Full text of Commercial and Financial Chronicle : December 14, 1950, Vol. 172, No. 4968

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INVESTMENT BANKERS ASSOCIATION CONVENTION ISSUE

New

Number 4968

'Volume 172

EDITORIAL

We See It
officials

Washington

speak

and

gravely about a national "emergency." They are
far from satisfied with the degree in

Boston attorney

outgivings from Olympus. Steps have been taken
and are being: taken to try to do by fiat much
that should be accomplished, if it must be ac¬

in interest rate return
in value

are

hear

"controls," "allocations,"
the rest that goes

But

with

it is also that

and

and all

"restrictions,"

all-out

observe

mark

wincing and relenting and refraining

and

certain other interferences with the natural flow
of forces.

Thus

find the "friends" of the vet¬

willing enough to

erans

system of "benefits," which

have long been

stench

decent

the

fair-minded

system.

nostrils

all

but

veterans,

even

lived

elements

the

accruing to

population

called

Victorian

era.

one

seems

Mayo A. Shattuck

to when that good Queen-

*An

address

Investment

Nov.

30,

Mr. Shattuck

Bankers

at the
Association of

page

ensu¬

39th Anual Convention of
America, Hollywood, Fla.,

tage of Coffin and Burr, Inc., Boston.
Vice-Presidents

The

elected

were

Russell D. Bell of Greenshields & Co.,

Montreal; Walter W. Craigie,
Craigie & Co., Richmond;
Mark C. Elworthy, Elworthy & Co.,
San
Francisco; John F. Fennelly,
Glore Forgan & Co., Chicago; and
Joseph T. Johnson, The Milwaukee
Company, Milwaukee.
The principal speakers at the Con¬
vention, in addition to Albert T.
Armitage, the retiring President, and
Laurence
M.
Marks, the incoming

Inc.,

Laurence M.

Marks

President, were Leon H. Keyserling,
Chairman, Council of Economic Advisers; Clifton W.
Phalen, Vice-President, American Telephone and Tele¬
graph Company; Holgar J. Johnson, President, Institute
of Life Insurance, and Mayo Adams Shattuck, of Haus¬
serman, Davison & Shattuck, Attorneys, Boston.
Because the two-day Public Education Forum sched¬
uled prior to the annual convention in 1949 was so well
received, one day of the convention program was this
year given
over to the Public Education Committee
which had again scheduled a Public Education Forum.
The

Public

Education

Committee

recommended

that

moving picture made to tell the
story of the saving-investing process and the role of the
IBA

the

have

new

Continued

of incoming Officers and Governors of

page

the Invest¬

shots taken during the Association's
Annual Convention at Hollywood, Fla., are on pages 45 to 60, inclusive

Bankers Association bf America, also candid
39th

State and

DWIGHT MFG. CO.

Custodian

Franklin

KEYES FIBRE CO.
&

President for the

Laurence M. Marks of Lau¬
M. Marks & Co., New York

ALMY

H01UNGW0RTH & WHITNEY
Class A

Hollywood

Hollywood, Fla., from Nov. 26-Dec. 1, inclu¬

1950.

PICTORIAL INSERT—Pictures

BATES MFG. CO.
&

who have

Continued

page

ment

DEWEY

numer¬

IBA

MARKETS

Empress died; the actual funeral took place in 1901, but

the

ACTIVE

areas

some

the Investment Bank¬

held at the

City, who succeeds Albert T. Armi¬

them in

are

was

year

rence

long enough to remember the

to agree as

being eyed

are

Continued

ing

of America

The Association elected

sive.

comparative placidity of economics,
society and the law during the so-

even

extend the

precise

Yet there

Thus, too, subsidies to the farmers, and

the various other "benefits"
ous

men,

off

of links in the backbone.

existing

the

condone

Beach Hotel,

of time and
sweeping terms
must be just as misleading as the
summary classification of mankind
according to races, or of plants ac¬
cording to leaf structure, or of ani¬
mal matter according to the number

respects

of dollar.

describe

war economy.

Association

ers

procedure; each fleeting moment of
history moves imperceptibly into the
next fleeting moment of posterity; to

about

The 39th Annual Convention of

investments, along with decrease

into well marked periods, and to generalize about those
periods in broad and sweeping terms.
Very probably that is an erroneous

present.
that

It is axiomatic among lawyers that the future is to be
estimated in the light of the past. Lawyers, and some
other people are inclined, also, to segregate the past

fitting only in the presence of a "great national
emergency" such as that by which we are now
said to be faced but are stubbornly unaware of
is

President, Albert
President, Laurence M.
Marks; also Leon H; Keyserling, Holgar J. Johnson,
Clifton W. Phalen and Mayo Adams Shattuck. Texts of
addresses, also Committee reports, given in this issue..

T. Armitage and newly elected

Says it appears, through taxation,
"we have apparently decided as a nation to eliminate
the man of wealth." Notes broadening of powers of
trustees and spread of use of common trust funds.

people can be "convinced" of the magnitude of
the danger to which we are now said to be ex¬
posed, and in part by a fear that the great rank

Meeting at Hollywood Beach Hotel, Hollywood, Fla.,
Nov. 26-Dec. 1, addressed by retiring

leading trends in fiduciary field:

trying to stem, appears to be motivated in part
by the notion that in this way the American

;

(1) an enormously increased aggregation of fiduciary
funds; (2) a rapidly decreasing average size of fiduciary
portfolios; (3) a progressive breaking-up of private pro¬
prietorship of many sorts; and (4) a continuing decrease

complished at all, by other means. This tendency
to adopt the techniques of the totalitarian gov¬
ernments, the spread of whose influence we are

by steps which

lists

(

Boston, Massachusetts

39th Annual Convention

Shattuck, Attorneys,

Hausserman, Davison &

which the rank and file are impressed by all these

Copy

Fiduciary Fields
By MAYO ADAMS SHATTUCK*

said to be

and file would be offended

The Investment Bankers

Trends in American

As
-

Price 35 Cents

York, N. Y., Thursday, December 14, 1950

Funds,

Common

N. E. GAS A ELECTRIC CO.

Municipal
STATE AND MUNICIPAL

inc.

A Mutual Fund

SACO LOWELL SHOPS

Branches
across

Monthly Commercial Letter

COMMON STOCK FUND

WEST POINT MFG. CO

Bonds

Canada

PREFERRED STOCK FUND

upon request

Bond Department

BOND FUND

duPont, Homsey & Co.

31 MILK

STREET, BOSTON 9, MASS.

Tel. HAncock 6-8200

Private Wire

to New York

Springfield

Fitchburg

THE NATIONAL CITY BANK

UTILITIES FUND

FUND

INCOME (BALANCED)

Members New York & Boston Stock Exch.

Prospectus sent free on

CAnal 6-8100

Worcester

FRANKLIN
64 Wall

DISTRIBUTORS, Inc.
Street, New York 5

Teletype: NY 1-708

Investors

Second Fund

Underwriters and
Distributors of Municipal

and

Securities

OTIS & CO.

sanders a. co.

(Incorporated)

Ill Devonshire, Street

Established 1899

BOSTON

CLEVELAND

New York

Chicago
Los

Angeles

New

York

Cincinnati

Chicago

Columbus

Dallas
Toledo Buffalo

Denver

THE

CITY OF NEW YORK

20 Exchange PL

Portland, Ore. San Francisco Los Angeles

CANADIAN

Company

(all issues)

Corporate
Prospectus from authorized dealers

Neto York Agency:

markets in

maintain active

Brown

THE CHASE

NATIONAL BANK
Head Office: Toronto

Bond Dept.

Seattle

Massachusetts

Canadian Bank

OF NEW YORK

request

Tele. BS 424

Vance,

The

Canadian Superior

Oil

bonds & stocks

Company of California

New

England

Public Service Co.
An interesting

workout situation

Steep Rock Iron Mines
CANADIAN DEPARTMENT

Goodbody & Co.

Domituon Securities
Grporatioti

ESTABLISHED 1891
MEMBERS NEW YORK STOCK

EXCH.

40
115 BROADWAY
NEW YORK

105 W.ADAMS

CHICAGO

Elxchange Place, New York 5, N. Y.

ST.

IRA HAUPT& CO.
Members New York Stock Exchange
and other Principal Exchanges
111

Broadway, N. Y. 6
Teletype NY 1-2708
Telephone: Enterprise 1820

WOrth 4-6000

Teletype NY 1-702-3

WHitehall 4-8161

Boston

\
2

(2274)

The Commercial and Financial

Chronicle,...Thursday,.December

H\Ul

TRADING MARKETS IN

This Week's

New York Central 4/98

A continuous forum in which, each week, a different
group of experts
in the investment and advisory field,frpm all sections of the
country

New York Central 5/2013
New York Central

4yg/2013

Central RR. of N. J.

participate and give their

3*4/87

for favoring

reasons

(The articles contained in this forum

Central RR. of N. J. Int. Ctfs.

they

are

New York Hanseatic

be regarded,

as an

offer

Market Analyst,

120 Broadway, New York 5

B. F.

Goodrich

Spencer Trask & Co.,
City

attributes

the

possesses

well

current

York
York

Curb

5.6%

120 BROADWAY,

Tel. REctor

its

NEW YORK 5

base

which

should

permit

fc-7815

tively
August Huber

rela¬
earn¬

ings
under
prospective tax conditions.
,

American Air Filter Co.

leader

Common

the

tire

tube

and

turers

Stock

Capital

farm

major motor car
equipment manufac¬

•

customers—the company

research

development.

and

Common

This

program has been highly success¬
ful.
Through the development of

profitable

BANKERS BOND

Incorporated
1st

Floor, Kentucky Home Life Bldg.
LOUISVILLE

Long Distance 238-9

non-tire

KENTUCKY
Bell Tele. LS 186

Large markets have been
developed in diverse fields—aero¬
nautical, automotive, chemical and
plastic industries. "
For

example, in aviation, Good¬
produces
heated
de-icers,

while Avtrim

tandem

U. S. THERMO

and

twin

enable

super

ordinary

run¬

ways.

Apart
less

puncture

premium

Request

tires

regular

tire

sealing ^'tire—the
of

the

future.

the automotive line, Goodrich also
produces batteries, complete
brake wheel, tire and tube

assem¬

blies, and Koroseal upholstery for
heavy duty wear in convertibles,

used

148 State St., Boston 9, Mass.
Tel.
.

CA.

7-0425

Teletype BS 259

Telephone WOrth 4-5000

"Koroseal"

widely

home

upholstery, house¬
apparel—aprons,
table * cloths,
rainwear,
shower
curtains, rubberized products,
hoses, etc.
It also insulates elec¬
hold

and

use,

tric cables on

ships, tanks and air¬

craft.

Smith & Wesson
Petroleum Ht. & Pow.

Southwest Gas

Producing

Commonwealth Gas

Corp.

Southwest Nat. Gas

V0GELL & CO., Inc.

Superior products for industry
include Hyear rubber (used as a
base

adhesive,

outlets.
Goodrich's "cold rubber'' repre¬
sents another

important discovery.
This is particularly durable, being
abrasion
resistant
and
longerwearing.
Another recent discovr

thermo-setting resin type

adhesive

metals.

Securities

brake
of

number of

40 EXCHANGE PL., NEW YORK 5, N. Y.
Phone DIgby 4-4950

Teletype NY 1-953

rivets, and is said to

Company

new york cure exchange

can

materials
used

linings, eliminating the

The

new york stock exchange

bind

This

life of the

memsers

products,

enable

record

high

for the

compared with

about

expected

War

volume

II,

low

are

last

war.

rubber

and

Based

the

profits tax bill,

proposed

base

would

share.

well.

(6)

new

also

surtaxes,

profits"

100%.

Financially,
good

there

build-up.

1950, total

...

the

taxed

net

been

June

compared
1946.

with

Since

organic chemicals

agricultural, chemical and

pharmaceutical industries.

$113

ing

30,

flour

earnings

are

all types of footwear

with rubberized features.

Payments

product

(8)

per

1950 dividend.

It is

(9)

seven

earn¬

times its

excess

^profits

strong basic position of the

company in a

trend,

war

its

and

peace

econ¬

underlying growth

through

versification,

new-product

augurs

di¬

well for the

longer-term future.
Stockholders

1951,

the shares

the

will

Central Public Utility 5Vis

industrial,

American Marietta

users.

revenues

have

Residential

total

and

com¬

increased

from

1^29

revenues

Henry B.Warner & Co., Inc.
Members Phila.-Balto.

123

Due to low

operating ratio

25%

of gross revenues
carried down to income

are

available
This is excep¬
tionally
high when
contrasted
with the national
average.

Stock

Exchange

South Broad St., Phila. 9, Pa*

Phil,a. Telephone
PEnnypacker 5-2857

Bell System Teletype
PH 771

New York City Tel.:

BOwling Green

9-4818

for common stock.

(10)
the

Tie-in

arrangements

Northwest

Power

with

Pool

BUY

and

Power and Light
Company
on a
reciprocal basis is advantage¬
ous to Montana Power
in selling
excess power when available
par¬

the

tax base of about $17.00 per share.

omy,

Foote Mineral

Central Electric & Gas

Light

Utah

which

Power

SAVINGS

BONDS

and

higher

U. S.

cost

selling at less ;steam property.

probable 1950

apparent

somewhat •Utah

yields 5.6%

than six times

other

residential

revenues

Currently selling at 115, Good¬
ticularly
common

Penna. Power & Light Common

constantly increasing with
dependence
on
industrial

about

earnings.

rich

Street, Boston 9

Pennsylvania Railroad

copper and zinc min¬

and

business.

liberal in relation'to future

diversified

to 45.1%. in 1949.

$6.50

Milk

census

population
since 1940 of

load

Residential

less

book

development.

could

mills

been

used for expansion

were

new

Montana

commercial and

28.7%

totaled

Tel. HUbbard 2-6442 Teletype BS 328

operations, packing plants,
sugar refineries, cement
factories,

million

the

Ralph F. Carr & Co., Inc.

$35.00 to $133.00.

and

indicated

such

mercial

Dividends

Latest

average.

value per share has
increased from

Other standard products of im¬

portance

Power

$162 mil¬

1941,

Bought—Sold—Quoted

Philadelphia Electric Common

users

current assets were six

working capital

lion

income

average

among agricultural and industrial

times total current liabilities and

use

Chemical

U.
p or

(7)

has

with

Nat'l Research Co.

con¬

time im¬

same

5%.

being
.

able,

Keyes Fibre Co.

national average and cash income
farm last year was over twice

this

even

Ludlow Typo. Co. Com.

per

growth

and

are

capita is 27 % higher than the

per

normal

present

introduced

Montana's

r e

The

Goodrich

has

Management

amount could be earned after 45%

"excess

regulatory

customers

(5) Common stock equity is ap¬
proximately 39%,"a figure among
the highest of all the
utility com¬
panies in the U. S.

per

other- words,

and

aginative.

by the

$17.00

Balatoc Mining Co.

Relations" with

(4)

company's

about

The

Young

very favorable.

House, Goodrich would evidently
very

Mex. Lt. & Pr. Co. Com.
James H.

includ¬

servative and at the

excess

passed

'
-

the

square

(3)

position again.

6800

to New York Canal

Mon¬

commissions

It would occupy a
major

2904

Enterprise

Open End Phone

ing part of Idaho.

was

Tele. BS 142

Enterprise

Hartford, Conn.

averag¬

miles

largest producers in the

Dealers Inc.

about
of

000

Goodrich

Portland, Me.

cov¬

tana

that

Assn.

Tel. HUbbard 2-5500

ing about 90,-

sales

Nat'l

75 Federal St., Boston
10, Mass.

aver¬

area

75%

During

doubled

years.

synthetic

of the

J. B. Maguire & Co., Inc.
Securities

Members

be¬

Serves

state

Goodrich

prewar

one

Bought—Sold—Quoted

rate

the

ering

$20.00

pioneered in the development and
use

Manufacturing

hy¬

(2)

reserves

peace.

than

the

Bates

common

system

with

ostensibly well

war or

branch offices

natural

structure

$388,000,-

approximate

The company is

situated for

World

Company

electric

gas

all-

$500,-

share—after 42% taxes.

per

our

City

it is

low/cost

share,

per

ings, and less than

double the

Power

(1)

$8.00

NY 1-1557

Company

age.

for

linings.

Power

sons:

full

over

Earnings for 1950, after
of

Mobile, Ala.

stock for the following basic rea¬

result,

St., New York 4, N.

Direct wires to

security I like best is Mon¬

tana

000 in 1949.

plasti-

all types of conveyor • belts
$nd
Other specialized products for sale
to
shipping, drugs and hospital

ery

Over-The-Cotinter

lines,- should

000,000

Primary Markets in

New York
Montana

cizer, and modified for phenolic share for
1950, compared with
resine); Goodrite p.e.p.s., a highly
$5.50 the year before.
Disburse¬
adhesive spr^y Tsticker; Geon
ments
have
been
conservative
polyvinyl . cables
which
resist
flame, grease,- oil and solvents; relative to earnings, as retained

37 Wall Street, New York 5
WHitehall 4-2530 Teletype NY 1-3568

material,

sales this year should reach

buses, taxis, etc.
Goodrich

the

products of

dro

the

developed the tube-

and

find

and

time

Members New York Stock
Exchanae
Member, New York Curb

J. H. Young & Cq., Inc.

The

fare

from

company has

SIMPLEX PAPER

Pres. and Treas.

participation in the country's gen¬

Flight rigs and

tires

bombers to land

CONTROL

Good¬

try.

rich

Analyses

lines,

rich has turned in the outstanding
postwar performance in the indus¬

Steiner, Rouse & Co
New Orleans, La. Birmingham, Ala

JAMES H. YOUNG,

fac¬

on farms and in

house

will

eral economic trends.

has expended substantial sums in

Dobbs-Houses Inc.

airways;

diversity

lished

business—with

Churchill-Downs Inc.

the

high

lever of

highways, railways,

the company's regular estab¬

and

prof¬

tax

Co., Inc.,
(Page 2)

City.

HAnover 2-0700

through development and research,

apparently

excess

Exchange

you

The

favorable

Stock Exchange

New
New

J. H. Young &

urer,

New York

Exchange

mines;

(6)

yield,.and (7)
Members

Montana Power Company—James
H. Young, President and Treas¬

B. F. Goodrich in action."

garrison

economy;

prod¬

25 Broad

and

office,

participate

Bought—Sold—Quoted

Collyer, President, has

cities;

situated

Since 1917

Mr.

tories and

diverse

encompass' most

waterways

nances;

and

said: "On the

fi-

strong

(5)

industrial fields.

Rights & Scrip

Goodrich's

dreds,

highly

(3)

Specialists in

(1) basic growth;
diversified products;
excellent management;
(4)

(2)

Louisiana Securities

Huber, Market Analyst, Spencer,
...Trask & Co., New York City.
(Page 2)

ucts, which number in the hun¬

Company

Goodrich

B. F. Goodrich Company—August

be, nor
sell the securities discussed.)

few

Teletype NY 1 -583

Alabama &

and

Selections

These examples touch on only a

New York

Established, 1920

Participants

Their

particular security.

intended

not

are

AUGUST HUBER

Corporation
BArclay 7-5660

Forum

(

~{11) Progressive action
agement in

outlets
of.

proposal

building

supply

lines

tKat

mani

„■

pipe

increased

company.

basic

sound

the

facts

Com¬

enterprise with

Jan.

increasing growth possibilities

split

the present market
price of about
on

for 37 Years

convinces

Power

Continued

Quotation Services

above

3-for-l basis.

Over-the-Counter

sources

extending

Montana
a

natural gas

materially

interpretation

mentioned
me

and

has

revenues

pany

vote

developing

National Quotation Burean
Incorporated
Established 1913

and

page 86

46 Front Street
CHICAGO

New
SAN

York4,N.Y.
FRANCISCO

Volume

172" Number 4968

...

The Commercial and Financial Chronicle

„

Articles and News

There is No Peaceful Solution to Russia's Aggression!
—Melchior Palyi

-—Joseph P. Kennedy—

To Defend America, We Must
—Lewis H. Brown

issue

declaring all-out war on the ag¬
article on "Economics of gressor, come what may.

p i n

Chropicle,"
I tnade the fol¬
lowing stater. "i
ment: "With

•

inexhaustible

optimism,

that

soon

(Ko¬
front

the

rean)
i n
force

are

does,

advancing?

the

Even

would

war

Mao

Actually,

outgun

the

ap¬

con¬

and to live in permanent tension.

they will out¬
number or at
least

victorious Mao?

tinue, open or disguised, in Korea,
Tongking,
Malaya,
Tibet,
and
where else.
In fact,
any
such
"deal" invites him to repeat the
performance. To say the least, we
would have to man and equip
huge armies somewhere along the
38th parallel, in Indo-China, etc.,

the.
arrive

Yanks

could

Dr. Melchior

Palyi

enemy.

worth

his

salt

would

not be
voluntarily

underwrote such "modest" terms—

with

cheek.
But has he no reserves to match
Short of an all-out war threat, he
ours?
North
Korea
should
be
is likely to insist on the whole of
capable of putting 500,000 men in
Korea and Formosa. "More likely
the
even

field; the Russians could

tongue

sup¬

than not, he may claim repara¬
ply them profusely. And what if
tions fdr the damage we did in
in the meantime ,a Chinese (Com¬
Korea. He could be scarcely less
munist) 'volunteer' army arrives,
too? Indications are that Moscow impudent now than he was six
months ago, when as a price for
Is driving China into war against
the West, using Formosa as the diplomatic recognition by Britain
he demanded, among other things,
immediate reason? We still may
that Hong Kong should cease to
have a few surprises to face." '
offer asylum to refugees. He may
If "outsiders" who have no ac¬
not put in the additional request
cess
to direct information could
that we cease to provide weapons
foresee the danger of a vast army
to the Viet Nam; that he should
meeting our forces in North Ko¬ have a decisive
say in the peace
rea—how could the Administra¬
treaty with Japan; and so forth.
tion in Washington overlook it?
("Asia for the Asiatics," Japan's
The incompetence of our national
.imperialistic slogan, will do.)
management is fully documented
Suppose that we offer to aban¬
by its unparalleled ability to-be
don North Korea, throw Formosa
taken
by
surprise—-unprepared into the UN's
lap, etc., and couple
diplomatically as well as mili¬ the offer with an ultimatum: to
tarily.
comply, or else. That would sound
V. .It" is a commonplace that the like forcefulness combined with
Korean crisis has reached the
appeasement. But it is not likely
point at which the Sudeten crisis that
our
British
and
French
stood
in
September; 1949, and "friends" will go along the road
with almost identical implications.
of bluffing. Bluffs can be called.
The analogy is striking. Then as
Are we then willing to carry out

now,

unprepared

thoroughly

West

frightened.

was

Then

threat?

the

that

Mao

And

even

assuming

how much

obliges us:

Britain led into appease¬ trust can be put in his words, for
ment, supported by France. Then how long?
as
now, the British were ready to
Permanent Red occupation of
sacrifice some country that was to North Korea makes Korea a per¬
be protected
by treaty or cove¬ manent battleground.
If today
nant.
Then as now, a pseudothey can mustfer a million men
humanitarian peace-at-any-price
there, they can let loose tomorrow
carried overwhelming support in
an equal number on Indo-China.
now,

Western Europe, a rationalization
to cover
up the pitiful weakness
of the "democratic Welfare
State,"
the weakest

all

political

(Their new railroad through Yun¬
has just been completed. Ap¬

nan

may
postpone
the
crucial decision for a short while.

peasement

sys¬

tems.

Are

Anyhow,

cannot escape any
choice between two

longer the
alternatives:

(1) Swallowing our
accepting some sort

to fight for Indo-China?

We would be up against

the most

expensive jungle war in all his¬
tory. If not, Siam is next—with
some 400 miles of scarely defen¬
pride und
sible borders, and a Chinese Com¬
of
modus

Vivendi with Red

China; or
(2) threatening and if necessary

munist minority ready to

Continued

are

interested in offerings

revolt.

page

An Economic Riddle Wrapped in An

What New York

Members New York

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Curb Exchange

Street, Boston 8

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Teletype—NY 1-5

Albany

Chicago

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lay

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YORK

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TRADING MARKETS

^Implications of Frear Bill—Senator J. Allen Frear, Jr.

)

Advisory Council

Haile Mines

The Electric Power Outlook—Charles E. Wilson

Corporate Tax Fictions—Elisha M. Friedman

———

Lear, Inc.

in F. R. System—Frederic A. Potts—

Measures of Reasonableness of Manufacturing Profits
—Bernard F. Magruder

Initiative in Welfare

Mexican Gulf

I
15

State—Roger W. Babson

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Jack & Heintz

IBA ADDRESSES AND COMMITTEE REPORTS
Trends in American Fiduciary Fields—Mayo A. Shattuck—Cover
IBA Will

Continue Its Tasks—Laurence M. Marks—

Remington Arms

Achieving Unity in Securities Industry—Albert T. Armitage— 18

Output, Not Controls—Key Weapon in Crisis!
—Leon H.

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J.F.Reilly&Co.

Fundamentals of Public Relations Program—Clifton W. Phalen 20 :
In Attendance at IBA Convention——_i_

Sharp Decline in Industrial Security Offerings

Why Government Bond Prices Declined——

Incorporated

Broadway, New York 6

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Canada's Progress and Prosperity—

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Private Utilities

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Holgar Johnson Cites Importance of Public Relations—— 24

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Public Power

Petroleum and Natural Gas Industries Sound

Railroad Securities and the Investor

Municipal Securities Volume at Record High,—...

Skiatron Corp.

Airline Profits at Comparatively

F. H. McGraw & Co.

High Level-

Golf and Tennis Tournament Winners at the Convention

IBA to Hold 1951 Convention at Hollywood, Fla.

sis

Bates

Mfg. Co.

Continental

IBA Holds Thirty-ninth Annual

Convention

Copper & Steel, Inc.

Cover

Missouri Pacific RR. Bondholders Urged to Veto ICC Plan

Giant Portland

FIC Banks Place Debentures

Cement Co.

Sylvia Porter Foresees New U.S. Securities on Market—— 11
Foresees Further Contraction in Gold

Output

•

Investment Week at Syracuse University—^

A New Realism Needed, Rukeyser Declares—

Regular Features
As We See It

Bank

and

Canadian Securities

Singer, Bean
& MACKIE, Inc.

(Editorial)

Cover

Stocks-

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HA-2-0270

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Trading Markets in=

Our Reporter on

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Governments

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Prospective Security Offerings—
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& Res.
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Security I Like Best—
The State of Trade and Industry
Tomorrow's Markets (Walter Whyte Says)—.

2
5
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—n

Corp.

»»«y*

25 Broad Street, New York 4

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Washington and You—

request)

May Corp.

71
70

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The

on.

Gerotor

100
74

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Securities Now in Registration

(memo

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Observations—A. Wilfred May__
Reporter's Report

Kold Hold Mfg.

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News About Banks and Bankers
Our

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From Washington Ahead of the News—Carlisle Bargeron
15
Indications of Business Activity
98
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Exchange PL, N.Y/5

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Mutual Funds

Teletype NY 1-1825 & NY 1-1826

Coming Events in the Investment Field
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Tel. "WH 3-6816

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104

72
Twice

J. Drapers' Gardens, London,
land, c/o Edwards & Smith.

Weekly

and

COMMERCIAL

C.,

Eng¬

CHRONICLE

Reentered

Reg. U. S. Patent Office

Air Products Corp.

second-class matter Febru¬

25, 1942, at the post office at New
York, N. Y., under the Act of March 8,
1879.
ary

Publishers

WILLIAM B. DANA COMPANY,

•

Spencer Trask & Co.

WALL STREET, NEW

Synthetic Liquid Fuel—A Coming Industry—James Boyd— 12

REctor

WILLIAM

Street, New York 4

can

York 8, N. Y.

2-9570 to

9576

)

HERBERT D. SEIBERT, Editor & Publisher

New York Stock Exchange

junk I

I'm nuts about the stuff!

Inflation—Oliver S. Powell

—David Morns

FINANCIAL

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Security Dealers Have Accomplished

23 Park Place, New

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on.

Enigma

—Edwin G. N'ourse

The

High Grade Public Utility and Industrial

25 Broad

hands

Business Prospects and Pitfalls of 1951—Lewis L. Schellbach—

Published

all the

Avoid Inflation

Our "Fluid" Defense Against

terms

By offi¬
cially recognizing and seating him
in the UN and restoring North
Korea ~to Bolshevism? Why should^
he accept such limited goals while"
if tie

to as¬

sume

what

his hordes

Washington
appears

pease a

—but you can't stop me from buying

Byfield

Economic and Financial Conditions Affecting Canada
—H. A. Stevenson.
1
_s

Mao's Terms

MADMAN

do all the damage by use of its satellites,
and then play part of virtuous intermediary.

Harbor," which was
3, 1950,
of the "Commercial and
a n c i a 1

CALL ME

—V-

—

Investors Must Fight Enemies—Robert S.

of open war yet

in the Aug.

„„

Outlook—Q. Forrest. Walker

Let's Wash Up Our Bankrupt Foreign Policy

Say? UN has already been turned iuto an instru¬
ment for moral coverage of Bolshevist aggression, and fore¬
sees this country burdened with all-out armaments and allround regimentation. Sees Russia's policy as way to stay out

published

Asia is lost.

In my

AND COMPANY

The Business

comparing Korea with Sudeten crisis in 1939, finds

situation similar, and asserts Europe's position is untenable if

Little Pearl

"llCHTfnSTfll

Page

Trends in American Fiduciary Fields—Mayo A. Shattuck-—Cover

By MELCHIOR PALYI

•

I N D E X

There Is No Peaceful Solution
To Russia's Aggression!
Dr. Palyi,

(2275)

WILLIAM

DANA

SEIBERT,

President

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Exchange PIflCC. New

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Commercial and Financial Chronicle

The

(2276)

pect for the easing

WALKER*

Economist, R. H. Macy & Co., Inc.

About

Uncertainties

uncertainties in outlook due to low economic

After reviewing

marketing

visibility and difficulties in defense planning,

There

econ¬

visibility

days, economic
again
particularly

low. It is low because many

fears,

doubts and uncertainties about the
future

mine

intel 1 i g e nt
forward

ning difficult.
There

are

takes

cies, the safe
magnitude of
defense

plans,
Q.
rapidly
growing controls of

Forrest Walker

the

and the threat of

economic

our

"creeping infla¬

tion." Confidence is not improved

continuation

wasteful

and

postponable government
penditures in this period of

ex¬
na¬

Despite
the
great achievements of the private
emergency.

enterprise system, there are per¬
sistent

overt

covert* attacks

and

the wisdom of its direction and

frequent presumptions that poli¬
tical
"know-how". can, produce
better results. These are the kinds
of

.uncertainties

breed

that

eco¬

nomic unsettlement.

be made obsolete in short periods

by technical improvements, or it
be unsuited for the particu¬
lar theater of operations where it

may

be required. It takes time to

may

formulate

Uncertainties

long range character and will

not

soon

Others

resolved.

re¬

quire early removal if we are to
economic

reasonable

maintain

stability during the near term fu¬

and

program

detail

its parts. Even when the blueprint
is

completed,

astute

very

judg¬

ment

must be exercised

mine

what, when and how much

to deter¬

should be produced.
Need

for

While

tions

the

know

which

have
now

the

about

mean

know

expendi¬

raw

centive

and infla¬
destroy in¬

defense costs.

add to

and

thaTthe

tax

ity to pay and it should not place
undue limitations on the expan¬

facilities for
which we may later have urgent
need. At present, we do not know
sion

production

new

be and

tax liabilities will

may

what these

not know for sev-

This is another un¬

eraL months.

confident

which makes

certainty

Many

ma¬

To formulate

business outlook for the next

the
six

months,

make

to
broad assumptions.

several

judgment about

her.e

that

during
this period full scale mobilization
will not be required, but that par-

mobilization

tial

accelerated

rate will

will

proceed
What

rate.
not

this

know; but

despite the ominous character
recent

is unlikely that actual expenditures on
defense contracts will greatly ex¬
ceed the official estimate of a $30
developments,

entitled

are

most

present

urgent

de¬

fense

requirements, the kinds and

clarification

*An address
Annual

our

un-

impairment of the free

necessary

required to
industries

tary

and

fiscal

intelligent
measures

by Mr. Walker at the 34th

Convention

Association of Real

the

Estate

City, N. J., Dec.

New Jersey
Boards, Atlan¬

1950.

what

and

not

defense

know

to curb

dangerous inflationary trends and
non-defense

reduce

demands

atmosphere

surcharged
with disturbing rumors, fantastic
estimates of expenditures, fears
about real and prospective short¬

materials,

erratic

price

official

ages

threats

and

post¬

solve

oil

all these

BANK

and

Since

the

definite

other

to
deflate
extravagant
expectations, and to re¬

tainty,
business

INSURANCE

period. There is

to remove this major uncer¬

way

and

risks for

calculated

unwarranted

lieve

Control Uncertainties

control and direct the economy

the

facilitate

defense

program.

restrictions, as
yet there has been limited use of
Except

Inquiries Invited

1950,

have granted broad powers to

these

new

threats

the

credit

for

Apart from
more
controls,

powers.

invoke

possibility of new and
perhaps severe restrictions is not
an
unmixed
blessing. Fears of
mere

controls
minor

J. Arthur Warner & Co.
INCORPORATED

12#

Broadway, New York 5

WOrth 4-2300

—

Direct Private

Teletype NY 1-40

Wires to Bostont

Philadelphia, Hartford, —
Providence and Portland, Me.

have

has

been

considerable

tive

the

buying"

amount

stimulate
of

"protec¬

against orders

now.

hand. This has contributed to
firm

and rising trend

of the

general price level. Until the de¬

•

program

becomes

Datfis & Co.,

clearly defined, it is impossible to

Morgan & Co., Los Angeles

appraise adequately the necessity

Private Wires to Paul H.

Chicago,

fense

for

new

much

written

do,

and how to do

Western

/ It

seems

wise

where

see

have

and

where
now.

the

huge defense program
upon
a
booming civilian
economy. Less attention has been
a

given to the unstable character of
the preceding business expansion
and the likelihood that under nor-

conditions

early,

there

would have

and perhaps sub¬

stantial, contraction in business
activity. The main supports of the
pre-Korea boom were abnormal
increases in automobile produc¬
tion and residential construction.

made possible
by easy installment credit, and
large use of unsound credit meth¬
ods in financing residential con¬
This expansion was

struction.
If
of

believed that

a new era

uninterrupted and fantastic ex-

restrictions and the pros¬

p.ansion
belief
enced
ness

had

was

war

business

opinion

was

automotive
return to

were

work

(1)

out

just

peace,

create

levels.

viewing

our

they

dollars

We
we

are

have

far

had in 1945.

still

but what

asking
kind of

Is
Joseph

Kennedy

preservation

we bought there?
Europe determined to
for itself those ideals of

Western

preserve

democracy

„

that

have

been

of Peace, (3) to assist in the re- preaching? Put to the test

now

habilitation of a devastated world, as to whether she will arm her^ moving towards those objec- self effectively, even with our aid,
tives, we assumed in 1945 that to deal with the Russian threat, is
they were common to all the Al- she showing the kind of deterlied

nations.

short

time

case,

but

force

that
at

was

learned

this

that

the

Communism

work which

dominating

not

was

in-

was

Europe

and

mination and the kind of will that
amounts

economic

anything?

unification

Plans for

have fallen

apart in the light of nationalistic
French
military

differences.

£Ja tetooim ends. Our prob- power is only a shadow of its
to

deal

h-as be?» h0W f?r?'er self> and a strP".«
of Com- of Communist sympathizers

this

with

drive

munism.
mu

France

.□

™

moil-

The Need for Preserving Our

As far back

was

March 18,

1946, I
magazine what

set forth in "Life"

The

Britain

{strength

endless

political

military

keeps
tur-

strength of

one-fourth

what it

in 1943 an(j gj^ shows every

inclination
burdens

that

the heavy
involved

avoid
would

I considered should be the funda-

mentals

date, has revealed no disposition to develop effective military

of American

first

and

that

foremost
should

policy.

The

these

make

was

rebuilding

and

keep
Fundamental to

ourselves strong.

it.

West

Germany,

Continued

page

•

successful dealing with the

any

7^4 XiteJ StfT? S
t

W1 ?

* liTrincy

.standard of living. Whatever
actions

con¬

might be suggested,
this nation in the

bankrupt

self-destruction. I

mean

not

was
.,

„

our

against
-

...

wlthln T
.rfn1 +v?
example,
three billion dollar loan
Britain. I went farther than
j

that.
of

I said in

March

to the United

should

"Times"

"Financial aid

Kingdom
is and
outright gift." But
...

no patience

with

policy

regard
and

the

1946:

that

without

material—would

mitments

due

resources—human

our

abroad

make

that

com¬

could

not fulfill. As Ambassador to Lon¬

don
of

1939

their

had

when

this

the

commitment

seen

the

British
to

folly
made

Poland that

Current Yields

they could not fulfill and have not
yet

brought them into
but

war.

naturally opposed Communism
I said if portions of
Europe
Asia wish

from 4% to over

fulfilled—a commitment that

Communistic

Francis Ldu Pont & Co.

u.P°n_ them, we cannot stop it. In-

men- nor

by busi¬

the

Korea,

stead

would

soon

normal production

authorities,

historical

Continued
uurutnueu

on
un

cycles
T)fine

of
fiR

page 06

strength
fritter

must

and

make

ning

with

our

not

battles

that

are

New York

now?

intervention

Begin¬

One Wall Street, NewYork

Mr.

5.N.Y.

25
address

Stock Exchange

Position

in
the
Italian elections and financial and
*

Members

won.

Our Present

But where

sure

certain

away

could not be

widely held that the
industry

Competent

the

in return for this

friendship have

(2)

for the

means

Berlin

and

history.

Friends?

Europe

for

shared by experi-

Before

our

fewer friends than

at that

or even have Communism thrust

arrived,

analysts with good historical

perspective.

fore
time

Germany

What have

The

that

really

not

plan, further billions

occupation

effort?

some

the

wide

spent in

of the North Atlantic
Pact, French
Indo-China, and now in Korea we
are
fighting the fourth greatest

come

from V-J Day

Korean

programs

Japan
Military aid has been poured into
Greece, Turkey, Iran, the nations

been - said
difficulty

has

about

political aid to Greece and Turwe
have
expanded
our

key,

the Marshall

pursuit of them would
of

deal

scale. Billions have been

some

speculation, but the main

impact

encouraged

crete

outbreak

imposing

been

Under the Defense Act of

STOCKS

and

mal

anxieties.

Korea

hostilities,

advance

ncenWinnc

spite the obvious difficulties, it is
clear that there is need for early
decision on some reasonably spe¬
of

problems

our

capacity
underlies

assumptions.

cific defense goals and assumption

Primary Trading Markets In

in'our

Abnormal Business Prior to

general confusion
defense requirements. De¬

about

Obviou«lv

Durnoses

unwavering faith
to

required for

measures

armament

and

changes,
warnings*

could

it."

mone¬

limited

when

Spring-

judge

what

functioning of the civilian econ¬
omy; that there will be sufficient
political courage and public sup¬

will be made upon them. The eco¬

they

when

better

assume

w?U

to sustain

operating

that the present program
executed with a minimum of

port

confident

also

"If

to lift to

arms

whither we are tending, we could on an almost unbelievably

tent

famous

said:

defense."

first know where we are, and political and financial

necessary

assumed

his

speech

own

objectives be¬

Forecast Assumptions

ponable public expenditures to
safe levels; and that the use of
direct
controls
will
be
strictly

plans

Lincoln
field

the world, has

with his

are

planning difficult.

forward

categor¬

product

them.

and

expenditures

terms

make

ies and the manpower

cannot

made

asked,

rate

terials, finished
produce

tionary in effect,

busy holding

are

asserts it is

burdens

tax

conceived

poorly

are

added

the

have given and received from
vehicle to enforce peace.
"an Atlas, whose back is bowed and whose hands

Concludes

expendi¬

local

and

state

tures.

Goals

appropria¬

been

ture and what these

will

mies

our

hemisphere. Listing aid

each UN nation,

expenditures by the fed¬

billion annual rate by next June.

Specific Defense

this

also
non-

nomic

The

ture.

need

tic

financing. This

to deficit

eral government and severe econo¬

are

quantity. Moreover, the best
designed materiel of today may

the additions

Some of these uncertainties are

judgment

mis¬

some

inevitable;
they are part of the costs of de¬
fense
planning.
Strategic needs
are
highly variable in character

little
Defense Program

conditions,

and

life, the prospective tax burdens

tional

such

der

poli¬

the

task for political leader¬

military developments
and international politics necessi¬
tates considerable flexibility. Un¬

current

foreign

not

nor

course

about the im¬
0

for the military experts
who frame the plans. The shifting

apprehensions

plications

program

foreign policy is politically and
without friends anywhere. Rea¬
soning we cannot contain Communism all over the world he
urges we withdraw from Korea;
stop squandering valuable
resources in Germany;
and instead build up our defenses in
Kennedy declares

morally bankrupt, leaving

burden should be within our abil-

Planning:

frankly recognize,

defense

easy

ship

deep- seated

our

any

that the formulation of

prudent

Mr.

without

Obviously, it is vital

Defense

must

course,

plan¬

with

assurance.

Difficulties

make

cannot appraise

outlook

business

great

business

confidence.

this program, we
the

under¬

They

prospective costs and financ¬
ing. Until we know more about

and

met

taxes but it
drastic curtailment of

means

execution,

intelligent

basis,

higher

means

defense
to

must

costs

pay-as-you-go

recourse

character of economic controls es¬
sential

Former U. S. Ambassador to Great Britain

these

that
a

is not guaranty of boom,
selling problem.
Favors
and credit restraints rather than direct controls.

In these critical

By HON. JOSEPH P. KENNEDY*

magni¬
which

load

defense

large; and it has been rightly said

program

Economic Visibility

Low

Taxes

the

can carry under a
partial mobilization.
know that the costs will be

for price resistance as

money

limits

1950

Up Our
Bankrupt Foreign Policy

economy

condition

required; and (2) defense program will be executed with mini¬
mum of unnecessary impairment of functioning of free civilian

Holds defense

the

there is likely to be spotty business ahead on basis
of assumptions that: (1) full scale mobilization will not be

and looks

tude

omist says

economy.

are

Let's Wash

existing controls. This situation
adds greatly
to the hazards of
making
intelligent,
production
plans.
of

The Business Outlook
By Q. FORREST

tightening

Thursday, December

...

Kennedy

before

University of Virginia Law School Forum,
Charlottesville, Virginia, Dec. 12, 1950.

Offices from Coast to

Coast

Number 4968

172

Volume

. . .

The Commercial and Financial Chronicle

Steel

The

(2277)

Investors Must

Production

Electric Output

Carloadings

State of Trade

Retail

Price

Auto

and Industry

By ROBERT S. BYFIELD*

Index

Production

Robert

Business Failures

noticeable rise took place in total industrial production last

with the return of clear weather to most of the storm areas

week
of the

country.

corresponding period one year ago.
difficulties mounting. Metalworking shops producing goods
civilian market are increasingly out of luck in the matter
supplies, says "Steel," a metalworking magazine.
All signs

ment
for

Byfield

the

point to

week or more
worsening of the situation in Korea,
according to reports.
Used-car prices have also shown greater
firmness, reacting to the news which may be the forerunner of a
likely cut ip new-car production early in 1951.
w
■
buying of automobiles during the past

Scare

developed

million.

the

place the figure of new cars in

Estimates

warehouses

with

the

•

General

dealer hands or in

this year around three-quarters

of a

...

Motors

and

rejected

Ford

plea to
Both com¬

government

1951 model passenger cars.
panies stated the request from the Economic Stabilization Agency
was
"impractical."
An appeal was made by the agency after
General Motors last week revealed it was going to raise prices
about 5% on all its 1951 automobiles.
Shortly thereafter, Ford

rescind price increases on

announced
on

the

price advances ranging from $87.50 on

highest priced Lincoln.

Ford cars to $165

are

"liberals"

putting into our readers' Christmas
few fundamental bits of tax information. These are for

lay investaor, and even for them are offered largely by way of
mwini^nr
reminder

for

their

late in presenting their
case,

investors

face

fQT

technical

Capital Gains and Losses

own

is the re¬

The timeliest tid-bit to give you

Alleging that
largely inarticu¬

are

llnnrfli."

tiv.

("see your lawyer

discourse and further details).

purposes.

corporations

urges

fables

strategic

minder that losses

securities sold on the last

within the year;
followsold for cash delivery.

day of the year are deductible

but

issue

gains

are

not reportable until the

ing year unless they are

boldly and intelligently.

cannot

Losses

taken

substantially

security is purchased within 30 days
before or after the .sale. Thus, one cannot "re¬

identical

not

exceeded the 7,500,000 vehicles it was expected to reach in the past week.
United States producers, it is reported, are moving into Decem¬
ber with schedules "that seemingly belie the dark materials'
problems confronting the industry."
"Ward's Automotive Reports" state that beyond December, pro¬
duction cutbacks are shaping up with schedules of the major
producers being more or less geared to materials' restrictions
ordered by the government.
These, it adds, may well be accom¬
panied by sizable employee layoffs.

Year-End Tax Bill

unfortunately being also tax-tide season

season

the

stocking

being sabotaged by
developed by
Communists, Socialists, and so-

demand pressure.

Automotive production thus far this year

This Yuletide

investors

the first half of 1951 unless curbs on civilian goods ease

Producers are booked full for January and are
accepting orders beyond that month except on DO and other
emergency ratings.
As a result, civilian goods industries are
accepting orders beyond that month except on DO and other
turning in desperation to the premium markets for relief. Con¬
version mills, however, are booked solidly for months ahead and
are turning away business.
Gray market offerings are limited by
the close control maintained over shipments by producing mills.
A large part of the tonnage available in the gray market is im¬
portant material.
Sweeping upward revisions in iron and steel prices continue,
states this trade magazine of metalworking. Virtually all products
are affected.
Changes are being made in some extras as well as
base prices, and it appears it will be another week or so before
all producing companies have completed action on their schedules.
As a general thing, the industry is following the lead of United
States Steel subsidiaries in advancing prices. Adjustments in steel
are being accompanied by advances on pig iron, scrap and other
raw materials. Ferroalloys are coming in for revision.
Meanwhile,
the trade anticipates early application of new stiffer government
regulations affecting prices, wages and production in general.
Some observers expect a swing to mandatory supply ratings sim¬
ilar to the Controlled Materials Plan of the last war within the
next 30 to 60 days, according to the above source disclosures.

that enemies

warns

—"and how" this year—we are

worsening supply conditions with acute scarcities threat¬

ened in

has

By A. WILFRED MAY

Co.,

of free enterprise create their own
effective folklore; and American

called

steel situation continues tense this week with procure¬

The

Items for the Investor's
Mr.

mass

Output in the aggregate was considerably above the level of
the

S. Byfield

Members N. Y. S. E.

J
A

•

Trade

Cominodity Price Index
Food

this

critical

hour

seems

worthwhile

to
remember
that
American investors are
definitely

part of

directly,

in¬

the

planes,

the

and

equipment

for

necessary

industrial

our

machine to

function.

It is

obligation

our

and

responsi¬

bility to make
that

sure

far

power
as

Byficld

there is

little inter¬

with

ference

this investing process as

possible.
It will be my task to view the
investment problem externally; to
see the house as a whole, its struc¬
ture, its ability to withstand storms
and stresses and perhaps

which

forces

the

its existence

are

well

examine

threatening

their

as assay

methods of attack.

announced

been
do

My subject has
as' "What can I

investor

free

make

enterprise work?" and so let us
or identify what attempts

ascertain

being made to prevent it from

are

This is an age of

fables, and par¬
economic fables.
The

ticularly

enemies

free

enterprise,

the

profit and loss system, the Amer¬
ican Way of Life (or whatever our
particular
national
economy
should be called) have developed
a

folklore

collection

where

agreement for later re-purchase.

the husband may be
(although to preserve
arranged the other way around—
namely, to offset gains of the wife by losses of the husband). The
1950 statute did not eliminate the right to split income; as far as
However, in a joint return the gains of

offset by

the losses incurred by the wife

domestic bliss, it had better be

the Treasury is

concerned, husband and wife are one person.
Holding-Period Distinction

transactions according to the

differentiation of security

The

question
wartime

length of time it has been held is again rendered a hot
because of the possibility of Congressional action under
In the investor's status

stress.

should be to have any
term.

taxpayer, his principal purpose

long-term gain, and losses short-

of securities held
requires a holding period

Short-term gains and losses are the result

for six months.

of six months

A long-term gain or loss

plus

one

Short-term losses
vice

profit

day.
are

subtractable from short-term gains or

in half and

Long-term profits and losses are reduced

versa.

net short-term gain, you may reduce the
amount by net long-term losses, the difference being taxable at
ordinary rates. If you have both net short-term and long-term
If you have a

netted.

gains, the former are taxed at ordinary rates and the latter (after
having been reduced by half) are added to ordinary income, or
taxed at the alternative rate of 50%, whichever produces the
smaller tax. If you have a net long-term gain and a net shoTt-

required to reduce the former by the latter.

term loss, you are

two

the balance being permitted to be
This carryover may be applied against

ordinary income, and
over

for five years.

gains in those years,
income.

25%

have both a net short-term loss and a net long-term loss, the
are
added together; $1,000 thereof being subtracted frdrm

any

carried'
capital:

plus $1,000 in each year against ordinary

event, there is an effective maximum

ceiling of

long-term capital gains.

Continued

page

of fables

shape and control men's minds.

Compared with

them Paul Bun-,

yan, Baron Munchausen,
Brothers
Grimm
were

and the
pikers.

General Motors disclosed specific
Dillinger and Baby Face Nelson
Continued on page 83 merely stole banks; the despoilers
of

there is

you

working.

including

corporation and its 50%-or-more shareholders; and

our

of the same family,

ancestors, lineal descendants,
sisters by whole or half-blood; be¬

wife,

husband,
brothers

tween

lies

within

A. Wilfred May

the

tools

existing holdings before he makes

tween members

provide

security through the device of

his

defense mechanism.

our

Directly

Robert

adding
the
profit-cashing sale. Prohibited as wash sales
to register losses or gains, are transactions be¬

place"

free

nation

COMPANY

DANIEL F. RICE AND
Established

1823

enterprise have a whole
the objective of their

l.iA'

have

They

larceny.

told

removal to

Announces its

many

fables, but here we concern our¬
selves with only seven of them,

AVENUE; 1

521 FIFTH

viz.:

(1) The fable that the Amer¬
form of capitalism is like

ANNOUNCING THE FORMATION OF

ican

other

-r

Municipal Securities, Inc.

This concept is

UNDERWRITE

come

of
MUNICIPAL REVENUE

ISSUES

AND THE ELECTION

important in the early years
It is based upon

WITH OFFICES AT
.

N.Y.

raw

of labor.

BEACH

CHICAGO

ILL.

page

•

Ft.

Peoria,

Lauderdale

111.

•

Coral Gables

•

Rochello,
Cedar

Direct

talk by Mr.

Dollars,"

X
I

9-4200

Miami

Your

BLVD.,

WEbster

conditions prior

Byfield in series, "You
jointly presented by
Town
Hall,
Inc.,
and
Federation
of
Women Shareholders in American Busi¬
ness, Inc., Dec. 12,
1950.
*A

and

JACKSON

141

We exploit machines, not

men.

PALM

*;'}

plen¬
materials and a scarcity

Continued
•

SECURITIES

GRAINS AND COMMODITIES

American capitalism rests on
■

4-1939

DURHAM

LISTED AND UNLISTED

operating in normal times
an over-supply of labor and

In Great Britain

•

exchanges

shortage of raw materials, while

tiful

DETROIT

EXCHANGE

Dealers & Brokers in

Europe. Their industrial set-up is
low-wage, non-competitive sys¬
with

•

STOCK

which itself devel¬

tem

CHICAGO

YORK

principal stock and commodity

and other

oped from feudalism. There is no
real tradition of free enterprise in

AS PRESIDENT

TELEPHONE WHITEHALL

NEW

revolution evolved in a monarchis¬

NEW YORK 5,

Trader

Member

free
agriculture,
whereas in the principal countries
of Western Europe the industrial
system

F. WRIGHTSMAN

70 PINE STREET,

utterly false. In

its existence.

ts framework

EDWARD

Arthur J. Burian,

country industry did not be¬

our

TO ORIGINATE. ANALYZE AND

Sully, Resident Manager

Robert F.

capitalisms.

7-7474

Hill

MUrray

111.

•

Rapids, la.

Private

•

• *

Louis,

Missouri

la.

Wires to
Kansas

St.

Champaign, 111.

Fort Dodge,

City,

Missouri

(2278)

The Commercial and Financial Chronicle

To Defend

America, We

Stalin

than

other

Chinese armies
Korea. No

are

pouring into
predict the end

one can

measures,

result. I doubt

What

World War III
how.

bogged

stress

same

Anything
may say

money.

that this

direct

re-

controls

always

In many ways this
offers

another

satellite

state

one

while

xvi

™

convinced that Stalin be¬

the

American

new
,

part,

military expenditures
necessary
by the prairie

made

parts

tit

to start in various

the. world

Stalin

well be convinced that

may

do not

have the courage in wartime to
raise the taxes we need to
pay for

military effort. He probably
we

will do

did before

as we

to UCULA XUiaHLlllgj through
deficit financing, VlUUUgll
^he banking system, thereby de-

*Ye main reason

psychological

a
—

have been

monetary but a
inflation is that

important personages in
Washington have let the
American people
oeiieve that in this
new kind of

doubt

going

start

nearly

Foreign Policy? As

can

make out it is to

Communism and Russian
Imperialism whenever it

oppose

the

what

two

should

one

having

and

years,

our
be

are

get

American

our

forward, anywhere, using the

best

industrial

cities

they sacrifice enough in the

pres-

ent, they will
scale of

living

the future have

good

that

And

tools,

machines,

plants, factories and foundries

Manufacturers,

absolutely

Association of

York

7, 1950.

City,

Dec.

en-

ioved oy tne Deonle of America
joyed bv the people of America.

*An address
by Mr. Brown at the 55th
Annual Congress of
American
Industry,
sponsored by the National

New

First

million

the

dollar

power
are

necessary to fulfill that

our

lot of talk about

men,

President said 3 million. My guess
is that before the end of the next
fiscal

years

than

armed

will

million

have
in

men

the

forces. That's one-third of

the forces

had

the

end

World War II.
c

•

second as to bnips: fortunately

°ur naval s.hips are coming out ot
mothballs in fine shape. All

^ ne^ »men tae•

Ph«;
more

^
transports.

troop

build

new

type

have

must

Third
x

guess that

naval

air¬

new

requirements.

to Airpower:
w

rXt
must

w
We

submarines.

many

craft to meet

Less

42%
than

larger, and also

million

now

our

are

un-

labor force is still at work

civilian

requirements.

*¥

It is AXXJ
my

could today deliver

0ur

i?ted activities.

airplanes and newly

men.

million

Materials:

strategic

But

about

enough

requirements

war -

World

Now

women

of the past few

these

partial

will

"big"

ation.

much tighter than in
have

employed
people

far

fewer

Fewer

now.

and

war

keep

postwar

babies

will

larger percentage of house-

will make

years

government

and

the

because

oil

industry

threatened with elimination
allowance

for

of its

discovery,

increased

We u
have

productivity.
had many m

already

most

our

important industries and they are
forcing others.
Yet such wage
UUUOlO
boosts are the last thing we L-Clll
UiC
UUllg
Wt
can
CHV7

afford

J. CI Ob

partial

war

spiral

that

could

purchasing

power of our

dollar.
Like all the
rest of us, labor owes the
country
*
"
'
'
a maximum of restraint.
Our

"Achilles' Heel"
to

Money:

point.

Stalin

Here

That's

have

have
War

versal

Our

had

might
World

the

are

materials

Stalin

what

long

of attitude

and

oil

America

since

government

velopment
other

strategic

started

need

re-

in Washington.
should help,

iron

basic
w a r.

steel

III.

two
of

rather than hinder, the

rapid deoil

and

reserves

and

both

North and South America.
on

all Catholic

Keenan

Clarey, Inc.,

un¬

derwriters of Catholic Church

Church securities

ter

century

experience

ing

over

based

hundreds

But, aside from these points, we
have, by and large, the materials
need for partial war.

securities, offer

quar¬

Fifth

specialized

war
on

financ¬

structures

throughout the United States.

will debauch

806

National

Building

MINNEAPOLIS 2, MINNESOTA
Atlantic 3522

tool

industry

multiplied its output 10 times.

preparation for World War II we
400 factories and munitions

built

Most

existence and
vated.
of

our

The

them

are

be quickly actiproductive capacity
can

factories

is at least 50%
greater today, in terms of physical
quantities, than it was in 1940.

Given

chance under free

en-

terprise, American industry can
further increase its capacity where
needed and can, in any event, take

would
ample

our

nomic machine.

and

Russia,

prices have

<1570

billion

whonnint?

blli.$ But dH Aavfto'S

before we start> as Mr- Harriman
does, the premise of trying to pay
for

this

partial

financing?

with

war

I don't think

deficit

so.

..Let's look at the record.
In World War II we used almost
our

gross national

and

war

purposes.

with
of

other
this

$300

partial

national

gross

billion

product

government

and

war

product
Federal;;

budget of $70 billion of which $50

uiui—

"*;n

billion

will

—J

used

*—

"rn

for war, we
one

quar¬

Should Raise Taxes to Pay
We
In World War II

raised about

one-half of the cost of the
favpt3

th-

taxes" In thls Partial
Continued

war

war>

w;th

war

page

destruction

but

Stalin
a

has

poor

TRADING MARKETS

eco-

We have limited
the

greatest

money,

bring it down

economy.

for

easy,

manpower

out

expendi-

$70 billion,

and

currency

military

our

budget of

cut

into Stalin's hand ** accepting,!

his

matchless

our

Then

^Holeproof Hosiery Co.

eco-

Minn, and Ontario Paper Co.

Newport Steel Co.

and

wages

♦Prospectus available

real meaning

than

they have to the inmates of
Sing Sing prison. But, in a capi-

talistic system, money,
wages and
prices are the very essence of the

WilliamA.Fuller&Co.
Members• of Midwest Stock Exchange

market place where
people

freely
exchange
goods
and
services,
where they decide
between de-

ferring purchases
'n2

capital

and

to Machines: In the last

machine

our

plants.

KEENAN & CLAREY, Inc.

Machiavellian plan

wreck

Federal

tures which would

nomic machine in the world,
Why is money our "Achilles'
Heel," our weakest spot?

oil

means

unnecessary

the

to toss a series
Of Korean wrVni
Z hoping
°t Korean wars our way, w!ina
that through deficit financing we

war

4,000,000 men
is right then

billion

devised

has

partial

will be using less than
ter.

Seventh

half hinted

this

unless

for

manpower

and

strategic

Markets maintained

That

program,

remaining

than

some

military cost, including aid to
allies may well be $50 billion

half of

the

should

Washington

$75 billion

economy,

inflationary

govern-

Let's do
in

one

the cost

penalties
are
two-fold—a
rapid rise in costs of the defense
an

sacrifices

I agree with
all

year as an average for the next
two fiscal years and
maybe more.

The

and

yet

wen

a situation ready made big

drilling and depletion of oil wells,

CHURCH and INSTITUTIONAL FINANCING

the

wjves out 0f the labor force.

This is

and

If my estimate of
the armed forces

our

young

reaching military and
working age. And the huge crop

freo

is going to be.

un¬

are

re-

entire

spending by the United

what

1940.

has

It is

vigorous

the

Is it necessary?

war

needed

was

figuring.

that only a par

peace

States.

Neverthelss, let us not get complacent about the manpower situ¬

reason

011 consumers now.
We have geen the gteel
}ndustry
is

into

the

advisors, Mr.
Harriman, said "The

says
except that we
plan to have more deficit

ment

economy"

war

our " weakest

11 harder
it

drawn

were

But I hope

from
of

pro-

adding

one

closest

young and old."

men.
During
II, at least 5 million

done

got to do something and our failSUL
\° a°
"UrJ
to shut off some dnfa the boom
of

million

War

work.
of

could

the equivalent of

duce

Associated

Nov.

that

more deficit governspending in the United

ment

week from the present
average of
41 hours to 48 hours for workers

have

haven't

it.

ure

harassed

enough,

world, with

increase in the length of the work

During

the past five years we have read
a
iot about stockpiling
materials.

isn't

repeatedly

inflation and

yet,

reported

Averell

States

without

things they have been get-

SOme

wage-price

fight a dozen Koreas
instead, then we need a vast pro-

avoid

dispatch

Atlanta

ting since world war II.

wreck

Fourth

Press

armament

President
Secretary of the

And

price

must

as we go.

must

Hon may possibly be required to
help arm our allies. These 9 mil-

icy

said

deficits.

Another 1 mil- President's

consumers

would be

Treasury Snyder have

re-

Steel

money to pay
Truman
and

may

production and

war

own

stupidly playing right into Stalin's hands to
try to finance this
partial war by failing to
raise the

population,

our

and when it comes,
In my o p i n i o n

employed, but the great bulk of

atomic bombs to smash the industrial cities of Russia.
And I hope
we have plenty of bombs to do
the job.
But if our national pol-

tax

Bolshevik promise.

63 million is much

about

additional

Military Manpower:

then 2xk
million,
Then, just before the elections, the

thing Stalin dreads is

the

yea!

of our population,
civilian work force of

our

faced with may last 10
years
or
20.
And
during every
that it lasts, we must
provide not
only what is necessary to win
thd
partial war, but we must
be preparing to win World War III if

42%

about

Today

inflation

are

to Civilian Work Force:

Puppet-War

in-

1940, our civilian work force,
including agriculture and 8 million unemployed, was 55 million

and

to defend America and to

money

defend

retrained

moves

over

gram of new

Mussolini, Hitler and

Russian people for 35 years that if

our

requirements

Tojo.

1SSL
?
ite.same old Russia smashed absolutely flat, for
sys^m of controls that we had the Bolsheviks have promised the
ip World War II.
£ What is

Requirements

best §uess of what
military,

World War III with the lesson in
front of him of what
happened to
the Kaiser,

The

not

lion must be taken off other work

guess-estimate,

So, without having any "inside
information," I am going to give

not

only

vwv.

nf World bauching our currency and bleede*
18 jH? r
ing ourselves white. Stalin is an
requlres a different Assiatic. He has infinite patience,

—•

businesses

our own

The Military

the

-go

people have

KSfES"*

if its

—even

two

not the fortitude to give up nonessential expenditures to offset, in

thinks
a

after
a

lieves

our

jjears. Who knows?

having

Stalin
us

fires he plans

consumers.

qiay last three, five, ten

make Plans for

basis to

some

and

; I disagree with this view. Ob¬
viously the Cold War is over. Now
vire have a partial Puppet-War. It

We need

armed forces to

men,

rationing for

next year.

Congress to meet

increasing

within.

peace.

eivery kind—now. They advocate
the. freezing of wages and
prices,

ijtr

for

We have heard

from

Russia itself remains ostensibly at
Lewis H. Brown

all-out

xire* be,*

made,
Stalin

Korea

materials, machines
$ome people believe

and

Hitler

to accomplish

are

against Stalin's plan.

through

Starting a
huge mobili¬

Quires

that

probably plans to toss at

are

sation of

not

economy

morrow.

are

rency—to let inflation wreck the

be made
obsolete
by
events

Stalin

people in the
losing war.
likely to make the

mistake

our

that the way to destroy a capital¬
ist country is to debauch its cur¬

one

today

may

the

Policy?

dictators cannot hold

through lack of patience.
has often quoted Lenin who said

that

over

civilization.

and strain of

Stalin

down

in China. It is

£lea

Stalin's

that

requirements

how

the loyalties of their

3ure we do not

want

knows that

its

Sixth

leaders

reduc-

goods,

need to do to^

say we

10 to 15%

eluding, of course, food.

for

war

released

that brought the value
of the
dol
lar down to less
than 59 cents
But this partial

roughly assume that around 8 milBut, as businessmen, we can't. lion civiliari workers are
required
keep on waiting for an election to to devote their entire efforts to

successfully to oppose
aggression that threatens to
our

financing

it.

capacity,

if Stalin wants

what

be,

enslave

losing

Communist party.
what do
our

opposition at our disposal, and within the limits of our
this

leaders
have
not
yet clearly told the
American people what our plan is,

and prices."

means

machines—his

his

I regret to say

non-military economy, universal military training, lower
tariffs and, above all, higher taxation
up to $25 billion. Says
improved tax pattern will help win war and concludes "we

What is the situation that con...a.
fronts America today? Communist

threat

prevent Stalin from succeeding in
this partial Puppet-War?

wages

would

Washington

for current "Puppet War." Says present war
continue for two decades and annual budgets

quit raising

objective for

the

Now

care

must

But

industrial potential—well, that is

among

military require-

consumer

the

Advocates,

the

all

tion

what

Opposing freezing of wages and prices as well as rationing
for consumers, leading American industrialist
holds, despite
heavy military requirements, American industry can increase its

reach $75 billion.

care

average

moment.

destruction

By LEWIS H. BROWN*

situation may

could

ments of this partial Puppet-War
with' perhaps no more
oh
the

one

Chairman of the Board, Johns-Manville
Corporation

may

that

him to turn from his

Mast Avoid Inflation

capacity to

knew

exterminate 30,000,000 of the Russian people, it would not cause

Thursday, December
14, ig5Q

...

enjoying

209 S. La Salle Street, Chicago
Tel. DEarborn 2-5600

and accumulat-

spending
goods,

money

and

iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii""'

where

Trading Markets

^decide between risking
aav

®s

their
them to the

We have gone through two
World Wars in a little more than
30 years. Our national debt went

^rom a little over $1
about $280 billion at its
World

War

with

some

brought

Deficit

for

billion

Alabama-Tennessee

government,

months.

Tele CG 146-7

Natural Gas Co.
Dan River Mills

Rich., Fred. & Pot. D. 0.

peak,
lasted

financing,

even

effort to control
prices,

inflationary boom

and

bust.
World War II lasted almost four
years and the torrent of deficit

Scott, Horner &
Mason, Inc.
Lynchburg, Va.
Tele.

immiiimiiiimimiiiiiiiiHiuiiuiiH

Volume

172

Number 4968

(2279)

V. The Commercial and Financial Chronicle

RICO, II. S. A,
MEET THE

SOUND

SECURITY

* Puerto Rico is

part of the economic and political system of the

United States.

The Insular Budget has to be balanced in accordance with law.

long uninterrupted history of balanced budgets

proves

can

done.

record goes

YIELDS

nor any

of its agencies

been delinquent in its obligations. This

back to the Island's discovery by Christopher Columbus.

Insular per capita

** securities issued

debt of only artaihd $13.00. j

so f ar

ities^ and its agencies

ATTRACTIVE

■

* Neither the Government, its Municipalities,
have EVER defaulted

EXEMPTION

•

•'

by the Insular Government, its municipal¬

are exempt

from local and Federal taxes.-

The yield of Puerto Rican bonds is comparatively higher than ot^er
bonds of similar credit rating.

Consult your
or

Security Dealer

write to

GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO
SAN JUAN,

Fiscal

Agent for:

PUERTO RICO

The Government of Puerto Rico arid
its 77

Municipalities

The Puerto Rico Water Resources
The Puerto Rico
The Land

Authority

Aqueduct and Sewer Authority

Authority of Puerto Rico

Other Insular Iristrumentalities

posits have been opened recently,

Economic and Financial

■WwWWMMiW.

1MI1B

important minerals has proceeded

slightly superior to that
of last year.
For the first seven
months of 1950 copper, lead and
zinc
output was, in the order

Conditions Affecting Canada
By II. A. STEVENSON*

financial developments.

Says rearmament de¬
mands have already stimulated Canada's activities and busi¬
ness

in coming

progress

year

may

anticipated.

152,000

89,000

tons,

tons

Vice-President, Standard and Poor's

178,000 tons.

tons and

the

Cites

Asserting coming expenditures by government, consumers, and
business, will determine pattern for entire economy, Mr. Shell-

162,000 tons, but during

present

bach foresees:

(1) production dip in first quarter with later
stride; (2) price
stability during first half, with strength in metals offset by

prices of these

year

risen

metals have

three

being

substan¬

healthier international situation and lands action of Canadian

tially,

Government in

recovery

quoted at 39%, zinc at 75% and
lead at 8% above the prices in

pegging rate of Canadian dollar.

pegged rate encouraged rather than deterred

Contends

currency specu¬

force

lation and concludes internal financial condition of Canada is

exceptionally strong, with U. S. dollar
Unfortunately, and

are

well aware, the business world for

the

right

much

at record

reserves

direction

look at

our

conducting its affairs in

currently

nickel fell during

period of the year to
from 77,000 a year

tons

earlier, but

through temporary price weakness.

coincident price in-

should ensure satisfactory

crease

armament production hits its

sporadic weakness in foods, building materials and textiles;
and (3) 1951 net corporate of $17-$19 billion against
$22
billion for 1950. Although there may be urge to lighten inven¬
tories after this year-end, advocates holding on where
possible

year ago.

same

71,000

provides

amplified when

copper

The output of

the

high.

number of ■
months past has

Ever

since

—

country's accompanying

own

—

—.,~0

atmosphere of

been

anxiety

has been

and
apprehension
to

ity,

whether

national

tics

k;..»

„

with

~.r

and

plenty

High Rate of Employment in

prices

The

for the

and

apace
much

major military
be¬
ex¬

labor

were

our

force

history.

Out of

were

mocracy and
those of Com¬

other

all

seemingly lethargic response to
the step by step communistic infiltration and domination of vari-

Far East. werefinally startled into
rliiwt

nrtinn

tnp

relieving that country

largely

on
the shoulders of
United States, who tackled it
with admirable
energy and suecess.
We must hope that this

the

fluctuations

due

cli-

•

po-

freedom of other countries
further

arrest

communistic

aggression and enhance the

highlv

the gold flow,
car

will

be the

b£

ea«e

imper-

ins Canada

domestic supplies of which in the

5nrr

on/1

inrliicfrvr

ifc

voIiia

anv

recession within moderate
propor-

ization of Alberta's oil.

tions.

section of

Canada's labor

^d
^

was

income

for

the

$7,130 million.

was

mTs7K0

{i^,

-f

of 1948

for

llion

Lewis L. Schelibach

steps

by building

up greater mil-

itary supplies and

power.

^ against this background of

international

political uncertainty.
recognition of the fact that

and

the demands of rearmament have

already stimulated Canada's
ities,

that

should look

year's business
At the

the

activ-

months oi this year

estimated to be

high

Korean conflict, many

ifSd^anksTar^eN
progress

debili-

rehabilitation.

repaired,

and

financial

with

much

greatlv

conclusions. There

own

living

dement
economic

inated

Some

economists

and

gradually elira-

modified in

construe-

way, although in the realm
official
business
supervision
room

alleviation,

enterprise

remained

greater

had

for further

freedom

been

for

generally

agricultural

crop

ex-

satisfaction

which

jhealtfay international

roUghlv

fiel(1

jqq million bushels

ousneis more

.ear s outturn and

^ii0n
;thio
W,thm \
a
ing

eisJa°°<e *re
week

time

third

^
°r

1?~

rai,n

tW0 of hanest"

damaged
its
quality
Of the 1949 crop, 84.8%

this

before

year's harvest

^ te'ati

needs

will

than

did

last

years

one

from

F^ovi"ce0^ ^at^e"
and gasoline.
It is

AV ^

this

progress

by Mr. Steratso* at Hte
Wfrttaf of tfee Skareholders «f
fiarckrs Baak < Canada), Mwtred, CubmU, Nov. XI. 1956.
I

Wisconsin, for storage

Superior,

delivery

subsequent

throughout most of Ontario.

the

The

other

crops

higher

30,

than

last

send

one

true

by the ad-

of the early Caesars:
has the economic

before

outlook been

confused

not

exempt

it is

today."
That
the

does

duty

trying

from

penetrate

the clouds; of

setting up tentative
patterns, based upon certain as-

will receive

pipeline.
Alberta

produces about 95% of

canaaa s oil and put out
Canada's on ana pui oui

barrels

lion

the

for

14.3 milmu

first

seven

months of the year. The January

approximately 90.000 barrels dailv

*
and tms
...

can

Oil Companies
ve>'

be further increased

tion expands.

—

Financial

sau,

of Nas-

corner

Pajis°n between used thirty listed
the m
mdustnal stocks
jones

con¬

page

890

Averages and the thirtyover-the-counter
industrial

over

market perfonnance

eleven-year period—National Quotation Bureau,
Inc., 46
Front Street, New York 4, N. Y.

Puts & Calls—Explanatory pamPblet—Thomas, Haab & Botts. 50
Broadway, New York 4. N. Y.
6%

Better—List of

oil equities

—Dreyfus

yielding 6%

^nnld

reserves

Pnni3?h

Co.,

iho

meet

This substan-

to,a re-

million to $6.3
million in the wheat participation

better

Broadway,

our trading

Prairie farmers.

memorandum

mining industry has

con-

S150

aofireys

ysS^Hayden

ore

de-

annually.
J

Continue

Over

page

Chicago, Rock Island

L
^

prosperous path ana, although no

h*
.

m Wisconsin,
egraph Corporation

N. Y.

Kendall Company—Bulletin for
dealer<; ftniv—Remer
Alitchell &

SjfS

South

2ft8

streef ChTca^,

Salle

Long Island Lighting Company

—Analysis—H.

& Co.,
York 4, N.

Hentz

Beaver Street, New

Peoria and Eastern Railway con¬

solidated 4s
&

—

Company

York

Circular—Freeman

Broadway,

New

6, N. Y.

Corporation

Pickering Lumber
—

Leaflet

—

Barclay
...—..

Investment

—

Co.. 39 South La Salle Street,

Ch.

inoi

Pacific

Co.—Analysis—Gerstley,

Northern

^nuare

Bob-

Seab"rt

Air Line

Kai.road WaH St»

Circular—Cohu & Co., 1

New York 5, N. Y.
§

Therm0

Raymond

Railway Com-

Analysis—Smith, Barney

c£hwffi

romnany—

South Broad

,ladelphia 7* Pa-

Great

D-

Riverside Cement Companj &

Stone

Sffefw York^.^V.25

figure in the neighborhood
million

Manufacturing

Modine

caS° 3,11L

Greene and

—

Sunstem & Co.. 121

improve

°v

37 Wall Street, New York 5,

Railroad

xorK o, jn. X.

account with the United States is

eventually

expected

payments

Canada Drv Gin«^r

produced oil for oil hi$herto im.

Street, Milwaukee 2, Wis.
same issue is a brief anal-

Reading
Tube
Corporation*
Analysis—Aetna Securities Corp.,
Bost°n & Maine Railroad—Spe- 111 Broadway, New York 6, N. *•

cial

By the subsUtuUon of this home

P°ried from abroad,

•'

now*

which

5,sis

selected
or

barrels,

Mason

tation Bureau Average^ both as Street. New York 4.

very many years to come.

period

International Cellncotton Prod-

nets

International Telephone and Tel— Analysis —
stocks used in the National Quo- Bruns. Nordeman & Co., 60 Beaver

for

same

In the

Over-the-Counter Index—Bookshowing an up-to-date com-

country s normal requirements for Co,

mines

the

are

let

at $871 million, which is about
134% telow the 51,069 million

new

factors to

today

Continued

New York 15, N. Y.

being adced to constantly.

million

equalization

major

sidered

sur-

New- York 4, N. Y.

plotted

year

Today's Major Factors
The

firms mentioned icill be pleased
the following literature:

of 30 companies in 1950—Pe-

York. Pine Street

213(1 when P'P^Lne aecommoda-

total

corresponding

developments alter
assumptions.

the basic

interested parties

the Dow-

Manitoba refineries

Actually

from the sale of farm
during
the
first
six
months of this year was estimated

Auwal

"Never

coined

was

visers of

1950.

It is understood that the

their supplies through the same five

products

important

occupy

Company—Study in current
troleum Department, Chase Na- issue of "Business and Financial
the >ear- crude oli wlU flow t0 tional Bank of the City of New Digesf-Loewi & Co, 225 East

farmers

and

^ J}1111 °

?.r

Total cash income of Canadian

the previous

when

statement

™

oil

the

of'the Re^na'refinerS'that

with

wan

rels has since been stepped up tc

will

Recommendations and Literature

flow from Edmonton to

to July daily flow of 70,000 bar-

wheat

of those who

Dealer-Broker Investment

Regina
in sufficient quantity to meet the
a

prob-

Income

minds

Kremlin,

the

Metropolitan
American Statistical Association,

been opened and there is already

ability this year's bigger but deteriorated crop will produce less
revenue

the

W BusineS'Eco!

The first

Ldi^Pisouth-west Ontario refineries for
*
^ili '
processing
and distribution
distribuUon

Our
*A»

pig

Meeting of
T>jvision, New York

«P °f Lake Superior, has

has been somewhat of and

l^ughtaboutand has been
mtentahonal ^Jeclme a
commerce
duetioa from $213

trade and

p&nding fast and profitably.
The

spe-

swore

Fafl Forum

pipeline, which, before

five

much

were

^e3r but tnarketings of livestock
Compared w ith 900 wells in
Tax Exempt Bonds as Invest¬
attained, are expected to be riightly lo\ver, production at the end of last year
ments in the^Vresent irTfiTtVn^T*"
^dhnu-intr and
during the last half of the
"
r
present Inflation—
year, at prices lower than in 1949, tore are n°w 1.500, and the num- Beprrnt of address by Phillips

restrictions

controls had been

re-

our

better degree

stability

standards of

war

smaller

production

and

eters

called upon to read the ori-

are

ental

barom-

draw

ing Canadian oil to the western-

Europe, the old

conflict's ravages had been
largely

make

in their internal

In most parts of

better paid.

severely.
graded No. 3 or better, but it is
of the
expected that only about one-

T: ^
Aid and determination, made

stored

and li certainly has "never been

time of the outbreak of

countries which had been

cedent

the

progress.

few

other

the end of the year, will be carry¬

For

^^rthe'^i^TSl

wheat

to take

loadings

and

guessing

now

logical problems by pacific and
3
ful1 ->ear 11 wlU
exceed S8.000 minion. Labor has
conciliatory methods. It would be
Vnever been more fullv employed
,

of trade,

ance

the

that

activity

pros-

Ta£

look at

and

western nations,
The " year has witnessed great
possible strides toward the eommercial-

probable

the greater industrial

pertaining will keep

defend, if whole

nped be. at great sacrifice, the

was

loans, the bal-

0.74%

conditions, this recovery is United States are shrinking under
very gratifying. While it is antici- ever-increasing demand, emphapated that, for seasonal reasons, sizes the potentialities of our min-

practical demonstration of demo¬
cratic determination to

that,
had

matic

considered

could be played with a fair
degree of success. But now, we

commercial

Nov.

burden

„

•

iter allowing Tor have in such abundance but the cial fetishes from time to time: sumptions, the patterns to be altered as actual

employed, and
normal

only

1932.

words,

standardized

Before

but 103,000

and

au«

complicated bv the
necessity of guessing what Washington was going to do next. That
was

game

ever

since

now appears

Our country's mineral wealth
munism.
of the total Canadian
H. A. Stevenson
population. has been but barely tapped and
The demo¬
Compared with the position at the the growing dependence of the
cratic country'
delegates to the end of March this
year,
when United States on Canada as a
United Nations, after some years
428,000 persons were reported un- source of vital metals, which we
or,

New D*al
,

task

has doubtless

5.324,000, there that ore will probably be forthunemployed, that coming for both domestic use and
is, 1.93% of the total labor force export before the end of 1952. -

ponents of De¬

it is

the

came

x__,_

been true

being obtained

tend, from where it

August showed that

Then
our

today." That pattern finally became fairly well

product

vious time in

Canadians

low

here

northeastern Quebec and in the
Labrador section of Newfound-

outbreak

visibility been

those

engaged in gainful occupations than at
any pre-

tics in

will

iron production, others by the demand for babbitt metal.

...

domg

and,

above

undertaken

survey

begin

Good progress is being made
toward the development of the
fabulous deposits of iron ore in

latest

lead to the

Ann

last year, is

Output is high

of recent years are

Canada

by the Dominion Bureau of Statis-

unified

customaiy

would

tween the

working

now
again,

eventually

conflict

astrous labor strike

well.

poii-

been
a

hive of intense activ-

prosperity

has

The asbestos industry
wiiicn talk of this kind with the stateCanada suffered PYtrpmplv from the nis- men^ "Never before has economic
extremely from the disnetrnnc
laKnr
ctrikp
last
VPar
IS

outstandingly good.
a

returns for the producers.

abounding.

the complica¬
tions of inter¬

tell

remember, it

can

economic performance, which has

some

Pitfalls of 1951
SCHELLBACH *

By LEWIS L.

For the similar
period in 1949 the respective fig¬
ures
were
150,000
tons,
85,000
and

Prominent Canadian banker reviews worldwide and domestic

rate

named,

President, Barclays Bank (Canada)

economic and

Business Prospects and

production of 14 out of the 16 most

been

Chronicle... Thursday, December
Ut i95q

The Commercial and Financial

<2280)

Controi_AnalySl«
Co., 113 S a

Street, Boston 9, Mass.
Also available is an

Si^pTex Paper"

analyslS

Volume

172

Number 4968

The Commercial and Financial Chronicle

...

(2281)

TO SECURITY HOLDERS OF MISSOURI PACIFIC RAILROAD SYSTEM

By Your Own Vote!
The same groupoverInsurance Company executives that
put of the so-called "Stedman Plan,, of
strove

interest at the 85% level of the last war for many years.
Therefore when you are

reorganization of the Missouri Pacific back in 1941 again
advises you to

exchange for all

"accept"

bad deal. You should ignore this

prejudiced and interested advice, just as you ignored it in 1941.
In

our

advertisements and letters to you

warned you

at that time we

of a vital defect, which they sought to gloss

that the "Stedman Plan" would

over,

•

Pacific (exclusive of subsidiaries) has present

requirements of $20,726,000 which are now totally

normal Federal income tax and surtax of

approximately 31%, whereas under Mr. Stedman''s plan only

and

blandly being asked to commit financial suicide, by your

own

vote.

by unwisely seeking to make its new securities
the'Stedman' plan would automatically

unnecessarily transfer from the treasury of the Missouri

31% of the

Pacific to the Federal tax collectors approximately

The

only quick

The above calculation is made as
in

"So

though

no excess

profits tax

effect.

long

way to get

the excess profits tax remains in effect the loss

was

"as

years

result

by Members of Congress and by large numbers of citizens

with the

operation of railroad reorganization procedures under

section 77

of the Bankruptcy Act and sharp criticism of the

forfeitures of investments under that section."
A Mahaffie Act Plan Will Preserve Your Values
The Mahaffie Act was

the Jersey

Central in

reducing the company's invested capital base by

Missouri Pacific be

of the present
company under the plan he sponsors, Mr. Stedman' would
gratuitously incur an excess profits tax liability of approxi¬

proximately $300,000,000 of the capital base

was

with the

Mahaffie Act Plan,

so can

the

brought out. Why is it that the Insurance

Companies regard what is good for the Jersey Central as
bad for the Missouri Pacific?

Mark your

ballot

REJ-E-C-T

reject the Stedman 1941 plan was rewarded
On

which have since aggregated $65,000,000.
help of such savings that the following debt

Behalf of the Missouri Pacific Railroad

retired:

Iron Mountain

RFC and

$14,000,000

bonds—....

34,500,00028,000,000
5,800,000
2,300,000
6,400,000

—

RCC.^

Bank loans
N.O.T. & M. Incomes

Other miscellaneous
total

$91,000,000

31% back in 1941
45% tax may seem
As the war advances, and to pay its cost in the peace that
follows, the railroad may face taxation of earnings after bond
now

period of a few months was brought

1941 earning

Underlying bonds..

Just

of Section 77 under

by savings in taxes
It

passed by Congress in 1948 with the

idea of correcting injustices under Section 77. Just

greater. In

would obligate the
company to huge excess profits taxes which are not incurred
under the present capitalization
By blindly scuttling ap¬

report, to wit:

of increasing dissatisfaction over a period of

out

substituting stocks for bonds, Mr. Stedman

passed by Congress in 1948 for reasons

best described in its Committee

Pacific because of the 'Stedman' plan becomes even

Your decision to

the Missouri Pacific out of the

readjustments necessary to proceed under the Mahaffie Act.
The Mahaffie Act

express

mately $7,000,000, based on

Reorganization-Only

together immediately to sponsor the simple

Missouri

"reject" the present plan, and for all parties at

interest to get

$10,696,000 difference in bond interest exemption, or $3,300,000.

were

One Quick Way to

$10,029,174 offixed and contingent interest exemption is pro¬

stocks instead of bonds,

wholly deductible for tax purposes by the railroad, you

are

Courts is to

"Missouri

vided. Thus,

by the railroad, in

of your bonds, the interest on which

or part

basic interest

exempt from the

not

strip the railroad of its most

priceless asset—its tax exemptions and tax base as then
constituted. We said:

are

asked to accept stocks, dividends on

deductible for tax purposes

which

the normal

Federal income tax of

looks small, some

so.

day the present

WARNING:

Insurance

Behalf of A llegliany Corporation

companies, bankers and brokers having

special interests in the situation, and especially brokers with
profits in when issued securities, will advise you to "accept11
the present plan. The chief argument of these "advisors11 will
be that the railroad has been in reorganization long enough.
Heaven knows we know it! The truth is, the present plan is not
yet so far along as the 1941
besides .ourselves,

there

whose cases,

ours,

they

were

then.

are
are

plan

was

nine

for,
appellants,

years ago;

ten other determined

in many respects stronger than

relatively important limitation-of-

An Economic Riddle

use

By EDWIN G* NOURSE*

of Economic Advisers

Former Chairman, Council

Dr. Nourse, in pointing out

national security rests

upon

integ¬

rity of both the dollar and government bonds as well as on
tanks, atom bombs and radar nets, warns a crack-up of finan¬
cial structure may result unless lear of inflation is checked.
Advocates firm but reasonable controls and priorities over

Against Inflation
By OLIVER S. POWELL*
Member, Board of Governors of Federal Reserve System

Discussing current pattern of "fluid" defense against inflation,
Federal Reserve Regulations W and X, as well

indicated by
as

draw

between

cated, largely psychological relationship of oar. price system."
Upholds credit controls and urges cut in non-military spending.

sharp

regulation

level

said in this city last May that I

physical

cated and
largely psychological
relationships pf our price system.

year,

is that Korea did not awaken us

al¬

control
a

leads

believe

uncertainty.

for

the

one

I believe most
Edwin G. Nourse

people are op¬
timistic, not so

bank control of credit

hindmost"

side.

But

But such behavior defeats itself.

much in confidence that economic

ends

actual

demoralization of the

by the mad rush on the relent¬ ahead.
less but shifting pressures of So¬
Dangers of Permanent and
viet imperialism.
us

Frankly, I do not think we have
been giving a good account of
ourselves during this past year. I
•Address

by Edwin G. Nourse, before
correspondence meeting of tbe Philadel¬
phia National Bank. Philadelphia, PaDec, 6, 1950.

The decisions we make in Con¬

the actions

and

gress

years,

prosperity

but also

Members

Stock

Exchange

Curb

Exchange

Cotton

Exchange

York

New
New

York

Exchange,

Commodity
Chicago

Board

Inc.

Trade

New Orleans Cotton Exchange
iti oiler Ercbaages

scale

coming

to. the degree of
that we and

freedom

imposed in

York

children will have.

our

H. Hentz & Co.

war

Controls

relatively brief full-

have

all the

drive

Exchange Bldg.

DETROIT

years,

the prospect of

15
re¬

If
of

are

minute

to escape
and

St. Louis 1,3fo.

much

situa¬

somewhat

is no sucn

thing

all defense move to

meet

Missouri Pacific RR.

three

per

goods and

larger price
materials

raw

four

consumers'

increase in

and

wholesale

prices.
situation

Tliis

similar.

have called for

as an over¬

prevent higher

some

sort

invoke

would

probably

restraining action

even

It became much

prices short of complete freezing

in peace time.
essential to

restraints

under

today's

prices, wages and profits. In a conditions of growing plans for na¬
peacetime economy, or one of a tional defense. The gap between
growing national defense short of available goods for civilian con¬
war
we have rejected these com¬
sumption and the supply of pur¬
plete controls and we are using a chasing power promises to be even
battery of voluntary and regu¬ larger as the months go on. Within
lated restraints.
a
year we are
likely to see a
A protective committee acting
It is my purpose this afternoon million fewer
employees engaged
for certain holders of the 5*4%
to give you a progress report on in
making civilian goods.
The

Bondholders Urged

To Veto ICG Plan

secured

serial bonds ot the Mis¬

souri Pacific RR.
owners

against

on Dec.

the

11 urged

reorganization

plan

submitted by the Interstate Com¬
Commission.

merce

26%

these

bonds

More
are

give

restraints;
you

but

amount

ac¬

brief

able for civilian goods

than

under¬

to be represented by the
committee, of which De Lancey C. Production was almost at
capacity,
Smith is Chairman, and by John.
a point beyond whieh it is diffi¬
Speed Elliott, a holder, who also cult ta
expand except by the slow
is asking other owners to vote
processes
of population growth,
against the plan.
more factories and
improved in¬
In their opinion the reorganiza¬ dustrial techniques.
Then came
tion plan approved by the ICC the Korean invasion and it set off
and the U. S.. District Court fails a rush of panicky
buying.
Re¬
to give due recognition
to the membering the shortages that de¬
rights of holders of the 5&% veloped during World War II, we

bonds.

Claims

these

interest

serial

raw' materials

avail¬

ing

employees those producing

civilian goods,* the workers in de¬
fense industries, and people in

military service;; the national in¬
might be as much as twenty-

come

five billion dollars above current
levels. -This

creases

is on the as¬
further price in¬
probable gap

guess

sumption that

occur.

The

between income and available ci¬
bought vilian goods would cause treinenabnormal quantities of merchan¬
dous pressure for higher prices,
dise—every ihing from sheets and even with no
rushed

bond¬

holders, it was contended, should
be paid either in cash or in new
fixed

production
count of the inflation pioblem and will
probably be less next year
its sources. Early in 1950 the re¬ than
today because of defense re¬
covery of business from the minor quirements.
Already allocations
recession of 1949 had brought the and restrictions in
many strategic
level of production, consumption
materials have been announced.
an J employment to a high
plateau. Yet with full employment, count¬

of these securities to vote

the

these

use

first let

obligations, coffee

the stores and

television

increase

se¬

and

expansion in bank

autcs.

credit and various forms of

unprecedented

sumer

residential

con¬

against future
should be borne in

borrowing

building, incomes. It
probably bring the mind that higher prices not only
total to a new high record of
add to our cost of living and sub¬

one

by
the

will

which

and

one-half

sult of all this

plus interest, $1,500 in MOP 4^%
general mortgage income bonds,

million

the dangers A
arbitrary

those

push for and cooperate with
overall

general

common

wage
-

stock.

units.

increases.

uses.

orities can, if applied
firmly but

round

Sources of Increased Buying

real help in
preventing bottlenecks and easing
a yery

are

faced.

Now, what of

Again, in

to analyze the
up or are in prospect.
buying power which
(1) The rapid spending of in¬
made possible this abnormal
buy¬
come and savings.
Here the de¬
ing movement which was super¬
fense must primarily be in the
imposed on a high level of peace¬
form of taxes and still more taxes.
time
trade.
There were
sources

Elects New Officers

three

BOSTON, Mass.—At the annual

buying power: Through our elected representa¬
tives, the Federal Government has

election of the Boston Investment

principal

Club, held at the University Club
Dec. 8, the following officers

total of wages, rents and income

sources of

First, current income.

were

with which

the
mili¬
tary terms, let us list the attack¬
ing forces and consider the de¬
fenses that have already been set

"fluid" defense?

from invested

elected:"

The

sum

capital whica nor-'

Edwin J. Pingree, mally just about equals the pro¬
duction of goods and services.
Moseley & Co., Vice-Presi¬
dent; Thomas Johnson, Eaton &
Second, the use of savings by
conversion to the lines of produc¬ Howard. Inc..
Treasurer; Albert P. drawing down savings accounts,
tion most needed for the kind of
Everts. Jr.. Paine, Webber, Jack¬ cashing savings bonds and spend¬
preparedness program we actually son & Curtis, Secretary: G. Fred¬ ing funds which had remained
undertake. Probably the test here erick
Edgarton, Homblower & idle in checking accounts awaitwill be whether the control au¬ Weeks..
Publicity Chairman; Ed¬
*Am address by Mr. Powell before the
thority can be vigorous but not mund J. McGreenery, Draper,
Pacific
Nartbwes*
Ranking Conference,
arbitrary in establishing a few Sears & Co.
Seattle, Wish, Dec. 8, 1950.

reasonably be

This is the problem

...

Power

Boston Invest. Cfob

situation—the

"economy" program, taxation,
credit controls, and materials flow

sharp rise

It is important

determiners of the

business

was

prices, and another

largely

pri¬

STREET

fense against

inflation

rise
in

cent

tions. The de¬

Oliver S. Poweil

There

but

In concrete
terms, I believe that
controls over inventories and

SQ9 OUVE

price

greater

tract purchasing power from our
This buying rush caused retailers
gradually lead to a sale at public auction for
savings, but they also add to the
and manufacturers to step up their
widespread disrespect for law and benefit of their claims.
cost of defense and to the problem
practice of evasion. If, on the
Under the reorganization plan, purchases and production-rales, of financing the defense effort.
other hand, controls are accepted it is
and there was a sharp increase in
proposed to exchange for each
and built into the pattern of Amer¬
The Defense
$1,000 5i4% secured serial bond employment. The inevitable re¬

ment,

and

Stix & Co

and

new

the other

1950

must
MEMBERS

services
that could not expand
with equal rapidity has caused a

fense

uncertain threat they are almost distribution pro rata to the
impossible of continued enforce¬ cured serial bondholders or

regulations of the local and per¬
sonal operations of business we

MIDWEST STOCK EXCHANGE

reap¬

the

with

is a con¬

moves

There was -also

PITTSBURGH

GENEVA, SWITZERLAND

consumers.

The combination of these thr ee

shifting of de¬

turning to a free system becomes 2.92 shares of new $5 preferred
almost hopeless.
stock and 212 shares of new class

NEW YORK 4, N. Y.
CHICAGO

higher prices

to ex .end credit

praisal of the
a gg r essor's

patriotism and immediate-danger or in capital- stock of the New
behind them. But if put on for an Orleans,
Texas & Mexico Ry.
indefinitely continuing period of pledged to secure the bonds by

ican business for 10 years

N. Y. Cotton

our

country. I refer not merely to the

economic
1856

take in

significance for the future of
economic

Established

the private sector during the next
few months will have enormous

to pay

seems* sources of

tinual

stood

Widespread Controls

use.

buying power, coupled
activity of de¬
posit accounts, When used to pur¬
chase a quantity of goods and

There

fundamentals have been dealt with

whole economy and then we are
fundamentally, but in a sort of caught in a common disaster. The
gambler's faith that we can parlay only real security is collective se¬
our past gains along to at
least curity. Unless hoarders of goods
one more handsome winning,
and of manpower agree to share
I am addressing you tonight un¬ general
scarcities, unless profi¬
der the title "An Economic Rid¬ teers abstain from making special
dle Wrapped in an Enigma"—a gains out of war, unless farmers
phrase brazenly borrowed from cease to press their claims as a
that master phrase-maker, Win¬ specially important class, unless
ston Churchill. My application of labor agrees not to demand more,
the phrase is this: Our economy more when there is less to divide,
is confronted by the riddle of how we shall never come to the eco¬
we are going to conduct ourselves
nomic stabilization, that prepares
within the deep enigma of what us for war or that would enable
k|nd of military dangers and us to remain adequately prepared
drains are going to be thrust upon over an indefinite span of years

the

gr^ate s t.

that

page

ventories

for inventories

l ine s

danger

involvement in

Continued

suitable time for

wherever

side and central

and groups to take care of them¬
selves arid "let the devil take the

By and large,

troops
sent

the

good deal of desirable influence

terials

ing

Third, borrowing against future
At times
Consumers'
it is not expedient to form a solid income.
borrowings
to buy automobiles, household
defense in depth ail along a batap¬
and
houses;
tlefront, and pliances
business
firms borrowings to increase in¬
it is necessary
military term.

common

to those defects and set us about
on prices can be
accomplished by
correcting them. Instead, it started
direct or physical control of ma¬
a general scramble of individuals

ways,
is
viewed with

New

now

The title for this address uses

time when we thought the country was indulg¬
This, I think, is a quicksand which
begin to take a retrospective view ing in the pleasant relaxation of we would be wise to
avoid unless
of the year that has passed and an Indian summer day-dream in¬
we
are
forced into an all-out
a
stead of facing the stern realities
prospective
shooting war. Control in this area
of inflationary dangers. The price
view of the
is all the more difficult because
indices subsequently have shown
year which is
price relations involve wages, and
soon
to open.
that
this
inflationary
pressure
wage relationships have both con¬
broke out actively in May and
The past year
tract rigidities and political in¬
June before Korea was thought of.
has, of course,
volvements which make any work¬
That episode simply revealed and
been one of
manlike or scientific outcome
aggravated the weaknesses that
great prosper¬
hopeless from the start. '
had been accumulating in our fis¬
ity—on the
My interpretation of our past
surface at
cal and monetary structure ever
least. The new
since World War II. The sad thing experiments in this field of price
of 1950, close to the

Says increase to maximum

requirements.

reserve

permitted would cause banks to'sell upwards of
$2 billion of government securities and thus lower their
liquidity. Urges screening of commercial and other loans.

movement and the attempt to reg¬
ulate
the inexpressibly compli¬

bank

here

contrast

voluntary credit and restraints, and higher discount rates,
further possible move, increase

Governor Powell mentions, as

coming enmeshed in regulation of
the whole physical process,

inventories, but cautions against regulation "of the compli-

This month brings us to the end

Our "Fluid" Defense

orders which discriminate sen¬

sibly between essential and non¬
essential lines of production.
While, of course, our industrial
system is interrelated in very com¬
plex ways, it is in my judgment
possible to apply specific controls
to the flow of materials at strategic
spots and to initiate, strengthen,
relax, or terminate and abandon
them without getting mired down
in overminute Tegulation or be¬

Wrapped in An Enigma

<■

Financial Chronicle... Thursday, December 14, 1950

The Commercial and

(2282)

President:

F. S.

already increased income taxes to
channel a portion of our national
income into the: purchase of de¬
fense materials and services. At
the

same

time,

they

are

eliminat¬

ing to that extent our ability to
use the same funds for the purchase of civilian goods.
A secondary line
for

the

American

of defense is
people volun¬

tarily to restrict our purchases

Continued

■

page

Number 4968

172

Volume

and

New U. S.
Securities on Market

Foresees

questions about maintenance tuations/up and down? Or should

the

fundamental

long-term

if be;

non-marketable ineligible
,

hi***

is complete casualty of

significant agreement too that fu^-

undeclared war/' and that

ture nonbank offerings should not

buyers?n

.|.

unnkanlr

officials and analyses, of the factors involved
of

this

can

invacfai*€

to nonbank investors

securities

rate

affirm the stability
the future that

foresee

outetanding

eligible

m,~~

"
^

to the

for

now.

And there is

"teps'^lwnds^ifelig-

ible at the issue dates that become

be expected in 195L

may

480,000

extremely

practical

ques-

stunningly

due SePt- 4, 1951. The issue was

at later specific dates, tions, Miss Porter suggested that Piaced at. par.

tton^thiT^re peSnenttrln: ^vings bankers carefully weigh

clared that tte

the bond be

arguments pro and con.

The

''lho"Ld

Wilbert

Campbell,,

"""
As

invest-

together

proceeds,

used

Wilbert H. Campbell

with

$28,420,000 cash in Treasury, were
retire

debentures

marketable inelig-

$93,900,000

Angeles. Prior thereto he was
with Sutro & Co. and Buckley

Los

Brothers.

With Waddell & Reed
(Special to The Financial

maturing Dec. 1, 1950.

~""

of the close of business Dec,

1,1950, the total amount of deben-

badhewsible—a new long-term V-k offered ment dealer ofNewark, N. J., died tures outstanding
Asia makes it at par and subject to price flue- suddenly at the age of 64.
$507,470,000.

amounted

program

will be vastly

expanded and
speeded up.

"Pay-as-you-¬
is a com¬
plete casualty
go

the

new

undeclared

war," she said'.

Sylvia F. Porter

"There really
than a whisper of a
chance for it before the Red China
Wasn't

assault; there is none now.
In
addition, the chances that controls
and tightened
for a sharp

hastened

enhance the outlook

the supply
available to sav¬

decrease next year in

investments

ings institutions outside the U. S.
Government

market.

bond

The

two forces point to the necessity,

the feasibility and the wisdom of
a

large-scale sale of longer-term

securities to nonbank investors in
calendar 1951.

And the questions
actively debated in toplevel official and private financial
circles today concern the exact
timing of the move in 1951 and
the terms of the offering rather
than the program itself."
Miss Porter emphasized that the
Treasury' cash position is sufficiently comfortable now to permit
it to postpone major deficit fi¬
nancing until summer. "Not un¬

being

til then will the multi-billion dol¬

lar gap between income and out¬
appear, even though
ment commitments will
go

than

greater

rearma¬

be much

anticipated just a
At that time also,

few weeks ago.

however, the lag between remobilization orders and payment will
be

disappearing and the speededwill be having

up arms program
a

full influence

the supplies of

civilian

goods and of non-U. S.
investments. At this moment, mid1951 appears the most likely date
for the first important deficit fi¬

nancing
phase,"
The

this

prospect

crucial

new

the

most

practical importance to all savings
banks, Miss Porter stressed, on
several
counts.
Such financing

obviously will directly affect the
composition of
bank
portfolios

The

Telephone Is

Essential Part

and of bank

portfolio policy.
It
obviously will influence price
movements
in
the
government

also

market and in allied

bond

kets.

of the Production Job

of the pro¬

And since

posals
-

volve

some

being made
the

basic

government

American

and

market

economic

mar¬

terms in-

structure

system,

the

The

production job is bigger than ever

the

she

these

days and the telephone is right in

urged banks to inform themselves
on the
discussions now in prog¬

the middle of it.

ress and

needs of the Nation

the points

submitted
that they may formulate opin¬
ions
and express them through
on

More and
are on

the

the lines.

their representatives.

"There

significant agreement
among Washington fiscal authori¬
ties

that borrowing through

non-

Wherever things are made, whenever
someone

the

something is in

hurry,

telephone is industry's top-grade

helper. It's

night, in

every part

This country
system in

the job, day and
of the land.

has the best telephone

the world. The continued

growth of the system is
than

ever

more necessary

in these times of national

preparedness.

bank

institutions is to be most
preferred under present and pro¬

spective

conditions,'*
she
con¬
"There is also significant
agreement that
the
borrowing
should take the form of longtinued.

terms geared to

a
% basic rate.
■Despite constantly recurring fears

to Reed, Inc., U. S, National Bank
Building.
,

emobiliza-

tion

Curtis

has joined the staff of Waddell

tainty that the
r

Chronicle)

DENVER, Colo.—-Leo P.

virtual cer-

consolidated street. Mr. Hudson was formerly

1.75%

1, 1950 and manager ofjfhe

-To.reach a sound judgment
these

Speaking before the mid-winter*
meeting of. the National Associa- eligible, marketable or non-martiori of Mutual Savings Banks in ketable."
New York City on Dec.,11,.Sylvia
MiSS Porter posed the key ques-

OGCSa

in spirited drives, similar of debentures 6f Federal Inter-'
campaigns of 1943-46? Or mediate Credit Banks Was made
(special to the financial chronicle)
should they be continuously on jjov 15 bv M G Newcomb New
SAN FRANCISCO, Calif—
tap, always available to institu...
.
"
+u„
venire
Robert W. Hudson become assotional buyers as the 'E' bonds al- YorK .lscai. agent Ior m
ciated with Pacific Coast Securiways are available to individual The financing consisted of $65,- ^es
Company,
519
California

you-go

will

PdClffc 608S(

A successful offering of an issue

queries among policy-making issued

our

FIC Banks Place Debs. Robert Hudson With

;2%% anchor in view of intensi-. —subject to no market risks
fying inflationary pressures, a all. whatsoever? Should the bonds be

Sylvia F. Porter, editor of "Re¬
porting on Governments, Inc./1
tells savings bankers "pay-asnew

(2283)

The Commercial and Financial Chronicle

BELL

TELEPHONE

SYSTEM

The Commercial and Financial Chronicle

(2284)

port

What New Yoik

Security
Have Accomplished

Dealers
By
David

New

York

inimical

that are, in our
to

interest.

his

forts-have

resulted

benefits

our

all

Association

Dealers

only

Synthetic Liquid Fuel

broker-dealers

-A

but

not

benefit

must of

•»

By JAMES BOYD*
Director, U. S. Bureau of Mines

customers,

our

necessity be of benefit to

Dr.

Boyd, revewiug changing patterns in nation's fuel
supply
liquid fuels. Points out domestic
petroleum production may soon pass its peak, and production

all broker-dealers.

At celebration banquet

of 25th Anniversary of New York
Security Dealers Association, Mr. Morris, its President, recalls
efforts and achievements of organization to raise standards of
over-the-counter business. Says Association supports Frear Bill
in

We cooperated

islation—our
the

principle.

This

celebration

represents

•York

Security

Dealers

tion. We feel that

raised

Associa¬

efforts have

our

the

over-the-counter

that
was

time.
born

some

industry

York

Association

Dealers

mary purpose

Security

for

synthetic gasoline, therefore,

assisted

become important, basic

may

industry.

new

organization of and in the

Association

Out of the discussions
the New

association

administration

the

our

officers

Dealers,

and

served

NASD

Board

tional

Committees

The

National

of Securities

having

ernors

milestone hi the affairs of the New

with the govern¬

ministration of the securities leg¬

Commends financial papers for publishing overthe-counter quotations, and pledges continued cooperation
with other segments of securities industry.

foresees continued shift to

in the "formulation anci ad¬

ment

the

Governors,
and

history of the

fuel to another.

one

our

has grown and changed

economy

through

Na¬

of energy

use

country is a story of shifts

our

from

gov¬

on.

the

the pat¬

years,

our

tern of energy

District Committee.

the

pri¬
Following the passage of the
of self-regulation of Maloney Act in 1937, and during

gines for rail and
highway trans¬
port, for construction

work, and
equipment has
increased
light fuel oils

for farm

the demand for the

There
tions
in

have
of

the

creased

also

oils have been used in

has

been

quantities

Changing.

electricity.

publish

During

amount of

counter

listed

first

the
eight

busi¬

the

for

ness

and

transition

the

gate and to enforce uniform

prac¬

arrangement

benefit of the

tice

From

turned

investing pub¬
lic, and for the

association met with

benefit

Investment

among
outset

its
the

members.
purposes

over

under

which

the quotation system, and at the

success.

time

relinquished

19th

our

the

tice.

lishing

two occasions upon which we did

the

r-t h

counter

in¬

the

Twenty-five
ago,

their

group of deal¬
ers in unlisted
securities

wire

long before
David

Morris

the

problems that beset

*An address

by Mr. Morris at the 25th
Anniversary Banquet of the New
Security Dealers Association, New
York City, Dec. 8. 1950.

^Silver
York

our

^i.x

1>V*

ruling
there

sibly

have

NASD,
question

not

purpose

been

with

eye-to-eve

see

and the

Uniform Practice

one

en¬

could

no one

and

lack

of
the

last

The

which

policies
Security

the

New

then

century,

bituminous

!'V

v>-.-V

shift

due

was

anthracite

and

.'•4Va»;
*
•

J?
s

*? S

A::

C'*

h";

i?-,
i

!S>H 4 H

5fci=Kj

y * £*<;

It Av*
?-

St»

r> A J

^ :

the

coal

rise

the

little later,

along

came

anthracite in the amount

their

stride

until

the

of mineral

use

accompanied by a
capita consumption—

per

B.t.u., when wood

preeminent, to about 230 mil¬

|-v?

and

highly prolific production in

several
East

C* J.

^ C-*< i.

5 S

r-e,
«

almost

*
fo

tA }v„#
£* ^

Cj,F 4

;r «

sit

Cli

=f s
i:s

$•

5>:a
-if
^

ited
or

superb Bottled in Bond, full
old, is

now

available in lim¬

from
region. From a strate¬
gic point of view, the discovery
and
development of major re¬

ts* ^ bq

>PS"*.

...

(~t$ S £t
&~~r 2
T 4

r* c

TBs

■

stores.
U

—

4.?%
?

—

supply

;

«
*
r^^"
ii5t JTy?s* A*
u
h«

J5* J2* **** * & *
5. l^i ^UE>C.«Sr

increase in

our

ments of

our

economy.

Hence, oil

have tended to
United States fuel
gas

ments

they

provide

require¬

expanded,

while

xst.*&

?s»s

Western

already

much

the

made

less

dependent
oil produced in the United

upon

States

and

may

bring
in

time

about Canadian self-sufficiency

A major pipeline to carry this

Canadian

near

oil

Duluth

may

Lake

be further strengthened.

Total

demand

mate 2^3
of

crease

trend is
we

for

and

oil

coal production has been
relative¬

even

demand

barrels

stable, except
major emergency.
of

provided

our

periods of
Thus the pro¬

total

coal

fuel

needs

declined

apparent when

of the

1940, and

capita annual

years—4.3
1930, 10.1
estimated 15.5 in

past 30

7.6 in

1920,
an

1950.

from

78% in 1920 to less than 40%
The share of
petroleum
increased in the same
period from
15% to almost 37, and that of nat¬

billion barrels—an in¬
more
than
10%.
The

consider the per

1949.

Shift

The

been

shift

Fuel

in many

Patterns

fuel

...

ps* ti*

has

patterns

great as to cause concern

quarters and to

consideration

call for

have a
this
regard.
trend Among others, the United States
gas fuels Senate, through the Committee on
has been accelerated
by the con¬ Interior and Insular Affairs, has
struction of
many
long-distance expressed a serious interest in our
pipelines to bring natural gas to energy resources. This Committee
major consuming areas and
by the of the Senate is currently investi¬
ural gas from 4% to

19.

over

all who

responsibility

Since World War
II, the
toward use of oil and

utilization of depleted
gas and oil
in the
Eastern States as

recommendations with
the

fields

reservoirs

ported in

summer

for

gas

trans¬

months to aug¬

gating the problem and may make
respect to

de¬

policies that it considers

sirable and necessary.

ment

supplies during peak demand
periods in winter. Liquefied

and

gases,

other
or

used

Until recently
tions

heating

for

each

household purposes in

remote

areas, are today
major petroleum product Rapid
expansion in the use of Diesel en*An

nual

ad«lr«$s

Met tin-

Mechanical
Nov. 30,

Dr.

Engineers,

1950.

Boyd

the American

New

the

An¬

Societv

York

City,

were

policy considera¬

based upon a

individual

fuel

study oi
industry,

has

to be realized, however,

that

ignoring
come

-r-t

have

Dominion

pe¬

*f?

petroleum

so, the growth products is expected to exceed 2.4
natural-gas sup¬ billion barrels in 1950—a gain of
plies has been faster than the rate about 9% over 1949. Domestic de¬
of growth of total
is
estimated
at
approxi¬
energy require¬ mand

rural
=

the entire

troleum

:£5T

serves

Canada since 1947 have great im¬
portance.
These new sources of

storage
rac

\
*

<?«L

quantity—100 Proof Bourbon

Rye—at the finer

J;S>

3-:i fjc f j ♦ «f..
i-SH ?K f^C j &
T#,

Middle

in petroleum and

J*s.

the

supplies

over

£31

t&KS|

brought

that remote

total requirements since then. For
the past 30 years or

portion

SJJ»ir» isf

t'•%.

countries

has

shipping point
Superior is
nearly completed. In Mexico,
changed drastically during i the
recent gains in exploratory activ¬
first half of the 20th
century. Coal
provided b.y far the greatest por¬ ity by the government and by
sources
of United States private
tion of our total
energy supply in
1920, but petroleum, natural gas, capital suggest that the strategic
and water power have absorbed supply position of North America

for
i

AVil

8 years

II,
period the production

new

h
H

ft** *

This

War

liquids extracted from natural
has almost doubled, and im¬
ports
of
crude
petroleum and

oil.

The pattern of energy
consump¬
tion
in
the
United
States
has

and
r--

Sat*

World

gas

began

lion B.t.u. today.

HyS ?-•*

5K*S

since

beginning

industry;

hit

rising

since
of World War II.
production of crude petro¬

in this

coal

from 100 million

<;\J

particularly

years

but

about one-fourth of the total. This

«-

vv-Vf*

jv*

v^cjr

changes,

early

were

really

<SN?i

sup¬

undergone signifi¬

take the market away from wood.

20th century. The
fuels has been

the

also

the

Beginning about the middle of

selfish

have

cant

it.

pos¬

sincerity

our

be¬

start, and did not

ply

leum in the United States
has in¬
creased by over one-third

mineral
were

of
energy
supplied.
Petroleum
and natural gas made a somewhat
slower and later

i'Sc

million

The elements of petroleum

substituted for

James Boyd

outrank

largest

our

motor vehicles.

ing rapidly

the SEC

bituminous

tx.K I?

consumed

The

fuels

anthracite

IV?

generating

the

then

interest.

was

and

far

petroleum continues to

ergy; but even

While

not

in¬

fuel

to petroleum
products have about
York
tripled in volume. The relative
Dealers Associa¬
accepted and followed tion has followed over the
Although wood had furnished over importance of imports is therefore
years
by the broker-dealers throughout were formulated by those who 90% of the energy during the first much greater now than at any
half of the century, it contributed time in
the recent past.
the
country
generally.
It
al¬ have served as Governors of the
only a little over 50% during the
Venezuela is our leading source
Continued on page 87 second
ways has been our policy to sup¬
half; by the end of the of foreign petroleum, but in re¬
century it was supplying only cent years development of vast
tions

<V-S>

services.

rulings on dividends, when issued
contracts, and other trade ques¬

met

to discuss the

were

United Press in sending our quo¬
tations throughout the nation over

dustry.
years

quotations, as
Associated
Press,
and
our

our

source

fuel

Prac¬

tion

was

chief

func¬

Uniform

The financial editors of the New
York papers were more than gen¬
erous in their cooperation in
pub¬

century,

wood

same

all

ers

decades of the

to the conference

broker-deal-

the

daily quotations on un¬ Bankers Conference to the NASD,
securities, and to promul¬ our association entered into an

installa¬

and
years,
of heavv

consumption

its

assemble

record

postwar

standards of

been

space-heating equipment

the over-the-

members,

195o

ef¬

Our

members,

those
opinion,

oppose

well—we all know that that which

City

Co., New York

Security

beneficial

measures

President,

all

investor,, and to

benefits

DAVID MORRIS*

Morris &

the

Thursday, December

...

all

the

others.

cannot study any one

fuel in¬

dustry apart from the others an
get meaningful answers. The trena
in technology is toward expanding

Continued

page

172 .'Number 4968

Volume

The Commercial and Financial Chronicle

"<"'(2285)

Effect

Implications of Fieai Bi
HON.

By
•

„

ALLEN

FREAR,

Denies it will cripple over-the-counter market

Says securities traders should

the

get

point

of view of the

in the

people

business

which

dustry
is

in¬

that

have

of the largest

one

registered

ever,

Company

obvious to

seems

America,
know

his

condition.

great d

e a

1 to

gained

first hand dis¬

cussion

and

exchange of
ideas

legis¬

lative matters.
The

Frear, Jr.

J. A

Sen.

invest¬

ment

industry

is and must be

vital part of our great tradition

enterprise.

free

Perhaps

compliment lies

greatest

Russia has

tact that Soviet

its

the

such

organization. And it is upon you
dealers, who make up the bulk
major part

of the industry, that a

responsibility for the

of the

servation of

our

system falls. It it

accident that

freedom

date,
of

incidence

pre¬

our

traditions of

roughly, from the
trading stocks and

bonds. The Dutch East India Com¬

which

pany,

organized in
called the first

was

1602,

has been
modern corporation. Under its flag
Henry Hudson explored the river
on which this great city stands.

Perhaps this proves that we are,
as"

Communist

the

claimed,
'so, I

nation of stock-jobbers.

proud,, for

and

men

the

country.

And

provide

our

to do

of
our
stresses

the

today
upon

Our

gross

according

na¬

personal consumption and $38 bil¬
lion

represents governmental ex¬

penditures, leaving
lion

which

Since
new

the

into

Korean

war

impetus has been

vestments

equipment,
and

$48 bil¬
investments.

some

means

business

inventories,

demand

durable

producers'

construction.

new

notice

given in¬

this

All

for

and I know each of
you
your part.

capital

will play

see

big problem in meeting
demands for financing, as I

it, is to increase the interest

of the
public in direct
as

distinguished

investment,

from

their

in¬

direct interest
through their bank
accounts

There

and

are

insurance

several

ways

5b ^ne *s ky

policies.
of doing

unsound

niethod of the
tip, the rumor, the
hunch or the
promise of an ever
rismg market. The other is by

selling

American
American people.

I Relieve
will be an

Who

the

bill

enterprise

I should like to

discuss

How¬

assure

you

offer

toward

their

solution.

An amendment to the

bill sug¬

un¬

gested

by the Securities and Ex¬

ferences

between

the

sion.

should

definitive

proposal

for

matters to be voted upon

investors

stockholder

protection of the over-the-counter

Management

need

market in securities

competitors,

not suited

Company of Canada

as any

Reynolds

Company, competitors with
much less public investor interest.

for

Yet,

reason

one

Congress

has

not

yet

another,
equalized

this state of affairs.
As

know, 'the bill
require
all
corporations
with over $3 million in assets and
over
three
hundred
security
you

the^SnT

an.address by Senator Frear

page

COPPER.

■

Most useful metal

known to

man

nancial

condition,

periodic reports
with the Securities and Exchange
Commission
disclosing their fi¬
to

and

make

available sufficient information to

stockholders to act
with
informed
judgment when
called
upon r to
execute
their
proxies for corporate meetings.
In addition, there is provision
permit

their

resembles

mighty Atlas of mythology
For

application of certain re¬
strictions
upon
the trading ac¬

strong

inside information. However much

man

have been the

may

its

was

evident

trend toward

than

water. i
as

itself,

industry,

ment

nor

business

the invest¬
its security

would

terest

closures

thus

and

eliminate

the

task

among

reluctant

always

important alloy

world
and

For just

it has in the past,
of

the

future

will

depend

50359

nation

Our

controls.

upon copper.

propose or support any legislation
which means an increase in gov¬

ernmental

tt>

metals always ready for its

the

pledged

keeping this "Atlas"

responsibility.

•

products of its mines

surely

this

either

brass,

great

I suppose, I

most of you,

economical, easily

widely adaptable metals

and mills, Anaconda js

require all large corpora¬
a
public investor in¬
to
make
adequate
dis¬

Industry,

copper.

with

tions

most

Proud of the

legislation

proposed

homes.

of the

known is

any

gained
the small

of corporations oblivious of
their
fiduciary responsibilities
benefit at
the 'expense
of the
The

millions

group

others.

well

leans heavily on copper, since

worked and

to be

non-disclosure,

from

there

advantage

Insofar

holders.

protection to count¬

permanent

one

its

neither

serves

/give lasting beauty

|«.

carfy

less

supply essential
stockholders

not

does

information

too,

simply accelerate the trend.
The corporate management
which

For cop¬

ever.

communication

disclosure

tions

in industry,

spread electricity

per now must

by the corpora¬
examined.'5This bill would

wherever

role

today, the burden of copper

grows greater

1946 and 1949

always playing a

supporting

mission indicated that even in the

there

broad shoul¬

science, in art.
Yet

management. Studies made by the
Securities and Exxchange Com¬
short time between

own

has made progress

these basic standards of corporate

subject of argument in 1934, they
are today accepted by responsible

has literally carried

copper

ders for ages

tivity of corporate management in
securities, to prevent the abuse of

relationships

copper greatly

many ways,

the world

for the

prospered under a system of
enterprise
based
upon
a
minimum of interference by gov¬

has

free

ernment. It is for just
that I consider it

that legislation
1

this reason

highly necessary

such

that which

proposed be adopted. The

have

were,

is not

AnacondA

First in

Copper, Brass and Bronze

regulation.

would be the first

THE AMERICAN

BRASS COMPANY

ANACONDA WIRE & CABLE COMPANY

repudiate it. It does not even

compel
tices

any

major change in prac¬

already

followed

the

corporations. It
simply places a legal sanction
upon fair and democratic treat¬
great majority of

ment of minority

security holders.

New yI°!' Anniversary Banquet of the
New Yj£n^ur*y, dealers Association,
W
VtJrk
City, Dec! 8, 1950.

file

holders

tfS' many
*he protections
' .under our present laws,
rc^. avaiiable only to investors in
W^red issues- There is no
glc ln the present disparity of

conduct,

may

designed to extend

urK*

Continued

exchange trading, and permit se¬

that

fear

would

se-

not

unfair

at meet¬

Metals

unregistered

Aluminum

the

latter

and is able to participate
intelligently in its management.

company

the

should

ings he is unable to attend,

introduced

the

gets to know more about his

entitled

attempt at business

tor

industry and the Commis¬
Such a study should result

The inves¬

ment of our economy.

over-the-

counter

financial

company's
He

firmly believe that the pend¬
upon
exchanges,
I feel that ing bill is one of those very un¬
amendment has merit.
It was, I usual legislative proposals which
understand, the product of con¬ contains advantages for every seg¬
I

trading

stock¬

with half

assets,

amendment I have offered
I

important aid for those

choose

method.
o

rules^ governing admis¬

inequality.

The
new

markets

adopting

much information about the

your

the
most recent estimates, is currently
running at the rate of $284 billion
per year, the highest in history.
Of this, $198
billion represents
product,

economy

challenge to

new

resourcefulness.
tional

from

had

development

and,'-strains

group

women,

earliest days, have
with

has

radio

that

company

pending legis¬
is always

enter

holder in Aluminum Company of

lation.

