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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.

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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

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Sherman Ellsworth!,
Co'„ Portland, Qr-eg,

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3038

Thursday, December 12; 1940 A
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.

^•'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. •
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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:

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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

.

.

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.

'

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*• *

" 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[

■

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'

Initiates.
•'

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,

,

•

!vplume

.

164

Number 4550

THE COMMERCIAL & FINANCIAL CHRONICLE

:

.

\

3041

INVESTMENT BANKERS ASSOCIATION
AMfPIfA ";

■r••

V

••

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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.:,,.

—

•

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,

3043

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....

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''

-

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*

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#*

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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*

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-

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vl'i

k

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n

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Cities

s/

1

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y':* 1--".

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V

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"!'/

§ 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
%
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'';dV.::v.-

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Investment Bankers
s«
%

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BALTIMORE 3,

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*

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

-

?' *'

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>>

I

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t

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\[ *£''«

0

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,

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A,

v <

t

'

„

-

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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 *»;

/-

,

"

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„

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LEEDY, WHEELER 6- CO.

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FLORIDA BANK BUILDING

.

ORLANDO, FLORIDA

A. M. LAW & COMPANY
(Established

BELL TELETYPE-OR 10

.

••

,

-

;

.

LONG DISTANCE 27

-

1892)

SPARTANBURG, S. C.
1
f

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Long Distance 51

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£'s?,7 •/;

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Bell Teletype SPBG 17

UNDERWRITERS
1

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Securities
11

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Georgia South Carolina
i

DEALERS

DISTRIBUTORS

uf-

^':r

Corporate and Municipal

52 YEARS IN THE SOUTH
*

1

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xa

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,

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Tennessee, North Carolina,

;

:

.

;;

;;

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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",

*

'

'

;

*

»•"/ '

.

*

^

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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

,>
,

>'

'

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'

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-

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UTILITIES

Straiialian,Harris & (ompany

*.-<
\

a

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,

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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

—

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to:

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■

'•••

,

•■"

...

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

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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

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itsj

simplest terms,
and

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our

still

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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

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a

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years

ago

Dealers and Brokers

Mc Donald - Moore & Co.

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econ¬

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*.:•/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
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Stocks

Bonds

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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

•

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James W. Marshall

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William D. Kerr

shift

Augustus Knight

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as

year, or

246 S. County Road

was

1

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Breakers Hotel

MIAMI BEACH

FT. LAUDERDALE

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invite

connection is not
you

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National Underwriters

Your orders will be

Established

1916

Members principal Stock Exchangee
10 South La Salle




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Paul H .Davis & (kx

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mitted by wire to your broker on a "give up" basis.

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Street, Chicago

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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

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unfrozen.

are

Nashville Securities Co.

Hill, Richards & Co.
Watting, Lerchen & Co.

Detroit

J. J. B. Hilliard & Son

Louisville

C. Ed gar Honnold

Oklahoma

Los

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Direct Private Wires Coast to Coast

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DETROIT

Drexel & Co.

Evening News

Buffalo

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New York

Scott, Horner & Mason /'*
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Lynchburg

Chemical Bank & Trust Co.

New York

KANSAS

CITY

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St. Louis

Calvin Bullock

Chicago

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New York

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John Nuveen & Co..

Chicago

A. Webster

Philadelphia

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Chas. W. Scranton & Co.

New Haven

Ball, Burge & Kraus
Lord, Abbett & Co.
Wagenseller & Durst
Glover & MacGregor
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Cleveland

Industrial

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Chicago
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Chicago

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William R. Staats Co.

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Johnson

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The

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Pittsburgh

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hold idle

funds, from month to month, in

INCORPORATED

anticipation of a minor change in
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diate securities would be subject
to

-

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City
Philadelphia

refunding purposes just as it does
now.
Banks and other investors
would hardly prefer to

(ASSOCIATE)

Charlottesville

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Treasury would still be able to
sell its short-term securities for

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EXCHANGE
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135 SOUTH LA SALLE STREET

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,

■;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

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tf»

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.

OF SEATTLE

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Teletype SE 2 6t

Telephone Elliott 1505

.

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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

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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
>'■

.

\

>:

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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.,

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PHONE PL. 3932

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CENTRAL

STATES

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Collier, Norris & Quinlan
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members

MONTREAL

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STOCK

MONTREAL

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EXCHANGE

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MARKET

Alfred S. Wiltberger

Aldred

Collier, Norriss

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LIMITED
members

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The

Investment

Ewing

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Building, Montreal

Dealers

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SiliSIKil

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Securities

Invited

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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

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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>.

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•

•••?>

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■*

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.-■?

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,,