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DEC 16 194'
Final
In 2 Sections-Section
ESTABLISHED OVER 100 YEARS
Edition
1
©
I
ommetcial an
Beg.
Volume 458
New
Number 4238
t. S.
Pat.
Office,
60 Cents
Price
York, N. Y., Thursday, December 16, 1943
a
Copy
The Critical Period Of
Transition Alter V.
Stabilization Further Considered
A Discussion Of The Revised White Plan, Britain's Blocked Balances, And The Post- Fennelly Holds Accumulated Purchasing Power
War International Investment Bank—The Author's Constructive Program Of
Serious Inflationary Danger Unless Production
Post-War Currency And Financial Reconstruction
>
.
By BENJAMIN M. ANDERSON, Ph.D.
^
;
Speedily Increased To Satisfy Demand — Visualizes
Post-War Price Level 50% Above 1940 And Value
Of Gross National Product 140 Billions Making Tax
.
:
;!V
<
(Dr. Anderson is Professor of Economics at the University of California, Los Angeles.
He was
He is Consulting Economist
formerly Economist of The Chase National Bank of* the City of New York.
Yield Of $20 Billions Based On Existing Tax Structure
of the
Capital Research Co., Los Angeles; is a member of the Executive Committee of the Economists'
National Committee on Monetary Policy, and is a member of the Post-War Committee of the Cali¬
fornia Commission on Interstate Cooperation.—Editor.)
I
welcome
the
invitation
of the British
discussion
the
''Commercial and Financial Chronicle" to
of the
American
and
renew
Treasury proposals for post-war foreign
ex¬
change stabilization in the light of the revised plan issued by the U. S. Treasury on July
10, 1943, and*
^
' '
4.:;vv ■
the
U.
S. version of the White Plan
T r easury which call for discussion,.
-'J?;"
|
.
VU
Sd&\
f
,
*v.
an
a
Unitas
.
t io
n a
1
Characterizing
by
as
"highly dangerous fallacy", the assumption
a
of our statesmen and business leaders "that we shall have a
many
period of transition between the defeat of Hitler and the
Japan," John F. Fennelly, Executive Director of the
Committee for Economic Development, in an address in New York
before the American Society of Mechanical Engineers, declared that
■; '■
1 ———rr
.♦v'we shall face
fairly
easy
final crushing of
—•
■
a
Restoration Of American Freedom
plan for
intern
dfi®.
Deposits
1
Pattern For World Liberty: Bricker
-
The
in-
original plan had pro-!
vided for the deposit of gold]
vestment
with the International Stabil-i
Says America Must Return To System Of Government
bank issued
By Representatives Of People Rather Than Bureauization Fund, creating Unitas]
on
Oct.
8,:
deposits against which 100.%! % cracy To Remain Force For World Good.
1943 and to
el
a
my
te
r
reserves should be held,; •.
Asserting that the nation "must meet, a threefold challenge be¬
arid had provided that a 100%; yond winning the war," Gov. John W. Bricker of Ohio, on Dec. '11,
own al-;
cited,.as first,
native; gold reserve should be held, the
aims at the Waldorf-Astoria Ho¬
devotion
borate
constructivepropos a
1
s
for financial
BanJ.
M. Anderson
and
cy
eurren-
stabilization in the
war-
gold
stricken countries.
'
The criticisms which I made
in
Keynes and White plans
my address before the Los
Chamber of Com¬
on May IT in general
Angeles
merce1
still
stand.
ever, some
address
*This
of the
There are,
how¬
changes in the
new
Chronicle
of
May
20
and May' 27.
It
Economic
Bulletin is-?
sued
by the Capital Research Company
of
Los
Angeles of
May
11,
1943.
and
was re-printed by the Economists' National
Committee on Monetary Policy,
70 Fifth
Avenue, New York City.
It appears in
full in Vital- Speeches of, June 1, and. in,
the May issue of the Bankers' Magazine
(Boston).
It is assumed for the purposes
of
this article
the
that
it
to
The
in
appears
with
that
British
is
the
and
reader
is
American
familiar
plans,
and
not
necessary for Dr. Anderson
repeat what he said in his original dis¬
cussion.—Editor.
United Lt. &
printed in full in twq
was
installments of the Commercial and, Finan-.
cial
crirical
of
all
-
ability toward
establishing
"a
tel; where he spoke at the annual
dinner of the Pennsylvania So-
our
lasting
'{■
Hpiefy of New Yovk.% -i. >:; v >"'•
:*i' In making the statement before
and
just
the gathering
peace
on page
the
the American people will work in
second,
tion
as soon as
Hitler
throws
in the sponge,
and we
must
make
our
plans accord¬
ingly."
T h e
title
of
(Continued
on page
2438)
deliv¬
dress,
political
and
-
Special
and; third, the
lifting
''ever
higher of the
interest
material
to
Nov,
"The
was
Critical
riod
Pe¬
Tran¬
of
After
sition
V-Day"
he
and
stated
therein
John F. Fennelly
that
"army experts
estimate
that, after the
end
be
of the European war, we may
to
full-scale
items
and
reference
with
of
dealer
activities in the States of Connec¬
cut
back our munitions
Fennelly
war
against Japan." Mr.
indicated
that
practi¬
cally
every
specific
post-war
(Continued on page 2434)
ticut, Michigan and Missouri ap¬
moral'; and
pear
spiritual
our
30,
on
production by approximately 80%'
and still have enough to fight a
In This Issue
to¬
talitarianism "
standards
ered
forced
America"from
economic
Mr.
Fennelly's ad¬
now
setting free of
in this issue.
For
of
Connecticut
Michigan, 2420;
John w- Bricker ;y
people."
Governor
2424)
move
forward with the confidence that
^
(Continued
that "we must
in the world";
pe~
liod of transi¬
•
against all Unitas deposits. J I|
had objected that Unitas de-j
posits would also arise when*
ever the Fund gave credit on
its books as it purchased for-
A
Is
Bricker
outlined
page
see
and
page
2419;
Missouri
on
vi'V '
2418.
THE
these
General index
Rwy.
on
page
2444.
CHASE
NATIONAL BANK
Common, W. I.
OF THE CITY OF NEW YORK
United
Light &Pwr.
Air
Preferred
Dealt
in
the
on
York
New
MANHATTAN
Transport
BON® FUND
SECURITIES
Curb
Bond
Brokerage
Broaden your customer
Service
Exchange
service with Chase
PROSPECTUS .ON
Hirsch, Lilienthal & Co.
Members New York Stock Exchange
and
other
Exchanges.
and Dealers
NEW
YORK
25 Broad
HAnover
-
Geneva
4, N.Y.
CHICAGO 3, ILL.
State 8770
2-0(100
Teletype NY 1-210
INVESTMENT
Rep.
135 So. LaSalle St.
St.
Teletype CG 1219
64 Wall
HUGH
SECURITIES
W/lONG
^—INCORPORATED
Hardy&Co.
facilities
Members New York Stock Exchange
634 SO. SPRING ST.
JERSEY CITY
Albany
Buffalo "* Syracuse
Pittsburgh
Williamsport
Dallas
—
LOS ANGELES
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30 Broad St.
Tel.
DIgby 4-7800
Member Federal
New York 4
Deposit Insurance
Corporation
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.
Actual Trading Markets, always
and
DEALERS
York Curb Exchange
Members New
15 EXCHANGE PL
PHILADELPHIA
Troy
in
and-GOMPANY
Street, New York 5
BOSTON
r~:
BROKERS
correspondent
R. H. Johnson & Co.
Established 1927
London
for Banks, Brokers
REQUEST
Purolator
SELLERS-
Public Utility
Products, Inc.
BUYERS.
Preferreds
Federal Machine and
—Net Prices~~
Welder Co.
BONDS
Over-The-Counter Securities
•
Bought—Sold—Quoted
BULL, HOLDEN & CQ
MEMBERS
Kobbe, Gearhart & Co.
REYNOLDS & CO.
INCORPORATED
NEW YORK STOCK EXCHANGE
Members
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TELEPHONE-RECTOR 2-6300
N.
Y.
Security Dealers
45 Nassau Street
Tel.
REctor 2-3600
PhilAdelphia
Ass'n
New York 5
Teletype N. Y. 1-576
Telephone:
Enterprise 6015
Members New York Stock Exchange
HART SMITH & CO.
120
Broadway, New York 5, N.' Y.
Telephone:
Bell
REctor
ira haupt & co.
Members
New York Security Dealers Assn.
52 WILLIAM ST., N. Y. 5
Bell
HAnover 2-0980
Teletype NY 1-395
Members of
•
2-7400
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New Tork
Montreal
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7;7,;*. Thursday, December 16, 1943
FINANCIAL CHRONICLE
THE COMMERCIAL &
2414
:Trading Marketa in:
Hearst
American
U. S. FUNDS for
We Maintain Active Markets
Publishing
CANADIAN INDUSTRIALS
Preferred
CANADIAN UTILITIES
Triumph Explosives
Birmingham Elec. 6%
Cyanamid Pfd.
Botany Pfd. & Common
CANADIAN MINES
United Gas Improv.
Residuals
Walworth Pfd.
;
CANADIAN BANKS
•
,
Common & Preferred
New
York
Members N. Y. Stock
V
Exchange and Other Principal Exchanges
Ass'n
Security Dealers
Exchange PL, N.Y. 5 HA
40
.
.
York
NEW YORK 6, N. Y.
115 BROADWAY
2-2772
BArclay
Telephone
Tel.
Teletype NY 1-672
7-0100
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NY 1-1557
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Direct wires to
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BROADWAY, NEW YORK
120
,
Members New York Stock Exchange
25 Broad St.,
Exchange
Stock
York Curb Exchange
New
Steiner,Rouse&Co.
Members
•
,
New
Established 1020
Members
jVfcpONNELL&rO.
Goodbody & Co.
KING & KING
Osgood, Common
Warren Bros. Class "B" & "C"
CANADIAN RAILS
Seaboard Airline Ry.
Birmingham Elec. 7%
Remington Arms
our
branch offices
TELETYPE NY 1-423
BELL
Axton-Fisher Tob., B
Lazard Freres & Bo.
Forecasting The Management
& Pfd.
AiiRotEsisoGoistemptated
Partnership Changes
Problems 011944
Consolidated Mach. Toot Units
Kearney & Trecker
Spectre Of 4 Million Unemployed
At End Of 1944 Challenge To Management As Con¬
Leo M. Cherne Sees
Pittsburgh Hotel 5's, '62 & '67
Setay Co., Common
Large-Scale Unemployment Would No Longer
tinued
United Traction of Albany, vtc.
Accepted As Inescapable—Holds Anti-Inflationary
Early Next Year And Effect
Be
Dam Will Be Breached
llCil
iy
Will Be Echoed In Political Arena.
Stock Exchange
Members Baltimore
120 Broadway,
In
N. Y. 5
44
Co.,
New
England P. S. 6% PI. Pfd.
New
England P. S. 7% PI. Pfd.
Wall
Dumont Lab.,
Street, New York City, members
of the New York Stock Exchange,
following
the
announce
contem¬
plated changes in their firm:
•1 Frank Altschul will retire from
partnership as of Dec. 31, 1943. He
h^s membership in
Exchange,
President of
American Investors Com¬
Stock
York
New
the
Edward A. Purcell & Co.
Members New York Stock Exchange
Members New York Curb Exchange
65
year
WHitehall 4-8120
Broadway
Bell System
and will continue as
and which "will form the backdrop against which American General
will be called upon to perform its responsible
pany, Inc.'
7:, V: ;7';
7 -V V77\
tasks," Leo M. Cherne pointed out on Dec. 4 that "first, the only
Pierre David-Weill and Andre
event that will happen with certainty in 1944 is the election in
WOrth 2-4230
Teletype N. Y. 1-1227
Bell
&
Freres
'Lazard
:
will continue
;
in his. opinion, will occur next
summarizing events which,
American Utii. Serv. Pfd.
Teletype NY 1-1919
business management
'
Meyer, resident in New York, and
November; second, less likely, but highly probable, is the defeat
of
.
MacMillen Co.
Germany,
the
and third,
i
Common
n
f 1 ationary
spiral will get
int
Taggart Corporation
shortly
again
Preferred
■t
motion
o
after
New
United Cigar Whelan
Preferred
Vanderhoef & Robinson
31
Curb Exchange
York
NY
Teletype
System
tional conference at the Waldorf-
Cie., France, a continu¬
ing partner of the
ior Vice President
many,
out
these and oth¬
1-1543
events like¬
the
the
revival
economic
of
frictions, and a widening gap be-,
tween the legislative and execu¬
Government."
ly to transpire
in the coming
tive branches of
in anadr
dress,
"Fore7
casting the
spectre of 4,000,00,0 unemployed at
the end of 1944—the estimate of
year,
Leo.
Cherne
M.
Indiana Limestone
Management
1952
Problems
of
our
thai; "the
Making the statement
1944,"
Institute—will
Research
the
(Continued
.
not
2432).
on page
;
&
Folger Says Investment Banking Business
Has Benefited By Decentralization
Preferred
less "global" and more down-todecentralization that has occurred in recent'years,
Investment banking has grown
earth because of
a
H. G. BRUNS & CO.
according to J. Clifford Folger, President of the Investment Bankers
Association of America, speaking before the Bond Club of Phila¬
New York 5
delphia last night (Dec. 15).
"Out of this change has come," Mr. Folger said, "a more per¬
20 Pine Street,
Telephone: WHitehall 3-1223
Bell
Teletype
NY
1-1843
sonalized
and
wholesome
system of dis¬
In this
tributing
curities,
sis
one
where the
Exceptional Facilities For The
sound
cus¬
se¬
more
more
Our
STOCKS & BONDS
has
more
Members
37 Wall
Bell
N. »Y. Security
St., N. Y. 5
"is
business
Teletypes—NY
1-1126
&
1127
of the Bank of
to
the bone," he said,
necessarily
the
ideal
to
not
a
Deb.
FASHION
Cas
1
Associated
John
Clifford Folger
PARK, Inc.
business
on page
7-?
2437)
Panhandle Eastern
PARK, Inc.
I
ST., N. I. 5
WHitehall 4-4970
Teletype NY 1-609
other leading
national exchanges,
and
Howard Froelick
admit
Hetherington, a mem¬
Stock Exchange, to
F.
i
ST.
WALL
'7
.
NEW
5
YORK
HAnover 2-9470
;Baltimore & Ohio 4s, 1944
Missouri Pacific
5Vis, Serials
Seaboard Air Line 5s, 1931
partnership in the firm as
Both were part¬
limited
BUCKLEY BROTHERS
of Jan. 1, 1944.
in De Coppet & Doremus
ners
7
MARKETS
TRADING
the
ber, of
for
Members New York Stock Exchange
many years.
63 Wall Street, New
York 5, N. Y.
WHitehall 3-7253
Spencer Trask & Co.
Direct Wires
To Admit Partners
•Spencer Trask & Co.,
Recent
25 Broad
Street, New York City, members
of the New York Stock Exchange
and other leading
H.
H.
F.
Charles
admit
Exchanges, will
Bryan, Harold
Cook, B. C. Eustis, and Anton
Rice, Jr. to partnership in the
on Jan. 2, 1944.
Mr. Bryan
firm
been
has
Co.-; of
with the
firm as man¬
to
Philadelphia & Los Angeles
Developments In
Seaboard Reorganization
Frederick M. Stern, member
the
with
New
York
offices
E,
at
of
Exchange^
Hutton &
Stock
F.
Co., 61 Broadway, New York City,
has prepared a memorandum on
"Recent
Developments in Sea¬
board Reorganization." The report
discusses the court-approved com¬
California,
210
West
7th
"i
;
■■■■'•
,
Tele.
NY 1-210
on
request.
to
Troster,Curries Summers
74
Y.
Security Dealers Ass'n
Trinity Place, N. Y. 6
Teletype NY
Private
Wires
Detroit
-
to
HA 2-2400
1-376-377
Buffalo
Pittsburgh
-
-
7%
■
-
>
■
Carey Trust-All Issues
an
Jefferson Lake Sulphur,
cumulative
possibilities,
by
Walnut
according
members
Buckley Brothers,
1529
Philadelphia,
Pa.,
St.,
of
Philadelphia
the
New
Stock
York
be sent upon
,
Brothers.1
Pfd. & Com.
Jonas & Naumberg
-
*
interesting memorandum is¬
*
Nu-Enamel
Pittsburgh Railways
♦Analyses
upon
request
and
Exchanges.
Copies of this memorandum will
Cleveland
St.r Louis
Looks Good
preferred
stock,of Brill Corporation offers
The
attractive
N.
,7.
request.'
Galveston-Houston Co.;
sued
St., New York 4, N. Y.
2-0600
York Curb Exchange
Members New
64
•
Goodbody & Co., 115 Broadway,
New. York City, members of the
New York Stock Exchange and
v
Brill Corp.
Allan B. Du Mont Lab.
Members New York Stock Exchange,
*T4r»nver
Frank C.Masterson & Co.
Two New Partners
firm
PARK, Inc.
Simons, Linbnrn & Co.
70 PINE
York Curb Exchange
which
Crowell-Collier
Members
25 Broad
New
Goodbody Co. To Admit
5s, 1963
Bought—Sold—Quoted
G.A.Saxicn&Co.,Inc.
on
of the bond department. Mr.
Cook is public utility analyst for
Preferred
Electric
in
ager
(Continued
Common
FASHION
*Dealt
Teletype NY L-1140
St., Los Angeles, Calif. Copies of
this circular may be had from the
Associated
Bldg. 6s, 1951
.
a
FASHION
Harriman
promise plan of reorganization
and concludes that "the most in¬
banking
Spencer Trask & Co.
traditionally
teresting prospects for price ap¬
suffers
in
war
time,
the IBA
preciation seem to be offered in
President pictured it as occupying
Insursmce Stock Attractive the Seaboard General Mortgage
a
issues and particularly Consoli¬
strategic and vital position in
the post-war period. "There is a 7 The current situation in Great dated 6s of 1945 which enjoy the
American Insurance Co. offers at¬
tremendous amount of money, be¬
most active market."
Copies of
tractive possibilities, according to
this interesting memorandum may
ing dammed back awaiting oppor-.
a
detailed circular on the; com¬
be obtained from Mr. Stern upon
tunity to be put to use," he said. pany
prepared by Butler-Huff &
as
like that
securities is
profitable
ambitions
Describing investment
becoipe
sibly less
glamorous. On
the whole, our
machinery for
distributing
Dealers Assn.
business
goal."
salutary.
merchant, pos¬
Hanover 2-4850
sufficiently
the
men,
regulated
direct
of the average
SreeTieaniGompauu
of
need
and
energetic
in order that it will
be adequately staffed.
"Business
arid, therefore,
OVER-THE-COUNTER
the
attract
young
relationship ii'
of large blocks of
to be stimulated.!'
connection, he laid empha¬
on
being
tomer-banker
ACCUMULATION OR PLACEMENT
one—one
Tybor Stores Com.
the Manhattan Company
Arthur
Common
resident part¬
William Howard Schubart, sen¬
will
Struthers Wells
514,%, Debentures
&
Common & Preferreds
\
"
of Ger¬
defeat
*5%
'
7. 7-
"manpower and womanpower
shortage will grow in intensity
witness
Central States Elec. (Vat)
New York firm,
will be admitted as
Astoria, in New York. He also ad¬
vanced among other views that
shall
er
6s,
Freres &
ners.-
brought
Telephone COrtlandt 7-4070
Bell
of' Managementna¬
vancement
America,
New York 5
Nassau Street
Ad¬
the
for
Society
of Lazard
of
and Al¬
Cherne, who during the first half of the year, bert J. Hettinger, Jr., Vice Presi¬
i s
Executive but will lessen perceptibly; during dent of General American Inves¬
In sum¬ tors .Company,
Inc.,
will
be
Secretary
o f the second: six months."
the
Research mary,
said Mr. Cherne, 7-1944 admitted to partnership on the
I n s t i tute of promises to be a year in which we same date.# \
.
7';;/'
.77'
Mr.
Year."
Members Hew
the
before
firm
the
members
—
-
request by Buckley
T. J. FEIBLEMAN & CO.
Members
New
Orleans Stock Exchange
41 Broad Street
BOwling Green 9-4433
New York 4
Tele. NY 1-493
Volume
Number 4238
158
The
COMMERCIAL
THE COMMERCIAL
^
U.
Reg.
William
CHRONICLE
Patent Office
S.
B.
Dana
,
.
■
William
Dana
D.
Seibert,
Riggs,
Alegre Sugar
•"
Business
■'
Manager
A. E.
Thursday, December 16, 1943
Published twice
a
interested in
week
offerings of
Public
iicHTtnsTtin
-
High Grade
Haytian Corp.
Kellogg Company
President
/
,
are
Vertientes Camagy
.
Seibert,
Editor and Publisher
William
8
4
We
3-3341
Herbert D.
'
-v
,
25 Spruce Street,. New York
BEekman
Punta
Company
Publishers
2415
and
*i'
FINANCIAL
FINANCIAL CHRONICLE
1
Utility and Industrial
""
1
'■
■
ASD COMPANY
CUT YOUR LOSSES
PREFERRED STOCKS
ON OBSOLETES
Sell
those
little
and
bonds
now
your
Spencer Trask & Co.
v
Staley Mfg.
losses
for
Get
poses.
our
(general
Thursday
and
news
and every
v
advertising
STRAUSS BROS.
Members
32
Chicago—In charge of
Fred H. Gray, Western Representative,
Field Building (Telephone State 0613).
London—Edwards & Smith, 1 Drapers'
Copyright
London,
1943
Reentered
by
as
N.
Y.,
New
York
Security Dealers
CHICAGO 4
Harrison 2075
DIgby 4-8640
Teletype CQ
Teletype NY 1-832, 834
Cheever Cowdin Stresses
J.
•
120
B.
Dana
Company
second-class matter Feb¬
under
the
Act
of
PRUDENCE
March
-
Other
BONDS
Suggestions For Simplification of Tax System and Ad¬
Special Tax Incentive to Encourage Production.
CORPORATION
vocates
Is
ALL ISSUES
yr.
in New
York
Members
40 Wall
New
Stock
York
Exchange
J
Teletype
NY
|
1-2033
-
Capital
New
:
And
Reasonable
Interpretation Of NASD 5% Decree Is Now Made
in
American gov¬
ernment must
Dividends
Snuffy Smith would say, "now the rag is off the
bush." In the Charles Hughes & Co. case the SEC, in an at¬
tempt to prove to. the U. S. Circuit Court of Appeals in this
District that it was justified in revoking the dealer-broker
registration for marking up securities on the average by 25%,
pointed out that an NASD Business Conduct Committee had
fined a member dealer $500 for making a practice of mark¬
ing up securities by only approximately 10%.
The Commission contended that when the
Hughes firm
sold securities substantially above the prevailing market
price without disclosure of the mark-up to the customer, such
practice constituted fraud and deceit upon the customer. Now
the way the SEC is attempting to show that a dealer's mark¬
up practices do not
have a reasonable relationship to
the current market price is to establish the fact that the
"custom of the trade" is to go in for smaller mark-ups. Hence
the Commission's citation of the disciplinary action of an
NASD Committee in a 10% ;mark-up case. The Court'af¬
firmed the Commission's order revoking Hughes & Co.'s
dealer-broker registration and in its opinion made reference
to this citation. (Full opinion of Court appears in this issue,
starting on page 2418.)
e
s s
and
Mr.
be
.
based
on
vital,
all-im¬
portant
pro¬
M
on
page
Cheever
take
the
Cowden
of America to
leadership in
gram.
(Continued
the post-
on page
2430)
STRIKE THREE!
.
■
a
a;
member of NASD, •■having resigned
in
Future of
Average Over-The-Counter Dealer Jeopardized
datory
upon
The United States Circuit Court of
Appeals for the Sec¬
^
(Continued
on page
2440)
Pacific Coaii
\\
Bottlers, Inc.
£ecu>utied
White Rock
Surch
the
Chronicle."
1st
7% Preferred
your
all security dealers. I have shown to Congressman T. G.
December
2nd
issue
He stated that if I
of•
the
"Commercial
&
Financial
(Continued on<page 2421)
Wyeth
*
&
Co.
Since 1893*
Hon Rose STrsster
Established
NEW YORK
LOS ANGELES
Members N.
74
could find out for him the proper
authorites in Washington to contact regarding this he would do what
Security
Dealers" Assn.
Broadway, New York, N. Y.
REctor 2-5288
Bell
System Teletype, N. Y. 1-2480
1—
YEAR END SALES
or
Inactive
i
Securities
[MOB,
H
ond Circuit has
when they tried to force down the throats of the Associa¬
ruling requiring all brokers: to have a minimum capital of
efforts this ruling was rescinded.
.The immediate plan for limtatioh of profits will affect me in the
long run. Because, if this rule stands, the SEC will make it man¬
Ill
York
Est. 1926
By A. M. METZ and E. A. KOLE*
ago
$5,000—thanks to
.Member,?
New
—SEC Gets Disclosure Rule
'
protest1 about
J.RReilly&Co.
Over-the-counter
Red Rock
»
been^reading, with a gregt deal of interest, recent editor¬
ials.and comments by dealers regarding limitation of security dealers
in NASD at 5%. At the moment this does not affect me because
Wickwire Spencer
Active
More Dealer Comments On NASD Rule
il have
Mo. Kansas "A"
Firm Bids On
practices.
2441)
DEALER NO. 88
Federal Water
businessmen
J.
,!
tion
Teletype NY 1-1203
Cowdin, who is Chairman
of the NAM Government Finance
'
longer
Broadway
Moxie Co.
.
am no
Information
New York 6, NL
HAnover 2-8970
just handed down a decision, which in the
opinion of the writers, will be used by the Securities and
Exchange Commission to exercise and to justify a more rigid
"supervision" of security dealers than ever before, a super¬
If todaj^imder the 5% profit limitation decree a dealer vision which will mark the gradual demise of the small overshould be disciplined by an NASD Business Conduct Com¬ the-counter dealer. •
mittee for marking up securities by 6% you may be sure the
The issues arose in the case of Charles Hughes & Co.,
SEC will seize upon such action as indicating that the mark¬ Inc., petitioner, against The Securities and Exchange Com¬
up practice of the industry is then such as to place a dealer mission, respondent, and involved the review of an order of
in a position where he can be held to have acted in a fraudu¬
lent manner if he marks up securities by as much as 6% and
*Editor's Note—Messrs. A. M. Metz and E. A. Kole are
fails to disclose just what the mark-up is to the customer.
members of the New York Bar and have successfully
This opens up the whole question as to the point at
defended litigation involving "market price", and "mark-up"
which a dealer on a non-disclosure of mark-up basis should
•'
QUOTED
-
Statistical
39
Thereon—'
Committee, said that the "greatest
single deterrent to free competi¬
tive enterprise, to sound business
economy, to production and there¬
duction, which fore to jobs, is taxes" and urged
is the crux of that the
present "vicious and so¬
the
problem cially harmful" system be sim¬
of jobs.
plified as the first step in build¬
Calling
on
ing a sound post-war tax pro¬
&
As
a year
SOLD
Members New York
Security Dealers Asm.
York^1
Possible.
I
-
L.I.GOLOWATER&CO
City, Mr. Cow¬ war program, Mr. Cowdin warned
din,
in pro¬ that, unless this is done, the coun¬
posing
this try is liable to have "greater reg¬
program, stat¬
imentation, a larger dole system,
ed
that
the nationalization of industry and a
future of more serious depression than we
American bus- have dreamed of in the past."
Small And Large Dealers Alike Are Astounded As Worst
r
I
Before the National Association of Manufacturers' convention in
Hughes Decision Stuns Dealers
(
Complete
three-point program covering overhauling of the tax structure,
balancing of the Federal budget and refunding of the war debt was
declared essential on Dec. 10 by J. Cheever Cowdin, Chairman of the
Universal Pictures Co., Inc., if business is to accomplish many of the
problems facing post-war America.
WHitehall 4-6330
St., N. Y. 5
Bell
funds.
(Continued
4-6551
A
Newburger, Loeb & Co.
foreign subscriptions and advertisements
made
Venture
For
Present Plight Of Stockholders Is Distressing.
Bought—Sold—Quoted
NOTE—On account of the fluctuations
in the rate of exchange, remittances for
be
WHitehall
CERTIFICATES
BOUGHT
Federal, State And Local Budget of $30 Billion—Holds Vital Need
Monthly Earnings Record—Mth.. .$20 yr.
State & Municipal Compendium-
$35
pur¬
Securities Dept.
Publications
Semi-Annual
tax
INC.
Looks For National Income Of $125 Billion And Pleads For Post-War
PRUDENCE COMPANY
Bank and Quotation Record—Mth. $20 yr.
must
income
bids.
TITLE COMPANY
Essentiality of Balancing
fund $300 Billion Debt Over Next 100 Years—Offers
3, 1879.
Subscriptions in United States and
Possessions, $26.00 per year; in Dominion
of Canada, $27.50 per year; South and
Central
America,
Spain,
Mexico
and
Cuba, $29.50 per year; Great Britain,
Continental Europe (except Spain), Asia,
Australia and Africa, $31.00 per year.
stocks
establish
Street, New York
Exchange
Federal Budget to Insure Sound Post-War Economy
and Proposes War Refunding Tax to Service and Re¬
,
E.C.
William
Wall
Jobs And Taxes
Ass'n
Board of Trade Bldg.
Broadway
NEW YORK 4
ruary 25, 1942, at the post office at New
York,
99
Telephone;
Offices:
Gardens,
Teletype NY 1-5
Members New York Stock
Monday
(complete statistical issue—market quo¬
tation
records,
corporation,
banking,
clearings, state and city news, etc.)
Other
Telephone HAnover 2-4300
Chicago Rwy. Equip.
"
issue)
traded
and
25 Broad Street, New York
Obsolete
every
(mhommmmm,
Members Los Angeles Stock Exchange
1914
Y. Security
Dealers Assn.
Trinity Place, New York 6, N. Y.
Telephone:
Teletype:
BOwIing Green 9-7400 '
NY 1-375
170 Broadway
Bell System
•'
COrtlandt 7-6190
Teletype NY 1-84
2416
•
Thursday, December 16, 1943
CHRONICLE
THE COMMERCIAL & FINANCIAL
'
BOSTON
BOUGHT
SOLD
-
Corp,
Gisholt Machine Company
Bought- Sold
Common
Hart Carter
}
Goodbody & Co.
Members N+ Y. Stock Exchange, and Other
Preferred
Company
REMINGTON ARMS
Quoted
-
UNITED ELASTIC CORP.
Common
Hart Carter
Company
BIRD & SON
COLONIAL STORES
Preferred
Machine Corp,
Foote Brothers Gear &
TRADING MARKETS
PUBLISHING
Common
Common
Deerfieid Packing Company
Foote Brothers Gsar & Machine
CRO WELL- COLLIER
QUOTED
-
United Printers & Publishers, Inc.
United Printers & Publishers, Inc.
Preferred
Viking Pump Company of Iowa
■'
115 BROADWAY
Common
'
j
UNITED
du
105 WEST ADAMS ST.
Common
■
'VS:;"' CHICAGO
NEW YORK
Pont, Homsey Co.
'
Capitol
have
We
Bought and Sold
Minneapolis
Milwaukee
Boston
;.[ '■
INCORPORATED
37
'
less
■■
BOENNING & CO.
CI, ■BeR Teletype LS 186
Distance 238-9
Long
Philadelphia 3
1606 Walnut St.,
,
Pennypacker 8200 '
Mohawk & Malone Railway
3l/is, 2002 (Registered),
at
52
less
!f
YORK
—
NY
834
Harrison 2075
Teletype CO 129
-
H.
Moor...
It's smart to be bearish.
Most of the services we see are hedging
are
planning to hold their cash for that condition known as "a safe
buying level."
The same people who only a few ^months ago were
forecasting a post-war boom that'*?
——
——r
would eclipse anything yet seen tax burden from corporations to
to statisticians, are guessing now stockholders
an(d adoption of a
how many millions will be un¬ form of incentive taxation
a
employed, how low the Federal reduction in excess profits taxa¬
Reserve Index will drop, and how tion seems certain in any event.
.
Thin
the
will
be
We do not have
a crystal glass.
fact, we do not even have an
Infallible chart system.
But we
surprised that more attention
has not been given to the changed
and
Deal.
for
time
think
we
In
are
It's
corporate profit margin
squeezed.
That
New
a
will
there
alone
,
Deal
be
makes
and
New
a
us
say,
Bruin,"
entirely
apart from such considerations as:
the market is discounting peace
"Caution,
and
Mr.
the
discounts
never
same
thing twice
the huge reservoir
capital awaiting the "proper
tax conception will change with
buying level" will miss out and
it. Every jrdustrialist with whom buy higher, as surely as later it
we
have
d.scussed
the
will
miss
the
subject
"proper
selling
there is
agrees that the present system is level" and sell lower
basically unfair, that the equiv¬ no urgent incentive to convert
alent in money could be raised equities to cash
the whole
by shifting a major part of the psychology of the country is to
political
treme
situation
likelihood
the
that
the
ex¬
basic
.
.
.
of
.
.
;
v
,
charge
no
•
mem-: the
for
! '' •' i-i*'4f*'
.
.
.
.
>
Buckeye Incubator
Company
Exchange.
-
{Q/l.;',y;;
-J
Common
T;*
.
■
CC^C:"-hu
| the office..
form the,
in .1939 becoming its Vice-
firm
cash
.
C
fact
bearish
every
•.
has
been
conceivable; President,
thought of; President.
and discussed and the market re-'
vestment
mains comfortable above its lows
.:'..C \
Perhaps the most convincing of
bull
is that
arguments
whom
bear to
nevertheless
Not
one
a
of
them
has
said
will be
at least several years
never)
before
buy.
And
stocks
are
think
we
a
a
it'
(or
safe
person
should be that bearish before
he
properly run the risk of with¬
drawing from common stocks at
this critical and confusing junc¬
his
assume
new
1944;
in
For
the
the
of the
affairs
stock
world.
market, unfortun¬
ately, is never that easy to inter¬
pret.—Washington Dodge in Ar¬
thur Wiesenberger & Co.'s J'Notes
and Comments."
.; v ■:, \
.
.
'
position
v*.
;t
;
.
Stock Exchange
Louis
St.
506
Olive
" ST. LOUIS
1,
Street
;
MISSOURI,
Teletype-— SL 62
"They'll Miss
Buckley
Mr.
;
:
Lewis Jr. has re¬
executive vi.ce-president
the Pioneer Ice Cream division
E.
of
Leonard M.
Curb
has become
a
Exchange,,
parnter in Frank C.
&
Masterson
as
Co., 64 Wall Street,
City, New York Curb
members.
Mr. Totten was previ¬
ously active as an individual Curb
ill
to
due
Company
Harry
Vice-Presidents:
health.
Totten, member of
York
New
Buckley
Borden
of
iaslerson Partner
11
.
signed
L !.• Tolleri Is Now
the
"
five
for
Request
engaged in bank rela¬
can
ture
Member
seven years
and
Street
on
Taussig, Day & Company, Inc.
'
about Jan. 1,
or
Analysis
/He has been in the in¬
business for
He will
on
4-;
became
tions work in the Middle West.
is
trying to guess the
"buying level." Their predictions
range from 125 Dow Jones to 90.
,
1941
in
and
years, was
every
have talked
we
He helped
LaSalle
on
for the year. "
all
post-war outlook
~.
•
Company.
use
with good
An interesting stock
the office of Vice-President of
to
guests ■' $4.00. Reservations;
Mr. Day recently' resigned 'as
should
be made promptly with President of the firm of Ryan-.
H. S. Parker of Kay, Richards' &| Nichols &
Co., Chicago, to accept
bers;
worth (although some of them in our opinion are
not worth very much)..
Floor traders are deeply concerned over
lack of bids (and hence are not bidding).
Tax sellers are generally
for all they
-rfV-'C-'CCi
CCC
is
There
The Market Outlook
PH 30
^
.
7-1202
ST. LOUIS
announced
that the
Duquesne Club
on Saturday, Dec. 18, at 12:30 p.m.; Board had approved the appoint¬
Guest speaker will be Dean -N. R.i ment of James Ei Day of Chicago
CHICAGO 4
4
1-832,
COrtlandt
Exchange,
be held at the
to
-
Private Phone to N. Y. C.
V.i
•
Board of Trade Bldg.
DIgby 4-8640
'
PITTSBURGH, PA.—The Bond: | CHICAGO, ILL; — Harry M.
Club
of
Pittsburgh ^announces Payne, Chairman of the Board of
their annual Christmas luncheon: Governors of the Chicago Stock
York Security Dealers Ass'n
Broadway
f
Pittsburgh Bond filubSl Day Appointed V.-P.
To Hold Xmas Luncheon Of Chicago Exch. ^ i l
v..L.V
_7-
l/t
STRAUSS BROS.
Members New
Stock
:
LOUISVILLE 2, KENTUCKY
V2
$15,000
in
interest
TV ;
'■
HOME LIFE BLDG.
18th FLOOR, KENTUCKY
-
3Yzs, 2002 (Registered)
at
"
continuing
a
Common
$15,000
,
1st
NEW
,
Bag & Paper Co.
CO.
Warren Railroad
Teletype
-
Southern Advance
THE
32
MASS.
^Teletype BS 424
PHILADELPHIA
subject to prior sale
V'
9,
4330
american turf association
Stock
17c offer,
BOSTON
;
.
Incorporated
\
New York
Chicago
1-672
;
A.C.AUYN«roCOMEANY
,
TELETYPE NY
Bank, Building
Shawmut
,
^
/.•
7-0100 i
BARCLAY
TELEPHONE
STOCKYARDS, PFD.
Principal Exchanges
Fauerbach, Harold Miller, Alfred
Ricciardi and Joseph Reydel Ji*.
will
assume
Business
Times
From
duties.
his
Notes
in
York
the New
of Dec. 10.
York
New
floor broker.
/:>'•
Trustworthy, Experienced,
Unlisted Stock & Bond >
TRADER
This announcement is not
an
offer to sell
or
a
solicitation of
securities. •; The offering is made only
an
offer to buy these
by the Prospectus.
,r(
.
with
.
'good
and
connections
references locally and through¬
out the country seeks employ¬
ment
NEW
ISSUE
•
•
Common Stock
facilities.
pointing
Corp.
time
interview.
cial
25
rff'--n'*:'
.
NOyou such intensive,
other reference gives
masterful handling of cor¬
in; conservative
poration taxes. This up-to-.
manual helps
determine your conu
.pany's [tax position and_
Strategy, gives 'you leads,
on specific problems, helps
you double-check your con¬
clusions against the experience of a, nationally
expansion of profits with their
existing
Clark Electronics & Aviation
association with,
pr
interested
be
33,333 Shares
by,
high standing firm who may
a
the-minute
Reply ap¬
you
personal
for
Box S 8, Commer¬
Financial: Chronicle,
and
Spruce
St.,
New
:
N. Y.
York 8,
::"
'• : '
($1.00 Par Value)
.
known
authority with a staff of associates ex¬
ceptionally qualified in legal and accounting
practice. Here are 2000 pages packed witlr
vitaf facts and valuable interpretations to guide
you
The Case Of "Dealer X"
Based
Court
Price $3.00 per
share
; l
T/'vt;,
A
the Circuit
of Appeals, December 10, 1943
Decision
upon
of
practical interpretation of'
this vitaTdecision
may
be obtained
from
the
The
"
book
••
important phases of
this decision
•
J. F. RESLLY & CO.
Price
16,
1943
$2.00
Combined
Broadway, New York 6, N. Y.
.
here
are
-
for
Price
\
Montgomery's "Federal Taxes on
tions, 1943-44" is ready to help
tion.
.
Then either send
postage,
Each
copy
53.00
Corpora-,,
you
expert, down-to-earth counsel. Let us
its two volumes for a free, five-day
or
return the
$15' plus
a
with'
mail
books. Write for.
today.
you
examina¬
few cents
your,
ft
^
Order
December
anticipated
'
the
Ill
which
.
EXAMINE A COPY FREE!
"Let The Dealer Beware!"
undersigned.
,
from
imum tax.
plus
Copies of the Prospectus
in your own daily problems
*|he principles you should know, culled
thousands of corporations tax cases,'
rulings, decisions. Yes, here is the overall
picture to .enable you to view'your tax status
from every angle and arrive at the correct min-,
all
Your Copies
Now
KEANE'S PUBLICATIONS
32
Broadway, N. „Y.
4
;
THE RONALD PRESS
x»5
£OMPANY
6ASH6 $T.;niw: Y6RK 10,
N. Y.
THE COMMERCIAL & FINANCIAL
Number 423*8
Volume 158
•'
C. G
Approves
CANADIAN
->»
;
fv
Railroad
Amended St. Paul Plan
i
New lettei*
showing distributions and poten-
Members
"f'm
;
;••••'•'/•*
Dominion of Canada
\ '• '
*
;
v
•.."■■,-,'.1'..Telephone: llAnover 2-7900
fr-\. Teletype: NY 1-911 ; ■'VV.:'.
V ;,
- ;
*
61
,
Members New
:
t
York
Stock
Broadway
Exchange
the
Steep Rock Iron Mines Ltd.
New York 6
J
Telephone—DIgby 4-4933
fr'
Internal Issues
pflugfelder, bampton & rust
:
-'-New.-York 5, N. Y.
,
"
'
'
:
i
49 Wall Street
"
Internal Issues
York Stock Exchange -
New
SECURITIES^
Canadian Provincial
Vilas & Hickey
'
Reorganization Securities
/
tial values available to brokers and dealers.
"'■•'i: :'
2417
CHRONICLE
Bell
5y2s,1957
Teletype—NY 1-310
HART SMITH & CO.
the thousands
thousands of items necessary
for the complete railroad system,
relying
upon
the ingenuity of
competitive business, guided by
open: market
.
the
demands
But They Must Go Out
^To Meet It, Speaker On Post-War
Railway Equipment Tells Engineers
of
the
of
& Pacific
a great future for the railroads, but they must go out to
it," said William I, Cantley, mechanical engineer, of the Asso¬
ciation of American Railroads, Chicago, in an address at the annual
meeting of the American Society of Mechanical Engineers in New
York early this month on "Post-War Research Possibilities in Rail¬
way Equipment." ■
v
//.v./://.;
\
[ "There,
"We
unlimited
must
in
and
entrusted to our care.
This factor of safety always has
for
six
with the
■years
mechan ical
research
fice
As
the
operated
and
controlled
iation.
railroads
and
said
of
soc
"While
slowed
u r
i
n
riod,
.
tion
the
such
in adopting new devices,
"In the
in respect to
SEABOARD
Quoted
—
LEROY A. STRASBURGER & OIL
1
WALL
wnitehall
mean
-»;
_
light of all the criticisms
the railroad in¬
ideas
what
dustry for many years concerning
have
new
terials
W. I.
ma¬
/
A Post-War
General Income "Scrip"
and
St. Louis,
..
Competition
Pfd.
Cum.
"The
Memorandum
Bought
Sold
—
Members
Philadelphia
York
New
request.
Stock Exchange
Stock Exchange
PH
Teletype
-
■
.
265
feel they
advantage
within the
try
Obligations
Serial
in
until
the
'
.
.
such
9
is often
NEW
'
Wires—Rector 2-6528
!
YORK
5
a
"Rock Island"
a
Discussion
;l:
Bell
for years.
& 2-6529
2-1355
;
.
"
on
*
}
of
research, which has been
of the
reasons
one
for much unfavor¬
able
such,
certain materials and
construction have
result,
a
is
Remained static,
leviated.
a temporary condition
hope will soon be al¬
In the meantime, plan¬
ning and
development are being
which
we
carried forward and
as
soon
as
it
possible to do so, the use
of higher grades of steel and vari¬
ous
alloys will be greatly ex¬
tended and entirely new applica¬
tions
of
lighter weight and
stronger materials will enter all
becomes
fields of railroad construction.
Locomotive Improvements
Such
project is
ex¬
'How
passenger
car
weight
our
as
phases of locomotive and car
"A
in
somewhat
been
during the war period
because of our inability to secure
last
a
has
"Progress
retarded
but this
stock
'j
Teletype B9 259
answer
to
There
this,
with
the
the
restrictions
locomotives
imposed by
of roadbed and bridges
which it must operate.
Un¬
type
over
der
good working conditions and
heavy traffic to be hauled
there is not much to be gained by
a reduction in weight.
However,
with
on
to
run
loco¬
-k weight-limit basis,
where the capacity of bridges and
roadbed
the
limit
weight of the
engine, much can be done in re¬
ducing dead weight through the
use of
alloy steel, as well as by
using a better grade of steel.
"With
present-day equipment
we must retain weight where pos¬
sible
so
as
to
achieve the
neces¬
factor of adhesion which es¬
tablishes the weight on drivers.
sary
that the use of light¬
both freight and pascontinued on page 2436)
It is expected
weight
cars,
Norwich &
question frequently asked is
much can we reduce the
of
be
the
can
as
must be based upon the
necessary tractive effort for the
work it is required to do, coupled
weight
motives;
Lighter and Stronger Materials
some
:
be gained?'
would
no
:
where it is necessary
industry.
may
Worcester
and what
our
■
.*
SEABOARD AIR LINE
request
;
Preferred Stock
Circular
on
request
Reorganization would mean higher values for every out¬
•'
.
.
-
standing Seaboard bond, with two exceptions. We believe
this reorganization should be effected in an equity pro¬
ceeding.
NEW YORK 5
TELETYPE. NY 1-1310
.
1. h. rothchild &
Members New York Stock Exchange
HANOVER
There
this type
CAP. 0425
Railroad
■
'
is nothing spectacular in
148 State St., Boston, Mass.
Tel.
opinion the proposed allocations suggested by the
Compromise Committee in the
Reorganization
WALL STREET
request
Teletype NY 1-897
to be considered and tested.
that
.
TEL.
the
clearing house
Mclaughlin, baird & reuss
ONE
on
New York 5, N. Y.
Wall Street
•
'•■■■■
Circular
free
sent
Incorporated
63
project
Profit Potentialities
,
been
called upon to undertake
research
In
:
has
matters
of railroad problems and as
emplified-
:
indus¬
sociation with regard to research.
120 Broadway
■
the
condition
In
to
through
in mind the limitations of the As¬
South Broad Street
Teletype
•
future,
within
Essentially it is
PHILADELPHIA
b
the
condition
a
railroad industry must act
unison, as it often does in prob¬
lems passing through the Associa¬
tion.
It is well, however, to bear
INCORPORATED
297
such
and
in
STROUD & CO.
Y.-Phila. Private
continue
the past,
entire
Stocks
Special
and
Guaranteed
N.
lagging, or tak¬
some situation
industry to the extent
research
corrected.
Mortgage Bonds
of
have in
we
correct
basic
Equipment Trust Certificates
are
where progress has become stag¬
shall
Railroad Securities
PH 296 and
railroads
and
we
ing
nated,.
123
the
of
demands
new
the alert. " We expect them to con¬
tinue in this frame of mind, but
if
'■■■-:
■
N. Y.—WHitehall 3-7253
Philadelphia—Rittenhouse 4488
.
San Francisco
R. R. Bonds
criticism; but it is necessary
tion inherent in free enterprise, •and will always be a part of the
have- kept the manufacturers on gigantic effort called the railroad
Philadelphia 2, Pa.
Bell
.
Spurs Improvements
improved products,
together with the keen competi¬
Quoted
—
1529 Walnut Street
*
for
BROTHERS
BUCKLEY
Members
on
'v
•
/:
BRILL CORPORATION
*
Appraisal of the
Frederic H. Hatch & Co.
HEATING AND LIGHTING CO.
.
5
and
their alleged
Cantley
YORK
"New"
General Income 4s, 1986
collectively, worked quietly
tirelessly to improve their
axle
investigation, now in its
initiative, it seems as though peo¬ equipment whenever it was pos¬
and
sixth .year. :, ;*
They have always
ideas are going to develop; new ple refuse to understand that the sible to do so.
"Scope
for
research
actually
in
applied
research,
transportation policies will emerge railroads have only one commod¬ engaged
covers
a
tremendous field.
So
to take care of changed needs and ity to sell—transportation.
It has which is the type of research best
mahy pieces of equipment are in¬
tastes;
new
alliances
will be been our custom to purchase on suited to the needs and facilities volved in the operation of a railof the railroad industry.
In this
fOad that there is an endless chain
field
we
investigate, test, arid
of problems arising, improvements
check products already in use, or
to be made/ changes in basic de¬
SAFETY CAR
new ones submitted for investiga¬
sign, new equipment and designs
tion.
■
tinuing. Out of
This,
WALL STREET
NEW
and
lack of research and
people say the rail¬
always, individually
some
roads
72
ST. LOUIS RAILWAY
Stock
In spite of
disregarded.
are
REORGANIZATION
available upon request
Teletype: NY 1-2050
prod¬
new
LINE
Van Tuyl & Abbe
be safe than sorry.-
to
"This does not
:-
AIR
COMPANY
STREET, NEW YORK 6
3-3450
MINNEAPOLIS &
they should try to understand that
the.industry in its entirety feels it
a
toward
directed
con¬
Sold
—
RAILWAY
but
ucts, new materials, or progressive
Unjust Criticism
pe¬
research
has been
by
that
Continuing, Mr. Cantley said:
this:
g
RECENT DEVELOPMENTS
Registered
&
on
fect
been
down
difficult
cargo
plant would have a beneficial ef¬
is better
on all associated industries.
>
prog¬
has
ress
d
of¬
Copies of circular describing
4s/88
:
.
foresees further re¬
duction in weight of rolling stock,
but warned against over-optimism
because of the operating problems
war," said Mr.
Cantley, asso¬
ciated
Bought
been, and always will be a brake
any * effoirts »to
bring about
quick, : radical, : or
spectacular
changes in railroad equipment, no
matter how great the popular ap¬
involved. /Nfr'Vi.V
'"' peal of such changes might be. In¬
ventors and the public sometimes
He advocated a central research
become impatient with our cau¬
and
testing
laboratory
owned,
go."
Toronto
in
bad
so
all is the safety of the passengers
Mr. Cantley
the
after
done
not
in which the first consideration of
formed; some of our old customs
fields to work
have
Coupon
spite of the handicaps inherent in
an-industry of such great size and
^
are
Gen.
Safety Is First Aim
"There is
1-395
Montreal
individual
materials and equipment.
meet
New York
Rock Island
keep us
developments in
new
HAnover 2-0980
Bell Teletype NY
Chicago,
needs of the railroads, to
abreast
WILLIAM! St., N. Y, 5
52
upon
,.
:
;:
V.
co.
120 broadway
COrtlandt 7-0136
n. y. c.
Adams & Peck
63 Wall
specialists in rails
5
Tele. NY 1-1293
Street, New York 5
BOwling Green 9-8120
Boston
Philadelphia
Tele. NY 1-724
Hartford
& FINANCIAL CHRONICLE
THE COMMERCIAL
2418
Missouri Brevities
Hearst Consol. Pub. "A"
Class
National
Common
A
Almost
City Public Service
Preferred
Electric
Portland
Power
6s 1950
'•
V
I
■
,
.
'
'
.of, the
Association of Securities Dealers. One organization;, can¬
and found a surprising uniformity of opinion.
without exception the dealers were resentful toward the;
.1
•
• •
;
|
Case Of Hughes Vs. SEC
NASD for having issued the ruling without polling
on such an im-f
Court Holds Dealer Committed Fraud In Mark-Up Case
portant and vital matter.
The' article by A. M. Sakolski in the
Dec. 9 issue of the "Commercial
—Cites Action Taken By NASD Business Conduct
NASD was further criticized for
and
Financial
Chronicle"
ex¬
not holding conventions at which
Committee Involving 10% Mark-Up ! And Illinois
pressed their sentiments in better
the members would have an op¬
words than they - could use. Most
Circuit Court Judgment Sustaining Revocations Of
portunity to discuss the problems
of those contacted seemed loath
confronting the association from
Dealer's
governors of the
the membership
Common
&
Opinion Of U. S.