There

me
.

feasibility of

record, that I would oppose any
attempt to cripple the over-thecounter industry.

report to

advisability,

Let

there.

pff. the exchanges and to
us within two years upon

should be traded
find/ their way
assure you, for the

which

exchanges

templating registration under the
Securities and Exchange Act. It

dollars

rumors

of the

wish

that I have these problems in mind
and I welcome any assistance you

companies, Aluminum
of America,
is con¬

billion

affected

heard

not

the relative merits of each.

may

treatment.

curities

that

directs

study of trading

sion to and removal from

exchange

that it

expanded func¬

assume vastly
tion in nation's economy.

why I am happy to
meet J with you this evening is
because I feel it extremely impor¬
tant for members of Congress to

and

make

the

into any controversy which may
exist between that market and the

attempt to extend bureaucratic regulation of business.

One reason

Commission

market.

exchanges, says measure is required for protection of inves¬
an

agency to

fect this legislation
may have upon
the over - the - counter securities

kill that would extend SEC regulations to many
corporations whose securities are not registered on securities

change

I recognize, of course, that
many
of you are concerned with the ef¬

JR.*

Sponsor of

tors.

•

U. S. Senator from Delaware

Over-the-Counter
Market

this I

jection.

can

see

serious ob¬

INTERNATIONAL SMELTING AND REFINING
ANDES COPPER MINING COMPANY
CHILE COPPER COMPANY

GREENE CANANEA COPPER

COMPANY

has been rising

The Electric Powei Outlook

The tax

tax

Chairman, War Production Board

for

prewar

Company,

of estimates made by General Electric

On basis

electric

development at

period. Says, unless

projects

war power

poses

heedlessly

are

the

stockholder

is electric power.

subject

My
It

said last May that in the

was

notice

tax

This

mounting by the hour.

curious kind of hot-cold pic¬

today the political ture, as newsmen well know, with
setting is conducive to rising all of the planning by government
States

United

and

our

t i

being

with

ac-

i t y,

policy

maxi¬

one

that

business

with

economic

the

full-scale

effort—but
We have

war.

casualties,

of 30,000

tragedy
far

not

associate

war

full-scale

official

mum

employ¬

and

ment

at home

plus economic

denunciation of the guilty parties,
but it is not a full-scale war.
But

rehabili-

there

tation and the

certain

sues

of security

abroad.

being given

The
our

government
in

the

men
*

imple-

continued

has

to count

our

And

facilities.

our

vital material

electric

come

which is at the

power,

time

same

commodity and
to grow, as you know, and one of a
dynamic instrument or tool by
the effects has been to increase which it is possible to increase
the pressure on private business. our
productivity.
It is a twoBusiness
has
complained
and edged sword, or a double-bladed
fought back against that pressure, plowshare, as you please, and
but happily in the process it did while this dual
quality adds to its
not

dare

relax

with

back

its

and
best

fought

weapons

value, it also tends to trip
statistician

the

unfamiliar

the

and

-—intelligent and courageous ex¬ administrator;
Not for one mo¬
pansion, continued scientific and ment do I feel that members of
economic research, improved the
press
also would fall into
communication with its employ¬ these traps, but so that we can all
ees
and its public, and greater start
even, let me just run through
productive efficiency.
Courage, the
bare
fundamentals
the
—

in this case, was not mere words,
but the investment of billions of
for

dollars

plants and ma¬

new

chines.

blocking and tackling of the sub¬
ject, so to speak. The basic power
unit is

the

thousand
the

With

summer

the

came

watt;

watts;

kilowatt is a
and a kilowatta

hour is the using-up of a thousand

small

stock¬

the

Inland

big British stock¬
tax in addi¬

super

But

United

the

States,

the millions of small stockholders

who

may

class

via the

ceive

the tax-exempt

in the 20%

corporation

deducted

the

Federal

The
is

made

Advisory

of the 12 Reserve Dis¬

from each

tricts, these representatives being
elected

but

the

The

fallacy of

becomes

the

lowing example,
and

Mr.

few

the

000, this small corporation
special low rate and the
holders

the

form

rich

is treated

in the 45%

man

his

cause

corporate

poration

paid by the corporation

disbursed

was

garded
at

45%

dividends

the

re¬

dividend tax deducted

as a

the

rate.

the

source,

holder would pay
stockholder

little

stock¬

less and the big
pay more in

would

tax.

The concessions in taxation dur¬

ing World War II. such

the five-

depreciation allowance,

vear

enabled

the

corporations

modern plants and build

put
up

Act

Federal
A.

Frederic

Potts

position out of depre¬
ciation reserves.
Thus, they were

Re¬

System

Washing¬

ton,

C.,

could obtain practical information

advice

and

tives
of

from

the

Council.

the

Banks

representa¬

occasions

the past the Council has been re¬
ferred to,

I hope facetiously, as a
statutory nuisance!
The

proceedings

the

meet¬

now

maximum

Districts

the

Fed¬

and

the

putting

delayed

effect

availability

throughout the

has

being

establishment

this

request

the

The

big

of difference lie

areas

in:

Reserve

ticularly

requirements

with

respect

par¬

special

reserve.

(2) Competition between

bers

tem

and

the

charter

Banks,

there

mem¬

banking

of the

some

serve

sys¬

Federal Re¬

particularly where

difference

of opinion
regarding the boundaries of Regu¬
a

lation Q.

members

the

Regu¬

Council.

the

Reserve

Board

or¬

ernors

(3)
fear

Availability Schedule—The
amongst the bankers in this

respect

that

spread of

there

will

artificiality in the col¬

lection of items and in the grant¬

ing of credit. This may lead to
ings cf the Council, and those per¬ further
such artificiality with im¬
taining to the Councils meeting mediate
availability the end re¬
with

Federal

the

Reserve

Board,

held in the strictest confidence

are

and
I

cash

good

e i a

that

serve

45%

eral

Board of Gov¬

bracket be¬

the

1913

der

income is taxed through the cor¬
tax

stock¬

But if Joe Doakes has

S-Steel, he

Reserve

schedule

pays a

five shares of General Motors
U.

possi¬

referring to

Consideration is

into

set

the

members

two-day

Reserve

was

treated like relatively

are

poor men.

(4)
given

The Council

fol¬

lations W and X.

Banks.

small corporation earning $25,-

eral

Rocke¬

associates

discussed

with

Council.

the local Fed¬

they

corporation

obvious

Board

Governors

re¬

They would

nothing

bilities

re¬

spectively

Board

serve

pay

small partners.

were

Council

of one representative

rate of 45%

source,

practically

pay

bracket,

credit.

tax

feller

time,

money, our men, our

and

resources

pays

tion.

tax

last

the

which

But the

holder

extraordinary op¬

Philadelphia banker describes work of Advisory
controversy
regarding bank correspondent system. Says, despite apparent
settlement of the Treasury-Federal Reserve dispute
regarding
interest rates, "politics continue to play large part in financial
scheme of things."
Prominent

Council to Federal Reserve Board, and explains

Revenue Board and he gets a re¬

is¬

manpower,

portunity, not granted

ting of

this policy,

Charles E. Wilson

intensify

By FREDERIC A. POTTS*

tax on

Thursday, December 14,
1959

President, The Philadelphia National Bank

little

deducted

presents

fund.

materials and
Perhaps
we
are

productivity.

important issues—the

improvement

role

even

enough

war

50%

With the dividend goes a

source.

holder
it are

burden

corporation tax is really

poorly located and materials for equipment are made
unavailable, power needs will probably be met

and

the

...

Advisory Council in the
Federal Reserve System

merely

fallacy.

The British practice ex¬
this fallacy.
There
the

people.

than double

55%

increases

spending in 1952 at $46 billion, and

power

The

is a

Without

the corporation income tax to
or

Mr. Wilson sets defense

the corporation

the stockholder.

stockholders, the corporation is
nothing. The proposal to increase

President, General Electric Company
Former

steadily and rap¬

idly.

By CHARLES E. WILSON*

need

Financial Chronicle

The Commercial and

(2286)

are

not

have

publicized.
been

now

The

latter would be

the Council for the past two years
which corresponds approximately

im¬

relations and

correspondent bank

member

sult.

portant step in eliminating current
would

leading toward

centralized and controlled system.

One of the major items of in¬
watts of electricity for an hour, enabled after the war to increase with the tenure of office of Mr.
terest was the difference of opin¬
glimpse of the calculated and which is what you*do if you burn
employment and to lower costs. Thomas B. McCabe as Chairman ion
last August between the Fed¬
malignant forces of aggression. ten 100-watt incandescent lamps The
money not taken by the gov¬ of the Federal Reserve Board. At eral
Reserve and the Treasury.
That shock set off—authentically
for an hour, at the cost of a few ernment in taxation remains as that time, there was considerable

shock of Korea and the first clear

but

little

late

usual—our

present national security program,
and the effects and implications of
•An address by Mr. Wilson before the
National

Press

Electric generating equip¬

cents.

ment

rated

25,000-kilowatt

ample—while

Club, Washington, D. C.,

kilowatts—a

turbine,

electric

Continued

I>ecetnber 5, 1950.

for

ex¬

current

page

There

undistributed

profit

which

the

the Federal Reserve Board.

employment.
study of the 50-vear record of

less

sponsible for the Federal Reserve

than

the profits plowed back
the
business.
These were
to

Senate

profits

paper

Act

ton

tried

put

Dynamic Economy ,*• ranks the in¬

his

latest

book,

teeth into the

vention

the

tions of the industrial

"Our

of the

corporation along
anti-trust law, with the great mechanical inven¬
,

directors

became liable

corporation

attracts

for

capital

violation

of the law by

the

KKsbjt M. Friedman

corpora¬

tion.

The law

recognized the

directors
the real managers, and the
as a

However,

high

What

number

liability.
ness

shell
the

corporation

live

a
a

Committees,

doing

1913,

tried

directed toward

with

away

correspondent

banking and having the
of

items centralized
in

trated

was

System.

the

Mr.

re¬

and

Federal

McCabe's

clearing
concen¬

Reserve

predeces¬

Chairman of the Board was,
still is, an advocate of the

sor as

be¬

such

never

with

nor

staring

culty

$257,000,000 deficit
in the face. The diffi¬
a

stemmed

control

and

monetary
The

there

saying

word

anything

and

fiscal

nation.

the

claimed

the

should

who

the

affairs

but

from

run

Federal

powers,

before, but
cri ical moment,

statutory

Treasury said
in the statute

with

respect

debt management. This, then, has
been the entering wedge through
which the Treasury has driven all

show that taxation according to and
ability to pay is taxation accord¬ aforementioned stated intent of
its forces.
ing to the ability to employ. One Mr. Glass and this known fact has
Quite naturally the Treasury
been grave concern to the
waj- of checking increasing em¬
many wants to
keep down the cost of
ployment is to tax away the cor¬ correspondent banks now repre¬
servicing the debt—now $5,000,poration's ability to expand and sented in the Reserve System.

000,000

modernize.

Clayton

thus

Act

largely

was

differences

been

The

$6,000,000,000.

little to facts.

poration

and

for
building
subsequently, jobs for

Carter Glass, who

have

tween the two services

Each corporation is a
The
limited liability, and the joint
present
Chairman,
how¬ Treasury
has
to
preserve
the
small WPA to the extent that it
slogans and so stock association, and, finally, the
ever,
has immeasurably cleared
sancity.of Government bonds to
can
give employment to expand the atmosphere and a better
The corporation is corporation. The invention of the
un¬
which the Federal also subscribes.
its facilities.
a legal
person corporation is at the foundation
derstanding exists. This does not The Federal feels that an increase
But the government needs
but essentially of the rapid economic develop¬
mean, of course, a complete meet¬
in the costs of servicing the debt
a
fiction cre¬ ment of the United States and the money and must raise it somehow. ing of minds between Council and
will be small compared to infla¬
Government necessity requires ig¬ Board
ated
of
wealth
by law. increasing diffusion
members, but the areas of
tionary costs as the Federal is not
For example, among all classes, including the noring ethical treatment of the disagreement are not as
wide.
permitted
to
use
its
available
This is not the place
when
the smallest saver.
A few examples of the
Harold G. Moul- taxpayer.

sions of taxation, so much atten¬

paid

plant

jobs

steel workers.

new

surprising that in discus¬ ity. then the joint venture with

first,

trades and,

corporation is a tax on stockholders, Mr.
Friedman contends increasing taxes on individual's dividends

tion

increase

In briefs before the House and

corporation

Consulting Economist

motives

is stated that the influence of Mr.

By EUSHA M. FRIEDMAN

preferable to increasing taxation

the

United States Steel Corpora¬
tion shows that dividends were

Corporation Tax Fictions

the

create

Council

used

members

among

into

Asserting tax

misunderstanding

trust fund for future

land

into

pool

rivulets

which

erf

feeds

the American economy.
One corporation, the American

Telephone &
most

has al¬

million shareholders.

eral

Telegraph,

Motors

Steel

Gen¬

has

about

has

about

300,000.

tax

The alternative is to

production

more, or

the individual

and

more.

(1) At the

Increasing taxes on individual
dividends is preferable to increas¬

before Congress.

jority

are

make-believe.

$1,500

With Schwabacher & Co.

corporation?

large

of partners with limited

In its evolution,

busi¬

values.
tion
even

passed through the stage of stock.

partnership with unlisted liabil-

does
a

Stack

with

none

of these corpora¬

Market

stockholder

members

fraction

the

San

With the increased estate

ham
Co.

Street
of

the

affiliated

Co.,

600

York

and

Hutton

sought.

was

taken

result

Federal feels it must have

supply.

monetary
areas

(1)
to

in which it

Interest
has

rate

been

1^4%.

It has three
operate:

can

rates

—

raised

In this

area

Rediscount

from

also

1*2

market

operations should be included.
(2)

Reserve requirements.

(3)

Political control in

the

tion

by the Re¬

Regula¬

Q. U. V. W, and X.

Actually the

Board.

area

of dispute be¬

Federal

having legislation passed reliev¬
ing the banks of a portion of FD1C
assessment

(3) Prior
of

Stock Exchanges.
formerly with Harris. Up-

Co.

The

leeway to control credit and the

tween the Treasury* and the Fed¬
Reserve Sys¬
eral Reserve was not too far apart,
tem actively assisted the
banks in

Montgomery,

New

action

serve

Francisco

He was

taxes, the number of stockholders

become

Schwabacher

any

own

has

was

(2) The

SAN FRANCISCO. Calif.—John
J.

less at average market

the pound, one of the
district banks requested a raise in

own

small people who

Britain

credit controls.

devalued

Council

ma¬

taxes

income

Great

CSsweisl to Ysa Ftsucaii CbhkckxeI

However, the overwhelming

proponents

time

ing taxes on corporation paper the re-discount rate to
off-set the
profits.
A sound .tax policy will possibie ill effects
of devaluation.
require clearer thinking than has Before
taking any steps along
been displayed in the proposals these
lines,
the
advice

500.000.

cor¬

or screen.

The

era.

type of
cooperation existing between the
consumption Board and Council
might be of in¬
the corporation less and terest to
you:

for details.

qualitative

the

establishment
controls, the Re-

*Ac address by Mr. Potts at the
Phila¬

delphia
Bank

National
Bank
Correspondent
Fcrum.
Philadelphia,
Pa.,
Dec

1950.

find confined chieiiy
in t?e short time

area

flexilibities

rate.

you

Both

agreed on

agencies are

needing the balance on

2*2%-

in this afore¬
the economics
of the situation definitely failed a
the Federal Reserve action. It i
In

opinion,

mentioned dispute,

also discouraging, to say

the leas.,

Number 4968

172

Volume

realize that

The Commercial and Financial Chronicle
the

tween

politics continue to

two

agencies

ing

rate.

From all

reports, the bridge be¬

so preserve our

Measures of Reasonableness

By CARLISLE BARGERON

did

who

not

college,

nevertheless

prides himself as a great student of history. But a statement by
Abraham Lincoln not quite four score and ten years ago, must
have escaped him; certainly it has made no impression upon him.
before

Just

group

lows:

made his

famous

Gettys¬

reason

help

only

The

which

recently

have

explosive

become

public

Truman
are

known

least

one

other

instance,

the explanation

it back. On another occa¬
publisher was readying to publish a
scorching letter he had received from the

Carlisle

Bargeron

these prospects

when he got over here to

speak strongly and firmly to Mr. Truman
the preceding London press accounts had it, and this resulted

in his completely changing his outward tune, not that he changed
tune in the slightest. When he got here he was told

his inward

aggregate value of national prod¬

only one of wash¬
ing out the Korean episode, as he desired, but also of letting
Europe go hang, and I am using the language of the street, as I

heard it here and in the South, and

members of Congress were

hearing it in telegrams and letters from every State in the Union.
So the British Prime Minister was confronted with the propo¬
sition of soft-pedaling his demand that we forget about China and
Korea and Formosa and throw all of our strength to Europe, and
.

doing what he could to bolster

internationalism for the Admin¬
the National Press Club he
Stripes flew in Korea the Union

Thus in his speech before

said that wherever the Stars and
Jack would fly right

o
*

•

Bernard F.

■

Magruder

agreement

functions, it is generally
that recognization should

given to risks assumed and
In

the

demand

meet

profits

of' productive

use

re¬

free competi¬

variation

system

ucts,
value

there

universal

the

demand;

satisfied

profits

adjusted for changes in the
of the dollar and popula¬

risks

It is

tion.
for

then

that

the

demand

profit limitation becomes most

insistent.

The very

reasonableness
measure

any

un¬

some

determining
If

reasonable.

eliminate

charge of

assumes

what is
purpose is 'to

the

excessive

measure

profits,

war

law

attempting to

for ab-

allow

stultifying effect of the use of past
averages was not fully realized in
the relatively short periods of its
prior use, but as a long-range
it

measure

destructive

profit incentive and
compatible with our
prise
been

system.

measures

Stock

Feb. 8-9, 1951
of

Board

ation

winter
Feb.

21,

Philadelphia

Nov. 25-30, 1951

fair

return

suggested.

Investment Bankers Association
Annual

Convention at the

wood Beach Hotel.

Elected Director

have

Rockefeller,

Avery
Schroder
Air

Act

measure

frequently

past is based

Bank

1950,

used

of New

the relative

York

has for

City
years

the

same

address

important ratios reported annual¬

worth;

the

Federal

Trade

Continued

Com-

page

position

Election

dists

are

even

putting their own new and optimistic interpretation
It is not serious, we are being told, to

the disaster in Korea.
lose just one

engagement in a war; it is the

counts.

Assistant Secretary.

offer to sell or a solicitation of an offer to buy these securities.
offering is made only by the Prospectus.

Mortgage Bonds, 2%A% Series due December 1,1980
Dated December

must have
apparently to have, is
into a straitjacket and

1, 1950
'

Manifestly for this reasoning to hold good, we

other engagements. The next one we are
for the American economy to be thrown
that is an engagement I doubt very seriously we

Price 100.81% and accrued interest

will win.
the Ameri¬
can
penalty for
breathing a sigh of relief, although burning up at the outcome,
over the fact that the
appalling loss of men in an utterly foolish
endeavor is about at an end.
It is to be their penalty for
becoming fed up over all this global leadership nonsense of the
it, this is to be the penalty of
people for the disaster in Korea. It is to be their
And

I understand

Copies of the Prospectus

may

be obtainedfrom the undersigned.

Administration.
I

much

afraid that the

Republicans aren't going to

about this state of affairs, either.

be able to do

The propaganda

against

HALSEY, STUART & CO. Inc.

them is too
terrific, and also

they are a little nervous about the
temper of the people as reflected in the deluge of communications
they are getting. There is a feeling among them that the people
want to
swing back to "isolationism" too far, which is a commen¬
tary on the derision they have been taking from commentators and
editors about being "isolationists."

December 14,

1950

also

Gray

an¬

and

Assistant

Metropolitan Edison Company

overall outcome that

Assistant

Treasurers and of John I. Howell

$5,250,000

First

previously

was

extreme

that that entails with such an impetuous man as Mr. Truman in
the White House. We have got to move quickly and regardless of
the cost and sacrifice or else we will not survive. The propagan¬

an¬

Vice-Pres-^

Sherman

Streeck

Corp.

Co.

of Erich

Mr. Waldek had

the

nounced

Karl

Trust

election

The

develops that the Administration is prepared to go to
to keep the internationalist fires from dying out.
Instead of moving along with our rearmament program in semiorderliness, with some regard, at least, for the domestic economy,
we are now to
proceed hell bent and with no regard to domestic
dislocations. In fact, we are to have a national emergency with all

and

directors of

It now

any

Co.

elected a

Bank

Assistant

Treasurer.

This announcement is not

alongside it.

Schroder

ident.
held

time

Schroder

Henry

compiled and published studies
showing this ratio; one of the 14

directed

by Mr. Magruder before
the Wayne
University Accounting Fac¬
ulty, Dec. 1, 1950.
:"An

was

director of the J. Henry Schroder

its committees ly by Dunn & Bradstreet is the
report "as early as practicable" ratio of profit to
tangible net

Congress
to

Revenue

Co.,

Banking Corp.

the

director of

Rockefeller

Reduction

Waldek

Holly¬
-

the

Among others, the National

emer¬

(Hollywood

Beach, Fla.)

the

period of the

Winter Banquet;

and

gency.

Firms

;

nounced

the

Associd

Exchange

(Philadelphia, Pa.)

1951

magnitude of profits to net worth.

Investment Traders Association

obtainable under normal competi¬

fined

(Dallas, Tex.)

meeting.

the

con¬

Firms
»

•

Governors

should attempt to duplicate results
tive conditions and should be

Exchange

Stock

Pa.

utterly in¬
free * enters
result other

The Ratio of Profits to Net Worth

used

measures

winter meeting.

ly and yet unsettled litigation. The

commensurate

ation

of Associ¬

Governors

has: been an indis¬ June 15, 1951
(Philadelphia, Pa.)
pensable factor in this growth,, and
Investment Traders Association
the willingness to take risks is in¬
of Philadelphia Summer Outing
separably coupled with the hope
and Dinner at the Manufacturers
for profit.
The provisions in the
Golf and Country Club, Oreland.
World War II excess profits tax

successfully assumed and
efficiency attained. The forces
tending
to
automatically
level
profits may cease to be operative
when factors such as monopoly or
war interfere
with free competi¬

level

Board

Risk-taking

normalties and growth led to cost¬

Tex.)J

Feb. 6-7, 1951 (San Antonio,

tion, has steadily increased despite
of
a
reduction
in
working
hours.

with

seek

that the temper of the American people was not

istration.

channel

some

Prime Minister Attlee was quite alarmed over

applied, if at all, only to

justification in a dynamic econ¬
omy.
Growth has been a striking
characteristic of our economy. The

forces

comfort in the fact that our withdrawal
from the peninsula meant we did not have to undertake the job
of rehabilitating it.
A new stand in Asia, in Japan, and around
Formosa, would not be very difficult to defend. And the tremen¬
dous reaction, or swing to isolationism, on the part of the Ameri¬
can people, seemed to militate against our going crazy on military
spending. In other words, although it is perhaps not the orthodox
way to look at it, it seemed as though the Korean disaster might
simplify our world situation, and consequently simplify our situa¬
•

war

ably

the

tive

time, at least, the yoke that is drawing around them. Inas¬
much as our losses in Korea in men and materials cannot be re¬

tion at home.

justified high earnings
profits. It can be equit¬

static industry and has no general

was

and

sults obtained.

gained, there

agreed

President, but he received another letter apol¬
ogizing and therefore let the matter drop.
Be that all as it may; it had looked for a time, with the dis¬
aster in Korea, that the American people were going to escape,
for

Plaza Hotel.

excess

between

Before

all such

would probably want

sion

basic fault is failure to distinguish

criticism

;; While

that Mr. Truman

Valley Group of
Party at the Park

IBA Christmas

for them."

profit.*

well-

Club

Bond

(St. Louis, Mo.)

21, 1950

Mississippi

eval¬

Washington correspondent returned the

letter with

Dec.

relation

functions

he has penned to those who aroused his

ire.

at Hotel Gibson Ballroom.

the incentive for cost reduction. Its

are

high

consider

letters^
only:'

ones

services
too

necessary

not the

Stock

annual election and winter dinner

uated it is first

position"^'!
I should not say foolish things if I -can^j;
it. And it very often happens thai; the ^
way to help it is to say nothing at all." "

that

Cincinnati

can

•

Field

profits tax "with retro¬ Jan. 16, 1951
'
rations is that their profits are active effect to Oct. 1, or July 1,
National Association of Securi¬
unreasonably high. This charge is 1950." The excess profits tax im¬
ties Dealers, Inc., Meeting of Gov-,
not based on refinements of defi¬ posed
during both World Wars
ernors and Election of Officers.
nition
oi
tne
provided two measures, one of
word
which provided for a credit based
"profit"
Feb. 4, 1950 (Houston, Tex.)
but on the be¬
on
the average profits of a base
Board of Governors of Associ-|
lief that prices
period. Such a measure penalizes
ation of Stock Exchange Firms
received
for
the
newly-formed and rapidly,
winter meeting.
products
and
growing companies, and destroys

this

"It is somewhat important in my

perennial criticism of corpo¬

costs.

address Lincoln was confronted by a
of newspapermen, and he spoke as iol-%:.,

burg

Investment

14, 1950 (Cincinnati, Ohio)

Dec.

Accounting instructor reviews complexities in determining rea¬
sonableness of corporation profits. Applies tests to measures
most frequently used and, in general, finds them inadequate
and objectionable. Advocates, instead of excess profits tax, a
new
renegotiation law to control war profits, and concludes
"high profits must be thought of as source of taxes and not

priceless heri¬

Washington
Ahead
of the News

Assistant Professor of Accounting, Wayne University

tage.

From

EVENTS

By BERNARD F. MAGRUDER, C.P.A.*

Truman,

COMING

Of Manufacturing Profits

President

fast

such a large part in the fi¬ closing. Most important of all of
this is to have cooperation be¬
nancial scheme of things, and that
tween the Federal and the Treas¬
efforts on the part of the Admin-,
istration to curb inflation, except ury. They must work closely to¬
for the advent of World War III, gether in mutual confidence and
will probably not go far enough. understanding. In matters of this
The recent announcement of the sort a good deal of give and take
is needed.
refunding of the Dec. 15 and Jan.
What we don't want to see is a
1
maturities with a five-year,
1%% bond, is a reasonable gesture Government-controlled central
bank. It is up to us to help main¬
on the part of the Treasury; how¬
tain
our
independent privatelyever, it does tie up the Federal in
their efforts to maintain a short- owned banking system and in do¬
play

term

(2287)

The Commercial and

(2288)

The Chase

Financial Chronicle... Thursday, December
14, 195Q

Transfer Agent
For

the Stock Transfer Department of the Chase has served

many years,

hundreds of

corporations

well

transfer agent. It has proved to these

national

as to

and stock brokers that it

can

security exchanges, investment dealers

be relied

upon to

furnish

outstanding service, freeing the companies from
and

consistently

a constant

burden

responsibility.

This

performance has been made possible through the
painstaking
development of a highly trained and versatile staff qualified to
handle all
phases of transfer work.
The fees for Chase stock transfer
services and for its other
services
a

are

moderate and

corporation

Among the

maintain

department

trust and agency services offered

Transfer agent of stock

WORLD-WIDE BANKING

usually much less than it

Registrar of

would

do these jobs.

by the Chase

are

the

following:

stock

Dividend
disbursing agent
Subscription agent
Trustee of
mortgage bonds, debentures and notes

Paying

agent for

principal and interest

Registrar of bonds

and

Depositary-exchange

debentures

agent under

reorganizations,

recapitalizations and mergers
Agent for trustees under voting trust
Agent under

THE

agreements

escrow agreements

CHASE

NATIONAL

OF THE CITY OF NEW
YORK
TRUST DEPARTMENT

11 Broad Street, New York
15, N. Y.
Member Federal
Deposit Insurance

Corporation

agency

cost

BANK

Kumtiff 4tl

Volume 172

,»

Thi Commercial and Financial Chronicle

ft'

to realize that

will
1

two agencies is fast
Most important of all of

closing.

this

have

cooperation

Measures oi Reasonableness

be¬

Oi Mannfaclnring Profits

ury, They must work closely to¬
gether in mutual confidence and

proba! ly ri«4 »*» tor r'.ough. understanding. In matters of this
mwmi ** vrt I of the sort a good deal of give and take

maturities

%% bond, is

tut l*

*!Ji»

a »<<*-*>;

the part of

tV T*

it does tie

ever,

ip.

she I

MM—mtMMMli

(ishiiigton
ilwml of the News
R» « -IIUSLE BAKGERON

who di.l pot go to college,

President Tn»* fet

Lirn W

Abraham

bt'loie

Just

h it has made no impression
tus famous Gettys¬

address J.*-•*«>•*

burg

nevertheless

g'*•<•! ttodent of history. But a statement by
tot qvit# bur score and ten years ago, must

have escaped fv

upon

services

costs.

only

And it

which

happens that

ottm

***■%

Truman

rcrcfitu

have

ones

t<t

ln»*t

sit

known Wasliu i'-n rom

letter

with the

would

and war

profits.

can

be equit¬

ably applied, if at all, only to

instance,

that- Mr.

tive

Be that all ** it mat. it had looked for a

aster

Korf*

the

tf *t

seek

low

our

Koiea in

men

and materials cannot be

<o*nfort in the fact that

gained, there

the'pcMi

our

profits

re¬

war

dnt not have to undertake the job
in Asia, in Japan, and around
Formosa wou'd *<**% t«r very cfiffleuit to defend. And the tremen¬
dous reaction. w swtcg. to ijotationism, on the part of the Ameri¬
can people.
to in J hut# against our going crazy on military
spending In
aoida. although it is perhaps not the orthodox
way to l>ok at tf
it **i. rd as though the Korean disaster might
simplify our »<wM fduitioii. and consequently simplify our situa¬
A **ew

fined

tt# Ae mean people was not only one of wash¬
ing out the Kwcji-i t
as he desired, but also of letting
| am c&ing the language of the street, as I
Europe jro t.a A,
heard it here
» ntf hemth. and as members of Congress were

was

g Id* demand

that

sition of sGtt»H
Korea and f

is then

that the

measure

destructive

some

measures

fair

Exchange

Firms
;

Feb. 8-9, 1951 (Dallas, Tex.)

Board of Governors

ation

Stock

Associ-!

Exchange

Firms

winter meeting.
Feb.

21, 1951

(Philadelphia, Pa.)

Investment Traders Association

Philadelphia Winter Banquet.;

June
*

15, 1951

(Philadelphia, Pa.)

Investment Traders Association'

Philadelphia

Outing'

Summer

and Dinner at the Manufacturers

Golf and Country
Pa.
Nov. 25-30,

1951

Club, Oreland,
f

(Hollywood

Beach, Fla.)
Investment Bankers Association
Annual Convention at the

Holly¬

wood Beach Hotel.

the

have

return

Stock

Tex.){

of Associ¬

winter meeting.

Elected Director

demand

assumes

Governors

Avery

Rockefeller,
Rockefeller

Schroder

director
&

determining

the

purpose

period of the

Bank

of New York

emer¬

has for years

Waldek

Assistant

Vice-Pres-?

forget about China and

worth;

the

Federal

Trade

Continued

Com- Treasurers

page

and of John I. Howell

Assistant Secretary.

m**« h# fcoUu-r up internationalism for the Admin¬

tfrk*%ju t

Jack would J;v

h before the National

f 'i*e<

s»

said thai whrmn

surs and

Press

Club

he
This announcement is not

Stripes flew in Korea the Union

offer to sell or a solicitation of an offer to buy these securities.
offering is made only by the Prospectus.

The

ui'd

It now

Ibat tbe Administration is prepared to go to
internationalist fires from dying out.

«.«

extreme to M<*t> t„e

any

Instead of

are

now

dislocati

with our rearmament program

rrnu? t

orderlinoss.

In <-»# f

int.

the Whi e Hnuw

we »re

the cost and yu/.i

dists

are e\ en

the ctoaster i.-«

to have

national emergency with all
man

Metropolitan Edison Company

Mr. Truman in

tbe

tio

optimistic interpretation
It to not serious, we are being told, to

tr own new and

biota,

•

First Mortgage

in a war; it is the overall outcome that

on# «t

the

Am-ik
an

4'.

engage-

t I doubt very seriously we will win. «
Ucit it. this is to be the penalty of the Ameri¬

And at I wnH

t >

people for Uc
breathing a suih

n -aUr in Korea.

can

Bonds, 2%% Series due December 1,1980
Dated December

reasoning to hold good, we must have
Tt# rnxt one we are apparently to have, is
> to be thrown into a straitjacket and

other engage rr t

1, 1950

Price 100.81% and accrued interest
.

...

It is to be their penalty for

rid, although burning up at the outcome,
the hrf tP»f th# ap filing loss of men in an utterly foolish

over

endeavo

at got

becoming fed
Administrate
I

much
them

end.
It is to be their penalty for
alt this global leadership nonsense of the

a;*
r

Copies of the Prospectus

are

afraid

want to

t h

grttti c

*t.to

swirl

it»

b#
n

editors

bout u

be obtainedfrom the undersigned.

fUnubhcans aren't going to be able to do

in the deluge of communications
feeling among them that the people
i.witoliontom" too far, which is a commen¬

!*»♦»# to

tary on the d*
i

may

about tm* k -*** *f aUairs, either. The propaganda against
to too
n
al*o they are a little nervous about the

temper of tf

they

impetuous

Maxntefcth .U*r thto

counts.

that is

$5,250,000

got to move quickly and regardless of
we will not survive.
The propagan¬

lose jusi

in semi-

icgaub:.at least, for the domestic economy,
ttl bell twnt and with no regard to domestic

that that enta.i# »ith sui h an

tl*

HALSEY, STUART & CO.Inc.

bi*%e l»een

taking from commentators and

and

Co.

Air Reduction

throw all of our strength to Europe, and

doing what b*
istration

'"An address by Mr. Magruder before
the Wayne University Accounting Fac¬
ulty, Dec. 1, 1950.

confronted with the propo¬
we

ation

and letters from every State in the Union.

to be operative

cease

Board

compiled and published studies ident. Mr. Waldek had previously
gency.
showing this ratio; one of the 14 held the position of Assistant
In
the
Revenue
Act
of
1950, important ratios reported annual¬
Treasurer.
Election was also an¬
Congress directed its committees ly by Dunn & Bradstreet is the
nounced
of
Sherman Gray and
to report "as early as practicable"
ratio
of
profit to tangible net Karl H. Streeck as Assistant

that the temper H

fV*-*r# Mu liter

with

Feb. 6-7,1951 (San Antonio,

Co., was elected a
what is been suggested.
director of the J. Henry Schroder
is to
The Ratio of Profits to Net Worth Banking Corp.
eliminate
excessive
war
profits,
At the same time directors of
A measure frequently used in
any
measure
or
measures
used
Bank Corp.
should attempt to duplicate results the past is based on the relative J. Henry Schroder
Schroder
Trust
Co.
an¬
obtainable under normal competi¬ magnitude of profits to net worth. and
nounced the election of Erich J.
tive conditions and should be con¬ Among others, the National City

to s;«eak strongly and firmly to Mr. Truman
pms accounts had it, and this resulted
smg his outward tune, not that he changed
his inward lure to th# slightest. When he got here he was told

* «

demand; as
profits

satisfied

monopoly or
interfere with free competi¬

reasonable.

the ptecrtiiei

So the flu*

may

measure

in his completer*

hearing »l t.i it

profits

productive

commensurate

reasonableness

Prime Mm #t#r Antler wis quite alarmed over these prospects

level

in
•

profit incentive and utterly in¬
for profit limitation becomes most compatible with our free enter¬
insistent. The very charge of un¬ prise system.
As a result other
tion.

stand

tion at h lire

when he got nvrr

meet

when factors such

withdrawal

of rehabilitating

demand
a

use

re¬

free competi¬

successfully assumed and
efficiency attained. The forces
tending
to
automatically
level

going to escape,
time, at le«*t, the snko that to drawing around them. Inas¬

much

the

risks

time, with the dis¬

American people were

tt e

variation

system

forces
Bargeron

mother letter apol¬
kt the matter drop.

functions, it is generally
recognization should

channel

mene i
?t-*e

be given to risks assumed and

>r
Carlisle

agreement

that

sults obtained.

President, but he
ogizing and th«i*

Bernard F. Magruder

there

such

agreed

Truman

universal

all

his

well-

While

«p*autcnt returned the

the

profit.

v, * t it i-M a. On another occa¬
publi.d« r i**# ts
itig to publish a
scorching letter te tad moved from the

for

Plaza Hotel.

excess

justification in a dynamic econ¬
omy.
Growth has been a striking
characteristic of our economy. The
aggregate value of national prod¬
ucts, adjusted for changes in the
value of the dollar and popula¬
tion, has steadily increased despite
a
reduction
in
working hours.
Risk-taking has been an indis¬
pensable factor in this growth,.and
the willingness to take risks is in¬
separably coupled with the hope
for profit.
The provisions in the
World War II excess profits tax
law attempting to allow for abnormalties and growth led to cost¬
ly and yet unsettled litigation. The
stultifying effect of the use of past
averages was not fully realized in
the relatively short periods of its
prior use, but as a long-range

functions,

probafd.

sion

static industry and has no general

letters

ffo*# who aroused

tdlwrr

(St. Louis, Mo.)

Mississippi Valley Group of
IBA Christmas Party at the Park

eval¬

consider

the

public are not the only

he has

ire.

.necessary

to let* if t* to nv nothing at all."

way

The

Dec. 21, 1950

basic fault is failure to distinguish
between justified high earnings

criticism

can

in my position
M*Uth things if I can

should ref

from

at Hotel Gibson Ballroom.

uated it is first

that

for

Before

this

lows:

help it.

Club

annual election and winter dinner

the incentive for cost reduction. Its

are

high

relation

#.*»

"It is #om«atat 1

(Cincinnati, Ohio)
Stock & Bond

Cincinnati

for them."

reason

perennial criticism of corpo¬

too

him.

confronted by a
*juf <*#***, #nd'h« spoke as fol¬

group of new

Field

profits tax "with retro¬ Jan.
16,1951
rations is that their profits are active effect to Oct. 1, or July 1,
National Association of Securi¬
1950." The excess profits tax im¬
unreasonably high. This charge is
ties Dealers, Inc., Meeting of Gov¬
not based on refinements of defi¬ posed during both
World Wars
ernors and Election of Officers.
nition
ox
tne
provided two measures, one of
word
which provided for a credit based
"profit"
Feb. 4, 1950 (Houston, Tex.)
but on the be¬
on the average
profits of a base
Board of Governors of Associ-,
lief that prices
period. Such a measure penalizes
ation of Stock Exchange Firms;
received
for
the
newly-formed and rapidly,
winter meeting.
products
and
growing companies, and destroys

From II

prides hiirscd a*

Investment

Dec. 14, 1950

Accounting instructor reviews complexities in determining rea¬
sonableness of corporation profits. Applies tests to measures
most frequently used and^in general, finds them inadequate
and objectionable* Advocates, instead of excess profits tax, a
new
renegotiation law to control war profits, and concludes
"high profits must be thought of as source of taxes and not

h«m • bank. It is up to us to help main¬
«r«*I m tain our independent privatelytheir efforts to ir- i to..* a short- owned banking system and in do¬
term rate.
ing so preserve our priceless heri¬
From all repoyt«. **.*" i to !|# be¬ tage.
on

Assistant Professor of Accounting, Wayne University

What we don't want to see is a
Government-controlled central

EVENTS

By BERNARD F. MAGRUDER, C.P.A.*

is needed.

i J«n,

COMING

tween the Federal and the Treas¬

The recent

refunding of the l*n

the

tween

fxritt* f r**rdimit to
huge r»rt tot the fi¬
nancial scheme of 4if n £*,
ttwt
efforts on the p*»t rrf u* A tmmistration to curt*
«inept
for the ad ent <t U .i*M tt^r III.
play such

(2287)

;

December 14,

1950

The Commercial and Financial Chronicle... Thursday, December 14,

(2288)
♦

The Chase

Transfer

For

Agent

the Stock Transfer Department of the Chase has served

many years,

hundreds of

corporations

well

transfer agent. It has proved to these

national security exchanges, investment dealers

as to

and stock brokers that it

can

be relied

upon to

furnish

outstanding service, freeing the companies from
and

consistently

a constant

This

performance has been made possible through the painstaking

development of
handle all

highly trained and versatile staff qualified

services

are

moderate and

corporation

Transfer agent

Dividend
BANKING

usually much less than it would

to maintain a

Among the trust and

WORLD-WIDE

agency

department

are

Subscription agent

bonds, debentures and

notes

Paying agent for principal and interest
Registrar of bonds and debentures

Depositary-exchange

agent under reorganizations,

recapitalizations and

mergers

Agent for trustees under voting trust agreements
Agent under

escrow

agreements

CHASE
OF

NATIONAL

THE CITY
TRUST

NEW YORK

DEPARTMENT

11 Broad Street, New York 15, N. Y.
Member Federal

Deposit Insurance Corporation

cost

the following:

Registrar of stock

disbursing agent

agency

do these jobs.

services offered by the Chase

of stock

Trustee of mortgage

THE

phases of transfer work.

The fees for Chase stock transfer services and for its other

burden

responsibility.

BANK

1950

Volume 172

Number 4968

The Commercial and

Financial Chronicle

(2289)

IB A Will Continue Its Tasks
I am fully
appreciative of the
toughness of the job of President
of

the Investment

ciation

Bankers

America,

tougher
the grand
performances

by
of

"Armi"

(Al¬

tage)

dent,
like

Presi¬

I
a

feel

rookie

following Joe
Di Maggio on
t h e
batting
order, just
after

Joe

has

knocked

home

run

left

the

over

field

fence.

I shall do my best to con¬
tinue the fine work he has done.

lln the first place I plan to

con¬

tinue the hard work that Mr. Armitage

has

done

available to employees of member
firms throughout the country.

third

the

lighted to
son

has

say

place, I am de¬
that Joseph John¬

consented

head

the

front and there has been

better

feeling of cooperation
the
industry than ever

within
before.

hope

continue

the progress which has been made
on

the educational program with¬

our

organization.

our

past

year

which

mentals

*Inaugural

now

During

the

rounded

have
with

program

course

out

home-study

makes Funda¬

Investment
address

Mr.

Banking
Marks

President of the Investment Bankers As¬
sociation

delighted that he will continue to
assume this responsibility.
Through
Committee

Secondly,

the 39th

Annual

Hollywood, Fla., Dec. 1, 1950.

Convention,

Groups

the Public Education
member

have been

firms

and

stimulated

join the campaign designed to im¬
prove public understanding of our
business. The accomplishments of
member firms and Groups under
the spur of Joe's Committee are
reported in the IBA Public Edu¬
cation Bulletin, the last issue of
which is available here in Holly¬
wood and brings the record up-

did

Johnson has done

job

There are

with

difficult

splen¬

assign¬

number of

of Section

which

and

There

Hon.

minion

of the

one

who
ence

few

had

ever

MacDonald

our

who

experi¬

business.

five

are

have
■

strong

Vice

and judgment are
not only in the Do¬

recognized
but

this

know

side

the

Walter
fine

Craigie who gave such
leadership to the Municipal

Committee this past year;
Mark
Elworthy,
our
distin¬
tage has spent hundreds of hours
in
Washington
and
elsewhere guished Vice President from the

that in the past year Mr. Armi-

working
to

Section 5 and it

this will be

seems

of the most

one

pressing problems of the incom¬
ing administration.

Finally, I think Mr. Armitage
has done a marvelous job in cut¬
ting down expenses and running
the Association on the right side
the

ledger.

extremely

Bond

tower

years;

strength for

and

man

I have

already noted.

Much of the work of

our

the final

Groups.

Blyth S. Co., Inc.
Underwriters and Distributors
NATIONWIDE

Over-all,

to that of

their

assis¬

position is similar

hod carrier who

was

"No," he replied, "all I have
is fill my hod with bricks,
it up eight floors, and then
bricklayers do all the real

one.

if his job was not a hard

asked

carry

the

work."
;In closing I want to emphasize
again that I have an understand¬
ing of the, responsibilities of the
have accepted and sense

my own limitations. May ! repeat
the story I told some of the Gov¬
ernors when

they informed me of
nomination at White Sulphur
ldst Spring.

It is the story of a man

who ap¬
farmer to buy a cow.
He asked the cow's pedigree. The

proached
farmer

did

not

know

what

meant.

tent of the cow's milk. The farmer

did not know that.

Finally, he asked, "How many
pounds of milk does the cow pro¬
duce per year?" and the farmer

of Securities

All

don't know that either.
tell you is that she's a

said,
Asso¬

ciation is performed by the chair¬
men
of the national committees
territorial

and

Public Education Chair¬

soon

many

Joe Johnson whose fine perfor¬
mance as

Calvert

They constitute a hard¬
working and most effective team.

He asked for the butterfat con¬

John Fennelly who has been an
IBA

and the chairmen of the

Gordon

tants.

Golden Gate.

budget conscious myself and early

January,

Hanson, Bob Stevenson, Erwin
Boehmler,
Dudley
Smith
and

office I

border;

commissioners

practical

lucky to

energy

ness,

Russell Bell whose resourceful¬

ed. We ate fortunate in having as
Chairman of the Commission the

Harry

grand assistants.

Presidents;

unwork¬

our

tious and able workers in Murray

faced,
some
'

depend in consider¬
able degree upon staff members.
We are lucky to have conscien¬

amount of work with which I

provisions

are

able and which should be amend¬

to-date.
Joe

know, this act was passed by an
angry Congress seventeen years
it has gotten musty.
aga and

accomplishments

Association

delighted that he

year.

the industry.

a. united

ment and I

ap¬

splendid performances.

•The

public relations and

figures for 1950 are in, we are
will serve again next year as head going to have a meeting of the
of public education. It is my hope Budget Committde in
Chicago* to
Likewise, the Education Com¬
that we wilimake it .possible for set up our budget for 1951. Not¬
mittee, largely through the efforts
him further to enlarge his pro¬ withstanding
the
non-recurring
of George Davis, has a Manual on
gram in the year ahead.
anti-trust, suit expenses the Asso¬
Securities
Merchandising which
In the fourth place, I feel we ciation is turned over to me in
is
rapidly approaching. comple¬
fine financial shape and I am go¬
tion. Both of these reflect the ag¬ will halve to do a lot of work on
ing to bend every effort to do the
gressive leadership of
Norman legislation in the course of the
same thing for my successor.
Smith who, I am happy to say, coming • year,
particularly with
I am fully aware of the. great
will remain as Education Chair¬ reference to Section 5 of the Se¬
and
the
curities Act of 1933.
large
As we all responsibilities
man next

cooperation very important Public Education
In the past Committee again this year. We
year, it seems, to. me the IBA, the all know the splendid work that
NASD, the Association of Stock Joe has done in the past few
Exchange Firms and the
Ex¬ years on this very important ac¬
changes have worked together on tivity of the Association and I am
within

to promote better

Sees need for modification of SEC acts.

following

bert T. Armi-

so as

tion at heart and I know will turn

all

to unite

personnel and improve investment knowledge of public.

And

cessors.

Laurence M. Marks

extend education of

prede¬

i n

segments of securities industry

elected

have the interests of the Associa¬

Incoming IBA President pledges to continue organization's efforts

even

been

pointed for the year ahead. They
are
capable, energetic men they

President, Investment Bankers Association of America

has

made

have

men

Asso¬

and

been

By LAURENCE M. MARKS*

Partner, Laurence M. Marks & Co., New York City

eighteen
of these

All

can

good, honest cow and will give
you all she's got."
Gentlemen, I'll give you every¬
thing I've got.
.

The Commercial

and Financial Chronicle

Thursday, December 14, 1950

...

(2290)

Achieving Unity in Securities Industry
I

By ALBERT T.

to give you

propose

sum¬

last Convention
for unity

began
call

our

In reviewing past

of the industry
the

regulation,
legislation, and
I

now

re¬

that

port

Group), the National
Securities Dealers,
the
New
York Curb Exchange,
and
the
New York Stock ExNew

of the

Association

Firms

change
the

Albert T. Armitage

New

Curb

York

Exchange

York

Association of

Ex¬

Stock

Education;

the

New York Stock Exchange on tax

of the

and

with

contacts

maintained

municipal bond clubs

most of the

throughout the country.
Budget in Balance

Committee

Finance

the

When

provide

change,

the

opportunity

professors, active in the
teaching of economics in our
American colleges, to spend three
weeks in the operating end of the

for

believe you will find their reports,
and those of the other National

Committees, both timely and interesting.
During the year your President,
accompanied
by our General
Counsel, Murray Hanson, visited
all the Groups and also personally

the report

annual

the

Calvert.

Gordon

regional exchanges, such as

Angeles and Philadelphia
Exchanges.
Several joint

portant matters, such as new
before the
features

bills lem in Ohio. In Canada, we attended the convention of the Investment Dealers Association of

Congress—e.g., certain
the

Frear

were

tional

tion

Past tees,

represented

was

Committee

Conference

the

and

Committee held

joint meeting in

Group

f°rmaHy continued,

Ewing

Boles,

^onlacts vvnn utner Associations

to all the

indebted

Group

At¬ Chairmen, the National Commit¬
Associa¬ tee Chairmen and their Commit¬

Montebello, and

spark-plugged

most pleas¬

Organizations held at

lantic City in June, your

Wasihngton Oct. 30-31, and I think
meetings with forums have been
would provide additional informa- Canada held at
the report of the Conference Com¬
of the coun¬
tion for stockholders in unlisted through the courtesy of this Asso- mittee will be most interesting.
try, with all the associations rep¬
companies; also tax legislation and 'ciation held our Canadian
During the year we held two Gov¬
resented: A
meeting at Atlanta
the formidable Section 5 of the meeting there, with considerable ernors' Meetings: One in Chicago
sponsored by the Georgia Dealers' Securities Act.
success. It was well attended and Feb. 3-5, which appears to have
Association
and
the
NASD; at
the
suggestion was made afterdrawn the largest attendance of
San
Antonio, sponsored by the
Group Level Activities
wards that this joint effort be inany Governors' Winter Meeting in
Texas Group of the IB A; at Bos¬
the history of the Association. We
The IBA plan of operation has
ton, sponsored by the New Eng¬
been to reduce our main activities
At all these meetings we stressed also held ou.r usual Spring Meet¬
land Group of the IBA; at Balti¬
to
the
Group
level, thence to the importance of both public and ing of Governors at White Sul¬
more, by the Association of Stock
member level—with a pooling of internal education, and I think it phur,
together with
Committee
Exchange Firms.
In addition, a
information
between Groups on safe to say that because of these Meetings, and a large number of
special forum in New York was
meetings, forums, education, ex- meetings our Association is be- Committee men and past Govern¬
sponsored by the New York Curb
ors
were
in
attendance.
Both
hibits, and new methods of adver- coming better integrated.
Exchange, on the subject of stand¬
proved
beneficial
in
Our 18 Group Chairmen, Contacts with other Associations meetings
ard rate schedules for the indus¬ tising.
try.

carry a

At the surplus.

representatives.

our

meeting of the Conference of Na¬

Bill which

held in various parts

will

World Bank, neid ant note. I feel our entire mem¬
should
know
that our
in Pans, Past President Hopkin- bership
son
and
Vice-President Johnson budget is in balance with a fair

meeting of the

the

the Los

Stock

Securities Committee

nicipal
have

called on individual members in President
Hopkinsons,
Murray
National security business. These professors all sections of the country whereHanson and your President; at the
Association of Securities Dealers, are drawn from all sections of the ever time permitted. In Cleveland,
second meeting held in Chicago in
Inc., on regulation and education. country.
the Northern Ohio and Ohio ValNovember,
your
representatives
In the area of Education, we have
Our industry has presented
a ley Groups held a joint meeting were Past President Collins and
also received assistance from some
solid front on a number of im- which simplified our travel prob- Murray
Hanson.
The Executive
legislation;

the

Firms,

reports to the Governors, I believe

coopera¬

tion

Association

exchanges; also through our Mu¬

his travels in behalf of IBA.

assistance

and

accom¬

received

have
the

the

kept

NASD, the New York Stock Ex¬
change and the New York Curb;
as
well as many of the regional

and unity of objectives of the various organ¬
izations and segments in the securities industry. Recounts efforts to provide
greater education in investment and to acHeve new and better methods of
advertising. Lauds courtesy and cooperation of all groups and members in

lated matters

can

year's activities of IBA, Mr. Armitage stresses

the

Exchange

Stock

have

and

with

touch

plishment of greater cooperation

corre¬

education.

Burr,

with a

of all segments
in

field

securities

Incorporated, Boston
Retiring President, Investment Bankers Association of America
President, Coffin

of the activities of the As¬
sociation for the past year.
We
mary

in the

with the other associations

ARMITAGE*

further interest and

building

ac¬

well

the entire staff of

Association, for their earnest

the

splendid coopera¬

and

endeavors

tion.

efforts

The

Association

our

have been to promote
unity within the industry, to in- '
crease public interest in the secur¬
ity business, to broaden the own¬
ership of investments in this coun¬
try, to stimulate the activities of
the industry in these directions, *
this

year

but not least, to

and, last

arouse

interest in our Association and en-

fective

the invest¬
Association now

for

advocate

ment business our

occupies

leading role.

As an ef¬

its membership.

large

Judging

from the enthusiasm shown at our,

Group meetings, the increased in-

the '
members of Con¬
gress, and the desire of the gen¬
eral public to become informed :
about the security business, I be¬
lieve that this industry of ours is
terest

the part of the press,

inquiries

from

Group ChairIn addition to our Group meet- tivity in the Association.
beginning to assume its rightful
have been ac- ings, we have kept close contact
Your General Counsel, Murray position in our economy as an es¬
successful cooperative efforts each
tive and versatile, Supplementing with the other associations of our
Hanson, and the President have sential part of our daily lives.
year
is the joint fellowship for the
Group activities have been- industry as well as outside organ- been active in! working with the
In my travels East and
iaculty members of American col¬ our 21 National Committees with izations
West,
such
as
the American SEC Commissioners and their staff
North and South, I have met with
leges whereby, in combination, the their
Chairmen, all contributing Bankers Association and National toward
simplifying
rules
and
unfailing courtesy and cooperation
Association
of
Stock
Exchange their bit to our industry and to Association of Manufacturers. At
regulations under the Securities from all the members of our As¬
Firms, the Investment Bankers the IBA. Without diminishing the the Convention of Security Ad- Act and in the hope of presenting
sociation which merely confirms
Association (both national and the credit belonging to any of these ministrators held in Detroit, our unanimous suggestions on the part
my
long-standing belief that no
Committees, I call your attention Association was represented by of the SEC and the industry be¬
finer group of people can be found
*Address
by Mr. Armitage at First especially to the achievements of Charles
Vrtis, Chairman of our fore the next Congress for im¬
Session
of
39th
Annual Convention
of
than in this industry of ours. We
the Public Education Committee State Legislation Committee, and
Investment Bankers Association of Amer¬
proving the present Act. In this are equipped with the necessary
and the Education Committee.
I our
Assistant General Counsel, work we have bec.ome well ac¬
ica, Hollywood, Fla., Nov. 27, 1950.
experience, knowledge, ability
quainted with all five Commis¬ and vision to perform a great
sioners and I can testify that they service,
which is to encourage
Chairman

We believe that one of our most

men's

the

Committee,

are

and

charged

of course

Underwriters and Distributors
9

their

earnest

board,

the try

hope that

Association American

our

contribute

have

and

Counsel

General
also

active

been

by the chal¬

it has

privilege to serve as your

President.

' {

•;

WIRES

BALTIMORE

DAYTON

EASTON,

PA.

LEWISTON,

DETROIT

LEXINGTON,

ME.

SAN

MONTREAL

FRANCISCO

UNDERWRITERS

DISTRIBUTORS

•

Corporate

KY.

PORTLAND, ME.

PHILADELPHIA

LOUISVILLE, KY.

Union Securities

CHICAGO

BOSTON

CINCINNATI

•

BROKERS

Municipal Securities

Corporation
E. HUTTON &

Broadway, New York 6

CO.

ES'I 4BLISHED 1886

Telephone: HAnover 2-4800

ilj

Members New fork Stock Exchange
and other Leading

BOSTON

HARTFORD

BUFFALO

PHILADELPHIA

Exchanges

CLEVELAND
NEW

SYRACUSE

Easton, Pa.

CINCINNATI

YORK

Philadelphia

Baltimore
Portland. Me.

Boston

the

of life.

way

I have been thrilled

con¬

much

maintaining

Investment Securities

will

lenge to our industry, and

President

Spreading the

in America.

anything

PRIVATE

induce more people

and

invest

law

ability.

will continue to follow these

Your
■

thrift

with the "duty ownership of business and indus¬
the

tacts.

sympathetic

administering

best

well-in¬

hard-workipg,

formed

Dayton

Lewiston, Me.

Lexington, Ky.
Hartford, Conn:

Volume

172

Number 4968

The Commercial and Financial Chronicle

(2291)

Output, Not Controls
One

the

what is referred to
talk"

and

that

reasons

haven't

"a prepared

tional

Chief Administration economic

spokesman, pointing

pull ahead in defense

prob¬

primarily unlie them, seem
to
change * so
rapidly,
if
I

whether

cates

program,

expanding production with

ally.

or not we

three

days

ago,

tion.

might

Urges

pay-as-you-go
as

might
to

seem

Leon H.

true

Keyserling

view

what

have

you

been

reading
your

and

newspapers

hearing

tions
I

you

must

have, but I think

may

something first about

say

the international
I

cause

situation, not be¬

expert in that field

the

conditions

change very
day-to-day. I think

from

that

one

tasks

have

the

is to take

scene

aspect than
to

the

day-to-day view,
that great

development
in

rise

important

somewhat longer

the

realize

economy

not

most

the international

world

from

trends

our

own

affairs

day-to-day

be settled

To take
close

from

day-to-day.

some

here.

confronting

the

everybody,
because
.0 n ly
through business understanding,
and

ple

decisions

the

and

attitudes

and

feelings of the American
whole will

as a

peo¬

be able to

work out the long and hard tasks
which confront us.
To take

can

not

situation

point:

is perfectly true that some of
developments that have taken

the

place from day-to-day

were

unexpected. Nobody
knew exactly what the Chinese,
backed by their mentors, were go¬
ing to do yesterday, today, or to¬

morrow,

but thoughtful and sober

down

people

throughout

pretty

the

United

of you here can tell me

States, outside and inside the gov¬

what it is going to do tomorrow. I
don't
believe
the
day-to-day

ernment, did not from the begin¬
ning, I believe, think that we had

sure

none

changes
or

economic

our

international

affairs

do know in the long run the
and

business

the

United

what

our

eyes

States

happens

United States
world

as a

and

condit

sis, what happens to the
both
whole

analy¬

economy

whole

the

to
or

to the

whole, and if we keep
primarily on these basic
a

problems and

will not be drawn

to far away from them by seem¬
ing day-to-day oscillations, undu¬
lations, or hopes and fears and
expectations, then we will all get

—the

government

less

than

business—a

more mutually advan¬
situation.

tageous
I

supposed

talk

about

and I hope

economic

here

problems,
some

the

Investment

America,

November 29,

Bankers

Asso¬

Hollywood,

Fla.,

1950.

their

work

views.

out

not

run

realize

into

methods,

operations

events,

least

the

going

to have to

fense burden.

confronting
into

the

price

and

dogs, they make

tal

mistake

the

problems

people
and

cats

fundamen¬

Anyway, it is

ing to be costly

its

the
go¬

going

to; be long, and if we are not
willing to pay for blue chips we
will get
only cats and dogs.

withdraw

our

national

the basis of historic events and

the

events
is

clear

the last

that

few

days,

would

win

The

other

extreme

would

be to say the die has been

finally

way.

cast and we ndust at

Now, how costly is it going to
Nobody knows exactly, be¬
cause it is an
unfolding situation,

be?

going to be

costly

once

embark

the kind of all-out military
mobilization and all-out economic

anyone

the

who did

national

present

defense.

whatever

kind

adversaries

our

that, that it is

that

mind

one

month

something to

ago

would

billion

running at at least $30
and possibly much

year,

than

that.
and

concensus

view

recent

estimate
ment

events

not

was

situation

very

cle by Marriner Eccles of the Fed¬
eral Reserve Board
in the last
issue of "Fortune," called "De¬
fense of the Dollar," in which he
undertakes to

assume

the goal for

national defense would
bring the
total budget to the neighborhood
of $75 billion or one-fourth of the

mobilization, which in effect

eu¬

phemistically

describes what
engaging in all-out war.

would be
There

are some

this is the

only

who believe that

course we can now

follow, and I respect their views
the

they should have

right to present them freely

in open debate for that is
way

can

arrive

the only

total national

lion. I

scribe to
I

offer

output of $300 bil¬

not in

position to sub¬

validate that

only

range of

thinking in which people

who

responsible will consider

are

problems. Now there

are

points to which I would ngt agree

Continued

New York

London

in¬

confronting

Because from that

United States Government

■'•V

?
«•

J"5f H,

/
?

<v*'

'tif-i*\'i%C
•r\v-

and

Corporate Securities

Municipal Bonds

F.H.A. Mortgages
Mutual Funds

Municipal Bond Department
TELETYPE NY 1-708

THE NATIONAL CITY BANK OF NEW YORK

Blair, Rollins 8- Co.
INCORPORATED
44 WALL STREET

Boston

•

Philadelphia

Offices in other

•

Head Office:

NEW YORK 5,
Chicago

•

San

N. Y. -

5 5 Wall

Street, New York

branches

in Greater New York

Francisco

principal cities throughout the country

MEMBER

FEDERAL

DEPOSIT

INSURANCE

also other

good points in the article and also

decisions.

Chicago

estimate.

point out the

situation flows the clear certainty
that we have a number of years—

State, Municipal

this

economic policy which follow from

situation.

that

interesting arti¬

and the matters of defense and

that

understate¬

the total.

There is

think there

understanding in

us¬

rea¬

the effect that by the end of the
fiscal year 1951—July of 1951—
our national defense
expenditures

gets

understanding of the

only

sonably large. The President stated

were

ing it to good purposes, and that
we had to face up to that problem.

bill
am

liberty at present to make

Established 1850

day-to-day, what¬

our

military strength.
at

Hallgarten & Co.

might have

fair

upon

and believe that

but it is not

can

thus

well

funda¬

objectives

cer¬

strength, they did not intend

With

international ob¬
some
cheap and
to win our security. But

easy way

going to employ their strength in,
they were going to use their
strength, and since they had great

clearer

shell, neglect

defenses, avoid
ligations, find

nothing and lose everything that

If anybody thinks that the blue
chips of international security can

confronting

people of the world, we can buy
security the cheap way. That is,
by failing to face the problem

ing, we are going for many years
ahead to be faced with serious in¬
ternational trials and are

United States.

United States and face all the free

every energy and
effort — even
with the most favorable unfold¬

for

living

World

unfolding of world events, toward
we
must
certainly bend

bought

wuthout

the responsibilities which face the

which

that

sume

as¬

War—but with the most favorable

many years ahead
bear a large and

One

and

would

third

for

alternatives.

other alternative would be to

context

every

There

aggressors;
and

purpose

securing

economic

for

not

are

proved—proved

and price rises

other

im¬

striving for the right,

moral

that .in

government

are

Long Period

anywhere

whatever

been done from
ever

favorable

two

what, in
more

not live

have

country

ques¬

*Stenographic report of an address by
Mr. Keyserling at the 39th Annual Con¬
ciation

hands, but that

our

Defense Burden for

us,

vention of

our

world, which we
in now.

secure

tainly

ternational
answer

run

did have

hands, in one
way or another, a long hard pull
if not a third world holocaust, to
work our way through to a basic

significant, although they may,
disturbing from day-to-day,
market

short
we

are

will all reflect in the final

for

inflation.

illustrate

explain—maybe some of you
can—why the stock market went

yesterday, and I

current

that

by expanded produc¬

recent wage

increasing de¬

example from the in¬

ternational
the

least—the

narrow sense

example that will be

situation

confronting the
people of the world is the problem

do
nor

change from day-to-day and will
not

most

world

outbreak

much

economic

unfolding
not

international

with

mean

expert in

tant,

believe

nobody is

that

conditions

best

in its various channels.

field

However, the opposite side of the
question, which is the more impor¬
really

be avoided

hard to know how
many—but we
have a number at best, and at

that

United States and

not

causes

—because

your radio in the last day or two.

world that

suggestion

The

can

mentally

rather than

economy

cannot

particularly

://

and

all-out

annu¬

taxation, and decries

unnecessary

have

national output goal of $500 billion

view inflation

expresses

be out of date.

That

portant; that it should seem to
the people throughout the free

long

advo¬

Wants self control of all elements in

controls, but

there will be

out

war,

prepared

something two
or

don't

think

the long run, would be

which

But I

Chairman, Council of Economic Advisers

conditions,
particularly the interna¬
lems

In Crisis!

By LEON H. KEYSERLING*

when

CORPORATION

page

The Commercial and Financial Chronicle...

(2292)

Thursday, December 14, 1950

Fundamentals of Public Relations Program
It

seems

that you in

the

By CLIFTON W. PHALEN*

the

investment banking business have

good deal in common with those
engaged in telephone work.

tain

impor¬

and

viz., (1)

problems
also

ing

similar

have

System's

afield

coming
today

cuss

here
dis¬

ideas

every

concern's public policy; (2)

Stresses courtesy and friendliness

ex¬

must

sound

just said calls
mind

Phalen

merit and hold

must

Clifton

fidence of the

last

incident

the

con-

in the street.

man

Second, a business has a dayto-day job of telling people about

tell

something from our experience that would be helpful to
you.
Since then I have had a

Voice Mir¬

the

into

speak

you

Voice Mirror, a few seconds later

repeats

^nhear

words

your

own

your

that

you

chance to look at

you

letins

voice.

doubt

quite understand what this

didnt

ments

ftll

onhiiT

nut

lirohtoH

all about, but still wanted

and

and-sucn
a

ner

street,

lew

seconds

own

woras

holding

lives

^nicago.
sne

"Well,

nGdl(J
at

ut/efo!.VeT.r^e^!
her ear. Her eyes

Now

investment

said.

with

may

want

„

said,

"All

right,

it?"

was

From

You

you are
.

get

service"

became

instant

and

chance to discover what
doing. So we believe that

statement gave greatly increased
impetus to informing employees

world

the

best

not

publicly stating

results of

and

give

■

touches the

the

business,
which
lives of millions, must

public what is

Only if people know

going

can

on.

they

telephone

make clear

and

not be quite

tributed

the rest

say

stands

that base.

But

over

Third, I think it is essential to
see

that all contacts with the pubare
handled courteously and

with

and

above

this

bed-

sincere desire to be help-

ful to each individual

person

you

visitors

coast

these

house

open

by the thousands. They
gazed at the amazingly or¬

programs

have

world

dered

cables

wire3

and

and frames and switchboards and

dial apparatus

and power equip¬
They have exclaimed over

ment.

the

clean, efficient and comfort¬
But most important

able quarters.
of

all

them

have

they

people

work

describe

telephone
heard

met

and

have

their jobs

the

and

equipment with obvious pride and
with eagerness to be helpful.

they have

And

away

with in¬

most

gone

their

meaning

jobs

was

dis-

bring customers

effective

sure

your

doing.

potential

cus¬

tomers

into your places of busi¬
showing them how you oper¬

ness,

c|0

also find

association has

that

service clubs

and social

clubs, businesmen's and

women's

organizations,

and

trade

requests

strations.
fied

speakers

each

there

demon¬

Bell

telephone
people quali¬

are

handle

schools

make frequent

groups

for

company
am

the

could

you

their jobs well.
I

one

things

capacjty

seems

ate, letting them meet your peo¬
employees
ple, and telling them your objec¬
applied io
tives, is bound to increase their
discussed.
The
confidence and understanding.

generally

its

and

-r.

It was

business.

the

about

therefore

serve.

I just

and

that

going to

coast

attended

the policy were at first more im- creased confidence in us.
4
portant inside the business than
I know that many of you also
outside. The phrase "best possible hold
open houses
and to me it

peo-

the

was,

the

can

credit for it unless you

pie

What

bite.
answer

kas. keen a steac^y beacon by
whiGh we have guided our business course. The policy is, in brief,
to provide the best possible teleph°nG service at the lowest possikle cost' consistent with financial safety and fair treatement of
employees.
The

equipment, meet telephone

dle their calls.

continuing challenge to improve
the service. At the same time the

job

His father

I'll

the

And

"Australia."

•

per-

goes,

business,

any

of what I am

banking

■

were

That is fundamental with

neighbors!"

telephone work

this

activity,

and

policy and I imagine you have we try to equip them with demon¬
found that any policy, to be really stration apparatus and visual aids
effective, must first be reduced to helpful to an interesting presen¬
a

nrfrock

?
ner

she

declare!"

here

How-

me.
_

Three Fundamentals

the

see

they like

into telephone offices and

come

people and observe how they han¬

In
Bel* System we start have confidence in us. And only value of doing this quickly bewith the premise that a good tele- if they have confidence will the came apparent, and led the Sysphone service job is the necessary public give us freedom to operate, tern into a continuing program to
foun(jation for building and keep- If we are not frank in telling our give all employees a better uning good relations with the public, story, we will not be free to derstanding of "the business and

popped.
"We must be

.»

emissaries

com-

of, Australia?"

covery

tell

oacK

coming

public
and I seriously
your

needed from

are

suasive—so

rhinam"
later

of the bul-

suggestions

any

your

ever,

such-

•

spoke something like this into the
machine, "Mah name is Rosa Bell
a

describe

that

try the thing out, stepped up and

Johnson

some

relations program

perhaps

Well, one woman who

Johnson

Mr.

Boehmler of your

have

may

you

call

When

Fair,

Chicago

some

seen—what

was

and
Mr. jts operations, results and future
Association in- objectives in the light of its pubwhere the Bell Companies had an vj(ec( me to talk to
you about Beli Udy stated policy. The other day
exhibit designed to show visitors
System public relations, they were the schoolboy son of a friend of
some
of
the
interesting things kind enough to suggest-—being mine came home and asked his
about our business.
Tnis exhibit g00(j public relations men themfather, "What was the biggest isincluded
among
other things a selves—that I might be able to iand in the world before the dis-

When

the

summer

urip

what is behind it, and so

opinion a clear statement of been a creed for those inside the
a company's basic policy is the business to look up to.
also keep in a strong and foundation on which any public
All the activities of the Bell
position, and at all times relations program must be built. System are tied to this policy. It

services, both you and we must
not only know our jobs well; we

What I have

familiar telephone instrument and

of top importance.

have

already has
curiosity about the

measure

story

our

that the public

found

continu¬

along these lines and media and slogans used to accom¬

program

telling

have

you.

ror.

few

and

device

program,

point of public contact. Explains working of Bell Telephone

plish ends desired.

periences with

sound public relations

for telling about what it is doing; and (3) courtesy and help¬

I don't feel

far

three fundamentals for

well defined statement of

program

fulness

opportunities,
so

public approval.

Mr. Phalen presents

cer¬

tant

representatives. ; So

telephone business begins with
public permission ana exists'.by

of us

We share

public's

the

Vice-President, American Telephone & Telegraph Company

vS
let

n^itfhhnr

neignoor.

mysterious

need for 6ivinS a good and are deling with. This goes beyond simple words. That is one essen- tation. In addition, some of the
improving service, it seems to me the dictates of "good business." It tial. The second essential is that telephone companies have worked
^ere are three other things that should become a way of life.
If once we have the words we have up short dramatic sketches, pri¬
are alg0 important t0 almost any
we are reasonable and polite with to keep on saying and repeating marily designed to teach correct

tiiey are aiiKe in certain very lm-

business if it wants to gain public people, they will like us and have them — emphasizing and re-emacceptance. In our business at confidence in us—and we will get phasizing them over and over
wL continuously necessary least,' we think they are essential, more pleasure and satisfaction out again. That's what makes the polare
both
J essentials is of our jobs.
icy a spur to action. And therein
to the progress and prosperity of
\ne nrst oi these essentials is
J
'
J*
.
values
For
the country
And to orovide these to know, to define and to say what
So, to restate my three funda- JJfs on® 01 *ts fjeat vat
*or
;tnecouniry. Ana to provide tnese ^
yQur job
yQur re_ mentalg briefly> they are; first> a the policy should be a full com•An
address by
Mr. Phalen at the sponsibilities are.
Public expres- well-defined statement of basic nutment that will never let you
n'lirfl

LntLnv

nrp

Thpv

artiuifioc

nfent 1?aXLC A.VSion' .V^merta", sions of this kind usually take the policy; second, a continuing proform of

Hollywood, Fla., Nov. 28, 1950.

statement of policy.

In gram
are

for telling about what

doing; and third, courtesy and

helpfulness at
lie
the

Underwriters and Distributors
of

Capital Issues

and Dealers in the Securities of

contact.
first

CORPORATIONS

for being;

UTILITIES

STATES

THE

•

MUNICIPALITIES

CANADIAN GOVERNMENT

PROVINCES

MUNICIPALITIES

•

say

your

that

reason

the second is aimed at

rest You givea hostage to the

iu.ure and action is demanded.
You are out on a limo of your
own making, with no possible
chance of climbing ^ack;
1S
exactly as it should be, for as we
?ee. *t»
of our public relations
*s
doing the job and 10% is in
about ^ ^d^ the
should keep everybody squarely
'
on

respect.

the track of the 90%.

System's Program

Since the policy is the starting

for

the

policy.

As to

10%,

much

RAILROADS

might

getting public understanding and
confidence, and the third is to win
friendship and liking as well as

wouldn't

me say

country where

just

other

audiences

addressed

o p e r a

visory

people.

They

trained

ways

able

are

well

our

motion

their

friends

INSTITUTIONS

•

are

Available

BANKS

INDIVIDUALS

•

their

activities

such

them most

BOSTON

•

and

•

Public

Another

thing that has been
helpful to our organization is the
use

bill

telephone
closed

other

inserts.

with

Surveys

their

show

one

that

Continued

Street, New York 5

Foreign Exchange

208

So. La Salle

St., Chicago 4

Chestnut St., Philadelphia

314

Federal

North

Street, Boston 10

Broadway, St. Louis 2

the

Bell

have
kind

bills

Representatives in other Cities

1416

All

companies

inserts

Commercial & Travelers Letters of Credit

CHICACO

recommend

Valuable Media in Reaching

Street, New York 5, N. Y.
PHILADELPHIA

highly.

Commercial Paper

Incorporated

63 Wall

also engage in

" DEALERS

Ripley & Co.

questions.

I know that you

Investment Securities

arriman

one

group

neighbors, tell
them something about their own
jobs and problems and answer

holders—and we are regulated by

30 Pine

and

Goldman, Sachs & Co.

CORPORATIONS

they

but

to introduce

pictures to

al¬

not

are

speakers

GOVERNMENTS

Our Facilities

tors,; chief

switchmen and other local super¬

FOREIGN

frequently

by telephone man¬

chief

agers,

to think that we consider it

few words

stand and has

Smaller
are

want

the
you

unimportant just because I put
about ours. The Bell System has that percentage tag on it.
On the
had one for a long time. It wasn't contrary we in the Bell System
born overnight, but developed and have felt for a long time that incrystallized through experience, forming the public is a vital part
and
was
publicly stated many of our job. We feel this the more
years
ago.
Since
then
it
has because we are owned by the
clearly told the public and the public—there are 980,000 stock-

point, let
PUBLIC

point of pub-

every

You

establishes

The Bell

INDUSTRIAL

telephone usage, which are pre¬
by a cast of three or four
telephone people.
<

sented

for

years.

one-third
on

in¬
an¬

page

Volume

172

Number 4968

The Commercial and

Financial

Chronicle

(2293)

In Attendance at IBA Convention
BISCOE,

ABRAMS, Jr., JAMES S.
Allen

Bosworth

Braun,

BLAIR,

Co.

HOWARD

Jr.,

M.*

CASEY, J.

Whiting, Weeks & Stubbs, Boston

New York

Company,

ADAMS, WILLIAM M.*

William

Incorporated,

Detroit

BLAKE,

Blair &

JOHN

•

Company, Chicago

•'Sterne,

Agee

ALDEN,

Birmingham

Aldinger

The

Co.,

BLYTH,

Detroit

GEORGE D.*

Parker

Leedy,

Corporation,

Alleman,

Inc.,

Co.,

BOLGER,

Ames

ALLYN,

JOHN

Harris

Jr.,

ERNEST

Trust

J.*

Savings

BOWMAN,

Bank,

The

AMYAS

Peabody

Co.,

Smith, Barney & Co., New York

Richmond

Securities

Corporation,

APPLEGATE,
ARMT.TAGE,
Coffin

LOWRIE*

ARTHUR
Applegate &
ALBERT

Arnhold

HENRY
S.

Pittsburgh
Boston

IE*

Bleichroeder,

Inc.,

York

New

ARNOLD.
Weil

Arnold,

Braun,

New

HAZEN

ARNOLD,

S.*

Bosworth

Orleans

Tampa

Co.,

FREDERICK

Ashplant & Co.,

ATWILL,

and

T Bache

New York

Beach

Co., New York

Chicago

James

Huston

Jones

BARBOUR.

Sons,

<te

Winnipeg

Co., Seattle

Co.,

Buyer,

Jr.,

Bros.

Fitch
City

Co.,

Shields

BARTELT,

York

Paine,

Webber,

and

HAGOOD

Inc., Miami

New York

Merrill

Jackson &

Curtis,
■

Lynch, Pierce, Fenner & Beane,

York

New

W.*

CUNNINGHAM,
S.

SAMUEL

Cunningham

COUFFER, JAMES G.*
B. J. Van Ingen & Co., Inc., New York

Company, Miami

K.*
Pittsburgh

Co.,

Continued

York
IMIWI,

^453
•

Atlanta

W.*

Milwaukee

M.*

E.*

BARTOW.
Drexel

Struthers

EARL

Co., New York

Incorporated,

Dealers in

City

Kansas
R.

JAMES

Burkholder,

UNITED STATES GOVERNMENT SECURITIES

BURNS, Jr., JAMES F.
Harris, Upham & Co., New York
RAFAEL

Development

STATE AND MUNICIPAL BONDS

Bank,

Dallas

ROLLIN
National

,''■<■

•

■■

f.' t.

-1.

if.

City Bank of New York,

York

BUTLER,

Specialized service

W. W. KEAN*
& Sherrerd,
Philadelphia
W.

institutional,

York

New

Herald

Tribune,

New

York

corporate,

WILLIAM D.*

WILLIAM

Jr.,

Herrman

and individual investors;

Goldman,

JOHN

quotations furnished and consultation

M.*

Co,,

New

CALDWELL, G. JAMES
Caldwell Phillips Co., St.

York

invited

Paul

Sachs & Co.,

New

York

■

regarding investment portfolios.

'
.

■

' ^

Jr., DAVID II.*
Michigan Corporation,

York

New

GORDON

Investment

Bankers

Association,

Washington
CANAVAN,

Smith,
CAPEK,

Co., Topeka

Co.,

Inc.,

CHARLES

Lee

Montreal

Co.,

New

York

J.
&

RICHARD

Dickson

Rico

Guaranty Trust Company

JAMES

Moore

Co.,

CHARLES

Higginson

Louis

St.

of new york

Corporation,

Chicago

I).

Brothers

ESTEBAN

Rico

National

Ill,

Long

CALVERT,

harry*

Cole

Government

Russell,

First

Co.,

Pressprich

BIGGER,

York

Southern

CALLAWAY,

Company,

RUSSELL

BIANCHETTI,

York

New

MacDonald,

CALLAGIIAN,
York

New

F.*

First Southwest

PAULEN
&

Henry

York

THOMAS*

BERGMANX,

and

BURKHOLDER.

CAHN.

Hayden, Miller & Co., Cleveland

Greenshields

Co., New

Byrne & Phelps, Inc., New York

Company,

DANA

Beecroft,

"P-

Atlanta

BYRNE,

W.*

Rollins

beecroft.

Cleveland

Dealer,

JERROLD
Dodge & Co.,

Butcher

York

BECKETT,

Plain

Washington

BATEMAN. FRANK B.
Blair.

York

New

EMMONS*

Citizens

New

Co., New

Hutton

BAXTER,

York

C.*

BUDD, Jr., JAMES S.*

The

BARTOW, PHILIP K.
Wocd,

Times,

JOHN

BUTCHER,

FRANCIS

Leeds

BASSETT.

Atlanta

New

BRUCE. MALCOLM C.
Conrad, Bruce & Co., San Francisco

BUSH,

Co., New York
Jr.,

Bartow

Co,,

New York

CLARENCE

BARTOW,

Co.,

KENNETH

York

Puerto

P.*

Company,

Department,

EDWARD

Treasury

BROWNE,

BRYCE,

Co.,

New

York

Inc.,

Charlotte

A.*

Co.,

Development Bank,
.

PATRICK

CARBERRY,
Wall

Street

Journal,

New

Hilliard

CAREY.

CHARLES

Harris Trust

CARRINGTON,
Ira

Haupt

Son,

Savings Bank, Chicago

WILLIAM G.
Co.,

New

York

140

Broadway

New York 15

Fifth Ave.

44th St.

New York 18

Madison Ave.

60th St.

New York 21

CARROLL,
Lee

CARTER,

Capital Funds $375,000,000

Louisville

A *

LEE W.
Carroll &

Co.,

*Denctes Mr. and Mrs.

York

CARDWELL, MARION H.
J.

Courts

page

Co., Nashville

Broome

BUSCAGLIA,

Inc.,

BARTLETT, GEORGE L.
Thomson & McKinnon, New York

Puerto

Inc.,

Crouter

CROWELL, WARREN II.*
Crowell, Weedon & Co., Los Angeles

AUSTIN

Government

EUGENE

BARRY,

BIRD,

Co.,

JOHN

Company, Detroit

GORDON*
Townsend,
Bodine, Philadelphia
&

CULBERTSON, WILLIAM H*

Smithers & Co.,

CORRINGTON,

DeHaven

Chicago
Jr.,

Lexington
New

Co.,

JOHN

Barret,

FRANCIS

Witter

Burke

York

WILLIAM K.*
& Boyce,
Philadelphia

Brothers

Kansas

WALTER

Chicago

CROUTER,
of New York,

Van Ingen & Co.,

COOPER,

Cleveland

Atlanta

Atwill

ROBERT

Co.,

Co., Philadelphia

Stockton

BURKE,

New

BAREINGTON, CHARLES S.
Harry Downs & Co., New York

Barr

COOK,

CROUSE, CHARLES B.

E.*

York

New

Davis

Crouse

A. HALSEY
The National City Bank

York

Bank,

Baltimore

SEYMOUR*

BARRET,

Corporation,

York

New

COOK,

Corporation,

LOUIS

Paul

ROBERT

BROWN,

The

PHILLIPS

Bond

BARCLAY,

BELL.

Jr.,
&

BROOME,

Clark,

ARTHUR

NEIL

BANEY,

New

Chicago

CROSS.

CLARKE,

Jenkins Co.,

Emch

Reynolds

Richardson

Harold

CHARLES

Brew

BRYANT,

BAKER, RALPH D.

Inc.,

Securities

New

CALVIN M.
& Co.,

Hallgarten

BREWER, ORLANDO S.*
Phelps, Fenn & Co., New York

Cleveland

Co.,

BALLARD.

Barr

Baltimore,

Company of Georgia,

BRYAN,

M.*

Becker

BARR.

Ingen & Co.,

EMMETT

Inc., New York

ROBERT

New

ANDREW

Stein

Co.

& Co.,

CROSS,

V.*

Bank

Jacksonville

JOSEPH

BRAYSHAW, DONALD B.*
Lord, Abbett & Co., Atlanta

Dean

Miami

Company,

ALFRED

BAIRD,

The

Asiel

Condon, Inc., Chicago

Richmond

A.*

BROOME, Jr., STOCKTON

WILLIAM*

Jr.,

'Atwill

AVERELL,

BRAY,

New

ARTHURS, ADDISON W.*
Arthurs, Lestrange & Co., Pittsburgh
ASHPLANT.

CROLL,

Co.,

National

Jacksonville,

Chicago

JAMES

Atlantic

Guaranty Trust Company of New York,
Arries

The

Company,

WALTER W.*

Craigie

S. WHITNEY
Howard, Incorporated, Boston

Brooke

Toledo

Van

CRANFORD,

.■■■■■HM-.-,1

BROOKE,

Incorporated,

Co.,

ARRIES, DON E.
D.

Montreal

RAYMONB

American

Co., New York

CLARK, WILLIAM*
Merrill, Turben Ac Co.,

Inc.,

Guaranty Trust Company of New York,
New York
CRAIG IE,
F.

Quinlan,

JOSEPH

CONNELY,

New

Services,

CRAFT, ROBERT H.*

Bullock.

Diversified

Investors

K.
&

Collins

CONDON,

Omaha

ROBERT

Inc.,

E.*

BRICK, JOHN
Kidder, Peabody & Co., New York

H. WILSON*

JULIEN

McDougal

Jacksonville

York

Boyce, Baltimore

C. Bradford

BREW,

Incorporated,

Burr,

Co.,

BRADFORD.

Trust

Nashville

ARNHOLD,

Julien

CONDON,

CLARKE, HAGOOD*
Johnson, Lane, Space

BOYNTON, ELWOOD D.
Hallgarten & Co., New

Eaton

Norris

COLLINS,

J.*

Securities

EARL

HENRY

BRADLEY.

York

Geo.

Collier,

City

PREVOST*

ANDERSON, Jr., WILLIAM J.
Equitable

Trust

Blyth & Co.,

Strudwick,

BOYD,

ANDERSON, HERBERT R.
Distributors Group, Incorporated,
New

the

MEREDITH

Stein Bros,

ANDERSEN, JONAS C.
Kuhn, Loeb & Co., New York
Anderson

COLLIER,

Cleveland

Baltimore

BOYCE,

EDWARD

Bank

New York

HARCOURT

ANDERSON,

Inc.,

HENRY WALLACE*
& Co., New York

Cohu

D.*

Co.,

JOHN

GEORGE

Calvin

National

Mercantile

AMORY,

COHU,

Corporation,

Pressprich &

CLARK,

York, New York

BOVCE.

Boston

FRANCIS

Chase

of New

Kidder,

Huey
Jr.,

New

Rico

Chicago

Co.,

Company,

Atlanta

York

CRABB,

York

B.*

FRANCIS

and

Co.,

C.*

COWGILL, ELVYN S.»
Delaware
Fund
Distributors,

York

New York

AMAZEEN, EDWARD S.*
Coffin & Burr, Incorporated,
AMES,

Boston

WARREN

Adamex

BORKLAND, Jr., ERNEST W.*
Tucker, Anthony & Co., New York

York

New

Bank,

York

New

Minneapolis

York

CLARK,

Co.,

WILLIAM

First

CLAPP,

Development

New

COHEN. MORTIMER A.*
Sterne, Agee & Leach, Montgomery

Allyn & Co., Chicago

ALTGELT,

Government
Puerto

New

Co.,

MALON

Courts

COGGESHALL, GEORGE K.*
Schoellkopf, Hutton & Pomeroy,

New York

COURTS, RICHARD W.
Courts & Co.,
Atlanta

Company,

Murch

Chiles,

Inc., Detroit

CLIFFORD, HARRY C.
Kidder, Peabody &, Co.,

DALTON

Hirsch

COURTS,

CHILES,

Gregory, New York

BONNIWELL,

Allyn & Co., Chicago

Trust Co.,

Childress

Chicago

Co.,
J.

COUIG,

CLEAVER, JAMES P.
Goodbody & Co., New York

Fenner

GEORGE

CHILDRESS,
&

Sattley & Co.,

Bonner

New York

Jr.,

New

F.*

Bolger

FREDERICK

New

Securities

The

BONNER, DOUGLAS G.*

Inc.,

Co.,

ARTHUR

Bank

CIIANNER,

CHAPPELL,

Columbus

Inc.,

Maynard

LAWRENCE

JOHN

Shillinglaw,
BOLTON,

Francisco

Pierce,

CHAPMAN,
H.

EWING T.*
Ohio
Company,

The

Harris &

ALLEY, WILLIAM M.*
A.

Association,

•

CHAPMAN, RALPH
Farwell, Chapman

Bankers

Eastman, Dillon & Co., New York

Chicago

ERWIN

BOGERT, Jr.,

ALLEN, SIDNEY P.
San Francisco Chronicle,

ALLYN,

Cleveland,

Chicago

Clayton Securities Corp., Boston

Company,

Lynch,

Chemical

City Bank of

Chicago

BOLES,

W. »
Clarke "& Co.,

CLAYTON, C. COMSTOCK

F.*

JOHN

John W.

Beane, New York

Channer

Investment

RAY

Stranahan,

San

ROBERT

National

BOEHMLER,

Inc.,

CLAIR

CHAMBERLAIN,

Boston

Orlando

Inc.,

MONROE

Wheeler

ALLEN,

Company,

Cleveland

ALEXISSON, GUSTAVE A.
Granbery, Marache & Co., New York
ALLEMAN,

and

Company, * ;
Chicago

Cassell

CLARKE,

and

Charlottesville

Merrill

S.»

Byllesby

Philadelphia

The

ALDRICH,

Howard, Incorporated,

SIDNEY

DOUGLAS

Allyn

CECIL,

BLAKE.

Louisville

Inc.,

Co.,

CYRUS B.

ALDINGER,

Fordon,

Leach.

Boston

WILLIAM O.

Jr.,

O'Neal-Alden

Eaton

RICHER*

CASSELL,

L.
-

AGEE,

Incorporated,

McCORMICK

EDWARD

Jr.,
&

HUGH

Co.,

Atlanta

Newark

Member Federal Deposit Insurance

Corporation

Rockefeller Plaza

New York 20

50th St.

■

The Commercial and Financial

(2294)

Chronicle... Thursday, December 14, 1950

Sharp Decline in Industrial Security Offerings
Industrial Securities Committee,

delivering the report of the

Industrial Securities Committee to
Investment Bankers Associa¬

of industrial

tion Of America

wood, Fla.
Dec.

W. MacArthur

-of Paine, Web-

Jackson

ber,
&

Curtis,

re-

that

vealed

disappointingly small.

1, Robert

plants and facilities,

has

continued

.current

year

working
and

scale

capital,

both.

Debt

equity financing on a large
publicly usually have oc-

curred

times in the past,

such

mittee report of last year pointed
out until the latter part of 1949

there had not been favorable

mar-

favorable

ket conditions in about three years
for the latter type of financing

stock

and

and, despite
R.

MacArthur

market,

The text of the Committee s re-

port follows:
^

of review, the peak of

way

postwar industrial financing for
refundings, working capital and

expansion

plant

1946 when

bonds

some

was

reached

$3,701,000,000 of

and, stocks

offered

were

bpth publicly and privately. This
amounted

neaily

of jall

55%

sharp drop

stated

1948 and

then

offerings

oc-

receded further in

that

the

outlook

for

"volume"

standpoint,

1950 will prove to have been the
in at least 14 years on the

best

hag

Traditionally,

and

have

periods

pros-

reflected in a
active stock market
been

and
industrial

will

in¬

threat

been

double

The latter have

now

com¬

running in

become

the

eQuiby issues.
At the spring meeting of the
A at White Sulphur, this Com-

larg-

nuttee reported on the strong
trend to private placement of inward P^^J" capital expendi- added impetus and growth by the dustrial securities. We believe it
tures. Manufacturing companies cPpI1Pi+fpB
.ir>^r»nhwi
is important in this report to reThe Korean War has caused of the investment banker. This
American business to revise up- evolutionary development, given
Ant nf

have a

P°rt)

of 1950—an all-time

full

year,-outlays

billion,

lion in

-+-

industrial

So far it has not.

into

increase

thev

have

volume

1945

nancing for this

debt

______

vs.

PRIVATE
gross

INDUSTRIAL

FINANCING

proceeds in millions of dollars)

1948

♦Publicly

♦^Privately

Industrial

Offerings

Offered

Placed

Offerings

^2,026

34.3%

$1,344

$682

54.8

1,408

2,293

42.4

1,201

2,809

40.2

2,187

36.7

33.7%
38.0

56.2

801

2,008

71.5

663

1,524

69.7

1,331

f502

t829

62.3

—$14,796

$6,804

$7,992

$621

$1,102

______

Mos.

1950

Total

fi-

Corporate

1.541

1949
9

% of Total

3,701
2,742

1947

will

taxes

purpose

Issues

1946

securities.

interpret the future of investment
' Continued on
* ■
'
- page 31

se-

Industrial

The impact and

High

effect.
the

figurGq

Priv. Placed

The

uncertainty of higher taxes may,
despite government urging, delay
many large expansion plans being
put

'■•All

expan¬

facilities.

with favorable market conditions,
will result in' an increased public
new

these

will

economy

industrial

question is whether this, together

PUBLIC

Year—

flow

(Estimated

preparedness
of

unties through investment bank-

total $7.8

may

compared with $7.2 bil¬

undoubtedly force further
sion

public offerings of industrial

high. For the

1949.

10^

W1^ continue to expand and to -peat. these figures as they have
planned outlay of shut off a substantial volume of vital significance in attempting to

$4.4 billion in the last six months

f9
f9

and fur-

ther accentuate the private

Months
Months

1949
1949

*SEC data.

place¬
ment trend. New equity financing

STATE

hard

not

est and most effective competitors

by Industrial Companies

to a Securities and Extion of 1949. The volume for that change Commission statistical re-v^y

U. S. GOVERNMENT

are

ments with insurance companies.

volume handled in the same por- (according

expansion requir- perior (roughly 421,894,596 shares)

insurance

are

plant & Equipment Expenditures
1950

of life

at 197.7.

New York Stock

Exchange. In the
1949. 1950 will register the lowest first 10 months of 1950, the turnvolume level in years, notably in
over
of skares on the Big Board
public offerings.
perity
rising

invested

competitive

»3llljon monthly, or
several billion dollars annually
m0^f. * an
avera§e yearly
fjncj gell and lease-back arrange- Public and private offerings of
hients may have in part, reduced corporate
securities in recent
the need for new capital for ex- years- It is obvious that insurance
pansion purposes. Purchases of companies will continue to abcompanies by charitable institu- sor':) a substantial portion of all
Hons have also kept a fairly large corporate offerings and be the
volume of new stock issues from determining factor in marketing
the
market,
but
this will no terms. The investment banker,
longer be a factor in view of the even though he shares in some
changes in the tax bill. Businesses Par*
Pnyate placement busiin general have built up strong ,nesf> ls
ng relegated to the
working
capital
positions
and background. . Public
bidding on
these funds, together with serial ujuity issues has reduced profits
bank loans, also have reduced the 0
"ie industry to a historically
necessity of seeking money pub- ^ow level and has increased comlicly. Government loans have and roitnient hazards. The trend of
will be an increasingly large fac- Prlva|-e placements of industrial
tor.
securities (mostly debt and preThe mgin reason for the reced- ferrecJ stock) also has unfavorable
jng flow publicly of industrial is- long-term implications, particusues is indisputably private placela^ly from the standpoint of new
securities

trial

(From

about even in

this

volume .of publicly offered indus-

offerings of new industrial ■> The typical or average indusequities depended primarily on trial stock recently sold at the
the general stock market. That highest level in about 21 years,
observation was certainly war- This statement is based on Standranted on the basis of past ex- urd & Poor's weekly index of 365
periencej
but
despite excellent industrial stocks which reached a
market conditions and expansion >1950 high on Oct. 25 at 171.4. Latj0f industrial plant and facilities, ter figure is the highest for this
new
public offerings were dis- index since the fourth week of
appointingly small.
October, 1929. Incidentally, the
•;
1950 high is only 13.3% below the
IVIarket Conditions 1950 all-time high registered in 1929

corporate offerings.
curred in 1947, held

have to be

crease

vestments

full year since 1937 when the
volume totalled 409,464,570 shares.
If this year's aggregate volume
tops the 496,046,869 figure in 1936
(a good possibility) it will be the
biggest volume in 17 years (or
since 1933, when 654,816,452 shares
were handled).
Price-wise,, this "mid-century"
year of 1950 will also go down in
history as a banner year. Already
in 1950 more than 75 stocks have
attained new all-time highs.
any

they "were disappointingly small." ;1950
rru

The tremendous pressure of funds

handled in publicly will be penalized by
panies alone
high tax structure,
;
The
reasons
for a shrinking excess

ing funds for additional plant or exceeded the business

mitted the distribution of securities of new companies. The Com-

industrial

panies is fostered by this method.

year were

...

Favorable markets also have per-

securities

time

some

the future. It is estimated that in¬
*

decline in

new

for

Debt rather than

equity fi¬
nancing by large and small com¬

Reveals continued high level of private placements.

offerings of

the

industrial offerings in current

new

channels

come.

that

Holly¬

ing

Mac-

Arthur, points out, despite excellent stock market conditions and expansion

Convention

Annual

39th

the

of Robert W.

under chairmanship

Figures obtained from Division of Trading and Exchanges.

^Substantially in the form of debt.

CORPORATE

OFFERINGS

SECURITIES

(Taken From SEC Statistical Bulletins)

and

Including Private Placements and Unregistered Issues but Excluding Commercial Bank Term Loans
Proposed Uses of Net Proceeds

(OOO's Omitted)-

8 Months Ended

MUNICIPAL

All

corporate

„

Plant & equipment

Working capital
Retirement

$6,756,582

$3,141,847

Funded

—

total-_

debt

Preferred stock

Other purposes

Percent of

4,606,326

5,929,280

4,590,540

3,278,828

-77.29

85.20

79.99

48.53

18.30

20.91

2,078,236

3,724,165

4,220,880
1,708,400
795,722

3,408,523

637,803

251,757

1,182,017

2,114,682
1,164,146

1,707.931

3,246,302

635,46-3

1,321,974 '

882,160

1,038,099

2,438,063

total__

11.43

26.42

48.05

79.45

77.60

239,961

1,155,191

488,278

81,855

67,484

356,304
196,436

4,116,897
134,009

2,037,505

637,133
40,542

2,391,919
378,786
475,597

437,917

351,486

230,329

314,835

234,044

1-37,582

231,452

133,076

46,818

5.40

5.28

3.36

2.59

3.42

2.25

1.49

49,071

State, Municipal and Revenue

TRUST COMPANY
Founded 1824

Broadway, New York

405,210

4,688,823

17.41

Bonds

442,042
•

360,424

31.00

Chemical,
bank

656,967

859,456

debt

Other

UM;

380,663

Percent

DEPARTMENT

1944

$6/-36.053

1948

63.6

money
Percent of total

BOND

1945

$6,959,046

$5,901,744
1,079.844

$4,266,005
2,713,702

New

BONDS

194(i

$5,959 260

1949

Aug. 31, 1950

]

Lehman Brothers

Volume

Number 4968

172

The Commercial and

Financial

Chronicle

(2295)

Why Government Bond Prices Declined
The

Securities

Governmental

Committee

the

IBA Governmental Securities

Investment

Association

Bankers

chair¬

is George

man

Kneass,

Vice

the

Philadelphia

Nov.

39th

low,

t i

and the issuance of Regulation X

continu-

Rnavri
Federal Reserve Board to control

policy of gradually achieving
evenly
balanced
debt

and

expansion

of credit or their impact on "serious
the Government securities mar- 'Department,
ket. Time alone will give the an\
r>
i
(2) Based
swer
as
to the

Reserve

report

certificates

billion

boSds,
after

policy
in
the
long-term
began to sell Victory
and other long-term bonds. Prices
of this particular issue declined
and

months

has

end

been

about

for

the

business

banks.

the

first

part

six

took

months

any

place
the

Controls

While it

1V2 %

Federal

the

Reserve

restraint

The

rediscount

Banks

was

this

of
rate

raised

for

from

to 1%%, causing an imme-

diate rise in the

year,

the

1.30%

.bjll rate by y8%

area,

with

other

short and medium term securities

was our

judgment that

March

—

tions, which would have seriously
drained Treasury balances.
The

and

dJ1Q?1

been

became
lions of

unfortunate that these

issues

were

curve

where

placed

the

were

owners
new

(1) From the standpoint of the
we were impressed by
approximately $60 bil—
of Treasury paper fell due

Treasury,
lion

that

before
were

the

all

end

refunded

this

1952

ma-

1951V
into

some

with

severe

vnlvln In

Phasizea tnat alter taxes tne ne
9°
®.a F11
increase m rates
*s negiitoiDie.
The

banking system, limited

""^dlIdniea DdnK crecui exten•

While

have
for

non-bank, long-term in¬
as

whole

substantial

that

versed

believe

tWg

vestments may under these circumstances be too liquid.
.

Bank
i

As an example of the larger institutions, figures available from
reports on New York City banks

„

ing

a(jvised

and

tional

investors

0fferjng_ We believe it is also better fjscai policy to avoid the issuance

of redeemable debt to these

buyers.
We

recognized that one of the

major pr°Wems_ confronting the
treasury

possible

jjeparimeni

redesign

tbe

much
ngw

Sales

Altocna

Providence

and

Baltimore

Reading

Chicago

Philadelphia
Branch

Offices

Lowell

Scranton

115

New Bedford

Continued

Springfield

Broadway

Wilkes-Barre
,

Correspondent Wires to:

Exchange

Newport

Dallas, Seattle, Atlanta, Washington, D. C., Buffalo

Tel. BArclay 7-8800

Series

to capture

possible not only of

Langley & Co.

Members New York Stock

was

the

£undg 0f smau savers but

W. C.

manner

SECURITIES

iN^ew York Qurb Exchange

Boston

New York

Albany

I-'

such

recognize the marked
0f non-bank institufor this type of

preference

Municipal Bonds

1865

whethe?

restrictions

fNfjiu York and \Boston Stock Exchanges

that

0fferjng be made irrespective
of
the Treasury Department is in immediate need of any
new money at the particular time
wben non-bank funds are availr
able for purchase. We stressed our
recommendations of a marketable
iggue as we believed that the
Treasury as a seller would be well

INDUSTRIAL and MUNICIPAL

V FOUNDED

^Members

aa Reguxveguas

KIDDER, PEABODY & CO.
-

re.

particu_

We suggest

power

Preferred and Unlisted Common Stocks

se-

probable

lending.
Because of the desirability of capturing such non-bank funds, we
suggested that the Treasury Department make available to these
investorS an appropriate longt
marketable non-eligible issue as soon as there is evidence of

DEALERS

bil¬

now

due to current and possibly

UNDERWRITERS-DISTRIBUTORS

Corporation Bonds

1951*

sometime in

"E" bond in

Liquidity

not

available

ma/be

situatiorl

PUBLIC UTILITY, RAILROAD

State and

funds

pUrchases of Government

curities,

it has been by the scarcity of intermediate and longer .term in-

Excessive

econ-i

small

Regulataion

Trading Markets in

over-all

^ i
penalty
If 1 MpI"
GovernmenfTfor tbe nnrnncTe S
„nXarr^tPrf bank ri SL 5
relaWlv

notes.

The reinstitution of

yield

rates

interest

true that certain of the latter may

fact

institu-

make it difficult to curb

may

Since larly
was

1952. This was Predi- ings of the new issue to provide
cate<* uP°n two primary consider- some greater ability to employ
a^lonsmarketcontrols.lt should be em,

the

inflationary

Federal Reserve System therefore

5-year maturities carrying 1%%
1 lk % coupons. While it may

and

have

ihp

adjustments.

April,

and

with 4 1/3

Prefer obliSations of shorter term,
W°Ujd app.fr that th^e could
!?erm ^ aY2 a J? I1"011?
^
vf Federal Reserve
-5an^' which are in a position to
provide the market with ample
both of the short term P&Per. In+ addition it
might permit the latter msti uyond the tions> to acquire sufficient hold-

appropriate
price , turitieirit'wourd "be added to $17
Simultaneously, the ,billion of bonds bearing 2% to
ies and savings institutions which Treasury Department, due possi- 2V2%
interest
callable
in
that
needed
funds
to take
up
other bly to uncertainties abroad, an- year. Thus, the Treasury could be
commitments, such as mortgages nounced the offering of 13-month faced with a refunding problem
and term loans to corporations.
11/4 % notes to refund nearly $14 of $77 billion exclusive of Series
The smaller insurance companies billion bonds and certificates ma- < "E", "F" and "G" maturities and
and pension funds apparently ab¬ turing in September and October.,
sorbed
a
substantial
amount of As a result of this conflict in pol¬
securities in the ineligible group icy. the Open Market Committee "
as prices declined.
felt it
advisable to purchase a
In December 1949, the Treasury large portion of these maturing
altered
its practice of one-year obligations selling other holdings at the new yield curve in order to
refundings by offering to holders
of bonds maturing in December, prevent too heavy cash redemp¬
in

for

b nTHprc

refunding of one or

these
of

further restrictions such
° V a". I
.«.«.«
I involved beyond the cost of one- iatjon x on mortgage

experiVndng

(largely bank eligible)
by the bigger insurance Icompan-

again

category

member of

steps

Member

securities

and

borrowing

-no

the commercial
inflationary influences

trend.

was
accomplished in the face of
"continued sales of Government

Treasury Notes

the

Board in August took the first of

change in price. This li¬
by the Federal, which

most

Credit

earlier than seasonal rise ift loans

three

quidation

„pprnprl

about

material

the present interrepresented

face

lsld®ra1,tl°n«°»■'y®S• borr.0™in®- Thls T>"ld
fvjp
confronting-achieve a better spacing of the
'
debt and tend to remove some of
f<® s,e®m®d kmLP
£? pnCe fV «a ty of paper, "3
*b® £_2.6 b ion 1%% bonds this area Late figures reveal that
! about one-half of the maturing
°," non-bank «uest;0n a^Kbeld, b/
ISSUe£
December ^
15
and
January
1.
investors. While it is
t

the

increase

this banking system liquid-;

vestors
on

area

£1,

^ilTtfvefv
ine relatively

Treasury

est curve, it seemed to us that the

® ®.,ilXVvV

increased,

without

....

U^rJth®?e.STSS2!

^
P
"nd®:rt°°*
.

rise continued their

war

50%,

million

Jap?PTi!
the United Nations in the Korean
^ ™™ld.
^
brought about a dramatic
wi +bi^
rS
change in the economy. This was
^
evidenced
by
heavy
consumerg
nrnSSln
a"
buying in July and August and an p
a 1 JfAf S J

or $2V2 bil¬
lion, by the middle of September,
Since that time it has purchased

$700

T4."

Victory 2V2s,

the

brief

the

Trust

to be

prove

...

cheapest

Treasury Debt Problem

and

Our participation as a

support
point. Holdings of the
Federal Reserve System of bonds
in the over-five-years class had
declined

such

national

ity
the

two

considered

June

Post-Korea

Sep¬

past

the

indebted-

might
problem to

the

this

special

issues

5-year

orderly decline.

gradually from 103 10/32 to a bot¬
tom
of
100 26/32,
which
was
the

actions.

of
of

+uir.

strengthened the prices for bank
eligible
issues,
butineligible

inactivity

the

due

for

these

in-

July into
13-month l'/4% notes.'This action

ness

Market Committee last December
abandoned its six months'

and

decision

the

effectiveness

Treasury to announce early in
May its intent to refund the $11 "t

government bond prices reversed

around

have had

may

the vol-

ume

in
keeping
the
tight caused both

market

development

.the upward trend of the
previous
year.
The Federal Reserve Open

tember,

W^.H,V.U5™

Fund

money

deficit financing

representing

degree of their effect

obligations in the
maturity range. However,
the aggressive policy of the Fed-

During the past twelve months

reached

+Ho+

Govern¬

portfolios

pressures

belief that maturities

magnitude

middle

The

follows:

market

Hoiiof

AM,

our

one-third

fluence

the

loans

exclusive

issues to sell at discounts and this

consumers'

debt

suggestions for changes in Treas¬
ury financing policies.
text

than

start

eral

full

any

and real estate financing. It is too
early as yet to appraise either the

represented

removing the scarcity value of

opments during 1950 in the Gov¬
ernment Bond Market and made

The

exclusive of

their

loan

measures
measures"* of the which might be necessary. It was
oT'the wMcTmigM"be nTcessary!'It'was

further

were

report re¬
viewed devel¬

George B. Kneass

beginning

be
hoped to be

Government

Holly wood
Florida.

marked

structure

was

ing

Annual

Convention
me e

what

the

substantial

omy,

its

to 29.6%

holdings and this despite

very

29,

the total bills,

ment

pre-

sented

report

22.5%

revamped Series "E" Bonds.

during the period June

November 8,

tions.

long-term Treasury issue and

National

Bank,

14 to

certificates and bonds due within
twelve months owned rose from

proval rise in Treasury rates for short-term obligations, together with policy of
refunding one-year issues into five-year maturities. Advocates new non-bank

Presi¬

dent

show that

notes

heavy sale by both Federal Reserve and investment institutions of long-term
issues, resulting in decline in quotations near to par value. Notes with ap¬

America,

whose

Committee, headed by George B. Kneass,

New York 6, N. Y.

page

The Commercial and Financial Chronicle
24

Cites Importance of
Public Relations

lished by

of Life
tells IBA Convention, organized

relations

business

Insurance,

such

of business.

part

Describes his

own or¬

late

insurance

Fla.,

Hollywood,
Holgar J.

Johnson, Pres¬
ide

the

t of

institute
life

now

iz e d
public relaefforts

necessary

part

of all business

activity.
"There
three

are

basic

reasons

un-

Holgar J.

Johnson

the
need and importance of public relations work," Mr. Johnson said,
derlying

"So

important

business

can

know

broad

very

the

business intimately

business,

life

that

the

adjust itself to pub¬

can

pub¬

lic attitude before it becomes

lic

"Any public relations program
has

only

and

carefully planned

developed,"

Johnson

Mr.

con¬

"It has to be related not

tinued.

the specific business in¬

they

are

expect

that no

and
appraise its character on a volved, but also to outside condi¬
neighborhood plane.
;V tions in the whole realm pf eco¬
"Second, economic' and social
nomics, politics " and social rela¬
conditions have developed in the
tionships.^ What is more, the pro¬
public a more inquiring mind con¬
gram must be kept flexible and
cerning business. Education and
meet the changes in surrounding
inter-relationships of common in¬
conditions that are constantly de¬
terests have made the public con¬
veloping.
•
':■ j:\v
scious of what business means to
"One of the important consid¬
the community. People generally
erations in any public relations
want to know more about busi-<
program
is
recognition of the
ness, what it is doing, how it
many publics interested. There is
serves
the community, its overnot just one mass public of 150,cilaracter and performance,
*
000,000 Americans; rather there

endure

with public goodwill and
consequent success if it does not
carry
out
the public relations

Thlrd. more than ever belore

function promptly,

effectively and

it is public opinion that, in the
last analysis, decides how a business

must operate if it is to con-

"The first of these reasons is the

are

Discussing the work of the In-

the

age,

sex,

dividuals

characteris¬
carried

information

The

tics.

viewpoints

back

the

near

aware

of loose talk

future. We have been
as

to the effect

holders of savings bonds of
declines
in
purchasing

upon

further
power

less

of the dollar. It was need¬
emphasize here that such

bank

cies

and

owners

deposits, insurance poli¬
fixed investments. This

conducting

Committee has been

of the savings bond setup
and has presented its suggestions
to the Treasury.
It was apparent to the Commit¬
tee that the yield on Treasury

Notes,
Series D, now
for
twelve months
and
for a three-year holding,

Savings
1.08%

1.40%

attractive to buyers un¬

not

was

this

and

tern,

indicated by

was

This

sales.

trend

the

type

demonstrated its popu¬
larity with the non-bank investor
rate

interest

the

buyer. It was also suggested that
interest to the 15th of the month

paid holders tendering notes
payment of income taxes.

be
in

Deficit

The prospect of a great

Governmental

certain.

must

program

activity

integrated

and down the line of

personnel, from top to bottom. No
one

man

business
tions

and

can

Everyone in the

the load.

carry

department

one

public

making

they

will

rela¬

good

increase

expenditures

The increase in

appropriations

defense

over

$30 billion last July will not mean
cash

outlays
fiscal

this

year

Nevertheless
the

that
for
we

that

will

assumed

expenditures

total

than

expect to receive through

can

bad, according to how they fit in

income

with the over-all objectives. Per¬

formance is

financing sometime next year.

the

real

cue

relations

public

and

merely talk his
graces of the

ly summed

90%
the

FINANCE

way

can

one

said

the

source

basic

the

and

the

MINNEAPOLIS

DETROIT

WEBBER,

CLEVELAND

JACKSON

AKRON
CONCORD

PROVIDENCE
ST. PAUL

& CURTIS

division

press

editors

iters

found

LOS ANGELES

life

the

.Members New York Stock Exchange
and other principal Stock and
'

Commodity Exchanges-

MILWAUKEE

CHICAGO

investor,; slow the

establish

ticularly

the short end. They

banking sys¬

should resort to the
tem

which will

rate policy

reasonable flexibility par¬

allow

for

other

not reasonably

are

means

only when

money

new

available.
We
may

and

are

confident

accomplished by the full
cooperation,

understanding

which

sources.

deficit

expect

Committee

publics,
its

interests

the

and the
Board which are

Department

Federal Reserve

authorities

whom this

upon

responsibility rests.

Respectfully submitted,

Kneass,

George

Robert

Blyth;

Committee
Chairman;
Oscar l.

Robert

Buhr; Aims C. Coney;
H.

Stewart

Craft;

Robert

A, Dunn;

Gilbert, Jr.; Shel¬

don R. Green;

Henry M. Hart;

Hardin H. Hawes; Russell

Kent; Francis M.
ston

Molander; Robert H.

Moulton; Emil J. Pattberg,
K.

Delmont
colm

the

has

Pruyne;
Horace

Pfeffer;

Prosser;

Herbert

Schermerhorn;

Foreign Investments

many

PASADENA

tically all media
tion

other

have

special fields.

been

used

Prac¬

communica¬
in

radio,

newspapers,

motion

pictures

speaking platform.

INVESTMENT SECURITIES

Telephone:

WHitehall 3-9200

magazines,
and

the

New York 4, N. Y.
Teletype: NY

1-515

FOREIGN REPRESENTATIVES

carrying

story of life insurance to the

public,

ejdkn/io/d and SP. PB/eic/i t oecteij dnc.

women's

needs, educational institutions and

Repp;
Ru¬

dolph Smutny; J. W. Speas.

Foreign Securities

30 Broad Street

Jr.;

Mal¬

Sumner

Specialists in

giving

activities,

attention

Knight; Win¬

de¬

Institute

the

between

essential,

Treasury

the

that all this

of the nation's

part

BEVERLY HILLS

the

NEW YORK

non-bank

redemption of savings bonds, and

desired.
keen

WORCESTER

BOSTON

required amount of bonds to

the

insurance informa¬

the

meet

many

special
;

the

press.

diversified

LYNN

whenever

tion

which the

atmosphere under

and

Institute

SPRINGFIELD

Established 1879

DULUTH
GRAND RAPIDS

HARTFORD

PHILADELPHIA

ble

authorities will be able to market

gather and ana¬

country

for

adopted should create a sta¬

to be

sta¬

large

The

mand

fiscal policies

importance that the

in¬

life

the

PAINE,

economy.

central

lyze the facts and figures of the

serve

the
It is therefore of prime

public

and

information

tistical division to

business

other

your

may

im¬

endeavored

national

developing

surance,

conclusion

that

powers

delegated to aid in stabilizing

tell¬

Institute's

had

it
a

and

therefore

necessary."

are

philosophy, Mr. Johnson

that

taxes

can

direct controls

business in

your

Both

plementation of

develop

other

and

in harmony

with higher taxes,

into the good

public interest and 10%

relations

COMMODITIES

good

will

that

gram

public relations is

up,

conducting

Describing

SECURITIES and

anti-inflationary pro¬

public. As frequent¬

ing about it.

LISTED, UNLISTED

of the Treasury.

budgeted

1951-52

amount

may

primarily

continue to be directed
toward

Government Securities

Ahead

Financing

the

operations of the Treasury should

corporate

the

for

strongly

corre¬

to that of
marketable paper. We believed,
therefore, that the Treasury offi¬
cials should give consideration to
the replacement of the "D" Notes

reasonably

sponded

appears

"Then, too, the public relations

SEVENTY YEARS

security
when

continues

opinion that the future financing

present interest rate pat¬

der the

interests.

and

BROKERS

study

business

segment viewpoints and opinions

DEALERS and

result of heavy ma¬

tively

must take into consideration these

DISTRIBUTORS,

would

turities of these bonds in the rela¬

investment

tion, economic status, location and

them and the translation of their

UNDERWRITERS,

which

funds

into the hands of those in¬

innumerable

host of other varying

tinue and prosper."

continuously.

come

with a new issue which would re¬
public differing vive the sales volume of this se¬
curity and provide an attractive
education, occupa¬

<(rnu.

long

also

developments injured all

demand.

area.

difficult for the public

the

g atn

tions

over

It is more

that

have become

its full story to, its cus¬

tomers

Wmfr

told the

business finds it necessary to

convey

Insur¬

members

business

management and its customers
America, under modern conditions. OperNov. 28, ations used to be purely local, out

ance,

between

created

gop

greater apprecia¬

attitudes

public

business

Investment

the

Association

Bankers

Annual

39th

the

Addressing

greater understanding of

Prices Declined

public

the public will

that

way

objec¬

tion of life insurance and to trans¬

ganization's activities.
Convention

the

therefore

and

sary

page

life insur¬

translate the

tive:

from

Why Government Bond

Mr.

instrument,

Johnson said it has a dual

have

public relations efforts have become a neces¬

Insurance, estab¬ Continued

Thursday, December 14, 1950

the life insurance com¬

panies 12 years ago as their pub¬
lic

ance

Holgar J. Johnson, President, Institute

Life

stitute

...

(2296)

ADLER & CO., A. G.

SOFINUR, S. A.

Zurich, Switzerland

Montevideo, Uruguay

Volume

172

Number 4968

The Commercial and Financial Chronicle

Nov.

30, F.

Douglas

Chap¬
Co., Ltd., of
Toronto, released, through Wm.
T. K. Collier of Collier, Norris &
Quinlan, of Montreal, to the 39th

Canadian Securities Committee of IB A,

of A. E. Ames &

ment

Bankers

America,

Association

meeting

Fla., the report

developments of last

Finds

year.

the Canadian

U. S. imports.

the

text of

Canadians

projects.

difficult

realize

foreigners
Not

the

that

United

only because
language

States.

the

have

in.the

tie

total

increase of from

mainly

be¬

the

June,

re¬

lit-

some

184.3

startling
the

end

Par).

cause

ception
we

1949

205.9 for the month

1950

(1935

1939

equals

much

This trend makes it desirable to

policy
the

cost

pro-

was

"pay-as-you-go" basis, and it has been estimated that
the

on a

various

abled

measures

with

adopted

this objective

at
en-

the

government to finance
50% of war expenditures

certain

con¬

budget

disclosed

„

u
employment, and lor doing
s0 W1th°ut aggravating inflationpressures. Moreover, while

H1e Pr°P°pals appeared to offer
the fir®t instalment of the program at 10w inlt^l cost, the tax-

represents

A few statistics

war.

illustrate

this

fact.

Canada

the

United

States

Finance Minister

was

able to

re-

port the fourth consecutive budgetary surplus, each of which ran
into substantial figures In Sep-

ex-

Penditures into an economy al£
^ m a condition of virtually

our

1939,
in millions of dollars, exports from

Trade

side

every

moderate increases

taxes

interim

out of current income,
exports during the last few
There was an expansion in Fedyears, and particularly in the past
eral and Provincial debt from
\2 months.
This is due in large Dec. 31,- 1938, to Dec. 31, 1946, of
measure to the
continuing fact of about $13 billion, but during the
exchange shortage and rigid eco- same period Municipal obligations
nomic
control
in
soft
currency
declined by about $591 million,
areas> particularly in the United
from $1,453 to $862, making an
Kingdom, and the running out of estimated overall debt at the latcredit arrangements which were ter date of about $20 billion.
In
granted
by' Canada in
liberal March,
1950, in presenting his
measure
immediately after the budget for the coming, year, the
0f

wiii

that

receive

in¬

government's plan for fitting

ciose of the

$3,-

months of the year, sea-

sonally adjusted, shows

generous

was

goods.

The
the

dfreetion

primary

estimated

time, but the index volume

first six

United
„

1949

was

du-

total industrial production for the

friends

States,

about

unavoidable

will not be available for

many contacts
with

vide

There has, however, been
important ch'ange in ^

for

920,000,000 and secondary producti°n at $6,100,000,000 with a total
of $9,207,000,000. Figures for 1950

same

and

government's

that time

production

are

speak

percentage of exports to these two

the

sorbed 73.1% of Canadian exports,
In 1949 the figure was 73.9%.

Plication.

little

combined

000,000, with a grand total of $2,859,000,000 after making proper

the report follows:
find

the

economy,

possible

allowances
The

figures.

postwar

nadian

primary production was countries has hardly changed. In
estimated at $1,384,000,000, and 1938 the United States and the
secondary production at $1,714,- United
Kingdom
together
ab-

they affected investment
possibilities for Ameri¬
Canada's

appar-

1938 total

and future

manufacturing is quite

ent

report contained a comprehensive
review of Canadian economic and
financial
developments, particu¬

capital

were

excise

sumer

Sees great possibilities in Canadian oil developments.

tax

corporation

taxes were increased by 5%

and there

income

additional substantial defense

Committee, of which
Chapman is Chairman. The

can

unchanged,

come

Securities

larly

Personal

left

budgetary position sound, with securities markets following American pat¬
tern.
Upholds unpegging of Canadian dollar, and looks for end of restrictions

Hollywood,

tion.

headed by F. Douglas Chapman,

reviews Dominion's economic and financial

Annual Convention of the Invest¬

Mr.

Canada's Progress and Prosperity

man

(2297)

inst.alment might
higher figures.

f,.

