COMMERCIAL & FINANCIAL CHRONICLE 3110 Thursday, December 12, 1946 * i. • M'-r-'W follows the action of the aver¬ Tomorrow's Whyte ket. of through indicates a secondary This in turn is based trend. the fact that the on up¬ rails have already pushed through their tops three times. Current optimism based previous talk of bull new mar- The top was 51.22 made Nov. Future still clouded. 2. But before you go off halfRaise stops on present hold¬ cocked it might be just as ings. well to know that by a strict past. on market the that Now interpretation of this theory, the talk is begin¬ nothing has - occurred to the "New Bull Market or Where/Will the change the bear market sig¬ nal which was first given last Bear Market End?" What zoomed up ning about set off the recent or and may get across time you read this. now 49^ Within this the¬ many other ones current September. are ory I'lli/only confuse you, f If you know the theory, you don't need my explana¬ tion. If you don't, then any¬ What actually set off the thing I say, will only add to rally I don't have the faintest your bewilderment. So in¬ idea, nor do I care very much. stead of theories I'll go back popular belief. Who am I to argue about it.:,,' and come because it stocks the to hold, aud you and explanations for them their actidn. as common as politician's promises before election. I But before I go on allow don't look gift horses in the me to point out that the pres¬ rpouth. The fact that they ent end of the coal strike went up is enough. Let some¬ doesn't mean that there'll be body else worry about the smooth sailing from now on. why. go are . Before 1947 is last In week's I column wrote that in spite of the then the market wasn't acting too badly. At the same time I also said I expected a poor news, dull reaction "for the next be over there will Some 2: of strikes. more them may be worse then, the recent coal stoppage.: ; : '' 'OS''v.;•: i" *V ■/:;//./:/;U * You still hold four all of which are, now stocks, in the days." Just to show how black. Position is. as follows: wron£ I can be, the dullness Anaconda bought at 37, to be few there, but the reaction sold across 42. It's now about 41. was not. Oh, Stop should be raised to yes, a few stocks did go off here and there, but 39; was it was hardly reaction a as reactions go. Dresser bought at *17, is Suggest prof¬ The market student who its across 24. Raise stop to 18. You won't get the 24 right away, at least I don't think so. If you do, so much the Established 1856 about 20. now - better. rate increases H. Hentz & Co. ^./1 Members York New Stock York New York Curb Commodity r Chicago Exchange, Exchange Cotton Exchange Exchange, Board of Jjc , * Orleans And 'Gulf,• Mobile and Ohio bought at 12, is now about 15. Raise that stop from 10 to 13. .:/// in turn is concerned with the future and not the past. continue stocks So I recommend to market perform¬ earnings, di¬ vidends and dyspepsia. Inci¬ dentally I have always tried to follow a slogan developed by C. Leslie Croll, "Facts and How to Avoid Them," for rea¬ sons I'll let you figure out. ance on and no,t on N. Y. Cotton Trade Exchange Exchanges But it would be foolish out. to buy anything without some Southern Pacific list the * insurance. More next Thursday. —Walter ' Whyte expressed in this article do not necessarily at any time coincide with those of the Chronicle. They are presented as [The views those of the author only.} came into between I'll make it 43 42 to and 43. avoid the Exchange Bldg. DETROIT PITTSBURGH GENEVA, SWITZERLAND Securities Gulf Oil LAMBORN & CO. on Pacific Coast Exchanges 99 WALL STREET 5, N. Y. Schwabacher & Co. Members SUGAR New Placed on New York Stock Curb Exchange Exports--Imports—Future* Board 14 Wall Street stock mon valued at placed on the secondary offering Francisco — Principal Offices — Santa Oakland Fresno — Barbara Sacramento only three de¬ throw our velopments which economic system can into depres¬ 8. No employee or prospective sion— ': employee should be required to 1. Mismanagement of the money join or to refrain from joining a /..,'• and credit system, and the union, or to maintain or withdraw Federal debt, in ways which his membership in a union, as a convert prosperity into an in¬ condition of employment. Com¬ flationary boom, thereby crepulsory union - membership and ',. ating strains and stresses interference with voluntary union vy which must inevitably lead to membership both should be pro¬ a collapse of prices, produchibited by law. ; -v* i v.. / ;■ tion and employment. : a ; . r , . , Biased 9. laws and biased ad¬ ministration of laws have made contribution to current 2. / difficul¬ production should be replaced with and . impartial administration of im¬ advance the interests of the whole intervention ment putes be in reduced to labor ;1 / prices, thereby creating of . ;.. balance groups between -the : y ,» ... an of thereby making it impossible government participation in labor disputes shoutd be to make avail¬ able competent and impartial to have that growth of capital minimum. full The extent conciliators. 1 i Compulsory arbitration, in par¬ ticular, is inconsistent with Amer¬ • adequate flow of private capital into produc¬ tive, job-making activities, * dis¬ lack a various various; sections o£ or the country. 3. Prevention of absolute an prevent or ;; flow of goods and services to |v final consumers at reasonable /; public while still safeguarding the rights of all employees. The preservation ; of free' collective bargaining demands that govern¬ , Granting or perpetuating special privileges which hinder a • ties which resources to provide .. yd; is necessary; increased;produc4 tion and jobs for /'Population. growing our ; / These three of depression causes ican ideals of individual freedom have existed in America in recent and is years, « These causes arenot within the power of industry to bound to destroy genuine All labor and .; related legisla¬ control. Corp. com¬ $25,191,180 the close of the New York Stock underwriting syndicate 147 investment houses headed by The First Bos¬ ton Corp. The block consisted of 399,860 shares, representing about 40% of the holdings of the Mellon by of Exchange existing statutes that are in vio¬ money system whenever trouble political lives. lation of such principles should be threatens; their have been over¬ brought Unto accord with them Governments thrown, nations have been devas¬ through appropriate action by the tated by bad money policies of Congress,.'■ '. ;///.;//;-4:;//„ market as a Dec. 9 after was 1 an The tax burden on U Persistent market to delay the offering until the present time, but mean¬ while members of 'the selling group were permitted to solicit orders on a provisional basis.' ' managers all people fourteen Taxes . it. reduced cialize Taxes the levied economy Taxes to so¬ incited class levied to raise prodigality. The extravagance of government revenue encourage and the expense in a by of the war exist burdensome debt to be paid our children and grandchil¬ To offset the absence of venture made ment 16 different tax in¬ This punitive tax policy creases. has discouraged incentive and has forced venture capital into hiding, into government bonds and other 1 s, non-venture risks., J, . leum ; producing, refining and marketing companies, distributes its products the United large part of over a States countries. in and , In many 1945 : the The operating in¬ come was approximately $504,693,000 and net income $43,204,000. For the 1946 net first income six months of to amounted • . poor 6 the offered to nation. : money that; it of as the money. people who earned the as¬ the com¬ stock, par value $1, of Dobbs will restore duction of the confidence. budget The priced operators. at $7-' a The proceeds will be used for expansion. of the debt will increase The reduction in taxes will invite. venture cap¬ ital into industry and commerce, Co.; Co.; Herman Bensdorf & Mid-Souttr Securities J. C. Bradford & Schas & Co.; Co.; Bullington- Co.; and Edward Brock - haus & Co. into agriculture, where / it wards. If ment securities. a result govern¬ The Federal Re¬ Board, which was created to guard the nation against a misuse serve the of credit mitted the system, has com¬ Reserve banks to buy securities in government unlim¬ ited volume in order,, to maintain artificial low yields on govern-, This securities. manipula¬ tion by the Reserve Board leaves they nation y without against serious protection credit disturb¬ ances, This/ creates a danger which should be removed by per¬ mitting interest rates to find, their own .. levels in free markets. The Reserve Board . . , should •// re¬ capture its function of protecting the nation against the misuse of the credit system, J The end of ' i tinkering and return to a gold standard would restore confidence to the nation, improve the purchasing power of the dollar and strengthen our in¬ ternational position. ' ~ money Decontrol ! To win the of Enterprise war / people/' willingly liberties ing the to the American curtailed / their strengthen the fight¬ power of the nation. Thus rights of labor and industry, .• the tax re¬ is not re¬ "/ More than has been a lost ' / year while : of the peace the govern¬ ment created inflation to offset its predicted never . came. unemployment that At this late time we should be jnoving forward solidly and with confidence - ■ burden restricted. All our wartime liberties on all fronts. curtailed in except those needed for duced in amount and made equi¬ national security should be re¬ distribution, private stored completely and rapidly. investment will largely disappear There should be assurance to the in this country. The results will nation that all residual wartime be either increased unemploy¬ controls do not become permanent table Other underwriters include B. F. Ward & as heavily loaded with are re¬ national solvency. should seek and earn its own was Federal Reserve Banks Both the and , , balancing and stock levels. banks of agriculture and commerce were and airport restaurant low commercial It is entirely possible to balance Houses, Inc., airline food caterers The the productively people:/ as : Govern¬ demonstrated cannot/spend the The public 75,000 shares of the mon of has ment 1, 1947. Offered to Public Dec. by reducing the productive the fiscal year 194748, to reduce the public .debt :at least $2V2 billion in 1947-1948 and future years and to reduce all in¬ dividual taxes 20%, effective Jan. Dobbs Houses Stock on , income the budget in " • public has learned a "soakpolicy, also soaks the the-rich" corporation's gross artificially the ment capital the government spent the people's money, obtained through taxes. V In-14 years the govern¬ " / Long before the war the inter¬ est rate structure had been forced to in levied to redistribute wealth only uncer¬ crisis caused by the underwriting . government, have been punitive. years dren. action. taxes American Commission had cleared the trans¬ tainties during the soft coal labor , should be reduced. ... conflicts. . „. , A Tax Policy family and trust. The offering was priced at $63 a share,: the closing price on the New York Stock Exchange. \ - > Formal offering came 21 days after the Securities and Exchange Teletype NY 1-928 Private Wires to Monterey Trade New York 5, N. Y. OOrtlandt 7-4150 Sau Exchange v ; (Associate) of other representatives or. management.:;-/>■;/;;:/! - Market A block of Gulf Oil share. York Chicago DIgby 4-2727 V.i!v\. "History records that political principles set fforth above. % Any demagogues t ink e r with the/ Offering Emanuel, Deetjen & Co. and Executed of .. sociates Orders NEW YORK America. tion should be consistent with the $26,746,013. Pacific Coast foremen collective bargaining. ; NEW YORK 4, N. Y.. CHICAGO political freedom of other form of coercion or inT should be prohibited. proved laws primarily designed to foreign Inc. Cotton other any '*'■ , Economic and - Trouble with fundamentals is that they reflect the past and not the future. The market Gulf Oil Corp., one of the larg¬ est of the fully integrated petro¬ '■ ' New his property,-at home, at work or elsewhere. Mass ; picketing and (about which timidation • # New (Continued from page 3023) you all sorts of reasons why the stock should go up, citing rally (by the time you read which call for subsequent To get back to Southern this it may no longer be cur¬ rent) was the Lewis order to testing of old lows and an¬ Pacific I now suggest you other follow-through above raise your stop from 38 to 44. his miners to go back and dig the old tops. H won't go into I hope you won't be stopped coal. At least that is the Rallies and declines Prosperlly|||§|s 50 by the I can give , highs old It is hair-splitters. "Aside from International catas7; Employers should not be re¬ according to a strict interpre¬ you were told weeks ago) and trophies and .great natural dis¬ other4 fundamental " factors; quired to bargain collectively with asters, there are tation of the familiar theory, ■By WALTER WHYTEstarts For example if the changes. industrials close above 176.76, it Push rally brought certain technical about Markets Walter interested to ages might be know that the in its ment, depression and economic restrictions on the liberties of ithe stagnation, or the government people. It is a serious error to assume taking over the function of in¬ vestment which would destroy the that the ending of controls of food Volume prices 164 Number 4550 , has ■: ended the 1 THE COMMERCIAL & FINANCIAL CHRONICLE continued talistic; wartime subjugation of the people by the government. • .