Full text of Commercial and Financial Chronicle : December 15, 1960, Vol. 192, No. 6012, Section 1

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

ESTABLISHED 1839

192

Volume

Reg. £/. S. Pat. Office

Number

6012

.New York

7, N, Y., Thursday, December 15, 1960

AS WE SEE IT

Editorial

Price 50 Cents

In 2

Copy

a

Sections

—

Section

1

Investment Bankers Association

The

persistent suburbanization of the population of this
country has long been a topic of discussion among econ¬
omists and sociologists. The 1960 census figures have not
been published in full, but there is convincing evidence
that the process is still proceeding with little if any
abatement up to the present day. Many if. not most of
our largest, cities show little or no population
gain dur¬
ing the past decade, and without doubt if and when
figures are finally available, it will be found that such
growth, as has occurred in the "central cities," as they
have been termed, has taken place largely in the outer
fringes rather than in the older and more congested
All this contrasts with what

areas.-

some

of

us

Holds 49th Annual Convention
George A. Newton,
are

and technical

degree in
MacLeish,
Spray, Price & Underwood, 1936-1942, then served
with the U. S. Army Air Force until 1946 when he
joined G. H. Walker & Co. in St. Louis. He became

studies

of which offer policy recommendations. Guest speakers

appearing before the organization were Henry C. Alexander;
Eiwood

Gen.

J.

Lee

R.

that

the

Pennsylvania

have been

investment

.

a

Quesada;

School

Wharton

is

make

to

and H.

Charles H. Percy

Announcement is made by

Palmer.

Finance,

study

of

the

Vice-President

issue of the "Chronicle."

high-attendance marked the six-day 49th

A record

Convention

Annual

Association

the

of

Investment

which

America

of

A.

"

Another Side

it not for

Were

the so-called

redevelopment projects
publicly or semi-publicly undertaken in the name of
"slum" clearance, the relative decline in the cores of the
older and larger cities might well be even greater. Most
of these population shifts are commonly cited as great
improvements. Much has been said about the social
benefits to be had from the increased degree of home
ownership. Of' course, any such migration of peoples
could not fail to have far reaching economic conse¬
quences.A substantial part of the better markets in re¬
cent years for various building materials and labor and
automobiles

for

has

often

been

attributed to it.

consequences of somewhat less spectacular
have also resulted.-\\
:
--a
v

.

be overlooked

not

Co.,

St.

-

The
,

Association

Mr. Newton

ciation, of

H

5

t

taking place:. The gain has not been without its cost, and
the cost, in many instances continues and presents prob¬
lems which are not easy of solution.
One aspect of the
less pleasing side of all this is al- (Continued on page 12)

Kappa

Louis.

St.

the

Missouri

addition

In

to

(1937), he is also

Bar

(1946), and is a
Chicago Bar Association and the

the

C.

of

Alumni

Association, 1951-1953, and as
University's Development Fund
(Chairman, 1955). He was the reci¬
pient of the "C" Fob Award in 1955 and the Alumni
Recognition Award three years later. Mr. Newton
was named to Sports Illustrated
1957 Silver Anni¬
versary All-American Football Team.
of

the

from 1954-1959

elected

The New President

receiving his A.B. degree and a Phi Beta

Key from

of

of

Director

David J. Harris, Bache
Chicago; ■ Thomas M.
George A. Newton
Johnson, The Johnson, Lane,
Space Corporation, Savannah;
Robert O. Shepard, elected for second consecutive
term, Prescott; Shepard & Co., Inc., Cleveland; and
Walter H. Steel, Drexel & Co., New York.
■.

Dealers, 1954-55, and Vicea Director ,pf the Sales Exe¬

in

He. is an active and honored alumnus of the
University of Colorado; served as Director of the

five Vice-Presidents. They are:
Curtis H.7 Bingham, Bingham,
Walter & Hurry, Inc., Los An¬

After

member

member

'

<

He is

Association

Bar Association of St. Louis.

Mr. Newton is Treasurer for the

&"• Co.;

sort naturally

Governor of the National Asso¬

was

Securities

Chairman, 1956.

a

geles;

Other

ation, 1951-58; Group Chairmen's, 1955-56; Chair¬
man,
1959-60; State Legislation, 1951-53; 195658; Chairman, 1958-59.

U.

also

the University of

Colorado in

of

cese

Missouri

Trustee

and

Episcopal Dio¬
its

of

n

Investment

his church as Director and
Chairman of the Finance Committee,
Episcopal
Home for Children.
This year he received the
Trust; he also

serves

"Bishop's Award," Episcopal Diocese of Missouri.
Club, Fraternity and professional association
memberships include: Racquet Club, Noonday Club,
and Bellerive Country Club, all of St. Louis; Den¬
ver

Country Club; Bould-

(Continued on page 106)

Underwriters and distributors of

CONVENTION ISSUE

IBA OF AMERICA

X

Plus

U. S. Government,

32-Page Pictorial Coverage in

STATE, MUNICIPAL AND

Section Two

PUBLIC

HOUSING

BONDS

AND

AGENCY

NOTES

Dealers in and Distributors

Public

Housing,

State and

of Securities of

NATIONAL AND GRINDLAYS

Municipal

Head

Securities

BISHOPSGATE, LONDON, E.C.S.
London

HAnover 2-3700

chemical bank

So.

Hope

Co.

Street, Los Angeles 17,

PARLIAMENT STREET, S.W.I.
ST. JAMES'S SQUARE,
to the

ADEN,

the FIRST NATIONAL CITY BANK

Exchange

in

Claremont, Corona del Mar,
Encino, Glendale, Hollywood, Loaf Beach,
Oceanside, Pasadena, Pomona, Redlands,
Riverside, San Diego, Santa Ana,
Santa Monica, Whittier

PAKISTAN, CEYLON, BURMA,

INDIA,

OF NEW YORK

TANGANYIKA, ZANZIBAR,

BOND DEPARTMENT

KENYA,

30 Broad Street

UGANDA,

y

Offices

ZANZIBAR
in:

Branches

Members Pacific Coast

ADEN,

Inquiries Invited

on

Federal Home Loan Banks

Southern

Cooperatives

Federal National Mortgage

Bond Dept.

Teletypes NY 1-708

New York

Correspondent

—

Association

United States Government Insured Merchant
Marine Bonds

"J

and

•

International Bank for Reconstruction
and

Development (World Bank)
THE

Chase

Manhattan
BANK

California Securitiee

SOMALI REPUBLIC,

NORTHERN AND SOUTHERN

Federal Intermediate Credit Banks

Banks for

Stock'Exchange

Associate Member American Stock Exchange

.

S.W.I.

Government in:

KENYA, UGANDA,

Members New York
'

-

13

company

New York 15

Branches

54

Bankers

new york

trust

623

Office:

&

California

26,
telephone:

Federal Land Banks

Lester, Ryons

BANK LIMITED

HAnover 2-6000

Pershing A Co.

RHODESIA

mz-

Net
To

Active

Dealers,

Markets Maintained
Banks and Brokers

UNDERWRITER
DISTRIBUTOR

T. L.Watson & Co.
1832

ESTABLISHED
DEALER

1

•

"

Members

canadian

CANADIAN

securities

BONDS & STOCKS

Block

New York Stock Exchange

Inquiries

Commission Orders

first

i§

American

Stock

Exchange
CANADIAN

<£outhlC€6t
company
*

t

t

Nh. C

•

'

'

«

STREET

NEW YORK 4, N. Y

DIRECT WIRES TO

,

A

All

MUNICIPAL
FOR

NY 1-2270

CIVIC

<

MONTREAL AND TORONTO

Dominion Securities
Corporation

Goodbody,a Co.
MEMBERS NEW-YORK STOCK,EXCHANGE

DAXjXJAS




Executed On

DEPARTMENT

Teletype

25 BROAD

Invited

Exchanges

Canadian

II

PERTH AMBOY

BRIDGEPORT
..

i-

t

'•

^

40
2 BROADWAY

NEW YORK

1

NORTH LA SALLE ST.

.CHICAGO

I.

Executive

the

of

his admission to the Illinois Bar

Five Vice-Presidents

New

The

member

a

'I

a

Previously he had served on
the following national committees: Federal Tax¬

cutives

Hollywood, Florida.

self-gratulation is

while the

&

Lee, Partner of W. E. Hutton
& Co., New York City.
The
meeting was held on Nov. 27Dec. 2 in the Hollywood Beach
Hotel
and
The
Diplomat at

is, however;- another side to this picture which

There

a

J.

.

should

Partner of G. H. Walker
Louis, as its President for the
coming year. He succeeds James
Newton,

■;

and

elected

was

Committee in 1959.

Bankers

George

elected

year.

Mr. Newton has been

years

active in the affairs of the IBA. He

speeches and other developments are to be found in this
4

following

i

.4'

During the past 10

Texts of Committee Reports,

banking industry.

Partner in the firm the

a

University of

comprehensive

a

Bruce

retiring President James

of

Mr. Newton attended Harvard Law School

1933,

where he was graduated with an LL.B.
1936.
He practiced law in Chicago with

Presented to the trade group

significant Committee

numerous

many

population "explosion"'taking place in the
as. a whole. Such exceptions as are to be found
to this sort of trend appear to be occurring in certain
areas favored by retired men and women, such as Florida,
the southwest and the southern part of the Far West. :
calling
country

49-year old St. Louis banker, is elected

a

President of the Association.

WHitehal! 4-8161

IMPROVEMENT

VI
MUNICIPAL BOND DEPARTMENT

BANK OF AMERICA

Exchange Place, New York 5» N. Y.

Teletype NY 1-702-3

BONDS

CALIFORNIA'S

\ N.T.&S.A. "
SAN

FRANCISCO

•

\\
,

J

LOS ANGELES!

V

*{

2

For

Financial Chronicle

The Commercial and

(2382)

Banks, Brokers, Dealers only

The

Security I Like Best...

This Week's

Alabama &

Participants and

Forum
A continuous forum in which, each week, a different group of experts

Professional Service

Thursday, December 15, 1960

.

.

.

Their Selections

in the investment and advisory field from all sections of the country
in

Louisiana Securities

participate and give their reasons for favoring a particular security.
Harris

Distribution

WILLIAM DEWART

John Muir & Co., Neiv York City

MARKETS

Members: New York Stock Exchange,
Associate Members

•

Positions in
500

•

than

more

leading O-T-C issues.

Nationwide facilities for
broadest coverage

of all

O-T-C markets.

well

This

Stock

American

BOSTON

•

CHICAGO

PHILADELPHIA

•

SAN FRANCISCO
Wire

Private

Nationwide

System

free

world

through subsidiaries
representatives.
The company and subsidiaries
operate plants in Cleveland (3),
and
Dayton,
Ohio;
Brooklyn,

of

since

print¬

magazine
cutting

ma¬

chines

and

the

than

$3.08

better

earn

Opportunities Unlimited
IN JAPAN
for

Stock
Digest, and our other reports
that give you a pretty clear
picture of the Japanese
economy as a whole.

Write

our

Monthly

61 Broadway, New York 6, N. Y.
Telephone: BOwling Green 9-0187
This is not

offer

an

orders for any

or

matrices

acquisitions
of
Gates
Radio
Co.
and Brooklyn Poly¬
technic
Research and Develop¬
ment
have
given the company

Also

ronto,

in

are

some

14

United

BOUGHT

—

Exchange

Stock Exchange

WOodward 2-3S55
—-

DE 75

Bay City, Mich.

a new

share

to the highest pre¬

"Super Blue Blade" over the
several years, it will mean

$20 million of additional revenue

probably not more than $2 or
million of added costs.
This
add $1 a share to earnings
after taxes.
'
"•
and

$3

to

would

For

Primary Market Maintained

market.

of

has

sales

million
earnings

larger

Associates, Inc.

Elliot

switching

Schneider

find

Control Data Corp.

may

share

a

additional
market.

climb toward

would
into

The main stimulant is the "Su¬

" Earnings

if

are

by Fall had 20%.
not materially higher

and

margins may widen
dramatically if a wholesale switch¬
Blades

are

have provided about
of

Gillette's

(This
ume.

was

agement's

of

same

from

cutting

electric

shaver

extent.

above

are

based

the

number

same

;of

It may well be, however,

to

last

and

it

is

too

early

This could mean fewer
shaves per blade and is a factor
say.

that has to be taken

estimated to
$100 million

revenues

though

year.

shaving creams

into account

when

reckoning the company's
ability to switch people into the
higher priced blade. To the extent
they shift, a lesser number of
shaves would have

a

very

cant effect6n volume.

signifi¬

If, for ex¬

ample, one goes from five shaves

Dlgby 4-7930

as

a

solicitation of an

offer to buy,

any

as an

offer to sell,

or

security referred to herein.)

seems

WHEN THE

significant

CALL

and

expansion of

research

development expenditures in

recent years.

IS FOR

This subsidiary mar¬

kets

Thorexin

cold

capsules

cough
and

is

and
used

syrup

being

Commercial

the vehicle for gathering expe¬
rience and know-how in the pro¬
as

prietary drug business. Gillette's
total penetration of the drug out¬
lets of tthe United States will pro¬

ready marketing

Factoring

network

when the company acquires addi¬
tional products.
One

such

introduced

was

Talk

at

World Beries time. "Right Guard."
a

deodorant.

spray

found

shelf

space

Talcott

It has already

at

to

than

more

70% of U. S. drug stores, but it is,

You'll get fast action

of course, too

and the finest co-op¬

effect

eration from experi¬

on

early to estimate its
earnings.

Above and beyond these factors
which
in

level

Gillette

enced commercial

produce sharp changes

can

the

of

^earning

claim

can

financing and credit

power,

honors

specialists.

one

as

of the great growth enterprises of

economy. Per share profits in
blade
business
have
shown

average annual growth of 6%-7%

for

more

than

a

generation. Since

1917, when the stock

was

fered

average

an¬

income

has

to

the

nual

growth

been

at

public,
of

rate

a

companying

net
of

table

first of¬

5.7%.

The

ac¬

shows

the

in¬

James Talcott, Inc.
I

J
NEW YORK
221 Fourth Avenue • ORegon 7-3000
Other Talcott Offices Serving:

Chicago

•

Detroit • Boston • Atlanta

•

Los Angeles

record since 1939.

come

This

record

lette's

derives

continuous

from

Gil¬

prominence

in

Over-the-Counter

the shaving field and the inherent

strength of the growth aspects of
its business.
Every adult male is
a potential customer. With better

grooming an almost absolute cor¬
ollary of rising living standards
and
a

Quotation Services
for 47 Years

industrialization, Gillette has

market that is expanding might¬

ily.

Since

1920, unit blade sales

have grown at
rate

half

(This is under-no circumstances to be construed

interest

of

area

indicated by the attention devoted
to Gillette Laboratories and the

the

estimates

produces

about half of total vol¬

Razors

the next

1959, the company had over
million of cash available for
expansion or acquisitions. Man¬

our

assumption that each blade

shaves.

of Gillette's customers takes

place.

blade

new

over

years.

that the smoother edge on the new

been excellent.

that profit

over

the

of

of

increment

blade does not hold up so well as

Costs

effects

full

$30

wet shave

formerly,

June

of

spillover

a

work themselves out

the

of

10% of the domestic blade market

so




to

Introduced in January, it had over

by

the

similar

ranks

to the

the

in
to

by about 50
it acquires -an

obtained

be

The
on

in

10%

A

the

users

per Blue Blade," which provides a
remarkably smooth shave. Though
this
new
blade
is priced 40%

lic acceptance has

MEADE & COMPANY

One

success

customers
its
ability

own

a

enhanced

be

cents

higher than the company's wellknown "Blue Blade," initial pub¬

Report Available

and

portion "<of

business'.

hOw

would

brought total 1960 pay¬
ment to $3 vs. $2.50 last year. Next

its

reflection

attract

An

share

the

Crompton & Knowles

period of 1959.

wet

S.

razors)

Gillette's

expect

can

extra dividend at year-end of 500

earnings
$5 mark.

company

U.

(one third of shav¬

undefined

but

expand

that of the rest of the world.

18% above the

year

the
the

of

electric

use

ers

jumped to
$2.85 a share,

a

65%

about

will

the total razor

Presently,

shave market

9%

for the similar

blade

new

Gillette's share of

the

$2.42 reported

^Electronic

the

quite probable

it is

Moreover,
that

first 9 months

1960,

Bankers

COrtlandt7-5680

therefore, see the pos¬
near doubling of the
earning power of the company as

vide-a

$3.34 in

versus

and

5, N. Y.

to

next

to $171

New York

customers

its

50% ^of

convert

the

1960

in

increased

Street

operating costs will

If the company can

incurred.

be

increase net to

1959.

William

6%.)

around $3.85 a

DETROIT 26, MICH.

Branch Office

midst of

Paper-

estimate that only a mod¬

can

one

est increase in

the

company

Investment

lather.

sibility of

-

introductory expenses for
the new blade are out of the way,

in

level

vious

expect

Stock Exchange

Stock

Penobscot Building

27

.

Once

its history, we

Members

*

-

and

26%

mate Pens about

York City

earning 'power; after
of relatively stable

of

the

&

til Broadway,N.Y.6

One can,

few

quoted at 47.

about

arations

Department, D. H.

Company, New

income at close

HOMELAND ft CO.
1051

specialty com-

amounted to 15%, Toni hair prep¬

years

feel

the

Tokyo, Japan
Brokers

dramatic improvement in
earnings from shaving products is
not the only attractive feature of
the Gillette picture.
At the end

Gillette is in the
three

The marketing people

optimistic, about
to

/

ELLIOT SCHNEIDER

upsurge

its

not

do

of

Yamaichi Securities Co., Ltd.

use

use

blades

York, Inc.

The

Gillette Company

LA DARLING

who

men

division.

is currently

Members New York

SOLD

of

good will created by the new blade

Canada.

&

of New

Affiliate

presses of advanced design from
Life
for the
company's .^Cottrell

particular securities

Blair

Detroit

lather.

speed

solicitation for

Director, Research

Midwest

$6.5

a

well diversified truly
represents an 5,excellent growth
equity. The stock is listed on the
New York Stock
Exchange and

Montreal and To¬

in

Securities Company

of this market.

majority

Gillette

pany^ppw

the

in

cities

was

high

for

This well known

equipment), respectively.
offices

received

order

great

'

■

just

million

representation in the radio
broadcasting equipment and elec¬
tronics
fields
(Microwave
test

and

Presently, the company has only
about 15%

write

on

&

everywhere.

strong

States

$1.2

pull

or

Yamaichi

likely to exert

also

Sales have grown nicely since
Lithograph¬
ing Co. Color printing is a rapidly Foamy was introduced a few years
growing "must", with advertisers ago but it is still true that the

Printing

Western

Recent

principal

a

is

Call

the

to

reaction

sales ol
"Foamy," Gillette's shaving lather.

million order for Multi-color from

William L. Dewart

supplies and
type setting machines,
and parts.

Sales

The Nomura Securities Co., Ltd.

developments are

Recent

For current information
>

sympathetic

a

1

STOCKS

the other factor?

as

favorable

blade

new

branch offices

our

this account is prob¬

on

large

as

to

JAPANESE

per

of

share

per

shaves

5

put together.

1959-60.

and

chemicals

ably

and

3

NY 1-1557

by a third.

but the potential increase

The

-

lithographic

volume

in volume

been
frequently the

should

1961

Fiscal

paper

presses,

Direct wires

dividends.

stock

by

from four shaves to three and you

blade)

policy has

and

Exchange
Exchange

La. - Birmingham. Ala
Mobile, Ala.

It is
still far too early to measure this
possibility with an exactness (most
blades are bought by people who

payment has been augmented

cash

color

-

The

1941.

conservative

presses,

New Orleans,

increase

been paid

have

Stock

HAnover 2-0700

blade to four, the increase in
blade
requirements is 25 %>
Go

get between

dividends

Members New York Stock

19 Rector St., New York 6, N. Y.

.million;

outstanding.

Steiner, Rouse & Co
Members American

per

Cash is in excess of $13

Cash

Elliot

—

New York City. (Page 2)

pany,

assets,

a

Bought—Sold—Quoted

Company

Schneider,
Director, Research
Department, D. H. Blair & Com¬

Germany.

man¬

New

City. (Page 2)

Gillette

Poughkeepsie, Los Angeles, Wes¬
terly,
R.
I.;
Quincy,
111.,
and
Slough, Eng., • and Yvest Berlin,

dustry

multi

York

and

companies
in
graphic arts
equipment in¬
and

William De-

—

Wart, of John Muir & Co.,

Intertype prod¬
throughout the

$56,860,000, to $16,070,000
liabilities, or 3% to 1.
Long-term debt is only $3,600,000 and there are only 1,853,610
shares
common
stock
($1 par)

ing

Teletype NY 1-40

WOrth 4-2300

is

is one
largest

it

the

offset

Exchange

120 Broadway, New York 5

in

created

ufacturer

Member

com¬

mid 1957
through the merger of HarrisSeybold and Intertype .Corp. To¬

leading

1920

Established
Associate

specialty

known

was

pany

day

Corporation

Exchange

Harris-lntertype

of

flew York Hanseatic

Stock

American

of

effected

ucts

Intertype

-

of

8.2%

the

States

use

an

per

shavers

average
annum.

in

the

-byproducts.
Continued

Incorporated

About
United

The

on

National Quotation Burean

annual

Bttoblished 1913

46 Front Street

.pro-

page

CHICAGO

11

NewYork4,N.Y.
SAN FRANCISCO

Volume 192

Number 6012

.

.

.

The Commercial and Financial Chroriicle

(2383)

CONTENTS

General Business Outlook
'

*

'

•

"»

'

'

'

^

J

i

By Emerson P. Schmidt*, Director, Economic Research
Department, Chamber of Commerce of the United States

Articles and News

peak season for economic cession. Personal income reached
forecasting
has
arrived.
The an all-time high in October (an¬
public, like wild game in the open nual rate) of $409.6 billion—a rise
season, should be on guard. This of $25 billion over October; 1959.

we

unanimous,as

GNP

last

1959

differ¬

a

ence.

N

their

near-

o w

year

the

nor
—

improvement

long

The

1958—a

since

on

Dr;

e ns u s

s

EDITORIAL

E.

P.

Gold

We

(2)

Steel Strike

which started in

no

clear trend either up

or

-

down.

current

Why Forecasting?
If

1960;

forecasting

economic

to

some

is

decline

a

so

Even

though

actually

I960

has

been

omists

disappointment,
year-ago
appraisals of
of

a

as

the businessman.

billion.

This

movement

from

a

GNP in history and
$13 billion deficit to an $8 billion
even the 4th quarter will be some
$10 billion above the same period surplus represents a shift of $21
Even in a multi-billion
of 1959, in constant prices—hardly billion.
Continued on page 16
what we generally think of as re¬

Securities

Subcommittee

on

29

specialized in

PREFERRED STOCKS

continental

——-

Committee———-

32

-

—_L—

Public Utility Securities CommitteeOil, Natural Gas Securities Committee.

Securities

Committee

34
/

...

——-

————

——

.

—

Municipal Sub-Committee

on

on

43

.

44

Municipal Securities——

45

J.F.ReilIy&Co.,Inc.

Trading and Cashiering

46
46

Aviation

47

Securities

Committee—.——,———

Canadian

Securities

•

Holds

49th

In Attendance

...______—.

•

_

*'

id

■'

""

'1••

-

DIgby 4-4970
*

at the Convention..

A

*

50
'

White Shield

—.Cover
28

President-Elect George A. Newton's Address
Views of Retiring President James J. Lee

...

...

IBA to Sponsor Study of Investment Banking Business...

106
106

Harvey Wells

107

BBM

Robert O. Shepard Reports on Activities of IBA
Education

Broadway, New York 5

49

'

'

Convention.—

Annual

39

48

Committee..

■'

IBA

——.

Taxation Committee.:.——

j'State Legislation Committee.---^..—
■

40

Procedures
;—.
——
-1
Syndicate Operations Sub-Committee of Municipal Committee
Federal

-

bowling

39
42

,

,

american intl.

37
38

——

—

Companies Committee—
——Li
Insurance Securities Committee
Subcommittee for Liaison and Bond Sale Procedures.
-Committee for Public Education

35
36

Committee.———
Committee——

enterprises

33

—

Committee
;
—.107
George J, Otto Reports Activities of Invest in America
Committee.
108
IBA Essay Contest Winners....
108
New Group Chairmen of IBA..^—_
.......'1^.... 109

Photocopy

—

.......

;

Amer. Int'l Bowling

———

.....

CANDID

PICTURES

Electronic Int'l Cap.

—109

...

1961 Convention to Be Held in Hollywood,

109

-Fla.__.._—

Singer, Bean

taken

during the course of the
Convention appear in today's 32-page Pictorial Section,

&

MACKIE,

HA 2*9000

Regular Features
As

We

See It

T

T *.

;

;Cover
——

14

124

—....

Dealer-Broker Investment Recommendations.—
an

Y.

Direct Wires to

19

....

Coming Events in the Investment Field...
Einzig: "The Need for

inc.

40 Exchange Place, N.

Teletype NY 1-1825 & 14844

(Editorial)

Bank and Insurance Stocks—

—

8

Chicago

Cleveland

Los Angeles

Dallas

Philadelphia

San Francisco

St. Loult

Intelligent Forward Exchange

'Policy"'"

..1....

13

.....

From Washington Ahead of the News—Carlisle

Bargeron...1
17
Indications of Current Business Activity..111
Mutual

Funds

—u

—

......

—._

News About, Banks and Bankers...^-.-.—

Observations-^-A.

Wilfred May

Our Reporter on Governmentsi.—^...—^

Public
*

Utility

—--

...

Securities—-:.—

18

18
4
9
16

Glickman

Corp.

Securities Now in Registration..____—____—........—... 112

Prospective Security Offerings....—
Security Salesman's Corner..^.J.—....
The Market

The

.

.

.

and You—By

119
12

17

Wallace Streete

Security I Like Best—...'

2

—

15
Tax-Exempt Bond Market—Donald Mackey—
6
Washington and You..—_.J_
:
—.—124
The State of Trade and Industry....—

Tenney, Corp.

........

—

Futterman

FINANCIAL

CHRONICLE

Reg. U. 8. Patent Office

Corp.

Copyright 1960 by William B. Dana

Company

The COMMERCIAL and

have

permachem corp.

31

..

the Problems of Our Metropolitan Areas—

Published Twlee Weekly

For many years we

ginn & company

25

S. Relations

...—

Businessman's Bookshelf

.

highest

pacific uranium

22

J

New Governors of IBA_.

typical forecast was on the
There are several other factors
high side by only about 2 to - 3%.
In spite of further adjustments to which help to account for the cur¬
rent
pause.
Among
them
are
come, 1961 as a whole, should ex¬
ceed 1960. There is at present no three: the massive shift from def¬
icit to surplus in the U. S. Treas¬
ground for sustained pessimism.
Whether we are now in a pause, ury, the failure of the money sup¬
ply to expand and our interna¬
recession, rolling adjustment or
tional balance of payment bind.
high level plateau is not easily
In calendar year 1958 we had a
determined; and this is not merely
a matter of semantics.
In 25 busi¬ U. S. Treasury cash deficit of $7.3
billion, followed by an $8 billion
ness cycles in the last 106 years,
expansive phase averaged 2V2
deficit was $13.1
billion.
This
years; October 1960 marked 2Vz
years-since the most recent re¬ helped to shorten the 1957-58 re¬
cession.
But in the first half of
covery
began.
Many indicators
are down.
But in 1960 we'll have calendar 1960 the surplus was $8.2

20

Investment

Other Pro-Contraction Factors

the

Decline in Canadian-U.

Securities Committee-.

Industrial Securities

attribute our present slackness en¬
hot far off. This tirely to the steel strike,- it has
will be our best year in terms of been a
major factor in the re- *
total output, employment and in¬ adjustment through which we arecome, even though the gains were now passing. For a large and key
far from universal.
There have industry
to
shift
within
six
been, are, and will be soft spots, months from over 90% of capacity
particularly •; employment
and to under 50% takes its toll.
profits. -

the

Municipal

this year

In fiscal 1959 the

,t

Money—Henry C. Alexander-

Foreign Investment Committee.——

the outlook were

deficit in 1959.

STREET, NEW YORK

CONVENTION

—

Young——:

Nuclear Industry

While most observers would hot

The

D.

Railroad

well

as

and

Obsolete Securities Dept.

——COMMITTEE REPORTS—

,

feeble, hesitant and tentative, why total inventories increased at an
listen to or read what economists annual rate of
$11.4 billion (about
have to say?
But even in the the same amount as in the preabsence of economists, the busi¬ steel strike
quarter of 1959) fol¬
nessman,
government
and
in¬ lowed by another rise of $5.3 bil¬
numerable other individuals in lion
(annual rate) in the second
responsible. positions could not quarter. This added mightily to
avoid
forecasting;
every
major GNP, employment and
incomes.,
policy 1 decision;wis ..and must be But in the third quarter of this
based oh an. evaluation of busi¬
year
total
inventories * didnot,;,
ness
prospects^ in general
(as change and will probably decline
shown in an analysis of the fore¬ in the next six
months; this means
casting art in the National Cham¬ a slackening Of GNP. employment
ber's Business and Economic Fore¬ and incomes.
Now year-to-year >
casting). Even when uncertain and statistical
comparisons, for the
in
doubt, the careful economic foregoing
reasons,
are
largely
weighing of the expansionist and meaningless, making the outlook
contractive forces (both always
appraisal relying on recent shifts
being present) may, nevertheless, and trends, so much more onerous
be of help to the policy maker.
and hazardous, for both the. econ¬
something

—N,

Governmental

extent the
reaction to

In the first quarter of

IRA

——

that boom.

is

OF

Business Community Must Shoulder Its Responsibility
—H. Bruce Palmer—.

in

early

Sound

and

Some Aspects of the

strike,

go

November, 1959, stimulated, an
deeper and for longer; (3) We inventory boom, leading; to ■ over:
might rock along at recent levels 90% of steel
capacity operation in
with

COVERAGE

—Charles H. Percy—.
v
Civil Aeronautics Board and the Aviation Industry
—Elwood R. Quesada--..

Schmidt

might

'

99 WALL

Role of the Individual in These Challenging Times

•

readjustment;

'

1

122

ADDRESSES-

be

could

you

cat

22

>(•',.

#,.

give

stocks.

Telephone: WHitehall 4-6551

April, 1958, was marred ip early
1959 with a huge expansion and
inventory build-up in anticipation
wrong—soothsayers are known to of the steel
strike; then, beginning
take
in
one
another's washing.
in July, the 116-day steel strike
The error of direction could take caused
a mild recession, a down-..
one of three forms: (1) We might
turn in GNP and in other indi¬
be close to the turning point of the
cators. The end of the steel
c

*

we

those

dog

Again Thank God for Senator ByrdL

/' *1

The recovery

This

*

for

year—year-by-

example.

but.still,

down.

*

was

the economy are highly
relevant.- Let's look at steel, for

deeply

for

that-in

say

JACK
•—that

14

1

:•

Why It Is Essential That Will Making Not Be Deferred
—Roger W. Babson———;

within

period ahead
—not

to

—Marvin Kratter

COMPANY

It's All Right

10

.

rather good over-all performance.
Yet a number of structural shifts

points down¬
for

able

be better than this

unanimity
ward

be

5

1

Negative Aspects of Realty Investment Trust Law

and. other major pleasures,
better than 1958;.. 1960
Was better than 1959 and 1961 wjll

year—but

with

will

lichtmh

AND

3

Brewing Earning Power—Ira U. Cobleigh
New Administration Faces Major Protectionist Fight
—Hon. Jacob K. Javits

If, the present consensus on the
outlook turns out to be correct,

nearly as

B.S.

Page

General Business Outlook—Emerson P. Schmidt

The

year
econo-*
mists
at e

3

Reentered

as

second-class matter Febru¬

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

WILLIAM B. DANA COMPANY, Publisher*
25 Park

Place, New York 7, N. Y.

REctor 2-9570 to 9576

Spencer
JL

Trask & Co,

Founded 1868

CLAUDE D.

WILLIAM

GEORGE

Members New

25 BROAD

York Stock Exchange

ST., NEW YORK

TELETYPE NY 1-5

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Albany

Boston

Nashville

Newark,




4„N. Y.

Chicago
Schenectady

Glens Falls

Worcester

SEIBERT, President

DANA
J.

SEmERT, Treasurer

MORRIS SEY,

Editor

Thursday, December 15, 1960

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4

The Commercial and Financial Chronicle

(2384)

and

OBSERVATIONS...

by

misconceptions

.

Constant

A.WILFRED MAY

BY

we

that

Treasury
rect

WISHFUL TAX THINKING
pointed out in reviewing
opus,
"How I

we

best-selling

that

The

only

offers substantial
advantages, particu¬

tne

definitive

in the event of
that are incor¬

highly

improbable

oc¬

the transaction im-

currence—can

process

sound

and

add

rulings

a

—

body
As

Mis-Emphasis

would

point

disseminated

of the funds' early sellers.

some

tax

over-all

avoidance.

investing public seemingly
engages constantly in either un¬

$2,000,000 in the Stock Mar¬ larly to the large holder who may deror
over-emphasizing
the
ket," by Nicolas Darvas, the ac¬ be undiversifiedly "frozen." But impact of Uncle Sam.
the
recurrent
reference. to
this
companying tax obligation < was
In the forefront of the undercompletely ignored, (cf. " 'How I routine as a "tax-free" exchange,
emphasis category, is procedure
Can Make a Million and a Half is misleading; or as a medium for
the
accrued
capital stemming from the slogan "You
—By the Collector of Internal "avoiding"

never
get
poor
taking profits."
Revenue," in Observations, Aug. gains tax, completely out of order.
Actually, this pleasant, but un¬
(One
prominent
writer
has
even
25, 1960.)
realistic thought leaves out of ac¬
Now, with the acrobatic dancer- been misled into reporting that
count the
impact of the capital
author's and his publisher's haul¬ holding the newly-acquired fund
shares for six months and one day gains tax, on its corroding effect
ing into the courts by the State
on
principal
in the event of suc¬
Attorney
General,
for
alleged will wipe out the entire capital
cessively profitable transactions.
fictionalizing of the profit mil¬ gains tax obligation which may

lions, we realize the author's ne¬

have

has

of

the

amount of

Federal income

actually

he

tax

would

paid

directly
contradicted
the
actuality of the "two million dol¬
have

the

on

turned

issue

profit"

bill, that nasty but inescapable
inroad on gross market profit, is

quite characteristic of the current
spate of "how-to-make-a-fastbuck" literature.
(As this column
has

pointed out in the

books

of the
reviewed the past two

we

case

weeks.)
That

Loose

Tax-"Free" Exchange

allegations

"freedom"
another

from

prevalent

constitute

foible.

This

is

strikingly
manifested
now
launching of a new type
of mutual fund,
with portfolios
composed of the securities turned

*in

in

the

for

exchange by the subscrib¬

ing investors.

a

de¬

wheth¬

profit should

paper

be tied to the calculation whether

Such misconceived tax interpre¬

the

tations

from

secured

stock

is

over-valued

relative

key opinion to the medium to which the pro¬
Treasury De¬ ceeds are to be transferred, by at

from

stem

a

the

the

least
In

of

amount

the

tax

bill.

other

words, the quoted gross
price should be first netted

sales
down

officials

legal

the Revenue Department

and

eminent

counsel,

roactively
three

change

by

New

York

Current dividend payments
by companies which have an ac¬
cumulated deficit

be

ret¬

from

the

current

Government's

income.

even

The

mind

of

prompted

may

rescinded

funds.

has

doubts

not

about

been

the

equity of its previous permission,
the excessive exploitation

Specialists in Canadian Securities

year,

loss in ;the

a

or

not

are

taxable

basis,

taxed

and

at

the

capital
gains rate. Thus, while the stock
dividend benefits from the capital

preferential

as

Principal foe

v

incorrect.
The

with

rate

,•<>>'*'

~

misuse

same

free"

concept

stock

Grace Canadian Securities, Inc.
Members: New York Security Dealers Association

Broadway, New York 4, N. Y.
HAnover 2-0433-45

at

dividends.

its

:

of

is

the

;

•

NY 1-4722

regular commission rates

nating (during
tax liability.

horizontal

that there is

use

the

of interthat

arrows

no

transaction

registered

to

in

it.

prof¬

offset

the

the

postponed

will still be able to

Most

Material

Omission

against

use

fully-taxed
to $1,000 an¬

your

where acceleration

of

a

los¬

ing transaction is beneficial taxwise, is where a high-bracket tax¬
payer
has
a
short - term
gain

gested for interchangeability.
A

you

loss

case

value choice what¬

between the two issues sug¬

ever

r

(taxable fully

as

ordinary income)

Wholly lost sight of in switch¬
ing policy is the offset to the im¬
mediate tax advantage embodied

still to be wiped out.

in the investor's simultaneous ac¬

tax advantage from the
speeding-

quisition of
cost

an

in

basis

Don't let your investment
ment

expensive lowered

the

up

marketwise, do at least as
well as the liquidated issue, you
are acquiring a new capital gains
tax bill, from whose later pay¬
ment
only your death will be
able to save you. (At least confine
your switching-into issues which
expect to hold
term!)
Another

by

judg¬

supposed

of loss-registering transactions!

Debens.
The

Federal

Banks

Today

Intermediate

Credit

offering today, Thurs¬
day, a new issue of approximately
$177,000,000 3% nine-month de¬

the long-

over

"minus"

sabotaged

F. I. C. B. Offers

will,

you

be

acquired

newly

issue. On the indispensable prem¬
ise that the switched-into issue

are

bentures dated Jan. 3, 1961 and
maturing Oct. 2, 1961. The deben¬
tures are priced at par.

offset

which,
although immediately measurable,
is usually wished away, is the ex¬

the

switch

Proceeds

from

the

financing
$197,000,000
maturing Jan.

will be used to refund

4.40%

debentures

1961.

3,

The

offered

issue

new

through

John

is

being

T.

Knox,

Fiscal
Agent and a nationwide
selling group of recognized dealers
in

securities.

The

his

Also to be

Switch

most

the

Mtmbtn: Principal Stack Exchangea •/ Canada
Association

of Stcuritg

Declare

Broadway, New York 4, N. Y.

in

losses
and

Pushed

from

A

long-term

;

Pistell, Crow, Inc.
Members American Stock

Exchange

loss

the

Stock

Market—And

Halbert

the

Attractive," by Kenneth
Chronicle, Dec. 8, 1960.

Hargrove Adds

(Special to The Financial Chronicle)

almost

Issues

rently

Incorporated,

get

LONG

for

Smith,

BEACH, Calif. —J. Ralph

McFarland has been added to the

Cur¬

staff of

Halbert, Hargrove & Co.,

Ward,

115 Pine Ave.

:

'

*

:

,

to

Diibert's

Leasing & De elopment Corp.
Analysis available

.

L. J. Termo &

Company, Inc.

:

widely

more

by

79 Madison Avenue

•

New York 16,

Building

N. Y. '

.

}

r

;

"

influence

4<

a

;

'V

'

'

Telephone: ORegon 9-8090

,

brokerage

such

on,"

constitute

now.

an

both

on

course.

tionable

the

mar¬
;

>

both

on

investment

and

realistic

tax-saving
grounds.
Surely the usual companion lists
"tax

switch suggestions," one
loss-registration and the other

for

sirrmltaneous

late

thb

pise

purchase,

vio¬

Harold C♦ Shore & Co,

of sound investment

criteria.
The

tions

50
selling

states,

or
are

suggestion
list
implies, that its selec¬
keyed to issues which

from

prices

may

both

such

very

their

But in¬

lowered

well

have

investment

in¬

value,

absolutely and relatively to
fact, some invest¬

other issues. In
ment

advisers

buying

astutely comb for

opportunities

those very

motivated

the

list

of

issues which the taxinvestors

are

exces¬

sively selling.
Even

STREET

transfer

to

NEW YORK 4, N. Y.

shrinkage

their former highs.

vestment-wise,
creased

BROAD

-

have suffered maximum

the

Pierce,

•inundating you by mail and other
advertising media, is highly ques¬

of

Telephone: WHitehall 4-4000

in

to

Lynch,

The tax-switching "literature,

for

Broadway, New York 4, N. Y.

is

&

William N.

added

7918 Ivanhoe Ave,.

♦For
specific
examples
ot
divergent
intra-industry performance, cf. "Outlook

over¬

investor's portfolio and the
ket's

to

Merrill

of

—

been

Investment Bankers

tax

October

transactions

important

that is,

urgency;

staff

Fenner

of

the loss registered within the year.

,

ever

vigorously

firms

fiction

has

switching to "similar'^

cum

issues.

the

is

JOLLA, Calif.

McGuire

stock

Racket :

glaring

Illusions

realized, but widely

misunderstood,

lifetime) the
't
V '

;

,

LA

"tax-

applied

Since

Calendar

calendar

With Merrill Lynch
(Special to The Financial Chronicle)

transactions.

now again in
"year-end tax period" occurs
the
agitation to cash- paper

the




loss

you

use
no

-1

emphasis manifested

50

itable

you

should have

ordinary income, up
nually in each of the succeeding
five years.
Practically the only

column

capital. It is therefore
applied to the holder's cost basis,
again postponing but not elimi-.

The

National

whenever

tion, is the occasional

return, of

through and confirmed by

25

equally valuable to

Even if you

year,

(correctly)
by the tax statute as a mere rear¬
rangement of capital, and not cur¬
rent
income, it is treated as a

-

The

cases

tax-wise,

Revealing a state of investment
absurdity in switch recommenda¬

dividend is recognized

Orden Executed

investment

as

But if and,, when the se¬
curity is sold, the proceeds are
applied to the stockholder's cost

complete extinction at death, the
loosely applied "tax-free" term is

Brokers, Dealers and Financial Institutions

•

all

industry does not
.principles,
either theoretically or, as is con¬
stantly demonstrated, by diver¬
gent market performance.*
same

preserve

ance.

gain

TELEX 015-220

Thursday, December 15, 1960

.

but by

25

.

(by up to 25% of the ac¬
pense that is inescapably tied to
crued profit) to the after-tax pro-?,
the switch transactions.
Included
one of many instances where the
ceeds. Only if this net after-tax
therein are the brokerage com¬
tax is merely postponed, and not figure
still constitutes a
lesser
value than the cash or other se¬ missions, state taxes, and "leak¬
as widely conceived, escaped.
age" through the market's spread
into which the proceeds
It is learned that even this re¬ curity
between the effective buy and sell
strictive opinion, postponing the are to be transferred, is a sale
prices. In any event, Mr. Taxtax from the time of the exchange, justified.
Saver, be certain that your regismay well be limited by the Treas¬
terable capital loss is sufficient to
Dividends' Illusory Tax-Freedom
ury
Department
to
the
three
yield a gross tax deduction which
Applied to dividends also, is tax
funds to whom it has already been
exceeds the expenses incurred by
granted; and, pending discussion postponement mistaken for avoid¬

ascribing between

tax

to cash-in

Postponement, Not Avoidance

on'

tax

realism

mands that every decision

by the promoters, al¬
which
it
was partment
though it, of course, prescribes the
supposedly leviable."
Irrespective of the special cir¬ original price paid for the security
the holder's con¬
cumstances
of the Darvas case, turned in, as
his omission of reference to the tinuing cost basis. Thus, this is

lar

Dollar-and-cents

which

in.)

er

payment thereon. (Disclosure

tax

accrued

been

the

.

point both ways; that is, implying

The

Made

cessity for omitting all account of

in

.

another

issue

Telephone:

WHitehall 3-8357

Teletype: NY 1-5126

>•

.

J

Volume

192

Number 6012

The

.

Commercial and Financial Chronicle

shares

Brewing Earning Power
Bringing

to
in

While

this

the

facts

some

on

tap

of

season

traditional

the

Wassail

time

a

dynamic

mare

(or perhaps

the

been

total

of

volume

it

is

not

rum

As

age.

adult American

an

your

annual consumption of beer, based
on
the average, was 25.6 gallons
1959.

in

higher
hit

It

should

this

run

The

year.

little

a

year

all-time high in malt

an

(beers

erages

and

ales)

1959
bev¬

with

a

total of 87,623,000 barrels in tax
paid withdrawals from breweries.
In

case

wondering, a
industry, contains
31
gallons. Even this huge vol¬
ume,
however, represents a
growth in consumption of only
you

barrel,

in

were

this

about 6.6%

Breweries
Not

only

has

rate, stems

'

.

plant

beer

our

drinking

is

modern

small

local

breweries.

the

21-40

is

accounted

old

year

for

age

by

group.

This

group, due to a lower birth
rate in the 1930s, was a relatively
static section of

population in

our

the

1950s. With the exceptionally
high birth rates prevailing in the

late

1940s, however, this 21-40 age

bracket

will

decade.

We

in

should

million

100

1970

as

beer

the

in

zoom

be

next

guzzling

barrels

a

year

result.

a

Adding to this predicted heady
gain in casual malten quaffing is
the

complete social equality

.now

and acceptability

bf beer. Where¬

"rushing the • groWler"

as

small

a

be

bucket

regarded

of

as

(toting

beer)

used

potable

a

to

(and

portable) pastime of the plebians,
beer is now high fashion, sought
and served in the

most

and

women

beer

elite

clubs.

drink

now

imbibed

Certain

plushiest homes

each

other

Moreover,

23%

of

the

about

the

year.

facts

industry may be of interest. For¬
eign competition is relatively un¬
important due to high shipping
costs.

Moreover, there is constant
improvement taking place in the

operating
breweries.

efficiency of domestic
Bottling, packaging,

handling, and loading for delivery
are

highly automated in most of

the

big breweries and, ahead, lies

to

brewery

survive,

lacked
to

has

and

it

has

usually

advertising budget

money

spend in competition with the

big

regionally

nationally ad¬
smaller

or

vertised brands. So many

companies
the

ing

instead

would

ply,

of

the

present batch

Continuous

process.

ency

(assembly line) brew¬

achieve

brewing

maximum

effici¬

by virtually automatic
flow

and

processing

of

sup¬

the

Most

in

are

a

Most, too, have
their

im¬

and

indicated

earnings; and

quite

1960

current yields.,

generous

have

wayside

either

fallen

by

Probably

the

in any event,

brewing

Busch, Inc. This
total

sales

Anheuser-

company

reported

of $382,700,000 in

taxes

deducted),

were

converted

that

business

of

common

this

standing

461

were

breweries in the United

end

of

only 244 at the

1959.

(traded

of

expected

about $3.10
Trend
.

Away

From

Draft

Beer

Another factor making for more

profitable
is

the

operation of breweries

increase

in

packaged
liveries. Years ago draft beer

de¬
rep¬

resented the biggest volume. Kegs

delivered in the gaslight era

were

big wagons drawn by sturdy
Clydesdale horses; and, in later
on

decades, by trucks. Draft business
required
that
the
kegs
arrive

and

beer

consumed

at

home,

pic¬

on

nics and boatrides, and at amuse¬
ment

in
a

parks, packaged beer

grew

popularity, first in bottles with
deposit, and more re¬

return

cently
stub

in

today
total

and

cans

bottles.

1939.

Prices

have

remained

of

50%

packaged

in

beers

relatively stable
and not subjected to price wars
which
crop
out occasionally in
the hard liquor business. Further,
a

of breweries

number

do

fine

a

of

level.

,

'■

,

the

>

perceive that there
factors

\

,,

foregoing
are

you
a

can

number

rising

demand, in¬
efficiency, higherprofit packaging, not to mention
persuasive and sophisticated ad¬
vertising—all at work to make
the brewing business and brewery
creased

stocks

media.

—

plant

more

In

structive

attractive investment

the light of these con¬
developments brewery

ing

basis

has

Inc.

have

off at

brand

of

lined here may

a

in

considerable' amount

and

Canadian

Less
but

pacity

plier

It

supplier

Street.




Paine,
His

Now With Staats Co.

with

choices

(Special to The Financial Chronicle)

Third

ANGELES, Calif.—Robert P.

Konter

the

has

connected

Spring Street, members of

New

Stock

become

York

and

Pacific

Coast

Exchanges.

and

Co.,

went

Jr.,

Universal

Abbott,
a

42%

listed

Match

prize

to

33%

a

gain.

Anderson

the

&

Bristol

by

won

his

-

Mesabi

Pritchard

cents

features.

Between

:

Dow-Jones

declined

Industrial

by 2.71%.

UNDERWRITERS
of

Natural Resource
and

Industrial Securities

-

Canadian Breweries, Ltd. is fa¬
for its

mous

Curling's Black Label

lager beer and its premium Carl-

ing's

Red

stock

is

selling at

well

paying

-

equity

uninflated price of
Exchange.

an

the

on

Its common
regarded as a

ale.

Cap

also

dividend

mature

Toronto

Brewing

Corp.

is

its

Brewing

Shakespearean

known

acquiring

by

local

DISTRIBUTORS

or

is

Falstaff

Secondary Distribution

distinT

further

37

equity

The

net

18%

averaged

and

the

delivered

has

of

now

$1.20

paying

Unlisted Securities

earnings
stock¬

on

for the

stock

past five
selling at

is

listed

on

NYSE.

Another much smaller company,
but

one

with

it,

is

a

very

Drewrys.

middle-Western

Indiana,
and

broad

a

:

Iowa,

Wisconsin

lively

in

it
Illinois,*

Michigan,
with

look

Essentially

company

area

six

Ohio,

well

ad¬

vertised brands of beers and hies.

management

company
group

is

this
eager

entered

year.

This

..the
new

and aggressive. It

Peter Morgan
•

U9 BROADWAY.

NEW

&

and

Corp.
Feb.

25, the contest period,

advanced another,

be

Co.

David

Iron

sup¬

the leading
Earnings
good increase over

share.

a

Myers,

Oil

American

Canada.
a

gain.

Martin

of

per

might well
20

and

<

H.

Proctor

growth

largest

45%.

capital

and

was

of

Robert

Shorr, Harris, Upham & Co., with

Index

share reported last
year.
We would expect around
$3.25 for 1960 on the basis of
which
the
$1.60 -dividend
rate

New-

NEW YORK

Mitchell,

Chemical

appreciation

an

prize

Co.,

Publishing

Americans

the

to

in

$2.95

which

Dominick
:

joined the staff of Mori

Second

&

included

Net

each

of

to

fourth

is

beer

of

serves

Toronto Stock Exchanges

which

Anken

showed

market and, of course,

a

' *

Barney

completion of new
1961, of 13,100,000

after

barrels.

about

14 WALL STREET

.

Smith,
portfolio

construction in

holder's

OF INVESTMENT SECURITIES

&

Gilbert,

company in the world is Canadian
Breweries, Ltd., with annual ca¬

years.

Dominick

market.

Securities Co., 1102 West Fifteenth

guished in the fact that it has
operated its plants at over 80%
of capacity for the past decade,

Members New Yorkr American &

presented first prize to Miss Lois

the largest brewing

actually

areas.

UNDERWRITERS AND DISTRIBUTORS

selec¬

GARDENA, Calif.—Keikoh Kita-

regional breweries and expanding
sales volume in their marketing

~

your

E. Kuehner, Laird, BisMeeds, Contest Chairman,

&

Breweries, Ltd.

known

well

tribution

~Correspondents inprincipaicities

assist

sell

Crowell-Collier

renowned
name, its
popularly
priced Falstaff beer,' and its" pol¬
icy of building up national dis¬

throughout the United States and Canqda

years.

grandeur.

nationally

::

many

The
stock
at
3?r is the quality
equity in the business, combining

for

.

winner.

Revlon,

two

register.

increased

Falstaff

-

the

flat"

hara has

mem¬

exceeding $5,000 on or
before Feb. 10, 1960. The largest
capital gains achieved by Nov. 25,
1960, the target date, determined

whose

the

all

position

tion of issues that should not "go
on

to

open

bers, consisted theoretically
of
investing $25,000 with no single

-Hanns

for

The dividend payers we have out¬

name

—

cash

the

has

Falstaff

.

displayed

at

din¬

14.

contest,

the past four years, and 1960 will
be the best in company history.

42

1870

dazzling performers of
but they now 'have a

Dec.

port¬

Christmas

involving a total outlay
$150 million has been pay¬

over

the

..From

the

Other breweries in Newark, Los
Angeles, Tampa and Miami bring
total capacity to about 10 million
barrels.
A
post-war
expansion

in

price

the

1960s

The

10 and Nov.

should show

the "higher

be

not prove

ner, held

annual

announced

were

the organization's

were

job in the merchandising of pre¬
mium beers, wherein quality and
a
bit of snob appeal are helpful

maintaining

to

may

Brokers

contest

South

throw-away

against

Brewing shares

Customers'
folio

with William R. Staats & Co., 640

packaged beer
for over 80% of

production

yield and
potential for growth.

its

The winners of the Association of

elob, sold only in draft. The huge
Louis brewery has an annual
capacity
of
6
million
barrels.

Thus

accounts

which

St.

income

port

attractive for its 5.33%

Contest Winners

LOS

tendant

handling, trans¬
cleaning.
With
more

The

earnings
share.

per

company

5

Annual Portfolio

Budweiser,
packaged and in draft, and Mich-

program

of

out¬

1960

Anheuser-Busch,
nationally
known
premium products

promptly lest the beer go stale;
and
empty kegs had to be re¬
turned to the brewery with at¬
costs

$1.40
on

ex¬

with excellent
power, operated with vi¬
sion and intelligence. At 30, pay¬
ing
$1.60,
the
stock
appears

and

O-T-C).

present dividend is
might be increased

an

Joins Mori Staff

shares

there

is

(Special to The Financial Chronicle)

4,853,300

that

panding
earning

Drewrys

net

bigger organization. Illustrative of
fact

market.

the

$2.69

the

land

on

to

is

area
in
Arkansas,. Kansas and
Missouri;
and
there
is
some
thought that the company may
shortly expand into the New Eng¬

into

equal

trend

1959

($296 million after state and Fed¬
eral

earnings

or

and,

the largest American
is

franchised

a

stronger tone to them, than they

best known

company

serving

company

the

Anheuser-Busch
f

has diversified operations through
purchase of a Pepsi-Cola bottling

per

provide

some

been merged into

of

continuous

mid-1930s.

finance

to

times

The

proved
many instances, too inefficient

in

a

consumption

any

major trend toward larger and

more

done by

rather restricted segment of the
population. About 60% of all beer

14

share

operation

from the fact that the lion's share

of

able

to

11

been upgraded but there has been
a

States in 1945 and

for the 1950 decade.

This meager growth

Trend Toward Fewer and Larger

or

at

modernizations,
mainly out of depreciation charges
and
retained
earnings. And, of
special interest to investors, good
brewery shares can now be ob¬
tained at prices representing from

Bowl, in point (or better, in pint)

whisky, but beer that will prove
the most popular holiday (as well
as year 'round)
animating bever¬

the

than

major breweries

provements

going into the
various stages.

at

since

the

burdensome debt.

basic raw materials

brew

sponsorship

eager

of

popularity in
getting a more

are

strong financial position, without

suggesting

brewing industry in the Surging
Sudsy) Sixties.

the

is

for- the

year

light

gaining

are

the market and

By Dr. Ira Uf Cobleigh, Enterprise Economist

advance

(2385)

Company

Stock

M

6

tucky Turnpike 3.40s; Main Turn¬
pike 4s and Pennsylvania Turn¬
pike 3.10s.

DONALD D. MACKEY

BY

On

state

the bond market. This confidence

municipal bond
firm during the

and

has been

been

past week and the bidding for the
new issues up for sale has in most
instances been strong. Although
there
have
been
relatively few
issues

new

is

a

the

in

seasonal rather than

dental

This

factor.

by

ex¬

many

of the motivations be¬

Another

hind

the

improved bond market
a seeming improve¬
the foreign balance of

derives from
in

ment

exempt

tax

coming than

experts, may
likely extend into the New Year.

coinci¬

a

which1 has

market
in

slower

pected

this

market,

bond

the

in

to
a
large extent influenced by im¬
provement in the Treasury bond

payments situation. Although our

market

London has

bond market improvement was

well

as

gories

had

to

investors

yields

term

are

dollar

to
warrant
current
purchase. This
quite abrupt realization has in
part been sparked by the light
corporate

bond

category,

to be

exempt

securities

before

the

of bills

rates,

February

yet

bond

activity.

lower yield

business

up-turn

recently

by

called

They

more

business
and
rent

the

Committee
or

there

This

but

are

of

situation

has

dollars

half

over

a

week

a

re¬

been

been

billion

for

the

ease

Federal

finally developed
the
less

more

of, the

ON

interest in

a

point
as av¬

for

constant

several

bond

issues.

Quo¬

REPRESENTATIVE

Toll

Road

SERIAL

3M>s; Ken-

Bid

1978-1980

3.65%

Asked

3.50%

33/4%

1980-1982

3.25%

3.10%

New

Jersey Highway Auth., Gtd.__

3%

1978-1980

3.25%

New

3.10%

York

3%

1978-1979

(State)
Pennsylvania (State)
Vermont (State)

:

New Housing Auth.
Los Angeles, Calif

(N. Y., N. Y.)

Baltimore, Md

Cincinnati, Ohio
New Orleans, La.

__

Chicago, 111
New York

'

„

City, N. Y

__

,

has

1984)
Trust

Trust

1

&

pleased to

3.15%

3.00%

turing

leads

It

to

all

of

market

to 4.00% The
writing
is

to

to

fair.

be

issue

which

Tuesday,

on

to

came

involved

this

account

the
and

included

Salomon

Bros.

Halsey, Stuart & Co., Inc.
of

manager

members
&

Hutzler,

was

George B. Gibbons &

Michigan

Corp.,

Dupont

F; I.

&

Co., W.
H. Morton
&
Co.,
Adams, McEntee & Co. The bonds
reoffered

from

1.70%

at

to yield
At
this

prices
3.65%.

to

Tuesday's other large
consisted

of

new

issue

Los

An¬

$7,000,000

geles County, Calif, general obli¬

3.15%

3.70%

3.55%

Light

(1962-1980)
bonds. This
priced to yield from
to
3.55% by the group

3y4%

1980

3.35%

3.20%

3y2%

1980

3.20%

3.05%

Guaranty

31/4%

1979

3.65%

3.50%

Ripley

3y4%

1977

3.65%

3.50%

Co. and others. This issue

3%

1980

3.60%

3.50%

ter

columns.

Trust

Co.,

&

than

sold

60%

Morgan

was

bet¬

total

Ones

Volume

The

calendar

issue

new

went

we

Housing Ad¬
$76,405,000

awarded

of

noteworthy.

total

of

state

by

and

reduction

in

float

is

Larger Issues Scheduled For Sale
In

the following - tabulations we list /the bond issues of
$1,000,000 or more for which specific sale dates have been set.

Information, where available, includes name of borrower,
of issue, maturity scale, and hour at which bids
will be opened.
V

amount

■

.

Dec.

15

,

(Thursday)

Cumberland, Rhode Island.______
Elgin Local School District, Ohio
Huntington & Oyster Bay Central

2,250,000
1,248,000

1962-1981 > 11:00
1962-1981
Noon

a.m.

School District No. 2, New York

3,047,000

1961-1990

2:00

p.m.

1962-1999

,11:00

a.m.

7:30

p.m.

Dec. 17 (Saturday)

University of Nevada, Nev.__

2,012,000

,

Dec. 19

(Monday)

No.

12, New York

5,103,000
1,700,000
1,876,000

....

Cedar

Rapids, Iowa_____
Dover City School District, Ohio..
Kent County, Michigan

3,975,000
.1,310,000

_____

Ponca

City, Oklahoma..:
:

*

"

:

Dec. 21

%

Bath Local School

1963-1982
.

""

'

.

•

1961-1982

8:00

p.m.

1962-1981

7:00

p.m.

1:00 p.m.

1961-1990

10:00
Noon

.1962-1983

11:00

1961-1975

a.m.

r
a.m.

________

(Wednesday)

District, Ohio...

'

Jefferson

County, Kentucky
Richmond, Virginia

—____

State

Colleges of California

Dec. 22

-

Dec. 28
New

Co.. Metro.

Mexico

Dist.,

!_

.

______

Cerritos
Calif.

Junior

by

$97,165,000

various

Dealer-Bank

Lehman

Manhattan

Bank
of

balance

group

Brothers

for

&

banks.

the

$20,760,000

awarded

were

is¬

of

various

to

smaller groups, with the $13,710,Bank

College

8,000,000

District,

Jan. 10
Los Angeles Sch.

Dist., Calif

Mobile

Water

of

Fuerto

Rico

and

constitutes

the

3Cth sale of Housing bonds to date
and

the

brings

bonds

total

outstanding

to

of

these

over

$3.1

bi'Pon.
to

yield from
out

ran

to

highest rated
for

a

that

in

in

names

the lesser

expected
be

1.50%

3.55%

1961

2001

for

&

The

second

a.m.

1962-1971

.

2:00 p.m.

1963-1985: : 11:00

a.m.

1962-1981-,;

9:00

a.m.

10:00

a.m.

\

30,000,000

Sewer

Commission, Alabama__________

,

/

3,000,000
2,100,000

issues.

these

issues

95,000,000

Jackson County, Mich._
Livonia School District,
La Crosse,

important issue

1962-1990

8:00 p.m.

1,150,000

1962-1971

2:00 p.m.

Jan. 18
Parish

(Monday)

School

7,500,000

(Wednesday)
1963-1981

11:00 a.m.

1,200,000

1984-1981

11:00

Jan. 24 (Tuesday)
Alamance County, North Carolina
1,700,000

1962-1978

1,840,000

Pennsylvania State Public

School

Building Authority, Penn.______
Jan. 19
Vista

Los

Angeles

Power,

Dept.
Calif

of

Water

23,000,000

(Thursday)

Irrigation District, Calif.____

March 8

(Wednesday)

and

12,000,000

April 3 (Monday)
Expressway

Author¬
>

_______

April 4
Los

Angeles

Caiif.

Flood

Control

40,000,000

(Tuesday)

Dist.,

-

15,020.000

_____________

"

on

consisted of $25,000,-

1963-1981

Districts.,

Louisiana

ity, Fla.

is

1,750,000
4,440,000

_____________

*

Jacksonville

will

____*

Mich,___^

Jan. 16

Seattle, Washington

Lincoln

(Thursday)

Wisconsin.
'

"

the

It

(Wednesday)

Jan. 12

and to 3.65%

known

11

——

and

sellout.

Wednesday

10:00

(Tuesday)

Morgan City, Louisiana____

The bonds just sold were scaled

EXCHANGE

1962-1999

(Thursday)

2,300,000

America

of

.1,715,000

4,000,000

-

___.

Board

a.m.

Jan. 3 (Tuesday)

v

.

10:00

1,760,000

Wayne County, Michigan_________ \ l,100,00fy
*

Noon

1962-1998

(Wednesday)

Conn.

Dec. 29

v

8:00p.m.
1:30 p.m.

(Thursday)

University of Indiana____________

Hartford

1,750,000 ; 1962-1981
1,850,000 .1961-1980
7,580,000
1962-1981
14,173,000

Teays Valley Local Sch. Dist., Ohio

Authority bonds to

going to
syndicate.
This composite offering comprises
'25
agencies
in
16
states
and

CA 7-6215

now

this

to

Co. for the dealers and the Chase

a

Bldg., San Antonio, Texas

List

situation, of course, may suddenly

000 San Francisco bonds

inc.

Blue

represents relatively little activity
for the next several weeks. This

California

-

Hart,

be

offerings,
is
little
changed from a week ago. Then,
it was $383,869,200; presently it
is
$365,175,000. In view of the
current
scarcity of new issues,

Immediate

in

offerings

new
as

Public

The

a

Big

market

ministration

sues

SECURITIES

none

to

reoffering.

on

important

New Housing
the combined

with

are

market

The street float, as indicated
the

Co., The

Harriman
Barney &

Co.,

Smith,

Week's

to

came

Municipal Bond Department

There

to

men¬

another in

or

currently newsworthy.

this

at

Jan.

Manager

time

enough

Future

was

headed by Bankers Trust
Chase Manhattan Bank,

Vice-President and

one

close

writing the balance is $2,550,000.

1978-1980

■'

at

these

Co., B. J. Van Ingen & Co..' First
of

33/4%

•)».'■>

tioned

to

scaled

balance

The

the making

issues in

type

3.85% and
is reported

were

2.20%

$95,000,000 State
bonds, is dominant.
large negotiated

California

municipal

.

this

sie, etc., New York Central School
District No. 1 (1961-1989) bonds.

1.80%

STOCK

bonds

from

adver¬

issue,

$3,658,000 Wappinger, Poughkeep-

3.30%

*•1

Leh¬

Co.,

on

.

Another

1977-1980

MIDWEST

The

Co.

yield

in

$225,000,000

issues. Of this moderate

group

a

at

$3,450,000.

3%%

of Commerce

&

the

There are several

Harfiman
Ripley & Co., and C. J. Devine
&

Petersburg),

yield "from 2.4%

issue

INVESTMENT

of

manufac-.*

in

products

(St.

balance

gation

Inc.

of

At

indicates

-

3.00%

&

the Smith,

one

_

2.90%

.

new

total

all taxable Grand
Forks, North Dakota
2,815,000
managed by;
Madison Township School District,
B. J. Van Ingen & Co. and includ¬
New Jersey
2,173,000
ing Merrill Lynch, Pierce, Fenner
Piqua, Ohio
1,000,000
&
Smith, Shields & Co., A. C.
Allyn & Co., R. S. Dickson & Co.,
Dec. 20 (Tuesday)
and others. The bonds were priced Brookhaven
Central School District

3.15%

*

to

cost

Brothers

man

Tuesday,

on

property) to

The




Oregon,

Durham,

remains.

building tax levied

3.00%

Funk, Hobbs

Co.,

Pinellas
Fla.
awarded $6,000,000
(1962 - 1980)
building tax anticipation certifi¬
cates
(payable
solely
from
a

1978-1979

Formerly Partner of Austin, Hart and Parvin

TWX SA 11

of

reported that this

tobacco

headed

Bank

Trust

and

Bank

kinds.

of

MEMBERS

Bank

Also

tised

majors in this syndicate are

Illinois

Continental

The

wealthiest.

1974-1975

MR. WILLIAM F. PARVIN

National

Carolina

the
county seat, is a tobacco and tex¬
tile
manufacturing center. Dur¬
ham County is one of the State's

33/8%

Hart,

a

""

issue has done well. A balance

3y8%

announce

Has been elected

re¬

account.

$1,295,000

press.
are

balance of $860,000

National

Two

Hobbs

in¬

and others. It is

l

Funk,

with

North

Co.,

First

,

1

investor

National

December 14, 1960 Index=3.234%
1

met

Durham
(19S2bonds were awarded to the
headed by The Northern
Co.
and
including Harris
and Savings Bank, Drexel

group

a

at

will.

schedule

the

than

less

awarded

was

bidding

likely

and

change
moment

revenue

prices to yield from

On Tuesday, $3,500,000

County,

were

ISSUES

Maturity

3y2%

(State)

at

were

were

for Indiana

(State)

Connecticut

market

average

revenue

Rate

California

the

generally up from
Vz to 2 points. Illinois Toll High¬
way 3%s were conspicuous in this
respect. Gains were also recorded

has

Treasury bill market and,
directly, investor interest "in
MARKET

average

Monday of this week,
sizable gains were made by
many

pre¬

funds

the

currently

on

tations

of

slightly

a

at this writ¬

ago,

an

almost

larly

vious week.
This

reflects
average

3.25%;

Financial

municipal

weeks. Since Dec. 7, and particu¬

and

ago

and
and

eraged weekly by Smith, Barney &
Company stood at a 3.87% yield
average on Dec. 7, the most recent
reporting date. This average has

actually averaged close to

billion

tend

Slightly Lower

The Turnpike bond Index

an unusually
large supply
of
bank
reserves
during recent weeks. Free re¬

a

several

may

interest

Thursday, December 15, 1960

.

Barney & Co. group. Included as

1.90% to 3.25%. This highly rated
issue

County

gain of about %ths of

partly evidenced by

serves

was

next

yields

state

represents

cur¬

imminent

bullish

yield index stands at 3.234%. This

soft

few

the

week

A

yield

Eco¬

turned

markets,

.

be

to

Commercial

Index

ing.

of

has

indications

covery.

early

Joint

for

Chronicle's

Congress.
less concluded that

activity

that

an

The

expressed
economists

was

several

advise

to

nomic

of

factors

extended period. A

an

Yield Index

Another factor which may have
helped generate this sudden bond
market
improvement is the af¬
firmation of general business in¬

hope

bond

little

weeks municipal
lower.

maturing Jan. 15.

Scant

not

are

in

strain

consequent

these

over

reoffered

&

the

on

pressure

six-month projection might favor
higher rather than lower interest

refunding is the $1.5 billion roll¬
over

London.

the

seems

about

tered until the February financ¬
ing. The only Treasury financing

scheduled

to

bills

Treasury

market

by

there,

generally unclut¬

seems

5V2%

issue

close

writing is $17,500,000.

a

situation

This
very

N. A. and others. The bonds

in

easily

sized

bonds.

.

.

Detroit

Michigan,

(1963-1984)

initial investor interest

terest;

a

group

of

Hayden, Stone & Co., Boettcher
&
Co., First Security. of Utah,

mains

or permanently dealt
Subsequent to the current
expression of optimism empha¬

securities.

corporate

and

managed
by Harris Trust and Savings Bank
and including White, Weld & Co.,

least,

to

to

the

to

at

with.

Moreover, the market for Treasury

awarded

West

shifting of short-

to

and

bond

the

issue calendars, both for tax

new

the

funds

State

3.69%

Monday, Dec.

by

Treasury bills less fa¬

However,

handsome enough, particularly in
the

S.

vorable .to

sud¬

seem

that

realize

U.

6%

led

British

between
and

However,

has

Financing

12, $2,150,000
Boise, Idaho, Independent School
District
(1962-1980) bonds were

fit to reduce the

seen

from

This

5%.

weeks.

denly

temporarily

rate

bank

the
corporate
both these cate¬
been
sluggish
for

market;

rebuffed

were

Germany,

sharp

in

improvement
bond

with

as

officials

000

Expressway
after

Recent

The

i

•

The Commercial and Financial Chronicle

(2386)

TAX-EXEMPT BOND MARKET

market

>

v

Los

May 2 (Tuesday)

Angeles Sch. Dist., Calit

30,000,000

2000

a.m.

Volume

192

Number 6012

.

.

The

.

Commercial and Financial Chronicle

(2387)

7

New Issues

December 15, I960.

$76,855,000
k

"

TF

'H-

1

onds of

e

each, issue will be

secured

by a first pledge of annual contributions unconditionally
payable pursuant to an Annual Contributions Contract between the Public Housing Administration and the Local Public
opinions of bond counsel. Said annual contributions will be
payable directly to the fiscal agent of said Local Public Agency in an amount which, together, with other funds of the Local Public
Agency which are actually available for such purpose, will be sufficient to pay the principal of and interest on the Bonds when due.

gency issuing said Bonds in the

.

■

.

_

.

The United States

Housing Act of 1937, as amended, solemnly pledges the faith of the United States to the
payment of ,the
by the Public Housing Administration pursuant to the aforesaid Annual Contributions Contracts.,

annual contributions

;

Ouotation from

an

opinion. Cated May 15. 1953, ol the Attorney General of the United States,
The President of the United States:

,•

f

.

to

.

"IN

SUMMARY. I AM OP THE VIEW THAT. * ' * A CONTRACT TO PAY ANNUAL
CONTRIBUTIONS ENTERED INTO
BY THE PHA1 IN CONFORMANCE WITH THE
PROVISIONS OF THE ACT' IS VALID AND BINDING UPON THE
UNITED
FAITH OF THE UNITED STATES HAS BEEN SOLEMNLY PLEDGED TO THE
PAYMENT OF
SUCH CONTRIBUTIONS IN THE SAME TERMS ITS FAITH HAS BEEN
PLEDGED TO THE PAYMENT OF IT'S
INTEREST-

STATES. AND THAT THE
BEARING

OBLIGATIONS",;
I

Public Housing Administration

2 United States Housing Act of 1937,

as

amended.

Interest Exempt, in the opinion of counsel to the Underwriters,
from Federal Income Taxes by the provisions of the
United States Housing Act of 1937, as amended.
-

Legal Investments, in the opinion of counsel to the Underwriters, for Savings Banks and Trust Funds in New York and
certain other States,
; except that the Bonds of the Puerto Rico
Agency are not legal investments for trust funds in the State of New York.
.

Bonds Issued

by Local Public Agencies which

Scale A

located in:

are

Scale C

$ 5,420,000 Harrisburg, Pa.
4.825,000 MeKeesport, Pa.

Scale D (continued)

$ 5^530,000 Miami, Fla.
9,250,000 Chicago, 111.
2,625,000 Danville, Va.

3/2 % due 1961-1999
3/>% due 1962-2001

35/8% due 1962-1999
354% due 1962-2001
3/8% due 1961-1999

1

Scale B

811,500,000 Kansas City, Mo.
1,980,000 Watervliet, N. Y.
,4,595,000 Cincinnati, Ohio
.1,810,000 Milwaukee, Wise.

$

/2 % due 1961-2000
due 1961-1999
3/2% due 1962-2001
3/% due 1961-2000
3 /%.

Sikeston, Mo.
Hoboken, N.J.

$. 1,795,000 Milledgeville, Ga.
1,325,000 Joliet, 111.
1,410,000 Glasgow, Ky. ■ ;

354% due 1961-2000
35/8% due 1962-2000
-3M^ due'1*961-2000

3/8%
35/8%
35/i%
3/8%

due
due
due
due
3/i% due
3m% due

.

Puerto Rico

Union, S. C.
2,625,000 Lebanon, Tenn.

Scale D

3

1,670,000
3,405,000
10,600,000
1,590,000

.

.

!

.■

1,900,000 Murf reesboro, Teun.

1,725,000 Brownsville, Texas
1,275,000 Harrisonburg, Var-

:

v;

A

B

-

Scales

Year
C

Due

1)

A

B

Year

C.

D

Scales

1

Due

A

B

1961

1-50%

1.50%

1.50%

1.50%

1971

2.75%

2.75%

2.75%

2.75%

1981

1962

1.70

3.15%

1.70

1.70

1.70

1972

2.80

2.80

2.80

2.80

1982

3.20

1963

1.90

1.90

1.90

4.90

1973

2.85

2.85

2.85

2.85

1983

3.25

1962,2001

i-'

35/8%'due 1961-2000
li.-j

C

D

3.20%

3.25%

3.30%

1991

3.50% ' 3.55%

3.60%

3.625%

3.25

3.30

3.35

1992

3.50

3.55

3.60

3.625

3.30

3.35

3.40

1993

3.50

' 3.55

3.60'

3.625

-

2.05

2.05

2.05

2.05

1974

2.90

2.90

2.90

2.90

1984

3.30

3.35

3.40

3.45

2.15

2.15

2.15

2.15

1975

2.95

2.95

2.95

3.00

1985

3.35

3.40

3.45

3.50

1966

2.25

2.25

2.25

2.25

1976

3.00

3.00

3.00

3.05

1986

3.35

3.40

3.45

3.50

1967

2.35

2.35

2.35

2.35

1977

3.05

3.05

3.05

3.10

1987

3.40

3.45

3.50

3.55

1968

2.45

2.45

2.45

2.45

1978

3.05

3.10

3.10

3.15

1988

3.40

3.45

3.50

3.55

1969

2.55

2.55

2.55

2.55

1979

3.10

3.15

3.15

3.20

1989

3.45

3.50

3.55

3.60

2.65

2.65

2.65

1980

3.10

3.15

3.20

3.25

(Accrued interest to be added)

1990

3.45

Scales

Year
1)

1964

2.65

1962-1993

C

1965

1970

1962-2000
1961-2000

Maturities, Yields and Prices
Scales

Year
Due

1961-2000

3/8% due 1961-2000
■

-

1961-2000

3.50

3.55

(Where the yield and the coupon are the

same,

Due

1994

3.50

1995

3.50

1996

3.55

1997

3.55

1998

3.60

B

A

-

3.55

1999

3.55

2000

3.55

2001

3.55

.

-

3.55

3.60

3.625

3.55

3.60

3.625:

3,60

3.625

99

3.60

3.625

99

3.625

99

3.60
3.60

3.625

99

3.60

3.625

99

3.60

3.625

99

4

the price U par)

w
The Bonds of each Issue will be callable fifteen

years

from their date

at a

call price of 104 and accrued

The Bonds are being offered, subject to award, when, as and
if issued and received by
offering is not made hereby, but only by means of the Offering Prospectus, copies of which

Blyth & Co., Inc.

Phelps, Fenn & Co.

Lehman Brothers

;

Goldman, Sachs & Co.

us,

may

interest, and thereafter,

at

the times and call prices,

as

stated in the

Offering Prospectus.

and subject to approval of legality, with respect to each issue, by bond counsel to the underwriters. The
be obtained from such of the undersigned and other underwriters as are registered dealers in this Slate.

Smith, Barney & Co.

The First Boslon

Shields & Company

/

Corporation

Harriman

R. W.

Ripley & Co.

Pressprich & Co.

Incorporated

V

Drexel & Co.

Easlman Dillon, Union Securities & Co.

;

'

,

A. CJ

'< Equitable Securities Corporalion

v

Merrill Lynch, Pierce, Fenner & Smilh

.

Stone & Webster Securities Corporation

I

Incorporated

....

.

City Bank of New York

White, Weld & Co.

Bacon, Whipple & Co.

Alex. Brown & Sons

Coffin & Burr

-

F. S. Moseley & Co.

Corporation

Paine, Webber, Jackson & Curtis

Bacon, Stevenson & Co.

Kean, Taylor & Co.

"

Wm. E. Pollock & Co., Inc.

Braun, Bosworth & Co.

Incorporated

Clark, Dodge & Co.

Incorporated

Incorporated

1

Craigie & Co.

Gregory & Sons

Reynolds & Co.

A. G. Becker & Co.

F. W.

J. C. Bradford & Co.

Estabrook & Co.

Ira Haupt & Co.

Incorporated

.

Higginson Corporation

Hirsch & Co. *

Baxter & Company

,.

American Securities

Francis I. duPont & Co.

Eldredge & Co.

L. F. Rothschild & Co.

R. S. Dickson &

-

Dean Witter & Co.

•

First of

Company

Incorporated

Folger, Nolan, Fleming-W. B. Hibbs & Co., Inc.

Company

W. E. Hutton & Co.

McDonald & Company

The Ohio CompanyRand & Co.

Roosevelt & Cross

The Northern Trust

Bankers Trust

Company-

Barr Brothers & Co.

•

Continental Illinois National Bank

Dick & Merle-Smith

The Philadelphia National Bank

Fidelity Union Trust Company
Company

Carl M. Loeb, Rhoades & Co.

Seattle-First National Bank

Industrial National Bank

The First National Bank of Oregon
.

,

Company

Hallgarten & Co.

Tucker, Anthony & R. L. Day

Chas. E. Weigold & Co.
Incorporated

Blair & Co.

City National Bank & Trust Co.

Incorporated

Kansas City, Mo.

Laidlaw & Co.

A. M. Kidder & Co., Inc.
J. C. Wheal & Co.

Ladenburg, Thalmann & Co.

Mercantile-Safe Deposit and Trust

Dominick & Dominick

Weeden & Co.

Incorporated

Hayden, Stone & Co.

Incorporated'

The Marine Trust Company

Bache & Co.

of Western New York

Company

The National State Bank
Newark

National Bank of Commerce

National Bank of Westchester

of Seattle

White Plains, N. Y.

Tilney and Company

W. H. Morton & Co.

■

Providence, R. I.

First National Bank
in Dallas




Stroud & Company
Incorporated

■

B. J. Van Ingen & Co. Inc.

Newark

Federation Bank and Trust

,<

Company Chemical Bank New York Trust Company Morgan Guaranty Trust Company The First National Bank Harris Trust and Savings Bank C.J.Devine & Co.
Kidder,Peabody & Co. Salomon Bros.& Hutzler
of New York
of Chicago

and Trust Company of Chicago

Mercantile Trust Company

Fitzpatrick, Sullivan & Co.

Incorporated

Shearson, Hammill & Co.

Incorporated

The Chase Manhattan Bank

Wood, Struthers & Co.

Michigan Corporation
Geo. B. Gibbons &

"

Hornblower & Weeks

Hemphill, Noyes & Co.

Incorporated 1

E. F. Hutton &

I

Bear, Stearns & Co.
i.

Allyn and Company
Incorporated

Lee

The First National

/,

•

,

of

Charlottesville, Va.

Baker, Watts & Co.

t

The Peoples National Bank

Tuller & Zucker

Trust Company of Georgia

Third National Bank in Nashville

G. H. Walker & Co.

The Commercial and Financial Chronicle

,

8

(2388)

Air

DEALER-BROKER

Products

INVESTMENT LITERATURE

in

the

cussion

of

Amelex

RECOMMENDATIONS
MENTIONED WILL BE PLEASED

FIRMS

LITERATURE:

PARTIES THE FOLLOWING

INTERESTED

SEND

TO

THE

THAT

UNDERSTOOD

IS

Kawecki

M. Kidder

Co., Inc., 1 Wall Street, New
York 5, N. Y. Also available is a
report on Harden Corp., Miniature
Precision Bearings Inc., and New
&

&

Hartford

4, Conn.

Co., .6

Hampshire Ball Bearings, Inc.

and

Aluminum Industry—Review

Equitable

—

Canada
Toronto

Stock Notes

—

York City Banks—

leading New

Investment

Capital

Europe—Study—E.
York 6,

in Western
F. Hutton &

New

Broadway,

61

Company,

N. Y.

Co.

Board

W.,

N.

Street,

Marietta

11

1, Ga. Also available are
Boeing Airplane, Garrett,

Atlanta
on

Martin and North American Avia¬

Electronic Associates, Inc.

Re¬

—

Meade & Co., 27 William

St., New York 5, N. Y.

yielding from 1 to 4V2% and in¬
from $10,000 surtax bracket

comes

to

Dis¬

—

December "Investment

in

Letter"—J. R. Williston & Beane,
2

Broadway, New York 4, N. Y.

Federal
Issue

State

&

Booklet setting

Original

Stock

Transfer

and

$200,000—cross-indexed—

over

Braun, Bosworth & Co., Incorpo¬
rated,
Toledo
Trust
Building,
Toledo

Rates—

Tax

forth current rates

—Registrar & Transfer Company,
50
Church Street, New York 7,

4, Ohio.

showing

—

compari¬

up-to-date

an

listed industrial

the

between

Dow-Jones

the

in

used

Folder

Averages and the 35 over-thecounter industrial stocks used in

Quotation

National

Casualty Insurance Stocks—

both as to yield and
performance over a 20-

Averages,
market

of Sept. 30,

Gold

period — National Quotation
Bureau,
Inc.,1 46
Front
Street,
New York 4, N. Y.
Public

Stocks—

Common

Utility

Comparative figures—G. A, Saxton & Co., Inc., 52 Wall Street,
New York 5, N. Y.

1960—Kidder, Pea-

of Cycles to

Policy

&

son

Webber, Jack¬

Street,

Broad

Curtis, 25
N. Y.

New York 4,
Sea

Industry—Review with

Food

Trade

Analysis—Dean Witter & Co., 45
Montgomery Street, San Francisco

C.

Ziegler

•

-

and

o y e r,

Randolph Corp.

—Schweickart

&

Co.,

Cenco

Instruments

poration

Analysis

—

29

•

•

.

Bulletin—

—-

Darlington - &
Grimm," 2
Broadway, New York 4, N. Y. Also
is

available

Citizens

market review. '

a

&

Market

—

Review

—

Securities

Co., of New
Broadway, New
York 6, N. Y. Also available are
Ill

Toyo

Rayon

Co.,

Winds

Kentucky

Co.—The

Company, 320 South Fifth Street,

December "Investor's

Digest" dis¬
Stainless
Steel Industry, and Machine Tool

cussions of the Japanese

Industry.

Company

Dobie &

letin—Draper

West,

Adelaide Street,
Toronto, Ont., Canada.
25

Vending Machines

R

—

e p o r

t—

•

^ '

National

Southern

,

&

Sons,

Garrett
Building, Balti¬

Garrett

3, Md.

more

1

,

—

New York

is

6, N. Y. Also available
of Worthington Cor¬

review

a

poration.

,;

;;'

.

,

Polytronics Laboratories,
Inc. —
Bulletin—T. M. Kirsch Company,
52 Wall

Street, New York 5, N. Y.

Republic National Bank of Dallas
—

Analysis

Dallas Union Secu¬

—

Co., Inc., Adolphus Tower,
Dallas 2, Texas. Also available is
a memorandum on Southland Life

—

26

Insurance Co.

S.

Report—S.
Broadway,

(

'

Ball

Bearing
Co.)—Analysis—W. E. Hutton &
Co., 14 Wall Street, New York 5,
Also available is

N. Y.

analy¬

an

of Time, Inc. and a study of
Gold and the Imbalance
in the
International

of

Balance
ments.

Pay¬

/

*

Sav-A-Stop Inc.^-Memorandum—

Inc., '"50 Broadway:

Crow

Pistell,

New York

•; *

'

(Swedish

F.

K.

:

4, N. Y.

•

,

—

Financial

Commonwealth

.

*

sis—Reynolds
way,

is

available

Co., 120 Broad¬

&

York

New

5,

N.

Y.

Also

memorandum

a

on

Stock

Market

—

Survey

Securities Co., Ltd., 61

New

available

York 6, N.
analyses

Y.

are

of

Corporation

W.

Taylor,

F.

639

Bulletin—

South

Spring

Street, Los Angeles 14, Calif.

.

.

.

Chemical

■

Corpo¬

Ltd.

Analysis

—

Securities Co., Ltd.,

—

Co.,

Corp.

Daiwa

149 Broadway,

Ira

Puerto

Haupt &

New York

.