Circuit Court Of Appeals In
among
its members
vassed
Kansas
Full Text Of
®
During recent weeks the principal topic of conversation
Missouri dealers has been the 5% Profit Limitation Ruling
St. Louis Public Service
Thursday,: December 16, 1943'
>
•
Fine Spinning
Berkshire
Preferred
&
Common
BOUGHT
SOLD
—
'
:
SCHERCK, UlCilTER
COMPANY
St. Louis 2,
L. D.
and particularly
outside of the larg¬
trading centers are opposed to
dealers
smaller
those located
Garfield 0225
SL 456
individual reason¬
Most of the
instance:
For
ing.
Mo.
Teletype
is
unanimous in this district, vary¬
Rule
Limitation
ing only in the
Landreth Bldg.,
the Profit
practically
to
opposition
The'
123
est
percentage of profit allowed
point out that in most cases
5% would not provide a fair re¬
muneration for the service ren¬
dered
nor
permit
profitable
the
and
We have
continuing interest in
a
Others point out that
differentiation
for
the
size of the order,
the
amount of work involved on the
individual transaction or the price
of
the
security being handled.
operation.
Central Coal & Coke Corp.
Dickey Clay Mfg. Co.
W. S.
Employers Keinsur. Corp.
Gleaner Harvester Corp.
Ore.-Amer. Lumber
Corp.
E. W. PRICE & CO.
Avenue
Baltimore
1004
CITY
KANSAS
Bell
MO.
6,
KC 375
Teletype
the rule makes no
expressed amazement that
NASD
calculated
the
5%
Some
the
against the dealer's cost and like^
wise against the bid side of the
market where a dealer had a posi¬
particularly since this pre¬
viously unheard of method'of cal¬
culation of a commission was not
tion,
stipulated in the NASD ruling.
Others pointed out that there was
no
such
thing
as
a
"riskless'
transaction and cited instances of
reneging
customers
Situation
Industry
Interesting
An
In
a
York
Growth
Corporation
COMMON
with
an
One chap
remarked on the op¬
posite activities of the right and
left
hands
of
the Government
with the comment
Analysis
request
on
'eltason, Tenenbauni, Inc.
603
Landreth
Bid?.
ST. LOUIS 2, MO.
L. D. 240
Teletype—SL 486
Markets in all
Fast and accurate
commit¬
on
dealer hooked
unexpected long position.
ments, leaving the
Members
New
York
Stock
Exchange and
Other1 Principal
503
Locust
Exchanges
Street
ST. LOUIS 1, MISSOURI
Tel. Central 0838
Teletype SL 84
joy
ready-made market. Some
has to
spend time and
a
dealer
delving into the company's
position and prospects or locating
a
buyer or seller. The character
of the'security is riot conducive
purchase for position or short-
to
selling by the dealer. Hence an
ultimate trade is usually the re¬
sult of
order against an option
an
and would appear on
if
But
"riskless" transaction.
the
profit
with the
and
sent
QjL.
SAINT LOUIS
509 OLIVE ST.
Bell
System
Teletype—SL 80
not
is
feeling of the local members and
conversation
among dealers in St. Louis was
the
action
of
Ely-Walker Dry
Goods
Company common stock
since its delisting from
the St.
Louis Stock Exchange. The last
Another
vember 10th was at 28.
have
the stock.
to The Financial
Chronicle)
under active
high since 1929.
This price would appear to more
truly reflect the earnings and
vanced
of
market
a
away
listing
on a
national securities
exchange except through the sale
of a large block of stock by an
underwriter.
Mr. Humphrey
previously was with the War De¬
partment Corps of Engineers Real
Estate Branch,
Washington, D. C.
bid
record
and
-
buying inquiries are
from
many
parts of the United States.
y.Demand among local investors
,
well,
greatest interest showing in
held
has
with
exceptionally
up
Gas
Associated
Respondent.
Before:
s
^
(Company,
Inc., to review an order
of the Securities and Exchange Commission revoking the petitioner's
registration as a broker, or dealer under the Securities Exchange Act
of 1934.
Order affirmed.
/VV "vy\< ',y
■'-''y/
Petition by Charles Hughes &
j'Vy":/;
DAVID V. CAHILL, of New York City (Murray R.
-Spies, of New York City, on the brief); for
/
'
petitioner.
'
•
'
Sol., Securities and
MILTON V. FREEMAN, Asst.
Commission, of Philadelphia, Pa.
(John F. Davis, Sol., Olga M. Steig, Asst.
Dir., Trading. and Exchange Division, Orrin
C. Knudsen* Counsel, Trading and Exchange
Exchange
to c ks;
coal
of
stocks
and
Order of the Securities and
an
.Exchange Commission.
Con¬
Hearst
Publications
solidated
bonds
Petition to Review
:
Service;
Public
Corporation;
"
.
*
,
AUGUSTUS N. HAND, CHASE, and CLARK,
Circuit Judges.
'
,
& Electric bonds;
Southwestern
York
Petitioner,
Net
high
Incidentally,
reported to
received
been
COMPANY, INC.,
y^y^yAyy.
SECURITIES AND EXCHANGE COMMISSION,
new
share) of this stock.
'
y
com¬
\
-
.
up;
could
this
underwriter
look
for
Any legis-
lation which tends to destroy
an
St./..Paul
amended
the
Under
the
industry is bound to have its
adverse effect upon
all other
sec¬
tions of that industry.
Several
ter
compromise plan approved by the
ICC, St. Paul generals,
4V2S, and
by Vilas
City, members of the
Exchange. Copies
York
New York Stock
of this memorandum and a circu¬
discussing the attractions of
& Pacific Railway Com¬
lar
Texas
on
was
Ref. 5s may be had from
& Hickey.
Also .available
request is a general discussion
of railroad trends in October.
are
dealers
stated that
(Special to The Financial Chronicle)
KANSAS
Scott
pany,
CITY;
has
been
Inc.,
added
Herrick
of Barrett
„
.
:
MO.—George
the
to
&
Com¬
Baltimore Ave.
1012
Kelly Joins Lamson Bros.
(Special
to
KANSAS
The
Financial
Chronicle)
Joseph
L. Kelly,; for many years with
Lamson Bros. & Co., has become
CITY,
MO.
—
affiliated With H. O. Peet & Com¬
pany,
o
<buy. ;// £ >; *dy;'Wy
j
d
1
*
bits of
Elects Schumann Asst. Sec.
elected
J.
R. Schumann has
assistant
York
City.
news
to chew on.
were
secretary of the
by
news^-or anticipate
it—before
any
further move
be looked
naturally
,
The
Te¬ V; I believe
the
more
and
more
of
this kind of news will occur:
But I don't believe
ket will start
the
mar¬
from
not far behind. From the ac¬ here. On the
contrary, from
tion of more than just a hand¬ the action of the
averages, I
ful of stocks it was obvious look for a little more
"up"
that the developments were followed
by more "down."
hot unfavorable.
The impli¬
Paraphrased into point move¬
to
•.
-
a
up
of these
i
;
are
# ''.
(-
#
stay at approximately that
Well, in the past two weeks level for the next few days.
have
seen
the averages hit This
low of 129 and
tion followed
carried
by
them
In the last few
of
right
conferences,
ments, I look for something
too far-reaching like the following; The indus¬
be gone into here.
trials (now at about 135) will
cations
however,
been
Henry Schroder Banking Cor¬
the market must now be fed
additional
piece, de resistance but ; the
developments at home were
we
n
^Cnroder .banking Corp.
George
;'W'
•yW; By WALTER WHYTE
23 West Tenth St.
l
move
U; During the past seven days in stock
prices can
the, market had a few choice for.
poration, 46 William Street, New
the
a
conferences at Cairo and
Joins Barrett-Herrick Co.
staff
weeks
anticipatory
Further
heran
T.
of the past two
an
strength anticipated based on the news which has
followed by reaction of about since become
public. It is not
three to four points. On such a reflection, as
many seem to
& Hickey, 49 Wall Street, set-back I think stocks,below
believe. Tf that is the case,
50-year 5s of .1975 offer
attractive situations according to
a
detailed
memorandum Issued
St. Paul
New
are. again coming to
The. fact of the mat¬
is, however, that the ad¬
vance
Milwaukee
& Northern Consolidated
again
the fore.
Interesting Rail vData
normal function of one section of
3615 Olive Street.
CHARLES HUGHES &
Quick Asset Value (over $46.00 a
have
/
,
Decided December 10, 1943.)
'■'Vrv/'i://
But to what dealers
with
Company,
351/2
a
dividend
Corporation officials. It
further prevent
the de¬
his secondary market?
Nordman
to
trading,
No. 154—October Term, 1943.
(Argued November 18, 1943
y
y.V-'Y.-''-v':-'
yy-y/y For the. Second Circuit
result it has ad¬
a
the
LOUIS, MO.—William R.
Humphrey has become connected
John
As
■■
/'
v
prepared
pany
velopment of a market sufficiently
broad to enable a growing cor¬
for
<Special
yyyy:.yy.^
dealers
Louis
St.
UNITED STATES CIRCUIT COURT OF APPEALS
.
,,y;\
descriptions and
advertised a sponsorship of
have
Vilas
poration to meet the requirements
ST.
several
time
be
can
lingness of a legitimate dealer to
develop a market for a security
would defeat the purposes of the
Securities
Act
by robbing
the
would
With John Nordman Co.
of
topic
prior to the /delisting on No¬
Since that
sale
proportion to the sum of these 3
items, dealers will refuse to han¬
dle securities of this type. Unwil¬
from
Louis Stock Exchange
it on to the Board of Gover¬
of the National Association.
pass
nors
commensurate
which
time, effort and money
if it fdoes not vary in
stockholder
Members St.
the dealer's
as a
obtained
k
to
10
Dec.
panies like Peabody, Old Ben and
Chicago, Wilmington & Fraklin
Division, and Irving J. Galpeer, Aaron Levy,
and St. Louis, Chicago and Kan¬
olies while the Securities and Ex¬
sas City tractions.
Other favorite Lyyy.--.y/-.y-and' Alfred Hill, Attys., Securities and Exchange Commission was abetting stocks have been Missouri-Kansas ?y;//y^r?lyy.yUyy'-y;
change Commission, all of Philadelphia, Pa.,
and encouraging the practises of
."V"-"'
Pipe* Line, '• Panhandle* Eastern ^yy-y^fv^^y^.N^yy/'y on the brief), for respondent. .
monopolies, especially in forcing Pipe Line, Boston & Albany
R|L
a
dealer to belong to the NASD and Marathon
W;-:A .
Paper Mills. There CLARK, Circuit Judge: '
in order to obtain a participation
has likewise been a good demand
This is a petition, pursuant to §25 (a) of the Securities Exchange
in new underwritings and again
for many high grade and several Act of
1934, 15 U. S. C. A. §78y (a), to review an order of the Securi¬
through assent to the NASD's non- discount preferred stocks.
Some ty
V/y'f'-^'rV;'.V-T (Continued on page 2428)'
?//;///
flexible Profit Limitation rule.
salesmen have noted that custom-,
Some of the
deeper thinking ers they haven't been able to see
has revived and,the opinions
individuals expressed fear of the have been showing up voluntarily,
that the market is now going
consequences to the industry in with funds for investment.
records
Stjx,
NASD
the
below in its entirety the decision handed down on
by the U. S. Circuit Court of Appeals, wherein the Court
upheld the action of the Securities and Exchange Commission in
revoking the registration statement of Charles Hughes & Co., Inc.;
as a
broker or dealer under the Securities Exchange Act of 1934.
give
that the Attor¬
money
G. H. Walker & Co.
local direc¬
learn the
other way for the
no
tors. of
bond, particularly the obligation
of a small company, does not en¬
York and Providence Offices
a
We
General's office was actively
engaged in breaking up monop¬
SECURITIES
New
be
general. They mention that the
little known, closely held stock or
to
reprisal. This attitude seems,
mistake because there is
fear of
to
Governors for
of
Board
National
ney
ST. LOUIS
Direct Private Wire
Registration In 25 % Mark-Up Case.
write their local NASD or the
to
time to time.
ontimism.
a
to
a
high frac¬
rally which
across
followed
be
but
about
136-137.
rapid
by
advance
a
to
At that level
135. it is logical for bullishness to
a
feeling
alwavs
latent.
days
will
short
increase.
It
(Continued
always does
on page
2441)
on
2419
WE OFFER A SERVICE
'
It
Connecticut Securities
'
—whether
included in
now
an
investment portfolio
We
*
AND SELL
period of 37
a
FIRST
offerings
small blocks
or
of
Real Estate Securities
CERTIFICATES
:
Telephones: 5-0151
New York, CAnal 6-1255
PUTNAM & CO.
'
,
Members New York Stock Exchange
6 Central Row
interested in
are
large
MORTGAGE
years.
are invited from banks, institutions
and individual investors.
Inquiries
v
of
contemplated
or
purchase. This service, consisting of primary market quotations
and statistical information, is based upon records and experience
for
covering
OFFERINGS WANTED
WE BUY
available to all those interested in
is
1
•
s''
•
'
v-
'
Seligman, Lubetkin & Co.
ISSUED BY
'
Incorporated
'
Members New
Bell Teletype
Title Guarantee & Trust Co.
41
HF 564
Hartford 4
Broad Street,
York Security Dealers Association
New York 4
HAnover 2-2100
Lawyers Mortgage Co.
Lawyers Title & Guaranty Co.
Connecticut Brevities
Little interest
N. Y. Title &
Mortgage Co.
and other Title Companies
displayed in the Connecticut municipal mar¬
was
Demand For Office Space In New York City
ket
during the past month. There was a. general decline in prices,'
although an issue of $195,000 Water System Bonds of the Town of
Portland sold on Dec. 10 brought 100.81258 and accrued interest for
The bonds, dated
1.40s.
Dec. 15, 1943, and due $10,000 each Dec. 15,
a
In the short-term category
Members New York
will
Waterbury
of
Hartford
WJhile official figures have not
yet been released, it is expected
that there will be a reduction
some
have
to
essary
It is reported that the
'
the tax rate.
"
*
l:'y y.'!
'/ «S
New
for
net income available for
Vy
over a year ago.
.
^
%
'y/'.- ■>'
directors
Aircraft
dismissal of
Yale
Wilson, for¬
merly President^ was appointed
Vice-Chairman of the corporation.
Baycroft Walsh, previously Sen¬
ior Vice-President, has been made
Eugene E.
'
a
Vice-Chairman.
President
turing
&
•
..
2,500 workers.
*
Towne
Manufacturing
Former
Vice-
charge of manufac¬
in
General: Manager of
Aircraft Di¬
and
the Pratt & Whitney
vision, H. Mansfield Horner, has
been elected President to
succeed
With the payment
total of
W.
E.
minion Securities
Cassels, Coch¬
Murray & Co., Ltd.; T. H.
Baker, A. M. Ramsay & Company;
S. Cox, J. R.
Meggeson & Co., Ltd.;
R.\ A;. Webster, Royal Bank :'1 of
Canada; L. L. Bell, James Rich¬
&
Sons; R. P. Howard,
Gairdner & Company, Ltd.
§
Clark Electronics
F.
Reilly & Co.
issue
new
a
of
following
Life
Aetna
offering
shares of
are
33,333
ucts
in the
general field of radio
;
V
and aviation;
Aetna
Jan. 3; Automobile Insur¬
ance 400, on Jan. 3; and Phoe¬
nix
Insurance
$1 a share on
Jan. 3. Extra payments sched¬
Situation Interesting
on
A. W. Benkert & Company,
70
which
shows
12%
a
$3,608,755, over 1942.
shows
that taxes
;
increase, or
The report
will total $26,-
303,216—an increase of $4,048,040
over
a year
than that
Inc.,
Street, New York City,
have prepared an analysis of the
Colt's
a
current'
ago.
Patent
ufacturing: C
shows
tric
paid in 1942.
lower
year.
Fire
Arms
ompany
dividend
The
Man¬
likewise
for
the
payment; of
Company's dividend payment
is off 250 from a year ago. After
a
final
payment of $1.25, this
year's .total will be $2.75 a share
against $3 paid the previous year.
,
Markets for Dealers in:
SCOVILL MFG.
recent
;
Russell Mfg. Co.
Landers
Seovill Mfg. Co.
-
Conn. Lt. & Pr.
Torrington Co.
the
.•
66
N; Y. Stock Exchange
for 52 Years
St.,
Boston
Hartford
1,
Conn.
New York Phone
HAnover 2-5337
7-3261
In Connecticut
,
Pearl
Hartford Phone
Waterbury
Members
.
con¬
for
outstanding
ac¬
bonds
policy will be reflected in
Many office building securities
the investigation of those
looking for attractive
yields and appreciation possibil¬
to be a logical ities due to the
greatly changed
increased
net rental situation in New York City.
merit
have
investors
will now
effecting increases on a
larger ratio of renewals.
It
in
would
seem
that
available income from the opera¬
tion of a property must have a
favorable
effect
out¬
the
upon
standing first mortgage securities
.
which it
secures.
In many of the
provi¬
reorganization indentures,
sion is made for fixed
interest
up
to
a
income
or
certain
V
TRADING
REAL ESTATE
SECURITIES
terest distribution
being used, as a
sinking fund for purchase and re¬
The
difference
crease
is
in
rental
that
a
rates
10%
SHASKAN & CO.
in¬
mean
can
Members New York Stock Exchange
Members New York Curb Exchange 1
easily reflected in the follow¬
ing
example of a
been making
distribution
4%
a
funded
on
DEgby 4-4950
NY 1-953
Many utility holding companies
completed the groundwork
compliance with the Holding
Company Act; and, as their plans
approach consummation, a larger
have
for
Hyde, Jr., public
for Josephthal &
.
analyst
Bell Teletype
Utilities On Auction Block
Operating Gor Stocks
W. ■ Truslow
V
and
debt
Hyde Reviews Profit
utility
40 EXCHANGE PL.f N .Y.
that
interest
property
,
has
IN
MARKETS
percen¬
tage,; providing for surplus earn¬
ings above the determined in¬
number
pany
of
stocks
new
will
operating
com¬
onto
come
the
market,
Josephthal & Co., de¬
Co., addressed the Boston Secur¬
ities Traders Association last Wed¬ clares. The profit possibilities for
nesday. He pointed out the profit dealers presented by these ap¬
possibilities
for
investors
and proaching developments are dis¬
dealers which will be presented" cussed in a booklet, "Utilities oil
in increasing volume as the stocks the Auction
Block," which the
of
Copies may
operating
companies,
now firm has just issued.
be obtained upon
request from
Josephthal & Co., 120 Broadway,
the market as unknown and un¬ New York City, members of the
seasoned, but sound investment New York Stock Exchange and
equities.
Reviewing the market other exchanges.
locked
ing
in
the
portfolios of hold¬
companies,
record
of
stocks
brought onto
such
as
South¬
Service, Houston
Philadelphia' Electric,
Lighting,
Puget
Sound
and
are
Public
western
Power
&
that, whether the mew is¬
reached the market through
underwritings, exchanges
capitalizations, the initial
of
Light
Idaho Power, Mr. Hyde con¬
new
or
re¬
prices
Seovill Mfg. Interesting
Charles W. Scranton & Co., 209
Church Street, New Haven, Conn.,
members of the New York Stock
Exchange, have issued
date
appraisal
an
of Seovill
up-to-
Manu¬
operating company stocks
facturing Co.'s current and post¬
probably reflect investor
war
outlook.
Copies of this inas to their value in re¬
lation to
Coburn & Middlebrook
New Haven
London
and in
should be the result.
of this
years,
confusion
Chas. W. Scranton & Co.
.
for
favorable market
tion
would
New
about 3%
a
New Britain Mach.
Am. Hardware
up-to-date appraisal of this company's' current
and post-war outlook. sent on -request,
v
available
cash
fund
sequence
sues
An
increased ren¬
on
more
most proper¬
ties have operatejd on the basis of
-
cluded
Aetna Life
about
amount to
In
point
that
and
stabilized
become
from this
Pine
Trustees of the New
Illinois
Central
Railroad
Com¬
uled
on
industrial
stocks
in¬
York, New Haven & Hartford
pany. - Copies of this interesting
clude: New Britain Machine 500
Railroad; it is expected that the
study may be had from the firm
payable Dec. 18, and American
road
will
produce the largest
upon request.
Hardware, 250 on Dec. 18.
gross in its history—$179,604,388.
A year end payment of 750 on
This figure shows an increase of
$23,464,195 over, last year. After all North & Judd Company, stock $1.25 on Dec. 18, makes a total
of $3.50 against $5 paid in 1942.
expenses and taxes, net income brings the total dividend for the
Arrow-Hart & Hegeman Elec¬
will
probably
be
$33,621,599 year to $2.50, which is ; 500 less
Court by the
produce
rates,
and with the
10% increase
benefit of the property.
general belief that they
Possibilities Of
200 on
Casualty,
Insurance,
1944;
3,
payments:
extra
a
tal rates would be reflected to the
have
;
arrears
in the insurance field show the
in
occupancy
$50,000
sinking
operations. In relation to the
outstanding
mortgage
this
in¬
creased
sinking
fund
would
it is the
tirement of bonds.,
Shares Offered
J.
advantage of only
conclusion
ran
ardson
100% rented should, with the in¬
creased
Do¬
Parker,
Corp., Ltd.
Committee: D. K.
there
York,
small sinking fund op¬
though the property
has been only about 87% occu¬
pied. This property now close to
the opportunity owners
Wight-
Jan.
$1
According to estimated figures
for 1943 submitted to the Federal
a
M.
to Oct. 1; 1943.
As common stock of the Clark Elec¬
3, 1944, total arrearages tronics & Aviation Corp. at $3.00
per share will be 75c.
per share.
The stock is of $1.00
par value.
The corporation pro¬
duces commercially various prod¬
Recent dividend declarations
dend
of
Jan.
Eugene E. Wilson.
of
$2.25 a share on Dec. 31, Green¬
wich Water System 6% preferred
stock will have cleared up divi¬
■
.
L.
Fairclough & Company.
Secretary:
.
New
ating costs have risen since 1942,
"
man,
even
short term leases and the wisdom
ing, Rose & Co., Ltd.
'V
*
Company, in addition to turning
out its regular line of products
which are/used in the war effort,
is now producing special items in¬
cluding pumps for airplane en¬
gines, superchargers, cylinders for
hydraulic control of airplanes and
miscellaneous airplane parts.
J - •.
has given
officers.
some
*
y
effect to the pro¬
motion of three of its principal
tion
It is esti¬
1944.
a
eration
While it has been true that oper¬
George Rose, Gould-
Vice-President:
A
tenants.,
mid-town
having
from
little space available and
it is decidedly an owners' market.
1943-1944 year:
President:
mated that this will result in the
Corpora-
United
the
>'i.'
#
* sjt
action of the
Recent
ginning Jan. 1,
dividends
$2,303,538 against $2,579,022, or
$5.76 compared with $6.45 a year
ago on a per share basis,
Total
telephone revenue for the month
of October showed an increase of
<of
10.6%
ington Arms Company to curtail
its small arms production 30% be¬
of the year,
ten months
first
England
reports
Company
Telephone
the
v
Southern
The
War Pro¬
duction Board has directed Rem¬
larger
secured
be
is very
ONT., CANADA—
At the Annual Meeting of the To¬
ronto Bond Traders Association,,
held at the King Edward Hotel on
Nov. 25 last, the following Execu¬
tive Committee was elected, for
the
in'
increase
an
IIF 365
Bell System Teletype:
effected in the
be
can
budget for 1944, it may be nec¬
of
1
BOwling Green 9-2211
$5,000,000 to $6,000,000
list of the City of
Hartford.
Unless
substantial
;
New York:
.
in the grand
savings
new
TORONTO,
7-3191
could
increase
Elect New Officers
Connecticut Securities
made of several buildings and discussion with various
A survey
that in many cases an even
4, N. Y.
Toronto Bond Traders
Hartford and
1943, and due May 1, 1944.
,
New York
Telephone: DIgby 4-6886
Curb
Primary Markets in
security owners, have im¬
managing agents reveals the fact that on renewals tenants were being
asked from 10% to 20% more and'®'
•
In
$150,000 notes dated Dec. 22,
of
New York
BROADWAY
32
Exchange
Darien will likewise seek bidders
for
LANICE & CO.
Boston Stock
and
Associate Members
standpoint, which in. turn
of real estate
the benefit
to
proved greatly in the last year, to a point where many .properties
close to 100% rented.
Exchanges
receive
bids for $700,000 notes to be dated
Dec. 28, 1943, and mature Feb. 5,
1944.
On Dec. 20, the Town of
City
react
are
Tll IT BltOTllKKS
On Dec. 16, the
Notes scheduled.
•'
must
there
two sales of Tax Anticipation
are
conditions, from an owner's
Rental
to
1.50% basis.
a
Offering List
request
on
1962, inclusive, and $5,000 on Dec. 15, 1963, were reoffered
scale ranging from a .50% to®
;—
1944
on
Rental Rates Being Increased
15
December
Phone—Enterprise 1850
'
Bell
Teletype HP 464
t
more
teresting
seasoned issues,
circular "
may
be
ob¬
As
plans for compliance with tained from Charles W. Scranton
the integration provisions of the
i& Co. upon request.
Holding Company Act progress,
he said,
dealers will have
an
in¬
creasing number of relatively un¬
dervalued
stocks
to
offer
customers, while investors will be
afforded
opportunities to acquire
their sound equities at "auction
prices."
With Mercier-McDowell
.
~
MICH.—Charles II.
has become associated
DETROIT,
Forsberg
We
Dolpliyn, Buhl Buiding. Mr. Forsberg
was formerly with C. G. McDon¬
with
5% Preferred
&
ald
McDowell
Mercier,
and
Co.
&
Have
DE
Trading Markets in
189
»
NU ENAMEL
4
PALACE CORPORATION
SUPERIOR TOOL & DIE CO.
Humphries, Ang¬
MILLER TOOL & MFG. CO.
Co.
&
strom
Tele.
Cadillac 3670
(Special tt> The Financial Chronicle)
CINCINNATI GAS 6- ELECTRIC
Thursday, December 16, 1943
FINANCIAL CHRONICLE
THE COMMERCIAL &
2420
Bought—-Sold—Quoted
COMMERCIAL
SHEARING
STAMPING CO.
&
Joins Allman-Moreland
to The Financial
(Special
Paine, Webber, Jackson & Curtis
ESTABLISHED 1879
obscot Building.
Utility Securities
the SEC a new
plan lor refunding the bonds and preferred stock of its subsidiary,
Florida Power & Light, and readjusting its security holdings in the
The
subsidiary.
plan
stock
since
already
it
bookkeeping,
had the entire
par
(mere
was
and purchases lagged; later it
allowed to raise the price to
SEC has been gento purchases above
on the theory that bond iswill be retired at 100 in dis-
equity) in exchange for cancella- J, 106. Since the
lion of its holdings of bonds and j erally opposed
preferred stocks aggregating
$26,- par,
347,700 face value.
With the cash received
sues
solution, the increase to 106 was
explained in a rather novel way:
the six points were to reimburse
holders for loss of a full year's
from the
sale of new bonds and notes
(to¬
gether with cash on hand) Flor¬
ida will call for redemption $52,-
000,000 of 5% bonds and $14,652,300 face value $7 preferred. The
plan does not specify coupon rates
on
the new issues, but assuming
that the
mortgage bonds are
new
3%s, the serial notes 3s, and the.
debentures 5s, the aggregate saving in interest and dividends from
refunding and subordination
the
approximate
$3,000,000.
such additional earn¬
ings, combined with other factors,
might push the company into the
excess
profits tax bracket—al¬
though
loss
on
call premiums
should go far
toward reducing
such a tax in 1944. Because of the
should
However,
difficulty in appraising taxes, es¬
timated net savings from
the plan
might vary between $600,000 and
$1,800,000.
•
It
has
clearly
been
never
un¬
I
year,
next
accept
complete
subordi¬
It appears unlikely that a
would
plans.
submitted
be
there
was
(together with some notes
from which the
company should be able to realize
sufficient cash to complete the re¬
and
advances)
purchase
which
approval.
The
SEC
also
to
has
enlist
before
SEC
it
a
10%
of which Electric
$6 preferred stocks and
Bond and Share holds 31%
has
5%
some
of the $5
bonds
this
While
the
estimate
$7,000,000
in¬
debentures
received from Florida, it is
possible that these might not prove
should the SEC require
(it also
preferred and
subsidiaries).
of
-
Seaboard Reorganzaion
the
Situation Of Interest
Van
Tuyl
\
in ..respect to the
Seaboard Air Line Railway Com¬
developments
Copies', of
reorganization.,
,
interesting circular may; be
had from Van Tuyl & Abbe upon
this
request.
i
•:
Michigan
Seven
'
firms were
rolls of j
membership
to
Investment Banking Asso¬
of America this month,
(the
the
in
lost
i ; They are:
months'
10
of
turned
be
Detroit
Hotel.,,
Leland
'
••
William H.
Duff
of
ities
<
&
Their
and
Place
vestment .Field."
Attendance
•
Dowell
Bank
National
and William
Dolphyn;
&
Detroit
of
the
In
In-
■;
was
very
satisfac¬
tory, Robert R. Stoettzer of Stoettzer
& Carr, who was in charge
of
the
reservations, announced
following the meeting.
%
Detroit Trust Co.; Mercier, Mc¬
subsidiaries
to Amer¬
*
Bank,
Commonwealth
troit;
$2,700,000 were largely readjusted.
the' stocks
Baker, Simonds &
Bankers Trust Co. of De¬
Co.;
statement, since in October, '1942,
excess tax accruals amounting to
If
Michigan h61d
Duff, senior partner
Phelps of Chicago,
Corporation last week. V •; ^ r Cwv; utility consultants, addressed the
jj^V group on.*-"Public Utility Secur¬
ciation
will ; be
1/. at V the
Dec;-
of
added
--
—-
Traders Associa¬
irs annual winter dinner party on
McLucas, already a direc¬
a number of corporations
including
Chesapeake
& * Ohio
Railroad and American Airlines,
was
named a director of Bendix
Mr.
:
tor
Street, New York City, have is¬
sued a circular, describing recent
pany
Security
tion of Detroit and
72 :Wall
Abbe,
&
The
country.
'
On
note
sad
a
was
the revela¬
Edwin G. Hoover, chair¬
o£ th banking division of the
tion by
over
income
lar
tax
(the regu¬
still
gauge
to
other fac¬
difficult
it
make
which
tors
numerous
are
a
liquidating value with any
degree of accuracy—prospective
plant write-offs and possible rate
reductions for several important
cents
'
•,/
..
:"/■; .;
13
structure
from
important
are
consummated.
is
It
difficult
a
,
matter
to
.
esti¬
liquidating1 values of holding
company securities because of the
tremendous importance of taxes,
and Congressional tax policy can¬
not
be
successfully
forecast.
mate
certain subsidiaries,
Recent estimates of potential
etc.
of
rent
50
(a few points over
market price)
other
For the 12 months ended
return.
30
consolidated
earnings
equal to $10.27 on the pre¬
American is in process of retiring
its
own
debenture
bond
issues
Sept.
($44,933,000 at the end of last
year), and has been granted SEC
permission to use about $10000,-
ferred
were
$3.83
stock
before it may
range
the
bids
National
1%%,
help to narrow the
Bank
of these estimates.
of
Private Wires
Randolph 5625
To All Markets
Vk%.
Security
Creek,
Battle
Bank,
and
the
were
Telephone
Central National
the
National Stamping Co.
Creek, 2%.
Battle
"
Common
Latest Information
NOTICE TO DEALERS
Many utility holding companies have
on
completed the ground- r.
& Dolphyn
Members Detroit
Buhl Bldg.
The
\
our: bookletf^fr V ?)-.
profit possibilities Jor Dealers presented by
proaching developments are discussed in
Request
Mercier, McDowell
Act; and,
as their plans approach consummation, a large number of new
operating company: stocks will, come onto the market. v z v ,
compliance with the Holding Company
work for
compared with only
corresponding pre¬
vious period.
Some of this gain
in
Other
DETROIT 26, MICH.
Battle
of
City
the
of
The successful bid was
cur¬
Future
to 80.
639 Penobscot Building
$100,000 worth of tax
notes of the school
Creek, offered last month.
SEC action on the two plans now
large holding com¬
panies, have skyrocketed this year
due largely to the privilege of re¬
turning a consolidated system tax
district
ranged
have
value
liquidating
American's earnings, like those of
several
capital
poor
SECURITIES
Michigan National Bank of Bat¬
successful bid¬
anticipation
the
Stock Exchange
INVESTMENT
<<y-;
tle Creek was the
der for the
factor),
Members of Detroit
the United Savings Bank for
a share, payable Dec. 20
to stock of record Dec. 10.
50
market
subordination.
Thus,
stockholdings in its
Charles A. Parcells & Co.
by
to
American's
complete
amount¬
share, payable Dec. 3
stock of record Nov. 15, and
ing to $2
apply to such income).,
There
.
.
,
National Bank of Detroit
would
rate
,
subsidiaries, questions of public
ownership (always an important
necessary
preferred stocks, if present plans
recapitalization plan of American
Power & Light to give 90% of
new common stock issue to the $5
and
redemption of its own
of fa¬
failed
to the common,
to be
or
the SEC
holding companies
have submitted many plans in the
largest such credit ever arranged, according to an announcement by
Walter S. McLucas, chairman of the National Bank of Detroit.
The credit was said to have been subscribed to the extent of
■
$400,000,000 by banks throughout——- —?——-———
bonds
unless
the
.
.■
assurance
some
past
considered likely to
time
this
at
vorable consideration by
—though
was
subsidiaries might
eventually be available (to the
extent of 90%) for holders of the
revised version of the plan
;
.
'
cludes
to
•
man
be
Accordingly, the
effected).
Honey & Co.
" v'V"0;\
ican's stockholders, these compa¬
y'Vy *
' #
:
.::'V War Finance Committee, that his
amount of interest would decline
nies would lose the tax advantage
Charles G. Oakman, City Con¬ only son, Gordon Phillips Hoover,
as the period of time was reduced
and American announced that the gained this year,' since they could troller of Detroit, accepted offers Lt. j. g., is missing in action in
no longer file
a consolidated re¬
the South Pacific while on sub¬
price would drop Vs ,of a point
ings of City of Detroit non-call.'.-y,•• y;:;
each week.
Regardless of SEC turn, and thus some part of the able bonds to the extent of marine •duty.'/'.VV;'.;
Ed Hoover, one time First of
reasoning, this
proved a good 1943 increase in earnings is ficti¬
$238,000 last month for the De¬
tious so far as liquidating value
"bait" so far as investor's psychol¬
Michigan Corporation executive,
troit City sinking fund —street
is concerned. On the other hand,
held a similar commission in the
ogy was copcernbd, and bond sales
railway division. No bonds ma¬
companies
pay
excess
last war.
immediately increased as holders several
turing beyond May 1, 1949, were
visualized
a
steadily declining profits taxes and it is generally
(Continued on page 2437)
'accepted.
: l:
market.
hoped that these, taxes may be
'..y y
:
r.
•
'
sit
yVsjt.
•'-•
.■
American Power & Light has a repealed
by Congress after the
In the dividend news were dec¬
portfolio of saleable subsidiary war, resulting in a saving of at larations
by the Manufacturers
least half the amount
bonds.
ing
& Co.
ham
should
plan failed
nation, but possibly Pearl Harbor
interfered
with
the
refunding
the date when dis¬
solution
materialize, since the company
at that time was apparently will¬
derstood why the 1941
to
1 this year to Sept.
interest (Sept.
,
previously with Baker,
Simonds & Co. and Palmer, Ever-
Reuter was
deal from that of
does not differ a great
September, 1941, except that a slightly larger amount of bonds will
be issued, in lieu of bonds and preferred.
Moreover,' American
will receive $7,000,000 debentures^
which it can sell at some future 000 cash for open market pur¬
chases. At first the company was
date, whereas in the first plan it
only allowed to pay as high as
was to receive nothing but addi¬
tional
Buhl Building. Mr.
& Beane,
i
&250,000,000 VT credit arranged for Chrysler Corporation
through the National Bank of Detroit and the Central Hanover Bank
and Trust Company is now operative and -constitutes the second
The
Lynch, Pierce, Fen-
Merrill
with
ner
,
Troster, Currie
Michigan Brevities
A.
associated
become
has
Rogers & Tracy, Chicago and
Summers, New York
to
Merrill-Lynch
DETROIT,MICH.—George
Reuter
Light Has New Florida
Refunding Plan
Light has just presented to
BUHL BUILDING, DETROIT
i
wires
Private
(Special to The Financial Chronicle)
American Power &
American Power &
;
:
.
Reuter With
Public
Baleen Simonds &Go.
Chronicle)
MICH. —Gladys I.
Wade has been added to the staff
of Allinan, Moreland & Co., Pen¬
DETROIT,
these ap-
'
:
;
Stock Exchange
Cadillac 5752
DETROIT 26
.
"UTILITIES ON THE AUCTION BLOCK"
Carolina Power & Light Company
;V:
COMMON STOCK
ba
"
'
Copy oh Request
ftjoUtlatf (Gvcctings
'. '
•
:
y/y
•
TO ALL OUR
(W hen Issued)
Analysis
120
Bear, Stearns
*
CHICAGO
I
,
New York 5
Broadway
Telephone REctor 2-5000
\
r.
Co.
Members New York Stock Exchanse
NEW YORK
FRIENDS
I'--?.
request
on
Members
v
19
,
■
..
Congress
Boston
•
.
Street
New
and other exchanges
,
4
York Stock Exchange
;
i
Allman, Moreland & Co.
,
Member
'
f
>
,
...
.»
Detroit Stock Exchange
Penobscot Building
1051
DETROIT 26, MICH.
189 Montague Street
.
Brooklyn^
Battle
Teletype DE
Creek
73
Lansing
Volume
2421
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4238
158
ADVERTISEMENT
then,-the Board of Governors should either rescind their order
resign.^;
Hughes Decision Stuns Dealers
"
'
.
(Continued from page 2415)
he could to have this ruling done away
with, if the order is as unfair
contact him direct
and
'
that you have
99% of the dealers haven't got the guts to endorse
that amazes me is, in all the comments
One thing
in
paper
your
they write. 'Any industry or institution th&t is so spineless
because of fear of reprisals doesn't deserve,: in my opinion, better
treatment.
I realize, of course, that SEC can put anybody out of
What
make
can
or
a
In sincere
appreciation for
-Vv:";
i
Respectfully
-!V
.
•/
y.-'
•
"
>
put
$5,000
:
Pertinent to
•
dealer no..89>//
of small dealer in NASD:
status
: '
"Homer, in the Tlliad,' Book 1—(800-900 B.C.).
;
Calchos said: "A plain man cannot stand against the anger of
who, if he swallow his displeasure now,/,will yet nurse
revenge till he has wreaked it."—A Small Dealer in Midwest.
dealer
We
in his
in
believe
the
A.
White & Co.), Cincinnati,
in your paper Dec. 2, 1943, really started something
hope that other firms with wealth and influence will do
thing as the more than seventy-two letters that we read
various
issues
afraid to sign
were
White of J.
A.
on
of
their
"The
Commercial
names to
&
as
Financial
'/
y;.;,.
/; y
'//'y". //
disclosed and
/ ■
As a practical matter, all my transactions are on a
mutually acceptable basis with my clientele, and presumably as
Oil to run a destroyer a m ill-ion m iles;
\
for anti-tank
keep
Ten thousand
my
humble opinion,
only the
not
such
to
you
for the fight
dealers and brokers
once
a
small
unlisted
parachutes;
A hundred thousand fragmentation
bombs;
a
first step toward extension to other businesses.
scheme is nothing more nor less than the twin
—
.
A million tents;
fact, it is then only another
even those who are
additon, this would only be the
In
even.
}
A million steel helmets;
securities
A million
step to reduce it and continue to reduce it until
left will do well to break
trailers;
A million bombardier kits;
you are putting up in their behalf.
I .say all
because, just as sure as the sun rises and sets,
5% profit limitation becomes
motor
Five hundred bombers;
dealer no. 96
,
.
Ten thousand radio receiver sets;
our
'
-
of ammunition \
'
"
guns;
Ten thousand pursuit planes;
Ten thousand reconnaissance cars;
the wrath
,
field telephones','
A million entrenching
shovels;
A million First Aid kits.
,
V
,
;This profit limitation
Of course,
brother to the salary
not affected
am
Food for amillio) i soldiers forayear;
you
Like Dealer No. 82, we are not strong enough to incur
or the NASD and,
therefore/request that you
it
buy—ALL of the following:
A million rounds
of the SEC
Two Hun¬
spend for the
necessities of modern warfare,
would
Chronicle"
by this latest edict of our All-Highest and his satel¬ limitation scheme. In other words, the insidious thing about this
business of profit limitation is not the amount of limitation/ but,
lites; however, the thought is repugnant to any decent American,
LIMITATION ITSELF.; y v.'
//yv.;
.•../
and is evidence of the creeping destruction of things American which
Some of the letters you have received and published would indi¬
has been so conspicuous since 1933.
*
cate that their authors did not believe the NASD was actually limit¬
I was once a member of the NASD, solely for the reason that its
chief ballyhoo artist upon its formation specifically replied to my ing profit to 5%. Your article on pages 207 and 208 of the December
I
If you had One Billion
dred Million Dollars to
their letters lest the NASD power
anonymous.
CORP.,
real Figures
could start something in this respect,
would be glad to contribute.
we
hope
NEW YORK
their necks.
previously mentioned, if
we
dealer would
do
same
In
campaign to discourage the bureaucratic experi¬
of limiting profits of brokers, as inspired by the rather dis¬
ment
a
article which
SCHENLEY DISTILLERS
tried
dealers, but all dealers and brokers in the industry should be grateful
your
credited NASD/
Mr. J.
NASD
clientele, I am in full
small-town broker, having a limited
sympathy with
appear an
an
article
we
business.
91
no.
it ill
will be of :nterest to our fellow Americans.
This is number eleven of a series.
A million
why employees who have been elected to an
post should tell us employers how to run our
a
two years ago
there
90
dealer no.
As
and all.
once
to insure the investing public in the event
was
name
see
and
public—that would really be protection. We are wondering how
many lawyers could put $5,000 cash in the bank or any other pro¬
fessional man handling money.
1
being
I don't
1
■,
;
We note that dealer No. 80 stands ready to make an initial con¬
tribution of $50.00 toward the organization of any association, and,
,
;;
a
,
necessary
abscond with his customer's money. Why didn't these braintrusters
think of a surety bond if they really wanted to protect poor investing
the
'
over
boys would be
;
y
this matter to the courts if
carry
NOTE- From time to time, in this space,
amendment to the by-laws that dealers must have
$5,000 cash in the bank over and above their fixed assets and this
to
and
JOHN W. YEAMAN.
v;Y. •'
•"/-.■
y •
Martinsville, Va., Dec. 8, 1943.
security
/■■' !.
yours,
:
.*
No doubt you recall that the NASD about
<
,
efforts on behalf of the
your
dealers, I am /.
■V^
Most of
what of it?
tomorrow if they wish—but
living doing something else,
business today
us
1
We would be willing to contribute to a fund that would employ
good law firm to
end this thing for
a
/
.it appears on the surface. If you wish you may
I believe you will find him cooperative.
as
'• •;/'•*;
y
or
if you
running the
were
you
would need all of the above,
and you
would also need the instru¬
war
mentality for raising this amount of
.
question from the floor that only if I joined this parasite organization
could I continue to trade with member dealers. " When I found I had
been taken for a ride I immediately sent in my resignation, as a
good standing, and resolved that I could find better use
for the annual dues than to conitnue feeding and maintaining the
member in
personnel of this outfit who "toil not neither do they spin"
while some of us are still willing to believe that we should render
smug
public for our services rendered, without being burdened
lot of useless barnacles. If anyone can offer any intelligent
value to the
with
a
justification for the.continued existence of this decadent
.outfit striving to justify its existence with its membership but a
small fraction of the brokers in this country, I am keeping an open
mind available to listen to such allegation of its value to the broker¬
person any
or to the general public.
It does not take a student of history to
fraternity
age
,
v
justify the assertion that
patriots in 1775-1776 fought to free themselves from much less
in the way of burdensome taxes, bureaucratic offensiveness, etc., etc.,
than has been patiently accepted by the decent citizens in this Natiop
the
during the past decade; if we do not return to
principles of free
enterprise and the discarding of the myriad of parasites who have
fastened themselves upon the Ship of State during the past decade
during the coming elections, it is difficult for me as one sole indi¬
vidual to see what is left for any of us, brokers, undertakers, grocers,
or
any
I
other group. '
..
ashamed to ask you to keep my name
am
out of article if used,
modest livelihood is at stake, and until decency is again in
the ascendency in this Nation we small and helpless individuals
must remain incognito; God helping us,, remaining alert to assert
ourselves when able to do so collectively and effectively/! hope.
but my
!
I
'
It
dealer
'
no. 92
1
question the wisdom of the NASD in promulgating this rule.
-seems to me that any gross abuses that may exist in dealer
transactions are really outside
of the NASD fold and should be regu¬
by the SEC who have ample facilities for discovering such
irregularities.
■•/
yL ••'... •
I should be inclined to feel that the admittance of an individual
or a firm to the NASD would, of itself, be a reasonable endorsement
lated
integrity, and that therefore there was no sufficient need
for the 5% profit edict.
'
'
of
their
dealer no. 93
Just
ation
word to approve of your
a
matter.
■
attitude on the 5% profit limit¬
-V.
:
We think that it is best that a
small dealer not have his name;
registered on these matters, however, here is one
support wherever you think it worthwhile.
Keep the good work up.
dealer
As
a
no.
thieves
or
We have read with
as
a
"You can't
put common sense into fools."
DEALER NO.
letters
94
Governor of New Jersey stated once years ago,
make laws to govern
as
that will lend his
95
considerable interest your editorials as well
from dealers concerning Attempt to
Establish "5% Rule"
Recognized Practice of Dealers in Securites.
fight over¬
seas
for democracy and freedom, we mean those boys who were
stock and bond salesmen and the men who were in the investment
business, and to find on their return that this rule if successfully put
over by a small click of members of the New York Stock Exchange
and a few highly paid members of NASD who we thought were
looking after our interests, but we now find that they are pulling
down salaries from the NASD, salaries that we are paying them, and
they are trying to put us out of business.
We agree with the letter of Dealer No. 69 that the Board of
Governors should send out a questionnaire immediately to the entire
membership of the NASD to ascertain whether it does represent the
views of the membership. We also feel that if it is found it does not.
In
our
omnion it is a crime for our boys and men to
2nd
issue
completely dispel this thought. It also indicate;:
28, written as you stated by a governor
of the NASD, might be having the wool pulled over his eyes. To
state more clearly I quote from your article on page 208, "Isolated
transactions where the mark-up or spread is In excess of 5% MAY
warrant only informal inquiry or a precautionary letter, but where
practice is established formal complaint procedure is a recommended
course" (caps are mine).
Note the "MAY warrant only informal
inquiry" or "a precautionary letter." In other words, informal inquiry
or
a
precautionary letter is the least that can be expected if thf
Gestapo catches anyone taking over 5%. Truly, none are so blind
as
Since you
should
that the author of letter No.
those who will not
see.
,
a
great deal more.
and all the rest of us
are
actually contributing to the astro¬
nomical
which make up
sums
total cost of
conducting
engaged in, it
as we are
a war
may
the
such
not be
entirely out of order for us to remind
you
of
a
reborn industry that is
gratefully playing
an
important part
in the wartime economy
of our nation.
We have told you what
-
.
and
money,
One Billion
Personally, I feel that profit limitation imposed upon legitimate Two Hundred Million Dollars will
business by any association or government bureau is wholly socialis¬ buy—in wartime. In peacetime it
tic and entirely and completely un-American. It has no place in the
buys good roads, school buildings,
American way of doing things.
"^
and provides the funds for eleemo¬
Furthermore, I cannot subscribe for one moment to the manner
in which this rule was adopted. Why wasn't the membership allowed synary institutions, hospitals, etc.
to vote on this proposition? And by secret ballot, and not as we were That's a lot of useful money.
ALLOWED to vote on the minimum capital proposition? The methoc
One Billion Two Hundred Million
used was most un-democratic to say the least.
Dollars is the amount of FederalThe Board of Governors of the NASD surely is an intelligent
revenue now produced annually by
group of men, and I am sure they have the well-being of the industry
at heart.. However, it would seem that they too are afraid to make taxation from the sale of alcoholic
any move contrary to the wishes of the "higher ups" who crack the
whip. If this were not true, why, in the past few years have they
seemingly done more to antagonize the membership than they have
to
help it? Off hand, they seem to base their actions on such false
premises as—might makes right; size or wealth is the measuring stick
of honesty or integrity; that by legislation or rule or edict you can
chase the sharp-shooters out of the business.
A casual reading of
the SEC releases prove the fallacy of such thinking. If they would
only put their ears to the ground they would quickly realize these
truths. Again I say, none are so blind as those who will not see.
What is being accomplished by this antagonizing, this cracking
down on the entire membership just to try to catch a few sharp¬
shooters?
The answer is simple and plain.
The membership is
dwindling. Members are afraid to write letters such as this, honest
criticism, over their signature, for fear of being cracked down upon;
they fear and distrust the officers of their own organization. If this
were not true, why do nearly all the dealers that write you request
that you do not print their names just as I must do? I ask you, isn't
this a fine state of affairs, a fine condition to exist in a country such
as ours?
Such a condition cannot continue to exist, and it will not
continue to exist. Jim Farley had the right answer when he was
reported to have said, "The people are tired of being kicked around."
If anyone doubts this statement just let him look at the results of
the recent elections in New York, New Jersey, Philadelphia, Detroit,
and two in Kentucky/ Wow! 1!
We have been members of the NASD since its inception. Our
dues are going up- each year. In so far as I can see we have not.
received one bit of benefit from our membership.
In so far as );
can see, we are just helping an organization to exist that any
day
may come in and raise the devil with us for almost any reason, real
or fancied, not for what we have, or may have
done, but for some
stupid little thing we failed to do.
It is my opinion, and I am sure the opinion of hundreds of other
dealers, that the NASD has utterly failqd to represent the industry
as such an association should do.
That/instead of fighting for the
industry as it should, it has become nothing more nor less than a
tool of some "higher ups" through which they continue their process
of cracking down upon the industry. That, it is entirely unsound in
principal to chance the ruining of an industry in which thousands
of fine, and I may say above average, people are employed by thous¬
ands of reputable, respectable dealers, approximately 2,200 of which
are members of the NASD, in order to weed out a handful of
sharp¬
shooters. Hitler's Gestapo will eliminate hundreds of'innocent per¬
sons
in order to get one or two
American way
of doing things.
(Continued
culprits, but that surely is not the
on page
2433)
beverages in the United States.
(This is entirely apart from the mil¬
lions which states and local
ities derive from the
same
commun¬
source,
and
spend for maintenance of public
works—in war and in
peace.) No other
single industry contributes
and the
sum
so
much,
total is second only to the
national income tax.
And
one
thought
encourages an¬
other. It wasn't very long ago
called
"morality" into
didn't work, and
a
when
attempt was made to legislate so-
an
free
it
our
never
people. It
will, among
people.
But, quite apart from the "moral"
question, the
our
revenue
the continuance and
our
produced by
industry is being spent to insure
way
preservation of
of life. During the period of
Prohibition, which did not prohibit,
untold millions went into the pock¬
ets of the
bootleggers and their crim¬
inal henchmen. Let that never, never
happen again!
Now, aren't
among
glad
you
you were
the 73% who voted "yes"—
in favor of
Repeal?
'
,
FREE—Would you like a handsome book¬
let
containing the first ten articles in this
and address
series? Just write your name
on
the back
of a penny postal and send it to
of Schenley Distillers Corporation ,
350 Fifth Avenue, New York 1, N. Y.
me, care
It's yours for
the asking.
MARK MERIT
of
Schenley Distillers Corp,
THE COMMERCIAL &
2422
Thursday, December 16, 1943
FINANCIAL CHRONICLE
is brought practically to a -situation of scarcity, there is every pect that the buying public would
standstill,- thus- making it well- ; reason. to believe that an. impor¬ tend to delay their purchases as
nigh impossible to import' goods tant deflationary effect will be to do so is to buy more cheaply.
from abroad for civilian consump¬ brought to
bear upon the sky- If everyone is acting under the
tion. It is true that attempts in¬ high, price level which is now be¬ same motive, the whole economic
variably have been made to de¬ ing experienced by the country. system will soon be brought to a
Y
Y
velop industries in the interior, Thus, other things being equal, if standstill.