- : # V - 'i'1' is indispensable to industry and .all:; other,segments; of the | 'i All economy that agriculture be V the for' relief J : and on an achievements The of continued living in free low Russia nite action in the matter. been ' successive common five-year opponents plans of the Russians were at¬ tempts to approach the production •/ V;, It sustenance. . Agriculture America enterprise. standard reflects the of in¬ has sive the ernors munism, issue a i» 1 Americans I Industry wants to be of help. \ ' There is much that lieves it • can industry be- do further ; to assist agriculture. : It believes that the spectacular increase in industrial horsepower per worker can be roughly imitated in agriculture. Industry believes that the appli¬ * , . of in and crops animal husbandry affords reason to be¬ lieve unlimited op¬ that there is industry. The American economy is indi¬ visible. The prosperity of Indus- I try and of agriculture is and to the £ to shoulder in winning back their liberties if competitive enterprise is to survive. Only by standing to venture for himself the assure What This come. could vidual do liberty. of has done,, other if given indi¬ America cannot heal the wounds of the world, but it offers a system of economic health that raises the standard of of all who are willing to it.; American, foreign; trade will increase with the improved wealth of foreign nations. Just it as States, does in whatever the the United National together can industry and agricul¬ Association of Manufacturers can ture produce that flow and inter- do to raise the standard of living change of farm and industrial of other countries, to increase products which will prevent in¬ their purchasing power by local ; flation industrialization, to improve their States that: great free country agriculture by modern methods, which it once was and can again to reduce disease and improve the ^vbec working capacity of individuals, it sooiiE^ is prepared to do through co¬ World Economy operation with the businessmen of The production achievements of other nations,or on invitation the American profit and loss sys¬ from any nation or from our own and make the United . tem have been tremendous in so comparison with the carteiization and communism the Old World of now government. • World prosperity points the way . that to good will among men and world looks to capi¬ peace, Europe (Continued from page 3017) against the proponents and their member arguments which, for very merits convincing many as to the relative of permissive incorpora¬ tion. firm the of Exchange end some reason there. It is the effect incorporation can The pamphlets, so say the oppo« have on the brokerage industry as nents, have obviously been pre¬ a whole which is troubling most pared by clever advertising writ¬ of the members of the Exchange, ers more skilled in the use of The feeling is .gen¬ high-powered punch-words and they argue. eral among the members that phrases than conversant with the permissive incorporation would general problem. The members of the Exchange, too, according to eventually relegate them to | the minor position which brokers on the opponents, don't like to see the i Zurich,Switzerland, -Stock themselves pictured as common day laborers or in other ludicrous Exchange occupy, the opponents contend/ In Zurich, the brokerage guises in the childish cartoons used in the pamphlets. In fact, in real sense, insulting to the intelligence of the members of the Exchange. v „ a very f It is highly significant, the op¬ ponents believe, that the pro¬ ponents of incorporation, despite all the efforts they are putting in their current pamphleteering cam¬ paign, have not advanced a single new argument to support their position, The pamphlets merely presenting the same discredited ideas in they say. ents are a new Actually, the are old dress, propon¬ is actually ready. dead a the Board of the of the ac¬ Ex¬ board up decision a until week when after the on the issue first of the the on year. the members of the one say or the op¬ portunity "iftothink the through thoroughly.; matter tion by to the those benefits. in be the had business is of the There, subordinate function a great banks, bankers they declare. hold all the im¬ from the opponents, it would only be matter of time when take out change, a a a hank could membership in the Ex¬ tration self business * > ' -:; Some concern is also being felt by the opponents over the rather pretentious r^cala:^of The figures cited in the number five pamphlet purporting to show the new firms coming into an exchange > bring along with ; them new are business also mean¬ ingless, the opponents point out. The pamphlet argues that the vol¬ of listed business done by four new firms which purchased seats in recent years increased many-fold: Firm A, for instance, increased its volume of export straining nerve and more? more 3017) page every to Faced by Ministers this campaign, British admitted that all is gold that glitters in the sphere of export statistics. They admitted reluctantly not of it is unspendable, because the unable are or unwilling to export more of their goods to Britain. They now admit that it is not the global export figures that matter but the cur¬ rencies in which they are paid. For practical purposes, Britain's balance must be sharply trade divided between trade with coun¬ tries with "hard" and "soft" cur¬ rencies. It is the trade balance in relation to the former that really matters. view the from this point of sharp rise of prices in United blow severe It And the further States has dealt a Britain's economy. increased the trad6 on relation to countries, to "hard" and use cur¬ forced the up the pro¬ pace. a neces¬ sity to inform the British public that in spite of the superficially giving - to any a copy statement, shall constitute an not in it¬ "offer to sell," Act, provided— substantially the and the rules thereunder to prospectus for by the Act regulations and be included registered in a securi¬ ties, or contains substantially that information except for the omis¬ sion of information with respect to the fore, would indeed have the effect really diluting the business by the present members of * Herring information required there¬ > (Continued from stead of disconcerting j (!) Such proposed form of pro¬ spectus contains over-the- Exchange, they declare. Carrencies: Einzig favorable or tion 2(3) of the counter, distributing or under¬ writing houses, the opponents say. incorporation, an of such "Hard" and "Sail" deficit in "offer for sale," "attempt or offer to dispose of," or "solicitation of an offer to buy" as used in Sec¬ underwriting and distributing came into the Exchange merely look for contacts for their underwriting and dis¬ tributing businessV on the Ex¬ change. Commission business just ume vocal. effective,: offering price, underwriting or commissions, dis¬ the such to the Exchange but, think opponents, perhaps they more Red Sending decisions and brokers as The that of the proposed form of prospec¬ tus filed as a part of such regis¬ and Permissive on discounts help, they say. Of course, proposed; the question of per¬ missive incorporation does not provide for the admission of banks of and person, before a registration state¬ ment becomes The would of of or under any This is why it has become (a) firms that function entered Rule counts hired weak as /(Continued from page 3021) K'./ "Solicitation of an Offer to Buy" as used in Section 2(3). ness would merely utilize their Exchange connections to build up the 8(e) of the Act, or appearance of figures, Britain slacken the export drive. cannot export afford to ... the greater rate of over-the-counter busi¬ over-the-counter if, SEC Issues Hew done as arguments group Prospectus of oh prospectus ceeds of the American and Cana¬ dian loan at a of just the the in¬ to business to it. 8(d), government committee's of the time such proposed form prospectus is sent or given to any person, the registration states xnent is the subject of pending proceedings under Section 8(b), of rency portant positions on the Exchange, bankers j make all the necessary are the see majority opinion campaign, for instance, that incorpora¬ new stimulus isn't accom¬ so as to make the arguments of what it insists is the bring more business to the Exchange, arguing that the new firms joining the Ex¬ change would use their facilities • Governors above, Pamphlet number Ames' stresses the point tion would tend their of should organize corporation, will want to share in profit now, permit incorpora¬ to apply of any at sections. an benefits to steer Board boomeranging. however, feel overwhelming vote since, as they see it, the Exchange members, once they are aware of not giving Exchange, especially importing countries the opponents the Ames' proponents are confident that the Exchange will amend its constitution seen plish. The shall or The say. committee may be able to As mentioned No rule sending proposed form pay take any such possible action, it has been indicated. The opponents aren't fearful of what the Ames' board This the before members for a vote. Such a com¬ mittee might be formed, too, even before the board gets around to certainly will ever be able to that the board didn't give the various members time tax decide to refer the question to the question to the merits of their case. (b) to to force, in the oppo¬ that part of the proceeds of ex¬ view, permissive incorpora¬ ports is never received while part should It is becoming increasingly evident that the pro¬ ponents are working hard to con¬ as corporation tion upon the members of the New York Stock now since September. vince 38% nents' In retrospect, it is seen* now that the board has been taking monthly postponements ,< order followers the that the board would not was reach last under the Federal Securities Act of 1933 relating to the securities herein referred to has become effective." The will very likely form a committee to combat aggressively the attempt of the Ames' committee and its scheduled to be taken was out, The opponents, it is forthcoming from the meeting of the point need any large amount of capital, the opponents insist. change feel about the question of permissive incorporation. Still the only announcement on the subject matter opponents authorities are not going to permit the large accumulations of undivided profits either; the bro¬ kerage business is a service indus¬ try and, theoretically, does not cording to one of its own spokes¬ understands exactly how the members corporation, actually as they are con¬ least, in the present tax men, individual on far so distributing profits, they issue al¬ Governors, of lies now partnership does not have to . The side think cerned, at partnership form of organization, The Ames' group is just as the matter of permissive incorporation will be approved overwhelmingly by the Board of certain tion of them exists, ship. recent occasion Sir Staf¬ ford Cripps appealed to exporters to correct this position by divert¬ a ing export from soft currency countries to hard currency coun¬ tries. This is easier said than done, however. Nor is there much in¬ ducement for exporters to dis¬ criminate,- since they receive Sterling payment also for "soft" currencies which they surrender to the authorities. Since it is much easier to export to countries whose economies have been gravely affected by the war, they naturally prefer it to uphill worf of > increasing United States. exports to the Nevertheless, with little goodwill it may be possi¬ a ble to go some way in the direc¬ tion indicated by Sir Stafford Cripps. Exporters are afraid that, they make an effort to meet unless the government's request, that re¬ command. rates, call prices, or other matters dependent upon the offering price, and On quest may assume the form x>f commissions to dealers, of proceeds, conversion or amount They will therefore a go out of their way to sell to "hard" : currency countries * even at the cost of bigger efforts and smaller (2) Each page of every copy of such proposed form of prospectus contains the following statement profits. printed in red ink in type as large as that used generally in the body thereof: ■ ' appear from the size of the Brit¬ ish trade deficit. ; ; v A registration statement flating to the securities to listed changing; their story paign being conducted by the pro¬ business five times; Firm B, 6^ somewhat, that is, changing the ponents of incorporation. The times; Firm C, 3.9 times, and Firm wording of their main arguments elaborateness with. ■' which;-' this D, 5.11 times. " It stands to reason presented; ih the Kantzler-Ames campaign' is being conducted, in that any firm starting from a zero brochure on the subject last fact, is causing many members of (0) volume of trade is going to spring and this fact is not making the Apposition to wonder whether make seemingly spectacular gains a -favorable impression on the in its business during the there isn't more behind the first few drive members of the Exchange, -> the of the years if it is at all successful in proponents ; than what opponents allege. If the pro¬ would seem to be contained entrenching itself in the new in field, ponents had any real case to pre¬ the finely-worded arguments that the opponents say. There is noth¬ sent in favor of permissive incor¬ ing in these figures to show, howappear on the surface. ' poration, the opponents argue,' either that the increases The 26-man Ames' committee to ever, they would not be resorting to the were greater