Rico—Review—

Broadway,

Co., Ill
Y. -

York

New
is

available
tron

4,

N.

review

a

Also

Y.

Cheme-

of

Union -Bank

Fox,

Leasing

Development

&

Corp.—Analysis—L.

J.

&

Termo

Madison Ave¬
New York 16, N. Y.

Gerald

Inc.,

79

Electric

Emerson

S.

R

—

i

e v

e w—

31 Milk Street,
9, Mass. Also available are
reviews of Joy Manufacturing and

and

Co.,

Fuji

Iron

Steel

&

Co.,

Co.

Colby,

Mines—

Nickel

Street,

Limited,
217
Bay
Toronto, Ont., Canada.
Co.,

Stores—Review—

National

Boenning & Co., 1529 Walnut St.,

2,

circular

data

are

in

Also

Pa.

the

Great

on

Atlantic & Pacific Tea Co.
Power

Light—Memo¬

&

randum—Orvis Brothers & Co., 15

Broad

a

,

—H. Hentz &

Corp.—Analysis—Blair &
Incorporated, 20 Broad Street,

New York

study of the market
-■/

»■.

F. W. Woolworth &

Huyck

•

Co.—Analysis

Co., 72 Wall Street,

New York

is

5, N. Y.

an

5, N. Y. Also available
analysis of Kansas Power &

Light Company.

International Resistance Company

Witt

—Bulletin—De

ganization,
New York

Conklin

Francis

Broadway,

120

Inc.,

Worthington

Or¬

Telephone

R.

II.

Macy

CHICAGO, 111.

Co.

&

—

Analysis

Street, New York 5, N. Y.

Also available

memoranda

are

828

F.

associated

Weeks.

&

(Special to The Financial Chronicle)

—

PORTLAND,

Street,

Oreg.

—

Loren

of

Blyth & Co., Inc., Pacific Bldg.

Cement—Review—L.
&

Co.,

Now With Hagen

120 Broad¬

New York 5, N. Y.

,

•

Co.

(Special to The Financial Chronicle)

Oreg.

Harry

PORTLAND,

view—Carl

Tuttle, Jr. is now affiliated

M.

Loeb, Rhoades

&

Co., 42 Wall Street, New York 5,
Y.

Also available

are

reviews

E. I. Hagen
Bank

—

financial institutions

Primary Markets In:

& Co., Inc., American

Building.

on

Utilities, Illinois Power and
Niagara Mohawk Power.
Geco Mines Limited

Review-

—

James Richardson & Sons,

SMALL BUSINESS INVESTMENT COMPANIES

Wall Street, New

General Atronics
Boston

Greater Wash. Indt'l Inv., Inc.

Capital Corp.

Continental Capital Corp.
Electronics Capital Corp.

Growth Capital, Inc.

♦Mid-States Business Capital

Electronics Int'l Capital Ltd.

Narragansett Capital Corp.

Florida Capital Corp.

Techno Fund Inc.

Corp.

Virginia Capital Corp.

General

Cable

Halle

Stieglitz, 52 Wall Street,

&

New York

General
in

New

Request

Electric

74

Trinity Place, New York 6, N. Y.

5,

issue

are

of

Co.,

and

i




Teletype NY 1-376; 377; 378

N.

Y.

Also

reviews

North

Tucson

reports

on

Refining

Chemical

Floor

Brokers—Specialists

the

in

of Insur¬

America,

Na¬

Electric

Gas,

American Smelting

Co.,

Co.

Rexall

and

Drug

Union

Frank €. Masterson & Co.
Established

1923

&

Bag

Members American Stock Exchange

Camp Paper Corp.
General

HAnover 2-2400

Review"—

Co., 40 Wall Street,

Light & Power Co., Walgreen Co.
&

Members New York Security Dealers Association

Co.—Discussion

"Business

York

Co.

Retail Distribution

tional Gypsum Co., Owens Illinois

Glass

Troster, Singer & Co.

Corp.—Analysis—

5, N. Y.

current

ance

on

Trading Markets

Street, Philadelphia 9, Pa.

same

*Prospectus

Memorandum

—Harrison & Co., 123 South Broad

J. A. Hogle &

Franklin Corp.

1960

1923

Inc., 14

York 5, N. Y.
—

Instrument

—

Memo¬

Stonehill &
Co., 70 Pine Street, New York 5,

randum—Federman,
New York.

74 TRINITY PLACE

Telephone IlAnover 2-9470

G.

with

Texas
For

L.

Wyss has been added to the staff

Phillips Petroleum Company—Re¬

N.

with

208 South
formerly with

Blyth Adds to Staff
Corp.

Seventeenth

Rothschild

way,

Jay M. Washer¬

La Salle St. He was
Hornblower

2, Colo.

Permanente

—

become

J. R. Williston & Beane,

—

Memorandum—Boettcher & Com¬
Denver

—

Co., 1 Wall

Aircraft

analysis of McDonnell
Corporation.
Financial

has

man

4, N. Y. Also available is an

pany,

&

(Special to The Financial Chronicle)

Incorporated, 300 Park Ave¬

Dreyfus & Co., 2 Broadway, New
York

Memorandum

Pont

Joins Williston Beane

Tele¬

&

New York 22, N. Y.

nue,

—

du

Street, New York 5, N. Y.

graph Company—Analysis—Evans
& Co.

I.

5, N. Y.

Midwestern

Florida

'

of Mitsui Bussan, Union Sugar Company^-Analysis
Kaisha, Ltd., Nippon Light Metal —Kalb, Voorhis & Co., 27 William
Co., Ltd., Taisei Construction Co., Street, New York 5, N. Y.
Also

Universal Oil.

First

Los

Building,
;.■* " ;

analyses

are

International

Corporation.

Dilbert's

«

Comprehen¬

—

6, N

Daystrom, Inc.—Review—Auchin-

way,

Wall

study of Union Bank of Los
Angeles—Stern, Frank, Meyer &

Ltd.

of

•

sive

outlook.

pany

Story

Bank

Union

available is

Pa.

'

Engineering—Anal¬

6, N. Y. Also available .Angeles 14,'Calif.'"

New York

New

ysis—Cowen
& . Co., >• .45
Street, New York 5, N. Y.

Ltd., Kawasaki Steel Corporation,

Incorporated,

Co.,

&

Street, Philadelphia 2,

Broadway,

50

4, N. Y.

Temperature

,

Co., 48 Wall Street, New York
5, New York. :
Hitachi

&

York

Nippon Musical Instruments Mfg.

Taggart

1516 Locust

Philadelphia
—

.

cell

A.

same

Aeco

N. Y.

B r u n s,
Broadway,

—

115

Co.,

Heyden Newport

Memorandum—John M. Easson &

*

*

ACF-Wrigley Stores, Inc.—Analy¬

&

ration—Follow-up report—Charles

Falconbridge

Street, New York 5, N. Y.

Systron Donner.

Broadway,

South

640

&

Boston

Hemphill, Noyes & Co., 15 Broad

and

Miyaji Iron Works Co. and in the

—Nomura

Company — Review
& Co.,' 6.5 Broadway,

Pillsbury

Fahnestock

sis

—Memorandum—R. W. Pressprich

Bank—Analysis—Robert

Ltd.,

Japanese

Inc.

Co.,

Analysis

—

New York 6,

Hill,

graph Co.

of

Co.,

4, N. Y.

Nordeman

Broad¬

New York 6, N.Y.

way,

nue,

reviews

&

Corporation

Harvey

West, Toronto 1, Ont., Canada.

Senior Investment Portfolio—Bul¬

Inc.,

&

York

New

1

—

6, Calif. Also available is a review
of American Telephone & Tele¬

Yamaichi

Incorpo¬

Co.—Analysis—Wil¬

Brand,

Fuller

D.

and

to.

"

Report— Standard Oil of California—Mem¬
orandum—A. C, Allyn & Co., 122
Blaha & Co., Inc., 29-28 FortyCampbell
Chibougamau
Mines First Avenue, Long Island City .1,, South La Salle Street, Chicago 3,
Ltd.
Illinois.
• y'.
Analysis — Wills, Bickle & New York.
,r\, '■ :
Company, Ltd., 44 King Street,
Camp—Data—PurHeyden Newport Chemical- Cor¬ Stokely-Van

Company,

York,

Grolier

Staats

R.

Harvest

Memorandum-

Fricke
&
Franch, Inc., 123 South Broad St.,
Philadelphia 9, Pa.
M

Chese-

on

Spring Street, Los Angeles 14, Cal.

-

-

,

—

data

are

Pond's,

liam

Louisville 2, Ky.

Japanese

issue

rated, West Coast Telephone Co.

closs, Parker & Redpath, 2 Broad¬

particular emphasis on Van Camp
Sea Food Co., Seapak Corp., and

West
1961—

for

determine magnitude

and extent—Paine,

Prices—Bulletin—Barclay &

Crawford, 38 King Street,
Toronto, Ont., Canada.

Recoveries—Study

Recessions and

N. Y.

Investment

same

brough

of

Missions

Baker

150 Broad¬
New York 38, N. Y. Also in

Hallicraftfjrs

year

body & Co., 17 Wall Street, New
York 5,

Also

the

Commonwealth Oil Refining Com¬

Discussion of underwriting results
as

way,

Incorpo¬

Bureau

N. Y.
Fire

Co.,

Company, Security Building, West
Lie.

Engineering

Incorporated,

Co.,

United Lutheran Church of Amer¬

Canal

Over-the-Counter Index

the

Entertainment Companies
cussion

bonds

tax-free

covers

—

&

&

jraper

iMorinern

ureal

Fruehauf Trailer. ''

rities

Aircraft

ica—Bulletin—B.

Cameo

Milwaukee

Street,

Corp.—Review in December "ABC

Memorandum

American

Woodcock,

bonds

—

Becker

of

Michigan

Report —
207

—

Company,

Wisconsin.

Grumman

rated, 120 South La Salle Street,
Chicago 3, 111.

investment in state and municipal

stocks
—

G.

Y.

Incorporated

Investment Letter"—Amott,

Paper

Bend, Wis.

—

determine tax savings

2,

3, Mass.

Computations
through

1960 Comparator
to

son

tion.

port

—A.

Memorandum—
Granite Bldg.,

Milwaukee

East

Bowling

Congress, Street,

50

—

Rochester 4, N.

Dulles &
Walnut Street,

Analysis—Schirmer, Ath-

Co.,

Hornblower & Weeks,

—

oi

^

Depressed Stocks—List—Courts &

data

Bergstrom

Circular on

Laird, Bissell & Meeds, 120 Broad¬
way, New York 5, N. Y.

Co.,

Rayon;
Toanenryo Oil Company; Sekisui
Chemical
Co.
(plastics); Yoko¬
hama Rubber Co.; and Showa Oil

Securities
Low
Temperature
Physic s—
Limited, 60 Yonge Street,
Memorandum — Bull & Low, 45
1, Ont., Canada.
Wall Street, New York 5, N. Y.

forecast

Bank

&

Corp.—

Cronin & Company,

Co.—

Supply

International

—

Toyo

u r v e y—

Castings

Goulds Pumps

:

The

Boston

S

—

Street, New York 5, N. Y.

40 Wall

Battles, Inc., 1401
Philadelphia 2, Pa.

erton

Chemical;

Analysis

Central, Row,
*

Steel

General

Grolier

Corp.

tomo

dis¬

a

Chemical.

Hospital

Limited
(elec¬
tronics); Kirin Breweries; Sumi¬
Hitachi

Meei;

is

Memorandum—Janney,

Steel; Fuji Iron &

Yawata Iron &

Precision

General

&

Memorandum—

—

Putnam

American

Aircrafts—Report—A.

issue

same

Corp.

American
IT

in

—

Thursday, December 15, 1960

.

Co.; Shields & Company, 44 Wall St.,
Street, New York 5, N. Y. New York 5, N. Y.

72 Wall

Also

AND

Discussion

—

"Gutman Letter"—Stearns

.

.

NEW YORK 6,

N. Y.

Teletype NY 1-1140

Volume

192

Number 6012

.

.

The

type of investor.
commitments at the start

on

which exists in many of the long

Government

CHIPPENDALE, JR.

means

,

because, that

long-term

interest

pattern

rates

likely

to

improve market-wise

they find permanent homes in

The

trend

of

the

going to dictate in

no

the

ure

that

is

small

spite

lar,

It

is

of interest

5% is apparently evidence of such

limitations

a

evident

time

that

with

world

the

which

co¬

cause

has
of

come

funds

into

that

them

would

inventory

will

of

do

international
much

to

fi¬

improve

now

British

second,
Bank

reduction

rate

from

5

in the

%%

of

Governments,

Federal

to

as

well

as

R.

Allen

with

non-

obligations.

has

Electronics

believed

in

some

3424 East Lake Street.

of

quarters

NEW ISSUE

December 15, 1960

of

the financial district that the
capi¬
tal market rates will tend to
go
lower with the passage of time.

This

should

bonds

beneficial

would

the

to

about

going
but

to

the

there

will

this.

In

has

the,

the

time

Detroit

have

Year

To be dated

in

good

a

of

is

Bonds

maturing in the years 1983
on
any interest payment
any maturity to be selected by lot,
1/4 of 1% on March 1 of each year

missioner

obligations, much of which
coming from those who

now

formerly interested in equi¬

were

ties/.

.'-J.'/'"'

,

»:

T

demand

bearing

fixed

obligations

the

incline

but

the

for

Exempt from

been

into

the

last week.

came

of all

has

on

open

Quota¬

bonds, which include

corporates,

tax-exempts,

well;

as

as

Governments, moved ahead

an

institutional interest which

on

was

prominent in all of these securi¬

ties, with the largest volume be¬
ing in the non-Federal issues.
has

It

been

definitely

very

proved that buyers of bonds had
been
cent

getting the better of the re¬
new issue flotations by wait¬

ing

until

stale

syndicates

were

dissolved and these offerings were
in

down

to

price to levels that

their

liking..

watchful
another

way

This

far

as

the

as

the

of

AMOUNTS, MATURITIES, COUPON RATES AND YIELDS OR PRICES
Coupon Price

Coupon Price to

new

Yield

Amount

Due

$2,185,000

1963

5%'

2.20%

715,000

1964

5

2.40

Rate

Amount

on

the days

bid for. This seemed
to break the log jam because, not
the obligations which
substantially below the
flotation
prices bid up sharply,
but also
the longer outstanding
issues were bought by these in¬
were

gone

$

had1

question

this

appears

as

return

institutional

continue

put

to

is

which

,

obtainable in
securities.

fixed income bearing

Governments Firmer

tention because not a few of

these

selling at levels which
attractive to institutional in¬

bonds

are

vestors.

The

buying

ment bonds has been

the

1983

1,560,000

1984

5

2.90

1,055,000

1974

1968

4i/4

3.00

'1,100,000

1975

870,000

1969

3V4

3.10

1,145,000

1976

31/2

3.55
3.60

1,190,000

1977

31/2

3.65

moved

Recently,
been

of Govern¬
pretty much

professional side, which
quotations have been
about very readily with-

out meaning very

those- who

much.

however,

buying
are

in

to

be added)

These Bonds

are offered when, as and if issued and received by us and subject to the approval
of legality by Messrs. Miller, Can field, Paddock and Stone, Detroit, Michigan.
,

Offering of these Bonds is made only by the Offering Circular, copies of which may be obtained in
of the undersigned as may lawfully offer these securities in such State.

these

any

■

.

.

State from such

known-as the




has

bonds

by

put-

Harriman

Ripley 8C Co.

Incorporated

C.

J. Devine 8C Co. Goldman, Sachs & Co. Kidder, Peabody 8C Co.

Merrill Lynch, Pierce, Fenner & Smith
Incorporated

Bear, Stearns 8C Co.

White, Weld 8C Co.

A. G. Becker & Co.
Incorporated

Lee

Higginson Corporation

F. S. Moseley 8C Co.

Weeden 8C Co.

Blair & Co.

Hemphill, Noyes & Co.

Incorporated

L. F. Rothschild 8i Co.

Hallgarten 8C Co.

Shearson, Hammill & Co.

Hirsch 8C Co.

W. H. Morton 8C Co.

Incorporated

Adams, McEntee 8C Co.

Bacon, Whipple & Co.

Incorporated

Blunt Ellis 8C Simmons

Incorporated

Gregory 8i Sons

E. F. Hutton 8i Company

Rand 8i Co.

Roosevelt 8C Cross

Kean, Taylor & Co.
Stroud 8i

Incorporated

William Blair 8C

Company

Company

Coffin & Burr

Eldredge & Co.

Incorporated

Incorporated

Wm. E Pollock 8C Co., Inc.
Julien Collins & Company

Incorporated

The Illinois Company
Incorporated

there

Drexel 8i Co.

Lehman Brothers

Smith, Barney & Co.

that

means

:

1982

1,505,000

1967

835,000

F. S. Smithers & Co.

longer end of the Government list has also come in for at-

-

1,445,000

805,000

3%
3%
31/2
31/2

The

on

100

1973

stocks, because of the better

mon

are

1980
1981

1972

still

funds into bonds, instead of com-

:

1,335,000

1,390,000

975,000
1,015,000

on the
offset to
though there

is believed that many

.

3.40
3.45

2.60
2.80

3/2% 3.70%
33/4
100
100
35/4
3.80
33/4
3.80
33/4
3.85
33/4
3.85
33/4

an

anticipation buying of these
bonds so that yields of these se¬
curities can still move down.
It

.

1979

5

of

will

1,285,000

5

has not been too much in-the way

investors

1978

3.30

(Accrued interest

The supply is
as

U, 235,000

3%

considerable

been

but

3%% 3.20%

1971

1965

of

side,

it

or

Yield

Rate

1970

1966

non-Federal securi¬
ties were not being made a little
Too fast and at prices which made
them
unattractive to
buyers of
bonds.

Due

940,000

740,000

to whether or not the

as

offerings

ample

Amount

905,000

770,000

stitutional investors.
There

Coupon Price

or

Yield

Rate

Due

were

of them sell out

only

taxing authority within the State

any

are to be issued under the
provisions of Act 51, Public Acts of Michigan, 1951, as amended, and pursuant
provisions of a contract entered into under the provisions of Section 18(d) of said Act between the State
Highway Commissioner, the Board of County Road Commissioners of the County of Wayne, Michigan, and the City
of Detroit,
Michigan, for the purpose of paying part of the cost of constructing and planning new expressways in the
City of Detroit specified in said contract. These Bonds, together with the outstanding Bonds and remaining total
authorized issue, in the
opinion of Bond Counsel, will not be general obligations of the State of Michigan, but will be
payable solely out of the proceeds of annual payments to be made by the State Highway Commissioner, the Board of
County Road Commissioners of the County of Wayne, Michigan, and the City of Detroit, Michigan to the fiscal agent
of the parties,
pursuant to the aforementioned contract from their respective allocations and appropriations under
the
provisions of State law from the Motor Vehicle Highway Fund, being a special fund in the State Treasury into
which, after deducting expenses of collection, the proceeds of taxes imposed by State law upon gasoline or other motor
fuels and motor vehicles registered in the State of
Michigan are required to be deposited.

to

were

had

and all taxation in the State of Michigan or

were

course"

concerned since it
the
original
offering
prices down to levels that made
they

any

Exempt, in the opinion of Bond Counsel, from Eederal Income Taxes under existing
statutes, regulations and-court decisions

The Bonds

waiting also paid off in

offerings
brought
some

Interest

income

period cf time,

a

break-out

evidently
tions

for

and 1984 shall be subject to redemption at the option of the State Highway Com¬
date on or after March 1, 1974, in the inverse order of maturity, the Bonds within
at 103% if called on March 1, 1974, and decreasing said redemption price by
thereafter.

'

Strength in Non-Federal Bonds:
The

shown below

is¬

overall

demand for selected intermediate-

term

each March 1, as

mature

Coupon Bonds in the denomination of $1,000, registrable as to principal only. Principal and semi-annual interest (March 1 and
September 1, first coupon payment date September 1, 1961) payable in Detroit, Michigan;
«
New York, New York; or in Chicago, Illinois.

before'

proof

short-term

thereis still

To

January 1, 1961

have

the interest that

of

Expressway Bonds—Series II

are

being,

will

positive

developed

sues,

they

New

be

spite

to

as

market

money

STATE OF MICHIGAN

be

of the

seem

low

for

go

await

to

rates
as

turn

.

.

Short-term

in

recovery

economy.

gone

$25,000,000

help the flotation of

which

McDonald & Company

G. H. Walker & Co.

associated

Security

move

is

connected

Minn.—Kenneth

become

should

in the direction that will be
favorable to these securities.
It

Calif.—John

now

(Special to The Financial Chronicle)

MINNEAPOLIS,

distant maturities

and

is

With Electronics Sec.

are

being put to work in selected

short-term

position of the dollar. The lat¬

They

purposes.

Jr.

ordi¬

in

field

FRANCISCO,

White,

with Hornblower & Weeks.

be¬

narily be used for expansion and

the

SAN

H.

to be reflecting the demand

seem

9

With Hornblower & Weeks

development.
The money and capital markets

them by the

on

operation among the free nations

est, and

meas¬

the

position of the dol¬

more

of

passage

course

of

be put

may

international

the
economy

(2389)

future

in

nance

portfolios of investors.

is
evidently
a
growing
opinion in the capital market that
quotations of fixed income bear¬
ing obligations will continue to
improve

most

that these obligations will

continue
as

bonds,

chronicle

rates

not

chases, along with the thin market

<■

,

These
were

large but they have been increas¬
ing in size of late.
These pur¬

Governments

There

Commercial and Financial

away

Our Reporter

BY JOHN T.

.

Corp.,

1MWO!<BW„aw<BH!M!#wlsSWWIBll)mM(«SMB^^
11 ^

i

*»

(vstoH*

10

New Administration Faces,.

onstrate that our

foreign economic

the U. S. plays too small a role in

ued neither 10 the 19th
century concepts of
"protectionism" nor, for that matier, to free

foreign trade.
Ap ever-increasing number of
trade fairs is a program requiring
the immediate attention, of the

and

of

nations

national

I

old-

an

iashioned tar¬
and

wall

with domestic
The

outcome

this

years.
•.

exports,

the

U.

abroad

take

in

Sen Jacob K. Javits

the last

in

cam¬

* hardly imagined—whether
the adverse imbal¬
international pay¬

right

can

in

our

ments; whether our capability to
win in partnership with the other
free
world
nations
the
"cold
war";

whether the require¬

and
of

ments

S.

U.

peace

practical

for

leadership

be

purposes

placed first before domestic, sec¬
tional

convinced that we can and

am

should

round

structure as adminis¬
the President, with the

by
of

advice

gress,

supervision of Con¬

authority

creased

reasonably
labor.

President in¬

the

give

to

I

Commission

Tariff

the

and under the

we

S. tanff

out the U.

quota

tered

business

and

also

that

convinced

must expand our

characterized

be

struggle
bloc

What

led

the

by

will

60s

trade

with
the
Communist
by the Soviet Union.
American

the

believe

I

exports and
the

of

decade

the

that

safeguard

to

S.

U.

am

people must guard against is be¬
ing rushed or propagandized into
an
old - fashioned
protectionism
which will place the whole free
world

in

bring

jeopardy,

even

by

about

friends and allies,

our

themselves

The signs

tionist

measures

as

areas

the

during the same period.

September

the

at

the

representing

famed for its consistent sup¬

once

trade
measures,
adopted a resolution, embracing
nrotectionist proposals to estab¬
lish import quotas for several in¬
dustries, to prevent further tariff
of

port

free

reductions through

reciprocal

ne¬

gotiations affecting certain indus¬
tries. and urging a Congressional
investigation of our entire recip¬
trade

rocal

program.

Also there

drives

for protec¬

individual

are

tive

ouotas

tariffs

or

in

a

we

peace

and

in

the

;

all

;

:

political

nurposes."

deed, declared
war

a

S.

will

we

win

is not

the

ICBM but

time

these

drives is to drastically reduce our

of

Communist

nations

in

the

less

year,
sion

We

cial

of the free world has

1958;

and by the middle of this
1969, it will have doubled
free

world
trade

the free world

nations.

Pershing
NE.W

YORK

STOCK

Co.

Would

Congress

key

such

be

last

effective

assistance

to

U.

trade

.offering
S.

inter-

introduce a NaAct, major
legislation aimed at dealing
fairly with businesses injured by
foreign imports:
;
v
j pian to

gress>

tional

Trade

Policy

trade

,

,

directive from President

a

an

legislation

is

injured by foreign imports,
Early in the 1S61 session of Con-

in-

by-U. S. businessmen seekinitiate exports,
Export-Import Bank, which

Eisenhower

\

,

~

k

m

ui

+

+

^ u?« jfnd

would be able to extend loans a d

spring has been

VVGS^ ?,•
e.xfend technical and.financial. ssistance to communities, and p
pro-.efretraining and relocat
gram. We have become the world's
^stance to workers (as well as
largest single exporter with more
un?-mpi0yme^i paZ
than
17% share of world exports ! aff liberalized old age a d■
~

its program to insure
against political risks, or a U. S.
government initiated corporation,
should undertake this'new
stepping

more

and

up

«l

K

ac

c„r.

a

during

Indeed,

doubled

might

...

es^-s

expan-

extension .of export

which

of

core

policy
neefjed

by

Imports

V.
The

Those Injured

Aid

this

the; past decade

additional

without

stimulus—and

+£

in

competition with foreign business-

in

whose

men

hacked

greater

cial

"

governments

them

risk

40 years

with

such

Should such

latlon-

have

commer-

guarantees for the past
-

a program

1inI

are- ?ou
/
provisions of this leg S-

-

.

>

r

.V

r

(b) The President's decision to

extend assistance would1 not dePend on a finding by the Tariff

development of the less bring us' uo to their level with -Commission that imports are
developed areas,
trade
is very between 5% and 15% of all ex- threatening or causing serious moften
far. more
important' than, ports insured by the government JurY 'to a domestic industry—the
aid, and if adverse, can nullify against commercial and political Present "escape clause" formula,

;
EXCHANGE

and

•;

free

'

In

MEMBERS
V

&

the

months.

we unust
to the

under

the last six years, while our share

remained, though much
in size, generally stable.

stake

at

risks

The

expansion with

nearlv

in

mg to increase or

its trade and payments agreements
Soviet bloc

an earning capacity of between
$2go and $300 million annually. ,

eco-

curred

developed

doubled

with

that such investment would show

credit guaranties against commer-

than

year,

J)1fll+eve if

First,, to stimuexports* now at the reclevel of some $19 billion a

ord

with

1954

Congressional action, ^and here I
a reasonable estimate

same

S.

;

investment in terms of goods, mac
fjy and technical services
would also be stimulated by such

o

of U.

leadership
is

*T

.

wlT^b duri; limited dollar
In addition to capital
investment abroad, increased U. S.

late U. S.

for

areas

between

maintenance

coming

field

trade

,

.

fesources.

less that it was from
a relatively short

,

:

'"'«** arid h|p|rusr^mplish

has its work cut out for it in the

system."

our

bloc

the

to

.

the time it will take to
basic development objec-

pillion an- ening
;
°Teach

-

world

peaceful nroduction. We are
relentless in this and it will prove
superiority

it

reduce
or

•

Such legislation would attract
private capital into the very areas
where U. S. and free world economic aid is directed, thus short-

foreign

by

'

nomic

of

the

die East.

bi-partisan

The

over

the

in

S.

U.

three-pronged attack on
imbalance
requires

a

$1 billion

The threat to the U. S.

the U.

num¬

the

least

—at

".

us

in the peaceful field of trade.
declare

steps

initiative and
support, but its implementation
could result in reducing our *4
billion
international ; payments
deficit to manageable proportions

has,, inr

upon

administrative

1950 to 1958—in

most

He

war

to the

dollar

strong

Khrushchev said
and

nually in \additional investment
for Latin America, Africa, South
and Southeast Asia, and the Mid-

U. S. join it.
Administration

attention

its

return of some $250

Such

;

.

to

.

reasons

-

of

V

Such a move could make
available some $700 million an-

areas.

required to stimulate at
25% increase in tourist

a

our

political

as

the

new

nually

in 1955: "We value trade least for

41

of

a

isolationism

economic

devastating

do not do so,.

types

metals.

the

is deferred
earnings are
less developed

in

re-invested

support

its

lend

a

their

on

overseas investments
so long as these same

or

visitors—again which would mean

and

"economic

industries, like certain
of textiles, chemicals and
objective

least

challenge, for the Commu¬
nists, through state trading, are
in a position to take many of the
products we now import off the
hands of our supplier; nations, if

The

The

having

additional

the collapse of all these
the U. S. driven to¬

see

as

ber of key

fabricated

to

15%

should

direct

should

Another vital factor is the Com¬

.

to

Third,

munist

area

an

and

ef¬

our

range

to the establishment of the OECD

.

less developed

freedom

isolationism.

16

year.

istration

to

an

just

Then in
Southern

Conference,

Governors

of

and

efforts

jumped

reductions

a

we

ist drive in the next two months

world,

Those requesting increases
in U. S. tariffs increased bv 340%

Governors'

the

essential

so

success

ward

late

increase

and

aid to

in

which

short

$3 billion
Second, the new Admin-

ports by some

travel

coordinate

national

new

target, the expansion of U. S. ex-

Organization

forts

of

as' its

have

should

the Congress,

legislation,

policy

the

associations and labor unions op¬

tariff

trade

for
Economic
Coordination and Development to

protec¬

enactment

the

the

back

deferrals

tax

of

profits so long as the income is
re-invested in the same kind of
area was the basis of the bill introduced by Rep. Hale Boggs and
passed by the House but not acted
upon by the Senate last year.
In
1961, Congress should pass such
legislation and also a "cross investment" provision whereby payment of taxes on profits from all

Bonn

at

nations with

developed

less

system

First, the new

should

before

task

and laws

could

posing

time

same

S. Tariff Com¬

last

from

briefs

written

and the

settle trade prob¬
lems, but success in a protection¬

the

In

major

over

one

happened

Administration

engaged in the establish¬
ment with these same nations of

five years,
firms, trade

mission.

by

in

Attack

we

of payments.

ance

and greater
exports (they in¬

is apparent in the

of the U.

records

needed any

of. new
our

^

:

cannot-. assume that
we alone can write
the ticket on
how to redress this adverse bal-

now

are

retrograde dan¬

additional

for

pressures

At

us.

of danger are every¬
intensification of the

the

we

what

After

recently,

can

50%
to these
areas in the first quarter of
1960
as
against, a less than 20% in¬
crease
of our imports from them
in the same period), and on the
other, a more effective means for
organized retaliation if we dis¬
criminate against their exports to

gerously in our policy.
where:

promise

creased

imports—

certain
can

we

well

as

If

-

we

'
~

Three-Pronged

living standards are de-

average

plorably low. The establishment
of Foreign Business Corporations

international

$4

Advocates

of

markets for

and those con¬

exports,

by

otherwise

dangerous trade retaliation against
us

the

believe

what

on

'

Bill

Bo-jrs

.

eliminate the ex-

effort to

an

billion
payments deficit. '

this, there is the re¬
taliatory power of the new trad¬
ing blocs in free Europe which
give us on the one hand, if we
continue our present trade policy,

171%.

interests.

individual

or-

who

those

harmed

contenders

ance

with

cerned

a

the

Presiden¬

paign

sell in exports.

now—those con¬

themselves heard

in

pected

we

in

"reminder

my

cerned with peace

the last ten

deal with this
through increasing

effect*

decisive

making is clear, and it is essential
that all economic interests make

S.

even

the

and

the

Favors

,,,

forces from abroad, cutting
U. S. imports or the amounts our
tourists can
spend by some $4
tary

know that what
imports will have a

yet

creased sales abroad.

f avors lie
ag* 15 11
;j.
Further, essential elements in
the comprehensive export legislation include providing incentives
billion annually, or cutting ap- through
tax treatment for inpropriations for Mutual Security creased U. S. private investment
and technical assistance programs in the developing areas inhabited
to the point of real
inadequacy by some one billion people whose

outflow;

general agreement that
is

built upon for the benefit of in-

illusions abroad that we

may

a

imbalance

dis-

muse

we

sane,

own

resort to drastic remedies
such as recalling necessary mill-

interna¬

our

Our

pel any

the primary way to

protectionist drive is in the

ioned

strug¬

For

estimated $10 bil¬

an

.

There is

at home.

economy

nations is

v» Import Limits Hurt Exports

'

in
the less developed countries which
eould prove decisive and
mate¬
rially retard the economic and so¬
cial development of these coun¬
tries, and jeopardize seriously our

gle will de¬
cisively affect
the
prestige

and

of

national payments in

v

policy during the grim "cold war."
Yet, the signs that an old-fash¬

produ ction.

I

se¬

mutually advantageous

next Administration and its Cornmerce Department, so that the
impressive start made by the
Eisenhower Administration can be

in which a great expansion in the trade of its member
economy

ci; dollars expected to exceed in¬
flow by over $4 billion for' 1960,

intention to sound the
warning early, for old-fashioned
protectionism,
like isolationism,
must be ruled out as part of our

titive

p e

Soviet Union

the

give

It is

keep

imports

can

the

is

tional payments, with the

Communist bloc an advantage

own

quota

to

out

we

board

control

lion adverse balance in our inter¬

mean

tial

our

culminating

tectionism

two

on

imbalance

rious

we

way

A red light

15%, or $3 billion per year, and

struggle is shaping uo
over protectionism in the foreign
economic policy of the U. S. in
the new Administration.
By pro¬

of

it.

in

is

trade, but is one based on trie
economic realities of a free world

realistically

guaranty program, trade fairs,

major

of

stake; in
when the U. S.
continue its development
economic

adapted to the tree world s needs
and those of the newly developing

he would expand our export credit
services and facilities required by
our exporters to do this.
Moreover, he favors passage of the Boggs
Bill to encourage investments to less-developed areas; explains his
bill to aid businesses injured by foreign imports; and proposes a
program to sell America to foreign tourists. Outlined are the harms
believed likely to occur were we to cut imports, to recall our mili¬
tary forces, to reduce tourism abroad, to- render ineffectual our
mutual security program and foreign aid.

c o m

heavy employ merit

economic policy

an

policy

history

our

and

exports

needs to

of alternative methods to rectify
our balance of payments deficit?
Senator Javits' affirmative reply
to his question constitutes a set ot specifics he recommends to the
new Administration.
We should, he says, increase our exports by

iff

is

heavy

a

our

coming to a head by the adoption

A

moment in

very

when tnere

protectionism seen

of "old fashioned"

Can we avoid the recurrence

Thursday, December 15, 1960

.

imports, yet this is happening at

United States Senator (R.-N. Y.)

Jacob K. Javits*,

Hon.

.

.

Lie

Fight

Major Protectionist
By

Financial Chronicle

The Commercial and

2390)

"

the

.

AMERICAN

STOCK

EXCHANGE

Thus, even if an industry is meet'in8 import competition but to do
imports of 27 products from the small, were
so must lay off workers, or relo20 other American republics sub¬
their
earnings
through
exports cate and consolidate its operaject to tariff or
refaction's while established exoorters were. tion.s< or invest large amounts ot
provided them with dollar ex¬ further exoanding sales. With it, capital which one or more of its
change three times greater than the average American business members cannot raise, the workU. S. government credits to +hem
would find itself
in a
stronger ers, communities, and businesses
and 10
timep greater than U. S. competitive position in everv adversely affected by this changeimnortant
foreign
market
government grants to them,
aM over win be eligible for assistance,
and cancel out aid in a

time.

120

BROADWAY, NEW YORK 5, N. Y.

Teletype NY 1-749-51

WOrth 4-4300

To

t

may
Hartford

Buffalo

Boston

Houston

Philadelphia

Lima, O.

Pittsburgh

South Bend




Chicago

Dallas

Los Angeles

San Antonio

Washington

stem

the

verv

short

Detroit

Fayetteville, N. C.

Minneapolis

'New Orleans

San Francisco

Wheeling

Younstown

St. Louis

do in

risks,

in 1959 U. S,

worrisome

new

mean

more

now

easilv

needed

foreign markets.

and

natA
nate

cprxHnAc
services

and

(c) The President would be authorized to provide tariff or quota

protection to

Government and nrivate groims
must steri up and better co-ordi-

correct; its imbalance of paymerits,' ' the new Administration

steps must clearly dem¬

that manv
firms, large and
seeking to increase

in many

the next few months

to

of these

would

the long-term credits

S.

the Congress must work to¬
gether in the implementation of
a
variety of measures affeeting
U. S. exports and imnorts.
Each

it

American

will be able to extend

uncer¬

tainty about what else the U.

Private Wires.
Atlanta

For example,

facilities

re-

domestic industry,

a

recommendation
of the
Tariff- Commission, < but at''the
same time may provide for a
UDOn

gradual

reduction

of such

addi-

quired by U. S. exporters, with tional- protective
.

special
of

the

attention to

the

situation

small businessman

who

in

period
loan

not

and

to

measures over a
exceed 7 years if

other

assistance

is ex-

Volume

tended

to

192

Number 6012

workers

and

eligible parts of the

in

industry.

r

owners"
affected

Y

r

.

tion of the Tariff

Commission, and

kind of assistance which
I have described to industries or
same

component

parts
of * industries
which because they have not been
the subject of any reciprocal trade,
tariff; concessions are not eligible
for relief. under the escape clause

peril point procedures.

or

Finally, the U. S. "export"
often.

so

overlook

when

.

we

first

glancing at our record of foreign
earnings is foreign tourist travel
in the U. S._ Foreign travel by
Americans is expected to amount
to more than $2,5 billion in 1960r—
representing really a U. S. "im¬
port" since these dollars go for
goods
and
services
paid
for
.

abroad; J It

would be ironic if

at

the very time, -that many foreign

.

nations,

,

longer plagued by

no

,

.

The Commercial and Financial Chronicle

the superimposing of new

THE SECURITY I LIKE BEST

the

...

"Super

raises the

Continued from page 2

were in 1955.
Papermate (1955)
portion is higher in much of the may have been a mistake. While
rest of the non-Communist world¬ profitable
it
particularly
has
ly fact, the company sold 3 y2 bil¬ ; tended, ; to dilute the over-all
lion
blades last year in
In 1959, the two
world growth record.
markets ;versus 2 billion' in the; together ; probably
contributed

Blue

level

factor,
Blades," which

of

basic

earning

States.

by

earnings,

higher dividends
mediate turn.

reserve

slowly,

position,
,

A

foreign

rising

ities inherent in the company's $30
million cash

around 50c-60c a share. Their di¬
growth
may well be faster than luting influence on the company's
that domestically despite the boost; growth, will - not therefore' be so
expected
here
from
the
large significant in the future as they
number of youngsters who will make up a smaller piece of a big¬
ger
pie.
(Unless,
of
begin shaving in the 1960's.
course,
women's hair styles change again.
To a considerable
extent, this
excellence of the company's earn¬ Torii's .' earning * powet has been
ings perfprmance in shaving prod¬ hurt by a shift away from, home
ucts has been obscured in recent permanents
as
styles
changed.
years
by poor results, from ■ a This writer, however, has no abil¬
growth point of view, at its Toni ity to predict the course of hair
Gillette's

price of 86 does not discount

these prospects. The current 22.3
times valuation of the approxi¬
mate $3.85

a

mated

this

line

for

line

share earnings esti¬

with

year is about in¬
the multiples enr

joyed, by other high quality com¬
panies achieving a 6%-7% earn-r
ings growth' rate. Onlya slight
premium, if any,, is being paid for
the sharp upward shift in income
expected to be generated by the
fashions and therefore makes no new blade/Basic earning power
and
Papermate divisions;
Toni
allowance for an increase in theses could reach a $6 per share rate by
has been a profitable acquisition
1962 without exhausting, in any
earnings.)
(in 1948) but its earnings recently *
In the writer's opinion," there-, sense, the growth potential of the
company. ; Moreover, should GiN
have been no higher, than they
fore, what one has in Gillette is
lette by then," achieve on its re-served cash the 30% or better re¬
KEY- FINANCIAL DATA
: '

and

the

Capitalization

sists

the

of

outstanding
listed

are

Gillette

of

a

to

a

Current

turn

000,000's Omitted—
Sales

1939

1949^_____I

90.8

1954.i_„_

1622

Margin

Net Income

$18.0.

$3.3

18.3%

13.9

15.3

26.1:

16.1

it

Earnings

Dividends

$0.23

$0.15

1.57

0.82

2.77

1.75

should
vestors.

'

has

.

one.

Such

a

appeal

29.0

16.4

3.13

2.00

1956„.:___

200.7

31.5

15.7

3.40

2.25

If

y

194.9

25.9

13.3

2:80

2.25

herein

1958:___._;

193.9

27.6

-14.2

2.97

2.25

stock

1959

209.3

31.1

14.9

2.34

2.50

50%

230.0

37.0

16.1

3.85

3.00

eral years.

1960

:

(estimated)

-

invested

Kinnard Adds to Staff
(Special1

to The Financial Chronicle)

MINNEAPOLIS, Minn.—Robert F.
Danielson

Kinnard

is

&

now

with

This

is under

announcement

of

bill

an

offer to buy

any

to substantial

in¬

'

-

.

.

;

speculations
outlined
are
fully
realized,
the

can

or

be expected to advance

more

over

the next sev-f

If the rate of gain is

Street.

Now With

Wagner Co.

(Special to The Financial Chronicle)

COLUMBUS,
Irvine is
5

now

Ohio

U.

foreign

32

maintain

travel

East Long Street.

in

the

Increased

attractions.
most

obvious

and- most desirable

methods of improving our balance
of payments picture.
*An

the

Annual

,

by Senator Javits before
Dinner " of
the Investment

Association of New York, New York
December 6, 1960.

10th Avenue.

as an

offer to sell

or as a

(Par value $100

....

Price

Names 3 V.-Ps.
L.

Dresdner

Regard,

and

John

K.
W.

,

per

share)

City,

Pistell, Crow
Gerard

solicitation

Company

-

$102

per

Share

(Plus accrued dividends from December 1, I960)

Phillip

Hamilton

have been elected Vice-Presidents
of

Pistell,

Crow, Inc., 50

Broad¬

way, New York City, member
the American Stock Exchange,

has been announced.

of

Copies of the Prospectus
-

may

only such of the undersigned

it

or

be obtained in

other dealers

any

or

State in which this announcement is circulated from

brokers

as may

lawfully offer these securities in such State.

-

Mr. Regard, who was formerly
Vice-President and national sales
manager for Texas Fund of Hous¬
ton, Texas, will be Vice-President
in charge of dealer relations for

Pis,tell, Crow, Inc. Mr. Dresdner,
formely syndicate manager for
&
in

R.

charge

of

the

firm's

syndicate department. Mr.
Hamilton,
previously associated
with Lehman Brothers, will be
Vice-President in charge of sales.

Courts

;

Lynch, Pierce, Fenner 8C Smith
Incorporated

;
'

-

i

i

>

i-

\

'

*'

BlyihSC Coi9 Inc. The First Boston Corporation

'

''

•

'

Eastman Dillon, Union Securities 8C Co.

Beane, will be

Williston

Vice-President

J.

Merrill

•

Co. Will
&

AdmitNewPartner
CHARLESTON, S. C.—On Jan. 1
Courts & Co. will admit Thomas
Bennett to partnership. Mr.
Bennett will make his headquar¬
ters at the firm's Charleston of¬

Goldman, Sachs & Co.
i

Kidder, Peabody 8C Co.

Harriman Ripley 8C Co.
Incorporated

^

Lehman Brothers

Salomon Bros. 8C Hutzler

Smith, Barney & Co.
Incorporated

Stone & Webster Securities

Corporation

Clark, Dodge 8C Co.

White, Weld 8C Co.

Incorporated

Hemphill, Noyes 8C Co.

Hornblower 8C Weeks

Paine, Webber, Jackson 8C Curtis

Lee

Higginson Corporation

Reynolds 8C Co., Inc.

Wertheim 8C Co.

R.

Dean Witter & Co.

Wood, Struthers & Co.

Bear, Stearns 3C Co.

fice, 18 Broad Street.

Dempsey-Tegeler Adds
(Special to The Financial

ST. LOUIS,

,

Hallgarten 8C Co.

Ladenburg, Thalmann 8C Co.

Chronicle)

Mok—rJames W. Hard-

esty is now with Dempsey-Tegeler
& Co., 1000 Locust Street, members. of .the; New; York and Mid.west-Stock' Exchanges,*;
//




Equitable Securities Corporation
R. W. Pressprich

8C Co.

D.

He was for¬

with Foster & Marshall,

5.28% Cumulative Preferred Stock

address

e

Ore. —Chester

December 14, I960

and Gas

foreign

tourism, in reality, is one of the

1

L. F. Rothschild 8C Co.

Spencer Trask & Co.

T.

Bjerkei Jr., has becdme connected

Public Service Electric

the little island of
Nassau spending some $2 million
annually to publicize its tourist

y

'

EUGENE,

250,000 Shares

with

S.,

L

Foster & Marshall Adds

governments

bureaus

—

with Wagner & Co.,

of these securities. The offering is made Only by the Prospectus.

NEW ISSUE

the Senate in 1960 and
died
in the0 House.
Today, ,..the
U. S. is.fhe, - only major, power in
the world, .which dops not have a 4U
government
travel
office,
al-'r

G.

(Special to'The Financial Chronicle)

the

circumstances to he construed

no

John

Co., 80 South Eighth

merly with Midland Investors Co.

passed

though

is

This is the kind of situation that

176.9

;

on

be added to income.

1955.i_:___
1957

earned

capital through much 6f its his¬
tory, another $1 a share would

Per Share——

,

the

law to establish

quotation

88y2.

.

Income Statement

'

to
help "sell"
foreign tourist,
and I urge the new Administra¬
tion to support the enactment of
a

stock which

the New York Stock

U. S. Office of Inter¬

America

con¬

9,342,971 shares " of

Encouraging Tourism to the U.S.A.
Travel

inter¬

the

over

common

on

Exchange.

more

-

ly reducing or eliminating entire¬
ly restrictions on the amount of
money, their
nationals ,can take ;•1
out
of
the
country for tourist
travel, the U. S. should now re¬
verse the situation by clamping on
the same, kind of foreign travel
restrictions against Americans to
help correct the dollar imbalance.
And yet, the situation might de¬
teriorate to that point.

We need

albeit

probability, of

.

.

national

11

slower than herein projected risks
Will»; nevertheless, be minimized

power,
on ^an
already
strong
growth curve, while in the back¬
ground are the further possibil¬

.

United

serious dollar shortage, are great¬

.

(2391)

.

(d) THe President would be au¬
thorized to extend the same kind
of protection, upon recommenda¬
the

.

G. H. Walker & Co.

55 West

12

The Commercial and Financial Chronicle

(2392)

the services, .your own sources of

.

.

r

Thursday, December 15, 1960

AS WE SEE IT

information,
and
the
financial
press. If you hear or see some¬
most daily being called to our
thing that looks like it might be
worthwhile, write to the com¬ attention by the problems
pany's headquarters and ask for surrounding the commuting
BY JOHN DUTTON
information. You have nothing to
charges of the railroad—and
lose and you may learn a lot. The
less conspicuously by the con¬
worst that can happen is that you
won't receive a satisfactory an¬ troversies and the difficulties
that are being encountered in
There Is a Treasure of Information
swer but, in many instances," you
will be surprised to learn much connection with the fares to
Waiting for You to Ask
more than you anticipated. There
be charged on rapid transit
business are those who will say, "Why
Ideas are what we need in this are in the investment
facilities. When one thinks of
bother to obtain information when
and
write
them
on
your
letterhead.
business. New products*, new
the cat
is out of the bag
and the matter carefully, the fact
young companies are springing up
Don't Try to Study in the Office
everybody knows about it?" My emerges plain as a pikestaff
right and left. How to keep up
Or During Business Hours
answer is simply that
many new that a
with even a small part of this
good deal of this move¬
When
you
obtain
interesting products haven't even begun to
constant parade of scientific prog¬
ment into the suburbs with
make an impression on the earn¬
ress—that's the problem for most and informative material from a

SECURITY SALESMAN'S

CORNER

for It

security salesmen. Several weeks company, save it for a time when
ago a client asked me if I knew you can give it your undivided
anything about a company that attention and complete concentra¬
had brought out a new device that tion. The hours during the day
seemed to have great possibilities should be used for talking with
and
prospective clients.
in automation. She didn't now the clients
You should read and study when
name of the company, but a friend
of hers was an executive in a you cannot see customers or talk
where

bank

she

had

an

account

suggested the stock as a possible
speculation. After mentioning sev¬
eral
companies in this field, I
finally hit upon the right one,
"That's it," she said, "What do you
know about it?" I explained that
I did not know much, but I would
do some checking. I sent here a
statistical report and then
that

I

should

know

with them. The best time for this

is in

the

ends.

evening and

Then

rupted

you won't be inter¬
telephone calls and

by

other matters that need attention.

This is important.
It

is

quiet

also

place

work.

can

home

at

If

this

about

all

men

who

to

where

is

not

be

wish

have

a

you

possible

available

to

it

at

to

use

this company.

night or on weekends.
In this
So I wrote the executive office connection, I might add that some

for

an

annual

report

other

and

salesmen
office

like

to

into

come

the

Saturday ostensibly to
do some work. But since the day
about the new product and other
is quiet and the pressure is off
items
they were marketing. If
they make a few passes at some
you
obtain company literature
record keeping and then they want
which gives a complete descrip¬
to talk. If you are trying to work
tion with pictures of new prod¬
on a Saturday, and
you need quiet,
ucts''it" is V6i*y Mlpful. You can
it is not very helpful to have an¬
see how a company is advertising,
other salesman come up to your
its policies, and something about
desk and start to talk about last
its merchandising
concepts and
night's fight or the football game
abilities. Then if you
combine
tomorrow. If this happens, explain
this information with a serious
that you have some
important
look at their financial capacity
information

that

was

available

desk

and progress, as well as the mar¬
ket history of their stock, you have
a

much

sounder concept

on

do

and

ask

to

be

See News Items

almost

make

a

Often you will read about

products,

some

learn

ucts

let your

about

them, and then
mind dwell upon the pos¬

well

as

that may open up,
the possible competition

as

that

might develop. You are liable
come up with a situation that

to

can
begin
to
believe
in
enough to start putting some of
your client's investment capital to
you

work.

When

it

inventions,

new

drugs

or

to

speculative
need a strong
with able management,
not too large in size so that future
earnings can have a (per share)
impact.
But if you can look at
enough of these situations, obtain
comes

products

you

company

information

the

fundamentals,
balance sheets, income accounts,
facilities for manufacture, distri¬
bution outlets, and you see some
aggressive
promotion,
you
are
much better equipped to arrive
at an informed judgment than if
you
only
make
a
superficial
analysis. If your timing is right
and the price is not too fantastic
on

a

come

on

times earned basis, you may
up with several real winners"

during the next few
The

fellows

foresaw

the

advances

in

a

and

craze,

rental

operation

board

motor

larity

now

in

the

car

business, the out¬

and boating popu¬
current, and similar
trends had to pick the right com¬
panies in the field. The informa¬

tion that is available is often

company's

100,000 Shares

Political

Subsidy

Company

be

that

a

around
c e n

t

it

as

have

may,

we

now

situation

in

and

of

a

which

of

railroad

stockholders

share)

Underwriter who may
regularly distribute it within such
are offered
only by means of the

nouncement is neither

an

offer to sell

nor a

and

it

has

provided, but there is

reason

to doubt that in

a

form

building

materials and the
enormously en¬
by this suburbaniza¬
the population — to

like has been

which

no one, we are certain,
prepared to object provided
it is not the means by which
operations of those who have the great rank and file be¬
chosen to move to the sub¬ come too
heavily burdened
urbs.
In a good many in¬ with fixed
charges. Unfortu¬
stances, the time has come or nately, despite all the atten¬
is
approaching when these tion research economists have
stockholders will not, perhaps
given the subject of mortgage
can
not, continue to carry credit and instalment credit,
these costs. Meanwhile, com¬ no"
pne
has undertaken to

being required to bear a
part of the cost of the daily
are

have

muters

is

acquired

what make

11 y convincing
study of the balance sheet
position of the average con¬
sidy, and politicians — who sumer, but there is hardly
really control the situation— room for doubt that that posi¬
are not
eager to say them nay. tion has grown weaker in re¬
Just what would happen were cent
years—in goodly part as
these • commuters
generally a result of the suburbaniza¬
required to pay the full cost tion of the population.
of their daily journey to and
Labor Less Mobile
from work, we are not able to

more

say, but we think it highly
unlikely that they will be re¬

quired to do

so.

More prob¬
or

part of it will be shifted to

are a

Naturally, too,

this

great

increase in home ownership,
however desirable it may be
in many

accelerated

the

by

»

the

purchase of homes in

The

such

areas

wbuld

where

would

move

it-

with

Such ideal conditions are,

of
expected

course,'

est and rates of amortization

everywhere. There are many
reasons why labor is not as
mobile as capital, but it seems

below

the

true

market?

Administration,
Housing Admin¬

not

obvious to

to- be

us

that the situa¬

particu¬ tion about which complaint is
larly active in this area. Now, now made is in part a re¬
naturally, the difference be¬ sult of increased ownership of
tween actual costs and what homes by wage earners. Such
the builder or purchaser facts as these should be care¬
pays has to be paid by some¬ fully weighed by those who
one.
It does not take great are now undertaking to find
istration

State.

conditions

not be very, often

the suburbs at rates of inter¬

the Federal

Prospectus, and this an¬
solicitation of any offer to buy.

very

found, since
ease
with which millions of the men who operate the in¬
families have been able to get dustry which has moved else¬

greatly

or

Prospectus describing these securities and the
may be obtained within any State from any

securities

no

so

of our larger larged
population in tion of

many

ers

The Veterans

Company

instances,

some

transportation in the
of individually owned
quired to carry its own full automobiles acquired in large
costs, it would have occurred part by further additions to
in the same or nearly the personal indebtedness.
same
The market for automobiles
degree, remains a mat¬
ter of personal judgment. But in this
country, like that for
re¬

the funds for the construction

Price $18.25 per share

a copy

tation facilities could be pro¬
vided on a profitable basis in

own

Whether if it had been

far

Upon request,

ting about has to be found.
Conceivably public transpor¬

great many instances, subur¬
banites have provided their

that the, movement has been

Common Stock

business of the

heavy

respects, has tended
definitely to reduce the
the payers'shoulders.
mobility of labor, and thus to
But there are other ways aggravate the p r o b 1 e m of
in which this trek to the sub¬ those
"depressedareas" to
urbs has been and lis being which the politicians are so
subsidized. Who can;doubt fond of referring. Under ideal

NOT A NEW ISSUE

per

with

mortgage debts, but when one
moves to areas where
public
transportation is not readily
available, some means of get¬

been subsidized.

a

(par value $1

burdened

come

been

able is it that the burden

Cook Coffee

only have these subur¬
banites in many instances be¬

the "lose weight" seems to them to be a vested
product popularity, the lease back interest in this form of sub¬

bowling

complete than you would suspect.
plans for the future. Don't wait Next time try it out, ask for it,
see
what happens. Chances are
until someone asks you if you
you
will increase your under¬
think you see an opportunity to
standing not only of a company
capitalize on a situation. Watch but an industry.
other

also to be observed.

are

Not

)t

years.

who

Certain other economic ef¬
fects

daily trips into the central
city or near it for work has

sible markets

and truck rental

of your Write for Information When You

trip
through a plant, see the new prod¬
ucts, and make a valuation of the
company's marketing, ability if
you study the literature that some
companies will mail to you. And
they will usually be pleased to
send you this information if you
can

to

excused.

situation.
You

a

work

of these companies.
If you see pictures of new prod¬

new

advisable

decided the office should

more

week¬

on

ings of

Continued from page

economic

have

been

acumen

stand clearly

to

under¬

enough that the

"someone" in this

case

is the

national program for
the relief of these depressed

some

areas.

This suburbanization of the
Time will tell
whether this population mi¬
population in this country,

taxpayer.

Goldman, Sachs & Co.
December 15,1960.




gration—which has often left
the worst of slums behind it
—will prove generally benefi¬
cial to the country and its

along
home

with

its

increase

in

ownership and personal

indebtedness, is thus

people despite the fact that it to be an
has not paid its own way.
blessing.

entirely

seen

not

unmixed

Volume

192

Number 6012

The Need for

.

.

The Commercial and Financial Chronicle

.

effect

Intelligent
Forward Exchange Policy
an

in

Dr.

Einzig questions wh:ther
5% will help

tageous

us, and

the

sides

of

answer to

Bank

Rate

was a disadvan¬

of

three

LONDON, Eng.—After six weeks'

surprising

is

hesitation

been done

on

5

that

Rate

i/2%. The delay and hesitation is
understandable.

On the

funds

.

trend

could

of

short-

official

in

States

and
reversed
any
time
through the adoption of the tech-

resisting the gold outflow, and to that end they would
have

liked

flux

of

discourage the

funds

London

from

attracted

~

terest

to

rates.

New

by

On

is

justification for
The

balance

becoming

higher'in-

hand,
view, there

there

is

demands

flood

a

Bank Rate

a

of

is

payments

strongly

wage

to

other

a

cut.

York

...»

the

British point of

from
no

in-

adverse

of

and

unwarranted

which

bound

are

to derive encouragement from any

towards

move

relaxing the credit

There

is

to

reason

the way out of this

believe

that

dilemma

was

provided by the Ford transaction,
at any rate as far as its effect on
,,

,

the

balance

.

...

,

of

to

be

profitable.

lo c°nc^pr?ed- The receipt of
million

British

payment

m

holdings

of

some
the

for

Ford

shares

should

go
a
long way towards
meeting the import surplus, even

if

the

is

checked,,bydthe Bank Rate in-

influx

short-term

of

funds

There

is

everything to be said for the application of that device in _
situa...

tions

exist between London and
New York today. It would be a
as

mistake to bolster up the forward
dollar at an artificial level in face

of

a

sweeping speculative attack,

since

official

really

intervention

providing it with facilities

tificially

advantageous
no

such

State*

by
ar-

sweeo-

Had the

authorities

eansed

rise
the nremium
rise in
in tne
on
forward
piemium on
torwaid

dollars

terest

in

the

parties

vicinitv

of

its

in

y of its in

it

would

not

15

f

forward

dollars

one

mnntVic-

by the Bank Kate cut,
Correct

bill

desire
and

to

assist

the

safeguard the domestic
The

,

flow

the

desire

to

economy,

of

gold could be reversed,, and the United States gold
stock could receive a welcome
-

*

,

..

,

.

or

on

ry

n

W1I1S

t

i

a

The

/

LOS

Step

prevention

*

this

of

adjust-

On

u+

f

«

t>

*

+

worst 01 ooin worms oy enwage demands in

^rilam+witnout assisting in tne
+vwf
thP
jneck tne goia arain. jjor, naa ine

bach Paper Co.
The awards were

•

best

job

bach

printing

booklet

was

It also

that

means

as

a

rerained

fully

jemdJ,nea

iaiV

ZellerAF-GL

submitted

salesman

a.

as'

profitable

&

balancing

deficit

the

have

been

Admittedly
still
to

the

on

be

ming

the

incapable

tide

They

of

This

(

^

~

booklet

a

the

artist

ager.

Bruce

Account

Butte.

hours,

.

m.•

i,

with

increase

complete

of

to

be

they

the

are

limits.

narrow

and

Lawrence

N.

J.

Schade

What

which

that, since
obviously familiar with

right

technique,
applied

it

scaie

why
on

in

altogether
between the

crepancy
v ■

HILLS,•

offer

to

is under

buy

any

with

Gregory-Massari,

a

Joins

is

The

likely

green light

stand
i

.

-

1

'

Bank

to

order

the disforward

SAN FRANCISCO, Calif. —Rich(special to the financial chronicle)
ard M. Griffith, Jr. is now affili- DENVER, Colo.—William R. Maxated with Mitchum, Jones & Tern- well III is now connected with J.
pleton, Russ Building.
R. Holt & Co.,fl?0Q Broadwayr
J

1.0

no

circumstances to he construed

as an

offer to sell

or as a

solicitation

December 15, I960

350,000 Shares

Winn-Dixie Stores, Inc
Common Stock
($1.00 Par Value)

a

firm

with
''

'

-Increase

-

their
'

♦

More

the

domestic

as

a

encouraging unions to

.

From

reduction

Rate

interpreted

be

to

demands.

■

>

•

-

Price

.

Appropriate

point

and

economy,

$27.50

Share

per

Britiah's

of

of

a

genuine solution of the balance of
payments problem,
the Bank Rate

been

to

view

increase of

an

would have

7%

apnropriate than

more

duction
of

to

5%.

of

the

From

assisting

a

re¬

Copies of the Prospectus may be obtained in any State in which this announcement is circulated from

point

only such of the undersigned

United

the

or

other dealers

brokers

or

as may

lawfully off er these securities in such State.

States the Bank Rate is much too

high

even

German
to

be

order
to

at 5%. Both British and

Bank

to

would

Rates

brought

to

down

have

3%

reflation

out

punity.

with im¬
would, let

But to do so*
loose inflation both in Britain and

in

Lynch, Pierce, Fenner 8C Smith
Incorporated

Goldman, Sachs & Co.

Eastman Dillon, Union Securities & Co.

Hornblower 8C Weeks

Paine, Webber, Jackson 8C Curtis

White, Weld & Co.

Germany.

*

The
in

Merrill

in

enable the United States

carry

ward

why

pursuit of

problem- bes*

has

in

attracted

New. York

premium

in

forward

that-the

doPars

re¬

year some¬

thing dike

the

London
time

2%: below

between
it

and

has'

interest

New
been

York,

differ¬

ra+es

AU-dhe

profitable

covered.- What




-

Incorporated

,

Bache 8C Co.

Dean Witter 8C Co;

Francis I. duPont & Co.

to
is

Hayden, Stone 8C Co.

Equitable Securities Corporation
A. C.

in

transfer funds to London with the

exchange* risk

Loeb, Rhoades 8C Co.

short-term

was

mained throughout the
ential

Carl M.

intelligent for¬

exchange policy. Tho reason
the
higher Bank Rate in

Britain

funds

to the

answer

the

Allyn and Company
•

*d.

incorporated

326

1*011 aqus

(Special to The Financial Chronicle)

they
much

wage reduction rather than an in¬
crease.

Inc.,

Mitchum, Jones

of these securities. The offering is made only by the Prospectus.

de¬

for

Calif.—Philip
-

S. Sanders has become associated

--

of

call

would

of

Dempsey-Tegeler & Co.

is

deplored

the
highlv unsatisfactory state in the
shipbuilding and automobile in¬
dustries

C.

(Special to The Financial Chronicle)

BEVERLY

wages

disregard

the

„

seems

pressing for

now

for

With Gregory-Massari

,

NOT A NEW ISSUE

working week by

a

are

substantial

joint

Produc-

executive

of stem¬
wage

a

indeed gratifying that the have become connected with Wal- South Beverly Drive, members of
British authorities have applied ston & Co., Inc., 127 East Sixth the Pacific Coast Stock Exchange,
Mr
Sanders was formerly with
forward exchange policy even Street.

are

reduction of

two
a

an

was

^oun?^

Two With Walston
Guffin

t

Giorgio

venture of Dee W. White, AF-GL

*s

announcement

of

proceeding
unabated. The Amalgamated En¬
gineering and Shipbuilding
Unions, having recently secured

Zel-

a

^laung
placing

A

Bank Rate is

high side. But it

utterly

mands.

5%

a

by

For
i

tional Building.

or( pe°m 0 HE r™NCIALchronicle)
London as before the Bank Rate MEDFORD, Ore.—Andrew

ambitious

.

Dayton Bond Adds

to
1

-5,

Di

was

^ranJfer funds from New

eliminate

butflo^of gold the psychological
Vr
>; •
.
.
•»

affiliated

(special to the financial chronicle)

re¬

further weakened.

made for the

The

crease.;

asset.

Zeller-

among

customers.

lerbach
—

by

DAYTON, Ohio—R. Keith Fudge Witter
account
is
Richard
has been added to tbe staff of Cruikshank, a Vice-President
Dayton Bond Corp., Third Na- the agency,

'hanled Ban^Rat^ft wouldhave

more

the

become

with Dean Witter & Co., 632 South

gtish^th l^wouidhavegot

have

moderated

has

+v>„

couragmg

within such

the

ANGELES, Calif.-—-Robert J.

McDonald

•

contrary, since those tactics would

sult of the slight relaxation of the
hard money policy the chances of

i

Zi6ll6rD3,Cil AW3XCl

j

me1nntVa^dlcidedl^alsteD^?nUthe
Spring'street'
ment was ueciaeaiy a step in tne

not

It. means that instead of
meeting'1' the ; trade 4 deficit
by
short-term borrowing it is met by
selling out a valuable national

seems

the

United; States

con-

the

while

have

materially

It

York

mon^ ra*e was+V>«
aBowed
to take reinforcement.through
the
returnsecond,
the production and art
tViroQ
prhirrncfp' fiindc from
T.
Hon
care of itself the three months of arbitrage funds from London,
departments of the agency were
was
artificially prevented
given a seven transistor Westinghouse radio.
from adapting itself to the ngrDean Witter Adds
g °f the differential caused
(special to the financial chronicle)
Layout and design
of the

have

materially encouraged speculative
j

months.

is

New

sponsored

tween

widely understood

cut.

.

a

on

terms.

ing attack in evidence.
United

would

speculation

encourage

of

un-

•

have

support the forward rate at a
figure at which interest arbitrage
ceases

remained

intervention

that

to

,

payments position

under

which the authorities would

There is ' however '

squeeze

$3CO

.

pe-

a

result

the

TTT*

DOOKiGL

rate,
while discount for
three
months forward dollar is just over A booklet on Di Giorgio Fruit
1.3% per annum. It that dis- Corp. produced by the San Francrepancy really necessary? If only cisco
office
of
Albert
Frankthe authorities applied • forward Guenther Law,
Inc.
for
Dean
rate policy on a proper scale Witter & Co. won second
place in
there would be no conflict be- a contest

cut, the premium

three1

to

for
a

than

13

beenrate

have

the^ British authorities are^genu- nique advocated by Keynes,
inely anxious to assist the United

as

months

therefore

not

checked

hand,

one

unwanted

term

has

larger scale ^

...

The

by another cut of

slightly

month

Rate

changed. It is
that

this

an even

rr,i

its last reduction of

up

Bank

the

higher

the

one

for

fined

the

of

advantages

contracted

riod

intelligent forward exchange policy. Puzzling
Einzig is the limited application of forward exchange
policy

England

un-

the

Bank

of

not

lar

the

Bank

the

are

present situation is
by the fact that, while
forward premium on the dol-

the problem is said to

the

Atlantic

both

on

application of Keynesian forward

instead of its application on a more ambitious scale.

followed

the

of

aware

lie in the pursuit of an

to Dr.

rate and its interest parities. Even
after the Bank Rate cut, the London bill rate remains some 2.3%

indicated

lowering of the British

The

decline

a

authorities

the

tactics to

points out where and why it

for his country.

move

might have been

speculative selling.
Tnat

By Paul Einzig"

to

(2393)

-

R. S. Dickson 8C

,

Goodbody 8C Co.

Incorporated

-

E. F. Hutton 8C

Company

Reynolds & Co., Inc.

Company

'

,

■'

.

>

Shearson, Hammill 8C Co.

14

has become
in

Negative Aspects of Realty

real

be

to

and Chairman of the Board of

By Marvin Kratter,* President
the Kratter

may

1^anti-inflation
VAFtue of removpio-

barriers to getting off to the

not know about. Mr. Kratter's
estate investment trusts
companies deals with a
potentially troublesome aspects affecting

appear

real estate vehicle. Until

Kratter predicts this valu¬
financing will not be too hasty in selling

should be apparent
of

No

recent

in

much

years

affecting

the

new

that

now

initial burst of

has

Act

become

both

feasible

and

Kratter

Marvin

desirable.
Enthusiasm for the new Act de¬

rives from the fact that it amends
the Internal Revenue Code of 1954

provide substantially the same

to

for

treatment

trusts

ment

for

vides

companies.
regulated
that

invest¬

estate

real

as
present law pro¬
regulated
investment

laws,
investment~~companies
present

Under

distribute

90%

of

more

or

income are taxed
retained corporate
earnings and thus the distributed
portion of earnings are taxable
only
to
the shareholders.
This

their

ordinary

only

on

their

ment

is

now

fective
years

with

respect

begininng

trusts, ef¬
taxable

to

Dec.

after

31,

1960.

Unfortunately, there

also

are

a

number of unfavorable and poten¬

tially

to the

troublesome aspects

Act that must be faced by persons

intending to organize and operate
real

estate

These

investment

trusts.
as

U.

S.

Treasury

restrictive

sions

and

contained

Department; (2)
ambiguous provi¬
in

the

Act;

(3)

that at least

With

and

means

a

in¬

example,

of re¬

operating companies.

years

the

an

example of a restric¬
provision of
a

'rents

term

provision that

from

real

prop¬

erty' excludes rents from interests
in real property, if the determina¬
tion of such amount depends in
whole or in part on the income or

derived by any person
from such property (except that
any
amount so received or ac¬
profits

shall

on

a

by

not

be

reason

excluded

of

being

.

.

-

.

based

Inas¬

the inclusion of income-

as

Bonds "maturing

th°

in

be

can

and

£

new

tied

regulations.

«

,

It should be noted that even the
tax

granted by the
less significance

advantages
Act

new

of

are

operations than they

to real estate

would be to almost any other type
of

activity, inasmuch

as most purproperties generate

chases of real

sufficient
ductions

tions,
net

legal -depreciation
enable

to

sometimes

and

cash

large

flow

to

be

de-

propor-

all,

of

"tax

sharing and profit-sharing clauses

properties
real

deferred

basis)
are

sold.

until

the

$100,000,000

of

$50,000,000.
,

r

is neither

an

offer to sell

nor a

solicitation of

an

offer

to

buy

of the

Among other members

offering group are:
c.

J.

Sachs

Devine

&

(PaPer)-

Goldman,

Co.;

A. C. Becker &
Co., Inc.
Hemphill,

Energy in the American Economy

Noyes

Co.;

&

1850-1975: Its History and Pros-

Lee

Higginson Corp.; F. S. Moseley & pects—Sam H. Schurr and Bruce
Co.;" L,
F.7 Rothschild > &
Co.; C.vNetschert — Johns Hopkins
Shearson, Hammill & Co.; F. S. Press,
Baltimore, Md.
(cloth),
Smithers & Co.; Weeden & Co., $12.50.
Inc.; Hallgarten & Co.; Hirsch & Energy Resources and GovernCo.; and W. H. Morton & Co., Inc. ment — Materials submitted to
.

;V

V:.

the Subcommittee on Automation

,

*"<1 Eo,<;r®y

In New Connection
(special to t„e a™™*

with Dobbs & Co.

Federal

Joins Zahner Staff

District—George

and

Company, i- Dwight

In the past he

was

with

Company.

With Dempsey-Tegeler

(cl°tn)» $4.50.

Modern Railroads — The New
New York Central' — "Modern
Railroads,
441
Lexington
Ave.,

JrT

Free,
staff
17

of

East

CITY,

N.

"added" to*

the

Dempsey-Tegeler
10th

Co

&

Street.

Park,

Rarkp
cacne

Straus

HILLS, Calif.

has

Bache &

joined

the

—

of

staff

Co., 445 North Roxbury

be obtained from the undersigned.
r>

.

•

i

vm

(Special to The Financial Chronicle)

C. E. Unterberg, Towbin Co.

HOLLYWOOD, Calif.
Lockett

is

now

Clements'
December 14, 1960




16, N. Y.

ment

0f

Hollywood

&

—

with

John W.
Patrick

Associates,

Boulevard.

He

6425
was

previously with Standard Securities Corp.,.

(paper).

her gOVempublic debt—State
of Budget and

economy,

her

and

Hawaii,

Dept.

Review, $5.00.
Supervisor

With Patrick Clements

Newburger, Loeb & Co.

York

Hawaii's

Jack

^r*ve'
may

(paper).

State of Hawaii's Finances — A
description
and
analysis
of

QfaCC
3tatt

(Special to The Financial Chronicle)

BEVERLY

Calif,

Retention and
Destruction of
Bank Records—American Bankers
Association, 12 East 36th Street,
New

loinc
joins

Industry—Bulletin—
Menlo

Stanford Research Institute,

Mo. —John

has "been

York, N. Y.

Research for

(Special to The Financial Chronicle)

KANSAS

Copies of the Prospectus

Fifth

McKinney—

lefe Ave-. New Brunswick, N. J.

Zahner

Alloys Unlimited, Inc

Share

Win-:

Rutgers University PreSS, 30 Col-

New

per

W.

the

(Special to The Financial Chronicle)

Commerce Trust

$15.00

in

KANSAS CITY, Mo. —Charles F.

Buildihg.

Price

U. S.
Office,

Discount

Reserve

Administration

dow:

•

Super.:

(paper) $2.

Washington 25, D. C.
-

-

Documents,
Printing

Government

Jones has become connected with

(10c Par Value)

of

intendent-

is with United Southern
Companies, Inc.
In the past he

more

of these Shares. The offer is made only by the Prospectus.

Common Stock

byaEfdne1
Agencies

veiopmental

Ga.—William F. Gil-

ATLANTA,

any

135,000 Shares

.

Economic Indicators —1960 Supplement — Superintendent of
Documents, U. S. Government
Printing Office, Washington 25,
Co., Inc.; Blair & D. C. (paper), 60 cents.
.

&

Co.; Kidder, Peabody &
c0.; Merrill Lynch, Pierce, Fenner'&Smith Incorporated; White,
Weld & Co.; Bear, Stearns & Co.;

the

Also, the new

issue

and bring the total sold to date to

free"

investment trusts still

estate

Channel Press, Great Neck, N. Y.
,(ftlp^h),,v$5.95.
Current Economic^ Comment - re¬
Containing articles on .Some Economic Aspects of Military Procurement, Mineral Fuels in the
Soviet Economy, Development
Credit Corporations, etc. — University of Illinois, Champaign, 111.

in the City of

expressways

authorized

variable

largely

has- been

ago,

Mc-

Credit and Collection Letters:
New Techniques to Make Them
Work — Richard H. Morris —

Detroit. The'bonds being offered
are *he second series of a total

For

as a woninnovation about five

—

(U. S A.), 485 Lexington Ave.,
New York 17, N, Y, (papa-),

1974.

regula-

hailed

Jr

Harner

Marion

deemable on and after March 1,

trouble-"

very

the concept of

also

Creativity in a Business Readjust-

years

tne years

nt5o0™?n ma™ring-in

_

announcement

Albanv

c e

UIIlce' AADany>
(PaPerL
Attack Against Dogmatists and
'"Sectarians"—Handbook based on
materials in the Soviet Press
American Committee for Libera-

1963-1682/ inclusive, are not re- ment —Marion narper, jr.- ivic
bl
Dr;or +Q maturity Bonds Cann - Erickson
Advertising

was

This

O f M

rnmnt.roner's

^T°v

managed

group

Brothers,- Drexel & Co. and

and

Federal

to

gains

much

a

Barney & Co.

by Smith

new

of receipts

sales."-

being made by

.

.

With the tax impact (on a capital

or

bonds due

up; cost of constructing and planning

lining

-

fixed percentage or percent¬

ages

^
f.
An""(1 Rep.>rt ■ofThes Comptroller

and 3V4%
1963-1984, inclusive, is
3i/2%

in-'

estate

with

ambiguous

Act, there is

o£

State

$25,000,000

33/4%;

41/4%>

in-.

by technicalities in connection
Federal and State laws and

up

Example of Ambiguity

and

o£

Michigan Detroit Expressway 5%,

to snixt,
shift
to

time-consuming

annuities,
derful

To cite

in

laws

securities

ducing taxation now paid by these

tive

is

reference

these

real estate

ITTPTVQ

i

The bonds are being issued for
encountering; the purpose of paying part of the

selling organizations.

tions

as

JJcirnGy

Michigan Bonds
offering

would-be.

one

difficulties

serious

come'

use

Exchange

^

We are. in-:

real

a

trust

vestment

pressed by managements of vari¬
ous
types of operating and hotel
to

of

underwriter

state

vestment trusts

securities
shares
snares

oomnanv
company

reflecting this intention very pos¬
sibly could nullify intentions ex¬

companies

„

Funds

Mutual

selling

in

formed

what

as
contrasted to the
operations of businesses in¬
volving real estate."
Regulations

solely

classified,

With

somewhat hazardous.

active

crued

be

"to

-pv

do'VZr'
™uncearnta£p^ductUs

-ex¬

vestments,

fol¬

may

cessful

vpstmnnt
vestment

clearly passive real estate in¬

are

(1) uncertainties with re¬
spect to explanatory regulations
under
the
Act
issuable
by the

lows:

restricted

be

treatment

"the

Aspects

Unfavorable

expressed, for

practice concerning
transactions and mem¬
ber
operations; official and ex¬
change staff; members; securities
listed; etc. — Commerce Clearing
House, Inc., 4025 West Peterson
Avenue, Chicago 46, Illinois $30
and

—Rules

^

Ave

tion'-16-5-7 Broadway. New York

ample, the intention that this tax

to

accorded

be

to

investment

estate

real

of tax treat¬

general type

same

probably be some time
Treasury issues its ex¬

clearly

•;

*

Wabash

Chicago 3, 111., $10.00 '
American
Stock
Exchange
Guide

Lehman
Harrishares
of
securities
investment "man Ripley & Co., Inc. The bonds
companies are sold each year, why aj.e p.ric"ed to yield 2 20% to 3 85%.
should not large sums of shares of
Thg group was awarded the is19, N. Y. (paper).
real estate investment trusts also
sue at competitive sale Dec. 14 on
be sold? But, investment company ■.,
,
,
i0ft00q% for tbp comComing Crisis in New York City
shares are sold by well-organizod,
bmation ;of coupons, a net interest Finances
New York Chamber of
organizations formed and novelof 3.6932% to the State of Commerce, 65 Liberty St., New
for
the
York
purposes.'For'
ari
<
"-1c
AT
x
oped
5, N. Y. '(paper).
j Michigan,
organization- curreptly very sue

regulations,
consideration,
un¬
doubtedly, will be given to the
reports of the Senate Committees
on Finance and Ways and Means,
which

.

...

mind.

to

only to companies operating with¬
in
strict limits.
In setting
up

praisal of the

•

•

naturally immediately comes
If billions of dollars of

that

planatory regulations. The regu¬
lations
possibly
could
severely
restrict flexibility under the Act
and make tax benefits available

some¬

what, a more
critical ap¬
new

be made to each of

will

It

have

to

waned

allotted, only brief

can

'

South

3g

Brokers

Inc.,

York,

VJiUUJJ VALIOIO

impossible.

the most important
reason
for great enthusiasm
by
many observers is the comparison
with sales of mutual fund shares

before the

ap¬

condition

in Taxes, with supplement on real estate investment

.

operation"qUIItil,

Probably

items.

these

unrestrained

pears

time

reference

the

acclaim

the

In

law. However,

y "

legal real estate title point.( ty»(Y|1 ya
would be forbidding, if

a

Compared

trusts; and (5) Federal and State
securities laws and regulations.

real estate in¬
vestment trust

that

nTw

New York City.

It

-

Kratter before

Mr

by

address

Reea,c|"t^

opera¬

(4) problems in connection
with underwriting and sale of se¬
curities of real estate investment

tions;

and

has enactment
of

restricting

and

not

-

,

,

Advantages

trusts—National Institute of Farm

V:

;

*An

view

of

various State laws potentially

the

and created as
enthusiasm as

publicity
interest

much

in

restrictions

and

uncertainties

estate
has had as

event in the real

other

field

trust.

such

under

trust

a

from

the

of

shareholders

ous

'

public.

securities to the

j

state laws, for

some

example, it would seem probable
that ownership of the trust's as-*
sets would be vested in the vari-

negative factors are corrected, Mr.

able method of real estate

under the various state

Under

laws.

,

term

the trusts

analysis of the Act designed to have real
treated the same as regulated investment

organization and operation of this new

BOOKSHELF

sur-

this new law would
limit at least its nearpotential, as well as to preAmong
the
uncertainties are elude hasty action in the sale of
the uncertainties of operation' of -securities to the public.

quick start which its enthusiasts may

these

aspects

negative

r0unding

tection.

number of unfavorable and

a

the

ever>

al of important

Corporation.

Real estate investment trusts face many

to be

ublic real estate financing. How-

of

enactment

gained from

day

Businessman's

likely to prove one
vaiuable vehicle for

very

appear

Thursday, December 15, 1960

.

Act would

Qn balance, the new

biguous
provision by
Treasury
regulations could negate many of
the anticipated benefits expected

.

.

most, or all,

be subject to
corporation taxes,

important feature
operations, restricthis one am-

an

estate

tive interpretation of

Investment Trust Law

the

Chronicle

The Commercial and Financial

(2394)

—

Key

;*
Management—

Johnson, Jr.—
Inc.,
Englewood
Cliffs, N. J. (soft COVer), $2.00.

Charles

Prentice

W.

-

Hall,

U. S. Trade With Japan,
1960

First Half

with First Half
States-Japan Trade

Compared

1959—United

Council, - Inc.,
1000 -Connecticut
Avenue, I Washington
6,
D. C.
(paper), on request.

Volume 192,

Number 6012

.

.

.

The Commercial and Financial Chronicle

Steel

The State of

Production

probably get less than 5 million

drastically—some

2Slectric, Output,

tons

Carloadinffs

(both, U. S. and foreign), so stock¬
piles could again shrink by one

ning to place orders through the
first quarter; and <4) t-nere has
been a pickup in orders from farm
equipment makers.

Retail

TRADE and INDUSTRY

Trade

Food

Price Index

Auto

Production

■Business

,.;

•

,

■

'

,■

suppliers

"

start

consumers

Failures

r.

from

month

When

•

:

this

;

million tons.

,

Commodity Prioo Index

■/.

(2395)

buying

lion tons

automakers

n

timism

milmonth, To produce the

additional

tonnage,

one

reducing orders, set¬
ting them back, -or actually can¬
celling, few steel men expect any

steelmakers

activity
continues
to from over $900 million to less than wil1 haVe to boost their operations
slide downward as the initial year $200 million during this periods
*° at least 60% of capacity.
Of the "Golden Sixties" draws to
This improved reserve position
As the first quarter progresses,
a
close,
states
the
December of commercial banks has led to- Icok for increased buying by cam
Barometer of - Business published an increase in the money supply makers, appliance manufacturers*
Business

Savings Bank, of over $2 billion since the; end and farm

by Harris Trust and
Chicago,

of

b%

over

"

is

force

civilian

the,

on

a

the

basis

adiusted

19K8

nw-pmber

M^e^

the near future.

Sales of

by

recession

a

re-

Barometer
shows

^"rve refulre^

nrndiiction

nf

irtAw

trend
trend

dnwnward
downward

reduce reserve require

resumed

its

'

.

,

activity largely suggest
business will soften further

economic

early 1961 the Harris Bank
publication states. For example,

into

orders of manufacturers dis-

their low levels of recent months,

cancellations

Heavy

machine

of

tool orders this fall have

'i'

Although

'

.■' * -'j,.■

cut net

orders of this industry.

states the Harris Bank.. Monetary feeling

likely
later

that

the

resume

its

economy

will

is

that

quirements.

trend

upward

What's

v,/fha
get me

to i961,

•Tb^'D^Prrib^-^n'k

they re

Revised Downward
Businessmen

-

have

S

investment

in

scheduled

5

most

on

tne

b'^riodiral

+hf
xne

economy,

for

outlook

immediate

housing

not

is

en-

starts have
Septem-

Housing

couragmg.

approximate y

I J'

aaL

°Also a^Hcatfons

months

for FHA

mont.-S^Aisp apjnic^mns in

a

ar\d+VA
insuredin mortgages
a
relatively few
number the
Barometer

indicates.
^

latest

The

buying

consumer

.

of the National Industrial

survey

A month

,

:

operating rate
1947-49 weekly pro¬

ago the

/based on
duction) was 91,5%

and producr

tion

1,470,000 tons, A year
the actual weekly production
p i a c e d
at
2,726,000 tons,

ago
was

or

•_/■.

Auto

Industry

Unit

Aims

Output

in

for

550,000

December

buyers

can

trvW

they're

to

;th8yLless^than-

not I honoring

such

re¬

first

-

q11arter of 1961.

outlays in the second and
of tbii year were
annual rates of $3614: and $36

American

announced

rate

year

The

The

the

jn the

•„

early part of this year.

.

-w

.

with

battle

for

.

notwithstanding the accelerated above those of the corresponding
gold loss since June, the Federal week last. year. Our preliminary,
Reserve has
wisely followed a totals
stand at $25,781,246,019
policy of stimulating the economy, against
$25,522,716,965 for the
Lower interest rates in the United same week in 1959. Our comparahave
conthe gold
economic
guide-

outflowJ

With

•,

of

pLntrv
country,

thorities

are

thf>

a

rPPPSsion

mnnetarv

Boston

—

iV,

767,273

750,984 + 2.2
.

The

Federal

Reserve

Credit, the publication
and .has

done

types

of

so

can

ease

these

controls:

(1) purchase of government securities, (2) reduction in the dislowerlng

.irements,

r^nr®

S.

.

Inventories Near Ten-Year

Low

purchases and
government securi-

It

is

estimated that consumers

miiUoh tons in inless than they did 4

^entorv

or

^
iifi-riav
at
the end of last VParV
year's 116-day
reserve position of- sti<ike
member banks.' Free reserves; the ' «

between

excess

re-

and

Inventories
;«»ywhuucB

reduce

their




the op¬

steel

week's schedule.

Compact car building,
ing
to
the
statistical

accord¬
agency,

slipped to 32.2% of the week's
output from 33.3%
last week.
Corvair
output at Willow Run
(Mich.) did hot work Monday or
Tuesday of4 this week although
Corvair sales set
ord

an

all-time

rec¬

in November.