A long and sustained deflation
but
because
of
the
lack
of the factor M in the equation of ex¬
is reduced, then also carries with it the evil of dis¬
capital equipments, skilled labor, change, MV—PT;
essential
raw
materials,
and, in-order to lower the factor P rupting the relations of debtors
above all, a well developed trans¬
(price level) all we have to do is and creditors and of doing in¬
portation system,6 it is a foregone to increase the factor T, (total justice especially to those debtors
conclusion
that
an
integrated number of units of goods, wages, whose debts have long maturities
and are to be amortized periodr
economy of relative abundance is etc.) a condition which calls for
an- objective
hard to strive for increased production at home and ically. For while deflation brings
under
wartime
conditions % and large import of goods of all kinds down the prices of things sold
trade
The
Prospect (or the Stabilization
of the Chinese Dollar
*
Ph. D.
By HENRY C. CHEN,
Bank of China, New
:
.
York Agency
"■1
i
.■
against Japanese aggression has already passed the
mark of six long and bloody years. During the past six years she has
suffered great losses both in lives and in property. Millions of people
have been driven homeless and thousands are starving to death
•v.
China's fight
'
,daily for want of food and shelter. This is China at War today.
But behind the grim military resistance of a war-torn China
!
'there
are
many
eco¬
1
the
prob¬
since
hi c h
nomic
issued
the outbreak of the war in
total
of notes
amount
1937,
.
■
much
to
therefore
relieve
distress
the
cannot
of shortages.
be
done
from the
country
In addition,
from abroad
especially during the
period immediately following the
cessation of hostilities.'
* -
it certainly will be a
folly to claim
principal of all outstand¬
ing debts will be equally reduced
thereby/ Take a farmer who has
a $5,000 debt to discharge for in¬
that the
though
price
control measures y Now for the sake* of argument
then the total amount of
have been introduced, neverthe- let us assume that the national
J
money in circulation as of today
lare
probably
stance. Once the forces of defla¬
less due to administrative inef¬
economy will need $3 billion to
is S62 billion, or at an average
not
yet
suf¬
and
inexperience/ en¬ maintain a price level such as ex¬ tion are set in motion, the number
rate of increase of approximately ficiency
ficiently
ap¬
forcement of Government regu¬ isted in 1937 which is generally of bushels of rice,; or potatoes or
"
$10 billion per year for the pe¬
preciated
by
lations is extremely difficult and' considered as a normal year. The days of labor required to pay off
riod from July, 1937, to the time
the
average
his-debt-gradually will be in¬
as a result black markets are ram-j
excess amount of paper money to
of writing (August, 1943). And if
observer
to
creasing. If the quantity of his
the war is to end in 1945, as pre¬ pant everywhere. When coupled; be syphoned off will then be $77
form a better
produce could be increased pro¬
with the fact that hoarding and; billion.Vv'
;,r..v .;ylv"
dicted
by Generalissimo Chiang
judgment
of
portionally
to
the changes - in
How' could this huge amount of
Kai-Shek," and if the present rate speculation are indulged in .not i
the real hard¬
prices, then it probably would
only-by- private profiteers but also j
of increase in the notes issued is
surplus- money possibly be with¬ not make much difference whether
ships that have
has
been
contended
maintained in the next two years, by corrupt government officials,j drawn?' It
befallen the
the prices are going up or down.
the whole picture of inflation-does' that in order- to
bring the price
that is, $10 billion per year, then
people
of
But since agricultural organiza¬
look very discouraging.
:
; j level back to 1937 the $77 billion
the total note issues from July,
China. One of
tion "lacks the elements of flexi¬
This is an overall picture« of; of excess funds still vested in the
1937
to,
say,
December, 1945,
these seem¬
bility found in a large part of the
China's inflation at the moment,;, hands of the public may be funded
should be in the neighborhood of
ingly unspec¬
manufacturing and other indus¬
and it shows that China "on her; into long term Government debt
tacular
but
$80 billion. This no doubt is not
tries,"1? it is rather doubtful that
domestic front is really facing a; bearing a low interest rate, say
an exact figure, but for our pres¬
Henry C. Chen
equally, if not
the debtor will have the ability
ent analysis it may well serve our serious predicament. Needless, to at 2% per annum. In all fairness
more,
importo - adjust
his output to ■ price
tant problems is the fight against purpose.
"
Y"
,'
; Y say, on the military front she is: to this contention it may be said
changes, hnd if relief cannot be
an
insidious inflation which
is
Any one who is familiar with still able to fight back the Japan-; without fear of doing injustice to
brought forth through govern¬
rudimentary
principles
of ese with ever increasing valor, but those who have sincere intentions
ravaging the country and is threat¬ the
mental actions, dire consequences
cannot
be
expected • that a1 to retain the use of the fapi, that
money and banking will readily it
ening to undermine the morale
of i economic
depression usually
nation at' war can long endure,; this method is rather impractic¬
?ind economic virility of the people. see that under such circumstances
becomes inevitable.
I
The evil effect of this dreadful the amount of money in circula- extreme economic hardships with-' able;-To begin with, it is beyond
Another evil that is bound to
inflation
may
be attributed to tiori js no longer determined by out showing signs of "cracking. the financial ability of The Gov¬
accompany such a policy of slow
many different causes.
Perhaps the heed of the business man, but Perhaps the only solution to the ernment to increase its public and graduated deflation is its un¬
the most fundamental factor is the rather by the need of the Govern¬ entire problem of arresting a run-, debt by so huge an'amount. It is
favorable effect on the country's
fact that due to the impossibility ment to finance the war, and as away inflation is through the re-j true that the figure of national
export trade. In a period of. falling
of diverting the flow of money soon as this state of affairs is capture of Burma, thereby making income is an unknown; it may be
prices, the costs of production of
from the general public to the known to the public, The confi¬ it possible to resume the inflow; large enough, as commonly be¬
home products generally fall more
Government either through ade-r dence of the people in the value of foreign goods to relieve the lieved to support a debt of that
slowly than the exchange rate on
acute shortages which along with; size. But through closer examina¬
quate taxation or by borrowing or purchasing power of the cur¬
foreign
countries
expressed
in
immediately fades away. the wholesale and indiscriminate tion we will readily see that it
to syphon off the excess purchas¬ rency
local currency (e. g., the number
ing power of the people, China in What happens next is generally a issuing of paper money is the crux would be idle to pretend that this of
fapis required to buy, say, one
financing her war effort has been common flight from the currency of the situation facing the coun-, is true. If we take a look at the
United States dollar or a British
budget, we are all the
• national
forced to resort to the crude, in¬ into commodities, real estate and try. today'.. YYY>v-V> ..V:;Y Y;...
pound). Wages which is the larg¬
ii
equitable method of printing whatever things the people think
;':.:'yy;;>.' t more convinced that for China to est item in costs of production
money. Thus ydien the Govern-, would be appropriate to protect
Such being the situation there' carry a public debt of $77 billion,
generally, too, would lag behind
ment is in heed of money, all that [ them from the working of the is indeed no question about the! not to mention the old debt which
prices on the decline. The net
it has to do is to turn over so .vicious
c i r c 1 e—?! namely,
the rtecessity of reorganizing/the curr amounts to no less than $3 billion,
result is that during the period
much Government obligations to greater the need for Government rency system once thb war is over.' it is simply out of the question
of slow deflation the number of
for China to do so. Thus in the
the Central Bank of China which, deficit financing, the larger beAny attempt made to bring
local currency which the Chinese
in turn, issues so much paper notes j COmes
the note issue; and the about a proper alignment of ficti¬ fiscal year which began from July
as
"cash''
for the
bonds thus higher the commodity prices due tious wealth and real wealth prob-i 1,1937 to June 30, 1938, the total exportor obtains from a given
amount of foreign exchange would
bought. How much paper money U0 greater - amount of money in ably will encounter the first ques¬ estimated revenue of the National
fall more rapidly than would the
has been issued in this fashion circulation, the
larger will be- tion as to how much of the in¬ Government amounted only to
costs of production of his export¬
since the outbreak of the present [come the deficit, etc., etc.
The flated currency is to be with4 $1,000,649,496,8 a sum which is not
able products which are usually
Sino-Japanese war in 1937, is in¬ following table shows the effect drawn or contracted before an ap4 even sufficient to pay the 2% in¬
expressed in terms of prices paid
deed a very difficult question to of
this
situation
on
the
price proximate
equilibrium
can
be terest on the $77 billion funded for raw
materials, plus wages, and
answer.
One estimate1 puts it at structure in Chungking as late as established between the amount of debt.0 Furthermore, the adoption
taxes. And this depressing influx
of this method is time consuming.
$60 billion in total, issued since November, 1942:
'
currency in circulation or "quan¬
ence on the country's export will
the Lukouchow incident, and this
It may take months or years to
tity of money" on the one hand
OF
CHUNGKING'S
WHOLESALE
PRICE
sustain at least until the task of
magnitude may be appreciated by
and a normal price level on the convince the people of the de¬
INDIVIDUAL COMMODITIES,
currency stabilization is achieved,
the fact that at present there are
NOV. 22 TO 28.. 1942
other. The concept of the quan¬ sirability .or necessity of buying
After the war China should grasp
Government bonds. In the United
approximately
fifteen
tons of
(January-June, 1937 = 100) '
tity of money in circulation is
every opportunity to develop her
bank notes issued each month to
where
the ; educational
Name of Commodity—
Price
Ratio
vague and uncertain, just-as thg States,
export trade in order to enable
meet the demand for deficit fi¬
Unit:
(in NC)
(a)
amount
of
goods and service? standard of the people is high, her to
buy from abroad and any
52
710
Rice, picul
nancing.2
coming on the market is not easily when it comes to selling war bonds financial
32
170
Flour, bag
policy which tends to
Today there are many different
definable; what is the quantity of to the people, everywhere the weaken her
54
Pork, picul
1,200
foreign trade posi¬
"kinds of currency circulating side
Government
meets
only
with
820
33
Vegetable Oil. picul_„_
money - necessary for all -types of
tion should,.- if avoidable, never
66
1.350
by side with one another in China. Sugar, picul
and
business transactions within ah .whole-hearted ' cooperation
42
390
be
Salt, picul
attempted for it would be
,In the so-called occupied terri¬ Cotton
despite The mounting taxes
economy at a given time is some¬ this
190
25
Cloth. piece_-_against the best interest of the
tories there are perhaps more than
75
148
Cotton, picul
thing difficult if not impossible tcf heaped upon their shoulders. In
country to penalize artificially its
five or six kinds of notes issued Coal, metric ton.—
580
69
determine. As commonly undern China the picture is different; the
97
95
export traders when it needs as
by the Japanese occupation army Alcohol, gallon
stood, money consists of bank administrative machinery for the
291
4.800
Wire, picul
much foreign exchange as it could
and
its
sponsored puppet re¬ Iron Bar, picul_^.YIY 3,800
notes and subsidiary coins circu-t distribution of Government bonds
229
possibly get to import all types of
260
871
gimes. How much of each of these Board, piece
lating in the community and de-j is inadequate and it has never
127
capital equipments for industriali¬
31,000
'has been issued there is indeed no Blue Dye, case—
posits which may be drawn on had the experience of selling Gov¬
14
24
66 <Y Sulphuric Acid, lb,
zation.
Yv
way of determining and it will
53
by checks. This in addition to th£ ernment securities to the general :■
4,150 '
Grey brick, per 10,000__
y,yVIII / ■ v
have to remain unknown at least Native
97
580
rate
at
which
the quantity
Paper, per ream
public and the people are simply
i$>
301
1,000
until the war is over.
All we Cigarettes, case
For these
reasons
the writer
turned over in the course* of-.a too Ignorant to appreciate the
lems
w
_
lr-
.
,
,
.
•
—
.
....
4
that
the
total amount issued does run
into
can
present
at
say
is
y;
billions.
situation
The
unoccupied
in
China, of course, is much better,
so far as uniformity is concerned.
At the moment there are only two
kinds of paper money in circula¬
tion which possess legal tender
power
They
on
are
known
as
a
basis.
otherwise
nation-wide
the
yuan,
fapi, and
the recently
unit notes
whose rate of exchange with the
former is legally fixed at one to
issued
customs
twenty.8
gold
y
.
.
Prior to the outbreak of the war
July 7, 1937, there was about
$2 billion of notes in circulation
throughout all parts of China ex¬
on
cept
Hongkong,
Outer-Mongolia,
and the former Three Northeast¬
ern
it
is
Provinces, or Manchuria.4 If
assumed that $60 billion is
(a >
Number
of times
of
its
rise
as
com¬
year—that is, the velocity? of* cir^ idea of investing their money in
Yv.' ;,.
'.« .y^y;.'
culation — will give us a < fairly them.
.Even if it is possible to fund the
Council and the Foreign Department, Bank
good index as to the quantity of
of China, Chungking, China.
money in circulation at a giveri excess purchasing power into a
The
number
of
times
.■
y, y ; more or less permanent \ debt, it
prices time.
have generally risen in Chung¬
In this connection it may. be re¬ is certain that the very, process
king, and to that extent in all called that in China at the ouU of absorbing,' since it is time con¬
parts of China, is frightening in¬ break of the war in 1937 the .total suming,; will give rise to. a slow
deed. Various measures have been money in circulation was in the and graduated process of • defla¬
taken by the National Govern¬ neighborhood
of $2 billion,vail tion, a state of affairs which is
ment to arrest further rises in the represented by yuans, otherwise absolutely detrimental to business
known as fapis, or legal:.tender recovery, and is bound to throw a
price level. But to our distress
little effect has been obtained to notes. The fapi, as also was shown,, wet blanket over, the entire pro¬
ameliorate the situation. To begin was circulating widely in all parts gram of rehabilitation. For when
with, in view of the lack of a of China with the exception of it is certain that prices will be
pared with its
Source:
pre-war
National
price.
General
-
Mobilization
.
ventures
to
propose
that instead
withdrawing
the
surplus
amount of fapis through funding
of
it
into- long-term
public interest
bearing debt, a new currency or
new
unit of account be created
to
the
replace the entire' amount of
depreciated currency and then
express
taxation and' Government
expenditures in terms of the new
and stable unit.
For the sake of illustration
us
call
this
new
let
unit of account
the "Sun". In order to
bring about
alignment of the price
sound fiscal policy, further re¬ several outlying districts such as, falling, as a result of the contrac¬ level and the quantity of money
course to the use of the printing
Outer Mongolia, Hongkong and tion of money in circulation, re¬ required to support the desired
presses in
all probability could the former Three Northeastern tailers and wholesalers would let price level, the exchange values
not be discontinued if the war Provinces.
After the war, with their supplies run down, and man¬ between the Sun and the depreci¬
effort is
to be financed at all. these
places returned to China ufacturers would also "play safe" ated fapi be set at a rate which
Secondly, dye to the occupation and with the blockade of the sea- in-running their plants, purchas¬ will respond approximately to the
of all the maritime provinces and coast lifted, thus making it pos
ing raw materials or hiring addilatter, and will be subject to peri¬
especially the loss of Burma to sible to resume the import, of tional labor. Under such circumodic revisions by the Treasury if
the
Japanese,
China's foreign goods from abroad to relieveThe; stances, it is only natural- to ex¬
-
a
proper
Volume
and
when
value
of
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4238
158
is
:it
found
the
that
the
.fapi is still fluctu¬
ating during the time of its with¬
drawal. Thus as compared with
July 1937 if the price level had
gone up 100 times then; the rate
of exchange between them should
be set at 1
100.
to
After the Sun has thus been in¬
^iiimiiiimiimiiimimiiimimmiiiL
economical transporta¬
and
cient
foreign observer put it
some time ago." For if China is to
attain a healthy stabilized econ¬
tion,"
as a
fOND
she must try every means
practical to produce goods both
agricultural
and
manufactured
which are sufficent not only for
the
of
maintenance
v
New
two currencies and as
duce
It
received
by the Government/ through the
China
channels of taxation and borrow-
of
ing, they should be destroyed and
their place an equal ' value of
Suns should be issued, that is, at
the rate fixed by the Treasury.
In order to shorten the period of
with-drawing /,:.: the
outstanding
fapis, the people shbuld
be encouraged to exchange them
amount of
for
the
at
Suns
designated
any
banks
method
this
of
is
to
reorganization in the
postwar
years
involves two
separate
problems—the
attain¬
ment of budget equilibrium and
120
her
of
values
INVESTORS
A
We like
§ Af /W. SMITH & CO., Inc. E
=
to be on
rather than from - the
House
the
Committee://',- A-v.///,/.: !■[//./
".
international
trade
during the year 1942 has been pre¬
building
of
up
commercial
insured
all
banks
the stabilization of the currency—;
country would tend to keep /its', pared by the bank management
international
balance of;; pay¬ commission
of
the
American
and that it is impossible to secure
ments in
equilibrium unless and
depreciating currency
first been stabilized. The jus¬
budget
ing
until
times
has
the
in
found
be
the
difficulties
of
Furthermore,'
deficits in the
flation
should
it
that
overlooked
not
whereas
the
for
existence
of
a
gap
the
between
receipts and expen¬
ditures of the national budget. It
is for this
that the task of
reason
stabilizing the currency should be
undertaken prior to or at least co¬
evally with the attempt to balance
the budget.
7 •/.;'<•: A
IV
y:
So
far
TJius,
concern¬
commercial bank to compare
any
its
of other banks of compar¬
those
able
type and size in each State
and
throughout
whole.
said that the economic ills of the
from
world
as
be laid entirely, at
cannot
1942 with
ratios for
earnings
far ^s external sta¬
bilization is concerned, it may be
current
profits
It is true that the stability of for¬
the Nation, as ,a
Detailed ratios of earnings
operating
the door of the monetary system.
operations, current
recoveries and
expenses,
and
losses
securities,
on
charge offs, dividends and interest
eign exchange among all nations
is essential to economic recovery.
But it would be folly on our part
after
if
sought the
we
panacea
for the
,
dividends
presented in
are
companies. In any event, we have
self-purge
and
regulation
lift
the
to
industry
respected
a
"The
publicity
given
in
Bar¬
the record of investment
ron's to
companies in comparison with the
performance of, the Dow-Jones
Averages,
apd' 'the comparison
^ith the StandarcJ-Poors 90-Stock
Average
given
quarterly
bulletin
Standard-Poors
done
the
in
have
great deal to convince in¬
vestors that investment companies
a
give substantially better-than av¬
erage results."
'
■
■
&'•,
*
V.
1
'
,
/
The December-January seasonal
stock price trend is the
Securities
subject of
Research
;•://
effect
Rock,
National
Bank,
Little
•
Chairman of the
is
Ark.,
the Com¬
of
Vice-President
tive
mercial
which has been brought on the pro¬
McDonnell, Execu¬
Timing.
&
article presents a
the record of stock
market
movements
during De¬
cember and January in each year
The
/
table showing
A rather uniform pat¬
since 1897.
is
tern
indicated.
The statistical
Commission.
less with duction of agricultural products by
probabilities are summarized as
the outline
stabiliza¬ the war, the wholesale destruc¬
follows:
of > real wealth, / the rapid to produce either; vehicles or necessary
tion of the Chinese dollar.
We tion
1. Probable: Rise in early De¬
parts/ for
adequate
maintenance
have made no exploration of the technical changes in the manufac¬ spare
/..'•://
work," not to mention the fact that petro¬ cember.
problem of external stabilization, turing of new and old industrial leum., 'deficiency will remain an insur¬
2.
Less Probable:
Decline in
which, it is felt, cannot be solved products, the alterations in fash¬ mountable -obstacle probably for years to first quarter of new year.
/.:/
and
demand,
the 'drastic come./
by any single nation alone. It is ion
7 In '
3. More Probable: Decline from
the - case of China, where the use
changes in the fiscal policies of of.'.checking accounts ts rather limited as
an international problem and the
early December high to Christmas
solution must be sought through warring nations, and above all the compared with the United States where
Eve.
1
/
/
international actions and coopera¬ instability of political conditions 90% of all business transactions are con¬
4.
Most Probable:
Rise there¬
ducted
through
checks, the factor M'V'
in many countries, all. these are
tion.
/V: //V' .V'V / .'•/
A"/ .
may well be considered as nonexistent.
after into mid-January.
8
world-wide
phenomena
whose
Cf. China Year Book (1938), p. 472.
Perhaps the task of adjusting
0The
ing ourselves
more or
of internal
:
>
,
"
dollar
power
internal
its
to
purchasing
is not as important as it
would seem;
It is
be necessary
for China,
foregone con¬
clusion that after the war it will
be
a
for many
necessary
it will
other na¬
as
tions, to retain control over her
foreign trade and to that extent
her foreign exchange at least for
a reasonably long period in which
military and economic demobili¬
be effected.
zation is to
this
faced
stand
or
on
now
that
shackled
be
acid
test
own
system
she
from
to put her
or
in
is
all
good
order,
already
sorts
.
of
un¬
un¬
be built
of external stabilization
depend upon whether or not
China has "the ability to ensure
program
will
supply, at competitive prices,
of articles of guaranteed quality,
the
to remove restrictions
port
on
the
ex¬
trade, and to provide effi¬
on
has
zation
be
can
billion
'•30
••
not
the
to
writer
has
.
obligingly
/• V
some
of the Chinese military cadets recently.' sent
to the United States for technical training.
.
3 Formerly the customs gold unit was an
accounting currency with
theoretical gold
a
content of 60.1866 centigrammes.
established in
was
stitute
used
Cf.
for
the
the
as
The
•
1930 and used
Haikwan
customs
Chinese
Tael
accounting
Year
Book
The unit
as
a
sub¬
previously
p.
1270. /
*To
China
exact,
the
the
end
note
issues
for
all
of
November, 1937, of
the principal banks was $1,683,469,000. For
all practical purposes, it will be taken for
billion
$2
various
when
the
provincial
Kwang-Tung
Cf,
discussion is built around a recent
Unfortunately,
Poland's
attempt
China
and
Year
notes
issued
bv
the
governments,
notably
Szechuan, are included.
Book
(1938),
p.
209.
5
The New York "Times," July 7, 1943.
Pit is,true that-highways can.be exten¬
sively built today by the use of hand.labor.
But the real difficulty is China's
inability
was
but the particular failure
failure,
of
its
political
from
an
,
economic
The
Lord,
Abbett
that
concludes
•
Restoration
(London,
P.
S,
of European Currencies
King, 1927), Chapter I.
▼ "'JU JUMJ
n
Great Britain, Department of Overseas
Trade,Trade, and Economic Conditions in
China, 1933-1935, Report by A, H. George
(London, His Majesty's Stationery Office,
1935),
p.
"Hon.
32.
Charles
post-war replacement boom simi¬
lar-to the booms which have fol¬
lowed
Dewey,
Bank
"A
of
A World RFC,"
Financial Chronicle,
Commercial
Vol.
157, No. 4188, June 24, 1943.
said
in
and
"movements
(only)
of
the
of
terms
trade
efficiency in agriculture and
rials,
,
NGTON
FUND
one
and
more
Other
pronounced.
Lord,
ATtbett literature
this week includes
letter setting
a
forth the income tax status of 1943
dividends
Affiliated Fund and
on
American Business Shares.
In the
div¬
amounted to
$.22 of which $.09^ should be
treated as ordinary income and
case
of Affiliated Fund, total
for the year
idends
$.12 Va as capital gain for tax pur¬
poses.
The total 1943 dividend of
$.20 paid by American Business
Shares should be divided as fol¬
lows:
$,12
ordinary income and
as
$.08 as capital gains.
Revised
folders
on
Affiliated
("Aces") and Union Bond
"C" (UBC) have been made
Fund's
Fund
available to dealers.
-
/'
sjs
■
$•'
«
...
Keystone Corp.'s monthly house
The Keystone Investor dis¬
"What will happen to the
comes?"
Conclusion:
"The history of the
market during the last war, the
record of the market so far during
organ,
cusses
stock market when peace
this
and the
war
facts about
our
present economy do not seem to
justify any fear of peace—the ob¬
jective which every resource of
the civilized world is straining to
achieve."
The
latest
issue
of
Keystone
Corp.'s Keynotes is on the subject
(Continued on page 2435)
Keystone
a
at the
possible."
Postwar
Custodian Funds
*
Certificates of Participation
Trust Funds
in
investing their capital as follows:
Prospectus of this Mutual
Investment Fund available
through
dealer
your
or
same
time
Cf.
Economic
that
raw mate¬
domestic in¬
realized as fully
Harris,
Seymour
E.,
are
Problems
McGraw-Hill, 1943), pp. 394-5.
(New
»
York:
B-l, 2, 3 and 4 in BONDS
Series
investment
from
the
dis¬
k-l, 2 in Preferred Stocks
Series
tributor
primary products can be halted
by improving still further produc¬
dustrial. opportunities
as
It may
passing that China basically is
primary products producing country, but
the
against
tive
past wars will occur after
and may be even longer
this
ClTDIPQ
S.
International Cooperation:
a
york
analysis of the present
and political situation,
brought about the downfall
before the scheme had
be experimented.
Cf. Jack, D. T„
time to
be
Incorporated
63 wall street—new
ing business trends following for¬
mer wars.
From that record and
government
The
be
at
GROUP,
factors. which
.
currency.
\1935-36),
pi Abstracts, "Post-war col¬
lapse or post-war boom?"
The
Request
Brookings Institution study show¬
utter
an
Lord, Abbett asks in the current
on
DISTRIBUTORS
issue
(Fourth
II
Vol.
in this case should be attributed to
promised
/"/,■..
,.z '
information, is furnished by
national revenue
the
Governmentvin the early part of 1923 tried
a.high
disclose.
This
over
It-may be mentioned that this method
nothing new and original. The Polish
is
ranking Chinese Government official/whose
name
annum
rather
Spahr,' Walter E., and others, Economic
it.:
from
is
war
on
a
$77
is $1,540,doubtful that
charge
per
is
Principles > and Problems,
Edition), p. 349.
external/stabili¬
obtained
2%
could'reach this figure.
of rehabilita¬
properly set, that
is
at
and: it
the
once
brought to the fore.
estimate
iThis
debt
000,000,
stage
been
interest
total
or
It is only when this
real task of
the
removed
world is to
the ruins of the pres¬
preliminary
tion
be
saner
a
ent conflict.
'
equal treaties. That is to say, the
ability of China to inaugurate a
must
minimized if
of
not she will be able to
her
economic
will
the
with
whether
It is in
China
that
period
effects
evil
Prospectus
■MrW
and dignified position in the mind
Corp/s latest issue of Investment
Bank Management
the external value of the Chinese
a Class of Group Securities. Inc.
seen
National
■
William A.
the growing complexity of
revolutionizing
SHARES
of
the 27 tables of which the study
industrial and financial structure
the
STEEL
promotion,
consists.
deep-seated
international
eco¬
nomic
disequilibrium
s o 1 e 1 y
through monetary policies.
In¬
deed,
*———
the in¬
field—the wild
in
the times rather
than faults peculiar to investment
faults
ably
paid, and net profits before and
and
have been
we
But unless the basic
•!
as
cause
due
occur
other sim-
or
ability of a country to produce
and export is / built up, what
may appear at the outset as only
a
temporary unfavorable/con¬
dition
may
become
perma¬
nent."13
/' ■ ■//' • //A v./
be
they actually did in the case of
China, forces which brought about
the depreciation of the currency,
in the later stages of currency de¬
preciation the line of causation
often tends to be reversed; namely,
the rapid depreciation of the cur¬
rency may actually be the real
pay¬
ilar cause;
budget
early stages of in¬
in motion,
failure
crop
of
/
have set
may
a
of
periods
balance
which .might
ments
to
to effect tem¬
unfavorable
international
witness to all ^—
a
place
Association
and
will of the dealer and the investor. For
shortly be sent to the Association's our own part, we are more confi¬
membership, it was announced on dent than at any previous time
Dec; 4.'"'. '■//" /// //-■ of the growth of the larger estab¬
The study, the sixth annual re¬ lished investment companies with
port of its kind compiled by the good records of performance, ade¬
Association's
Bank
Management quate management facilities, and
strong financial sponsorship.
Commission, is designed to enable
exchange .is at
foreign
taken
Bankers ">•
equilibrium. The loan-'
necessary
porary
tification for this conclusion is to
making adequate fiscal estimates
while the purchasing power of the
money is still on the down grade.
of
has
structures.
Some of these faults were prob¬
prosperity
domestic
on
and the
"We have been
that
ises, the over-zealous
capital
//A
is
distributor of
year as general
the/unsound
of the finan¬
cial and economic strength of a
.
19th
'
-
enthusiasm, the optimistic prom¬
detailed, statistical compila¬
tion of the earnings and expenses
.
//based
■A
'■/
on our
The
\
,
E
' BOSTON, MASS.
ABA'Study On Bank
Earnings & Expenses
Means
Ways, and
starting
are now
"
shares of Incorporated Investors—one of the pioneer investment com¬
vestment company
top down. «;■ As pointed out by the
Charles S. Dewey, member
of
"We
/
follows:
panies of the country.
BiiHitiHimiiiHiiiiiiiiiiiiiiiiiiiiiiiiiiH
Hon.
recent letter
a
E
DEVONSHIRE STREET
Ill
^
,
a
basis must begin from the
up
'"v.
=
;
Bright Future
particularly the sentiments expressed in
letter reads in part as
still have to bear in mind that
it is
&
208 So. Le Salle Street (4)
.
from The Parker Corporation, spohsor of Incorporated Investors.
DISTRIBUTORS:
adjusted by means of
temporary foreign loans. /.Never¬
theless, granting that this is true,
if
CHICAGO
10 Post Office Square (9)
>
Investment / Trusts
request
on
external
may/al¬
currency
rehabilitation
BOSTON
Spring Street (14)
TRUST
Prospectus
be
ways
Broadway, New York (5)
LOS ANGELES
634 S.
might J exist
that
between the internal and
attention to the fact that the task
of monetary
GENERAL
get
disequilibrium
tage of stabilizing the fluctuating
significance of such a policy will
be fully realized if we but pay
^request
that "since
-
foreign financial
for her
stabilization programs both in¬
ternal and external,- and - that ;ariy
able
be
bottom
in terms of the new
and stable unit of account, and the
NATIONAL SECURITIES & RESEARCH CORPORATION
of the
one
request
upon
.on
aid in the post-war years
sound
level
argued,
be
may
would have the immediate advan¬
price
Prospectuses
simply
or
"Big [ Four"
the United Nations, she should
we
//•-//
>/
adoption
money
or
shops.11 /."/
The
Government
efficiently
SERIES
FIRST MUTUAL TRUST FUND
could not produce at all.
the depreciated fapis are
in
STOCK SERIES
Prospectus
which she could not pro¬
more
England
SERIES
INTERNATIONAL
COMMON
Fund
exchange
in
markets
ternational
STOCK
LOW-PRICED
population/but for export to in¬
for goods
PREFERRED
BOND SERIES
entire
of living for her
standard
of the
SERIES
LOW-PRICED
decent
a
tender power
one
INCOME
SfcRIES
omy,
troduced and
circulated, full legal
should be conferred
on it along side with the old fapi.
The tax paying public will be
given the choice to pay in either
2423
to'
W. L. MORGAN & CO.
Real Estate Trust BIdg.
Philadelphia
.
s-l, 2, 3, 4 in Common Stocks
■
Prospectus may be obtained from
local investment dealer or
your
The Keystone Corp. of boston
50 CONGRESS
STREET, BOSTON, MASS,
2424
THE COMMERCIAL & FINANCIAL CHRONICLE
Post-War Foreign
Exchange
ain
Thursday, December 16, 1943
from -the
embarrassed
Stabilization Further Considered
.
position of
an
debtor ./to, the
States;
The
-
.
new
(Continued from first page)
proposals in form
eign exchange or as it
sorbed blocked balances,
(thus published does not con- that it is possible to separate more moderate, so far as the
ab- sist of deposits in the inter- easily transactions on current operation of the Fund for, the
and national fund subject to pay- account and transactions on
that there would be thus
two ment
:
with" 100% gold
on
demand, then
and fraudulent and fictitious. A
the other with very much less reserve that is not instantly
than a 100% gold reserve, and available is no reserve.
not
necessarily payable in
Gold in the New Plan
gold, and that the latter might
The new plan puts an in¬
easily go to a discount as com¬
creased emphasis on gold in
pared with the former.
The revised plan of July 10 form, but introduces the new
element of the change in the
Withdraws all suggestions of
gold content of the Unitas by
deposits. One wonders in that
an 85% majority vote, which
case how the Fund would operwould require the approval of
ate.
A bank which cannot
reserve
_.
,
give credit on its books in
making payments, which .can- i
not draw checks on itself in
making payments, and which
use
only its assets in
making payments, is a new
kind of bank.
Such a bank
must
could well enough operate in
,the;«g:
the capital account, to leave
a_
American member of the
governing board, but not the
|entirely
account transactions
tree and to; control
the capital transactions. jNo
leave
ceeds abroad. The
is
the
pro¬
Keynes Plan
have ^ nothing
stabilization
two
mist expresses great
the growth of
over
,
ances
concern
the bal¬
with India which it says
"is
bestowing on India one
of the most pronounced infla-,
Fund may, in the first lions
experienced by any bel¬
years, take; over such ligerent country. "The
growth
blocked balances to the extent
of
of
been held down until
10% of the quotas of all
thing is possible. A man countries. As
the quotas are
wishing to transfer1 his capital to be five
billion dollars, or
from one country to, another
needs only to ship out com¬ mbre, the fund would thus be
allowed, during the first two
modities and
such
and
.
position of a strong creditor operations.
at the, expense of the United
Parenthetically, the Econo¬
.
7
balances,
left for exchange
absorb
years, to
one-half
a
billion
the
Indian
balances
dollars
of
the accumulation of ster¬
on
great deal more realistic
these blocked balances. At the
ling by India has. now
with respect to this point. It
end of two years, the Fund
virtually removed. A
recognizes that control of capwould be free to reconsider issue of the
Economist,
ital movements "if it is to.be the matter and
presumably to of Oct. 2, returns to the
effective
probably requires
a
has
recently
by Indian use of the balances
to reduce long term Indian
sterling debt, but only 12 mil¬
lion 250,000 pounds of this
minimum of debt remains, and this brake
the machinery of exchange
J?
1* decided to in the
Congress. As the control for all transactions,"3 ances* "reduction do so.
This
Let no one be under the
Fund has power to fix the ex¬
amount that can be taken in
illusion that the modest rechange rates of all countries
the first two years may be in
with the Unitas, and power to; tirement to a .limited field,
deference to the proposals oi
change the gold content of leaving private transactions
the Canadian experts, and it
the Unitas, the Fund could free, is possible if the real
may be because of a study oi
j
consent of
been
later
that
sub¬
ject of the inflation in India,
which is evidently very dan¬
gerous, and which seems to be
intimately connected with the
issue of rupee notes in. India
against these blocked sterling
balances. Indian
war
finance
has
clearly been very badly
foreign exchange trading if; change the gold content of the purpdses of the Fund are to be the sums involved.
haiidled by both British and
6
'dollar without the consent of; carried out.
it had many accounts with
When I wrote my address Indian,
It is possible for a country
governments,
commercial banks throughout Congress.
in May of this year; ! was un-<
Britain's problem with re¬
which has blocked balances to
the world, but this fund is to
able to get satisfactory in¬ spect to these blocked
Free Exchange and Control make
sterling
composition with its
deal only with the central
formation as to the magnitude balances is
of Capital Movements
obviously a. grave
creditors "or special arrange¬
banks or exchange stabiliza¬
of the blocked balances in one and a difficult
one, and
The revised plan empha¬ ments with its creditors pn old
tion funds of the various coun¬
Britain, though I knew that; the sleight of hand by which
sizes (Preamble, Section ' A) debts and to Jet new transac¬
tries. It could not, thus, en¬
they were large and "growing. Lord Keynes. and our Treas¬
that the Fund is to deal only tions be free. But it is not
The
London
Economist of
gage in any exchange transac¬
ury, in its first proposal,, un¬
member governments possible to have general free ■ Aug.% 7, -1943, pages 180 and dertook to abolish the
tions without using its gold With
prob¬
in makins navments
or else and their fiscal agents and is dom of exchange transactions:
181; however,, -provides some: lem, by throwing it on the
general freedom of movement
checks or
ts' or cable not to intrude in the cus- of goods, end simultaneously exact information. The fol¬ shoulders of an international
*
transfers on the central bank tomary channels for conductiri : which
the United
to prevent capital movements. lowing table gives particular* fund
tf the country whose cur- ing international commerce
for seven countries, * all but States would * be overwhelm¬
;-4
A country which is afraid
one being in the British Em¬
iency it was using in making and finance. This is designed
ingly the biggest creditor,
payments. Buying francs in to relieve thenars of private
pire.
caught the British imagina¬
£1.000's
I'
Date
the foreign exchange market
finance; We have a picture of
suddenly jump to an- India
tion and was at first widely
500,000
July 16, 194C
121.458
it could collect the francs only a free foreign exchange mar- °.^ei" country, has a very Eire
Mar., 1*43
acclaimed in England.
Canada*
157,300
Aug.,- 1943
■
-
-
-
.
„
..
,.a
wlu„,u.
draf
usi^
...
s
uom.
—1
.
m^y^Whicll
.
interven-'simple way of avoiding: this'
payment
from ket, with the Fund
French commercial banks in- ing only "where a weak cur-
by
to
forcing
xne
the
Bank of France
cannot be disposed of
tight- rency
^anK 01 trance, xignx
J
Wpimi
pvohanW
mar-
fontrel carfte^rnovement^
.
Egypt
.
Malaya-,
If
c°ntrol capital movements. It
protects itself from this dan-
,
71,200;
58,000
Dee,,
1942
July,
1943
May 31, 194:
Feb.,' 1943
Dec.,
1942
Australia
64,000
New Zealand.
34,000
Argentina
17,500
*Interestrfree loan.
deliver
or
& A&4 i
only
by drawing checks
on
the
(T. IV
On the other hand, we have
Federai Reserve Banks of the the
provision
(VII.
2)
The
1^^
ccntroi 0f jts
Economist
adds
that
other
m0nev
that,Sf its.
market
accounts; not included
in the tabulation, will bring
the total of such sterling in¬
relaxing the member countries are not to, do not grow excessive in reladebtedness easily above the
American money market.
It engage in exchange dealings J tion to its gold by keeping a
one billion pound mark,
This
would thus constantly be ere-' with member or non-member
| balanced budget--by making figure would, presumably, in¬
ating problems of money mar- countries that will undermine a financial environment in
clude ; the pre-war - balances,
ket control, which might be stability of exchange rates es^imm money - cools off and mentioned in
my address of
embarrassing to the central tablished by the Fund, which wants to staysMay 11. The Economist fur¬
banks of the different
coun-1 can have meaning only if prither adds that the totals arc
"Abnormal War Balances"
tries, with every foreign ex- j vate transactions in foreign
growing, and that in particu¬
and Blocked Exchange
change transaction it engaged exchange are controlled. And
I lar the
sterling assets piling
in.
I think that, the plan has we have the provision (VII. 4)
The revised plan of
July 10 up to the credit of the Reserve
hot been well thought out that member countries are to makes what
appear to be more Bank of India are
likely tc
from the standpoint of the cooperate for the purpose of moderate
proposals with ref¬ rise
by an annual increment
mechanics of banking or of regulating international erence to
handling of blocked of about three hundred mil¬
foreign exchange operations. movements of capital, taking balances in debtor countries, lion
pounds.
measures such as not to accept
.; The plan is quite explicit as
meaning, chiefly, England,
Obviously blocked balances
to what the assets of the Fund or to permit acquisition of de¬ than the
original Treasury of
this, magnitude would be a
shall consist of, but is very in¬ posits, securities or invest¬
plan did. The proposal of the
pretty big pill for an exchange
definite as to what the liabili¬ ments by nationals of any
original plan was that the
stabilization fund of five bil¬
ties of the Fund shall be. One member country
imposing re¬ new international institution,
lion, dollars to swallow. Thp
feature of the plan, however, strictions on the export of should take over the blocked
Bancor fund of Lord Keynes'
suggests strongly that there capital, and to make available balances from the creditor
must be Unitas deposits. Sec¬ to the Fund full information countries, and give them im¬ proposal could easily swallow
blocked balances of this mag¬
tion II, 3 (a) (iv) provides that as to deposits, securities and mediate cash, without
requir: nitude because all it would
"a. member country may in¬ investments of the nationals ing the debtor countries to
pay
have to do would be to ex¬
clude in the legal reserve ac¬ cf member countries impos¬ immediate cash.
The Fund
pand, giving new Bancor de\
was to hold these for 23
count and in the published ing restrictions.
This again
years,
posits, against
the I blocked
statement of the reserves of means a drastic control of all with amortization beginning
balances absorbed. But if the
gold and foreign exchange in private transactions in foreign at the end of three years,
Fund as Contemplated by. the
would, reduce
its Treasury or Central Bank exchange and other interna¬ which
the
United States TeasurV is no't
-7nr.r7's holdings
an amount not to exceed its tional transactions.
by 80% at to have deposits in
Unitas, but
'bp
nf 23 years.
The United States Treasury
gold contribution to the Fund,
is only to buy and sell foreign1
J "wotested against this as a
minus its net purchases of Plan
goes on the assumption
exchange or other assets for
aevic
for
transforming Britforeign exchange from the
2This
that the Fund is
United
States,
.
,
.
Fund raid for with local
rency."
If the legal
cur¬
designed to give
monevs,
reserve
and
deteriorate.
that
up
its
cash, it could exhaust its cash,
primarily
good moneys for bid
assets
would
'
rapidly
•->«-
T,"it;sh
tion
33.
vs.
Information
*priL8,1 including
Services, Sectaking
care
its
gold,
without
of all the blocked
/
Keynes
But
sleight of hand is not
typically English, and as the
British" have thought about
the matter, British opinion
with respect to it shows signs
of changing. This is strikingly
in
evidenced
the
Economist
from, which
article
I
have
taken the
foregoing figures.4
Referring to the Keynes plan
for having these taken over
by the international fund; the
Economist says: "Coming
from the
principal debtor; this
is
perhaps asking rather a; lot.
The suggestion is certainly in
keeping with the professedly
expansionist trend of the
Keynes scheme.
But more
than any other proposal in
that scheme, it seems calcu¬
lated to
frighten and deter the
likely surplus countries on
which the immediate task of
liquefying these debts would
The^White scheme, how¬
fall.
is hardly less helpful to
ever,
debtors
the
wartime
owing abnormal
balances.; It goes into
much greater detail "* * 5? but
ultimate
the
same."
may
effect
is
the
adds:
"It
'
Ecovomist
The
.
.
means
The London Economist
seriously be nuestion°d
whether this 'global' approach
to
the
problem of abnormal
balances,—which in subst^noe
is the
problem, of sterling bal¬
ances—is the correct one."
proposes
It
instead.that, particu-
JThat of Aug.
7,
1943.
Volume
Number
158
THE COMMERCIAL & FINANCIAL CHRONICLE
4238
larly - In view of the diverse world, - and she must also
the havd flexible prices so that
problem "could best be tackled she can adjust herself quickly
character of the balances,
•
2425
in the world's
export markets fluctuating * currency and a sterling so that it is no longer
world prices and costs re¬ fluctuating tate of exchange of real use iri financing trade
ceded in the great depression. for that currency in the for¬ with or among outside, coun¬
as
by separate agreements with to variations in the world's England was shot through, not eign exchange markets was
each country concerned." The markets. This means that she merely with powerful labor developed. England has tried
Economist contends that the must have flexible costs at unions which held to fixed this method pretty thoroughly.
solution is to be found in a home. She must have prices wages, but also with price fix¬ She has seen sterling wrecked
post-war increase of British and costs which rise with the ing agreements among the in¬ by it. She has seen it generate
She had lost her an immense body of "hot
exports,, with a tightening of world markets and which de¬ dustries.
the belt, adding that this will cline with the world markets. flexibility; It was in this path¬ money" jumping into and out
It was the rigidity of British ological British economic situ¬ of England with every pros¬
require fair access to the mar¬
that the
pathological pect of a change in the price
kets of the world, especially wages and prices in the 1920's ation
She has finally
of the new creditors, for Brit¬ and in 1930-31 which made Keynesian doctrine of offset¬ of sterling.
Britain lose disproportionately ting internal rigidity by a seen herself obliged to block
ish exports.
-
This
She has
seen it
split the
Empire into separate
currency areas, with sterling
valid only in England itself.
She has followed Lord Keynes
British
in the belief that
a
low rate of
interest at home is
im¬
more
than a dependable
sterling in world trade. I think
that she will have hard going
portant
(Continued
on
page
2426)
old
the
is
tries.
England
talking. This is the sound fi¬
nancial thinking of preKeynesian England. An Eng¬
land which talks in this way
rest
may
her
outside will show
every
will
give
mate
that the finan¬
sure
cial world
consideration and
every
legiti¬
her
financial
sound
assist¬
ance.
y
Post-War British
:
.
How would you come out.
Policy
This sound financial assist¬
ance
of
should
come
..
in the form
long time investor's money,
not in the form of
of
sion
of
or
an
bank
reserve
operations of
expan¬
if
money,
our
stockholder died?
a
ex¬
change stabilization fund
which increase the volume of
bank
in
reserves
States.5
the
United
We tried that
sleight
of
helping England in 1927, when
Governor Benjamin Strong
and Governor Montagu Nor¬
man, following the Conference
hand
of
for
the
purpose
CORPORATION STOCK
A
RETIREMENT PLAN
of Governors in New York in
financed
the
of 1927,
prevailed
upon the Federal Reserve Sys¬
tem to expand credit in order
to tide England over the au¬
tumn; with devastating results
to us and England in the pe¬
riod that followed.6 But Eng¬
land can have help from Amer¬
ican investors in tiding over
summer
smooth
insurance
life
by
of
passage
from
resulting
emergency
will
death
the
the
assure
through
business
your
the
of
a
stockholder.
this
Under
the
their
the
holdings.
the
Each
in
value
the
for
of
that
in
agrees
death, his stock will be trans¬
of his
to
ferred
her difficulties when she takes
insured
are
respective
event
the lives of stockholders
plan,
corporation
stockholders,
surviving
heirs will receive
and
his
the proceeds of the insurance.
the attitude of The Economist
to
if
she
leaves
Britain's
post-war
resources
in meeting a radically altered
balance of international pay¬
ments will
the
business
stockholder
deceased
The
survivors,
their present holdings,
can
whose
in
increased
are
pro¬
continue
without embarrassment.
A
sterling
floating, or adopts an ambigous policy of temporary gold
stabilization with the way left
open for future reductions in
the gold content of the pound
I may add, too, that one of
to
portion
the
of
heirs
compensated.
in
interests
anchors sterling soundly
gold, than would be the
case
fairly
are
part of the loan agreement,
she
the
Thus
of August 7. I may add that
she will get this help at much
lower rates of interest if, as
We
in
.4
your
A
own
with
to
you,
a
isn't
as
it?
Yet
what
its neglect.
from
come
that
thought
hand
be
have
suggest
serious
for
arrangement,
simple
misfortunes
a
Stock
stockholder,
give
Retirement
Plan
business enterprise.
It goes hand
efficient management.
Massachusetts
Mutual
representative
will
glad to give you full information.
be to rebuild her
great re-export business, her
world-wide
insurance
busi¬
and
ness,
her
international
of
financing
and
world international trade
security
trans¬
I
actions, and that for these,
believe, not merely a free ster¬
ling but also a fixed gold ster¬
ling will prove essential. I may
add, too. that • the Keynesian insistentence that there
should
be no reduction in
money rates
of wages in Eng¬
mustv{ be
land
abandoned.
adequate
volume, must export goods
which ill price and quality
compare
fairly with goods
Britain, to export in
produced
^ee
•'■See
)
'
elsewhere
in
*
speech of May It.
The Chase Econom'c Bulletin,
the
my
1927;
hane
1929;
Nov
4 find June
22, 1929.
.
25,
Oct.
1928; Feb.
'
•'
LIFE
INSURANCE
Springfield,
Bertrand J.
COMPANY
Massachusetts
Perry,
President
; f
rfrri
< !
?
•
The
problem of dealing tional /Stabilization; F u n d
Germany after the pres¬ which Thave been discussing, •
largely exhausted, stocks of
goods in the country ,.,were ent war is, of course, a special1 Which is/to have a minimum
;
very low, and there was wide¬ case/ but in facilitating the capital of 5 billion dollars.
spread unemployment. Under restoration of countries like /'/ This second world bank is
these
conditions,
Germany Denmark,- the. Netherlands, designed to be an investment
readily consented to a plan France,, and Norway, where bank to provide long credits. >
which separated the Reichs- presumably intergovernmen¬ It starts out with the sugges¬
bank from government con¬ tal debts will make no com¬ tion
that/its/role is to be a
trol, which created a balanced plications,-small loans of this modest one, that it is to en-,
budget, and which allowed a kind, properly conditioned on courage / p r i y a t e financial ital of the industries had been
Post-War
Foreign Exchange Stabilization
Farther Considered
(Continued from page 2425)
post-war period unless sible to get out of this cycle
once you get into it? We have
policy.
an answer in the experience
South African Gold
of Austria. Austria also went
There is one factor in the into standstill, blocked for¬
in the
she reconsiders this
picture which may eign balances, and strict ex¬
sterling blocked change controls in 1931, and
balances
a
less formidable Austria returned to a free ex¬
British
make
Thursday, December 16,1943
THE COMMERCIAL & FINANCIAL,CHRONICLE
2426^
these
thing that the figures given change in 1934. The differ¬
It may ence was not that Austria was
above would indicate.
with
sound internal finances, in¬
agencies, but when necessary
cluding the gold standard, and will cooperate with and sup-,
foreign control of certain; of. including firm discount rates piemen/; private capital, and;
her taxes.
;'/;-■.'//'/'•////"': ,/;// when necessary to protect the for, this/modest purpose it
of
measure
foreign supervi-.
sion of the Reichsbank and
a
1
The problem was/compli¬ gold standard, should easily needs
significant that The Econ¬ financially stronger than Ger¬
only ten billion dollars,'
given above does many. The difference was that cated, moreover, by the prob¬ do the job.10 The governments 20%; of which is to be pro- *
not
include
South Africa. Austria preferred freedom of lem of reparation payments, can then use the proceeds of vided at the beginning, with/
There is reason to believe that exchange and commerce and and the plan was much more the loans (a) in putting ade¬ not over;20% to be called for;
there were some blocked bal¬ worked
toward
it.
Italy's drastic than would have been quate gold into their central in any one/subsequent year.;
ances owned by South Africa problem was complicated by necessary if the reparations banks and (b) in using their
Now L regard this as highly
currencies,
obtained unrealistic. In the first
at the end of 1941.
South Af¬ the Ethiopian War. Austria factor had not been involved. local
place,/
rican
Ger¬ The loan gave Germany/ no from the central banks in ex¬ we must speedily pull up, in
gold production has, had no such problem.
doubtless, continued during many's problem was compli¬ money to spend at home for change,; for: domestic
pur¬ the interests of our national'
the war, but what has hap¬ cated by a government which domestic purposes. The Ger¬ poses.
/ ' ../■%; solvency, from using billions;
pened to the gold is not clear loved control, which deliber¬ man Government borrowed .!;, I said in the speech of May of dollars of money borrowed
The annual volume of gold ately sought Autarchie, and two hundred million dollars 11th that a great deal of im¬
by the ' Treasury from the
produced in South Africa was which in the latter years of which it placed in the vaults mediate help would have to be banks. Presumably- our Treas¬
$425,649,000 in
1938, and the 30's was deliberately plan¬ of the Reichsbank in gold. In given by the United States to
ury could put 3 1/3 billions of
South Africa could increase ning war and seeking self-suf¬ exchange,
the
Reichsbank the most stricken countries of dollars into such a fund in the
be
omist's table
.
substantially by utilizing ficiency for war.