Revised: .estimates
and

expenditure

for

revenue

the

current

fiscal year,; as set forth in the
interim budget, reveal that anticipated receipts from the new
taxation ..measures account for
Only. $59 million out of the total
increase of $239 million in revenue.. The remaining $180 million
additional

yield from

taxes at pre-existing rates. For

fiscal year, the yield from the
new taxes is esUmatedlat.about

amounted to 390 and to the United tember of this year, when as a
million T^e only increase
Kingdom 329. In 1947, however, result of the changed international
dpfp^nd~".r® amounts
Canada.
With less than 1%
of the United States took from Can- outlook, it became necessary for
United States.
d^"se. This amounts to $244
the world's population, it is esti- ada exports to a value of 1,057, an interim budget to be passed million, not all of which is exIn giving a
mated that we ranked third in compared with 754-the highest and new taxation introduced, the Pected to
be made during[ the
report on be¬
total
merchandise trade
and
in
postwar volume—to the United Finance Minister announced a sur- Present fiscal period, and which
W. T. K. Collier
half
of
the
exports and in imports in 1949. Kingdom, while in the first nine plus of $292,700,000 in the governCanadian
Se¬
^ to be a warmnS
The present high level of Cana- months of
1950 exports to the ments operations in the five 0± things to come,
curities Committee for the year,
dian exports has been made pos- United States were made at the months
ending Aug. 31, as against
While the current fiscal year
with the background so ably out¬
sible by the adjustment and ex- annual rate of 1,927, against 458
$294,600,000 for the same period seems to be quite a happy situalined by the Chairman of the
look

Committee

last year,

probably want to know how
things are going in Canada just

the United States markets and the

urgent European demands for food

now.

and reconstruction materials, following World War II

Production

period of years Canada
has been changing from a nation
which

was

primarily engaged

the

production of foodstuffs

raw

materials to

Since

and

ably
more

now

value

exnorts
p

threefold,
consider-

enhanced

increase

physical

volume.
Overseas Trade
The

principal export markets of
Canada, have, historically, been
the United

exceeds the

States and

the United

Kingdom. It is somewhat remarkengaged

agriculture.

For the first nine months,
exports to the United States are
year.

stated to have been made at
annual rate

than

unexpectedly

painless

tremendous expansion

made

were

rate" wWch

was

of defense expenditures,
Continued on page 40

same

annual

35%

some

rate wmctl was some

less

the previous year.

Canadian exports to the United

States in September reached

all-time peak of $192,790,000 com¬
pared with $167,100,000 in August
and
$113,701,000 in September,
1949.

Reynolds & Co.

The cumulative total for the

Underwriters—Distributors

first nine months of the year
climbed to $1,433,083,000 against

$1,024,304,000

earlier,

year

Members

National Income

of the Ca-

wmmmmmzsMmmmmmmmmimmzmmzzmmzzm

crease

opera-

able, however, that in spite of the

The effect of the wartime stimulus

tion in which in spite of the in-

1949, while those to

the United Kingdom for the
than

preceding fiscal year. The
interim budget turned out to be

than 26% higher

that of

period

price base, it is
particularly the result of a

substantial

industrial population

has doubled and
number

dollar

and while this reflects

nation in which

rapid rate in Canada than

our

the

merchandise

has increased more than

in any other country, and in that

period,

1939

Canadian

manufacturing is relatively more
important. Since the beginning of
World
War
II, industrialization
has been proceeding at probably
a

our

StSSSSS h0asbee?partdicKuMyTm™tic\ehfs

I think you

will

Over

foreign trade, which
is of the greatest significance to

from the peop 1 e
of the

In the year

1949, it is estimated

New York Stock Exchange

New York Curb Exchangb

that the National Income at factor
cost

was

pared
for

$12,917,000,000

While

1950, it
that, based

has been estimated
on
production, trade
other indices, this year will

and

show

During

further increase

the

over

Midwest Stock Exchange

Chicago Board

New York Cotton Exchangb

Tradb

Commodity

Exchange, Inc.

1949.

were

when

war

Philadelphia-Baltimore Stock Exchange

com¬

$4,289,000,000 in 1939.
figures are available

planning our postwar economy a
figure of $7 to $8 billion was used
as a possible goal for postwar na¬

Underwriters and Distributors

tional

income,

this

far

cry

from the 1949 figure of nearly $13

Investment Securities

120

BROADWAY

•

NEW YORK 5, N. Y.

billion.
Population
Canada's
to

the

population,

latest official

according

estimates, is

given at just under 14,000,000 as'
compared with 11,267,000 in 1939.
Part of this increase is accounted
for by
sons

the addition of 347,000

empire state

when Newfoundland entered

confederation
tion

Brunch Offices

per¬

during

Immigra¬

years

the

1949.

philadelphia,
scranton,

have

Carl M.
61

Loeb, Rhoades & Co.

BROADWAY

NEW YORK 6, N.

look

admitted

forward

new york

1, n. y.

1946-1949

that

addition

chicago, ill.

has been estimated at about 356,500. Many Canadians are hopeful
in

euilding

the

refugees

that

legislation

can

that

pa.

east orange, n. j.

syracuse, n. y.

allentown,

lancaster, pa.

pa.

pottsville, pa.
mor ristown,

york, pa.
j.

winston-salem, n. c.

bridgeton, n.

able

an influx of very desir¬
immigrants particularly from

the British Isles
ern

well

North¬

Europe.
Direct Private Wires to

Budgetary Position
Canadians have been extremely
fortunate in the postwar years in
the results of government financ¬

ing.

During World War II it

was

pinehurst, n. c.

will allow

Detroit, Mich., Baltimore, Md.

Lincoln and Omaha, Neb., Sioux City, la.

Financial Chronicle... Thursday, December

The Commercial and
26

14, 1950

(2298)

Public Power

Private Utilities vs.

tive bidding for

Service Securities Committee of the IBA, under chair¬
manship of Edgar J. Loftus, stresses growing expansion of government power

Hollywood, Fla., the Public Ser¬
vice Securities Committee of the
t"%

As-

Bankers

■

utilities,

■sociation
called

atten¬

tion

threat

na¬

with private companies, ciation and one from National AsBefore the Korean war started, sociation of Railroad and Utility
the privately owned utility com- Commissioners. At the first meetpanies were well along on a pro- ing of the Council held October
gram
of postwar II expansion, 19, 1950, Secretary Chapman adwhich would add about 20 million vised the Council of the responsikilowatts of generating capacity bility of making sure that enough
from the end of 1946 to the be- electric power is made available

petition

tionalization
of the electric

indus¬
embodied
proposals

power

try
in
to

greatly exd the

p a n

number

authorities.

huge

Edgar J. Loftus

the

Noting

expan-

the

program

Korean

the report em-

war,

phasized that the industry is fully
capable of meeting any foreseeable demand arising from the defense

provided no govare imposed on
manufacture
of generating
program

the

equipment. The Committee again
competitive bidding for

scored

unsound, adding that this method of financing
does not always serve the public
utility equities as

which is Edgar J.

S. Dickson & Co.,

Citv

York

NPin

Loftus, of R.

vtiJ

i r*

report

places

Interior

river

fuels.

power".

in a press con¬
ference
after his
State of the
Union Message to congress early
union
Congress eariy

No Power

Shortage
...

expressed the hope of
The Secretary of the
network of has recently appointed a
network of has recently appointed d

year,

seeing
seeing

nation-wide
nation-wide

a
a

Interior

projects non-Federal power projects, and
and that one representing the National
would enter into com- Rural Electric Cooperatives Ass°-

public

for
are

not

ultimately

power

necessary

controls imposed on

ernment

The survey

they

under conditions

now

address

this subject by

editor of The Bond
prepared by us in re¬
form. We will gladly send copies

Phillips Barbour,
Buyer; has been

interested investors,

without cost or

obligation, as long as our

limited supply

lasts.
Because

the

of the

widespread interest in

of this timely

theme

suggest you

analysis we

stated that

is further

faced

were

still

would

electric

result

PREFERRED STOCKS

MUNICIPAL BONDS

Members New
New York

Carl H. Doerge;

Wil¬

W. Sydnor

N. Edwards;

Gilbreath, Jr.; Charles C.

Gla-

Willard A.
Robert Mason; Regi¬

vin; Gail Golliday;

Lynch;

Jr.; Jo¬

nald

Pressprich,

seph

Refsnes; Thomas J.

Reis; David L. Skinner;
dore

Theo¬

Lawrence

Wegener;

Exchange

Produce Exchange

UTILITY STOCKS
111

BROADWAY

expansion
able

program,
meet

501 Seventh

power

supply.

1615 Pitkin Ave.,

NEW YORK 6

program,

vast

616,645,000

107

31,146,400
515,990,000

394,372,900

185

$1,8-36,586,300

$74,500,000
142,744,000
9,000,000

149

$2,121,640,000

Sold

$77,843,500

261,993,864

competitively

37,080,000
$376,917,364

Common

$226,244,000

v.
v

(§)

Stocks-

$113,192,800

223,443,900

$83,444,729
292,980,570

157,067,833

56,820,700
56,161,900

$533,493,132

$449,619,300

287

$3,032,050,496

302

$2,642,449,600

Dealer-Manager
Offered

—

stockholders

(?)

287

Totals

Common

69.1%

70.0%

securities

Preferred

1949

1950

Percentages— (fl)
Debt

12.4

10.3

17.6

stocks
stocks

20.6

NOTES:

be incomplete.
Co. conv. 3% debs., 1959.
Offered to stockholders without underwriting.
Figures are approximate, based on respective offering prices.
Excluding American Telephone & Telegraph Co. financing.
basis

published information, which may

(*)

(t)

Offering of American

($)
(§)
(II)

Telephone & Telegraph

INDUSTRIAL, PUBLIC

UTILITY, RAILROAD

and

MUNICIPAL SECURITIES

UNLISTED TRADING

DEPARTMENT

electric

expansion

necessary to
serve
it is hoped that in
profits tax, considera¬

defense needs,
excess

given to the necessity
raising large funds from the
investing public. The efficiency
and financial stability of the in¬
of-

15 East Broadway
99 Madison Ave.
Brooklyn

Tax

the

tion will be

Ave.

$1,025,077,000

the industry
foreseeable

with

industry's

Commodity Exchange tnc.
Chicago Board of Trade

349 E. 149th St.

Co.

Branches

COMMODITIES

68,800 000

any

Profits

connection

New Orleans Cotton Exchange

WOrth 4-6000

$1,436,195,000

gency.

York Stock Exchange

Qirb Exchange

New York Cotton
New York

and

liam

postwar

foresighted

Excess

RAILROAD BONDS

Bosson;

Chairman; Ed¬
F. Edward

Beatty;

power

demand, due to the present emer¬

send for a copy today.

Ira Haupt &

ample

industry was
able to satisfactorily meet power
demands in World War II. As a

The

In
COMMON STOCKS

if the

even

with a five
year period of intensive war ef¬
fort, the electric industry is capa¬
ble
of
generating
twice
the
amount of power produced during
the five years from 1941 through
1945, and that while the reserves
of
power
would be cut, there
country

recent

growth for the

load

forecast

the

exist. If the growth
of generating facilities is allowed
to proceed without interruption,
the reserve margin of power will
amount to about 20% in 1953. It

ward

generating equip¬

next three years

Edgar J. Loftus,

«iniH nrivn\pUt

has

Investments
the Present Inflation

Negotiated
Sold privately (*)----—
Offered stockholders (f +)

Negotiated S

ment for the utilities.

Committee

Competitively

^ober 25 1950 bv its President
v gutt0.n
y
established defi
ni'tely that faere : Dientv of
Dowpr to mept thp nppL J fhp
country and that the reserve
margjn outi0ok has been changed
b t j.,.,
.
..
DrPcPnt nartial
war emergency The report shows
th , th reserVe margin will be
appr0ximateiv 12% m 1950 The
p™™ ,n forythe vea?s ahead is
dependent on there being no govmanufacture of

Tax Exempt Bonds as

Sold

Institute released Wednesday, Oc-

Defense L
ucicuse T

Advisory Council, whose function
it is to advise him on matters concerning the Industry during the
gested that if Congress sincerely present emergency. The Council
wished
to
effect economies in consists of twenty-one executives
government, a good start could from private utilities, two from
be made
by reducing expendi- federal power projects, five from
that

Securities

Service

Public

Preferred Stocks—

■

A report of the Edison Electric

public power to provide the country with an inexhaustable supply
of electric energy. The report sug-

tures

^
'
Affsv
bidding or shopping-around.
Respectfully submitted,

always possible under competitive

''public

develop

further

President Truman

this

to disappear. The private power
people are in sharp disagreement
with any claims of a power shortage, and contend that certain gov-

will rule over electric ernment officials have been using
power, gas and related oil produc- the present emergency to talk
authorities, tion and distribution, and solid about "power shortages", in order

power

valley
which would blanket the nation,

crease

Act

Production

industry. Various
proposals in Congress would inelectric

investing

public), provided the raising of
SUch capital is preceded by a
well-planned program of educatjng security dealers and their
salesmen. In the public interest,
ft |s necessary to arrive at an
eauitafc)le price and such is not

No. Issues

Committee's

this

larger amounts of equity capital
will hhve to be secured. It is evident from past experience that an
excess profits tax must permit
sufficient inducement to investors, if utilities are to secure the
proper amounts and kind of new
capital for their expansion. It is
also hoped that in considering an
excess profits tax, Congress will
give considerable weight to the
fact that the utility industry al-

-* ..

wt i

■

control
the Spring Meeting, attention of over
telephone, telegraph and
this Association was called to the transit companies under the Dethreat of nationalization
of the partment of Commerce, while the
•

(issuer, banker and the

—Jan. 1 to Nov.

follows-

concerned,

equitable price to all

B. Woodard.
Pub.lic Povyer 4'rklT well 4-known, tions J of the country, and of the
are
rfK
—
,1. • . 1.
and who it is felt might favoi margins of reserve power which express the opinion that competiPUBLIC UTILITY FINANCING
f,ubllc P°,wf at th* expense_ of three months ago appeared to be
20, 1950
Jan. 1 to Nov. 30, 1949the Privately owned companies, comfortable in most regions of
Par Value
No. Issues
Par Value
As finally adopted the Defense the country, are now beginning
Debt Securities—

of the Committee's report,
*•
*

Text

and common

lly companies,

.jj

the Chairman of

through

ferred

Prollls mienqea to do
profits tax
generally be

controls

ernment

sale of pre¬
stocks, at an

the

raised

well regulated in most of
both to the rate of
investment, and to
which
be charged
services,

initiaated by the
privately-owned utilities prior to
sion

as
unsatisfactory. Sub¬
stantial amounts of capital can be

when and where needed to meet'
the expanding requirements of
generating capacity in 1940. The the National Defense Program and
present emergency has stepped up at the same time to take care of
the program of additions. Presi- the requirements of all segments ready is
dent Truman in setting up ma- of the civilian economy. The the states
as
chinery for the administration of Secretary assured the Council that return on
as
emergency controls as authorized he wanted their support, and the prices
may
by the Defense Production Act, promised that the defense powers for their products or
has divided utility supervision intrusted to him would not be Th
f
it follows that the tvne
between the Departments of In- used as a means of advancing
'
tn hp rp
terior and Commerce. There was public interests at the expense of 01 war
an effort on the part of certain private power developments. At captured' by excess
Congressmen to place all control the same meeting, Mr. E. L. Mar- legislation will not
powers and authority in the De- lett, Acting Deputy Administrator nrPoPnt ;n the rase of oublic utilpartment of Commerce. This ob- for Electric Power, and Assistant
.
viously was an attempt to keep Administration of the Bonneville
Competitive Bidding
authority away from the Secre- Power Administration, spoke of
tary of the Interior, whose views power shortages in certain sec4rv
X' 4-t-v T
r* v» ' •* * r\~t n rrl /"4-n rC* ' v% X «* * m . ' mI% ^ ^ ^ _. ' ■ 1 . . __A. —: i ' '2. L. ■ ■
The Committee again wishes to

ginning of 1950, equal to approxirnately 50% of the industry's total

valley

river

;

■

equally

unwarranted. Sees no ground for excess profits taxes
and calls competitive bidding for utilities' stocks unsound. Re¬
veals slight change in character of utility financing.

the

called

the > alternative—so"shopping
around"
is

that

strated

projects, which is held as

Invest ment

utility equities is

unsound. It has also been demon¬

Report of the Public

to the Associa¬
tion's 39th Annual Convention at
report

its

dustry must be maintained if the
defense effort is not to be im¬

paired.

The

expansion program
large sums

will continue to absorb
of

The industry must not
top-heavy with debt, and

money.

become

Laurence M. Marks &
Members

New

New York Curb

49 Wall Street,

Exchange (Associate)

New York 5, New

Telephone HAnover 2-9500

Co.

York Stock Exchange

York

Teletype N.Y. 1-344

Volume

172

Number 4968

The Commercial and

Financial

Chronicle

(2299)

Petroleum and Natural Gas Industries Sound
In

comprehensive

report

The Oil and Natural Gas Securities Committee of the
IBA, whose Chairman
is Winfield H. Perdun, in report say these fuel industries still afford

the 39th Annual Convention of the
Investment

•

Nat¬

and

Gas

ural

curities

Winfield

Perdun

agement. Therefore,

Bar¬
Co.,
New York,
Winfield

of, peculiar

underwriters

and

to the

interest

7Irt

A convenient and reliable bench

portraying

used

valuable

composite financial information concerning the petrolindustry is the "Financial
Analysis of Thirty Oil Companies" published each year by the
Chase National Bank. This study
eum

that

the

1949

year

end

ide industry had a-total of 14

bil-

lion

million

422

rowed

bor-

capital.

The

dollars

invested

and

of this capital investment is highly important to us as
investment bankers, dealers, and
brokers. Borrowings totaled 2 bilmake-up

lion

million

604

dollars,

only

18.0% of the over-all capital em-

minority interests were
preferred stock only 1.2%

ployed;

3.2%,
and

billion 15 million dollars

77.6%

•or

stock and surplus to-

common

taled

further

the

ance

provided

bulk

required

any

new

of which

the

Hail-

Texas.

until April,
1950, supply
ultimately brought into bal¬
with, and even went below,

the

monies reveals that

cal-

bankers

have been largely out of the picture. There is ample room in the
capital

structure

equities

are

day-to-day
There

part of our
as
brokers,

points of in-

industry terest to those having an analytithis means cal turn of mind to the effect that

tageous

For

industry to bor-

any

can

purchase almost

row because of tax features, but,
oil
historically it would appear that and others,
the
public through us has not keter such

(1)

(2)
as

straight

such

stock
S.

crude
Amerada

mar-

Kentucky,

been as satisfactory a source of (3) companies with large foreign
funds as the insurance companies interests such as S. O. New Jerand banks. One disadvantage to sey, (4) companies almost entirely
the borrower arising out of the domestic such as Continental Oil,
private placement of debt, and it (5) companies operating primarily
is a point of which we should be on the West coast such as Union
and

aware

one

which

should

Oil,
(6)
companies
primarily
advantage, is the in- in the Mid Continent area such as
ability of the borrower to retire S. O. Indiana and Phillips, or (7)

use

our

debt at discount levels in the event

primarily

of major interest

such

(d)
a

rate changes.

East

Coast

companies

Atlantic Refining.

Preferred stock comprises
We are all aware of the
unimportant segment of advantages
which
benefit

very

purred m P°sted crude oil price®

tax

oil

than

three

was

tion.
Our

opportunities

under-

writers of petroleum industry securities for the period immedi-

ately

ahead

not

are

too

oil
or

companies
more

are

listed

exchanges.

Large

one

hold-

ings of oil shares are important
segments, in many cases as much
as 20%, of the equity portfolios
of the mutual investment company
shares

which

many

mer-

chandise.
A

jast

that'

imr

this

necesX devote ftself
deerL to discussion of
tors
(J
Ss and
tmnrit ?K) Wh?alfnn
~pc.ur\L hL
a

must

monthq

enmn-

®dl*pZ

troleurn

Absence

insome

this

Drimarv

par;ipd

wouit]

contain

ments

which

some

^on 0£

Texas RR

over

recencv

months

pnntirmpd
anrl

ivan

build

whieh

nroduced

The

aSo,jrp

last

fnrthpr

downturn

the

inJ

pie-

the

194S

of the

ar-

Commission

would

annenr

watrhfiilru>««

thprphv

artinn

signed to regulate production from

anec^
ent

With

fnr

the industry is

wiih

the
some

inventories

economic

ntti+iiHp«

months has caused

such fnc

holders attitudes.

situa^^^^^^^

gmvatrstock
wvi

+.+•

aware

of the

pres¬

nroblems

While statistically the present

\
hrSlv?™!rh rS £rScJtlme for
J?

thl

there

fivp

thpir narf

near

bright, motor
fuel) at the secondarv level

As dealers, the opportunities are
somewhat limited by the fact that
the securities of most recognized

kind of oil stock he wishes:

example,
producers

cal a^justments, no change oc¬

desplte s"arP declines in refiner®
pr°tlts«
SPeaking from an economic

what it

the

the investor

the

other

are some

for more debt, and
could be employed as a source of
funds. Again, it may be advanfor

a large
business

statutory deple-

during the last previous term of excess profits taxa-

War

World

times

tion

later, (e) earnings

the value

ma-

and dividend record, and (f) its
or through equity financing. The recognized advantages in an insource
0f
outstanding borrowed flationary economy, that oil

aggregate.

interest to

chinery

The

money.

money by either retained earnings

the report follows.

text of

of shareholders

wise spending

expect to see the industry obtain nties markets, (d) tax advantages,

public.
,

shows

offerings of securities

not regard them

the petroleum and natural gas

widely

bankers

in-

H. Perdun

ments in both

mark

long-term threat.

(c) The proportion of borrow- 11 for 60 months amortization still
ings is low related to capital em- exists and offers tax advantages,
ployed and most likely will reIt is not surprising that in view
main low because of (1) strong of (a) the industry's importance
treasury positions and (2) finan- to our national well-being, (b) its
cial policy. Accordingly we may capital structures, (c) broad secu-

re¬

develop¬

view its

we as

with confidence.

Smith,
ney
&

investors

the

crease

ean

dustries,

industry

Commission

ii*

demand and aside from minor lo-

reviewed

factor

equilibrium

By
reducing production al¬
lowables beginning in late 1948
and permitting no material in¬

was

serious

The

Holds nationalization of fuel industries

possess.

important

sharply

whose

mittee,

well

their securities

types of

Se¬

Com¬

chairman

cent

road

making opportunities. Foresees little likelihood, however, for stock financing on
large scale, despite expanding investment and the advantages which certain

ciation, meet¬
ing at Holly¬
wood, Fla., the

most

petroleum

money-

Bankers Asso¬

Oil

The

maintaining

appear an opportune
an upward movement ii¥

y touch on foreign developr crude oil pi ices, it should be noteel
'
^
in^vanCS °ccurred hi
A reasonable guess as to the December, 1947, a date now al,

1950 level of oil industry earnings most three years ago, During the
can now he made with consider- interval prices of many other

ahle assurance. For the 30 oil commodities have recorded sizecompanies already referred to, it abie increases.
;
app~ar ^at 1950 net inThe industry has ample shut-ill
crude oil production which could
million

dollars,

which

compares

be produced without harm to

the

Hon.

by loans from bank standing. Requiring a higher cost taxes, it would
appear that (a)
01 1 01111011 4US milll°n dollars.
and
insurance
companies,
this 0f m0ney than public or private
industry invested capital today
Continuance
into
the second
source of funds comprising 66.6/0
debt placement and offering none is about double that of a decade quarter of 1950 of certain trends
•of the total borrowings.
0f the tax advantages of debt and
ago, (b) average 1946-49 earnings which began in mid-1948
genWhat do these figures mean to viewed in the light of the longer were treble those of 1936-39, and erally resulted in first half 1950
lis? Among other things they tell term past trend of industry capi- (c) with a growth of nearly 50%
earings making an unfavorable
«s that:
tal structure, this type of issue in
volume of crude oil output comparison
with
1949.
Second
represented

(a)
not

but

only

large

very

most

tively capitalized

conserva-

Therefore,
occupy a highly

Certain

are

ment

the aggregate,

(b)

Since

the

customers,

largest

four

five year capital expenditure program in

the history of the indusin the years ending

try occurred
with

1949

and

since

the

structure of the industry

capital

emerged

its conservative state, that the

industry

has

both

satisfactory

cash flow and good financial man-

large.
cases

not

too

companies

to need

our

Production totaled 1,140,000 B/D

app^e *Pe
7^ nhn

n/n

Pr°duction rate1 of
ahn

|xc?ss J°*

aD°v|

The prospects for common equity

financing

important position in the invest-

portfolios of

Inter-

Oil

one.

it should and does

the

Compact Commission
a^d^Governor of Oklahoma, advised Resident iruman that sucft
state

has for the t\me being lost its since 1940-41 and with a crude oil half results appear to be the best Proaucins ra*es 01 o,«uu,uuu B/LJ
price nearly 220% of that of 1940- since the first half of 1948.
Continued on page 62
industry appeal to the issuer,

The petroleum industry

is likewise

Roy J.

promising,

would

appear

capital of this kind but in
their needs

are

A deterring factor in

not

some

is the relationship of present

stock prices to book values, which
latter are above market prices,
To the extent that a war or de-

fense program

may require plant
investment of an emergency nature,
the
industry
calls
them
"shot-gun" expenditures and does

CORPORATION

STATE, MUNICIPAL and PUBLIC REVENUE BONDS
Investors

BONDS

seeking legitimate relief from burdensome

taxation should seek

experienced guidance in the selec¬

tion of well secured tax exempt

investments. The

un¬

precedented volume of such investments available in the
present

market makes careful selection most important.

We've built

our

business and

our

reputation

on our

ability to analyze the merits of various State, Municipal
and Public Revenue Bonds from the viewpoint of in¬
vestors' requirements and the soundness of the particu¬

lar issue. We will welcome inquiries regarding bonds
of this type.
$

B. J. VAN

lNGEN 8c

Co.

INC

NEW YORK

CHICAGO

MIAMI

Phelps, Fenn & Co.

Financial Chronicle... Thursday, December 14,

The Commercial and

1950

(2300)

Railroad Securities and the Investor
device

Chairman
is
Bergmann, of R. W.
& Co. of New York,

securities merit greater

submitted to the 39th Annual

complished during the last decade,
Prior reports have also cited to

whose

America,
Charles

Pressprich
was

Convention

organization,

the

Fla.,

Hollywood,

meeting

Nov. 30.
on

unfavorable

the

you

In addition to comment¬

ing

regulatory policy

lete

of railroad modernization programs

factors

competition and the is largely geared to prospective
ceiling such competition tends to earnings rather than the need for
put on railroad rates; the high the improvements.
break-even point and relatively
A
fair-minded
appraisal
of
inflexible costs of railroad opera- fundamentals
will support
the

the continuing unfavorable
of investors toward rail

securities, which is deemed un¬
warranted, the Committee again
ef¬

policy with argument that many railroad sefects
of
subsidized competition respect to rates and fares which is curities are more deserving of inagainst the railroads and the slow,
tion; and a regulatory

called attention to the adverse

obsolete

of the report follows:

Since

there

conflict

rean

marked
in

the outbreak of the

has

been

greatly in need of revision.

The effect of investor

increase

warranted

and

1949,

our

the

which has averbillion dollars annually

aged one
for the last several years.

also appears favorable from
a traffic standpoint.
For the con¬
servative investor the near-term
favorable outlook, as well as the
more fundamental
favorable as¬
years

fnf'rl6"

un-

characteristics can be sold at relatively low
interest cost.
However, the use
of this financing medium is sub-

of the railroad situation,
apparently continue to be over¬
shadowed by other considerations.
Other railroad securities com¬

of their unusual

ject to definite

limitations. There
amount of bond

has been a minor

this have drawn

finnneinc
financing

attention to the improved
earnings and financial position of
the carriers; the great increase in
efficiency of operations which has
been achieved through judicious
expenditures; and the reduction in

your

indebtedness

been

issuance nf equip
of
trust certificates which, be¬

cause

for
for

new

ennvertih e
convertiDie

money

been practically
The greater part

sible.

necessary

imposof the

capital funds has been
depreciation allow-

derived from

which has been ac-

eouitv financequity nnanc

bonds
Donas,

has

ourpui

mnnpv

but, except for one issue

poses

^ef« railroad
in
up

°
C66u tll6 $445

tion that we number among our

there

capital-seeking clients. The attention of our security-buying groups
can also be directed to this probto its

bv educating them as

lem

moortance to
The

solution.

Since the end of World

1
we

^onc%V- a
iem> First

resoonsibilitv

u
have

prob

whom

to preserve

securities.

the soundness of those
Second,
we
have a

«
;

5-4 I

•:

BOND FUND

FRANKLIN
64 Wall

(BALANCED) FUND
request

DISTRIBUTORS,

Inc.

Street, New York 5

The outlook

for

lpvel

high

of traffic volume for the next
eral years, but the

The Oldest Firm in the

demands

specializing in the

they

position for or against the plan
but is watching its progress with

roads, but a compilation covering
class I roads shows that
in 1951 that group will have to
meet over $208 million OI serial
IIlcct
UVC1
^uo
...........
of se.

have as one of their security features a lien on the obligor's equipment. Obviously, the "Equitable

statistics

available

for

Many

interest.

mortgage bonds

carried
to
an
extreme,
° umu.n. ° ^
„
equipment this maturities. As an Plan," vitiate this security provi¬
trust
could
offw
to
these
same

sum

2_ sa™e

^f11'

It is evident that
margin
between
maturities
and depreciation is still comfort-

ating expenses.
the

able, although not as much so as
in
earlier
years.
However,
it
be noted that within the

should

inwidely,

overall picture the position of
dividual

roads may

vary

During the year several railroads
formulated
and
consum-

sion.
Your

Committee

pleased

represented

report that it is now

the Investor Panel of the Cooperative Project on National
Transportation Policy sponsored
by the Transportation Association
of America. The project seeks to
develop a modern transportation
policy by agreement among all
interested parties. Its conference
discussions promote agreement on
fundamental principles and serve

large

sev-

art; Henry S. Sturgis; K. F.
Tsolainos; JamesD. Winsor,III.

financing,
vvnne cuminenung on nuauuug,

While commenting on

ment*on should be made of a new

profitability of

are

satisfied and whether

offset in whole

in part

by compensating rate increases or

management of

further savings
efficiency.

through

in¬

NATIONAL SECURITIES

creased

Companies

earnings were
not have ac-

operations will be influenced by
the extent to which pending wage

United States

Investment

but estimates place

method

mated plans for the extension of to compose differences and effect
short-term maturities
or compromises. It is a major effort,
their replacement
with longer the need for which was outlined
ther efforts to encroach upon free term issues. The success of these in the introduction to this report,
enterprise if it fails to serve our plans was due in large measure and we are pleased to be associneeds.
Thus, we have a respon- to the efforts of investment bank- ated with the effort.
sibility to exert every effort to ers who assisted in their preparaRespectfully submitted,
tion
and
security dealers who
preserve our railroad system for
solicited the assent of the holders
Railroad Securities Committee
private ownership.
It is to be
As we have already indicated, of the old securities.
Charles L. Bergmann, Chairman;
railroad earnings for 1950 will be noted, howeyer, that the fee of
George A. Barclay; Howard
substantial. Net income may reach
% of 1% paid to soliciting dealM.
Biscoe, Jr.; William d.
a new peacetime high of $725 milers is not sufficient to cover the
Buzby, Jr.; O. Paul Decker;
lion as compared with $698 mil- expense of soliciting small hold¬
Sumner B. Emerson; Rowland
ers, and it is recommended that
lion for 1948, but it should be
H. George; George M. Grinwhere such assents are sought the
noted that there is included in the
nell; V. Theodore Low; George
amount of the fee be increased to
higher figure about $150 million
E. Richardson; Percy M. Stew¬
a
more compensatory amount.
of retroactive mail pay.

now

has

in fur-

first likely to be attacked

UTILITIES FUND

Prospectus sent free on

of the keystones of our

and one of the bulwarks
of free enterprise. It is one of the

PREFERRED STOCK FUND

INCOME

one

extent / to

the

equipment trust financing
been
reduced by resort to

economy

Fund

COMMON STOCK FUND

5? S11
We

off.

can

selfish interest in the railroads as

tem is

No exact figures are

available

type of

financing.

? outstand-

resP°nslD1Illy t0 .\nos(~ t0 wnom roads for depreciation $257.6 milwere accruing of eauinsold raliroad securities non
10n °r eprecia 10n ° eQuip
jn
pas^
do what
ment, a non-cash charge to oper-

Our railroad transportation sys¬

,„c.

railroad equip-

39 major

f •
•
continuing

those

War II

increase

connection with the
equipment trust

in
._

orthodox

•

fall

curate

should be

sharp

quired
_

all

overlooked

concerned with the railroad

„

potential seekers of new capital.
we,
together with many
in this country, are
engaged in a fight to preserve free
enterprise.

Custodian

Funds,

acquired equipment.trough

what are presumed to be tax adwhat are presumed to be tax ad-

much so that some analysts
. '
. , ,
, P.
have Questioned whether the the figure in the neighborhood of
heavy serial maturities might not «00 million.
r
This Committee has taken no

three obvious reasons

we may have
others) why we

(and
some

been

duce a result which, in the long
run, will be beneficial to all.
are

has

L l^

other groups

A Mutual

acauired eauioment through

which

combined efforts of many will pro-

There

PossiblyexITlillion Of SUCh fi-

nancing during 1949.

Third,

Franklin

;

Jnand for transportation resulting
our preparedness program

icy. The need for such a policy
nnn
hp hrnncfht in iha offpntinn
can be brought to the attention
of the many users of transporta-

largely followed exTsteLe and the
them
JZn. fhTm of effecting a

has

the form of the

pects

mittees prior to

dertaken

ment

has

financing

Wherp

surance company or similar type
of investor, working in conjuncturn with an equipment manufacturer, purchases the desired equipment from the manufacturer and
leases it on a rental basis for a
JdH™ thp nto

Ple«ng working capital by maklng the usual down-payment re¬

ditures program

projected defense program,
for the next several

the

acquisition of new equipment. Un¬
der the "Equitable Plan" an in-

the

outlook

the

vantages and also because they
have avoided the necessity of de-

market. Further, there has
Kdnn
liyvAi+orl nnnnrtnnilxr fnv
been only limited opportunity for
the industry to finance by public
sale of securities a capital expen-

addition, in view

financing

equipment purchasing with deliveries scheduled for
next year.
In consequence, the

open

coal, steel and automobile indus¬
tries as well as on the railroads
themselves.

cating themselves to this fact and
then urging that viewpoint on their

supplanted
of

,hI uound national transportation 001" volume of equipment trust financ^o und' n a tin no H ran s no rf a ti on poi- .
dur:ng iqci colJid nossihlv py

price at which many
,n
standing securities
sell in

will materially exceed
a year in which
operations were subnormal due
to a succession of strikes in the
for

real service by first edu-

clientele. We can also further the
cause of the railroads by efforts
out- to assist in the achievement of a

low

1950

those

prejudice

render

type

-f.™1?
T^0d tol railroad
lower than could have been trust method, the railroad does
3 straIght de" equipment at the end of the rental
AsTre?u"t of the increased de- Period : but tnr RaiiroaH<?to that
turns it back
the
/
ine increasea ae ^

against railrqad securities is evidenced in part by the relatively

speculative interest in railroad
Earnings for the full

securities.
year

policy

transportation

tional

Ko¬

has

orthodox

$141 million refunded outstanding
obligations and $133 million was
for new money. Included in this
total, and an achievement of note,
^ «ie sale by Southern Pacific
Co. of $37.7 million of convertible
debentures at an interest cost

nr0Z:,Trinve ""nrii^ns^Alf of "I?'' COPfderaUons than our
fhrfffnld5r
?Ub 1C Investment bankers can
?s WOi,ld
these stem from an unsound n,0
na- imply.

regulatory policy.

The text

instances

earnings, sues scheduled for December) will
pace of total nearly $274 million. Of this,

ances or from retained
As a consequence, the

known as the
which in some

commonly

"Equitable Plan"

handicaps to new investment, but contends railroad
investor consideration than public quotations imply.

subsidized

attitude

and obso¬

subsidized competition, high operating costs

IBA Committee cites

of the Railroad Se¬
curities Committee of the Invest¬
ment
Bankers
Association
of
The report

The

high level of earnings will
provide
railroad
managements
with additional funds with
to

continue

ernization

and

which

accelerate

mod¬

The

programs.

possible

whose

roads

still

Established 1894

structures

NEW YORK

PHILADELPHIA

SERIES

INCOME SERIES

BALANCED SERIES

PREFERRED STOCKS

SPECIAL

PREFERRED STOCK

SPECULATIVE SERIES

should

improvement

COMMON
STOCK

SERIES

STOCKS
SELECTED GROUPS

SERIES

are

seek

INDUSTRIAL

their
capitalization by applying a fair
proportion of earnings of debt re¬

LOS ANGELES

STOCKS SERIES

SERIES

LOW-PRICED STOCK

SERIES

FIRST MUTUAL TRUST

FUND

tirement.

ST. LOUIS

DENVER

debt

burdensome

effect

CHICAGO

expendi¬

been, and should con¬
tinue to be, a major Qbjective of
management.
Also,
those
rail¬

Calvin Bullock

BOSTON

such

LOW-PRICED BOND

has

tures

ATLANTA

INSTITUTIONAL SERIES

SERIES

im¬

provement in operating efficiency
made

BALANCED

BONDS
BOND

SERIES

During the year

now

ending the

Prospectuses upon request

railroads will have raised approxi¬
CALVIN

LONDON

BULLOCK,

Ltd.
MONTREAL

mately $275 million of new money

through
trust

$445
bond

the

sale

certificates

equipment

compared

with

during 1949. Other
financing (including two is-

million

NATIONAL SECURITIES & RESEARCH
120 Broadway, New

CORPORATION

York 5, N. Y.

Volume

172

Number 4968

♦

The Commercial and

Financial

Chronicle

(2301)

Municipal Securities Volume
The

Municipal Securities Com¬

IBA

mittee of the Investment Bankers

Municipal Securities Committee points

Association, under the Chairman¬

volume of

ship of Walter W. Craigie of F. W.
Craigie & Co.,

years.

the

o o

1950,

past
Vi

general

Commonwealth
Veterans

the

text

the

In xodu anutiici an-tinit: lccuiu1950 another all-time recordxix

volume

figure

-T1U„

has
£

over

year

billion

long-term

billion.

new

interest-

note that each year for the
past decade, with the exception of
1942, has been a record-breaking

in the municipal field

1940

price

volume.

1946

year

(1942'

inclusive

Each

2.11%
2.07.

ex-

cepted)

Tl1

new

issues

record

the

size

the

year,

sale

single municipal issue. In April,
1947, the State of Illinois sold

$300,000,000
Bonds

Service

That

municipal

set

1.99

July 6

bonds

hi^h

under-

written and offered to the investinf?

nublic

March

YcS*

sold

sinele

the

1948

issue

State

2.02

1.85

n_?^'

to that time these two sales

IN0V*

this

Pennsylvania
with

record

Veterans

000,000

keePlnS

this

year

yield)

than

any

municipal
appreciated

Committee

continued

the

issues specify

avoidI as far as
repemion oft certam
i«i?er and
closing
hnnHf
tbe bonds'

with rlcbvprv nf thP

present
a

effort

detrimental

received

from

the

Association

0Ur

asks

with

municipal

"V\

nlvti

iw-k

/M-i

Howve^ thTrfnstaJfces
SwJhnnris navahlffrnm
sne

Hal

fund

are

not

cowred

c al fund a e apt s.0 c0.rered by

g^h situations

Qrder tQ

negotiability that

assure

etentia7in

Negotiable

Instruments Law
s^a^es which have not been

amended

SuIU

Mr.

of.ithe

include

Joseph

firm

Don0van, Heenehan and

Hanrahan of New York addresaed

"These securities are offered
for sale subject to the
unqualified approving legal opinion of
(name of approving attorney),
the cost of which

topped

will

ty the City (or County
trict, as the

or Dis-

tho

iicncu

Wii S
-

will include
fnp/ ^
will

(lower

there is

the

time during the

by
be

6 n ^ ^ d requirement).

fiirnifwieSSHi

far

paid

may be, or
bidder if that

case

he successful

mi-Fx 1 n

time

and dis~,

about

year

half ago among our mem¬

con-

Special Committee
Bonds

work of our

the

man),
Apgar,

being

which

the

made

the

The

Committee

Federal

New
New

cities.

Reserve

are:

Gallagher

York;
York;

(Chair-

the

valuable

"Bond

Bergman,

Minneapolis;

Cleveland;

the

ever

available

information
to

for

made

purpose.
are

com¬

past periods
available.

are

bldder.

be
opinion and

given to enable anyone familial*
with such reports to form an ided
of the progress which the projects
making.

the

our

the

broadening

the

bank

concerning
to

end

information
head

hands

examining

revenue

the

officials

bonds,

sent

members last June lists of
and

names

addresses

viPw

foi view^

thp

imnnrfflnre

of it is ^portance isthe well that of

negotiability,

value

and

marketability

banking authorities
including the District Supervising
Examiners of the Federal Deposit
Insurance

Corporation; the Chief

Reserve

each Federal

the

District

Examiners

Bank

Examiner

Reserve

District;

Chief National
of

the

Office

Bank

Philadelphia; William C. Jackson,

£ >
Kalloch
fl;nfy
Bo6ton- Chester W. La g, Chi
p

'fnn.

rhpsfpr

IndudinfthcToblem^^and rlsks
involved
where negotiability
is
iacking and-the advantages, pro-

tection

values where

and

Continued

page

the

Underwriters and;Distributors
OF INDUSTRIAL

SECURITIES

securi¬

ties bave the attributes of negotiability.
Excerpts of Mr. McGovern's

talk

«goncj

were

published

Buyer's"

daily

of
March 6 and weekly of March 11.
^Ve recommend a reading or, in

rereading

these

ex-

points

out

cerpts

Specialists in the Private
Placement of Long Term Loans
and

Mr.

McGovern

that

and

avoid

also

the

make

risks

involved

municipal

Mortgages for plant

expansion and working capital

bonds

fully marketable, it is most desir¬
that
if
possible all such
obligations be in some way made
negotiable instruments even
though they are payable solely
able

from

particular fund.

fully

long urged
that

1938

the

present

the

purchase and sale of

minority interests

corporations negotiated-

be recalled

It will

Association

by
pointed out that under

resolution

states

in and have
McGovern's rec¬

The

controlling

concur

Mr.

ommendation.

AFFILIATED FUND, INC.

doubt

our

legislation
exists

attributes

some

to whether

negotiability,

within the provisions of the Uni¬

AMERICAN

BUSINESS SHARES, INC.

form

Negotiable Instruments Law,

attach

bonds

payable

from

special

fund, such as practically
municipal revenue or special
tax obligations.
We recommend that legislation

all

Prospectuses

Request

Lord, Abbett At Co.
63 Wall Street, New York

enacted

where

the

various

providing that
within the terms of the Negotiable
Instruments Law of the State, any

ATLANTA

LOS

ANGELES

'Yaw alstyme, NOEL & Co,
Members: New
New

York Stock

York

Exchange

Curb Exchange

states

needed

obligation of that State
CHICAGO

the

previous request that the principal:

rhi-

{££Irom Vadlus'mmles

g
wh^ck fact,
certificate that
delivery

the

supervisory

the Banking Law Section of the Craigie, Richmond; E. W. Darm- Comptroller of the Currency; and
New York state Bar Association statter, St. Louis; O. Paul Decker, the Chief Supervisors of State
0n
the subiect °* "The Non- Chicago; Everett S. Emerson, San Banks.
Negotiablie Revenue Bond."
Antonio; Herbert V. B. Gallager,
This was done to facilitate our

litigation pending at
of

by the "Bond Buyer'*

that sufficient information will be

those

intended

Federal

William

is pro¬

that

Further, current figures

Walter

service

Buyer"

revenue-producing projects when¬

LeRoy
Oscar

reve¬

viding. That paper publishes skel¬
etonized reports of publicly-owned

covered

Special Committee

Bonds.

Clark,

selves

are

previous reports
progress

Revenue

strongly

bonds and dealers avail them¬

pared with

securities

also

ing the issuers of municipal
nue

when the latter

ditional.

Revenue

Committee

recommended

where the promise to pay

the

The

recommends that those represent¬

of the following municipal bonds. Mr. McGovern's
talk on the subject was, accoid

language.

use

Report

it prepared

to specifically

municipal

Francis

law

broader

Bond

generally

The members

January

recommends

even

above

be broadened

Negotiability
Last

and

Revenue

ties and others.

securities are to Te a
are to be a

instrument within the
of the
Negotiable In-

meaning

McGovern

this

eliminating

coming issue
officials.

include in their notice of sale the

of $375,Compensation

higher

field

the

municipal b o n d attorneys to suers investors and dealers be
strongly urge municipal officials, rP"11"dfd ■
f
where the opportunity is present, the full puiport of its effect on

the increase volume in

ranged

the

too, may be helpful in as presently constituted includes
this connection when discussing a at least one member in each of

he Municipal Securities Commit-

were

mu-

over

attorneys in general reflect their
interest
and
cooperative intent.

furnishing 0f essential

tee

sale

municipal issues prices

attorneys

Responses

^01+d att1<?rfl?yf
country, soliciting

Dae

The Municipal Market

new

forms which

the authoriza- Dealers,

Bonds.

Despite

operation

1.75

ODinion offered bv the

t£

of this year the Common¬
of

bond

toward

+.of our
at its
™eeting on May 17, our Chairman,
Walter Craigie, wrote as follows to

largest block of state or municipal bonds ever underwritten
and
sold as a single
issue.
On
wealth

rmmhpr r»f thp

many revenue bond
securities

^"''the
that the

situation."

Approving Legal Opinions

the

"The constructive work of

1.83

$300^- Jhe substance

single sale

request constructive and

inteiest of maintaining municipal
credit.

1.82

New

000,000 Soldier Bonus Bonds.

Feb.

Recognition
new

of municipal bond at_
They consider the above

financing is greatly
by investors, issuers and dealers,
May we look forward to your co¬

UUIie

ments relating to the form of leeal

this

set

firms

years

leached.

Another
was

municipal

2.02

J",an
P°ss™e

few

the

record-high figures

ery

2.02

™

m«r

were

of the date of deliv-

Atlanta;

bers, the bank examining authori¬

Apr.

the years 1947 to 1950
of

nicipal

Then

amount

2.02

JJJ®

elusive

taxes, shall nevertheless constitute
a negotiable instrument.

ap-

record-high
prices
for
municipal securities were reached.
in

„

certificate

2.05

Mar.

ing to

either

torneys.
Yield

1949
5, 1950
1,

municipal

It is

bonds. The previous all-time high
was in
1949 when the figure ran
to

Thursday

Date—

been

„1

far shows

{he

Pennsyl-

Committee's report:

average

each month for the Past 12;

Jan.

the

opinion

about the current problem with

bonds, amounting to $375 million.

total

there

year

marketable

and

proving the legality of the issue
1
i a
along with adequate closing
paper
papel-s, including i non-litigation

?ond Buyer's" weekly market in"
d

Dec.

The

below

market

of the" bonds.
We have recently had the opportunity to talk

Compensation

reached.

the

yield price for bonds of 20 large
municipal units as shown by "The

the

will

issues

Clinno thon

furnishing

during the

inserted

new

Following

picture

movements

to¬

for

year

validity

r»VvAitf

fied
For the purpose of

probably
ex¬
Walter W
w. Craigie
c,a,g.e
ceed
$3
billion, with one issue alone," that of

year

issues

15 nrfinnm

the

the bonds.

held

affecting

Means,

D. Stone, Jr., New York.

and

aggregate

high

ert

tributed

reached, when

vania

thvAlio'hAiit

and

way

issue

market

Francisco;
Pleasants, Denver; Rob¬
Shepard, .Cleveland; Fred

mu¬

will

the

The

years.

Aaron W.

new

nicipal

tal

issues

two

ty opened in this

Nov.

that

record

Toledo;

Ferris S. Moulton, San

record for

new

High

Mark A. Lucas, Jr., Kansas
Mo.;
Robert S.
Mikesell,

The

vention

Fin.,

Con-

Holl y w
27

City,

time during past two

any

single flotation.

reported

cago;

further that, despite increased

out

issues, prices have ranged higher than

Pennsylvania issue, amounting to $375 million,

Richmon d,

Va.,

new

at Record

its po¬

litical subdivisions, or their agen¬

cies, or
instrumentalities,
even
though payable solely from
a
particular fund or from special

52 Wall Street, New York 5^
Affiliates

Delaware Fund Distributors, Inc.

Van Alstyne Noel Corporation

3Sj

The Commercial and Financial

(2302)

Airline Profits at
of Auchincloss,
Redpath, New York, as
Chairman, submitted the Report
Roger

Parker &

Aviation

the

mittee,

Securities
11

Dec.

gives data

the

Bankers

improvement in domestic airline earnings in 1950. Sees princi¬

Association

companies

airline

becoming

probable impact of

America,

text

the

Committee's

evident from

the

near

serve
so

^nancial

substantial.

evidenced in the past year,

future.

nenced

figures available, it is
possible to estimate with reason¬
able accuracy that the 16 domes¬

what lower unit costs and

are

not

to any

extent due to higher mail
payments. It will be noted from
the above figures that mail pay¬
ments in the aggregate for the
16 trunk lines were actually .8%
lower than last year. Unit costs
on an available ton-mile basis in

should

$6,140,000

received

and

thp

nprinH

P.rioaoi;

qifi

trend towards eventual

aging

in-

domestic

lmP°rt^es of mad payments, as

investment

0Pe/^°rn,S, aL
is $507,517,000

the

now

cities.

The

volume

increased that air coaches

constitute about 16%

strongly

carriers

has
now

of the total

passenger revenues of the scheduled carriers engaged

service.

Coach Operations

Seven

in this type

carriers

have

operating coach services for

been

The air coach experiment is a
controversial subject within the

dependence of mail pay, but the

rent

improvement

certificated

Ten

operate their coach schedules and

at least all of this year with widely varying results. Table III shows
industry;
some
operators
are
the extent of coach operations in
The remainder of the airline in- strongly in favor of expanding each system for the first eight
dustry is also showing an encour- such services while others are for months of 1950.
in

navmpnts

ifL

oniy

noted, however, that the total cur-

operations cannot be overlooked,

comparod. with

maintaining the status quo; some
are
strongly against such opera-

The information available indi-

that

cates

about

30%

the air

tions and some have gone along coach traf£ic was diverted lrom
for competitive -reasons only. Un- the regular fare service. This, of
fortunately

there

are

few fie*-

meant

rourse

ln«

r^vp

1^42,000 m 1944.
1949 and' only ^arth^, R ishigures available that it is impossible
$187,719,000 in
ntsThS" to determine accurately and conTotal

nue to'the carriers insofar as the
diversionary traffic is concerned,

the 16 domestic trunk lines in 1950

that total gross passenger

improvements in domestic
airline earnings this year is the
result of traffic gains and some¬

taxes

for the full year of
$45 million compared with
$24.6 million in 1949 and the previous peak of $36.4 million expe1944.

1950.

maintenance, salaries and
On balance, the resultant
of the above forces should be a
continuation of the operating and

the biggest operator in
the first nine months paid Federal

income

It is perhaps signifi-

cant that

about

Table I shows the improvement

The

From the

atmg

per

wages.

surge.

shown in Table II.

been

increased

fuel,

These costs represent a
high level of efficiency and, from
this point, can hardly be expected
to be materially reduced in the

should

expenses

than

daylight

has

fares

profitable
domestic
operations,
Their combined figures will show
an operating profit this year before mail pay. In the case of the
x ~i~1'

the lowest in

Increased

less

Some

permitted, but
recently ordered
generally to 4y2
mile effective Nov. 15,

CAB

expected, however, on direct flying operations from such items as

trend
were

tic trunk lines will show an oper-

in traffic and operating earnings
during the first eight months as
compared with the corresponding
period of 1949. Comparative figgures for
the "Big Four" are

the

33%

fares.

have

flights

airlines.

towards freeing themselves from
dependence upon mail pay for

downward

figures
(latest
available) that the 16 domestic
trunk airlines will report in 1050
their highest dollar earnings in
history and that operating earn¬
ings will exceed 1949 by a wide
margin. It is clear that traffic
and earnings are in a strong up¬
tor the first eight months

in evidence

the

velopments in airline transporta¬
The

profits tax

excess

about

cents

10 years.

mile,

standard

"Big Four" have gone very far

first

since 1943 and

report follows:

for profitable

pay

opera-'

Coach

generally been con¬
during night hours at a
equivalent to four cents per

eight months continued

the

been added considerations of de¬

tion.

independent of mail

market.

have

ducted

Reveals "coach'* operations give favorable results, and discusses

operations.

then winding up its
business at Hollywood, Fla. The
report is replete with statistical
data relating to activities of the
airline companies, to which has

travel

tions

fare

39th

Annual Convention of the Invest¬
ment

air

Committee, under chairmanship of Roger Cortesi,

Com¬

pal

14, 1950

Comparatively High Level

Aviation Securities

IBA

Cortesi

Chronicle... Thursday, December

passenger

will

be at least

i"g reai progress towara a

miles flown by

15%

above

1949.

oe- clusively the contribution

nnmi&n*™

for profitable

operations.

■

hne profits

tions make.

moderate

dustry when the volume of traffic
the break-even point. Once
this point is reached, the great

the estimated 7.5 billion passenger
miles flown in
1.4 billion

1950

are

from

in 1941, an increase in

majority of additional revenue is
carried through to operating in¬

the past 10 years

of 435%.
/
operating levels, the

At current

passes

Reported third quarter net

come.

taxes, seasonally
carriers, were
$17.2 million for 1950 as compared
with $10.9 million for 1949.
earnings,

the

after

best

for

such

considerably

the

Domestic

Trunk

Airlines,

derived

the following sources in

Dominick & Dominick

Tot. Gloss

Flown

the

Revenues

Miscellaneous

Revenues

14 Wall Street, New

is for

Dominick Corporation

#(000)

S(000)

Total

8.7%

4,420

305,666

29,480

9.6%

navigational aids and better
on-time
performances also will
aid traffic.

The above considera¬

tions superimposed on the steady

•

S(OOO)

60.2%

+ 9.4%

Income

61.7%

+ 14.5%

Operating

Ton Mile

Factor

29,251

■<

i
■ <.

American

TWA
______

-Mail Pay (000)1940

Change

$8,405
4,106
6,859
5,738

Eastern

29,382
28.80
19.062
+54.1%

Earnings of the "Big Four"

1950

1049

27.70

.8%

—

TABLE

*TWA's large
pay

$14,171

$5,766

5,521

1,415

$37,785

9,738

2,879

8,355

2,617
$12,677

1950

$4,028
2,363
*11,165
5,120

$22,676

$4,192
2,412
*10,948
5,450

Change

$23,001

$164
49

—217
330

$326
+ 1.4%

international operations account for its proportionately much

receipts.

„

TABLE m

high industrial activity,
expanding employment

siderably and should do so even
further.
Constant
improvement

of Canada

MONTREAL

con¬

traffic has already broadened con¬

,Canadian Affiliate

Aug.

Available

Load

334,346

throughout the nation. This should
be reflected in larger volume of
traffic for the airlines.
Military

York 5

Revenue to

5,058

tinued
and

coach

Cost Per

+ 50.4%

—,1 %,

The current outlook

Ended

Passenger

(Million)

larger mail

Exchange

Mail

1949__

| 'Express and freight- —
Members New York Stock

pro¬

that

84%

Mail

Months

Mail

1950__

United

Passengers

indicates

Net

Miles

$25,108

from

portions shown:

Established 1S70

table

v—Net Operating Profit (000)-

eight months of 1950
of the 16 domes¬

the gross revenue

was

above

Passenger

most

lines

most

TABLE

Outlook Promising

tic trunk

appears

revehave increased substantially
cases
as
a
result.
The

-nues

operations

9 Months Reported

In the first

but, in the aggregate, it

There is little doubt,

Results so far this year, particudecrease
however,
that
(3%) in 1948, traffic, measured in larly during the third quarter, have enlarged
passenger miles, has shown sub- clearly demonstrate the high earnstantial increases every year, and ings potential of the airline in-

Except for

to air-

or losses these opera-

growth characteristics of airline
industry should assure no inter¬
ruption in its strongly growing,

Total

Coach

Revenue

Passenger

Revenues

Coach
Rev. Pass.
Miles

(000)

American

Capital
Delta

Pass. Miles

Coach

***.•4000)

1,097,660
72,762 ,329,316
30,468
186,262
821,220
187,746
61,014

_____

Eastern,:
National

___

Northwest

TWA

Totals

-__

Total

(000)

Coach

$60,760
13,810

4.6%

20.9%

10,339

11.6%

(000)

5.5%

$2,800

22.2%
22.8%

2,887
1,197
7,510

16.4%

46,192

16.3%

9,004
17,743
38,309

22.7%

$24,723 $196,157

12.6%

49,806

166,207

30.0%

2,043

118,047
84,768

349,615

33.8%

4,603

703,376

12.1%

3,683

604,612 3,653,656

16.5%

26.0%

9.6%

traffic trend.

While mail revenues

are

deter¬

mined

by the CAB, it appears
unlikely that such rates will be

RAILROAD

reduced

PUBLIC UTILITY

the

until

the

airlines'

rate

return

investment

INDUSTRIAL

with

business

and

INDUSTRIAL, RAILROAD, PUBLIC UTILITY

has

materially improved. Mail volume,
on the other
hand, should expand
military

sharp growth of

AND

FOREIGN SECURITIES

ac¬

ex-

tivity.
The

BOND and STOCK

BROKERS

very

and freight revenues which
has been in strong evidence in the

; press

postwar period shows
abating.
From

expense

signs of

standpoint, it

is unlikely that the airlines as a
whole
will
for
some
years
be
faced
•

Vilas & Hickey
Members New

York Stock

Exchange

Members New

York

Exchange

Curb

49 Wall Street

New York 5, N. Y.

Telephone; HAnover 2-7900

Teletype: NY

1-911

with

incident

the

heavy

ation

Wertheim & Co.

expenses

introduction

MEMBERS

of aircraft.
Deprecicharges are likewise not
likely to be materially increased.
However, progress being made,
especially abroad, in the develop¬
ment of jet and turbo-prop trans¬
ports must be recognized as bring¬
ing nearer the day of reequipment
for the major units in the in¬
dustry.
new

types

the

TRADING DEPARTMENT

UNLISTED

New
New York Curb Exchange
N. Y. Coffee & Sugar

York Slock Exchange

N. Y. Cotton Exchange

Exch., Inc.

New York Produce Exchange

Teletype: NY 1-433

120 Broadway

New York
Telephone:

Commodity Exch., Inc.

Chicago Mercantile Exchange

1-484

1-485

Chicago Board of Trade

N. Y. Cocoa Exch., Inc.

REctor 2-2300

Cables:

Wertma New York

Yolume

172

Number 4968

The Commercial and Financial Chronicle

operations have shown up -favor¬
ably in terms of traffic and gross

revenues, but not sufficient data
have yet been published to allow
an

intelligent appraisal of coach

service

the basis of the overall

effect
the

the

CAB

cautious
such

has

attitude

with

minimum

conducting

all

phases

by restricting
high
density
schedules

in order to protect the basic
structure.

Thus far,

demonstrated

services

routes
_

industry.

now

this

fare
in

engaged

thorough

study

controversial

The Airlines' Emergency Role

Following the Korean outbreak,
the

airlines

called

were

to
important role in reliev¬
upon

play an
ing the manpower and military
equipment shortage in the Far
East.
Under
Secretary of
the
Navy, Dan A. Kimbell, recently
stated in
is

lesson to

connection

with

transportation

be learned in

commercial

relates

air
to

military

emergencies.

learned
lines

of * using

the

base

Relief of

some kind is proposed
rapid growth companies and
companies which have had little

for

earnings in the base period
and relatively little invested capi¬
tal. The nature of this relief has
no

been made

not

how

clear, but

study
apply
industry shows be¬

the airline

such

act

would

insignificant that

little

value.

All

count

AlterTaxes

use."
Similar praise
industry has come from
other military, Congressional and
CAB personalities.

"Total

air

000.

carriers

cer¬

June

estimated

this

that

will

year

30,

these

have

short time fol¬
lowing the outbreak in Korea, the

operating profit of about $60,000,000, which, after taxes and fixed

certificated

charges, will provide a net income
of around $31,250,000. This would

very

airlines

to furnish,

called

were

and did furnish,

four-engined

aircraft
with
military
Had the necessity

to meet immediate

crews

requirements.
arisen

further transports,

for

civilian

airline

industry,

the
the

represent
of 4.14%.
able year
be

voir

does

equipment
would

the

need.

The

•

trained
supplied

and

have

Korean

provided

war

dramatic

illustration

one

of the

importance of the airline industry
national
safety
and
conse¬

quently of the importance of pro¬

strength so
from the
point of view of both service and
moting
that

financial

its

progress

may

equipment.

explore the position of the in¬

with

dustry

respect

excess

profits taxes.
Administration plans call for
enactment
to

that

which

ing the last

EPT

was

the

bill similar
effect

dur¬

but with a rate
of 75% as compared with a rate
of 85 V2 % in the old bill.
It pro¬
war

that the best three of the
1946 through 1949, be
the base period and that
the resultant base be reduced by
poses

most

the

national

whole,

and

progressive in the ever more
expensive field of developing new

in¬

re¬

types and models of aircraft.

The

industry,

ported

The Aircraft Industries Associ¬

due, in part, to the

sented

postwar cancellation of orders and

Committee of the House of Rep¬

resentatives

regard which would appear
adequately to safeguard both the
public interest and the welfare of
the industry.
I

bill should be suitably drafted to
provide excess profits! tax exemp¬

tion for

airlines, at least equal to

mail

payments

especially

received

since

doubtful

appear

would

whether

the

wording of the original Act in this
regard

actually

corresponded

the intent behind it.
The

total

present military air¬

procurement

the

by 1953.
calls for 90

Continued,

chases

will

somewhat in

pected

probably
1952-53

level off

about $4.3 billion

addition

Mutual

after

are

ex¬

1954

at.

annually.
the

Defense

Pur¬

above,

Assistance

the
Pro¬

billion
acquisition of air¬
craft, some of which, however,
will probably be drawn from ex¬
isting stocks.
Further expendi¬
tures for this purpose are prob¬
gram

calls for about $1.1

1951 for the

able after 1951.

from

allow

represent

reasonable

existence

and

because

for

the

Connecticut

industrial

pro¬

admitted

considerations of national interest
and

imperative
that
mail pay and tax policies
should be so designed to promote
defense, it

invite

and

seems

airline

progress

the
profit
motive.
It
would seem reasonable, therefore,

through

that borrowed

such

flight

duction
duction

go-ahead,
rates

the end of

by
and

monthly

could

one

year,

pro¬

be tripled

The economic effect on our in¬

is obvious.
lars

worth

securities,

third

year.

aircraft

for

exchanges, are lost to the mar¬

place. The seriousness of this
more apparent when we
consider that the cream of the

ket

It is the purpose

adverse

the

industry would fare

un¬

Frazar

that

in the conclu¬

his

appropriate legislation.

absence

The

challenge is clear.

Respectfully submitted,

W. MacArthur, Chair¬
Earl K. Bassett; W. Rufus
Brent; W. Rex Cromwell; Cle¬
ment A. Evans; C. G. Fullerton; M. M. Grubbs; Matthew
J. Hickey, Jr.; Harry A. Mc¬
Donald,
Jr.;
Galen Miller;
Stanley N. Minor; James W.
Moss;
Chapin S. Newhard;
John J. Quail; Murray Ward.

Robert

man;

of this report

trepd that seems to be
the standpoint of

not to spell out

disadvantages
placement method.
B. Wilde, President,

capital with which

equipment

was

purchased should be included in
full
in
calculating the invested

four years,

capital base.

used

been submitted by

25%

before the 75%

excess

prof¬

its tax actually is computed. Cor¬

a proposal has
the industry.
excess profits
also provided exemption from

Such

The World War II
tax

the tax for airline

TABLE

Underwriters and Distribufors

companies only

Projected Defense Aircraft Procurement Budget
for

1951-54 and Thereafter

State, Municipal and

(Billions)
1951

Air

1953

$4.4

$2.5

$1.2

$2.0

$2.8

2.3

1.8

1.5

$6.7

Force,

Navy

1952

$4.3

$2.7

$3.5

$4.3

___

Eastman, Dillon
1 5

Broad

PHILADELPHIA
READING

Street, "New York 5,

CHICAGO

EASTON

•

1954

Level Off

Special Revenue Bonds

Corporation Bonds and Stocks

Co.
Y.

Hayden, Stone & Co.

HARTFORD

•

PATERSON

CARLISLE

Members New York Stock Exchange

Members New York Stock

Private wires to
San Francisco

•

Los

our

Angeles

offices and correspondents in

St. Louis

25 BROAD

Exchange

Milwaukee

New Haven

BOSTON,

MASS.

and other leading Stock and Commodity Exchanges

STREET, NEW YORK 4, NEW YORK

WORCESTER,

MASS.

PORTLAND, MAINE

Industrial Securities Committee

of the private
Mr.

note

legislation the
direct placement method can be
expected to continue in full force
and effect for an indefinite time.*

from

the industry and

the

semipermanent basis.

to record

Oct. 6,1950. He took
or
against private

wholly natural phenomenon. If
society wishes to modify or abol¬
ish the system, it will have to do

even

desirable stocks off the market on

Insur¬

report the following
significant statement was made:
"The stimulus the device received
from the enactment of the Securi¬
ties Act means that it is nota
sion

the advantages and

how

examination

stancl

tant to

large

traded either over-the-counter or

Life

placement, but it is rather impor¬

part of Which normally would be
on

Chicago

These billions of dol¬
of

General

Company, very ably did this
at the American Life Convention

dustry of about $8 billion of se¬
curities being locked up in insti¬
tutional hands in the last 5% years

tripled again

the end of the second year
tripled once more by the end

the

Hovey;
A.

ance

Order

many

Chandler

Thomas.

it,

investment.

Cohu;

John R. Longmire; Joseph

page

banking firms in
financing field.

decline

but

Roger Cortesi, Chairman; Henry

Sharp Decline in Industrial
Security Offerings

Heaviest expenditures are expect¬
ed to be made in 1951 to get the

production build-up started.

Aviation Securities

posed tax act, therefore, appears
necessary if the aircraft industry
is
to
build
up
reserves
and

sufficient

recommendations

Respectfully submitted,
Committee

excess profits tax exemption.,
Special treatment under the pro¬

groups

program

manufacturing

strength

America, Inc., has pre¬
the Ways and Means

this

industry would have, in effect,
practically no earnings base for

strength from 48 to 58
by the middle of 1951 and
or

airframe

calls

program

the expenditure of over $20
billion during the next five years.
It involves the expansion of Air
Force

part to the expenses incident
the development of new mod¬
els. As a result, the major units

are

years,

appropriate at this time

seems

year/will

publicly traded industrial securi¬
backlogs in the industry ties is being removed from the
generally three times the pre- securities markets in substantial
Under
the
excess
profits tax Korea level and
production rates volume by trustees in "prudent
law, enacted in World War II, are
being increased as rapidly as man" states, fire insurance com¬
only a part of the investment was
possible.
It is obvious that the panies,
charitable
institutions,
recognizable for tax purposes; ex¬
industry will experience a major pension funds and other profes¬
clusions were made in the case of
expansion in sales volume during sionally-run accounts, which have
borrowed capital invested in the
the next several years.
In dis¬ forced for income purposes into
business.
Because
of
the
rapid
cussing the expansion potential of the equity
market.
Investment
obsolescence factor of flight
the industry, the Aircraft Indus¬
companies which are growing at
equipment, because of the pros¬ tries Association
recently pointed a
phenomenal rate are also taking
pect that the excess profits tax out that with an unlimited
it

Profits Taxes

Excess

the

investment

profit¬
in airline history, it can

fair return

will

this

saijd that it is only an approach
normal earnings and in no way

While

undoubtedly

only immediately available reser¬

personnel,

return

thereunder

during the last war, but it might
apply to several if reenacted in
the proposed bill.
The proposed

further

approximately $755,090,-

was

too, will require special treatment

100 groups by the middle of 1954.

The total investment of all

1950,

at all
This interpre¬

this

terest.

exemption

profits when the present emergency Is
industry, over, to continue being effective

excess

that

ation

.13
3.58

$"(10,619,940)

____

of the mail

excess

proposed

losses in the years

groups

886,716

tificated

the

Investment

24,982,989

1949

for

planes

(26,404,005)

1948__

indicates

severe

$110,085,640)

ly47

the

tax

for

Percent
Return

1946

der

This

1947 and 1948

Carriers

Air

were

pay.

tation affected only one
company

are

mail

would be allowed.

craft

(Loss)

emergency

then

pay,

following:

Net Income

air¬

our

they

the

Certificated

have

upon

source

Within

Note

were

them,

excess

provision led to the presumption
that if the excess profit net in¬

the

for

upon

yond doubt that this industry will
be included among those
specially provided for. The indus¬
try earned profits in only two of
base
the
period years and the
profits of one of those years were

profit net income

excess

come

speech: "I think there

clear

instead

period.

not

have to

matter.

porations would be given the al¬
ternative of
using an invested
capital plan if they elected to do

(2303)

SPRINGFIELD, MASS.

Financial Chronicle... Thursday, December 14, 1050

The Commercial and
32

(2304)

Continued

from page 20

the

and

communities,

19,000

paid, and so on. All these
things are important to the gen¬
eral welfare and we want people
taxes

Fundamentals oi

appreciate that these are big

subjects.
But we don't have to
big words to tell about them.

use

it seems to me that what¬
always need
talk about it as simply as we

In fact,

inserts close to the exhibit and they were
frequently, which makes them our intently reading the stock certifi¬
best-read media. And they don't cates. Come to find out, most said
customers

have

read

these

elaborate—just

inter¬

One of the best-read and

esting.
most

popular telephone company
inserts is a little four-page folder
flimsy yellow paper that hasn't

its

varied
in

score

typography or format
of years.
In all those

too,

it hasn't talked about

years,

they had never seen such a
before.
Many reached
out

the subject, we

ever

be especially im¬

That may

can.

thing portant in

point out that we try to
messages in every me¬
policy. First,

have moved out of the State and

have

requested that it be sent to them.
I'm told that a new stock trans¬

Slogans

dium tie in with our

with

the

we
tell people about what we're
requires doing to furnish the best possible
three mail¬ service: how we have spent over

customer

average of two or

ings. Other banking or investment $5 billion in the last five years to
customers receive monthly state¬ expand
and improve our plant;
ments.
What better opportunity how we have introduced Operator
to reach customers with messages

Toll

that

method of handling long

can

be mutually helpful?

Dialing,

and

new

faster

distance

calls; how we have provided a
them network of new communications
in business offices, lobbies and at highways of coaxial cable and ra¬
other locations where plenty of dio relay that are also capable of
people will see them. The display transmitting television.
medium

valuable is displays.

Another

consider

use

in the telephone building

you see

also

stress

the

fact

that

window may also be found at

the postwar increases in telephone
county fair. They range from sim¬ rates, including those pending or
ple placards to large demonstra¬ planned, are less than the rise in
tion exhibits.
And they all help
prices of most other things people
in the job of spreading informa¬
buy and that telephone service is
tion
and
gaining public under¬ a bargain. We emphasize that the
standing.
increases requested are no more
Here's

lustrates

little

the

incident

value

about.

one

il¬

than enough

to assure the finan¬

actually

showing people the thing
talking

that

cial safety of the System.

you are

what

telephone

are

doing

We show
maintain

fair treatment of employees. And
we try to give the public an idea

have

the

and

Courtesy

Friendliness

technical

one

im¬

have

themselves

work has enormous influ¬
That's why your determina¬

your

equal

ence.

accuracy—there

consideration

have

good

under¬

informed and understand¬

ourselves ing personnel.

alert

tion to make your activity
understood

appeals

strongly.

All

will

from

gain

American

having

their

produce

They
about

prosperity.

own

to know from
essential part in

need
your

all
on

the

down
your

line,

you

are

to winning

way

meet

distance

Maybe

equipment.
you have a special brand
get in

of "bankerese" which could

the way

of public understanding.

I found these titles

At any rate,
referred

of your pam¬

one

phlets, and I stumbied a bit my¬
"Build

self:

Well-Selected

and

"The

measure

Bosworth, Sullivan to

regularly for discussion with
In this way, as
well as through the written word
their supervisors.

company

Admit J. H.

Myers

magazines, bulletins,

booklets, and posters, they learn
the company's plans, problems
and results. They talk about pol¬
icy. And they discuss the reasons

behind routines.
I think this is essential.
one

should

ask

If any¬

what

public

En¬

relations

activity

considered
most
important,
I would right
gineering Aspects of a Revenue away answer, "A good job of em¬
Bond
Project";
"Insuring
Our ployee education." You just can't
Technological Future"; "The Price- have good
public relations in a
Earning Ratio."
service business like ours or yours
On the other hand, I've noticed
unless the employees know what
Diversified

Portfolio";

other

few

which I felt I

titles

might like to read: "How to Lay
A Nest Egg"; "Own A Share of

their company stands for and con¬
sider it
pany

their job to tell the com¬

J. H. Myers

story to the public.

America"; "Four Steps to Finan¬

started

and

murmur

kind of incantation.

Slowly,

trunk, two

king cobras raised their heads.
The bridegroom of course was

prises

provide

employment,

pay

DENVER, Colo.—J. Harold My¬
will become a partner as of
Dec. 7 in Bosworth, Sullivan &
ers

Co., 660 Seventeenth Street, mem¬
bers of the New York and Mid¬
west Stock
for

for

ager

told

never

you

were

Mr. Myers

Denver man¬

for Harris, Upham & Co.

Dreyfus Go. Admits
William A. Brindiey
William

Brindiey

has

change

and

principal Commodity
Mr.

Exchanges.

Brindiey

Kirk.
&

Co.

He
on

"Oh, didn't I?" she said, "Well,
never asked me."

seems

tions is

the
on

that asking ques¬

asked

year

good idea, and twice

will

drown

bring

one

that

these

and

over

It is this: People who feel
have
been
treated
in
a
friendly and courteous manner by
the
is

WALL STREET NEW YORK 5, N.Y. WHITEHALL 3-5300

Municipal Dept. Teletype NY 1-1052

Uptown

•

Corporate Dept. Teletype NY 1-1680

When

good.

ask, "Are

you

TUCSON

LITTLE

ROCK

HOUSTON
BUFFALO

LOS

ANGELES

BEVERLY

HILLS

Natural Gas

always treated by telephone peo¬

ple

the

way

treated?"
answer

Office—HOTEL BILTMORE

BOSTON

in securities

company's general reputation

84%

"yes,"

you

excellent
answer

question,

the people who

also

good.

"sometimes

only

Companies

say

that

the

telephone company's reputation is
CHICAGO

We maintain active markets

they

telephone employees feel also that

principal Slock and Commodity Exchanges

York 5

sur¬

over

fact

out

again.

Exchange and

the New York Stock Exchange

Wall Street, New

I'm not going
statistics, but

you

veys

\ 44

public to give us their views
lot of things related to the

there

other

Memben of

38%

those who

not"
say

the

that the

company's reputation is excellent

represent Dreyfus

White, Weld & Co.

cross-section of

telephone business.

the Curb Exchange.

you

been

partnership in
Dreyfus & Co., 50 Broadway, New
York City, member of the New
York Stock Exchange. Curb Ex¬
admitted to general

minute,

Exchanges.

many years was

good wages, buy immense quan¬ member of the New York Curb
tities of materials and supplies,
Exchange
and was formerly a
pay dividends to millions of stock¬
partner with the firm of Tobey &
holders
and
bear
a
substantial

but he portion of the tax burden. Directly
finally managed
to get a few or indirectly they contribute to
words
out.
"Darling!" he said,
speechless

Special and Secondary Offerings

Company

well

fuller

ployees perform, telephone people

example, we have said cir¬
telephone lines; sta¬
tion—that's a telephone; traffic—
that's calls. Toll plant is not found
in a botanical garden;
it's long

Corporate and Municipal Securities

Members Neiv York Stock

the

For

"You

Shields &

you

process.

snake charmer!"

Commodities

better

comprehension of the forces that

cuits—that's

through

telephone termi¬

use

own

from the bottom of the

Advisory Service

citizens

nology. Let's call it "telephonese."

our

some

Research and

better

public understanding,
So with varying frequency, de¬
confidence and esteem.
pending somewhat on the kind of
work that different groups of em¬

to avoid misunderstanding

trunk,

Brokers

less true of others.

Dealers

of our business, as I
already indicated, and it is

is true

have

Therefore the job that you and
friendliness are
of top importance all the time. your organizations are doing to
We use films, booklets, skits, post¬ help business finance its progress
ers,
recordings and demonstra¬ has an importance that can't be
tions to help bring that home. But emphasized too much. You are in
beyond courtesy — and beyond a key spot in the economy and

building, employees were invited
In looking over your IBA Bul¬
cial Freedom."
a series of displays telling
of what the overall success of our
letins I was much impressed by
Giving out information is an
about various aspects of the busi¬
the public relations program you
business, based as it is on sound
ness.
Each display was manned fundamental policy, means to the important part of the public re¬ have under
way.
I think you are
lations job, but we think that get¬
by a speaker who gave a three- country in addition to the render¬
wise too in making long-range
ting
information is just about
minute talk to each group of em¬
ing of good telephone service: I
plans, for no one could hope that
ployees in the tour. One exhibit mean such things as the flow of $2 equally important. One upon a your role in the American econ¬
time a man was
married to a
was about A. T. & T. stockholders
billion a year in Bell System wages,
omy will be fully understood over¬
beautiful girl after a whirlwind
—the largest family of stockhold¬ which are
spent for things that
night. Certainly more people need
courtship.
On their honeymoon
ers in the world.
Its surface was
bring wages and profits to people
to know that the job you do is of
she took along two or three suit¬
covered
by facsimile telephone in thousands of other businesses—
vital importance to us all, that
cases, but she seemed to be par¬
stock and bond certificates. Here and the
purchase of $300 million
you
get new businesses started
ticularly anxious about a steamer
was a display such as you might
worth of supplies and materials
and keep established business go¬
trunk that rode in the baggage
have used yourselves.
in a single year by Western Elec¬
ing, that the benefit of your work
car.
And when the happy couple
After a day or two, the little tric, which in 1949 bought from
flows out to all part of the coun¬
arrived at their destination,
the
talk that went with this display 24,000 concerns 2,400 communities
try.
bride told the bellboy to put the
had to be revised. Nobody seemed —and the millions spent by the
After all, successful businesses
suitcases in the closet but to place
to be listening for the first min¬ System
since the war for new
the trunk on the floor in the cen¬ are the backbone of this nation.
ute or so. What were they doing? buildings, and the dividends paid
make
our
economy
tick.
ter
of the room.
Then she got They
They had their noses pressed up to nearly a million stockholders
down on her knees, opened
the Successful and prosperous enter¬

distributors

com¬

know

So courtesy and

to visit

underwriters

well-being of every
in the country. I

munity

So it seems to me that
standing of their company's pol¬ you are very much on the right
icies and the reasons behind them. track, and I am sure that with a
sound basic policy, with a wellconvertibrae We can't expect people outside the
business to appreciate the whys balanced and thorough informa¬
and wherefores
unless we first tional program, and with courtesy

lawyer to translate it." In letters
we
find the words "debenture"
and "convertible" are called dev-

telephone stories, is in such story — space advertising, radio, onshire, devilshire,
a regular mail¬
movies and so on—but I would and invertible.

action

like
me.

that

Importance

your

demand that it has

ing list of former customers who

coincidence to

business too, for
and a lot of people have trouble un¬ portance. Bell System employees
make about 2 billion public con¬
touched them. Others asked ques¬ derstanding
various aspects
of
tions about them. Here apparently stocks and bonds.
For example, tacts a year. They are the most
for
the first time was tangible when
one
of
our
stockholders important single force for good
evidence of what they had been wrote
us
a
letter
recently
he public relations that our enter¬
hearing — that investors put up asked that we reply "in words an prise has. And to be reasonable
their savings to buy the telephone eighth grade student can under¬ and convincing in their dealings
with the public, employees must
equipment that employees need stand, so I won't have to hire a

anything but the telephone busi¬
ness—but it has always been good and use in their jobs.
I won't describe all the other
reading. Another company's in¬
sert, which features human inter¬ means we use to tell the telephone
est

to know it.

Public Relations Program
our

than

looks

That

good.

Boston

Chicago

New Haven

Philadelphia
London

Amsterdam

Providence

Volume 172

Number 4968

The Commercial and Financial Chronicle

(2305)

Continued from first page

Mississippi Valley
John H.

enterprise.
ica

Ahead"

also

had

display a model
exhibit, entitled "Money Tells Its
Own
Story"
and
recommended
that the Association authorize
pro¬
duction of this portable exhibit for

by member firms and groups
in all parts of the country.
The Education
use

der

Smith

Fenner
at

Merrill

Lynch,

Beane

White

Pierce,
that

announced

Sulphur

Springs,

the

in the Fundamentals of In¬

vestment

Banking

make

throughout the
training program com¬

country a
parable to
set

order

available

the

class

room

course

have had the tentative draft

Education Committee recommend¬
to

the

Board

published.

that

The

the

manual

project

was

ited

the

and

booklet

should

and

source

may

well be a
provide

and

revenue

To Class II from Class A__

Class

248

To Class II from Class B__

223

To Class II from Class C__
5
To Class A from Class B__ 47
To Class A from Class C__
8

Valley

In addition there

To Class B from Class C__

921 reg¬
branch offices of members.
totals
compare
with 686
were

Hemphill, Waldo Hemp¬
Co., Seattle.

Classification

Class

To Class C from Class B__

Class

Southeastern

Joseph W. Sener, John C. Legg
Company, Baltimore.

The

net result of these

changes

upon the membership structure is
given below. The figures used are
as
of Sept. 1, the effective date
of the changes, and do not reflect

Courts

Southern

Jr.,

classes:

Co., Denver.

Hugh D. Carter,
Co., Atlanta.

To Class B from Class A__

Aug. 31, 1949.
Aug. 31, 1949, the Board
has approved 52 applications for
membership in the following
Since

Amos C. Sudler, Amos C. Sudler

Lowered

To Class II from Class
l-_
To Class A from Class II
To Class B from Class II__

fiscal year on

Rocky Mountain

152

members and 857 registered branch
offices at the close of the 1948-49

Waldo

pocket

Committee

I from Class C__

120

Class

Pacific Northwest

early in 1951. It
size, 64 or more &
pages,
and will sell for about
$1.00-$1.50 a copy. It will be pub¬
lished by the Association under
&
the
auspices
of
the
Education
will

Cartwright, Sweney, Cart- istered
wright & Co., Columbus.
These

be¬

724

hill &

13
11

Class

Reid,
Maynard
Co., Cleveland.
Ohio

I from Class II__

To Class

I from Class A__
I from Class B__

To Class

follows:

I--

Class

Todd

available

come

White,

Murch &

initiated by George W. Davis and
is being prepared under his direc¬
The

Class

Northern Ohio
Frank

of this manual for review and the

preliminary draft is al¬
ready being coordinated and ed¬

"Board of Governors approved the
establishment of a correspondence
course

and members of the Board of Gov¬
ernors

To Class

members classified

New York

Another

Committee, un¬
Chairmanship of Norman tion.

the

Inc., Boston.

courses.

real progress was reported. Mem¬
bers of the Education Committee

authorized by the Board at the
Spring
Meeting, the
following
changes were made and placed in

According to the Report of the effect on Sept. 1:
Membership Committee, the Asso¬
Classification Raised
Abbe, Blyth & Co., ciation, as of Nov.
1, 1950, had 724

Commit¬

ten years ago.
The Public Education

tee

ing the inauguration of additional

produced

was

Upham

New England

Charles

project recommended
Clarence E. Goldsmith,
at White Sulphur is the Manual on
Merchandising Securities. On this Weld & Co., New York.

The IBA film "Amer¬

Looks

Burns, Jr., Harris,
Co., New York.

Co., St. Louis.

IBA Holds 39th Convention
investment banker in that
process,
including the essentiality of the
investment banker under private

Stock Exchange Relations: James

Crago, Smith, Moore &

previ¬ additions and losses of members
ously canceled, were reinstated, since that date.
Southwestern
The Education Committee of the
making a total of 54 additions.
Before Reclassification
some
2300 trainees at more than IBA also proposed an Investment
Victor H. Zahner, Soden-Zahner Membership losses since that date
Class
I_
41
total 16, of which three were due
twenty universities and colleges Banking Seminar — a nine-day Company, Kansas City.
Class II
54
to
throughout the land. At the pres¬ program to be held each summer
consolidations between mem¬
Texas

immediately following the

funds

for

other

conclusion of World War II. This
class
room
program
benefited

the

and

Also

two

memberships,

Association.

ent

projects

time, however, the class

room

being offered in only
of the larger cities:
Chicago,

program
few

registrants to receive an ap¬
propriate certificate upon comple¬

Class A

bers. The net gain,
therefore, since
Aug. 31, 1949, is 38 members, ex¬

Edward D. Muir, Russ & Com¬
pany, San Antonio.

271

Class

tion
clusive of the applications which
of
three
summer
sessions.
will be presented to the Board at
Western Pennsylvania
Minneapolis and Wash¬ This Seminar is planned for per¬
sonnel at the partner-officer level
this meeting. A list of
ington.
Hence, the home study
L.
membership
Wainwright Voigt, Hemphill,
program."
(somewhat akin to the Graduate Noyes,
Graham, Parsons & Co., changes since Aug. 31, 1949, is
School of Banking sponsored by
attached.
"The Education Committee," Mr.
Pittsburgh.
The Committee's chief
Smith said, "consulted a number the ABA).
project
National Committee Chairman
during the year has been its re¬
of leading schools, completed ar¬
Committee Reports
The following were announced view
of
membership
classifica¬
rangements with the University of
During the progress of the Con¬ as National Committee Chairmen tions. In this review it was found
Chicago, and in cooperation with
that a substantial number of in¬
the School of Business and the vention, the member heard the re¬ for the year 1950-1951:
a

Class

256

Denver,

Home-Study
institution

ability
course

the

are

the

that

avail¬

correspondence

of Oct. 20,

trations
rate

Department

announced

1950.

Regis¬

being received at the
to

week

and

over

ninety registrants.

The

University reports that never be¬
fore have they had so heavy an
enrollment for a new home-study
course
in the weeks
immediately
following the announcement. Many
investment bankers at the officer-

partner level have shown
sonal

training op¬
portunity and are promoting the
program. Incidentally, this course
and

public

inquiries and applica¬
being received from this
source.. Wallace Fulton of NASD
has been helpful and has sent our
tions

many

members

encouraging them to

roll their trainees and to

project

the

attention

this first

basis

the

call the

all

success

these

committee

elsewhere

Governors

for

three-year

the

terms

replace

Joseph L. Ryons, Pacific Com¬

is consider¬

ner

Canadian
James A.

Gairdner, Gairdner &
Company Limited, Toronto.

Hall

war,

Harris,

Schmidt,
Schmidt,
Poole & Co., Philadelphia.

Company Limited, Toronto.
Hal H.

Robertson

219

718

Investment Bonds and Stocks

Dewar, DeSan

Pancoast,

Lynch,
Pierce,
Beane, New York.

Fenner

Federal Legislation:

Federal

William K.

Barclay, Jr., Stein Bros.
^Philadelphia.
Taxation:

& Boyce,

f
I

James

Finance: Richard W.
Simmons,
Blunt Ellis & Simmons,
Chicago.
H.

Craft, Guaranty Trust Company
York, New York.

of New

Group

Company, Detroit.

Chairmen's:

Boles,

The
lumbus.

Ewing T.
Company, Co¬

Ohio

Industrial Securities:

Minnesota

Knopp,

Education: Norman Smith, Mer¬

Michigan
William M. Adams, Braun, Bos-

Class

Governmental Securities: Robert

Bernard

248

Antonio.

Eastern Pennsylvania

worth &

Hutton, Jr., W. E. Hutton & Co.,
Cincinnati.

States

Washburn,

Company, Chicago."

Walter

Conference:

of California, Los Angeles.

Central

Accordingly,

119

Class

Burr Incor¬

rill

California

Hempstead

existed.

Aviation Securities:
Henry W.
Cohu, Cohu & Co., New York.

members whose terms expired:

pany

equities

Albert

Class II

porated, Boston.

serve

Association

Review:

Armitage, Coffin &

Class
Class

Canadian: J. A.
Gairdner, Gaird¬

by their respective groups to

home-study offering the

Education Committee

given

Administrative
T.

Group Governors

en¬

employees."
the

most
are

The following have been elected

are

announcement folder to all NASD

this issue of the "Chronicle."

per¬

interest in this

is available to the general

texts

reports

al¬

though only about a month has
elapsed since the announcement
we are pleased to
say that we now
have

ports of the various standing com¬
of the
Association.
The

mittees

718

After Reclassification

The

First

Chapin S.

United States Government Securities

Newhard, Newhard, Qpok & Co.,
St. Louis.

National Bank of St. Paul.
Investment Companies:
S.

International Bank for Reconstruction

Edward

Amazeen, Coffin & Burr Incor¬

and

porated, Boston.
'

Development Bonds

•

Membership:

Andrew M. Baird,
A. G. Becker & Co.
Incorporated,

Chicago.
Municipal Securities: Lewis Mil¬
The First National Bank of

ler,

■

State, Municipal and Revenue Bonds
Industrial

Chicago, Chicago.

Public Utility

•

Railroad

Bonds and Stocks

Oil & Natural Gas Securities:
William S. Hughes, Wagenseller &

SERVING

DEALERS
since 1888

Bank and Insurance

Durst, Inc., Los Angeles.
Public

Education:

Johnson,

The

Joseph

Milwaukee

Service

Securities:

Company Stocks

Com¬

Canadian and

pany, Milwaukee.

Public

Foreign Bonds

Wil-

lard A. Lynch, W. C.
Langley &
Co., New York.
Railroad

HORNBLOWER & WEEKS
Underwriters and Distributors of Securities
40 Wall

Street, New York 5, N. Y.
Telephone: DIgby 4-6600

Members Sew Y*rt Stub

Offices:

Bergmann,

Charles L.

Pressprich

•

Distributor

•

Dealer

Co., New York.
Research and Statistics:

W. Yost

Fulton, Maynard H. Murch & Co.,

New York

Boston

Pittsburgh

Chicago

Cleveland.
Small

DETROIT; PROVIDENCE; PORTLAND <4 BANCOR, ME.

Underwriter

Exchange and ether Princifal Exchanges

NEW YORK; BOSTON; CHICACO; CLEVELAND; PHILADELPHIA;

Securities:

Business:

Raymond

Stitzer, Equitable Securities Cor¬
poration, New York.
State

Legislation:

Vrtis,
Glore,
Chicago.

Charles

Forgan

Co.,

Philadelphia

Cleveland
Private IVires

all

San

offices

Francisco

Financial Chronicle... Thursday,

The Commercial and

civil

Continued from first page

that agency of gov¬
ernment had handled, 45,013 fidu¬

Trends in American

Fiduciary Fields
have

that

idea

she

fashioned

was

doctrine, in a recent
Arthur Schlesinger,

with

debate

feebly
breathing in 1914;
that her last illness began in 1918,
that she had a rallying period, al¬

still

history at
informed

Jr., a young professor of
Harvard, I was roundly

Herbert
through
Spencer since the days of William
and that she
McKinley,
and that
any
such
finally expired in a blaze of latter
platitude
is nothing less than
day blooming in 1929, to be buried
"corny"
as
applied to today's
forever on a rainy day in 1932.
society. In economics, similarly,
If I measure a modern era, in
during Victoria's time, hard money
what I have to say, therefore, I
was
important. In the science of
am inclined to start with 1929, and
government a comparative free¬
I am speaking of the approximate
dom from direct taxation was con¬
20-odd years which have elapsed
sidered good policy. The banking

most

that

hysterical in nature,

since that year.
I
to

read

had

one

early twenties,

the

that

finger

any

upon

period of 20 years of human his¬
tory during which a man from
Mars could have observed more
fundamental
and
sweeping
changes in the habits of
the daily life of the

thought

and

tants of this

inhabi¬

planet.

for

Look back,

England and America of the
and Edward. In
realm
of
government and

at the

time
the

of Victoria

sociology Spencer was still arbiter;
his
liberal philosophy still de¬
manded

minimum of state inter¬

managing

money, was

people's

strictly private in na¬

ture.
,
Today there is I no hard money
anywhere in the civilized world.
Today the American banking sys¬
tem is the only banking system
in
the
world
which
by
any
stretch of euphemism could be

Today the

private.

called

brief moment,

art

and, the

system,
other

investment

and

historian but it seems
it would be difficult

one's

place

inci¬

amounts
to fractional confiscation. In the
Victorian management of other
people's money, that most stuffily
independent of professionals, the
family trustee, was the subject of
capricatures
and
cartoons
in
of direct taxation

dence

"Punch." He was the
Blimp of the
world.
Today
in His

ference

novels and in

veritable

was

>vith individual freedoms;
even asserted and common¬

ly believed, strange as it
sound to modern ears, that
ideal

society

man

may

modern ears. When I
the value of that old-

asserted

business

Colonel

in an Majesty's empire the most im¬
must have the portant' single fiduciary is the

right to enjoy the product of his
own
labor.
Yes,
that
sounds
strange

of tion, chiefly wills, appoint corpor¬

hundreds

with

servant,

employees;

by the close of its
financial year 1949-50; it was ad¬
ministering, as of March 31, 1950,
a total of nearly 250 million Brit¬
ciary

December 14, 1950

(2306)

Public

Trustee,

set

please, with Victoria
tax

money,

run

up,

you

government

by a sub-cabinet

ish

cases

Empire,

the

with admitted use

There is, however,
to this coin.

and

the

savings of previous generations. It
forcing
a
redistribution of the

now

too

nobody

The 1949-50 report of

mind

right

his

any

of England ob¬ longer doubts either the purpose
serves
that the number of new or the effect of modern legislation
increasing areas of productive real
tax field,
and, in many
trusts of less than £5,000 in value in the
estate, the value of which is not
in that office increased in the year other fields. It is true, for one ex¬
included
in the figures I
have
just closed from 53% to 54%.
In ample, only, that the whole pro¬
given you.1. It is a public owner¬
ceeds
of tne Federal Estate Tax
the United States, where the banks
ship of the most virulent kind,
advertise so extensively, and are is a paltry item in our national
operating
in
an
area
where now
going
to
work on
what budget, not greatly in excess of
privacy is the highest considera¬
amounts
to
a
mass
production the amount by which potato grow¬
tion and the strongest tradition.
ers have been subsidized each year
basis, this tendency toward small¬
for several seasons — yet all the
er-average size trust portfolios is
Growth of Bank Trust Funds \
talk is for further increase and I
even more marked; one result of
active
merchandising cam¬ think we must look forward dur¬
In the United States, according this
ing your lives and mine, unless we
to the reports of the Comptroller paign is that the man of average
have
a
determined reaction of
means is coming to recognize the
of the Currency (which were first
trust as the tool of the poor man very great force, to a ceiling for
published in 1928) there was held
all practical purposes upon income
in trust by national banks in that as well as the rich. A survey made
of nearly 150,000 trusts managed earnings (and at not too high a
year a grand total of just over $3
868 banks three years ago figure) and to an increasing tax¬
billion.
Those trust funds chiefly by
showed that nearly 74%
of the ation, yes even confiscation, of the
represented old-fashioned family
trusts produced an annual income bulk of substantial estates.
estates; they were administered in
This, of course, will tend to
the Victorian manner, with heavy of less than $3,000; that 54% pro¬
duced an annual income of less place a premium upon the further
emphasis on so-called safety of
establishment of charitable funds
than $1,200.
principal, in-large allotments for
Internal Revenue figures show and enterprises of all sorts; some
the benefit of people of weaith.
accelerating increase in the fraction of each generation's sav¬
The income tax rate in 1929 was an
ings will pass into the domain of
infinitesimal; there was almost no proportion of estates of less than
charity; but as recent events in
estate tax. In the magazine "Trusts $100,000. There are certainly many
Congress clearly show the charity
and Estates" for June of 1950, by more estates of $100,000 and less
must be pure and unadulterated
in the United States than there
way of contrast, one finds an arand
not
rooted
primarily in a
tible entitled "Trust Funds Over ever have been at any time in our
spirit of tax avoidance. There will
Fifty Billions" (this reports only history. This statement, on con¬
be an increasing tendency, also,
National
Banks
and
State
and sideration, is not wholly discour^
to split up individual ownerships
Trust Companies) and one reads aging. As in the case of the de¬
and
to
liquidate, on favorable
that in a single state, Pennsylva¬ creasing average size of trust port-?
terms, private proprietorships. For
nia, the total amount of personal folios it is partly the testimony of
continuing to hold an income pro¬
American
proprietor¬
trusts in State Chartered Banks increased
ducing business until death super¬
alone
(excluding
the
National ship. Our population has! increased
venes is to invite grave risk if not
Banks) exceeds the grand total in by more than 20 millions in the
disaster; it is a little like buying
1928 of all banks of all kinds in past decade (a fact not sufficient¬
a quality bond at a high premium;
the whole Republic, and that in ly recognized
in most statistical
there is only one way it can go in
New York State the total of bank computations) and naturally there
value if the tax collector is taken
trusteeships may be nearly $15 are more small estates than there

holds legal

title to enormous and

the Public Trustee

into account.

And, of course, that fig¬ ever were. It may even be a good
billions excludes all portent for the future. As James
corporate trusts of every kind, Bryant Conant sdid, in his "Edu¬
mortgage trust indentures, bond cation in a Divided World":
of

ure

ESTABLISHED 1845

are not quite so frank in
official pronouncements. But

our

well

billions.

Clark, Dodge & Co.

Victoria's

size of the fi¬ try

portfolio is all

established.

produced a convulsive change
Kingdom but it is
historical fact. In this coun¬

has

another side

The trend in England
United States toward

decrease in average

duciary

Size

Average

Trust Funds

by government

to tax for the precise
admitted social purpose of

of the power
and

trustee, executor and guardian;

fiduciaries.

Decrease
•-?

in all
with

cities,

various

branches

acting

pounds;

corners

ate

1943 Julian

S. Myrick, Vice-

President of the

Mutual Life In¬

$50

Company of New York,
wrote an article for the "Life In¬

surance

"Our unique contribution is not
pension
and
profit
sharing trusts, most educational in abstract thought nor in art nor
and religious trusts. Indeed it ex¬ in poetry.
It is rather in a de¬
cludes, even, the insurance trusts monstration that a certain type of

indentures,

answer

do, so to speak, constantly

large fraction of the members find,

by Dr. Conant

article

tax

ly personal and private in nature, ists can be closely approached in
are not listed according to the face
reality — a free society in which
values of the policies involved but the
hopes and aspirations of a

rates Mr.

Myrick asked:
you have to

"How much would

annually for 10 years or

earn

20 years,

after allowing for

hang

over

investment.

Exchange

York Curb

Exchange

New

special
61

Wall Street,

New York 5, N. Y.

and

reserves

business,

insurance

millions
of

accounts in

banking,
company accounts.

thousands

Nor

billions

and

the

and
Federal governments which at law
must be given the trust label.

hands

Underwriters, Distributors and Dealers

cities,

Corporate and Municipal Securities

towns,

state

Annual Earnings

fiduciaries

these

may

There

are

$85,000

$100,000—it would take
"

for 20 years

$32,000

250,000—it would take
500,000—it would take

600,000

190,000

1,270,000

550,000

1,000,000—it would take

2,130,000

1,075,000

Rights

rum many
no

Annual Earnings
•

for 10 years

To leave "net"

Fifty billions, indeed! One may
conservatively say two hundred
billions as a minimum, and for all
we know the total aggregate of all
times that.

statistics

Scrip -Warrants

reliable sort in respect of

of any

this fiduciary aggregate but we do
that

know

this

nation

ours

REORGANIZATION SECURITIES

totals of everything from
dollars to doughnuts have a way
of reaching staggering proportions.
The
amount
of ' other
people's

grand
Net Markets

Institutions and Dealers in

Corporate Stocks and Bonds and

Foreign Issues

for example, which is in
of American lawyers,

money,

the

hands

accountants,

Members New York Stock

CO.

H I R SCH

ness

BROAD STREET, NEW

YORK 4, N. Y.

1624 Eye

St., N. W.

Koyser Building

208 Commercial

Baltimore 2
Tel: Lexington 7861

LONDON,

ENGLAND

Direct

—

Wire Service

Representatives:
—

New York,

Building

Gastonia, N. C,

Washington 6
Telt National 2545

Tel:

GENEVA

•

GAstonia

5-2317

AMSTERDAM

Washington and Baltimore

for

management

My own guess

must
is that

M2Donmell & Qo.
Members
New York Stock

equal the amount in the
corporate institutions; for
while the banks have been mak¬
may

New York

hands of

Teletype: N.Y. 1-210

Telephone: HAnover 2-0600

men,

be immense.

Exchange and Other Exchanges

investment
counsel
just plain busi¬

and advisers, and

it
25

for

modest

satisfactions
through living expenses, to leave your
the market for future enduring
Nor, of course, are the outlets once reserved for only a heirs, net, $100,000, or $250,000
or $500,000 or forsooth $1,000,000?"
countless individual trusts of the small minority of mankind."
nation included in this $50 billion
He then set forth his answer
This js a kindly way to describe
figure nor guardianships, conser¬ the "share the wealth" program to by a chart which showed that—
These figures speak, of course,
vatorships
and
committee
ar¬ which we have now all become
rangements of many kinds.
Nor accustomed.^ In England that goal, of savings other than life insur¬
college and church endowments, with all that it implies is an offi¬ ance. To some degree they have
nor
library and cemetery funds; cial and continuing public aim, been ameliorated, for the man
nor
union treasury deposits, nor

MEMBERS
New York Slock

which had
been
published in the "Atlantic
Monthly." Speaking of the 1943
which, while strong¬ society long dreamed of by ideal¬

of the nation

which

News"

surance

ing great strides otward command
of the field it is still true that

120

BROADWAY, NEW YORK 5

the

probate

registries of the na-

Forty-second
Report of the Public
of England for the financial year
1949-1950: London;
His Majesty's Sta¬
1

Trustee

tionery

Office 1950.

Tel. REctor 2-7800

minor fraction of the in¬
struments which are recorded in

only

Exchange

Curb Exchange

BRANCH
254

Buhl

Park

Ave.,

OFFICES

Exchange, New York
Place, Asbury Park, N. J.

New York—Produce

Building, Detroit, Mich,— 1 Press

Volume

172

who has

Number 4968

The Commercial and

Financial

Chronicle

(2307)

the

sions

wife, and

keep her,
deduction provi¬

marital

the

1948

act.

But

re¬

mains very true that the problem
the well to do owner of the

brick works, or the paint factory,
or the
dry goods store, (in other
words

the

And

can

typical

successful

Morgan Stanley in its re¬
study of Pension Plans and

cent

common

have, in a great
shown better results

cases,

million

dollar

proprietary value in his estate is
almost unsolveable

cannot

save

income

after

not

enough

wife, to take
estate

tax

out

taxes,

married

He just

one.

his

especially
has

lost his

of his inevitable

care

problem.

So naturally
he will play increasingly with the
idea of giving his ownership away

by degrees, or of selling out on a
capital gains basis at a favorable
chance.

The

Revenue

Bureau

reports

Internal

total

gross

billions in gifts in the past

seven

They

years.

not

are

all

made

The

best

is that

observing
the breakup of American fortunes,

retained

the

earnings,

there is

growth factor in

stocks

bonds

which

not

they still have
reaction

fiduciary circles
Victorian

importance:

savings

decreasing

fiduciary

port¬

folios;
A

progressive breaking
private proprietorships of

many sorts.
I

tendencies.

reaction

ture, to

check
And

yet, of

any

see

of
no

positive

na¬

steadily increasing bur¬

den of taxation. Whether the

reve¬

is not needed, we

apparently decided
eliminate the
Decrease

instruments

that

man

nation to

wealth.

Income

instruction.
of

you

There

percentage

kind.

every

John

Senior Analyst of

has

yields

Sullivan,

Merrill Lynch,
Beane recently

Pierce, Fenner &
pointed out that in 1929 the aver¬
age yield from AAA bonds was
approximately 4.73%; in 1939 it
was
3.01%; in February of 1950
2.58%.

was

here?

Where

one

what

the

would

be.

does

can

of course, but

sure,

say

dried

And

all know

sophisticated
It

will

guess

to 2%,

with

the

fifth

comes

mind

have

There

has been

crease,

per¬

with

much

know,

es¬

be devised

common.

power

in¬

as most of you
little doubt about the

some

and

right

American

fiduciaries to purchase the shares
of investment
companies and in¬
vestment

broader

re¬

trusts. That doubt has,
glad to say, been dissolving

the

work

reluctance of trustees to take even
a
minor fraction of a chance on

for

the

heard

much

almost

universal

draftsmen
ment

The

1950

makes

big city

among

second

private

reaction

trustees

the

law

broadened.

plus $2,500 in interest earned

over

1950

are
now
worth $7>125
purchasing power; but
$10,000 invested in five good
stocks,
including
Chrysler
and

Standard

Oil

their

cash

California
dividends

grown

to $66,000 in 1950, and are now
worth, in real purchasing power
$37,600.

man

money,:

honesty of fiscal manipulation

and unless it be
by air but it is now
political recklessness in respect to clear that he
must rid hirftself
of
the savings of the
people of this all vestige of the so-called
Series
country. I am as much nettled as G Complex which

has

else

anyone

the

much

officious

enemy

the

been

dencies of small caliber characters
who make the mistake of
believ¬

it. I sometimes
wonder, with

many
of you, whether Lincoln
could have been
right in his high
estimate of the judgment of all

the

into

that

fooled

and

for

crisis-filled

have

courage

safety will force hinx

collective

action

fiduciary operations, but

public

labor associations

charitable

their way
around or over
about any obstacle that is
put in
their way. Inflation or no

may

tion, political trickery
political
trickery,
we

the

well as those

nature.

will, therefore,
tention, I think

are

pay

Your

and

overcome

problems

pear these

and

The

tracts,

the

estate

Future

the side of reform.

may

California

and

consisting of
annuity con¬

some

requires

mind and

imaginative

lot of courage to attack

problem of the future

but your

interesting

try which

seems

re¬

Underwriters

sponsible and thoughtful in its
(1945),
Texas
attitude toward
fiduciary prob¬
(1945),
Maine
(1945),
Nevada
(1947), Oregon, ,(1947), Washing¬ lems, to bring about a definite
ton (1947), Idaho
change in the statutory law to
(1949), Kansas
permit acquisition and retention
(1949), Oklahoma
(1949).
New
of this sort of
York
became
security.s Since a
35%
virtuous
in
July of this year. Other states are great many jurisdictions are now
now
actively pushing the reform. operating under some form or the

(1943),

new market.

The
some

third reaction

was

form of diversified

collective

funds,
been

than

under

statutes

a
peculiar objection
against this type of hold¬
ing. I hope that you will interest
yourselves in this program and

agreed, I think, that
here

are

growth

is,
for

structure

however,
they

and

are

Their

only

mod¬
intricate in

difficult to

admin¬

2 A

Report

Trust

Bankers

Street, New

the

Trust

Division

Association,

York

Investment
New

York

(1949).

ican

Trust

Trusts

4 But
years

ago

Funds—-a

Estates

Nationwide

Nov.

1950

Study,

(P. 740).

were

markedly.
Ten
only ten funds in

operation, administering about $18 million.

120

Securities

NEW

YORK

STOCK

Telephone BArclay 7-3500
PONT

BUILDING

WILMINGTON, DEL.

EXCHANGE

BROADWAY, NEW YORK 5,

ELM

STREET

LINCOLN

how

see

against

interesting, I think,
this

the

field.

Indeed

shall

summon

venture

few

Model

Proposed

Prudent

BUILDING

9 Lewis Street

Hartford, Conn.

Tifft Brothers

Crowcll, Wcedon & Co.

1387 Main Street

650 S.

Springfield, Mass.

Los

Spring St.
Angeles, Cal.

up
re¬

predic¬

tions, But before I make them
5 Sec.

Boston, Mass.

fiduciary

LIBERTY

Tifft Brothers

50 Congress Street

corrosion

the

in closing these

courage,

marks

in
I

Schirmer, Atherton & Co.

desperate battle

forces

forward

goes

the

PHILADELPHIA, PA.

DIRECT WIRE CONNECTIONS

will

Bell Teletype NY 1-1248-49

NEW HAVEN, CONN.

Amendment

the

Man

ments, Robert L.
Boston Fund Inc.,

Statute, a pamphlet
on
Arrange¬
Osgood, Vice-President,
Boston, Massachusetts,

Chairman.

U. S. Governments

Municipals

Railroads

Public Utilities

Equipment Trusts

Preferred Stocks

Bank

BEAR, Stearns

Stocks

published by the Committee

accelerating
there

MEMBERS

Liberty

These funds
(discretionary) are ad¬
ministering about $427 million. See Amer¬

Insurance

Laird, Bissell & Meeds
DU

you

and

Bonds

can.

generally

stay.

ister. And, of course,
they are not

Committee,

give it your support wherever

than

common trust

and

Unlisted

delegation,

which

now

Bank

Utility

Securities

Municipal

levied

70 discretion¬

enacted

states.3

State

Distributors

Public

Railroad

step which has needed to be done
because of the old legal
bogey of

ar¬

rangement. That reaction led to
the creation of the
tax-exempt
now

Industrial,

other of the prudent man rule it
has seemed best to alter that rule
a
bit to specify these shares—a

find

to improve management
economy and efficiency by some
way

have

and

Illinois

Canadians

Acceptances

Members New York Stock
Exchange

Salomon Bros.

Members New York Stock

Hutzler
Exchange

Sixty Wall Street, New York 5, N.

today

industry is well equipped

Industrials

NEW YORK

under

very

there

(1943),
Minnesota

(1943),

see

planning

shares of investment
companies and some securities of
individual
significance.
It
cer¬

predict that the American fi¬
the

men

sedate

kits which ap¬

duciary is going to be much more
circumstances like those
imaginative and alert.
Compul¬
sion

the

their

days in many branches

insurance

tainly
Fiduciary

merchandising;

life

maintain this nation in its
present
relative position; a
position which
is second to none.

packages, like the
I

have,

at¬
special type

closer to

profession

evolution

manpower, the brain
the national will to
our

be drawn

planning activities.

infla¬

the

group

increasing

to the

activity which is the subject of
this
morning's
discussion.
You

find

think,

well, and in the fields of

power

in¬

pace.

pri¬

vate

pretty hard to stop in their tracks.
They have proved their ability to

We shall behold
that development not
only in

per¬

sistence, intelligence and faith

keep

also, that considerations
economy, efficiency, complexity

creasing

Those

years.

strength,

predict,

main

who

rather

and relative

people, for we certainly know
some
large fraction of the
can

and

best he can, in the
area
of real values
and maintenance
of
the
purchasing power of his port¬
folio and its
recurrent yields.
I

ing that they hold high office be¬
cause they have earned it
or de¬
serve

book

values

abreast

persistent,
even is going to have to be as
alert, in with both and I have no doubt
linger. There New England, for
example, as his that you will explore and develop
growing clamor for final re¬
great, great grandfathers were and this very
lief. For that reason

Delaware

e.:

industry.

meddlings of pip-squeak bureau¬ He will, I
predict, strive rather
crats, and at the blow-hard ten¬ less for the
preservation of

pany and investment trust indus¬

have,

invest¬

alert than his fathers
and

grandfathers. Since the times have
disgusted as the changed
somewhat, he may Inot
about the essential dis¬ run
Clipper Ships on trust

where small doubts

1943, by

states,

years

that

collective

ary

dollars

far

campaign under way, sponsored
by a group of the investment com¬

purchasing

much

"Model

are

1940

reasonable

Prudent Man Investment Statute"
has been adopted, since

erate,4

10,000,

managed

ment

demanded

also

you

continuing de¬
terms,

current

well

that

that unspe¬

and

have been vastly greater. But the
desire to have the
opportunity of

trustees.
was

not been for

personal liability I believe that the
ve/y respectable quantity of sales
already made to fiduciaries would

giving wide invest¬

professional

$5,700

powers

funds

have

you

trust fund, of which there

speaking in broad

that

investment

acquaintance.

working

which

plain that the custom has become

the purchasing power of the
dollar. Dean Witter says that 10,000, 1940 dollars are now worth

power;

trust

traditional

good part of the time. But in the
I
am
confident.
I
have
watched
American
businessmen

earn¬

average successfull
It is certain to be¬

man.

out

can

people

There has been,

accumulated

common

tendency

with

come

productive

for the

American

the

that

should like to reveal myself

somewhat prejudiced optimist.

acquired

Division which 2 laid the ground¬

for

haps lower.
which

today

Seeing that

basis. .This is perhaps the best

cified trust powers would be auto¬

Yields

fixed income bearing securities of

painfully

rapidly and if it had

reform in

continuing decrease in the

amount

from

investment powers. Indeed the

matically
no

been

however,

were
constantly
narrowing he began to draft his

have

Upon the fourth tendency
need

ings of the head of the family on
a progressive and
regular periodic

a nervous

had

age

and that
vestment choices

legislation

nothing to

see

those

nue

cent report of the New York Trust

Third:
up

company

displayed in

was

effectiveness

rapidly

for protective
reasons,
diversified portfolio in

tate program

the

form

good investment
company or investment trust; the

fiduciary management pro¬
fession has naturally reacted to all
these trends. Trustees may be

first

fiduciary

managed investment
companies and investment trusts.

the

sophisticated lawyer.

First: An enormously increasing
aggregation of fiduciary funds;

American

reliably

and

The

the

Tendencies* life insurance and the investment

Reactions to

dumb but

insurance

com¬

present

preferred stocks."

Trustees

benevolent

nowadays, while
outlining his recommended pro¬
gram, in terms of a family trust,
most
likely of the living trust
variety, instead of a will, of life

in¬

efficiency, the introduc¬
tion of new products, and all
pro¬
gressive developments. In short,
mon

And the American estate
planner
is likely to think,

creased

the

from

and

We have, then, seen within 20
odd years three trends of marked

size

common

reinvestment

dead and alive!

Second:

stocks benefit from the growth of

population,

not really suited to

are

banks,

is naturally turning to the shares

from

system!

out of sheer goodness of heart!
We
are,
therefore,

average

tions.

many

explanation.

give for this

they

smaller

and charitable funds and founda¬

long

over

periods

can

stocks

common

large amounts and who dies with
or

and

relative perform¬

of bonds and diversified lists

stocks.

half million

says:

"Tests of the
ance

American) who is uninsurable in
a

stocks,

available
to
many
types
of
trustees; they cannot be used, for
example, by individual fiduciaries

Privatt wins t$

CHICAGO

boston

philadelphia

cleveland

hartford

chicago
san

francisco

Financial Chronicle

The Commercial and

...

Thursday, December 14, 1950

(2308)

Output, Not Controls—
Key Weapon In Crisis!
and

Effort

the
won't come

which

That

being

case,

heavily

our

military

and

strength

can't

ourselves and others to
arrive at a position where an allout

war

and

course

work

maybe we will be successful. The
main distinction between this kind
of

involved

mobilization

in all-out

First,

our

We must

build

must

war

defenses

up enormous

side.

maintain the strength of our

rapidly.

other

the

strength
But we must

industrial

and

side

one

fold.
build

military strength on the

between

and that
in all-out war is two¬

defense

in—so long as we are

operating in absolute balance up
to
our
strength, and decide to
avoid an indefinite length of time
in contrast to the long, hard pull,
we
have to be very much more
careful about the balance struck

be
this

follow
toward it, and

must

avoided.

safely

may

now are

strength, because if we do so we

ness

man¬

trade,

business,

to be

had

tion

and

for

Now if

There
nomic

based

anybody looks on
as outlandish, fantastic,

Co.

Established 1920

TELEPHONE

20 PINE ST.

WHITEHALL 3-3414

5, N. Y.

Bell System

Teletype—NY 1-535

Inflation

tion.

Municipal Finance

Constructive Service to

Municipalities

structive

Municipal Finance

the financing of

public

con¬

other

This service includes experienced

development

reorganization

for Cities, States and

planning service

governmental units.
assistance

render

of plans for

existing

debt

period

year

planning

self-liquidating projects, and financial

relations.

NOT

BUY

SELL

SECURITIES.

are

pleased to cooperate with finan¬

investment houses.

might

reached the $350 billion

idea
can

five-

fact that

have

1944
the

about.
we

program
income gen¬
erated and the amount of goods
available
to
business ar>;d con¬

over

lift

can

real

spoken

output,

production
will
be
large
to support any defense

mum

within the maxi¬

even

talked

been

has

that

size

That

One

can

could
fense

the other factors at

course

have

all

does

the

there

not

ation.

fense must be borne

was

de¬

Obviously
we
cake and eat it too.

program.

can't have

our

the people

taxed for it or

mean

things

work entirely,

be covered by tax¬
The burden of national de¬

must normally

and

about.

the other is

the gap

buyers insofar as

represented, but a deficit, inso¬
as
the
government cannot
draw out the amount to take up
far

strength, to a point that

program,

between the

1939-1944,

national

our

but

sumer

the next five years

expand

can

ahead

had

date

1954

the

the defense

power,

$300

in at least two years

there

production will generate
buying power. Total

will be

billion that it was
obvious we would be

perfectly

production we
It is a basic

production would only avail more
business
and
consumer
buying

we were

through

and

income

mark and

1950, before the Korean event,
up to $270 billion, and so

that

control inflation.

by the nation

whether they are
not, because when

you

plant,
fund,
don't have available civilian

and

business

put management, labor,
equipment into a defense

you

private control,

implies

too

Whatever

enjoyment

and you

progress

much

competition for these prod¬

The second device is that of in¬

production.

creased

^he

long

tion and the

vectaiA

favorable solu¬

fundamental.

run

that is

The final

reason

everyone

REGISTRATION STATEMENTS

PROSPECTUSES

world

struggle ought to try to
select the weapon he can use best.

I don't believe we are ever

ANNUAL REPORTS

going

•

PROXY STATEMENTS

and all related documents

to be able to out-control the Rus¬
sians.

cial institutions and

that in

ucts.

financing,

new

structures,

the

two ago

year or

a
me

main

buying power com¬
peting for a limited supply of
goods.
If controls are designed
one
way or another to get goods
where they are needed, we could
control

As Consultants on

Although production is the

and

money

Consultants

that

occurred to

Through

fighting weapon we have—and we
must
do
everything possible Jo
stimulate that—let us not get the

privilege of calling their attention
to the fact

should
provide

production.