Ward's
its

Norfolk

day

said

Ford

plants at Dallas

production is based on
for 1947-49.

programmed

(Texas)

(Va.) for work

(Dec.

on

and

Satur¬

10), also Thunderbirci

output at Wixom ;(Mich.), Bulck-

aver¬

assembly

Continued

weekly production

on

page

at

123

rrr

.

;.

"•

''
\.*r, 1
'
'h'ri-i.
an offer to sell or a'solicitation oj an offer to buy any of these securities,
The offering is made only by the Prospectus,
=.

This advertisement is not
^

-

■■

,

December 14, I960

$50,01)0,000

Beneficial Finance Co.

commercial availability
and three others
be ready > to go into
production
when
demand

said

"

full

47/g% DEBENTURES DUE JUNE 1, 1981

to

warrants.

Price 99.04%

Pick Up in^ Steel Orders Hard to

and

Accrued Interest

Analyze
The slight pickup in steel orders
that began a few weeks ago is
still continuing, according to The
Iron Age, national metalworking
,

Copies of the Prospectus

may

be obtained from such of the

urulersianed and others as may legally offer these Securities
in compliance with the securities laws of the respective Slates.

It IS too soon to tell if the pick[s genuine, the magazine notes,
it cflVQ that Taniiarv nrrfprs

up

J^ur 11 says inai January oraers
are
ahead of what December
bookings

were

at

this

time

last

month. And February looks better

have

been

cut

by

Eastman Diixon, union Securities

The improvement may be large-

«<>ns

over

Christmas _and_ New

Je^s probably dropping, below
40 %

capacity. After that, or-

!

The First Boston Corporation

Smith,

Barney's Co.

Blytii & Co., Inc.

Co.

ders now reaching the mills suggest a normal improvement in

Kim Loeb s Co.
Glore, Forgan

Goldman, Sachs & Co,

Co.

January.

Kidder. Peabody & Co.

Harriman Ripley
/'

I.azard Freres

Four reasons are given for ex-

;

&

Co.

&

Co.

"Incorporated.-,.

.

are thought to be ventory cutting is another; (3)
at the rate of about some steel - users, notably the
borrowings 6 million tons a month. They'll smaller plants, have slashed stocks

&

Incorporated

borrowings

of the 'year.
And during this pe-11'Consumers
ricd comrnerc-'ai banks have been using up steel
to

r

took

Corp.

Oldsmobile-pontiac
*Index of
age

jhg product

from the; ^ much as 8 .minion tons ,-since pecting a better tone in steel marFederal
Reserve,
have
shifted4
making forkets: (1) The seasonal decline in
from—$400 million to over plus monthly reduction of more than tinplate explains part of the De$400 million since the beginning one million tons.cember slump; (2) year-end inserves.,

GM

V

.

jng their lowest level in a decade,. ly seasonal, The Iron Age says.
the metalworking weekly : December
will
be
the
worst
magazjne reported Dec. 12.
month of the year* with opera-

vties affect the
difference

Steel

and 1,396,000 tons in
beginning Dec, 5.
Actual output for last week be-

than January did this far ahead,

steel inventories are approach-

haye about n

.

Federal Reserve
sales
iles of U.

steel

points^ out,

through

general

said

_

in

au-

<5av<!
in encinff rrpdit
says, in easing credit.

that

d

*86.9%

weekly. ;
'
^
But steel sales officials are still
tive/summary for some of the trying to decide if jthis gain is a
principal money centers follows: 1 reaction from a poor December or
(000s omitted),
the start of a real upturn,

Dec-10—
1960
1959 %
New York— $13,339,644 $13,738,330 — 2.9
the monetary au- Chicag0
1,222,939
1,200,112 + 1.9
norrect, Harris Bank Philadelphia
1,033,000
1,003.000 + 3.0
ih

nnintinff

hnstc

Ward's

by

a

a year ago.

discussing the easing policies for all cities of the United Sates
Federal
Reserve
the for which it is possible to obtain
Barometer of Business says that weekly c 1 e a r i ng s were 1.0%

to

operations

AM Corp.

in

Supremacy

/

the

abroad

overtime

Ford and

Eastern

But steelraen are developing
thinner,- stronger, and lighter tin
plate.
One
company
has
an-

are

Clearings
last
week
an
increase
compared

showed

Reports

nouncei

v

In 1959 Week
Bank

of

mum

NEW ISSUE

markets.

In

however

of

a n

tics and aluminum are chipping
away
at
traditional tin plate

$35%

nresent estimate for; I960 is about
4 % below the amount protected

Automotive

The week's volume edged
above 135,348 for last week
and was characterized by a mini¬

supplying materials for the container market is getting hotter,

1960 as a whole

8re now scheduled to total
hmioa
ln%
above
1R59.

more

the week

Preliminary figThe first light gage tin plate
ures compiled by the Chronicle, to be
marketed weighs only a
based
upon
telegraphic advices little more than half as much as
tion, the monthly periodical says, from the chief cities of the coun- the conventional tin plate, and it
is often a better forecaster of ac- try, indicate that for the week costs about one-third less,
tual buying than purchase plans, ended Saturday, Dec. 3, clearings v

than-

Iron

plant a"d equipment; expend!- Steel reported. Glass, paper, plas-

tUres for the

Rank Clearings 1 % Higher Than-

States

and

tough and get away with it,

erating

market.

billion, respectively,

cars,

tributed

new

Ward's

10,
said.

.

strengthening

are

quarters

buy
furniture and appliances
than in July. However, the publication states, percentage of respondents who, expect to be financially better off in six months
declined. Pre doted financial posi-

what more frequent plans to

of

lolls'

,

Actual

third

be

Institute

they are accepting an

$35% billion in the last four weeks. Japanese scrap purquarter of this year, and $35 bil- chases for first quarter shipment
the

because

The

over;

jion

on

This Week's Steel Output Based
On 48.7% of Jan. 1, 1960 Capacity

muis to accept less man
_

Stainless trim

rect result

S$nally adjusted annual fate pf week, after holding at $28.83 for

r.

able

pn that capacity is 48.7%.

tions, automakers say, is the di¬
50.0%, Ford Motor Co. 28:4%,
of the longer guaran¬
Chrysler Corp. 11.9 %, American
tees
on
new
cars.
Also, with Motors
are
8.5%
and
Studebakerbusiness like it is, they know they
rePackard Corp. 1.2% of the latest

immediate

capttal SSous

their

programs

Conference Board revealed some-

reqi

this

companies
cars
that will average *86.3% of steel ca¬
for the week beginning
consoli(iate small tonnages of sev- pacity
Dec.
12, equivalent to 1,387,000
tons in ingot and steel castings
'
Look for steel production to (based on average weekly produc¬
continue its. sidewise movement tion of 1947-49). These figures
compared with the actual levels

in the first
quarter of 1961, according to the
regular quarterly survey conduct-

from the depressedI

three

the

in

rugged tests for good surface. The
general tightening of specifica¬

•

.

more

5uests>

ed in late October and November

^frww

+

-

Estimated percent-

2.8%

n

this

tons.

of this week's forecast based

nuts and bolts.

ordering Of machine by the Department of Commerce
tools indicates that expenditures and the Securities and Exchange aJJ^ss than 50%^ of capacity this
for capital spending will be re- Commission
They have revised
^ast ™
f
™
duced during the next six months; downward their expenditures onn
abnuM:m(W» S"
New orders for paperboard, which plant and equipment for the secOutput about 1,376,000 inis widely used as a packaging ma- ond half of 1960 from the esti- got to is.
■
•
terial in many lines of industry, mates reported earlier this year.
Steei's price composite on No. 1
have been in a downward trend CapiteJ outlays , of business are heavy melting grade of scrap dethrotmh^JfiOst ofo!960
:
,rm'>
expected to. amount to a sqaf plined to $28.67 a gross ton last

of

age

pletions in the week ended Dec.

,ad orders, Steelmakers say

PJ

1961 First. Quarter Capital Outlay

low

Also

;

on

far

so

1,

The Iron Age notes,
tightening up on speci¬
fications on stainless steel, and on

ever

some

s^er£y •ofDthf ^fce3S.Ion' fgofor December, the general

play no signs of picking up from modest

new

deals

And

Jan.

being hurt

the '61 models will be better than

llkely .*? continue to moderate January than they had a month

evidence

Indicators uf the future level of

influence

****?' ** 4Uarter

strength,

policy currently provides the best concentrating

November
Novemoer.

in
w

dominant

a

mills report
Federal Reserve action has and more Orders on their books for

*

indicates the

and steel production

risen

cleanout

models.

970 net

169.7%.

cars are

Detroit is

in

trends

the past five months the Federal other .industries, automakers will

automobile ».

but recent cutbacks in

favorable

^eserv^ has .lowered the discount, still have

industrial

production displaying virtual stability according to latest figures,

/
of

good

1960

producers.

new

Further,

a^onoi^y will lead to higher sales.
spending m the future. ..During
Despite

period. Further analysis in

the

new

in

the

of

.

highest unemployment rate since

new

from that direction

news

utilization

of May. And, states the Barometer They'll have steel inventories in model,year, compacts have taken,
In its bid for 550*000 car as¬
35% of
-Business, past evidence shows shape and will' be building up of sales.production, but only 30% semblies for December the auto
labor tbat thisi increased liquidity in stocks of finished goods for spring
industry scheduled 139,156 com*

unemployed

now

tpacsonallv

that

good

the

1960/ annual capacity of -14^70,-

publication points out that

The

<

equipment

of

that there is not much
op¬
in
Detroit.
With
some

serves

by

begin¬ ginning Dec, 5, is equal to, 49.0%

now

Against this, the magazine ob¬

aS™cb S,vf
88 they'™ USing'd.«"
increase

mand iWill

are

15

Merrill Lynch, Pierce, Fenner & Smith
Incorporated

Stone & Webster Securities Corporation

White, Weld & Co.

M^mMiwmwMirrt**"*!'*'*'1?^^

16

•nMr«<nM>miMMWi,ihri!««*^«towim«m^

General Business Outlook

government

purchases

and

from the first

services

of

ter

Continued from page

proportions; there¬

reached boom

3

only a moderate decline of
5 to 8% (McGraw-Hill Publishing

fore

such

economy

shift in

a

a

"industry,"

government,
help being on the side of

major
cannot

contraction, in the short run.
In

spite

the

of

large

Treasury

deficit, the growth of the money
supply
has
been
unsatisfactory
from the standpoint of expectable
rates
of
the economy.
growth
Since 1957, except in the 1958-59
recession, the money supply has
been

down

stagnant, until the
last few months. Demand deposits
and currency stood at $138.7 bil¬
lion

or

the

at

of

end

1957; but 2 Vz
years later (June 1960) the figure
was lower by three quarters of a
dollars. This

billion

contractive
inflation
balance

threat

troubles

payments

largely account for this
behavior
The

of

the

Federal

sluggish
supply.

money

Board

Reserve

not

just one, but several
goals and responsibilities.
While

the

gressively
recent

has

Fed

has

policy

moved

ag¬

credit ease in
the international

toward

months,

situation

financial

of

international

our

of

potent

a

The

force.

and

was

thwarted

has

its action.

shift
from
to
surplus, the stagnant
supply and the interna¬

the

deficit
money

tional
are

inventory decumula-

the

Thus,

tion,

Treasury

balance

of

payments

bind,

together quite adequate to

plain

3%) is expected from this

Co. says
year

cost

yet

urgent.

equal

exceed that of 1960. F. W.

or

Dodge Corporation foresees a rise
of 1% in the value of construction,
but

total

of

Colean

and

a

this

about

be

the

Automobile
model

lines

few

a

and

(autos

appliances, for
example), inventories by now are
not

far

of

out

sales—less

year-end

line

than

$3

with

current

billion

above

since which time

1957,

population,

work force and
the entire economy have grown.
Steel consumption
is exceeding

our

production. But inventory move¬
ments take time to turn; therefore
some

in

as

same

1960.

the new
starting out strongly
for

sales,

year,

with the

products, more com¬

new

further

decline

in

the

next

more

than

a

year.

and

wholesale

a

foreign

countries
which rely on one or two basic
exports for their foreign exchange.
Plants and equipment expendi¬
tures, which reached a high peak
in 1957, have recovered moder¬
ately from the subsequent lows,
but
this
year
they
have
not
many

in

be

relatively

1961,

and

in¬

rates

lower

interest

the

1960,

1960.

numerous

improve

bank

lending

while

sales,

Paperboard
and

unfilled

orders

a

year

orders

new

below

are.

a

Manufacturers' sales and
when

ago,

below those of

are

we

in the

were

sales,

filled orders

this

ber;

the

But

doesn't

month

one

as

well

their subclasses.

nearly all of

trend.

both

for

case

durables and non-durables
as

un¬

below Septem¬

were

was

and

orders

new

Consumer

debt,

prove

a

including

installment is at an alltime high.

The

balance

of the

majority

"leading"

of

does

Research

Economic

-

'

Government
The

only

dustry

"growth" in¬
is government.

major

for

1961

government

the

fourth

More

state

bond

issues

this

local

into

of

1959).

government

been

have

ever

expenditures

carry over

mated

and

than

year

volving

quarter

approved

before—in¬
which

will

1961. Of the esti¬

rise of $8

to $10 billion in

to

capacity;

early and continued
will

against

the

balance-of-payments

last

declined

12

months

have

putting

Federal

'

the

risen

Reserve

by

banks

and

free

•

the money supply, as
is urgent if monetary

help

put

sionary.
there

floor

a

billion

been

growth of
noted above,

policy is to

under

tendencies,

has

is

The
a

though
$3
since early
of

situ¬

plus

shift,
recent origin in

only of very
substantial

over

credit

current

strong

reces¬

even

rise

a

(unadjusted)

summer.

re¬

for further

need

nies

in

part to the long haul in the pipe¬
lines. Use of natural gas as boiler

tric, Worcester Gas Light and New
Bedford
Gas
&
Edison Lignt—

supply gas and electricity in about
40 communities (all in Massachu¬

steam
to
Haryard
(through Cambridge
Co.), and 28 other cus¬
and

setts);

University,
Steam

appears

Bedford,

bridge;
and
with
gas
alone
Somerville, Worcester, Framingham and the Hyde Park district of

mercial, and

mid-1961

only

GNP

1 or 2%.
disposable

and

cline

even

The

plus

will




a

matter

of

record

retarded

economic

will increase

the

1950

to

nearly

$55

gain of 77%

a

ter

of

1961.

increases,
of

and

Undue

resistance

uneconomic
a

wage

rise

in

would

work

the

and
is

industries

shoe

and

and

is

a

The

com¬

a power site
future gener¬

some

currently quite small and will

of the power sold by
the four electric subsidiaries was

'

by

the Cambridge and
generating plants;

Bedford

and

economy

-

6%
flow

sumption

de¬

is

kinds

1959

natural

The

well adapted
of
fuel,

are

cheaper;

in

by

interchange.

various

use

whichever

obtained

was

company's plants
to

fuel

oil,
ccal.

12%

and

gas

con¬

47%

was

Presumably oil was available at
lower prices since its use as fuel
doubled

par¬

quar¬

with

1958.

The cost of each of the fuels

aver¬

less

aged
in

about

7%

the

bill

which

1958,

small

for

increase

fuel

electric

plants. The
generating stations had an

new

interconnection

C affiliated

with

Utilities Associates)

Partnership Participations

and

interchange with Montaup

Flpo+ric

Eastern

completed in

recent months.

in

1

The

from

system

IMPERIAL SQUARE

ob+ams

natural

eas

Algonquin Gas Transmission

f34.5%

owned 1

a^H

Transmission.

Gas

maintains 100%

T^nes^ee

NEGEA

also

manufactured

p»s

standby: at present its highlv effi¬
cient oil-gas sets are used only

YORK

moderately for peak shaving, but

Consisting of four sections encompassing

...

The

level

low

a-

plant

is

.

equity ratio is now around

would

probably be satisfactory.
Gas

June

000,
the

at

amounting

to

of

end

the

$600,-

about

or 110 a share on the stock of
holding company, the effect'

being

earnings

on

obtained

Light

increase

rate

a

between

equally

divided about
this year and
various

been

have

There

next.

cost of gas fur¬
nished
by
suppliers, but these
(both increases and decreases) are
largely passed on to NEGEA cus¬
the

in

changes

tomers.

ir¬
increased
in each year thereafter — from
$1.23 in 1953 to an estimated $1.80
Earnings

while

share,

per

regular during 1950-53,

1960—or

for

increase
which

annual

average

an

close

the

to

5.6%,

of

(compounded)

is

industry

Dividend policy has re¬
annual pay¬
from 950 in 1950
recently increased rate of

average.

mained conservative,
ments

raising

the

to

$1.24.
For

31,

Oct.

ended

months

12

the

earnings were $1.78 on

1960,

the

number of common
outstanding, compared with

average

shares

$1.70

in

12 months.

previous

the

(mcf) were up 3%, elec¬
tric sales nearly 4% and revenues
over
5%. The number of degree
Gas sales

davs

was

6.038

in

compared

5,704

the

with
and

period;

earlier

despite warm weather in Novem¬
ber. sales were off only 1%
in
that
month.
The hurricane thus
fall

co~t

the

about

company

7(t

earnings, some of which has al¬
ready been absorbed, while the
in

will

balance

five luxury air-conditioned residential apart¬

at

generating

40%, hence equity financing does
not seem imminent; a 35% ratio

despite

greater volume of fuel

the

in

used

persons

total

the

in

than
for

accounted

practices,

compared

as

remain

new

a

Worcester

Over 89%

only.

NEW

the * same

of about 225,000 kw,
years off.
The

plant

probably

ational activities.

fuel efficiency of ap¬
average
proximately 13,800 BTU per KWH
produced.
Substantial
operating
economies
are
anticipated from

HEMPSTEAD

about

acquired

this

but

in

program

next year.

Sandwich for

near

ating

built.

removal

more

with
for

has

pany

other
research-based
firms,.- especially
in the Cambridge area, while the
Cod
region
is benefiting
Cape
from active development of recre¬
electronics

of

growth

legal minimum

price

greater

about $7.7 million, prin¬

was

until

wage-fringe
to

construction

The

being largely offset by the rapid

force

unemployment,

been

is

tool,

machine

textile,

leather

growth

ticularly evident in the first

has

6%. ." There

credit for interest on construction

by
income

work

domestic

line

41%

in

Over-all

territory.

in the decade. The decline in old-

$6,590,000
■.'

industrially, NEGEA's

currently,

power

•'

a

have increased from $31
in-

million

less.

growth

its

heating sales increased over 11%
in 1959 despite, warmer weather;
the
number
of
house-heating
customers increased 4,562 or over

amount

million

1960

will

is in a position to
both gas and electric
househeating in various parts of

million,

area

revenues

decline

Personal

summer

by

back¬

ward

the

-1

industrial.

24%

been considered

land has

readjust¬

income

the

The company

benefit

Despite the fact that New Eng¬

ity,

to

in

gas

cipally for transmission and dis¬
tribution facilities, and the outlay
in
1960
should
approximate $9

the

and

of

use

heating. Electric revenues in 1959
were
39% residential, 25% com¬

the

1960-61

the

months.

1959

New

situation

interruptibie

sales to customers, have sustained

47% from gas, and 2% from steam

nearly 5% was purchased on firm
contract from a neighboring util¬

the

in

growth in gas heating, and satura¬
tion is now about 51%.-

If
all
of
the
foregoing is a
reasonably accurate assessment of
current

as

due

Cape Cod has electricity
only. About 51% of. system reve¬
nues
is derived from electricity,

supplied

ment will be mild. From late

with

together

fuel,

as

obtained,

is

gas

Boston;

having been oversubscribed

as

and gas include New
Plymouth
and
Cam¬

electricity

by residents of New York State, this announce¬
ment

both

with

served

Cities

tomers.

three

These securities

Elec¬

County

Plymouth

Electric,

any
:

cheaply

Cambridge Gas, Cape & Vineyard

natural

but

sense.

almost

factured

Conclusions

prospects,

expected to increase as
the system load grows. With sub¬
stantial
production it has been
reported that gas can be manu¬
is

usage

capitalized in 1947. The subsidi¬
aries— Cambridge Electric Light,

substantially,
in a stronger

lending position.
The

in

85%

two

the

of

one

utility holding compa¬
New England; it was re¬

principal

Commercial' bank

the

have

serves

by

probably continue
even though the

us.

at

Banks

moves

ease,

international

not

sion.

steps

-

imminent general expan¬

suggest

Board

of
payments difficulties
impair additional credit ease,

ation

indicators of the National Bureau

latter

continued international

our

debts

.

Reserve

take

is

in

the

—

began to

may

than

rates

Federal

tion

1961

On

largely to the short-term
money market, so far. Quite early,
asc long ago as March and April of

Fed

lower in

lower.

be

confined

credit

be

should

is

Electric

&

Gas

England

Association

Association

England Gas & Electric

New
New

Rates

plus side is the subsidence of

the

in

material

prices as
soft. Spot

funds" will

the

Total

negative factor.

Interest

and

abundant

but - because of high
current inventories, auto produc¬

affect

a

a

Funds

year;

whole are stable or
prices, a good barom¬
eter
of
demand, are weak, the
lowest in 10 years, and adversely

Raw

larger deficit in
fiscal 1962, for which the squeeze
of corporate profits will be heavily
responsible.

may

purchases of
goods and services by the end of
1961
will
show
a
steady
ri~e,
quarter by ouarter, since the first
1959 right through
1969 and
1961
(except for a small decline

now

by

last

inventory decumu-

lation extended

This is

followed

the

six months is probable. In the last
two recessions

the

proportion of

a

budget of fiscal 1961 prob¬
will show a deficit, to be

pacts and more reduced-size cars,
should be close to those of the

their

of

as

total.

ably

steel strike slow-down. In October

exception

local

OWEN ELY

BY

could

shrink

and

SECURITIES

sub¬

The

the

Agriculture
income will

year's
levels.
marketings and net

PUBLIC UTILITY

gov¬

other,

or

totals

Thursday, December 15, 1960

.

whether

inflationary psychology, for the
time being; this has encouraged
greater credit ease and somewhat

of

the

and

Loan

the total, with the expected
private rise spread broadly across
most
major
sectors
including
housing starts.
If the European boom continues,
our
exports should hold close to

level

With

security

these

more

of

unfilled orders

Other Factors

Any

national

in

terest

year ago.

prising.

level.

:

.

the

at

though it will be under one third

ex¬

sur¬

local

be

expenditures,

national
raise

will

increase

ernment

state

goods
quar¬

$57 billion; most of the rise will
be
in
the
public
sector, even

the recent behavior of the
Indeed, in the face of
obstacles, the strength and
are

and

Loan

rise of 4%

a

in
new
construction to
hew high level of over

5%

reach

for

look

Commerce
to

in
physical
building.
Miles
the
Department of

decline

1%

a

volume

these

economy

state

the

60%

some

stantial

Total construction in 1961 should

economy.

the

the need for
investments
is

1961,

to

reducing

-

of

1960 to the final quarter of

1961,

dollar

Financial Chronicle

The Commercial and

(2396)

amortized

be

over

the next two years.
ment

buildings and

a seven

story business

building, nowunder construction
square

on

of

cut

than in

feet of land.

But
our

THE

Unemploy¬
1'kely to average higher
1960, and be troublesome.

unsettled

world

international

conditions,
balance-of-pay¬
a

new

The

best,

COMPANY

art

of

forecasting,

cannot

fathom

feeble
these

un¬

375 Fifth Avenue
16, N. Y.

The

about

13.6.

(Special to The Financial

'

V.

,

;

conference
1961
merce

D.

sponsored
of

the

by

the

on

Mr.

Schmidt

Business

at

the

Outlook

for

by the Chamber of Com¬
States, Washington,-

United

C., December 2,

1960.

Chronicle)

Calif.—Phillip B.
become
associated

LOS ANGELES,

with
{

yield

With Mutual Fund Assoc.

French

knowns.

statement

celling

price-earnings ratio is

5.1%.

at

Companies
*A

cmrentlv

is

stock

The

over-counter around 24V2 to

Admin¬

istration in Washington may alter
the trends as seen on Dec. 2, 1960.

REPUBLIC

New York

employment.

ments troubles and

FIRST

and Affiliated

is

ment

381,452

has

Inc., 3837 Wilshire
the

past

Weedon

he
&

Associates,

Fund

Mutual

was

Co,

,

Boulevard. ^In
with
,

v.

Crowell,
^

Volume

192

Number 6012

.

.

The Commercial and
Financial Chronicle

.

(2397)

THE .MARKET ....AND
YOU
BY

revocable
to

that

so

establish

it

when

is

important

it

is

set

FROM WASHINGTON

up

exactly what is wanted.

WALLACE STREETE

[The views expressed in this article
do

not

cide

The

strength in
to be

seems

the

:

this

market

still

and

confounding many of

tion

market

experts.

It

too

long ago that the bears were
looking for 500 in the Dow-Jones

•

averages and some

diehards

most

term

the
•

:

not

was

much

600

over

in

basic

gleam

:

industries

There

of

still

technical

is,

however,
a
in the sharp inheavy construction

most

light

in the

.

by increas¬

there

reaction

when

that

if

the

one

group,
.stick

certainly

be

may

a

tax

were

would

we

with

the

SAN
F.

with

members
the

;

Parents

that

one

no

really

believe that there is

depression.

A

a

another

new

them

high

to

in

confidence

child"

business.

remains

the

such
or

about

this

consumer

recession

is

that

new

re¬

Vice

checks

This

"Tax-Sold"

does

not

too much when
what

receive

reports.
.

for

the

the

old

that

Stocks

help the

One

analyst

rule

ful

tries to decide

one

Certainly,
buying stocks

about

are

'is

a

will

en¬

and

the

annual

going

to have
this

to

be

particularly
Some of the

year.

if

not

for

extremely

the

care¬

Wall

all

wrangles. In fact, it
the

once

of

legal

be argued

can

certificate is

that it cannot

get

can

kinds

October,

which

something

unforeseen

in

his

he

other

than

himself

other

person

This

wife
In

his

or

this

the

parent

who

is

the

relocation

main

plant

of

to

in this plant should

ment

operating

immediate

costs

benefit

Fred¬

equip-

new

help to
and the

would

also

be

stock

and

he

names

name
as

for

custodian.

be

his

al.
be

parent,* and also

the

does

father's

sets

die.

up

his

to

before

the

the

account

as

plant.

take

For

existed

the

has

ing on the
change. ,.....

risk,; the
outstand¬
Ex¬

warrants

American

Stock

!

Another interesting stock
Trailer. This

time
The

business

leaves

company

its

operations,

be

a

general

in the

Ryan,
since

execu¬

the

estate

and

The

the

within

a

or
a

in
are

this

1960
of

price

of points
a

a

.

•

com¬

nice re¬

very

high in

couple

steels

so,

there

business

in

'«

was

30

19

is

of the
' •'

>•.

Squeeze
group

that are

particularly hard to analyze. In¬
ventories do

seem

to be depleted;;




to

Kennedy
said

more

in

the

Presidential
now

vote and

are

Mr.

the
of

civil

heavy
North

Carolina

Negro

and

Texas

it

is

it

sought

will

consultant

to

during

Administration;
offer

an
a

to

Japanese

act

he
as

stock-

brokerage firm in Tokyo, but as
yet he has not announced his fu¬
ture plans.to

:

Co.,

Mr.

&

with

joining
Ryan

Merrill

ner

&

and

Detroit.

Smith

Schwabacher

was

associated

Lynch, Pierce, Fenin

New

York

City

;

.

Mr. Ryan is an officer of the
Investment Society of Hawaii.

Joins

Thomas

has

—

joined

Charles

the

staff

of

else. They are not a
responsible lot, impractical

very

rather than

practical, out to make

record

of

regardless

whether

they accomplish anything or not.
Mr. Kennedy's cabinet appoint¬
ments

ing

far

so

to

the

not very reassur¬

are

majority

of business¬

particularly in the case of
Budget Director. His emphasis
has been upon youth and men of
vigor but without the maturity
men,

S.

of

Wagner & Co., 5 East Long Street.

will

they asked
they needed. "Perhaps,

need

to

do

substantial

a

the

This

announcement

is neither

7

that

so

for

gifts

Easter,

John

controls in his newest book "The
Liberal Hour."
Chester Bowles, the new Under-

Secretary of
State,
was
OPA
Administrator during the war and
kept business in a turmoil by
trying to use the price regulations

he

to

make

braith

the

was

country

do with business in his
of course, but he is an

fellow,
made

a

confirmed Liberal, who
million
out
of
the

advertising
much

be
or

it

to

business

and
then,
misfortune, decided
public service.

our

to devote himself to

his

Director,
Harvard's

E.

Bell,

has

been

School

ministration
Economics

an

The

and

his

a

Budget

Public

teacher

Department

—

(Special to The Financial Chronicle)

LOS

Secretary

of

Pacific Coast Sees. Adds

to
Ad¬

in

its

where

ANGELES, Calif.

Lalich

is

now

with

>

accumulate

amount

be

problem
thought

of

wise

with
of

to

into

discuss

Street.

to

buy

Common Stock
(60?! Par Value)

lawyer

a

setting

a

up

a

Price

the

with

Trust

properly
unlimited
as

far

as

Copies of the Prospectus

can

powers

to

give
the

account.-The tax benefits that

once

be

be obtained from the undersigned.

almost
Trustee

C. E.

buying and selling and

can

may

when

accumulating funds for the minor's

accrue

Share

simple

instrument

drawn

per

a

Trust Agreement.

The

$14

substantial,

the Trust is drawn it is

can

but
if-'

December 9,'

1960

John E.

He

was

formerly

Marache, Dofflemyre & Co.

any

of these Shares*

Geophysics Corporation of America

it

money,

—

Pacific

Coast

Securities Company, 1054 Broxton

offer to sell nor a solicitation of an offer
offer is made only by the Prospectus.

other snecial occasion, and if
is possible these sums might

eventually

new post,
impetuous

$10

50,000 Shares

may

Gal¬

over.

with him.

Bowles, won't have anything to

should

birthdays

in¬

job," he would

K.
Galbraith,
another
Harvard adviser to the President¬
elect, advocates price and wage

see

everything

...David

(Special to The Financial Chronicle)

Ohio

The Liberals, however,
to the exclusion

all

Of course, his
budget was fi¬
nanced
by
wartime
wage
and
price controls and deficit spending.

would

rights

actually
prod
asking for
they thought

into

than

say.

the

endanger
legislative pro¬

to

were sure what

was

crease

filibuster

that comes with added years.

Wagner Staff

COLUMBUS,

It

see.

Kennedy's

gram.

civil

a

Prior

to

command

necessary. He would ask them

you

right at the outset.

Mr.

would

money

they

for

which

in

service

if

in

This.
Senator
Mansfield
and
other leaders of the Senate do not

diplomatic

was

and

want

the

more

The

throw
a

his

could.

Smith

the Kennedy
cause, ac¬
cording
to the Gallup Poll. No
more legislation is
needed, and if

Senate in the throes of

the

at

means

Cabinet members

be

vote

Roosevelt's wartime director,

that he

rights

Carolina

to
as

wring every penny from Congress

have the right to
voting in the South.

the

intends

policies

every

campaign

leadership.

like

was

any

needed.

progress could

field

Negroes

just why

is

during

that

made

by

see

legislation

any

would

low of the year.

The

basis

added

should

and

pickup

present

Steel

present
desired.

be

hard

Bell

same

reaches

V Another thing which should be
considered is that if this program
is being developed on a continu¬

sizable

next year

covery.

to

is

the

late Harold Smith. The latter
used

want

tive with Schwabacher &
Co., has
An East Asian specialist

*Subject to certain provisions.

has trimmed down

could have

pany

the

at

lot

a

com¬

Liberals

that

says

pursue

Signing Up far Additional Holiday

ing

might

be. Fruehauf

pany's

old

willing to

person

slightly greater

a

company

the

in

the

con¬

Director,

Washington reporter,
of
the
Washington

Klutz

majority. :
!

that

one

It

more

South

Former

F.

A veteran

Jerry
Post,

Administration fears.
reason

dollar. In

present

mates, will cost $17 billion more
than the
country is now spending.

favored

much better labor contract than

a

the

the very coalition which

sound

the

account

minor

on

the

to

get through his pro¬
part of it. It would

can

a

to

enact
Kennedy's program
which, according to various esti¬

President

bring

states

as

Hawaii

before

gains, not
trast

estate

For

accumulated

are

pieces

not

himself custodian,
that

&

his

someone

may

father

revert

die

father sets

accumulated

securities
would

a

grandmother, et
the income can

way
to the

tax-free

to

reduce

j

must

the

one

problems.

this up with

account

child,

should

company's

;

custodian

return

some

company

erick, Maryland. The

<

the

of

been

the

set

bered here is that if
up

basic

in

these

can

laws

little time and effort. The
only point that must be remem¬

There

have

hand, most

custodian

in

very

the

which

,

develops,

'resolves

this dividend should be continued.

changes

i

have

now

One's broker

particularly interesting. The com¬
is expected to earn in the
neighborhood of $4.00 to $4.25 in
the current year which "is down
from last year's $5.71. In 1960 the
stock sold as high as 52 and at
the present price of 34. is down
about 18 points from its high. The
yield is about 5%%"* and unless
■

States

very

pany

1959,

to

resigned.

be sold until

he is 21. On the other

was

Roe

—-

William

been

Truman

in

for

Hawaii

Streeter
has

received

involved

and

Inv. Consultant
who

to

necessary

any

It

the

one

City,

manager

has

name

road; building-s stocks

might Y be
attractive. Mack Truck looks

Kansas

Ryan May Act

-

selective

a

HONOLULU,

is

"New

Maurice Stans, he is
expected to
push almost every agency's
budget
request, and all legislation needed

a

change the rules is in order to
pass more civil rights legislation.

municipal department for the
of

session.

to

City National Bank & Trust Com¬
pany

the

majority

The
William F. Parvin

partner in Austin, Hart & Parvin.
In the past he
was
manager of
the

of

or

the

was

formerly

now, they
attempt to

gram

many

are

name

one

as

contained.

be

invest¬
business

for

of

to

Kennedy's

upon

He is convinced that the
budget
is a device for
achieving social

They
change the rules to prevent

Kennedy

been

years,

outset

party

missile

how these securities

child's

that

that

seem

should

the

ment

■

Company of San Antonio.

children

are

7
Parvin,

has

Republicans

Mansfield, who is ex¬
pected to become majority
leader,
has argued that the Liberals'
pro¬
posal will simply tend to tear the

depart¬

Mr.

who

As

threatening

favorably
Frontiers."

Senator

the

1

Democrats.

are

President¬

any coalition

conservative

simple

i p a 1

given. If the security is given in
the

it

also

bond

Federal spending is considered a
virtue. Bell looks
very

positive

cut off debate.

man¬

c

and

would

good

a

saving

text,Y. certainly
that

to

as

depressed by tax selling
might still be in effect. However,
would

the

i

u n

Kennedy than

the

filibustering by providing that

as

of

ager

the

change the rules of the Senate at

,

Presi¬

-

elect
of

the

rockets

Many/ of these
annual
today make interesting

..

should be bought.

which

also

pictures
Some

a

,

executive

exciting

towards

for

or

new

,

Ex¬

dent and

in

Inc.,

Commerce

interest

good

a

him

will

reading,

v

or

be just as

he

reports.

report.

trains

courage

banks around the country are also
same

them. If

toy. He will receive regular

port very sharp increases in their
deposits, and in fact most of the

making the

open

to

few shares of

a

stock

can

dividend

the

still has money to spend.

Savings and Loan Associations

electric

as

to

particular

a

missiles,

stock

made

interest

has

railroad

con¬

would be willing to
spend,
one
of
the
amazing things

sumer

and

be

of

avenues

make

The feeling seems to be that this
is just another cycle. As long as

this

also

can

always

of

giving

educating
them in financial
matters, but it

have had many of these in the
last 20 years and we have
out

consider

,

we

worked

might

progeny a share in Ameri¬
business. Not only can this be
of value
towards insuring their
future
education
and

but

yes,

worthwhile

a.

present; for. their

can

to

seems

going to be

recession

■

their

certainly cannot be charted is the
fact

seeking

Christmas
children

/

Hart,

of

change,

,,

Claus

&
of

in

threatening

to be worse enemies of

associated

Midwest

Stock

ment.

Santa

Hobbs

Bank

CARLISLE BARGERON

The
so-called
Liberals
House and Senate are

Texas—William

become

Building,

and Granite

7

•

Funk,

contracts that have been awarded^

Stocks from

has

National

Road

Another important factor which

BY

ANTONIO,

m

City.

...Ahead of the News

the

only.]

Parvin

leaders, including Jones & Laughlin, Republic, Allegheny Ludlum

1WyDepression Doubted

,

that

selling lifts so
to buy in this

con¬

building 7 and
municipal
building
contracts
have
shown
very sharp increases. 1
v /

;•

this increase

pass

possible

creases

(

to

consumer

what

tinuing.
-

able

companies

The business figures still do not
look
particularly

offs

•

be

these

ing the price of steel. The indus¬
try
is
still
having competitive
problems from abroad also. It is

new

•

wage

picture will brighten

that

so

along to the

unemployment hitting
highs for November and lay¬

of

Funk, Hobbs, Hart

will

with

those

as

W. F. Parvin With

by

unlikely

-encouraging,1

;

presented

are

in¬

enough

in

They
author

were

tnat the steel

averages.

necessarily at any time coin¬
those of the "Chronicle."

with

guaranteed
under the labor contract
that was
settled last year. It seems

hit

was

that

creases

to
admit
things looked
pretty
rocky,
and
certainly
his
most
optimistic estimate for the short•

indica¬

no

an

industry

were

looking.for 400. Even the
optimistic bull was willing

even

of

early rush to buy,
undoubtedly better business will
materialize. However,
recently the

not

was

although there is

17

Unterberg, Towbin Co.

with

18

The Commercial and Financial

(2398)

Chronicle

.

.

Thursday, December 15, 1960

.

\
cheap have cause to congratulate
themselves, for the stock nas been

FUNDS

MUTUAL

turning .up
highs.,

RICH

BY ROBERT E.

the

on

list

of

.

NEWS ABOUT

new

-

BANKS AND BANKERS

One thing is sure: if you don't
like, the style in stocks, then stick

around,

it's

because

certain

to

New

Branches

New

Consolidations

Revised

Offices, etc.

Capitalisations

change.

Look Back in

Thus, investment mana¬
gers who invariably fled at the
suggestion that they take a screen
test, now are showing unusual

Anguish

what the vintners buy
precious as the goods they

often wonder

**I

half

One

so

interest

sell."

signed
few

look

fundmen

back

with

the fading year. For
'most of them, 1960 has teen • a
trial, sometimes even an ordeal,
pleasure

on

of

None

OF OMAR KHAYYAM.

—RUBAIYAT

Meadow Brook National Bank in
Red- West Hempstead, died.
lich
to
Vice-President,, George
Before joining Meadow Brook,
Champion, President, announced Mr. Peticolas was a Vice-Presiyesterday. Mr. Redlich will be- dent and Controller of the Pascome head of the agency admin- saic
National Bank and Trust
istration division of the trust de- Company, Passaic, N. J. and a
partment on Dec. 19, succeeding former President of the First Na-

the

to

York, has promoted Milton J.

foregoing, is

make

deChristmas

your

go down as well as shopping
easier, - especially * if
up." This was a prelude to ac- you've thought of gifts of securi-,
knowledging that in the year end-^ ties. Still, as the helpful folks
ing Oct. 31,^ I960, net assets per down at the. National Association

panies can

_

_

_

_

Manhattan Bank, New

Chase

The

in movie stocks.

7

^

^

,

.

____

Trust.

joined tne seanoaru

_

with

stockliolders
that

they

the

thought
juffeted

were
not
it-alone
individual issues,
„

of

owners

who

tTl%0easea stand"

print
point to 1960 as a standand pray that pride goeth

can

out year
,

.

,

-

not before

a

„

part, however, investment managers will nod ruefully at these words from the
latest annual report of the Los
Angeles-based American Mutual

K.V
decline in tne
SSXefi

mes.

dence at the oncoming year. The
question, of course, arises as to

selection

on

securities

marKet,

that,
—

i.

do have

you

there

c.

are

187

a

wide

on

(Seaboard National merged with
Equitable Trust Company in 1929
and Equitable became a part of

the

counter.

what

SnSi'tr
nf
ways this solace: the recipient officer in 1950 and was promoted
re^ord of won»t kMoW for a long time to to Assistant Vice-President in
the latter part of this year will come g0 there's small likelihood 1957.
confuse the denizen of the mar- .
.
wnj turn it bark for
ketplace as completely as the cagh or something eise before/the
U1^ cask or something else before,the Chemical Bank New York Trust
vintnersr
Thumistletoe has been taken down- , Company opened its 106th metros:
HO.
-P _■
- Incorporated^Jncome Fund re- politan banking office on^Dec 12,
*^at vear
at thenet
ctlose
of the
Oct. at
Maiden
Lan? & hv
Pearl
Street,
SOia
py
le evisi n - Electronics 31 fiscal
assets
tntalrrl
it
was
annonnrrH
f!hnirm»n

soW°C^yee<Tefevirion

Georgia-Pacific,
the
plywood
kingpin, was a sale at Lazard
Fund and a buy for National In-

H

of the

oils,

their

eliminated

Securities

Wide

holdings of Pure Oil, but Institutional Growth Fund
and State
Street Investment
were
adding
to
their
substantially
to
their
already
sizeable interest in Pure.

Oil

Pure

Investors

a

a

year

Indeed,
than

from 583,683 at
preceding year.

iexaco,

Templeton,

better

•

fupds

The world's premier investment

investing in a
of securities selected for

share

,

earlier.

outstanding increased

an

equity, American Telephone &
Telegraph, probably fared as well

A mutual fund

Shares

increase

month of

the

to

.

Executive

Vice-

*'

*

*

tive Nov. 30, the merger of The
gaiem
National
Bank,
Salem,
N.
Y.,
with common stock of

into

$50,000,

The

Bank

National

n7 yT with
5C0.000,

Manufacturers

of

common

the

under

end

of

the

in

1926

Chemical
x

group
of
November showed
in
sales
from
the

month
and
the
like
1959, but said "an analy-

Mr

57*

h

PresfdlnT
1957;

Harris

ininpd

a

title

of The
*1

stock of $!,-

*

*

chants National Bank & Trust Co.
of Syracuse and the Cicero State
Bank, which has already been ap-

proved by the Directors of both

banks,will take effect March 1,
Pending stockholder approval,
*

*

*

stock dividend, The Fram-

a

ingham National Bank, Framing-

ham>

has

Mass.,

its

increased

common capital stock from $300,-

000 to $450 000 effectiye

No;.

29.

(Number of shares outstanding—

.

*

*

Appointment
Keever

Troy"
of"~$l"-

Manufacturers" Nationaf Baik" of

By

iuniorclericaioosl
became^ AssistantN^cl-

^

Troy,
stock

Ray- The plan to merge of the Mer-

Secretary;

York, died at the age of

621,981

>Damroth
*
*

during

previous

as

45,000 shares, par value $10.)

*

of

Harry

J.

Assistant

an

*

McVice-

President of Manufacturers Trust

sis indicates^ the increase to date Company, New York,

i

of

Assistant

ken,

r
*

$5,372,453, or $8.64 _a s^a^^This Pr^ident'of The Chemical Bank
compares with $4,144,464 ana $7.10:<frew York Trust Company,
New

few friends.

which found

EST. 1925

possible long-term growth
capital and income.

far

fared

OUh
(New""Jersey)3 a^d
Oil_ (New Jersey) and

Incorporated

named

was

President in 1958

7T:fJ£krS° fhtlJ™ D* Elleman wil* be in charge. His of $25 each,
twl
share on staff includes Chandler L. Mahn^ *

"

"

'

4{fi

*
*
*
mond H. Mazanec, Assistant ManAxe-Temple ton Growth Fund of ager, and Miss Jeanne Hausman,
Canada, Ltd. reports net assets Officers' Assistant.
(in. Canadian funds) attheend.'"ofi/.\
*
the Oct. 31 fiscal year totaledOn Dec 5, Harold E. Harris Vice-

out
of favor the last few years, Carriers & General Corp. and Nationmatter

the

In

cfis

iU>0O<v*iD snares,

vestors.

'

and

Meadnw

Vice-President

V Chairman

Fund

MUTUAL FUND

list

At

a.

ioined

as a

of

„.AU you have to do is
the Chase National Bank in 1930,), He; A merger certificate has been isScmirSn® right one* Anyhow, there's al- was appointed a corporate trust sued approving and making effec-

vvhitfre

—

n.

Peticolas

Mr

or closed-end compa^- National Bank, New York, in 1929. Brook tn 1953

their buymg and selling

fall.

For the most

„

JBut. _fundmen, "°exude
- le®. Sf tual'
confi-

motor moguls, must

Co.

was

an-

"

The

First

Trust

*

*

National

Company

Bank

and

Kearny,

of

Kearny, N. J., has increased its
--

k

from

the

sale
1.

Dec.

Incorporated

w

ready conriderable

Income Rind
a I'St

a

'

large degree of

goodly measure of agree-

a

ment

the

on

outlook

poor

for

and pulp issues. It wasn't
so many years ago that these very
stocks had almost as much glamour
as
today's electronics companies. T :
Agreement by the funds on the
paper

THE PARKER

CORPORATION

200 Berkeley Street, Boston, Mass.

•

t

outlook

CONSIDER

EATON &

.

HOWARD'

Balanced Fund
preferred, and common

stock

or

industry,

Co.,

the.top-flight

pro-

istration's'-DoHcies*

*

A

.

-

^

b? mild, of Trustees Annual Meeting,
f
Walter H. Nelson, Walter G. Driselected

^ "by the
i

j

in the sale of Deere & * Energy Fund repdrts that at Nov.

ter of 1959."

Well, those who per-

sisted in the view that Deere was

30 net assets totaled $13,932,568,
equal to - $20.18 on each of; the

690,308 shares outstanding, against
$9,181,367 assets, $21,29 a share
and 431,189 shares

a year

earlier.

American

since 1931

available from I

EATON & HOWARD, Incorporated
24 Federal St./Boston 10/Mass.

Name

^/Soc

Massachusetts

zW'

Life Fund

nHin*

Woe?

ir>

DIVIDEND

Lf
Bankfn /
nartmp^t
?
nou^PmPn+ ht Fr^pr^b^n*

th

,

NeW Ybrk State

Massachusetts Life Fund is

paying

w

.fe£ jr^Presidenfri ^ng

branch,

per

□ STOCK FUND

for-

Prospectus

I

upon

request

Lord. AkbI'TT & Co.
New York

Atlanta

—

Chicago

Los Angeles

—

the

The

Hempstead Turnpike
of Cherry
Valley

corner

.

The dividend

tion

are

capimade

.

,

from

income

capital gains distribu¬
payab|le to the Trustee

December.14, I960 and are dis¬
office

will

quarters

at

new

open

the

in

same

address about the first of the
year.

Permanent

quarters

construction with

*

San Francisco

distribution of 36 Cents

A

and the

the

investment
ending

per share from realized
,tal gains is also being

cated at 490
at

net

for the quarter
December 31, 1960.

by the Fund.

pected in the

j Address^

by

dividend of 24 cents

|be
known
as
the
Cherry Valley office, will be lo¬

temporary

between

,

I

approval

a

ihare from

income

to

invests in a portfolio bal¬
bonds and preferred stocks
stability, and common stocks
selected for growth possibilities....

Company

selected

|

to

Road.

anced

Fi




fnr

A Balanced Investment Fund
The

j

Investment Dealer or

D BALANCED FUND

m ^

were

Vice-Presidents.

Board of Governors of the Federal
Reserve System, the bank's new

Business Shares
your

^

—
' • y'
VicerPresidents

Subject

and income

I

Walter
H
YV cilLt.1
XX. Bailv
XJoLxxy "former

Annroval

possible

growth of principal

1 Prospectuses

and
ctlxvl

Trust Co., Garden City, N. Y.

selected common

...

con
L-vlIj

(by investment companies)
seen

Investing primarily in
stocks for

.

movement."

of this issue during the last quar-

Stock Fund

%

"Important single areas of agrge-

trast to considerable accumulation

since 1932

W

-

-

' Assistant

Co. by seven funds—this in con-

principal and Income

'

ond half of 1961 the economy WiU
have reversed the downward

were

possible growth of

*

equipment. The investment Tesearch department of
E. F. Huttcin & Co. pointed out:
ment

stocks for current income

...

a

.

ducer of farm

Investing in bonds,

and

for

of course,

Investors!

^

pr°?ess_prob^

was

A prospectus on each fund is available
from your investment dealer,

^

Deere &

there Was

:•

-

unanimity about the bright prospects for Telephone, there also

current income.

outstanding—

nuuuuuua-

is no infallible guidepost to fat capital gains. This was
being demonstrated in the closing
days of this year in the case Qf

If

of securities selected for

r

xiinuui

turers Trust in 1925 and was ap*
*
*
pointed an Assistant Secretary in The National State Bank of Newr^inpn4al; rrft«rii, ^
: 1955;
ark, N. J., announced that if will
Continental Growth Fund reports
; r
*
*
*
pay a stock dividend of 40,000
that
J® lts
30 senn-annual Appointment of Cora R. Callahan shares at the irate of one new
^Pha^addedtheseholdings: as an Assistant Secretary of Man-share for each 14 held,
^ipany was
In addition, the bank plans to
'p?C<wialso .announced'-by- Mr. Flanigan. offer 40,000 additional shares, par
ofJ ^ pr^,p'.ni p"
Miss Callahan came to the bank value $12.50, for subscription by
roiincplnrci
Tnr
rlnVn' TrSrn in 1943- The appointment of Miss the shareholders at $52.00 per
mentetand -Sub^
brings the total, humber" share-on the basis'of. one ior each
_s
oi women, officers of the bank 15 shares of capital stock held,
.Near^term prospects for. busi- to 35.
1
'
after diving effect to the stock
nessare^for further softness," ac*
*
*
dividend. Warrants for such subcording to Dr. Jolm W^Harriman, George O. Nodyne, President of scription rights would be issued,
economist for Tri - Continental the East River Savings Bank, New
The latest stock dividend and
^orp- But the recession now in York, announces that at the Board additional subscription would in-

that blue chip.

Investing In

A mutual fund

of

ownership

VE.1A9

are

under

completion

ex¬

spring of 1961.
*

*

On Dec.
8, Ben C. Peticolas, 53,
Executive Vice-President of the.

tributable
trust

January 1, 1961 to

beneficiaries of record at

the close of business

13, 1960 (as trusts

tAladdac/iUbetk

^fudukance

December

provide).

C/Cod/iitalSCife

Yfjcm/tctny, Trustee

50 State Street, Boston

Volume 192

Number.6012

the batik's capitalization to
640,000 shares from 560,000 and
capital stock from $7,000,000 to
$8,000,000. Surplus account would
crease

increased

be

from

The

Johnson

County

.,

lage,

Kansas,

had

capital stock from $400,by a stock divi¬
effective Nov. 29. (Num¬

to $500,000,

000

dend,

The bank also, announced that ber of shares outstanding
monthly Board of Directors' shares, par value $100.)
meeting held. Dec. 8, two new

members

appointed to the By

were

f

The

Board.

Nicholas

/Mr.
r

new

Directors

are

and

Mr.

Dekker,

i Western
{

/ s;

■

Pennsylvania

Pittsburgh,

Bank,

its

$450,000

;

/

has

re-

,-]■

■' •" ' '

*

-

.

elected

V,

/ Sjt

* "

Oster

_

has

according

to

;

;

,

■

Hooper

S.

sale

of

stock,

new

•

Maryland
State
Montgomery
County,

/

Bank

feet is Dec.
'• ;

■

;

of

lv/////';//'/'///*■ /v
*

;•

■

'

election of two

The

•;

stock,

the

Bank

Shreveport,

Shreveport,

increased its

common

in

!

;/■

A charter has been issued to the

■

Bank

W.

Assistant

Fraser

Trent

Vice-President

National Division of the Commer¬
cial

Banking Department. Norman
was elected Manager

A.

Hodgson

of

consumer

;

application

The

of

/-

'

v

Lorain

Bank, has been approved. The ef¬
fective date is to be determined.
'

■/

The

*

,

He

*

"

•

_

■

"\,v/

;

;/

of the Merchants

conversion

Trust Company, Muncie, Ind.,

and

its two branches, into the Ameri¬
National Bank and Trust Co.

can

of

Muncie, Muncie, D e 1 a w a r e
County, Ind., was effective as of
Nov. 30. Its President is H. E.
Woods and its Cashier is James
O.

The

Timbrook.

total

bank

surplus

capital and

Savings Association,
Francisco,
Calif.,
has
an-;

America

of

Representative.,V/ J

has

a

of $1,-

Bank

cisco,
don

of America,

has

Calif.,
Toledo

as

President

,

Johnson

will

for

-•

'

San Fran¬

Vice-President

Resident
Vice/ currently held.
Europe.
Y.
J.
dividend rate.
succeed
him
as

*

;1;

^

Depositsf
..

and

Chair¬

President

man

of the Royal Bank of Canada,

Board

9, at the age of 63.

son

was

appointed a Vice-Presi¬

dent.

Alloys Unlimited
Common Offered

part of the proceeds to repay
certain bank borrowings, part to
expand its operations into new
areas,
part
for
research
and
equipment
to
improve
present
use

National Bank of
Chicago,
Chicago/ 111., has in¬
creased its common capital stock

The

Peoples

from
.,

$300,000 to $500,000, by a
stock dividend, effective Nov. 30.
(Number of shares outstanding—

50,000 shares, par value $10.)
'

*

*

Hs

in

30,

a

into

of
275,000

stock

of the

Chicago, with' capital stock

$2,750,000,
shares
par

of

divided
common

value of $10 each.
*

He

George

F,

working

capital.

v

has been

Executive Vice-President
of the National Bank of Detroit,
elected

Detroit, Mich. Norman B.
also elected

Weston




Vice-

/ '. ;

1,

3.7

3,7

21.3

3.1

T

452

6.1

0.9

10.6

9.4

1.5

7.2

9.2

3.3

11.7

18.9

1.2

dollars.

-»Sept.

the

generally,

5.2
3.0

30,

I960,

,

*.

over

4.9.
3.4

Sept.

30,

Api-x. Bid

1959.

being made in 1960 by
banks are enjoying another

/

■'

Penn.

Girard

Tr.

Corn

the

non-re¬

ai

debentures may be
the option of the
102.04% and at de¬
r

a

ma¬

hold¬

business.

the sales finance

firm has

The

1,107 of¬

fices in this country, 159 in Can¬
ada and one in London.

1959.

Last

July 11, a wholly-owned
subsidiary purchased 46.7% of the
outstanding common stock of
Western Auto Supply Company, a
nationwide merchandising chain.
Capitalization of the company
Sept. 30, 1960, adjusted to re¬

on

current

the

flect

sale

of

deben¬

tures/consisted of $405,250,000; in
long-term debt, $180,188 in shortterm

obligations, 586,213 shares of

5% cumulative preferred stock of

$50

value

par

10,001,218

and

Shares

Est.

iUMH>

yo.ti

value per share.

Outstdg:.

/♦Book'

Yield

Earns.

Value

(OOO)

50

$2.30

4.60

$4.20

$39.85

2,370

Bank..

45-40

44

2.10

4.77

^.50

35.74

2,648

HAVERFORD,

58-51

56

2.65

4.73

4.75

44.27

1,692

bold's Son & Co., members of the

1,093

New

& T.

Natl.

Philadelpria

for

52-44

1960-59

1

Bkg.

slated

shares of common stock of $1 par

Recent
.

in¬

Co.

■/'

First

1968,

of

\

,»

19$1,

For six months ended June 30,
1960, the company reported gross
income of $66,372,107 and net in¬
come
of
$12,330,650,
compared
with gross of $60,596,164 and net
of $11,264,591 for the same period

excellent progress

Philadelphia

balance

Beneficial Finance Co. is

18.0

245

4%%

1,

creasing prices thereafter to
turity.
;:

10.4

425

the

company ; at

3.5

18.9

-

Co.

June

outstanding short-term bank loans

redeemed

0.1

3.4

Co—

Finance

due

business and in

10.4

Trust

Beneficial

which Of¬
Dec. 14 $50,000,-

The debentures will be

Book

2.4

B &

Union Securities
group

on

deemable prior to Dec. 1, 1968; in
the 12-mon,th period starting Dec.

Value

7.3

Tradesmens

a

company's general funds.

Oper.

6.7

Provid.

heads

publicly

with

Earns.

Pric«Range Mean

Exch.

Bk.

Price Divid.

r

With W, H. Newbold's Son

York

Pa.—W. H. New-

Stock

Exchange, and

Provid. Tradesmens B & T

60-53

58

2.85

4.91

5.oo

52.74

Fidelity-Phila.

57-44

53

2.50

4.72

4.65

43.59

957

other leading exchanges, announce

50-38

45

2.20

4.89

3.90

42.54

590

that L. Page Brown

Central-Penn.
♦Book

value

Trust

Co

Natl.

Bank

of Sept.

as

30,

-

;

ated

1960.

;

with

them

as

is

associ¬
registered

now

a

representative in their Haverford,
A healthier attitude toward retail

-

ANGELES,
CalifVictor
Adorian has joined the staff of
Dempsey-Tegeler & Co., 210 West

banking services is emerg¬
ing. The five biggest Philadelphia banks have check-credit plans
operating. Since 1959 time deposits development has been en¬
hanced by offering a 3% return on such deposits. In 1960, the
Greater Philadelphia Small Business Investment Co., owned 40%
each by Philadelphia National Bank and First Pennsylvania and
20% by Central-Penn National Barik, Was organized.

Pa., office, at 354 Lancaster Ave.

Present. stockholders are receiving increased dividends this
month. Year-end extras have been declared as follows:, Philadel¬

3rd Quarter Earning«

11 N.Y. CITY
BANK STOCKS
Comparison

25

phia National,- 10 cents; Girard Trust Corn Exchange Bank,

Seventh Street.

Bulletin

cents; Provident Tradesmens, 25~cents; Fidelity-Philadelphia Trust,
30 cents, and Central-Penn, 20 cents. Although the annual payout
by First Pennsylvania remains the same at $2.30 as in 1959, when
a 10c extra was declared, the annual rate of $2.50 is an increase

With Murch & Co.

Exchange,

;■.

Proceeds will be used to reduce
,

Loans

3.9

-

Dempsey-Tegeler Adds

York Stock

•;

.

Per Share Statistics

a

Presidents.

■

at 99.04 plus accrued
terest to yield 4.95%.

Assets

bean and Central American areas.

over

$2.20.

'

v

*

While Philadelphia banks continue to
"

.

Bequest

York

Stock

ExchsAgs

Stoek

Excbtsnfe

BROADWAY, NEW YORK 5, N. Y.
Telephone: BArclay 7-8500

primarily as sound income stocks, the future may find several of.
the issues as healthy, growth situations, as .well, should banking
services undergo more intensive development.;
;
^
J.
.

New

Members ~ American

120

hold investment interest

.

on

Laird, Bissell & Meeds
Members
-

>

,

R.

priced

highly profitable year as in 1959. Future substantial gains depend
largely on the active programs underway in the "Keystone State"
for industrial development, redevelopment and urban renewal to
bolster Philadelphia's good geographic position as a distribution
center in particular. Much of the progress has centered around
the city's Delaware river port, the second largest port in the U. S.
Bulk materials, such as petroleum, sugar and chemicals, account
for more than half of the Port of Philadelphia's incoming cargoes.
: The banks are giving more attention to foreign-business.
During
,1960, First Pennsylvania acquired. The Virgin Islands National
Bank and announced it ultimately plans to expand in the Carib¬

Vice-President
(Special to The Financial Chronicle)
and
Assistant Trust
Officer to
succeed Mr. Parker. Also Vice- CLEVELAND, Ohio — James F.
Skufca
has
been
added to the
Presidents Raymond J. Hodgson,
Richard D. Mange and Robert M. staff of Murch & Co., Inc., Hanna
Siirdam were elected Senior Vice- Buildingr members of the New
was

000

Deposits

663

of

Co.

fered

y

935

Exch.

In line with the

Alloys Unlimited; Inc., formed
in July 1957, manufactures alloy
components for a wide range of

(Special to The Financtal Chronicle)

&

Total

Bk.

Corn

facilities and the. balanqe, to in¬
crease

Assistant

/

Eastman Dillon,

Total

Bank_,

Natl.

Tr.

banks

LOS

*

Parker, Jr.

9/30/60

•

Girard

tMillions

certificate was is¬
and
sells
such
sued approving and making ef¬ semi-conductors
fective
the
merger
of Kaspar components to manufacturers of
American
State
Bank, Chicago, semi-conductor devices.
111., with common stock of $250,Upon completion of this financ¬
000, into Central National Bank ing, capitalization will consist of
in
Chicago,
Chicago, 111., with 525,003 outstanding shares of com¬
common stock of $2,500,000, under mon stock.
;
;
the title of Central National Bank
On Nov.

'

.

Central-Penn, Natl. Bank-.:

total, 75,000 shares are
being sold by the company and
60,000 for the account of selling
stockholders. The company will

Keith

Beneficial Finance

——Percentage Gain*-—

Total

$1,036

Fidelity-Phila.

the

direction

ing company with subsidiaries en¬
gaged primarily in the small loan

First; Penn. Bkg. & Tr. Co.

Philadelphia

Madison M. Walter, died on Dec.

Of

under

the

Fertig,

debentures

Major Philadelphia Bank Stocks

He':".'

The

J.

President.

The merged bank expects to establish a $2 annual

^

r"'

.

ment, of the First National Bank
of Chicago, 111. Also, James Thom¬

.

of

Manager

opera-

of
ard

held.

;

and

Fort

Wayne

Barker, Vice-President, and Leon¬

:

London branch.

I-:-

thefr
tions

•

Leonard J, Fertig

shares of the merged bank for each share of Girard stock currently
Stockholders of Philadelphia National will retain shares

appointed Gor¬

Newburger, Loeb & Co. and C. E.
Mr. C. Edgar Johnson has been Unterberg, Towbin Co. offered on
Dec. 14 135,000 shares of Alloys
named Senior Vice-President, but
will continue in charge, of the. Unlimited, Inc. common stock at
operating and personnel depart¬ $15 a share.
*

will

ances. The proposal calls for Girard shareholders to receive 1.2875

-

the

:

Camp any
"continue

•

/ The combined bank, to be named Philadelphia Girard National
Bank and Trust Co., will have assets of $1,750 million, deposit
in excess of $1.5 billion, and capital funds of $150 million. It will
restore Philadelphia National to top rank position in the city,
which it lost in 1955 to First Pennsylvania Banking and Trust Co.
The number of branches will total 66 and thereby surpass Mellon
National of Pittsburgh temporarily on this characteristic.
The
merger combines Girard, noted mainly for its trust and retail
banking services, with Philadelphia National which is more con¬
centrated in wholesale banking activities. The latter has held its
'lead as Philadelphia's leading bank for correspondent bank bal¬

National

327,946.25.
*

National Bank.

and

Hi

Lorain, Ohio, to consolidate under
the title of The Lorain National

•

Bank

in

*

:

•

*

a' '.;;^

*

Co.,

.Fulton, Reid

/;

'

'

Company,

Banking

*

J.

&

established
/ 1936.

Pennsylvania leads all states in the number of banks where
banking is permitted, yet the number of branches just
slightly exceeds the. total number of bank's. Even Pittsburgh's
/second largest bank presently has more branches than any of the
leading Philadelphia banks. Again, however, the trend is encour¬
aging since/Philadelphia's commercial banks at the end of 1959
had 205 offices as against only 106 in 1949. A dramatic change is
underway with the recent announcement of merger plans for the
city's second and third largest banks. A decision by the Comptroller of the Currency- is expected shortly on the proposal to
/merge
Girard Trust Corn Exchange Bank into Philadelphia

its

'

Bank of Lorain, Lorain, Ohio, and

the

of

The

National The

the

k

a n

Trust
San

■•'.///'/

/ : x/r r»-.. 1, H»: (/ *

Fertig

of

branch

nounced the appointment of Rob¬
ert Leigh James
as Washington,

services at the bank's

Main Office. '
,

as

•.*

the

in

Provident Tradesmens Bank, and Trust Company recog-

?

Cashier, and a total
of $400,000 in capital and surplus.

elected

was

B

Boulder, Boulder, Boulder Coun¬
ty, Colo. it will have J. H. King¬
dom as its President, Michael C.

of

Cleveland, Ohio, was announced
Thursday, Dec. 8, by James J.
Nance, President of the bank.
Donald

National

Arapahoe

officers

new

National

Central-

at

*

securities

ropolitan area has reduced its coipmercial banks from 162 to 98.

?

Mid-

business
T.ieonard

pizes this movement • by headlining its advertisements—'Things
are changing in Philadelphia.^ As the biggest
city in the nation's
third most populous state, it is.uriique^ indeed, that Pennsylvania's
largest bank is located elsewhere. In; conversation* with a Phila¬

-

the

.

;■

; activity.

,/

La., has
capital stock
Gaithers- from $5,000,000 to $5,250,000, ef¬
(Number a of
; burg,
Md., and Suburban Trust fective;; Nov. 28.
Co., Hyattsville, Md., merged un¬ shares outstanding—210,000 shares,
der
the
title
of
the
Suburban par.-,value" $25).
/,:,
Trust Company. The date of ef- •',»
/ " * •/. * .... *
/
The

,

In; the "City of Brotherly Love" the/seemingly complacent, attitiides held, by bank officers may be-giving way to;
enthusiastic

(Number of - shayesout-x

„■/ <

;

.

the

,/ west. $ t o c k
Excbange, has
.acquired
the

Bank Stocks

THE MAJQK PHILADELPHIA BANK STOCKS
:

effective"

$600,000,"

By the sale of new
Commercial
National

Miles,

/. ■''.•v

'■

\

;—

Arlington,

*v!;

Md.,

Chairman/'"■.

from

This Week

.'-J'

delphia; Wnker recently, this columnist was again reminded, that
Florida, has in¬
a major reason
why Philadelphia banks lag in* growth relative to
creased its common capital stock
the nation is that there are too many banks around. This drastic
from $150,000 to $250,000, effec¬
loss of leadership, greatest by far for a leading area, is nonetheless
tive Nov. 29. (Number of shares
tempered by merger steps in recent years. During the past ten
outstanding
10,000 shares, par
years the number of Philadelphia banks has been reduced from
value $25.)
'' ' -34 to 15
banks, and since 1949 the eight-county Philadelphia Metton,

been

Baltimore,

Bank,

4

Florida National Bank at Arling¬

Director of, the Baltimore

a

National

stock

•'/

By the

' /'

William.

R.

of

5

v$ia.);":.v"';->/vV-/'-**

Currency to
open
a
new
banking office on
McKnight Road in the North Hills,
M. A. Cancelliere, President, anbounced.

.

to

Nov, 28,

-■

WAYNE, Ind.—Fulton, Reid
Company, Incorporated, Cleve¬
land, members

'

Lumbertmi,

capital

common;

from/ the •■*".'

permission
Comptroller of the

of

FT.
&

National standing—60,000 shares/par value

Pa.,;

ceived

.

Bank

BURR1NGTON

5,000

—

Lumberton, N» C^ has/ibcrease<l

t

'#

Fulton, Read & Co.

BY LEO L

stock, dividend, the Southern*

a

National

William H. Keith, Executive VicePresident of the bank.
v
1

its

common

$20,000,000 to

19

L. J. Fertig Joins

Vil¬

increased

at the
*

(2399)

National

Bank and Trust Co., Prairie

$22,000,000.
;

The
Commercial and Financial Chronicle

,.

.

Bell Teletype NY

1-1249-49

Specialist* in Bank Stocks

gwwwmfa

ZZmZmmm^

20

The Commercial and Financial

(2400)

Chronicle

»■..

..Thursday, December 15, 1960

«

Alexander,* Chairman of the Board,
of New York

Let's

not, as businessmen,
ourselves off, or sulk in our

There

.wall

.equally.'hostile. One does not

-

,

Morgan Guaranty Trust Company

to know, but

easy

know

and
and

not

we

al¬

must

more,

Gold is in many ways a distinc¬
tive substance.
It's pleasing to

apportion the blame, I to withdraw from the. search for
at,
bright
without
people will agree sensible solutions, to pout on the look
being
that an atmosphere that set gov¬ sidelines. I would add that those flashy. It's easy- to identify, im¬
ernment against business, business, problems also do not permit any possible to counterfeit. Man tried
against government, was a costly group — though defeated at the for centuries, but he doesn't even
misfortune for all groups in this polls—to be put in the penalty, try any more. Gold doesn't de¬
.

,

,

the gold standard except for the use
of gold in making international settlements. Mr. Alexander suggests
the propitious moment for removing gold reserves from behind our
Federal Reserve notes and deposits would be when our balance
ing the 1933-34 departure from

hox.

country.

signs of improvement. - Until then, he
urges pursuit of every measure to correct our payments-deficit, in¬
dorses measures taken recently, opposes devaluation, and recom¬
mends prohibiting ownership of gold by U. S. citizens abroad. There's
no road back to the gold standard, he adds, in asserting that sound
money depends on monetary, fiscal and economic policies and the
wise, sound, honest human judgment required.
Business and gov¬
ernment are asked not to resume their opposition to each other
of

Which is which is

most

believe

bankers advocates complet¬

country's largest commercial

gold
folklore

,

trying to
One of the

about

fancies,

are

fables.
ways

facts

are

there

tents.
have to be a deep scholar of his¬ Let's keep the lines of communi¬
cation
open. The great problems
tory to see that a prolonged period
of
such
cross-purpose
in
our facing this country don't permit
society was a bad thing. Without any group, however disappointed,

Gold and Sound Money
By Henry C.

defensive reaction that

a

nessmen

was

payments evidences clear-cut

^

.

%

...

with

teriorate

.

time.*

It

doesn't

followed
Among
the
most urgent of shrink or* expand with changes in
the
weather.
Its
always
been
by eight years in which the at-, those problems is the problem of
mosphere
was
different.
There, money. For, if you go down the scarce enough to be much craved
and
sought after and never to be
was a turn away from the
direc¬ list of our great national objec¬
tion of constantly more govern¬ tives—the preservation of peace,, for long in surplus. Even today,
after
man's quest for it over the
ment intervention in the lives of the protection of the free world,
people and in the work of business. the making of a better life for our centuries, the total store of gold
It was
a
turn toward the firm people
and for those in other held for monetary purposes in all
lands
not one
of these ideals the free world amounts to some
road of, free enterprise.
ended eight years ago.
will be within our grasp unless 36,000 metric tons. At the U. S.
Now again the nation prepares
an important piece of
underwrit¬ for a change in national Adminis¬ we keep our economy strong, and Treasury's official price of $35 an
Membership in the IBA is cher¬
ounce, it is worth about $40 bil¬
that means keeping our currency
ing.
It
has
the
careful
build-up, tration. By earlier rules, perhaps,
ished by our bank. We value our
lion. That's less than half of what
sound.
•„
the mounting tension, the moment this would call for a
hasty
return
membership as a government se¬
our
Federal Government spends
of
truth
when
the
books
are to old battle
stations, for quick
This, I realize, does not sound in a
curities dealer and as a municipal
year. You could stack all of
opened, and then the quick un¬ resumption of old stances and the like an heroic challenge. It is not
securities un¬
it solidly in a room about 40 feet
raveling of
the plot — either invocation of old slogans. I hope romantic, not very exciting. The
derwriter and
long, 40 feet wide and 40 feet
glorious success or . . . sudden we have outgrown those rules. I task I outline lacks the glamor
dealer. But we
high — a space no larger than a
death.
It
all
has
a
format
as
also
hope no future government in of new frontiers, but it does pos¬ small ballroom.
have
a
classic, in its own way, as the this country will regard its mis¬ sess the hard truth of old reali¬
s e ntimental
The amount of new gold mined
theater
of
the
ancient
Greeks. sion as one of
punishing business. ties, the bedrock—not the shifting
reason
for
But, for those of us in commer¬ I hope no generation of business¬ sands—upon which we can build annually has been rising. Freeholding this
world production is running about
cial banking, that particular kind men will
automatically and in¬ the enduring structure of our na¬
a f f i 1 i a tion
That

20-year era

was

—

,

-

.

.

,

of excitement ended some 26 years

dear.

It

link in spirit

a
—

f

preserves

o

not

in

the

when
Morgan

days

J.

P.

&

Co.

and

that

was

called

then

Going

profits

with

in the early days of a Deal

to

back

dwell

Henry c. Alexander

is

the

ing for the

Guaranty Company

were

full

mean¬

present.

Then

tion of the Banking Act to recall,
with some wistfulness, that those

of

exciting days. For sheer,
agonizing drama, packed into a
short space of time, 1 doubt that

a

political

era

in this country

last

in

all

for

20

was

to

years,

and

which

among

its other trade-marks, the

were

there

is

business

another

world

to




process

in

compare

was

to

carry,

stamp of being generally hostile to

the

business.
climate

with

Not

surprisingly,

produced

The

I

of

majority

did.

I

elected.

be

electorate

The

proclaimed, in
terms more eloquent than all the
speeches, by that ancient com¬
mentator, gold. As the poet said,

in

most

this
busi¬

his

example

reaction

I

one

don't
us,

doubt

shall

graciousness

of
the

to
that

outcome.

we,

or

find things

to

is

message

I

Gold!

"Gold!

Gold!

Bright

and

yellow,

hard

and

cold."

n

of
criticize

being

the

the

■

speaks, men listen.

let's not rush to

day

the

Moscow

have

Distribution

though

petite

in

for

somewhat

.:*.

:

-

\

..
.*

*

'

through 24 offices

'

located in
1

principal

Public Utilities

I

Industrials

Municipals

$

'

•

Banks and Insurance

1

centers.

"

-■

•'

^

1

Boston
Detroit

Philadelphia

•

Minneapolis

•

Chicago

San Francisco

Pittsburgh

•

•

San Diego

Spokane

•

•

San

Los Angeles

•
.

Cleveland

•
*

Jose

'

\

.

|

Pasadena

'

Complete Trading Facilities

\

•

Stocks

|
f

'

financial and business

New York

•

I

distributing facilities
■

Bonds

•

Oakland
Fresno

•

Seattle

Louisville

.

•
•.

Eureka "
Palo Alto

satellites

is

are

and

doctrine
Lenin

that

is

one

washrooms
of
plated with it.

Portland

•

Indianapolis

•

Sacramento

.
.

in

the

Retrospect
United

States,

we

lacked respect for gold,

normal times

it

has

our

tended

restrained.

It

to

was

ap¬

be
not

restrained, however, in the fran¬
tic days of 1933, when the great

1 ^^Primary Markets

Coast to coast retail
1

public

never

mi

•

its

promised

would be

in

|

■

some¬

do know they

metal

have

to

■Hi

■

the

said

"

,v

•

and

we

fact that Communist

ridicules

Blyth 8. Co., Inc
"

—

important producers. This despite

1933

Administration.

new

Union

secret, but

Here

But When
gold moves, men watch.
dig into the back Lately we have been treated again
corners of the closet for the uni¬
to glimpses of the fascination this
forms
marked
"opposition,'' the substance holds, the purpose it
ones we put away eight years ago.
serves,
the
myths
it / inspires.
in

year

Gold!

some

Wheri. gold

Soviet
a

a

billion dollars at the
rate. The output of the

over a

official

Money

about the need to keep
money sound. But today this

our

has

rendered its decision—a close

in

Sound

message

businessmen,

would

Nixon

dent
know

and

Many speeches have carried the

Sulking

believe, hoped that Vice-Presi¬

low

which

r

'

for

indeed. Those of us who supported

in the first stages

were

we

Time

No

tons

thousand

thing

the Vice-President might well fol¬

Hostility to Business

viola¬

no

some

par¬

ticipants in the investment bank¬
ing business. I trust it is

has

a

great future.

Gold

a

which

followed

tion's

into a persecu¬
government.

lapse

tion complex about

on

point to be drawn
from those days and the ones that
but there

stinctively

New.

that
period hardly makes, I fear, a
cheery thought for many of us;

though unr tunately

—

ago,

Qxnard

Volume

depression
faith

in

192

was

all

Number 6012

deepening

currencies

ing.

The public

was

so

and
fail¬

was

demand for gold
great that the government

slammed the lid

vertibility

and

on

domestic

con¬

temporarily

em¬

bargoed shipments abroad.
Franklin

governments
for

our

shouldn't

justified only by the
of necessity. Over the

nine months,

ter

fashion,

in helter-skel¬

laws

were

passed,

directives

issued, market maneu¬
undertaken, and the gold
clause
in
contracts
abrogated.

vers

(

There

were

mistakes,

injustices.

were

though

it

•

But,

and

tnere

improvised

under

was

the

gun

of

panic

or
near-panic, - the - gold
policy which emerged from those
days has proved workable and is

with

siill.

us

dollar

to

It

become

which

about

has

enabled

the

nearly

fixed

all

the

free

The

important thing about 1933,
in retrospect, is not that we went
off gold, but that we stayed on
it in

different way. We stopped

a

coining

gold

domestic

and

took

it

circulation.

out

But,

we

readiness to buy and

our

sell gold at. a fixed price in trans¬
actions with foreign governments
or

central banks. In

utilization

lowing

a

narrowing the
gold, we were fol¬
trend which the other
of

major financial countries had be¬
gun

as

back

they

from
I.

War
much

the

Those

less

currencies

their

than

of

we

to

somehow
ways

to

way

World

holding
did, but
tie

their

to

gold,
economize

supplies of the metal.

the most part,

ing

chaos

wishing

for

their

countries,

gold

nevertheless

looked

worked

coins

Winston

of

"unwarranted

For

they stopped mint¬
gold — a practice

Churchill

of

in¬

described

as

extravagance." The

governments
which

banks

market for

is allowed to owp gold

us

central

-from

reason

one

and

speculators

who

side,

people

from

why

and

allowed

on

the

stand

are

and

we

hold

it

To satisfy considerations
taste, custom, or utility,' inci¬

dental

use

of

uneasy

gold is permitted in

the arts,:in jdwelry/iri ceremony,
in
dentistry,
and
in
industry.
Taken all together, these applica¬
tions don't claim enough gold to

The

threaten

an

open.

in

the

markets

tention

in

the

United

Hoarding and
In

Speculating

Gold

by two other

ever,

times, how¬

uses

to which

gold is put—hoarding and specu¬
lating.
By
drawing
gold
into
private hands, those uses work
against the policy adopted by this
country and most others of con¬
serving gold in official holdings.
Some

local

tions,

allow

other

or

the

private

buying
selling of gold under certain
conditions, even though they have
same

general policy of econo¬

mizing their gold
have. These
markets

in

have heard
The

its

prestige,

are

London.

It

reserves

as

gold, about which
a

we

the so-called free
we

great deal recently.

best-known

has

is
been

draws

than the others. This

there

was

concern

in

tained by
U.

S.

Not

Market

the

one

open

in

since

principally

the brief
ap¬
pearance of $40 gold in London.
After all, the appetite for gold is
a capricious
thing, like all human
appetites, and sudden flare-ups or
fall-backs of demand in thin

mar¬

kets can produce

price.

More

question
will

pockets

during and after World
War II.
Other markets, varying
in degree of organization and for¬

over

cant

in

sharp swings in
troublesome is
the

whether
time

draw

such
into

private

strongboxes signifi¬
quantities of gold that are

needed

official

holdings. This

mality,
include
Paris,
Zurich, iinvb'lves &lso the
question whether
Brussels, Amsterdam, Frankfurt,
the official reservoirs should, in
Beirut, Hong Kong, MaCad.v V
an: effort to discipline such mar¬
The
supply' of' 'gold 'to these
markets comes from new produc¬ kets, pour their gold into pipe¬
(inducing sometimes that ot

lines

that

may

lead to

the great

is

oath by which to

prove

get

it

It

which

was

1920's

home.

at

actually
the

deep

is essential that

open-faucet. The
free to stay out of

or

to find ways

going in if it believes that
for

What

all

national

our

of

course

of

the

do

course

does

other

any

although
vented

not know.

the

the

private

fact

has

tipsters,

being

free

not

this

Nor

do

times

to

citizen,

he

has

the

markets

for

gold

are

supposed, a bridge by which
hope one day to return

gold standard of full domestic

that

will

there.

We

take

we

safely

us

when

the

moved

this

troublesome,

to

on

does

transactions

obstacle

to

another.
not

true

not involve

pendence

a

on

currencies

in

back

becomes

economic

a

cod£

of

rules

must

have

and

must

metal

we

ever

some

rules,
the

metal

then

on

widely diversified economy—leads the
Bank of America and its associated

virtually all

municipal bonds issued in the State.

California's




orderly expansion

on

all fronts is made possible by sound financing

MUNICIPAL

Bank

of

BOND

DEPARTMENT

America
N.T.&S.A.

San Francisco

•

Los

Angeles

a

page

and

on

but

those

firmness

provide

resources,

investment dealers to bid

have

to

Intimate knowledge of California—

resources

an

prog¬

be sure:

can

are

continued

outstanding human

a

breakaway from de¬
physical masses of

metal. But of this

their base notdn

ought to face that fact

ample natural

If

seem

ress, then a new system will have
to be devised. It might or might

squarely.

her

sub¬
been

imperfections

too

national

if

had

bridge

no

it

our

probability—but if ever our
present system for settling inter¬

may

a

move

But
in

near

country's responsibility.
they provide, as is some¬

convertibility
such
as
prior to 1933. There is

gold.
retain

to many
them has

of

become

ever—and

and the
busier than ever.

The

1930's.

we

currency

None

perfect;
one

inside
oracles from

dopesters,

his

stances.
of

pre¬

the

depressions

back to

way

but

of

system, as indeed we
do, the discipline that gold exerts
through its flow from country to
country. Man, in his history, has

Neither

not

well?

so

monetary

tied

interest.

Treasury's day-to-day
decisions in this regard have been,
I

the

the

all

it, did that

stabilize,

commitment.

or

For

We cannot and should not

neither

gold

a

boom

of the 1890's and the

is

we

converti¬

work
to

wild

the

and

of

full

still paid to

supposed

had

we

with

prices for gold in for¬
eign markets has quite properly
been one of flexibility and non-

markets

and

having

operation

standard

standard

been

loyalty

one's be¬

money;

by

unreasoning

reverence

has

it

This

It shouldn't
well-managed
honestly managed money,

money,

coin

offi¬

letting some speculators
for gold in London rather
presenting them with gold

It

do

right.'/

sort of

lief in sound money.
be. Sound money is

bility here

we

for

gold

our

should

we

time

a

than

markets

and

of

that

sound,
honest, wise monetary authorities
and sound, honest, wise fiscal and
economic policies. We will not
get
it by submitting to the
automatic,'

i

criticisms

lip service is paid to

the

pay $40

those

not

world's

Adopt

Standard

ritual has become

will

for trial by the

up

the

to

Gold

wisely managed

.

Treasury

•

but

proper,

not

of

open-mouth

Gold

Operations

'was

is

hear

best

Concern

1954, after being closed for nearly
years

Enter

"when

premium

the U. S. Treasury.

Should

reservation

fiscal

and

21

the notion of "getting all the way
back on gold," always with the

they were not entitled
charging them only $35. The
Treasury's stated policy toward

see¬

Need

Too much

allow

and

more notice
explains why

No

cials for

to

ing gold quoted there as much as
$5 above the official price main¬

15

tion

We

The

recently at

to

in

monetary

■

market, because of that
historic financial role and

considera¬

and

the

city's

fit

seen

markets.

States—

price in London last month.

countries, in deference to

custom

dollar

London

A threat is posed at

sound

whims

then

run-up

not

trading

States,

policies, with wise monetary and
fiscal management, and with the
strength
of
our
economy.
The

This didn't attract much at¬

nothing at all like the
Hits

with

banks.,

price

ounce,

has

United

dollar. We must defend it at home

gold brings in these
markets tends to fluctuate, some¬
times rather violently. In the first
few:, years
after- World War II,
gold sold often at well above $50

world

the
adequacy rof
the
supply available for official
monetary purposes.
'
v "

central

or

the

astride the foreign markets
keep the price there pegged.
That is not the way to defend the

—

to

Sees

gold
here,
would have nothing to gain—and
conceivably a good deal of its
gold to lose — in undertaking to

who

ernments

be

which

private

another,

are

specu¬

Convertible

Certainly

The demand comes from hoarders

buy

hoarding and

lation.

the

enter
or

of

this..-country,

sink-hole of

or

abroad.

of

for

legitimate monetary purposes,
declared

settlement

occasion

about their currency, and
again on occasion, when the
price is low enough—from gov¬

point

now
array them¬
monetary solar system.

a

of

none

the

world currencies

selves in

banks

reasoning is the core of
gold policy today. That is why

in

drastic

next

central

That

action

grimmest

and

the

in

use

the emergency powers of a
World
War I law to do this. Such
was

(2401)

- for
gold, , this
line
of the Soviet Union), from hoarders
reasoning holds, is not in people's who have grown tired of hoard¬
pockets or under-their mattresses ing, from speculators who have
but
in
the
official holdings
of decided it is time to sell, and on

first
used

*

place

ternational balances.