than the industry¬ push the cause of permissive in¬ devices they are now employing. wide increases over "the period or The opponents say they wouldn't corporation was. formed this;.fall when the Board of Governors of that the firms didn't take their object to the incorporation of any the Exchange-failed to take defi¬ business from the other, estab¬ ; the actual vote is an statement . some or that permissive in the judgment of the opponents, the tactics of the proponets are, ques¬ other, opposition points out, however, might think it advantageous to that the over-the-counter firms incorporate if only the matter joining the Exchange under the could ' or /, point change should realize, too, that if income is less than $50,000 a year, the tax advantage which decision is reached1 some education Opponents of Encorporation on NYSE Say Thoy May Organize to Fight Proponents of Issue in phase of the opponents their taken among the general member¬ five than It has plaris to pamphlet each week some in the matter gains and take they as America nations use American the penetrated all frontiers geography and of the mind.. American and of has living farmers freedom willingness to take losses in the hope of gains has induced the risking of money and effort that so inter¬ related that it cannot be divided. manufacturers must stand shoulder i from all the losses > in the im- have it the The junior partners of the vari¬ ous firms connected with the Ex¬ of living and protecting liberty of every individual in Governors and the general mem¬ America.:, : bership of the Exchange as the Progress in America has re¬ opponents are positive the ques¬ and lower its costs. success which effective in increasing the so individual to . been sulted portunity to apply further scientific methods to agriculture in the way that they have been applied - principles Like industry, agriculture must continue to improve its efficiency proving % incentive their the ; The farmers' shown recapture the com¬ petitive enterprise system and its that now new tion until 2 to standard cation of power on farms is in its initial stages. * have intention out, aggres¬ the Board of Gov¬ more independent, self-supporting basis. adequate results obtained by Com¬ discussing Exchange, increasingly has hesitated to act. announced lished, houses affiliated with the too, that this committee say, become : It has observation, 3111 1 herein filed and with Exchange Commission, but has come ; been the; Securities ; . has re¬ referred effective. not yet be¬ Information contained herein is for informa¬ tive Meanwhile the proceeds of the dollar loan have to be used a far larger extent than would to Municipal Bond Club to Hold Christmas Parly The Municipal Bond New York will hold Cocktail Party for Club of Christmas; members on a purposes only, and is sub¬ Monday, Dec. 23, at "the Wall ject to correction and change Street Club, 40 Wall Street, New without notice. Under no cir¬ York City. Jerome C. L. Tripp, cumstances is it to be considered a prospectus, or as an offer to sell, or the solicitation of an of¬ fer to buy the securities referred to herein. No offer to buy or L * A' sell any . such be made and securities no order Tripp & Co., is Chairman of the party committee. &£>;<■. o Burnett With Hutton Co. should to (Special chase the securities herein referred to will be accepted un¬ less and until a registration to The Financial s- Chronicle) OAKLAND, CALIF.—Robert W. pur¬ Burnett is F. Hutton Building. now & affiliated with E. Co., Central ' Bank - THE COMMERCIAL & FINANCIAL CHRONICLE 3112 Now Securities • Acme Electric Corp., Cuba, June 26 filed 132,740 Aug. 29 filed 50,000 shares ($20 par) and 82,000 Underwriters—G. L. capital funds for expansion purposes. American Limoges China cumulative preferred shares- ($1 par); common being sold for the account of certain stock¬ holders. Prices—$20 a share for the preferred, and $11.50 a share for the common. Proceeds—Company will apply proceeds to fully discharge" secured6 demand notes, mortgage notes and partial discharge of de¬ Aerovox to stockholders on the basis of one share of stock for each nine shares held. Unsub¬ scribed shares will be sold to the underwriters who will reoffer it to the public.: Price by amendment. Proceedsh —A maximum of $15,540,000 of the net proceeds will be v/yVy, 'applied to redemption of the company's cumulative pre¬ ferred stock, convertible 4% Series A, at $105 a share. • The balance will be added to general funds for corporate Corp., New York. Proceeds—Net proceeds, with other funds, will be used to redeem $20,000,000 of 7% by including repayment of obligations, acquisition production, and expansion of refining, transportation and marketing facilities. Offering tempor¬ arily postponed. , „ v purposes amendment. of cumulative preferred stock at $115 a share plus accrued ; dividends. Indefinitely postponed. - additional „ American Water Works Co., Inc., N. Y. March 30 filed 2,343,105 shares of common (par * Nov. 27 filed 1966. $5) plus ; include; Dillon, Read & Co. Inc., White Weld & Co., and Shields Co. (jointly), and W. C. Langley & Co. and The & First Boston Corp. (Jointly). Offering—Price to public by amendment. ' , the for ratio held. subscription of one to common > additional share for two . in shares V Unsubscribed shares will be offered for subscrip¬ tion to officers and directors of the company amendment. Proceeds—Working capital. • ~: Oct. 9 Arkansas (letter of notification) 15,000 shares each of pre¬ and common. Offering price, $10 a preferred a common share. If offerings are made in the State of Maine, they will be made by. Frederick C. Adams & Co., Boston. To complete plant and equip¬ ment and to provide working capital. June 5 share and 1 cent filed Western Gas Co. 33,639 shares of stock common Bachmann (par $5). Underwriters—Rauscher, Pierce & Co. Inc., and E. H. Rollins 8c Sons Inc. Offering—Stock will be offered to the public. Price by amendment. Shares are being sold by six stockholders. June 27 filed shares 950,000 ($1 par) common / stock. ing—A maximum of 100,000 shares may be sold by com¬ pany to persons, firms, or corporations with whom the corporation had network affiliation agreements on March The remainder will be offered publicly. working Building Corp., Dover, preference The 1,355,240 shares of common will be offered for subscription to common stockholders of the company in the ratio of one-third Del. stock will be offered 5 (letter of notification) 20,000 shares each ($10 par) 5% cumulative preferred and no par common. Price, $10 a unit consisting of one share of preferred and one share of common. Cladmetals Co., ment. distribute its common stock directly to the public. Offer¬ $6 per unit. Proceeds—Net proceeds esti¬ mated at $1,179,000 will be used to pay a mortgage on plant, pay accounts payable, purchase equipment, for building alterations and working capital. ' 7y/yy//yy ing—Price American Colortype Co., Clifton, N. J. ferred stock. ^ ($100 par) cumulative Underwriter—White, Weld & Co. pre- Price by amendment. Proceeds—Net proceeds initially will be added to general funds, however, the company antici- share for each shares of common common will share held. be purchased Unsub¬ by the Price—Public offering prices by amend¬ Proceeds—Net proceeds will be used to retire all ; voting common and 3 shares of non-voting Underwriters—None—the company intends to Aug. 12 filed 30,000 shares publicly. unexchanged shares of $6 prior stock and to redeem its outstanding 7% preferred stock. Temporarily postponed. 1 share of common. new underwriters. of Pittsburgh July 8 filed 196,500 units comprising 196,500 shares of voting common stock ($1 par) and 589,500 shares of nonvoting common stock ($1 par), each unit consisting of a scribed working y> yy capital and other corporate purposes. American of Underwriter—E. M. Fitch & Co., Phila¬ additional machinery, delphia. Proceeds—For Underwriter—Kuhn, Loeb & ence stock for each share of $6 prior preferred. Shares of first preference not issued in exchange will be sold to underwriters. The 300,000 shares of second , American Ttfov. (par $5). Co., New York. Offering—The 350,000 shares of first preference stock will be offered in exchange to holders of its 532,996 shares of $6 cumulative convertible prior preferred stock at the rate of 1.4 shares of fifst prefer¬ Price by ^amendment. Proceeds—To prepay notes payable to ac¬ quire radio station WXYZ, to construct broadcast trans¬ mitter for station KGO at San Francisco and for capital. stock common i Artcraft Hosiery Co., Philadelphia Sept. 27 filed 53,648 shares ($25 par) 4:V2% cumulative convertible preferred and 150,000 shares ($1 par) com¬ mon. It also covers shares of ance upon conversion of common reserved for issu¬ preferred. Underwriter—New- burger & Hano, Philadelphia. Price—$25.50 preferred will preferred, and 100,00 shares of common. The remaining 50,000 shares of common are being sold by three stockholders. Estimated net proceeds of $2,300,000 will be used by the company to pay off bank notes of about $1,100,000 a share and $12 a common share. Proceeds—Company receive proceeds from the sale of all of the and to purchase additional machinery and equipment in the amount of $1,200,000. Offering date indefinite.- " Proceeds—Will go to by amendment, 7 Basic 26 common, and $1).7 Bear, Stearns selling stockholders./Price - < • Inc., Cleveland, OhioJflJi (letter of notification) 5,000 shares (no par) to be offered to stockholders; 295 shares of and debentures at face. No working capital. yYy-.' "y't.. • yy.'\ yy. • y'v-'y-y -."y underwriting. ' Beacon Associates, To increase - -;.yw.. y;-'.v.A'r ■, '-V: y < yy". r ,yvi''-' Inc., Providence, R. I. Dec. 4 (letter of notification) 4,572 shares (no par) com¬ Price—$16.40 a share. Underwriter—F. L. Put¬ For liquidation of bank loans advances to subsidiary companies. or & Co., Inc., Boston. as Beaunit Mills, Inc., New York Sept. 27 filed 180,000 shares ($2.50 par) common. Under¬ writer White, Weld & Co., New York. Price — By — amendment. Proceeds—Of the total, 140,000 shares are being sold by St. Regis Paper Co., New York, and the remaining 40,000 shares are being sold by I. Rogosin, President of Beaunit Mills, Inc. Berbiglia, Inc., Kansas City, Mo. Sept. 12 (letter of notification) 41,000 shares of 5%' cumulative convertible $6 par preferred. Offering price, share. Underwriter—Estes, Snyder & Co., Topeka, Kans. To pay outstanding indebtedness and expenses and to open five additional stores in Kansas City, Mo. Offer¬ ing postponed indefinitely. >yy y.v.y $6 a y Berg Plastics & Die Casting Co., Inc. , notification) 75,000 shares (10c par) Price—$4 a share. Underwriter—E. F. Gilles¬ pie & Co., Inc. Proceeds—For acquisition of machinery, common. tools and raw materials, and for working capital. Birmingham Nov. 1 Electric filed 64,000 Co., Birmingham, Ala. Corporate and Public Financing ($100 par) 4.20% preferred. Underwriting—To be determined by competitive bid¬ ding. Probable bidders include The First Boston Corp.; Dillon, Read & Co., Inc.; Blyth & Co., Inc.; Lehman Brothers; Kidder, Peabody & Co. Offering—Company is offering the stock on a share for share exchange basis to holders of its $7 preferred stock ferred stock, plus a cash expires'3 p.m. (EST) Dec. the exchange will be sold price not less than $100 per and $6 pre¬ adjustment. Exchange offer 23. Shares not required for at competitive bidding at a share net to the company. '/■; f The SPECIALISTS /N— C. J. DEVINE •/ v ■ y -v y 4 inc. New York • • Pittsburgh and other cities • , CO. •" y Kidder, Peabody^ Co.; Founded 1865 Chicago • Boston • Philadelphia * Cleveland St. Louis * San Francisco * 1 Pittsburgh New York . \k y < Cincinnati • ■ * J ^ HAnover 2-2727 Members Chicago • & .:•/ / 48 WALL ST., NEW YORK 5, N. Y. •' Securities ^ CORPORATION '• of y.y^-7 Corporate and Municipal Stale and Municipal Bonds FIRST BOSTON Boston Underwriters and Distributors States Government Securities y shares ☆ — . Oct. 31. (letter of •A /. y, « Food Materials, ($100 par) preferred, 4,750 shares (no par) common and $50,000 10*year 5% debenture notes, all to be offered to the public. Prices—$5 per common share to stockholders; $10 per common share to public, $100 per preferred share nam July 12 filed 350,000 shares (no par) cumulative first / preference stock, Series A; 300,000 shares of convertible second preference stock, Series A, and 1,355,240 shares Underwriter—Dillon, Read & Co. Inc., New York. Offer¬ 31. Armour and Co., Chicago - ! (par (par Underwriters—Kidder, Peabody & Co. 6 Co. mon. Inc., N. Y. Uxbridge .Worsted Corp. Nov. 27 filed 45,000 shares of 4% preferred stock $100) and 200,000 shares of common stock Nov. a V. » r Price—By Offering in¬ ' *y .v — , stockholders each / — Proceeds Net proceeds together with treasury funds will be used to redeem on Feb. 1, 1947. $18,000,000 New South Wales external 5s due 1957 and to pay at maturity Feb. 15, 1947, $8,700,000 State of Queensland External 6s, < > American Zinc, Lead & Smelting Co., St. Louis Sept. 6 filed 336,550 shares common stock (par $1). Un-7. derwriting—No underwriting. Offering—Stock will be offered (12/16) $25,000,000 20-year 3V2% bonds due Dec. 1, Morgan Stanley & Co. Price by: Underwriter amendment. an additional number determinable only after the re¬ sults of competitive bidding are known. Underwriters— To be filed by amendment. Probable bidders ferred Broadcasting Co., , ; Australia, Commonwealth of definitely postponed. American & Co., New Offering—Stock will be offered for subscription . common preference stock. Underwriting—Union Securities Price * indebtedness to Bankers Trust Co., New York. Balance, will be added to working capital. Offering postponed. Lanes, Inc., Portland, Me. York. July 18 filed 100,000 shares each of $100 par prior pre- ' ferred stock and $100j#$r convertible second preferred Aug. 22 filed $1,500,000 of 5% sinking fund debentures, <due 1961, and 50,000 shares ($1 par) common stock. Underwriter—Ames, Emerich & Co., Inc., and Dempsey <& Co., Chicago. Offering—The debentures will be of¬ fered publicly. The common shares will be issuable upon the exercise of stock purchase warrants for purchase of common stock at $2 a share above the bid price of such common on the effective date of the registration. Com¬ pany will sell warrants for 25,000 common shares to the underwriters at 10 cents a warrant. The remaining war¬ rants will be sold to officers and employees of the com¬ pany. Price—Debentures at 98. Proceeds—Company will use $1,025,000 of proceeds of debs, for payment of an Air American Locomotive Co., New York / ($100 par) cumulative pref¬ Underwriter—Smith, Barney , ' Offering temporarily postponed. Corp., Bedford, Mass. Corp., New York Sept. 25 filed 75,000 shares of common stock (par $1). & Co. Proceeds—Stock being sold for account of Harry Bloomberg, President. Price—By amendment. Offering date indefinite. y Co. and S. R. Refining Co., Philadelphia Oct. 29 filed 293,000 shares erence stock. Underwriter—Riter are benture indebtedness. Atlantic .... JLivingstone & Co. Offering—Company is offering the 50,000 shares of preferred, while the 82,000 shares of common Nov, 25 2 .. 