Production

be¬

yond imagination, let me take

and

blocks

road

stimuli to

Be¬
these fig¬

ures

eco¬

in.

profoundly

production

The government

greater.
remove

for
can

make in have to pay for the burden, and if
you
try to buy it by so-called
the next few years will be less ef¬
and has an effect on public pol¬
fort on our defense burden, and borrowing, it is a misnomer.
icy, whether it is government or we must not sell America short,
Thus, if I have $100 in the bank
self-control. In the final analysis,
and it is used by a businessman
but we must not overestimate our
every type of control, whether in
present strength
and potential. who borrows it for plant and pro¬
the large steel industry, in auto¬
We must step up and expand our
duction, he draws the strength
mobile output, or for national de¬
the economy, and my savings
real strength by more investment,
fense, goes into national defense. more
capitalization,
plant and an asset, but if I have $100
Where we have taxation for the
more equipment.
in
the
bank and
it is used to
purpose of paying for,
or need
produce an anti-aircraft gun—
In that way, and that way alone,
higher taxation to pay for a large
we
can
bring to bear this great necessary though it might be—
heavy demand of a certain type
there is no asset backing my sav¬
of production we should have it strength which is not in manage¬
ment or labor alone, but is also ing on which I can later draw. It
because it is needed for national
in the utilization of our produc¬ is a military asset, and it makes
defense. In other words inflation
tion techniques. We had a differ¬ no difference if it is $100 or $100
is primarily a word which does
The idea
ent set of circumstances in 1939 billion which I have.
not explain the underlying situa¬
through

country

Boland, SafSin

expand our defense ef¬

Cannot Control Inflation

greater production, not only pub¬
lic but private, because production
is
certainly undertaken in our

BONDS

NEW YORK

now

are

control,

part of the government,
analysis of production, busi¬
and labor.
With all groups

working
within themselves
more
understanding,
we

output would be $500 billion.

which can be em¬
either in all-out war or

the situation

against national output, which is
now of $280 billion,
our national
fore

We
service

which we attained.

better information

the

enough

productive

full

the

we should be able to equal
production record of the five
years between 1939 and 1944, that
would mean, five years from now,
measured
in
a
constant
price

policy

ployed

MUNICIPAL

kinds

two

are

need

the

our

1920

the reach

fort, if

Production

vs.

the

achieve

our

Control

all-

ness

could

American econ¬
omy, our primary task is to help
set high sights.
Just as a starter
I emphasize, that in 1940 the task
seemed to many so far beyond

the next five years

over

know from

the fact that

underscore

must

strength

35% or
would

only

expanded

management,
That is

labor.

its

realize

lost.

have

sound.,

1950

from

direct war
to be done despite

45% in these five years we

have given which seem

reasons

1940

different

1950-51

and

in all parts of the

war

well

business

kind of

best pro¬

the

use

(it had

The

prepared.

between

situation

see^

World War II.

world)
we expanded our total production
strength by about 75% in these
five years and I think if produc¬

out

should

our

that fact in order to fight an

have to use a dif¬
policy and the public defi¬

nitely

finance,

effort

be, but now it is
easy to look back to what we, saw
in
1944.
We learned a lot, but
we
are
in
a
different situation
and

12 million

potential

hope we won't

now,

in the

And

techniques, in what it
its plants,

its

what we excel in—we

the fact that

duction men were withdrawn

not in 1944, and we

are

cause

much

industrial { ef¬

place, the industrial strength

the

despite

years,

about

be¬

situation,

the

misunderstand

ferent

agriculture and labor, as well as

live

fundamentally wrong, and

are

in¬

power

tween

experience be¬
1940 and 1944. Those peo¬

busi¬

system by the increased

dustry,

like we did in 1941 through
1944, when 12 million men went

ple

1939.

have

our

its

picture. Be¬
1939 and 1944, a period of
of

side

duction

to benefit from our
tween

unem¬

does with its manpower,

concerning the pro¬

of importance

deplete our reserves, and play
undertake for a long military machine. Thus, a rapid out our hand.
conversion must take place. There
In the second case, we can't do
period of time a very substantial
is no alternative to all-out war,
it because of the fact that in our
increase in national defense out¬
and nobody knows how long allfree and democratic country, we
lays (whether $30, or $40, or $50,
out war will be, but we presume
or $60
must in any program primarily
billion, I can't make any
it to be a limited number of years.
estimates on it now) our task may
obtain the understanding of the
In our plans for World War II we
be going to be even more pro¬
majority, and I think personally
longed and entail much greater figured three, four, or five years, one of the biggest problems fac¬
and it turned out to be four.
So
tests on the American economy,
ing us in the United -States is
we
have two reasons.
First, we
but in order to reach some eco¬
whether, in this twilight period,
must act fast in the matter, and
nomic point—the best, most fast,
we
will be able to have the un¬
second, we cannot afford to delay derstanding of the people to con¬
secure, productive and vigorous—
industrial and civilian conversion
we
have to analyze the distinc¬
tinue to support the carrying of
to back up the military.
In the this burden which I think is im¬
tion between that kind of defense
conversion we undertake in en¬
effort and all-out war.
Now, of
perative to our national security.
tering all-out war, we deplete our We have to maintain a balance
course, if despite our best efforts
strength at a rapid rate, we are between our
we are drawn into an all-out war,
military and indus¬
we
v/ould be in a different kind neglecting reserves for a long pull, trial and civilian strength much
and have to fight right away, and
of situation naturally, and noth¬
more carefully and in some cases
we take that risk.
And somebody
much better than in World War
ing I am saying now would have
any relevance to that.
I am not may ask the question about our II. I have always felt that few
total strength five or ten years
here to discuss our defense in case
people who have gone around the
of an all-out war,
I am here to from now. The answer is: I don't country would say that to be
know—that can't be arrived at.
discuss the mobilization program
strong we have to do what we
Five or ten years in the situation
we are now undertaking, trying to
did in 1944, and we would have
up

that

say

lies

Regarding World War II itself,
would like to give a few figures

Now, if we

build

ond

the

afford to draw too

economic

fort

Output

Possibilities of Expanded

for

manpower

at all.

that

for

made

stated.

have already

now.

were

ployed in 1939 gave us more man¬
power is erroneous.
All this must
be balanced with the fact that? the
armed forces took almost 12 mil¬
lion
men.
When
allowance is

reverse

can

now

three or four or five years, or

military manpower, and also of
the building up of the
civilian
labor force to supply the great

Between Defense
Ail-Out War

Distinction

conversion

total

immense

ation.

don't know when

next week—we hope it

forces, and we had

into the armed

handle the situ¬

to how we can

impor¬

very

production
the supreme test of our strength and control to place major reli¬
will come.
We hope not at all, ance on production and seconda¬
but do not know should it come in rily on control, for the reasons
reason

have

because -there

than

control and sec¬

on production, and had to
convert
rapidly.
Contrarywise,

careful about ondly

they have to be more
the balance for the
tant

major reliance on

which I mean

fiscal strength—by

Continued from page

think

can

out¬

produce them, and if our produc¬
tion
increases
fully,
more
and

though gradually, we can
the potential gap between
and them—that is our funda¬

more,

narrow

Wainwright, Ramsey & Lancaster
70 Pine Street

New York

Telephone WHitehall 4-3540

5, N. Y.

mental

strength.

A Change

W>andicf( press, Inc.
EtMitw 1923

of Control Policy

22 THAMES ST., NEW

YORK 6

REctor 2-3447
'

All

this should imply

economic

policy contrary to the policy in
World War II, when we placed

71 CLINTON ST.,

NEWARK, NJ.

MArket 3-4994

Volume
*

•i

172

Number 4968

f •'

The Commercial and Financial

defense

instead

paying

for

delusion and the only conse¬
quence
is in the long run you
a

have

tion

and

pay

carrying

you must pay

that

gram

through infla¬

charges,

should

arise

taxation,
War

II.

tion

through

done in World

was

And

whether

think

taxa¬

should

have

been

done

would

have

been

done,

would all be better

have
size

defense

and

much

important

keep pounding

that

the tax bills

before Congress, not any particu¬
lar

tax

that

bill.

the

that

frankly

say

and

prevailing
business people
ought to pay through

among

taxation,

large

sentiment

Let

But it is

as we go.

difficult to get agreement

tion is such
if

wait to

won't have

Congress, for taxa¬
complex matter, and
get in agreement, we
tax program.

important,

in my opinion, is to
ahead promptly on any tax
program in the range of what is

move

reasonable.

The

most.

aspect is the faster
will

move

inflation.

thrown

can

and
I

the

been
to

power

can't

though
controls.

of the government but of business.

and

Everyone

situation

incident

and

terms

The

not

is the

are

important,

controls

economy.

realizes

trols

that

the

justify

supply

Korean

the

There
with
One

going
of

which

long

extent

not

are

two

are

our

Dr.

the

the partial

shorter

';"r'

that

cit¬

every
or

gov¬

influence may be slow, tardy

and not

complete, in the long run
it is going
to be felt.
What is
going to happen is based on un¬
derstanding and knowledge, labor
and
the
people.
And
always
this point, business peo¬

ple are in an important position to
help shape job as well as price

have
a

responsibility

challenge to do

so.

First, in helping to forge forward

recently that acute shortages became

even

full

very

raw

the

consequence,

correct

facturers

emer¬

are

production

and

essential

inadequacy of

Indeed

material supplies.

raw

rials,

the

overshadowed

the

great

felt

concern

over

this

raw

has

widespraed

the

tries

most

and

concern,

the

indicated

government

its

rearmament

intentions

ation

raw

materials.

endeavoring

Washington.

industrialists

many

inclined

are

rearmament
*

between the Democratic

distribution

the

limited

coordinate

are

Western

European

require¬

also between London and

progress

In particular the European governments

are

anxious

States Government to moderate its stock¬

and would

tend

aggravate economic conditions in
to

dissem-*

discontent.

acute

large degree the solution of the problem lies in the hands

of the British and other

European governments.

They must realize

that

they cannot eat their cake

new

maintain existing levels of
output. This'would
mean a severe blow to the
export drive and to
rearmament.
At the same time the
resulting

Chancellor of the

as a

result of rearmament the British public will have to choose f'

between
t

producing

in the volume of goods available for
civilian consumption would accentuate the ris¬

some

keep it.

recent speech the

consuming less.

owing to lack of
demand

large degree,

In many lines it is impossible

materials.

raw

such

Therefore it is

lines should

Dr.

form of government intervention.

■;

Paul

Einzig

stance

strategic
raw materials
brought about mainly by American stockpiling pur¬
chases. Twelve months ago such
purchases were looked upon as
an unmitigated
blessing that would prevent the development of a
postwar slump. By the end of 1949 the wartime shortages had
problem

was

to find

beginning of the
a

excess

of supply

them.

Even

before

the

this state of affairs underwent

fundamental change.

Judging by the rising trend of commodity
prices, the surpluses had been absorbed and demand had exceeded
supply.

The main

duction in

all

of this has been the

industrial countries.

ered her prewar

Japan

cause

succeeded

making

good

rising trend of

Europe has

producing capacity.
in

-J.V.

Underwriters

than

GENERAL OBLIGATION

•

pro¬

Water

recov¬

Electric

In particular, Germany and

progress

industrial

output.

Sewer

Bridge

Housing

Investment Securities
Public

Utility

Industrial

Railroad

Street, New York 5

DOwling Green 9-2070
Teletype NY

Teletype BU 122
Wire

Between

Offices

oAllen

Company

Established. 1922

Niagara Street, Buffalo 2

Washington 8060

1-2827
Private

Municipal Department

Municipal

SCHOELLKOPF, HUTTON & POMEROY, INC.
Wall

«v

MUNICIPAL BONDS

MUNICIPAL REVENUE BONDS

Distributors

and

in many commodities, and the

solvent markets for

rearmament drive

Dealers in
.

30 Broad Street

curtailed I

of manufactures.

This situation is attributed in the first in¬
to the world-wide
scarcity of

Exchequer, Mr. Gaitskell, pointed out that!

inevitable that civilian

ing trend in the cost of living caused by the
high prices of raw materials which are grad¬
ually translating themselves into higher prices

and

however, this choice does not exist.
to produce more,

decline

The Office of European Economic
Cooper¬

Toll

coun¬

supplies

Europe, thereby improving the chances of Communists
inate

become

quarter.
It is now feared that
supplies of non-fer¬
rous
metals next year will be inadequate'to

piling purchases which, it is argued, would defeat their objectives
in existing circumstances.
It would tend to handicap European

felt over the inadequacy of
supplies.
subject information is pouring in from

way

curtailment of their capacity to carry

correct

ments, and discussions

every

given

con¬

important step in the right direction would be the

ensure

essential

mate¬

and

manu¬

But by far the gravest

possible effect

establishment of close cooperation

rec¬

repeated
deal had

British

out rearmament orders.

LONDON, Eng.—During the last few weeks Britain has be¬
suddenly very raw-material-conscious. The subject has gained

rising prices of

though

envisage the possibility of

come

been said about the

Even

grave

worried about the political

are

unemployment.

its

of this situation

there

viewing the prospects with

are

to persuade the United

considerable prominence in the
press, and it was raised
in Parliament.
While until recently a

any

risk

continuity of essential work,

materials.

occasions

con¬

restore the system of priorities if
necessary in order to ensure the

Says consumption, in spite of

development of unemployment

Socialist politicians who

The

distribution

means

material supplies to meet

raw

requirements in full.

result of the

material shortages in Great Britain

international

far

to maintain civilian

sequences of an increase of

increase in unemployment and

The aim in

This necessarily

however, that the endeavor

increased

decline

gency.

stockpiling.

high level.

orders should be met

materials.

raw

demand but through sheer lack of

emer¬

are

the American system will work in

partial

arms

deliberate government policies aiming at a curtailment of
civilian

raw

cutting civilian production.

It seems,

the

event

were

sumption in spite of rearmament will be defeated, not through

rearmament, will be defeated because of sheer lack of supplies.

On that

policy is made in the long
run
by the attitudes of the peo¬
ple, which in time are reflected
in
Congress.
And even though

emergency,

purchases

further increase of the output and not
by

increase in the demand for

saying the Ameri¬
work

possible by means of

means

right
to that

going to have for
long time, then you are admit¬
ting a grave liability. I do believe

sec¬

an aroused

Einzig lays serious
U. S. strategic

ness

Well

work

Material Shortages Endanger
British Rearmament

concern

made by a few in
is
erroneous—busi¬

—

policy and

gency

not until quite

was

deterioration of the

these and other countries is that

all

say

quan¬

by governments for

stockpiling

Whenever

that's

cannot

emergency,

economy.

The

drive.

con¬

detailed

anywhere else should

is
Washington

system

event

of dealing

sick

got.
say

wartime, I want to

can

cannot

ways

present

we've

anyone

person, you are

not

inflation

through control.

into

realize that the idea that business

system
hear
for

American

demand

aspect

for
war

certain,

seems

based

Although

for civilian goods is maintained at

that

forced

izen, whether in business

this

life fundamentally depends
and labor,
as
well
government.
That's the kind

increasing
,

the

States it is the natural result of
growing prosperity that demand

free

our

American way

our

business

demand
did

it,

Policy

policy

system, to believe that

hard and, on

seem

run.

ernment

and

event

strength

our

States absorbed

was

material position is largely due
to the fact that on both sides of the Atlantic
civilian consumption
is sought to be maintained at its
pre-rearmament level in spite of
the additional requirements due to
rearmament.
In Britain it is
the government's deliberate
policy to avoid any substantial reduc¬
tion in the standard of
living through rearmament. In the United

I have

started

through self-control. I am
still optimistic enough to believe,
to
have faith in the American

People's Attitudes Make Business

spend

because

before.

never

enterprise and

ond is

taking

are

successful and which cost

the

not

prices

sunk,

are
as

always felt

which has taken place.

the

know

the whole faster and

kind

tried

are

demand.

and wages, too, based

after

over

which

and which

the

did

labor

responsibility, business to the

ness,

un¬

expectancy, based on understand¬
able desire to capitalize
on
the
potential situation.
Any analyst

act exists,

when.

say

most

checks

are

for,

The

and

government, government to busi¬

Korean

indefensible,

but

money,

going

price and

the

increased

government

author¬

throwing the economy
long hard pull into direct

that

uncalled

are

necessary

production

now

the

ing this, it

people to¬
If everyone tries to shift

gether.

United

evident.

and

con¬

avoid

the

analyst
current

increases since

wage

ommends

whole

easy,

And

government

farm

the

course

know

not

the

far the most important
factor, other governments, including- Soviet
Russia, were also in the market. The extent of such purchases in¬
creased after the invasion of
Korea, especially as larger quantitties
came to be absorbed
by current rearmament needs. Notwithstand¬

business

sound

reduce

get value enough out
of general control, of which tax¬

business

problem

Foresees,

ation

degree

materials.

stockpiling.

self-control, and

which,

the

going to

able

get

our

brings

direct

prophecy if these

judgment I hope
be

cir¬

some

hand to go
control, along

such

would

from the

last

They have

but

with

not

with

policy

trols will be employed or to what

ized

along

boom

raw

Added to this demand

By PAUL EINZIG

cannot

degree.

detour,

they have readily

mon¬

dangerous road. Sec¬
of restricting
production is not only the problem

against

desperate
production controls.

war

the

must

move

trade

tities of

device which

any

ond,

range standpoint, this wili
be best, in that we would not have
face

and

use

cuitous and

long
to

control

people will

The

important

primarily

seems

etary

business community, the majority
of which'are
sensible, thoughtful

for

reasons

given, we must
along the road to fiscal and

any

tax bill before

the

which I have

business

the

now

alternative

contemplate, in any
talked
about,
the
safest,
most
productive,
least
costly—is to pay for the defense
program as we go along. Thus, it
is

enough

now

range

off, but if

burden

for the kind of economic produc¬
tion which will not force us into

but

for the defense pro¬

through wise financing

(2309)

•

you can avoid the cost of national

Chronicle

New York 4

(2310)

The Commercial and Financial Chronicle

Continued

Thomas M. Niles, 220 South State

page

date is

Street, Chicago 4, 111.

from

ation—Ralph W. Tatlock, 360 West
First Street, Dayton 2, Ohio.

Volume at Recoid
underwriter of each

new

bond

copy

issue

send

revenue

of the
prospectus covering the issue to
these supervisory banking author¬
a

ities—that is to those in the
in

which

bonds

believed

area

that

the

likely to be sold. Obvi¬
is to inform the
bank
examining
authorities
in
Washington and in the field of the
particulars of such issues.
are

ously, the

May

purpose

Interim Report of last
advised that we had been

our

requested

members

appoint

one

our

represent us on a
"Joint Committee on Fundamental

Considerations in Rates and Rate
Structures and Related Financing
for Water and Sewage Works."
The President

appointed Francis
Gallagher, Chairman of lour
Special Committtee on Revenue
P.

Bonds.
The Joint Committee had its in¬

ception at

meeting of The Amer¬

American

High

Waterworks

tion—D.

L. Erickson,
Lincoln, Neb.

Associa¬

City Engi¬

date

than five years
which it was

acquired by the taxpayer.

American Public Works Associ¬

Municipal Securities

date

the

tained

means

the amount

ascer¬

subtracting the inven¬
tory value of the closing inventory

of a taxable year from the sum of
(i)
the inventory value of the
Federation
of
Y.; E. Edelman, Special Bond
Sewage
Works
opening inventory for such year
Counsel, Reconstruction Finance Associations
George J.
and (ii) the cost of securities and
Corporation, 4433 Warren Street, Schroepfer, Professor, University
other property purchased during
N. W., Washington, D. C.; Harold
of Minnesota Minneapolis, Minn.
such year which would properly
S. Shefelmen, 1612 Northern Life
Investment Bankers Association
be included in the inventory of
Tower, Seattle 1, Washington; Jef¬ of America—Francis P.
Gallagher, the taxpayer if on hand at the
ferson B. Fordham, Dean School
Kidder, Peabody & Co., 17 Wall close of the taxable year.'
of
Law, Ohio State University,
Street, New York 5, N. Y.
"(b) Technical Amendments.—
Columbus,Ohio; Charles W. Smith,
Municipal Finance Officers As¬
Chief, Bureau of Accounts, Fi¬
"(1) Section 113 (b) (1) is here¬
sociation—E. P. Riehl, Deputy City
nance
&
Rates, Federal Power
by amended by adding at the end
Controller, Detroit, Mich.
thereof the following:
Commission, Washington, D. C.;
National Association of Railroad
Arnold Frye, Hawkins, Delafield
"'(I) in the case of any short& Utilities Commissioners—Frank
&
Wood, 67 Wall Street, New
term municipal bond (as defined
W.
Foster,
Electrical
York 5, N. Y.; William F. Tempest,
Engineer, in section 22 (o)), to the extent
Commerce
Commission, provided in section 22 (o) (1)
Counsel,
Conservation
Bureau, ^Illinois
Portland Cement Association, 33 Springfield, 111.
(B).'
West Grand Avenue, Chicago 10,
The
Committee
continued
its
"(2)
Section
125
is
hereby
111.; W. James Macintosh, Morgan, studies at a meeting of The Amer¬ amend by adding at the end
Lewis & Bockius, 2107 Fidelity- ican Bar Association held in Wash¬ thereof the following new sub¬
Philadelphia Trust Bldg., Phila¬ ington, D. C., during September, section:
:
,
delphia 9, Pa.; and Stephen B. ;; 1950, and will probably file; its
"'(e) Dealers in Tax-Exempt
report during the year 1951.
Robinson, 458 South Spring Street,
Securities.—For special rules ap¬
Los Angeles 13, Calif.
plicable, in the case of dealers in
neer,

each item, compute the amortized
book value as of Jan. 1, 1950, re¬

compute it

"'(B) The term 'cost of securi¬
ties sold'

Thursday, December 14, 1950

...

—

as of the date of sale,
figure the amount of profit

then

loss involved.

"Proper preparation for the re¬
quirements of any such proposed
amendment

necessitates

the

amortization

tables,

for

each

lot

law

present

setting
in

advance,

bonds

af¬

•

Revenue

American Society of Civil Engi¬
neers—Samuel A. Greeley (Chair¬

Act

1950

securities,

In the latter part of

with

respect

pre¬

fected.

attempt to unscramble

these

past transactions, figuring
backwards, would impose, in our
case, about two months' work
and perhaps the employment of
own

outside accountants.

The

problem

would be magnified many times in
the case of larger dealers.
;

"On page 50 of Mr. Doughton's
report from the Committee on
Ways and Means accompanying
H.R. 8920, it is stated that the Bill
is

intended to close

loopholes

any so-called
without unduly

complicating the accounting
cedures of dealers.'

pro¬

It is apparent,

therefore, that it is not the intent
of the Bill

to burden the deal¬

However, the retroactive
vision does just that.

ers.

urge

how

that

Section

strongly

the

202*

effective

made

pro¬

know

date

January

attributable
September, mium
to
certain 1951, which will allow proper time
iCongress enacted and the Presi¬ wholly
tax-exempt securities, see for the accounting changes neces¬
Ohio. Participating organizations man, 220 South State Street, Chi¬
dent signed (Sept. 23) the Reve¬
section 22 (o).'
on
the Committee and represen¬ cago 4, 111.; E. H. Aldrich, Amer¬
sary to provide for the orderly
nue
Act of 1950.
Section 203 of
ican Water
Works Service Co.,
"(c)
Effective
Date.—The amortization of the bonds covered
tatives of these organizations are:
this Act prescribes the treatment
121 South Broad
Street, Philadel¬
amendments made by this section by this section." (*Later changed
of bond premium in the case of
American Bar Association-Mu¬ phia
7, Pa.; George P. Steinmetz,
shall
be
applicable
to
taxable to Section 203.)
dealers in tax-exempt securities.
nicipal Law Section—John D. Mc- Chief Engineer,
Public
Service
Walter
Craigie
also
years ending after June 30, 1950,
strongly
Such premium to be
Callr (Chairman), McCall, Park- Commission of
amortized, but in the case of a taxable
recommended in his testimony that
Wisconsin, State
year
without deduction for
hurst & Crowe, 1501 Mercantile Office
loss, in the
Bldg.; Madison, Wis.; Cla¬
the holding period which is set as
beginning before and ending after
case of all
Securities Building, Dallas, Texas; rence J.
tax-exempt bonds held such date the
Derrick, Commissioner,
amendments shall thirty days in the bill be made
George F. Baer Appel, Townsend, Board of Public Works, City of more than 30 days which have a
apply only with respect to obli¬ sixty days. As will be noted from
Elliott & Munson, Provident Trust Los
Angeles,
2021
Kenilworth maturity or call date of five years gations
acquired after such date." the foregoing quotation of the sec¬
Building, Philadelphia 3, Pa.; H. E. Avenue, Los Angeles 26, Calif.; or less from the date of acquisi¬
"It
will
be
recalled
that
the tion, Congress did not make any
tion.
For reference purposes the
Russell^ Hawkins, Delafield & Francis S. Friel, 121 South Broad
measure
as
first
passed by the change in this feature. It still
full text of the section is set forth
Wood, 67 Wall Street, New York 5, Street, Philadelphia 7, Pa.; and
House provided that these amend¬ remains thirty days after the date
below:
of acquisition.
ments apply to taxable years be¬
"(a) Amendment of Section 22.
The Senate Finance Committee
ginning after Dec. 31, 1949. Vari¬
—Section 22 is hereby amended
by ous members of our industry ac¬ amended the section by adding the
adding at the end thereof the fol¬
cordingly directed to the attention last paragraph thereof as shown
lowing subsection:
of the members of the Senate Fi¬ above: (c) Effective date.
In its
,."'(o) Dealers in Tax-Exempt nance Committee, the severe hard¬ report on the measure (S. Report

ican Bar Association in

Cleveland,

JOSEPH McMANUS & CO.

•

Securities.—

ship that would be imposed by the

'(1) Adjustment for Bond
Members
New York Stock

New York Curb

Midwest Stock

mium.—In
income

Exchange

term

Exchange

NEW YORK 6

year

municipal bond

paragraph

nary

BROADWAY

computing the gross
taxpayer who holds

during the taxable

for sale

Pre¬

(2)

(as defined

(A))

primarily

to customers in

the ordi¬

of his trade

course

ness—

short-

;•

•

Telephone

W. H. MORTON & CO.
INCORPORATED

15 Broad

basis

any

other

as a
deduction
such year pursuant to section

before

the

Committee

follows:

effective

was

the

use

would

costly

given of

was

the

Therefore,

the
so

mium

all

after

securities

July

purchased

impose a severe and, I am
quite sure, unintended hardship
upon hundreds of dealers—large

case

30, 1950, such amortization will be

and

for

would

able

try.

125

munici¬

section

retroactive

small—throughout the
In the

coun¬

would

of my own firm,

case

have

review

1950,

over

back

and ascertain the purchase date of

is computed without the

inventories,

torieg

valued

use

1950,

of securities held

beginning

years

after

that

under

con¬

While

the

bill

amendment

the

was

which

proposed
would

BANK STOCKS

paragraph)
of
the
short-term
municipal bond shall be reduced
by the amount of the adjustment
that would be required under sec¬
tion 113 (b) (1) (H) if the defini¬

UNITED
AND

STATES GOVERNMENT

MUNICIPAL SECURITIES

"'(2) Definitions.—For the
poses

of paragraph

"'(A)

interest
cludable

STREET, NEW YORK

PUBLIC UTILITIES

The

pur¬

(1)—

term

'short-term

municipal bond' means any obli¬
gation issued by a government or
political subdivision thereof if the

BARTOW LEEDS CO.
57 WILLIAM

INSURANCE STOCKS

tion in section 125
(d) of the term
'bond' did not exclude such shortterm municipal bond.

such

such obligation is
from gross income;

term

does

not

include

GEYER & CO.

ex¬

INCORPORATED

but

63 WALL STREET, NEW YORK 5, N. Y.

such

Whitehall 3-7760

Teletype ny 1-2397

obligation if (i) it is sold or
otherwise disposed of by the tax¬
payer
within
thirty days after
the date of its
or

acquisition by him,
(ii) its earliest maturity or call

Private

BOSTON

CHICAGO/

wires

connecting branch offices in

CLEVELAND

LOS ANGELES

Senate, Senator

Oregon

such year, the adjusted basis
(com¬
puted without regard to this sub¬

June

required only with respect to tax¬
date."

cost,
and
the
short-term municipal bond is sold
or
otherwise disposed of during

STATE AND MUNICIPAL BONDS

but

use

of inven-

re¬

pre¬

the

this

'(B) if the gross income of the,,
taxpayer from such trade or busi¬
of

Underwriters—Distributors

House

committee

your

quire the amortization of the

Morse

ness

date

change in the law

enactment

sideration

short-term

effective

tions which occurred before notice

place since Jan.

such

this

require
extensive
and
reexamination of transac¬

500 transactions which have taken

pal bond;

years

beginning after Dec. 31, 1949. Wit¬
who appeared at your com¬
mittee's hearings pointed out that

bill.

"Secondly, to make the provi¬
sions

provision

taxable

nesses

exclude

2-5620

for

has amended the bill

cost, the cost of securities sold (as
defined in paragraph (2)
.(B)) dur¬
ing such year shall be reduced
by an amount equal to the amortizable bond premium that would
disallowed

proposal

Finance

"Retroactive Feature Hardship"

than

concerning the effective
the

the Committee stated:

"In the House bill this

(a) (2) if the definition in section
125 (d) of the term 'bond' did not

Street, New York 5, N. Y.
HAnover

Chairman, Walter Craigie,

No. 2375)

to be unduly burdensome from
time to time in the normal opera¬
tions of the business.

Senate

computed by the use of
inventories and his inventories are
valued

bill

July 11, last

ness

the

date

'(A) if the gross income of the
taxpayer from such trade or busi¬

Teletype
NY 1-1610

testified

'•

DIgby 4-3122

feature

the form originally passed by the
House; also the fact that the 30
days' holding period is so short

Our

busi¬

retroactive

SAN FRANCISCO

subject

Volume

172

Number 4968

The Commercial and

the interest of state and
municipal
securities issued
r

1951,

and

the

Federal

interest

United

income

state

posal
•

income

was

which

after

and

Jan.

taxes.

will

Morse

had

duced in the Senate in

ment

September,

in
-

which

reported

Annual Report last DecemThe Senate rejected the
pro¬

the

Orlando

Clarke;

Horace

Congressional

Act

April

2246,

1950.

20.

enact¬

annual award will be made

the

Housing

became

law

authorizes

and

January

laculties

under

also

vious advices that the
form

both

House

the

contained

limit

our

the

funds

Government

appeared

have

would

August

recommendations
your

tion

tising

this

will

enactment

prove

our

Ohio

The

—

Company,

that

ihe

the

ill.

contest

Co.,

Inc.,-

Roger W. Babson

will

did

continued.

paid."

recalled

that

order

and

arouse

develop

methods

collaboration

with

tem

MIAMI, Fla.

re¬

Appended
brief

summon

doctor,v

has

happened

effective

committee
,

Shoreland

home-spun qualities of character,
initiative, drive, and resourceful¬
ness' that

great?

made

this

With State Bond &

country so
notion that

childish

The

Mtg,

(Special to The Financial Chronicle)

will

friend

master

minutes

replied,

but why

pay,

doctor

when

socialized

that

calls

for him
are

few

re¬

Lee Higginson Corporation

"Of

you

arrived
sys¬

medicine,

that

already seen more than his
quota of patients for the day, and

State'

the

references

report
certain

tive

enacted

the

meant

INVESTMENT SECURITIES

additional marks in

than

book.

make

He,

therefore,

would

calls unless he

Two More

are

was

and

Dealers

Russian

the

Only decisions and legisla¬
enactments

considered

general interest to the munici,The award

Co-»
on

New
behalf

Goldsmith,

was

York
of
a

made

City,

the

Ira

and
by

was

firm

Hallpl &

accepted
Bertram M.

partner.

find

the director of personnel
the largest automobile

cently,
of

Britain

one

manufacturing

Institute.

cussing

pros

NEW YORK

BOSTON

•

CHICAGO

•

visited

concerns

Babson

Underwriters, Distributors

Examples

We don't have to go to

state

during

dis¬

were

of labor
individual
enlightened person and
to
many
of
the
good
and

cons

unions. This particular
was

pointed

things that the labor unions have
done for both the worker and the

automotive

(JrrLeoican

GyijuiAxition

industry. But on one
point he really exploded. Said he,
"I can never forgive any union
for killing the initiative of the
man who wants to do eight hours'
work

than

six

UNDERWRITERS

DEALERS

better

Listed and Unlisted Securities

worker."

another

This

neighbor¬
ing school teacher had an un¬
fortunate
experience.
He
was
mowing his lawn, and his little
past

girl of nine

Underwriters and Distributors

the

sumrqer,

asked
are

INVESTMENT SECURITIES

you

plied

children

because

daddy

she

NEW YORK

CHICAGO

liked

she
a

"Sucker!

lot of fun,

What

Dean Witter

help

wasn't

NEW
SAN

YORK

STOCK

(lmui a sinoitim

turbed

the

father

about the

parents

was

HONOLULU

dope

per¬

general attitude
and

children

EXCHANGE

NEW YORK

FRANCISCO STOCK EXCHANGE

are!" The sequel to the story

that

Co.

MEMBERS

and other

you

re¬

playmates chastised her with

sharp,

■

the

raking

that

getting anything but
her

she

When

was

and

Direct Private Wires

and

girl, "How much

getting?"
she

Complete Distribution Facilities

the

along

came

little

that

grass

her

the

helping him rake

was

Other

grass.

neighborhood

NEW
ULM, Minn.—Omar A.
take care of us
making any effort Williams has joined the staff of

examples of loss of initiative. Re¬

year.

three judges chosen by the "Bond

McKinnon,

Building,

legislation

greater interest

to9 those

Robert E. New¬

The

satellites

son

What

—

affiliated with Thom¬

now

the

court decisions rendered and state

advertising municipal

selected

man

paid in advance! Here is regimen¬

Monthly winners in this contest
..

Thomson-McKinnon.

he had

many

the

Committee

The
I'll

The

Each contestant may

Legislation

securities.

are

(Special to The Financial Chronicle)

master

pointed out that they had

advertisements &s he wishes.

our

tend to

worthy

ask?"

beep published in the "Bond
or any other publication.
may be prepared especially for

submit for consideration

Interim

but

course

fully

Committee

Joins

The Great Issue of Our Times

turned to say excitedly, "The doc¬
tor says he won't come unless he's

advertisement may or may not

this contest.

lating to advertising securities, is
intended to

requested
to

currently studying sections of the
blue
sky laws with a view to

program

Education

tion."

particular neighborhood that

recommending
amendments, tation in medicine. Even the
pro¬
where needed, that would clarify
Municipal dealers are familiar
fessional man, long an example of
and improve the provisions ex-'
with the advertising contest which
initiative and resourcefulness, is
the "Bond Buyer" is conducting. erupting state and municipal se¬
deprived of his heritage.
curities from registration.
Its purpose, in active support of
part

are

support by virtue of political ac¬

self-

he moved away,

re-

station

Advertising Municipal Securities

that

men

without our
ourselves is fantastic economics. State Bond & Mortgage Co., 26%
Individual initiative is the founda- North Minnesota Street. »
" ^

cally

qualify for entry in this contest

Report of last May.

Public

all

worthy

railroad

the advertisement.

Buyer"

in¬

way

reported

that

say

are

of Austria with

have

that

case.

Russian 'Zone

will

sec¬

the

men

by virtue of their

his wife criti-

hoped

all

...

individual efforts

necessary

self-reliance,

that

respect

station

in¬

tended to relieve the situation.

someone

Michigan

We understand that this adver¬

Through

industry the
in

was

11 y.

station

compe¬

by members of

Committee

First

September- -Blyth

finally amended in Con¬

was

ference

our

lieving

^himself

New York.

committee and various other

members of

way

found

Columbus.

cre¬

unnecessarily

creased the Federal debt.

owe

their

has been forgotten. Instead of be¬

the social climate

initiative,

win

immediately

industry in the
security financing but it

friend

of my as¬

sociates

reason¬

tition with private

field

of the world suggest what happens
to initiative in the "Welfare State."

Trust

Corp., Detroit. The name of Mil¬
ler, Kenower & Co., Detroit (now'
Kenower, MacArthur & Co.) also

Had the section in question been
enacted
into law in its original
ated Federal

parts

travelling
Europe

July—The

rev¬

only

different

June—The Ohio Company, Co¬
lumbus.

conditions for the character of the

form it would have not

Northern

from

c e n

by educational institutions

being made and for
able periods.

The

—

stories

and

May- -Shields & Company, New
York.

bonds at reasonable rates and

loan

Three
sources

one

ob¬

are

from private sources on their
enue

Ira
Haupt & Co.,
(received the award).

—

York

situations

year

development of individual

April—The Ohio Company, Co¬
lumbus.

credit for the pur¬

each

for

advertise¬

Senate

spite the fact that millions of dol¬
of

public officers who will give

theory that men

themselves

betterment and self-achievement.

March

pose were not otherwise available

tained

name

Company, Chicago.

from private sources at fair going
rates and conditions. This was de-.

lars

the

said: "The

By ROGER W. BABSON

Trust

The

Morley, recently writing in
Business," stated our

problem in plain words when he

Mr. Babson gives examples of loss of initiative in the so-called
"Welfare State," and says great issue of our times is to find

Company, Chicago,

appeared

New

whatever

such "loans
or

Wallace;
Harry
White; Merrill Morong.

ment.

pre¬

passed

and

nothing

where funds

Darnall

Commer;.

cer¬

measure

originally

Marine

Buffalo.

of The Illinois

February

It will be recalled from

The

—

Company of

Federal

tain conditions.

the

Mills;

Initiative in Welfare State

were:

From ads entered in:

loans to assist educational institu¬
tions to provide housing for their
students

David F. Lawrence;
Maroney; Andrew S.
William H.
Morton;

Franklin

"Nation's

the "Bond Buyer" $100 in cash.
Monthly winners from which the

this ,year of special interest
municipal dealers was Section

(a)

The greatest issue before the
American people today is to find
public officers who will give us
the social climate necessary for
the development of individual
initiative, self-reliance, self-bet¬
terment,
and
self-achievement.
Felix

ment

401

Gallager;

William C. Jackson, Jr.;
M. Kalloch; John F.

Kelsey;

Baxter;

Elmus

Brewer; Alan K.
Woodward Burgert;
Clarke; " John
W.

Hagood

Hardwick; W. Paul

Harper; John G. Heimerdinger;

Browne;

leader¬

do and give as little as possible
will ultimately bring on depression and unemployment,

Herbert

writer of the ad will receive from

National Housing Act

Jr.;

Arnold; Robert H.
F.

tion stone of security, health and
prosperity. The present attitude to

C. Cheever

Chairman;

Dana

Cecil R. Cummings; Newman
L. Dunne; W. Neal Fulkerson,

Committee:

Craigie,

Atkinson;

advertise¬

committee

Wilson

The

ship. It will be in the form- of a
plaque suitably
inscribed.
The

posed amendment.

Another

for

the

inality, effectiveness and

our

ber.

which

Securities

Walter

judges considers the best for orig¬

1949, and

will

award

intro-

Municipal

made' by
the
"Bond
The- announcement will

be made at this convention.*

pro¬

in keeping with the bill

Senator

Buyer."

of special significance
included.

are

Respectfully submitted,

January to September in¬
clusive, the first * annual award

1951,

This

pal trade

locally

ners,

territories,

possessions and their subdivisions,
•issued

(2311)

mitted each month by contestants.
From among these monthly win¬

taxes

securities

States, its

Chronicle

Buyer" from advertisements sub¬

and after Jan.

Financial

CURB EXCHANGE

LOS ANGELES

STOCK

STOCK EXCHANGE

EXCHANGE

leading Security and Commodity Exchanges

SAN FRANCISCO
SEATTLE

LOS

ANGELES
PORTLAND

NEW

YORK

HONOLULU

BOSTON

The Commercial and Financial Chronicle

(2312)

Continued

from

mercial

page

loans

ligations

Canada's Progress and Prosperity
there will yet

remain

estimated

surplus of $15 million, the budget

points
basis

that

out

full year's

defense and related

our

ex¬

penditures, as at present envis¬
aged, will probably require about
$1,000 million. Assuming no sig¬
nificant change in other govern¬
mental outlays this would suggest
a
total budget of approximately
$3,000 million for the year ending
March 31,

Against this, the
yield from the revised tax

annual

1952.

structure

estimated

suggesting

thus

million,

$2,800

that

Canada is to continue with

"pay-

as-you-go" policy, further in¬
creases

sidered

taxation

must

possibility

con¬

the

when

than

$8,569,000,000, a higher
than had ever, hitherto,

figure
been

reached.

mand

000, savings deposits at $4,581,000,000 deposits on behalf of the
Government of Canada $132,000,000

deposits

that

over

for

assets

the

dented high

level of business ac¬

tivity

which

made

reference

flection in

our

According

chartered

including
at

Sept.

should

already
find

re¬

banking statistics.
the return of the

banks

Finance,

have

the

000,000,
1946.

interbank balances,

amounted

30,

1950,

decline in

banks

than

without

Canadian

securities

ral resources.

tion

change

this

date

three

been

lars.

United

which

factors

have

payment

bond

open market

Bank of Canada

operations
in selling

(3) The freeing of the Canadian

short

tion

interest in Government Bonds by
the chartered banks. During this

Governments,
and
and municipal authorities,
had increased by more than 50%
school

and at the same date had reached

than $2,796,000,000.

high level of bank deposits,

together with the increase in

com¬

bonds.

was

period
on

there

their

was

cash

Government

some

pressure

due

reserves

withdrawals

de¬

posits and generally speaking the
banks

either

were

sellers of

inactive

bonds in moderate vol¬

further factor

market

was

which

activity

this

the imminence of

af¬

large
refunding operation,
and
large institutional investors
adopted a "wait and see" attitude.

C°

LIMITED

in that the

mar¬

medium

term

DEALERS

year

and

eighteen-year

bonds both being priced
par.

This

was

long-term financing since
Victory Loan which was

1945

war.

while

The

Canada

was

issue

was

new

unqualified success, both ma¬
turities
being heavily oversub¬
scribed, and within a short period
an

Government, Municipal, Corporation,

Fabriques,

of time the
a

Religious Institutions.

premium
The

bonds
over

success

coupled with

NOTRE DAME STREET, WEST

the

St.

Hyacintlit
Paris

Shawlnlgan

anticipated for the balance of this

writers

In September the Canadian dol¬
lar was freed, and this action was

their

immediately reflected in the
Government

for

ket

mar¬

bonds.

The

heavy purchasing by United States
that

investors

had

been

evi¬

dence for some time became more

normal.

While

there

was

some

selling from the United States it
was
not heavy, and the market
quite

seems

confident

the

amounts

bought

that

large

bonds

originally
semi-speculative

were

trading at
prices.

the issue
the

a new

new

issue

instrument for

This

did

tion

been

the past, where

the rate for

lar

has

not

that

the

change

the Canadian dol¬

bring in the liquida¬
had

been

anticipated,

the

was

not

were

liabilities

rate

the

tendency in the Govern¬

with continued

ward

short

and

While
been

medium
official

pressure

term

being $148,942,734 to Oct. 30,
as compared with $154,967,1949.
The steady growth
of Canadian municipalities
cou¬
pled with pent-up demand during
1950,

for

284

the

basic

for

war

ices

and

re¬

to had

ening

short-term

carrying

2%%

in¬

rate, stimulated activity and

counter-inflationary measure.
The open market operations re¬
the

effect

of hard¬

interest

rates

new

the

for

the

level

considerable
money

latter

beginning
of

the

market

part

Co.,

financing by the municipali¬

new

Stock Markets

The

markets

have followed

eral

the

Canadian

American

QUEBEC

Plateau

SIIERBROOKE

Stocks

significant

remained

happenings.

their i949

9501

TROIS-RIVIERES

ST. JOHNS, P. Q.

Underwriters and Distributors
•

°f

Canadian Security Issues

Savard

Greenshields & Co
Members Montreal Stock Exchange
The Toronto Stock Exchange
Montreal Curb Market

Hart

Members of
The Montreal Stock

Exchange

The Montreal Curb Market

507 Place

d'Armes, Montreal

STOCK BROKERS
276 St. James Street
W., Montreal

QUEBEC

SHERBROOKE

—

Plateau

TROIS-RIVIERES

GENEVA, SWITZERLAND

9501

ST. JOHNS, P. Q.

Ottawa

Quebec

around

highs in relatively light
trading.
Earnings
of Canadian
companies for the first quarter

inc.

Greenshields & Co Inc

gen¬

1950. In

the first quarter of the year there
were

INVESTMENT DEALERS
—•

the pattern of

market

Association of Canada

St. James Street W., Montreal

mu¬

ties.

Members of The Investment Dealers

276

year

generally and
heavy volume of

Falls

for

bonds

the

Brussels

Savard, Hodgson

raised

purpose.

nicipal bonds has declined slightly
due in part to lower levels for

oil

higher interest rates

ferred

bonds

Since

schools.

been

the

made, it would appear that
see

plus

sitated heavy expenditures of cap¬
ital for new and improved serv¬

has

the Government would not be

luctant to

facilities

postwar housing, has neces¬

new

issues.

statement

total

change in the dollar

ment bond market has been down¬

undo

The volume of new financing by
municipalities has been heavy, the

Since

able

immediately

in most instances.

case

Government

but the threat is still there.

as a

terest

Rivieres

No
are

year.

steadily higher.

ada
Trots

re¬

In practically all cases of¬
ferings of new Provincial issues
were
favorably received by the
the United States for longer public. The very few exceptions
maturities was so strong that were v/here the bonds were slight¬
market
for
them
moved ly
overpriced
and
the under¬

investment, the new long-term
bonds being the only internal Can¬

urgently

was

case

still

School Commissions, Parishes and

develop¬

power

which

has

issued in

of QUEBEC

any

quired for industrial needs.
heavy Provincial borrowings

investments.

the first

Specialists in Securities Originating in the

Ottawa

hydro-electric
ment,

this

than

However, of
$110,000,000 was for

portion of the

the ninth

amount

basis, may be retained as sound,
long-term relatively high yielding

slight discounts off

and

$160,000,000

Province.

In
mid-May the terms of a
$745,000,000 Refunding Loan were
announced
as
being four-and-a

2%%

Quebec

ma¬

unusual situa¬

and

short

term

which
one

half

L. G. BEAUBIEN

hold

may

Consequently,

medium

and

prevailing

Provincial

MONTREAL

proportion

that

we saw an

for

term

was
considerably lighter
during 1949. This inactivity
due in part to the lack of

Government

221

this

from

same

time

investments

ket

fected

Province

year,

amount

other

than

The

market

open

the

limited

Bonds

During the earlier part of the maturities was selling down while
year,
trading
in
Government what had become a heavy demand

ume.

UNDERWRITERS

Province of Ontario has borrowed

comnirmced

operation of selling bonds; Under

ing and

Govern¬

is $374,322,000, as compared
$455,417,000 for 194.9.
The

with

its charter the Bank of Canada is

domestic bonds.
dollar.

Provincial issues, in¬

year

turities bore the brunt of the sell¬

new

country had to be financed
and to this end the Bank of Can¬

received in payment for Canadian

Government

The

cluding guarantees, to Oct. 30 this

that

in¬

since

bonds.

total of

long-term

Canada

ernment

the

small decline in the

total of

exported

fol¬

of that for Gov¬

received

purchase of United States dollars

obligations, at $3,610,000,000,
a

bonds

lowed the pattern

ada

market.

Refunding Loan.

(2) The
of the

for

Bonds has generally

ernment

purchase

dollars

States

The market for Provincial Gov¬

anticipa¬

the

However,

have

chronological order they are:
(1) The 1950 Government
Canada

there

year

strongly influenced the Canadian
Government

the foreign
exchange rate for Canadian dol¬

Security Markets
To

government bonds to finance the

17%

Provincial

and

expanding

public funds into the de¬

velopment of industry and natu¬

While the holdings of char¬
banks

retarding

flow of

represents

been able, since the war,
the cost of government

meet

was

maturities

$9,161,-

exceeded

which

indicative that Can¬

are

ada has

heavy switching of and in addition to this the rates
institutions in a on six-months Deposit Certificates
and Treasury notes were raised
rising market.
In June and July this activity from
3A to 7/s of 1%.
At the
and strength was further stimu¬ same
time, the rate for threemonth Treasury Bills rose from
lated
by the fact that United
States investors began to purchase 0.513% to 0.62%.
there

four-year period, commercial and
other loans, excluding those to

deposits,

previous month
an all-time high

chartered

date

crease

Minister

bank

total

the

same

ment

unprece¬

The

deposits in this category. Total

shows

that the

established

and

Canada

Banking

$173,000,000.

were

figure for savings deposits repre¬
sented an increase of $38 million

spring.

natural

Government

Provincial

and

tered

this

total, de¬
deposits stood at $2,708,000,-

regular budget comes down in the

the

and

bank holdings of government ob¬

Thursday, December 14, 1950

...

Sberbrooke

Toronto

Volume 172

Number 4968

The Commercial and Financial Chronicle

(2313)
were
higher
than
anticipated.
Prospects for the balance of trie

indicated

year

these

that

levels

Stock

has

Exchanges in the past

been

earnings would be as good or
improved. These conditions and a

running

quiet international

million

"underlying factors for
in

stock

prices and

volume. As

the

was

the

scene were

up-turn

expanded

for

about

This break continued
weeks

forces

have

resumed

their

continued

sult

1950

mar¬

the

was

tion

the

ending

the

tionship
and

as a re¬

defense

the

fixed

United

In recent weeks there has
marked

the

degree of
markets

that

the

exchange rela¬
the

around

dollar

The

result

than

too

was
was

better

had

the

Ca¬

that

and

was

currency

direction, there
telling to what extremes
ony

one

could

process

was

that could

continue.

was

but

necessary,

question

Ob¬

whether

the partial return to parity would

stop

the

inflow,

whether

parity

step would be in the bast interests

even

investment

realized

cheap.

of Canada

and

her relations with

the rest of the world and particu¬

larly the United States.

week.

Throughout the year the stocks
of gold producing companies have
counter
to
this
generally
higher trend. The Toronto Stock
Exchange Index of 20 gold slocks
has dropped from 105.30 to their
run

level

current

The deci¬

erously characterized

courageous,"

nothing but commendation

her

decision to break out of the

ada.
During the months of June,
July, August and September, 1950,
our gold and United States dollar

month

September.

this

United

capital

States

evidence

from the

there is

but

that

Practically

came

there

companies

en¬

gaged in oil exploration in West¬
Canada

stantial

have

recorded

advances in

sub¬

the

past two
or three years.
In recent months,
however, these advances have with
some
exceptions leveled off.
I

from

December,
Korea
82.10

and

64.13

the

end

the

talk

United

vious

States

capital

this

years,

retain

tions

the

might

pre¬

have

find

seemed

Jan.

still

been

has

our way,

restric¬

income,

they

assumed the un¬
been in active demand throughout happy role of involuntary borrow¬
the year. These stocks have been ing on our part. Further, the in¬
popular in

very

result of
ficult

markets

our

try in the 1930's.
-

The

ume

expansion

from the dif¬

recovery

experiences

the

indus¬

;

trading

vol¬

the Montreal and Toronto

;

flow of funds

was

effected through

remain*

announced

that

next.

part

tourist

travel

that

greatly

were

elimination

the

pediment

further

his¬

accelerated.

the Prairie Provinces and particu¬

drilling

tention..

Since

the focus of at¬

the Prairie

already

has

was

1949

another

which

About

spent

and

and Redwater. Several other areas,

100

prove

still

confidently expect to
importance, are
under
investigation
and
we

major

exploration

estimated

has

150

million

will

by the end of 1950.
just been announced

Continued

page

CANADA ?

on
You'll find

sis

monthly Business Review

our

help. It brings

great

Canada's

detailed
mercial

surveys

conditions.

larly, write
U.

you

developments,

industrial

and

com¬

To receive

this

regu¬

any

branches,

clear analy¬

economic

our

Canadian

Head

our

Office

Montreal.

Bank

lib¬

this

rap

UNITED

STATES OFFICES:

New York, (><1 Wall St.
San

Resources

Montreal

Canada's First Bank—Coast-to-Coast

IQt MtlMOMIM

over

$2,000,000,000

Chicago, 27 S. La Salle St.

Francisco, 333 California

St.

than 550 branches spanning Canada

«— more

im¬

Collier Norris

Quinlan

MEMBERS

I think that there is every
reason
to
expect
that
United

MONTREAL

tinue

would

come

that

longer

the

EXCHANGE
MARKET

the

dollar

the

movement.
time. and

economic

CURB

bet, will tend

that

seem

Canadian

a one way

moderate

logic

to Canada, but

STOCK

MONTREAL

States investment funds will con¬

forces

are

It
the
on

Quinlan

MEMBERS
The Investment

Dealers

Bankers

Association

Montreal

rapid development of the oil lands of Alberta has drawn atten¬

320 Bay Street

HArbour 2201

possibilities inherent in the securities of companies operating

Toronto

507 Place d'Armes

of Canada

of America

WAverley 2984

in this field.

our
on

Canadian affiliation
Canadian

oil

we are

securities

and

position to give pertinent

quote

and

trade

such

securities in American funds.

y^siAitisHto imx

Canadian Securities
Underwriters and Distributors pf

W. C. PITFIELD & CO., INC.
Phone:

30 Broad

HAnover 2-9251

Street

Government, Municipal,
Public

Utility and Industrial Issues

Teletype:

New York 4

NY 1-1979

Wire connections:
Affiliated

W. C. PITFIELD &

COMPANY, LIMITED

Moncton

Saint John

Edmonton

Toronto

New York

Royal Securities Corporation
Limited
244 St. James Street
>

Calgary

Montreal

With

MONTREAL
Halifax

Ottawa

Cornwall

Vancouver

that

have

Keeping up-to-date

Investment

Through

138

million

been spent

CANADIAN OIL SECURITIES

information

been

are

Provinces and

rigs.

dollars

1947
two
major
developed, Leduc

fields have been

found at

the

currently
117 geophysical parties
operating

Limited

tion to the

then

high level of exploration has beeit

Collier Norris

The

Since

Toronto

London, England

Winnipeg
<

Toronto

Calgary

West

Montreal

1, Canada

Telephone HArbour 3121
Halifax

Saint John

Edmonton

Quebec

Vancouver

dry holes

was

ence,

vestment

pro¬

Leduc.

example
spent

completely
free
movement of capital may come in

fact

equipment, which has been

111

larly Alberta

are

for

had

estimated that there

re¬

eralized to provide for reasonable

and

economic

drilled

in Alberta before oil

the

one

Oil

that

and

Exploration is going on in
several widely separate areas but

United States dollars for Canadian

purchase of Canadian securi¬
already outstanding on the
market rather than by direct in¬
plant

sub¬

tory.

the

pattern, the Canadian
strictions on the availability

ties

Canadian

our

stated

virtually be eliminated

same

the

oil

is regarded by

1947

Canadians

many

milestones

a
capital* nature,
not the not too distant future.
On the matter of capital influ¬
by trading or received as

earned

stantial quantities in the Province

of Alberta in

were

Shares of companies engaged in
the pulp and paper industry have

discovery

im¬

States

welcome

has

million

its

difficulties in 1947,

our

these will

United

which

but

in feeling

emergency

against

ports,

dollar problem and the useful role

at the same time, it

course,

legacy of

Canada's

dollar

determined by day-

necessary

ample-

Canadian
inflationary pressures
1949, to 90.16 before and complicated our problem of
is
currently at the dealing with them. Since the funds

level.

The

com¬

We
still
retain,
development, requirtments.
but, for us, under existing cir¬ however, all the mechanism of
cumstances, such a huge influx of exchange control and with the
outside money—some of it clearly extreme uncertainties in the in^
will refer to the reasons for this
coming merely for the ride—had ternational outlook we feel that
later.
The
Toronto
Stock
Ex¬ its
disturbing aspects. The very there is a good case for .their re¬
change Index of 15 Western Oils size of the movement intensified tention, but we may at least hope
moved

strong

was

76.30.

all

level

own

was

Imperial

years.

to-day influences.

Canadian

the

by $535,000,000 to
reach $1,790,000,000.
More than
half of such inflow came' in the
all

drilling. These discoveries wefo
the result of exploration
programs
that had been going on for
many

Oil

pulsion of fixed rates and to leave

rose

growth and

balance of payments position.

"wise and

and fortunately, to
Canada has received

dented inflow of capital into Can¬

This, of intermixture of other than United
course,
has been largely due to States capital,
although it is esti¬
the fixed price of gold and the mated
that the majority of it was
rising costs of production which strictly of United States
origin.
have narrowed profit margins.
After
The

of Canadian

strengthening of the Canadian

sion that was taken has been gen¬

date at least,

unprece¬

reserves

odds very definitely on the up¬
side, but strong warnings are be¬
ing experienced from week to

ern

productive and export capac¬
ity was embarrassing in itself, but
so
long as the Canadian dollar

dollar

capi¬

our

could be held and whether such

States

was

Canadian

Somewhere

Canada

nadian

uncer¬

with

Canada

mid-year, American speculative
buyers seemed suddenly to decide

been

particularly

the side

in¬

our

viously action

This

tal liabilities to the United States
without commensurate addition to

taken

ac¬

period at

pace.

voluntary building

the

action

long

even

evolution

through the

Bank

between

long-derm

tainty

The

•

move

economic

Government

Canadian stocks
been

Probably the outstanding event

program. Following the freeing of
the Canadian dollar on Sept. 30,

strong.

monlh.

per

was

Exchange

the

business

foreseen

were

ceeding for
much

looked like

Canadian

upward

accelerated

last

volume for October for this year
was
well over 50 million shares.

the premise

favorable

pressures

year

the

exchanges

rate

conditions, coupled with the infla¬ September.
tionary

two

the

struggle. Since that time the
kets

these

the

engaged

tendency, probably

with your

case

three

"American

ume

markets, the invasion of Korea
brought about a sharp break in
the market.

impressive.

quarter of 1949 the combined vol¬

Ottawa

Hamilton

Charlottetown

Winnipeg

St. John's, Nfld.

*
in

The Commercial and Financial Chronicle...

(2314)

Provinces of

Continued

from page 41

Quebec, Ontario and

and Prosperity

Canada's Ptogiess
have been
the first 10 months of

The

the Press than 803 wells

total turbine installa¬
tion in 1939 amounted to 8,289,000

mates

h.p. and had risen by 1949 to 11,—

erable promise of further expan¬

Interprovincial Pipe¬

new

In
addition overis now under con¬
struction for completion by 1952.

sion.

h.p.

615,000

2,538,550

line,

In 1951, in addition to feed¬

day.

something
the
refineries
at
Regina,
over 55,000 barrels in
1949. From ing
January to April, 1950, the aver¬ Moosejaw and Winnipeg, a sub¬
stantial proportion will go to the
age was just over 66,000 barrels.
in

rels

1948,

and

We have been

having problems

Ontario

Western

with

market,

with too much produc¬
tion
pending the completion of
additional refinery capacity in the

something left over probably
sale in the United States.

Prairie Provinces and transporta¬

will

this

year

The average for 1950

tion.

is ex¬

pected to reach about 75,000 bar¬
rels per day of allowable produc¬
tion, and the estimated daily aver¬
age production for the week end¬
ing Nov. 4 is at something over
100,000 barrels. Present potential
is estimated to double this figure.
Proven

reserves

now

are

esti¬

mated at about

IV2 billion barrels,

and competent

Additional

that

eventual

af least several

production is, of course, markets
and transportation.
is

estimated

that

ern

found

h.p.

1,519,400

in¬

was

Oct.

1950

Hydro-Electric

The

Commission

Power

Ontario

pro¬

but

tinue

great.

Along with the oil development,
very

substantial

ural

gas

have
will

markets

of nat¬
proven, and

been

found

for it.

extremely difficult to as¬

yet the impetus of such a

to 4,298,000 h.p.

completion

construction

the

present

by 1952.

program

The installed capacity of British

reserves

have

h.p., bringing the On¬

642,000

tario capacity up
upon

Columbia

the

end

1939

was

and by the end of
1949
equaled 1,238,000 h.p.
At
present there is under construc¬
tion 77,000 h.p. to be completed by
1952. The Province is hoping that
738,000

the

Prairie

bia

Hydro-Electric Power
One

Canada's

outstanding
large volume of hydro¬

assets is

electric

power.

day will be available in West¬

developments

Canada in 1952.

since

1939,

Company

Aluminum

review

the

of this

financing

Labrador

the

iron

have

Brawley, Cathers & Company

made

been

400 miles of

over

com¬

construction

mencement

the

for

railway to join
deposits

the Quebec-Labrador ore
the

with
the

Creek

Burnt

active

most

MUNICIPAL

and

de¬

CORPORATION

tons

These reserves

ported.

sufficient

sidered

SECURITIES

of more than
have been re¬

reserves

proven

400,000,000
-

the

where

area

prospecting

con¬

are

the

support

hood

the
that

over a long period, with
possibilities ranging to an
annual output of more than twice
a

year

that amount.
CANADIAN

BANK

COMMERCE

20%,

and

through
whole

ADELAIDE

5821

The

titanium

iron

project fur¬

ther down the St. Lawrence River

TORONTO

plastic industries may well divert
the

outlook

over-all

agricultural

for

production

1950

re-opened

the

for

production

for Canada, and that post¬
development is proceeding in

war

pattern, with certain important

spects

velopment

(a) Newsprint—Of equal impor¬
in our economy is the pulp

which in many re¬
to parallel the de¬
in the United States

seems

following World War I.

tance

It is, in fact,

that

hopeful

are

first among our industries in gross

thusiasm

value of production, in

our

paid

capital in¬

in salaries and wages

to those engaged in it. By
the greater proportion of the

industry

is
of

sponsible

directed to the pro¬
newsprint and is re¬

for

60%

the

output of this commodity.
of

end

world

fortunate in having such

are

which

States,

latter years, representing a
value of about $430,000,000.
For

this

period

estimates
indicate

for

any

the

year

full

and

the
1950

year

fidence

increase

the

aggregate of approxi¬

and

the

exceeds

combined

output

Canadian

mills

news¬

since

present

newsprint

deal

well

en¬

Finland.

caution,

sincerely hope that we may

able

closely

continue

together,

to
our

work

not yet

solved

containing

the years.

Respectfully submitted,
Canadian

Securities

Committee

F. Douglas Chapman,

Frederick

(b) Other Pulp and Paper Prod¬

Chairman;

Ashplant;

oxide

Hutchinson; W. H. R. Jarvis;
Edward S. Johnston; A. Nor-

proved its productive capacity in

high

40%

A problem which has

been entirely successfully
is that of the extraction of
on a

CANADIAN GOVERNMENT
Mining
Competent observers believe that
the
of

exploration and

going on, in 1950, at

rate

enced,

than

perhaps

and

before

ever

McLeod,You hg,Weir & Compahy
LIMITED

development

Canada's mineral potential has

been

Members of The Investment

with

A
per

discovery

DEALERS IN ALL

greater

CANADIAN SECURITIES
of important

Province

Quebec,

the prospects for very

creased
and

production

silver from

properties

now

Territories,
lights.

are

Direct

and

lead,

private wire

The First Boston

largely in¬

several

zinc

in the Northwest

Stock orders executed on

the

district has

come

Montreal and

all Exchanges

Head Office

King Street West, Toronto, Canada

outstanding high¬

A very important gold de¬

velopment

Corporation, New York

different

under exploration

and development

cop¬

properties in the Gaspe Pen¬

insula,

Dealers' Association of Canada

great¬

experi¬

potentialities.

WINNIPEG

Rus¬

Bell; W. T. K. Collier;
Winfield Ellis; Herbert A.

commercially economic basis.

TORONTO

advantage, as we have done over

32%

and

tons

titanium from the oxide

pure

MONTREAL

mutual

they Jones.

titanium

Established 1920

and

do so, we can give

sell D.

grade iron.

LIMITED

con¬

good account of ourselves.

output

Britain, Norway, Sweden

with

future

well

interesting fact that the

from

war

feel that if

magnitude

great

experience,-

face

sim¬

be
an

such

need

on.

mately 5,271,000 tons.
It is

extent

capital, in order to try and avoid

are

they

outside

production

newsprint

year,

has been higher than for any
ilar

which

that

large

various undertakings, some

our

such

investors
in

problems that could develop later

months

nine

first

the

dollar

helpful to have

been able to interest United States

63% to
output of 5,176,000 tons in the

take

politically.,

and

It has been very

increased

newsprint had

experience,

your

industrially

both

Canadian

4,535,000 tons with the actual pioduction equalling 2,893,000
tons.
In the 10-year period, from 1939
to 1949, the actual production of

enable

advantage

At the

1938, the annual capacity
newsprint mills was

being tempered with

relationships with the United

nearing

125,000,000

BELL, GOUINLOCK & CO.

en¬

judgment and caution.

vested and

posits of ilmenite, said to be the
world's largest, are estimated ai

SECURITIES

the output from none of
which is being used for newsprint.
pulp,

completion, although
ucts—As a result of the growth of
full scale
production of 550,000
its markets, the pulp and paper
tons annually is not expected un¬
til
1952.
The
Allard
Lake
de¬ industry
has
substantially
im¬

PROVINCIAL AND MUNICIPAL

resources.

mills

exceptions,

industry.

rather
one

fact, in the last live years, 10
have been constructed or

Pulp and Paper

paper

years

1949.

and

these

uses

It is quite evident that 1949 and
have
been very important

with

favorably

quite

profitable

the

because

1950

greater, the quality lower but
the net return to the farmer will

was

compare

from

newsprint

Canada's most valuable

to indicate that the volume

seems

pulp

some

demands

the

about

down

use

production

that there has been a
lowering of quality
frost damage.
On the

the

of Great

Titanium

our

fine

for

pulps for use in the synthetic fi¬
bres, and in
the chemical and

considerable

tire

BUILDING

will

figure

use

grades of paper and for dissolving

bushels, but
indicate' that

figures

has

six months out¬

Competition for the
pulp
resources

what

quality

540,000.000

latest

shipment of 10,000,000 tons of ore
future

the

but

ex¬

year

wood

promised to be one of Canada's
largest wheat harvests.
It had
been hoped that the crop would
be somewhere in the
neighbor¬

velopment have been carried out,

CANADIAN

GOVERNMENT

River.

Lawrence

St.

crop.

ye&r not only reduced the

volume

project, it is understood that work
is
proceeding
apace.
Contracts

wheat

this

by record produc¬

put of about 1,650,000 tons.

in the latter part of August

Frost

Iron

With the completion of primary

refer-

Canada's

ance

condi¬

without

The demands

newsprint,

reflected

tion levels with

Canadian

complete

$87,000,000

pulp and paper products,

cluding

duction

ince.

$400,000,000.

for

Agriculture

ried

through, a further 1,500,000
of electric energy might be

from

been

tions

about

risen

material

Canada.

far,

h.p.
substantial
added to the facilities of the Prov¬
taken
place

particularly

found

pro¬

over

about

have been
in several parts of Northern

Canada, Limited will be speeded
up.
If this development be car¬

Very
Have

It has also been announced

bearing

annual

by about 1,500,000
3,000,000 tons, while
the dollar value in that period has
to

tens

that substantial deposits of uran¬
ium

levels.

prewar

1949,

increased

been

consid¬

shows

development

duction, excluding newsprint, has

and values.

reserves

ore

h.p.

the economy of
Provinces, where the as a result of accelerated demand
economy to date has been almost for aluminum the project now be¬
ing investigated in British Colum¬
entirely agricultural.

major change in

Western

Canada, particularly the Prairie
Provinces, is using about 85,000
barrels per day, and that refinery
capacity of about 100,000 barrels
per

tity, but the pressure of produc¬
tion in Alberta will probably con¬

are

that.

The key to the problem of this
quick development of such large

have

sess

reserves

times

there

this figure had risen to
2,525,800 h.p. In addition to the
development of 1,131,000 h.p. of
water power now under construc¬
31,

tion,

facilities

transport

stalled

1938,

end

these ceeding with the building of seven
will depend upon where markets thermo-electric plants which ini¬
are available, and in
what quan¬ tially will have a total capacity

observers are con¬

fident

for

the

This

1939

From

esti¬

been

running from Edmonton to
The Province of Quebec at the
this
year,
resulting in 603 oil Superior, Wisconsin, by way of
Regina and
Gretna, end of 1939 had installed capacity
producers, 36 gas wells and 164 Moosejaw,
Manitoba, and connected to Win¬ of 4,850,000 h.p. and by the end
dry holes, and that by Oct. 30
There is
there
were
1,862 oil producing nipeg by a line owned by the Im¬ of 1949, 6,132,000 h.p.
wells and about 260 gas wells in perial Oil Limited is now in par¬ presently
under
construction a
tial operation, and is giving con¬ further
Western Canada.
688,550 h.p. which will
The average daily
production siderable relief. The capacity of bring the total turbine installation
this 16/20 inch line is expected at the end of 1952 to 6,819,600 h.p.
which was slightly under 19,000
barrels in 1947, rose to 30,000 bar¬ to be about 135,000 barrels per
In the Province of Ontario at
in

obtained

with

has comparison

confirmation

and

year

British Columbia.

Canada's

drilled

this

Thursday, December 14, 1950

Yellowknife

into production

Branch
Montreal

Ottawa

Hamilton

Offices

London

Winnipeg

Correspondents in London; England

New York

Volume

172

Number 4968

Continued

from

The Commercial

and

Financial

Chronicle

FITZGERALD,

page

(2315)

Jr.,

WALTER

GOULD, EDSON

Blunt Ellis & Simmons, Chicago

Arthur

FLEMING.

In Attendance at IBA Convention

CHARLES J.*
Hanrahan & Co., Worcester

FOLGER,
CURREY,

BROWNLEE

Equitable

Securities

Auchincloss,

Nashville

CURTIS,

Becker

Co.

DUNN,
C.

Incorporated,

Chicago
WILLIAM

The Keystone Company of Boston, Boston

National

Bank

FORDON,
Fordon,

A.*

inc., New York

Co.

Incorporated,

FREDERICK,
WRIGHT*

Paul

Glore, Forgan & Co., New York

Arizona,

Edwards

JOHN

Calvin

New

Co.,

New

York

EATON,

FRIDLEY,

EARL

JOHN

William

Co., Chicago

EGAN,
San

Inc.,

Oklahoma

WILLIAM

City

N.*

Company,

FULKERSON,

FULTON,

RALPH

Paul

W.*

Davis

Chicago

Co.,

DAY, JAMES E.
Midwest

Jr.,

Exchange,

JOHN

Clark. Dodge &
DEAN,

BARY,

DECKER,

American
of

Co., New York

WALTER

DEMPSEY,

Van

Trust Co.

Sills.
New

HAL

Dewar,
San

Co.

Inc.,

National

Bank

Chicago

Weeks,

New

Corporation, |

DOOLITTLE,

ROY

Doolittle & Co.,

DORBRITZ,

W.*

Moore, Leonard

Webster

Lynch, Pittsburgh

Philadelphia
DOWNEY,
Union

New

NORMAN

Securities

GEORGE

HERMAN

Glore,

New

DUNN, EDWARD
Robert

Garrett

♦Denotes

K.
&

Sons,

Baltimore

Mr. and Mrs.

Prices

York

quoted

Canadian

delivery in Canada,

Baltimore

New

for

delivery

Funds

for

New York Funds

the

United

Stales.

Chicago

Fairclough & Company

York

Limited
Incorporated,

Bay Street

Toronto, Canada

Telephone: PLaza 1141

Loeb, Rhoades & Co.,

GIBBONS,

Jr., GEORGE B.
Gibbons & Company,

York

Jr..

Inc.

SNYDER

Michigan Corporation, Detroit
Inc.,

York

GLASSMEYER, EDWARD
Blyth & Co., Inc., New York

CANADIAN SECURITIES
Govt, of Canada Internals

GLAVIN, CHARLES C.

The

First

Boston

JOHN

Chicago

F.*

GLOVER,

California

F.*

Co.,

Corp., New York

Atlanta

Canadian Oil, Mining

WAYNE*

Bank,

Los

Angeles

Public

GLYNN, Jr., JOSEPH A.
Blewer, Heitner & Glynn, St. Louis

& Co., Chicago

FINNEY, Jr., HOWARD*
(
Bear, Stearns & Co., New York

allen cl*
j
,
& Co., New York

Wertheim

Government,

Municipal and
Corporation Securities

GOLDSMITH,

FISHER, CHARLES N.
Singer, Deane & Scribner, Pittsburgh

Utility & Industrial

Stocks & Bonds

GOLDSMITH, CLARENCE E.
White, Weld & Co., New York

FISHMAN,

Dubois,

Canadian

GEYER, GEORGE* and Terry
Geyer & Co., Inc., New York

GLENN.

JOHN

page

and

Toronto

Sons,

FRANK

New

LONGFORD*

Forgan

—

Dominick,

Group, Incorporated,

Hall & Company,

FENNELLY.

Company,

GILLIES, GEORGE J.
A.
C.
Allyn and Company,

Fay & Co., Portland, Maine

Harris,

Washington Street, Chicago

Dealers

Ripley & Co.,

GILBREATH,

York

FELSKE.

Continued

York

Courts

Corporation,

York

DROBNIS,

Nathan

New

Underwriters

220

New

City

Distributors

Geo.

FAUSET, JOSEPH II.*
Fauset, Steele & Co., Pittsburgh

FELDMANN,

Co.,

Corporation,

Corp., Chicago

FAY, NATHAN C.*

WEBSTER

Dougherty

Securities

GEDDES, EUGENE M.
Clark, Dodge & Co.,

Carl

Jr., CHARLES W.
Hooker & Fay, San Francisco

ROBERT H.
The Northern Trust
Company,

New

FAY,

Buffalo

ERNEST

DOUGHERTY,

Charlottesville

HALLOWELL, HENRY R.*
Hallowell, Sulzberger & Co.,
Philadelphia

Corporation,

Chicago

CHARLES

Brown

First

DONNALLY, JESSE P.*
Peoples National Bank,

HALLORAN, ROBERT K.*
Robert Winthrop & Co., New York

MacLEAN

GERNON,

Cleveland

PAUL W.

FARRELL, F. D.
City National Bank & Trust Co.,
Kansas

Higginson

Chicago

York

Dominick

Hanseatic

GEORGE

Co., Philadelphia

Harriman

York

FAIRMAN. Jr., FRED W.
Sills, Fairman & Harris, Incorporated,
Chicago

II, BAYARD
& Dominick, New York

York

GEORGE, EDWARD C.

DEWEY

Boston

Inc..

H.*

GATCHELL, EARLE
Hayden, Stone & Co., New York

FAHEY, LESLIE J.
Fahey, Clark & Co.,
The First

Pancoast,

W.*

Company,

KURT

JAMES

GANDER,

Alex.

Company,

Chicago,

GARRETT,

HALL, EDWARD B.
Harris, Hall & Company, Chicago

Gregory, New York

Company, Hartford
and

GARLAND,

Illinois

FAIRCHILD,

Securities

DOMINICK,

THOMAS

Dominick

Evans

Hornblower

H.*

JOSEPH

American

New

EVANS,
Trust

Harris, Incorporated,

Robertson

Parson

Antonio

DIXON,
New

EUGENE

Graham,

Company,

CLEMENT

Continental

York

DEWAR,

Trust

EVERETT.

Fairman

I.*

Atlanta

Development Bank,

DeSTAEBLER,

Noyes,

E.*

GALLAGHER, FRANCIS P.
Kidder, Peabody & Co., New York

LESTER H.

Clement

Rico

II.

GALLAGER, HERBERT V.

York

EDWARD

NEAL*

THOMAS

JOHN

GA1RDNER,

Yarnall

New

Francisco

EVANS,

WALTER*

Government
Puerto

Crouter &

Tribune,

Gairdner

Co., New York

EMPEY,
San

T.*

Ingen & Co. Inc., New York

DESCARTES,

American

DeHaven & Townsend,
Bodine, Philadelphia

Hemphill,
&

Bank

Chicago, Chicago

DeHAVEN,

WILLARD

EMERSON,

PAUL*
National

Cooley

Harper & Son & Co., Seattle

EMERSON. SUMNER b.
Morgan Stanley & Co.,

York

New

MARQUETTE

Smithers

F. S.

Co.,

Elworthy & Co., San Francisco

Upham

Wm.

ELWORTHY, MARK C.

Co., New York

HOWARD

Harris,

Chicago

HALE,

Company, New York

Association

GAERSTE,

ELLSWORTH. SHERMAN

Stock

DAYTON,

Jr..

Washington

Chicago

Elkins, Morris & Co., Philadelphia

Co., St. Louis

1L*

York

Lee

Francisco

ELKINS, Jr., GEORGE W.*

WILLIAM

Scott

New

KENNETH*

IIAIGHT, Jr., C. M.
Tripp & Co., Inc., New York

York

GRUBBS, M. M.

GRUNER,

Walker &

Vance, Sanders <fc Company, Boston
Jr.,

City

GEORGE M.*
& Son, Incorporated,

New

WALLACE

Dealers,
FURLONG,

DAVIS,

the

York

Grubbs,

Inc.,

FROST, Jr., HARRISON C.
Hayden, Miller & Co., Cleveland

National

California

New

Mason,

HAGAN, Jr., JOHN C.*
Mason-Hagan, Inc., Richmond

Bank

Va.

York

Pittsburgh

Bankers Trust

Edwards & Co., Fort Worth

JOHN

First

H.*

Edwards,

EDWARDS,

DAVIS, JOSHUA A.
Reynolds & Co., New York

CHARLES

Gregory

GRUNEBAUM.

FRIEND, ARTHUR S.*
Folger, Nolan, Incorporated,
Washington

Howard, Incorporated, Boston

EDWARDS.

Co., Los Angeles

DAVIS, De WITT
Welsh, Davis &

Jr.,

Eaton

MERRILL*

Peabody & Co., Boston
&

York

Company, New York

St. Louis

Co.,

GREGORY,

Bonner

O.*

BENJAMIN F.

Jr.,

New

R.*

National

York,

GREGORY,

Indianapolis
PAUL

SHELDON

Chase

New

Fridley & Hess, Houston

DAVIDS, MARK*
Lester

Stix

DYKES. VICTOR
Bradschamp & Company, Houston

McG.

Bullock,

DARLING,
Kidder,

Frederick

FRICK,

b.*

GORDON

Guaranty Trust Company of New York,

C.
Stock Exchange,

York

CARTER

Horner

HAGEMANN,
The

RALPH

Corporation,

New

GREEN,

Incorporated,

Aldinger & Co., Detroit

Milwaukee

DURYEA,

Worth

DALENZ,

York

FORREY, GEORGE C.»
Indianapolis Bond & Share

L.»

Baird

DUVAL,
William

New

CLIFFORD

Nolan,
Washington

Phoenix

CUTTER, FRED
Fort

JOHN

Folger,
Redpath,

Co.,

NEWMAN

Robert

CUTHBERTSON, FRED A.
First

STEWART
Devine &

DUNNE.

CUSACK,

P.*

Parker

Washington

GRAY, EDWARD

Weeks,

Washington

ARTHUR

RICHARD

DUNN.

Corporation,

Scott.

Lynchburg,

GRAM, Jr., HARVEY B.*
Johnston, Lemon & Co.,

FLYNN, GEORGE T.
Hornblower

GUNN.

Weisenberger & Co., New York

GOODHUE, III, FRANCIS

Atwill

HENRY

and

Ira

Company,

Haupt

Calvin

Miami

BERTRAM
&

Co.,

M.*

New York

Goodbody & Co.

Bullock, Philadelphia

ESTABLISHED

1891

MEMBERS

York Stock. Exchange

New

Other

Tel.:

105 WEST ADAMS ST.

6, N. Y.

Chicago 3, 111.

7-0100

Direct Wire

and

Principal Exchanges

115 BROADWAY
New York

Tel.: CE 6-8900
to

Greenshields & Co., Montreal

and Milner, Ross & Co., Toronto

BONDS

STOCKS

Markets maintained in

all classes of Canadian external

and internal bond issues.

Stock orders executed

Exchanges,

net New York markets quoted
DIRECT

PRIVATE

NEW YORK, TORONTO,
BELL

Canadian Securities
Government

the Montreal and Toronto Stock

WIRES

Public Utility

request.

CONNECT OUR

TELETYPE

Provincial

Municipal

American Municipal Bonds

MONTREAL & OTTAWA OFFICES

SYSTEM

1-702

Wood, Gundy & Co.
Incorporated

Philadelphia

40 EXCHANGE

PLACE, NEW YORK 5

London, Eng.
Ottawa

Toronto

Montreal

Telephone WHitehall 4-8161

Wall Street,

New York 5

Winnipeg1

Calgary

105

Vancouver

Halifax

West

Adams

Street, Chicago 3

Victoria

Toronto

Montreal

Winnipeg

Vanconver

London, England

The Commercial and Financial Chronicle...

(2316)

IIORNOR, DeWITT
The National City Bank of New

Continued from page 43

KYNETT.

Convention

WILLIAM H.*
Braun, Bosworth & Co.,

Incorporated,

Bell,

HELLER,

Association,

HEMBUKGER,

Heller,

Ml/JRRAY

Bankers

Investment

Commercial

Washington
HAPP,

LEWIS B.*
Harris, Upham & Co., New York

HEWITT,

York

St.

ROBERT B.
Co., Boston

HURRY,

National

C*
Hill, Richards & Co., Los Angeles

HILL,

Bank

Louis

ROBERT

Russ

Chicago

JOHN

HOLLAN,

Sutro & Co., Sao

HOLT, ROBERT L.
Blair, Rollins & Co.

LEMON.

Corporation, Chicago

LLOYD

Trust Company

The

Chase

New

National

Bank

New

Incorporated,

the

JOHN

Morgan

•*'

Life

Insurance,

Co., New York

HORNER,

EDWIN

Scott, Horner
Lynchburg

BAWES. HARDIN H.
Harris Trust & Savings Bank, Chicago

The

Milwaukee Company,

RUPERT

Johnson

)

Milwaukee

LEVY,

ROBERT

LEWIS,

Inc.,

JOHNSON,
Johnson.

Co.,

York

New

Space

JOHNSON,

JONES,

New

JUNE

T.
-

Hartford

Co.,

Jones

Cleveland

CARL

First

Cleveland

)

E D

Shields

Management Co.,

;

Bank

San

■y

Minneapolis,

HURON &

ERIE

LOW,

138ft

METCALF 4500

St.

New

Paul,

Paul

Kalman

Bank

the

New

Laidlaw

The

Washington

CHARLES E.
Distributors Group,
Incorporated,

Union Securities

GOVERNMENT,
•

and

CORPORATION

Johnson

New

BONDS

KING ST.

Co.,

McKEE,

York

New

Co., Inc., New York

WALTER

Allyn

McKIE,

Quirk

PLATEAU

ELGIN

1341

8751

Ltd.,

E. BATES
W. Clarke Corp.,

The

Weil,

Co.,

HCHAHGf

MONttiAi STOCK

National

Bank

HCHARGf

VICTORIA

CANADIAN

CAICARY

EDMONTON

uchancl

GOVERNMENT
vancouver stock

Kirkpatrick-Pettis Co., Omaha

exchange

SASKATOON

KNEASS. GEORGE B.
*
Philadelphia National Bank,

MUNICIPAL
WINNIPEG STOOL-

MOOSE JAW

Illinois

Bank

MINES, OIL, GRAIN

PORTAGE IA PRAIRIE
SWIFT CURRENT

COMMODITIES

Bioren

James Richardson ^ Sons

MONTREAL

TORONTO
KRUSE, JOHN A *
ELGIN

1341

Otis

ESTABLISHED
.

Philadelphia

Co.,

exchange

inc.

investment walfrs'

KINGSTON

1857

WINNIPEG,

CHAIN

CONNECTED

Cleveland

KRUSEN, H. STANLEY*

Shearson, Hammill & Co,, Hew York

•

OFFICES
BY

OUR

CANADA

FROM

MONTREAL

OWN

DIRECT

association
<* canada

INVESTMENT RANKERS'

B.*

Co.,

/ '

York

KREBS, FESTUS J.

KRUG, THOMAS

grain

exchange

can a 61 ah commoottt

XENGRA
New

;

EXCHANGE
winnipeg

Chicago

KOCUREK, ARNOLD J.*
Rauscher, Pierce & Co., San Antonio
KOERNER, IRVING
Allen & Company,

CORPORATION

LETH8RJBGS
National

Chicago,

MARKET
caisary stock

TORONTO
KING ST. WEST

MONTREAL CORt

SECURITIES

SAMUEL

Metropolitan St. Louis Co., St. Louis
25

page

•

Incorporated '•*
-

Continental

Milner, Spence & Co,

VANCOUVER

Boston

Co.

Co.,

1W fOtQRTO STOCK

T.*

Trust

Irving

Continued

York

New

KNIGHT. FRANCIS M.

MEMBERS OF

'Ttiewdvu

Philadelphia

THE TORONTO STOCK EXCHANGE

Roth

Cincinnati

Jenks, Kirkland & Co., Philadelphia /

923-385

New York

and

KIRKPATRICK. STEWART R.

WINNIPEG

Company,

Toronto

KIRKLAND,

TORONTO
MONTREAL

Trust

STANLEY

WILLIAM

Rockland-Atlas

WEST

EDWARD D.

York

Corporation,

York

Boston,
25

CARL*

WNNIP16

WILLIAM

KING,

Milwaukee

Company,

Northern

Company,
Incorporated, Chicago

ROSS

King,

MUNICIPAL

Minneapolis

ARTHUR N.

York

KING,

E.*

Company, Inc.,

McGlone & Co., Inc., Chicago

KING, JOSEPH H.*

KING,

Chicago

...

KING. CARMAN G.
Fairclough & Company,

Mills, Spence & Co. Limited

Co.,

JOSEPH

LYKLEMA,

KIMBALL,

New

DONALD

L.*

Dillon, Read &

Advisers,

Louis

McGREW,

Inc.,

Detroit

Richard

LUDIN,

Economic

Chicago

Co.,

LEON

McCLONE,

York

City

FRANK

Davis

Milwaukee

The

Co.,

GEORGE S.

McGEOUGH.

York, New York

david b.*
& Co. Incorporated,

City

THEODORE*

Kansas

N.T.&S.A.,

HARRY

Jr.,

McFARLAND,

National

Cleveland

HARRY A.
Exchange Commission,

Morgan
York

New

Whipple

Council

St.

Bank

LUCAS, Jr., MARK A.
Lucas, Eisen & Waeckerle,

LUCRE,

KEYSERLING,
LONDON, ONT.

McEWAN,

Stearns

BERT

Mcelroy,

Carl

BLDG.

ONT.

Bear,

America,

WILLIAM

Bacon,

New York

L.*

New

Philadelphia

Company,

McDonald-Moore

Co., Inc.,

LOOMIS. JOHN S.*
The Illinois-Company, Chicago
E.

M.*

Co.,

Washington

National

Chase

C.
&

McDONALD.

Paul

LOVE,

Co., Chicago

WALLACE

Baker

Securities

DEAN*

McCormick

McDONALD,

Francisco

KERR,

the Investment Dealers Association of Canada

Chicago

RUSSELL
of

First

The

York

McDonald

Milwaukee

Co.,

Norfolk

WALTER*

MCDONALD,

VICTOR*

Dickson

G.*

Company,

JOHN

Bank

Boston

Norfolk,

Hammill & Co., New York

McCURDY,

Kenny Co., New York

KENT.

Igl

St.

KENNY,

Association,

Cincinnati

EDGAR

Corp.

McCORMICK. D.

Kebbon,

CHARLES

The

KAUFMAN, C.

York

New

National

McCLINTOCK, FRANKLIN T.
Harriman Ripley & Co., Incorporated,

LOOMIS, CHARLES H.

Minneapolis

IMAND SECOKITIES

City

New

Corp.,

Bankers

Co.,

Chicago
KALL,

LOFTUS,

Company,

the

Thayer.

Loewi

JUST. PAUL A>*
Television

Bank

R.*

Boston

ALDEN

LOEWI,

Portland, Ore.

Company,

S.
National

Investment

Hill

JOSEPH, HERMAN B.*

Corporation Securities

STREET, W.

Investment

LIVINGSTONE, SEABOURN R.
S. R. Livingstone & Co., Detroit

Jr.. THOMAS H.

JOHN

PEYTON

MAY.

DUNCAN

LITZEI.L,

Co., St. Louis

S.*

Atkinson-Jones

JONES.

M I T

New York

Association,

Chicago

& Company,

JONES,

Governmenty Municipal

Inc.,

Northern Trust Company, Chicago

J. DENNY
The Parker Corporation,

York^ New York

First

The

Jones &

GRAHAM*

Cooley

The

Shearson,

York

F.*

EDWARD

Edward

JONES,

Distributors,

MAY,

MAYNARD,

"the Chase
of

First Securities Corporation, Durham

Underwriters and Dealers

Fund

MAXWELL.

New York

Bankers

LINEN. JOHN
•J,

CHARLES

Boston

York

New

CONRAD

Lauer & Co.,

LITTLE,
JONES,

Co.,

DONALD

Investment

WILBUR E.*
& Johnson, Pittsburgh

Johnson

Incorporated, .St. Louis

Putnam

Atlanta,

Co.,

WILLIAM

MASTERS,

L.*

LIEBENFROST,

Martin

Chicago

Co., New York

Stearns

Spokane

Inc.,

Favre,
WAYNE

MASON, ROBERT
Merrill Lynch, Pierce, Fenner & Beane,

Chicago

HORNING. BERT H.
Stifel, Nicolaus & Company,

and

HAROLD M.

Milhous,

LINCOLN, MARY R.

Inc.,

Co.,

JOHNSTON, PAUL A.
Barron's Publishing Co., New

ADELAIDE

York

New

M.*

THOMAS

Lane,

MARTIN, GEORGE L.*
International Bank, New York

MARTIN,

-Hutzler,

,New York

NORBERT W.
Barney & Co., Philadelphia

Murphey

SAL1M

LINSLEY,

TORONTO,

MARKUS,

Smith,

LEVY. GUSTAVE L.*

LILLIS,

EDWARD S.*
Wood, Gundy & Co., Inc., New York

50 KING

Co., Los Angeles
&

York,

Co.

<fe

Marks

Laurence

MARTIN,

Bros.

•

MARKS, LAURENCE M.*

Pierce, Fenner & Beane,

BENJAMIN

Inc.,

Company,

Evans

York

New

Co., New York

H.*

MARCKWALD, ANDREW K.
Discount Corporation of New

Bear, Stearns & Co.,

Mason,

Company,

H.*

B.*

Trust

WALDO

Atlanta

P.*

Stern,
JOHNSON,

'JOHNSTON,

Clement

Nashville

Lemon & Co., Washington

Estabrook

Savannah

*Denote3 Mr. and Mrs.

Members

York

LESTER.

LEWIS,

York

New

Cincinnati

Company,

ROBERT A.
Lynch, Pierce, Fenner & Beane,

Philadelphia

HOLGAR 3*

JOHNSON, JOSEPH T.

Co.,

Merrill Lynch,

Bear,

Jr., EDWARD
Co., Philadelphia

York

New

Goldman, Sachs & Co., New York

STERLING E.
Milwaukee Company, Chicago

The

HORNBLOWER, II, HENRY*
Hornblower & Weeks, Boston

Corporation,

Co.,

Chicago,

Chicago

JOHNSON,

JULIAN

MAGOWAN,

GEORGE J.*

Salomon

Bank

Co., Incorporated,

York

Drexel

City

H.*

Chemical Bank & Trust

JAMES

Lester

National

Dominick, New York

JOHN S,
Fidelity-Philadelphia

HUDSON

Johnston,

New

HOPKINSON,

York, New York

MAUSER, A.

MORTON

First

Philadelphia

Co.,

DONALD

MAGNUS,

JOHANIGMAN,

pf Georgia, Atlanta

ROBERT L.

Jr..

Angeles

Institute

MATCHER,

;

Jenks, Kirkland & Co., Philadelphia
The

Dominick

Magnus

Rhoades &

Morgan Stanley &

LENESS.

Chicago
HOPKINS,

HATCHER,

JENKS,

Drexel

MACKEY.

Higglnson Corporation, New York

LEMKAU,

San Francisco

Jr., J. EARLE*
Staats Co., Los

William

Merrill

QUITMAN

JAMES

Lee

JENNETT. EDWARD J.

Chicago

BYRON*

Parker

New York

Co.,

„

Bank

B.*

Bradford

LEE,

A. W.
Hutton & Co., New York

Dillon & Co., New York

MACHOLD. WILLIAM F.

Company, New York
I.

IGLEHART, JOSEPH

INGLIS, JOHN
*
Blyth & Co., Inc.,

Co.,

York"

JARDINE,

ELAINE
•
*
Investment Bankers Association,
Washington

HOLMES.

Francisco

HASSMAN, ELMER G.
A. G. Becker & Co.,
HASTINGS,

Brothers

Barr

ROBERT

UARTER,

The

WILLIAM G.
Company, Inc., San Antonio

Jr.,
&

Trust

MacFADDEN. DONALD

WELLS

Loeb,

LEDYARD,

HOBBS,

HARRIS, DAVID J.
Sills, Fairman & Harris, Incorporated,

Bank

National

MALLORY,

HUTTON, Jr., JAMES M.
W. E. Hutton & Co., Cincinnati
;

National

EMMETT

New

York

HUTTL1NGER, KURT J.
F. P. Ristine & Co., Philadelphia

New York

Mellon

Pittsburgh

Eastman,

Securities

Carl

M.*

HARRY

Curtis,

HUGH D.

MacBAlN,

MALIK,
LAWSHE,

New

Jackson

York

New

Bingham, Walter & Hurry, Pasadena

L.*

Pont & Co.,

American

& Co.,

Weld

City

PETER

LAVAN.

JANSEN

Atlanta

Bankers Trust

Pittsburgh

Inc.,

the

G *

MacGregor,

White.

HILDRETH, WILLIAM S.*
Peoples National Bank, Charlottesville

PAUL
St.

Louis,

CHARLES

Francis I.

Estabrook &

Boatmen's

HUNT,

Fridley & Hess, Houston

CHARLES B.
Smith, Barney & Co., New

The

Glover

Eank

B.*
Southern

Citizens

LAUD-BROWN,

MILTON

HULME,

Co., Des Moines

MILLS

Chicago

W.*

ROBERT

Webber,

Paine,

York, New York

Jr.,

Boston

WILLIAM S.*
Wagenseller & Durst, Inc., Los Angeles

WILBUR E.*

HESS,

HARDING,

Henderson

Chicago

LARKIN. THOMAS A.*
Goodbody & Co., New York

HUGHES,

HENSHAW. EDWARD C.
William R. Staats Co., San Francisco

HARDIN, JOHN S.
Hirsch & Co., Baltimore

HARPER.

New

Bank,

New York

Co.,

Corp.,

Publishing

Jr., WILLIAM L.
Lyons & Co., Louisville

LYONS,
W.

B.*

SAM

Finance

MacARTHUR,
&

National

Chase

The

Hughes & Co., Inc.,

Raffensperger,

HENDERSON, THEODORE C.

HARDER, F. WILLIAM
Allen & Company, New York

UARKNESS,

Chronicle,

York

New

LARKIN, Jr.
F. G.
The
Security-First National
1
Los Angeles, Los Angeles

SHANNON

Co.,

HUGHES, ALBERT R.*
Lord, Abbett & Co., New York
HUGHES,

Trust

W.*

Nuveen

LANE,

W.*

Indianapolis

HENDERSHOT. RALPH'
World-Telegram & Sun,

HARDER,

of
.

Chas. W. Scranton & Co., New Haven

Francisco

LYONS,

LANE, ARTHUR D.*

Ball, Burge & Kraus, Cleveland

HENRY
& Financial

John

Chicago

Co.,

LAING,
;

HUDSON. FRED

York

New

WILLIAM

Globe-Democrat, St. Louis

Pittsburgh

Incorporated,

York

New

LAIDLAW, HENRY B.*
Laidlaw & Co., New York

The

Nuveen

Bank

Chemical

L. J.

WILBUR

HOYE.

JOHN G,

WALTER S.*
Bruce & Co., San

New York

Shields & Company,

York

& Heimerdinger,

Walter, Woody
Cincinnati

DOUGLAS*

HANSEL,

HANSON,

WILLIAM

Becker & Co.

& Lynch,

EUGENE

LYNN,

Friedrichs

McK.*

CHARLES

Leonard

Moore,

Company, New Orleans

LAEMMEL,

Co., Inc.,

HOWE, JAMES M.
Farwell, Chapman & Co., Chicago

John

PAUL*
Times, New

HEIMERIHNGER,

Hanrahan

York

New

PAUL B.*
Co., Worcester, Mass.

HANRAHAN,

Incorporated,

HOWE,

IiEFFERNAN,

Atlanta

Co.,

York

New

Toronto

HANCOCK. ROY W.*
Hancock, Blackstock & Co.,

Rollins &

Blair,

Company, Limited,

Gouinlock &

CHARLES

HAZELWOOD,

;

HOUSTON, Jr., JOSEPH C.*
Calvin
Bullock, Chicago

Baltimore

Chicago
HAMPTON, PERCY

Philadelphia

York

New

Downing & Co.,

Baumgartner,

Co.,
M.*

Lanston &

Aubrey G.

HAYDEN, DONALD W.

HAMMOND.

LEONARD

HORTON,

LYNCH. Jr.,

LABOUISSE, JOHN P.*
Howard, Weil, Labouisse,

ARTHUR
Penington, Colket &

HORTON,

In Attendance at IBA

GERALD P.*
Co., Philadelphia

Brooke

York,

York

New

Thursday, December 14, 1950

ASSOCIATION

VICTORIA

PRIVATE

WIRES

01 AMERICA

...

•

••

'
.

•

■

(

Volume

172

Number 4968

The Commercial and Financial Chronicle

(2317)

INVESTMENT BANKERS ASSOCIATION
OF AMERICA
'

■

■
■

•

OFFICERS 1950-1951

President

Vice-President

Laurence

Marks

Laurence M. Marks & Co.

New York

Russell D. Bell

Walter W.

Greenshields & Co. Inc.

F. W.

Montreal

V ice-President

Mark C.

Elworthy

Elworthy & Co.
San Francisco

Craigie

Craigie & Co.

Richmond

Vice-President

John F.

Fennelly

Glore, Forgan & Co.

Chicago

Vice-President

Joseph T. Johnson
The Milwaukee

Company

Mihvaukee

The Commercial
46

and Financial

Chronicle

...

Thursday, December 14, 1950

(2318)

GOVERNORS

IBA

Albert T. Armitage

A. G. Becker & Co.,

Incorporated, Boston

John H. Barret

Andrew M. Baird

Coffin & Burr,

Incorporated, Chicago

G. James

Caldwell

Caldwell, Phillips Co.,
St. Paul

Barret, Fitch & Co.,
inc., Kansas City, Mo.

George K. Coggeshall
Schoellkopf, Hutton &

Harry C. Clifford
Kidder, Peabody & Co.
New York City

Benjamin F. Frick, Jr.

C. G. Fullerton

Stix & Co.,

Pomeroy, Inc., N. Y. C.

A. E. Ames & Co.
Limited, Toronto

St. Louis

S. R.

Kirkpatrick

Kirkpatrick-Pettis
Qo., Omaha

George B. Kneass
Nat'l '
Bank, Philadelphia

The Philadelphia

Clarence E. Goldsmith
White Weld & Co.,
New York City

rJcftaiwaHBanfc
.

of the City of N. Y.,

New York

V
v - '.

Howard M. Biscoe, Jr,
Whiting, Weeks
& Stubbs, Boston

George W. Davis

Ewing Thomas Boles
The Ohio Company,
Columbus

Edward K. Dunn

Davis, Skaggs & Co.,
San Francisco

Robt. Garrett & Sons,
Baltimore

M. M. Grubbs

Edward C. Henshaw

Grubbs, Scott & Co.,
Inc., Pittsburgh

Duncan S. Linsley
First Boston Corp.
New York City

William R. Staats Co.,
San Francisco

Norbert W. Markus

Smith, Barney & Co.,

Philadelphia

Volume 172

Number 4968

The Commercial and Financial Chronicle

,(2319)

IBA GOVERNORS

Harold M. Martin
Murphey Favre, Inc.,
Spokane

Charles B. McDonald
McDonald &

Company,

Andrew S. Mills

Stanley N. Minor

Newhard, Cook & Co.,

Pacific Northwest

St. Louis

Preston, Moss & Co.,

Company, Seattle

Boston

Cleveland

George F, Noyes

Charles R. Perrigo

The Illinois Company,

Hornblower & Weeks,

Chicago

(Continued)

Chicago

Ralph

Phillips

Dean Witter &

Los

R. W.

Co.,

James

Moss

Walter S. Robertson

Pressprich, Jr.

R. W. Pressprich & Co.,

Angeles

New York

Scott &

Stringfellow,

Richmond, Va.

Wickliffe Shreve

Richard W. Simmons

Ralph W. Simonds

Philip M. Stearns

Earl M. Scanlan & Co.,

Hayden, Stone & Co.,

Blunt Ellis & Simmons,

Baker, Simonds & Co.,

Estabrook & Co.,

Denver

New York

Chicago

Detroit

Boston

Earl

M. Scanlan

Equitable Securities

Benjamin A. Walter
*Bingham, Walter &

Corporation, N. Y. C.

Hurry, Los Angeles

Raymond D. Stitzer

Chas.

White

Harry H. White

Charles W. Warterfield

Hempstead Washburne

Cumberland Securities

Harris, Hall & Company,

Chas. B. White & Co.,

White, Hattier &

Corporation, Nashville

Chicago

Houston

Sanford, New Orleans

Financial Chronicle... Thursday, December 14,

The Commercial and

(2320)

1950

New Officers Installed

Installation of

Marks & Co.,
elected
President,
receiving badge of office from Albert T. Armitage,
Coffin & Burr, Incorporated, Boston,
retiring President

Laurence
New

Public
New

Mi.

York

Marks, Laurence
City,
the
newly

new

Forum:
Clifton W. Phalen, Vice-President, American Telephone & Telegraph Co.,
City; Joseph T. Johnson, The Milwaukee Company, Milwaukee (at the microphone);
Holgar J. Johnson, President of Institute of Life Insurance, New York City

Mrs.

and

Laurence

Marks

Johnson,

Marks,

The

Milwaukee

Company,

Laurence

Marks, Laurence M. Marks & Co., New

New

Vice-Presidents:

Russell

Keyserling,

Milwaukee,

Wis.;

Leon

H. Keyserling,

Council

Investment

Companies

Forum:

Robert

Adamex

McLellan,
Vance,
Sanders
&
Company,
Boston;
Albert
T.
Armitage,
Coffin
&
Burr,
Incorporated, Boston; Mrs. Philip McLellan, Boston

Philip

Adams Shattuck, Hausserman, Davison & Shattuck, Boston;
New York City: Charles F. Eaton, Jr., Eaton & Howard,
Vance, Sanders & Company, Boston; George E. Clark,
Securities Corporation, New York City

Mayo

Harry I. Prankard, 2nd, Lord, Abbett & Co.,

Boston;

of the Council of
the Convention

Greenshield & Co. Inc., Montreal; Walter W. Craigie, F. W.
C. Elworthy, Elworthy & Co., San Francisco; John F. Fennelly
Joseph T. Johnson, The Milwaukee Company (not in picture)

York City; Albert T. Armitage, Coffin & Burr,

Incorporated,

Chairman

Advisers, addressing

Bell,

Craigie & Co., Richmond; Mark
Glore, Forgan & Co., Chicago;

Incorporated, Boston; Hal H. Dcwar, Dewar, Robertson & Pancoast, San Antonio; John A. Prescott,
Prescott,
Wright, Snider Co., Kansas City, Mo.; Julien H. Collins, Julien Collins
& Company,
t
Chicago; Edward Hopkinson, Jr., Drexel & Co., Philadelphia; Charles S. Garland,
Alex. Brown & Sons, Baltimore, Md.

D. C.; Julien H. Collins, Julien Collins & Company, Chicago;
& Burr, Incorporated, Boston, Mass.; Laurence M. Marks,
Laurence M. Marks & Co., New York City

Advisers, Washington,
Albert T. Armitage, Coffin

Economic

Laurence

Co., New York City

Leon

Governors

Economic

Education

York

Joseph

Osgood,

Volume

172

dumber

4968

The Commercial and Financial Chronicle

(2321)

At Investment Bankers Association
Convention

Palmer

Watling, Watling, Lerchen

Mich.;

Mr.

and

Mrs.

Moore, Leonard

Charles
&

Lynch,

& Co.,
Detroit,
Lynch, Jr.,
Pittsburgh

Public

McK.

Education

Committee

Meeting

Mr. and Mrs. Raymond V. Condon, B. J. Van
Ingen
&

Co.,

Inc.,
&

Julien
son,

Frank

Collins, Julien Collins & Company, Chicago; Murray Han¬
Bankers
Association, Washington,
D.
C.;
Mrs.
Francisco; Joseph T. Johnson, The Milwaukee
Company, Milwaukee, Wis.

Investment

Weeden, San

C. Bradford, J. C. Bradford & Co.,
Nashville, Tenn.; Joseph M.
Scribner, Singer, Deane & Scribner, Pittsburgh, President of the
Exchange Firms; Earle Gatchell, Uayden, Stone
& Co., New York City; Sidney L.
Parry, Association of Stock

Association of Stock

Exchange

Firms,

Gordon L. Calvert, Investment Bankers Association,
Washington, D. C.; George F. Noyes, The Illinois
Company, Chicago; John A. Prescott, Prescott, Wright, Snider Co., Kansas City, Mo.; Charles S.
Vrtis, Glore, Forgan & Co., Chicago; Harold M. Martin, Murphey Favre, Inc., Spokane, Wash.;
Joseph L. Morris, The Robinson-Humphrey Company, Atlanta, Ga.

New

York

Chicago; James E. Roddy,
Jones, Inc., New Orleans, La.

Scharff

Vincent Reilly,
Commercial
<£ Financial Chronicle;
James K.
Miller, Dominion Securities Corporation, New York City; Andrew J.
Raymond, Dominion Securities Corporation, New York City;
.

Allen

Nix, Riter

Co., New York City

City

George R. Waldmann, Mercantile-Commerce
Laidlaw, Laidlaw & Co., New York; Paul

Bank

Trust Co.
(St. Louis), New York; Henry B.
L. Mullaney, Mullaney, Wells & Company,
Chicago;
Mullins, A. E. Masten
Company, Pittsburgh; Russell. J. Olderman, Olderman, Asbeck
& Co., Cleveland;
Dana F. Baxter, Hayden, Miller & Co., Cleveland; Richard C.
Noel,
Van Alstyne, Noel & Co., New York City

Frederic

The Commercial and Financial Chronicle...

(2322)

Thursday, December 14,

1956

November 27th to December 1st, 1950

Breakfast

Emil

Jr.

First

New York City John S

Linen

Pattberz

of the City of New

Meeting of the

Boston Corporation,
Chase National Bank

John

G. Heimerdinger,

Robert

Mr. & Mrs. Wilbur E. Hess, Fridley & Hess, Houston,
Seattle, Wash.; Robert B. Harkness, Estabrooh & Co.,

of the Investment Companies Committee

Walter, Woody & Heimerdinger, Cincinnati;
The W. C. Thornburgh Co., Cincinnati;

Thornburgh,

Stanley G. McKie, The Weil, Roth & Irving Co., Cincinnati;
Julian A. Magnus, Magnus & Company, Cincinnati

Meeting

the Federal Legislation

Tex.; Neil Ballard, Harold H. Huston & Co.,
Boston, Mass.; Mr. & Mrs. Malon C. Courts,

Courts & Co., Atlanta, Ga.

York, New York City

Breakfast Meeting

Breakfast

industrial Securities Committee

Breakfast

John Swaney, Century Distributors, Boston, Mass.; Robert B. Blyth,
National City Bank of Cleveland; Leslie J. Fahey, Fahey, Clark & Co.,
Cleveland, Ohio; Jack R. Staples, Fulton, Reid & Co., Cleveland, Ohio

Meeting

Committee

Phillips T. Barbour, The Bond Buyer, New York
City; David M. Wood, Wood, King & Dawson, New
York City; Robie New York City
L. Mitchell, Mitchell & Pershing,

the Public

Education

Committee

Brooke L. Wynkoop, Fahnestock & Co., New York City; Herbert R.
Anderson, Distributors Group, Incorporated, New York City; Edward
C. Gray, Executive Vice-President, New York Stock Exchange;
Sidney L. Parry, Association of Stock Exchange Firms, New York City

Volume 172

Number 4968

The Commercial and Financial Chronicle

Bert McDonald, McDonald &
Company, Cleve¬
land, Ohio; Edward Hopkinson, Jr., Drexel & Co.,
Philadelphia, Pa.; Harry A. McDonald, Securities
and Exchange Commission, Washington, D. C.

Edward

Miss

May

Joseph

City;

Mr.

Pa.;

Mrs. Milton

Mr.

Mrs.

G. Hulme, Glover & MacGregor, Inc., Pittsburgh,
George E. Clark, Adamex Securities Corporation,
New York City

J. A. Rayvis Company, Inc., Miami, Fla.; Ross E. King, R. H. Johnson & Co., New
Mr. & Mrs. Rupert H. Johnson, R. H. Johnson & Co., New York City; Joseph A. Rayvis,
J. A. Rayvis Company, Inc., Miami, Fla.

L. P. Smith,

York

Mr.

Mrs.

Stein

Gustave

Bros.

Mr.

Mark

Davids, Lester & Co., Los Angeles; John
Brick, Kidder, Peabody & Co., New York; William
S. Hughes, Wagenseller & Durst, Inc., Los Angeles

Mrs. Walter L.

William

Morgan, Wellington Fund, Inc., Philadelphia;
Porter, Dittmar & Company, San Antonio, Tex.; Paul
Johnston, Barron's Publishing Co., New York City

Levy, Goldman, Sachs

Boyce, Louisville,

Ky.;

& Co., New York City; Mr. & Mrs. Milton S. Trost,
Salim L. Lewis, Bear, Stearns & Co., New York City

Arnold
Curtis

Wool folk,

Central

Republic

Chicago;

James

Pigott,

Company, Chicago

Company,

Bolger & Co.,
Central Republic

Chicago; John F. Bolger, Shillinglaw,

Hollywood Beach, Fla

Patterson, Patterson, Copeland & Kendall, Inc., Chicago; Mrs. O. Paul Decker, Chicago;
Patterson, Chicago; Edward D. Jones, Edward D. Jones & Co., St. Louis, Mo.; O. Paul
Decker, American National Bank & Trust Co. of Chicago

L.
Morris,
The Robinson-Humphrey
Company,
Atlanta;
V. B. Gallager, Yarnall & Co., Philadelphia; Earle Gatchell,
Hayden, Stone & Co., New York City; Rudolf Smutny,
Salomon Bros. & Hutzler, New York City

Herbert

(2323)

Tschudy, Bank of America, N. T. & S. A., San Francisco; Russell A. Kent, Bank of America,
&
S.
A., San Francisco;
Mr. & Mrs. Frank Weeden, Wceden
& Co., San Francisco;
F. Vincent Reilly,
Commercial & Financial Chronicle, New York City

John
of

the

-Li1

Egan, First California Company, President
Security Traders Association; Paul

National

Securities and Exchange Commission,
Washington, D. C.; William A. Parker, The Parker
Corporation, Boston, Mass.
R.

Rowen,

Chronicle... Thursday, December 14, 1950

The Commercial and Financial

(2324)

Membership Attendance at New Peak

Southern

Group

Bertram M. Wilde, Janney & Co., Philadelphia; Mr. and Mrs. Alfred Rauch, Kidder, Peabody & Co.,
Philadelphia; Clyde L. Paul, Paul & Lynch, Philadelphia; Mr. and Mrs. Addison W. Arthurs,
Arthurs, Lestrange & Co., Pittsburgh; Herbert V. B. Gallager, Yarnall & Co., Philadelphia

Room

Jesse

Donnally,
Peoples National Bank, Charlottesville, Va.;
S. Hildreth; M. Carter Gunn, Scott, Horner & Mason,

Mrs. William

Inc., Lynchburg, Va.; Mrs. Jesse P. Donnally; William S. Hildreth,
Peoples National Bank, Charlottesville, Va.

Alley, A. E. Ames & Co., Inc., Ntw York City; Mrs.
McFarland, Minneapolis, Minn.; Mrs. William M. Alley;
Donald E. McFarland, Kalman & Company, Inc., Minneapolis

William

Donald

Mr. and

Goodhue,

Brooke & Co., Philadelphia; Francis
Bullock, Philadelphia; Mr. and Mrs. Thomas
Bioren & Co., Philadelphia

Mrs. Gerald P. Kynett,

Calvin

111.,

Krug,

if
%%,

Mr. and

Mrs.

Mrs. James

Edward

Hall,

Harris,

Hall

Company,

Chicago;

Mr.

and

Mrs.

George K. Coggeshall, Schoellkopf, Hutton <£ Pomeroy, Inc., New
York City; Mr. and Mrs. J. Emerson Thors, Kuhn, Loeb & Co.,
New York City; Mr. and Mr3. J. Earle Jardine, Jr.,
William R. Staats Co., Los Angeles

Mr. and
Mr. and Mrs. William Atwill, Jr.,
Fla.

Richard

Dominick

Cranford, Atlantic National Bank of Jacksonville, Jacksonville, Fla.;

George Van Hart, Salomon Bros. & Hutzler, New York City;
Atwill and Company, Miami Beach,

Herbert

Shaw,

Vance,

Mrs. Betty

Sanders

Dunn,

Company,

Auchincloss,

New

York

City;

A. Newby, T. Nelson O'Rourke & Co., Dayton Beach, Fla.;
Stalker, Kidder, Peabody <ft Co., New York City;
Mr. and Mrs. Edward E. Hale, Vance, Sanders & Company, Boston
Mr. and Mrs. Alfred

Parker

Redpath,

Washington,

C.;

Bayard

Dominick,

II,

New York City; Edward K. Dunn, Robert Garrett & Sons, Baltimore, Md.;
Robertson, Scott & Stringfellow, Richmond, Va.; Mr. and Mrs. Mark Sullivan, Jr.,
Auchincloss, Parker & Redpath, Washington, D. C.

Dominick,

Walter S.

and

Mr.

New

Mrs.

York

Walston, Hoffman & Goodwin,
Shields & Company, New York
and Mrs. J. Paul Woollomes, Wulff, Hansen & Co.,
Albert C. Purkiss,
Eugene P. Barry,

City;

City; Mr.

San

Francisco

Voiume 172

Number 4968

...

The Commercial and Financial Chronicle

Business

Mr.

Mrs. Maurice

Lutkin, guests;

Mr.

William

Mrs.

Mrs. Henry B. Laidlaw, Laidlau) <fi Co., New York
Lucke, Laidlaw & Co., New York City

City;

P. Sharpe, Mercantile-Commerce Bank
& Trust Company, St.
Louis, Mo.;
Mrs. Hal H.
Dewar, San Antonio, Tex.; John A. Prescott, Prescott, Wright, Snider Co., Kansas City, Mo.; AndrewS.
t,
Mills, Newhard, Cook & Co., St. llouis, Mo.; Festus J. Krebs, A"
Metropolitan St. Louis Co., St. Louis, Mo.
'

W.lfXVI

VMMn

»»

Robert
J.

Clark, Calvin Bullock, New York City; Mr. &
Mrs.
Posllethwaite, Irving Lundborg & Co., San Francisco;
MacBain, Mellon National Bank & Trust Co., Pittsburgh;
Robert Stevenson, 3rd, Invetment Bankers Association, Chicago

Mr. and Mrs. Anthony E. Tomasic, Thomas &

Mrs. Thomas J. Reis, Seasongood

Company, Pittsburgh;

& Mayer, Cincinnati, Ohio

Carter

Gunn,
S.

Scott, Horner & Mason, Inc., Lynchburg, Va.; Mr. and Mrs. Edgar
& Co., Inc., New York City; Mr. and Mrs. Edwin B. Horner.
Scott, Horner & Mason, Inc., Lynchburg, Va,

Loftus,

Dickson

Hughes, Lord, Abbett & Co., New York City; Mrs. W. Guy
Redman; Mrs. Albert R. Hughes; W. Guy Redman,
A. G. Edwards & Sons, St. Louis

Mr. and

Raymond D. Stitzer, Equitable Securities Corporation, New York City; Robert J. Lewis. Estabrook
Co., New York City; Mr. & Mrs. Ernest W. Borkland, Jr., Tucker, Anthony & Co., New York City;
Joseph W. Dixon, American Securities Corporation, New York City

Albert R.

Russell

Hugh

Meetings Heavily Attended

Mr. &

Frank

(2325)

Elvin

K. Pepper, /. M. Simon
Co., St. Louis, Mo.; Mrs. John H.
Edwards, Oklahoma City, Okla.; J. Cliff
Rahel,
W achob-Bender
Corporation, Omaha, Neb.; John H. Edwards, R. J. Edwards, Inc.,

Oklahoma City, Okla.; Mark A. Lucas, Jr., Lucas, Eisen & Waeckerle,
Inc., Kansas City, Mo.; Festus J. Krebs, Metropolitan St. Louis Co.,
St. Louis, Mo.

Mr. and
and

Mrs.

James

Thomas

Julian

Tindall, J. W. Tindall & Co., Atlanta; Mr.
Hancock, Blackstock & Co., Atlanta

Hancock,

Cleaver, Good body & Co., New York City; Mr. and Mrs.
Larkin, Goodbody & Co., New York City; Kurt H.
New
York
Hanseatic
Corporation, New York
City;
A. Schapiro, M. A. Schapiro & Co., Inc., New York City
A.

Grunebaum,
Morris

Roy

The Commercial and Financial

(2326)

Chronicle... Thursday, December 14, 1950

Breaking Away from Business of Day

William G. Hobbs, Jr., Russ & Company, Inc., San Antonio;
Mrs.

Monroe

Mrs.

Mrs. J. Marvin Moreland, Galveston, Tex.;

Worcester, Mass.; S. Whitney Bradley, Eaton & Howard,
Boston, Mass.; Mrs. Charles J. Fleming, Worcester, Mass.; Mr. and Mrs. Edward
Russ & Company, Inc., San Antonio, Tex.
Paul

New

Hanrahan,

York

Poole, New York City; Mrs. George R. Waldmann,
City; Mrs. John J. Kenny, New York City;
Dick & Merle-Smith, New York City

Mrs. Alfred J. Ross,

Incorporated,
D. Muir,

Mrs. Wallace M.
Portland, Oregon;
»--*«—•
Mrs.

Russell

Siefert,

Stern

Brothers

Co.,

Horning, Stifel, Nicolaus & Company, Incorporated, St.
Mr. & Mrs. Jerome F. Tegeler, Dempsey-Tegeler & Co., St.
Louis; Robert A. Podesta, Cruttenden & Co., Chicago

Louis;

Jones; Gerald B. West, Stone & Webster Securities Corporation, New

McCurdy,

Philadelphia;

Mrs.

June

Mrs.

Frederick

New

York

City;

Jones,

Straus,

William

&
&

Ralph Chapman, Farwell, Chapman & Co., Chicago; Mrs. Ralph E.

Phillips, Los Angeles;
T.
-r Jerrold Bryce, Clark, Dodge & Co.,
-«■
New York; Mrs. Robert E. Broome, New York City; Mr. & Mrs.
Robert H. Craft, Guaranty Trust Company, New York City

Chicago; Mrs. and Mr. George M. Gregory, Gregory & Son, Incorporated,
H. Gregory, Jr., Bonner & Gregory, New York City; Mrs. Joseph W.
Sener, Baltimore, Maryland

(Standing):
William Cusack, The Keystone Company of Boston,
Mass.; Don E. Arries, D. E. Arries & Co., Tampa, Fla.;
(Seated):
Mrs. William Cusack; Norman C. Ray, Kay, Richards
& Co., Pittsburgh; Mr. and Mrs. Joseph H. Fauset,
Fauset, Steele & Co., Pittsburgh

Boston,

York City; Clarence E.

White, Weld & Co., New York City; Mrs. Ernest W. Borkland, Jr.

Mrs. «
Henry "
R. "■"
Hallowell, Philadelphia; Mr.
"
Ewing T. Boles, The Ohio Company, Columbus, Ohio; Mr.
Mrs. Henry G. Riter, 3rd, Riter & Co., New York City

Blewer, Heitner & Glynn, St. Louis; Bert H. Horning,
St. Louis; Andrew S. Mills, Newhard, Cook & Co., St.

Bert

Jr., Tucker, Anthony & Co., New York City; Graham Jones, Cooley & Company,
Raymond D. Stitzer, Equitable Securities Corporation, New York City; Mrs. Graham

W. Borkland,

Hartford, Conn.;

Goldsmith,

Kansas City, Mo.; Joseph A. Glynn, Jr.,
Stifel, Nicolaus & Company, Incorporated,
Louis; Julius W. Reinholdt, Jr., Reinholdt
&
Gardner, St. Louis, Mo.; (Seated): Mrs. Russell E. Siefert, Kansas City, Mo.; Mr. and Mrs.
Richard Morey, Jr., A. G. Edwards & Sons, St. Louis; Mrs. Andrew S. Mills; Benjamin F. Frick,
Jr., Stix & Co., St. Louis; James M. Canavan, Smith, Moore & Co., St. Louis;
Mrs. Julius W. Reinholdt, Jr.
(Standing)

Ernest

Mrs.

Hal

Dewar,

San

Antonio,

Tex.;

Paris

Scott

Russell,

Jr.,.

Glore, Forgan & Co., New York City; Joseph W. Sener, John C. Legg

Company, Baltimore, Md.; Arthur N. McGeogh, The Milwaukee
Company, Milwaukee, Wis.; Mrs. Douglas G. Bonner, New York
City; Hal H. Dewar, Dewar, Robertson & Pancoast, San Antonio,
Tex.; Douglas G. Bonner, Bonner & Gregory, New York City
&

Volume 172

Number 4063

The Commercial and Financial Chronicle

(2327)

Enjoying Surf and Pool

Wilson Arnold,
&

Leach,

Weil & Arnold, New Orleans; Mrs. Rucker Agee; Mortimer Cohen, Sterne, Agee
Montgomery, Ala.; Rucker A gee, Sterne, Agee & Leach, Birmingham, Ala.;
Cohen, Montgomery, Ala.; Mrs. H. Wilson Arnold, New Orleans

Francis
du

Mrs. Mortimer

Elvin

Popper, J. M. Simon <£ Co., St. Louis, Mo.; Mr. and Mrs.
B. Noll, Kebbon, McCormick & Co., Chicago;
Mrs. Carman G. King, Toronto

Gerhard

Mrs.

George
Mrs.

F. Noyes,
Dudley C.
Carl

Ray, Kay, Richards & Co., Pittsburgh; Mr. & Mrs. Wilbur E. Johnson,
Pittsburgh, Pa.; Mrs. Addison W. Arthurs, Pittsburgh, Pa.; Mr. & Mrs.
Hemphill, Noyes, Graham, Parsons & CoNew York City; Mrs. Nathan
Pittsburgh; Lewis B. Harder, Harris, Upham & Co., New York City; Nathan K.
Kay, Richards & Co., Pittsburgh, Pa.
C.

Norman

Johnson,

Emerson,

Pont

Courts

Adams
<ft

Truslow, New York Curb Exchange; Mr. & Mrs. Charles L. Hewitt, Francis I.
New York City; Mrs. Francis Adams Truslow; Mr. & Mrs. Malon C. Courts,
Atlanta, Ga.; Robert E. Broome, Guaranty Trust Company, New York City; James
C. Warren, A. M. Kidder & Co., New York City

Co.,

Chicago; Mrs. Carl McGIone,
Chicago;
Smith, Chicago; Carl McGIone,
& Co., Inc., Chicago

Edward B. Hall, Harris, Hall & Company, Chicago; Mrs. Richard
Rand, New York; Mrs. Joseph H. King, New York; William
P. King, King, Quirk & Co., Incorporated, New York

McGIone

Birthday
7

Johnson &
Willard I.
K. Parker,
Parker,

party
P

given

Lonely

honor of George

Hearts

Club

York

(still

celebrating

New

his

Martin,

International Bank,

39th)

•Houywopi

Charles

&)hisrk/waS

Harris Trust & Savings Bank, Chicago; F. D.
National Bank & Trust Co., Kansas City "" * rj

Carey,

Farrell, City

Carey;

cisco;
William H.
(Seated): Edward C.
Chicago;

The Northern Trust Company, New York, Mrs-.
Can
Lester H. Empey, American Trust Company, San

D. McGrew,

Clark,

Merrill,

Turben

Co.,

pv™.