Austria,
high grade ores. Certainly financially and industrially
this gold has not been coming weaker, but turning toward
to the United States in the orthodox financial and mone¬
this
gave
her
eight
the German Government Europe the moment the war
hundred millions : of ends, but that we should be
Reichsmarks
in
bank//notes under
no
illusions
as
to get¬
next few years,
other
come
6
2/3
from
and
but where the
billions would"
is highly prob¬
deposits. But the German ting this money back. This lematical. How much spare/
last two or three years.
To tary policy, achieved a free Government was obliged to help should be gifts, not loans. cash
will/England have in the
what extent it has been avail¬ exchange and maintained it use this eight hundred million It should be handled on Red
next few years to put into
able to England has not been from 1934 until she was ab¬ Reichsmarks in making pur¬ Cross lines. It should be lim¬
such a fund, internationally'
made public to my knowledge, sorbed by Germany in 1938.7 chases in Germany of goods ited to what is strictly neces-:
valid cash, taking into account
for delivery in kind to its for¬
though the Bank for Interna¬
sary. / Ih general, it should not her own blocked balances?
A
Constructive Program of
|'
tional Settlements in June,
eign creditors on reparations extend beyond the next har/
Post-war Currency and Fi¬
/ / But, second, to put the thing
1942/ suggests that it has been
account,
and, ' indeed, / was vest.T It should be accom¬
in the proper perspective, how/
nancial Reconstruction
sold to England. What Eng¬
obliged to provide an;, addi¬ panied, moreover, by demands can the/stricken countries of
The Chronicle has asked me tional
land may have given South
200
million / Reichs,- made upon the governments
Europe/repay gigantic loans
Africa in payment is not clear. to elaborate some suggestions marks. The loan thus did not
of?the;stxiikeh CounM
made by private agencies/sup¬
This gold was regularly sold made in my speech of May 11 help
the German//Govern¬ they-take steps to put their
in London for sterling in the as to a constructive program ment's budget and the/loan financial houses in order. The plemented and endorsed by
the modest ten billions of the.
days when sterling Was a free for restoring sound curren¬ did not give the German Gov¬ gifts as / well ' as the loans
world investment bank?.
If.
cies, and consequently fixed ernment anything to spend at should do the recipients per¬
exchange.
;,/
we
/are
to make
loans1 to
ll If we could look
rates,,* for
the home in relieving/ distress manent; good. The stabiliza¬
upon the exchange
Europe, they must; be good,
British Empire as a unit, the stricken countries of Europe/ among the people or-'in; sup¬ tion loans, im m o d e r a t e
loans.. We must not deluge"
I had urged that the effort to
Empire
would have
large
plying working capital for.the. amounts,; made as far as pos¬ them with funds for a
time,
stabilize, exchange rates along industries. //
/ /!%//%;:: U'L-j sible
liquid / resources. /Obviously
by ' private / investors then cease to lend them, and
the lines of the Keynes-White
we
cannot do so, since the
What the loan with the ac-/
through investment banking then : see them default upon
Plan would waste billions, as
gravest problem in England's
companying conditions did do houses rather than by our what we have lent.
They must!,
blocked
balances
is
the we saw in 1919-20 when we was to give Germany a sound Government, should follow as
repay / borrowings
made by.
I had gold currency which "the peo¬
blocked balances held by In¬ tried a similar thing.
speedily as possible.
./;.j/;/ / / their
governments (a) by creat¬
instead that we ple of " Germany / and/': the // In the midst Of the swirl of
dia. But there is evidence that proposed
ing fiscal surpluses, excess of
some
of this South African make relatively small loans to people of the world /outside
many tens of billions of our taxation over Government ex-:
each country separately/ tens
trusted, and a balanced bud-, wartime
gold, at least, is currently be¬
budget,; the figures penditures, which fiscal sur-!
of millions/up to two hundred
get, indeed an over-balanced of tens of millions: and„ even
ing used on British Govern¬
pluses will exist in the form,
ment account. The Wall Street millions,8 conditioned on dras¬ budget based on a drastic in-;
two hundred millions/ which
of domestic currencies, and (b)
Journal of Saturday, Nov. 13, tic financial reforms in the crease in taxation. The /Dawes
I .am talking about, look very
by transforming, These fiscal!
worked. /Germany
reports that South African borrowing countries, would Plan
small and insignificant. / It is
surpluses^ into -. foreign ex-/
really create sound currencies started, almost immediately, evident
gold is being used both in In¬
./that our Treasury is change by giving their foreign/
dia and in Persia. In India it and sound internal finances, a
strong upward • move :-'in .thinking in very miuch larger
creditors/ more goods and ser-Z
is pulling down the price of generate
industrial revival, b u s i n e s s which//speedily'
lqfms///Uhder/date: of Oct. 8, vices, thart they receive from
and as part of it, give foreign reached boom
intensity. /%%/ 1,943
gold in terms of rupees/ and
/(New York Times, -Oct. /them,;/ T|iey must; pay with
it is also inducing the natives exchange stability, as we saw
Inadequate working Capital 9,1943) the Treasury released
hams,!, with cheese, with hot/
to give up hoarded foodstuffs in the case of Austria in 1923, and a variety of other factors
the "Guiding Principles for a ties of
wine, with optical/ in¬
and Hungary in led to a sharp crisis. in the Pro
to relieve the Indian famine. Germany
p o s e d United Nations struments/with bolts of cloth,
1924, and Poland in 1927.
winter of 1925-26 from which,;
Bank for Reconstruction and with
widely diversified manu-'Z
Austria's Return to a Free
The largest of these loans,
however, Germany9 /speedily
Development,'.', a world bank, factu.res of all kinds, with fine
the Dawes Plan loan of 1924
Exchange in 1934
recovered, returning to strong or a world RFC, which should
artistic /products, - with ship-,
/'■<. Is it possible for a country of two hundred million dollars activity in 1926, which con-/
have a capital of ten billion
pihg services, with the enter¬
to Germany, came at a time tinued into 1929.
with blocked exchange to re¬
dollars./ An AP; dispatch of tainment of tourists, and the;
turn to a free exchange? We when Germany was helpless,
If Germany
had had/'no Nov. 23 states that Secretary
like, in amounts exceeding!
the mark had sunk to a tril¬
saw
Germany, following the
reparations to pay, if the Ger¬
lion to one, the working cap- man Government could have Morgenthau has; given /Con¬ their imports of goods andstandstill of 1931, with the ex¬
gress an unofficial amplifica¬ services..
/. r/'//;'//; }
the eight hundred, mil¬
change control that accom¬
JThe fullest account of this episode that used
tion of this plan. I have not
I
know
is contained
in
the
Revista Di
When the matter is put in
panied the standstill, move Storia Economica (published in Italy, and lion of Reichsmarks internally 'the text of this statement, as
these terms, it is quite clear,
steadily toward a tighter and edited by the distinguished economist, in adding to the working cap¬ I / write. The Secretary is
Luigi Einaudi), December, 1937, in an arti¬
that loans of tens of millions,
tighter control of foreign ex¬ cle by Dr. Oskar Morgenstern. I have been ital of German industry. Cap-;
quoted as saying that ;after or at most two or three hun¬
able, to
get
some
further details from
change, with an increased banks and other sources. Apparently there portioned with the approval'
spending hundreds of billions dred millions, look much more
good deal of composition of the old
of the lenders), and in some
blocking of balances owned
for war, we should not balk
debt, and a gradual repayment of much
reasonable than loans of many
by foreigners, and /with the of it. New transactions became free. Dr. measures of relief, the prob¬ at
spending a few billions to billions. The small loans,
Morgenstern says that in 1937 there re¬
development of many differ¬ mained some "residues of surveillance on lem would have been far eas^
help assure peace and pros¬ moreover, made under proper,
ent kinds of marks, some of the part of the bank of issue, due to the
ier. And if Germany had had perity. This world RFC is to conditions with
fact that all institutions have a tendency
necessary for¬
which could be used for one to
perpetuate themselves,
and that the
be in addition to the Internabank
of
issue
is
interested in watching no
eign supervision,! will, as we
reparations to pay, she
purpose and some for another,
capital movements."
demonstrated in the cases re-,
would not have collapsed in
^The debasement of our own gold dollar
^"England may need several hundred mil¬
but; with ever tighter controls.
lions
of
dollars,
but
should not need ferred to above, restore their
that the(se amounts might have to
We saw Italian exchange in¬
1931.
be increased by 69^. if we .mean to put
billions, if she works out the problem of
currencies, restore their fi¬
blocked balances with her debtors sepa¬
creasingly controlled in the the equal number of ounces of gold into
f'See
The
Chase
Economic
Bulletin
of
central banks of the countries we are
rately, paying cash for a minor part, and
nances/and put them in a pogetting long credit for the major part.
April 2, 1926.
period of the 30's. Is it pos- aiding.
,
,
•
-
-
was
a
'
means
,
an
„
Volume 158
;
I do not feel justified at the
responsible - in
selve$.' :
~"■■>,A AAA their attitude toward; foreign preseht time in proposing a
loans than they were in /the definite demarcation of the
They will, moreover, create
latter part of the 1920's*
A. limits - between private and
an
atmosphere under which
Government lending to Eu¬
I am opposed to an inter¬
further private credit will
rope, when there is so much
investment * institu¬
come .to them, both bank credit national
uncertainty as to what Europe
for their commerce, and in¬ tion such as is proposed in
will look like when the war
Treasury statement of
vestment funds for their in¬ the
is over. I do believe that we
For one /thing, it -is
dustries. The Dawes Plan did, Oct. 8.
should* do it privately as far
in fact, give Germany so much open to the objection that the
as
possible. I think that Ger¬
credit in the outside world that control of it would be an
and perhaps Italy,
international control and not many,
she
very
greatly over-bor¬
must; be dealt .with by the
an
American
control, even
rowed, primarily because we
Government itself, if they are
were
over-expanding credit though America would be the to
get outside financial help
chief lender. I would say with
here and had too rnucn money
in the early post-war period.
this institution
to
lend.11 The total of all respect , to
VI think, too, that American
credits to the outside world what I said with; respect to
investment in Europe, follow¬
the
International / Stabiliza¬
ought not to I approach the
ing the 'initial stabilization
$1,100,000,000 per year which tion Fund, namely, that if we
loans, r ought, as far as pos¬
are
going to lend,/.let us do
we averaged in 1924-30.
A>
to be on the basis of
our own lending:' Let us not sible,
/ The question of how much
e
q u i t y investments rather
create a bank in which the
sition
take'
to
care
2427
THE COMMERCIAL 8c FINANCIAL CHRONICLE
Number 4238
of »them- be
far
more
.
Canadian Government Securities
,
our
must do
Government
in
providing financial aid to
Europe* and how much private
borrowers dominate the Board
I think it not im¬
than bonds.
possible/that well managed
companies, buying
This does not mean that our
investment banks, and inves¬
Government may not cooper¬ European/shares, diversifying
tors will and can do, is one
their
portfolios among the
that ought to have a great ate with other governments,
different:/ industries and the
but it does mean that, we
frank
of
deal
discussion.
of Directors!
should
with
re¬
v
,
to-
Wood, Gundy & Co.
x
Direct Private
A -A^vAA/AA.
•
recognition of the valuable constructive work performed by the Ca¬
delegation at the Hot Springs Food Conference earlier this
year;
*
the
opinion
that
change
very
can
related phases of the subject
Comments
be interested in the loan un¬ under discussion.
should
be
addressed
to Editor,
less such and such things are
Commercial and Financial Chron¬
done. In considering the uses
icle. 25 Spruce St., New York (8),
to which the borrowing coun¬ N. YA":' •
any
can
private investment
do a great deal.
banks
-
capital of private in¬
vestment banks in the United
The
bankers
,
would
have
realistic
more
view
would the Government.
The
American
far
a ;
than
.
■
-
\
investmenj;
great deal market is at present gravely
smaller than it was in the handicapped with respect to
1920's, but it would not be foreign loans by certain
difficult to bring new capital legislation*:, including / the
in if profitable business devel¬ Johnson Act and some rather
oped. .Foreign issues have humiliating provisions of the
been almost nonexistent in Securities legislation.There
the United States in. recent must be very important legis¬
lative changes before Ameri¬
years and new domestic capi-.
tal
issues A have
been very can private capital can' act
small. Our investment bank¬ adequately, in either .the;: for¬
ing - and
our • security
ex¬ eign; or the domestic 1 field.
changes.:, are both,: terribly There1 ought to be close co¬
over
regulated.
The chief operation ' between private
business of investment bank¬ investment bankers and. the
States today is
a
Reelection
Dowell,
of
President
.
dollar
improved sharply from 1114 % to
1014% discount.
be
lumber, and other es¬
commodities, which will
urgently needed after the
The Do¬
so
cessation of hostilities.
regard to the market as
whoLe, the general bearish
feeling
which,
recently
per¬
vaded all investment markets,
a
of huge export
surpluses,
especially of food,
forestry
products
and
base
metals; manpower shortage has
been the only impediment to
to the production
seems
to
taken
soon
as
tackle the great
a
problem of im¬
ing
riod
the
sides—from
the
or
it
that
rates at
after the
war.
confusing
ever,
it
the exist-
indefinite
As
likely
as
soon
period
end-year
is
,
pe-.
this
that
re-:
grade invest¬
ment markets.
Village
Idiot, on the back bench, from the
College Idiot on the front seat,,
from Labor
Capital.
more
.
a
all
from
a
conclusion
fleeted in all high
hundred
million than dissent, I say, arises
population of
to
improved sentiment will be
statement that Canada can easily
a
inter¬
post-war
led
level for an
.is
.made the
sooner
general
tain interest
"A"/;A;;/ A" / ./ V, /;
no
of
will still be necessary to main¬
known Canadian writer and econ¬
carry
subject
less
,
"One has
just around the
war
rates has
est
Canada's ability
to provide richly for a greatly in¬
creased population, it.is interest¬
ing to quote the recently : ex¬
pressed views on this subject of
Dr.
Stephen Leacock,' the well
;
outlook.
but more significantly,
little fundamental thinking on
the
With regard to
...
optimistic
corner,
migration.
omist: "
gradually changing
longer do investors see the
end of the
steps will be
as practicable to
that
hoped
to be
more
a
No
still greater efforts, and it is to
be
"free" market
in the
With
minion has always been geared
the floor and from
on
"All/ these
Canada Bans Wage
Rises For Duration
order
An
the platform.
on
rest
objections
on
the
war
was
further
in Canada during
prohibiting
raises in wages
issued in Canada or»
misinterpretation, an historic er¬
ror and a failure to appreciate the
Dec. 9.
great changes now bringing about
a
shift of the population of the
equality or gross injustice" and
then only in cases where the em¬
ployer is able to pay an increase
without raising prices.
The purposes of the order are
set forth as follows, in an Ottawa
gions.--.'
.' ■
"The whole scene
is
lusion—Canada
ever
.
is sheer il¬
empty as
as
still
almost;
—
order
northern re¬
the
towards
globe
abundant
York
life and all that makes it sweet,
To
people—serene
Mc¬
Mc¬
plain,
and
rivers
forest—nature's temple, where we crowd
murmuring
:
uncounted
sky
for
here
of
empty
and
the
in
the
round
wrangle
trances." ■/<"
en¬
'v
The only exceptions to
are
dispatch
opportunity—
abundant
room,
waiting
the
of
;
the internal issues and the Cana¬
the production
up
v.-"
<£>
dian
and
B.
Harry
so
sential
millions
Cleveland Reserve Bank
can
of food,
rapidly with respect to for¬
eign obligations in thei United
States if we get a good peace, try should put the proceeds
of the loan, moreover, the
and
that
Reelected Director Of
private investors
and
'4
" 4 ■
country
other
quickly step
\
.
'
■
No
and
The 0 investment
Netherlands, Britain, and different.
years by virtue of that fact.
probably of France, with the banker; is not lending his own
Finally, we can do nothing
American public,.-and he be¬ money. He is advising the
financially sound to help Eu¬
lieves the public would take foreign A government .as Vto
rope with credit unless we
them if they were made in the conditions under which
lower our tariffs, and make
American investors will take
proper amounts
and under
it easily possible for Europe
proper
conditions.
But he the foreign loan.; He does not to repay with goods. A
would leave the financial re¬ have to make demands. It is
The CHRONICLE invites com¬
habilitation of Germany and sufficient for him to say with
ments on the views expressed by
great courtesy that he fears Dr. Anderson in this article, or on
Italy to the Government. An¬
expresses
sentiment
By BRUCE WILLIAMS
nadian
different .countries of Europe,
not
Toronto & Montreal
to
of the Canadian delegate to the chairmanship
of the Committee on Supplies of the UNRRA signalizes the impor¬
tance of the Dominion in the immediate post-war period. It is also a
the
banker American investors would
Wires
The appointment
.
other able investment
Street, New York 5
Canadian Securities
V
might be able to accomplish a
great deal. They would seek
There are
many
reasons venture
capital, and they
good deal to do with placing why private capital rather should frankly let their share¬
loans in Germany and Italy in than
government
funds holders know from the begin¬
the 1920's, as a result of which should do the work as far as
ning/that the future offers
he acquired a great deal of possible. One of them is that
the : possibility of losses as
if a government insists upon
bitter experience and also a
well as of profits.
In bad
financial reforms on the part
great deal of knowledge, says
years dividends from Euro¬
of another government, a dip¬
quite frankly that he cannot
pean shares would be heavily
convince' himself
that ; he lomatic issue is created which cut. In
good years they would
would be - justified in again may;, be
difficult. / * But A if rise. H;
Europe would- not be
investment bankers are deal¬
offering to clients German or
faced /with default
in bad
Italian bonds. He would, how¬ ing 1 with a foreign- govern¬
years
on such investments,
ment which needs To, borrow
ever, undertake to place dollar
and the A investments would
very
bonds of Denmark,; Norway, here,; the t problem. • is
themselves be safer over the
spect to this point. One espe¬
cially able banker, who had a
money.
Incorporated
14 Wall
investment
negotiate
Guaranteed Obligations
External <6: Internal Payment
capitalized in this country
conditions «when with common stock
only,
our
Government's
lend
we
free
be
sought the opinions of a
limited number of good in¬ regarding
bankers
..
"
I
have
vestment
A'A;/;
Direct &
will
in
of
of
cases
Dec.
9
to
"Times":
the
"gross in¬
New
the
/
•
.
>'
provide for wages in which
incorporated the cost of
be
living bonuses granted under the
old system, to stabilize
and maintain stability
the wages
in
prices
cost of living;
to provide machinery for an or¬
derly rectification of any gross in¬
and in the general
Dowell National Bank of Sharon,
Turning to the market of this equalities in wages so established
Secre¬ past week, although there was no "in so far as this is possible con¬
sistently with the paramount prin¬
tary-Treasurer of the Reed Man¬ improvement price-wise, never¬
ciple of the maintenance of sta¬
ufacturing/Co. of Erie, Pa., as Di¬ theless/there was increased activ¬
bility in prices."
rectors
of the
Federal Reserve ity and a less bearish atmosphere.
Employers are required under
Direct Dominions were virtually
Pa., and Ross P. Wright,
the new order to establish basic
small turnover.
active and wage rates for employees by in¬
cluding
in
existing
authorized
Chairman of the Board. Mr. Mc¬ were finally quoted fractionally
basic wage rates the amount of
higher.
Ontarios and Quebecs
Dowell, .unopposed, has been a
the
authorized
cost
of
living
were marked down slightly again.
'Director since Jan. 1, 1938.
The amount of these
He The demand which had persisted bonuses.
continues as a Class A Director, over a long period produced so bonuses is to be added to the basic
little volume that attention has wage rate and the new rates are
representing small banks in the
switched to other provincial is¬ to be established Feb. 15.
Fourth Federal Reserve District.
sues, especially Nova Scotias and
Mr; Wright has been a Class B
New
Brunswicks,
which have
Pay On Cuban 5V2®
Director,'representing small busi¬ been
recently
absorbed
on
a
J. P. Morgan & Co. Inc., as fis¬
ness
on
/ the
Federal Reserve fairly large scale.
cal agents, have drawn by lot for
British Columbias were dull and
Government in the placing of Board, since Jan. 1, 1917. William
redemption on Jan. 15, 1944, at
the 4*4s of 1957 were in supply
foreign loans in the United C. Arthur, President of Talon, at a 3.45% basis. Manitobas also par and accrued interest $950,000
States.
The
Government Meadville, Pa., and a Director of were a little lower with the 4V2S principal amount of Republic of
Bank of Cleveland was
on
announced
Nov, 23 by George C.
unchanged
Brainard,
Nationals
on
a
were
quite
.
.
-
has been in refunding
and the need for in¬
vestment banking capital has
ing
issues,
been
ment
greatly reduced. Invest¬
bankers will * certainly
should
power
The
Chase
Economic
to
the
definite
veto such' loans—
indeed
and
"See
have
the
investment
Bulletin,
banking community ought to
Aug. 1924. Aug. 1925, Oct. 1927, July 1929,
Marc".. 1930.
Oct.
1931.
See, also, the welcome such a
power on the
warnings against the cheap money policies
System in the edi¬
torials of the Commercial. and Financial
Chronicle, during this .same period.
'of the
Federal Reserve
part
its
of the
own
Government
protection.
for
,
.
the
Pittsburgh
Branch
of
the
land
since
nated/to
last
run
May,
was
1956
of
offered
at
10414.
Sas¬
katchewan and Albertas were
Federal Reserve Bank of Cleve¬
active
nomi¬
against Mr. Wright.
,
and
prices
were
in¬
and
Mr. Wright are
slightly loan contract dated Jan. 26, 1923..
of 1960 Payment will be made on and
5.60%, after Jan. 15, 1944, at the office
77—78.
ending Dec. 31, 1946.
sink¬
under
lower; Saskatchewan 414 s
were offered at a yield 'of
Terms of both Mr. McDowell and
for the three years
Cuba external loan 30-year
ing fund 5*4% bonds issued
Albertas
There
5s
were
quoted
of J. P. Morgan
was
an
improved tone in
York City.
"
& Co. Inc. in New
THE COMMERCIAL & FINANCIAL
2428
F.
136
Text 0<
Opinion Of U. S. Circuit Court Of
Appeals In Case CI Hnghes vs. SEC
'
-
(Continued from page 2418)
Commission, entered July 19, 1943, under §15 (b)
Act, 15 U. S. C. A. §78o (b), in which petitioner's registration
broker and dealer was revoked. The order developed from a
of that
as
a
to determine
proceeding which was instituted by the Commission
whether or not oetitioner had willfully violated §17 (a)
of the Securi¬
1933," 15 U. S. C. A. §77q (a), andJIS (c) (1) of the Securities Exchange Act of 1934, 15 U. S. C. A. §78o (c) (1). Two hearings
were
held on the matter before a trial examiner, who filed-an
advisory report recommending revocation, Exceptions, briefs, and
oral argument were presented to the Commission^ which then filed
its findings and opinion and entered the order under review.
j
Petitioner was incorporated on April 9, 1940, under the laws of
New York, and maintains its principal office and place of business
in New York City.
It is engaged in over-the-counter trading in
securities as a broker and dealer, being registered as such with the
Commission under the 1934 statute cited above. The dealings which
resulted in the revocation were continued sales of securities to cus¬
tomers at prices.very substantially over those prevailing m the overthe-counter market, without disclosure of the mark-up to the custom¬
ers. Th< Commission concluded that such practices constituted "fraud
and deceit Toon the customers in violation of §17 (a) of the Securities
Act, § 15 (c) (1) of. the Securities Exchange Act, and its own Rule
ties Act of
!
-
the claim of vagueness^
Under the
1933 statute it was made
Ct.
56. ,,-As for Rule
This similarity makes the first claim
.the violation of that section
on
House
Group Kills
iBkJf
United States,-9-Cir.; 88 F;-2d 652,
v-
appear
be based
.
alone.
/./
■;
.
Legislation
authorizing
paid
advertising
by
the
Treasury to promote the sale of
war
bonds
was
killed
by
the
newspaper
threefold violation of
There is evidence in the record to show a
House Ways and Means Commit¬
obtaining of money "by means tee on Dec. 8. By a vote of 11 to
of any untrue statement of a material'fact"; the "omission to state 10, the Committee tabled
three
a
material fact" necessary to make statements actually made- not bills which called for expenditures
misleading; and the engaging in a course of business which Operates of up to $30,000,000 for such ad¬
"as a fraud or deceit upon the purchaser."' It is true that the only vertising;/;
;"■'/// ' ; ./i
specific evidence of false statements of a material fact is that of Mrs. ; The Treasury had opposed the
Furbeck that the sales price was undei; the market price; and, as legislation as' a subsidy and as¬
we
have noted, "these statements were, denied by the salesmen. serted that it would interfere with
Although the Commission has neglected to make any. finding of fact the present program of voluntary
on this point, we
need not remand for a specific finding resolving advertising.
; ;
:
'.
'. ':
•' "
this conflict, for we feel that petitioner's mark-up policy operated
The Senate had passed a bill on
as a
fraud and deceit upon the purchasers, as well, as constituting Nov. 16 providing for a yearly ex¬
an omission to state a material fact.
-/
; /.
;' " ;
". -./
penditure of between $12,500,000
§17 (a) of the Securities Act, viz., the
.
.
,
An
over-the-counter firm vvhich actively solicits customers and
then sells them securities at prices as
which petitioner
those
It holds
fraud.1
far above the market as were
charged here must" be deemed to commit a
the premises,
itself, out as competent to advise, in
and
in
$15,000,000 for advertisements
daily, weekly/semi-weekly and
tri-weekly newspapers published
in cities having population of not
than
more
1
The
Commission
points out that the National
Association of Securities Dealers,
organization registered under §15A of the Securities Exchange Act, of
which petitioner was a member at the time of the transactions in question, has
a
rule limiting mark-up prices in over-the-counter securities to those which are
fair, and calls attention to a decision of the Association's District Business
Conduct Committee reported in the NASD r*iews for October, 1943, imposing a
fine of $500 and censure upon a member found to have violated rules of the
Association by a practice of charging mark-ups of approximately 10 per cent
on
transactions in listed and unlisted securities.
It also cites a decision of the
Inc.,
interstate commerce or by use
an
Court, Sangamon County, Illinois, Matthews, Lynch & Co. v. Hughes,
June, 1939, sustaining the revocation of registration of a dealer who
"extremely high" profits, "running in one case to 25%/' and a similar
Circuit
No. 76441,
took
interpretation
C.
1
C.
H.
of the
Stocks
Ohio
Act by the
Securities
Bonds
and
Ohio Securities Commission,
Law Serv., p. 3$31.
j
if sales
and it should disclose the. market price
.
'
v
to be made subs¬
are
This bill, to¬
10,000/
gether with two House bills au¬
thorizing the expenditure of $30,-
000,000
"equitably distrib¬
be
to
uted"
having
privileges;
were shelved by the Committee's
action.
/,/'
/; "/'/;,./;On
Dec.
2
Secretary of • the
Treasury Morgenthau assailed the
legislation as "a potential waste of
among
newspapers
second-class
mailing
funds"
Government
will
and
said
"it
Bonds." letter to Senator Byrd
Va,), Chairman of the
not help sell War
/In'
tantially above that level. Even considering petitioner as a principal
in
a
simple vendorrpurchaser transaction ; (andr there is doubt
whether, in several instances at least, petitioner was actually not
acting as broker-agent for the purchasers, in which case all undis¬
closed profits would be forfeited),. it was still under a; special duty,
in view of its; expert knowledge and proffered advice, not to take
advantage of its customers' ignorance of market conditions., The
;
key to the success of all of petitioner's dealings was the confidence
in itself which it. managed to instill, in the, customers.
Once that
was established, the failure to reveal the mark-up poc¬
must pay
confidence
both an omission to state a material fact and
fraudulent device.'- When nothing was said about market price/the
a
(Dem.,
Joint Committee
Reduction of
on
Federal
Non-Essential
Expend^
tures, Mr. Morgenthau called the
plan "a subsidy to certain small
newspapers," declared that "we
all or none," and added:
"I think this proposal to dis¬
would operate as a fraud or
or
tribute
amount
of
in such
sizable
a
a
the
keted by the firm was
taxpayers'
a
of business which operates
course
64. S.
frivolous, indeed, since no allegation is made that
§17 (a) of the Securities Act is invalid and since the revocation can
error
unlawful for any person in
of the mails
"(1) to employ any device, scheme, or artifice to defraud, or (2) to
obtain money or property by means of any untrue statement of a
material fact or any omission to state a material fact necessary in
order to make the statements made, in the light of the circumstances
under which they were.made, not misleading, or (3) to engage in
any transaction, practice, or course of business which operates or
would operate as a fraud or deceit upon the purchaser."
/,/■;
The 1934 statute forbade a broker or dealer to make use of the
mails or any instrumentality of ;interstate commerce to effect or
induce the purchase or sale of any security, otherwise than on a
national securities exchange, "by means of any manipulative, decep¬
tive, or other fraudulent device or contrivance. The Commission
shall, for the purposes of this subsection, by rules and regulations
define such devices or contrivances as are manipulative, deceptive,
or otherwise fraudulent."
Acting under this rule-making power the
Commission"adopted its Rule X-15C1-2, which gave two definitions
of the statutory term "manipulative, deceptive, or other fraudulent
device or contrivance,", viz., (a) "to include any act, practice,: or
Coplin
certiorari denied 301 U. ,S. 703.
'
the sale of securities in
231, .240, .certiorari, denied
X-15C1-2, its words are almost identical with those of §17 (a) of the
Securities Act, a section which has already, been sustained as against
of
ties and Exchange
2d
Thursday, December 16, 1943
CHRONICLE
that it will not contribute to win¬
money
way
(b) "to include any untrue statement
material fact necessary natural implication Tin the untutored minds of the purchasers was ning the war, or to any legitimate
that the price asked was close to the market. The law of fraud knows requirement or our economy, is
in order to make the statements made, in the- light of the circum¬
:
>
mo
difference between express representation on the one hand and inexcusable.
stances under which they are made, no,t misleading, which statement
"It is likely to prove an almost
implied misrepresentation or concealment on the other. Strong v.
or omission is made with knowledge or reasonable grounds to believe
Repide, 213 U. S. 419, 430; United States v. Brown, 2 Cir., 79 F.,2d 321, insurmountable hurdle to the con¬
that it is untrue, or misleading," and which provided in (c) that the
certiorari denied 296 U, S. 650. "The best element of business has tinued promotion of War Bonds. ;
scope of this rule.should not be limited by definitions of the term
long since decided that honesty should govern competitive enter¬ >; "As you know, we now depend
contained in other rules of the Commission.
/
upon cooperation by advertisers,
Petitioner's dealings which are here in question were carried prises, and that the rule of caveat emptor should not be relied upon
deceit upon any person," and
of
a
material fact and any omission to state a
.
out by various of its customers' men.
The customers were almost
entirely single women or widows who knew little or nothing about
securities or the devices of Wall Street. An outline of the sales plan
used with Mrs. Stella Furbeck gives a representative picture of how
petitioner
name
her
of
Stillman,
worked.
a
Co. agent, having her
Hughes &
The next day he called again, and he per¬
she was not interested.
sisted
a
prospect, called Mrs. Furbeck on the telephone and told
"wonderful" stock that she should buy. She replied that
a
as
his calls
in
relented and made a purchase.
until she finally
he and a co-employee of his, one Armstrong,
completely into her confidence that she virtually
placed complete control of her securities portfolio in their hands.
From
that
time,
on
worked their way so
Every few days one or the other would have another "marvelous"
buy—one that was definitely "beyond the usual"—and she would
add it to her collection, selling a more reputable security in order
to finance .the transaction.
; //'
A
:
reward
to
fraud
and
deception."
Federal Trade
116.
Commission
v.
Standard Education Society, 302 U. S. 112,
We
fraud
has
need
was
been
not
shown.
stop
to
however,
decide,
how
far
common-law
For the business of selling investment securities
considered
one
peculiarly in
need
of regulation
for
the
protection of the investor. "The business of trading in securities is
one in which opportunities for dishonesty are of constant recurrence
and ever -present. It engages acute, active minds, trained to quick
apprehension, decison and action." Archer v. Securities and Exchange
Commission, 8 Cir., 133 F. 2d 795, 803, certiorari denied 319 U. S.
767. The well-known "blue sky laws" of 43 states have in fact proved
inadequate, so that in 1933 Congress after the most extensive investi¬
gations started on a program of regulation, of which this is one of
the fruits.
In its interpretation of §17 (a)
Commission has consistently held that a
not
of the Securities Act, the
dealer-cannot charge prices
reasonably related to the prevailing market price without dis¬
See, among others, Duker & Duker, 6 S. E. C. 386;
Jansen and Co., 6 S. E. C. 391; W. K. Archer & Co,. SEA Release No,
3253; Theodore T. Golden, SEA Release No. MO^ Guarctnty Under¬
writers, Inc., SEA Release No. 3481. Had we been in doubt on the
matter we should have given weight to these rulings as a consistent
of the
price paid to market value. She claims that every time she made
a purchase it was directly induced by the statement that the price
would be under that current in the over-the-counter market, while
they deny such statements completely. It is unchallenged, however,
body.-
any
prices
direct representations
to
of
Mrs. .Furbeck
the relation
without
provide,
cost
the
to
Treasury, the huge amount of ad¬
vertising space and time required
to reach and convince 130,000,000
people.
"By this means we are amply
reaching all the important mar¬
that
kets
available
be
would
The added
impact, if there is any, would be
through this subsidy*
of
value."
doubtful
Passage
in
noted
page
of the Senate bill was
these columns Nov. 25,
2119.
//::/;;'•
.
/.
closing that fact.
which Mrs. Furbeck and other customers paid for
the securities purchased in this manner ranged from 16.1 to 40.9
per cent over market value.
In addition, most of the transactions
involved little or no risk for petitioner, because an order was usually
confirmed before it bought the securities that it was selling. There
is conflict in the record as to whether Stillman and Armstrong made
The
and the ad¬
generally to
publications, radio
industry
vertising
and
contemporaneous construction of a/statute by an administrative
United States v, American Trucking Associations. Inc., 310
S. 534; Gray v. Powell, 314 tf/S, 402. As we have hitherto said
"the peculiar/function" of the Commission: "One of the principal
U.
of
reasons
for the creation of such
bureau is to
a
secure
the benefit of
War Bond
Redemption Up
increase
An
demptions of
in
cated
in
war
the
of
rate
re¬
bonds was indi¬
In
November.
the
first
25.days of November $648,950,914
worth of Series E, F and G war
bonds
was
sold, but $146,740,284
were
Worth
redeemed.
In reporting this United Press
special knowledge acquired through continuous experience in a dif¬
ficult and complicated field.
Its interpretation of the act should Washington advices of , Nov. 29
■
:
*''■
control unless plainly erroneous." Securites and Exchange Commis¬ further said:
market price of any security to Mrs. Furbeck or the fact that peti¬
." ' Redemptions iii 'dollars are not
tioner's profits averaged around twenty-five per cent. Similar evi* sion v. Associated Gas & Electric Co.; 2 Cir., 99 Fl 2d 795,' 798. But
much/higher this month than in
deuce as to other customers all damply furnished the "substantial we are not content to rest on so. colorless an interpretation of this
September, and October, but in
•' /.'-'J.]'.■[-;',W'<]■■■ /„,,/'
evidence" required by the statute to make conclusive the Commis¬ important legislation. - '///,
those
two
months
sales ' were
sion's findings "of a course of business by petitioner to sell at excessive ■//' The essential objective of securities legislation, is to protect those
who do not know'market conditions from the overreaehings of those higher in; reflection of the war
mark-up prices without disclosure of market values to its customers.
loan drive;"'?■ ,'
:'/,•' " ■;."\
Securities Exchange Act of 1934,; §25 (a), 15 U. S. C. A. §78y(a); Who do. Such protection wi'U mean little if it stops short of the point
of ultimate consequence, namely, the price charged for the-securities. X Since' July 1 redemptions have
Wright v. Securities and Exchange Commission. 2 Cir., 112 F. 2d 89,
Leen! running at the rate of about
134 F. 2d 733.
••;///■
■ A' ■
/:/:
.V'.V/'y ; Indeed, it is the purpose.of all legislation for the prevention of fraud
Petitioner
challenges the order -on three grounds: (1) that in the sale of securities.to preclude the sale of "securities-which are 13% of total.sales, compared with
in fact worthless or worth substantially- less than the asking price." an average of 3Vz% for all.of,the
§15 (c) (X) of the Securities Exchange Act is unconstitutional because
Peovle v; Federated Radio Corp.,; 244 N. :Y, 3.3, 40, 154/N. E.'655, 658.
of an unconstitutional delegation of legislative power and that S. E. C
last-fiscal year.- Redemptions be¬
Rule X-15C1-2 is invalid for vagueness, indefihiteness, and uncer¬ If after several years of experience, under this highly publicized leg¬
islation we should find, that the public cannot rely, upon ,a commis¬ gan to go-up as soon, as the with7
tainty, (2) that no violation of §17 (a) of the Securities Act, was
sion-licensed broker not to charge: unsuspecting investors 25. per. cent holding- ,,tax •. went /into
.effect
-proved, and (3) that the Commission did not offer substantial evi¬
moie than a market price basily ascertainable by ..insiders, we should
July 1, - - /-*">^/;, '
dence to establish the actual market price of the securities involved.
*
that
at
no
did
time
either
Stillman
or
Armstrong
reveal
the
true
•
,
,
We think
none,
of them
are
The objections to §15
to be sustained.
^
/
•;
"
\;
>
.
y.
(c) (1) of the Securities Exchange Act and
to S. E. C. Rule X-15C1-2 ere insubstantial.
leave
think
The standard for deter¬
.
mining the acts prohibited by §15 (c)
itself, and is
more
than adequate.
""manipulative, deceptive,
for far
more
or
definiteness than such
other
cases.
up
in the statute
a
standard
as
was
approved by
Stranahan, 192 U. S. 470, and in
See, also Smolowe
is set
otherwise fraudulent" makes certainly
the Supreme Court in Buttfield v.
numerous
(1)
The fact that the devices must be
v.
Delendo Corp., 2 Cir.,.
such legislation, little'more,than a snare and a delusion. We
the Commission has correctly 'interpreted its; responsibilities
to stop
such abusive practices in "the sale of securities,;
Petitioner's final
the securities
.was
contention is- that the actual
never
satisfactorily proved.
«.
market
-
price of
We agree,-however/
Commission that the evidence of the quotations published
in the National Daily Quotation Sheets,- a recognized service giving
"daily market indications,"-as petitioner stipulated, and the'prces
paid concurrently by petitoner itself sufficiently indicated prevailing
market price in the absence.of evidence to the contrary.-; • •
..
.
'
'
.
•.
*•
-
bonds,
was
year
$207,387,-
cashed.
But in
'
;
with the
Order affirmed.
In; the last fiscal
899 in
-
less than five months of this fiscal
year
$735,748,138 worth has- been
redeemed,
an
$146,000^000
with
000
a
an
about
of
average
monthly,
•
compared
average of about
$34,000,-
month in the corresponding
period last
year,
4
/
^
Volume 158
Number 4238
THE COMMERCIAL & FINANCIAL CHRONICLE
Industry is helping win the war...
industry must help build
a
The will of our soldiers assures
The will of
win
a
decisive
are
victory. On
farm and in every
is
unconditional surrender...
people can assure a just and durable peace
our
Today the United Nations
to
an
peacetime world
joined in their determination
every
battle front and
production centre
a
speeding "unconditional surrender."
Tomorroiv millions of soldiers and workers
-
on every
singleness of purpose
can
have steady
employment if they also unite with determination to bring
about "a
just and durable peace."
Prosperity
be realized only through the will of an
can
informed and
a
united
people. With their courage and their
determination, the people's will to
peace
accomplish
a
righteous
is irresistible.
People here, in common with-people of other
prosper
only if
■x-Sw
-
THE
can
materially and spiritually after the war ends—but
now
the peoples of the United Nations make loud
their demands for "a
<VWV>
kw:
lands,
just and durable peace."
INTERNATIONAL NICKEL COMPANY, INC
Subsidiary of The Inter-national
New
Nickel Company of Canada, Limited
York, N. Y.
Awarded to
1
Huntington Worh-8
CHRONICLE
THE COMMERCIAL & FINANCIAL
2430
and all the
Three Essential Steps
lobs And Taxes
(Continued fr
Aside
from
war' effort
the
it¬
self, the most pressing problems
before our nation are today and
will be for some time—jobs and
To deal with these subjects
taxes.
must
—Federal
total
America
Can
thirty
provide
won?
new
Can
duced?
are
as
the greatest
in the
of any nation
wide margin.
capita
discourage the for¬
enterprise.
—taxes that
mation of new
sonable
to
return
the
venture¬
^r-taxes that do not allow a fair
for
successful
achieve¬
reward
paid off? Can our country
stand expenditures of 30-billion
dollars a year for Federal, State
ment;
and local' Government?
tion
ally
On
the
try, our
There
businessmen
that American
must
large share of responsi¬
a
bility for solving these problems.
The
Answers
—
Jobs
Production,
of
competence for protec¬
one's family, home and
children.
The future of our coun¬
whole democracy.
is no escaping the fact
hinges.
assume
,
competitive enterprise
free
tions
ing of a
these ques¬
to
answers
that prevent the build¬
—taxes
that
—taxes
waste
encourage
unwillingness to work.
—taxes that no one can under¬
and
stand, including even the experts.
—taxes
that
destroy
savings
prise.
expanding
to
necessary
,
.
1
.
enter¬
" V
'
—taxes that are
disguised
so
pile
exemptions for marital
dependents. All these
deductions, in the interest of sim¬
plicity, could easily be compiled
and
for the entire nation and
as
than
aver¬
an
pressed as
three
of
that
whidli
levies
so
four
or
under¬
can
Federal
budget
drastic
reduc¬
entail
will
in
anyone
balanced
A
2.
structure,
in
tions
governmental -agencies
and employes.'
■
3. A plan for servicing and pay¬
ing off the war debt starting im¬
mediately the war ends.
Present Tax System Is Vicious and
Harmful
-
;•
I want to
point out some of the
why our tax structure
reasons
the basis for a
new
suggest
tax structure.
In the first place,
present taxes
approach the point of confiscation
for
business firms and of
diminishing returns for thousands
of others.
As a result, there has
many
been
practically
in business
New
the
for several years.
of
in our
progress
country, and has been one of the
largest sources of employment.
.
The facts
half
of
units
show that
"business
without profit in
total of over 500,-
operated
or
business.
a
be
of
aware
,
possible results
the
dollar amount.
of such and to make their opin¬
example, the
individual ions known. To sit back and not
tax, using hypothetical figures, know what is going on or to do
might well be $10 on incomes of nothing about it, is sheer dis¬
$1,000 to $1,200; $20 on incomes loyalty to this nation of ours and
of $1,200 to $1,500; $40 on incomes to the high ideals for which' it
of $1,500 to $2,000; $100 on in¬ stands.
We have no place in our
comes of $3,000 to $4,000, etc., up
midst for slackers nor for those
to the highest brackets.
non-Americans who are busily at
'
■Then an, individual would only work interfering in our political
need to know the amount of his life and trying to change our
way
of life
and substitute
therefore
gross income to know automati¬
some foreign ideologies unwanted
cally the amount of his tax.
This
simplified system would by us—they are fully aware that
make
it
possible' for Congress within the scope of the tax law
merely to raise or lower the dollar lays the means of accomplishing
a
s
rates
realize
to
for
essary
the
amount
their purpose.
and
nec¬
government operation
going through the present
unsatisfactory yearly debates and
arguments about further sources
of income.
once
with
out
porate taxes.
This
tion
regard to
for
time
the minds of
War
Debt
recalled
we
of
some
American
to
leaders
our
important characteristic of
an
* cor¬
our
of
doing things, "
namely, the sanctity ■ of contract.
:
simplified system of taxa¬
by no. means cause a
A
need
lower tax yield.
Tax
It/is high
entirely possible that such
simple tax plan could also be
worked
desist at
us say
shores.
our
Refunding
It is
a
leave
or
Transaction
•
.
In fairness to them,
ourselves, let
without
than
more
corporate
our
individual
an
For
always been
enterprise has
backbone
enterprise
no new
now
age
to
Right here let me say it is the
solemn
duty of every business
man in the country to know about
his government, to know what is
going on in its fiscal policies, to
tax
stand them and far below current
favor
simple
tax
our
continue
can
debt indefinitely any more
up
debt, incurred with the consent
the debtor (and I firmly be¬
of
Instead it would
way
lieve
of
most
the
present
war
mean greater.opportunity for pro¬
Out of a
debt has been and is being in¬
corporations, 246,000 had no duction, for venture capital, for curred with the approval of our
of life.
reasonable
dividends, for more
% '
' —taxes designed to take away profits.
people) is a sacred obligation and
A
and
good
agricultural
great section of American wages
from
our
the people expect that it shall be
people their greatest
prices with a resulting higher na¬
business has been caught in a net
tradition—opportunity.
paid. The idea advanced by cer¬
of rising taxes, rising costs and tional income. It would eliminate
—taxes that discriminate against
tain "experts in Government econ¬
dwindling earnings.
This is the most of the present confusing
our people who are the owners of
omy" that the war debt is no debt
"white collar" class of business. technical amendments, rules and
business corporations by first tax¬
because "we owe it to ourselves"
From June, 1940, to June, 1942, regulations.
is nothing more or less than damn
ing the corporate earnings and
The
only additional taxes to
there were 273,000 firms, mostly
then
nonsense
and collectivist propa¬
taxing the same earnings
small businesses, which went out those on corporate and individual
again when they are distributed
ganda.
It is an inspired hoax
of business, an average of about incomes which I see necessary are
in dividends.
which is vicious to say the least.
a customs tax, a reasonable inher¬
450 each working day.
Solvency of business is impos¬
Every loyal American has it in
itance tax, a social security tax
The stockholder likewise is in a
sible so long as it is also subjected
his heart and soul to pay his own
and a "special war refunding tax"
to unreasonable restraints, inter¬ distressing plight. Eleven million
personal debts and our'Govern¬
; >
of our people are the owners of of Which I shall speak later.
ference and competition of gov¬
ment must not be guilty- of scotch¬
We should
profit in govern¬
corporations. Income tax returns
ernment.
ing this principle. ;
from the
show that at least 57% of all divi¬ mental administration
Business solvency and greater
Yes, we must pay the war debt.
dends go to those with incomes experience of business with rela¬
production can be realized only if
Every, bond purchased by every
to
under $10,000. Stockholders have tion
high production; ' jobs,
capital is available to build or re¬
boy, girl, worker, soldier, widow,
prices and Consumption and the
become our forgotten class.
build
plants, install machinery
business .man or firm-r-must be
So far as individual taxpayers resulting revenue to government. redeemed in full. And this
and buy raw materials to create
repay¬
Business long ago proved that low
and distribute new goods.
It must are concerned, the squeeze has
ment rests upon maximum pro¬
prices are only possible with high
be remenbbered that it requires an been
particularly on that great
duction of goods,'establishment of
production. Therefore, I suggest
collar
investment averaging nearly $6,- white
class, constituting
new industries and maximum in¬
that government encourage higher
000
for
the
dividual efficiency both in man¬
employment of
a roughly 20 million, or almost 40%
production by enacting now a
single man in industry.
There of our total working population.
agement and labor.
special tax 'incentive, for those
But the only way we are going
must, therefore, be ample oppor¬ Millions of these have had little
who
employ a greater number
or
no
increase in earnings since
tunity for venture capital and for
to meet government obligations is
than
they did in the pre-war
the war, while living costs and
reasonable dividends on it.
to plan now for the servicing and
period to become effective at the
taxes
have
been
constantly in¬
ultimate repayment of it all. We
Dividends are as much a part of
termination of hostilities. The in¬
We must rectify their
should provide a special source of
the cost of doing business as the creasing.
to
bring changes in our social and
economic way
and Taxes
that Government
status
computed which, for all
practical purposes, would be just
as
equitable as today's perplex¬
ing method. This tax could be ex¬
of
must be overhauled and to
some.
dollar
these ends, the following steps are
absolutely essential: ,
1. An over-hauling and simpli¬
.
—taxes that do not allow a rea¬
drastically re¬
300-billion
a
great
as
by the people
incentive.
debt be financed and eventu¬
war
carried
accomplish
to
levels.
44.5
than the
in the ten
more
—taxes that stifle initiative and
who are fighting the war
employment will be await¬
ing them on their return? Can we
be
reasonable
certain
that
all
who are able and willing to work
will have the opportunity to do
taxes be
of
alone
is
business
fication
times
five
now
world by a
that
Can
is
of England.
—taxes which
girls
so?
and
State
from 1931 through 1940.
—taxes
per
jobs when the war is
Can it assure our boys and
million
for
collected
taxes
those
ing.
taxes
billions—which
outline,of my think¬
an
dollars
billion
55
Federal Governments.
years
only
2415)
page
period allotted me, I
necessarily be brief and give
in the short
you
)m
If
Thursday, December 16, 1943
1941.
000
.
The answers are to be found in
the
sources
same
the answers
as
problems—production,
jobs and taxes. Let us make no
mistake
production is the only
basic source of jobs.
Production
is the only source of the goods
which our people can and will
buy. Production and its ensuing
the war
to
—
flow of income is the main source
of taxes to maintain our Govern¬
ment.
Production and more production
will insure jobs
and
more
jobs-
goods and more goods—at lower
and
lower
prices—for wider and
On this basis
wider distribution.
,
must chart the future of Amer¬
we
ican
business, and American Gov¬
ernment.
Production
then
is the
crux
of
the
problems of jobs and we are
fortunate in having a very large
pent
demand
up
for.
consumer
goods to stimulate immediate pro¬
duction of peace-time
goods.
Joint Responsibilities Necessary
Who is responsible for this vital,
all-important production?.
of
Some
costs
of labor
yet,
people, unfortu¬
nately, think that management is
solely responsible for it. Produc¬
while
our
ily declining.
labor and agriculture because
they have by far the largest stake
ultimate results, that is—
for labor and prices for ag¬
riculture. Their stake in produc¬
its
is
these
clear
it
when
groups
32% less.
today
Wages and salaries
1;
.
Life-giving, indispensable capi¬
tal
sufficient
in
quantity will
through the veins of
industry while it is stifled and re¬
realized
is
are
And
and material
steadily rising,
this year will be 90% above 1929,
while dividend payments will be
wages
that
been
materials.
the capital return has been stead¬
of
tion
or
labor
have
costs
tion should be the greater concern
in
„
never
re¬
ceiving 79% of the total national
flow
strained
income.
competitive
enterprise,
business, full employ¬
built upon the American traits of
ment- and good agricultural prices
individual initiative, incentive and
are
inseparably bound together.
Our labor partners and our agri¬ thrift, the will and the desire to
do an honest day's work for an
cultural partners must join with i
honest day's pay—that is the only
our
capital partners, the stock¬
basis upon which the production
holders, and their representativeswe are seeking can be attained.
management, in a concerted effort
for the greatest
The
possible post-war
-
greatest
single deterrent
competitive enterprise, to
sound business economy, to pro¬
duction, and therefore to jobs, is
taxes. No one, including industry,
objects to reasonable taxes. In¬
dustry expects to bear its full
to
production with its resulting full
employment. These partners must
also be equally concerned with
taxes, which are sapping the vital
strength from industry and will, if
continued at present levels, force
reduced employment and lowered
farm prices.
free
share of the
war
expense.
It dem¬
Taxes
of this
All
the
that
Before
mend to
have
the first to
Congress last
mentals of
American philoso¬
our
continued indefinitely. It
the middle
class
if
ture
eradicate
will
which has always been the initial
of
European dictators.
It
will destroy free competitive en¬
erect in
terprise and
its place
collectivism which will
socialization
of
all
and
industry
mentation for
tax
Our
all
mean
business
complete
a
the
and
regi¬
people.
our
must
system
vamped and revised
be
re¬
that every
loyal American citizen does his
share in maintaining and support¬
ing his government by the pay¬
ment of income taxes even
but
We
;'
.dollar.
one
need
everything
to
though
-
remember
J
that
government ..buys
—whether services or materials—
our
must
eventually
pay
Recommended
40%
The
first
There is not the slightest possi¬
bility, however, that industry can
is
continue
that any
cultural
prices,
full
its
resultant
we
90%
must have fi¬
impossible as long as industry
has pressed down upon it a crown
of thorns in the form of taxes
—taxes which
pressive but in
are
not
many
only
cases
v
op¬
con¬
fiscatory.