Roosevelt, in the
days of his Administration,
,

The Commercial and Financial Chronicle

...

of

dis¬

110

r'.-^rU^

yijk,
WMW.m *

22

The Commercial and Financial

(2402)

and

Why It Is Essential That
Will MakingNotBe Deferred

their heirs—then your

.

reminder
make

"While

I were

and

Babson

Europe this Fall, three of our
friends
passed
away.

in

ho

will, despite my mrgings.' One
promised he would do so

had

uwhen

He

time."

had

he

be¬

grudged the expense and felt it
really was not necessary.
Let
three

these

discuss

me

cases.

of his mother and to

work

for

Then

land

One

Number

Case

this

the man left a
wife
and
three
children,
and
several brothers and sisters who
have children. The wife assumed
case,

get all of her hus¬
estate and then will it to
their children. But she did not.
Since her husband left no will,
would

she

band's

fhe

one-third;

only

given

was

two-thirds
was
divided equally among the child¬
ren,
Nothing was available for
the deceased's
brothers or sis¬
the

remaining

ters

is

This

cousins.

or

.

it

as

but

second

man

left

children

two

Three

Two and

Number

wife—

no

well

as

as

brothers, sisters, and cousins. All
of his estate went tp his children
in

outright,
the

equal
heirs.

their

to

or

brothers

or

One

relatives.

proportions,

None

sisters

child

23

to

went
or

other

of

years

received the monfy outright;
the other was a minor, his

age

since

share
dian

entrusted

was

the guar¬

to

appointed by the Court.

The
no

ing

his

third

and

estate

man

left

a

wife

These

ered

sacred

sisters

will

which

be

she

and

cousins.

His

or

$100,000.
The
given the $25,000

would

receive from

$25,000

an

over.

automatically

estate valued

In this

also

will

The

remainder

will

brothers

and

man's

"will"

or

wills

his

at

were

consid¬

the

Roman

by

Courts, and their policy and pur¬

adopted by the English

pose were

Courts and carried to America.
I

recently

have

seeking

been

copies of early records of the 40
families who settled Cape Ann
(which now comprises Gloucester
Rockport, Mass.).
The very

and

earliest

documents

get

a

second

case

at

she

$25,000.

to the
sisters
or

go

first

The

are

wills

the

arrived

Babson

in

Salem from London after 60 days

in

a

small sailing vessel.

She

was

a

widow

Isabel

and

she

to

came
was

named

Cape Ann in 1637.
enterprising and

very

were

written

on

of paper—per¬

haps on birch bark — they were
held very sacred and history still
records their contents.;

Cost

of Making

a

The best way
tion of your

Will

^

wish

you

is

to

have

,

will
This

your,

drawn now by your lawyer.
also enables you to make

V:

•;

The investment

hospital, which

been

do.

To

out

of

should

should

everyone

provide for the carrying
your
wishes, your will

name an

space,science.

v ;

subject

executor in whose

a

m

t

a

e

obsolete

as
:v>

superiority? As individuals

the

image

the

Wall

face great

we

of
St.

future.

...

ing the starv¬
ing widow in
his
clutches.

the century we

solution

of

N.

Certainly,

m^blems

of

and Robert F. Seebeck to partner¬

from

tude. In education, in civil

ship.

experience of
22 years' asso¬

on

Jan. 1 will admit Max F. Bru-

baker, William R. Grant, Edmond
Morse, Roland H. Schuerhoff,

his

Mr. Schuerhoff
headquarters in

Boston

will make
the firm's

office.

Between

own

my

Charles H. Percy

our

Admit Partner

that

we

and

rely heavily

New

Company, 44 Wall St.,

York

City, members of the
New
York
Stock
Exchange, on
Jan. 1 will admit John B. Lynch
to partnership. '
: :

on

on

tremendous

farms

our

that

we

for ad¬

that

we

vice and counsel. Not only are you

tem

be

capital

the

necessary
growth of our

for the vitality and

Shields &

magni¬

of

a

system; but, more important, you
are
bringing creative,
dynamic
ideas
and
opportunities to our
businesses and making major con¬
tributions
to
their growth and

stable

face challenges

we

must meet and problems

lest

must solve

weakened

so

our

sys¬

that

our

provided for us the highest stand¬
living in the world.

ard of

Essentiality of Education

With George O'Neill
(Special to The Financial Chronicle)

.

HILLS, Calif.

B. Fleischmann has

—

become

ciated with

asso¬

to

come
as

Whether

bankers,"

the

Dale mercial

George, O'Neill & Co.,
Inc., 8929 Wilshire Boulevard. He
&

The

or

investment,

look

a

economic

of

face

&

Education is

ahead.

not

cultural nicety; it is the cutting

it for survival.

America

By 1976 there will
million Americans of school

be 76

Glore, Evans is
changing, but its principles will
Co. and Wedbush & Co.
remain the same. Broadly based
formerly with

and

college
million

42

will

There

age.

children

be

in

primary
private ownership of the means schools and 13 million in high
of
production is the basis for schools. We will need 600,000 new
initiative and growth. The profit school rooms in the public schools
system is the incentive for prog¬
ress.
And individual freedom is

And

life blood of the system. A
violation of any one of these prin¬

uals acting in the interest of

alone

Co.

500.000

and

their
communities, and with
resources
that
they
can

own

anteed.

muster locally.

In

tarian

ject

fact,

free

a

precarious.
controls

system,

Lacking
of

we

ourselves

system

the

the

is

the

offer

totali¬

risks

local

Our

the

With

willingly sub¬

to

teachers.

new

the job of meeting this tre¬
mendous need rests with individ¬

ciples weakens the others. The
capitalist fulfillment is not guar¬

rigorous

Bear, Stearns

education

our

edge of civilization. We must have

partners in our business.
The

lies

that

have

bankers

our

upon

com¬

we

problem of

system is an outstanding example
pf the magnitude of the challenge

-

of

BEVERLY

trust—allowing her the

of it

development. From our point of
view,, then, we see no problem
whatsoever in "being in the hands

always

great

metropolitan

another
more

great

than two-thirds of our

dweller

of

are

highest priority in

Exchange

INDUSTRIAL, RAILROAD, PUBLIC UTILITY,
MUNICIPAL AND FOREIGN. SECURITIES

UNLISTED TRADING DEPARTMENT

Wertheim & Co.

CHICAGO
—

/

■'

y

,

.

;MEMBERS

[ V,''~

New York Stock Exchange'
American

Stock Exchange

New

Teletype: NY
-

\

1-483

i-485

York Coffee

\
&

■

New York Cotton Exchange

,

Commodity Exchange, Inc.. "

areas

challenge.

population living in metropolitan
areas, the interests of the urban

of

freedom and individual action.




rights,

people turn to the government for
the solutions to their problems
rather than to the system that has

the

NEW YORK

of

growing economy, in the great
urban centers of population and

associates in the

investment banking field

providing

end

must work for the
pressing
domestic'

a-id.

friends

testify

the

and

now

maintenance

the

in

Howell, I can

ciation with Bell &

Shields & Co. Will

was

Members New York Stock

—

its

and

—

challenges at home and abroad
and what we do as individuals
will determine the course of the

hold¬

banker

businessmen

as

as

.

Smith, Barney & Co., 20 Broad
Street, New York City, members
of the New York Stock Exchange,

demonstrate

to

continue

movies is

poor
'

•

promise of capitalism is ful¬
that a free society can

the

filled and

e

v

capital-

a

to make as

with

friends

-V

is: What can we as

his

t i

cap

Smith, Barney Co.

-

individual. So the question
individuals do
certain as possible that

is the

r

u

democracy—in

a

/

system—the seat of authority

i-t.-o

of home
that the

photographer
boring

■'

In

almost as many

jokes as the field
movies, but I believe
image of the
bad

efficiency, stability and responsi¬
bility you have confidence.

To Admit Five

banking field has

to

■>.

the Individual

of

Role

•

..!~

/.

•_*.

sorhe

donations to your local church and

complicated, leaving
property perhaps to your wife, in
more

use

to assure distribu¬

,

life's savings to
go as you would like, you should
have your local lawyer make up
your will. If it is simple, namely
leaving all to your wife, he may
not charge you more than $20. If
is

>

-•v ;• v:

greater need tor wore courageous men

a

history to cope with the

in our

v:

.

than ever before
challenges and opportunities facing
us at home, abroad and in space.
This era, Mr. Percy, makes clear, ~
holds more promise, mora opportunity and more challenge than over
before in history and requires that we act without waiting for a
threat to pressure us into acting. The well known, successful busi-'
nessman
asseveratively singles out education, .urbanization, indiVidua! freedom, business practices, taxes, threat-to our raw material sources and markets, world development, world peace and

Tkere is

property exactly as

To enable your

it

The

based upon

as

no

scraps

are

in

effect in Massachu¬
setts as of Jan, 1, 1957,
When■
the time comes for settling your
estate, these laws may be. quite
different.
L'
\

She
—

doctors—served as
a midwife.
Also, since there were
no lawyers, she helped the fathers
make wills.
Although these were
there

but

exceeded

wife

wishes

death.

children; he did have broth¬

ers

chil¬

any

dren; anticipating this, the father
left a written document outlin¬

30.

The

leaving

of these inhabitants around 1620-

should be.
Cases

sometimes

owners

without

secure

children.

other

any

cited above

laws

-

Originally when a man died
property went to the old¬
est son. He was supposed to take
care

President, Bell & Hotvell Company,
Chicago, III.

-

Documents

all his

died
In

spring¬

now

Legal

Oldest

Wills

knew had made,

I

of these

the

ing up in all directions.

intimate

Two

heirs who are

their

subject to change.

are

cases

having a will as the best way to
that prop2rty will be distributed in the way desired.

sure

Mrs.

will

the importance of

on

By Charles H. Percy,*

the distribu¬

tion of estates where there is no.

Forgetfulness in prsparing a will costs much in many ways but can
cost little when not nsglected. Mr. Babson hits hard on this point in
a

concerning

Thursday, December 15, 1960

.

.

Individual in
Challenging Times

These

take.

Laws

■

.

Role of the

lawyer will

charge more. He will charge ac¬
cording to the amount of his time

By Roger Babson
,

during her life¬

time with provision for equal di¬
vision
among
your
children or

you
i

income

the

Chronicle

,

New

Sugar Exchange,

120 BROADWAY

New York

"

York Produce Exchange

5

Telephone: REctor 2-2300

inc.

,

.

*

Cables:
Wertma New York

Volume

192




Number

6012

.

.

.

The

Commercial and Financial Chronicle

-

■.

(2403)

:2jrX?rt2':

TSC F;R?T
*sm-A?, f*rm;

■lliBT

n atl o nal

city bank

wmm

Mutf

Cfeg&rtaen*

Tebfype NY 1-/08
.

♦

Office 55 Vtaft St,; RY.
s

teemhor hd&rat Dnpo&, fo&ittmce

'

v

v

Corporation

w

Greater New Ybrk

23

24

manner

Role of the Individual in
These Challenging
Continued from page

Times

economically and politically would

23

be the greatest victory the Com¬
constitutes
munists could achieve. And they
the
can
do it without firing a shot.
world outside the polar regions.
These are the facts we all know
There
dwell
upon
it
perhaps
and in themselves they
give us
three-fourths of the human race.
some measure of the job
we face
With the industrial complexes of

land

mass

two-fifths of the land area of

all

Great

including

Europe,

Britain, and all Asia, including
Japan, and with its vast natural

Eurasia

resources,

comprises

ahead.

can

If America's economic system

are

ultimately
successful, that part of the earth
left

American

to

is

strategy

influence

will

elements either be so small as to constitute
Whoever, can grounds for surrender or as a
drastic
dominate Eurasia can potentially minimum bring about a
our
economic well
dominate the world. The new axis reduction in
itself

within

of

world

at

major

power.

axis being at horde.
heart of this

Moscow-Peiping

threat—the
•—lies

the

the

very

in World

Development
their strategic center, the
thrust

Berlin

at

Communists

can

and Western

Europe. Or they

to

turn

world

the

and

opposite

I

side

In

rest
can

of the

thrust at Korea which

our

relationships

the

of

world,

no

the
problem is
with

pressing, no challenge more
exciting than the emergence of

more

the

if

is
individuals

we as

must

play our part in keeping
strength, we will not
to the demands that ..the
now
imposes upon us. We
maintain
our
strength at

home

in

to

be

up

world

order

to

the

assure

America

is

not

firm

small

not

the

communication

in

medium

nity than

ask our¬
selves whether we are using it to
convey
meaningful
information
and knowledge. Our own experi¬
ment
has
proved
worthwhile.
Eighteen months ago we decided

time

our

and

seems

everything

Underwriters, Distributors, and Dealers

for

in

of

also

And

Members

New

York

25 BROAD

Stock

&

Exchange and

CO.
Other

we

Telephone: HAnover 2-0600

FORT PIERCE

NEWARK

MIAMI

LAKE WORTH

BEACH

LONDON

PALM

GENEVA

BEACH

Newark

Washington

Miami Beach

third

of

Palm Beach

Port Pierce

Z

Lake Worth

free world hold up

a

;

■

,

address

by

Nov. 30,

Fla.,

Hollywood,

the

is

use

the

when

To Admit Partner
On

Jan.

1

P. Penny, Jr.
partner in Mitchell,

George

will become

a

Hutchins

Co.,

&

members of the

are

we

Can't
great spirit of

same

We have talked about the

COLUMBUS,

Ohio

has

joined

Brownell
Vercoe

&

Co.,

members

Building,

Stock

chal¬

more

ever

est

courageous

than

men

before in history. The great¬

deeds

to do as a

unsparing
many

space,

which will

the

Never

new

relationships

Exchange.

••

in

lag

has

between

achievements

achievements

Leydecker & Co.

we

will be called upon

nation will demand the

individual

of

effort

millions of citizens. A

na¬

(Special to The Financial Chronicle)

OAKLAND, Calif.

—

staff of

Stephenson, Leydecker &

Co., 1404 Franklin Street.

be

closed
concepts of how
must

gap
new

U. S. Government,

Securities

State and Municipal

his

with

so

Telephone: HAnover 2-3700

whole
live

men can

together.
My
Age

entered the Space

company

the

and

electronic

instru¬
■

mentation field

its

\jr V

in

year

*•

Consolidated

miniature

five

Bank and Insurance Stocks

early this

with

merger

Electrodynamics Corporation. The

Securities, Municipal Bonds

Unlisted Securities

tape recorders in
satellite, which can

Courier

the

receive

teletype
traffic at the rate of 68,000 words
per
minute, were all developed
by CEC. We have all watched
Echo

I

move

as

CHEMICAL BANK

transmit

and

marveling

the

across

all

men

do

skies,
at

NEW YORK
TRUST COMPANY

the

Founded 1824

majesty of this great achievement.
As

Laird, Bissell & Meeds
Members

120

New

York

and

American

Stock

Exchanges

Telephone BArclay 7-3500

Bell

Salem, N. J.

Dallas, Texas




Philadelphia, Pa.
Salisbury, Md.

have

but historic

ence

in

come

to

the

the

New Haven, Conn.

Dover, Del.

Zurich, Switzerland

we

the

we

beings unless
use

the

dimension

and

have

we

immensity of
that has

relative

occupy
we

another

can

possess.

No

fore

the

our

eyes

are

whenever

will

people

of
not

Convenient Offices

unim¬

demonstrate

dramatic

been laid be¬

this

15

human

as

more

ever

Department

30 BROAD STREET, NEW YORK

been

the God-given reason that

challenge has

Bond

speck of influ¬

universe,

realize

new

portance

Teletype NY 1-124849

established

small

and

Wilmington, Del.

we

opened,

BROADWAY, NEW YORK 5, N. Y.

He was

formerly with Dean Witter & Co.

Dealers in...

great. This must be repaired. The

Railroad

Franklin W.

Schindler has been added to the

the

been

earth.

now

'they.- be?

If

lifted,
If our

was

With Stephenson,

man's
and

New

He

Company.

science.

of

history

Bank

Westheimer and

setting

new

a

achievements

political

Industrial, Public Utility and

the

must

a breathing
devise new

provide

before

scientific

UNDERWRITERS and DISTRIBUTORS

of

-

to

chance

a

'

the staff I of

to

con¬

,

David S.

at

challenges there is a greater need
for

—

Huntington

previously with

home, the challenges
abroad, the challenge of the new
dimension of space. To meet these
lenges

Now With Vercoe
(Special to The Financial Chronicle)

York

Meeting the Challenges

hand"

We

the

Conven¬

1960.

Mitchell, Hutchins

the worst?

the world from fear?

achieve¬

peace.

••

before

Association

Bankers

Investment

iV'^Vv,

Mr. Percy

are

challenge

great

lasting

potential

-

*An

us.

modern

Science

and

fronting America

for

Direct Wire Service:
New York

ahead and fulfill the promise that

America and

,■

Peace

ment

in

felt

institutions and

AMSTERDAM

we

"invisible

itself

give the human world
WASHINGTON

we

possible

it

obligation

an

Smith's

making
society. :

A

Teletype: N.Y. 1-210

best

our

cooperation which made the In¬
ternational Geophysical Year such
a
success,
such
a
magnificent
experiment, as the basis for fu¬
ture peaceful cooperation to free

keep
our
country
strong
through
greater
understanding.
This
is, indeed, the precept of

Exchanges

STREET, NEW YORK 4, N. Y.

up

considerable

believe

we

fulfilling

opportunity, more challenge,
time in history. It is
to each of us to be certain that
meet the challenges that lie

help

Adam

HIRSCH

with

faith.

promise,

important part

an

market

impact.

Corporate and Municipal Securities

make

reach

to

at

act

we

why

was.

programs

us
our

have

more

solidify this
New York Stock Exchange. He
defense
of
will make his headquarters at the
Earthlings hold
must we always firm's New York officer 1 Wall St.

threatened with

We have also demonstrated that
such

But

dear.

equally
as
exciting
as
a
of the West as it prob¬

never

have ever had. If
attacked
from
Mars

holds

tomorrow, we would
earth
in
a
great

portrayal

ably

to

opportunity

earth.

we

were

we

appropriate

more

an

the

strides of science and
technology offer
us
an
oppor¬
tunity to work together in peace¬
ful harmony—a greater opportu¬

must

and (we

world

the

The great

We

done.

era

have

than at any

tion,

of

resources.

more

space
offers
America and Russia and the rest

probing

be

The new

before

rediscover

nations. As new
could become a dagger pointed at
nations come into being and as
Japan. Or they can seize Tibet as
old nations seek new economic,
Red China did in 1953. Or they
social and political achievements to devote 100% of our television
can
send arms to Egypt or Iraq
for their people, America and the
budget to the sponsorship of pub¬
to
inflame
the
Middle East
or
free world have a deep obligation lic service shows on
prime night
send
guns
thundering into
the
to
provide leadership, to offer time, which, with the cooperation
Formosa
Straits
one
week
and
assistance, to give guidance from of the networks, became a tele¬
precipitate a crisis over Berlin
our
experience and to be con¬ vision first.
the
next.
Whoever
controls
stantly on guard to be absolutely
Eurasia can easily control Africa.
Sponsorship of such great pro¬
certain that the foundling nations
And
a
Western Hemisphere cut
grams
as
NBC's "Why Berlin?"
do not mire in a chaos
of un¬
off from the materials and mar¬
CBS REPORTS' "The Population
realistic aspirations
and fall in
kets and manpower of the rest of
Explosion," and "Who Speaks for
with the easy delusion that in¬
the world could not long remain
the
South?"
ABC's
Churchill's
dividual freedom can be realized
VALIANT YEARS, as well as ex¬
independent,
economically or in a
captive nation. America must clusive
politically.
sponsorship of all ABC's
join with the mature and de¬
public service shows, has con¬
The Communist strategy, then,
veloped nations in making avail¬ vinced
us
that
the
American
is to cut America away from her
sources
of raw material and her able resources and technical aid public wants TV diet more sturdy
markets.
To
isolate
America to the emerging nations in such a than pablum. A portrayal of the
real problems and challenges of
developing

opportunity to

to

need

the universe, how
can we lay aside our petty quar¬
rels and differences on this earth?

of

on

history,

is the

a

The

their

night time in the great¬

est

Mars—it

on

life

possibility of finding

new perspective on our¬
selves. The achievements of

of prime

We

the

gain

Business

of

treasure

great will to do the things that

understands the findings in

and

its future

a

rest

American culture
our use of mass media.
has a virtual monopoly

and

secure

when • its citizens are
trained
in
self-discipline,
selfi
reliance, and resolution.'
We have our; friends, our free¬
dom, and our strength. We have
a

opportunity

great

the

businessmen

is most

brightest

which

tried to examine the role of busi¬

through

vistas,

come

tion

exploration offers us is not
chance of going to the moon,

spread

and

minds

space

of the idea of
freedom, and world peace. Speak¬
ing for my own firm, we have
ness

ever

we

can

•The

American

international

the

ing,

expanded,

this planet?

on

misplaced.

and

but

toward

Thursday, December 15, 1960

busi¬
will
be
meaningless if
individual" science
businessman can take they tell us nothing of ourselves.
If we do not stand humbled by
firm steps in the road

individual

The
ness

now

.

to grips
with the problems which beset us

of the world that their confidence
in

not

are

.

.

they ever be? If our
not challenged by these

how

America's

impact

S. Must Assist

U.

area.

From

fail

American

this

If

horizons

maximum

insure

to

as

independence and mutual respect.
not strong and

Eurasian

Financial Chronicle

The Commercial and

(2404)

in all five

boroughs of New York City

Volume

192

Number

6012

.

.

Commercial and Financial Chronicle

The

.

in

Civil Aeronautics Board

(2405)

at least

saving of

a

2 billion

dollars, and give to us a super¬
sonic transport, perhaps a decade
than

sooner

And the Aviation Industry

we

otherwise

would

We

convinced that it would

are

be

General

By

Elwood

R.

Federal

Our first administrator of the

Quesada*,

Aviation

physically impossible to have
a
supersonic transport, certainly
in that speed range, without ex¬
ploiting to the maximum degree
possible, the know-how that has
developed from the B-70 program.
Now, in terms of |ime, we are
anticipating
an
operation
unit,
and the first one, in the area of

Administrator,

Agency

newly-created Federal Aviation Agency

plots what the investment banking industry can expect in the way of
aviation

future

and financing

progress

The exp'rianced ad¬

areas.

ministrator expounds on what is being done to promote

which includes the staggering problems of supersonic transport and

i

assessment of the role of government.

an

where he agrees

am

bankers,

as

of

cause

that

sure

interest

some

all-weather landing

as

I

1970.

Gen. Quesada makes clear

and disagrees with the F. B. A.'s Aviation Securities

Committee, reviews such technical problems

material

this

is

financial

There

Another

between the British and ourselves,
and I might inject at this point

of

we

countries

share

attempting

are

with

operate
in

of

the

Free

effort

our

to

and

any

co¬

all

the

World

and

to

develop

a

supersonic transport.
This

obviously

by frustrations,
ized

than

problems, but

accompanied

is

some

more

are

So

are.

we

this

means

of them

none

The British
mitted

loys,

to

the

In

faces

the

use

"boom." This is really not a boom;
it is not sound—it is just a quick
and

of

rapid
it

change

is

sound.

not

order

We

of

is transmitted
You

think
moves.

sound.

It

change of
are

is

pressure,

in

the form

it

is

sound.

But it

just

really
quick

a

pressure.

convinced that the pub¬

lic's interest would not be served

somewhat

use

of the light al¬

com¬

other

or

that

boom.

supersonic

transport, or
any supersonic airplane, it is fol¬
lowed by what we refer to as a

seem

are

aluminum,

complexity

the sonic

any

of Your eardrum

social¬

be insurmountable.

to

is

and

because

countries

these

of

burdens

used.

us

it has been to us, be¬

the

be

difference

investment

to

to

fundamental

vast

a

light

if

we

disregarded

boom
moves

effect
across

as

land

the

supersonic

the

transport

masses.

So

we

very actively engaging in a
irrevocably
system, dwells on the need for an all-cargo airplane, and appraises
that now beset the air transporta¬ committed
to
the heavy
alloys, sincere research program to meas¬
the
conflicting problems of regulation.
His concluding remarks
tion industry.
■■
) •
. •
:' such as steel. We are convinced, ure more accurately, and deter¬
contain an up-to-date analysis of the "Electra" airplane experience.
We anticipate that by 1970 the and for technical reasons, that if mine more accurately, the effects
present
economic
burdens,
to you are going to go into this speed of the supersonic boom, and learn
would like to refer, if I may for to develop the government's role which reference has been made, range, you cannot use aluminum more about it than we now know.

I

a few of the
previous speak¬
I would like to refer specifi¬

moment, to at least

a

of

remarks
er.1

cally

to¬

in

that

they

this

are

that

might
prised

s

t

should
from

I

cause

sonic

be¬

This

and

said
to

do

I

that in the last 10
years,
or
even
15 years, MATS
has
not
transported a military
unit, a combat unit as large as a
battalion,
whereas
during
this
same
period I suppose they have
transported hundreds of thousands
of people between city paths that
are
served by our large air car¬
riers, specifically, and as an ex¬
ample, from New York to Frank¬
fort.
I
might
re-enforce this
support of your previous speaker
by saying that MATS in the last
10 years has carried more chil¬
dren, under 10, than it has carried
might

say

this

think

I

And

units.

combat

it is
contrary to everything that free
enterprise stands for, and I hope
that something can be done about
it, and I hope that IBA members
will assist.
I assure you that I
am trying.
It is a scandalous sit¬
uation, at least, in my opinion.
Now, it is obvious that I got
wound
up,
so
I will try to be
more
objective perhaps in my
all

is

I; think

and

wrong,

us

in

one

very,

a

its

very

and it affects all
or another as

industry,

large
of

is

sense

in

industry

aviation

The

one

of

I

be

are

will

upon

comment

on

As
as

the

in

the

on

of

order

ex¬

vinced

part

very

a

least

at

to

Jan.

20,

con¬

are

we

whatever

that

the

part

government takes, it should pre¬
serve the better elements,
or the
elements
of the free enterprise

Securities Markets

system, and any aid that the gov¬
ernment

provides

it

and

—

must

must be accom¬
panied by some degree of risk on
the part of those who receive the
aid. And it is within this general

provide

some

—

that

framework

are

we

progress¬

will

I

the

We are convinced that the gov¬

ernment must make

real effort

a

develop the necessary propul¬

to

system.

sion

of Institutional

convinced

are

a

and

which

develop

to

is

going

to

very complex device,
costly undertaking.

very,

very

a

effort

casual

a

airframe

the
be

We

government must make more

than

Multi-Billion

Program

we

are

Force

a

oping
sonic

Investors

the

which

This
of

on

a

B-70, which is

bomber

We are, among

other things, at¬

the

in

a

same

super¬

speed

several billions
obvious to me,

costing

is

It

dollars.

and T

is

it is

hope

to

you,

that it

would not be reasonable to engage
in

a

lions

repetition

of

start

of dollars you

this

order

spending
are

of

bil¬

having a

profound effect on our whole eco¬
nomic
structure,
particularly if

at¬

although casually.

gov¬

to which I have previously
referred: 3 to 3.2 in mach number.

you
8

made reference,

the

the form of the Air
this occasion, is devel¬

range

and

respect and
previous speaker

time

present

ernment, in

So

tempting to do in this
.to

the

At

comment on

things

are

doing so on one product.

our

whole

program,

which

progressing with
reasonable
speed, is geared to follow, so to
speak, the B-70 program and ex¬
tract from it everything that is

is

the devel¬ possible as a contribution to the
supersonic transport, development and use of the super¬
sonic transport.
same time attempting

tempting to encourage
opment of
and

at

a

the

If this is

1 Herbert

Securities
page

Chairman
Committee.
See
Kahn,

47.—Editor..




Aviation
Report

on

need

to suit eve

ing.

I refer to the

both domestically

and

of

is only one
example of portant to us is the noise probContinued on page 26
complexities that face us.

This
the

metal,

should be is, in
difficult problem.
far
as
I am concerned, and
far as the agency is concerned,

itself,

namely, the duties spending.
When you
us to promote air

pleasant first,

some

Factor

I
would
imagine
well, that private
be

as

that

What

way

attract controversy.

abroad,

The Noise

Another factor that is very im¬

built.

and hence, if it is to be
accomplished,
the
government
must take some active part in it.

of which is pleasant, and
other extremely unpleasant,
from time to time they both

commerce,

once

pense,

one

that.fall

unit

3.2, which

or

cannot and will not
able to bear this burdensome

points that our agency en¬
in, with respect to this vast
industry.
r
The duties that befall the ad¬
ministrator fall into two catego¬

but

the

less.

or

and

others

gages

the

for

area.

the speed of
permit travel
York and London,

industry

few

ries,

getting hot in this
again, in very

hot

development of such
is
accompanied by
staggering problems.
The
is staggering.
We are con¬

vinced,

whether it is healthy
I might add that
what the agency that I head does
also affects the aviation industry,
hence

life

be faced,

unhealthy.

and

and

rapid order, would create a short

technical

is the alloy

which

cold

program

it progresses,
or

and

within

due to

the

Now,
some

the

remarks.

broadest

going to

movement

various metals

and

times

New

hours

cost

evil.

this

overcome

molecular

Even today we are conducting
flights
over
instru¬
the supersonic
the mented ranges to accumulate data

what

gets

would

example,

an

a

will

transport
three

2%

to what Mr. Kahn
everything you can

heed

many

airplane

"heat-soaked,"

night.

as

sure

as

sound.

ice, but I would like to urge you
pay

done that is

means

as

E. R. Quesada

Military Serv¬
to

are many,

likewise ob¬
problems that have to
anything

of mach No. 3,

between

spent

life in the

my

There

call

convinced that this super¬

are

range

come
me

we

So these two

isn't

there

be

can

We

tern ents

a

that

day, and

these

that

another convulsion.

the

because

we are

sonic transport.

of

be

and the indus¬

are

stop the development of a super¬
This is as sure as

Commerce.

the IBA

us,

active role in

an

It is

program.

vious

competing
against Air
Members

will be behind

try will be prepared to go through

judging from points are somewhat compatible.
experience that we have had
our
studies, that the govern¬
Many Technical Problems

ment must take

fact

the

staggering program.

very

alloys, whereas

It is obvious to us,
the

MATS,

and

s u r

this

Supersonic Transport Program

his

to

wards

in

your

comments

:

air commerce

is

that

it.

have

the

25

accomplished, and the

supersonic transport is eventually
the product, this is going to result

Securities of the United States
Government and its

The

Agencies

State, Municipal, Revenue and Housing
Securities

FIRST BOSTON

Bonds, Preferred and Common Stocks
of

CORPORATION

Industrial, Public Utility and

Railroad

Corporations
15 Broad St.

Bank Stocks

Casualty, Fire and Life Insurance

Company Stocks

•

NEW YORK 5

Pittsburgh

Boston

San Francisco

•

DIgby 4-1515

Chicago

Philadelphia

Cleveland

Bankers' Acceptances

Securities of the International Bank

Reconstruction and Development

for

rllnderMneUete Q)iAMJnUor-

Canadian Securities

External Dollar Securities

-

Jfmettment

&ea/e#

•

26

The Commercial and Financial Chronicle

(2406)

that pen goes to a drawing board,
and give consideration to the re¬

Civil Aeronautics Board

and that

And, the Aviation Industry
Continued

from

page

25

lem.

Airports, as is well known,
have to be reasonably closely lo¬
cated to dense areas of popula¬
tion, otherwise they will have no
When you are located

customers.

in dense
obvious

areas

that

of population,

the

it is

is some¬
annoyed by the noise that
we create, and with certain justi¬
fications, and there is an accom¬
panying technical point with su¬
personic flight, and that is you
have
to
have
a
great deal of
So, therefore, if you have
great deal of energy, at certain

energy.

percentages energy is going to be
bled off in noise. Noise really is

certain percentage
into noise, and as
increase the energy, you in¬

energy, and a
of energy goes
you

the

crease

It

is

noise.

incumbent

forward

out

to

upon

us

uninhibited

to

do

public, and

with¬

nuisance
doing

regard to the noise
the

are

we

ton-mile

In

terms

things

of

like

something

the

profound.

so

is going

government

all, or a major portion of the
cost, I think it follows that the
government will demand and get
a
predominant role of manage¬
ment, and the predominant role
of development. If it assumes the
pay

the respon¬
can
assist, rather
than assume, in the development
of the transport, with some rea¬

cost, it should
sibility.
If it

assume

sonable return of

some

reasonable

of its money, we should
have
grounds for keeping

heavy hand of government out
of the enterprise.
Personally, I think this is

might have
this

an

with

I

opportunity to dis¬
you

to

that it is necessary to

lengths
which is a

runway

that,

essential, and I hope that

very

cuss

very,

the

extent

Other

significantly

we

know

We

are

also

Matters

we

lower
the

to

lower,
able

are

convinced

in¬

industry.

#

liken

which

most

one

this
of

we

all

to

fa¬

unessential

all

get a healthier service,
healthier company. So
back to the interest

you

get

you

a

competition

that

have

you

this problem
because as
the
requirements
of
thrust
in
supersonic flight go up, you have
the energy for take-off, so, there¬
fore, your ability to take off, al¬
though you are taking off with a
very much heavier airplane, you
can still operate within the limits
to

seems

solve

itself,

I

few

would

other

like

we

very

air freight service.

poor

If

we

eliminate these added

can

costs, and get the costs down, we
would be penetrating other mar¬
kets

that

that

we

large

would

be

so

would have

air

freight

a

this

time.

industry,

-'c,

-

weather

a

Now, I

am

afraid there is

of

philosophy

a

dif¬

between

flag
is

a

what the Aviation Securities Com¬

built to

mittee

Not

chairman

said,

and

my

point. I would an¬
ticipate that the Federal govern¬

own,

on

one

a

put together, there
single airplane that was

become

airplane.
single airplane in the entire

American fleet
scratch

to

a

cargo

was

serve

as

designed from
a

freighter.

There
are
a
lot
of
outside of the B-70 pro¬
airplanes
will spend a large sum of that are being used as freighters,
money in encouraging the devel¬ but none were designed to be that.
opment of a supersonic transport. We are convinced, and our studies
If and when it does, it is my opin¬ prove that if we could sit down
ion that the government should and design an airplane, and start
get back in some way or another, from scratch, from the first day




a

not

the

C.

A.

B.

is

these

and

pressures

and

It/
at

the I. L.

that

point
of

Hazard

of

most

they

do

is

the

you

the

pressure,

All
the

into

and,

runway

moment

on,

from vision.

Of

but considering

US.

We

If

British,

It

too

amounts

of

the

to

If

so,

the

you

cost

many

lost

bil¬

revenue

senger.
you

passenger

*

.

the

could

to, the

therefore,

As

in

reduce

can

airlines,

duce

many,

airlines.

you

the

to

dollars

cost

then

to
re¬

trol

the

you

the

get

cost

more

to

future

have

the
not

blind

airplane landed without any ten¬
dency on my part to remove my
whatsoever

to

of

and

my

lap

take

I had no urge
my hands off

grab the wheel.
system was even

the British

which I have also flown.
investment bankers, this
should be an encouragement to
So,

as

you.

am

very

very

cy/m/

pational

and

Com¬

hope that the regula¬

anr/

I

of

for.

am

"Grubby

sometimes

a

^

an

thg time; being.

Side" of Regulation

referring to the duty of
The regulating of a
industry has a grubby side.

am

First, I

am

sure

you

will under¬

regulated is always
attempting to become the regula¬
tor. This is not unexpected. They
apply the pressure to the regula¬

tor, and they would like the regu¬
to become the regulated.

lator

Well,

resist this, and

we

continue to be
future
have

as

just

successful in the

as

have in the past.

we

refused

to

the
regulated to become the regulator,

and this attracts unfavorable

ment, if I
form.

/

have

:•

differences, if I
with the Pilots Union.
our

We

penalize

them,

•

-

some

They
of

i

1

least,
high
do that.

squawk, or,
squawk

at

them

when

heaven

i.

■

to

just

we

.

,;<Y/..^

/

•

of

•

'

■

■

.•

.

■/'

;

State, Municipal and Revenue Obligations

Members

-

v

One William

BROTHERS

Street, New York 4, N. Y.

New York Stock

American Stock

and

sometimes they are severe penal¬

Utility, Industrial and Railroad Securities

,

com¬

put it in the mild¬

may

Established 1838

■

We

permit

Underwriters and Distributors

Public

we re¬

sist it very strongly, and we will
continue to, and I hope we will

Drexel & Co.
'

occu¬

bureaucrat,

stand that the

t'

-

very,

and

hazard

which I

ties.

mittee

are

troversy, and this is just

lines.

Securities

are

tasks

are

they are some¬
times accompanied by great con¬

particularly,
from
overcompetition, and I share the view
Aviation

They

going

am

have
our, differences
from
are, We
time to time with the various air¬

as

riers,

the

grubby.

unpleasant,

may say so,

aware,

I

Nevertheless,
there
we
perform that

of the plight that is be¬
falling the airlines, the trunk car¬

of

it

that

We

others,

r

along,
terribly.

comes

miss

to

C. A. B. and Over-

Competition

Now, I

21

Jan.

est
The

think

investment bank¬

to it, and rightly so. It
couldn't be more fun. It is
exciting, and interesting and a
very
pleasant
duty,
and
when

vast

I have flown it
myself, and I have flown out of it.
I might just add on the first oc¬
casion when I flew it—and pilots

lap.

I

romance.

an

regulating.

system.

hands from my

of

refers

er

the

people

con¬

just

/

a

deal

great

are not very inclined to trust any¬
thing other than themselves—the

.

reduce

distant

landing

traffic

systems, and the development
a
supersonic transport has a

that is what

pas¬

passengers,

it, affects

v'/.\/,/./•

co-operating with
and we will, in the

are

semi-automatic

and

of

on,/or

could eliminate

we

■

only the economic
factor, the effect is astronomical.
lions

that

is the second subject to
referred, and that is one
that is unpleasant.
The develop¬
ment of a blind landing" system,

two

garding the factor of convenience

route

every

I

which

from
the pilot must make his
and roll out from sight,

the landing,

is

get

of

that

then

passes
you

'

this

and

S., the G. C. I., but they

not blind landing systems.

are

threshold,

.'-V.

that

t-

.

better,

-

serve

granted was applied for.
But, nevertheless, it is incum¬
have, in response to this program, bent upon the C. A. B., as it is
and in response to this need—we. upon myself, in my area of re¬
are going to have a blind landing
sponsibility, to resist pressure. system.
3
•
'
/■'
Now, we get to the

And

LEHMAN

B.,
has

route to a company
apply for it. So if

was

of non-service.

between

ment,

gram,

did

remember

flights.

am

at¬

carriers

not

is that

given

resist

—

ference

when

A.

system

r

confident that in the not
too distant future we are going to
41

from

Weather

landing

Now, there has been a lot of
significant, glib and casual and uninformed
talk about a blind landing system,
very, very

hence the public would support
I won't pursue this any longer

Another

on

are

that

there

designed to give us an all-

cancellation of

attention

comment

of

over-competition, it is in
amount to something like 60 mil¬ response
to applications "of the
lion dollars a year—which, inci¬ very people w;.o are now com¬
dentally, is not a small item—-we plaining about it. But, neverthe¬
have seen fit to embark on a pro-1 less, it is the duty of C. A. B. to

the aviation industry.
Every sin¬
gle cargo airplane that is in serv¬
ice today is, in effect, a modified
bus, and this is why we have a

cost

to

yourselves

that the public. So this is a doublewould eliminate; fen all practical edged
sword that we must be
built around a modified bus. That purposes, these costly factors to mindful of, and when we are crit¬
which
I
ical
of
the
C. A. B. we must also
have
just referred: The
is exactly what 'we have got in

Affecting

things that

and

that

When service the necessity of pilot-sight, and
cities, say Los An-' permit the aircraft to come into
the threshold, go onto the run¬
geles and New York, is inter¬
tempting to do that will have an
rupted by weather it is a very, way, and terminate his roll by
effect on the industry that IB A
the application of techniques that
very costly thing to the airlines,
members are obviously interest¬
and inconvenience to the public. are available to us, we can elimi¬
ed in.
We have made studies that are/ nate this one costly item, which
We are developing an all-cargo I
I assure you is plaguing the ' in¬
think, and hope, very, very ac¬
airplane, and I am glad that ref¬ curate. We have gone back over dustry: The inability to get down
and the limitations of our exist¬ erence to it is made in the Report history, and in minute detail tried on the runway when the visibility
.of the Aviation Securities Com¬ to
is zero. We are co-operating with
determine how many
ing large air terminals.
flights
mittee.
the British in this, and I might
were cancelled because of weath¬
Government Entitled to
Now, it might interest you to er; then translate this back into say that the British are ahead of
us
Remuneration
know
that in all- the American an
they are quite a bit ahead
economic
factor, and disre¬
tremendous expense,

are

in

reduce

critical of the C.

you

never

to

unnecessary
specific groups.
thing that you

one

remind

must

investment

as

bankers.

able

and

over

is

There

this dates

gram

change Mr.

Industry

be

area

the

with, namely the trucking
industry.
We wouldn't have
a
trucking industry today if it were

miliar

will

this

Now, with this background, and

that

are

healthier tory body that is responsible

haying measured with reasonable
accuracy, the cost of service fail¬
ures
cue
to
weather,
which

situation

us

a

do.

•

,

would

get

you

As

and

to

would then be creating a very fast
and new industry: The air cargo

The

Aviation

materially

available

dustry;

portion
then

rate
now

this

I

to

is

Kahn's mind.

something about this.
and

If

the

something about this.
We just
cannot
permit
the industry - to
move

of

ment

public

what

a

royalty, some percent¬
age of the money that they ad¬
vanced to develop the airplane.
The
objective is
to
avoid the
heavy hand of government taking
over and controlling the develop¬
a

as

air freighter,
would develop
could provide a

we

and

Thursday, December 15, 1960

.

service.

an

alone,

airplane that

an

than

such

of

quirements

flying,

.

.

Exchange

Exchange (Assoc.)

'

Philadelphia-Baltimore Stock Exchange
Philadelphia 1

New

1500 Walnut St.

45 Wall Street

York 5

Volume 192

That

the

was

Number 6012

.

,

The Commercial and Financial Chronicle

.

(2407), 27

when

case

we just
ing the dynamic load from it to fins on the wing. We made the
Other Tests
t"
*
•
put weather radar in a degree that the probability of .wings vibrate and
shake, and do
Another .part of-this wind-scale
ri£4helr airplanes. They didn't that kind pf
catastrophic accident all the other things that wings
model program was tch employ a
like this; it was costly; we know occurring
again
is
practically are inclined to do. And as a re¬
technique that is highly devel¬
it is costly.
We hope we have eliminated, as much as you can sult of all this, we
got a very
oped, particularly on the part of
done it
fairly, and given them eliminate such a possibility.
accurate
measurement
of
every
the N. A. S., A., the National Aero¬
And we know this.
adequate time to install this ex¬
We could movement that takes place within
pensive equipment.
But, never¬ have retreated to a position of the airplane under every conceiv¬ nautics and Space Agency, and
that is model-testing.
It is pos¬
theless, the pressure is there.
grounding - the
airplane.
This able condition that we could re-r
sible arid, very productive to take
Here in Florida I do not think would .have been the safest
thing produce.
scale models
and ptit
them in
there is anybody vrho is not aware to have done, the safest to
my¬
The second program was to take
tunnels, .and create for yourself
of the complexities and troubles self. Nobody could have criticized
a
full-scale model and subject it the
varying conditions, that you
we
have
had with the Airline me at all. We have been subjected
to wind-tunnel tests. Now, windcan
imagine. And then you can
Pilots
Union.
They have their to a great, deal of criticism from tunnel tests are
very, very reveal-*
change them rapidly, and you can
views.
They are, by definition, a few for not having grounded it.
ing in a full-scale model, because just* create one' condition after
objective.
Their
views
are
to
Now, grounding this airplane, you can create and measure ac¬
another,
and
measure
it,
and
serve the members of the
union, as I have said before, would have curately any condition you want,
record it with great accuracy.;
of which there are approximately been the easiest thing for us to
and
then
you
can
fail certain
This was a very, very extensive
17,000.
Our views are to serve have done, and I would then have parts, fault them, we call it, and
the objectives of the flying pub¬ been defending myself in every
then measure and determine what program.
lic, of which-there are something eventuality.
the results of the conditions that

made them

Now,

f

part

'like
of

65

in

are

one

I

million.
And when they
conflict, I can assure you
thing: We are going to

this

is

a

hazard

that

the

we

from

ing

the
we

have

reasonable force.
do

these

for

the

in

manner

done

But

we

Let

it

us

it

which

squawked, I must

that

sume

suppose

it

we

were

sure^-as

sure

,

And of this
,as

but

this under certain conditions that
I will refer to, and this, in turn,

drives the wing and
oscillate
back
and

it ,,to
forth,
and
The third part of this program, eventually fly off. When I say
was
the reassessment of all the "eventually" I mean in about t\vo
Two
seconds,
.under
theoretical data
that
went
into second^
this

-Continued

design.

causes

on

never at any time any
implication or influence
very difficult decision—

let

translate

us

economic

it

now

into

implications.
To have
it would have been a

tremendous economic

and

very

penalty to a
large industry. There

airplane, but I repeat again, this
has
nothing to do with it.
It

It

years.

dollars

over

was

not

would

*

hundred

several

are

already

have

millions

invested

been

a

in

of

this

tremendous

penalty.
'

The""Electra"
<

As

Story

,

accidents that

the three

were

not

involved in the catastrophic fail¬
ure of the wing,
let me describe
them

quickly; two of them were
pilot errors, and have been
One just hit a dike

clear

described.

so

that

was

as

clear

to him

as

that

right in the room is to me.
The" other just landed about a
camera

thousand
way,

ed

feet

short

of

the

run¬

and when he did so he land¬

in

the

water.

The

third

one

I suppose you might say, an
act of God, in which the airplane,

was,

at

a

very

But, likewise, had it been right

.

kridWj'-the Electra had
two > catastrophic v accidents
in
which it shed a wing. It has been
a
party to three other accidents,
two of which were catastrophic
because
the
casualty rate was
high; and the other one, there
were no casualties, which was ex¬
tremely good fortune.
Setting aside for the moment
you

to

have

to

have

grounded it and wrong
permitted it to fly, and
proven this to be the
case,
this would have been an
economic penalty also. The dam¬
age to the industry would have
been terrific; the loss of public

confidence would have been very

damaging to all who are in one
or another', remote or direct,
interested in the air transporta¬

way

tion industry.-

large number of birds into the
engine which caused one to fail
certainly, and the others possibly
to have intermittently failed, and
created a condition in which the

airplane was probably incapable
of flight.
There is every indica¬
tion that the airplane was noncontrollable. This was the third

■:

So

again, the question I am at¬
tempting to establish is that the
duties of a bureaucrat, which I
am

and

temporarily, are often trying,
the necessity of being fair,

and doing what you think to be
right is great, because you can be
harmful in whatever you doi—-you
can
be extremely1 harmful. We
could have been harmful on either

of

side

coin.

Electra

the

Lockheed's

critical moment, flew

through a flock of starlings that
may have numbered between 10
and 20,000, and injected a very

had

facts

What have

we

Co-operation
done to

see

that

the

public interests are served?
Obviously we cannot leave this
airplane with its present limita¬
tion. We have required the Lock¬
heed company to engage in a 3-

pronged

program,
which
most willingly,

done

have

done

have

with

great

a

Head Office of The Chase Manhattan Bonk

they

and
deal, of

skill.
first

The

part of this program
an existing, and one
of the early Electras and put it
Now, we will set them aside, through a flight test program with
and confine ourselves now to the the aircraft highly instrumented,
two
catastrophic
accidents .in with the most sophisticated in¬
which a wing was lost. One can't strumentation that we could put
be unmindful of such an event. together.
The
various
aircraft
On the first occasion, I will tell companies
participated in this.
was

to

STATE, COUNTY, MUNICIPAL BONDS AND NOTES

take

accident.

frankly, we had no idea
what caused it.
On the second
occasion, which followed not too
long after the first, it was clear
that they were similar. Likewise,
it must be clear to others, as it
was to be,I that if they were simi¬
lar, we had to do something,
you very

U.

100 knots.

do

not

we

We

would

take

it

up




NOTES

BONDS

GOVERNMENT INSURED

MERCHANT

MARINE

INTERNATIONAL

AND

BANK

FEDERAL

FOR

BONDS

RECONSTRUCTION

DEVELOPMENT (world bank)
FEDERAL

company

AND

AUTHORITY

possess,

The Lockheed

NATIONAL

FEDERAL

LAND

INTERMEDIATE

FEDERAL

BANKS

HOME

FOR

BANKS

MORTGAGE

ASSOCIATION

CREDIT

LOAN

BANKS

BANKS

COOPERATIVES

into the

did not know what Sierra Nevadas, where there is a
great deal of turmoil in the at¬
was wrong with that airplane at
the time,
I will tell you very mosphere, and do the fastest high
frankly, but we did know, and speed air passes across the high
mountains. We .subjected the air¬
with assurance, that,if you would
take'the trip; hundred.knots off plane to the. severest of dynamic
the airplane: you are thehs r ejtno v* •loads by the manipulation! of. the
Now,

S.

BONDS

VALLEY

They all helped each other. The
N. A. S. A., which has skills which
we

HOUSING AGENCY

TENNESSEE

also assisted.
took this
airplane, that was highly instru¬
mented, and put fins out on the
wing that would make the air¬
plane shake at will, and subjected
it to a flight test program, the
forthwith, and we did.
What we did was to reduce the severity of which has never, never
been approached,
operating speed of the aircraft by
about

PUBLIC

.

THE CHASE MANHATTAN BANK
Chartered 1799

v.

!

can

could occur, to! which 1 have re¬
ferred, which we call a "whirlmode," which starts the engine
cell rotating in a manner such as

was

this

on

you

be in the framework of the pres¬
ent state of the art.
It
seems
that
this
condition

implications—

the most difficult task I had

easy

pro¬

mounted.

was

are

but one, and
in which tne

influenced

never

economic

any

very,

an

"very expensive

we

causes

manner

been

describe, without too much detail,
why we did what we did. I will
say before I start that this was

three
task.

a

engine

the

economic

I have been
this

have

though
by

grounded

past

was

and very revealing.

was

turn this coin over.
I had not grounded

should

thing, too. So I am not
right yet. I know it. Al¬

Electra into service.

the

gram

matter of

a

proven

there

on

us

when

itself; and this is one of our
grubby tasks.
Now, one of our grubby tasks
was
during the complexities that
accompanied the injection of the
comment

As

have created are,

This

eliminated all
that

the wrong

with

have to

things. We have to do
public what it can't do

to

we

causes

grounded. This would have been

as¬

for

asked

the

is

result of this three-

thing.

wrong

Now, let

must endure, and I hope we do it
with reasonable grace, and judg¬

they have

this

a

fact, I think it would have been

they do not like it.
But

that

sure

with such power.

the public, and we do, and

serve

not

am

right thing for a person such as
myself to do, one who is vested

as

program,,

we
were
able i to
eventually eliminate all probable
for this
phenomenon to
have
occurred,
and
eventually

all

Head Office: New York 15

*

Mefyber Federal DepositInsurance Corporation

t;*

'
:

v

I

page

28

28

Chronicle

The Commercial and Financial

(2408)

v

Thursday, December ,15; I860

.

.

.

Civil Aeronautics Board
ADAMS,

And the Aviation Industry

WILLIAM M.*

Brauh,

Bosworth

Interstate

Conclusion

Continued from page 27

conditions,
is
a
very
long time to us, because in the

Now, I will conclude by saying
that the Lockheed company has

been

started a very, very ex¬
tensive production line of modify¬

conditions

which

to

I

have

and

hundredth.

second

a

didn't

is

It

service.

I

So

be/humorous

to

mean

ing all the airplanes

So

This

we

is

were

long to us.
able

The

pro¬

flying, if there
within

the

was

-

of the structure had to have failed

more

before this

first

ted

condition

was

permit¬

start.

to

we

what

Then

do

do?

we

three

than

that

three

have

now,

put

we

subjected to

a

create

never

ALLEN,

So,

with

this

satisfied

background

that

and

we

rather

than

we

M.

until

all

of

these

faults

ALLYN,

return

Dow

Anderson

Carolina

York

New

Securities

Hayden,

Richmond

Raleigh

Coe, Washington

APPLEGATE,

BERGQUISTI,

LOWRIE*

A.

First

Hulme, Applegate & Humphrey, Pittsburgh
ARMSTRONG,

through,

New

York

■•..New

York

to 324

Arnold

C.

Jr.,

&

&

Miami Beach

& Co.,

Lazard

Cruttenden,

BABICH,

1960.

Hill
I

W.

B.*

Richards

Los

Co.,

Angeles

BACON, Jr., WILLIAM T.
BAIR.D, ANDREW M.
A.

Becker

G.

BAKER,

BLOCK,

Chicago

Co.,

&

PHILIP D.*

Van

Rowles, Winston & Co., Houston

BALDWIN,

ROBERT

BANKER,
C.

J.

HOWARD

Devine

BANNARD,
American
New

&

H.*

Securities

Corporation,

York

Do

you

own

large block of stocks

a

(market value

Irving

BARNES,

$15,000

more) in which

or

have

you

unrealized

an

BARNARD,

can now

plan to exchange this stock

&

BARRINGTON,

Co.,

York

Eastman
New

& Co., New

The

York

Ohio

without payment
for shares in

one

Mr. and

First

Mrs.

of several investment companies which

•

"

.

-1

'

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'

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.

t*

have

-

v.

-'

.

^

.

type.

»

Co.,

&

V.
*

Columbus

San

& Sun,

JOHN F.
Co., Philadelphia

&

Nicolaus &

Stilel,

St. Louis

Co.,

NORMAN

BURDEN,

E.

,

Cleveland

Hayden, Miller & Co.,

Continued

Antonio

..

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Eastman Dillon, Union Securities & Co.

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Los Angeles 5,

135 So. LaSalle St.

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3115 Wilshire Blvd.

Cal.

Philadelphia 7, Pa.
Cleveland 14, Ohio

•

Exchange

Leading Exchanges
";

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Boston 9, Mass.

536 Union Commerce




Bldg.

Baltimore &
22

Light Sts.

Batterymarch St.

Wm. F. Jennings

Franklin M. Coryell

•

415 Laurel Street
.

John W. Mackey
•

Robert M. Evans

•

Ellis M. Woodward

•
•

James F. Cleary

HA 5-6200

*

Grimm

Willis L. Roberts

•

Philadelphia Nat. Bank Bldg.

San Diego 12, Cal.
Baltimore 2, Md.

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Paul F. Kendrick

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For complete information

inquiries will be treated in strict confidence.

'

..

4

below. All

■

•

;

-v...

'

•'

.

^:

-

>.

without obligation, write our nearest office

New York 21, N. Y.

York

New

Telegram

BUNN, JOHN W.

.

\.U:

-

/

^

\

this

Bioren

Securities

Corporation,

»*.

~

transactions, of

York

World

J.*

..

V

/

special service department to handle

a

•

v..

r*

We

New

BUNN, Jr.,

*■

.

,

porfolios of securities under continuous

professional management.

York

.

i

'•

Company,

New

of capital gains tax

V-

hold diversified

New York

'

Texas

of

C.

Company,

BUNCE, HAROLD

T>

EWING

Trust

Bankers

York

BOLES,

S.

BOLTON, FRED
♦Denotes

Philadelphia

Union

Dillon,

Ltd., New York

Bullock,

BULLOCK, WILLIAM

BOGERT, Jr., LAWRENCE H.*

York

New

CHARLES

Harry Downs

D.*

Watling, Lerchen & Co., New York
New

Jr., HAROLD ,D.

Witter

Dean

capital gain? You

York

New

Hammill & Co.,

HUGH*

BULLOCK,
Calvin

Hayden, Stone & 'Co.,
BOGARDUS, ALLAN B.

WENDELL B.

Shearson,

Association,

RICHARD

BOESEL,

ROBERT W.
Trust Company,

BARKER,

RICHARD A.*
& Burr, Boston

Coffin

HENRY

Boenning & Co.,

'

York

Whipple & Co., Chicago

Bacon,

BUCK,

W.

Bankers

Jr.,

*

Reynolds & Co., New
ANDREW D.

Washington
BOENNING,

.

BUCIIAN,

Cleveland

ERWIN

Investment

Co., Cincinnati

WILLIAM N.*

JOHN F.

BRYAN,

ROBERT B.

BOEHMLER,

San Francisco,

America,

,

Bank,
■/;/■ •'///'•// //X

National City Bank,

!•>.•

Chicago

K.*

ALAN

of

BRYAN, JOHN E.
V
Cleveland Plain Healdi?, Cleveland

National

Noel & Co., New York

Alstyne,

BLYTH,

H. B.

Morgan Stanley & Co., New York

Tax-Free Exchanges

V

York

New

Co.,

& Hutzler,

Bros.

BROWNE,
tank

New York
/
Pittsburgh

HARRY

Salomon

E.*

Southern

&

&

Witter

Dean

BROWN,

ANDREW

BLUM,

H.*

R.

Boston

New York

Atlanta

White, Weld & Co., New York
BAKER,

Company,
BROWN, CARL C.

& Co., St. Louis

FRANK

Citizens

Co.,

&

BRUCE

A.

Wellington

ROBERT M.*

Blewer, Glynn

Dickson

S.

R.

BROWER,

CLARENCE F.

BLEWER,

Whipple & Co., Chicago

Bacon,

York

New

Co.,

Trust Company,

BROPHY, FRANK J.

Battles, Philadelphia

&

Hutton

E.

■

Hartford

Co.,

ROBERT E.*

Morgan Guaranty
New York

\r

R.*

Co.,

Barron's Weekly,

&

BROOME,

S.*

Dulles &

BLEIBERG,

&

&

Angeles

Los

Chicago

York

BROOKS, JOHN II.
,

BLEAKIE, JOHN M.

Podesta & Co., Denver

LEO

Freres

SYDNEY

Janney,

AYERS, ROSCOE B.*

Convention, Hollywood, Fla.,

Buffalo

Boston

Hurry,

&

Bank,

WILSON A.
<
Ltd., New

Putnam

Jr., EUGENE

BLAKE,

York

New

Co.,

Walter

Bingham,

HIRAM F.
& Savings

BRITTEN,

Company,

>

.

•.'•v ' ■' *

♦

Calvin Bullock,

Exchange,
CURTIS H. ¬

BINGHAM,

LOUIS

Shields

Trust

*:• ;

Trust

Harris

Stock

BLACK,

York

BRIGHT,

HARRY W.*

Boston

Charlotte

Co.,

New

HOMER R.

Marine

The

BESSE,

WM.

Allyn

AUER,

;

Orleans

New

\

Webber, Jackson & Curtis,

Paifie,

,

Francisco

San

Co.,

&

Co., New York

Forgan &

Glore,

National Bank, Chicago

BERRYMAN,

MURREY*

Dickson

S.

Corporation,

ALDEN*

P.

HUNTER*

DONALD

BRICK, JOHN*

Detroit

& Co.,

JOHN D.

Sutro

:•'/' ■'.

'

BERL,

H.

WILSON*
Derbes,

ATKINS, J.
R.

GEORGE

Hanseatic

H.
&

Bennett

Manley,

B.

Atlanta

McCourtney-Lreckenridge &Co., St. Louis
BREEN,

ROBERT A.*

BENTON, Jr.,

York

New

DONALD

BRECKENRIDGE,

& Co., New York

Whipple & Co., Chicago

Bacon,

New York

York

New

Co.,

New York

Co.,

Co.,

&

Lord, Abbett & Co.,

GORDON

BENT,

L.*

McDonnell

S.

Shores

W.

C.

FRED

BRAYSHAW,

Stone &

Miami

Houston

ROBERT A. W.

BRAUNS,

A/';

'

^

C.
York

New

Co.,

Jr.,

Moseley &

S.

F.

Aiuoxno

deB.

Philadelphia

Benne/t

Cutter,

Inc.,

San

Co.,

BENNETT, FRANK

HERBERT R.

&

Co.,
&

GRAHAM

BELL,

J

Corporation,

Group,

&

GEORGE

BELL,

York

.■—/:■/.

JOHN

Co.,

&

DANIELS

&

Evans

BRAUN,

A.*

WILLIAM

Jr.,

New

Nashville

Co.,

McKinnon,

&

Hutton

BRASTFD,

FREDERIC C.*

Co.,

C.

&

EUGENE P.

F.

E.

York

New

Hough, St: Petersburg

Drexel

Strudwick,

THOMAS

Mackall

Russ

York

New

GLENN E.*

Distributors

ANGLIN,

ATWILL,

1,

&

ANDERSON,

Bankers Association of America,

December

Co.,

&

BEINHORN,

A.

GEORGE W.

ANDERSON,

A.

49th Annual

&

Eeil

Inc.,

Brothers,

&

JAMES

BRANDENBERGER,

S.

•

,

Thomson

York

Bank/ New

;

r

S. WHITNEY
Howard, Boston

&

Eaton

BRADY,

Manhattan

York

Co.,

BRADLEY,

,

'

Chase

BEIL, Jr.,

*

s*

Sales,

ALBERT

Jones

The

New

GEORGE C.
New York

&

Evans

f

Association,

BEHRENS, BERTRAM

Savings Bank, New York

&

E.DWARD

ANDERSON,

•Transcript of an extemporaneous ad¬
dress
by Gen. Quesada before the In¬

eliminated.

&

Jr.,

Bradford

C.

BRADLEY,

M.

X'/./ /•■;„:' :'o BEEBE, JOHN E.

■/;,
San Antonio

Lehman

Street

William

ANASTASIA,

test even

up,

: /

v.

;

E.*«

Co.,

ELWOOD. D,*

BRADFORD,
J.

Washington

-

>

Bank.

THOMAS
Ladenburg, Thalmann

C.*

Bankers

B.

BOYNTON,

& Co., Detroit

EUGENE

York

for

D.'Eoynton & Co., New York

E.

' ' * '

' '

,

Montreal

Co.,

Lerchen

Watling,

V

&

CHARLES

Investment

W.

Trust

AMAZEEN,

the
through

speed

York

New

'' '

ANDREW S.

Beaubien

G.

L.

BECHTEL,

,

i

BOYNTON,

N.*1 " *

New

Bank

BOYCE, J. RAYMOND*
< Auchincloss, Parker & Redpath, New York

Rhoades & Co., New York

Loeb,

BECKER,

Detroit
&

M.

BEAUBIEN,

A.

C.

MILTON

JOHN

Harris

but

they stand

the

J.

Sons, Winnipeg

A. C. Allyn & Co., Chicago
ALTGELT, Jr., E. J.*

be served.

vestment

are

when

and

will

Carl

MONROE

Allison

E.

&

Marache & Co.,
F.

Blyth & Co.,

knots, and I hope the public will

324, is the safest air¬

plane in service from the point of
view of structure, and the air¬
plane will not go back into serv¬
ice

if

airplanes

NORMAN
GUSTAVE

ALONZO

ARNOLD,

the

airplane,
at the reduced speed of 225 knots

were

three

■.//.- /

■

Manhattan

Chase

The

Co., New York

&

RICHARD

FRANCIS

BOWMAN,

CHARLES M.

Jr.,

Baxter

BEATY,

Wheeler & Alleman, Orlando

ALLISON,

the whirl-

these

BAXTER,

.

>

,

'X/: / '//

*

F.

•

.

York

New

Rico,

Puerto

:

.

Company, Milwaukee

Milwaukee

FRANCIS*
'
■
Development

Government

New York

Co.,

&

Boston Corporation,

First

The

BOWEN,

EARL K.

Hutton

E.

The

Boston

,

Co., Nashville

&

Bass

BAUMANN, JOHN

/

'

.

Granbery,

We

mode.

//

York

New

HENRY C.*

Richardson

Leedy,

by

could

York

ALLEMAN,

.

we

New

James

more severe than the one to which
the
application of
I have previously referred.
computer techniques, a combina¬
I never knew of any flight test
tion of every failure, every fault¬
ed
part
that we could create program that was as severe in its
within
the
structure; and when character as the flight test pro¬
we did that, at the reduced speed,
gram
that we are now putting

created,

Inc.,

D.

M.

.

W.

Anthony & R. L. Day, New York
BOURNE, Jr., G. H.

New York

Co.,

BASSETT,
W.

Corporation,

ALEXISSON,

line,

production

this

Parker

ALEXANDER,

airplanes

three

have

We

through

Jack

Leach/Birmingham

Group,

&

ERNEST

Tucker,

BASS, Jr., JACK M.

Morgan Guaranty Trust Company, •<- '*/
.

this

failed part
Some part

a

structure.

Savannah

Co.,
~

GEORGE

ALEXANDER,
■

/

focus

to

&

„

&

Distributors

possibility of the whirl-mode ever
occurring again. It is a fantasti¬
down
and
determine,
with
as cally complex retropath program.
much accuracy as the state of the The wings are for all practical
art will permit, the cause of this purposes rebuilt; the engine cell
condition, and this condition can is a new one, and there are other
There are certain
only occur, even at the higher factors, too.
speeds at which the Electra was modifications in the engine.
onds."

Chisholm

BORKLAND, Jr.,

■'

BARTOW, PHILIP K.
Drexel

Agee

ALDRICH,

It eliminates, as far as the
state of the art will permit, the

glib when I referred to "two sec¬

^

.

;

.

RUCKERi

Sterne,

that are in

extensive

an

Corporation,

.

; ;

Witter & Co., Portland

Dean

Barrow,' Leary : & Co;, Shreveport
S. L. '
V/.,"
J. R. Williston & Beane, New York

BARTELS,

AHBE, .JOHN L.

gram.

or

.

WILLIAM

BOONE,

RUSSELL*

WM.

BARROW,

,

<

LEE

Varnedoe,
A GEE,

already

referring, we measure what takes
place in a hundredth of a second,

,

*,

V

Detroit

Co.,

S.*

Securities

Charlotte

.

ADLER,

these-

&

ABERNETHY, Jr., R.

Broadway, N. Y. 4, N. Y.

•'

100

Volume

192

Number 6012

.

.

The

,

Commercial and Financial Chronicle

(2409)

Central Bank made
of

a

speech—one

series, all of which have re¬
wide publicity in Canada

a

ceived

In Canadian-U. S. Relations

—in which

back

N.

D. Young,* Vice-President, Dominion Securities
Limited; Chairman of Canadian Committee

the growth of
foreign domination in Canada has
gone

Corp.

we

of

process

of the

either

Investment Bankers Association
of America
Canadian

investment banker

are

than

more

ticipation

to

Charging

no

attack
Mr.

upon

Young

a

little

the

of

nefarious

us

plot,

the

over

way

jeopardizes
lack

or

of

Canada's

economic

nomic

independence.

benefit,

Canada's political independence and
refers to parent company practices,

or

cultural

cites

any

identity,

figures

take

it

blind

for

to

granted

-

it;

we

or

we

would, in relation to its own af¬
fairs, have regarded such eco¬

economic par¬

our

long that perhaps

so

become

fail to realize what proportions it
has assumed.
No
other country

candidly explains why his countrymen

concerned

north

for

on

have

on

dependence

as

And

whatever

benefits

have

conferred

in

danger

capital trade and control of industry, and our governmental policies
which are regarded
eminously by Canadians. Reviewed are some of

of modern
and for the

people of Canada."

that
even

y

parade

for Canada

he said:
The

"The

the

in

progress

now

exists

produce stagnation

the

desirable.
it

past,

that, it
and

a

—as

may

falling

.

.

no

one

most

on

enjoys

likable

of

to

say

having
guests

in such num¬
bers as to swamp the family, as¬
sume
charge of the household,
take a lion's share of the income,
and
remain indefinitely, decade
after
In

probability of controls
on foreign partici¬
pation. in the Canadian economy.
Any
such
controls
would,
of
course, have to emanate from the
government of Canada.
over

decade."

addition,

the

being imposed

in certain fields of corporate

enterprise—come

may

the

went

Governor

the

al

that

feel

We

position is a unique one (I
explain this unique position
on) and if the Canadian

will

further

takes

government

he

feels

that

the

present degree of foreign owner*

is undesirable on non-eco¬
nomic grounds. These views have
naturally
prompted
speculation
ship

deficit
strued

should

this
or

of what I consider

deterioration

cided to

S.

relations, I have de¬

obser¬

vations

which

I

be

Ca-

this occasion to make

use

certain

will,

to

of

small

way

to

American.

for

is

the

would

N.

D.

Young

essential

in

of

be

now.

great

mutual

ad¬

it

is

to

speak—the privilege of wisdom

of

is

us

ruined

of

province
The

listen.

that

knowledge

trouble

we

with

most

would

rather be

than

saved., by

praise

by

have

American
derful

spoken
about

hosts

3,000 miles

border.

For

Americans
Canadian

hosts

to
our

won¬

of undefended
years visiting

many

have

Ca¬
their

spoken

their

to

about the

bound¬

less friendship which features re¬
lations between the two countries.

speeches have always left a
warm glow of self-satisfaction in
wake.

Unfortunately self - satisfaction
frequently leads to self-deception,
and
in

I

the

fear

that

area

of

countries.

our

"undefended
much

From
been

for

my

forced

many

has

it

a

done

relations
The

has

of

than

years

conclude

has

now

it reveals.

observations
to

the

become

cliche which

more

so

between

theme

border"

something of
hides

J#!*

the

at

of

ap¬

students.

I

the

drive,
which

have

I

that

not

there been

a

which

over

was

of

had

40

an

been

and

years

1,000

of

one

called

subsidiary

plant

Canada for

the

over

Canadian

people

company

was

sym¬

State,

pathetic to the financial require¬
ments of
theless
to

had

the

university he

our

to

Head

Head

refer

Office

supported the
not

this

the

not

the

American

S.

municipal and revenue

company

drives

to

bonds

con¬

of

needs

of

could

and

clear

universities.

is

U.

back that

financial

way

never¬

request

the

the

of

towards

nadian

in

universities

their

see

tribute

the

came

Office

American

Ca¬

Fortunately

attitude

subsidiaries

of

all

in

our

country, it is nevertheless not at
all

uncommon.

I

would

like

to

further

illus¬

This

has

firm

long been active in the

trate my point with another spe¬
cific and recent example.
One

dential
of

our

tions,

week

prior to

election

Presi¬

your

reporter of one
national financial publica¬

put

the

of

this

question

candidates,

relations

House?"

both

to

"What

in

once

There

the

was

no

Just

we

are

State, Municipal and Public Revenue

White

Bonds. We have also served

as

advisors

to

answer

either. Finally one of them
remarked, "I wouldn't know what
say,

of

would

from

to

underwriting and distribution of issues

a

do to improve Canadian-U. S.

you

wider

gulf between the views of
prominent Americans and Cana¬

and
I

in¬
cluding graduate engineers, chem¬
ists, etc. While the President of

Such

their

which

16,000

on

employed

the

visiting

years

many

nadians

in

the

of

program for one

Finally the reply

criticism.
For

aspect

enrollment

Canadian

American

vantage were we to recognize that

to

of

and

the

one

an

firms

a

During these troublesome times
it

an

illustrates

(

had

section

and
be,

serious
action

sur¬

I cite

became involved in the industrial

to be

thought

terms

may

may

which

proximately

prob¬

can

you

universities

our

time

If

us.

they

conclusion

of

expansion

an

of

con¬

resolved,

this

some

Two or three years ago we un¬
dertook to raise 25 million dollars

problems

are

at

Some Concrete Examples

f

o

these

exists

a

standing

lems

of

sthte

relations,

which

one

situation.

deeper under¬

front

the

state

and

city officials, in initiating public

friends."

several

weeks

before

conversation, the Governor of

that

projects, financed through the issuance of

our

tax

exempt

securities.

Established 1*150

H.HENTZ&CO.
Members New

York Stock

Exchange and other

leading stock and commodity exchanges

Main

72

WALL

ST., N. Y. C., B0 9-8420

New York

City Branches

Sherry Netherland Hotel (PL 1-2220)

CHICAGO

BOSTON

HOLLYWOOD,

PITTSBURGH

FLA.

MIDLAND, TEX.
BUENOS

Municipal Department

Office

BOCA

DETROIT

RATON

LONDON
AIRES,

& 1430 Broadway (PE 6-9300)

PARIS

SAO

BEVERLY HILLS

CORAL

GABLES

GENEVA

PAULO,

HONG

MIAMI

ODESSA,

Company

Established 1922

AMSTERDAM
KONG

Corporate Securities




&

TEX.

Underwriters and Distributors
of

BEACH

qAllen

en¬

NEW YORK 4,

N. Y.

not

be

con¬

as

Continued

-

personal

and

which

the

present.

experience

some

the

than

to

States-Canada

Since

in

broader

relating

United

prise

hope,

contribute

dians

to

being antiSuch action was hint-

regarded

policies harmfully affect Canada.

noticeable

action

Canadian ownership of
industry and to reduce the trade
courage

past warnings by prominent Canadians and clearly indicated is
the need for a prompt and
deeper understanding as to how our

nadian-U.

must
internation¬

Americans

that Canada's

realize

the

Because

29

on

page

30

'■>

»W'r.

<<r

r.iT-1

30

''"f* ■»"«■» jlt

.1

w

'ww

■**•**

The Commercial and Financial Chronicle

(2410)

Some Aspects of the Decline
In Canadian-U. S. Relations

million

her international

sure

position.
at

that

doubt

little

is

There

act to in¬

must

Canada

17.

Nov.

Permit

of

trolled
there

and

con¬

where foreign ownership
virtually complete. Similar con¬
trol
exists
in
mining, smelting
and
petroleum
exploration
and
development. Much of this foreign

United

the

total.

aged

over

all

nies
It

in

all
of

large
country

38%

in

one

Let
not

equal

was

whole

the

of

the

United States gold reserve, and if,

uing

that,

they

after

year?

tion to gross

simi¬

Canadian

had

deficit

annual

hasten

me

a

this

of

Yet

contin¬

in

size

propor¬

national product, the

balance

of

-

Canadian

our

result

growth in the short run.

that I do

bf

__

.

nefarious

powerful

ada

a

America

and

much

on

on

tax

smaller

is

in

i

i»

_

You

i

grettable

■

Stock

'

that
Americans generally
have little
knowledge of Canada's economic
position
vis
a
vis the United
States, or of our history or of our
of

also be

may

well

may

.1

•

u

.

far

a

that Can¬

say

American

Exchange

Stock

Exchange

ada has brought it on herself.

New York

RUSS

BUILDING

San Francisco 4, Calif.

Telephone: WHitehall 3-3300
Teletype: NY

Telephone: GArfield 1-2851

1-1671

Teletype: SF

613

Years—1960

i

I

wish

to

:

that

suggest

_„•

believe

that

have

we

which

benefited

for

some

greatly and in many
from much of your capital,

factories

there.

are

there.

oil

The

The iron

t t

a

v*

i

4-a'm.

of our political proc-

,

therefore

■'

feel

that

your

regard of our position, may have
the harmful effects on Canada of

relationship with the United
I

4-1-*

^

or

the

is

I

have

Pointing

spoken.

example to quotas placed on
of our mineral exports or to
failure

of

S.

U.

some

sub-

being mined. We will undoubtedly

sidiary companies to participate
fully in Canadian public ventures

benefit from that capital in future

and industrial research, some are

well, and when such is not the

inclined to argue that such effects

are

it

will

within

be

ore

area

our

done.

a]rpadv

i

economic

the

United

threat
dence

States

her

to

and

dependence
as

being

felt

in

Canada

*rre already being felt m Canada.
We

must

' nomic

also must express my person-.
al view that I do not yet see Can¬

I

sense

realize that

relationship
of the word

it will not survive

that

hope

have

*A

talk

'

few

my

in

contributed

to such

way

remarks

by Mr. Young before the 49th
of

Convention

Bankers

Association

the

Investment

of America,
wood, Fla., Nov. 30, 1960.

Van
Noel

the

is

our

in

ecoevery

unique, and that

N.

Co.

&

office

at

20

has

J.—Van,
opened

Howe

management

Alstyne,.
a

of

Merrill Lynch Office
CHICAGO,

111. —Merrill Lynch,
Pierce, Fenner & Smith Inc., has
opened
10

a

Chicago branch at

new

South

La

Salle

Street

President

with

Joins Witter Staff
(Special to The Financial Chronicle)

LOS

ANGELES, Calif.—Ivan
has
joined the staff

Reeve

do

borrow

not

the

United

We

borrow

States
it

on

indivi¬

Americans

through

stitutions.

It

and

it

is

getting.
IN

capital.

Hallgarten & Co.
Established 1850

individual

financial

in¬

is not state trading
foreign aid we are
Nor do we need to feel
not

humble about

SPECIALISTS

capital from
Government.

from

It

receiving American

would

not

if

come

a

profitable and competitive rate of
return
I

United

States

Government

see

fact

Securities

it

on

was

not

virtue

no

that

expected.
defect in the

or

sell

carload

of

newsprint to a Canadian
American publisher. Canada's
tional identity will not suffer

na¬

way or

I

am

we*

a

another, in
rather

of

my

a

or

Investment Securities
•t

*

>

New York

i

one

view.

mind

that

in¬

creased

State

trade, profitably devel¬
will increase our economic

oped

and

strength and
ada

Municipal

which

Bonds

will

I

have

and, in
diate

my

48 Wall

CO.

HAnover 2-2727

my

•

Boston

Cleveland




•

•

Philadelphia

Cincinnati
■

Direct

-

•

.

Wires

•

Washington

St. Louis
...

to

all

.

Offices

Pittsburgh

•

San Francisco

•

.

•

t

-

I

endeavors

her

national

you

that

and

nize

our

economic

view,

now

view

your

pose

no

imme¬

Canada's indepen¬

must

that

emphasize
rela¬

such

healthy only if

government

Because
of your

we

have

only onepopulation; because-

with

our

trade

and

because your companies con¬
much of our industry —/ be¬

trol

cause

of

these

you

hard

is

so

large;

realities

any

unthinking

change

ernment or

corporation policy to-

in

Chicago

Scranton

231 S. LaSalle Street '

*'•

205

Wyoming Avenue

recog¬

responsibilities in that
relationship. Again I will be spe¬
your

cific.

44 Wall Street

beneficial to Canada

remain

can

tenth

Chicago

said
are

further

tions

Street, New York 5

those

develop

threat to

dence.

&

will enable Can¬

character and culture.

relations

C. J. DEVINE

so

foster

to

your: gov¬

'

Brussels
66 Boulevard de

E.
of

Dean
Witter &
Co., 632 South
Spring Street. He was formerly
with Lester, Ryons & Co.

dual Americans.

We

Vice

firm?U:j-.

of the

indepen-;
identity as do

trade

under

the direction of John A. Orb,

cept for a few airplanes and mili¬
tary stores, trade with the "United
We

R.

Kern.

My reason for holding this view
simple enough. We do not, ex¬

States."

under

Reuben

political

cultural

branch

Avenue

Canadians.

many

Holly¬

Alstyne, Noel Branch

PASSAIC,

serious

a

small

some

understanding.

an

Annual

policies, policies shaped by honor-;
able men, but in ignorance or dis-

ways

is

1857—103

< j

.

Benefits

Mutual
do

ada's

5, N. Y.

•

_

They

is

STREET

WALL

_

esses.

I

45

'

this,

believe

country

our

-

culture,

responsibility and within our
ability to ensure that no damage

'

...

Each citizen

in its present form.

re¬

a

observation.

true

tariff

of

'

This I believe is

but

the

for

"understand

Countless Canadians in all parts

1

_

has

it

problems

"They will," Mr. Freed¬

said,

part the

Commonwealth

.i

.

case,

'

the

Without

in Can¬

investment

S.

and

man

Foreign ownership of

legislation

ton.

U.

of

caused;

an

and in part because
imposes few restrictions
imports of capital.
Canadian
*'

wells

MEMBERS
York

individual thinking.

helps to raise the level of national
thinking or to pull it down ac-

,

installed and make sure

is

nedy
tent

Canada

as

New

only be the objectification of
thinking of their peoples—
even as individual homes express

economic

that these two understand the ex¬

preference

The

Co.

avoided even at the risk

best

are

your cur-

a

by

business

States.

&

the

could

first time."

Not at all.

close

1857

can

even

economic

Canada has not benefited from its

ESTABLISHED

Protect Herself

happen, not

of some cost in terms of

of

States

Nor

F. S. Smithers

to

in

say

of

perpetrated

payments

-

to

result

the

plot

_

beyond

this

reject the view that our
integration
with
the
U. S. has inherent dangers which

I

regard these developments as

Canada.

current

of

Must

Canada

our

sold

were

country payable in

your

balance-

on

issues

bond

unsuspecting

which

to

year

the

their

deficit

countries.
In the final analysis government

wave,

Were

financing

governments

think

of

it imposes special responsibilities
it of behavior on institutions, indiof viduals and governments in both

rela-

appear

may

Thursday, December 15, 1960

.

cording to the concept of government he entertains. In a represenrency.
■VGV.i,;; In a speech delivered in To- tative democracy, the work of
These figures of .capital trade ronto as recently as last Monday, making and enforcing the laws is
and control
of industry
are reMax Freedman, Washington Cor-, left to others* - nevertheless citigarded
by
many
Canadians as respondent for the
Manchester zens cannot escape the direct reominous. A feeling of disquietude -Guardian, who had accompanied sponsibility of what is done, they
is also prompted by past experiyour
President - elect on eight have at least two duties—to think
ence
which suggests that Canada "campaign trips urged that Can- rightly and act wisely,
cannot stand isolated from even
ada put its views personally to
it is vitally important that the
the minor forces which influence
Mr. Kennedy and his Secretary of
great friendship which exists beyour financial markets and
certhe'Treasury.
He urged that the tween 0ur two countries be based
tainly. cannot
enjoy
prosperity Canadian Prime Minister and his
the future on a deeper underwhen prosperity
is not present Minister of Finance should go to standing of our mutual problems
m
your economy.
Washington soon after Mr. Ken- an(j 0f our individual aspirations.

local

what

a

tidal

a

year.

per

been

ourselves,

If they had

alone

country.

your

.

tively unimportant to you, but
may deluge us with the force

by

of

Canada

wards

$1,455
past five

borrowing from you
large amounts. In 1959 about

in

very

your

Americans

account

year

a

a

to

ask

may

•

of-payments

76% of all for¬

regard

69%

were

ran

with

exports

our

situation?

in

would

States

We

deficit

would

tempting to speculate how

Americans

of

have

United

Canada.

is

United

59%

We

deficits

of

We

Canada, and
from 80% to 90% by value
foreign-controlled compa¬

control

of

own

own

of

to

the

,

States

$18 billion

being

is, in fact, ownership
Americans.
Residents of the
investment

con¬

of

1960, is equivalent
deficit, aver¬
those years, of more

United

a

during that period, amounting to
$793 million—equal to over 50%

ownership

eign

or

their

the

to
for

accounted

the

is

by

exports

our

trade

dustry

United States

outside

exports, and our imports from

our

and
parts of that in¬

many

likewise owned
from

States

non-residents,

by

are

owned

is

foreigners and more
their manufacturing

of

trade, too, is directed domitoward the United States.
the first six
months
of this

year

50% of the Canadian manufactur¬

industry

con¬

or

Our

the reasons for this concern. Over

ing

owned

nantly

of

some

half

valuable

most

country.

Resources

indicate

to

me

by

In

Ownership

Foreign

trolled

trolled

S.

nation.

dependent

resources

industry

economic
participation in Canada for the
survival of Canada as a truly in¬
U.

of

their

of

natural

than

present many Canadians are more
than a little concerned over the

implications

bulk

the

billion, with

of $250

the order

of

Parliament,

Canadian

of

their

million

each

1956 to

years,

their

to

country, that is to say, what
feelings would be
if the
United States had a foreign debt

own

the Throne
delivered by the Governor Gen¬
eral at the opening of the Special
Session

relation

in

situation

lar

from page 29

the speech from

in

rate

annual

an

$1,131

than

Continued

at

from

to

■""*• ™

*•«♦,«

deficit

ed in

•"*

rwa^aswww^^
,«i*w»w1'

Geneva

,

I'lmperatrice

London
Austin Friars, E. C. 2

8

rue

Petitot

Volume

192

Number 6012

.

.

The Commercial and

.

Financial

Chronicle

ment, in all of its units. And
have

By

H.

;

Bruce

'.

A

•

President, The Mutual Benefit
Insurance Co., Newark, New Jersey ' "

is

us

concerned

which

they

enter
as

with

do

can

political life

thorough

a

t

philosophy
the

the

on

need

to

people to do those things
to encourage businessmen^ to

roots level.

fundamentalist, Mr.

fundamental, approaches

in

Palmer

*

r

the

need

to

how

for

American

easily political participation

going

In

the

like to discuss two basic

problems

because I believe they
are a threat not only to the invest¬
ment
banking industry, but to
that greatest
of

all

enter¬

prises:

Amer¬

ica,

have

withering of the individual's

of

what

is

H.

Bruce

Palmer

to

I

'•

which

to

we

give, and they

are

that
in

lot

us

spend

these

things

of

many

a

of

important,
just get down

are

would

fundamental

would

give

tention

our

and

but if we
to some of

problems; if
time and

our

our

at¬

the

to

money

we

I

think

world

v

,

of

those

might

we

in

problems,

which

to

have

a

then

better

live.

system,
greater appreciation

we

because

have

I've

heartened by the fact that
IBA has an Education Com-

'

of

it

behooves

to

our

create
and

us

our

give,

we

as

:

indi¬

families,

and

as

we

to

our

na-

particularly

as

fundamental

our

problem.
field

of

one

I

government,
comment,

I

is

two

more

about that particular prob¬

that

to which I

one

cated, and again
spend

a

work

of my special

one

dedi¬

am

in

which

great deal of my time.