Fran¬

Cleveland;

George, Harriman Ripley & Co., Incorporated,

John M. Maxwell, The Northern Trust
Capt. Frank Pike

Company, Chicago;

fftr swB!fke' "k

sSftrs

M.',

7R.chntond, V..;Newark, N. J.;Arthur R Harper, Boatmen9s
(Stand.,,):
R.
Union Trust Company,
W. Paul
Drexel & Co., Philadelphia
U™n Trust Bank of St. Newark,William W. King, Rockland-Atlas s
Company, Louis; N. J.; T. Paul Harper, Boatmen
National
Viatic,

ixivinuuuu,

▼

laiiuuift /

•

r»»

Edward G. Hopkinson, Jr.,

National

Bank,

Boston

(2328)

The Commercial and Financial Chronicle... Thursday, December
14,

It's

1956

"lint Daisy"
•*

mWWk..

,!h

..,m

■

(Standing): Harry A. Trees, Paul H. Davis & Co., Chicago; Andrew S. Mills,
Newhard, Cook & Co.,
St. Louis; Joseph Ludin, Dillon, Read & Co.
Inc., New York City; S. E. Johanigman, The Milwaukee
Company, Chicago; (Seated): John M. Maxwell, Northern Trust Company, Chicago; Lester H.
Empey,
American Trust Company, San Francisco;
Walter W. Craigie, F. W. Craigie & Co., Richmond;
John F. Egan, first California
Company, San Francisco

Mr. and

Tex.;

Mrs. Arnold J. Kocurek, Rauscher, Pierce &
Co., San Antonio,
Mark A. Lucas, Jr., Lucas, Eisen & Waeckerle, Inc., Kansas
Mr. and Mrs. William N. Edwards, William N.

City, Mo.;

Edwards

St.

Mortimer

Cohen,

Sterne,

Co., Ft. Worth,

Louis

Agee

Room—Celebrating

Leach,

its

34th

Francis P. Gallagher, Kidder, Peabody &
John Brick, Kidder, Peabody & Co.,

Montgomery,

Anniversary

Ala.;

Atlanta, Ga.;
Cohen; Hugh D. Carter, Jr., Courts & Co., Atlanta; Joseph W.
Sener, John C. Legg & Company, Baltimore; Mrs. Sidney J. Mohr, Jr.,
Montgomery, Alabama

Jl?r* a,nt* Mrs. John J. Kenny, J. J. Kenny

Co., New York
Co., New York
New York City

City;
City;

Henry

Wallace Cohu, Cohu <£ Co., New York City; Mr. and Mrs.
C.
Noel,
Van
Alstyne, Noel
&
Co., New
York
City;
C. Warren, A. M. Kidder & Co., New York City

Richard

James

Tex.

Waldo W. Mallory, Clement A. Evans & Company, Inc.,

Mrs.

(Standing): Leslie J. Fahey, Fahey, Clark & Co., Cleveland; Reginald M. Schmidt, Blyth & Co., Inc.,
York City; Charles C. Glavin, First Boston Corp., New York
City;- (Seated): James E. Day,
Stock Exchange,
Chicago; Rudolf Smutny, Salomon Bros. & Hutzler, New York City;
Albert C. Purkiss, Walston, Hoffman & Goodwin, New York City;
Joseph L. Morris,
The Robinson-Humphrey Company, Atlanta

New

Midwest

Duffy's

Tavern;

proprietors:

Mr. and Mrs. Gerald P. Peters, Peters, Writer &
Christensen, Inc.,
Denver, Colo.; E. Warren Willard, Boettcher and Company, Denver,
Colo.; Harold D. Writer, Peters, Writer & Christensen, Inc., Denver;

Mr.

and

Mrs.

Byron

Hastings,

The

Parker

Corporation,

Chicago

Ralph W. Davis, Louis J. Cross, Harry
McEwan, Paul H. Davis & Co., Chicago

Mr. and
S.

Mrs. Webster

Descartes,

Mr. and

Mrs.

Trees

and

George

E. Pullen, National City Bank of New York?
Government
Development
Puerto
Bank,
Rico;
Polian, Smith, Polian & Company,

Harold O.

Omaha, Neb.

Volume

172

Number 4968

The Commercial and Financial Chronicle

(2329)

Relax at Close of Business Sessions

Robert
&

Mrs.

Harter, Sutro & Co., San Francisco; Mr.
J. Pattberg, Jr., First Boston Corp.,
New York City

Emil

Kelton E. White, G. H.

John A. Prescott, Prescott, Wright, Snider Co., Kansas City, Mo.; Mr. & Mrs. Edwin B. Horner,
Scott, Horner & Mason, Inc., Lynchburg, Va.; Mr. & Mrs. Claude W. Wilhide, Baker, Watts & Co.,
Baltimore, Md.; M. Carter Gunn, Scoti, Horner & Mason, Inc., Lynchburg, Va.

Walker & Co., St. Louis, Mo.; Mr. and Mrs. Richard Merey, Jr., A. G.

Edwards

Sons, St. Louis; Miss Mary R. Lincoln, Investment Bankers Association, Chicago;
Cyrus B.
Aldinger, Fordon, Aldinger & Co., Detroit; Mrs. W. Guy Redman; Mrs. Kelton E. White, W. Guy

& Sons, Inc.,

Redman, A. G. Edwards & Sons, St. Louis; Mr. and Mrs. Harry Theis, Albert Theis
St. Louis; Ralph Fordon, Fordon, Aldinger & Co., Detroit, Mich.

James

Mr.

cago;

M. Pigott, Central Republic Company, Chi¬
Curtis B. Woolfolk, Central Republic Company,
Chicago; Robert B. Whittaker, F. S. Moseley & Co.,
Chicago

and

Mrs.

Bcrk'.and,

William

Jr.,

Tucker,

Morton,
First

Mrs.

Edward
DeHaven

B.
&

H. Barret, Barret, Fitch & Co., Inc., Kansas
City, Mo.; Mr. and Mrs. Byron Hastings,
The Parker Corporation, Chicago

Gordon

Crouter, DeHaven & Townsend, Crouter &. Bodine, Philadelphia; Mr. & Mrs.
R. S. Dickson & Co., Inc., Charlotte, N. C.; Mr. & Mrs. Walter T. DeHaven,
Townsend, Crouter & Bodine, Philadelphia; Mr. & Mrs. Richard A. Bigger, R. S.
Dickson & Co., Inc., Charlotte, N. C.

Wulbern,

Co., Inc., New York City; Mr. and Mrs. Ernest
New York City; Mr. and Mrs. David H. Callaway, Jr.,
Michigan Corporation, New York City

W. H.

Anthony

Mr.

John
1

Morton &

Co.,

Mr. and Mrs.
York

George Geyer, Geyer & Co., Inc., New
City, and Master Terry Geyer

Thomas

Porter,

Dallas;

Beckett,

First

Southwest

Company,

Dallas;

William

Dittmar & Company, San Antonio; Mrs. Thomas Beckett,
Mr. and Mrs. John H. Edwards, R. J. Edwards,
Inc.,
Oklahoma City, Okla.; William G. Hobbs, Jr.,
Russ & Company, Inc., San Antonio, Tex.

Benjamin A. Walter, Los Angeles; Mr. and Mrs. Norman B.
Ward, Norman Ward & Co., Pittburgh; Mrs. Samuel K. Cunningham,
Pittsburgh
Mrs.

T. Johnson, The Milwaukee Company, Milwaukee, Wis.;
H. Fulton, National Association of Securities Dealers, Inc.,
Washington, D. C.; Mr. and Mrs. Ralph E. Phillips, Dean Witter
&
Co.,
Los
Angeles;
Mr. and Mrs. William
K. Barclay, Jr.,
Stein Bros. <6 Boyce, Philadelphia

Joseph

Wallace

The Commercial

(2330)

and Financial Chronicle...

Thursday, December 14, 1950

Golfers Take to the Links

Edward

McGrew,

Northern

Trust

Company,

New

York

City;

Farrell, City National Bank & Trust Company, Kansas City,
Mo.; Ernest J. Altgelt, Jr., Harris Trust & Savings Bank, New
York City; W. Neal Fulkerson, Jr., Bankers Trust Company, New
York City, William H. Morton, W. H. Morton & Co., Inc.,
New York City
F.

Dalton

Couig, Hirsch

Paul L. Mullaney,
Daniel T. Pierce, Jr., Hirsch
V. Poole, Geo. B. Gibbons &

& Co., New York City;

Mullaney, Wells & Company, Chicago;
<fc

New

Co.,

York

Monroe

City;

Mrs.

York

Peoples National Bank, Charlottesville, Va.;
Robert Garrett &
Sons,
Baltimore;
Bayard
Dominick, 2nd, Dominicft & ~Dominick, New York City;
Edward H. Robinson, Schwabacher & Co., New York City

Edward

Mr.

Donnally,

Dunn,

York City; Mrs. C. Prevost Boyce,
Smutny, Salomon Bros. & Hutzler, New
City; Mrs. V. Theodore Low, New York City;
Mrs. F. Brian Reuter, Pittsburgh, Pa.
Nelson,

Md.;

New

Rudolf

Co., Chicago;

Co., Inc., Chicago;
Bank, New

of America, N.

Hanrahan

Chas.

Edward
and

Mrs.

Anderson, Anderson <ft Strudwick, Richmond, Va.; Mr.
Chapin S. Newhard, Newhard, Cook & Co., St. Louis;
Markus, Smith, Barney & Co., Philadelphia, Pa.

George A. Newton, G. H. Walker & Co., St. Louis; George L. Martin, International
York; John G. Heimerdinger, Walter, Woody & Heimerdinger, Cincinnati

Mrs.

Benjamin

Johnston,

'■

Fleming,

Gerald
Mrs.

Hughes,

William C.

Antonio, Tex.; C. Comstock Clayton,

Peters, Peters, Writer & Christensen,

William
I.

Co., Worcester, Mass.;

Securities Corp., Boston; Webster E.
National City Bank of New York

Clayton

Norbert W.

Mr.

T. & S. A., San Francisco;

Porter, Dittmar & Company, San

C. Lillis, Bear, Stearns <fi Co., New York City;
Charles
Lynch, Jr., Moore, Leonard & Lynch, Pittsburgh, Pa.; Gustave
Goldman, Sachs <£ Co., New York City; V. Theodore Low,
Bear, Stearns & Co., New York City

L. Levy,

Hagemann, G. H. Walker & Co., St. Louis, Mo.; Elmer G. Hassman, A. G.
Mrs. George L. Martin, New York; Raymond V. Condon, B. J. Van Ingen &

Bank

Hampton, Bell, Gouinlock & Company, Ltd., Toronto;
Kent, Bank of America, N. T. & S. A., San Francisco;
John McG. Dalenz, Calvin Bullock, New York City; Albert C. Purkiss,
Walston, Hoffman & Goodwin, New York City
R.

Russell

McK.

Mrs. E. Kenneth

Becker &

Tschudy,

Arnold

Percy

Donald

Company, Inc., New York City

Jesse

Arthur

Baltimore,

Los

Angeles;

Mr.

Pullen,

Inc., Denver,
and Mrs.

Prankard, 2nd, Lord, Abbett & Co., New

York City

Bingham, Walter & Hurry, Los Angeles; Mr. & Mrs.
Wood, Gundy & Co., Inc., New York City; Harcourt Vernon,
Wood, Gundy & Co., Inc., Chicago

A. Walter,

■

Edward S.

Volume 172

Number 4968

The Commercial and Financial Chronicle

With

Mr. & Mrs. John P. Labouisse,
&

Howard, Weil, Labouisse, Friedrichs
Company, New Orleans; Mr. & Mrs. Alfred Stalker,
Kidder, Peabody & Co., New York City

(2331)

Competition Keen

Mr. and Mrs. Cornelius Shields, Shields & Company, New York City;
John Quinn, guest; Mr. and Mrs. Macrae Sykes, Shields & Company,
New York City

Rupert H. Johnson, R. H. Johnson & Co., New York City; Albert R.
Hughes, Lord, Abbett & Co., New York City; Thomas B. Krug,
Bioren & Co., Philadelphia

James

Palmer

Auchincloss

Mr.

& Mrs. Richard Morey, Jr., A. G. Edwards & Sons, St Louis,
Mo.; Mr. & Mrs. Russell E. Siefert, Stern Brothers & Co.,
Kansas City, Mo.

Mrs.

Company,

St. Louis;
R. I.

George

Channer,

George F. Noyes, The Illinois Company, Chicago; Alden H. Little, Investment
Association, Chicago; Mr. & Mrs. John S. Loomis, The Illinois Company, Chicago

Mr.

Chicago;

Mr. and Mrs. E. Kenneth Hagemann, G. H. Walker & Co.,
Gilbert M. Mears, G. H. Walker & Co., Providence,

Jr.,

Channer

Bankers

Securities

Warren

Mrs.

Claude

W. Wilhide,

New

Condon, Chicago;
York

City;

Baker,

Watts

Co., Baltimore;

& Kraus, Cleveland, Ohio; Mrs. Dana F. Baxter, Cleveland; Mrs.
Dana F. Baxter, Hayden, Miller & Co., Cleveland;* Mrs. James G.
Olderman, Olderman, Asbeck & Co., Cleveland; Mrs. Warren

D. Williams, Ball, Burge

Raymond V.
Couffer

Leroy A. Wilbur, Stein Bros. & Boyce, Baltimore; Robert L. Harter,
Sutro & Co., San Francisco

Russell J.

WilUams, Cleveland

The Commercial and Financial

(2332)

Chronicle

...

Thursday, December 14, 1950

Sports Offer Diversion at Close of Business

Ernest

Mrs.

Borkland, Jr., Tucker, Anthony & Co., New York City; Mr. & Mrs. David B. McElroy,
& Co. Incorporated, New York City; Mrs. Wright Duryea, New York City; Mrs.
Ernest W. Borkland, Jr.; Wright Duryea, Glore, Forgan & Co., New York City

G. Duffy, Blyth & Co., Inc., New York City; Harold H.
Sherburne, Bacon, Whipple & Co., New York City; Elizabeth Eyre,
guest; Edward Glassmeyer, Blyth & Co., Inc., New York City
Sidney

Rauch, Philadelphia; Mrs. D. Dean McCormick, Chicago;
M. Wilde, Janney & Co., Philadelphia;
Mrs. John C. Hagan, Jr., Richmond, Va.

Bertram

Robinson,

Ga.; Alexander Yearley, IV,
The Robinson-Humphrey Company,
York City; Henry B. Tompkins, The Robinson-Humphrey
W. Courts, Courts & Co., Atlanta; Mrs. Alexander Yearlev, IV, Atlanta

Atlanta,

Mrs. Gustave L. Levy, New

Company, Atlanta; Richard

S. B. Smith, The Northern Trust Company of Chicago; Mrs. Joseph
R. Neuhaus, Houston, Texas; Mr. & Mrs. Hal H. Dewar, Dewar,
Robertson & Pancoast, San Antonio, Texas

Mr.
New

Mrs.

York

Ernest

City;

Mr.

Los

Co.,

Mrs.

Angeles;

New

Robert B. Blyth, National City Bank of Cleveland; George B. Kneass,
Philadelphia National Bank, Philadelphia, Pa.; Dillman A. Rash,
J. J. B. Hilliard & Son, Louisville, Ky.; Jack R. Staples,
Fulton, Reid & Co., Cleveland

Walker, New York City; Mr. & Mrs. Lewis J. Whitney, Jr., Dempsey-Tegeler & Co.,
Frederick W. Straus, Straus & Blosser, Chicago; Graham Walker, Joseph McManus &

York

City;

(in

front)

Mrs.

Eugene

Gregory,

Altgelt,
&

Graham

Mrs.

Mrs. Joseph W. Dixon, New York City; Seabourn R. Livingstone, S. R. Livingstone & Co., Detroit,
Mich.; Peter I. B. Lavan, American Securities Corporation, New York City; Hempstead Washburne,
Harris, Hall &
Company, Chicago;
Emmett F. Connely, American Securities Corporation, New
York City; Mrs. Hempstead Washburne

Mrs. Alfred

Roby

Atlanta, Ga.;

Morgan

Jr.,

Harris

Trust

George E. Clark,
New York City

Corporation,

& Savings Bank,
Adamex Securities

Mrs.

Jr.,

Salim

Jacksonville,

Truchold,
New

Ycrk

Lewis,

Fla.;

New

York

City

and

Mrs.

William

City

New

Howard

York City; Mrs. James A. Cranford,
Finney,
Jr.,
Bear,
Stearns &
Co.,
York City

New

Volume

172

Number 4968

The Commercial and Financial

Chronicle

(2333)

Continued from page 44

RATCLIFFE,
Bache

In Attendance at IBA Convention
Mclaughlin, edward m.
Paine, Webber, Jackson &
New

Blair

William

PHILIP*

The

Vance, Sanders & Company, Boston

MEAD, W.

Mead,

CARROLL*

Miller & Co., Baltimore

MEANS,

JAMES

.'Courts

W.*

Central

Company,

Cleveland

PACE,

Bank

REFSNES,

Week,

MEYER, Jr., LOUIS
Stern, Prank & Meyer,

Reinholdt

MEYER.

Jr.,

Hirsch

ME2GER,
~G." C.

Los

Angeles

PARISH, II,
Carl

MAURICE*

Co., New York

Co.,

New

York

miller.

glenn

Kay,
,>;■

Co., Cleveland

MILLER, JAMES
:

The

Dominion

New

•

NATHAN

Richards

PARKER,

Otis &

The

New

Corporation,

Boston

REX,

MINOR,
;

Northwest

Exchange Firms,

RITER,

Corporation,

EDWARD

Chicago

St. Louis

Company,

Boston

E.,

York

New

ROB1E

New York

PERDUN, WINFIELD H.
Smith, Barney & Co., New York

MOHR, Jr., SIDNEY J.*
;
*
Thornton, Mohr & Co., Montgomery

MONTAYNE.

PETERS.
Peters,

Miami

CARLETON

Daily News, Miami

MONTGOMERY,
: Associated

HARRY

Press,

New

Galveston

MOREY,
A.

Edwards

Christensen,

Sons, St. Louis £

Securities

Inc.,

ROSS, ALFRED
Dick

Jr., C. GERARD*
John C. Legg &
Company, Baltimore

ROWE,

CLIFTON

American

Telegraph

Co.,

PHILLIPS,
Samuel

EDWARD
K.

J.*

PHILLIPS,

morgan,
Stroud

ii,
&

william

Dean

b.*

Company,

Emanuel,

Incorporated,

Philadelphia
MORRIS,
F.

Yantis

Hirsch

Co., Incorporated,

•

{

RYAN,

JOSEPH L.

PIGOTT,

[

FRANK

Lehman

MORSE.

Brothers, New York

WALTER

Lehman

morton,
W.

MOSS,

Morton

Co., Inc., New York

POOLE,
Geo,

JAMES W.

Preston,

Moss

Co.,

[

Los

Angeles
MUDGE,

International

MUIR,

Bank,

Russ &

York

New

Company,

Inc., San Antonio

ARTHUR*

Nelson

St. Louis

Simmons, Chicago

Walker &

STRINGFELLOW,

ROBERT

Co., New York
STUTZ. CARL N.
The White-Phillips
Company, Inc.,
SULLIVAN, JOHN J.
Bosworth, Sullivan & Co., Denver

SULLIVAN. Jr., MARK*
Auchincloss, Parker & Redpath,

Davenport

Research

DAVID

Washington

& Co., Incorporated,

SULLIVAN, PEGGY
Investment Bankers

SMITH,

SYKES, MACRAE*
Shields

Association,

Ripley & Co.,

Incorporated,

New York

Securities & Research

Corporation,
SMITH, J.

Co., San Francisco

Weeden

Company,

TAYLOR, HOWARD L.
Taylor and Company,

Continued

W.*
Pressprich: & Co.,-New York

" ^

Established 1888

Co.,

City
Jr.,JREGINALD

•>.

N.*.

Underwriters and Distributors of Public

'
>

Seattle-First National Bank, Seattle

A.
&

Co.,

Daytona

Beach

PULLEN,
The

WEBSTER

National

E.*

Utility,

Industrial, Railroad, Municipal Securities

City Bank of New York,

New York
NEWCOMB.

MACDONALI)

Federal -Land

Banks, New York

NEWHARD.

Intermediate
■

Credit

S.*

Co., St. Louis

NIX,

ALLEN

Riter

DONALD

Jr.,

Commerce,

Chicago

Co.,

PUTNAM, GEORGE

Van

RICHARD

Alstyne,

NORTH.

Noel & Co., New York

Paine,

McCormick & Co., Chicago

LUDLOW F.*

Robert

New York Stock

Webber, Jackson & Curtis,

New York Curb

QUIST, LEO L.
E.

Baird

RAFFENSPERGER.

Philadelphia-Baltimore Stock Exchange

Co., St. Paul

WILLI AH

Raffensperger, Hughes & Co.,
Incorporated,

Co., Incorporated,

Milwaukee

Exchange

Exchange (Assoc.)

Wood

B.*

•

Members

Davenport

Chicago

C.*

GERHARD

Kebbon,

Distributors, Inc., Boston

Quail & Co.,

Harold
NOLL.

Fund

QUAIL, JOHN J.

QUIGG, JAMES
York

New

NOEL,

Equipment Trust Certificates.

(

New York

GEORGE

Journal

Services, Inc.,

PURKISS, ALBERT C.*
Walston, Hoffman & Goodwin,

Putnam

NICHOLS,

and

W.*

Diversified

Minneapolis

CHAPIN

Walker &

ROBERT

Investors

Newhard, Cook & Co., St. Louis
NEWTON.

PURCELL,

RAGGIO,

Indianapolis

JOHN

Raggio, Reed & Co., San Francisco
NOYES.

The

GEORGE

Illinois

F.*

Company,

RAHEL.

Chicago

OLDERMAN,. RUSSEIL J.
-

Olderman,. Asbeck & Co., Cleveland

OSGOOD,

ROBERT

L.*

Vance, Sanders & Company, Boston

RAND.
Rand

*Denotes Mr. and Mrs.

Co.,

Sachs

York

;

L.*
&

DILLMAN A.*

J. -J-.- B.

1500 Walnut St.

N.*

New

HARLEY

Goldman,

Philadelphia

New York

Corporation, Omaha *

RICHARD

RANKIN.

RASH.
.

CLIFF

Wachob-Bender

Co.,

Philadelphia

Hilliard & Son, Louisville

Hills

ROBERT L.
Lehman Brothers, New York

Drexel & Co.
?

Beverly

THAYER,

New York

Curtis,

Philadelphia

Co., Inc.,

York

Bank

TEGELER, JEROME F.*
Dempsey.Tegeler & Co., St. Louis

RAYMOND
&

New

National

Minneapolis, Minneapolis

Co., Denver
National

TALBOT, O. JACK*
Northwestern

ELWOOD

Association,

Chicago

SWANEY, JOHN
Century Distributors, Boston

Gordon Graves &

Providence

Co.,

Company, San Antonio

PROSSER, MALCOLM E.*
.

O'Rourke

PRITCHARD, HARRY

BETTY

Ellis

Kebbon, McCormick & Co., Chicago

Hallgarten & Co., New York
MRS.

PRESSPRICH,
R.

NEWBORG, LEONARD D.
i.-

Company of Buffalo,

STRADER, LUDWELL A.
Strader, Taylor & Co., Inc., Lynchburg

RICHARD

SMITH, DUDLEY C.*
Investment Bankers

SCHLEMMER, HAROLD P.

Co.,

Kansas
,

NEWBY.

Trust

Cleveland

Inc.,

■

NEUHAUS; JOSEPH R.*
Underwood. Neuhaus & Co., Houston

■

Corporation,

The Marine

SMITH, G. SELLERS

Schwabacher &

Securities

New York

G. EDWARD
Loewi & Co., Milwaukee

M.*
&

Association,

Co.,

PRESCOTT, JOHN A.
Prescott, Wright, Snider

Company, New York

NELSON, Jr., EDWARD H.
Clement A. Evans & Company,

Atlanta

WILLIAM

PRESCOTT, EDWARD P.* |
Prescott, Rawley, Shepard
>■

;

EARL
Scanlan

C.*

STONE, Jr., FRED D.*

SLEZAK,

Co., New York

Boston

Stern. Lauer & Co., New York
and

the City

Company, Inc.,

PRATT. ALBERT*,'
Paine, Webber, Jackson

NAUMBURG. CARL T.

Burnham

2nd, HARRY I.*
Lord, Abbett & Co., New York

MULLINS, FREDERIC P.
A. E. Masten & Company, Pittsburgh

Equitable
New York

Company, New York

Harriman, Ripley

PRANKARD.

Mullaney, Wells & Company, Chicago

NELSON.

STITZER, RAYMOND

POSTLETIIWAITE, J. RUSSELL*
Irving Lundborg & Co., San Francisco

D.*

mullaney, paul l.
4

Simon

Dittmar

EDWARD

Earl

Bankers

V.*

Gibbons

PORTER,
LOUIS

SCANLAN,

Chicago

New York

SCHAPIRO, MORRIS A.*
M. A. Schapiro & Co., Inc., New York

POPPER. ELVIN K.

FRANCIS*
Moulton & Company,

Investment

Co.,

New York

Boston

MOULTON,
R.

MONROE
B.

WICKLIFFE*

Harriman

POLIAN, HAROLD O.*
Smith, Polian & Company, Omaha

william h.*

Shepard

HAROLD

Corporation, New York

SAVARD, J. ERNEST
Savard, Hodgson & Co., Inc., Montreal

PODESTA, ROBERT A.
Cruttenden & Co., Chicago

E.*

Brothers, New York

STEVENSON, GETHRYN

Chicago

Company, Chicago

Bank

STEPHENSON, F. KENNETH
Goldman, Sachs & Co., New York

•

National Securities

PETER, CHARLES
San Francisco Examiner, San

PIPER, Jr., HARRY C.
Piper, Jaffray & Hopwood, Minneapolis

H.*

National

York, New York

STEVENSON, 3rd, ROBERT

ST.

Central Republic

Robinson-Humphrey Company,

Chase

New

SIMONSON, Jr., HENRY J.

Commission,

Francisco

Atlanta

MORSE.

Devine

Co., New York

JAMES

Hawley,

O.*

JAMES

Deetjen & Co., New York

Incorporated,

Whipple & Co.^ New York

SKINNER,

Los Angeles

STEPHENSON, EDWIN

SIMONS. THOMAS B.*
Sidlo, Simons, Roberts & Co., Dnver

G.*

RUSSELL. Jr., PARIS SCOTT
Glore, Forgan & Co., New York

PIETROWICZ. STEPHEN R.*
Chicago Tribune, Chicago

Chicago

The

E.*

PIERCE. Jr., DANIEL T.*

CHARLES

MORRIS.

RALPH

Witter & Co.,

Shattuok,

Bank, .New York

Exchange

York

STEARNS, PHILIP M.*
Estabrook & Co., Boston
&

Washington

Phillips & Co., Philadelphia

PHILLIPS, SPENCER

York

SIMONDS, RALPH W.*
Baker, Simonds & Co., Detroit

Securities

New

STRAUS, FREDERICK W.*
Straus & Blosser, Chicago

ROWEN, PAUL R.

morgan, walter l.*
Wellington Distributors, Inc.,
Philadelphia

Prescott,
Cleveland

Blunt

Company, Incorporated,
Philadelphia

W.*

Trust

SIMONDS, CLARKE

Reserve

ROBERT

Stroud

Telephone &

Co.,

Incorporated,

SIMMONS.

J.*

ROBERT

Inc.,

SIEFERT, RUSSELL E.*
Stern Brothers & Co., Kansas
City

York

Merle-Smith, New York

Federal

New York

MORGAN,

ROUSE,

K.*

FREDERICK
Hawkins & Co.,

STEARNS, GEORGE
The .Economist,
Chicago

Hayden, Stone & Co., New York

Jones, Inc., New Orleans

Co.,

Bacon, Stevenson & Co., New York

SHREVE,
&

ROSE, MIDDLETON
Laird, Bissell & Meeds, New York

City Bank of New York,

New

ROBERT

Shields &

Robinson-Humphrey Company,

STARRING, Jr., MASON B.
A.
C. Allyn. and
Company, Inc.,

New York

Louis

St.

Yantis

Bacon,

Hutzler, New York

JACK R.
Fuuon, .Reid & Co., Cleveland

SHIELDS, CORNELIUS*

ROBY*

FREDERICK C.
Thomson & McKinnon, New

Corporation,

DELMONT

STAPLES,

The

SHEPARD,

Atlanta

York

PHALEN,

RICHARD*

Jr.,

Writer

National

New

Stringellow, Richmond

Scharff

York

The

Buyer,

Chicago

ROGERS,

PFEFFER,

MORELAND, J. MARVIN*
Rotan, Mosle and Moreland,

Bros.

STALKER, ALFRED*
Kidder, Peqbody & Co.,

T.*

Sherrerd, Philadelphia

SHELDON, JOHN

STABLER. C. NORMAN*
Herald Tribpne, New York

Boston

G.*

Company, Chicago

SPACE. JULIAN A.*
Johnson, Lane, Space

Robert

SHAW, HERBERT I.
Vance, Sanders & Company, New York

RODDY, JAMES E.

GERALD-P.*

Equitable

Branch, Cabell & Co^, Richmond

Bond

Company,

■

PETERSON, E. NORMAN

MOORE, RODERICK D.*

FREDERICK

SHATTUCK, MAYO A.
Hausserman, Davison

WALTER

Trust

Boston

W.*

SHARPE, WILLIAM P.
Mercantile-Commerce Bank

New York

Salomon

SPENCE,

Legg & Company, Baltimore

SHERBURNE,

Denver

York

New

JOSEPH
C.

ROBINSON, EDWARD H;
Schwabacher & Co., New York

•

PERRIGO, CHARLES R.*
Hornblower & Weeks, Chicago

Incorporated,

ROBINSON,

L.*

Mitchell & Pershing,

The

New York

Savannah

Butcher &

ROBINSON, ARTHUR R.
Fidelity Union Trust Company, Newark

PAUL, CLYDE L.
Paul & Lynch, Philadelphia

Seattle

Group,

SHANKS. Jr., WILLIAM

M.*

HENRY

Co.,

Scott

and

3rd,
&

ROBERTSON,

The

MITCHELL,

John

Clark, Dodge & Co., New York

PATTERSON, MISS MAY
*
Patterson, Copeland & Kendall, Inc.,

STANLEY N.

Pacific

SENER,

Louis

SAMUEL*

WILLIAM

Riter

PATTERSON,

S.*

HAROLD

York

SEVING,

C. J. Devine & Co.,

Corporation,

York

First

„

..The First National Bank of Chicago,
Chicago
*
-

& Co.,

W.*

St.

National Bank & Trust Co.,

REVITS,

YNewhard, Cook

JULIUS

Gardner,

BRIAN*

Mellon

PATTBERG, Jr., EMIL J.*

miller. lewis

SCHREDER,

SCRIBNER, JOSEPH M.*

Pittsburgh

Co., Pittsburgh

WILLIAM

Parker

REUTER,

Chicago

K.*

PARRY, SIDNEY L.
Association of Stock

Securities

ANDREW

Chronicle,

Fenner

B.*

Sun-Times, Chicago

SCOTT, BUFORD
Scott & Stringfellow,' Richmond

Indianapolis Bond and Share

York

MILLS,

Jr.,

Pierce,

SMUTNY, RUDOLF*

WALTER A.*

Glore, Forgan & Co.,
PARKER.

The Northern

Chiles, Huey & Co., Omaha

REISSNER, FRANK L.

York

Chicago

SCHUTZ, JOHN C.*

Seasongood & Mayer, Cincinnati

HENRY

PARKER, E. CUMMINGS

RICHARD H.
King, Quirk & Co., Incorporated,
New York
.

St. Louis

REIS, THOMAS J *

Loeb, Rhoades & Co.,

Blosser,

Lynch,

New York

SMUCKER. OTTO

New

Corporation, Indianapolis

WILLIAM W.

Haas

New

MIGEL,
'

J.*

Goodbody & Co., Chicago

Corporation,

Financial

Merrill

SMITH, SOLOMON

Singer, Deane & Scribner, Pittsburgh

REINHOLDT,

York

New

LEONARD

B„

Schmidt, Poole & Co., Philadelphia

VINCENT

Commercial

R.*

Cleveland

PAIDAR,

JOSEPH

Chicago,

Beane,
FRANKLIN

Distributors

SCHMIDT,

Refsnes, Ely, Beck & Co., Phoenix
REILLY,

SMITH, NORMAN P.*

Bank

SCHMIDT. REGINALD M.
Blyth & Co., Inc., New York

New York

CLARK

Business

Cleveland,

Straus

Co., Pittsburgh

W
GUY*
Edwards & Sons,

National

SCHMICK,

REDMAN,

Nashville

Co., Providence

National

First

Chicago

New York

OWEN, RALPH
Equitable Securities Corporation,

METZNER, R. H.
•

Jones

The

ANDREW J.
Dominion Securities

The

Buyer, New York
JOSEPH

IRA D.
Allison-Williams Company, Minneapolis

Co.,.Atlanta

Walker

SCIILUTER, IIAROLI) J.

RAYMOND,

OWEN,

MEARS. GILBERT M.
G.

Bond

OVERTON,

Richards

Company, Chicago

OTIS, C. BARREN*
'

F.*

RAUSCHER, JOHN H. '
Rauscher, Pierce & Co., Dallas
Kay,

York

McLELLAN.

MYRON

Co., Chicago

RAY, NORMAN C.

OSTRANDER, LEE H.
Curtis,

RAUCH, ALFRED*
Kidder, Peabody & Co., Philadelphia

14 Wall Street

page

Chronicle... Thursday, December 14, 1950

The Commercial and Financial

(2334)

Continued from page

GEORGE

WENDT,

Continued

from

Bank of Chicago,

The First National

page

Chicago
GERALD

WEST,

In Attendance at IBA Convention

Stone

Investors

Inc., St. Louis

Chisholm

Varnedoe,
THORS. J. EMERSON*

York

JULIAN W.*
Tindall & Company,

T/NDALL,
j.

Atlanta

GLAHN,

von

Thomas

E.*

VRTIS,

HENRY B.*
Robinson-Humphrey Company,

Glore,

Atlanta

CHARLES S.
Forgan & Co.,

WALBERT,

Lehman

TORREY, ARTHUR S.*
Pitfield

(St.

Co.

TREES, HARRY A.*
Paul H. Davis & Co.,

GEORGE

Louis),

EUGENE*
Rothschild & Co.,

Trust

Stein

Girard

Bros.

Boyce,

MURRAY*
Richards &

WARD,

Louisville

Hill

Ward

TSCHUDY, ARNOLD
Bank of America, N. T.
San Francisco

Baker, Weeks & Harden, New

CHARLES W.
Cumberland Securities Corporation,

TURNER. ARTHUR C.*
New York Hanseatic Corporation,

Nashville

WASHBURNE,

HENRY

Calvin

Harris,

Atlanta

Bullock,

VANCE,

CHARLES

Vance

Securities

New York

HART,

Salomon

BROOKS D.*
& Mejia, San

WEBER.
Davies

Greensboro
VAN

Weeden

GEORGE*

The

♦Denotes Mr. and

Hutton &• Co.,

last

has been strengthened
considerably
in
recent
weeks.

WINSOR,

WARREN*

ALFRED

WITTER,

Co., San Francisco

WENDELL

Witter

WOLFF,

San

Newton

WOOLFOLK,
Central

UNLISTED

CURTIS

WOOLFOLK,
Woolfolk

Shober,

Wulff.

Hansen

Peters,

Writer

interested

securities either for

block offerings of
our

through

own

our

BROOKE

Fahnestock

listed and unlisted

Inc.,

organization.

Yantis

Co.,

Charlotte

reserves

Jr.„.EDWARD
&

the week

all

marketed

this

which
the

should

production

"market"

ended

prac¬

Prairie
be

was

allowables

Prov¬

noted

accept¬

ances,

Co., Philadelphia

(ASSOCIATE)

whereas production under

1606 Walnut Street

1896

Members

System Teletype

New
New York

being laid

excess

down

all

at prices

points in Canada

com¬

by looping and enlarged pumping
as new markets become

facilities

available.

existence

The

pipe

large

extending to Montreal from
ice-free
port
of Portland,

the

ocean

points,

Maritime

the

to this

tanker crude

borne

and

availability

the

plus

Maine,

eliminates these areas for at least
time to

some

come

potential

market for Western Canadian oil.

the

size

limited

The

high cost of construction of a

Prairie oil

the Pacific Coast.

the expendi¬

On the other hand,

ture

million on
development
U. S. and
companies during the

exploration
work

$350

nearly

and

Canada

Canadian

past four years suggests strongly

York Stock Exchange

tance

prevent

which

moves

strangle
exploration
by
elimination of markets or reason-

New York Curb Exchange

Philadelphia-Baltimore Stock Exchange

Telephone

security purposes would appear to
be regarded of sufficient impor¬
would

able^returrirfor 'risks taken.
The past year has seen impor¬
tant-changes", in the financing of
oil and natural gas development

COrtlandt 7-1202

PH 30

well

anticipated. In any case, the estab¬
lishment of adequate oil reserves
in North America for strategical

Pemnoton, Colket & Co.

PHILADELPHIA 3, PA.
Bell

could

that wider markets for crude are

Established

PEnnypacker 5-8200

that

restricted to

STOCK EXCHANGE

CURB EXCHANGE

lowables

being

was

MEMBERS

NEW YORK

are

Oct. 30

barrels,

102,050

Boenning & Co
PHILADELPHIA-BALTIMORE

crude

and

inces.

IV. ALEXANDER*
Robinson-Humphrey Company,

Drexel

Canadian

Western

pipe across the Canadian Rockies,
have prevented volume sales of

tically

Co,, Incorporated,

Atlanta

YORK,

oil

published but they

averaged

Chicago

1914

ESTABLISHED

past

However, results ap¬
encouraging. Daily produc¬

tion for

New York

YEARLEY,
The

While

production under Conservation al¬

pear

YANTIS, F. STUART*

account or for distribution

Provinces.

of the year.

WULBERN, EDWARD B.*
R. S. Dickson & Co., Inc.,
WYNKOOP,

are

Francisco

Denver

SECURITIES

10% in the

Quebec and

Maritime

British
by a wide margin. Time has Columbia demand plus the com¬
not
permitted an evaluation of petition of the low cost of move¬
discoveries in
1950
as
they all ment of California crude by water
have been made in the latter half to that area, high freight rates

Christensen,

Coast, 23% tin

West

mark
Orleans

& Co., San

HAROLD

WRITER,

the

know to exceed the billion barrel

Chicago

PAUL*

WOOLLOMES, J.

Railroad, Public Utility and Industrial

have been

New

the

1950

approximately

tario and

point
indicated

Canada's

industry

oc¬

Canadian

current official estimates of

Company,

have

Western

months.

ROBERT M.*

the

petroleum

Co., Boston

Republic

curred

WOLL, ALBERT J. T.
E.

12%

1951.

demand

the Prairie Provinces, 55% in On¬

line

changes

Significant

Francisco

W.*

ZUCKERMAN, Smith & Co., New York

WOOD, DAVID M.*
Wood, King & Dawson, New York

pendent operators.

Co.,

JAMES

General Session of the State

1951

JEAN

Witter

estimated

day in

per

Distribution

Legislature, with full support of
both major companies and inde¬

York

New

Co.,

barrels

380,000

tion bill will be introduced at the

Jr., DEAN

Witter

Dean

D.*

Whelen & Co., Philadelphia

WITTER,

day with the

per

permit supplying of all Prairie
significant that California, demand and the movement of
producing about 17% of our na¬ around
55,000 barrels daily to
tional crude oil total, has operated
Sarnia and other refining centers
without state proration laws.
It
during the open navigation per¬
now appears that an oil conserva¬
iod. This flow is to be increased

Inc., Chicago
JAMES

barrels

340,000

prospect of it increasing to around

degree.

Corporation,

III,

year,

Earnings

Stanley & Co., New York

Morgan

for crude

demand

Canadian

1950 has been estimated at around

petitive with crude from other
sources. Existing facilities and the
major operators in
large 16-20 inch pipeline connect¬
California are reflecting improve¬
ing Edmonton with
the Great
ment in that area to a marked
Lakes at Superior, Wisconsin, will

New York

WALTER W.

WILSON,

this figure.

(c)

year,

-in California which had weakened
York

York

Dean

Co., San Francisco

Denver

WARREN D.*
Ball, Burge & Kraus, Cleveland
H.

of twice

excess

of 60% of total Canadian demand,
the outbreak of
geographical isolation of source
hostilities
in Korea.
The price
and market intervenes and pre¬
structure for crude and pioducts
vents oil

the

WILLIAMS,

WITTER,

ROBERT V.*
Philadelphia National Bank,

markets, (b) the unex¬
pected cold weather in the spring

W.*

Company,

Securities

this

produced

the substantial

(a)

were

eastern

WILLIAMS, BENJAMIN D.

WILSON,

which

factors

shipments of residual fuel oil to

FRANK A.
Reynolds & Co., New

their occurrence,

order

reversal

WILLARD,

Dean

Philadelphia

Mrs.

and

conditions in California.

the

Co., New York

WARREN

Francisco

WEIIRHEIM,

Hutzler, New York

Detroit

FRANK*

WEEDEN,

Bros.

Chicago

WATTS, Jr., SEWELL S.*
Baker, Watts & Co., Baltimore

R.*
Corporation,

versal
In

Co., Baltimore

Watts &

Biddle.

Lerchen & Co.,

Watling,

CLAUDE

Blyth & Co.,

PALMER

WATLING,

C'NDERHILL, ARTHUR J. C.
Arthur Wiesenberger & Co.,

HEMPSTEAD*

Hall & Company,

domestic
industry has been the marked re¬

Boyce, Baltimore

WTLTBERGER,

York

AFFORD,

Baker,

Union

WARTERFIELD,

the over-all

improvement

statistical position of the

& Co., Philadelphia

WILLARI),

New

Inc., Boston

Geyer & Co.,

York

New York

ROBERT II.*

WARREN,

TSOLAINOS, K. P.*

Co., Pittsburgh

Kidder & Co.,

JAMES

WARREN,

& S. A.,

Sears,

Chicago

Co.,

BERTRAM

WILHIDE,

NORMAN B.*

WARD,

New York

Exchange,

Curb

Norman

New

Angeles

Los

Co.,

FRANCIS ADAMS*

York

LeROY

Bros.

WILDE.

Boettcher

L *

Company, Philadelphia

Trust

MILTON S.*

TRUSLOW,
New

HARRY

ROBERT

Arthur Wiesenberger &

Janney

Co., Hartford

BENJAMIN A.*
Bingham. Walter & Hurry, Los Angeles

WALTERS,

Inc., New York

Tripp & Co.,

TROST,

WALTER.

JEROME

TRIPP,

LOUIS
Walker &

WALKER,

New York

RAYMOND*
Investors Dealers Digest, New York

Warren

•most

the

Moseley

Stein

York

TREUHOLD.

TRIGGER,

WILBUR,

Joseph McManus & Co., New

the

WIESENBERGER, ARTHUR
&

GRAHAM*

WALKER,

Chicago

Whiteside,

is geographically divided by
Rocky Mountains. One of the
important contributors to

try
St. Louis

THOMAS

Boston

Inc.,

York

New

Co., Houston

H. Walker & Co.,

WHITESIDE,

official

leading oil company.
The domestic petroleum indus¬

B.*

be well

would

"allowables"

Board

the Conservation

Association

Bankers

convention

Corp., New York

quoted

subsequently

was

American

HELTON E.*

WHITTAKER.

It.*
Bank

Mercantile-Commerce

ILL

Arizona,

WHITNEY, Jr., LEWIS J.*
Dempsey-Tegeler & Co., Los Angeles

Chicago

RICHARD B.
Brothers, Chicago

WALDMANN,

Ltd.,

Company,

Montreal

White

Chace,

York

Pittsburgh

TOMPKINS,
The

THEODORE A.*

Jr.,

Bros. & Hutzler, New

Solomon

Company,

Co., Inc., Chicago

Wood, Gundy &

Boston

CHARLES

Chas.

WHITE,
G.

HARCOURT

VERNON,

Bank

BRAINERD

First

The

WHITE,

VENNEMA, HARRIS
Pennsylvania Banker, Philadelphia

TFTUS, Jr., WILLIAM A.*
Wertheim & Co., New York

TOMASIC, A.

Inc., |

Co.,

II.*

Phoenix

WHITBF.CK,

Savannah

Loeb & Co., New

Kuhn,

Chicago

SAMUEL I,.*

VARNEDOE.

Cincinnati

Gas IndustriesfSound

Inc.,

Alleman,

ROBERT

National

First

SLYCK, M.
Journal of Commerce,

S *

Orlando

WHITACRE,

VAN

York,

THORNBURGH. ROBERT W.
The W. C. Thornburgh Co.,

Wheeler

Leedy,

Inc.,

York

New

THOMAS. JOSEPH A.*
Lehman Brothers, New

GALEN*
Diversified Services,

METER,

VAN

Theis & Sons,

Albert

Petroleum and Natural

Securities

HOWARD

WHEELER,

THEIS, HARRY*

Webster

Corporation, New York

123

South

Broad

Street,

in Western

Philadelphia 9, Pa.

PEnnypacker 5-7700

Teletype—PH 180

Canada, both

to the

methbdvoL instrument of financing
and' the suppliers of the necessary

New York Office
70

Pine

HAnover

Butcher

Sherrerd

ESTABLISHED

Street

351

2-0310

PRIVATE

Manhasset Office

Phone

Plandome

Manhasset

Reading Office
18

Road

Phone

7-0161

TELEPHONES BETWEEN

5th

Street

Reading

7321

OFFICES

capital.

institutions

in Canada has been developed

point where they may be re¬

garded

as a

"business risk." Many

the medium and

and natural

to feel that oil

pear

gas
to

1910

Financial

both Canada and the U. S. A. ap¬

smaller

com¬

panies have raised funds by is¬
suing debentures which are con¬
vertible at the holder's option in¬

Underwriters, Distributors, Dealers in
CORPORATE AND MUNICIPAL SECURITIES

HERBERT H. BLIZZARD & CO.
1421

Chestnut

Street

Philadelphia 2, Pa.

to common stock.
In order to finance

lease

Crown

particularly

fields,

purchases of
in

acreage

proven

the

Red-

water, numerous small companies

TRADING

have been formed and have issued

MEMBERS

against the property

IN
New

York

Stock

New

York Curb Exchange

UNLISTED SECURITIES

(Associate)

Our

1500

Exchange—Philadelphia-Baltimore Stock Exchange

WALNUT

STREET

PHILADELPHIA

PA.

Philadelphia Telephone

Teletype

PEnnypacker 5-2700

PH-4

Records

Unlisted

tures."
version
a

name

New York Telephone

—

have

spot..
'.i:

BArclay 7-4641

Telephone LOcust 7-6619

Teletype PH 520

feature

and

moderate

bonus

when

often

carried

issued.

stock
Securities have cumulated since 1922

Just

»-4

Market

what might
"production
deben¬
These usually have a eon-

termed

appreciation
stimulated

tional

common

The capital
possibilities
have
private
and
institu¬

interest

this

class

although there are mixed
feelings as to prices paid for some
paper

this

crown

leasehold.

it is

Volume

172

probable

Number 4968

that

the

The Commercial and Financial

Canadian

pe¬

prised

industry will require in
the vicinity of another billion dol¬

world

lars

companies

troleum

before

reaches

maturity,

the larger part of which will have
to be raised by sale of
securities,
it

important

that

they

retain

their popularity.

Interest in the natural gas pos¬
sibilities continues at a high level.
Private estimates of indicated
gas
in

reserves

high

Alberta have been

12 trillion cubic feet. How¬

52V2%

the

Chronicle

estimated

total.

At the end of 1949 United States
trol

billion

serves

estimated to

were

barrels

con¬

oil

re¬

all

74% of

substantial

the

30, 1950 places them at 7.030 tril¬

areas

lion

makes

Hume, in his
few

have

been

drilled

Alberta
out

Dr.

that

getting

absence of

many

vented

some

with¬

shows

gas

but

complete data

these

the

wells

inclusion

the

with
in

size

clearer

proaching

day by day that

world

oil

the past.

than

has

existed

Prominent oil indus¬

be¬

tive

extremely conservative.

There would appear to be no
question that Alberta's natural gas
requirements in the foreseeable
are

and

over

covered

that

times

many

sufficient

natural

has been

gas

indicated to permit
in volume to other Prov¬

of export

inces and

the U.

S. A.

This posi¬

tion has been achieved
very large¬

as a result of

drilling in search
of oil and, at the time of
writing,
only one company is undertaking
exploration for
The
Gas

in Alberta.

gas

Alberta

Oil

and

con¬

tinued its investigations and hear¬

natural gas and

pected

that

the

it is

Board's

ex¬

recom¬

mendations

ernment

the export of gas will

presented

the

Alberta

the

near

time

present

future.

there

four diffrent organizations

ing

negotiations

exporting

British

Coast states.

with

are

carry¬

view

westward

gas

Columbia

Gov¬

the

and

There

are

Pacific

two

com¬

panies seeking permission to
port
wan

gas

eastward

ex¬

Saskatche¬

and

Manitoba, and southward
bordering on these
provinces. One company is nego¬
tiating for export of natural gas
to a large Montana power com¬
pany while a recent entry on the
the

list

states

has

the

ambitious

transporting

Alberta

eastward

far

plan

gas

Montreal

natural

and

intervening industrial centers.
At the time
of writing, it
impossible to make predictions

what

will

the

outcome

the

over

last

light

less

gains

balance and, un¬
prognostications as
growth of reserves

and productive

capacity

ly in error,

will need increas¬

ing amounts of foreign oil
goes

supplement

output.
The

Korean

incident

deepened threat- of
have

had

and

the

Russian

war-

major impact

situation.

oil

the

event,

focus

Prior

oil

markets and

American

the
in

interests

World

production

fourth

its

oil

consecutive

10,811,000 B/D.

estimated

This figure

com¬

with 9,052,000 B/D in Aug¬
ust
1949.
The gain of 1,759,000
B/D was divided 904,000 B/D to
pares

the United States and
to other

the

areas.

latter

855,000 B/D

Venezuela

184,000 B/D, Iran up 149,000 B/D,
Kuwait up 163,000

B/D, and Saudi
Arabia up 135,000 B/D; these areas
accounting for 631,000
B/D
or
73%
of
the
gain
outside
the
United
States.
For
the
month,
United

States

production

have
oil

producers is

though

this

probably will

its efforts
to

under

increase

and

re¬

safe

logical

Venezuela,

for

interest

long-

well

the

under

given

are

new

circumstances.

previously mentioned, solution

Canadian transportation

lems may be expedited.

lan

operations

Debate

invasion

sian

brings out three
tion.

Would

Russia

would

of Rus¬

points

East

and

capital losses, to be charged only
against capital gains. The idea of
any
action which might reduce

will

safeguard

the

der

which

Federal

would

Power

rities

natural

Several

bills

offered

during

and

hearings

this

the

them—the

bill.

the Congress.

for

some

controversial

Power

lips
should

the

not

gas company and

lation

basis.

the

this

company

wide

Federal

natural

subject to
scope

affirmative
Power

Phil¬

regu¬

decision

this
by

Commission

under

Interior.

Bruce

is the

into

Oct.

lished

the

determine

considered

What

without

Commission

Petroleum

and

encour¬

the

ills

including

the
on

ef¬

Senator

Myers

are

panies

already with sizable pe-.
equity investments have
maintained
their
position
or
added slightly to them on balance.
troleum

Mutual

investments

funds

served

principal

The

all

portfolio growth and in
more

cases

equity

New

so.

buyers

been the

pension

have,
on available data, regarded
equities of particularly the
domestic
companies
as
worthy,
components of their initial ven¬
based

the

into

ture

field

the

indication

the

such stocks would react

com¬

new

any

invasion

ties

held

are

vestors

can be seen from the large
proportion of the industry's debt
financing provided by banks and'
insurance companies via private

transactions.
year

Data for the current,

incomplete

are

the

marked

the

1950

and

drop in

figures will not

indicative.

dustries

were

seeking

much

Using figures

compiled

Department

National

nancing

vestments

Bank

transactions

oil

last

rowed

year

that

1949
of

plant
19

was

which

billion

Browne

Pan

was

Amer¬

appointed

only 11.6% was
billion

60%
ance

183

Interior.
an

The

PAD

thus

becomes

independent

authoiity, corre¬
sponding in practically all respects
to

the PAW created

War II.

under World

The latter operated with

considerable
concern

over

success

the

and

industry

regulation

panies,

of such

new

from
In

that

these

over

capital

1948 the ratio

of new

surance

Incorporated

PHILADELPHIA

the

Underwriters & Distributors

divided

318

million, or nearly
to production with the bal¬
14%

transportation, 16%

State and

Municipal Bonds

Equipment Trust Certificates
Public

Utility and Industrial Securities

Philadelphia Bank Stocks

NEW YORK

prospectus from

your

investment dealer

PHILADELPHIA 2, PA.

•

PITTSBURGH

•

ALLENTOWN

•

obtained;
sources

borrow

companies had been

Continued

pat¬

million, or
foreign property.
was

OiU

ings obtained from banks ancLin

STROUD & COMPANY

"30

three-fourths;
were

institutional

million,

oil

companies, petroleum debt finane-?j

billion 239

This latter investment
1

fi¬

ing in 1949 totaled $843 million,!
Administrator, reporting 19.5% of which
was provided byi
directly to the Secretary of the banks and
56% by insurance com-ij

the

investment

the

corporations

bank's

adversely

companies at the

the

industry, of the $585 million bor¬

are relatively in¬
significant to their total interests.

Gross

by the
of

the Middle East

active*

capital.

new

Petroleum

Chase

too

hand, in*
1948 the oil and gas in¬

1949 and

On the other

Deputy

in mar¬
fact that in¬
of these companies in

and

capital,,
requirements of the oil industry,

ready has been reflected

prices

clue

new

spite of the fact that the risk al¬
ket

re¬

secur*-,

institutional in¬

com¬

threat,

high

gard in which oil and gas

date has

large American

common.'

stocks.

by the Mid¬

panies with major holdings in the
area.
It is entirely possible that

funds

and life insurance companies

lagging market action of

stocks of the

some

types

Companies" series, 70% was pro-;
vided
by banks and insurance
the Department of
companies.
Combining the bor-j
Shortly thereafter rowings of other
important oil

Petroleum

adequate

reflection

have

added proportionate to their over¬

refining facilities? Could remain¬
ing
productive
capacity supply
now

one,,
have

importance

the

that

favorable

3, 1950 the Petroleum
Authority for Defense was estab¬

push

pending investigation by the Fed¬
eral

committee

study
of

been

has

changes

included
On

ican

problem

sub¬

trust funds of banks, college, uni¬
versity and foundation funds, and
fire and casualty insurance com-'

the

obvious.

coming session.

ques¬

and 1o

meet

The

"methods

industry,

sponsored

taken

it during

industry. The risks of the rela¬
tionship of such a study and that

Representative

measure

action

energy."

coal

Crosser

was

policy

fects of competitive fuels

Crosser of Ohio is expected to re¬
introduce his

such oil

so-called

No further action

formulate

authorized

commission

were

held

con¬

other

among

Truman recommended to Congress
that a study be made by a special

last Congress

were

and

Senator Myers' resolution was in¬
troduced shortly after President

un¬

secu¬

nature

"full

relieved in

appeared in large senior security,
holdings. As concerns the equities,

Com¬

aging development to assure the
availability of fuels adequate lor
an
expanding economy and the
security of the United States."

companies.

gas

fuel

recommend

Commission

jurisdiction the issuance of

order

also

in¬

bring

Senate

thereof,"

atomic

The natural gas industry also is
still faced with the threat of leg¬

islation

the

undertake

national

complexion of Congress since the
election

needs
of
the
United
States
in
times of peace and
war, such pol¬
icy to include the use of all fuels
and
energy
resources
except

hardly tolerable, especially at this
time. These points, however, have
become political matters, as well.
It is to be hoped that the changed

1950

Affairs,

probable future rates of

things,

war?

with

proposal to treat abandonments

whether

Middle

go to

it,

captured

result

the

appraisal.

the

over

prob¬

Venezue¬

entitled

are

constructive

emer¬

our

Canada and
other Latin

sources,
as

American countries

for

sources

and

requirements becomes vital.

range

Our

oil

needs

gency

authorized

sumption

gas

Insular

the United States and the present

Now, although this con¬ House
Interstate
and
Foreign
tinues important, the need to in¬
Commerce Subcommittee on one
sure

and

Closely related to this risk is the

complete investigation and study
of the available fuel reserves of

re¬

revenues.

incentive to drill for oil

the

industries

gas

by the Senate Committee

mittee

the current

tax

could

both

by
Senator
O'Mahoney. Thi3 study was sponsored
by Senator Myers of Pennsylvania

twice

and

which

matter

natural

and

Interior

theme

have

Chairmaned

rebuffed by Con¬
its proposal to cut such
allowances for tax purposes, the
Administration has persevered on
gress

industries

serious effect

way

recurring
allowances.
Al¬

one—depletion

sev¬

the study just about to get under

One of the most important leg¬
risks of the oil and nat¬
gas

both

Another

Texas

islative
ural

been

The attitude of security holders
toward the petroleum industry in'

scheduled

are

position.

com¬

brought
of

deferred

now

applied for permission to partici¬
pate in the defense of Phillips'

and

spect.

Larger components

were:

this

markets

monthly all-time record in August
1950 when it reached

State

this

has

dle East, especially on a war foot¬

prospect

crude

status

1951.

recorded

foreign area was the emer¬
gence of competitive patterns for

ing?

for

that

attention

Middle East problems to

the

world

the

tide-

oil

been

gas and

January, 1951. Large and small

groups

dustry.

negotiations, although even
officials
are
quite
prepared to admit that export
definitely

time

domestic

these

are

wide¬

are

government

permits

made

industry

the rate

conserva¬

decale.
Over the
have been im¬

years

porters of oil
to

appears

past

two

world

Natural

Conservation Board has

ings

figure which

the

major

for

review

Texas

subsequently

against

need

estimate may be

against
One

have

eral times and

de¬

demanding return of royalties and
bonus payments already made.

new

1960,

Court

decision

case

has

suit

important

the refusal of the

Supreme

earlier

try executives have estimated oil
of 8,000,000 barrels a day by

future

ap¬

different relationship

tentialities in his calculations. His

ing

reserves

States industry
a

its

most

was

Louisiana.

Al¬

other than the United States

United

requirements in the United States

the

pany

East.

foreign holdings, the
production as well as

relative

po¬

their

regarded

dustry,

pre¬

have

matter

there and at 42%

the

though the world oil situation is
important in the first instance to

Government of Canada, as at June

states

affects the domestic petroleum in¬

Middle

reserves

of those

mounting

cubic feet.

stantial way.

lands

placed

were

eral of Scientific

report,

tern

ing effect to both natural
oil companies.
Hearings

South

those companies which have these

Services for the

would raise questions of far reach¬

velopment

official estimate prepared
by Dr. G. S. Hume, Director-Gen¬

ever, an

to
manufacturing, and 10% "to
marketing.
From a legislative viewpoint as

countries, or 62%
of 78 billion barrels, the estimated
world total. American holdings in
America

(2335)

SCRANTON

•

LANCASTER

evei

page

The Commercial and Financial Chronicle..

•

siderable

Continued from page

margin the 12.7 trillion
in

added

The

1949.

cubic

total

million

93%% of the $999
provided by these

institutions.
It should

noted that

portion was taken by
and also

serves, as

for the

try

feet, while

petroleum indus¬
of financing
of oil properties

withdrawals amounted

to 6.25 trillion

ing

to the subject

net gain in proved reserves
trillion cubic feet. In each

the annual

of the past seven years

high pro¬
portion of the debt capital re¬
quirements of the sharply ex¬
panding natural gas transmission

additions
reserves

the

exceed

of
1950

close of

the

increase

net

in 1949 and that proved

achieved
reserves

187

approximate

may

trillion cubic feet.

increase in the
gas for use

The very great
fuel

natural

for

demand
as

and

chemical

for

natural gas reserves.

that

appear

180

creates

processes

question as to the adequacy

some

material

raw

proved

area,

Buffalo,

1950 should

rate

by at least

lines

transmission

the

that of stabilizing deliveries so as

New

high load facior. The
companies now de¬

York, Detroit, Michigan Washing¬

transmission

have

the interruptible business
a
high load factor
during the period of low residen*-

add

underground

to the gas sup¬

lizing

to important new areas in the
states. The comple¬
will

provide

every

west,

the

exception of New
the Pacific North¬
proposals before the

with

gas,

the

The distributing utilities are

season.

The importance

the

transmission

major

mately

$100

pansion

Federal Power Commission would

unable to supply

to stabi¬

systems

have budgeted a total of approxi¬

and

answer

storage problem is
evidenced by the fact that five of
given

major

section of the nation with natural

England

believed

deliveries.

the winter

lines under construc¬

the

best

The

storage

Such
storage
could be built up during the sum¬
mer months
and released during

southeastern
tion

offer the

plies of Chicago, Detroit and San
Francisco, and will bring natural
gas

tial and commercial demand.

daily.

of these will

maintain

designed capacity of 1,450M
The most important

MCF

assure

pend

Major projects under construc¬
total about 4,540 miles and

tion

million for the ex¬
underground storage

facilities.

Three types

still panies

of natural gas com¬

available to the inves¬

are

tor, namely, (a) utility companies

the existing de¬

(b) in¬
companies,
(c) primarily producing com¬
natural

distributing

mand despite the additional quan¬
annual requirements are in¬ tities of gas made available by
creasing repidly and may reach enlarged pipe line capacity. Pres¬

and

gas,

transmission

terstate

ever,

Gas withdrawals in

increasingly important prob¬
of

ton, D. C., and Baltimore.

proved natural gas adequate for annual requirements
have exceeded the an¬ of 6.25 trillion cubic feet; how¬

An
lem

It would bring these areas into the natural
of gas territory.

reserves
feet would

cubic

trillion

projects which brought
the New York Met¬

ropolitan

tion

withdrawals.

nual

fields has been

distributing

cubic feet, produc¬

of 6.51

point out that a very

and

proved reserves
12.76 trillion cubic
to

amounted

purpose

It is also germane

Gas

additions

the

acquisition of assets.

and the

will

re¬

Reserves, were
180.38 trillion cubic feet. In 1949

that an unreported quan¬

engaged in the

proved

estimated by the Amer¬
Association Committee

Natural

tity of bank loans was made to in¬
dividuals and private corporations

the development

Gas

ican

institutions

1949

31,

increase in the proved reserves
gas

included

natural gas to

one

alone ap¬
trillion cubic

proved.
It is therefore estimated that the
natural

petroleum industry.
Dec.

Gulf.

acres

five

proximately

of the

securities sold publicly, a

the

be further

10,000

feet of reserves have been

natural gas reserves
the United States are held by

the

develop¬

in the Tidelands area

Louisiana

the

block

successful

and

ment work

Gas Industries Sound
higher with

for this estimate in the in¬

tensive

Petroleum and Natural
70%

feet

reason

-.Thursday, December 14, 1950

(2336)

panies. Capital structures, earning
power
characteristics,
dividend
before 1960, in which case the
ples Gas, Light & Coke Co. has
which would indicate total
present proved reserves might not recently estimated that some 750,- paying ability, markets, and other
withdrawals of about 7.5 trillion
justify further long-term invest¬ 000 potential space heating cus¬ factors vary widely as between
cubic feet. Development and ex¬
these groups. Here again as in the
ment in transmission lines. How¬
tomers are unable to receive gas
long distance natural gas trans¬ ploratory activity for oil and gas
ever, proved reserves need not be
because of restrictions in various petroleum industry the investor
mission
lines, $199
million, or in 1950 has proceeded at approxi¬ considered alone.
has a wide range of choice as re¬
states
upon
new
installations.
62%, was obtained through pri- mately the 1949 rate with about
Furthermore,
continuous
dis¬ These restrictions are necessitated gards type of business and type of
vate bond sales. Similarly, of the 470 geophysical parties surveying
\
coveries of new fields constantly by the inadequacy of present sup¬ security.
$364 million of bonds sold by potential oil and gas bearing areas
add to reserves and at a rate in plies available to the distributing
Broadly speaking the capital
and more than 9,000 oil and gas
major
natural gas • distributing
excess of withdrawals.
In an ef¬ utilities. The actual progress made ratios of these types of companies
companies during the same pe¬ wildcat wells being drilled out¬
differ radically
as
compared to
fort to appraise the potential sup¬ in adding customers has been very
riod, $85 million was obtained side of proved areas. In relation
those of the petroleum industry.
from private sources.
(The latter to wildcat wells drilled in 1949 ply of natural gas giving weight great and it is estimated that one
In the latter case, common stock
to deposits yet to be discovered,
million more customers will be
proportion was lowered by the additions to proved reserves were
Mr. Lyon F. Terry, Vice-President served with space heating in the equity
predominates while the
fact that almost $200 million of less than in previous years; how¬
of the Chase National Bank, pre¬ 1.950-51 season that there were in former are highly leveraged with
refunding operations by one com¬ ever, the actual addition of 12.7
debt
and
sented before the American Gas the winter season of 1949 when both
preferred stock.
pany
inflated the publicly fi¬ trillion cubic feet, compared with
Association
a
most
interesting space heating customers numberea Accordingly, the importance of
an
nanced total.)
average for the three years
the rapidly growing utility-trans-^
appraises the gas 7,217,000.
study which
In turning to
natural gas an 1947 to 1949 of 12.5 trillion cubic
mission companies to the invest¬
producing potential of areas yet
Rates for gas at the wellhead
item of a bridge nature arises, feet. Additions to proved reserves
ment banker is much enhanced as

provided by institutional sources.

exceed

months of 1950,
of the $320 million total debt fi¬
nancing
undertaken
by major

the

1949

much

trillion cubic feet

ident J. F. Oates, Jr. of tne Peo¬

20%,

the first nine

that an

namely

estimated 60%-

1950

exceed by a con¬

should

Mr. Terry con¬
quantity of

be developed.

cludes

the

minimum

future

supply

natural

gas

the United States as follows:
Present

proved

reserves

—180

Future

Industrial, Public Utility, Railroad and Retl Estate

Securities

trillion cubic feet.

discoveries,

Gulf Tide-

lands—50 trillion cubic feet.
Total future

supply—510 trillion

cubic feet.

ACTIVE TRADING POSITIONS MAINTAINED

transmission
system was materially expanded
in 1950. Major projects completed
had

gas

total length

miles and

was

Bioren
Members
-

New

1865

4,730

some

aggregate capacity of

1.850M MCF daily.
Established

upward

move
are

and

compared to the petroleum indus¬

being signed in

functions

derwriters

three and four
An interest¬
development was the estab¬
with

compared

which

Kansas,

set

nished

The expansion

particularly important

have

j the respective State Commis¬

sions to establish field prices.

York Telephone:

Teletype:

DIgby 4-5632

buyers, but are

well

the shares of many

transmission.,companies

large

limited markets for

shares of certain natural gas pro-

during companies.

NEWBURGER & CO.

PH 574

smaller

and active unlisted mar¬

Broad

PEnnypacker 5-9400
New

some

kets exist for

■

fur¬

daily increasing in investment re¬
gard and in their contribution to
portfolios. Equities of the distrib¬
uting companies are usually far
on the high quality side.

Co.

Philadelphia 2, Pa.

usually

the minds of

upheld the authority

York and Philadelphia-Baltimore Stock Exchanges

1508 Walnut Street,

are

amount, have, in some respects, a
somewhat less seasoned quality in

"I Associate Member New York Curb Exchange

-4

companies

companies,

Cojurts of both Kansas and Okla¬
of

also

equities of the transmission

mon

j being litigated. The Supreme

homa

but

senior securities sold
publicly or placed privately with
institutional type investors. Com¬

of eight cents per MCF. The
constitutionality of the Commis¬
sion's authority to establish prices
is

securities

capacity

our

transmission

by two states: Oklahoma, which
set a minimum price of seven

and

merchants of
securities. A large portion of the
capital requirements of utility-

ing
lishment of minimum field prices

cents,

This is true not only in our
as
originators and un¬

try.

general price range of from
cents to 14 cents per MCF as

price

natural

The

contracts

cents ten years ago.

discoveries, Continental

Future

area—280

the
10

trillion cubic feet.

UNDERWRITERS AND DEALERS

continue

new

Conclusion

MEMBERS
New

York

Stock

New

York

Curb

Summarily,
your
committee
finds the petroleum and natural

Exchange
Exchange

Philadelphia-Baltimore Stock Exchange

industries to be in high inves¬

gas

tor regard

UNDERWRITERS, DEALERS and BROKERS

1342 Walnut

and to afford continued
money-making opportunities for
customers and ourselves. They

Street, Philadelphia 7

our

important and growing indus¬

are

Pennsylvania Municipal Bonds

NEW
14

YORK

Wall

Street

HARRISBURG

LEBANON

Farmers Trust Building

tries and

ATLANTIC CITY

Telegraph Bldg.

Central Pier

many

Public

they require

Utility — Railroad—Industrial

certain
possess

the

types

Issues Free of the

Personal

advantages which
their securities

taxwise and inflationwise,

Distributors, Dealers, Underwriters
Corporate & Municipal Issues

•

Pennsylvania

Property Tax
DeHaven & Townsend, Crouter & Bodine

Yarnall

ESTABLISHED

Co.
'j

Members of

New York Stock Exchange

NEW YORK CURB EXCHANGE

PHILADELPHIA-BALTIMORE STOCK EXCHANGE

Philadelphia-Baltimore Stock Exchange

New York Curb

Exchange (Assoc.)

152B WALNUT ST., PHILADELPHIA
2, PA.

1874

MEMBERS

NEW YORK STOCK EXCHANGE

1500
HEW YORK

CHESTNUT
1

STREET

PHILADELPHIA

WILKES-BARRE, PA.

and our

BONDS and STOCKS
Specializing in

services in many capacities. With

STAMFORD, CONN.

.Volume 172

should

Number 4968

continue

The Commercial and Financial Chronicle

aware

duty to our customers in
assuring them adequate represen¬
our

tation in these industries.

Long-term
trends

are,

social

and

many

dustries, potentially of
nature.

and

would

Committee

all

forms

Alan

investors,

fact

that

Clark; Noel M. Fowler; Wil¬
S.
Hughes; George E.

liam

control

Anderson; George E.

oil,
natural gas, and coal carries with

Jones;

it complete control of our nation.

John

All

Stanger, Jr.; Milton R. Under¬
wood; Kenneth V. Zwiener.

transportation, heat, light, and
power stem from these important

John
W.

Rauscher;

Spurdle; Wesley A.

been

Inflation

word

mate

above

financial

this

greater

such

modity

wartime

vital

be counted a
mainly to this

Thanks

industry, the Province of Al¬
berta estimates having a revenue
surplus of approximately $65 mil¬
new

lion

for

the

Industry
and

light,

fiscal

current

year.

heavy
enjoying happier

all

now

modity
as

whose economic condition

Canada is

highly susceptible and
responsive, and we are unques¬

tionably feeling the impact of its
influence

now.

The general

all

too

Canada's

element

vantages

plant
ating

and

recent

dollars, that is, after
for price changes was

1% greater than in the peak year
1943

and

84%

than

greater

the

with

years'

ad¬

large

expansion, has been oper¬
on a scale without precedent

1939.

Gross National Product Has Risen
The

unprecedented proportions

which

volume

the

eral

has

way

flected

the

country's

portant examples out of the many,

production of steel ingots is esti¬

this

would

mated to reach 3.2 million tons in

was

$16,300 million, but

This is 11%
higher than in the peak war year
1943 and

than

less than 110% higher

10 years ago.

Similarly, vol¬
ume of aluminum is now running
at the rate of slightly more than
400,000 tons annually, which is
67%

excess

the

1943

year

and 400% more than 10 years ago.

Newsprint,
are

lumber

and

value

gen¬
re¬

gross

product, the total dollar

its

fairly

goods

early

estimate

accompanied

for

the

total

taxation

the

derived,

revenue

upsurge, total Bank deposits and
loans have mounted steadily and
Stock Market prices have been

markedly in the ascendant. The
spiral has been working fast.
cost

living index has
mounted continually since the be¬
ginning of the curent year when
it

stood

161.0.

Sept. 1
eight

169.8—an increase in

was

months of 5.5%. The sub-index

results

the

rest of the world.

the

rest

subse¬

the

over

This

peak
is

12%
year

of 1943.

truly

remarkable

demonstration of national earning

capacity but, when contemplating
the dollar results of this boom
,

year

and

attempting;'to

how

real

and

the

permanent

visualize
will

benefits, it would be prudent
bear

mind

the

inflationary

those

buying coun¬
tries. During 1950 this trend has

much

been

of fear and

the

and the

figures for the first

months

6.8%,

those

from

hand,

during the

should

labor

Inflation

arrest

other

much

arrested

circles,
our

same

BUILDING

15.5%

(England
countries 7.2%).

and

has

been

further

other

dollar
most

growing

our

the

assured.

fact

meantime

Canada

has

State®

Predominant

part

trade, and closely attuned

Continued

page

the

Securities

prob¬

consumer

1812 First National Bank

but,

Bldg.

PITTSBURGH 22, PA.

GRant

1-3883

Teletype PG 381

any

the

national

bridle

consumer

them

connection

chasing,

curbs

loans,

instalment

and

Western

for the first time
1944

by raising

and West

in¬

corporation

2%,

but,

far

Listed

credit

nomic

the

for

mild

financial

serious

and

UNIO

TRUST

the

imperative

seem

the

ravages

BUILDING

Chicago Board of Trade

•

PITTSBURGH

eco¬

drastic

Virginia

Securities

Pittsburgh Stock Exchange

New York Curb Exch. (Assoc.)

Bell

malady

contain

New York Stock Exchange

measures

such

Unlisted

MEMBERS:

are

treatment would
to

1%%

and

Kay, Richards & Co.

February,

sum,

taken

medicine

since

it from

DEALERS

Pennsylvania

and

moderately
additional

DISTRIBUTORS

pur¬

housing

taxation

spending.

restrictions

are

with

UNDERWRITERS

tightening influence, the Bank of
changed the Bank rate

disease.

19,

PA.

Telephone ATJantic 1-3241

Teletype PG 466

Eutler, Pa.

Erie, Pa.

Uniontown, Pa.

Warren, Pa.

M.'adville, Pa.
Washington, Pa.

Correspondents and Private

Wire System

UNDERWRITERS

DEALERS

New Castle, Pa.

•

HARRIS,

Clarksburg, W. Va.

UPHAM &

CO.

Foreign Trade Outlook

Turning to
vital

there

can

our

foreign trade,

economic

our

complaint

welfare,
to its

DISTRIBUTORS

progress, nor to the course of dis¬

tribution
the

Corporate & Municipal Securities

dollar

taking.

value,

Since

and

1945

lesser

CORPORATE and MUNICIPAL

degree the actual volume of goods
exchanged with other countries,
has

each

successive

year

SECURITIES

sur¬

passed that of the previous year,
and
Private Wire

1950

has

been

Carl M. Loeb, Rhoades &

Total

Co., New York

transactions

seven

Direct

months

exceeded

those

period

1949

exception.

for

the

first

$3,417.4 million
for

the

by $95

similar

million,

SINGER, DEANE & SGRIBNER
MEMBERS

2.86% increase. Imports at $1,712.5
million advanced $72 million and

exports
vanced

Chaplin and Company
Members
New

York Stock Exchange
New York Curb

Pittsburgh Stock Exchange

BANK

BLDG.,

PITTSBURGH 22,

—

Bell Teletype PG 473

million

million.
are

all-time

Our

now

NEW

ad¬

record

postwar

balance.

years

tribution of

the
our

YORK

been

taking place, in

gradually veering

CURB

STOCK

EXCHANGE

(ASSOCIATE)

antici¬

—

Direct

Over

UNION

that it has

from

TRUST BUILDING

PITTSBURGH

the

interesting

away

Wire to New York

and

geographical dis¬
foreign trade has

been

YORK

total

bring the year's inter¬
trading account into a

favorable

change

Telephone GRant 1-3900

$22.7

probably
national

PA.

$1,704.8

exports for 1950

net

PEOPLES

NEW

PITTSBURGH

pated to top the two billion dollar
mark

Exchange (Assoc.)

Teletypes
PG 477

PG 478

our

is to theirs, the fortune®

economy

Members Pittsburgh Stock Exchange

only be

can

the

United States plays in our foreign

FAUSET, STEELE & CO.

be¬

Canada

Brokers and Dealers in

been

countries,

area

the

that

reassuring and confidenceinspiring fact and a feather in the
country's cap.

geographical trade
shift, so greatly accentuated this
year, has been propelled of course
by the dollar conservation policies
non-dollar

political
conditions,
in eliminating
disequilibrium seems al¬
progress

by heavier exports to the
is

total international

This postwar

the

seems

able fully to compensate the losa
of exports to the non-dollar area

propor¬

business,
and that country is, at the present
rate of trade, absorbing approxi¬
mately 65% of our total exports.

ternational

tionately greater ever since 1945,
now
comprises about two-thirds
of

policies
while.

for

Given*
however, reasonably favorable in¬

Canada's trade with the States,
which

no longer a matter
preoccupation. While,

flourish¬

now

everybody's

government

profits.

Securities

all

contrast
ago. So

year

self-imposed
discipline
is
contrary to the natural instinct,

creased

Municipal and Corporate

rose

8.3%,

such

farm

PA.

period

declined

was

improbable

the

15.8%, while those

that the one-time famous

dollar conservation

Investment

general.

individual

Among

19,

2.1%). On the

countries

held in check by personal restraint
and economy on the part of the

and

TRUST

non-dollar

exports

our

th&
area

however, dollar disequilibrium is
much less acute, it is in several
countries
not
yet a completely
solved problem and, consequently,
any
drastic relaxation of their

by 3.2% (England 1.1%,

interest, has wisely enacted meas¬
ures designed to tighten
up credit

PITTSBURGH

seven

quite significant. Our
imports from the States declined

all other countries

success¬

today

favorable

sharply
what

dollar gap

ever

are

areas rose

with

other

conspicuous than

most

and

debtedness of the non-dollar

lem. Its penalties penetrate
every
home and the responsibility for its

our

THOMAS & COMPANY

increasing by
comparison with the proportion of
to

been

Problem of Inflation

increase

war

have

achieved,

overall current trading dollar in¬

the States has been

ing export trade.

and

the

exports

our

leads, as it may do, to
recurring dissatisfaction and un¬

to
$17,000
million.
This
latter
figure represents a 6.6% increase
1949

from

Simultaneously,

impairment of

over

total

proportion of

during the same period
by 9.7%. It is highly impor¬
that this rapid depreciation
the purchasing power of
our

currency

1950

their dollar exports. Their desired

fully

tant

fore

year

been

rose

what

has

food prices

quent revision raised the estimate

pulp

UNION

States

proportion

States

and

the

declining by comparison with the

other

therefrom. Hand in hand with this

The

from

cost of in¬

triangular pattern. which involved cutting down their
of our total im¬ dollar
imports
and
increasing

proportion

ports

21.4% dur¬

income

corporate

services.

and

three other industries to have

outstandingly increased produc¬
tion, and the first named com¬

na¬

naturally been

national

year.

the

tion's business has risen in

conditions in our
history. To mention but two im¬

current

kinds,

under peacetime

the

pro¬

constant

allowing

relations than heretofore with its
labor

industrial

total

duction at the middle of this year
in

readily dis¬

rose

sharp ad¬
vances
in
commodity
prices,
wholesale and retail, consumer
spending, labor wages, personal

takes pride of place

now

national

our

are

and

the traditional
The

hallmarks

year,

most remunerative export.

our

com¬

surely

can

blessing.

benefit,

ulti¬

ing the first nine months of this

Affecting Canada

sufficiency

self

its

particularly
States, a coun¬

cernible.

Economic and Financial

Canada's

day
creating

inflation

Conditions

dustrial materials

and

degrees

and

anxiety

rife in the United

The

Continued, from page 8

our econ¬

the order of the

effects.

try to

turmoil

noticeable.

very

over

universal

varying

acuteness is
the

Winfield H. Perdun, Chairman;

serious

international

has

omy

yours,

Oil and Natural Gas Securities

adverse

when their incidence

Respectfully

should not blind ourselves

the

months

Nationalization of all fuel

industries
threat

for more

than 55%.

political
other in¬

oil and forces which have been at work,
especially during these last few

of which

materials,

raw

natural gas now account

(2337)

19, PA.
Telephone
GRant

1-4700

(2338)

Continued

from

complimented

page

the

they

way

had faced their problem

Britain

Great

the

sterling

powerful

leader

and

trader

bloc—once

customer and still

our

best

our

second best

and

to reap some

Looking briefly over Britain's
important past five years, one can
clearly

that

see

rehabilitation
albeit

has

fits

halted

been

and

giant strides

effected,

only to

made
when

1947

1946

starts.

were

substantial

very

bal¬

the

of payments crisis

may,

thinking regarding the fu¬

now

of trying
in

the pound.

at fast about

seems

reward for her years

austerity and effort but,
with
Canada, the
other democracies, is

company

States

and

with

faced

now

burden

the

heavier military defense

expendi¬

and it is logical to assume

tures,

the

that

cost

rearming

made at

was

fixed

the

from

very

ap¬

tection
an

against the vicissitudes of
exchange market.

It is

Interesting to observe how

pegged rates have promoted rather
than

deterred

tion.

confidence

amassing
position that

renewed

surge

downward

and

condition

financial

dollar

States
the

record

This

sue

standing at

of $1,789

million.

ulative

dian

brighter.

continued

part of 1950, when

perceptibly
misgivings about

Early

devaluation results seemed to lack

justification and, although it could
not be pretended that the country
out of the

was

wood, it also could

not be denied that

production and

exports were rising well, that gold
and
dollar reserves were being
rapidly replenished, and that sen¬
timent
concerning
the
pound
sterling's value was improving in
foreign markets.
the

For

1950

the

—and

vis

showed

area

the dollar

favorable

in the

currency

and

backing

safe pro¬

dollar

blew

out

whole
area—

balance

trading.

Great

trading account was
but, with the addition
from invisible exports,

revenue

substantial overall surplus

very

acquired.

The

excellence

this recovery is reflected striking¬
ly in that country's accumulated
gold and dollar reserves. These
at

the

tion

time

sterling

had

1949

million.
stoor

devalua¬

fallen

$1,340

March

$1,984

31, 1950 they
million, on June

30, /1950 at $2,422 million and on
Sept. 30, 1950 at $2,756 million.
More

than

Within

less

doubled

three

mentioner

weeks

date

year.

the

these

last

reserves

further

were

strengthenel by no
$506,000,000. A goodly

than

part of this latter sum,
"hot"

was

however,

suddenly

money

pumped in from countries abroad,
including the United States, and
suspected
to
be
for
exchange

cuperative

adverse balances

place,

to move in response to

vival

The

strong evidence of

confidence

of the pound
an

the

sterling and

almost

value

expres¬

incredible

the pessimistic

which

re¬

opinions

prevailed univer¬

ago. The British fi¬
authorities aver however

year

that, in spite of this

spectacular

of gold and dollar re¬
their present total is still

recovery
serves,

inadequate
safe

currency

provide

full

protection

and

justify
a

Action

of
no

questioning the

its

head

and

doubting

necessity for it.

Such a step
clearly become imperative in

had

the

protection of the national in¬
and the general economic

terest

cur¬

our

Purchasing and Distributing

COFFIN & BURR

State, Municipal, Corporation

INCORPORATED

and Public Service

and

re¬

Canadian

financial

CHICAGO

NEW YORK

event

General Distributors

BANGOR

PORTLAND

HARTFORD

NEW ENGLAND FUND

important

Securities

BOSTON

MEMBERS—BOSTON STOCK

outstandingly

Company

Founded 1898

character.

NEW

YORK

MIDWEST

the

EXCHANGE

CURB

EXCHANGE

Organized 1931

(ASSOCIATE)

STOCK EXCHANGE

the recent unpegging of
the exchange rate of the Canadian,
dollar, thus allowing such for¬
year was

eign exchange operations as are
permissible
under
the
Control
structure to be transacted at open

market rates.
At

last two Annual General

our

Meetings
the
rate

ventured

any immediate revision of
basic nature in their
Exchange

mention

dangers of habitual exchange
fixing and also questioned

the

ability of the International
Monetary Fund to keep the coun¬
tries signatory to the Monetary
Agreement faithful to their
tractual

sure

under

came

the

Municipal Bonds and Notes
★

Complete facilities for municipalities
tication and financial

pres¬

of economic nationalism

and

★ Purchasers and wholesalers of Municipal
and Notes.

Specializing in New England

Bonds

BOSTON

names.
1784

pound devalua¬
countries have altered

tion,

their

official

commencing with

Britain's

flagrant

"FIRST
NATIONAL BANK

period of approximately

months

Great

authen¬

li.r

self-interest.
Over

operations.

con¬

undertakings when those

countries

rates

breach

The

Neighborhood Bank That Serves The World

MILK
T.

STREET

TELETYPE

BS1

seemingly

the

Fund's

regulations, and it has become ob¬
vious

that the Fund has proved
incompetent to perform the func¬

tions for which it
Under

the

exports

greater mutual trade

sustained

birth

nancial

current trad¬

seems

Canada's

Canadian

sally

now

supply and

demand, speculation in

can

wisdom of the decision to give the

dollar

market rate free

-s

unlikely, it
would be reasonable to anticipate
the early development of a more
receptive market in Great Britain
for

which

need be said

about

There

the
our

;

Wisdom

the

dollar

With

The one-way

longer exists.

Cana¬

radical reversal of this trend takes

was

country's

ing account have been diminished
in
a
striking way. Unless any

acter,

sive

the

power:

speculation purposes. This influx,
even though of unwelcome char¬

versal

our

the peg did.

option the fixed rate provided no

own

deficit

was

months

nine

current

Britain's

vis

actual

first

sterling

Canada
time

Lack

shifted

sterling

was

designed.

Dealers in

circumstances, little
on

rate

this aspect of the

decision, unless it

INVESTMENT SECURITIES

that whereas the previous de¬
fections of other countries were

Members

only in respect to the permissible
stipulated percentages of rate

and

alteration, Canada

went

one

New York, Boston and

better

Midwest Stock Exchanges

New York Curb

and abandoned adherence to fixed

Exchange

rates completely.
Action Came at Appropriate Time
In

Canada

welcomed
dollar

the

business

liberation

with

world

announcement

relief

feelings

of
and

that the authorities re¬
sponsible for the change could be

MOSELEY & CO.
Indianapolis

Chicago

New York

Boston

IBA PAST PRESIDENTS
1949-50

1948

1947

EATON & HOWARD

BALANCED FUND

STOCK FUND

PROSPECTUSES OF THESE TW O MANAGED INVESTMENT FUNDS
MAY

OBTAINED

FROM

EATON

YOUR

INVESTMENT

DEALER

HOWARD

INCORPORATED

BOSTON
INVESTMENT MANAGERS FOR OVER

24 Federal Street
Albert T.

Armitage

Hal H. Dewar

BOSTON
Julien H. Collins
•o

.the

recently
victimized
disappeared at the same

which

one

drove

free market.

peg—faith

dangerous nature of

emerged.

became

prospects

size and

peg.

the

includes

but, allowing for that, it can

our

faith

sterling

"hot"

which

movement

Canada into

which really forced the is¬

still be considered ample
for

ac¬

United

and

eserves

sum

figure

money

and

gold

repetition

speculative movement of the

progress

movements

into the early

the
time and under most forced
pound
devaluation.
propitious circumstances, with a Conversely, abundant confidence
the
intrinsic
value
of
the
currency never higher than now in
in world esteem, a strong internal Canadian dollar created the spec¬
cumulation

It is quite safe to say

that the chances of any

the

poundk encouraged
of the short sterling

stockpiling
will
hamper
the
in rapidity with which she might
1948 was followed by the period otherwise have achieved full eco¬
of anxiety which culminated in nomic rehabilitation.
the September, 1949 devaluation
As we have seen, Great Britain
of the pound. These upward and
has shown remarkable dollar re¬
ance

necessarily

not

resiliency.

specula¬

currency

Lack

will

rency

completely eradicated, but it will
certainly be greatly deterred by
the automatic correction of rate

open

propriate

little doubt about what the world

Great Britain
Rehabilitation

Britain's

the free

rate poli¬
there is

exchange

that

and

transition

The

Canada

ture exchange trend of

worthy of comment.

one—are

Control

cies.

and also
courage
in

ingrained 11-yearold
policy,
blatant though the
necessity for abandonment was.
abandoning

Conditions Affecting
worldwide

vision

their

Economic and Financial

Thursday, December 14, 1950

The Commercial and Financial Chronicle...

TWENTY-FIVE YEARS

333

Montgomery Street

SAN

FRANCISCO

Volume

172

Number 4968

The

It was justifiable from every
point of view and there need be

apprehension

be they short or

Among

the

long term.

benefit

dollar to

decline in

world

markets is now perceptible.

Dollar

currency, encourage the in¬
flow from abroad of the plentiful
capital known to be seeking long-

term investment in our industrial

softening to the exchange advan¬
tage of the softer currencies. This

enterprises

process

ment

of*-

in. the

and

great

our

natural

both-way transaction
ternational

business

than

greater

the

behavior

first two

ex¬

during the

three days of freedom
a
natural
hesi¬

showed

tancy

the

market itself,

its

quotations,

but

quickly settled into its stride and
is today functioning normally and
smoothly;
;■
„

has

Canada

lead and set
countries to

given

the world

example for other

follow, and the

pros¬

much

rosier

tion twelve months ago.
The international exchange pic¬
ture has undergone a tremendous

^change during the past
The AJnited

States

year.

in addition to their huge expendi-

ttures in Marshall Aid, loans, and
other forms of financial assistance
to soft currency

countries has been

carrying the physical and finan¬
cial

burden

and

against
This
the

war

preparations
possible major conflict.

necessitated,

increase

and

not

only

conservation

production and the

own

constriction

verest

Korean

defensive

has

their

the

their

of
se¬

ex¬

ports, but also a huge increase of
strategic material imports at ever-

soaring prices.

All this had had a
effect on their bal¬

shattering

international

ances

the extent of which
ciated

1947

deficit

three

small but

incurred

for

the

months'

trading ending
It is not sur¬
powerful financially as

Sept. 30, this year.

prising,
the

United

these
tional

States

is,

that

under

circumstances, plus the addi¬
one of a fly-by-night specu¬

lative movement of capital out of

the'

States

declined

exchange

gold

reserves

$1,136 million
since the beginning of this year,
but, even after this loss, that
country still holds 60% of the
by

world's total stock of monetary
gold for the protection of its cur¬

The hoarding

rency.

over

higher

even

several

this high

one country of

world percentage, and

at times

has been auto¬

one,

matically

retarding the
muchreplenishment of many

needed
other

countries'

which

have

weak.

reserves

remained

broader

gold

deplorably

and

less

one¬

sided spread of the metal than

only

essential,

cient

currencies

and

now

this is the

by which the gold defi¬

way

future

has

been

armament

afoot

and

Canada,

with her democratic allies, is en¬

can

permanently

reliably

strengthened.

taking

ings, should be
faction

matter for satis¬

the States rather

than

universal

wanted

freedom

which the international movement

flow

with

greater

benefit

trade

and,

States

themselves.

this

ease

consequently,

Looked

the diminution
huge gold stocks

way,

States'

and

international

the

in
can

the

latter.

en-

must face the fact that this is the
essence

task

our

towards which

and the goal

must all stead¬

From

this

transition

which, in

the

economic

can

possibly be derived.

in
to

the

world,
in

assess

broad

any

how

way

our

own

economy will be affected.
From
now onwards a very much larger

immediate

financial

incidence

this

necessity has been reflected
in the September revision of this
year's
national
budget
which,
based on the pay-as-you-go prin¬

ciple,
taxes
enable

ture

increased certain existing
imposed new ones to
this year's total expendi¬

and

exceed

by $244 million
the expenditure budgeted earlier
in the year.
This, however, is but
the thin

edge of the wedge,

must

have

anticipate,

been

forewarned, that in
much heavier additional

1951 very

taxation
will

indeed

and

all-round

imperative.

nature

This

pros¬

pective addition to existing taxa¬
tion, which already absorbs over

interests
be

cannot

shelved,

mental

when

manpower

reserves

influences

limited

are

become

ices.

Under this

and

become

must

what

the

liable

probable handi¬

making

that

this

will

state of preparedness

in collabora¬

Vice-

1926.

been

has

active

various capac¬

ities in organ¬
nected

con¬

with

tion

with

may

help to arrest the march of

other

democracies,

communistic aggression and avoid
a

third

the

world

shape

war.

price

present-day

sacri¬

fices would be too high to pay for

avoidance

and

such

if hopes

even

enable

prove

trial comes, our pres¬

catas¬

the better to

give

surely
a

good

Hazen S. Arnold

the investment

banking pro¬
fession, and is

former

the

former Chairman of the

Securities
Association.

that

the

Canada,

embarking

expansion

dynamic

but

Walter M.

dent

and

Braun, former Presi¬

one

the

elected Chairman

Other

directors.
Fred

are:

of the

officers

Vice-President

and

dent

and

Be N.Y.S.E. Member

Dominick & Dominick
To Admit 3 Partners

DETROIT, Mich.—Ralph Fordon,
partner in Fordon, Aldinger & Co.,
Penobscot

Building,

Detroit
21

will

Stock

members

Exchange,

of
on

acquire membership

in the New York

Stock Exchange

are

Other

Albert H.

Dominick & Dominick,

Spurdle, Hollis K. Thayer and
Weimar to partnership
on Jan.
1. Mr. Spurdle, who has
been with the firm for mahy years,
W.

Arthur C.

is Manager

of the investment ad¬

visory and statistical departments.

Massachusetts

Diversified Investment Company

may

be obtained from

investment dealer
investment

funds

may

to the shares

any

of these separate

he obtainedfrom authorized dealers

VANCE, SANDERS
111

DEVONSHIRE

YORK

Broadway

E
LOS

CHICAGO
120

South LaSalle Street

your

local

The Parker Corporation,

Berkeley St., Boston 16, Mass.

COMPANY

STREET

BOSTON
NEW

200

210

ANGELES

West Seventh Street

TWENT Y

F I IF T H

14 Wall

Street, members of the New York
Stock Exchange, will admit John

^Aassachusetts
Investors Trust

relating

Treasurer;

Fordon, Aldinger to

OF BOSTON

prospectus

Senior

Vice-Presi¬
Secretary; and Norman

Bond Fund

elected

Vice-President; Clifton A. Hipkins
of New York
City, William H.
Hammond of Chicago, and Wil¬
liam M. Adams of Detroit, VicePresidents;
Carl F.
Bargmann,

the

Prospectus

board of

Bargmann,

era

Bolton Pdund

founders

Braun, Bosworth & Co., has been

J. Fields, Assistant Treasurer.

Aldinger and Cyrus B. Aldinger.

Glass

Franklin L. Schroeder,

account of ourselves.

must

Investors Second Fund

Company.

that promises to be

character,

Committee

Indiana

Vice-

Investment

Bankers Association of America as

director

of the late Frank J. Foley.

the aspects

Ex¬

been

well

partners in the firm

are

has

ecutive

Municipal

towards

considerable degree of dislocation

Many

Arnold, who

President

unhappy task, but there

occur.

an¬

Mr.

izations

itself

capital goods, such as machinery,
vehicles, aircraft, ships, etc., and a

by that country as| a
blessing in disguise and not a
matter for apprehension.
\

Ar¬

the

company

working energetically

the

industries

vestment

bankers,

always remains the hope that, by

Dec.

greater industrial effort fall¬

the

severe.

time

only

the inevitable consequence of the

nation's

tempo, with the main weight of
.

every¬

It is difficult to escape

conclusion

the

increasingly

extent

will tell.

cap,
industry must nevertheless
be switched and urged to faster

ing

the

sense

ent and future efforts will

industrial

profit

day consumer's standard of living

vain

and

Ohio—Hazen

Braun, Bosworth & Co., Incorpo¬
rated, Toledo Trust Building, in-

since
1939,
joined the firm

trophe and,

Program

TOLEDO,

nold has been elected President of

President

the

Our defensive program will de¬

Braun, Bosworth

term

25% of the gross national product,

Defensive

On the
contrary, it is obvious that, as the
armament
program
gets
pro¬
gressively underway,
its detri¬

will not be easy to bear.

Canada's

national security,

the

considered

Hazen Arnold Pres.

nounced.

ily march.

other

political
regret; It is a constructive move-! developments demand that larger
ment towards attaining the long- numbers enter the
fighting serv¬
foreign exchange markets through

feeblement

but it is

difficult

place

the United States hold¬

consumption to the

countries

whereby the mand a further increase in pro¬
non-dollar countries'
gold hold¬ ductivity at a time when our
ings are being improved at the economy is almost at full stretch
expense of

replace production destined

for normal

the

strengthening is so ob¬
viously desirable in the general
world interest, the redistribution
now

must

cussions of which will profoundly
affect the economies of all the

than

of t^'s industrial transition which

might be discussed, but they are

gaged in the Cold War, the reper¬

this

with

their

$11,500 million with

actual

United

will

overall international trade surplus
of

The

have

be appre¬

can

that

the

dimmed by the mounting tension
in world affairs.
Universal re¬

decline to the point Where an. portion of our nation's resources
The
exchange crisis would be created. must be devoted to defense.

payments,

comparing

much

for

reach, the

our

can

exists

America,

become

and

recent

presumed

now

that the dollar gap is disappearing
with a rapidity beyond concep¬

carrying

value of the United States dollar

years

pects of their being able to do so
become

the

months, but it
verging on the ridiculous

would be

been

international

responsibilities

have

heavier

for

has

which

broader

make

trading and
through the most profit¬

change

have

States

in¬

our

the

financial

multilateral

direct it

hitherto,

able channels.
As

is the natural and logical

consequence

re¬

It will also stimulate the

sources.

scale

develop¬

possibly
insuf¬

splendid postwar recovery ap¬

outlook

The hardest of all currencies

might

through

peared well within

Advantage

our

which

circumscribed

ficiency of population, is about to aii ixxCiuencai to ana do not alter
complete a year of great economic the one fundamental and over¬
accomplishment.
Unfortunately, riding fact that greater production
however, and just as the fruits of destined for possible destruction
a

Softening

greater confidence in

even

(2339)

States

many

will

foster

Chronicle

ironically enough in Eng¬
land's also,
a
tendency for the
exchange value of the United

advantages
ensue,
in addition to
checking inflation, are that it will

that

Financial

and

to its effects,

and

the country in our own direction,

one.

Commercial

\ ANNIVERSARY

YE A R

Chronicle

The Commercial and Financial

€3

4
caused

The Business Outlook
building activity, were apprehen¬
that troubles would be en¬

sive

countered

the

fifties.

early

these authorities were
Dot unmindful of their anxieties
fci late 1948 when building pros¬

Moreover,

pects looked somewhat less prom¬
ising. In short, the defense pro¬

cannot be expected to sus¬
activity at rates
which prevailed prior to Korea

gram

tain

business

because

those

new

trols afford

with $12.3 billions
in 1950, a net decline of nearly
$5.5 billions, or about 27 percent,
in
all
private
construction in
lions compared

1951.1

Automobile
of

Production

support for this view¬

materials needed for
defense, and to curb inflationary
trends. We are told that Regula¬
tion X is designed to reduce nonfarm
residential starts from an
estimated 1,350,000 units in 1950
to 850,000 in 1951. The latest F. W.
Dodge estimate is that residential
construction of 800,000 to 850,000
non-farm units would meet rea¬
sonable needs in 1951. This esti¬
mate assumes that present regu¬
lations
will be modified some
conserve

manu¬

Many

these

orders

When these
orders were placed, the prospec¬
tive delivery dates were length¬
ened. Under such conditions, the

Output

point. They have been imposed to
correct the excesses of the boom,

facturers.

orders

new

Still another
source
estimates total residential
construction in 1951 at $6.7 bil¬
1951.

starts

Probable

credit and other con¬

represented extravagant assump¬
tions about future sales and fears

mally high.

The

lanche

differing assumptions, range from
400,000
to
600,000
residential

rates were abnor¬

Probable Building

'short-lived buying stam¬

by the ultimate consumer,
but they also resulted in an ava¬

produce this re¬
estimates, based on

Other

only

not

pede

time next year to

sult.

troubles

Korean

and

trucks

Output

passenger

the

United

and Canada in 1950 may

cars

States

approxi¬

units, compared
annual produc¬
tion of about 5,300,000 units in the
1940-49 period. The combined ef¬
fects of Regulation W and mater¬
ials
shortages may reduce 1951
output to two-thirds or less of the
1950 total. In addition to reduced
mate

with

8,500,000

average

output

these

two

of wartime shortages.

invariable
ders

the hope
of securing larger early alloca¬
tions of finished goods. This sud¬
den and very large expansion of
orders
was
responsible for the
sharp rise of industrial production
and
prices,
full
employment,
swollen payrolls and for much of
the subsequent growth in
bank
loans.
We
are
slowly realizing
that

ber

"borrowed"

been

evident

key indus¬

Week," Nov.

18, 1950, pp.

89-90.

will

forces

Inventory Investment

very

has

the

work for

does

not

wage

mean

earner.

Wage increases will have uneven
effects.
Cut-backs
will
reduce
over-time

substantial
which

earnings

have

prevailed for many
Large
sectors
of
the

months.

will

population

income

creased

and proposed

have

not

1951.

in¬

Present

taxes will take lar¬

bites out of personal incomes.
Many industries are facing diffi¬
cult selling conditions.

ger

basis,

you-go
the

income

out

will extract from

what

for

stream

pay

military purposes. While
the building of great stock piles
of

strategic materials adds to the

demand

and

stable

fosters

rising prices for such materials, it
place demands on fabri¬
facilities until the stored

does not

cating

products
build
arms

ducts

and

forces

clothe

larger

1951

materials

and

made

not
other

tanks

feed

nor

armed

and

used.

are

planes,

1952

with
be

and

pro¬

grown

subsequent

However
necessary
de¬
expenditures may be, they
drafts on current production.

years.

fense
are

There is that much less for civil¬
ian

uses.

No Guaranty of

Defense Program

Economic Aspects of Defense

Business Boom

Program
The
There

economic

defense expenditures.
tain

this

program

magic in

we
a

main¬

pay-as-

best

defense

proximate 15 percent of
national

is that

present guess

expenditures

product.

ap¬

may

our gross

Great

this

IBA

PAST PRESIDENTS

1946 -47

Factor

1945 -46

1943-44-45

Charles S. Garland

John Clifford Folger

significant new study
published on this sub¬

been

ject.2 It warrants special attention
in

outlook. With scholarly cau¬

the

tion,

State—County—City
Bonds

—

Warrants

busi¬

of the

consideration

our

ness

that

concludes

author

inventory investment is "the most
volatile of the main components
of

output"; that usually the rate
fluctuation is larger than "in
construction or in
the flow of
of

durable goods to either
Local

Corporation

consumers";

producers
that inven¬

and

contraction and expansion
a
"very considerable
portion of the cyclical change in
total output."2
During five busi¬
ness
cycles
between
1919 and
1938, net change in inventory in¬
tory

Securities

represents

ex¬

fluctuations play a
important role in the ups
downs of business activity.

Recently,
1 '"Business

volume

physical

1951.

may

and

Inventory
and

of other industries.

prudent

1951. Na¬

from

corrective

tural

considerable amount
business has already

very

civilian

tries, similar factors will cause a
substantial curtailment in a num¬

experience is that or¬

pyramided

are.

cautious
buying than we have experienced
in the recent past. The real test
of these higher prices lies ahead.
Very probably, they will cause a
decreased
physical
volume
of
sales. On the income side, lower
pect

Troubles
Our

with goods,

stocked

Economic Impact Korean

Continued from page

Thursday, December 14, 1950

...

(2340)

STERNE, AGEE & LEACH
MEMBERS

MIDWEST STOCK EXCHANGE

BIRMINGHAM

Long Distance 9983

Branch—Montgomery

accounted

vestment

ALA.

Teletype BH 97

Alabama

the aver¬

largely confined to manufac¬

ulti¬

ies, including inventories of

southern

textile

mate

South
General

consumers.

securities

Carolina

Municipals

Corporate Securities

a. m. law & company
Member

Midwest Stock Exchange

Bell

at record highs,

now

are

New

York

Co.,

Correspondent

1920

ESTABLISHED

that

indications

growth

inventories

probably

will

goods

move

UNDERWRITERS
Southern

con¬

Telephone:

into direct consump¬

much

rapid

DISTRIBUTORS

DEALERS

Building, Washington 5, D. C.
Bell Teletype:

District 3060

Branch

tion

EXCHANGE

WA 95 & WA 28

unless

months

several

for

STOCK

are

dollar

tinue

EXCHANGE

STOCK

PHILADELPHIA-BALTIMORE

beginning to grow in
and physical terms.

now

are

MEMEERS
WASHINGTON

There

levels.

August

some

Johnston, Lemon & Co.

or¬

new

September fell somewhat

That
Teletype ZP 67

very

both

SPARTANBURG, S. C.
Long Distance 51

give due weight

should

volatile factor which
has such a profound influence on
business activity. While back-logs
this

below

1892

Wire

Spotty Business Ahead
We

ders
Established

Private

Carl M. Loeb, Rhoades &
our

properties

and

Direct

available for total inventor¬

were

SECURITIES

WASHINGTON

figures

adequate

supported
Dealers

Firm Markets In

for about one-third of the
change in our gross national pro¬
duct. While this particular study
was

Distributors

Hopkitison, Jr.

age

turing inventories, the main con¬
clusions
would
be
additionally
Underwriters

Offices:

Alexandria, Va. and Lexington Park, Md.

rate

in the recent past.
There is normally a lag of sev¬
eral months between the peak of
than they have

production

and

cumulation.

Large

inventory

pansion superimposed
stable

-CALL

FOR

BIDS

foundations

Korea

boom

ac¬

inventory
on

the

un¬
pre-

special

create

may

ex¬

FERRIS & COMPANY

problems in the first half of 1951.
Defense orders will

but

still

will be

Municipals

they

but

back-logs
iod

worked

down.

Selling

full

impact

hot

costs

In Securities of

sumers

are

past

now

higher

and

prices

completely

been

yet

flected in retail prices.

for

DISTRIBUTORS

Since

heavily

purchases

and

Washington

Corporations

re¬
con¬

debt

Washington Bldg., Washington 5, D. C.

well

Telephone—Sterling 5924
2 Moses

Telephone—3020

Bell

Teletype—WILSON NC 100

Business
Economic

Ibid,

DEALERS

Primary Markets

Resistance

manufacturing

WILSON, N. C.

UNDERWRITERS

Problem
The

Banking & Trust Co.

(Associate)

to be facing a per¬
spotty business

seem

Price

Branch

Yorh Curb Exchange

somewhat

conditions.

has

New

Exchange—Washington Stock Exchange

slacken¬

moderate

are

New York Slock

ing in production as civilian order

best,

State and

that

large enough to prevent

noticeable

North Carolina

doubtful

Members

the tran¬

ease

sition to better economic balance,

Abramovitz.

"Inventories

475.

Bell Teletype—WA 263

and

Cycles,"
National
Bureau
of
Research, Inc., New York, 1950.

Correspondent and Private W ire System

—

SHIELDS & CO.

\
]

Volume

expenditure
in

itself

will

civilian

the

bly, the
siderable

business

cannot

orders

that

economic

markets

than

wisdom

would

allocate

irresponsible

nor

talk

government regimentation
inspire this necessary confi¬

eextremely astute judgment—not
of
our
capacity to produce but

with

identical volume of civilian

"crack¬

dence. What is feasible under par¬
tial mobilization is a matter of

defense

allocated

there is

out

will

con¬

cause

unsettlement.

assume

can

greater
free

will

and permit free markets to work

threats

about

Inevita¬

economy.

program

the official wholesale price index
has moved

Neither

downs"

conditions

boom

(2341)

1950.

guaranty

Financial Chronicle

granted under the Defense Act of

it does not
of

be,

provide

continuation
in

The Commercial and

Number 4968

172

rather

tolerance

our

ticular restraits which

busi¬

The defense program

for

are

par¬

deemed

the

desired

price adjustments
without adding oil to the fire. Un¬
der the Defense Act of 1950, the

will achieve the objective of safecontraction. It is necessary to pro¬
ceed
cautiously
by
"trial
and

Federal Reserve Board has moved

error"

percent.

promptly

When

hostilities

general

price

level

the

are

credit.

make certain that the non-defense

tors rush into markets to

over-extended

part of the economy is enabled to

ished

maintain

itself

which

too

parts of the

econ¬

task

now

its of its powers, it has also moved
with

chief

Our

the

Consumers,

distribu¬

manufacturers and

tors,

impose restrictions
grant of installment and
to

real estate credit. Within the lim¬

membered.

end.

mere

nor¬

necessary

mal expectation. Past experiences
under similar conditions are re¬

is not
work-making device for
giving new strength to weak and
a

break

out and the threat to world peace
looms large, sharp advances in the

secure

simple formula which

slightly above the alltime high of August 1948. Since
last June, the weekly wholesale
price index has risen nearly 9

necessary

ness.

courage

expansion

How

specula¬

subsequent

buy fin¬

mains

goods
or
raw
materials
they believe will be in lim¬

recognize very frankly
the extremely difficult and com¬
plex nature of the defense prob¬

strong,
healthy condition with neither too

ited

much

are

lem

intervention. We need both public

seldom large enough to meet
these sudden, abnormal demands

and

to check dangerous
other
forms
of

effective

efforts

these

may

and
re¬

seen.

methods, relaxing

ening

controls

such

tight¬

actions

be required. These controls
inevitably produce economic dis~.
locations because, as members ol
the Board have often said, there
may

"painless method" of secur-s

the

ing

contraction^
must not expect tooi

necessary

Moreover,

much

these

from

must

measures.

supplemented

The/

other

and

omy.

and

soned

sites for its

with

cooperate

rea¬

requi¬
intelligent execution.

patience

prime

are

nor

private

little

government

policies

which

con¬

supply.

tribute to this result.
Recent

Policies to Promote

Business confidence is the great

fragile force that shapes

business
we

future.

need extreme

our

it,

preserve

care

Movements

Wartime

Confidence

and

Price

and caution

in the exercise of the powers now

Typical

Experience

inventories

evidence

will

mands

that

Prices

met.

military devel¬
a mat¬
of the greatest public concern

in this field of
monetary restraints,

opments, the price trend is

and

ter

initial shock affects

and

business

major factor in current
uncertainty.
Recently,

Members

strategic

Somewhat

the

prices

turn

materials.

later, higher

Curb

Utility

Public

Active Markets in Local Issues

ma¬

reflected

spotty

and

Municipal Bonds
Industrial

wholesale price index

The

weighted

Issues

Telephone: Baltimore

Lexington 0210

—

Teletype

—

New York

—

"WHitehall 3-4000

BA 270

As such, it con¬
disparities in the

average.

the

ceals

Md.

111 E. Redwood St., Baltimore 2,

price

in different lines.

occur

Disparities in Price Changes

and

Exchange

(Associate)

finished goods.
delay the re¬
normal prices. In¬

grow

conditions

raw

are

Bell

Railroad,

Stock

Exchange

costs

ventories

United Stales Government and

York

New

York

Philadelphia-Baltimore Stock Exchange

added

These

INVESTMENT BANKERS

New

broad range

of items, particularly

range

terial and other costs

INCORPORATED

wide

of price changes among
differing products. When we look
degree

BALTIMORE

FIDELITY BUILDING
Telephone Plaza 2484

Private

—

Bell Teletype

—

1, RID.

BA 499

index

broad

groups,

find

—

Bell

National

Bank

Bldg., Easton, Md.

Teletype—ESTN MD 264

have

about

advanced

while

grain

prices

percent

have

moved

Government

•

only moderately higher and live¬
stock prices have declined

Food

ly.

group

about

rose

prices

8.6

slight¬

but

ESTABLISHED

1900

Members

Stock

York

New

Philadelphia-Baltimore

Associate

Members

New

York

nearly 22 percent; chemicals,
18.6 percent; building materials,
8.4 percent; metals and metal pro¬
ducts, 4.1 percent; and fuels and

Stock

Dealers

materials, only

1.7

per¬

Exchange

there

course,

Land Bank Bonds

these

County

Maryland

Municipal .Bonds

and

Established

Members

changes.

important

Active Market in Local Securities

stresses

strains

and

balance

economic

new

REDWOOD STREETS

Exchange (Assoc.)

Philadelphia-Baltimore Stock Exchange ^
Direct wires to

Los

Conrad, Bruce & Co.—San Francisco,

Angeles, Seattle, Portland; and Cruttenden & Co.—Chicago

business uncertainties mul¬

occur,

established

the

raise

and

vances

will

natural

correct

forces

BALTIMORE 3, MD.

1899

the

tiply. We know that evenutally
CALVERT &

Brokers

of New York Stock Exchange

New York Curb

understand

price structure. When these sud¬
den changes in price relationships

Listed and Unlisted Stocks and Bonds

—

wide varia¬

are

tions in percentage

Exchange

Underwriters

John €. Legs & Company

Effect of Disturbed Price Balance
Government and Federal

—

cent. Within each of these groups,

Exchange

Curb

Securities

lighting
Members

Corporate

•

meat

lower.
is now

fractionally

were

Municipal

prices

average

percent,

The textile products index

BAKER, WATTS & CO.

YORK

Insurance Stocks

that since last June farm products
Office

NEW

BALTIMORE

break-down of the general

the

Telephones to New York and Philadelphia

Branch

page

prices; but afterward it is
mainly concentrated on a nar¬
prices

c. t. williams & co.

control

to
on

rower

designed

Continued

Mead, Miller & Co.

tion improves or deteriorates. The
a

techniques

Unfortunately,
credit

de¬

often

erratically for a consider¬
period as the military situa¬

able

Techniques of Credit Restraint

until

the

move

future

Existing

prices rise rapidly.
The
high prices persist

there
Need for

economic

extreme

ad¬

de¬

prices

groups, but the process
requires time. The readjustment
is usually difficult and costly. We
are now confronted with a badly
distorted price structure.

pressed
Representatives

Telephones:

New

Clarksburg,

—

Va.,

Baltimore—Mulberry 2600

York—CAnal 6-71G2
Bell

and Salisbury, Md.

System Teletype—EA 395

Direct
The

Control No

problem

Solution

cannot

solved

by the

imposition of direct gov¬
ernment price controls. Such ef¬
would

forts

INVITE YOUR INQUIRIES

rent

accentuate

imbalance.

ernment

and

regulators

intricate

maze

the

cur¬

body of gov¬
success¬

can

fully restore balance
of

in the vast
price rela¬

tionships. Under partial mobiliza¬

BALTIMORE

RYLAND

SECU

ROBERT GARRETT i SONS

general freeze of price
relationships is feasible; and with
general
mobilization,
such
a
freeze can be only partially ef¬
tion,

fective.

must

ESTABLISHED

restraints

These

Established

damage
create

new

N. Y., Rector 2-3327

NEW YORK

Washington, D. C.

Cumberland, Md.
MEMBERS OF

NEW

YORK STOCK

and other leading

New York Stock Exchange
New York Curb

Exchange (Associate)

Philadelphia-Baltimore Stock Exchange

EXCHANGE

exchanges.

Promise

Money

and

Credit Restraints

Phila., Pennypacker 5-5175

LOUISVILLE

PHILADELPHIA

MEMBERS

1853

Bait., Saratoga 8400

good

output of needed goods.

6 S. Calvert St., Baltimore 2, Md.
Phones:

often

because they
obstacles to maximum

than

1840

be supplemented

by production and ration controls.

SteinBros.&Boyce

69-

the

economist's

parlance,

exchange values ex¬
pressed in terms of money. They
depend not alone on the supply
and demand for goods, but also
prices

are

the supply and demand for
and credit. When we re¬
strain unsound expansion of

Garrett

Building

BALTIMORE 3

115

Broadway

NEW YORK

6, N. Y.

upon

money

and

credit

supplies, we
prices

exert enormous pressure on

Private

Wire Between Baltimore and New

York Offices

The Commercial and Financial Chronicle

(2342)

Continued, from page

the

assumptions

which

Whether

based.

Thursday, December 14, 1950

...

factors

random

will invalidate the assumptions on

which this

The Business Outlook

nomic

aggregate production as back-logs

offer

Prices

control.
toms
ness.

bly

mitigate its ravages by attempting
to
regulate its symptoms.
The
analogy is far from perfect, but

the

cannot

past.

of 1951

the

judge

designed to make clear the
unstable nature of the pre-Korea

expansion, the new stresses and
strains
superimposed upon that

stilts faces diffi¬

grim reality is now compell¬

the

physical

will be
Inventories

smaller.

lines of consumer

most

volume

sales

adequate

to seek a more solid foot¬
ing in order to bear the new load.
about

goods.

business expan¬
1950 came in the second

Since the great

en¬

larged

sion

fects

and

third

defense program, the ef¬
of existing and probable fu¬

quarters,

may

ex¬

controls, tax burdens and the
military
outlook
indicate
the

pect that many customary meas¬
ures of business activity will con¬

early development of spotty busi¬
conditions. It is doubtful that

the

ture

will be

expenditures

effects

abnormal

appraisal

and natural contraction following
an

them

during
the same

outlook

expansion.

can

Evans

Birr, Jr.

E. J. Evans and H. T. Birr have
been

directors

elected

Blair

Holdings Corporation, it was an¬
nounced by V. D. Dardi, President.
Mr.

Evans

board

President

Birr

California Company,

First

the

Chairman;

Mr.

and

investment banking

firm recently

acquired by Blair Holdings Cor¬
poration. One of the nation's larg¬
est retail securities organizations,
California

First

offices

ates

Company
in

oper¬

principal

the

cities in California and Nevada.

over

the commission

salesman

had

been

which he earned.

obtaining

it is:

Here

occasional order from

the economic
any better than

Effective

Jan.

2, Nielsen,

Gor¬
of the New
Exchange,
will be

don & Hall, members
Stock

formed with offices at 120 Broad¬

City.
Partners
Nielsen, Irvin H.
Gordon, Paul J. Gordon, Frank L.
Hall,
Richard
A.
Adrian,
the
firm's Exchange member, Flo,yd
York

New

way,

will be Gerald B.

North Carolina, South
and General Market

Carolina,

Municipals

his

investment

own

York

New

business

and

resources justified a
receiving. He also had heard

floor

Georgia

active

been

with

individual

Mr. Augustine

broker,

J. Devine &

Isaacson

ATLANTA, GEORGIA

was

Co. and Mr.

with

past

the

was

Pflugfelder & Rust.

New York

Representative

No additional candidates having

Telephone: IIAnover 2-1561

Private Wire

rate this salesman decided

any

find out just what

parcel out small-sized orders to several securities men.
So he made

his

business

hosts

appointment for

evening call.

Bell

His

avid canasta players and he joined them.

The evening
but still he didn't talk securities. Finally about 10:30 his
host asked, "What do you think of XYZ fund?"
Here was the
break that he was anticipating.
He stopped, put down his cards
were

went on,

and

said, "I know quite

hand

and

can

a bit about it.
How about finishing
it over?" This they proceeded to do,

talk

salesman, then realizing that

our

there before him, went to work.

one

this

and
of his competitors had been

He said, "I think it is

a very

well-

managed fund on the record, and I understand they are making a
substantial payment out of capital within the next few days.
Of
this

represents capital gains

payment

more shares, and if you have some of it
rather than treat this large dividend as

is not

and

true

does

I would certainly do this;
income, which it certainly

not represent."
This called for

explanation which

to the satis¬
Possibily it took
an evening's
comradeship around a friendly game of cards, or a
combination of a good atmosphere with "knowing your business,"
but whatever caused the floodgates of confidence to open, this
salesman left that evening with an order for $12,000 worth of
some

faction of his hosts.

Thus the curtain

mutual fund shares—and it
newborn clients should

was

was done

lifted.

fund which he believed that his

buy.

As he,was leaving his hosts told him, "We just got a

this afternoon from another salesman who sold

which is

telephone
the fund

paying the large dividend out of capital gains.

He said he
was
coming out to see us tomorrow and tell us some good news.
You told us the real reason for the large year-end dividend. From
now

will know where

our

bread is buttered."

It is not necessary to point out the

right and the wrong of this

little story.
real

Surely, the salesman who didn't tell his customers the
reasons
behind their large year-end dividend payments is

paying for his lack of candor by continuing along the lines which
he has

followed, for years—he is a fifty-share salesman. He is the

opportunist who builds nothing.
this

The other

man

now

in control

account.

Opens in Puerto Rico

Sears

'(Special to The Financial Chronicle)

BOSTON,
Charlton

Mass.

has

—

Kenneth

become

SAN

associated

liam

JUAN, Puerto Rico—Wil¬
O'Brien, formerly with

George D. B. Bonbright & Co. of

been

Rochester,

declared to have been

Teletype: NY 1-2712

He made it

forget and forego all business conversation.

fices

Atlanta — New York

was

why this particular account was not investing along
own greatest benefit, rather than

With Draper,

Elects lo Office

15 Broad Street

Teletype: AT 283

NASD Districl No. 13
Telephone: WAlnut 1671

and for all, he was going to

the lines that would be to their

recently has been associated with
Sutro Bros. & Co.
Mr. Adrian
has

Mr. Hall in the past

Dec. 1.

conducted

from

Miller &

Schafer,

partnership in
Co.

retiring

Nielsen

Mr.

different fund.

once

reason

call

son.

Trust Company

always for
that for
the

Augustine, and O. Frederick Isaac¬

INVESTMENT DEPARTMENT

was

dividend out of earnings. Those who own the shares of this fund
have the right to reinvest this special 'capital gain' dividend in

io Be Formed

Specializing in Georgia, Alabama, Florida,

business than he

speak of another salesman who occasionally had sold them
They mentioned fifty and one

course

Nielsen, Gordon &

York

Bell

him

hundred share orders which they had given to this other man, and
E.

favorable

contraction

forced

the

these clients but he knew that their financial

increases

quarter

period in 1950, but these percent¬
age gains are likely to grow less
in the second quarter.

sufficient volume to offset wholly
the

show

tinue

ness

defense

<■'

business, and especially in the securities business.

any

small lots of various mutual funds.

closely geared to short time sales
prospects will continue to be pru¬
dent policy. Intensified selling ef¬
fort will be necessary to secure

Uncertainties

willing to give service, and to keep your
as
possible.
No man's clients are

great deal

somewhat

culties in carrying added burdens,

ing

investment

proposed, the following are with Draper, Sears & Co., 53 State
duly elected Street, members of the New York
take office as governors and and Boston Stock Exchanges.