—taxes which in 1943 will claim
excess
to
surtax, and
profits tax.
bear
the
present tax
sound
burden upon the cessation of war
;
could
and
individual or corporation
accurately figure its own
taxes.
to
do
the
job of production
which will insure employment for
our
men
and women in the armed
A
'
simple
should
be
i
.
personal
based
on
income tax
expert study
forces and the other millions now: of all the allowances for expenses,
engaged in
war
work.
obvious
is
It
contributions and other payments,
the
that
present
profits tax must be termi¬
nated immediately at the conclu¬
sion
the
of
is to
of reemployment
load
the
carry
if business
war
and reconversion.
The tax should
terminate at the end of the.calen¬
dar
be
the
accorded
funding tax.
same
interest
treat¬
tax
such
one encourages
Government Budget
involved
Federal
balanced
A
budget
of
the
post-war economy.
v
Unless
our
Government
?>
does
operate on something at least apr
balanced budget dur¬
ing the next few years*, inflation
is a certainty.. The real danger of
uncontrolled inflation, in fact, is
proaching
a
is
war
Government
wartime
sion
and
were
over.
ventures which
during
in
the
depres¬
as
expedi¬
attempted
ents, must be avoided at all mosts.
For the
for
the
good of the nation and
of our people, I
good
strongly urge that the government
payroll and other expenditures be
drastically reduced so that the
Federal budget may be brought
somewhere near the point of bal¬
war,
plus
the
necessary
continuing Expenditures for a pe¬
will be around
300 billions of dollars. At 2%, this
mean
billion
this
billion
we
interest
a
of
of three
principal and
payment
year
on
will need nine billions a, year
for' war-refunding
few
charges
dollars annually. 1 Add
the
years—over
for
the>next
the 100 year pe¬
riod there will be required an av¬
semi-annual payment i of
$3,007,500,000.
r '<•'
'My strong conviction is that we
cannot begin too soon to draft a
simple and practical set of peace¬
time Federal tax provisions. By
erage
■
doing
so
now
we
can
do
away
with the
present hodge podge im¬
mediately when hostilities cease
with
an
under¬
standable law which will
encour¬
and
age
replace
and
it
reward
industry
initiative.
and
1
30 Billion All-Government Budget
It is my
firm belief that
we can
have necessary peacetime govern-
ance.
It
approxi¬
riod after the war,
six
is
the
that
the debt at
estimated
is
to
absolutely essential to any, sound
of
indicates
would raise
tax
a
would
Must Be
Balanced
I
mately nine billion dollars a year.
It
The
examination
careful
A
end
the
creation of debt, the other would
encourage the creation of capital.
charges.
purpose,
throughout the land — carefully
devised to avoid pyramiding, to
be collected by the use of stamps.
payments—they
as
For this
suggest a 1% transaction tax to
be applied to every transaction
both should be considered as final
ment
be
to
purpose,
mingled with any other funds. It
might be known as the war re¬
factors
Preferred stock dividends should
this
for
used for this alone and not inter¬
within which hostilities
year
cease.
after the
Simplified Income Tax
nancially sound business. But this
can
with
to
botfi
excess
so
step in building a
post-war tax program
should be a simplified income tax
system. This should be so simple
we
business
relation
in
revenue
system
phy and is certain to impair per¬
manently the whole social struc¬
recom¬
year a
combined normal and
dynamic
tax
for.
was
be
fact
is
shortsighted, vicious and socially
harmful.
It destroys the funda¬
the. people
ufacturers
Business
adds up to the
present
onstrated this beyond doubt when
Sound
Prevent
should
centive
the increase and to apply to
business and individuals.
the National Association of Man¬
Existing
possi¬
ble moment.
victim
now.
as
Free,
Sound
tax situation at the earliest
is
sheer
nonsense
to
assume
(Continued
on page
2435)
.
Volume
158
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4238
«T".t
>»
<
JLmerican railroads
load in history. Wear and
greatest
tear
tracks, bridges, locomotives, cars
on
and other
equipment is terrific.
and
Material
maintenance
are
,
continued
railroads
obtainable
not
now
necessary for safe,
wearing
are
they
out 25 per cent
be restored.
can
Money from current
and
needed
operation. Consequently the
faster than
be saved
for
labor
beyond the minimum
to
pay
revenue
should
for the needed repairs
replacements when material and
labor
in
carrying the
are
are
war
available; meanwhile invested
bonds for
war
purposes.
if
wiewm.-
*
c'<
MSi.fr
X"-
»«
■•
Vx^/f
^ >4 *>
'
2~'
L/ut the
tax
law forbids. If money
kw^origress has been asked to recog¬
for needed
as
repairs cannot be spent
it is earned it is considered
and
practically taxed
"profit"
nize these facts and
to
aside sufficient
put
place the things that
away.
earning that
But it isn't
permit the railroads
revenue to re¬
are worn out
revenue.
profit. It is the lifeFavorable action would
of the
blood
mean
thou¬
Without
railroads.
of
sands
repairs and replacements
road would
in
any
rail¬
men
jobs for returning fighting
in the task of
restoring railroads,
and in the mills, mines and
cease to run.
forests that
will furnish material for the work. It
would
To
mean
tax
strong post-war
this
railroads.
"repair money"
because the work
cannot
as
profit
be done
now
<>
wf4
*'
threatens the backbone of American
I44?1, *'&
transportation.
BUY
WAR
UNITED
BONDS
STATES
AND
STAMPS
PENNSYLVANIA
'S/v;
RAILROAD
suspended
Harbor and have been
during the period of all-put war.
Let me now trace for you the
Forecasting The Management
details
Problems Of 1944
2414)
(Continued from page
.
violent reactions," Mr. is, tnerefore, strongly tempted to
stated that "it will be ac- take an optimistic view. It would
stir up any
Cherne
please our ego to assume that our
wartime unity of purpose, smg emindedness of action, and unqualto say. "will not be blamed for the ified determination will continue
occurrence
of unemployment at undiminished even after victory
that time
but management in Europe is won
the inevitable short-run
consequence of partial reconversion " "Management " he went on
cepted
as
...
Such a forecast for 1944 would
just the
be neither true to facts nor cog
same.
Its failure in the second
half of 1944 to lay the ground-> nizant of the forces operating bework for increased employment j neath the surce of our economy,
opportunities after the defeat of !A sound prognostication of coinJapan
and the surrender of; mg events cannot be based either
Germany, will certainly cause un- I on a mere projection of tile past
rest
and
perhaps even serious trend nor on wishful thinking. To
convulsions in our economic and be
acceptable it must envision
polical body."
"Thus," he said, | events that are either certain to
"thorough, comprehensive and ef- happen or which will occur with
fective post-war planning by busi- a high degree of probability.
It
is against the background of such
ness, both collectively and indi¬
probable events that we can trace
vidually, becomes the foremost re¬
in broad outlines the scope and
sponsibility of management in the
nature of the problems which will
will
already be on trial
...
coming year."
Touching upon
declared
Cherne
Mr.
inflation,
management.;
Let me summarize at this point
the events which in my opinion
challenge to man¬
that "the second
business
confront
subject of
the
will
agement vvlll come
flationary spiral."
next
occur
They
year.
are
from the inAccording to the events that will form the backMr Cherne, "present indications drop against which American busipoint very strongly to the proba- ness management will be called
upon to perform its responsible
anti-inflation dam
going to be breached early in
bility that the
is
The
1944.
widen and
first, but they will
at
after New Year.
Fourth, manpower and womanshortage will grow in in¬
tensity during the first half of the
year but will lessen perceptibly
during the second six months, This
trenjd will be paralleled by an in¬
power
is firm de¬
part of the
Legislature and the executive to
apply drastically and unhesitat¬
ingly strong measures," Mr. Cherne
said that "unforuntately, I can't
charged from the services either
because
of injuries suffered
ir
optimistic about such pros¬
pects. Knowing the political cli¬
mate in Washington, I fear that
the inflationary spiral will be per¬
In
his
observed that "if
from the
we are
into
war
an
of
the
sus-
high level of production,
then jobs are the key." He went
on to say, "these jobs will have to
be provided by business manageable to
absorb
our
a
market
national out-4
These jobs will have to be
provided by business management
if free enterprise is to continue as
put.
the driving
©my."
"There
power
is
in
our
doubt
no
econ-
that
people are still over- ,
whelmingly in favor of private
business meeting this
responsi-!
bility"
[absorbing the pressure
of
disemployment], it was asserted
by Mr. Cherne, but, he
said "there's no doubt in my mind
that a large army of unemployed
will turn its back on private busitless, and insist on action by the
National Government if private
enterprise doesn't come through."
of
Mr.
Cherne's
Address
the
During
American
*
a
past
ej1l:erPrlse
+i
,
officials,
ment
two
has
years
?err
of
converting our nation from a
militarily inferior power to the
strongest and best armed force m
war.
fully
or
a
ments in
accomplish¬
converting from a civil¬
ian economy to a
the
total
war econ¬
the short span of two
Occasional strikes, fric¬
tions, and managerial incompe¬
tence are but scattered, isolated
flaws on an imposing canvas of
overwhelmingly impressiveness.
omy
ests
re-
reason
and
that partisan inter¬
conflicting political am¬
the
ness
in
years.
who attempts to fore¬
cast the economic events in 1944
Anyone
f
defeat
the
Germa
revival of economic £rictions
,
widening
our
and
gap between
executive
and
the legis-
branches
of
Thus, management will face, for
the first time since Pearl Harbor,
a
host
of
new
challenges.
Some
we
can
produce guns
record.
chaUenges
They
will
will
be
be
nomic thinking and vision.
Some
were
unsolved
on
the day of
Pearl
though
to
the
be
still
hour
is
will
it
late,
possible for management '
adopt in the first half of 1944
some
will
that
measures
enable
housewives,
mothers, and single
do a full job in indus¬
to
women
try with less
at
inconvenience
than;
present.
After
...
the
labor-
of
defeat
problems
of
Germany,
will
increase
lull allowance is made for the in¬
be
crease
Pearl
more
the
in
we
price
50%
incredible increase
an
or
above
our
And all
cutput.
;hoit span
the
total
problem
time,
as
there is firm determination
volume
goods produced in
t943 will be greater than in 1941.
its
/iding for our civilian population
greater volume of the necessisemi-durables than
o
.ies of life and
we
produced
ever
prosperous
in
our
most
Fifty-three
million men
gainfully employed
women
and
and
10,000,000 more in the armed servces
have
witnessed
the
miracle.
They have seen how American in- I
genuity translated into reality a!
street
of
and
fairness
to
bench
corners.
is
there
a
determination
than
rather
on
.
the dismissal
industries
of
workers in
the
and
in
envelopes
reduction
industries '♦
substantially y
many -
have increased
very
during the war,, it is no longer a
secret that trade unions and other
declining purchasing power
In
the
for
men
Army life
Nor
working hours. These are sure
to follow our victory in Europe.
They will cause both labor unrest
and jurisdictional disputes; While
everyone knows that weekly pay
In fairness to its work¬
dollar.
life.
in
it must adjust their wage scale
the
from
The fourth challenge will come
from
investors, management must pro¬
tect the real value of its equity
to the
precedent in
no
return
the- work
therefore, the second set of
problems
for
management.
In
ers,
is
pf these men to obtain jobs rather
than relief, to sell their skills at
poses,
and assets.
peacetime years.
There
precedent
implies
stockholders
up
in
will
war
its
will
quickly.
although
not
industrial
to
course.
to
life.
Germany
history for the number of
who
on
of the legislature and the
executive to apply drastically and
unhesitatingly
strong
measures.
fairness
of
demobilization
men,
found.
our,
Unfortunately, I can't be optimisr
tic about such prospects. Knowing
plished
the herculean task of
the political climate in Washing¬
.uperimposing the war economy
,ipon a record-level civilian peace ton. I fear that the inflationary
economy.
While
creating
the spiral will be permitted to run its
ration, we have succeeded in pro-
%
too,
battle, pose a prob¬
lem of readjustment. For them,
too, an effective solution must be
the part
Inflation and all that it
defeat
of
rate
wounded
have, in other words, accom¬
greatest arsenal of military weap>ns in the history of this or any
a
manage¬
industrial
to
the
These
j?im.
be checked only
spiral can
be
pose
personnel
probably be stepped
That he thereby accelerates
The
if
our
the
by
rotation of the spiral and
the
After
much of an increase
he can possibly ob¬
as
price
tain.
that within the
of two years.
same
in his
will
men
for
ex-soldiers
himself a
protection
will
grow
ment that calls for the exercise of
pre-war destructive effects escapes
consumers'
Of
anti-inflation
These
battle.
he believes to
of what
maximum
who
rapidly as
second front is opened up.
Management has not only the
legal but the moral and inescap¬
able duty to provide employment
opportunities for these returning
warriors
who
have
fought our
the infla¬
caution and
tries to salvage for
one
since pushing for
level
Harbor, this still represents
than $150,000,000,000 in gross
xutput
>f
1943
soldiers
the
reason are
year
wounded
demobilized will
bandwagon;
cast to the wind. Every¬
tionary
shall*have
produced a gross national product
if almost $190,000,000,000.
After
the
In
the
labor organizations will
retain
their
fight hard
gains in
-
wartime
market, it must keep prices from
to
running wild,
basic hourly rates. They will also'
The charting of a safe course fight with equal" stubbornness for
the preservation of- their jobs.>vi * \A
through the dangerous reefs of
If we are to: emerge from this
inflation will be made more difficult by the fact that Germany's war into an era. of sustained high
defeat will in all likelihood be level of production, then jobs are
followed by a decline in business the key. These- jobs will have to; ;
activities in a number of our eco- be provided by business manage•
end demand that we do almost nomic segments. Areas which hatfe ment to assure itself of a market
as well in peace as we did in war
been fully converted to war pro- able to absorb'our nationaL out- A
in creating opportunities for em- duction and which will suffer a put. These jobs will- have to be
ployment and a volume of output severe cut-back in orders will ex- provided by business management
commensurate with our present perience a rising volume of un- if free enterprise is to continue as
accomplishment?
! employment,
shrinking markets, the driving power in our economy.
It is wishful thinking to assume
True, this opinion will not be-! and unusued capacity,
come fuily crystallized in the sec-1
Other war areas will be able for one single moment that con¬
ond-half of 1944. The spectre of not only to maintain their present tinued, large-scale unemployment
will be accepted any longer as the
4,000,000 unemployed at the end level, but to intensify their pro¬
consequence • of
an
of 1944—the estimate of the Re-' duction schedules because of the inescapable
blueprint which a short two years
ago was regarded as fantastic not
only by our enemies, but also by
quite a few in our own midst,
Will it surprise you if these 63,000,000 men and women at war's
trial just
the
the
Its failure in
second half of 1944 to lay the
same.
Expanding immutable economic law.
/ : Vr
You, the managers of American
prosperity in some parts of-Ahe
country, maintenance of the tpresr business enterprises, should and
ent high- level in other parts; iand must realize, even jf many of our
depression conditions in still other economic theorists have not yet
parts—such is the economic out- done so, that two basic laws that
were widely hailed in
the nine¬
look for the second half of 1944.
The third challenge will arise teenth century have been re¬
in the labor market. Unt'l Ger- pealed by the irresistible forces
shift in war demands.
■
,
of economic life in the twentieth
shortages arr century. I am referring to Malapt to increase.
Manpower will thus' law of population and the
become an increasingly more seri¬ law about the inevitability of the
business cycle and its by-product:
ous problem as the Armed Serv¬
ices approach the limits of their unemployment.
is defeated, both manpower
many
and
womanpower
scheduled sizes. At the
These
time,
same
months after the surrender of Ger¬
many—will certainly cause
perhaps even serious
of
rest and
un¬
con¬
It
vulsions in our economic and po¬
that
jobs in
•
Thus,
and
thorough, comprehensive
effective
post-war
planning
by business both collectively and
agement will
come
from
the in¬
flationary
spiral. Present indica¬
tions point very strongly to the
probability that the anti-inflation
dam is going to be breached early
will
women
acute.
have
women
than
become
unfortunate
is
been
industry at
replacements
coming in.
This tendency
a
celerated
quitting
while
at
promises
industry
tinue
a
faster
pace
+o
help
through
a
at first.
,
•.
,,
■
food
an
suoply could be
arithmetic ratio—
grow
at
a
far greater
the food supply. The
only major checks to this unbal¬
pace
than
anced ratio
na¬
in the
were
periodic
misery,
management to
The fissures will be small
the
tion would
the
tional labor draft law is unlikely.
in 1944.
,
1, 2, 3, 4, 5, etc.-^population had
tendency to grotv in a geo¬
metric ratio—2, 4, 8, 16, etc. Thus,
Malthus concluded that popula¬
defeat of Germany.
Manoower
••
the
con¬
after
.
increased in
the
The outward movement of women
from
beyond the control or power
man.
Malthus advanced the view that
the various theatres of war.
from
been
above
of
and has been ac¬
the favorable news
by
have
and
of Italy
defeat
ac¬
than a century
They
inexorable.
as
true
faster rate
have
been
set in with
have been
laws
more
looked upon as natural laws
more
but
two
cepted for
shortages in the available supply
un.
challenges will be the temporary
consequences of an economy con¬
verting from total war to a par¬
tial war footing. And some chal'enges
will represent
re-emer¬
gence
of ore-war problems that
for
stampedes
group
Look at our own current
follows.
scramble
mad
a
A
individually becomes the fore¬
the most responsibility of management
in the coming year.
long-range product of the war it¬
The second challenge to man¬
self and its impact on our eco¬
these
orecedented.
.
tact, understanding, and full co¬
operation in facilitating and ex¬
pediting the readjustment of these
that
and butter.
litical body.
government.
wheels of municipal governments
turn far too slowly to be of any
material assistance in this job. Al¬
Every
shown
groundwork for increased employ¬
election will prevent real action.
ment opportunities after the de¬
In summary, 1944 promises to feat of Japan—which will prob¬
be a year inwhich we shall wit_ ably occur
between 12 and 18
future historian can' of
appreciate
in
>
in intensity
grow
it should be obvious that the
now
,.
Seventh, a gradual acceleration
in the rate of cutbacks of war search Institute—will not stir up
orders accompanied by a shift in any violent reactions. It will be
the weapons of war that will still accepted as the inevitable shortrun consequence of partial reconbe manufactured,
And last, but not least, a polit- version. It will be accepted with
ical climate loaded with dynamite many mental reservations. Manbecause many decisions on impor¬ agement will not be blamed for
tant economic issues will be left the occurrence of unemployment!
hanging in mid-air. They will be at that time—at least, not yet. But
left hanging in mid-air for the management will already be on
lative
Management and labor have
fully justified the expectations and
exacting demands of our military
leadership.
Only an
Olympian
observer
"priorities
verse."
will
pressures
to
bitions tied in with the November
formed the almost incredible task
the theatres of
Its
a reduction m hours of work,
Sixth, the adaptation of the war-
simple
Text
Full
unrest in
reconversion.
of
time priorities system to the needs
of an economy partly released
from the requirements of total
warfare.
This means, in the
j phraseology of leading govern-
the
American
wake
will be m revival of
jurisdictional;disputes, a fight for
preservation of wartime gams
111 ratesmf pay, and a demand for
tained
ment to assure itself of
growing labor
Fifth,
to emerge
era
some
defeat of Germany.
Cherne
Mr.
oi
decrease ir
the size of the services after the
and
-wer-^sre,
its course."
comments,
incapacities,
physical
battle,
from
come
rather than diminish. The number
in the number of men dis¬
crease
be
run
Ger¬
inflationary spiral
will get into motion again shortly
checked only if there
mitted to
defeat of
the
Third,
certain."
Stating that "the .spiral can be
the
the
many,
Germany grows more
on
is
man¬
will
that
Here I come to one of the para¬
this fact. In every
country governments have suc¬ doxical and, at the'same time,
ceeded; under the terrific pressure most serious features of the in¬
As long as in¬
of war requirement, in reaching flationary spiral.
a
level, of production and a rate flation is nothing but a future pos¬
of employment unprecedented in sibility, fear of its consequences
the history of each of these coun¬ is usually sufficient to keep every¬
tries. The old liineteenth century one -in line.
Neither individuals
economic doctrine that the weap¬ nor groups are willing to start' the
avalanche. But, break the line at
ons of war can only be forged at
he expense of the civilian plow¬ any one point, set the spiral in
share has been clisproven. We've motion, even though slowly, and
Ye
Second, less certain/ but highly
probable,
pressures," he added, "will grow
in intensity as the defeat of Nazi
termination
in November.
the election
under the repeated
onslaughts that will come from
wage-earners, farmers, business¬
men
and
other
groups.
These
widen rapidly
of
pattern
the
estimony
At
will
happen with certainty in 1944 is
of
onslaughts
wage-earners, farmers, business¬
men
and
other
groups.
These
agerial
problems
that in
my as the defeat of Nazi: Germany
grows more certain.
opinion lies ahead.
At the same time, complaints
First, the war has been directly
about economic inequalities that
responsible for a world-wide ac¬
ceptance of the belief that nearly nave been more or less dormant
full employment of manpower and during the crucial years 1942 and
maximum
utilization of produc¬ 1943 will echo louder and louder
And
tive capacity are within the realm across the political arena.
of the possible.
The records of they will find a .receptive ear be¬
war
production are an eloquent cause of the "approaching election.
Av
■
First, the only event that
will be small
fissures
'
tasks.
Thursday, December 16, 1943
COMMERCIAL & FINANCIAL CHRONICLE
THE
2432
seen
by Malthus
recurrence
disease:
in
bxuef,
of
wars,
a
high
But they will widen and^do everything in its power
widen
rapidly under the repeated
It
will
the
be
un
to
withdrawal
of
to ston ?mortality rate.
The second law
women.
By
.
•
said
that
in
a
v rt
Volume
THE COMMERCIAL &
Number 4238
158
dynamic economy dominated by
'free private enterprise, the pe¬
riodic ups and downs of the busi¬
cycle
ness
must
to mature.
that
ment
the
strongest
be
eliminated
the
.process
efficient
and
production or pre¬
consumption would be help¬
sents
ful
Unemployment
desirable
or
consequence
producers
None
competitors.
To be sure, those who formu-
barrels
inferior
and
and
.lated
these
laws
not
were
ire
Malthus,
the
of
law
fact
main
that
the
March
unein-
the
and
after
his
Hitler
:ate will be cut down until at the
md
The
was
of
one
if
is
fact
first
the
1944
of
monthly volume
our
production will be in the
neighborhood of $6.5 billions or
,wen less. At the same time there
re¬
in
war
vill be
responsible public office
•to recognize that the Malthusian
men
1944, with output at a
rate of about $8.5 bilFollowing this peak, the
and
war.
record will
exit.
'ions.
But
political
of the
stage
that
us
enjoy economic
in this country if the
prosperity
billions
securities
of
dollars
which
worth
the
so eagerly in the
I920's, and which are now almost
worthless, must serve as a re¬
minder that foreign trade is a
two-way affair.
To export we
must import. If we want our cus¬
abroad
to buy from
must enable them
If
to sell
these
accept
you
then the conclusion is
in
will enable
premises,
those ad¬
that
economy
foreign nations to find
outlet in
an
our
we
-us.
inescapable
We shall have to make
justments
us
to
market for goods
our
if
notable shift in the type
a
global
a
philanthropist. It does
not involve a philosophy of char¬
ity. Basically, it is nothing but a
philosophy
arid
a
program
of
hard-boiled,
realistic
economic
thinking. It is far more expensive
for
to
become
relief agency
of unlimited duration than to turn
us
a
quickly into
a two-way trader. It
far less expensive to develop a
s
of population no longer ap¬
plied. He realized that it was not
the
shortage
of
food
supplies
goods produced. We al¬
ready have sufficient supplies of
ight
equipment,
ammunition,
tanks, trucks, and similar mate¬
munitions
which led to
riel
dead heroes.
■law
wars
in the twentieth
to maintain our forces at bat-
two-way traffic in goods and
vices
than
soldiers
and
a
return
a
one¬
and
am¬
trip
of
cial year. Few, if any, of the prob¬
lems that I have outlined will or
:his type of equipment.
of unemployed may be eas-.
Jly induced to don uniforms, forge
the weapons of war, and seize the
•productive capacity of other coun¬
tries, thus creating additional em¬
can
shall
probably
continue our ship-building pro¬
gram and even expand it with a
dew to the requirements of the
However,
;
we
be
solved in
provide
a
cru¬
we
either
can
sound foundation for
a
gradual and healthy solution;
we
may plant the seeds for
pacific
newed
we
a
international disputes and
world
war.
We
shall
Hitler next realized that the
ilane program in the direction of either create a climate in which
unemployed can be put to., work leayier long-range bombers and frictions can be dissolved and ba¬
sic issues sensibly and reasonably
by the < State even ■ though :their 'ighter planes.
1 ;
'
It is very probable that war m- examined; or we shall charge the
-accomplishments were not "prof¬
itable" as measured by. the yard¬
'ustries on the Pacific Coast will political and economic atmosphere
stick of free enterprise.
with so much additional electric-;
: >btam not only a larger percen¬
Thus, the Fascist State repre¬ tage share in the volume of war
ty that another storm may break
sents a functional disproof of the
production than they now have over our heads far more devasta¬
•two nineteenth century laws. We
*>ut ,ako a larger absolute amount ting than anything we have ever
•can see clearly now that a
third if dollar orders.
experienced.
World War will become inevitable b However, it would be boP-mm-".
2421)
page
than enough laws on the statute books
are more
Incidentally, this letter of protest has not been written because
will
we
be affected
by this 5%
The fact is that
case.
rule because
such is far from the
do very
little unlisted business, and prac¬
principals. Our service charge on stocks, with minor
exceptions, parallels NYSE commission rates. Our service charge
on bonds is graduated from Us to I
lk points maximum. Admittedly,
we are not getting rich, but due to our low overhead it is
possible
for us to operate at a profit on our scale of service charges. How¬
ever, I doubt that a great segment of the industry could break even
operating on our basis.
y;'7
..
,
tically
we
none as
..
.
It is my guess that unless the NASD turns about, its membership
will continue to dwindle and a new organization, which will truly
represent "the industry, will come into being. We would gladly sup¬
port such an organization. The public, and a vast majority of the
securities dealers are tired of being kicked around.
I regret
state.
that
Keep
must ask you not to print our name,
we
the good work.
up
city
or
...
DEALER NO. 97
While the matter is still current I want to write and tell you that
I think you are doing a grand job in the matter of the 5% profit
limitation.
"V
;
-7
U,
■
.'V
i
Apart from-bringing the matter down to its fundamentals so
that even the most superficial reader can understand it, I think
you show a high degree of courage in tackling a matter of this kind
Because^ of the "interests" at which some of your shafts are
directed, I would guess that you might suffer in advertising revenue
from some of the so-called big houses.
:
*
|
,
-
Your position
is in direct contrast with that of the other trade
papers which seem to be leaving this "hot potato" strictly alone
for reasons that I can only surmise. I only hope that the small
fellow in the industry will understand this angle and when your
solicitor drops around in the future, he recognizes this in making
.U
his advertising budget.
up
.
.
Like most of the dealers who have written you on this subject,
too am fearful of reprisals, so regretfully I must ask you not to
I
use
or
another
there
persecuted
in-order to get at a small handful of unscrupulous dealers?
■
•
my name.
Ayr
7,7'?'■■';;-?7. .'7'?'';r': ?'"
7
■
'
'
7\7"77
re¬
>
•
I dare say
of every state in the Union to fully and
properly prosecute any and
all sharp-shooting. Again I
ask, why must the industry be
short span of
a
twelve months. But
\
;
war. For the same reasons,
shall make some shifts in our
1944, therefore/ will be
the
opportunities' for
for
prepare
of
ser¬
strength., From now on the
rmphasis is going to be upon re¬
placement and repair parts for
•army
conquering nation.
to
traffic
way
:le
century, but the presence of un¬
used manpower. He skillfully took
advantage of the fact that a large
ployment
war
(Continued from
of
American
public purchased
tomers
2433
Hughes Decision Stuns Dealers
rest of the world remains in ruins.
The
JiMt.iM«WitM'W'W*»#« VJ»* 4«W>' t
shall
we
to
challenge
iroduction will be reached around
have disappear¬
soon
from
economic
the
fifth
nonthly
Hitler will
both
skillful
through
teach
able
they are able to sell to us and
will flow with which they can pay for the
?rom the partial reconversion to -purchases made from us. To ac¬
civilian
output. Present indica¬ cept such a program does not im¬
tions are that the' peak in war ply that we are willing to become
ployment.
ed
harmless
The
repealed the law of
and
deeply buried in our instructure. They can
be
be
v< slii1 i>*<inUw«M .f
1.
FINANCIAL CHRONICLE
kicked around.
■
.
that
bombs
and removal of the fuses.
They certainly cannot be made
•afe either by being ignored or
unemployment and its ef¬
:
V ''
•
•;
time
them
now
nade
of private enterprise as
-infinitely more desirable than any
other economic system, they were
willing to accept insufficient food
supply and its' consequences* as
Hitler has
need
mentioned
land ling
presence
as
potential powder
I've
Justrial
cept the absence of private enter¬
prise. Since they looked upon the
fects.
the
of
Consider
sanguine about them, However,
they saw ho other alternative ex¬
well
nation.
necessarily lead to an explosion.
all
at
the
to
Flowing from this is the certainty
that conflict is stagnation.*
of this
of elimination of the in¬
as
by both manage¬
labor is that nothing
which restricts
in the business community:
ments
that
lesson
fundamental
One
self should
not
.
must be learned
pay;iso
flows
.
.
the price which we
are
survive and the weaker ele¬
may
it still has a distance
many areas
q" m ~\*'#M >*W« tW*** r^A
wWi
What do
7*;y'y ■■■•'yyU
DEALER NO. 98
?;?
they mean, asks a large Stock Exchange firm, by riskEvery day we open our doors we are risking $7,000,
less transactions?
the amount of
overhead.
our
,
a
This advertisement is neither
]
-
securities,
/
to sell nor a solicitation of offers to buy
offering is made only by the Prospectus*
offer
an
The
any
of these
*
•
NEW ISSUE
December 10,
1943
.
and will be far
World
War
brutal
more
II
unless
than
that the reduction
conclude
o
available
manpower
and
in
responding
is used constructively
creating goods and services for
the satisfaction of human desires.
Uiyless
-uch
accomplish this task, no
law, no social philoso¬
phy, no man or group of men on
earth can stop another holocaust.
we
The
lesson
second
we
than
ment
cannot
stand
passively
and creates
any
what; the
political composition of that gov¬
ernment happens to be.
The na¬
tional government in the twen¬
tieth century cannot afford either
polit cally or economically to fall
from a record level of prosperity
into the depths of depression and
unemployment. To the same de¬
gree to which private enterprise
fails. to absorb the pressure of
disemployment,
exactly 'to
the
same
degree will
the national
-government be compelled to-pro•vide work in one way. or another.
Neither
slogans
nor
refresher
courses in past history will lesson
the insistence of the disemployed
'for jobs.'
be
no
-
doubt
-
that
•American
a
into the
raw
soft
more
raw
manu¬
goods.
materials will
released
terials will be released for civilian
Production
the
on
considerations.
basis
First,
is
of
two
the
end
product highly essential for civilban consumption? Second; and this
s likely to be the more important
criterion, how many man hours
of work will be created by a given
unit of the
leased?'-
.
material to be
raw
b'hb
re¬
The sixth challenge to business
management will arise in the Ueld
of foreign economic.relations. Un¬
pholosophy
isolationism.
the
protect've
people are. still overwhemingly in favor of private
business meeting this responsibil¬
ity. But there's no: doubt in my
mind that a large army of unem¬
.
cepted for
The
tariff
economy.
was
had
a
of
one
of
been
by
the
national
government
private enterprise doesn't
through.
»
..•••'
if
however,
come
nomic
,
to
the key to eco¬
after
the
door.
Labor
has
gained both
in social legislation and economic
experience. It is now a force far
more organized than ever before.
'It
is
rapidly 'maturing.
And
Paradoxical,
Business,
in
tthe
doctrine
of
polit'cal
economic
reconstrijct'on
Been
then progressive and sound
labor relations are the handle on
war,
the
Big
al-
ibor*h doing extens've lip service
.
But if jobs are
b
that
;
and
isolationism, h^
internationally minded. Big
Busings
as¬
be
public
the
"O^p
World" long before Wendell Willkie took his
trip.
Pearl Harbor has taimht
is
"Those
who
mailed
Price 100.625% and accrued interest
Novem¬
in
ber and the first few days of De¬
cember can feel certain that their
gifts will be delivered by Christ¬
mas.
If mailings are completed
Copies of the Prospectus
within the next few days, the par¬
cels will arrive on time; but every
day's delay by mailers
may
be obtained from such of the
registered dealers in securities in this State:
delivery
be made by Christmas.
"Transportation
dened
as never
demands,
a
as are
now means
much less likelihood that
can
undersigned
facilities,
bur¬
handle
cannot
burden
gifts
not
was
arrived
because of
a
when the
year ago,
so
heavy,
v:
the
Blyth & Co., Inc.
holidays
This
year
serious and mailings must be
situation
■
Harriman
Goldman, Sachs & Co.
•
Ripley & Co.
Incorporated
Smith, Barney & Co.
Mellon Securities Corporation
Kidder, Peabody & Co.
Stone & Webster and
mailings.
the
-
many
late rush of
after
The First Boston Corporation
-
time
on
late flood of gifts and greeting
a
•
before by wartime
is
Coffin & Burr
Union Securities Corporation
Blodget
Incorporated
Incorporated
Blair &
•
Glore, Korgan & Co.
Eastman, Dillon & Co.
Co., Inc.
much
Harris, Hall &
on
Shields &
Christmas.
"Reports from post offices shew"
-
that
a
large number of gifts
'
now
being
"Do
not
mailed,
open
and
until
small
Christmas".
ber
sent
Unless
each
Christmas
completed in the
the
great
num¬
on
that
poltical isolationism will not stem
the. tide at
pleted by Dec. 25."
doors. The war-it¬
cannot
be
•
Incorporated^
Arthur
Whiting,
Perry & Co.
Incorporated
(Incorporated)
Wkeks & Stubbs
Edward L. Burton and Company
Dean Witter & Co.
'"Incorporated
■
.
Hayden, Miller and Company
Granbery, Marache & Lord
•
J. A. Hogle & Co.
G. H, Walker & Co.. '
The Illinois
Company of Chicago
1
.
Auchincloss, Parker & Redpath
Bosworth, Chanute, Lough,ridge & Company-
transporta¬
tion facilities makes it very
deliveries
'
:
season.
few days,
next
burden
'
Laurence M. Marks & Co.
practically
are
'
A. G. Becker & Co1
The Wisconsin Company
Company-
Starkweather & Co.
mailings
.
W'liite, Weld & Co,;;
Tucker, Anthony & Co.
Company
Central Renublic
rather
a
percentage of the total
..
are
marked
However, these constitute
g
Spencer Trask & Co.
•
Paine, Webber, Jackson & Curtis
F. S. Moseley & Co.
Company
(Incorporated)
will be
once or many
-
us
1968
cooperating better than
that
our
Due December 1,
Dated December 1,1943
last year, reports to the Post Of¬
fice Department indicate.'
.
discovered
Mortgage Bonds, 3%% Series due 1968
in
that deliveries of all gifts can
made on time, although the
disappointed
and
irrnfc
is
gifts
insufficient to
were
First
Dec. 6:
on
Light Company
sure
sound A~eH-
At least thfv have
vate business
It
November
of
following
of Christmas
completed at
century
in the street.
action
the
made
as
a
Goldman
a
been accepted in this light by our
legislature and the average man
on
York
Albert
announcement
ac¬
ployed will 'turn its back oil pri¬
and insist
Postmaster
New
more
barricades
than
more
the foundation of
"an
international
our
Utah Power &
CMstnm Delivery Urged
cards. Even
,
til Pearl Harbor
$42,000,000
Prompt Mailing For
"Mailing
be
of military
these
even
economic
is
ex¬
production declines from its peak.
Under such a system, raw ma¬
'
There
appears
indiscriminately:
Plans
are
rapidly maturing ; in
Washington's
official circles to
nitiate a system of "priorit'es in
everse"
immediately/after war
ever more
difference
that go
facturing
But
violent fluctuations. And it doesn't
make
production
proportionate release of
not
by
its
'
own course
development
a
materials
learn is that the national govern¬
while the business cycle takes
civilian
for
cor¬
a
critical
of
quantity
tremely qnlikely.
Instead, there will
must
•
immediately
release
automatically
materials
economic
w'll
output
war
'
•
in
likely
com¬
Perrin, West & Win slow, Inc.
Ure, Pett & Morris
*
,
THE COMMERCIAL &
2434
Thursday, December 16, 1943
FINANCIAL CHRONICLE
wish to repeat that ex¬
plants of wartime inventories and
The Critical Period Of
Transition After ¥-Day
than
production
known
times
in
we have
of peace."
ever
"If,"
experts even
fight a long war against Japan
out
of accumulated
inventories.
our
solved."
cited
as
"the first
/
problem we shall face after the
defeat of Hitler will be a whole¬
sale termination of outstanding
war contracts" and the settlement
of
claims in
connection there¬
.
thoughtful students now recognize
necessity of maintaining many
of our present wartime controls on
wagbs and other factors of pro¬
have
vert
their
so
limited
tied up in war
work
they will be unable to con¬
to civilian production until
prices, wages, rents, etc., for some
time after the close of hostilities.
What
worries
me,
however, is
duction and at the same time re-, not what the Government may de¬
fuse! to accept any liquidation in cide to do in this connection but
what the American people will
the; prices of their own particular
stand for.
When the end of the
capital is released. products. Again the objective must
be
o reach high levels
Of proOver Million Contracts and
due ion as rapidly as possible and
Sub-Contracts
this will be impeded if business
Effecting speedy settlement of insists on a policy of holding off
their working
the
war
removes,
the strong patriotic
.
picture may prove to be
somewhat
exaggerated
b u t it
This
to
emphasize the fact that
he said,
"we can achieve such
the major shock to our economy
production levels the employment
will come immediately after the
problem will largely take care of
end of the fighting in Europe, and
itself, the great threat of post¬
not at some later date after Japan
-war inflation will be eliminated
has been crushed, in other words,
or greatly lessened, and the prob¬
lem
of
balancing our Federal we shall face a critical period of
transition as soon as Hitler throws
budget and of carrying the tre¬
mendous
load of governmental in the sponge, and we must make
Mr. Fennelly
financial
will
that
speak of our ability
to
serves
debt can be
perience. Nevertheless, I think it
is very important to bear one fact
in nriind. Businessmen cannot af¬
ford: to insist on liquidation of
resources
(Continued from first page)
problem discussed in his speech
can
only be solved by the rapid
attainment
of higher levels - of
I believe,
equipment. A rapid unfreezing of
working capital will be of par¬
ticular importance for many thou¬
sands'-of small businesses which
plans accordingly.
To
Lift Production to
Record
„•
more
than 100,000 prime
contracts
market
the
wartime ' inventories
motive
for
compliance
with
un¬
popular OPA controls, I am afraid
the pressure to rush into the mar¬
ket and' buy everything in sight,
1,000,000 sub-con¬ and 'machinery which might other¬
I think. you will
tracts will be a task of. immense wise be used.
regardless of regulations, may be
.that the only sound policy
business firm which has
The only cure for this situation
will be the attainment of new high
goods which cannot be. sold
original sale * price isto
mark them down to a price where
levels of production at the earliest
and more than
proportions. The C. E. D. has been
agree
studying this problem for several
months and has recently issued a
for
little
at
pamphlet containing recom¬
mendations for new legislation de¬
signed to expedite the release of
business funds now tied up in war
a
some
the
they can be sold
out.
These
and. move them
goods must be moved
very,
strong.
.
:r\v'v\
;
•./,/'•'/: 7/
;
possible date.
In the meanwhile,
there will be the need for a degree
self-discipline and self-restralrit
the part of the American peo¬
ple which may be very difficult
to achieve.<.
'; /
-/..
of
on
production. I shall not take your into circulation as. rapidly as can
Peace-time Level
time now to discuss these pro¬ be achieved without adopting a
Chevalfter has just told you
Post-War Taxes
\ -.y'v'
posals but shall be glad to furnish chaotic policy of wholesale dump¬
how we are studying the problems
copies of our report to any of you ing.' In other words, business must
Although it is not strictly a
of transition in the Research Di¬
who are particularly interested in be prepared to assume
its fair transitional problem, I feel that I
vision of C. E. D. He has also told
with, and he emphasized that
the problem.
We are convinced share of the cost of post-war liq¬ must say a few words with regard
you that the one basic objective
"speedy settlement of terminated
that unless drastic action is taken uidation, particularly if it wishes
to post-war taxes. I am sure we
contracts will be necessary to free of all of these studies is to get
by the Congress in this connection to ask for a similar liquidation will all agree that if business is
our peace-time industrial machine
working
capital
and to ; clear
the reconversion of industry may of wartime wages. Any other pol¬
to, do its full share in the attain¬
into high gear at the earliest pos¬
plants of wartime inventories and
be disastrously delayed.
icy will slow down production and ment of high levels of employ¬
equipment." "We are," he said, sible date. The importance of this
increase the threat of inflation.
,
ment and production there is a
Government Plants and
"tending toward the- conclusion objective cannot be too strongly
//:;//''/. '
:
prime need for tax reform which
Practically
every
that perhaps the most satisfactory emphasized.
Surpluses / r Demobilization and Civilian
will remove the present impos¬
immediate policy for the disposi¬ specific post-war problem which
Another important problem we
Occupations
V
sible
burden
which
has
been
tion" of government-owned plants I shall discuss today can only be shall face at an
early date is that
Perhaps the most basic problem placed on business enterprise. I
and equipment "may be that of a solved by the rapid attainment of of
disposing of government-owned of all in the transition period will am Very hopeful that we will be
simple leasing arrangement with higher levels of production than plants and wartime surpluses of
be that of effecting an orderly able to publish in the near future
we have ever known in times of
possibly the right to apply the
commodities and equipment. The demobilization
of
our • fighting a series of tax recommendations
If we can achieve such C. E. D. is now
rental paid against eventual pur¬ peace.
engaged in a study forces and of the transfer of civil¬ which will appeal to you all as,
chase price." He further said that production levels the employment of this
subject and as yet has ian workers from wartime pro¬ eminently sound and constructive.'
"we must not forget that our basic problem will largely take care of
established no official policies in duction to civilian occupations." I
I cannot as yet comment on these,
objective must be to get these itself, the great threat of post-war this connection. With regard to
have seen a great many varied in detail because they are still in
inflation
will be eliminated or
plants into operation under pri¬
the disposal of government plants
figures as to what this transfer the formative stage.
;
vate management at the earliest greatly lessened, and the problem I can assure
you, however, that will mean in terms of human be¬
I must point out to you, how¬
of balancing our Federal budget
possible date."
our policy will
be basdd on the ings and I am not sure that any¬ ever,. that no tax reform is pos¬
Mr. Fennelly pointed out that and of carrying the tremendous
assumption that the only proper one has figures that can be re¬ sible except one that is related
"business must be prepared to as¬ load of governmental debt can be
objective will be to get these lied upon. It seems likely, how¬ both to the expected level of the
solved.
sume its fair share of the post-war
plants into operation under pri¬ ever, that somewhere between 20 post-war Federal budget and in
I wish to emphasize again how
liquidation,
particularly
if
it
vate management
as rapidly as and 30 million individuals or 40%
turn to the level of our national
wishes to ask for a similar liqui¬ vital will be the time factor in the
possible. In this connection I can to 50% of our total working-fight¬ income. I have recently- studied
Since
dation of wartime wages." "Any solution of these problems.
also point out to you
that the ing forces will be involved in oc¬ some very thoughtful estimates
other policy," he noted, "will slow Pearl Harbor we have recognized
problem of disposing of these cupational changes when the war that have been put together on
down production and increase the that every day saved in the ex¬
plants quickly by sale may be ex^ ends. One of the most difficult the post-war Federal budget and
pansion of waf prbduction is of
threat of inflation."
■'/'•
ceedingly difficult I to work out problems we shall have to face in I am convinced we must look for¬
the
utmost
importance for the
With regard: to post-war taxes
because if they are sold at a price this connection will be that of ward to annual Federal expendi¬
achievement of victory. We have
it was stated by Mr. Fennelly that
low enough to justify their pur¬
coping with particular geograph¬ tures for the first post-war decade
"I am sure we will all agree that gladly expended many billions of chase on a business basis the po¬
ical areas where the distress is which will average around $20,dollars for the sake of the utmost
if business is to do its full share
litical outcry is likely to be ter¬
likely to be especially acute. As 000,000,000. On the most hopeful
in the attainment of high levels speed in our war effort which rific and in the long run might
you doubtless realize,
there are assumption that the war in Europe
could
undoubtedly
have
been
of
employment and production
be very harmful to business. We
many
communities which have Will be over before the end of
saved if we had been able to do
there is a prime need for tax re¬
are, therefore, tending toward the had mushgroom growth during the
1944, and that with Japan before
the job in a slower and more or¬
form which will remove the pres¬
conclusion that perhaps the most war because of the enormous ex¬ the end of
1945, we shall be faced
ent impossible burden which has derly fashion.
satisfactory immediate policy for
with a total Federal debt of at
pansion of the aircraft and ship¬
The stakes for which we shall
been placed
on business enter¬
the disposition of the plants and
least
$250,000,000,000 when the
building industries. The readjust-:
prise," and he expressed hipiself be playing in our efforts to win equipment may be that of a sim¬
ment problems of such communi¬ war is finished and liquidated.
the peace will be no less than
as "very hopeful that we will be
ple leasing arrangement with pos¬ ties are certain to be terrific and This debt will require annual in¬
able to publish in the near future those of the war, and speed will
sibly the right to apply the rental some very difficult shifts in pop¬ terest charges of at least $6,000,a
series of tax recommendations be every whit as essential. Neither
paid against eventual purchase ulation are clearly indicated.
000,000 and perhaps $7,000,000,000
which will appeal to you all as business nor government can af¬
price.
//:,
The C. E. D. is now engaged in annually for the first post-war
eminently sound and construc¬ ford to be guided by cautious,
decade.
\
:•
a study of manpower demobiliza¬
For Private Management By
tive."
'
•.//
'
penny-pinching tactics if the job
tion problems but I am sure we
Earliest Date Possible
Mr. Fennelly foresees an annual is to be done.
Foresees $20,000,000,000 Budget
shall find no easy answers. These
Federal
budget requirement of
After War
Above all, we must not forget
Terminating War Contracts
problems will have to be tackled
around
$20,000,000,000
forn the
that our basic objective must be
Time does not permit detailed
from many different angles at the
The first problem we shall face
post-war decade but believes that
to get these plants into operation
discussion of the other items, but
'*with a high level of production after the defeat of Hitler will be under private management at the same time. The armed services are
I can assure you it is very diffi¬
a
wholesale termination of out¬
already hard at work on plans
we can carry the tremendous load
earliest possible date and not per¬
cult to reach a conclusion that our
of governmental debt and balance standing war contracts
and the mit ourselves to become involved looking toward - an orderly de¬
Federal budget will
mobilization of their forces. The post-war
the budget, while achieving a sub¬ settlement of claims in connection in
long controversies over de¬
real problem in this connection, average less than $20,000,000,000.
stantial measure of tax reduction." with such terminated contracts. As tailed
methods.
I realize that
Now a few words as to the re¬
a matter of fact,
this problem is many businessmen are concerned however, is whether or not the
The address of Mr. Fennelly fol¬
lationship between the Federal
already at hand. I am sure it will over the possibility that the Fed¬ American public will tolerate any
lows in full:
;;
budget and the national output of
interest you to know that the total
eral
Government may wish to plans for an orderly demobiliza¬
i The title of my address may
The latest
tion.
When
the war ends the goods and services.
dollar value of contracts already
suggest to some of you that I am
operate many of these plants in
estimates place the gross national
terminated is considerably in ex¬
pressure of our fighting men to
looking forward to a sudden ter¬
competition with private business.
product for 1943 at about $188,cess of the dollar value of all con¬
get home and of their families to
mination of all hostilities at one
At present, however, I am sure
At this level, it is
have them home at the- earliest 000,000,000.
tracts terminated after the end of
there is very little cause for con¬
given
moment, similar to
the
now
believed that Federal tax
the first World War.
"cease
cern
in this direction.
In many possible date will be terrific and revenue for the fiscal year ending
firing" order which oc¬
In furtherance of our basic ob¬ discussions
curred at 11 a.m. on Nov. 11, 1918.
of
this
subject
in very difficult to resist..<
June 30, 1944, will be over $40,Such is not the case. At present jective of attaining high levels of Washington, I,have found no real
000,000,000, without any further
Post-War Threat of Inflation
all the indications point to a ter¬ peace-time production at the earl¬ sentiment in favor of such a plan.
increase in faxes. /
//,
I mentioned earlier the post¬
mination of the war in Europe at iest date we naturally believe in The only danger that I see in this
If we achieve the post-war em¬
a
date considerably earlier than a prompt cancellation of all con¬ connection
might arise in the war threat of inflation. Frankly,
tracts which are no longer needed event of a prolonged failure to get I am as much concerned about this ployment goal of 55,000,000 civil¬
the war in Asia,
ian workers, the national output
for the war effort. Thus, we be¬ these facilities into operation cou¬ danger as any other single thing
As a result, many of our states¬
lieve that any policy of continu¬ pled with a long period of mass in the post-war picture.
At the of goods and services may be as
men
and business leaders have
Col.
^
,
„
.
-
,
.,
,
end of the war the unused pur¬ high as $140,000,000,000 in terms
the ing to produce unneeded war unemployment throughout the
of 1940 prices.
Post-war prices,
goods merely for the sake of main¬ country.
Under
such
circum¬ chasing power in the hands of
assumption that we shall have a
however, are certain to be a good
employment
will
slow stances, there could well develop our citizens will be fantastically
fairly easy period of transition be¬ taining
deal higher than those of 1940. If
down the reconversion of indus¬ a strong demand on the part of great.
Present estimates. indicate
tween the defeat of Hitler and the
the post-war price level should
that individual savings by the end
final crushing of Japan.
Gentle¬ try. Instead, we are convinced it unemployed labor for government
of 1944 may approximate $100,- average 50% higher than that of
will be far less costly from the operation.
men, I can assure you that is a
000,000,000. These ..funds provide 1940, it would mean that a gross
highly dangerous fallacy. Army standpoint of the national econ¬
national product of $140,000,000,cancel these
contracts Surplus Machinery and Materials our greatest assurance that a mar¬
experts now estimate that, after omy to
absorb a 000 in 1940 prices would actually
The problem of disposal of sur¬ ket will be ready to
the end -of the European war, we promptly and to provide adequate
be
$210,000,000,000 in terms of
greatly increased output of goods
may be forced to cut-back out* unemployment compensation for plus machinery and materials also
and services. They also constitute post-war prices.
workers thrown out of employ¬ presents serious difficulties.
We
munitions production by approxiThe conclusion from these fig¬
all remember the disastrous ef¬ a very serious, inflationary danger
mately 80 % and still have enough ment
unless the goods and services are ures is that the existing tax struc¬
Speedy settlement of terminated fects on business of the dumping
to fight a full-scale war against
ture, if maintained after the war,
speedily forthcoming.
Japan. Our stock of finished mu- contracts will be necessary to free qf war inventories at the end of
Because of this danger most might yield over $40,000,000,000;a-s
nitions will be so vast that some working capital and to clear the the last war, and very few of us,
become
fairly complacent on
rtm&M-WNtW* iftriNUMMIWittrttfutw M
Ai"
Volume
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 423*8
158
way
post-war level of production may
many
substantial
cutting of tax rates and still per¬
mit a balancing of the budget. The
higher we can raise our national
possible
production
a
the
be
will
less
our
the
don't
I
want
impression
to
which
I
reach
to
I
should
in
needed
be
In time of
attain
war we
high
a
degree of national unity through
pull of patriotism. This
is relatively easy to achieve, be¬
cause the issue of national survi¬
the strong
level
employment tax, I recommend the
ciation possibilities for the bonds
held
in
General
Bond
Shares
with the
return
list
as
patriotism which
national unity, with
a common purpose and direction,
during the crisis of the post-war
transition.