1 5% Ohrstrom & Associated Manufacturing & Foundry Co. N.S.L.* Albuquerque, N. Mex. y / :. (letter of notification) 10,000 shares Fidelity Co., Montpelier ($10 par) " common. Price—$10 a share. Underwriter—E. H. Mar-, (letter of notification) 10,000 shares (no par)- "tin & Co. For erection of modern grey iron foundry capital stock, to be offered to present stockholders. and for working capital. / V V Price—$59 a share. No underwriting. < For additional Acme-Hamilton Mfg. Corp., Trenton, N. J. stock. Offering date indefinite. American Dec. share. stock INDICATES ADDITIONS SINCE PREVIOUS ISSUE program. ($1 Proceeds—Company will receive proceeds from the sale of 68,880 shares and four selling stockholders the proceeds from the sale of 63,860 shares. Company also will receive proceeds from the sale of 20,000 warr rants for common stock to underwriters at an aggregate prifce of $200. Of the net proceeds ($292,940) $50,000 will be used to pay current bank loans; about $20,000 will be used for machinery and equipment, and the re¬ mainder for working capital. a Registration pates it will use the funds for its building and expansion N. Y. par) common stock. Underwriters—Herrick, Waddell & Co., Inc., and First Colony Corp. Offering—To be offered publicly at $5 shares in Thursday, December 12, 1946 s of the New York and Boston Stock Exchanges Boston - Philadelphia 7 :; . Chicago > ■ ,Volurfie>164 ?Number 4550 commercial & financial chronicle f "" . i NEW ISSUE CALENDAR 4 ft;. (Showing probable date of offering) December 12f 1946 December 16, 1946 ft Australia, Commonwealth of—————Bonds & Lake Erie ;r:;>v ft -'/ft :ft; • Noon '(EST) ft.,- V; December 18,. Chase Candy Co Red Owl Stores, Inc • Pref. and Common — Stage Publications, Inc.— Pref. and Common December 19, 5 1946 Buffalo Creek RR. (Noon)—Cond. Sales Agreement Union Pacific RR. (Noon)—Cond. Sales Agreement ^December. 23, > \ ft. —_„.A_ _—.Bonds - & Moore, Inc.. .Common Blue Book York Dec. 6 (letter of notification) $150,000 of $5,000 franchises for distribution of catalogue or $10,000 publication. Price —$5,000 or $10,000 each. No underwriting. production of catalogue publication. (Sidney) & Co. Inc., ? /.;*••• v New York Aug. 30 filed 119,706 shares (no par) common and sub¬ scription warrants relating to 30,000 shares thereof. Underwriting — None. Proceeds—For reimbursement of company's treasury for funds expended in re¬ demption of 3,907 shares of 7% cumulative pre¬ ferred on April 1, and for funds deposited in trust for redemption on Oct. 1 of remaining preferred shares. Al¬ though it was proposed to offer the stock for subscrip¬ tion to stockholders at $10 per share, company on Sept. 20 decided to Oct. withhold action at this time. ; filed 300,000 200,000 use Price by amendment. its net proceeds for work¬ materials and book inventories. and ($50 par) H. Davis Offering—Preferred & Co. and 5% cumulative common. Stroud & Under¬ stock of the total common, 375,000 offered for sale for cash. 30,000 shares Cg., Inc. shares will be are reserved for Issuance upon exercise of warrants attached to preferred and 95,000 shares are reserved for issuance upon exer¬ cise of outstanding warrants. Price—By amendment. . Proceeds—Net proceeds, together with other funds, Will i be used to pay the company's 2% subordinated note in the principal amount of are their by three stockholders at own account. The remaining being offered by the company. Price Proceeds—Company's in amount $5,268,750 and Offering date indefinite. accrued interest. ' ft- ft ft ' 150,000 of share to pay rene¬ to the U. S. $180,000 Corp. Ltd., Toronto ft shares pur¬ machinery and equipment, and tools, jigs, dies balance will Plywood Juan, Plierto Rico. Dec. be available for corporate Indefinitely delayed. Caribbean Plastics Corp., "ft; Carscor \ Porcupine Gold Mines, Ltd.; of Toronto; Ontario . June 24 filed 400,000 shares of writer—No underwriters. stock. Under¬ UNDERWRITERS—DISTRIBUTORS—DEALERS ft'-' C*V'W ft'VftV*". : .•ft ft V 'v.V'V",- V'• **"' • '.'V-/- '''• '• and to the at Securities .: public at a variety exploration, sinking of shafts, diamond drilling and working capital. 1 share in Canadian funds. Proceeds—For of purposes in connection with , Central & South West Utilities Co. Aug. 30 filed its ($5 par) capital stock. Company's name is to be changed by post effective amendment to Central & South West Corp. (Del.) Prospectus will be issued in connection with the public invitation for sealed bids a sufficient number of such shares for the purchase of V NEW YORK PHILADELPHIA Members New York Stock ALBANY PITTSBURGH CHICAGO TRENTON WASHINGTON M. Any of the remaining officers, directors and employees will be sold Proceed*1—Net proceeds, estimated underwriters. Industries for all Division. the ■ _ assets make payment to Clinton of their National Candy ft ft 1 ' . • ' - - • China Motor Corp., New York Oct. 24 filed 7,500 shares ($100 par) to 6% preferential Class A stock, en¬ dividends, cumulative from July 1, 1947, and to participating dividends. Underwriter titled —None. Offering—Company expects to sell the stock largely to members of Chinese communities in the United States and elsewhere. Price—$101 a share. Pro¬ ceeds—Net proceeds, estimated at about $748,500, are expected to be applied as additional working capital, payment of indebtedness and to provide capital to aid in establishing • branch plant in Canton, China. a Christina Mines, Inc., New York . (12/16) J v 9 (letter of notification) 270,000 common shares (par $1). Underwriters—Newkirk & Banks, Inc. Price— $1 per share. Proceeds—Working capital, etc. • Citizens Casualty Co. of New York v Dec. 3 (letter of notification) 5,000 shares of $1.25 prior preferred being offered to stockholders at $25 a share. The right to subscribe will be in the ratio of one share for each ment 5 shares held. Corp., New York, Underwriter—Salvoy Adjust¬ be considered underwriters. may For general corporate purposes. Claussen's (H. H.) ' ft, ",ft, , Sons, Inc., Augusta, Ga. Nov. 7 filed 7,500 shares ($100 par) 5% cumulative pre- ft ferred and 35,000 shares ($1 par) ible preferred. participating convert¬ Underwriter—Johnson, Lane, Space & Co., Inc;, Augusta. Price—By amendment. Proceeds— The securities are issued and outstanding and are being sold by the executors of the estate of George F. Claussen and by Euclid Claussen, President of the company, who sole stockholders. ■ .-'/ft: 'ft-'ft. ft • ftftftft/, "ft-ftftftft ft'..ft Colonial Airlines, Inc., New York - Oct. 25 filed 150,000 shares ($1 par) capital stock. Under¬ writer—Auchincloss, Parker & Redpath, Washington, D. C. and Hornblower and Weeks, New York. Price by amendment. Proceeds—Net proceeds will be used to pay off a ft. $550,000 loan to the Continental Bank & Trust Co. of New crease York; purchase equipment and development ex¬ of Bermuda route. The balance will be used to 'in¬ working capital. tl f , ' ', ft 'f Colonial Sand & Stone Co., Inc., N. Y. August 15 filed 300,000 shares ($1 par) common stock. Underwriters—Emanuel, Deetjen & Co., New York. Price ft amendment. Proceeds—Company will receive pro¬ by ceeds from the sale of 150,000 President of company, who is shares and Generoso Pope, ft selling the remaining 150,- 000 shares will receive proceeds from these shares. The company will use its proceeds for payment of mortgage notes, open account indebtedness and for purchase oi! additional equipment. Any balance will be added; to vertible capital. Indefinitely postponed. . f, • Registrar ONE HUNDRED TWENTY Trustee BROADWAY NEW YORK 15, N. Y. j • RECTOR 2-2200 preferred ($50 par) cumulative con¬ Underwriter—Union Securi¬ stock. ties Corp., New York. Price by amendment. Proceed* —Prior to the proposed issue of preferred stock, the company ■ft'ft ft. INDIANAPOLIS Company OF NEW YORK ftftftft'-; Exchange ■ Aug. 20 filed 70,000 shares The Marine Midland Trust Hemphill, Noyes CO, Co. ... H. not subscribed for by stockhold¬ $5,700,000, will be used to a Transfer Agent V investment. are Offering—To the $1 Co., Inc. and Colorado Milling & Elevator Co., Denver, Colo. Industrial, Public Utility, Railroad ftftftftft'-and Municipal common for 70,000 shares which ers working • & subscription rights, F. S. penses common Yantis Yantis & Co. will purchase 100,000 shares of the 170,000 San 9 S. for subscription at $8 a share to common stock¬ at rate of one share for each two shares held and the preferred will be offered at $20 a share. Pursuant to the common stock are and (letter of notification 16,627 shares of common. Price—$11 a share. No underwriting. For purchase of machinery, equipment and working capital. x will have non-detachable stock purchase warrants for purchase of 30,000 shares of com-ft mon filed purposes. * Chicago, Inc. preferred and 500,000 shares ($1 par) writers—Paul underwriters for refund fixtures; • Sept. 10 filed 30,000 shares the ($1 par) common stock. Underwriter—Dempsey & Co. Offering—Stock initially will be offered to common stockholders of Admiral Corp.' at $3 a share. "Proceeds—$75,000 is earmarked for " Boston Store of 8 chase of ing capital to be used for expansion of inventories of raw to gotiation July shares. Proceeds—Company will and other sold $4.50 a share 120,000 shares $4.50 a share. Canadian Admiral including Harry Scherman, Presi-* -dent, and Meredith Wood, Vice-President, are selling paper July 29 filed 220,000 shares ($1 par) common stock. Un¬ derwriters—Gearhart & Co., Inc. Offering—Of the shares registered, 100,000 are issued and outstanding and will F. — fered Dec. Co., Grand Haven, Mich. ft St. Joseph, Mo. holders a ft and six stockholders, remaining A. Keppler shares ($1.25 par) capital stock. Underwriter—Eastman, Dillon & Co., New York. Offer¬ ing—Of the total, the company is selling 100,000 shares the common. 6 Co., Inc., New York. Proceeds—To demonstrate the Cameron Engine by flight tests in company-owned plane. be by amend¬ Proceeds—Working capital, etc. Offering indefin¬ shares of Government, and for additional working capital. Offer¬ ing date indefinite. Book-of-the-month Club, Inc., New York 28 ^ Cameron Aero Engine Corp., New York (letter of notfication) 60,000 shares of Offering—Price $2 a share. Underwriter—R. Cantfield Mfg. share for each 7J/3 shares held. Unsubscribed be sold to underwriters. Price Underwriters Rejected—Company July 23 rejected two bids re¬ ceived for the stock. Blyth & Co., Inc., and F. S. Moseley & Co. and associates submitted a bid of 100.06 for a 4.30% dividend. Harriman Ripley & Co. and Mellon Securities Corp. bid 100.779 for a 4.40% dividend. In¬ Oct. 2 To finance ft'.- Byllesby and Co. (Inc.), Chicago, and Herrick Waddell & Co., Inc., New York. Offering—Common will be of¬ Bids , ./ (12/18-20) Sept. 12 filed $2,500,000 of 4% sinking fund debentures, due 1961 (being sold privately to two insurance com¬ panies); 100,000 shares ($20 par) 5% convertible cumu¬ lative preferred, and 170,000 shares ($1 par) common. , Rejected—Standard Gas & Electric Co. rejected June 25 two bids for the purchase of the stock as un¬ satisfactory.- Blyth & Co., Inc., and First Boston Corp. bid of $28.33 a share, and Harriman Ripley & Co. bid of $24,031 a share. Stock will again be put up for sale when market conditions improve. Pref. and Common Associates, Inc., New Blumenthal ft Public .■.ft , Chase Candy Co., Bids January 15, 1947 ♦ one shares will ftftft ft/ft : Gas.' Co. California Oregon Power Co. — ftvs May 24 filed 312,000 shares of common stock (no par). Stock will be sold through competitive bidding. Under¬ writers—Names by amendment. Probable bidders in¬ clude Blyth & Co., Inc.; The First Boston Corp.; Harri¬ man Ripley & Co." Offering—Stock is being sold by Standard Gas and Electric Co., parent, of California. January 6, 1947 White's Auto Stores, Inc.— Union issuer of# , . Common December 30, 1946 Manning,; Maxwell Y.) definitely postponed. 1946 Old Town Ribbon & Carbon Co., Inc.