I

how

The-

organization, and yet in 1960 the

starts

with

trollable expenses in our company

con¬

All

with

hu¬

actually

in

to
such

to about $141/2
words, this un¬

other

be the

to which I

regulation

those controllable expenses. Those

and

"I

the

I

ego;

the

am

or

could

totalitarian in the

our

but

bankers,

we

to

and

so

that

we

might

investments

have

portfolio. I have

in

our

the

acquisition

regulating human behavior."

the

to investment
others in
the

acquire the

cluded

philosophies of

expenses

pay

mortgage field

I

I have deducted

total

our

monies that

be

even

expenses,

to which
constant attention in

ticular company.
from

me

power;

our

expenses

management, because we feel that
that is an obligation that we have
to the policyholders of our par¬

particular area, I think

say:

of

the

are

give

we

invite government to stepf

we

all

not

those

ego, ourselves,

would agree with

have,

consider to

an

re¬

procedure,

our

we

uncontrollable expense, of
paying the costs of government
today in our non-profit organiza¬
tion, almost equals the total of

start

a

can

be

Continued
.

as

In

something that

or

mention

we

withdraw

many

am

amount

million.

edu¬

are

areas

When

that

that

story

particular company. We

our

total taxes paid by a non-profit
organization
will
be
approxi¬
mately $12,900,0,00. Now, our con¬

starts

like

to
,

are

regulate human
behavior, either we will be a part

going to comment

one

of

fundamental

But I

am

about

place, I refer to
government, the last of the three

tion/'

threat

enterprise.
•
'
I would like to relate this

first

from that

"Participa¬

A

of

some

process.

would

the

that

costs
on

we
ex¬

be-

page

95

/■..

exchange

we

•

goods and services, of
have

I

stories

we

all

that

our

results. I hope that they might
challenge us all to be more active
in two particular areas.

of

bear:

to

the

course,

of

be made and what

In

t

of

burdens

controllable expense that we

And

can

tax

supposedly, as a mutual life
other- insurance company, a non-profit

in

world:

solution

motivation

criticize,

attempt

us

that we

"Welfarism."

We

cation.

and

the word:

the

educational

if

that is

the

everything

me,

man

or

think

to

fundamental to that problem area,

interest,

we

one

develop

of

in

past several decades.

criticize this thing

onerous

problems.

our

To

ferred.

word, which

lem because it is

free enterprise system

Nation,
together, and

refer

have in

we

and

might only make

little free enterprise units

our

they

In., the

livelihood for

a

today,

educational

.

course,

leadership, that

our

fundamental

tion

referred

V-

social

many

in the great
of

of

the

>

seen

tribution

enterprise system that

am

economic

problems,
have, I think;- been mag¬

course

•

t? \ s

f

we

business

problems -— and
again the leadership of American
business has
its

attention

been

tal

problem

ness

a

seems

together, and
together,

on

course,

this

as

re¬
we

we

to

necessary

human

one

that

do busi¬
occasions it beas

human behavior. And
late

problems.

third fundamen¬

and that

area

sults because it
live

magnificent in

to those

Then there is

comes

solution

understanding

business

our

problems that

basic

ideas;.'ideas

live together,

we

create

referring to, and, of course,

they
the

should

time

am

and

country,

our

problems.

feel

I
our

many

give the amount of atten¬

we

basic

are

communities

not

tion

in

and

our

do

of

problems

■'

.

ourselves

fun¬
damental problems in this world
in

a

given to the solution of those
problems. And as we live together,

believe that there

ours

think

to.

nificent in

because

happen

of

with

;-v<

to

viduals

I

started

y-

■

damental

and

Fundamen¬

talist

have

I -like

As

am

.

I

these

have

I

better

have in this nation.

the

hand, I believe it is- a
honor, because all great

of

call,

that

common ego

the

We

the:

see

a

; mittee. I hope that this Committee
term of reproach. On'
will
give attention to some of

a

to

'ours

teach

other

we

a

am

talist.

be

of

to

have

we

countries

Idealist. I do not consider

an

nation

withering of the

■

believe, that

;

that prob¬
I

will

some

finish

I

this
area,

we

the trends that have been with us

about

area.

if

and

Socialism

country today, I don't believe
we
have carefully analyzed

for

But I

I would
say basically probably the most
important thing we have to do is

we

my¬

would

I

that after

talk

economic

and to gain a
:

Idealist,

an:

that might solve some of the fun¬

Fun damen-

a

am

this to

:

If I were to

identify

ably

I

called

sure

paper

idea.'..

est.

self

my

been

am

things

a

abiding inter¬

say

I

term

deep and

very

and

the

which

in
all

we

have

I

to

have

we

We

called

have

we

Socialism,"

don't think

that

not

what?

"creeping

sorely criticize

at all times.

government

as • activity, and there is not
enough
as
our
social
problems are creative
activity that is being used
concerned, more attention should in our nation
today. If there is
be given to the training of our'
an
urge to giving leadership to
people to do those things which these particular fundamental

use

think, in the first place,

of the free

I would

motivated to

are

our

criticize

this

particular

be effectuated.

can

Now, my time is devoted to
those tilings which are fundamen¬
tal. It is my belief that all; prob¬
lems can be solved by people who

problems, I think that we might
this' agree that that
urge is a stimu¬
except to say that I spent a lot of lation i of
people, so that they:
my business life, and a lot of my
might be creative in their activi¬
extra-curricular activities, in that
ties. We don't want, I
believe, in

explains how inflation is responsible for our
high taxes, and affects
the problems of the aged, economic
growth and balance of payments.
.Inflation is compared to the deadliness of
communism, and cases are
as

Big Government
We businessmen

their creative

am

social, economic and govern¬
mental affairs and
urges creative political motivation to maintain
sound long-range fiscal
policies. Citing the government as the
single
most influential
corporate director in American business, Mr. Palmer

furnished

I

areas,

mey can do for themselves.

Describing himself

stresses

and Individual

.

train

at the grass

even

problem

Ego

far

principal problems confronting

themselves, and

to

were

would

-

i

for

Creativeness

try to identify the
real basic problems in those ihree

Life

,

businessman's

If I

fundamental

Palmer,*

Need

we

governmental problems.

Doing What We Can for Ourselves

Shoulder Its Responsibility

31

(2411)

behavior

as

regulate
we

regu¬

have, of
thing called Govern¬
we

State
-

m
S3

Coast-to-Coast

V"-v

-

itr.

Underwriters of

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Bonds

•

M

Correspondent Network

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Underwriters of State, Municipal and Revenue

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New Orleans

Philadelphia

Salt Lake City

San Antonio

Tulsa

Utica

Victoria,

Tex.

f

•"»,

-

i

•-r

u ;«*

-~ •

_

- -

murrt fffww#

32

»-»-■<

r.

■••»-«

taw wr**

p #*

nH«(TH[wi*"f*ViT^ W"W*?fWi»*r**m

.1

+

maturity,, with a small
exchanging for an eight-

year

Report of IBA Governmental
Securities Committee
Dwight W. Chapman of the
Wells Fargo Bank American
Trust Company,
San Fran¬
cisco, Calif., reported to the
Convention these findings of
Securities

Governmental

the

of which he was

Chairman:

the

previous
The

un¬

our

favorable balance of payments
added

brand

a

has
problem to

new

debt

and

management

monetary policy.

to

materialize
t h

sulted

tive

in

the

in

1958

techniques
These

Dwight W. Chapman

financial

decisions.

There

was

reduction

a

in

the total demand for credit,
primarily by the Federal Govern¬

of

debt

ment, whose budget changed from
largest peacetime deficit in
1959 to a surplus of over a billion

dollars in fiscal 1960.

•

policy of the

monetary

Federal Reserve shifted from

one

of restraint at the beginning of the

pricing

followed by two reductions in

the discount rate.

requirements

serve

both

of

were

reduced

by direct action and the

till

quired

cash

as

a

of the

part

use
re¬

reserve.

These

have

moves

in spite of the
been

In addition, re¬

been

fact that

we

made

have

marketable
This

of

followed

increased from 3V4% to

which

as

a

result of the

added

materially

emptive rights. This
complete freedom of

pre¬

gives them
action and

could enable them to

curb

no

the

on

corporate

compared
takes
of

tne

to

have

only

has

been

financing. Your
again to go on
favoring the elimination

of the interest rate

believe

we

excess

momentum

Government

Treasury
will

the

be

in

continued

tinues

to

major

problem

be

debt

but

large

since

it

is

con¬

not

seems

The> one-to-five
problem,
by

request of the Treasury in
1959, which permits postponement

erations.

of

issues

capital gain

or

frog"

The

area

"junior

in

operation
four

any

loss resulting from

exchange.

billion

June

from

year

area

principally

to

leap

short-

a

four-

area

move

with

very

Company, New York, N. Y.

Harris Trust and Savings Bank

more

becoming

is

San

a

on

the

years

way

To Admit Partners

of

America, N.T. & S.A.

New

Francisco, Calif.

Jan.

The

City,

Stock

will

admit

1

Fred

ward

Co., 44 Wall St.,
members of the

York

Weill,

Philadelphia National Bank

Freres &

York

New

George B. Kneass

T:

W.

Shean

Exchange,
Michel

Wilson
to

on

David-

and

Ed¬

partnersnip.

Philadelphia, Pa.
Frederick G.

serious

of 15

area

now

Lazard Freres

Lazard
Russell A. Kent

Larkin, Jr.

Security First National Bank
Los

The long-term

be
admitted
to
partnership
in
Kidder, Peabody & Co., 17 Wall
Street, New York City, members
of the New York Stock Exchange.

Chicago, 111.

results.

or

and Pacific Coast Stock Exchanges.

H. Hauser

Hardin H. Hawes

is

into the

R.

Chemical Bank New York

Bank

which can best be cor¬
"junior leap frog" op¬
If this is not done, these

will rapidly

one-year

moved

the

Calif.

Cincinnati, Ohio

Alfred

a

liquidity

William

640

To Admit Partner

'

to

requirements of our economy.

Co.,

On Jan. 1 Ehrhardt Groothoff will

Lyman Greer

Trust

one-year

&

admitted

Kidder, Peabody

*.

The Fifth Third Union Trust Co.

tion of the debt.
within

in

partnership

be

Bank

Los Angeles,
H.

reconstruc¬

be about in line with the

important
was the de¬

of

of

& Co.

VorK, N.

California

the

least of these

and

will

Stewart A. Dunn

market, the new
will face many

Not the

_

.

Kellermeyer

South- Spring
Street, members of the New York

.

The Atlantic National Bank

team

problems.

The

Operations

consequences

Staats

F.

Jan.

Gale

W.

1

Calif.—On

Jacksonville, Jacksonville, Fla.

now

the in¬

rected

tax

Chicago, 111.

W. Wayne Glover

we

as

interest

public's

vesting

well

William

1,

Robert

oc¬

most

years

the

and

ANGELES,

to

C. J. Devine

at the

the

;

LOS

C. F. Childs and Company, Inc.

New

have underway, as

To Admit Two

N. Y.

James A. Cranford

servicing the public debt.
Debt Problems Remain

William R. Statts

Childs

Newell

;

ceiling because
the long run

this action will reduce the cost of

„

Carter

New York,
F.

in

that

Arthur

accom¬

bond

on

Hutzler

Company, Pittsburgh, Pa.

v

The Chase Manhattan Bank

plished despite the failure of Con¬
to remove or modify the rate

as

s

Detroit, Mien. *s

gress

ceiling

&

Mellon National Bank & Trust

Bank

National Bank of Detroit

amounted
E.

this

Bros.

York, N. Y.

William J. Wallace

Milton S. Bosley

$9.2 billion.
of

Salomon
New

Cleveland, Ohio

fact that total sales oft)ver

period

Co..

York, N. Y.

Gi^ard L. Spencer

Calif.

The National City

15-year Bonds in the entire post¬
war

R. W. Pressprich &

Robert B. Blyth

importance in view

on more

Republic National Bank
Dallas, Tex.

New

•

San Francisco,

New York, N. Y.

Lockett Shelton

Fargo Bank
American Trust Company

The amount
insignificant
when
to our total debt but

Corporation of

Discount

New York,

Weils

seem

Mass.

Repp

Rudolph Smutny

Dwight W. Chapman, Chairman

for

N.

Herbert

COMMITTEE

municipal Bonds.

or

may

we

Respectfully submitted,

appre¬

market

ing procedure.
This was made
possible by legislation introduced

term

»

the

many

effect

that

he

National Bank of

Boston,

Boston,

GOVERNMENTAL SECURITIES

minimum of

a

and

overcrowded and presents the real

which

attracted

impact

is kind enough
have been of some

and

<

Sumner Pruyne
The First

assistance.

accounts

achieved with

was

L.

City Bank

N. Y.

New York,

1980-90-98.

Government invest¬
exchanged about
$600 million. The debt extension

velopment of the advance refund¬

over

naturally

Refunding

Probably
event in

to say

addition,

ment

date

the Treas¬

than

rather

used

Advanced

in

The First National

provided through "senior leap

Treasury

publicly held
maturing in 1967-68-69

their

to

announced that under certain
circumstances
cash
refunding
be

of

billion

$4

"tap" 21As
3%s maturing

In

exchange

Delmont K. Pfeffer

closely with Secretary An¬
derson and his associates in the

September.

the

needs

This can best

supply.

work

Despite the accomplishments to

In March of this year

would

in

for

3%%,

ury

higher rates in foreign countries
have

almost

attractiveness.

the

losing gold

resulted

Committee wishes

the

was

This

record

by the introduction
and one-year Bills.
Then the rate on Savings Bonds

was

in

undertaken

was

management.

year to one of neutrality in the
speculation of the type which
early spring, followed by ease in
curred in June, 1958.
the summer and active ease in

fall.
Initially, reserves were
supplied to the banking system by
open market operations and this

manageable proportions
$11.2 billion 2%s of Nov. 15,
1961.
The
final
step was
the
"senior leap frog" operation, which

commenced

of six-months

the

The

the

was

business

l*il«»ifl>»d*»**Hfc«,'«ikv«fcMW

Thursday, December 15, 1960

.

frog" operations, although cash
offerings should also be made at
proper times.
It has been a great privilege to

more

All

securities other than at par.

portant factor
and

very

numerous con¬

innovations

with

im¬

a

commencing in
effort to improve the

an

tion

an

for

seen

steps

ogy

psychol¬
which had
evio usly

public

be

the

of years."

They have taken
structive

infla¬

the

have

we

the

of

management

long period

re¬

disappearance

been

In the words

Sproul, "they have pro¬
with the most imagina¬

debt that

early

e

spring

to

long-term Government,

We have been most fortunate in

us

This not only resulted

in debt extension but also reduced

market

Treasury Personnel Lauded

vided

boom

e

Bond.

year

additional

.

.

the Government market but

amount

ciable

of Allan

failure

t h

in

In fact,

market.

the Bill

in order to re¬
pressure from

and their associates.

of

p r

the

of

some

having in the Treasury, Secretary
Anderson, Under-Secretary Baird,

two

years.

of

only" policy in its open

market operations
move

the
from

deviate

to

background

of

in

its "Bills

for

necessary

Reserve

over-all

for progress in
Treasury operations and debt
management has been consider¬
ably better in 1960 than in either
The

it

made

Federal

condition

This

funds.

short-term
has

r

wiWJfrA

The Commercial and Financial Chronicle

(2412)

Committee

r

zzxBuzsr'ts

*4*»*»v»

Ralph

to

:

Angeles, Calif.
F. Leach

Morgan Guaranty Trust

significant segment of

CHICAGO,

-Company, New York, N. Y.

&

111.—David A. Noyes
Co., 2o8 South La Salle Street,

members

Pat G. Morris
—-

The

David A. Noyes
To Admit Johnson

Northern

Trust

Company

will

1

Chicago, 111.

to

Robert C. Morris

Bankers Trust

New

Company

the" New

aaihit

York

Exchanges,

Wallace

D.

on

and

Jan.

Jonnson

partnership.

With

York, N. Y.

of

Miawest Stock

Schirmer, Atherton

(Special to The Financial Chronicle)

Emil J. Pattberg, Jr.

PORTLAND, Maine — James A.
Boyd has become connected with

The First Boston Corporation

UNDERWRITERS

<

New York,

John H.

N. Y.

Continental
Bank

Scnrrmer,

and

Illinois National

Trust

Atnercon

Congress Y Street.

Perkins

&

He

Co.,
was

with First Maine Corpora¬

merly

tion.'^^

Company

;;

Chicago, 111.

DEALERS

BROKERS

•

York Hanseatic

Established

Corporation

1868

Established 1920

INVESTMENT SECURITIES

Spencer Trask & Co.
25

BROAD

Dealers

*

Distributors

'

Underwriters

STREET, NEW YORK 4, N. Y.
Members

New York Stock

American Stock Exchange

120

BROADWAY

BOSTON

ALBANY

NASHVILLE

Exchange

BOSTON
.

NEWARK

CHICAGO

SCHENECTADY

\

•

CHICAGO

•

•

NEW

YORK

PHILADELPHIA

•

5, N. Y.

SAN FRANCISCO

GLENS FALLS

WORCESTER

'

,

v

Direct

Private-Wire*

to:•

V

Atlanta, Boston, Chicago, Cleveland, Houston, Los Angeles,
New

i




Haven,
San

Philadelphia, Pittsburgh,

b34
for¬

Peruana.,

.

»»

Ore,,.froviuence,

Antonio, San Francisco, Washington, D. C.

•

•

Louisville,

Volume

192

Number 6012

.

.

The

.

Commercial and Financial Chronicle

should

Report of IB A Municipal

many

cal

dent

claims

K. Browne, Vice-Presi¬
of the Bank of America,
N.T. & S.A., San
Francisco,

and Chairman

of the Munici¬
pal Securities Committee, pre¬

this

sented to the Convention the

Committee's

Report,

which

follows:
new

issues of munici¬

pal

bonds continued at a high
level during the first 10 months
of 1960, aggregating over
$6,220,of

new

1959

in

new

Sales
issues
set

the

the

public

able

of

the

at

the

that

local

is

The

for

assistance

a

Alan K. Browne

for

local

to

cilities would

aggregating

$4,200,000,000. This
largest single state

included
or

over

the

municipal

be

public fa¬

local

ments.

$1,750,000,000 California water
program.
Bond election results
available for $3,057,000,000 of the
proposals show approval of more
than $2,778,000,000—about 91% by

the

dollar value.

487,000,000, by 1959 the aggregate

The volume of sales of munici¬

pal bonds demonstrates that state
and local governments are financ¬

successfully

the construction
public facili¬

level

in

1932

governments

was

about

ties, including schools, water and

000,000.

more

works

roads.

The

and

streets

and

high percentage of
bond
election
approvals
shows
that there is no local apathy in
approving financing for local pub¬
lic

facilities.
"Crisis"

Local

Every
for

new

a

lic

can

facilities

there are proposals
expanded programs of

Federal financial assistance to lo¬

Securi¬

(Drexel

&

Dallas,

Texas),

Bond

Sale

Proce¬

Walter

W.

W.

Co.,

Co., Inc.,
Chairman.

Orlando
&

Area

S.

Co.,

F. Morgan
New York

Subcommit¬

Brewer

(Phelps,
York City),

New

Operations

■■■:_.<

local

without

on

the

third

and

state basis. An

a

S.

8

to

each

a

non-segregated

Senate

basis.

previously passed
$880,000,000 in

authorize

of

two

for

years

Federal

Senate

where
the
and

the

bills
the

compromised,

differences

passed

House

by

could

neither

so

the

The

Farm

Bureau

others)

Federal

and
on

have

the

opposed
aid

for

elementary

secondary school construction

grounds
(among others)
that there is no need for Federal
assistance because (1) in the fivethe

estimated number of needed class¬

excess

replace

was

cut

(66,400

from

to

enrollment

370,000

to

accommodate

and

unsatisfactory

66,000

to

facilities)

and

estimates of the number of
classrooms needed may have been
exaggerated to create an apparent

of

success

in

financing for needed

enroll¬

state

secondary school classrooms
further demonstrated by the

is

fact that the

sale of school bonds
for such purposes
during the first
nine months of 1960
over

aggregated
is about

$1,726,000,000, which
excess

of

sold

the

amount

during

the

responding period in 1959. This
fact, along with the rising trend
in the percentage of school bond
issues approved at bond

elections,

refutes the claims by advocates of
Federal aid that school bond sales
and school bond

als

are

election approv¬

decreasing.

(c) Proposed Program of Fed¬
eral

Loans

for

Public

Facilities

Not Adopted.

S. 1955 in the Sen¬
ate would have authorized
$1,000,-

000,000 in Federal loans
and

to

..

.

struction of

any

public

Federal
Some

fi¬

local

pals.

No bills

were

introduced

The

Federal loans with maturi¬
ties up to 50 years would be made
at a low interest rate determined

Continued

on

page

PRIMARY MARKETS
in

(b) Federal Aid for Classroom
Construction Not Adopted.
The
House passed (by a vote of 206 to

sible

189)

such

financing.
The market for municipal bonds

H.

ments)

INSTITUTIONAL SECURITIES

\

banking should be sim¬
plified to the greatest extent pos¬

R.

to

10128

(with

authorize

U. S. Governments

amend¬

$325,000,000

Federal

Agency Issues

Municipals
Public Utilities

Industrials

SERVICING
Railroads

BROKERS AND DEALERS

Equipment Trusts

SINCE 1878

Bankers

Acceptances

Finance

Paper

Canadian Issues

Preferred Stocks

ASIEL & CO.
Members

20

BROAD STREET

New York Stock

Exchange

American

Exchange

Stock

NEW YORK 5, N. Y.

SALOMON BROS. & HUTZLER
Members New York Stock

60 WALL
Boston

Telephone HAnover 2-5000




Teletype NY 1-1110 & NY 1-1111

Exchange

STREET, NEW YORK 5

Philadelphia

San Francisco

Dallas

con¬

facilities.

(a) Tax Exemption for Munici¬

bonds.

Members

states

municipalities to finance

II *

governments

of

cor¬

Cashiering Proce¬
Subcommittee:
Lloyd
B.
Hatcher (White, Weld &
Co., New
York City), Chairman.

Legislation Affecting
Municipals

and

providing
elementary

and

bonds

the

132,400

great

governments

such

(among

period from 1954 to 1959

The
local

bill

proposals

school

elementary school
level is decreasing,
so
that the
peak period of jieed for additional
elementary and secondary school
classroom capacity is behind us.

in

American

Federation

public
the

19%

IBA, the U. S. Chamber of
and

in
at

be

passed
Commerce

growth
ments

Trading and

$284,000,-

need expert advice
out sound financing
The mechanics of in¬

facilitate

state and local

a

dures

in

to

con¬

Subcom¬

governments

working

educa¬

finance

to

City),

finance needed pub¬

assistance.

on

The

rooms

William

&

Congress proposing elimination of
the tax exemption for
municipal

nancial

dents

for

and

local

and

agencies

struction of

Chairman.
v

vestment

year
or

and

programs.

Myth

,

^

State

Co.,

(F.

Federal

generally

Steel

states

1957

than fourteen

than

.

H.

Public

by

tional

(2) school
through

aid;

from

mittee: John W. de Milhau
(Chase
Manhattan Bank, New York

$19,200,-

100,000,000 while the Federal debt
more

Municipal

on

Syndicate

state and local debt had increased
about three times to about $64,-

to

for

Chairman.

and the national debt of
the United States was about $19,-

times

facilities.

amendment required that school
facilities constructed with Federal
assistance be available to all stu¬

Association:

Fenn

the

000,000

had increased

on

during

years

ference,

Metropolitan

aggregate debt of state and local

of record amounts of

sewer

when

elementary

school

Federal

sold

$6,500,000,000; and (3) the rate of

and

year

tee:

Starting from practically

same

1959

second years

Liaison Subcommittee to Amer¬
ican Bridge, Tunnel & Turnpike

City),

govern¬

the

been

for

bonds

public elementary and
secondary schools aggregated over

Much

has

year

Subcommittee:

(Blyth

to

bond authorization ever approved,

this

be

considera¬

Craigie &
Richmond, Va.), Chairman.

carefully
the
current
financial positions of the Federal
and

secondary

need

Federal grants
of

33

The Federal funds would have to
be matched during the first and

between

Walter

Craigie

compare

government

for

Committee

Liaison

ma¬

advised

that

follows:

dures

governments

well

subcommittees

Chairman.

time.

the construction of

and

(a total of

years

for

construction

fourth

suggestions could

work

Southwest

Proponents of Federal financial

recent

these

Financial Advisers Subcommit¬
tee; William C.
Jackson, Jr. (First

reason¬

comparable

same

subcom¬

Co., New York City), Chairman.

con¬

disproved when the

the

at

the

ties:

governments

financing at

its

recommendations.

Education

by local governments
financing are compared
rates
paid by the Federal

government

at

world.

for

of

Subcommittees

promptly

or

Special

paid

turities

Novembel

ing

as

fact

facilities) are better
country than in any other
in

work

toward

new

four

grants for classroom construction
reports of the subcommittees. The" or-teachers' salaries.
The House Rules Committee re¬
special committees and subcom¬
mittees and their chairmen are fused to send these bills to con¬

living and
(including

facilities

each of

the

done by these subcommittees and
will be reflected in the
separate

their

with

on

record,

of

the

standard

rates

rates
for

ballot for ap-

new

in

by

that

cannot obtain

proposed

elections set

tion

Contentions that

exists

of

or

referred

obtain

market

in

$1,300,000,000)

established this year so

problems

need for
local public facilities in the United
States is disproved

tention

The amount

the

"crisis"

a

country

months.

proval

general

public facilities.

in this

annual

bond issues

to

and

directed

Several
were

educational

volume,
aggregating
over $7,600,000,000 in 12

of

the

of

attract
munici¬

basis

reasonable rates to construct local

a

record

for

unable

are

in

is

Reports

country demands that the

ernments

Much

to
for

ends.

Federal government
provide the
financial assistance to
remedy the
situation or (b) that local
gov¬
funds

The sales of

000,000.

our

investors

committee

mittee

governments, usually based on
that (a) some "crisis" ex¬
ists in a particular
type of public
facility and the public welfare
of

broadened

new

pal bonds.

Securities Committee
Alan

be

(2413)

Cleveland

Chicago

West Palm Beach

60

34

Chronicle

The Commercial and Financial

(2414)

.

.

Thursday, December 15, 1960

.

4

recommendations, based
Metro

Report of IBA Subcommittee

defeated

Metropolitan Areas
Subcommittee

the

on

New York

Authority and the Met¬

ropolitan Water District of Cali¬
of Our Metropoli¬ fornia).
tan
Areas, Chaired by Or¬
(2) A metropolitan federation
lando S. Brewer, Partner of organized on a regional basis as
Phelps, Fenn & Co., New a new governmental entity, to
York City, provided this Re¬ which the various local govern¬
the

within

units

ment

Convention:

render their

metropolitan

authority to deal with

confronted with

often

where

certain

public

facili¬

ties

area,

situation

tions

such

could be pro¬
more

or

ing
area

the

plan¬

Orlando S. Brewer

most every area

of

medium

both

in

adjacent to
large

or

the

United

termine

solutions

to programs

a

city

of units

there

and

in

and

that

some

are now

in

Three, questions-that must
invariably be considered are: (1)
the appropriate governmental unit
to furnish the facility or service

division of political au¬
gthe various gov¬

amon

ernmental

(3) the
cilities

units

means
or

or

even

within

the

area;

of financing the fa¬

only

entities

tal

a

cover

have

forthcoming
attempt to

eral

wide services:

(1)

A

000 spent over a

special authority

or

dis¬

trict to

deal, on a regional basis,
with a single or limited function
such as
rapid transit, or water
supply

(for example, the Port of

making this
tensive

in

Charter

in

mercial

to

also

specific .prob¬

solve

the

meanwhile.

For

ex¬

it

the

.

function of the new
government is its responsibility
for

central

F.

Charlottesville

■

i

Cleveland

.

people from each of 10 elec¬
will

have

of

the

present

city of Winnipeg; the other onehalf will be made up of the ma¬
'

jority of the voters from outside
the city. The executive affairs of
the metropolitan corporation will
be in the hands of an executive
director appointed by the
The

Council.

Government

Metropolitan

the total

of

includes .long-

planning for major roads
bridges, traffic control, sewer
and water control, establishment
of major parks, and garbage dis¬
posal.
The

Metropolitan Council will
direct the new government as it

responsibility
operational functions includ¬
assumes

departments: Finance, Assess¬
ments, Planning, Streets & Tran¬
sit, Water Supply and Sewage
Disposal. Later, additional depart¬
ments may also be created by the
Council.
•
;
:
•

After

■

,

nearly 10 years of study

and analysis, the metropolitan area
of

Winnipeg has brought to suc¬

cessful fruition the Winnipeg Met¬
the

Although

Corporation.

ropolitan

definition

final

of

the

respects from the recommenda¬
ing the following: assessment;
tions of the Investigating Com¬
planning; arterial roads including
mission which reported in 1959,
bridges and the regulation of traf¬
underlying principles of good met¬
fic; transit; water, excluding local
ropolitan area government have
distribution; sewage disposal, ex¬
been preserved.
cluding local sewers; garbage dis¬
posal but not collection; major
Washington, D. C.
:
parks; river control; mosquito
The National Capital Transpor¬
abatement; and a few other minor
functions.
There are legislative tation Act of 1960 has been signed

provisions
functions

providing
shall

be

that

taken

these

over

by President Eisenhower. The Act
Continued

by

on

page

King and Company
Middlebrook, Inc.

City (Mo.)
Barret, Fitch, North & Co., Inc.

Kansas

City (Mo.)

Underwriters

O. Peet & Co.

•

Distributors

STATE, GENERAL MARKET AND PUBLIC REVENUE

Los

Angeles.-Woolrych, Currier & Carlsen
Berwyn T. Moore & Co., Inc.
Lynchburg
Mason & Lee, Inc.

Louisville

—

Martinsville

Your Order8 Invited

John

Minneapolis
Philadelphia
Pittsburgh
Portland

.

(Ore.)

Yeaman

MUNICIPAL BONDS

Black & Company, Inc.

San Francisco
St. Louis

W.

Piper, Jaffray & Hopwood
H. A. Riecke & Co., Inc.
Arthurs, Lestrange & Co.
Walter C.

DIRECT

Corey Co.

74
»

Trinity Place, New York 6, N. Y.

Telephone HAnover 2-2400




TO

CHICAGO,

MIAMI,

BOSTON

B. J. VAN IN(3EN & CO

.

INC.

ESTABLISHED 1917

Members: New York Security Dealers Association

t

WIRE

Fusz-Schmelzle & Co., Inc.

Troster, Singer & Co.

ap¬

proved corporation differs in some

Cohurn &

Kansas

the

majority of

a

from

residents

the

One-half

districts.

toral

districts

Baker, Simonds & Co., Inc.

Rapids

Hartford

Institutions

Co.

governing unit of
corporation, the Metro¬

Lowell, Murphy & Co., Inc.

Detroit
Grand

&

Dallas Union Securities Company

Dallas
Denver

Dealers & Financial

Mitchell Johnson

Wyllie and Thornhill
-Wm. H. Tegtmeyer & Co.
J. N. Russell & Co., Inc.

Chicago

For Banks, Brokers,

to:

Hey Ward Silcox

This

and

for

We Make Markets in Over the Counter Securities

planning

area.

term

Research, giving

for

major

urban

municipalities.

will, at the start, have five major

problem.
A

of water, sewage

garbage collection,
be charged against the

central

new

the

Royal Commission devoted to this

gradually

Wire*

the

to

consumers

politan Council, will be made up
of 10 members elected directly by

wider

while awaiting a report from

adopted an inter¬
radio commu¬

keeping
the
Metro
reports
up
to date
and doing additional research as
needed. This provides background

Private

a

However, in the
schools
the
Legislative

of

case

Business

Charleston

that

Assembly decided to defer action

fire

responsibility

the

directly

of duties be performed 'try
Government;'-in¬

the Metropolitan

the staff of the Cleveland Bureau

submitted

recommended

range

and

of Governmental

The

recom¬

levied

be

cluding schools.

Hills

leaders inj the
Cleveland
area,
impressed with
the previous work of the Metro
Research project, have increased

re¬

taxes

munici¬

and

rates may

Commis¬

originally

that

the cost of transit services;

in the case

member

by the Metropolitan Council rather
than by the present municipali¬
ties. Finally, the Commission had

are

individual

:from

mended that all business and com¬

the
Gen¬

committees

also

of

Metropolitan Corporation may
also collect fees, charges and rates

disposal

had

munici¬

pality bear to the assessment of
the total metropolitan area.
The

and

The

assets

the

that

cover

districts.

member

on

palities; and direct levies on each
municipality
in the proportion

example, the Act provides for re¬
all existing municipal

land

(4)

the Cuyahoga County

Commission

for

of the

levies

from

tention! of

electoral

1962.

industrial

and business tax revenues secured

teamed up

nications plan.

as

cent years.

Last year,

or

commercial,

available;

boundaries, whereas the Commis¬

ample two of the suburbs, More-

county have
departmental

of the most ex¬
kind

now

from three major sources:
and charges for serv¬

supplied and facilities made

ices

Commis¬
For

meet

direct fees

respects from the
of the Greater

Investigating

Winnipeg

¬

government corpora¬
its operating ex¬

new

will

penses

recommendations

Bentleyville," are
considering merger; the fire chiefs
of the 35 fire departments in the

Metropolitan

of its

legislation

organizations

session

Several

working
lems

three-year period,

one

studies

The
tion

Marcn set up a
of administration

sion which reported in 1959.

mu

tion.

ple of the Province and affects
nearly a score of existing munici¬
pal governments.

in .some

extend, however, to

rently responsible for administra¬

government for an area which
comprises about one-half the peo¬

fers

as¬

nicipal officers who may have
been appointed as commissioners
or members of various boards cur¬

and

Assembly.

(3)

Cleveland-Cuyahoga County

known

in

late

structure

new

The County

of" legislation

program

Commission,

does not

Legislative

The enabling

area.

adopted

sion

metropolitan area prob¬
lems. It includes, rather, a sum¬
mary
of some of the principal
developments which illustrate
some of the problems involved.

Services

are

creation
a
multi
purpose government
the Winnipeg Metropoli¬

tan

of

particular

on

Employees are also protected
as
rights and privileges
concerned.
This protection

insofar

-

for

(2) A committee is preparing a

four

been

has

civic

the

the ballot in 1961

Metro, completed its research
general project on metropolitan problems
approaches for determining the' in Cleveland.
Approximately 30
appropriate unit to provide area- reports were published and $500,There

reasons,

with

all of the developments re¬

services.

of

debts

standing

sion originally recommended the
to -consolidation of existing units to
form
new
municipalities which
prepare
a
compromise
charter.
There is movement to get it on would: also serve as metropolitan
these

a

involved.

Cleveland

In.-1960 the Manitoba

certain

of

sets.

Asseembly authorized the

though opposed to the charter for

garding

The

tions. ;<•

Mayors Association1, therefore, al¬

used where
few governmen¬

This report is not an

of Greater Winni¬
peg."
It was proposed that the
14 municipalities and cities now
existing in the area be consoli¬
dated to form eight new corpora¬

of the municipalities.

powers

trary county action.

are

is frequently

are

by referendum, a

"Municipality

opposition wanted reasonable
assurances that the municipalities
would be protected against arbi¬

single

a

approval

without the

of the residents

The

(4) Annexation or consolidation

population,

effect.

(2) the
thority

and

which should properly

county

States

Canada, has led in recent years to
a large number of studies
to de¬
cases

single

legislation,

mended

then,

how the trans¬

of these functions
to the Metropolitan Government
has been planned.
For example,
the Metropolitan Government will
assume
responsibility for out¬

Government
charter for the county gave: it too / The- Metropolitan
much power to control the assets created by the Provincial Act dif¬

state.

al¬

by

areas

because

be included that are not within

This

complex
faced

there

some

wide

-

basis.

This approacn

limitations

the Greater Winnipeg
Commission recom¬
that there be formed by

problems.

Since

metropolitan authority only if
and able to do so.

it is ready

It is worth noting

Canada

Last year

Investigating

The County Mayors' As¬
sociation was the only organized
area-wide
group
in
opposition.
The
opposition argued that the

County

Metropolitan Area.

v

Nov.

groups.

metropolitan

a

Cleveland-Cuyahoga

has

an

on

entire area.

County Metropolitan Area and for

economically
through-long range

from

on

the

fer

Winnipeg,

labor, the League of
Women
Voters, the Citizens
League and 20 other major civic

principally in utilizing
an
existing governmental entity
instead of creating a new entity.
This is basically the approach in
Dade County, Florida and it is the
general approach recommended
for
the
Pittsburgh - Allegheny

water, sewer,
or
schools,

efficiently

differs

This

election

for

vote.

and

discussion

Commerce,

federation

as

transportation,

vided

to

the

at

approaches to

new

as

problems are brought up

the

3, 1959, causing a setback in solv¬
ing Cleveland's metropolitan area

three newspapers, the Chamber

shift of specified func¬
a
governmental entity

A

which encompasses the

serv¬

or

ices,

a

(3)

continuity

the

metro¬

(1) The defeated proposal pro¬
ior a mayor-council form of
government and gave the county
authority
over
such
important
powers as water supply, sewers,
transportation, airports and sea¬
port. The proposal had the sup¬
port of both political parties, all

specified functions (for example,
spreading the
Winnipeg Metropolitan Cor¬
beyond the political boundaries of
poration).
.
the city which forms its base, is
A

upon

new

vided

sur¬

area

a

however,
steps have been taken to approach
anew governmental problems fac¬
ing Greater Cleveland:

Problems

port to the

for

politan government for the major
portion of the Cleveland-Metro¬
politan Area.
The proposal was

On the Problems of Our
The

report,

40

WALL

STREET, NEW YORK 5, N. Y.

•

Telephone: HAnover 2-9353

Teletype NY 1-376; 377; 378
CHICAGO

•

MIAMI

•

BOSTON

67

.

!'■

Volume 192

Number 6012

.

.

The Commercial and Financial Chronicle

.

(2415)

Report of IB A Public Utility
C.

Brown,

and

Public

a

Chairman

Utilities

of

the

The

Securities

'

TVA

Committee, submitted the fol¬
recently
lowing Committee Report to ing, of $50

completed
million of

,

bonds

the Convention:
of

purpose

report is

be

to

of

is

the

in

during
the
as

I960-—

have

connection

as

-

bonds.
that

the

report
White

phur
of

this

mentioned

that

were

huge
and rapid de¬
velopment of

Authorities

REA's

in

and

projects, which we
characterized as being subsidized
public power developments at the
of

the

American

since such

payer,

operations

Federal taxes and

accentuated

future.

It

watch

sible

in
will

these

the
be

impact

companies

duty

our

with

further

;

Au¬

associations

scat¬

at

is

2%

a

not

only

of

Commission

has

adopted

new

over-all

an

should

would

it

fat

its

of

expan¬

rural

into

areas

of

areas

from

urban

the
com¬

While

of

is

comforting

view

in

action

of

the

the

the

going rate of
similar pattern for

a

governmental lending policies

on

adopted and

resolutions

be

again

we

adopted

■

in

investment

on

while
the

has

it

of

cost

and

property

taken

into

and

A

return

rate of

a

rate

on

decision

with

to

Such

base.

Common

I

major

the

.
„

puri

n

iiki

one

readily

on

a

it

a

couraged

Members 'Hew

rates

Federal

Power

decision

a

Gas

Natural

in

SAN

FRANCISCO

MONICA

•

ORLEANS

•

HOUSTON

•

PHOENIX

SAN
•

TUCSON

BATON ROUGE
•

EL

PASO

•




•

-

KANSAS CITY '

Gas

It has

'
'7 '
HOLLYWOOD
.

SANTA ANA
•

ATLANTA

KANSAS CITY

LONGVIEW

•

•

•

•

»
•

'
h\
LA JOLLA • LONG
.

PASADENA

•

SAN DIEGO

SANTA BARBARA

CHICAGO

ALBUQUERQUE

LUBBOCK

•

point, where the rate of reonly 5.9% on an original

a

rate base.

In Wisconsin the Com-

mission ordered reduction of rates

en-

number

Continued

80

on page

that

Return

of

a

•
•

TYLER

•

MEMPHIS
ROSWELL
•

•

SANTA
•

NEW

DALLAS

WICHITA FALLS

&

Co.

NEW YORK 5,

N. Y.

LONDON, ENGLAND

this

be¬

is

375

the
Middletown

investors.

is

It

one.

that

obvious

10%

a

rate

on

its

Boettcher 8C
t

a

over¬

that has

low equity ratio

limited

would

be

smaller

rate

to

much

a

of return and

under

conditions
the
be
approximately

market

would

level

a

"J"

•

-

,

came

mentioned

out

above.

in

cases
Southern Nat¬

ratio

of

ratio

28%, received a rate of
only 6%%. Obviously
overall
rate
of
return
is

this

small
gas

the

more

...

compensation, to
more

a

natural

which in the past
favorable

conditions

market, and under
favorable operating condi¬
money

CITY

YORK
Geneva

•

Hornell

•

Ithaca

Stroudsburg, Pa.

•

Richmond, Charlottesville, Fredericksburg, Va.

.Chicago, 111.
.

*

.

.

.

Pueblo, Colo.; Chicago, 111.

Nashville, Knoxvitle, Jackson, Memphis,
Clarksville, Tenn.; Atlanta, Ga.; Jackson, Miss.

.

Chaplin, McGuiness 8C Co

Z....

E. W. Clark 8C Co.
"

.Denver, Colorado Springs, Grand Junction,

*

...

i......

.Pittsburgh, Pa.

Philadelphia, Germantown, Lancaster, York, Pa.

Cooley 8C Company.
Company, Inc.

.Hartford, Conn.

Dittmar 8C

A. G. Edwards 8c Sons

...

...

.

.

.San Antonio, Dallas, Tex.

.5/. I.ouis, Crestwood, Clayton, Mo.; Tuscaloosa, Ala.;

Phoenix, Ariz.; Jonesboro, Little Rock, Ark,; Naples, St. Petersburg, Fla.;
Belleville, Jacksonville, Springfield, III.; Ames, Keokuk, Iowa; Lake Charles,
Shreveport, La.; Laurel, Aliss.; Houston, l ex.; Hutchinson, Satina, Wichita, Kansas

i

''

Elder 8C Co

.

.».

•

»» •»

»V/t .Chattanooga, Tenn. j:

Farwell, Chapman 8C Co..
>

Chicago, III.

Hill & Co.

,

Jphnston, Lemon 8C Co..
Loewi 8C Co., Inc
•

<

.Cincinnati, Ohio

Chippewa Falls, Green Bay, Janesvillc, Madison, Mosinee,
Racine, Waukesha, Wausau, Wauwatosa, Wisconsin Rapids, Wise.

J

W. L.

..

Washington, D. C.; Alexandria, Va.
.Milwaukee, Appleton, Beaver Dam,

Lyons 8C Co...,.......... .Louisville, St. Matthews, Danville, Lexington,
Bowling Green, Ky.

Mead, Miller 8C Co...

Baltimore, Md.
Minneapolis, St. Paul, Rochester, Minn.;

/

Piper, Jaffray 8C Hopwood

. • •

t

•

Billings, Great Falls, Mont.; Fargo, No. Dakota

Sanders 8C Company
Sutro 8c Co.

•

■

Cleveland, Shaker Square, Canton, Columbus, Toledo, Ohio

Prescott 8c Co

•

t.

•

Dallas, Tex.

'Ban Francisco, Los Angeles, Beverly Hills, Hayward, San Jose, Calif.
FOREIGN

CORRESPONDENTS

Ian Potter 8c Co.

Paulo A.

...

.Melbourne, Australia

..........

Bromberg

Sao Paulo, Brazil

Greenshields 8C Co. Limited

—

••

•

A. E. Osier

*

.Montreal, Canada

Toronto, Canada
Tokyo, Japan

Company Limited
Yamaichi Securities Co., Ltd

.Montevideo, Uruguay

Roldos S. A

Mercantil De Inversiones S.A

•

.Caracas, Venezuela
1

■

of

company

under
in

was

of

return

......

Company

!

.

the

the

with an equity
given an over¬
all rate of return of 6Vz%
and
Tennessee
Gas
with an
equity
40%

•

Watertown

•

;

.

matter of fact, the way

a

figures

■

J. C. Bradford 8C Co.

It:

operations, whereas the com¬

pany

NEW

Eitnira

Betts, Borland 8i Co.

industry and

to

•

Utica

•

CORRESPONDENTS

Anderson 8C Strudwick

it

since

AVENUE,

Auburn

Syracuse

•

Concept Is

gas

attractiveness
unfair

PARK

NEW YORK STATE:

company's operations
which will produce

natural

the

existing

t-

Loeb, Rhoades

Tor\ Stoc\ Exchange, American Stoc\ Exchange
and principal Commodity Exchanges

Trans¬

now

ural Gas Company,

NEW ORLEANS •' ATLANTA

•

of

case

Underwriters and Distributors of

which

earnings

As
„

FRANCISCO • CHICAGO •

JOSE

the

Corporate and Municipal Securities

the,\ Commission
intends to use in the regulation of
natural gas companies.

Dealers

•

'■

•

in

&

Commission

in the Southern

Tennessee

approach

Shares

Distributors

PALM SPRINGS

rate

Company case and
in connection

obvious

come

Broadway, New York 6, New York

•

a

higher,
these
favorable

August

the

6%.

OAKLAND

on

base,

turn was

are

a

rate

or

ruled

Power

42 WALL STREET

practice of establishing
of return/ However, in July

issued

E. F. HUTTON & COMPANY

•

that

see

return

new

Light Company
that a 6.02% on original cost rate
base was adequate.
In the case
of Washington Water Company,
the Commission allowed a*, rate
increase which improved earnings

•

we

Ohio,
the

standard

all

LOS ANGELES

to

level,

Carl M.

apparent that the Com¬
had
departed from the

receive

•

local

10% yield
was
not

that is capitalized com¬
pletely. with common stock equity
theoretically would be entitled to

BEACH

the

return

company

•

Commission

Pacific

restrictive

Commissions

■

Commission,
in connection
Light &

predicated

was

stantial

«.

y

At

a

penalizes the
company that has a thinner com¬
mon stock equity ratio as against
the company that has a more sub¬

.

this

5.8%

a

cost

return of 7%

to

Manufacturer's

to produce
equity. At first

on

is

,'f
FRESNO

believe

permitted

,

the

of

necessary

its

•

and

missions, irrespective of the higher
cost
of doing
business, hold
doggedly to the historical 6% rate
of
In
return.
Washington
the

Mixed Attitude of State

Heat Company in February of this

for

V

re-

base

As
against
trends, several of the state Com-

divert

to

non-regulatory
business, which

their

of

we

capital, the decisions

approximately 10%^ on1 common
equity, is both-unfair and
inadequate and might well de¬
stroy the future favorable outlook

BEVERLY HILLS

them

cause

of

account

stock

•

5.8%,

of 7%. In

Commission

reproduction

regulatory procedure will tend to
deny to these people an adequate
future gas supply.

up to this year has gen¬
erally followed in the area of ap¬

limiting

BAKERSFIELD

and

aspects

return

with

.

a

rate

amplify the rate of
area

trie'Company

new

their attentions to

Com¬

.

again

-

value

fact would

the

will

see

and capital,

Federal

in

of

mission

this

agencies for

POS^

-

fair

on

permitted other provisions which

common

year,

force compliance upon other gov¬

•

7%. Similarly, in Arizona the

.

pay

ernmental

turn

its

up

regulating the return obviously would be against the
stock equity is quite public interest. There .are large
disturbing. Up to the present year -pent-up demands for natural gas
the
Federal
Power
Commission in many regions of the country
mission

going

be

to

higher costs

expenses

of

proximately 6%.

urge

over

would

usage.

it

operating

to

DALLAS •

build

or-

which also would result in

preciation
*

the first

to

Co.
rate

standard

this

"flow-

accounting

due to rapid de¬

predicated

activities

Gas

fair value

the

Columbus & Southern Ohio Elec-

made resulted in

expansion

Star

on

on

is the company < that
be
hurt
by this
newly
adopted,, concept. We believe that

the

of

of allowing a rate of return based

of

Lone

return

which

Common

standpoint

embrace

The method of reducing regula¬
tion to a bare bones concept of

SAN

and

6V2%

know

we

Railroad

iginal gas rate base would be well

position to put

a

the

principle

.*;■

•

in

bones

Texas

allowed

base

common

his¬

Dangerous

LOS ANGELES

be

specific examples,

that the

a

early

year,

to

Rate

61

en-

return

made in the

was

adequately Commission allowed

_

on

reproduction
fair value, or

agencies

the

sub¬

type

As

with the

company

base,

rate

the

through"

of

excess

their

should

-■

the

of

decision

a

part of the

15%

really

Commissions

generous

e.ther

In

6%

return to the

in

rate.

Corporate and Municipal Bonds

••

to

the

more

than

stock position. As we see
it, the very company that should
be, helped
from
a
regulatory

return

sion, but also represents a threat
to private utility companies from

all

Underwriters

far

a

showed

9%

a

their
return

level.

torical 6%, Lastly, there has been
the
trend
of
state
regulatory

mission Company.

•

in

are

business,
from

equity since only through
ability, to
earn

the

granting rates

unfair

for

Brokers

be

and

level

which

allowed,

used

6%
less

wuere

was

of

rate

historical

cost
principle or
allowing year-end rate bases when

common
stock equity in 1959.
Furthermore, it is obvious that

smaller

local

utility

company which is
titled to a higher rate

return

interest

DISTRIBUTION

and

of

handi-

the

on

equity, rather
rate

severe

electric

a

of

liberalized

the

cases

utilizing

on

/

a rate base. The second
major
development has been a general
acceptance at both the national

the

Preferred

companies,

apparently
procedure
of

common

on

munities.
We
have
heretofore
suggested that since the TVA was

to

NATIONAL

a

has regulated natural gas com¬
panies on the historical method

an

this

interest, that

pos¬

earnings

coop¬

electric

and

.

continued

the

upon

is

application by rural

telephone

strictly

and

the

bill

Electrification

upon

•suburban

immediate

developments

ourselves

concern

Rural

sidization

little, if any,
state or local taxes. Furthermore,
they give special advantagq§vto<sectional areas, of the country at £be
expense of taxpayers far removed
from the project, benefiting com¬
pletely their own locale. Unfor¬
tunately these projects are still
before us and might well become
no

sustained

them

is

Results

the

TVA

i

eratives

pay

more

investors,

have
on

tne

those

a

amended, expansion ' of the Au¬
thority is definitely defined and

This

tax¬

ing result occurred at the Federal
level

and

Power

above

nat-

a

limited.

of

government

cap.

Federal

com-

company,

veloped in regulatory procedures.
The most unique and surpris¬
tne

on

states

thinking

which is inwasting asset industry,
appeals to a limited number
gas

of

where

16%

equity. To limit

three major basic trends have de¬

for tax deferrals

J'by-

tered throughout the nation, offers
loans, for full construction costs

the

other

ural

local

to

of

in

tems

private

electrification

the

and

stock

13

6%

a

resulted

turn

the

thority,

Carl C. Brown

Power

expense

bill,

served

Federal

of

receive

which

regulatory
procedure
discourage natural gas managements
from - an
aggressive
policy of building up their sys-

The

public power;
T V A,
the
Northwest,

amended

about

return

mon

cen¬

return

the trend among regulatory agen¬
cies of liberalizing the rate of re¬

the

Unless

the

Public

the

communities

of

one

oncerned

with

pro¬

voted in November to align them¬
selves with power from the TVA.

particularly
c

the

developments

this

able- to

was

of

volved in

of

territory
output

from

at

on

believed

the

interest

tions,

regulation of the electric, gas and
telephone companies. This year

than

electric

result

under

several

year,

we

will

mitted

May

we

with

amended

in

the

the

are

return

its, electric

generally

growth

a

particular

granting rates of return based

posed expansion facilities. As per¬

at

Sul¬

in

is

absorb

which

interim

pur

It

the

will

unfavorable.

Ins,

a

to

statute of 1959, TVA is
permitted
to issue up to $750 million of such

occurred

favorable

well

of

amounts

the
development of
bring members of the Association
Under
the
up-to-date on the important de¬ system.

velopments which

revenue

first

substantial

financed

offer¬

an

4

which

series

this

REA

The Tennessee Valley
Authority
has

The

and

Of

tered

Partner in strength of the private utility in¬
Dean Witter & Co., New York dustry.

City,

rate

time

Securities Committee
Carl

Federal and State Regulatory
Activities
*

35

PRIVATE

WIRE

SYSTEM

Providing immediate access to primary markets through
Branch Offices and Correspondents and their connections
in over 100 cities throughout the United States and Canada

■»

i

36

(2416)

,

The Commercial and Financial Chronicle

i

-v.

the better in the relation between "lems

denaand

and

production capacity
Substantial additional reserves in

North

,

Africa

tend

to

complicate
industry's .problem.
While
foreign consumption is growing at
a
higher rate than domestic consumption;(about 7% per annum
the

Emery Katzenbach, II, Part¬
of White, Weld & Co.,
New York City, and Chair¬
man
of the Oil and Natural

ceptionally strong and while oversupply, particularly in the foreign
area, remains a serious problem,
there are signs of renewed
in¬
vestor interest. In fact, the group

Gas Securities Committee, de¬

as

L.

livered
mittee

the

following Com¬
Report to the Conven¬

tion:

whole has made

a

from

recovery

its

as

1960

lows

tional oil

—

gate/ are

order of about
average. The group

something of the
20%

the

.on

includes

many

companies

foreign

J

companies, in the aggreunlikely to see their
grow at a rate

business

commensurate

which

with

the

increase

in

foreign consumption, due to the
expectation that they "will have

provide generous dividend returns

Preface and Summary

compared with 3% per annum),
major
established
interna-

the

excellent

an

amply protected by earnings and

to make room for newcomers, inWhile there is an ex¬
cluding
government - sponsored
refining
capacity
in
this
Natural Gas Securities Committee
enterprises. Accordingly, the betof the Investment
Bankers As¬ country, the industry this year has
been able to avoid ruinous price or record of growth shown by
sociation presents a review of the
the international companies in the
competition
and
profit
margin
position and outlook of the major
past is unlikely to be matched in
squeezes. There is expected to be
segments
of
the
domestic and
the present decade.
'
no
increase in refining capacity
foreign oil and gas industry. We
In general, the oil and gas sethis year, nor is any measurable
have also included a discussion of
amount
anticipated in the next .curities are selling well below their
the oil industry's activities in the
few
years.
Consequently,
it is appraised values and it should
petrochemical industry, a field in
be remembered that even though
possible to look forward to an
which
the
major oil companies
amelioration in the problem of the growth of the petroleum inhave been taking an increasing
overcapacity in refining facilities. dustry's earnings may not be as
interest.
At the same time, drilling activity rapid in the future as it was^up
Last year your committee took
to three
years
ago
many
comhas
been * declining
and seems
note of the declining investment
likely to remain at a relatively panies will outperform the ininterest in oil securities. On this low level as we look ahead to dustiys
averages.
In
analyzing
occasion we can take a certain
comparing
next year. The rate of finding new and
particular^
comamount of comfort in the fact that
.panies
with
one
another, the inreserves has been declining in re¬
during recent months oil securi¬ cent years. Thus it is possible to vestor should pay attention to the
ties have turned in a relatively
conclude, so far as our domestic .Very useful yardstick known a»
better market performance than
industry is concerned, that we cash earnings. Actually cash earnmany other segments of the mar¬
may have seen the worst of the mgs can be more significant than
ket. We can also point with satis¬
picture so far as overcapacity in reported net income. Gash earnfaction to the relatively favorable
refining and oversupply in pro¬ mgs may be defined as cash flow
earnings performance which the duction is concerned, and it is not available for the payment of diviindustry has turned in thus far hard to see why, against the back¬ dends and reinvestment in the
this year and is in prospect for the
drop of the industry's earnings business for growth and expanyear
as
a
whole. While results performance in 1960, the industry
earnings are derived
vary considerably between com¬ has
shown signs of regaining a by adding net income as reported,
As in

the past years,

the Oil and

cash

flow.

cess

of

degree
been

of

the
in

lost

which

favor
the

last

non-cash

had

couple

agamst

of

income

expand

years.

charges
for expenditures to

chargeoffs

and

develop

In

reserves.

and
oil

general,

earnings represent the

and

of net

depreciation,
depletion
and
amortization, intangible de¬
velopment expenses, surrendered
leases and dry hole expenses. The
use of cash earnings figures helps

INCORPORATE D

»

i

;

Business continuous since 1890

i

to iron out differences in account-

y

ing procedures among oil and gas
companies, such as the treatment
of intangible drilling costs.

"

Underwriters and Distributors of

Analysis
MUNICIPAL AND

SECURITIES

CORPORATE

are

the excellent anprepared by The
Manhattan Bank as our

We have

cash

used

-«

The post 1957 decline in capital

nual summaries

expenditures
occurred " in
all
Chase
major sectors. Table III.) Lower
source
material.
Although
the production expenditures reflect a
number of companies used in the reduction
in
well
completions
annual compilation vary between from 58,000 in 1956 to 50,000 in
30. and ,35,; the effect -is not sig- 1959
We believe completions in
nificant for our purposes since the 19g9 win drop further to about
'changes generally represent com- 45 qoO and in 1961 may average
panies deleted due to acquisition gRghtly less in response to. the
by a company already tabulated unc0mfortable fact that the domesor addition of companies not large tic
industry is producing at apenough to affect the total.
i
proximately 72% of capacity. No
A
comparison of <the profit- substantial increase in the operat¬
.

,

ability of the oil industry relative
to

generally
point
before
within
the
oil

industry

starting
trends

is

industry.

.

(Table I.)

/

;

good

a

j

•

,

It is apparent that deterioration
in oil industry earnings and return

net assets occurred largely sub-

on

sequent to
of

1956-57
after

return

although rate

1954

ing rate is anticipated in the next
few

below

fell

Consequently, no imin drilling ac-

years

studying portant

increase

tiyity is expected in the foreateable future.

•

Refining/Chemical expendi1

,

earlier

to!

arldif innq

petr0chemical
iq^

uac

vears

canacitv

>

investment

nPrniintpd for

since

increas-

an

favor-/^|^
is

general industry. The less
able recent trend of the oils

chieflv

were

refining

category

by a decline in 1956-59
earnings and
a
3.8
percentage

amounting to $175 million in 1959.
There
will be virtually no increase
in total refining capacity

point
decline in return on net assets. Industrial

thig

period increased although return on net assets declined 2.3

few ye

revealed

earnings

in

this

same

high

.a?; return

whereas

the

in

industry
Per"iod

as

five

year

1950-54, the return earned by the
oil

declining

industry
feat

0f

has

done

maintaining

a

remarkable
a

high

We will

a

rate

strong

ing first.

in

the

next

are

operating at

are

Inasmuch

necessary

to

plan and build new capacity, and
almost
nr

none

is under construction
thic

n]nnnpri

r,rPdict

timp

little

refining

if

we

anv

pan

in-

capacitythe

next few years. Therefore, assum-

ing ^reasonable] growth in consumption, refiners should be operating at about 90% >'of capacity
by the mid-1960's.'
Immediately

prior

analyse capital spend-

meaSurable

any

of capacity.

several vears

in

profitability, the oil

is

reflecting the fact that

82%

'

Within this general framework
of

j

industry exceeded industry in

four years.

nor

anticipated

domestic refiners

percentage points. In no year since
1954 has the oil industry yielded
as

year>

amoimt

to

this point

the

industry

embark upon a more extensive refinery construction pro-

may

seen in the
shown in Table II, from P™1 lwo tnree years. v- , >
1950 through 1957, increasing in
The remaining domestic expenrelation to total funds disposed ditures
include
transportation,
from 57% in 1950 to a high of r. Continued
on page 53
Capital spending increased each

year, as

.

earnings will

demonstrate how amply protected
are
the
dividend rates of most
,

STOCKS

BANKS AND INSURANCE

of

earning power and also with the
granting of expensive concessions
readily available to investors, in "Venezuela.
"..y-

the'major oil " companies whose
securities are publicly owned and

gas

income,

Blair

Thursday, December 15, 1960

73%- in 1^57v Spending thereafter
declined ;m amount and also &s a
in e o m e percentage of*.total: funds. The;
sheets of peak coincided with; The . -. top * in

0f capital investment and
cash balance sheet.

then,
sum

' composite-:

upon

statements and balance

u

panies, it appears" that on balance
earnings for 1960 will show an
improvement over 1959. The in¬
dustry's financial condition is ex¬

.

On the foreign front, it is more vestors. In.this paper we will into visualize a trend for vestigate the effect of these prob-

difficult

ner

,

.

major oil companies.
The natural gas segment of the
Members New York Stock

industry

Exchange
-

and Other

20 Broad

Principal Security Exchanges

Street, New York 5, N. Y.

Telephone DIgby 4-4000
Albany

Atlanta

Detroit

Eau Claire

Philadelphia
Tulsa

Boston

Aurora
Flint

Pittsburgh

Tyrone

y

>

.

^

Buffalo

-Manchester
>'

Chicago

Marshfield.

Rochester
Scranton
Williamsport

Washington

-

Columbus

?

-

Gas

6%

per

.with

gas

.

industry

same

continues

rate

a

over

the

Federal
out

cision
case,
.

area

:..

in

to

•

NEW YORK

5, N. Y.

have
the
year

Commission

important de¬
Phillips Petroleum

the

an

in connection with which

price plan

effort

V X"

Power

with

20 BROAD STREET

the

time the

troublesome
problems
on
regulatory front. During the

Wilmington

White, Weld & Co.

Association

annum

next decade. At the

came

....

plagued

consumption rising at

of about

New Haven

Springfield

American

show

/

not

and

overcapacity. In
fact,, it faces a bright future in
terms of a rising « trend of gas
consumption; estimates put out by
the

Teletype NY 1-1109

is

oversupply

was

to "remove

adopted in

an

an

boston

the

completely
hopeless task of trying to regulate
producers on a utility rate base
method. The principle is
certainly
welcome but the adequacy of the
price levels set are not, in many
cases, considered sufficient. Liti¬
gation will certainly ensue and

chicago
Members New York Stock

,

1

HALLE

&

STIEGLITZ

ESTABLISHED 1889

and other

and

Exchange

san

Commodity Exchanges

minneapolis
hartford

field, it is

MEMBERS

old

story

of

the

hagerstown

in¬

winchester

dustry's fighting an uphill battle
to
obtain
adequate increases in

New York Stock Exchange
^American Stock

same

Exchange

New Tork Cotton Exchange

Commodity Exchange, Inc.

Chicago 'Board of Trade

the overall rate of return to

pensate
senior

have

for the higher
capital, Pipeline

com¬

cost

of

equities
lagged well behind the elec¬

tric stocks and in many cases now
afford relatively generous yields.
52 WALL STREET

48 COMMERCE STREET

New York 5

Newark 2

HAnover 2-9050

Mitchell 2-5690

The natural gas industry deserves
whatever help can be afforded by
members

effort to




francisco

new haven

confusion will remain. In the nat¬
ural gas transmission
the

philadelphia
los angeles

principal Stock

of

our

obtain

industry
an

in

the

adequate and

fair rate of return.
Financial Trends in the
Petroleum Industry

The various problems of the oil

industry

are

well

known

to

in-

FOREIGN OFFICES
london

zurich

•

caracas

hong KONG

Ivl

Volume

192

Number 6012

.

,

The Commercial and Financial Chronicle

.

(2417)
uranium

producer in Canada in isotopes
be Rio Algom Mines/

1964; will

on

and

The

IB A

Nuclear

Industry

Committee, the Chairman of
which is Dr. Paul F.

Genachte,

offset

by

the

additional
On

to

of

"•

reserves.

Nov.

order

establishment

,L,

24, 1958, the AEC, in

avoid

serious

a

future

30, 1960 through the merger
single operating company
of Pronto Uranium
Mines, Ltd.,
Northspan Uranium Mines, Ltd.,
Algom Uranium Mines, Ltd., and

Vice-President, Atomic Ener¬
gy of the Chase Manhattan

oversupply of uranium, decided to

Bank, New York City, offered
the following
findings to the

the

Convention:

.

The atom continues to

steadily,
inform

and
you

trends

move

ahead

we

are

pleased

that

the

views

outlined

in

to

and

last year's

re¬

port still hold
true

today.

The

Com¬

limit future uranium
purchases to
the ore reserves

developed

date

of

as

of

announcement.

The Division of Raw Materials of
the AEC is still faced with the

any

stressed

sideration

of

checking claims

on

rate, well into 1962-66. Con¬
will

be
given to ex¬
remaining contracts

important

tending

technological
developments

the

that

with the above-mentioned restric¬

lead
the

competitive

with

atomic

lion

energy.

It

techno-

Dr. Paul F. Genachte

development

concept."

of

an

reactor

organic-

gas-cooled

This

work

of

and

a

reactor

progresses

satisfactorily. In 1959, the Atomic
Energy Commission also initiated
a

long-range

thermal

to

evolve

reactors

which

program

breeder

would make full

of the latent

use

in thorium. Particular

energy

to

the

em¬

AEC

fiscal

18,000

tons
over

will

of

Un08

$300 mil¬

AEC.

previous report,

our

Nov.

on

6,

1959

an¬

continue ?to

be

that it would not exercise

post

'62

period through Dec.
31, 1966. At the same time, the
United
Kingdom
agreed
to
a
stretch-out

maining

of

the

under

Canadian

its

deliveries

re¬

contracts

for

uranium.

The

by agreements between

oxide

several

the

In

years.

entire

a

the

meantime,
being

is

program

pressed forward vigorously.

of

Program

about

mills

some

report
same

mined

described

still

are

today.
this

in

previous
substantially the

The

year

our

of

amount

has

ore

almost been

these

15,000

in

circumstances,

Canadian

Rio Al¬

program.

The in¬

liability

which

it

and

is

strength
15

develop

high-speed

years

in

played

the
to

the

tons

present

fiscal

year

to

about

9,000

to

about

probably decrease
tons by 1962 and
4,000 tons by 1964-65.
three

Canada

main

from

tracts

will

considera¬

Gunnar

Consolidated
The

latter

in

Algom Mines,
Mines, Ltd.; and

Denison
two

Mines

companies

Ltd.

will

probably have satisfied their sup¬
ply contracts by 1963 and, there¬
fore

;

the

remaining

important

the

when

now

the

con¬

approved

an application to set
centrifuges.

life

with

under

financial
The

sound

economic

Our

and

conditions.

future

of

uranium

the

uranium

production

military
the

be

of

tions.

the

uranium

would

and

com¬

respect, as presented
year's report,
are
still

last

valid.

threshold

at

which

atomic

begins to become
petitive
in
the
high
cost

com¬

fuel

of
per

In

fact,

U.

S.

United

States

kilowatthour.

is

8

Even

a

large 300,000 kilowatt nuclear
plant built today under our
present;!: day «; technology
would
very

produce

at

energy

Gas

Centrifuge

hands

of

exist

CORPORATIONS
•

DEALERS

in this centrifuge
voluntarily agreed to

owned

by

industry,

United

the

However, in view of West
Germany's
membership
in
the
European Atomic Energy Com¬
munity, this entire problem is

+

These

private

by

is

also

material

CLEVELAND

•

DETROIT

•

•

SAN FRANCISCO

READING

States




?HIUP HILL, HIGGINSON, ERLANGERS LIMITED

is

the

first

financed

nuclear power station. It involved
no
direct
Government financial

assistance. Part of the cost of the

plant

was

seven

other

Among

put up by
utilities.

the

plants

a

group

of

announced,

would like to call your atten¬
tion to Southern California Edi¬

we

son, to which reference

was made
in last year's report,
regarding the
planned construction of the larg¬

est plant so
of

excess

U.

far, with a capacity in
300,000 kilowatts. This

chart

same

S.

also

indicates

the

Power

among

Projects Abroad,
which is the project pres¬

ently under contract negotiation
by
Societe
d'Energie Nucleaire

★

★

Continued on page 78
1

Partially

*

*

reproduced

in

this

issue.

*

Complete Brokerage Service

are

owned

and

for

Dye

by

Dealers, Brokers and Dealer Banks

Allied

Corporation,

is

converting each year
5,000 tons of uranium oxide into

.

*

hexafluoride.

Public

at

Convertible and

Oak

these

the

are

Carbide

plants

War

in

the

and

plants

been

the

source

fissionable

various

*
*

needed

both

for

★

*

.

+
Municipal, State and Revenue Bonds

.

+
★

*

★

*

.

funds

of the?

uranium-235

degrees of

*
,

in

during

Government

Foreign Bonds

-

Goodyear.

built

were

with

have

valuable

Utility, Industrial, Railroad,

<

diffusion

gaseous

these

enrich-

peacetime purposes. In the
Committee's report of 1957, it was

>«v

Listed and Unlisted
%

*

j

Preferred and Common Stocks

weapons

and

*

.

*

plants consumed

*

*

about

10% of the electricity out¬
put in the nation. This is substan¬

*

Corporation,
made

are

up

of

both
a

MABON & CO.

of

number

in

of

Established

energy consumed
diffusion
plants under

these

1892

the

MEMBERS

long-term contracts. We need not

NEW YORK STOCK EXCHANGE

discuss

AMERICAN STOCK EXCHANGE

here

the

ill-fated

Dixon-

Yates

project which would have
supplied additional power to these
plants.
At the
fusion

London Correspondent:

also

plants that

companies.
important feed

the

plant

Chemical
which

amount

PHILADELPHIA

It

privately

ALL MARKETS ON ONE CALL

private utility companies, are
supplying a very substantial

•

world.

the

of

CHICAGO

effort,
secrecy

Energy
plants .are

Commission.
There

which

New York 5, N. Y.

in the

Atomic

operated

Electric

Ripley & Co.

been

12,'
180,000
largest

plant, with a
capacity, is the

full-scale,

S.

tially true today. The Electric
Energy, Inc., and the Ohio Valley

Incorporated

had

Oct.

on

This

Gas

versus

material

the

stated that these

INDIVIDUALS

1960.

still

cost

a

private

in

ment
•

years

inaugurated

pany was

has

secrecy

work.

.Although the mining and mill¬
ing of uranium ores is now in the

and

BANKS

prevent

Also
acceding
to
the
request, the Bonn Govern¬
ment has agreed to
classify further

Diffusion

A

These

•

States.

somewhat above that threshold.

Union

Available to

to

controls.

plants is vested in the
AEC, although they are operated
by
private
companies
such
as

are

strict

for

power

the

BOSTON

reactor projects in the
This chart points

power

United

,

the

areas

mills

of

Yoafidcd

order

volved
has

U.

energy

controls, has sug¬

declassifying centrifuge tech¬
nology.
The
German
Degussa
company which is particularly in¬

soon

our

in

been
applied this year in this
field, in which, strangely enough,

ments in this
in

classified

spreading of nuclear weapons
capability among additional na¬

purposes.

substantial

Department, faced
impossibility

immediate

the

into

goes

up

gested that centrifugal technology

in¬

competitive atomic energy,

use

State

the

of international

which the two isotopes of natural
uranium are separated, ownership

63 Wall Street,

condensed description of the vari¬
ous

kilowatt

dustry will depend on the success
of the joint efforts of the Govern¬
ment
and
private
industry
to
develop competitive atomic en¬
ergy. At present, the bulk of the

since

Harriman

in

merger,

Ridge, Tennessee,
Paducah, Kentucky, and Portsmouth, Ohio. For security reasons,

•

Nuclear Power Plants

Operation and Under Construction

centrifuges

only is there a prospect of
competition with the gaseous dif¬
fusion
plants
looming
on
the

the

plants

PENSION FUNDS

not

started to

Not

an

expire in this country
and in Canada. Until
then, how¬
ever, this industry has an assured

various feed

producers

Rio

are:

led

ernment-owned

•

ago

new

which offer the real possibility of

material plants sup¬
ply the raw material to the Gov-

INSTITUTIONS

materials

available

These feed

Our Facilities

fraught with all kinds of legal
difficulties. This is all that can be

likely that Northspan's

years

uranium

,

as

tax offsets will result in the

production
of uranium

will

Ltd.;

The proven reserves of uranium

oxide

of

annual

The

Status of the Uranium Purchase

tions

The

stretch¬

out
is
being
carried
out,
as
anticipated in our previous report,

assessed

after

tensile

Mines,

company,

important part

become

the

the

only

tax

arrangements with Canada to
purchase uranium concentrates in

out

jointly by the AEC and
industry, but the results

private
can be
period of

new

the stretch-out

come

With

Because

developed

The

options, but agreed to stretch¬

phasis also began to .cbe^placed .to, close some of the mines and
during that;year on nuclear super¬ calling - for the delivery of the
heat
in
order a! to >; increase
the contractual amounts of uranium
efficiency of reactors.* These pro¬ oxide
by the remaining mills.
grams

,,

The Progress Chart1
prepared
producing fissionable material at by the Atomic Industrial Forum,
gom, has devised ways to maxi-: reasonable
Inc.,
3
East
54th
Street, New York
costs. The implications
mize the benefits resulting from
of this development are evident. 22, New York, gives an excellent

Ltd.

year,

production

total cost of

nounced
its

emphasis had shifted towards the

closed-cycle

current

about
a

the

logical

moderated

the

As stated in

was

indicated that
the

ores
that supply
eligible, consistent

are

domestic

reach

to

route,

In

the

the

as

mills

tions.

along

us

fastest

the

long

as

should

Uranium

such

diffusion

gas

to the reactors
h o r i
already in opera¬
?.on,, but ,the, enriphment
capability may' spread to West tion, under construction or
new
ore reserves as of Nov.
Germany and other nations. In planned and gives their essential
24, 1958 on
features such as ownership, loca¬
company paying no income taxes
over
2,500
properties
fact, an American company, Thorinvolving
until
1966.
thousands of mining claims.
type,
fuel
Westcliffe Research, Inc. has ob¬ tion,
characteristics,
It is impossible at this time to
tained a license to import such power level, completion date, and
Nearly two-thirds of the do¬
the
determine
with
names
of
the
certainty
what centrifuges from West
constructors, etc.
mestic mill contracts now extend
Germany.
will happen to the world uranium
The Dresden nuclear power
So
plant
far, the machines have not
through December, 1966, or, at
of the Commonwealth Edison Com¬
mining and milling industry six been
imported, nor has the AEC

huge task

mittee in 1959

the

the

a

Milliken ? Lake

uranium

centrifuge separation. ,In said at this time about this
the last few
years, however, West important development.
Germany, through the use of high

June

into

of

electromagnetic, thermal

Ltd. This company was formed

37

early

time

plants

these
were

gaseous

built

in

the

War

II,

the

part of World

Manhattan

D i

s

other methods of

t

r

i

dif¬

c

t

115

Broadway, New York 6
Bell

Telephone REctor 2-2820

System Teletype NY 1-2152

discarded

separation of the

rde*

★

★

★

-

1-4352

,

38

The Commercial and Financial Chronicle

(2418)

Report of IBA Foreign
Investment Committee

cies

as

and

the

the

The following Report was de¬
livered to the Convention by
Arthur

L.

eign

Vice-

Wadsworth,

nomic

position

payments

investment for
development.

sound

vestment bankers and their clients

creasing
diversify

of Dillon, Read &
Co., Inc., New York City, and

Then in 1947 the World

Chairman

mittee

Com¬

several

created

was

within

Association

our

years

a

1940s there

group

dedicated to

foreign

the

dividual

of

objective

depression

States

capital in

the

field

of

World

in

At the very

because of the

and
over

our

Committee

our

loss

of

that

state

supports

fully

thTother

and

private^loreign

lieve, however, in

investments and we

£

steps

'''

believe there

in

1946

World

to

II

and

more

interest

in

to

and

political

Western Europe and more

/./J 1

gress

has

into

divided

three

forms

of

v

in

Japan

and

certain

of the Free World.

other

(2)

American

tions

ing

parts

their
the

direct
United

first

ton
-i

Our

substantial

outside

leading

and

foreign branches
by expanding their interna¬
tional banking services including

and

ents.

correct

our

national

During this
and

to

same

elsewhere,

but

investors

in

standing

common

se¬

mittee
with

companies.

ment

of

by

and

of

The

investment

bankers
WW

stocks

U.

S.

their

of

financial

help

to

broaden

representatives of

community

in

(3)

which

this

should

be

continued

are

in¬

convinced

subcom¬

is attached

that

there

will

be

(2) This Committee should ren¬
regular reports to the Asso¬
in order to broaden the

der

as

ciation

knowedge and the interest of our

Ap¬

special

membership in the field of foreign

called

;J

sub-committee,

the

should

be

We

(3)

"Information

recognize!,'that foreign

investment

cre¬

is

peculiarly' subject
control.

to forces beyond our

benefit

example, the recent disturbances
in
Africa,
Latin
America and
other parts of the Free World,
the new evidences of increasing

of

the

IBA

membership

including statistical data, current
developments and other matters
related

to

foreign

This sub-committee

investment.
was

also

Continued

ap¬

on page

investment
well

in Table VI and requires
amplification here, except to
point out that the United States
covered

Co.

interest

in
office,

120

Broadway, Hew York 5, N. Y.

WQrth 4-6780

/

is

in

stocks

of

Western

Eu¬

companies described there¬

ropean

now

spreading

Ingalls

Japanese

to

securities.

Finally, we have in recent years
seen the beginning of the
"private
placement" of foreign securities

?r.

with

U.

It

difficult

is

S; institutional

formation
first

to

get

Municipal

U.

.

S.

investment

form of

and Revenue Bonds

More

term

bankers

Exchange
Exchange

American

Stock

The

in

notes sold to

recently

stantial

Primary Markets in Many Unlisted Securities

Members New York Stock
Members

in¬

accurate

were

Underwriters and Distributors of State,

•

such

"private
placements
relatively short-term credits
arranged for foreign borrowers by

Underwriters and Distributors of Corporate Securities

/

Snyder

&.

investors.

these activities.

on

-

a

bond

number

issues

placed privately.

100

BROADWAY, NEW YORK 5, N. Y.

COrtlandt

7-6800

—

Bell System

Teletype NY 1-1459

banks.

of

sub¬

have

been

■■■//.

;;

the

,

The

1950s, therefore, marked a
decade of reviving interest in the
field
of
private foreign invest-,

Brokers in Securities and Commodities

ment.

Investment

to

Advisory Service

Yet it would

mestic

Members New York Stock Exchange,

American Stock

a




broad

tion.

Exchange, and other Principal Exchanges

base

CORRESPONDENTS

WASHINGTON

GREAT NECK

a

our

active in the

EAST 42 STREET

lim¬

NEW

Asso¬

YORK

17, N. Y.

field;

still

only a limited num¬
people who understand or

of

interested in foreign portfolio

Underwriters

Dealers

Distributors

securities
in

our

same

which

have

financial

been

markets.'

time there is wide¬

spread

SAN ANTONIO

ALEXANDRIA

are

41

founda¬

only

are

At the

ST. LOUIS
DES MOINES

LINCOLN

are

offered

BUFFALO

INDIANAPOLIS

PEEKSK I'LL

firm

ROSS, LYON & CO., INC.

investment, and there is still only
limited participation by our large
institutional investors in the for¬

IN:

.

DENVER

a

still

ber

eign

CLEVELAND

or

are

banking busi¬
achieved either

ited number of firms in
ciation who

PITTSBURGH

yet

as

There

there

do¬

our

investment

has

ness

be unrealistic-

that this phase cf

say

recognition, both in government and private banking cir¬
cles, that this nation must take

aggressive position in broad¬
the use of private capital
/in financing the economic devel¬
opment of friendly foreign na¬

MEMBERS

an

ening

tions.

belief
/

.

Furthermore,
it
is
that, just as American

our

in-

dustrial corporations have discov¬
ered the advantages and profit in.

For

ated to collect information for the

no

<k

in¬

Free World nations.

"

Sub-committee,"

for¬

is

and

expanded in the future.
As one
example of an area where more
work
should
be
done, we are

investment.

A

hereafter

European

clients

for¬

The work of the sub-com¬

mittees

appointed; it has met
Washington
agencies

its report
pendix A.

develop¬

in

was

the

and

the

purchase of out¬

eign

securities

i

the

that

Another problem

can

Conclusion

agen¬

international

with

and

we

interest

(1)

be

should

international

Washington

au¬

"Washing¬

develop greater use
private capital in the field of
foreign investment. This subcom¬

Second, we have seen a grow¬
ing interest on the part of U. S.

agen-

i; ;

of

ciation.

foreign cli¬
period such

international

with

these

of

in

We k

im¬

sponsored by the New York Se¬
curity Analysts to Europe in 1959,
and the trip sponsored by Japa¬
nese groups to Japan in 1960.

any

with the various

work

and

how

subcommittee,
the

their

the

creasing opportunities
for joint
should, by regular visits to
participation between our private
Washington,
establish
a
closer
capital markets and the national
working relationship between our
and international lending agencies
private investment banking in¬
involved
in
financing the eco¬
dustry and such public agencies,
nomic
development,! of friendly
in order to

offerings
were
managed, underwritten and
offered by members of our Asso¬

their

credits

portion

called

of

mittee

III, IV and V

information

»

vestment,

other than World Bank
issues, were actually purchased
by foreign investors in Europe,

and

short-term

se¬

curities,

commercial banks followed by re¬

activating

selected

to

concerned

respect to these issues in the post¬
period. It is recognized that a

expand

investments
States.

cies

public

foreign

own.

Subcommittee,"

national

war

corpora¬

to

of

Tables

groups.

shows

As confidence

.industrial
the

were

issues

new

the

its

special

A

hereinafter

ac-

v.-

had

of

-

curities, principally dollar bonds
of
foreign
governments,
spon¬
sored by U. S. investment bank¬

improved, foreign investment be¬
gan to develop.
'

have

we

of

sale

u. s.

■

initiated

Committee

activities

itself

,

:\-"*\'

First,

in

committees in Con¬

interested in foreign private

the

created

recently

discussion

for

invest

to

securities.
some

eign investment by such means as'
trips to foreign nations similar to
the trip to the European Coal and
Steel Community in 1957, the trip

agencies in our govern¬
the

of

our

by

tivity.

eco¬

climate

an

as

investment

of

investment, irrespective of wheth¬

•

1%

the

er

par¬

improve confidence in the

the

pri¬

trasted with direct investments by

to

great deal has been done

a

available

with

ment and

foreign investment.

War

bankers:

securi-

■ •

of

to

maintained

be

group

foreign investment activities
investment bankers (as con¬

broadly

can

which

taken

be

na¬

We firmly be¬

tions of the world.

should

risen

from

should

that

such securities.
is

informed

re¬

to invest not more than
their respective funds in

thority

that:

vate

cial

nomic

the
those

promotion
and
greater
sharing of our defense and aid
burdens) which are essential to
provide a sound balance of pay¬
ments
relationship between the

many

had

ticularly during the decade of the

export

are

investors

and

States

revival

and

I

amounts

Canadian
■'

This

a

Tables

dollars

transactions

including

industry)

1950s,

to

States

bankers

United

the

ties.

by

As

markets.

show

responsible positions in the finan¬

of
Wadsworth

L.

A.

fiscal, monetary, wage, price and
international
policies (including

Uhited

and

1940's.

II

During the period since the end

situation,

like

1930s

financial

and

foreign

one-half of their present

over

(1) The Committee was needed

in

Foreign Issues Underwritten in

gold, and the steps which must be
taken to meet this situation, we
should

the

in the

our

date,

vol¬

the

foreign securities sold

of such

by the world-wide

in

dis¬

portant New York insurance com¬
panies have
already purchased
foreign securities which aggregate

-

concluded

•

balance of

payments

the

oerience

widespread

concern

result

a

community with very little
opportunity to gain practical ex-

outset,

interest

in

War II

vestment

foreign

public

investors

as

result, an entire generation of in¬

investment.

current

States

of

ume

by either in¬

growth

in

understand

of Committee's

Summary

substantial

a

little private

institutional

or

United

uation created

private
United

very

of the disturbed international sit¬

of

use

was

investment

the

n

broadening

the

World Bank.

has

problems which

investors

tutional
funds

participation in the

In 1946, the first post-war pub¬
Activities in 1960
discussing the current
of the Committee, we, lic sale of a new issue of foreign
An
important
meeting of the
securities
should take a brief look at the
(excluding Canadian se¬
Committee was held in New York,
past in order better to1 under¬ curities) was consummated in our'
on June 7, 1960.
After a full dis¬
stand the problems of the present. markets when Australia sold $20,-:
cussion
of
the
objectives
and
During the period
commencing 000,000 of its government bonds.
functions of the Committee it was
with the
1930s through the late During the later 1950s there was

for the purpose of providing

ago

yields and the greater growth po¬
tential which are frequently avail¬
able outside the United States.

■

Investment

other

quire further effort in the future.
Among these should be mentioned
the
problem of broadening the
statutory authority ofl our insti¬

the higher

obtain

to

Committee

full

The

cussed

securi¬

foreign

adding

by

effectively on its assignment,
its report is attached as Ap¬

pendix B.

in
the
future
investment port¬

activities

Introduction

Foreign

their

ties in order

States,
as
well as in Europe, bought the
bonds primarily because
of the

and Now

.

extent

and

Before

of the Foreign In¬

vestment Committee:

The

.

.

folios

its first issue of bonds

United States
Then

and

their

and investors in the United

eco¬

pointed; it has worked earnestly

of

expansion

diversified

Thursday, December 15, 1960

respective activities in coun-i
tries outside
the - United
States,
American investors will to an in¬

Bank sold

President

well

a

played little part in these devel¬

discouraging private for¬

without

Bank

Bank

.

began ex¬
tending credit to foreign borrow¬
ers
on
a
longer term basis. In¬

opments.
of

balance

Export-Import

World

.

.

NEW YORK

STOCK

EXCHANGE

.

.

.

AMERICAN

Phone YUkon 6-6700

STOCK

EXCHANGE

81

Volume

192

Number 6012

.

.

The Commercial and Financial Chronicle

.

in

offerings

For instance, the

1960.

and

lb59

smaller

and

more

Report of IBA Industrial

(2419)

dollar volume in 1956 was greater
than in 1959 with

only 67 % of the
number of offerings; and in 1957
the dollar volume was only slight¬

The Industrial Securities Com¬

Corporate

mittee, headed

Public

Financing

1952-1960

by H. Virgil
Before defining the method of
Sherrill, a Partner of Shields
& Company, New York Citu - Presentation °r attempting to an■enmiohorl

+h»

n

mittee

alyze

n

following Com-

.