Although
this
will
clearly be much more difficult to
Wall
achieve I believe-we have
us
cellent chance to do
of
by means
so
the
rallying cry of production
employment.
A
.-v-'
and
.
the
..
.
that
course
of
attainment
current
Street Journal and
Moody's
for discount railroad bonds.
>:<
*
the
George
current
Putnam
Fund
holdings and lists
the changes made
during Novem¬
changes include elimi¬
England Power As¬
These
ber.
1.
With
tion
high level, of produc¬
a
the tremendous
load of governmental debt and bal¬
ance the' budget, while achieving
can" carry
we
•
nation of New
,
-
>
...
base in
our
history. This means
that practically every wage-earn¬
er in the country will for the first
time
have
interest in
and
direct
a
personal
governmental economy.
3. There are good reasons to
hope that tax reforms will be di¬
V
at the high
levels
have,
we
Involved in this longer-;
attained.
problem are such questions,
run
as
.
the words of the sponsor:
valleys of the trade cycle, the con¬
contain
trol
monopoly and the selfregulation, of
business, and of
maintaining the health of small
easily
business in
Offering Prospectus, which, while
always required, is nevertheless
confusing."
A, AAA"A':A.A
,
national economy.
our
primarily to the removal of
I have no intention of discussing
the present intolerable burdens on
these problems today, but I merely
.business enterprise. For the past
wish to indicate my awareness of
generation tax economists as a
classs have directed their atten¬ them, and to point out that the
rected
tion
exclusively
almost
most
Now
wealth.
and
an
of income
distribution
equitable
to
of
these
C.E.D.
ployment. As a result, they are
being driven to conclusions on tax
policies which they would have
regarded as highly reactionary a
few years ago. From this changed
psychology will come a strong
pressure for reduction, and pos¬
sibly eventual elimination of cor¬
porate income taxes, and a shift
It
'
individuals.
tions to
obviously impossible
is
:V;
No
Role
in
group
have
a
of
in a
talk of this
the task that lies ahead than the
engineers.
The nation
will
touch
which
these
problems.
will
us
have
who
men
for
of
of
and
fighting
our
the
over
the
war
world.
Only
hope to win the peace
for them, an America
can we
turn.
/
-
if
About all I have hoped
could not
I desired.
to
accomplish
give
you a
haps
to peace.
do
here
so
even
today
is
to
point of view, and per¬
fresh perspective on the
a
period that lies ahead.
Above
Problem
all, I hope
I have suc¬
that all
of the separate problems I, have
been discussing are merely seg¬
ments of the one central problem
will
be
the
attainment of
The bulletin contains
policies of govern¬
ment', business, labor and agricul¬
shall have
of
funds
provides diversifi¬
cation among approximately 185
bonds, 50 preferred stocks and 40
stocks
and
affords
a
monthly income of approximately
$15 per month.
Hugh
W.
ing lists
and
Long
published
Company
and
investment
hold¬
the New York Stocks
on
Manhattan
folder
Bond
Fund.
Manhattan
on
The
shows
the
dividend record of the Fund since
$2,934,474.15.
During November the following
portfolio changes were made in
good fighting chance of winning New York Stocks: Metals Series
the peace.
'
•
'
—Howe
Sound was eliminated;
I wish I could tell you that the
Building Series—American Radia¬
only thing needed is for the Gov¬ tor was eliminated and Flintkote
ernment to remove the present was added; Bank
Series—Irving
shackles on business and that un¬ Trust was eliminated and Bank of
A
rough
then solve all our problems.
I
am
America
Illinois
afraid, however, that this is a very
dangerous fallacy. Business can¬
not possibly do this job alone and
it does not help the cause of free
Co.
enterprise to assert that it can.
NTSA
and
National
Continental
Bank
&
Trust
.Cooperation the Key
What is called for will be a vast
cooperative undertaking in which
business, labor, agriculture, Gov¬
ernment and the general public
will each be
required to do its full
not be enough to
It will
ask government to get
out of the
business
cbst
of, about
added.
*
The
report
;
*
*
■
;
A
AA
Group
on
Securities
and
portfolio folders On Railroad
Shares and General Bond Shares
have been released
ment
Research
Distributors
by the Invest¬
Department
of
Group.
Besides
list¬
ing current holdings of all classes
of Group Securities, these folders
reveal
that
the
Railroad
Shares
average
market
bonds
would
owned
by
show
an
appreciation
-
of
of
composed of rep¬
labor,
industry,
civic bodies,
retailers, the Ameri¬
bankers,
lawyers,
women's clubs, housewives,
churches and other leading ele*
ments. They might be called "the
Legion,
can
we
without
throttling
and individ¬
the national
income fall below $125 billions we
committees
.
cans."
expenditures
all
at
A
study of the
income.
in
the
jobs
for
Ameri¬
job would be to see that
community, city and town
absorbs its full quota of those de¬
siring to work by the use of what¬
keep them
25% of the
as
for
Their
to
within
so
times
national
further reduce our
once
every
United
States and ever means may be necessary in
foreign countries shows that in that particular locale.
To
coordinate, encourage and
peace-time only about one-fourth
of national income may be divert¬ assist these local groups, a na¬
tional committee for jobs should
ed to government with safety.
We are fortunate at this time be set up, financed by industry,
in
At all costs
in the
tition of the
having such sound committees
Congress dealing with these
fiscal problems under the able and
distinguished leadership of Sena¬
tor George and Mr. Doughton.
must avoid
we
a
repe¬
disgraceful situation
of the early 30s when we had ten
million unemployed.
Rugged Americanism Is
Five
to
Partners
Required
Program
The task which I have been out¬
In
shaping and working for
sound government, sound business
lining to you is
and full
venture.
—
employment, we need to
stock
take
which
such
the
to
as
obligations
program
.
returns.
is
of high ad¬
one
of the
one
greatest
undertaken
ever
the American people, for
in it is the future of
ican way of life.
up
by
wrapped
Amer¬
our
Through complete, enthusiastic
-
of the
It
adventures
lays upon
partners—labor, management,
capital, agriculture and govern¬
ment.
';AA
Our working people must real¬
ize that their part in this program 1
is no small one. They are charged
witn etnciency ana ihntt in luen
jobs as well as in their homes.<(
They will need sound and far- j
sighted leadership.
]]
Labor has by far the greatest
stake in the prosperity of business]
because
it receives
the
largest
a
and
energetic cooperation of labor,
agriculture and industry, through
a
complete harmony of voices
which
silence
will
the
soap-box
orators who seek to
destroy Amer¬
ica, we can attain a higher stand¬
ard of living than the world has
known.
ever
Let
warn
me
you
that
if
we,
the businessmen of America, fail
to take the leadership in this post¬
aA-:j
breakdown
of
this
all-govern¬
be:-AA.AAA:Av;"
Without
upon even
for
expenditures
$9 billions
-•
A"'-""
expencUtures_..$4 billions"
.
Social security,
Federal
Total Federal,
21 billions
he •cannot
his
products.
The women of America will
and
more
oc¬
jobs and
a
business/
larger responsibility in
about
will
We
their
government
need
to
$30 billions
quent
effect
opportunity to know
government, about
expenditures
upon
and
their
house¬
This $30 billions all-government
hold^, their children, their future
budget obviously will require a and the family's jobs.
I have already pointed out some
tight hold on the purse strings. It
contemplates no waste or extrava¬ of the duties of management in
gance.
For those who will chal¬ this new day into which we are
lenge its adequacy I say we had going. Here are others:
pretty good American government
Every businessman must not
the
which
past
fabulous
billions
did
of
not
take
taxpayers
from them," and this
suggested
peacetime
budget
is
three times the level of the 1920s;
money
away
keep informed about his
government but he must actively
only
participate in that government.
Business must immediately and
keep its 11,000,000
peacetime stockholders informed. These own¬
government priod to World War I. ers of business must be aroused—
persistently
nine times the level of
I suggest
securing the funds for
this budget as follows:
State and local; taxes—
Federal:
•
Reduce
—1 $9 billioris
;
present
.«
Fed.
income
taxes to
c_
Establish
a
on
with
concessions
small
v
5 billions
corporation income,
companies,
for
to
new
raise—
5 billions
Customs levies and reasonable
inheritance taxes to raiseSocial
A
security taxes to raise_
special
war
1 billion
2 billions
debt tax; levied
-
all transactions at a very
low rate,
to raise for the
on
of
our
Total Federal
Fed.
debt-
taxes———$22 billions
Total Fed., State & local
Thus
there
9 billions
would
be
r$31 billions
a
billion
Businessmen
must
now
portunity to see something of the
way industry
can cooperate in
these past few months. But I must
admit that one of the most dis¬
couraging factors has been the
lack of a sense of responsibility
to supply its representatives with
essential information on the part
of some companies for their own
protection. The value of cooper¬
ation
has been
proven
doubt.
ities for its permanency
on
a
$125 billion level of national in¬
come, which of course is a some¬
what optimistic evaluation of fu¬
ture events,
the cessaton of hostilities.
a
Replace present tax laws with
personal
income tax which
especially in the light
the exact amount of
owned
by
all
income
spells
out
money
levels
establish
—
flat
a
25%
corporate
income tax — retain
the existing social security ratesimpose reasonable customs and
inheritance levies—enact a trans¬
action tax for the
specific purpose
of
paying
servicing
and
off
our
debt of 300 billion dollars over the
next
100 years—enact incentive
employment taxation — organize
the
of business into
owners
fective political entity
—
business agency for the
of
an
efr
set up a
collection
adequate facts on economy and
for
business
the
primary use of
Congress—prepare for peacetime
Federal
Budget.
Organize job
realize committees in every nook and cor¬
strength of united action and
participation in
such action. I have had an op¬
penditures.
is predicated
emer¬
and special war taxes upon
gency
potential force as large and as
government costing approximately
great as organized labor.
They
30 billions a year.
Balance the
are entitled to full consideration
dollar margin of safety by which
Federal taxes would exceed ex¬
This budget
it.
for
blame
a
the value of full
&
an the past.
If
happen, business will get
In short, we must simplify our
tax
structure—enact
provisions
the
single flat rate of
25 ';<>
educated and organized—they are
by government.
Ya of present- rates,
raise
to
f
the
give
about taxes because of the conse¬
State & local
dreamed of
have
that does
important immediately to wipe out all
place in our economy, with more
them the full
.AAA
2 billions.
Debt, int. & repaym't 9 billions
Total
count
reasonably good prices
such,
cupy a more
AA
Military and naval., 6 billions
v
should
Labor
government-Fed-{ direct interest in full employment.
post-war
reduction
regular monthly investment
be
30
payment of interest and the
the
were
which
should at
budget of 30 billion dollars
Civil
.
will
limit
Should
for
city, town and ham¬
resentatives
national income.
top
production
incentive
remember
that war program, then don't be sur¬
corporate enterprise employs about prised if we have greater regi¬
billion
dollars
a
year.
Beyond 90 Vo of all workers toaay outside mentation, a larger dole system,
this amount we cannot go with¬ of government and agriculture.
nationalization of industry and a
out grave danger to our country.
The farmer, should realize his more serious depression than we
in
has
our
welfare.
share
the
at
Federal:
ingenious plan for taking advan¬
tage of this exemption and invest¬
ing the "Gift" in the following
Keystone Funds: B-l, B-2, B-3,
B-4, K-l and S-2. Such distribu¬
tion
of
the
undertake
ual
(Continued from page 2430)
ment
a
enterprise
of
to shareholders of record Dec. 7.
an
Fund have totalled
national,
private
close
special year-end dividend of
$.30 a share payable Dec. 24, 1943,
$3,000 gift tax exemption
all
fettered
the
at
State and local
(Continued from page 2423)
its inception in 1938, During the
past five years dividends paid to
shareholders by Manhattan Bond
levels
ture in relation to it we
$.12 per share payable
1943, to shareholders of
13.v
ment
of production
within the shortest possible period
of time.
If we can rally all sec¬
tors of our economy around this
one basic concept and coordinate
high
share.
of
27,
A
•
ceeded in convincing you
new
General Investors Trust—A div¬
Dec.
would
common
Central
One
which
'
idend
suggested
the
is
the
committees
country and to be in¬
should
tees
its
eral, State and local..
4hey will be glad to re¬
•A.'.A/V 'AAA
for 1943.
I
contained in the
This takes in all
of
war
is
and preserve
I have
not attempted to give you a set
of easy answers to these prob¬
from total
that
have
faith
winning
are
all
us
thus
That
of
every
the
in
trust
Dividends
In addition, all of
need
worthy
courage
transforming our national economy
lems.
investors
more
we
"These
we
need of all the talent and energy
which you can bring to bear on
high points of a few
important problems
shall have to face in
the
the
and
Massachusetts Investors Trust—
length to do more than
of
all
Engineers
the country will
important role in
more
take 25%
understandable
record
.
brief,
language,
information of importance to
Dec.
Important
in
to which
burden from corpora¬
the tax
in
already
studies
in
program
broad
these fields.
great—have
suddenly discovered that what
really matters is the creation of
wealth and the provision of em¬
research
contemplates
gentlemen—and I can assure you
their influence is very
special
pamphlets
on
Aviation
Group Shares, Bank Group Shares
and Insurance Group Shares.
In
that of ironing out the peaks and
of
let
State
would
income
Southern
production
ment
jobs in
ratio of tax collections to national
&
'
with the broadest income tax
and local tax load I propose
with
establishment
itiated by business. These commit¬
sociation Deb. 5s of 1948 and Com¬
•
war
$31
national
The December Portfolio Review
of
The
policies.
billion Federal,
connection
every group
every
in
the peace
courage and inge¬
put into the war, and if
same
we
interest and
in
initiative is not stifled by un¬
our
can
i\i
$6 Cum.
high levels of
and employment • - is Pfd, Other changes were limited
only half the job.
Even if we to revisions in the percentage
succeed in our primary objective, weightings among the various is¬
we
shall still face the complex, sues. A.A
A
A.1*AAA
a substantial measure of tax re¬
i,
■
>'*
and even- more difficult task of
duction. •
;••• A >A;''-A;>A
Hare's,
Ltd.,
has
published
2.
We shall emerge from the stabilizing production and employ^,
•
nuity
of every
approach
we
sound fiscal
Group has also is¬
Railroad. News quoting the
a
if
monwealth
We must realize of
follows:
ex¬
and the
that class is 6.6%.
the favorable post-war outlook
on
.
an
on
dividend
the last 12 months
basis, appre¬
over
on
shows
give
return
on
Distributors
sued
peace-time
current
to 53%
amounts
is
will
of
is 8.2%. On a similar
a
The
payments
areas.
1936-37
2435
community of our land.
As the final plank in the program
on
highs.
of
give you
think we are
the millennium
after the war. Twenty billion dol¬
lars is a lot of money at any level
of
production
and
prices,
and
taxes will be plenty high. Never¬
theless, there are definitely en¬
couraging aspects to the outlook
going
will
return to their
•
the $66 billion average which
prevailed for 10 years prior to the
war.
But
there
appears
to be
every reason for this or a better
68%
Railroad Shares based
readily understood by all.
What we shall need is a new kind
"Encouraging Outlook"
Now
■
action by
constructive
and
government
val
burden of taxes.
,
cisive
very
In addition, de¬
of business.
compared with an estimated bud¬
get requirement of $20,000,000,000.
This
means
that
a
satisfactory
make
tt
We must set up
beyond a
for all citizens who want to work
—bring about full recognition of
the
responsibility
joint
partners—labor
capital
take rugged
It will
of
the
agriculture,
to
and taxes.
American¬
ism, ingenuity and guts, but we
do it.
can
is
And the time to begin
now.
the facil¬
Heads Bank of England
in the im¬
Directors
Committees for Jobs
and
government—as
and
both jobs
mediate future.
This program
in the country to secure jobs
ner
Needed
which I am out-
C.
if..
Norman
A •
of the Bank of Eng¬
recently
land
-
XJ
—
as
renamed
Montagu
Governor of that
OR4K
'for
Railroads Have
of
these
years,
A Great Future
designs
be begun
should incor¬
construc¬
porate the use of welded
tion
and
suitable high
tion are beyond prediction.
The
strength success of each mode of travel will
steel
with
corrosion
resisting depend upon the schedules and
The comforts
properties where found economi¬ comfort offered.
cal to do so.
The use of light which rail passengers may enjoy
closely related to car design,
are
post-war passenger car will
necessarily embody all elements
of comfort consistent with opera¬
The
tional
Those cars,
requirements.
they may be*
whatever design
of
must
meet
the
present
-
"Much
been
has
accomplished
strength
to
safety to all occupants of the car
and must be economical to oper¬
light weight equip¬
ment which to date has only been
ate. The use of
which will be
permanently retired
by the railroads must be
with concern.
Air lines
oartially developed,
can
be fur¬
thered.
studied
"The
outlook
the passenger
on
are ex¬
cessation of hostilities will
service should be that air trans¬
depend upon the immediate post¬ pecting to carry up to 70% of the
portation will become a definite
war requirements.
A large num¬ pre-war railroad transcontinental factor in
long distance
travel.
ber of cars, estimated at a million,
revenue passengers.
The aircraft Much of the overnight rail sleeper
influenced by factors over which
should be permanently retired in industries are now geared up to a
the consumers have no control.
traffic will not change.
Travel
che next 10 years, which is com¬ high production of military planes.
The enormous drain on our nat¬
between distances up to 400 miles
The larger type of military plane
ural reserves of these materials parable to the 789,600 cars retired
in de luxe coaches, if as comfort¬
can
easily be modified into lux¬
is a matter of grave concern, and luring period from 1932 to 1940
able as it is safe, should appeal to
inclusive.
urious air liners.
However, air
the longer the war lasts the more
the general public.
Therefore, it
We
hear
much
about light travel as an everyday, time-sav¬
will our natural resources be de¬
behooves the railroads to revise
weight freight equipment as a ing way of traveling must be con¬
their schedules for the benefit of
pleted, This should be considered
post-war development. Before be¬ sidered in the light of the ratio
now to a point where an intensive
the public and develop and plan
of time of flight to time required
study should be made to improve coming too enthusiastic about the
;he construction of post-war light
to travel between business centers
the drafting of locomotives, look¬ possibilities of light weight freight
weight coaches which will enable
The total cost
equipment let us examine the and the airports.
ing toward the utmost economy of
;hem to meet competition.
of travel versus the comforts en¬
fuel for both new and existing problems confronting the design¬
ers of such equipment.
The. major joyed will, to many travelers, be¬
Central Research Advocated
locomotives. The modern locomo¬
come the influencing factors when
tive tender requires such a large problem confronting the designer
"There is a great future in store
of freight equipment is that of choosing
between air and rail for a central research and testing
capacity for fuel and water in
control
of long
trains at high transportation.
A major portion
order to avoid stops, that it nearly
laboratory, owned, operated, and
approaches the actual weight of speeds. The average freight train of the traveling pubiic will de¬ controlled by the railroads. Up to
the locomotive itself.
Undoubt¬ mnnage and length in 1940 were
;his time all our investigations
of fuel economy, but
the situation with respect to coal
and fuel oil after the war may be
the way
in
•
for
ment
require¬
provide
,.
.
upon
.
349
edly this weight could be reduced
by the use of improved materials.
"For
•
roads
number of years
a
have
be
and yard locomotives
with Diesel electric units because
flexibility
govern
\
"The electric locomotive,
of
much
discussion
and
be
brought to
speeds.
a
jf
weight
is particularly un¬
freight car
for high speed service,
the
the
braking force provided in
cars
ranges
the light
on
50 lbs.
from 60 to 75% of
weight of the car based
cylinder pressure.
"Considerable
work
research
will be necessary before
an
ideal
light weight car, capable of meet¬
ing all of the requirements of high
speculation over a number of speed train operation is placed in
To facilitate work of the
years. -In many respects it seems- service.
to be an ideal system of trans¬ designer it would be well to con¬
sider
portation, but the important ques¬
classifying
light
weight
tion of economy is a large factor freight equipment into two groups.
in considering its adoption.
This
"Group 1—Cars to be used at
type of engine seems best adapted
to highly congested areas where moderat^ train speeds to increase
the
ton-mile
revenue
and
de¬
power is available at rates that
signed to carry bulk commodities.
Will permit operation within an
"Group 2—Cars to be used at
economical
range,
such as the
high speed in long trains to carry
electrified portion of the Pennsyl¬
express freight.
vania Railroad between New York
and Washington.
.
■
"The first group
cars
Turbine Engines
should
be
of light weight
to take
designed
advantage of the newer material
"Many people have felt that a and recently developed methods
turbine engine would be the ulti¬ of construction. The nominal load
mate as a prime mover for the limit of these cars should not ex¬
railroads and experiments along ceed three times the light weight
this line have continued over the of the car unless some kind of
braking arrangement is
years. Mostly they have developed special
along. the lines of turbo-electric developed to overcome the stop¬
locomotive ping difficulties. The second group
of light weight cars should be de¬
ago.
There is now under way a signed to meet the high speed
service requirement forced upon
comprehensive study of the po¬
railroads
by
competition.
tentialities
of
the
gas-powered the
turbine for use in locomotives and These cars should be capable of
engines and in fact
a
of this type was built a few years
controlled in long trains
with the same dispatch as are pas¬
inclined
type of senger trains.
while it is too early to make any
positive predictions, I
to
the
belief
that
am
this
tremendous possi¬
economical, simple,
and effective prime mover.
power
offers
bilities for
an
Replacing Worn Out Equipment
"The vital question of
iation of
our
rehabili-,
railroads in the post-
some
suspicion that influ¬
have been exerted.
if for no other, a
testing
plant
would have a beneficial effect on
might
ence
For this reason,
railroad-owned
Further¬
all associated industries.
it would tend to avoid
duplication of effort where sev¬
eral organizations may be work¬
ing on the same problem, : each
more,
without knowledge of the Other's
activity."
Feed Import
By
a
;
..
•
Bill Approved
roll-call
vote
of 255
measure
to
poultry for a period of 90 days.
The list of feed which
would be
permitted to be brought in tem¬
porarily without a tariff includes
wheat, oats, rye, flax,
and hay, to be
corn
livestock
attempt
and
to
cottonseed,
used only for
poultry
eliminate
from
vigor¬
protests from a group of
ous
west
An
feed.
corn
the list was defeated over
Representatives,
mid¬
':
125,000 New Freight Cars
Needed
"A long range
building program
of new freight equipment calling
for
the
construction
of 125,000
cars
COMPANY
AMERICAN LOCOMOTIVE
.
New York
and the retirement of a
similar number of old cars yearly,
8, N. Y.
-iic.;--
PREFERRED DIVIDEND NO.
There has been
of
one
declared, for the quarter year ending
dollar seventy five cents
($1.75)
142
December 31, 1943, a dividend
share upon the shares of this
per
Company's
Consolidation of American
Locomotive Company, American Locomotive Sales Corporation and Transamerican
Construction Company filed in the Office of the Secretary of State of the State of
New York on September 3, 1943) issued and outstanding, payable on December
28, 1943, as to shares thereof held of record at the close of business on December
20, 1943, to the holders of record thereof at that time, and payable as to all of ;
said shares which shall not be held of record at the close of business on December
20, 1943, to those who shall first become the holders of record thereof on the date
on which
they shall become such holders of record or on December 28, 1943,
Preferred
Stock
(authorized by the Certificate of
whichever shall be the later date.
COMMON DIVIDEND NO. 71
!
the shares
payable on December 28,
1943, as to shares thereof held of record at the close of business on December 20,
1943, to the holders of record thereof at that time, and payable as to all of said
shares which shall not be held of record at the close of business on December 20,1943,
to those who shall first become the holders of record thereof by reason of the surrender
There has been declared a dividend of
fifty cents (50^) per share upon
Company's Common Stock issued and outstanding,
of this
by them of (a) certificates expressed to represent shares of the
Preferred Stock of this
consolidation and merger of
this Company, American Locomotive Sales Corporation, a New York corporation, and
Transamerican Construction Company, a Delaware corporation, which was effected
on September 3, 1943 or (b) scrip certificates in respect of Common Stpck of this
Company on the date on which they shall become such holders of record or on
Company that
December 28,
was
Transfer
Bankers Trust
outstanding immediately prior to the
1943, whichever shall be the later date.
books
will
Company
not
on
closed. Dividend checks
will be mailed by the
December 27, 1943.
-
December 10, 1943
be
,
'
a
permit duty-free im-
portation of feed for livestock and
labora¬
30 Church Street
to
55, the House passed on Dec ■8-
DIVIDEND NOTICE
being
new
harbor
The brakmg
empty and load limit
a
is
ship, enabling us to maintain the
integrity so necessary in any un¬
biased
investigation.
However,
there are those who will always
stop
desirable
deriv¬
ing its power from overhead or
third rail systems, has been the
source
he
the
reproach in their relation¬
above
the
provided in freight cars b'e.ng based upon the light weight ol
.he cars, introduces a problem in
;he
design of lightweight cars,
especially if such cars are in¬
tended for efficient high speed
„ervice.
The difference between
improv¬
ing their product and will un¬
doubtedly continue with refine¬
ments
that
will
improve their
■ended,
can
and
power
been steadily
service, but the ultimate progress
of any equipment dependent upon
high grade fuel oil will depend
upon the world supply of crude
oil when this exhaustive war is
train
Jrom various
streamlined, nametrains, and a few heavy duty units
arp now in service for the road
hauling of heavy freight trains.
The builders of this type of equip¬
of lightweight,
ment have
weight
power
x
in
olace
have
volved
train.
braking
available in a long train
the distances over which
The
and
t^ken
the
laboratories
The throttle and
tram.
a
of control of a moving
high per¬
centage of availability of this lat¬
ter type of power.
Their use has
also been extended to the hauling
the
iave
research
companies in¬
been
completely
associations with private
at a
number of
DIVIDEND NOTICE
maintained
It should be recorded that in our
constitute the only means
orakes
switching
of
such
.n
^steam
mand low cost transportation
reasonable speed, but a
universities,, or
dynamic forces present
the
3ver
respec¬
cars,
pends on the control
the rail¬
been replacing
49.7
The speed at which a train
operated with safety de¬
tively.
can
Diesel and Electric Engines
and
tons
tories of railroads,
private industry, from all of whom
we
have received complete co"The possibilities and future of
•oeration and satisfactory results,.
air and rail passenger transporta¬
(Continued from page 2417)
war period should be taken up at
will increase after the war
and the power used to haul such this time and plans made accord¬ weight materials, such as plywood,
Our railroads are quickly aluminum as such, or in combina¬
equipment should be fast, power¬ ingly.
and surely wearing out the avail¬ tion with other materials, should
ful, and flexible, but may be
able equipment handling a tre¬ be encouraged where comparable
lighter in weight than engines
mendous volume of freight.
The strength with lighter weight can
used to haul heavier equipment.
to be obtained.
The use of lighter weight, stronger present situation is parallel
1928 and 1929 which was followed
metals, fusion welding instead of
Air and Rail Travel
T
by the period of railroad inac¬
riveting in the boiler, and other
-'The development of post-war
refinements
in accessories will tivity. The number of freight cars
available in 1929 was 2,277,500. rail passenger transportation will
permit stepped-up power to han¬
The number of cars now available be governed largely by the de¬
dle such traffic at any desired
is approximately 1,710,000, which mand.
The American public is
speed.
/ „
indicates
a
decrease of 567,500 becoming air minded and the loss
cars.
The number of freight cars of passenger traffic and revenue
Fuel Supply Is Grave Question
.senger,
resort to
air transportation.
should
cars
The
now.
first class travelers may
should be con¬
Work, on the designs
eight
templated.
Thursday,'December 16, 1943
FINANCIAL CHRONICLE
THE COMMERCIAL &
2436
John D. Finn, Secretary
Volume 158
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4238
DIVIDEND NOTICES
CORPORATION,
ARUNDEL
THE
Baltimore,
The
of
Board
poration
Md.
Directors
of
Arundel
the
the
dence, dissension, mistrust, loyalty and so. on down the line. When
group reacts in any of these ways we call it "atmosphere."
Ten
exert a stronger mental influence on the eleventh than will
two. A room full of depressed people can create gloom so thick you
can almost feel it—surely
it can be seen. We all have noticed the
stock, of the
Company, payable December :28, 1943,
to stockholders of record at the ;close of
business December 18, 1943,
^
V
■■■'
£■ R. M. Waples, Secretary
the common
on
DIVIDEND NO. 178
payable
of
holders
23,:
December
U
*
''
'V
:
:
share
per
been
of this Company has
1944
15,
January
record
'>
cents
seventy-five
the capital stock
declared
:
of
the iclos©
at
stock¬
to
of
JOB
business
w!
UDELL,
Treasurer.i '
cessful
Corporation
United Shoe Machinery
i
The
of this Corporation have
dividend of 37y2c per share on
Directors
clared
a
1944,
December
1943.
14,
*
•
WALLACE
:
;
M.
■
.
.
KEMP.
THE
can
prove
men
as
fundamentals
the
are
(Continued from
Richard
of
D.
&
page
Young,
Detroit
the
Weeks
office
Harden,
opening of
effective
Dec.
of
-i.'■ "
kiss
arid larger
is
member of
a
Stock Exchange.
",-
sj>
..
s;s
annual meeting of the
Bankers Club of Detroit, Ernest
C. Harris, Vice-President of the
Federal Reserve Bank of Chicago,
in charge of the Detroit branch,
At the
;
was
named President for the
suing
in the 10-year period
following World War I—"a policy
monetary
of
sion."
year.
Otto
which
disintegration,
and depres¬
trade
'•
"England already has formed a
corporation to corner the world
cotton market, and Australia has
developed the largest steel plants
in
the world, planning; a high
tariff protection after the war,"
he declared.
" :
1
Wisner,
The
St.'
on
decision
by
rendered
named
the
to
*.
:
lar,
which
new
4
statistical
comparisons,
had upon request from
& Co.
'
National
Detroit
move
predict that
into the bank's
main offices
Fort
J.
be
3.75%.
and
on
the
Congress
corner
shortly
year.
i
H.
Brooks
&
in
Co., members
and
managers
large
insurance
which
In
was
had
watched
further
the
of
the Brooks
Building.
it
issues
of
Central
seeking
similar
Vermont
Monday's
shares
of
Central
type.
P.
offering
Vermont
ployees.
Another important action taken
195,000
by the Senate Committee on Dec.
14 was its approval of the provi¬
sion in the House bill requiring
the
Service
Corp., marking the first strict ap¬
plication of the Securities and
Exchange Commission's U-50 Rule
to a utility stock sale, struck a
ing
syndicate
certain
such
received but
embracing
32
ury,
a
underwriting
was
investment
ter
bankers
tender
and
the
at
the
gates
wa¬
of
an
irrigation dam. "He sees that the
right amount of water gets into
each
field,
and
one
highly important job
a
which I
it
take
will
we
be called upon to do," Mr. Folger
said. "A reasonable amount will
flow
to
we
foreign fields," he
must
it
to
see
said,
that
our
own
valleys and farms receive the
neqded and precious irrigation. If
send
we
of
part
supply of
let's try to
Our
capital for foreign use,
be a prudent water tender
not
flood the
Speaking
with
on
Henry
and
desert."
the
G,
same
Riter,
program
Chairman
of the National Association of Se¬
curities
tory
Dealers,
the
organization
of
self-regula¬
investment
banking, Mr, Folger urged those
in
the
business
to
support
both
organizations.
Commending the
regulatory activities of the NASD,
the
IB A
President
existence
very
said
that
: indicated
its
that
bid
houses.
rejected
as
on
Dec. 9 that,
made in
the Senate
Committee,
the
bill's
revenue
yield was reduced from $2,140,-
un¬
of
result
changes
bill
House
the
The
by
$1,9)23,000,000.. The pro¬
pari-mutuel
satisfactory and the investment
.000,000 to
world
posed House tax on
step
is
waiting
for
betting was rejected as were in¬
creases in third-class postal rates
and rates on several other excise
issuer.
the part of the
on
next
the
The latter, according to reports,
had been in negotiation with Bos¬
levies.
ton bankers for direct sale of the
The Senate Committee had con¬
stock
before
bids.
It will be interesting to see
it
sought competing
public hearings on the
cluded its
Dec. 6.
whether the SEC, in this instance,
tax bill
will forego
Passage of the House bill was
noted in our issue of Dec. 2, page
the;rule and permit
negotiated sale.
'v
>'
■.
Little
;
•
a
7
57
;<
set
a
'
new
issues placed
on
those
ferred stock for the
Co.
record for new
the market.
who
registration covers likewise
marketing of corporate se¬
curities will find little to gloat
in the figures
over
that
nancing
contributed
all
minor part of the
very
preferred will be of¬
"rights" to
common
shareholders
with
underwriters
fered
fi¬
but
a
on
having agreed to take down any
unsubscribed portion for public
aggre¬
gate of $11,052,930,000 shown.
'.
sale.
The Treasury's war financing
was a
"strong and vigorous
impulse in the business to stand¬ reaching the staggering total of
ardize good practice."
$10,963,566,000 made up the bulk
of
the month's
business, while
State and municipals contributed
A. J. Lord On Bd. Of
$20,530,000.
Andrew J.
Lord
was
elected
Corporate
a
member of the Board of
can
of
Allied
Business
Fund, Ameri¬
Shares, and Union
Trustee Funds.
underwritings
$68,834,000 for the period
shown to have
run some
000 under the monthly
at
O.
Ohio
serves,
$6,000,-
in
who
are
•
Preferred
registration
sion
recently
suance
of
covers
Allan
average
with
Van Wyck, Presi¬
week.
bankers
expected to bid for the
to
seek
their opinion on
timing of the issue.
the
Securities and Exchange Commis¬
projected is¬
101,389 shares of $100
refinanc¬
plans to confer with
He
The only substantial new issue
placed
huge $65,000,000
The
ing program of Illinois Power Co.
is being held up pending agree¬
ment on questions relative to re¬
bonds
S.
Co.
Illinois Power
dent, disclosed late last
were
for the year up to September.
be^re-
The new
since it de¬
non-corporate
stock which may
quired for conversion of the new
preferred during its life.
the
velops
Standard Oil
of Ohio.
The
in
specialize
convertible pre¬
cumulative
par
common
But
'.-V- i:
'
.
Nourishment
September, according to a com¬
pilation just released by the Se¬
curities and Exchange Commis¬
sion,
2206.
on
there
Managers Of N. J. Bank
coop¬
annual
the Treas-
with
estimated
was
a
as
of
England
parallel between the
a
returns
'
It
ing power."
labor unions, farm
financial
bank¬
a
tax-exempt organizations,
as
eratives and others, to file
v''v
1
company
to
keep these taxes
automatically increasing to
on
both employers and em¬
2%
Public
action
tax
from
Stock
of
security
movement
new
stock
common
social
$5,000,000 to
$10,000,000 to
on
on
sponsored by Senator Vandenberg (Rep., Mich.,) who twice
before (in 1941 and 1942) led the
away
of
re¬
approved by the House
8% for the first
follows:
as
The
.
S.
capital in
from 5 to
retained the
$200,000,000
was
at
under¬
after
the credit
invested
$5,000,000, 6%
$10,000,000, 5%
$200,000,000."
and the
should prove a guide to
in
were
success¬
price
Trib¬
the committee
existing 5%. The other credit
corporate
the
a
14
Dec.
"Herald
4%,
care¬
now
the
the
action,
of
of reducing
-on
of
excess
bid
was
year,
was
York
"Instead
to the immediate
for
this
to
dispatch
New
allowance
issue,
the
financing between
close
lOQV*
at
respect
the
ductions
been
as a cue
outlook
rate. The increase
une," by; Samuel W. Bell, said:
asked.
consequence,
fully
freezing
security payroll tax at
to
concession in
a
after
soon
-which
amendment
an
Washington
the
pricing oil the part of the bankers
without saying, since the
bonds
were
quoted
over-the100 Vz
14, the
the main
did, however, amend
provision relating to
With
under
goes
and
Dec.
on
approved
invested capital excess profits tax
credit.
"remaining unsold bonds.
counter
in
social
House
of
group
a
absorbed
latter
That there
session
group
group
companies had
agreement
an
the
before
in the corporate
profits tax rate was agreed
to, while' the 80% overall ceiling
was
left unchanged. The Senate
syndi¬
disclosed that the
reached
floor
excess
100%, to yield approximately
3.72%, the bonds were reported
moving slowly following formal
offering. But late on Tuesday
cate
but
to 95% from 90%
at
was
Senate
its present 1%
the offering group
the largest New York and New
director
Scranton, Pa., located in
the
77
Priced by
it
measure
report is not expected
the
its
voted
participate in the busi¬
:
at
provisions
of
the
House-approved tax bill and also
yield basis of less than
a
snag.
Managers
of
the
Morris
County Savings
of the New York Stock Exchange,
Bank, Morristown, N. J. Mr. Lord
will admit Harold B. Robinson to
is President of
Lord, Abbett & Co.,
partnership in their firm on Janu¬ Inc.,' New York; Chairman of the
ary 1st.
Mr. Robinson will make Board Research and Management
his headquarters at the firms of¬ Council, Inc., and President and
fice
Ira Haupt
"
of
J. H. Brooks To Admit
circu-j
may
of
difficul-
to the war, executives
after the first of the
interesting
contains
T.
$
-
Manufacturers
the
Bank
■>
remodeling
they will
the
the New York Stock Ex¬
Copies of-this-
ties due
of
<
-
change and other leading national
-
Charles
Jr.y of the National Bank
Detroit, was re-elected to that
body.
reorganization- plan
landmark in railroad re¬
exchanges.
,
was
commit¬
of
organization, according-to an in¬
teresting circular on the situation
issued by Ira Haupt & Co., Ill
Broadway, New York City, mem¬
bers of
Bank,,
Fisher
the Chicago, Mihv&ukee &
a
State
executive
President
and
tee
Paul
marks
George B. Judson of
Wabeek
the
Despite
ICC
77
President
CGO, Milw. & St Paul
Situation Interesting,
on
been
corporation
were
"That accumulation spells invest¬
"but
President of the
Detroit, was
elected Vice-President, and Wil¬
liam
Thomas, Treasurer of the
Detroit Trust Co., was re-elected
Secretary and Treasurer.
prevailed
to
man
(Continued from page 2414)
en¬
Bankers Trust Co. of
show
stagnation
reticent to
ness
companies
At
Senate
the
that
indicated
was
insurance
single bid submitted by
Baker,
He drew
indications of re¬
verting to the type of policy which
led
it
big
The
6.
the New York
v
kill off the other fellow
three
or
2420)
announced
new
The company
Prof. De Haass believes nations
to
two
a
manager
offices at 1556 Penobscot Bldg.,
goodbye to our lend-lease ad-?
vances," he said.
"We can also
kiss goodbye to our investments
already
for
same
Folger On
and the
in Latin America."
IN
himself.
one
be
when
can
OUT
.
their ability
we
and he is
men
The
■
sure
RIGHT
for fifty. Leadership that brings success is nothing more
good health backed up by character, some sound experience in
the field of endeavor where you happen to be striving, plus enthusi¬
astic enterprise.
\
as
quite
BROUGHT
or
the
am
ARE
IRONED
ARE
than
given in the New York
"World-Telegram" further quoted
Prof, de Haass as follows:
"I
since
to
has
writing the $2,~
on
Christmas week.
25-year
finally put
The United Press accounts from
<
expected
reach
the
recess.
revenue
formal
to
of
writers
to pay.
Boston,
THINGS
THEY
its
whether
be enacted before the
week
a
000,000,000
embrace
first
bonds, had been
prove
a
"worker"
$42,000,000
mortgage 3%%
doubtful
Committee
work
and
which
economic and financial structures
countries
WAY
AND
The
The Utah Power deal,
ing
is
planned Christmas
issues which
practically
utility
works
And
shop,
tionships, gave a warning to bank¬
ers to keep their money at home
and not put it in foreign invest¬
ments.
He further warned that
been re-established
THIS
the
fully placed.
success.
reported by United Press
dispatches, J. Anton de Haass,
Professor of International Rela¬
have
IN
OPEN
coming generation have a word for it—they call it "in the
groove." When an organization get's that way it's on its way to
Dec. 9, as
made with caution and only
an
The
the American In¬
Banking in Boston on
should
into
men
large
in
are
it
measure can
ready for bids.
his
In addressing
investments
other
not. as yet completed action
its version of the 1943 tax bill
and
unexpectedly quick clean¬
of the Utah Power & Light
up
OUT, AS THEY SHOULD
BE, IN A STRAIGHTFORWARD, FORTHRIGHT MANNER.
There
is no growing cancer of disintegration in his organization. He treats
Warns Harvard Prof.
post-war
same
'
•••'v»
Money At Home
of
A
•
abundance, where whispered
THEM.
stitute
Competition,
We know of one successful sales-manager who has done a good
job of constant building and increasing his success right through
the past ten years, who has made it a cardinal rule to tell his men
that IF THEY HAVE ANY COMPLAINTS, TO COME OUT WITH
Treasurer
..
ALONE.
DO
organization where complainers are
conferences early in the morning
take place behind the sales-manager's back, where mistrust and
gloom prevail, and these good men will nearly always deteriorate
into the same class as those around them. They say, "one bgd apple
can spoil a barrel," sometimes this is even true of sales organizations.
in
record at the close of
stockholders of
to
COULD
USUALLY
men.
Put the
:
.
de¬
the
Prelerred capital stock. They have also declared
a i dividend
of 621,fec per share on the Common
capital stock. The dividends on both Preferred
and
Common
stock
are
payable January 5,
business
THEY
THAN
atmosphere, rhythm,, stimulating ideas, progressive thinking and
doing, these things make successful organizations and develop suc¬
~J.
1943.
LIONEL
He came
establish his reputation for fairness and
justice so that his integrity cannot be questioned, he must inspire
the men around him to get more out of their day's work than the
usual satisfactions that most jobs provide; in short, a good salesmanager must provide LEADERSHIP.
Good salesmen when placed alongside of other men who are
doing a good job, in a cheerful atmosphere, where plans are
always being made and new stimulating ideas for the promotion of
business are constantly undertaken, WILL DO AN EVEN BETTER
UNITED FRUIT COMPANY
on
financing, brought to market
last Friday, was viewed as open¬
ing the way for consideration of
and the firm, he must
men
.-
;
the music.
home and lai# the foundation for a system of football that
became a rhythm <of success. Team spirit, coordination, and some¬
thing they now call "know how," are as old as history. It is the basis
for every successful sales-organization as well.
A sales-organization is like a team, or a regiment.
The sales
manager is the coach or the general.
He has the same problems.
He must train his men, he must lay out their plans of campaign, he
must settle their differences between each other and between the
special 'meeting of the Board of
Palmyra, N. Y., this
day, a dividend of 50^ per share was
dividend
an
back
a
A
of
with which the dancers followed the swing of
Directors, held in
has
Co.
inspiring speaker on a large audience—there is some¬
thing herd-like in the way groups react to different stimuli.
Knute Rockne saw a musical comedy, and noticed the precision
December 14, J943
'/■%■
ing
effect
COMMON DIVIDEND No. 270
on
An
minds
Packing Company
declared
The Senate Finance Committee
REPORT
a
The Garlock
At
On New Tax Bill
REPORTER'S
There is something contagious about success or mediocrity. The
same holds true for most of the emotional reactions such as confi¬
has
as
Sales Organization
a
Cor¬
this. day declared 25 cents per
regular
quarterly, dividend and
50 cents per share as an extra dividend on the
no
par
value stock of the corporation issued
and outstanding, payable on and after Decem¬
ber 27,
1913, to the stockholders of record on
the;corporation's books at the close of business
December 17, 1943.
.
.
1 '■*»>■
JOSEPH N. SEIPERT, Secretary.
share
Of Teamwork In
The Importance
>
December 14, 1943.
i
Senate Group Acting
OUR
The Securities Salesman's Comet
of
Notice
Dividend
2437
ences
will settle
whether the
dertaken
year,
financing will be un¬
before
it was
Such confer¬
the question of
the
indicated.
end
.
of the
Restoration Of American Freedom Pattern
Royal Bank of Scotland
World Liberty:
1727
Incorporated by Royal Charter
Bricker
For
Insurance & Bank Stocks
Bought
i",
ANALYZED
(Continued from first page)
OFFICE—"Edinburgh
HEAD
Branches
cooperation with the nations
in the days of peace,"
Governor Bricker said that "only
in that hope- and confidence can
full
Scotland
throughout
OFFICES:
LONDON
plan or establish a just order
international relationships. A
confidence in the people, and their
leaders in the years ahead, as well
Bishopsgate, E. C. 2
3
we
of
E. C. /
8 West Smithfield,
Charing Cross, S. W. !
49
Burlington Gardens, W. /
that we
do not attempt to place this or
any other, nation in an interna¬
tional strait-jacket."
:
Associated Banks:
Governor Bricker, who
"our peace must ulti¬
by
that
added
Co.
Zealand
Australia and New
BANK~ OF
WALES
1817)
(ESTABLISHED
£8,780,000
Capital
Paid-Up
6,150,000
8,780,000
Fund -J
—-—
Liability of Prop.
Reserve
Reserve
£23,710,000
30th
Aggregate
Assets
Sept., 1941
understand¬
the people of
"We want,"
continued, "no super govern¬
he
SYDNEY
George Street,
oldest
South Wales Is the
bank In Australasia. With over
all States of Australia, in
and largest
branches In
B70
Guinea,
Zealand, Fiji, Papua and New
New
and
London,
and
efficient
and
traders
it offers the most complete
banking service to investora,
travellers interested in theaa
precise form it
may take,
can wield a tremen¬
dous
influence toward peaceful
solution of the international prob¬
zation, whatever
LONDON
OFFICES:
led to war," the
main
NATIONAL BANK
V
Cairo
Office
Register No. 1
realistic."
"if America is to re¬
force for good
world, if our people are.
continue to enjoy self-govern¬
to
Cairo
to
LONDON
6
and
.
.
£3,000,000
.
£3,000,000
.
.
AGENCY
King William Street, E.
7
Branches
in all the
principal
Towns
C.
EGYPT
and
the
in
NATIONAL BANK
of INDIA, LIMITED
to
Kenya
1
Government
the
Colony and
in
Uganda
reversed by the Amer¬
are
people, they will unmistak¬
ably lead this nation to National
Socialism." From Gov. Bricker's
remarks
26, Bishopsgate,
London, E. C.
Office:
Head
"In
in India, Burma, Ceylon^ Kenya
Colony and Aden and Zanzibar
Branches
Paid-Up
Reserve
The
Bank
Fundconducts
of
banking and exchange business
Trusteeships
and
Company offers attractive
speculative possibilities according
to
an
interesting memorandum
prepared by Lawrence H. Klybert
of the Brooklyn, N. Y. office of
Josephthal & Co., 189 Montague
Street.
Copies of this memoran¬
dum may be obtained from Jo¬
sephthal & Co. upon request.
Outlook For Bank Stocks
Laird, Bissell & Meeds,
120
Broadway, New York City, mem¬
and
other
Stock Ex¬
leading
ex¬
changes, have prepared an inter¬
esting
circular
entitled "Bank
Stocks and Their Outlook." Copies
of this
the
circular may be had from
firm
upon
request.
de¬
encour¬
denied
the
Open our courts
deprived of
who have been
rights by orders and direc¬
and where redress is now
their
The outlook for securities of the
change
be
ments be restored to their proper
to all
Interesting
bers of the New York
initiative
that
mand
tives
Moxie
should
everywhere
people
place of power.
Executorships
also undertaken
Moxie Outlook
awakened new faith the
that
business,
including
business, be strengthened,
and that State and local govern¬
——£2,200,000
description
an
or
discouraged.
shackles
of
We want
bureaucracy
re¬
moved and the creative genius
our
of
"That ge¬
"will not be
people set free."
nius,"
declared,
he
released
and investment
will not
banking institutions.
,
-1
ii'i—————*
^Bank Stocks
and their
Outlook"
Circular on Request
year's operations. During the year
a
milestone was reached in the
we
standards of
our
people.
creed both
..
This is an American
today
embraces
and
a
after victory.
philosophy
basic
It
the sale of securities,
on
amounted to $2,652,000 for
which
months, after taxes, equivalent
to $1.33 per share. This compares
with
.security
losses
in - 1942
11
of amounting to $1,289,169, or $0.65
per
A-'V
-vV
share.
operating earn-
estimated
The
■/
*
"
If
assume
we
and for building an
orderly peace.
for¬
America needs a forthright
eign policy. There is nothing mys¬
terious about foreign policy. There
no
can
it
Our foreign
secret formula by which
be
determined.
adaptation of
domestic
policy to
policy should be an
farsighted
world relationships.
Honesty, fair
dealings, promises wisely made
and faithfully kept know no geo¬
We meet
timate
tonight assured of ul¬
The cost will be
victory.
property
forces
of
heart-breaking.
freedom
move
inexor-
increas-:
by 10% as
leading, banks by merely
ing their 1942 'figures
'
follows:
Operating Earnings per Share
Current
1942
Bank
of
$2.00
"20.70
Manhattan-—
of
Bank
York—i
New
Bankers
22,77
Trust
Central
Hanover
— -
& Trust
Bank
Chemical
National
Commercial
:
Exchange
First
—
3.30
—
_v— ------
16.28
"'National
Public
United
"As
117.06
80.00
0.60
0.92
4.43
2.40
1.00
6.67
3.50
78.83
by balance sheet.
be noted that
12.00.
i7.9i
■
1.50
86.76
"1
70.00
City Bank Farmers
""Includes
estimated
2.00
.
3.14
"2.85
Trust—
indicated
It will
2,40
;
6.06
National
States
3.63
:
2.18
City
New York Trust
'
o.BO*
0.84
Trust (common)-——
Manufacturers
;
1.25
15
-
8.00
4.03
'
Trust
180
,
14.20
106.42
National;
Guaranty- Trust;—
Irving
1.14
/
1.40
;
2.95
.
12,91
—
Continental Bank & Trust
Corn
2.68
—
1.40
4.00
1.99
i.8i
—
■
14.00
6.34
5.76
'C—A—
$0.90
.
3.73 -rx
3.39
'.r——„—
Chase National
Dividend
Est. 1943
S1.81
Trust.
and of the further
great demands that may be put
transpired
alone,
which upon the banking, system in the
"
1 :
graphical lines and are not spoken presumably will be quite substan¬ post-war years.
Meanwhile, the steady upward
in any one language.
A sound tial, cover current dividends re¬
trend
in
deposits
persists, as
American policy in international
quirements by a generous margin.
shown in the following figures re-*
affairs means that we shall deal as The widest
coverage indicated by
a
strong independent nation and the above estimates is by Bankers ported by the New York Clearing
that other nations of the world Trust with a ratio of 2.66, while House Association:
deal
shall
with
us
on
the same
net
operating
without
earnings
profits
security
Amount1"
is by
with a ratio
Such a postive ^policy must be of 1.24. The average ratio for the
followed in the years ahead—that 17 banks is 1.78. It is of interest
America's voice might be.- heard, to note, in the case of The Bank
basis,
v.
•.
the
narrowest
coverage
-
i
United States Trust
fields, restore their homes.
All
people of the world must get
down to hard wotk and work con¬
the
(Continued on page 2442)
§(000,000)
16,389
.■
%
Dec.
July ; 2,'1942—
Oct.1, 1942—-i-
1941—
31,
Novl'5,: 1942L——
Dec'.;
f>3, 1942_'----
30, 1942——
'''
J an."' 7 ,' 1943_ - - i _
Dec.
May
•
"4 6,' 1943:--J-
16,551
16.935
17,935.;
:
"".•TS,308
19,857
20,043
f.
20,603
:
"
>
,
Amount'
:
'
Date—
June e3,
S( 000.000)
-
1943—.—
20,883,
.
\
Aug. " 5,
Oct.