- Sydney, County Council rate of May 3 filed 70,000 shares of cumulative preferred stock ($100 par). Underwriters—To be filed by amendment. Pref. and Common - (N. the consummation of American itely postponed. Temporarily postponed. Brooklyn ft/ft into merger upon Co., to provide funds for retiring the preference . Aug. 9 filed 76,000 shares (no par) capital stock. Under¬ writers—A. G. Becker & Co., Inc., Chicago." Price by amendment. Proceeds—Shares are being sold by stock¬ holders. constituted . by .... ,;- * Central Soya Co., Inc., Fort Wayne, Ind. Aug. 21 filed 90,000 shares (no par) common. Under¬ writer—None. Offering—Common shares initially will be offered for subscription to common stockholders at ment. —Bonds -ft • 1946,; be ment. Briggs & Stratton Corp., Milwaukee ft 310 111 * (jointly); Smith, Barney & Co.-Harriman, Ripley & Co. (jointly)* Blyth & Co., Inc., Stone & Webster Securities Corp. and First Boston Corp. (jointly). Price by amend- —Bonds Bonds ' issuer and American Public Service Co,, not exchanged for shares of the merged corporation. Underwriters by amendment. Possible bidders: Glore, Forgan & Co.; Lehman Brothers-Lazard Freres & Co. by Preferred will same proposed Service present stockholders. Net proceeds to the company, es¬ timated at $147,500, will be used to prepay to the ex¬ tent possible outstanding $149,300 mortgage liabilities. Offering date indefinite. Capital Stock ' shares of the company, the remaining 5,500 pre¬ ferred shares and all of the common are l*eing sold Capital Stock Pennsylvania Turnpike Commission ''ft-ft" f being sold are December 17, 1946 ; * — — Pittsburg, Bessemer -as — Inc._——iftftftft.Preferred Halliday Stores Corp.— Common Portis-Style Industries, Inc. —Common Eastern New York Power Corp. 11:30 a.m. (EST)— Harman (William H.) Corp Ohrbach's Inc. t convertible preferred stock and 50,000 shares (200 par) common stock. Underwriter C. K. Pistell & Co., Inc., New York. Price $25 a share for preferred and $11 a share for common. Proceeds—7,000 preferred shares Christina Mines Co.—————_Common Co v .. (Harry), Inc., Wilmington, Del. Sept. 25 filed 12,500 shares ($25 par) 4^% cumulative Drayer-Hansen Head (D. M.) Inc., Philadelphia Braunsteln Kansas City Power & Light Co.—-Bonds and Pref. ' 'J** Bowman Gum, "Sept. 27 filed 268,875 shares ($1 par) common. Under-' writer—Van Alstyne, Noel & Co.j New York; Price—By -amendment. Proceeds—Stock is being sold by share¬ holders who will receive proceeds. ft. ft '.ft "ft,- v " plans to call its $3 cumulative convertible pre¬ ferred stock for redemption at $55 a share plus accrued Funds for the redemption will be supplied dividends. by a short term bank loan. Proceeds from the sale of preferred, together with other funds, will be repay the bank loan. Indefinitely postponed. Columbia June 26 filed convertible Aircraft 150,000 preferred Products Inc. used to ft shares ($4 par) 30c cumulative stock, convertible into common (Continued on page 3114) v. < 3114 THE COMMERCIAL & FINANCIAL CHRONICLE [* j, v stock in the each share (Continued from page 3113) .Company anticipates expenditures -of $300,000 in 1946 and $300,000 in 1947 for equipping and absorbing costs of starting operations of four plants, two of which al¬ ready have been contracted for. The balance will be added io working capital. - ratio initially of Aft shares <) of common for preferred. .Underwriter—Floyd D. Cerf of Co., Inc., Chicago. Offering—Company offered 59,585% shares for subscription to present common stockholders of record Aug. 6 .at $4.50 a share in the ratio of one share of preferred for each share of common held. Rights Delta , scribe. The seed '/ s 1 Cleveland, Ohio working capital. • • * • Drayer-Hanson, 28 filed " • ; ..1 .. V •/ \ Under-j a vertible Class A stock. f < con-4 to be issued to satisfy options, 2,300 4 ceeds—Net proceeds, • estimated at $694,761, will bemused / to pay off loans and accounts payable. are machinery ^nd inventory. Oct. 15 * (letter Airlines/Inc. '•>.!' % J/ - Z Class Telephone Co.,'' Madison, Wis. A of notification) commons and exchanged will be sold to underwriters. by -amendment.: Proceeds—To redeem at* $110 share, plus divs., all unexchanged old shares. Conlon ; , Nov. Oct. 11 a and a Corp., Chicago Offering—Price $3 a common share and five cents warrant. Underwriter—Amos Treat & Co., New York.; " Car-na-var - of its 4 Nov. 15 filed $9,861,000 of first mortgage bonds, sinking series, due 1961,-and Corp., Brazil,' Ind. (letter of notification) ; $3,000,000 ($100 par) ; * ••/ Nov. 25 filed an unspecified number ($5 par) Eastern ,; , York Power, Z subject to approval of the ////■//• //. •/.././///;// 1840, 15 Broad Street/N. Y. City. Wis. _ selling- stockholders. Offering temporarily; postponed. // Oct. 2 filed 300,000 shares ($1 par) stock/Underwriter— Mark Daniels & Co., Toronto.'Price—40 cents a share / Bids Jnvited-^Bids for>the purchase of the bonds will be received up to 11:30 a.m. EST Dec. 17, at* Room Proceeds—If substantially all of the stock of Texon is acquired by the company pursuant, to this offer, or other¬ wise, merger, consolidation or liquidation proceedings be instituted. New Following the sale of its /GlencairMiningCo. - Ltd.,Toronto,Can. SEC. by amendment. . may To deem the outstanding International Paper Co.. 1st & ref. • 1947, to holders of $2 par capital stock of Texon Oil. & Land Co. The exchange ratio will be filed subsequently * 5% sinking fund mortgage bonds, due 1947.; These bonds were assumed by Hudson River Power Corp.-which to/gether with System Properties, Inc. will be merged into capital ; July 31 filed 50,000 shares of $1.25 cumulative converti¬ ble preferred stock series A ($20 par) and 150,000 shares (10c par) common, all issued and outstanding and being sold by eight selling stockholders. /Underwriters—-Van Alstyne Noel & Co. Price by amendment. 4 Proceeds— ; stock shares.; Underwriters—None.' Offering—The shares will be offered for exchange on or before Feb. 1, holdings of such stock. Glen. Industries "Inc.,/Milwaukee, (pre¬ 132,500 shares Continental Oil Co., New York Price by amendment. Proceeds— being sold by three stockholders, including Co., Inc., New York, which is selling all holdings J. G. White/will no longer be parent of Frontier. Company will receive* none of the proceeds. / ferred stock. Underwriters—To be determined by com-; ($1 par).' /petitive bidding. Probable bidders include Halsey, Stuart* common and 35,000 warrants for purchase of common Co./Inc.; Blyth & Co./Inc. and Kidder, Peabody & Co.; one year after present public offering. Price—$2 a com¬ (jointly); Smith, Barney & Co., The First Boston Corp. mon share, one cent a warrant. .Underwriter—L.VD. /and Eastman, Dillon & Co. (jointly). Proceeds — Pro-, Sherman .& Co., New York./For working capital.; ceeds, supplemented by other funds, will be used to reNov. are J. G. White Eastern New York Power Corp., Nr Y. (12/17) /fund Continental Shares machinery,! plant renovation and working capital. Offering datd indefinite. ' to be offered for j Under-: writer by amendment. / For (letter of notification) 15,109 shares ($1 par)k subscription to present stock¬ holders. Price—$2.50 a share. No ^underwriting. For additional working capital. . Frontier PowervCo.; Trinidad, Colo. (letter of notification) 99,000 shares of commoh purchase warrants covering 50,000 shares of com-/ /,Oct/25^filed-il9i4!3X/share$ ($5 par).common.' «mon. 26 common it' C.' 1 . ment. Shares not Price ' 100,000 shares of $1.25 cumulative con¬ vertible preferred stock (par $25)/Underwriter—Blyth & Co., Inc. Offering—Underwriters are making exchange offer to holders of Class A preferred on share for share basis plus a cash adjustment. - Proceeds—(Approximately $1,060,950 for redemption of class A preferred; balance ;for expansion, working capital,-etc; Dividend rate and price by amendment. Offering temporarily; postponed. Aug. 30 filed 450,000 shares (100 par) common. Under¬ writer—Newkirk & Banks, Inc. Offering—Of the total company is selling 350,000 shares and two stockholders, Roland E. Fulmer and Louis H. Newkirk, Jr., are selling the remaining 100,000 shares. Price—$6 a share. Proceeds —For purchase of sweet potatoes, plant expansion, addi¬ tional storage facilities, research and development work mid-working capital. /.Offering! date Indefihite.;, ; / ] \ 12,000 shares ' ($5 par)! 8,000 shares ($5 par) "Class B jcommon, iOffering—Price $5 a unit. ./No underwriting/ Sept. 23 filed 16,071 shares ($100: par) $4 cumulative» /For purchase of additional flight and servicing equip-/ preferred. Underwriters — Paine, Webber/ Jackson & meht, payment of deferred salary balances, for working Curtis and Stone & Webster Securities Corp. .Offering— ^capital and other expenses. * Shares will.-be offered for exchange for $5 cumulative preferred, on a share for share basis, plus cash adjust¬ Durasite Corp., Clearwater/Fla. /"V Commonwealth '-IW Vabrics Corp., New Fresh^ Dry 'Foeda/Inc./Columbia,'8/ Duluth (Minn.) ' ' , Underwriters—Maxwell/ Marshall I & Co., Los Angeles. tPrice—To public $10. a share.'Pro-; shares will be sold to employees and it is expected-that the remaining 20,320 shares will be sold to persons under the trust agreement. Price—$7.25 a share. - Proceeds— "pyt'T'-T? < /i' Philadelphia Foster&KleiserCo./SanFranclsco (12/16-18)/ Aug. 12 filed 80,529 shares ($1 par) 60c cumulative to be issued to persons under a trust agreement in satis-, faction of funds loaned by the trusts to the company; Stores, Inc., July 29 filed T '.j •.■n/M";;.': :Y ./•••• York July 29 filed 110,000 shares ($1 par) common stock, iall outstanding. Underwriters—Cohu & Torrey. Price iby amendment. Offering date indefinite.;; *, i; / , Inc., Los Angeles ■ ulative preferred at $53 a share. Balance will be added to working capital. /Temporarily Foreman Typesetting Co., Detroit, Mich., Forv /;/•/;:" 44 postponed. growing to be sold for planting in Spring > I . 89,540 shares ($5 par) common.Under¬ writing—None. Offering—Of the total 56,420 shares are .. / ($100 par) common. > : Aug. 5 filed 60,000 shares ($15 par) cumulative preferred stock. Underwriters—Eastman, Dillon & Co. Price"?by amendment. Proceeds—To be used to redeem 15-year 3%% sinking fund debentures, due 1959; and $2.50 cum¬ No underwriting. Sept. 25 filed 70,920 shares! ($1; par). /Boston. > / shares 500 ■/'•/' ■ •4. writer —> C. G. McDonald & Co.,; Detroit. Price — $5.50 ;/a. share. Proceeds — Stock is being sold by six share¬ holders who will receive proceeds. .;: •; ; : r ; . ;1 loan; $50,000 as a loan to Palmer Brothers Engines, Inc., a, subsidiary; balance for purchase of machinery and equipment and working capital. For purchase of share. a films. Food Fair /-'/ Detroit share. Proceeds—Approximately; $50,000 for payment of Federal taxes; $250,000 for payment of Lincoln-RFC 10,500 shares Price—$100 corn now of.1947. to Columbia Axle Co., • For «t production, harvesting and marketing of white hybrid a Oct. HybridsXo., Tuscola, III. (letter of notification) common. remaining subscribed 19 Nov, 90,414% .shares and 58,850% by common stockholders will be offered to the public through underwriters. Price—$5 shares not /other funds, will be used for production of educational vf,■;///;.''<.//4/4/V'■; expired Aug. 20. Stockholders subscribed for 735 shares. The offering to common stockholders excluded the* two principal stockholders who waived their rights to sub¬ Thursday, December 12, 1946 (Canadian Funds).. Proceeds--^For mine development. ^ Glensder Textile Corp., New York ' ;r Aug. 28 filed 355,000 shares ($1 par) common, of which 55,000 shares are reserved for issuance upon the exer¬ EmpireMillworkCorp./NewYork cise of stock purchase warrants../Underwriter —Y$n Aug. .28 filed 50,000 shares of $1.25 cumulative convertl/Alstyne, Noel & Co. /Offering—The 300,000 shares,are ble .preferred stock, (par $25)«and 150,000 shares of issued and outstanding and being sold for the account 4common stock (par $1). /Underwriters—Van / Alstyne/ / of certain stockholders. Company has also issued 55,000 ! Noel. & Co. Proceeds—Corporation will receive the pro- ! stock purchase warrants to the selling stockholders at / ceedsr from the issuance of 50,000 shares of the. common 10 cents a share entitling them to purchase up to Aug. 1, stock which will be used to increase productive capacity, 1949, common stock of the company at $11 a share. Price j add new lines of products and expand the business. The by amendment; Offering temporarily; postponed. »Ls/; remaining 100,000 shares of common stock and the pre- : iferred shares will be sold by present stockholders. Qf- - / ?• / Good/Foods/ Inc., 1 Minneapolis, , ^feripg temporarily; postponed, ; ; " ; Dec. 3 (letter of notification)/2,000 shares ($100; par) • . Continental-United industries: Co., { Inc. Aug. 2 filed 150,000 «. shares ($1 par)/„common. [Under-"; writers—Aronson, HalL. & Co. Price $8.25/per share. f Proceeds—To repay demand loans and for general funds. (Originally company .filed for *80,000 preferred. shares $25 apd 350,000 common shares.) ' ' " , par . ■ Crawford Clothed, Inc., L. I. City, N. Y. *7 9 filed 300,000 shares ($5 par) common stock. Underwriters—First Boston Corp., New York.„• Price .by Aug. :f, amendment. .Belling Proceeds—Go to Joseph Levy, — > • President, stockholders.^.Offering date indefinite. / ; common stock (par $1), Underwriters—Sabiston-Hughes, Ltd., Toronto. Offer,ing—Shares will be offered to the public at 75 cents a share. Proceeds—Net proceeds,, estimated at. $300,000, will be used for mining operations. • "*/ ; Dallas --4%% Class A preferred. Price—$100 Empire Mines^Corp.,tWalla!Walla, Wash. during 12 month period for .162,250 shares. Price • to; public, 10 cents a share. No underwriting. For road /building and ;mine development in/Canada/ ', !