N. Y. has opened

San

Juan

conduct

business.

members of the District Commit¬
tee of District 13 of the National
Association
UNDERWRITERS

DISTRIBUTORS

DEALERS

Securities Dealers,

Inc., on Jan. 16, 1951:

MUNICIPAL

CORPORATE

BONDS

York; Paul Devlin, Blyth &

District

Wilson,

STOCKS

New

Stanley

Morgan

CORPORATE BONDS

Walter W.

Committee:

Co.,

LOCAL STOCKS

York; Nathan Oppenheimer,

Vietor,

Common,

Kearns

SOLD

Joseph

CLASS A
-

STATE AND MUNICIPAL BONDS

Co.,

Darin

Co.,

Buffalo; N. Y.; Charles M. Kearns,

COCA COLA COMPANY
BOUGHT

Co., New

Inc., New York.

BONDS

COMMON STOCK

Carle

Governors:

Board

Stolle, G. A. Saxton &

Williams,
Nye,

New York;

Freeman

Co.,

New York.

Burnham & Co. to Admit

Clement A. Evans 8c Company
National Bank

ATLANTA

Edersheim

Burnham

Building

Co.,

Bell Teletype
,

at 596

tel.

Columbus
PRIVATE WIRE TO

Main

1921

Macon

KIDDER, PEABODY Be CO.,

384

Savannah
NEW YORK

and Curb

Exchange, will admit Maurits E.
Edersheim to
1.
the

Mr.

partnership

Edersheim

firm's

The

Robinson-Humphrey Company

Broad

Street, New York City, members

GEORGIA

of the New York Stock

Augusta

Partner

incorporated

First

,.t-

well-informed

illustrate

This

long

able and

may

that

point, the following is a true resume of, a
story I heard the other day. It was told to me by a salesman that
I believe really likes his job. I feel sure that the pride which he
expressed to me in the way he handled this situation was worth as

increases
to

you

true

them.
are

much

sharp

too

been

upon

Our "but¬

price

recent

feel to your customers and clients, it is
day after day other salesmen are calling
Some of these men are as capable as you. Some of

nevertheless

sacred

have

customers

less urgent than in

are

higher prices, the actual
volume of consumption

expansion by subsequent military
events, and the measures taken to
restore better economic. balance.

but

Holdings

positive that a customer thinks you are the
in his repertoire of favorite security salesmen. Regardless

man

how

them

levels.
During the first half of 1951,
consumer
spending should aver¬
age moderately higher than in the
first half
of 1950. Due to
the

Thd preceding analysis has

Of Blair

top
of

never

the pre-Korea

business

without knowledge of the

economy

Evans, Birr Directors

can

maintained, but the general price
level will hold substantially above

been

By JOHN DUTTON

prior period.

Many
have

future

than

"butter"

less

ter" needs

to indicate the basic

First Half

Outlook

greater

had in the recent past.

of the problem.

nature

Securities Salesman's Corner

ferment

expansion possibilities are more
limited. Eventually, we will have
much more armament, but proba¬

symp¬

health or ill¬
We do not Cure a malady or

it may serve

eco¬

You

defense

tions

economic

political

the

times.

our

production.
We
are
not
now
facing the same economic situa¬
tion we had in 1940 and 1941, and

mere

are

for

made

prepara¬

may

promise

and

down

pinch,

they
counter¬
acting the inflationary trend than
any feasible system of direct price
controls

fiscal

worked

are

much

however

and

will be some moderate decline in

supply of goods. But
credit and other

the

late

probable that there

most

dangerous expansion of monetary
and credit supplies and to stimu¬

appraisal rests is now
unknowns in

of the

one

Jan.

is Manager of

foreign department.

RHODES

HAVERTY

BLDG.

Teletypes—AT 288 and AT 142

ATLANTA

1, GEORGIA

Long Distance 421 and 422

of¬
an

Volume 172

Number 4968

The Commercial and

Financial Chronicle

(2343)

Bache Go. Exhibits at

Another favorable and
more &

live

stock

business

utilized

story

action

exchange
wire

news

prolific new traffic sources. In particular, the company has
reaped substantial traffic benefits from the opening up and exploi¬

tell

the

Virginia.

being

public

brokerage

tation of coal

ticker

Baltimore & Ohio

Two weeks ago

Week''

situation, stating that

partially covered the Baltimore & Ohio
extension of those comments would ap¬

Since that time the stocks have attracted

later date.

Syracuse
University's

pear

Finance

the most active stock

Department

urday it sold at the highest levels it has reached since 1946,

(Dec.

little

15).

considerable

The dis¬

is to

play has been

for

set

road appears

likely.

Co.,

members

Bache

part

explain

play

has

is believed to

time that such

been

ever

Bache's

Syracuse

office

will

the

explain

set

dis¬

representatives

hibit

the

Street to

Syracuse.
have

Wall

public.

the first

ex¬

so-called

mysteries of the securities indus¬

try.'

Gellermann,

public
relations director of the firm, will
Henry

deliver

talk

the Nation's

"Wall Street and

Economy."

Mr. Gellermann said that recent

indicated

have

surveys

as¬

tounding lack of knowledge of the
securities

industry on the part of
general public.
He said that

the

exhibits

addition

paign
Co.

this

the

being

are

welcome

educational

pro¬

equity

generally anticipated, further
this predominantly heavy goods

In 1946 the stock sold

high

waged

Bache

earnings.
It

general.

time

because

tion

of the

Partner

LOS

ANGELES, Calif.—Stevens
Manning will be admitted to part¬
nership in the New York Stock
Exchange firm of Paine, Webber,
Jackson & Curtis, on Jan. 1.
Mr.
Manning is manager of the mu¬
nicipal departments of the firm's
Angeles
office, 626
South

Los

Firm Name to Be

little likelihood

to be

appears

Baltimore & Ohio

common

stock for

some

sinking fund requirements. Fundamentally,
favorable consideration in any long-term evalua¬

situation.

case

of Baltimore & Ohio it is not necessary to wonder whether or

debt retirement.

scratched

far, and

increasingly greater role
mills.

Baltimore

look

Jan.

the

firm

name

Roberts

policy of

question but that Baltimore & Ohio

Governors, to

serve

three years:

Robert H.

Gardner, James E. Ben¬
Co.; Herbert Levy, Paine,
CHICAGO, 111. — At the annual
Webber, Jackson & Curtis; Louis
meeting of the Chicago Associa¬
J. Stirling. Betts, Borland &
Co.;
tion of Stock Exchange Firms and
A. Trees, Paul H. Davis
the meeting of the Board of Gov¬ Harry
ernors

the

Association

held

Co.

Nominating Committee, to serve
one
year:
Davis J. Harris, Sills,
Governors were elected:
Fairman & Harris, Inc.; Kellogg,
Chairman:
Harold Blumenthal,
Logsdon, Farwell, Chapman & Co.;
Swift, Henke & Co.
Paul E. Murin, David A. Noyes &
Vice Chairman: Harry A. Baum, Co.;
Samuel J. Smith, Hulburd,
Warren
Wayne Hummer & Co.
&
Chandler; Byron G.

Dec.

1, the following officers and

Treasurer:

Fred

Fairman, Webster,

Jr., Sills, Fairman & Harris, Inc.

UNDERWRITERS

Public

Fenner

Merrill

Lynch,

Pierce,

Beane.

—

DISTRIBUTORS

DEALERS

—

Utility, Industrial & Railroad Securities
Tax

Exempt Bonds

Active Market in Local Securities

may

be characterized as a heavy
In particular, it is heavily dependent on the steel
industry, both in the transportation of raw materials and the fin¬
ished product.
goods carrier.

MEMBER
MIDWEST

STOCK

EXCHANGE

C. F. CASSELL &

CO., INC.

Charlottesville, Va.

Phone 2-8157

is becoming increasingly obvious

that there will probably
lines of business in the transition

be a significant decline in many
period from civilian goods production
almost

certainly not be

armaments.

in the steel industry.

This

will

It, is true that steel

consumption

may taper off temporarily.
Under the conditions,
however, it will be only prudent for the various users to purchase
as

much steel

is available to them and build up

inventories for
background, and considering that early this
year Baltimore & Ohio was still suffering from the coal strikes, its
traffic comparisons in coming months could well be far more
favorable than those of the railroad industry as a whole.
With this

Peoples National Bank
OF

CHARLOTTESVILLE

CHARLOTTESVILLE, VA.

Scott &
115 Mutual

Dealers in

Stringfellow

Established

May 20, 1893

Building

Adpnit Optiz

Municipal Bonds

Specializing in

Richmond, Virginia

Co.,

^488

New York Stock

Madison

New York Curb

Virginia, North Carolina, and West Virginia Municipals

Jan. 1.

Exchange

Exchange (Associate)

Richmond Stock

Exchange

Exchange,

Underwriters and Distributors

Opitz to part¬

Buford Scott

Walter S.

Mr. Opitz has

Marion

Thomas D. Neal

been with the firm for some

Fitzgerald

time

Robertson

Eldridge Longest

James H. Scott

L. Thornton Fleming

Joseph J. Muldowney

General Market Corporate Securities

office manager.

AND

Municipal Bonds

VIRGINIA-WEST VIRGINIA

Specializing in Southern Issues

NORTH and SOUTH CAROLINA

Municipal Dept.

Telephone

Corporate Dept.

Teletype LY 82

8-2821

Teletype LY 83

MUNICIPAL BONDS
Call

for firm Markets

F. W.-

SCOTT, HORNER X MASON, Inc.

CRAIGIE & CO.
DEALERS

STATE

and

Investments

MUNICIPAL BONDS

LYNCHBURG, VIRGINIA
616

EAST

MAIN

STREET

RICHMOND 15,

VIRGINIA

Telephone 3-9137

Teletype RH

Secretary: Carl E. Ogren, Mid¬
Exchange.

Members

will admit Fred W.

assume

west Stock

nett

power.

Dec. 31.

of the New York Stock

supply for our domestic
point of entry for such

a number of years of exceptionally good traffic.
conditions it is reasonable to look for sustained high

Avenue, New York City, members

nership

slated

are

in the country Baltimore & Ohio
may

Gerald B. Nielsen will retire from

Roberts

favorable influence

years.

Eiect New Officers

Its peak earnings during the war boom reached
share (in 1942) and its status has been improved
materially since that time. Probably more than any other railroad

Miller & Co., 15 Broad
York City, member
of the New York Stock Exchange,
will be changed to Schafer, Long
& Meaney.
Benjamin Miller ana
on

important

Chicago Exch. Firms

a common

New

the firm

imports

sources

the surface has been

forward to

Under such

Schafer,
Street,

materially in the past few

Under the terms of the plan they have no alter¬

be little

can

ore

import shipments and Baltimore & Ohio has constructed a modern
pier to handle the tonnage. On a long-term basis, then, it may
safely be assumed that Baltimore & Ohio's traffic picture, as well
as
its capital structure and physical plant, has been
improved

Schafer Long Meaney
On

will

native.

There

iron

Retirement of debt naturally

not the management is going to follow the conservative

the future.

Spring Street.

there

the

progressively
improves the overall credit standing of the road and this in turn
justifies a higher price-earnings ratio for the stock. Also, retire¬
ment of debt obviously brings with it a lowering of fixed and con¬
tingent charges and a corresponding rise in share earnings. In the

earning

manning

however, this is

$16.77

Paine, Webber to Admit

that

true

than token dividends

for additional foreign sources, has also had
on
the status of Baltimore & Ohio.
Only

3014.

as wholly available for the stocks.
This same thing
true, however, of roads that have not undergone reorganization
nor gone through a voluntary readjustment plan.
Their full re¬
ported earnings may not be considered as available for the stocks,
even
though there are no mandatory funds. All railroads must
make capital expenditures to keep the property in efficient oper¬
ating condition. Except for equipment there is little inclination on
the part of railroad management to sell securities to provide for
capital outlays.
The money must come, then, out of reported

cam¬

the securities industry in

and

the

general
be

Henry Gellermann

operations of

If the rearmament

be considered

their

to take care of the capital needs of the prop¬
erty. Also, heavy sinking fund requirements for retirement of debt
were imposed on the company.
Thus, reported earnings may not

campaign

was

On Sat¬

ment fund was set up

Ex-

change,

from the 1950 low.

common

Exchange.

stated in our earlier column, in the process of the most
voluntary debt adjustment plan an Additions and Better¬

recent

the New York

Stock

the

week

gather the momentum

appreciation

Last

the New York Stock

than 100%

gram

speculative following.

The change

searching constantly

(Continued)

the

"Fin ancial

seams served
by its lines in Webster County, West
This high quality coal has found itself an enthusiastic

market and further expansion in output is looked for.
in the iron ore situation, with steel companies

the

house

highly important factor in the Balti¬
Ohio picture has been the actual and potential
opening up

Syracuse University
and

Richmond, Va.

Norfolk, Va.

Roanoke, Va.

Bluefield, W. Va.

The Commercial and Financial

(2344)

Continued from page

build shameful Dunkerque — at Chinese lions which give his decrepit
hands. If so, it will be the greatest regime a fresh lease on political
This country will be bur¬
defeat (not just of this nation, but life.
II.
of Christianity) since Byzantium dened with all-out armaments and
It will have all-round regimentation.
Europe's fate will be determined fell to the Turks.
Marching into Korea with fan¬
in
Asia,
not in
Europe.
That demoralizing effects throughout
fares and refusing to live up to
brings us to the second alterna¬ the Western World. The UN has

India,

Iran

already,

turmoil

nothing

of Malaya. So are
and the Arab coun¬

tries.

problem.

the

solve

not

appeasement

words,

other

does

well abandon Korea al¬
together,
as
the
noble
Allies
ditched Poland in World War II.
But Chinese aggression will rise
might

again and again, and under in¬
creasingly difficult conditions for
us.
Each conquest provides the
Reds with millions of fresh fanatic
fighting manpower and with
more
resources, and raises their
and

"morale."

Red
(and
Japan's) economic potential at its
aggressive

conquest in Asia
vulnerable

Each

Aggression!

lost.
to

and more expen¬

sive.

logic of appeasement de¬
mands that it should be complete.
The Franco-British jittery argu¬
ment claims that "concentrating"
our
efforts
on
Korea
deprives
The

land's

peace

"No

existence?

national

our

put

under

far

reality,

scores

friendly people

in the South
disadvantages
aggressor? If so, we have to be
present.
conscientious
objectors and lay
think in the
down the weapons. Otherwise all

fight

greater

The

Europeans
terms

their vested

Korea is of little

commercially

cance

in¬

signifi¬

investment-

wise, forgetting what is bound to
follow; Chinese millions massed
against Hong Kong, Macao, IndoChina, etc.
Europe is untenable without the
resources

Asia—Russia

be¬

virtually

comes

the examples of
Korea

have

China and North

shown, it

can

absorb

permissible which are

are

means

millions,

fanaticize

and

GOLF

But

expedient to

The

bomb?

is that it may

answer

At any rate,

end the war at once.

would

much

the

use

with

better

it than without it.

Bankers Association Tiophy

weapon.

mobilize

with

whether the Chi¬

assurance

would

give in;

Charles C. Glavin, First Boston Corp., New York, 73.
W. Neal Fulkerson, Jr., Bankers Trust Co., New York, 74.
Harry L. Walters, Girard Trust Company, Philadelphia' 77.

Ladies 18-Hole Championship—Scratch—Tuesday, Nov. 28

Mrs. C. Prevost Boyce (Stein Bros. & Boyce),

1st:

how long

expansion of Red China could

istic

Low Net
1st: Mrs. William M. Rex
2nd:

war

within China, at virtually no
in

2nd:

Charles McK. Lynch, Jr., Moore, Leonard &

Ky., 70.

crucial

Ladies Kickers'

Firm Bids

Firm Offerings

—

how¬

is,

question

That

what

looms

large on the appeasing minds—
just as Hitler's bluff did on the
minds of their predecessors. Stalin

with the same propa¬
ganda technique as Hitler did:
frightening Europe out of its wits,
out of all proportion to the actual
power behind the bluff.
(See the
operates

excellent article of General F. L.

Quotations

Howley

76
2nd:

Robert

But

CORPORATE

ISSUES

the

"Nation's

current

have

better

Europe

Far East

Pierce Corporation

JACKSONVILLE

1, FLORIDA

Long Distance 47; 3-8621

Would Russia be in

2nd:

potential

war

has

If it is

been

easy

and

costless to overrun Europe as

the

pretend: just what has
Moscow been waiting for?
To stay out of open war, but
to do all the damage by round¬
appeasers

about

Dealers in

U. S. Government Securities

of Russia's cold

Phone 6-5611

Writer

Christensen,

Inc.,

Handicap—Tuesday, Nov. 28

1st: Marion H.

2nd:

Mixed

Cardwell, J. J. B. Hilliard & Son, Louisville, 72.
Hirsch & Co., New York, 73 (Draw).

J. Dalton Couig,

Foursomes—Thursday, Nov. 30:
Mrs. C. Prevost Boyce (Stein Bros. & Boyce), Baltimore,
and V. Theodore Low, Bear, Stearns & Co., New York, 72.

1st:

2nd:

Mr. & Mrs. Clarence W. Bartow, Brexel
73

& Co., New York,

(Draw).

Kickers' Handicap—Thursday, Nov. 30

& Dawson, New York, 78 (Draw).
Company, Inc., Philadelphia,

1st'

David M. Wood, King

2nd:

Robert G. Rowe, Stroud &

(Draw).
*

❖

TENNIS

Entry of 15 Teams in Men's Doubles
Entry of 12 Teams in Mixed Doubles
Men's Doubles

Co., Atlanta
Co., Hartford, Conn., and
A. Magowan, Merrill Lynch, Pierce, Fenner &

1st:

Malon & Richard Courts, Courts &

2nd:

Louis Walker, G. H. Walker &
Robert

Beane, New York,

4-6—6-2—6-2.

Mixed Doubles
1st:

Mr. & Mrs. Joseph JR.

N'euhaus, Underwood, Newhaus &

Co., Houston, Texas.
2nd: Mr. & Mrs. Graham Jones, Cooley & Co.,

Hartford, Conn.,

6-3—6-2.

BUSINESS ESTABLISHED 1924

The chance to find such
was

forfeited when
China

and

down

corporate securities

the

eliminated the
Germany and
Japan, the only natural dams in
the way of the Bolshevist tide;
when, on top of all that, we fi¬
nanced

promoted

total

and

disarmament.

Europe's

was

our

policy
to
boost
little
colored
George Washingtons, every one of
whom

turns

out

Fellow Traveler,

if not

colonial

outright

LEEDY, WHEELER & ALLEMAN
Incorporated

FLORIDA BANK BUILDING

ORLANDO, FLORIDA

have to face the music.

By the time these lines reach the
reader, the decision may have
fallen.

Peters,

Now

Teletype JK 182

Peters,

peace¬

Bolshevist.

Jacksonville, Florida

municipal bonds
no

Volga; when
war
potential

BANK.

Gerald

City

"diplomatic" solution to the

Poland

may

City, 74.

war.

there is

up:

solution

sold

NAT 10

sum

problem.

^ATLANTIC

Farrell,

can

called, to use satellites at no
to herself, then to play the
intermediary—is the es¬

ful,

Bond Department

virtuous

♦

(Eligible only

Wednesday, Nov. 28, 29
National Bank & Trust Company,

bluff

III.

Municipal Bonds

Co.), Chicago, 76.

Tournament

cost

sence

she
her

when

and

which

process

abandon

Men's 18-Hole

the

against

China than before—after Chi¬

na's

Memorial

Denver, 75 (Draw).

after it has been unleashed

knocked out?

Bell Teletype JK 181

are

position

better

any

to
few
stymied in
a

withdrawable

—

short notice?

Atom

Barnett National Bank Building

chances

because

American divisions
the

Jr.,

tomorrow

yesterday? Would

any

overrun

Clyde C.

Kremlin

the

III

War

it did not do
it

Christie,

should

why

World

start

ALL LOCAL SECURITIES

(Draw).

Mrs. Leonard J. Paidar (Goodbody &

Business.")
UNLISTED

Handicap—Monday, Nov. 27

Mrs. Sheldon R. Green (Chase National Bank), New York,

1st:

Kansas

Will she rush to the
the
hard pressed Red/

friends?

DISTRICTS

Lynch, Pitts¬

burgh, 71.

Russia.

rescue

COUNTY

Nov. 27

Alden, Jr., O'Neal-Alden & Co., Louisville,

1934 Convention)—Tuesday and

American lives.

The
ever,

MUNICIPAL

William

and should be diverted into a civil

DEALERS

Florida Bonds

(Draw).

1st:

DISTRIBUTORS

(Clark, Dodge & Co.), New York, 74.
Prankard (Lord, Abbett & Co.), New York,

Mrs. Harry I.

Alden H. Little Trophy—Monday,

What About Russia?

UNDERWRITERS

Baltimore, 92.
Sykes (Shields & Company, New York), 106.

2nd: Mrs. Macrae

But the imperial¬

it would take.

Investment

2nd:

No one can tell

Chiang Kai-shek.
nese

natural ally:

our

for

still

may have to fight, but under im¬
mensely improved odds. We may
have to blockade the China coast

and

Championship

played at La Gorce, Nov. 29, 1950.

1st:

3rd:

It is, of course,

auxiliary

Association

Bankers

Investment

necessary.

cost

with Russia at Asia's

at the Investment Bankers Assn. Convention

are

than those in the North at

Eng¬ expands by leaps and bounds. As

puts it:

Laborite)

desires

Shinwell

minister,

war

left-wing
one

propensities.

not

ciples, not of quantities. Is it un¬
ethical to wage war against an

invulnerable in
possession of Asia. The tempo of
our and Europe's armaments, even
Europe of our protection and in¬
greatly accelerated,
vites Russian aggression. This is if they are
must lag behind the rapidly grow¬
so stupid that, it can be explained
only in the light of their irrational, ing power of a Soviet empire that

pacifistic

and

lost if we have

And Asia is

terests.

bigger, hotter,

millions of
at stake, plus
our own long-run security, leaving
The truth of the matter is that
aside national honor and prestige.
"Europe is untenable if Asia is
Besides, ethics is a matter of prin¬

narrow

their resistance. Our job will grow

War),

World

Second

The

path of safety."

material end and

raw

ultimatum

followed by all-out

adding that "the bold path is the

hurts our

to extend our lines.

tive:

Golf and Tennis Tournament Winners

Each

can

the commitment; going isolation¬
China, to already been turned into an in¬
ist on China's northern end and
air attack, strument of providing moral cov¬
covering the enemy's rear and erage for Bolshevist aggression— hoping that she will stay put in
any price, but we are resolved to
we
are
the the South; such are the naiveties
communications by an umbrella which implies that
avoid war at whatever cost."
which go by the name of "real¬
of A-bombs, destroying his air¬ aggressors! The British—who de¬
Messrs. Baldwin - Chamberlainism." But Mao can be relied upon
ports, supply centers and cities. pend on us for livelihood and SelfDaladier &
Company could not
Besides
the
explosion's
effects, defense—emerge as the masters of to exploit them to the greatest
have said it with a more perfect
embarrassment of the ubiquitous
entire areas can be "poisoned" for our foreign affairs, Attlee return¬
lack of logic. They were "incapa¬
victoriously with fresh bil¬ compromisers.
weeks by radio-active emanations. ing
ble of any
drastic or clear-cut
But is such wholesale slaughter
action," quoting Churchill—who
justifiable—as long as the issue at
now
has turned appeaser himself
stake is a "piece of real estate"
—in "The Gathering Storm" (Vol.

conquest drives the fear of Stalin
Into those to be subdued, reducing

forces

armies to match them.

To Russia's
£ay

than

faster

them

There Is No Peaceful Solution

Burma

Chronicle... Thursday, December 14, 1950

have suffered

BELL TELETYPE OR

LONG

DISTANCE

.Volume 172

Number 4968

(2345),

The Commercial and Financial Chronicle

...

1951IBA Convention
For

Our

Hollywood Beach

The

1951

Investment

Governments

Nov.

Weekly Firm Chang es
The New York Stock

With

obligations.

Exchange

New l3As

out of the way,

the government market

to be concerned with the confused international situa¬

and

rapidly expanding bank loans.
The fear of increased
reserve requirements came to the forefront again and this has cre¬
ated an attitude of caution among many buyers of Treasury obli¬
gations. Volume has declined somewhat but this is not unusual,
because with the completion of the refunding there is a tendency
to slow down and see what

develops in the market, before making
either the new or outstanding obli¬

has announced the
following firm

additional

changes:

gations.

Transfer of the Exchange mem¬
of Samuel H. Watts to
Robert B. Menschel will be con¬

side of the market and that spells out shorts. This accounts for the
sizable demand for Treasury bills and certificates.
This buying

sidered

has been

bership

the

Exchange

Dec. 21.

Transfer of the Exchange mem¬
to

Frank J. Foley
will be consid¬

Ralph Fordon
by the Exchange

ered

Dec. 31.

Transfer of the Exchange mem¬
bership of Beverly M. Eyre to
Arthur P. Briggs will be consid¬
ered

Dec.

21.

Transfer of the Exchange mem¬

bership
Moore

the

of
to

late

Hairy

Edward

Patterson will
be considered by the
Exchange on
Dec. 21.
Transfer of the Exchange mem¬

bership of Benedict N. Quinn to
Nathan C. Bernstein will be
sidered
by
the
Exchange
Dec.

con¬

31.

Eyre

partnership

Delafield

Dec.

William D.
as

Co.

will

retire

Delafield

31.

Winchell will

retire

general partner in Goodbody
December

remain

31,

but will

limited partner.

nership

Hay,

Falcs

Co.

Dec. 31.
draw

Blumenthal

from

will

partnership in

with¬

Morris & Co. Dec. 31.
Alvin

W. Seligman will retire
partner in Seligman, Lubetkin & Co on Dec. 31.

J.
J.
man

widespread and is being done by financial

well

as non-

within
without accomplishing very much.
Liquidation, which was not too heavy has been well taken, both
in the taps and the eligibles.
slightly

expanded

This

few

other

very

exclusive

the

Commercial banks,

Banks.

the

owners

decided

issues

refunded

Short Maturities

vaPJTd quite likely

level, but in time

par

It is the opinion of many followers of

Long Bonds Bought on Weakness
Despite

the

uncertainties

many

posit banks to take

The closing of the books for the December-January refunding
brought with it the usual let-up which generally follows such an
operation. Buyers and sellers, it seems, take to the sidelines tem¬

porarily to see what will develop in the market, with the pressure
exchanges out of the way. Federal, it is indicated, will have
a commanding
position in the new issue, and this will no doubt

of the

these

what

it does

all other markets.

over

There is

that

overhang the money

important force influencing the purchases and sales in the govern¬
ment market of financial and non-financial institutions.
It is re¬

are

out-of-town de¬

the 1956s and the longest bank issue when
decline.
Scale buying orders are be¬

the

light volume.
The

partially-exempts continue to attract buyers principally
banks in the larger money centers.
The 27/sS

commercial

from

to have taken over a

seem

good part of the spotlight and

ability of this bond has not been an

Although there has been a heavy tone

spreading of the armed conflict. The shortest and most
are being bought until there is greater certainty
in the international picture.
be

Then

again there is another factor which is keeping the com¬

certain extent,
the sidelines, and that is the trend of loans.

mercial banks particularly and other operators to a
With

shorts,

this

force must

combined the fear of increased

reserve

The big question is
go bounding ahead
before something will be done to call a halt?
The answer is not
easy and it seems as though when one is in doubt the solution is
"go short" or "stay -short." This appears to explain, along with
requirements because they go hand in glove.
how long will be authorities allow loans to

to the nearest eligible

selling, the buying has been

securities are moving into

good and there is no doubt these

very

the avail¬

unfavorable factor.

tap bonds, due to insurance company

strong hands.

ported that many of these institutions have gone "short" because
of the critical turn of events in Korea, and the prospects that there
may

eligibles and the

important in the intermediate-term

September, 1967s. It is reported that not too many of these secu¬
rities have been picked up on price weakness because the declines
have been so far mainly the results of a quoting down, with very

question but

rapidly changing conditions in the Far East have been an

bonds

coming

enable the Central Banks to dominate the intermediate-term obli¬

gations, as they have the various other maturities. The success of
the refunding would under more normal conditions mean a more
buoyant tone to the market as a whole, but these are not normal
times. The international situation hangs heavy over the Treasury

last

go to a
the money mar¬
kets that the 1955 notes will be more attractive as the floating
supply, which is not indicated to be exessive, is digested.
There is
evidence that switching from outstanding maturities has already
taken a fairly sizable amount of l%s out of the market already.
only hold the

premium.

range

Emphasis

at the

the 1955s would

minute to turn in for the l3/4s because it waa^felt

market, there is still interest enough among the

in the

Pam

favorable reception for the new
notes that were taken by the
especially those with savings
deposits, have been large buyers of the 13/4S. This kind of buying
is of the strong variety and most likely means these securities
will not be coming into the market in the near future. Also, not
l%s.

Central

not

liquid

The longer end of the market has had its ups and down

nearest-term

market, there has been

Robert Whittaker to Be

Thomson & McKinnon

liquid Treasuries

Welles Murphey, member of the
Exchange, will retire from part¬

The watchword at the moment seems to be stay on the

market

Beverly
from

commitments

financial institutions.

bership of the late

Favorably Received

cautious attitude and substantial buying of the
maturities by many operators in the government

Despite the

the refunding

seems

tion

New York Stock
Exchange

in certificates, especially among the larger commercial
corporations that were holders of the recently retired

By JOHN T. CHIPPENDALE, JR.

now

bills.

banks and

Bankers

Association Convention will again
be held at the
Hollywood Beach

Hotel, Hollywood, Florida,
25-30, 1951, inclusive.

market for Treasury

the

buying

Reporter

which has been
Likewise there has been good

of the other uncertainties, the heavy demand

some

Thomson & McKinnon,
of the New

Moseley Partner

CHICAGO, 111.—Robert B.

11 Wall

Whit¬

resident manager of the
York Stock Exchange, Chicago office of F. S. Moseley 8c

Street, New York
will

F. S.

Partners

Admit

City, members taker,

admit David Krell and John
Marshall

partnership

Co.,

135

South

Salle

Street,

Stock
Marshall will make
Exchange, will
be admitted to
headquarters
in the firm's
partnership in the firm Jan. 1.
Toronto office.

Jan.

members

New York

of the

Mr.

his

Bowling Bruns
IBA PAST PRESIDENTS

Bowling Bruns, Bruns, Norae& Co., New York City, died
heart attack

Dec.

1939 -40 -41

1941-42

1942 -43

In Louisville Since 1872

Harry M. Payne
Harry

Payne,

Webster, Marsh

partner

Co.,

Seventy-eight Years of

Investment Service

Chicago,

died Dec. 7 at the age of 52.

J. Hegeman Foster

J. J. B. HILLIARD & SON

Hegeman
Foster,
special
partner in Foster & Adams, New
York City, died at his home at

ESTABLISHED

1872

Members New York and Midwest

Stock Exchanges
Exchange

Associate Members New York Curb

the age of 82 after a short illness.

Tax-Exempt Bonds—Investment Grade Common
419
Emmeti F.

John S. Fleak

Jay N. Whipple

Masonic

Contteiy

Temple

Stocks

Louisville, Ky.

W. Jefferson St.

Owensboro, Ky.

u. s.
TREASURY

'
IKE D. SCHARFF

JAMES E

JOHN J. ZOLLINGER,

RODDY

JR.

STATE and

MUNICIPAL
SECURITIES
™

BANKERS BOND II
INCORPORATED

1st FLOOR KENTUCKY

HOME LIFE BLDG.

LOUISVILLE 2, KENTUCKY

Aubrey G. Lanston
& Co.

Schorff L Jones
INCORPORATED

INCORPORATED

TELETYPE
No.

Broad

NEW

Street

YORK 5

WHitehall

3-1200

180

219

181

CARONDELET

ST.

(Ground Floor)

INVESTMENT
v

L. D. 205

MAGNOLIA

1271

45 Milk Street

BOSTON 9
HAncock

6-6463

THOMAS

SHREVEPORT, LA.

JACKSON, MISS.

Manager

BOHNERT

WILLARI)

NEW ORLEANS 12

DEPT.

GRAHAM,

McNAIR

LEWIS

FETTER

INVESTMENT

WOOD

HANNAH.

CHARLES
P.

HOWARD
R. II.

DEPT.

Asst.

Mgr.

C. KING

CONWAY
D.

LOUDEN

JOHNSTON, JR.

The

Commercial and Financial

Chronicle

four

The company is therefore,

years).

Public

Utility Securities
Service Company in the

Customers

Revenues

Balance for Common

Share Earnings

^Common

'"Dividend Rate
exchange of eight shares for

reflect

♦Adjusted
of

increase

two shares for

Aug. 8,

one

all its electric

10%

in 1951 will naturally retard

from the

pending sale of additional common stock

securities
Banks.

sist

institu¬

and

million debentures, and $5

the early part of 1951.
Company act as the company's bankers.
Nichols and Vice-President Stanley recently ad¬

large

Downtown Athletic Club,

and copies of a

the new annual report)

(together with

chure

luncheon at the
35-page statistical bro¬

of utility analysts at a

group

were

distributed.

the
notes

and

into long-term

complete

partial tax exemption of interest
when received, or higher interest
rates.

(8) Also, in order to be able to

possible World War III,
for a cash surplus
Federal Fiscal and Debt

finance

should plan

our

retire

management in order to

portion of our Federal Debt every
year from now on except in de¬
pressions.

from page 6

from 38%

Based

(9)

To Defend

public

the

involves

if this

even

certificates

bonds. These should

salable

made

be refunded

Federal Debt

our

much

billion

$65

possible

financing will probably be done in

America, We

(as in the past

national

gross

a
$300 billion
product demand
to bring

that Congress levy taxes

the income of the Federal Govern¬

one-third

only

many

men

in war-making potential of Russia.

the cost of
government pur¬

the armed forces, and
Firm Bid*

other

and

war

only one-quarter instead of

poses

one-half
Firm

individual

extent so that as

fullest

Must Avoid Inflation

Distributors

short-term

early in 1951

Underwriter*

As a necessary preparation
possible World War III, in¬
that available funds in the

(7)
for

the gain in common

be further dilution

companies and not add to infla¬
by the sale of Government
to
the
Commercial

tion

investors be tapped to the

Continued

and there will

natural gas as fuel to

negotiable bonds to the public, to
banks and to insurance

savings

spent $19.3 million

company

Chairman

plants.

earnings

def¬

insist that the money be
raised by sale of long-term non-

icit,

tional

dressed

equity capital added
in the period since June 30, 1948. It is also possible that benefits
may be obtainable from accelerated
(five-year) amortization of

stock

nothing.

produce substantially
output. Purchase contracts have nearly nine years
average; cost increases will largely be absorbed by
rate schedules as well as by the increased efficiency

Dillon Read &

provision for a special credit of 12% on

in 1949 to 45%

make these

them away for

give

and

things

hands

This

fiscal year, much will de¬
pend upon the Excess Profits Tax bill finally enacted by Congress.
On the basis of the present House bill, however, the company esti¬
mates that it can avoid paying any EPT in either 1950 or 1951.
The company can use the average earnings credit base, with the
Regarding the outlook for the next

the increase in the regular income tax

ask

and

(6) If there is a temporary

($10 million bonds, $2.5'

by five to ten cents.

However,

they

rather than letting them sit

can,
back

million com¬
mon stock).
In the current fiscal year construction may amount to
$20 million and the company plans to sell $12 million 30-year
bonds, $2.5 million preferred stock and $3 million common stock.

the recent fiscal year in¬

operate irrigation pumps) was smaller than anticipated for the
consecutive year, which may have reduced share earnings

new

materials

and

for construction last year
compared with $15.2 million in the preceding year. Of the former
amount about $17.5 million was raised through sale of securities

second

new

much of the

with goods for as

machines

generating units.

new

The

somewhat lower than anticipated, due

the

fuel clauses in

(slightly less than gross revenues). This was
probably to the vagaries of
the weather. First there was a very dry spell, followed by a very
wet spell, and the company's irrigation ''load" (sales of electricity

creased only

June 1, this year,

The company uses

to run, on

tariffs and clear

(5) Lower our

path through import regulations
so that our foreign allies can pay

income tax.

1950.

for common stock in

The balance

70%
150
96
239
131
—
192
five in 15>47 and exchange

and

they lack.

money as

stepped up its depreciation
from 15% to 1-3% of revenues—thus 16% of the rate
the depreciation reserve in addition to the 45% taken by

The company on

formula

with

lying on us to supply them
machines,
materials,

such

the present rate.

Account

The company's customers are

material they can, re¬

all the war

prompt and efficient

in obtaining

manufacture locally

They should

service to meet con¬
stantly increasing demands, than in the exact level of rates, it is
believed. Should this increase be obtained, earnings for the fiscal
year ended Aug. 31, 1951 are estimated at about $1.39 on present
shares, which would result in a dividend payout of 81% to continue

is indicated by the following increases:

Plant

that

operations are conducted).
interested

fiscal year ended
Aug. 31, 1950 earned $1.34 a share on the 3,036,487 shares now
outstanding (following sale of additional stock on Feb. 1 and a
2-for-l split in August). The current dividend rate is $1.12 which,
at the recent over-counter price around 14, affords a yield of 8%.
The company is one of the fabulous Texas utilities, with some
operations in neighboring states. Since Aug. 31, 1945, the company
has raised its dividend rate eight times, and the postwar growth
Electric

local authorities will acquiesce
regulation in Texas, where the greater part of

(there is no state

Southwestern Public Service Company

record

taxes. While this
has requested, the

increase the company

rate

confident

management

By OWEN ELY

Southwestern Public

broad

increased Federal income

rate increase to offset

is the first

asking for a general

1950

Thursday, December 14,

...

(2346)

tivity,
Offering*

raise
we

national

our

ought

enough

men,

able

pay

and avoid deficit financing.

machines,

and

money.

taxes

That should
maintain a balanced
budget and provide $5 billion
$75 billion.

cash

debt if we cut

retire

materials,

produc¬

Military Plan we can
quickly get a Table of. Require¬
ments for Partial Mobilization of
(8) With

ment

be enough to

what Washington has

been doing.

We should demand a pat¬
tern of taxation that would help
(10)

partial war rather than

the

win

just the opposite of

Now this is

unneces¬

sary expenses.

ryiake it more difficult: moderate
excise

taxes

everything

"on

but

necessities;
heavy
excise
to retard the sale of items

Up until the elections in Novemr
ber the State Department policy

bare

by its "get out—get
back in" Korea policy and the
White
House
a t ti t u d e,
which

that

to Congress and even to
the Pentagon was "How much can

taxes

national defense and
still have enough money left over
to do all the other things we want

quate manpower, encourage over¬
time
work without payment
of

adoption of all-out direct controls.
We must demand of Congress and

such as greater social se¬
curity, higher wages, socialized
medicine, more public housing,
more subsidies to
farmers, and a

of action
that will defend America and the

bigger patronage payroll?"
What we need today is a com¬

pression

plan consist?

must be tossed overboard to save

need

overtime

(1) We should demand that our

the

war.

There are almost

Now, if that is anywhere near
the non-political realities of what
we Americans have in store for us

Quotation*

Deoler*

the

over
we

are

tion

United

States

Government Securities

• General Market

Municipals

two

and

years

in for 10 years of prepara¬

for

the

the mis¬

must see
the
problem clearly and think
straight.
We must demand that
every American bear his share Of
the burden. We must prevent the

fe fobs? Mmmi imffi
OF

8-5193

•

LD-311

•

TELETYPES ME-283 •

taxes

spend

do,

added

ME-284

program

stated.
(2) We should demand that our

Foreign

Policy

Chiefs

ship.
So, if

be clearly

Commande r-in-Chief

write

BIDS

AND

Staff,

without

and

his

further

going to need 4
in service and a $70

are

million

men

billion

Federal

OFFERINGS

and Arkansas

United States Government
Securities

Bond Department

Union Planters
National Bank & Trust Co.
Memphis 1, Tennessee
BELL

—

THE

BANK

WIRE

TELETYPE-ME

days

de¬

years or more,

budget

for

two

let's start trimming

face

her

really going

oppose

(1)

If she is not, then we

ment

full

part

Here

what

should

done

that our Govern¬
Congress cut at

goods

sumer

the partial

to win

unem¬

15%

cut

con¬

infla¬

definitely

tionary.

In this partial war we
definitely oppose wage or

(12)

or
rationing for
On the other hand we

controls

consumers.

will

opinion:
Demand

And premium pay in the

ployed.

price

have

direct

and

have

indirect

some

limited
such

controls

as
allocations,
priorities,
and
of the non- stock-piling of strategic ""materials
and
some
direction of civilian
military Federal budget.
line of defense is going to be.
workers into war work.
(2) Demand immediate adoption
(4) We must decide soon if our
(13.)
The indirect control of
defense line in the Far East is of 2-year universal military serv¬
housing and consumer credit and
Alaska-Japan-Formosa, and from ice to provide IV2 million of the
the
anti-inflationary
policy
of
there where, before it gets back to 4 million men required.
general credit control aaopted last
the Australia-Philippines-Hawaii
(3) Demand that all uneconomic
subsidies to special groups be dis¬ August by the Federal Reserve as
line.
a holding operation should be con¬
including farm
and
(5) Once we have a clear cut continued,
tinued until the above program is
Foreign Policy, we cqn then ex¬ housing subsidies.
adopted.
Following that, the
We
should, to the maximum
pect a Military Plan from o.ur
Federal Reserve could adapt its
practical extent, convert ECA and
Chiefs of Staff.
program to coordinate with and
(6) We must get our Federal the Marshall Plan into powerful
to
further rearma¬ help make t he other measures
debt in proper shape so we could instruments
more
effective.
We
finance all-out World War II, if ment of the Western World.
(14) The tax burden under such
should make ECA's organization
and when it comes.
a
plan will be so heavy that the
(7) We must make up our minds and funds a part of the Military
Program of Western country cannot afford a continua¬
whether we are going to permit Assistance
tion of the wage increase, price
We should demand that
Stalin to toss a series of Koreas at Europe.
cost-of-living increase
our
allies abroad make the most increase,
us or whether we are going to use

aggression.

Municipals

SYSTEM

NRA

instituted

further devaluation.

imperialist aggression.

had better decide

WIRE

profits

Premium pay was

premium pay.

should

218

possible

(11)

ship to defend America and pre¬
serve
our
American dollar from

if Western Europe is

Mississippi—Tennessee

DISTANCE

excess

partial war.
In order to provide ade¬

tax for

delay, determine where and when
and how we can best oppose Rus¬
(3) We must determine quickly

LONG

sound

income

and corpora¬

doubt

tions.

sian

FIRM

peacetime

of individuals

war

super-tax

defense

the

needed

with

interfere

production;

order to discourage
employers from requiring over¬
time and to spread work among
American dollar.
plete reversal. Defense needs must
the unemployed. But now we shall
Of what elements should such come first. Less important things

TENNESSEE

LD-312

past.

the President

MEMPHIS

MEMPHIS 1,
TELEPHONES

typified

spread

scale, then

some

war

can't afford to repeat

takes

was

the

atomic

bomb

now

where

destroy

our

the

least

and

effective

our

billion

use

out

their manpower.

spiral.

Therefore,

the

Govern-

Volume

Number 4968

172

ment must

demand,

contribution
of

business

Congress

that

That

it stop.

are

have legal price control we must
have
legal
wage
control.
Or¬

ganized

labor

restriction

says

have

increases

wage

must have restriction of

Chronicle

The Commercial and Financial

and

leaders

said

patriotic

as a

labor

leaders,

has

profits by

why

advocate $50

lion of taxes to

addition

war,

pay

as we go

amount

the

That

have

spend

billion

$50

plan that makes

defense
equal

indirect anti-

freezing of wages and prices, and
consumer rationing.
Under such

activities and offset it by an

plan, if continued

That avoids the

over

price
control nor consumer rationing by
law because it simply does not

deficit financing we

very

period of years, we have a
good chance to preserve our

War

had in World
But if wages and prices

free

enterprise

work.

defense

profits

excess

Business

tax.

does not want either wage or

That

leaves

only the pos¬
sibility of the * Government mak¬
ing an agreement with the leaders

amount of taxes.

II.

keep

the cost of the
will go to $55
$60 billion or more.
then rapidly increase

rising,

must

program

billion

which

system

greatest strength.

our

knows better than I do

one

that the

prescription I have out¬

lined will be neither popular nor

But if
proportionately or we will easy of accomplishment.
have a resumption of we are to defend America we
must defend the American Dollar.
deficit financing.
cost
of
It is an utter
living basis.
And then
have Government put it up
to fallacy to imagine that a budget Today it is the symbol of success
the
emblem
of
America
once
balanced will stay balanced and
industry and business to hold

organized

there

will

inevitably

prices

if wages and prices go up.

that

affect

the

cost

living index. The removal of

subsidies

controls

and

farm

over

products should take place at the
time.

same

be protected.

one

danger together.
a

reasonable

group

can

all in great

are

There

must

equality of sacrifice.
Summary

Let

the

summarize

essence

produce armaments and the four
million men in the Armed Serv¬
ices

will

receive

roughly
somewhere around $50 billion for
their services.
duce

sold

therefore

ing

very

But

goods

they will

and

pro¬

services

$50

billion

maining civilian workers produce.
we

have

gross na¬

tional product of $300 billion and

$50 billion of this is military goods
and services, you have a situation
where

billion

$300

purchasing

chases $250 billion of mar¬
ketable goods and services.
Inev¬
power

itably, therefore, prices will-rise
unless

also

purchasing

reduce

power

civilian

by $50 billion.

the

board

Taxes must be boosted

program.

Also, each such
or
later
raises the cost of living.
If labor
continues to demand further wage

proportionately.
in

boost

wages

mean

spiral that

paying its share,
the wage-price

can

will

that

sooner

avoid

produce continu¬

inflation.

ous

Manufacturers,

labor, farmers, all of us,
through voluntary action,
utmost restraint

the

Otherwise,

must,
apply

ourselves.

get deficit-financ¬

ing, through the banks, the root of
wage-price

chas¬

across

must

Then

would face

administered

government bureaucracy in a

fashion
We

none

should

our

$65

would like.

retire

long periods
of

freeze

much

billion

debt

ume

fund
as

All

possible

short-term

curb

reduce money vol¬
inflation, and to be
ready to finance World War III
if it

comes.

The

plan I have outlined is
definitely anti-inflationary while
at

the

time

permitting -a
high level of production and an
adequate scale of living. It should
assure
the American people that
they

same

can

buy in confidence what-

and

before.
the

without fear

This is

Company,

Exchange,
at Laird

Broadway,

BOSTON,
Booth is

Mass.

Harriman

—

Robert

some

Co.,

Post Office

Square.

New

Arthur Wiesenberger
To Admit E. B. Gould

With A. H. Bennett Co.'
(Special to The Financial Chronicle)

KANSAS

Schultz

has

staff

pany,

Edson

CITY, Mo.—Glenn R.
been

added

Bennett

the

Com¬

and

come

will

Exchange,

Jan. 1.

RETAILERS
OF

truth

favor and without

poli¬

TEXAS SECURITIES

finger

expect

George to do it.
Every
patriotic citizen must himself try
to

this

understand

must demand

that

problem

and
it

solve

to preserve this country of ours
for
the
great
destiny
that it

surely

has

leader

toward

freedom

perform
a

.the

Dewar, Robertson & Pancoast

world

new

and peace.

all

these trying times we might
look for guidance to one of

our

greatest leaders who in

Member of New York Stock

a pre¬

Exchange

SAN ANTONIO 5

vious time of great national peril

fought to preserve our Republic.
Ninety-three years ago Abra¬

TELETYPE SA 3

L. D. 15

ham Lincoln looked clearly ahead
—into

our
very times—when he
proclaimed this warning:

"At what

point," he said, "shall
expect the approach of dan¬

ger?

By what means shall we
fortify against it?
Shall we ex¬
pect some trans-Atlantic military
giant to step the ocean and crush
at

blow?

Never!

All

UNDERWRITERS

the

earth

Bonaparte

DEALERS

DISTRIBUTORS

the

Corporate and Municipal

their military chest,

for

com¬

mander, could not by force take

Securities

drink

from

Ohio

the

make

track in the Blue Ridge in a trial
of a thousand years.
"At

what

approach

pected?

point,

spring

cannot

isher.

live

must

the

ex¬

reaches

amongst

from

ourselves

mmBm,

ever

come

destruction

I answer," said Abraham

Lincoln, "if it
must

then,

danger

our

its

abroad.
lot

and

nation of free

Fridley

Hess

First National Bank Building

fin¬

HOUSTON 2,

men we

through all time

MEMBERS CHICAGO STOCK EXCHANGE

must

author

us;

die

Bell

TEXAS

Telephone PReston 8101

Teletype HO 42

by suicide."
Jean

Witter

Edward B. Hall

Frothingham

White, Weld Admits
Roland M. Hauck will become

partner in White, Weld & Co., 40
Wall
Street,
New
York
City,
members of the New York

Rauscher, Pierce &Co.

Exchange,

and

DISTRIBUTORS

Shields

Barry,

INDUSTRIAL,

PUBLIC

UTILITY,

Interstate

Motor

been

SECURITIES

Pickering Lumber Corp.
Dallas Railway Term. Corp.
El Paso Electric Co., Common
Lone Star Brewing Co.
Argo Oil Corp.
Sommers Drug Stores, Com. $ Pfd.
Wyatt Metal & Boiler Works
Petroleum Heat & Power Company
Central & South West Corp.
Central Power & Light Co.,

All San Antonio and Houston Bank Stocks

has

Quick Firm Bids On All

Texas

executive

committee

latter

firm,

which

Bank

Bldg.

approxi¬
mately 17,800

incorporated

OFFICERS

miles of certi¬

Dallas, Texas

fied

Houston, San Antonio and Austin

states

trucking

routes

BRANCHES:

the

and

District

Columbia.

& Gompany

Russ

operates

Mercantile

Municipal Bonds

the

HOME OFFICE:

Texas Utilities Co.

i% Pfd

named a

member

the

San Antonio Transit Co.

East Tennessee Natural Gas

Freight

System,

BANK, INSURANCE, and TEXAS MUNICIPAL

partner of

director

and

RAILROAD,

Co.

Kirby Lumber Corp.

Longhorn Portland Cement Co.
Houston Natural Gas, Com. & Pfd.

Executive Committee
Eugene P.

ACTIVE TRADING MARKETS

Jan. 1.

Barry Named to
UNDERWRITERS

TEXAS SECURITIES

Stock

Eugene P. Barry

L.
G.

A. M.

WEST

HOBBS, Jr

Alamo National

Building

SAN ANTONIO

Fannin 4324
SA 23 & 53

MUIR

RUSS

Direct

and

be¬

berger & Co., 61 Broadway, New
York City, members of the New
York Stock

1004 Baltimore Avenue.

Jr.,

Gould,

partner in Arthur Wiesen¬

told

one

the

with Brown Brothers

now

York City.

country are
today than ever

time to point a

Curb

(Special to The Financial Chronicle)

at someone else or to sit back and

with

1936 -37

York

will maintain his offices

armies of Europe, Asia and Africa
combined with all the treasure of

IBA PAST PRESIDENTS
1937 -38

New

profit.

1938 -39

the

Harriman & Co.

membership in the
New York Stock Exchange.
Mr.
McMann, who is also a member of

With Brown Bros.

been

confi¬

selfish motive whether it be

tics

has

abroad.

people

admitted

A. McCann

our

is time

American

Raymond

The dollar

complete

in greater danger

into

command

dence both here and

boost raises the cost of the defense

inflation.

total, if

Each

that

corresponding production
of marketable goods.
Inevitably,
their buying power will chase the
goods and services that the re¬
In

prices.

throughout the world.

quit raising wages and

You

in the market.

have

We must

boosts

of the problem in one minute:
The men and women who will

can

taxes

wage increases except on a

down
and

labor

Acquire NYSE Membership

of a

use

inflationary controls rather than
resorting in this partial war to the

shall

for

order

new

means

that

assumed

few direct and many

added taxes of almost $25 billion.
I

War Bonds may be necessary
to win the partial war.

ever

civil

needed to cover the costs of

government.

bil¬
for

(2347)

Connecting Wires to:

Dallas, Houston, Galveston, New York & Los Angeles

The Commercial and Financial

Continued jrom page

larger and information would be
more complete.
The proposed bill

should

may

obtain

over

them.

your scope of

of confidence which

is the increase

business advantage

when the investor knows a

comes

Instead, the vast fund

statement is fairly present¬
public goodwill which attends
ing the issues. The proposed leg¬
full disclosure by all large pub¬
islation is designed to bring about
licly-held corporations will re¬
this increased publicity and in¬
bound to their benefit.
The in¬
vestor confidence, and I believe
proxy

vestment industry

will be able to

enterprises

known

the

interest

public

way

long believed in the ben¬
effects upon the economy

I have

eficial

the injection of risk

from

into business ventures,

function in our

expanded

equity markets

capital for them. You, the dealers
In
securities, should assume a
vastly

economy in the analysis of these
enterprises for your customers and

they

by the Board of

Thursday, December 14, 1950

one-third

reason

The
given for this reluctance to

invest

the benefits I have outlined should

families

the

about
owned

securities

corporate

Conclusive proof exists in

follow.

corporate stock.

any

the experience

which we have had

under the Securities Exchange Act.
From another

early recognized one phase of this
problem of educating the public.

point of view, the
bill promises relief for many of
you from the annoying situation
in which you find yourself when

1 understand that

most instances

information.

largely lack of
Your
organization
was

long before the
days of the National Association
of
Securities
Dealers
you
fur¬
nished financial newspapers with

daily

quotations

counter securities.

the

about

scribed,
cial
a

over-theAnother phase

upon

asks

customer

not listed in the finan¬

manuals.

the

under

bill,

als

file

the Commission,

corporations

there is

must

company

would

The type

with

which the manu¬
pick up.

operations would be

for business is the kind who will

in corporate

fairness

respond

management by taking a more ac¬
tive

part in his corporation's af¬

hearings many persons repre¬
corporations which, for
reason or another might suf¬

fer

hardship under the bill

senting

ments.

entitled to

are

suggested amend¬
Some of these, I believe,
relief.

some

I am,

present, studying means which

be employed to afford them
immunity from any hardship. The
Securities and Exchange Commis¬

may

sion has also held
ferences

with

numerous

con¬

representatives

industry seeking similar action.
understand

they

anxious
the presentation

cooperate

are

meritorious

any

amendment.

already

I
to
of

suggestion
for
fact, they have

recommended

such

five

amendments.

Study Bill's Effects

conclusion

re-emphasize
the

should

what

said

have

twice

Until

this bill is enacted I intend

to continue

the

floor of

Senate.

study of its probable
in this study, I can

If,

assistance

your

the

as¬

other

interested
I shall welcome it. I am
any

that

also

the

Securities

and

form and I urge
communicate with them

you

with

me if you have any ideas
these matters.

upon

The

widespread approval voiced

by the industry during the hear¬
ings on the bill was very gratify¬
ing.

As I said then, it is

occasion

when

the

notable

President

the United States, the investment

community, the governmental reg¬

ulatory authority, and the invest¬
ing public stand side by side in
their support of pending legisla¬
tion.

tribute to your high

public

spirit in this matter
attiude of cooperation.

your
I

bill

and

intend again to introduce the
in the 82nd Congress. While

I venture

predictions, I believe

the nonpartisan support this
ure

has

had

meas¬

deserves augurs

and

well for its successful passage.

Josephthal to Admit
Josephthal & Co., 120 Broadway,
New York City, members of the
New

Bonds of Federal Agencies
Teletype—SL 553

Private

Western

Bond

Long

Union

Telemeter

Service

New

York

Member

the

Bank

and

Curb

Ex¬

Admit

Mallorv, Adee & Co., 120 Broad¬
way, New York City, members of

Distance—160

the

Correspondent

Department Telephone to Chicago—Enterprise

Stock

Mallory, Adee

•

Bell

York

changes, will admit W. Truslow
Hyde, Jr., to partnership Jan. 1.

United States Government Securities

New

will

8470

York

Jan.

Aldrich,

Wire

Stock

admit

Melvin

Exchange,

Stanley A.

Conant'

and

August F. Muller to partnership.

BOND DEPARTMENT

With DeHaven, Townsend

PHILADELPHIA,

MERCANTILE

Haven

-COMMERCE

Bank, and

Trust

ST. LOUIS 1

Bodine,

Company

Pa.

Townsend,

1500

members

—

Chestnut

the

New

De-

Crouter

Street,

York

and

MISSOURI

Philadelphia-Baltimore Stock Ex¬

changes and New York Curb Ex¬
change,

f/GHTH-6vC
NEW

YORK

announces

that Thomas D.

Langston and John Hunter White

CORRESPONDENT

14 WALL STREET

have
•

them.

"pay-as-we-go" basis. He showed an unfor¬
of the real situation when it came
to the type of taxation for the purpose, and no appreciation
of the extent of the need for eliminating needless and
wasteful outlays by the Federal Government, but he was
right in saying that we must do much better than during

become

associated

our

financial conduct.

Much water has gone over

the dam since that time,

however, and less and less is being heard about paying
for this

thing

as we go.

Plans for rearmament and envis¬

aged expenditures for rearming ourselves and the nonCommunist world grow daily, and have been growing
for so long now that they are reaching "all-out" propor¬
tions. As all this has been taking place, less and less is
heard about how the program

is to be financed. It would
that the Administration has
definitely given
up hope of any "pay-as-we-go" mode of procedure.
As
was to be expected, and as is almost invariably the case
in such a situation, the scene at Washington is one of
confusion worse confounded. Plans grow like mushrooms,
appear

appropriations fall victim to elephantiasis, but war pro¬
accordingly, actual expenditures lag far be¬
hind, but if one is to accept the assurances which emanate
duction and,

bill in its present

State and Municipal Bonds

that the Korean venture and the rest should be

insisted

have

stands,

that

CHICAGO

of the drift of official

thought during the past two or three weeks has been in
evidence.
The President was on strong ground when he

War II

one

amendment or modification of the

ST. LOUIS

basic aspect

World

which must

flaws in

are

be discovered and repaired. Since

Exchange Commission wishes to
explore
any
suggestions for

INCORPORATED

even

lack of grasp

sure

Stifel, Nicolaus & Company

tunate

persons,

BANKING

Drift of Thought
But

Gentlemen, this bill is not per¬
fect.
I take it for granted that

sistance

INVESTMENT

larging those burdens.

financed

have

reduced, but to determine whether higher prices and

fairs.

effects.

SIXTY YEARS

the burden upon the people at large can

all the rest should be made the reason or excuse for en¬

of person you

undoubtedly

Your field of

public interest. Still another phase

reports

We See

not to see where

rely upon to provide capital

large one, and if there is sub¬

given the financial statements of
which

the

tunities.

stantial investor interest, it would,

publicity which should be
in

inadequately de¬

company
or

information

for

ever

Continued from first page

fair analysis of investment oppor¬

the

management

opportunities should
Every study
seen proves that the

only worthwhile, lasting benefits
to your industry and to American
business are achieved by full and

voluntarily

not

take away their
functions, the bill
System last year indicated that
seeks to require sufficient disclo¬
less than one family in ten owned
sures
for the adequate protection
any corporate stock.
Even in the
of the investors. In the process of
highest income group studied,
those
making over $7,500 only compliance with the legislation
attempting

have

there

establish. Without

bill proposes to

Governors of the Federal Reserve

...

continued

your

vastly expanded.

It seems to
fall short

it.

comply with all the standards the

Popularizing Investment Stocks
made

and I would

managements

that

when

capital

such factors

removed

see

have hampered

as
me

providing a market for them.

Studies

will respond
which will benefit us all.

the

littlenecessary
to
in providing
about

information

obtain

effect

not

cooperation with management, but

Implications of Freai Bill

Chronicle

(2348)

wilh

from the

Capitol, we shall presently be faced by the need
great deal more money than we are now collect¬
ing in Federal taxes.
It is conceivable, indeed it is probable, should we
to raise

approach
and

"all-out" basis of operations on the military
front, that we should find a balanced

rearmament

budget difficult if not impossible to attain without sacri¬
fice of the military effort. So far as we are aware such
a feat has rarely if ever been
accomplished in any free

It could be, therefore, that a period of deficit
financing will prove unavoidable. Such a consummation
economy^

Volume 172

Number 4968

The Commercial and Financial

Chronicle

(2349)

would be

affairs of the country are

1939.

regrettable, but not disastrous if the financial
managed with wisdom and fore¬
sight. What disturbs us seriously at this moment is the
obvious fact that the powers that be appear to be quite
ready to accept World War II ideas on this subject, and
to be laying their plans accordingly.
To put this in a more definite and concrete way, it
would seem that the authorities, even the Reserve author¬
ities who of late have shown more independence of mind
and action than in years past, accept now as heretofore
the notion of financing deficits
by sale of government
obligations in a market where rates are kept at artificially
low levels by use of commercial bank and Federal Reserve
funds. It may also be true—it would certainly be part and
parcel of the philosophy which demands artificially low
bond yields—that the Treasury is still victim of the no¬
tion that individuals should be persuaded to supply the
government funds in the thought that they may and
should
the

some

time

obligations they

take the

the

now

not

hand

distant future

too

consumer

the current system
inevitably
tions into something
Continued

out the

In 1929 and

early 'Thirties government bonds

were

through¬
available

tax

public to yield around 3V2 %.

They

were

partially

those last

from

The

now.

income

therefrom

available

was

the

and the

year

currently, not merely at the end of

considerable number of years as

there

but

was

the

redemption privilege

hovering

over

the market,

enough by reference to the record.
than 3

be obtained—if

may

in cash

returns

all.

Much

the

bonds

held

are

for

True,

case.

with savings bonds,

may

easily

seen

Today somewhat less

waits ten years for any

one

less

only

real worth of such returns in

ceived

obtained

are

by such

than

that is available

are

received

few

What the

years.

dollars—assuming that these

months

corporate
now

and

personal

Stimulus to Be Delayed

Business

them

half

under

the

entered

Chinese

Korea

ago,

could of been reasoned: This may
be

localized outbreak.

Once it is

ended, it will be difficult to
tain the

which

fundamentally

monstrably
peace,
should

sus¬

spirit of this country,

war

de¬

and

peaceful nation.

even

peace,

uneasy

prevail earl.y next year, it
be difficult for Congress

would
to

The

flowing

changed overnight when
openly

the

vinced
real

and

became

the

entered

That action

American

con¬

danger.

much

rise

than

billion

billion
riod

fair

deficit

might well

that

bet

show

the

well take

the

lion.

basis)

(on

contributor

Treasury

costs
auto¬

ECA expenditures, for
be reduced

close to

zero.

On this

increase

basis,

defense

would see an
expenditures

by about $25 billion from the cur¬
rent rate of roughly $15 billion,

cash

but

total Federal deficit of only

about

$10-$15 billion.

Let>g

makfi

some

with World War II to

comparlson3
see

portant this would be.

effective

Continued

revenues

how un¬

A $10 bit-

on page

fense

spending to rise from its re¬
cent annual rate of roughly $14
billion

perhaps $16 billion in
1951, $25 bil¬
lion in the second quarter, $35
billion in the 1952 fiscal year, and
to

the first quarter of

in the neighborhood of $40

billion
That,
believe, was about the pattern
looked for by most Washington
each in the next two years.

called

decade and

re¬

Newhard, Cook

Co.

experts.

half

Perhaps

be easily determined by reference
consumer

price indexes.

A dollar

the end

of which

1929; substantially less than 60%

of what

that

an
no

think

Distributors

Exchange
Listed and

New York Curb

Unlisted Securities

(Associate)

I still hope

so.

way

New York Stock

see

can

consequences

honorable

one

Members

Under writers and

all-out war

well be disastrous.

may

hate

are

economic

the

and

today will buy less than three-quarters of what

would

the entire picture has

again changed as a result of de¬
velopments of the past two weeks.

can

Midwest Stock

Municipal Bonds

Exchange

found to avoid World War III.
that

For
about

A. G. EDWARDS & SONS
Established

1887

Telephone CEntral 4744

N. Y.

New

York Stock

Exchange

New York Curb

Forsythe Blvd.

CLAYTON 5, MO.

Tel. Delmar 6692

Y. Coffee & Sugar Exch.

Commodity Exchange, Inc.

FOURTH AND

state of total war.

this

New

Wall

OLIVE

—

SAINT LOUIS
Nat'l

1st

St.

Alton,

York, N. Y.

Bank Bldg.

Illinois

Armament Costs

Myers Bldg.

7826

Exchange

Stock

Chicago Board of Trade

as¬

will be living
state next year,

assumption proves wrong,
as it could fairly soon, one of those
alterations of the pattern that I

SPRINGFIELD, ILL.

Exchange

Midwest
8015

order.

Tel.

Tel. WHitehall 3-9394

I
the

previously referred to will be in

Carl M. Loeb, Rhoades & Co.

Members

Broadway

NEW YORK,

1, MO.

Bell Teletype—SL 475

Private Wire to

that
garrison

rather than in

EIGHTH ST., ST. LOUIS

is based

say

sumption

409 NO.

what

reason,

Tate, on the basis of a

any

semi-war

defense

economy,

ex¬

penditures for the current fiscal

Bankers

Mortgage Bldg.

HOUSTON

2, TEXAS

Tel. CEntral 8831

year (ending June 30, 1951)
are
expected to total about $20 billion.

Even if

should be involved in

st.
Our

total war, it would be

spend

much

difficult to
than that, but

be greatly

tion

have

the

much
the

cost

materiel

for

seems a

indicate
war
rean

lion

reasonable

that

can

Market

can

find it"

Specialize In Orders For Banks And Dealers

billion
of

the

one.

was

have been
to confirm that figure, but
campaign.

"If there is

payrolls,

months

four

first

the

unable

away,

the neighborhood of $6

Korean

short

otherwise used

and

Inquiries.

war

ices intimated that the actual cost

etc.,

And Invites Your

informa¬

date. One of the Washington serv¬
in

Trading Department Is Active In All

different.

don't

markets

louis

Local Listed And Unlisted Securities

the collateral circumstances would

Edward D.

cairy

of the proportions of the Ko¬

Jones & Co.

ESTABLISHED

It would

1871

MEMBERS
New York Stock

Midwest Stock Exchange

Exchange

Chicago Board of Trade

New York Curb Exchange

(Assoc.)

campaign for about $20 bil¬
a

year,

building

exclusive of the cost
the armed forces

further; of stockpiling weapons
and materials; in short, of prepar¬

ing for

300 North 4th St.

Saint Louis 2,

Mo.

possible larger-scale war.

War contracts

placed in the four

Central

to a

price supports should likewise bt>

$1.6

higher level of personal

taxes, which has been

almost

down

come

could

Certain

nominal amount. The costs of farm

for the current fiscal year.

the

of another few bil¬

laugh.

example, should

This forecast takes into considerstion

income

billion

expenditures

care

matically.

revenues
a

level,

increases

tax

Reductions in other

Don't

will

Government

surplus of

expenditures

$40

current

taxable

absorb $10

Government

corresponding pe¬
earlier, it still seems

year

increased

that amount.

quar¬

than

the

combination

about $2-3

the

above

rate,

and

With a cash
surplus of some
$200 million for the four months
through
October,
as
compared

with

half

second

annual

the

unlikely to be
more

the

billion

last

decision

through

Looking further ahead, suppose
defense expenditures should

ter of next year.

people

It then
reasonable to expect de¬
lasting

nature

since

present rate until the second

over

Chinese

placed

spending

that

fense purposes are

will

All that

order

deficit

March of 1951, and only a moder¬
ate stimulus in the June quarter.

certain that Federal funds for de¬

appropriate the funds neces¬
sary for a first-class defense pro¬

the

that

basis, the economy will
real stimulus from Govern¬

ment

plans, tooling, etc., makes it fairly

Communists

month

June.
Government Spending

Until

get

aircraft, de¬
liveries of which will necessarily
be long delayed. I don't believe a
that single new tank has yet been built

spending.

consider

On this

through October are said
totaled $8 billion, more

have

than

(1) Government spending.
(2) Consumer spending.

Perhaps

similar investments

now

today—in comparison with those

two decades ago may

to what

term of a

taxable

dollars

the

now

relatively slight market risk with the Federal

Reserve

be¬

year

Korean conflict.

investor

pay
60%
of.
incomes in the

1951

(against 50% a
earlier); the higher level of

year

page

fore:

exempt—less important to the small investor then

than

1950

prevailing, and the
probability of higher tax rates to
be
enacted
probably early next

gram.

to the

must

first half

Business Prospects and
Pitfalls of 1951

Let's

two, or for that matter

corporations
their tax

money.

the current

year.

cial

during the past decade

feature

Act, which provides that

incomes

order.

since the outbreak of World War II.

Revenue

converts Treasury obliga¬

closely resembling

(3)

of course, anathema to sound finan¬
policy. Indeed it may be said that at present an
attempt to proceed in any such way is nothing short of
an
outrageous imposition upon the public at large and
in particular upon the individual who is
urged to buy,
perhaps bludgeoned into buying, savings bonds or their
equivalent. It may be doubted whether there is any
general realization as to what has occurred in this situa¬

Treasury statements; the so-called
Mills Plan

purchasing power of the dollar. The Treasury is asking
a
good deal of the public when it would sell its obligations
at current yields.
What is even worse is the fact that

goods markets.

All such ideas are,

for only a few weeks; the higher
rate of corporate income
taxes,
which has not yet shown up in the?

the

Thoroughly Unsound

tion

1932;. only about 60% of what it would in

We may be certain that
anything approaching an
"all-out" rearmament effort would cut further slices from

buy back to the Treasury and

proceeds into the

would in

.77

7600
Direct Private Wire

Bell Teletype SL 593
Connections with

Josephthal & Co., New York and James E.

Bennett & Co., Chicago

Financial Chronicle

The Commercial and

Thursday, December 14, 1950

..,

(2350)

Continued from page

spending and, secondly,
stock-piling will
accentuate
those shortages*
We
know
absolutely nothing about

of defense

IBA PAST PRESIDENTS

Business Prospects and
Pitfalls of 1951

1931-32

1934

1935-36

the

government's plans with re¬
stock-piling of essential
materials, except that they; are
spect to

ambitious.
in

approximately 4%
the current gross national prod¬

equivalent
of

would-

deficit

annual

lion

uct.

13.4%. in 1942, 29.6%

was

1943, 24.0%

in 1944, 25.0%

1945, and in the reconversion year
1946 amounted to 9.8% of the na¬
tional product.

A $10 billion def¬

savings

consumer

third

the

amounted to little more
of disposable income, as
against 5.3% in the preceding
three
months and 71/&% in the
quarter

the

that

accurate one, I

days. For example, the $4.4
billion deficit of 1936 was equal

is
likely to change that pattern of
free spending. The answer is that
any voluntary change will prob¬
ably be slight. With shortages and
higher prices being preached from

war

Allan

George W.Bovenizer

Pope

5.3%

that year's

na¬

gross

tional product.

Comparisons With Last War
Defense

spending in the aggre¬

bil¬
comparison
figures reached in World
be large at $40

gate would

shown is

War

II.

the

difficult

for

total

ceeded $90

billion,

realize

ment

42% of that

some

buying

year's entire gross national prod¬
uct.

going to considerable pains
to make these comparisons only
because so many of the business¬
I

with

men

Field, Ricliards & Co.

whom

talk

pective

military

alone

spending

date

the

things people

absolutely guarantees a continued

We have seen a 35%

peak rate of business activity for
an indefinite time ahead. It is my

the

contention that the actual increase

spending will itself have little
effect
through the first

direct

quarter of the calendar year 1951,
and that it is possible to exag¬

gerate its effects thereafter. That
assumes, of course, that Congress
does its plain duty in writing the
next
we

revenue
are

total

not

and

that
in

involved

war.

Consumer Spending

I think you

take

consumer

Ingalls Bldg.

the

portion

automobile dollar.
mean

that

ex¬

total consumer spending to
drop sharply in the months ahead.
It does mean, however, that we
pect

doubt

will

match

in consumer income

level

production

the increase
or

equal the

civilian

goods over the near term.

Which

brings

third

the

obliquely to
element in> the

major

want. economic outlook

most

reduction in

will

agree

allowance

civilian

alum¬

—

business

ex¬

It must be considered

penditures.

in two parts,

(1) expenditures for
inum, and a 50% cut in cabalt. inventory accumulation and. (2)
relatively
mild * slash
was expenditures for plant improve¬
ordered last week in copper use ment and expansion.
and
one
is probably ahead for
It is the first part that interests
steel. With less copper, the motor me most in considering the imme¬
diate
outlook.
You
are
car industry must turn out fewer
surely

whether

automobiles,
exists

terials

demand

not. With electronic ma¬

being taken by the govern¬

aware

the

fact

that

inventory

expansion has proceeded apace in
the last few months.
Using the

Department of Commerce series,
matter how crying inventories rose by more than $2
the demand.
One
leading radio billion in the third quarter, despite
executive, tells us his expectation the shrinkage reported for July
is for only two million television alone. This represents an annual
sets
next year, compared
with rate of $8 billion. (In the corre¬

ment, fewer television sets will be

produced,

six

than

that con¬
sumers have overspent during the
past five months. Their purchases
of automobiles, television sets, and
homes, in that order, have been
little short of fantastic. They have
hoarded at various stages coffee,
nylon hosiery, sugar, and what
have you. According to Depart¬
ment of Commerce computations,

CINCINNATI 2, OHIO

measure

soon

Next, let's
spending.

Established 1887

Seasongood Cr Mayer

save

Business Expenditures

important than these as a

restrictive force will be shortages
of

but

two,

he'll

doesn't

This

not very

are

take

are

of that

rather
to

results

extra I drink

spectacular).

every

day take it for granted that pros¬

CLEVELAND

CINCINNATI

though it must be conceded that
the

money

may

chances

terms will cut home
sharply (al¬

construction

of shirts isn't going to

having

are

who has more

man

spend

almost everyone,

terms

;

just because he can't
for an automobile.
a trip he otherwise
couldn't afford and he may have

buy

effect, and stricter residen¬

tial mortgage

than plenty

drives, however, will have
effect. Restrictions on instal¬

some

alone ex¬

1945

.^7T

tcu,.say

to, that later)
for. shortages

come

compensate

elsewhere.

suspect the public will continue
spending mood. Savings

bond

trying

(I'll

won't

to be in a

that

Corporate and Municipal

lines

probably realistic.

the housetops by

with the

SECURITIES

very

believe the trend

What, you may sensibly ask,

lion, but is dwarfed in

OHIO

never

can

areas

fly blind for

simply this: There will be. imbal¬
during the conversion period
that may be more important in
holding down consumer spending
than any restrictions imposed by
Washington. Surpluses in some

of the year. Granting
a
residual figure in
national income computation

and

of the

one

must

ances

this

vastly expanded economy than on
the economy that existed in pre¬

G. Wood

What

first quarter
that

It is

which

the present.

than 3%

icit would have less effect on our

Orrin

accelerated

that

million

This may be an extreme

1950.

view, but

distinct possibility.

Your next question may

logic¬

ally be, if defense spending is
going to be slow in attaining
momentum,

are

these shortages as

fairly near term possibility? The
reply is that some of the short¬
ages exist today (copper, for in¬
stance) without much in the way
a

sponding

quarter a year earlier,
dropped by $1.5 bil¬

inventories

lion, or an annual rate of $6 bil¬
lion.)
In August and September
alone, the inventory increase was
more
than $3 billion, or an, an¬
nual rate of $18 billion. This at a
you, when consumer
extremely high.
Let's
play around with those
figures for a moment. If there had
been no
inventory stocking this

time,

mind

buying

was

national product for
would have been
$276 billion annual rate, or
3% less than the amount reported
by the Department of Commerce.

year,

gross

the third quaretr
at

Underwriters and Dealers

MUNICIPAL and CORPORATION

If there had been no inventory re¬

duction the year

SECURITIES

MUNICIPAL BONDS

THE FIRST CLEVELAND CORPORATION

CINCINNATI 2

MEMBER

MIDWEST

NATIONAL

STOCK

CITY E.

PRospect 1-1571

accumulation

and

duction has been the major

re¬

factor

determining business swings in
recent
To illustrate, the
years.
index
of
industrial
production

14
Teletype

only 6%, rather than the 18% rise
actually reported. '
This is extremely important, for
inventory

EXCHANGE

6th BLDG.

CLEVELAND
Telephone

before, gross na¬

product would have been at
a
$260 billion rate in the third
quarter. On this basis, the yearto-year increase would have been
tional

Walter, Woody & Heimerdinger
403 DIXIE TERMINAL

Bell System CV 443 & 444

dropped from an average of 192 to
176 between 1948 and 1949, a de-

WM. J. MERICKA 6- CO.

Specialize in

INCORPORATED

OHIO
WIRE

Municipal Bonds
BIDS

INVITE YOU TO USE
CV 594

QUOTATIONS FURNISHED

FOR YOUR OHIO MARKETS OR

J. A. White &
Union Central

Building

Bankers

Ohio Municipal

Association

Advisory Council

Direct Private

Wire to New York

Members Midwest Stock

Exchange

Cincinnati 2, Ohio
Telephone Parkway 7340

'Member

Ohio Bankers Association
American

Company

INQUIRIES

Teletype CI 163

White^ Analysis
Municipal Bonds

Union Commerce Building
of

CLEVELAND

Telephone MAin 1-8500

150 Broadway
•

NEW YORK 7

BArclay 7-3550

Volume

Number 4968

172

(2351)

The Commercial and Financial Chronicle

These are our best conclusions
billion, compared with $18.1 bil¬ urge may be applied by their
in 1949, and with $19.2 bil¬ banks. If financially possible, we at the moment. And, to quote the
hold
on
to
inventories hedge clause on all financial lit¬
lion in 1948. A rise above 1948, would
to.
erature:- "Information and advice
tories, building up in 1948, that therefore, could mean an increase through any period of temporary
of less than $2 billion.
price weakness, for replacement are furnished without representa¬
penditures
rose,
building
con¬ brought the industry to some grief
It could be largely offset by a costs later in the year are likely tion or responsibility as to accu¬
struction expanded sharply, and in 1949.
racy or compelteness and without
Our research department is at¬ further
shrinkage
to
the
zero to be higher.
automobile production was stead¬
We
mark
gee
corporate
profits of liability for any act or omission in
by
our
export
balance,
ily increasing. Moreover, total re¬ tempting a rough measure by the
about $38 billion before taxes, or collecting or providing the same."
tail sales, which averaged $10.84 following device: They take the which has been declining steadily
In 1949 it was $5.4 approximately the same as those
billion per month in 1948, were off total output of textile fabrics— since 1947.

cline

8.3%;

from

and

1948 usually

peak of 195 to a 1949 bottom of
166, a decline of almost 15%. Dur¬
ing this period, government ex¬

has more than a

one

lion

idea of what they amount
It was those invisible inven¬

vague

•

only fractionally to $10.68 billion

cotton,

in 1949.

they

taxes

wool and rayon, which billion; in the first nine months
In
correct for price changes. of 1950 it was $1,150,000,000.
The
production
decline
was This represents the inflow into the August alone, an export deficit
largely one of inventory correc¬ inventory trough. Then they take was shown for the first time in
tion, with assists in the form of a the total sales of textile depart¬ many years, and we would not be
shrinkage in capital expenditures ments of department stores, in¬ greatly surprised if in the coming
women's and misses', year this country imported about
of industry and a decline in the cluding
men's and boys' furnishings, and as much as we export—exclusive,
export surplus.
I've

talked

mulation

inventory

through

only

accu¬

third

the

quarter, because September is the
latest
month for which Depart¬
data

Commerce

ment

available.

are

yet

figures on
however, cer¬

Subsequent

commercial

loans,

tainly indicate that the piling up
inventories

during

apace

proceeded
October and No¬
has

put your finger

It is difficult to

exact

tories

inven¬
danger

which

spots

reaching

may

However, department store
stocks and forward orders together
levels.

equal
sales.

times

4.7

the

September

the

not comparable, so it
is necessary to convert the series
to index numbers with a common
base; 1947 seemed to be a

same

were

logical

in which, from all accounts,
there was neither pronounced ac¬
cumulation or reduction of inven¬
year,

shown

that

and

month's

year.

the ac¬

year

1949,

and through

date

in both

the

this

Allowance must be made in

subsequent sharp advance for

1948, the ratio was 4.1
times sales. It is clear that, unless

government takings, which are of
indeterminable amount. In other

holiday sales exceed the most op¬

words,

1949

and

timistic

present expectations and
been buying skimpily

stores have
since

September,
in

themselves

they will find
uncomfortable

inventory position.
Manufacturers, of
all

they

the further inventory ac¬
cumulation of soft goods
since
has

Korea

dicated

been con¬
marked than in¬
chart, but never¬

probably

less

siderably

by our

theless has been

course,

substantial.

While

are

the subject of

inventories, I should like to intro¬
a
gadget we are in process
developing to measure "invis¬
ible" inventories in the textile in¬

duce

dustry.
That
bothered

Mills

never

til after

something

pattern for the
total economy. A little over-em¬
phasis here and under-emphasis
with

emerge

buying has dried up and

contract

cancellations "or

tions force them on the

exten-

mills. Re¬

tail inventories don't tell the com¬

plete
of

Goods in the hands

story.

converters

and the

trades are what I

ventories,

for

measured

very

cutting-up

call invisible in¬

they

cannot

accurately,

the

basis

—

will joined

staff

the

Evans &

George
Tatum

have

Clement

HAYDEN, MILLER & CO.

result in faulty conclu¬

Established,

can

weighting of the component
considerations points to a pattern

1903

SECURITIES

study,

this

Board's index as

Federal Reserve
measure,

see

CLEVELAND

Building

OHIO

14,

the possibility

dip from the current level of
about 215 to little more than 200

Union Commerce

the

Using

this:

something

the first

but with a

Exchange

Members Midwest Stock

quarter of next year,
recovery

thereafter to

perhaps 220 or above as defense
production really hits its stride.
On this basis, the average for the

well be in the neigh¬
would
with a 1950 average of

may

year

borhood of 210-215, which
198.

increase in unem¬

ployment

and

increase in overtime.

Relative

With

specifically.

respect to timing, the logical time
for any such reaction would be

INVESTMENT

see

Price

relative

TV H*

Jones

Company

INVESTMENT SECURITIES

1170 Union Commerce

Building

Cleveland, Ohio

Stability
price

stability

the first half of next
with strength in metal prices
largely offset by sporadic weak¬
This leaves one additional factor
ness in foods,
building materials,
to be considered—the capital ex¬
and textiles.
Much will depend,
penditures of industry. They will of
course, upon the way in which
be higher next year than this—
developments turn on the war
perhaps
reaching a new peak
above those of 1948. The variation front, as well as whether and if
this

component,

through

year,

year.

however,

controls
We

likely to be small relative to that
in

inventories. As

currently esti¬

are

see

imposed.

businessmen

lines confronted

many

with the urge to

Investment Securities

be mated, 1950 expenditures for plant lighten inventories after the first
and

and

equipment are placed at $17.9

the year.

In some cases, that

Merrill, Turben &
UNION

COMMERCE
CLEVELAND,

Co.

BUILDING

OHIO

MEMBERS

MIDWEST

STOCK EXCHANGE

Underwriters and Distributors
■

' I

;

MUNICIPAL BONDS

State, Municipal and Corporate
Securities

OTIS

CO.

ESTABLISHED

THE W. C.

1899

cleveland
NEW YORK

CINCINNATI

CHICAGO
TOLEDO

THORNBURGH CO.

UNION TRUST
DENVER

DALLAS

COLUMBUS

BUFFALO

Company, Inc., First Na¬

tional Bank Building.

We see some

danger of a slump of some propor¬
tions in soft goods generally and
textiles

which

Ga.

and. Irvin

Monk

Our

Soft Goods Slump

that right after the first of the

for a long time.
accumulate stocks un¬

has

taxes,

with around $22 billion

this year.

shortly after the turn
inventories in their hands began which at this stage must be re¬ of the year, but excessive em¬
ot build up, and confidential re¬
garded as a crude indicator, as ployment before the year is out.
ports to us from leading com¬ well as on the basis of indicated By excessive, I mean employment
panies indicate that the increase department store inventories, we of many not now regarded as be¬
was accelerated in October.
conclude that there is a very real ing members of the labor force
August.

ATLANTA,1

of taxable income,

expenditures, consumer ex¬

about

Danger of

after

net

compare

penditures, and business expendi¬
tures into a cohesive whole and

compare

sold

could produce through
In September, however,

and 55%

leaving perhaps $17 to $19 billion
of

Evans Adds Two

(Special to The Financial Chronicle)

sions.

portions up to the middle of

that

ment

there

build-up to peak 1948 pro¬

form

between

these

movement

cumulation of 1948, the correction
late

somewhere

problem is to dovetail
factors of govern¬

Now the

all

chart, which more

less accurately pictures

what

take, we believe they

50%

military

strictly

course,

may

absorb

goods.

two,

the

figures
are

course,

tories. The subsequent

vember.

Dollar

inventory

the

from

flow

represent out¬
trough.

which

basements,

matter

1950.

will

BUILDING

Cincinnati 2, Ohio

Financial Chronicle

The Commercial and
60

Thursday, December 14, 1950

...

(2352)

and bank deposits, in 1939
million, while

rency

Foresees Further Contraction in

Gold Output

was

around $57,000

in 1949 it

$170,000 million. In

was

Already Germany

from Germany.

beginning to find great diffi¬

hand

its

putting

culty

gold and dollars to meet
its E.P.U. obligations.

1939, the ratio of gold to currency
and credit in the world was about

enough

supply of gold has fallen, while demand for it increased.
Ascribes reduced gold production to fixed U. S. price in face of

46%. It had fallen to 20% in 1949.

of gold has fallen,
the demand for it increased. Will

likelihood

supply were to be restored,
the value of the gold in reserve

the

would, therefore, have to be more
than doubled.
It has also been

the

dealers, hold

& Co., London, leading bullion

Samuel Montagu
new

wide

world

Sees

commodity price rise.

wage

"Is There and 101% in the case of manu¬
World?," the factures—the latest indices based
being 236 and
November 15 circular of Samuel on prewar=100
201 respectively. Over the same
Montagu & Co., leading London
bullion dealers, discusses recent period the dollar price of gold has
remained unchanged. Gold may be
declines in gold production and
the possibility of a rise in the dol¬ a monetary standard but to its
producers it is a commodity which
lar price of gold.
caption

the

Under

Gold Enough in the

Commenting

this topic, the

mined only if it produces

will be

profit. With costs of production
rising since before the war, while
a

publication states:
"In 1939, the world production
of gold
(excluding that of the
U.S.S.R., for which no valid esti¬
mates are available) amounted to
34,600,000 fine ounces. In 1949, the
comparable total was 23,850,000
ounces, a reduction of just over
31%. During 1949, the monetary
gold

central

held

reserves

banks

exchange equalization

and

10,950,000 ounces.
On this evidence, 12,900,000
ounces out of the 1949 production

accounts rose by

i.e. 54%,
mainly absorbed by indus¬
consumption and hoarding.

23,850,000

were

trial

ounces,

"The world's monetary reserves

amounted to 759,000,000 ounces, and the proportion
of new gold production to existing
of gold in 1939

4.6%.

was

reserves

gold

monetary

1949, with

of 978,-

reserves

the
in

gold price has remained steady
terms of dollars, it is not sur¬
declined.

have

should

production

that

prising

The

older

mines

being'worked out. Substantial
tonnages of ore
reserves have
been falling below the level of

are

It has been in¬

marginal profit.

creasingly difficult to mobilize the

capital for the develop¬
new
fields. For these

necessary

ment

reasons,

countries

number of producing
been constrained

have

give their gold producers sub¬
sidies—directly, as in the case of

and indirectly, through
manipulation of the exchange
rates, as in the case of a number
of South American countries.
Canada,

the

towards a fur¬
ther contraction in the output of
"The

tendency

newly- gold will be accentuated now that,
with rearmament, a further im¬
mined gold to reserves had fallen
to 2.4%. World economic progress petus has been given to the rise
in
prices and costs, while the
is estimated to proceed at the rate

€00,000 ounces, the ratio of

per

annum.

Whereas

gold pro¬
duced to existing stocks was still
well above
this figure, it had
1939

the

fallen

ratio

appreciably

below

"Not

gold been falling, but the demand
for it has risen and is likely to

"The reasons for this

sharp fall

diffi¬

gold production are not

cult to discover. The level of com¬

gold

ratio

world's gold
adjusted to

calculated that, if the
reserves

the

change

were

which has

prices

they would
have to be raised from the exist¬
since

occurred

1939,

million

ing figure of about $34,000
to about $70,000 million.

"Many countries whose reserves
have been seriously reduced, or
in some cases have disappeared

altogether, will want to build
them up again, both for domestic
reasons and meeting their net ex¬

payments.

gold transfers are required

been a
the vol¬
money in circulation and
bank credit for which gold has to
1939,

there

has

ume

the ultimate reserve. Con¬

modity prices expressed in terms
of dollars has risen since 1939 by

act

136% in the case of raw materials

world's

verted

into

money

the

dollars,

supply,

i.e.

cur-

of hot money in

the world today

greater than it has ever been.
One example of what it can do is

in. which the British gold
fell before the devaluation

the way
reserve

sterling—from $2,241 million
in March, 1948, to $1,340 million

September, 1949 — then up
to $2,756 million in Sep¬
tember, 1950. This occurred in the
in

again

gold reserve of a country with the
best
exchange
control
in the
world. A number of countries in
the

sterling

India

and

cumulate

into

balance?

The

and

inflation

ket; for the near future, at

such

that the ratio of gold

credit

and

currency

reserves

central bank liabilities would fall
near

the legal minimum of

This

is not

near

future."

likely to

occur

25%,

in the

this

answer

money

United States)

in the

Welsh, Davis Staff

question is not merely a matter
of assessing the economic forces
that would operate in a free mar¬

On Jan. I Will Join

least, it

largely a matter of analyzing
the
policy and motives of the
United
States authorities. These
are the main considerations which
is

likely to weigh with the U. S.
authorities for some time to
are

Mullaney, Wells Co.
111.—The

CHICAGO,

Davis

Welsh,
will

staff of

Chicago,

Co.,

and

join with Mullaney, Wells &

Co., 135 South La Salle Street, on

come—

The United States are at
mainly concerned about

"(1)
present

fighting inflation and moderating
a rise
in wages, costs and prices,

serves

them

among

area,

want to ac¬

Pakistan,

gold

independent

re¬

in the form of London bal¬

Egypt is another country
which has recently been exchang¬

of their credit and

ing dollars for gold and will con¬
tinue to do so as opportunity oc¬
countries

American

South

taking every opportunity of
building up gold reserves in pre¬
ference to dollar or sterling bal¬
ances.

much the world may

"However
use

new

international institutions
International

the

Fund and the European

Union

the

order

ultimate

balances.

Within

a shortage of
they have lost
$1,137 million of gold since the
beginning of this year, and $1,300
million over the past 12 months,
they still hold over $23,000 mil¬
lion, which is equal to 52% of

gold. .Although

the current liabilities of the Fed¬

eral Reserve Banks. The statutory
minimum
a

new

mechanism

is 25%, so that

margin

cover

remains.

States

United

to alter the

executive

President
lost

has

his

the

power

parity of the dollar by
action
and it
would,

therefore, need fresh legislation to
write up the value of gold and
devalue the dollar. The vested in¬

in the
United States are negligible and
there is no lobby in Washington
of

terests

DeWitt

Jan.

inter¬

remains
settling

using

gold,

gold

producers

representing the gold industry as
is for silver producers. It

paying it to France and taking it

that

there

would

such powerful support

behind

ident

either

Pres¬
has

company,

Davis, Pres¬

Davis

Co.,

and

Executive

will

Vice-

Assistant

become

Welsh, Davis and

Co. will continue in

business, spe¬
southeren municipal
bonds, and Mr. Davis and Mr.
Partridge will divide their time
cializing

the

between

firms.

two

The

Welsh, Davis office and staff will
join with Mullaney, Wells & Co.
Both firms were organized in Chi¬
1938.

cago in

Davis

Mr.
ment

any

woulcf

been

invest¬

graduation with the M.B.A. degree
the

from

University of Michigan.

1929

From

1933

with

was

A. G. Becker & Co. as investment

analyst.
of

Welsh

until

Vice-President

was

Green,

and

Inc.,

from

then served

1938, and

Vice-President of Welsh, Dayis
Co.

and

until

since

ident

War II he

1921-20

has

banking since 1929, following

1934

1929-30

Partridge

Vice-President

Vice-President.

IBA PAST PRESIDENTS
31

Welsh,

become

Partridge,

latter

DeWitt

President,

Bonds

1930

Mullaney, Wells & Co., and John

rise in the dollar
seem to lie
such a loss of gold by

of gold

the

will

John

L. Mullaney,

announced.

legislation to write up the value
gold.
"On
this reasoning,
the only

possibility of

Davis

Paul

ident

price

The

"(3)

Payments

operation, this

was

reserve

considerable

follows

three months of

E.P.U. coming into

The United States are not

"(2)

there

gold

means

yet suffering from

Monetary

make

payments,

basis

currency

by writing up the dollar value
their gold reserves.

ances.

national

State and Municipal

come

demand
operation and restore
supply

(anything up
is held

hot

balances

are

tremendous expansion in

law

States

particular,
when which in any case, promises to be
payments are dis¬ considerable.
In
those
circumturbed by movement of capital—
tances they will see no sense in
including hot money. The volume
creating an inflationary expansion

ternal

curs.

increase further.
"Since

1949.

gold remains fixed.
only has the production of

dollar price of

new

prewar

money

of gold.

U. S. will raise dollar value

the

"The supply

United

the

to $8,000 million

1941, and

1946.

was

Pres¬

During

World

Lieutenant Com¬

mander in the U. S. Navy.
Mr.

Braun, Bosworth & Co.
Incorporated

New York

Detroit

Chicago

served

and

Cincinnati

who

at¬

Administration

the

Florida

faculty at the

1936

and

Welsh

and

University

of Iowa

1937.

joined

C.P.A., received his

University

the

from

Business

B.S.

Municipal Bonds
Toledo

Partridge,

torney and

Green, Inc., in 1937 as investment

analyst and continued in that ca¬
pacity with Welsh, Davis and Co.
in

Pa*

1941

President

Henry R. Hayes

Trowbridge Callaway

Henry T. Ferriss

Heart of Ohio

becoming

1939,

dent

Vice-Presi¬

Executive Vice-

and

1948.

STRANAHAN, HARRIS & CO.
INCORPORATED

51 8. HIGH

MUNICIPAL BONDS

ST., COLUITIBUS,

UNDERWRITERS &

offer

you

DISTRIBUTORS

the facilities—developed over

complete buying and selling organization

period of many years—
for Municipal Securities.

Underwriting,
K

Distribution

NEW YORK 6
115

BROADWAY

REctor

Teletype

2-8270

1-154

TOLEDO 4
101

OHIO
Main

Teletype

BIDG,

Bldg.

Parkway 5730

8201

CINCINNATI
Union Central

282

CHICAGO
135

RAndolph
Teletype

SALLE

ST.

6-8950
CG

871

{

.Volume 172

Number 4968

The Commercial and Financial

Chronicle

"Acquisition

Caldwell

the

bank is the second such

National

News About Banks

year.

the Bank

over

established by the bank outside of
Newark. Also, on Oct. 2, it opened

Bankers

and

OFFICERS, ETC.

REVISED

this

move

banking office at 550 Frelinghuysen Avenue, here.
a

CAPITALIZATIONS

"The entire present staff of the
Caldwell bank will be retained
At a
regular meeting of the
board of directors of The National

His subject

City Bank of New York, held on
Dec. 12, John A. Herber was ap¬

at the affair were 14 Presidents of

pointed
dent.

Assistant

was

The sale of

Cashier.

ant

Assist¬

Guests of honor

Newark

The

$100,000 of new stock

taking

Montclair

Bank

Port

Richmond,

New

Essex

over

York, has served to increase the

of June 15, page
page

that its board of trustees has de¬

capital of the bank from $200,000
to $300,000. The enlarged capital

clared

became effective Nov. 30.

Trust

dend

quarterly

regular

$8.75

divi¬

share, payable

per

Jan.

Dec.

11,

record

states that the dividend

to stockholders of record

11.

Reference

holders

its

the

Dec.

issue,
*

made

was

■.

$75,000

from

part of the

$315,000;

from

stock

of $120,000,
while the
additional was brought

by the sale of

that amount.

2496, and July 27,

Germantown

pany

clared
60

Endicott

became effective Nov. 21.
S.'S

sis

The sale of

and

Com¬

Trust

Philadelphia

have

elected

a Class B Director, repre¬
senting commerce, industry, and
agriculture. Mr. Thomson, Vice-

President of the Farmers & Mer¬
chants Bank at Presho, was

Si!

$50,000 of

new

stock

Class

named

banker, member of

of the Fifth Northwestern National

the

Bank

increased the capital of the bank

ecke, who will replace Walter H.
McLeod
of Missoula,
Mont., on

(effective Nov. 27) from $100,000

the board, is a

Minneapolis, Minn., has

sis

William

sis

si:

Bozeman,
Thomson,

A.
Denecke, - Jr., of
Mont., and Harold N.
Presho, S. Dak., were
the

eral

nine-man

Reserve

board

olis at the annual

the

Bank

Fed¬

Minneap¬

election

di¬

board.

Mr.

Den¬

native of Wyoming
engaged in sheep
ranching
since
his
graduation
from the University of Idaho in
1920.
For 10 years he was asso¬
ciated with the U. S. Department
and

to $150,000.

has

been

Agriculture; he is past Presi¬
Woolgrowera>

dent of the Montana

association

the

and

Columbia

Mr.
21, Roger B. Shep- Sheep Breeders of America.
ard, Board Chairman, announced. Thomson, has been in banking for
Both will serve three-year terms 25 years and is past President of
beginning Jan. 1, next. Mr. Den¬ the South Dakota Bankers asso¬
ecke, a commercial sheep rancher,
ciation and of the State Bank Diis presently director of the bank's
rectors

branch

Nov.

Helena, Mont.

de¬

Continued

was

page

semi-annual dividend of

cents

per

and

extra

IBA PAST PRESIDENTS

dividend of 25 cents per share on
the

capital stock payable Jan. 2,
1951, to stockholders of •; record

Dec. 22.

1926-27

Pliny Jewell

1922 -23

1925-26

Ray Morris

■

A...:'

•'

The

•'

•
*

National Bank

placing in liquidation of the
Cecil, Pa.,
result of its absorption by the

First National Bank in

The

of the

stock of

new

•

issue

our

357.

about

2195.

page

...

increased

Nov.

resulted

dividend

stock

increase

Dec.

150%

capital

$120,000

approved by the stock¬
on

Dec.

our

of Hicksville, N. Y., has

150% stock dividend, payable Dec.

dividend

:<t

Directors of The National Bank

The Long Island National Bank

the declaration by the board of the
27

>•'

the stock outstanding before

stockholders

of the Bank of

noted

Com¬

States

Banking

by the National Newark
was

announcing

United

The

pany of New York, in

Essex

Co."

Office

of the Currency at
The enlarged capital

named

the Caldwell Office of the Na¬

of the Richmond County National
#

reported by the

Comptroller
Washington.

and will continue at the Caldwell

institution, which will be known
tional

savings banks in Brooklyn.

Vice-Presi¬

formerly

"Economics of

was

Garrison State."

Montclair, the first banking office

NEW BRANCHES

NEW

Newark

June 30 it took

CONSOLIDATIONS

(2353)

The Chemical Bank & Trust Co.

Endicott, N. Y., increased its capi¬

First National Bank of McDonald,

of New York, it is announced, has

tal, effective Nov. 20, from $100,000 to $200,000 by a stock dividend
of $100,000.

Pa., is indicated in the Dec. 4 bul¬

awarded

contract

John

Harris Associates, Inq., for the con¬
struction of a new office in the

building known
to

nue

The

area.

Plans

100 Park Ave¬

the

serve

Grand

whereby

Newark

Central

contract, together with

pany

the

Essex

letin

of the Comptroller of the
Currency. The Cecil bank had a
capital of $50,000.
si:

National

Banking

Com¬

of Newark, N. J., would buy

The
of

si:

Traverse

City

City,

State

Mich.,

Bank

State

fur¬

the assets of the Caldwell National

member

expenditure

Bank of Caldwell, N. J., were an¬

serve

approximately $600,000, and the
completion date is set for April 1,

Cowan and Roscoe De Baun, Presi¬

Mich.,

dents, respectively, of the two in¬
stitutions. The Newark "Evening
News" of Dec. 5 reports that un¬
der the plans the National Newark

bank,

were

bank would buy

Reserve

System stated that in

nection

with

the

cost

installation

nishings, calls for

and

nounced

1951.
are

Walker & Poor of New York

architects

bank

will

the

occupy

main floor and

southwest

the project.

The

basement,

mezzanine

the

of Park Avenue

corner

Dec.

Roger

the assets of the

and 41st Street. The basement will

Caldwell National and

assume

house the bank vault, safe deposit

liabilities

The

department and related facilities.

referred to further said:

The

mezzanine, which will over¬
look the main banking floor, will

"The 5,000

pected
share.

stock

Joseph G. Munz, Vice-President
N.

Y.,

member

the

Executive

excess

book

would

ark paper

Com¬

consolidated

under the

Bay,

non-member
on

charter and

Nov.

John

Prescott

title of

City State Bank. The

Board of Governors of the'Federal

the

con¬

consolidation

Public

Railroad

Utility

branch was established at Suttons

Industrial

Bay.

Municipal

sjs

•t

value

$95

of the

As
of

result of

stock

dividend

$100,000, the capital of the Citi¬
National Bank

zens

111.,

of Waukegan,

increased, effective Nov.

was

22, from $200,000 to $300,000.

raise

assets

the

Iff

1904.

From the

of Dec. 5

addition

was

New¬

also quote:

S|S

stock

National

Claire, Wis., by
of

si<

Bank
a

Bonds

$100,000 to the

capital

common

Union

$150,000,000."

The Caldwell National Bank

founded in

Suttons

insured

common

is $70.

Newark bank to

Brooklyn on Dec. 12, at its annual
dinner
meeting at the Towers
Mr. Munz is

Present

tional

President of the Bankers Club of

Hotel in Brooklyn.

outstanding

its

paper

Bay,

the Traverse

Acquisition of the approximately
$7,500,000 assets of Caldwell Na¬

elected

was

15.

be retired by a cash payment, ex¬

of the Hamburg Savings Bank, of

Brooklyn,

Dec.

Re¬

System, and The State Bank

Suttons

shares of the Caldwell bank would

include office areas, a board room
and lounges.
*

bank of the Federal

of
of

Stocks

the
Eau

stock dividend

that

amount, increasing the
capital from $400,000 to $500,000,

H. M.

Byllesby and Company

mittee of Group V Savings Banks

(Incorporated)

Association, Chairman of its Pub¬
lic Relations Committee
the

serves

Members

Committee of the
Savings Banks Association of the
State of New York, and is active

Mortgage

other banking affairs.

Underwriters and Dealers in

Serving

135 So. La Salle

will be: Vice-President, Carl
J. Mehldau, Vice-President Kings
County Trust Company; Secretary,
John
Heinrich, Assistant VicePresident Lincoln Savings Bank,

New York

Olderman, Asbeck

William

mist

for

the

Irwin,

American

econo¬

Philadelphia

the

ing

dressed

Graduate School

250

bankers

Incorporated
Member: Midwest Stock

Bank¬

University,

Rutgers
the

Minneapolis

Pittsburgh

a.c.aleyn«®company

Association and Associate Director
of

273

Bldg.

Cleveland 14, Ohio

Bankers

Co.

and

Union Commerce

Teletype

Financial 6-4600

year

Treasurer, Alfred M. Olsen,
Cashier Lafayette National Bank.

St., Chicago 3, 111.

Telephone

Municipal and Corporate Securities

with Mr. Munz during the coming

Dr.

Midwest Stock

Exchange
Philadelphia-Baltimore Stock Exchange

Exchange \

ad¬

Investment Securities

present.

Public

Industrial

Utility

Kailroad

Underwriters and Distributors

•

Municipal
'

Affiliated with
Listed and

Unlisted Stocks and Bonds

National

Underwriters

—

Municipal Bonds

ajgaleyn

Fidelity Fund, Inc.

Members
New York Stock

Midwest Stock

Pa Ell H.Davis & Oo.
Established

Members principal Stock

10 South

100 West Monroe

Street, Chicago

Kansas

CG 405
PEORIA,

ILL.

(Associate)

Street, Chicago

Exchanges
New. York

La Salle

Exchange

New York Curb Exchange

1916

co.
&

ROCKFORD,

ILL.

Boston

City

Portland, Me.
Waterloo

Milwaukee

Omaha

Aurora

{

Commercial and Financial Chronicle... Thursday, December 14,

The

1950

(2354)

from page SI

IBA PAST PRESIDENTS

South¬

decades of Dallas and the

Continued

west, and said that "the breaking
of

Bankers

News About Banks and
Bankers
Association. He is also a member
Of
the
South
Dakota
Banking
Commission and a regent of the
Graduate School of Banking. Rut¬
vision

graduated in 1940. He will re¬
place J. R. McKnight, Pierre, S.
Dak. banker who was not a can¬
didate for reelection.

1604.

000 to

Ground

breaking ceremonies

the

29. Pres¬
ident Fred F. Florence scooped the
first dirt from the ground.
The
Dallas were held on Nov.

Following the declaration of a
dividend
of $100,000,
the
National

(effective

$200,000,

creased from

leaders

stockholders of

City

National

Bank

declare

100%

and

spoke

the

reduce

the

one

Florence

President

were
AM-FM sta¬

stations.

reviewed

importance of the Republic

dividend

stock

over

par

the

progress

cere¬

activities

the

tion and three television

Co. of Kansas City, Mo„

tors

who

and

broadcast

& Trust
approved
the recommendations of the direc¬

the

Angeles,

that the bank's direct¬

Los

and the directors of The Whit-

ors

National

tier

Trust

•

Savings

and

whereb.y

agreement

California

Bank

will

Syracuse University

the

Bank

of the last three

tional Trust and Savings, the sale

soon

the

Dec.

According to Mr. King, all pres¬
ent active officers and employees
The, Whittier

Bank

Savings

istration
,

continue
The

will

Whittier institution has been
der the sajne

the
eral

un¬

the Whittier Bank.

Teletype CG 540

Randolph 6-3900

stock

real,

meeting

the

E.,

the

bank's

the

ticker and the
All three

firm

Andrew

admitted
Mr.

exhibit of stock and bond

Minker
as

bonds,

announce

J. Minker has been
a

general

has

been

partner.
with the

cashier.
k

Assurance

He succeeds

McDougal and Condon

dier, who will retain his seat on

Chicago 3, Illinois

William

Street, New York City, dealers in
United States Government, state
and »municipal

Co.,

Leeds

Bartow

that

C. Newburn,
industrialist and sol¬

statesman,

Investment Securities

105 West Adams St.,

Company of Canada.

Majon-General

Minker to Partnership

brokerage office,

Co., Ltd., and

Life

Mutual

simulated

Bartow Leeds Admits

exhibit will

President

of the Lang Tanning
of

dealer.

sides

Lieutenant-

Lange

be; in full operating during
the five-day display, transmitting
regular financial information. Be¬

elected to the bank's board of di¬

Mr.

seen

will

Governor of British Columbia was

rectors.

never

Dow-Jones news ticker.

Clarence

bank.

the Curb Exchange

office),

(head

Montreal
of

have

certificate, how the

equipped with three tickers—the
New York Stock Exchange ticker,

Louis L. Lang was elected a VicePresident

who

bond

securities business operates.

annual

the

or
or

One feature of the

Wallace,

KETCHAM & NONGARD

board

Incorporated

directors,

while relinquishing the Vice-Pres¬

BONDS
MUNICIPAL BONDS

Teletype: CG 385

Telephone: DEarborn 2-6363

Dry

Municipal Bonds

Co., Ltd., succeeds William
President of the
B. C. Electric Railway Co., Ltd.,
who has been a member of the

Dock

REVENUE BONDS

•

Burrard

G. Murrin, former

STOCKS

•

the

who

Wallace,

Mr.

idency.
President

Underwriters and Dealers

bank's

board since

Chicago 4, 111.

208 S. La Salle St.

1936.

New Orleans S. E.

Teletype CG 276

Elects Officers
NEW
B.

ORLEANS, La.—Macrery
Wheeler, Wheeler & Woolfolk,

Inc., was elected President of the
Orleans

New

Stock

Ex-

change,
ter

Kings¬

Co.,

ident

Woolfolk

was
Vice-

chosen

Chicago, 111.

i
B

John
S

PREFERRED & COMMON STOCKS

two

Shober,
—

the

years.

CORPORATION BONDS

Pres¬

for

past

MUNICIPAL

DISTRIBUTORS

MUNICIPAL AND

& DEALERS IN

ton,
W.
D.
Kingston

4^r.U'S. C°\
Davenport, Iowa

UNDERWRITERS, PARTICIPATING

Wal¬

succeed

BONDS

President,

Underwriters

Distributors

Macrery

Wheeler

and

r w

w e

Schweickhardt, Landry &
Co., was named Treasurer.

hardt,
IOWA-ILLINOIS MUNICIPALS and GENERAL MARKETS

Elected

We invite your

offerings

Work," and a film on the Federal
Reserve will be shown continu¬

particularly

office

shareholders of the Bank of Mont¬

Phone

"Money

movie,

Exchange

Stock Exchange.

In 1905 it be¬

Savings Bank.

CHICAGO 3

nately misunderstood by the vast
majority of the public.
Besides the display the Stock

students, faculty and the gen¬
public with the functions and

management since it
try,
on Oct. 1, 1901, as

established

39 South La Salle Street

Sigma,

operations of the securities indus¬

stitution, the Home Savings Bank,
the name then being changed to
The Whittier National Trust and

School Bonds

Phi

Delta

honorary,

the New York ously during the week.
Among
the speakers during the week will
The campus exhibition is de¬ be
Lewis
Gilbert,
nationally
came the Whittier National Bank
signed to show people who have known minority stockholder, and
and on July 1, 1930, it was con¬
never
been inside of a broker's William Pope, a local securities
solidated
with its affiliated in¬

was

Municipal, County and

and

the week-long
exhibit is designed to familiarize

their respective positions.

institution—is

tional

phases of the securities industry.
The
idea
for the Investment

Syracuse

finance

Trust

National

posit

display

Week was originated by Robert
University campus. Menschel, President of Delta Phi
Jointly sponsored by the finance Sigma, because of his belief that
department of Syracuse Univer¬ the security industry is either not
sity's College of Business Admin¬ understood at all or is unfortu¬

the

concluded.

been

educational

Sanders & Co. and
First Trust and De¬
Co. have prepared educa¬
displays dramaticizing

Vance,

being featured from Dec. 11-15 on

16, or as
legal for¬

necessary

have

malities

and

Charmer ^crurttirs Company

American Bank

Bache & Co.. Reynolds &

the Syracuse

be put on

—the first of its kind to

actual transfer of the business will
as

"Investment Week"

purchase being subject to the
approval of the shareholders of
each bank.
It is expected, that
place

Note Co.,

Co.,

purchase

business of The Whittier Na¬

take

certificates by the

Investment Week at

Bank, of Whittier, Calif., have ap¬

proved

Lewis B. Franklin

Boy C. Osgood

and

the

above

mony,

On Nov. 22 the

President

announces

the

King,

Bank,

ground, was lauded by
various Dallas civic and business

Bea¬

capital of
Nov, 8) in¬
a

$100,000.

Bank

reports

Neb.,

California

$17,500,000 Republic building,
which will rise a total of 600 feet

new

trice,

beginning of con¬
struction on the new building of
the
Republic National Bank of

of that amount.

stock

new

$200,000.

marking

stock

Beatrice

000 increase came from the sale of

Frank

of $100,000.
*

the

increased

been

$800,000; $200,000 of the ad¬
dition
resulted from a $200,000
stock dividend; the further $200,-

from

stock dividend of
Citizens National
Bank of Chillicothe, Mo., has been
increased as of Nov. 8, from $100,Through

$100,000,

of Nov. 17.
from $100,000 to $200,000 is re¬
ported as a result of a stock divi¬
*

having

amount
to

McCook, Nebraska, as

dend

history of Dallas

and the Southwest."

to
to
to
■
4
Details of the plans,
capital
The First
National
Bank
of
from $2,000,000 to $4,000,000 were Beaumont, Texas, reports a capi¬
tal of $1,000,000, as of Nov. 22, the
given in our issue of Oct. 26, page

Bank

National

First

Bank but in the

1915-17

would increase the

which

capital of

of the

Enlargement
the

$100 to

1920

$25 per share.

which he

from

University,

gers

stock from

the

value

American

the

ground on this site marks thfe
beginning of a new era, not only
in the history
of the Republic

ernors were

the

Board

I
1

H.
&
Smith, and Walter D. Kingston.
Officers of the Exchange serve as
members of the Board, ex-officio.

Co.; Larz E. Jones; George
Nusloch, Nusloch, Baudean

OMAHA

212 South 17th Street, Omaha

Gov¬

M. A. Willem, Beer &

Wachob-Bender Corp.

|
|

Telephone—Ja. 4204 *

Lincoln Office—Trust Building,

2, Nebr.

Teletype—OM 283
Lincoln 8, Nebr.

Volume
*

172

Number 4968

The Commercial and Financial Chronicle

•

(2355)
>

Steel Output Scheduled to Exceed

Continued

from

page

Last

Week's

Capacity

0.8

Point

price hikes of $60 to $80
Chevrolet

which

cars

were

natural

1951

offered

during the past week. Pro¬
portionate advances are expected
the soon-to-be-introduced

of'

models

Pontiac,

The

price

which

the

production
creased.

monopoly,

The

nance

Corp., which manages the
Federajly-owned synthetic rubber

the

industry, boosted general

what

synthetic
a

24.5

six-cent

cents

increase,

Thursday of last week.

predicted

the

in Akron

government

was

would

Wages

the

peg

price of natural rubber shortly at

50: cents to

lion

cash

55 cents

price

week

was

67 Vz

pound.

Its

the

million

month.

by ordering rubber manufacturers

caused

government

effect

natural

reduction

11%

January and 22% in February.-

Larger

rubber products will be allowed to

enough

rubber
make

additional

behind

synthetic

the

for.

reduced

The

net
use

result

90,000

will

tons

that

they

new

increase

Total

builders
tons

and

non-farm—plus

landlords gained
rate

can

rubber,

$45

—

from

about

SECURITIES
BONDS

This

tons.

tons

staff

probably hit

Telephone ANdover 3-7055

Teletype CG

included

Total
week

increase
above

the

1949, but

45,999

cars,

6.6%

corresponding week in

output

was

and

for

current

of 127,502
trucks built in

24,694

United States and
and

cars

the

made up

1,569

cars

the

total of 6,097

trucks

built

the

For

total

United

output

against

last

decrease of 64,250 cars,

States

alone,

152,196 units,
week's revised total
was

Continued

page

Investment Securities

Straus
NEW

YORK

135

are

STOCK
STOCK

CURB

EXCHANGE
EXCHANGE

EXCHANGE

SOUTH LA SALLE

(ASSOCIATE)

STREET

CHICAGO 3, ILLINOIS

Blosseh

MEMBERS

NEW

DETROIT

TELEPHONE
ANdover

also

MILWAUKEE

3-5700

GRAND

RAPIDS

TELETYPE

650-651

PRIVATE WIRE SYSTEM

COAST TO COAST

Retail

Trading

nonferrous

items

price controls

order.

start

chance

them might

placed in effect at once.

Wage controls will not be air¬
tight, but will allow for a cleanup
of fifth-round demands. And they
will permit elimination of inequi¬
week

the

all

Co.

•

■

»-;■«

Underwriters

and Distributors

of Investment Securities

trade
Producers are
this

areas,

deliveries, and DO orders

coming

raised

were

some

are

extended.

the limits

DO's

Established

1893

to two months behind on

one

ders

■

fori steel is

cry

G. Becker
INCORPORATED

merit increases.

some

items

CHICAGO

NEW YORK

SAN FRANCISCO

And Other Cities

Before
or¬

booked

producers had

some

be¬

far ahead

July.
They believe that the
higher
limits
will be filled
as

quickly.

Becker &
A

Carl McGlone & Co., Inc.
Member Midwest Stock

Exchange

Co.

PARTNERSHIP

Prices of

steelmaking scrap are
areas.
Increases at
Pittsburgh, Philadelphia and Chi¬
cago raised "The Iron Age" steel
higher in all

Members
NEW YORK

composite price by $4.33 a
gross ton to $45.08 per gross ton.
scrap

American

The

Iron

STOCK EXCHANGE

YORK

NEW

MIDWEST

CURB

STOCK

EXCHANGE

Steel

and

Institute announced this week that

Investment Securities

the

operating

panies

making
pacity
105

S. LA

SALLE ST.

CHICAGO 3, ILL.

11,

the

101.3% of ca¬
beginning

week

1950,

rise of 0.8 of
The

com¬

of the steelfor the entire

compared

of 100.5% a week ago, or

average
a

will

for

of steel

94%

capacity

industry
Dec.

rate

having

rate

point.

for

the

United States Government

week

current

approximately 1.7 points, the rec¬
ord

high reached

the

week

State and

Nov. 6.

This

week's

equivalent
steel

ingots

entire

Harris

INCORPORATED

ago,

based

rate

was

and

209

Midwest

SOUTH LA

Stock

Exchange

SALLE

2-1421

new

102.7%

Municipal Bonds

the

1,-

A month

the

capacity,

and production

it stood at 94.1% and 1,734,-

the northern trust company
Chicago

Electric Output Makes New

STREET

Historical

High

Record

The amount of electrical energy
Tele.

864

distributed
and power

NEW YORK OFFICE:

for

is
of

700 tons.

CHICAGO 4
DEarborn

castings
compared

week ago.

tons

amounted to 1,980,800 tons; a year
ago,

Members

1,953,800

industry,

938,400 tons

Sills, Fairman

rate

operating

52 WALL STREET

ended

the

electric

FRANKLIN

2- 7070

NEW

light

industry for the week

Dec.

6,908,631,000

was

kwh.,

estimated

according

the Edison Electric Institute.

•

2-157 2

BELLSYSTEM TELETYPE-CG

YORK
15

HANOVER

Canada.

KANSAS CITY

that

some

get out of hand there is

still
1384

which

States production

of 7,563,000 cars and trucks.

The week's total
represented an

es¬

administer

scrap,

steel

and

prices

ties and

Street, Chicago 3

week,

United

will
basis, and they

authority reports.
La Salle

Rail¬

roads, representing an increase of
38,501 cars, or 5.5% above the

program

before

selective

This

South

Dec.

taled 739,922 cars,
Association
of
American

year ago.

When they come they

louder

Reports,"
compared
previous week's total of

units,

(revised) units and 52,514

Total

freight for
2, 1950, to¬
according to the

revenue

ended

year's steel needs at

million

there

ESTATE

Automotive

thus far this year attained a total

the week

a matter of time.
One thing
holding them back. now is that

that

MUNICIPAL

and

past week, according

159,862

152,107

pro¬

units

only

Trading Markets in

REAL

years ago.

"Ward's

vehicle

United States

Carloadings Advance 5.5% in
Post-Holiday Week

MIDWEST

people alone

finally approved.
Price-wage controls

The petroleum in¬

probably be pared down

metals

UTILITY

the

stage,

will

PUBLIC

planning

million

INDUSTRIAL,

program,

11.9

them.

BARCLAY INVESTMENT CO.

Canada

Week

motor

expected to get 8,000

are

monthly.

timate

billion in September

$45,600 million in October.

allocation

building

The petroleum

all

annual

sponding period two

trade paper states.

dustry and agricultural equipment

farm

earnings

short¬

be announced.

soon

final

duction

with the

makers will also get a share, this

were

will

the

Latest

Combined

totaled

tons of steel
per month
during the second
quarter.
Canadian
freight
car

farmers'

incomes

Auto Output Advanced Further in

will take about 70,000

and

unincorporated businesses

con¬

sumption of natural rubber.

increase

What

labor

steel

new

locomotive

now

marketings

crop

earnings.

during the two months to
up

September to $24,700 million.

Makers of tires, tubes and other

use

the

wages

may

is just around the corner.

programs

with

10, 1949,

Thanksgiving holiday.

age

Expanding armed forces
most

firms

business.

critical

below the comparable pe¬

and 1,203,808,000 kwh. in excess of
the output reported for the corre¬

will lose experienced workers

salaries,
advancing from $23,700 million in

192,358,000 kwh. higher
figure reported for the

the

preceding

mounted

the

Others

defense

time when

Factory payrolls made up
$53,100 million of this total, rising
$1,100 million from the previous

rubber

use

was

these firms fear most is that they

pay¬

compared

few

have
to follow suit if they can't obtain

month.

cents.

authority took definite steps

cut

October,

$150,600

Wednesday of last

This week the National Produc¬
tion

is that

have already found it necessary to

some

riod of 1948.