Nov.
Dec.
Dec.
1943
4, 1943—-2, 1943—2:
9, 1943—
and
.
•
'
20,153
1,1943
1943—1
Sept.2,1943-—
July'
f"
>
19,962
'
20,223
,
21,937
22,983 "
7,
.22,381
'
'■
>
22,073
interest to remark that
It is of
in
great expansion in
this
'
!
'
the figure of $22,983,266,000 reT
view of the
ported for Nov. 4, 1943, is the
the business of
other leading banking highest in the history of American
policy
structive
Date—
I'
our
and
As the structively and hopefully.
stupendous and the toll of life
that the 1943 ex¬
perience of Bank of Manhattan is
fairly typical, we can develop an
interesting tabulation of estimated!
1943 net operating earnings for
Net
position respected, our '-nation of "-Manhattan; that ' estimated net'
defended and our people kept operating earnings plus security
cover
dividend require¬
from taking too much of the in¬ proud of our position among the profits
nations of the world. Such policy- ments
approximately 3.7 times;
come of the people for the ordi¬
will recognize that a prosperous which
would indicate that - the
nary functions of Government."
America
requires a * prosperous bank's capital funds and reserves
(As indicated in our issue of
world.
It will recognize that in are being built up at a rather sat¬
Nov.
18,
page
2022, Governor
rehabilitating America th^ rest of isfactory rate. Although such con¬
Bricker
formally announced on
the world must also be rehabili¬ servatism in the matter of divi¬
Nov. 15 that he would be a can¬
tated. Peace throughout the world dends
may seem
somewhat ex¬
didate for the Republican Presi¬
must be built upon the right of
dential nomination in 1944.)
treme, on the other .hand it would
other people to live their lives,
Text of Dec. 11 Address
build
their
cities, replant their appear to be a sound and con¬
encouraged unless Government
refrains, from regimentation and
be
what may rea¬
preview of the banking situation and indicates
a
sonably be expected of other leading
realized
must lift ever
higher the moral hnd spiritual
Third,
is
also quote:
small
—£2,000,000
every
we
aged;
-£4,000,000
Capital:
Capital
Subscribed
totalitarianism.
cal
ican
Bankers
vides
.
Government government at home and abroad,
has launched upon a course lead¬
■v-'. ,:.■>/
i
■.Vv>,;
ing to the destruction of our form
Turning first to our position in
of government and to the loss of
the post-war world, we are en¬
our freedom.
It is high time
that we awaken to the fact that couraged by the conferences that
have been held with our allies.
the war is being used as an ex¬
cuse
to further many dangerous They strengthen the war effort
and assure unity of action. They
pre-war policies.
We have been
set a pattern for developing mu¬
living for a decade under a grow¬
tual understanding among nations
ing absolutism. Unless these pol¬
icies
is
Company, a full month ahead of the others. This meeting and report
studied with especial interest, since it pro¬
...
SUDAN
meetings
history of the company when its
Laird, Bissell & Meeds
We have had faith total resources exceeded one bill¬
Members New York Stock Exchange
ourselves, faith in our Govern¬ ion dollars, being reported at $1,120 BROADWAY, NEW YORK 5, N. Y.
ment and faith in Divine Provi¬ 016,274,304 on the Sept. 30 state¬
-Telephone: BArclay 7-3500
dence.
Bell
Today America needs a ment of condition.
; ;
Teletype—NY 1-1248-49
(L. A. Gibbs, Manager Trading Department)
strengthened faith.
To achieve
Based on actual figures for the
that faith we must meet a three¬
first nine months and estimated
fold
challenge beyond winning
figures for the last three months, ings of $4,000,000 are higher than
the war.
>;
/■;'V" net
operating
earnings
will those of 1942 by $376,043, equiva¬
First, we must devote all our amount to approximately $4,000,lent to an increase of 10.3%, in
ability and energy to establish
000, equivalent to $2 per share, spite
of
the fact that taxes
a just and
lasting peace in the compared
with
$3,623,900
for charged against ■ operating earn¬
world., vvi-'"V
'
i;.
1942, equivalent
to
$1.81
per ings will exceed 1942 taxes by
Second, we must set America
share, and $1.37 in 1941. These more than $1,000,000, or $0.50 per
free from economic and politi¬
figures do not include net profits share.
.v :
Federal
"our
annual
in
for
"During the past 10 years," he
said,
stockholder's
bank
December by The Bank of The Manhattan
mighty faith.
the
returned
and
people."
FULLY PAID CAPITAL
RESERVE FUND
strength and honor of our
nation
have
stemmed
from
a
the
representatives ; of
reaucrats
elected
of
worthy of their
The
*
-
determination
character of our nation.
ment, policy-making power must
be taken from the hands of bu¬
of EGYPT
Head
close-
the
in
must
usual
The
This year the meeting'was held<$
trib¬ on Dec. 7, and represented the
ute to the millions of men and 145th consecutive annual meeting
women in shops and factories, on
of
the
stockholders.
Mr.
J.
farms, in laboratories, in hospi¬ Stewart Baker, Chairman of the
tals and in management who tire¬ Board of Directors, presided and
lessly labor to meet the demands read the annual report on the
of total war. Never has American company's
activities during the
manhood and womanhood so dem- preceding 12 months, including an
onstarted
and
so
ennobled the estimate of - the results of the
dominant
a
series
■■■!;
v
v.1-.'.-:-;
;VV
We also pay high
sacrifices.
"This,"
a long
be
their heroism
and
be matched by our
speaker reminded the gath¬
The
ering that
Commercial
"would
step and it is
j
to stockholders is always
commercial rivalries, air
rights, especially mon¬
Such an interna¬
organization must be
observed,
he
arrangements with Banks
throughout the U. S. A.
Agency
Seattle
«
L. A. 280
••
By E. A. VAN DEUSEN
steadfastness, their
Their
courage
and water
continuous
27!)
-
This Week—Bank Stocks
;
r
touched off each year in
sources,
on
victory
Americans
of
meeting
Every
"these prob¬
barriers of all
collaboration."
San Francisco
-
L. A.
-W.
■V"''V*
WIRES
and Insurance Stocks
today should express deep grati¬
tude and lasting obligation to the
men
and women in our armed
etary stability.
working
W. 1
Berkeley Square,
47
Chicago
-
TELETYPE
•:
transcends all other purposes.
kinds, access to raw materials, ex¬
ploitation
of
undeveloped re¬
founded
C.
Threadneedle Street, E.
29
ning of complete military
Governor stated that
tional
countries.
; New York
outside
to make the nation
lems include trade
The Bank of New
PRIVATE
the history of
Nor, do I believe, does any other
sovereign nation want a central
world authority over it."
Expressing the view that "an
cooperative organi¬
:,<•/, "•
OF. CALIFORNIA < .
■
210 West 7th St., Los Angeles '
C
v
■'Js
highest right—to live by some
inner sovereignty, rather than by
forces.
international
(P. C. T.)
BUTLER-HUFF & CO.
p'.
to claim the soul's
up
ment, no dictatorial State to which
we are subservient.
We want no
central world authority over us.
lems which have
Manager
General
Office:
Head
-£150,939,354
DAVIDSON, K.B.E.,
ALFRED
SIR
rising
COMPARED
-
Orders solicited.
Inquiries invited.
■
mately rest upon the
ing and approval of
the United States."
NEW SOUTH
around the
world, some who have lost free¬
dom and others who have always
lived under the heel of tyranny,
are
Sold-—Quoted
Trading daily 7 a. m. to 5 p. m.
people
mighty army as now fights under
the banner of freedom. The win¬
out
Bank, Ltd.
Glyn Mills &
of
Millions
for peace must
be
Deacon's
clearer.
comes
regimentation. Never in
the world has this
longing of people to govern them¬
selves
welded
together such a
That "our desires
£108,171,956
Williams
ably forward,
—
REVIEWED
-
Special Bulletin and Booklet Service to Dealers & Brokers
be¬
purpose
implemented by a practical and
definite
program," was pointed
ASSETS
TOTAL
ourselves, requires
in
as
W. /
64 New Bond Street,
v
of the world
our
Thursday, December 16. 1943
V
FINANCIAL CHRONICLE
THE COMMERCIAL &
2438
institutions
that
has
already
banking.
-
;,
.
•
Volume
158
Number 4238
THE COMMERCIAL & FINANCIAL CHRONICLE
Municipal.''News
•
'The tax which New York State,
*
collects
from
employers
for
other
the
Notes
States
crease
mands
special purpose of unemployment
as
on
.would
rapidly
large
result
a
de¬
is
greater in amount
annually than any other tax col¬
lected by the State, the Citizens
Public
Expenditure Survey re¬
ported
this
Dec.
for
tax
1942
1.
the
calendar
-
year
to
$176,336,504.
with $134,257,803
compares
from all taxes in the corporation
tax group
and $93,825,329 from
the
personal income
*
tax.
1983.
"Although New York State is
The
only large industrial State which
bonds, in the opinion of
counsel, constitute valid and bind¬
ing.. obligations of the City of Hot
Springs, payable solely from the
ha^
gross revenues of the waterworks
the
among
most
liberal
of
; States from the point of view
of benefit payments, it is the
failed
^ adopt some form
rating," according to
James H. Moseley, President of
of
system
merit
the Survey.
ply
means
rates
"Merit rating sim¬
sliding scale of tax
a
under
which
The
employers
tax
pay
at
tu /lover
lower
a
rate
than
leads
to
preliminary
to
so
to
as
provide
to
principal
when
preciation
em¬
revenues
interest
pay
due
and
and
all
results
of
a
City of
Hot
Springs is a
commercial and trading center for
the
surrounding
area
and
is
known
as
made among employers. The com¬
resort.
The population served
plete results of this poll
the
'which
canvass
tabulated
and
the
will
Survey
be
has
being
are
announced
soon.
at
and
December
yet to be
re¬
ported, the unemployment insur¬
ance
credited
reserve
system
is
out
Opportunities
for
gains (on securities held
months),
which
on
to
York State's account by
New
the U. S.
he
W.
the end of the year.
capital
over
pays
True,
at
times
this
gain of approximately $200,000,the
in
fund
reserve
since
Office
in full from
capital gains.
in
of
excess
A
Benefit
York
amounted
1938.
&
of
peak
a
$416,916,789
and have
York State is 2.7 % pn
suit
a
*■.' The
the payrolls
brought by service
of
its
;
main
was
U. S. Government collects
>
ad¬
an
payroll, tax for adr-
■
ployees pay no unemployment in¬
contending
The
,<
:
'
'
benefits of the Federal
Fair Labor Standards Act of
1938,
activities
that
in
the
company's
building consti¬
the
unemploymentinsurance tuted 'production of goods' for
separate from several other j interstate commerce. Judge Con¬
and funds sometimes con¬
ger rejected this contention, re¬
tax is
taxes
fused
with
It
it.
should
be
dis¬
for
the U. S. Government from
some
tax.
.
Neither has
insurance
ment
with work relief
a
pay¬
unemploy¬
surance.
,•
may
or
(Editor's
-r;}
''
\
;'
:
Note—With reference
the
foregoing report, it should
be borne in mind that the huge
unemployment reserve fund cred¬
come,
earn
traordinarily
even
less than the
large
considers
sev¬
tion
though
revenues
ex¬
in a favorable posi¬
be had from Lawrence
are
may
Turnure &
Co.-Blyth & Bonner
of request.
an
authorized issue of
not
exceeding $10,760,000)
semi-annually $163,000
i,i944 to
on
May
each May 1 and November
1, 1953, inclusive.
1,
from
.<
unconditionally as to principal and dividends by endorsement
by The Baltimore and Ohio Railroad Company.
„
Certificates
be issued pursuant to an Agreement and Lease dated as of
May 1,
Supplemental Lease of Railroad Equipment dated November 29, 1943,
and are a
part of an aggregate principal amount of not exceeding $10,760,000
originally
issuable "under said
Agreement and Lease. Certificates in the principal amount of
$7j500>000 have heretofore been issued of which $375,000 principal amount matured on
November 1, 1943, and has been
duly paid. Upon issuance of the present $3,097,000
principal amount of Certificates the Company will pay to the Trustee advance rent
equal to the $163,000 principal amount which would have matured on November
1,1943,
if all the Certificates
originally issuable under the Trust had been issued prior to
are to
,v '
November 1, 1943. No additional Certificates
may be issued. The aggregate principal
amount of Certificates
(including the present issue) to be outstanding is $10,222,000,
which
amount now
will represent
less than $10,780,000, of
new
approximately 95% of the
standard-gauge equipment.
cost, estimated to be not
building of rough plans
labels
and;; advertising,
photostats.
The
court
operators
and
contribute
to
1
commerce.
"His ruling
set in other
MATURITIES, YIELDS AND PRICES
and
held
also that the employees' duties
) connection "elevator
home relief or .did not
':,p
.
.
from the
any
with workmen's compensation in¬
-
marking that the nearest thing to
production
was
the
emanation
tinguished from the Old Age and
Survivors Insurance
(Social Se¬
curity) tax which is collected by
to
they
to
!943) and t0 a
"The plaintiffs had argued that
were
entitled to the wage
and hour
tax.
or
.
These
they
ministration of Unemployment In¬
surance.
In New York State em¬
surance
Lawrence Turnure & Co.-Blyth &
To be guaranteed
York "Times" of Dec. 8:
ditional 0.3%
be short
years
May
regarding
the
reported in the New
of employers of four or more. The
roll
war
eral
one
office
following
ruling
study of the outlook for Cuban
production
prepared
by
(PHILADELPHIA PLAN)
To be due
the
May
1944
2.45%
1.10
May
2.55
May' '■
interstate
November 1947
November 1944
as
like
1.45
November 1948
2.65
1945
0.85%
1948
November 1945
where
cases
1949
2.70
2.00
November 1949
2.15
May
1950
2.80
2.30
November 1950
2.85
1947
building
employees
have
been
found exempt from the act's pro¬
Issuance and sale of these
Certificates
loft
created
11951
100.75
November 1951
100.63
May
1952
100.50
November 1952
100.38
May
100.25
1953
subject to approval by the Interstate Commerce Commission. The Offering
Circular may be obtained in
any State in which this announcement is circulatedfrom
only such oj the
undersigned and other dealers as may lawfully offer these securities in such State,
visions, while service workers in
ited to New York State has been
May
2.75
May
'office
May
1946
November 1946
followed precedents
1.75
May
'
are
goods are produced have received
the law's benefits."
'•
'
for
is
and
available, for
only the specific purpose of pay¬
ing unemployment compensation
benefits
fact
in
its
to
unemployed.
fund
trust
a
and
no
should be used in determin¬
sense
ing, for example, the amount of
surplus in the State Treasury as
a
of
result
an
excess
of
A
It is
in-
income
or
factoryl buildings where
HALSEY, STUART &.CO. Inc.
previous ruling in this matter
appeared in these columns of Jan.
8, 1942, page 113.
*
;
OTIS &. CO.
.
.
(incorporated)
'
A. C.ALLYN &. COMPANY
'
'
DEMPSEY-DETMER &. CO.
incorporated
SCHWABACHER & CO.
Central & South American
STIFEL, NICOLAUS &. COMPANY
incorporated
ijrom
.
other
"regular"
sources
operating
taxes
State
the
over
the
State's
and
costs
of
activities.
Dollar Bonds Surveyed
E.
F.
Hutton
&
Company,
THE FIRST CLEVELAND CORPORATION
61
This applies, of course, with equal
Broadway, New York City,
force to the other
ALFRED O'GARA &. CO.
bers of the New York Stock Ex¬
one
which
of
States, at least
was
reported
cently to have treated its
ployment
compensation
credited by the U. S.
determining
the
re¬
unem¬
fund
Treasury in
amount
of
sur¬
plus available for payment of out¬
standing indebtedness. The fact
of
the
matter
is
that
in event
change, have prepared
tive
brochure
as
of
an
surveying
mem¬
another
era
of
unemployment, the
fund of New York and the
STIX&CO.
F. S. YANTIS&CO.
incorporated
and South American Dollar Bonds
*
with
reference
tialities.
to
Copies
profit
of
the
poten¬
booklet
*
discussing the situation in detail
_
reserve
KEBBON, McCORMICK &. CO.
SINGER, DEANE &. SCRIBNER
WALTER STOKES &. CO.
attrac¬
Central
may
be had from E. F. Hutton &
Co. upon request.
'
'
To be dated May 1, 1943.
Principal and semi-annual dividends (May 1 and November 1) payable in New York
City
and Philadelphia. Definitive
Certificates in coupon form in the denomination of $1,000,
registerable as to principal. Not
redeemable prior to maturity. These Certificates are
offered for delivery when, as and if received by us. It is
expected
that Certificates in definitive form will be
ready for delivery in New York City on or about January 7,1944. The information contained herein has been
carefully compiled from sources considered reliable, and while not guaranteed as to
J-it
completeness or accuracy, we believe it to be correct as of this date.
December 16,1943.
its
the
sugar
3% Equipment Trust Certificates
Court in New York.
10 months of 1943.
The rate of payroll tax in
a
Baltimore and Ohio Railroad
building, 350 Madison Ave., New
City, was handed down on
Dec. 7 by Federal Judge Edward
A. Conger in the U. S. District
1940
Cuba
$3 ,097,000
York
dropped to $17,080,545
for the first
.
since
in
find
and
and
Whether
for the railroads for at least
(i. e.,
(Balance of
ruling in favor of the Borden
Co.
$98,979,152
sugar
Equipment Trust, Series M
employees
payments reached
opportunity.
domestic
for
will
principal beneficiary, according to
apparent
an
demand
derivatives
psychological
cause
expanding
world
Co.
New
to
These
Cuban Sugar Outlook
The
Bonner, 50 Broadway, New York
City, members of the New York
Stock Excchange and other lead¬
ORGANIZATION
BONDS,
at ing exchanges. Copies of this study
their present levels, as outstand¬
discussing the outlqok, and con¬
ingly attractive.
One may look taining a review of four of the
ahead
to
substantial
prosperity sugar companies which the firm
taxable year) is limited to a
very
small amount, as far as the
high-
Building Service
in
proven
superiority for
low-cost,
high-speed,
efficient
transportation. — L. H. Klybert,
Josephthal & Co.
by
have
to
their restored credit, and
their
esti¬
unemployed
payments
State's
to
espe¬
long, for ex¬
ample, I regard RAILROAD RE¬
But the
gains, in
temporary
unusual
the
taking of cap¬
losses, particularly short-term
losses, on securities held less than
six
months, which are deductible
v
.
but
ital
Wage-Hour Law Is Ruling
Jan. 1.
tendency
securities,
disregard of real values, should
be, and doubtless will be regarded
by discerning investors as periods
six
condition
Workers Not Under
This will be
obvious
hold
aberrations
will also invite the
Cherry Co., and E. L.
Villareal
a
other
Co.,
Lewis
to
should
find
investors
full recognition market-
wise to
cially securities where the degree
of undervaluation can be
clearly
shown, until a long-term capital
gain can be taken.
of
with Halsey, Stuart
Inc., in the offering are
Blair & Co., Inc.;
Stifel, Nicolaus
& Co., Inc.; Eldredge &
Co., Inc.;
Walter, Woody & Heimerdinger;
&
cially,
giving
concerned.
approximately 33,000.
Treasury, to which the State col¬
lections
are
paid,
amounts
to
$563,000,000. The reserve is ex¬
pected to exceed $600,000,000 by
000
be
is
completely rehabil¬
itated, both physically and finan¬
outstanding health
waterworks
mated
will
Associated
With tax collections for Novem¬
ber
an
taxpayer
Therefore, the
goes, he must pay out 75%
more in
taxes, he will search
amount of net capital losses
charges.
this condition
which the
on
its
_
losses
The
bracket
fix
operation, maintenance and de¬
ployers favor adoption of merit
rating in.New York State accord¬
ing
obligated to
sufficient
in-
A heavy preponderance of
,
tem
claims
more
a£Vnst
unemployment
sura/ite benefit fund."
is
capital gains,
taxation^
25%..
City
rates and collect charges for the
services furnished by the, sys¬
whose heavier labor
in search of
with
products, would also
imply lessened taxation, elimina-*
of post-war
contingency re¬
serves, plentiful labor supply. The
Reorganized Railroads,
meeting
Times), the tax increases, and the
income remaining diminishes.
Obviously, when a man in the
Therefore, again, periods such as
higher
tax
bracket
observes, the
present, during which fears
that, no matter how high his in¬ that
"peace might break out," or
come
necessary,
are
secured by a statutory
mortgage lien on the waterworks
plant and system.
markets
only $23,408.14 can be retained
by
a
taxpayer, on income of
$100,000. On incomes over $100,000
(as Taxation Editor Godfrey Nel¬
son
points
out
in
the
N.
Y.
or
extent
and
who provide stable employment
employers
the
to
the security
war,
tion
carries more than mere general
significance, because present almost
unbearably high income taxes have a tendency to force men of means
tax is limited to 25%.
Under today's income
short
to peace-time
considerations are, and for some time
ahead, will remain,
major factor in all transactions on the security markets. This fact
into
Halsey, Stuart & Co., Inc., are
heading a group which is offer¬
ing at prices to .yield 0.75% to
2.75%,
according
to
maturity,
$2,075,000 City of Hot Springs,
Arkansas,
3%
water
revenue
bonds due annually from 1945 to
Collection, from
amounted
This
Halsey, Stuart Group Offers
Arkansas Water Issue
A
ensuing vast needs for rebuilding,
anjd reconversion of war factories
Tax
a
insurance
1942-43.
Klybert Sees Tax Considerations Justifying
Buying Securities on Dips
de¬
of
these funds.)
2439
on
THE COMMERCIAL
2440
Thursday, December 16. 1943
& FINANCIAL CHRONICLE
15 A of the Securities Exchange
tered-under Section
Halsey, Stuart Group
Offer Equipment Trusts
'
STRIKE THREE!
is
Series My 3%
Trust,
Equipment
Equipment Trust Certificates ma¬
turing semi-annually from May
and dealer was
| opinion in its
'
'
to the
bid of
awarded
are
being is¬
Philadelphia Plan,
certificates
The
*
*
The
and its own Rule
X-15C1-2.
*
*
*
■
The
road
Company.
as
to
.
by
By House
35 Cents Voted
protests
House, overriding
encouraging inflation,
13 voted to order the Of¬
that it was
Dec.
35
than
oil
crude
boost
-to
Administration to
prices not less
cents a barrel, according
Price
of
fice
Associated
an
Washington,
from
Press dispatch
D. C., which
adds:
Passed
171
by
standing vote of
a day-long fight,
a
after
92
to
legislation directed the OPA
prices not lower than
80% of parity and not higher than
the
to fix crude
Based on current
of parity.
100%
.prices of about 60% of
parity, the
35 cents
increase will range from
74
to
Prices
cents.
national
the
but
widely
is
vary
now
average
$1.18 a barrel.
parity is a price based on
the index price of all commod¬
ities included in the Labor De¬
about
Oil
commodity
partment's wolesale
price index.
In
last-minute shift of plans,
a
of
backers
the
bill
abandoned a
price adminis¬
tration from the OPA and give it
drive
oil
take
to
I.
to. Harold.
Ickes,
Secretary of
Interior, as head of the Pe¬
Administration for War.
the
troleum
An amendment
from
the
OPA
was
striking the PAW
and restoring
measure
adopted by a 72 to 49
vote.
The bill now goes
to the Senate.
prices which Mrs.
paid for the securities
Of
Crude Oil Price Rise
Furbeck and other customers
purchased in this manner ranged
from 16.1 to 40.9% over market value. In addition, most
of the transactions involved little or no risk for peti¬
tioner, because an order was usually confirmed before
it bought the securities that it was selling.
There is
conflict in the record as to whether Stillman and Arm¬
strong made any direct representations to Mrs. Furbeck
of the relation of the price paid to market value. She
claims that every time she made a purchase it was directly induced by the statement that the price would
be under that current in the over-the-counter market,
while they deny such statements completely. It is un¬
challenged, however, that at no time did either Stillman
or Armstrong reveal the true market price of any secur¬
ity to Mrs. Furbeck or the fact that petitioner's profits
averaged around 25% . Similar evidence as to other cus¬
tomers all amply furnished the 'substantial evidence'
required by the statute to make conclusive the Com¬
mission's finding of a course of business by petitioner to
sell at excessive mark-up prices without disclosure of
market values to its customers.
* * * (Stillman and
Armstrong were salesmen of the petitioner).
"The
principal and
endorsement by
Baltimore and Ohio Rail¬
ditionally
dividends
on
■
be guaranteed uncon¬
and are to
The
s'c
dealings which resulted in the
:
*
loss of his license.
Carlisle
Jacquelin
&
(which will continue as a member
firm), to George A. Whiteside,
who will continue as a partner in
will be
Francis I. du Pont & Co.,
Considered
on
Dec. 23.
Attractive Situation
5
,
Carolina
f
common
&
Light
Co.
interesting situation according
pn
to
Power
stock, when issued, offers
circular being
a
distributed by
Bear, Stearns & Co., 1 Wall Street,
New York City, members of the
New York Stock Exchange. Copies
of this detailed circular may be
obtained from Bear Stearns & Co.
upon
request.
tomers
such
the
;
Baker,
Simonds
securities at prices as far
which petitioner charged
be deemed to commit a fraud.
It holds itself
and then sells them
absolutely
send
late
Distilling
figures
on
on
Tom Moore
request.
Grahrm Is Ky. Colonel
;
Thomas Graham of the Bankers
Bond
Co.,
Bidg.,
pointed
on
Louisville
Louisville,
a
Home Life
Ky.,
was
ap¬
colonel with 125 others
the Governor's staff by the re-
Tiring State Governor Johnson.
come
small
tions.
We deem it
unfortunate that the Hughes case
have reached the Circuit Court
the
numerous
reasons
upon
of Appeals.
which
our
competent to advise in the premises, and it should
would be too lengthy for one publication,
disclose the market price if sales are to be made sub¬
stantially above that level. Even considering petitioner
as a
principal in a simple vendor-purchaser transaction
(and there is doubt whether, in several instances at least,
petitioner was actually not acting as
broker-agent for
should
A discussion of
judgment is based
but here are some
of them.
During the early hearings before the SEC, the dealer
not represented by counsel. Later one of the attorneys
representing the dealer, declared he was unprepared to
proceed, but the Commission nevertheless forced him on.
We believe it was a serious mistake to permit, without
was
all undisclosed profits
would be forfeited), it was still under a special duty, in
objection, the admission into evidence of the National
view of its 'expert knowledge and proffered advice, not
Quotation sheets as proof of market price. As we demon¬
to take advantage of its customers' ignorance of market
strated in the case of Hallgarten & Lee, sales, and not quota¬
conditions. The key to the success of all of petitioner's
tions, are the true index of the market. In that case, the
dealings was the confidence in itself which it managed Court held that the National Quotation sheets proved
purchasers, in which
the
to
instill in
the
case
Once that confidence was
customers.
price between dealers, nor market price to
investing public.
.
i
by the firm was both an
The Hughes hearing before the Commission was con¬
fact and a fraudulent device. When nothing was said
ducted as if the delivery of the securities sold was of para¬
about market price, the natural implication in the un¬
mount importance, when in fact, that question was never
tutored minds of the purchasers was that the price asked
at issue.
mark-up pocketed
omission to state a material
established, the failure to reveal the
close to the market.
Jjs
.
price
the
The
❖
actual
mar¬
of the securities was never satisfactorily
proved. We agree, however, with the Commission that
the evidence of the quotations published in the National
ket
neither market
J,'s
"Petitioner's final contention is that the
Co.,' Buhl
&
has pre¬
of the rule by the SEC—all these have
to naught.
dealer cannot possibly survive on a 5%
material fact is that of Mrs. Fur¬
Distilling
"Bldg., Detroit, Mich., members of
the Detroit Stock Exchange, will
effort, energy, and opposition, which till now,
vented the passage
It is true that the
*
Situation Of Interest
a
saddled
as
was
Tom Moore
generally understood that the 5% "philosophy" of
was based upon the representation that unless
rule were adopted, the security * dealers would be
with a disclosure rule. Now the SEC has both. All
It is
the NASD
operated as a fraud and deceit upon the purchasers, as Charles Hughes' & Co., Inc., was based upon its answers
well as constituting an omission to state a material fact. made to the questionnaire in the NASD survey. That sur¬
"An over-the-counter firm which actively solicits cus¬ vey was cited by the SEC in its brief to bolster its conten¬
out
•
.
by the salesmen. Although the Commission has ne¬ sophy" was enforced, and now the Court cites the action of
glected to make any finding of fact on this point, we one of the Association's District Business Conduct Com¬
need not remand for a specific finding resolving this mittee in support of its opinion.
We wonder whether the revocation of the license of
conflict, for we feel that petitioner's mark-up policy
here must
in
•
only specific evidence of spread, particularly where he employs salesmen, because it
is indisputable that the cost of doing business exceeds 5%,
Our articles in the "Financial Chronicle," ^nd others,
beck that the sales price was under the market price,
and, as we have noted, these statements were denied foresaw the doom of the small dealer if the NASD "philo¬
*
"*
false statements of a
Weekly Firm Changes
ner
ifi
complete price and profit disclosure rule, which the SEC
has long been angling for, but which active security dealer
opposition had thus far kept out of the books.
In the opinion of the writers, this drastic decision
coupled with the existing NASD 5% rule, will put the dealer
in the following position:
In any sale in yhich there is a
larger spread than 5%, failure to disclose to the customer
the extent of the spread may be interpreted as a fraudulent
and deceitful practice, subjecting the dealer to the possible
The
N. Y, Stock Exchange
Transfer of the Exchange mem¬
„
initely ascertainable? Assuming for the sake of argument
only that it is, at what level does a security commence to be
priced "substantially" above the market? Clearly, in the ab¬
sence of legislation, whether by Congress, or by rules of the
SEC or NASD, which means the same thing, no one can tell.
In the future, therefore, to play absolutely safe, a dealer
will have to show his mark-up and profit on all confirma¬
tions to customers. In other words, to put into operaticrn a
above the market as were those
bership of David A. Lowry, part¬
sj:
continued sales of securities to customers
■
yesterday on their
100.057.
:
•
J
sued under the
entirety appears in this issue, starting on
consisting of Circuit Judges Hand, Chase
>>
revocation
listed securities.
at prices
The Court approves the conclusion of the Securities and
very substantially over those prevailing in the overExchange Commission that sale of securities "priced substan¬
the-counter market, without disclosure of the mark-up
tially" above the over-the-counter market price, without
to the customers. The Commission concluded that such
disclosure of the mark-up to the customers, constitutes fraud
practices constituted fraud and deceit upon the cus¬ and deceit.'
'
\
tomers in violation of Section 17 (a) of the Securities
Here is a fine kettle of fish.
What is the over-theAct, Section 15(c)(1) of the Securities Exchange Act, counter market
price on a given security? Is it always def¬
"*
were
100.25 for the
May 1, 1953, maturity. The cer¬
tificates, offered subject to Inter¬
state Commerce Commission ap¬
were
-
of the opinion of the Court
page 2418—Editor]
and Clark:
turity to a price of
bankers
prices in over-counter securities to those which are fair,
and calls attention to a decision of the Association's Dis¬
trict Business Conduct Committee reported in the NASD
News for October, 1943, imposing a fine of $500 and
censure upon a member found to have violated rules of
the Association by a practice of charging mark-ups of
approximately 10% on transactions, in. listed and un¬
registration as a broker
revoked.
quote pertinent parts
We
1, 1944, through May 1, 1953, at
prices ranging from a yield of
0.85% for the May 1, 1944, ma¬
proval,
which the petitioner's
member at the time of
question, has:a rule limiting mark-up
the transaction in
(Continued from page 2415)
the SEC in
being made today
by a group headed by Halsey,
Stuart & Co., Inc., of $3,097,000
Baltimore
and
Ohio
Railroad
Offering
Act, of which petitioner was. a
entire
trial record before the
Commission was a
standpoint. The Circuit
upon that record.
Any Court's opinion can be representative if based upon
a record which truly indicates the actual customs and prac¬
tices in the security sales field; but representative or not, the
decision in the Hughes case is now a precedent. Armed with
it, and with the NASD "5% spread rule," as two clubs, the
Securities and Exchange Commission will make security
poor one from the dealer's
Court of Appeals based its decision
very
Daily Quotation Sheets, a recognized1 service giving
'daily market indications' as petitioner stipulated, and
the prices paid concurrently by petitioner itself suffi¬
ciently indicated prevailing market price in the absence dealers who have hitherto complained of bureaucracy,
of evidence to the contrary."
realize what firm oppression can really be.
We believe the Hughes case has given the SEC its most
The opinion also contains the following most important
'
sweeping and complete victory, a hammerlock on the secur¬
points out that the National Asso¬ ity business, which will throw many an average security,
dealer for a fall from which there will be no rising.
ciation of Securities Dealers, Inc., an organization regis¬
footnote:
"The Commission
Volume 158
THE COMMERCIAL
Number 4238
FINANCIAL CHRONICLE
&
2441
not one that can be laid dowbf*
Saying we told you so, is of no help. In this emergent
Tomorrow's Market's
and followed line for line.
condition, the inaction resulting from a reign of fear which
Walter Whyte
That would be too much to
has gripped over-the-counter dealers, may also result in To Hear Plea On
their disintegration.
Savs
:
expect of anything as volatile
v
:
Is there hope? Yes! Provided the industry is vigilant Tax On Debit Balance
as the market.
But the pat¬
Continued from page 2418)
and sees to it that in all pertinent cases before the Securities
tern is there, and from what
According to a special Wash¬ any advance.
But between
and Exchange Commission and Business Conduct Commit¬ ington dispatch Dec. 13 to the 136 and 137 I think the mar¬ I can see of current market
-
Snpreitie Court Refuses
.
FEa,
,
ground work is laid to estab¬
in the securities field which
that each transaction stands or falls
tees of the NASD the proper
New York
"Wor'li-Telegram" the
Supreme Court on that day
ket will run into enough of¬ action, I believe it will hold
for the next few weeks.
ferings to stop the forward
would make it clear
preme Court decision upholding
surge. From that level a pe¬
taxation by the State of so-called
■'on its own merits. •:
%'•=;
;■ 4.
Two days after I wrote last
riod of dullness can be ex¬
debit balances in a Florida branch
;
The CHRONICLE invites comments on the views ex¬
of the New York brokerage firm pected. Once that is seen the week's column advising a list
pressed by Messrs. Metz and Kole in this article, or on any of Thomson & McKinnon. The next
cycle calls for another of stocks, they started up and
related phases of the subject under discussion. Comments action in effect sustains the State
decline, On this decline I be¬ added anywhere from one to
should be addressed to Editor, Commercial and Financial court ruling, said the advices,
lieve stocks should be bought. three points to the prices I
'which' added:
■. -777.7;;v1
Chronicle, 25 Spruce Street, New York 8, N. Y.
had in mind as buying levels.
"The case arose from a suit
brought by Thomson & Mc-KinThis picture is obviously Obviously, the stocks were
non against the tax assessor and
not available, with the ex*
collector for Dade County, Miami,
ception of Western Union "A"
seeking to stop imposition of the
lish the true custom and usage
U. S.
refused to review
Florida
Su¬
intangible property
contended
that
domiciliary
ownership
of
tax.
a
;
Hughes Decision Stuns Dealers
;j
(Continued from page 2415)
;
have stopped in the past, and must stop now, in marking
up securities so as not to be subject to criminal prosecution,
_
revocation of his dealer-broker license and rescision
tracts.
of
con¬
.-"7 '•
'< ■;
■/"V/.^v"'.■> '"v"
destructive, illegally adopted 5% profit
limitation rule is OBSERVED the answer is a 5% mark-up, it
vv'.
■
If the NASD's
,
seems
to
FORTUNATELY, most dealers are ignoring the
us.
;5 /£ decree and the same thing may be said to the credit of
some of the Business Conduct Committees of the Association,
v; 5 % As previously stated if thls,5% rule is permitted to stand
it will
of the
^
mean
the ruination of
the small dealer in all parts
which it
the Association's membership.
We would go
further than this and say there should be no more attempts
made to put a Ceiling of any kind on the profits of dealers.
It is just -impossible to lay down a blanket rule that would
apply to mark-up practices generally. Each transaction must
vstand on its. oWni f eet. and anyone that argues otherwise in
our opinion is rendering a distinct disservice to the invest¬
ment industry and our whole system of free enterprise. To
argue that a direct or indirect ceiling should be placed on
profits, on a sliding scale, or otherwise, to stave off the impo¬
sition of a worse rule by the SEC is like settling for social¬
ism instead of communism and. we should utterly avoid any¬
foisted
on
thing of the sort as we would a plague. And, don't be fooled
by talk to the effect that entirely too much stress is laid
on the "5%" phase of the rule because a dealer can take a
position in a security and if it moves up adequately he can
make 50 or 100% profit on a resale. Certainly he can.
But
those are not profits that he makes as a dealer.
Those are
profits that accrue to him just as would be the case with any
other investor for he is in such instances in a category with
an
The
firm
office! debit
Miami
New Members Of Ass'n
was
The
/V 7.-77
investor.
7
/%, Back in 1940 when the SEC gestapo first became active
it
began scrutinizing dealer transactions that involved mark¬
of more than 15%. Then in 1941 they began taking ex¬
ception to mark-ups of more than 10% and now they seem
content to see this reduced to 5 %. And while we are on the
subject we would like to ask how the members of the NASD's
ups
Business Conduct Committee that sat in
on
that 10% mark¬
that such a mark-up was
practices of the trade—that it was
exorbitant?
Did they put in years of study on the subject
or did they just swallow that sort of talk from the guiding
genius of the NASD—Wallace H. Fulton—who seems to do
everything but sleep with the SEC? %%%••;,'■;
V.
1
Yes, the obvious need qf the whole investment industry
is for: a national protective association to fight the battles
up case arrived at the conclusion
not consonant with the
■
of dealers and brokers, to restore their financial health.
Investment Bankers
ciation
"But the Florida court held that
since customers reside in
the
of
election
37
on
new
writing 43.
ture the other stocks
last week's
to
the
advice
and brokers commissions are paid
in that State, the balances are
Bonner
subject rio
The
Central Hanover Bank and Trust
as
dismissed
Co., New York, Central-Penn Na¬
tional Bank of Philadelphia,; The
Foundry, buy 283/^-29^, .stop
IT.
S.
State
the
Supreme
appeal for
jurisdiction." ;
an
.
levy.
Court
lack of
77'- .77,
Bankers
Los Angeles
Investment
LOS
ANGELES, CALIF.—Mem¬
of
the
Investment
Statisti¬
cians' Association of Los
Angeles
held their annual dinner, meeting
yesterday at the Los Angeles Athr
Southern
&
National
The stocks and
at 27.
are
American Steel Foun¬
ders, buy between 2 Hi and
22 V2
and stop at 20.
Pome
Mines, buy at 20 lA-21V2, stop
at 19.
U. S. Steel, buy at
493/4 to 50 V4, stop at 47. The
last
one
town
with
in the list is Youngs341/2 to 353/^
Sheet,
a
L
stop at 33.
-f
;
','■>!«:
«
.
■
7':..
'
■
delphia, Hettleman & Co.. New
ing new officers for the coming
So far as I can see now, the
York, Hibernia National Bank in
year: 7 7.:\.7;.7
New Orleans, Holsapple & Co., above list will hold
good for
President, Roger Pile, Wyeth & New
York, E. R. Jones & Co., the next few weeks.
But, I
Co.; Treasurer, Mrs. Mae E Leake,
Baltimore, Land Title Bank and
cannot foresee national or in¬
Hill, Richards & Co.; Secretary# Trust
Co., Philadelphia, Mabon &
Walter Weeks, O'Melveny, WagCo., New York, Mercier, McDowell, ternational
developments
enseller & Durst.
.U..!
&
Dolphyn, Detroit, Mullaney, which may affect the entire
Retiring officers who served Ross &
Co., Chicago,. National
price action. But until advice
during 1943 are: K. D. Sanson, of Bank of Detroit.
to the contrary appears
Bateman, Eichler & Co., Presi¬
here,
The Pennsylvania Co. for In¬
dent; L. W. Taylor, of Mitchum,
the stocks and the prices that
surance
on
Lives and Granting
Tully & Co., Treasurer, and J. R.
Annuities, Philadelphia, Qiiigley are recommended hold good.
Laznick, of Crowell, Weedon &
& Company, Inc., Cleveland, Ir¬
Co., Secretary.
%':7'%7
ving J, Rice & Co., St. Paul, Wm.
By custom, the retiring Presi¬
More next Thursday.
C. Roney & Co., Detroit, Saunders,
dent serves on the Board of Gov¬
Stiver
&
Co., Cleveland, Siler,
—^Walter Whyte
ernors in the coming year, as do
Roose
&
Co.,
Toledo,
Taylor,
the newly elected officers, Other
[The views expressed^ in this.
Deale & Co., New York, Trades¬
members of the Board of Gov¬
article do not necessarily at any
men's National Bank and Trust
ernors
are
time coincide with those of the
L.
W.
Taylor,
of
Co., Philadelphia, Union Bank & Chronicle.
Mitchum, Tully & CO.; J. R. Laz¬ Trust Co. of Los
They are presented as
Angeles, C. E.
those of the author only.} /
nick, of Crowell, Weedon & Co.,
<
Unterberg & Co., New York, Varand K. Arnold
Liljegren, of Pa¬
nedoe, Chisholm and Co., Inc.,
cific Co,
Savannah, J. A. White & Co., Cin¬
cinnati, Arthur Wiesenberger &
G. Hermann Kinnicut Dead Co., New York.
LAMBORN & CO.
■
.
.
——
.
G. Hermann
Kinnicutt, a senior
partner in Kidder, Peabody & Co.,
New York City, died at his home
of
a
heart ailment at the age of 66.
Mr. Kinnicutt began his career
m Wall Street with J. P.
Morgan
& Co., with which he was associ¬
ated
for six years. In 1904 he
organized: his
own
investment
■;
99 WALL
N. Y. Slock
Exchange
Weekly Firm Changes
•
The New York Stock
announced
lias
the
Exchange
following
SUGAR
weekly firm changes:
The
Exchange
Libert E. Fagan
STREET
NEW YORK 5, N. Y.
membership of
was transferred
.
Exports—lmports-~Futures
oanking firm under the name of
to Anton W. Herbeck on Dec. 2.
& Potter, succeeded in
1906 by Kissell, Kinnicutt & Co.
Transfer of the Exchange mem¬
The
firm
continued
until
name 7
1931
under
when
it
that
A.
merged with Kidjder, Peabody &
Co., of which Mr. Kinnicutt be¬
came
a
partner.
Rhett
Company,
Pont
will
be
.
con¬
Isabelle G. Kaufmann and Ab¬
New Brazil Plan
Zippin; &
du
sidered by the Exchange on Dec;
13th.
■
■
raham
'
DIgby 4-2727
bership of George A. Whiteside to
was
Inc.,
Ti?U^aif v?alle ^reet'.
111., have prepared., copies
208
of the
Established
Ungerleider, both limited
partners,
retired
from Fagan
Co., New York City,
on
&
Nov. 30th.
„
-u
.
■
■
.
1850
H. Hentz & Co.
William H. Guthy, member of!
Members.
•
•...
■
•
,.w
New
York
Stock
Exchange
New
York
Curb
Cotton
.
Exchange
Exchange
New
York
Commodity
,
prices
follows: American Car, &f
The First National Bank of Phila¬
letic Club and elected the follow¬
!
Detroit,
Bank,7; Atlanta,,
Commonwealth
Bank, Detroit, Corn Exchange Na¬
tional Bank and Trust Co., Phila¬
delphia, Dempsey-Tegeler & Co.,
St. Louis, Detroit Trust Co., De¬
troit, A. G. Edwards & Sons, St.
Louis, Allen C. Ewing & Co., Wil¬
mington, N. C,, Fidelity-Philadelphia Trust Co,, Philadelphia, The
First National Bank of Atlanta,
Statisticians Elect
bers
continues in effect.
of
Gregory, New York,
Phillips Co., St. Paul,
Citizens
■
Co.
&
Caldwell
Federal
■
Trust
should; make their voices heard new Brazil Plan. These may be lhe Exchange, withdrew from
in a resounding manner toward this end and they will wake obtained upon
request from Zip- i partnership in Lamm, Guthy &
up some fine morning in the not distant future to find there pin & Company, Inc.
Co., New York City, on Nov. 30th.
is no .longer such a rule. If necessary, the Chronicle feels
certain, dealers will have no difficulty in enlisting the aid could .be accommodated in this issue are given, starting on
of Congress in their behalf. .Congress, as a whole, you may page 2415. No letter favorable to the
5% decree has been
be sure; will not be indifferent to the plight of the smaller omitted. And don't
forget that in informing the Chronicle
dealers throughout the country, even if the SEC is.
of your views on the
subject you are helping the. cause in a
Those interested in the subject will want to read "Strike substantial manner.
The names of those submitting com¬
Three!" by Messrs. A.: M. Metz and E. A. Kole which starts ments will be omitted where
requested. Communications
on page 2415 of this issue.:
should be addressed to Editor, Commercial & Financial
All letters on this subject which have been received and Chronicle, 25
Spruce Street, New York 8, N. Y.
>
/
•
to
get down
buying points
take positions
members. They include:
.
over
bought be¬
43A; at this
If in the near fu¬
and
the original payments were made
to them in Florida and interest
■
the country
of America announced
2
Dec.
Florida,
Asso¬
be
to
was
Cer¬ Kinnicutt
tainly the way to such recuperation is not for the big dealers
to indulge in cannibalistic tactics by devouring the little
dealer; The thing to do is to see that the rights of all are
restored and if this is not done you may be sure the SEC
will put one firm after another out of business until none
is left.
/
7%,; V■'
% %.%' ;■
Organized effort to have the 5 % rule upset will shortly
be apparent.
As previously stated, IT MUST NOT AND
WILL NOT- stand. Individual dealers and dealer associa¬
tions all
which
tween 42 A
the
balances
in New York.
ISA Announces 37
the
country ^and it 'i the duty of the Board of Governors
to rescind it in view of the autocratic manner in
was
Florida
Exchange,
,
,
'Inc.
Board of Trade
New Orleans Cotton Exchange
Chicago
And
N.
other Exchanges
Y. Cotton Exchange
NEW YORK 4,
CHICAGO
.
DETROIT
GENEVA,
•
B12g,
N. Y.
PITTSBURGH
SWITZERLAND
2442
THE COMMERCIAL & FINANCIAL CHRONICLE
Service
Restoration Of American Freedom Pattern For
(Continued from
2438)
page
Commission, the number tighten
there
inant force for good in the
if
for
,
people
our
world,
continue
to
are
instrumentalities
And
for
these
of
nation
peace.
the
The
United States will take her place
dence
in
purposes,
cooperative
a
organization
nations
after
among
sovereign
this war.
Our
implemented
by
must be
peace
practical
a
and
private
to
moral
Our
States.
and
We
want
no
central
world
authority
Nor, do I believe, does
sovereign nation want
^world authority
it
take,
may
tremendous
wield
can
influence
tion must be founded
ous
close-working
This would be
it
is
a
realistic.
It
American point of
has a background
that
shows
long step and
its
respects the
view. And it
of
experience
worth.
With
such
a forum
established, international
disputes can and must be settled
by arbitration and judicial deci¬
sions.
When such habits of
peace
formed and supported
by the
are
strong nations,
for
relief
we can
from
the
again hope
burdens
of
move
that
forward with the
the
American
people will work in full coopera¬
tion with the nations of the world
in the days of peace. Only in that
hope and confidence can we plan
or establish a
just order of inter¬
national
dence
relationships.
in
A
confi¬
the
people and their
leaders in the years ahead as well
in
as
do
ourselves
requires
that
we
not
attempt to place this or
other nation in an interna¬
tional strait-jacket.
A will
any
for
must
peace
be transmitted
those who follow.
to
by
us
know that it is the do¬
we
mestic policy we live
by here at
home which in the
long run will
largely
determine
the
part
this
nation will play in world
affairs.
We cannot carry out our
promises
or fulfill our ideals
unless Amer¬
ica
is
when
strong.
we
We
have
can
give only
something to give.
We can inspire others to
achieve
liberty only when we keep it here.
We
cannot
lift
living
of
world
unless
the
other
standards
peoples
we
keep
of
our
of
the
own
standards high.
During the past ten years, our
Federal .Government
has
been
launched upon a course
leading to
the destruction of our
form of
government and to the loss of
I realize that total
freedom.
our
war
necessitates mushroom
growth of
wasteful
rary
It
bureaucracy and tempo¬
regimentation of the
is
one
quences
of
of
the
war
cynical
that
racy is compelled to
of
the
despotic
people.'
conse¬
democ¬
our
adopt
measures
some
of
our
enemies in order to defeat
them.
But
it
is
high time that we
awaken to the fact that
the war
is being used as an
excuse to further
many
dangerous
pre-war
our
of
Officers
people,
in
and
a
Great
to
eat
to
out
light
of
did not
our
gov¬
to
propose
representative
set
the
ago,
Planning
system
they set
so
with
up a government
in
which
respond
to
opinion.
Senatorial
a
and
recognized the poten¬
tial tyranny in such a
sweeping
grant of power.
It replied that
"would
require
virtual abandonment of
our
government
the
forces
of
could
public
executive
functions
of
and
centration
denied
And
important, they
provided that all powers not spe¬
cifically granted to dhe Federal
Government should :be reserved
cumulation
hands
of
of
authority
the
President
the
in
to
the
to
the
States
to
or
the
people.
Through their wisdom,
brought into being a larger
ure
of
had
ever
freedom
until
been
this
a
higher goals.
A
lowering
has
horizon
on
the
,
philosophy.
But
made
was
which
rests
locality to
relegate Congress to
place.
An attack
age
Supreme Court.
the
deliberate
structure,
on
Then
followed
gram
of tearing
local
There is "a present
ous tendency to
forget
the
subservient
a
a
down
government.
State
A
concentration
top
and
and
planned
of
more
tatorship.
.
Let
.
some
into
operation.
We
time
put
thankful
are
ment, supported
public opinion.
For
been
over
ten
by
aroused
an
years
have
we
largely by inde¬
pendent bureaucrats. They are not
accountable to the
people. They
not
are
directly
accountable
to
Congress.
power
They
exercise
their
through decrees, orders and
directives
name
that
of the
are
issued
executive
in
the
branch of
government.
Those
by
words
of
one
were
ment.
This
means
the rule of
men
even
by whim or caprice rather
by law. All this is not neces¬
sary to win the war, it is a method
Chief
for
limiting the liberties
These
men.
words
of
the
of
bureaucrats, in
Declaration
of
dependence, are "Taking
our
Charters, abolishing our
Executive
he
In¬
Civil
United
has
been
More
arrogant
often
All
in
of
of
it
has
Open
enough
lives and
to
consecrate
our
services for it.
our
"
"Today's Investment
courts
our
deprived of
the
creative
Problems—A Solution"
Arthur Wiesenberger &
Co., 61
Broadway, New York City, mem¬
.
bers of the New York Stock
beyond
the
a
people
earth
on
to
build
the
as
things
the standards of living
and
in
the
other
nations.
social
mean
gain but it
perpetuating
the
erty and distress.
Tomorrow
the loss of any
would prevent
That
trade will
in
be
in
large the
commerce
tions.
will
of
It
others
down.
lift
before.
fields
new
It will
ours
horizons
new
cannot be reached unless the
ative
genius of
leased
aged
cre¬
people is re¬
encouraged.
That
and
our
genius will not
investment
na¬
standards
tearing
these
en¬
of other
the
without
But
pov¬
greater in¬
ever
things.
new
be
will
released
not
and
refrains
much
of
the
the people for the
We
only estimate what
should
income
of
ordinary func¬
tions of government.
income
in
of these stocks
some
as
great
an.
preciation
as
placed
standard
in
offer
can
opportunity
for
ap¬
would
$100,000
high-grade
stocks.
common
Six
special
reasons
are
ad¬
vanced for the purchase of invest¬
ment company
in
addition
to
be
national
our
in
can now
the
But it must be at
years
the
factor
hedge against inflation,
ment
of
pert
selection
on
of
much
as
of
the
protection based
yields of
a
ele¬
on
ex¬
investments;
5V2 to 6Vz%
preferred stocks; discounts of
20 to 35%
ing
as
from current liquidat¬
values;
dividends
stocks not taxable
as
on
some
in¬
current
come, and their availability as tax
sale
replacements for
doubtful
securities.
are
,
encour¬
from regimentation and from tak¬
too
$600,000,000.