• 3 Cyprus Mines, Ltd., Montreal, Canada May 31 filed 500,000 shares of . a share. No-under¬ writing. For additional working capital and to cover in part the cost of erecting a new manufacturing plant. ■ Nov. U5n (letter of notification) 709,500 shares (1c par) »common and offer of recission of sales previously made/ Ero Manufacturing rCo., Chicago 5 filed 105,000 shares common stock' (par $1). Underwriter—Straus & Blcysser, Chicago. Price—$11.50 share. Proceeds Sept. 3 filed 500,000 shares ($5 par) capital stock. Under/ writing—There will' be no underwriting but Everett N. . Crosby, President and James Manoil, Treasurer, will act selling agents.:Price—$5 a share...Proceeds—For.re¬ financing of company and for. working capital and funds being sold by stock-/ / for development and construction program. / Sept. a .Grand Canyon-Boulder, Dam Tours/ Inc., Boulder City, Nev. !./; 4 • as Shares are Railway & Terminal Co. holders. Offering date indefinite. \ '' /1 " 40,000 shares ($25 par) 5% participating Griggs, CooperCo., St. Paul, Minn. preferred stock. Underwriters—Names to be supplied Falk Mercantile Co.,-Ltd;, Boise, Ida. / ', •S Sept. 3 (letter of notification) 12,000 shares (Sl^par) by amendment. Probable Underwriters—Kidder, Pea/Oct. 21 (letter of body & Co., Merrill Lynch, Pierce, Fenner & notification) 3,000 shares of 4%% pre¬ / common. Underwriters—Kalman & Co., Inc., St. Paul. Beane; Rauscher, Pierce & Co. Price by amendment. / Proceeds •' ferred ($100 par).4 Price—$100 a share. 4Underwriter— J Price—$25 a share. Proceeds — For improvement-and j Richard Meade —Proceeds will be applied to the Dunlevy Childs, Boise,; Idaho. Proceeds modernization program. Offering indefinitely postponed.. redemption of 3,843 to retire debentures and for -shares of 7% preferred stock and for expansion purposes. \ ■ purchase of new Grolier Society, Inc./New.York equipment and for construction as part of its modern¬ Nov. (Texas) — 27 filed < ,, . Farquhar ization and expansion program. Business—Railway, trol¬ ley and bus transportation. (A. B.) Co., York, Pa. Sept. 26 filed 30,000 shares ($25 par) cumulative'con- avertible preferred; 45,000 shares ($5 par) common; and Inc., Cicero,'III. 4 an unspecified number nf common shares to permit con62,000 shares ($25 par) 5% cumulative* version of the preferred. Underwriter—Stroud &' Co., convertible preferred stock and 71,950 shares (par $2) / Inc., Philadelphia. Price—By -amendment. - Proceeds — common stock 40,000 by company and 31,950 by certain! ..Proceeds will be used to redeem $355,350 4%>% sinking stockholders. Underwriters—Paul H. Davis & fund mortgage bonds, due Co., and Aug. 1, 1957, to pay ; off Shillinglaw, Bolger & Co., Chicago. Price by amend-' / certain contracts and chattel mortgages of $72,000 and ment. Proceeds—Company will use proceeds,> together $800,000 to reduce principal on outstanding bank loans. with a $1,000,000 bank loan, to purchase machinery, buildings and to retire bank indebtedness. Offering date /Films Inc., New York Danly Machine Specialties, July 26 filed ' • indefinite. ='- Delta Chenille Oct. - * , 2 filed 300,000 shares (200 par) - common. Under¬ writers—Names by amendment. Price, $8 a share. Pro¬ ceeds—Of total, company is selling 150,000 shares and remaining 150,000 shares are being sold by Apponaug Manufacturing Co., Inc. Principal stockholder estimated ■us • net proceeds to June 25, filed 100,000 shares ($5 par) class A stock and / Co., fnc.r Jackson, Miss. of $1,007,913 will be added .to general funds to be applied for corporate purpose. company 300,000 shares (10 cent par) common stock, of which 200,000 shares reserved for. con version-of class A, lilach share of shares of dell & class A common stock is stock. initially a Offering—To .) ?>.■' M be offered unit consisting of one share of class A one share of common stock. Proceeds—$201,000 for retirement of 2,010 shares ($100 par) preferred stock at $100 a share; remaining proceeds, together with ■ 4 2 stock and ?u; .1 into •,.f i Gulf Atlantic Transport'n Underwriters—Herrick, Wad- Co., Inc., New York. publicly at $8.10 convertible July 29 filed 18,500 shares at $4.25 cumulative, preferred ($100 par),' with non-detachable common stock purchase warrants entitling registered holders of shares of the: $4.25 preferred [to purchase rat-»^any time 64,750 shares of common stock at $16.a-share at the ratio of 3% common shares for each preferred share held; and 120,000 shares of :$l par common stock. Underwriters-^-H. M. Byllesby and Co., Inc. Offering—Underwriters t to purchase from the company 18,500 shares of preferred and 20,000 shares of common; and from Fred P. Murphy and J. C. Graham, Jr., 100,000 shares of issued and out¬ standing common. Prices, preferred $100 a share; com¬ mon $14 a share./ Proceeds—To retire $6 cumulative preferred, pay;? notes, discharge; a loan. Offering tem¬ porarily postponed. * stock . t ■ -t k Co., Jacksonville, Fla. 17 filed 270,000 shares of common!stock (par $1). Underwriters—Blair & Co. Offering—Stock is being of¬ Jan. Holders to waive preemptive rights. Offering date indefinite.; 5 . ; fered to present shareholders at $3 per share. of approximately 200,000 shares have agreed their ,i i i - -.4 ,(■ :t:hK I VH • pr- • ■. :•/ r •» , y \ • ,7 ' \ •. '* A * •' * i>. *> • •••?> « »•',»? ■* i **y. .-■? vi 3iK'. (Volume 164 i Number 4550 [THE COMMERCIAL' Halliday Stores Corp., New York (12/16) Dec. 9 (letter of-notification) 74,687 shares (50c v. granted. r Underwriter—E. Ydrk/Proceeds—Will F. /£ Kansas City Power share. a No under¬ 3115 May McEwen Kaiser Co., Burlington, N. C. Aug. 22 filed 175,418 shares ($1 par) common stock. Underwriters—Goldman, Sachs & Co., and Hemphill, Noyes & Co. Price—By amendment. Proceeds—Net pro¬ ceeds go to 11 shareholders who are selling the stock -being registered. Offering Light Co., Kansas City, .. Nov, 1 filed $36,000,000 of first mortgage bonds, due and 100,000 shares ($100 par) cumulative pre¬ ferred. Proceeds—Proceeds will be used to redeem $38000,000 of 3%%'bonds, due 1966 and 40,000 shares of first preferred stock, Series B. Issues Awarded—Bonds awarded pec. 11 to Halsey Stuart & Co., Inc. on bid of 100.889 for' a 2%% coupon. Bonds to be : reoffered at >1976; J Gillespie & Co., Inc., New - ' ':^y<;v: mZ/SS J" "■{ 1 Hammond Instrument Co., Chicago filed 80,000 shares "($1« par) common. -Under¬ writer: Payl H. Davies & Co., Chicago, Price by amend¬ ment. temporarily postponed. • « Metropolitan Paving Brick Co., Canton, Ohio Dec. 4 (letter of notification) Company plans to sell on the Cleveland Stock Exchange shares of common (par $4) in an amount and number equal to the aggre-: gate of fractional interest in shares represented by un¬ surrendered scrip certificates and share certificates for 101.43. Stock awarded to The First Boston Corp. Dec. 11 on bid of 100.91 per share for a dividend rate of 3.80%. To be offered at $102.70 per share. i Aug. 8 . & ;:f;V.;"Mo, (12/12-13)'.,. be used to purchase Benton Stores rC. ■ Inc. and its affiliates, share for each five held! Price—$10 writing. For expansion purposes. r , par) common, and an option for 25,000 shares of common on behalf of Robert Best and Samuel Schulman.. Price— $4. a share of common. The options will be granted to the underwriter on the basis of one option share for each three shares sold pursuant to the underwirting agreement. The underwriter has agreed to pay Best and Schulman 5 cents for each share on.which the option is y FINANCIAL CHRONICLE & f: ; . old common. Price at market. The company will pay customary brokers' commissions in connection with the sale. Proceeds will be paid pro rata to holders of scrip certificates and shares certificates for old common. .. Kingsport Press, Inc., New York Nov. 14 filed $1,200,000 4% sinking fund debentures, due Proceeds—Net proceeds will be used to redeem its outstanding 6% cumulative preferred stock at an estimated cost of 1961, and 55,000 shares $213,258, exclusive of accrued 1 divi¬ ($2.50 par) common. Underdends. -It also will use writer—Alex. Brown & Sons, Baltimore, Md. approximately $402,000 toward Price— the purchase of a v By amendment.. manufacturing plant in Chicago; bal¬ Proceeds—Company will receive proance for X, ceeds from sale of working capital. Offering date indefinite. debentures, and common stockholders • - • y; will • Harman "X (William H.) Corp., Phila. (12/17) receive proceeds from shares. $577,500 to redeem 5,500 shares of Company will 13 29 (letter of notification) 1,200 shares (no par) common, 50% on behalf of George A. Meyer Finance Co., St. Louis; and 50% on behalf of Robert L. Blanke, Jr. use 5% prior cumulative " preferred and $281,017 to fiied 300,000 shares of prepay note to Equitable capital stock. Under¬ writer—Smith, Barney & Co. Price by amendment. Pro- | Assurance Society of the United States. /. Nov. Meyer-Blanke Co., St. Louis, Mo. V. Nov. < and Marian $31 Life Blanke, both of University City, Mo. Price— share. Underwriter—Smith-Moore & Co., St. Louis. a ceeds—Will be applied to the / / / purchase and installation Michigan Gas & Elec. Co., Ashland, Wis. >vKiwago Gold Mines Ltd., Toronto, Canada ; machinery and equipment and to the June 24 filed carrying of in¬ X Dec. 3 filed $3,500,000 of series A first mortgage bonds, ventories and receivables. 1,000,000 shares (no par) common. Additional working capital Under- / due 1976; 14,000 shares ($100 par) cumulative preferred ■£ writer—Jack y: is -expected to be made Kahn, New York. Price—70 cents a available under a credit share, i stock and 120,000 shares ($10 par) common stock. Unagree- & the ment with the Chase National underwriting discount will amount to, 21 cents a Bank. •fi derwriters—To be determined share/ Proceeds—For by competitive bidding. exploration and development of Probable bidders include Blyth & Co., Inc.; Kidder, Peamining property-and for administrative expenses. body & Co.; The First Boston Corp.; Harris, Hall & Co. June 27 filed -Leader 100,000 shares ($1 par) 'Common stock. (Inc.); Merrill Lynch, Pierce, Fenner & Beane, and Ira Enterprises, Inc., New York Underwriters—Van Alstyne, Noel & Sept. 26 (letter of Haupt & Co. Offering—New preferred will be offered Co., New York, and notification) 150,000 shares of (100 / Johnston, Lemon & Co., on a share for share par) common Washington, D. C. and Offering— exchange basis to holders of Its 57,000 shares ($5 par) 6% cumulative To be offered to the public at $8 a share. convertible outstanding 7% prior lien, $6 no-par prior lien, 6% Proceeds— preferred, Series A. Price—10 cents a comCompany is selling 60,000 shares and preferred and $6 (no par) preferred. stockholders are ; mon share and $5 a" preferred share. Of the common Underwriter— selling 40,000 shares. The stock being registered, company will use its proceeds * 1 Gearhart & Co., Inc., New York. company is selling 40,000 shares, to pay the costs of Proceeds—To replace Middle West is selling 57,226 shares and opening additional stores and to ex¬ ; working capital used to Halsey, Stuart promote new publication called pand merchandise in its 1 & Co. Inc., New York, is Fashion Trades / and to provide existing stores* Offeringvtemselling 22,774 shares. Proceeds additional working porarily postponed. ; * ' < —Michigan will use net proceeds from bonds to redeem capital. Offering date indefinite. $3,500,000 3%% series A first mortgage bonds, due of • - ' HartfieldStores,lnc.,LosAngeles . j . .... . ... •; Helene Curtis lndustries, Inc., Chicago Lynchburg (Va.) - Dec.: 5 filed 60,000 shares ($5 par)V50-cent cumulative convertible preferred, Series A, and 120,000 shares ($1 par) common, reserved for conversion of preferred. Underwriter—Simons, Linburn & Co. share. - common. ^ ; * redeem will be sold by one ot more of the following firms: Buckley Bros.; Durand & Co^ Tucson; Ariz^ J.{Earle May & Co., :Palo Alto,' Calif. ' j City notification) 54,350 shares of 5 - than 98 Va per unit. Underwriter—Boettcher and Co., Denver, and Hutchinson & Co., Pueblo, Colo. For retirement of debt and for working capital. more • Underwriter—Unsubscribed shares pro¬ $5 Manning, Maxwell Nov. be added to treasury funds. Company has asked the SEC to defer action on its fi¬ nancing program: becatise of present market Conditions^ International Dress Co., lnc., New , / by Aug. 28 filed 140,000 shares of common stock (par $1) V Underwriter—Otis & Co. Offering—Price $10 per share. , y / of proceeds. ; / -ii k , /v . Jewish World underwriting. working capital. - For $12.50 par common. Kable Nov. 6 (letter of notification) common. Morris, lll,/.'...}-v 20,907 shares ($10 par) To be offered to stockholders in ratio of one 1 ./' v . V-" cumulative preferred. Price—$105 For additional capital. on construction Business—Operation of race yv track. share. No ; underwriting. To carry on business factory representative and dealer. Moreno-Cripple Creek Corp., .Denver amendment. Proceeds—Proceeds, estimated at $438,770, will be used for current property payments/ exploration ; of mining properties and for working capital. • Mountain June 6 filed a , share. ,, No ' States Power Co. 140,614 shares of common stock (no par). Underwriters—To be determined by competitive bidding. Probable bidders include Blyth & Co., Inc.; Kuhn, Loeb Barney & Co. (jointly); Harriman, Ripley & Co.; The First Boston Corp. Offering—Shares, are owned by Standard Gas & Electric Co. and con¬ & Co. stitute Maryland Credit Finance Corp., Easton, Md. /Dec. 6 (letter of notification) 1,370 shares ($100 par) underwriting. due u notes will be sold at face amount and purchasers of each $1,000 note also will receive warrants for purchase of 140 shares of common and purchasers each $500 note will receive warrants for purchase of 70 shares of common. ; Other warrants for purchase of 8,500 shares of common : will be sold at five cents a warrant. 