;

'

;

.

'

:

The
principal
purpose
of
this
Report is to study the effect of
cash
equity offerings upon the
market

standing

e

the

issuer's

out-

0f

such

as

well

as

industrial

these years.

-

pared showing
the

effect

Financing

of

behavior

of

prices
during
the

and

period,
certainly

these

1958-1960

number

H.

Virgil Sherrill

Methods of

This increase in offerings

1952-1960

(June 30)

terest

note

for

period

V';

:

.

The data herein includes

'

There

common

stocks

and

with

of the

his

sell

some

of

to

related

as

security he
his

meet

certain

.

utlws"

-

:

of

and

fan

^

dollar

to sell

than

in

than

assumptions

1957)

in

during

the

on
a

the

event

shares

the

are

circumstances. For

the

instance, if

such

at

even

discount

a

successful

a

slight

of

methods

pricing

a

final

price

formula

a

a

an

when

applied to non-registered
secondaries; however, since this
study deals primarily with cash
offerings by an issuing company,
such offerings necessarily involve
registration of the new securities

lar

of capital stock of the

way)

Company on the New York Stock
Continued

on

page

debt

bonds, whereas under dif-

Pi^flrrP^Qtnrk

its common stock. Preferred stock

of-the

due

the disadvantage :to the
issuer in the tax treatment of pre-

through

this

1\ some cases (especially
preferreds still provide
Practlcal means of raising cap.

utilities)

Qf

a

trend

actually

itai

stock-offerings

'

...

,

^'^pfefer^fstocks, ot
th

corDOrate

manaeer

an

op-

security with
characteriSticS in a market

p0rtunity
it

to sell

a

wfmlH

npruans

ce^tivPe

not

hp

rp-

straight
common
st0Gk..offering* - The typical -cento

vertible

a

offers

investor

the

an

of-

^'and

Ihe

at
participate
growth of the com-

Mi. same time a chance to

it

in

the future

| pany
§| rable
||

Pi

on a basis nearly compato the common.
Both common stock and convertible issues are offered bv the

§| issuer either (1) to stockholders
Underwriters, brokers and dealers
distributing
Corporate and municipal securities
v'

since 1886
''

'*

v

s ''

;

It

through

§

to

I

cash offering.

the

a
rights offering or (2)
general public through a
Where pre-emptive

|| rights exist the issuer who elects
||, to sell common stock or a conIt vertible security is forced to offer
the

shares

new

pro

rata to exist-

|| ing stockholders with a "rights"
H offering, and in certain other cases
||
:

||

the issuer may voluntarily decide
to

the

offer

same

new

shares

by

GOVERNMENT

this

§!

W. E. HUTTON & CO.
Members New York Stock
and other leading

Exchange

CINCINNATI

Boston

10

Wayne.

East

Hartford

Burlington

Biddeford

Lewiston

Hackensack

Easton

Lexington

Columbus

Portland

Baltimore

Philadelphia

44th

St., N.Y.C.

||

less complicated than

a

rights of-

■

'''Iii'iiii




III

iuV

*

■

v

'

'

■

■

;

V

' III|: iiiiiMMMlIlllIlJ_lS± ferinS-• In the cash offering the
issuing

company

utilizes

an

in-

Knowledge, Experience, Facilities Jor Investors

R. W.
v..

issue first to its own stockholders

the company makes the original
offer to the public in the form of

INDUSTRIAL

•

INVESTMENT STOCKS

-

II;
However, in many cases where
If pre-emptive rights are not a con|| sideration, instead of offering the
||
||
||

MUNICIPAL

8C RAILROAD BONDS

jgbpany.

§! a cash offering. Normally a cash
| offering gives the issuer a higher
|| . price per share and certainly it is
I

PUBLIC UTILITY

|| determines to offer stockholders
jj the right to maintain their pro|| pcrtionate ownership in the com-

exchanges

NEW YORK

Dayton

f|
f|

even in the absence of
legal pre-emptive
rights, when
the size of the offering is such

that the large dollar amount involved necessitates an offering to
stockholders, and also in cases
where the management arbitrarily

•

PUBLIC REVENUE BONDS

•

EQUIPMENT TRUST CERTIFICATES

method. This course may be

ijj- followed,
|f
t!
ft

STATE

•

HOUSING AUTHORITY

„y
***

*

members

■

Exchange

New York Stock

,

Midwest Stock Exchange

American Stock Exchange (Assoc,J

;
S-

'

Pressprich & Co.

••

-

X:

>

'• i A'

•

/
*

t.

Albany " Boston

48 Wall Street, New York 5,
• 4

If

•

•

'•

Chicago

v

--i

A
as

the last reported sale price (regu¬

period of low

a

as

"The
initial
public
offering
price of the shares of capital stock
offered hereby will be a fixed
price to be determined by agree¬
ment between the Company and
the Representative of the Under¬
writers and to be not higher than

serious problem

no

the
on

fixed dollar price.
formula would read

typical

offering.

present

file

to

follows:

dis¬
to

necessary

issuer

opposed to

shares at the bid side of the
or

offering, but this solu¬

amendment based

stock has experienced a run-up

new

actual

tion should be avoided if possible.
A less complicated method is for

during trading hours. Nat¬
this may vary depending

rates, it might be prudent

"56 and 1957 were replaced by

;

some

offerings have declined in number

and with a much

common

For
favorable

a

f/®ct

n ;

number of equity offerings

exec.;, £rae

with

advan¬

shares may

in-

lower level in 1959
(but slightly higher,

a

19561

more

new

the

,

f

actually at

cor-

in

late

arises

ferent money

,

to

to

rlosolv

number

volume

and

Interest

With the total dollar yolume of
industrial common stock financing

and theories held by some invest-

ment bankers and corporate

ratio

.

,

contradict

the

elect to

seems

I

rathor

Index

be

can

tageous than the others.

companies

varied little from the 1956- 1957

capital require-

analysis of figures

^

but

ments
An

t4

equity issues followed

to whatever
may

stances each

period

It is

ancj

available

the
the

This

- market conditions
and with a relatively high stock
number market, the same company might

the

Exhibits

Poor

&

in

appraisal

potential market action of

stock,

class

raising, capital

1958. However, in the rising stock
market during 1959, and cohtinu-

of importance
irrmortancp to
to
of

to have

that

rise

the

Standard

utility convertible debentures and

issuer

to

rorrelatod

listing of industrial and

i<?
is

during

stocks

expressed * in

in
a of
ing
ot cash
cash offerings
ottqpngs of
ot industrial
maustriai

the

urally

issue

of

methods

one

that is filed with the SEC the
is the determining factor in es¬
tablishing the offering price. It morning of the proposed offering
is
a
fixed .dollars
and
cents
normally expected
that
the -is
market price on the date of offer¬ amount, it may be out of line with
the
market
ing has fully discounted any ad¬
existing at the time of
verse effect of the new shares to
offering.
The
underwriter
can
be sold, and consequently the of¬
overcome
tnis problem by stabi¬
fering price usually is set some¬ lizing during the period between
where in line with the market the time of the filing of the final
close to the day before or the last
price amendment and the time of

These

Raising Capital

several

are

porate
financial managers
and
naturally under certain circum¬

and volume of equity offerings, as

list-

a

offered to

are

count if the underwriters consider

the

offerings

shares

with

day but during
New York Stock Exchange and
American Stock Exchange trading
hours. Consequently, if the price

public for cash, the current mar¬
ket price of the outstanding shares

market

utility

the

propitious

a

faced

from

come

date it is not unusual to offer the

stock

common

prior to the

It
It

at

is

fact that final clearance from

procedure.

Offering

ber of

continued through the first half of

1958-1960.

When

Cash

a

panied by an unprecedented num-

cash

nreferreds
preferreds

capital

often

mechanical problem that necessi¬
a deviation from the normal

tates

is

study

immediately prior to the offering

manent

accom-

was

this

relatively

high stock market to obtain per-

ket behavior of stocks

a

the

of

market

years.

were

utility

advantage

1959, the broad rise

and
instru- 1960, even though there was a deobtaining the adoption cline in the stock market with the
by investment bankers and the Standard & Poor Industrial Stock
SEC of the "layoff" plan.
This
nuex dropping from the Jan.
4
report is not aimed at a compari- high of 65.46 to a low of 56.65
son cf the merits of a cash offerduring the six month period,
ing versus a rights offering but
Exhibit III includes the Standsimply an analysis supported by ard & Poor Index of 425 indusstatistical information, of the mar- trial stocks and the Index of 50

and

of

equity offerings indiCate that many issuers elected to
take

writer

the

of

SEC to offer the

sale- in

in

stock

effect

that

end

Pricing

■offered

'

the

the existing market. It

on

that

to

of

ing through
the

offering

of

in

likewise

.

,

constructive

most

mental

cer-

provided many companies with
opportunity
to
substitute
equity financing for debt.
v.
•
As mentioned above, in addition

low the level of the two preceding

earlier

studies

but

booming stock market

.an

1958 and continu-

m

of debt offerings,

ume

time. / Previous studies have inofferings al- dicated that the volume of equity
though the total dollar amount of financing follows closely the ups
equity financing was slightly be- and downs of the stock market,

stock

rights

Trends,

Beginning

rights: offer¬
ings and the

higher level of interest rates

tainly the

"

market

corn-

1956-57-58.

period

the

to

as

prevailed during most of 1959
was perhaps the principal factor
contributing to the reduced vol-

as

in

interested

of

amount

offered

to the higher cost of money in
1959 and early 1960, the smaller
:volume of bonds and the large

showing the number
offerings > in each

individual

pre¬

utility,

or

dollar

the

in

securities

pared

the

to

outstanding feature of

that

whether ' debt,

sold,

Commission, and consequently *m
pricing such offerings the under¬

1959-1960 market was* the re¬

The

and

or common, and also indivision by type of issuer,

a

studies have
been

security

elude

1

a

1952

preferred

In

r

e

in

Exhibits I and II give a breakdown of the amount of each class

years

v

of

securities

the

is

debt

public, fi-

types

beginning

with the Securities and Exchange

of

sale

general public, and naturally both
issuer and underwriter are vitally

primarily directed.

duction

in

be of interest.

may

com¬

stock.

past

of

price

included

continuing through June 30, 1960,

.

s

and

amount
nancing

.

offerings

banking group to handle

the

offerings.
'Anouier

our study, a brief summary of the

Keport to trie Lonven-

tion:

mon

the

vestment

ly less with 40% of the number of

the

39

.

'

■

•

•

Philadelphia

i

N. Y.
■

'.It

San Francisco

-

,

HongKong

89

y

v

-vu

'Ai.ii S;,^..A,.j\jmu ii^rf

v

.r»r^' w«<!» f.
,

.*. j...

40

i.WUlWiV.WW' '.Mtlk'.WJK.Wt.^WtUi

The Commercial and Financial Chronicle

(2420)

1949

100, it is
relatively
the index numbers of wage rates

Report of IBA Railroad
Securities Committee
following Railroad Securities
Committee Report from Al¬
fred J. Ross, Chairman of that
Committee.

He

is

Securities
to

present

Earnings

Remain

1.274-1

153.9

113.3

1.358-1

118,2

1.395-1

174.0

119.7

1.454-1

180.1

118.2

1.524-1

is

the

of

112.1

164.9

19586—
-

Unsatisfactory

Com¬

Notwithstanding relatively good
traffic volume, railroad net earn¬
ings continue to be unsatisfactory

at this

relation

in

on

the

to

investment

in

transportation facilities. For the
year 1960 the industry will earn
at the rate of only about 2.50%

credit

the

of

in

Col. II

(Column II)

f-'

142.8

last report, a year ago, the Nor¬
anticipated there will be
folk & Western-Virginian merger
substantial gains scored
was
effected
followed by the
in this type of transportation. As
absorption of the Charleston &
a matter of fact, the above figures
Western Carolina by the Atlantic
in
recent
years
understate the
Coast Line, the merger of the
gains made because most of the
Erie-Lackawanna,
and the ac¬
new
cars
placed in this service
quisition of the Minneapolis & St.
are 85 feet in length and designed
to
accommodate
two
trailers, Louis by the Chicago & North
Western. Pending before the Inter¬
whereas, in the earlier years, most
It

further

only

take

would

cars

state Commerce
Commission or
applications expected to be filed
therewith at an early date include

a

single trailer.
If railroads
share

fair

to obtain their
total
traffic

are

the

the

of

following

merger

Railroad

its

investment,
even
after
.allowing for recent rate increases.
on

industry.

railroad

regulation, includ¬

facilities

or

some

com¬

bination of the above factors.

1958—

Air Line.

ing the right to offer a fully
integrated transportation service.

/

„

Status: Interstate Commerce Com-

average figure for all regions and
districts. The comparable figures

It is the opinion of your Com¬ -> mission
the foregoing on
hearing at Richmond,
operating
income mittee that in Congressional
Va., on November 28, 1960.
(before deducting Federal income circles as well as at the Interstate
New York Central and Baltimore
a
measure
of
earnings Commerce Commission there is
taxes),

railroad

for

from

traffic

below:

is antici¬

It

This

pated that the

physical
volume

of

the

in

calendar
will

rate

the

several

Based

the

Pocahontas

ton-miles

to

miles

Passenger

are

ex¬

is

22.0 billion in 1959.

no

or

revenues

I

the year 1959. Net income for 1960

nancial

estimated

reduction

of

previous

be

made

increases

for

in

$443

from

recently
rates

and

portant
matter

foretelling

•

I

deducting

future date.

some

of the most
factors will be a

im¬
com¬

necessity

avoid

a

fi¬

pressures

continue

receipts

than

those

charges,

1953.

Based

while

unit of freight

1960

received
on

railroad

unabated
per

traffic handled in

requested

on

the

were

in

1952

years

less
or

1947-

Amount

Ohio

it

is

cars.

Central.

for

compete

handled

traffic

Such

Trucks.

movement

was

structure.

remains

to

be

Much

in

done

this

Seattle.
Status:

con¬

the

will

total

for

approximate
latter

figure

Merger

Although

560,000

Interstate

compares

Western Pacific, Atchison, Topeka
&

Santa

and

Fe,

Southern

Pacific.

can

shown in the table below:

Congress

render
to

ance

much

the

can

(Number of Carloads)

Year

:168,150

___

207,783
249,065
276,767

:_.A-

lems.

s

gressing at

from

their

the

it

mission

assist¬

does

Central of Georgia and

their

Hiowever, it is anticipated
tempo will be stepped up
sharply from now on. Since our

Basic analysis

ervice

*

Broadway, New York 6, N. Y.

Southern

y

Status: Southern Railway has ap¬

Interstate Com¬
to purchase
Central of Georgia stock owned
by the St. Louis-San Francisco
Railway.
\
"
>
plied

merce

:■

../■

to

the

Commission

Market facilities

Telephone Dlgby 4-4100

Singer, Bean & Mackie, inc.
Members New York Security Dealers Association

Established

1928

40
We

Offer

Exchange Place

New York 5, N. Y.

e

;

COMPREHENSIVE INVESTMENT

HAnover 2-9000

NY. 1-1825

&

1-4844

AND

DEALER SERVICE

FIRM TRADINC MARKETS

in

ALL CLASSES OF BONDS AND STOCKS

IN OVER 450 STOCKS

including

PUBLIC

UTILITY—RAILROAD—INDUSTRIAL
FOREIGN ISSUES

We

are

Particularly Adapted

to

Direct Wires to

Service Firms

With Retail Distribution

Your Inquiries Solicited

Burton J. Vincent & Co.

Saunders, Stiver & Co.

Chicago

Cleveland

,

Evans MacCormack &

P.

F. FOX &
120

BROADWAY, NEW

Telephone

REctor 2-7760



j

CO., INC.
YORK 5, N. Y.
Teletppei
NY 1*944

NY 1-945

Los

Stifel, Nicolaus & Company, Incorporated
St. Louis

,

Co.

Angeles

.

for

'"UV'vX

Railway.

disappointingly slow

pace.

their

shares

spheres of
prob¬

own

the

560',000

exchange
common

doing all they

example, railroad
potential source of
economies, are pro¬
a

to

respective

not

Western Pacific stock.

resolve

to

For

mergers,
a
substantial

4.1 ^ 1

(Partially"esti~)~—

within

influence

No. of Cars

and

Pacific and

Atchison, Topeka & Santa Fe
have requested the Interstate
Commerce
Commission's
per¬

Commission

needed

carriers

relieve them

Piggyback Traffic

Rate

Commerce

the

1961.

Status: Both Southern

Slow

the

ex¬

Commis¬

Commerce

sion early in

'

the

with similar data for recent years
as

be

to

Interstate

totals

railroads

application
filed with

Merger

pected

nection

on

Northern Pacific,

Chicago, Burlington & Quincy,
Spokane,
Portland &

and

work

more

Baltimore &
both Chesa¬

and New York

Ohio

&

Great Northern,

by
en¬

joyed by truckers only because
they enjoyed the shelter of the
rate

of
by

sought

peake

year when the Com¬
permitted a reduction in
as to permit railroads to

so

move

indicated
The

.

Control

stances this
rates

traffic aggregated 457,016 cars and

1960

MUNICIPAL BONDS

Status:

number of in¬

-

1 Q^Q

''Members American Stock
Exchange

transportation.

—

1956—

Members New York Stock
Exchange

a

mission

—

1957

Bacon, Stevenson &. Co.

of

piggyback
traffic.
To
date,
in
several billion dollars.
1960
(October 22nd), piggyback

year

embarrassment.

Upward
costs

to

as

modes

There have been

and, in the opinion of
picture from a traffic transportation experts, the traffic
that might be retrieved or new
standpoint
is
the
phenomenal
traffic
that
could
and
should
growth that has taken place in

1955

39

other

Federal

Income Taxes)

-

railroad

..

..

the

Operating Income

1955___

exactly

one

of

average

allowance

If

V,

CLASS

.

& Ohio.

operations, evidence of an intent to legislate
following and regulate in such a fashion as Status: Merger studies in progress.
to
'V::
permit the railroads of the
Baltimore & Ohio, Chesapeake &
Country to function competitively
RAILWAYS
Ohio, and New York Central. *
on
the basis of economics with

railroad

seen

Railway

Year

1.18

____

pelling desire to consolidate

million,

$134 million from

year.

(Excluding

ameliorated at

Probably

a

of

direct

be

(Before

2.53%

Region)

of

way

railways should
roughly $9.7 billion for the
current
year,
which
compares
with revenues of $9,825 billion for

total

the

Net

how this situation will be resolved

operating

Class

been

1960

_________

pected to approximate 21.4 billion
in 1960 which would compare with

has

effect

railway

ALL

_______

be

575 billion ton-miles for the year

all

The

net

$1,545,000,000
Pocahontas Region
6.61
1,462,000,000
Southern Region
3.27
1957—„——_
1,244,000,000
Western District
2.74
1,004,000,000
Except for the Pocahontas Re¬
1,015,000,000
gion, the foregoing figures show¬ 1960 (Partially esti.)
884,700,000
ing the relationship between rail¬
Bright
Spot
road earnings and investment are
One of the brighter spots in the
not reassuring to investors.
There

by all Class I railways
.would aggregate 579 billion for
the year 1960, as contrasted with

for

On Estimated

Eastern District

Alfred J. Ross

handled

Combined

of Return

Class I Railways

change

revenue

1959.

given

are

Traffic Volume

preceding
year. Recently, it was estimated
the

areas

an

may

relative ly
from

is

ratio

return

Indicated Rate

year

show

little

of

table:

current

'-rv

stock

or

acquisition proposals:

potential, and the public is to en¬
184.1
115.7
1.591-1
joy a better transportation service Minneapolis,
St.
Paul
&
SI'S.
This widening of the gap be¬ at the lowest possible cost, the
Marie, Wisconsin Central, and
tween
railroads
will
require
further
Duluth, South Shore & Atlantic.
railroad costs and service
charges is truly alarming and can assistance from the Congress and
Status: Pending before Interstate
be counteracted only by increased the Interstate Commerce Commis¬
v
Commerce Commission.
traffic, operating economies, rate sion, particularly with respect to
Atlantic Coast Line and Seaboard
adjustments, realistic taxation of legislation and
._

time its customary report and re¬

status

been

Col. I to

Per

Ton-Mile

(Column I)

-

view of various factors reflecting
the

have

million.

of $500

excess

Net

desires

principally

would

income

Ratio of

Aver. Rev.

•Combined

._

Railroad

The

Year

._

net

Index of

Prices

and

billion

$9,856

approximated

City.

mittee

costs, revenues
basis would have

annual

an

on

in Dick & Merle-Smith, New
York

Index of

Wage Rates
and Materials

to offset increased

Partner

a

with the index
nqmbers of average
ton-mile.

Commission

Commerce

Interstate

compare

revenue per

the

granted for the most part by

The Convention received the

being equal to

as

interesting to

Thursday, December 15, 1960

.

.

.

Dallas Rupe &

Son, Inc.

Dallas

Stone & Youngberg

•'

San Francisco '

Warner, Jennings, Mandell & Longstreth
Philadelphia

,

Volume

192

Number 6012

.

.

The Commercial and Financial Chronicle

.

(2421)
Louisville
•

&

Nashville,

Illinois

two-thirds

Central, and Southern Railway.

invested

Status: Illinois Central and South¬

Railway

ern
'

state
'

Air

board

approving Sea¬
Line-Atlantic Coast

has

the

anteed

Chicago,

to

Southern

Rock

Island

and

Chicago,

Paul

&

&

studies

still

Chicago

Plate)

Western.

St.

&

and

in

-

and

Part

V

to

be

year

V

Commerce

tial,

&

to

Status: Merger terms approved
by
management' now
subject
to

1961.

stockholders' approval. Applica¬
tion
to
Interstate
Commerce

roads

Commission to be filed shortly.

basis

Since

applied

which

the

for

loans,

proper

a

loan

on

"it

of

is

Merger

Compulsion

recognized

cently

the

of

above.

Southern

of

protection

before

a

peting

t

and

consolidation

lines

•

has

of

destroyed their capacity
If

railroad

evidence

managements

to

continues

or

do

Co.

all

ing tendencies. At the close of last
July, all Class I railways com¬

to

the

one

Carson

ties of $1,812
assets of

properties

should .exceed $900 million for the
Class I railways in 1960. Roughly

of

1959

$1,343

billion,

an

excess

excess

billion

amounted

which

admit

Robert

on

Coleman

partnership

in

Chronicle)

Co.,

has

3115

He

was

ter

&

joined the staff of

Dillon, Union Securities
Wilshire

Boulevard.

formerly with Dean Wit¬

Co.

H.

will

retire

the

firm

Now With Paine, Webber
(Special to The Financial Chronicle)

LOS

ANGELES, Calif.—Floyd W.

Stewart

has

become

associated

with

Paine, Webber, Jackson &
Curtis, 626 South Spring Street.
In the past he was with Stephen¬
son, Leydecker & Co. and Brown

Hayden, Stone Will
Admit Partners

Bros. Harriman & Co., Inc.
'

25

Jan.

',

•

•

On.

*

'

1

Hayden, Stone & Co.,
Broad Street, New York City,

members

Exchange,

of

the New York

will admit

Staats Adds

Stock

William

to

Staff

(Special to The Financial Chronicle)

J.

LODI, Cailf.

—
Charles J. Briggs
Stoutenburgh, Jr., member of the has become associated with Wil¬
Exchange, to general partnership, liam R. Staats &
Co., Farmers &
and Robert B. Wilson to limited
Merchants Bank Building. He was
partnership;
formerly Lodi representative for
Mitchum, Jones & Templeton.

With Sutro Co.

Murphey Favre

With Kidder, Peabody

(Special to The Financial Chronicle)

SAN

Adds Three V.-Ps.

E.

of

&

SPOKANE, Wash.
Three
vice-presidencies have been

$1,215 billion. At the end
such

will

Exchange,

Dec. 31.

of declin¬

reported current assets of
$3,027 billion and current liabili¬

through legislation.
expenditures for additions

betterments

has been

bined

consolidation
Gross

roads

1.

from

L. F. Rothschild & Co.
New York, N. Y.

strong, the trend

not

Jan.

Stock

Francis X.

Eugene Treuhold

number of roads

be

ap¬

proach to resolve such problems,
they may well face compulsory

and

to

recently in this respect for almost

earn.

statesmen-like

a

tal position of a

com¬

reduced

York

Gregory to partnership.

Dick & Merle-Smith
New York, N. Y.

•

Although the net working capi¬

New

Salomon Bros. & Hutzler
New York, N. Y.

•

Keller

&

Financial

ANGELES, Calif. —William

Eastman

York, N. Y.

James II.

finding concerning

minority stockholders.

degree
consideration

B.

Gregory & Sons, 72 Wall Street,
New York City, members of the

•

some

(Special to The

LOS

To Admit Partner

Gustave L. Levy
presents many obstacles including arrange for $150 million of future
Goldman, Sachs & Co. '
displacement of labor and possibly financing, about $33 million of
' New
York, N. Y.
destroying or greatly weakening which it was indicated might be W.
Wendell Reuss
the
position
of other railroads. availed of to acquire Central of
W. E. Hutton & Co.
Labor, in connection with con¬ Georgia stock owned by the St.
New York, N. Y.
solidations, has received a certain Louis-San Francisco Railway
James L. Sheehan
amount
of
protection. Railroads Company and Central of Georgia

should also be given

Joins Eastman Dillon

Gregory & Sons

New York, N. Y.

the

Railway
Company formally made plans to

consolidation

directly

&

the resolvement of the

Charles L. Bergmann
R. W. Pressprich &

repayment couldn't be made. Re¬
Threat

K. Romero have

COMMITTEE

nine

one

The

Alfred J. Ross, Chairman
Dick & Merle-Smith
New

FRANCISCO, Calif. —John
Hamilton-Selway and William

E.

1 James F.

Reilly will be
joined the staff of
to partnership in GoodCruttenden, Podesta & Co., Russ
Co., 2 Broadway, New Building.
Mr.
Hamilton-Selway
York City, members of the New was
formerly with Shaw, Hooker
York Stock Exchange. Mr.
Reilly & Co. Mr. Romero was with Div¬
is manager of the firm's munici¬ idend
Security Company and York
& Co.
pal department.
body

industry and

much

Cruttenden, Podesta

(Special to The Financial Chronicle)

SAN

admitted

to

seem

RAILROAD SECURITIES

to March

up

On Jan.

Respectfully submitted,

extends

passage,

denied

was

a

its

pretty

conditions.

discussed

guarantee

power

applications filed

31,

to

to

$500 million. This

the

pretty

problems

carriers, under certain
conditions, in an amount up to

.

have

the upside is substan¬

on

but

related

in

of

business

potential

Commission

to

empowered

Act,

risks

current

Interstate

the

of

bonds

railroad

realistically related to the in¬

herent

guar¬

enacted

and

for

2 With

Goodbody & Co.
To Admit Reilly

'

present time, they would

Interstate

the

was

'

quotations

much kept pace with the fortunes
of the individual carriers. At the

borrowing from

of

Act

Part

loans

figure of $1,600 billion at

a

31, 1955.

Market

railroad

Commission

Interstate

Louis

Norfolk

roadway

August, 1958 by the 85th Congress.

was

York,

(Nickel

restricted

Commerce

St.

Pacific.

Merger

in

obligations,

loans

banks.

Pacific,

progress.

New

been

Under

Status:

with

Dec.

stocks

Commerce

Railway.

Milwaukee,

be

financing during the current

stock, on the one
hand, to Illinois Central and on
other

remainder

equipment

Nashville

&

will

locomotives

sum

and

Excepting for equipment ex¬
penditures, which have been fi¬
nanced largely through the sale of

to

Line merger, to compel Atlantic
Coast Line to sell its Louisville

;

the

this

cars

facilities.

asking

are

InterCommerce Commission as

condition

a

and

of

in

41

—

(Special to The Financial Chronicle)
FRANCISCO, Calif.—Samuel
Statler, Jr. is now with Sutro SAN MATEO, Calif. —Edwin E.
is
now
affiliated
Co., 460 Montgomery Street, Hendrickson

new

members

cre¬

Pacific Coast Stock

of

the

New

York and 'with
Kidder, Peabody & Co., 420
Exchanges. He South Ellsworth Avenue. He was
Murphey
Favre,
Inc., was previously with Pacific Coast formerly with
Shuman, Agnew &
and
Eastern
Building, Securities Company.
Co. in charge of their local office.
pioneer Pacific Northwest invest¬

to

ated

by
Spokane

compared

ment banking firm. Elected
VicePresidents, to fill the new posts,
are

A.

Leonard H.
Aspinwall, Loyd
Bury, and Edward E. George.

All

three

ated

the

and

years

have

men

with

are

well

Pacific

Northwest
investment circles.

Clark, Dodge & Co.

In

Incorporated
V.

ESTABLISHED

.

vestment

1845

'

.

general

DISTRIBUTORS

Investment

in
and

Securities
and

in¬

phey

Favre
and

BROKERS

Composite

sponsors

Composite

Bond

Service to

and

Unlisted

Fund, two open-end mutual

!

v

Granbery, Marache

Trading Department..

Dealers

through

our:

Syndicate Department...

To Admit Claiborne

AVE., NEW YORK

NEWARK

its

15

known

financial

investment funds.

Exchange

61 WALL STREET, NEW YORK
410 PARK

to

UNDERWRITERS

associ¬

some

banking business, Mur¬

Fund
Stock

Members New York Stock

addition

been

company

LONDON

Granbery, Marache &
Co.,
67
Wall Street, New York
City will
Claiborne, Jr. to part¬
nership on Jan. 2.
admit J. T.

Badgley, Zwiebel
Hill, Darlington Partners

NEW

LEE HIGGINSON

YORK

BOSTON

CORPORATION

CHICAGO

MEMBERS

New York and other

Investment Banking Service Since 1848

Principal Stock Exchanges

SEATTLE, Wash.
Edwin
M.
Badgley and Gordon A. Zwiebel
—

have
as

joined
Stanton
Frederick
resident partners of the Seattle

office

of

Hill,

Darlington

Grimm, 1118 Fourth Ave.

Underwriters

•

&

!
Mr. Badgley is manager of the
Seattle trading department. Mr.
Zwiebel is sales manager.

Distributors

.

UNDERWRITERS AND DISTRIBUTORS

CORPORATE FINANCING

State, Municipal and Revenue Bonds

Inv- Management Corp.

•

(Special to The Financial Chronicle)

DENVER,
Colo.
—
Investment
Management
Corp., 818 Seven-*
teenth St., is engaging in a se¬

Corporate Securities

curities

business.

Edward

M.

Officers

Mabey,

SECURITIES

are
•

President;

Eugene A. Jones, Vice-President;
Owen W.

MUNICIPAL AND CORPORATE

Bunker, Secretary, and

PRIVATE PLACEMENTS

Richard W. Haas, Treasurer.

Crowell, Weedon Adds

J. R.WILLISTON & BEANE
ESTABLISHED

(Special to The Financial Chronicle)

1889

*

Members New York Stock
and other Leading

TWO

LAGUNA

Exchange

Stock and Commodity Exchanges

BROADWAY, NEW YORK 4, N. Y«

Tucker has become affiliated with
;
.




Chicago

Plainfield

New York Stock

Crowell, Weedon & Co., 209 Ocean
Avenue.
Gordon

New York

BEACH, Calif.—Eugene

He

was

formerly

C., McCormick

prior thereto

was

local

for Diversified Mutual

Inc.

NEW

with
and

manager

Funds, Ltd.

Members:

Exchange

Los Angeles

American Stock Exchange
YORK

-Philadelphia

,

Pittsburgh

42

(2422)

cumulation,

under
Investment Plan.

Report of IB A Investment
Companies Committee
Robert

E.

Clark,

Vice-President of

lock,

Ltd.,

Executive

Calvin Bul¬
York City,

New

Chaired the Investment Com¬

Committee,- and pre¬
the following Report

panies
sented
to

the Convention:

The
of

Investment

While

ago.

birthday cards
salutes,
the
a nniversary
should

on

Nov.

no

one

fired

or

1, 20
sent

44-guh

u

For

this

still

Act

in

assets,

are

panies

are

billion

at

ship.
by

of

end

the

by

More

this

an

and

im¬

an

than

one

investor

investment

of

panies in his

or

her financial plan.

after

This

20

eventful
consti t
c o n

as

which

years,

u

t

meet the needs of

E.

Clark

rapidly grow¬

a

ing industry.
Present

of

the

to

to

106

Size

far

more

portfolios and the effect of
such transactions in the aggregate

not

on

nels.

ownerships

only

industry, in contrast

is

enough

slightly

r.

increased

to

estimated

an

in

industry is about: the
1959:

same

namely, 5.4% of those

one

should-

the

fact

-

succeeding

shares

Closed-end
are

been

The

number

chases

made under

were

cumulation " plan
other

words,

number

of

not

„

new

only

In

the*

are

shareholders

new

.

ac¬

accounts.

in-;

creasing substantially, but almost
one-half
of
them
are
planning
further purchases in the months
and years ahead.

Briggs, Schaedle & Co., Inc.
STREET, NEW YORK 5

Results

Second,

been

course,

not,
tabulated,

fully

been

TELETYPE:
N. Y. 1-2056

BOwling Green 9-5600

nine

was

—ranging in time from one week
six

to

months—investment

managements
purchased
substantially more securities for

pany

portfolios than

Bankers

Acceptances

it

is

-

is

Distributors

•

EFFECTIVE
IN

•

important

DISTRIBUTION

UPSTATE

NEW

of

63

common t

that

estimated

underscored

that

on

shares

reason

for

com¬

panies' business in 1960 is because

31. balanced

funds,

public

drop

1%

"unrestricted

of

of only

average

an

registered.
These average figures, and* again
we call your attention to the
great
contrasts in
individual perform¬
ance, may be compared with the
was

results.of;a general market indi¬
such

cator

as

the

Dow-Jones

In¬

volume

tne

is-beeoming
able

is

interest

the

most

of
a

their

transactions

matter of consider¬ :

(I

am

not

would be
view

tively
have

sure

that

accurate

word) to
bodies on the

heavy

modest

is

one,

millions

dividends
indeed, in
share¬

of

the

rela¬

investment

they

involved

on

It

a

the

of

holders

and

the average.

report that
Tax on the
regulated in¬
vestment companies was reduced
to the level prevailing prior to
1958 and now is comparable to the
rate of transfer tax payable by an
investor purchasing individual
corporate stocks directly instead
of through an investment com¬
the

gratifying

Federal

to

Stamp

issuance of shares of

pany.

stressing

this ohase of the investment

investment company

'

investment

these

returns
individual shareholders. It is
pleasing to note that the educa¬
dustry generally has been helpful.
burden of a withholding tax

Legislation and Regulation
Another

stock

down

1960.

The

several

for

policies"
only 7% on the aver¬
age. A
group
of 20 funds spe¬
cializing in growth stocks declined,
only 3% on the average, and for

funds

Dealers

—

value

set

in

enacted

tional effort by the securities in¬

been, ways.

by, among others,,.
Arthur Wiesenberger & Co. This; ;
study indicates that per share as¬

were

Underwriters

have

and

by

sold.

were

but from the standpoint
IBA, it is per¬
haps especially important because

be

results

SEC,

dividends reported on tax

com¬

on

months

published

the

additions, * the industry,
through its National Association,
has opposed amendments which
would appear to restrict the ex¬

must, of course, be
are held by nearly 200 individual
the caveat that in¬
investment companies with inde¬
vestment objectives and types; of
managements
pursuing
securities held vary greatly among' pendent
differing objectives in different
investment companies. However,

United States Government Securities

by

StilL on thdi;Federal> level, the
1 This study conforms to the pat¬
tern which has appeared in every ^investment companies have /been
previous study of this kind. In the cooperating with the Treasury De¬
seven
periods of decline in the partment in its effort to close the
marketplace since World War II "gap" between dividends paid and

records

predicated

proposed

structive

period,

by 134 open-end in¬
companies,
98.4%
of

Committee feels that the* companies as a group now own
4.4% of the outstanding New York
game is sufficiently far along to
Stock Exchange listed stocks, a
be able to report very satisfactory
slightly larger percentage than
records for those who owned in¬
was the case a year ago. It should
vestment
company
shares.
AIL
such

mon¬

while several appear to offer con¬

but your

•TELEPHONE:

of

Amendments to the 1940 Act have

of members of the

The scoresheet for 1960 has
of

a

the contribu¬
companies in
this field. New proxy rules with
respect to investment companies
were
promulgated early in 1960.

reasons,

to results.

as

„

asked for and will receive

total

This

.

com¬

The Commission on Money and
Credit, which was established-to
study, the entire financial struc¬
ture
in
the United States, has

lion of sales.

more

Here

this

In

management

open-end members, show
purchases of $255 million ercise of investment management
sales of
$199 million functions and to circumscribe the
from? the portfolio. For common
areas from which directors of instocks alone, the figures were $209 .vestment ' companies
could
be
million of purchases and $144 mil¬
drawn. No legislation in this area

ac¬

than
interesting
these pur¬

by
is an
Some 3G0,000 of

650,000.

8%.

of

total

-

of shareholder

increased

counts

most

popular securities for periodic ac-

in 1960.

by their', portfolio
transactions,
exerting downward pressure on
common
stock
prices generally.

investment

and'

through the conduit of the invest¬
ment company

concerning

by

On the state

level, close liaison

has been continued by

investment

companies with the North Amer¬
ican Securities Administrators, an
area where the IBA State Legisla¬
tion Committee has been so effec¬
tive. Regulations in various

states
companies
involve, among other things, dis¬
bigness, even spelled with ,a lower closures in prospectuses with recase
'b,', always invites inquiry. aspect to cumulative voting rights
The
investment companies have in California, certain undertakings
certainly been a prime object of with respect to director activities
interest inquiry and publicity in in Illinois and, on the definitely
regulatory

Federal

and

state

levels

directed to investment

where

.

this

area

in

1960.

,

-„

.

-

.Continued

on

page

YORK
\ t • i"

PRIVATE WIRES TO
ROCHESTER'S OLDEST INVESTMENT FIRM

Glore, Forgan & Co.
Chicago

GEORGE D. B.
•

Dallas

Underwood, Neuhaus & Co.

EST 1903

;•

Houston

Crowell, Weedon & Co.

lOO POWERS BLDC.t
ROCHESTER, N.Y.
LOCUST

MEMBERS

2-5200

OF

THE

BELL

•

NEW

4)

'

TELETYPE

YORK

STOCK

.

_

RO

*

Hess, Grant & Remington, Inc.

Philadelphia

"

Reinholdt & Gardner

Branch

offices in:\

SYRACUSE

•

BINGHAMT0N

St. Louis

♦

BATAVIA

•

0LEAN

*

•

HORNELL

G.A.

&

Co., Inc.

Teletype NY 1-1605-1606-1607

Los Angeles

180

EXCHANGE
.

:

Schneider, Bernet & Hickman, Inc.

BONBRIGHT&CO.

t

-

52 Wall St., New York
5, N. Y.
WHitehall 4-4970

^

'

Stewart, Eubanks, Meyerson & Co.
San Francisco

Trading Markets in Public Utility, Natural Gas and Industrial Securities
\




a

panies,

NAIC

by the American
American industry

in

' ',
consideration

ograph

vestment

therefore, $1.2

V;.

tion

declined

invested

public

not

actively traded by mem¬

ber, firms, but are among the

basis,

<

under

erations

transactions

billion additional dollars will have

distributed

companies

net

a

is

In
I960,:, investment company
purchases for their portfolios are
estimated to be $3.4 billion and
sales at $2.4 billion. The value of
common stocks alone was $2.9 bil¬
lion of. purchases and $2.0 billion
of sales. This is scarcely evidence
that* investment companies were,

contrary.
special study was made dur¬
ing the month of September when
the Dow-Jones Industrial Average

bring about high¬
er dollar redemptions, as investors
in greater-number achieve their
investment objectives; •
On

securities markets,

A

years

case

supplemental study by the same
agencies relating primarily to op¬

Quite - the

for

allowance

make

that

'

,

There

themselves,

previous studies of this

kind.

pany

conditions

market

to the purchases and
made for investment com¬

the

companies

in several

given

sales

than

less to be considered

unsettled

fact.

44 WALL

less

should normally

through investment dealer chan¬

in¬

other institutions which, while

This

total net assets. In this connection,

com¬

pected that much information of
value to the public and the in¬

thh record $2.3 billion of 1959, but

as

people than

interesting to explore the

shares.

of the

and will meet
great and direct

Investment

their

have

one

largest equity

of

com¬

is

tion

—

institutions,

among

met

is

not

$875 million from $786 million in
1959. What is more important, the
ratio of redemptions to net assets

have
become
important
factors not only in the welfare of
millions of investors, but in their
impact on the entire securities
field
underwriters, distributors
and brokers. Of the 156 open-end
member companies of the NAIC,

companies represent

of American

year

panies

lation, of its
adaptability under enlightened
regulation, and of its flexibility to

Today,

have

before.

ever

Robert

many

tests

concern

legis¬

vestment

of strain
companies
other elements in
a

The results of this

ex¬

It

will result. Sucn has been the

have

been

whole investment company struc¬
ture
and
methods of operation.

study have

Redemptions' during 1960. will

financial life. How these

these

sound¬

as

so

panies

e s

evidence of its

ness

for

our

vincing

basic

has

1940

yet been made public but'it is

prevailing.

and test for investment

the

vestment

1960 Tests

amendment

of

with size. It is a volu¬
examination covering the

when there has been more atten¬

the

stands without

section

Act dealing

don't think there has been a year

anything but reassuring in view of

com¬

appropriate
minous

portfolio

to investor

as

to

all

facets of the investment company
industry, as, authorized under an

acceptance.
Investors during 1960 will have
purchased
$2.1
billion
in
new

First

representing
estimated 2xk

a

activities in which the
investment companies engaged in
order to compile these results. I

r

Expansion

year.

conduct

Transactions

Portfolio

,

of
Pennsylvania
thorough study of

University

the tests of 1960 met

were

this industry? It is important
explore this in three sections

to

xt

capital gains, this is only to
expected in a period of declin¬
ing common stock prices.

;

,

change Commission has contracted
with the Wharton School of the

•

be

—to

the United States today

shares

subs tantial

,

"As previously reported by your
Committee, the Securities and Ex¬

.

from

expansion, as to management
Corn-, results, as to new developments.
estimated to reach $18

individuals

in

•

Thursday, December 15, 1960

payments by these
companies, on the whole, remain
close to the level
of 1959, and
while there is likely to be some
reductionin
their
distributions

member¬

your

.

Dividend

Investment

of

investments

in six

•

How

of

this,

14.6%.

composite of facts and

a

cross-section

a

shareholder accounts

has

your Invest¬
Committee be

views of individuals representing

These companies have five million

vestors.

that

proper

Companies

report is

members of the National

are

in

.

.

Average which declined
nine-months
period by

dustrial

Monthly

vestment company operations. It
is so constituted. Therefore, this

primarily with creditor
type securities. They own an esti¬
mated - 3,500
security issues
or
some 2,000 corporations.
Assets of the 187 open-end and
closed-end investment companies
that

is

the

representative of all facets of in¬

concerned

million

n-

noticed.

larger

It
ment

pressive group of institutional in¬

not

pass

materially

Association

Company Act

1940 became law

years

Chronicle

The Commercial and Financial

58

Volume

192

Number

6012

.

.

The Commercial and Financial

.

Chronicle

(2423)

financial

Report of IBA Insurance

ally
of

Securities

ance

Committee

which drew up the following
Report for the Association:

they

of about 50%

to 60%

with

companies

place

insurance.

to

liabilities

total

tion

the

of

as

which

Investors

interested

are

in

lationship of total capital

paying dividends out of net
investment income to the extent
and

the

likewise

Shelby Cullom Davis, whose which there is a substantial
amount of reinvestment of earn¬
firm in New York City bears\
ings. The generally accepted prac¬
his name, headed the Insur¬
tice of

gener¬

frequent comparisons
relative
strength of the

various

Securities Committee

institutions

make

the

of the latter,

each

d

ately

capitalized,
and

fire

alty

a

have

need

sufficient cap¬

of

(policyhold¬
ers'
surplus)

fire

stocks.

Of¬

d

e r wr

un-

losses

The

risk

the

fact

stocks

are

concurrently.
arises

that

policyholders'
panies'

in

measuring

surplus,

carried

financial

chiefly
common

the

on

com¬

statements

»at

prices.

tant

.

.•

t

.«

'« **'•

'f *

»'

y

'

*

'

alty insurance industry is

one

in

of

fire -and

stock

companies

is

an

impor¬

standpoints.
Policyholders,
stockholders
and
managements of these companies
all

have

cerned.

reasons
for being con¬
Policyholders want to be

that
and

their

have

insurers

sufficient

business

new

also

It

arises

which

by

from

the

premiums
in the de¬

computed

are

the

on

"statutory

under¬

in

reflected

increased

liabilities

(unearned premium reserve) and

from several

one

sound

By its nature, the fire and casu¬

funds

casualty

certain
market

„

immediate

an

writing profit." Increases in pre¬
mium
written
are
immediately

The question of the adequacy of

capital

secu¬

rities market
from

■'

•;

placing

enter

Shelby Cullom Davis

a n

market

i

-

are

earnings (premiums earned)
the time for which the

only

as

insurance

contracts

writing

Thus

losses

profitably.

r

the

fire

it

is

easy

to

com¬

panies should be adequately capi¬

these

been
of

while

on

installment

basis

books

at the

written.

was

time
the

If

the

shown

the

is

it

unwise

conclusions

the

capital funds of an
composite figures

those
the

shown

ratios

in

the

premium

as

occurred

has

issued

which have

Record

strong demand

a

and

when

and

been referred

to, the

casualty companies tend

to find their need for new capital
greatest when their underwriting

results

are poorest and when de¬
clining equity markets are shrink¬
ing policyholders' surplus.

Another

re¬

the

fire

bulge in financing

and

by
insurance

casualty

companies came in the 1953-1955
period when a total of $139 mil¬
lion

was
raised
by these com¬
panies. Here again the industry's

in

substantial appreciation
in investment portfolios and ap¬
proximately $572 million of new
capital financing. Over $20'0 'mil¬

be

fire

smaller, and are now con¬
siderably less than they were 15

This

squeeze

and

grown

ago.

of

proposed
earnings
earning prospects are highest.
However, for the various reasons
to

have

volume

half

for the type of securities

of

to

last

aggravated the
on
the fire and

is when there is

table,

in relation to liabilities and in

the

Financing

policyholders' sur¬
plus to total liabilities and to total
premium
volume
for fire
and
casualty companies are lower than
they have been in the past. In
other words, the margins of equity
lation

in

Ideally, the time to do financing

or

such

loss

casualty companies.

draw

above

pres¬

from increased

market

capital

industry

from

under

the

1946 and into .1947

respect

to the adequacy or inadequacy

was

from

and

war

even

to

with

surplus

both

stock

by reported figures.

While

definite

time when

a

arising from the inadequacy
of rates under sharply increasing
inflationary forces in the coun¬
try's economy. The decline in the

greater deterioration than is indi¬
cated

at

came

inflationary pressures
their
height.
Policy¬

ratios

policy
policy

an

has

financing
penalty attached to the large in¬
crease in premium
writings after

followed,
the
ratios
of
policyholders' surplus to total lia¬
bilities and to premiums written
have

at

sure

rather,

latter

war

-

were

than entering the entire unearned
premium reserve as a liability on
the

as

figures

financing

company

holders'

had

an

years,

spurts. The $158 million
capital raised in the 1946-

1948 period

casualty insurance com¬
not adopted a policy
accounting for term contracts

of

in

new

post

surplus
if most

years

five

a

unprofitable underwriting results
in

the

.«uuj

.

inflationary period
..

Continued

on

of

the

page

it is difficult to establish

talized,

in measuring

rr

\\

the adequacy of the

In the

ally accepted test ratio has been

envy.

of

dollar

policyholders'

of the leaders

one

capital funds of fire companies
and
casualty companies. In the
case of fire companies the gener¬
one

casualty

increased

have

last

in the foregoing table that since
the end of World War II, fire and

and

panies

spite of

relatively

1945

policyholders'

during

years

precise tests which will prove
conclusively that one company has
enough
capital and another is,
Two
different
undercapitalized.
test ratios have been widely used

Shields & Company

less

'A;

that fire and casualty

prove

1

has risen
times.
Actually

would

and

more

since

the

It will be noted from the

surplus

three

liabilities

destined to work

"

While

contingencies. Savings banks and

though

even

business is

new

out

-

mar¬

gins of safety to meet all possible

written

are

in periods of
rapidly increasing volume there
may be
sizable statutory under¬
along.

runs

times

than

would

velopment -of

Adequacy of Capital Funds

iting

possible

.

less

which

earned

new offerings
casualty
insurance
stocks
make
their

four

"financing penalty." This
penalty arises from the insurance
companies' accounting practice
involves

to

0.755

to

in

shown in Table II.

1, respectively.
In effect, net premiums
written,

were

method

capital tends to in¬

declined

policyholders'

insurance

of

1

to

over

books.

appearance.
,

losses

and

company

withstand

possible

new

again
0.945

raised

in 1955,
1959 the ratios

and 1.0 to

the

in

sharply, and

crease

ital : resources

to

for

had

and

lion of this total amount has been

new

again

casualty companies have increased

charge against surplus of the ex¬
penses and commissions incurred

ness
is
accompanied
by larger
losses, either on investments or
from underwriting operations, the

casu¬

1

and
rose

and total liabilities of the fire and

so-called

com¬

the increase in the volume of busi¬

company

should

casualty insurance

stocks to raise new capital.
However, when the rate of growth
is especially rapid, particularly if

be

to

e q u

and

pany

Thus, in

order
a

fire

activi¬

these

ties.

of

to

they

indica¬

stewardship of stockholders' funds,
balance
of
net
investment
in¬
must be certain that capital funds
come plus all
underwriting profits
are being maintained at safe levels
makes most fire and casualty in¬
New Capital
Financing by Fire
in relation-to liabilities.
surance
companies, under normal
And Casualty Insurance
Rapid increases in the -volume
conditions, self-financing. In other
Companies
of business placed on the books
The fire and casualty insurance words, when the industry is ex¬
create • capital problems for fire
average
growth and
business is dual in that it involves periencing
and ' casualty
companies
sooner
reasonable
underwriting
profit¬
underwriting and investment
than might be the case if these
functions. There are risks of loss ability, there are likely to be few
offerings of additional shares of companies were not subject to the
from

0.803

strength and investment merit of
various

market

investment

ficials of the insurance companies,
in
performing their function of

retaining in the business the

stock

additions

but by the end

resources

one

relative

re¬

rising

a

capital
to

43

field

of

underwriting, that's

a

reputation to

sur¬

plus for each dollar of unearned

Distributors

Underwriters

of

premium reserve, while for casu- i
alty companies the ratio used has
been
one-half dollar of policy¬
holders' surplus for each dollar of;
premiums written. As a partial

Because

indication of the relative adequacy

firms

of the

companies,
have

undoubtedly

Municipal

financial

to be

these ratios
had
value.:

statements,

FOREIGN

actual

and casu-;

V

relationship be¬
capital and

be used

SECURITIES

as

a

thing, it takes capital to meet this chal¬

—

many

millions of dollars.

large and experienced staff

a

soned

personnel to

might

arise in its

For

test of the adequacy

a

looking into the merits

shortcomings
as

of

any

policyholders' surplus to
liabilities for stock fire and

These
that

of

are

over

a

proved ability to

on any

given issue.

just some of the reasons why we're pleased
the years we

too have come to be reckoned

"one of the leaders".

as
.

s

vl

^

casualty companies over the past

>1

'

'

•

'

MODEL, ROLAND & STONE
120

Exchange

5, N. Y.

Teletype NY 1-2525

London: Northgate House,
20-24 Mooregate,

London, E. C. 2

in

Table

I.

c

Merrill Lynch, Pierce,

Surplus Ratio Trends

Private




Teletype to London, England

*

In 1945

a

ratio of policyholders'

surplus to total liabilities of 1.0 to
1 was average for fire and casu¬

companies, and a
policyholders' sur¬
plus to net premiums written was>
representative. By the end of 1948
alty

Fenner & Smith

INCORPORATED
Members New York Stock

70

insurance

1.3 to I ratio of

Paris: 370 Rue St. Honore

'

compiled

as

shown

WOrth 4-5300

Broadway

New York

American Stock Exchange

Industry aggregate fig-;
by Alfred M.
Company for this period are

years.

ures

Best

Members
New York Stock

15

sea-

geographic and numerical sales

called for

coverage

single

funds of fire and casu¬

the capital

total

enough

problem that

test of the adequacy of

a

alty companies, it may be of in¬
terest to study the trend of the
ratio

—

any

Buying, Syndicate, or Sales

distribution,

proper

both the

ensure

casualty companies.
Before

with

cope

third, it demands unusually extensive facili¬

for

ties

capital funds of both fire and

and

few

V

Department operations.

potential claims of

or

policyholders and others, it is sug¬
gested that the ratio of policy¬
holders' surplus to total liabilities

ratio

re-

another, the underwriting firm has to main-,

For
tain

tween the stockholder

of

meet.'

one

lenge

there seems

for both fire

indication of the

Banks9 Brokers and Dealers

capital

of consolidated

alty companies. Since the purpose
of such a ratio is to provide an

For

can

For

growing need for a single

a

test ratio

the

often today, the

amounts, present a challenge in financing that

multiple line insurance and

toward greater use

Securities

more

these ratios were down, to 0.587 to
1 and 0.696 to

1, respectively. With

,

quirements of American industry run to staggering ;

However, in view of the trend to¬
ward

and

equity cushion of fire and

casualty

Industrial and

more

<

;

•

-

PINE
'■

..

;

i

'

*

132

Exchange and all other Principal Exchanges

STREET, NEW YORK 5, N. Y.
,*

i

-,

offices in U. S., Canada and abroad

74

^

a^ttwaxDaw*. i-.MA-u.ii

44

.

ts .-* „»

7...

.

.:•',.!«...

■■'•wii'

•'■>

.

■

»»«•

"■■'■'

»■'•

The Commercial and Financial Chronicle

(2424)

buildings from a municipal au¬ der using supplemental coupons in
thority. Since, many of the mu¬ such situations bids on an entirely
nicipal authority bonds must be different basis with an advantage

V.I' *

'*

L

Thursday, December 15, 1960

,

V

Walter H. Steel
•

discount

a

at par

or

be;'

to

those

over

bid without sup¬

who

&

Drexel
' New

'<

Co.

f-

i•

-

-

York, N. Y.

,

sold at

*<

•

,

r; •

7 7

•

v

.

George B. Wendt

marketable,.

it • is
necessary
to plemental coupons.
^
Since supplemental coupons on
purchase them from the issuer at.
a discount.
The amounts paid by municipal
bonds are- subject to
a school district as discount on a
the criticisms indicated above and

National

First

Chicago, 111.

*

Bank of

7

.

And Bond Sale Procedures

issue

bond

In

reporting on the use of
supplemental coupons, in his
capacity as Chairman of the
Subcommittee for Liaison and
Bond Sale Procedures, Wal¬
ter W.

Craigie, Partner, F. W.
Craigie & Co., Richmond, Va.,

advised

Convention

the

as

jollows:
Supplemental (or "B") coupons
simply additional coupons at¬
tached to municipal bonds cover¬
are

ing the
one

of the

interest

same

periods as

uations: '

The
supplemental

receive at least par for

suers

bonds

and

callable at

have
would

(2)

or

the

origi¬
delivery

the

at

by

the

dealer.

The

from

coupons

the
rate, the bonds
than

higher

coupon

at the

dealer

A

bidding

such

out

or

proceeds

bonds

bonds, requiring a bid of
par or better and salable only at
a discount, would have no margin
of profit and would not bid with¬

pay¬

sold

is

discount.

a

on

un¬

date

such

would have to be sold to investors

is¬

ment

sale

of

If the market in¬

for

rate

statutory

suer, and are
either held by
til

states the law re¬

some

time

terest

of

the dealer

supple¬

without

quires that bonds be sold at par or
better and that the coupons be a

are

the

a

bid

not

dealer

from

par

discount, would
margin
of profit
and

In

Walter W.

Craigie

device

some

mental

usually provide the deal¬

er's profit in the sale of the issue

the

(3)

In

coupons

have

case

can

re¬

and

provide

one

state

a

statute
by

certain

items

to

au¬

the

school

districts which have leased school

the

because

school

district

reimbursement

receive

ment of the

supplemental

t

pro¬

bidding requirements,

or

necessitate the use of sup¬

which

plemental
where

be changed
that bids can be

coupons,

possible

submitted

pay¬

statutory

Impractical

r(l)

visions

may

for

sale, we recommend that:

public
■

a

so

regular basis with¬

on a

coupons.

per annum

to be determined

same

of

determining the winning

to the issuer (such cost
by deducting the
total amount of permium bid, if
any, from the aggregate amount
of interest upon all of the bonds
until their respective maturities,

^

Respectfully submitted,

than

suer

interest

bid based

a

to

cost
on

a

San

use

saving

real

any

the

firm's

classroom

7

.

,

country

York

Call

na¬

training

V-7'

7?

four

are

They

area.

in

the

Mc-

are:

Richey, assigned to One Wall

Thomas J. Murphy, as¬
to Brooklyn; Gerald E.
Jackson, assigned to East 149th
St., the Bronx; and Ezra Mintz,
assigned to 72nd St. and Broad¬
way office.
'
;

-

Co.,

Two With R, E. Kohn
NEWARK, N. J.—Josef Karpihski

v

v

and Theodore R. Wachsman

Cushman

associated

become

Francisco, Calif.

E.

Kohn

&

Co.,

members of the

Exchange,
tatives.

McGee

Mr.

W. Pressprich &
New York, N. Y.
R.

Co.

j

with

as

:rr\

20

Richard Morey

7

Walston

&

St.

the

head

Delmont K. Pfeffer

may

First National

Of New

7.7...,

City Bank

7
was

' 7

in

Walston

■../,

formerly

Co., Inc., in East

Karpinski

sociated with

Louis, Mo.

St.,

represen¬

•

Wachsman

Mr.

A. G. Edwards & Sons

Clinton

customers'

•

have

Richard

$Tew York Stock

Orange.

a

with

7,

has

7.

'

been

as¬

Cosgrove & White¬

New

York

&... Co..

Inc.

City
.in

and

...East

Orange.

York, N. Y.

*

interest

in

because the formula does not take

into

UNDERWRITERS

—

DEALERS

—

DISTRIBUTORS

account

the

of

the

"present value"

large interest payments at

early maturities.
the

Since

State and General Market

Municipal Bonds

„

total

LATIN AMERICAN

the

of

regular
coupon and the supplemental cou¬
pon for any interest period usu¬
ally must not exceed prescribed
interest
rate
limits, it is often
necessary to attach supplemental
coupons, for
several interest pe¬

Securities and Investments

riods to obtain the desired amount
from

such

supplemental coupons.
proceeds from sup¬
plemental coupons a dealer either
To obtain the

(a) holds them to payment date

Geo. B. Gibbons &

Company

INCORPORATED

7%

below

their

New York

Teletype NY 1-199

5, N. Y.

Telephone HAnover 24474

Established 1888

value; to
allow that margin of profit to the
purchaser of the coupons.
This
the

Pine Street

Frederic H. Hatch & Co.. Inc.

face

discount reduces the
20

or,

(b) sells them. If the dealer sells
the
supplemental coupons, they
are usually discounted from 5% to

Established 1914

dealer

obtains

plemental.

amount

from

coupons

the

and

.

72

WALL

Telephone:

STREET

NEW

WHitehall 4-2400

amount

tained from such coupons.

ers

from

supplemental

NY 1-897

that

must

The proceeds received

5, N. Y.

sup¬

be

PANAMA CITY

determining
profit to be ob¬

of

YORK

Teletype:

CARACAS

•

•

taken into account in
the

:

SAO PAULO

•

LIMA

RIO

DE

JANEIRO

BUENOS AIRES

•

.

by deal¬

coupons

do

not constitute

tax-exempt income/
but constitute ordinary taxable in¬

ORIGINATORS

•

UNDERWRITERS

A^tt;

DISTRIBUTORS

do

not

enue

new Jersey
'V.

to

come

ancLf
authority revenue

dealer, because they
the dealer's profit and
represent interest (Rev¬

mental

are

criticisms

of supple¬
(a) They* com¬
mathematical compu¬

coupons:

plicate

the

tations

in

submitting bids and in

determining
They
who

do

the

nally
on

bid.

best

confusing

are

attached

to

why

coupons

the

(b)

investors

to

not understand

plemental interest

not

Specialists in

Ruling 55-73, issued in 1955).

There

Municipal

the

represent

sup¬

im Investments

origi¬

bonds

are

the bonds in the hands of

the investor:

(c) They permit the

Bureau of Internal Revenue to tax

ordinary

as

Boland, Satfin,

which

Gordon & Sautter
Established 1920

"interest"

(d)
a

35 WALL STREET, NEW YORK 5, N. Y.




Bell

WHITEHALL 3-3414

System Teletype—NY 1 -535

are

income

paid by
on

a

municipal

They sometimes

bid in

of sale

an

or

amounts

the issuer

are

as

bond,

used

in

issue where the notice

bid form does not make

it' clear

whether

would be

permitted, and the bid¬

such

coupons

•

Street;
signed

White, Weld & Co.
New York, N. Y.

provide a lower net interest cost
as computed by this formula, it is
questionable whether they pro¬
vide

SALE PROCEDURE

the

out
New

Lloyd B. Hatcher

normal

arrangement.
While
of supplemental coupons

coupon

of

history
formal

program.

Bank of America N.T. & S.A.

is¬

the

-

Craigie, Chairman

Alan K. Browne

determining net interest cost,
use
of supplemental coupons
early maturities and low
coupons
on
the long maturities
(like an offering scale with high
coupons
on
the short maturities
and low coupons on the long ma¬
net

the

in

tional

Richmond, Va.

.the

with

W.

F. W. Craigie &

the

bid

Representatives from its account
executive /career
training
pro¬
gram, one of the largest classes

,

for

a

BOND

Walter

per

provides

basis.

AND

bond per year by
10 to get the net interest cost rate
per annum).
Under this formula

turities)

forms

whether

SUBCOMMITTEE FOR LIAISON

the net interest cost in
dollars by the total bond years,
and dividing the resulting net in¬

on

bid

or

'

dividing

cost

sale

statement

bid is the lowest net interest cost

terest

I. duPont • & Co., 1 Wall
St., New York, nation-wide se¬
curity and commodity brokerage
firm, has graduated 27 Registered

necessity for using supple¬

a
specific
supplemental
coupons will be permitted, so that
all bidders will be bidding on the

basis for

duPont Representatives
Francis

Among the registered represen¬
mental coupons.
assigned
to
Francis
I.
;
:
! • .VV-7 tatives
-duPont
& Co.'s 78 offices through¬
(2) There be included in notices
out the

(4) In competitive bidding on
municipal bond issues the usual

lower

reimbursement

for

state

Supplemental

coupons

a

profit for the bidder.

thorizes

of bonds.

supple¬

as

such

discount

the

cover

such

In

coupons.

supplemental

supplemental

the

theory that they

widely used in the bond issues of
municipal authorities in that state

par

no

the

on

avoid

bidding
gain an

represent the interest rather than

Bonds callable at
must ordinar¬

par.

specified rate.

nal

their

able items

for

principally either (a)
impractical statutory or
requirements ;or (b) to
advantage in bidding at

used

are

to

supplemental
treated as reimburs¬

are

coupons

ily be priced at a discount or at
par because investors will not pay
a
premium for them.
A dealer
bidding on such bonds, requiring
a bid of par or better but salable
only at

paid

re¬

However,' the;;

financing fee. Accordingly, sup¬
plemental
coupons
have
been

early date at

an

amounts

items.

that callable bonds be

ordinarily de¬
tached by the
at

/

(1) In some states there are
mandatory requirements that is¬

coupons.

time

-,

proceeds from
which provide the dealer's profit.

regular

coupons

:

1

mental coupons, the

more

or

principally in four sit¬

been used

not considered

are

imbursable

tffinc.
INVESTMENT

SECURITIES

Associate Members American Stock
Exchange

30 Broad

Telephone
WHitehall 3-9200

Street, New York 4, N. Y.
Teletype
NY 1-515

J

Volume

192

Number 6012

.

.

The

.

Commercial and Financial Chronicle
i

(2425)

formed

in

early

posed of

1960,

of

some

nel in both the

and

fields

com¬

the top person¬

municipal and

f

Drexel

at

White Sulphur Springs last May
As a result of that
Steel, Partner,
report and
and it has
the ensuing discussion
subsequently held no
among
the
City,
less than seven additional meet¬
membership of the IBA, a course
Special of action evolved which won the ings..; The fine cooperation and
Committee for Public Educa¬
concentration of effort
by all
blessing of the Board of Gover¬
members of this Committee have
tion on Municipal
Securities, nors. This program, less ambitious
been outstanding as attested by
than that projected
by the Stone
reported to the Convention as
results to date.
V
Vy
Committee, is now getting under
follows:
At this
way.
,

point,

For many years those of

securities

The

in the

us

business

New

of

ume

State

"

present

need

on

a

and

the

municipal securities.

understanding

through all media, including ad¬
vertising, planted articles, TV and
radio, inform the general public

apprecia¬

tion

of

many

fine in¬

the

vestment

tures

of

local

fea¬

of

we

t

a

Walter h. Steel

something
about it. Stud¬

ies

extending

nearly three
by a Subcom¬
The
report of that Committee, made in
over

made

were

mittee headed by Fred Stone.

1959,

splendid thesis

was a

business,
jected

a

its

:

are

and

M.

which

in¬

of

members

Fi¬

of

Special

for

•

.

of

gram.

Thus, there is

assessment

of the

cost

in

of

Committee

to

Co.,

has

by

annual

an

of

&

Special

8224

conducted

on

:

Banks and Institutional Investors

would

at the Annual Con¬
The first

•

.

/.■

-

The. best

a.

.•....

advertisement

the

New

under

newspaper

cluding
ing)..,

change—American Stock Exchange
;

b.

The

E.

issue

Newark

with

conducts a
investment-counselor

was

formerly

Direc¬

a

Vice-President

of

D.

firm.

15 at the Midland

Hotel.

In Investment Business

office

SPARTANBURG,
S.
C. — W.
Bryan Smith is engaging in a se¬

Build¬

of

management

curities
163

business

East

St.

from

John

offices

Street.

offer...

we

fifty years9 experience

underwriters,

over

dealers, and distributors of all types of securities.

as

public utilities

industrials

railroads

tax-exempts

financing

;

W. C.

or

issue
"

new

-

ad

or

the

BOSTON

would

Emanuel, Deetjen & Co.

IBA

in

award
be

each

presented

membership

for
in

each

PHILADELPHIA

,

«

in

firms
.

•

of

category

classes A

and another award

Teletype: NY 1-4176

to

distribution

state and municipal bonds.
One

SYRACUSE

•

new

format published

broaden

Broadway, New York 6, N. Y.

Telephone: BArday 7-8800

"give

the best

or

Exchange

Established 1909

..

sales promotion

brochure

-

115

concerning munici¬

away" used

ANALYSIS

Langley & Co.

;

direct mail promo¬
-/.'•■.

secondaries

Members New York Stock
....

The best

v

mergers

private placements

a

or

B

cate¬

gory would be

1929

MEMBERS
American Stock Exchange

:

in

IBA

or

E.

presented for firms
membership classes C, D

Complete details regarding the
contest

Commodity Exchange, Inc.

will

member

UNDERWRITERS—BROKERS—DEALERS

(5)

CORPORATE, MUNICIPAL & FOREIGN SECURITIES

UNDERWRITERS—DISTRIBUTORS—DEALERS

•

,

be

mailed

to

Industrial, Public Utility

each

firm.

and

Railroad

Research

and

studies'

by

Gene Becker looking towards
forts in the direction of news

ef¬

Municipal

SECURITIES

ar¬

ticles, radio and television and
preparation of promotional mate¬

New York 5, N.

rial helpful to the members, their

A

120 Broadway

E

■

Y. M

!

%

'

Telephone DIgby 9-0777

staffs and clientele.

Teletype: NY 1-1973

The
such

EMANSTOCK

co. J

fore

AFFILIATE:

EMANUEL,

'■!

1

10

TELEX: 2 41

...

;•

•

AVENUE

DEETJEN

BUILDING,

&

.

CO.

68




LA

GARE,

..

the

Program

Hemphill, Noyes C& Co.

is

LAUSANNE,

that

undoubtedly

confident,

Members

are

15

evident.

however,

Albany

-

>"•

••' *

...

SWITZERLAND

.TELEPHONE (021) 22 63 48-49

us

Chicago

and the program under¬

Lowell

way, ftiembers of the IBA will find

Syracuse

this endeavor most helpful in the
cultivation

of

new

BROAD

STREET, NEW YORK 5, N. Y.

that

Jonce our organizational pains are
behind

Principal Securities Exchanges

expended be¬

tangible results
are

consider¬

•

LTD.

NASSAU, BAHAMAS

REPRESENTATIVE'S OFFICE:
DE

of

able effort must be

We

BOOTES

scope

Cable Address:

and: broader

:

.

Altoona

Indianapolis

Taunton

Philadelphia

Trentort

Boston

Beverly Hills

Allentown
Harrisburg
Newark

Bell

Howell, and Philip S. Fogg,
President and Peter G. Peterson,
Executive Vice-President, of Con¬
solidated Electrodynamics Corp.,
will
be
guest
speakers at
the
luncheon meeting of the Invest¬
ment Analysts Society of Chicago

Registered

Brotherhood

:

best

idea

Los Angeles

INVESTMENT

'

He

Executive

Richard

advertis¬

pal bonds.:.".»'-y
c.

Midwest Stock Exchange

as

and

Winters, Jr.

magazine (ex¬

or

new

tion piece

Denver

San Francisco

New York Stock Exchance

Washington,

Chicago Analysts to Hear

Boulevard,

that

the

INCORPORATED

Established 1905

ESTABLISHED

of

.-y >

in

to

CHICAGO, 111.—Charles H. Percy,
President, and William E. Roberts

CITY, Kan. —H. O. Peet

new

is

made for:-

M°D ONNELL

250 Park Avenue

resident

a

con¬

from

run

Fi¬

1951

j

<

planned that separate
awards, where appropriate, be

VITAL

from

-

Sept. 16 of
through Sept. 15 of 1961.

this year
It

A

Reconstruction

J
<
•

annual

an

the

C., Mr. McDonald

there.

Co. has opened a branch

i

Sept. 16 to Sept. 15 of
following year, with awards to

vention of the IBA.

Uptown:

Corporation

vy-piu..

Harold

be presented

test

Detroit

of

nance

of

years,

Adminis¬

basis from

Institutional Research for

New York 5

trator

five

was

to

Sherburne, is
working out details but, briefly,
it is anticipated that the contest
be

and

Chairman

for

among

subcommittee, composed of Fred

will

senior

tor of Arkansas Fuel Oil Corp.

Forsyth

announced

George

and improve advertis¬
ing and sales promotion ideas. A
and

Mich.,

as

1953.

Stone, Jr.

KANSAS

stimulate

Stone

McDonald-

Securities

and

Commission

to be held Dec.

pro¬

Association

the

,

H. O. Peet Branch

in

contest

the

the

the

business

the

defray costs
the

to

member

Now

Representative

ing

Decision

by

of

Detroit,

served

a

D.

a

to¬

or

of

of

was

-

Woolley has become

an

kind

Co.

McDonald

the Municipal Securities Commit¬
tee and the Board of
Governors, to

*.•

Chicago

City Bank

CLAYTON,| Mo.—Roy W. Jordan,

plan for

no

any

dues

the

of

founders

firm

&

.

New York, N. Y.N

&

Committee, subject to approval o£

the

120 Broadway

■

Resident Partner of G. H. Walker

Program.

(4)

Specialists in Rights and "When Issued" Securities

Members New York Stock E:

'

.

each

amount

an

three-year period

estimated

members

v.

Co., Inc.

With g. H. Walker

Committee.

a

increase

Municipal Securities
•/*.,

Municipal

the

following which he

direct the

the

and

announced

Exchange Commission in 1947. He

Marine Trust Company of
Western New York

Special

the Board

been

The

the

was

the

staff,

wards

an

Underwriters and Distributors
and

the

Governors

initiate

Corporate

of

Governors

year

follows:

as

of

(3) Appropriation by the Board

more

The

Becker

Program in cooperation with other

important steps taken
thus far towards making this Pro¬
gram a working reality may be
(1)

Mr.

choice

sound

summarized

Fred D.

of

pointment

*

Bacon, Whipple & Co.
New York, N. Y.

mem¬

has
been
Crystal Oil

of

Bishop, President.

brokerage
Mr.

Corp.,

partner of thi$ firm until his ap¬

New York, N. Y.
Harold H. Sherburne-

Calvert, after sifting and in¬
terviewing some 30 candidates.

laws, practices
marketing procedures.

and

a new

s

The First National

staff, Mr. Eugene

His function will be to

of

v'

''

Becker.

Securities

motion

IBA

•

t

New York, N. Y.
Delmont K. Pfeffer

'

;

<

Corporation
,

and

and former

Company of Shreveport,

has
C.

One

and

often

programs.

the
and

the

presented by advocates of various
assistance

W. H. Morton &

it

Moore

First Boston

former

Securities

Director

a

Harold

Kidder, Peabody & Co.

Committee and of Messrs. Hanson •.

better¬

picture

and

La.,

■

New York, N. Y.
William H. Morton

Com¬

of Messrs/Hanson

unanimous

nally—cooperate in furthering the
excellent work already done
by
the IBA in improving the attrac¬
tiveness of security issues by pro¬

the

pro¬

of

program

distorted

Bob

York, N. Y.

Robert C. Johnson

Committee, as
Shepard of the

(2) The addition of
ber to

financing
of

programs

by

as

federal

The

problems,

possible

on

tensive and extensive public edu¬
cation.".-'

the

gree

-

tempted to do

years

governments

the

Finance

and Land

-

..New,York,,N. Y..

President Lee,

Calvert.■.

Third—

with

success

to

Educational; Committee

ment, rehabilitation and construc¬
tion; thus, offsetting to some de¬

securities.
have

great

tremendous

such

Further,

the

"by

Securities

assistance

advantages of

broadened

and

well

prospective clientele

investment

The

and Chairman Browne of the Mu¬

tional efforts towards education of

have

given

work

nicipal

Second—encourage members
point advertising and promo¬

to

attention

mittee's

ness.

recognized the
for

and

approach: First—education of per¬
sonnel within the securities busi¬

and Municipal

bonds

concept
of
the
involves a four-prong

tion

elected

Francis A. Cannon'

much

very

Co.

the

Administrator of the Reconstruc¬

Steel, Chairman
&

McDonald,

,

of

Exchange Commission

ON

Braun, Bosworth & Co., Inc.
Detroit, Mich.

.

,

is

EDUCATION

A.

Chairman

William M. Adams

in order to add to this the interest

present

Program

directly con¬
cerned with the
underwriting and
distribution of an
increasing vol¬

it

Named Director
Harry

MUNICIPAL SECURITIES

Walter H.

Drexel & Co., New York
as
Chairman of ■ the

.

municipal

COMMITTEE FOR

PUBLIC

authorized by the Board of
Governors. Its initial meeting was

-

of

Respectfully submitted,
SPECIAL

gram

Walter H.

sale

cor¬

business, has been working dili¬
gently all year towards develop¬
ing and implementing the Pro¬

Municipal Securities

the

securities.

porate branches of the investment

on

in

45

Ithaca
Pittsburgh

Brockton

Los Angeles
Providence
Reading

Lancaster

tucson ' Washington

-

Worcester

York

at

■

46

i>

,

,••

i

j't

"ft'!'

■

"i./nv/'f

capacity

as

Chairman

of the Sub-Committee on
Trading and Cashiering Pro¬
cedures

of the Municipal Se¬
Lloyd B.

curities Committee,

Hatcher, Partner, White, Weld
&

Co., N. Y. City, advised the

Convention
It

as

follows:

suggested to your Com¬
by Mr. Gordon Reis, Jr.,

was

mittee

of

Seasongood & Mayer that we
investigate the advisability and

six places.

used

printed

do

maturities

on

shorter,

six-decimal
have

of

one

Those

three

of

decimal

places.
Preliminary
mnde

idea

Based

was

Lloyd B. Hatcher

(1)

well

received, that we
proceeded with a nationwide sur¬
vey of insurance companies, banks
and corporation treasurers active
in
73

New

the short-term market.
insurance

Company 1 '"/
York, N. Y.
' '
v
Y

•

those

-

•

•

few

who

voted

for

no

^

companies

Of the

written,

for

findings

recommends

Kansas

and

maturities

of

over

New

state

with

and

municipal

maturities

of

one

year

Aa

;

-

field/

tions

Lewis W. Pollok

or

Security

First

National

to

Bank

•

;

town

Study

from

Stock Transfer Problems

has

formed

Office

subcommittee of its

a

investigate the
fer
problems
stock

fer

Committee

many

some

1

Your

New

York

stock trans¬

received

We

have

;

.

'

gested

Committee,
formation

described

in

its

./the

Procedure

announcing

the

of

of

as

Some

certain

around the country
have helped me
better insight into the

year

a

of an underwriter who
represent
himself
at
syndicate meetings. I think it
would
be
mutually
helpful
if
not

every

made

it

out-of-town' underwriter
point to come to New

a

York at least once

and

twice

or

and

corporate

many. -'

I

of

v

think

this

were

„

and
"

that

in

the

Committee

sug¬

our

very

*

.

y.*..

to

of

us

it.

SYNDICATE OPERATIONS SUB¬
COMMITTEE
PAL

OF

MUNICI¬

THE

SECURITIES

COMMITTEE

John W. De Milhau, Chairman
Chase Manhattan Bank

/ New York, N. Y.
Dana F. Baxter
,

Hayden, Miller & Coe
Cleveland, Ohio'

jr:, Richard H. Doke
First of Michigan Corp.

will

Detroit, Mich.

be

to

act

enable

stock

transfer

the

subcommittee

with

a

de-"

to

deal

wide range

of

transfer problems.

Members
•

•

STOCKS
^

As

INSURANCE

•INDUSTRIAL
NATURAL GAS

•

BANK

•

RAILROAD

of Wall Street's

one

provide

a

for these and many
and

our

us

your

best

we

;;v

•

'

Smith

Fenner

&

Nevins,

Model,
J.

Inc.;

Roland

Rieber,

Dominion

Toronto

GRANBERY, MARACHEI CO.
Members Netv York Stock Exchange
and Other

A.
Stone;

,

Bank:

and

we

will

Corporate and

Kidder, Pea body # Co.




1865

cAmer^dM^tock

Exchanges
'Pacifist £oast Stock Exchanges

New York 5, N. Y.

Municipal Securities

DENVER, Colo.—Edward C. Dorroh, Robert G. Danknich and Carl
M.
Sherr
have
joined the staff
McRae

of

•

•

\

23 offices coast to Coast

17 Wall Street

*t

Join McRae Securities
(Special to The Financial Chronicle)

JM embers Hew York and

'

Underwriters and Distributors of

ard Co.

-

them. Address Mr, David D.

Members 'Boston, ^Midwest and

'

Man¬

Henrv Van Dam, American Stand¬

Lynch, Manager, Dealer Relations Department; J

founded

Exchanges

John
&

Chase

hattan Bank; Leon Schoo, Walston'
&
Co.,
Inc.;
John
G. , Taylor,

dependable supply
other local and active stocks

trading requirements and

to meet

subcommittee

Joseph F. Morley, Estabrook &
Co., Chairman;
Farrell
Crahan,
De
Coppet & Doremus; Harold
Fried,
Carlisle " &
Jacquelin;
August Gu.nther, American Stock
Clearing Corp.; Thomas P. Kings¬
ton, G. C. Haas & Co.; Raymond
Meislohn, Merrill Lynch. Pierce,

William

a

bonds, including foreign securities.

Tell

do

TRANSMISSION

major: trading firms

ready market and

the

are:

PUBLIC UTILITY

•

of

Securities

Corp.,

444

Seventeenth St. Mr. Danknich and
Mr.
J.

Sherr

R. Holt

were

previously

with

& Co.

NEW YORK

With Cowen & Co.
Cowen

York

&

Price.

Co.,

City,

association

45

Wall

St.,

have

announced

with

them

of

New

the
Joel

PHILADELPHIA

fine

"A//

-

greatest value

repre¬

a

Respectfully submitted,

prac¬

unsuitable
.•

from

op¬

helpful only to
of our entire

all

affords

This arrangement will

effectively

year

opportunity to discuss with each
other the problems we all have.
I
think
much
good
will come

senting banks, stock brokers, pro¬
fessional
stock
transfer;/agents
partments.

a

represent his firm in person

which

in

Sulphur

many

were

segment

membership

the

subcommittee,

members

erations.

.

met

White

at

discussed

tical, others

Vice-Presi¬

has

improvements

a

Marrais,

for

correspondence on
sides of this question.

liam

Chairman

out-ofdealers,
and
firms frequently

members.

and

Charles H. Hyland, President of
the
Cashiers' Division and Wil¬

Office

sys¬

•'.'/

much

brokerage firms and trans¬

Division's

criti¬

We have asked for and

many

De

again

and

houses,

Committee

Springs.

encountered

of the

out-of-town

the

and

were

so-called proxy

managing

by

A.

Milhau

John W. De

participating

to

agents.

dent
-

Exchange Firms

Procedure

last

does

called upon to serve as proxy

Cashiers' Division of the As¬

sociation of Stock

face.

acquire

;'V

dealer

The

greater knowl¬

a

problems

problems

the

Whether
manager,
out-of-towner, we can

represent

Los Angeles, Calif.

Cashiers' Div.

or

at some appropriate meetings. His
The members of this Committee attendance will be most welcome.
a good cross-section of
We should'take good advantage
our-industry. They include rep?>
.of
this
meeting
at > Hollywood
resentatives
from
bank
and

v

Franklin Stockbridge
>

of

I think

try

benefit from

this

tem.

Fosdick,

effectively.

more

My travels

comments
to

a

additional approach to
underwriting groups to

should

must

its

and

cisms

•

Eddleman, Pollok &
Inc., Houston, Texas

an
our

of

How¬

confined

/

edge of the conditions each of us

it seems
that practical¬
ly all ques¬

,

urge

help

all

ever,

Courts & Co., Atlanta, Ga.

^,,

time

long list of suggestions which have
been submitted, I would like to

operates.

matters

within

:

Morrison, Jr.

Thomas J. Pendergrast

bonds

year

S.

\

Rather than read at this

/ dis-

up

any

Harris Trust & Savings Bank
Chicago, 111.

bonds

-

take

a

perience in this profession./

proxy,
V has

cussions /

York, N. Y.

William

Purchase and sales invoices

(2)

TT'.T.

only

to understand a
little better how the other fellow

ready
willing to

and

Blyth & Co., Inc.

be figured to three decimal places.

for

v

William F. Morgan

your

one

/

firms in which we have
financial interest but,
even
more
importantly, the in¬
vestment of our lifetime of ex¬

not

we

been
*

all
our

own

very

com¬

mittee

City, Mo.

Kuhn, Loeb & Co.
York, N. Y.

that:

municipal

Company

and naturally so. We are
concerned with the welfare of

function

syndicates.,.

New

-

mu¬

writing

■/

This

Trust

David T. Miralia

Purchase and sales invoices

state

with

these

on

Commerce

matters

other

nicipal under-

a."-

.

been

partici¬

pating in

Harding

effect

has

scope

enlarged to cover
important
to

~

Coffin & Burr Incorporated

Boston, Mass.

broader

us,

Proxy Sub-

of the

Its

in

is

Sub-Committee

continuance

a

Committee.

Trust

William G.

five years.

Committee

the

and
so

Our

Fenner,

Fulkerson, Jr.

Bankers

change voiced no serious objec¬
tions, while practically all of the
votes
in favor
of cutting
back,
thought it a constructive idea,
and in fact, were quite enthusias¬
tic over the resulting benefits.

rather

sampling

the Convention:

Joseph M. Luby

than the pres¬
six

W. Neal

City, submitted the
interim Report to

following

&

or

Bank,

Manhattan

the\ Chase

.:/

Lynch, Pierce,
Smith, Incorporated
New York, N. Y.
v

provoke

Syndicate Operations
participation in our efforts for
of the Munic¬ greater understanding of each
ipal Securities Committee, the other's problems.
Each of us is most interested in
Chairman of which is John W.
De Milhau, Vice-President of any action which directly affects
Sub-Committee

New York

.■

to

forum

a

as

The

new

•

Merrill

invoices

custom

for

CASHIERING

o. v. Cecil

we

over

bids

to

White, Weld & Co.
New York, N. Y.

five
par¬

year

Thursday, December 15, 1960

•

Lloyd B. Hatcher, Chairman

V

received

ities

the

on

PROCEDURES

continue to use a
place.
To date we
five replies from
the
corporation treasurers, four
in favor of three places, and one
in favor of three places on matur¬

decimal

ent

apply

AND

in
short - term
their votes, that

active

qualified

paper

.

Operations Sub-Committee
Of Municipal Committee

adjust¬

Respectfully submitted;

replies; 45 voted for three
decimal places; 24 voted for two,
and only three voted to keep the

ticularly

without

issues.

We wrote 89 banks and received

going back

practice of
figuring mu¬
nicipal bond
purchase and

not

73

the

prewar

as

SUB-COMMITTEE ON TRADING

present practice. However,
of the largest banks who are

.

.