Loadings of

the slack.

result

lay off workers.

annual rate of $153,100 mil¬

It
than

ma¬

defense

and

not coming fast enough

Several

salaries

and

Iron

being strangled by

are

The

the overall

security

regular

"The

restrictions

to take up

with some¬
higher earnings by farmers
social

above

historical

for the week ended Dec.

orders

they more than offset a
decline in corporate dividend pay¬
ments.
>

In rubber

circles

Depart¬

ments,

their

according

duction is

Along

bigger

and

pound,

between

national

terial

by manufac¬

cause of

rise.

income

purpose

effective

principal

suspended

metalworking
weekly, in its current summary of
the steel trade. Their regular pro¬

turing
companies
and
Federal,
State and local governments were

Fi¬

the

new

orders,

million

month, the

Increased payrolls

in¬

was

Reconstruction

record

previous week, 1,027,271,000 kwh.,
or
17.5% above the total output

Age,"

ment of Commerce reveals.

rubber
has

ran

$230,100

output

peacetime production and military

during October, or $1,400 million
higher than September, the pre¬

new

vious

synthetic

personal income

rate

themselves

vacuum

the two months.
Total

Oldsmobile,

government

Industry

synthetic, during each

yearly

Buick and Cadillac.
on

find

Electric

week ..attained

high record for the industry.

This week many manufacturers

The State of Trade and

•

368

REPRESENTATIVE

BROAD

STREET

BELL SYSTEM TELETYPE-NY

1-853

The Commercial and Financial

(2356)

Continued

page

The East and West

Pacific States.

147,300 units, and in the like
week of last year 46,667.
Cana¬
dian output in the week totaled
of

North Central States

reported de¬

during the week.
More
succumbed than last

creases

7,666

units

businesses

units

year

one

compared with 4,817
week ago and. 5,847 units

West

year ago.

States, while they remained at the
level
in
the Middle and

Business Failures Move

Moderately

in the West North Central,
South Central, and Pacific

same

Upward

Regions. Declines
reported in the

South Atlantic
1949

Commercial and industrial fail¬

from

increased to 170 in the week

New

ended Dec. 7 from 160 in the pre¬

East

ceding week, according to Dun &

States.

ures

Despite this rise,

Bradstreet, Inc.
casualties

not

were

year ago

tinuing

level,

for the week's increase.

place in

marks

rise of 4.5%
of $6.48
gain of 13.6%

the post-Korea low

Oct.

10,

and

above the June 20 index

of $5.96,

retailing and commercial service.

just before the start of the Korean

Wholesaling and construction fail¬
ures declined.
Except in whole¬
sale trade where
ed

last

were

less

than

ago,

increase of

year

j^gyalties
ago.

The

represents the

price

regions,

including

trend of food

New

and its chief
the

show

general

prices at the whole¬

sale level.

England, Middle Atlantic, and the

sections increasingly
stimulated
by the approach of
Christmas, states Dun & Brad¬
street, Inc., in its current sum¬
mary of trade.
Shoppers bought slightly more
apparel than in the preceding

higher. Cash corn rose to
ground since October,

high

slightly
above the government loan level.
Country marketings of the yellow
cereal, however, remained small
1948, with current prices

totaled

interest

bushels,

267,523,000

—

with

and

result
of

price

was

from

further new

the

sugar

distrib¬

increased

market
upward
under
the
in¬
of higher freight
costs.

turned

fluence

BUILDING

sugar

raw

Cottonseed oil developed an

Teletype—DE 336

trend
was

firm

easier

Lard
and higher, aided by an
sessions.

closing

active export demand.
of livestock

such

mar¬

higher tone, with steers advancing

McDonald-Moore & Co.

new

high levels for the season.

Raw cotton

regularly

EXCHANGE

it*

Heavy
end

fears

Municipal and Corporate Bonds

some

spot

and

The

26, MICHIGAN

closed

period,

sharp

futures

New

York

42.30

the

toward

losses

both

FLINT

peak of 44.80.
ber

parity

estimates

cents

pound,

for

cotton,

analyzing

rose

volume of orders was

the

week in

level

1949.

for

information

available

cago;

Shannon

First

dollar

Securities

and

Cook

Emerson

Palm

Beach,

Co.,

and

offices in those

Durham,

Corp.,

Company;

will

cities.

Investment Securities

Members Detroit Stock Exchange

Members:

BUHL

DETROIT

BUILDING

New

York

Detroit

26, MICHIGAN

Stock

Exchange

Stock Exchange

DETROIT 26,
Teletype
DE 195-6

Private Wire

New

York

Midwest

Curb

Stock

Exchange
Exchange

MICH.

W. E. Hutton &

Co.

Ann Arbor

New
Chi¬
Detroit;

and Phelps, Inc.,
City; McDougal & Co.,

Byrne

York

WAILING, LERCHEN & CO.
George A. McDowell & Co.

to,

municipalities and dealers.
This firm is initially sponsored

slightly

similar

actual mar¬

will provide complete
engineering and financial data,
thus
making comprehensive re¬

appreciably*

the

for
determining their

prior to

keting.

+4 to

While the number

Wrightsman

complete facilities

and

feasibilities

-1-3 to +7.

buying

bond

issues with

East,

+9;

rev¬

enue

by these

Coast

tax

exempt

from

during the week and total

The mid-Novem¬ rabove

price

write

+2 to +6; and North¬

Wholesale

quotation

spot

+5 to

England

Midwest and Pacific

+ 8; South

analyze

under¬

and

percentages:
New

primary

tion is to orig¬

ago.

year

varied

bonds

of the
organiza¬

new

many

The

Wednesday

estimated
above

Regional

was

spe-

z e

inate,

ended

week

has
1 i

purpose

west and Southwest

markets.

compared with the recent all-time
RAPIDS

from

influenced by

price control legislation,
in

limited

years.

Total retail dollar volume in the

last

for

sections.

period

revenue

was

appliances

large

buying

the levels of a year ago

liquidation

the

resulted

Listed and Unlisted Stocks

trading

wide

last week.

range

Underwriters and Distributors

prices fluctuated ir¬

over

un¬

the

70
The

Wrightsman
who

articles

virtually

was

while

York City.'

by Edward F.

tableware, smoking equip¬

changed,

of the

tion is headed

There was a rising de¬

items

trical

All classes

the Chicago

made

corpora-

new

ment, small furniture, and novel¬
ties.
The interest in many elec¬

ket closed the week on a firm-to-

Pine Street, New

volume

mand for small household

Inc., with its principal office at

helped to lift
durables

dollar

of last year.

formation of Municipal Securities,

noticeably above a

sustained

year ago.

utor buying interest.

spot

for fresh meat

consumers'

week;

preceding
was

like period

Firm in New York

appreciably above the level of the

refined

for

spirit

sale

regis¬

and for the

to date, volume advanced

Announcement

slightly, reflecting

very

Yule

The

ended

Municipal Securities

price rises for some cuts.

continued to

four weeks

2, 1950, no change was

tered from a year ago,
year

was reg¬

the similar week of

the

For

1949.

goods

canned

items

declined

Ware¬

controls.
cocoa

reflecting

end,

DETROIT 26, MICH.

GRAND

decrease of 12%

istered

period

preceding

the

year.

above

moderately

were

Consumers requests

and

uncertainties

Demand

The

DETROIT

week

popular with housewives;
canned vegetables were in partocular demand in some vicinities.

trading turned cautious and
prices trended lower at the close

Complete Trading Facilities

STOCK

dresses

budget

last

were

ago,

sales

Many

the week.
Although
finished higher than a week

showed improvement at the week¬

SECURITIES

DETROIT

was

department

York City, for

advanced 2% from the like

the level of a year ago.

steady

holding

prices

decline, establishing

Dealers

CORPORATE and MUNICIPAL

MEMBERS

There

formal dresses; the

Federal Re¬

period to Dec. 2, 1950,

the weekly

increased slightly during the week

limited

low for the year.

PENOBSCOT

sought.
and

suits

ter

the

index,

store sales in New

sport shirts for men, were

3% from the like

Board's

from the

fears

Exchange

—

According
serve

women,

store

the past week

period of 1949.

Dec.

1922

Distributors

increased about

The generally limited. Tweed was in¬
latter
compared 'with 41,6*00,000 creasingly favored in business suits
bushels the previous week, and for men.
41,500,000 in the same week last
The retail dollar volume of food

continued

of the Christ¬

department

sales in New York

lace-

and

for

blouses

especially

advance of 5%,

holidays

mas

daily average of 44,700,000.

house stocks of

Underwriters

registered

With the advent

seasonal rise in demand for Win¬

well

skirts

woolen

trimmed

Demand for hard wheat bakery

S. R. LIVINGSTONE U CO.

corresponding period
and for the year to

ago

year

date

Sportswear continued to be fast-

trading in grain futures on the
Chicago Board of Trade last week

cocoa

Stock

ago.

year

selling;

basis

Detroit

2, 1950, sales showed a rise of

2% from the

somewhat

ing for much higher prices.
Mar¬
receipts of oats were extremely
small despite near-record stocks
in farmers' hands.
The volume of

throughout

Members

level

the

above

ket

flours

Established

Dec.

ended

For the four weeks

week.

many

week with sales volume

to be hold¬

with farmers reported

the compar¬

for

for the previous

decrease of 3%

period last year and buying

able

although

firm to

moderately

r/as

level

the

above

light

remained

wheat

ment

Wednesday

The total dollar vol¬

sales

ume

The country move¬

cash market.

ended

period

of last week.

noted in the

interest

buying

the

This compared with

of last year.

year.

function

sum

pound of 31

per

foods in general use

Slight weekly increases occurred
five

17.5%.

index

total of the

appeared in

manufacturing.
-

this week's figure shows an

mortality equal¬

most marked decline

Compared with $5.76 a year

war.

level,

year's

period. Wheat averaged higher in
relatively slow trading with a bet¬

new

over

manufacturing.

Mild increases also took

the

general undertone was
firm, however, and most grains
finished with net gains for the

Board's index
2, 1950,
1% from the like period

the week ended Dec.

declined

Resurging to the fairly high
level of past weeks, nationwide
consumer
spending reflected the
return of seasonal Fall weather in

The

ter

Department store sales on a
country-wide basis, as taken from
the Federal Reserve
for

Weather

Seasonable

war

in Korea.

ordering of some items

apparel the past week with aggre¬
gate volume modestly above that
of the similar 1949 period.

Trend With Return of

above that of the pre¬
vious short holiday week. Trading
in corn was active with prices

$6.82.

Most of the week's upswing was
in

the

of a

noticeable increase

There was a
in the

Upward

Reflects

Volume

Trade

figure to the highest level since
Sept. 21, 1948, when it stood at

Small casualties, those involving
liabilities under $5,000, accounted

concentrated

were

result

trend

adverse

the

news

unsettled

and

nervous

last week

markets

price index, compiled by Dun &
Bradstreet, Inc., rose 1.5% to $6.77
on
Dec. 5, from $6.67 the week
before.
This brought the latest

well below the prewar
failures were down 43%

from the 1939 total of 297.

/■

1948

current upward
wholesale food

the

Extending
movement,

Con¬

in the similar week of 1948.

England, East North Central,
South Central and Mountain

Highest Since Sept. 21,

when 191 occurred,
but they remained above the 122
as

year ago.

Grain

slightly below the level

was

compared with 1,225,000 bales in
the same period last year.

lier, and with 247.47 on the like

previous week, it

the

from

what

for

talling only about 4,000 bales
the season through, Nov. 23,

were

Wholesale Food Price Index

numerous

year ago.

compared with 302.02 a week ear¬
date

attending the various
increased some¬

buyers

wholesale markets

pound.
The movement of the
staple into the government loan
continued at a very low rate, to¬

daily wholesale commodity
price index, compiled by Dun &
Bradstreet, Inc., rose to a new
high of 305.00 on Dec. 2, but sub¬
sequently turned downward to
close at 302.79 on Dec. 5.
This
The

The State of Trade and Industry

14, 1950

Thursday, December

...

showed a rise of 25
cents from a month previous to a
new all-time high of 32.12 cents a

Agriculture,

Slightly in Week

Advances

by the Department

announced

Level

Wholesale Commodity Price

Chronicle

Jackson

maintain

Volume

172

Number 4968

The Commercial and Financial Chronicle

(2357)

Continued

from

page

of the fact that bank loan
expan¬
sion since mid-year-has totaled

IBA GROUP CHAIRMEN

the

amazing sum of six billion
dollars, much the largest autumn
expansion in history. It is a sim¬
ple fact that each dollar of bank

Our "Fluid" Defense

Against Inflation

posits

surance,
increasing savings de¬
posits,, etc.
(2) Borrowing for the puichase
of

consumer

goods—automobiles,
household appliances, home mod¬
ernization, furniture, etc. Credit
in

this

field

billion

has

dollars

and it

increased

the

charge

live

billion

now

This

10%

mendous
made

whole year's disposable income of
the nation.

past

estimated

growth

credit

which

high record

new

tremen¬

dous consumption of materials and
use

manpower

which

continued

level

might

slow

The defense set up

against this down the defense effort. The de¬
higher prices is fense set up against this type of
Regulation W, with whose terms credit pressure toward higher
this audience is fully familiar. We prices is
Regulation X, authorized
toward

pressure

have

all

been

curious

the

by the Defense Production Act of

effects of the Regulation and the

1950

monthly estimate

concurrence

October
erable

When

suspense.

found

was

that

the

credit

sumer

of tne end of

awaited with consid¬

was

of statistics

the

mass

assembled, it
increase

had

been

was
con¬

checked

although not entirely eliminated.
In place of a monthly increase
ranging from 464 million dollars
to

644

million

curred

dollars

oc¬

during the third quarter of

the year,

the October increase

only 51 million dollars.
too

had

was

It is still

early to say whether this de¬

velopment

was

caused principally

again

this

terms

for

homes

eral

for

new

loans

on
existing
by the Fed¬
Administration.
I

report

measurement

any

of the effectiveness of
X

which

12,

hundred
were

Regulation

went into effect

1950.

Something
thousand

12,

not

housing

counting

under

four
units

houses

construction.

building industries will

tinue

Oct.

the commitment stage on

the

the slowing down of auto¬
sales due to preparation

familiar

purchase

for

and

cannot

it was

the

Housing

ready

such

Here

homes when insured

Oct.

mobile

audience

the

Hous¬

with the terms of the Regulation,
which at present is
limited to

W imposed on Oct. 16 or whether

complex of other factors,

with

of the Federal

ing and Loan Administrator.

by the tighter terms of Regulation
a

inaugurated

and

months to

active

come

The

the

course

consumer

future months for

pretation of the

credit

better

causes.

inter¬

for

al¬

con¬

many

before the effects

as yet
regulation in the rental hous¬

ex¬

by saies of government securities
of bank portfolios.

out

of these securities

Federal

Reserve

Amyas Ames

Banks

Production

One de¬

(4)

Act.

Bank loan expansion

This

is listed

was

one

of the forces work¬

Company
Limited, Toronto

required by the increase
deposits at member banks.
A
portion
of
the
securities
was

reserves

uimiiiiiiiimiimiiimiiiimiimimiimimniiiiiiiimiiiimimiiiiiiiiiiiiimii^!

bought by government trust funds
like

the unemployment insurance

trust

fund, whose assets have been
growing during |this period of
near
full employment.
Another

part of the

UJ1 THE MARSHALL

CO.

=5
f JT

government securities

was

bought by corporations whose
liquid asset position has been im¬
proving under today's conditions

•

Nevertheless, in spite of the oftsetting sales of government secu¬
rities, some of which have drawn
down bank deposits, the net bank
credit expansion since mid-year
was

$3 billion, representing

rise

the

supply

money

of the

•

WE MAINTAIN

of full production and profits.

MARKETSlN

LOCAL SECURITIES

Milwaukee 2, Wis.

765

NORTH

WATER

STREET

•

TELETYPE

MARQUETTE

8-8130

461

country.
I

do not need

that

ence

from

way

the

very

finance

loans for defense

the

other.

be¬

the normal loans to fi¬

are

plant

growth
curs

expansion

oc¬

Causes Increase

the week

Co.

Members
Neio

York Stock Exchange

Midwest Stock

Bank

Robert W. Baird

the

which

receivables

and

fall.

every

What

1111111111111111K i II111111111111111L11111M111111111II1111IIII It 11

audi¬

It ranges all the

consumer

credit

hand to

one

3111111111111111111111

to tell this

bank

complex affair.

ing toward higher prices in view

Boston

James A. Gairdner
Gairdner &

through

the money market to obtain

tories,

was

Tucker, Anthony & Co.,

New York City

to the

Horace W. Frost

Kidder, Peabody & Co.,

A portion
sold

was

ing field although chis area may nance crop moving and loans to
be regulated under the Defense business to provide normal inven¬

velopment in October which

by Regulation W

bor¬

one half of the effect
the money supply of the bank
loan expansion this fall was offset

Thus,

not

caused

not

they have the immedi¬

production

other

very

the fact that

tween

are

business¬

picture of bank credit

Furthermore, there is not

summer

dollars
because

pansion is somewhat modified by

any

last

We shall need to observe

might add

intention of spending the pro¬

buying

CANADA

ceeds.

of Regulation X become
apparent.

factors.

dollar

individuals do

unless

models, a slowing down in
consumer buying due to the
heavy
new

ENGLAND

possible the

in residential construction in 1950

NEW

that

housing. This tre¬

dollars, which must be paid out of has also made possible
future income.

the

ate

loan

dollars

and

men

row

adds

supply.

bank

active

the American public owes 41 bil¬
lion dollars for

four

billion

dollars

it is

year and

thus

and

money

that

credit.

account

(3) Borrowing for the construc¬
tion of housing. Real estate credit
has expanded between four and

year

past

totals nineteen

now

the decrease of 38 million dollars
in

YORK

credit perforce increases bank de¬
the

goods and to substitute increased
savings in the form of purchases
of Federal savings bonds and in¬

NEW

New

York Curb

Exchange

Exchange (Associate)

Loans?

before

Thanksgiv¬
ing the Federal Reserve authori¬
ties

INDIANAPOLIS
•
129

BOND AND

CORPORATION
EAST

MARKET

INDIANAPOLIS

★

see

Robert W. Baird

the
the

Information
71

some

was

requested
combined

loan

since

June

Wisconsin Securities

billion

Specialists

sixty-five million dollars
approximately one-third of the

increase at all banks in the

Exempt and Corporate

Bought

coun¬

the total increase

Telephone MA-4321

Sold

MILWAUKEE

in loans to

was

commodity dealers and processors
of
agricultural
commodities
as

Teletype IP-298

—

At these banks about 60% of

try.

Securities.

Co.

Underwriters

two

was

Incorporated

from

whose

banks

in issues of Indiana Tax

causing

loans

increase

★

check

been

largest banks in the United States.

INDIANA

Investment Dealers and Underwriters.

spot

had

increase

•

BUILDING

made

what

Telephone: DAly 8-0525

Teletype: Milwaukee 291

follows:
Cotton

$487 million
—

Other

commodities.

203 million

Food and

206 million

liquor mfg.
Tobacco mfg

142 million

Textiles, apparel and
130 million

leather

Grain and milling—

65 million

Sales finance loans increased $324
million.
Loans
to
retail
and

DEALERS IN

wholesale

million.

Municipal Bonds

creases

trade

increased

There
in

were

other

construction

lines,

and

purposes was

i,
i
i

notably small—only

of metal

Public
Bank

the

loan

Public

Utility

and

Utility

Industrial

Insurance

products actu¬
Industrial

increase

Municipal

Mutual Funds

Institutional

RAFFENSPERGER, HUGHES & CO.
Incorporated

processing,
trade and
the

Indianapolis 4, Indiana
Exchange

retail

breakdown

smaller

and

banks

the

dous

bank

& (g®*
MEMBERS:

While

page

»
I

«
»

E. MASON

ST., MILWAUKEE 2

Telephones DAly 8-5392-3-1-5-8
Bell System Tele. Connection—Ml 488

I
«
I

Chicago Phone—STate 2-0923

I
I

MINNEAPOLIS 2

I
«

EXCHANGE

Continued

MIDWEST STOCK

225

tremen¬

credit

probably be somewhat dif¬

increase

country

same—a

ferent, the general pattern would
doubtless be the

•

figures for

wholesale

credit.

consumer

was almost entirely related
peacetime activities, crop mov¬

would

•

these

ing, agricultural commodity

Member Midwest Stock

manu¬

banks
to

Meridian Street

SBouch

ally decreased by $17 million. .
I cite these figures to indicate
that

20 North

SECURITIES

utilities.

million—and loans to

facturers

Corporate Bonds and Stocks

$10

WISCONSIN

in¬

including

public

The increase in loans for defense

AND

i
•

MILWAUKEE

$272

minor

tfnffuiiieb SJnvileil in

The Commercial and Financial Chronicle...

Thursday, December 14, 1950

(2358)

reduced that our country would

Continued

from page 85

'isms'

Voluntary Credit Restraints
The

bank
one

of urging

The

voluntary restraint
of the country.

bankers

the

problem is difficult due to the

large number of banks. The indi¬
vidual banker cannot be expected
national situation or the

to see the

supply.

that

sure

Chairman

Comptroller

loan

and yet there

made,

remains the hard fact that in the

credit expansion
has added to the money supply at
a time when the effect on prices is
bank

aggregate

what have ' the
supervisory authorities

banking
done in

cally,

the field of bank credit restraint?

Letters

(a)
every

enlisting
their

One

been

sent

the United States
their aid in screening

loans

would-be
should

have

bank in

such

and

explaining

borrowers

kept
letter

at
was

why

loans

minimum.

sent

out

August by all of the Federal agen¬

letter:

"Commercial banks can also do
their

part

rowers

bringing about re¬
credit by advising bor¬
avoid overstocking of
in

and

postpone

un¬

business expansion, and
by discouraging various types of

a National Credit Con¬
ference at which this problem of

holding

lpans that do not make a definite
contribution

defense

the

ef¬

fort."
I

pleased to note that the

was

Washington
taken

has

Association

Bankers

the

same

stand.

Here

quotation from a letter issued
September 22 by that Associa¬

creases

the

some

protective

adopted,

both

measures

voluntarily and/or

imposed by statute
the

value

are

the

regulation,

dollar

could

FIRST NATIONAL BANK BUILDING
SAINT PAUL 1,

Bell

System

MINN.

Teletype ST P

139

to this time.

will

straints

too

real

whether

has

credit

consumer

early

credit

estate

say

ing of

new

re¬

the

increase in

stop the

purposes.

the

words,

soon

emphasis

shift from the

loans to

prompt

screen¬

for
loans

concern

repayment

already made.
the

Thus

In bank credit expan¬

that field.

other

should

been

lease credit for defense

"fluid"

defense

operating.

enforcing them without com-

are

sion,

increase

the

has

Continued

from

page

and

admirably to these regulations

Indeed, they are wholebehind the purpose of
regulations.
Listen to this

plant.

The

Security I Like Best

heatredly
the

quotation from

letter to Chair¬

McCabe from

man

mid-western
large con¬

banker who operates a

have a sizable instal¬

department

ment loan and finance

regulations are

that your new

going to affect us adversely as to
outstandings and also as to in¬
come.
However, in. spite of this,
we
feel the new regulations are
country and

good for the

we are

beyond that small imme¬

look

diate

hurt,

stop inflation.

not going to

are

2IV2 is not indicative of its actual
value.

With.a present

idend

annual div¬
common
stock¬

$1.40

received

holders

Discount rates have been
raised from l1/2% to 1%% by all
Federal
Reserve Banks.
While
(c)

ending Oct. 31, 1950.
available

the

for

than

less

half the $2.88 earned

loan department:

sumer

one-

Montana

Earnings

common

mon

in the

1949 was $2.49 a
share and for 1948 $2.30. This div¬
idend is low on the earnings.
calendar

greater
protection
bombing
and
potential
electric power and natural gas ex¬
pansion for the company.

against

for the year
.

year

Without

attempting to prognos¬
ticate the earnings on the common
stock for 1951 it is reasonable to

dend

present divi¬

abnormally low when com¬

Company

listed

market

stability,

factory

income

the

com¬

New

has relative

gives

has

and

satis¬

ample

earning power at its present price.

With Brainard, Judd
(Special to The Financial Chronicle)

the present price of

make

the common and the

Power

stock,

York Stock Exchange,

expect that something over $3 a
share
should be earned
which
would

with

area

HARTFORD, Conn.—Charles B.
is

Sloan

Brainard-Judd

with

Co., 75 Pearl Street.

pared with other utilities of sim¬
ilar

caliber.

Collins & Williams Co.

Anaconda

Copper

Company

(Special to The Financial Chronicle)

purchases about 27% of Montana
Power Company's output.
If the
demand from this source should

WILLIMANTIC, C
is

decline it would not susbtantially
affect the earnings

position of the

o n n.

—

The

Collins & Williams Company, Inc.

engaging

ness.

Officers

a
are

securities busi¬
L. H. Williams,

President;
Harvey
S.
Collins,
inasmuch as a minimum
Treasurer; and M. T. Williams,
annual payment of $1,800,000 is
today's conditions, the increase in covered by contract with Ana¬ Secretary.
discount rates nevertheless served
conda. This is more than enough
notice that the Federal Reserve
With Bear, Stearns
to cover present annual bond in¬
Banks advised caution in further terest
(Special to The Financial Chronicle)
requirements. The percent¬
bank credit expansion.
age of revenues from other sources
CHICAGO, 111.—Milton J. Ben(d) Short-term interest rates as has been consistently increasing zion is with Bear, Stearns & Co.,
reflected in the prices of short- and decreases the impor|£nce of 135 South La Salle Street.
term government securities have Anaconda's business on the overall

borrowing from the Federal Re¬
serve
Banks is not large under

Caldwell Phillips Co

used

present, the rapid advance

most

profitable types of loans made by
banks.
The banks have responded

writing you today to encourage
you to maintain your stand. . . -.
tion:
To stop continuing inflation some
"The demands on our economy
of us are going -to have to get
in
the coming months
will be hurt a little
along the way, but
extremely
inflationary.
Unless unless we are farsighted enough
proper

been

For the

The campaign is con¬
continued
bank
credit
expansion and its right up through the latest week's tinuing and the battle is far from
The
objective, a strong
restraints
will
be
discussed in figures although bankers expect won.
that the peak for this movement currency
with well maintained
detail by national leaders.
is about at hand.
They also ex¬ buying power is well worth the
(b) At the risk of repetition, I
most earnest efforts of the entire
should point out that Regulations pect a heavy liquidation during
the winter months that will re¬ banking industry.
W and
X strike at further in¬

necessary

Here are the moves:

their

Reserve Board

Specifi¬

important.

particularly

Currency to
supervision.

the

general tenor of these letters
is indicated by the following sen¬
tence from the November Federal

inventories

the

Federal Deposit

The

the day when

under

straint of

were

Corporation and by the

Insurance

banks

Super¬
November,
sent by
the Board of
Bank

messages

every bank loan is sound in the
banker's eyes from the standpoint

collectability

State

jointly.

Governors, by the

impact of his loans on the national
money

the

and

visors

separate
the

the
loan field has been largely
in

defense

inflation

cies

the
Association is

Bankers

have

halted.

Chicago

week

American

Against Inflation
peacetime business at ris¬
ing price levels.
finance

and

aggressively battling.'!

are

Our "fluid" Defense

for foreign
ideologies which we
field

fertile

company

been allbwed to rise by a

fraction

picture.

has

exerted

The

This

1%.

move

■

Harris, Upham Adds

comparative isolation of the
steady pressure to discourage the territory covered by the company
sale of government securities by from congested industrial centers
present holders for the purpose of df the country holds possibilities
using the funds in other ways. It for war plant construction in the

attractive

investments

and to that extent has

encouraged

of funds out of

the diversion

Mass.

—

Walter

CHAIRMEN

IBA GROUP

the

spending stream.

PACIFIC

CALIFORNIA

Question of Increased Reserve
Requirements

NORTHWEST

ROCKY

MOUNTAIN

The Board of Governors of the

U. S.

GOVERNMENT,

STATE AND MUNICIPAL BONDS

Federal
as

not

has

System

Reserve

yet used its remaining powers
increase the reserve require¬

ments

Under

banks.

member

the

law, reserves against net de¬
mand deposits at country banks

from

THE FIRST

Department

NATIONAL BANK

of Saint Paul, Minnesota

The

can

(From 12 to 14% and

raised 2%.

Investment

banks

City

Reserve

and

respectively.)

20%,

Reserve

City bank reserves
against .demand deposits can be
raised- from
increase

26%.

6%) can be
ordered against the deposits at all
(from 5 to

The full

classes of banks.
these
cause

member banks

wards of

securities

use

probably

would

powers

sell

up¬

Robert L. Harter
Sutro & Co.,

San Francisco

Willis H.

Walter J.

Blakely

Blankenship, Gould &
Blakely, Inc.,

Coughlin

Couglilin & Company,

Portland

Denver

$2 billion of government
through the open mar¬

ket to the Federal Reserve Banks

order

obtain the

additional

required reserves.
Aside
decreasing the earnings of

SHAUGHNESSY & COMPANY, INC.

ber

banks, this move would de¬
their
liquidity to some

dispose

they would probably

their

shortest

lowest rate securities.
would

Underwriters and Distributors

from
mem¬

crease

extent since

The

automatic

term,
move

exerting some further restraint on
expansion at member banks.

loan

of.Corporate and Municipal Securities

what

loans

would

make

and

what loans it would refuse.
I

have

MINNESOTA

discussed

with

you

the

"fluid" defense
against
inflation,
the
weapons
which have been used or may be
used and the ways in which they
pattern

ST. PAUL 1,

Investment Securities

Each bank, of course, would con¬

tinue to make the decisions

First National Bank
Building

Harold E. Wood & Company

way

the

FIRST NATIONAL
SAINT PAUL

Beatt.y is with Harris, Upham &
Co., 30 State Street.

somewhat

securities

government

BOSTON,

Chronicle)

short-term

these

made

also

has

(Special to The Financial

BANK BUILDING

1, MINNESOTA

Volume

172

Number 4968

The Commercial and

Financial

Chronicle

(2359)

Continued

from

page

Continued

from

page

anyone

snouid

closure of

fairs of

An Economic Riddle

Security
Dealers Have Accomplished

Wrapped in An Enigma
the

price-making process reduces
flexibility of business adjust¬

the

ments, which is the thing we need
to

and
extent

promote

greatest

the

preserve

possible

changing

conditions of war pre¬
paredness to which individual bus¬
iness

operations must be adapted.

Furthermore, controls over the
price system involve adding an
enormously costly bureaucratic
system within the government and
entail

heavy costs of reporting,
negotiating, and the like on busi¬
ness

think

concerns.

Valentine

would

have

advisory rather than

This

doubtless

made

op¬

impos¬

sible

by the fact that there is no
apparent way to check the wage
spiral except in conjunction with
or after the
imposition of price
controls.
Even
so,
it looks as
though we may be trying to carry
water in
that

its

sieve, since it

labor

will

escalator

farmers will
be fixed

insist

clauses
not

keeping

intact

and

permit prices to

below "parity."

controls, the pres¬
circumstances give us an ex¬

cellent
lesson
of.

opportunity to learn
in the

central

ourselves
consumer

banking.

We
to

inflationary

fore Korea.

Board is

even

-encouraged

ing

served to

be¬

pressures

being permitted and
to

power

use

larger

which had been unduly

Early

evidence

indi¬

that in the circumstances in

which it

was

applied, this general

type of control is quite powerful.
Affected business is yelling that
it is too powerful—because it les¬
sens

Well,

demand

that

for

their

the

was

product.

intention.

deep
the

sense

last

counter

To them

owe

issue

should

gratitude.

During able readily to obtain the market
the over-the- value of his holdings.
The in¬
has made sub¬ dustry should seek the cooperation

industry

business, and in the protection of
investors.

the-counter issues.

But there

work to be

is still much

done—quotations, dis¬

aware

the

whitespace

problem of

the

newspapers.

the

financial

cannot

simply

plunge

into

military commitment that makes
feel secure or that the military

would

says

make

safe

foreseeable contin¬
gency, and then let our economy
and our financial system take the
any

impact

that

military program
they may. National secur¬
ity rests on the dollar, the gov¬
ernment bond, and the price index
just as much as it does on the
of

best

tank, the atom bomb, and the
dar

seems
ness

Non-Military

to attack

our

serious problem

can

double the $15

was

military appropriation, as
done before Congress recessed,
$18

add

now

billion

"lame duck" session and make
real

cuts

at other

are

the

among

that

items

The New York

Security Dealers

Association pioneered in the field
of

ready to admit that

social scientist not to be ddgon

point like this.

dealing with
behavior, not

years

have

are

matter of human

them

and
to

advocated

readers.

the

means

to make quotations

better

tion,
through
the
medium
of
banks, libraries, and perhaps post

offices.

public.

There

and

try

groups

ex¬

tion

shown
of

corporations

are

not

prices.

The labor unions

raising

the

and

wages,

employers do it by raising prices.
But labor complains that its new
wages
are
"paid
with
wooden

nickels," and

and

interest

the

has

ques¬

whose

subject

securities

the

reporting

provisions of the

Se¬

Exchange Act of 1934.

difficult

reasons

believe

business, that

our

understand

why

NASD

and

will

their

cause

have

costs

gone

up.

Thus, there is no end to the infla¬
tionary spiral except sheer ex¬
haustion.

The

taught
to

1930's

get things going

real

those

Senator

Frear

early

this

year.

However, in order further to
tect the public interest, we

urge

Senator Frear

pro¬

posal
tice

unlisted

changes
1934

amend

the

that

his

unsound

trading

"we

Act, be eliminated.
is

now

generally recognized

that information regarding a secu¬

rity is of itself not all important,
but

equal,

greater

marketability

security, if the best interests

of the investor

of this
selves

measure

sponsor

Senator

protected.

great importance
we

fortunate

evening.

to be

are

In view of the

its

not

the

consider

indeed,
our

speaker

Frear's

address,,

13.]

page

Reserve

Board,
Insurance

posit

the

Federal

MUNICIPAL ISSUES

De¬
1026

Corporation, the
Securities Exchange Commission,

nonconvertibility

into gold.

Tftey

"We

say:

FIRST

LINE

BUILDING

MINNEAPOLIS 2, MINN.

paper

Bell

seem

NATIONAL-SOO

Teletype MP 551

doing all right. What is there
worry about?"
To this I an¬
In the

mixed psychological

mechanical

and

process

our

money-credit-market

system, the

breaking point

when there

comes

is loss of confidence in the

tary unit in which values

not

'The

only

many

years

thing

ago

have

DEPARTMENT

are reg¬

istered and property is held or
exchanged. A distinguished Amer¬
ican

INVESTMENT

mone¬

FIRST

said:
fear

NATIONAL

BANK

MINNEAPOLIS

is fear itself." That aphorism might
be applied to the present situation
★

★

by saying: "The greatest thing we
have to fear in the economy of the
United States is a spreading fear

Allison-Williams Company
ST. PAUL

Minnesota* North Dakota and South Dakota

That distrust is already upon us
in

MINNEAPOLIS

Specialists in state and municipal bonds of

to the future of the dollar."

some

cure

degree.
it

private policy.

Western

It is not too late

The signs of fear are daily

"What

as people
the best

inflation?"
tion
In

Wire"

facilities

—

MP-178

accu¬

ask each other,

hedge against
Hedging against infla¬
flight from the dollar.

recent months

growing

"Bank

TELETYPE

have not been clearly enunciated.

mulating

Union

sound

public and
But those policies

procession

have

seen

economic

refugees fleeing from dollars into
business inventories and
durables.

Nonfarmers

consumer

have

been

shopping for farm land, and in¬

Kalman &

Company, Inc.

vestors

equities that
up

Investment Securities

■

have

with

cently
the

inflation

have become

nimble

abroad

bidding

for

boys

Piper, Jaffray & Hopwood
Established

tide.

STOCKS—BONDS—GRAIN

Re¬

aware

that

who

even

COMMERCIAL PAPER

look

inflation

hedges are
moving some of their capital out
of the
Endicott

Building

SAINT PAUL

McKnight Building
MINNEAPOLIS

United States

to havens in

Members

New York

Europe, South America, and other
places.

Those

who

ready to
take a chance on "containing" in¬
flation
may
well ponder what
happens when a stampede dhce
gets started.

189 S

for

presumably will

the

been

Stock

Exchange

and

other principal

Exchanges

are

MINNEAPOLIS
BILLINGS

our¬

have
this

[Editor's Note: Text of

NORTH CAROLINA & FLORIDA

^an

inflation this time" point
out that there is a great deal more
stretch in the system that we have
now
built up with
the Federal

ex¬

permitted under the

now

MINNESOTA, NORTH & SOUTH DAKOTA

manage

pro¬

prac¬

Specializing In

again after

think

who

joined with
supported in princi¬
we

smash-up.

But

should have

the

flow

C. S. Ashmun Company

how desperately hard it

ex¬

and

they must have

the

ple, the legislation introduced by

information

by investors and which

proxy

curities
is

regarding

disclosure

tionary process—that is, the pinch
of higher

deal

great

held

the

these

importance,

are

from

for

benefits

readily

dissemination

wide

the

through

business, and results
jobs and buying power.

addi¬

published quotations,
industry must decide on a
more

infla¬

particular

Upper Midwest

thou¬

many

themselves

empt

lutely will act in

Distribution

their

publicity

broader

way and not in any other way. I
have already pointed out that in¬

and

one

held

quotations,

merely mechanical
process, and it is impossible to say
that 150-odd million people abso¬

Retail

sands

are

enter¬

aids

estab¬

ufacturers and merchant say they
must have another price raise be¬

places, without

might conceivably get; by with¬
a
grand smash. I am enough

matic

that

quotations, and feels qualified available, in booklet or other form
treat with this subject.
For for investors throughout the na¬

con¬

make

actually

economy

pansion

business

new

This

whole

becomes

inclined

another raise, whereupon the man¬

monetary unit on which the
fundamental security of the econ¬
omy rests.
am

of the vast interest ihat

aware

tion to

the

ings,

require attention.

the

putting the 82nd Congress in an
impossible position and the coun¬
try in real jeopardy. This is the
danger of a cracking of the finan¬
cial structure and impairment of

Now I

But

editors

ties

dividuals

deeply disturbed that there
to be so little real willing¬

sure

exists in over-the-counter securi¬

are

been

base, the scale of ex¬
penditures that we assume. I do

and

the-counter market and its work¬

ra¬

at its actual

b,y

investors, and a campaign to ac¬
quaint the public with the over-

them

Spending
I

out

held

are

net.

Cuts Needed

part owner

investments
and

dis¬

the af¬

When an-inves¬
he

and

lished

over-

not

closure of information by corpora¬

fident

of the newspapers to publish quo¬
tations on more of the active over-

swer:

in the

an owner

the-counter

business to

informed

further

years,

stantial progress in furthering our

Extensive

why

reason

tions whose securities

to contract liquid purchas¬

stretched.
cates

time

Now the Federal Re¬

serve

powers

showed

continue

credit controls at

when they would have
check

a new

theory and practice

unwilling

freeze
can

billion

As for credit
ent

not

but

founded.

was

organization

our

flexibly adapted to changing con¬

not believe we

Credit Controls

does

relationships

association since

business.

tor

prises.

ditions.

appears

that

controls

market

expert

erative role.

and

military sup¬
ply, this is one of the most—per¬
haps the most—manageable and
effective means of carrying out
the national economic policy.
It
has
the great merit
over
price

against

keep his Eco¬

inflation

prevent

shift from civilian to

the

Stabilization Agency down

nomic

are

Mr.

that

earned

gratitude of his fellow citizens if
he had been able to

of that

What New York

the

oppose

information

ST. PAUL
GREAT

FALLS

Financial Chronicle

The Commercial and

...

Thursday, December 14, 1950

(2360)

mentary rocks and to water power
which can be estimated from sur¬

competition among the

economy,

sedi¬

in the succession of

in layers

Continued from page

fuel-supplying industries and ag¬

devel¬

of other highly

those

civilizations, are based in
large part on our fortunate abun¬
dance of energy resources.
It is
oped

gressive marketing, the supply
petroleum and picture, and consumer preference.
important for our continuing pros¬
natural gas are mobile substances The relatively rapid shift from the
perity and national strength to
that move through minute open¬ use of fuel gas manufactured from
coal to natural gas is an example. know where and how our various
ings in the rocks and accumulate
fuels are being utilized.
In 1929, f.5 million tons of bitu¬
only
where geologic conditions
minous coal was converted to fuel
provide traps that prevent further
Joins Faroll Staff
government have indicated that migration. Various conditions cre¬ gas while 1.2 trillion cubic feet of
(Special to The Financial Chronicle)
domestic
petroleum
production ate such traps, and it is impossible natural gas was used; in 1947, only
0.9 million tons of coal (or 25%
probably will pass its peak and to predict either the number in
CHICAGO, 111.—Eustach Bregy
less coal (or 25% less coal) was
may begin to decline.
Moreover, the widespread, thick sequences of
is now associated with Faroll &
converted to gas, and 2.9 trillion
they anticipate that this decade sedimentary rocks or the total
Company, 209 South - La
Salle
cubic feet (or more than 250%
will witness the birth and initial amount of recoverable oil or gas
Street, members of the New York
development of a new basic indus¬ that they contain. Until accumu¬ more) of natural gas was con¬
face

liquid

data,

Synthetic Liquid Fuel

Coming Industry

—A

interfuel competition,
introducing new devices

the area of
cither by
for

utilization

increasing

knowledge of converting the vari¬
ous
fuels into forms usable in

present-day equipment. An ex¬
ample of the developing technol¬
ogy of the former type is the gasturbine locomotive burning pow¬

the reserve po¬
production rates,
but we can hardly assume that
such successes will continue year

tion."

with greatly im¬
proved exploration methods.

pose

sition relative to

after year, even

ginning of
decade

both

for

the

point I want to inter¬

word of caution with re¬

zene,
other

some

chemicals would be produced

satisfactory estimates of the total
available.
In contrast to the un¬

derground occurrence of solid coal

CHICAGO, i 111.

portion

goes

(Special to The Financial

BOSTON, -Mass.

Bache
He

To what

of fuel replac¬

what

just

staff of

the

21 Congress Street.

formerly with Hornblower

(Special to The Financial

with

First

Chronicle)

Mich.—Wirt Lee is

DETROIT,

1947, which happen to
in which a census
manufactures was taken.
We

600

Mutual Company,

Woodward Avenue.

years

propose

picture

accurate

(Special to The Financial

will

of the

industrial

has

become

affiliated

& Co., Penobscot

with Goodbody

Our country's

and

prowess

Jackson

Chronicle)

Mich. —Walter N.

DETROIT,

shifting pattern of fuel supply and
the
factors
that seem to bring
about these changes.

Co.

With Goodbody &

to follow this study with

others, so that eventually we
have

Irving

—

With First Mutual

1939, and
the

;

Chronicle)

Weeks.

happening to our fuel-consuming
habits.
We are now preparing a
statistical "run-down" for
1929,
be

joined

& Co.,

was

ing another in each class of use?
The Bureau of Mines has under¬
out

has

Wallens

each of these categories?

find

for¬

was

Joins Bache Co. Staff

ing commercial establishments and
homes. But how much is used in

merly with Cruttenden & Co.

facturing industries, and for heat¬

taken

with

Reed, Inc., 332 South

Waddell &

tually is consumed by transporta¬
tion facilities, by various manu¬

extent is one type

Emory

—

associated

now

utility Michigan Avenue.

and the remainder even¬

fuel gas;

Wilder

some

growth, Building.

ties.

and

mine;

plants; a small quantity goes to
petroleum
processing;
some
is
charged in coke ovens to make

accelerate

could

(Special to The Financial Chronicle)

is used right
is exported;
is made into briquets; an¬

other

phenol, toluene, and certain
chemicals

is mined?
leaves

never

some

mine tipple but
the

schedule for constructing the

the

know that

Join Waddell & Reed

happens to

example,

bituminous coal after it

requirements for ben¬

only coal and water may be meas¬
ured accurately enough to provide

significant decade—a

which

this

thoroughly explored.

been

What,

Co., Inc.

initial

the be¬

authorities

the petroleum industry

Reserves

Our Energy

Exchanges.

with

formerly

was

Schmidt &

of the various fuels have

uses

never

the

concerning

facts

full

The
end

Current shortages and

increasing

gard to comparisons of reserves.
Among our reserves of energy,

point of the 20th

As the midway

century, this year marks

chemicals.

Stock

sumed.

1946 has improved

Midwest

and

producing synthetic lations of oil or gas are discovered
liquid fuels, first from natural gas, b,y drilled wells, their existence
and potential production are un¬
then from oil shale and coal.
dered coal.
The synthetic fuels
known, and they cannot be classed
Eugene Ayres, director of the
illustrate the latter. The only sig¬
in Gulf Re¬ as recoverable reserves. The quan¬
nificant uses in which substitution chemistry division
tities of oil and gas that ultimately
is not now feasible are motor fuel search and Development Co., in
will be available from domestic
for motor transportation and air¬ an article entitled "The Fuel Prob¬
fields will unquestionably prove
lem," published in the December,
craft, including gasoline, kerosene,
to be far greater than the present
and certain distillates, metallurgi¬ 1949, issue of "Scientific Amer¬
proved reserves.
cal coals for the manufacture of ican," summarized the fuel prob¬
However,
barring unexpected
coke for blast furnaces, and natu¬ lem and indicated what we may
ral gas for the manufacture of expect in the near future, as fol¬ developments in atomic or solar
energy, the anticipated gap wid¬
carbon black and glass. In future, io v/s:
if technology progresses far
"The
synthesis of liquid .and ening between domestic demand
enough to overcome certain cost gaseous fuels is important because and supply will have to be met by
factors, and if this country is will¬ (1)
the world, particularly the synthetic liquid fuels and imports.
ing to bear the cost of lost energy United States, is committing itself It is obvious that the security of
in
making the transformations, irrevocably to a liquid and gas¬ our liquid-fuels position will be
these uses may become vulnerable eous fuel economy, and (2) pro¬ greatly enhanced when the supply
fuels,
to substitutes, directly or indirect¬ duction of petroleum and natural is based in part on solid
such as coal and oil shale, which
ly. For example, if liquid fuels are gas is sure, sooner or later, to de¬
derived synthetically from coal on cline. We expect to need more and compose more than 95% of our
an
.economic basis, coal could more, but we shall finally obtain proved fuel reserves.
The consensus of
The first synthetic gasoline to
compete with oil as a source of less and less.
automotive fuel.
experts in the petroleum industry, enter the market will come from
If we had boundless supplies of as summarized b,y a Congressional natural gas, since a commercial
all fuels, these facts would be un¬ Committee in 1947, is that petro¬ plant for converting natural gas
important. However, our reserves leum production in the United to liquid fuels already has been
cf petroleum are relatively lim¬ States will reach its peak between built. However, reserves of natu¬
ited.
In recent years there have 1955 and 1960, and that by 1967 ral gas, like petroleum, are lim¬
been annual additions to proved production will be no more than a ited. Synthetic fuel processes also
reserves, and a record number of billion barrels a year—about half can
play an important part in
explorations and discoveries since of our present rate of consump¬ meeting requirements for strategic
try engaged in

coal-hydrogenation plants,
vievv
of the fact that
these

such

■'#'■i

WESTERN

Several months ago the Bureau
of

IBA GROUP CHAIRMEN

from

quanti¬

plants ill important

undertook

Mines

study

OHIO

NORTHERN

PENNSYLVANIA

VALLEY

determine the effect of a synthetic
fuels

plant in relieving shortages
chemicals, particularly

certain

and

benzene

Eureka
Reno

important

Sacramento
Santa Rosa

sential

Stockton

benezene

San Jose

principal offices.

Fresno

New York

Monterey
las

A. T. & T.

other

many

For

es¬

example,

make

used

thetic rubber,

connecting

are

materials for the

products.

Oakland

Son Francisco

These

phenol.

raw

manufacture

syn¬

plastics, and nylon.

Coal-Hydrogenation

private wire,

Teletypes.

Vegas

Santa Barbara
Ventura

coal-hydrogenation plant
could be operated in such a man¬
ner
that the yields of benzene,
A

Glendale

toluene, and xylenes would be in¬
creased by about 25%, but this

An9«les

would

Pasadena

Los

Whittier

proportionate
of gasoline.

Many other products are obtain¬
able from coal, but there is no

Anaheim

long Beach

L. Wainwright

Campbell S. Johnston

JohnS. Clark
Fuhey, Clark <fc Co.,
Cleveland

Voight

Hemphill, Noyes, Graham,
Parsons & Co., Pittsburgh

W. E. Hutton & Co.,

Cincinnati

present demand for them because

laguna Beach
San

result

reduction in the yield

Beverly Hills

they have never been produced in

Diego

Many of these can be
by
minor process

quantity.
recovered

changes.
Shale oil

11
'

nificant

chemicals

cresols,

w'e',t
0te°

„«e

'7#*+
tost®5*

aromatic

number
as

If radiant

First California Company

can

SECURITIES

647 South Spring Street

SAN FRANCISCO

LOS ANGELES

Teletype S F 431

Teletype L A 533

material

Corporate >

Municipal and
• n■

• • * ■

;

«•

Securities

pro¬

source

retorting

and

can

feasible

equipment,

with

oc¬

also
of aromatics.

100

near

commercially
scale

benzene

by retorting pulverized oil

be used

INVESTMENT

completed in a fraction of a sec¬
ond.
The
product, a gasolinetane

Montgomery Street

stock

feed

Distributors

shale with radiant heat, a process

boiling-range

300

State,

xylenols — together
bases, present as homo-

and

tar

and

supply.

short

acids—phenol,

logues of pyridine and quinoline.
In a laboratory unit, the Bureau
has demonstrated
that a highly
duced

^t0

tar

Underwriters

aromatic

now

include

These

with

likewise contains sig¬

amounts

the

toluene

be proved

of fuel supply are

constantly affected by technologic
progress,

SAN

FRANCISCO

EXCHANGE

STOCK

LD S ANGELES

STOCK EXCHANGE

available

this process will
impressive.

The patterns

Co. *

MEMBERS

large-

yields

from oil shale by
be very

Kaiser S.

may

changes in the industrial

15DD

Russ

Building

•

San Franciscd

Teletype SF 172

Volume 172

Number 4968

Commercial

The

and

Financial Chronicle

(2361)

Continued from page 4

munism.

Let's Wash Up

Our
Bankrupt Foreign Policy

strength.

Italy

effective

and

police

her

hopelessly in¬
can
hardly
small
territory.

own

less

the

for

want

world

In the Middle East

liance

chief

our

must

will

friends.

even

Iran,

peoples

as a

re¬

achieve

for them

and

living.

The

will

save

nor

China

friendship

seemed

deep-seated

ing,

now

with
new

massed

have

vengeful

hatreds.

Indonesia,

Malay, Indo-China, are in revolt
heavy with discontent at the

Such

influences

.showing

other

indigenous and
her

desires.

spending

India

represent.

signs

influences

than

Korea

thousands

Reds

Assume

somewhere

stop

tionship to

the

belt

of that

the

Curtain
and

other

the

has

Rhine.

Iron

uable resources in

never

Divisions which total in the

many

know

Italian

and
to

are

If the

so,

backed by planes of high quality
and great quantity. Russia's navy

knows

includes

push

engage"these vast armies on
European or the Asian con¬

the

tinent is foolhardy, but that is the
direction towards which our pol¬

icy has been tending.

out

policy

has

tered

kept

over

is suicidal.

our

pick

others

from

our

armament

the globe.

battlefield

one

has

foul weather friends.

and

threatens

impossibly

sources

scat¬

It has picked
to

making such

weakened

may

that

can

the

pushed

Russians

Communism, where otherwise

Communism
within

might

itself

internal

have
bred
dissensions.

Our policy today is

morally
I

can

than
up

politically and
bankrupt policy.

see

alternative

having the

other

word is

The

billions

squandered
could

five years ago.

urged

that

appeasement.

just

mistakenly used.

exactly how and for
will fight? If it is wise

what you

interest

our

not

been

far

for appeasement.

would

defenses

Iceland

com¬

secur¬

would

with

our

have

purchased

our

with

reason

our

to believe that

their

coming

part

and

will

and

Aid Given in Korea:

route

and

training for service,
port
3

squadron

two

air

hospital ship, medical supplier

and 500 tons of sugar.

10,000 in
trans¬

planes

;

and

destroyers.

ETHIOPIA

Aid Received and Allocated:

$1 million.

GREECE
Aid Received and Allocated:

•

Aid Given in Korea:

$79 million during war, $1 bil¬
lion, 138 million since 1945.

$100,000 and offered 1,000 meifc

which have yet to be accepted.

800

ICELAND

arriving

men,

this
Aid Received and Allocated:

planes.

Aid

AUSTRALIA

million

since

during

1945

and

$17 million, chiefly in credits,
evenly divided in war and post¬

Aid Given in Korea:
125 tons cod liver oil.

war.

INDIA

Aid Given in Korea:

1,000

plus reinforcements,

men,
RAAF

squadron of 40 fighter
planes, 2 destroyers and 1 frigate,
medical supplies, food.

$163 million during
$45 million since.

was

troops,

field

ambulance

tiation.

during war and $57
1945, of which $40

This is

costly and staggering

Continued

page

Per¬

escape

are

bear
den

the

Korea,
the

United

forth¬

have

tropos

many

have

number

should

United

the

Nations
suffered

United

fered,

excluding

Koreans.
that

put
90

And

VESTMENT SECURITIES

the

all

have

the

advanced

Schwabacher & Co

together.

that

only

note

all

times

Nations

have

time^

field

casualties

other

Universally Contain

Nations.

nine

the
suf¬

South
600 MARKET

billions

these

AT MONTGOMERY

wil say, however, that tions as against the help they are
policy will not contain Com- giving us in Korea. A recent com¬

pilation sets
balance

a very

STREET

na¬

People

impressive

sheet.

SAN FRANCISCO 4

UNITED KINGDOM
Since

1858

SUTRO

Aid

CO.

during the

Aid

Industrial Brokers

—

MEMBERS

plus $2 billion in

war,

SAN

given in Korea:

6,000

ground

cruisers,

tenance

ship,

destroyers and

NEW YORK STOCK

FRANCISCO

CHICAGO

in Korea
aircraft car¬
aircraft main¬

troops

NEW

and Korean waters, 1

rier,

YORK

CURB

STOCK

BOARD

EXCHANGE

TRADE

EXCHANGE

(ASSOCIATE)

frigates.

MEMBERS
New

York Stock

San

New

York

Los Angeles Stock

Exchange
Curb Exchange
(Associate)

allocated:

1951.

Primary and Secondary Offerings

Underwriters

and

$5 billion, 861 million since the
war, and $30 billion, 387 million

Investment Dealers and Brokers
Distributors of

received

Francisco Stock

Exchange
Exchange

FRANCE
Aid

received

and

allocated:

SAN

407

FRANCISCO 4

LOS

MONTGOMERY STREET
NEW

YORK

VAN

246

BEVERLY
NORTH

BUILDING

SAN JOSE

BROADWAY

275

ANGELES

NUYS

SOUTH FIRST STREET

billion, 581 million during
war, $3 billion, 717 million since
war, plus $3 billion,
170 million,
military aid requested in 1951.
Aid

DRIVE

Direct Private Wires
CORRESPONDENT

HONOLULU, T. H.

given in Korea:

HILLS

CANON

Infantry battalion of 1,000 men,
patrol gun boat and medical

supplies.

OFFICES

MANILA,

Aid

received

$145
$1

YORK

OAKLAND

MONTEREY

NETHERLANDS
P.

NEW

and

million

allocated:

during

war

billion, 21 million since

and

war.

apd

Aid Given in Korea:

in grants.

war

unit, 400,000 jute bags under nego¬

Aid Received and Allocated:

$5 million

Received and Allocated:

Aid

SWEDEN

since

To this there

war.

Received and Allocated:

million

Firstly, we .cannot
substantially the whole bur¬

Aid Given in Korea:

answers.

Communism

this

fighting in Korea,

now

Finally, people will say this pol¬
icy is turning our back on the

insist upon it.
Cannot

men

million

are

United Nations.

cooperation

not

can,

have

$176 million since 1945.

350

frigates and

DENMARK

$6V2 million credit.

1,000

Aid Received and Allocated:

Aid Given in Korea:
.

unit,

Casualties and Relationship to UN

safety

neighbors

own.

combat

200 to 300 tons of dried peas.

the latter.

inevitably tied

today.
Today,
have avoided
coming perilous¬

credits listed.

CANADA

sonally, I should choose to

Had

today

money rather than added

After all, these are
whose security is

of 5,000

recall

can

ly close to another Dunkirk.

that one-hundredth of the
money
spent in Berlin could have built,
we

Munich

effec¬

that surround it.

seas

the

applaud

enterprises however, while
more

Aid Given in Korea:

Aid Received and Allocated:

make

ity, and this is appeasement, then

have

these

have

the

than

It is absurd to be¬

clear

tively used in this hemisphere and

this policy and start with the

fundamentals

yourself to the teeth and to make

mer¬

NEW ZEALAND

appeasement to withdraw from
unwise
commitments, to arm

out the

Some

men.

Aid Received and Allocated:

•

infantry combat force

•

mitments that endanger our

wash

courage

700

fighting

'•

men-and serums and vaccines.

policy, will, of course, be

criticized

can

choose

;

allocated:

de¬

soon

and

Not Appeasement
This

Isn't it better to get
and use the resources,

now

removed

methods of opposition it has solidi¬

French

splinter

out.

given in Korea:

week and 6

Euro¬

not contained Communism.

fied

Kremlin.

val¬

danger. We need defenses in this
gupply. It has
hemisphere, in Canada, in the
By our Caribbean and in Latin
America.

the

only too well the precious time
that
would
otherwise
be
sacri¬ bought by Chamberlain at Munich.
I applauded that purchase
ficed, at a point that counts?
then; I

That

made

moment

marines,

the Russians.

of the

we waste

But to
equipped and have the ca¬ afford them some help.
pacity to fight, can be thrown into pour arms and men into a Quixotic
battle
anywhere on that great military adventure makes no sense
What have we gained
land mass that stretches from the whatever.
Atlantic to the Pacific. They are by staying in Berlin?
Everyone

she too has the atomic bomb.

Aid

munism.
Tito in Yugoslavia is al¬
ready demonstrating this fact. Mad

well

powerful fleet of sub¬
and in all probability

the

govern,

Communists will

velop

nations wish to hold that line
demonstrate a determination

pean

seen.

hundreds and which

men

rela¬

the line

attempt?

type

the

forced

are

Why should

strength

world

the

manpower

massed

are

military

that

side

our own defense.

peninsula, are we to con¬
tinue fighting there indefinitely? line of the Elbe
On

that

The next step in pursuit of this in China is not likely to take his
policy is to apply the same prin¬ orders too long from Stalin, espe¬
ciple to Europe. Today it is idle cially when the only non-Asiatics
to talk of being able to hold the left upon Asiatic soil to fight are

the

across

considerations that have

are

American

lives to accomplish some unknown

objective.

people

organizations that
fight and not have them deter¬ will destroy the singleness that
mined by political and
ideological today characterizes Russian Com¬

that

means

will pick our own bat¬

tlegrounds

palatable to

ours,

policy

Pacific

succumbing

peoples that are under its yoke,
step in the pursuit of this the greater are the possibilities of
policy is to get out of Korea—in¬ revolt.
Moreover, it seems cer¬
deed, to get out of every point in tain that Communism
spread over
Asia which we do not
plan real¬ Europe will not rest content with
istically to hold in our defense. being governed by a handful of

and

chant ships.

million since 1945.

better way of

A first

armies

and

war
*

Aid Given in Korea:

$35 million during war and $259

government that will
a

received

Realism in Asia

endur¬

against

powerful

men,

with

and

$31
million
during
$193 million since 1945.
-

TURKEY
Aid

necessary
it becomes for those
who govern to
justify themselves
to those being governed. The

influence. In Asia,

our

whose

our pro¬

to wish to

seem

themselves.

save

NORWAY

tons of sugar.

Communistic.

hospital unit.

Aid Received and Allocated:

Infantry battalion of 1,000 men
yet to arrive, air transport and 400

doing so, it may break of
as a unified force.
Commun¬
ism still has to prove itself to its

ourselves to

those who do not

Pakistan,

Egypt, seek neither

tection

turn

1 field

Aid Given in Korea:

given in Korea:

itself

peace

source

ourselves

cannot sacrificb

have oil

short,

Aid

seas.

peace.

In
Oil But No Friends

but

make

It may be that Eu¬
rope for a decade or a generation

unwillingness of half But

world

our

and

the

cross

makes impossible effective
organ¬
ization to impose any such

buffer?

The

peace.

onslaught? Worse than this, where
there
is
any
determination
to
create such

instrumentality

Can

Communism
much too costly for her to
try to

hope¬

Where is there in all Europe any
buffer against a massed Russian

so?

Atlantic

lieve that the United Nations can
lead us out of this situation. The
veto power alone makes it a

Greece

Will

present policy Aid given in Korea:
possibly contain
630
infantry and 1 destroyer.
Communist Russia, if she chooses
to march,
by a far flung battle line
BELGIUM
in
the
middle of
Europe?
The Aid
received and allocated:
truth is that our
only real hope is
68 million
to keep Russia, if she
during war and $599
chooses to
march, on the other side of the million since 1945.
do

FRESNO

SACRAMENTG

SANTA

BARBARA

ROSA

The Commercial and Financial Chronicle...
90

from page 89

to save.

Our
Bankrupt Foreign Policy

extravaganza

UN No Peace Vehicle

present

recognize

must

on his
throne? We can do well to mind
our
business and interfere only
where
somebody
threatens our

vehicle to enforce peace.

If half of the world does not wish

it to operate in

this fashion, as is
and China, it is

Russia

true

idle to pretend

that

United

which

tional

issues.

Looking

United

Nations

admission

nation

role,
or

world will

tion
can

by the

The

because

for

have

and to

pay

what have we now in hand for the

that

billions

abroad?

two

this

absorb

one

way

heavily for our defense. But

pay

only agree to live next to each

other

to destroy the basis
enterprise than to

American

continue

submit to dicta¬

other half.

For

destroy the initiative of the men
who make it. We will, of course,

are

never

surer

presents

than

cannot turn. This

its

the other becomes too costly.

luxury;

not afford

dare
to

own

our

who

Those

spent

longer afford

consequences

curity.

have

can

They would, I

am sure,

American

conserve

American ends, not
the

for

lives

waste them in

freezing hills of Korea or on

the battle-scarred

plains of West¬

ix/it frfn

t>,.

the

temptation

recall

se¬

1932

Where
out

is closed

short position

term; where the short position is

delivering stock out
position held by over

closed out by
of

long

months, the resulting gain or

six

this

legislation

year's

stopping the practice, some speculators accomplished the convercinn

chApf-fpftTi

into

£*£41 Ti

b.y selling short
against the box before the long
gain

long-term

stock
the

held for six months.

was

At
month-period

six

of the

end

policy.

Such

avoidance

tax

portfolio

gains

and

easily

cal¬

between

in¬

the

switching
issues.

Elect New Officers
August Fischer, telephone order

clerk for Tucker, Anthony & Co.,
was

reelected

New

York

President

Curb

Exchange

the

Floor

Inc°me received and paid out by Clerks Association at the associainvestment companies (mutual tjon's annual elections held refunds) are aiccorded special treatment, m order to prevent double ce™y'
taxation of the income which
William Mirabella, Francis I.
Pusses through the fund. Funds duPont & Co., was elected to the
which establish themselves as a yice_presidency, with Howard
.

term'" ^ Sh°rt " * ^
Until

with

losses, but also in

•

Mutual Fund Provisions

tax

interfere

Curb Floor Clerks

tvf av

purchase in the market,
the resultant gain or loss is shortby

not only in the timing

occur

overall

far

avoid

permitting

investment

normal

overemphasis

But

investor

advice

considerations

may

help.
the

constructive

our

dividual

Sales

Short

and

culable

Germany.

ern

Observations.

chance economically to

I have argued the neces¬
sity for not burdening ourselves
with unnecessary debts. There is

any

valuable

By A. WILrKLD MAY

years,

wholly different
presented if we
look upon the United Nations as
a
type of governing body, with
governing powers. But half of this
issues

from

him

attack

and he

policy I suggest, moreover
us a

interest

Lama

keep our heads above water.

the
the

that

China

Red

gives

as
a
interna¬

air

Na¬

and

organization

untary

The

for vol¬

purpose

him,

business and our homes.

operate

can

The

fashion.

tions still has

forum

that it

crush

and you will

burdens

his

crease

behind

Dalai

the

keep

Nations is not at

United

that the

Indo-China or to
achieve Mr. Syngman Rhee's con¬ is our present posture. It strangles
cepts
of democracy in Korea?
Shall we now send the marines Continued
from page 5
into the mountains of Tibet to

wasted too much of our substance.

Secondly,

colonial policy in

which we have

some

suggestions

The

might.

our

give con¬
siderable pause to the strategists
and planners of the Kremlin. They
the world, has no arms to lift
deal with his own defense. In¬ would—and I count this most—

whose back is bowed
and whose hands are busy holding
An Atlas,

Let's Wash Up

make would unleash our strength.

trying

system which we are

very

Continued

Thursday, December 14,

(2362)

Schaal, Clark, Dodge * Co., betheir capital coming Treasurer. William Megains each year; in which event nagh, Laidlaw & Co., was elected
nient income and

°^Pcanny.^
SO uiStribUtG(l",~"tllG

SHlOUJlt

CilS""

Financial Secretary; Gerard An.

^ibut'°"s being taxable to the

glim, M. J. Heaney & Co., Re-

The fund pays a flat 25% tax .on

Corresponding Secretary

and

Secretary,

shareholder in the same way as cording
he. keld
securities directly, cooper,

James

Francis I. duPont & Co.,
Walter

attitude

realism

such

know

is, I submit, in accord with

can

our

historic

own

never

peoples'

seems

scrapes.

them and

traditions.

wanted

have

part

Today

know.
to

What

business

support

nations

the

run

weaken

foreign

danger

another 1932 and of

French

our

fails

system

lavish spending either on

have

just why, nobody quite

ours

dangers that

within, when

economic

function.

other

too easily the

arise from

with

foreign

wars,

precipitating

stock to close

long

delivered

thev

waiter

price

the

Gifts

Philanthropic

discussed

column

our

Dec.

The basis for capital gains or
loss taxation is usually the donor's

7).

Active Retail Outlets

the

without any tax on the
capital gain.
Adjusted gross in¬
come for the purpose of comput¬
curity,

BNAUtiT
ESTABLISHED

San Francisco 4
Bell

2-7484

System

the miscellaneous

much for

faaua\''uemZ'which'ma,y°be"of
*For fuller explanation cf. "investment

Arthur

Companies"

Governors,

one-year

elected

Petruzzi

Michael

Goetz

Wallace

Rothschild

Reynolds

Wiesenberger,

Nelson

and

Andrews,

'the

Weil,

Posner

Co.

qnd

;

Releh & C°' respectively. ,

N- Y-

IBA GROUP CHAIRMEN
EASTERN

SOUTHERN

SOUTHEASTERN

PENNSYLVANIA

capital gains irrespective of
the tax is computed on

ized

Teletype SF 272

For

association

limitation on your
gifts includes all real¬

charitable

Telephone EXbrook

S10n rig

15%

the

ing

1931

Governor.

of the se¬

value

market

fair

premium paid for the conver-

insti- ,950'
tutions, it is advantageous to make
the gift in stock on which a capi¬
tal gain
has accrued instead of
cash; as the amount of the gift is
In gifts to charitable

amortization

the

disallow

ited.

son'

cost.

Russ Building,

Palmer, L. A. Mathey & Co., is

price,

becoming more important in connection with estate planning (as

Stocks & Bonds

<-orresporiu ng aecieiaxy.

distributed.^

was

sale

short

the

destroying the

Utility

long-term capital gains which
not

then higher than
In the case of bonds selling at the new Sergeant-at-Arms, to be
in which a premium, the premium is amor- assistecj by George Layng, Shearevent they sold long stock in the tizable between the date of acHammill & Co
George Hoffopen market and bought, stock in quisition and the first call date.
B
.
the open market to close the short In the case of convertible bonds, man, Carl M. Loeb, Rhoades &
position. But this is now prohib- the Jaw has recently been changed Co., was elected as three-year
market

Gifts, of course, are constantly

Dealers in Industrial & Public

any
are

this

whether

basis.

alternative

the

c i r c u in¬
actually be
made on a gift—in cases of very
old people in high brackets with
Under

stances

exceptional
can

money

having big

low lost securities

HANNAFORD & TALBOT
A

made

of life

Corporation

with

trust

ap¬

the gift is

preciation, and where

reservation

income.

Dividends

Treatment
t
are

taxable only to the

paying corporation has
accumulated
earnings
at

extent the

Investment Securities

either

the

beginning of the year or earn¬

Gordon Crouter
De Haven &

Crouter &

W, Peyton

Townsend,

Ralph Owen

May

Investment Corporation

Bodine,

Equitable Securities

Corporation, Nashville

Norfolk, Norfolk, Va.

Philadelphia

ings during the year of payment.
If neither are

SAN

turn

FRANCISCO 4

ital

Bell System

Teletype

represents

After

cost.

the

been fully recovered
ner,

GArfield 1-8000

present, the dividend

is not taxable but

519 California Street

231 & 234

a re¬

cost

in this

has

man¬

dividends are taxable as cap¬
gains.
Pennroad,
Electric
Share, and United Cor¬

Bond and

poration

examples of compa¬

are

nies of this type.
Dividend

ELWORTHY & CO.

paid out of
earnings, are taxable irrespective
of amount.
Generally, however,
such arrears paid upon retirement
of preferred stock represent addi¬
tional proceeds entering into gain
loss

taxable

arrears,

calculations

rather

Mitclium, Tully & Co.

INVESTMENT

than

dividends.

Securities

may

SECURITIES
be

sold

imme¬

diately before "ex" date and re¬
purchased on "ex" date to avoid

Investment Securities

receipt

Where,

dividends.

taxable

however, stock has been

held for less than six months and
the

SUTTER

holder

has

STREET, SAN FRANCISCO 4

not

desire

Garfield

111

capital gain.

1-4460

Sacramento

Oakland

San.

Jose

stock

profit, he may

dividend

act

short-term

405

Montgomery

SAN

not be taxable.
ure

take

may

The safest proced¬

according to infor¬

mation from the company.

Street

FRANCISCO

650

South

LOS

Spring Street

ANGELES

Volume

172

Number 4968

The Commercial and Financial Chronicle

(2363)
Y

■

Continued jrom page 15
'

tifying
'

Securities

Commission

reports

the

ratio

The merit of the ratio is that it

titave

qualitative and

measure

earnings

The

net

ing

the

ratio

average

net

worth

manufacturing

over

quan-

cent of sales and

as a per

turnover.

profit

resulting from the
two
factors,
i.e.,

movement

four

lead¬

corporations
period 1946

year

through 1949, as reported by the
National City Bank, was 15.5%.
Of greater significance than the
is the wide deviation be¬

average

tween industries; in the four
year
period this variation ranged from

low

2.2%

for

each

aircraft

Recently, businessmen have
pressed grave doubts
of

fair return.

test

re¬

measure

The ratio fails

time

over

ance

credit

based

taken

consideration

and

be¬

"The

into

Commercial

Financial

and

comparability of Chronicle,"1 made use of three
the two parts of the ratio in a measures, one of which compared
period of changing price level. net income to gross fixed assets
inventory and receivables.
Among
the
important
factors plus
lack

overlooked

are

the nature and

ex¬

tent of risk assumed and the effi¬

1948

11.5%

1949

sales

for

The high profits be¬
con¬

profits. In 1948 the reports of 335

This

safer investment.

constantly

evidenced

The

duPont

deNemours

Company calculates return

in¬

capital
clearer

structure
portrayal

and

provides

the

profit¬
employed, it

of
assets
the wide difference in yields pre¬ ableness
vailing on the stock market. It is fails to correct the defects previ¬
equally true that one who effi¬ ously mentioned.
ciently employs his capital is en¬
The Ratio of Profits to Sales
titled to a higher rate of return

1947, indicated that

the

dollar.

This

change in the

First,

annual

profits

are

for

management

and

10 reported

The

losses.2

doned,

based

was

agement

realize

man¬

maximal

2 American

Management

Association,

Financial Management Series No. 94.

the desire

profits

For

sell

An intelligently administered re¬
negotiation law directed solely to
the control of war profits will be

less

necessarily placed
on
the
business judgment of the renego¬
tiation staffs and boards, and con¬

destructive

centive
all

of the profit in¬
a
general ceiling on
The problem remains

than

profits.

(Special to The Financial Chronicle)

STUART,

two

manufacturers

April

Neb.

—

Bernard

the other manufactures
assembles

well

the

parts.
On a
market the selling

1949.

Reed, Inc., of Kansas City.

petitive

com¬

would

J.Bartii

identical

from

sales

went

ESTABLISHED

Motors's

included

costs

profits

its

(Associate)

Underwriters and Distributors of Corporate

re¬

and Municipal Securities

Stock Brokers

some

12,000

over

SAN FRANCISCO: 482 California Street

The extent of integra¬

varies

Telephone DOuglas 2-6400

Teletype SF 138

LOS ANGELES: 210 W. 7th Street
fundamental

the

San Francisco Stock Exchange

New York Curb Exchange

pliers
for
materials,
supplies,
services, etc.; this means that Gen¬
the

Co.

&
1883

Members

New York Stock Exchange

sup¬

riation.

margin

use

NEW YORK: 14 Wall Street

Telephone MAdison 6-4681

Telephone Dlgby 9-3780

objection
sales as

sole test of reasonableness is that

•

ignores

functions

United States Government

profit
in

important
The hope of
efficiency which
price
reduction

makes

The

lead to

the

profit.

encourages

turn

may

one

posisble.

Securities

PRIVATE

WIRE

CONNECTIONS

BETWEEN

ALL OFFICES

lowering of price
increase in aggre¬

gate profit accompanied either by

State and
•

lower

Municipal Bonds

sales.

MIS"

C' I

a
higher margin on
simplicity consider two

For

unrealistic examples. First, assume
that all costs are variable with

production, amount to 50% of sell¬
ing pride, and that a 25% reduc¬
tion
of sales price would result
in the sale of three times

«|3rfrf8aS5iB»IS

many

units—the percentage of profit to
would decline one-third but

sales
the

dollar

50%.

profit

Next,

ditions

assume

except

increase

would

that

the
all

A. G. Becker & Co.
INCORPORATED
t

i*'

Established

Underwriters
and

and

18 9 3

Distributors

Municipal Securities

Corporate

Commercial Paper

same con¬

costs

465 CALIFORNIA

are

STREET, SAN FRANCISCO 4

fixed—both

'.y, /\./
:

n*.

tfje dollar profit and
the sales margin would increase.
In
the first case, the
increased
profit is due to increased volume;

Department

the

due

reduced

volume.

fixed

iBttttk of JVmmrrt
NATIONAL

SAVINOS

ASSOCIATION

costs

greatly
as

come

California

1949

3 National

1950.

unit

costs

The

total

CHICAGO

ratio

NEW YORK

costs

and
A ffiliated

varies

sensitive

A PARTNERSHIP

volume

in its
explains the
sales margin from

MEMEER

Motors,

NEW

report,
its

with

A. G. Becker & Co.

enterprises, and
profits be¬

increases

General

annual

increase

May

between
ratio

the

change.
San Francisco

GArfield 1-7891

second, the profit increase

increased

Bond Investment

Engler is associated with Waddell

greatly between and
within industries, and
the sales
margin normally reflects the va¬

defending.

identical product; one
buys all parts and assembles them,

tion

are

maximal

not

example,

may

suppliers.

centages.

WMX

must be taken lest

what

of meeting the cost of the en¬
per¬ tractors were given every oppor¬
The ratio of profits to tunity to present all relevant facts. larged defense requirements. All
income, including profits, must be
sales is a qualitative measure of In
general, the profit permitted
taxed at higher rates to meet this
sales but fails as a measure of on war work was
based on an al¬
need; however, high profits must
profit in that it ignores turnover. lowance for capital
employed, a be
thought of as a source of addi¬
It is generally recognized that un¬ reward for
management applied
der conditions of free
competition, to materials, and a reward for tional taxes rather than as the
concerns
with a relatively high
management
applied
to
value reason for them.
turnover, such as meat packers, added
by the contractor.
The in¬
may operate profitably on a rela¬
terest rate on capital employed
Joins Waddell & Reed
tively low sales margin. Further,
dollar

eral

care

destroy

was

primary objective of

ceived

war profits
interference with the
incentive as possible. Re¬

automobiles, source of capital, extent and na¬
and buses realized, as a ture of risks, contribution to the
group 8.4%
on
sales in 1949; a war effort, and character of the
majority, however, operated on a business. In the application of the
margin lower than the average statutory factors
great
reliance

of the amount General Motors

icle," Oct. 19, 1950.

yardstick effects the ratio in two
ways.

reward

approach

manufacturers of

price
but,
other
things being equal, the fully inte¬
than obtained by the less efficient
Lately,
business
groups
have grated manufacturer could rea¬
—otherwise, there would be no tended to place considerable re¬
sonably expect a higher profit
incentive to reduce costs. Further, liance on
the ratio of profits to
margin than could the assembler.
the current comparison of dollar
sales. M. E. Coyle, Executive ViceThe costs of the final seller in¬
profits with dollar net worth is President General
Motors, in tes- clude the profits of subcontractors
misleading because of the change,
and suppliers.
In 1949 over 50%
1 The "Commercial & Financial Chron¬
over a period of time, in the value
of

varied

difficulties of

manufacturing corporations show¬ to eliminate excessive
ing reduced sales as compared to with as little

attained.

acquisition and economies in use;

the

was

who risks

expected from

management

11.5

was

—

the sales margin is defective as a was determined after considera¬
Obviously, one vestment on the gross value of
measure of reasonableness because tion
of risks assumed; the reward
capital in a speculative plant and working capital.2 While
it ignores such factors as the de¬
undertaking can reasonably hope enlarging the base compensates
4 National
City Bank's Monthly Letter,
gree of integration and efficiency.
for a return greater than could be for differences in the form of the

ciency

material

with factors such

trucks,

net

worth plus 50% of borrowed capi¬
tal.
Admiral Ben Moreell, Presi¬

dent, Jones & Laughlin Steel Cor¬
poration, in a recent article in

subject to tax by the allow-'

not

cause

manner.

are

because

this

dollars of

determinates

reasonableness

9.4%

14% decline profit
longer period of for 1949 was greater than for
1948, in sales resulted in a 47% decline negotiation
a
reports and the sum¬
substantially it was far below the 1,1%
average in profit.4
maries
thereof included
various
higher value than current dollars. return received in
peacetime years
ratios, such as return on net worth
Second, the profit portion of the prior to 1941 when the rate of
Direct Renegotiation as Warand
ratio
reflects
margin on sales, but these
a
residue
deter¬
Profit Control
operations were at the approxi¬
ratios were resultants rather than
mined, in part, by expenses such mate level
prevailing in 1949."
Numerous other measures have
determinates of the
as
conclusions
depreciation based on historic The margin on sales of
leading been suggested but a sufficient reached. The
costs rather than current values.
profit allowed, like
manufacturing
corporations
i n number have been examined to
wages and other income, was then
The net effect is that overstated
1949, as reported by the National show the difficulty of attempting
subject to prevailing taxes.
profits are compared to under¬ City Bank, was 6.8% as
compared to determine reasonableness by a
stated net worth. As a sole meas¬ to
Unfortunately
we
are
7.5% in 1948. The variation be¬ simple formula.
again
Recognizing this
ure of a fair return for tax
faced with the necessity of divert¬
pur¬ tween industries was
great, rang¬ difficulty, the Renegotiation Act
poses the ratio of profits to net ing from a low of 0.5% for meat of
1943 provided that numerous ing a substantial part of our pro¬
worth inevitably favors the over¬
packing to 15.8% for the cement factors should be considered, in¬ ductive effort to defense needs.
While profiteering from the na¬
capitalized company and is an in¬ industry.
Here,
too,
deviation cluding: efficiency, reasonableness
tional emergency cannot be con¬
vitation to extravagance.
within industries was wide.
Thus, of costs and profits, amount and

acquired

important

dollar

annual report of
in approximately current the United
States Steel Corpora¬
dollars while net worth is, in part, tion
includes the following state¬
determined by the cost of assets ment:
"Although return on sales

ex-* cess

to the

as
as

mar¬

largely due to the many-fold ex¬ applied to added value
was based
cents in the 1936-41 period.
For pansion in sales.
Conversely, a on factors such as the extent of
the
12
months
ended
Sept. 30, decline in volume results in a pro¬
integration, complexity of opera¬
1948, this return averaged 8.75 portionately larger decline in
tions, and efficiency. The whole
cents." The 1948

high of 27.4% for the distilling in¬
Several methods have been sug¬
dustry.
Such
wide
divergence, gested that use a base broader
under competitive conditions, evi¬ than net worth. For
example, the
dences the existence of important excess profits tax
imposed during
profit determinates other than the World War II provided for
onej
magnitude of net worths
measure that" determined the ex--

liability of the ratio

Subcommittee

Exchange shown

quarterly.
is both

the

gin of profit—the return, includ¬ fore
renegotiation, of many
ing income from investments, on cerns during World War II

Of Manufacturing Profits
and

before

Profits in 1948 said: "Our

•

Measures of Reasonableness
mission

•

City Bank's Monthly Letter,

NEW

YORK CURB

YORK

EXCHANGE

STOCK
•

EXCHANGE

MIDWEST STOCK

EXCHANGE

The Commercial and Financial Chronicle

(2364)

Continued jrom page

We estimate that all defense

$46 billion in 1952, dropping back
to

The Electric Power Outlook
in

sold

and

terms

vided the facilities and it has pro¬

the

duced

Shortage

Fear of Power

enough

billion in 1953.
We
assuming full employment,

bu¬
those

Certain of our government
been

have

reaus

among

crank up our
and bring it to
speed, we are going to have a seri¬
ous power shortage unless some¬
thing drastic is done to prevent it.

claiming that
defense

as we

program

for the private utili¬

Spokesmen

needs with

today

sion through

enough

to meet anticipated needs
equipment—now on order
the electric utility
industry is built and installed as
the

and planned by

scheduled,
partial

despite

economy.

war

We have fac¬

1953.

plans and commit¬
ments for war production that are
known, plus a heavy production of
civilian goods.
We are assuming
some
lengthening of the work

power

expan¬

tored in all the

safe reserve margin.

will continue to be

There

continuing industrial

and

present

meet

power

capacity operation of all industry,

equip¬

There

needed.

ment

supply

power

1949

from
about

about $41

are

produced

increase

expenditures will
the $12 billion of

kilowatt-hours.

week.

estimating

power

re¬

wartime level of industrial activ¬

In govern¬ be, in our judgment, no power ity.
parlance, that "something shortage unless one or more of
drastic" usually means more pub¬ the following things happens:
lic power projects.
You might
On
(1) If major
war
production
rightly conclude that the gentle¬
both sides of this question

parties.

Perhaps
the electrical manufacturer is also
interested

party, but with this

interested

difference—he

the

less of who operates

them, and he

interested

therefore

in getting the facts.

primarily

If his facts

and his surveys and his estimates

he is likely to go out
of business.
It is the judgment of
are

wrong,

the manufacturer that I

therefore.

you,

you

the conclusions first, and then

aluminum plants

(2)

can't be

(3)

Incidentally,

available

not

are

believe

has

industry
job

done

forecasting,

preparing

country's
The

electric

the

take

power

the

care

requirements.

electrical

manufacturing in¬

has

forecast

dustry

also

and

planned very carefully; it has

pro¬

Expenditures of $46

Billion

excellent
What is

planning and

ing?
we

our

First

off,

1952

let

say

production

our

budgeting

are

planning

based

normal one-shift day.
can

many

For three shifts the

hours.

Much of

for

put to work

the dimen¬

are

the

delivers

generating

been

that

the

suppliers

power

capacity they have planned for the
last half of that year, the nation

and

will

these fig-

have

the
I

margin

capacity

generating

estimated

think

load

will

you

important:

industry has also done a fine job
providing needed capacity, and

demand
increase in proportion to
of

going into

defense production.

A substantial

part of the added defense demand
comes

result

about
of

and

power

these,

automatically

the

diversion

materials;

cause

bottlenecks.
There
to

thing

often

there

tations
in

peace

planning

really

are

—

that

absolute limi¬

ability to produce
the limitations

our

to be

seems

overlooked

war;

relative ones—the relation of

are

manpower

and

materials

fa¬

and

cilities and electric power to each
other.

.
'

i..

New Equipment at Hand

So far

have talked about the

dimensions
and

the

power

ability

companies

demand

the

electric

it.

meet

figures from

some

the

turing point of view.
try will
in

the

1952,

Here

are

manufac¬

Our indus¬

ship to these companies

three

1950

through

orders

already

years

based

scheduled, 21,300,000 kilowatts of
electric generating

equipment. In

1953

is not time

discuss

remember—and it

government

man¬

either

likely

to improving that
important thing

way

I think the

the

power

the

job.

the

enough here

relation

power

they will need another 7,000,-

000

kilowatts,

will

supply

and

the

that.

industry
fact

our

to the production of aluminum or

manufacturing

steel.

what greater—it will be 11,000,000

Aluminum, which requires

about

million

kilowatts

stalled capacity to produce

pounds,

still

not

in¬

bil¬

kilowatts

capacity

1952,

for

some¬

example,

and General Electric alone will be
able to

supply 5,200,000 kilowatts.

judgment going to be any threat Our capacity for large steam tur-

IBA GROUP CHAIRMEN

are

permitted to install the additional

all

theoretical

its

Also, total

amount

lion

power

our
present or potential power
production resources. .The steel

tion standpoint, a third shift never

scheduled by the electrical manu¬
facturing industry through the
first half of 1953, and assuming

this, in the Gen¬

eral Electric Company, because
of

These

equipment that has already

basis for this think¬

must believe

ating equipment available to meet
the peak demand, even if it lasts
but minutes or hours, this capacity
is not needed for a large part of

comparable

made upon us.

With
Defense

sions of the demand that should be

the overall defense program.

utility

the

pendently.

back and pick up the reasons:

here

Edison Electric Institute,
although we arrived at them inde¬
by

vital part of

outlined

basis, these figures are within 1%
of the figures recently published

If the materials necessary to

made

basis

the

peak load, or the
largest demand that will ever be
made for electricity at a given
time, to be 77,400,000 kilowatts in
1953, or 37% higher than in 1949.

order;

producing this equipment

the electric

noting that although

does not

We estimate the

the present manufactur¬

Expected

power

ing facilities for utility power
supply equipment are diverted to
other purposes, thus delaying pro¬
duction
schedules of equipment

already

worth

industry must have enough gener¬

quota.

load, or total demand, of
416,000,000,000
kilowatt - hours.
This is 43% higher than in 1949.

bomb projects, are
located in sections of

country where power
made available to them.

connection

this

Thursday, December 14, 1950

emergency.

actually
Increased Power Load

find there is indicated for 1953

new

the

offer¬

Here is that
considered judgment; let me give
ing

special

heedlessly

machines, regard¬

has to make the

fellow who

projects, such

would

we are here consider¬
capacity is theoretically tripled,
ing what practically amounts to a although from a practical produc¬

ties say this isn't so.

men

quirements

shift to a
There will

ment

tire

for

3,000,000-man fighting force.
appear, therefore, that
manpower—not electric power—
would be the bottleneck in such

ures.

.,.

CENTRAL

STATES

Charles R.

Perrigo

MICHIGAN

MINNESOTA

reserve

20%
above
peak in 1953.
this fact
wipe out
would

find
to

order

this margin of reserve, we

have to
trical
DEALERS

DISTRIBUTORS

BROKERS

see

through 1953 almost
(actually 95% more) the

double

increase

87,000,000,000
kilo¬
have estimated for

watt-hours
this

growth of the elec¬

load

1950-53

period.

Incidentally,

CROWELL, WEEDON & CO.
*

Established

capacity,

1932

out.

but

have

call

ways

Teletype LA 38

for

that

too,

can

for

BEACH

STOCK

25%

not

tain

added

take

devote

all

mated

1952

horse

capacity,

rest

margin to
This

invoke

trial

to
and
esti¬

week.

the

last

war,

still need 4,300,000 (or

SPRING

people.

year.

And if

are

tion

and

Los
Beverly Hills

Long Beach

•

San Diego

according

30%)

half-million

already in

almost

full

since 1927

Wagenseller

situa¬

employment,

the

figures

Arcadia

•

North Hollywood

tion planned for the end of
f

Simultaneously,,

are

SO.

will achieve peak defense produc¬

1951.

driving

Inc. 8

Investment Securities
SPRING
LOS
Members

adding less than another 3,000,000
•

SYcamore 3-4196

would

last week's "United States News,"

Angeles 13, California

ion

224

Serving Southern California

626

TRinity 4191

•

Security B!dg.

week, the
we

The labor force is grow¬

ing approximately
a

STREET

623

EXCHANGE

manufacturing

peak

TELETYPE

Pasadena:

STOCK

ANGELES

require 5,700,-

they work 45 hours

Teletype LA 456

LOS

SPRING—LOS ANGELES—'trinity

would

working 42 hours

Angeles Stock Exchange

SOUTH

indus¬

case

would

the

employees than today's high level,

FEWEL & CO.

MEMBER

G;il

you

0G0 (or 38%) more

California Coverage

Bingham,Walter s Hurry

increasing

cart,

SECURITIES

re¬

using

the

production

level which

the

INVESTMENT

sup¬

electric

follow me, but in that

Bell

avail¬
we

breakdowns,

the

production.

INVESTMENT SERVICE

that

power

manpower

generating
care

levels

there

assume

reserve

the

beyond

electric

Let

utility

453

DISTRIBUTORS

in
o

here—would

the

port

Los

Minneapolis

rain¬

were

margin

reserve

expanded

forecast

EXCHANGE

able?

Member

Chicago,

al¬

Suppose war production should

sufficient

Southern

Kalvian & Company, Inc.,

Detroit

1953 instead of 20%.

PASADENA

ANGELES

Donald E. McFarland

Braun, Bosworth & Co.,

two

LAGUNA BEACH

LOS

artificial

our

William M. Adams

Hornblower & Weeks,

regions that are
would realize our objec¬

one

low,

be
MEMBERS

Seriously, if it

tive

SAN DIEGO

wipe it
people think
not

answer

makers.
LOS ANGELES 14, CALIF.

LONG

would

Schenectady,

Telephone TRinity 0281

based

are

Of course, some

650 SO. SPRING ST.

estimates

our

requirements

power

median hydro conditions—drought
would cut the margin of reserve

TRinity 5761
14

of Los Angeles Stock Exchange

TELETYPES:

CLAREMONT

ST.

ANGELES

PASADENA

AND

REDLANDS

SANTA

MONICA

Volume

172

Number 4968

The Commercial and Financial

bines

alone has gone
up 60% in
the last 10
years, thanks to a new

"Wilson's

Folly."

industry produced

before the war, and twice
we

as much

produced before the

give

just

you

one

figure,

because it leads into a
statement I made in the
begin¬

ning. In World War II
Electric alone produced
of

ship

propulsion
to

45% of the total installed
capacity
of

companies at the
beginning of this year. You will
recall
that, in forecasting that

there would be no power
shortage,
I stressed the fact that one
condi¬
tion would be that present facili¬
ties for

building generating

special
To

This is

uses.

make

an extra job.
equipment requires

this

different kind

other

plant, and it

must

be planned well in advance
specific demands for produc¬

tion.

If it is not built in
advance,
it will be ready too late and will
cost

tain the

For

more.

example,

to ob¬
production facilities

same

ing

facilities

scheduled

presented such

the

It is my

plan

Navy and Mari¬
/

light

some

this

tremendously important subject of
electric power, and its role in the

unfolding
picture
of
American
productivity and American secu¬
rity.
It is especially important
that

you people here understand
share my convictions in this.

and

have

tried

give

you

some

reasons, in these facts and figures,
putting your confidence in the

for

ability and vision of
ican
of

great Amer¬

industry. By the very nature
business, electrical manu¬

our

facturers

and

electric

have always had to

the

drive

46.0

25.0

41.0

Estimated

Industrial

" /

Production

writer

19520

Hearst

1953:

peak load
'

;

for

1953:

News

kw.-hrs.

(43%

reserve

million

37%

higher

generating capability

11)40

I!)43

Light &

59.6

1953 peak:

20%.

Rural Sales

;

+26%

United Nations action has
delayed
the timing of the

50.2

62.8

+25%

Supreme Com¬

+26%

/
31.6

+25%

74.7

101.5

+48%

prompt

+23%>

329.0

416.0

+27%

Arthur

industrial production from 1950-53 is
with 92% from 1940-43, while the growth in
sales relative to production is expected to be
substantially
greater than in World War II.

compared

power

the

industry is turning out all kinds of generating equipment
per year

waiting for

commander

in 1950, of which 6,074,000

kw. is for private utilities.

military
the

1,200,000 for steam machines under

with

his

Security

days
cross

forces

the

the 'Far

weeks,
as

would

military

boom

into

vast

arma¬

effort.

Up to now, the flow
of
actual
job creating military
orders to industry has been
only
a
trickle. There is some hazard
that peacetime trades will be cut
back before the factories are
pre¬

interim
and

the slack
and

unemployment

materials

Armament

orders

with
some

men

indicated.

the

works

should be substantial by the mid¬
dle

1951.

"After

East

were

three

Council

the

outlook

level

with

transitional
in

1951

activity

and

industry

period,

for

high

employment,

stimulated

(Source:

LARGE

E. E. I.

forced draft of colossal armament

the

spending and by the

passed

continuing

pressure

inflation."

Survey of Manufacturers.)

STEAM TURBINES

SCHEDULED

FOR

SHIPMENT

^10,000 kw. and up)
For Export &

Year

Tor U. S.Uilities

ments

steam

turbines

Total

373,500

4,939,500 kw.
6,686,000 kw.

This information

Industrial

4,913,500 kw.

1,265,500

272,500

Underwriters & Distributors

5,287,000
6,205,000

6,958,500

hydroelectric
under

equipment,

10,000

kw.

plus

plus scheduled ship¬
estimated shipments of

internal

and

combustion

°f

(from E. E. I. Survey)

■

Investment Securities

gene¬

J M

rators, indicates that total shipments of generating equipment to
utilities in 1950-52 will be

follows:

195G__

■

1951

6,270,000 kilowatts
6,500,000 kilowatts

,19?2

8,480,000 kilowatts

Complete Southern California Coverage

21,300,000 kilowatts

Lester & Co.
Mem bet Los Angeles Slock Lxcliunge

productivity for the United States.
We always have been—we were

621

SOUTH

SPRING

ST.

bell system teletype

today.

LOS

ANGELES

14, CALIF.

telephone madison 2121

We intend to stay ahead.

This

concludes

electric

should
tion,

extend

with

patience.

your ■'

Several

hollywood

TASADKNA

lonc beach

pomona

riverside

SANTA ANA

balboa

santa monica

invita¬

thanks

UNDERWRITERS

closing

and

for

months

there

ago

was quite a parade of
people to Washington, at

business

the

along

story

but

power,

invitation of the

mittee.

You

will

asked

were

questions

that

UNDERWRITERS AND DISTRIBUTORS OF

searching

very

about

DISTRIBUTORS

Celier Com¬

recall

some

respective

our

businesses,

our past behavior, and
plans for the future—both on

our

Corporation and Municipal Securities

CALIFORNIA

the material and moral levels. My
associates and 1 responded to the

best of
and

returned

proud.

home.
with

which

Power

new

call

America

kind

Comprehensive investor

rather

are

SOUTHERN

the

"More

Special,"

de¬

leaders the newest electrical
prod-

eration

trial
and

techniques for
and

HILL
Los

indus¬

tour

of
v

150
*»

cities
•

CO.

San Francisco

Spring St.

Pacific Company

1 Montgomery St.

San Dieco

—

Oakland

San Jose

—

Angeles
—

■

San Francisco

Long Beach

Wiiittier

—

across
V

■

country.

Pasadena

Member Los Angeles Stock
4?

623 South Hope Street, Los Angeles 17

La Jolla

Telephone:
Glendale

Exchange

Pomona
iS

•

Mi.

6611

Bell System Teletype:

Hollywood

■

Redlands

Santa Monica
C

Pasadena

Long Beach

Riverside

the
W

CALIFORNIA

Members Los Angeles Stock Exchange

improvement.

This train is already mid-way
its

Angeles

Private Wire Los

transportation,

community

RICHARDS

621 South

power gen¬

distribution,

production,

coverage

CALIFORNIA

streamlined

signed to show industry and civic

uts and

Trading Department

have

another

Unlisted

vision

our

Now

which

answer,

train

ability and

our

went

the

10,000 kw.

greater

we are

Mac-

UN, failed to act. On Nov.
UN

the

country," he said, "faces
gigantic task of converting a

civilian

production,

light to

For

and

take

Chinese Community

units.

Orient

pared to

debating society, known

be out ahead

in the last war—and

the

military

Nov. 6 the General

economic

for

General

green

ago

contact

that

Rukeyser forecast that the

the

the 38th parallel.
Latterly as long

that

apparent

called

delayed for
a

now

Where

field.

strategy

decisions.
was

reported

GENERATING EQUIPMENT

6,855.900 kilowatts

CAPACITY FOR MANUFACTURE OF

rate of

mander

exigencies

was

resolutions.

pass

crisis

ment

175.0

221.0

increase

clared, "the labeling of the U. S.
military campaign in Korea as a

25.3

Estimated

Club,

Increase

145.0

Total Generation.

University

"Up to now," Mr. Rukeyser, de¬

dayu

alderman

"The
the

aus¬

1053

...

.28.2
■■

Lancaster, Pa., under the

139.0

+79%

;•

22.4

Domestic and

Merryle S. Rukeyser

Dec. 4.

1050

back

mobilization in the United States.

States

pices of the

raging

hold

speed

address

in
over

• Increase

106.7

Power-Sales—..

Mr.
new

(In Billions of Kilowatt-hours)
-

tion of the
in

disposed to exploit to
his advantage any self deception
or false labeling on our
part."

posi-

United
kw.

would

board

enemy

Service,

overall

Power Load Growth

The

for

summed

the

"It

Infer national

225

bizarre

seem

the face

chief

ready to

economic

columnist

the

until

the current

416 -billion

77.4

fire,

his smoke eaters for hours

and

papers

Load, Peak, Reserve
for

catastrophe. It would

news¬

230
„

load

"The situation is not unlike a
fire department with
only limited
freedom to act in the event of a
indeed

for

197

power

by the Soviet Union.

editorial

220

Sales

thinking, and increased
appreciation of the factors lifting

Rukeyser,

21.0

176

Small

wishful

utilities

achieve

17.5

hydro-electric machines and

hope that I have been

shed

33.0

resolution against the Communists
withdraw but this was vetoed

rejection of

Needed, Rukeyser Declares

productivity.
Thus, Mer¬
ryle
Stanley

meet

time Commission.

able

4.5

Capacity for 1952 is 11,000,000 kw. (5,200,000 kw. is GE) with
3,316,000 kw. now scheduled. Open capacity is 400,000 kw. for

panies. General Electric is pre¬
pared to establish these facilities
last week

Material

(Hard Goods)

com¬

demands of the electric

•—in fact

Combat

14.2

Index

Power

square

the

Defense

realism,

Large Light &

17%,

A New Realism

U. S. survival and
progress call
for a new

Expenditures

Estimated

2J/2-year period instead of a
4-ycar period a plant of 2,300,000

facilities for it, not to divert exist¬

Total

Estimated

feet would be needed, in¬
stead of one of 750,000 square feet.
The only way to meet such a de¬
mand is to provide entirely new

THE

(G-E Estimates, in Billions of Dollars)

than 1949).;

be di¬
verted to other purposes. The
pro¬
gram
I have outlined does not

units,

higher than 1949).

ment for utilities must not

for portable
power

Anticipated Defense Expenditures

Estimated

equip¬

provide generating equipment for
the Navy and Merchant
Marine,

SOME

SUPPORT MR. WILSON'S
STATEMENT

1953.

electric

our

DETAIL

WHICH

Year

28,000,000

horsepower

GREATER

(Federal Reserve Board Index
1935-39=100)

General

equipment, wnich is equivalent

1953__

war.

Let

GIVEN

Year

can produce more
electric generating
equipment

ARE

195420

Today

General Electric
than the entire

(2365)

FACTS AND FIGURES

$30,000,000 turbine plant, covering
20 acres of land at
Schenectady,
completed in 1949, and which I
thought for a time might be
dubbed

19520

BELOW

Chronicle

olt

The Commercial and Financial Chronicle...

(2366)

from page 5

Investors Must

War II

World

Businesses

were

rationalized

were

power

penchant for several generations
of her industrialists to send their

monopoly. There
Cartels are

profits abroad instead of reinvest¬

Germany there existed a con¬
of economic power in

ing them in plant equipment and
machinery. Marshall aid is giving
France a new set of tools and it

anti-trust laws.

are no

the rule.
In

centration

the

Credit

prices stabilized. The present La¬
bor government, like its predeces¬

hands

few

banks,

itself

and with the

government

nearly

not

the

here,

the

subject

stances were even more numerous

take hours to develop

and I can merely cite a few cold

intelligently,

of the
Wage scales American people own 80% of the

capitalism likewise had figures. The claim that 2%

Incestuous

aspects.

in 1948!

late

The

George
satire

the

wrote

Orwell,

who

wolf

pack against large
was

cor¬

in full swing from

"Diaily Worker" down through
left-wing Congressmen, Sen¬
and labor leaders to the

softly-sobbing Park Avenue liber¬
The attack was quite different

als.

from

anti-trust actions un¬

those

Clayton and Sherman Acts
instituted prior to 1938
which resulted in such old-

were

and

fashioned monopoly cases as those

BUILDING

SECURITY

DENVER 2,
Bell

and Standard Oil

the Tobacco

trusts,
new

Telephone Tabor 4154

Pullman

program

define

petition

BELL, DN 290
Private

wire

Bonner

—

and 5.2% in

na¬

1939,

mediocre

a very

The fairest measurement of

year.

net

profits is as a percentage of
sales, and here we reach a figure
of 5% to 5%%, which is certainly
modest.
Moreover, profits in an
inflationary period are likely to

be overstated by the accounting
profession. This danger is recog¬
nized by the Department of Com¬

all.

profits in 1950 are
overstated by $3
$4 billion this year.
:

Corporate
thus

they bid for the favor of
The

consumer.

would

lists

have

brief

Here

oft

the

told

that government money if
like paid out into certain channels is

with story

don't

Americans

is about

the Welfare State.

that

and

clubby

The fifth fable

(5)

anti-oligopo¬
believe that

Macy's

getting

apt

monopolies and have no intention
and wealthier and raise
of tolerating them, but they will
support an anti-bigness cam¬

not

and

the

Alcoa.

monopolistic

the

few,

the matter.

(4f The fourth fable

The

with

claim

concerns
that cor¬

porate profits are too large.
The

is Marxist, it has enlisted
or unconscious aid

origin

conscious

the
of

numbers

large

munist Leftists.

our

living

doubt that

by the taxing power money can
be
taken from
one
pocket and
placed in another, but new wealth
is not thereby created.
Security

legitimate objective

is obviously a

society, but security in an in¬
dustrial economy must be based

non-com¬

If the

average

American could be

made the realize that his standard

of living is

based

on raw

materials

The claim is al¬

plus human energy multiplated
ways that profits are "excessive/' by the productive power of tools
most of our present day unneces¬
"extortionate,"
"exorbitant"
or

of a dozen emotion-arous¬
adjectives.
But never is a
yardstick or a sound standard of

social conflicts could speedily

anyone

sary

ing

be resolved.

this

claim.

Certainly,

(6)

The sixth fable relates
high profits usually mean

back

that

taken

measurement offered

low wages.

themselves, corporate profits

are
The exact reverse is true. Prof.
high and, in fact, the highest in Backman of N. Y. U., Harold DorU. S. history; but that is only half
sey of Argus Research Corp., and
the story—so is the national in¬
others have shown

come, up

from $87 billion in 1929

to around

$230 billion now; wages

and

then

salaries
to

around

with

Even

researches

their

when corporate

$50 billion employment

from

$140 billion now.

prosperity,

present

DN 369

Gregory

PETERS, WRITER & CHRISTENSEN, INC.

against

campaign

smear

There is

standards.

profits has been in operation for on production—the "greatest good
some decades now, and while its
for the greatest number" concept.

com¬

"con¬

the

with

itself

concerned itself with

glomerate activities" and with so-

MAIN 6281

the

"oligopoly," which the professors

COLORADO

Teletype DN 296

which

collectivism

"1984," would have labeledsit "the
fable that bigness equals baclness."
The charge is that small business
is losing ground to big business
which is largely monopolistic. Up
to the time of Korea the cry of

$8 bil¬

over

tional income against 6.6% in 1929

of
by
of

paign if they are given the facts

power.

ators

COMPANY

little

be about 3L>%

would

bound to make us a nation stronger

der the

and

cigarettes, automobiles or any
products
manufactured
large corporations is conscious
the intense competitive spirit
the

Chevrolet.

(3) The third fable concerns
itself with monopoly
and the
concentration
of economic

the

Municipal Bonds

indus¬

452

1935 and 1947 con¬

tries between

loves

the

COUGHLIN

in¬

leading

covering

report

porations

Wyoming

tive

Chrysler

the

Active Markets Maintained

In Colorado &

lion

dividends

Sawyer in an exhaus¬

Commerce

Gimbel's

would

than in

England.

and open

Leftists.

which

This

the

policy of dispossessing the proper¬

is following an avowed

unwholesome

portant shareholder in many in¬

French

and

somebody is being
kidded, but it can hardly be the
British whose Labor government

but

pattern publicized b,y the

im¬

Paper,

tied classes.

inequality

have

interlocking

industry,

incomes

United States.

Deutsche, Dresdner, Darmstaedter
and
the
Disconto - Gesellschaft.
Cartels

tribution

banks—the

"D"

four

the share
"rent,
interest" declined

White

recent

Somewhere,

(2) The second fable concerns
with the alleged maldis¬

the Highest
Capitalism," were the

"Imperialism

Stage

of national income taken by

from 24% in 1938 to 15%

industrial practices.

wise

each

prices."

show that

it sought to

brief,

investor groups in the shape of cluded that there was no overall
merce in its statistical reports and
rents, interest and dividends has increase in concentration. Dun &
it adjusts "corporate profits after
dropped alarmingly from 16.9% Bradstreet figures relative to the
taxes" by a so-called "inventory
in 1929,
13.3% in 1939 to only annual births and deaths of cor¬
which: is
7.9% in 1948. Here we ask indul¬ porations show that there are ac¬ valuation adjustment"
equivalent to the change in the
gence to digress for a moment and tually more companies in business
call attention to a deadly parallel. today per 1,000 of population than cost of replacing inventories and
In Socialist Britain, according to in 1900. Everyone who buys soap, is not really an "economic" profit

dividends

capitalism" in his

book,

famous

that she has learned
industrial lesson from her un¬

The

gross proceeds
is going to the

degree little realized in the United
States. The nuclei of what Lenin
called "finance

interest and 83% of the rents.

is to be hoped

"administered

called

1917 after dustries, a few, perhaps 3, 4, 5
taxes, 3.4% in 1932, 1.3% in 1944 or 6 large units did a large per¬
and probably 1.2% now. The peo¬ centage of the business, and per¬
ple with $5,000 incomes or less haps they should be broken up.
collect 90% of the wages and sal¬ This view has an ideological rather
aries, 70% of the dividend and than a factual basis. Secretary of

centralization of financial percentage of the
in the hands of great banks of business which

the Societe-Generale, the
Lyonnais and the Banque
de
Paris et de Pays-Bas.
The
Achilles heel of France was the
such

allotting them a percentage share
Pro¬
duction
was
"coordinated" and

of the total of the industry.

sors, encourages

There was

and still are low.

were

the com¬

competition. great

antithesis

got 6.7%

over)

incomes

the national income in

Fight
Their Enemies

$25,000

The

fabrication.

sheer

so-called rich (those with
of

plete

wealth

Continued

Thursday, December 14, 1950

wage

profits were high,

was

high,

rates were high and

hourly
worker

This is no mys¬
when profits are
high, industry builds, equips and
expands and therefore employes.
A blow at profits may injure us,
the
investors, but it is a blow
against employment as well.

prosperity great.
because

tery

The seventh fable come
Karl
Marx via Lor

(7)

Pacific Northwest Securities

out

DENVER 2, COLO.

conclusively by
that
in years

Keynes.
It is the

Loveland, Colo.

misconception that pur

everything. Thi
theo
if you keep on raising
will generate purchas
and solve unemploy¬

chasing power is

BLANKENSHIP, GOULD & BLAKELY

Dealers in

so-called purchasing power
holds

INCORPORATED

that

wages you

Corporation Securities
and

WILCOX

Municipal Bonds of

ing

BUILDING

PORTLAND 4, OREGON

COLORADO

NEW

MEXICO

MONTANA
UTAH

NEVADA

wages are

Bell System Teletype

but

other economic im¬

It neglects the

balances.

tor
ARIZONA

power

ment and most

not only a
cost

fact tha<

demand fac

factor.

Wages

pushed too high without
productivity may create

PD 280

WYOMING

raising
unem

ployment.
But mere

recognition of the ex-

Government, State and Municipal Bonds
i*

BOND
•

•

;

■

- ■■

-..

DEPARTMENT

•

FIRST

NATIONAL BANK OF PORTLAND
OREGON

Volume

172

istence

Number 4968

The Commercial and Financial Chronicle

(2367)

enough.
than

We doubt whether

directors

alize

fables

tiny minority of

tion

these

what

and

the

not
more

corpora¬

executives

ideological

re¬

score

actually is.

the

world's

produce

the

population

other

94%

out¬
is

European

countries

our

IBA GROUP CHAIRMEN

(and we as well) have campaign to contain commun¬
been pushed around
And of course there is
by a lot of ism.
Left Wingers who never sold
any¬

flop.

Russia, and

now

Red

MISSISSIPPI
VALLEY

China.

SOUTHWESTERN

We as investors must thing in their lives
except phoney What will
they do? According
organize ourselves and insist that economics.
to the papers few of the Euro¬
oiir
corporations
cease
So let's
dodging
recognize, organize and
and temporizing. What do I mean further
let's educate.
Let's insist pean countries are interested
by this?
Well, Father Keller of that our corporation people stop in
going to war. That leaves
Notre Dame and Dean McBurney
appeasing their would-be despoilus
of the School of Speech at North- ers
leading the parade with
by their silence.
Let's have
wfestern have criticized the Amer¬

the

ican

That

Federation

stewardship.

He is untutored and

ers

Particulate.

congratulated

has

equal

make

TEXAS

few allies
these things.
following behind.
for us to help There's a lot of yockety-yock
enterprise work. The about
stockpiling. Yet, if the
to

courage

businessman for his inability
or
unwillingness to defend him¬
self and the investors under his

one

free

way

of Women Sharehold¬
in American Business is to be

for

its

good

is to be believed, few

press

companies have received

start

any

far as manufacturing and
selling along these lines. Where the men orders.
So that leaves us in
automobiles, cigarettes, refrigera¬ have pussyfooted the women seem
the never-never land.
tors
or
chewing gum are con¬ to be forging ahead. There is much
*
*
cerned, but when it comes to de¬ to be done. The stakes are tremen¬
fending and selling the economic dous. If we investors will not
help
How will the market in¬
system which has made it possible ourselves,
certainly no one else
for Americans who
terpret all these things, pos¬
comprise 6% will.
sible and probable?

Jerome F. Tegeler

Philip J. Rhoads

Lewis F. Rodgers

Dempsey-Tcgeler & Co.,

First Nat'l Bank & Trust

St. Louis

Company .Oklahoma City

Central Investment

Company of Texas, Pallas

Frankly,

this

Tomorrow's

Whyte

Says —
=

less

about

than

the

certain

action

based

prices

Metropolitan Ed. Bds.

verbal bats into this free-for-

and then turned up.

crued

all

not

awarded

gab-fest.

The rails
only held but went

interest.

The

bonds

were

Halsey, Stuart & Co. Inc.

The only thing
at competitive sale Tuesday on its
that stops me is the lack of through to new highs, there¬ bid of
100.31992%.
Last week's market, or
by evoking bullish interpreta¬
Proceeds from the sale will be
knowledge, though I notice
rattier the action for the past
tions from the Dow theory used in part for the payment of
that hasn't
stopped a lot of
two days, Monday and Tues¬
followers. Yet the industrials $1,247,500 York Haven Water and
other people.
Power
Co.
5% gold bonds due
day, was a standoff. A few
have some distance to go be¬
*

stocks

went

down

went

weak

and

few

do if
.•;<

in such

out

was
any comfort
market, I failed to

■*'■■■

•

t'f

s|:

tions?

brings us back to the
loary
question: what now?
To answer that would require
i
lot of insight into the forign situation; a knowledge of
ur
foreign policy and where
t will turn and how applied,
'm tempted to sound off on

Korea.

confirm

can

the

swers

tions.

end of

I
to

new

thdt

looks
other

where
if

an¬

of these-ques¬
anybody does, I'd

tions."

This

Washington

naive

to think

pulling UN troops out of
Korea will settle anything.
There is still Europe to con¬
sider, specifically West Ger¬
the

now

attitude

first

Korean

the

for
I

the

[The
time

orv

bonds

option

construction

the

company

103.81% .to

sinking fund
requirements at prices

ranging from 100.81% to 100%,
plus accrued interest in each case.
The company is a public
utility
operating wholly within the Com¬
monwealth

of Pennsylvania and
principally in the busi¬
of
generating, transmitting
selling electric energy in all

is engaged
ness

and
or

portions of 4 cities, 90 boroughs
154 townships located in 14

and

counties
All

the

Utilities

Gross

Commonwealth.

company's

stock is owned

common

by General Public

Corp.
revenues

of the

company

during the 12 months ended Sept.
30,

1950

and

redeemable

for

an¬

amounted

$29,225,213

net

income, after all charges,
$4,963,690.

PORTLAND

Brokers

•

SPOKANE

EUGENE

be¬

develop¬
news,

SEATTLE

Underwriters

•

Healers

pick. But whatever

views
do

are

other

put

come

phase of the rally is

article

The

TRADING

it, I suspect that the

causes

and

could

ments,

that

many

are

cause

take your
so

sit

"correction."

any

like to hear them.

I'm not

stockpiling? quotes around that word be¬
and bigger cause
I
mistrust
"correc¬

don't know the

purchase

property additions.

prepara¬

war

1, 1951. The balance of the
proceeds will be applied against
the

From

forces

our

Would

An end to

end

taxes?

/ This

pulled all

mean

it.;

see
11

*
"

there

they

fore

It would be
strong and
comforting to rails.
about
equally know what the market would

divided.

from

and

June

with

spots

"}■

ranging

100%;

Halsey, Stuart Offers

coming events, even if I
pillar.
don't know what these events
Still, after hearing a flock of
will be.
Halsey, Stuart & Co. Inc. is of¬
commentators giving their in¬
❖
*
*
fering today (Dec. 14) $5,250,000
terpretations of past events
Edison
Co.
first
Last week the market held Metropolitan
as
yardsticks of future moves,
mortgage bonds, 2%% series due
at the approximate 222
I too would like to throw
figure Dec. 1, 1980 at 100.81% and ac¬
my

By WALTER WHYTE =

that

But I do know

average reader of this

Markets
Walter

point though I probably

know

I don't know.

not

coincide

expressed

PACIFIC

MAINTAINED

SECURITIES

over.

necessarily at
with

MARKETS

NORTHWEST

this
any

those

of the
They are presented as
those of the author only.]
Chronicle.

Pacific Coast
Securities

FOSTER & MARSHALL
Executed

Orders

Municipal and Corporation Bonds

Pacific Coast Exchanges

MEMBERS
New

York

Stock

UNDERWRITERS
DISTRIBUTORS

and New

York

Curb

.(Associate)

Chicago Board of Trade

820

chwabacher & Co.

Exchange

SECOND

AVENUE, SEATTLE 4

Teletype SE 482-483

Telephone MUtual

1900

Members

New
New

York

Stock .Exchange

York

Curb

Exchange

Francisco

San

Stock

Chicago Board

SOrtlandt
Private

(Associate)
Exchange

Teletype NY

7-43 50

DEALERS

1-928

Wires to Principal Offices

Francisco—Santa

San

;

Trade

New York 5, N. Y.

14 Wall Street

Barbara

Serving the Pacific Northwest Since

State and

Monterey—Oakland—Sacramento
Fresno—Santa

1913.

Rosa

Northwest Securities.

SPECIAL CALL OFFERINGS
•

Per

100 Shares

Plus Tax

:hesap. & 0. @ 32% Feb.
Werck & Co. @ 54% Feb.
:iimax Molyb.@27% Mar.

Municipal Bonds

Markets maintained in Pacific
Offices in

prin¬

U. S. Government Bonds

cipal Pacific Northwest Cities.

•

$262.50

675.00

225.00

pfd. @ 18% Jan.
ichenLey ind.@38% Feb.

250.00

262.50

@68 "v Feb.

275.00

@43%

Feb.

300.00

Union

@40%

Jan. 29

450.00

flo.-K.-T. pfd.

@44%
@12%

Feb. 15

325.00

137.50

LF.P. $7

Chrysler
Irmco

Vest'n

Varner

....

Steel.

Bros.

mqs.

Seattle

First

NATIONAL BANK

Explanatory pamphlet on request

BOND

THOMAS, HAAB & BOTTS
Members Put

Dealers

Calls Brokers &

Assn., Inc.

Broadway, N. Y. 4, Tel. BO 9-8470

INVESTMENT
501 EXCHANGE BUILDING

SECURITIES
SEATTLE 4, WASHINGTON

MAin 3131

DEPARTMENT

Seattle 4, Washington
Member Federal Deposit Insurance

Teletype SE. 489

Corporation

The Commercial and Financial Chronicle...

(2368)

ent bonds and preferred stocks,
representing 32.1% of assets, and

Stanley Heller Opens
PALM

New

Stock

York

Exchange,

are

branch in Palm Beach
Hotel.
Associated
with
that
office
is
opening

dustries

Fla. — Stanley
members of the

Co.,

By ROBERT R. RICH

Ely was
formerly with A. M. Kidder & Co.
and Draper, Sears & Co. In the
past he conducted his own invest¬
ment business in New York City,

Valentine

-A.

Ely.

Investor Diversified

Expects

for Industrial

Dividends

and Commercial

Expansion

Living Costs

Diversified

Investors

Dividends

Services

Details

and
request

program
upon

SECURITIES

NATIONAL

CORPORATION

RESEARCH

1J0 BROADWAY,

NEW YORK 5, N. Y.

Rise

paid

73%

Harry H. Hagey, Jr., President

capital

the

of Stein, Roe &

creased

of the

builders during 1951, within ex¬
isting government credit regula¬
tions, Donald E. Ryan, Vice-Presi¬
dent, said in a review of the

greater

financial

level

fairly high

assistance

nation's

the

the total amount of

tion

during

make

available

for

will

needed

commercial

and

re¬

construc¬

new

Investors

1951,

funds

jmdustrial

defense

largely condition

may

con¬

rate

considerably

than the rate of increase

in the cost of living,

according to

compilation prepared by Calvin

Bullock.
share

Per

dividends

investment

net

quirements

income

paid from
by Divi¬

dend

Shares, Inc. in 1950 were
larger than the dividends
paid in 1940 (8%c a share against
105%

4.13c
the

share)

cost

while

the

rise

living since

1940, as
measured by the Consumers' Price

S/ne ~Secrao

two

units

view of

ments

FUND

build
tion

gratifying," said Mr. Hagey, "be¬
it reflects increasing public
acceptance of the open-end in¬
vestment company in the Middle
West where Chicago has only re¬
cently started to assume impor¬

trust

fvtham Fund Distributor*. Inc.
50 Scare Street, Boston

investment

for

home

drastic

houses

new

down

required

now

under

pay¬

buy

with
for

management."

Regula¬

sumption of oil next year at 7,housing starts during 1951 125,000 barrels — an increase of
will probably be cut much more more than 5% over the approxi¬
than
50%
from
1950's all-time mately
6,740,000 barrel demand
high of approximately 1,400,000 during 1950, the record to date—
the firm stated that the "estimate
units," Ryan estimated.
is probably on the conservative
Total new
private and public
construction in the United States, side, and total demand could pos¬
sibly rise another 100,000 to 150,which
also
hit
all-time
high
000 barrels daily under particu¬
monthly averages of more than $2
larly favorable circumstances, es¬
billion per
month during 1950,
pecially in regard to weather."
may also be expected to slack off
X,

per

outstanding,

He said that
»•5^1"*

'7*' "*•"

*prospectus from
your investment

dealer

PHILADELPHIA 2, PA

until defense

con¬

begins to take up the cated demand without undue
slack resulting from the expected strain and "in view of the profit¬
dip in home building, there might ableness of crude oil production
be considerable unemployment in together with the current political

environment,

the building industry generally.

often

too

are

high'

hear people

because

the

DETROIT, Mich.—Max E. Bol¬

Funds
Certificates of Participation in

INVESTMENT FUNDS
investing tlieir capital

BONDS
(Series B1-B2-B3-B4)

PREFERRED STOCKS
(Series K.1-K.2)

the

1949

low

which this

modest

Near

it'
a

to whether

subsatntial rise

stocks have had
or

only

moder¬

be obtained from

the

"Perhaps if we put it another
point may become even

way, the

apparent.

instance, how
who

curities

Keystone Company
of Boston

can

Congress Street

Massachusetts

for

wonder,

people there

many

look at

quotations

list of

and

say

se¬

that

individual stock is 'too far out

of line' if it has gone say from

to $12%.

Boston 9,

Chester E.

—

Schools of Corporate Reform
Harold Gill Reuschlein

sity

Pittsburgh

McDonald

the

Detroit

was

ing

Building
Stock

Company,

members

Exchange.

Charles

for

the

Stock

been

Calif.—Edwin

added
&

the

staff

Co., 632 South

Norway

spruce

the

outside

change

gallery

noon

and

upon request

Yet that is all that has

happened to the Dow-Jones index
of

industrial

stocks

since

approximate low of 1949 if

the

you
translate it percentage-wise to a
stock of lower value."