As
a
hedge
against
inflation, the pamphlet
points out, a $10,000 investment
"Records
be
government
unless
on
study of 40 leading organiza¬
tions with current assets of more
stocks, these being
can mean
ternational trade than
and
of
causes
Solution," based
a
no
that
will raise
This does not
pamphlet, "Today's Investment
Problems—A
than
our
ex¬
comprehension
of defeatists—and
Ex¬
change, specialists in investment
company securities, have issued
genius
build machines—to
to
ahead.
and
been
brazen.
pamphlet
states,
most investment
well
the
as
available,"
the
"showing that
companies do
market
averages
as
and
many do better."
Copies of this interesting pam¬
phlet may be obtained from Ar¬
thur Wiesenberger &
Co.
a
this
And
resulted
controls
is
a
a
so
of
gov¬
long domi¬
with many
about ration¬
now
in authority
talking
ing far beyond the war, about
manent
in
by the people
branch
ernment which has
nated them.
The
the
American
wants
He doesn't mind
has
executive
America.
cunning
8
confidence
the
and
per¬
restrictions,
growing loss, of confi¬
has
never
doesn't
be
built
work.
ease
He
and
he
Tomorrow cannot
upon
scarcity.
to
hard work.
courted
today.
life of
a
It must
be
ease
built
and
upon
who
SEC's
will
from
working—from
accomplishment. He wants life to
come
machines
not
from
kept.
promises
The
made
American
and
living. He wants a hand
building the great industrial
in
ing
a
of tomorrow—in Creat-
better
community and
w.uii.n.u.
..v.
uv»mn,uv,u,
was
attempting to have the
revocation
his
dealer-
aside,
may be
the spe¬
of
broker
license
had
combination
in
set
for
cial
price of three dollars. Each
publication separately is two dol¬
lars per copy. Copies may be ob¬
tained from the publisher.
na-
E. Perkins To Admit
Ill
ROCHESTER, N. Y.—Ericksori
Perkins & Co., Powers
Building,
people
solemn covenants to be
faithfully
performed.
We
are
awakened
when the tentacles of
Keane's
and he wants a life of peace
tiorj
for himself and his children.
a
right to look upon cam¬
paign promises and platforms as
business.
32 Broadway, New
4,, N. Y., are offering this
book, together with a practical
interpretation of a decision just
handed down by the Circuit Court
of Appeals in the case of a dealer
York
ing soldier wants security through
opportunity. The thrill of his life
be worth
liberty.'
inevitably
securities
Publications,
work and abundance. The return¬
ability of 'this lead¬
have
,
faith
-
comes
away
Government."
by the United States
the
A loss of confidence
most
valuable Laws, and
altering fun¬
damentally the Forms of our
sued
of
was
pass
local
people want. We have proved
ership to solve the problems of
reconstruction and bring about the
full return of American
the
^vvv,.„
uttered
uttered by the present
dence in the
free
According to recent figures is-
not
founding. fathers.
to
come
higher
Governor; of
the State of New York.
level than prevailed in
1940; and "Let The Dealer Beware!"
You know what has
happened. it must be based upon an ex¬
In the book "Let the Dealer
Step by step, and with relentless panded agricultural and industrial Beware!"
reference is made to the
determination, the New Deal has economy in our country which has various court
decisions and Com-»
sought to arrogate unto itself all already gone beyond the dreams
mission rulings that would have a
of those who have
power.
Sometimes the
planned for
method
bearing on the conduct of those in
there
than
of
authority, lest
were
the
States when
loss
They are the personnel of
expanding power of govern¬
road
State and
people set free.
power
ing
dicial function of
one.
of
not'at this
easy
discover too late
liberties have disap¬
and subtle.
the
at
we
our
They make govern¬
mental policy.
They administer
that policy They exercise the
ju¬
interpreting that
policy. They are legislature, ad¬
ministrator,
prosecutor,
judge,
jury and sheriff all rollejd up in
power
peared."
They
governed
day
us
the
pursue
that
of
local
encour¬
alien to our system
closely akin to a dic¬
pendent
was
own
governmental
a
centralization
Washington
its
manage
economy by which the people of
the country were to be made de¬
on
democracy,
right of a
the
on
funda¬
a
encour¬
replaced.
We can make the
products and materials that other
danger¬
affairs, the tendency to
pro¬
the
centralization of power in
Government is con¬
in this quotation:
mental of American
during
these past ten
years, the executive
has sought to
of
be
America
all
the
may become real. When millions
have faith enough in an ideal to
die for it, the rest of us must have
de¬
be
here
statement
Federal
tained
ever
The pattern of ab¬
been foreign to our
solutism has
pertinent
evil of
decade
Our eyes have been
political
meas
Federal Government.
people
any
experienced.
Never
here.
than
they
prejudice of Congress, it is pre¬
cisely because of the shifting of
power
from the States to
the
initiative
and
our
pand
,
the
should
truly will
ever
And creative genius must be set
free! Our depleted resources must
Fed¬
Government and the relega¬
tion of the States to a minor role.
If there has been a
dangerous ac¬
faith
new
Then
before in our
history are of¬
fering their lives that this dream
waste.
discouraged. We want
shackles of bureaucracy re¬
of
con¬
the
wanton
of
and
the
hope of the founding
fathers be realized. More
boys and
girls and men and women than
us
or
moved
the
in
power
by
people.
dream
business,
including
business, be strengthened;
process.
moment
a
of
our
national debt
to all who have been
pres¬
eral
judicial
government.
even more
le¬
Consider for
way of Good Will built
among
at
that
that
usurpa¬
legislative
ligious
faiths,
has
weakened
America.' Tomorrow these
griev¬
ances must be healed and a
road¬
fighting for
everywhere
that
that
the
the
given
ous
their rights by orders and direc¬
tives and where redress is now
ment."
of
it
place of power.
a
ent constitutional form of
govern¬
tion
agement and labor, between vari¬
groups in our economic and
social life, between races and re¬
be
enough
a
rifts
have been created
among the va¬
rious groups and classes within
our nation. The rift
between man¬
govern¬
ments be restored to their
proper
committee
proposal
to
people
mand
aged;
that
are now
awakened
an
small
So much for Executive
sys¬
They separated the
gislative,
What is
a
add
In
appropriating
will surrender its
of directing how it shall be
God
irony
schools.
our
liberty
oppression
home to
come
not
of money,
Thank
is
kindness
terrifying
under
which
they
will
labor
throughout their lives. We should
pre¬
"Congress will surrender
power
It
rests
abiding faith.
triotism and work of
In
recent years
chaos, confu¬
incompetence
extravagance,
bureaucratic
those who
powers both divided and balanced.
They deliberately framed
be
effort by ending now
war
administrative
will
National
Board
and
won
impetus would
home.
tax,
huge
this
is
war
strength of America
people, the strength of bur homes,
the spirit of our
churches, the pa¬
ad^-
never
un-American
an
sion,
these
spent."
out
the
the
under¬
gross
the
months
Resources
a
who
must
''of
degeneration.
America will in the years ahead
reflect the personal lives of
our
should
efficiently
It
engraft
the
soon as
Shortly before it expired,
few
a
and
eat
to
and
necessity- It must
and
story.
of
men
But the
and
evidences
are
love,
Govern¬
power
trust-
and spiritual
The
restored.
their
But this does not tell the whole
today that Congress is again tak¬
ing its proper place in govern¬
II
But
and
The
framework of
a
there
We must
,
the
Officers
our
of Federal
honestly
used
em¬
forefathers
our
substance"
statement
the
framed upon the old patterns. And
war.
confidence
be
facts.
a
one
of
adequate.
be
ministered.
military
considered
"swarms
harass
their
its
of
that
have
phrase
of Officers to
People,
substance."
built
up
New
swarms
our
ernment,
tem
continu¬
on
collaboration.
of
hither
their
access
organiza¬
consent
must
growth
exclu¬
are
the
sums
harass
cial
international
observation
would
dicted:
multitude
to raw materials, exploitation of
undeveloped resources, commer¬
an
the
is
to the Executive the power to
and
while
sent
tional problems which have led to
These
problems
include
Such
from
have
derives
in
of Independence charged the King
a
rivalries, air and water rights,
especially monetary stability.
longer
no
in these words: "He has erected
interna¬
kinds,
for
government sup¬
which
ment
in time, of
power
upon reverence and consecration
in every
day human relationships
and the practice of the
human
virtues of truth,
ployees only. In Ohio alone, we philosophy of socialism or abso¬
have today 100,000 Federal civil¬ lutism on our
people. These pow¬
ian employees as
against 22,000 ers are only loaned for the war
State employees.
I venture the period and must be dissolved as
government.
You will remember that
war.
trade barriers of all
exists
figures
persons
the indictments in the Declaration
toward
peaceful solution of the
the
a
shall
we
powers
central
a
the
governed.
cooperative
whatever
precise
organization,
form
no
us.
other
any
which
of
government
it.
over
international
An
and
we
over
herd
these
of
service and relate to civilian
means
for
.to
be restricted to
of
sive
which supports the
people, then the government and
not the people will be supreme
super-government
dictatorial State, to which
subservient.
We
want
are
from
Con¬
government
continuing ob¬
ligation.
•—no
exists
according
the
figure
estimates,
All
As long as
it remains such, the people will be
supreme.
Should
it
become
a
The preservation of peace
constant
a
It
means.
time,
3,500,000.
govern¬
ported by the people.
proval of the people of the United
is
the
benefit
Ours has been
ultimately rest
the understanding and ap¬
upon
of
the
must
peace
this
government
present
latest
Indepen¬
vidual—not that the individual is
one
discussion.
open
of
that
were
power
the
protection and benefit of the indi¬
be worked out in the light of de¬
veloping conditions and after full
and
Declaration
proclaimed
what
that
definite program. The details will
conference
socialism.
ment must derive its powers
the consent of the governed.
sider
for
desires
national
to
and
money
16, 1943
danger; disregard of life and hu¬
man
welfare, breach of public and
572,000 employees. By enjoy
self-government,
policy¬
The United States must help in
policies. We have been living for the end of November, 1941, one making
power must be taken from
every
possible
a decade under
a growing
way
to
restore
abso¬ week before Pearl Harbor, there the hands of bureaucrats
and re¬
oiider and decent living through¬ lutism. Unless these policies are were
1,500,000 of them. By Janu¬ turned to the elected
represen¬
out the world.
We must do our reversed by the American people, ary of this
year, this number had tatives of the
people.
full
share
in
maintaining ade¬ they will unmistakably lead this increased to almost 3,000,000. At
The war
quate
Thursday,'December
around our daily Jives.
That awakening is here today.1 ':
If America is to remain a dom¬
of civil employees of the Federal
Government multiplied more than
five times between 1933 and the
first of this year. In June of 1933
World Liberty: Bricker
^
A|nd this
leads
thought. Gfur
standards
me
to
my
final
members of the New York Stock
moral and spiritual Exchange, will admit Milton W,
must
be
strengthened.
bureaucracy Corruption in public office, greed
Holm to
on
partnership in their firm
Jan. 1, 1944.
Volume
THE
Number 4238
158
COMMERCIAL & FINANCIAL CHRONICLE
500;
Calendar Of tiew
Security Flotations
selling
price
ing
OFFERINGS
CLEARING
CORPORATION
MACHINE
discount
Clearing Machine Corporation has filed
a
registration statement for 20,000 shares
of
common
stock,
$1
par
value.
The
shares registered are already issued and
outstanding and do not cover new financ¬
company
$1,425,000.
Address—6499
111.
63rd
W.
..." ;
■
Business—Manufacture
of
■'
1
•.
■
$1.25,
1,
Oct.
named
the
Fund,
Inc.,
is
Form
Proceeds—For
C-l.
investment.
(12-10-43).
GRAHAM-NEWMAN
$50
OF
OFFERING
the
shares.
Offered
at $25
1943,
15,
Dec,
capital
Wall
stated
value
of
We
below
present
list
a
Issues
of
whose registration statements were filed
Street,
York.
New
Business—Investment company.
Underwriting—Graham-Newman Corpora¬
mined
or
unknown
are
to
whose
Proceeds—The
be offered
holders
the
of
of
the
proceeds
holders
in
shares, registered
and
Utah Power &
to
istration
being sold by certain stock¬
are
who
company
the
from
the
will
sale.
receive
The
and
group
stock¬
Address
shares
and
Rudolph
and
is
W.
Glasner,
president,
held
prior
City,
shares.
sale
be
«f
Form
amend¬
ment on Dec. 6 restating the number of
shares
of, common stock to be "Sold 'at1
19,000.
Initial offering price' is given' at;
$11.25 per share.
Whipple
&
Farwell, Chapman
shares
standing
sold
Clark
given
To
Farwell,, Chapman
&
of
MALLORY &
CO., INC.
City.
-
.
wide
eral
...
Higginson
dividends
by
from
-
.funds of the company.
the
to
using
the
them
to
general
view
a
and
to
expansion of its
the
;
Securities
mission in
which
and
it gives
Exchange
The
bonds
bonds
be
to
to
are
dated
be
sold
mort-,
Dec.
at
1,"
com¬
.
supplied
necessary
on
Dec. 8
on
from
5.30
YY*'awarded
bid of 99.17.
a
:
.
Offered—The
associates
Com¬
100.625
the public offer¬
615
First
offered
and
North
voting
a
1953,
-agreement
Dec.
27,
with
for
the
agreement,
Boston
the
bonds
int.
Corp.
Dec.
and
10
at
i;
:
right
Following is
OIL
cumulative
of
$100
CO.
OF
Co.
of
for
■
a
list of issues whose registration state¬
^
p
value,-; and
par
shares
of
filed
preferred
stock,
indeterminate,
an
of
share. ..The dividend rate
stock,
The
meet
to
shares
.the
preferred
of
[STOKELY
BROTHERS & CO.,
18
'
issuer,
135
South
Salle
La
Street, Chicago.
INC.'.';-. ,:
the
privilege
will
and
The
stock
common
conversion
stock
separately.
filed
Ohio.'1
rates
Building,
! v■'
-
are
♦')
i Business—Apartment house.;
later
at
the
ferred for
at
of
rate
each
date to
record
share
one
shares
8
be
of
named
of
unsubscribed
pre¬
will
stock
be
purchased
by
the .underwriters and offered to the public
at
price
a
Dec.
of
be
of
Stockholders
on
filed
to
the
by
company
amendment,
to
are
meet
1943, to approve the new issue
of cumulative convertible
22,
$10,138,900
preferred
stock
shares
of
which
are
of
the
488,888
additional
stock,
a
portion of
and
common
to
producing
shares
Any
available
be
for
reserved
be
preferred.
served would
for
conversion
not
so
re¬
issuance
for
and
properties
corporate, purposes.
.:
for
1;
to be available for working capital,
capital expenditures and general corporate
pany
;
-..
.
A-2.
(12-8-43),
Form
writers.
&
Co.,
Others
Y>
■;
.:•
■
W
Offering Price to the public Will be sup¬
plied by amendment.
W-YY
Proceeds—Will
100(4 %
of
the
be
used
to
retire,at
face
amount, all of- the
2%% promissory notes of the company in
the principal amount of $2,000,000; retire
3%
-
promissory
notes
aggregating $800,000
and to provide additional working capital.
Registration Statement No. 2-5262.
Form
S-l.
(11-29-43.)
20 CEDAR STREET,
M.
Mackey,
John
trustees,
tration .statement
cates
20
for
voting
for 14,519 common
Cedar Street,
Inc.
Fugard and Frank
have
filed
regis¬
a
trust
shares,
certifi¬
$1, of
par
I
&
INC.
Inc., filed a registra¬
105,032 shares of iV2%
Lines,
cumulative
preferred stock, $100 par value
—convertible prior to 1954.
.Address—5959
.Chicago.
Cicero
South
■
shares
70,925
par
value. '
offered
are
ing
of common
The
shares
already
"•
stock, one cent
of stock to be
issued
and
outstand¬
...
receiving
sists
of
Present
sets.
radio
production
electronic
and
manufactured for the Army
'
Underwriting—Jenks,
is
named
con¬
&
,
selling
sold
Mrs.
by
them
Cora
Foster,
Mrs.
stockholders
are:
for; subscription at $100 a
at
the
rate
each
1943.
of
shares
100
at
seven
share, pro rata,
of preferred
shares
of
of
close
the
held
common
business
Dec.
of
29,
The
subscription warrants will ex¬
on Jan.
10, 1944.
Under¬
writers will purchase unsubscribed shares
and-.offer .;the.m - to public at price to be
named
by - amendment.
Stockholders on
v
at 3
p.m.
and
amounts
to
be
500;
5,000;. Dudley E.
Margaret; Foster, 980;
Casagrande,
1,000;
Mrs.
$10
value,
par
thereof
Florence Freese,
be
that authorized
and
increased
to
2,500,000
shares—against present
authorized issue
of
2,000,000 shares of capital stock, $5
par—and ; 2,817 ; shares of authorized but
unissued
for
porate
continue
common
sale
to, officers
Proceeds—To
be
and
used
to
be
reserved
employes. ' '.'
for general cor¬
1,000; Joseph J. Neri,
the
of
large
specialty
stock
New
York
in
stores
Co.,
the
principal
York
New
underwriter
stock.
common
Registration Statement No. 2-5269. Form
S-l.
by amendment.* The
offers ,the
35,565
shares
of
preferred and. 20,000 shares of com¬
stock.
The; shares
chased
by
the
presently
are
sued and outstanding and
is¬
being pur¬
are
underwriters
from
Atlas
Corporation and its subsidiary Rotary Elec¬
tric
Steel
Co.
Atlas
Corporation, directly
and
Indirectly, has been the controlling
stockholder of the company since its or¬
ganization.
Proceeds—Proceeds will go to the selling
Registration Statement No. 2-5245. Form
A-2.
(10-29-43).
Amendment
Nov.
29,
I
.
to
defer
PRODUCTS
ficate units
FUND,
date
to
be
of
ance.-
^
-
has filed
units
of
a
regis¬
5,000 full paid certi¬
of $100 each;
of
1,000 installment
$100
each,
installment
$100,
with
payment
without
insur¬
,
''Address—506 Olive Street, St;Louis, Mo.
Business—Investment trust.
New
England
Public
to purchase
Service
the balance of
stock at $16.25 per
common
of
the
of
Gas
filed
ago.
issuance
stock
common
Electric
with
of
the
the
Commission
mortgage
rate
Issue
in
bonds.
and
by
of
and
face
registered,
privately
its
in¬
will
be
Proceeds
stock
common
of
The
C.
received
amendment.
the
the
sell
amount
Series
price
to
some
with
stock
common
company will
cash $500,000
is
plan providing that
Co.
will
be*
a
&
Contemporaneously
furnished
from
and
bonds
will
be used to pay a bank loan of
$150,000;
to
pay
cash
to
holders
of
24,550
shares of 7%
prior lien stock of Twin
State
provided
as
amount
an
3%
to
in
merger
to
equal
$110
agreement
in
per share plus
acquire $40,000 of
debentures due Dec. 1, 1956, and $8,-
unpaid
dividends;
of -5%
to
debentures
provide
for
of
subsidiaries
additional
working
and
capital.
Registration Statement No. 2-5250.
Form
(11-11-43).
Registration statement effective 4.30 p.m.,
EWT, on Dec. 6, 1943.
Bids
chase
Rejected—Proposals for the pur¬
195,000"shares of,common stock
of
(no par)
to
received by
were
Room No.
up
11
headed
The
by
First
the company at
168 Parker House,
EWT,
a.m.,
Harriman,
Boston
Boston, Mass.,
13.
Dec.
only one bid received from
There
banking
a
Ripley
&
and
was
which
Corp.,
was
group
Co.
re¬
jected.
DIVIDEND SHARES,
INC.
Dividend Shares, Inc., filed a registration
for 12,500,000 shares of capital
statement
Address—1
Wall
Street, New York City.
company.
Underwriting—Supervised by Calvin Bui-
CORPORA¬
common
shares
and
due
certificates
shares of 6%
Offering—At market.
of
Oct. 31,
1973;
stock, $1 par
deposit for 67,-
cumulative prior prefer¬
Proceeds—For investment.
Registration Statement No. 2-5259.
S-5.
Form
(11-23-43.)
Amendment
filed
Dec,
9,
1943,. to
defer,
effective date.
stock.
ence
Address-—120
111. '
cago,
y
South
LaSalle
Street, Chi-
Equipment Finance Corporation has
consists
products,
gypsum
other
boxboard and vari¬
products,.
dealer
to
selected
and
manager
dealers
will
company
pay
for
the
commission
a
deposit of shares of preference stock pur¬
suant to an offer of exchange.
Offering—The
company
offers to
the
holders of the outstanding 67,373 shares of
its 6%
cumulative prior preference stock
the right to exchange such shares for the
income debentures and shares of
stock
mon
shares of
the
on
of
amount
basis
income
of
$100
for
com¬
principal
debentures
stock
common
and
each
two
share
statement
states
that
the
certain condi¬
tions, to issue to the holders of the 625,340
company
of
shares
standing,
under
proposes,
stock
presently out¬
stock purchase warrants
common
common
4,400
1
shares,
4%
reg¬
non-cumulative
$100 per
share, and 46,000 shares of common stock,
value
par
[The
$10
per
par
value
share.
company's
;
and
assets
*
..
..
liabilities
acquired by Equipment Finance Corp.
and name changed on
Aug. 15,
were
of
preferred,
Del.
1943, to Equipment Leases, Inc.]
Address—Chicago,
111.
Business—Principal business of the
com¬
in its relation with the Curtiss Candy
parent company, consists in the leas¬
ing of trucks to Curtiss Candy Co.
The
company also leases its horses and wagons
pany.
Co.,
to Curtiss used in connection with the dis¬
tribution
and
sale of
Curtiss Candy
Com¬
pany's products.
of
cumulative prior preference stock. The
registration
istered
Series
\; •..
Underwriting—Paul
H.
Davis
&
Co.,
Chicago, is named principal underwriter,
or
EQUIPMENT FINANCE CORPORATION
•
Business—Business
6%
bids
into Central Vermont pursuant
plan
time
filed
Underwriting—No
underwriters named.
Offering—The offering price of the pre¬
stock is $100 per share and of the
common stock $10 per share. The compaiiy
anticipates that all of the preferred stock
ferred
and
common
stock
offered
in
the
pros¬
entitling the holders in the aggregate to
purchase, at a price to be announced later,
208,446 additional shares of common, and
pectus will be sold to employes and officers
of the company, and'employes and officers
of
the Curtiss Candy Co.
and its subsi¬
to
diaries.
issue
and
sell
such
stock not taken up by
The
also
company
to
issue
principal amount of
to
and
senior
of
common
under certain
new
sell
$5,500,000
serior debentures
the proceeds
apply
new
shares
the warrant holders.
proposes,
of
the
sale
of
debentures,
together with
the redemption of the out¬
standing debentures.
There are $7,100,000
face amount of 20-year 5V2% sinking fund
gold debentures, Series A, due March 1,
other funds, to
INC.
Inc.,
payment certificates
insurance, and 4,000
certificate
the
Products
Corporation
has
a
registration statement for $6,737,4%
cumulative
income
debentures
134,746
new
Invite
will
lock.
(subordinated)
and
under¬
stock, 25 cent par value.
effective
TION
373
of
names
company
be
State
merged
1943.
CERTAIN-TEED
the
tration statement for
and
Business—Investment
value,
value.
par
and
integral part
Twin
stockholders.
and
(12-9-43).
ASSOCIATED
will
A-2.
offering price to the pub¬
preferred and etimmon
the
will be supplied
mon
no
195,000 shares of the
offering price to the
supplied by post-effective
stock
2,954 shares of
for
prospectus
5^2%
SERVICE
supplied by amendment.
has agreed
000
&
preferred und
both
conditions,
purposes.-
Associated Fund,
Edward F. Barile,
Avenue,
ous
WEDNESDAY, DEC. 29
Co.,
Fifth
named
..
equipment,
Kirkland
contingencies.
Offering—The 105,032 shares of 4V2%
preferred are being offered by the corpo¬
ration,to the holders of its common stock,
and Navy,
underwriters
certain
system.
Ripley & Co.,
Inc.
• is
named
principal
underwriter.
Others ,will be named by amendment.
transport
Underwriting—Harriman
•.
Address—2600 West 50th Street, Chicago.
Business—Production and sale of radio
,
of
event
Offering—The
lic
to defer
purchase of
amendment.
the
generally of
manufacturing and selling asphalt roofing,
shingles and related products, wallboard
number
Majestic Radio & Television Corporation
has
filed
a
registration
statement '; for
both
Avenue,
..."
Business—-Air
the
for
of
States.
is
1943,
PUBLIC
stock,
U-50
will be
common
,
City,
26,
West
Offering—The
for
Certain-teed
tion statement for
Rule
writers
the
conversion
Underwriting—Allen
300
UNITEp AIR LINES,
Air
the
upon
Address—721
filed
stock,
V
TELEVISION
Offering—Price to the public is $3.75 a
share,
and
net
proceeds to
the selling
stockholders $3,125 per .share. - Names of
INC,
R.
RADIO
CORPORATION
Phila.,
MONDAY/DEC. 20
Lucius Teter.
MAJESTIC
Inc.,- and
named principal under-,
will be named by amend¬
are
'
ment.
Y'Y>?;Y
■ -
Underwriting:—Blvth
issuance
United
Nov.
Underwriting—Shares are to be sold at "<
competitive bidding pursuant to Commis¬
sion's
reserved
common
,v ■
• ■„'•
Business—Owns and operates one of the
..
TUESDAY, DEC. 28
United
of
City."
other
■"
Proceeds—Net proceeds from sale of the
cumulative convertible preferred stock will
be added to the general funds of the com¬
,
shares
are issued and outstanding and
the offering does not represent new financ¬
ing by the company.
stock,
common
price to be fixed by amendment. The
a
88,913
outstanding
ac¬
197,954
an
The shares
be named by amendment.
y'!
Offering—Rights to purchase the new
preferred stock will be issued to common
capital
share.
St., Rutland, Vt.
Business—Operating' public utility.
the sale
t
a
INC.
value, and 108,913 shares of common
stock, par $1 per share.
The latter in¬
the
of
sur¬
share.
TELLER,
par
in
for
the sum
capital
to
such
VERMONT
Address—121
time
Cleveland,
;; '■•
filed
share sof common
public
Bonwit Teller, Inc., has filed a registra¬
tion statement for 35,565 shares of 5!/2%
cumulative convertible preferred stock, $50
cludes
from
credited
Proceeds—Sale
BONWIT
offer,
CORP.
Co.
11, 1943, to defei
$100
share
Central Vermont Public Service Corp. has
filed a registration statement for
terest-
Underwriting—F. S. Moseley & Co., Bos¬
of
CENTRAL
first
end
stockholders
later.
(9-15-43).
and
Amendment
cumulative
convertible
preferred
registered, at the present irate of
conversion, which may vary from time to
.
vegetables and fruits.
Offering—Terms will be filed by amend¬
to
deducted
company
of
each
effective date.
stock
'
Stokely Brothers & Co.,: Inc., has filed a; v, Underwriting—None named.
v.'.
;>
'registration statement for $4,000,000 15Offering—As soon as practicable .after
•yean -3(4%- sinking
Dec. 22, .1943, are to vote on amendments
fund -debentures,; due^ registration statement becomes effective;
Dec. 1, 1958,
Purpose—To extend present trust agree¬ .to, authorize >200,000 shares of cumulative
Yv*- ■■■
vi Kt ivV\t:
Address—941 North Meridian,^Street,-,In-- ment which expires
$100
par,
issuable
in
July,; 19, 1944,»for a preferred .'Stock,
-dianapolis, Ind.
Y'Y'V";',Y
period of 10 years to* July 19, 1954.
" I, series, and 100,000 shares of management
; - Business—Engaged - principally
in : the
Registration Statement No. 2-5263. v Form stock, $10 par value.
Also to authorize
purchase, ' processing,
shares of capital stock of the corporation
packing
and
der F-L V. (12-1-43.)
to
be
.hydrating and sale of an extensive line of
changed into shares of common
Reynolds & Co.
the bid opening will be filed by amend¬
ment later.
company
of
Registration Statement No. 2-5241. Form
of
ton, is named principal underwriter. Others
pire
.
Corp.,
after
the
registration becomes effective, will publicly
Invite sealed proposals for the purchase or
underwriting of these shares.
The result
ment
con¬
shares
the
sum
For
represented by
5V2%
be
are principally
marketing of crude pe¬
troleum and products derived therefrom.
refining
energy
is
8-1.(10-27-43).
gas.
Underwriting—Ogden
and
of
the
pursuant
be
account
for
Business—Direct activities
the
plus
count
the
to
capital
by
retired.
issued
will
$1
will
be
not
conversion
amendment.
Address—Midland
of
the
share
common
generation,
electric
be
of the
offered
by
record
DEC.
par
on
preferred stock' will be supplied by amend¬
ment.
of
is
engaged
distribution
and manufac¬
company
the
of
preference
stock
exchanged
and
shares of preference stock will be
reduced
a
shares
common
in
sale
effective date.
1
has
number
for
SATURDAY,
and
Amendment filed Nov.
$25" per
filed less than twenty
Address—Of
10
101,389
convertible
Jersey
Registration Statement No. 2-5213. Form
OHIO
Ohio
statement
Place,
pres¬
procure~<
debentures
debentures
and
sold
Exchange
The
—
primarily
MONDAY, DEC. 27
purposes,
days ago. These issues
are grouped
according to the dates on which the registra¬
tion statements will in normal course become effective, that
is twenty days after filing (unless accelerated at the dis¬
cretion of the SEC), except in the case of the securities of
certain foreign public authorities which normally become
effective in seven days.
yyV:'Y';Y ...
These dates, unless otherwise specified, are as of 4:30
P.M. Eastern War Time as per rule 930 (b).
Offerings will rarely be made before the day follow¬
ing. ' :, ;'Yy
.:y;:y-'-(
>'
"
were
to
Form
Registration Statement No. 2-5267.
ments
Address— One
<
Oil
be
by Ogden
Corp., as part of Its plan to dispose of its
public utility
investments
in
accordance
with the Public Utility Holding
Company
Act of 1935. i
'
S-l.
Standard
to
the
stock offered will consist of shares
the,
issued
the shares are not
for the account of the
are
and
proceeds
income
such
and
or
They
company.
tured
and
additional
an
outstanding,
being offered by
Business
of
a
registration
the
each
CORP.
City, N. J.
trust
1943,
Registration Statement No. 2-5266.
F-l.
(12-7-43.) - :
oil
effective"
p.m., EWT, on Nov. 29, 1943.
Bonds Awarded—The issue was
:>■'
V'.;.:*/,./'■ j' •
P. R. Mallory cfe Co., Inc., has filed an
.amendment to its registration statement
.with
amend¬
an
$42,600,000 first
cover
being
current treasury funds.
Registration •-. statement
business. yY
'■'
: "' '- -'V
Registration Statement No. 2-5261.
Form
(11-29-43.)
to
balance
peacetime
•A-2.
filed
company
named by the successful bidder.
.The pro¬
ceeds will be used for refunding, with any
peacetime operations and
re-establishment
10,
Pub¬
will
bidding under Rule U-50 of the
Commission to yield the company at least
$41,500,000.
The
interest
rate
will
be
with conversion
in connection
wartime
1943.
petitive
Company is obtain¬
these additional funds with
ing
from
(6-30-43). '
Approved—The
gage; 25-year
Y.YY /YvY'-VY^
added
first lien and
bonds, Series' of
ment to its registration statement in which
it changed the proposed issue and sale of
Corpora¬
plus accrued
1943, will be filed
1,
-
be
March 31,,
Y
vf'':.Y
.
public
Oct.
amendment.
Proceeds—Will
'
granted company
securities
to
at
to
STANDARD
Utah' Company's
On'Nov;
.:
Offering—Price
trust
.
SEC on July 27,
permission to offer
for sale by competitive bidding $45,000,000
1st mtge. bonds, series C.
Interest is not
to exceed, 'iVn'.c. '.
YY-i-.v.
Industrial fields.
Underwriting—Lee
tion.:',
.
V
;./Y' .w;.
Utah Light & Traction Co.'s 30first and refunding mortgage gold
1943
metal¬
establish
dated
used
Issue
manu¬
specialized
Times-Picayune
the
majority vote of the total num¬
of shares deposited under the voting
ber
.
of
range
purposes:
be
31, 1943, these bonds having been guaran¬
teed as to principal and interest by the
Utah Company.
'
:
•
1
:
'
Registration Statement No. 2-5173. Form
applications in the
aeronautical, automotive, electrical, radio,
communication,;- transportation,, and
gen¬
a
will
company,
of
of gen¬
pay
year
lurgical, electrical and electronic products,
for
the
outstanding
*'v": /
of
.
of
sale
of serial
amount, if any,
bonds, Series A, 5%:, of which $11,813,000
face amount were outstanding at March
t>-..:
.
and
certain
to
.
first mortgage
5% ; gold
1944, of which $28,119,000 face
pay
A-2.
Business—Business consists of the
the
be
by
years,
30-year
'
To
share, and 60,000 shares of com¬
par
value, latter reserved
conversion of the preferred stock. !
;
Address—3029
East Washington Street,;
Indianapolis, and 6 East 45th Street, New
facture
sale
1943,:--;
without
shares
28,000
Dec.; 26,
to
extend
issue
of gen¬
1944", of which $4,068,000 face
were
outstanding' at March'31,
lot the
York
from
mortgage " gold
per
mon,
Co.
"4Vis
Mallory & Co., Inc., has filed a
registration statement for 60.000 shares of
4(4%
cumulativeconvertible
stock, par
of
Purpose—To
agreement
run
general
R.
$25
Insurance
issue ' and
of
due
To
voting
yoting trust certificates Is Dec. 27, 1943.
principal and interest to matur¬
the case may be, on Utah com¬
1943.'
CO.
for
Business—Newspaper publisher.
Underwriting—None named.
Offering—Date of proposed offering
Northwest¬
$3,500,000 face amount
amount
P.
from
received
amount1 were
.•
for
ELECTRIC
&
already
registration
a
Address—Of
corporation,
Street, New Orleans, La.
be
will
pay
as
pany's
Co.
;;■';■
from
bonds
original
Offering—19.000 shares (par $1) offered
14, 1943 at $11.25 per share by Bacon,
and Newhard Cook & Co..
be
the following
ity,
is
filed
Commission
GAS
senior
new
retired
Derby Gas & Electric Corp., a subsidiary
Ogden Corp., registered 91,577 shares
of
and
lishing Co., par value $100 per share.
Wyoming.
bonds
certificates
capital stock
amendment.
Life
funds
for
Dec.
Whipple & Co.,
to
Mutual
eral
the 1,597, shares
statement.
*..3
V,;;
named -in
P. R.
by
notes,, and. such
num¬
Association,
the
the
all
of its common stock without par value with
the
SEC.
This
stock
is
26
PUBLISHING
have
trustees
with
DEC.
,
banks
out¬
in place of
597
as
Street
trust
Offering—Offering price to the public
be supplied by amendment.
■
-Proceeds—Net
proceeds,
together with
ceived
sold by John I. Shaw,
nominee,: for
Eleven
central
and
eral mortgage serial bonds of, Ut&h,. due.
serially
1949-1953;
$3,500,000 to
be re¬
certain
by
the amendment the
In
of shares being
ber
northern
and sale of $3,500,000 face amount
5,000,
issued and
are
being
are'
stockholders.
supplied
ern
Baton,'
shares;
are
11,000
Co.,' Chicago,
&
registered
and
Idaho,
southwestern
$3,500,000
Cook\& Co., St; Louis,- 3,000.
and Newhard,
The
an
Underwriters
Chicago,
Co.,
TIMES-PICAYUNE
statement
of¬
fered for sale by the company
pursuant
to
the
competitive bidding rule
of the
Commission.
Names of underwriters will
■,
Clearing Machine' Corp. filed,
Lake
Salt
will
(U-22-43.)
SUNDAY,
public utility operating in
a
Underwriting—The
30,272
Registration Statement No. 2-5258.
■
s-i.
and
Utah
/.
v
-
'
.Building,
:
.
southeastern
director
and
proposed
Utah.
Business—Is
The
14.509.,
treasurer
to
first
.
being sold are:
individually, 2,000; Henry P. Isham, trus¬
tee, 366; Henry P. Isham, trustee, 366;"
Henry P. Isham, trustee, 366; Elisabeth T.
Isham, 796; John I. Shaw, nominee, 1,597,
latter
Kearns
—
Form
a reg¬
$37,000,000
for
bonds, Series due 1973. Interest
rate will be supplied by amendment.
mortgage
number
Henry P. Isham,
selling
Light Co. has filed
statement
OERBY
to
warrants
effective bv the company.
will
investment.
Regis*ration Statement No. 2-5265.
s-5.. (12-2-43.)
UTAH POWER & LIGHT CO.
of
of
deter¬
us.
Offering—At market.
Proceeds—For
purchase
issue
stock not subscribed for by
stockholders and the issue and
common
.
and div. by Lee Higginson Corp.
less
to
commitment for the purchase
a
Proceeds—The
of
not
common
clared
twenty days or more ago, but
offering dates have not been
share
per
stock, minimum
share.
per
Address—52
1
•
.
of
Company
company.
of
proposal
tingent upon the exchange offer being de¬
UNDETERMINED
tion is named sponsor.
of
holders
the preference stock
The
stockholders
common
ment of
any
DATES
date
offer.
stock
common
sale
CORPORATION
Corporation has filed
statement for 8,040 shares
registration
the
common
Graham-Newman
a
certain
a
57,250 shares of
accept
ent
TUESDAY, DEC. 21
Lee
within
than
sponsor.
Offering—Date of proposed offering Dec.
7, 1943.
Offering price 100.
Registration Statement No. 2-5270. Form
ferred
ing machinery.
Underwriting—Bacon,
Whipple
&
Co.,
Chicago,
head
the
list,
with
names
of
others to be supplied by amendment.
Offering—Price to public to be supplied
by amendment.
Underwriting—Associated
and
by
stockholders.1'
also
registered 60,000 shares of common, stock,
without par value, to be reserved for issu¬
ance
solely upon conversion of the pre¬
"
56,945,
received
(12-1-43.)
netting
1943.
be
funds
work¬
metal
from
Tracey,
Registration Statement No. 2-5264.
S-l.
$23.75
a
share or a
total of
Offering price to public is plus
dividends
L.
Corp, is principal underwriter.
Net proceeds will be added to the general
Chicago,
Street,
of
commissions
of
Higginson
ing by the company.
-
less
share),
per
or
accrued
4(4 #
stock at
underwriting
60,000 shares
preferred
convertible
($25
par
the
on
cumulative
Marie
Mrs.
Mrs. Janet M. Van Meter, 5,000.
Proceeds—All, will
2443
1948,
of
now
the
new
finally
outstanding.
The interest
senior debentures
determined,
but
will
has
not
not
rate
been
exceed
4
Vzfo per annum. The income debentures
will ,be subordinated to the new serior de¬
bentures
and
company; ■
to
revoke
to
other
indebtedness
of
the
The company reserves the right
the
offer
of
exchange
unless
...
Proceeds—The
company
proposes
to use
from the sales of stock
of financing the acquisi¬
tion
of factory
and warehouse buildings
which
may
be Required by the Curtiss
Candy Co. and its subsidiaries to the ex¬
tent of $200,000, and the balance will be
used to acquire, when available, of approx¬
imately 500 trucks to be used in the opera¬
tion of the Curtiss Candy Company's fran¬
chise method of distribution.
the
net
proceeds
for
the
purpose
Registration Statement No. 2-5233. Form
S-l.
(10-15-43).
Registration
p.m., EWT, on
statement
effective
3.30
Nov. 29, 1943, as Of 5.30
EWT, on Nov. 25, 1943.
(This list is incomolete this week)
p.m.,
THE
2444
Thursday, December 16, 1943
CHRONICLE
COMMERCIAL & FINANCIAL
Dow Chemical
For Dealers
Teletype—N. Y, 1-9T1
IIAnover 2-0050
Markets
Firm Trading
stocks with
5
Home
BRAZIL
PERU
-
BOLIVIA
-
$4, Pfd.
...
post-war prospects
Merrimack Mfg. Co.
Pick Up,
in the Non-Stop Air
Laundry, Electronics, Die Casting
and Television fields.
Seaboard Air Lines
Common & Preferred
Inc.
All American Aviation,
Foreirn Securities
all issues
Bendix Home
r.O. INC.
r.ARL MARKS &
Appliances, Inc.
Allen B. DuMont
FOREIGN SECURITIES
Harvill
SPECIALISTS
Laboratories, Inc.
I. S. WlEN & CO.
Corporation
Members N.
Y. Security Dealers Ass'n
HAnover 2-8780
25 Broad St., N.Y.
New York 4, N. Y.
50 Broad Street
—ami iflTF
Majestic Radio & Television
Inc. CHICAGO =-^
CARL MARKS & CO.
•
and Information on
On Governments"
By S. F.
weeks.
.
offer of 100 8/32.
few
;
.
.
.
.
.
COUPONS MISSING
New
OR
Teletype
Bell
Enterprise
2-3600
,
NEW YORK 5
telephone
6015
philadelphia
TELEPHONE
RECTOB
Dealers Association;
Security
York
york
1-576
.
.
,
.
BIDS MADE ON BONDS WITH
Company
STREET,
NASSAU
45
Indicating a close trading
a
New
Members
situation and generally
more healthy situation.
Interest in the market is concentrated
in this bond, however.
Other loans on the list have been doing
little, sliding a bit, rising a bit from day to day. . . . And as predicted
here in the last month, chances are the market will continue compar¬
atively lifeless until the January reinvestment demand and the official
support preparatory to the fourth war loan enter the picture. . . .
What's significant, though, is that the 2s are "coming into
their own."
The weak holders have been well cleaned out... .
The dealers still own plenty of the 2s and will remain large
holders until well into the fourth loan, but traders outside the
inner circle have been liquidating on a large scale for months...,
"iAnd now the market is in a healthier position than in a long
.
.
...
'
Inquiries invited
Slock liarke! Next Year
Sees Runaway
S. H. dUNGER CO.
R. Clark Co., 71 Broadway, New
comments regarding the future trend
Clark of Ambrose
Ambrose R.
makes the following
of tlio stock HiHrkctl
York,
Members
40
Phone
and velocity to money inflation will become
March 30 and Sept. 1, next year, with currency
in circulation June 30, next, about $45,000,000,000.
That will rep¬
resent about a 60 cent dollar in<$
to
Y-.
Ass'n
Dealers
Security
DIgby
4-4833
Teletype n.
1-1779
Y.
between
.
.
.
According
N.
Exchange PI., N. Y. 5, N. Y.
"I estimate volume
evident
terms of purchasing power. When Somers & SchaferTo Admit
these
idle and hoarded dollars
Somers & Schafer, 50 Broad¬
dealer, the 2s are anywhere from As to y4 run to cover we shall see some
way, New York City, members of
underpriced. . . . Behind the market to such an extent, believes, this fireworks on the upside of the the New York Stock Exchange,
source, that the loan could sell at 100% with other issues at exactly
markets. The SEC will be power¬ will admit Helen D. Schafer and
today's prices.
less for there will be no near of¬ Katharine M. Schafer to limited
This house also insists that the only worthwhile major switch in ferings of hundreds of security
partnership in the firm on Jan. 1,
the market today is out of issues selling nearby the 2s and into this items.
The picture is not so good
1944.
one underpriced issue. . . .
For an intermediate turn. .
when you stop to examine it care¬
Incidentally, on the 28th day after the opening of the books on fully.
I am afraid the average
the 2s of 1955/51, that bond was selling at a premium of 22/32. . . , person will be AN ALSO RAN if
Game well & Co. To Admit
time.
1-1397
INCORPORATED
PORTER
strength steadily in the last
this writing, the bid is 100 6/32 against an
At
.
Y.
N.
request
markets
Kobbe, Gearhart &
1953/51 have been gaining
The 2s of
Teletype
Corp.
Trading
U0ur Reporter
"A"
Series
Indiana Limestone
one
he or she does
not watch out
after the third war loan, the 2s of 1953/51
closely.
With bond redemptions
are selling at a premium of 6/32. ...
increasing,
$300 mustering
out
There's a whole story of the market and the sluggish period
pay, social security payments, we
through which it has been going in those two comparative quota¬ face so much money in circula¬
tions.
tion, its value will be in question
except at a discount."
DISINTEREST '
Today, three months
Gamwell
New
York
New York
admit
&
40
Co.,
Wall
6s, 1952
Mission Oil
Common
L. D. SHERMAN & CO.
Members N.
St.,
City, members of
the
Stock Exchange,
will
Y. Security Dealers
Ass'n
Street, New York 5
Pine
30
Tel. WHitehall 4-7970 Tele. NY 1-2218
BUY WAR BONDS
Ruth Hoffman to partner¬
m
Government market—and about all
securities markets, for that matter. . . . The important participants
usually move "as a body."
.
.
When prices are cheap and action is
obviously called for, investors may hold back and refuse to follow
advice, regardless of coaxing. . . . When prices are high and con¬
servative liquidation is called for, the same disinterest in action may
continue until a certain, psychological moment. ...
It's
an
All
A
this
is
a
prelude to the statement that
.
Buy
bottom."
the 2s a few weeks ago, when the pur¬
suggested for the "carry" advantages in this space, he
now would have a comfortable interest return behind him, a profit of
a 32nd or two and a good chance for additional appreciation between
now and January 15.
investor bought
an
chase first was
.
The
But
reasoning applies to the 2%s.
same
,
until early January.
strong rally.
...
Nor for any big move in either direction until
period just preceding the fourth loan.
If you
short turn.
have
.
.
.
this psychology will
So there's not much hope for a
...
.
.
the
.
extra cash, consider purchase of the 2s
some
Or if you need tax-exemption, the
for a
23/4s at the admit¬
tedly high premium of 11 points will give you your answer on a
longer-term basis.
...
'
*
.
bonds of
9/15/59/56, quoted at 111.8 to
.
.
American
yield 1.47%
most attractive bond. ...
By lengthening your maturity one year, you gain 11 basis points
in yield, add U % to coupon. . . , Your cost goes up slightly, it's
admitted, but the offset of higher yield and current coupon may
be considered sufficient to overcome that one disadvantage.
question here on the
Despite the poor action of the tax-exempts in the market in
months, this observer still believes the exempts are attractive
because of their ever-increasing scarcity value. . . . Their plain use
congress
war
held
industry,
the auspices
.
There's no
second
At the
-
•
»
yield 1.31%
3/15/58/56, quoted at 103.9 to
of
under
of the National As¬
sociation of Manufacturers in New
.
intermediate
York
the
at
Waldorf-As¬
Hotel
toria, Dec. 8, 9 and 10, Robert M,
Gaylord, President of the Ingersoli
Co., Rock-
Machine
Milling
ford, 111., was elected President of
the National Association of Man¬
ufacturers to succeed Frederick C,
Again, speaking of switches, the big one is_out of
the 2s of 1953/51 or the 2s of 1955/51. . . .
Don't forget, there'll be no more 2s in January or February. , , . Crawford, President of Thompson
The speculators have been cleaned out considerably. ...
Products, Inc., of Cleveland, O.
The banks may not be able to buy enough 21/4s to satisfy their Mr. Gaylord will take office on
needs in the early months of 1944 and they'll be compelled to turn Jan. 1, 1944.
Mr. Crawford, at
back to the open market for securities to fill out their portfolios. . . . that time, will become Chairman
The obvious bond for them then, will be the 2s. . . .
of the NAM Board of Directors,
bonds and into
INSIDE THE
One
William P. Witherow,
Blaw Knox Com¬
succeeding
.
.
disinterest^ has been the keynote of the market for some
and best opinion in Wall Street Is that
continue
bor^ds of
the*2%%
after taxes.
.
supported by authorities at a "par
weeks
sfter taxes
the market has
institutions and inviduals with some idle cash
excellent opportunities for safe investment and good "carry"
since November.
,
And to the statement that investors have
been holding back despite the clear profits to be obtained by pur¬
chase of securities close to par, returning 2 or 2%% interest and
Nal'l Ass'n Of Mfrs.
POSSIBLE SWITCH
Sell the 2%%
offering
Had
New Officers
odd thiiig about the
.
been
January 1st.
ship in the firm on
MARKET
President
dealer with excellent
connections reports the plans
of the
permitting the banks to buy the 2y4s in the fourth war
loan drive will give smaller institutions just a few bonds. . . . Not
enough to bother about or to stimulate market activity. ...
He forecasts many small banks will get only 25 or 50 of the 214s
and "when they get so little on an issue, the tendency is to put the
bonds away and forget them." ...
Treasury for
possibilities of
wide popu¬
This, he believes, will interfere with the trading
the new 2y4s and will keep the issue from enjoying the
of
who be¬
Pa.,
pany,
Pittsburgh,
comes
Chairman of the Executive
Committee.
Good Post-War Outlook
Buckeye Incu¬
is an interesting
stock with good post-war outlook,
according to a study of the situa¬
tion
issued by Taussig, Day &
Common stock of
bator
Company
undoubtedly will have later. . . . { .
• is that insurance companies will buy a
Company, Inc., 506 Olive St., St.
period of record-high taxes.
The fact that the sellers of large percentage of the 2%s ai^d will stay away from the 2y2s as
Louis, Mo., members of the St.
exempts are gradually coming to the end of their portfolios. , . . much as possible. ... Angle here is that these institutions have too
And buyers of exempts may hold the securities indefinitely. ...
many 2Y2S, want to vary their portfolios a bit. .
Will, therefore, Louis Stock Exchange. Copies of
The 2%s of 1965/60, selling at 111.15 at this writing, have been sacrifice the difference in coupon in order to get a shorter maturity this interesting circular may be
had from the firm upon request.
neglected in recent weeks.
They're down 1% points from their and a different type of bond. . . .
recent
in
a
.
.
1943
high.
.
.
larity it
Another report around
.
.
...
Feeling generally is
that Secretary Morgenthau made a
mis¬
another 2^4% bond.... Market has had plenty of
these, doesn't need any additional loans with this maturity and
rate.
This should be the last 2^4% bond for some time, if
Morgenthau follows the advice of experts. ...
take in offering
INDEX
...
Page
Bank
Insurance
and
Stocks
Calendar of New Security
Canadian
HAY, FALES & CO.
Members New York Stock
71
Exchange
Broadway N. Y. BOwIing Green 9-7027
Bell Teletype NY 1-61
Our
Reporter's Report
Reporter on
Public
2423
..2439
the speech that Under¬
the Treasury Daniel W. Bell is scheduled to make in
secretary of
Bell rarely talks unless
specific to contribute to Government financ¬
Worcester, Massachusetts,
he
has
something
ing circles and to
is Bell will
2417
Securities
Estate
Securities.,
Security Salesman's Comer
Tomorrow's
Says
....2437
.
fortnight ago.
Tin Plate
.
.
.
rate structure upon peace
6s, 1948
.
than
has been overdone, insist market control
in years following war as now.
.
available
upon
request
Report
Dealers believe worry about changing money
will continue as strong
Memorandum
and will
affecting all markets but is less of a factor
.
First Mortgage
.
market policy in post-war era/.
give some hint on
Markets—Walter Whyte
2418
.
knowledge about the Treasury's program....
12419
a
tonight.
emphasize long-term trend of easy money rates
..2420
Peace talk still
Real
Empire Sheet &
in Wall Street concerning
Much gossip
2437
Governments—..2444
Utility Securities
Railroad
.2427
Trusts...
Municipal News and Notes
Our
..2438
Flotations.2443
Securities.
Investment
.
Hili, Thompson & Co., Inc.
Markets and Situations
120
for Dealers
Broadway, New York 5
Tel. REctor 2-2020
Tele. NY 1-2660
@FedFRASER