,

(4)
The above method of fig¬
uring invoices go into effect Jan.
1, 1961.
(5) The above recommendations

,

,

to

places,

Ji'sLtti

SuSEflSe!

fourth decimal.

of

favor

of

or

«

figured to six decimal

a

ment to reflect the fraction

48 replies; 37 voted
changing the billingpractice to three decimal places;
nine voted for two decimal places,
with
only two voting
to
keep
in

accepta bility

to two

''i'l >3K«J?S£

six-decimal place basis
book is used, the third decimal be

received

we

be

places.
(3) If

.

sales

-'

The Commercial and Financial Chronicle

Report of IBA Municipal
Sub-Committee on Trading
And Cashiering Procedures
his

vCfj'T". T''

',1

(2426)

shorter

In

J-.'l'j.

I.

STAMFORD

BOSTON

Volume

192

Number 60J 2

.

.

The Commercial and Financial Chronicle

.

47

(2427)

William H. Hammond
TABLE I

Braun, Bosworth & Co.
Chicago, 111.

The Twelve

Henry L. Harris

*

•

•

■

-

Goldman, Sachs & Co.
York, N. Y.
The Aviation Securities Com¬

Savings Bank

Chicago, 111.

*

-Cumberland Securities Corp.

f

.

-

,

.

to

"1. W. H. Morton & Co., Inc.
V New York, N. Y.
Thomas L. Ray

■

-

St.

Brainer H. Whitbeck

v

,,

,

time when it

.-

;

States is within
■

Total

Net

Operating

Operating

Net

Passenger

Load

Revenues

Income

Income

Miles

Factor

1960

($5)

($7)

14,428

60%

1959

59

30

13,409

61

Kansas

:

,

CLEVELAND, Ohio
of

name

W.

The

—-

D.; .Sullivan

&

Co.,

U.

firm
S.

which

acts

Government

securities

are

President,

dealer

as

of

and

its

cial

vigor has

firm, and Mr.
brokerage de¬

and

Every

con¬

try. It is at

soon,

nation's
most

en¬

Herman

of
a

be

to

:

by

;

aviation

way,

New

York

tain

Exchange,

on..Jan.vflUi will* admit

A." David

Scbenker to

present

to

be

HAVERFORD, Pa.

On

—

Jan.

1

Co.,

No.

354

come

a

Lancaster

Ave.,

will

partner in the firm.

as

be¬

industry
A

But

which

to

first
to

to

cer¬

the

"Ages"

and

Jets,

and

with

of

all

con¬

refer¬

Space,
of

three

depend for their

ment

and

skills

of

the

aviation

industry.

ex¬

A person who confined the basis
of his

vs.

1958

vs.

1955

1959

""Based

9%

+
—

CAB

on

+11
—15

data.

(

28,127

61

45

24,435

60

63

19,217

64

-•

it is,
in making its remarkable
showing, exhausting both its own
capital and its ability to acquire
capital from outside sources.

first three

the

The

recent

rate

which

months

increase

of

will,

it is hoped, help second half earn¬
ings results, but how much it will

do so, and whether or not it is
large
enough
to
lend
solid
strength to the earnings picture
will

not

time to
;

be

measurable

for

some

approximately 160 turbojets due for delivery to domestic
carriers during 1960
(more than
>

of

the

:

total

anticipated

turbo-jet

fleet

of

industry)

it

plain

is

the

domestic

that

those

controllable factors which sap the

industry's
be

earning

eliminated

the better

as

+ 15

2

+ 46

—2

,

•

+2
—5

loss.

(2)

Competition

Many, but by no means all, of
the
problems of the trunklines
stem

from

over

the

In

1955,

excessive

competition
density routes.

highest
the

CAB, with the an¬
strengthening
regional trunklines, awarded
many new routes over the most
travelled runs. For example, more
nounced purpose of

than

110 markets

by three
before

1955

now

are

served

airlines whereas

or more

only 38 markets

were

served. Also, there are at least

so

12 markets served

by five

or more

airlines.

\

The reaction

of the

industry to
the widespread rearrangement of
route

structure Tn

'1955

was

.,.

With

50%;

-8%

+

+ 38

"

its

come.

,.(—)
—

) Denotes

they will be higher still in 1960;

accidents

■

(c—)

+19

+59

power

soon

should

readjusted

or

as

largely

dictated

two factors
considered
axiomatic
(1)
In
a
competitive market ;the
airline

by

with the most modern equipment

gets the business and

(2)

An air¬

line must compete

resolutely over
key routes if it hopes to
maintain the interior logic of its
all

its

traffic

pattern.

When

for

possible. The

these

business

axioms

in effect, combined with
imposed market fractionalization
were,

greatest good can be achieved by

the trunklines

resolving problems caused by too

adopt

many

much competition.

were

compelled to

uneconomic
Continued

all

was

measures.

on

page

64

reasonably

conclude

^7ZZZZZZZ2Z22ZZZZZZZZZZZZZZZZZZZZSZZZ^^ZZLZZZZS^SZ2ZZZ222Z^mzZZZZZZZZZZZZ2ZZZZZZZZ^

well with the aviation

expended industry and that its future prob¬
ably looked rosy. He would be
wrong. The separate but entwined
and then

only if it leads

understanding

62

•

.95

judgment to the foregoing

facts, would

In view of recent that

constructive

filled

$13 bil¬

practical
existence largely upon the imagi¬
nation, financial strength, equip¬

fingerpointing are a
luxury the nation and the industry
history, effort

to

ences

such and thus

future.

will be worthwhile

George I. MacLeod, local manager
for W. H. Newbold's Son &

do¬

million

one

literature

are

Missiles

labor

review of those
if they are

of

afford.

the

directly,

will exceed

Current

versation

in

aviation

Admit

to

organized

be avoided in the

ercises

;

its

in

It

than

more

revenues

lion.

necessary,

recognized

limited partnership./
•'can, ill

Newbold's Son

!■'

/

predicament.

amount

mistakes is

of the New York Stock

and

management,

brought
its

element

complex.

employs

-

corporate
the

in

factor

people and in 1960 its gross sales

\ A great many mistakes commit¬
ted

indus¬

the most impor¬

military posture and the

dynamic

tation

Kahn

H.

world where only the

catastrophe.

a

aviation

a

mestic and international transpor¬

partment.

to Admit

vs.

1959

1959

NOTES:

1

has

105
123

,

aviation

nation

citizen

the

once

tant-industrial

may

the

Industry

American

front it which,
if not solved

and

Co., 115 Broad¬
City, members

..

1,133

the year, the industry's first half
results were poor.

Aviation

Vital stake in

government

Lenart, McHugh

1,798
1,513

.

-The

Ward the industrial

Lenart. McHugh &

Half

Year
Year

marred

•Its Importance and Its Problems

strong may feel secure, that would

.

First

__

tragic

finan¬

falter. -In

Sullivan,
A. Ward,

share-its views

this- call

custom¬

but

the

municipal

James

the

who

period of crisis.

a

in¬

complex

in

Vice-President and Treasurer. Mr.
Sullivan will direct the bond de¬

partment

United

diligence

tire

William D.

and

the

cause

Officers of

is

speaking
with a sense of urgency and asks
all-members of the Association

that the

the

Committee

-1

_

*

participated

the

port

a

mo¬

problems

firm

1958

1955

Aviation Securities -Committee.

e

impaired

Inc.,
Terminal1 Tower,
will
be
changed to Sullivan-Ward & Co.,
Inc., effective Dec. 31.
the

at

been seriously

To Be Sullivan-Ward

1959

of

Commit¬

directly in
industry and is
thus qualified to speak
from pro¬
fessional experience. In this Re¬

s

issued

of

Each member

Securities

with
ary

City, Mo. /

industry

has

,

have clients

or

dustry is do¬
ing it s job

th

ment

/'•'•'AT

'

Revenue

Year—

to join it in
for constructive action.
NOTE: Figures in this Report are
Even after allowance is made
from sources believed reliable but for the bad
weather
conditions
are not guaranteed by the IB A or
and
the

At

•

Pierce, Carrison, Wulbern, Inc.
Jacksonville, Fla.
Zahner & Co.

tee,

underwrite

financing of the

is manifest

aviation

Edward B. Wulbern

v

being

-v-V

The First Boston Corp.
New York, N. Y.

Victor H. Zahner '

report, is

them.

own

the, Aviation

v.

FOREWORD
This

-p

Louis, Mb.-.'

who

:

.

Mercantile Trust Co.

-

the Convention:

of the Investment

Association

aviation securities

Brothers, New York City, de-r
livered the
following Report

V

Peter V. N. Philip

Most members

Bankers

mittee, headed by Herman H.
Kahn, Partner of Lehman

:

.

' V

Carr Payne

Nashville, Tenn.

Airlines*

First Half-

Morrison, Jr.

Harris Trust &

Trunk

(In Millions)

"

New

William S.

Domestic

Qea /e M

iri

components of the aviation indus¬

action.

Hanging

in the balance is not the

industry's

try,

the airlines and the aero¬
manufacturers,
are
each
desperately seeking solutions to

space

past, but its future.

their
mrnmmmmmmrnmwmmmmmmmwm

problems

troubled

and

f/iate

and

^llania'/iad

deeply

are

they contemplate th(
attempting to meet and
great challenges of.
the future while in a dangerously
as

hazards in

financial

weak

d/loaUn^ dtfcd/orrdy

the

surmount

condition.

The

equipment of the industry is mod¬

ISC

O

U

N

and its skills and

capacity;
unimpaired
However, it would run counter to
all business experience to assume
now

ern

D

T

for

imagination

eveniie

are

tdb

an

that

an
industry earning meager
profits, if any, and, for that rea¬

CORPORATION
OF

son, increasingly unable to attract
capital from outside sources, can

remain
.

:

sound private enterprise

a

Both

-

citizens dedicated to the

as

national

welfare

and

invest¬

as

Phelps, Fenn & Co.

ment bankers who helped finance

NEW

YORK

the growth of the aviation indus¬

try

present herewith comments
suggestions concerning the'
problems of the airlines and the
aerospace manufacturers.
we

and'

II

The

Domestic

Dealers In

,

Trunk

Airline

Industry

,

(1) General
In

United States Government Securities

nation's

air¬

trunk

JIrst orMICHIGAPr CORPORATIO]K

operating

under
a
rate
altered
only * slightly

structure

Underwriters and Distributors

since

the 1940's, began carrying
large numbers of passengers in
jet aircraft over route patterns

designed

Bankers Acceptances

the

1959

lines,

to

trunklines.

the

of

sulted

increase

in

a

regional

This

awkward

with

the

old

and

blend

has

re¬

situation probably

not

new

STATE,, MUNICIPAL

competition

piston-equipped

among

CORPORATE

SECURITIES

too dissimilar to that which might
if

occur

a

hitched

Fifty-Eight Pine Street
New York 5, N.




Y.

a

team of racehorses

to,

stagecoach:

a

were

.for

while the coach would go faster

MEMBERS:
New

York

Stock

Exchange

American

Stock

Exchange

(Associate)

'

than

just

before, but it would be
question of time before the

ever

a

racehorses,

bred

speed,

themselves out.

wore

and

trained

to

Midwest

Stock

Detroit

Exchange

Stock

Exchange

CHICAGO

DETROIT

NEW YORK

Although the trunkline industry
is

moving faster than ever before
(revenues and passenger miles in

1959

all

were

at

indications

all-time

to

date

highs
are

and
that

h

Columbus

%

■

—

Grand Rapids

Saginaw

—

Bay City

—

Battle Creek

—

GrossePointe

—

—

Flint

—

Lansing

Muskegon

i

48

W/V>-.n i'«A

i

rty M"* r], ,y. *»'>r,v

V ■*,•'

■

The

(2428)

Commercial and Financial Chronicle

relief from the double taxation of

corporate

Taxation Committee
-

Federal

The

Com¬

Taxation

has been the
which corporations have

industrial
freedom

mittee, headed by Walter enjoyed

Maynard, Partner in ShearHammill & CoNew
York-City, presented the Com¬
mittee's Report, which fol¬
lows, to the Convention:

son,

The advent of a new Administra¬
tion

means

strongly

action

i

a

n

m

which

will

n

y

of

recent

nomic

a

d

n

e

its

double taxation.

liberalized

of

is

reserves

a

which

we

battle.

depre¬

statement
with the

r

Walter Maynard

the

deprecia¬

liberalizing

allowances

as

means

a

of

world, is that tax reform,
stimulating business.
given a background of fiscal re¬
sponsibility, is the most potent of
Double Taxation of Dividends
all economic stimuli.
A tax bill liberalizing deprecia¬
At this juncture it might be well

•

which " withholding

expense

Bill

Keogh

benefit

have

to

appears

of

enactment.

m

the discrimination which

ists

INDUSTRIAL, RAILROAD

in

favor

of

good
would

ex¬

now

corporate

assets,

a;.',)

' •/

>-■

Professor

of

Finance

at

now

of

the

total

being collected from

that

taxes. We also
averaging of income
period should

reasonable

a

Such

allowed.
be

provision

a

equitable,

helpful
especially to small business.
Taxation

Additional
vAt

and

point, possibly sooner
than generally expected, a pro¬
posal seems sure to be made to
increase
the
Treasury's
taxing
power by the addition of a tax
less sensitive to business swings
than income taxation, such as a
some

manufacturers':

basic

excise

; tax,
tax,, along
European lines. Such a tax would
have the effect of stabilizing the
even

or

turnover

a

government's
revenues
through
gearing them to a greater extent
national product and re¬
„,

to gross

ducing present heavy reliance on
the

tax.

income

corporate

It

UTILITY

Deductible
In

AND FOREIGN

SECURITIES

last

the

is

it

because

deeply

the Harvard Business School and

politicians

formerly Special Assistant to the

buried,

Secretary of the

low, and price-raising effects dif¬

"Any

Treasury:

appreciably higher rate than the
reduce the

present one would so

potential

net

investment

successful

to

as

from

large.

growth

make

increment
in

seriously

impair

for

ficult

revenue

sure

taxing

expansion.
no

single

only

law

which

reform

of

logical

lines

in

change
would

probably

do

as

appreciable
true

on

the

much

damage

increase

long-term
would

crease

tax

do

in

gains.

as

the

an

in¬

An

harm."

done

member
make
our

it

an

is enacted,'

views

our

on

ft' will
with

along

that each

Association

business
the

to

to

number of

of

proposals

foregoing sub-

Congress

were

Our

for

Some of the

more

severe

Burnham
MEMBERS

15 BROAD

NEW

YORK

and
AND

Company

AMERICAN

STOCK

STREET, NEW YORK 5, M Y.

EXCHANOEC

•

it

is

eviderit

supplement and facilitate

that

there have been abuses in the

ex¬

account field, it would seem
that they can better be dealt with
by administrative action and care-,

Dl 4-1400

pense

TELETYPE NY MIS*

CABLE: COBURNHAM

While

drink.

ful

examination

than by

of

tax

>

,

the market

legislation.

dealers and dealer banks

The foregoing is a summary of
the relatively limited action that \:,
.

might be possible
.

th^

early in

on

new

the tax front

^Congressional

.;

*

session.

&

However, it would seem
that during the course of the new
administration a more comprehensive effort at changing tax legis¬

Co.

:

ih;
'

lation under the banner of reform
will be made, and we should accordingly continue to present our

Members New York Stock Exchange

views

operations of

returns

•

Shelby Cullom Davis

professional services

of these

provided that deduct¬
expense accounts should be
confined
entirely
to
food
and
proposals

ible

*

,

;

forcefully as possible to
It is interesting to note
that the Republican membership ■*
as

.

Congress.

Underwriters and Dealers in

in the House, has. increased by

22,
and in the Senate by 2, and that,
therefore, the informal conserva¬

INSURANCE STOCKS

,

>

,

„

tive coalition which has been the
most

CORPORATE & MUNICIPAL BONDS

Serving Dealers and Institutions

since

.

ever.

"

ing

Oldest Specialists (with Predecessor Firm) in Insurance

Stocks.

powerful influence in shap¬
legislation in recent years
seems likely to be stronger than

1927.

Capital
With

taxation,
116 JOHN
*

/

our
economics of

STREET, NEW YORK 38, N. Y.

Tehphdne BEekman 3-0626

•

that

"

f

gains

this

tax

are

J- J. KENNY CO.

such

from'. IjU Xyfe■ think - it is possible
t.d pfpve! that cuttirig,'thfe ibato
enues.

Si'*!.

capital

a

half-would




to

position is that the

lowering of the rate would
substantially ; increase
revenues

Teletype NY 1-384

'IN THE HEART OF THE INSURANCE
DISTRICT"

*■

Gains Taxes

respect

more

than double

rev-

It is to be- hoped that the

.

"

v.

#'

•

:*)

-,•«

t,y*« <*» -t.'S

** •*«.'

j

*
•

»

1

,

'ifi

will

present

.

made
dealing with alleged abuses in
the matter of deductibility of cer¬
tain
types of expense accounts.
a

the

above.

mentioned

his

exten¬

concurrently

other taxes

of

is

Government's

Your Committee hopes

tax

incalculable

powers

be

identify.

potential

that if such

sion of the Federal

There

are

do our best to

We should

the country's economic

is

to

consumers

Moreover,

rates

apparent

the

Expenses

session

is

type of tax that is attractive to

a

favor this

PUBLIC

re¬

income

personal

be

a

small, initially

2%

than

more

over

be

em¬

We should continue
legislation, v

ployees.

would

,

N

permit self-employed persons (in¬
cluding
partners
in
financial
firms) to set aside savings on a
tax-deferred basis, thus equalizing

Underwriters, Brokers and Dealers

capital

Smith,

self-

a

This

which

ings before the House Ways and
Throop

employed persons to set aside trus¬
teed pension funds for their own
chance

provision

situations

allowing

year.

Means Committee by Dan

Keogh Bill
The

a

ment made in the 1959 Tax Hear¬

the

of

owner-occupied

In concluding the discussion of
capital gains taxation, it might be
appropriate to repeat the state¬

financial
industry. Great progress has been
made in the voluntary- program,
and it is hoped that the proposal
to impose
withholding can con¬
tinue to be successfully resisted.
segments

many

teix history of tion allowances might open the
Germany,
which
provides
the way to certain other proposals of
most dramatic example of sound, interest to us. For example, cer¬
sustained prosperity achieved in tain "liberals," under the leader¬
ship of Sen. Eugene McCarthy of
a
relatively short time against
Minnesota, have been opposed to
what seemed nearly impossible the
provision of the
1954 Act
odds. A major factor in German which accords a small measure of

in

accorded to trans¬

addition, averaging of capi¬
gains over a period of years
and
increasing deductibility
of
losses would be logical.

would impose on corporations and

to recall the recent

amount

avert the tremendous burden

and

of

not

capital assets the same

-In

have

seems

would

duction

now

tal

scheme for
opposed this
proposal on the ground that much
could be done in the way of vol¬
untary
cooperation
to
correct
under - reporting
of
dividends
We

pos¬

per¬

than for additional construc¬

ance

acted. This would accord to trans¬

investment,

;*

as

of

levels.
A 50%
logical, because
rates higher than this create: a
greater incentive for tax avoid¬

would

come

rate

non-punitive

maximum

ment is made within

withholding

a

dividends.

London Prices up to $40 an ounce,
tion

is

up

to

believe

uV/"1"'/-' "•'/■<

Withholding of Dividends

gold flurry, which carried

mentioned

:v"<;

Another subject likely to

recent

a

in. connection

issued

,yv

■

promptly

as

maximum

.

sonal income tax be brought down

treatment

excluding, for
example, growing timber, breed¬
ing cattle and mink and limiting
capital gains treatment to securi¬
ties and real property held for

in worldwide economic
competition, we cannot really af¬
ford to have in this country tax
rate structures affecting any part
of
the
economy
which unduly
penalize < us in the competitive

the

sible

actions in

of

an *

engaged

in

a

fa¬
cilitate the passage of legislation
of this kind would be redefinition

a good place
point out that since
increasing : extent

to

to

are

'

tive effort. The cost of such

A

■

..

.

that

to urge

dwel¬
lings, where capital gains taxes
are
not payable if full reinvest¬

likely candi¬

in

Kennedy,

r c;

Income Taxation

Our Association should continue

so-called full re¬
investment provision could be en¬
example,

actions

Possibly, this, too, is
at

con¬

reviewed

are

For

(the

comparable
to
ours
provide at least partial relief from

of

issue

elect

of

sectors

and

20%

structures

lim¬

date for action because President¬

over
v

more

than

In this respect it is in¬
teresting to note that all other
countries having personal tax rate

range

recession

considered

The

again in vari¬
ous

ited than the broad

ciation

of

eco¬

o

objectives

Progress in capital gains taxa¬
can, however,
be made in
ways other than rate reduction.

taxation.

plans have been an¬

no

tax bill with

be

history

proved

While

less

not

Thursday, December 15, 1960

.

tion

in the lowest bracket from double

nounced for action in the tax area

and

lesson

the

large

a

succeeding paragraphs.

re¬

cession,

and

is

Canadian level). This would have
the effect of relieving taxpayers

dwindling Treasury
well be a factor in¬
fluencing the
scope \ of
action.
Some of the subjects which may

condi¬

tions

plant

new

revenues may

opens

under

efficient

and

build

to

part of the means of financing it.

comitant

ing that
of
taxes, is that
its period of
office

incentive

the

Economic

includ¬

areas,

both

reaches

of sub¬
jects for reform covered in the
1959 hearings may be attempted.

in¬

fluence

they saw

as

This has provided at one time

in the next Congress, it seems not
of a new
struggle for tax impossible that formulation of a

factor

A

earnings

profits

corporate

It is our
belief that the dividend tax credit
should
be ; increased
until
it

start

the

round in the long
reform.

to

reserves

fit.

of

both unfair and unwise.

depreciation

charge

to

taxation

.

.

recently announced study of taxes
backed by the Ford Foundation
and the Brookings Institution will
go into the matter of the basic
economics of capital gains tax¬
ation, and the revenue-raising po¬
tential of lower rates in this area.

profits

through a 4%
dividend tax credit. The position
of our Association on tnis subject
has consistently been that, in a
community which needs a high
rate of saving and growth, double

progress

jA-SU

JVtWCSOSE

ai

tl(.

...»

*V

.

I

Volume

192

Number 6012

.

.

The Commercial and Financial Chronicle

.

(2429)
jects
his

as forcefully as possible to
Congressional representatives.

Respectfully submitted,

Edward P.

Prescott
>
^
Prescott, Shepard & Co., Inc. 7
Cleveland, Ohio

,7

Jack

Chairman

Shearson, Hammill & Co.
York, N. Y.

Emmons Bryant

Richard J.

Blair & Co.

Incorporated
New York, N. Y.

Kansas

Walter W. Cooper

Mark

Co.

Albert O. Foster

Graham-Conway Co.
Louisville, Ky.

Barton

Benjamin H. Griswold, 3rd

Baltimore, Md.

ton

has

Street.

Cincinnati, Ohio

Regulation"

by

the

State

on

has

-

Mr.

Bor-

associated

with

was

W. C. Langley & Co.

American

Trust

Kirkpatrick-Pettis Company
Omaha, Nebr.

E.

John P. Labouisse

Howard, Weil, Labouisse, Friedrichs & Company, New Orleans,
La.
''; v

New

&

of Robert E. Adair &

He

and

sound

state securities

Com¬

in

Lewis, Inc.

regulation.*

Curley (Paine, Webber, Jackson
& Curtis, New York), a member

This

of

Primer

impor¬
and

Angeles, Calif.
D. Moore

Branch, Cabell & Co.

form

under the firm

adopted

Investment

Richmond, Va.

of Associated

name

Advisors.

He

act

Commissioner

tion

thority to deny registration of

of

state

members

of

in

to

uniform

Act

this

of

in

adequate

state

securi¬

state

a

The

duties

the

that the

and

Committees

new

adopted during the last
years provide
for appoint¬

"serve in

se¬

of

an

director

taining

authority would be too

defeated.

>

which

on

this

to

include

all

act"

matters

and

to

The propo¬

Credit for work

to

as

the

administration

of

Committee.

deem advisable."
The Kentucky
Securities Act (effective Jan. 1,
hearings
were
held in Los Angeles on Jan. 20-21 1961) creates a securities advisory
on
a
bill to provide adoption of
Continued on page 69

1,

In

new

California

(Louisville)
with
the
Hon.

Breckinridge
(Attorney
of Kentucky)
and Miss
Pearl
Runyon (Director of Se¬
curities of Kentucky).
securities

United States Government

BONDS

(with

BROADWAY

YORK

6,

N.

includes

Uniform

Government Agency Securities

to be¬

1, 1961.

the

to

State

The

anti-fraud

STATE, MUNICIPAL, HOUSING AUTHORITY, REVENUE,

Securities Act

modification).

some

and salesmen

ers

115

Jan.

.

the

NEW

adopted

was

AND

new

requirements
and
dealer
and
agent registration requirements of

INCORPORATED

MUNICIPAL

act

new

Malvern Hill & Company

act

effective

come

complete

a

RAILROAD, INDUSTRIAL, PUBLIC UTILITY BONDS

Deal¬

riot required

are

EQUIPMENT TRUST CERTIFICATES

register under the present New
Securities Act.
The new

Jersey

Y.

act will require any person acting
a
broker-dealer or agent in

as

New

Jersey to register under the
(with certain exceptions), but
will not require the registra¬

act

it

tion

of

securities.

The

WM. E. POLLOCK & Co., INC.

act

new

specifically excepts from the defi¬
nition

of

"broker-dealer,"

thereby exempts from the
tration
trust

companies, (b)

effects

exclusively
S.

U.

in

in

the

municicpal

government

bonds of Canada

or

MIAMI

or

state

bonds,

bonds
any

SAN FRANCISCO

BEVERLY HILLS

who

a person

transactions

NEW YORK

and

regis¬

requirement, (a) banks

and

Canadian

province,

and (c) a person who
transactions in the state

effects

((IDon't Know

exclusively
suers

with

or

through

About Them"

the

INVESTMENT

companies, investment companies, !
pension or profit-sharing trusts or

even

other financial institutions.
f.

'.

about

a

member

a

company,

Organization.

of

the

financial

community

calls
a

on

part

,

thousands of security

...

brokers and dealers,

personal
are

both

are

1

r*

v*

*

*

•

*

any

''* " '*

by the
act, Jan.

it

F.

available

are

from

Mr.

Conroy, Chief, Bureau

t

v

./

Broad

**"

of Se¬

St., Newark, N. J.

witt/^onklin

n,
r'v

••

compiled

and

for

the

Primer

by Gordon L.
Calvert, Municipal Director and Assistant
General

1

feiry




New York

•

Dallas-"-Los Angeles-« San Francisco

you're
we

scene

can

help with information

of Japan, information

on

securities,

people can't; and

and want information.

on

particular

Counsel of the Investment Bank¬
ers
Association
of America,
425 .Thir¬
teenth St., Ni W.y-Washington

4j D". C;

on

com¬

special studies tailored to

or

needs.

Feel free
as

a great many

from the

in. We

come

economy

panies, information
your

away

close

as

to

your

ask, there's

telephone,

no

or

charge

or

obligation, and

we are

write:

,

Nomura Securities

Co., Ltd.

Brokers, Dealers and Investment Bankers

Broadway, New York 6, N. Y.

was

condensed

.

'

7

The. .material

can't read Japanese,

61

i

.

general

OPPORTUNITIES

David

curities, Department. of Law, 744

office.

the

effective

L.

_

available at

the

1,
1961.
Copies of the act and the neces¬
sary forms for registration under

"

Details of this service

effective
of

you

if you can,

That's where

;

should be filed in advance to
that registration will be¬

come

of The DeWitt Conklin service to broaden interest in

de
*■

;

assure

date

w

v

.

act

this

it needs the services of The DeWitt Conklin

the market for its clients' equities.
'

says

'

Nationwide distribution of progress reports

"

...

Perhaps

Applications for registration of j
dealers and agents under the new

<

When

,.:>h

JAPAN

is¬

of the securities involved in

transactions,
other
brokerdealers,
banks, savings
institu¬
tions, trust companies, insurance

Too Much

se¬

curities, broker-dealers, salesmen,
the many Virginia dealers who and investment advisers, and pe¬
co-operated on it and particular riodically recommend to the direc¬
credit is due Mr. John Hagan, 3rd tor such changes in the rules and
(Mason-Hagan, Inc., Richmond), regulations of the department in
Chairman
of
the
IBA
therewith
as
Virginia connection
they

Committee, and

Jersey

"ac¬

defeating this proposal is due

General

New

per¬

quaint themselves fully with the
operations of the director's office

John

In

to

advisory capacity to

Graham

co-operation

year

acts

the

au¬

present provisions
act

this

advisory commit¬
Washington Securities
provides for appointment of a
7-member
advisory
committee,

Act

was

the

of

ment of

the Virginia
ground that the

securities

was

other

tee.

has

under

the

by

the

acts

legislatures in 1961.

Three

vig¬

broad and indefinite.
sal

was

Jan.

the

proposed

in

effective

this

on

curities

adoption

Thomas

dealers

of

or

This bill

opposed

procedures

basis

commission

orously

securities acts

more

by Mr.
Milton
Trost
(Louisville),
Mr.
Henning
Hilliard
(Louisville),
Mr.

Com¬

administra¬

the result of work

was

the

compensation.

of

securities

State Advisory

amount

the

on

summary of amendments

Virginia.

state

acts, the
various types
of regulation,

Securities

The

1961.

was

formerly with Skaife & Company.

::

of

Hughes (Wagenseller

Drafts of complete new securi¬
ties acts have been prepared in
several states to be submitted to

ties

regulation. Copies

be

to

and

John

state securi¬

Kentucky the Modified Uni¬
State

authority

a

state

two

of

Acts
In

Mr.

committee.

the

ened

Amendments to State Securities

DIABLO, Calif.—John R. Kerr is
engaging in a securities business

on

and

tre¬

in

Virginia a bill introduced in
the Legislature would have broad¬

Washington, D. C.

(Special to The Financial Chronicle)
,

this

Wetzel

ses¬

the

Appendix A of this report in¬
to

In

I.

Associated Inv. Advisors

Robert R. Miller

Hornblower & Weeks

is

Mr.

for

Arizona, Georgia, Kentucky,
this bill Michigan, New Jersey, New York

securities

due

Credit

Durst, Inc., Los Angeles).

cludes

Particu¬

brief expla¬

available from the IBA office

Dominick

York, N. Y.

Roderick

obtain

formerly with John

was

a

&

ties

recommended

and

are

R.

James K. Miller

Dominick

name

pany.

eral Counsel of the IBA.

Legislature at its

1961.

Mr. William

registration

:

business from offices at 9062 East
Shorewood Drive under the firm

Governor

were

uniformity in

Robert A. Podesta

ISLAND, Wash.—Robt.
Adair is conducting a securities

program

in

mendous amount of work that has
been done on this project is due

Meyner of New Jersey, Mr. David
Conroy (Chief of the New Jersey
Bureau
of
Securities), Mr. W.
Enos Wetzel (W. E. Wetzel & Co.,
Trenton) and the Assistant Gen¬

efforts toward

MERCER

the

act.

new

California
sion

Jersey
Participants

missioner to deny the registration
of securities so that he could
deny

formerly

Opens

support of the bill. It is expected
that the bill will be before the

New

1

nation of state

progress

Company.

R. E. Adair

in

the

in

lar credit in the work

tance

York, N. Y.

Stewart R. Kirkpatrick

investors

under

summarizes

Co., 436 Fourteenth

Borton

provide

the

C.

vided

published

Committee, to

representatives of the Cali¬
fornia Bar Association testified in

television program

a

Securities Act

and

Newark, N. J., focused atten¬
tion on the protection that is pro¬

Securities

been

with Dean Witter & Co. and prior
thereto for many years with the

Maitland T. Ijams

Los

become

C. N. White &

W. E. Hutton & Co.

New

"Primer

With White Co.

OAKLAND, Calif.—Earl

James M. Hutton, Jr.

.

A

(Special to The Financial Chronicle)

Alex. Brown & Sons

On Nov. 6

State

several

changes). Califor¬
nia Corporation Commissioner Sobieski, representatives of the IBA

in

Illinois.

Sullivan, Jr.

Trubee, Collins & Co.
Buffalo, N. Y.

Thomas Graham

r

Convention received the

Frank C. Trubee, Jr.

& Marshall

Seattle, Wash.

!;

Straus

Auchincloss, Parker & Redpath
Washington, D. C.

York, N. Y.

Foster

W.

Straus, Blosser & McDowell
Chicago, 111.

Chicago, 111.

New

Stern

City, Mo.

Frederick

Savings Bank

Smithers &

The

following State Legislation
Committee Report from the
Chairman, Robert A. Podesta,
who is a Partner of Cruttenden, Podesta & Co., Chicago,

Stern Brothers & Co.

Woodward Burgert

S.

Stephens

Stephens, Inc.
Little Rock, Ark.

New

F.

T.

Uniform

(with

Committee

Baker, Simonds & Co., Inc.
Detroit, Mich.

COMMITTEE

-Harris Trust and

the

Report of IBA State

Ralph W. Simonds

FEDERAL TAXATION

Walter Maynard,

.

49

Telephone:

BOwling

Green

9-0186

50

The Commercial and Financial Chronicle

(2430)

(Current dollars)
(Dollar Amounts in Millions)

Securities Committee
Chairman

dian

N.

of the

Securities

Cana¬

Douglas Young, who is

Vice-President and

Two characteristics of the

a

were

with

Report

this

a

section

which

is

what

required amounts
of capital in excess of those gen¬
erated
internally,
and
by
1959

sion

in

cuss

steadily until 1957, since then it
levelled off. Such an expan¬

some¬

greater

detail the per¬

formance
the

of

Canadian

ing
1960.

We then

devel¬

major

nally

in

greatest expansion has been
Insurance and Real Es¬
in which capital formation

Min¬
Quarrying and Oil with 258%,
capital expenditures by the

fi¬

D.

im.

and

Young

by 663%, followed by

construction industry increased by

of
government monetary and fiscal
policies and pronouncements.
aspects

some

well
In
13.5

200%.

over

1949, Canada's population was
million. By 1959 it had in¬

creased to

It

The

Canada.

of

at

4V2%

the

good to

Gross

tional Product in constant
grew

1

measured

economy,

expansion

the

1959

that

denied

be

of the fifties was

decade

by

to

Growth—1950

cannot

was

greater in 1959 than it was in 1949.

production increased by
There were of course pe¬

Industrial

65%.
riodic

interruptions

in

that

ex¬

pansion and it is of some signifi¬
cance

to

1953-54

that, coming

Canada
and

1957-58, these

million

8,432

8,608

10,923

22,261

104

21,936

22,024

22,304

22,780

22,676

23,052
1

2,127

6,437

203

6,336

6,612

6,444

6,356

6,584

794

1,743

120

1,756

1,748

1,720

1,748

1,708

1,396

920

2,592

182

2,572

2,572

2,580

2,644

2,584

2,524

1,318

2,626

99

2,400

2,628

2,772

2,704

2,620

2,484

Business

3,032

6,961

130

6,728

6,948

7,072

7,096

6,912

6,404

16,082

35,659

122

35,000

35,594

35,820

36,232

36,172

36,020
280

Equipment..

Gross

6,564

Formation:

Construction

and

Domestic

Fixed

Formation

Capital

Demand

150

355

452

272

400

296

596

—101

—55

—120

24

12

—136

40

56

49

300

332

296

412

160

636

336

Nonfarm
Farm

_

_

Total

Change in Inventories
Exports of Goods & Services

1

_

Imports of Goods & Services

4,021

6,657

66

6,364

6,640

6,648

6,976

7,224

6,680

—3,853

—8,062

109

—7,800

—7,976

—8,268

—8,204

—8,300

—8,104

168

—1,405

—1,436

—1,336

—1,620

—1,228

—1,076

—1,424

44

39

60

—16

4

108

—108

no

16,343

34,593

112

33,956

34,528

34,616

35,272

35,624

35,048

16,343

24,763

52

Total

Error

of

Estimate

National

Gross

arising

in

inter¬

Dominion

in

As

most

But

it

creased

migration.

To¬

after
sudden increase in immigra¬

people in general. For ex¬
ample, per capita output in real

real
approximately

of

to

14% ,increase—caused
very

clined

steadily

which

it

rose

lowing

tribution

of

gas

—

1957,

result

a

in¬

attempts to
that

of

Over the period as a
public debt rose
$15.8 billion to $17.1

and

by

comparison

other

numerous

relatively
Statistics of

of the

with

■'

;.

tell

---

story of Canadian economic

St.

during

Lawrence

the

for the

Canadian

begun.

In

the

of

-

machinery and equipment
was

1958.

virtually unchanged
the comple¬

However,

St. Lawrence

the

tion

of

and

various

Seaway

large electric

quarter of

capital expenditures continued,
that for the first time since the

4th

quarter of - 1957, Gross .Na¬
Product fell—by IV2 %. A
was

of

the

declining
of

behavior

de¬
cor¬

profits, for in the first

poration
half

this

of

symptom

-

second

the

ports and inventory accumulation
declined and the previous decline

mand

*

-

Gross

evi¬

a

1960, while consumer expenditure
in total recovered somewhat, ex¬

1959, spending on residential
non-residential construction
on

from

one-sixth

1959

concrete

levelling
off
of
economic activity in general had

tional

Product.*'

and

entirely
smelting of aluminum; the
oil industry, expanding

ample, per capital output in
terms, increased by
17%.

that

National

the

in

combined

Kiti-

Seaway;

dence

so

rise

final

balance,

constituted

decline

in

1959

National

Gross

on

rose

domestic demand fell. This latter

accounted for

and

fifties.

whole town built

mat—a

Product

noted

be

while

that

so

that the accumulation in business

In

only part

also

must

it

inventories in

p^ooortion,, of.

course

development

But

1958.

countries remains, approximately

small

Gross National Product.

The

the

combat

exports and inventory

expenditures actually declined

tal

industry was un¬
usually great. The results of this
increased
production
were
re¬
flected
in
pre-tax
corporation
profits
which,
after
dividends
paid abroad, were up 14% from

year.

from

iron

in

creases

accumulation. Consumer and capi¬

exceptional gains
increase in the agricul¬

the

and

the fol¬

and

par¬

primarily

sector,

facturing

after
of

enjoyed

ticularly sharp rises. In the manu¬

Canada's

billion

a

until
as

mainly by

large increase in the dis¬

tural implements

only

the

period

a

a

inflation through monetary policy.
In addition, the public debt de¬

the

there was some ques¬
tioning as to whether the rate of
immigration was excessive, but
over the period as a whole it has
been accompanied by a steady in¬
crease in the standard of living of

a

and steel showed

whole

Hungary and the United

the

check

ward the end of the decade,

Kingdom,

in

was

determination

the recession

net

Statistics—National Accounts Income and Expenditure.

countries

also

was

government's

from

of

present,
with
consumer
prices rising by
27% and wholesale prices by 16%.

of this increase

26%

Bureau

world, price inflation

17.4 million, with over
or

tion from

Na¬

dollars,

annual rate of about
more
than 50%

an

and

Capital

SOURCE:

ing,

pe¬

Canada's

11,576

8,404

Construction

capital formation in the various
sectors of the economy. The sector

grew

dis¬
important

we

cuss

this expansion has been

tate

over

and

riod,

11,700

8,264

1,600

centered is indicated by the extent

of

same

11,456

8,072

Expenditures

Expenditure at Market Prices__.
Gross Natl. Expenditure in Constant
(1949) Dollars

Finance,

security

the

Machinery

Residual

the

markets

Nonresidential

New

lion.

opments in

Canada

11,283

8,072

of

the

outline

New

Less:

Where

Fixed

Gross

Residential

foreign capital financed a deficit
on current account of $1,429 mil¬

and

1959

11,156

135

Change in Inventories:

program

dur¬

economy

Government

Total

has

dis¬

we

81

8,203

Expenditures:

New

Final

2,616

11,828

2nd Q.

4,837

Total

aged about 24% of Gross National
Product, a ratio which increased

the past decade. This
followed
by one in

over

2,668

11,400

Fixed Capital Formation.

Business

2,676

6,288

Current
Gross

2,584

''

Government

total

penditures on construction and on
machinery and equipment aver¬

brief sketch of Canada's economic

growth

capital spending to

2,658

3,489

Goods

rapid

spending, and the emergence of
a
large trade deficit—not unre¬
lated
developments. Capital ex¬

Report to the Convention:
begin

of

tion

2,664

2,708

1,146

1960-

—

1st Q.

132

1949-59

Seasonally Adjusted

4th Q.

2nd Q.

1959

'

3rd Q.

1st Q.

1949

Consumer Goods & Services:

on

Goods

economic expansion

of the Dominion Securities
CorpnLtd., Toronto, Can¬
ada, submitted the following

We

Expenditure

Durable

Nondurable

of the fifties
the relatively high propor¬

-1959-

Increase

Services

Director

a

similar

in the United States.

ones

Committee,

with

coincided

ruptions

Annual Rates

Percentage

Personal

The

Thursday, December 15, 1960

.

Expenditure

Canada's Gross National

Report of IBA Canadian

.

.

1960

mately 2%

approxi¬

they were

below the comparable

figure of 1959.
One
mildly " optimistic

factor

during the first half of 1960 was
regions; the and natural gas pipeline projects that
personal
expenditures, on
construction
of
pipelines, carry¬ resulted in a decline from the consumer goods and services were
ing
oil
and
natural
gas
over' previous year in non-residential 4% higher than during the same
thousands of miles
all these construction, and this was offset, period of 1959. However, this 4%
projects, and others which we like almost exactly offset, by a corre¬ increase in personal consumption
in

known

and

power

new

—

believe

to

INCORPORATED

An

Exchange Place, New York 5, N. Y.
NY

feature

development

of

of foreign, and

particularly United
participation. From 1949 to

States
1959

Underwriters

—

foreign investment in Canada
increased from $7,960 million to

Distributors

million,

$20,680

STATE

AND MUNICIPAL

amount

large

BONDS

this

Of

investments

the

of

result

of

throughout

decade.

Half Century of Efficient and

It

Economical

Service

the

that

cial

New York, N. Y. and
We afford

economies

Jersey City, N. J.

and

other

again

that

United

advantages to

to

The

Write
and

for

State

our

their

Original Issue

and

Transfer

Tax

Rates.

1957-1958

Registrar and Transfer Company
New York 7, N. Y.

15 EXCHANGE

BEekman 3-2170




PLACE

Jersey City 2, N. J.
HEnderson 4-8525

This
mo3t

a

a

tion
than

Merchandise

Corporate
the

In

to

rose

Profits Lower

first

quarter

Gross
an

National

annual

rate

of

1960,

Product
of

$35.6

an
all time high. How¬
much of the impetus for this

billion,
ever,

rise

was

given by substantial in¬

exports

difficult

is

the declining levels

of the second

Strong

from Europe for
primary products has

demand

Canadian

for

prosperous.

Economy,

In

that

National Product

was

increase
of

was

the

shared

by

Canadian

However, forestry with

9% increase, mining with a 10%

increase, and public utilities with

July

quarter, while imports have fallen
from
second
quarter
levels.

and

RIPP &

in

August of this year have
shown encouraging increases from
and

prosperous

new

sectors

economy.

were

coun¬

record, $34.6- bil¬
about 6% above
the figure for 1958. Allowing for
price increases, the volume of out¬
put in 1959 was some 4% above
the previous year.

Established
1899

two

recession.

the Gross
a

During the first half

therefore, Canadians
spending a greater propor¬
of their
disposable income
they were last year.

of this year,

United

1959 was, for Canada,
recovery
after

the

reached

half of 1959.

rose

continued

of

lion, which

50 CHURCH STREET

it

very

Canadian

one

year

rising tempo of busi¬
ness activity with increasing total
employment and a falling per¬
centage of unemployed.

which

together,

without

be

The year

free booklet setting forth the Current Federal

Stock

terized by a

com¬

1959-1960

stockholders.

1958.

over

Overall, 1959 was a year charac¬

reminded

of the

those

of

States,

Canada

4.5%

past

in

3%
fur¬

thermore, personal disposable in¬
come,
or after-tax
income, only
increased
1.8%
over
the
first

expenditures during 1959
$2% million or

and the finan¬

closely

underwriters, distributors, corporations
and

were

economies

move

indeed

the

mere

in personal income;

;

markets

tries

and
States

decade

a

States and Canada

.

a

-'

also

was

Canadians

AS TRANSFER AGENT
in

individuals

by

steadily
a

As

a

ernment

Canada's

resi¬

by

States.

of the United

panies

Over

United

75%

this, the proportion of
industry owned or con¬

Canadian
trolled

than

more

accompanied by

increase

very

million.

$12,720

increase

represented
dents

of

the

by

or

was

in machinery

increased by about

the

over

increase of investment
and equipment. Gov¬

sponding

perhaps

past ten years has been the extent

HAnover 2-6900

1-1334

and

important

Canada's

Teletype

with

with a
certain boldness,
lie behind the
statistics of economic growth.

W. H. MORTON & CO.

20

conceived

were

imagination

CO., INC.

AX-EXEMPT BONDS

Volume

192

Number

6012

.

The Commercial and Financial Chronicle

.

.

Net New Issues of Securities

(i)

(Millions of dollars)
Government of

Treasury

Canada and

Bills

Guaranteed

and

Provincial

Municipal

Bonds

Notes

Securities

Securities

Debentures

1958—

Corporation

Finance

Total Net New

Of Which

and Other

Company

Issues: Bonds,

Net New Issues

Bonds and

Paper

Bills & Short-

(ii)

term Paper

Payable in
Other Currencies

—(Par Value in Millions of

1st

Qtr.

204

2nd

Qtr.

264

3rd

Qtr.

307

4th

164

—100
301

—

157

40

203

189

130

268

105

38

111

119

81

21

,

avoid any expansion in the
supply
of
money, during
1959
and

bility

throughout most

The

Governor

ada

howpwr

last

several

478

130

17

838

221

—68

494

—33

937

34

490

months,

Bank

of

607

Qtr.

48

2nd

Qtr. —129

360

3rd

Qtr.

—185

69

125

92

24

-9

117

152

4th

Qtr.

405

53

147

103

54

20

783

101

Qtr.

128

48

50

88

184

52

549

122

Qtr.

24

-160

199

97

144

the

in

has

•

from

lst

2nd

200

86

-33

"

.

84

32

24

90

12

460

Net

(i)

New

'

are

an

Forestry

1

Fishing

___

Quarrying
Manufacturing

Bank

of

as

gross

Corporate

Canada

new

issues

to maturity
bonds.

of

less

retirements.

one

year

or

less.

•

k

Notes with

,

,

an

original term of

....

.

,

than

more

'

,

Retail

year

one

Millions of Dollars

Commercial

,

l

of

our

during

exports

the

first

budget

favorable.

last

housing

Contracts

and

awarded

business

for

that

than

ernment

anticipated by the Minister of Fi¬

eight months. Other forces
unfortunately
have
been- less

when

nance

t •

he

estimates
April,

presented 1

in J Parliament

after

it

that

earlier

had

Security

Markets

in

to

intended

Total

bring budg¬

Canada

neering construction have fallen.
The year 1959 was notable for
The seasonally adjusted industrial
production index moved down to the very high interest rates which
164.4 in July, and although it rose prevailed.
The
lingering
after
slightly in August and Septem¬ effect of the 1958 conversion of
ber, it was still below the May Victory Loan bond issues, the gen-?
business
level and much below the high;; eral
recovery,
the4 in-,
of
173.5
in January^ Shipments' creased demands for credit,', the
.

became

been

these

generally

economic

known

contributed

factors

to

bor force

About

5.6%

of the

curities by the chartered banks in

la-„ order

unemployed in 1959
and in 1960 that figure has risen
was

all
in

to

increase

contributed
interest

to

general
a

well

over

6%

on

a

seasonally

rates.

new

loans,,

,

1959

The

interest

rate

slackening

since

the

part of this year, and the
dian

national

gross

early

abated

reached a low of
1.68%
on
Sept. 21. Since that
time, conditions in the market

have

become

interest
were

issues began to slack-,

somewhat in

1960.

'•

product

lor

levels

rate

Canada

in

In

ad-

dition the Minister of Finance

an-

tween

approximately

5.50

and

interest

rates

those

and

This in turn has

direct

on

bearing

change
for

it

for

the

to

Canadian

obtain

in

the

233

,

114

193

333

73

32

244

663

68

182

168

:

Bank and Insurance Stocks

*

Telephone: LExington 2-7300

This

in

United

,

.

.

January

:

"

-

1960

Total Index

and Gas

Industrial

'Production

Manufacturing

Utilities

237.1.

144.6

258.3

159.6

146.4

258.0

162-0

146.0

258.1

161.8

150.2,

264.6

245.3

___^_

March

246.0

April

250.5

1
_________

July

Electricity

Mining
______

May

r :
.

,

■

;

.

„

'

166.2

247.6

J

149.9

262.0

249.9

/

150.0

268.2

250.8

r

148.8

,260.9

148.1

270.6

164.2
168.3

165.4

of

United

has

164.8

.

,

August

245.8

September

264.1

150.1

280.7

Octbber

261.3

154.8

278.1

171.9'-

November

260.7

148.4

285.3

166.7

December

260.9

151.7

284.9

January

257.5

156.7

287.5

February

257.6

152.6

288.9

'

April

V.

interest

rates

Interest

on

153.3

299.6

171.9

149.1

290.4

166.6

May

261.6t

149.1

254.8t

149.2

July

252.4t

145.6

tPreliminary.

Source:

"

293.9

167.9

300.1

167.5

296.6

164.1

Bank of Canada Statistical

Summary.

.

,

1

■

i

t.

!

!\

SPECIAL SITUATIONS

HETTLEMAN & Co.

for

already

ONE WALL STREET

NEW YORK 5, N. Y.

Telephone: WHitehall 3-5770

the part of
the United States and other coun¬

tries

in

the

development
and

resource

industries

also

Ca¬

of

secondary

remains

a

factor.

begin to bor¬

less in the United States and

foreign

interest

in

MUNICIPAL

BONDS

Canadian

economic development should de¬

cline,

then

Canadian

the

premium

on

dollar

would

tend

the

disappear.
The

SPECIALIZING IN ODD LOTS

to
:

Canadian

stock

market

closely followed the trend of the
States

ing

1959

ent

peak

stock

market

reached

and

an

of

dur¬

appar¬

during the fall of that
Since then the decline in

prices has been
persistent, but lacking
panic

distress.

or

speaking,

stocks

have been at
time

and

a

no

from

parent

held

relatively
any
sign

Generally
on
margin

low level for

LEBENTHAL& CO.lNC
135 BROADWAY, NEW YORK 6, N.Y.

Oldest House in America

•

REctorZ-1737

Specializing in

ODD LOT MUNICIPAL BONDS

some

danger seems
this source.

The

ap¬

1

policy
of
the
during 1959 and
1960 can only be understood after
recollecting the nature of that
policy in 1958. It will be remem¬
monetary

Bank

of

bered

that

Canada

Brokers and Investment Bankers

Canada

in

195.8

permitted

the

Bank

the

Municipal and Revenue
BONDS

of

supply of
money to expand by about 12%.
This, it was officially admitted,
,

more than
could be justified
purely economic grounds, and
resulted substantially
from a

was
on

Affiliate of

it

YAMAICHI SECURITIES CO., LTD.
TOKYO,

JAPAN

need

to

finance

government

deficit,
bank's

and

large Federal
budgetary and cash
a

from

decision

to

the

.central

support




NEW YORK 6

COrtlandt 7-5680

eral

government.

The

Canada

result

was

deemed

it

that

RAND
ONE
NEW

&

WALL

YORK

CO.

STREET

5,

N. Y.

the

huge Conversion Loan of the Fed¬
111 BROADWAY,

Bank

of

necessary

to

BONDS
/NOOOLOrs
j

Monetary and Fiscal Policies

YORK, INC.

170.1

264.0

251.0""

June

•Revised.

169.5

173.5
■

re¬

States

stock

of NEW

163.1

,-

States.

investment

the

mentioned.

year.

YAMAICHI SECURITIES COMPANY

Public

and

the Canadian dollar

on

United

Japanese Securities

and Commerce—Private

'

bor¬

cently taken the form of rather
large sales of new Canadian bond

if

100 Park Avenue, New York 17, N. Y.

242

,138

considerable extent,

a

row

of Securities Dealers, Inc.

172

1,312

8,411

from

funds

If Canadians should

Corporation

531

384

It must be realized that the pre¬

nadian

Member National Association

a

the rate of ex¬
Canadian dollar,

encourages

rowers

reasons

'

Central National

168
,

the

of

United States.

issues

and

Industrial Stocks and Bonds

,100

6.00%.

has,
resulted
from heavy foreign investment in

Utility, Railroad

?v.

1,759

obvioUjS that a wide mar¬
gin still' exi$t$!. between Canadian

Canada.

i

183

822

is

nounced last April that the gov-"- mium

UNDERWRITERS, DEALERS and DISTRIBUTORS

of Trade

Canada.

March

bills,

91-day

■nTt

to

Public

77
258

3,539

,

_

Department
in

June

slightly tighter and

follows:

as

sources

Cana-

25

'

1,848

,55

195

Departments

February

90-day

on

bills

Treasury

dramatic rise, For
In
the
short

Canadian newsprint industry and
en, the demand for ..bank credit
possibly the steel industry majrr
eased off, and the liquidation < of
experience
record
years.
TheR
government of Canada securities
gross
national
product
for the
the chartered banks finally,
full year should exceed the rec¬ by
came
to an end.
ord 1959 level.
However, the Ca¬
The concern over the threat of
nadian economy, as that of the
United
States,
has
experienced inflation,
so
obvious
in
1959,
some

Increase
1949-1959

(1949;= 100)
,

market.

term

flow of

1,074

'

steady strengthening in the bond

3.50%;
market, this rise culminated For
long-term
Government
of
in the 90-day Treasury bill rate
adjusted basis.
Canada direct obligations, ap¬
This is not to say that 1960 will attaining an unprecedented 6.16%
proximately 5.30-5.40%;
on
Aug 12. After that, however,; For high-grade, long-term cor¬
be a bad year for Canadian out¬
conditions
became
easier.
The
poration bonds, somewhere be¬
put.
There is evidence that the
to

52

Seasonally Adjusted Indices of Canadian Production

a

manufacturers, although show-;, determination of Bank of Canada interest rates in every segment"
ing a. year-to-year improvement to hold the supply of money steady of the bond market have risen
in
August, have been declining and the selling of government se-. moderately. As of Nov. 17, 1960,
still low in relation to in¬

536

Estate__

All

of

ventories.

Trade
Real

&

Industries,,

Investment

forecasts

optimistic.

overly

All

Source:

etary and non-budgetary revenue
into bfetter balance. Shortly there¬

his

engi¬

and

46
344

689

_

Services

Government

smaller

26

4

Services

Institutional

be

page

•

:■

will

emphaexpansion

555

96

_

Wholesale

Insurance

pmntl!1

on

1959

443

_

and

Can-

Percentage

1949

.

2

___

Finance

v

.

Statistical Summary.

important element in the, 1960

an

are

rPPPnt1v

*

and'Oil

Utilities

Housing

sta-

money,

of

Expenditures

i.

__

Minirig

62

305

and

of

Bank

Continued

relent-

?

Agriculture

„

-

original term

with

included

SOURCE:

defined

Issues

Paper with

(ii)

and

of

slze<^ that he hoped the

Industry
,

rigid

supply

^

Construction

trend

policy of

the

...

100

1960^-

been

51

(In Current dollars)

1959—

•/

its

in

a.da'

Canadian Capital

25

,

In

doubt

no

Canada

71

Qtr.

1st

1960.

softening economic
conditions, there have been signs
that

—26

of

ed

to

response

Canadianpollars)—

(2431)

i

s

Telephone WHitehall 4-3432
Teletype NY 1-838

LcBENTHAlt/CO..

»

52

and

control,
this
government's
position is
clear.
We
welcome
capital into Canada, if, when here,
it is willing to act as if it were

Report of IBA Canadian
Securities Committee

1

present unemployment cannot be
cured by the blunderbuss meth¬
ods of over-all large-scale mone¬

Continued from page 51
of

the

tinue

money supply
to be modest.

would con¬

We would be remiss in
if

duty

our

did

we

not report on the nu¬
public speeches which the

merous

fi¬

deficit

tary
expansion
nance."

and

Borrowing

Too

Much

Canada, Mr.
Coyne, has made in re¬
cent
months.
In those speeches
the Governor expressed his views

has

emphasized

on

rowing

of

unemployed

attracting

considerable

Governor

The

is

ment

our

ments in

our

variety,
maladjust¬

He

exports.
up

our

that

sees

that

reasons

as

Oct.

he

For

so

is

for

said

as

re¬

.

our

.

from

the

government

this

the

reason

statements

made

It

that

5

naturally

have

Canada.

of

be reduced and

increased.

is undesir¬
grounds.

on

emanate

to

over

industries

degree

foreign participation in
the Canadian economy. Any such
controls would,
of course, have

need to build

a

can

employment
cently

imports

secondary

imports

these

of

present

ownership

views

posed

economic growth oc¬

excess

the

prompted
speculation over the
probability of controls being im¬

curred in the past decade. He em¬
phasizes
one
maladjustment in
particular—the growth of a sub¬

stantial

from

non-economic

on

These

be¬

that

foreign

able

unemploy¬

structural

bor¬

Minister

in

a

further

ranted.

Government

Interfering

At

the

local

government

massive

spending.

An

Parliament

it

and

early

has

already

called

was

take

the

meet

to

tion

of

imported
will

purposes

CO., INC.

to

this,

the

has

J

Minister

The

Markets

organization is well prepared to

us

and

4.76

4.75

3%

4.90

4.83

24

4

5.11

4.92

July

29__—

5V2

5.47

4.89

Sep.

30

Oct.

28

;

5.33

5.13

4

V2

5.50

5.30

4Vs

5.02

5.17

4

4.86

■V:

serve

5.14

25

Dec.

30

4

5.12

5.30

Jan.

27

3

4.60

5.41

Feb.

24

41/4

4.61

5.31

3

3.01

•

r_

___

Apr.

27

3 V2

3.26

May

25

2 Va

3.01

Jun.

29

3

July

5.22

3.07

4.85

27

3 V4

2.92

4.88

1%

2.01

Sep.

1

1.70

4.66

3

3.03

4.92

28_
26

i

Bank

of

Canada

4.65

Statistical Summary.

(Seasonally Adjusted)

of

areas

is

also

will

the

character

of

February

economists

V

information

rather

easier

to

of

been

case

have

to

it

should
appro¬

than
in the past.

left

economic

clearly

the

Fifties
with

problems.
by

This

Cana¬

It is encouraging that con¬
are

now

16,093

2,655

16,149

2,62.6

13,394

16,020

2,§08

13,544

*»'.

2,5.71

13,484

jA

2,548

13,639

___

16,382

13,697

2,685

16.152

16,055
16,187

November

2,591

13,692

16.283

December

2,395

13,656

16,051

2,522

13,761

16,283

13,300

15,935

January

;

___

February

2,635

March

2.558

13,199

15,757

April

2,575

13.679

16,254

May

2,675

13,595

16,270

2,623

13,674

16,297

2,514

13,528

16,042

July

;

;

___

Source:

Bank

of

Canada--Statistical

Summary.

Canadian Price Indices

being made

1•35-'39=100

1949—100

1959

January

Consumer

Wholesale

Price Index

Price Index

___

February

.

___

126.1

229.9

August

September
October

_.

"

February

'

March

231.2

'

November
December

Source:

'

126.4
—

—

__

__

January /u

230.9"

125.9
__.

1960

230.6

June

July

Consumer

125.5

125.6,

_____

1949—100
Price Index

125.7

125.4

April

Canada

recognized

16,020

With this

devise

of

16,125

June

June

May

prosperity

15,891

<

May

study

unemployment

the

13,355

13,494

September r.u'_
October
.___*

un¬

13,282

13,407

2,671

13,441

_

August

.

2,609
2,718
2,652

___,

July

engaged

to

•_

April

do now, for

we

Senate has

Trade

<.

March

more

our

Total Retail

Stores

January

hope

know

All Other

Dealers

(Millions of Dollars)
1959

pro¬

to

reason

soon

Motor Vehicle

128.0

'■

230.6

June

231.1

August

__

__

September
October

230.2
229.7

Canada Statistical

__

__

230.0

127.9

of

■____

July
A

__

Wholesale

Price Index

127.5

230.5

127.2

230.0

126.9

230.9

128.3

Bank

April

May

231.0

127.1

viA

231.2

_

\35-'39=100

__

__

__

CANADIAN

231.3

127.4

231.3

127.6

231.9

127.5

232.2

127.9

230.2

128.4

230.4

129.4

230.3

Summary.

SECURITIES

complete facilities for Canadian

to

stock and bond

execute

exchanges,

orders

or

at

promptly

net

on

trading

en¬

all Canadian

prices in United States

funds if desired.

Wood, Gundy & Co., Inc.
40

Wall

Street, New York 5, N. Y.
Telephone Dlgby 4-0633
Affiliated with

14 Wall Street

1

Wood, Gundy & Company
Members

The

Toronto

Stock

Exchange

Canadian

of

Montreal

Stock

Exchange

Telephone

Stock Exchange

Dlgby 9-2850

and

Wood, Gundy & Company

James Richardson & Sons,Inc.
Investment Securities

New York 5, N. Y.

Canadian Affiliate

James Richardson

a Sons

Established 1857

Limited
Head

Serving Investors Across Canada
Office—36 King St., West, Toronto I, Canada

Branches in the principal cities of Canada and in




London, England

229.6

127.5

serv¬

and

'1,

5.22

5.06

■

Aug. 31

to

combat¬

on

with affiliated offices

service in Canadian securities,

/

Canadian Retail Trade

other

of

problem in depth.

The

5

Nov.

Source:

Can¬

principal Canadian cities provide fast

accurate

stock

4 V2

27

readily available to investing institutions,

in fourteen

able

29

Jun.

Experience

Direct private wire connections

and

Apr.

May

Oct.

government

hear ideas

to

we

seems

banks and dealers.

v

4.72

of experience in Canadian invest¬

investors interested in Canadian securities. Our
are

; 4.54

4.30

Century

a

of Investment

ices

4.07

4'A

Trade

of

leaders

and

scious efforts

our

M/v

4

,

current

dians.

ments,

:

25

en¬

Conclusions

I

4.35

Mar. 25

has called his for¬

exports.

''J

private

iv'

Feb.

March

is

50 years

4.42

4.27
y.'

<4.44

10%

for increasing

ways

certain

over

3.49
3.28

un¬

will

meet businessmen

to

problem

'f

With

2.88

1%

priate policies for countering the

W. C. Pitfield & Company Limited

Over Half

1V2

Percent

domestic production. Be¬

additional

An affiliate of

Canadian

26

Mar. 30

already consulted with busi¬

that

NY 1-1979

all

2.83

31

duty

by

extent

efficiency in all

be

covering

2 Vi

3t4% Oct. 1/79

28

1960

step

for

cars

increase

some

competent

Street, New York 4, New York

system

Percent

Percent

Dec.

taken a few months ago. Be¬
ginning Dec. 1 the official valua¬

that

iMm?

wire

official

Canada

Bill Rate

Jan.

was

employment than

direct

begun,
view,

Government of

Treasury

1%

of

of

problem

One

the Canadian

a

a

91-Day

Loan Rate

'

.

Aug. 26

1960

w&M

Canada and

1959

doubt, to considering what spe¬
cific steps the government might

about

across

with

new

the Month

Day-to-Day

29

Nov.

,

duction.

Mi#

IT offices

1958= Oct.

deficit

session

provide

opportunities for
secondary manufacturing. We be-

(Closing Rale)

I

no

er

coast-to-coast

HA 2-9251

by

efforts

into

Her grow¬

Interest Rates

unemployment, and
a
Productivity Council ? has been
established to work toward great¬

Our Canadian affiliate maintains offices

Broad

that

wide¬

profitable

and

Last Wednesday in

spending
move
by the

Federal

ting

wire service.

30

quality

government

a

There

fgjf
mm

controls,

suggests

without

ada's

prompt execution of orders in American

W. C. PITFIELD &

and

or

with business.

States—will

United

for

quantity, location
of her natural re¬

The

will be made to stimulate business
and

has

Canadian securities including latest quotations

a

inflow

of

age

an

population and remarkably
high and rising standard of liv¬
ing—second only to . that of the

economy.

opportunity

great

in

ing

believe, remains a

we

of

market

free

a

freedom, cause
to falter, initiative to

government

tawa

extensive investment service in all

leading Canadian cities and

of

ference

require¬

and

investors

to

in broad harmony

are

concepts

Canada,

present the broad outline of
fiscal policy. of the Federal

groups

in

ments

freeze, and capital to take flight."

nessmen

llifi

the

eign Trade Commissioners to Ot¬

Securities

funds.

which

with

with

confidence

discuss

and

that

stated

capital

on

and Commerce

an

ones

will

adopted

peace and prosperity,
free society . ." . are not war¬

sides

We offer

spread political unrest and inter¬

solutions

•

outflow, "In

courage

Canadian

responsibilities."

the stability of her

be

that

business.

which

ownership

were

and

sources,

political administration presents a
singularly attractive combination

problems.

land

Canadian

its

Minister

to

it

Thursday, December 15, 1960

.

When
this is
done, appropriate policies will no
doubt follow, and indications are
those

of

employment.

"As

if

as

.

character of

to define in detail the

foreign capital in this country is
becoming increasingly
conscious

by the Minister of Finance,
Mr.
Donald
Fleming, regarding
flows of capital into Canada, are
of
particular
interest.
In
his
budget speech of last spring, the

said,

not

foreign.
During
the
past
two
years
there has been increasing
evidence, in many quarters, that

addition,

In

means.

own

feels

of

attention.
to

our

he

of the structural

that

and

of

workers

appears

lieve that much of

capital

much

too

is

live rather more within the limits

which is at present

increase

—an

Canada

view

and

restraints

other countries and that we should

which Canada faces, not the least
of which is the increase in the
number

his

in

that

basic economic problems

some

Governor

The

E.

Canadian

The

Governor of Bank of

James

Chronicle

The Commercial and Financial

(2432)

Volume

192

Number

6012

lieve the quality of her people is
such that these opportunities will
not

.

New

CANADIAN

ToronTo°no^ftCUritieS
C°rpn- Ltdloronto, Unt.

Norman

J.

Mills> Spence & Co. Limited

• - marketing

Toronto, Ont.

Vice-Ch-m

w'v-

b-

Capital

George p. Rutherford

or~

porated, New York, N. Y.

New York, N. Y.

.Form Business Brokers

^ i,1

F. B.
New

securities business from offices at
7118 Bea£?n Avenue. Officers are
Wilbert ^ Hamilton, President;

Ont
u

i

1

*

WW

a

Ashplant & Co.
York, N. Y.

Frances

L.

G.

Beaubien

&

Co., Ltd.

r>

n

,

m.

OAKLAND, Calif.

Nesbitt, Thompson & Co
Toronto, Ont.
1

Met?an and Eric Cochrane

Ltd

ing

York, N. Y.

tax

competitive

position

zuelan

in

oil

Hannaford, Ltd
Montreal, Que

Gerard

'
TppLp

V

elsewhere
G.

Rene

T

in

in the

gentina.

are en-

trade

moved
Free World, for
has

will

few

next

of

foreign
continue for the
at about the 1959

believe

We

spending

years

rate.

Other

creased

interesting
Dividend
each

accounted

financial chronicle)
NORTH MIAMI, Fla.—Jules Zappulla is conducting a securities
business from offices at 901

lncorporee

Montreal
One
Monti eal, Que.

Vene¬

example, to North Africa and Ar¬

,c

Gimrmc

for

world

investment

evident.

Dawson,

unfavorable

an

trends

are

in¬
and in 1958-59
slightly over 20%
payments

year

for

funds available, reflecting the
declining need of funds for rein¬
of

vestment. Much less

was

added to

working capital in recent years
compared to the 10-12% averaged

Northeast 125th Street.

in

Statistical Appendix

In

1950-52.

percentage
in

1959

1957-59, additions

Canadian Deposits*
Millions $
l!>.»8

October
November
December

1959

ing
no

for

outlook

capital spend¬
outlined thus far indicates

as

material change from the 1959

level

for

several

compiled

Figures
Department of

years.

the

by

Commerce and Securities and Ex¬

change Commission forecast

de¬
clining trend in the latter half of
1960 which should carry over at
least

into

is

first

the

Contrasted

with

half
the

a

of

1961.

spending

currently rising leyel
of earnings.
How long this favor¬
able

a

direction

maintained

is

1960

781

.y.

1M63
11,436

n'739

I'S

11,456

1,815

13,271

13,318
13,438

—

$

billion

1,764

"

11,519

1,799

11,490

1,848

August
September—

11,482

1,803

11,353

1 785

13 138

October...

11,388

1,842

November

13,230

11,408

1,801

13 209

December

u,360

1,832

outlook. Barring

significant de¬
cline in economic activity in 1961,
oil industry earnings have a better
than
even
chance of increasing
moderately over 1960. If business
a

conditions continue to deteriorate
well into 1961, then oil industry
earnings must accordingly be re¬

vised downward.

At the

January—11,297

'

one:

cash

capital

flow

is

spending

increasing ana
is being main¬

tained not far from the 1958

With

r

respect

from

1,778

13 075

billion)

1,753

131054

tures

1,772

13,045

11,282

1,836

13,118

the

earlier

11,467

1,786

13,253

of

Funds."

13,283

combined

1,882

13,296

13,235

ll,561t

1,767

13,329

small

ll,825t

1,760

13,586

and

September
October

total

float.

■

tLast Wednesday
SOURCE:

tank

1,894

;

'

•

J

is

for

of Canada

Statistical

V

Summary.

table

as

of

earnings

on

revealed in

"Disposition

Reduced

with rising

thought

level,

survey

and

our

condition of the
at
the
time.

is

in

general

try may initiate a greater rate of
capital investment than can be in¬

ternally

financed.
money

Recourse

markets

to

would

of

money

long

necessarily increase at that point.
The form of financing would de¬
pend upon a variety of factors.
If oil equities are then selling at
depressed prices relative to asset

value, earnings, and dividends as
is currently evident, debt financ¬
ing might prove more attractive.

for

sarily be applied to a single com¬
pany even though the particular
company may be included in these
tabulations.
Companies included
in

this study comprise only the
larger corporations in the oil in¬

The

smallest
company
net worth, accord¬
ing to the 1959 year-end balance
dustry.

included had

a

sheet, of $43 million

and an ap¬
praised value of $135 million. No
attempt has been made herein to
discuss the financial problems of
the

many smaller
companies in
this industry some of which face
voluntary liquidation or ultimate¬
ly involuntary liquidation.
The
unfavorable trend faced by many
smaller
companies
was
first
brought to your attention in our
1958 report in a paper relating to
the trend toward integration.

Our
the

conclusions

financial

that

indicate

strength

of

many

large oil companies rivals that of
the strongest American corpora¬
tions in other

industries, and the
financing
probably will not increase impor¬
tantly until the mid-1960's.

volume of

oil

company

Outlook

for the International

Oil Companies

;

The

development of major new
production capacity in
North
Africa and continued increases in

produceability elsewhere indicates
that the problem of

surplus sup¬
ply will persist in the free for¬
eign oil^Jndustry for at least the
next

several

years.
The profit
foreign oil operations
during the first half of the 1960's
no longer appears more
promising

outlook for

Continued

on

page

term

cost
the
debt

preferred stock

financing in
relatively poor demand
equities since 1957 held

The

oil

equity

financing

to

a

minimum.

distributors

of

Corporate and
BONUS
;

.

'

u

t

1

%

J .y

>

!MaRKETS

STOCKS

\

maintained in all classes of Canadian external
and internal bond issues.

Stock orders executed

Exchanges,

or

"

Municipal Securities

Dominick
Members

the Montreal and Toronto Stock

on

&

Dominick

New York,

Toronto

Stock

American &

Exchanges

net New York markets quoted on request.
NEW YORK 5

14 WALL STREET
DIRECT

PRIVATE

WIRES

CALGARY,

TO

MONTREAL,

TORONTO,

VANCOUVER,

BELL

SYSTEM

VICTORIA

TELETYPE

NY

OTTAWA,

AND

WINNIPEG,

HALIFAX

1-702-3

Canadian

OcmiMOM

£
Associate

Member American

Calgary

40

EXCHANGE

PLACE,

NEW YORK

5

Telephone WHitehall 4-8161

Ottawa

'

'

affiliate

...

Halifax




Affiliate

and

—

Member

Canadian

Torortto, Montreal

Stock Exchanges

Montreal

Winnipeg

of Canada, Montreal

Vancouver-Victoria

•

-

-

•

<

J.

...

.

.

Toronto

1.'

Canadian

.

Dominick Corporation

Stock Exchange

Boston

London, Eng. 'wA

a

of companies cannot neces¬

group

Underwriters and

-i

na¬

for

conclusions

spending

responsible

volume

1959.

_

in month.

cash

($1.17 billion)

1,819

:

sources

through
1959
($0.44
than in capital expendi¬

May

11,416

was

1957

April

11,414

to the

decline occurred in

n,300

11,388

ratio

comparable
billion and

funds im! this JO year period tabu¬
lated in Table IV, a far smaller

11,273

<

the

public

February

_______

current

$6.87

were

March

August

market
(Table V)

moment,

the financial position of the major
oil
companies is an improving

v

13493

.

the

1957-59,

2.4:1.

13,284

v

and

2.5:1; in
figures

13,200

July

July

*Less

1

j'771

June—

/

11 466

-jgj

n,38i

June

;.vj

13 347

x 807

}, JS

May

de¬

pends upon the general economic

the

by

money

This

a year depressed by recession.
Nevertheless, no significant
We
believe
that, as earnings
in liquidity is evi¬
denced by the reduced contribu¬ improve importantly in the middle
of
this
decade
reflecting greater
tion to working capital: in 1950use of present
capacity, the indus¬
52 working capital averaged $4.37

Total

1,792

11,531

February

wifh

.

Millions $

11,555

January—.'

April

dictated

deterioration

Held by Public

,

in

able.

,

of companies should be able
in whatever manner is

group

ture

amounted to 3-4% of funds avail¬

^rr—:
-Supply Of Money
Chartered Banks
Notes and Coin

of

than

other year in the table.

any

trend

Jules Zappulla Opens

Dudley B. Dawson

and

rate

Capital

Building, under the firm name
Cochrane, Mehan and Ayer.

Inc.

in

1958 increase in the corpo¬

a

rate

a securities business
from offices in the First Western

~

Andiew G. Curry
A. E. Ames & Co.

pur¬

1957. Annual investment in Vene¬

in

Sagmg

to

concessions

zuela has declined sharply reflect¬

,

Felix

—

dollars

million

Venezuelan

chase

form Cochrane, Mehan

Montreal, Que.
J. Ian Crookston

New

M.

Sannasardo,
VicePresident
and
Treasurer;
and
Eleanor Edwards, Secretary.

Andrew S. Beaubien,

Foreign spending by American
companies
declined sharply
following the outlay of several
hundred

com¬

Capital Outlays Static

oil

?Y,w,JTVE' Wash' —.Business
l"C'- 1S TgaglnI- ln a

-

larger

a

strong

to finance

earnings

cash

available

funds

Lower

Investments

Foreign

Winnipeg, Ont.

a

prised

The

James Richardson & Sons

r

result,

a

Corp.

•

Toronto

miscellaneous.
in this catch-all
rather constant.

and

needs

category appear

The Dominion Securities

Alexander, Vice-Ch'm

Irving II. Campbell, Sec.-Treas.
Bell, Gouinlock & Co., Ltd.

As

Continued from page 36

oil companies reveals a
equity position and rela-:
tively little debt. Therefore, this

the major

Gas Securities Committee

Masipv

53

However, the point to be made is
that a composite balance sheet of

Report of IB A Oil, Natural

York, N. Y,

Arnold B

(2433)

,

MoXaj? Que& C°' ^

COMMITTEE

Np°Uv8'

•

Inc

Peter Kilburn

Douglas Young, Chairman

George C. MacDonald

Chronicle

Financial

'

Wood, Gundy & Co

missed.

be

The Commercial and

.

Edward S. Johnston

Respectfully submitted,

N.

.

■

54

54

higher levels in a short period of
time.
It is widely accepted that

Report of IBA Oil, Natural

-

Gas Securities Committee
Continued
than

from

that

oil

53

page

the

of

domestic

try.

Combined with the

ance

of

new

many

the

foreign
dustry, this

past

the

In

reserves.

the

oil

in¬

suggests that

the

es¬

and
panies are unlikely to show vol¬ shipments in volume are not far
None of these recent de¬
ume
and
profit trends in their away.
foreign operations as favorable as velopments has favorably affected
stock
prices
for the companies
those experienced in the
1950's;
tablished

This,

international

oil

of

com¬

least) is the view which

at

ery

of

great

a

would have

the

shares

avid

the

the

province
bidding for

oil

new

seen

of

companies

par¬

ticipating in the discoveries. The
generally depressed status of oil
shares

today,

including

of

those

the holders of the most promising

flects

the

tributed

lower

to

the

values

•

\

areas,

foreign

easily

Income

on

expanded

1958

2.46

3.10

•

•

1953-

Return

Total U. S.

Net1

Manufacturing';*

on

—

2.C2

1931

2.09

1950—

1.74

9.2

10.6

9.8

12.5

12.9

12.8

13.9

12.4

15.0

12.5

9.3

12.4

V

-

Chase

addition

In

the

to

increasing

added

the

to

exports
of

weight

entering

(billions)

have

1959

$4.47

2-

•

longer clear to each one that
its interest'is best served in all

is

cutting
need

18

1956——

5.35

71

1955—

4.08

68

12.5
12.3

15.2

8.7

14.4

14.1

9.3

17.1:./

3.76

72

1.04

20

68

1.02

20

1952-—-

3.22

66

0.94

19

1951

2.62

63

0.88

21

1.97

57

0.72

21

v

*The

Bank.

First

National

City

Bank

•••

and

also

mit

compete in more distant markets;
than

less

four

0.41 12

3.44

100

V '

•

..

'

•

•

•

•

nonconsolidated subsidiaries,

to

Chase Manhattan

i'

Bank.

■

III

Refining/Chemical

362

Other

562

1958
$1,873
536
\ 564

$3,037

$2,973

1,229

1,383

$4,266

$4,356

United States—
Production
v

$2,113

"

—

1957

.

$2,294
.

792
690

•

.

..

the
price
problem
very low tanker rates per¬
oil from any given area to

aggravated
since

0.34 10

Capital Spending

as

government enterprises.
The
tanker
surplus has

100
100
100
100
100
100
100
100

(Millions of Dollars)

barrel of produc¬

a

well

e

TABLE

velopment costs and the low mar¬
as

6:78
7.75
7.57
5.95
5.25
5.11
4.92
4.16

interests.

payments to minority
The

4

0.28 / 4
0.23 3
0.53 7
0.37 6
0.16 3
0.31 6
0.49 10
0.49 12

i.;..-vii./;''\ .\V'*

advances

to»

Elimination of the tanker surplus
Manhattan

•'

de

their exploration and

recover

in

17
20

3.48

-

8.1

1.32

1.16

1954

SOURCE:

by the political
factors sometimes motivating th<r

8.8

v;

1953———

t Includes

100

0.17

21

1.41

investments

%

$6.45

8
6
5
6
5
6
5

1.42

Includes

(billions)

3

$0.18

0.55
0.47
0.37
0.34
0.29
0.30
0.27

67

*

(billions) %

5

'73

•

(billions) %

$0.33

5.64

\

.

Working
——Total

23

4.53

in

'

—Capital—

$1.47

by

newcomers

%

(billions)

%

1957——

re¬

accentuated

the

of

to

Increase

Refunded

or

69

prices. The tendency toward

tion,

13.5

Paid-

1958———

1950—

no

to

to

exist. In this situation some cbm-

Long-Term Debt,

,

♦Capital

supply.

refusing

much

iiwpIv

annp„r!!

than appears likely

•-'v"'-' V'":Pfa. & Common
^Dividends
Stocks Retired

Expenditures '

so

by

demand

a

,

greater

Disposition of Funds
'

v

,

operating in the market it is

now

meet

to

able

largest per-

:
.

international mar¬
many
companies

the

With

the

with

and

-

companies
and the
governmental companies, Russia
has vigorously sought an enlarged
market
participation,
and
its
rapidly

very

.';vrtable ii

pri¬
semi-

numerous

vate

ginal cost of

13.6

SOURCES—

♦The

Africa

into the international oil business.

the

11.6%

$13.3

12.7

2.29

—

by

companies

the entry of many new

price

Net

Assets

(billions)

13.1
!

2.32

1952

great¬

a

increased

been

have

demand

duce

.13.3

2.67
_

be

significantly

to

'

1954'

of

circumstances

9.5%

3.G0

1955

these

Investment

on

Assets

$2.69

1957
1C56

in

could

produceability

Return

♦Oils

(billions)
_—

and,

satisfactory,

I

Return

and

,

1859

created by

expanded supply in the face
a
less
vigorously increasing

ly

kets.

TABLE

*;

at

time the major produc¬

Companies

New

a

appears

...

additional

Net

17,800,000 B/D, or a surplus capac
ity of one-third or more.
Many

it

1960s

ing areas of the world have sub¬ The existence of tnese new com¬
stantially increased their ability petitors creates more pressure on
to
export oil. The Middle East, ^•prices than was the case when
Venezuela and Canada are all pro¬
eight companies, several of which
ducing less than they could and had joint operating arrangements,
for
less than their governments con¬ accounted
virtually all oil

at¬

now

and

period,

postwar

same

sider

in Libya and Algeria, re¬

acreage

adjusted to a lower
level than experienced in the im¬
mediate

discov¬

many years ago the

growth

demand

Oil

to have

seems

the investment market appears to
be taking toward the situation.

1 Not

export facilities has begun

involved.

rapid »rate. Inthat by the late
surplus produceability may
be as great as it is today, though
perhaps somewhat less in relation to production.
All major oil
areas are expected to continue increasing produceability, with the
largest volume .increases coming
from the Middle East and North
at

crease

deed,

1960

centage increases appearing in the
new producing areas—North Afnca, Nigeria, Argentina,
etc. In
this situation the outlook for lmprovement in oil prices and profits in the foreign sector is not
encouraging. North African oil
will be coming into a world oil
market which is already depressed. Supplies will be avail-

re-

duceability is also expected to in-

day developed capacity to produce
from 6 to 8,000,000 B/D of crude
in excess of 1959 consumption of

The problems

be

to

Thursday, December 15,

.

.

.

On the other hand, pro-

strained.

in

by additional drilling and the ex¬
istence of a major new oil source
has been confirmed. Construction

produceability

were

exists in the free world to¬

there

extended

North Africa have been

appear¬

year

discoveries

important

several

indus¬

enterprises in
of

sector

Chronicle

The Commercial and Financial

(24:4)

Total U. S

—

Foreign
Total

———

•

'•

.'."r*

SOURCE:

The

Chase

Manhattan

$3,776.
1,677

..

•

$5,453

193<;
$2,297J
713
614

1953
$2,029
694
514

$3,624;
1,364

$3,237
668

$4,988

$3,905

v.

•

•

.

..

Bank.

appears

years

unlikely.

;

An additional factor is t-he trend
for major export markets to be

■>•/

closed

Canadian

local

Investment Securities

have

to

protected.

oil

world

the

production is

trade

as

developed

or

restrictions

Import

*

severely limited the flow of

foreign crude to the United States

and from time to time
producers ask similar
protection to permit a higher pro¬
ducing rate in Western Canada.
The pace of development suggests

market,

CANADIAN SECURITIES

Canadian

A. E. Ames & Co.
Limited
UNDERWRITERS

AND

that in a few years the important
Argentine market will be supplied

DISTRIBUTORS

from
the

A. E. Ames & Co.
•.

**

•

Members Toronto and Montreal Stock

1

Exchanges

OFFICES IN 14 CITIES IN CANADA AND ENGLAND

A. E. Ames & Co.

ing

internal

-

oil.

Further

in

the

future

other countries may well develop
substantial oil production.
In ad¬

fices

throughout Canada connected by

can

reserves

ESTABLISHED

the

panies.

available

market

Prominent

development

activity

1889

provide

you

with

prompt

Canadian

Securities

we

our

private wire system we

and reliable service.

<•

of

seen

15 Broad Street

of

•

New York 5,

N. Y.

Teletype: N.Y. 1-4808

An Affiliate Of

McLEOD, YOUNG, WEIR & COMPANY LIMITED
1

50

to

com¬

examples

are

/

Telephone^: WHitehall 4-1770

to supply the hofne

the established international

this
BUSINESS

in

mcle©d,yoo kg,we hi, I mcorporate d

market, thus threatening to lirnit

Boston

interested

a

dition, in several important oil
importing
countries
local
com¬
panies have gone abroad to de¬

further

New York

Dealers

and

comprehensive knowledge of Canadian investments. With of¬

offer

country may even be export¬

velop

Incorporated

Institutions

later

and

sources,

To

KING

STREET

Shcrbrooke

Montreal

Quebec City

.Ottawa

in the

WEST, TORONTO,

CANADA

Hamilton

London

Winnipeg

Edmonton

Kitchener

Windsor

Calgary

Vancouver

Correspondents in London, England

ENI, the Italian state

oil company, in the Persian Gulf,

Libya, and Tunisia; the Japanese
in the

ventures

Persian Gulf and

/

Indonesia; and the French efforts
to assure a market for Algerian
oil.
An additional example of the
£

dawson, hannaford inc.

oil

new

situation

was

seen

not

13.

-

long ago in Standard of Indiana's
37 Wall Street

NEW YORK

to •/ the

proposal
Thailand

5, N. Y.

given

that

government

the

exclusive

company

rights

on

.

walwyn, stodgell

of
be

crude

&

Co.

Limited

imports.

affiliated with

World

Demand

to

Members:

Soar

Toronto Stock

.

A

great

deal

of

attention' has
.

focused

been

dawson, hannaford limited
Underwriters
Montreal

and

increases

the

on

expected

wide oil demand.