Lord, Abbett & Co.
Atlanta

—

Los Angeles

Twenty Million

increased

end

of the

Nov.

to $19,033,000 at
Fund's fiscal year

1950, from $16,426,000
30, 1949. The forthcom¬

annual

report to the more
than 8,000 shareholders will show
net asset value per share of
an

Income received by share¬

holders

was

also

higher.

Divi¬

dends paid from ordinary income
in 1950 amounted to $1,114,850 or
72c

share as against 64c
paid in 1949.

per

Diversified
on

Nov. 30,

Investment

Diversified Investment Company

$12.33,

increase of 16.3% for the fiscal

year.

per

Fund

1950, owned 29 differ¬

Prospectus

be obtained from your local
or The Parker Corporation,
200 Berkeley St., Boston 16, Mass.
may

investment dealer

V??

com¬

munity.
Commencing
Friday,
Dec. 15, when the tree will be
lighted, carols will be played from

assets

—

has

bring holiday

financial

Affiliated

Chicago

Avenue.

by the New York
Exchange in Broad Street.

in¬
oil

—-

New

erected

afternoon.

Spring Street.

New York

an¬

its

Christmas Tree
50-foot

It is the 27th tree to

Major and William-G. Williams,

Witter

Fifth

Co.

Exchange Erects

warmth

have

Sully is resident man¬
and Arthur Burian is trader.

been

Dean Witter Adds

of Dean

and

(Special to The Financial Chronicle)

Jr.

Rice

removal

office to 521

York

Stock

ANGELES,

Pitts¬

Bailey & Company.

LOS

—

Univer¬

Office lo New Location

formerly manager of the trad¬
department

—

Press,

Nov. 30,

ing

are

The

Contest

Job

Assets of Diversified Investment
Fund

Street,

Evans and La Verne N. Laseau—

Share Value Up 16.3%;
Dividends Also Increase

only 43 measuring points and it is
only a matter of 'how you look at

—

16, N. Y.—Paper—20c.

Diversified's Assets

more
may

38th

East

New York

Fund, Inc.
its

17,

Practice

advance
a

rise by comparison. In short, the
70 measuring points contrast with

COMMON STOCKS

Prospectus

Pamphlets,

ager

ex¬

reached a record total of $56,283,some 70 points since
its low of 1949," Edward E. Hale 403 on Oct. 31, 1950, with 2,601,069
reports in Vance Sanders' "Brev- shares outstanding.
The net asset value per share
its."
on
Oct. 31
amounted to
$21.64,
"These people are, of course,
compared with $20.61 on July 31
taking a literal view of the point
and $20.45 on Oct. 31, 1949.
advance in the industrial average
Holdings on Oct. 31 consisted of
and are not relating the increase
common
stocks in 61 companies,
to the broad perspective of where
representing 15 industries, while
stocks are generally.
the fixed-income portion of the,
"While a 70 point gain suggests
portfolio was in 49 issues of pre¬
a marked
rise, the 43% gain from ferred stocks and bonds.

ate rise since the low of 1949.

(Series S1-S2-S3-S4)

American

and

Prospectus

reports

York

Roger N. Baldwin—Public Affairs

Penobscot

High

Fund

New

has advanced

represents suggests only

Boston

Street,

Human Rights—World Declara¬

tion

Robert

Boston Fund Assets
At Record

42nd

Y.—Limited number of copies
available to corporations on re¬

hover has become associated with

Dow-

Jones index of 30 industrial stocks

Custodian

significant

East
N.

nounces

pected," according to the study.

"Are Stocks Too High?"
"Every

any

crease
in the general crude
price structure should not be

comment to the effect that 'stocks

eystone

industry should
meeting the indi¬

struction

Vance Sanders Asks

domestic

capable

Ha-

ney—Bertrand W. Hall & Co., 41

Daniel

(Special to The Financial Chronicle)

The
be

Annual

Lewis

Daniel Rice Moves N.Y.

C. G. McDonald Go.

Crude oil production, the an¬
during 1951, pending
evaluation and possible re-align- alysis continued, should at least
ment
of
defense
needs
which equal
anticipated
demand
and
might require substantial addi¬ could exceed it if the industry
tions to existing defense produc¬ added to inventory in the coming
year.

Progress

Reporting, A—Dr.

burgh, Pa.—Cloth—$2.50.

share value of $2.38.

somewhat

plans and military facilities,
it was pointed out.

16, N. Y.—Cloth—$10.
of

Paper.

Max Bolhover Joins

expect that new non-

tion

Decade

Personal Psychology, 1727 Harvard

Trust Fund reports
$2,134,542 on Oct. 31,

895,129

1951 according to "Perspec¬
study, "The Petroleum In¬

dustry Booms Again," published
by Calvin Bullock.
Placing
estimated
daily con¬

Commercial

Street, N; W., Washington, D. C.—

farm

£ftodton

cause

tance

quest.

growth

rapid

York

New

j
Fund's

"The

Manual

now

tive's"

States.
"In

all-time peak in demand

year

United

common

inception,

$50.

was

Credit

Laws, 1951—National Association
of Credit Men,
1 Park Avenue,

Lexington

for petroleum is projected for the

the

since

net assets of

built

invested

assets

$2,244,459.07, equiva¬
lent to $60.77 on each of the 38,933
shares
presently
outstanding.
When
organized last year, the
Fund's assets totaled $105,000, at
which time the price per share

Peak Oil Demand
new

an¬

value

asset

net

Fund, which has had 60%

amounts

"Perspective" Forecasts
A

Farnham Fund

the

Lexington Trust Reports

100 new dwell¬

out of every

ing

PUTNAM

that

stocks

vided

$190
million in original
building funds for approximately
31,000 new housing units in 1950,
Mr, Ryan disclosed. The company
last year financed approximately

its

shopping centers Index of the U. S. Bureau of
and plant additions required by Labor Statistics, has amounted to
expanding companies, Ryan said. 73%, the firm said. The dividends
Investors is playing an impor¬ paid from net investment income,
tant part in financing new hous¬ used in the compilation, do not
ing and other construction across include payments made from net
the
nation.
The
company
pro¬ securities profits.
struction such

Bookshelf

Million

Over Two

nounced

While

prospectus

Man's

Stein, Roe & Farnham

105% Above 1940;

stock of Dividend Shares have in¬

expects to maintain

building financing outlook for the

INVESTMENT PROGRAM
An Open
Inv^fnerOccount

trade

Dividend Shares Payments

Funds Available

New Year.

NATIONAL

retail

were

stocks, the oils, utilities and tex¬

Ahead of Living Cost Rise

High Building Finance

Mr.

holding membership in the New
York Stock Exchange.

Business

tiles.

in the Palm Beach Biltmore

different

companies, representing 65.9% of
assets.
Largest holdings by in¬

BEACH,

stocks

common

Mutual Funds

Palm Beach Branch
Heller

Thursday, December 14, 1950

the

Ex¬

the late

Volume 172

Number 4968

The Commercial and Financial

Chronicle

II.

Rippel Passes:
New Jersey Inv. Dealer
J.

THs Week—Bank Stocks
The first

official indication of yearly
operating earnings of the
major New York City banks is usually provided
by the Bank of
the Manhattan
Company.

the Bank of the Manhattan
Company was held Dec.
that time the Chairman of the
Board, Mr. J. Stewart
mented on national events and policies as

5, 1950.

estimate

was

not

are

the

corresponding period of 1949
shown.

was

<r\,

Julius

inent

operating earnings for the year will
be given to stockholders in
January. However, a breakdown of
as

compared with those of 1949

was

past

year.

; Earnings."

Interest

Interest and Dividends
Commissions and
Other Earnings

1949

$15,850,000 $13,248,000
5,850,000
6,415,000
3,700,000
3,516,000
750,000
699,000

Securities

Fees

the

financing

which

prom-

com-

formed

the

$26,150,000 $23,878,000
Salaries

Wages

8,950,000
5,250,000

Provisions lor Taxes and Assessments

8,651,000
5,213,000

5,900,000

4,748,000

Net

Operating Earnings

-Per

$0,050,000
$2.42

The principal factors in the improved
showing of Bank of
Manhattan have been the greater demand for commercial loans
and higher interest rates.
Deposits during the two years have
shown only minor changes, so that the increase in
earnings has
been the result of the utilization of resources
in
manner.

profitable

age annual rate of return
year.

t, ,j

2.47%

was

United

States

Trust

Known

for

nhilanthromes

i=£L 1 v,

5
Si

Com-

the National State Bank.

h«

YMnnol

breakdown

are

hrl£rlh
oy researc

With

anrl

tav

transpired, Canada
B

by about 15% rising to
Several

its

are

other

loan

were

Building,
York

points of interest

this

reserve

year

included in

were

the

the annual meeting.

bringing

$11,250,000, the present maximum.

report
an

Also

ex¬

the

total

reserve

reserves

Mr.

Baker

Funds for this reserve will be

obtained from the tax saving
resulting from the reserve and
tain other

cer¬

longer required.

commented

this

the Federal
Under the

year.

formula, after operating expenses, additions to reserves, losses,
etc., 40% of the assessment would be transferred to the FDIC
capital account and the remainder credited
against future assessments.
year

rata to the insured

pro

For the Bank of the Manhattan

is estimated at around $400,000.

BANK

NATIONAL BANK

and

oi INDIA. LIMITED

STOCKS

Bankers

Kenya
Head

the Government

Colony and

Office:

26,

London,

Laird, Bissell & Meeds

Branches

Curb

Exchange

120 BROADWAY, NEW YORK 5, N. Y.

Telephone: BArclay
Bell

Teletype—HY

S. R.

Uganda

and

Subscribed

District

in
i

No.

...

Dealers,
States

Illinois,

the
s

the

Indiana,

Iowa,

has

resulted

foui

new

members of the District Committee.

T'mpc H. F11io President, Fllte
James TT Ellis, PrpciHpnt Ellis,
Holyoke

Nebraska;

Paid-up
Reserve

Capital
Fund

Carl

(L. A. Gibbs, Manager Trading Dept.)

Specialists in Bank Stocks

The

Bank

every description of
and exchange business

linois;

Company,

Hughes

II-

Chicago,

William

and

Trusteeships and Executorships
also undertaken

Raffen-

Co. Inc.,

-r..

are

members of Distiict Com-

new

Those

the

Canadian dollar

cjai

selling moved lower.

continued to
recent

John

are:

Chicago,

Chicago
Chicago,

Lee

and
and

Ostrander,

Frank
frank

Reissner
Keissner,

L
L».

commer-

Stock*

recover

following the
sharp decline led by the

base-metals.

reSs

The

industrials

in
is

bid the golds, as is to be

Committee

will

the

assume

District

office

With Mitchum

cellor of the Exchequer Sir Staf-

^
&°°d

Tully

LOS

ANGELES,

Butzbach

has

Mitchum,

Calif.—Harry
^

l'oined"the"staft

Tully

rtT merly Spnng Street. He
S°U?
with the Pacific

fnrmer
authority that the former director of British financial policy
was definitely in favor of sterling
revaluation. Moreover when criti-

Co.,

devaluation,

Sir

Stafford

Company

0f California,

stated

undervaluation whenever the
cumstances
His

120
....

successor

Get-Together
of

Ernst

Broadway,
'
.

„

New

CANADIAN BONDS

Restaurant.

naturally

hesitate to take the responsibility
a momentous decision
of this kind, and has consequently
expiorecj other alternatives.
the first place

Provincial
*

Municipal

Corporation

Mr. Gaitskell

has voiced the opinion that before

revaluation

be seriously con-

can

sidered it would be advisable to
build up the exchanSe reserves to
level in the
In

that

this

sible

attainment,

constitute

terms

now

rated to such

the

fact

impos¬

its financing

embarrassing

announces

trade
an

have

that

deterio-

exports by £300 million in
pay for

A. E. Ames & Co.
incorporated
Two Wall Street

New York 5, N. Y.
WORTH 4-2400

ny 1-1045

extent that it will

necessary during 1951 to inorcjer

CANADIAN STOCKS

neighborhood of $10

addition

figure is almost

Chancellor
the

crease
on

Thursday evening, Dec. 14, at the
Roumanian

would

Government

cir-

action.

of making

York

City, will hold its get-together

such

problem, and in the light of past
experience such a margin of safety
is totally unnecessary. The British

Ernst & Co. 15-Year Club

Club

justified

required imports.

view Gf the present peak production levels
it is difficult to

Fifty Congress Street
Boston 9, Mass.

650

was for-

cism was voiced in the House of
Commons of the extent of sterling

would

15.

15-Year

ex-

(Special to The Financial Chronicle)

the hiatus

Treasury policy caused
by the untimely defection of Chan-

billion.

members

and

even more

possible explanation

New

the

now

Western oils also made good prog-

retiring

Douglas, Omaha, William C. Gib-

Old

view

mittee No. 8.

Co.,

course

reconcile

the compelling circumstances.

£2,500,000

conducts

banking

were
quiet but at
present lower levels there are

always be possible to correct the

To Hold

7-3500

1-1248-49

difficult

Inc., Chicago, Illinois; New'
Frye, President, Central

sperger,

The

internals

erately chosen, but that it would

Jan.

decided

Treasurer, Carl McGlone

Republic

the

Commonwealth

that the low level had been delib-

McGlone,

£4.000,000
£2,000,000

the

Presi-

dent and
6 Co.

Lincoln,

Company,

ex-

ternal section of the bond market

jn grmsb

Michigan, Nebraska and Wisconsin,

con-

-In the case of the United King-

comprised

Inc.,

was

opposition

reluctantly

valuationary
election

waa

:dom the failure t0 follow the re- pected, made little headway.

CHICAGO, 111.—The annual

Zanzibar

Capital

revaluation,

authorities

#%##■

India, Burma, Ceylon, Kenya
Kericho, Kenya, and Aden

fronted with the violent

against the currency move, even
though mounting inflationary
pressure on Australian living costs
virtually dictated such a step.

Bishopsgate,

Colony,

Members New York Stock Exchange
York

purchases of

During the week there
slightly more activity in the

Canadian dollars. Australia, how- an^ a moderate turnover was re5Ver' despite a cabinet majority in Cordod in Canadian Nationals. The
favor

Government

Bailey & Co. and

Indianapolis.

INSURANCE

New

Stock

Fleets to UTTIC6

son,

Members

S. speculative

dollar.

New of

formerly
xormeiiy

was
was

„

new

Company, the credit next

He
lie

that the Dominion's currency unit
more readily be permitted
to attain full parity with the U. S.

the Country Party minority, indications of renewed buying inEx- In order to preserve the precari- terest.
The corporate-arbitrage
with:ously poised unity of the Coalition rate was higher at 7%%-7%, but
witn

the

Detroit

and

Penobscot

Livingstone & Co.

ton

the change in

upon

Deposit Insurance Act effective Dec. 31

banks

Co.,

members

chanees
changes.

higher

revealed that Bank of Manhattan will add
$4,000,000

was

Hague

with
witn

Salaries and

other operating

estimated $6,050,000 from $5,266,000.

Chairman of the Board

Lee D. Walk-

associated

apparently

was

sudden overwhelming flood

of U.

National Association of Secu

this, net operating earnings
an

Mich.

become

Swith,

forced to jump the gun as a result

Smith, Hague & Lo. of

h-s
hes

adopted

' " exception of Pakistan. As matters

...

DETROIT
er

-t

they have been well controlled.

increase but in spite of

earnings, according to the

Provision for taxes and assessments showed the largest

expenses.

ample it

higher by only a small amount

are

of the

sources

simultaneously

a11 the British Dominions, with the would

NASD District 8

slightly higher.

As to expenses,
wages

Other

British Commonwealth meeting recent appreciation of the Canalast September, that action along dian dollar. In the event of such
the Canadian lines would have a step also there is little question
been

nfSnvprnmpnt

....

Although interest rates on government securities have been
firmer this year,-the total income realized from this
source
is
expected to be lower.1 Holdings of governments have been light¬
ened to provide part of the funds which have been
used to meet
the demand for loans.

early reversal of this favor- in the struggle of the free world
able trend.
against the forces of aggression.
Countries such as Austialia and
As far as Canada is concerneel
any

ports from the Dominion since tho

the

compared with 2.36% last

a strong pound is by

no means an inconsiderable factor

following the deliberations of the

panv and

Chas.

This, of course, has been reflected in the rate of return on
earning assets of the company. Up to Oct. 31, this year, the aver¬

to suggest that there will be

inS

sterling revaluation would have &
beneficial effect with regard to tho
terms of British-Canadian trade,
Present efforts to increase Britishi
purchases from Canada are greatly
impeded by higher costs of im«

$5,266,000
$2.10

espe-

tion the only practical method oH

monthly peak. There is also noth- ister Attlee;

interest throughout his

(Special to The Financial Chronicle)
•

achieved,

the United Kingdom must now
bitterly regret their failure to follow the constructive example set
life serving on the directorate of by a member of the Commonmany of them. Only a short time wealth family. It will be recalled
ago he was active in the merger that it was confidently anticipated

ation

and

Other Expenses

alY Pressures would have been al-

specialized in local banks and

Expenses:

re-

Electric, Gas and
Transportation Coippanies. He al-

retained
>

Estimated

Loans

possibly

velopments. In the absence of such
It is possible that in proposing
action
influx of foreign flight objectives that are patently im~
capital would have attained intol- possible of achievement, Mr. Gaiterable proportions, and inflation- skell is leaving open for sugges-

insurance companies in which he

part,

1"
1950

scouted

Service

'■
:

conceive how this formidable task
can

most beyond control. On the other escape from Britain's present
hand the Dominion's export posi- quandary—upward adjustment ot
Born
in ^on
*be higher level of ex- the exchange rate that would aumodest
cir- change is no whit weaker than
tomatically redress the alarming
circumstances
previously, as a result of the re- degree of imbalance between imMr. Rippel cent resurgence of world demand
port costs and export returns. This
established his for raw materials. In point of fact important step that was at leas*
own
invest- tbe export figures for October, the a possibility at the time of Mr.
ment business f*rst month following the freeing
Gaitskell's pre-election visit to
at the age of of the
dollar, were the second Washington, must now be receiv23
and
was
highest on record in the postwar ing very serious consideration folsoon
recog- Period. Furthermore, shipments to
lowing the recent discussions " of
n | z e jj
£S
arl
this country registered a new President Truman and Prime Min-

Rippel

panies

during the

'V.'

•
-

Public
>

presented at the stockholders' meeting.
It is of interest at this
point because it is a reflection, in
the operating conditions which have been
present

firm
years,

authority in his field, being

An accurate report of the

the estimated results for 1950

bold

tirement.

the idea of

security sales of

own

and

included in the per

profit

Jer-

conducted

his'

They amounted to approximately $271,000 after
appropriate tax provisions and were added to undivided profits.
$17,000

New

for

reported for the year 1949.
sales of securities

sey,

in this country. At that time
also,
made of the results to be expected from the cur¬

financing

Mr. Baker estimates 1950 earnings of the Bank of the
Company at $2.42 a share as compared with the $2.10

The profits
share estimate.

Canada's

exchange becomes increasingly cially when consideration is given
evident in the light of current de- to rearmament requirements,

and

On the basis of operating
earnings realized in the first nine
months and expected results for the last three months of the cur¬
rent year,

experiment in the field of foreign

operations.

Manhattan

wisdom

irT'ba'nki

Baker, com¬
they affect monetary,

By WILLIAM J. McKAY
The

leading figure

banking and political conditions
rent

Canadian Securities

Rippel, President of J. S.
Rippel & Co., Newark, N. J., died
at his home Dec. 9 at the
age of
82.
Mr. Rippel, who had been a

JOHNSON

As provided in its
original charter, the annual meeting of this
institution is held the first
Tuesday in December as against the
January meetings of other banks. The 152nd annual meeting of

J. S.

Bank and Insurance Stocks
By

(2369)

The Commercial and Financial Chronicle...

(2370)

The following

Indications of Current

latest week

Business Activity

week

statistical tabulations
month available.

month ended

Latest

AMERICAN

IRON

Indicated

steel

AND

STEEL

operations

(percent

capacity)

Dec. 17

Month

Week

Ago

ingots

and

castings

tons)

(net

Dec. 17

101.3

100.5

1,938,400

1,953,800

Crude

PETROLEUM

oil

output

gallons each)
Crude

Gasoline

output

—

daily

(bbls.

average

(bbls.)

average

5,825,220

Dec.

116,034,000

6,117,000

5,329,000

20,156,000

18,128,000
2,209,000

19,917,000
2,781,000

19,847,000

2,386,000

2,309,000

Dec.

8,613,000

8,591,000

8,747,000

8,521,000

8,470,000

8,454,000

8,342,000

109,509,000

106,424,000
28,291,000

104,350,000

105,264,000

29,115,000

25,151,000

86,768,000
45,566,000

86,886,000

89,448,000

44,689,000

66,271,000

Residual

fuel

oil

Stocks

oil

(bbls.)

output

Residual

fuel

oil

(bbls.)

26,291,000

84,891,000

Dec.

45,221,000

AMERICAN

freight

loaded

(number

cars)

Slab

zinc

2,000

Stocks

ENGINEERING

CONSTRUCTION

ENGINEERING

—

701,421

862,184

693,923

722,248

597,631

(U.

Dec.

$484,875,000
110,105,000

Dec.

374,770,000

Dec.

BUREAU

$260,346,000

$101,916,000

$302,115,000

39,831,000
62,085,000

78,490,000
223,625,000

109,488,000

127,681,000
132,665,000
101,250,000

Pennsylvania
Beehive coke

(tons)

52,924,000

52,942,000

265,282,000

31,415,000

9,161,000

170,683,000

Dec.

SALES

INDEX—FEDERAL

RESERVE

output

00o

items

9,050,000

11,410,000

9,548,000

847,000

692,000

587,000

1,018,000

79,600

*132,400

152,400

11,300

Dec.

AND

INDUSTRIAL)

—

DUN

444

319

315

6,908,631

6,716,273

6,574,084

170

4.131c

135

3.837c

Dec.

191

$51.94

$49.69

$40.75

Lead

3.837c

Crude

24.200c

24.425c

146.000c

151.000c

81.000c

17.000c

12.000c

Dec.

16.800c

11.800c

Dec.

17.500c

17.000c

9.750c

BOND

PRICES DAILY

Government

Average

corporate

Dec. 12

Dec.

101.33

101.34

115.43

115.24

101.54

Public

Utilities

Group—

Industrials Group

119.82

121.25
119.61

114.66

114.85

115.04

109.24

109.06

107.27

111.62

111.44

115.63

115.82

117.20

119.00

119.20

119.82

111.62

110.15

2<M»

BOND

YIELD

DAILY

Bonds

Public

Utilities

Group

Industrials Group

MOODY'S

Orders

received

Production

INDEX

(tons)

DRUG

Dollar

2.86

480.4

PRICE

101

100

102

722,046

671,985

774,891

429,785

138.4

123.1

AND

SPECIALISTS

EXCHANGE

(customers'

ACCOUNT
THE

140.6

total

Zinc

AVERAGE

sales

Nov. 25

Nov!

Nov. 25

27,555

855,784
$36,194,964

31,998

35,054

935,447

1,058,610

$41,324,077

$44,640,123

29,994

31,053

36,060

348

276

203

29,716

30,705

35,784

892,102

914,278

1,044,301

10,965

Nov!

13,046

10,451

881,137

22,233
613,731
7,829

901,232

1,033,850

$34,602,286

$36,312,668

$40,534,080

$21,968,358

(E.

295,630

279,210

326,910

244,110

Nov. 25

—

sales

Nov. 25

Other sales

Nov. 25

295,630

27~9~210

326,910

244,116

Nov. 25

Round-lot purchases by dealers—
Number of shares

276,170

366,980

347,990

180,340

DEPT.

All

Dec.

185.7

170.0

London

lighting

and

metal

"Revised

allied

figure,

186.5

173.6

180.0

178.2

(pence

barrels

foreign

per

ounce)

12.3260

75.060c

73.250c

70.000d

65.182d

64.000d

$2.80000

—

$2.80000

$2.79750

17.500c

9.750c

-137.217c

113.420c

91.1'Jlc

136.217c

mill

(per pound)

(E.

112.420c

90.191c

$35,000

J.)

$35,000

$99,348

$89,520

$71,870

35.280c

32.000c

32.500c

Nominal

Spot
(per ounce)——1__„

Nominal

$95,200

$69,000

$2.40000

$2.00000

$2.52500

$2,07500

$2.65000

$2.15000

$1.80000

19.000c

17.000c

24.500c

24.500":

20.500c

48.000c

40.000c

$925,383,234

$872,032,232

635,020,694

(per

$90,000
$2.40000

$2.65000

pound)

600,697,481

pound),

.„

—

"Nickel

RAILROAD

EARNINGS

(ASSOCIATION
Month

CLASS

—

AMERICAN

ROADS

RRS.)—

October:

operating

revenues-

Total
operating expenses
Operating ratio-per cent

Taxes

68.62%

521,127,075
80.27%

$133,245,141

$65,599,160

134,629,278

122,622,393

46,667,317

108,000,000

99,000,000

22,000,000

$257,100,124

$256,958,761

$257,011,323

Net

railway operating income before charges
Net income after charges
(est.)—
UNITED

$649,246,400

68.88%

$139,032,238

—

STATES

Nov.

GROSS

DEBT

fund

DIRECT

AND

emitted):

——

balance

4,139,297

debt

Computed
ZINC

4,145,258

4,421,935

$252,960,827

—

annual

OXIDE

243.1

237.6

209.1

Production

163.4

"162.8

162.2

145.2

Shipments

166.4

166.2

164.4

138.5

134.8

135.4

135.3

130.1

183.3

180.6

220.7

*219.1

136.7

136.6

runs.

Stocks

$252,813,503

$252,589,393

;

180.6

167.1

the

(short

—

Month

end

218.2

189.9

tons

133.7

115.7

Colburne,

2.201%

2.222%

month

figure.

20,576

but less than

18,949

19,672
(short

tEased

tons):
the

carload

§Based

lot packed

N. S., U. S. duty included.
including stock of American

§§Tin
Tel

quotation.
cn

platers'

contained.

15,658

9,354
{Based

quotations.

in cases, f.o.b. New York.

Tel.

10,431

21,170

10.258

producers'

quotations.

•

tons)—
tons)

producers' and platers'
or

2.204%

MINES)

(short

"Revised

till Not

rate

(BUREAU

October:

245.5

Dec.

crude

15.840c

80.000c

Straits—

York, 99%

Dec.

551,000

p.Wc

pound)—

Dec.

18.290c

3K04nc

ounce)

(per

156.4

24.425c

161.3

225.5

Dec.

products

172.6

222.1

Dec.

materials

products

flncludes

172.6

225.5

18.062c

24 425c

(Check)
pound)—East St
Louis—

Dec.

Building Materials
Chemical and

154.3

175.0

24.200c

„

Exchange

Dec.

All commodities other than farm and
foods
Textile products

and

181.3

3.00
6.62

16.800c

(per

pound)—.

Net

$.61

3.22

24.200c

refinery,—:

(per

151.2

Dec.

Meats

Fuel

171.7

187.5

Dec.

—

Foods

Metals

172.6

Dec.

Grains

Livestock
*

Dec!

products

4.63

6.49

Sterling Exchange—

York

General

commodities

Farm

5.64

pound)—

(per

8.11

QUOTATIONS)—

(per pound), Chinese

LABOR—

g.sg

6.39
6.02

November:

refinery.;

GUARANTEED— (000's

1926=100:

g 75

17.000c

New York

(per

Total

339

3.43

(per pound), bulk,. Laredo
(per pound), in cases, Lareod

605,900

713

4.61

Cobalt, 97%
Aluminum, 99% plus, ingot (per pound)
Magneisum, ingot (per pound).:
*

.277

6.80

SCadmium

22,436

278

(200>_?—

JCaamium

$23,143,575

Nov

SERIES—U.

6.86

{Cadmium

579,308

*309

Nov.:

Gold
(per ounce U. S. price)
Quicksilver iper flask of 76 pounds)

19,299

Nov!

total sales

value

NEW

*292.

352

—

Nov. 25

sales

PRICES

YIELD

Antimony

sales

WHOLESALE

288
„

(10)—

and

New

16,127,000

variation.——

export

Tin

9,945,000

RE¬

Average=l00)

STOCKS —Month

Platinum, refined

Round-lot sales by dealers—
Number of shares—Total sales

9,804,000

(FEDERAL

Antimony

Nov. 25

short
other

bales——

6.10

yield

HAntimony
Antimony

Nov. 25

sales

Customers'

;

201,766

COMMISSION:

short sales

Customers'

Short

purchases)—

_•

Number of shares—Customers'

Dollar

13,975,840

(24)

Sterling

ODD-

Nov. 25

other

259,736

STOCK

(customers' sales)—
orders—Customers' total sales—

Customers'

321,394

INDEX—1926-36
142.4

164,464

8,790,417

—

DEPT.

(125)—'——

(per

Silver

58,748

prior to

Common, New York
Common, St. Louis

346.0

295,064

Odd-lot purchases by dealers
Customers'

;

232,728

236,142

108,192

period

adjustment———

domestic

Lead

Dec.

SALES

seasonal

PRICES

§ § New

REPORTER

sliaies—Customers'

486.3

228,706

86,882

119,529

(25)

Silver,
Silver,
181,234

COMMERCE):

—

gross

Electrolytic

2.66

487.1

111,842

56,945

end

Electrolytic

2.79

2.69

69,052

121,806

pounds)

Average for Month of
Copper (per pound)—

3.16

2.87

2.70

va'ue

Number

3.08

2.87

2.70

Dec.

Odd-lot sales by dealers
Number of orders
of

3.09

Dec.

EXCHANGE—SECURITIES

Number

3.08

Dec.

STOCK TRANSACTIONS FOR THE ODD-LOT
DEALERS

3.32

.Dec.

AVERAGE=100

LOT

3.22

___Dec.

Percentage of activity
(tons) at
AND

3.22

Dec. 12

(tons)

PAINT

3.21

METAL

ASSOCIATION:

Unfilled orders

OIL,

2.90

Dec. 12

PAPERBOARD

stocks

(DEPT.

WEIGHTED

Average

2.67

2.91

Dec. 12

COMMODITY

NATIONAL

2.59

2.72

2.92

Dec. 12

Group

2.66

2.72

2.92

Dec. 12

Railroad

2.68

2.73

Dec. 12

Baa

2.67

Dec. 12

■

2.87

*86,678

91,299
110,435

November:

for

Insurance

2.19

2.88

Dec. 12

2.38

2.89

155.2

145.6

(15)—

"■

2.40

2.88

Railroad

185.2

158.8

183.3
/

October:

pounds)——

of 2,000

STORE

COMMON

Banks
>

2.40

Dec. 12

Aaa

UT'

W .*

Dec. 12
„„

195.4

159.5

Month

2,000 pounds)—

(tons

500-lb.

Industrials

AVERAGES:
XL.

Government

Average corporate

97.0

196.5

148.0

199.8

2,000

seasonal

MOODY'S
,

lzi.5

138.4

199.4

SYSTEM— (1935-39

Without

115.43

177.5
-

——

Adjusted

118.60

fliUulitics
MOODY'8

copner

Month

119.41

118.60

Dec. 12

Group

115.63

119.61
118.40

Dec. 12

—

97.0

144.5

186.8

customers—

SERVE

104.23

Dec. 12

—.

141.8

__———

AGRICULTURE—As

Dec. 12

Baa

Railroad

143.1

.____

—

PRODUCTION

Dec. 12

■———

refrigerators

COTTON

Dec. 12

—.———«,

124.8

96.8

and

GINNING

Dec. 12

Aaa
Aa

193.4

187.5
190.5

electricity

DEPARTMENT
Dec. 12

213.8

159.0

186.3

Running bales (exclusive of linters)

AVERAGES:

Bonds

336.7

125.0

Production

MOODY'S

227.8

.194.5

154.6

sweets

(tons

U. S.

COTTON

18.425c

142.000c

Dec.

6
6

186.7

193.0
184.6

343.9

———

oils

(tons

Refined

18.200c

235.1

185.2

187.0

(tons Of 2,000 pounds)

24.200c

169.4

257.8

207.2

fuels

Refined

20O.6

176.5

190.6

Copper production in U. S. A.—

3.705c

168.5

203.5

3 77.1

___

173.8

209.C

products.—

furnishings

$45.88

Dec.

„

Louis)

174,8

bakery

INSTITUTE—For

$27.92

Dec.

—

York) at
Louis) at

(St.

(East St.

15:

150.3

House

(New

Lead

Zinc

Oct.

vegetables—

and

$49.69

41,754,000

CITIES

250.S

and

Dec.

York)

327,128,000

MODERATE

LARGE

368,882,000

392,592,000

FOR

—

electricity

$41.67

J, QUOTATIONS):

refinery at
refinery at
(New

$589,224,000
312,227,000
276,997,000
235,223,000
41,774,000

590,648,000

Ice

160

.Dec.

Domestic
tin

$959,530,000

518,944,000
433,102,000

—

Fuel,

5,881,360

Electrolytic copper—

Straits

$1,012,046,000

and

Deliveries

Export

29,166

65,055

EN¬

—

Month

—

]

INDEX

100

and

Other

Dec.

64,436

—,

Fats

449

COPPER

(per lb.)

60,799

(tons)_.

CONSTRUCTION

products

Eggs

BRAD-

Dec.

(E.

period

_______

Dairy

COMPOSITE PRICES:

PRICES

89,019

Meats—-

Rent

Pig iron (per gross ton)
Scrap steel (per gross ton)

METAL

73,702

9,108

Clothing—,.

INC. '

Finished steel

NEWS-RECORD

Miscellaneous

IRON AGE

81,156

9,255

Beverages—,
Dec.

kwh.)

(COMMERCIAL

STREET

79,997

79,079

foods

Gas

FAILURES

(tons of

(tons)

FAMILIES

1935-1939

INSTITUTE:

(in

tt4,940,000

municipal

INCOME

SYS¬

AVERAGE=100

ELECTRIC

Electric

185,104;000

1,316,000

100,510,000

Sugar
EDISON

215,742,000

16,320,000

end

PRICE

Cereals

9,400,000

Dec.

STORE

TEM—1935-30

201,547,000

(bbls.)

construction

and

Fruits

DEPARTMENT

7,460,000

Federal

All

lignite (tons)
anthracite (tons)

10,476,000

construction

CONSUMER

MINES):

and

coal

11,228,000

10,005,000

construction

State

All

Bituminous

Private

NEWS-

municipal

OUTPUT

15,539,000

October:

Federal

COAL

11,000

15,760,000

period

GINEERING

642,159

construction

and

13,259,000

7,000

ENGINEERING

739,922

construction

State

orders

595,261

construction

Public

148,206,000

15,442,000

7,000

output, all grades

Dec.

Private

175,594,000

15,459,000

79,226

end

Public

176,633,000

—_.s.

(bbls.)

(tons of 2,000 lbs.)

RECORD:
Total

(bbls.)

smelter

Dec.

cars)

Total
CIVIL

161.476,000

lbs.)

——Dec.

—

(number

191,043,000

gal¬

Shipments

CIVIL

freight received from connections

output

(bbls.)

RAILROADS:

Revenue
Revenue

oil

Increase—all stocks

.Unfilled

ASSOCIATION

AMERICAN ZINC INSTITUTE, INC.—Month
November:0

Gas, oil, and distillate fuel oil (bbls.) at

products imports (bbls.)
Indicated consumption—domestic and
export

6,766,000

output (bbls.)J
Dec.
refineries, at bulk terminals, in transit and in pipe lines—
Finished and unfinished gasoline
(bbls.) at
Dec.
Kerosene
(bbls.)
at
Dec.

(bbls.)
distillate fuel

Ago

(bbls.)

Crude oil imports

Dec.

and

(bbls.

Refined

5,896,450

Dec.

output

oil,

crude

output

5,105,950

5,887,870
6,238,000

Year

Month

production

gasoline

Benzol

—Dec.

i-,——

INSTITUTE—Month

each)

Domestic

(bbls.)

Kerosene

Gas,

domestic

Natural

daily

——

stills

runs

—

Latest

192,102,000

PETROLEUM

lons

INSTITUTE:

condensate

ana

of that date:

September:

Total

1,734,700

1,980,800

are as

Month

AMERICAN

94.1

102.7

either for the

are

■

AMERICAN

of quotations,

cases

Ago

Equivalent to—
Steel

or,

Year

Week

INSTITUTE:

production and other figures for the

cover

Dates shown in first column

that date,

Thursday, December 14, 1950

{{Decrease—All

10,768

the

average

IIDoinestic, five
""F.O.B.

stocks

Port

(bbls.).

Volume 172

Number 4968

The Commercial and

Financial

Chronicle

(2371)

Securities Now in Registration

•

INDICATES

ADDITIONS

SINCE PREVIOUS ISSUE

•

Aerated Products Rochester
Co., Inc.
Dec. 5 (letter of
notification) 500 shares of common

(no par) to be offered present stockholders.
share.

per

Underwriter

None.

—

Price—$10

Proceeds

equipment and expansion program.
Avenue, Rochester, N. Y.

Corp., New York. Proceeds—To four selling
stockholders.
Offering—Expected after Jan. 1, 1951.

stock

For

—

•

new

Dec.

Office—1009 Joseph

Aerated Products
Syracuse Co., Inc.
notification) 500 shares of common stock
(no par) to be offered to present stockholders.
Price—
share.

equipment
Court

Underwriter—None.

and

expansion

Proceeds—For
Office—3721

Aeronca

Mfg. Corp.,

Oct. 2

New

writers:

Nov.

Gold

Mines

$1).

Price—At

Hollywood,

market

(about

common

$1.12Y2

116,662 shares of

Ohio Power
of

(letter of notification) 20,000 shares of common
(no par) and 4,000 shares of 7% non-cumulative
preferred stock (par $10).
Price — $12.50 per share.
stock

stock

common

Ohio

share.

common

stock

for each

•

Ampal-American Palestine Trading
Corp., N. Y.
sinking fund bonds,
Underwriter—None. Proceeds—To
develop and expand agricultural, industrial and commer¬
Dec/8 filed $5,000,000 of
15-year 4%
series A, due 1966.

cial enterprises in Israel.
•

To be added to general funds.
erative wholesale
purchasing

Dec. 11

refunding
exchange for

mortgage 4J/2% bonds, to be issued in
$60,000 outstanding first refunding
mortgage 5V2 % gold
bonds due May 1, 1951.
Price—To be issued in units
of $500 each.
Underwriter—None.
Atlantic
Nov.

of capital
Price—At par ($5 per share).
Underwriter—Con¬
tinental Corp., Tulsa, Okla.
Proceeds—To purchase oil

stock.

and

due 1965 (convertible into

common stock on basis of 200
shares for each $1,000 of
debentures). Price—To be filed
by amendment. Underwriter—H. M. Byllesby &

Proceeds

expenses and for

Co., Inc.,

—

For drilling

working capital.

and

development

Statement withdrawn

Dec. 4.

Fire

10,000 shares of

offered

common

present common stockholders.
Price—At par ($10 per share).
Underwriter—None. Pro¬
ceeds—To enlarge insurance business.
Office—221 No.
21st

St., Birmingham, Ala.

•

Brass & Copper Sales
Co., St. Louis, Mo.
Dec. 4 (letter of
notification) 1,559 shares of

Engineering Co., Carrizozo, N. M.
notification) 490,000 shares of common
Price—At par (50 cents per share). Underwriter
—None. Proceeds—For
working capital. Address—P. O.

rate

(par $10) to be offered to
of

$37.50

one

share.

per

working capital.
3, Missouri.
1

Central

Nov.

one

common

stockholders at

each eight shares held.
Price—
Underwriter—None.
Proceeds—For

Office—2817 Laclede Avenue, St. Louis

Illinois

13 filed

Public

Service

267,600 shares of

Corp.

common

stock

(par $10)

offered

•

initially to common stockholders at rate
share for each 10 shares held. Price—To
be sup¬

Soya Co., Inc., Fort Wayne, Ind.
of notification) 1,600 shares of
capital

(letter

(no par).

Price—To be offered at market
(approx¬

imately $36 per share). Underwriter—Swift, Henke &
Co., Chicago, 111.
Proceeds—To Harold W.
McMillen,
the selling stockholder.
*

Chattanooga Gas Co. (12/15)
Nov. 24 filed 650,000 shares of common stock

ization.

utility company pursuant to plan of recapital¬
Price—To be supplied by amendment.
Under¬

writer—Clement A. Evans & Co.,
Atlanta, Ga.
Circle Wire & Cable
Corp.
Nov. 27 filed 200,000 shares of common

Price—$15

per

share.

stock

Underwriter—Van

secure

Manufacturing Co.
(letter of notification) 12,000

•

Corp.,

filed

Proceeds—For investments.

Curtis

Dec.

Price—At

the

(par $5).
Alstyne Noel

500

common

market

Underwriter—Hecker
Proceeds—To Cary W. Bok,

(approximately $8.25 per
& Co.,
Philadelphia, Pa.
Vice-President, the selling

stockholder.

Dansker

Realty & Securities Corp., N. Y. City
20. filed 300,000 shares of 6% cumulative convertible

preferred stock
common

stock

(par $5) and 300,000 shares of class B
(par 35 cents) to be offered in units of

one preferred and one class B share
"on a best-efforts
basis." An additional 25,000 shares of each
class of stock
are to be issued to underwriters as
additional compensa¬
tion for resale to public. There will be
reserved for con¬
version of the preferred stock 1,300,000 shares of class B

common

Co.,

Inc.,

Dayton,

Ohio

supplied
by amendment. Underwriter—Lee
Higginson Corp., New
Proceeds—For payment of notes and for
general
funds.
Offering—Expected today (Dec. 14).
York.

•

Eastern

Dec.

Corp., Bangor, Me.
notification) 2,500 shares of

(letter of

common

stock

(par $10).
Price—At about market ($20.50
per
share).
Proceeds—To Central National
Corp. of New
York, the selling stockholder.
•

Dec.

Paso

12, it

Electric Co.

announced the company has
applied to
authority to issue and sell $4,500,000 of first
mortgage bonds due Dec. 1, 1980. Underwriters—To be
determined by competitive
bidding. Probable bidders:
Halsey, Stuart & Co. Inc.; Stone & Webster Securities
Corp.; Merrill Lynch, Pierce, Fenner and
Beane; Salo¬
mon Bros. &
Hutzler; Kidder, Peabody & Co.; Equitable
Securities Corp.
Proceeds—To redeem $1,000,000 of
31/2% bonds due 1978 and for construction
was

the FPC for

program.

Eureka

Telephone Co., Corydon, Ind.
(letter of notification) 1,700 shares of

Nov. 27

common

be offered to company's
telephone subscribers.
Price—At par ($25 per share).
Underwriter—None. Pro¬
ceeds—For cash equity to secure loan allocation
by Rural

Electrification

Administration.

Fedders-Quigan Corp.
June 21 filed 103,402 shares of series A
cumulative convertible preferred stock (par $50) to be offered
to com¬
mon stockholders
on
basis of one preferred share for
each 12 shares held.

Price—To be filed by
amendment,
along with dividend rate. Underwriter—Smith,
Barney
& Co., New York. Proceeds—To
pay promissory note,
to complete purchase of a new
plant at El Monte, Calif.,
and for additional
working capital. Statement may be

withdrawn.
It was reported on Oct. 5 that
has completed purchase of El Monte
plant.

company

Co., Boston, Mass.
(letter of notification) 1,750 shares of common
stock (par $10).
Price — At market (estimated at not
more than $10 per
share). Underwriter —H. C. Wainwright & Co., Boston, Mass. Proceeds—To two
selling
Nov.

stockholders.
Fluor

Office—210 South St., Boston, Mass.

Corp., Ltd., Los Angeles, Calif.

Nov. 24 filed

100,000 shares of capital stock (par $2.50).
by amendment. Underwriter—
Co., Los Angeles, Calif. Proceeds—To
trustees of two employees' benefit funds
established by
To

—

be supplied

William R. Staats

the company.

Offering—Expected today (Dec. 14).
Racing Corp., Providence, R. I.
Dec. 6 (letter of
notification) 12,000 shares of common
stock and 10,000 shares of
preferred stock. Price—For
•

General

common, $2

per share and for preferred, $10 per share.
Underwriter—None.
Proceeds—For operating

stables,
buying, selling, trading, etc. in racing horses. • Office—
818 Industrial Trust
Building, Providence, R. I.
Greenwich Gas Co., Greenwich, Conn.
(letter of notification) 8,000 shares of $1.50 pre¬
ferred stock (no par) and 9,777 shares of common stock
(no par), to be offered first to stockholders. Price—Of

preferred, $25 per share, and common $10 per share.
Underwriter—F. L. Putnam & Co., Boston. Mass. Pro¬
ceeds—To

Daily Reporter, Inc., Tuscon, Ariz.
Nov. 22 (letter of
notification) 1,500 shares of preferred
stock.
Price—At par ($100 per share). Underwriter—
None. Proceeds—For equipment and
operating expenses.
Nov.

Duriron

Nov. 22 filed 40,000 shares of cumulative
preferred stock
(par $25), with common stock purchase
warrants at¬
tached for 40,000 shares of common
stock, exercisable at
$16 per share through Dec. 1, 1960. Price—To be

Sept. 1

Publishing Co.
(letter of notification)

working capital.

Price

of which

writer—None.

City, N. J. Proceeds—To pay
balance of purchase
price for building ($20,000) and for

Chicago, III.
132,182 shares of common stock (par $5),
4,818 shares are to be offered to stockholders
and 127,364 shares to public. Price — To
stockholders at
$5 per share and to public at $6.25 per share. Under¬
Oct.

stock. Price—$6 per unit. Underwriter—Dansker
Co., Inc., New York. Proceeds
For working
—

capital./Offering—Expected after
Dow Chemical
10 filed

Co.

retire bank loan and for
working capital.
Financing Postponed—On Dec. 1 company stated a new
financing plan is being prepared and will be submitted
to stockholders.

Hamilton
Oct.

stock

Fire

Insurance

Co.,

Philadelphia

(letter of notification) 64,000 shares of capital
(par $5). Price—$4.50 per share. Underwriter—

Jenks, Kirkland & Co., Philadelphia, Pa.

Proceeds—To

increase capital and surplus in order to offer additional
lines

liability

insurance,
coverage.

Hammond
Nov.

stock

(par $20).

including automobile casualty
Financing may be abandoned.

and

Lumber

Co., San Francisco, Calif.
notification) 7,000 shares of capital
Price—$42.50 per share. Underwriter—

(letter of

None. Proceeds
For working capital.
Montgomery St., San Francisco, Calif.
—

Continued

the first of the year.

Office

417

—

page

100

(1/3/51)

200,000 shares of

common

of which

stock

(par $15),

a maximum of
125,000 shares will be offered to
stockholders of record Dec. 21, 1950 at rate of 1
share for each 50 shares
held, the remaining 75,000 shares
to be offered for
subscription by employees up to 10% of
their annual wages on a
payroll deduction plan. Both
offerings will terminate on Jan. 29, 1951 and are

common

(par $1).

including 500.000 shares acquired by Equitable Securities
Corp. from Southern Natural Gas Co., and 150,000 shares
from the

com¬

Business—A non-profit
Dallas Chamber^of
construction of hotel.

sponsorship

preferred stock.
Price—At par
($25 per
share). Underwriter—Heimerdinger & Straus, New York.
Proceeds—For working capital. Office—6th and Jeffer¬
son
Streets, Camden, N. J.
\

Nov.

Proceeds—To pur¬

Co., Inc., which

Courtland

Dec.

•

Dec.

under

Commerce to

Bros.

stock

Underwriter—None.

pany will construct Dallas hotel.

corporation

com¬

Under¬

Felters

Cosmopolitan Hotel Co. of Dallas, Tex.
jpec. 13 filed $1,500,000 of 2% debentures due 1965. Price

bfy amendment. Underwriters—The First Boston
Corp. and Blyth & Co., Inc. Proceeds—For construction
program. Temporarily postponed.

plied

Central

Carrizozo, N. M.

•

common

stock

100.

stock.

share.

Insurance Co.

(letter of notification)

Oct. 17
stock

(Ala.)

coop¬
feder¬

Continental

stock.

Birmingham

Proceeds—

Nov. 29 (letter of

Culver

gas properties.

Big West Oil & Gas Co., Dallas, Tex.
Sept 5 filed $1,760,000 of 5% sinking fund debentures

Chicago, 111.

Kansas

association of the
type. Price—At 100 issuable in multiples of
Statement effective Dec. 7.

Box 56,

stock (par 10c). Price—75 cents
per share.
writer—Olds & Co., Jersey

stock to

cumulative

Oil

Corp., Tulsa, Okla.
(letter of notification) 48,046 shares

capital.

Business—Farmers'

chase debentures of Statler Dallas

Water Co., Annville, Pa.
(letter of notification) $60,000 of first

working

ated

—At face value.

Annville

For

Underwriter—None.

(par $1),

stockholders of record Nov. 29 at the
rate of one share for each 20
shares owned; rights expire
4 p.m.
(EST) Dec. 14. Price—$17.50 per share. Under¬

stock and for general
corporate purposes. Statement ef¬
fective Nov. 30.

—

of indebtedness to be offered to
members of the Associa¬
tion and "to others."

common

writers—Kidder, Peabody & Co., Alex. Brown & Sons
and Glore, Forgan & Co.
Proceed—To retire preferred

Proceeds

Nov. 14 filed $1,000,000 of
5-year 3J/2% certificates of
indebtedness and $2,000,000 of 10-year 4V2% certificates

Central

offered

None.

Consumers Cooperative
Association,
City, Mo.

Underwriter—None.

American Investment Co. of Illinois
Nov. 10 filed 97,121 shares of common
stock

—

Office—2340 Eighth Ave., New York
27, N. Y.

(par $10),

exchange for common stock of Central
Light Co. on the basis of 72/100ths of a

American Gas

Proceeds—To reduce bank

Nov. 15

Underwriter

offered in

Acceptance Corp.

Community Finance Corp., N. Y. City

per

American Gas & Electric Co.
to be

Under¬

Commonwealth Edison Co.,
Chicago, III.
Dec. 13 filed $49,000,000 of
sinking fund debentures due
April 1, 2001. Underwriters—To be determined
by com¬
petitive bidding. Probable bidders:
Halsey, Stuart &
Co. Inc.; The First Boston
Corp.; Glore, Forgan & Co.;
Morgan Stanley & Co. Proceeds—Toward cost of
$370,000,000 four-year construction program.

Calif.

share). Underwriter—Hemphill, Noyes,
Graham, Parsons
& Co., New York.
Proceeds—To Charles R.
Anthony,
Chairman of the Board, who is the
selling stockholder.
Nov. 9 filed

cumu¬

•

Corp.,

American Cladmetals Co.,
Carnegie, Pa.
19 (letter of
notification) 62,000 shares of

(par

will

loans.

Office—Municipal Air¬

filed

stock

Lynch, Pierce, Fenner & Beane.

Harris; both of Chicago, 111.

80,000 shares of common stock. Price—At
par ($1 per share).
Underwriter—None. Proceeds—For
further development of mine and for
working capital.
Oct.

Jan.

Nov. 20 filed $1,500,000
junior subordinated sinking fund
debentures due Dec. 1, 1958, and 30,000 shares of
com¬
mon stock
(par $1), to be offered in units of $500 of de¬
bentures and 10 shares of stock.
Price—$500 per unit.
Underwriters—Straus & Blosser; and Sills, Fairman &

(latter to be reserved for conversion of notes on basis of 1
share for each $1 unit of
notes). Price—$2.12^ per $1
unit of notes. Underwriter—Greene
& Ladd, Dayton, O.

Alhambra

Merrill

Colonial

Middietown, Ohio

(letter of notification) $50,000 of 4% convertible
promissory notes and 50,000 shares of common stock

Proceeds—For working capital.
port, Middietown, O.

announced stockholders

100,000 shares of unissued and unreserved
4J/2%
lative convertible preferred stock."
Probable

Road, Salina, East Syracuse, N. Y.

Duggan's Distillers Products Corp.
27
(letter of notification) 340,000 shares of

Oct.

mon

working capital," and "to provide for the conversion of

new

program.

was

Inc.

on
increasing the authorized common stock
(par
$1) from 1,500,000 to 2,000,000 shares the increase to
provide "substantial funds for capital additions and

Dec. 5 (letter of

per

12, it

Foods,

vote

•

$10

Clinton

made

amendment.

expected
Jan. 3, 1951. Price—To be supplied by
Underwriter—None. Proceeds—For work¬

ing capital.
Oct.

Drayer-Hanson, Inc., Los Angeles, Calif.

stock

(letter of notification)
offered to stockholders

255,033 shares of
on

common

rata basis; rights
expire Dec. 15, 1950. Price—At par (40 cents per share).
Underwriter—None. Proceeds^—To pay creditors' claims
and for working capital. Address—P.
O. Box 2215, Los
Angeles, Calif.
pro

New York

Boston

Philadelphia

Pittsburgh

San Francisco

Private IVires to all

offices

Chicago

Cleveland

Commercial and Financial Chronicle

The

100

(2372)

;

Continued
Hearn

from

purchase

Price—$67.50

Department Stores, Inc., N. Y. City
shares of 5% cumulative convertible

NEW ISSUE CALENDAR

Nov. 17 filed 40,000

preferred stock, to be offered for

expenses.

sfor

the basis of one preferred

December

Noon

Oil

___Equip. Trust Ctfs.
December

Corp.

Miles

temporary loans.
<*

Horseshoe

Mining & Development Co.
75,000 shares of common

Basin

Price—75 cents

ctock.

per

Street

Building,

Bremerton,

fitock to be initially offered to stockholders; unsubscribed
shares to public. Price—At par ($1 per share). Under¬
Proceeds—To finance the purchase of 100

coffee-roasting

machines.

1951

23,

Southern Natural Gas Co.-

.Bonds
__

Office—84

State

Hospital

Massachusetts

Life Insurance Co.,

notification) 2,300 units of beneficial in¬
Hospital Life Trust. Price—At net asset value,

terest of

Underwriter — None.

about $120 per unit.
Proceeds—For working capital.

currently

Co.,

Inc., Baltimore, Md.

(letter of notification) 1,000 shares of 5% cumu¬
preferred stock (par $100), 4,500 shares of non¬
voting common stock (no par) and 4,590 shares of voting
common stock (no par).
Price—The preferred at par and
the common
at
the market
(approximately $22 per

Price—To be
$2 per share less than the closing price on the New York
Stock Exchange on day agreement to purchase is con¬
summated (estimated price is $61.75 per share).
Pro¬
ceeds—For general corporate purposes.
Office—Jewel
(no par) to be offered to employees.

lative

Oct. 6 by amendment filed 120,000

shares of class A con¬
vertible common stock (par $1). Price—$5 per share.
(Underwriter—Sills, Fairman & Harris, Inc., Chicago, 111.
•Proceeds—To pay off promissory notes and for working
capital.
Corp., Washington, D. C.

ferred stock—plus in each

accrued and unpaid div¬
idends and redemption premiums, in cash. The remain¬
case

ing 33,050 shares are to be publicly offered. Price—$25
per share. Underwriter—Johnston, Lemon & Co., Wash¬
D. C.
Proceeds—For working capital
unexchanged old preferred stock.

ington,

and

Montgomery Street, San Francisco,
Mercantile

Lit

Nov.

Brothers, Philadelphia, Pa.
(letter of notification)
approximately

shares of

shall

which

stock

common

not

exceed

$100,000

at the

aggregate sales

Lorain Telephone Co.
5

(letter of notification)

2,830 shares of common
stockholders of record
Oct. 7 on a pro rata basis; rights expire Dec. 15. Price—
$20 per share. Underwriter—None. Proceeds—For work¬
ing capital. Office—203 9th St., Lorain, Ohio.

tftock (no par) offered to common

17 filed

83,000 shares of common stock (par $1).
Price
To be supplied by amendment. Underwriter—
Blunt Ellis & Simmons, Chicago, 111.
Proceeds—To the
—

executors of

.'Postponed.
Macy

the estate of Henry

C. Lytton.

Offering—

May be placed privately.
(R. H.)

(12/20)
'Dec. 1 filed 111,692 shares of common stock (no par).
Price—To be related to the existing market price at time
of offering. Underwriter—Lehman Brothers. Proceeds—
To selling stockholders.
«
& Co., Inc

1.500 shares of first pre¬

be offered to

employees

on an

instalment basis.

Price—

($20 per share). Proceeds—For general corporate
purposes.
Office—333 Montgomery St., San Francisco,
Calif.
'
/•■■ ■'.. ■■
At par

•

Meyenberg Milk

Products

Co., San Francisco,

California
4

Dec.
stock

notification) 9,710 shares of common
to common stockholders of record
per share. Underwriter—None. Pro¬

(letter of

offered

ceeds—To

purchase and operate new facilities.

•

Magnolia Lead & Oil Co., Salt Lake City, Utah.
6 (letter of notification) 300,000 shares of capital
stock.
Price—At par (10c per share).
Underwriter—
Cromer Brokerage Co., Salt Lake City.
Proceeds—To
Dec.

develop uranium oxide

ore

properties.

Office—328 Atlas

Bldg, Salt Lake City.
Mascot

Mines,

Inc., Kellogg, Ida.

Oct. 27

(letter of notification) 400,000 shares of capital
stock. Price—37V2 cents per share. Underwriter—Stand¬
ard Securities Corp., Spokane, Wash. Proceeds—To pur*

chase controlling

interest in Pine Creek Lead-Zinc Min¬

ing Co., for development costs and working capital.

of notification)

(letter

3,600 shares of class A

235 Montgomery

Street, San Francisco, Calif.

Feb. 9

common

one-for-five

basis.

stockholders at $50 per s'hare
Underwriter—Clark, Dodge &

Proceeds—To pay notes and for

Miles

Nov.

additional working

Indefinitely postponed.

capital.
20

Shoes,

filed

Price—To

New York City

Inc.,

(12/15)
(par $1).
Underwriter—

77,400 shares of common stock

supplied

amendment.

pictures on 16 mm. film
Office—714 West Olympic

two

vision.

for display on tele¬
Boulevard, Los An¬

geles 15, Calif.

Co., Chester, Pa.
of common stock (no par) to
to employees of the company under its "Em¬

filed 23,529 shares

be offered

ployees' Stock Purchase Plan for 1951." The company
anticipates a maximum of 5,000 memberships in the plan
under which any eligible employee may subscribe for
an amount up to but not exceeding
10% of his weekly
earnings.
Shattuck Denn Mining Corp.

•

(letter of notification) 597

Dec. 8

shares of capital stock

(par $5). Price—At the market (approximately $5 per
share). Underwriter—Harris, Upham & Co., New York,
Proceeds—For general corporate purposes.

Uranium

State

South

Mines Ltd., Toronto,

Canada

share).

capital stock. Price—At
Underwriter-Optionee—Robert Irwin

Martin of Toronto.

Proceeds—For commissions, explora¬

($1

par

filed

Nov.

Newark, N. J.
(letter of notification) 5,200 shares of common

Middlesex Water Co.,
stock offered

stock

preferred

Office—

per

560,000 shares of

tion and development expenses,

and working capital.

Keokuk, Iowa
Nov. 27 (letter of notification) $200 000 10-year 6% sub¬
ordinated instalment debenture bonds. Price—To be sold
in multiples of $100 plus accrued interest. Underwriter
—None. Proceeds—For corrugated machine.
South West

Box Co.,

Southeastern

Fla.

Telephone Co., Tallahassee,

10,000 shares of common
(par $10). Price—$11.25 per share. UnderwriterWagner, Reid & Ebinger, Louisville, Ky. Proceeds—For

Wertheim & Co. and Lehman Brothers. Proceeds—To two

Nov. 20

selling stockholders.

stock

Mission

Appliance Corp.,

Hawthorne, Calif.

July 24 filed 50,000 shares of 6% cumulative convertible
preferred stock. Price—At par ($20 per share). Under¬
writer—Lester & Co., Los Angeles, Calif. Proceeds—To
retire bank loans and install machinery and equipment
in

proposed new plant to be located east of the Rocky
Business—Manufacturer of gas and electric

Mountains.

water and space

heaters.

Evanston, III.
notification) 300,000 shares of common
(no par) to be sold to a group of 20 individuals.
Price—$1 per share. Underwriter—None. Proceeds—For
operating capital, and to complete purchase of tools, dies
and inventory from Kurtis-Kraft, Inc. Office—1000 Grey
Car Co.,

Nov, 29 (letter of
stock

Ave., Evanston, 111.
•

Nesco,
1

Dec.
stock

Inc., Milwaukee, Wis.

Price—To*

be $1

share less than the last sale price on the New York
Stock Exchange on day next preceding date of offering
or
of stockholders' meeting, at which plan of sale is

Proceeds—For additional

treasury funds so additional receivables and inventories
can be carried.
Office—270 No. 12th Street, Milwaukee,
Wis.
New

Southern

Discount Co., Atlanta, Ga.

Sept. 18 (letter of notification) $191,500 of 5% subordin¬
ated debentures, series E. Price—At par. Underwriter—
For

$100,000 of debentures,

Bedford Gas & Edison Light Co.

(letter of notification) 17,717 4/5 shares of com¬
mon
stock (par $25), being offered to stockholders of
record Oct. 20 on basis of one share for each 15 shares

Nov. 28

held; warrants evidence right to subscribe during period
Dec. 5 to Dec. 20. New England Gas and Electric Asso¬

Allen & Co., Lakeland, Fla.
working capi¬

Proceeds—To reduce bank loans and for

Bldg., Atlanta, Ga.

Ga.
shares of common
stock.
Price—At pan ($10 per share).
Underwriter—
None.
Proceeds—To purchase stock in Southern Fire &
Marine Insurance Co. and to reduce debt.
Office—79
Southern
2

Nov.

Insurance, Inc., Atlanta,

(letter of notification) 30,000

Ponce De Leon Ave.,

N. E., Atlanta, Ga.

Inc.
200,000 shares of capital
(par 10 cents). Price—25 cents per share. Under¬
writer—None. Proceeds—To complete construction of a
mill. Address—P. O. Box 545, Hailey, Idaho.
Sun

Dec.

(letter of notification) 30,000 shares of common
(par $5), to be offered for subscription by em¬

adopted, whichever is lower.

construction and improvement.

•

ployees and officers of the company.

(letter of notification)

tal. Office—220 Healey

per

Productions, Los Angeles, Calif.

Hood

Robin

•

Dec.

Price—$20

Nov. 24.

Muntz

Lytton's, Henry C. Lytton & Co.
Nov.

burgh 22, Pa.

Scott Paper

stock, 5% series, of which 1,000 shares are to be
offered as a bonus to employees only and 500 shares to

such number, more or less,

Price—Estimated at $13.25 per share. Underwriter
—None, but one or more of following brokers may be
employed: Newburger & Co.; Hallowell & Sulzberger;
Reynolds & Co.; and Elkins Morris & Co. Proceeds—To
Bankers Securities Corp., Philadelphia, Pa.

Oct.

notification) 25,000 shares of common
Price—$3 per share. UnderwriterSmith, Talbott & Sharpe, Pittsburgh, Pa.
Proceeds—
For purchase of additional machinery and equipment and
working capital.
Office—507 Liberty Avenue, Pitts¬

Dec.

Acceptance Corp. of California

(letter of notification)

Co.

7,500

'price.

Products Corp.

Ramie

Sept. 21 (letter of
stock
(par $1).

Calif.

ferred

on
n

of California

(letter of notification) 1,395 shares of first pre¬
stock, 5% series.
Price—At par ($20 per share).
Underwriter—Guardian Securities Corp. of San Fran¬
cisco.
Proceeds—For corporate purposes.
Office—333

Dec.

cumulative preferred
.stock (no par—with stated value of $22.50 per share),
with warrants attached entitling the holder to purchase
common stock at $12 per share in the ratio of two com¬
mon shares for each five preferred shares held
Of said
80,000 shares, 46,950 shares are to be offered in ex¬
change for outstanding 7% prior preferred stock (par
$50) and 6% participating preferred stock (par $25) on
the following basis: (1) For each 7% prior preferred
nhare two new preferred shares; and (2) For each 6%
participating preferred share one share of new pre¬

redeem

and Brown, Lisle & Marshall of Provi¬
Proceeds—To be added to general funds.

York,

New

dence, R. I.

duce

Street, Baltimore 2, Md.

•

Dec. 12 filed 80,000 shares of $1.50

X-

$52 per share. Underwriters—
and Wood, Struthers & Co., both

ferred

Md.

Mercantile Acceptance Corp.

Service

—

common

4 011 basis of one preferred
shares held; rights will ex¬

Oct. 5

Kaye-Halbert Corp.

Lincoln

being offered to

$10)

(par $5) and 3,600 shares of class B
common stock (par $1.25) to be offered in units of one
class A and one class B share, plus an additional 3,600
class B shares.
Price—$6.25 per unit, and $1.25 per
class B share.
Underwriter—None. Proceeds—To pro¬

share).

Park, Barrington, 111.

•

Underwriter—Alex. Brown & Sons, Baltimore,
Proceeds—For working capital. Office—414 Light

Price

19.

The First Boston Corp.
of

Boston, Mass.
Dec. 5 (letter of

McCormick

Co., Inc.
Ngv. 30 (letter of notification) 4,750 shares of common

(par

stock

preferred

Insurance Co.
of cumulative convertible

Washington

80,000

share for each five common

Nov. 22
Jewel Tea

•stock

filed

Nov.

stockholders of record Dec.

St., Boston, Mass.
•

25, Pa.

pire Dec.

(letter of notification) 207,000 shares of common

automatic

Common

Price—$15 per share. Proceeds—
Office—Neville Island, Pittsburgh

share).

working capital.

Providence

Infra Roast, Inc., Boston, Mass.

writer—None.

value $10 per
For

January

•

--jr.

1951

Proceeds—For working capital.

$3 per share.

Chemical

Wash.

Hub Loan Co., Jersey City, N. J.
•Sept. 18 (letter of notification) 100,000 shares of 18 cents
cumulative convertible preferred stock (par $2). Price—

Nov. 3

Common

January 3,
Dow

Pittsburgh-Des Moines Steel Co.
Dec. 5 (letter of notification) 20,000 shares of beneficial
interest in company's Employees' Trust Fund
(stated
•

___

Dec. 22. Price—$45 per share. Under¬
Proceeds—For improvement and expan¬

plant facilities.

sion

1950

20,

expire

writer—None.

Bonds

(R. H.) & Co., Inc

Macy

Principal Underwrit¬

share.

Bremerton, Wash; H. F. Arnold of
Tacoma, Wash.; and Max McKinley of Spokane, Wash.
XJroceeds—For development and equipment. Office—245

will

1950

(EST)

Common

Honolulu Oil Corp.-

ers—R. O. Johnson of

4th

p.m.

December

(letter of notification)

19,

$10)

being offered to common stockholders of record Dec. 6
on basis of one share for each seven shares held; rights

___

December
Western Pacific RR.,

Pennsylvania Salt Manufacturing Co.
15 filed 124,879 shares of common stock (par

Nov.

1950
Common

Webster-Chicago Corp.

Proceeds—To retire

Omaha, Neb.

Common

18,

per

Minn.;

Faul,

______

December

Hooper Telephone Co., Hooper, Neb.
Aug. 18 (letter of notification) $30,000 of 3%% bonds
due 1970J Price—In excess of 102%.
Underwriter—
Wachob Bender Corp.,

Common

Shoes, Inc

Manufacturing Co.

Vitro

share). Underwriters—Kalman & Co., St.
Glore, Forgan & Co., Chicago, 111.; and
W.
R.
Olson Co., Fergus Falls, Minn.
Proceeds—To
Thomas C. and Cyrus G. Wright, executors of the will
of Grace Clark Wright (deceased).
;
y

$18.75
::

...Common

Chattanooga Gas Co.__

(12/20)
Dec. 1 filed 120,000 shares of capital stock to be offered
to present stockholders. Price—To be filed by amend¬
ment. Underwriter—Dean Witter & Co., San Francisco,
Calif. Proceeds—To selling stockholders.

Dec.

1950

15,

Falls, Minn.

(letter of notification) 4,990 shares of common
stock (par $5). Price—At approximately market (about
5

Dec.

(EST)

Power Co., Fergus

Otter Tail

•

1950

14,

Francisco Ry.

St. Louis-San

working capital.
Honolulu

—To

subscription by com¬

share for
each seven shares of common stock held. Price—At par
($25 per share). Underwriter—None. Proceeds — From
this offering, plus a $2,000,000 term bank loan, to be used
to repay bank loans, for improvements to properties and
stockholders

mon

97.37% of outstanding stock has agreed to
17,254.2 shares and all unsubscribed shares.
per share.
Underwriter—None. Proceeds
reimburse plant replacement fund for construction

ciation owning

page

Thursday, December 14, 1950

...

Valley Lead-Silver Mines,

(letter of notification)

stock

•

Sunshine Packing Corp.

of Pennsylvania

(letter of notification) 2,950 shares of 5% pre¬
ferred stock.- Price—At par ($100 per share).
Under¬
8

Dec.

writer—None.

Proceeds—For additional operating

capi¬

Office—Smedley Street, North East, Pa. BusinessProcesses and cans frozen fruits and fruit juices.

tal.

Engineering & Manufacturing Co., Inc.
notification) unspecified number of
shares of common stock (par $1) to amount to $100,000
at current market value.
Price—Estimated at $5 to $6
Texas

Nov.

per

(letter of

share.

Beer

Underwriter—None, but will be sold through

Co., Thomson & McKinnon, Dallas Rupe

& Son

Volume

172

Number 4968

The Commercial and

Financial

Chronicle

(2373)

and

Shearson, Hammill & Co., all of Dallas, Texas.

•

Pro¬

ceeds—To H. L. Howard and Robert McCulloch, officials
of the company.
Texas
Nov.

Illinois

Natural

Gas

the basis of one new share for each IV2 shares held.
(Peoples Gas Light & Coke Co., owner of approximately
51% of outstanding common stock, will subscribe for its
proportionate share of new stock, plus any other unsub¬
scribed shares.
Rights will expire on Dec. 28.
Price—
$10 per share.
Underwriters—Probably White, Weld &
on

Co.; A. C. Allyn & Co., Inc.; Bacon, Whipple & Co., et al.
finance proposed pipeline from Texas to
Chicago. Statement effective Dec. 8.
Proceeds—To

Vitro
4

stock

(par $1)

record

Dec.

to be offered to

basis of

one

common

stockholders of

common
new

Power

was

new

Light Co.

Co.

reported company plans issuance of
first mortgage bonds.
Underwriters

$15,-

(jointly); Union Securities Corp.; Kidder, Peabody
Co.; Coffin & Burr, Inc.
•

—

Mississippi River Fuel Corp., St. Louis, Mo.

named

Pipeline Co.

by competitive bidding, probable bidders are:
HalseY, Stuart & Co. Inc.; W. C. Langley & Co. and First
Boston Corp. (jointly);
Kidder, Peabody & Co. and Mer¬

300,000 shares of common stock (par $1),
to be offered to common stockholders of record Dec. 8

Dec.

000,000

20 filed

Manufacturing Co. (12/15)
(letter of notification) 30,000 shares of

Carolina

Dec.

rill

Lynch, Pierce, Fenner & Beane (jointly); Lehman
brothers; Equitable Securities Corp.; Smith, Barney &
Co. Proceeds—For construction
program. Bids—Expect¬
ed first week in February.
Carpenter Steel Co.
Oct.

stockholders

increase

the

The management has no
present plans to issue any
tional common stock.
Traditional underwriters:

addi¬
F.

Moseley & Co.; White, Weld & Co.; Hemphill, Noyes,
Graham, Parsons & Co., and H. M. Byllesby & Co., Inc.
Dec.

announced that plans to finance the instal¬
compressor units on the company's
pipeline system in Arkansas and Missouri will be supplued later. The estimated cost of the new facilities is

lation

was

of additional

$5,500,000.

Previous bond financing was arranged for
privately through Union Securities Corp., who also acted

underwriter for

authorized

stock, par $5, from 500,000 shares to 1,000,000
(there are presently 396,000 shares outstanding).

Chesapeake &

Oct. 4 it

stock issue in

common

April of this

year.

voted

common

for each 5.64

shares held; rights to expire Jan. 2. Price—$10 per share.
Underwriter—None. Proceeds—For initial working capi¬

Ohio

Ry.

Monarch

Dec.

Co.

plan

that

announced

was

increase

stockholders
the

will

authorized

basis. If any new financing,
will include F. Eberstadt &
Co.,

one

Dec.

Bids—Expected in January.

and manganese ores.

Dec.

Hawley,

Shepard

probable underwriters

Inc., of New York, and
Co., Inc., of Cleveland*

sale of

Chemicacl

Vitro

Co.,

Inc.,

subsidiary,

Office—60 Greenway Drive, Corliss

Station, Pittsburgh 4, Pa.
Vulcan

Extension,

Wallace,

Idaho
Nov. 27 (letter of notification) 250,000 shares of capital
stock (par 20 cents). Price—31 cents per share. Under¬
writer—J. A. Hogle & Co., Spokane, Wash. Proceeds—
For initial working capital for ore development. Address
—c/o H. J. Hull & Sons, Wallace, Idaho.
Webster-Chicago Corp.
Nov.

filed

common

Eberstadt &

Wei-Met

Kent, Ohio
Nov. 30 (letter of notification) 7,500 shares of common
stock
(par 5c).
Price—$10 per share.
Underwriter—
None. Proceeds—For working capital. Office—llOGougler Avenue, Kent, Ohio.

Co.,

Westerly
Dec.

(R. I.) Automatic Telephone Co.
(letter of notification) 7,000 shares of common

new

that corporation
securities

in the

may issue and
Spring or early

Probable bidders for debentures:

summer.

System, Inc.

reported

was

$35,000,000 of

Halsey, Stuart

Co.

Inc.; Morgan, Stanley & Co.; Kuhn, Loeb & Co.;
Salomon Bros.
&
Hutzler; Lehman Brothers; Merrill
Lynch, Pierce, Fenner & Beane and White, Weld & Co.
(jointly). Probable bidders for common stock, in event
of competitive bidding:
Morgan Stanley & Co.; Goldman,
& Co. and Union Securities
Corp. (jointly); Mer¬
Lynch, Pierce, Fenner & Beane; Lehman Brothers;
Shields & Co. and R. W. Pressprich & Co.
(jointly).
Proceeds will be used for expansion
program.

Consolidated Gas Electric Light & Power Co.
24

with

the

announced company plans to register
by the end of December a proposed of¬
fering of $25,000,000 new bonds. Underwriters
To be
was

SEC

—

determined

competitive

bidding.

Probable

bidders:

Halsey, Stuart & Co. Inc.; The First Boston Corp. and
White, Weld & Co. (jointly); Harriman Ripley & Co.
Inc. and Alex. Brown & Sons
(jointly); Kuhn, Loeb &
Co.

Bids—Expected to be invited during the latter part
of January.
,

stock

offered

stockholders, of

record

Dec.

9,
be subscribed for

1950, of which total 4,434 shares will

by New England Telephone & Telegraph Co. Price—At
par ($25 per share). Underwriter—None. Proceeds—For
general corporate purposes. Office—38 Main St., Wes¬

terly, Rhode Island.
+

Western

Casualty
Missouri

Dec. 5 (letter of

(par

$10).

Surety

Co.,

Kansas

City,

notification),5,000 shares of capital stock

Price—$50

Proceeds—For

per

working

share.

capital.

Underwriter—None.

Office—916

Walnut

Street, Kansas City, Mo.
<•

Western

Gold

Mines, Inc., Carson City, Nev.
Dec. 4 (letter of notification) 25,000 shares of common
stock (par 10c).
Price—$1.50 per share. Underwriter—
Ingalls & Snyder, New York. Proceeds—For develop¬
ment of

bodies in Golden Crown

ore

Mining Co. and for
Office—First National Bank Building,

working capital.
Carson

City, Nev.

Western

Light & Telephone Co., Inc.
Nov. 6 (letter of notification) 14,870 shares of common
stock (par $10), being offered to common stockholders
of record Dec. 4

scription privilege);

l-for-20 basis

(with

rights expire Dec.

19.

Price—$2C

share.
Underwriter—None, but Harris, Hall & Co.
(Inc.) and First Trust Co. of Lincoln, Neb., will act as
dealer-managers.
Proceeds—For construction program.
Oct.

filed

Price—To

Charlotte,

Mich.

Probable underwriters:

Gearhart, Kinnard & Otis, Inc., New York, N. Y., and
White & Co., St. Louis, Mo. Proceeds—To pay obligations
to all unsecured creditors.

about

l-for-8 basis.

Smith, Barney & Co.: Van Als-

tyne, Noel & Co.; Newhard, Cook & Co.

Registration—

Expected about Dec. 29.
Facsimile
Oct.

this

Inc.

(formerly

Telecommunications, Inc.) voted to create

Finch

authorized

(par
$1), all or part of which are to be publicly offered in the
near future.
Price—$2.50 per share. Underwriter—Gra¬
ham, Ross & Co., Inc., New York. Proceeds—To repay
indebtedness to RFC and for

working capital.

Carpet Co.

Nov. 30 it

announced stockholders will vote Dec.

was

creating an authorized issue of 30,000 shares of new
preferred stock (par $100), of which it is initially
planned to issue and sell 10,000 shares to provide addi¬
tional working capital.
Traditional underwriter: Rey¬
nolds & Co., New York.
on

Foote Mineral Co.

said it may sell during 1951 some addi¬
following proposed 200% stock dis¬
1, 1951.
Traditional underwriter:
Co., New York.

common

tribution

Estabrook

stock

March

Kansas-Nebraska

Natural

Gas

Co.

Nov.

24 company applied to the FPC for permission to
increase capacity from 146,000,000 cubic feet to 164,200,000 cubic feet daily at an estimated cost of $5,201,331,
,

be financed

by bonds, preferred and

Bonds may be placed

common

stocks.

privately through Central Republic

Co., Chicago.

Necessary

gas.

financing,

probably

about

$40,000,-

€00, likely to be 75% bonds and 25% stock, with com¬
mon

stock to

offered first to

stockholders.

Co., Chicago, and First Trust Co. of Lin¬

coln, Neb.

Algonquin Gas Transmission Co.
Nov. 8 the FPC said it was of the opinion that certain
of the New England markets should be served by this
company, upon showing that it has an adequate amount
of

Probable underwriters for the stocks

Cruttenden &

Prospective Offerings

Probable

underwriter: Dillon, Read & Co. Inc.

Lone

Star

Nov. 12, it was

additional
sent

are

Corp.
reported that company may issue and sell
should it receive government con¬

building of

plant. Probable under¬
writers: Straus & Blosser; Estabrook & Co., and Dallas
a

new

Rupee & Son.
Marion

Power

and

—

Langley & Co. and The First Boston Corp. (jointly);
Securities Corp.; Salomon Bros. & Hutzler; Leh¬
Brothers; Kidder, Peabody & Co. and White, Weld
& Co. (jointly); Merrill
Lynch, Pierce. Fenner & Beane;
Glore, Forgan & Co. Proceeds—For expansion programOffering—Expected in March, 1951.
man

Montana-Dakota

Utilities

Co.

Oct.

11 company asked FPC for
authority to issue $2,~
800,000 of 214% promissory notes to banks to provide
funds for its expansion program. These notes, together

Shovel

Nov.

will

vote on increasing authorized preferred!
100,000 to 150,000 shares and common stock.,
from 1,500,000 to 2,500,000 shares.
R. M. Heskett, Presi¬
dent, stated that about $10,000,000 will be raised within

stock from

the next six months.

Nevada
Nov.

Natural

and operation of a
of

natural

Gas

Pipe Line Co.

asked FPC to

company

authorize

construction

114-mile pipeline for the transporta¬

which,

gas,

estimated,

will

covt

$2,331,350.
•

New

Dec.

York

the

Central

RR.

said to be preparing to issue
$7,500,000 of equipment trust certificates after the turn
company

of the year.

was

Probable bidders: Halsey, Stuart & Co. Inc.;

New York, Chicago & St. Louis RR.
8 Lynne L. White,
Chairman, announced

Dec.

company

plans to offer 33,770 shares of

at the rate of

one

new

share for each ten

that the
stock

common
common

held, subject to the approval of the ICC.

The

sharea

offering

Niagara Gas Transmission Ltd. (Canada)
Oct. 20, it was announced that this
company, a subsidiary
of Consumers' Gas Co., plans to build a
pipe line in
Canada to export from Tennessee Gas Transmission Co.
Texas natural gas by way of the
total

cost

the

Niagara border. The
project is estimated at $6,000,000, of

which
of

$2,000,000 will be represented by 400,000 shares
capital stock, par $5, and $4,000,000 to be raised by the

Niagara Mohawk Power Corp.
■■■'<•/
that, through 1951, it will
require hot more than $35,000,000 of additional debt or
equity financing in connection with its 1951 construction
Oct. 24 the company estimated

which is expected to cost $52,328,000. This amount is irx
addition to the sale on Oct. 31 of
$40,000,000 general

mortgage bonds due Oct. 1, 1980. Probable bidders for
bonds: Halsey, Stuart & Co. Inc.;
Morgan Stanley
Co.; Kuhn, Loeb & Co.: The First Boston Corp.
\

new

Northeastern Gas Transmission Co.
Nov. 8 FPC authorized company to supply part of New
England with natural gas, and authorized Tennessee Gas

Co., parent, to carry out a $118,645,545
expansion program, part .of which will supply some of
Northeastern's gas needs.
Of the total financing, 75%
will be in the form of first mortgage bonds to be placed!
privately with a group of life insurance companies. The
remaining 25% would be obtained through the sale of
equity securities. Traditional underwriters for Tennes¬

White, Weld & Co.; Stone & Webster Securities Corp.
Oklahoma

Gas & Electric Co.

tive preferred stock (par $100), to be issued in series. Of
this issue, it is proposed to place privately with a group

$500,000 to equity capital, such shares to be first offered
to present common
stockholders on a pro rata basis.
Registration—Expected to be effected in February, 1951.
Proceeds—The

dividend rate "as

together with proceeds from

was

creating

insurance

announced stockholders will vote Dec.
new

issue of 40,000 shares of 5% cumula¬

companies

16,500

shares of series A

pre¬

ferred, the proceeds to be used to redeem all of the pres¬
ently outstanding 16,336 shares of 5% cumulative pre¬
ferred

Capital Plastics, Inc.
28, it was announced that it

Nov.

one

is planned to offer

stockholders of Rochester Button

proposed term loan of ap¬

proximately $2,500,000 with banks and an insurance
will be used to refund $1,175,000 bank loans,

pany,

of preferred dividend arrearages of
the balance for working capital.

Co.

subscribe for 131.025 shares of capital stock on
of

proceeds from the sale of the stock,

ment

stock.

common

net

of capital

rights to
the basis

stock for each present share of

•

com¬

pay¬

$1,501,500, and

Minnesota

Power & Light Co.
6, Clay C. Boswell, President, announced that the
company expects to raise about $10,000,000 through the
Dec.

sale

securities within the next

18, 1950;
rights to expire about Jan. 16. Price—$1 per share. Pro¬
ceeds—To acquire Techperl and Brodhead Divisions of

year or so.
The
be either in the form of bonds or preferred
stock. The proceeds will be used for the company's ex¬
pansion program. Probable bidders for bonds may in¬

Rochester Button

clude

ations.

Boston

Rochester

Button stock

held

of record Dec.

Co.. which are engaged in plastic oper¬
Offering—Rights expected to be mailed early in

January, 1951.

new

financing

price to be fixed later, will be below the market price
prevailing at the time of offering.

Sept. 28 a plan was filed with the SEC, which provides,
in part, for the refunding of the
outstanding $6,500,000
514% cumulative preferred stock (par $100) with aa
equal par amount of preferred stock having a lower

Nov. 22 it

$3,000,000 of notes authorized by FPC last May, are
refunded by permanent financing before April i„
1951. Traditional underwriters are Blyth & Co., Inc. and!
Merrill Lynch, Pierce, Fenner & Beane.
Stockholders on

Co.

Dec. 8, the company announced it plans the sale of addi¬
tional common stock (par $5) so as to add approximately

American Bosch Corp.

with

see

•

issuance

Transmission

Steel

securities

the

plans

company

issue of bonds.

Nov. 20 company

tional

Power Co.

announced

was

Union

•

company

issue of 400,000 shares of class A convertible stock

Firth

Salomon Bros. & Hutzler.

Electronics,

stockholders

$10,000,000 of new bonds. Underwriters
To be
determined by competitive bidding.
Probable bidders:
Halsey, Stuart & Co. Inc.; Equitable Securities Corp.; W„

tion

Manufacturing Co.

reported that the company was said to be
the sale of an issue of convertible pre¬

considering

•

500,000 shares of common stock (par $1).
supplied by amendment. Underwriters—

Electric

was

ferred stock first to stockholders

oversub¬

per

Wilcox-Gay Corp.,

Emerson
Nov. 20 it

Monongaheia

of Baltimore

Nov.

of next week.
•

Columbia Gas

rill

stock

(par $1).
supplied by amendment. Underwriter—F.
Co., Inc., New York, and Shillinglaw, Bolger
& Co., Chicago. Proceeds—To finance acquisition of plant
site and for construction. Offering—Expected early part
Price—To

•

Sachs

(12/18-19)

103,158 shares of

Ohio.

sell

Inc.,

250,000 shares to 750,000 shares and splitting
the present 210,000 outstanding shares on a two-for-

formed in December, 1950, to acquire and operate a plant
in Salt Lake City, Utah, for the processing of uranium

vote.

common

stock from

Prescott,

Machine Tool

Nov.

it was reported
company contemplates issuance
$7,500,000 equipment trust certificates. Probable bid¬
ders: Halsey, Stuart & Co.
Inc.; Salomon Bros. & Hutzler.

tal

101

may

Halsey, Stuart & Co. Inc.; Shields & Co.; The First
Corp. and Glore, Forgan & Co. (jointly); Otis &

Co.; White, Weld & Co.; Lehman Brothers and Drexel &

soon

the

transaction

becomes

eco¬

nomically sound," and to finance part of the company's
construction

tional

program

common

stock.

by the issuance and sale of addi¬
Stockholders

were

to vote

Dec.

changing each of the 1,076,900 shares of $20 common
now outstanding to two shares of common stock,
$10 par each; and on changing the 825,000 shares of

stock

authorized but unallotted

lative

shares, $20

par,

of 4%

cumu¬

preferred stock to 165,000 shares of $100 par cu¬
Probable underwriters: Har¬

mulative preferred stock.
riman Ripley & Co., Inc.;

Smith, Barney & Co.; Lehman

Brothers.

Pacific

;

Lighting Corp.
Nov.
13
corporation
estimated
that
approximately
$24,000,000 will have to be raised through the sale of
.

Continued

page

10 Z

102

The Commercial and Financial

(2374)

Continued

from

page

Southeastern

101

Dec.

securities next year to finance its 1951

Traditional underwriter:

gram.

construction
Blyth & Co., Inc.

pro¬

Oct. 4 company was reported to be

planning the issuance
early next year of about $10,000,000 new bonds. Probable
bidders: Halsey, Stuart & Co. Inc.; Kidder, Peabody &
Co.; Merrill Lynch, Pierce, Fenner & Beane; Union Se¬
curities Corp. and White, Weld & Co. (jointly); Equit¬
able Securities Corp.; The First Boston Corp.; Kuhn,
Loeb & Co.; Harriman Ripley & Co., Inc. Proceeds are

•

Southeastern

Nov.

Southern

$10,000,000

Public

that

bonds.

new

Co.

Service

Colorado

•

Reliance

care

be offered

in latter part of

stock

bonds to be determined by competitive
bidding. Probable
bidders: Halsey, Stuart & Co. Inc.; Blyth &

Co., Inc. and
Kidder, Peabody & Co. (jointly); The First Boston Corp.
Proceeds—To be used partly to repay bank loans ar¬
ranged to finance construction, and the balance applied
direct to the expansion program. Bids—For bonds ex¬
pected to be opened on Jan. 23.
Southern

Union

Gas

thorized

$7,000,000 and $8,000,000 through the sale of new secur¬
ities next Spring. Underwriter — Blair, Rollins &
Co.,
Inc., handled the financing early this year of $18,000,000

common
stock from 350,000 shares
(209,221
outstanding) to 1,000,000 shares and to effect a
2-for-l stock split-up. The stockholders would then have
preemptive rights in 531,558 of the unissued new shares
while 50,000 shares would be reserved for future sale to
employees and for other corporate purposes. Traditional

of first mortgage 27/8% bonds and
$3,000,000 of 4%% '
preferred stock (par $100). Proceeds—To repay $3,000,000 of bank loans and for construction
expenditures.
•

Hayden, Miller & Co.
Francisco

Southwestern

Nov.

(12/14)

Public

Service

Co.

15, the company announced that it is anticipated
over
$17,500,000 will be raised from the sale of

that

Ry.

securities

Bids will be received by the company at 120 Broadway,
New York, N. Y., up to noon (EST) on Dec. 14 for the

in the fiscal year to end

expected that the

Aug. 31, 1951. It is
senior securities to be sold will

new

consist of first mortgage bonds and
preferred stock and
that a portion of the cash requirements will be derived

purchase from it of $5,595,000 equipment trust certifi¬
cates, series H, mature in 15 equal annual instalments.

from

Inc.;
Harris, Hall & Co. (Inc.); and Salomon Bros. & Hutzler.

the sale of additional common stock.
The bonds
and preferred stock may be placed
privately. The com¬
mon
stock will probably be offered first to common

•

stockholders

Probable

bidders

include:

Halsey,

Stuart

Co.

South Atlantic Gas Co.

Dec.

Inc.

company sought Georgia P. S. Commission for
authority to issue $3,000,000 new first mortgage bonds.
May be placed privately. The proceeds will be used to

repay

Read

•

advisory report submitted to SEC provides

Texas
it

Eastern

Transmission

Corp.

announced

that the company intends to
estimated $20,000,000 of equity securities
preferred stock). Traditional Underwriter—

was

issue in 1951

(probably
Dillon, Read & Co. Inc., New York.
pansion program.

Proceeds—For

of dealers in the country's 45 he said,
you may arrange a quick
largest cities in the interval.
sale at a small profit.
Most syn¬

The Red Book disclosed that for

1940

issue

Reporter's

the dealer total in enough profit to make the busi¬
5,855 while the current ness attractive where a real job

shows the

number

reduced

to 4,342, a drop of 1,513.

distribution

clined from 2,343 10 years

ago

1,866

477

this

about

The

mortality

rate

among

vestment dealers around the

in¬

coun¬

year,

20.4%;

307

from

loss

Chicago
434;

must

under¬

taken.

Boston

244

for

The

new

issue

uncertainty

which

market
over

season

to $32,000,000 (from $25,000,000 in the
original
application), according to John A. McGuire, President,
and the length of the proposed transmission increased
creased

from 325 miles to 469 miles.

the

Gulf

•

had

just completed

periods and
tounded

been

was

find

little short of
that

plexion

finds the

Unless

the

investment

mar¬

some

an¬

there

as¬

had

decline of 26% in the num¬

and

secondary
stock

He
an

and

off-shore

fields

cited

competitive

the concentration

high-grade securities
tutional
cated

investors.

among

If you

these

bidding
sales

big

insti¬

are

ance

remain

West
Dec.
of

Penn

Electric

Co.

reported company plans to sell $7,000,000
stock, either to the stockholders or

was

common

new

through
may

underwriting.
If through underwriters, stock
be sold at straight competitive bidding. Probable

bidders:

Lehman Brothers and Goldman, Sachs & Co.
(jointly); Morgan Stanley & Co.; W. C. Langley & Co.
and The First Boston Corp.
(jointly); Harriman Ripley
& Co. Inc. Proceeds—For expansion program. Offering
—Expected early in 1951.
*
;

ex¬

Westcoast Transmission
Nov.

10, it

was

Co.,

Ltd.

announced that Westcoast Transmission

Co., Inc., its American affiliate, has filed an application
seeking authorization to construct approx¬
imately 615 miles of pipeline for the transportation of

with the FPC

natural gas in the States of
Washington and Oregon (this
project is estimated to cost $25,690,000). Both companies
are
sponsored by Pacific Petroleums, Ltd., of Calgary,
Sunray Oil Corp. and other members of the "Pacific
Group" engaged in active oil and gas exploration and
development in Western Canada. The completed line of

both

companies, to be about 1,400 miles, will, according
estimates, cost about $175,000,000, to be financed
75% by bonds and the remainder by preferred^and com¬

mon

stock.

Underwriters—Eastman, Dillon & Co. and

The First Boston

Corp.

Western Pacific RR. Co.

(12/19)

Nov. 30 company applied to ICC for authority to issue
and sell $22,000,000 of 30-year first and
refunding mort¬
gage

bonds, dated Jan. 1, 1951. Underwriters—To be de¬
by competitive bidding. Probable bidders: Hal¬

termined

sey, Stuart & Co. Inc.; Blyth & Co., Inc.; Lehman Bro¬
thers and Bear, Stearns & Co. (jointly); Union Securities
Corp. and Glore, Forgan & Co. (jointly). Proceeds—To

redeem

$10,000,000 of first mortgage 4% bonds and $6,111,300 of 4V2% general mortgage convertible income
bonds due 2014, and the balance used to reimburse the
treasury for road improvements. Bids — Expected at
on

Dec. 19.

involving 111,692 shares

com¬

same

time.

sold

mon,

is due about the

l-to-16

year

since the

serials

offering

rank

and

file

negotiated

Reports indicate
mately $25,000,000

that

ahead

Macy
for

the

of
Terminals Co.'s $40,000,000

bids of the two groups which

sought

the

issue,

WANTED

SECURITY ANALYST
AVAILABLE

MATURE JUDGMENT
CONCISE

PLUS

lo¬ five

Box

The

COMMISSIONS

bal¬

Tuesday with
six groups figuring to seek

buyers, the bonds.

WRITER

REASONABLE SALARY

Co.

1213,

Macy secondary,

Commercial

Park

the

winner

bid

99.3899 for 3Us and the runner-up

SITUATION

Chronicle,

bids

been

made

Considering the spread between
the

approxi¬
Cleveland

deals

has
was

last week.

Cleveland Union Terminals

world

of the year.

for

and

its major financing requirements.

is beset

the

Western Pacific's issue in sched¬
uled

Louisiana

this

ket.

alysis of the figures for the two

Coast

Texas to markets in Indiana, Ohio and Michigan. Com¬
pany is now in process of completing negotiations for

might be ex¬ are brought along quickly, which
One
investment banker,
the
banker
noted
a now seems
who plained,
unlikely only Western
keeps closely in touch with hap¬ variety of reasons but believed Pacific Railroad's $22,000,000 of
the major cause of the decline was first
penings
in
the
and
business,
was
refunding
mortgage
nevertheless
surprised
by
the the change in the general com¬ bonds, and the large impending
numbers

Valley Gas Pipe Line Co., Inc., Houston, Tex.
June 27 company sought FPC authorization to construct
a $144,500,000 pipeline project to
carry natural gas from

of the year

big institutions more interested in
274; San Francisco to 128 from closing their books than in look¬
157 and Los Angeles to 124 from ing over new material.
how

gas

Utah to include additional areas
The estimated cost of the project was in¬

in that State.

from 363; Philadelphia to 190 from

try in the last decade apparently
has been considerably greater than 172.
generally realized.
Asked

comparison of current
with those for 1940.

permission to extend the proposed natural

line from northeastern

New Issues Lag

down outlook and the

was

Co.

(EST)

Union

For New York City the total de¬

Report

Gas

dications, he observed do not yield

cities,
was

sion
"

1 p.m.

ber

these

Co.

Proceeds—To be used for expansion
program.

Dec.

(jointly).

Our

sion Co.

for sale of entire holdings of United Corp. in the stock
of South Jersey Gas Co. (154,231.8 shares, par $5 each.)
Probable bidders: Lehman Brothers and Bear, Stearns
& Co.

by Dillon,

Gas Transmission Co.
See accompanying item on Northeastern Gas Transmis¬

South Jersey Gas Co
an

underwritten

Tennessee

bank loans and for expansion program.

Nov. 20

and

Natural

Co.

reported company plans to raise between

was

Utah

(latter to

for

each 10
shares held, with an oversubscription privilege). Price—
For stock to be filed by amendment.
Underwriters—For
one

initial

The

financing has been arranged for
public offering expected for at least
E. Holley Poe and Paul Ryan, of 70 Pine St.,
New York, N. Y., are the principal officers of the cor¬
poration.

January for subscription by

stockholders in ratio of

(Del.)

two years.

(1/23)

common

Line Co.

Nov. 21, the company applied to the Utah P. S. Commis¬

Oct. 20 it

Louis-San

carrier."

a registra¬
covering its proposed issue
20-year first mortgage pipeline bonds

new

Pipe

was announced

privately, with

Dec. 18

States

that this company had been
formed to build, own and operate a petroleum
products
pipeline from the Texas Gulf Coast to St. Louis, Chicago
and other midwest markets to operate as a "common

it plans to file

announced

155,546 additional shares of

common

Engineering Co.
a special meeting of stock¬
holders for Jan. 18, 1951, for purpose of increasing au¬

St.

United

Sept. 25, it

P. S. Com¬

Nov. 22 directors voted to call

underwriter:

dispose of its holdings of 2,870,653 shares (26.95%) of
In event of competitive
bidding, probable bidders may include Lehman Brothers.

Electric Co.

Natural Gas Co.

company

$17,500,000

and

of its construction program.

Electric

tion with the SEC

Indiana, Inc.
Oct. 31, company estimated that, in addition to the $40,000,000 bank credit arranged with eight banks, it may be
required, during the period prior to Dec. 31, 1953, to
obtain additional funds of approximately $40,000,000 in
order to take

Southern

Dec.

Co.

authority to issue and sell $3,000,000 of 30year first mortgage bonds. Underwriters—May be deter¬
mined by competitive bidding. Probable bidders: Hal¬
sey, Stuart & Co. Inc.; Kidder, Peabody & Co.; First
Boston Corp.; Equitable Securities Corp.; Otis &
Co.;
Carl M. Loeb, Rhoades & Co.; Salomon Bros. & Hutzler.
Proceeds—For expansion program.

J. E. Loiseau, President, announced that "it will
be necessary to raise additional funds for construction
purposes in the second quarter of 1951.
The amount
needed is estimated at about $7,000,000." Probable bid¬
ders for $7,000,000 of debentures which company had
planned to issue earlier this year were: Halsey, Stuart
& Co. Inc.; Blyth & Co., Inc. and Smith, Barney & Co.
(jointly); The First Boston Corp.; Lehman Brothers;
Kidder, Peabody & Co.; Harris, Hall & Co. (Inc.). This
latter plan was abandoned last August.
Service

Gas

Corp.

United Gas Corp. common stock.

construc¬

mission for

Nov. 1,

Public

Indiana

Ex¬

program.

Southern

(jointly); Blair, Rollins & Co. Inc.

United Gas

Edison Co.

Nov. 6, the company applied to the Indiana

and
cer¬

Nov. 16, the Division of Public Utilities of the SEC has
recommended that SEC order Electric Bond & Share
Co.

Total financing may involve $55,000,000
in new bonds.
Probable bidders: Halsey, Stuart & Co.
Inc.; Blyth & Co., Inc.; The First Boston Corp. and
Harris, Hall & Co. (Inc.) (jointly); Shields & Co.

Co.

announced

company plans to issue
$4,500,000 equipment trust

pected in January.

W. C. Mullendore, President, announced that
will have to raise $50,000,000 in new capital

company

Ry.

announced

$3,800,000

Brothers

man

area.

within the next 18 months to finance its 1951

Pacific

ders: Halsey, Stuart & Co. Inc.; Salomon Bros. &
Jlutzler;
Harris, Hall & Co. (Inc.); Lee Higginson Corp.; R. W.,
Pressprich & Co.; Harriman Ripley & Co. Inc. and Leh¬

Telephone Co.

California

&
was

tificates, series I, to be dated Feb. 1, 1951. Probable bid¬

tion

Edison

was

Michigan

sell either

Gas

Sept. 27,

company plans to issue
Underwriters—To be deter¬
mined by competitive bidding. Probable bidders: Halsey,
Stuart & Co. Inc.; W. C. Langley & Co. and The First
Boston Corp. (jointly); Kidder, Peabody & Co. and Alex.
Brown & Sons (jointly); Glore, Forgan & Co.; Salomon
Bros. & Hutzler; Harriman Ripley & Co., Inc., and Union
Securities Corp. (jointly).
Proceeds — For expansion
program. Offering—Expected in April or May, 1951.

Dec.

program.

struction program.

with the fi¬

this company, a subsidiary of Central Electric
Co., notified the SEC that it proposes to offer
10,000 shares of common stock (par $10). Price—$11.25
per share. Underwriter—Wagner, Reid & Ebinger, Louis¬
ville, Ky. Proceeds—For construction and improvement
&

Pennsylvania Power & Light Co.
Nov. 9 Chas. E. Oakes, President, stated the company
will require about $34,900,000 of new capital over the
next four years through the sale of securities.
It is re¬
ported that not over 75,000 shares of series preferred
stock may be sold late this year or early 1951. Traditional
Underwriters—The First Boston Corp. and Drexel &
Co. Proceeds—To finance, in part, the company's con¬

Potomac

the southeastern

serve

to be used to finance construction program.

Dec.

Texas

(Mich.)

nancing of the proposed pipeline, the acquisition of dis¬
tribution facilities and the conversion of the system to
natural gas, the company proposes to issue $3,300,000 of
first mortgage bonds, $500,000 of 5% prior preferred
stock, $200,000 of 6% cumulative preferred stock and
$400,000 of common stock, subject to the approval of the
Michigan P. S. Commission. The FPC authorized the
company to construct natural gas pipeline facilities to

Electric Co.

Pennsylvania

Michigan Gas Co.

it was announced that in connection

Chronicle... Thursday, December 14, 1950

Place,

and

Financial

New

York

Volume

172

Number 4968

The Commercial and Financial Chronicle

(2375)
99.422 for 3}4s, progress on distri¬
bution to date is considered satis¬

Two Big

Ones Ahead

Bankers find

factory.

impending dearth of

Thus far the longer-end matur¬
ities have been most
^popular since
;the buyers have been

several

ahead

looking for
.yields of better than 3.10%, it ap¬
The

pears.

fact

that

the

an average life of
8V2
has been in their favor.

new

issues in

large prospects which loom
for

the

The

Commonwealth

Chicago

has

Edison

disclosed

Co.

plans

DIVIDEND

Tobacco and Allied
The

Board

stock

poration,
olders

ber

19th.

Checks

ARUNDEL)

11,

par

value

below,

this

SCHEUERMANN, Treasurer.

1950.

12, 1950)
share
as

per

quarterly

dividend,

the

poration,

The

day

the

and

issued

and

COMPANIA

19,

cor¬

298

meeting of the Board of Directors,
day, a quarterly dividend of
25^ per share and an extra dividend of
50$ per share were declared on the
this

stock of the

final dividend of
December
29,
1950,

December

19,

December

Trust
New

MARSHALL G. NORRIS,

stockholders

per

Company of New
City 5, N. Y.

York,

Wall

turned

the

postal

authorities.

dividend
been

All

re¬

share¬

holders of the company are requested to
advise
any change of address to the company office—
Ror*r> 3505. 120 Broadwav, New York

City 5, N.Y.
SALITRERA ANGLO-CHILENA
(Anglo-Chilean Nitrate Corporation)

COMPANIA

HORACE R.

One

held

this

Dollar

day,

($1.00)

13,

1950.

393

this

Company,

declared

December 8,

LANGLEY,

Treasurer.

WAGNER BAKING
CORPORATION

Secretary

(50c)

Wall

Stock of the

Street, New York

special dividend of one dollar and seventy
($1.70) per share has been declared this
day on the Corporation's capital stock payable
December
23,
1950
to
stockholders of record
at

the

December

holders
of

business December 18, 1950.
It
that
approximately
one
dollar
($1.00) per share of this special dividend will
be
designated
as
a
"capital gain dividend,"
pursuant
to
the
Revenue
Code.
The

provisions

the

Company, payable

27,

1950,

record

the

business December

expected

The Board
of
Directors has de¬
clared the regular
quarterly dividend
of $1.75 per share on the 7Vc' Pre¬
ferred
Stock, payable

dividend of fifty cents
share on the Capital

L. G.

January

1951.

stock¬
close

payable

have also declared a dividend
(15c) per share payable Janu¬
1951 to stockholders of
record at the
business December 29, 1950.

13,

11,

STOUT,

Secretary.

1950.

OLD TOWN

CLARK, Treasurer

PREFERRED

dollar ($1.00) per share on the
Common Stock, payable December
21,
1950, to stockholders of record at the

DIVIDEND

one

December

—

UDY

The Trustees have declared

1950. Checks will be mailed.

Secretary and Treasurer
—

—

The Board of Directors has

|
|

•

Inconvertible preferred shares of
|
the Association payable January

c. allan,

Philadelphia 32, December 8, 1930.

COMPANY, INC.

NO. 15

|* quarterly dividend of$1.12'/2 per
| share on the 4Vi% cumulative

1, 1951 to shareholders of record
the close of business December
15, 1950.

extra

Common Stock of the
able

declared

cents

and
on

Company,

December 30, 1950

Both

STEVENS, Secretary.

UNITED DYE & CHEMICAL

The Mark of

DYEWOOD

the

dividend

meeting

tors

held

December

The

the

Quality

Board

Weatherhead

1950,

Direc¬

Company,

Dividend of
$1.25 per share was declared upon the

CORPORATION

$5.00

120

Cumulative

Preferred

Stock

the

$1.75

Company,

1951

share on
the Preferred Stock of the corporation
has this day been declared, payable
January 2, 1951, to stockholders of
per

to the holders of such stock at the

payable

business

January

15,

January 2, 1951.

MORRIS

II.

WRIGHT

Vice President & Treasurer

record at the close of business Decem¬
December

ber 15, 1950. Checks will be mailed.

Harold E. Mitchell, Treasurer

1950

the weatherhead company

Dated: December 5,1950

300

131 st

St.

Cleveland

pay¬

Ohio

to stock¬

December 18, 1950.

ness on

JEROME A. EATON, Treasurer

F.C MOORF. TP.. Tretsurer

1950.

holders of record at the close of busi¬

dividend of 15

dividend of 30 cents per share

|
|

|
|
|

27,

cents

Stock,

========

Preferred Dividend No.

DIVIDENDS No. 33 and No. 34

15,

December

RIBBON & CARBON

| and Electric Association |

from the

CORPORATION

201st Consecutive

Accumulated Surplus of the Company a
year-end dividend for the year 1950 of

Common

record

formerly

The Directors have declared

the

dividends payable to stockholders
December 15, 1950.

15, 1950.

December 6, 1950

Internal

dividend

Directors
fifteen cents

of
ary

GRAHAM, President

England Gas

Also

per

New

ALEXANDER, Secretary.

per

TECHNICOLOR, Inc.

gjiiiiiiniiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiimiiHiiiiiiiniiiiiiiiiiiiiiiiiiiiiuiiis

Quarterly Dividend

1850.

dividend

business on December
18,
1950.
This
dis¬
tribution represents the final dividend in re¬
of earnings for the year 1950.

UNITED

NO.

Directors

company

Company
Directors has declared a
special
dividend of $3.00 per share payable on
December
27, 1950 to stockholders of record at the close
ol
business on December 15, 1950.

SHARES CORPORATION

JOSEPH

business

spect

cents

December

The Electric Storage Battery

Meeting

clared
NATIONAL

substantial
number
of
previous
checks
mailed
to shareholders
have

Board

Street,

share on the out¬
standing capital stock, payable on December 23,
1950,
to stockholders
of
record
at
the
close

York

The Board of Directors lias de¬

record

1950.

New

December 27, 1950, to stockholders of
at the close of business Decern'
H. B. Pierce,

Secretary.

The Board of

record

$0.40

Broadway,

Singer Manufacturing

Rosario

December

ber 15, 1950.

Holders of bearer share certificates
may effect
collection of coupon No. 5
through the Paying
Agent,
The Commercial
National
Bank
and

1950.

Honduras

Company, payable

outstanding,

business

DIVIDEND
The

22,

to the stockholders of rec¬
on
the corporation's books at

the

Board

1950

company
on

1950,
ord

the

held

Directors'
Meeting of the
held in Santiago, Chile, on November
1950, it was resolved to distribute out of
the earnings for the year
ending June 30, 1950

cents

and after December 27,

ANGLO-CIIILENA

Notice of Dividend No.

regular
50

SALITRERA

(Anglo-Chilean Nitrate Corporation)

dividend,

value stock of the

par

payable

declared

extra

common

this

120

COMMON DIVIDEND No.

cor¬

MAflVtANO

cents

December

the

BUTIMMC

per

The Garlock

Packing Company

the date
share

per

payable December 22, 1950 to stockrecord at the close of business Decem¬
Transfer
books
will
remain
open.
be
mailed.
G. C.

has

The
New York

will

December

(December

DIVIDEND NOTICES

Stocks, Inc.

$1.15

without

r CORPORATION'1

Directors

DIVIDEND NOTICES

for

NOTICE

Directors,

dividend

capital

—

50-

maturity.

Mining Company

declared

Corporation

year.

Columbia Gas Sys- summer. The
company calculates
contemplates
raising it will need about
$61,000,000 for
$35,000,000 of new capital the improvements and
extensions
through securities in the spring, if it has in mind for
1951.
conditions are right, or in the
Inc.

some

NOTICES

DIVIDEND

Board

and in January
this
debentures will have

Meanwhile

tern

DIVIDEND NOTICES

Dividend Notice

The

year

years

DIVIDEND NOTICES

Arundel

of $49,000,000
of longterm debentures to
help finance
its construction program.
Similar
operations
were
completed
last

early part of next April

year.

bonds

have

flotation

balm for the

some

103

December 12, 1950

tllllilllllllllllllllllllllllliillllilllllllllillllllllilliilllllllllllililllllllllllllliillii

FORElllOST DniRIESjnc.
Jacksonville, Florida
The Directors of Foremost

CANADIAN

Dairies,lnc.;

Jacksonville, Fla., Have declared
following quarterly dividends

the'

Dividend Notice

6% PREFERRED STOCK
75c Per

Per Share

January 2,

business, December 15.

GENERAL TIME
CORPORATION

declared:—

were

Ordinary Capital stock,

final dividend of four per cent

Secretary

the

(one dollar
of

the

share)

per

in respect

1950, payable in Ca¬

year

nadian funds

The Board of Directors has de¬
clared

February 28,1951,

the

INTERNATIONAL

The regular q

SHOE

provement
per

today

COMPANY

the

stock

and

one

income from other

The

159™

year;

Ordinary

attributable

operations
St. Louis

last

over

interim

to
per

Capital

railway
to

cent

holders of record December 19,

income

from

sources

railway operations

other

quarterly dividend of 60^

and

the

payable

to stockholders

January 1,1951

of record at the

1950,

was

15,

declared by the Board

of Directors.
ANDREW W. JOHNSON
Vice-President and Treasurer

December

1, 1950

years

the

of 50

cents

De¬

The Board of Directors of International Tele¬

year-end divi¬

shareholders

phone and Telegraph Corporation has declared

record

cember 19, 1950.
An additional

dend

cents

share,

per

January 2, 1951 to
shareholders of record Decem¬

ber

and

19, 1950.
stock

dividend

cent, at the rate of

one

each ten shares held,
payable in
stock on January 19,

total

1951 to

declaration

common

shareholders of

record December

which

the

close of

dividend

the

the basis of the

ap¬

date,
bid price.

for each 100

shares,

made before the close of the year.

By order of the Board.

BRAMLEY,
Secretary.

Montreal, December 11, 1950.

rate

per

of five shares

the capital stock of the

Corporation, both payable

lieu

stockholders of record

closing
on

the

the last recorded

January 30, 1951

the close of business

December 29, 1950. The transfer books will

not

be closed.

Secretary-Treasurer

final dividend will be

FREDERICK

the

John H. Schmidt

In future, so far as may be
possible, an announcement in re¬
a

scrip certificates for fractional

plied.

spect of

stock dividend

(15^)

19,1950. Pay¬

ment in cash will be made in

market price for the stock

the

cents

per

share for

record

after

cash dividend of fifteen

payable

made

until

per

January 2, 1951

of the final dividend has not been

year

close of business December

recent

Dividend Notice

STOCK

common

for the year is thus at
the rate of six per cent, one half
from each source.
per

than

dividend

Common Stock

dividend

share payable

declared

in August last was attributable to

CONSECUTIVE DIVIDEND

COMMON

sources.

dividend

CORPORATION

1950.

three

cent of the dividend declared

STOCK

uarterly di vidend

earnings from railway operations
for the year continue to show im¬

TELEPHONE AND TELEGRAPH

$1.0614 on the 434 per cent
cumulative preferred stock, pay¬
able January 2, 1951 to share¬

December 29, 1950.

The Directors point out that net

following dividends:

PREFERRED

to shareholders of record at 3 p.m.

INTERNATIONAL

;'i.

■

Dividends

to stockholders of record at 3 p.m.
on December 29, 1950.

at the close

LOUIS KURZ,

Board

following

of, and from earnings for, the year
1950, payable on February 1, 1951,

20c Per Share

Stockholders of record

the

dividend of two per cent in respect

COMMON STOCK

On the Preference stock, a final

STOCK

Each Dividend is payable

meeting

dividends

4% CONVERTIBLE
50c

Directors held today the

PREFERRED

PACIFIC

RAILWAY COMPANY

0. C. Buchanan

December 6, 1950.
WESTCL0X
SETH

BIG BEN

THOMAS

STR0MBERG

RECORDERS

HAYD0N MOTORS

67 Broad

Street,

New York 4, N. Y.

Treasurer
December 13,1950

104

The Commercial and Financial Chronicle

(2376)

Thursday, December 14, 1950

...

hesitate

BUSINESS BUZZ

V-loans

probably

JLM. I

Capital

from the Nation's

\ f\li

may

X IX tA;

l\A/

C.—So far venting the Truman Administra¬
is nothing tion from going along with the
either above or below the surface British on a "compromise" with
Chinese
Communists.
With
of events here to belie the report the
D.

is ap¬

Administration

the

proaching the controls problem
with impulsive improvisation as

achievement,

that

another knocks officials for a loop.

Ordinarily

declaration of a
undertaken

national emergency is
for

specific purpose or purposes,
to bring certain laws into force
and to waive certain provisions of
a

peacetime law. Incidentally, it is
proclaimed to recognize the

also

fact of

production

Extraordinary

it seems how¬

the idea of the declaration
national emergency this time

appeared to originate in Congress
and in the Administration with
officials

about

done

the

arouse

public. So the scaring of the pub¬
lic

into

mood of

sacrifices ap¬

to have been the origin of

pears

the idea of

new

national

emer¬

motive

the

Once

gency.

was

with

Government do

Symington's boy, Dr. Alan

ALL ISSUES
Willis

Senators

Robertson

Va.), Irving M. Ives
(R.,
Y.), and Homer E. Capehart
(R., Ind.) sought with unusual
vigor to draw Dr. Valentine out
on such subjects as these:
Would
he let labor wage increases run
(D.,

half

confidence

it does

men,

such

ation

The

which

national

"fire

appears

declar¬

emergency

course before im¬
and price control?
he, say, impose price con¬

but

steel

back

the

Acheson"

resolution

have

the

succeeded

objective

pre-

wages

clauses

avoid

railroad

Would he ever roll
if he rolled back

about

providing

for

escalator

proved to be

from

away

the Senators got

for

Dr.

Valentine

capable of slipping

answering

the most experienced

crat. What

is,

war

"Liberals"

bureau-

much in whatever
it did in the last.
committee

the

did

organized

not particularly rise to

Sfi

new

mitments to be announced

before

long.
the decision

use

the

also for financing
construction or acquisition of in¬
but

dustrial facilities.

James

Federal

the

of the authorized

one

agencies,

procuring

such as the
Navy, wants
addition built for a

plant

war

purpose,

it will offer to guar¬

antee the loan for construction of

the facility.

Then a bank, insur¬
company, or other authorized

ance

lender
The

would

Federal

branches

advance
Reserve

would

guarantees

cash.

the

and

Banks

handle

curing services.
During

used for

were

tracts.

They

for

were

small

outlying

local

the

antee

because

exceed

V-loans
war pro¬

particularly

banks

loans

and

defense

not

guar¬

would

their

regulations limiting

other

Specialists in

procuring

plan
of

number

said

have

For

advantages.

RAILROAD
a

one

to the capa¬

instance by a local

SECURITIES
Selected

Situations

all

Times

lending insti¬

tution familiar with the borrower,
rather

than

some

remote
I

bureaucrat in Washington, or some
half-baked

regional

government

lending officer.
Second,
credit
the

very

considerable

business

«,

New York 4, N. Y.

Members Nat'l Assn. Securities Dealers, Inc.

judgment of

the

and

N C O

25 Broad Street

Telephone BOwling Green 9-6400

Federal

Banks

Reserve

and

branches will be utilized.
For

avoid re-creating
some
such agency as the RFC's
Defense Plant Corp., which fur¬
nished the capital for many war
Third, it

may

factories.

Finally, it will reduce the mag¬
a further postwar plant
disposal problem. During World

nitude of

War

factories

with

built

gov¬

ernment funds were leased. If the

not choose to purchase

Large Appreciation Potential

they reverted
to the government for disposal.
Under the new plan the borrowers

SUGGEST

RIVERSIDE CEMENT CO.
(common) STOCK

CLASS B
A

leading

producer of

fast-growing

cement

Southern

California.

Analysis of
a

them after the war,

review of

try

this Company and
the

available

Cement Indus¬

request.

Selling about

$10.25

would be owners, subject to mort¬

gage,

After they repaid the mort¬

they

would

become

full

owners.

Possible
are

first,

HAnover 2-0050

LERNER & CO.
Investment

Securities

10 Post Office Square,

objections to the

that

many

banks

to
Teletype—NY 1-971
Firm Trading Markets

plan

Boston 9, Mass.

Tel. HUbbard 2-1990

will

Allied Electric Products

Garlock

Packing

Gisholt Machine Co.

BOUGHT
SOLD

FOREIGN SECURITIES

QUOTED

All Issues

Stanley Pelz & Co.

FOREIGN SECURITIES

TELETYPE NY

1-3089

Jessop Steel
McBee

Company

<-ARL MARKS & r.O. Inc.

40 EXCHANGE PLACE, NEW YORK 5. N. Y.

Teletype—NY 1-1126 & 1127

departments.

gage.

loans

ratio

use¬

whose

could

without

such

prudent

assets,

sub-con-

and

contractors

make

total

financing

contracts

STOCKS
SELLING

War

Ass'n.

Sym¬
of all

the

ington and
the

Mr.

secretaries

agreed

heartily

lessee did

duction

ful

World

Dealers

Tel. HAnover 2-4850

Board

Reserve

these

agents for the pro¬

Security

St., N.Y.

spark-plugged the idea which was

bility and credit competence of a
borrower will be made in the first

were

37 Wall

Jr.,

thing the decision

guaranteeing loans to
production facilities
—entirely new war plants, addi¬
tions to existing factories for war
production purposes, or the in¬
war

&Teene<miGomparvu
Member

Bell

Vardaman,

V-Loan for

Army, Air Force,

PER SHARE

They will still be used for this
purpose,

finance

is that when

joo

which could be advanced

single borrower.

This

That

originated
in
World War II. The arrangement

is about to be
tried
out, and reportedly on a
very large scale,
involving per¬
haps hundreds of millions of com¬
Something

V-loans

BOWLING GREEN 9-5580

available.

hat?"

sums

Gov.
«

stallation of industrial machinery.

UNDER

the

labor's defense.

questions

revealed, however,

was

with

away

that labor shall not get

Senators

this

determination

grim

was

automatic

increases?

Needless to say,
answers,

—where's your

rolling

cost-of-living and other automatic

reorganization

meaning of this insubordination, Twittle

"What's the

boost which pre¬

wage

cipitated it?

wage

memorandum

this

wage

Would

Republicans pondered

Special

their complete

to achieve

objective.

the

achieving

much

handful of Congress¬

a maneuver as a

would not be necessary

the stated

Bought—Sold—Quoted

into

its

Railroad

trator.

Valentine

feeling that if the Adminis¬
bigwigs took the public

viewsJ

Boston & Maine

Valentine, when the latter was up
confirmation for the job of
Economic Stabilization Adminis¬

tration's

coincide with

own

was

prices? How much of this war's
production is to be paid time and
one-half, double time, and even
"triple time?" What would Dr.

Among heads which do not get
bo feverish on Capitol Hill, there

"Chronicle's"

for

back

the

revealed in the questioning of

Stew

trol

national emergency.

and may or may not

by the public
the attitude
of
Senate Banking Committee mem¬
bers toward labor in the forth¬
coming war effort. The attitude

ing the midnight dil to bone up
the subject of just what can

re¬

flect the "behind the scene" inter¬
pretation from the nation's Capital

make
is the

missed

Entirely

generally

posing

of those facilities.

(This column is intended to

put on

It
Republicans
have been able to exercise

agreed upon, then the Department
of Justice was put to work burn¬

the

will not

policy in years.

thinking that things are

just terrible and something should
be

purposes

well for the full peacetime

important influence on foreign

was

emergency.

ever,

use

Senate

time

ever

worry

was

propitious.

revival

its

first

grave

ice until circumstances may

after

new

one

industrialists

many

be learned, there

-as can

;that

will

ownership of plants whose special
war

WASHINGTON,

Facilities

for upward of five

run

hesitate at the outset to take

augur
K

facility

periods of less

years.

Second,

years.

BeTund-the-Scene Interpretations

for

were

five

than

•

these

make

loans because of their term. Most

SPECIALISTS

50 Broad Street

Hill, Thompson & Co., Inc.
Trading

New York 4, N. Y.

70 WALL

Department

STREET, N. Y. S

Tel. WHitehall 4-4S40

Full text of Commercial and Financial Chronicle : December 14, 1950, Vol. 172, No. 4968

FRASER