6% balance Nov. 27 filed 7,399,500 shares (10c par) common. Underwriter—Company is negotiating with James T. Chiles, /'Denver, who will act as their selling agent/ Price by e ■ A of the corporation as (letter of notification) $75,000 5% convertible notes (par $1,000), $25,000 5% convertible notes (par $500) and 22,500 warrants for purchase of common. The L Brothers Co., Mount tors. common Markley'Corp., Merlden, Conn. facilities. ■ • (letter of • notification) 250 shares ($100 par) 6% cumulative preferred and 100,000 shares (500 par) common. Price—$100 a preferred share and 50 cents a (1/6-47) Publishing Co., Inc., New York k Underwriter—Amos V Treat & Co., New York. For Dec. 5 (letter of notification) 8,000 shares payment of certain current ($25 par) 4% ! indebtedness, purchase equipment and improve plant Price—$25 a share. No Preferred. Corp.. by distribution of 14,636 shares of the preferred to F. H. McGraw & Co. and subcontrac- Monroe Sales Corp., Philadelphia Dec. .5 Intra-Video Corporation of America, New York : Z Dec. 3 (letter of notification) 149,000 shares of common. •; Price—$2 a share. No underwriting. For working capi¬ tal :and expenses.. •j Moore, Inc. 160,000, shares Monmouth Nov; 27 Underwriter—Hornblower & Weeks, New York. Price by amendment. Proceeds—Proceeds will be used to repay $1,000,000 in bank J loans With the balance going • • ■ filed common work will be paid new into general funds. York receive 27 '& stockholders the right to purchase 387,500 addishares at $4 each in the ratio of 1V4 shares for each share held. Price—$4 a share. Proceeds —Part of the funds will be used to redeem 25,200 shares of $50 par 4% non-cumulative convertible preferred held tional . share.. Proceeds—For investment. a re¬ demption of 5% cumulative convertible preferred stock not ' converted into common prior to the redemption date. The a common i >'■ and additional shares total of 315,000 will be purchased by the Monmouth Corp., formed last May to finance construction of the racing plant. Offering—Company/will offer present , , applied for to r - will be / Monmouth Park Jockey Club, Oceanport, N. J. Dec. 5 filed 16,000 shares ($50 par) 5% cumulative conl vertible preferred and 633,500 shares (lc par) common. ; ^ ■ (letter of notification) $95,000 4% first closed mortgage sinking fund bo ids, due 1960. < Price—Not ■ • . '-%X;iPviP'PPv/ 1::X'V'.v//:</./•. - cum. . Proceeds—Selling stockholder# will Offering date indefinite. unexchanged Oct. 23 con v. Maine.Public Service Co., Preque preferred and 50,000 common stock Isle, Me. purchase warrants. f June 25 filed 150,000 shares ($10 par) Price—$5.50 a preferred share and 2 cents a capital stock. warrant. / Underwriters—To be determined Underwriter—Amos Treat* & Co., New York.- To through competitive exer¬ / bidding. cise options for Probable bidders include The First purchase of five variety Boston stores,: to retire c notes and for-working Corp.; Kidder, Peabody & Co., and capital, " \ Blyth & Co., Inc. ; (jointly); Harriman Ripley & Co; Coffin & Burr and / Merrill Illinois Power Lynch, Pierce, Fenner & Beane. Proceeds—The Co.,-Decatur, III. Bhares are being sold June 17, filed 200,000 shares by Consolidated Electric and Gas ($50 par) cumulative pre¬ ferred stock and 966,870 Co., parent of Maine Public shares (no par) common stock. Service, in compliance with geographic integration provisions of the Public Underwriters—By competitive bidding. Probable bidUtility ders include Blyth & I Holding Company Act. Co., Inc./and Mellon Securities Corp. (jointly) and Morgan Stanley & Co. and W. E., Managed Funds lnc., St. Louis, Mo. Hutton & Co. (jointly). Proceeds—Net proceeds from the Dec. 3 filed 2,300,000 shares safe of preferred will be used to reimburse the com¬ (lct par) capital stock. ; Underwriter-t-Slayton and Co., Inc!, St. Louis. pany's treasury for construction expenditures. Price— Net . all Middlekamp Building Corp., Pueblo, Colo. ' ; dividends of no par common. the basis of 250 shares for every 1,000 shares sold for Prices—$1,000 av preferred share and $1,750 a debenture.: the company. Price—60 cents a share. The underwriters Four shares of common will be issued to each purchaser of one i. will receive a discount on the share of preferred and 1,000,000 shares of 15 cents one debenture. The each. Proceeds—For exploration and mine securities will be sold by development Mackay as the underwriter. For organization and work. operation of fac¬ • tory/to prefabricate, sell and erect residential structures. (Henry) & Co., Inc., New York June 28,1946 filed 20,000 shares of 4^% ($25 par) cumu¬ lative ^convertible preferred stock - and 33,884 shares ($1 par) common stock. Underwriters—Otis & Co.,-Cleve¬ Mada Yellowknife Gold land, Ohio. /Offering—Company is Mines, Ltd., Toronto ^ selling the preferred June 7 filed .250,000 shares of shares and stockholders are capital stock (par 40c). selling the common shares. ^ Underwriters — Names to be Price—$25 a share of preferred. Price for the common supplied by amendment J Offering—Stock will be offered publicly in the U. S. by amendment. Proceeds—Net proceeds will be added • at 40c a share (Canadian to general funds. Offering date indefinite. / money). /estimated at $75,000, will; be used Proceeds—Proceeds, in operation of the •. H y-G rade Supply Co., Oklahoma company. * will accrued » -/ : balance and . \ Holt common 105 . capital. Price, $3 a share. No underwriting contract, how¬ ever, 55,000 shares to be issued to or through H. R. O'Neil ceeds from the sale of at — - Hollywood Colorfilm Corp., Burbank, Calif, notification) 119,500 shares of ($1 par) Dec. 3 (leter of com- preferred not issued in ex¬ change will be used to redeem $375,000 3^% serial debentures, due 1951, at 101.2 and interest. It also will new , Oct 16 (letter of of/Buckley Bros., Los Angeles, Net proceeds from sale of / shares of prior lien and preferred stocks. ; Macco Corp., Clearwater, Calif. Midas Yellowknlfe Gold Mines V Sept. 25 filed Ltd., Toronto, 100,000 shares ($1 par) capital stock. Canada Underwriter Dean Witter & Co., Los Angeles/ Price— ! Oct. 21 filed 1,250,000 shares / By amendment. Proceeds ($1 par) common. UnderTo pay; off outstanding ->■ bank loans.' writer—R. J. Hale, East ' ' s Aurora, N. Y. Offering—Of the total company is selling $1,000,000 shares and the reO Mackay (Roy Hugh), San Francisco r p maining 250,000 shares are being sold for the account of Dec. 3 (letter of the principal underwriter, brokers and dealers, which notification) 100 shares of $1,000 par iX shares they will receive as additional preferred; 100 debentures of $1,750 each and compensation on 1,000 shares employees public at $10 a general corporate Proceeds—To. be added to Business—Beauty supplies. 1972, at 106.75 and interest. / mon and from shares of notification) 5,000 shares ($10 par) Price—$10 a share. :No underwriting. " For conversion of company's facilities from manufactured to natural gas. Offering—Com¬ pany will offer 40,000 shares of preferred to at $9.50 a share and 20,000 shares to the funds. Nov. 2d (letter ofv Gas Co. and Smith 56.39% of the company's outstanding common. Sale Postponed—Standard Gas & Electric Co. asked for bids for the purchase of the stock on sale has been temporarily postponed. (Continued on page Sept. 4, but the 3116) t < 1. Vw ; < Murphy (G. C.) and the remaining -14,000 arC being sold by Corp: -Price—By amendment- Of-" indefinitely postponed.^,, ^ „ ; company (Continued from-page 3115) - L_ «iT- _• Thursday, December 12, 1946 COMMERCIAL & FINANCIAL CHRONICLE THE 3116 General Telephone fering Co., McKeesport, Pa. of common stock (par $1). / Underwriter—Smith, Barney & Co. ;. Price by amend¬ ment, Proceeds—Redemption of outstanding 4%% pre- : ferred stock at $109 a share plus dividends. Indefinitely June 13 filed 250,000 shares Ohrbach's Inc., New York (12/17) ; •v < 40,000 shares ($50 par) cumulative pre¬ ferred stock series A. Underwriter—A* G. Becker & Co., Inc., New York. Price by amendment. Proceeds—Com¬ ^' Vii\ 7'7;/;^/-77Z/;4/tk/l,^;,/; pany will receive proceeds from the sale of 5,000 shares and five stockholders will receive proceeds from the Aluminate Corp., Chicago ; -/ift sale of the remaining 35,000 shares. The company will postponed. National Nov. 27 filed unspecified number ($2.50 par) com¬ apply its proceeds to general funds. ; V , ; ; mon shares. Underwriters—First Boston Corp., New York, : Old Town Ribbon & Carbon Co. Inc. (12/23-31) and Lee Higginson Corp., Chicago. Price—By amend- /? ment. Proceeds—The stock is issued and outstanding and - Sept. 19 filed 140,900 shares ($5 par) common. The is being sold by shareholders. Names of the sellings shares are being sold by three stockholders. Underwriter —The First Boston Corp., New York. Price—By amend¬ stockholders and the number of shares to be sold by each ment. v ' '< • will be supplied by amendment."_■' • ••, ,.v i.\' /' '■* Precision Parts Co. of Ann eral funds. Offering Sept. 27 filed an ■ Newburgh Steel Co., Inc., Detroit - Nov. filed 13 Exploration Ltd., Montreal shares (500 par) capital stock. 100,000 Soden, B. Underwriter—Robert convertible Aug. 2 filed 30,000 shares of 6% cumulative preferred (par $10), and 30,000 common shares ($1 par).Underwriters—Names by amendment. Offering—Shares are issued and outstanding and: are v being sold , by :/ / Maurice Cohen and -4 Samuel Friedman, President ; and Secretary-Treasurer, respectively, each selling 15,000 snares of preferred and 15,000 shares of common. Price —$10 a share for the preferred and $6 a share for the f common. '■:/" » ' ' , ' * Z.7 ' Offering—Price $4.75 a share. Association England Gas and Electric New July 11 filed $22,500,000 20-year collateral trust sinking fund Series A bonds, and a maximum of 1,568,980 com¬ mon shares Bidders may ($5 par). Underwriters—By amendment. include Halsey,. Stuart & Co. Inc. (bonds Proceeds—Of the total Light Co., Portland, Ore. share./Proceeds—For explora¬ (D. M.) Z / Co., Bridgeport, Conn. (12/16)} (by amendment) filed 50,000 shares of common stock (par 250) and stock purchase warrants. ; Underwriters—Warren W. York & Co., Inc., Allentown, Pa., and Richard J. Buck & Co., New York.; Price—$5.75 per unit of one common share and one warrant. Proceeds— is selling 37,500 shares and stockholders are selling 87,500 shares. The company will use its proceeds for equipment and working capital. V • 7 7'. 7 Pacific Power & Read - of Nov. 27 company ( • 7 Montreal, director development of mining property. tion and Cuba July 22 filed 125,000 shares ($1 par) common and 40,000 warrants. Underwriter—Floyd D. Cerf Co., Inc., Chicago. ; Price—500 a company. ■ Orange-Crush de Cuba, S. A., Havana, ■ . - J /; * temporarily postponed. Quebec Gold Rocks . • Arbor, Mich. 775,000 shares 5% cumulative convertible 7 preferred stock ($10 par). Underwriter—Van Alstyne, 7 Noel & Co. and associates. Price by amendment. > Pre- V. ceeds—Of the net proceeds, $250,000 will be used to pay 3% notes held by National Bank of Detroit, $75,000 to ' reimburse treasury for sums spent in acquisition of the' / electrical division plant of the company, $30,000 for con¬ struction of space for executive offices in the economy r baler plant, and the. balance will be deposited with gen- / filed 5 Net proceeds will be used to pay Realmont July 10 filed 100,000 shares ($100 par) preferred stock. Underwriters—By amendment. Probable bidders include Blyth & Co., Inc., White, Weld & Co. and Smith, Barney & (jointly); The First Boston Corp., W. C. Langley & Co.; Harriman Ripley & Co. Offering—Company proposes to issue the 100,000 shares of new preferred for the pur¬ : pose of refinancing at a lower dividend rate the 67,009 outstanding preferred shares of Pacific and the 47,806 Co. Nov. 20 filed .. » 7 It7 / // off a loan. Red Lake Gold Mines, Ltd., Toronto, . 7Z/7/////Z-/7;-://7 Canada .:--':/7; ' 800,000 shares of common stock ($1 par). to public. Company has 7 underwriting contract. Proceeds— 7; Development of mining properties and exploration work/ / Offering Price—$0.60 a share not entered into any Red Owl Stores, Inc., Minneapolis (12/18) 15,000 shares ($100 par) cumulative convertible preferred and 50,000 shares ($3 par) common. Underwriters—Piper, Jaffray & Hopwood and J. M. Dair* Nov. 29 filed : 7/ (stock only), First Boston 7 Corp., Wnne, Weld&Co.