Distributors

of

Canadian

Securities

world

demand

in

large annual

in the

world¬

Growth

in free

the

1960's

Toronto

London, Eng.

per

One
and

•

i

\

is

STOCK ORDERS

with free foreign, de¬
growing about 7% yearly.
of
the
major international

year,

EXECUTED ON ALL EXCHANGES

companies, for example, has fore¬
cast

dawson hannaford & co. ltd.

B/D
B/D

Members Montreal, Toronto and Canadian Stock Exchanges




Exchange
Winnipeg Slock Exchange

The Investment Dealers' Association
of Canada

that

in

1967

free

world

oil
44 KING

demand will amount to 27;5Q0,000

Toronto

The

forecast to average 4J/2% to 5%%
mand

Montreal

..

_

London, Eng.

STREET WEST, TORONTO

compared with 17.800,000
in
1959.
This
increase
of

as

EMpire 4-1131
WINDSOR

9,700,000 B/D over 1959 demand
is greater than the highest esti¬
mates of

WINNIPEG

HAMILTON

CORNWALL

PORT HOPE

present surplus produce-

ability and would result in marked

improvement in prices and profits

£

\

•

Volume 192

Number 6012

-

.

.

The Commercial and Financial Chronicle

.

(2435)
panies and countries will have to
something r from
their

pattern

sacrifice

traditional
if

prices

For

share
not

are

the

of

companies

volume

inevitable

pears

fall

further.

will
tion

sacrifice
severe

price

competition is to be avoided.
Growth
rate

of

comparable

annual

to

increase

in the sales volume

to

lished

free

9.5

foreign demand generally expect¬
ed is therefore not
likely to be
seen

have increased
4.3

MM

their produc¬

B/D

growth in the
production of the

7%

in

independent companies

plies

•

the

and

of

out

the

expected free foreign total of 13.8
MM B/D at that time.
This im¬

ap¬

international

MM

nual

B/D,

or

free

foreign
estab¬

seven

companies to

an

average

increase of about 4%.

an¬

Con¬

profits

sidering also the 3% growth rate

of the established
international oil

expected in the United States, to¬
tal
production
of
the
interna¬

companies.
companies
to

The
as

a

or

international

group seem

tionals,

likely

find

to

themselves serving a de¬
creasing share of the market as
corporate

newcomers

to

free

foreign

amounted

which

to

the

companies
B/D
and

9.6

for

government

independents for

Analysis

of

the

7.6

next

five

years,

While

volume

somewhat

difficult

com¬

growth
this

greater,

advantage could be

MM

an

purely domestic oil

be

more

offset

by the

competitive condi¬

tions expected to continue in for¬

companies

eign

2.0 MM B/D.

probable

the

may

B/D,
of
international

■

the

panies.

production

accounted

and

for

MM

seven,

group, appears likely
about 3 V2% annually

al¬
most negligibly
higher rate of vol¬
ume
growth than that expected

tional oil,
government-sponsored
companies,
and
Russia
enlarge
their/ market participations.
In
1959

as a

increase

over

interna¬

markets.

widely

growth

international

domestic

international

if

years

ly

volume

to

five

next

ment

sales

established

the

over

suggests that by 1965 the govern¬

ever,

Results

within

this

will

vary

how¬

group,

and the best situated of the

those

be borne

ing

in

could

mind
well

that proration-

redound

to

the

growth

years,
though at a slower rate
than the pre-1957 period and per¬

operate to protect prices, they can
also do so to increase their
profit
share. It is notable that Abdullah

haps

al-Tariki's

with

caused

the

over

•

next

several

interruptions

more

by competitive and politi¬

factors.

cal

The

prime beneficiaries
Libyan oil should be the
to

comers

international

from
new¬

oil,

will not find their sales from

offset

by lower volume or
prices
in
other' foreign
These

companies "will

be

who

very aggressively in
whatever production they

on

the

long

world

insulated

by

oil

from

United
the

world

is

to

discourage interna¬
tional prorationing.
)

selling

is

market

the

gov¬

The
gas

Canadian

dominated

by

garded

as

For

companies

or

will

sales

any

liking, however.
of

the

in

concession-

new

to

approach

the levels

ing substantial amounts of

may

situation

indeed

The expe¬

gains.- Even these companies
the

developments.

entirely to

net

find

been

anticipated at the beginning of
this year. The second has been the
granting of export permits cover¬

represent

not

two

natural

has

desirable by the Borden
Report of July 1939

Commission

cost

and

1960

Tne first, is the failure of oil
pro¬
duction to approach the levels re¬

Libya does not object.

these

oil

in

scene

Venezuela

does

not

gas and

indicating the construction in the
1960-1961

period

of

major

regarded generally in the industry
as
a
realistic objective.
At the

beginning of 1960 it

thought

that

production

was

in

the

of the

course

year might average
550,000 to 575,000 barrels per day
and might approach
600,000 bar¬
rels per day by the end of the

In

year.

actual

production

in

fact,

1960

however,
likely

will

average
no
more
than
535,000
barrels per day of crude oil with

end

year

much

production

in

excess

of

not

this

running

rate.

duction at 535,000 barrels per
however
(excluding natural

liquids)
time

Canadian Developments

devel¬

ernment of

above

cou¬

companies to

States

import controls and

have

prorationing

areas.

market, at least

the

as

statements

international

with the suggestion that the Saudi
Arabian take from Aramco is too
low and should be increased.
It

probably this danger of the ex¬
tension of the government's
power
that
has
led
the
international

op, and they need have little fear
regarding the impact of their sales

so

pled

Libya
lower

able

move

holders

,.

the

injury of the oil companies. Cer¬
tainly if the governments can co¬

rience

Sources of Employed Capital
(Dollar amounts in

in

represented

industry, should never¬
theless show relatively good profit

their

TABLE V

companies, especial¬

well

55

still

record

represents

Pro¬

day,
gas

all

an

high, comparing with

only
about 500,000
barrels per
day in 1959. With production of
natural gas liquids

adding

a

fur¬

ther

27,000 barrels per day, total
liquid
hydro-carbon
production
will

be

day

this

about
year

560,000 barrels per
or
an
increase of

8% over 1959. Contributing
largely to this increase has been
some

an

for

increase in the export demand
Canadian crude oil of some

30,000 barrels per day, from 90,000
barrels

last

year

to

some

barrels

per

day

in

1960.

addi¬

120,000

,4.20

15

1.25

1.47

1.48

27.59

100

1955

20.87

85

0.21

independent refiners—is

1

3.39

14

1.20

1.32

0.87

24.47

100

and is

Despite the 8% increase in pro¬
of liquid hydro-carbons,
Canadian crude is now supplying
The second report of the Borsome
55%
of
Canadian
c'en Royal Commission on Energy only
domestic crude requirements com¬
issued in July of 1959 indicated
that the oil industry should take pared with 58% in 1959. This does
not
represent
any
further
en¬
steps to increase the production
croachment of imported crude on
of Canadian crude oil to 700,000
existing
markets
for
Canadian
barrels per day by the end of 1963;
crude. On the other hand it re¬

1954__

19.11

84

0.23

1

3.38

15

1.25

1.44

0.69

22.72

100

sive

failing this it suggested

1953

17.22

83

0.18

1

3.28

16

1.24

1.33

0.71

20.68

100

1952

15.94

83

0.19

1

3.05

16

1.21

1.07

0.77

19.18

100

2.47

15

1.00

0.74

0.73

16.84

100

vestments may be necessary to se¬
cure outlets for crude
oil, as evi¬
denced by Ohio's and Continen¬

2.42

16

15.34

100

tal's

billions)

Com. Stock
&

Surplus

$

1959__

Preferred

—Stock

%

28.84

85

;

;

:

suggest that one easily, makes a
place for himself in the world oil

,

Long-Term Debt——

$

Insur.

—

—Total—

%

0.20

$

1

Cos.

%

•4.71

14

market.

Banks &

Public

Others

$

-Total-

$

%

1.33

2.31

1.07

tems

33.75

100

Most

of

the

oil

sold

through the marketing

moves

of

sys¬

the

international compa¬
area of the market for

nies; the

1958—

27.35

84

0.20

1

4.82

15

1.33

2.31

1.18

32.37

1957

100

25.49

85

0.21

1

4.46

crude oil that is open to all sellers

14

1.31

1.80

1.35

30.16

100

1956__

23.17

84

0.22

1

—the government" monopolies and

1951__

14.22,

84

0.15

1

1950

12.77

83

0.15

1

*

0.95

0.82

0.65

not large
highly competitive. Expen¬
refining and marketing in¬

recent

TABLE

Source

r

•

,

.

/***' *Cash

...

'

(billions)

1959

___

1958____
1957

1956

___

1955

___

1954_
1953

——D ebt

«rj:t
•(

Assets, etc.
%

(billions)

"

Total-

%

3

$0.03

t

$0.32

5

$6.45

100

0.06

1

0.28

4

6.78

100

6.32

82

0.71

9

0.50

6

0.22

3

7.75

100

5.86

78

1.16

15

0.06

1

0.49

6

7.57

100

5.20

87

0.47

8

0.05

1

0.23

4

5.95

100

4.59

88

0.34

86

0.51

7

0.01

10

0.01

0.70

14

0.26

6

1950

3.07

90

0.15

4

plus
0.5%.

■

t
$

1

0.31

5

0.21

4

An

5.25

100

5.11

10.J

e&sentiaL.

Program

qualification

conclusions

%

13

4.38

v

the

(billions)

0.91

89

than

.,„r

$0.22

79

$ Less

•'

'

92

3.70
___

(billions)

ES

Sale of

82

3.90

income

& Com.

5.53

1951

Net

Prorationing

pipe

gas

line

should

situation with

domestic

view to

a

designed

measures

oil

per

output.

that

study

the

flects

the

domestic

adopting

increase

to

The

700,000

day figure quoted by

the Borden Commission

duction

consumption
of
some
4% over 1959, to approximately
860,000 barrels per day, together
with the increasing utilization of
imported crude in Quebec and the
Atlantic

never

was

Canadian

in

increase

an

(to

provinces

^Continued

t

some

on

ex-

page

55

Unlikely

—Stock-

■

(billions) •%

1952

*

World

Funds

Canada's

government

barrels

$5.88

„

—

%

direc¬

IV

Long-Term", -Tfd.

—Earnings—

;

this

to

>

Sale of Securities—

"■

J!.

of

in

moves

tion.

tions

facilities.

If

sary.

the

above

oil

profitability,

the

traditional

pliers,

might

proved.

The

particularly

international

be

countries

many

0.19

4

4.92

1

0.14

4

4.16? 100

volved

0.01

$

0.21

6

3.44

achieved to date

seem

the prospects for

such

and

the

limited

charges.

ment

are

quite dim.

Harris & Partners Inc.

for
suo-

materially

3

capital extinguishments and miscellaneous noncash

producing

international prorationing scheme the outlook for foreign
an

0.13

100

to

neces¬

countries should succeed in estab¬

lishing

0.06

100

is

various

15 Broad Street,

im¬
in¬

Tel.

New York 5

WHitehall

4-0731

progress

to indicate
a

Affiliated with

develop¬

It must also

Harris & Partners Limited
55 Yonge Street,

Toronto 1

Ky

Tel. EMpire

507

2-5751

52

Place d'Armes

*-

Canadian Securities
i

i

«.

"**••••

v-.

•'

.

;

•

.r*..

.

/

;< ,t

Cornhill

London, England

Montreal

' .<•

V- J:

BELL,' GOUINLOCK & COMPANY

•,

INCORPORATED

Inquiries welcomed from institutional
74

investors and dealers

Trinity Place
NEW YORK

Greenshields & Co
64 Wall

(N.Y.)

Street, New York 5

Telephone: WHitehall 3-9525

CANADIAN INVESTMENT

Inc
/

Teletype:.NY 1-3708

SECURITIES

.

'

■

AFFILIATES

Canadian Affiliate:

Greenshields & Co Inc—Business established 1910
BELL, GOUBNLOCK & CO.

MONTREAL




TORONTO

QUEBEC

OTTAWA

WINNIPEG

SHERBROOKE

LEGGAT,

Established
25

1920

King Slreit, W2st
Toronto*

BELL,

GOUINLOCX

LIMITED

LIMITED

LONDON

M.mbnrs

Montraal Stoc:i Exolianga
Montreal

56

(2436)

80%

Gas Securities Committee
tent in substitution for

previously
and a reduc¬

imported products)
tion in rerinery inventories,

par¬

ticularly
in Ontario.
Estimated
producing capacity of the petro¬
leum industry in Western Canada
is in excess of 1,000,000 barrels

that the industry in
1960 has been producing at only
about 50% of capacity. This situa¬
day,

so

is the basic

tion

plaint in

com¬

industry quarters.

some

"National Oil

A

for

reason

may

towards the end of 1960 take
action leading to the

failure

of

of products refined
from
foreign
crude
from
the
eastern Ontario area, thereby in¬
backing

crude

cally produced crude oil. The ex¬
tent of this increase would likely

should

be

taken

The

ment.

by the

major

govern¬

companies

oil

by

throughout

advocating a hands
while many of the
more
vocal smaller independents
advocate
the
adoption of some
form
of
"National
Oil
Policy"
policy,

involving

securing

the

market

(some

barrels

day)
through

for Canadian
tariffs, quotas

crude

per

oil

some

or

measure.

alternative

scale
the
the
what
may

of

study
National

possible

known.

It

situation by
Board but
study and

Energy
of
this

outcome

result

the

full-

government

Interprovincial

Eastern

Canada

pipe

line

effective Nov.

While controversy
to

whether

or

not

has raged as
the Canadian

crude oil producing industry,

after
registering
an
8%
growth
in
1960, can be considered to be in
a
depressed condition, there has
been general agreement that the
natural gas producing industry is
entering a new period of unques¬
tioned growth and prosperity.

government
a

A reduc¬

position in the Ontario market.

Natural

It is known that the gov¬

ernment has commissioned

1960.

pipe line tariff charged

1, 1960 will assist Canadian crude
oil in maintaining its competitive

of
the
250,000

Montreal

the

to

in general are
off

the

ment

gas

natural

and

gas

already by far the
fastest
growing segment of the
Canadian petroleum industry. It

by-products

are

probable that Western Canadian
natural
gas
production
during
1960 will total some 500,000 bil¬

is

action

from it are still un¬
is widely speculated,

the gas scene

on

new

lion

cubic

feet

of

which

about

export 152 million cubic

able it to

and Southern Gas

Alberta

C.

B.

Company (a subsidiary of Pacific
Gas Transmission Company)
has
received similar authority to

also

export to the United States at the
same point up to 458,750,000 cubic
feet of gas per day, and has also

export

for / the

arranged

account of Canadian-Montana

the

Company. Trans-Can¬
Lines Limited has re¬
permits necessary to
enable it to export 204
million
cubic feet per day
at Emerson,
Line

Pipe
ada

Pipe

all

ceived

Manitoba.

projects, involving addi¬
production of some 850
feet per ;day, will

These

cubic

million

require the construction of major
additional pipe line facilities both
in Canada and the United States.
most

be

tfjuaedi

of

Mi»s,

*p®»r

montreaL

Members

»4

the

for

ance

borrowed

of

cost

overall

an

allowance

stock

mon

basis

resulted

12%

of

for

in

the

an

com¬

equity.

fair

allowance

decision

aminer's
overall

18%.

to

first

throught

that

findings

the
the

on

probably

end

to

problem. ;,//v;.

:•

certain

to

in

contested

be

is
the

liance

instances,

protected

the

on

,'/./';' ;//;

.•

Even if the FPC area

court,

in

up

rates

prin¬

economic

'V,/.-'

ciples.

higher

,

//.:

price plan

producers
than those

embraced

by the area price sched¬
presumably
have
to
their cases by the cost and

will

ules

method.

base

Industry

Industry

to

the FPC's

plan for regulating
rates has been mixed.

price

area

In

Reaction Mixed

reaction

many

it is still felt
solution is a natural
Some observers feel that
quarters

that the only

fact, the FPC indicated gas bill.
expected its new plan to the chances for a bill are even
be contested on the ground that it less now that the FPC has adopted
is not lawful under a 1956 ruling this policy because of the policy
itself goes
part way in accom¬
by the U. S. Court of Appeals in
that

the
in

it

City of Detroit case. The FPC
case permitted Panhandle

that

plishing the objectives of legisla¬
tion

(hence the need for legisla-

¥

FOUNDED

z

1885

BROKERS

wells

in

1960

listed, unlisted securities

new

and commodities in the

gas

Canada, it has
that the granting

Western

estimated

been

in

on gas

gathering sys¬

drilling of

additional

of

United States and Canada

export

gas

Canada

in Western

expenditures
the next

few

years

THOMSON & MCKINNON

of some

Exchange

the

to

export

gas

which were authorized
two further gas export

proposals

^J^tO

2

addition

still

are

struggling

'

is

these

to

43

proposal by TransCanada Pipe Lines Limited to ex¬

of

Broadway, New York 4

CHICAGO

obtain the necessary permits. One

I"1

INDIANAPOLIS

TORONTO

offices in the United States and Canada

a

MEMBERS NEW YORK STOCK EXCHANGE AND OTHER PRINCIPAL

port during certain months of the

SECURITY AND COMMODITY EXCHANGES

200 million cubic feet per
day of interruptible gas at Niag¬
ara, Ontario. The other is a pro¬
year

^

.A

s

,

Consumers' Gas Com¬
a small quantity of
near Cornwall, Ontario,
for
service of residential, com¬

posal
gas

Midland Canadian Corporation

the

mercial
in

Dealers in

by

to export

pany

and

Underwriters

area

of

New

upper

WALL

have received
all the
Canadian permits but
still require authorization by the

STREET, NEW YORK 5
WOrth

.

Dealers

Treasury Bills

Municipal Debentures

-■/•>■

•

Corporate Bonds and Shares
Prime Acceptance and Commercial Paper

Federal Power Commission in the

4-5280

Distributors

.

Provincial and

necessary

2

.

Government of Canada Bonds

Both of these export

projects

Canadian Securities

.

industrial "customers

limited

a

York State.

>

United States.
The

Affiliated with:

Midland

Natural

Regulatory

Securities

main

Corpn. Limited

The Investment Dealers' Association of Canada

Midland

Company Limited
Member:

The Toronto Stock Exchange
Canadian Stock

Exchange




MONTREAL

LONDON

Member of 7 he Investment Dealers' Association
of

the

Power Commission

this

case

opinion

Comir ission

on

was

long-

Member of The Toronto Stock
Exchange

the Phillips

issued.

the

Head

In

Federal Power
presented • a
very

60 Yonge

the

the complete
attempting
to

'

MONTREAL

•.

Office

Street, Toronto, Canada
HAMILTON

•

*

KITCHENER

on

hopelessness
of
regulate producers of natural gas
on

Canada

EQUITABLE BROKERS LIMITED
the

year

awaited decision from the Federal

strong statement
TORONTO

EQUITABLE SECURITIES CANADA LIMITED

natural gas industry.

Petroleum

Montreal Stock Exchange

re¬

principal subject to
attempting to appraise
position ad outlook for the
in

During

The

Situation

the

as

fathom

the

Member:

Gas

developments

conventional

utility rate
The Com-«

base type of approach^

if

places more re¬
existing
prices
than

applicable

upon

courts. In

export gas at Emerson.Including
the above amounts, together with

expenditures

by

Commission

producer

decision

Commission's

The

thoroughly

be

the

have not

troublesome

this

and

produce higher rates, it appears

will

rate

we

have,

that consumers, in most

prove

an

otherwise

would

concluding that since the cost rate
base method seems almost always

henceforth, the Commis¬
sion is to use an area price basis
instead of a rate base approach;
demic if,

company-

a

rate

an

Commis¬
subject of

numerous

base method
will, in all probability, result in
higher consumer prices than we

"fair rate of return" is rather aca¬

however,

quite

to

that

" increase
cases
clear that regula¬

of producers on

by-company

914 %;

of

it

make

tion

sought a return of stands
It might appear at seeking

had

17%
sion's

common

allowed

had

return

of

rate

Phillips

the

on

Previously the ex¬

stock equity.

rate

producer

to

Actually, the Commission ap¬
proached the overall rate of re¬
turn by the basis of first deter¬
mining what it considered to be a

'from

indications

the

stating

by

to enable it to

required

projects
in
1960,

fjimited
ctoCw

in

capital, the 11% rate of return on

$500 million.

_

evidence

presented on a cost
basis.
In so doing the FPC al¬
lowed an 11% rate of return as
"fair" for Phillips.
After allow¬
was

Pipe Lines Limited for the extra
facilities

In

Mill"'"-

the

because

so

case

$22 million by Trans-Canada

over

mm

do

this

Phillips

the

attempted

permits will involve total capital

l0ND0N'ENG'
TORONTO

to

point

this

cover

In

FPC

the

Alberta to Kingsgate, B. C.),

man,

in

limit

Gas

departure."

behalf of Westcoast and

ral gas on

processing plants,

Co.

Natural

remanded the case, stat¬
that the higher rates repre¬
sented
an
increase
above
that
which would result, from the con¬
ventional rate base method which
must be used "at least as a point
decision

approach on

com¬

ing

of

the rate base
the basis that it had

case on

a

however,

the

Phillips

use

modity value in pricing gas which
it
produced
itself.
The court,

Alberta and Southern from Cole¬

tems and

&

$36

Alberta

by

the necessary

l

Alberta),

"workable."

not

was

Line to

Eastern Pipe

Nevertheless the FPC did analyze

Company (which will carry natu¬

and

Jus BROADWAY

$95 million

carrier gathering system

million

N.Y.

are

by The Alberta Gas
Company Limited (a

Province

the

in

Canadian

important

spent

common

yoRK 6l

rently the Commission adopted a
broad
program
for
regulating
rates of independent natural gas
producers on an area price basis
instead of confining itself to the

tional gas

to

*«*«"<

made excellent reading.

seen

Trunk Line

Canadian

near

Cardston, Alberta of an additional
36 million cubic feet per day for

construction items

Spe,M,c & CO*lBC

at Kingsgate,

of gas per day

feet

The

Mills,

develop¬
in 1960 was

major

granting of three important
export permits whicn give

the

Thursday, December 15, 1960

position on this subject
Concur¬

mission's

found

Export Markets Enlarged
However,

. .

.

in utility rate base method, which it

increase

21%
"

a

gas.

promise of vastly increased gas
be limited by available refinery
production in future years, most of
capacity to some 30,000 barrels
it for export markets. Westcoast
per day in 1961.
Transmission
Co.
Ltd. has re¬
Wellhead
prices
of
Western ceived all the necessary Canadian
Canadian
crude
oil
rerfained and United States permits to en¬

oil

production to live up to expecta¬
tions has led to widespread dis¬
cussion as to what steps may or

representing
marketed

out

creasing the market for domesti¬

stable

Policy?"

actual

<

with

marketed,

persuasive

tion in the

The

government

the

that

however,

Continued from page 55

440 billion cubic feet will

or

the balance
being used in the field, flared or
lost. These figures compare with
1959
production of 477
billion
cubic feet, of which 364 billion
cubic feet were marketed, thus
be

Report of IBA Oil, Natural

per

The Commercial and Financial Chronicle

.

U. S.
Direct

Subsidiary:

private wire with

Equisec Canada Inc.

Goldman, Sachs & Co., New

York

>>'

.

Volume

192

Number 6012

.

.

The Commercial and Financial Chronicle

.

(2437)
tion

is

less

now

acute). In any
event, * Confusion
continues
to
reign and if the test for obtain¬

growth rates which have been ex¬
perienced in the previous decade
but

ing rates higher than those pre¬
by the price formula is

they

nevertheless

present

be

to

12%

a

rate

stock

incentive

for

attendant

of

return

highly constructive outlook.

began

Capital Outlays

on

It

equity, the profit
assuming the risks

In

the

the

gas

natural

four-year
period 1960-1963
will require about
$8.4 billion as
compared with

transmission

gas

field several decisions

Indications

by the Federal Power Commission
during the year and the results
most

were

disappointing.

about $6.7 billion

during the preceding four

issued

were

of

these

from

$5.2

The

are

funds

internal
billion

years.

that

about

will

be

39%

derived

sources,
leaving
be
derived from

to

need for higher over-all rates of
return to offset the increased cost
of borrowed capital is acute but

latter, it is estimated that about
three-quarters can be expected to

the

allowed

be obtained from

in

the

Commission

compensating
over-all

has

not

increases

«

rates

of

return,

consequent squeeze on
mon1 stockholder.
The

the sale of

the

with

the

securities.

Of the

debt issues and

remainder from

new

equity.

a

The

is

that the equities of pipelines most
concerned with the need for
high¬

The

petrochemical

industry

behaved poorly in relation to
pub¬
lic utility stocks in general.

of New

So

far

rates

the

as

of

return

have

economics of

Gas

Association

issued

its

has

latest

ing the

review

veloped

routes

to

A

further

was a year of many new records
for the gas utility and pipeline in¬

petroleum-derived

dustry.

curred

Sales

increase
the

in

of

previous

showed

gas

volume

of

9.5%

and

year

from sales

to

showed

a

gain

Proved

recoverable

ultimate

of

an

11%.

other

of

rived

chemicals

1930s

aggregated

trillion

that

was

on

development
feet, a new record. Look¬
ing ahead over the next decade, rubber.
AGA projects sales of gas to
The
government

the

which

work

growth

factor

annum.

for

The

out

of

an

about

from

consumers

increase

to

of

levels

a

little

annum.

These

terms

of

both

nues,

are

sales

show

per

over

ulti¬

to

an

annual

8%

volume

Shell

of

research

synthetic

program

fbr

development and production
synthetic rubber during and

after

World War II involved a
considerable number of petroleum

companies which had not devel¬
oped prior commercial production
of

translated
volume

to

research

continuous

output

large
petrochemical

of

"building blocks"
nominal costs.

chemical

etc.)

at

very

Other advances

technology

conversion

of

—.

(ethlyene, ben¬

propylene,

zene,

various

in

these

to

chemicals

>

such

commerce

The
cals

as

economics

have

favorable
of

to

the

been

rapid
that

processes

chemical

same

other

of

replace¬
produced

from

other

materials

of

per

in

....

4

SBR

of Corporate Securities
•

Private Placements

Mergers and Consolidations

F.

Goodrich,

a

synthetic

rubber through

joint

a

venture

with

This pri¬

Oil,

basic

produced.

building

blocks

(Petroleum Chemicals,

Inc., now
Service)
building blocks and has;
entered other joint-venture i
owned

by

Cities

to produce
upgraded chemicals.

further >

.! While the petrochemical
opera¬
tions of Standard Oil of N. J. are

Cyanamid, 'Texaco is a probably the largest per se, the
of upgraded chemicals chemical side of
Shell, Standard
of California, and
ethylene.
Phillips weigh
(5) Standard Oil (lnd.) — Pro¬ proportionately larger than in the
other companies.
On the other
hand, Dow, Monsanto and Union J
Carbide each produces larger dol¬
lar
amounts
of ' petrochemicals r
than any petroleum
company.

Seller's Market Over
extremely wide range
The future outlook for petro¬
building blocks, and upin this growth and more and
graded chemicals importantly chemicals definitely favors con¬
more
petroleum
and
non
major -fields in tinuing rapid growth in physical
petroleum covering most
companies have committed large petrochemicals: synthetic rubber, output, perhaps on the order of
amounts of capital to this field. plastics, solvents, agricultural 10-12% a year during the next
The lure to the petroleum com¬ chemicals and fertilizers.
five years. The outlook for prof¬
pany has basically been the op¬
(7) Standard Oil of California— its, however, is by no means as
portunity to upgrade petroleum to Produces detergent raw materials,
/ Continued on page 58
chemical products that often
yield
brace

As the output of petrochemicals
so
did the desire to share

an

of basic

-

10-15 times the
revenue
for
similar bulk of fuel products.

a

■

Industry Fundamentals
While it is not possible to char¬
acterize exactly the entire
chemical

field

fundamentals

of

petro¬
certain

today,

should

materials

new

be

recog¬

of

MM

commerce

capacities to produce petrochemi¬
cals, both basic "building blocks"

upgraded

Manager and Distributor of

that

materials
the

are

buyer's market are prevalent;.
(5) licensing of processes through¬

out the

industry, in line with gen¬
eral petroleum practices,
is . be¬
coming increasingly common and
extends to many highly upgraded
petrochemicals. Where such major
materials as plastics once com¬
peted primarily with other mate¬
rials
such
as
steel, wood
and
leather, growing competition be¬
tween different plastics for the
same
market
is
now
becoming
widespread.

strongly

entrenched pro¬
"building block"
petrochemicals
has
apparently
been
able
to
maintain. profit¬
ability -by constructing increas¬
ingly larger units that can provide
competitively-priced
products.
Other
producers have found a
profitable route in further up¬
grading of products, reaching ever
basic

of

closer to the ultimate
a

system

of

that relies

consumer

vertical

as

profit
in

on

market¬

as on
..

'

technical competence

,

#

Role of Specific Companies
The

F. Eberstadt & Co.
NEW YORK 6, N. Y.
.

4

Teletype NYl-^18

specific

to

development

of

importantly due to factors outside
the technology of petrochemi¬

display

display anything
We

?,

windows.
to

compact

a

when

say

car.

these windows to

with cash in hand. We've had

from

we

Big enough

display client products.
sale, strictly for show. But we still get a

use

Not for

up

And

we mean.

surprising number of would-be buyers who

inquiries

on

come

in

everything

high-powered rifles to hi-fi records, electric

heaters to etiquette books, silver tea services to en¬

gineering services, perfumes and cosmetics to food
products and tiles.

;

.

We think highly of these window

shoppers who mistake

us

for

outlet. We send them off with

literature,

where-to-buy-it

tion—and

our

us

chemical activity by any individ¬
ual
oil
company
is
obviously

building here in New York features three large,

"large," that's precisely what

integration

heavily

processing.*.

Our

street-floor

in

ing and merchandising ability for.
Inc.

MM

so

characteristics

a

ducer

Financial Consultants

in

are

The joint venture PCI

on

duces
some
solvents
and, more
recently, upgraded chemicals such
need to supplement the
supply of as phthalic anhydride; however,
chemical by-products of the steel this
operation is limited in com¬
industry — ammonia, benzene and parison with others.
now naphthalene.
(6) Shell Oil — Operations em¬

The

.

I



B.

joint venture with U. S. Rubber;

based

Another major growth area for
petrochemicals has come from the

of

Underwriters and Distributors

and

producer

ties to pave the
way.

and
'

syn¬

American

slowly, depending heav¬
application research activi¬

extensive

•

65 BROADWAY

—

sure

F. eberstadt & Co.

TELEPHOite WHITEHAIX 4-8787

with

tion

steel industry's chemical by-prod¬
ucts are more than adequate; (4)

• i

(10) Cities Service

sells the

sharply; (3) with few exceptions,
petrochemical supplements to the

,i

building
chemicals

Including polyethylene, SBR

(3) Gulf Oil—A major producer
ethylene and through a joint which

through

ume more

tant

*

basic

mary effort has been a joint ven¬
ture
with
Continental

from petrochemicals has decreased

V '

of

upgraded

thetic rubber, carbon black
ammonia and derivatives.

55%

a

ward their ultimate
potential vol¬
on

and

major producer of SBR synthetic
rubber, this joint venture opera¬

of

commerce—for

example, polyethylene—grew to¬

ily

producer

blocks

is
currently
entering the
also
polyethylene plastics business.
(4) Texaco—A major producer arrangements

On

hand,

chemicals that
could be synthesized into
entirely
new

sive

plant—purely merchant out¬

venture

very

naturally-occurring materials.
the

ene

petrochemi¬

generally

re¬

—

put.

polyethylene.
of

alcohols

cently began marketing passenger
car tires based on
butyl rubber.
(2) Secony-Mobil Oil—Started
late in petrochemicals and is now
building the world's largest ethyl¬

permitted

building
existing major volume
such as ethyl
alcohol,
glycerine
and
ethylene
glycol,
and to entirely new materials of
blocks

agricultural chemicals (with con¬
marketing), fertilizers and

sumer

following listing attempts only to upgraded
chemicals as raw mate¬
highlight each company's opera¬ rials for the
plastics field.
tion.)
(8) Sinclair Oil—Produces raw
(1) Standard Oil of New Jersey materials for
polyester fibers and
—Produces building blocks such
polypropylene; recently joined
as
ethylene, butadiene and the with
Koppers Company to produce
aromatics
upgraded products a raw material for
other plastics.
such as butyl
rubber, polypropyl¬
(9) Phillips Petroleum—Exten¬
ene
and

sharply

very

process

grew

am¬

butadiene and

of

as

petrochemicals, and this expo¬ nized:
(1)
the
replacement
of
undoubtedly had consider¬ older chemical
processes by petro¬
and reve¬ able
effect
in
orienting many chemicals is
essentially complete;
below
the petroleum company managements
(2) the rate of creation of impor¬

projections,

somewhat

the

annual

6%

corresponding figures

revenues

mate

at

consumers

in
oc¬

refinery-de¬
during this

extensive

begun

was

the

cubic

ultimate

as

producing

from

It

gases.

period
work

262.2

the

began

solvents

natural gas at the end of last year
some

diversification

monia from natural gas and
butyl
alcohol, methyl ethyl ketone and

revenues
consumers

reserves

in

Chemical

over

almost

the

important
"building block" ethylene and its
major derivatives.

Summarizing from this ex¬
publication, the year 1959

years.

Cities Service

natural gas and Union Carbide de¬

and forecasts for the next several

cellent

same decade

began marketing methanol
and
formaldehyde
synthesized
from

recently

annual

Company
Jersey undertook the pro¬
of isopropyl alcohol. Dur¬

duction

the

industry are concerned, pros¬
pects are bright.
The American
gas

1947

both in and outside of
petroleum
industry,
were

the

the

grew out of World War I research
and achieved commercial status in
1920 as the Standard Oil

over-all

er

petrochemicals

accelerating

ment

Oil

Industry in
Petrochemicals

com¬

result

new

of

a
considerable range of industry
position is readily apparent.' (The

findings,

is

currently anticipated that
the gas utility and
pipeline indus¬
try's construction program during

upon

natural

possibilities' in petroproductions. ('

growth

around

the
exploration
falls considerably
short of that required to make
this an attractive business.
for

the

The

a

scribed

common

toward

chemical

57

thanks. For

a

retail

producty

informa¬

keeping

constantly reminded of what

we

NEW YORK

PHILADELPHIA
BOSTON
CHICAGO

consciously strive to be—a partner

SAN FRANCISCO

in sales to the clients

LOS ANGELES

we

work for.

of

cals and includes such factors

as

geographical
location, * available
capital and management orienta¬
tion toward chemicals. Among the
ten largest petroleum companies,

ALBERT

FRANK-GUENTHER
LAW, INC:
Advertising

•

Public Relations

131 Cedar Street, Neur York 6> N. Y. • COrtlandt 7-5060

*

• '

t

58

Chronicle

The Commercial and Financial

(2438)

.

.

\

.

!

Thursday, December 15, 1960

.

-

•

V

■

■ \

John K. McCausland

Thomas, Williams & Lee
Thomas, Williams & Lee, Inc. is
engaging in
from
New

offices
York

securities business

a

Wall

80

at

Street,

Officers

City.

liam J. Garry, Treasurer; Andrew

Alfred

and

Eastman

J.

Continued from page

alluring
market.

areas

have

manufactured

older

by

Riter

out

about five

the

to

ject
farm

vagaries

income

to

pected

be

and
a

so

of

weather,
are

on,

spot.
Vertical

integration is likely to

accelerate

and considerably more

v

ventures are expected as
companies seek broader and more
profitable markets.
Through new technology there

joint

opportunities to replace

should be

older

further

(including

processes

petrochemical

proc¬

esses) and possibilities of creating

materials of com¬
merce of potentially large volume.
Wherever
such
new
technology
entirely

FUND

chemical

can
are

be

new

likely to

accrue.

from

your

upon request

AND

L. Emery

NATURAL

GAS

from:

Katzenbach II, Chairman

White, Weld & Co.
New York, N. Y.

investment dealer
or

Auchincloss, Parker & Redpath
York, N. Y.

New

Bayard Dominick II

RESEARCH

AND

...

MANAGEMENT,

INC.

67 WALL STREET

Stuart F.

Silloway

W.

Orleans, La.
La Piere

E. Hutton & Co.

New

.

.s

identified

«

,

DeYoung

and

Mich.—

Company,

&

McKay

Tower, is now doing business, as
a
corporation. Officers are Neil
DeYoung,
DeYoung,

President;

Robert N.
Vice-President
and

Treasurer;

Carol

and

tainly

has

Begerow,

FAYETTEVILLE,
ferred

Ark.

Pre¬

—

Investments, Inc. is engag¬
a securities business from

offices

at

30

Officers

are

W.

East
M.

Mountain.

Ritter, Presi¬

dent; K. A. Ritter, Vice-President;
J. W.

Ritter, Secretary; and M. S.

Form

:

r

:*

University Securities

STILLWATER, Okla.—University

at

to

business.

been formed

has

Inc.

121

engage

Officers

West Seventh

in

securities

a
are

Clifford

Thomas, President; Paul Hieronymus,

Vice-President;

rence

O. Hansen,

and

Law¬

the

over

with

years

a

Secretary-Treas¬

urer.

There

been

has

Size and Costs

There

are

makes

investment

derwriters.

the

collective

members

can

dation

the foun¬

Investment

Possibilities in

Fund
FUND DISTRIBUTORS

A* *

Street

dividual
the

half

to

larger

concerned

are

securities

is

.large .number ,of

the

of

three-week
the

under

evident

investment

or.,

'

phia

industry

NAIC

series

now

created

Eight
in

the way.

A.Mutual. Invest¬

shares

investment

such

existence.

of

com¬

companies
More

a

have

are

are

on

And, pf^ course, the vari-

in

of

a

V::A Or'
through
diversified

course,

widely

to

booklets

and

films

media of communication.
An

important

educational

companies

and

means

is

the

continuing

for investment

full

disclosure

whose

possi¬

ble long-term

Mutual Investment Funds

growth of capi¬
tal and income in

companies actively

•

Bond, Series

engaged in the Elec¬
tronics field.
Get the

#

Booklet-Prospectus of this

Mutual Fund

now

•

from your invest¬

ment dealer or

115

Series

I Dividend Series

La Salle St., Chicago 3, III.

Broadway,

Preferred Stock Series

• Stock Series

Television Shares

120 S.

Balanced Series

• Income

Management Corp.

• Growth Stocks Series

New York 6, N. Y.

Nationally distributed through investment dealers by
Name.

Address.
City-State.




.

f *«t

Delaware Management Co.. Inc.
3

Penn

Center

Plaza

Infermation Folder and Prospectus

on

Request

NATIONAL SECURITIES & RESEARCH CORPORATION
Established 1930

Philadelphia 2, Pa.
V

re¬

investment

primarily

invested for

at

Philadel¬

companies
been
published and have
broadly distributed to major

been

the

School

York

Seminar

examples.

are

New

in

IBA

In;addition, of

change

into

session

Annual

Wharton

the

in

recent

the

and

in¬

lating

pany.

assets are

individ¬

companies

generally.

imminent offerings of funds which
offer
investors
a
tax-free
ex¬

newly

Fund

minimum

a

investments.

,

Boston

be
one

ually, and through their National
Association, have participated in
many educational projects on be¬

Trusts.

existing tax regulations with their
tax liability upon the sale of in-,,

FUND, INC.

ment

concept

vestors who

WHY NOT

>

One

Education

Investment

company

INVESTIGATE

•

"cost" to
companies
would presume
the

those

would

Investment

An extension of the investment

ELECTRONICS

in

of
net

The Forum on Finance
conducted by the Joint Commit¬
principles to encourage the flow
tee
on
Education
bringing ' 30
of venture capital to smaller and,
senior
college professors for a
newer businesses.

ELECTRONICS

State

this

own

Small Busi¬

recently passed

<

seeking even
only basic facts in handling one's

its

Company Act is
stimulating the application of the
management investment company

Investment

50

$5.40.

that

Company Act of 1960
applies the conduit principles of

Massachusetts

TELEVISION-

was

Investment

Estate

'v

costs?

cents per $100
For each $1,000 of

expenditure for

impressive
growth, is being extended to other
built

company

upon

"obtaining

of 54

therefore,

assets,

investment

the

in

for

com¬

20

shareholders

professional

which is

which

on

obtained

total

net assets.

conceptof

the
and

by
un¬

-

these

are

average

future expan¬
lines.

1960

diversification

and/or

largest funds in 1959
operating, costs —in¬
cluding management fees—on the

on

sion along these

management,

The

show

IBA

and should have im¬

portant bearing
During

of

attitude

reason¬

charged

results.

What

carefully these areas of change
and expansion. To a large extent,

as

actions"

actions appear

involved

cost

these

watch

the. IBA

of

the

recommends

Committee

,

members

known

by investment
panies and to focus attention

are

of

are,

importance of the

results

shareholders

The

LIFE

These

to overlook the

organizations of

Your

assets

the

fees

managers

shares

ness

MASSACHUSETTS

the

of

investment

that

,

where

They

shareholder

questioning

ableness

this ^type whose
available, eight of them
during the last two/ears..

the

what is

large part,

usually

sixteen

on.

companies.

"derivative

Subchapter M of the tax laws to

Interest You?

claim

no

investment

in¬

in

now some

;

area

companies have felt
weight of growth and size.
Litigation now confronts several
of the important organizations in
the
investment ' company
field.1
The nature of these legal actions

participation in the stock
of
organizations
managing and
distributing investment company
shares reached its peak late in
1959 and in the early months of
1960.

another

investment

ex¬

contractual

so-called

is

the

organizations or otherwise, stimu¬
lated, in part, by the development
the

companies

in formation in the

There

pansion in direct selling of shares
to
the
public through planning

of

new

or

"

widespread in 1960.
There are, as you know, programs
offering automatic dividend re¬

investment.

Invest¬

an

Most of the

segment in Japan
are in oper-

company

and

tion

more

Real

Do the

,

Philip¬
pines, New Zealand and Australia.

accumulation of shares
regular withdrawal of

for

passed

Company Act.

ment

investment fields. The Real Estate

York, N. Y.

-

have or are forming investment
companies. The Far East is rep¬
resented by an important invest¬

Public

Preferred Investments

yet modest, it is cer¬
trend worthy of careful

a

co.untries of western Europe now

vestment company plan.

Secretary.

in many
number
and

their

as

recently

ment

monies from shares held have be¬

Corporation
RAPIDS,

is

attention.

companies have become

periodic

come

Now

size

operation,

offered

While

areas.

bewildering complex of manage¬
% ment, sales and service organiza¬
tions.' Such services as plans for

Ripley & Co!,
Incorporated, New York, N. Y.

being

now

the
area

■7,The;.jnyestmpnt, company .idea
Industry Trends and Services
is going overseas, too.
Argentina
A report of 1960 would not be

vestment

Harriman

GRAND

is

income.

as

v;

t

-i

Incorporated, Chicago, 111.

Street

Howard, Weil, Labouisse, Fried¬
richs & Company

Gilbert H.

5, N. Y.

■

,'A

..

of investment company

York

complete without mentioning cer¬
tain other phases of investment
company
activities.
The under¬
writers of shares in open-end in¬

:

,

Company

New York, N. Y.

New

NEW YORK

v'

Sellers

The Illinois
-

with offices

G. Shelby Friedrichs
...

Paul A.

Securities,

Dominick & Dominick

FUND

Co.

York, N. "Y.

Blundell, Treasurer.

J. Raymond Boyce

&t>im

,

Chicago, 111.

ing in

SECURITIES COMMITTEE

Prospectus

,

National Boulevard Bank

profits
Widespread

Respectfully submitted,
OIL

not

closely held, good

licensing of new process tech¬
nology
has consistently
led to
overcapacity and profit erosion.

INC.

v

Myron F. Ratcliffe

ex¬

bright

relatively

&

New

insurance

York tax
in effect, in

that

so

annuity, which brings
industry into the

able

42

New

a

capital gains distribu¬
tions by investment companies are
now
taxable as capital gains and

Allen J. Nix

and

cals

New

Incorporated, Houston, Tex. ?.

declines

side,

amendment

Morse

Underwood, Neuhaus & Co.

hence. Agricultural chemi¬
fertilizer, although sub¬

years

N.

Joseph R. Neuhaus

major plastics are expected to ex¬

price

favorable

Smith, Barney & Co.
New York, N. Y.

eclipsed

sales will be subject to
older cyclical influences, e. g. syn¬
thetic rubber and solvents.
The

perience further
before bottoming

Continued from page

York, N. Y.

Edmond

where petroleum

chemicals

derived

New

routes,

PIONEER

Securi¬
N. Y. r '

Kidder, Peabody & Co.

/

•

In those

57

past "seller's"

in the

as

chemicals

Gerrogari, Secretary.

Dillon, Union

ties & Co., New York,
L. Moore

Frederick

Aubry and Thomas F. Quinn,

Vice-Presidents;

Report of IBA Investment

Wood, Gundy & Company
Limited, Toronto, Can.
William G. McKnight

are

Nicholas Marotta, President; Wil¬

L.

Oil, Natural
Gas Report

120 Broadway, New York 5, N. Y.

,

(PSHSSW

f: Volume

192-

Number 6012

.

.

.

The Commercial and Financial Chronicle

principle that -applies ta the-in- -two- decades, that- 1960 will in¬ Albert C; Purkiss
r<, 4With
Y0strt)ent company industry. Reg- deed prove to
be, in retrospect, a ;J >Walston &-Cb.; Inc.?
ular and detailed
reports, prospec- milestone
and * a
(Special to The Financial Chronicle) ?. \ >>,
threshold - to
New* York;'N: Y.7';f"*'V1 *';
v>tuses,vand Other4 communications greater - days ahead. » "One- last
DENVER,
Colo. * — -Thomas. F.
are
Sage, It\
^designed to keep the Share-* word; - I know .of- no representa¬ Andrew-;G/.C.;
Mapes has joined the staff of- Bos1'Lehman Brothers:
'
holder; and
prospective ' share¬ tive, of either major
worth,
Sullivan
& Co.,. Inc., 660
f'£\. rs
party, who
New York, N.
holder informed.f - • v k - ?■*. •• is not
//; Seventeenth St., members - of the
dedicated in principle to
Henry
J.
Simonson,
Jr.
'
the free enterprise
New
York
and
Midwest
Stock
system, and
;
Summary
■
*;
National Securities & Research
who does not recognize/that in
Exchanges.
Your Committee, in
Corporation,
New
our
York, N. Y.
.'reporting
society,
people engage
in
t

| V"'

(2439)

■l

59

-

Boawortly Sullivan; %

-''

-

•

|-;1:1

.

,

the details of some of the investment company developments of

.

believes
it
important
stress once again that the size
I960,-

t

business for the purpose of mak¬

-

ing

to
and

of

limitations

flict with these

securities

areas

to

that

of investment com¬
only be ascribed to the

petent supervision.
; We have spoken of the fact that
1960 was a year of strain and
test.
Perhaps what we have re¬
ported here is sufficient evidence
that

statement.

But

did

stop to think what

ever

constant

and

test

agement in 1960
make
public its

it

is

or

a

any

you

and

in

been

year

to

and

its

This

to

than

forward

to

It may

in

and

indicating

importance

people
such,
it

As

subject

of

Association

of

ment

tant

New

by

providing

who

means

means

of

can

in

Robert

our

New

the

lance

of

its

operations
continue

.

insure

to

terest."

be

in

the

that

Avenue,

New

firm

the

York
of

name

of

than

First
.

*

California

Dottarar

Mr.

formerly with

Co.

'

Edwards & Hanly to Admit
J
HEMPSTEAD, N. Y.—Edwards &
Hanly,

100

North

Franklin

St.,

New York Stock

of the

a

century. They are
F. Burns, Jr., William E.
Erdman, Joseph A. Dweck, Lewis
Lundequist,
May
Schmitt
and
a

James

Winthrop Company.
Mr.
Winthrop was formerly with

A Name to Remember

When Investing

>

Thomas Matthews.

kert &
a

UNION, N. J.*—Ridge Investment

Associates, Inc., has been formed
with offices at 695
Liberty Ave.,

Co., Inc., has been elected

to engage

in

a

securities business.

Richard Chaiken is
the

a

principal of

firm.

Corp.
in

The

corporation

April

of

this

year

as

vehicle for the expansion of the

Bangor

&

business

Aroostook

Eastman Dillon Branch

was

Railroad's

activities.

LONG

BEACH, Calif.

Dillon,

—

Fund

Balanced

a

seeking conservation of

capital, reasonable cur¬
income, and profit

rent

director of the Bangor & Aroos¬

formed
a

Form Ridge Inv. Associates

Union

Eastman

—

Securities

&

Security Building under the
agement of Montell Peck.

possibilities.
Ask your

investment dealer

Co.

has opened a branch office in the

for prospectus

or

write to

man¬

Wellington Company, Inc.
Co.

Philadelphia 3, Pa.

Corporation

GROUP SECURITIES, INC.

Eaton, Jr.

ESTABLISHED

1933

G. Howard

York, N. Y.

FUNDAMENTAL

INVESTORS,«.

Philip F. McLellan
Massachusetts

continuing surveil¬
own
activities and

to

Exchanges.

and Mr. Dove wOre

affiliated

more

Hugh W. Long and Company,
Incorporated, Elizabeth, N. J.

coun¬

of the investment company indus¬
a

a

been

Hugh W. Long

try. The enlightened self interest
try dictates

Stock

Reynolds & Co.

production and distribu¬

tion and service within

Co., 310 Sansome St., members of
the New York and San Francisco

David

Howard, Incorporated
Boston, Mass.

through
mod¬

invest

Wayne
City, under

Eaton &

of

are

3394

Detroit, Mich.

invest¬
impor¬

medium

a

persons

Winthrop is engaging in

have

York, N. Y.

Charles F.

erate

quarter

securities business from offices at

took

&

First of Michigan
,

company makes an
contribution to the economy

which

David

Winthrop Opens

who

Harris, Upham

Investing in

Life

Fund

Dis-

tributors, Inc., Boston, Mass.

„

'

over

Bache & Co.

public in¬

New

.

common

stocks

selected for possibilities of growth
in income and capital

George W. Meyer

they

the years.

York, N. Y.

'

•

Walter L. Morgan

And Senator Harrison Williams

;

,

Wellington Company, Inc.
Philadelphia, Pa.

New

of

Jersey, in a speech pre¬
pared: for
presentation
at
the
second NAIC Membership Meet¬
ing in October 1960 stated:
'

•'

"

I believe it is inevitable,

...

if you continue through the com¬

ing

20

years

service

the

Robert L. Osgood

:

-

National Sponsor and Investment Advisor:

,

Distributors

Vance, Sanders & Company, Inc.
;

-

Boston, Mass.

80 Pine

^"

Group, Incorporated
DIVERSIFIED

Street, New York 5, N. Y.

Harry I. Prankard, II

the

to

;

public which has marked the past

INVESTMENT

Lord, Abbett & Co.
York, N. Y.

New

FUND,*.

A balanced investment
in bonds, preferred stocks and
common

Selected

•

The

stocks.

Qeorge

•

PUTNAM FUND

american shares

™c

DIVERSIFIED GROWTH

of'Boston

STOCK FUND,«

"A BALANCED FUND"

Investing for long term growth

[possibilities in securities of companies|
in many

THE
4

.

.

a

pany

sified

mutual

investment

which supervises

portfolio

securities

selected

of

a

com¬

for the

capital and income.




on request

'

diver¬

American
pos;

sibility of long term GROWTHof

Prospectus

>

:

fields of scientific and

economic

r

PUTNAM

Company

Emphasizing possible long-term Capital Growth
1

135 Souti* La Salle Street

Chicago 3, 111.

*

development.

GROWTH

FUND

SELECTED
Investments

'
=

"

Prospectuses

Putnam Fund
60 CONGRESS
New York

-

f

Los Angeles

Chicago

on

Request

*

---•

-•

Distributors, Inc.

^

STREET, BOSTON
'

~

'

Cleveland
-

.

*■'•*

•

San Francisco

Atlanta

<

sociated with Irving Lundborg &

Henry Earle

Investment

the

with

Harry C. Wood, Vice President of

Distributors Group, Incorporated
New York, N. Y.

•

judgment,

ciates

David

the investment firm of A. W. Ben-

Herbert R. Anderson

:

Dottarar, Virgil F, Dove and Paul
B.-, Kingsbury have: "become as-

members

Harris, Upham & Co.

Named Director

Corporation
Boston, Mass.

Companies in October, 1959, stated
my

Ridge Inv. Assoc. Formed

COMPANIES

The Parker

in¬

more

Harris, Upham

"In

to

George D. Aldrich

be appropriate to quote

.

only

Calvin Bullock, Ltd
New York, N. Y.

Howard B. Dean

..

their

Robert E. Clark, Chairman

the

Stock

Lundborg

Exchange, on Jan. 1 will admit
UNION, N. J.—Ridge Investment
Twenty-Five-Year Club to partnership Anthony J. Shields,
Associates, Inc. has been formed
At its annual Twenty-Five-Year
Mortimer W. Hanly, Michael Garwith offices at 695 Liberty Ave.
Club
dinner, Harris, Upham &
to engage in a securities business.
gano and Stephen T. Monahan.
Co.,'
120
Broadway,
New
York
Officers are Richard M. Chaiken,
City,
nation
wide
investment
President and Treasurer; Donald
brokerage firm, added six new
F.
Noonan, Vice-President and
members to the roster of asso¬
Secretary.

Respectfully submitted,
INVESTMENT

New York

Exchange, on Jan. 1 will admit
Melvin F. Shakun to partnership.

Incorporated, Milwaukee, Wise.

Stryker & Brown.

in¬

into

members of the

Robert W. Baird & Co.,

per¬

ing public at large.

others.

Representative Eugene J. Keogh
of New York, speaking before the
Membership Meeting of the Na¬
tional

not

37

mem¬

proper

.

Carter, Berlind, Potoma & Weill,
Wall Street, New York City,

:

,

Carlton P. Wilson

investment

their

two well-known legislators.

-that:

.

placing

1960

year

Association, but to the invest¬

ers

quiry and study from within and

from

the

of

members of the Investment Bank¬

must

from without.

.

in

growing

more

before.

the

be

exercise

hope, be of help to

spective

only reiterate that
will be undoubtedly

concern

ever

will

•

review

we

companies

can

progress
more

sharehold¬

to

power

COMMITTEE

moves

1960s, we
of

superimposed to

informed

the

level.

dustry
its

that

bership

trust accounts.

As the investment company

-.

has

have

will,

And, no industry, to our knowl¬
edge, operates subject to more
regulation
on
the
federal
and
state

com¬

control."

companies

relation

investment

rights

stand up and be counted individ¬

ually

the

Carter, Berlind Partner

:

Distributors, Inc.

Boston, Mass.

;

:.

in¬

are

man¬

most, quarterly. They can¬
not be selective, giving the results
for their "best" fund, or for se¬
or

in

investors

the principle of voting

ers

and for

investment

con¬

pany area,

insure

condition at least each six months

The

insure

formed;

portfolio revisions and its current

lected customers

would

severe

for

results

most

principles. In the
the principle of
full disclosure has been
developed

soundness of broad diversi¬
fication under constant and com¬

of

Putnam Fund

-

be

development

which

ramification
can

would
the

see

panies
basic

„

profit, j I

a

reluctant to

Charles M. Werly

,

Three With

SAN FRANCISCO, Calif—John B.

Hugh W. Long and Company
Incorporated
Westminster at Parker

•

Elizabeth, New terser

.

<>

J''. Ui

„t

,Cw

J."",

»...„

u>

rni

U

I.

*.')', J W

if V

V^H 1W

UityW'ttJWtt1*'! •*" TvM"\ *

I

•tit *

,|

60

(2440)

Report of IBA Municipal
Continued from page 33
loan

formula

equally

this

in the bill if the

favorable

terms.

If

proposed

program had been
1959, about 27.9% (or
$2,000,000,000 of the munici¬

H.

water,

sold

during
that year without Federal assist¬
were

would have been eligible for

ance

purchase
ment

by

the

under

Federal

the

govern¬

proposed

pro¬

the

in

House

community

facilities

public hospitals or
nursing homes, with maturities up
to 40 years, at a low interest rate
determined

under

formula

a'

which would have been applicable
each month under the proposed

a

effect, the entire $1,000,000,000 of proposed Federal loans
might simply have been substi¬
tuted for

financing that

done

was

without the proposed Federal pro¬
gram.

S.

would

declaration

this bill in

tified

the

in opposition

1959 and

IBA

tes¬

to the bill.

The general basis of IBA oppo¬

sition to

these proposals

municipalities
financing for

(a)
the

grams

of

facilities

was

that

obtaining
growing pro¬
are

construction
without

of

the

public

proposed

and

(b) has in¬

would

in

consec¬

have

loans

maturities

au¬

at

up

2%

to 50

'

years.

Hearings

were

May,

1959;

municipal
the pro¬

(b)

any

facility

with

in

of

President

the

$1,000,000,000 in Federal

community
interest

financing

volume

by

during each of six

months)

thorized

record

posed programs would not provide

of the labor force
creased

the

operative

seasonally adjusted un¬
employment (a) is more than 5%

bills

on

Hearings

become

whenever

utive

held

representative of

on

Federal loans, as demonstrated by

3471, to provide "The Stand¬
Anti-Recession Act of 1960"

by
(which
on

were

If S. 1955 had

in

in

the bill if the financing could not
be obtained from other sources

equally favorable terms.

been

for

sewer,

gram, because they were sold at
an
interest rate
above
the rate

Federal program).

would

$1,000,000,000 of Fed¬
eral loans to municipalities to fi¬

over

that

5944

R.

nance

bonds

a

authorize

in effect in

pal

statement

opposing
adoption of these proposals.

the

not otherwise available

were

on

submitted

held

the

these

IBA

public facil¬

ities, but would merely substitute
Federal financing for private fi¬
nancing; and (c) it would be con¬
trary to the basic economic and
political concepts of our system of
government for the Federal gov¬
ernment
programs

private

on

I960, and

appreciable amount of addi¬

tional construction of

through the proposed
to take over functions of

business

that

are

being

the

viding
ices

transportation

mass

in

metropolitan

would-

program
section

*

BULLOCK

of

the

(1)

urban

This

for

grants

of transpor¬

tation systems in urban areas;
loan

(2)
public facility

the Federal

authorize $100,-

to

program

000,000 in Federal loans
rate

interest

of

at

low

a

determined

under

a formula in the bill
(3V8% dur¬
ing the first six months of 1960)
to
finance facilities
and
equip¬
ment
for
use
(by operation or
lease or otherwise) in mass-transit

service

commuter

or

and

areas

ordinate

to

in

integrate

Lynch,

Fenner

&

Pierce,

Richards,

Smith

and

transportation

systems

(3)

and

areas,

such

in

authorized

to

an

government

take

to

addi¬

over

tional responsibilities of

local gov¬

additional

$100,000,000 in
loans ernments.
public facility
program.
7,, ' 7';--:7:vV-vAA';

under
loan

the

present

originally

introduced,

Ill

bill would have made the low in¬
terest

-rate

proposed

for

mass

This

Commitee

attention

called

transportation loans applicable to
other public facility loans under
the
present program.
The IBA
opposed
that proposal, pointing

involved

out

lution

that

if

in

such

proposal

a

had

effect

during 1959 over
municipal bonds that
sold during that year with¬

of

the

credit

the

of

construction

facilities

private

dangers

of municipal

use

finance

to

repeatedly

has
to

in the

industrial
to

to

leased

be

The

companies.

reso¬

adopted by the IBA regard¬
such financing in 1951 was

ing

clarified and reaffirmed in
lution

adopted

1959

in

a

and

—

imperative that
of

economic

sold at

proposed
to

only

interest cost above

an

rate.

The

apply

to

the

by

financing

were

Municipal

the

Association

cers

Finance

and

the Munici¬

bill

was

pal Law Section of the American

new

low

Bar

transportation

mass

This bill passed

to

extend

Association.

The

use

of

mu¬

housing laws

and it included

3292

would

have

provided for
Department

a

Housing and Metropolitan Af¬
Cabinet

at

ecutive

level

branch

Finance

ferred

of

in

the

Agency would
the

to

the

Union

Workers

of

America,
discussion on the

the

panel
exemption

for

municipal

for
tax

bonds,

included the following statements
and

recommendations:

proposed

be

trans¬

new

"The

Ex¬

Federal

De¬

bonds

issuance

tee

on

Federal

but

it

did
such

not
a

desirable

and
Currency
pass
the Senate.

to

of

coordinate

for

tive

functions

that creation of such

an

suggests
executive

department might be the first
step in efforts for the
Federal

an

unfair

competi¬

advantage at the expense of
Treasury. Moreover,
such
companies have generally
Federal

their

moved

lished

living.

But there is

plants

from

estab¬

locations in order to

7"

7 7-''-: sft

*

basic

"The

taxation
the

is

the

423 Texas National Bank

1


I


write to

Houston 2, Texas

Bldg.

tion.

the

ex¬

func¬

However, industrial devel¬
bonds

opment

issued

are

for

a

proprietary purpose, not a public
purpose.
Their primary objective
is

to

enable

manufacturer

a

larger profit in

earn

a

cial

enterprise

otherwise

be

a

than

able

to

to

commer¬

would

he

Conse¬

do.

quently, the application of the tax
exemption to such bonds is a per¬
version of the basic purpose of

"In

order

the

transferred

to.the

have

industrial

gen¬

dustrial
is

no

plant construction. There

justification

bonds

issued

for

for
a

exempting

proprietary

from the Federal income

/777;.7.7.-:.'■•••': 7",

June, 1960 in the

case

of Village

STOCK FUND
Managed by

H O WA R D

24 Federal Street

BOSTON

BOSTON

ESTABLISHED ,924

your

Investment Dealer

Russ

SAN

or

77'--.

The Supreme Court of Idaho in

BALANCED FUND

&

;7.

remove

EATON & HOWARD

;

,■

future

exemption from any mu¬
nicipal bond issued to finance in¬

merely
activities

./7-77.7

tax

tax."

but

,

section 103 be amended to

purpose

,

*

prevent

on the tax-exempt credit
municipalities we suggest that

of

welfare

contributed

*

to

trading

not

Prospectuses from

7:

'

'

government

INCORPORATED

or

'7'"

-

for

public purpose of

municipal

have

E AT ON
investment dealer

sis

reason

emption of interest from munici¬
pal bonds from Federal income

eral

I

for

excuse

no

Treasury."
i" ~.-i '7 '

enjoy
the subsidies offered by these mu¬
nicipalities.
they
Consequently,

\

pro¬

>

EATON & HOWARD

I

MANAGEMENT CO.

higher

the
migration
of
plants where the only result is the
enrichment of private companies
at
the .expense
of the Federal
subsidizing

The

companies
advantage of these

take

tendency of Federal
departments
to
expand
and
their

taxation.

obtain

the

broaden

such

which

the

of

ductivity and better standards of

There is no jus¬
exempting interest the tax law."
municipal bonds from 77 7 ■; 7-7- 7' •; * ,7

bonds

all Fed¬
eral functions regarding housing
and metropolitan affairs, recogni¬
tion

on

achievement

the

for

ap¬

purposes

municipal

government.

tification

may

proposal

of
the

building of
plants for use by private enter¬
prises is an abuse of the privilege
of
tax
exemption which should
not be countenanced by the Fed¬
eral

Banking

finance

to

This bill, with amend¬
ments, was reported favorably in
the Senate by the Senate Commit¬
partment.

administrative

FUND

,social

rate of
We must

growth.

try where mobility is required for

pear

TEXAS

and

accelerate the

facilitate the movement of indus¬

While

For prospectus see
your

make full

we

economic

our

to

Offi¬

eligible for purchase by the

government.
All
functions and
powers of the Housing and Home

Montreal

is

reso¬

-

London

can

we

also adopted

of

St. Louis

which

resources

ill afford in this crucial period. It

such

fairs

San Francisco

valuable

been

S.

.

of industrial mi¬
which is encouraged by
municipal subsidies such as taxexempt bond issues is a waste of
process

our

the establishment of

New York

"The

lutions pointing out the dangers in

(e) Executive Department for
Housing and Metropolitan Affairs.

Denver

which

the problems of ad¬

gration

capital

was
emption from state and Federal
authoris¬ securities regulation.
ation for an additional £550,000,The statement submitted to the
000
of
loans
under the
present House Ways and Means Commit¬
Federal public facility loan pro¬ tee* in
November, 1959, by Mr.
gram.)
<7.. 'V, ' ■ ■ 7,f-7'7 />" Solomon Barkin of the Textile

Philadelphia

workers

out Federal assistance would have

adopted,

Chicago

another,

migration.

use

endangers for all municipal bonds
the tax exemption " and the
ex¬

Los Angeles

to

former

communities

in

faced by

reso¬

DIVIDEND SHARES

;-7

their

justing to the loss of employment
resulting from needless industrial

Municipal Industrial Bonds

this

location

one

leaving
are

.

As

from

stranded

the Senate

_

Podesta

Denver

Francisco

San

June 27, but was not reported
out of Committe in the House. (A

Boston

Co.,

co¬

on

Established 1894

Inc.,

urban

loans.

Ltd.

&

Spokane

nicipal credit to finance facilities
for private industrial companies

Calvin Bullock

Ayers

Cruttenden,

&

highway,

amended

%:

Merrill

Peterson,

Incorporated,

CANADIAN FUND

NATION-WIDE SECURITIES

Roscoe B.

E. Richard Larson

Harvey J. Franklin
Merrill

bus, surfacerail, underground and other mass

bill

hiS

MOUNTAIN

the
Housing

Federal

planning to" include

amend

rate

■;!•.

ROCKY

amend

for the co-ordination

the

FUND

PACIFIC

NORTHWEST

CALIFORNIA

serv¬

areas.

Act authorizing Federal grants

were

■

Regional Group Chairmen

3278, designed to assist state
and local governments and their
public instrumentalities in pro¬

Federal government beacuse they

'111
■is

1

-

.

1960," would have been provided

were

'7 {

Thursday, December 15, 1960

in S.

95%

these

.

program, known as
Transportation Act of

"Mass

been

of

4

v.

Vw'i7 ^

Com¬

of

out

\

,

wJrtiKawAl^tcWu^^

I^AujAmSMAUm1 ttSiilSrJi) |*U,»£&1(miU». i— liltW. J*Wfc' 'i

Federal

new

performed at reasonable rates by
None

•

(d) Proposed "Mass Transporta¬
tion Act of 1960" Not Adopted. A

private

business.

reported

were

mittee.

Securities Committee
a

Ua.* i W7 IwTibu*

kjAW^iAW«tlW-U-

The Commercial and Financial Chronicle

bills

under

V

Building

FRANCISCO

the above.

Volume

192

Number

6012

The

Commercial and Financial Chronicle
l

of Moyie Springs v. Aurora Manu¬
facturing Company, declaring un¬
constitutional

1959

a

Idaho

authorizing

municipal
bonds, stated:

revenue

"The

use

Act

industrial

beneficiaries.

The

policyholders'

share

item

of

of each

is

taxable, execpt its share
tax-exempt income is also ex¬

of

the municipality and the tax
exemption, to make the bonds sal¬

empt from tax.

able, are the devices by which the
legislature has sought to accom¬

much
controversy as to whether
this pro-rating of
tax-exempt in¬
come would
impose tax on a por¬

of

plish the

purpose of the act.

obvious

that

not

so

with

private

It is

enterprise,

this

on

tion

Act

of

in

Therefore,

If the state-favored indus¬

to the Act
in

promoting, sponsoring, regulating
and controlling private
business,

position of tax.

and

held

free

our

would

enterprise economy
replaced by socialism.

be

The constitutions of both state and
nation were founded upon a

any

interest,
be made to

necessary

to

prevent
.:

vision

for

"Moreover,

the tax
industries

granted to
act, would
additional

other

"

result
tax

citizens

exemption
under

in

casting

burden
and

the

upon

an

the

industries, not

only of the municipalities directly
participating, but of the entire
"state..

V "

■■■*■. '4.V

'

"For all the reasons
we
hold
Chapter
and

vestment
surance

into

pro¬

no

pro¬

the adjustment to
imposition of tax on tax-

Consequently, it appears
likely that there eventually will
litigation to determine whether

the

pro-rationing formula imposes
tax on
tax-exempt income.

Printing Legal Opinions
Municipal Bonds

received

by in¬
divided

are

"policyholders'

share"

and

the "company's share."
The
"policyholders' share" represents

the part of the investment income
which will be required to meet

future claims of
policyholders and

on

V

Bar

widely ; used
ceived

December, 1958 the IBA rec¬
that, whenever possi¬
and
practical, a copy of the
final

municipal
should

on

bonds

be

opinion

the back

and

certified,
to

legal opinion
date

legal

be printed

statement

recommended

tlie-

effect

was

dated

that
as

of

copy

including

the

Section

a

the

of the

Regional Group Chairmen

v

en¬

of

NORTHERN

WESTERN

OHIO

OHIO VALLEY

Association.

This

and

has

been

re¬

tors: and securities dealers.
The
on

legal opinions

the

back

of

housing

the

printed
issues of

were

last

back

and,

to
few is¬
weeks, the legal
be printed on the

recent

will

of

the
$35,085,000 City of
Philadelphia General Obligation
Bonds, the $14,000,000 Harbor De¬
partment of City of Los Angeles '
Bonds,
the
$1,717,642
City
of
Wichita, Kansas Bonds, the $3,000,000 Village of Bloomington,

Herman B.
Joseph,

out

the

J.

CENTRAL

STATES

minor

overcome

culties

rather

a

excuses

technical

than

copy

for not

«

as

printing copies of

on

bonds.

/■

v1

■

m-i

diffi¬

using them

•

Fundamentals of Municipal Bonds
Since

the

damentals

Handbook

"Fun¬

on

of

Municipal Bonds"
was published by the IBA in
Sep¬
tember, 1959,-over 8,600 copies of
the' book

have

been

recommend this book

sold.
as

Milton S. Emrich
Julien

We

Collins

Robert A. Benton, Jr.

&

'

back

of

the

bond

a

'

Co., Detroit

'

\

Purchasing and Distributing

Boston

Exchange

Stock

Founded 1898

(Associate)

Railroad and Public

PORTLAND

HARRISBURG

ALBANY

Utility

Securities

BOSTON

BANGOR

Exchanges

State, Municipal, Corporation,

HARTFORD
BINGHAMTON

MORRISTOWN
National Distributor

YORK

BOSTON

MIDWEST

STOCK

EXCHANGE

STOCK EXCHANGE
STOCK

STOCK

NEW ENGLAND FUND

i

EXCHANGE

EXCHANGE

Organized 1931

(ASSOCIATE)

FITCIIBURG, MASS.

LAWRENCE, MASS.

KEENE, N. H.

UNDERWRITERS and

CLAYTON

UNDERWRITERS

DISTRIBUTORS of

DISTRIBUTORS

SECURITIES

;

:

GENERAL MARKET

DEALERS

CORPORATION

MUNICIPAL BONDS

MEMBERS

PRIMARY
MIDWEST

STOCK

EXCHANGE

TRADING

Specialists in Bonds of Municipalities

MARKETS
BOSTON

AMERICAN

STOCK

EXCHANGE

within Massachusetts

EXCHANGE

STOCK

(ASSOC.)

ESTABLISHED

Direct

79

MILK

BOSTON

Telephone

to

1833

New York

HAnover 2-7538

STREET,
9,

MASS.

Tel. HUbbard 2-6065

Tele. BS-30

and to

NATIONAL BANK

of BOSTON

Grace Canadian Securities Inc.

Portland, Maine




Uphavi& Co.,

Minneapolis

in

municipal securities business,
Continued on page 62

1887

GREENFIELD, MASS.

PORTLAND, ME.

Harris,

certification

Street, Boston 5, Mass.

BANGOR, ME.

LEWISTON, ME.

John R. Winsor

Manley. Bennett &

Company, Chicago

excel¬

an

lent tool for training new men
the

AMERICAN

AUGUSTA, ME.

MINNESOTA

legal opinion be printed
municipal bonds in every is¬
sue where it is possible and prac¬
tical, and that efforts be made to

NEW

30 State

Applegate &
Humphrey, Inc.

of ^the

NEW YORK

Stock

Applegate

Hulme,

Ky.

delivery and payment of
the bonds, by
including with the
copy of the legal opinion on the

Established

American

A. Lowrie

Son,

on

Townsend, Dabney & Tyson
and

ifr

MICHIGAN

INCORPORATED

York

Milliard

Louisville,

COFFIN & BURR

New

B.

recommended

We urge that

procedure.

Henniitg Milliard

&

Inc.,

Cleveland

Minnesota Bonds and the $280,000
City of Roanoke, Virginia Bonds.
We appreciate the cooperation
by numerous bond attorneys and
municipal finance officers in
carrying

Joseph

Mellen

Miller,

of

..^

Members

PENNSYLVANIA

the

enthusiastically by inves¬

;{^.r
-

'

ommended

should

is a
of the orig¬

recommended procedure has been

legal opinions

complete

items of in¬

companies

the

the

made

be

ble

issuer

subsequently

Law

American

Session

Company Income

income

that

com¬

come.

In

Act all

The

•.

Tax Act of 1959

Under this

protested

Municipal

opinions

formula does not impose any tax
on any
portion of tax-exempt in¬

1959, to be unconstitutional

Insurance

:

•

exempt
income.
The
Treasury
Department has maintained
throughout that the pro-rationing

IV

Life

opinion.

in

state officials and insurance

void."

the

authority bonds
examples of only a

mentioned,

265,

Laws

inal

was

=

or

copy

sues

nesses,
including representatives
of many
municipal organizations,

a

; v

of

the

give

Bureau of Internal Reve¬
under the Act. Numerous wit¬

panies,

that

im¬

19, 1960 hearings were
the regulations proposed

prevent

our

adjust¬

such

Oct.

litical and economic system

as

on

by the
nue

official

an

effect

and correct copy

the extent

an

ment shall

on

or

the

true

would

tax-exempt

regulations

private enterprise svstem is to the
socialist system of Russia.

Act

imposition of tax

posed

private

added

was

the

capi¬
enterprise econ¬
omy and were designed to protect
and foster private
property and
private initiative. Socialism is as
foreign to our constitutional, po¬
talistic

was

result in the

On

to

61

by the paying

dorsed by the Municipal Finance
Officers Association and by the

that

case

agent

facsimile

a

procedure

there

that, if it is established

tries were successfully managed,
private enterprise would of neces¬
sity be forced out, and the state,
through its municipalities, would
increasingly become involved in

(with

signature)

During hearings

provision

a

signed
manual

1959,

tax-exempt interest re¬
by insurance companies.

ceived

favored, could not compete
operating there¬

industries

under.

...

The

company's share of investment in¬
come

of the name and credit

investment

income is exempt from tax.

(2441)

New York

Main Office: 30
MEMBER

Congress Street, Boston 6, Mass.

FEDERAL

DEPOSIT INSURANCE CORPORATION

62

The Commercial and Financial Chronicle

(2442)

Harold W. Clark

W. H. Morton
.

John C. Clark

Securities Committee
Continued from page 61
as

well

as

an

excellent guide for

issuers of municipal bonds, inves¬
tors and students.

..

In response to frequent requests
for a compilation of recommen¬

Market

preparation
of
a
embodying recommen¬
marketing

was

also

II.

Court Decisions

Attached

published by the

Appendix

as

is

;

a

summary

in

:

vn

The

the

Research

-

IBA

New

Department

of
;

has

curities and publishes periodically
information that is of great value
to all municipal securities deal¬

The following should be
ticularly noted:

ers.

The

Federal
able

Weekly

Reserve
all

to

Francisco,

San

N.T. & S.A.,
Calif.

IBA

Action.

re¬

C.

Frank

Carr

(b) The IBA Statistical Bulletin
Survey
of
the
Municipal
Bond Market. (Issued quarterly.)
—A

This bulletin is mailed to all IBA
members and the last four issues
hav£ included the following ar¬

ticles:

Merrill
& Smith

New

Hess

Lynch, Pierce,
Incorporated

Fenner

&

Cushman

McFaul

New

W. L. Lyons & Co.

& Co.
York, N. Y.

in

York, N. Y.

S.

R. H.

Dennis

-

New Britain

Branch Office

Branch Office

245 Main St.

18 Broad St.

Middletown

New London

Branch Office
30 Mason St.

Branch Office

24 Central Ave.'

Waterbury

Terrimffton<

-

Branch Office

been

&

San

Calif. .*•

reasoned

tional
the

•

of

»

-

V

•

; ; ; /

-

Chicago, 111.

71 East Center St.

Manchester

Thomas J. Pendergrast
¥;
Courts & Co, »
'

Atlanta, Ga.

:

that

since

REPRESENTATIVES

THROUGHOUT

THE

to

the city
additional
service the bonds, the use
surplus from an existing
to

must

levy

also

be

an

permissible.

In

McClelland

Mayor

v.

The NUTMEG STATE..
.

,

.

As

in

case

specialized

offices

primary

didn't

Wilmington
a
i

but

Hogle & Co.
York, N. Y.

planned to construct
dock and loading crane at
Wilmington Marine Terminal

new

the

the

facilites

from

revenues

not

were

know,

Pierce, Carrison, Wulbern, Inc.
Jacksonville, Fla.
G. Thomas Yeager 3rd

■

to

issue

revenue

not

only

desired

the

but also

a

new

1891.

are

We

in The

are

and

ing plant at the terminal,
lease the

new

•

i

Connecticut-based, and all

Nutmeg State. We maintain

markets—and

welcome

your

inquiry

many

on

all

Connecticut issues.

Municipal Bond Department
INDUSTRIAL NATIONAL BANK
PROVIDENCE, RHODE ISLAND

Chas. W. Scranton & Co.
Members New York Stock
Exchange

NEW




HAVEN, CONNECTICUT

Second

Largest Bank in -New England /
! t

y

and^ to

plant to private in-

un¬
,i'

dock r, and

manufactur¬

have

we

listed

bonds

in amounts sufficient to construct

crane

;/A;//A?^A>

r

planned

isCONNECTICUT.
dealers,

to

finance such construction. The city

STATE AND MUNICIPAL BONDS

issues—both

existing

sufficient

.

distributors, and

in ^Connecticut

listed—since
our

you

underwriters,

and

Council of the City of Wilmington,
159 A.2d 596 (I960), the City of

•v/y

I,

constitu¬

a

STATE

....

of

gave

Wires and teletypes to principal cities

.

the

field

DELAWARE

Witter & Co.

Baltimore, Md.

the

con¬

of

Corp.

Baker, Watts & Co.

'■

Ar

in

amendment

any

tax

Edward B. Wulbern

Dean Witter & Co.

cities

power

tax

Wehrheim

Joseph B. Wise
New

successive

by

industrial development. The court

Francisco, Calif.

J. A.

only a statutory
and
(2) There had
history
of
continual
amendments

of

powers

York, N. Y.

Dean

Co.

Company

Oilman

a

stitutional

James Wiley

Columbus, Ohio
Carl H.

Branch Office

New

a

to be

broadening

Philadelphia National Bank

The First Boston

E. Murphy

The Ohio

5-1421

From New York City—WAIker 5-7887

31 West Main St.

Moulton

Los Angeles,

Row, Hartford 4, Conn.

Telephone JAckson

-

New York, N. Y.

Philadelphia, Pa.

Savings Bank

was

constitution

state

purpose

Brainerd H. Whitbeck

Donald W. Moulton

of the New York Stock Exchange

were

the

Williams had had

Chicago, 111.

PUTNAM & CO.
6 Central

V.

bonds

foundation;

Braun, Bosworth & Co., Inc.

The

Morrison, Jr.

Harris Trust and

Member

v

Robert

Moroney, Beissner & Co.
Houston, Tex.
William

New York,

constructed,

be

the

the

ment, whereas the action taken in

Stone, Jr.

Stubbs, Watkins & Lombardo,
Inc., Birmingham, Ala.

Robert E. Moroney

Connecticut

to

when

of

revenues

issue bonds for industrial develop¬

Miles A. Watkins

Blyth & Co., Inc.

Investment Banking and Brokerage

the

to

for which the
issued, industrial
development, was not authorized
by the constitution. The court dis¬
tinguished the Williams case on
two grounds: (1) There had been
an intervening constitutional
amendment authorizing cities to

York, N. Y.

Toledo, Ohio

Louis, Mo.

New

ern

.

William F. Morgan

Over 50 years of

facility

Neville Walker

A. G. Edwards & Sons

CONNECTICUT COVERAGE

.

addition

v

Richard Morey

St.

(1949), the court had held that the
pledging of utility revenues, iri

The Marine Trust Co. of West¬

•;*-.«/

v;

Kuhn, Loeb
New

was

the

to

dustry served a public purpose. In
the prior case of Williams v. Har¬
ris, 215 Ark.' 928, 224 S.W.2d9

Dain &

Fred D.

York, N. Y.

David T. Mir alia .-J1

Louisville, Ky.

greater than the bene¬
lessee, the court held
that securing and developing in¬

Security First National Bank
Los Angeles, Calif.

McGee

the

for the bonds. Finding
general benefit to the

the

public
fit

Franklin Stockbridge

R. W. Pressprich & Co.

James W. Chandler

that

York, N. Y.

H. J. Steele & Co.

Portland, Oreg.

York, N. Y.

security

New

Pittsburgh, Pa.

George A. McFaul

O. V. Cecil

Scott Russell

Harry J. Steele

City, Mo.

of

credit; The bonds were to
by rents received un¬
city's utility revenue ac¬
count. The plant to be constructed
was to be mortgaged as additional

Glbre, Forgan & Co.

New

a

corpora¬

loan

a

the

der

Drexel & Co.

York, N. Y.

Kansas

constitute

or

corpora¬

the/ city

private

a

be serviced

;;

Baltimore, Md.

M.

con¬

city's

Creighton Riepe
& Sons

Walter H. Steel

v.

Commerce Trust Co.

& Co.

Chicago, 111.

quest.)

Cincinnati, Ohio

tion

Co., Inc.
Minneapolis, Minn. '

Joseph M. Luby

John Nuveen

Seasongood & Mayer

J.

private

not4; make

did

shareholder in

violation of

White, Weld & Co.
New

ties for lease to a

tion

Nicholas V. Schaps

York, N. Y.

that the sale

bonds to finance the

struction of manufacturing facili¬
•

Chicago, 111.
;

Act, holding

of such

Bacon, Whipple & Co.
y

the

of

Francis R. Schanck, Jr.

&

Lloyd B. Hatcher

Hayden, Miller & Co.
Cleveland, Ohio

on

/AA/ly/i.

proposed to

be issued for
development, the Ar¬
kansas court sustained the validity

Schmidt, Roberts & Parke
Philadelphia, Pa.
; :

,

.■/;/:

Harding

334

taxpayer's

a

industrial

Louis, Mo.':'

Paris

Goldman, Sachs & Co.
New

bonds

Co.

Allen D. Sapp

Henry L. Harris

Dana F. Baxter

(Avail¬

V
B.

Co.

Burr, Inc.
Boston, Mass.
V

I

Hogle & Co.
Denver, Colo.

G.

Coffin

par¬

Summary of

members

J. A.

Trust

York, N. Y.

William

of America,

compiled consider¬
regarding municipal se-. Frederick F. Barker

able data

(a)

Bankers

&

Alex. Brown

W. Neal Fulkerson, Jr.

Alan K. Browne, Chairman
-Bank

J.

Washington, D. C.

COMMITTEE

Securities

,

Nolan, Fleming-W.
Hibbs & Co., Inc.

SECURITIES

MUNICIPAL

Municipal

V

Ergood, Jr.
Co., Incorporated
Philadelphia, Pa.,
&

Folger,

Respectfully submitted,

Regarding

•

Arthur. S. Friend'

Funds.

Research

////..A;,

Snapp,

suit to test the validity of revenue

Gordon Reis, Jr.'

of

Way land
v.
633
(1960),

Oklahoma City, Okla.

St.-

Richard Doke

Stroud

In

/;'. Mercantile Trust Co.

;..V:/- Ou

a

Russell M.

A

of some of the principal
May, 1960 a Digest of,
Authorized Investments and Ac¬ court decisions regarding munici¬
tual Investments of State Pension pal financing during the past year.
IBA

•

,

'

S.W.2d

Boston, Mass.

J.¬

f n;;

of Particular Interest to the

ARKANSAS

Thomas L. Ray.

Michigan Corp.
Detroit, Mich.
;

*

vm

municipal

York, N. Y.

First

•

bonds at public sale.
There

New

1960

Municipal Securities Business.,,

First National Bank & Trust Co.

Estabrook

.

The Chase Manhattan Bank
•

New

A

Summary of Court Decisions in

Marson B. Pratt

John W. de Milhau

1960).
; Trends in School Financ.e
(November, 1960).

consideration

on

1960).

(June,

v

.

Darmstatter

Stifel, Nicolaus & Co., Inc.
St. Louis, Mo.

Yields (September,

nicipal bonds at public .sale, jthe
Committee -presently has under

dations

Chicago, 111.
William

Co., Inc.
York, N. Y. v

Felix N. Porter

Burns, Corbett & Pickard, Inc^

E.

Seasonal Variations in Bond

dations regarding the sale of mu¬

pamphlet

Winston-Salem, N. C.
William J. Corbett, Jr.
1

APPENDIX

&

Eddleman, Pollok & Fosdick,
Inc., Houston, Tex.

"

Municipal Bond Market
in 1959, a Year of Economic
Expansion (March, 1960).
Short
Cycles
in ' Interest
Rates in the Municipal Bond

Thursday, December 15, ,1960

.

Lewis W. Pollok

Wachovia Bank & Trust Co.

The

.

Peter V. N. Philip

Clark, Landstreet & Kirkpatrick, Inc., Nashville, Tenn.

.

.

«i t

' <0 i<