-Kidder, Peabody & Co. (jointly), 7 preferred shares of Northern Electric Co., in connection & Co., Minneapolis. Price by amendment. Proceeds— ^Offering—Bonds and common stock are being offered in 7 with the proposed merger of Northwestern into Pacific. In connection with the merger, the outstanding preferred Company expects to use $800,000 of the proceeds for connection with a compromise recapitalization plan reduction of its bank loans. Of the remaining proceeds/ J approved by the SEC, on June 24, 1946, which among : stocks of Pacific and Northwestern will be exchanged it will use $500,000 for equipment of its general office / share for share, with cash adjustments, for the new pre¬ other things provides for the elimination of all out¬ and warehouse being constructed at Hopkins, Minn./ ferred stock of Pacific, the surviving corporation. Offer¬ standing debentures and preferred and common stocks, 7 v;-;:/7' $300,000 for equipment of warehouses at Green , Bay, and for the issuance of $22,500,000 of bonds and 2,300,000 y ing price—To be supplied by amendment. Wis., and Fargo, N. D., which it expects to construct in f of new common shares. Bids for the purchase of the Pal Blade Co., Inc., New York the future. Any balance will be used in its moderniza-; bonds and the common stock which were to be received ; June 28, 1946 filed 227,500 shares ($1 par) capital stock. tion and the expansion program. ; * : ) by the company Aug. 13 were withdrawn Aug. 12. Inc. Offering — An alternate plan filed Nov. 25 with the SEC provides sZ Underwriters — F. Eberstadt & Co., Reliance Varnish Co., Louisville, Ky. 225,000 shares are outstanding and are being sold by 10 for the issue of 77,625 convertible preferred shares (par ? $100) and 1,246,011 common shares (par $8). Under the > stockholders, and 2,500 shares are being sold by A. L. Nov. 20 filed 60,000 shares of common stock ($2.50 par).v ? Marlman to all salaried employees. Indefinitely post¬ Offering Price—$10 a share. Underwriter—Bankers f proposed plan consolidated funded debt would be prac¬ poned. j7"/;; T - :■/; . -7';?'■ v;.;'/;7;', '/:. 4 '/'" 7/: Bond Co., and Almstedt Bros., both of Louisville, and < tically unchanged from that provided in original plan, the Association to issue $22,425,000 coll. trust bonds. 7 Cruttenden & Co., Chicago. Of the total of 60,000 shares,)% Palmetto Fibre Corp., Washington, D. C. 7J/ the company is selling 40,000 and seven stockholders are// These bonds and preferred stock may be sold, subject (100 par) preference to an exchange offer, to the holders of present deben- - August 16 filed 4,000,000 shares disposing of the remaining 20,000. Proceeds—Company v tures on a par for par basis. Present preferred would 7 stock/ Underwriting—Tellier & Co., New York. Price will use its proceeds, together with $500,000 bank loan/ 50 cents a share. Proceeds—The company will use esti¬ receive for each share held 8 shares of new common with to finance paints and varnish plant now under construe-* / tion. rights to subscribe to 5 new common shares at $9 per - mated net proceeds of $1,473,000 for purchase of a new share. The present plan does not affect < the status of 7 factory near Punta Gorda, Florida, at a cost of about • i Repeter Products, Inc., Long Island City original plan, but determination as to which will be used * $951,928. It will set aside $150,000 for research and de¬ will be left to the SEC and the court. Hearings on the y velopment purposes and the balance will be used as Dec. 3 (letter of notification) 25,000 shares of common' Alternate plan are scheduled by the SEC for Dec. 19. . *: operating capital. ■ 7';'7; '7//:;7-; • 7 •;77 ;/77 7^'v;'77 stock, (par $1), 15,000 shares of which represent treasury 7 stock originally issued to Robert E. Peterson for tangi- V • 7 Pan American Investment Fund, Inc., Los New York State Electric & Gas Corp., Ithaca bles and now donated back as an absolute gift. Two ; v: Angeles, Calif. ;;7;7//:;';■ v.7 ;7-"';'7v:77o/''77;j;/7 shares of treasury stock will be distributed as a bonus vU/ N- YDec. 9 filed 26,226 shares ($1 par) capital stock. Under¬ Oct 30 filed $13,000,000 first mortgage bonds, due 1976, y for every 2 shares of unissued 10,000 shares now offered 7 writer—None. Price—Based on market price. Proceeds and 150,000 shares of ($100 par)-cumulative preferred. at $2.40 per share. The remaining 5,000 shares of treasury 7; —For investment. Business—Investment business. f. 77/ Underwriters—To be determined by competitive, bidding/;; stock will be reissued as additional compensation to the > Probable bidders include Blyth & Co. and Smith, Barney ' Peninsular Oil Corp., Ltd., Montreal, Canada / underwriter. The underwriter will sell the 5,000 shares , & Co. (jointly); First Beaton Corp. and Glore, Forgan & of stock as they are reissued in 4 share units at $2.40 A Sept. 3 filed 600,000 shares of common (par $1). Under¬ Co.jjointly)!,and Halsey, Stuart & Co. Inc. (bonds only)/ / writer—Sabiston Hughes, Ltd., Toronto, Canada. Price— per unit. Underwriter—Clokey & Miller, New York. ; Proceeds—Estimated proceeds of $28,000,000; together ? Proceeds for development, etc. /. • • . * * • 60 cents a share. Proceeds—Net proceeds will be used to with a $6,000,000 contribution from NY PA NJ Utilities y purchase drilling machinery and other equipment. Co., parent, will be used for redemption of $13,000,000 / Republic Aviation Corp., Farmingdale, N. Y« / 777) of 3%% bonds, due 1964, and 120,000 shares ($100 par) | • Peruvian International Airways, Lima, Peru ^7 Oct. 9 filed 100,000 shares ($50 par) convertible pre- 7 ■777; 5-10% cumulative serial preferred and to finance new;/ Dec. 5 filed 477,122 shares ($7 par) 50-cent convertible ferred stock. Underwriters—Hayden, Stone & Co., and ; constructions. ~ cI preferred and 238,561 shares ($1 par) common. Under¬ Kidder, Peabody & Co. Price—By amendment. Pro¬ .: i ceeds—Proceeds, together with bank loans, will be used / writer—None stated. Offering—Shares will be offered Northern Engraving & Mfg. Co., La Crosse, Wis. to increase working capital. Such funds are deemed >; publicly in units of two shares of convertible preferred necessary in view of the additional facilities that com-;1 Aug 29 filed 70,000 shares ($2 par) common stock. and one share of common at $15 a unit. The company Underwriter—Cruttenden & Co. Offering—All shares pany intends to acquire and its large backlog of peace¬ also may offer the shares other than by unit at a price time business. Reported Dec. 4 company negotiating bank are issued and outstanding and being sold for the account ,y of $7 a preferred share and $1 a common share. Proceeds loans in lieu of public financing. of present holders., Price—$16 a sharel . Proceeds—To 7 —To increase capital for expansion of proposed air selling stockholders. Indefinitely postponed. ; route connecting Peru and Montreal, Can. Business— Republic Pictures Corp., New York Air transportation. J 77/77''77; /'•/'/;7 7 7 /"/7- '7 ; 7. 7/7 Northern Indiana Public Service Co. , y/j Registration originally filed July 31 covered 184,821 Pharis Tire & Rubber Co., Newark, O. shares of $1 cumulative convertible preferred ($10 par) Aug. 28 filed maximum of 384,016 shares of common stock. Underwriters by amendment as shares will be and 277,231 shares (50c par) common stock, with Sterling, Sept. 27 filed 100,000 shares ($20 par) cumulative con¬ vertible preferred. Underwriter—Van Alstyne, Noel & Grace & Co/as underwriters. Company has decided to offered under competitive bidding. Probable bidders in¬ Co. and G. L. Ohrstrom & Co., New York. Price—$20 a clude Blyth & Co., Inc.; The First Boston Corp.; Stone issue 454,465 shares of common stock only, which will be share. Proceeds—For payment of loans and to replace & Webster Securities Corp., and Harriman Ripley7& offered for subscription to stockholders of record Sept, 5 to the extent of one share for each five held. Issue will Co., Inc. (jointly). Of the shares registered, 182,667 are - working capital expended in purchase of building from being sold by Midland Realization Co.; 54,426 by Mid- i- RFC and to complete construction of a building. !/;// not be underwritten. J land Utilities Co., and 146,923 by Middle West Corp. . /f" Rowe Corp., New York / Plastic Molded Arts, Inc., New York Nugent's National Stores, Inc., New York ^ 7;/z 7 Aug. 27 filed 60,000 shares of preferred stock ($10 par) July 29 filed 100,000 shares common stock. Underwriters v and 75,000 shares of common (par 50c). June 21 filed 85,000 shares ($1 par) common stock. Underwriter— —Hayden, Stone & Co. Offering—The selling stockhold¬ Underwriters—Newburger & Hano, and Kobbe, Gearhart Herrick, Waddell & Co., Inc. Offering—Company is ers, who include Robert Z. Greene, President, are offer; Jk Co., Inc. Price, $6.75 a share. Proceeds—Net pro¬ offering the preferred stock to the public, while the ing the shares to the public through the underwriters, ceeds to the company from 62,000 shares, estimated at common is being sold by certain stockholders. Pricesonly), Bear, Stearns & Co. . t . ! vi - * . $350,200, will be applied as retirement of follows: About $111,300 for stock; $41,649 to Preferred, $10 outstanding preferred a Proceeds— will be used to purchase share; common, $4 a share. Proceeds from sale of preferred of two affiliates, and bal- j equipment, pay bank loans, and other corporate purposes. ance $197,000 for other corporate purposes. The pro¬ Portis Style Industries, Inc. (12 16) ceeds from the other 3,000 shares will go to selling Sept. 27 filed 110,000 shares ($1 par) common. Under¬ stockholders. Offering temporarily postponed. writers—Brailsford & Co., and Shillinglaw, Bolger & Co., Ohio Associated Telephone Co. Chicago. Offering—Of the total 100,000 shares will be of¬ fered to the public and 10,000 to employees of the com¬ Sept. 11 filed 35,000 shares (no par) $2 cumulative pre¬ purchase 100% of the stock ferred. Underwriters—Paine, Webber, Jackson & and Stone & Webster Of the shares registered, 21,000 are being sold by t ■ " " ■■■• Curtis 7 :. • ?r ( ( * 7 i v n i i m i ' pany. ,r Price—Price to public $6.50 a share. ployees $5,525 a share. Offering— Securities, New York. by four stockholders. the Price to em¬ Proceeds—Shares are being sold f.7 ,-\.77: for their own date • Price, by amendment. v';7:;7'7>■; 7i;;7.;:;;: : /v.,7, account. indefinite /Santa Cruz (Calif.) Sky Park Offering Airport, Inc. //j// notification) 53,000 shares ($1 par) common. Of the total 31,000 shares will be offered pub¬ licly at $1 a share, 16,000 shares will be transferred to Alex. Wilson and Wayne Voigts for their interest in Santa Cruz Flying Service, which is a flying field and airport, and 6,000 shares would be issued in cancellation ^ of partnership indebtedness. No underwriting. For operation of airport business. Dec. 6 (letter of > , L iVplume 164 Number 4550 THE COMMERCIAL & FINANCIAL CHRONICLE *aat 7rUp .Texas Corp., Houston, Texas V;],-. Oct. 28 filed 71,141, shares (45c par) and 35,441 shares (45c par) Class B writing—The. stockholders r underwriters are who Class A V. /'. / Swerrt '& Co., common Aug. 28 filed 195,000 shales common/" Under¬ also are the, selling holders Inc., Dallas, Tex. Price by amendment. *^ r //*- /,•;"'/■' Shatterproof Glass Corp., Detroit, Mich. ////•'/•/ Oct. 28 filed 280,000 shares J$1 par) common./, Under-' • writing—None. To be'&oTd through brokers on over-. the-counter market. Offering—The shares are issued, and outstandihg and are being sold by William B. Chase, President, and members of his family or trusts created, by Chase or his wife. Price—At market. *■< ' * ; ■' ,u ' < • ■ Silver Bell Mines * , Airways, Inc., San Antonio, Texas ///:'/ Dec. 9 filed 500,000 shares ($10 par) common and options to purchase 175,813 shares of common. Underwriting— ' Offering—The common shares are to be The options for purchase of the 175,813 sharesof common are to be offered to original subscribers of,< the company's stock. It also will issue options to em-5 ployees for purchase of 69,875 shares of common. Price— $10 a share.'«Proceeds—For purchase of equipment and for working capital. Business—Air freight .transporter./ 1% / Solar applied to , working ./ ., capital .•./>/• :- Vandervort International Co. Ltd., Buenos Aires, Argentine •':./.// \ stockholders at (G. W.) • Syco Michigan Detroit. / of , (letter'of notification) 12,000 shares ($25 par) 5% convertible cumulative preferred. Price—$25 a share. No underwriting. To retire 7% preferred and to equip foundry." > *■ • , will the be offered rate of one for * ; sub¬ share / for •/'' Victory Gold ■ • Manufacturing Corp., Syracuse, N. Dec. 6 (letter of /'/ Y. Mines Ltd., notification) ■,300 common. Wentink Sydney County Council, New South.Wales, Australia (12/30) •' ■/:•'//'/ "///•;• ;• Dec. Nov. • an 6% unspecified amount Industries, Inc., 13 (letter of notification) cumulative preferred and . / Such pro¬ also will be used /for additional manufacturing / /the extension of its facilities supplying facilities in the amount of electricity to the $600,000; for additional inven¬ City of Sydney/ The electric properties of the Municipal tory amounting to $400,000, and for additional Council were assumed working by the Sydney County Council capital. Offering temporarily postponed. in January, 1936. | writer Grand Rapids, Mich. 25,000 shares ($10 par) 35,000 shares (no par) Auchincloss, Parker P* C. Price—$7 Under^ & a Redpath, capital. con- • held unsubscribed shares will be sold to underwriters at same Price — Public offering price of unsubscribed •price; ' * * „ ; .< Tele-Tone Radio Corp., New York Aug. 1 filed 210,000 shares T : 4» / Stage Publications, Inc., New York (12/18) Dec. 10 (letter of notification) 5,000 shares of 4%% pre-/ $50) and 20,000 shares of common -.stock (par $10c). Price per unit of one preferred share ;and two common shares, $50.20. Proceeds—Expenses in¬ volved in preparing "Stage" a magazine to be devoted to the theatre for publication and for other expenses of ferred stock (par publishing. ' . v Stanley (C. V.) Furniture Co., Inc., Magee, ^' 18,000 common owned by them. garten & Co., for $1,500, toward the expenses of / additional 18,000 shares They plus are also $360 outstanding selling to Hall- / as a contribution issuahce,,